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Oral Answers to Questions
(2 years ago)
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Duncan Baker (North Norfolk) (Con)
Mark Pawsey (Rugby) (Con)
The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (Leo Docherty)
The Prime Minister and the Foreign Secretary, after coming into their roles, made their first foreign counterpart calls to President Zelensky and Foreign Minister Kuleba of Ukraine, respectively. Last week, at the G7 in Germany, the Secretary of State, with other leaders, expressed solidarity with the Ukrainian people and condemned Russia’s outrageous invasion of Ukraine. Our total economic and humanitarian support to Ukraine has been more than £1.5 billion, with vital humanitarian aid helping more than one in four Ukrainians.
Duncan Baker
This week, a group of my constituents will journey to Ukraine to deliver urgently needed humanitarian support for what will be a very cold winter. They are not alone, as great swathes of the British public have done extraordinary acts of kindness to help Ukrainians in desperate need. Will my hon. Friend please commend my constituent Rob Scammell from North Walsham for what he has done, and comment on the steps his Department is taking to help Ukrainians in the light of Russian attacks that have damaged civilian heating and water supplies?
Leo Docherty
I join my hon. Friend in thanking Rob Scammell and others who are providing important aid to Ukraine. Although our strong advice is that individuals do not travel to Ukraine and find other ways to support Ukrainian civilians, I want to put on record my thanks. Such humanitarian aid is very significant, and electricity generators are also being sent to Ukraine to help people keep warm over the winter. This reflects the tremendous spirit of generosity within the British public, which my hon. Friend, who I think was the first Member of Parliament to receive a Ukrainian family into his home, also demonstrates. I thank him for that too.
Mark Pawsey
Almost daily, we see Putin’s army targeting civilians: the young, the elderly and the vulnerable. I am very proud, as I am sure we all are in this House, that the UK is the European country providing the most support—from not only the Government but, as we have heard, teams of volunteers. Will the Minister welcome the work done by Bags of Joy in my Rugby constituency, which is sending bags of treats and goodies to some of those affected by this most appalling war?
Leo Docherty
I join my hon. Friend in thanking Bags of Joy for sending those products to Ukraine, which is good to see. I think the generosity from his Rugby constituents shows that Ukraine has many friends and Russia in this instance has none.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
Part and parcel of our support for Ukraine is how we look after Ukrainian refugees. I know of examples in the north of Scotland of their finding the bureaucracy involved in accessing universal credit very difficult. Although Work and Pensions is not his Department, does the Minister agree that a one-point telephone number and a dedicated team in that Department would help sort out this problem?
Leo Docherty
The hon. Member is right to point out the amazing scale of the issue, with more than 140,000 Ukrainians having received visas and living in the UK, but I will take away his helpful suggestion and we will see whether that is in place.
Chris Bryant (Rhondda) (Lab)
Whatever Americans vote for today, I hope they stick with supporting Ukraine over the next few months. May I ask a question I have asked the Minister before—so I hope he knows the answer by now—about the Abramovich money? Chelsea was sold for £3.5 billion many months ago. Has that money yet got to Ukraine, and if not, why not?
Leo Docherty
I am very pleased to be able to provide an answer. The money is still frozen in a UK bank account. The administrative work is being done and a licence is being applied for, but we hope it is on the start of its journey to Ukraine to help the people where they need help.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
The Minister will know the resolute support across the country, and across the House, for Ukraine. The people of Ukraine should know that and, indeed, Vladimir Putin should know that. However, there are unfortunately some siren voices suggesting otherwise, including from the far right of the US Republicans, and this is hugely dangerous. What are the Minister, the Foreign Secretary and the Prime Minister doing to challenge those who would give encouragement and succour to Putin in his barbarous actions?
Leo Docherty
On all three fronts—diplomatic, economic and military—I think the whole world has come together. That was made very clear by the Foreign Secretary at the G7 last week. Looking at some of the statements about solidarity at COP today, I think Russia has a very long border and very few friends. We are stronger because we are together, and I think that is very clear.
Kate Osamor (Edmonton) (Lab/Co-op)
The Minister for Development (Mr Andrew Mitchell)
Nigeria is one of the world’s most vulnerable countries to climate change, and it is experiencing the worst floods in a decade. The UK is providing support through the multi-donor Start fund, which has allocated £580,000 so far this rainy season. That funding is supporting 26,288 people affected by flooding. We will continue to help Nigeria make progress towards long-term climate change adaptation and resilience.
Kate Osamor
I welcome the Minister to his place. The floods in Nigeria have already left more than 1 million people displaced, 200,000 homes destroyed and, sadly, 600 people dead. In the wake of those floods, cholera cases are skyrocketing in some areas, due to a lack of access to clean water. Will the Minister assure me that the Government will be focusing aid to help ensure access to water and sanitation, and prevent the death toll from rising further?
Mr Mitchell
I thank the hon. Lady for her comments and her question. Over the past five years, Britain has provided £425 million of humanitarian support, which has specifically reached more than 2 million people in north-east Nigeria, including individuals affected by the flooding. I give her a commitment that, working with Nigerian agencies, we will seek to strengthen flood risk management. Prior to COP26 we supported Nigeria’s national adaptation work to help cope with climate change.
Preet Kaur Gill (Birmingham, Edgbaston) (Lab/Co-op)
I welcome the right hon. Gentleman to his Cabinet role. I know that he believes in the difference that international development can make, and I wish him well in persuading his Cabinet colleagues. Asylum applications are delayed by the thousands, spending on temporary hotels is soaring, and the Home Office is in turmoil. To bail it out, the Minister has seemingly written the Home Secretary a blank cheque out of Britain’s aid budget, spending £3.5 billion that is meant to be tackling the root causes of mass displacement. Since 2008, 41 people have been forced from their homes every minute by the climate crisis, and the floods in Nigeria, where 200,000 homes are under water, surely show that the climate emergency is here, it is now, and UK aid is needed more than ever. Will the Minister agree to carry out an urgent review of all Home Office official development assistance expenditure, and consider whether it is delivering value for taxpayers’ money? Will he please tell the House how long he is happy to let the Home Secretary have free rein over his budget to mop up a domestic crisis of her Department’s own making?
Mr Speaker
Please, it is questions. Other people have to get in as well. It is not just a Front-Bench show; this is for Back Benchers.
Mr Mitchell
The hon. Lady, whom I thank for her generous remarks, did not really refer to Nigeria. In so far as the budget is being spent in Nigeria, I assure her that we are very focused on the effects of those floods. There are people now in category 5 starvation in north-east Nigeria, and I assure her that we will do everything we can to help them.
Alyn Smith (Stirling) (SNP)
I, too, welcome the Ministers to their place, and I look forward to working constructively with them. I am glad that aid is going to the dreadful situation in Nigeria, but surely that illustrates the wider point that we cannot do more with less. Surely now is time to reinstate the 0.7% aid allocation, because these events will increase going forward.
Mr Mitchell
The hon. Gentleman makes a lot of sense, and he knows where I stand on these matters. Fortunately, collective responsibility is not retrospective, and I assure him that we are focused on the issues he has raised. I hope very much that when we have the autumn statement next week, there will be encouraging news.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
The Minister for Development (Mr Andrew Mitchell)
The humanitarian situation throughout Somalia is grave and has worsened significantly over the past 12 months. The number of people affected by drought has more than doubled since January, with more than 7.8 million people—almost 50% of the country—now in need of humanitarian assistance. More than 300,000 people are facing catastrophic levels of food insecurity.
Mr Dhesi
Mortality and malnutrition are at alarming levels, with 300,000 people expected to face famine in Burhakaba and Baidoa. Sadly, children in Somalia are bearing the brunt, with half a million needing treatment for severe acute malnutrition, and they are much more likely to die of diarrhoea and measles. As families make desperate survival decisions, women and children will face gender-based violence and child marriage. Rather than continuously, callously cutting aid budgets, what will the Government do to honour their commitment to protect women and girls before it is too late?
Mr Mitchell
Under the category 5 definition—those people who are on the brink of starving to death—there are nearly 1 million people in the world today, and 300,000 of them are in Somalia. There is, therefore, no question at all about the need. I hope to go to Somalia before too long to see for myself what more we can do, but I should emphasise that UK-funded programmes are ensuring that emergency cash transfers, which are very important, are reaching 310,000 people. On the hon. Member’s specific point, in terms of water and sanitation, we are helping 483,000—
Mr Speaker
Order. This also goes for the Government side of the House: we have to get Back Benchers in; it is not just a show for Ministers and their shadows.
Mr David Davis (Haltemprice and Howden) (Con)
I warmly welcome my right hon. Friend’s much overdue return to the Front Bench. His return is to the Government’s advantage but also to the advantage of millions of men, women and children who rely on Britain’s leadership in aid, which he has been singularly forthright in pursuing.
May I bring my hon. Friend back to the issue raised by the hon. Member for Birmingham, Edgbaston (Preet Kaur Gill) about the resources available for aid? Yesterday, the front page of The Times told us that millions if not billions of British money is being diverted from aid, saving the lives of children in north-east Africa, to the Home Office—
Mr Speaker
Order. It is not just about shadow Ministers and Ministers; it is also about ex-Ministers. [Laughter.]
Mr Mitchell
I thank my right hon. Friend very much for his kind remarks. He knows a great deal about this area, and the House benefits from his judgment and experience on it. In respect of The Times yesterday, all I can tell him is that these matters are very much the subject of discussions between the Foreign Office and the Treasury.
Ms Lyn Brown (West Ham) (Lab)
I also welcome the Minister to his post. Across east Africa, somebody is dying of hunger every 36 seconds. One hundred people will die in the time that Ministers are at the Dispatch Box. At COP, countries such as ours are urged to cover the cost of adapting to global heating in extremely vulnerable nations, but, despite soundbites from No. 10 about helping countries with the existential threats that they face, our Government are cutting support for countries such as Somalia. Will he demonstrate that he understands the real human cost of climate change by promising immediate assistance for food and climate support in Somalia?
Mr Mitchell
I thank the hon. Lady for her kind remarks. The international community is scaling up in Somalia and in Ethiopia. The World Bank and the African Development Bank have announced more than $35 billion of funding for food security across the region.
Alexander Stafford (Rother Valley) (Con)
The Minister of State, Foreign, Commonwealth and Development Office (Anne-Marie Trevelyan)
We warmly welcome all those who have taken up the BNO visa route. This route is about our relationship with Hong Kong and its people. The BNO visa scheme was introduced in response to China’s breaches of the Sino-British joint declaration, including its imposition of the national security law, which has been used to undermine rights and freedoms in Hong Kong.
Alexander Stafford
I deeply commend the Government on implementing the impressive, tailor-made British national overseas visa and standing up for the Hongkongers in the face of growing repression from Beijing. British nationals overseas are Britons, and it is important that we defend them at home and abroad. In the light of the recent assault on a Hongkonger inside the Chinese consulate in Manchester and the increasing harassment of Hongkongers by the Chinese state all over the world, will my right hon. Friend commit to protecting the British Hongkongers?
Anne-Marie Trevelyan
We are steadfast in our support of the Hong Kong BNO community. Those who choose to live their lives in the UK should enjoy the same freedoms that are afforded to any nationality. As British nationals, BNO passport holders are entitled to consulate assistance from our diplomatic posts overseas.
Mr David Lammy (Tottenham) (Lab)
For years, the Conservative Government have failed to act strategically on China. Most recently, the Foreign Secretary ducked responsibility by letting officials meet the Chinese embassy over the Hongkonger beaten in Manchester and gave no answers about the troubling reports alleging that Chinese police stations are operating in the UK. Our allies and partners around the world are taking major strategic steps on China. Last month, the US announced the CHIPS and Science Act 2022. Last week, the German Chancellor got Xi Jinping to publicly oppose the use of nuclear weapons. The UK has not even published a long-promised strategy. Do the Government still plan to publish a China strategy and, if so, by what date?
Anne-Marie Trevelyan
The UK is clear that China remains in an ongoing state of non-compliance with the Sino-British joint declaration. We have also been clear that the imposition of the national security law and the overhaul of Hong Kong’s electoral system have undermined the rights and freedoms promised to Hongkongers. We continue to work with our international partners to hold China to its obligations. We will continue to work across Government on the question of a China strategy.
Florence Eshalomi (Vauxhall) (Lab/Co-op)
The Minister for Development (Mr Andrew Mitchell)
The UK is committed to working in partnership to deliver on the global AIDS strategy and ending the epidemic of AIDS by 2030. We provide substantial funding to the World Health Organisation, UNAIDS, the Robert Carr Fund and the Global Fund. Together, we are working towards ensuring that all can access the prevention and treatment services needed to ensure progress on HIV/AIDS.
Florence Eshalomi
I welcome the Minister back to his place. Globally, the number of new infections dropped by only 3.6% between 2020 and 2021, which is the smallest decline since 2016. The data shows that it disproportionately impacts adolescent young women and girls. We must do and can do more to help those girls if we are truly to end new HIV transmissions. What plans does the Minister have to ensure that the Global Fund receives a pledge, so it can carry out vital programmes if we are to end new transmissions of HIV by 2030?
Mr Mitchell
The hon. Lady is absolutely right about the critical importance of the Global Fund’s work. The Global Fund has saved more than 50 million lives. It was very heavily reformed in 2010. Two thirds of the money goes towards the Commonwealth and it is brilliantly effective. She can rest assured that we are looking very carefully at the pledge we are going to make.
Chris Law (Dundee West) (SNP)
I welcome the Minister for Development to his place. As a Back Bencher, he spoke passionately and frankly in holding his party to its manifesto commitments on international development, and I applaud that. Indeed, in July he said:
“I urge the Government to ensure that we are as generous as possible on the replenishment of the fund”.—[Official Report, 6 July 2022; Vol. 717, c. 922.]
Yet today, under his ministerial role, not a single penny has been pledged to the Global Fund to Fight AIDS, Tuberculosis and Malaria. I just heard him say on the record that it will continue to be supported substantially, so he may wish to correct that. Words are deeds, so will the Minister put money where his mouth is and join the other G7 countries by making a late donation to the Global Fund and delivering what his party promised?
Mr Mitchell
I can assure the hon. Gentleman that our support throughout the whole House for the Global Fund is absolute and intense. Discussions are ongoing on the subject of money. I hope very much it will not be too long before I can come before the House and answer his very specific questions on both the money and the results that that money will achieve.
Mr Speaker
I call Dr Jamie Wallis. Not here, but can the Minister answer as though he was?
Dr Jamie Wallis (Bridgend) (Con)
James Daly (Bury North) (Con)
The Minister for Development (Mr Andrew Mitchell)
The UK puts human rights at the heart of what we do. That includes: leading efforts to hold Russia to account over its actions in Ukraine and at home; leading on United Nations Human Rights Council resolutions, including on Syria, Sri Lanka and Somalia, and a joint statement on Xinjiang; and sanctioning officials involved in human rights violations in Iran.
James Daly
Thousands of my constituents are concerned about the ongoing human rights abuses in Indian-administered Kashmir. What steps are the British Government taking to raise those concerns with the Indian Government and ensure that human rights are protected and respected for all throughout the region?
Mr Mitchell
I thank my hon. Friend for his comments. Any allegations are deeply concerning and must be thoroughly investigated. We raise concerns with both Governments, and we can do so because relations are so close and mutually beneficial.
Liam Byrne (Birmingham, Hodge Hill) (Lab)
I welcome the right hon. Gentleman, my constituency neighbour, to his place. Our ability to act as human rights defenders around the world would be much stronger if we collectively hit the G20 target of lending $100 billion of the special drawing rights issued last year. To date, the UK has committed to sharing only 20% of its special drawing rights. That fraction is much lower than France and China. What is he doing to get a grip of the Government achieving the aim of sharing a much higher proportion?
Mr Mitchell
The right hon. Gentleman, my constituency neighbour, has raised with me privately the issue of SDRs. I agree that there is much more that the international community can do to use those SDRs for the benefit of the poorest people in the world, whom we wish to help. All I can say today is that those discussions with the Treasury are ongoing.
Caroline Lucas (Brighton, Pavilion) (Green)
I welcome the Minister back to his place. Today will be the third day that Alaa Abdel Fattah—a pro-democracy activist and British citizen—has not consumed any water. The Minister will know that he has been in prison in Egypt for nine years and that he has been on hunger strike for more than 200 days. With the eyes of the world on COP27, will the Minister confirm that the Government will not allow Egypt to get away with using the summit to paper over human rights atrocities and that every UK channel is being used to secure Alaa’s release? And will he make really clear the consequences if Egypt were to allow Alaa to die in prison?
Mr Mitchell
I thank the hon. Lady for her kind remarks, her question and her concern. That matter was raised specifically by the Prime Minister at Cabinet this morning. He spoke to the Egyptian authorities and I have no doubt that the arguments that she put were strenuously emphasised by the Prime Minister in those discussions.
Theresa Villiers (Chipping Barnet) (Con)
Iran has one of the worst human rights records in the world, and I am sure that is one reason for the extensive protests. Will the Government ensure that if the joint comprehensive plan of action is revived or replaced, it will place strong obligations on Iran to repair its appalling and shocking human rights record?
Mr Mitchell
My right hon. Friend raises a most important subject. What is going on in Iran is of immense concern to the Government. I will ensure that her comments are carefully recorded for the Foreign Secretary.
Mr Gregory Campbell (East Londonderry) (DUP)
The Minister will be aware of the tremendous work done by the charity Open Doors over a number of years. Will he ensure that when cases are brought to him about human rights abuses against Christians and other religious believers across the globe, they will receive his attention and that appropriate action will be taken in respect of the nations that carry out those abuses?
Mr Mitchell
The hon. Gentleman raises a most important point, and the answer is yes.
Mr David Lammy (Tottenham) (Lab)
Let me return to Alaa Abdel Fattah, a British citizen and democracy campaigner who was imprisoned in Egypt for sharing a Facebook post. His mother waited outside Wadi el-Natrun prison on Monday for the weekly letter from her son, but no letter came out. He has stopped drinking water and his life is now in grave danger. For too long, the Government’s diplomacy has been weak. The Prime Minister raised the case yesterday but failed to secure consular access before he did so. What diplomatic price has Egypt paid for denying the right of consular access to a British citizen? Will the Minister make it clear that there will be serious diplomatic consequences if access is not granted immediately and Alaa is not released and reunited with his family?
Mr Mitchell
The shadow Foreign Secretary is absolutely right to raise that case. For that reason, the Prime Minister made a particular point of making representations to his opposite number in Egypt, and I very much hope that those representations will be heard.
Kim Leadbeater (Batley and Spen) (Lab)
The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (David Rutley)
There are no plans to move the UK embassy in Israel from Tel Aviv. Israel is a close friend and a key strategic partner, built on decades of co-operation. We will continue to strengthen our relationship with Israel through our embassy in Tel Aviv.
Kim Leadbeater
I am very pleased to hear that, as I know my constituents will be. However, why was that move ever under consideration, given that last month at the United Nations, 143 countries, including Israel and the UK, voted to reaffirm that any unilateral annexation of territory by another state is a violation of international law? Navi Pillay, the former UN High Commissioner for Human Rights, has observed that unless that principle is applied equally to the Occupied Palestinian Territories, including East Jerusalem, it would become meaningless. Is this not just another example of the Conservative party’s chaotic approach to international relations that has so badly undermined the UK’s reputation on the global stage?
David Rutley
The Government have looked at this issue. There are no plans to move the British embassy in Israel from Tel Aviv. We will continue to work to ensure that we are in the best position possible to continue promoting peace and stability in the region and supporting a two-state solution.
Richard Graham (Gloucester) (Con)
I welcome the Minister’s update. Will he reaffirm that that is the long- standing position of our country; that it is the right position internationally; that the work done by our consulate-general in Jerusalem is extremely valued and complements what is happening in our embassy in Tel Aviv; and that that will continue to be the case?
David Rutley
My hon. Friend has real expertise on the issue. Yes, I completely agree with him.
Clive Efford (Eltham) (Lab)
The Minister for Development (Mr Andrew Mitchell)
The UK remains a committed donor to Sudan. This year, the UK has provided £10.8 million in humanitarian assistance, helping more than 300,000 Sudanese people with life-saving support including food, nutrition and safe drinking water. Furthermore, the UK and other donors have agreed with the World Bank to unlock $100 million of committed but unspent donor funds to address urgent food needs.
Clive Efford
According to the UN, the number of people facing severe acute food insecurity in South Sudan has reached its highest level ever. Mass displacement and destruction of property and livelihoods has increased the risk of disease and famine, particularly for women and children. What assessment has the Minister made of the risk to children from malnutrition? What discussions has he had with international partners to scale up the response to this impending disaster?
Mr Mitchell
The hon. Gentleman is absolutely right. Because of the tremendous food insecurity in that part of the world, discussions are very much ongoing. Some 16 million people—nearly a third of the entire population—will require assistance next year. This is the highest level of insecurity since 2011, when I was last there as part of the troika on Sudan: the US, Norway and the UK.
Bob Blackman (Harrow East) (Con)
Rushanara Ali (Bethnal Green and Bow) (Lab)
Cat Smith (Lancaster and Fleetwood) (Lab)
The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (David Rutley)
The death of Mahsa Amini and of all those who have lost their lives standing up to the authorities is a tragedy that shows the regime’s shocking disregard for the rights of the Iranian people. We have made our views clear to Iran in the strongest possible terms. We have robustly condemned Iran’s actions, including at the UN Human Rights Council, and we have sanctioned the morality police and seven other officials responsible for human rights violations.
Bob Blackman
Thousands of Iranians have been arrested for just demonstrating their support for people who have been murdered. I have been supplied with a long list of people who have been sentenced to death just for protesting. Even worse, British-Iranian reporters who are now sited in the UK have been issued with credible information by the police that the Islamic Revolutionary Guard Corps threatens their lives. What more does the IRGC have to do before we proscribe it in its entirety?
David Rutley
I know that my hon. Friend feels very strongly about these issues and has raised them at the highest level with FCDO Ministers. We have been clear about our concerns about the IRGC’s continued destabilising activity throughout the region. The UK maintains a range of sanctions that work to constrain that destabilising activity. The list of proscribed organisations is kept under constant review, but we do not routinely comment on whether an organisation is or is not under consideration for proscription—I know that my hon. Friend understands the reasons.
Rushanara Ali
Iran Human Rights estimates that more than 300 people, including 24 children, have been killed in Iran in the protests that followed the death of Mahsa Amini. In the words of the song “Baraye”, which has become the anthem of these protests, the protests are
“for my sister, your sister, our sisters”.
In Farsi, the protesters shout “zan, zendegi, azadi”—women, life, freedom. I am sure that the whole House shares our solidarity with all those who are protesting for freedom against this brutal regime. In the light of these brutal attacks, will the UK Government support measures to expel Iran from the UN Commission on the Status of Women to show that the UK stands firmly with the women and children of Iran and the protesters who have joined them?
David Rutley
The hon. Member has made some important points about the grassroots nature of the protests. As I have said, we are taking strong action against the Iranians, but I will raise her points specifically with Lord Ahmad, the Minister for the Middle East.
Cat Smith
I recently met a group of Iranian refugees and asylum seekers at Global Link in Lancaster. They shared with me testimony and videos of the protests and the women across Iran who are daily putting their lives at risk for their fundamental rights. Does the Minister accept that the UK has a responsibility to support these remarkable women, and can he explain how the UK intends to do so?
David Rutley
They are indeed remarkable women, and we want to underline the fact that these are grassroots protests in Iran. We have taken strong action: we have sanctioned the morality police in its entirety, as well as both its chief and the head of the Tehran division. However, it is not our practice to speculate on future sanctions designations, as doing so would reduce the impact of those designations.
Kim Johnson (Liverpool, Riverside) (Lab)
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (Leo Docherty)
The Government are aware of reports that Turkish forces have used white phosphorus in northern Iraq. However, we have no direct evidence to support those claims. Of course, we take all allegations of this nature seriously, and we are committed to upholding the chemical weapons convention.
Kim Johnson
A Turkish CHP opposition Member of Parliament who asked the question about the alleged use of chemical weapons has received a summary of proceedings to prosecute him for terrorism. Does the Minister agree that it is time for us to follow in the footsteps of the Belgian Supreme Court by revisiting our designation of the PKK as a terrorist organisation? Does he also agree that not doing so gives cover to Turkey’s human rights abuses against Kurds living both within and beyond its borders?
Leo Docherty
The hon. Lady mentions the PKK. We should be very clear that we regard the PKK to be a terrorist organisation—that is why we have proscribed it—and that we believe Turkey has a legitimate right to defend itself against this form of terrorism.
Lloyd Russell-Moyle
Sezgin Tarikulu—the Turkish MP to whom my hon. Friend the Member for Liverpool, Riverside (Kim Johnson) has referred—said: “I watched the footage of the alleged chemical weapons. Chemical weapons are crimes against humanity. Tomorrow I will submit a PQ on the accuracy of these allegations.” For saying that, and that alone, he has been indicted for terrorism and supporting PKK rhetoric, despite the fact that a Turkish Minister has confirmed that Turkey does use gas. Sezgin is a member of the CHP, the founding party of Turkey; he is not of the Kurdish party. Does the Minister not recognise that the overreach of the PKK terrorist definition is shutting down democracy in Turkey and hurting our allies in Syria, Turkey and Iraq?
Leo Docherty
As I have said, we have no direct evidence to support the allegations to which the hon. Gentleman refers, but we are of course committed to upholding the chemical weapons convention. I myself met the director general of the Organisation for the Prohibition of Chemical Weapons last month, and we will keep these issues under review.
Yasmin Qureshi (Bolton South East) (Lab)
The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (Leo Docherty)
The UK is of course supporting Pakistan following the disastrous floods, and has committed £26.5 million towards the immediate response. The effects of that on the ground were seen by our Minister in the other place, my noble Friend Lord Ahmad. This catastrophe shows how climate change is making extreme weather events more intense, which is why we have doubled our global climate finance commitment to £11.6 billion and, in Pakistan itself, have pledged £55 million to support climate resilience and adaptation.
Yasmin Qureshi
I refer the House to my entry in the Register of Members’ Financial Interests, as chair of the all-party parliamentary group on Pakistan.
Experts have called the flooding in Pakistan a “climate catastrophe”. Millions have been displaced, more than 1,700 people are dead, and there has been $40 billion-worth of damage to livelihoods and infrastructure. Over the summer, Pakistan experienced the hottest temperature on the planet. Pakistan and other countries are bearing the brunt of the climate crisis and will continue to do so, although they contribute the least to global warming. Can the Minister assure us that his Government, rather than cutting aid, will make a serious commitment to the long-term support of communities in Pakistan to enable them to weather the coming storms?
Leo Docherty
We are indeed overwhelmingly committed to Pakistan. In 2020, our aid was £200 million and we have committed £55 million specifically for climate resilience. Lord Ahmad saw on his visit the life-saving impact that all this money achieves, including the £26.5 million towards the immediate response. The broad point is that tackling climate issues is now woven through the fabric of our policy making.
Elliot Colburn (Carshalton and Wallington) (Con)
The Minister of State, Foreign, Commonwealth and Development Office (Anne-Marie Trevelyan)
In October, the UK and our partners within the UN Human Rights Council led a new resolution—resolution 51.1—on Sri Lanka. It renewed the international framework to report on Sri Lanka and preserve evidence of past human rights abuses to use in future accountability processes. We call on Sri Lanka to make progress on human rights, justice and accountability.
Elliot Colburn
As chair of all-party parliamentary group on Tamils, and also through hearing from Tamils in Carshalton and Wallington, I am clear that the economic situation in Sri Lanka is allowing human rights abuses against Tamils to continue. I welcome the UK’s efforts in the UN to bring about the peace, accountability and justice that the Tamils are fighting for, but what assurances can my right hon. Friend give me that any economic support given to Sri Lanka will be dependent on—and will be expected to come with—progress on implementing the UN resolutions?
Anne-Marie Trevelyan
The UK is working with international partners, including at the Paris Club, to facilitate economic support for Sri Lanka through an International Monetary Fund programme. The IMF does not have the ability to impose political or human rights-linked conditionality; it can only impose conditionality linked to economic policy or tackling balance of payments challenges. An IMF programme is contingent on progress on reforms, including a comprehensive anti-corruption agenda.
Jim Shannon (Strangford) (DUP)
Very often, the suppression of human rights walks hand in hand with the persecution of Christians and those of other faiths; when human rights are suppressed, so too are Christians’ rights to their beliefs. Within any deals that the Minister has with Sri Lanka, will she ensure that the issues of human rights and the persecution of those with Christian beliefs and other beliefs are taken into consideration?
Anne-Marie Trevelyan
I am sure that my noble Friend Lord Ahmad will take note of the hon. Gentleman’s comments. Lord Ahmad spoke with the Sri Lankan President and Prime Minister in August, and he continues to highlight the importance of that inclusive approach in trying to provide the political stability needed for the country to make progress across all these issues.
Sir John Whittingdale (Maldon) (Con)
The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (David Rutley)
The Foreign, Commonwealth and Development Office is providing the BBC World Service with a flat cash three-year settlement of £94.4 million annually. Since 2016, the FCDO has provided over £468 million to the World Service via the World2020 programme, funding 12 language services and enhancements to BBC Arabic, Russian and English.
Sir John Whittingdale
Does my hon. Friend agree that the BBC World Service plays an ever more important role in countering disinformation, particularly from Russia and elsewhere? Will he therefore look to increase the amount of support that his Department gives to the World Service, and does he share my concern that the BBC is proposing to reduce funding by £28 million with the loss of 10 radio services?
David Rutley
I recognise my right hon. Friend’s long-standing interest in this issue. The FCDO greatly values the World Service’s role in countering disinformation, particularly President Putin’s harmful narratives, and it has provided an additional £1.44 million this year to support this work on top of our annual £94 million funding. The changes reflect the BBC’s ambition to become a digital-first organisation and, as a result, audiences will still retain access to all 42 language services.
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (David Rutley)
Ministers and senior officials have raised the concerns of LGBT+ visitors with Qatari authorities at all levels, and will continue to engage on this issue ahead of, and during, the World cup. Qatar has repeatedly committed that everybody is welcome to the tournament, and we will continue to encourage equal treatment and the respect of individual rights, and to identify what action the Qatari authorities are taking to match their commitment.
Luke Pollard
I declare an interest as a massive gay. As an England-supporting homosexual, it is not safe for someone like me to watch the World cup in Qatar. Because of the human rights abuses of migrant workers and of Qatar’s LGBT population, I personally do not think Qatar should ever have been awarded a major sporting competition. Will the Minister back the home nations captains in wearing a rainbow armband when they play at the World cup? Will he also apologise for the Foreign Secretary’s remark that LGBT fans should somehow show compromise, because it is never acceptable for a Government Minister to force LGBT people back into the closet?
David Rutley
I respect the hon. Gentleman’s comments. He and I have worked together on many issues in the past, and I understand his campaign on this issue. Our priority is, of course, the safety of all British nationals who travel to the World cup. The UK prioritises the issue of LGBT+ rights internationally, and we continue to engage with the Qatari authorities on this issue. Many sportsmen and women use their platforms to do important work across a range of issues, which is their personal choice. The UK Government stand by our values, and our team stands by the values of our home nations.
Graham Stringer (Blackley and Broughton) (Lab)
The Minister of State, Foreign, Commonwealth and Development Office (Anne-Marie Trevelyan)
The apparent behaviour of Chinese officials in Manchester is unacceptable. We have made it clear to China that freedom of protest must be respected. If the police determine that there are grounds to charge any Chinese diplomats, we would expect China to waive immunity. There will be diplomatic consequences should China not agree to co-operate in this way.
Graham Stringer
I do not think that is good enough. The violence by consular officials on the streets of Manchester is unacceptable, as the Minister says, but this is just the visible tip of the iceberg of secret police stations—consular activities by the Chinese to police and intimidate people in this country. To stop this unacceptable activity, will she consider reducing the number of Chinese diplomats who are allowed into this country?
Anne-Marie Trevelyan
This issue is with the Greater Manchester police and, because we are a country that believes in following the rule of law, we are waiting for it to complete its investigations. At that point, the Foreign Secretary will determine how to proceed.
Dr Julian Lewis (New Forest East) (Con)
Can my right hon. Friend assure the House that we are not making the same mistake in respect of China that we made in respect of Russia, which is to believe that increasing our economic ties and interdependence will enable an authoritarian country to mend its ways? It did not work in the case of Russia, and it will not work in the case of China either.
Anne-Marie Trevelyan
My right hon. Friend is extremely knowledgeable and thoughtful on these issues. I offer him this thought as we await the completion of the police investigation: our approach to China is co-ordinated across Government, and the FCDO is at the heart of the cross-Whitehall strategic approach to China in line with the integrated review, which is presently being refreshed. I know he will understand that, in due course, our position will be set out clearly.
Mrs Sheryll Murray (South East Cornwall) (Con)
The Minister of State, Foreign, Commonwealth and Development Office (Anne-Marie Trevelyan)
The Foreign Secretary is at COP27 in Egypt to continue to provide UK leadership on the global transition to net zero and to help vulnerable countries adapt and build resilience to climate shocks. Since our last oral questions, the UK has continued to work with international partners and allies to address all threats to international peace and security. The Foreign Secretary held discussions in Germany with his G7 counterparts last week, including on Russia, Iran, China and North Korea. All G7 partners reaffirmed their strong sense of unity and their unshakeable commitment to upholding the rules-based international order.
Mrs Murray
My right hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson) has built up a fantastic relationship with the Ukrainian President, and I thank him for his lead. Has his advice and expertise been sought as we work to continue this excellent relationship into the future?
Anne-Marie Trevelyan
My right hon. Friend the Member for Uxbridge and South Ruislip has led the world in our collective determination to ensure that Putin’s illegal invasion of Ukraine will fail. The work led by the Ministry of Defence to provide defensive weapons to the Ukrainian army and the sanctions work led by my team at the FCDO are both part of the legacy he leaves in Government as we continue to stand alongside our Ukrainian friends. My hon. Friend the Member for South East Cornwall (Mrs Murray) is absolutely right that his commitment to the Ukrainians and his friendship and support to President Zelensky have been unwavering. I have every confidence that he will continue.
Mr Speaker
Order. Come on, it is topicals—let us try to help each other. Let us have a perfect example from Fabian Hamilton.
Fabian Hamilton (Leeds North East) (Lab)
I hope the whole House will join me in congratulating Luiz Inácio Lula da Silva on his recent victory in the Brazilian presidential election. As we know, Brazil is home to the lungs of the planet, the Amazon rainforest, but because the previous Administration in Brazil turned a blind eye to deforestation, it has been systematically destroyed. Does the Minister agree that now is the time to support Labour’s call for an international law of ecocide, to criminalise the widespread destruction of the environment?
Mr Speaker
Order. This is not acceptable—I am saying it now, and I mean it. Other Back Benchers have waited and waited, and this is selfish and unfair. I expect better treatment. I have to represent the Back Benchers, and I expect the Front Benchers to show the same respect.
The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (David Rutley)
Thank you, Mr Speaker. I look forward to working with the hon. Member for Leeds North East (Fabian Hamilton), who raises an important point. We also welcome and congratulate President-elect Lula, and we will be working strongly with him on formal partnerships on not only trade, but climate change. I look forward to meeting the hon. Gentleman to discuss this more fully.
Gary Sambrook (Birmingham, Northfield) (Con)
David Rutley
The Government share my hon. Friend’s concerns about the regime’s shocking disregard for the rights of the Iranian people. I have to give him a similar answer to the one I gave my hon. Friend the Member for Harrow East, and I will follow up with him later on.
Dan Jarvis (Barnsley Central) (Lab)
The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (Leo Docherty)
The hon. Gentleman is absolutely right, which is why this year alone we are committing £286 million of humanitarian aid that is being disbursed through international organisations. That is all the more needed because of the deprivations of the Taliban regime.
Alexander Stafford (Rother Valley) (Con)
David Rutley
The death of Mahsa Amini was a shocking reminder of the repression faced by women in Iran. The continuing protests send a clear message that the Iranian people are not satisfied with the path their Government have taken. We have given a robust response; we have summoned the Iranian head of mission to the UK to express our concerns and we have designated new sanctions. We will continue to monitor the situation closely.
Ellie Reeves (Lewisham West and Penge) (Lab)
Leo Docherty
We bring a huge amount of diplomatic pressure to bear. Clearly, it is difficult countering the deprivations of the Taliban regime, but we have a huge stake in the game because we disbursed £286 million-worth of aid this year alone. That is the right thing to do, because we know that women and children are disproportionately affected by this kind of conflict.
Sir Robert Neill (Bromley and Chislehurst) (Con)
When Kabul fell, the Government rightly undertook to assist in the relocation of courageous Afghan judges who had taken a key role in the fight against the Taliban. Since then, however, a High Court decision has ruled against the operation of the latest resettlement schemes and there is concern that the level of support initially given is drying up. Will the Minister meet me to discuss, with members of British judiciary, schemes and ways by which we might improve and revise the system?
Leo Docherty
Of course, I am happy to meet. We have had some success extracting judges, but if my hon. Friend would like to meet me to furnish me with those specific details, I will try to try to expedite a response.
John Spellar (Warley) (Lab)
David Rutley
The right hon. Member raised his strong concerns about the Iranian regime’s disruptive activities in Yemen at last week’s important debate, for which I am grateful. The list of proscribed organisations is kept under constant review, but we do not routinely comment on whether an organisation is or is not under consideration for proscription.
Dame Maria Miller (Basingstoke) (Con)
Crown dependencies and overseas territories are an important part of the Commonwealth. The UK Commonwealth Parliamentary Association, on behalf of the Government, provides essential services, including audits, scrutiny and election observation, but there are gaps. Will my right hon. Friend meet me to discuss how we can tackle that, because those territories and countries deserve the best?
Anne-Marie Trevelyan
I would be delighted to meet my right hon. Friend. We are committed to deepening our ties with all our Commonwealth partners. For the past five years, the FCDO has provided funding to CPA UK to strengthen the ability of legislators in the overseas territories to hold their Governments to account. I look forward to discussing the matter with her more fully.
Grahame Morris (Easington) (Lab)
David Rutley
The hon. Member raises an important point. I will pick that up with our ambassador over there and follow up with him directly.
Priti Patel (Witham) (Con)
The Europe Minister will be familiar with the case of my constituent Mr Thomas Toolan and the ongoing retention of his daughter in Poland. This is a heartbreaking case that has been going on since 2018. Will the Minister meet me and other Members of this House who have similar child abduction cases in Poland, and will he please raise this case with his Polish counterpart?
Leo Docherty
I am aware of this case, and I thank my right hon. Friend for her advocacy on it. I know that she met our ambassador to Warsaw and, of course, I would be very pleased to meet her to see whether we can make some progress.
Sarah Owen (Luton North) (Lab)
Leo Docherty
I am happy to write to the hon. Member with a specific breakdown, but I think that it is the majority, because women and children are disproportionately affected. We are proud and pleased that we have committed £26.5 million in our immediate response to the tragic flooding.
Sir James Duddridge (Rochford and Southend East) (Con)
What consideration have the Government given to opening two new high commissions in the two newest Commonwealth countries, Gabon and Togo?
Anne-Marie Trevelyan
Mr Speaker, if I may, I will ask the noble Lord Goldsmith to write to my hon. Friend with the details.
Neale Hanvey (Kirkcaldy and Cowdenbeath) (Alba)
The Minister for Development (Mr Andrew Mitchell)
No, Mr Speaker.
Dr Julian Lewis (New Forest East) (Con)
May I attend the meeting that the Minister is going to have about judges, so that the plight of Afghan interpreters and others who helped our forces can also be considered?
Sarah Champion (Rotherham) (Lab)
It has been well reported that a very sizeable proportion of the UK’s international aid budget is being spent within the UK on the costs attributed to Ukrainian and small boat refugees. The OECD Development Assistance Committee rules on spending are clear, but the Government’s spending is less clear. Will the Minister commit to publishing a breakdown for this financial year of how the UK’s in-country refugee costs are being spent based on the DAC eligible costs guidelines?
Mr Mitchell
Yes, I will, Mr Speaker. I pay tribute to the hon. Member for the work that she does through her brilliant International Development Committee. I should make it clear that this expenditure is allowed under the OECD DAC rules. We cannot pick and choose; it is either allowed or it is not, and this expenditure is allowed.
Bob Blackman (Harrow East) (Con)
Will my right hon. Friend join me in congratulating Benjamin Netanyahu on his recent election victory in Israel and in wishing for Bibi to form a broad-based coalition across Israel, so that there is a proper stable Government for our key ally?
David Rutley
We congratulate Benjamin Netanyahu on his election victory. As one of Israel’s closest partners, the UK looks forward to working with Israel to ensure that our relationship continues to flourish.
Hannah Bardell (Livingston) (SNP)
Pakistan and Somalia are at the extreme ends of the climate crisis and face dire humanitarian consequences. Can those on the Government Benches tell me how cutting international aid will help them to help those countries—and do they have no shame?
Mr Mitchell
The hon. Lady is absolutely right that those are two terrible crises, and money is important. It is not everything, but it is important. We will have to wait until the outturn from the autumn statement to see where we stand on that.
John Cryer (Leyton and Wanstead) (Lab)
As my right hon. Friend the Member for Warley (John Spellar) has just pointed out, the IRGC has led and organised the brutal crackdown on protesters in Iran. What do those fascist thugs have to do to get themselves designated a terrorist organisation?
David Rutley
I understand the point the hon. Gentleman makes, and it has been made with real passion, but we are not able to add anything to the points we have already made to hon. Members on this issue.
Alex Davies-Jones (Pontypridd) (Lab)
Last week I had the immense pleasure of visiting Japan with the British Council. I put on record my sincere thanks to the ambassador Julia Longbottom, Matthew Knowles and the entire British Council team in Japan. I got to see first-hand the brilliant work that the British Council does in Japan, educating people in our English language and using our arts and culture for the greatest good. What more can the Government do to support the British Council, not just in Japan, but across the world?
Anne-Marie Trevelyan
It is lovely to hear that and I know the team in Japan will be very pleased to have welcomed the hon. Lady there. Our bilateral relationship with Japan continues from strength to strength in every possible area, and we will continue to work closely with them.
Richard Foord (Tiverton and Honiton) (LD)
I was contacted by a constituent from Devon whose sister died in east Africa while working for the United Nations Food and Agriculture Organisation. Joanna Toole was serving humanity and our environment when Ethiopian Airlines flight ET302 crashed near Addis Ababa. Will the Minister commit to lobbying the Ethiopian Government to release the air accident report so that an inquest in the UK can proceed?
Mr Mitchell
I am extremely sorry to hear that terrible news from the hon. Gentleman’s constituent. I suggest we have a meeting outside of the House to discuss the best way forward; I will be very happy to meet him to do that.
Andy Slaughter (Hammersmith) (Lab)
What assessment have the Government made of the role of far-right parties in Israel’s new Government, as they are Netanyahu’s principal coalition partner? Will UK Ministers be meeting representatives of those far-right parties?
David Rutley
As I have already highlighted, Israel is one of our closest partners and we will continue to have a close working relationship with the new Government. It would be inappropriate to comment further at this stage, ahead of the Government’s formation.
Patrick Grady (Glasgow North) (Ind)
What does the Minister for Development think are the biggest challenges to the effective use of the aid budget: the fact that it is facing further cuts, the fact that so much of it is being double counted against Defence expenditure or the fact that, as the Chair of the Select Committee said, it is being increasingly spent in the UK?
Mr Mitchell
The aim of the international development budget, every penny of which is spent in Britain’s national interest, is to prevent conflict and to build prosperous societies. That is the aim, and that is what we seek to do with every penny we spend. All that expenditure is completely in the interests of the British taxpayer.
Points of Order
(2 years ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate
Rachel Hopkins (Luton South) (Lab)
On a point of order, Mr Speaker, yesterday the Under-Secretary of State for Defence, the right hon. Member for South West Wiltshire (Dr Murrison), in response to my oral questions on the medallic recognition of nuclear test veterans, stated that I
“must not confuse commemorative coins and medallions with medals. Medals are worn on uniform; medallions and commemorative coins of the sort that other countries have issued cannot be worn.”—[Official Report, 7 November 2022; Vol. 722, c. 5.]
It is my understanding that New Zealand provided full medallic recognition in 2002 to nuclear test veterans who served in Operation Grapple and at Mururoa through the New Zealand Special Service Medal, which was established by royal warrant by Queen Elizabeth II. I am sure the Minister would not want to inadvertently mislead the House, so can you advise me how I can ensure that he clarifies his comments to the House? I might add that, if he would like to apologise to the UK nuclear test veteran community for any frustration caused, I will be meeting some of them in Parliament Square at 1.30 pm, if he would like to join us.
Mr Speaker
I am grateful to the hon. Member for giving me notice of the point of order. May I check that she has informed the right hon. Member for South West Wiltshire (Dr Murrison) of her intention to raise this matter?
Mr Speaker
Thanks for that. If the Minister wishes to correct the record, they may do so in the usual way, and I look forward to seeing them when they do.
Sarah Owen (Luton North) (Lab)
On a point of order, yesterday during Defence oral questions, the right hon. Member for Rayleigh and Wickford (Mr Francois) said
“why does it take BAE Systems 11 years to build a ship”,
that
“the Japs can build in four?”—[Official Report, 7 November 2022; Vol. 722, c. 2.]
Mr Speaker, you rightly and regularly remind us to use respectful language in this House, but unfortunately this outdated and crass racial slur falls well below the bar we should expect.
At the weekend, we saw an article in The Times asking why only two MPs identify as east or south-east Asian in this place, despite making up 1.2 million of the country. Perhaps it is because of such comments by the right hon. Member for Rayleigh and Wickford, or the “little man in China” trope trotted out last week by a Government Minister, or the former Leader of the House, the right hon. Member for North East Somerset (Mr Rees-Mogg) saying the words “yellow peril” from the Dispatch Box. It is an unacceptable undercurrent of othering that is rightly called out for other protected characteristics and ethnicities, but not yet for ours. Mr Speaker, can you please advise me on how we can discourage all Members of the House from using ethnic slurs such as those? Progress is not inevitable; it is something we must consistently and constantly strive for.
Mr Speaker
I am grateful to the hon. Member for giving me notice of the point of order. May I check that she has informed the right hon. Member for Rayleigh and Wickford (Mr Francois)?
Mr Speaker
The hon. Lady has done—excellent. I recognise, as she says, that the casual use of racial terms causes upset, and they should not be used. What I would say is that “Erskine May” states:
“Good temper and moderation are the characteristics of parliamentary language.”
I ask all Members to remind themselves of that principle in choosing the words they use carefully. Also, people reflect the language that we use. If we set the best of language, others might follow.
Bill Presented
Referendums (Supermajority) Bill
Presentation and First Reading (Standing Order No. 57)
Ian Paisley presented a Bill to require a supermajority of votes in favour of a proposal for constitutional change on which a referendum is being held in order for it to be decided in the affirmative.
Bill read the First time; to be read a Second time on Friday 20 January 2023, and to be printed (Bill 182).
Employee Share Ownership (Reform)
Tuesday 8th November 2022
(2 years ago)
Commons ChamberRead Full debate Employee Share Ownership (Reform) Bill 2022-23 View all Employee Share Ownership (Reform) Bill 2022-23 Debates Read Hansard Text Watch Debate
A Ten Minute Rule Bill is a First Reading of a Private Members Bill, but with the sponsor permitted to make a ten minute speech outlining the reasons for the proposed legislation.
There is little chance of the Bill proceeding further unless there is unanimous consent for the Bill or the Government elects to support the Bill directly.
For more information see: Ten Minute Bills
This information is provided by Parallel Parliament and does not comprise part of the offical record
Sir George Howarth (Knowsley) (Lab)
I beg to move,
That leave be given to bring in a Bill to make provision for a new employee share ownership scheme allowing preferential access for lower income workers; to reduce the Share Incentive Plan holding period from five to three years; to require companies to include declarations in annual reports about the type of employee share ownership plans that are operated and the level of employee take up; and for connected purposes.
This Bill has broad support across the House, as the list of sponsors will demonstrate. Politically, it fits neatly with most ideological traditions. From a Conservative viewpoint, it chimes with the ambition for the UK to become a property-owning, share-owning democracy. From Labour’s perspective, it resonates with the historical commitment to co-operation, although by different means from the traditional par value model, and it provides a means by which the relationship between capital and labour can be modestly realigned.
As I will demonstrate, the Bill has the support of nationalists and Unionists and Liberal Democrats, who see the benefits to employers and employees as being consistent with their respective political outlooks. Employee share ownership has been supported by a diverse range of organisations, including the CBI, the Social Market Foundation, the TUC and the Co-operative party. The CBI, for example, has stated:
“The moral case for financial inclusion is a compelling one—people have a right to their dignity and financial exclusion denies them that right.”
Similarly, the Social Market Foundation pointed out:
“As the UK economy emerges from the Coronavirus pandemic, now is a good time for government to push for higher rates of employee share ownership.”
The TUC has said that, subject to certain conditions—for example, a preference for collective schemes and them not being used as a substitute for collective bargaining and trade union involvement—it supports employee share ownership.
This Bill aims to update two of the current share ownership schemes—the share incentive plan, known as SIP, and the save-as-you-earn system, known as SAYE or Sharesave—and proposes a third scheme. The reason the two existing schemes need to be updated is that, over recent years, the number of such plans has been plateauing and, in some cases, falling. The Treasury’s own data acknowledge that trend. The number of firms that granted a new SAYE option in 2021 was 260, a fall from 340 in 2007. Overall, employees were awarded or purchased shares in 400 companies, compared with 570 in 2011-12.
There are several reasons for that decline. First, SIP and SAYE were introduced 22 and 42 years ago respectively. In the intervening years, employment practices have undergone significant changes, and the schemes no longer reflect those changes. For example, the length of time an employee spends at a company has markedly reduced. Indeed, young people are often encouraged to move jobs more frequently to secure career advancement. The Social Market Foundation has said:
“Among the poorest half of people aged 25 to 34, typical net financial wealth among those who are not employee shareholders was just £77. But among employee shareholders, wealth stood at £750.”
That being the case, the five-year minimum investment commitment for SIP schemes, to ensure maximum tax efficiency, is no longer realistic.
The fact that the Government offer tax advantages to employee share ownership is, of course, welcome. The risk, however, is that without updating them, they could become increasingly obsolete. For that reason, the Bill would reduce the commitment from five years to three, to achieve maximum tax efficiency, as advocated by ProShare, the industry representative body. Moreover, many employers believe that such a change would make them more likely to offer SIP schemes.
Another problem is that current plans apply only to those on pay-as-you-earn. There are now, however, some 4 million people who work in the so-called gig economy. A further provision in the Bill would create a new plan that does not depend on regular monthly contributions and is accessible to those in less regular forms of work. It would enable employers to give a free share award to their employees, to be held for a year, after which it could be realised at a discount value, as in SAYE schemes currently. That would be attractive to younger staff, who may not envisage staying at a company for three years, let alone five.
The other provision in the Bill is to require the Treasury to carry out a consultation with all the relevant bodies, including those I have referred to, with the aim of modernising employee share ownership to reflect the changes that have taken place since the existing schemes were introduced. One new idea that could be consulted on is allowing employees to access the holding built up in their share incentive plan in a tax-efficient and advantageous manner that, under the current scheme, is only available after five years, with regular contributions made over the last one year, without a penalty being applied.
Before concluding, I would like to say a few words about the benefits that such schemes bring to employees and employers. Two examples illustrate the benefits to employees. First, Pets at Home staff—mainly shop floor staff working in retail—who participated in the company’s SAYE scheme have made an average gain of £21,000. That is a healthy return on their investment and an increase in their financial resilience. Secondly, as ProShare’s annual survey shows, the average value of a participant’s shareholding at the end of 2021 was £10,295—again, a significant sum.
Employers gain too. As the CBI and the Social Market Foundation pointed out, employees having a stake in the company they work for provides important productivity gains, as well as boosting innovation and corporate long-termism. I hope this Bill will be a good starting point in encouraging and expanding employee share ownership and enabling the potential benefits to all concerned to be realised.
Question put and agreed to.
Ordered,
That Sir George Howarth, Margaret Beckett, Kirsty Blackman, Sir Graham Brady, Philip Davies, Mr Jonathan Djanogly, Dame Margaret Hodge, John McDonnell, Esther McVey, Sarah Olney, Jim Shannon and Gareth Thomas present the Bill.
Sir George Howarth accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 3 February 2023, and to be printed (Bill 183).
Opposition Day
State Pension Triple Lock
(2 years ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
16:01 - The House divided: - Ayes: 218 / Noes: 0 - Question accordingly agreed to.
Jonathan Ashworth (Leicester South) (Lab/Co-op)
I beg to move,
That this House calls on the Government to commit to maintaining the state pension triple lock in financial year 2023-24 as promised in the Conservative and Unionist Party manifesto 2019.
I hope not to detain the House long, because the proposition before it this afternoon is very simple: we are asking the House to stand firm in instructing the Chancellor and the Prime Minister to honour the triple lock promise and uprate the state pension in line with inflation for the next financial year. The motion should not be controversial; indeed, every Member should be able to endorse it in the Division Lobby this evening.
The reason we have tabled this motion is that pensioners deserve certainty that the promise of protection offered by inflation-proofing the state pension will be honoured. Let us remind ourselves of the facts. Pensioner poverty is up by 450,000 since 2010. Prices in the shops are up. Energy bills are up. The Office for National Statistics found that between June and September this year 3.5 million pensioners had already been forced to spend less on food and essentials because of the soaring cost of living. Over half of pensioners are cutting back on gas and electricity in their homes, and Age UK has projected that 2.8 million older households are set to be in fuel poverty this winter—1.8 million more than in previous years.
Alex Cunningham (Stockton North) (Lab)
Did my right hon. Friend read the reports in The Times that the Government are in fact going to follow our example and to confirm that they will increase the state pension in line with inflation? Does he agree that the Minister could intervene now and save us several hours debating these issues by just confirming that the Government do in fact intend to do that?
Jonathan Ashworth
I have read not only The Times but the 2019 Conservative manifesto, which committed Conservative Members to maintaining the triple lock, so I look forward to their joining us in the Division Lobby this evening—[Interruption.] I look forward to the hon. Member for Birmingham, Northfield (Gary Sambrook) joining us in the Division Lobby.
Gary Sambrook (Birmingham, Northfield) (Con)
Did the Institute for Fiscal Studies not say that the 2019 Labour party manifesto would benefit high earners rather than low earners on pensions, so is the biggest threat to UK pensioners not the Labour party?
Jonathan Ashworth
On the topic of manifestos, the new Prime Minister tells us that we do not need a general election because the 2019 manifesto gives the Conservative party a mandate. If that is the case, Conservative Members should not break their promise on the triple lock, and the hon. Member should join us in the Lobby this afternoon. Indeed, those in his marginal constituency will be watching carefully to see which way he votes later.
Sir John Hayes (South Holland and The Deepings) (Con)
I am delighted that the right hon. Gentleman, who by the way—and I do not want to lower his reputation on his own Benches—is a friend of mine, has given way. He knows very well that today is not about a lasting decision by Government but about political theatre. When we vote this afternoon, we will not be voting for what happens in practice; we will be voting because Labour has chosen to try to make political capital out of a difficult issue. I simply say to him that if the Government were to propose breaking that promise, they would not have my support, and they know that, by the way. I would stand by the triple lock. But will the right hon. Gentleman just answer this: was he not the adviser to the former Labour Chancellor Gordon Brown, who awarded pensioners a 50p increase?
Jonathan Ashworth
On the latter point, the right hon. Gentleman will recall that the state pension rose by over 50% under the last Labour Government and has risen by around 40% under this Government. I do not want to make an enemy of the right hon. Gentleman, because I know that he agrees with me; I read his comments in the Daily Express yesterday. Indeed, I suspect that he will agree with probably 90% of my speech—so much so that I was tempted to email it to him in advance of this debate, but I did not want to be removed from the Front Bench.
Let me make a bit of progress. The real-world impact in our constituencies of cutting the state pension again means more and more pensioners turning to food banks and more pensioners shivering under blankets in cold, damp homes, putting themselves at risk of hypothermia. It means more pensioners cutting back, at a time when they have already had to swallow a real-terms cut in the state pension of around £480. Breaking the promise on inflation uprating for next year amounts to a further real-terms cut in the value of the full state pension of £440. We are talking about a £900 cut, around £37 a month in the fixed incomes of Britain’s retirees; a cut in the fixed incomes of groups of the population who cannot easily earn a wage; a cut in fixed income when one in three relies solely on the state pension; and a cut that is punishing at the best of times, but is more devastating when prices are rising and energy bills are increasing.
Wendy Chamberlain (North East Fife) (LD)
Does the shadow Minister agree that we are talking not only about a cut, but about the uncertainty that the Government have created over the weeks, with their U-turns upon U-turns? Pensioners do not know whether to trust this Government and they have no certainty, even despite what has been reported this morning.
Jonathan Ashworth
We have had continued mixed messaging from the Government, which is why today is an opportunity for Conservative Members to send a clear message to their constituents about their position on the triple lock.
Kim Leadbeater (Batley and Spen) (Lab)
Does my right hon. Friend agree that there is a broader point here? A couple in their 70s in my constituency have contacted me to say that they are concerned about their pensions for themselves, but that they also care for members of their extended family who have physical ailments, autism and attention deficit hyperactivity disorder. As the costs of that care are increasing, the impact of reducing their pensions becomes a massive factor. Does my right hon. Friend agree that if the Government abandon their triple lock promise and inflict this real-terms pensions cut, that will have a knock-on effect on some of the most vulnerable people in our society?
Jonathan Ashworth
My hon. Friend has described with great eloquence the real-life impact that this cut will have on our constituents. Although I do not know the particular circumstances of the family she refers to, they may well be reliant on other social security payments, and we have no clarity from the Government about whether they will also be cut in real terms.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Does the right hon. Gentleman agree that those other social security payments also need to be uprated in line with inflation? If so, should Labour not have made the motion wider to include that?
Jonathan Ashworth
Today’s debate is about the triple lock, but we do agree that payments such as universal credit should be uprated in line with inflation and not suffer a real-terms cut.
Jim Shannon
We are on a roll: three games we have won in a row.
Some people believe that retired people live a wonderful life, but the reality is often much bleaker: less heat, less food and making the most out of a meagre income. Does the shadow Minister agree that the Government must honour those who have paid tax and national insurance contributions over their lifetimes? Now is the time to support them, when they need us.
Jonathan Ashworth
My friend and fellow Leicester City fan makes his point with the same force and precision as Youri Tielemans putting one in the back of the net against Everton at the weekend. He is absolutely right.
Let me make a bit of progress. A cut in the pension will also disproportionately hit retired women, who rely on the state pension and other benefits such as pension credits for more than 60% of their income. This £900 cut in income is for those who have worked hard all their lives, who have paid their dues and who, as my mum would say, have paid their stamps.
Jonathan Ashworth
I will give way to my hon. Friend from Leicester, given that I am a Leicester MP, and then let the hon. Gentleman in.
Liz Kendall
I am grateful to my right hon. Friend for giving way. I am sure he knows that half of all Leicester pensioners live in the most deprived 20% of the country, and one in five live in the most deprived 5% of the country. They are frightened for their future and will feel betrayed by Conservative Members if they do not walk through the Lobby with us tonight.
Jonathan Ashworth
My hon. Friend is absolutely spot on, as she always is. May I also say what a pleasure it is to see her back defending the people of Leicester West after her maternity leave.
David Johnston
Does the right hon. Gentleman accept that, given that the Government are making their announcement about the triple lock next week and that it takes effect in April, it is therefore irresponsible to suggest that pensioners will face the sort of cuts that he is talking about? We should just wait for the announcement.
Jonathan Ashworth
I do not know if the hon. Gentleman was in the House about three weeks ago, but that was when the then Conservative Prime Minister committed from the Dispatch Box to maintain the triple lock. If the hon. Gentleman wants to stand up for the 21,000 pensioners in the Wantage area who are set to lose £425 from a real-terms cut, he should vote with us in the Lobby this afternoon.
Let me make a bit of progress. A £900 cut in income, around £37 per month, is punishing at the best of times, and it is a cut for people who feel they have paid their dues—people who, like my mum, feel they have paid their stamps. It is a cut for those who have worked all their lives and who often live now with a disability or in ill health because of their hard work. Whether because of the hard, unyielding occupations that they may have worked in, they might live with chapped hands, sore backs and sore knees. They deserve a retirement of security, dignity and respect. It would be a betrayal of Britain’s almost 13 million pensioners to cut the pension a second year in a row, and this House should not stand for it.
Why has the triple lock been in the Chancellor’s crosshairs? It is because Conservative Members presented, cheered and welcomed the most disastrous Budget in living memory. It was a Budget so reckless and so cavalier with the public finances that it crashed the economy with unfunded tax cuts, sent borrowing costs soaring, gave us a run on pension funds, and forced mortgage rates to ricochet round the money markets, costing homeowners hundreds of pounds extra a month, and now they want us all to think it was just an aberration—that it was all just a bad dream; that Bobby Ewing was in the shower all along. But for the British people it remains a real nightmare, and now the Government are expecting pensioners to pay the price. Well, we will not stop reminding them of the Budget that they imposed on the British people.
In recent days, ahead of this debate, I have been inundated with messages from Britain’s retirees saying that that price is far too high. This was what Hilda wrote:
“We believed that with the triple lock in place, our state pension would keep pace with wages and inflation…This government cynically dismantled the triple lock and threw state pensioners under the bus”.
This was what Mary wrote to me:
“I am in tears of frustration and anger…Not all pensioners are well off. I for one am really struggling”.
This was from Patrick, who is aged 73:
“How can a responsible government minister welch on a promise?”
That is the crux of the matter, because every Government Member stood on a manifesto in 2019 that made a clear promise to the triple lock.
Six months ago, the Prime Minister, when he was the Chancellor, told us from that Dispatch Box that the promise of inflation-proofing the state pension would be honoured for the next financial year:
“I can reassure the House that next year…benefits will be uprated by this September’s consumer prices index”.
He went on:
“the triple lock will apply to the state pension.”—[Official Report, 26 May 2022; Vol. 715, c. 452.]
Those were the Prime Minister’s words six months ago. He tells us that we should not have a general election because that 2019 manifesto gives him a mandate, but he will not give us a straight answer to a very simple question: will he honour the promise he made from the Dispatch Box six months ago? So much for his promise to restore “integrity and professionalism” to Downing Street.
A year ago, the House debated breaking the triple lock. The then Pensions Minister, now promoted to Minister for Employment as Minister of State—I congratulate him of course, and I am pleased that he is back in the Department after a brief period away—last year justified cutting the state pension, telling us it was only for one year. Just a year ago, on 15 November 2021, he said:
“The triple lock will, I confirm, be applied in the usual way for the rest of the Parliament.”—[Official Report, 15 November 2021; Vol. 703, c. 372.]
So what has changed?
Anthony Browne (South Cambridgeshire) (Con)
I repeat that this is political theatre and, for those in doubt, whatever the vote is today, it will have absolutely no impact on the legislation whatever. I just want to know if the right hon. Member is aware of the very good House of Commons briefing on the triple lock, which compares the basic state pension with average earnings over the last 30 years. The low point of it was between 2000 and 2008, when it went down to 16%. That is the lowest the basic state pension has ever been compared with average earnings, and who was in power at that time? It was the last Labour Government. In fact, the previous Conservative Government and successive Conservative Governments have been more generous on the basic state pension compared with average earnings than the last Labour Government.
Jonathan Ashworth
If we want to go down memory lane, a previous Conservative Government broke the earnings link and that is why we need to keep the triple lock, so it builds up its value. The reason those inflation upratings were so low is that we had inflation under control under that Labour Government; we had not lost control of it. We introduced the minimum income guarantee, which the Conservative party voted against, and we introduced pension credit, which the Conservative party opposed at the time, in order to improve the incomes of the poorest pensioners. We brought pensioner poverty down and it is increasing again under this Tory Government.
As I have said, the then Pensions Minister said that the triple lock would
“be applied…for the rest of the Parliament”.
I was sceptical about that. We have these debates across the Dispatch Box and he will recall my scepticism. He is always very noisy on the Front Bench and, when I was asking questions, he was shouting at me and said, “No, we’ve committed to the triple lock. You shouldn’t have to worry.” I asked the then Work and Pensions Secretary, the right hon. Member for Suffolk Coastal (Dr Coffey), and she told me at the time:
“I am again happy to put on record that the triple lock will be honoured in the future.”—[Official Report, 21 March 2022; Vol. 711, c. 99.]
That was in March 2022 from that Dispatch Box, yet here we are with the prospect of another real-terms cut in the pension on the table again. Breaking such a promise two years in a row in a cost of living crisis is surely unacceptable.
That brings me to the new Work and Pensions Secretary, who of course prior to his elevation just a month ago, when real-terms cuts to the pension and other benefits were raised, led the charge at the Tory party conference. He undermined the position of the then Prime Minister and the then Chancellor, telling Sky News it was
“one of those areas where the Government is going to have to think again.”
But of course this morning, he did not repeat his line that the Government should think again, because now he is saying we have to wait until next week’s emergency Budget. So we have a U-turn on the U-turn. In fact, the Conservative Twitter account is still saying:
“We will protect the Triple Lock”.
The Conservative Twitter account is still repeating what the former Prime Minister, the right hon. Member for South West Norfolk (Elizabeth Truss), told us from the Dispatch Box three or four weeks ago. So it is a U-turn on a U-turn on a U-turn, and it makes us all dizzy just watching it.
After all this Conservative party triple lock hokey-cokey, today is a clear opportunity for Conservative Members to finally tell us where they stand. Today is an opportunity for Conservative Members to finally end the uncertainty, finally end the mixed messages and finally end the worry for millions of pensioners who have seen their state pension cut while their cost of living soars, and confirm that the pension will not be cut next year. The uprating of the state pension is crucial to millions of today’s pensioners, but it is also about protecting the incomes of tomorrow’s pensioners. It is about ensuring that the state pension recovers its value relative to wages. Given the move away from final salary schemes, it means certainty for tomorrow’s pensioners as well.
In the name of today’s pensioners and tomorrow’s pensioners, Conservative MPs should offer us certainty. Our retired constituents have worked hard all their lives, contributed to national insurance and served our communities. They deserve security and dignity. As the former Conservative Pensions Minister Baroness Altmann warned this week:
“Short-changing pensioners during a cost of living crisis should be unthinkable...Snatching protection away this year could be the biggest betrayal pensioners have ever known.”
I could not put it better myself. Ministers should stop dithering. They should reject the cut in the state pension and support our motion in the Lobby tonight.
The Secretary of State for Work and Pensions (Mel Stride)
Can I open by saying that it is a pleasure to at last stand opposite the right hon. Member for Leicester South (Jonathan Ashworth) in debate at the Dispatch Box? We have heard a lot of sound and fury from the Opposition Benches, but not much illumination and light. Indeed, the entire speech was predicated on a perceived answer to the question that he has put in the motion—namely, that we will short-change pensioners in some way—and that is far from necessarily the outcome we will see.
The right hon. Gentleman’s speech started pretty well—he read out the motion and so far so good—but it was on the intervention of my right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes), who claimed him as a close friend, that he started to go down hill and lose his politics bearings. I should just correct my right hon. Friend, who I think was being over-harsh on Gordon Brown by suggesting that, in 1999, Labour put up pensions by 50p. It was, of course, 75p—a full 50% more than he suggested.
Sir John Hayes
I am immensely grateful to my right hon. Friend for correcting the record. I did say we were friends and I was trying to be generous to the right hon. Member for Leicester South, but adding the extra 25p would have come as cold comfort to the pensioners who suffered under Labour. We should remember that the triple lock was a Conservative policy, which is why we must stand by it.
Mel Stride
I thank my right hon. Friend, and given the impact his intervention had on a speech that deteriorated very rapidly thereafter, he will now be my secret weapon in every debate now; he will be there, poised.
Ms Lyn Brown (West Ham) (Lab)
I am actually quite offended by the idea that this is theatre and knockabout because my constituents do not see that way. Can I bring some facts to this debate? The Labour Government took 1 million pensioners out of poverty. This Government have put half a million into poverty. Does the Secretary of State not feel that this is just outrageous, and that he needs to make it clear today that the promises of his manifesto will be fulfilled?
Mel Stride
I will of course come on to the issue of the impact of the Government’s huge commitment to pensioners over the years on issues such as poverty that the hon. Lady has raised. However, may I begin by saying that I am slightly surprised the right hon. Member for Leicester South should have come forward with this motion at all? He was present at departmental questions just a few days ago, when the question about what the Government would do in respect of the triple lock, and indeed the uprating of benefits, was put on many occasions to me and my fellow Ministers, and we gave a very clear, rational and sound response. It is that a fiscal event will take place soon—on the 17th of this month—and, as he will know, it is completely out of order for Ministers under those circumstances to start giving a running commentary on what is expected to be included in that fiscal event. Indeed, in the event that he was in my position, stood up and pre-announced measures that were coming forward in the Budget, he would rightly be required to resign from his position. No doubt that is something that, in my case, would please him no end, but I am afraid I am not going to give him that pleasure.
Angela Richardson (Guildford) (Con)
On the autumn statement coming on 17 November, which is next week, it is accompanied by a full forecast from the Office for Budget Responsibility. Is that not the responsible time to talk about the uprating of pensions and benefits? It is irresponsible of the Opposition to bring this forward ahead of the full OBR forecast.
Mel Stride
My hon. Friend is entirely right. That is precisely the point I am making. It would be entirely irresponsible for any member of the Government to prejudge or give a running commentary on anything that may appear in that statement.
Alan Brown
Can the Secretary of State outline why it would be irresponsible to confirm that the Government are keeping a manifesto commitment and promise?
Mel Stride
As I have set out, we are facing what is being called a Budget. It is a major fiscal event and many decisions will be taken within it. It would not be right for a member of the Government at the Dispatch Box to prejudge what may be included in it.
Sir Stephen Timms (East Ham) (Lab)
I welcome the Secretary of State to his first Department for Work and Pensions debate. Surely he is not suggesting that the current Prime Minister was irresponsible when he said last May that the triple lock would be honoured for next April. Will he confirm that, if the triple lock is not honoured for next April, it will be almost without precedent, going back 50 years or more, for the state pension not to be uprated at least in line with inflation?
Mel Stride
I welcome the question from the Chair of the Work and Pensions Committee. As a former Pensions Minister, he will know that, in the situation we are in at the moment, right hard up against a major fiscal event that is about to set out major tax and spending decisions, it would simply not be right, as I have said on countless occasions, for any member of the Government to prejudge and pre-empt the measures that the Chancellor will be coming forward with.
David Linden (Glasgow East) (SNP)
The Secretary of State talks about prejudging, pre-empting and following due process, but he knows that, if the Department was intending to suspend the triple lock, his officials would already be preparing the relevant legislation, as was brought forward by then Pensions Minister, the hon. Member for Hexham (Guy Opperman), when the triple lock was last suspended. In the interests of being transparent and following process, can the Secretary of State see whether those officials have been instructed to draft that legislation?
Mel Stride
That is simply an ingenious way—I congratulate the hon. Member—of asking precisely the same question. I have noticed that Members do that in this House from time to time, sometimes quite effectively.
The process is extremely clear. I have a duty under legislation to assess the triple lock and the uprating of benefits and, taking into account the September CPI figures and the average wage increases in the preceding period, and in conjunction with the Chancellor—because these decisions have a major impact on the Department’s annual managed expenditure—to come to a decision. That process is ongoing and will be concluded by the 17th, when the hon. Member will have the answers to all the questions he asks.
Let me focus on part of the central charge from the shadow Secretary of State regarding what this Government have or have not done for pensioners over a long period. As has been pointed out by Conservative Members, the triple lock was brought in under a Conservative-led Government in 2011. As to what has happened to the pension in that intervening period, the basic state pension has increased by £2,300, outperforming inflation by £720. We spend £110 billion a year supporting pensioners through the pension and £134 billion if we take wider measures into account. That is more than 5% of the entire output of the economy dedicated to supporting our pensioners.
Gary Sambrook
Talking of wider measures, pension credit can be worth up to £3,300 for individual pensioners, and it can open the door to many other benefits such as free NHS dental treatment and other cost of living measures. There are 800,000 people in the UK, many of whom will be in Birmingham, Northfield, who could claim pension credit but do not. Will the Secretary of State take this opportunity to encourage as many people as possible to claim pension credit?
Mel Stride
That is a truly constructive intervention because, as my hon. Friend points out, not everybody who would be qualified for that benefit has applied. About 70% of those who we believe are eligible receive pension credit, but 30% do not. My hon. Friend the Minister for Employment did an extraordinarily good job in June in encouraging people to sign up to pension credit, through the campaign that the Department launched, and I believe there was an increase in take-up of 275% due to his efforts. My hon. Friend the Member for Birmingham, Northfield (Gary Sambrook) is right: this is important not just for the benefits that we think of, and the credit itself, worth £3,300, but in terms of recent measures that the Government have announced, the £650 of support, which is available to pensioners only if it is unlocked by access to pension credit. It is an important credit to apply for.
Anne McLaughlin (Glasgow North East) (SNP)
The £650 cost of living grant to those on pension credit is great, and would have been a great incentive to get that other 30% to 40% to sign up for pension credit. We know that some people feel that they should not do it, and we need to persuade them. Unfortunately, however, unless someone applied successfully by 19 August, they can no longer get that £650. My campaign to extend that deadline to 31 March has been running for a couple of months, and I have had some positive responses. Will the Minister consider meeting me to talk about the possibility of extending the deadline to the official end of winter, so that we can convince people to take it?
Mel Stride
I thank the hon. Lady for that intervention and I recognise the solid and important work that she has done in this area. I can correct her, and hopefully please her, by saying that the deadline is 18 December, because pensions credit can be applied for three months retrospectively, which would bring it into the reference period for the £650 payment.
Anne McLaughlin
The 19 December deadline only allows people to get £324. I will be getting my constituents to sign up for that on the basis of the £324, but I am asking whether somebody who applies until the end of March can get the whole amount of £650, which is a bigger incentive than £324.
Mel Stride
I thank the hon. Lady for that clarification and I accept the point she makes. I would be happy for the Minister for Pensions to meet her to discuss the issue she has raised.
Richard Graham (Gloucester) (Con)
The key point my right hon. Friend is stressing is that a huge amount has been done consistently by this Government to help pensioners since 2011—innovations that the Opposition opposed at the time or certainly did not come up with, including benefits for women who can claim pension years when they were bringing up children, and auto-enrolment with 20 million new people. I hope that the one-off payment my right hon. Friend just alluded to will be valid for a bit longer, and there is the increase of £3,200 per pensioner on the state pension alone. Does my right hon. Friend agree that today’s debate is largely designed for the Opposition, and about the shadow Minister who was behind the 1999 75p increase—[Interruption.]—trying to park his tanks—
Mr Speaker
Order. Mr Graham, when I stand up I expect you to sit down and not carry on your speech. Do we understand each other about the rules of this House?
Mel Stride
Thank you, Mr Speaker. The points raised by my hon. Friend the Member for Gloucester (Richard Graham) are well made. This Government have done a huge amount over many years to do what we can.
Mel Stride
The hon. Lady asks from a sedentary position why poverty is going up, and I will come to poverty in a moment. There is no doubt that my hon. Friend the Member for Gloucester is right: for a long time the Government have stood up for the interest of pensioners as one of our prime priorities, and we know why. Many pensioners are particularly vulnerable. When economic conditions are difficult—as they are at the moment—it is hard for them to adjust their economic circumstances, to re-engage with the workforce and so on, so it is important that we have that duty.
I turn to poverty. Since 2009-10, 400,000 fewer pensioners are in absolute poverty—before or after housing costs—and the proportion of pensioners in material deprivation has fallen from 10% in 2009-10 to 6% in 2019-20. Over the much longer sweep since 1990, relative poverty has halved, but there is still more to be done.
Alan Brown
Does the Secretary of State accept that poverty analysis figures lag real time and that poverty figures are going up? We only have to look at how an estimated 6.7 million households are in fuel poverty. Will he remember that when he stands at the Dispatch Box and talks about figures coming down?
Mel Stride
Those figures are simple facts about what has happened to absolute poverty across the period that I quoted.
I turn to an important issue: the economic circumstances in which the country finds itself.
Margaret Greenwood (Wirral West) (Lab)
Will the Secretary of State give way?
Mel Stride
In a moment. That is a difficult situation, largely visited upon us through a major pandemic that shut down a substantial proportion of the economy, followed by a war between Ukraine and Russia. That, of course, has had a huge impact in terms of inflation, the cost of energy and people’s bills. It is only right that we are honest with the public and honest in the House about the ramifications of that situation. On 17 November, we will see some difficult choices brought forward by the Chancellor of the Exchequer on both tax and spending. We have to understand why that is. They will be brought forward because the country must demonstrate that it will live within its means and act fiscally responsibly. As a consequence, we see bond yields and interest rates softening, which will be good for mortgage holders, good for businesses who are borrowing and good for the servicing costs of the Government and their national debt.
Those hard choices must be made, but within them the Government have a core mission to look after the most vulnerable. Those who say that we do not do that are simply wrong. The evidence bears out my statement. The £650 cost of living payment that we have discussed is there for pensioners through pension credit and is there more widely for 8 million low-income households up and down the country. There is the £300 payment to all pensioner households. There is the £400 reduction in fuel bills, which comes through the bills themselves. There is a £150 reduction for those living in houses in council tax bands A to D—many of them will be pensioners—and a £150 payment to those who are disabled. That is on top of the household support fund administered by local authorities, who perhaps have a better grip of local need than those at the centre, which was recently expanded by £500 million to over £1 billion. Of course, there is also the energy price guarantee holding average fuel bills for the average family at £2,500, saving £700 across the winter. All those measures and more are clearly indicative that the Government care about those who have the least and are there to protect them at every turn.
David Linden
Going back to what the Secretary of State said earlier, one would think that before covid and the war in Ukraine everything was hunky-dory and there were no problems at all. The reality is that the cost of living crisis is not recent but a result of 12 years of Conservative austerity. [Interruption.] If only Conservative Members got so outraged about pensioner poverty. When he talks about the hard fiscal decisions that will have to be made on 17 November, does he understand that my pensioners in Belvidere are shocked that the Government are not doing enough while lifting the cap on bankers’ bonuses?
Mel Stride
I am surprised by the hon. Gentleman’s intervention. When a pandemic comes along and contracts the economy by a greater level than at any time since about 1709—the year of the great frost—and a war breaks out that has a huge impact on energy costs in electricity, oil and gas, very few of our constituents up and down the country would not accept that those have been major contributors to the inflation and other challenges that we face. Only yesterday, the International Monetary Fund stated that about a third of economies in the world will be going into recession. We are not an outlier; we are right in the middle of the pack of nations who are suffering the consequences of the events that I described.
Margaret Greenwood
The Secretary of State has been telling us that the Government are committed to protecting the most vulnerable and looking after pensioners, but that will ring hollow to pensioners in my constituency who are devastated at the squeeze on public services. They see libraries closing—places they rely on as social hubs where they can go and interact with people—and the local authority having problems providing the social care that they need. Those issues really affect them. I know that they do not come under his Department, but will he commit to speaking to the Cabinet about them?
Mel Stride
The hon. Lady raises a perfectly legitimate concern. We are all concerned about public services, and certainly those of us on the Government side care deeply about public services, but we must be honest with the British public in saying that times are extremely difficult and there will be some tough decisions.
Mel Stride
The hon. Lady shakes her head, but economically there are really three choices: we can either raise taxes, cut spending or borrow more money. The Labour way, we know, is to borrow, borrow, borrow. Unfortunately, we all know where that leads. [Interruption.] The shadow Secretary of State needs to calm down. He is getting a bit excited. What we need—
Mr Speaker
Order. Mr Ashworth, you need to calm down. [Interruption.] No, no. I will make the decision on who needs to be calm, and it is you who is going to be calm.
Mel Stride
Mr Speaker, you are a man after my own heart. We are on the same page and I could not agree with you more. Thank you very much indeed for that timely intervention.
That brings me to my closing remarks.
Mel Stride
I will not.
I respect the fact that the right hon. Member for Leicester South brought forward the motion and, to the extent that it underlines the absolute importance of standing up for our pensioners, I welcome it. Government Members will always be there to support pensioners. We always have been in the past, we are now and we always will be.
Alan Brown (Kilmarnock and Loudoun) (SNP)
I will pick up some of the Secretary of State’s comments. He started off by trying to claim that there was not much illumination from the shadow Secretary of State’s speech, but we got absolutely no illumination from his speech, either. There is still no clarity on what the Government are going to do. As I said, it is just not adequate to say, “It’s irresponsible to come forward and provide clarity on what is going to happen on the triple lock.” The Secretary of State kept talking about being honest with the public, so he should be honest and tell us what will happen with the triple lock.
The Secretary of State attacked Labour with the old trope about Labour doing borrowing. I am sure that, not that long ago, he was backing the mini-Budget that was all about borrowing to give tax cuts to the rich. That was economic madness. Does he want to come back to the Dispatch Box and apologise for that?
I am happy to support the motion. It is simple and, as it references the Tory manifesto, it should win the entire House’s support—hopefully without the chaos that we witnessed in the Opposition day debate about fracking. I note that that was also the day when the former Prime Minister was questioned at the Dispatch Box by my right hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford); she did her 55th U-turn and said that she would protect the triple lock, so it should be easy for the Government to further confirm that, rather than holding on to the line about waiting until next week.
Last year’s breaking of the triple lock cost each pensioner £520 on average during the cost of living crisis, and the Red Book shows that it will take £30 billion in total from pensioners by 2026-27. At least uprating the state pension this year in line with September’s 10% inflation rate would give certainty of income to its recipients.
However, we should also look at the reality. If the triple lock is reinstated and pensions are uplifted, we are actually almost celebrating not cutting pensions in real terms in the Budget. That is how desperate things are. If that is the measure of compassionate conservativism—not making further cuts to pensions—then it shows the reality of where we are with this Government.
In terms of inflation in the here and now, we know from the Office for National Statistics that tea is up 46%, pasta is up 60% and bread is up 38%. The price of budget food in supermarkets is up an astonishing 17% in the year to September. On energy costs, the average bill, based on the previous cap, was £1,100 a year just a year and a half ago. Now, with the so-called energy guarantee, we are supposed to be pleased that bills are now, on average, £2,500 per year during the winter period.
For the Energy Prices Act 2022, the Government’s own figures estimated that energy bills would go up on average to £4,400 without the support package. That is almost 50% of an average state pension. Given that it is perfectly obvious that pensioners are more likely to use more energy than an average household, it is not just the triple lock that needs to be reinstated; we need this Government to come forward with confirmation of what the future energy support package will be for those who need it. The Secretary of State talked about protecting the most vulnerable. Well, they need to know what is happening with energy going forward as well.
In Scotland, average usage already means that bills are in the order of £3,300 per annum even with the current energy support package, so for people on fixed incomes it really is unaffordable.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
I am grateful to my hon. Friend, who is telling it like it is for people in their homes just now. He is talking about energy costs. That does not include those people, including pensioners, who live off the gas grid and are therefore paying far, far more than those he is quoting.
Alan Brown
I agree wholeheartedly with my hon. Friend. The £100 payment to those off gas grid is almost an insult, because it does nothing to help them fill their oil tanks.
In a similar vein on inflation, petrol prices are still massively up compared with recent years. I drive an Insignia, which is not a huge car, but last week it still cost me over £100 to fill the petrol tank. That is clearly unaffordable for those on a fixed income, and it would account for 55% of one week’s full pension.
When we look at the UK in the round, we see that it is one of the most unequal countries in the world. Unfortunately, that inequality continues during retirement. The Gini coefficient shows that the UK is 14th out of 14 north-west European countries. It is the same for the S80:S20 quintile share ratio; when we compare the ratio of the poorest to the richest, the UK has by far the worst ratio and is again 14th out of 14. Scandinavian countries—all small, independent countries—lead the way on these measures.
Poorer pay and lower incomes for those struggling also means that later on in life they are less likely to have private pensions and so are reliant on the UK state pension. Again, the UK state pension fails in comparison with those of other countries. When we look at the proportion of earnings derived from state pensions, the UK sits 30th out of 37 OECD countries. I understand that there is an argument that it can be good to move away from dependence on state pensions, but the UK is clearly among outlier countries near the bottom of the pile, and way below the OECD average. Many people are using occupational pensions and capital as sources of income, but that increases inequality in pension age for those without access to such means.
If we look at the UK’s flat pension rate and compare it with other countries that pay a flat rate—Ireland, Denmark and the Netherlands—we see that the UK rate is again lower and fails in comparison. If we look at state pension expenditure compared to a country’s GDP, we see that the UK is again way below the OECD average and is ranked 28th out of 38 countries. Ministers might say that those measures can be somewhat subjective, but the UK trails in each one, so there is a common theme. One other measure is the replacement rate that compares all sources of pension income versus previous earnings. On this measure, the UK, with an average over 10% less than those of the EU27 and the OECD, is ranked 19th out of 37, so still in the bottom half of the table.
As I have stated, this means that inequality in the UK continues into retirement and the UK has the 12th highest pensioner poverty rate out of 35 countries measured by the OECD. What that means, if we turn that around, is that in terms of disposable income to support a standard of living for those aged 66-plus, the UK is ranked 24th out of 35 countries, while Iceland, Denmark and Norway occupy the top spots. Ireland is in eighth place. And those statistics are based on comparisons before the UK broke the triple lock and the link to earnings last year. It is absolutely critical that the triple lock is restored. Independent Age emphasises that:
“With more than 2 million pensioners already living in poverty and the cost-of-living crisis hitting hard, we know people are being forced to make impossible choices on how to cut back to be able to afford heating, electricity and food”.
One additional income support measure is pension credit, but we know that take-up levels are still too low—the Secretary of State acknowledged that. Previous research commissioned by Independent Age estimated that full take-up of pension credit could lift 440,000 older people out of poverty. So when will that be tackled by the Government? The unclaimed £4 billion in pension credit could make the lives of hundreds of thousands of pensioners more bearable. It is also money that would then be recirculated within local economies as it is spent on vital household needs.
David Linden
Does my hon. Friend think that banks have a role to play? Given that the vast majority of pensioners receive their pension payments from the Department for Work and Pensions into their bank accounts, banks have the ability to identify where payments are coming from and the amount. Does he agree that there is an opportunity for banks to play a role in promoting pension credit?
Alan Brown
That is a very good point. I agree with my hon. Friend that that is an ideal way of managing that. I urge the Secretary of State to take heed of that intervention and work with banks and other organisations to try to increase pension credit take-up.
In terms of pension policies, of course I have to refer to the WASPI—Women Against State Pension Inequality Campaign—scandal and the fact that the Government are still not moving forward on fast and fair compensation, given that the Parliamentary and Health Service Ombudsman found there was maladministration. The PHSO made it clear that the Government do not have to wait for the end of its investigation to take action to remedy this injustice.
There is also the frozen pensions scandal, whereby whether your pension gets uprated or not is arbitrary, depending on which country you reside in. It is also scandalous that the UK Government have yet again rejected offers from the Canadian Government to enter into reciprocal arrangements. I urge the Secretary of State to reconsider that and engage in meaningful talks with the Canadian Government.
All those aspects show that the state pension in the UK is not the safety net we are told it is. It shows clearly that the Better Together mantra of staying in the UK to protect pensions in Scotland was a cruelly false premise. Indeed, with private pensions nearly collapsing after the Tory mini-Budget, that claim looks even more ridiculous. It also shows that when Gordon Brown, at a Better Together event, said:
“Our UK welfare state offers better protection for pensioners, disabled and the unemployed”,
he was, frankly, lying.
Madam Deputy Speaker (Dame Eleanor Laing)
Order. It would be better if the hon. Gentleman found other words—perhaps a little gentler—rather than those he has just used.
Alan Brown
I take your point, Madam Deputy Speaker, but of course I was not referring to any hon. Member in this place.
Madam Deputy Speaker
Order. I fully appreciate that and the hon. Gentleman is technically correct, but I take the view that anyone who has been a right hon. Member, and held a most senior position in this place, should be treated with respect even after they have left. A different form of words would therefore be appreciated.
Alan Brown
Thank you, Madam Deputy Speaker. I respectfully say that his comments were misleading because, as I have outlined, the UK pension is not as good as it is made out to be and is one of the poorest in north-west Europe.
Moving on, it is little wonder that the Scottish Government have been publishing papers comparing the UK to comparator countries for an independent Scotland. Scotland has a lower pensioner poverty rate than the rest of the UK at present, but we want to do much better than that. We want to match or better the comparator countries, reduce inequality during working life, and allow a more dignified and enjoyable retirement for all. We no longer want to be left here hoping, yet again, that Westminster will make the right decisions on such measures as the triple lock. We want to do things for the betterment of the citizens of Scotland.
Kevin Foster (Torbay) (Con)
This is my first Opposition day speech in a while and I welcome the opportunity to speak on an issue that is so important for Torbay. It will perhaps be unlike some of my previous speeches in that, first, I am not following the hon. Member for Strangford (Jim Shannon), and secondly—I see the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Mid Sussex (Mims Davies), on the Front Bench—this will not be quite as thorough an analysis of the issue as some have occasionally enjoyed from me on a Friday. It is a particular pleasure to see the Secretary of State on the Front Bench; I know that he will be a doughty champion for our beautiful county and its people, and that he will ensure that the most vulnerable are protected.
Turning to the motion, it is fascinating to see the huge enthusiasm from Labour Members for our 2019 manifesto. I cannot remember the same enthusiasm three years ago, when they were not that enthusiastic to have a general election in the first place. This measure was a key part of the pledges that we made. We have heard some knockabout today, but we have to remind ourselves that the pension triple lock was introduced in 2010 and not before. For the 13 years prior to that, pensions had been linked to the rise in inflation and in prices, rather than the position adopted under the triple lock.
We know why we introduced the triple lock. As has been referred to, the inspiration came from the 75p increase some years earlier. It aimed to give a clear sense of the direction in which state pensions would go. It would either be in line with prices, as was done previously, or earnings—by reinstating a link to those—or it would be a minimum of 2.5%, providing clarity for those looking ahead to their retirement. As that was done in a simple way, it meant that pensions would be protected against price shocks and that they would keep pace with earnings as they went up. Since 2010, the level of the basic state pension has gone up by £2,300.
The measure also has to be seen in the light of other changes, such as the end of opting out and the introduction of the new state pension, which is clearer about what people will get when they retire. As has been touched on, it allows more years in which, for example, someone is bringing up children to count towards the state pension. The changes were about making what people have clearer and simpler so that they can plan in their retirement.
That was very welcome in Torbay. Those commitments were probably a reason why a seat that was held by another party for 18 years is solidly Conservative again. Most pensioners and those who vote in Torbay are realistic people. They recognise the impact of the pandemic last year and the odd outcomes it produced for earnings—for example, in the previous year when earnings went down, and last year when earnings jumped up. The double lock was therefore introduced for one year last year, using the CPI rate for the increase in the state pension.
Some people say, “If inflation was good enough to be the rate of increase last year, it should be good enough this year, not least given the impacts we are seeing on prices.” I accept that there is a need for balance and the Secretary of State’s point that he cannot pre-empt what will be said next week. We cannot have a running commentary in the run-up to a fiscal event, with a different Department every day ruling something in or out, or putting something in or out. I take his point, but those of us who are not on the Front Bench can make our comments more freely about the outcome that we would like next week.
On the position in Torbay, the Secretary of State was right to highlight other benefits and support that is being offered to pensioners. The second cost of living payments are starting today, not just for pensioners; I think 16,300 families in Torbay will start to get that payment, taking the total up to £650. Members have rightly touched on the energy price guarantee, which helps to cap the price being paid for energy. On top of that, there were such things as the council tax rebate earlier this year. Councils have discretionary funding to apply that to those in band E and above when they have particular pressures. Therefore, when we discuss the triple lock and the state pension, we have to consider some of the other support. Of course, I have not mentioned the £400 per household energy bill discount from which pensioners will innately benefit.
It is interesting to hear people making comparisons with other countries and talking about wanting to emulate some of them. I would be interested to hear whether SNP Members would like to emulate the situation in many European countries whereby, although the position on the pension might be different, pensioners have to pay certain medical charges and there are social care levies applied to pension income and taxes that would not be paid here. Certainly, many services that are provided free at the point of use and point of need under the NHS are charged for in other jurisdictions. If we make comparisons and say we want to emulate other countries, we need to be conscious of what we are arguing we should emulate. We can do more to help people to get pension credit.
Alan Brown
I used a whole suite of comparators to make my point, and the key thing is that the UK has the 12th highest poverty rate out of 35 countries. That is shameful, is it not?
Kevin Foster
The hon. Gentleman made the point in his speech that he was looking to emulate the packages given to pensioners in other countries. If he wants to emulate them, he should look at what those packages include, such as charges for medical services and tax rates that we do not charge here. The council tax rebate of £150 did a lot for my constituents. As for whether that applies in Scotland, that is a devolved matter.
On the triple lock, the rise in prices has hit many people. Many people over the state retirement age are unlikely to have the type of options that others may have to meet some of the rising costs. It is therefore vital that we look to honour our pledge to them. I accept that that pledge cannot be made immediately today, but I look forward to hearing further clarity on that next week.
About £4.7 million of pension credit went unclaimed in Torbay last year. That could have gone to some of the poorest households in the bay. When the Minister sums up, I would be interested to hear about the Government’s thoughts on that issue, particularly when so much data is available. The era of people filling in paper forms or going to a post office with a pension book is long gone. The vast majority of that is done through electronic means. This is about what could be done to fill the gap so that more people can get the support to which they are entitled, not least because once someone is assessed as being eligible for pension credit, it opens the door to a range of other benefits and support.
Anne McLaughlin
Is the hon. Gentleman aware of the work done by Loughborough University that was commissioned by Independent Age? It stated that if everybody who was entitled to pension credit claimed it, that would cost an extra £2 billion. I understand that that is a lot of money, but it also stated that the extra cost to the NHS and social care now is £4 billion, so if we could find a way of making sure that everybody got it, we would put more money into the Treasury’s coffers.
Kevin Foster
I do not recognise the statistics from that report, but I welcome the overall thrust of that argument. When we as a Parliament have decided that we want people on a low income to receive a particular type of support, we want them to be able to get that.
I was interested to hear the suggestion that the hon. Member for Glasgow East (David Linden) made about working with banks. An institution that might be slightly easier to work with is post offices, where many people on lower incomes go to collect their pension and do other banking. The Secretary of State, who represents the rural constituency of Central Devon, will be aware of people going to post offices to withdraw the exact cash amounts that they need. Cashpoints mostly operate with multiples of £10 or £20, which may be difficult for someone who has to budget tightly for their bills and spending, whereas at a post office counter they can withdraw amounts literally to the penny. That allows very precise budgeting for those who need it.
This is a welcome debate. I must say that I am interested to hear Opposition Members’ comments on who they expect to oppose the motion. We may hear one of those suspicious shouts of “No!” that are not followed by anyone showing up to vote in the No Lobby.
Pensioners in Torbay put their faith in this Government back in 2019. I believe that they put their faith in a manifesto that offered them a positive choice, and I continue to believe that that is the right basis for us to move forward. I hope to hear next week that we will honour that commitment to them.
Several hon. Members rose—
Madam Deputy Speaker (Dame Eleanor Laing)
Order. It will be obvious to the House that a great many Members want to speak this afternoon, but we have limited time. I intend to conclude the debate at about 4.30 pm. I hope that imposing a five-minute limit on Back-Bench speeches—not immediately, but after the next speaker—will give everybody who wishes to speak the opportunity to do so.
I call the Chairman of the Select Committee on Work and Pensions.
Sir Stephen Timms (East Ham) (Lab)
I am pleased to follow the hon. Member for Torbay (Kevin Foster). I thank him for the help he gave me when he was a Minister, and I agree with what he says about pension credit. I think the key is probably for local government to work more closely with central Government, because local councils have the pensioner income data to work out whether pensioners are entitled to pension credit. If we could improve co-operation, judgments could be made much more automatically.
I agree with my right hon. Friend the Member for Leicester South (Jonathan Ashworth) that this debate is happening only because of the catastrophic Government blunders in September. Before then, there was no issue; there was a very clear commitment from the then Chancellor, who is now Prime Minister, that the triple lock would be honoured. Unfortunately, what happened in September has created the very difficult situation that the Secretary of State rightly described.
It is important to remember that there has already been a big real-terms fall this year in the value not only of the state pension, but of working-age benefits, which were increased by 3.1% in April when inflation was at nearly 10%. That was justified at the time on the basis that that is how the usual uprating formula works: pensions and benefits are uprated in April by the rate of inflation in the previous September. The then Chancellor acknowledged that the effects would need to be addressed next April, so he gave an assurance in May that the same formula would be applied again for next April’s uprating. We now know that pensions and benefits will be uprated by 10.1%, which was the rate of inflation in September.
On pensions, as we have been reminded, there is also a Conservative manifesto commitment. As I said in my intervention on the Secretary of State, if the promise on pensions is not kept next April and pensions are instead uprated by less than the rate of inflation, it will be almost without precedent.
Since 1977, there has been a statutory obligation, defined in a variety of ways, to uprate in line with inflation. It has been honoured every year since then except 1986, when the rate of inflation was 1.1% and the decision was made to uprate the state pension by 1%—0.1 percentage points less. Apart from that, there has been uprating by at least the rate of inflation every single year. To depart from that approach now, on the scale that has apparently been considered recently, would be absolutely without precedent in 50 years. In November 1980, inflation was at 16.5%; the state pension was uprated by 16.5%. In April 1991, inflation was at 10.9%; the state pension was uprated by 10.9%.
It is clear why there has been that commitment all the way through: because people who have given a lifetime of work and have retired from working have already made their contribution, so there is nothing that they can do to make up the difference if the value of their state pension falls. I think we all recognise that there is an obligation on the state—a social contract—to maintain the value of the state pension. That contract should not be breached as a result of the Government making catastrophic errors in their management of the economy in September.
The considerations with working-age benefits are different. They have also been sharply reduced in real terms this year, but over the years they have frequently not been uprated in line with inflation. As a cumulative result, according to the Library, they are now at their lowest level in real terms in the 40 years since 1982-83. Trussell Trust food banks gave out 2.1 million emergency food parcels in 2021-22; they gave out 60,000 in 2010-11. They have reported that demand in August and September this year was 46% higher than last year. Why is the economy failing so many people? How many more are the Government willing to push into destitution?
The annual family resources survey has started to collect data on food insecurity to get a handle on what is going on with food banks. We now have results for the first two years, 2019-20 and 2020-21; the Secretary of State and I had an exchange about them at Work and Pensions questions recently. Food insecurity among universal credit claimants fell from 43% in 2019-20 to 27% in 2020-21, reflecting the £20 universal credit uplift introduced in March 2020, just between those two financial years. Now that that has been taken away, food insecurity will have shot up again. We will have to raise the level of universal credit to address the current mass dependence on charitable food banks.
Tahir Ali (Birmingham, Hall Green) (Lab)
Does my right hon. Friend agree that it is outrageous that we now have more branches of food banks than of McDonald’s?
Sir Stephen Timms
It is a great shame on us all that so many people are dependent on charitable food banks, and the numbers are still rising. We certainly must not fail to uprate social security, universal credit and pensions in line with inflation in April, because otherwise there will be yet another big surge in demand. That is why it is so important for the Prime Minister to honour the promise that he made as Chancellor.
There is one more uprating we need that cannot be ignored. The benefit cap was introduced in 2012. At the time, it was based on the level of median earnings. It has never been uprated. It has changed only once: in 2016, it was reduced. Its value has lost any connection with the earnings level to which it was supposed to be linked when it was introduced. If it is not uprated next April, whatever level of uprating is decided on, thousands more families will crash into the cap for the first time and many will have to start going to a food bank to keep themselves alive.
It is time to recognise that mass food bank dependence is not inevitable. We can turn back from this. We can do much better than this. In the decisions announced next week, we must—at the very least—not make things worse.
Several hon. Members rose—
Madam Deputy Speaker (Dame Eleanor Laing)
Order. We will now have a formal limit of five minutes on Back-Bench speeches.
Mr Gagan Mohindra (South West Hertfordshire) (Con)
It is an honour to follow the right hon. Member for East Ham (Sir Stephen Timms). I was brought up in the area that he represents, and I have fond memories of his part of the world. Let me also welcome the Secretary of State to his place, and, indeed, welcome the whole new Front Bench.
As we all know, our country finds itself in an incredibly difficult economic position, and I look forward to the Chancellor’s fiscal event next week. My hon. Friend the Member for Guildford (Angela Richardson), in an intervention earlier, made an important point about why the slight delay was required, namely to ensure that we have the OBR figures that Members in all parts of the House have requested during previous debates on our finances.
My party has a strong record of supporting older people, and I hope that that record will continue: we need it to do so now more than ever. One of the highlights of our Government over the last 12 years has been auto-enrolment for employees in small companies, which means that 88% of eligible employees now have savings pots that they would not have necessarily been encouraged to have before. During the pandemic, my right hon. Friend the Member for Richmond (Yorks)—now the Prime Minister—took the necessary steps to keep our economy afloat, but those decisions came at a cost. In the wake of that spending, coupled with the awful Putin’s illegal war in Ukraine, we now face a cost of living crisis. Sacrifices must be made. The Chancellor has some extremely difficult decisions to make, the results of which we will hear in nine days.
Given the cost of living crisis, and notably the hike in energy bills, it is more important than ever to protect the most vulnerable members of our society, and I am grateful to the Government for the work they are doing to support pensioners at this difficult time. As we enter the colder months, I am particularly proud of their commitment to help keep energy bills as low as possible and the additional support that is specific to pensioners, including the £300 winter fuel payment.
Like many of my colleagues, I have received countless items of correspondence from constituents pleading for the triple lock to be retained, and I trust that that decision will be made in nine days’ time. I hope that the Chancellor will continue the good work that he is already doing, and I look forward to our honouring the commitments that we have historically made in our manifesto. I agreed with the right hon. Member for East Ham when he said that when people have done the correct thing before, we should ensure that we protect them as much as possible. We should always seek to incentivise good and indeed best behaviour, and I hope that next week’s statement will demonstrate that that is being done.
Paula Barker (Liverpool, Wavertree) (Lab)
The Prime Minister recently appeared on the front page of The Times beneath the headline “State can’t fix all your problems”. While that may be true in the absolute sense, I think that the British people are right in making two basic assumptions. First, they rightly assume that the state will not make life harder, and secondly, given that the very essence of politics is priorities, they rightly expect their welfare, financial security and basic dignity to be the prime concerns that govern our actions in this place and the Government’s actions across Whitehall Departments. On both counts this Government have failed miserably, and have done so for 12 long years. In response to today’s motion, they have a golden opportunity to be unequivocal in stating that the triple lock on pensions is here to stay and will be protected.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
I have been inundated with emails from pensioners in my constituency expressing a mixture of anger, fear and despair at the removal of the triple lock. A 70-year-old woman has described sitting in her living room with only candles for heat because she cannot afford to pay her energy bills. That is unthinkable. Does the hon. Member agree that the Government must consider the full impact of removing the triple lock on our most vulnerable?
Paula Barker
I entirely concur with what the hon. Lady has said. My inbox, like hers, is full of emails giving examples similar to that of her 70-year-old constituent, from people who are choosing between heating and eating.
Why is it so important for the triple lock to be protected? The answer is quite simple. Our elderly people are suffering under this cost of living crisis, and have been suffering under Tory austerity for much longer. Pensioner poverty has been on the increase since the first half of the last decade: this is not something new. It is now widely reported that the number of pensioners living in poverty has topped the 2 million mark, including an extra 200,000 more poor pensioners in 2021 alone, according to the Centre for Ageing Better. That is a figure that should bear the hallmark of deep shame for any Government, and not least for a Prime Minister who was in No. 11 while the problem was becoming worse. Pensioners are falling into debt for the first time in their lives, with all the anxiety that that brings in later life.
Anthony Browne
Is the hon. Member aware of a report on the triple lock that I mentioned earlier, produced by the House of Commons Library? It shows that as a proportion of average earnings, the basic state pension is now higher than it was at any time under the last Labour Government, and that is a result of Conservative policy.
Paula Barker
I refer the hon. Member to the response from my right hon. Friend the Member for Leicester South (Jonathan Ashworth) to that very point, which I think was more than eloquent.
It is good, decent, working-class pensioners who are suffering, along with many more who may be asset-rich yet cash-poor. People who have worked for many decades are being denied the basic dignity of living free from fear. In the north-west region alone, nearly half a million pensioners are living in some form of poverty, including too many in my own constituency. Inflation is due to start falling; the Government know that. We already know that it would not be right to scrap the triple lock, nor would it make for sound economics—especially at this moment—to hit pensioners in the pocket with a real-terms cut in their incomes. People need support now, rather than the drawbridge being pulled up. The shift of wealth from working and middle-class households upwards has never been as great, and those inequalities are borne out in the way we treat our older people.
When Ministers hold great offices of state and lecture the British people about tough choices while dishing out billions in failed public sector contracts to their friends, removing the cap on bankers’ bonuses and increasing the cost of mortgages to pay for unfunded tax cuts for the few, it is particularly galling that the Government cannot come out and unequivocally back our pensioners today. If they can prioritise all that in times like covid and during these economic headwinds, the very least they can do is walk through the Lobby with the Opposition today. The last thing that our pensioners need now is uncertainty, and I urge all right hon. and hon. Members to join us in the Lobby this afternoon.
Duncan Baker (North Norfolk) (Con)
Some Members might say that I have something of a vested interest in this motion, given that I represent the oldest cohort of residents in the country. I will say more about that in a moment. I have often stood in this place over the last year and called for the triple lock to be restored, but before that debate is had, I think it important for us to remember why we are having this one. It is important to put on the record again that it was this Government and the then Chancellor, now our Prime Minister, who intervened to provide what were widely deemed to be some of the most comprehensive packages of support not just in this country but in the world to look after the livelihoods of people up and down the land so that they could cope and get through the period of the pandemic financially.
At the time when the Office for National Statistics was considering figures that would make it possible to generate the triple lock uplift last year, it was abundantly clear that a statistical anomaly resulting from people coming off furlough and returning to normal wages had created a bump which meant that, while we were in the grip of a pandemic and did not know quite where the virus would go next, it would be simply unfair not to make a one-off decision to revert to the double lock. We on this side of the House understood that, and I dare say we reluctantly accepted it, but we just did that. It was a year ago on 15 November—which I would just add is my birthday—when I said, on the record, “woe betide us” if we let our pensioners down again. So here we are once more, and in just nine days—that is, two days after my birthday—we will again be listening to the autumn statement that comes along. As my hon. Friend the Member for Guildford said, it is absolutely right that we consider this in conjunction with the OBR report rather than prejudging the event that will take place in nine days’ time.
This is quite some statistic that I am about to give the Secretary of State. Across England and Wales, we in North Norfolk are the oldest local authority with the highest percentage of the population aged 65 and over—33.4% of my population. That is 15% higher than the national average. One in three of my constituents is over the age of 65, and in the last decade alone that figure has increased by 17.8%. So I am not just standing up here and saying this; it really does matter to my constituency, because 27.8% of those constituents are retired, and that alone is roughly double the national average. Even further than that, 4.8% of my constituents are over the age of 85.
The argument has already been made that with inflation running at 10%, it is unfeasible for people who are on a fixed income, and certainly those who are 85 and over, to go out and earn their way out of a difficult set of bills, even though the Government have enormously supported them with many interventions to help them at this difficult time. The Prime Minister has stood at the Dispatch Box and said many times that he will protect the most vulnerable and that he will be fair and compassionate. I believe that he will be; he certainly was during the pandemic when he was Chancellor. So I do believe that in just nine days’ time the right decision—the moral and ethical decision—will be made, that the triple lock will be returned and that the one in three constituents I represent in North Norfolk who are affected will get what they have paid into all their lives.
Mrs Paulette Hamilton (Birmingham, Erdington) (Lab)
Everyone deserves financial security in retirement and should be able to rely on a decent state pension, but currently around one in six older people is living in poverty and over the last decade pensioner poverty has risen by almost half a million. People in Erdington, Kingstanding and Castle Vale have been contacting me, worried about the impact the cost of living crisis is having on their finances. Many older people in my community are facing tough choices between heating and eating and they simply cannot afford a real-terms cut to the already limited state pension and pension credit they receive. One of my constituents, an 87-year-old living with significant health issues, said to me:
“I am careful now about the electricity and try to use the microwave instead of the oven. I haven’t put the heating on because I am frightened of the cost.”
This is not a new issue. Pensioners across my community were struggling to make ends meet in the spring and summer, yet the Government have still failed to clarify their position. Despite winter now being just around the corner, we are now seeing a summer of Tory chaos coming home to roost. The Conservative Government made a manifesto commitment in 2019 to maintain the triple lock. This would have seen the state pension rise with inflation every year of the current Parliament, but conflicting statements from Ministers about where cuts might be made are hugely worrying for many across the country, and the prospect of another round of devastating austerity is looming large. My constituents need clarity, reassurance and stability to help them to manage through this crisis.
The Prime Minister has claimed that his Government are compassionate, but we are yet to see any compassion for the most vulnerable, older people in our society. The public deserve to know what options Ministers are considering, with reports that they may again refuse to apply the triple lock to pensions in the future years. If this does happen, it would be yet another breach of their 2019 manifesto commitments. Up to 850,000 older people in the UK do not receive the pension credit they are entitled to, and older people on low incomes are falling through the cracks.
If the Government are serious about supporting older people, they should now commit to targeted financial support for those in later life. We all have an interest in ensuring that older people in our communities live in dignity. The 13,000 pensioners in Erdington, Kingstanding and Castle Vale will be over £900 worse off if the Tories break their promise on the triple lock. Across the UK, older people are being overlooked and the Government must now step in and give them the support they need to stay warm and safe this winter.
Alexander Stafford (Rother Valley) (Con)
It is a pleasure to speak in this important debate. We have heard some great speeches today about the importance of the triple lock and the pension. One thing that unites the whole House is the need to look after the most vulnerable in society, and this Government have done that over the past three years and over the past 12 years: they have always put the most vulnerable at the heart of everything they have done. They introduced the triple lock in 2011, which in itself put the most vulnerable at the heart of things to ensure that there would be no more of the insulting 75p rises that happened under the last Labour Government.
This Government decided that we needed to look after our pensioners, but why are we having this debate today? Some would say it is because of the Labour party’s political games and its impatience to wait nine days. Nine days might seem like a long time to Labour Members, but it really is not if we are to get the right sort of information from the Office for Budget Responsibility. Some might say it is a political game to create noise and scaremonger pensioners, but I do not believe that; I think there is genuine concern on both sides of the House about looking after the most vulnerable. That is why I say that people can rest assured that this Government have stepped in and will step in.
One of the reasons we are here today is what the Government did to step in and help people during covid, when £400 billion of Government money was spent to help people to keep their jobs, to help the most vulnerable and to help some of the poorest and the eldest. Now it is right that we are looking at all aspects of how things are financed. There is no such thing as a magic money tree, and we need to review everything. Nevertheless, those on fixed incomes, especially pensioners, are some of the most at risk from our rising inflation. We have to be sensible about this.
When I give speeches in my constituency, I always say to people that the best way to deal with inflation is to get better jobs, good jobs, which is why I have organised three job fairs already this year and have more lined up. We want to get more people in Rother Valley into jobs, which is why our rate of unemployment is significantly lower than the national average. However, I appreciate that pensioners cannot do that, because they are on a fixed income, and although I would like to see more older people in work—they offer many benefits to the job sector—most people on pensions are reliant on fixed incomes and inflation hits their savings hard. They cannot make sacrifices on food and heating, and they cannot make sacrifices on their necessary transport, so it is important that we stick with them and look after them. However, I am not a Government Minister—[Interruption.] I know; it’s a shame—so I do not have to say that I am not going to back the triple lock. I back the triple lock, because I think it is incredibly important. I also know that the Ministers on the Front Bench are listening to the conversation. They cannot say what we want them to say, because they have to wait, but they are listening intently.
Pension credit is incredibly important to my constituents and to constituents across the country. This pension top-up is a vital lifeline, worth up to £3,300, and it is a great initiative introduced by this Government. Unfortunately, take-up is not nearly as high as is needed or as it should be. I urge Ministers to listen carefully and to try to get more people to claim the money owed to them—it is their money and it is ringfenced for them—because this Government have put in the money to help the most vulnerable.
Finally, auto-enrolment is probably the biggest success of the past 12 years of Conservative Government. We have already heard that 88% of people now have an auto-enrolled pension. This is not one-off help for pensioners; it will revolutionise how people of my generation and my children’s generation access their pensions. Pensions are a long-term, fundamental benefit and, frankly, we probably will not need to have this conversation in 30 or 40 years’ time, because the auto-enrolment scheme introduced by this Government will have solved the long-term problem. We have had this problem for decades and, over the past 12 years, this Government have provided long-term help. The triple lock provides medium-term and short-term help, and I hope it is retained—I am sure it will be—but the auto-enrolment scheme is one of the best out there, and I hope the Government expand it to self-employed people and continue to emphasise auto-enrolment.
Simon Lightwood (Wakefield) (Lab/Co-op)
In a speech earlier this year, the Prime Minister said:
“I believe that a wealthy and civilised country should offer older people dignity in retirement.”
I completely agree but, from the dozens of emails and letters I receive, it is clear that the elderly are facing anything but the dignity they deserve. Doreen from Hall Green told me:
“We will go hungry and cold, and this is what we get for working from 15 years old and paying into the system.”
Maureen from Wakefield city centre told me:
“We either live in warm homes and struggle to feed ourselves…or turn off the heating.”
It is truly shocking to hear these stories in 2022.
Voters took the Conservatives at their word when, in 2019, they committed to the triple lock. Since then it has been U-turn after U-turn, whether on income tax, fracking or their disastrous mini-Budget, and it is hard-working families and the elderly who are paying the price. More than 17,000 pensioners in my constituency could be £915 worse off overall compared with what the state pension would have been if the triple lock were fully applied in 2022 and 2023—of course, the triple lock was broken last year, too.
This matters a lot in Wakefield, where incomes are below the national average and where in parts of my constituency, even back in 2019, 26% of older people were living in poverty. That number must have risen dramatically during the pandemic and during the cost of living crisis, and it will only rise further if pensions do not keep up with inflation. In an area where long-term illness rates are high, it terrifies me to hear Age UK saying that older people are now risking their health by switching off their heating and essential medical equipment because they worry about the cost and because they fear that worse is to come.
Our older generation raised us, taught us, served us and cared for us, and in return it is only right that they should have the security they deserve in retirement. Their ask is simple. As Doreen says, they have paid into the system all their lives, and they want to be assured that they can continue to afford to live with dignity. That is why I will stand with our pensioners and support the triple lock by proudly voting for the motion this afternoon.
Anthony Browne (South Cambridgeshire) (Con)
It is wonderful to see Labour, the Conservatives and the SNP, and the Liberal Democrats at one point, so united not just by a successful Conservative policy but by a Conservative manifesto commitment. It is delightful to speak in a debate in which the Opposition are calling for the Government to support their own manifesto commitment.
Another thing that unites the House is that we all support dignity in retirement and financial security in old age. The Government have an absolute duty to support pensioners and to reduce pensioner poverty. Pensioners, as various Members mentioned, are on fixed incomes. During a cost of living crisis, as we have at the moment, they cannot go out and get a second job, work extra hours or demand that their boss gives them a pay rise. They have to live on their state pension or their occupational pension, which is why I am so grateful for all the measures that the Government have introduced during this cost of living crisis, including the energy price guarantee, the £300 winter fuel payment, the £150 increase to the warm home discount and the £400 energy bill support scheme for all homeowners. Pensioners and those on means-tested benefits will also receive an extra £650 of cost of living support.
All those measures are very welcome, but this debate is about not the Government’s emergency tailored support but the state pension. At what level should it be? Should we keep the triple lock? These questions have been at the centre of a political tug-of-war for a decade. In recent times, as I mentioned in my interventions, the state pension has been at record lows as a proportion of average earnings. Under the last Labour Government, it went down to around 16% of average earnings between 2000 and 2008—that is the lowest rate of the modern era. Various colleagues mentioned Gordon Brown’s offer to increase pensions by 75p a week in 1999, which is a derisory amount.
The whole House has spoken in praise of the triple lock, which was introduced by the Conservatives and has been a manifesto commitment ever since. I point out to the Opposition Members who deride the Government’s track record that, actually, the state pension is now far more generous than it ever was during 13 years of Labour Government. Labour’s state pension increases were initially by inflation only, which led to the 75p increase, and then in 2002 Gordon Brown introduced an increase by either a 2.5% upper limit or inflation. Labour never brought back the earnings link, which first came back in 2011 when we introduced the triple lock.
The triple lock has worked well. Since 2012-13, pensions have gone up by 2.5% four times, by earnings three times and by the CPI rate three times, which shows that the triple lock does kick in. Since 2010, we have increased the state pension by £2,300, which is 31% more than if the state pension had increased by just earnings or inflation—that is £720 more. As a result, the basic state pension as a proportion of earnings is at its highest rate for more than 30 years—higher than at any time during the last Labour Government. The new state pension is now 25% of average earnings, a historically high level.
There is no doubt that the triple lock is expensive, which is why we are having this debate. We spend more than £100 billion a year on state pensions, which is £7.9 billion more than if the triple lock had never been introduced by this Government. We clearly have an economic black hole at the moment, and we need to work out where the money comes from. I am very supportive of the triple lock, and I was elected on that manifesto commitment. I know all my colleagues are very supportive of the triple lock, but I am also not a Minister, so I am free to speak out in support of the triple lock. I fully appreciate that the Government are going through a budgetary process for the autumn statement, so they cannot say, “Yes, we support this.” They have to look at everything in the round and make sure that we live within our means. As a result, I fully support the Government’s position of not stating their position on the record at the moment. We will hear the autumn statement next Thursday, and I look forward to the Government’s pronouncements.
Grahame Morris (Easington) (Lab)
I would also like to quote the Prime Minister’s first speech from the steps of 10 Downing Street on 25 October, only a few weeks ago:
“I will unite our country, not with words, but with action…This government will have integrity, professionalism and accountability at every level. Trust is earned. And I will earn yours.”
Well, I am not sure how long those promises have lasted. It is certainly clear that the Prime Minister is avoiding a general election. In truth, he can claim no personal democratic mandate to be Prime Minister. He bases his authority on the Conservative manifesto on which he and his colleagues were elected in 2019:
“the mandate my party earned in 2019 is not the sole property of any one individual, it is a mandate that belongs to and unites all of us.”
By “us”, I think he is referring to members of the Conservative party. He continued:
“And the heart of that mandate is our manifesto.”
The Prime Minister bases his legitimacy on the Conservatives’ 2019 manifesto, so may I remind the House of what it said about the triple lock? Many Opposition Members have already said this, but let me do it again for the sake of completeness. It said:
“We will keep the triple lock, the winter fuel payment, the older person’s bus pass and other pensioner benefits”.
The hon. Member for South Cambridgeshire (Anthony Browne) said he was gratified that Labour Members were supporting the Conservative manifesto. Can I tell him that the Conservative party was not alone in making those promises? In fact, 626 hon. and right hon. Members of this House, including myself, were elected on a manifesto commitment to maintain, retain and protect the triple lock. So it is in order for us to make reference to that.
Other colleagues, including the hon. Member for Kilmarnock and Loudoun (Alan Brown), referred to the relative position of the UK. The UK has one of the least generous state pensions in the developed world, as is demonstrated by the OECD figures, which show that the UK spends less on old age pension benefits as a proportion of GDP.
In April, when the Prime Minister broke the Conservative party manifesto pledge, the state pension increased by only 3.1% instead of the 8.3% due under the triple lock. That has cost someone in my constituency on the new full state pension £487 a year. I am sure Conservative Members are going to be concerned. I lived through the days of terrible pensioner poverty and I felt that the last Labour Government went a long way to address that, through not just the basic state pension, but the supplements introduced by Gordon Brown and others.
I would be terribly embarrassed if my Government’s legacy was one of pensioner poverty. However, the groundwork for poverty has been laid by the current Government; those foundations have been laid over the past 12 years. It has left groups such as the WASPI—I know that the Minister and others do not like to hear that term—cohort of working women born in the 1950s and 1960s in desperate hardship through no fault of their own.
Fifty of the UK’s areas most at risk in the cost of food crisis have been identified and not surprisingly the north-east and my constituency are among the worst affected. This year, our communities will see the introduction of “warm spaces” to help those who are unable to heat their homes because of spiralling energy costs. Our Government and the economy are failing to meet the most basic needs—food and warmth. A real-terms cut to the state pension, alongside soaring energy and food costs, will force many more pensioners into poverty. So I urge Conservative Members to do the right thing, back their own manifesto commitment and vote to retain the triple lock.
David Johnston (Wantage) (Con)
Today’s motion is curious because, next week, we will get the decision on this issue, but let us leave that aside for a moment. Last year, I spoke in a debate on the triple lock. At that point, we had the highest level of basic state pension in relation to earnings in 34 years. At that point, it had increased by £2,050—it is now £2,300. Along with auto-enrolment, that has been one of the most significant policy decisions taken by this Government not just in pension policy, but in domestic policy much more broadly. We now have more than 19 million people auto-enrolled in workplace pensions, which is a fantastic achievement. But of course we do not just support our pensioners via the triple lock, generous though that has been. We know that pensioners spend a higher proportion of their money on energy, and there they have had a £400 reduction. They have had an energy price guarantee, which will save, on average, £700, and a winter fuel payment topped up by a pensioner cost of living payment, worth up to another £600.
We have to think about the poorest pensioners and not just think about pensioners as one big group. There we see a further cost of living payment of £650. We see cold weather payments if the temperature of their homes drops below a certain level. Underpinning both those things, we see pension credit. We have to get more people to claim it who are eligible for it because it is worth on average £3,300, which is yet more support. Time and again, both on the triple lock and on the other support the Government give, they have been very generous and constantly thought about how best to support pensioners.
When it comes to Labour motions and Labour Front-Bench speeches, I look for what is not there as much as what is. The motion is specifically about keeping the triple lock for the coming year. As I say, we will get the decision next week. The motion does not say where to get the money for that, but let us leave that to one side for now, even though it is several billion pounds. More importantly, it does not say anything about what should happen beyond that. I listened carefully to the shadow Secretary of State to see what his view on future pension policy might be, but I am afraid that I did not hear much. That is notable because week in, week out in this House what we are hearing from the Front Benchers is, “The next Labour Government will do this” and, “The next Labour Government will do that” but we did not hear that today on pension policy.
Pensions are the second highest category of expenditure after health, so a party that hopes to form a Government ought to have a view about what it wants to do on pension policy that is not just, “We will continue Conservative policies” or “We will support all the expenditure but we will not support any reductions in other areas.” I hope that in his wind-up we might hear from the shadow Minister, the hon. Member for Cambridge (Daniel Zeichner), for whom I have a lot of time, what Labour’s view of pensions might be. If the answer is, “We would have to look at the finances to understand what we will do” that is precisely what the Government have been doing to form their decisions next week.
Alex Cunningham (Stockton North) (Lab)
When I talk about poverty in this House—let us be clear that that is what we are talking about today—I usually refer to the fact that some 40% of our children in the north-east live in poverty. Not for them will be the grandparent trust fund or gift of tens of thousands of pounds for a deposit to buy their own home, and not for them the holidays or trips to theme parks with grandma and grandad—some of the things that many children in our society enjoy and even expect. That is because huge numbers of our pensioner generation, who have worked hard all their lives, are struggling to get by. It is only because they make sacrifices that they are able to ensure their grandchildren get a gift on their birthdays or at Christmas.
The state pension is the largest source of income for most older people. For some, particularly women, it is their only source of income. Meanwhile, the number of pensioners living in poverty has been rising since 2013, with the figure exceeding 2 million last year. What kind of society are we that allows our senior citizens to simply exist through their later years, rather than enjoy their reward for decades of service to our country? Is it not a great sadness that those self-same pensioners are more likely to be in ill health after a life of struggle?
Pensioner poverty is a disproportionate risk, affecting 34% of private tenants and 29% of social rented sector tenants, compared with 12% of older people who own their home. In April, the state pension increased by 3.1%, instead of the 8.3% due under the triple lock formula, costing someone on the full new state pension a real-terms income drop of £487 a year and someone on the full basic state pension £373 a year. Some Conservative Members may say, “Well that’s only £10 a week.” But Labour Members know the value of £10 to a struggling household. Energy bills typically make up 6.6% of weekly spending for the over-75s, compared with 4.2% of weekly spending for households of all ages. Without certainty from the Government over whether they will be protected, those constituents are having to enforce their own cutbacks.
Then there are those not in receipt of the full state pension. Around 1.4 million older people receive pension credit—a vital top-up for people on the lowest incomes. If pension credit is increased only by earnings, rather than inflation, an older person living alone could be missing out on a further £400 a year, rising to more than £600 for a couple. Is there no end to the dependency of this Government on those with the lowest income to pay for the mess of the past 12 years? With people choosing between heating and eating, there is an impact on public health, therefore putting even more pressure on our overstretched NHS workforce.
Reinstating the triple lock is a practical choice. Even so, it leaves the UK’s level of spending on older age benefits below that of comparable countries. According to the latest OECD figures, at 7.1%, the UK spends less on old age benefits as a proportion of GDP than the average of 7.7%. Why is that? We are one of the richest countries in the world, but, sadly, what we see is the gap between the rich and the poor widen year on year.
Time and again, Government MPs say that their latest Prime Minister has the 2019 mandate to remain in power. That mandate includes the promise to retain the triple lock, as did ours. Now Conservative MPs can pick and choose which of their promises they will keep and which they will not. The pensions promise has been broken once. Can Conservative Members really believe that any little credibility that they have left can be retained if they break it again?
Angela Richardson (Guildford) (Con)
At a time of challenges at home and abroad, it is vital that we support our pensioners through this winter. I understand the concern that is felt by many people across the country, and I am grateful to the many constituents across Guildford and Cranleigh who have chosen to share their circumstances with me. My office will do all that it can to support any constituent who reaches out for support in the coming months.
This compassionate Conservative Government have not stood by when it comes to supporting those in need. Since 2010, the Government have increased the state pension by £2,300, giving pensioners dignity in retirement and ensuring that their buying power has kept pace with inflation. It is important to note that, had the state pension solely risen with inflation, it would be £720 lower than it is today.
I am also grateful to this Conservative Government for simplifying the state pension regarding the years spent at home for women raising a family, ensuring that they are better off. I chose to spend 16 years at home raising my children and that sort of policy impacts someone like me. These reforms mean that more than 3 million women will, on average, be £550 better off per year by 2030 than they would have been under the policy that we inherited from Labour. The years spent raising a family will now count in full towards the new state pension. As colleagues have already mentioned, automatic enrolment has helped millions more people save for retirement and that is something of which we should be very proud.
I look forward to hearing from the Secretary of State for Work and Pensions in due course on the findings of his annual review of the state pension. I am confident that he will make the right decision that protects and supports our pensioners. I am also looking forward to the Chancellor’s autumn statement. It is only nine days away and I can exercise patience in waiting to have that alongside the full OBR forecast. He is no longer in his place, but I worry that the Christmas presents of the shadow Secretary of State will not survive until Christmas day without being picked up, felt and shaken about. It is not long to wait. At least I hope he will get some Christmas presents this year.
Although it is important to highlight the bigger picture, the unprecedented support that the Government are providing this winter cannot be ignored. First, I welcome the introduction of the energy price guarantee, which today—this very minute—is providing certainty to pensioners with their energy bills. I welcome the fact that the Government have gone further, and that pensioners are eligible to receive up to £850 of additional support. That support comes from a further payment as part of the winter fuel payment, the £400 discount on energy bills as part of the energy bills support scheme and the £150 council tax rebate for eligible properties.
Starting today, many households who claim the qualifying means-tested benefit, including those on pension credit, will receive their second instalment of the cost of living payment. In Guildford, 6,800 families are eligible for that payment. There are many ways that the Government are supporting those in need this winter: income support with pension credit; increasing the warm home discount; and delivering cold weather payments, to name just a few.
Locally, I welcome the support that is being provided by the Conservative-run Surrey County Council to help those who need it the most. I understand that all households will receive a cost of living directory of support that outlines the assistance that is on offer this winter. If anyone is in need of advice or help, I urge them to reach out. This Conservative Government will always support the most vulnerable in our society and I am confident that that commitment will endure.
Tonia Antoniazzi (Gower) (Lab)
Like so many of my colleagues, I have been overwhelmed by the number of constituents who have been in touch with me over the past few weeks. They are terrified about the consequences of the triple lock being scrapped—terrified because of what they are reading in the newspapers. One article in The Times today says that the Bank will raise interest rates again. Another article tells us that food price inflation will cost shoppers another £682 a year. Such headlines should be taken very seriously.
The cost of living crisis and soaring inflation are pushing food and energy prices to unprecedented highs. The decision to suspend the triple lock last year cost someone on the full new state pension £487 a year, and someone on the full basic state pension £373 a year. With inflation set to exceed 8% this year, pensioners are already facing a significant real-terms fall in income. We do not need a crystal ball to see where this is headed: the most vulnerable pensioners look to be plunged further into poverty.
The Cabinet seem to have wiped their memories of their involvement in the previous Government, and indeed in the Governments of the past 12 years, but let me remind them of the fact that it is not only the disastrous mini-Budget of a few weeks ago that has brought us here, but pensioner poverty, which has been rising for a decade.
Anthony Browne
The hon. Member said that it was terrifying that we may not have the triple lock. I agree that it is terrifying not implementing a Conservative policy. She said that she wanted to remind the Government of what has happened. Let me remind the Labour party, which has been criticising Government policy, that we have systematically, over the past 12 years, had a far more generous state policy scheme than we had under 13 years of the last Labour Government, when we only had inflation or 2.5%, and we never had the triple lock.
Tonia Antoniazzi
The hon. Member’s intervention misses the point by quite a margin, because pensioner poverty has been on the rise regardless.
The promise of this society is that we support everyone not just to survive, but to thrive. The Government seem to believe that pensions are some sort of nice extra, but that is not the case. The UK’s state pension, which is one of the least generous in the developed world, is seen as something for which pensioners should be grateful. No, they should not be grateful, because they have paid into it.
The audacity of the Government is clear. In the midst of a cost of living crisis, the like of which we have not seen for decades, they turn around to people who have paid their taxes and earned a decent retirement and tell them that, instead of the state supporting them in their retirement, they will plunge them into poverty. Breaking the 2019 Tory manifesto commitment to the triple lock for the second year in a row will leave more than 18,000 pensioners in Gower, on average, £905 worse off. Those are the statistics for my constituents.
When my constituents write to me asking how they will pay their bills this winter, how they will put food on the table, and why they are paying the price for Tory economic incompetence, what would the Minister tell them and what would she have me tell them?
Jerome Mayhew (Broadland) (Con)
I am not the first Member of the House to recognise that this motion is not a serious request of the Government, because we have the autumn statement in just nine days’ time. It is blatantly a political stunt to gain headlines.
Tonia Antoniazzi
I was going to make reference in my speech to Conservative Members saying that this debate was a stunt. It is not a stunt; it is a political lever. This is an Opposition day—this is what we do in this place. I ask the hon. Gentleman please to correct the record.
Jerome Mayhew
I am grateful for the hon. Lady’s intervention; it brings to mind a number of the interventions and speeches from Labour Members talking about pensioners’ fears as they consider the outcome of the triple lock decision. Surely this debate, called by Labour, does not reduce fear but increases it, and that in itself is wholly irresponsible. It is scaremongering.
I am surprised that Labour wants to draw attention to pensions policy, because the Government’s activities over the last dozen years put Labour to shame. Let us look at pensions more widely, because pensioners get income from multiple sources. We have the state pension, but there are also private and company pensions, individual personal savings and other state benefits in addition to the pension.
I will focus first on auto-enrolment. Under Labour, members of the public increasingly just could not afford to save for their retirement—either that, or Gordon Brown’s famous tax raid on pension pots simply made it not worthwhile to save for a pension. If we look at the data, during the 2000s private sector pension membership declined. In the year 2000, 47% of people had private pensions, but by 2012 that had fallen to 32%—a decline of 47%. By changing from an opt-in to an opt-out system, auto-enrolment, brought in by the Conservative-led Government, transformed pension saving in this country. In my view, it was perhaps the single most important intervention of Government policy over the past decade.
The figures speak for themselves: now, 75% of employees are regularly saving and benefiting from tax-free employer contributions. I used to be an employer before coming to this place, and I employed hundreds of very young people—typically 18 to 25-year-olds. We had a company pension scheme and, as a responsible employer, I tried to persuade them to start pensions, but the take-up was very low. The impact of the change to auto-enrolment was amazing, and that has been backed up by our company contributions. It is a wholly beneficial thing and it has reversed the roles.
The other point worth making is that this is Conservative values in action. Not for us the state’s putting its arms around people and being wholly responsible for individuals’ futures; we want to see people’s being helped to take responsibility for their own futures, with the state there to help the most vulnerable, and that is exactly what the Government have done in this case.
It has also been mentioned multiple times that the state pension was not a Labour idea; it was instigated by the Conservative-led Government. The right hon. Member for Leicester South (Jonathan Ashworth) is no longer in his place, but I sometimes wonder what conversations in the Treasury were like in 1999, when he was part of Gordon Brown’s inner circle. Presumably, the debate was, “Do we raise the pension by 75p or 50p, or shall we push the boat out and increase it by £1?” It is rich for the Labour party to start lecturing the Conservative Government, whose policy the triple lock actually is, given its own lamentable record on pensions. Labour has nothing to teach us here.
Anthony Browne
My hon. Friend has made some interesting points, and I think this debate has been useful to remind the Chamber that the triple lock is our policy. Given the point he has just made, and continuing the Christmas theme, does he agree that Labour attacking our track record on the state pension is a bit like Scrooge attacking Father Christmas for not being generous enough?
Jerome Mayhew
I will let that intervention speak for itself, but I entirely agree with the sentiment behind it.
Since 2010, because of the Conservative triple lock, pensions have increased by £2,300 in cash terms and by £720 in real terms. There will come a point when the triple lock will need to be reviewed; because of its statistical ratchet effect, there will come a time when we should properly remove the triple lock to maintain balance between the various cohorts of society. To date, however, it has been a powerful tool to raise pension values above those Labour lows in the 2000s that we have heard about.
In addition to the triple lock, Labour also ignored the problem of people’s—overwhelmingly women—child-rearing years not counting towards the state pension. I am delighted that, again, it was the Conservative Government who stood up for women and for the family and the importance of child-rearing, so that now raising a family counts towards the new state pension. More than 3 million will now be £550 better off as a result.
I have a minute and a half left, but I will not use it all, because others have set out the long list of additional benefits devised by the Government to assist with the cost of living crisis caused by the Russian invasion of Ukraine. We Conservatives recognise that pensioners are particularly vulnerable because they are on a fixed income, but there has been an additional £300 for winter fuel payments, the £400 discount on energy bills, £150 for affected council tax payments, and £650 additional means-tested support, as well as the additional payment for those with disabilities—and the list goes on.
On the triple lock, we will have to wait and see for nine more days, but even without it pensioners have been looked after by this Government. As the Prime Minister has repeatedly said, and as his record shows, all decisions taken by this Government will be compassionate and will look after the most vulnerable in society.
Wendy Chamberlain (North East Fife) (LD)
As I said in my intervention on the right hon. Member for Leicester South (Jonathan Ashworth), we all in this House, as the hon. Member for Easington (Grahame Morris) said, have supported the triple lock. However, we need only google “Daily Mail” and “triple lock” to see that in recent days Government Ministers have been on the news saying things to suggest that it is under threat. On the Government side, it is clear that there is a desire among Back Benchers for the triple lock to stay, but I do not think it is very fair for pensioners to have to wait and do this hokey-cokey to hear what is going to happen.
In February 2021, when this House considered the Social Security Benefits Up-rating Order 2021, the then Under-Secretary of State for Work and Pensions, the hon. Member for Colchester (Will Quince), spoke in favour of that year’s triple lock increase as
“upholding our commitment to the country’s pensioners”.—[Official Report, 9 February 2021; Vol. 689, c. 186.]
We know that by September of last year the Government had turned their back on that lock, implementing a double lock only. The hon. Member for Easington reminded us that that uprating of 3.1% means that when we discuss maintaining the triple lock now, it is not about keeping pensioners up to speed with the cost of living; they are already behind the cost of living as a result of that earlier U-turn.
We were told that the downgrading was just for one year. I said then that I was wary of trusting that the Government would keep that promise, and it increasingly seems that pensioners feel that way too. Many have said that this feels like a broken promise, and we are seeing different Ministers here giving different views. I know we are supposed to now wait nine days, but I do not accept that this is not a debate we should be having.
As the hon. Member for Gower (Tonia Antoniazzi) said, Opposition days are given to the official Opposition and the third party so that they can hold the Government to account. We are Opposition MPs; that is our job. When we are hearing from constituents about their anxieties regarding the triple lock and the energy price guarantee, it is right and proper that Opposition time be used to debate such issues. I must also say that I have also been present in this Chamber when the Government have tabled motions designed to trap the Opposition. This debate is part of what we do; it is part of how we oppose and how we get answers from the Government.
Away from politics, I want to pick up one message from a constituent who says:
“My wife is 80 and disabled and I am 81 and act as her full-time carer. We receive our bills for both gas and electricity on a monthly basis and the last 2 months have seen them triple-fold…keep in mind that these were summer-time readings. God only knows how we are to fare as things continue in this manner. Once again I plead with you to help in whatever way you can to save the Triple Lock.”
The Pensions and Lifetime Savings Association, in its paper “Five Steps to Better Pensions: Time for a New Consensus”, highlights that pension inadequacy is an increasing issue. The state pension makes up the majority of most people’s retirement income, and given how sluggish wage growth has been in the last 15 years, it is now harder for people to make adequate pension savings. It is important that we keep the state pension to protect current and future pensioners from poverty. As the right hon. Member for East Ham (Sir Stephen Timms) said, it is a social contract, and that is true for private pensions, too. We all know that there is not a pot—as a Scottish MP representing a UK party, I know there is not a pot—but we do put into pensions and national insurance on the understanding that when it comes our time to draw down, we can do so. We need to ensure that we do not break that social commitment and that social contract.
I conclude by saying that I believe firmly that the triple lock is about intergenerational fairness. If we devalue our state pension, we are also letting down young people and people of working age. Some of those of almost pension age will have seen the value of their pensions fall as a result of the recent economic turmoil, and for those people a state pension will never be more vital. For young people and people of working age, keeping the state pension viable now for those not retiring for decades to come is the right thing to do. Younger people face so many difficulties—on the housing ladder, and with increasing rents, the lowest levels of social mobility and insecure employment—so we need to ensure that we keep a pension for them to look forward to in the future.
I finish by turning to the words of Muriel, another of my constituents who has written to me. She asked:
“How are we to survive without being able to depend on our Government to do the right thing by us?”
Those are words for us all to keep considering.
Chris Clarkson (Heywood and Middleton) (Con)
It is a pleasure to follow the hon. Member for North East Fife (Wendy Chamberlain). It is also a pleasure to see the Minister, my hon. Friend the Member for Sevenoaks (Laura Trott), in her place, and I congratulate her. I also thank the right hon. Member for Leicester South (Jonathan Ashworth) for his tub-thumping support for a Conservative policy. There is more rejoicing in heaven over one sinner who repents.
There is never a bad opportunity to talk about this Government’s inestimable record when it comes to helping pensioners. Instinctively, everyone on the Government Benches wants to ensure that those in receipt of state pension get the best possible deal from the Treasury. Many of us will already have made representations to the Chancellor in one way or another, and I am pretty sure he will be making pensions a priority come the 17th.
At a time when every one of us, especially those on low and fixed incomes, is feeling the pinch as a result of the perfect storm caused by Putin’s illegal war in Ukraine and the economic shock of covid, it is right that we continue to support the most vulnerable with the limited resources we have available to us. That is why I am proud that this Government have introduced the triple lock, when no such innovation was ever introduced by a Labour Treasury. A lot of us have already mentioned Gordon Brown’s generous increase of 75p a week back in 2000. That was at a time when Labour was borrowing like it was going out of fashion and spending like a drunken sailor in a brothel. It caused so much offence that one pensioner wrote Gordon Brown a cheque to return the 75p. Gordon Brown cashed the cheque.
It was this Government who responded to the current economic challenge with the energy price guarantee to keep bills as low as practically possible. This Government provided up to £850 of additional support to most pensioners in the face of rising energy costs. This Government increased the warm home discount to £150 and extended eligibility by a third to 3 million of the most vulnerable households. Since 2010, the state pension has increased by £2,300. That is £720 more than if it had just been uprated by simple inflation alone. We have brought in automatic enrolment for workplace pensions, so that more people have extra support in their old age.
This Government take pensioners seriously. We do not treat them as tools in a now all too predictable cycle of gamesmanship that we get with every Opposition day debate. I can practically see the paid content on social media already, with a black and white photo of each of us and a misleading statement underneath, and I can see the emails coming in tomorrow morning from frightened pensioners who want to know why we have done this terrible thing we have been accused of, and that they reckon we are going to do. It is absolutely shameless, but all too predictable.
The Opposition know there is a statement coming in a few days’ time, on the 17th—as my hon. Friend the Member for North Norfolk (Duncan Baker) had to get his birthday in, it is actually five days after mine—but that means nothing to the Opposition, as there are games to be played and points to be scored. The truth is that poverty figures show that there are 400,000 fewer pensioners in absolute low income after housing costs than in 2009-10. There are 1.2 million fewer people in absolute low income before housing costs than in 2009-10 —that is 200,000 fewer children, 500,000 fewer working-age adults and 400,000 fewer pensioners. That is in part because of what we have done as a Government to increase participation in private pensions. As my hon. Friend the Member for Broadland (Jerome Mayhew) mentioned, under the last Labour Government, the actual participation rate went from 47% down to 32%. Under this Government, thanks to auto-enrolment, that is now around 75%.
When the economic truths are complex and difficult, we deserve better than the glib sixth-form politics of the Opposition. The Chancellor is absolutely right to take the time to finalise his spending decisions as part of the autumn statement, so that we can take a compassionate Conservative approach to target our cost of living support to the most vulnerable.
The truth of the matter is that we know why we have not heard anything from the Opposition: they do not have a plan. The Prime Minister made the point at Prime Minister’s questions last week that you cannot oppose a plan if you do not have a plan. We have not heard a bat squeak from the Opposition about their policies for the next election. We know that the Leader of the Opposition has already binned all the pledges he was elected on, so we have no idea what the party stands for. I will wait for the Chancellor’s statement on the 17th, and in the meantime, I will be talking to and working with colleagues to ensure we put the case for the people we have the privilege of representing, because that is what they deserve: MPs who put them first, not politics.
Stephanie Peacock (Barnsley East) (Lab)
As I was leaving my office to come across to the Chamber, I received an email from a couple in their late 70s that said:
“We need you to protect the triple lock for our wellbeing.”
This debate and this decision about the triple lock matter to pensioners in Barnsley. By threatening to break the triple lock, this Government are instead turning their back on older people, just when times are harder than ever. Indeed, alongside working families, pensioners are already struggling with the spiralling cost of living. One constituent in her sixties told me that she sat shivering as she wrote to me about not being able to afford heating. Another, aged 98, got in touch having received an energy bill of £3,700 for the next 12 months. In the context of this storm of energy bills, inflation and food prices, the Resolution Foundation has said that any cuts to pensions would be disastrous. After their reckless mini-Budget and the economic crash that followed, this Conservative Government are forcing older people to pay the price for their own economic incompetence, despite promising to protect them.
Indeed, the 2019 Conservative manifesto vowed to keep the triple lock in place, saying that under a Conservative Government, pensioners could be confident that they would receive support, security and the “dignity they deserve”. We have seen time and again that instead of keeping to their commitments, this Government prefer to U-turn, backtrack and break their promises. Certainly for many people in Barnsley East, it will not be the first time that the Government have gone back on their word regarding pensions.
During the last general election, the former Prime Minister, the right hon. Member for Uxbridge and South Ruislip (Boris Johnson) made a categorical promise to retired mine workers that their money would be returned. To date, the Government have taken £4.4 billion from the mineworkers pension scheme. A cross-party Business, Energy and Industrial Strategy Committee report concluded that the Government should not be in the business of profiting from miners’ pensions and should end the 50:50 sharing arrangement. A Labour Government would do just that.
This Government should stop taking money from miners’ pensions, and they must recommit to the triple lock to keep vulnerable pensioners above the poverty line. As we live through the worst cost of living crisis in modern times, the Government must stop making older people and working families pay the price for their reckless economic decisions.
Richard Graham (Gloucester) (Con)
What a treat to be the tail-end Charlie on the Government Benches, and it is a pleasure to follow the hon. Member for Barnsley East (Stephanie Peacock) and the very thoughtful speech from the hon. Member for North East Fife (Wendy Chamberlain), which shows that on the substance of the policy we all hope to hear announced on 17 November, there are few differences among the Members of different parties in this House. It is worthwhile, particularly with my hon. Friend the Member for Sevenoaks (Laura Trott) in her place—I warmly welcome her as the new Pensions Minister, and earlier she was sat beside the former long-serving Pensions Minister, my hon. Friend the Member for Hexham (Guy Opperman)—just to run through how and why we are where we are.
The truth is that the story starts in December 2010, five months after the coalition Government were elected to take over from the previous Labour Government of some 13 years. The then Pensions Minister, the former right hon. Member for Thornbury and Yate, Sir Steve Webb, introduced it by pointing out that the first thing he was doing was reintroducing the link between the state pension and earnings—something that Labour had unfortunately failed to do during its 13 years in government. It was wrong to do so, and he was right to reintroduce it, but he went further, with the full support of the coalition parties, and linked pensions to a new triple lock of earnings growth, inflation or a minimum of 2.5%. That promise was part of ensuring that we would never again see a weekly rise in pensions of just 75p, which has been much alluded to today. No one should ever underestimate the impact that that had on pensioners around the country.
Ruth Jones (Newport West) (Lab)
Can the hon. Member confirm that the triple lock was introduced as the result of a commission that was appointed by Gordon Brown, and Gordon Brown was the one who set up the reasoning behind and the institution of the triple lock, but it was the Government after him who actually introduced it?
Richard Graham
No; I am sorry, but that is a historical rewriting of facts that does not wash. Gordon Brown was Chancellor and then Prime Minister for all those 13 years. He had many, many opportunities to reintroduce the link to earnings and spectacularly failed to do so. With apologies to the hon. Member, I do not accept that. It is true that a lot of consultation went on at that time, but the fact is that the coalition Government reintroduced the link five months after coming into government. That is important, because the link is responsible for today’s state pension being worth over £720 a year more than inflation, which was the link under Labour. The whole point of the triple lock was that Labour’s policy was inadequate and had to be corrected by the new coalition Government.
Indeed, on 17 February 2011, at the first social security benefit uprating after the triple lock was introduced—the hon. Member for Newport West (Ruth Jones) will be interested in this—what did Labour Members do? They abstained—all of them except for 11, who voted against the uprating. Those who voted against included the right hon. Member for Hayes and Harlington (John McDonnell), who was shadow Chancellor at the time of the last Labour manifesto. Not one Labour Member, including the right hon. Member for Leicester South (Jonathan Ashworth), voted in favour of the uprating that came from the triple lock. They were wrong not to do so.
There was, of course, more to it, because the basic state pension has risen considerably, and as Sir Steve Webb put it then, the strengthening of pension credit enabled the Government to
“focus resources on the poorest pensioners.”—[Official Report, 8 December 2010; Vol. 520, c. 310.]
As he pointed out at that time, when both you and I were here, Madam Deputy Speaker, this is ultimately about
“a more appropriate, consistent and stable basis that is fair to individuals and the taxpayer.”—[Official Report, 8 December 2010; Vol. 520, c. 311.]
We come to the issue today. The Prime Minister and the Chancellor have both highlighted that in their decisions to be announced on 17 November, they will act fairly and compassionately. I have no doubt that they will, and for the avoidance of doubt, that does imply, to me, maintaining the triple lock—no Minister can possibly anticipate what might be announced in the future, as my right hon. Friend the Secretary of State rightly explained.
Over the last 12 years, the record of this Government is that they have introduced the triple lock and the important new policy of auto-enrolment for almost 20 million people, whereas Labour’s legacy is the 75p a week increase. That was not done while the right hon. Member for Leicester South was an adviser to Gordon Brown, but he has two more issues to face when the announcements of 17 November are made. In the Labour party’s 2019 manifesto, it committed to £58 billion for the Women Against State Pension Inequality Campaign group. I have warned that group time and again that it will be led up the path and nothing will be delivered. The shadow Secretary of State needs to answer on that, and he also needs to answer on what Labour’s policy will be on universal credit, which it pledged to abolish in its 2019 manifesto. For today, I agree: let us keep the triple lock.
Ruth Jones (Newport West) (Lab)
I am grateful for the opportunity to speak in this important debate. I commend my colleagues on the shadow Front Bench for bringing this debate to the House. It is a pleasure to follow the hon. Member for Gloucester (Richard Graham), though I fundamentally disagree with most of what he said, but there we are; that is what Opposition day debates are all about.
Like many people in Newport West, including those who have written to me about this issue in recent months, I believe that everyone deserves financial security in their retirement. It is a long-standing feature of our contract with the people that the cornerstone of that security is a decent state pension, and it must be a properly indexed pension, because that is how we ensure it keeps its value for future generations of pensioners in Newport West and across the United Kingdom.
I note that Government Members were elected on a manifesto commitment in 2019 to keep the triple lock, so today should be easy for them and for all of us. The Opposition support a triple lock on pensions, and the Conservative party suggested that it did in 2019, so today should see a unanimous vote in support of the motion. Ministers and Conservative MPs need to be held to account on their promise, and today provides an opportunity to do just that.
I was elected in April 2019, and in my first few months in this place, it was clear that Conservative Members supported Labour’s intention to continue the triple lock across future years of this Parliament. I am determined to keep making the case to Ministers on behalf of those Newport West residents who have been in touch in recent weeks and months. One such constituent, Christine Kemp-Philp, wrote to me and told me this:
“As a full time family carer since 1991, having given up a good career to care, and with my caring responsibilities becoming more and more difficult, I am myself disabled and a pensioner, and am finding less and less help available. With the cost of living going up and the threat of our pensions going down in real terms, I am worried for our future.”
It is important to acknowledge that the UK state pension is relatively low by international standards, and there are important differences between those who qualify for it. For example, I went back and read some excellent research from Age UK in 2020, which highlighted that 34% of private tenants and 29% of social rented sector tenants lived in poverty compared with 12% of older people who own their home outright. In addition, 33% of Asian or Asian British and 30% of black or black British pensioners were living in poverty compared with 15% of white pensioners. This is a problem for real people, who are losing real money and having to pick up the consequences.
I am also grateful to my constituent Dennis Bellew, who shared his story with me. He wrote:
“I am 77 years old…It is important to me that the government keep their promise of protecting the pension triple lock. Times are difficult for me at present and I shudder to think what it would be like if this promise was not kept. With old age comes the worsening of my asthma, arthritis, diabetes and lack of mobility, in these ailments I am no different from the thousands of pensioners in the U.K. How would I be able to keep my head above water with the ever increasing energy and food bills. Life is tough for us pensioners at present, please do not make it worse by allowing the government not to keep its promise.”
That is why I am speaking in this debate.
The Government need to consider what the current crisis means for the 1950s WASPI women affected by the change to the state pension age. I urge Ministers, as I did in Work and Pensions questions last week, to find an opportunity to bring forward more support for those women in Newport West and across the country, and to set out what immediate action could be taken and when. The treatment they have received has been disgraceful, and I have repeatedly spoken out and called for action.
I look forward to meeting the new Minister, the hon. Member for Sevenoaks (Laura Trott), and eagerly await her response to my letter confirming the meeting she agreed to. As Labour calls for a pensions system that is sustainable, sufficient and able to meet the challenges of an ageing population, I urge all colleagues to support the motion today and to give our pensioners the dignity in retirement they so richly deserve.
Hywel Williams (Arfon) (PC)
It is a pleasure to follow the hon. Member for Newport West (Ruth Jones) and the hon. Member for Gloucester (Richard Graham); they are both my friends. I was glad to hear the hon. Member for Gloucester refer to Steve Webb, who I thought was a fine Pensions Minister and deserves credit for his work in bringing in the triple lock in the first place. My party has always pressed—as well as we can from this small part of the Bench—for pensions to be linked more to earnings, which, on the whole, would ensure that pensioners were not continually in poverty, and the triple lock does that to an extent.
Around one in five people in Wales lives in relative poverty. Pensioners are among the groups hardest hit by the jump in energy and food prices, and there are severe long-term consequences to being unable to afford food and heating. Public policy, social policy and health policy in Wales are very much geared towards the concept of wellbeing rather than the separate headings of health, benefits or whatever. That is the thrust of policy in Wales, but the severe consequences of being unable to afford food and heating very much militate against it. The income squeeze is also preventing some people from engaging in social activities, which are crucial for wellbeing. The cost of those activities might be small, but they are often the first things to go when people have to economise.
As has been said, the UK spends below the OECD average on state pensions, which compare poorly relative to average earnings. The UK also compares poorly on the net replacement rate, which I do not think has been mentioned. That measures pensions as a percentage of previous earnings, and the difference is quite significant: for mandatory pensions at least, the UK stands at 58.1%, the OECD is at 69.1% and the EU is at 70.8%.
As a number of Members on both sides of the House have said, the triple lock ratchet has been very effective, and abandoning it will trap some older people in persistent poverty. That would make the case for a fundamental review of the state pension even more pressing than it is now, and such a review must be aimed at eradicating pensioner poverty.
Meanwhile, auto-enrolment to pension credit should be introduced, and mechanisms for doing that—using the Post Office or perhaps banks—have already been suggested. That would be a way of providing direct financial support and a gateway to further benefits and support. In Wales, it would mean immediate financial relief for more than 70,000 households who are eligible for pension credit but who do not claim it at present.
I want to refer briefly to two pension scandals—“scandals” is the correct term—both of which need immediate action. I will not go into any detail about the plight of WASPI women, as that has been referred to already, but the Government really should set out the steps they will take to compensate 1950s-born women.
The second scandal, which has not been mentioned and which has been pressing for many years, is the plight of former Allied Steel and Wire workers, who lost their livelihoods and their pensions when the firm went bankrupt in 2002 in very distressing and suspect circumstances, which I will not go into now. Under the financial assistance scheme and the Pension Protection Fund, any money paid in before April 1987 was not fully inflation-proofed, and many ASW pensioners have been severely impacted, with some receiving only half the value of what they are actually owed. When my right hon. Friend the Member for Dwyfor Meirionnydd (Liz Saville Roberts) asked what that meant in real terms, the response from the DWP was that it would be too costly to find out. Well, the ASW pensioners are actually paying that cost, and the response from the DWP was a disgrace, so I press the Government to look at that case yet again.
Tahir Ali (Birmingham, Hall Green) (Lab)
I was quite alarmed by some of the comments from Conservative Members about why we are discussing this issue—some even described this debate as theoretical, while others said it was irresponsible to discuss this issue. My response to that is that we should ask the millions of pensioners who are affected whether it is worth discussing this issue and whether this debate is irresponsible or worth while.
The pension triple lock is vital to the wellbeing of millions of retired people across the country. I speak on behalf of pensioners in my constituency, and I would like to express the absolute importance of the Tories not breaking their manifesto pledge to protect the triple lock pension guarantee. Just three weeks ago, they were stating that there was a commitment to maintain the pensions triple lock; now, the Prime Minister refuses to guarantee that it will remain in place. That is understandably causing uncertainty and distress to millions of pensioners.
By now, we and the public are used to the Tories continuously going back on their word. That is why they cannot be trusted to run this country or to look after the interests of pensioners. The cost of living is already rising rapidly because of the economic mess that they have got us into. That crisis has been engineered in and delivered from Downing Street.
Pensioners rely on the state pension to help them make ends meet, no matter how difficult that is. The fact that the Government are even considering putting that minuscule security blanket in danger is ridiculous and incredibly scary for pensioners who need the triple lock in order to live a simple life. Many pensioners are not eating properly or putting the heating on in order to make ends meet.
I know only too well the concerns that many pensioners have. I recently received a letter from a constituent who has retired. He said:
“I am afraid in these dire times. My outgoings are exceeding my incomings. It is getting worse daily and utility bills are rising again. The future looks very bleak. No one mentions the pensioners. It seems we are being brushed under the carpet”—
that has certainly been the case with the way some Conservative Members have responded to this Opposition day motion. The hopelessness and fear that that person expressed to me is shared millions of times over.
The pandemic and the cost of living crisis have hit our most vulnerable the hardest. We cannot allow more pensioners to be pushed into poverty because of the outrageous decisions of this incapable Government—a Government whose decisions are, in reality, costing lives. Pensioners are frightened and living a reduced quality of life. They are distraught and living in severe uncertainty because this Government cannot keep their priorities in check.
The Prime Minister claims that the Conservative party is a compassionate party, but his actions speak louder than his words. The Tory manifesto clearly promised that the triple lock would be protected. Now, the Prime Minister is considering not only breaking another promise but breaking all the pensioners across the UK.
Margaret Greenwood (Wirral West) (Lab)
Many residents in Wirral West have written to me and spoken to me about their extreme anxiety about the cost of living crisis and what they see as the Government’s lack of commitment to maintaining the state pension triple lock for the next financial year. They are desperate for certainty and they need help.
I note the Secretary of State’s remarks about the forthcoming fiscal event, but surely he or the Minister can give some comfort to retired people who are anxious about this issue. They need that reassurance because there has been so much turmoil in the Conservative party—turmoil that has been accompanied by numerous policy U-turns. It is vital that the Government retain the triple lock, as it was a Conservative party manifesto commitment and must be honoured.
As we know, last year the Conservatives broke that commitment. At the time, the Government said that they
“can and will apply the triple lock as usual from next year for the remainder of this Parliament, in line with our manifesto commitment.” —[Official Report, 7 September 2021; Vol. 700, c. 185.]
It is therefore vital that they keep their word. People are struggling with the cost of living crisis, which has been made far worse by the chaos that the Conservative Government of just a few weeks ago brought to the financial markets with their mini-Budget. Through sheer recklessness, their policy choices sent mortgage rates soaring, brought the pensions industry to the brink of collapse and crashed the economy.
Despite the comments that we have heard from the Government today, pensioner poverty is an extremely serious and live issue. This year’s “State of Ageing” report by the Centre for Ageing Better found that almost one in five people over the age of 65 were living in poverty in the 2019-20 period. That is 2 million people. Age UK has said that malnutrition is a growing risk for older people, and that if the UK Government fail to raise the state pension and benefits in line with inflation, they will plunge many people into a genuinely desperate situation. Pensioners are struggling with soaring food prices and increased energy costs.
I would like to share with the House some of my constituents’ experiences and fears, because they have asked me to represent their concerns. One woman who is in her early 80s has written to me to say that she suffers from a number of health issues, including rheumatoid arthritis. It is vital for her to keep warm, and even though she is cutting back on using the heating, her energy bills keep rising alarmingly. She says:
“It’s hard to imagine where it will all end.”
Another constituent told me that she and her husband are currently struggling with a huge increase in the cost of living and out-of-control heating bills. They sit at night with blankets wrapped around themselves, as they cannot afford to put on the central heating. Their fuel bills have increased to more than £270 a month, and they are worried that they will go up again next April. Another constituent whose partner has a number of long-term health conditions has said that she is
“petrified to put the heating on and the hot water is only put on once a day for a short period.”
She is really concerned that her partner’s health will get worse because they cannot heat their home. One woman in her mid-70s told me that she worries every day about heating and food. She asked for the triple lock to be protected simply so that she and other pensioners can afford to live.
It is clear that the triple lock on the state pension must be maintained for my constituents and for people across the country. It is about dignity and security for older people and about protecting them from poverty. I also ask the Minister to set out what action her Government will take to encourage greater take-up of pension credit. The Government must do the right thing and come forward today with a commitment to protect the triple lock.
Charlotte Nichols (Warrington North) (Lab)
We all know that this is an alarming time for our constituents, as we face a winter of soaring energy, food and necessities costs, but it is even more so for pensioners on a fixed income. In the past few weeks, we have heard Tory Ministers giving their out-of-touch solutions for the cost of living crisis: “Get a new job,” or, “Work more hours”. That is patronising and unhelpful advice for desperate people of working age, but it is even less helpful for the elderly.
The number of pensioners in poverty has risen by almost half a million in the last decade, and now the Conservatives will not even commit to maintaining the pensions triple lock. They have already broken and back-tracked on so many of their 2019 promises that they have no mandate for what they are doing, but I warn them that if they abandon this commitment as well, the pressure for a general election will be unstoppable. With rising prices, hits to private pensions and the crisis in the NHS and social care, pensioners face a triple whammy if the triple lock is lost.
In recent weeks, I have been alarmed listening to the experiences of my elderly constituents, who, during my regular doorstep surgeries around Warrington North, have reported to me that not only are they not turning the heating on, as they are frightened of the cost, but that their estates have been going dark early in the evenings, as even keeping the lights on is becoming too expensive for too many. That is not just in the central six wards of Warrington, which have historically faced higher levels of deprivation, but even in our ostensibly more affluent areas, such as Rixton-with-Glazebrook, Culcheth, Woolston and Croft, where incomes and rates of home ownership are higher, and which we would not typically associate with fuel or food poverty. That pain and anxiety is being felt right across the board by our elderly residents in Warrington.
I want to draw the House’s attention in particular to the mineworkers’ pension scheme and the report published last year by the Business, Energy and Industrial Strategy Committee, on which I serve. We noted that the 1994 scheme’s sharing agreement allows the Government to keep 50% of any surplus from miners’ pensions. Since then, the Government have received over £4.4 billion from the scheme without contributing a penny, while former miners receive an average pension of only £84 a week, leaving them dependent on the maintenance of the state pension. This is intolerable. We made a clear cross-party recommendation that the scheme should be reviewed and the £1.2 billion reserve fund be given back to pensioners immediately. No progress has been made in the past year. I urge the Minister to get this done. Retirees in coalfield areas such as mine deserve better, and righting this wrong will be a huge boost at a most needed time.
As one of the younger Members of this House, I can report that many of my generation despair of ever receiving a state pension worth the name. They may think that this is a debate that does not affect them and is just another example of the Government taking from the young and poor to give to the elderly and wealthy, but they are wrong. If we do not fight for pensions to be protected and maintained now, we really will not have a worthwhile income in retirement tomorrow. The real-terms impact of a cut now affects future retirees even further—in cumulative lost interest in every future year—than the impact on pensioners today. I want to see social security for old age for people like me, born in the 1990s, and younger, not see it wither away now. This is even more vital as house prices have prevented many young people from stepping on to the housing ladder, so we will be carrying debts and mortgages to an older age. The way we challenge generational unfairness is by doing more to tax accumulated wealth, particularly wealth that is hoarded rather than invested.
The whole country knows that this Conservative Government have crashed the economy. They know that the Government are desperately looking for soft targets to make cuts, but there are not any more after a decade of failed austerity. The Government cannot be allowed to use this as an excuse to desert their triple lock promises as well. Old and young, we will be watching closely to see how Conservative MPs vote today on this basic issue of generational fairness and giving people the reassurance they need at this difficult time.
Kate Hollern (Blackburn) (Lab)
A number of Conservative Members have asked why we are having this debate today, and given the events over the last few weeks, I agree we should ask why we are having it. It is because only a few weeks ago the Prime Minister said he was “totally committed” to protecting the triple lock for pensioners. Subsequently, we have had Ministers refusing to answer direct questions: “Will you protect the triple lock?”—“Well, it’s under review.”
As I say, only weeks ago the Prime Minister said he was “totally committed” to the triple lock, so I suspect another reason we are having this debate today is that the beauty contest in the summer, with very bold statements, has left a number of areas now under review, and that does not give us any confidence at all. The Government took a huge gamble in September and made a complete mess of it, and that is why we are here today. Unfortunately, there is a chance that pensioners and less well-off people will pay the heavy price for the mistakes that were made.
In April, the state pension rose by 3.1%; it should have been by 8.3%. A number of Conservative Members have spoken about the party that protects the triple lock, but it was broken last year and it is in real danger of being broken this year. Last year, that left pensioners £487 worse off. This year, if the same applies, that will be another £480. We have heard Conservative Members talk about covid, and I accept that the Government stepped up and delivered support for many across this country. We have heard about the war in Ukraine, which is a terrible situation. Putin’s war is absolutely terrible. However, these facts were of course known before the Prime Minister gave that total commitment to the triple lock, so what happened in that period of time?
In Blackburn, 13,694 pensioners will be left £900 worse off, right in the middle of a cost of living crisis. We know that pensioners are particularly vulnerable in the energy crisis. What is the sense of giving support for pensioners to brave the energy crisis—only partial support, because they will still pay £1,000 more than they would have done—and then to take it back with the other hand?
Pensioner poverty has been on the rise since 2013, despite the broad statements from Conservative Members. The facts speak for themselves, and this information can be checked. More than half a million pensioners across this country are living in poverty, and we should hang our heads in shame at that, given the wealth this country actually has. The triple lock has been so important in holding back those numbers, and not only do we not want them to increase, we want them to be drastically reduced. These people have worked all their lives and deserve better. They have been penalised for mistakes made by members of the Government.
Is the Minister concerned about breaking the triple lock? I would like an answer to that. What assessment has he made, should he break that promise, of the potential for pensioners dying in poverty? How many Conservative Members agree with what the former Chair of the Conservative party said, which is that people should work more hours and go for better jobs? Tell that to pensioners. The Government made this promise for good reason, and Conservative Members stood on that promise to ensure that older people have the security and dignity they deserve. What has changed? Does the Minister still believe that voters deserve security, dignity and peace of mind in their old age? Will he accept that a second year cut or change to the triple lock is not acceptable?
Several hon. Members rose—
Mr Deputy Speaker (Mr Nigel Evans)
After the next speaker the wind-ups will begin, so anybody who participated in the debate should make their way to the Chamber now.
Feryal Clark (Enfield North) (Lab)
It is a pleasure to follow my hon. Friend the Member for Blackburn (Kate Hollern). My constituents of Enfield North simply cannot afford, and do not deserve, to pay the price for this Government’s mistakes. The Tories have crashed the economy, and now pensioners could be paying the price. As Members across the House have said, people who have worked hard their entire lives rightly expect security in retirement, and the only reason that the Government are considering not protecting the triple lock is due to the mess they have pushed our economy into.
The economic crisis created in Downing Street means that, in addition to the triple lock, every pledge made in the summer leadership contest is now under review. In my constituency, abandoning the 2019 Conservative manifesto commitment to the triple lock on state pensions for a second year in a row could leave almost 13,000 pensioners £900 worse off on average. The past 12 years of Tory mismanagement have left more and more of my constituents in poverty. Over the past decade, pensioner poverty has risen by almost half a million people. Since 2015, Enfield has risen from being the 12th to the 9th most deprived London borough, and since 2021, homelessness has risen by 250%. One in three workers in Enfield is paid below the London living wage, and one in five workers is low paid. Now, the Government are considering enforcing an average cut of £408 next year on pensioners in Enfield North, if the triple lock is broken again when pensions are uprated in April.
How can pensioners in Enfield North and around the country ever trust a word the Conservatives say when the Prime Minister just weeks ago committed to the triple lock? When the then Chancellor suspended the triple lock last year, he promised to reinstate it the following year. He now refuses to give certainty to pensioners, leaving them wondering whether they will be betrayed yet again. However, trust is not the issue here—we all know we cannot trust this Government. They tell us that they are doing something one day, and the next day it is gone. Pensioners in Enfield North tell me that they are already struggling with soaring food and petrol costs. Pensioners are already staying on the bus all day just to keep warm, and they are terrified of turning their heating on this winter, due to the costs that will incur.
A 73-year-old constituent wrote to me this week, concerned about how they will manage their Raynaud’s disease this winter, after receiving a large bill for their consumption and the rocketing cost of living. Pensioners should not now pay the price for Tory mismanagement of the economy. The Government must commit to keeping the triple lock, and not keep my constituents, and pensioners across the country, waiting. My constituents deserve not just to survive this winter, but to thrive, and that is why I will be backing the motion today.
Matt Rodda (Reading East) (Lab)
I am pleased to close this important debate for the Opposition. As my right hon. Friend the Member for Leicester South (Jonathan Ashworth) said, it is about a simple and very important question: will the Government honour their manifesto pledge to millions of pensioners—13 million, many of whom have no income other than the state pension? As we have heard, the Government failed to raise the state pension in line with the triple lock last year and, to make matters worse, pensioners face in effect a £900 cut to their income if the triple lock is ignored this year.
The state pension matters enormously and, so far, the Government have failed to give pensioners the reassurance that they deserve. As my right hon. Friend said, this should not be a controversial question; it should simply be something that the whole House can agree with, yet that request for simplicity, clarity and reassurance at a difficult time has been met with a lack of understanding. I hope that the Minister in responding will think again, treat pensioners with more respect and reassure them that the Government will stick with the triple lock. The uncertainty of the last few weeks has put pensioners under terrible stress. That should never have happened. The Government should now reassure pensioners. As food and fuel bills soar, the very least that Ministers can do is give the simple answer that they will keep the triple lock in this difficult situation.
The debate has been an important opportunity for Members from across the House to remind Ministers of their duty to pensioners. Powerful arguments have been made for openness and clarity. We have heard that, at a very difficult time, pensioners and others on fixed incomes are under real pressure. The hon. Member for Kilmarnock and Loudoun (Alan Brown) reminded the House that pensioners face a desperate situation with bills rising and called for clarity. The hon. Member for Torbay (Kevin Foster), who is in his place, stressed his support for the triple lock and the importance of the state pension to many of his constituents. He also called on the Government to do much more to encourage pensioners to claim pension credit.
The Chair of the Select Committee, my right hon. Friend the Member for East Ham (Sir Stephen Timms), made some excellent points, including that the Government, sadly, made a series of serious blunders in September. There has already been a big fall in the value of state pensions and the Government gave an assurance that pensions would be uprated. That was a manifesto commitment. He also gave us historical context, going back as far as the 1970s. Pensions have been uprated over a long period. Further, he went on to make the telling point that there is a social contract between people in work, the Government and pensioners.
Other Members made excellent points. The hon. Member for South West Hertfordshire (Mr Mohindra) called for the triple lock to be retained. My hon. Friend the Member for Liverpool, Wavertree (Paula Barker) made a powerful speech in which she talked about the importance of protecting the most vulnerable and the Government’s duty to do that on behalf of society as a whole.
There was a huge number of other contributions, which I cannot refer to in great detail. However, in summary, my hon. Friend the Member for Birmingham, Erdington (Mrs Hamilton) made an excellent speech, the hon. Member for Rother Valley (Alexander Stafford) spoke, and my hon. Friend the Member for Wakefield (Simon Lightwood) also spoke powerfully. The hon. Members for South Cambridgeshire (Anthony Browne), for Wantage (David Johnston), for Guildford (Angela Richardson), for Broadland (Jerome Mayhew), for North East Fife (Wendy Chamberlain) and for Heywood and Middleton (Chris Clarkson) spoke, as did my hon. Friends the Members for Easington (Grahame Morris), for Stockton North (Alex Cunningham) for Gower (Tonia Antoniazzi) and a number of others.
My hon. Friend the Member for Barnsley East (Stephanie Peacock) made a fascinating and important point about the miners’ pension fund and the need for the Government not to take money out of it. The hon. Member for Gloucester (Richard Graham) spoke, as did my hon. Friend the Member for Newport West (Ruth Jones). The hon. Member for Arfon (Hywel Williams) made an important point about ASW, the issues with the Pension Protection Fund and those pension funds that got into difficulty before the PPF was set up. My hon. Friend the Member for Birmingham, Hall Green (Tahir Ali) made some powerful points as well, as did my hon. Friend the Member for Wirral West (Margaret Greenwood), who pointed out the pressure on pensioners from the cost of living crisis.
My hon. Friend the Member for Blackburn (Kate Hollern) made some powerful points, as did my hon. Friend the Member for Warrington North (Charlotte Nichols), who talked about pensioner poverty rising, affecting half a million people. Finally, my hon. Friend the Member for Enfield North (Feryal Clark) spoke eloquently about the need for security at this time.
Time is pressing. Today’s debate has been full and frank, and I hope Ministers will now respond with the honesty and transparency that pensioners deserve. As my hon. Friends and Members from across the House have said, this is a very important issue. The Government made a manifesto pledge and, last year, Ministers broke that pledge. Pensioners across the country are now facing unprecedented levels of inflation, particularly in food and fuel. Given that, it is vital that Ministers keep the triple lock and that they reassure pensioners of their intentions before the financial statement at the end of this month. Quite simply, pensioners have waited for too long, suffered too much uncertainty and put up with far too much stress for the Government to do anything less.
It is, as hon. Members have mentioned, the first duty of Government to protect the most vulnerable. I hope the Minister will now offer clarity and reassurance for millions of people across the country.
The Parliamentary Under-Secretary of State for Work and Pensions (Laura Trott)
I thank all hon. Members for their valuable contributions to the debate.
Since 2010, pensioner incomes have gone up, absolute pensioner poverty has gone down and we have corrected the historic inequalities towards women in the state pension. That is a record that we on the Government Benches can be proud of. The decision on how to uprate state pension for this year is taken by the Secretary of State at the same time as the uprating decision on all benefits for those of working age and over state pension age.
Alan Brown
The Minister is repeating what the Secretary of State said earlier about pensioner poverty going down. The reality is that it is down only on old statistics. Pensioner poverty is increasing. Fuel poverty is increasing. So will the Government update the House on what the true figures on poverty are in the UK?
Laura Trott
We absolutely recognise that this is a very difficult time for pensioners. That is why we put a substantial package of support in place, which I will come on to later.
The Secretary of State set out, when opening the debate, that the results of his uprating review will be announced alongside the autumn statement on 17 November. To nobody’s surprise, I will not be pre-empting the outcome of that review today. However, reflecting the debate this afternoon, it is important to highlight how pensioners have been supported since 2010.
The yearly amount of the basic state pension has risen by over £2,300 in cash terms, rightly highlighted during the debate by my hon. Friends the Members for South Cambridgeshire (Anthony Browne), for Torbay (Kevin Foster) and for Heywood and Middleton (Chris Clarkson). Average weekly pensioner incomes have increased by 12% in real terms and as a result absolute pensioner poverty has fallen by 400,000 since 2010.
We are forecast to spend over £134 billion on benefits for pensioners in 2022-23. That amounts to 5.4% of GDP.
Karin Smyth (Bristol South) (Lab)
If everything has been so good since 2010, why did the Government stand on a manifesto commitment in 2019 to protect the triple lock? What was the point of that?
Laura Trott
We have been absolutely clear about our record since 2010. I have been clear that I cannot pre-empt the decisions of the Secretary of State. The point is that we on the Government Benches have put plans in place to help pensioners this winter. We are not waiting until next April.
Mr Mohindra
I welcome the Minister to her place. Can the Minister confirm to the House again that, if we wait nine days, we will be given all the information this House seeks on the financial statement, which is due next week?
Laura Trott
My hon. Friend, on this as with so many other things, is absolutely right. I will make some progress now on my speech.
At the heart of the 2016 reforms we made to the state pension was a correction of some of the historic unfairness in the previous system, particularly for women, the self-employed and lower-paid workers.
Laura Trott
I am just going to make some progress, I am sorry.
That means women no longer need to rely on the pension contributions of their husbands, and it is more generous to those who spend time looking after their children, as my hon. Friends the Members for Guildford (Angela Richardson) and for Broadland (Jerome Mayhew) pointed out. As a result, more than 3 million women stand to receive an average of £550 more a year by 2030.
Laura Trott
I am sorry, but as I said, I will make some progress.
Under the state pension, outcomes are projected to equalise for men and women by the early 2040s, more than a decade earlier than they would have done under the old system.
The other important pillar of the 2016 state pension reforms was automatic enrolment. That was raised by my hon. Friends the Members for South West Hertfordshire (Mr Mohindra), for Rother Valley (Alexander Stafford), for Broadland and for Heywood and Middleton. Automatic enrolment into workplace pensions has had a transformative effect on pension-saving participation. As my hon. Friend the Member for Broadland pointed out, private savings for pensions went down under Labour.
Over 10.7 million people have been automatically enrolled into a pension by more than 2 million employers in every sector of the economy, seeing an additional £33 billion saved into workplace pensions each year compared with 2012. Automatic enrolment has helped many previously under-represented groups to begin pension savings, such as low earners, young people and women.
Margaret Greenwood
The Minister is being generous in giving way. It is good to see her being so keen on auto-enrolment. Will she be clear with the House that that policy was designed by the Labour party?
Laura Trott
But it was not implemented under the Labour Government.
In 2012, 40% of eligible women working in the private sector participated in a workplace pension. As of 2021, that had increased to 87%—higher than for eligible men.
Laura Trott
I will make a bit of progress; I have been quite generous on interventions.
We know that the coming months will be tough for everyone, but especially for pensioners. I thank all hon. Members who have raised cases on behalf of their constituents. The Government fully understand the difficulties that pensioners will face this winter and will stand by those in the most need. That is why the Government have made substantial support available for pensioners struggling with the cost of living this winter. As my hon. Friends the Members for Wantage (David Johnston) and for Gloucester (Richard Graham) pointed out, we have not heard much from the Labour Front-Bench team today about what their plan would be for this winter.
We have a plan that includes the £650 cost of living payment for those on pension credit to help with the rising cost of living. There is a £400 reduction on energy bills for all domestic electricity customers over the coming months and the £150 council tax rebate received by 85% of all UK households. Those on state pension will also receive an increased £500 winter fuel payment if they are under 80 or a £600 winter fuel payment if they are 80 or over. In total, that will mean that all pensioners receiving the state pension could receive up to £850 of additional support in the coming months and that pensioners on the lowest income who are claiming means-tested benefits will receive up to £1,500.
Laura Trott
I will make a bit of progress and then come back to the hon. Gentleman.
Pension credit was raised by a number of Members, including the hon. Member for Kilmarnock and Loudoun (Alan Brown), my hon. Friend the Member for Torbay, the right hon. Member for East Ham (Sir Stephen Timms), the hon. Member for Birmingham, Erdington (Mrs Hamilton), my hon. Friend the Member for Rother Valley and the hon. Members for Arfon (Hywel Williams) and for Wirral West (Margaret Greenwood). My predecessor—the Minister for Employment, my hon. Friend the Member for Hexham (Guy Opperman)—put in a huge amount of work to increase awareness of pension credit. We have seen a significant increase in the number of claims, peaking at a 275% increase year on year during pension credit awareness week in June. We know, however, that only seven out of 10 people who are eligible to claim it do so. That means that £3,300 of additional support is not being claimed by around 850,000 households. Clearly, it would make a significant difference if even some of that money—totalling £1.7 billion—made its way into the pockets of the poorest pensioners.
The benefit of pension credit is that, as many Members have mentioned, it passports to an array of additional support, even when a person’s entitlement is very small. A pension credit recipient will receive a TV licence if they are over the age of 75 and get access to housing benefit and council tax support. The second half of the Government’s cost of living support—worth £324—will also be paid to all pension credit recipients. However, time is running out for those who have not yet claimed pension credit. The crucial date is 18 December. If someone claims pension credit by then and is eligible for the maximum three-month backdating, they will receive £324 of support to which they are entitled. It is therefore essential that all of us here urge our constituents to visit the pension credit page of gov.uk or to call the number listed to check eligibility of claim.
On automatic enrolment, the right hon. Member for East Ham and my hon. Friend the Member for Torbay raised an interesting idea. From the information that I have, the Government do not have the data to be able to do it, but I will definitely explore further the point about local government and what more we can do with data.
Alan Brown
The Minister spoke about the extra support for pensioners—I think she said it was £850. Does she realise that that does not even cover the increase in the average energy bill, which has gone up from £1,100 to £2,500? More importantly, what does she think energy bills will be when the Government’s support ends come April?
Laura Trott
That does not include the energy price guarantee.
As the Secretary of State set out to the House and as I said at the start of my speech, we cannot pre-empt the fiscal statement, but it is the Conservatives who have increased the state pension, it was the Conservatives who introduced automatic enrolment and it is the Conservatives who have reduced absolute pensioner poverty. This Government have always protected and will always protect the most vulnerable: that has been our track record since 2010, and that is what we will continue to do.
Question put.
Jonathan Ashworth
On a point of order, Mr Deputy Speaker. Given that the House has just endorsed our motion opposing a further real-terms cut in the value of the state pension, and given that every Conservative Member who spoke endorsed the sentiment of our motion opposing a further real-terms cut to the state pension, could you advise me on how, should the Chancellor of the Exchequer ignore the will of the House next week, we could bring back this motion so that those Conservative Members who spoke out do not need to sit on their hands and could vote with us for their own manifesto commitment?
Mr Deputy Speaker (Mr Nigel Evans)
I thank the right hon. Gentleman for giving notice of his point of order—he is such a gentleman. The House has clearly expressed its opinion today but, as he has rightly pointed out, there will be a financial statement on 17 November. We will wait to see what that financial statement says. I am absolutely certain that, should the Chancellor not do what the House has expressed, the right hon. Gentleman will be back at the Dispatch Box forthwith.
Papers Relating to the Home Secretary
(2 years ago)
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18:47 - The House divided: - Ayes: 208 / Noes: 300 - Question accordingly negatived.
Mr Deputy Speaker (Mr Nigel Evans)
Some Members may have noted that the motion on the Order Paper is for an order, rather than for a Humble Address. As “Erskine May” says, the formula used simply depends on whether the motion is directed at a Department headed by a Secretary of State. A Humble Address may also be appropriate for matters closely connected to the prerogatives of the Crown, but in practical terms there is no difference between an order and a Humble Address.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
I beg to move,
That, given the exceptional security concerns raised regarding the Rt Hon Member for Fareham serving as Secretary of State for the Home Department, this House:
(1) orders that there be laid before this House, within ten sitting days, a return of the following papers:
(a) any risk assessment of the Rt Hon Member for Fareham by the Cabinet Office or the Prime Minister’s Office relating to her appointment
(b) any document held by the Cabinet Office, the Home Office or the Prime Minister’s Office containing or related to
(i) any security breaches by the Rt Hon Member for Fareham
(ii) any leak inquiries regarding the Rt Hon Member for Fareham, including during her time as Home Secretary and Attorney General
(c) the minutes of, submissions relevant to and electronic communications relating to, any meeting within the Cabinet Office or the Prime Minister’s Office at which the appointment of the Rt Hon Member for Fareham, or advice relating to that appointment, was discussed in a form which may contain redactions, but such redactions shall be solely for the purposes of national security; and
(2) recommends that where material is laid before the House in a redacted form, the Government should at the same time provide unredacted copies of such material to the Intelligence and Security Committee of Parliament.
It is 15 days since the Prime Minister appointed his new Cabinet, and 14 days since it was reported that he had been advised not to reappoint certain Ministers, including the Home Secretary and, it was rumoured, the Minister without Portfolio, the right hon. Member for South Staffordshire (Sir Gavin Williamson), to their posts on the grounds of standards and of security. Fourteen days in which it has been reported that the Home Secretary breached Home Office security arrangements not just once but seven times; that she may have also broken insider trading rules; that as Attorney General she was investigated several times by leak inquiries; that she ignored legal advice on Manston, contrary to her statement to Parliament; and that she failed to take the action needed to solve the dangerous overcrowding at Manston, leaving her successor and predecessor to pick up the pieces, and that she may well have run up a huge legal liability for the taxpayer as a result, breaching the ministerial code again in the process.
It has also been reported that the Minister with Portfolio sent abusive texts to the then Government Chief Whip, that the Prime Minister was told about this and knew the former Chief Whip had put in a formal complaint, and that there are other complaints against the Minister without Portfolio including, most seriously, words used towards a civil servant about slitting his throat or jumping out of windows—words that it is reported the Minister with Portfolio has not denied using.
This is in the space of two weeks. Many people have been appalled by these appointments, and serious doubts have been raised by many Conservative Members who believe standards need to be maintained. The Prime Minister promised us that this would be a break from his predecessors, from the favours-for-mates culture of the right hon. Member for Uxbridge and South Ruislip (Boris Johnson) and from the chaos of the right hon. Member for South West Norfolk (Elizabeth Truss). Instead, the opposite has happened.
People have been appointed to senior jobs in the Cabinet, running the country, not because they can do the job or because they will maintain the high standards and security that the Government need but because of dodgy political deals. Here is what we know: the Home Secretary breached the ministerial code, sent Government documents not only to her private email but to other people outside Government who were not authorised to receive them, including a Back-Bench Member, his spouse, and someone else entirely by accident. She was forced to resign and then, six days later, she was reappointed.
That, in itself, is extremely hard for people outside the Conservative party to understand. For a police officer who breached their code of ethics or who was responsible for security lapses to the point of being forced to resign, or for a civil servant, public appointee or company employee who was found to have broken their employment code or security rules to the point of being required to resign, the idea that they could be reappointed to that same job just six days later is unthinkable—the idea that somehow, because they had apologised in the meantime, six days off is just fine.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
I have had letters from upset civil servants who have seen colleagues make lesser misdemeanours and lose their jobs, yet seen the Home Secretary, the woman in charge of national security, hold on to hers. Does my right hon. Friend agree that this shows that there is one rule for the Home Secretary and one rule for everybody else?
Yvette Cooper
My hon. Friend is exactly right on that. It is worse, as the Government do believe that standards on ethics and security should be upheld throughout the public sector or across the economy, just not, it would seem, in the Cabinet—not in the post responsible for upholding the law and for maintaining our security. It really is one rule for them and another for everyone else.
Gareth Johnson (Dartford) (Con)
I am hearing what the right hon. Lady is saying, but is this motion not an obvious attempt to divert attention away from the fact that the Labour party simply does not have any alternatives or policies in home affairs, or any other area for that matter? This is a simple, naked attempt to play the man not the ball—or in this case, the woman not the ball.
Yvette Cooper
The Labour party has set out a whole series of policies, both on what needs to be done to get neighbourhood police back on the beat—I am afraid that the hon. Gentleman’s party has cut 6,000 neighbourhood police from our streets over the last five years—and with the measures to set out a National Crime Agency unit to take on the criminal gangs who, unfortunately, the Conservative party has allowed to proliferate and set up a multimillion-pound criminal industry in the channel.
There is also a responsibility on the Government to maintain standards, including security standards. It is not just about what happened before the Home Secretary’s breach; since she was reappointed, a Home Office review has found that she had, in fact, sent Government documents to her personal IT seven times in six weeks, which is quite a rate. There have also been reports that when she was Attorney General she was involved in not one but several leak inquiries, including one involving briefing to a newspaper about a security service case. Notably, that briefing was later quoted in court against the Government and made it harder for them to get the injunction they were seeking. Another case involved the leaking of legal advice on the Northern Ireland protocol and another involved the early leaking of a court judgment.
It has also been reported that both the Cabinet Office and the Cabinet Secretary advised against this appointment. Obviously, this is serious. The Home Secretary is in charge of security and has to show leadership on this issue. She has to be trusted by the intelligence and security agencies, and by senior police officers, not to be careless with information. She has to show that she takes security and standards seriously, because that is what she has to expect of others.
So this is an exceptional situation, which is why we have laid this motion. If the Prime Minister does have confidence in the Home Secretary not to be careless with public safety or with issues around security, he should release the facts. What other security lapses by the Home Secretary was the Prime Minister informed about before he reappointed her? Did he ask whether there had been other lapses in the Home Office or as Attorney General before he reappointed her? What information was he given about the other reported leak inquiries and whether she might have had a role in them? Was he advised against reappointing the Home Secretary on security and standards grounds? If the advice and the information he was given was all fine, tell us, show us. If it was not, start explaining why on earth the security and public safety of our country is put in careless hands.
Gary Sambrook (Birmingham, Northfield) (Con)
Talking about “careless hands” is an appropriate way of starting this intervention, because before 2019 the then Leader of the Opposition, the right hon. Member for Islington North (Jeremy Corbyn), actually cast doubt on our security services by questioning the intelligence on the Salisbury poisoning. Did every Labour MP not try to make him Prime Minister of this country? Is the real threat to our national security not Members on the Labour Benches?
Yvette Cooper
Members will know that, at the time of the Skripal crisis, I disagreed with some of the words used by the right hon. Member for Islington North, and I was very clear about that in this House and about the importance of backing our security services. However, I would say to the hon. Member that I have a lot more concerns about his right hon. Friend the Member for Uxbridge and South Ruislip, who, at the height of the Skripal crisis, chose to go to a place called the Russian Mountain, to a villa in Italy, where he met an ex-KGB agent without his officials. He took a guest, but he did not report who that guest was. He did not report the meeting with the ex-KGB agent to the Department when he returned, nor can he remember whether any Government business was discussed. I suggest to the hon. Member that he should be extremely worried about his right hon. Friend’s careless approach to security and to our national security.
Mr Deputy Speaker (Mr Nigel Evans)
Order. I have allowed a bit of ding-dong there, but please can we now focus on the motion before the House today?
Yvette Cooper
This motion provides for redactions if there are any national security concerns about the content of the information requested, and it provides for unredacted information to be sent to the Intelligence and Security Committee instead, so there can be no security objections to this motion—quite the opposite. If Conservative Members care about credibility and security, they should support the motion now.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
Is it not rather more fundamental than that? If a constituent comes to me with something important and I have to sort out the problem, it is crucial that that remains confidential. If I break that trust, I will be letting my constituent down, and also damaging democracy itself, because we must trust our politicians. Is not that really what is at stake here?
Yvette Cooper
The hon. Member is right that there are standards that have to be followed. When the issues are around important Government business, it is a problem when somebody has breached those standards to the point of effectively being sacked and then is reappointed just six days later. That is what people across the country will not understand.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
I apologise for interrupting my right hon. Friend. She is making an excellent speech. This is an incredibly important debate. Is not the problem that the standards being observed in the Government have just sunk too low? Reappointing somebody six days after such serious security breaches brings into question the level at which the Government think it appropriate to guard our national security. The response of Members on the Conservative Benches today suggests that they do not take it seriously either, and that needs to change urgently.
Yvette Cooper
My hon. Friend is right. There has been a real sense over many years now that the respect for standards in public life from the Government and the Conservative party has been deteriorating and has been undermining standards in our important institutions. The Prime Minister promised us that there would be something different. Instead, what we have is more of the same.
The Cabinet Office has already recognised that the Home Secretary broke sections 2.1 and 2.14 of the ministerial code. There are further serious concerns that she may have broken it a third time and also ignored legal advice that the Home Office was breaking the law. Yesterday morning, her successor and predecessor, now the Secretary of State for Business, Energy and Industrial Strategy, said that he had had clear advice—legal and policy advice—about dangerous overcrowding at Manston, about being in breach of the law, and about the need to take emergency measures, which he then took. We have deep concerns about how the Government could have allowed this situation to develop in the first place, why they badly failed to crack down on the criminal gangs that have proliferated in the channel and why they allowed Home Office decision making to collapse, so that only half the number of decisions are being taken each year compared with six years ago and only 4% of last year’s small boat arrivals had their claims determined, so that there is now a huge backlog of cases that has led to overcrowding and the last-minute use of costly hotels in inappropriate locations.
However, there is also a serious question whether the Home Secretary has just made things worse by ignoring legal advice and allowing dangerous overcrowding, leading to even more last-minute inappropriate procurement and running up substantial legal liabilities when she should have an alternative plan to cut the backlog and cut hotel use instead.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
Plaid Cymru supports this motion. The context here is the reappointment of the Home Secretary, and the appointment of a Minister without Portfolio despite bullying allegations against him—and all that after one Prime Minister was brought down by scandals and another due to ineptitude. Is it not the problem not just those specific individuals, but the fact that the very systems of accountability here in Westminster are fundamentally unfit for purpose, save for maintaining the thinnest pretence of competency from this Tory Government?
Yvette Cooper
The right hon. Lady makes an important point, because the standards in our public life and public institutions have depended on people respecting them and on people across public life believing in them and taking them immensely seriously. That is why it is so corrosive when, bit by bit, they are undermined, and why it is so damaging when a new Prime Minister who promised us he would be so different from his predecessors is simply reinforcing the same problems and the same damaging situation.
Dame Diana Johnson (Kingston upon Hull North) (Lab)
The Home Affairs Committee has just returned from a visit to Manston this morning. We heard that the numbers have reduced from over 4,000 at the end of October to just over 1,200 today. What perplexes the members of the Committee is that we do not understand how the number of people could reach 4,000 in a facility designed for only 1,600. How was that allowed to happen? I am very interested in what my right hon. Friend says about Manston and about getting some answers; we very much hope that the Home Secretary will come to the Home Affairs Committee to give those answers shortly.
Yvette Cooper
My right hon. Friend makes a very important point. I hope the Select Committee will be able to get answers, because if the then Home Secretary, now the Business Secretary, the right hon. Member for Welwyn Hatfield (Grant Shapps), was clear on 20 October that overcrowding was getting worse and that emergency measures were needed to stop the Home Office breaking the law, why on earth did the current, and former, Home Secretary fail to act in her meeting on 19 October, just the day before—a meeting on Manston that she told us about in her resignation letter to my right hon. Friend?
It has been reported that the Home Secretary was warned in the middle of September about the deteriorating circumstances, the fact that things were going to get worse and the high risk of successful legal challenge because the Home Office was breaking the law. She was warned on 1 October and again on 4 October, but she still failed to take the emergency measures that her successor was forced to take. She told the House:
“I have never ignored legal advice.”—[Official Report, 31 October 2022; Vol. 721, c. 639.]
The advice made clear what the law said and how things would get worse unless she acted, so what on earth is her definition of the word “ignored”? The definition I looked up says, “To disregard intentionally”, and that appears to be exactly what she did.
If the Home Secretary wants to claim it was not intentional, but somehow accidental—that she just did not really have a clue what the consequences were of her inaction—I think that makes things worse.
Tom Hunt (Ipswich) (Con)
If my memory serves me correctly, the right hon. Lady brought an urgent question to this place about a year ago opposing the use of Napier army barracks for those who enter this country illegally. She has just said she also opposes costly hotels. Just where would she accommodate those who have entered our country illegally?
Yvette Cooper
Perhaps the hon. Gentleman will recall that what happened at Napier was that the Government ended up with a huge outbreak of more than 200 covid cases, at the height of a covid crisis, because they were failing to follow basic public health rules and requirements. To be honest, it was an incident that the Home Office again does not seem to have learned from, as we have had outbreaks of diphtheria, MRSA and scabies at Manston. Frankly, if the Home Office and the Government want to solve this properly, they need to address the total collapse in decision making, with just 14,000 decisions being made a year, which is half the number being decided just five or six years ago. That huge backlog has increased as a result of Government legislation that has added to the bureaucracy and made those delays much worse.
Dame Meg Hillier
The backlog is a hugely significant issue. Among my heavy case load, I have a surgeon who cannot move hospitals because he cannot get his visa turned around, families who are separated and spouses who cannot live together. That is the real human impact. We are turning our back on good people who want to work and live in this country because they are caught in the backlog as a result of the Home Secretary’s actions.
Mr Deputy Speaker (Mr Nigel Evans)
Just before the shadow Home Secretary responds, I say to Members on both sides of the House that this is quite a specific motion on the papers relating to the Home Secretary. It is not a general debate on the Home Secretary or other Government Ministers, so please be mindful of that in any interventions from either side of the House, so that we can focus on what this motion is about.
Yvette Cooper
The issue is about whether or not the Home Secretary is continuing to breach the ministerial code. We know that on 19 October she had already broken the ministerial code twice, and she may have done so again in a subsequent meeting, also on 19 October. How many times can a Minister break the ministerial code in a single day and still be reappointed six days later?
Andy Slaughter (Hammersmith) (Lab)
My right hon. Friend notes that the Home Secretary says that she did not ignore the law, but she does not say that she followed the law or complied with the law. Yesterday, a Minister appeared to be saying that the Home Secretary chose to break the law in one way, rather than another way, which was to put people out destitute on to the streets of Kent. Is that not almost an admission that there has been lawbreaking in this case?
Yvette Cooper
The important point here is that Ministers have a responsibility for public safety, security and meeting and upholding standards. Part of the reason we are seeking this information and these facts about the decisions that were made is to find out whether any of these issues and concerns that have been raised in the Home Office were raised with the Prime Minister at the time, or whether the way in which the Home Secretary had behaved was raising concerns within the Cabinet Office and with the Cabinet Secretary.
Sir Edward Leigh (Gainsborough) (Con)
On what occasions during the previous Labour Government did the Government release legal advice they were given? In particular, did Tony Blair release the advice given to him on the Iraq war?
Yvette Cooper
The right hon. Gentleman is rewinding 12 years. We have had 12 years with a Conservative Government in place, and we have been very clear that this is about exceptional circumstances. He will know that a similar motion was supported by this House about Members of the other place, similarly in exceptional circumstances. We have also been clear that if there are any security concerns around the advice or information given to the Prime Minister, that should be shared instead with the Intelligence and Security Committee—that is the responsible way to do it.
Rushanara Ali (Bethnal Green and Bow) (Lab)
As someone who spent a few years working as an official in the Home Office, I am all too aware of how important it is to protect our national security. Is it not the case that the Government failing to provide the report to the Intelligence and Security Committee indicates that this Government are not serious about national security?
Yvette Cooper
That is the problem. We have these reports in the papers and the allegations that have been made, and we must bear in mind that this is not simply about the security lapses that the Home Secretary herself has recognised and admitted to; it is also about reports of further leak investigations during her time as Attorney General. We are simply asking for factual information about whether or not these were raised as concerns and whether or not this was an issue of concern for the Cabinet Office and the Cabinet Secretary when the Prime Minister made his reappointment decision.
This goes to a wider problem about the way in which the Prime Minister appears to have been taking his decisions. The Government have confirmed that the Prime Minister knew about the complaint from the former Chief Whip, the right hon. Member for Aldridge-Brownhills (Wendy Morton), against the Cabinet Office Minister, the Minister without Portfolio, the right hon. Member for South Staffordshire (Sir Gavin Williamson), which also involves very serious allegations, including about the use of language. We should remember, too, that that Cabinet Office Minister was previously sacked from the Government by the right hon. Member for Maidenhead (Mrs May) for leaking information from the National Security Council. He has now been reappointed to the Cabinet Office—the very office that is responsible for supporting the National Security Council and leading on cyber-security. This matters—maintaining standards, maintaining the ministerial code and showing leadership on security matters.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
Is not the reason that we have to ask for these papers to be laid before the House and put in the public domain that, time and again, those on the Government Benches have shown that they lack any judgment on national security, probity and integrity? They had a Prime Minister who had to resign in scandal, and there have been numerous scandals and leaks and a dangerous lack of regard for national security. In normal times, the Prime Minister would be able to see these documents, and they would not need to be presented to the House because this would have been dealt with, but these are not normal times, because the Conservative party has shown that it does not regard national security in the same way that we do.
Yvette Cooper
My hon. Friend makes a really important point: national security matters for all of us. This is a time when the national security threats that our country faces have changed. We face new threats from hostile states who wish to do our democracy harm. We face cyber threats from those who want to undermine our national interest. Cabinet Ministers are the custodians of that national interest, and we need all of them to take that seriously and not be careless about the risks that we face and the impact of a lack of leadership on these kinds of issue.
Sadly, the reality is that we have had a series of Conservative Prime Ministers who have not taken these issues seriously. The right hon. Member for Uxbridge and South Ruislip (Boris Johnson), at the height of the Skripal crisis, as I said earlier, wandered off to a Russian villa in Italy, met an ex-KGB agent, took an unknown guest, did not report it to officials and still cannot remember whether Government business was discussed. The right hon. Member for South West Norfolk (Elizabeth Truss) was accused of using her private phone for sensitive Government business, and the right hon. Member for Richmond (Yorks) (Rishi Sunak) has defended them all, reappointing as his Home Secretary someone his own Back Benchers refer to as “leaky”.
If this is all nonsense, then Government Members should support the motion and show us that there is not a problem—show us that the Prime Minister does take this incredibly seriously, has asked the right questions and has got the right reassurances. He has only been in post two weeks, and already we have this chaos. He said he wants to stand up for integrity, so enforce the ministerial code. He said he wants professionalism, so appoint people who can do the job. He said he wants accountability, so support this motion and show some accountability to the House.
The Minister for the Cabinet Office and Paymaster General (Jeremy Quin)
It is, as ever, a pleasure to reply to the shadow Home Secretary, the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper). I was pleased to hear from the Chairwoman of the Home Affairs Committee, the right hon. Member for Kingston upon Hull North (Dame Diana Johnson), that her Committee visited Manston today and saw, I assume, at first hand the improvements there. What a pity we are not discussing that today. What a pity we are not discussing the many pressing issues on matters of home affairs. What a pity that the right hon. Member for Normanton, Pontefract and Castleford did not choose to talk about policing and the matters that affect the people on the streets of this country. I know how disappointed my hon. and right hon. Friends in the Home Office will be that they have not had the opportunity to cross swords with her this afternoon. Instead, she has chosen to debate this motion—a motion for return. She ranged far and wide, touching on rumour and speculation but rarely on the specifics of the motion, and I was grateful, Mr. Deputy Speaker, for your guidance.
However, I am pleased with the debate. In the intervention of my right hon. Friend the Member for Gainsborough (Sir Edward Leigh), we heard that, somehow, a self-confessed error of judgment relating to an email not on an issue of national security represents exceptional circumstances, in the view of the right hon. Member for Normanton, Pontefract and Castleford, but that, in the last Government, the fact that this country was going to war did not represent exceptional circumstances, according to the right hon. Lady.
I would like to bring the debate back to the motion before the House. In her letter to the Home Affairs Committee on 31 October, the Home Secretary set out in considerable detail the circumstances and sequence of events that led to her resignation. She explained that she made “an error of judgment”. She recognised her mistake and took accountability for her actions. Her letter noted that the draft written ministerial statement
“did not contain any information relating to national security”.
As I set out to the House in response to the urgent question tabled by the right hon. Member for Normanton, Pontefract and Castleford, the ministerial code allows for a range of sanctions in the event that a breach has occurred. In the light of the breach, the Home Secretary stepped down and her resignation was accepted by the then Prime Minister. The appointment of Ministers is a matter for the Prime Minister, in line with his role as the sovereign’s principal adviser. On appointing the Home Secretary to the Government, he received assurances from her. He was clear that she had recognised her error and had accepted the consequences. He considered that the matter was closed. He was pleased to be able to bring the Home Secretary, with her undoubted drive and commitment, back into Government and to be working with her to make our streets safer and to control our borders —matters that could have been discussed this afternoon.
I understand the desire to see inside the process of ministerial appointments and to make public discussions that may form part of any appointment. However, there are compelling and common-sense reasons why that desire should be resisted.
Alex Cunningham (Stockton North) (Lab)
Many a person who has gone through our court system will get 12 months’ probation. Why is six days good enough for the Home Secretary?
Jeremy Quin
I do not know the cases to which the hon. Gentleman refers. Every case must be looked at on a case-by-case basis. What we are dealing with here is a circumstance in which a breach of the ministerial code happened. The Home Secretary accepted that. She acknowledged her error; it will not happen again. The Prime Minister had to take a judgment on that basis, and he did.
Dame Meg Hillier
Once again, the Government have put out the man who defends anything, however bad it is, to speak for them. This is not just a matter of a security leak; it is a fundamental matter of the judgment of the woman who is responsible for our national security—the Minister cannot just brush it under the carpet as a six-day matter. The Home Secretary’s judgment is at stake, and there is no evidence that that judgment is any better today than it was when she made these leaks.
Jeremy Quin
The Home Secretary does not deny that it was an error of judgment; she made that absolutely clear in her letter to the right hon. Member for Kingston upon Hull North, the Chairman of the Select Committee. It was an error of judgment; she recognised that error of judgment, she apologised for it and it will not be repeated.
However, coming back to the motion for return, it is critical to the functioning of government that conversations that occur around appointments are able to take place in confidence. There is therefore a long-standing practice, implemented by Governments of all political persuasions, of protecting that confidentiality. Without the ability to speak freely ahead of an appointment on matters that will be personal, that can be sensitive and that can even relate to personal security, the ability for meaningful advice to be delivered would be massively undermined. Individuals being considered for appointment need to know that they can speak freely and without reservation to the Prime Minister and officials, and if necessary share concerns, without the prospect of confidential information being placed into the public domain.
I wish to reassure hon. Members that appointments in Government are of course subject to advice on matters of propriety. In the formation of this Government, the usual reshuffle procedures were followed, as is appropriate, but the Government firmly and resolutely believe that any information relating to those procedures is not appropriate for publication, either now or in the future.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
After the recent chaos and crashing of the economy, I was most heartened when I heard the Prime Minister declaring to the country that he would be conducting proceedings with integrity and professionalism. Yet the day after, he appointed as his Home Secretary somebody who had to be removed from Government just six days earlier for having breached the ministerial code, and now he has included in his Cabinet somebody who was sacked from office for leaking information from the National Security Council. So much for national security and acting with integrity and in the national interest. Does the Minister agree that the British public will simply conclude that it is the same old Tories, making the same old grubby deals to desperately cling on to power?
Jeremy Quin
The hon. Gentleman’s intervention started so well. Like him, I greatly appreciated the words of the Prime Minister on the steps of Downing Street. He set out clearly what his Administration would stand for, and he was right to do so. He made it absolutely clear that Ministers in his Administration will have to adhere to the ministerial code. That is what is expected of us all.
I also believe there is a role for redemption. The Home Secretary made it clear that she had made an error, she apologised for that error, and she gave assurances to the Prime Minister, who is at liberty in forming his Administration to take a view and to decide to give someone a second chance. It is his right and his ability as Prime Minister to take those decisions.
Yvette Cooper
The Minister is very kind in giving way. He will know that it has been reported in the papers that the Home Secretary, when she was Attorney General, was interviewed as part of several leak inquiries. Has the Minister seen the conclusions of those leak inquiries, and did the Prime Minister see the conclusions of those leak inquiries before he made the appointment decision?
Jeremy Quin
The right hon. Lady turns to leak investigations, to which I was also about to turn my remarks. As she knows, it has been the policy of successive Governments not to comment on the specific details of leak investigations, to protect the sensitive techniques and procedures involved. What I can say is that all Ministers and the officials and advisers who support them most closely have, on occasion, access to large amounts of sensitive Government information. Regrettably, at times, some of this information is leaked. When this happens and inquiries are launched, all individuals in Government who had access to the information would fall within the scope of such an inquiry. That does not mean that they are guilty or necessarily personally even under investigation; it means simply that they had access to the information in question.
The Home Secretary has given a full account of, and has taken responsibility for, the events that led up to her resignation. The Prime Minister is satisfied with that account and considers the matter closed. We believe that the proposal in this motion is inappropriate and would set a deeply injurious precedent for important procedures, not only now but long into the future. I know that the right hon. Lady is upset that Home Office Ministers are not in the Chamber to debate with her this afternoon, but she could have chosen this evening to debate the Labour approach to stopping small boat crossings, which I am sure would have been enlightening for us all. She could have chosen to debate the fact that this Government have recruited over 15,300 extra police. Labour Members could have probed the campaign that has closed 2,400 county lines, with over 8,000 related arrests. Instead, they are concentrating not on home affairs but on a fishing expedition. I trust the House will reject the attempt.
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
I think nobody in this Chamber will be surprised to hear me say that I think there are a million reasons why the Home Secretary should be nowhere near the office that she currently holds—whether it is her atrocious rhetoric about Rwanda, her desperate smears about a “Benefits Street” culture, her trashing of the Attorney General’s office or the fact that, as far as I can tell, she still thinks that the infamous mini-Budget was brilliant and worth sticking to.
This morning, I joined colleagues from different Committees to visit Manston. I hate to report to the Minister that we did not notice an improvement there; rather, we noticed a significant deterioration, not because of the hard work of the staff there, but because of the overcrowding. As the shadow Home Secretary said, it is fair to say that the Home Secretary has significant questions to answer as to why Manston was allowed to move from being a strict 24-hour short-term facility to a place where families are having to spend days and weeks living on mattresses on the floor, not because of, but despite the efforts of staff, who have been placed in an impossible position by the Home Secretary.
This afternoon, the Labour Opposition have raised security concerns, and of course they are perfectly entitled to do so. Indeed, it is something of an open goal given not only the Home Secretary’s own words, but those of many of her former and current colleagues—none of whom is here today, it has to be said—who have expressed doubts about whether they could accept what the Home Secretary says, publicly questioned a serious breach of security, and suggested that multiple breaches of the ministerial code occurred. In her words:
“Pretending we haven’t made mistakes, carrying on as if everyone can’t see that we have made them, and hoping that things will magically come right is not serious politics.”
But that seems to be a very good description of precisely what she is trying to do now, hoping that people do not fully understand what happened or that they forget.
In fact, the only objectionable thing about those words is her characterising what happened as a mistake—and the Minister veered towards that description today as well—but she did not resign because of a mistake. Her own resignation letter confirms that she resigned because she quite intentionally used her personal email to share a sensitive Government document with someone outside Government. She knowingly and deliberately broke the rules, and she was therefore right to resign.
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
On 20 October, I raised with the Minister whether the Home Secretary had shared documents not just by email, but on WhatsApp, Signal or Telegram. Does the hon. Member agree with me that the Home Secretary’s letter to the Home Affairs Committee only talks about email, but there has been no certainty over whether any document—confidential, secret or otherwise —might have been shared on other social media messaging apps?
Stuart C. McDonald
The hon. Member raises a very fair point. There are all sorts of things missing from the Home Secretary’s letters—both her resignation letter and her letter to the Chair of the Home Affairs Committee—which raises all sorts of questions, some of which I will come to.
The fact is that the Home Secretary took an incredibly blasé attitude to sensitive information. When the incident that prompted her resignation happened, unlike everybody else involved, she just carried on as if nothing of note had occurred. Her resignation letter downplayed the incident as “technical” and did not in fact present the full picture, as we have just heard.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
My hon. Friend is telling it like it is. When I asked both the Home Secretary and the Minister responsible for national security if they would countenance an employee—a civil servant—being re-employed after such a breach, neither of them would answer the question. Is it not the case that they would not accept that in any circumstance, and it is just a disgrace that she maintains her position as Home Secretary?
Stuart C. McDonald
My hon. Friend makes an absolutely valid point, in that we are holding staff to a much higher standard than the standard to which the Home Secretary appears to want to hold herself.
The other point I want to make is the contrast between how others responded on the day of these events and how the Home Secretary responded. When the staffer who was the accidental recipient of the draft ministerial statement picked up the email, he or she understood that it was an important matter. That staffer flagged the issue both directly to the Home Secretary and to his or her boss. In contrast, the Home Secretary just asked them to delete it and carried on with routine meetings, alerting absolutely nobody.
When the Home Secretary’s colleague who employs that staff member saw what had been sent and how it had been sent, he too understood the significance. He emailed the Home Secretary directly to express concern about security and the ministerial code, and he made clear her response so far had been unacceptable given
“what appears, on the face of it, to be a potentially serious breach of security.”
He was concerned enough to consider a point of order in this very Chamber, and he approached the Government Chief Whip, yet while he was taking all these very significant steps, in contrast the Home Secretary had wandered off to Westminster Hall to meet a couple of constituents, still having alerted nobody.
When the Chief Whip heard what had happened, she understood the significance. She WhatsApped the Home Secretary and then, along with her colleague, seems to have gone to track the Home Secretary down. More than that, the Chief Whip notified the Prime Minister’s private office. In contrast, the Home Secretary failed to notify anybody, until of course it had been taken out of her hands. Only on being confronted did the Home Secretary do anything about it, and she went off to speak to her special adviser.
None of these events supports the Home Secretary’s claim of a rapid report to official channels. As one of her own colleagues expressed it, the evidence was put to her and she had to accept the evidence, rather than the other way round. Her sluggish response has only two explanations: either she was simply hoping to get away with her breach, head in the sand, or she totally failed to understand the significance of it. Perhaps it was both: she thought she could get away with it precisely because she thought it did not really matter. Indeed, I have heard almost nothing since to suggest that, if she had not been caught, she would not still be operating in precisely the same way today.
Not only did the Home Secretary’s actions at the time show little regard for the seriousness of treating sensitive information in that way—so did her subsequent attempts at an explanation. Her resignation letter totally failed to mention that a sensitive Government document had been sent to an accidental recipient, referring instead only to the “trusted colleague” she sent it to. She claimed in that letter to have reported the breach “rapidly” on official channels, when in reality she carried on as if nothing had happened until she was caught. She talked of a “technical infringement” and she has since been at pains to point out that this was not top secret information. However, at paragraph 28 of her letter to the Committee Chair, she acknowledges that “of course” a draft ministerial statement is sensitive. Indeed, it was so sensitive that she could not append it to the letter to the Home Affairs Committee Chair. What is more, it could not even be shared with the Chair, except on a confidential basis. Yet she was happy to batter that off from her Gmail account to a trusted colleague with a quick, “What do you think?” Extraordinary complacency.
To emphasise the point, next week, we will almost certainly pass legislation promoted by the Home Office that would see some people leaking protected information like that imprisoned for life, depending on the reasons they were doing it. I am not remotely suggesting that what the Home Secretary did is remotely comparable to the offences we will be passing in relation to the National Security Bill, but the fact that her own Department wants to protect that information from foreign state actors, with sentences of up to life imprisonment, puts quite a perspective on it. As has been pointed out, that is a double standard when compared with how other people would be treated in similar circumstances.
There are still many questions to be answered. In her letter to the Committee Chair, the Home Secretary said that the document was emailed to her Gmail account simply because No. 10’s proposed edits had come in “too late” to print them off. So why not just email it to her Government account? The letter also says there was no market sensitive data in the leaked document. Why then did No. 10 apparently repeatedly brief that there was?
The letter to the Committee Chair also reveals that a Home Office inquiry found six further uses of personal IT to look at sensitive Government documents. Despite efforts to downplay it, that is more than once a week. Is the Home Secretary really arguing that neither she nor the Home Office could come up with a better way to allow her to view documents while taking part in online meetings? As she notes in her letter to the Chair:
“The Guidance on ‘Security of Government Business’ makes it clear that you should not use your personal IT…for Government business at any classification; and the Government’s stated position is that Government systems should, as far as reasonably possible, be used for the conduct of HMG business.”
She knew all that, yet she deliberately and repeatedly sent those documents in breach of those rules. More importantly, how often did this happen in previous roles? The inquiry we have heard about clearly relates only to Home Office documents and her time at the Home Office alone. Are we really to believe this was the first time she had shared sensitive information with her “trusted colleague”?
Alan Brown (Kilmarnock and Loudoun) (SNP)
My hon. Friend is right to highlight the absurd excuse from the Home Secretary. Is not it the case that she could use an iPad for a phone call and a Government-issued phone to view documents? She clearly has access to more than one parliamentary device, so to say that she had to use her personal device is ridiculous.
Stuart C. McDonald
A whole host of arrangements could have been made that would have been far preferable to what the Home Secretary did, and it is extraordinary that she thought that was something she could do week in, week out.
The shadow Home Secretary highlighted other reports of investigations: first, an apparent probe into whether the current Home Secretary, while Attorney General, leaked sensitive details about the Northern Ireland protocol; secondly, a probe by the Government security group at the Cabinet Office into leaks about the Government’s plan to seek an injunction against the BBC in relation to reports of a spy accused of abusing his position to mistreat a former partner. Apparently, that leak caused MI5 “concern”. According to another report, the Home Secretary has been subject to three official Cabinet leak inquiries this year alone.
I appreciate that, ultimately, no conclusive evidence was found in these cases, but it is fair for us to ask whether these events and inquiries formed part of the Prime Minister’s deliberations before the Home Secretary’s reappointment. Did he seek advice from agencies? What precisely was the view of the Cabinet Secretary? Is it correct that he advised against her reappointment? All those are absolutely legitimate questions that the motion would help us find answers to.
The ultimate question, though, is about the Prime Minister’s judgment. Given all these issues and concerns, the outstanding questions and the resignation just one week before, how on earth could he think it sensible and appropriate to reappoint the Home Secretary to such an important role in charge of national security? No doubt the Prime Minister thought it in his interests to appoint her—we all know why that was—but it does not seem that he weighed up the UK’s security interests in coming to that decision. It was, in the Home Secretary’s words, “right” for her “to go”. It is not right that she is back in the same post, and so quickly. In fact, it is ludicrous and everyone knows it. That, in a nutshell, is why we need to support the motion.
Angela Richardson (Guildford) (Con)
Thank you, Mr Deputy Speaker, for calling me so early in the debate. When it comes to standards in public life and adhering to the ministerial code, my constituents are very quick to let me know if they think that something is not right, and my record on issues that have happened in the last couple of years shows that I would be the first in line to make a statement on that. I have had nine emails in my inbox on this issue—not the hundreds that I would normally expect to receive—and some of them are supportive of the Home Secretary. The Opposition are allowed to have a number of Opposition day debates. I am disappointed that they have not used this one for something that really matters to my constituents.
What really does matter to my constituents in terms of what the Home Secretary is trying to tackle is the small boat crossings, which we talked about yesterday in the Chamber. They want to see that dealt with so that those who need our help and support can have it and we have the capacity to offer safe and legal routes. My constituents want the Home Office to ensure that asylum claims are processed fairly and efficiently and that we can stop the criminal gangs taking advantage of vulnerable people with those unsafe boat crossings.
Today and this week, on the M25 not far from my constituency, Just Stop Oil protesters have been climbing gantries. My constituents are concerned about having their journeys disrupted as they go about their business. They want the Home Secretary to be providing our police with the powers they need to ensure that the protesters who have chosen to sit on motorway gantries can be removed swiftly and the roads reopened.
My constituents care about antisocial behaviour. I know of the widespread distress of individuals who have been affected by antisocial behaviour in neighbourhoods in my constituency. I welcome the addition of 155 new police officers in Surrey, which will help to combat crime and make our community safer. They are visible. A young girl had someone expose themselves to her on a local bus. She sat at a bus stop in distress and tears. Two female police officers saw her, pulled over and helped and supported her. We are improving policing and I am seeing the results in my community.
My constituents care about violence against women and girls being tackled and want our Home Secretary to get on and deliver the strategy to tackle that. They welcome the safer streets fund and the safety of women at night fund. I also welcome that almost £1 million of funding has been provided by the Home Office to Surrey police as part of the what works fund to provide a package of support for—
Mr Deputy Speaker (Mr Nigel Evans)
Order. I have given a bit of latitude, but speeches should be about the motion before us. This is not a general debate on home affairs.
Angela Richardson
Thank you, Mr Deputy Speaker. As a result, speeches will be short. It is not appropriate for the Government to publish information relating to confidential advice, which is sought by the Opposition’s motion. Were they fortunate enough to be in government, that advice would need to be given to them. They are asking us to publish these papers. They have to accept that we would ask the same of them if we were in opposition. On that note, I will not support the motion.
Ms Marie Rimmer (St Helens South and Whiston) (Lab)
I want to begin by congratulating the Home Secretary on doing the right thing by resigning just three weeks ago. The holder of that great office of state is responsible for Great Britain’s national security and oversight of all security services. After the first breach that Parliament and the public became aware of, the Home Secretary considered the impact on our country of that major breach and resigned. How did the Prime Minister satisfy himself that it was unlikely to happen again? He reappointed her and now there are six allegations of full breaches of security that we know of. How much more do we not know? Do the Prime Minister, the Home Secretary and Cabinet members expect Ukraine, the United States and the European Union to trust Great Britain with their security?
On his appointment, the Prime Minister promised that
“This Government will have integrity, professionalism and accountability at every level.”
What is worrying is that, just six days later, he reappointed the Home Secretary with full knowledge of the first security breach. It now turns out that the Home Secretary is alleged to have committed at least six full breaches, yet how come he trusts the Home Secretary with our national security? Does he really expect and believe that Parliament and the public will forget a breach of national security and trust this Government?
The reality is that the Home Office does not have the time to be part of a psychodrama. We all saw over summer how much chaos the passport backlog caused. We have seen the events at Manston caused by the lack of processing of applications. Thousands of asylum seekers are living in inhumane conditions, with children imprisoned for months, and now there are radicals throwing firebombs at them. We all know how intricate security and confidence must be maintained so the security services can keep this country and its people safe.
The Prime Minister needs to start putting the country before party. The deal with the Home Secretary to help him become Prime Minister is not worth compromising our national security. Is it true that the Prime Minister is now coercing other Ministers to do the media rounds and defend the indefensible? This is not a one-off. The Prime Minister also decided to reappoint the right hon. Member for South Staffordshire (Sir Gavin Williamson), a former Defence Secretary, to the Cabinet—a Defence Secretary who was sacked by a previous Prime Minister for leaking information from a top-level National Security Council meeting. As a Minister of State in the Cabinet Office, he will now be responsible for our national cyber-security. I wonder what the Prime Minister found so appealing about a man who has helped to run two successful Conservative leadership elections.
For all the talk of trust and getting back on track, the Prime Minister has put himself and his party above our country. This House and the country need to know what information the Prime Minister had before reappointing the Home Secretary. Did he know of all the security breaches? Could he come clean? Was there any consideration or risk assessment prior to the reappointment of the Home Secretary, who looks after our national security and has oversight of all security services? Was there any risk of breach of confidential material? Yes. Was the risk identified? Yes. The Home Secretary herself identified it and resigned. She recognised that she was not up to the job and that there was a risk of it happening again.
How did the Prime Minister satisfy himself that it was unlikely to happen again? He reappointed the Home Secretary, and now there are six allegations of full breaches. How much more do we not know? Do the Prime Minister, the Home Secretary and Cabinet Ministers expect Ukraine, the United States and the European Union to trust Great Britain with their security? They should be able to expect that.
Our country is entitled to have a Government with a Prime Minister, a Home Secretary and Cabinet Ministers who put the country first. Integrity, professionalism and accountability need to be far more than words and more than a newspaper headline. It is time to clean up our country and this Government.
Tom Hunt (Ipswich) (Con)
You caught me slightly off-guard, Mr Deputy Speaker—I do not think that I have ever been called so early. It was quite dramatic, but one will have to do what one can. Bearing in mind that I have spoken quite fluently on many of these issues recently, it should not be too much of a challenge.
I note that I did not have an answer to my question, when I made an intervention on the shadow Home Secretary, about quite where these individuals should be based. She has opposed former Army barracks being used. She has opposed costly hotels being used. We do not know what the answer is.
I have slightly lost track—I do not know whether the approach of the Opposition is to go through every single mechanism for debating the same issue over and over again— but I think we have had an urgent question; maybe we have had a statement and had it raised at Prime Minister’s questions; and now we are having an Opposition day debate. It seems ever so slightly extraordinary. I note that my hon. Friend the Member for Guildford (Angela Richardson) has had nine emails on it. Perhaps we should not use our phones in here but sometimes we do to communicate with our staff on important matters, so I did say to my team, “How many emails have we received?” The answer was, actually, zero, so we will have to confirm that that is the case. But what I have had emails about is the small boats crisis. What I have had emails about is the use of a hotel in the town centre in Ipswich by 200 of these individuals and the impact that that could have on the local area. That is what they have raised. That is what they would much rather we discussed in this Opposition day debate.
Forgive me, Mr Deputy Speaker, but perhaps we are ever so slightly at risk of certain colleagues on the Government side of the House occasionally straying into topics that are slightly beyond the strict remit of this debate. But that is because it is incredibly difficult to debate something that we have already debated about eight times. What is there to say about it? Ultimately, it is difficult, when we are dealing with what is quite clearly a highly personalised political campaign against the Home Secretary, not to talk about the wider issues.
Why is it that those on the Opposition Benches dislike the Home Secretary so much? Actually, I took part in an interesting debate yesterday with a Labour shadow Minister who said that the reason why the Home Secretary was in place was that there was some sort of shabby deal with the extreme far right. I thought that it was interesting that the mask slipped there, because the Home Secretary’s views on immigration are actually, I think, shared by tens of millions of people up and down the country. The fact that there are shadow Front-Bench Members who think that many of their constituents’ views are actually the views of the far right is shocking. That tells us everything that we need to know about the Labour party’s approach to immigration—where there is an approach. It suits the Labour party to talk to death this issue about emails, because it has absolutely nothing to say when it comes to tackling the small boats crisis. Labour Members do not know where they would accommodate the individuals in question. They talk vaguely about speeding up the process for dealing with the applications, because we know what their approach to speeding up the applications would be: to grant everyone immediate refugee status, whether they are or not. So admittedly, there would be no queue, but we would also have huge numbers of people staying here indefinitely who quite probably are not refugees. I do not think that is the appropriate approach.
You have allowed me to discuss some of these issues, Mr Deputy Speaker, and I think that is necessary, because we are dealing with a highly personalised campaign against a Home Secretary who Labour Members do not like because they do not like her views. But the news is that those views—a belief in controlling our borders, a belief in controlled immigration, and a belief in distinguishing between genuine refugees and those who illegally, by choice, enter our country from another safe European country—are shared by, I believe, the majority of the country.
My political advice to the Labour party is that its current approach of ignoring the debate is not sustainable in the long term. We would like to know what its approach is. What we do know is that it opposed the Nationality and Borders Act 2022 and opposed the Rwanda scheme, but I assume we will be back here soon discussing the same issue about emails.
I think I have concluded what I have to say—[Hon. Members: “Hear, hear!”]—much to the enjoyment of the Opposition. In my Westminster Hall debate earlier today, I spoke at length about my concerns about the Novotel situation in Ipswich. I have also made lots of interventions in statements from the Home Secretary in which I have made my support for her clear.
Ultimately, I take issue with the fact that so much parliamentary time is being spent on doing this issue to death. I have received no emails about it. What my constituents are concerned about is illegal immigration and how we tackle it. If we had spent these two or three hours talking in depth about how we can put rocket boosters under the Rwanda scheme, that would have been much more appropriate.
Mr Deputy Speaker (Mr Nigel Evans)
I do sympathise with hon. Members, but it is quite a narrow motion. I am really pleased that I am sitting in the Chair and not on either side of the House.
Mrs Paulette Hamilton (Birmingham, Erdington) (Lab)
The Prime Minister faces serious questions about security concerns relating to the appointment of his Cabinet Ministers. The Home Secretary resigned only 20 days ago, saying:
“Pretending we haven’t made mistakes, carrying on as if everyone can’t see that we have...is not serious politics. I have made a mistake; I accept responsibility; I resign.”
In a letter to the Select Committee on Home Affairs, she then admitted to six separate breaches of security—one for every week she was in post. The Prime Minister’s decision to reappoint her as Home Secretary six days after she broke the ministerial code, and to appoint the right hon. Member for South Staffordshire (Sir Gavin Williamson) as a Minister after he was sacked for leaking sensitive information, was irresponsible and reckless. Once again, it showed the Tories putting party before country.
We need to know whether the Prime Minister even considered questions of security or the ministerial code when he made his Cabinet appointments. That is why Labour is calling on the Government to publish the papers relating to those decisions. Labour has called this debate because our constituents deserve to know what the Prime Minister was advised, whether he knew about security lapses at the Home Office, and whether the Home Secretary was involved in other leaks when she was Attorney General.
We all watched with horror as recent events unfolded at Manston asylum centre. It is disturbing that even though reports say that the Home Secretary was repeatedly warned, yet again she did not act quickly enough to make sure that vulnerable people were being held safely. In fact, on her watch the Home Office dumped some of those vulnerable people on the streets of London in the middle of the night.
The Prime Minister and his Cabinet have overseen constant chaos since he was imposed on us, but the Government are unable to be straight with us about whether their own Ministers are fit for the job. At a time when the public desperately need reassurance, the Prime Minister’s actions have done absolutely nothing to reassure my constituents.
Simon Baynes (Clwyd South) (Con)
The Home Secretary made an error of judgment, recognised her mistakes, and took accountability for her actions. Now we need to get on with tackling the significant challenges facing our country in general and my constituency in particular. The Home Secretary is entirely focused on delivering on the people’s priorities, and that includes taking further action to stem the number of people arriving here illegally in small boats, getting more police on our streets, and cracking down on crime.
Taking account of your admonishments, Mr Deputy Speaker, I will now focus on the issue at hand. Let me say first that it is not appropriate for Government to publish information relating to confidential advice. Breaching the confidentiality of advice regarding appointments will weaken the advice given to future Prime Ministers. Such advice can include sensitive information which may include matters of national security, and publishing it would set a precedent that would reduce the ability of future Prime Ministers to seek meaningful advice.
Our national security has always been protected. The documents in question did not contain any information relating to national security, the intelligence services, cyber-security or law enforcement. The data concerned was already in the public domain. The Home Secretary clarified that in her letter to the Chair of the Home Affairs Committee, in which she wrote:
“It did not contain any market-sensitive data as all the data contained in the document was already in the public domain.”
Ruth Cadbury (Brentford and Isleworth) (Lab)
Does that mean that it is okay, if the material shared was not a matter of public security and was not secret or anything? Surely the code of practice for Ministers applies to everything. We cannot pick and choose between what is and what is not sensitive information. It is the behaviour that matters, not particular content.
Simon Baynes
I would like to make a general point here. When I look to the Opposition Benches, I see many people who have had problems—I will not go into the details—and I think that, as a centre of democracy, we should try to focus positively on the important issues that face our country rather than always denigrating anyone in a position of authority, which seems increasingly to be the only way in which the Labour party is prepared to conduct politics.
We are delivering on the people’s priorities, including cracking down on illegal migration by co-operating with the French authorities to dismantle international people-smuggling gangs and stopping more than 29,000 illegal crossings since the start of the year—twice as many as last year. We have passed our Nationality and Borders Act 2022, introducing new and tougher criminal offences and deterring illegal entry to the UK, and we have given Border Force additional powers, ensuring that our authorities are fully equipped to prevent illegal entry to the UK. We are putting more police on our streets and cracking down on crime by recruiting more than 15,300 additional police officers since 2019, including 145 new officers in north Wales, making our communities safer; and we have passed our Police, Crime, Sentencing and Courts Act 2022, strengthening police powers. By contrast, the Opposition’s cupboard is bare of policies to deal with illegal migration. There is plenty of talk, but very little in terms of specific policies. I therefore strongly support the Home Secretary’s policies to combat illegal migration and crime and make our country a safer place for us all.
Richard Foord (Tiverton and Honiton) (LD)
On 5 April 1982, three days after the invasion of the Falkland Islands, the then Foreign Secretary, Lord Carrington, resigned. He took full responsibility for a failure by the Foreign Office. The Foreign Office had not signalled in advance of the Argentine invasion that the UK would stand resolutely by the people of the Falkland Islands. The Franks inquiry, in the following months, had access to some of the relevant papers. We later learned that the Prime Minister, Margaret Thatcher, had asked Lord Carrington to stay on, but Carrington had decided to do the decent thing. He resigned.
Just imagine what would have happened if Lord Carrington had returned to office six days after his resignation. The Government would have barely had time to work out where South Georgia was, never mind give orders for its recapture—yet a Cabinet Minister’s return to office six days later is the situation that we see in this Government in 2022. This was just six days after she, by her own admission, deliberately emailed sensitive documents to a friend on the Back Benches without clearance. Since then, we have also heard about six further data breaches. What do they relate to? We do not know, so sensitive are they.
Lord Carrington understood a phrase that I was reminded of by a constituent from Axminster recently: noblesse oblige. One must act in a fashion that conforms to the position and privileges that have been bestowed upon one. This Government cannot seem to recognise that with privilege comes responsibility. We are in this place to act on behalf of our constituents and the country, not our own vested self-interest or party political interests. This exposes something about the Prime Minister. In spite of a myth crafted by a slick PR campaign, he is just as complicit as Conservative Prime Ministers before him.
It is clear that the Government have learned little from the past two years, including the by-election in Tiverton and Honiton this summer. Voters overwhelmingly said that they had had enough of sleaze and cover-up, yet to coin a phrase from one former Prime Minister, nothing has changed. This Home Secretary readily uses inflammatory language to exacerbate anxiety about inward migration. There is a real issue relating to inward migration that has developed while the Home Secretary has been in government, but instead of whipping up fear by speaking of an “invasion”, she should learn from Lord Carrington who, when faced with a real invasion—that of the Falkland Islands—did the right thing and resigned. So, too, should she.
Chris Clarkson (Heywood and Middleton) (Con)
It is a pleasure to follow the hon. Member for Tiverton and Honiton (Richard Foord). I was not planning to speak at length, because this all has an air of déjà vu about it, and apparently that is also true for official Opposition Members because there are so few of them here. I mean, this is an Opposition day motion and we are outnumbering them here by two to one. They are fed up with hearing about this too. It is not as if this topic has not been hashed and rehashed ad nauseam, but I suspect that Labour Members will continue to bang this particular drum for a while because, let’s face it, they have absolutely nothing else to talk about.
The right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper) has taken on the demeanour of the witchfinder pursuivant lately: “I saw Goody Braverman talking to the ERG in the Aye Lobby—she must be hanged!” It is not like we are looking at the second coming of the Blair era here. We are not faced with bright, intelligent people bringing alternatives to this country; it is just more carping. They are a tired, lazy Opposition. I was going to call them beige but I think they are more of a Farrow and Ball crowd. I had a look through the range and the closest colour to beige I could find was called smoked trout, which I think is quite apt.
Mr Deputy Speaker, with your indulgence I am going to get to the motion via a slightly circuitous route. I am headed there and I am developing my argument en route. I think Labour Members might want to reflect on why they lost supposedly safe seats at the last general election, including mine in Heywood and Middleton. I know it is very easy to blame Brexit and that is of course their go-to: it must have been Brexit because everything was fantastic and they had such a good manifesto and everyone agreed with it; that is why people did not vote for them. We saw the first signs of that in 2017. There is a clear values dissonance between the Opposition’s increasingly metropolitan and louche outlook and what used to be their core vote.
When I knock on a door in my constituency I can guarantee that if I mention the Home Secretary, the first words out of someone’s mouth will not be, “Well, there was a data breach.” The first words out of their mouth will be “small boats”. Of course we are not talking about small boats today, but people want to know what we are doing to stop that influx of illegal migration. They want to make sure that our rightly generous and welcoming asylum system is not being abused by people coming here to take the mick. The fact that Labour Members care about what we are talking about today more than that issue should be extremely telling for the people who voted Conservative for the first time at the last election. My constituents want more coppers on the street and fewer boats in the channel, and I think we have the team in place to do that.
Turning to the motion, I would love to say that I was surprised by it, but yet again we have sixth-form politics. The official Opposition are asking to breach the confidentiality of advice regarding appointments. Officials should be able to rely on the advice that they give being done in a private and confidential way. Setting a precedent that their advice could be published as a matter of course would inevitably weaken the quality of the advice that they give to Prime Ministers of all parties.
We already know quite a lot of the salient details that the Opposition are asking for in this motion. The Home Secretary’s letter to the Chair of the Home Affairs Committee—the right hon. Member for Kingston upon Hull North (Dame Diana Johnson) is unfortunately not in her place—said:
“The draft WMS did not contain any information relating to national security, the intelligence agencies, cyber security or law enforcement. It did not contain details of any particular case work.”
The letter also points to the fact that the data in question was already in the public domain.
I hate to labour the point, but I feel I must in the vain hope that the message starts to percolate through to the Opposition. My constituents want more police, like the 15,300 we have already put on to the streets. They want to stop illegal crossings, and they want to stop the evil traffickers who exploit and endanger the most desperate. They like the Rwanda plan and they like the tough measures in the Police, Crime, Sentencing and Courts Act 2022 and the Nationality and Borders Act 2022, both of which the Labour party voted against.
Mike Kane (Wythenshawe and Sale East) (Lab)
Will the hon. Gentleman give way?
Chris Clarkson
No, I will not.
My constituents think we should be banging up people who glue themselves to the roads and vandalise buildings and monuments. They want fair, controlled migration, not open borders. Any of those things would have been a worthwhile use of an Opposition day but, again, we are talking about a process issue—the same thing we have talked about half a dozen times. It is a waste of parliamentary time. Sadly, it is predictable, wearing and utterly ridiculous. Get a grip.
Richard Thomson (Gordon) (SNP)
What a debate this is turning out to be on one side of the House. I cast my mind back to last week’s SNP Opposition day debate, and to other Opposition day debates. A single transferable speech seems to be rattling around about all the things that the Opposition could be talking about. The clue for Conservative Members is in the name. If they want to be in charge of choosing the topics for Opposition day debates, they should simply call a general election, which would be welcomed by the country.
Opposition day debates are about the things the Opposition want to talk about, which are very often the things that the Government desperately do not want to talk about. I do not blame the Government or the Paymaster General—the Paymaster General always seems to be the one sent out to defend the crease, even when the post holder changes—for not wanting to talk about the Home Secretary’s shockingly casual approach to security protocols, her apparent disregard for her officials’ legal advice or her extreme rhetoric, which is creating security risks and surely makes her completely unfit for any kind of public office.
We are often told that there are two things we should never see being made: laws and sausages. After the Paymaster General’s remarks today, we might need to add ministerial appointments to that list. It is astonishing that, six days after admitting she had broken the ministerial code and resigning, the Home Secretary was able to saunter back into her old job, off the back of her grubby deal to endorse the Prime Minister in the Conservative party’s leadership election.
It has been obvious in recent years that, whenever a Minister transgresses badly enough, even under this Government, to have to leave office, the time they have to spend in the ex-ministerial sin bin has diminished. I am not sure if that is always because standards have dropped, but the half-life of the radioactivity that results from political misdemeanours seems to have markedly reduced.
The Home Secretary’s reappointment to Government, never mind her reappointment as Home Secretary, raises some extremely serious questions, because there is not one but two emerging scandals surrounding her. Each one, in its own way, not only calls into question her competence and integrity in office but raises extremely serious questions about the judgment of the Prime Minister himself.
Members have spoken about the woeful situation at Manston and, with your indulgence, Madam Deputy Speaker, I would like to move away slightly from the discussion of the unauthorised release of information and talk about the obstinate refusal to disclose relevant information—surely that is completely the wrong way round for how Ministers should be operating. We have heard the Home Secretary’s approach to defending the way she dealt with legal advice; she did not, apparently, ignore it, but simply chose to act in a contrary and potentially unlawful fashion having read it.
What cannot be in dispute is that a facility designed to hold up to 1,600 people for no more than 24 hours at a time as a short-term processing facility became, under this Home Secretary’s watch, severely overcrowded. The result has been what the Prison Officers Association assistant general secretary Andy Baxter described as a
“humanitarian crisis on British soil”,
with people sleeping on cardboard in tents amid outbreaks of covid, diphtheria, scabies and hepatitis. David Neal the chief inspector of borders and immigration told the Home Affairs Committee that we are now past the point where we can describe Manston as being a safe facility.
All of that coincided with the Home Secretary’s first period in office. Although she denies this, numerous sources, both inside and outside Government, have stated that one major factor for that overcrowding was that the new Home Secretary was refusing to sign off on hotel accommodation—or “alternative accommodation”, call it whatever you like—that would have allowed people to move on from Manston. I tabled a named day question last week asking how many people had been rehoused in that alternative accommodation and how many such alternative places had been approved by the Home Secretary. Remarkably, the answer that came back refused to divulge that information, because, apparently, it could be obtained only at “disproportionate cost”. I do not think that disproportionate cost is something that can be measured in financial terms, but I hazard a guess that this would have come at a greatly disproportionate cost to the remaining credibility of the Home Secretary.
I go down that byway because paragraph 1(c) of the motion calls for the “minutes”, “submissions” and “communications relating to” the Home Secretary’s appointment or
“advice relating to that appointment”
to be disclosed. It would be extraordinary if the advice that we have been told was being proffered to the Home Secretary was dealt with and treated by her, through her actions, in the manner that many of us believe it was.
This debate is, of course, concerned with security rather than Manston itself, and the reason for that is simple: we know that, by her own admission, the Home Secretary sent confidential information from a secure government IT environment to her own personal Gmail account. She also sent information to another Member of this House, who was not authorised to receive it in that form. Incredibly, she also tried to send it on to the Member’s spouse’s email account and the only reason they failed to receive it was that the Home Secretary accidentally sent it to a different unauthorised recipient, a member of staff of a different parliamentarian. So there were two unauthorised recipients, one of whom it was sent to deliberately and the other of whom was an accidental recipient, every bit as unauthorised as the other intended recipient.
In her resignation letter, the Home Secretary claims to have “rapidly reported” the breach when she realised it. However, a former chairman of the Conservative party has said:
“As I understand it, the evidence was put to her and she accepted the evidence, rather than the other way round.”
In a letter to the Home Affairs Committee on 31 October, the Home Secretary wrote that she realised her error at 10 am and that by 10.2 am had emailed the staff member involved asking them to delete the document—whoop-de-doo. Despite that, the Home Secretary apparently did not think to email or contact the Chief Whip—this further contradicts her claim of rapidly reporting the breach—or, perhaps more pertinently, the permanent secretary or the Cabinet Secretary. It was nearly lunchtime when the Home Secretary said that, by coincidence, she saw the Chief Whip, who by then was already aware of what had happened. It is impossible to square the Home Secretary’s explanation of her actions and motivations with the timeline and the information that we now know. What I think is perhaps hardest to accept is the complete and utter insouciance of the Home Secretary in this matter. Indeed, if we were to take both her resignation letter and her letter to the Home Affairs Committee at face value, we could be forgiven for imagining that this was the first Home Secretary who had ever been forced to resign for doing absolutely nothing wrong.
To take the two most high profile resignations from this Government of late, there is some quite remarkable language used in the letters. The Home Secretary said that she was
“choosing to tender her resignation”,
when she should not even have been given the luxury of that choice. That is almost as good, if not better than, the line in the letter of resignation from the right hon. Member for Spelthorne (Kwasi Kwarteng). He said:
“You have asked me to stand aside as your Chancellor. I have accepted.”
My goodness, how gracious of him! Nevertheless, there are serious discrepancies in the Home Secretary’s version of events around this breach.
When it comes to that laxness in IT and informational security, we know, of course, that the Home Secretary has form. She herself has conceded that, on six separate occasions, between 15 September and 16 October, she sent documents from her UK Government email environment to her personal Gmail account. That gives rise to a much, much wider issue, which is that, as a result, the UK is now in the absurd position where the Minister responsible for national security has, by her own actions and admissions, proved that she cannot be trusted with the integrity of sensitive documents. That has very serious implications—whether Conservative Members wish to hear it or not—for what the security services can be confident in sharing with the Home Secretary and consequently, flowing from that, serious issues about the accountability that there can be of the security services to Ministers. International partners will also have taken note, and I suspect that the explanations that have been given will cut little ice. They will simply see a security risk.
If the Prime Minister wants to restore some level of confidence in national security and in the office of Home Secretary, he now needs to remove this Home Secretary from office and commit to a full investigation and to the release of all the relevant documentation to establish what exactly took place. If the Prime Minister was in the least bit serious when he talked of integrity and accountability in his Government, he needs to match those fine words with the reality of his actions: release that information and sack the Home Secretary.
As I have said, this matter raises very serious concerns about the Prime Minister’s judgment. That is why the information must be released. That is why the Government must release information also made available to the Prime Minister in deciding whether to reappoint the Home Secretary. That would allow us get to the bottom of it. It would allow us to reach an informed judgment and see whether it is justified that so many Members on the Opposition Benches take the view that the appointment of this Home Secretary was a very, very serious misjudgment indeed.
Madam Deputy Speaker (Dame Rosie Winterton)
I was very pleased that the hon. Gentleman brought his speech back neatly to the motion. This is another reminder that we have in front of us quite a narrow motion. I trust that hon. Members will adjust their speeches accordingly.
Danny Kruger (Devizes) (Con)
I am afraid that we just have to ignore the shameless politics of this motion. It is, of course, the job of the Opposition to bring this sort of motion before the House. There may come a day—a very distant day—when we sit on the Opposition Benches and make similar attacks on the Government. If the Labour party is the Government, we will have plenty of material to work with based on its last stint in office. There will be new names to add to the illustrious roster of Hinduja, Ecclestone, Mittal and so on, and perhaps even some old names will be coming back. I have the fortune of representing the noble Lord Mandelson as a constituent. I dare say that he will be back on the Front Bench of the Labour party if it is ever back in power and he, no doubt, will be resigning two or three times during his next stint in office. Our Home Secretary has only ever had to resign once, compared with him.
We should not complain, even if it is very thin stuff that Labour Members are bringing. What is going on here? Is it the context or the subtext of this motion? Labour is not attacking the Home Secretary because she shared a policy document with a fellow Privy Counsellor and a former security Minister. The document itself contained no security information. In fact, all the information in the document was already in the public domain. There was no national security breach and no private data involved. That is not the purpose of their attack. The attack is because of her approach to immigration, and I suggest that that is not a subject for this sort of political knockabout, because the topic matters to us all. Despite the knockabout, I think both sides have a legitimate concern and legitimate points to make in this debate, and deep down we all want the same thing.
It is easy to caricature one another’s positions: the Opposition say we are heartless; we say they are naive. They say we are against refugees altogether; we say they want open borders—I said that last week, and it is true of some of them, but let me be fair to the majority of our opponents and try to represent their view fairly. They want us to play our part as a country—a leading part, given our history—in the management of the great people movements of the world. They want our attitude as a country to those people huddled in boats in the English channel to be one of compassion. They want our responsibility—
Madam Deputy Speaker (Dame Rosie Winterton)
Order. The hon. Gentleman is straying—
Madam Deputy Speaker
Order. The hon. Gentleman needs to sit down when I am standing. Thank you. He is straying away from the terms of the motion, and he should be quite careful what he says about other Members of the House.
Danny Kruger
That is a fair point, Madam Deputy Speaker, and I thank you for that guidance. I do not have much more to say, then, because the topic of the debate should have been the question of how we manage migration—that is the real purpose of the Opposition’s attacks on the Home Secretary.
It is right that we on the Government side represent citizens who believe strongly in the importance of protecting our borders against illegal migration. It is preposterous that the Opposition think the Government should reveal legal advice. They cannot attack the Home Secretary for her plans on migration, because those plans are popular and right, so they attack her. I wish they would recognise that we all want a humane asylum system and secure borders; they could even work with us to secure that.
Ruth Cadbury (Brentford and Isleworth) (Lab)
This debate has as its core the issue of standards and integrity in our politics. When he was appointed as Prime Minister, the right hon. Member for Richmond (Yorks) (Rishi Sunak) proclaimed that he would bring integrity back to Government. He certainly had a front-row seat to its disappearance, seeing that he served faithfully next to a previous Prime Minister with form on the issue. Yet one of his first acts as Prime Minister was to bring back a Home Secretary who just six days before had quit for not one, but two breaches of the ministerial code. They were not accidental breaches or a one-off mistake where an official forgot to tick a box; they were clear breaches of the ministerial rules.
The issue of standards relates not just to emails and the use of personal IT, but to the ethics of how the Home Office works as a Department. Like all of us, Ministers are public servants. We all sign up to the seven Nolan principles of public life: integrity, openness, selflessness, objectivity, accountability, honesty and leadership. Ministers also have a duty to this country on public safety, national security and human rights and a duty to the taxpayer. Have we seen that from the current Home Secretary? No—and that is what this debate is about.
I want to focus on the record and decisions of the Home Secretary and the Home Office in relation to their approach to the crisis in the UK response to asylum seekers. For instance, last week the Home Secretary played to the anti-immigration gallery by implying that asylum seekers had to be stopped from wandering our streets—hence the Government’s policy on Manston—yet her Department was responsible for two groups of destitute asylum seekers being found wandering the streets around Victoria and having to be picked up by a small charity to ensure that they had warm clothes, warm shoes and food.
I also remind the Conservative party that asylum seekers are seeking refuge. They are fleeing—
Madam Deputy Speaker (Dame Rosie Winterton)
Order. I am afraid the hon. Lady is also going a little wider than the terms of the motion. If she could bring herself back to the motion, that would be very helpful to everybody.
Ruth Cadbury
I appreciate that, Madam Deputy Speaker, but I hope you will let me continue, because I will bring my speech back to the point about standards in public life, which is where I started and what I think this motion is fundamentally about.
Just to give some background, if you will indulge me, Madam Deputy Speaker, in Hounslow there are currently almost 3,000 asylum seekers in nine hotels, and more than 500 in dispersal accommodation, which are mainly rundown houses in multiple occupation with shared kitchens and bathrooms. There are 140 unaccompanied asylum-seeking children. The challenge locally is not asylum seekers roaming the streets causing problems for the community, because by definition asylum seekers want to play by the rules because they want to be given asylum. They do not want to cause trouble, and they are not going to cause trouble. The problem is the challenge for our public services in making sure that these vulnerable people have the right to education and social services to ensure that they are safe and comfortable while they are waiting in the ever-lengthening queue to get their status. The Home Office—
Madam Deputy Speaker (Dame Rosie Winterton)
Order. The hon. Lady absolutely must come back to the terms of the motion, because she is roaming much wider, and I have pulled up other Members for that. She must come back to the motion itself.
Ruth Cadbury
The Home Office has contracts with organisations such as Clearsprings Ready Homes, which then has contracts with a network of other agencies that are providing a terrible service. One person who works with these services said that asylum seekers receive food not fit for a dog and accommodation not fit for animals.
The hotels—I am coming to my point, Madam Deputy Speaker—receive £40 a room, yet the agencies are receiving Home Office money and taxpayer money at £130 a room, and they are pocketing the difference. The agencies are getting £15 a meal, yet the caterers are receiving £5.
Madam Deputy Speaker (Dame Rosie Winterton)
Order. I am sorry, but the hon. Lady is not talking about security, as set out in the motion. If the hon. Lady can tell the House how what she is saying relates to these issues of the release of papers, that would be very helpful.
Ruth Cadbury
All right, Madam Deputy Speaker. I take your point and I will keep my notes on that level of misuse of taxpayer money for another time.
I will conclude by saying that perhaps the Prime Minister could finally appoint an independent ethics adviser to ensure that when we see serious breaches of the ministerial code, they can be investigated impartially and a report can be published. I fear that we have returned to an outdated and old-fashioned approach to standards—an approach that simply says, “Trust us, don’t worry, we’ll look after it”, yet surely we and all those who we represent deserve so much better.
Lee Anderson (Ashfield) (Con)
We all know in this House that it is not appropriate for the Government to publish information relating to confidential advice, so why are we here today, again wasting parliamentary time when we could be talking about real issues? I am just looking at the Labour Benches opposite, and seven Labour MPs have turned up for this debate that they asked for. They cannot even be bothered to turn up to a debate.
Why are we actually here? It is nothing to do with security. It is nothing to do with standards. It is nothing to do with wanting to do the right thing. This is a bullying campaign to get rid of the Home Secretary. That is all it is—it is a relentless bullying campaign to get rid of our brilliant Home Secretary. I can tell you now, she is going nowhere. In the real world where I live and where I represent, I have not had one single email. If you are talking about releasing documents, how about you lot over there—[Interruption.] Sorry, Madam Deputy Speaker. How about Opposition Members releasing their emails to show how many emails they have actually had on this subject? I suspect it is not very many at all. They do not live in the real world.
Like I say, it is a relentless horrible bullying campaign to get rid of the Home Secretary. The Home Secretary needs to have the backing of this place. She needs the backing of Parliament. She needs the backing of the whole country. She needs people to get behind her so that we can sort out the migrant problem, crime on the streets and these silly protests that we have outside, but that will not happen unless the Opposition get behind her and unless we all get behind her. They are just playing politics—that is all they are doing. I used the word “bullying”. That is all they are—a bunch of bullies. I have been bullied before by the Labour party. I was bullied out of the Labour party, but thanks to them, I am stood here now, sticking up for my residents in Ashfield and Eastwood.
The British people get it; they understand. Like I said, I have not had one single email on this subject. Why are we here today, wasting taxpayers’ money, when we could be talking about the boat crossings, crime on the streets or saving lives? We could be talking about the important stuff. You can sit there with glazed expressions on your faces again like you normally do, looking at me as though I have just landed from a different planet.
Madam Deputy Speaker (Dame Rosie Winterton)
No, I am not looking at all glazed. Please follow proper parliamentary procedure.
Lee Anderson
I apologise, Madam Deputy Speaker. You may be aware that Opposition Members are looking at me like I have landed from a different planet, but I have not—I have landed from planet Ashfield, and this is where real people talk common sense. This lot on the Opposition Benches need to visit my constituency, if they ever get the chance. At the next election, I challenge them to come up, knock on some doors and speak to some real people in the real world of Ashfield, and they will go away knowing that that seat of Ashfield is going to stop blue for a long time. I cannot talk any more, because this is a very narrow debate, but what I will say is that they are nothing but a bunch of bullies, and they should be ashamed of themselves.
Andy Slaughter (Hammersmith) (Lab)
I am going to branch out in a different direction and speak to the motion. It is very precise and quite narrowly drawn, but it goes to the conduct and character of the Home Secretary, which is an important matter for us to discuss, and that is possibly why so many, if not all, Government Members have found it difficult to speak to the motion. They can talk to the Home Secretary’s policies—failed as they are, they are ones that appeal to them—but they find it difficult, perhaps, to defend her behaviour.
The serious issue here is not the course of conduct that led to the Home Secretary’s sacking; we know about that. It is the way the Home Secretary has conducted herself since that sacking; it is her refusal to answer questions. That is why these documents and reports need to be asked for. As always, it is the cover-up that is the problem as much as, if not more so than, the offence itself.
The Home Secretary has form on this issue. She was Attorney General on and off for well over a year. I had the chance to observe her behaviour then, and I am afraid to say that there were regular reports of her being investigated for leaking sensitive Government information. On 22 January, The Daily Telegraph reported that the Attorney General would be seeking an injunction against the BBC over a case involving the Security Service. I asked her about that at Attorney General’s questions. It was reported on 26 October in the Daily Mail that the Attorney General had been investigated as part of a leak investigation, and it was reported on 29 October in The Sun that she had been subject to official Cabinet leak inquiries three times in one year.
I have tabled questions, including as recently as today, to try to get to the bottom of this. I asked the Minister for the Cabinet Office
“whether the Government Security Group conducted an investigation into release of information relating to Government plans to seek an injunction against the BBC over concerns of national security.”
The Minister replied that it is their policy
“not to comment on leak investigations.”
That is just not good enough in this case. That is why this information is being requested. It should not have to be, because it should have been put in the public domain already by the Government.
Let us come on to the more recent conduct and the resignation. I have tried several times over the past week and a half to get answers from the several statements we have had from the Home Secretary and others, usually in response to urgent questions in the House. The first point is that there are stark contradictions in the versions that the Home Secretary herself has given—for example, between her resignation letter and the much more detailed letter that she then voluntarily sent to the Chair of the Home Affairs Committee, my right hon. Friend the Member for Kingston upon Hull North (Dame Diana Johnson). She said in her resignation letter:
“As soon as I realised my mistake, I rapidly reported this on official channels, and informed the Cabinet Secretary.”
However, when she wrote with a detailed timeline to the Chair of the Home Affairs Committee, she revealed that she actually waited several hours before making any such report. She revealed that she was confronted by other members of the Conservative party outside this Chamber and that matters were put to her; it was not that she volunteered them. When, after that, she finally decided to report her breach of security, for which she was sacked, she did not go to the Cabinet Secretary; she went to her own special adviser. The question is, why did events unfold in that way and why was her account so different in her letter to my right hon. Friend the Member for Kingston upon Hull North and her political grandstanding resignation letter?
The second point is that the Home Secretary is very selective in the denials she makes in her letter to the Chair of the Home Affairs Committee. She says that 19 October was the only time she used her personal email to send Home Office documents to people outside Government. She talks only about email; she does not talk about other non-secure networks, such as messaging services. She talks about insecure communication outside Government, but what about insecure communication inside Government, which would equally be a breach of procedure? She talks about insecure communication inside Government, but she does not relate that to anything other than her tenure at the Home Office; she does not relate it to her much longer tenure as Attorney General, when, as we have heard, she was accused several times of leaking.
Then we come to the matter that was raised in the urgent question yesterday, which has been raised on several other occasions as well, which is the Home Secretary’s statement—again, I think it is very carefully worded—that,
“I have never ignored legal advice.”—[Official Report, 31 October 2022; Vol. 721, c. 639.]
My hon. Friend the Member for Eltham (Clive Efford) asked about that yesterday, as did my right hon. Friend the Member for Kingston upon Hull North, the Chair of the Home Affairs Committee, and there has been some debate as to what the Home Secretary means by it. As I pointed out in an intervention earlier, she does not say—this would be much more straightforward—“I followed legal advice.” There was clear legal advice as to whether detention at Manston over 24 hours was legal, and it clearly was not. She could have said, “At all times I complied with legal advice,” but she said, “I didn’t ignore legal advice,” which could cover a multitude of circumstances. It could mean that she considered that advice and then rejected it, notwithstanding the fact that it was sound and solid legal advice. It could mean that she took another course of action, and I think we are getting near to what actually happened there.
Indeed, I think the Minister who answered the urgent question yesterday got close to what actually happened when he said:
“There are competing legal duties on Ministers. Another legal duty that we need to pay heed to is our duty not to leave individuals destitute. It would be wrong for the Home Office to allow individuals…in a condition of some destitution, to be released on to the rural lanes of Kent without great care. That is why the Home Secretary has balanced her duties”.—[Official Report, 7 November 2022; Vol. 722, c. 30.]
Leaving aside the fact that, on at least one occasion, individuals in a state of destitution were released on to the streets—the streets of Victoria rather than Kent—it does appear that, in the majority of cases, the Home Secretary decided to allow Manston to fill up to two or three times its capacity and to allow people to be contained there not for hours or days but for weeks and, in doing so, knew she was breaking the law. She decided that she would break the law in that way rather than in another way. Again, that is not good enough. She had the option of not breaking the law; she had the option of finding hotel or other accommodation for the people who were stacking up at Manston in appalling conditions—we have seen the reports and the photographic evidence—so they could have been placed elsewhere.
What it comes down to is that, throughout this process, since she was reappointed, the Home Secretary has dodged questions again and again. Whether that has been by using weasel words, contradicting herself or using a bit of legal sophistry, the fact of the matter is that she will not answer these questions. I have asked her again and again, including in written questions, to specifically address the deficiencies in the letter she sent to the Chair of the Home Affairs Committee, and the same reply comes back. Indeed, I received a reply to another question yesterday which said:
“I refer the Hon. member to that letter”—
that is, the letter of 31 October. It is just not good enough. Of course, we are not naive enough to expect to always get answers to questions we ask here. It is the job of Government to try to evade answering questions, but not on matters as serious as this, and not when specific and direct questions of fact are asked and not responded to.
I think we know enough, without having those questions answered, about where the Home Secretary has been coming from in these events. We have to have, in the terms of the motion, these inquiries made and these documents released, because we have a right to know. That is the reason why my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper) has tabled today’s motion. However, I do not think the jury is out any more on the judgment or conduct of the Home Secretary. What this points to more is the judgment and conduct of the Prime Minister, who, knowing all this and knowing who he was reappointing, went ahead and did just that, in the same way that he appointed the right hon. Member for South Staffordshire (Sir Gavin Williamson) to a Cabinet position. Incidentally, when questioned about the breach of security for which the right hon. Gentleman was previously sacked, the Prime Minister said that that was “four years ago.” If being four years ago is an excuse, what is being six days ago?
Let us look in more forensic detail at the conduct of the Home Secretary, but let us not let the Prime Minister off the hook either. He must take responsibility for those appointments that he has made. Even the Business Secretary, the man of a thousand name badges, could not defend the Home Secretary in the comments that he made. The Prime Minister should not be doing that either.
Robin Millar (Aberconwy) (Con)
It is a privilege to follow the hon. Member for Hammersmith (Andy Slaughter). I congratulate him and my hon. Friend the Member for Clwyd South (Simon Baynes), who is not in his place, on sticking closely to the script and looking at the issue of papers in some detail. This is indeed a narrow debate, and I commend my hon. Friend the Member for Devizes (Danny Kruger), whose comment about it being a thin debate made me think of thin gruel. I must, though, commend my hon. Friend the Member for Heywood and Middleton (Chris Clarkson) for managing to work the word “louche” into the debate. He has a skill that I can only aspire to.
This is a serious issue, though, so with your indulgence, Madam Deputy Speaker, I will set out some of the context. I would first point with pride to the UK’s history of aiding those in genuine distress. In the last two years, we have opened our doors to an unprecedented 350,000 people fleeing conflict around the world, in Ukraine and in Afghanistan, or persecution in Hong Kong. It is the disposition of the people of these islands to be welcoming. It is also their expectation that laws be upheld and the character of our country preserved.
It is the work of Government to balance these desires, but this is an Opposition day debate, and regrettably they have turned instead to the study of the smallest part. That is not necessarily a bad thing. Indeed, lessons are there to be learned, and I am grateful for their concern for the speck in our eye, but it is the responsibility of Government to keep sight of the big picture and real-world context, so let me briefly set this debate in the real-world context of what is happening in communities up and down the country.
Last Sunday evening, I received a wave of concerned messages and phone calls from constituents of mine living in the community of Dolgarrog, and they were not about papers. I must explain that Dolgarrog is a rural Snowdonia village of around 400 residents. It is a tight-knit, deeply hospitable and Welsh-speaking community. It has its own rich history, woven with aspiration and with tragedy, and it has been my privilege to get to know this during my time as MP. By way of setting this in context, residents there address each other by name and children walk to their school. It came as a shock to them, and this is the reason for the calls to me on Sunday evening, when they discovered that the local hotel had been procured as overflow accommodation for asylum seekers. Overnight, the community found that its population had increased—
Madam Deputy Speaker (Dame Rosie Winterton)
Order. I fear that although the hon. Gentleman keeps saying he is setting this in context, he seems to be taking it to a whole different area from what is in the motion, frankly. So could he return very quickly to the motion? I think we have got the gist of what he is saying about what happened the other night, and it is quite important that he addresses the motion.
Robin Millar
Madam Deputy Speaker, I am grateful for your guidance and your indulgence.
When I spoke to residents last night, they did not vest their complaints in questions about papers. They did not hold ideological positions, they did not speak with hatred in their hearts and they did not question the process of ministerial appointments. They did not even question the individual appointments themselves, and they did not ask to see any classified papers. They did not concern themselves with petty party political point scoring. Instead, the overwhelming sentiments and questions were: “How long will this last, should we walk our children to school, can I walk my dog, are my windows and doors secure, and will my son get his job back?” There was no mention of papers. These are the concerns of a community whose future hinges on debates and decisions here in this House, and any of us in the same position would feel the same way.
However, the Opposition have sought to detain the Home Secretary. They want to waste finite time and resources for the sake of pursuing political point scoring. They want to look at papers. They want to remove the speck in our eye, but they have forgotten the beam in their own. Labour has, after all, no plan to reduce the number of dangerous small boat crossings in the channel, and it voted against our Nationality and Borders Act 2022, siding with people smuggling networks and blocking the removal of those with no rights to be in the UK. While serving as shadow Immigration Minister, the Leader of the Opposition said he wanted any migrant who said they were scared to return home to stay in the UK—
Madam Deputy Speaker
Order. The hon. Gentleman is whizzing off again in a completely different direction. I really think he needs to come back to the motion in front of us.
Robin Millar
Thank you, Madam Deputy Speaker. If I may, I am simply drawing attention to the things the Opposition could have chosen to discuss in the House, but did not choose. They have chosen instead to discuss papers.
It is clear that Labour Members are detached from the priorities of residents in their homes and of this country at large. They fail to understand both the magnitude of the crisis and the moral duty towards the estimated 80 million people on the move around the globe. Instead, they wish to talk about papers. It is imperative that the Home Secretary receives the support of this House in the execution of her duties, so I end my speech with a plea that Labour Members take a step back from party politics, debate serious matters and work with us to deliver the protections this country and communities such as Dolgarrog demand.
Matt Western (Warwick and Leamington) (Lab)
It is a pleasure to follow the hon. Member for Aberconwy (Robin Millar).
Trust is a really important value, and it something that I fear people listening and watching outside, and perhaps even people in here, feel is deserting this place, particularly after the last three years of what could be described as virtual mayhem, a certain amount of lawbreaking and a certain scandal. The new Prime Minister promised
“integrity, professionalism and accountability at every level”,
and I think all of us wanted to take him at his word—the country certainly did after the complete and utter chaos of the previous six or seven weeks. We know that as Home Secretary, the right hon. and learned Member for Fareham (Suella Braverman) was guilty of six separate breaches of security in six weeks. Previously, as Attorney General, her record showed Cabinet leak inquiries on three occasions in the past year. How many breaches would there have been during the 133 weeks that she was Attorney General?
The Prime Minister should have done due diligence. He has an investment background, and we would have expected that in who he appointed to the top three or four roles in Government. As my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper) said, there is evidence of insider trading, and if we were talking about a football manager, they would have been sacked a long time ago. We know the Home Secretary has broken the ministerial code at least twice. These are not one-off mistakes, so why was she reappointed after just six days? That calls into question the judgment and credibility of the Prime Minister, after three years of a Prime Minister trashing the office of No. 10.
Indeed, we know that the right hon. Member for Maidenhead (Mrs May) restricted the access of the then Foreign Secretary to papers while he was in that position, and she did the same for the right hon. Member for South Staffordshire (Sir Gavin Williamson). We then had six weeks of chaos, with the Prime Minister and Chancellor trashing the economy. The country demands integrity, but it is not getting it in the shape of this Home Secretary. Businesses, public sector workers, and in this case civil servants expect professionalism. They expect decency, integrity and standards in public life.
The hon. Member for Ashfield (Lee Anderson) asked for common sense to be applied, and whether we had visited Ashfield. I have visited Ashfield recently, as he will know. He accused us of being a bunch of bullies. I have never been accused of being a bully in my entire life, yet he asserts that. On behalf of the public we are seeking to understand the degree of breaking of the ministerial code that is going on, and the sense of judgment of the Home Secretary and, by extension, the Prime Minister. I speak to ordinary people on the street, to businesses and others, and a director of a business would have been struck off for this pattern of behaviour. A doctor would have been struck off. This kind of behaviour does not meet the test of being fit and proper to practise.
The motion before us asks whether the Prime Minister undertook a risk assessment. That is critical to understanding what he understood at the moment when he appointed the right hon. and learned Member for Fareham to her position, and back into the Home Office after six days. His leadership has to be understood. Judgment is critical to that, and I am afraid that he failed in that not just once, with his appointment of the right hon. and learned Lady, but a second time with the appointment of the right hon. Member for South Staffordshire. Once upon a time, when Ministers broke the ministerial code or were found to be enmeshed in scandal, they would walk. The Prime Minister talks about integrity, professionalism and accountability, but I am afraid the Home Secretary fails on all three.
Mark Eastwood (Dewsbury) (Con)
This is quite a narrow motion, and I will try not to veer away from the subject at hand, but I need to address some points that have been made. My hon. Friends the Members for Guildford (Angela Richardson), for Ipswich (Tom Hunt) and for Aberconwy (Robin Millar) talked about the amount of correspondence they have received regarding papers. Along with my hon. Friends on the Government Benches, I have not received a single email on papers, the Home Secretary or the behaviour of the Home Secretary. What I have received is hundreds of emails from people who are really concerned about the small boats issue. That is really getting under the skin of my constituents. Not only that: they want to see more police on the street. That is what they are writing to me about, not papers and the hearsay of Opposition Members.
The contributions to the debate from Government Members will be quite short, because ultimately the papers that Opposition Members are referring to are confidential and therefore, based on legal advice, we cannot publish them. So we will keep the debate narrow, but what I find astonishing is that the Opposition talk about national security when we have the hon. Member for Brent North (Barry Gardiner) on the Opposition Benches. We can talk about Chinese money—
Madam Deputy Speaker (Dame Rosie Winterton)
Order. Did the hon. Member notify the hon. Member for Brent North that he would refer to him?
Mark Eastwood
Thank you, Madam Deputy Speaker.
Ultimately, it is not appropriate for the Government to publish information relating to confidential advice. Despite what the Opposition say, the documents in question did not contain any information relating to national security, the intelligence agencies, cyber-security or law enforcement. In the Home Secretary’s letter to the Chair of the Home Affairs Committee, she clarified:
“The draft WMS did not contain any information relating to national security, the intelligence agencies, cyber security or law enforcement. It did not contain details of any particular case work.”
The data in question was already in the public domain.
Stuart C. McDonald
If it was already in the public domain and there is nothing to hide, does the hon. Member agree that we should at least get to see that ministerial statement?
Mark Eastwood
As I said, my constituents are just concerned about the subject at hand, which is illegal immigration and the small boats and dinghies coming over. So no, I do not think that that is correct.
In the Home Secretary’s letter to the Chair of the Home Affairs Committee, she clarified:
“It did not contain any market-sensitive data as all the data contained in the document was already in the public domain.”
That concludes my speech.
Fleur Anderson (Putney) (Lab)
I am extremely pleased to close this debate on an important motion. It is important to my constituents in Putney, Southfields and Roehampton, who have stopped me on the tube recently and said, “What is going on?” They are perplexed about what is being allowed to happen and especially about the issues around the recent reshuffle and its returns.
Fleur Anderson
I am just starting off.
The public look to the Home Office to keep them, their families and their communities safe, but the Prime Minister’s decision to reappoint the Home Secretary against advice just six days after she broke the ministerial code and had to resign, and in the light of the further reports about security and code breaches, is shockingly irresponsible. We have heard a full, detailed list of questions that we still do not have answers to. I hope to hear answers to them in the Minister’s closing speech.
We heard powerful speeches from my hon. Friend the Member for St Helens South and Whiston (Ms Rimmer), who listed several serious questions that need to answered, my hon. Friend the Member for Birmingham, Erdington (Mrs Hamilton), who outlined the serious concerns raised by her constituents that need to be addressed, and my hon. Friend the Member for Brentford and Isleworth (Ruth Cadbury), who raised the questionable decisions made by the Home Secretary—that is what is underneath this whole debate today—and the need to appoint an ethics adviser. Perhaps we will hear about that from the Minister later.
My hon. Friend the Member for Hammersmith (Andy Slaughter) gave a forensic analysis of the current Home Secretary’s history of leaking being investigated, and the discrepancies in the timeline: when she reported the mistaken email, the selective information given in the letter to the Chair of the Home Affairs Committee, my right hon. Friend the Member for Kingston upon Hull North (Dame Diana Johnson), and the deficiencies in those letters. That letter and the deficiencies in it are one of the reasons why the Opposition called for this debate and for the documents to be made public.
My hon. Friend the Member for Warwick and Leamington (Matt Western) underlined the importance of trust and the need to rebuild the trust of our constituents in the Government after recent months—years even—of the Conservative Government. We need to rebuild trust and that is why we need to see the documents. The judgment of the Prime Minister is being called into question, as my hon. Friend outlined, and the country deserves high standards.
Let me be clear: these are serious questions for the Prime Minister. This month’s Prime Minister promised
“integrity, professionalism and accountability at every level”,
but the unravelling of the Home Secretary’s story throws all three of those into doubt. There are serious discrepancies in the letter to the Chair of the Home Affairs Committee, which I think releasing the documents would help to show. The written ministerial statement leaked by the Home Secretary, which is central to these allegations and issues, was sent on purpose to a member of the Intelligence and Security Committee, the right hon. Member for South Holland and The Deepings (Sir John Hayes) and, by mistake, to someone else. That surely throws up lots of questions about what else the Home Secretary is sending out and to whom.
Did the Prime Minister know that the Home Secretary had previously used her personal email on six other occasions when he made this appointment? Did the Prime Minister know about the review into her use of personal and Government IT, and was he presented with the findings before he reappointed her? Did he know about the very serious allegations that the Home Secretary was repeatedly leaking sensitive information when she was Attorney General? Did he know of any other breaches that are not currently in the public domain? Has he seen the contents of the Cabinet Office leak inquiry report? Has he been advised of any further breaches of the ministerial code over the handling of events at Manston? Why has the Prime Minister appointed someone with such a cavalier approach to the security of documents and such a history of leaking, to such an important position for national security? All those questions could be answered right now by the Minister without making any personal information about appointments public. They could just be answered right now and I think that would go a long way to restoring trust. The Prime Minister has an opportunity today to definitively prove he has nothing to hide, or he can Whip those on the Government Benches to vote against this motion. We would then have to assume that there is something to hide.
This is a narrow debate, as has been said many times, and specifically so. It asks only that certain papers be laid before the House within 10 sitting days, so that the decision to reappoint the Home Secretary just six days after resigning can be made fully transparent. We are asking to see only the risk assessment, the documents about security breaches and any leak inquiries, submissions made or advice relating to the appointment, and that if redactions need to be made, understandably so, any unredacted materials are made available to the Intelligence and Security Committee of Parliament.
In his opening remarks, the Minister for the Cabinet Office and Paymaster General, the right hon. Member for Horsham (Jeremy Quin) said that sharing appointment documents would undermine the appointment system. We are not asking for all documents in all cases to be shared. This is a very exceptional and unusual appointment just six days after a ministerial resignation, so the process is already undermined. The allegations will continue to dog the Home Secretary unless we can fully find out what has been going on. I hope that those documents would restore the trust that has been lost.
It is not just the Opposition who are asking serious questions. The Chair of the Public Administration and Constitutional Affairs Committee, the hon. Member for Hazel Grove (Mr Wragg), also wrote to the Cabinet Secretary on 3 November to ask many questions about the reappointment of the Home Secretary and about many procedural issues. He has written a list of six serious questions that I hope will be answered soon.
Amid all the chaos, it is timely to remind ourselves that there is still no ethics adviser in post. The Prime Minister said that one of the first things that he would do was to appoint a new ethics adviser. The previous Prime Minister said that she did not even need one, but no one believed that. A Cabinet Office Minister also promised me in a Westminster Hall debate on Monday 17 October that an ethics adviser would be appointed very shortly. The Prime Minister has so far not appointed one, but has instead appointed a Home Secretary who resigned over security breaches and an Immigration Minister who admitted acting unlawfully in office. The Minister at the centre of all these allegations remains on the Government Front Bench—it is just “Carry on Conservatives”. Where is the promised new ethics adviser? Why the delay when we are again seeing breaches of the ministerial code left, right and centre? Has the position been offered to anyone or to a succession of people who have said, “No, the work load is too much. We can’t take this on”? Will the Minister update the House today?
The Conservative Government have instead relegated national security to an afterthought, at times an inconvenience and something to be worked around. The Opposition have secured this debate not only because the allegations are very serious in their own right and we need to know more, but because the Home Secretary’s actions and appointment indicate a pattern of behaviour by the Prime Minister in the way that he is making decisions.
There have been allegations that the former Prime Minister used her personal phone for Government business. There are now revelations about the actions of the Cabinet Minister—the Minister without Portfolio, the right hon. Member for South Staffordshire (Sir Gavin Williamson)—and that is relevant to this motion, because that pattern of behaviour cannot become normal. We have to draw a line.
Robin Millar
Have we not just heard the real reason for this motion? It is nothing to do with the Home Secretary or even immigration; it is all to do with trying to establish a pattern of behaviour in the Prime Minister, because the Labour party is playing political games.
Fleur Anderson
I thank the hon. Member for that intervention, because we are absolutely seeking to establish whether there is a pattern of behaviour by the Prime Minister in appointing people to the Cabinet who should not be there because of their history of leaks and misbehaviour. That cannot be acceptable. It undermines integrity, which the Prime Minister was talking about. Let me remind colleagues, including the hon. Member for Aberconwy (Robin Millar), that the Prime Minister has reappointed to Cabinet the man who, in 2019, was sacked as Secretary of State for Defence after a leak investigation. That pattern of behaviour cannot be allowed to continue.
What does this pattern of behaviour show? It appears to indicate that there is no sin too serious, no leak too large and no text too ill-tempered for a Tory to find their way back to the Cabinet table. That is no way to run a country. Is there just a chronic shortage of talent in the Conservative party? Do those who seem to find their way back know where the skeletons are buried? The public will ask those questions unless the documents are made public, and we need to hear them. Unless we see the papers and have reassurance about national security concerns, the public will be left fearing the worst. It is time for the truth. I challenge Government Members to vote for the motion, make the documents public and prove that the Prime Minister has nothing to hide.
The Parliamentary Secretary, Cabinet Office (Alex Burghart)
It is a pleasure to respond to this Opposition day debate, 10 days into the job though I am; this is a very important subject. It is a pleasure to follow the hon. Member for Putney (Fleur Anderson). I should say at the outset that I can answer one of her questions: the Prime Minister will appoint an independent adviser in the very near future. I am sure that the House will hear about that in due course.
We have had a far-ranging debate. At times it ranged slightly further than you might have liked, Madam Deputy Speaker, from some very interesting insights into the thoughts of constituents in Guildford and Aberconwy to a minor digression on sausage making from the hon. Member for Gordon (Richard Thomson). Central to the motion, despite the digressions, is a serious issue that affects the very real business of government and how it is conducted: the question whether advice given to Ministers and Prime Ministers in private, in confidence, should be made public. Conservative Members are clear that it should not.
These are very serious matters that the Government take seriously. It is because we are taking them seriously that we cannot agree to the disclosure of the information set out in the motion. The thrust of this debate is that the Opposition seek to see inside the internal processes of ministerial appointments and to make public the discussions that may form part of any appointment. As my right hon. Friend the Paymaster General said, there are compelling and common-sense reasons why that desire should be resisted.
Lee Anderson
I am very confused. I have sat through this debate for three hours now. Can my hon. Friend explain why the Opposition are hearing from people in their droves asking to see these documents, yet nobody is asking Conservative MPs? Are the Opposition just playing politics?
Alex Burghart
I am shocked and surprised to hear that my hon. Friend has views. It is the first time that he has ever shared them with me. The Opposition have not entirely turned out to take part in this Opposition day debate, it is true.
Hon. Members will know that it is essential to the functioning of government that conversations that occur around appointments can take place in confidence, as my hon. Friends the Members for Devizes (Danny Kruger), for Ashfield (Lee Anderson) and for Heywood and Middleton (Chris Clarkson) mentioned.
Stuart C. McDonald
Let us say that we accept that the Government do not want to release these papers. As a compromise, will the Minister undertake to ensure that the new independent ethics adviser looks retrospectively at the appointment? Then everybody could be happy.
Alex Burghart
That is a matter for the last Administration. Also, as hon. Members across the House know, it is a very long-standing practice observed by Governments of all types that they do not give over advice given in confidence. It is a practice that respects the confidentiality of the advice given and the confidentiality owed to the adviser. To place all advice in a position in which it might subsequently be published and made public would have an absolutely deadening effect on the business of government, as my hon. Friend the Member for Clwyd South (Simon Baynes) says.
What this really amounts to is gameplay by the Opposition. It is Labour Whips’ trick No. 666: ask the Government for information that they know but that Governments never release, and then feign horror and surprise when they do not release it. The fact is that a Labour Government would never publish such information. If the Opposition commit tonight to releasing such information should they be in power in future, the next Labour Government—may they never come—will bitterly regret that decision.
The shadow Home Secretary, the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper), can say that it is a simple matter of showing us what happened, but as a highly experienced legislator, Minister and Select Committee Chair she knows that this is not a simple matter. It was not a simple matter for the Labour party when it was asked to reveal the legal advice on Iraq, but in opposition it suddenly decided that it was a simple matter to get the Government to display their legal advice on Brexit. Several Members have noted that it is the case that Governments of all stripes do not release such information, and those on the Opposition Front Bench know it to be the case as well.
There is, as we have said, a very long-established process for the appointment of Ministers. It is the Prime Minister who decides who sits on the Front Bench. The Labour party knows as well as we do that Ministers hold office for as long as they retain the confidence of the Prime Minister, that it is for the Prime Minister to decide who sits in the Cabinet, and that it is for the Prime Minister to pick the best team to solve the problems that the country faces. If the Opposition do not like his choices, it is normally a sign that he has picked the right team. On immigration, the Prime Minister has picked my right hon. and learned Friend the Member for Fareham (Suella Braverman) because he knows that she has the talent and knowledge that are necessary to help him to solve the small boats crisis in the channel. It is pretty clear tonight that the Labour party knows that too, and that is why it is seeking to undermine her. As we heard from my hon. Friends the Members for Ipswich (Tom Hunt) and for Ashfield, Labour is doing that because it is scared that she will get the job done.
As my hon. Friend the Member for Aberconwy (Robin Millar) and a number of others have said, many important issues could have been debated tonight other than a motion asking for the release of papers that the Opposition know will not be released. The shadow Home Secretary said that “bit by bit” trust was being undermined. I will tell the Opposition what causes trust to be undermined: political games which call for the release of papers that cannot be released and which report rumours as facts, double standards which call for the release of papers that Labour would not have released when it was in power, and double standards which say that Ministers cannot be rehabilitated. I remember the very great Peter Mandelson being brought back on two occasions, but Labour will not forgive this Home Secretary once.
The truth is that this is a motion tabled with the aim of playing political games to try to tie up Ministers in process and reporting, to try to hurt the Government by asking them to deviate from long-standing practice that has previously been respected on both sides, and to try to distract attention from the fact that while the Government are busting a gut to solve the problems in the channel, the Opposition have no solutions. There is a reason why they want to talk about personnel, process and appointments: it is because they do not want to talk about policy.
Business without Debate
Madam Deputy Speaker (Dame Rosie Winterton)
With the leave of the House, we shall take motions 4 to 6 together.
Motion made, and Question put forthwith (Standing Order No. 118(6)),
Marine Pollution
That the draft Merchant Shipping (Control of Harmful Anti-Fouling Systems on Ships) Order 2022, which was laid before this House on 17 October, be approved.
British Nationality
That the draft Nationality and Borders Act 2022 (Consequential Amendments) (No. 2) Regulations 2022, which were laid before this House on 13 October, be approved.
Civil Aviation
That the draft Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 3) Order 2022, which was laid before this House on 7 September, be approved.—(Mike Wood.)
Question agreed to.
Committees
Madam Deputy Speaker
With the leave of the House, we shall take motions 7 to 14 together.
Ordered,
Backbench Business
That Kevin Foster be a member of the Backbench Business Committee.
Business, Energy and Industrial Strategy
That Mark Jenkinson be a member of the Business, Energy and Industrial Strategy Committee.
Defence
That Andrew Bowie be discharged from the Defence Committee and Sarah Atherton be added.
Education
That Tom Hunt be discharged from the Education Committee and Mrs Flick Drummond be added.
Environment, Food and Rural Affairs
That Kirsty Blackman be discharged from the Environment, Food and Rural Affairs Committee and Steven Bonnar be added.
Health and Social Care
That Helen Whately be discharged from the Health and Social Care Committee and Chris Green be added.
Northern Ireland Affairs
That Mr Gregory Campbell and Fay Jones be discharged from the Northern Ireland Affairs Committee and Carla Lockhart and Sir Robert Buckland be added.
Scottish Affairs
That Andrew Bowie be discharged from the Scottish Affairs Committee and David Duguid be added.—(Sir Bill Wiggin, on behalf of the Committee of Selection.)
Early General Election
David Linden (Glasgow East) (SNP)
In the course of campaigning in the Parkhead area of my constituency yesterday, a number of my constituents were asking why the Government have changed Prime Minister twice in seven weeks. They are determined to see a general election to get rid of this rotten Government. The petitioners therefore
“request that the House of Commons urge the Government to call an early General Election.”
Following is the full text of the petition:
[The petition of residents of the constituency of Glasgow East,
Declares that the appointment of two Prime Ministers in just seven weeks and significant departures from policy based on the Conservative Party’s 2019 manifesto is sufficient cause for His Majesty’s Government to seek a new mandate from the electorate.
The petitioners therefore request that the House of Commons urge the Government to call an early General Election.
And the petitioners remain, etc.]
[P002779]
Night Flights: Impact on Communities
(2 years ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Sarah Olney (Richmond Park) (LD)
Thank you, Madam Deputy Speaker, for granting me the opportunity to have this debate on this issue. It is quite well attended, which is nice to see. I welcome the Minister, my former colleague on the Public Accounts Committee, to his place. It is a pleasure to see him here. I understand that he is going to be the Minister for Hammersmith Bridge, so I look forward to our many constructive communications.
Night flights are the most intrusive form of aircraft noise and there is clear evidence that they harm both the physical and mental health of residents who live under flightpaths. This summer, the delays and chaos at Heathrow airport resulted in an increased number of flights landing through the night. For my constituents and for many others across west and south-west London, that disturbance resulted in countless sleepless nights.
This disturbance is completely avoidable. Night flights are by no means essential for airport operations. These flights can and should be moved and it is within the Government’s remit to ensure that that happens.
I therefore have two asks of the Department for Transport. My primary call is for a ban on scheduled flights at Heathrow airport between 11 pm and 6 am. That is the only way we can be sure that residents will not continue to suffer from noise disruption. If the Government will not commit to that, they must commission a full independent analysis of the impact of night flights on the health of local communities, the environment and the UK economy to inform future policy development.
Sarah Olney
I will give way to my hon. Friend the Member for Twickenham (Munira Wilson) first.
Munira Wilson
It is as if we were co-ordinated.
I congratulate my hon. Friend and constituency neighbour on securing this important debate. My constituency of Twickenham is, of course, that bit closer to Heathrow and further along the flightpath, so I wholeheartedly welcome and support the two asks that she is making of the Minister today about trying to balance the economic benefits of night flights against the health risks and the distress that they cause to constituents. Does she agree that the Government could start by looking at extending the night-time restriction to 10 pm, from 11.30 pm, given the large number of frequent late-night departures that are blighting my constituents’ sleep?
Sarah Olney
My hon. Friend raises an important point. We would like to see night flights restricted as much as possible to increase the amount of sleep that our constituents can get.
Christine Jardine
My hon. Friend is making an excellent speech and an excellent point on an issue that is pertinent to her constituents with regard to Heathrow, and affects my constituents in Edinburgh and, I am sure, people surrounding every other airport in the country. Night flights are a constant problem. I find my constituents constantly facing the problem of disturbed sleep—more so now that flights are increasing again post pandemic—which has both a physical and an emotional impact on them. Perhaps what we really need is some way of being able to control this, because the airports themselves at the moment cannot seem to control night flights.
Sarah Olney
I thank my hon. Friend for that excellent point. She is right, which is why we are calling for independent analysis and tracking so we can see exactly what goes on.
Jim Shannon (Strangford) (DUP)
I commend the hon. Lady for securing this debate. I spoke to her earlier in relation to this. Belfast City airport is an example of where things can happen. It is in a built-up area. Local residents were unhappy with night-time flights, which are not allowed into Belfast City airport after 9 pm and there is a fine if that happens. Does she not agree that, although people may live under a flightpath, it does not mean that they should simply be expected to live through ever-increasing mayhem? It is a case not of buyers’ remorse, but of mental health impact, which should necessitate regulation. Does she agree?
Sarah Olney
I agree 100%. It is important to think about the mental health impact as well as the physical impact.
Hannah Bardell (Livingston) (SNP)
The hon. Lady may not know this, but my staff and I became somewhat expert on this matter in 2015 when there was a flightpath consultation by Edinburgh airport. My Livingston constituency has, I believe—although it may be debated—around 70% of Edinburgh’s flight traffic during the day, but also at night. What we learned from that experience was that there was a complete lack of community consultation. Would she include in her asks of the Government that community consultation, compensation, proper structures and oversight of that must be implemented? You would not put a road through somebody’s constituency without proper consultation. Why would you put a flightpath over people’s homes without consulting them properly?
Sarah Olney
That point is powerfully made. The Government set the current night flight regime at Heathrow airport, but the restrictions are simply not stringent enough and the true number of night flights is significantly higher than the quota allows. An average of 16 flights per night are permitted to land at Heathrow each year between the hours of 11.30 pm and 6 am, but flights may receive special dispensation not to be counted towards the overall quota if they are delayed due to specific reasons such as weather conditions or air traffic control disruption.
From July to September this year, 231 flights were granted dispensation. That is between two and three additional flights per night on average. In total, 475 unscheduled night flights arrived at or departed from Heathrow airport due to extreme delays and disruption. At times, my constituents would suffer almost continuous noise from aircraft overhead. That is partly due to the Government’s complete lack of long-term planning, which saw airports engulfed in chaos and flight schedules thrown into the air. However, it also proves that the current restrictions are insufficient to limit the impact on residents when disturbances to flight patterns occur.
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
The eastern fringe of my constituency, my home town, is directly under the flightpath of Glasgow airport. A local group in my constituency, the Whitecrook Aircraft Noise Association, has been fighting for years for local residents affected by noise to be given the necessary support to alleviate its effects. When the hon. Lady asks her questions of the Minister, one of the most important and basic questions is what the Government are going to do to stop night-time flights across our constituencies.
Sarah Olney
Indeed, that is the pertinent question: what are the Government going to do?
Andy Slaughter (Hammersmith) (Lab)
I thank the hon. Lady, my neighbour, for giving way. To answer her question, we know what the Government are doing: they are increasing the misery for our constituents. The southern part of my constituency is already under the flightpath and the whole of it will be if, God forbid, the third runaway is ever built. There is a totally cavalier attitude, particularly to depriving people of sleep. No other country, certainly in Europe, would put up with an airport like Heathrow’s being expanded and the transgressions that night flights in particular make on the people who have to live with them.
Sarah Olney
The hon. Gentleman is absolutely right about expansion, and I will come on to that later.
The current night flight quotas are in place until October 2025. The Government have agreed to consult on proposals for the next regime over the course of 2023, but that will be of little comfort to many Londoners facing a further three years of disruption. Night flights are becoming an increasing issue across London. Data from the Civil Aviation Authority shows that night-time noise events from Heathrow affected 974,000 people in 2018—that is 140,000 more people than in 2006.
John McDonnell (Hayes and Harlington) (Lab)
The hon. Lady may be coming on to this point, in which case I apologise, but over the years we have been arguing that this issue is not just about the numbers, but about the impact on physical health and mental health in particular, the stress and lack of sleep it causes and the consequences of those things for people’s quality of life. The Government have never really taken that into account, so I hope that she will be able to at least focus their attention on the real effects that this issue is having on people’s lives.
Sarah Olney
I thank the right hon. Gentleman for that intervention; he is absolutely right. The Government state that their policy is to
“limit and, where possible, reduce the number of people in the UK significantly affected by aircraft noise.”
We can see from the numbers already that the policy is not fit for purpose, but he is correct that it is not about the numbers, but about the impact on those who are affected.
Long-term exposure to nocturnal aircraft noise is strongly linked to sleep disorders, and lack of sleep or disrupted sleep can have a direct impact on people’s health. One study found that, for each additional 10 dB of night-time aircraft noise that communities are exposed to, there is an increase of between 14% and 69% in their risk of high blood pressure, increasing the risk of strokes and heart attacks.
A World Health Organisation study from 2009 also found that an individual may suffer from negative health impacts of sleep disruption even if they do not wake up at night. Other researchers have found links between long-term exposure to aircraft noise and an increased risk of obesity, depression and cardiovascular issues—and I do not need to cite a scientific study to explain the impact that a lack of sleep has on mental wellbeing, as so many right hon. and hon. Members have already mentioned it.
Sarah Olney
Does the hon. Lady mind if I make a bit more progress?
In children, sleep disruption makes it more difficult for them to retain focus throughout the day. Studies have suggested that that has a negative impact on reading comprehension and memory, which can have a knock-on impact on their academic performance and general wellbeing. The human impact of night flights only intensified over the summer months, during which temperatures reached record highs. Many Londoners were left choosing between keeping their windows shut and suffering with unbearable heat or opening them and hearing the full roar of jet engines overhead. This opposition to night flights does not arise purely out of annoyance or inconvenience.
Marsha De Cordova (Battersea) (Lab)
The hon. Lady is being incredibly generous with her time. She is making the point that we have all been making: it is not about numbers; it also has to be about one’s quality of life. It is about family life, and we all have a right to that quality of life. Does she agree that the Government can no longer continue in this way? They must bring in this night flight restriction as soon as they possibly can, because my constituents in Battersea are also being impacted by this issue.
Sarah Olney
The hon. Lady makes an excellent point and I thank her for intervention. What we are hearing from all parts of the House—well, certainly all the parties on the Opposition side of the House—is that night flights pose a real risk to the physical and mental wellbeing of thousands of Londoners and other communities across the country of all ages.
That brings me to Heathrow expansion. The Conservative Government’s constant mixed messaging and refusal to rule out Heathrow expansion is causing further anxiety for my constituents. Just four weeks ago, the former Prime Minister voiced her support for a third runway at Heathrow, having previously stated she would even support a fourth being built. That followed her predecessor, the right hon. Member for Uxbridge and South Ruislip (Boris Johnson), stating that he would lie in front of the diggers to prevent such an expansion. I would therefore appreciate it if the Minister clarified the Government’s current position in his remarks. Will this Government, the third Administration in as many months, rule out Heathrow expansion?
Ruth Cadbury (Brentford and Isleworth) (Lab)
I thank my neighbour, the hon. Member for Richmond Park, for securing this debate. The overflying flights into Heathrow go over her constituency before mine. Does she not agree that we need to be concerned not just about Heathrow expansion meaning a third runway, but the possibility that the airport will try to get more flights on the existing two runways in breach of the 480,000 cap? It could of course do that if it did away with alternation, which provides respite to our residents, and had more flights during the night-time period.
Madam Deputy Speaker (Dame Rosie Winterton)
Order. I think the hon. Member needs to answer one intervention before taking another.
Sarah Olney
The hon. Member for Brentford and Isleworth (Ruth Cadbury) makes an excellent point, and she and I share views on this issue.
Wera Hobhouse
I apologise to my hon. Friend.
Many of my Bath constituents have expressed concerns about the increasing number of flights taking off from Bristol airport late at night. Does she not also agree that the climate emergency compels us to look at an overall reduction in flights, particularly internal short flights where rail is available as an alternative?
Sarah Olney
I thank my hon. Friend for that comment. She is precisely right. Our concern relates not only to night flights, but very much to the fact that Heathrow expansion would lead to increased noise levels and around 6 million additional tonnes of carbon being pumped into the atmosphere each year. The UK cannot properly tackle the climate crisis if we continue to expand our airports, especially when we should be promoting greener transport.
Hannah Bardell
I promise this is my last intervention. On the point of greener transport, does the hon. Member agree that freight flights, which are particularly noisy and polluting, should especially be banned at night? We discovered in studies and the work we did in my constituency that they were the noisiest and most problematic. We are all compelled to look for alternatives, as is the aircraft industry.
Sarah Olney
The hon. Member is particularly right on that. Where particular types of flight are known to be noisier, there should be additional restrictions. Members listening to the scale of disruption caused by night flights might wonder why they are still allowed to continue, and that is precisely the question to which I am seeking an answer.
Heathrow bosses have argued that night flights are vital to the UK economy, but there is a serious lack of evidence to back that up. The Heathrow Association for the Control of Aircraft Noise and other campaigners’ groups have argued that the economic benefit of night flights is exaggerated. Heathrow claims that the direct benefit of night flights operating at Heathrow was £325 million in 2011, supporting 6,300 jobs, but its estimates are based on a report that expands the definition of jobs supported by night flights significantly and includes the many day workers who clock in before 6 am.
The positive economic benefits of night flights are not certain. Researchers at CE Delft found that a ban on night flights would only harm the national economy if none of the passengers who currently arrive on scheduled flights before 6 am were transferred to other flights. There is simply not enough data at present to claim that night flying is essential to the UK economy. The studies we have are more than 10 years old and have not taken into account the changes to the aviation sector since the pandemic.
London is one of the most overflown capital cities in the world. Millions of people across the city experience the negative impacts of night flights, such as on their health, sleep quality and mental wellbeing. What my constituents really need is a complete ban on flights between the hours of 11 pm and 6 am. That is the only way to prevent continued disturbance. Despite the vast amount of disruption caused by night flights, no independent analysis has ever been conducted to show the impact of night flights on London’s health, economy or society. If the Government refuse to legislate to ban night flights, they must at least look at tightening the current restrictions, to limit the human impact on local communities.
For the Government to make an informed decision, we need accurate, independent data on the negative impacts that these flights have on the surrounding communities, as well as the supposed economic benefits. Will the Government commit to commissioning a full independent analysis on the impact of night flights? The Department for Transport must listen to the concerns of local communities and take those into account to devise a night flights policy that works for both residents and the aviation sector.
I would like to take a moment to thank the Members who attended the debate and have added so much emphasis to what I wanted to say.
The Parliamentary Under-Secretary of State for Transport (Mr Richard Holden)
I congratulate the hon. Member for Richmond Park (Sarah Olney) on securing this debate and on her informative, constructive speech. It has been a well-attended debate, with contributions from the hon. Members for Twickenham (Munira Wilson), for Edinburgh West (Christine Jardine), for Strangford (Jim Shannon), for Livingston (Hannah Bardell), for West Dunbartonshire (Martin Docherty-Hughes), for Hammersmith (Andy Slaughter), for Battersea (Marsha De Cordova), for Brentford and Isleworth (Ruth Cadbury) and for Bath (Wera Hobhouse), and the right hon. Member for Hayes and Harlington (John McDonnell).
On the Hammersmith bridge point, I have written to the hon. Member for Richmond Park today; she is correct about that. I did it just before I left the office. I enjoyed my time with her on the Public Accounts Committee, and it is nice to be able to communicate with her today in a slightly different way.
The hon. Lady asked for two specific things: a ban on night flights, and analysis of the full health impacts. I will go into detail on those in my speech. It is worth noting from the get-go that night flights do bring a positive impact to the UK economy and connectivity benefits with the world.
Ruth Cadbury
Is the Minister aware that, some years ago, the Government had to defend a case on night flights and did not have the evidence to justify the position he is taking on the economic advantage of flights arriving before 6 am? The reason the Government did not provide that information is that it did not exist.
Mr Holden
My understanding is that the statistics from the York Aviation report in 2021 on the economic impact of night flights in the UK said that it was about £8.7 billion of gross value added to the UK economy, with tens of thousands of jobs supported in the UK.
The time differences of an interconnected global transport system, particularly with the far east, mean that it is difficult to avoid all flights at night and early in the morning. As I said, the recent research from York Aviation estimates that in 2019, flights during the night quota period had a total impact of over £8 billion. Heathrow airport accounts for a significant proportion of that value. However, we also recognise that the noise from aircraft at night brings significant negative impacts to the local community. As the hon. Member for Richmond Park made clear, exposure to aviation noise at night can impact on physical and mental wellbeing, and I agree with her that sleep disturbance can have a negative impact on health, increasing the risk of daytime sleepiness, hypertension and cardiovascular disease.
We need to strike a fair balance between the positive and negative impacts of night flights. With that in mind, for several decades the Government have set noise controls, including restrictions on night operations at Heathrow, Gatwick and Stansted. Those airports are designated for noise purposes under the Civil Aviation Act 1982. That reflects their strategic importance and the need to balance the impact on communities with the impact on the UK economy and jobs. At other airports, noise controls are best set locally, and there are regulations in the devolved Administrations enabling them to look at some of the environmental impacts.
Last year, we consulted on night flight restrictions at the designated airports and on a night new night flight regime. Following that consultation, we announced that existing night flight restrictions at Heathrow, Gatwick and Stansted will be rolled over for three years. That will allow the Government to develop a more meaningful evaluation of the cost—which the hon. Lady asked for—and of the benefits of night flights, taking into account the effects of the pandemic and the extent and speed at which aviation demand returns.
Sarah Olney
You talk there about a full analysis. I just wonder whether you can confirm that that will include—
Sarah Olney
I beg your pardon, Madam Deputy Speaker. I wonder whether the Minister can confirm that that will be a full analysis of the health and mental wellbeing impacts and of all the other things we have been talking about today.
Mr Holden
I thank the hon. Lady for that point, and I will address that exact issue later in my speech.
As the hon. Lady said, the night flight regime is now in place until October 2025, and we intend to consult in late 2023 on proposals for the next regime. I urge hon. Members who are interested in this issue to take part in that consultation, and I look forward to the hon. Lady’s feelings and those of her constituents being made known.
The night flight regime limits the number of flights for the purpose of noise management. The restrictions significantly reduce the number of flights that would otherwise operate because of the quota. At Heathrow, the number of movements permitted has not changed for many years. Although I admit that there are occasional extra flights, they are not something that the Government want to see expand in the future.
The new generation of aircraft, such as the A350 and the Boeing 737 MAX, have a significantly smaller noise footprint on departure and on arrival—it is about 50% smaller on departure and 30% smaller on arrival—than the aircraft they are replacing.
Mr Holden
I am sorry, but I have to get through my speech.
Overall, aircraft noise is expected to continue to fall in the future. The last consultation on night flight restrictions did implement a ban on QC4-rated aircraft movements at the designated airports during the night-time quota period to specifically address some of the noise concerns. Prior to the pandemic, departing Boeing 747-400s were the noisiest aircraft in regular service at those airports. Although they could not be scheduled during the night quota period, they could still operate if delayed, although there were only very few of those delays. The operational ban on QC4-rated movements came into effect for the most noisy aircraft at the end of last month for the winter 2022-23 season. It will help in limiting the number of people significantly affected by aircraft noise by preventing those aircraft from operating.
On the dispensations, I know that Heathrow would be keen to meet the hon. Lady and other colleagues to discuss the issue further. I am aware of the issue she raises. Section 78 of the Civil Aviation Act 1982 sets the legal framework through which the Government set the night flight operating restrictions at the designated airports. That allows the airport operator, or the Secretary of State for Transport, to disregard certain movements, providing that they meet specific criteria. Those dispensations are granted by the Secretary of State and include flights by senior members of the royal family, UK Government Ministers or Heads of State on official visits. Humanitarian relief flights or exceptional circumstances could also be covered. Dispensations under a notice granted by an airport manager, which would include emergencies where there is immediate danger to life or health, are also included, as are delays as a result of disruption that lead to serious hardship and major congestion at an airfield or terminal.
This summer was particularly challenging from an air traffic control perspective and resulted in an increase in late-running flights. Widespread and prolonged air traffic disruption accounts for the majority of the 415 flights that the hon. Lady mentioned, which qualified for a dispensation at Heathrow. Any movements that are granted a dispensation in this way do not count towards an airport’s movement allowance. I appreciate that that creates uncertainty about the night flights that communities can expect.
Sarah Olney
It is very kind of the Minister to give way again. Will he elaborate slightly on some of those numbers and whether it might be possible for members of the public and Members of Parliament to get a better understanding of when dispensations have been granted?
Sarah Olney
And also why, because they have no visibility, which makes it very hard for us.
Mr Holden
I fully take on board the hon. Lady’s points and would recommend that she takes up the opportunity to meet with Heathrow officials, who have offered to meet her, because they will be able to explain in full detail. If she wants to write to me after that meeting, I will obviously write back with as many details as I have in the Department.
We remain committed to revising our night flight dispensation guidance—perhaps the hon. Lady can also write to me about that after those meetings. This will be done following a review of the number of night flight dispensations made this summer, because it was higher. I would like to reassure the hon. Lady that all night flight dispensations granted by airport managers are subject to monitoring by the Department for Transport.
To respond to the issues the hon. Lady raised about night flights, there is a study currently under way. Exposure to aviation noise at night can impact on physical and mental wellbeing, as well as sleep disturbance. To better understand this, the Department has commissioned the aviation night noise effects study to examine the relationship between aviation noise and sleep disturbance and annoyance, and how this varies by different times of the night. The study is a collaboration between St George’s University of London, NatCen Social Research, Noise Consultants Ltd and the University of Pennsylvania. It is the first study of aviation noise effects on sleep disturbance in the UK for 30 years. The first stage of ANNE will involve a cross-section of 4,000 people who live near eight of the major UK airports, to assess the association between aircraft noise exposure at night and subjective assessments of sleep quality and annoyance.
Mr Holden
I am very sorry, I am going to have to keep going. The second stage of the study—[Interruption.] The hon. Gentleman can write to me, as he asks from a sedentary position.
The second stage of the study will involve an observational study of individuals recruited from the survey to assess the association between aircraft noise exposure and objective sleep quality. This will involve psychological assessments of sleep disturbance and sound level measurements in participants’ bedrooms. That evidence will be used to inform future policies for night flight aviation noise exposure, and assist with the management and mitigation of health impacts on local communities, as part of a wider assessment of the costs and benefits of night flying.
In conclusion, the Government recognise that noise from aircraft taking off and landing at night is often regarded by communities as the most disturbing form of airport operations. At the same time, we live in a fully interconnected and global world, and the aviation sector has material value to the UK economy. Night flights are an important contributor to that. The Government continue to strive to find the correct balance between the negative impacts of aviation and the positive economic benefits that night flights bring to the British economy, as can be seen from the fact that we are conducting this important study. The findings of the aviation night noise effects study and the consultation on the future night flight regime will be the next steps on that important journey. I hope that, going forward, that survey will also play into our consultation on night flights.
Question put and agreed to.
Draft Financial Services (Miscellaneous Amendments) Regulations 2022
(2 years ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Economic Secretary to the Treasury (Andrew Griffith)
I beg to move,
That the Committee has considered the draft Financial Services (Miscellaneous Amendments) Regulations 2022.
It is a pleasure to serve under your chairmanship, Mr Robertson.
The statutory instrument comprises two sets of provisions relating to Gibraltarian firms operating in the UK market, and to securitisation. The proposed legislation will remedy technical deficiencies identified in financial services legislation that was put in place to help manage our withdrawal from the EU. In relation to Gibraltar, the instrument will fix temporary market access arrangements that were put in place to ensure Gibraltarian firms did not face a cliff edge loss of market access into the UK when we left the EU. In particular, the amendments will complete the intended transfer of powers to the Treasury and the Financial Conduct Authority in three specific areas. That transfer will give the UK authorities powers in relation to Gibraltarian firms where operating in the UK market, consistent with their powers over domestic firms.
It is worth remembering that financial services legislation was amended on withdrawal from the EU to adjust the treatment of "European economic area firms", in particular to remove passporting rights that were a function of the EU single market. At that time, because Gibraltarian firms benefited from equivalent rights, separate provisions were necessary to preserve the existing arrangements supporting market access for financial services between the UK and Gibraltar. Those arrangements were always intended to be temporary. Through the Financial Services Act 2021, we are working to replace them with a new, permanent regime designed specifically for Gibraltar that reflects our unique history and relationship.
The temporary regime that the Government put in place for Gibraltarian firms unintentionally prevented the transfer of powers to the Treasury and the Financial Conduct Authority - or the FCA - from being completed in certain areas, leaving gaps in UK law. This SI will exclude provisions from that temporary regime to remove those gaps in the powers available to the Treasury and FCA. That is equitable and proportionate as it will enable the treatment of Gibraltarian firms to be brought in line with UK firms. To close those gaps would provide for a more consistent legal and regulatory environment, as had been intended.
The SI will have an impact on three regulations that affect Gibraltarian firms operating in our market, namely, the Short Selling Regulation; the Markets in Financial Instruments Regulation; and the Packaged Retail and Insurance-based Investment Products Regulation. I shall highlight the key impacts of the SI on those regulations.
Under the Short Selling Regulation, the Treasury's power to modify the reporting threshold relating to net short positions will extend to Gibraltarian firms trading shares on a UK trading venue. Under Markets in Financial Instruments Regulation, the FCA will be able to apply technical standards relating to post-trade disclosure obligations to Gibraltarian investment firms in the UK. Similarly, under the Packaged Retail and Insurance-based Investment Products Regulation, the FCA will be able to apply technical standards to Gibraltar firms selling, advising on or manufacturing PRIlPs to retail investors in the UK.
I note that the instrument confers new powers on UK authorities, in effect the same powers that the Treasury and FCA already have in relation to UK firms. The Treasury and the FCA would need to take steps to apply those powers as appropriate to Gibraltarian firms in the UK market.
The next set of provisions delivered through the SI relates to securitisation. Securitisation is the packaging up of assets or loans and selling them on to investors. This allows lenders, such as banks, to transfer the risks of assets to other banks and investors to free up their balance sheets and allow for further lending to the real economy. In relation to securitisation, the instrument will amend the end-date for two specific requirements. That will preserve a consistent approach to certain securitisations which are subject to temporary transitional arrangements, following the UK's withdrawal from the EU.
The UK supports the implementation of international standards to promote simple, transparent and standardised securitisations, known as "STS" securitisations. STS securitisations are easier for investors to understand and assess the risks of. As a result, some STS investors will benefit from lower capital requirements. Generally, only firms established in the UK can designate their securitisations as STS. However, transitional arrangements were put in place to allow for certain EU STS securitisations issued prior to the end of 2022 to be recognised in the UK. Those arrangements were extended to the end of 2024 by another set of EU exit regulations earlier this year.
The SI before the Committee will simply extend the end-date of two requirements for EU STS securitisations to the end of 2024, rather than 2022. That will ensure UK investors do the appropriate due diligence checks when investing in EU STS securitisations, and that those securitisations remain exempt from clearing requirements to prevent unnecessary administrative burden. The amendments thus maintain the current requirements as long as the transitional arrangements last.
I hope colleagues will join me in supporting the regulations, which I commend to the Committee.
James Murray (Ealing North) (Lab/Co-op)
Thank you, Mr Robertson, and it is a pleasure to serve under your chairship.
As we have heard, the regulations concern miscellaneous amendments to the financial services regulations, and are made to address deficiencies in retained EU law arising from the United Kingdom’s withdrawal from the EU. The delegated legislation is technical in nature, and seeks to correct a “deficiency” through regulation 2, and to extend post-Brexit temporary recognition arrangements through regulations 3 and 4. The latter regulations relate to the requirement for institutional investors to carry out specific due diligence prior to investing in EU simple, transparent and standardised, or STS, securitisations. They will extend the exemption from the clearing obligation in relation to EU STS securitisations to those notified prior to 11 pm on 31 December 2024. That will ensure consistent treatment for EU STS securitisations notified before that date.
Regulation 2 of the instrument ensures that the Treasury and the FCA will be able to apply their powers through certain regulations to Gibraltarian firms in the UK financial services market. As we know, the Treasury has made a number of amendments to regulations since 2019 in attempting to ensure that the UK-Gibraltar regulatory framework for financial services continues to operate smoothly. Regulatory changes in the Gibraltar (Miscellaneous Amendments) (EU Exit) Regulations 2019 transferred powers from the EU to the Treasury and the FCA. Although the amendments made in 2019 caused the EU to cease having any regulatory oversight of Gibraltar, the regulations did not fully transfer all of the necessary powers and functions to the Treasury and the FCA that they should have done.
Clearly, the SI before us seeks to remedy the Government’s error. It is important that the financial services regulatory framework concerning UK-Gibraltar market access and oversight runs smoothly, so the Opposition will not oppose the measure.
Douglas Chapman (Dunfermline and West Fife) (SNP)
It is a pleasure to serve under your chairmanship, Mr Robertson.
The SI is evidence of the continuing shambles and uncertainty that we have as a result of Brexit. I say to the Government and His Majesty’s official Opposition that making Brexit work is indeed hard work. We are seeing a continual number of different fixes to what is Brexit, and the SI is yet another.
Unfortunately, last week Mark Carney said that Brexit is a contributor to soaring inflation and the cost of living crisis. That is what the rest of the country is having to put up with in our daily lives. Although I have no inclination to vote against the SI, because it is a technical measure, perhaps the Government should be charged with wasting parliamentary time, because we should not have to be considering such issues.
Andrew Griffith
It is a pleasure to follow my colleague, the hon. Member for Ealing North, and I thank him for this support for the measure, which, as he confirmed, is technical in nature.
I note the comments of the hon. Member for Dunfermline and West Fife about Brexit. I can assure colleagues that anything to do with Brexit is a wee stroll compared with the epic marathon that would be disentangling Scotland from the rest of the United Kingdom.
It is the Government’s view that the amendments, which relate to securitisation and the Gibraltar financial services regime, are necessary, appropriate and proportionate. I hope that hon. Members have found today’s Committee sitting informative and that they will join me in supporting the regulations, which I commend to the Committee.
Question put and agreed to.
Draft Inter-American Investment Corporation (Immunities and Privileges) Order 2022
(2 years ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (David Rutley)
I beg to move,
That the Committee has considered the draft Inter-American Investment Corporation (Immunities and Privileges) Order 2022.
It is a pleasure to serve with you in the Chair, Mr Gray. It is also a great honour to be here with esteemed colleagues, and I want to highlight my appreciation of the amazing work that a number of hon. Friends have done in the Foreign, Commonwealth and Development Office, and it is honour to serve in this Committee in their presence. And of course it is also an honour to be here with my hon. Friend the Member for Castle Point, with whom I served in the Whips Office for a long time. She is one particular Whip of whom we should take notice, and I will always be present when she wants me to be.
The statutory instrument, which is subject to the affirmative procedure, was laid before Parliament in draft on 11 October 2022. It will be made once it is approved by both Houses. It confers immunities and privileges on the private sector lending arm of the Inter-American Development Bank Group, the Inter-American Investment Corporation. That arm of the bank is known commercially as IDB Invest, and I shall refer to it as such.
The Inter-American Development Bank Group works to promote greater security and stability within Latin America and the Caribbean. The bank is a key partner as we work towards our objectives in the region. Those objectives include promoting democracy and economic growth, preventing organised crime and taking action on climate change, which I know is a huge issue for many members of the Committee. We are also working to deepen trade and investment relationships and to prevent and prepare for the next pandemic.
The Inter-American Development Bank Group is an international financial institution, headquartered in Washington DC. The bank group is the largest source for development finance for Latin America and the Caribbean, and it provided $22.9 billion in 2021. It shares similar policy objectives with other international financial institutions, such as the World Bank Group, to accelerate economic and social development.
The UK has been a member of the Inter-American Development Bank Group since it was established in 1959 and we have used our shareholding to shape it. That includes securing a commitment from the bank, ahead of COP26, to align with the Paris agreement by 2023, and to increase the volume of finance that it provides to tackle climate change.
The bank plays a critical role in providing loan finance to Governments across the region to support development objectives and projects, including in infrastructure, health and education. However, private sector investment across Latin America and the Caribbean region is also critically important for driving growth, creating jobs and tackling climate change. To strengthen the bank group’s focus on investing in the private sector, it agreed with shareholders in 2015 to “merge out” its private sector operations to form IDB Invest. That is now a separate legal entity within the bank group, with its own board and shareholding structures. Today, IDB Invest provides around $6 billion of finance per year to businesses, with a focus particularly on small and medium-sized enterprises. The UK voted in favour of the merge out and agreed to transfer $7 million of UK capital from the bank to IDB Invest. In 2018, the IDB Invest Treaty was presented to the UK Parliament. The final stage in the process to join IDB Invest is to ratify the treaty.
As we have joined an international organisation, we are required under international law to grant it the necessary immunities and privileges. The International Organisations Act 1968 allows His Majesty to do that by Order in Council. It is a long-standing UK policy to only grant immunities and privileges where they are needed. I can assure hon. Members that the immunities and privileges afforded to persons connected with IDB Invest are strictly limited to those required for them to conduct their official activities. They are not for any personal benefit. Hon. Members should note that they are also in line with those offered to officials of other international financial institutions, with which they will be familiar and of which the UK is a member. They include immunity from suit and legal processes for staff in respect of their official acts, and tax exemption. Members should note that the income tax exemption does not apply to British citizens.
The order confers only those immunities and privileges on IDB Invest staff and secondees that are necessary for the institution to function effectively and to conduct its official activities in the UK. Immunities and privileges will be granted only to official visitors from IDB Invest. It does not currently have a UK office.
In granting the immunities and privileges in taking up membership in IDB Invest, the UK will be better placed to influence a major pool of development finance in a region of strategic importance. I commend the order to the Committee.
Fabian Hamilton (Leeds North East) (Lab)
It is an honour to serve under your chairship, Mr Gray.
We welcome the SI, which approves IDB Invest and its immunities and privileges, and we welcome closer engagement with Latin America and the Caribbean. The economic prosperity of our partners is very important to our country and the stability it brings to the region also provides geopolitical security to that part of the world. As we know, however, many countries across Latin America and the Caribbean face pressing humanitarian crises. One of the most prominent of those is in Haiti, where the functionality of the Government has all but failed and criminal gangs control large parts of the country.
Haiti is one of the countries that will be able to borrow from the Inter-American Development Bank. Following the assassination of President Moïse last year, it is essential that political and economic stability is returned to the Haitian people. I think it is therefore very urgent that the international community comes together, working through institutions such as the Inter-American Development Bank, and IDB Invest, to ensure that Haiti is able to carry out free and fair elections to establish a long-lasting permanent Government. With that in mind, I would like to ask the Minister whether he can tell us, based on the UK’s involvement, how much money is being provided to Haiti to deal with the cholera outbreak and the impacts of criminal gangs? As Haiti’s debt was cancelled after the 2020 earthquake, and more than $2.2 billion was provided in grants from the bank up to 2020, it is really important that the institution urgently acts again to fund Haiti’s long-term political and economic development plans.
The Chair
If the hon. Gentleman will allow me, I am listening with great interest to his remarks, but they bear very little relationship, or only a peripheral relationship, to the SI being considered. He perhaps might want to return to the instrument that we are discussing.
Fabian Hamilton
Thank you for that guidance, Mr Gray. I suppose the reason I believe they do bear relevance, and obviously I will be guided by you in the Chair, is that IDB Invest will have a substantial impact on the economic development and the resolution of the crises of many of the affected countries, which will be able to borrow from the bank and are able to receive from it. I can cut the rest of my speech out, if you wish, Mr Gray, and just ask the questions.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
While my hon. Friend is thinking about that, and I am sorry that I was slightly late because I was talking to some constituents outside, could we know where the sources of the money for the investment comes from? I have done a lot of work with the World Bank and the World Health Organisation, and what always worries me is that they do not actually have any money. They have to get money from elsewhere.
Fabian Hamilton
My hon. Friend makes a very good point. As the Minister has said, it is a multilateral organisation, and we are part of it. The SI is really designed to approve IDB Invest and of course the immunities and privileges granted to the British citizens who work for it. Without further analysis or research, I cannot answer my hon. Friend’s question directly, but I know that many countries are involved in raising the finance necessary. And that finance is necessary.
I was going to mention, and I will just gloss over it if the Chair will permit me, the effect on the Bahamas of Hurricane Dorian, which struck at the end of August and during the first half of September in 2019. I spoke to people from there just last Thursday, and those effects have been devastating. The bank and its investment branch will have the ability to invest in the economy of the Bahamas to bring it back into credit, because at the moment its debt burden is 105% of its GDP, which of course is unsustainable. I hope that what we are doing today will ensure that development and inward investment can be given to the Bahamas by that essential organisation.
The explanatory memorandum to the SI states:
“The IIC currently provides around $6 bn of annual finance to businesses within Latin America, with a focus on small-and-medium-sized enterprises. Once the UK becomes a member of IIC we will be able to work with other shareholders and the Bank to influence the allocation of this finance to align with UK priorities, with a policy goal of facilitating development finance and bolstering sustainable growth.”
With the issues that I have described in mind, could the Minister tell us what are the specific priorities of the Government in Latin America and the Caribbean and whether there are any plans to update or review the Debt Relief (Developing Countries) Act 2010?
Finally, I should like to raise the growing influence of China in the region, but if you feel that is not necessary, Mr Gray, obviously I will not.
The Chair
It bears no relationship of any kind at all to the SI we are discussing. Will you please return to the SI?
Fabian Hamilton
Well, China is a member state of the Inter-American Development Bank—
The Chair
Order. I think I have been relatively slack, but the fact of the matter is that we are discussing the particular details of the way in which the bank will operate. Of course it would be possible to discuss almost any matter of international interest under that general context, but I think discussing China’s influence in the Caribbean might be stretching it just a shade.
Fabian Hamilton
Obviously I will acknowledge and listen to your guidance, Mr Gray.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
I am interested in the idea of giving specific immunities to staff members of the institution and how that will affect our relationship with China in particular, given that in offering the organisation immunities, one is also offering a shareholder of the bank some level of access. Is there a concern about that?
Fabian Hamilton
I thank my hon. Friend for his intervention, and I believe that that is a legitimate question. I know that we are discussing immunities and privileges for UK staff, but do we know whether other countries that are part of the bank and part of IDB Invest also enjoy those immunities? I shall leave it there, Mr Gray.
John McDonnell (Hayes and Harlington) (Lab)
Just briefly, although I know how hon. Members like to spend long periods of time in SI Committees, I want to ask the Minister a question, and I am happy if he writes to me in response. On this occasion, and as we have asked on other occasions, it would be useful to know exactly the specific immunities and privileges that are being afforded. What are the extent of those immunities? I raise that because the IDB has not been an uncontroversial body. Its recent president, a Trump nominee, was ousted as a result of allegations of malpractice, and we will be electing a new president on 20 November. We will be affording it, as the Minister said, privileges and immunities in the normal run of business, but with this body I think there are some exceptional concerns that we must have in monitoring and making sure that the immunities and privileges and their parameters are properly set and open to public scrutiny in some detail. I do not expect the Minister to reply today, but if he could write, that would be really helpful.
Mr Sheerman
I always come religiously to SI Committees. Some people find them a little irritating sometimes but I always enjoy them. I also always make sure that I say something because why would a politician come to a meeting and not say anything on the record?
I have done a lot of international work, so could we dig deeper on what the proposed immunities and privileges will deliver? We know of appalling things that have happened when international people have worked for international organisations, and they have been known to have predatory and sexual relationships and so on with local people. What are the privileges and immunities that will work in this case? If someone got into trouble for harassing a citizen in a particular country, would they be unable to be charged with any offence or punished?
David Rutley
I welcome the comments and broad support offered by hon. Members for the order. Clearly, as the hon. Member for Leeds North East highlighted, the key priority is the economic prosperity of our partners and stability in the region. There is clear alignment there. He raised a number of issues, to which I know I am not supposed to respond, so I will not, but needless to say and to reassure members of the Committee, we will be meeting next week to discuss those items in more detail, in a more appropriate setting. We will leave those issues for then, but we are very mindful of issues in Haiti and we know that we need to do more to tackle climate change in the region. Interacting with those partners, they understand the influence of the UK when other strategic players are in operation in the region, such as China.
To reassure hon. Members about the funding of IDB Invest, we are agreeing to transfer $7 million of UK capital in annual instalments from the bank to IDB Invest. That is a transfer of funds, just to make that clear.
Questions were understandably raised about the immunities and privileges. I will provide more detail in writing to the hon. Members for Hayes and Harlington and for Huddersfield. The primary focus is on the legal and suit processes, and tax exemption, although that does not apply to British citizens. On the specific point raised by the hon. Member for Huddersfield, I will come back to him in more detail, but there is a precedent for waivers in such situations. But I will put that in writing to him so that he can be assured on the specific point he raised.
Without further ado, I should like to conclude by saying that in taking up our membership of IDB Invest, we will be better placed to influence the investment that it makes to support private sector development. That will allow us to support the UK’s goal of promoting development and reducing poverty in a region of strategic importance. I thank hon. Members for their contributions and I commend the order to the Committee.
Question put and agreed to.
Retained EU Law (Revocation and Reform) Bill (First sitting)
Tuesday 8th November 2022
(2 years ago)
Public Bill CommitteesRead Full debate Retained EU Law (Revocation and Reform) Act 2023 View all Retained EU Law (Revocation and Reform) Act 2023 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 8 November 2022 - (8 Nov 2022)
The Chair
Colleagues, welcome to this interesting Committee, as we get stuck into this important Bill. We are now sitting in public and the proceedings are being broadcast. I have taken my jacket off, so feel free to disrobe in any way that you feel is appropriate. I have a few preliminary announcements. Hansard colleagues would be grateful if Members could email their speaking notes, if they exist, to hansardnotes@parliament.uk. When I was first elected, we never had to say such things, as we did not have emails. Please switch electronic devices to silent. Tea and coffee are not allowed during sittings. Date Time Witness Tuesday 8 November Until no later than 9.50 am Sir Stephen Laws KCB KC Tuesday 8 November Until no later than 10.25 am Professor Catherine Barnard, Professor of European & Employment Law, University of Cambridge; Professor Alison Young; Sir David Williams, Professor of Public Law, University of Cambridge Tuesday 8 November Until no later than 10.55 am Tom Sharpe KC, One Essex Court; Martin Howe KC, 8 New Square Tuesday 8 November Until no later than 11.25 am The Bar Council; Eleonor Duhs, Bates Wells Tuesday 8 November Until no later than 2.35 pm Sir Richard Aikens, Brick Court Chambers; Barnabas Reynolds, Shearman and Sterling; Jack Williams, Monckton Chambers Tuesday 8 November Until no later than 3.05 pm Sir Jonathan Jones KC, Linklaters; Hansard Society Tuesday 8 November Until no later than 3.35 pm Trades Union Congress; Unison Tuesday 8 November Until no later than 4.20 pm Green Alliance; Wildlife & Countryside Link; Unchecked UK; RSPCA Tuesday 8 November Until no later than 4.40 pm The Scottish Government Tuesday 8 November Until no later than 5.10 pm Law Society of Scotland; Charles Whitmore, Research Associate, Cardiff University; Dr Viviane Gravey, Senior Lecturer, Queen’s University Belfast
We will first consider the programme motion on the amendment paper. We will then consider a motion to enable the reporting of written evidence for publication and, if we need to, a motion to allow us to deliberate in private about our questions before the oral evidence session. In view of the time available, I hope that we can take those matters without debate. I call the Minister to move formally the programme motion in her name, which was discussed yesterday by the Programming Sub-Committee for the Bill.
Ordered,
That—
(1) the Committee shall (in addition to its first meeting at 9.25 am on Tuesday 8 November) meet—
(a) at 2.00 pm on Tuesday 8 November;
(b) at 9.25 am and 2.00 pm on Tuesday 22 November;
(c) at 11.30 am and 2.00 pm on Thursday 24 November;
(d) at 9.25 am and 2.00 pm on Tuesday 29 November;
(2) the Committee shall hear oral evidence in accordance with the following Table:
(3) proceedings on consideration of the Bill in Committee shall be taken in the following order: Clauses 1 to 10, Schedule 1, Clauses 11 to 20, Schedules 2 and 3, Clauses 21 to 23, new Clauses, new Schedules, remaining proceedings on the Bill;
(4) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 pm on Tuesday 29 November. —(Ms Ghani.)
The Chair
The Committee will therefore proceed to line-by-line consideration of the Bill on Tuesday 22 November at 9.25 am.
Resolved,
That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.—(Ms Ghani.)
The Chair
Copies of written evidence that the Committee receive will be made available in the Committee Room and circulated to Members by email.
The next motion relates to deliberating in private. We may not need to move this motion, colleagues. My suggestion is that I will start every panel by turning to the Labour lead to ask the first questions. We will then go across the Committee. Indicate to me if you wish to ask a question to the particular witness, bearing in mind that the knives are absolute; we have 15 or 20 minutes, or whatever, with each group of witnesses, and we cannot go beyond that.
It would be helpful, if you are asking a question, and if there is more than one witness at the time—particularly if we have witnesses on Zoom and witnesses in person—to indicate who in particular you would like to answer the question, or whether you would like them all to answer. That would be quite helpful, but you will probably forget that after about 10 minutes. Are we happy to proceed on that basis without going into a private session to agree how we will ask the questions? If everyone is happy, that is that.
This is a serious moment, colleagues. Before we start hearing from the witnesses, do any Members wish to make a declaration of interests in connection with the Bill? No. In that case, we will now hear oral evidence from Sir Stephen Laws, former First Parliamentary Counsel, who is waiting patiently for us on Zoom. Before calling the first Member to ask a question, I remind all Members that questions should be limited to matters within the scope of the Bill, and we must stick to the timings in the programme motion that the Committee has agreed. For the first witness, we have until 9.50 am.
Examination of Witness
Sir Stephen Laws KCB KC gave evidence.
The Chair
Will the witness please introduce himself for the record?
Sir Stephen Laws: My name is Stephen Laws. I was First Parliamentary Counsel from 2006 until 2012. Before that, I had been a career drafter and civil servant since 1975. I am now a senior research fellow at Policy Exchange.
Justin Madders (Ellesmere Port and Neston) (Lab)
Q
Sir Stephen Laws: Yes, I think it is. The ideal for the law is that all law can be found from easily accessible sources and relied on to mean what it says without being qualified by complex, obscure or general glosses, or involving complex historical research to find out whether it is valid. The Bill, by removing everything that is subject to those disadvantages—because the ideal is not the situation at the moment for retained EU law—is an important step towards securing that the ideal is achieved, by forcing the decisions to be made about how this law can be properly integrated into UK law quickly. Things will only get worse if that does not happen.
Retained EU law is imprecise because it has been removed from the context needed to make sense of it. That will get worse because the sources become of historical interest only, and the methodologies in the UK system for dealing with EU law will become lost knowledge and of historical interest only. The law will become obscure. The Bill is a useful way to force things to become better.
Justin Madders
Q
Sir Stephen Laws: The way in which it is scrutinised is a matter for Parliament to work out. It is not something that you would expect to be wholly within the Bill. When deciding what parliamentary scrutiny there should be, it is important to decide what parliamentary scrutiny is for. There is a sort of myth that Parliament should treat itself as the author of legislation and should look at every line, and that legislation for which Parliament has not looked at every line has not been properly written. That is an unrealistic position.
Parliament is a political filter for legislation. It is important that it should identify the bits of legislation that are politically salient, and that it should provide an incentive for technical quality. The first can be achieved, as was the case with the legislation under the European Union (Withdrawal) Act 2018, by having a really rigorous system of triaging subordinate legislation made under the Bill to ensure that Parliament picks up the things that are politically salient. The second is achieved in practice already right across the board by random sampling; what keeps drafters keeping the quality of their drafting up is not that Parliament will look at every line, but the fact that they do not know which lines Parliament will look at, so they have to get them all right.
The Bill establishes the conventional methods of scrutiny, but they need to be backed up by a parliamentary process decided by Parliament and not set out in legislation, because, as we have learned in the last six years, if you put provisions about parliamentary procedure in legislation, you find yourself in the courts. That is not where the processes of Parliament should be.
Justin Madders
Q
Sir Stephen Laws: By the support given to the parliamentary Committees that look at legislation, and perhaps by asking the Government to make sure that their plans for legislation are exposed first, so that Parliament has an opportunity to look at the plans and say, “Well, if that’s what you’re going to do, those are the things that we want to look at in particular.”
Justin Madders
Q
Sir Stephen Laws: Yes, I would, because they have not told you what they aim to do with all this legislation that is going to be repealed. I suggest that you ask them to do that as the process proceeds.
The Chair
I have a feeling that that might happen.
Sir Stephen Laws: Yes, I thought that it might happen too.
The Minister for Science and Investment Security (Ms Nusrat Ghani)
Q
Sir Stephen Laws: Yes, it is. EU law applied in a situation where we are not in the EU is quite difficult to work out. The provisions of the 2018 Act are extremely complex; they are glossed. A lot of the EU law was made in the context of trying to harmonise across Europe. When you are trying to work out what it means, you want to know what it is for, and what a lot of it was for is not now relevant. It is not about harmonising rules across Europe; it is about applying rules in a domestic context.
Ms Ghani
Q
Sir Stephen Laws: On the whole, yes. I have some reservations, because there are respects in which the Bill contains worrying aspects through which it might be possible for inertia to reassert itself, and for the status quo to become the default for what replaces it. My experience of all legal change is that it is most effective when it is ratcheted—when people do not have the option of saying, “Oh well, we will exercise this power to keep things the way they were.” That needs to be watched carefully and, if possible, legislatively discouraged.
Ms Ghani
Q
Sir Stephen Laws: Yes, it does. The major difference between the way the UK traditionally legislates and the way the EU—and indeed lots of other countries—legislate is that under a parliamentary system the Government take responsibility for the effect and quality of the law. That means that when law is made, it is made to do something that people have agreed on. Very often, law made in Europe—in different languages as well—was a matter of agreeing words, irrespective of what the words achieved. If you could agree on the words, that was the best that you could hope for; that may happen very occasionally in my experience, and very rarely indeed in the UK. In the UK people agree on the substance, so you know what the law does. Retaining all this law that was there because it was a compromise on words is making life difficult for those people who have to use it.
Peter Grant (Glenrothes) (SNP)
Q
Sir Stephen Laws: Well, most of the law that this relates to—certainly the early clauses about subordinate legislation—is not law that Parliament made; it is law that Parliament enacted or approved because it had to. The law that will be made under the Bill will be made by a Government accountable to Parliament. The powers in the Bill are equivalent in some ways to the power under section 2(2) of the European Communities Act 1972, but in that case there was no choice about the substance of how you exercised the power; the argument was all about the means. Under this Bill, Parliament will have an opportunity to look at the substance as well as the means.
Peter Grant
Q
Sir Stephen Laws: Yes, but that does not mean that Parliament agreed to the substance of the legislation—nor, in some cases, did the Minister. They are all part of compromises. In the end, the European law had to be enacted because it was European law.
Peter Grant
Q
Sir Stephen Laws: There were mechanisms to feed in the UK view, but the UK view did not necessarily have to prevail.
Peter Grant
Q
Sir Stephen Laws: Frankly, that is not a question that I have prepared for, so I cannot say much. What I can say about the Good Friday agreement is that I am not sure that the protocol is relevant, because the law by which the protocol applies is the law of the things that are not retained just because we were carrying over the old law, which is what this Bill is mainly about. I am sorry; I have not looked specifically at the Northern Ireland aspects of the Bill.
Mr David Jones (Clwyd West) (Con)
Q
Sir Stephen Laws: Yes, I do. I think that that is part of the confusion. If we are going to work out what the law means, it is important that the system for retained EU law should fit the system that we have for all other law, which is that the latest views of Parliament should count.
Alex Sobel (Leeds North West) (Lab/Co-op)
Q
Sir Stephen Laws: I did not intend to imply that every one of the laws that will disappear needs to be replaced. A rational approach is to say that everything will cease to have effect unless we replace or retain it. There is a fallacy around legal reform that was criticised by Cass Sunstein, the American jurist and adviser to President Obama, which is that the law is very fond of the status quo: the law thinks that if we know the law already, changing or removing it must be less clear. I think that the status quo is something that needs to be justified just as much as any proposal for change needs to be justified.
We have had six years to look at all this law and to decide what of it is so valuable that we need to keep it. If people are now not able to defend specific bits of the status quo that they think are important, it is likely that they never will be able to. People will keep relying on the fact that it is the law already and must be clearer than a change, but to say that we should not change law because change is always more uncertain than keeping things the way they are is an argument against all legislation. We might as well wind up Parliament all together if we are to pursue that argument.
Alex Sobel
Q
Sir Stephen Laws: I think you need to be concerned about it, but first, you have to exclude from the equation the idea that law becomes uncertain just because you are changing it; that is an argument against changing the law altogether. Secondly, you have to recognise that most law, but not all, is about either imposing duties on people to do things, or imposing duties on people not to do things. It is quite clear that repealing a law does not bring about anything that did not exist before. You do not, by removing a prohibition, require people to do what was previously prohibited; nor do you, by removing a duty, forbid people from doing what they were previously under a duty to do. For most purposes, if a law disappears, people can carry on behaving exactly as they did before until they see a good reason not to. It is just that they are not required to undertake that duty, or are no longer subject to a duty not to do something different. I am not sure that as much lack of clarity is produced by removing a whole load of law as is being suggested.
Alex Sobel
Q
Sir Stephen Laws: I do not think so, because as I have said, people have had six years to look at this law and see how much of it they think is important. Another year does not seem an unreasonable period in which to finalise their views on these things.
Saqib Bhatti (Meriden) (Con)
Q
Sir Stephen Laws: Yes, because it removes a whole load of law that was enacted under a system that qualified parliamentary sovereignty by imposing obligations on the Government and, indirectly, Parliament, to produce particular forms of law. The Bill replaces that with a system in which all new law will be subject to questions, as to substance and form, in a parliamentary forum.
Saqib Bhatti
Q
Sir Stephen Laws: I do not think I can add much to what I said before: there is a great volume of law here; a great volume of law was produced under section 2(2) of the European Communities Act 1972 and, indeed, under the 2018 Act. It is important that Parliament develops a sensible system of scrutiny, so that it can do its job of questioning and legitimising matters that are politically salient, and providing a robust system of random sampling, so as to make sure that the quality of legislation is maintained.
The Chair
There is time for one quick question, if anyone is bursting to ask one. Ah! I call Stella Creasy.
Stella Creasy (Walthamstow) (Lab/Co-op)
Q
The Chair
You have 30 seconds, Sir Stephen.
Sir Stephen Laws: It is possible to underestimate the influence Parliament has, even if the procedures are relatively formal. In the last six years, we have seen that Governments who try to do things that do not have the approval of Parliament get themselves into a lot of trouble. By now, they have probably learned the lesson—indeed, I think they have always known the lesson— that Governments do not propose things to Parliament that they know Parliament will not, in the end, want to agree to.
The Chair
Thank you. That is a high note on which to finish, Sir Stephen. Thank you for the clarity of your evidence.
Examination of Witnesses
Professor Catherine Barnard and Professor Alison Young gave evidence.
The Chair
We will move on to oral evidence from Professor Catherine Barnard, professor of European and employment law at the University of Cambridge, and Professor Alison Young, Sir David Williams professor of public law at the University of Cambridge. Both witnesses are joining us via the magic of modern technology. For this session, colleagues, we have until 10.25 am. Could the witnesses please introduce themselves for the record? Professor Barnard, would you like to go first?
Professor Barnard: Thank you very much for the invitation. My name is Catherine Barnard. I am professor of EU and employment law at the University of Cambridge, and a deputy director of UK in a Changing Europe.
Professor Young: I am Professor Alison Young. I am the Sir David Williams professor of public law at the University of Cambridge, and a fellow of Robinson College, Cambridge.
The Chair
Thank you for being with us. We have a plethora of questions for you. The first is from Justin Madders.
Justin Madders
Q
Professor Barnard: Thank you for that question. No, we have not. UK in a Changing Europe is trying to track the changes to retained EU law, but as we have seen from the Financial Times reports this morning, the National Archives has worked with Government and found an extra 1,400 pieces of retained EU law that the Government did not seem to know about until about last week, so it looks like there are about 3,800 pieces of law. If they found an extra 1,400 pieces after the extensive work that Government had done before that, it makes you wonder whether other things are out there. This is the issue with the sunset being the default position. As a default, it will turn off all retained EU law, even if the Government are unaware of what that retained EU law actually is.
Justin Madders
Q
Professor Barnard: On the first point, listing the provisions that will be turned off avoids those bits of legislation that we do not know about—that is, they have not been found, despite an exhaustive search, including by the National Archives—being accidentally turned off, and our not knowing that they have been turned off until they become an issue down the line in some sort of litigation. One way of avoiding error is to have a list of legislation—it looks like 3,800 pieces of legislation have been identified—and to say, “This is the legislation that is potentially subject to the sunset.” If you list all those in the statute, it avoids the problem of the missed bits being caught up by the sunset.
Once you have done all that, you can say, “Right, we should consult on those bits of legislation.” I am not in any way advocating, as Stephen Laws suggested, being in stasis and doing nothing—quite the contrary. One of the reasons for Brexit was to think about how we can have laws that are more suitable for the United Kingdom. The trouble is that this slash-and-burn technique means that proper consideration is not given to what a future rulebook might look like.
Justin Madders
Q
Professor Barnard: Absolutely. I am in no way advocating for no change—quite the contrary. However, the trouble is that the rather brutal approach envisaged by the sunset clause, and the lack of clarity about how the delay process in clauses 1(2) and 2 will work, will generate huge amounts of uncertainty for users. Unlike Stephen Laws, I would say that these laws cover things as fundamental as gas equipment safety and food safety—what goes into food and the listing of foods. These are things that people absolutely take for granted. The idea that manufacturers will carry on respecting the law even when they are no longer required to because the laws have been simply turned off is, I am afraid, for the birds. All businesses need to try to cut costs, and they will not necessarily comply with high standards in the absence of legislation telling them to do so.
The Chair
Professor Young, did you want to add anything?
Professor Young: To confirm what Professor Barnard was saying, it is important to recognise that although we have had six years to think about which laws to keep and which to remove, we have to put that against a backdrop of those not having been six usual years. We have also had to deal with covid, which generated lots of difficulties, and we are now dealing with energy crises and austerity. I fully accept that there is a need to think about which laws we retain and which laws we change, and that we need a period in which to think about that, but you have to recognise that there are other things on the legislative agenda that might make it difficult to have a complete list of all of them.
I agree that having a list of those laws that we have found will increase legal certainty. It would then also always be possible, once others are found, for the Government to enact regulations and say, “These regulations will be subject to the sunset,” or “These will be subject to a different sunset.” That would give us much more clarity, while still enabling us to change laws to build on the advantages brought by Brexit.
Ms Ghani
Q
“alien to the UK constitutional system”.
As a creation of the Court of Justice of the European Union, it
“sits uncomfortably with established constitutional principles”
in the UK now that we have left the EU. Is it inappropriate for a non-EU country to still have instances where EU law takes precedence over its law?
Professor Barnard: Thank you for that question, Minister. Yes, at first sight, it looks rather unusual to have the notion of supremacy of EU law. You are absolutely right that it was a creation of the Court of Justice. That said, the 2018 Act essentially gave a parliamentary imprimatur to the principle of the supremacy of EU law in respect of retained EU law. Supremacy comes with quite a lot of baggage attached. Thinking about what supremacy means, it is essentially a conflict-of-laws rule—we have loads of them in the legal system. Where there is a potential conflict between two blocks of rules, a conflict-of-laws rule says which one will prevail in which circumstances.
The 2018 Act says very clearly that, in respect of pre-Brexit UK-retained EU law, if there is a conflict with EU law, EU law will prevail for the time being. However, there is absolutely nothing to stop Parliament legislating to reverse that in the future. The purpose of the 2018 Act was to ensure clarity, legal certainty and continuity. You have continuity with the snapshot approach taken by the 2018 Act. If you turn it off, which, of course, a sovereign Parliament is absolutely free to do, there will still be issues about how to manage conflicts between the rules. Indeed, the Bill makes provision for the supremacy provision to be turned back on if a Department decides it is necessary in its particular area.
Ms Ghani
Q
Professor Young: Thank you, Minister. It is a matter of recognising that EU law tends to be drafted by setting out the purposes that it is meant to achieve in certain circumstances. Directives have a different format from regulations; they set out the aims and purposes, and allow member states discretion in how to implement them, which is why so much of retained EU law is secondary legislation that was enacted by the UK to implement particular provisions of directives. In that sense, it tends to be drafted in a slightly different style. You also have to recognise that its main aim was harmonisation, so that might influence how it was drafted.
While the UK was a member of the European Union, we got used to understanding how EU law was drafted, and to interpreting it in line with background EU law principles, including the general principles of EU law. Obviously, one of the things this Bill will do is switch that off. You then have to think about how, without those general principles, we will interpret any of the retained EU law that becomes assimilated or is retained by regulations. We might have to think about not just retaining particular provisions through regulations, but whether we need to add elements to amend them or make them clear, so that we have a fuller understanding of how they are meant to apply in certain circumstances.
Peter Grant
Q
Professor Barnard: The simple answer is no; I am completely unaware of any precedent for this. Of course, that does not mean that we cannot try to adopt this approach, but we need to be extremely mindful of the associated risks. That is one of the reasons why we have proposed carving out areas, such as environment and social policy, that are already subject to obligations under the trade and co-operation agreement. That will ensure that we do not accidently turn them off but not turn them back on again through the powers in clauses 1(2), 2 or 12 to 15, and so will ensure that we are not subject to the trade and co-operation agreement’s dispute resolution mechanisms, which may result in tariffs being imposed on us.
Peter Grant
Professor Young, I saw you nodding. Is there anything you want to add? Do you agree with Professor Barnard?
Professor Young: I agree. I too am unaware of any process that has tried to make such a big change to so many laws in such a short period. That is why it could impose so many practical problems. In most systems, when you have a change of legal system or regime, there is this element of what we did originally, which maintains legal certainty by retaining the old provisions. Then, step by step, in what we often call a sector-specific approach, there is a detailed assessment of whether we should keep those laws or change them. As far as I am aware, this is quite a novel way of doing this with such a large amount of law.
Peter Grant
Q
Professor Young: It is not necessarily that I am reluctant to change or am concerned about change. We need to think about what this is asking against the backdrop of what we are aiming for in the Bill. You have to recognise that the difficulties of uncertainty will be not for lawyers, but for those trying to carry out business. Those carrying out business and trade need legal certainty, so that they have an understanding of the rules, now and going forward. As for the elements and problems of uncertainty, we do not necessarily think that things will be uncertain because they are changing; the issue is that those carrying out business will not necessarily be 100% sure whether things will be retained in the long term. If so, how they will be retained? Has everything that might be revoked been listed? They are not 100% sure whether it has been revoked or not.
Other provisions in the Bill might further that uncertainty. For example, under the Bill, legal officers can refer an issue to the court if they think that a decision should have changed the interpretation of a particular piece of retained or assimilated EU law but did not. That can happen after the agreement has been included and the decision has been made by the parties. You might think, “Well, the Bill says that is not a problem because it won’t affect the result between the parties,” but you have to recognise that others in the legal system will have seen that case, and that interpretation of the law, and will have perhaps planned their business on that basis. They will suddenly find that there is a reference to the court that might change how the law is interpreted or what it means.
That is why we are concerned about certainty. We are concerned about the consequences for those carrying out trade, because they need legal certainty to plan their business activities.
Peter Grant
Q
Professor Barnard: I would just say that the business of legal academia is forever to be making proposals to change the law, to try and improve it in some way. The idea that lawyers are hostile to change is just not correct. The way in which the legal system has worked and has run successfully over the decades is on the basis of incremental change rather than this really quite remarkable slash and burn approach proposed by the sunset clause.
Stella Creasy
Q
It would be quite helpful to know, with the extra 1,400, who has drawn the short straw? Are they all in one particular Department or across the Departments? A previous witness claimed that there would be adequate parliamentary scrutiny, and if Parliament did not like what Ministers were doing, it would intervene. What would this process mean for our ability to influence the content produced as a result of the Bill?
Professor Barnard: On the first point, as you rightly point out, there are provisions in the Bill to allow Ministers, by regulations, to keep retained EU law, which will eventually be called assimilated law, but what is not at all clear is the process by which the Minister decides to engage in that process. Remember, if the Minister decides to sit on his or her hands, the default kicks in, which is that those all those provisions will go. In reality, we understand that Government Departments have a reasonable idea of the law in their area, and civil servants will need to go through that law statutory instrument by statutory instrument.
There is a real issue about capacity in Government Departments. Jacob Rees-Mogg himself said that his own Department for Business, Energy and Industrial Strategy had identified that it needed 400 civil servants to be working on the 300 or so pieces of legislation that had then been identified. Presumably, now they have discovered an extra 1,400 that number will increase. It is a huge amount of civil service time. The issue is even more acute in the Department for Environment, Food and Rural Affairs, which is the Department most affected by retained EU law. The question is, what is the internal process? Even if the Secretary of State in DEFRA decides that he or she wants to retain all the legislation because it is so important in different forms, what happens? Does it go to the Cabinet? Is there some sort of star chamber that looks at what is being proposed by the Departments? We know none of that, and we know none of the detail about whether there will be any consultation with external stakeholders, which is particularly important in the field of agriculture, where a large number of stakeholders are affected.
Stella Creasy
Professor Young, do you want to add anything?
Professor Young: We also have to think about how ministerial Departments will liaise with each other, because those different Departments might be looking at the same statutory instrument that might regulate bits that fall within the ambit of their respective Departments. Something will also be required in Government to keep track of that and to work out what the process should be.
With regard to parliamentary scrutiny, under the Bill the default position would be the negative resolution procedure. Obviously, there are some exceptions, for example, if a measure is used to modify primary legislation, to create a power to enact subordinate legislation or to create a criminal offence in certain circumstances. There is an ability to bump that up to the affirmative resolution procedure, but it will be very difficult for Parliament necessarily to keep track of all this, because so much is coming through. As I am sure you are all aware, it is very difficult for either of the Houses to actually pass a resolution to say that they disagree with a particular provision. Because of the demands on parliamentary time, it will be even more difficult when you have so many provisions coming through. Although there is a process for parliamentary oversight, it will be difficult in the timeframe to ensure that that oversight can be exercised in a manner that enables Parliament properly to scrutinise the measures as they come through.
Stella Creasy
Q
Professor Young: Exactly.
Stella Creasy
In your opinion, then, the ability of parliamentarians, as opposed to Ministers, to influence what laws come next, if they are enacted at all, is limited. Can you suggest, or are there examples from your experience, how parliamentary scrutiny could be strengthened in this Bill?
Professor Young: Obviously we have elements that we saw under the European Union (Withdrawal) Act 2018, which allowed for aspects of enhanced scrutiny in certain circumstances as well as the ability to exercise the affirmative resolution procedures. There can be procedures that you can use whereby you put forward drafts of delegated legislation and allow parliamentarians to scrutinise them. Obviously it is difficult to set that up and to have the time to do so.
I think we need to think about two issues. First, we need to think about what is the appropriate procedure that enables parliamentarians to have adequate scrutiny and we also need to think about how we ensure that parliamentarians have sufficient time to perform that scrutiny. That is why you accurately quoted the information relating to the last time that either the House of Commons or the House of Lords voted against a particular resolution. Perhaps that shows the very great difficulty of actually achieving the time to get that on the parliamentary agenda.
Stella Creasy
Q
Professor Young: Yes.
Stella Creasy
Q
Professor Young: That’s it; absolutely. The only way perhaps to get around that would be to ensure that different departmental Select Committees could go away and look at the area of their law, and perhaps write reports to propose that there should be changes or provisions should be retained or revoked. Obviously, that would only be a report and not necessarily something that a Minister would have to follow in any way, shape or form.
Professor Barnard: If I may just put a footnote to your questions, of course if Parliament did decide to vote by resolution against a statutory instrument, that risks running out of time. Therefore the default kicks in and the sunset kicks in, so you lose a measure all together.
Alex Sobel
Q
Professor Barnard: The Financial Times reports, and indeed the Mail on Sunday report, which is where the story about the extra 1,400 pieces originated, just talk about 1,400 pieces; they do not talk about the fields in which they fall. By definition, however, given that DEFRA already has the largest group of retained EU laws—it is about 500 and something—DEFRA is very likely to be affected by the discovery of an extra 1,400 pieces.
On your question about the Northern Ireland legislation, as you know, annex 2 of the Northern Ireland protocol lists all the areas of EU law that will continue to apply in respect of Northern Ireland on a dynamic basis. Clause 1(5) of the Bill contains a rather general and ill-defined carve-out for Northern Ireland legislation, but it is not clear because, as you will be aware, the Northern Ireland Protocol Bill is also going through Parliament at the moment, which will turn off a large amount of the EU legislation that applies in respect of Northern Ireland—all the annex 2 legislation. Other bits of legislation still apply, particularly in the field of equality law and social policy, but you have this generic and rather vague exclusion in respect of Northern Ireland in clause 1(5).
Professor Young: I have nothing to add.
Alex Sobel
Q
Professor Young: I agree that it is a real danger, because obviously a business takes business-based decisions. If a particular regulation that was perhaps making you not as competitive disappears, you might find ways of not following the old regulation because it might give you a competitive advantage in certain situations. We need to think about this against the backdrop of the United Kingdom Internal Market Act 2020, which provides that, if a good can be marketed in one component part of the United Kingdom, it can be marketed in any other component part of the United Kingdom. That will also incentivise what we call a race to the bottom—the idea that you will have a competitive advantage if you are not following other regulatory burdens that might make your good less competitive. If you are aware that you do not have to follow that, not only will you decide not to do so, which might give you a competitive advantage, but it might put others at a disadvantage across the 2020 Act. You can sell your good across the UK because you are adhering to a lower element, and it is lawful to sell it in one component part. I think that there is a real risk that people will not follow the former rules and regulations.
Professor Barnard: I think Sir Stephen Laws takes a very benign view of human and indeed business nature. If there is an opportunity to save costs by not complying with rules, businesses will take it. The only thing I would add to that is that businesses that are doing most of their trade with the EU will still be required to comply with EU rules, otherwise they will not be able to sell their products on to the EU market. Business that are part of supply chains that feed into the EU market will still have to comply with EU rules. Perhaps he is right there that there might be voluntary compliance, but it is actually market-induced compliance rather than absolute voluntary compliance.
Stella Creasy
Q
Professor Young: The problem with that particular provision is that it is that element of not reducing burdens, which includes elements of administrative inconvenience, as well as obstacles to trade or innovations or obstacles to efficiency, productivity or profitability. The difficulty is what would or would not be increasing burdens in these circumstances. On the one hand, you are right; this is incentivising a reduction in these burdens and the potential follow-on we would see is a reduction in standards, particularly because it is looking at obstacles to trade or obstacles to efficiency, productivity and profitability. Another way of potentially reading it is to say that if I take a number of earlier burdens, turn them into one burden with a higher standard, that is also not increasing the burden. The difficulty is that the clause could be quite ambiguous, which could, in some senses, perhaps alleviate some of the risk that that might incentivise towards removing burdens. However, that is going to leave these particular measures open to potential legal challenges because people will argue “This has increased my burden in these circumstances.” That, in turn, could add to legal uncertainty.
Stella Creasy
Q
Professor Barnard: Yes, you are absolutely right. That is one of the reasons we proposed carving out, for example, environmental law and employment law, because those are the two areas that are subject to the so-called level playing field provisions in the trade and co-operation agreement. We are free to lower our standards—that is our choice—but if we do and, depending on the provision, that materially affects trade between the UK and the EU, the EU can start the dispute mechanism in the TCA. In respect of the so-called rebalancing dimension in the level playing field, the retaliation is brutal, quick and immediate.
Justin Madders
Q
The Chair
Professor Young, you look like you are about to burst forth.
Professor Young: Sorry, I could not quite hear who you were asking. It would be for the Minister to decide, when they are deciding to make a regulation, whether they do or do not think it will or will not increase a burden. There is a possibility for the Minister to make a statement, but there is no requirement to do so, and it will be up to parliamentarians when they see that particular measure to scrutinise it. If you think it imposes a burden and you are concerned about it, you could use the negative resolution procedure to vote against it.
The Chair
Professor Barnard, did you want to add anything in 20 seconds?
Professor Barnard: No, I agree.
The Chair
Thank you very much, both of you, for the clarity of your evidence. We are now moving on to our next group of witnesses. Thank you to those from Cambridge.
Examination of Witnesses
Martin Howe KC and Tom Sharpe KC gave evidence.
The Chair
We are now moving on to hear more evidence in person, from Martin Howe KC of 8 New Square chambers and Tom Sharpe KC of 1 Essex Court chambers. In this session, we have until 10.55. Please introduce yourselves for the record; Martin, would you like to go first?
Martin Howe: I am a practising King’s Counsel, principally in the field of intellectual property law, and formerly European Union law, mainly in the field of free movement of goods and services—cross-border freedom to trade. That is my professional background. I became chairman of a group called Lawyers for Britain, which was set up during the referendum campaign to campaign among the legal profession for a leave vote. I wish we had been able to wind it all up—job done—but we still exist and I am still the chairman.
Tom Sharpe: I am Tom Sharpe, King’s Counsel. I spent too long as an Oxford don, but I have been in practice for quite a long time. The nature of my teaching at Oxford and my practice was heavily European law, which I now put in the semi-past tense. I have appeared in the European Court quite a few times. The central core of my practice has always been the regulatory area—competition law and state aids—but I have done quite a lot of judicial review work, attempting to overturn EU regulations and misapplied and misadopted directives. I, too, am a member of the Lawyers for Britain group, and Martin and I made submissions in Miller 1 and Miller 2.
Justin Madders
Q
Justin Madders
I am indeed. It is the best type.
Tom Sharpe: The honest answer is no. However, your excellent House of Commons research paper does indeed advert to this and describes the justification, which I have forgotten.
Justin Madders
Q
Tom Sharpe: Slightly different between case law and—
Justin Madders
Yes.
Tom Sharpe: Shall I kick off? I know that Martin has some fairly strong views on this. What the Department is trying to do here is to provide some illustrative guidance as to the reasons why people can depart. They could have done nothing and left it open to the court, which would have been unsatisfactory. By and large, judges, like all of us, need some help and guidance. As to the differences, the justification is the TuneIn case, Martin, is it not?
Martin Howe: Warner against TuneIn, yes.
Tom Sharpe: Why don’t you pick this up? It is your area.
Martin Howe: One feature of the 2018 Act, as you know, is that it made European Court judgments continue to be binding after exit in the interpretation of retained EU law. I would have preferred to see them just as persuasive authority from the beginning, but that is what the Act said. It gave only a very tiny exception, allowing the Supreme Court and the High Court of Justiciary in Scotland to depart, but only in circumstances where they would depart from their own previous decisions. It was extremely narrow. That was slightly widened by a statutory instrument under the 2020 Act, which expanded that to the Court of Appeal, the Inner House of the Court of Session in Scotland and the Court of Appeal of Northern Ireland, but it still had a very narrow test. I do not think, even if you got rid of all these restrictions, that the judiciary would actually make very many changes to or departures from legislation.
That comes out from the TuneIn case, in which the Court of Appeal considered a very unsatisfactory area of jurisprudence by the Court of Justice—a very technical area on communication to the public in copyright cases—and did not feel that it wanted to depart from that law, basically because it thought that to do that you have to almost legislate to fill in what you are replacing the judgments with. Judges are naturally reluctant to do that. My view of these provisions is that they are helpful. They slightly widen the circumstances in which there can be a departure, but are unlikely to make much practical difference. They will mean very few cases that see actual departures.
Tom Sharpe: May I add a supplementary? In answer to your specific question, clearly, the case law, which is the second provision in clause 4, is much broader. All sorts of case law is affected, and some would say infected, by European principles. What this is simply doing is inviting Parliament to say that the breadth of review can be triggered by any impact or any influence. It is really very broad—“determined or influenced by”. I think that is the justification for it, and I think it is sound. What is the point of having an imperfect means by which higher courts can be seized of these matters if they are important enough to go up to the higher courts?
Ms Ghani
Q
Tom Sharpe: It is not the right time at all. This should have been started in 2016, and certainly the dashboard—the process of creation—should have happened then. When—or if and when—this is enacted, it will be, what, six years since the referendum? That is a very long time; it will probably be seven years when the Lords get hold of it. It seems to me that the promises that were made in the referendum and the obligations owed to those who voted for Brexit, which in turn, of course, were repeated in the 2019 election, have to be redeemed. It seems to me that it is appropriate for that to be done, and to be done by a means whereby good faith can be applied—that is to say, a balance between speed and comprehension, balancing the requirements of Government in order to get the legislation on the statute book with the interests of Parliament and the interests of stakeholders. It seems to me, as a general rule, that this is actually what it does.
Ms Ghani
Q
Martin Howe: I think the Bill is desperately needed. The flaw with the 2018 Act is that it was clearly necessary to preserve what is now retained EU law on an interim basis until it could be reviewed and either kept or replaced or modified, but what was not necessary was making it impossible to change most of it except by Act of Parliament, which is what the 2018 Act did, and also to import a whole load of EU law doctrines on top of the legislation. It was all said to be for the purposes of legal certainty. In my view, it does not add to legal certainty; it generates legal uncertainties and allows vague things to be argued.
I have had a look to see what progress has so far been made in changing the vast body of EU retained law. There is one important Bill going through the Commons now, the Financial Services and Markets Bill, which would deal with that field, where we put in place our domestic policy choices.
There are also two further Bills that I have identified. One dealt with the Vnuk case, which was a case in the European Court that interpreted the motor insurance directive—in my view, misinterpreted it—to say that it applied to off-road vehicles, so things such as farm tractors would be compulsorily insured. That has now been corrected in our law, but only via a private Member’s Bill, which became an Act in April when the Government lent parliamentary time to the Bill. I think that the Government estimates are that it would have cost £2 billion per year—mainly to farmers, I suppose.
The other Bill, which is actually more important, is on the gene editing matter, where the European Court, in the case between the French peasants collective and the French Government, decided that the genetically modified organisms directive covered gene editing. Now, gene editing is a different technique from genetic modification. There is a lot of criticism of that judgment. It was completely unexpected and had very damaging effects, particularly on the life sciences industry in this country. That is subject to correction by a Bill that has just finished its Commons stages and has gone to the Lords.
Those are just two interpretations of two bits of EU law. That shows the complete impossibility of performing this exercise by primary legislation, and therefore how essential it is to have the statutory instrument power in the Bill. It is important to appreciate that the statutory instrument power does not apply to primary legislation, so Acts of Parliament that were passed in compliance with EU obligations are not within scope; only the secondary legislation is covered.
Ms Ghani
Q
Martin Howe: Well, it does. It is comparable to the parliamentary scrutiny that section 2(2) of the European Communities Act 1972 allowed when most of these measures were introduced.
Ms Ghani
Q
Tom Sharpe: I see the Bill as a framework Bill. Of course, it gives Ministers and Departments very considerable powers—powers of proposal, as you know, to amend, revoke or replace existing legislation.
As Martin has just said, an Act of Parliament, which was probably passed—if I may say so respectfully—before many of you were born, provided an enabling power to enact legislation of some quite sweeping character. Despite all the things that law students learned about how Parliament needed to approve legislation, not one single regulation—this is one of the bits we are discussing—has ever been debated, approved or amended by the House of Commons or Parliament. That is a striking statement, but it is absolutely true. We were forbidden, in law, to debate or amend such legislation. I suspect you all know that, but it does not hurt to be reminded.
As for the directives, of course they, too, were approved by Parliament—or, more accurately, not disapproved—but the power of Parliament was utterly residual because the objective of a directive had to be observed. If it was not, the UK would be subject to proceedings from Brussels—and it was, on occasion, but not as often as many other countries.
We are now debating a system of revocation, amendment and replacement, and giving it far more formality than we gave the creation of the laws themselves. That ought to give us pause for thought. That is the background. As far as parliamentary scrutiny is concerned, yes, most of it will be subject to negative resolution, and it is easy to make what I will disrespectfully call a good debating point about the times when statutory instruments have fallen under the negative procedure. But here, we are dealing with a sea change. We are dealing with masses of legislation, as we know, all of which will be subject to significant scrutiny within the House of Commons by parliamentarians and by the press. It seems to me that those issues have to be given notice. There is also the sifting procedure that we adverted to earlier, which I think could be quite a powerful brake on Ministers’ discretion.
Peter Grant
Q
Tom Sharpe: Where do we start?
Martin Howe: I am concerned by the attitude taken by the Bar Council. As a subscribing member, I fear that it is trespassing rather too far into political issues. Unfortunately, I think there is a sort of small “c” conservative lawyer’s mentality, which has led over time to various things, such as counsel saying in the “Lady Chatterley’s Lover” trial, “Members of the jury, would you allow your wives or your servants to read this book?” Since so many members of the Bar are imbued with the system of working with European Union law—it is all part of their practice and the way they operate—there is a natural mental attitude towards keeping it. I do not think that reflects the necessities of the democratic process following the referendum result.
Peter Grant
Q
Tom Sharpe: It is our trade union, and it does not speak on my behalf on this political matter, very obviously, and it should not have done that. I think there is a broad issue here. If you look at the criticism of the Bill by the Bar Council and by members working with it—the Hansard Society, which got a mention, and various leading members of the Bar whom I know very well; they are my friends and I respect them—the dominant theme is one of extreme pessimism. That is to say that if we have a mendacious Government, a supine Parliament and a lazy and ignorant press, all sorts of things can happen. Now, I do not think that is true. I have far more respect for this House, and even for Ministers and the press. If Ministers are getting out of hand, they will be put in check. If they are not, the judiciary has a role in reviewing the exercise of these powers. We can ignore the judiciary in this context, but it has an important residual role.
We can call it benign or naive, but I do not think that is right. I think that by and large the House of Commons does a pretty good job, and I see no reason at all why it will not continue to do so in relation to this important Bill.
Peter Grant
Q
To go back to the comments you made earlier about the difference between primary and secondary legislation, when was the last time Parliament amended a piece of secondary legislation?
Martin Howe: It does not. The procedure is a yes/no procedure either by affirmative resolution, in which case there has to be a positive vote or it fails; or by negative resolution, in which case, unless it is prayed against and there is a vote against it, it stands.
Peter Grant
Q
Martin Howe: Indeed. By its nature, there is much less opportunity than with a Bill, which you go through line by line, but all the legislation that is within the scope of the Bill to be potentially corrected, changed or left out by secondary legislation was introduced by secondary legislation. The primary legislation is not covered by the powers.
Tom Sharpe: Remember what we are discussing. I think it is very unlikely that there will be a wholesale slash and burn—to use the academic term that we heard earlier—of all EU retained legislation or assimilated legislation; a good deal of it will remain. I do not recognise the gloomy picture of businesspeople clawing their way to the bottom. I understand the theory, but in the course of a year I advise dozens of CEOs and chairmen, and not one has said: “We have a terrific opportunity to make extra money out of the consumer.”
What is missing here is public scrutiny and reputation, and we have to be balanced and less shrill about this: not everything will change; not everything will change at once; and some things will be changed—in particular under clause 15(3) where, respectfully, the real issues arise for parliamentary scrutiny. There, as you heard, some will be determined by affirmative resolution and others will go through the sifting procedure, which requires the Minister to come to Parliament to justify the choice of a negative procedure. You will have an opportunity to deal with that.
Stella Creasy
Q
Martin Howe: The argument I was putting forward was for a practical way to speed up the process. Frankly, it was a suggestion that I floated, a possible—
Stella Creasy
Q
Martin Howe: What I was then proposing was not so much a scrutiny mechanism as a sort of motor to get the process going—
Stella Creasy
Q
Martin Howe: No, because the main thing—the important thing—is to get the job done. What I am disappointed about is that I published a paper in July 2016, a month after the referendum, arguing that we should start a systematic process of review of European Union laws. I naively suggested that that would be with a view to revising what we needed to revise by the time of exit two and a half years later—
Stella Creasy
Q
Martin Howe: No. I was naive to think that the process of revision would be started. I share Tom’s view that it would have been better had this process been started earlier, but it does need to be done.
Stella Creasy
Q
Martin Howe: Well, it is a matter for Parliament as to what you press Ministers on with regards to their plans and intentions.
Stella Creasy
Q
Martin Howe: To be clear, I was not suggesting that they be retained in the long term. Those areas need revising and converting into coherent UK-based law. Elements of EU law should not be retained into the indefinite future.
Stella Creasy
Q
Martin Howe: Sorry, I have not changed my mind on the relationship between retained EU treaty law and other EU law. The point is that that should be converted into domestic law, but our domestic legal system can cope with the question of precedence of one law over the other. I have never been in favour of indefinite retention.
The Chair
Stella, you have asked a lot of questions. We are moving on, and we will come back to you if there is time.
Mr Marcus Fysh (Yeovil) (Con)
Q
Tom Sharpe: The general point is very well made, if I may say so. It seems to me that that type of exercise—that kind of inclusive thinking about making the country more efficient and getting rid of silly regulations—would be valid even if we were not dealing with the Bill.
One of the problems with the Bill is that it is a framework Bill, and I can see a quite compelling case for eliminating some of the opacity that surrounds the Government’s intentions. It is early days, and the Bill is just a Bill. I do not think it would be enhanced by Ministers detailing in fine print exactly what is to be done, but there is a case for some ministerial guidance as to where the priorities should lie.
As for doing away with dud regulation, I find it amusing to read the submissions to Government. This is an important point about consultation. My understanding is that there have been thousands of responses to the dashboard—I think I am right in that. That is an element of public consultation. It is amusing to me to see that so many bodies that campaigned remorselessly against some of the EU legislation that we had no control over now resolutely do their best to try to preserve it. With a little more honesty, they would have been more compelling, I think.
Mr Fysh
Q
Martin Howe: That is helpful and it sounds like a good idea. Whether it ought to be spelled out in the Bill is a different question, because there needs to be a certain amount of flexibility over these processes. Certainly, involving outsiders in looking at these issues, as opposed to doing it as a purely internal measure within Departments, strikes me as beneficial.
The Chair
Gentlemen, thank you for your evidence. Our time is now up. Thank you once again for being with us.
Examination of Witnesses
Mark Fenhalls KC, George Peretz KC and Eleonor Duhs gave evidence.
The Chair
We will move on to our final group of witnesses for this morning. Of course, we have a long afternoon ahead of us. We will now hear oral evidence from Mark Fenhalls KC, chair of the Bar Council. I wonder whether he was listening to the previous panels.
Mark Fenhalls: I was listening, Chair.
The Chair
Excellent.
Mark Fenhalls: I am very much looking forward to trying to do my best.
The Chair
I am sure you will do a great job. George Peretz KC of the Bar Council’s working group on retained EU law is joining us via Zoom. We also have Eleonor Duhs, partner and head of data privacy at Bates Wells, here in person—I hope that was the correct pronunciation of your name.
Eleonor Duhs: It was, yes.
The Chair
For this session we have until 11.25 am. George Peretz is not here yet, but if he does appear we will ask him questions as well. We turn to Justin Madders to start.
Justin Madders
Q
Mark Fenhalls: There is nothing but risk. I will tell you one brief anecdote to illustrate this point. Last week I was at an international conference, working with the Ministry of Justice on selling legal services overseas, and talking to lawyers and Bar leaders from around the world. They asked me what this country’s intentions were around its laws following the departure from the European Union. I explained that I have no difficulty with change; change is a necessary thing. We all hope there is a sunlit upland where we can find better or fewer rules and regulations in the future. But when I explained about the inherent uncertainty and risks around this, they all looked and me in horror and said, “Why would we do any business with the UK”—until 2024 on the current timescales—“if we don’t know what the rules and regulations are going to be around all these issues?” There is a tremendous problem with this Bill, which was described by previous witnesses as a “framework Bill”, because we do not know what Ministers are going to do and Parliament does not have the opportunity to take control of the process or scrutinise it.
In our judgment, the Government should take the approach referred to in relation to the Financial Services and Markets Bill, where it looks as though considered, measured changes are being put forward, and there is an undertaking not to change the rules and regulations without consultation with the sector. We cannot understand why financial services are the subject of such a responsible, measured approach, which does not seem to apply to consumer protection, cosmetic and household cleaning product safety, water and air standards, and so forth. If the Government could take the same measured response, sector by sector, that would be a more sensible and less risky way to proceed.
Justin Madders
Q
Mark Fenhalls: I am no expert in how much civil service time exists, but I would be astonished if it were remotely possible to cover but a fraction of this. I do not know why it is set up as anything other than a political problem. The reality is that this is our law. It was passed over four decades of membership while we were a part of the European Union. The previous witnesses may not like the process of scrutiny that existed, but we were part of that. We had MEPs and a Parliament that dealt with that. There was a democratic process, like it or not.
We now have a different democratic process, but these laws are part of our laws, which our businesses operate by and which provide protection to our citizens. If I may say so, I think Parliament has a responsibility not to import uncertainty and change without showing there is something better—and certainly not by just having the power to let the laws lapse.
Eleonor Duhs: Perhaps I could add something on the timeframes. In order to get the statute book ready for Brexit, which was in some ways a much more simple task than this, it took over two years and over 600 pieces of legislation. The reason I say it was a simpler task is that we were essentially making the statute book work without the co-operation framework of the EU. We were taking out references to the European Commission and replacing them with “Secretary of State”—that sort of thing. That was a much simpler task than what we have here, and that took over two and a half years.
A lot of areas also have several pieces of amending legislation. In data protection, which is the field that I work in, there are at least three pieces of legislation that amended and then re-amended the statute book—just to get it ready, from a technical perspective, for Brexit. There may be huge policy changes under this legislation, and the end of 2023 is simply not a realistic timeframe for the process.
Justin Madders
I see that George Peretz has joined us. I do not know whether he wanted to respond to any of the questions first of all.
The Chair
Yes, Mr Peretz, welcome. Did you hear the questions that were asked?
George Peretz: I had a slight technical hitch in joining. I was going to make a point about the effect of the sunset clause. Stephen Laws made the point that law reform is necessary and it happens, and one should not get stuck in defending the status quo. But there is every difference between a Government saying, “Here is the existing law, we propose to replace it with legislation, and here is the text of the proposed reform,” which is the normal process of law reform, and what is happening here. The Government are effectively saying to business and the wider world, “All of this law is open to change; we cannot tell you whether we will keep any of it. Some of it may just disappear, it may be replaced, and we cannot yet tell you what the replacement is. All of this is going to happen in 18 months.” That inevitably produces an enormous amount of uncertainty, and that is uncertainty above and beyond the inevitable uncertainty of law reform.
Justin Madders
Q
Mark Fenhalls: I am not privy to any of that correspondence; I cannot help with that. I do not know whether either Ms Duhs or Mr Peretz is familiar with it.
Eleonor Duhs indicated dissent.
Ms Ghani
Q
Mark Fenhalls: I am sorry if you think I am going on about it. All I am doing is saying that there was a democratic process, which we were party to for several decades: we were members of the European Union, and we followed the lawful processes. We now have this body of law, which Parliament owns, and we are all looking for an opportunity for Parliament to say, “Let’s now take advantage of our departure from the European Union, put aside the conflict of the past and work out a better way.” We are all delighted by that. None of us is hostile to change. We just want change in a measured and balanced way, so that we know what the alternatives are.
The effect of the Bill—I was thinking about it as I listened to the previous speakers—feels a bit like the uncertainty and the uncosted promises made by the former Chancellor, which so disrupted the bond market. [Interruption.] You asked the question, Minister. The difference between that and the Bill is that we are being told to trust Ministers to see what will happen, and we have no idea what they will do. We have no idea what is being left or what will be changed. There is conflict between current Bills before Parliament, such as the Levelling-up and Regeneration Bill, and the Bill we are discussing, and we do not know how the Government propose to address it.
Peter Grant
Q
Mark Fenhalls: I am not a parliamentarian or a politician. The short answer to that is that I do not know, but I do know that every single stakeholder and lawyer I have spoken to—who are simply thinking about their clients’ business interests and the rights of the people involved—wants to know what the alternative proposals are before they take a view. The difficulty with this Bill is not change, because change in itself is fine; it is the fact that we do not know what the proposals will be. We have suggested what we suggested in our submission and we have put in fall-back positions saying that if the Bill is to proceed, we should put in place scrutiny measures or duties on Ministers to come to the House and say, “This is what we propose to do,” and not run the risk, for example, of the sunset causing us to crash into the wall at the end of next year.
Peter Grant
For the record, there are two lawyers sitting behind you who quite clearly do not share the view that you just expressed about the various lawyers you have spoken to. Some of us think that lawyers argue with lawyers all of the time; that is what they are there for.
The Chair
Before we continue, I think Mr Peretz wanted to come in on that point.
George Peretz: I wanted to come in in response to the Minister’s question about section 2(2) of the European Communities Act 1972. There are two points here. One is the point, developed by Martin Howe, that it considerably underestimates the degree of democratic scrutiny that EU law actually had, particularly in the European Parliament and on the reform of EU law. It also understates the mechanisms that Parliament had to scrutinise how Ministers acted in the Council of Ministers.
I suppose one is getting slightly political here, but perhaps the more important point is that one of the arguments for Brexit, as I understood it, was that it would strengthen democratic accountability for legislation. It is slightly disappointing that the argument put forward for the Bill is sometimes, “Well, the EU was undemocratic in this, so you cannot complain that this is equally undemocratic.” We can do rather better than that.
Peter Grant
Q
Eleonor Duhs: I would still have some concerns, because the end of 2026 is not far away and that is what people are saying would perhaps be the revised timeframe.
There are some really significant things in this Bill in terms of changing the way in which the law works. I will give an example from data protection law. Clause 4 would change the relationship between retained EU law and domestic law. To show what that might mean in practice, I will give the example of a conflict between the UK general data protection regulations and the Data Protection Act 2018. This is not addressed by the provisions that Mr Madders asked about; that is simply about how data protection legislation as a whole interacts with the domestic statute book and is not overridden by it. In a conflict between the UK GDPR and the Data Protection Act 2018, if we remove the principle of supremacy, for example—which is what the Bill seeks to do—we could end up reducing data protection standards in the UK. That could cost UK businesses up to £1.6 billion and significantly increase red tape, so this is really important.
Last year there was a case called the Open Rights Group case, which was to do with exemptions in the 2018 Act that were overly broad. The Court of Appeal said that the UK GDPR had precedence—so this was decided under the retained principle of the supremacy of EU law—and that the provision in the 2018 Act was unlawful. If we had not had that retention of the principle of supremacy of EU law, and had had this new section 5(A2), the 2018 Act would have had precedence and the broader exemption would have applied, which would have reduced rights in the UK.
Why is it helpful for rights in the UK to remain as they were before? Because our current standard of protection of personal data has been deemed by the EU to be essentially equivalent to their standards of protection. That allows a data adequacy decision and, at the moment, the free flow of data between the EU and the UK. If we did not have that—if we lost data adequacy, which could happen under proposed new section 5(A2) in clause 4—UK businesses would have to spend time putting in place contracts and would have to do transfer risk assessments.
The New Economics Foundation and University College London wrote a paper entitled “The cost of data inadequacy”, which they published in November 2020. It stated that losing the free flow of data could cost UK businesses up to £1.6 billion in extra red tape, and it would have other economic implications, including a reduction in UK-EU trade, especially digital trade; reduced domestic and international investment in the UK; and the relocation of business functions, infrastructure and personnel outside the UK. So the Bill could have really significant implications for trade.
Peter Grant
Q
George Peretz: The short time is clearly a concern given the enormous work that will need to be done both in Whitehall and by Parliament if it intends to scrutinise any of this properly within a very short timeframe. A lot of this law is very important, a lot is very complicated, and quite a lot of it is both, so one should not underestimate the resource implications. Obviously, if you have a longer timeframe—until 2026, say—that resource could be spread over a longer period, and perhaps more efficiently.
There are other, wider concerns about the Bill and how it amends the application of some EU rules to retained EU law as it continues to operate, and about Ministers’ power to revoke and replace. Those are separate from the sunset clause concerns, but the sunset clause does interrelate with the question of Minister’s powers. One of the problems with the effectiveness of parliamentary scrutiny is that although one hears that Parliament has powers—in some cases via the negative or affirmative resolution procedures—the background against which it is being asked to approve legislation means that if it votes against that legislation, the sunset clause will apply and regulations disappear completely, rather weakening Parliament’s ability to do anything.
To take an example, if Ministers decided to keep the working time rules but rewrite them to make them less favourable to employees, and came up with the new regulations in November 2023, those rewritten regulations would probably be introduced under the affirmative procedure. However, when the House of Commons voted on them, Ministers would say, “You may not like these revised regulations very much, but if you do not vote for them, the alternative is that we will not have any regulations at all.” That weakens Parliament’s ability to control the exercise of ministerial power.
Alex Sobel
Q
“A plan…to review or repeal all EU laws on the UK statute book by the end of 2023 has suffered another setback after the discovery of 1,400 additional pieces of legislation.”
We were aware of 2,100 pieces of legislation, but that is another 1,400, so we are now seemingly aware of 3,500, with a sunset clause at the end of 2023. Is that the end of it? Will it be 3,500 pieces of legislation or could there be more? How are we going to find and define all these pieces of legislation so that we know what law we are acting under? You have just described qualitatively how pieces of legislation will fall under the negative resolution procedure because they are going to be sunset-claused out. Quantitively, where do you think we are going to end up by December 2023?
George Peretz: One does not know. On your point about the legislation being discovered, like you I have read the story in the Financial Times. I do not know the background to it, but we drew attention in the Bar Council paper to the risk of things simply being forgotten. As that story shows, that is not a hypothetical risk. That is one reason why we suggested as a possible amendment to the Bill that the Government add a schedule that simply lists all the regulations that are going to be affected and if it is not on the list, it does not fall. It is very difficult to see the argument against that. Presumably, the Government want to know what is being repealed. One does not want to repeal things one does not know about. What would be the good of not evaluating the risk? It is very difficult to see why there would be an objection to listing everything out. Then everyone would know precisely what goes and what stays. That was one suggestion we put forward.
It is very undesirable to have the sunset clause—for all the work that is going to have to be done to be done effectively with a gun pointed at everybody’s head saying, “Unless you’ve done all this analysis within a very restricted time period, the rules will fall.” There is just endless room for mistakes.
One of the points we discovered when we were rewriting a lot of EU rules for the purposes of the withdrawal Act—which Eleanor knows very well about and can speak about in more detail—was that, as the legislation was being rewritten, it was discovered that there were problems with it. If we look down any of the lists of amended rules, as one might experience in practice, one normally finds that over the 2018 and 2019 period there were frequent amendments. As one version was done, it was found that there was a problem with it or something needed to be added, and another amendment was made. There just is not time within the process of this Bill for that amendment process.
There is also a technical problem. It is not clear that there is the power once a regulation has been rewritten for Ministers then to say, “Oh dear—we realise that this regulation contains the following defects; we would quite like to amend it now.” I am not actually sure that the Bill contains a power for Ministers to do that. That is a bit of a problem.
Mark Fenhalls: I agree with what George just said. You will know far better than we do the stresses and strains on you as individual constituency MPs attempting to deal with those issues, and what in truth MPs can do as individuals scrutinising material like this. Ministers will know how pressured their civil servants are. I know from my dealings with civil servants how afraid they are of the possible forthcoming cuts. It is very difficult as an outsider to contemplate how the civil service can begin to cope with an assessment of what all this law involves.
The concluding point would be that if you have the list that George spoke to, that is a foundation for a proper ministerial division of responsibility as to who is doing what—which regulations affect which ministries and therefore what should our plan be? By the time we get through the end of next year, we might have dealt with financial services, perhaps, and with regeneration and levelling up, perhaps, because that covers environment and habitat and planning, but with that list and that firm foundation, you can make sensible evidence-based decisions about what to do. The frightening thing about the FT story—again, I know nothing about where it has come from—is the thought as to the unintended consequences, which nobody can possibly want, of not knowing what is out there. That is why, in a sense, a framework Bill is so flawed in its approach, because we do not know what we are dealing with.
The Chair
I have three questions to get in before 11.25 am, so let us have quick questions and quick answers, please.
Mr Fysh
Q
Mark Fenhalls: That is a political accusation that could not be more unfair. That is not the case at all. The short answer to your question is no. Parliament, rather than Ministers, should be making the decisions. That is the democratic point, if I were to engage with you on a democratic level. It does not matter what I did or did not want; I have said to you, and I mean it, that I have no difficulty with change—absolutely none whatsoever.
The Chair
Marcus, you have asked a question and now you are interrupting Mr Fenhalls. Let him finish.
Mark Fenhalls: I want it to happen on the basis of evidence and with better proposals coming. What I do not want is to be lost in a world of uncertainty when we do not know what is coming, because, out of uncertainty, clients and people will stop doing business and they will not know where we stand.
Mr Jones
Q
Eleonor Duhs: Retained EU law is domestic law. We domesticated the statute book, and we did that to provide certainty for businesses, for individuals, for the Government and for users of the law, so that they would know what the law was. That was a policy of maximum certainty. Of course, it is now for Parliament—this was in the White Paper on the European Union (Withdrawal) Act 2018—to look at the law and to decide how it should change. We should absolutely make the most of the opportunities that we have, but it must be done in a thoughtful way. It must not be done in a rush and in a way that gives rise to legal uncertainty, because this is our domestic statute book and it needs to work for all of us. It needs high standards, it needs to enable trade and it needs to be the best post-Brexit outcome that we could have.
George Peretz: I can add something to that. It is slightly unfortunate that the EU withdrawal Act chose to continue what was called the principle of supremacy of EU law, because it is something of a misnomer. As Professor Barnard explained, it is actually a conflict-of-laws rule that gives priority to retained EU law over pre-Brexit statutes. You have to remember that pre-Brexit statutes were passed by Parliament, or made by Ministers, against an understood background that EU law was supreme, so you could say that when Parliament passed a pre-Brexit statute, it expected that statute to be inferior to EU law. It was the sea in which we were all swimming at that point, so I do not accept that there is anything constitutionally objectionable about having the conflict-of-laws rule.
Before you change the conflict-of-laws rule, you also have to think very carefully about its effect. One of the disappointments I have is that nobody in the Government or outside has produced any analysis at all of the concrete effect of removing the conflict-of-laws rule. I have likened it to pushing a very large button that says, “We do not know what happens if you push this button.” That is not a wise legislative technique.
Stella Creasy
Q
All the lawyers have talked this morning about the approach of working with businesses and whether a regulatory burden could be created, which clause 15(5) is designed to avoid. We do not have any business witnesses coming forward, but we have heard that businesses are talking about risk being a drag on growth. Can you give us some examples of where you have worked with businesses with legal uncertainty? You have all talked about uncertainty, but can you explain what it could do to your clients?
The Chair
I am afraid we have 40 seconds left.
Mark Fenhalls: In 10 seconds, an organisation such as TheCityUK, which represents a range of financial services, accountancy, law and consultancy firms, will tell you that all its international clients are saying, “We don’t know what the rules are going to be; therefore, we are troubled.” There are business organisations out there from which you may choose to try to take evidence, and they may be useful to the Committee.
Eleonor Duhs: That is exactly what I am hearing too. They want to invest, but you cannot invest if you do not know what the law is going to be.
George Peretz: This is not my area of practice, but colleagues of mine at the Bar have made that point. If you are involved in a large development project—
The Chair
Forgive me, Mr Peretz, but I have to cut you off because we have reached 11.25 am. It is an existing law that we have to honour. Thank you to our three excellent witnesses. We appreciate your time and thank you for being here in person and for contributing online. Colleagues, we will meet again at two o’clock this afternoon for more fun.
Economic Crime and Corporate Transparency Bill (Ninth sitting)
Tuesday 8th November 2022
(2 years ago)
Public Bill CommitteesRead Full debate Economic Crime and Corporate Transparency Act 2023 View all Economic Crime and Corporate Transparency Act 2023 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 8 November 2022 - (8 Nov 2022)
The Committee divided: - Ayes: 7 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 8 - Question accordingly negatived.
The Chair
Before we begin, I have a few preliminary reminders for the Committee. Please switch electronic devices to silent. No food or drink is permitted except the water provided.
Clause 65
Exemption from identity verification: national security grounds
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kevin Hollinrake)
I beg to move amendment 9, in clause 65, page 55, line 3, at end insert
“and section 167M(2) does not impose any obligation on a company in relation to the person”.
This amendment ensures that where a company director is exempt on national security grounds etc from being a person whose ID is verified, the company can also be relieved from the obligation to ensure that the director is ID verified.
The Chair
With this it will be convenient to discuss amendment 101, in clause 65, page 55, line 22, at end insert—
“(4) The Secretary of State must report any use of the identity verification exemption on national security grounds as provided for by this section to the Intelligence and Security Committee of Parliament. Each report—
(a) made under subsection (4) must include the name of the person and company exempt from identity verification.
(b) must include the Secretary of State’s reason for granting exemption on national security grounds.”
This amendment would place a requirement on the Secretary of State to report any use of the identity verification exemption on national security grounds to the Intelligence and Security Committee.
Kevin Hollinrake
It is a pleasure to serve with you in the Chair, Ms Bardell.
Amendment 9 is a technical amendment. Clause 65 enables the Secretary of State to exempt a person from identity verification requirements by written notice, if necessary in the interests of national security or to prevent or detect serious crime. The consequence of someone being subject to such a written notice is that they will not be obliged to observe certain rules. For example, an unverified individual benefiting from an exemption will not need to refrain from acting as a director and will not be liable for an offence for acting as such.
The amendment clarifies that companies whose directors are exempt from the prohibition to act when unverified are relieved of their duty to ensure that such a director has their identity verified. Therefore, they will not be criminally liable for failing to comply with that duty in relation to the exempted person. Relieving companies of the duty meets the original policy intention and is a logical consequence of the exemption granted to individuals on these grounds. I hope that my explanation has provided further clarity on why that is needed.
On amendment 101, any proposed use of the national security exemption in clause 65 will be carefully considered by the Secretary of State. A duty to report to Parliament’s Intelligence and Security Committee on the use of that exemption is unnecessary. The ISC’s oversight functions are clearly set out in the Justice and Security Act 2013 and the accompanying memorandum of understanding. It is inappropriate to include a specific oversight role for the ISC in relation to the deployment of this exemption. The amendment is therefore not necessary, and I ask hon. Members not to press it.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
It is a pleasure to serve under your chairship, Ms Bardell. I thank the Minister for his opening remarks. I recognise that clause 65 gives the Secretary of State the power to provide written notice to exempt someone from identity requirements if necessary in the interests of national security or for preventing or detecting crime. The Opposition recognises the importance of protecting national security, but the Minister will know from previous debates that we seek greater clarity about where exemptions may be granted, and the transparency and accountability around the use of those powers. The Government have tabled amendment 9, which is consequential to clause 65. If the clause is agreed to, the amendment makes sense.
Amendment 101, which my hon. Friend the Member for Aberavon and I tabled, comes back to scrutiny of the use of the exemption powers. I will probably say a few times today that the title of the Bill includes is the Economic Crime and Corporate Transparency Bill. Where there are questions about a potential lack of or reduced transparency and possible serious impacts, there should be accountability, even from the Secretary of State. We live in a democracy where the Government should be and are accountable for actions of the Secretary of State.
The amendment simply states that there should be a process by which any use of the identity verification exemption on national security grounds provided by the clause should be subject to some scrutiny. The Minister may have better ideas on how to deal with that question if the Intelligence and Security Committee is not the right place. We have used the ISC because it is a parliamentary Committee that deals with national security matters, is on Privy Council terms, and will have the confidence of Parliament and the Government in reviewing these matters and raising any questions. All the amendment does is provide scrutiny for the exemption process by referring a report to the Intelligence and Security Committee, which ensures that the information remains privileged and not publicly accessible. If the Minister is, as he intimated, unable to support the amendment, I urge him to give us confidence about how he would provide assurances.
Kevin Hollinrake
Perhaps I could give the hon. Lady some examples of the kinds of individuals the exemption might apply to. We expect the exemption to be used on very rare occasions, for individuals including, but not limited to, those working for the UK intelligence community or law enforcement agencies. She should bear in mind that the Secretary of State is introducing the provisions. I hope that she will be reassured that the powers will be used sparingly but wisely.
Seema Malhotra
I thank the Minister for his intervention. The issue is not what we assume and hope might happen, but having some checks and balances on the use of powers. It is part of our responsibility on the Committee to think that through.
Dame Margaret Hodge (Barking) (Lab)
That is always the case. Perhaps the Minister will reflect that Usmanov was a case in point. He exploited an exemption to hide some of the information around his ownership. It is worth all of us reflecting on that. Obviously the provision has to be there for good people, but it may become yet another opportunity for bad people. The Usmanov case was a classic one. I think Fedotov was another, if my memory serves me right. Apologies if I have this wrong, but Fedotov was another one who managed to get an exemption in some way. If these things are not done properly, and are not then properly monitored, they can go wrong.
Seema Malhotra
I thank my right hon. Friend for highlighting an important case in point.
Kevin Hollinrake
May I speak to that case very quickly? The Usmanov case was entirely different. A Secretary of State did not introduce legislation providing for a Russian oligarch to move, in that case, billions of pounds-worth of assets to his sister, I think. What we are talking about here is the Secretary of State using a power to remove somebody whose identity is sensitive from a public register—not allowing an oligarch to subvert the regulations.
Dame Margaret Hodge
I think the Minister is right about Usmanov, but on Fedotov I think it was something different. I cannot quite remember the details, but he managed to use an exemption to hide his identity. We raised it last week, and I think that officials were going to come back with a response. They may not have had time to read the letter yet, but that is more the case that one would think of.
The Chair
Order. For the benefit of those following our proceedings, I remind Members of the flow of debate: the Minister will respond to the shadow spokesperson, and the right hon. Member for Barking will have an opportunity to intervene on him then.
Seema Malhotra
Thank you, Ms Bardell. I thank my right hon. Friend for her intervention. To wrap up my remarks on this point, the Minister makes a valid point in relation to the types of cases and the circumstances under which people might be given exemptions, identified on national security grounds. My right hon. Friend makes a good point as well about where things might come through the system inadvertently. That is partly why we have checks and balances.
I take the Minister’s point about individuals who may be working for the intelligence and security community, but he could give us some reassurance by saying that every single Secretary of State in whose hands this power lies in future will consider every case carefully so we need have no cause for concern about that, given the transparency and accountability. We set up systems such that there are ways in which the decisions of Secretaries of State and Ministers have controls, checks and balances around them.
In circumstances in which a Secretary of State might say that a name is too secret to divulge, even knowing whether there has been use of the power—the number of times used and the categories for which it has been used—could still be important information. For example, what if suddenly in future the Secretary of State was determining 10 a month—I am not saying that they would? The Minister and I have no idea who the Secretary of State might be in five or 10 years’ time, so we have no idea whether there might be an abuse of the power. However, sometimes even having the number can be a red flag, because ordinarily we might expect one every three months, so why do we have five a month coming through?
There are therefore ways in which we can have such controls without putting someone’s identity or security—or the nation’s security—at risk. Having some controls over those powers is a big and important theme of the report. I ask the Minister to consider that and to say: “Look, we will consider whether we can have, without it being too onerous a job, some mechanism for controls and reporting on use of the powers, such as through Privy Council routes.” I would then be happy not to press my amendment.
Kevin Hollinrake
I am happy to reflect on that and have further discussion. As the hon. Lady and other Members know, I am keen for Parliament to have scrutiny of any measures that we introduce. We will take it away to consider.
Seema Malhotra
I appreciate the opportunity. I therefore will not press amendment 10.
Amendment 9 agreed to.
Clause 65, as amended, ordered to stand part of the Bill.
Clause 66
Allocation of unique identifiers
Seema Malhotra
I beg to move amendment 102, in clause 66, page 55, line 36, leave out “power” and insert “a duty”.
This amendment would ensure that all directors would be issued with a unique director identifier to be used for all their directorships regardless of whether they or an ACSP form the company.
The Chair
With this it will be convenient to discuss amendment 103, in clause 66, page 55, line 37, at end insert—
“which the registrar must make publicly available on the registrar’s website”.
This amendment would make all unique director identifiers available on the registrar’s website.
Seema Malhotra
The clause expands the existing powers of the Secretary of State to allocate individuals who have had their identity verified with unique identifiers, which are reference numbers used by the registrar to help to identify people. That is of course a welcome step but, following an earlier debate in Committee, there are three key issues that we touched on which I want to explore further: can we have confirmation, first, that each director will have a unique identifier; secondly, that that will be public, whether published as it is or in proxy form, so something is searchable as a unique identifier published for a director; and, thirdly, that all directorships for one person will be searchable under their unique ID?
Amendments 102 and 103 were tabled by my hon. Friend the Member for Aberavon and me. We first made reference to them in the debate on the SNP’s amendments 68 to 70 to schedule 2. Our amendments would amend clause 66. Amendment 102 would ensure that all directors would be issued with a unique director identifier to be used for all their directorships, regardless of whether they or a member of the Association of Corporate Service Providers forms the company, and regardless of other factors. It explicitly seeks to amend the legislation to make it a duty to give a unique ID, not a power. It is possible that the drafting of my amendment does not fully do that, based on this being underlying legislation as well, but that is certainly our intention. The Minister has previously said that he expects that a unique identifier will be given to all directors for all their directorships, but I do not fully understand whether the Minister is guaranteeing that.
Amendment 103 would make those unique IDs publicly available on the registrar’s website, allowing for greater transparency for the general public. Thom Townsend of Open Ownership said that we need to
“think long and hard about how we are using an identity, once verified, persistently in a lifelong way. Australia, New Zealand and India issue unique identifiers to directors—and, in Australia’s case, to beneficial owners—for life, which makes the investigation process much more straightforward.”––[Official Report, Economic Crime and Corporate Transparency Public Bill Committee, 25 October 2022; c. 62, Q133.]
These amendments, I believe, do just what Mr Townsend recommends: provide unique identifiers, so that any investigation process can be much more straightforward.
I want to go into this issue a little further in light of the Minister’s previous comments. Section 1082 of the Companies Act 2006 states:
“The Secretary of State may make provision for the use…of reference numbers (‘unique identifiers’)”
It is a power, rather than a duty, and the amendments to section 1082 of the Companies Act contained in clause 66 would not change that. The Minister has said that the SNP amendments that we previously debated
“will be redundant once the expanded power under section 1082 is exercised”.––[Official Report, Economic Crime and Corporate Transparency Public Bill Committee, 3 November 2022; c. 250.]
However, I cannot see where the Bill states that those amendments will effectively be redundant when it comes into force, so I would be grateful if he could come back on that point.
The explanatory notes say that the reason for unique identifiers not being publicly available is “to protect personal information” and to guard against
“the fraudulent use of unique identifiers.”
None of us wants to see the fraudulent use of unique identifiers, and I do take that point, if the argument is about whether those specific unique identifiers are the only solution to this issue. Sometimes, it depends on how unique identifiers are used: if they are used as part of log-on information or something like that, you could argue that there is potential for fraudulent use, but they could also be identifiers that do not really pose any kind of security or other risk to personal information. What we need, if we cut all the way through this, is a reference that would allow someone to link already public information to a single individual.
If having a public unique identifier were a problem for any reason, depending on how the new Companies House systems are put together and what that unique identifier gives access to, there could be other, very easy ways to achieve the same result. I might suggest different options, such as a function allowing people to check what other offices someone held. That already exists on the Charity Commission website, for example, where we can look up trustees of a charity and see what other trusteeships they hold—the entries are linked, and that link is done for the reader. Companies House already seems to try to do that, but cannot do it properly because it does not have the data to link people who are directors of different companies. For example, that is why, as I think the hon. Member for Glasgow Central noted, she had one appointment that came up three times—or was it the other way around?
Seema Malhotra
Right, her name is registered three times, rather than having one entry noting that she has three directorships. With identity verification and the issuance of unique identifiers, Companies House will know exactly how many directorships an individual has. Companies House may plan to update pages showing people’s total directorships once it issues unique identifiers, but that certainly is not clear.
An alternative is to have some form of proxy ID, which is becoming increasingly common. That is a unique ID linked to the director’s unique ID, which can keep the director’s ID itself private, but has a unique public identifier that is searchable and uniquely linked to the underlying identifier. That happens increasingly for email addresses, for example, when someone may not want their email address to be public, so a pseudo or proxy address is created so that the one that someone might publicly enter and others might publicly see is not the underlying email address, but is uniquely linked to it. There are ways in which technology can be used simply and easily. That is not a high-cost option and it can be built in to have what we need for public purposes—a unique identifier for a director that links all their directorships, if published, and is searchable.
I hope that those constructive suggestions and the way we laid out our reply when the Minister asked in a previous debate what we were not fully happy with in clause 66 mean that things are perhaps clearer. I look forward to the Minister’s response.
Alison Thewliss
I support the excellent amendments tabled by the hon. Member for Feltham and Heston. It is incredibly important that clarification is given through the register, for a number of reasons. A unique identifier that follows a person through their whole life as a company director is important. I mentioned before that I appear in the register three separate times. It would make sense for that to be consolidated in one entry so that people could see the course of that.
The identifier should go through all of the directorships that people have. We know—it has been raised previously in Committee—that some directors have many hundreds, or even thousands, of directorships to their name. It seems sensible to have clarity to ensure that they are the same person. A name such as mine is reasonably unusual—it is quite easy to find—but if a John Smith is on the register, it is much more difficult to establish that they are the right John Smith, the one who is the director of a company. Therefore the identifier becomes all the more important, particularly if that person changes their name. If Jane Smith becomes Jane Jones through marriage, it becomes more difficult to chase her through the register. It would therefore make sense, particularly for women, who are most likely to change their name, but also for other people who may change their names for a variety of reasons—perfectly honest ones, or, in some cases, to divert attention from their previous directorships, perhaps, or any previous misbehaviour—that that person’s ID should follow them around. Anybody doing due diligence on that person as a director could then find them on the register quite easily.
That goes to the point made by my hon. Friend the Member for Paisley and Renfrewshire North about phoenixing. If a company director has been involved in many phoenix companies, it would make sense for people to know that, and to know that they might well carry out that behaviour in future. It would enhance the clarity of the register against such fraud and poor behaviour. The example that the hon. Member for Feltham and Heston gave, of the Charity Commission register, was a good and relevant one, because it is about somebody’s appropriateness and that wider sense of understanding somebody’s behaviour through the register.
It is very important to make the change from “power” to “duty”. A person can have the power to do lots of things, but if they have no obligation to do them, that is quite a different scenario. Lots of the issues that the Companies House register has got itself into are down to those duties not having existed. It is important that those duties exist, and that we set them down in the Bill. I am not hugely confident that what we are talking about will happen if the duties and responsibilities are not set down in law. Future Ministers may decide not to bother with them. I am sure that the Minister would; future Ministers might not.
It is incredibly important that we do everything we can to make the Bill as tight as possible, and that we take all precautions against the abuse of the register. We must get rid of those abuses. We must make a better register, and better legislation, to ensure the integrity of the register in the future.
Kevin Hollinrake
I think that we are trying to achieve the same thing, just in different ways. We discussed this issue at length in previous sittings. Companies House is already actively working on unique identifiers. It is not credible to think that, having legislated for them, we will not implement them. A basic principle of the Bill is to be able properly to link individuals on the Companies House register, so that company directors have a better experience and so that it is easier for the public to identify the connection between directors, including persons of significant control, and companies.
Dame Margaret Hodge
I accept that great progress has been made in the Bill, but addresses and personal details are also important. We know the way in which addresses are exploited: people put 3,000 companies into one address. That is relevant information that Companies House needs to have.
Kevin Hollinrake
Addresses are not covered by the amendment, although we discussed the verification of addresses at length the other day. We think we have struck a fair balance in terms of a company address. The shadow Minister seems to be saying that she wants the unique identifier to be searchable; we think that the person’s name should be public and searchable. I did not quite understand her point about people hiding their email addresses or names, and searching by unique identifier, rather than the other way around. We think that the searchable entity should be the person’s name, and the Bill would then make it easier to see the connections between a director’s name and the different companies with which that person is connected.
Seema Malhotra
The example was given of the number of John Smiths there might be. There might even be a number of Seema Malhotras, but I do not know that there are as many.
Seema Malhotra
I think I found three. For the most part, the Minister’s arguments are very strong, but he is on very weak ground here. Is he seriously saying that if someone genuinely wants to see Mr John Smith’s directorships, they will have to spend three hours going through all the John Smiths? Would that be enough time to de-duplicate and link the right ones together? That is crazy. There is a much simpler solution. It would do the job, and bring us in line with other countries.
Kevin Hollinrake
I am not aware of the countries to which the hon. Lady refers. How would someone know the unique identifier so as to be able to search by that record? What someone will recognise is the name of the person, whether it is Usmanov or another name. That is likely to be the search term that people use, so we think that, for the public view, the most important link is the name. That would also have some implications in terms of potential fraud.
The unique identifier is there to do exactly what the hon. Lady and the hon. Member for Glasgow Central want it to do: it creates a connection behind the scenes, in Companies House, so that a simple search can reveal the connection between a person and all the different companies. That is how it works: we search by the names. We think that is the best way around. She wants to search by the unique identifier.
Seema Malhotra
May I kindly suggest that the Minister ask his officials more about how the unique IDs that are used in Australia, New Zealand and India are working, and whether there is something we might learn from them? If he has not been briefed on that already, it might be a useful step for him to take.
On the Minister’s second point, he is absolutely right that we usually start with a name. We might start with “Mr Kevin Hollinrake, Thirsk and Malton”, but we would then find his unique identifier and be able to use it to link him with the hundreds of other entries for Kevin Hollinrakes—perhaps some of them even live in Feltham and Heston—and see whether they are the same person.
If the Minister is unclear about what I referred to as a proxy identifier, I am happy to take that offline. It is a simple measure used for security reasons, and it is basically like having a “known as” name. Everyone might know the Minister by a nickname, but people will always be able to identify him, because the unique identifier is linked solely to the underlying email address or ID. It is not publicly the same, but it is uniquely linked, so that someone who uses one will access the data of the other.
Kevin Hollinrake
I am happy to look at the international examples that the hon. Lady mentions, and at the generic name issue. I think that is a fair point, and I have already asked officials to look at how that might work in the case of John Smith and the like. I have just done a quick search on one of my previous co-directors, Harry Hill, who has quite a generic name. If we put in “Harry Hill, Hunters, Companies House” it brings up the Harry Hill that is associated with me, not another Harry Hill. There are simple ways to make connections involving names such as John Smith. I will come back to the hon. Lady with an answer on that if I can.
We do not think that changing the power to a duty would have the desired effect of obliging people to have unique identifiers in the first place. That will be achieved by mandatory provisions including the regulations under the power contained in section 1082 of the Companies Act.
Seema Malhotra
I would appreciate it if the Minister came back to me on that point, because I am not clear that section 1082 of the Companies Act, as amended by the Bill, will achieve what he thinks it will. I want a clear answer about whether all directors will have a unique identifier under the new regime. That is question No. 1, and everything else follows from that.
Kevin Hollinrake
Yes, they will. That is exactly what the Bill provides. It is a mandatory provision, including the regulations under the power contained in section 1082 of the Companies Act. Those two things combined will ensure that Companies House provides a unique identifier for every company director and for every person of significant control. I think that is what the hon. Lady hopes to achieve.
Let me turn to amendment 103. Unique identifiers will be a tool to help Companies House to link an individual’s verified identity across multiple roles and company associations. For example, if an individual is a director for company A and also a person with significant control for company B, Companies House will be able better to link those appointments using the unique identifier. The identifiers should not be made public, in our view. Their purpose is to allow the person who is assigned the identifier to communicate securely and privately with Companies House. Making the unique identifiers public would, in our view, compromise their use, because they could be appropriated and misused by anyone looking at the register, including potentially to commit identify fraud and other crimes. However, Companies House will be making changes to how members of the public view the register, enabled by unique identifiers, so it will be possible accurately to see connections between individuals and entities, including how many companies an individual is a director of, or how many companies a person has significant control over. On that basis, I hope hon. Members will withdraw their amendment.
Seema Malhotra
I thank the Minister for his remarks. The matter is so important that we will want to push the amendment to a vote. It may be that what the Minister has just said on Companies House’s intentions resolves some of the issues in the end. What has been stated will happen, but we need to go further to be clear about when and how that will happen.
Question put, That the amendment be made.
Kevin Hollinrake
I beg to move amendment 10, in clause 67, page 56, line 3, after “subsection (1)” insert “—
(a) in the words before paragraph (a), after ‘not’ insert ‘, so far as it forms part of the register,’;
(b) ”.
This amendment spells out that section 1087 of the Companies Act 2006 is only concerned with information on the register of companies.
Kevin Hollinrake
Clause 67 amends section 1087 of the Companies Act 2006 to extend the list of registered material unavailable for public inspection to include
“any statement delivered to the registrar”
to confirm compliance with identity verification requirements, which means that statements delivered to the registrar concerning identity verification will stay private, protecting personal and sensitive information. Government amendment 10 clarifies that section 1087 is only about withholding from public inspection the portion of the registrar’s records concerning companies. Other provisions elsewhere in legislation provide for the withholding from public inspection of the portion of the registrar’s record pertaining to other entities, such as limited liability partnerships and limited partnerships.
Seema Malhotra
We have very few remarks to make. As the Minister has outlined, clause 67 amends the Companies Act to extend the list of material unavailable for public inspection to include
“any statement delivered to the registrar”
under the provisions listed. I make the general comment that we want to have greater clarity on this matter so that we do not inadvertently find ourselves, through the legislation, in a situation whereby director, shareholder or officer information becomes hidden for all the reasons outlined in the Bill. The clue is in the name—it is about corporate transparency. I am making a broad point about concerns of reducing transparency when we are here to increase it.
Amendment 10 agreed to.
Clause 67, as amended, ordered to stand part of the Bill.
Clause 68
Requirements for administrative restoration
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
New clause 45—Striking off a company: identity verification—
“(1) The Companies Act 2006 is amended as follows.
(2) After section 1003 (striking off on application by company) insert—
‘1003A Striking off on application by company: identity verification
Before striking off a company under section 1003, the registrar must first, in the case of each individual named as a director of the company—
(a) confirm that the individual’s identity is verified (see section 1110A), or
(b) confirm that the individual falls within any exemption specified in regulations made under section 12(2A)(b).’”
This new clause would extend directors’ Identity Verification requirements to dissolving a company in addition to registering a company.
New clause 46—Application for administrative restoration to the register—
“In section 1024 of the Companies Act 2006 (application for administrative restoration to the register), for subsection (3) substitute—
‘(3) An application under this section may only be made by a former director, former member, former creditor or former liquidator of the company.’”
This new clause would make it possible for a creditor or liquidator to apply to restore a company administratively.
Kevin Hollinrake
Clause 68 amends section 1025 of the Companies Act 2006 to require that outstanding fines or financial penalties must have been paid for a company that has been previously struck off to be restored to the register. I thank the hon. Members for Feltham and Heston and for Aberavon for new clauses 45 and 46.
First, new clause 45 seeks to ensure that before striking off a company, the registrar must check whether the named directors have had their identities verified or do not need to do so because are they are exempt. Secondly, there are two routes by which a dissolved company can be restored to the register: one is an administrative process involving application to the registrar; the other involves applying to the court to order restoration. New clause 46 would expand the categories of persons who can use the administrative route by allowing former creditors and former liquidators to apply to the registrar for a dissolved company to be restored to the register. At present, only former directors or members of the company can apply to the registrar. Creditors of the company at the time of its striking off or dissolution and former liquidators currently have access to the court application route under section 1029 of the Companies Act 2006.
While I appreciate that in comparison to the administrative route, the court route is more cumbersome and potentially costly, it exists for a reason. Where a creditor seeks restoration in an effort to prove a debt outstanding from a company, the court is best placed to determine the validity of the case. Opening the administrative restoration route to creditors would place the registrar in the position of having to judge the legitimacy of a creditor’s interest in a company. That is not and should not be the role of a registrar.
However, liquidators are a matter of public record and in many cases might be the official receiver. I appreciate that there may be instances where their interests in restoring a company might be in the wider interest of others, including potential creditors, and that there may be a case for giving them access to the less cumbersome administrative process. On the basis of our undertaking to consider the matter further, I shall be grateful if hon. Members do not press the new clause.
Although driven by good intentions, we believe that new clause 45 is unnecessary. As the Committee has heard, ID verification requirements will apply to all new and existing registered company directors, as well as to people with significant control and those delivering documents to the registrar. That means that directors and beneficial owners already on the register prior to the reforms coming into force will be covered by the ID verification requirements, although they will have a transition period within which to become compliant.
Directors of companies applying for strike-off under section 1003 of the Companies Act 2006 will therefore not evade verifying their identity before their company is struck off without exposing themselves to criminal liability. Crucially, anyone delivering an application to strike off a company to the registrar will also have to verify their identity. I hope that that explanation is appropriate, and provides such reassurance that hon. Members will consider not pressing the new clauses.
Stephen Kinnock (Aberavon) (Lab)
It is a pleasure to serve under your chairship, Ms Bardell.
Clause 68 makes welcome changes to the Companies Act and should make it easier to enforce penalties imposed in response to criminal breaches under it. The circumstances under which an application can be made for a company struck off the register to be restored to it are set out in section 1025 of the Companies Act. Clause 68 amends section 1025 to make it clear that, as a prerequisite for any such application, any outstanding fines imposed on the applicant and relevant company directors in relation to a criminal offence under the Companies Act must be paid in full. That is a positive step toward increasing levels of compliance with companies legislation in the UK.
The Minister may wish to clarify one point in relation to company directors convicted of criminal offences. In previous sittings, the Committee discussed the grounds on which someone can be disqualified from serving as a company director under the Company Directors Disqualification Act 1986 and subsequent amendments. They include the disqualification of individuals guilty of persistent breaches of companies legislation. That appears to leave the door open for someone to serve as a director, even if they have committed a criminal breach of the legislation, provided they have not done so on multiple separate occasions.
Will the Minister tell us whether the Government considered extending the criteria so that anyone with even a single criminal conviction related to companies legislation would be prohibited from serving as a director again? Does he believe that it might send a stronger message were the Government to adopt a zero-tolerance approach to these kinds of crimes? I hope that he will come back on that point. It has some relation to new clauses 45 and 46, and I look forward to the remarks of my hon. Friend the Member for Feltham and Heston on them.
Clause 69 establishes—
The Chair
Order. We are not there yet. The hon. Member is getting a little ahead of himself.
Stephen Kinnock
I am getting a bit excited. Sorry, Ms Bardell. I will leave it at that.
Seema Malhotra
I am grateful for the opportunity to speak to new clauses 45 and 46, following the remarks of my hon. Friend the Member for Aberavon. He and the Minister highlighted how clause 68 amends the Companies Act and provides that outstanding penalties will need to be paid by applicants or directors for a full strike-off. If I am correct, section 1025, which the clause amends, is about applications for administrative restoration by a former director or member—a shareholder—whereas a creditor would use a separate process under section 1029 to restore a company to the register. That is not being amended by the Bill and does not require payment of outstanding fines.
Kevin Hollinrake
As I said in my remarks, anyone delivering an application to strike off a company to the registrar would have to verify their identity. I do not see how that is not clear.
Seema Malhotra
I thank the Minister for that intervention. If he means that the aims of the new clause are already included in the proposed operation of the system, that is helpful clarification.
Currently, when companies are struck off the Companies House register, very little is done to check whether fraud has occurred and, in turn, that means that there are few repercussions for the directors of those companies. On average, 400,000 companies are struck off the register each year, so perhaps the Minister could go one step further and clarify whether such ID verification will apply to all directors of companies that are struck off. How will that happen if there are no unique identifiers? If wrongful actions are committed, will the proposed regime go one step further to ensure that red flags and investigations into possible misconduct or fraudulent activity will ensue? At the moment, unscrupulous directors are likely to misappropriate the strike-off process to avoid scrutiny and to rack up debts or to sell company assets ahead of the company dissolution, effectively absconding with the proceeds. Our new clause does not just call for a check on IDs but for red flags in the system to alert authorities to possible fraudulent activity that should be subject to further investigation. The Minister may want to respond to that suggestion later.
As I have outlined, creditors may seek to apply through the courts for a company to be restored, albeit under different legislation. New clause 46 would enable a creditor or a liquidator to apply to restore a company administratively. I believe it would be helpful to the Minister’s considerations to outline our intentions. The introduction of director identity verification may go some way to deterring directors from registering multiple companies fraudulently, but in the case of companies already struck off the register, there is limited opportunity to hold directors accountable for their wrongful actions and for returns to their companies’ creditors.
Members of the insolvency and restructuring trade body, R3, report that director disqualifications have little or no effect on fraudulent directors. It is absolutely shocking that the system has been allowed to continue in that way. There is little or no effect on fraudulent directors, and seriously rogue directors will often go on to commit repeat frauds despite being disqualified.
Those directors who have been disqualified may continue to operate behind the scenes as de facto directors, shadow directors or advisers to a company. We are trying to close some of those options, but there are all sorts of ways in which those who want to get around the system can do so if determined. Hence the need for the legislation to be more belt and braces.
A much more significant deterrent occurs when the company is put through an insolvency process and directors are held to account for the assets that have been misappropriated. If a company has been dissolved and automatically struck off the Companies House register—the company therefore no longer exists, in effect—that process can only take place if the company is first restored. However, if a company’s former creditors or liquidators at the time of the company’s striking off or dissolution wish to apply to restore the company, they must do so through the court.
The court process can clearly deter creditors as it is sometimes a complex procedure, in part due to the costs, which are typically £1,500 to £3,000, and in part due to the huge amount of time involved, which can be 12 to 18 months. Businesses are busy, creditors are busy, and the extra strain has to be weighed up against the cost of doing it. We have to have a solution. I am glad that the Minister has intimated that there ought to be a basis for what I think he described as a “less cumbersome” process. I agree. I hope that we will see some proposals, perhaps in Committee. It would be helpful to strike while the iron is hot.
Directors are all too easily able to create a significant barrier to the investigation of their conduct. Indeed, data from Companies House shows that only 2% of dissolved companies are put through a process to restore them to the register each year. I do not have the data on the number of creditors who might do so were it a less cumbersome process, but I think we can all agree that it would be far more than 2%. Certainly the research suggests that.
Under section 1024 of the Companies Act, former directors or members of a company can apply to restore a company administratively, avoiding a court process. However, that is not an option for a former liquidator or creditor of a company. New clause 46 would amend section 1024 so that a former creditor or liquidator could apply to restore a company administratively, without the need for a potentially lengthy and costly application to court. That would make it simpler for a company to be put through an insolvency process so that the company’s directors can be held to account for the assets that have been misappropriated and incur liability for their actions. Returns to creditors could then be made.
I hope that the Minister will, in his reflections, consider the wording of new clause 46. It might help him on the way to finding a simple solution. There is a real issue here. In the interests of fairness to businesses and creditors that do the right thing but are treated unfairly, it should not be so hard to bring to account those who had clearly planned to be struck off, more quickly, cheaply and easily.
Kevin Hollinrake
On the hon. Lady’s legitimacy argument, as I said, we can understand that there might be a case about liquidators. We have committed to look at that. It is much more difficult in the case of creditors’ interests. She talked about the misappropriation of funds, but it is not the registrar’s position—the registrar is not deemed capable—to determine whether that is the case. I do not see how a creditor’s interests can be decided on by the registrar. However, I commit to us looking at the liquidator element.
On the issues the hon. Lady has mentioned with respect to Companies House and new clause 45, the requirements under the objective at the start of the Bill make it clear that the registrar’s responsibility is to minimise unlawful activities. On whether a striking-off in certain circumstances is a red flag, there will be a number of ways in which that can be determined, either through automated processes or by human intervention. It is not realistic for the registrar to determine fraud, but it is definitely within her capability to determine whether there is a red flag around fraud. We expect the registrar to put those measures in place; in fact, there is a requirement for her to do that under objective 4— minimise unlawful activities.
We have had debates at length in previous sittings on whether we should dictate to the registrar how she should do that, with myriad conditions and circumstances involved and discussion as to what constitutes a red flag. On this side of the Committee, we believe that we should leave it to Companies House to determine how the registrar minimises unlawful activities and what constitutes a red flag. That, of course, will be shared with relevant enforcement agencies.
Seema Malhotra
I know the Minister is not intending to, and I would not want him to, misrepresent our position, but the difference between our views is generally whether there should be greater tools and provision in legislation to give the registrar teeth that might be helpful in her work. The Minister is right that it would not be for the registrar to determine fraud, but that there should be a red flag system whereby the registrar is uniquely in a position to be able to determine that.
Kevin Hollinrake
We are in total agreement—violent agreement—which is great.
The hon. Lady made a point about shadow directors. There are all kinds of ways in which a nefarious individual can influence the behaviour of a company, for which we cannot possibly legislate. There is no such thing as, and no legal status of, a shadow director. Therefore, how would we ban somebody from being one? We have to operate within the boundaries of the law. That is what we feel, and we have reached a fair balance here. I hope the hon. Lady will not press her new clauses to a vote later in the proceedings.
Question put and agreed to.
Clause 68 accordingly ordered to stand part of the Bill.
Clause 69
Delivery of documents: identity verification etc
Question proposed, That the clause stand part of the Bill.
Kevin Hollinrake
The clause introduces identity verification requirements for individuals delivering documents to the registrar. It also requires that when an individual acts on behalf of another, they must confirm that they have the authority to do so. That will enable the registrar to reject documents unless they are accompanied by a true statement that the identity of the individual filing the document is verified and that the person filing the document is authorised to file.
An individual who delivers a document to the registrar on their own behalf must have their identity verified, and the document must be accompanied by a statement confirming their verified status. If an individual is exempt from identity verification requirements under the clause, they must provide a statement to that effect when delivering a document. Documents delivered on behalf of another person must be accompanied by a statement that the filer is authorised to do so. A document delivered by an employee of an authorised corporate service provider must additionally confirm that they are acting in the course of their employment.
Ensuring that individuals are identity verified before they can deliver documents to the registrar and that they are permitted to do so provides greater accountability because the documents will be traceable back to a verified identity.
Clause 70 creates a prohibition on delivery of documents to the registrar by disqualified persons. Clause 71 enables the registrar to reject documents that have been delivered by people who are not within the categories permitted to file documents under clauses 69 and 70.
Stephen Kinnock
Clause 69 establishes a requirement for anyone delivering documents to the registrar to have their identity verified, subject to certain exemptions, which may be set out in secondary legislation. However, it is not clear in what circumstances the Government might consider an exemption appropriate. The requirement for any exemption to be set out in secondary legislation subject to the affirmative procedure is welcome, because it enables the relevant changes to be scrutinised by Parliament. Nevertheless, it would be helpful if the Minister could provide an indication of what sort of exemptions might be expected.
Clauses 70 and 71 relate to the delivery of documents to the registrar. Clause 70 stipulates that disqualified individuals may not deliver documents on either their own or someone else’s behalf. As set out in the clauses, individuals delivering documents to the registrar will be required to make a series of statements confirming that they are not subject to any disqualification under companies legislation.
Kevin Hollinrake
The hon. Gentleman asked me for examples of exemptions. We expect exemptions to be used rarely, but examples might include Government Departments, local authorities and international organisations where the identity and accountability of the organisation delivering the information carries little risk.
Stephen Kinnock
I thank the Minister for that clarification. Assessing the meaning of “carrying little risk” is a subjective thought process, but he is right that not everything can be micromanaged in this process. We will probably never get absolute clarity on these issues, but it will be important that Parliament scrutinises the way in which exemptions are implemented so that we get to know what “little risk” means through their implementation. It will also be important for Ministers to keep a close eye on the risk management processes that need to be implemented. As the Minister rightly said, legislation without good implementation is not worth the paper it is written on.
In previous debates, this Committee has discussed issues involving the verification of information provided to Companies House and the enforcement of criminal penalties for those who fail to comply with requirements to provide truthful information. These clauses raise similar questions. For instance, could the Minister explain what actions the registrar will be able to take to verify that, if somebody delivering documents states that they are not acting on behalf of a disqualified individual, that is a true and accurate statement?
The clauses also relate to issues discussed by the Committee on authorised corporate service providers. We all want this Bill to make it much more difficult for the people who own or control companies to hide their identities behind layers of secrecy, which often take the form of corporate service providers or other individuals acting on behalf of those in control. It would be helpful if the Minister could provide more detail about how the Government plan to protect the system against abuse, particularly by third parties acting on behalf of criminal clients. Could he tell us, for instance, whether the Government have considered introducing a more proactive licensing system for corporate service providers—as is used by some other jurisdictions, including Jersey—and what assessment the Government have made of whether the Bill provides adequate safeguards against the submission of false statements to the registrar?
Kevin Hollinrake
I think the hon. Gentleman asked me to address two points. First, he asked how we will ensure that the documents filed are accurate. That goes back to the risk-based approach that the registrar should take on potential red flags and other such matters. Obviously, that role fits into the registrar’s wider objectives of ensuring that the information is accurate and minimising unlawful activity. It is a red-flag approach in terms of systemised and human intervention.
The hon. Gentleman’s second, wider point was on the penalties for false filing, which are up to two years in jail. I think most people will consider that to be a decent deterrent against abuse of the system.
Stephen Kinnock
I thank the Minister for that clarification. Does he have a view on the question of a more proactive licensing system for corporate service providers, along the lines of what is done in Jersey? Have the Government made any assessment of whether the Bill provides adequate safeguards against the submission of false statements to the registrar, particularly by corporate service providers?
Kevin Hollinrake
I fully recognise the concerns expressed across the Committee about our oversight of corporate service providers. As I say, we should not mix up the many bone fide companies and household name accountants and lawyers, but clearly there are concerns, for example about some company formation agents. We need to ensure that the system that supervises money laundering is much more effective—we know there are deficiencies. The Treasury is looking at that right now. It will report and say exactly what it will do to beef up the system and make sure it is more fit for purpose. I am taking a keen interest in that. I am just as keen as the hon. Gentleman and other Members that the system properly identifies people with shortcomings and identifies wrongdoing, and that we build a much better system of money laundering supervision.
The hon. Gentleman mentioned licensing. Let us see what the Treasury review says and then we can make judgment. In terms of oversight of the money laundering supervision system, I am as concerned as he is and as keen to make sure that that system is fit for purpose.
Stephen Kinnock
I thank the Minister for that clarification. Will he assure us that he will encourage his colleagues at the Treasury to consider the option of a licensing system within the terms of reference of the review?
Kevin Hollinrake
I am keen to make sure that the system works, whether by licensing or by some other means. There are lots of different options for what might be described as a system that is fit for purpose. Of course, in common with all Members of this House, we are keen to avoid unnecessary bureaucracy, but nevertheless we want a system that works and that we have faith in, so, in my view, all options should be on the table.
Alison Thewliss
I have a small query and seek clarification from the Minister. In clause 69(3), proposed new section 1067A(2) states:
“An individual may not deliver documents to the registrar on behalf of another person unless—
(a) the individual’s identity is verified”.
Will the identity of those entitled to deliver documents be added to the register, and will they have to be separately verified? I am not clear on the mechanism.
Kevin Hollinrake
Will the hon. Lady ask the question again? I did not quite get it.
Alison Thewliss
Yes, of course. I understand that if someone is delivering documents on behalf of themselves, there will be a check to see whether they are verified, but if someone is delivering documents on behalf of somebody else, the Bill seems to say that they also need to be verified. Is that subject to a separate verification list? That person would not be registering to be a company director in their own right; they would be delivering the documents to register somebody else, so is there now going to be a separate list for that?
Kevin Hollinrake
I think I have understood the hon. Lady’s question. Clearly, all directors and company service providers need to have their identity verified too. If that is what the hon. Lady is referring to, that is absolutely contained in the provisions of the Bill.
Dame Margaret Hodge
I was very interested in what the Minister said about ensuring that the authorised company service providers should be checked and supervised properly. It is really important to ensure that all the details of the individuals on the register can be found with certainty. However, we are all struggling with how to do that in quickest, most cost-efficient and effective way. Does the Minister agree that a suitable mechanism should be presented on Report—unless he would like to suggest one now—that does not waste time, keeps within the timeframe, does not require massive additional resources and enables swift action to be taken? I love the Treasury, but we should do this without having to wait for a Treasury review or reorganisation. Does he accept that that might be a way forward? We all want the same thing, and if we do not get this right there could be a huge flaw in the system we are establishing.
Kevin Hollinrake
We are on the same page about ensuring that the system is fit for purpose. It is difficult for me to do a review when the Treasury itself is doing one and is probably better placed than I am to do it, given its wider understanding of the system.
Kevin Hollinrake
Perhaps it might not be as ambitious as me, but it certainly has access to detailed information and the resources to properly conduct the review. The Treasury should be allowed to do that job.
I think that we are all on the same page. I am absolutely committed to ensuring that the system is fit for purpose. It is not a case of just getting the Bill passed; we need to ensure its implementation, as I have said many times in the House and in Committee.
Liam Byrne
I am sorry to intervene, but the Minister provokes me. A point to take away is that we are now bedevilled by a real problem in this country: responsibility for policing this area is divided between the Minister, the Treasury, the Foreign, Commonwealth and Development Office and the Bank of England. At the moment, as the Foreign Affairs Committee has said repeatedly, there is not an effective gearbox for joining those things together. If one of the Minister’s legacies could be to fix that problem, he would be cheered from all sides.
Kevin Hollinrake
God forbid that the Government work in silos, whoever is in power, but they do tend to do so at times. I am on the same page as the right hon. Gentleman and other Committee members that we must have a joined-up approach right across Government. The systems of supervision of money laundering must be fit for purpose, tight, verified and checked, and the people who do not do it right must be held to account. We must ensure that we get that right, and I am fully committed to that.
Question put and agreed to.
Clause 69 accordingly ordered to stand part of the Bill.
Clauses 70 and 71 ordered to stand part of the Bill.
Clause 72
Delivery of documents by electronic means
Question proposed, That the clause stand part of the Bill.
Kevin Hollinrake
I hope that the clauses are pretty uncontroversial, but let us see. Companies House systems are already enabled to receive digital account submissions. The clauses will help Companies House to become a fully digital organisation by 2025.
Clause 72 transfers the power to require delivery by electronic means from the Secretary of State to the registrar. Filing information digitally is easier, quicker and more secure for filers. The information can be more easily checked for accuracy and compliance, and is less likely to be rejected for basic errors or omissions. That increases transparency. Suspicious activity can be better identified, contributing to our efforts to detect and prevent economic crime.
Clause 73 will require companies to deliver to the registrar a copy of a court order confirming their share capital reduction, rather than the original document itself. Clause 74 does the same in respect of a declaration of solvency. Clause 75 gives the registrar an administrative power to specify, in registrar’s rules, where documents must be delivered together.
Requiring companies to file component parts together will make it easier for Companies House to check that companies are meeting their filing obligations. It will also reduce unnecessary errors. Where filings are made that do not meet the requirements, they can be rejected, helping to improve the integrity of information on the register.
Stephen Kinnock
The main purpose of clause 72 is to make it easier for future changes to registrar’s rules to be made by the registrar directly, rather than through the Secretary of State. The Government’s intention is to facilitate the electronic delivery of documents. Using quicker, more efficient electronic systems for delivery should play an important role in wider plans for the transformation of Companies House and the service it provides.
With that in mind, could the Minister say a bit more about how the provisions fit into the ongoing Companies House transformation programme, particularly in relation to the planned new IT system? When might the fully electronic system for the submission and processing of documents submitted to the registrar be in place? We would be grateful for the Minister’s comments, particularly about timing.
Kevin Hollinrake
Companies House already has the capability to accept documents filed digitally—89% of companies already do that. Therefore, it is not an IT development requirement; it is just a requirement for companies to file documents digitally rather than using paper. It puts the onus on the companies rather than on Companies House itself.
In relation to authenticity, we are again back to the red-flag approach. Companies House has a requirement, an objective, to oversee the integrity of the register. There is definitely a risk-based approach to that. The aim is to try to put the red flags in place to ensure that we are identifying documents that are not authentic. Also, there are penalties for false filing of documents, which I think we went through previously.
Alison Thewliss
I have a brief point on a technical issue. It was flagged in evidence that some documents submitted electronically or posted on the Companies House website in electronic format were image files rather than searchable documents. I wonder what consideration the Minister has given to mandating the type of files that can be filed electronically, because it would make sense to accept them in a format that can then be searched online.
Kevin Hollinrake
The hon. Lady makes a good point. I do not know the detail behind that, but I am happy to go away and look at that for her.
Question put and agreed to.
Clause 72 accordingly ordered to stand part of the Bill.
Clauses 73 to 75 ordered to stand part of the Bill.
Clause 76
Power to reject documents for inconsistencies
Question proposed, That the clause stand part of the Bill.
Kevin Hollinrake
Clauses 76 to 79 support the Bill’s overarching ambition to broaden the powers of the registrar to maintain the integrity of the register. Clause 76 provides a new power to reject documents for discrepancies. Currently, the registrar must accept documents if they have been properly delivered—that is, they meet the requirements as to their contents, form, authentication and manner of delivery, and the other requirements listed in section 1072 of the Companies Act 2006.
Documents containing information that is at odds with information that the registrar holds may none the less meet “proper delivery” requirements in their own right. If so, they must be placed on the register despite the apparent inconsistency. This clause cures that problem by enabling the registrar to reject a document if it appears to be inconsistent with other information that is held by or available to the registrar. The power is available if, due to the inconsistency, the registrar has reasonable grounds to doubt whether the document complies with the requirements as to its contents.
Dame Margaret Hodge
This is a question to aid understanding. This provision sets out the duties of the registrar in relation to documents, but the documents will actually be checked by the company service providers, will they not? That will be outsourced to those providers. I might be wrong—the Minister is looking puzzled—but that is the case if I read the situation correctly. Therefore, is this provision suggesting that there will be a check at Companies House on the work that the company service providers do? Perhaps the Minister can say a little about how that will be implemented. I thought that all that was to be pushed out to the company service providers.
Kevin Hollinrake
Not at all—quite the opposite. Companies House has a requirement to oversee the integrity of the register, and the clause states exactly that. If the registrar feels there is an error that she is not happy with in the document, or it is inconsistent, she can reject the document whether it is filed by a company service provider or by a director of the company.
Dame Margaret Hodge
For complete clarity, there will be a risk-based system of checks on documents provided as a mechanism for ensuring the accuracy of the documents that are submitted.
Kevin Hollinrake
Absolutely. That is exactly how we expect it to operate.
Once the registrar refuses the document, it will be treated as not having been delivered. Under clause 77, the Companies Act 2006 allows the registrar, upon receipt of an instruction from someone else and only with the relevant company’s or other body’s consent, to correct a document at the pre-registration stage if it appears to be incomplete or internally inconsistent. That power was useful when more companies filed on paper, as informally correcting material was easier than rejecting a document and waiting for it to be refiled. However, in the digital world, filings can now be rejected, returned to the filer and then refiled within minutes. There is no longer a need to informally correct a document pre-registration. Clause 77 therefore removes that power, which also encourages accuracy in filing by removing the expectation that a document can be informally corrected.
Clause 78 reduces the period of time for which the registrar must keep originals of documents that have been delivered in hard copy from three years to two years. Once that period has passed, the original documents can be destroyed as long as the information they contain has been recorded. The retention period that was previously reviewed was reduced from 10 years to three years when the Companies Act 2006 replaced the 1989 Act. The number of requests for the retrieval of filings has decreased further and steadily since then due to declining paper filings, improved image capture processes and increased confidence in digital records. It is therefore right to reduce the retention period again. The information in the documents will still of course be available electronically to users as appropriate.
Clause 79 amends the period for which the registrars in each UK jurisdiction must maintain certain records available for public inspection. The records in view are those concerning dissolved companies, including certain information regarding PSCs of dissolved companies, overseas companies that have ceased to have any UK connection, and overseas credit and financial institutions that have ceased to be required to file accounts with the registrar. The clause provides that those records can be moved to the Public Record Office two years after the relevant date of dissolution or cessation.
Dame Margaret Hodge
May I ask a question on that? It is relevant to later amendments. I do not know whether the Minister or his officials can help, but can Companies House stop a request for dissolution?
Dame Margaret Hodge
I think it can. I have tried to find its powers and cannot find them. The great example is the Savaro one. It was the UK-based company that owned the warehouse where the fire took place in Lebanon. It tried to dissolve the company, but I think the Minister intervened. I have looked up Savaro and it does still exist. It is quite important if we have a dirty company that wants to rush away. Do we have powers to dissolve it?
Kevin Hollinrake
I am happy to raise that with officials and come back to the right hon. Lady. [Interruption.] There is some flapping about right there, as I speak.
Kevin Hollinrake
Yes, the registrar can decline an application if it does not satisfy the requirements—[Interruption.]
The Chair
Order. If Members could refrain from shouting across the room, out of respect to our colleagues at Hansard and those watching proceedings, that would be greatly appreciated.
Kevin Hollinrake
The clause also provides that the registrar need not make these records available for public inspection 20 years after those dates.
Seema Malhotra
I will speak to clauses 76 to 79. I thank the Minister for his comments. He has outlined that clause 76 would amend the Companies Act 2006 to give the registrar the power to reject documents that are not consistent with information held by the registrar and that give the registrar reasonable grounds to doubt whether the document complies with Companies House requirements.
A document that is refused under this power is treated as not having been delivered. These clauses will apply to all documents filed with the Companies House registrar. Such documents could include the annual confirmation statement—formerly the annual return—the annual accounts, forms appointing or terminating directorships, applications to register a charge or the filing of changes to the articles of association. The broad list can be found on the Government website under the postal forms that a limited company can file with Companies House.
Clause 76 is a welcome measure that should help Companies House transition from passive administrator to active agent as regards the information submitted to it. Will the Minister expand on how the registrar will be alerted when inconsistent documents are submitted? Have there been discussions with the registrar about the process by which inconsistencies will be checked? The Government may be considering a risk-based approach such as automatic flagging, but it would be helpful to clarify how the system is likely to work and be implemented.
I was searching the legislation to see if there was any deadline for rejection by which Companies House will confirm the rejection of a document. I cannot see a timeline specified, but I would be grateful if the Minister could correct me if that is wrong. In the Bill as drafted, a rejected document is treated as never having been delivered. Could the Minister clarify that? It suggests to me—though it is not fully clear—that companies could be submitting information in good faith, maybe just before a deadline, but could be fined for missing a deadline if the document was subsequently rejected. It would be helpful to know whether Companies House will be working to a deadline to confirm or reject a document that has inconsistencies. If there will be, what might that mean for companies that submitted documentation in good faith, and what will happen with the resubmission of any documentation?
I have no particular comments on clause 77, but I have a question about clause 78 and the preservation of original documents. The Minister is right that our confidence in digital technology and digital records has improved significantly. Can the Minister clarify what needs to be kept in hard copy for two years? Does that refer to all the records that we have discussed? I am not clear about how that sits alongside options for electronic storage of original documents that had been certified by the registrar. There are some other mentions of certification in the Bill, so it would be useful to understand that. I do not have any other concerns or questions on that point.
Kevin Hollinrake
How can we consistently tackle inconsistency in the documentation? We are back to the red flags issue. It is up to Companies House to determine the circumstances in which something would have a red flag, in that it was incorrect. It is not impossible for the Committee to do Companies House’s job for it in terms of how it determines what might constitute a red flag, but I have every confidence that Companies House will determine that appropriately. Again, that is assisted by the requirement that when people file information that is clearly, patently and deliberately wrong, there are penalties for false filing.
As for deadlines, I do not think there is any deadline that the registrar has to adhere to for when determining something to be inconsistent or wrong. The document can be rejected and companies can expect that rejection to be speedy in the majority of cases. The registrar has discretion not to reject an inconsistent document if she feels it is not materially inconsistent. Those are points of detail that can probably be left to Companies House.
Seema Malhotra
I thank the Minister for his response. What he said about points of detail is true to some extent, but not fully true as regards what the provisions could mean for companies that have submitted information in good faith before a deadline. If documents are rejected after the deadline, it could result in the company being considered to have not submitted documents. There seems to be a slightly grey area. Would companies be fined for missing deadlines, or would they be given, in the case of a significant document, a short period of, say, seven days to resubmit it with corrections, without facing a penalty? It could be seen as a late submission. We just want a fair process in instances when genuine mistakes are made.
Kevin Hollinrake
So do I, and I would expect the registrar to use her judgment when determining whether something has been inappropriately filed. We would not expect a fine to be issued if it is not the company’s fault that it has missed a deadline, as in the situation that the hon. Lady describes. There is a wider requirement for any registrar to act reasonably in that regard.
Question put and agreed to.
Clause 76 accordingly ordered to stand part of the Bill.
Clause 77 to 79 ordered to stand part of the Bill.
Clause 80
Power to require additional information
Kevin Hollinrake
I beg to move amendment 11, in clause 80, page 63, line 2, at end insert—
“(vi) section 28 or 29 of the Limited Partnerships Act 1907;”.
This amendment spells out that statements made by a person in response to a requirement under section 1092A of the Companies Act 2006 can be used in criminal proceedings for the false statement offences under the Limited Partnerships Act 1907.
Amendment 11 reinforces the legal framework to maximise the prospects of truthful and accurate information being delivered to the registrar. The general rule is that fairness requires that a person who is compelled on pain of criminal sanctions to provide information to the authorities should not be prosecuted if the information they are forced to supply is incriminating. Proposed new section 1092C(1) of the Companies Act 2006, inserted by clause 80, ensures that that fairness requirement is met in relation to uses by the registrar under the new power in proposed new section 1092A to compel a person to provide her with information for the purposes of her being able to determine whether filing obligations have been met.
However, the privilege against self-incrimination is not absolute. As is the case elsewhere in the statute book, the Bill includes exceptions. A person compelled to provide information is not immune from prosecution for offences that prohibit the giving of false, misleading or deceptive statements. Proposed new section 1092C(2) provides for that exception. The amendment adds the two proposed new “false statements” sections that clause 129 of the Bill inserts into the Limited Partnerships Act 1907 to the list in proposed new section 1092C(2). That ensures that when the registrar compels a person to provide information under her new power to determine whether filing obligations concerning limited partnerships have been met, the person cannot claim privilege against self-incrimination if the information they are compelled to deliver reveals that they have submitted a false filing. I trust the Committee will agree that this is a well-considered amendment.
Seema Malhotra
We do not have extensive remarks. As the Minister has outlined, the clause introduces a new power for the registrar to require information to determine whether someone has met the requirements on document delivery. Failure to comply without a reasonable excuse would be a criminal offence.
The Chair
To clarify, we are debating Government amendment 11 to clause 80. Is that the amendment the hon. Lady is focusing on?
Seema Malhotra
Yes. Thank you, Chair. I was just speaking briefly to clause 80. The amendment spells out that statements made by a person in response to that requirement can be used in criminal proceedings on those false statements, and we support that.
Amendment 11 agreed to.
Kevin Hollinrake
I beg to move amendment 12, in clause 80, page 63, line 14, leave out subsection (5).
This amendment is consequential on NC17.
The Chair
With this it will be convenient to discuss the following:
Government new clause 16—Material unavailable for public inspection: verification information.
Government new clause 17—Material unavailable for public inspection.
Government new clause 18—Protection of information.
Government amendments 49, 40 and 39.
Kevin Hollinrake
These amendments relate to the register of overseas entities introduced by virtue of part 1 of the Economic Crime (Transparency and Enforcement) Act 2022. The new clauses mirror equivalent sections in the Companies Act 2006 as amended by part 1 of the Bill, which we have already debated. They will ensure consistency between the two Acts.
The amendments will ensure that the public register contains only information that it is necessary to display, and that certain information including email addresses is not made publicly available, because of the risk that that could facilitate identity theft or other fraud. New clause 16 will ensure that personal information supplied in connection with the verification process for the register of overseas entities can be appropriately protected from public inspection. It is right to ensure that certain personal information, including email addresses, is not made publicly available because of the risk that that could facilitate identity theft or other fraud.
Dame Margaret Hodge
Again, I am really asking for information. It would be interesting to learn whether the Minister knows how many overseas entities have been registered since the enactment of the 2022 Act. It could still end up being unclear who the real beneficial owner was of an overseas entity. If someone went to an overseas entity to find out who owns One Hyde Park, and it said that the owner was a British Virgin Islands company, would the owner of that company be shown?
Kevin Hollinrake
That does not directly relate to this amendment, but I will get back to the right hon. Lady on that point in a separate conversation. Details such as the name and company of the person verifying the information submitted by an overseas entity to the register will continue to be publicly visible; it is not our intention to change that.
New clause 17 replaces sections 22 to 24 of the ECTE Act with proposed new sections 22 and 23. As with new clause 16, new clause 17 adds to the list of information that the registrar must not make available for public inspection, to help prevent the abuse of such information. That includes categories of information that were never intended to be made available for public inspection, but were missed during the expedited passage of the ECTE Act through Parliament, such as the email address of an overseas entity. New clause 17 also includes new categories of information that an overseas entity will be required to provide as a result of other amendments that are being introduced by the Bill, including the title number of land that an overseas entity owns, and documents provided to the registrar under her new power to require further information. New clause 17’s insertion of new section 23 also means that the registrar can disclose protected information about trusts, date of birth and residential address only in two scenarios.
Amendments 12, 39, 40 and 49 are consequential on new clause 17. Under the amendments, the registrar need not retain material that must not be made available for public inspection longer than appears reasonably necessary to her for the purposes for which the material was delivered to her.
I will say to the right hon. Member for Barking that there have been over 3,000 registrations on the register of overseas entities since it was established on 1 August 2022. It is right to ensure that the public register of material concerning overseas entities contains only information that is necessary to display, and that certain information, including email addresses, is not made publicly available for the reasons that I have stated. It is also right to amend the Companies Act 2006 in a way that mirrors amendments made in the Bill, so that there is consistency between the two Acts.
Seema Malhotra
In the time that we have had, it has been difficult to go through exactly what all the new clauses and amendments mean for what is and is not hidden information. We may come back to this issue, so I will not oppose the measures today. New clause 16 confers a power to make regulations about identity verification.
Kevin Hollinrake
Protected information includes protected date of birth information, which means information as to the day of the month—but not the month of the year—on which the registered beneficial owner or managing officer of an overseas entity was born. It also includes protected residential information, which means information as to the usual residential address of an individual who is a registered beneficial owner or managing officer, and protected trust information, which means the required information about a trust.
Seema Malhotra
I thank the Minister for his clarification. He did set out a little of that when he spoke to the new clauses. Given the speed with which we are going through the Bill, it is sometimes a little hard to keep track of what has been added, and whether there are any other consequences from that. I am not saying that there are consequences, but it feels as though a lot of Government amendments have come forward. I am not necessarily objecting to those before us today, but as a matter of principle, we need to go through provisions to check whether the devil is in the detail; after all, as I have said, the Bill has “Corporate Transparency” in its title.
Kevin Hollinrake
We will debate the overseas entities register in more detail in part 3, so there might be a good opportunity for further debate then.
Seema Malhotra
That would be welcome. New clause 18 grants the Secretary of State the power to make regulations as they see fit, in order to protect material on the register. Further scrutiny will be required on what could happen in future, and the circumstances in which that power might be needed.
The perception may have been that we had opposing positions on some aspects of the Secretary of State’s powers, but we now find ourselves coming a little closer together. We are debating the Bill, which largely has cross-party support, in good faith, but there are many little ways in which things could get changed, without those changes being subject to full debate in the House. It is important that we debate that further during proceedings on the Bill. I repeat that I want to ensure that there is no devil in the detail. I appreciate the Minister committing to return to the issue in part 3, when we will have a chance to look at the matter in slightly more detail.
Dame Margaret Hodge
There was a report in The Guardian yesterday on an organisation called Wealth Chain Project. Its analysis showed that 138,000 residential and commercial properties in England and Wales are owned by offshore companies. We have managed to get 3,000 so far, so there is a heck of a lot—
Kevin Hollinrake
There is not a direct correlation between the two, because one overseas entity might own many UK properties.
Dame Margaret Hodge
Ah, that is a valid point, and I think the article deals with it. Some entities will own more than a few properties, but—sorry, I am just looking to see whether the article does make that point. The article demonstrates the enormous importance of Executive action. That is why the Opposition feel strongly that action should take place; there is no point in just putting legislation in place. There is a desire to monitor that action, and toughen up the provision to ensure that the action happens. I hope that the Minister bears that in mind. No matter how many entities own more than one property, 3,000 is still a long way from the 138,000, assuming that figure is accurate.
I am getting muddled by all these amendments. Will the Minister or his officials provide us with a list of what information will be on the register? What will we see? If we had that, we could take a view on whether that information is sufficient for all our purposes.
Liam Byrne
It is a pleasure to see you in the Chair, Ms Bardell. I fully appreciate the Government’s need to table amendments—the grind of Committee exposes all kinds of opportunities to improve and strengthen legislation—but this is a good example of the kind of measure that it would have been helpful to see at the beginning of the process, not halfway through, not least because we are all worried about Companies House and its capacity to hunt and root out badness. All of us have in our time, and in our own way, relied on journalists’ investigative capacity to flag bad activity. It is important to the Opposition and, I am sure, the Government, to hear from journalists and investigators on whether the measures that the Minister is introducing jeopardise or constrain their ability to conduct the investigations that they have carried out so admirably over the last few years.
I hope that the Minister will take up the suggestion of my right hon. Friend the Member for Barking and set out very clearly for us what information will be available. The whole Committee would be interested to hear, perhaps informally, from journalists on whether that information will constrain their ability to investigate; we can then decide whether to come back to this issue on Report.
Kevin Hollinrake
On the points raised by the right hon. Member for Barking, as I have said many times in Committee and in the House, implementation is everything. In my business, we used to say, “Ideas are 10 a penny. Execution is everything.” We have to ensure that we follow through on the measure, and that it is properly executed.
We will debate the overseas register at length when we come to part 3, so I ask the right hon. Lady to hold off on any key questions about that. We will try to get the answers that she wants, and will probably have a conversation about the kind of information that she wants to see. The provisions relating to overseas entities are about trying to identify the people who have control over those entities and companies. That is what the legislation is about: understanding who the directors are—for the first time, we will be able to see that properly—and the persons of significant control. They are not just people who own more than 25% of a company, but people who exert control in other ways.
The right hon. Member for Birmingham, Hodge Hill, is right that journalists play a key part in investigation. Many of them spend much of their time analysing databases of all kinds to try to find information that would be useful for law enforcement agencies. We want to ensure that that information is readily available to them, because they play a huge investigative role. We are very keen to ensure that they get the information that they need.
Amendment 12 agreed to.
Ordered, That further consideration be now adjourned. —(Scott Mann.)
Retained EU Law (Revocation and Reform) Bill (Second sitting)
Tuesday 8th November 2022
(2 years ago)
Public Bill CommitteesRead Full debate Retained EU Law (Revocation and Reform) Act 2023 View all Retained EU Law (Revocation and Reform) Act 2023 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 8 November 2022 - (8 Nov 2022)
The Chair
Colleagues, this is just a reminder: we are sitting in public and the proceedings are being broadcast, so best behaviour is required at all times. We will now hear oral evidence from Barney Reynolds, of Shearman & Sterling; Sir Richard Aikens, of Brick Court Chambers; and Jack Williams, of Monckton Chambers. We are delighted to see that all of them are with us in person, and we have until 2.35 pm for this part of the sitting. Could our witnesses begin by introducing themselves for the record, starting with Sir Richard?
Sir Richard Aikens: Good afternoon. My name is Richard Aikens. I started my professional career as a barrister in commercial chambers. After 25 years, I became a judge of the High Court, where I sat, among other places, in the commercial court. I then went to the Court of Appeal. I gave that up in 2015. I now work as an arbitrator in international arbitrations. I teach law at King’s College London and Queen Mary University of London. I am also involved in writing and editing textbooks, most recently the latest edition of “Dicey, Morris & Collins on the Conflict of Laws”, where of course issues concerning EU law and the subsequent part it might play are important.
Barney Reynolds: Hello. I am Barney Reynolds, partner at the international law firm Shearman & Sterling, where I am head of financial institutions—about half the firm’s business—and the financial regulatory group. I practise in UK and EU regulation and associated areas. I led a team, of about 50 people, that drafted the laws and regulations for Abu Dhabi Global Market, which is a new financial centre in Abu Dhabi. It is now in operation, with about 20,000 people and 4,000 companies, and is based entirely on the English law, UK regulatory model. I have been helping other Governments look at adopting our model—in fact, without the EU bits—as well.
Jack Williams: Good afternoon. I am Jack Williams. I am a barrister at Monckton Chambers. Prior to entering practice, I taught constitutional law at Brasenose College, Oxford University. I have written and spoken a lot about the legal implications of Brexit as a matter of domestic law.
Justin Madders (Ellesmere Port and Neston) (Lab)
Q
Jack Williams: I am happy to begin if that is okay with the other panel members. Clause 7 obviously has a number of different aspects to it. If I may, I will start with the departing from retained EU and domestic case law aspects, before turning to the domestic reference procedure, because I think the implications of both are significant.
The first is essentially a nudge to the courts—a gentle nudge but a nudge none the less—in order to encourage greater departure from retained case law. It achieves that by essentially modifying the test for when certain courts—the Court of Appeal upwards, generally speaking —may depart from retained case law, and it does so by listing three particular factors. As a normal matter of statutory interpretation, when certain factors are listed, they are to be given greater significance and weight. Each of those factors in its own terms is encouraging departure. What you do not see there, for example, which was very clear in the House of Lords practice direction, which this is moving away from, is whether it is right to depart from case law, based on legal certainty grounds and taking into account that change in case law by judges necessarily is different from changes that the politicians and Parliament bring into force prospectively. That has implications for certainty, because one does not know what cases the judges may or may not apply, but also for something that has not been discussed this morning: the separation of powers. This puts an awful lot of policy decisions in the hands of judges.
Justin Madders
Q
Jack Williams: It does dictate what matters are litigated and which arguments parties run, particularly because litigators and our clients will have a number of different options going forward. Does one wait and see how the first-tier judge deploys the retained case law and whether one can convince them to depart from it directly by distinguishing it, so that one is not actually changing the law but departing from the EU principle? Or does one ask now for a reference at first instance stage, which would add in delay and costs, and go off the Court of Appeal, for example, to argue whether that case should remain the law or not? This raises a number of strategic questions that I am sure we will debate in this session.
Sir Richard Aikens: I agree with everything that Jack Williams has said, but, in my experience at least, it is likely that judges will take a very conservative view on the question of deciding whether to depart from retained EU case law, and an even more conservative view about departing from retained domestic case law, which is itself based on what was European case law as applied by judges in the United Kingdom. That is just the nature of the judicial animal: he or she is very conservative and, as Jack Williams said, they will be very reluctant to tread into areas that might be seen as policy or more political. Such departures would obviously have to take account of the statutory considerations that are set out in clause 7(3) and (4), but even when taking them into account, I suspect that judges will be very reluctant to change things—we will see.
On the other aspect, I wonder whether getting a reference to a higher court will be of any practical use at all because of the delay and expense. Unless you have two parties for whom money is no object, money is a very big consideration, especially in civil matters—these are all civil matters—in which, in the vast majority of cases, you do not have anything such as legal aid. The prospect of something going to a higher court and then perhaps coming back again is not something that parties will consider lightly. I really wonder whether it is a practical proposition.
The Chair
Do you want to come in on that question, Mr Reynolds?
Barney Reynolds: The provision is drafted in a very limiting and narrow way. It gives three examples of things that the court should have regard to when considering whether to depart from EU case law, and those three are pretty extreme instances. The first is that you are not banned. The second is a change in circumstances, but it is possible to make a departure under our system anyway if there is a change in circumstances. And the third is if we think that the retention of the EU case law decisions begin to affect adversely the development of our law. Again, that is pretty narrow. I do not think that the Bill as drafted is going to have a dramatic effect. In fact, I would even consider going further in the text by adding to those examples.
It seems to me that—this is true of the Bill as a whole—there is a tension here between lawyers wanting legal certainty, continuity and so on, which is all perfectly justifiable, and the fact that we are going through a constitutional change and need to effect that change. India has taken until only recently to get rid of its version of the Companies Act 1948, but that is a fellow common law country. We are moving from an alien legal system to our own, and our methods are different. The sooner we get on with it, the better.
That transition—this is just in the context of case law, and the same goes with the provisions—inevitably involves some element of change and some element of legal uncertainty. But I think our lawyers will coalesce with the judges around revised interpretations of provisions very quickly. I observe that, in terms of expanding the provision in clause 7(3), for instance, one of the key methods of interpretation that the EU adopts is its own version of the purposive method of interpretation, which of course—
Stella Creasy (Walthamstow) (Lab/Co-op)
It is hard to hear you. I wonder whether it is because you are between two microphones. I am sorry.
Barney Reynolds: One of the EU’s methods of interpretation is its version of the purposive method of interpretation, which we also have—we look at Hansard and so on when things are not entirely clear—but it is very limited in its use here. We basically go on the meanings of the words on the page, whereas in the EU, the purposive method, which they leap to pretty quickly in the courts, involves trying to work out the intentions of the legislators behind provisions. In the EU context, that includes ever closer union and various other purposes that are alien to our country and our system—as it now is, at the very least.
As I say, it seems to me that the sooner we get on with it, the better. Clause 7(3) is pretty anodyne. I would consider expanding it, and I would not get too troubled by the fact that moving from A to B—that is, where we are now to where we want to get to—potentially involves some element of legal uncertainty that would not otherwise arise. If we wanted perfect legal certainty, we would do nothing.
Justin Madders
Q
Sir Richard Aikens: It is difficult to say. I cannot give you express examples, of course, and I am concerned only with the process, rather than any particular provisions that might be tested. Here, after all, we are looking at the issue of what the case law says, and how the case law has interpreted any particular EU regulation, directive and so on. It may be rather more limited, but as soon as you get into litigation, there are costs. We cannot get away from that.
The Minister for Science and Investment Security (Ms Nusrat Ghani)
Q
Barney Reynolds: I think it will be beneficial as soon as we get through the process. Our system delivers greater legal certainty, which business craves, than the code-based method that we are coming out of, which has swept through our law in a number of areas, including my practice area, financial services law, which is almost all from the EU. I see it day to day. When we come out the other side—how quickly we get through is up to us—I think we will get those benefits.
The transition will probably involve some element of uncertainty arising from that, inasmuch as reinterpreting provisions interpreted using these EU techniques under our system, or wondering whether a judge is going to retain some of that element of interpretation or move completely to our own method, is unclear at the very beginning. I think that very quickly, after a few early court cases, we will get certainty on that. In fact—it is very interesting to hear Sir Richard talk—I think that the judges themselves will do their absolute utmost to make sure that legal certainty is there through the transition, and I would trust that process to work well. I have no real concerns even about the transition. Yes, there could be things that go wrong. If we try to craft it so that there is no conceivable possibility of something turning out in an unexpected way, we will deny ourselves the benefits that I have mentioned.
Ms Ghani
Q
Sir Richard Aikens: May I start a bit further back? We are now in a situation where there is no EU law as such that affects this state, the UK. Everything we have here is, by definition, UK law. The question that has to be addressed is how you deal with that UK law, given its origin and the way it was treated and the way it was interpreted by the EU court, in particular. The whole of this Bill is an attempt to produce a process that enables what is now UK law to be dealt with, as I understand it, in a manner that is consistent with all other aspects of UK law.
Having set that as the objective, it is inevitable that you are going to have some problems on the way. The way in which this has been done means that the timescale is very short. To my mind, it is an almost impossible task to have the whole process done by the end of 2023. Frankly—you will say that I am pessimistic, perhaps too much so—I doubt whether it could be done by the end of 2026.
Given all that, it is inevitable that, because the process is almost entirely by secondary legislation, you are going to get challenges because people will think, rightly or wrongly, “That is a political matter, not a legal one”, or that the changes are not in accordance with the law or not in accordance with due process. I think that the way this has been fashioned is actually an invitation to litigation and an invitation to controversy. It may well mean that there are going to be challenges, because people feel that they have lost rights and that they are disadvantaged, and the manner in which it will have been done is through a short form of secondary legislation, which is not what you might imagine is the normal way of dealing with some of the big issues that have to be dealt with, such as workers’ rights, environmental issues and so on. This is a very difficult process.
Jack Williams: In response to that question, may I add that the outcome of the Bill may well be to preserve rights, but it is an absolute “may” and is entirely in the gift of Ministers. The Bill does not preserve rights or give any safeguards for that outcome to be achieved. That may be the outcome, but that is in the gift of Ministers. That is because the Bill sets one on an irreversible train track that leads to a cliff edge, and Parliament has not built in any breaks or stops on the train track to save or preserve those rights.
I have full faith in Ministers. I am sure that they want to do good for their constituents and to maintain rights. I love the fact that they are coming out and saying those words, but they are only words—it is not in the legislation. There is no legal protection for those rights in the Bill.
Barney Reynolds: I am not sure what the alternative would be. The Bill gives the system as a whole, as it were, the opportunity to execute on a shift that cannot be prescribed in advance, given the unprecedented volume and complexity. I have some limited relevant experience—I mentioned creating a system in Abu Dhabi—but one can go quickly. The main work there took 18 months, and I think that with the right size team we could go even quicker.
I note that in the Bill, the deadline is not in truth the end of 2023, because there are various ways under the switching back on powers in clause 13(6), (7) and (8), to allow even sunsetted provisions to be reinstated before mid-2026. In effect, there is a quick rush to do the main job, and an ability to tidy up things before mid-2026, which seems to be sensible.
You can choose different deadlines; you can debate all of these things. My basic point is that I am not sure quite how else one could do it if you actually want to get it done in any realistic timetable. Obviously, behind and above all that, Parliament will itself need to decide how, through a joint Committee, your Committee, or some other Committee, it wishes to oversee the process. That is a completely separate matter from the Bill.
Stella Creasy
Q
Perhaps Abu Dhabi, as part of an authoritarian state, is not the best example for us democrats of how we might wish to proceed. I wonder if you could talk a little bit more about some of the barriers created in the Bill for judges because of the lack of parliamentary scrutiny, and if there are other examples of legislation that you have seen that may offer us a way forward. Perhaps we start with Jack, as you look most interested by the question, then go across the panel.
Jack Williams: It is extraordinarily difficult to think of ways that the Bill tells judges exactly how and how not to do things. Ironically, one of the ways that the Brexit legislation is going is to codify almost into a civil system exactly how judges should interpret certain matters. The roles of the court are only in clause 7 provisions, which say in their own terms that they may have regard to certain things, but do not give a definitive list. Those that are listed are nudging towards departure, as I said earlier.
I do not think there is anything in the Bill that gives judges the power to preserve or save certain rights. What I would say is that it puts them in a very tricky political position because they will be asked to depart from case law and make all sorts of policy decisions. That is slightly ironic when a lot of the political discussions over the past few years have been to save judges from stepping into the political arena.
I very much agree with Sir Richard that the outcome of the Bill is to generate litigation, because the vast majority of the laws that come out of it will be secondary laws, which are susceptible to challenge. One will be arguing, for example in relation to clause 15, whether the similar objectives were being met by regulations that replaced the earlier retained EU law, and whether that has been met by the new rules. That is an incredibly difficult task, and one that could end up in lots of litigation. I think that we will end up with a lot more cases on those sorts of issues.
Sir Richard Aikens: I agree with what Jack said. As I read clause 7(7), the factors that the court must have regard to are not exclusive. In other words, they can have regard to other factors as well, which Parliament has not identified and has left to the judges to decide whether they might be relevant. So I would like to make two points. First, this is not exclusive, and it may well be that, in future cases, appeal courts will introduce other factors, maybe on a case-by-case basis, which are only relevant to that particular case, but there may be a development of more general factors, which, once you get that at a Court of Appeal or above level, will then tend to be repeated thereafter.
The second point, as has been made by both my colleagues already, is that EU case law necessarily involves a consideration of the way that the Court of Justice of the European Union looks at regulations and its previous case law. In my view, the CJEU is a much more active court in terms of both interpretation of EU instruments, to use the phrase that is in the Bill, and its previous case law. It tends to develop principles derived from both instruments and case law in a rather more positive way than the UK courts do. I can only speak for the English courts, of course.
The problem, therefore, that the judges are going to have to deal with is: do they carry on with that approach, as in the case law of the EU, or do they somehow retreat from that? Although they have got these factors here that are laid out, they do not really deal with that aspect at all. That, again, puts the judges in a difficult position, because they have not got the guidance from Parliament. They have got this body of law—the acquis of the retained EU case law—but do not really know quite how to push it on, or not push it on. I think it will make life quite difficult for the judges.
Jack Williams: As a footnote to that, on the Court of Appeal for the reference procedure, the Court will not even have decided facts, so it is quite ironic that what is being imported with the national reference procedure is like the preliminary reference procedure under EU law at the moment where you ask a court a legal question—an abstract legal question here—on whether to depart from retained case law. And yet, very unlike common law reasoning, one would not actually have a judgment from below with a factual position working out how the case law is applying to a certain set of facts, so it is even harder for the judges, because you are asking them a pure abstract question: should we depart as a matter of law from that EU case law without understanding the full factual matrix? That is very unlike common law reasoning where you incrementally grow and apply to the facts.
The Chair
Order. I have three colleagues bursting to get in and we have only about seven minutes left, so short answers to short questions, please.
Barney Reynolds: In short, I am not suggesting we follow another country. The court interpretation provision is unprecedented. Abu Dhabi created something from scratch. It was not a transition from what they have got, which was based on the French-Egyptian model, to the common law model. We should do our own thing that works for the UK, and using our methods. I agree with that.
I agree with my colleagues on the uncertainties that can potentially arise. As a lawyer, I think we need to be very careful about those. I am concerned with them. My solution is to expand clause 7 and the list of things that should be borne in mind in order to execute an adroit shift to our common law method in a way that does not involve interpretation too much. I do not think you can remove the necessity for judges to exercise interpretative powers to execute the shift. Ultimately, this shift involves trusting the judiciary, which I do. I am fine doing that, and I do not think that there is a shortcut or a way in which we can box people in so they cannot use any discretion and nevertheless get to the same place. We have to trust people to do it.
Mr David Jones (Clwyd West) (Con)
Q
Sir Richard Aikens: You start from the fact that supremacy no longer exists unless it is retained by UK law. Half speaking as a lawyer, but I suppose half speaking as a commentator, I do not myself see why there should be any part of our UK law that is regarded as more supreme than another, unless specifically identified by Parliament as being necessary for some reason. In many other countries, there is the principle of the constitution, which is inevitably supreme and cannot be crossed; we do not have that and have never had that in our law, except perhaps in very specific circumstances.
In general, therefore, I would say that the whole idea of supremacy should be done away with, unless there is some specific reason in specific areas of law why it is necessary to retain it. For my part, I cannot think of anything that immediately comes to mind that is not already dealt with in our law—I am thinking in particular of human rights.
Alex Sobel (Leeds North West) (Lab/Co-op)
Q
Jack Williams: I would start by not necessarily having what George Peretz KC calls the gun to your head, so that by the end you do not have time to scrutinise, because if you did take the time to scrutinise it, you might be left with the choice on the last day of what is there or nothing at all. That is obviously a difficult position for Parliament to be put into, having to save its own law somehow without a set procedure.
A direct answer to your question, however, is more scrutiny from Committees. One can imagine, for example, a Committee that was set up specifically to analyse all the changes that are coming to certain practice areas, with consultation and independent experts assisting—much like this Committee format. There is also the legislative reform order super-affirmative procedure, which builds and bakes in consultation and I think extra time in the process—the downside is exactly that last point, which is that it leads to delay. If you have a cliff edge of 2023, it is not particularly suitable, but it might give some ideas for inspiration. It is under a 2006 Act, but I think it has been used fewer than 50 times, precisely because it takes so much time and involves so much scrutiny—but if you are looking for an example.
Mr Marcus Fysh (Yeovil) (Con)
Q
Barney Reynolds: Yes, I think we should look at reinstating the Interpretation Act 1978, which spells out the UK method of interpretation. That would mean all lawyers could understand what existing EU provisions will mean on the basis of the words on the page, with very limited delving beyond that, and would probably lead to greater certainty than trying to move slowly from one to the other, case by case.
The Chair
Thank you. I am afraid our time has run out, and we are under strict time limits. I thank all three of you for your expert evidence. It has been very helpful for the Committee.
Examination of Witnesses
Sir Jonathan Jones KC and Dr Ruth Fox gave evidence.
The Chair
We move on to more experts. We have with us in person Sir Jonathan Jones KC, former Treasury Solicitor, and Dr Ruth Fox. Please take your seats. We have until 3.05 pm for this session. Please could the witnesses introduce themselves for the record?
Dr Fox: I am Ruth Fox. I am director of the Hansard Society. For transparency, the Hansard Society is leading a review of delegated legislation, on which we have a cross-party advisory group that will be reporting shortly. Sir Jonathan is a member of that advisory group.
Sir Jonathan Jones: Good afternoon. I am Jonathan Jones. I am a consultant with a law firm Linklaters and I was previously Treasury Solicitor.
The Chair
Thank you. We will start, as usual, with our shadow spokesman, Justin Madders.
Justin Madders
Q
Dr Fox: The fundamental concern we have, as you have heard from other witnesses, is with the sunset clause and its cliff-edge nature. It is also the fact that Ministers will decide which pieces of retained EU law will expire at the end of next year and Parliament will not have any oversight of what falls away. It has been variously described as being turned off, but that implies that it might be turned on again at a later date. It cannot; it will fall away and expire.
The concern is there could be pieces of retained EU law that have been missed. We have heard today that there is a possibility that a significant proportion of retained EU law has been missed from the Government’s dashboard, so we do not know exactly what the scope of retained EU law is. If pieces of legislation have not been identified and saved by the expiry date, they will fall away and we may have regulatory gaps. That is a significant concern for Parliament’s oversight of the regulatory landscape going forward. That is our primary concern: the cliff-edge nature of the sunset clause and the fact that the Government’s objectives, in our view, could be done in a different and less risky way.
Justin Madders
Q
Dr Fox: There were provisions in the European Union (Withdrawal) Act providing additional consultation periods for proposed instruments under the Act. They ensured additional oversight for Parliament. Although the Government are proposing to remove those provisions, that is not a major concern for us because the Government are, frankly, right that there has not been much tangible benefit to that process, because parliamentarians have not used those oversight provisions. For example, when statutory instruments have been laid for pre-consultation for 28 days, parliamentarians have not looked at them. They have not raised issues about them and a Committee has not looked at them.
The House of Lords has done marginally better. Its Secondary Legislation Scrutiny Committee has looked at the instruments, but the Commons has not. It is hard to argue that they need to be retained. There have been problems with them from a civil service perspective because it is complex to determine which of the consultation and oversight provisions apply to the instrument in front of them. Mistakes have been made and they have had to withdraw instruments and lay them again. I do not have a major concern about that, but there are broader scrutiny issues in terms of sifting in the legislative and regulatory reform order process.
Justin Madders
Q
Dr Fox: You are inviting me to give away the Hansard Society’s review proposals before we have published them! We all know that the delegated legislation scrutiny process is, at various points, inadequate for everybody concerned. Ministers spend a lot of time attending delegated legislation Committees, carving out significant time in their diaries. You all spend time in those Committees and feel that they are not necessarily a constructive form of scrutiny and oversight. There are lots of problems with the process.
The triage system applied to European Union (Withdrawal) Act orders was a technical sifting of instruments. Those who participated in European statutory instrument Committees found that it was a useful exercise but a very technical and legal process. We feel that that could be widened and expanded. There is no reason why sifting could not apply to all the instruments laid under the Bill rather than just to those laid under three specific clauses. That would have implications for parliamentary time and management, but it could be a way of improving scrutiny. We would certainly extend sifting to clause 16, for example, which is quite an extensive power that is not sunsetted. Those are possible ways to improve scrutiny.
Ms Ghani
Q
Dr Fox and Sir Jonathan, you are not comfortable with what the Bill proposes, but I get the feeling that you are probably just not comfortable that we are trying stop EU law continuing to sit on the UK statute books for ever without us having any power to amend it. Is that the case, or do you see a time in the future when it would be appropriate to move EU laws off the UK statute books? I will come to you first, Dr Fox.
Dr Fox: I reject that. I am up for change and quite embrace it. This was the purpose of Brexit, was it not? We should therefore get on with it. I do not object to your objectives; I object to the particular nature of the process and procedure by which you are proposing to achieve them, which is unduly risky.
If, for example, you do not find a regulation or a piece of retained EU law and so do not deal with it by next December, it will fall away. You cannot know the implications of that if you do not know about, and have not dealt with, the existence of the regulation—that is my concern. As I set out in our written evidence, I think you could achieve your objectives, and indeed my objectives, in a different way.
Sir Jonathan Jones: I agree with that. Plainly, I have no objection to Parliament changing any law it wants, be it former EU law or any other law. I am sure that the EU law that we inherited when we left the EU is a mixed bag, and that some of it is ripe for review and change.
Like Dr Fox, the difficulty I have with the Bill is twofold. First, it creates a huge amount of uncertainty as to what the law will actually be by the end of 2023 or thereafter, because there are no policy parameters on what might change, what might stay or what might fall away. That is quite aside from the risk you have heard about—that some law might fall away simply by accident, because it has been missed, which creates a huge amount of uncertainty for users of the law.
The second issue that I have difficulty with is the lack of scrutiny—an issue that I know you keep coming back to and that Dr Fox touched on—by Parliament itself of the process. In the Bill, Parliament is not being invited to consider particular policy areas or particular changes to the law; it is simply signing off on a principle and a process, and I would say that the principle and process carry with them all that legal risk as to what the outcome will be. Those are the difficulties that I have. It is not a difficulty with Parliament being able to change any law it wants, including former EU law, whenever it wants to; it is the process being followed that I have difficulty with.
Stella Creasy
Q
I say that as someone who this week received something I had never, ever received before—I wonder, Dr Fox, whether you can advise me if this is common: a ministerial correction to an answer to a written question. The written question was to the Department for Environment, Food and Rural Affairs about the application of the legislation to the Avian Influenza and Influenza of Avian Origin in Mammals (England) (No 2) Order 2006. Originally, Ministers told me that the order was not made under section 2 of the European Communities Act 1972 and therefore did not fall within the scope of clause 1 of the Bill, but they issued me with a ministerial correction to admit that it did. Have there been other instances of Ministers not knowing the consequences of their legislation? What impact do you think that has on our ability to scrutinise legislation as parliamentarians?
Dr Fox: I cannot give you a number, but I am sure that there have been corrections of that kind. We also see that in respect of statutory instruments, where instruments have to be withdrawn and re-laid because of errors.
Clearly, one of our problems is that the complexity of law now, and the layering of regulations on regulations, coupled with inadequate scrutiny procedures, makes the whole scrutiny process incredibly difficult. Another problem is that the breadth of the powers in Bills which enable Ministers to take action, but do not define on the face of the Bill the limits and scope of that action, are very broadly drawn. That makes scrutiny incredibly difficult.
We also have amendment of legislation going through both Houses, and that adds layers of complexity. Particularly in the House of Lords, Members seek to introduce scrutiny constraints of the kind we have talked about in respect of the European Union (Withdrawal) Act. That is just additional complexity, which then hits civil servants trying to work out which powers they should be laying instruments under, and which scrutiny measures apply. For people who have to interpret and implement the law, it becomes ever more difficult.
I hope that one aspect of the review process would be to simplify some of those areas, with things like consolidation and so on, to help the process. However, given the scope and scale, I do not think that can be done by December of next year.
Stella Creasy
Q
Sir Jonathan Jones: I am not in the civil service, as you know; I am on the other side, advising clients about what the effect of the Bill will be on their businesses and so on. This was always going to be a very complicated exercise, including for the civil service. We are leaving one legal order and, in one sense, we are out of it—we are free—but the legal constitutional consequences of that were always going to be very complicated, because we had this huge body of law that over decades had been integrated into UK law. We were not keeping a running tally throughout that time of the laws that we might one day want to change, because they had come from a particular source. They were enmeshed it all sorts of different ways with UK law.
As soon as we left, we had to begin the process set out in the European Union (Withdrawal) Act 2018, which was about identifying what retained EU law needed to be changed in order for it to work operationally and technically. That was the process that was done with the 2018 Act, and it involved, as I think you have heard, many hundreds of sets of regulations to cure deficiencies in the language of that legislation. That was complicated enough, and it is possible that things were missed. There are certainly examples of some changes having to be made multiple times because they were not got right the first time.
That was complicated enough but at least, if something was missed, the law did not fall away altogether; it could be corrected later. What was being done then was an essentially technical exercise to keep the pre-existing law and to make it work as far as possible, in a way that provided continuity and certainty for users. What we are talking about now is an exercise of a completely different order. This is about changing policy, potentially getting rid of some laws and, in some cases, deciding what replaces them.
This is an immensely more complicated exercise even than the one that has already been done, and the civil service will not have started with a pre-existing list, however authoritative they are trying to make it. There is therefore a risk that as Departments perform an audit, or as the National Archives help with that process, additional laws will be found. There must be a risk that some will be missed altogether. If that is so, again as you have heard, the consequence of the Bill is that the law will fall away altogether on the sunset date, and you will not have the option of making a correction. Ministers, if they wanted to, would have to come back to Parliament with a Bill to replace or change the law. That is the complexity of the exercise.
Mr Fysh
Q
I have two questions. First, how else could you inject such urgency to get this done quickly, other than through what has been proposed? Secondly, we have heard a lot about the permanence of the falling away—this is your contention—of the laws because of the sunset, but is it not the case that in various clauses, such as clause 2(1), and clauses 12 and 13, there are powers for a restatement or reproduction of different things up until 2026 should it become necessary? Is that not an adequate safeguard mechanism should there turn out to be something that the taskforce approach, which should be very competent, has missed?
Dr Fox: On the latter point, yes—there is provision to extend the sunset through, as you say, to 2026, but that applies to the piece of retained EU law that you know about and are saving and assimilating, and that you will then have the option to amend later. The concern is that if you have not identified and saved it, it could fall away and you could then have that problem. There is also the prospect that you end up with a patchwork quilt of sunset dates, because it could be before 2026.
There are issues about at what point in that process, prior to December 2023, the Government would identify what they intend to do, either with the individual pieces of retained EU law or sections of retained EU law, which will introduce uncertainty. What we have proposed is to do that in a slightly different way: that is, take away the cliff edge where everything falls away—unless you choose to save it—and use Parliament as an ally in that process.
I completely understand the concern about internal inertia, particularly in the final two years of a Parliament and in these current socioeconomic conditions, where there are lots of capacity pressures. However, it seems to me that you could use Parliament as an ally by, instead of having cliff edge dates where legislation and law falls away, having dates in the process, possibly linked to your taskforces, where there are statutory reporting requirements to Parliament by Government Ministers and Departments and where Select Committees could be engaged in that process by scrutinising those reports.
You could set out what you want the Government to report on—what are their plans, what is their implementation timetable, what progress are they making, as with the EU withdrawal Act process for the statutory instrument programme; you could engage the National Audit Office in monitoring implementation of that; and you could have reporting. One of the things that wakes up permanent secretaries and others in the civil service is the possibility of having to appear before a departmental Select Committee and report on a lack of progress, or the fact that their plans are failing. Your model of taskforces to ensure consultation, coupled with statutory reporting requirements, through to a deadline of 2026 or 2028—whatever you choose—would be a better approach, because you could still achieve what you want to achieve but reduce the risk of missing something.
The Chair
Thank you. I have got a few more questions to get in before five minutes past. It was the first or second question, Marcus, which perhaps Sir Jonathan could answer, if you can remember it?
Mr Fysh
It was whether there are in fact powers to bring back things that have been sunsetted, such as in clause 13.
Sir Jonathan Jones: The short answer is that the powers to extend and save do not work if an instrument has been missed altogether by the time you get to the sunset date.
Mr Jones
Q
Dr Fox: It will probably not be that dissimilar to what we were talking about in terms of what we went through with the Brexit process. On sifting, the process proposed is that all negative instruments will be laid before the sifting committee in draft form. They would have 10 sitting days to decide whether to upgrade it to the affirmative procedure. The implications for parliamentary time will depend on what their decisions and recommendations are and whether the Government accept them, and therefore whether there has to be a delegated legislation Committee.
So yes, the potential is for an increased number of delegated legislation Committees. The reality is that doing all that before December 2023 is clearly nigh-on impossible; if your deadline is 2026 or 2028 and you smooth it out over time, then it is achievable. Again, it will depend on what the numbers are and what proportion of negative and affirmative instruments there are, depending on what the Government propose to do.
Alex Sobel
Q
Dr Fox: It would depend on what the enhancement was—improvement, but if the improvement implied obstacles to trade or innovation, financial cost or administrative inconvenience, then no, it could not. It is hard to see how the kinds of enhancements that have been talked about—for example, in relation to animal welfare—would not necessarily imply an administrative burden; they therefore could not be done under this provision. That said, my understanding is that the former Secretary of State who was the architect of the Bill took the view that it was not appropriate for imposing new regulations through delegated legislation. That is not a bad thing, but the problem is that the nature of the exercise does not work in that context, because of the cliff edge.
Sir Jonathan Jones: May I add a brief comment? First, the power in clause 15 is undoubtedly very wide, so the Minister has huge discretion in deciding what is appropriate. The test about regulatory burdens is quite a slippery test, not least because the assessment is whether the overall effect of the change is to increase regulatory burden. All sorts of factors might weigh within that burden. It may be that the Minister decides to increase some procedural burden and reduce some other, and makes the assessment that overall the effect is to reduce the burden. Within that, however, could be all sorts of complexity. It is very difficult to predict in the abstract exactly how the power might be used.
Paul Blomfield (Sheffield Central) (Lab)
Q
Sir Jonathan Jones: They will all be doing their best, I have no doubt. The example we have is the one already mentioned, which was the process gone through under the 2018 Act to identify the laws that were going to be carried forward as retained EU law and to work out what changes to those were necessary to make them work. As I said, that was complicated enough, and some things were either missed first time around or needed to be amended more than once, because they were not got right.
I was in the civil service for the first part of that process, and I helped to set it up and saw it happening. Of course civil servants do their best—Government lawyers were drafting like crazy to get the relevant regulations done in time, and by and large I think that did work. I am sure some things were missed, but the consequences for missing something then was not that we had a great gap in the law, but that we would have a technical flaw that later on could be cured. This is of a different order, but I will not repeat myself.
What can I say? They will be doing their best. There must be a risk that things will be missed, and the timescale set for doing this is much tighter than the time that was taken to do the previous exercise, hence the concerns you have heard us express.
The Chair
Thank you very much. I see no further questions, but I think a point of order is about to come.
Justin Madders (Ellesmere Port and Neston) (Lab)
On a point of order, Sir Gary. With reference to the Minister’s clarification earlier in respect of the story about the National Archives, from what she said I understand that that was work commissioned by the Department. I seek your guidance on a process by which the Committee will have the full information about that report and, in particular, on whether more laws will be covered by the ambit of the Bill. The situation is unusual, but a written statement by the Minister or a letter to the Committee might be appropriate as a way ahead.
The Chair
That is not a point of order for the Chair. I know the Minister—a very helpful Minister—will have heard the point, and I am sure something positive will be forthcoming.
The Chair
Nodding is going on. I thank the witnesses for their expertise and advice.
Examination of Witnesses
Tim Sharp and Shantha David gave evidence.
The Chair
Colleagues, we have until 3.35 pm for this session. Will the witnesses please introduce themselves for the record?
Tim Sharp: I am Tim Sharp, senior employment rights officer at the Trades Union Congress, which has 48 affiliated trade unions representing 5.5 million members.
Shantha David: Hello, and thank you for having us here today. I am an employment law solicitor. My name is Shantha David. I am head of legal services at Unison, the public sector trade union, which has 1.3 million members, 75% of which are women.
I have listened to some of the evidence, and there is a lot of discussion around process. I, on behalf of the union, would quite like to talk a little bit about the effect that this Bill will have on employment laws and workers.
The Chair
Thank you. I am sure that some of the questions—perhaps even some of the early questions—will draw that out from you. I call Justin Madders.
Justin Madders
Q
Shantha David: As we know, the Bill in the abstract looks at removing EU-derived laws. What we do not understand is how, if the provisions are sunsetted, that will strip away some very basic employment rights. I thought I would set some of those out.
For example, through EU-derived provision, the UK allows for 20 days of statutory annual leave. That will no longer survive if the provision is sunsetted. There is also protection for eight additional bank holidays, which is derived from the UK but is contained in the working time regulations. It is unclear whether those provisions would go, along with the 20 days of statutory leave, leaving UK citizens with no provision and no statutory annual leave entitlement.
Other typical basic employment rights are things such as the TUPE—transfer of undertakings (protection of employment)—regulations and protections, which I am sure you will know about. Those preserve an employee’s employment where their employment is outsourced or brought back in house, or where an employer’s business is bought out by another. Those employees are protected from dismissal. Their terms and conditions are also protected from being varied because of the transfer. If TUPE legislation goes, those sorts of employees could be sacked with no legal recourse, so it is unclear what would happen to them.
Family-friendly provisions are contained in a variety of different legislation. They are derived from the EU, as well as through Acts of Parliament. It is a tapestry of rights. Basic rights to maternity and paternity leave fall under the Employment Rights Act 1996, but the specifics in terms of the length of leave, who is eligible for that leave and payment of leave comes through EU provisions. Given the lack of information, it is unclear what will survive and what will face the chop.
There are other protections, such as part-time worker regulations and fixed-term regulations, which allow for parity of treatment for those types of workers. Again, those provisions will disappear overnight.
There are other provisions, such as the Equal Pay Act 1970. There are certain facets of that Act that are derived from Europe. Where there is a single source of payment for people’s terms and conditions, an employee can compare themselves with employees at a different establishment. Again, there are cases in the tribunals and courts at the moment dealing with this particular point. Removing the principle of direct effect will mean that these women in particular can no longer rely on the principle of equal pay for work of equal value. These are just some of the rights. There are many more, but we will provide written evidence if that is helpful.
Justin Madders
Q
Shantha David: Yes, the TUPE provisions provide for certain types of service provision changes and protections, particularly for outsourcing and insourcing. These are UK-derived provisions that survived and were potentially updated in the 2014 TUPE regulations. It was interesting at that time because the consultation responses said there was a certain level of certainty in the provisions and to keep making changes was unsettling for businesses. It was businesses that came out most loudly saying, “We all know where we stand at the moment. Let’s leave this piece of legislation alone.” Removing it altogether will create a great deal of uncertainty and take us back to the ’70s and ’80s when we did not know quite what was going on. The effect will be to block up the courts and tribunals, which are already under-resourced. We know of the delays and backlogs in the court system. Trying to rectify and understand how the laws will work if TUPE is removed is very hard.
Justin Madders
Q
Tim Sharp: Following on from what Shantha said, it is clear to us that these rights are not some sort of additional “nice to have” rights, they are crucial ones. They are particularly crucial for low-paid and vulnerable workers, and particularly the protections for part-time workers, for agency workers and for security guards and cleaners who are being transferred from one company to another.
At best, the uncertainty means that more things will be fought out in the courts. If you are a low-paid worker holding together multiple jobs, going through that process is both expensive and more than you can probably cope with. At worst, those rights go completely, so we are really worried about the impact it will have on vulnerable workers in particular. When you talk to business groups, it appears to be bad news for good bosses who want to do the right thing and follow what the law says. It is great news for bad bosses who do not care either way and they will have more freedom to do what they like. We are really worried about the impact of the legislation as it stands.
Ms Ghani
Q
The UK is leading in a number of these aspects. We were the first to introduce two weeks’ paid paternity leave in 2003; the EU has only just legislated for this. We have the highest minimum wage if you compare us to France, Germany and Japan. We are leading on paid bereavement as well. We have far more maternity leave with over a year; the EU has just 14 weeks. In April 2019 we quadrupled the maximum fine for aggravated breaches of workers’ rights, so the assumption that we are somehow going to fall into the 1970s, creating an atmosphere of insecurity, is not healthy.
I am sorry; I will get to the point and ask my question. The Government have stated many times in the past few years that we will not reduce rights and protections as we leave the EU, and the Bill contains powers that enable the Government to preserve and codify the REUL in a way that will incorporate it fully into UK law. What basis is there to be fearful of those rights diminishing? I do not want to hear speculation—we do not have enough time. I want to understand what basis there is.
Shantha David: I do not think this is speculation because, unfortunately, the Tableau does not provide a full list of legislation that is due to go. Without knowing what that is, it is impossible to know what will stay and what will go. It is imperative that the Government produce a list. The Tableau is the most incomprehensible piece of equipment. You have to put in random words to try and identify whether certain pieces of legislation will remain or go. The working time regulations contain the provision for the eight bank holidays. Whether they stay or go will be down to the Government, of course, but at the moment we do not know, and that is the biggest problem. It is the lack of clarity that is causing us the biggest headache.
Also, we are talking about 2,400 or 3,800—whatever the number is—pieces of legislation that are due to be sunsetted within a year. I understand they will simply go away at the end of next year unless something positive is done to replace them. If that is the case, yes, we will lose our rights to the 20 days of minimum annual leave entitlement. Women, who tend to be part-time workers, will not have the protections against dismissal and parity of treatment. And fixed-term workers, who also tend to be female, will not have their protections. Women who want to go back to the workplace and have the same employment and protection will not have that protection. You might think that is conjecture, but without knowing anything else, what else is there?
We need to have a comprehensive list of the legislation that is due to be affected. Once we know that, perhaps then we can be consulted as trade unions, as individuals and as members of the public so that we can have our say on what we want to keep. I do not think the Government intend to simply remove all legislation that assists workers and employees. I cannot imagine that that must be what the Government wish to do, so it would be helpful to have that information in front of us so that we can respond.
Stella Creasy
Q
Tim Sharp: No, we have not had those conversations. We are still in the dark. We are really concerned about the array of rights that have been set out so far today. There are lots of health and safety laws as well and things like protection for pregnant workers—there are lots of protections—but, so far, we do not know. It seems we are taking a shortcut to an unknown destination.
Stella Creasy
Q
Shantha David: Just to clarify, the 20 days are derived from Europe. The additional eight days were because, historically, those eight days were incorporated into the 20 days. To ensure that people had the additional eight days of bank holiday, they were allowed for under UK law, but it is contained within the same piece of legislation, which is where the confusion might arise.
Stella Creasy
Q
Shantha David: I think it is worse than that, actually; we will not have the 20 days at all. We will have the eight days of bank holiday only if they are taken out of the current regulations, presumably, and put somewhere else. If the regulations go altogether, regulation 13A, which talks about the bank holidays, will go with them.
Mr Fysh
Q
Shantha David: It would be helpful, though, if that were in writing. I am grateful for your words, but as a lawyer it would be helpful to have a full list of what is included. If that piece of legislation, say, is sunsetted and introduced at a later date, there will be workers who do not have access to those laws. That is a breach of access to justice as well.
Mr Fysh
That would be a strong incentive for the Government to get it right.
Shantha David: Indeed, but the timing is an issue. There is only just over a year to identify the pieces of legislation, and, as we mentioned, they are a tapestry of rights; we do not know where one right begins and another ends. I recommend the Employment Lawyers Association paper, which sets this out clearly.
Mr Jones
Q
Tim Sharp: We have raised our concerns about the protection of workers’ rights on a number of occasions when there has been speculation in the past, and have received lovely assurances, but I do not think we have met BEIS Ministers—there have been quite a few lately—in recent weeks. We certainly have not had the confirmation on workers’ rights. We have not been told if they are being retained.
Mr Jones
No, can Mr Sharp answer this? He is the person who has had the meeting.
Tim Sharp: We have met BEIS officials as the TUC. Have we asked for assurances? We have asked for information on what is planned on workers’ rights, and we have not been given any information on what is intended.
Mr Jones
Q
Tim Sharp: It would be lovely to think that the Government will retain the rights as they are, but even in this benign scenario—it would be great if it happened—we are still going to have great chaos. Let us say that all the regulations are restated. We still have all the interpretive principles and the case law falling away. It has taken years of litigation to work out what entitlement workers have to carry over sick leave, for example. We do not know what the position might be after this Bill is passed. If you are a worker or a rep in a workplace, you do not want to be going to tribunal and to court to settle all these matters again, which is effectively what this Bill does. You want to be able to have a conversation—
The Chair
I think you have pressed far enough on this, David. I would like to hear from Shantha.
Shantha David: Thank you very much. I am just going to remind Mr Jones that the equality impact assessment does identify that the removal of laws will have a detrimental effect. I am not sure that that is an assurance, because it is not. Beyond that, I do not know what help we have. I do not have access to Ministers in that way. It takes a while to get an answer.
Much like Mr Sharp was saying, the only way to clarify legislation as we go along and to get certainty in the law—we will not have it if provisions are sunsetted—is via litigation. That is something I am able to talk about. Litigation is costly, and pursuing appeals in the Senior Courts will take a long time because of the delays I mentioned. Given that tribunals and lower courts will no longer be bound by retained EU law, there is also the question of how long-established principles of precedent would work, and whether referrals would have to be made from tribunals and lower courts to the Senior Courts, which is what is envisaged in the Bill—either to go to the Courts of Appeal in Scotland, Northern Ireland and England and Wales, or to go directly to the UK Supreme Court. We are not aware—there is nothing mentioned in the paperwork, which is the only thing we have to work on—that that will be resourced in any way. We already know that it takes at least a year to get to the UK Supreme Court. There are only 11 justices. I am unclear as to who will make those decisions around interpretation.
Justin Madders
Q
Shantha David: Absolutely. If it is the Government’s intention not to get rid of workers’ rights and legislation that protects employees, of course it would be a lot simpler to simply set out what is protected.
Stella Creasy
Q
The Chair
Let us not stray too widely into Beecroft, because we are considering this Bill, but an answer would be helpful if it is relevant to this.
Stella Creasy
But it is relevant as an element of employment rights.
Shantha David: The difficulty we have here is the speed at which this thing is happening. It is not about whether you want EU-derived legislation to exist; it is about being able to have a considered view on the employment provisions that exist for workers, and to ensure that employees and employers are not mired in litigation forever and a day. The costs of this are incredible, and I think that is not completely understood. The costs of litigation are profound. If there are to be clear exceptions, and if it is very obvious that certain employment legislation will survive this cull, perhaps that should be specified. That would be very helpful.
Mr Fysh
Q
Shantha David: We would be more than happy to help.
Tim Sharp: Absolutely; trade unions would want to engage in such a process. I am not sure that it would stave off the scenarios we see, as the exact meaning of different rights would still end up being litigated. Even in that scenario—great, we would love to have those conversations, as it is really crucial that workers’ voices are heard, but the Bill will still cause immense confusion and costs to business and workers.
The Chair
Thank you very much indeed for your evidence. We now move on to our next set of witnesses. We will slightly change the language and tone of proceedings, as we will be discussing the environment, which is an ever important issue.
Examination of Witnesses
Ruth Chambers, Dr Richard Benwell, David Bowles and Phoebe Clay gave evidence.
The Chair
Thank you very much to our next set of witnesses. We are starting three minutes early, but we expect a Division at about 4.15 pm. If that is the case, we will try to end our session when the Division bell rings. Will you please all introduce yourself for the record?
Ruth Chambers: Good afternoon. I am Ruth Chambers. I am senior fellow at the Green Alliance, representing the Greener UK coalition of environmental groups.
Dr Benwell: My name is Richard Benwell. I am from Wildlife and Countryside Link, which is a coalition of 67 environmental and animal welfare charities.
David Bowles: I am David Bowles. I am head of public affairs and campaigns at the RSPCA, and I am representing the animal welfare stance.
Phoebe Clay: I am Phoebe Clay. I am co-director of Unchecked UK. We are a non-partisan network of 60 organisations making the case for strong environmental and social protections.
Alex Sobel
Q
Dr Benwell: Thank you so much for the question. Link has given evidence to lots of Bill Committees over the years—I have given evidence to some of the members of this Committee—and I do not think we have ever been moved to say at this stage in a Bill that it should simply be withdrawn. That is our view of the Bill at the moment.
We see the Bill playing out in perhaps one of three scenarios. In the most benign scenario, you could imagine a situation where the whole body of environmental EU retained law is simply restated and moved across on to the UK statute book as assimilated law. Even in that most benign scenario, we see a situation in which Parliament and the civil service have spent huge amounts of time, likely costing millions of pounds, in delivering the shift across. Even more importantly, we see a huge opportunity cost in terms of lost time to actually make environmental improvements. You said, Mr Sobel, that DEFRA has already had some capacity crises, and it is true. All sorts of important DEFRA agendas—the environmental principles, the environmental targets, the river basin management plans—and a whole raft of pieces of vital DEFRA work being proposed by this Government are now extremely delayed, and that would only be made worse by that scenario.
The second scenario is the cliff-edge version of the Bill, where you imagine huge swathes of potentially vital environmental laws falling off the cliff edge at the end of the sunset. I do not think any of us imagine that the Government will knowingly let things like the habitats regulations, the water framework directive or pesticides rules hit the buffer. I do not think anybody thinks that is the intention, but the fact is that we imagine there will be mistakes along the way. If you look at the process following the European Union (Withdrawal) Act 2018, there were lots and lots of wash-up SIs at that point from all the mistakes that were made by DEFRA alone—simply to get through the legislation at that point. With this version, so much more is on the table. Things are likely to be missed. Mistakes are likely to be made.
The third scenario is one of change and ministerial fiat to mess around with things along the way. The delegated powers in the Bill are some of the most extraordinary that I have ever seen. They give Ministers the power to change things almost without scrutiny along the way. The third scenario, and probably the most likely, is that we see elements of law being cherry-picked, either to be taken out or changed over the next 12 months, without any opportunity for people to amend, scrutinise or improve.
All three are really terrifying scenarios, and we can talk about why they come through the Bill later, but our view at the moment as Wildlife and Countryside Link is that the Bill is irredeemable and should be withdrawn.
Alex Sobel
Q
Ruth Chambers: Absolutely, and I endorse what Rich has just said. One other implication of the Bill relates to environmental law and policy making across the rest of the UK. I know we are very much focused on Whitehall today, but how, for example, will this process be conducted in Northern Ireland without a functioning Government? How are stakeholders going to be involved? That is not clear to us. We know that the Department of Agriculture, Environment and Rural Affairs in Northern Ireland has identified 600 pieces of rule that pertain to it as a Department. Again, where is it going to find the capacity to deal with that?
In relation to Scotland, there is an interesting angle, because the Scottish Government have a legal commitment to keeping pace with the EU. What is the interplay between that legal duty and the programme of rule in relation to the Bill and the Scottish Government? We note the concerns raised by Senedd Cymru, the Welsh Parliament, that the Bill risks imposing a regulatory ceiling on ambition and distracting from programmes in Wales. Those are some additional impacts to the ones identified by Richard.
I will come back to DEFRA, which is where we are perhaps more qualified to speak, and look at some numbers for a minute, in case that is of assistance to the Committee. We have heard talk of the previous EU exit statutory instrument programme, which we were involved with. Looking at the numbers of SIs involved in the two years of that programme, there were 108 in 2018 and 161 in 2019. That was a huge undertaking for the Department. As you have just said, it took a lot of resource from outside DEFRA, which put in some really innovative consultative mechanisms to help it to cope with that number of instruments.
By contrast, under this programme, the dashboard shows that DEFRA has 570 published pieces of REUL, but that is not the final number. We understand from the Department that the number is 835 and counting. That is not yet a published figure, and obviously we will need to have it confirmed by the Department, but that is a huge increase. The EU exit SI programme will pale into insignificance when you look at those numbers, which will require resource housed in legal capacity and technical policy capacity, and will require asking the expert stakeholder community as well. There is a lot of work to be done.
The Chair
I just want to intervene before the other witnesses give their answers. This is all very good stuff, but the answers will need to be quite a bit shorter or we will run out of time.
Alex Sobel
Q
David Bowles: I concur with everything that has been said. Two years from now will mark the 50th anniversary of the first ever animal welfare law passed at the EU level. The RSPCA has worked out that since that date in 1974, we have had 44 different animal welfare laws.
I will make one additional point. Obviously, animal welfare plays out very resonantly with the public and, indeed, with the Government. The Johnson Government came in with five different manifesto commitments on animal welfare and a pledge to improve animal welfare. It is quite ironic that the Bill, in Richard’s cliff-edge scenario, could get rid of those 44 pieces of legislation.
An additional issue that I do not think the Committee has looked at is that of devolution, which Ruth touched on. As you are probably aware, the Senedd yesterday put out advice on the legislative consent motion to reject the Bill, which it does not believe is good for the Welsh Government. Curiously enough, although Ministers of the Crown have the chance to delay the Bill’s deadline from 2023 to 2026, that option does not apply to Welsh Ministers.
Most animal welfare legislation is devolved—we have worked out that only 13 of the 44 pieces of legislation are reserved, while the rest are devolved—so it is up to those in Wales to decide what to have in their country, such as the battery hen ban and a vast array of other farm legislation, including on the live transport of animals. They will have all those things only until 2023 because Welsh Ministers have no option to extend that deadline. Only Ministers of the Crown have that option, and that really worries me.
Alex Sobel
Q
Ruth Chambers: All the groups you mentioned would be immensely helpful to the various Departments in identifying and commenting on the body of REUL that belongs to them. The important question is how such consultation should be conducted. For us, it should be hardwired from the outset and conducted in a transparent and structured way. Navigating the complexities and time constraints of consultation will place a huge burden on businesses and civil society. The more that that can be signalled in advance, the easier it will be for us all.
Last time around, the Department put in place a reading room on statutory instruments, for example. That was a helpful vehicle that gave stakeholders of all persuasions some extra time to look at the statutory instruments in question. It was just one mechanism that was put in place, but that sort of thing probably is not sufficient given the scale of the work that we are talking about. The more structured the engagement can be, the better, but it will be a big undertaking. It goes back to clarity on just how many pieces of law we are talking about, so that we know which laws are in scope and which are out of scope.
Alex Sobel
Q
Phoebe Clay: Looking further from that list, one important facet of that process is missing, which is people—the public. This is not an expectation of the public, certainly not during the referendum and certainly not in the past five years. What we have done a lot of is talk to people—your constituents—about their attitudes and what they value in relation to regulations. We find very little appetite for a process of this kind. We have been doing polling consistently over three years; all our polling suggests that a good two thirds of the British public think we should retain or, indeed, strengthen the level of standards that we had as members of the European Union. We find very little evidence that people see Brexit as an opportunity to deregulate—quite the opposite. People want to play to a sense of British standards, of the march of progress towards a better—and more—level of protection. In terms of what we value in the UK, this goes very deep. I would echo what my colleagues have said in relation to transparency and having in place a process whereby there is a level of democratic engagement with the Bill.
Alex Sobel
Q
Dr Benwell: As you say, that order is the main plank of action against invasive species. If we were imagining that the Bill is about reducing costs, far from it. If we were to lose that piece of regulation—the cost of invasive species in the UK on businesses at the moment is already in the billions. I think the sum is about £4 billion per year at the moment for the cost of invasive species on, for example, water companies. That would only multiply if we were to see those regulations lost or weakened. There are several areas where those kinds of rules exist only in retained law. For example, think of air quality threshold standards, or provisions such as the habitats regulations for protecting rare species or for providing the gold standard of protection for habitats. Think of the environmental impact assessment and the strategic environmental assessment rules. In some areas there is overlap, but in each of those areas EU retained law adds a really important element, over and above what existed in domestic law.
In some ways, it is a bonkers distinction. We have the term of “assimilation” in the Bill, as if we are taking something that is currently alien and making it British. It is already UK law; it has been on our statute book for a very long time. It has been assimilated in so far as businesses and people know how to work with it, expect it to operate and feel as if it is part of our law. There are loads of areas where the law can be improved, but simply choosing to tackle this block as if it were a special thing is a bad way to target areas for improvement. We could do much better through consultation, and by doing proper impact assessment of the laws that we know need improvement.
Ms Ghani
Q
My question is for Ruth Chambers. The review of the substance of retained EU law has uncovered more than 500 pieces of retained EU law owned by DEFRA. Many of those pieces of legislation relate to environmental regulations and protections dating back 20 years. Surely there is merit in reviewing the totality of those regulations, as the Bill provides for, to see whether they can be consolidated. Do you agree or disagree?
Ruth Chambers: It is certainly true that the body of retained EU law is ripe for being improved. That is what we would hope the processes of the Bill, or anything else, would lead to. Our concern is that the Bill would, either accidentally or if powers were misused in the future, not lead to those sorts of outcomes. Instead of the processes in the Bill, we would prefer a much more targeted approach that looks at retained EU law, and that picks the areas where the benefits to business are the greatest and environmental outcomes could be maximised, which Minister Trudy Harrison said, in answer to a written question, is DEFRA’s aim for reviewing retained EU law.
We are not opposed to reviewing the law, and we are definitely not opposed to improving it; we just do not think that the processes in the Bill will naturally lead to that outcome, especially when you look at clause 15, which we might have time to talk about. It basically makes the direction of travel of the Bill about deregulation rather than anything else.
Ms Ghani
Q
Ms Phoebe Clay, previously your organisation has accused the Bill of threatening to interrupt the Government’s target to halt the decline of nature in England by 2030. Can you set out how you consider that the Bill could interrupt a legally binding target that has been established by the Environment Act? We have a lot of lawyers this morning, and we want to contrast their evidence with yours.
Phoebe Clay: I think that is an ambitious target, and regulation has to be part of the pursuit of it. As Ruth has just said, the intent in the way that it is expressed at the moment is deregulatory. Our view is that, if that intent is pursued, we will struggle to stay on course with those broader objectives. It is worth stressing that is not just my organisation. Like Richard, we are a coalition. We represent a whole series of organisations across the spectrum, ranging from the Royal Society for the Protection of Birds to women’s institutes and a number of organisations working on worker protections. I guess it is worth underlining that this is not our position as a small coalition, but the position of all the other organisations that have signed up to that.
The Chair
I think it is only fair to give Dr Benwell a chance to come back on the issue of neutrality, very briefly.
The Chair
Q
Dr Benwell: Thanks, Sir Gary. Just to emphasise, we definitely see areas where EU-derived law can be improved, and absolutely share that intention. I could list quite a number for you now. Here I am representing not my personal views but those of the coalition. It is extremely clear from our published materials that the strong view of the environmental sector is that, while we share the intention of improving environmental law, we do not think that this process is the way to achieve it, because of the sunset clause, the deregulatory lock-in and the overly generous delegated powers to Ministers along the way.
Ms Ghani
Q
Phoebe Clay: I guess that we just want the guarantee that those environmental protections will remain in UK statute. At the moment, we do not think that the other providers—
Dr Luke Evans (Bosworth) (Con)
Q
Dr Benwell: No.
Dr Evans
Q
Dr Benwell: I am not sure that is the crucial part of the Bill from an environmental perspective; the crucial part of the Bill from our perspective is that it potentially or inadvertently allows for the loss of large portions of the statute book and for changes to environmental law without scrutiny. It also locks in an old-fashioned view of regulatory costs, seeing cost to business as the only way to judge the costs of regulation.
Dr Evans
Q
Dr Benwell: I do not think that we are the only organisation to have said that. I think that the Bar Council included the suggestion that the Bill should be withdrawn in its evidence. Wildlife and Countryside Link does not speak as a single body; it speaks on behalf of many of our members. The RSPB, for example, has been very clear in saying that the Bill should be withdrawn, as have lots of our members.
The Government might find features of the Bill they could bring forward separately. I think that the question of supremacy is one where we would see some risks in the interpretation of the law, but that is a political choice and, in itself, it is not the bit that we are most worried about. The bits that we are worried about, however, are so deeply ingrained in the fabric of the Bill that we suggest starting again.
On the sunset clauses, if you look at the House of Commons Library interpretation of what a sunset clause should do, it is there to stop emergency powers existing in perpetuity, giving Parliament a chance to review them. The Bill is taking, en bloc, huge amounts of environmental law and saying that they should potentially end within a year; it is a very strange amplification of sunset powers. On delegated legislation, the provisions in clause 15 that suggest Ministers should be able to bring forward alternative provisions without even tethering that to the original purposes of the regulations on offer are extremely broad delegated legislation powers. Another aspect that is deeply ingrained in the Bill is the idea that no alternative provision should be brought forward if it imposes new costs on business or hampers innovation and that sort of thing. That is an old-fashioned mentality that sees the costs to business of implementing regulation as the only view of the point of that regulation. Actually, if you take a deregulatory approach, it does not reduce costs; it simply transfers them from the businesses responsible for delivering them to the public. Those are all part of the weft and warp of the Bill, and that is why we think that the whole thing should go, rather than starting to amend it.
The Chair
That is clear, thank you. I will bring Ruth in on this, and then we will go to Stella Creasy. Ruth, you wanted to come in.
Ruth Chambers: Thank you, Chair. I have two points of clarification to make. First, I confirm that Greener UK as a coalition also wishes the Bill to be paused and withdrawn. That is not inconsistent with our position that we also believe that the body of retained EU law could be improved and that a process could be devised to do so. I feel that there was a little conflation of those two points but, to be absolutely clear, they are not the same thing.
Secondly, Minister, may I come back to your point about environmental targets, the 2030 species recovery target and the relationship with REUL? The relationship is a rather straightforward one: the opportunity costs that will inevitably come with the Department having to review, assimilate and reform such a large body of law. In fact, the Government have already missed their first legal milestone on environmental targets, on 31 October. That is just one example of how this can have a serious impact—because of the sheer deliverability challenges.
Stella Creasy
Q
The Chair
We are all reunited, more or less. Stella has the floor. We will let you know in a moment what the ending time for this witness panel will be; we are still trying to work it out.
Stella Creasy
Q
David Bowles: There are many examples. I mentioned at the beginning of the session that there are 44 different animal welfare laws, but that is my assessment; if you look at the dashboard that the Government have set up, there are 16 that are not on the dashboard but are on my list. That gives you an indication of the uncertainty, although to be fair, the dashboard is one of the most opaque measures of what the Government are doing. It does not seem to be in alphabetical or chronological order, and going through the 570 laws under the Department for Environment, Food and Rural Affairs tab is quite onerous. I think it is uncertain about where it is.
The Bill applies not just to the UK, but to Wales, and probably 31 of 44 laws in my area of animal welfare are devolved. The Senedd and the Scottish Government, who have responsibility for them, are uncertain as well, because they are taking their lead from DEFRA. Yesterday the Welsh Government said they were not minded to work out which laws were devolved, which were not, and which came under retained law. They were going to leave that up to the UK Government. That just fuels the uncertainty.
Stella Creasy
Q
David Bowles: It could create huge uncertainty. Two things need to be worked out. First, what does retained EU law mean? As we saw today from the article in the newspaper, there seem to be more such laws coming forward. Secondly, which are devolved and which are not devolved? There could be a huge discussion about that. The Bill will have huge implications. There is not just the devolution issue, but the common frameworks issue, which is how the three Governments work out how to move forward on specific pieces of legislation. There is also the matter of the United Kingdom Internal Markets Act 2020, which is the legislation that allows free trade within Great Britain. There are huge implications for all those issues.
Stella Creasy
Q
Ruth Chambers: That is a really important question. Clause 15 and how it defines “burden” is one of our biggest concerns about the Bill. If you look at the passage that defines “burden”, it is everything from an administrative inconvenience to something that causes issues to do with profitability. What does it actually mean? It also does not seem to sit readily with the answer that DEFRA Ministers have given, which is that their intention, in reviewing that body of rules, is to improve environmental outcomes. How does that sit with reducing regulatory burdens?
Not many weeks ago, some Government Ministers were suggesting that environmental protections were regulatory burdens and should be removed. That is not the case, we believe, with the current Government and current set of Ministers, but it shows that things can move quite quickly. That is why the Bill needs to be watertight on these issues.
The Chair
Shall we move down the table? Dr Benwell.
Dr Benwell: This is a really problematic part of the Bill because, as has been said, “burden” is defined in purely financial and business terms. It imagines that the small cost that business might incur is not worth it for the environmental benefits that come out the other end. Of course even critical laws, such as the habitats regulations, can be improved. For example, you could define projects and plans better, so that you could take intensive land management in as well. Those are conversations we are actively having with DEFRA, and we want to find ways to do that, but those proposals simply could not be given effect through the Bill because of clause 15, which sort of sets out a deregulatory agenda. Altogether you see a lock-in of deregulation where you might otherwise find improvements. We want to improve the law, but the Bill does not allow us to do that.
David Bowles: I concur with the two previous witnesses. The Government came in with a manifesto commitment to improve animal welfare, and indeed they are looking, hopefully, to get rid of cages for laying hens and pigs, but because we are so uncertain about the status of the conventional ban on battery hens, which was agreed in 1999 and finally came into force in 2012, we do not know if that ban is to be scrapped. The Government are almost looking two ways on the issue, and that worries us.
We need reassurance that there is a transparent process for filtering the 570 DEFRA Bills, and a time period in which to do that. I concur with the other witnesses: we are not against improving legislation; of course we want to do that. We are not saying that the legislation is perfect, but there are a number of caveats, including the time period, the filtering process and the impact on devolution. All of that is so unclear that we need reassurance.
Phoebe Clay: You put your finger on it when you mentioned the word “burden”, Stella. That is a really problematic word from our perspective. If we were to frame the discussion around environmental, social and human protections, the Bill would probably be less problematic. We know that people see the rules as protections, and conceive of them as things that keep them safe, particularly at a time when people are feeling incredibly uncertain and under-protected. Shifting away from the idea that regulations are necessarily burdensome would be a really important step forward.
The Chair
We have until 4.33 pm, slightly to my surprise, so we have another 11 minutes to go. Minister, did you want to come in?
Ms Ghani
Q
David Bowles: indicated assent.
Saqib Bhatti (Meriden) (Con)
Q
Ruth Chambers: It is not, unfortunately. I think you have to see these things in their places. On the Environment Act 2021, you are absolutely right: it was groundbreaking legislation that the Government passed to do many things. It is an enormous Bill, as you know, because you were on the Bill Committee. It sets up the Office for Environmental Protection, and it passed law on resource efficiency and so forth, but in the main, it is new legislation. Part 1 ensured that some protections that we lost after we departed from the EU were put in place—for example, on environmental principles. Other parts are brand new, such as the requirement to set environmental targets.
That is, however, separate from this vast body of law that we are talking about today, which is inherited from the EU. It relates to some of the laws I have just been talking about, but also covers completely different areas—for example, pesticide regulation. The important thing is not to pit one against the other, but to make sure that we have a coherent and functioning statute book, in which primary legislation such as the Environment Act continues to work and to be given priority, and the body of retained EU law is treated with respect and improved in a manner that we can all get on board with. They are part of the same legislative picture, but they are not really in competition with each other.
Saqib Bhatti
Q
Ruth Chambers: It is great to hear you say that, but of course every Act of Parliament is only as good as the pace and vigour with which it is implemented. We mentioned that the first statutory deadline on improvement targets has unfortunately been missed. We very much hope and want to work with the Government to address that legal breach at the earliest opportunity. The Act is full of powers. It gives the Government the option to do a great many things, but of course it is only the Government who can decide to do them. We will support you all the way in putting those powers in place in the most ambitious way, but it is not sufficient to say that the Act is testament to the ambition. It has to be implemented, delivered and resourced.
Saqib Bhatti
Q
Dr Benwell: That is what the legislation enables. I do not have a particular view on that from an environmental perspective.
Saqib Bhatti
Q
Dr Benwell: I do not have an environmental view on that question. I completely understand the political point, and that is for Parliament to decide.
Saqib Bhatti
Q
Dr Benwell: Definitely, and things like the Environment Act are a brilliant sign of progress. The promise in the manifesto to have the most ambitious environmental programme on Earth was excellent, and if we can deliver the species target that is in the Environment Act to halt the decline of species by 2030, that will be the first time in the world any country has set and met a target like that—but it does not operate by itself. Delivery of that Act rests on many of the environmental provisions that are put at stake by this Bill, such as provisions on planning rules, species protection and water protection. They do not live in the Environment Act; the Environment Act builds on them.
There is definitely the chance to do things better, and to bring forward lots of the positive things that the Government have already promised in their environmental programme, but they risk being set back as a result of the amount of time that the Bill will take and the potential for mistakes that this Bill introduces. That is why we are worried about it, not because of any of the principles around sovereignty. That is not a question we have a view on. It is more a matter of the practicality and enormousness of the task in front of us.
Justin Madders
Q
Phoebe Clay: We have asked questions very generically, as you saw in the research that was published in October, and we have asked more specific questions. We find time and again that the majority of the British public opt for strengthening rules, including members of the public who voted to leave the European Union.
We find very little evidence of significant geographical differences. People in the south and north of England, for example, have similar views. Our research has been corroborated by research by others, including by Professor John Curtice after the EU referendum, the Legatum Institute and others, so we can state with a lot of confidence that the British public do not perceive these rules as burdensome. I think there is a real sense that they are protections, including the environmental rules, and there is a general sense that protections are something that we should aspire to, exactly as the Member of Parliament just mentioned. We should be aspiring for stronger standards than we had when we were part of the European Union, rather than weaker ones.
The Chair
That concludes this session. Thank you to our witnesses on our expert panel. We appreciate the evidence that you have given.
Examination of Witness
Angus Robertson MSP gave evidence.
The Chair
We are moving on to Scotland. We will hear via Zoom from Angus Robertson MSP, Cabinet Secretary for the Constitution, External Affairs and Culture in the Scottish Government. This session must end at 4.53 pm. Thank you for joining us, Angus.
Angus Robertson: Thank you for having me, Sir Gary. Hello to erstwhile colleagues.
The Chair
Lovely to have you with us, Angus. The first question will be from the shadow Minister, Justin Madders.
Justin Madders
Q
Angus Robertson: If you do not mind, I was told that I could briefly make a few points at the beginning of the session. If you would indulge me, I might be able to both answer the question and set out some of the concerns of the Scottish Government and, by extension, the Welsh Government—we have the same position.
Thank you for the opportunity to speak to you all. I know you have had a lot of witness sessions today, so thank you for your patience. It will come as no surprise to members of the Committee to learn that the Scottish Government have deeply held, fundamental concerns about the legislation, particularly because of the undermining of devolution. There is concern about the democratic deficit that it exemplifies, and there are concerns, as we heard in the previous session, about the potential deregulatory challenges. We would want amendments brought forward in each of those areas.
Fundamentally, the Bill is the result of Brexit, which was overwhelmingly rejected by people in Scotland and is causing real damage to our economy and our society. The Bill is yet another example of a policy agenda being imposed by the Westminster Government on people in Scotland against their consent.
Let me start with devolution and why that is important. I represent a Government who were elected with a mandate to maintain close regulatory alignment with the European Union and EU standards. I recognise that the UK Government have a different agenda, but the whole point about devolution is to allow diversity, and it would be entirely possible to reconcile the difference in approaches through agreed common frameworks. After the EU referendum, that exact approach was agreed between the devolved Governments and the UK Government, yet the United Kingdom Internal Market 2020 and now this Bill make that near impossible. The Bill would allow UK Government Ministers to act in devolved areas without the consent of Scottish Ministers or the Scottish Parliament; there is no requirement even to consult. The internal market Act is having an insidious and erosive effect on devolution; in contrast, this Bill is a direct assault on devolution.
The second concern is about democratic scrutiny. The Bill grants Ministers, including Scottish Ministers, powers to amend or abandon legislation with minimum democratic scrutiny. Mere inaction or oversight could result in important protections falling from the statute book. Far from the promise of Parliament taking back control through Brexit, the Bill sidelines proper and appropriate parliamentary scrutiny.
Thirdly, on deregulation, the UK Government have said that they want the Bill to “utilise regulatory freedoms” by “lightening their burden” on UK businesses. The businesses here that I hear from are not interested in discarding 47 years’ worth of protections. Businesses, workers, consumers and our environment all benefit from high standards and not from a race to the bottom.
In conclusion, the people of Scotland rejected Brexit by a margin of 24%, and there was a majority for remaining in the European Union in every single local authority area in the country. The more people in Scotland see of Brexit, the less they support it; a panel-based survey this summer found that 63% of people in Scotland would vote to rejoin the European Union. Given that level of support for the EU, I note with some sorrow Labour’s pro-Brexit position alongside the Tories, most recently articulated by Keir Starmer when he was in Scotland at the weekend.
To finish where I started, the Scottish Government are fundamentally opposed to the Bill and have lodged with the Scottish Parliament this very morning a recommendation that consent be withheld. Thank you very much, Sir Gary.
The Chair
Thank you so much for making your position crystal clear. Justin, do you have a follow-up question?
Justin Madders
Q
I wanted to ask specifically about some of the inconsistencies when it comes to the powers available to you vis-à-vis the UK Government. Am I right that you will generally have the power to revoke and amend regulations, but the power to extend the sunset clause is not available to you? Do you know why that distinction has been made?
Angus Robertson: Indeed. It runs contrary to the conversation that I had with the erstwhile Cabinet Minister with responsibility for this, Jacob Rees-Mogg. He was very keen to give me assurances that devolution would not be undermined and that Scottish Ministers in the Scottish Parliament would be able to exercise maximum control to fulfil our democratic mandate: to remain aligned with the European Union.
Different powers are being assigned to UK Government Ministers and Scottish Government Ministers in important respects, and that is problematic for us—as is the point of capacity. I do not know whether you want to come on to that, but it is an absolutely massive challenge given that we are a Government who have a legislative agenda already. If we want to remain aligned with 2,000-plus or, if the Financial Times is to be believed, 3,000-plus pieces of European legislation, many of which are about devolved areas, we are talking about massive displacement activity in our Parliament here in Scotland. That is hugely challenging.
Justin Madders
Q
Angus Robertson: We have begun to do that. I should say that when I asked Jacob Rees-Mogg—as the proposing Minister, you would have thought he might have known—how many pieces of legislation would impact directly on the UK Government but then also on devolved policy areas, he was not able to tell me. We have still not been told the scale of the legislative impact, but it will be very considerable. Consider what is devolved—environment, rural affairs, transport and a whole series of other things. It will necessitate the legal services of the Scottish Government and the Scottish Parliament spending a lot of time dealing with the consequences of this Bill.
The problem could quite easily be solved by the UK Government simply acknowledging that there is no demand for this to happen from either the Scottish or Welsh Governments and simply carving out devolved areas. It would remain on the statute book here. If colleagues down south want to go ahead with that, I leave that up to them. We did not vote for this, and we certainly do not want it to happen, yet our parliamentary process and the way in which Government operates here is going to be deluged by trying to deal with this proposal, to which little to no thought has been given as to how it impacts on the devolved institutions of the United Kingdom.
Ms Ghani
Q
Angus Robertson: The Bill confers significant powers on Scottish Ministers and UK Ministers in devolved areas. Where the powers are exercised by the UK Ministers, no role is afforded to the Scottish Ministers or the Scottish Parliament. In devolved areas, it is the Scottish Parliament that has a democratic mandate to hold Government to account. That is why we have consistently argued that where the UK Government have powers in devolved areas under this Bill, they should need the consent of the Scottish Government, which is of course scrutinised by the Scottish Parliament, in order to exercise those powers.
As it stands, the powers you highlight would allow the UK Government to make broad changes in retained EU law in devolved areas, including revoking and entirely replacing standards that we have inherited from the European Union. This Bill will introduce a massive democratic disconnect. I would hope that colleagues across the parties would realise that this is a huge challenge to the basic understanding of how devolution works.
I would be interested to know, Sir Gary, because we have not yet heard, how this will work now that the Scottish and Welsh Governments have both withheld consent for this legislation. We have the ability through the Sewel convention to say that this, as it stands, is not workable, practical, proportionate, and I could go on—
Ms Ghani
Please don’t; I think the point is crystal clear. So much of this is caught up in legal language. You made it clear that there are some powers that would allow you easily to align yourself to retained EU law. This Bill does not limit the powers given to Scottish Ministers in the European Union (Continuity) (Scotland) Act 2021 to align with EU law in areas of devolved competence. Rather, the Bill will give Scottish Government Ministers further powers to more easily preserve or sunset retained EU law within a devolved competence. These new powers sit alongside those given to Scottish Government Ministers in the 2021 Act. I can fully understand that you have perhaps had some unsatisfactory conversations with Secretaries of State, or not had the assurances you are constantly seeking, but the reality is that you would have far more authority than you are alluding to with regards to control of legislation with this Bill. [Interruption.] Let’s move the conversation on, because we are very short of time. If we follow your argument, there is a concern that the Bill will cause greater divergence between retained EU law in England and Wales and retained EU law in Scotland. Is that conflict a concern for you?
Angus Robertson: With the greatest respect, the point about devolution is that we are able to do things differently in different parts of the United Kingdom. That is the point.
There are two significant problems that I really hope colleagues understand the scale of. We do not wish the proposal to go forward, yet if it does, we are a Government who already have a legislative programme which is going to come under massive pressure over the next years, depending on when the sunsetting arrangements are finalised for, and we are going to have to legislate through primary and secondary legislation to retain alignment with the European Union. That is the first point. I would hope there is an understanding of that.
The second point that I have tried to underline is the ability of UK Government Ministers to, in effect, override the concerns of the Scottish Government. That is much more than a democratic deficit; it is an undermining of the devolution settlement in its entirety. I am sure that some colleagues on the Committee will have looked closely at the workings of the United Kingdom Internal Market Act 2020 and the common frameworks. In effect, they mean that decisions made in the UK Parliament in relation to England are then applied throughout the UK regardless of the view taken by Parliaments in Scotland, Wales or Northern Ireland. I hope colleagues understand the seriousness of the territory we are getting into.
Ms Ghani
Q
Angus Robertson: I am not talking about any laws returning to Westminster; I am talking about UK Government Ministers having the ability, in effect, to legislate in areas that are devolved. That is a totally different thing—
Ms Ghani
Q
Angus Robertson: They can in any area they like—that is the problem. That is the concurrent nature of the powers for UK Ministers and devolved authorities. It is clear to be read: it is a power that can be used. I cannot foresee exactly which Minister would seek to use such a power or for what purpose, but they would have that power. That should surely be a concern for everybody. Is it not?
Peter Grant (Glenrothes) (SNP)
Q
Angus Robertson: Yes.
Peter Grant
Q
Angus Robertson: Yes, it is. I believe the Welsh Government are withholding legislative consent, as are the Scottish Government. If the UK Government are true to the word of the erstwhile Minister with responsibility for this legislation, Jacob Rees-Mogg—when I met him on 28 September he said to me, in terms, that the UK Government would respect the Sewel convention—it is a moot point because they will not proceed. I hope they do not.
Peter Grant
Q
Angus Robertson: Indeed. First, the Bill could be drafted in such a way that it did not apply to Scotland or Wales. That would be the easiest solution: just limit the scope of the Bill to non-devolved areas. That is suggestion 1. Suggestion 2 is to amend it now to do that or to have a similar effect. Why proceed, given the serious concerns that have been raised by both the Scottish and Welsh Governments? I do not understand why the UK Government seem to be ploughing on regardless, given that there has been a dialogue and these concerns have been enunciated for quite some time now.
Peter Grant
Q
Angus Robertson: We know that the scale of the challenge is significant first, for the reasons that I have pointed out: we already have a legislative programme and a Government legal service involved in all the legislation currently going through the Scottish Parliament.
Now we have this additional challenge, which has not been properly quantified by the UK Government, who cannot even tell us what they believe to be the split between reserved and devolved. As I have outlined, we know in broad terms what devolved powers are—they cover very significant areas. Our estimation, which is still to be gone through with a fine-toothed comb, is that this will have an extremely serious impact on the ability of the Scottish Government and the Scottish Parliament to scrutinise legislation that would need to go through our process to ensure that legislation does not fall over the sunsetting cliff edge. That is very significant.
Should the retained EU law dashboard identify whether retained EU laws in scope of the Bill are devolved or reserved? Absolutely. Do we have any sense that that is going to happen? No, we do not. A lot of work will have to be undertaken, and it is a massive displacement effort from what we are trying to get on with. If the UK Government really want to respect the devolved settlement and listen to the Scottish and Welsh Governments, and do not want to break the Sewel convention, they should bring forward an amendment that disapplies the legislation either in whole or specifically in devolved areas. That would be the most sensible and, given what the UK Government Ministers have said to me personally, the most pragmatic way of going forward. If not, one can only conclude that what was said was not said in good faith.
The Chair
Thank you very much. We have one minute left. I am keen to bring in Stella Creasy for a quick question, and then Angus for a quick answer, please.
Stella Creasy
Q
Angus Robertson: I am all in favour of good intergovernmental relations. I have been doing this job since last year, and I have gone into conversations in good faith about any and every potential challenge. If that is one of them, I am happy to do so again.
The wider point is that we are supposed to have a range of measures that we can use to make devolution work, including the Sewel convention. We have subsequently agreed ways in which Governments in the UK should work together to push through potential challenges, and common frameworks and the like are supposed to deal with some of these issues. I wish the UK Government would live up to their promises to work with the devolved Administrations across the UK, as I am keen to do. They have an opportunity to do so by respecting the Sewel convention in this particular piece of legislation.
The Chair
Thank you so much. Your evidence has been very clear, but sadly we have run out of time. It is very nice to see you again.
Angus Robertson: Thanks for having me.
Examination of Witnesses
Michael Clancy OBE, Charles Whitmore and Dr Viviane Gravey gave evidence.
The Chair
I thank our final set of witnesses for being patient—we have run slightly over time because of the Division in the House of Commons. We will now hear oral evidence from Michael Clancy, director of law reform at the Law Society of Scotland; Charles Whitmore, research associate at the School of Law and Politics at Cardiff University; and Dr Viviane Gravey of the School of History, Anthropology, Philosophy and Politics at Queen’s University Belfast. All three witnesses are appearing via Zoom. We have until 5.23 pm.
Would the witnesses introduce themselves for the record, please? Let us start with Mr Clancy—[Interruption.] We cannot hear you at the moment—[Interruption.] Okay, we are having technical problems. We will suspend briefly and someone will do something with a hammer.
The Chair
I hope that we have got it right this time. Would our witnesses like to try introducing themselves again, please?
Michael Clancy: Thank you, Sir Gary. My name is Michael Clancy. I am director of law reform at the Law Society of Scotland.
Dr Gravey: I am Viviane Gravey, a senior lecturer in European politics at Queen’s University Belfast. I am also co-chair of Brexit & Environment, a network of academics looking at the impact of Brexit on the environment.
Charles Whitmore: My name is Charles Whitmore. I am a research associate with Cardiff University’s Wales Governance Centre, where I lead on its joint work with the Wales Council for Voluntary Action, which is the national membership body for charities in Wales, on the constitutional and legal changes arising from, in this case, withdrawal from the EU.
Justin Madders
Q
Dr Gravey: Thank you very much for the question. It is true that, in any case, there will be many more concerns for Northern Ireland. We have two different types of concern. First, it will be more complex for Northern Ireland, and secondly, in the absence of an Assembly or Executive, it will be harder for Northern Ireland to either participate in the retained EU law powers or to give any kind of oversight.
In terms of how it is more complex for Northern Ireland, there were some mistakes in the discussion this morning around the scope of the Bill when it comes to Northern Ireland, in clause 1(5). That is basically just about excluding, as with the rest of the UK, a primary role from the scope of the Bill. Basically, that is there because we sometimes have direct rule in Northern Ireland. There are Orders in Council, and they are not secondary legislation, but there are statutory instruments and statutory rules in Northern Ireland that will fall within the scope of the Bill.
The protocol comes in in two different ways. First, because of the protocol, we have retained EU law in Northern Ireland, but we also have a different type of EU-inspired legislation, which is directly applicable EU law, through the annex to the protocol. There is some question about the overlap between those two groups, and what will happen, for example, if we start removing or adding protocol laws that do different things from retained EU law. We have a very complex system in Northern Ireland right now. That is one of the issues.
The other issue is, as I think you have heard, about the primacy of EU law. That will be removed by the Bill, but it is maintained and reaffirmed in the Northern Ireland Protocol Bill, which is also in front of the Commons. How those two Bills will work together is one of the big questions, and I do not think anyone has an answer. Civil society and Government—Ministers and civil servants—in Northern Ireland have a lot of questions, and there are concerns that we are not getting answers or clarity from the UK Government on this.
Justin Madders
Q
Dr Gravey: Again, there are two different impacts. There is the impact on deciding on REUL, and what happens on the revoking end impacts on oversight. Before we lost our Ministers at the end of last month, some of the Departments had started work on mapping REUL. We know that the Department of Agriculture, Environment and Rural Affairs has identified around 600. The Department for Infrastructure has identified around 500. But the other Departments have not yet told us how many. It looks like the Northern Ireland Office is pushing the Departments to do something, but there is very little clarity. On a NI dashboard, for example, it is very unclear what we are going to get —if anything.
The other point is on consent and oversight for REUL. Through the UK Brexit SIs, we experienced that best efforts at involving the devolved Administrations were very limited in practice. On the environment and agriculture, for example, the experience in Northern Ireland has been that, even when the Assembly returned in 2020, the Committee for Agriculture, Environment and Rural Affairs and DAERA were getting only parts of the Brexit SIs, and they got them very late, with very little time to engage at all with stakeholders or to provide consent. That was when we had an Assembly. When we did not have an Assembly—for most of the Brexit process—there was no formal process for stakeholder engagement and involvement in the massive change that has already happened for the creation of retained EU law.
The fact that this Bill creates even more of an opportunity to change a vast amount of legislation even more deeply, and the lack of an Assembly, leads to the concern—the Scottish Minister said this earlier—that decisions will be made without the involvement of devolved citizens. That is even more the case in Northern Ireland because we do not have the mechanism for normal consent through the Assembly and the Executive.
The Chair
Q
Michael Clancy: The Law Society of Scotland’s principal concerns are about the potential for confusion and the lack of clarity about what the law is, what law applies and when it applies. In particular, we think that the sunset provisions are unduly short. We are told that the sunset will operate from the end of 2023—a phrase that lacks some statutory precision, I might say, so we will be preparing amendments to deal with that.
There is also a lack of clarity about what comes afterwards. It will be difficult for citizens and businesses to deal with even the provisions about replacement, restatement and the creation of the new category of assimilated law in a short—apparently very compressed—period of time, and without the adequate consultation that one would expect when this sort of law is changed. I hope that is helpful.
The Chair
That is very helpful. Mr Whitmore?
Charles Whitmore: It is important to emphasise as a starting point just how significant the Bill is from a devolved perspective. There has not as yet been sufficient consideration of the implications at the governmental level. It is not evident to me, from the Bill and the Bill documents, that sufficient consideration has been given to that.
For instance, there is a lack of a consent mechanism, despite that being contrary to practice in recent legislation. The clause 2 extension power is not being granted to devolved authorities. There is significant uncertainty about how the legislation might interact with different levels of governance and the different levels of inter-dependence therein. Crucially, we do not know much yet about what mechanisms relating to institutions for intergovernmental relations we might need, have or lack so that we can ensure co-operation in what is fundamentally a shared policy space.
It is important that those issues are given due consideration, ideally prior to the introduction of the legislation. Not having an understanding of them could amplify the significant risks of omissions and accidents arising from the sunset mechanism.
A second core concern for us is the legal uncertainty, which I am sure the previous panels spoke to you about. There is significant scope for the Bill to lead to legal uncertainty, and that is compounded at the devolved level because our capacity constraints are probably more acute, so the time sensitivity is even greater, and because there is uncertainty around how you address the tensions in the Bill at an intergovernmental level.
For instance, we do not know how different parts of the UK will make use of the powers in the Bill. Which will fall within the market access principles of the United Kingdom Internal Market Act 2020? Will they fall within or without an area covered by a common framework? If you start thinking about the different uses that might be made of the restatement powers, and which parts of the UK might take different approaches to supremacy and the general principles, the level of uncertainty really does start to get quite extreme.
Ms Ghani
Q
Michael Clancy: In terms of the EU legislating differently from Scotland, it all depends on what was meant by that phrase, Minister. I am therefore kind of in the dark about what you are asking me to comment on. Certainly, the EU is a completely different legislative creature from legislatures within the UK. It operates in the field of supranational law, rather than national law, and has a different mechanism in the relationship between the Parliament, the Commission and the Council. Those are significant differences constitutionally from the way in which we operate, but I am not really sure what your fundamental objective is?
Ms Ghani
Q
Michael Clancy: As you might have seen from our evidence, we took a lead from the comments made by Theresa May when she was Prime Minister about the creation of retained EU law as a route to certainty following the UK’s withdrawal from the European Union. Of course, it is always in the gift of Governments to change tack. To change to a different legislative structure, following the creation of retained EU law, is certainly possible, and the Bill seeks to do that, but I suppose the question is whether it is wise to do that in the time of the current economic crisis in which we are living.
Is it wise to do that with what could be described as a doctrinaire approach to time limits? The symbolic element of the later time by which changes can take place terminating 10 years after the referendum is all very well in terms of the political discourse, but will it be practicable to get to that point? Will there be adequate time for consultation with relevant individuals and businesses before that date arrives? Those are real issues embedded in the Bill.
There is then of course the issue that Mr Robertson and others talked about: the way in which all that interacts with the devolved Administrations and legislatures, and how they can deal with that approach to changing REUL. That is where one would want to criticise the Bill and ensure that we get it right if the changes are to proceed.
Ms Ghani
Q
“The UK government is in effect telling the devolved administrations to put on hold a lot of their priorities if they want to keep the status quo in any areas such as the environment where REUL plays a significant role.”
The compatibility and preservation powers in the Bill have been drafted as concurrent powers allowing either the devolved Administrations or UK Ministers to use them in devolved areas, or acting jointly. Those concurrent powers mean that devolved Administrations do not necessarily have to put on hold their priorities or allocate significant resources if they wish to maintain the status quo. Do you not agree?
Dr Gravey: Thank you so much, first of all for having read the blog—
Ms Ghani
I will never get those hours of my life back. That is fine. Please carry on.
Dr Gravey: Just the fact of the need to map all retained EU law in the devolved sphere is something that the devolved Administrations had not planned to do, and are being asked to do. Whether we can restate everything or not, there is one thing that as a Minister you might be able to help us with. Through transposition back in the ’90s or 2000s, a single SI might have been taken for the whole of the UK, even though it is an area of devolved competence. Can the different Administrations now each retain or amend that same SI differently? Can we have that kind of restatement of devolution powers?
There is a potential issue there. We are not sure what will happen when there was only one Brexit SI or one SI that was transposed back in the ’90s. For example, in some cases, transposition has been done by primary legislation in Scotland but secondary legislation in the rest of the UK.
We have all these things that have to be mapped. The mapping itself will take a lot of time, as we know from past SIs work. On the devolved Administration point, a lot of the worry is just going through and potentially making the case that at this point they need to have the right to retain something, although it is perhaps revoked in England. The impression that I have from my engagement with the Administrations is that there are some concerns there. If the UK Government are willing to say, “Don’t worry, even if it is the same SI, you can retain it while we revoke it”, that will reassure the devolved Administrations a lot.
Michael Clancy: May I say that I do not think that concurrent and joint are the same thing? We talk about powers granted to devolved Administrations being conferred concurrently and jointly. Concurrently means that they are used either by a UK Minister or by a devolved Administration independently of each another in devolved areas, whereas jointly means that a UK Minister and a devolved Administration are acting together. It is useful to get that kind of distinction on the record.
The Chair
Thank you, that is very helpful.
Charles Whitmore: While we are on the concurrency of the powers, I think this is a significant concern. It is a constitutional anomaly within our legislation that the UK Government can use concurrent powers in the Bill to legislate in areas of devolved competence without any form of seeking consent from relevant devolved Ministers. It is egregiously out of keeping not only with the Sewel convention, which is already under significant strain but with other EU withdrawal-related pieces of legislation.
Sections 6(7), (8), (9) and section 10(9) of the United Kingdom Internal Market Act 2020 require the UK Government to seek the consent of devolved authorities before making regulations and to publish a statement as to—if this is the case—why they are going ahead with that, despite potential devolved refusal. We have mechanisms in the European Union (Withdrawal) Act itself, and an intergovernmental agreement alongside, which provide a consent mechanism so that there is a recognition that this is a jointly shared space. It is quite odd that there is no consent mechanism of that nature in this Bill.
Justin Madders
Q
Michael Clancy: It might be difficult to get a protocol into the Bill, but if one recollects, in the United Kingdom Internal Market Act it was a long tussle between the Government and the other parliamentary participants in making reference to common frameworks in that measure.
One can say that under the EUWA arrangements for making retained EU law that had to be made by UK Ministers, a protocol was established between the Scottish Government and the Scottish Parliament where Scottish Ministers would indicate to the Parliament certain UK measures that would affect devolved matters. The Parliament would consider them and rank them according to whether they were significant or less so. Something like 83 separate orders were dealt with in that way, in terms of creating retained European Union law at that time over the period from 2018 to 2021.
Dr Gravey: If I can just add to that, of course a consent mechanism would be welcome, although we have seen some issues. What has been put in place for REUL around the withdrawal Act has been inter-governmental, so we are removing oversight in Parliament—both in Westminster and in the devolved Administrations—from the equation. They only come in because it is in the gift of the Scottish Government and Welsh Government to involve them, and because they have decided to involve them, but the agreement is between the UK Government and, for example, the Welsh Government.
Secondly, the absence of an Executive in Northern Ireland raises the question of how we can get consent. Can we have some kind of role for the civil service in Northern Ireland to grant consent? Can we have some role for the Northern Ireland Affairs Committee in the House of Commons to review some of this work? We do not know, but we need to think about it, because the absence of an Executive in Northern Ireland will be a rolling issue, and consent has to be rethought around that.
The Chair
Thank you very much—a final word from Mr Clancy.
Michael Clancy: That is a very important point about the role of intergovernmental relations in all this. We had a long period of reflection on intergovernmental relations, which resulted in the new structure being created earlier this year. One of its key aspects is that the relations should facilitate effective collaboration and regular engagement in the context of increased interaction between devolved and reserved competences in our new relationship with the EU and other global partners. The issue of intergovernmental relations has already anticipated that, and we should not necessarily want to reinvent the wheel. Instead, I suggest that we need to reflect on the structure of intergovernmental relations and see whether there is anything that can be developed or, alternatively, refocused on the issues that arise from the Bill.
The Chair
Thank you very much. There are no further questions, but you have given us a lot to think about. I am sorry for the technical glitch and the delay at the beginning, but thank you for your expert and excellent evidence. We will take it into account as we take forward our Committee proceedings.
Colleagues, I am afraid that brings us to the end of the time allotted—I know you will be upset—for the Committee to ask questions in this sitting. On behalf of the Committee, I thank the witnesses for their evidence. The Whip is about to prepare to move the adjournment, and the Committee will next meet on Tuesday 22 November for line-by-line consideration of the Bill. I cannot wait.
Ordered, That further consideration be now adjourned. —(Joy Morrissey).
Economic Crime and Corporate Transparency Bill (Tenth sitting)
Tuesday 8th November 2022
(2 years ago)
Public Bill CommitteesRead Full debate Economic Crime and Corporate Transparency Act 2023 View all Economic Crime and Corporate Transparency Act 2023 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 8 November 2022 - (8 Nov 2022)
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
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, Ms Elliott. Clause 80 gives the registrar of companies a new power to require information. The registrar’s existing powers are insufficient to tackle the large volume of inaccurate or suspicious information on the register. She has no powers to compel filers to furnish her with information to assist her to investigate filings that she is concerned are inaccurate or fraudulent, and that she may wish to remove. That means that suspect information is often accepted on to the companies register, damaging its accuracy, reliability and usefulness.
The insertion of proposed new section 1092A into the Companies Act 2006 will give the registrar a power to require that a person provide her with information for certain purposes. Those are: determining whether someone has complied with a delivery obligation or requirement; determining whether a document delivered to her satisfies the proper delivery requirements, including whether it contains accurate information; or determining whether or how to exercise her powers to remove improperly delivered information from the register or to resolve inconsistencies on it.
It is suspected that a significant amount of fraudulent information is already on the register. The power will therefore apply to existing register information as well as to all new information submitted to the registrar. The clause will also make it an offence for someone to fail to respond to the registrar’s request for information without a reasonable excuse. The maximum penalty for that offence will be two years’ imprisonment. It is imperative that we equip the registrar with all the tools necessary to challenge dubious information and ensure the integrity of the register. The power in the clause is the cornerstone of that ambition.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
It is a pleasure to serve under your chairship, Ms Elliott. I thank the Minister for his remarks. We support the clause, which provides for a power to require additional information. He is right that the proposed new section is the cornerstone of providing the registrar with the powers to maintain the integrity of the register, so we support the clause.
Liam Byrne (Birmingham, Hodge Hill) (Lab)
It is a pleasure to serve with you in the Chair, Ms Elliott. When the Minister winds up the debate on the clause, will he say a little more about some of the information that the registrar may be seeking, and in particular whether she is able to solicit information from people seeking to file accounts, and so on, that has been requested by other agencies? All kinds of information is sometimes beyond the purview of, for example, the National Crime Agency, and sometimes the registrar, rather than a police agency, making the first approach may be a more intelligent way to get the information needed for an investigation. It would be helpful if the Minister clarified whether Companies House can act in concert with other law enforcement agencies to gather information that is needed to help to bring prosecutions.
Kevin Hollinrake
I am grateful for the right hon. Gentleman’s remarks. The answer is yes, that is exactly what the legislation allows for: the risk-based flow of information between the registrar and law enforcement agencies. Of course, the power will be discretionary, so the registrar will determine when to exercise it, but it can be to request any information that she requires under legislation—both public and private information.
Question put and agreed to.
Clause 80, as amended, accordingly ordered to stand part of the Bill.
Clause 81
Registrar’s notice to resolve inconsistencies
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Government amendment 13.
Clause 82 stand part.
Clause 83 stand part.
Government new clause 7—Power to require businesses to report discrepancies.
Kevin Hollinrake
Clause 81 enables the registrar to require a company to resolve an inconsistency where it appears that information contained in a document delivered to the registrar in relation to a company is inconsistent with any other records she holds, including records about other business entities or organisations such as limited liability partnerships and limited partnerships. Currently, the inconsistency resolution power is available only if there is an inconsistency between the delivered information and the information on the companies register.
Where the registrar suspects that information submitted to her is inaccurate, but that suspicion is based only on information that she holds but that is not published on the register, for instance information gleaned from law enforcement agencies—that is the point the right hon. Member for Birmingham, Hodge Hill just mentioned—she will be able to issue a notice to require the company to correct the mistake. The clause will strengthen the registrar’s ability to ensure the register is accurate and reliable.
Government amendment 13 and new clause 7 are concerned with the identification and rectification of discrepancies between information that businesses, such as banks, lawyers or accountants, obtain in the course of their business relationships with customers, and information that the registrar curates. In our White Paper in February, the Government committed to expand current discrepancy reporting requirements to include discrepancies in director information and in registered office addresses. That would build on the discrepancy reporting that already occurs under the money laundering regulations in relation to beneficial ownership. It is a key part of our vision for Companies House reform that there are active and effective feedback loops from the private sector to help the registrar maintain the accuracy of the data she holds. This will benefit business and help protect personal information.
The power inserted by new clause 7 introduces a regulation-making power into the Companies Act 2006. Regulations made under that power can set out who must check for discrepancies and what information they check, beyond just discrepancies in relation to beneficial ownership information. The regulations can also be used to create offences for failure by those obliged to check for discrepancies to comply with those obligations.
Government amendment 13 omits section 1095A from the Companies Act. This power to resolve discrepancies in certain circumstances is no longer needed because of the wider power introduced by clause 82, which enhances and rationalises the registrar’s powers to remove material from the register. Proposed new section 1094 of the Companies Act, as substituted by clause 82, gives the registrar the power to remove material on the register where it has not met proper delivery requirements or is unnecessary. The registrar could exercise that power on her own motion, or on application.
Clause 82 will strengthen the registrar’s powers, enabling her to proactively clean up the register. The power is safeguarded by the requirement that the registrar may exercise it only if satisfied that the interest of the company or applicant in removing the material is not outweighed by any interest of other persons in the material continuing to appear on the register. That matches the test that the court has to apply, which is the focus of clause 83.
Clause 83 expands the range of people whose interests a court must take into account when considering whether to make an order to remove material that has legal consequences from the register. Currently, a court can only make an order to remove material if satisfied that the material is damaging to a company and removing the material outweighs the interests of any other person in the material in retaining it.
That test overlooks the fact that a person other than the company might have their interests affected by a filing—for example, a person whose name has been fraudulently registered as a director of a company with which the person in fact has no connection. Clause 83 amends section 1096(3) of the Companies Act so that the court must now also take into account the interests of an applicant, who may be different to the company, as well as the company.
Seema Malhotra
I have a few questions on the clauses. Clause 81, on the registrar’s notice to resolve inconsistencies, would expand the powers of the registrar to identify inconsistencies by considering all records—it goes wider than just the information on the register. Any notice given would state the nature of the inconsistency and give the company 14 days to resolve it. Could I ask the Minister to clarify what will happen if a company exceeds this 14-day period?
On new clause 7 on the power to require businesses to report discrepancies, I want to understand how that might be operationalised. Would the registrar seek information from businesses, or would businesses be expected to do something without being requested to? It was not quite clear how the measure would be used. On businesses that might come under scope, the Minister mentioned financial services, but the proposed new section under new clause 7 refers to regulations imposing requirements on
“a person who is carrying on business in the United Kingdom”.
Any company or business may be required to report discrepancies. It would be helpful to understand that point, as there is a fair bit of detail in new clause 7. I would appreciate the Minister’s comments on that.
Clause 82 creates a new power for the registrar to remove information that was submitted to it and accepted despite not meeting proper delivery requirements. There may well have been reasons for the information being accepted. As the Minister mentioned in a previous debate, for some reason there may have been a minor issue that was considered not significant—I think he may have used the word “material”—and the information did not meet proper delivery requirements. Could I clarify whether the Minister would expect there to be any notification to directors or officers about material being removed? Would any note be made on the register as a record of material having been removed? It would simply be a matter of putting on a company’s record that material was there and accepted even though it did not meet properly delivery requirements and was subsequently removed. It is not about there being a risk of a cover-up, with material being removed, but it is helpful to have an audit trail. Perhaps the Minister can outline how he envisages that power being used.
Clause 83 amends the Companies Act 2006 so that, as regards material being removed, the court may take into consideration whether the interests of an applicant outweigh the interest of other parties. Can I clarify how this would be used? Would it be used when a third party did not believe that it was appropriate to remove the material? Who else might the applicant be? I am trying to understand when it might be used and a case might come to court to weigh the pros and cons in terms of parties’ interests in having that material removed. It would be helpful to have some clarity on that.
Alison Thewliss (Glasgow Central) (SNP)
I have some questions about new clause 7. I am reading through it and trying, as I have done with many of the amendments, to put myself in the scenario of being the person who is carrying on business in the United Kingdom. It says that as that person, I am obliged to
“obtain specified information about a customer (or prospective customer)…before entering into a business relationship with them, or…during a business relationship with them”
and I have to identify any discrepancies and report them to the registrar. I get that: if I do that and I see a discrepancy, I have an obligation to report it. It feels as though the Minister is bringing forward a very soft version of a failure to prevent offence, which of course I am fine with.
I want to double-check something, however. The new clause goes on to talk about offences that might be created for failure to comply with the requirements, and I want to know what happens if I, as the person carrying on the business, do not spot a discrepancy. How is it ascertained whether I did not spot the discrepancy—whether it was a genuine mistake on my part—or whether I failed to report something that somebody else later picked up?
We are talking here about convictions, punishable as set out near the end of the new clause, and I am curious about how the regulations will work in practice. If I do not spot a discrepancy and report it, how does the law know that I did not spot it? Perhaps I ignored it because I thought it was not relevant or important, or perhaps I did it deliberately. If I come back after the fact and say, “I didn’t report it because I didn’t see it,” or “I didn’t report it because I didn’t want to,” those are two very different things.
I do not quite understand how the new clause will work. Some people might think it is good and beneficial to go clyping and grassing up people who do not comply, and that is fine, but it is quite a different thing if a discrepancy has been overlooked. I would like the Minister to explain how that will work in practice.
Kevin Hollinrake
I will first take the latter point, which covers some of the shadow Minister’s points as well. There will be more detail in secondary legislation about how new clause 7 is expected to operate, but it is quite reasonable to think that third party business entities will understand how this should work. Within that, we would expect there always to be a reasonableness defence if an error was made or something was done in good faith. We would not expect a penalty to be applied in that case, but there will be more detail on that in secondary legislation.
The shadow Minister asked what would happen if an organisation failed to comply with a notice within the 14-day period that it is given to respond. There is an unlimited fine, potentially, for failure to comply. Other situations might even lead to somebody facing a prison sentence of up to two years, in certain instances. A lot would depend on the circumstances involved. That also relates to what the hon. Member for Glasgow Central asked.
The shadow Minister asked for more detail about how the relationship between the registrar and third party companies would work. This does not just refer to the financial sector; it also refers to the legal sector. It would pertain to any organisation that is supervised by money laundering regulations. I think that is the extent to which companies would be bound by the rules on checking discrepancies.
The shadow Minister asked whether there would be a flag if a record was removed. Clearly, there will be a red flag for the registrar themselves, depending on the reason why that record has been removed, and that may be something we cover in further detail in secondary legislation. My immediate reaction is that we would not want red flags to be set against a company that had made an honest mistake, because that might unreasonably set some hares running. I am a little concerned that that might happen if we did as the shadow Minister described.
Seema Malhotra
For clarity, perhaps I can distinguish the difference between a red flag and a record of what has happened. We keep a record of what happens, but a red flag is a cause of concern.
Kevin Hollinrake
Yes. The registrar will have the ability to annotate the register as is appropriate in the regulations we intend to make using the power found in section 1080.
Question put and agreed to.
Clause 81 accordingly ordered to stand part of the Bill.
Clause 82
Administrative removal of material from the register
Amendment made: 13, in clause 82, page 65, line 21, at end insert—
“(6) Omit section 1095A (rectification of register to resolve a discrepancy).”.—(Kevin Hollinrake.)
This repeals section 1095A of the Companies Act 2006 as in practice the only circumstances in which material would be removed from the register under that section are caught by new section 1094 (inserted by clause 82 of the Bill).
Clause 82, as amended, ordered to stand part of the Bill.
Clause 83 ordered to stand part of the Bill.
Clause 84
Inspection of the register: general
Kevin Hollinrake
I beg to move amendment 106, in clause 84, page 65, leave out lines 40 and 41 and insert—
“sections 64(6A), 67(1A), 73(7), 75(4A), 76(5A), 76A(9) and 76B(9) (which confer powers to suppress a company’s name that it has been directed or ordered to change);”.
This is consequential on NC34.
The Chair
With this it will be convenient to debate Government new clause 34—Requirements to change name: removal of old name from public inspection.
Kevin Hollinrake
Members of the Committee might remember that when we discussed the provisions concerning company name change directions last Tuesday, there was much debate about the 28-day compliance period, a topic on which I have since written to the hon. Member for Feltham and Heston. It is fair to say that we might not have exactly achieved a meeting of minds on that occasion, but we will try again today.
I am grateful to the hon. Members for Feltham and Heston and for Aberavon for withdrawing their amendments in the hope that we could get to a place we agreed on. I think we all agree that a company should have a reasonable amount of time to change its name and that we would prefer compliance rather than an imposed solution involving the registrar defaulting the company’s name to its rather anonymous company registration number.
Compliance will, quite legitimately, take some time and effort on behalf of the company. Notice of a proposed change will have to be given to shareholders, and those representing not less than 75% of the total voting rights of eligible shares will have to agree to the change. That is why it is the Government’s position that a company should have a minimum period of 28 days to change its name following a direction, with the possibility to ask the Secretary of State to extend that period where necessary.
Hon. Members are right, however, to be concerned about the harm that can flow from offending names. Where the Secretary of State has determined it appropriate to issue a direction, it will almost invariably be the case that the name’s presence on the register risks causing harm to users. That is why clauses 17 and 18 give the registrar new powers to remove a company name from the publicly accessible part of the register at the point a direction is issued, so any ongoing harm would be curtailed immediately at that point.
The earlier amendments have very helpfully highlighted for us that this ability to remove an offending name from the publicly inspectable part of the register is not available to the registrar in respect of the name change direction and order provisions that already exist in the Companies Act 2006—but it ought to be. New clause 34 addresses that issue, ensuring that the registrar will have the ability to suppress the name and the subject of a direction or order under all circumstances under which one might be issued.
Government amendment 106 ensures that the general right for people to inspect the register does not extend to offending names that have been suppressed. The effect is that we strike a fair balance between allowing companies adequate time to comply with a name change direction and protecting users of the register from harm that might arise from the offending name remaining visible while the company goes through its internal name change process. I hope hon. Members will welcome these amendments, and I commend them to the Committee.
Seema Malhotra
I thank the Minister for his remarks, and wish to speak to this group on behalf of my hon. Friend the Member for Aberavon as well. I must say that these provisions are not easy to follow, so forgive me for feeling like I will need to reread Hansard in a darkened room in order to completely follow what the Minister has said.
Dame Margaret Hodge (Barking) (Lab)
I do not think any of us understood a word of that. It would be really nice if the Minister could explain it in black and white, because I just could not get what that was getting at at all.
Kevin Hollinrake
In layman’s terms, it means that if a company is required to change its name because it could cause harm, the registrar can immediately suspend that name from the register—as we discussed last week—so it cannot cause harm.
Dame Margaret Hodge
Perhaps the Minister could also explain how that is different from what we agreed last week.
Seema Malhotra
I thank my right hon. Friend for her question, which the Minister may wish to answer before I continue my remarks.
Kevin Hollinrake
It extends the extent. The registrar did have that power to a certain degree for certain names, but they did not have it in every circumstance, so the Bill extends its right to use the power. Basically, in any situation where a name change is required because it could cause harm to the public, the registrar can immediately suspend that name from the register so that it cannot cause harm in any circumstance.
Seema Malhotra
I am grateful to the Minister for his intervention.
The clauses on the register include important provisions related to information sharing and the parameters of information that may be made available to the public. They are hugely important on a number of levels, facilitating access to relevant information for law enforcement and, more broadly, building public trust and confidence in our laws on economic crime. As drafted, the Bill appears to lean much more heavily towards restricting the availability of information to the public, and as we have said, an explanation of the Government’s thinking and rationale on these issues would be helpful for the deliberations of the Committee.
Clause 84 deals specifically with exemptions from requirements to make information publicly available. Exempting information from public disclosure pending verification by the registrar is a reasonable provision, since it could be argued that such information might otherwise give a misleading or inaccurate picture of the registry if certain information released to the public was ultimately excluded on the grounds that it could not be verified.
Clause 84 also deals with the names of companies registered incorrectly or used for criminal purposes. As the explanatory notes confirm, the intention is to prevent such information from being disclosed to the public, but a slightly clearer explanation of those provisions would be helpful. It seems reasonable in most cases to exclude information submitted in error to the registrar. On company names used for criminal purposes, perhaps the Minister could explain whether the intention of clause 84 is to prevent the disclosure of information relevant to a specific ongoing criminal investigation.
Seema Malhotra
Have I jumped? That is my fault. I have just checked the grouping, and I see that we are discussing clauses 82 and 83. In which case, I will stop there.
Seema Malhotra
I thought it was clause 84 stand part, clause 85 stand part and clause 86 stand part.
Liam Byrne
On a point of order, Ms Elliott. I would be really grateful if you could just clarify where we are in the debate.
The Chair
We are debating Government amendment 106 to clause 84, with which it is convenient to consider Government new clause 34. It is this light; I am afraid I am reading eights for threes. I am terribly sorry.
Seema Malhotra
That is clear. I was slightly confused by the grouping, but that is absolutely clear, and I will continue my remarks when we come to the next group.
Kevin Hollinrake
I have nothing further to add.
Amendment 106 agreed to.
Question proposed, That the clause, as amended, stand part of the Bill.
Kevin Hollinrake
Clauses 84 to 86 all make amendments to the provisions in the Companies Act 2006 about rights to inspect the register and obtain copies of the material on it.
Section 1085 of the Companies Act requires the registrar to make company information available for public inspection. Clause 84 makes consequential technical amendments to the section resulting from the various amendments to the Companies Act that are made elsewhere in the Bill—[Interruption.]
The Chair
Order. We need some clarity. We are in the middle of a Committee sitting and it is not appropriate to speak from beyond the bar. May I also say that we need some light? [Interruption.] Order. We will resume.
Kevin Hollinrake
I can see my notes very clearly. It is absolutely fine.
The amendments qualify the inspection rights in section 1085 of the Companies Act to ensure that certain information cannot be inspected. The information in question comprises company names that have, for example, been the subject of a registrar name- change direction because of concern that the name’s use is for criminal purposes.
The technical amendments to the Companies Act made by clauses 85 and 86 improve the integrity of the companies register and prevent the abuse of personal information held on it. Clause 85 makes amendments that relate to copies of material on the register, clarifying that the right to require a copy of material on the register applies only to materials that are available for public inspection. The clause also removes the option that an applicant has for submitting applications to require a copy of an enhanced disclosure document in paper form or electronically. It allows the registrar to determine the form and manner in which copies of registered material are to be provided under section 1086 of the Companies Act.
Seema Malhotra
Clause 84, as I alluded to earlier, deals with names of companies registered incorrectly or used for criminal purposes. The explanatory notes confirm that the intention is to prevent such information from being disclosed to the public. Excluding information submitted to the registrar in error seems reasonable, as I mentioned earlier, in most cases. With regard to company names used for criminal purposes, I would be grateful if the Minister could clarify whether the intention behind clause 84 is to prevent the disclosure of information relevant to a specific criminal investigation that may be ongoing. I am sure that we all agree that sensitive information should not be disclosed if doing so would compromise an active investigation by law enforcement agencies. If, however, all investigations and, where relevant, prosecutions and court proceedings have reached their conclusion, there might be an argument for public disclosure of said information about the company in question to then be permitted.
If it is the Government’s intention to prevent disclosures of company names used for criminal purposes only in circumstances where it is absolutely necessary to do so, perhaps the wording of clause 84, which is currently quite broad, may be usefully amended to reflect that. I am also raising those concerns on behalf of my hon. Friend the Member for Aberavon. Perhaps there could be a specific provision enabling information on such company names to be disclosed to the public once any criminal proceedings are over in cases where there may be a public interest to do so. It would be helpful if the Minister could set out the Government’s thinking on those issues.
Clause 85 amends the Companies Act to give more powers to the registrar, for instance in relation to the format in which information may be provided. The provision enabling the registrar to require an application for access to information to be submitted electronically is broadly welcome, inasmuch as it supports the wider objective of delivering more streamlined and effective services, although it may be helpful for the Minister to clarify when he expects a fully electronic process for members of the public to request and access information held by the registrar to be up and running.
Clause 86 extends the scope for information, including information of the kind covered by previous clauses, not to be disclosed by the registrar. The more general question of what information should be made publicly available, and the criteria on which those decisions are made, will be discussed shortly in relation to the next clause, but I would be grateful for the Minister’s comments.
Kevin Hollinrake
Clause 84 relates to issues that we debated earlier. The information in question comprises company names that have, for example, been the subject of a registrar name change direction because of a concern that the name’s use is for criminal purposes. I do not think that there is anything different here from what we have already discussed. It deals only with the exception to the general rule of making the entire register available to the public where the registrar uses her discretion to take a name off the register. It is not related to police investigations; she would suppress the name of a company for other reasons.
Question put and agreed to.
Clause 84, as amended, accordingly ordered to stand part of the Bill.
Clauses 85 and 86 ordered to stand part of the Bill.
Clause 87
Protecting information on the register
Seema Malhotra
I beg to move amendment 114, in clause 87, page 68, line 7, at end insert—
‘(7A) Regulations under subsection (1) above may not prevent the registrar from making available for public inspection information mentioned in paragraphs (a) to (d) unless there are compelling reasons for the information to be withheld.
(7B) For the purposes of subsection (7A) above, “compelling reasons for the information to be withheld” include circumstances in which the registrar may decide that public release of the information may result in—
(a) a serious threat to the personal safety and security of the individual to which the information relates;
(b) adverse effects on any investigation by an appropriate officer of a suspected offence under this Act;
(c) adverse effects on the ability of an appropriate officer to impose a penalty for any offence under this Act; or
(d) a clear risk to the national security of the UK;’.
This amendment seeks to expand the registrar’s powers to release information about the Companies House register, where it is in the public interest to do so, while also enabling personal information relating to an individual to be withheld in cases where there are compelling reasons to do so.
It is a pleasure to speak to the amendment, tabled in my name and that of my hon. Friend the Member for Aberavon. It appears at least possible that the Government could place strict limits on the rights of journalists to request information, for example, in connection with investigations that may well be firmly in the public interest. Disclosures of that kind have been seen in the Panama papers and the Paradise papers. Those are just two examples of how important it is that legitimate journalistic access to information held by the registrar must be protected.
It is with those concerns in mind that we have tabled amendment 114. Its aim is to ensure that there is a default presumption in favour of disclosing information in response to a request, whether from a journalist or an ordinary member of the public, and to ensure that legitimate requests are refused only when there is clear evidence of a compelling reason to do so. We believe that the powers granted to the Secretary of State under clause 87, as drafted, are simply too broad. We therefore strongly urge the Government to support the sentiments in amendment 114.
Kevin Hollinrake
I am not sure that what we are trying to do here is relevant to the matter that the hon. Lady raised. Amendment 114 would prevent regulations being made to allow the registrar to make information unavailable for public inspection under new section 1088 unless there are compelling reasons for the information to be withheld, which this amendment outlines.
Of course, there are instances where disclosure of information on the public register is inappropriate—I think we have all agreed that through the course of this debate—for instance, where it could lead to an increased risk of fraud and identity theft, or put individuals at risk for some reason, such as in cases of domestic abuse. There are limitations in the extent to which existing provisions in the Companies Act 2006 allow personal information to be withheld from the public register. We want to expand that to ensure that personal information is properly protected.
Clause 87 amends the Companies Act to allow individuals to apply to the registrar to suppress information relating to an individual or address and prevent it from being disclosed or made available for public inspection. That will include their residential address, signature, business occupation, and date of birth in old documents.
Dame Margaret Hodge
This is another opportunity to raise the issue, to which I have not had an answer, of Fedotov. That is how he kept his name off the—[Interruption.] It is. We just need an answer.
Kevin Hollinrake
The answer is that any person applying under the exemption will have to prove to the registrar that there is sufficient evidence of a serious risk of violence or intimidation to protect their names or information. If necessary, the registrar will refer cases to an appropriate law enforcement agency and will have the power to revoke protection if information comes to light to suggest that false evidence has been provided.
Does the right hon. Lady honestly think that a registrar, who has a duty and responsibility to protect the integrity of the register, would assist an oligarch, for example, in trying to hide information? I think we are into conspiracy theory territory here, which I do not think will get us very far.
Dame Margaret Hodge
In general, I would agree with the Minister. However, the truth is that Fedotov did manage that. If the Minister could provide an explanation of why and how that happened, then we might get greater comfort in this Committee that those circumstances will not arise again.
Kevin Hollinrake
I committed earlier to look into that case, and I will, but the Usmanov case, as I said, was a completely different case. The whole reason why we are bringing forward this legislation is to improve transparency and fight economic crime. The right hon. Lady’s indication that perhaps the registrar might be complicit with Russian oligarchs, who may be guilty of economic crime, is not really plausible.
These are reasonable provisions for people whom we suggest might be at risk of harm if we publish that information, and they have to demonstrate that that harm is a salient risk. They are reasonable provisions that would be used fairly sparingly in the main, but nevertheless there have to be those kinds of provisions where somebody is at risk of harm. That does not exempt the applicant from providing the information to the registrar, where it is still required by legislation, but it will no longer be displayed publicly. Critically—and this should answer the right hon. Lady’s point—information would still be available to law enforcement agencies and other public bodies. It would not be appropriate to limit the registrar’s ability to protect personal information in the way proposed by the amendment.
Seema Malhotra
I will not push amendment 114 to a vote. It is an area where there is probably further debate to be had but, having reflected on that with my hon. Friend the Member for Aberavon, 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
As we have discussed, there are instances where disclosure of information on the public register can lead to an increased risk of fraud and identity theft or put individuals at risk for other reasons, such as in cases of domestic abuse. The clause addresses this by amending certain sections of the Companies Act 2006 that confer or otherwise relate to the power for the Secretary of State to make regulations, permitting applications for personal information to be suppressed or protected, which means that the information is not made available on the public companies register.
Seema Malhotra
I wish to make a few remarks. I take on board the Minister’s comments, and we all agree about instances where there may be domestic violence reasons, for example, or other security and personal information reasons for why an individual’s home addresses and so on should not be disclosed. As discussed earlier, transparency plays a vital role in building public confidence in our ability to crack down on fraudulent or other criminal abuses of our companies legislation. Arguably, clause 87 grants an extraordinary degree of power to the Secretary of State to specify in regulations not just what information may be disclosed to the public, but who might be permitted to request information in the first place and on what grounds. It is quite a long clause. We had a debate before on the questions about safeguards, some of the uses of those powers and the extent to which there may be information that is not publicly available that ought to be, in the public interest. I would be grateful for a further discussion of the matter. I will work with my hon. Friend the Member for Aberavon to put together a note for the Minister with some more specific points to which it would be useful to have responses before Report.
Kevin Hollinrake
I just want to reiterate that all protected information, whether suppressed or not, is available to law enforcement agencies. That is the critical point. Individuals who seek to use these exemptions have to provide sufficient evidence of a serious risk of violence or intimidation, and that protection can be revoked if new information comes to the registrar’s attention that she feels casts doubt on the original assertions.
Question put and agreed to.
Clause 87 accordingly ordered to stand part of the Bill.
Clause 88
Analysis of information for the purposes of crime prevention or detection
Dame Margaret Hodge
I beg to move amendment 119, in clause 88, page 68, line 15, leave out from “must” to the end of line 17 and insert
“analyse information within its possession with a view to preventing or detecting crime.”
The Chair
With this it will be convenient to discuss the following:
Amendment 120, in clause 88, page 68, line 17, at end insert—
“(1A) In carrying out the analysis the registrar must make use of its power to require additional information under section 1092A where the registrar considers that such additional information may contribute to the prevention or detection of crime.”
Amendment 116, in clause 88, page 68, line 17, at end insert—
“(1A) As part of the analysis under subsection (1), the registrar must carry out a risk assessment to identify where the information it holds might give rise to a matter of concern.
(1B) Where the assessment identifies a matter of concern, the registrar must—
(a) carry out whatever further analysis it considers necessary; and
(b) share any evidence of unlawful activity it identifies with the relevant law enforcement agency.
(1C) For the purposes of this section, a “matter of concern” includes—
(a) inaccurate information;
(b) information that might create a false or misleading impression; or
(c) evidence of economic crime.”
New clause 37—Duty to check person of significant control status—
“(1) The Companies Act 2006 is amended as follows.
(2) After section 790LP (Offence of failing to comply with sections 790LI to 790LN) insert—
“790LQ Duty to check person of significant control status
(1) This section applies when a registrable person’s identity is verified under section 1110A(1) and a risk assessment carried out under section 1062A(1A) has identified a matter of concern in relation to the registrable person.
(2) The registrar must take steps to ensure that the registrable person whose identity is being verified is a person with significant control over the company.””
New clause 38—Risk-based examination of accounts of dissolved companies—
“(1) The Companies Act 2006 is amended as follows.
(2) After section 1062A (analysis of information for the purposes of crime prevention and detection) insert—
“1062B Risk-based examination of accounts of dissolved companies
(1A) In a case where the registrar’s risk assessment under section 1062A(1A) has identified a matter of concern in relation to a dissolved company, the registrar must examine the accounts of the dissolved company with a view to establishing whether any economic crime has been committed.
(1B) The registrar must share details of any evidence gathered under subsection (1A) with the relevant law enforcement agencies.””
New clause 41—Disclosure of control of 5% or more of shares in a public company—
“(1) This section applies to shareholdings in public companies as defined by section 4 of the Companies Act 2006.
(2) A person who controls 5% or more of the shares in a public company must declare this fact to the registrar.
(3) The duty in subsection (2) applies whether the person controls the shares directly or indirectly.
(4) The registrar may impose a penalty on any person who fails to comply with the duty in subsection (2).”
This new clause would require all persons controlling 5% or more of the shares in a public company to declare the total amount of their shareholding to the registrar. This would, for example, require a person controlling shares through multiple nominees to declare the total number of shares they control.
New clause 42—Verification of persons controlling 5% or more of shares in a public company—
“(1) This section applies where—
(a) a person has disclosed to the registrar control of 5% or more of the shares in a public company under section [Disclosure of control of 5% or more of shares in a public company], and
(b) the registrar has identified a matter of concern under subsection 1062A(1A) of the Companies Act 2006.
(2) the registrar must—
(a) verify the identity of that person, and
(b) verify the number of shares that person claims to control.”
This new clause should be read together with Amendment 116 which inserts subsection 1062A(1A) into the Companies Act 2006. It would require the registrar to verify both the identity and the shareholding of a person who controls 5% or more of shares in a company where the registrar’s risk-based analysis set out in Amendment 116 has identified a matter of concern.
New clause 43—Disclosure of shares held by nominee—
“(1) This section applies to public companies as defined by section 4 of the Companies Act 2006.
(2) Any person holding shares in a public company as nominee for another person must disclose this fact to the registrar.
(3) The registrar may impose a penalty on any person who fails to comply with the duty in subsection (2).”
This new clause would require shareholders of a company to disclose the fact that they are acting as nominees. Failure to comply could result in a penalty.
Dame Margaret Hodge
The Minister is delighted. All the provisions are grouped together, so he will have to listen to me forever. The lighting is not much better, but we will see how we go—I know we are saving energy.
The provisions that we are discussing all sit together. I will start with amendments 119 and 120, with which we are trying to strengthen the duties, rather than the powers, of Companies House. During the course of the Committee’s discussion of the Bill, we have considered how UK corporate structures and vehicles are used to move, hide and launder money. When the Bill is enacted, although I hope that it will be amended to strengthen the nature of the information we get by strengthening the supervision of company service providers, Companies House will hold a wealth of data.
Amendment 119 seeks to make it compulsory for Companies House to analyse that data to prevent and detect crime. By removing some words, it would be tougher than the current wording of the clause, according to which Companies House could analyse that data, but does not necessarily have to. The clause says
“as the registrar considers appropriate”,
and, without the amendment, Companies House could and will argue that it does not consider analysis “appropriate”. We would remove that provision and say that the registrar must use the data that has been made available to her to see whether or not it can support us in our efforts to avoid crime.
I have one other thing to say about this issue. We have talked a lot in the debate about corruption and the way in which it has impacted the UK economy. As we discuss the Bill further, we have to remember the impact it will also have much more widely. According to the ONE Campaign’s latest estimate, around $1 trillion is lost every year to corruption in developing countries. A lot of that comes through the abuse of corporate structures that we have in the UK. That is just one example that demonstrates how UK corporate structures facilitate theft and corrupt activity.
I know that that is under the current regime and that much of this should go when we get to our new regime. However, I will give another example of how the abuse of UK corporate structures led to money, again, coming out of Russia, which is the bottle laundromat—another of these laundromats—that was uncovered by Transparency International. British companies were, again, at the centre. It was a money laundering operation from 2014 to 2016 where $820 million came out of Russia. Again, it involved—classically—a network of shell companies, many of them UK firms, that apparently sold bottle-moulding machines to Russia.
Kevin Hollinrake
The right hon. Lady raises some important cases, and she is right to do so. Is that not exactly why we are trying to do this in this way? There are 4.5 million companies registered in England. Around 700,000 companies are registered every year, or 2,000 a day, and 400,000 are dissolved every year. If she is asking Companies House to analyse every single company—that is exactly what her amendment says—to determine risk, she is asking too much of Companies House and she will miss the important needles in the haystack that she refers to.
Dame Margaret Hodge
Were I asking that, that would be unreasonable but if the Minister takes all my amendments together, he will see that they and others talk about a risk-based assessment of the available data.
Kevin Hollinrake
The amendment does not say that. It says that
“the registrar must carry out a risk assessment”,
not a risk-based approach. There is a big difference in terms of what the right hon. Lady is asking for.
Dame Margaret Hodge
But when we come to the new clauses, which we will discuss later, they say “risk-based”. It is a risk-based assessment. Perhaps the Minister could explain what the difference is.
Kevin Hollinrake
The amendment says
“a risk assessment to identify where the information it holds might give rise to a matter of concern.”
That certainly says to me that a risk assessment would be required for every company. To me, a risk-based approach would identify various pieces of information, and Companies House would act on that information and determine whether the risk is from companies, directors or persons of significant control and act on that. That is our approach; the right hon. Lady’s approach is moving away from that.
Dame Margaret Hodge
The Minister is misinterpreting our approach. I am sorry if he reads it that way, but I agree that we are not asking for 100%. He calls it a risk-based assessment; I call it a risk assessment. Apologies for the difference in language.
Liam Byrne
If we were having this debate in my constituency, my constituents would say to me and, indeed, to the Minister, “We want to hire a police officer to stop crime.” If we look at a definition of what a police officer does, they maintain law and order in local areas, prevent crime, reduce fear of crime and improve the quality of life for all citizens. We want Companies House to stop economic crime and that is what my right hon. Friend’s amendments seek to achieve.
Dame Margaret Hodge
And presumably the policeman does not knock on every door.
Dame Margaret Hodge
At the moment, the Bill says—I can’t read it because there is no bloody light! It is a thing that as you get old, your eyes aren’t brilliant:
“The registrar must carry out such analysis of information within the registrar’s possession as the registrar considers appropriate”.
We are attempting to take that wording out of the Bill to make it a duty, because otherwise we know from the other enforcement agencies and the work of other Government agencies that unless clearly directed, the real work would not be done. There would be an excuse. They would be busy doing something else. This is their key proactive role. We can go on and on about it during the course of the Bill, but I assure the Minister that the registrar should do it in a risk-based way. She should not do it, as the Bill says, as is appropriate; she should just do it. That is really the first thing.
I will quickly describe the bottle laundromat. The Minister and I are very familiar with all the stories, but other members of the Committee are not, and the stories are pretty shocking. Every time we hear another one, it is shocking. The stories reinforce the justification for the sort of interventions that Labour Members want to include in the Bill.
Dame Margaret Hodge
I think this is about a different interpretation of words.
The amendment would require Companies House to conduct risk assessments of the information and data it holds on the register for the purposes of the prevention and detection of economic crime. The amendment also creates a basis for new clauses 37 and 38, to introduce an obligation on Companies House to use all the data it collects to identify where economic crime risks lie.
I genuinely think we are quarrelling about words, not about what we want to do. On the basis of that risk assessment, or whatever word the Minister wants to use, Companies House would then decide when to use its powers proactively.
Interestingly enough, my wonderful staff have looked it up, and everybody else uses these terms. We are not alone in this. The Financial Action Task Force standards talk about risk assessments. It talks about a “risk-based approach”. Is that language better for the Minister?
Dame Margaret Hodge
It means the same to us—I think the Minister is really being a little bit pedantic here. If we bring the amendments back on Report with the words “risk-based”, perhaps we will have a better chance of getting them through.
The risk-based approach is central to the implementation of FATF’s recommendations. The UK’s AML regime and the Council of Europe use a risk-based approach, as does the private sector. I want to use a risk-based approach, and so does the Minister, so why do we not just get on with it?
Kevin Hollinrake
We do, and it is exactly what the clause states:
“The registrar must carry out such analysis of information within the registrar’s possession as the registrar considers appropriate for the purposes of preventing or detecting crime.”
In other words, the registrar identifies a red flag and then does an investigation. The right hon. Lady’s amendment 116 says:
“the registrar must carry out a risk assessment to identify where the information it holds might give rise to a matter of concern.”
That is a non-risk-based assessment.
The Chair
Order. Minister, may I intervene for a second? You will have time to respond to all this in the debate, but that is a very long intervention.
Dame Margaret Hodge
I have to say we disagree, but I will come back to this issue. I think our proposals strengthen the Bill.
I tabled my amendments to clause 88 because I do not support the wording of
“as the registrar considers appropriate”.
I have to say to the Minister that we discovered in this morning’s sitting that the company registrar has so far registered 3,000 properties for a register that has now been in place since August. In three months, she has done 3,000, but there are 138,000 to deal with. At that rate—if she does 12,000 a year—she will be there till doomsday, so putting a little bomb underneath her to ensure that she takes action is important.
Liam Byrne
My right hon. Friend is making a brilliant speech. If anything, the Minister has caused more alarm than he might have intended this afternoon by referring to the language in the Bill that says the registrar must take account of the information that she holds. There is no way that we would ask a police officer to police Hodge Hill simply with reference to the information that that police officer happens to hold. We would ask the police officer to look at the crime environment in the constituency as a whole, taking account of all kinds of perspectives, not simply the information that he or she happened to have in their little black book.
Dame Margaret Hodge
I will move on to new clause 37, which has the aim of checking that the stated person of significant control really is the person who controls the company. Powers to get information, to reject documents, to require information and to remove documents all sit in the Bill. The new clause would ensure that, through a risk-based assessment—I just reiterate that for the Minister—Companies House would proactively check that the person named as the PSC was the PSC in reality. Current legislation requires the ID verification of a company owner, but not the verification of their status as a company owner, so the risk remains that nominees will continue to be put forward as owners of companies despite the real control being elsewhere. The risk is heightened if the Minister does not move to ensure that company service providers are properly regulated, supervised and vetted before the whole system comes into force.
In the current system, there are endless examples that demonstrate the extent of the problem that the Minister and the Government are trying to tackle—we are trying to contribute to that process. One is the famous dentist in Belgium. From an interrogation of the Companies House register, we know that five beneficial owners control more than 6,000 companies, which is a huge red flag. Some 4,000 of them are under the age of two, and 400,000 companies—almost 10% of the total—still do not declare a person of significant control. We have the Azerbaijan laundromat example, where a lorry driver in Baku was named as the person of significant control and had no idea that kleptocrats from Azerbaijan were taking all the money out of the banks and money laundering it elsewhere.
There is one filing in Companies House for which I thought I would name the person of significant control. The company is called Global Risks Reduction Funding Ltd, and the name is listed as—I will take a deep breath—
“Neutral-Claimant-Federal-Witness-Director-Captain-Postmaster-Bank-Banker-Plenipotentiary-Notary-Judge-Vassalee For The Vessel-Phouthone-Thone: Siharath.”
I do not think anybody has questioned that as the person of significant control. The whole thing is absurd.
An important point for the Minister is that, in 2019, Transparency International did a quick Google search and found 23 active company service providers that were offering the service of nominee persons of significant control—that was one quick search of one directory. When Global Witness undertook research on Scottish limited partnerships, it found that 40% of the beneficial owners of Scottish limited partnerships were either a national of a former Soviet country, or a company incorporated in the former Soviet Union.
Alison Thewliss
I have been tracking for some time the number of times when a person of significant control for Scottish limited partnerships has not even been registered. Does the right hon. Lady agree that it is ridiculous that there are still 201 companies for which a person of significant control does not exist at all?
Dame Margaret Hodge
Yes. The law is being broken but nobody is pursuing those who are guilty.
These are all reasons for closely monitoring data on persons of significant control. The measure would simply put a duty on Companies House to be proactive and to check the status of the person named on a risk-based basis, not just via their personal details.
New clause 38 deals with dissolution, which has been raised with me by a number of stakeholders. We know of numerous instances of bad people dissolving companies for nefarious purposes. The new clause would ensure that the registrar looks at the accounts of a company seeking to dissolve to ensure that no fraud or other crime has occurred. If the registrar found such cause for concern, she would have to pass the information on to relevant enforcement agencies.
We are all very familiar with the phoenixing of companies and the role that that practice has played in facilitating fraud. I have chosen as an example the case of Rodney and Pauline Williams, which is typical. They ran a company called Curio Bridal Boutique Ltd. They made false representations to take money out of the company and put it into another company in anticipation of winding up Curio Bridal Boutique. They took £111,000, of which they put £42,000 into the pockets of their own family. They were detected and convicted, but sadly the successful detection of such cases is all too rare and the practice happens all too often.
The Troika Laundromat—another of the laundromats that has hit us over the last 10 years or so—is another example of where a leak of documents showed how one of Russia’s largest investment banks, Troika Dialog, was central to the channelling of billions of dollars out of Russia. That leak covered 1.3 million transactions. It involved more than 1,000 UK limited liability partnerships, and it was found that the UK had been handling nearly £10 billion of dodgy Russian money. One UK-based company was found to have made payments totalling £360 million, although it filed accounts each year and dared to declare itself dormant. It then dissolved itself in 2014. That company was called Stranger Agency LLP.
Seema Malhotra
It is a pleasure to speak in this debate on amendments and new clauses relating to clause 88. My right hon. Friend has gone through the measures in considerable detail, so I will limit my remarks, but I want to put on record a number of points about them, because they are important.
Amendments 119, 120 and 116 would ensure that the registrar, rather than carrying out analysis as she sees appropriate, would analyse information in her possession with a view to preventing or detecting crime. I hope that hon. Members agree that we all want the same thing. I also hope that the Minister recognises the work that has gone into thinking this through and seriously considers taking some of the sentiments and wording of the amendments, or perhaps some other wording, to add another layer of robustness to the Bill.
Although the clause does not contain many subsections, it is important, because it is a very big aspect of what we need to be working to achieve and supporting the registrar to achieve, yet it does not go into much detail about Parliament’s intentions and what the Minister expects. The Minister and I disagree slightly. Although I agree that some of the amendments might be slightly more prescriptive than we might like—that is partly about probing and making points on the record—the clause sets out remarkably little direction on a very big part of what we want the registrar to do. I hope that the Minister will be able to reflect on the amendments in the round in the context of adding a layer of robustness to the Bill by ensuring that the registrar is clear on her duty to use the information available and the importance of doing so, and therefore giving confidence. Sometimes when legislation is a little too broad, or not clearly interpreted, it can lead to inertia. It is not always clear what can be done or what was intended by Parliament. Therefore, the reaction is to do less just in case something would cross a line. That is where clarity on how the legislation will be interpreted is important. If there are ways in which we can go further without a downside, we should consider them.
Amendment 120 would ensure that, in carrying out the analysis, the registrar will make use of the power to require additional information under section 1092A, where the registrar considers that additional information may contribute. Making that explicit would be helpful. Amendment 116 would require the registrar, when analysing information for the purposes of detecting and preventing economic crime, to take a risk-based approach. I think that we all agree on that, but my right hon. Friend the Member for Birmingham, Hodge Hill expressed what we expect from the police in terms of thinking a little more widely in relation to the prevention of crime.
We do not seek to extend the requirements too far beyond what is practical for the registrar to do, or to detract from their main responsibilities. This is complex, and it is important to think about the role and objective of prevention, and to give some greater clarity about what might be expected by Parliament in relation to achieving it. Where the risk-based assessment that could be carried out identifies a matter of concern, it would be clear that it was Parliament’s intention that further analysis that may be needed can be carried out, and that information can and should be shared with the relevant law enforcement agency.
As we have stated, the amendments would help to ensure that the legislation in the end does in practice what it sets out to do. That is what we all want to achieve. Indeed, the amendments would give a little more shape to the proactive role that Companies House would have in detecting and preventing economic crime.
I will speak briefly to new clause 37, tabled by my right hon. Friend the Member for Barking. We welcome the new clause, which would insert a duty on the registrar to check an individual’s person of significant control status. That would apply where the registrable person’s identity is verified in the way that she outlined. The registrar would then take steps to ensure that the registrable person whose identity is being verified is indeed a person with significant control over the company. The new clause would ensure that, where there is an identified risk suggestive of potential economic crime with regard to a registrable person who is a person of significant control, that person’s status is then investigated by the registrar or put forward for further investigation, depending on the circumstance.
As we have called for throughout the Committee, we must ensure that the Bill acts on its aims and helps move and encourage Companies House to shift from being a passive administrator to a proactive agent, because Companies House plays a very important role as a first line of defence. The new clause would do just that. I welcome the Minister’s thoughts on these measures. If he opposes the new clause, as he has hinted he might, can he see some arguments for adding some necessary teeth to the legislation, and might he bring forward suggestions of his own?
New clause 38 would provide that in a case where the registrar’s risk assessment under section 1062A(1A) has identified a matter of concern in relation to a dissolved company, the registrar must examine the accounts of the dissolved company with a view to establishing whether any economic crime has been committed. The registrar must share details of any evidence gathered under subsection (1A) with the relevant law enforcement agencies. We welcome the introduction of the new clause, as it would ensure that directors of companies that have been set up and used for fraudulent or criminal purposes are unable to simply dissolve the company to avoid scrutiny or investigation before potentially committing a similar offence with another company.
R3, the insolvency and restructuring trade body, said in its written evidence to the Committee that
“the Government has missed a crucial opportunity to truly close some of the loopholes currently exploited so easily by fraudsters. The Bill’s proposals will be limited in their efficacy to bring about real change to preventing and disrupting economic crime if companies used as vehicles for fraud continue to be dissolved and struck off the Companies House register automatically, with next to no due diligence carried out to ascertain whether the company has been involved in fraudulent activity”.
New clause 38 would tackle precisely that issue, which has arisen in other parts our debate, and introduce the due diligence necessary to ascertain whether a dissolved company has been involved in criminal activity. In its evidence, R3 outlines that around 400,000 companies—I think the Minister also cited this number—are dissolved and struck off the Companies House register each year. We would be grateful if the Minister responded to what we see as a loophole and, in light of previous discussions, explained whether it goes as far as it could.
I will speak briefly to new clauses 41 to 43. New clause 41 would require a person who controls 5% or more of the shares in a public company to disclose the total amount of their shares to the registrar. It would also require a person controlling shares through multiple nominees to declare the total number of shares they control.
New clause 42 would require Companies House to verify both the identity and the shareholding of a person who controls 5% or more of shares in a company where the registrar’s risk-based analysis set out in amendment 116 has identified a matter of concern. New clause 43, tabled by my right hon. Friend the Member for Birmingham, Hodge Hill, would introduce a new provision requiring disclosure of shares held by a nominee. Under the new clause, any person holding shares in a public company as nominee for another person must disclose that fact to the registrar. The registrar may also impose a penalty on any person who fails to comply.
Liam Byrne
It is a pleasure to speak to new clause 43, which is in my name but has been drafted with the assistance of my right hon. and hon. Friends. In introducing it, I have to think that the Minister is a lucky man, because there are very few opportunities when any of us in this place have the chance to translate a life’s work into the law of the land. Yet that is precisely the opportunity that we have afforded to the Minister, who is steering the Bill so ably through Committee. That is why we are here to help him. The Minister will know that he is living the dream.
I know that the Minister is not insensible to the scale of economic crime in this country or to the threat that it poses, because I was privileged enough to be there in Westminster Abbey just a few months ago, when he got up to speak with his customary eloquence to the launch of the economic crime manifesto. That has been drawn up with input from so many right hon. and hon. Members, and it is the manifesto that declares loud and clear:
“Dirty money is a national security threat…Dirty money causes massive financial damage…Dirty money is damaging the UK’s reputation…Dirty money may be pushing up prices for British citizens…Dirty money undermines the rule of law and democratic institutions.”
The Minister knows what he is talking about when it comes to the Bill, which is why he is stewarding it so ably through Committee. That is why I know that, as a canny captain in his Department, he is alive to all the constructive recommendations that we are making to him, because that that strengthens his hand.
The Minister has obviously got some theatre to perform because he has to get the Bill through the House and then get it through the House of Lords, and then back through the House of Commons. As an experienced and seasoned political operator, he will know that it is really wise to make a few strategic concessions to the Opposition to keep them on side. Although he has not revealed that yet by making us any concessions, it will not be long, and it could be at the conclusion of my speech to new clause 43, because it is a blindingly obvious improvement to a current hole in the Bill.
To make that case, I need to demonstrate three things this afternoon: that use of proxies by bad people is a problem; that use of proxies by bad people is a problem here in our country; and that the Bill is deficient and needs toughening up.
Let me share a few examples of why proxies are such a problem. Where better to start than with exhibit A, Roman Abramovich, who was finally sanctioned earlier this year after a disgraceful period of licence in which he was allowed to do terrible things like buy football clubs? Now he has of course put Chelsea football club into some sort of trust. The money is frozen. He has declared that all net proceeds from the sale will be donated to the victims of the war. Members on both sides will have been as surprised as I was to hear from the Foreign Office Minister this morning at Foreign Office questions that that money has still not been routed to victims of Russia’s barbarity in Ukraine; it is still frozen by red tape and bureaucracy in this country.
That is an outrage, because Roman Abramovich secretly transferred hundreds of millions of pounds in assets, including private jets—including the world’s biggest private jet—to his children just days before he was placed under sanctions. That is not my view; that is the view of the Federal Bureau of Investigation. The oligarch has seven children, aged between eight and 30. He is alleged to have made his offspring the beneficiaries of an offshore trust in Cyprus that controls his assets. That transfer was made in February and included a £282-million Boeing 787 Dreamliner, super yachts and trophy items bought through a network of shell companies, including some in Jersey and the British Virgin Islands: Wotton Overseas Holdings Ltd, Jersey; Clear Skies Flights Ltd, Jersey; and Wenham Overseas Ltd, British Virgin Islands.
All that begins to illustrate how a bad actor has used proxies to circumvent sanctions and sanction controls. The tragedy of course is that it was not Companies House that proactively brought the matter to the House to say, “Here we are, folks. I think we have a bit of a problem”; no, we have to learn about it not from Companies House or a British crime enforcement agency, but from the United States, where the authorities brought an action and forced disclosure of the information in the American courts. That underlines my point that use of proxies is a systemic problem.
I want to go further, however, and to illustrate how the use of proxies is a systemic problem of economic crime here in our country. Who better to illustrate that than Alisher Usmanov? He has strong ties to President Putin and his inner circle. On 22 March this year, it was revealed that Usmanov’s sister, a gynaecologist based in Tashkent, had the beneficial ownership of 27 different Swiss bank accounts with hundreds of millions of dollars in them. In fact, analysis of the suspicious activity reports related to those accounts showed that they had been moving around about $1.6 billion. That was revealed in The Guardian newspaper. His assets include a $600-million super yacht, the Dilbar, an Airbus H175 helicopter and UK properties including Sutton Place, a 16th-century Tudor house in Surrey, which are held through a range of different trusts. He is widely known as someone whom we should be taking far more aggressive action against than we are today.
We then have the case of Dimitry Mazepin. He was —is—the controller of Uralchem and a number of other fertiliser companies on behalf of President Putin and the Russian Government. Among the holding companies in Mazepin’s group is Uralchem Freight, based in Cyprus, which has control of a fertiliser terminal in Latvia. The Latvian press, however, reports that the beneficial owner of that organisation is someone called Aamar Atta Bhidwal. That is the same name as a director of Quest Resources, incorporated at Companies House on 16 July 2021, in Guisborough. The co-director was someone called Gordon Alexander, a director of Hutton Chemicals. Quest is also, we are told, in the beneficial ownership of a company with close association with Mr Mazepin.
Clearly, there is already a risk that UK nationals on the Companies House register can be used as proxies, whether wittingly or unwittingly, by someone who is sanctioned.
Kevin Hollinrake
I intervene in the hope that I might abbreviate the debate—I am probably going to fail. Is the right hon. Gentleman aware that it is already the case in law that a share held by a person as a nominee or proxy for another is to be treated as though the share is held by the true owner? Also, in law, failure to declare the true owner is a criminal offence. Is he aware of that?
Liam Byrne
Yes, of course, but the Minister must also be aware that the provisions he has sketched into the law have comprehensively failed, as my next example will now prove.
Mazepin was the majority owner of Hitech Grand Prix, and his son was a racing driver. His company, Uralkali, was the sponsor of this company until March 2022. In March of this year, 75% was transferred to a company called Bergton Management Ltd. The shares were not sold; they were relinquished. There does not seem to have been any cash paid out for this major economic interest in a globally significant grand prix company.
From Bergton Management Ltd, the ownership of the assets moved to somebody called Oliver Oakes, who now controls 75% of the shares. He created Uralkali racing in January of this year. In an interview last year, he called Dmitry Mazepin a friend, associate, colleague and manager. I saw from the Companies House register this morning that he created Hitech Global Holdings on 11 March 2022, just three days after Mr Mazepin and his son were sanctioned.
There is a clear risk that oligarchs are using proxies, and that this misbehaviour is washing up on our shores and in Companies House. That leaves us with the third question: whether there is a hole in the Bill here. We need look no further than the evidence that UK Finance provided to the Committee. I said:
“So you would say to Members of Parliament who are worried about bad people transferring control of an economic asset to proxies that, at the moment, we do not have enough safeguards in the Bill.”
The answer came:
“I think they could be improved, yes.”––[Official Report, Economic Crime and Corporate Transparency Public Bill Committee, 25 October 2022; c. 11, Q10.]
Here is a simple opportunity for the Minister to apply a bit of good old-fashioned belt and braces, make the Opposition happy, keep them on side and ensure that some of his former colleagues who put together the economic crime manifesto are singing his praises wherever they can—accept either the principle or the wording of new clause 43. It asks for nothing more than that any person holding shares in a public company as a nominee for another person must disclose that fact to the register, or face a sanction. That is straightforward, it is not complicated, and it would make a difference.
Kevin Hollinrake
I am grateful to the right hon. Gentleman for his kind words. I remember very clearly my speech in Westminster Abbey that night. He might remember that I talked about corporate criminal liability and whistleblower reform, which are absolutely essential. Indeed, at least one of those falls under my portfolio, so I am certainly committed to bringing forward those reforms when I can.
The only difference between hon. Members of the Opposition and ourselves is the means by which we would achieve the same end. On amendments 119 and 120, I am always happy to look at sensible amendments that take us forward. When Opposition Members talk about those cases, they are talking primarily about cases in the past where we did not have the powers that this Bill provides, and where we did not have the level of enforcement; we both agree that that needs improvement.
Where we differ is on how we go about this. I have serious concerns about the provisions in amendment 116, tabled by the right hon. Member for Barking, which seem to require the registrar to look at every single company on the record. That is exactly what it says. It says that the registrar
“must carry out a risk assessment to identify where the information it holds might give rise to a matter of concern.”
The registrar can do that only by looking at every single record.
Kevin Hollinrake
I will just develop my arguments. I listened to hers at length, and I heard them very clearly. Our approach is a more workable one. I do not think her approach is workable. I think that if we listen to each other’s arguments, we are probably saying the same thing. We are trying to overlay the information that sits with the registrar herself in Companies House with information from others, such as banks, lawyers, accountants—we discussed that in earlier debates—and law enforcement agencies in order to identify where the information she holds identifies risks, so that she can then carry out an investigation.
Kevin Hollinrake
I will develop my point a little further, and then I will let the right hon. Lady intervene.
Liam Byrne
My concern was to ensure that the registrar has a crime-fighting obligation, and that when she conducts her risk assessments, she is not constrained merely to the information that is before her—that which is on the register.
Kevin Hollinrake
As the right hon. Member knows, objective 4 establishes exactly that: an obligation
“to minimise the extent to which companies and others carry out unlawful activities, or…facilitate the carrying out by others of unlawful activities.”
That is quite clearly in the Bill.
New clauses 37 and 38 would require the status of a person with significant control and the accounts of dissolved companies to be checked by the registrar. The registrar would be required to carry out a risk assessment of all those companies—roughly 1,000 companies per day. Members might be thinking that every person with significant control has some connection to Russian dirty money or Russian oligarchs, but the vast majority of state-owned enterprises have a person with significant control, because they own more than 25% of those companies. For the registrar to look at 1,000 companies every single day to determine whether there is a risk, and then investigate further—that is exactly what the right hon. Lady’s new clauses would require—would not be practical.
Dame Margaret Hodge
This is becoming a rather absurd psephological debate. I have just asked my right hon. Friend the Member for Birmingham, Hodge Hill whether I have got the wording wrong—whether there is a great difference between risk assessment and risk-based assessment. Perhaps Government Members will tell me differently, but those two things are the same, and we should not try to locate a difference between them.
The last thing any of us wants to do is micromanage any of our organisations through legislation, but we have to look at the experience and the record of all the enforcement agencies and bodies in the financial services sector over the years. If we have colleagues of ours in the House doing that, they will meet with massive criticism. One way to tighten and toughen this up without having to get involved in the minutiae is to move from powers to duties, which is the purpose of a lot of the amendments we are debating today. If the Minister does not take seriously some of these practical suggestions, he is in danger of setting up a new system that is as open to abuse as the current system, and we will be back here in a couple of years putting it right.
Kevin Hollinrake
All legislation needs improvement, but we must not put the registrar under a duty that makes her job impossible. That is what the right hon. Lady’s amendment would do. That is what I am pointing out to her; not that I do not think—
Kevin Hollinrake
I cannot let the right hon. Lady intervene again. We are pressed for time. We just do not agree on this point. I think that we agree on the broad sentiment that there should be a risk-based analysis, but that is not what her amendment says.
With 1,000 companies resolved every day, it would be impractical to have a risk assessment of every single one of those companies and to then do the risk-based analysis. I think that the amendments are too directive, and I ask Members not to press them. I am happy to consider whether there is a less prescriptive formulation that we could add to the clause to have that effect. I completely understand and concur with Members’ broad objective. Of course we want a proactive regulator who determines where the risks are and acts on information, be it from journalists, private sector companies or enforcement agencies, to inform her work and to make sure that she pursues those who are most likely to be guilty of wrongdoing.
A couple of Members referred to the Russian sanctions regime. In the Russia (Sanctions) (EU Exit) (Amendment) (No. 13) Regulations 2022, we broadened the designation criteria to include specified immediate family members and those with links to Russian state-owned businesses. There are, of course, things like the combating kleptocracy cell at the National Crime Agency.
New clauses 41, 42 and 43 seek to address concerns about nominee shareholders. New clauses 41 and 42 would require people who control, directly or indirectly, 5% or more of the shares in a public company to declare themselves. New clause 43 would require any person holding shares in a public company as a nominee for another person to disclose that fact to the registrar. The new clauses would put additional obligations to disclose information to the registrar on to the person who holds the shares, rather than the company to which the shares relate.
New clauses 41 and 42 would create a burden in relation to public companies that would not exist for private companies. It would not be proportionate to impose such a burden on public companies that are low risk and that have additional requirements placed on them. It is already the case in the law on nominee shareholders or proxies that a share held by a person as a nominee for another is to be treated as though the share is held by the true owner and not by the nominee. Failure to declare a shareholder is a criminal offence and if the court were to find that a person should have been registered, the person and their company would be at risk of prosecution. I hope that provides the assurance that right hon. and hon. Members need.
Dame Margaret Hodge
I know that we share the objectives, but I feel very frustrated by the inability to decide whether a risk assessment and a risk-based assessment are the same. For the life of me, I cannot see the difference. We will put it to the vote and see whether those in favour of risk-based assessments are happy to go with “risk assessments”.
Kevin Hollinrake
That is not what the right hon. Lady has put in her amendment. It says not “risk-based assessment” but “risk assessment”.
Dame Margaret Hodge
I would say that there is no difference. In amendment 116, we have “risk assessments”. For those of us who think this is the way forward, I have to say that the Minister’s argument seems constructed rather than real.
Liam Byrne
On a point of order, Ms Elliott. Can you clarify the order of consideration for the amendments and new clauses in this group?
The Chair
Let me be clear. We are discussing amendment 119 to clause 88. Does the right hon. Member for Barking want to press the amendment to a vote?
Dame Margaret Hodge
No. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment proposed: 116, in clause 88, page 68, line 17, at end insert—
‘(1A) As part of the analysis under subsection (1), the registrar must carry out a risk assessment to identify where the information it holds might give rise to a matter of concern.
(1B) Where the assessment identifies a matter of concern, the registrar must—
(a) carry out whatever further analysis it considers necessary; and
(b) share any evidence of unlawful activity it identifies with the relevant law enforcement agency.
(1C) For the purposes of this section, a “matter of concern” includes—
(a) inaccurate information;
(b) information that might create a false or misleading impression; or
(c) evidence of economic crime.’—(Dame Margaret Hodge.)
Question put, That the amendment be made.
Kevin Hollinrake
Currently, the registrar cannot proactively share the information she holds on businesses and individuals that is of use to law enforcement agencies and regulatory bodies. Nor can she carry out routine analysis to spot patterns of behaviour that are indicative of criminal activity. The clause inserts a new function for the registrar so that she is obliged to undertake such analysis as she considers appropriate for crime prevention and detection purposes, such as spotting fraudulent activity. That will provide the statutory basis on which the registrar’s new intelligence hub will be founded. The hub will be instrumental in identifying strategic and tactical economic crime threats posed by information on the register. That has long been called for. Under the data sharing powers that sit elsewhere in the Bill, the registrar will be able to proactively exchange the fruits of her analysis. The new clause is critical in supporting law enforcement agencies to tackle economic crime.
Seema Malhotra
As I have said before, we do not necessarily have any problem with what is in the Bill. It is about what is not in the Bill. The clause is important. We have debated how it can be improved and I am sure we will come back to debate that further. On the basis that it is an important part of the Bill, we support clause stand part.
Question put and agreed to.
Clause 88 accordingly ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Scott Mann.)
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Pancreatic Cancer Awareness Month
(2 years ago)
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Jim Shannon (Strangford) (DUP)
I beg to move,
That this House has considered pancreatic cancer awareness month.
It is good to see everyone here. I thank Members for attending and look forward to their contributions, especially those from the shadow Ministers. In particular, I look forward to the contribution from the Minister, who is back in post again. I wish her well and look forward to her summing up of the debate.
It is a pleasure to speak on the subject and I declare an interest as chair of the all-party parliamentary group on pancreatic cancer. I am pleased that my application to the Backbench Business Committee for a debate was successful, and I have a number of asks. I pay special tribute to the hon. Member for East Dunbartonshire (Amy Callaghan), who is sitting to my right. She was chair of the APPG, and when her health was not the best, she asked me whether I would take it over. That seemed to be the unanimous opinion of the members of the group, so I was pleased to do so.
I owe the hon. Lady a special thanks. She is the lady, as she always is, who presented the issue and pushed it, and I just follow in her footsteps. That is a fact. I am pleased to see her getting back to health and strength, and look forward to her contribution, which I am sure will be factual and helpful to the debate.
With pancreatic cancer, silence is deadly. That is where we are—very much conscious of pancreatic cancer and what it does. It is a disease that gets too little attention and too little funding. That is one of my asks of the Minister, and I prepare her for it in advance. Later, I will refer to some stats and figures, which will reinforce the issue. Thousands of people die of pancreatic cancer every year, so it is critical that we secure early diagnosis and ensure that the funding for research is there. Ultimately, we must raise awareness of the disease—for example, through today’s debate.
Pancreatic cancer is the deadliest common cancer of all, which underlines the importance of the debate, and the stats surrounding it are truly shocking: 10,000 people across the United Kingdom of Great Britain and Northern Ireland are diagnosed with the disease every year, and half the people diagnosed die within three months of their diagnosis. That is alarming, and I want to present some evidence about how the disease affects people, particularly those in my constituency.
Sadly, only 7% of those who are diagnosed survive five years, and even fewer survive longer than that. The five-year survival rate for pancreatic cancer in Northern Ireland is one of the worst in the world at 4.9%, and it puts us 32nd out of 36 countries in the survival charts. That tells us all about where we are. The Minister is not responsible for health in Northern Ireland because health is a devolved matter, but I want to use the debate to highlight the issue and to show where we can push for the improvements that we would like to see and wish we could have. Back home, I have been pushing the Minister of Health on that for a long time, and I want us to have such a strategy on the UK mainland in the hope that we can do the same in turn in Northern Ireland.
When I am in my constituency office, my heart sinks when people come in for help with their personal independence payment form and inform me that their illness is pancreatic cancer. I feel my stomach sinking and my heart dropping, and I take a deep breath, because I know that I am looking across the counter at someone—man or woman—who, unfortunately, has limited time left in this world. Much more often than not, pancreatic cancer is a death sentence. My office helps people with benefits, PIP forms and universal credit, which eases them through the financial issues. There is a health burden, but the other burden is finance—when someone can no longer earn the money that they need to pay the bills and get through.
November is many things, but we are here because it is Pancreatic Cancer Awareness Month. All around the United Kingdom of Great Britain and Northern Ireland, people have been lighting up their homes and local landmarks purple, holding fundraising events for charities such as Pancreatic Cancer UK, and having conversations. It is so important to have conversations to raise awareness of the deadliest common cancer of all.
Mr Gregory Campbell (East Londonderry) (DUP)
I congratulate my hon. Friend on securing the debate and on the work that he is doing in the all-party parliamentary group. He is highlighting the importance of November being Pancreatic Cancer Awareness Month. Does he agree that early detection is key? Unfortunately, at the moment pancreatic cancer has the lowest survival rate of all common cancers. Awareness is critical in assisting people, moving toward early detection and trying to get those figures down.
Jim Shannon
I totally agree with my hon. Friend. I will give an example and mention a lady’s name; I have her permission to do so. I am pretty sure that the hon. Member for East Dunbartonshire knows this lady, and others may also know her story, which illustrates where early detection and diagnosis can make all the difference. We need to focus on the three symptoms to look out for, which can lead to the early detection and diagnosis that are so important.
Pancreatic cancer is a brutal illness, and there is no better way of understanding how brutal it is than by hearing how it impacts an individual and their family. To that end, I will take the opportunity to share the story of Rebecca Buggs, who is the face of the Pancreatic Cancer UK campaign this Pancreatic Cancer Awareness Month. She is a nurse, who looked after pancreatic cancer patients and was well aware of the symptoms. Ultimately, her awareness of those symptoms saved her life.
The Pancreatic Cancer UK campaign is called “No Time to Wait”, and there is no time to wait. There must be an instantaneous response to symptoms—my hon. Friend the Member for East Londonderry (Mr Campbell) mentioned the importance of that—because for patients with pancreatic cancer, delay means disaster. Rebecca, who is 43, knows that all too well. She has been a nurse for 21 years, and over the course of her career she has prepared many patients for the Whipple procedure—the only operation that provides a possible cure for pancreatic cancer. When Members hear her story, they will understand the importance of that.
On Christmas day last year, almost 11 months ago, Rebecca began to feel very unwell. She believed it was just a covid-19 infection, as many do; if someone is not well, they think it must be covid, because covid has been prevalent for the last two and a half years. Three days later, her husband noticed that she was jaundiced and said, “Becki, you look like a Minion”—not because that is a derogatory term, but because Minions all have yellow faces. After contacting the on-call registrar, whom she fortunately knew because of her role as a nurse, she was told to head straight to her hospital for blood tests and scans.
On 4 January this year, 10 days after her symptoms began, Rebecca was told the devastating news that she had pancreatic cancer. Luckily, her cancer was caught early enough for her to have the Whipple procedure, for which she had prepared many patients over all those years in her job. For most patients, it is far too late; only 10% of people are able to access that surgery. One of the things I will ask the Minister about is access to surgery; I know that she will have an answer to our queries, as she always does.
In the campaign, Rebecca talks incredibly powerfully about how this time was for her and her family. It is not just about the impact on the person who has the disease; it is about the impact, in this case, on her husband, her children, her mum and dad, and everyone else. She talks about how scary it was to be the one on the operating table after preparing so many for the procedure herself, highlighting the experience of so many with this devastating cancer. She said:
“These were the hardest 11 days of my life. I was away from my children, Jacob who’s 9 and Georgia who’s 8, and they couldn’t come and visit me because of COVID.”
It is vital that we drive improvements so that more people like Rebecca can get access to life-saving treatment for this cancer. That is why Pancreatic Cancer UK’s “No Time to Wait” campaign is vital. We need to ensure that people can get a diagnosis and treatment or surgery—whichever is the case—as soon as possible in order to give them the best chance of survival. I share Rebecca’s concern that so many people are struggling to get GP appointments or referrals for the right tests when they have concerning symptoms such as stomach ache, backache and indigestion. As Rebecca says,
“they become so ill and jaundiced that they get admitted to A&E and by then it’s too late.”
When the symptoms and the diagnosis are there and the tests are done, access to surgeons and surgery is so important.
Rebecca’s point about people with pancreatic cancer being diagnosed in A&E is particularly important. We often think in this day and age that if someone receives a cancer diagnosis, that will happen in a quiet consultation room in a hospital or perhaps in their local GP surgery, but more often than not it happens in a crowded room. More often than not—I say this with respect to doctors and GPs—it may become repetitive for GPs to tell patients that they have a diagnosis of whatever it may be, but that is a life-changing statement for the patient.
A person came to see me this week and told me that his wife had been diagnosed with cancer, albeit not pancreatic cancer. The doctor had told her very matter-of-factly that she had it, and she was absolutely devastated. What the doctor perhaps could have done was told her husband, who could then have conveyed the news to his wife in a way that would not have been such a shock.
People might expect that the doctor will give them their diagnosis and follow that up with a clear treatment plan for how they will treat and beat their cancer. In 2022, we expect that there will be a clear path to a cure and a good chance that, eventually, the person will be given the all-clear. But with pancreatic cancer, that just is not the case. More than 60% of patients with pancreatic cancer get diagnosed only in an emergency setting. I think that if anything at all indicates pancreatic cancer, the doctors and those who are aware of it need to prioritise it immediately, because speed is of the essence. Some 70% of people do not receive any active treatment at all, because they are too unwell by the time they are diagnosed; it is almost too late for them. Let that sink in. Imagine receiving a pancreatic cancer diagnosis and then immediately being told, “By the way, there is no possible treatment plan or cure.” That is devastating.
We have to improve; we have to make the situation better. We have to try to respond in such a way that we add comfort, compassion and understanding—and, more importantly, the opportunity for surgery. It bears repeating that more than half of people who receive a pancreatic cancer diagnosis will die within three months. Wow—that is another blinder of a statement. It really underlines the seriousness of the matter. For people with pancreatic cancer, there really is no time to wait.
What is the reason behind my saying all this? Primarily, it is that people with pancreatic cancer are being diagnosed far too late. We are all familiar with the fact that the earlier someone is diagnosed, the better their chances of survival. But some things are needed before people can get that crucial early diagnosis. I will outline some of them, and I hope that the Minister will be able to respond in a way that is helpful.
First, we all need to spread awareness of the symptoms of this cancer, which are stomach and back pain, indigestion, unexplained weight loss, and jaundice. The colour caused by jaundice would obviously be noticeable right away, but all the other things are more difficult. Someone might have a bit of backache and a bit of indigestion now and again. People should always look out for any weight loss, and sometimes even weight gain. Of course, it is striking how common the symptoms on that list are. We would not naturally associate them with pancreatic cancer, but it is vital that people get checks if they experience those symptoms with no explanation. It might not be just backache or a bit of indigestion; it might be more.
Secondly and simply, there needs to be a test. It is all well and good going to the GP with these types of symptoms, but we also need to equip GPs with the tools that they need to start ruling things out. Will the Minister tell us how we can help our GPs to have all the equipment in place to make early diagnoses, and to refer people for the right test as soon as possible if they have even a minute suspicion that a person might be facing pancreatic cancer? Currently, there is no such test, but research is ongoing to try to create one, which could make a huge difference by allowing people to be diagnosed at an early stage.
We often speak about research and development. I probably mention it in every health debate—not to be repetitive, but because it is a real issue. Research and development is so important to find a cure and a way to help patients. Will the Minister tell us what can be done to increase research and development in this area? I will give a shocking figure that underlines the importance of research, which is the third key to unlocking earlier diagnosis. Currently, pancreatic cancer is the fifth most common cause of cancer death, but it receives just 1.4% of cancer research funding in the UK. Without sustained investment in innovative research, we will not be able to improve survival rates at the pace that we must.
To date, Pancreatic Cancer UK has invested over £10 million in pancreatic cancer research, including research that aims to develop a simple test for the cancer, but it is a charity, so its funds are limited. Will the Minister tell us what can be done to help pancreatic cancer research and development? It is sometimes easy to say this, but I genuinely believe in my heart that the Government have to step in and help, because pancreatic cancer is so brutal and singular, and it ends life very quickly. Can we please have some direction on what can be done to help?
To achieve major breakthroughs, we need the research and development upgraded. We need extra money spent, well above the 1.4% of cancer research funding that pancreatic cancer receives at the moment. I say with respect that if Pancreatic Cancer UK can raise some £10 million, which is quite a bit for a small charity, the Government need to match that and do a wee bit better. Despite everything we have heard today, we need the charity’s ambition and spend to be matched by the Government and other national research funders.
In addition to driving crucial research breakthroughs, the Government must ensure that they take action to improve outcomes for people with pancreatic cancer. I know that lots of cancers are deadly, but pancreatic cancer is the deadliest. Because of that, it needs a wee bit of extra assistance. That is particularly important at the moment, as we are heading into what will be a very challenging winter for the NHS, with the pandemic, staff shortages and underfunding pushing it to breaking point. By its very nature, the press is quite negative, and it is sometimes hard to be positive about all the different news that we hear in the media, on TV and in the papers, but we need to have pancreatic cancer research and development, and response, at the centre of our cancer strategy.
Without action, there is a risk that things will get even worse for people with pancreatic cancer, as any additional delays to vital appointments, tests and treatments—the three things we need, along with an assurance on the speed of response—will have an adverse impact on people who have no time to wait. There has been inaction on pancreatic cancer for too long, but together we can change that. Indeed, I believe it is our duty to push for better for those who are faced with this deadly cancer.
We need to see urgent action, and there are things that the Government could do now to start shifting the dial. First, they must publish the 10-year cancer plan as soon as possible. Back in January, the then Health and Social Care Secretary, the right hon. Member for Bromsgrove (Sajid Javid), committed to publishing a 10-year cancer plan that would transform this country into a world-leading force for cancer care and treatment. Our previous Prime Minister recommitted to doing that, but we have since had silence—I say this with respect—from the new Prime Minister, who has had plenty on his plate, and the new Health and Social Care Secretary. Pancreatic cancer has been neglected by successive Governments, as have cancer plans. As a result, survival rates have not improved in decades. There has been a lack of action over time on pancreatic cancer, and we really need to ensure that work is put in place.
A funded and ambitious cancer plan would be a real step in the right direction, demonstrating our national ambition. I am proud to be British and proud to have a Government that lead. We need to lead on this, and we need to do so very quickly. That will give us something to aim for in driving up outcomes and survival, and it will help us to give people hope. That hope has not been there for years, and it needs to be there now. I say this very politely but sincerely and firmly: currently, we are a rudderless ship, and a cancer plan would give us direction and hope. The World Health Organisation advises that all nations need a cancer strategy to give this killer disease the attention it deserves. Through this debate, through our Minister and through our Government, let us become a country that can do better and does not fail to meet that standard.
To make a real difference, the cancer plan must have a specific focus on less survivable cancers, including pancreatic cancer—the ones that kill the most and kill the earliest. Unfortunately, it is possible to receive a diagnosis of pancreatic cancer and, within three months, to be no longer in this world. The plan must include investment in the workforce so that everyone can have a diagnosis and treatment plan within 21 days. That is the best practice that Pancreatic Cancer UK and clinical experts believe should be the reality everywhere. I make a special request for the Minister to address that. I say this often, but it does not lessen the issue, because it is important: I am proud of being in this Parliament of the United Kingdom of Great Britain and Northern Ireland, but we need to share what we have done regionally in Scotland, Wales, Northern Ireland and England in order to do things better. There may even be a necessity for a UK-wide policy and strategy.
Getting a diagnosis quickly is crucial in ensuring people can get the treatment they need as soon as possible. In addition, the cancer plan must deliver the funding needed to enable specialist cancer nurses to support everyone with pancreatic cancer as soon as possible after their diagnosis, helping them manage their symptoms and maintain a good quality of life. We must ensure that, when the family and financial pressures are gathering around someone and they sometimes feel like it is just them fighting the disease, that is not the case. We need to wrap our arms around people and tell them that they are not on their own.
I hope the Government will commit today to publishing the cancer plan. That is critical; it is at the core of the issue, and we need it. I encourage the Minister to meet Pancreatic Cancer UK and people affected by this awful disease to find out more about the “No Time to Wait” campaign and how the 10-year cancer plan can finally shift the dial. I know the answer will be yes but, for the purpose of having it in Hansard, will she commit to having that meeting, which I think will enable Pancreatic Cancer UK to press, push, emphasise and raise awareness of the matter?
There has been silence around pancreatic cancer for too long, but through this debate, together—collectively as MPs, with the Minister and regionally—we can change that attitude. We need to speak up and demand immediate change on behalf of those who have already lost their lives and the families left to grieve, those who are living with pancreatic cancer right now, and those who face a diagnosis in the coming months. We want to give them hope. We want them to know that if they get the disease, their treatment will be prioritised through A&E, their diagnosis will be quick, the response will be equally quick, and surgery will follow.
We have work to do in Northern Ireland, and I understand that—the figures I gave earlier emphasise it only too well—but we also have work to do across this great United Kingdom. I am asking for attention to be paid UK-wide in the form of a pancreatic cancer strategy, with information and guidance shared in every area of this United Kingdom of Great Britain and Northern Ireland.
I am conscious that others want to contribute and I very much look forward to their contributions, including those of the shadow Ministers and, in particular, the Minister. I know that she, along with all of us, will want to do all she can to save lives. I look forward to her response, and I thank the Backbench Business Committee for giving me the opportunity to speak on this subject.
In Pancreatic Cancer Awareness Month we have a duty as elected representatives in this House to deliver a message. With respect, we hope that the Minister and the Government will respond centrally, with a pancreatic cancer strategy that we can all look up to, so that when people with pancreatic cancer come to my office, as they often do, to fill in PIP forms, I can then tell them that there is some hope and show them what they need to do.
Several hon. Members rose—
Mr Philip Hollobone (in the Chair)
Order. The debate can last until 11 am. I am obliged to call the first of the Front Benchers no later than 10.27 am. Guideline limits are 10 minutes for the SNP, 10 minutes for His Majesty’s Opposition and 10 minutes for the Minister. Jim Shannon will have three minutes at the end to sum up the debate. The next 30 minutes are Back-Bench time. There are three Members seeking to speak, the first of whom is Siobhan Baillie.
Siobhan Baillie (Stroud) (Con)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate the hon. Member for Strangford (Jim Shannon) on securing the debate in an important awareness-raising month for pancreatic cancer. I meet hundreds of people each month as Stroud’s MP, and I am asked to take up thousands of issues and causes. Sometimes people demand that I take up causes, and my team get fed up with me, because I want to help everybody, and they say I generate work whenever I leave the house. I know that many MPs across all political parties will share the same experience.
When constituents come with very clear asks and a constructive approach, it makes it easier for us as MPs. I have found over time in my still relatively new role in the past three years that everybody who comes to talk to me about pancreatic cancer comes with that constructive approach and a clear set of asks about what they want to happen. It does not matter how personal it has been for them, or whether they have had loss or are cancer survivors themselves. Pancreatic cancer is something that people want to see changed. They are going about it the right way, by bringing matters to us, so that we can raise issues with Ministers. I thank them for that, as well as the charities, Pancreatic Cancer UK and others.
The more I have looked into the subject, the more I have understood why it needs to be addressed. Campaigners and families affected by pancreatic cancer talk about the failure in our NHS medical system. As wonderful as the NHS is, there is a failure to detect this cancer earlier. They raise the failure to get people properly to understand the symptoms of this cancer. One of my constituents says, “The clue is in the loo,” which I like as a slogan. They also raise the failure to prescribe medicine that will help people, which I will come to separately.
If there are clear asks in this area of medicine, people are confused why they are not being met. The medical healthcare system is failing our constituents at the moment on pancreatic cancer. I know that Stroud people, whom I love dearly, will die of this most deadly common cancer, if the health care system does not change.
I want to talk about one of my constituents: a young woman, my age, a mum, businesswoman, super-bright cancer survivor. She is a young woman with what was thought of as an elderly person’s cancer. For about five years, she went to her GP with fatigue, bloating and general lethargy, but a further investigation into cancer was not done. She went backwards and forwards with a list of symptoms, but it was not picked up. Her tumour was the size of a walnut and internal, so that it could not be felt. We have got used to checking our bits and bobbins, as my wonderful hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) tells us to do, but where there is an internal walnut-sized lump—not lumps on breasts or testicles—we are stuck, and people are not detecting it. If our medical system is not detecting it, we are in difficulties.
My constituent’s experience highlights the need for people and health care professionals to be alert to smaller symptoms that could be a sign of pancreatic cancer. We need to talk about poo—the clue is in the loo. We need to raise awareness of this silent cancer. If the general population is not aware of symptoms, we will miss it and will get further into difficulties with that devastating loss.
My constituent also asked me to campaign on the issue of PERT—pancreatic enzyme replacement therapy. There has been a push from cancer charities to try to get PERT prescribed more frequently, because three in four people with pancreatic cancer reported that PERT improved their quality of life. It is about 60 tablets a day and not an easy thing for people to take, but it improves their quality of life. It reduces the weight loss, the appetite loss, the abdominal pain and the bloating or wind. It reduces pale, oily and floating poo, and it reduces diarrhoea. All of that enables patients to regain some normality in their day to day lives, and it helps food to be digested and absorbed by the body. That means they gain strength to undergo potentially life-saving treatment. Given that we know about that treatment, why is it not prescribed as frequently as campaigners suggest it should be?
We understand there is a lack of awareness among healthcare professionals about what PERT can do, and that the levels of nutritional expertise among healthcare professionals are quite low, particularly in general hospitals. We know, as the hon. Member for Strangford has set out, that the stage that people are diagnosed with pancreatic cancer is incredibly late.
I have six key asks: to raise awareness among healthcare professionals; to place PERT at the heart of pancreatic cancer treatment improvements; a top-down prioritisation and approach that tackles the entire pathway of treatment and care; to make PERT a UK-wide priority in pancreatic cancer care; national targets for the use of PERT; and local health bodies to ensure the effective prescription of PERT.
I want to hear from the Minister today in relation to PERT and the prescription—or lack—of it. I also want to draw her attention to a study into pancreatic cancer —there is not enough time to go into it today—by Oxford University and Pancreatic Cancer Action, which was released last week. I read it last night and it is excellent. The founder and CEO, Ali Stunt, is an incredible woman. In fact, we are surrounded by incredible women campaigners, and we should pay homage to the late, great Dame Deborah James. I am sure all of us have been moved by seeing what she managed to achieve on social media. I know her family are continuing with the campaign.
All of my Stroud constituents who brought these issues to me want to see action and they want to hear from the Minister. I am really pleased we are having this debate, and I thank the hon. Member for Strangford for securing it. I hope that we can all come together to reach agreement about what should happen.
Amy Callaghan (East Dunbartonshire) (SNP)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate the hon. Member for Strangford (Jim Shannon) on securing this important debate today, and on all the work he does in raising awareness of pancreatic cancer.
I do not need to tell anyone here how cruel an illness pancreatic cancer is. We know it from experience, whether that be personal or from hearing the tragic stories of our constituents. My parents lost one of their closest friends to the disease 20 years ago, and yet we are nowhere near as far forward in treating and, crucially, diagnosing it as we could be in 2022.
I see the purpose of today’s debate as awareness raising. Too many lives are lost to pancreatic cancer, so let us try to save some by getting people diagnosed earlier. There are numerous ways of doing that. People need to be more aware of the signs and symptoms, which I will come to shortly and which other hon. Members have outlined. GPs and other healthcare professionals need to be able to recognise the symptoms once presented, and we need incredibly speedy action if pancreatic cancer is suspected; there must be urgent access at the point of diagnosis.
That is not happening right now. Only 16% of people with pancreatic cancer are diagnosed at an early stage, and emergency presentation remains the most common route to diagnosing it. There is still too low an awareness of it across our communities: 76% of people in the UK are unable to name a single symptom of this terrible disease. Worse still, it is not easily recognised when presented to our healthcare professionals.
The story of my constituent Barbara sadly emphasises that point. She was 65 years old when she first experienced pains in her abdomen—the first symptoms of her pancreatic cancer. She had not long retired, having been a PE teacher for 40 years. She played hockey for Scotland. She was fit, active and not overweight; she ate healthily, did not smoke, drank in moderation and walked her dog every morning.
Barbara saw her GP within a week of first having pain. They prescribed an indigestion remedy and suggested paracetamol for the pain. She saw her GP at least once a month over the next year as the pain intensified and spread to her back. Her GP referred her for blood texts, X-rays, ultrasound, a colonoscopy and an endoscopy, but all tests were negative. None of the NHS practitioners who performed the tests recognised the symptoms.
After a year, the GP put in a referral for Barbara to be seen by a consultant. By that time, the pains were almost so unbearable that she was more or less confined to her house. She arranged to see a private health consultant and paid to have a scan. Within two weeks, she was told that she had a cyst in her pancreas, and further investigation three weeks later diagnosed a cancerous tumour on her pancreas, and she was told immediately that there was no cure.
Barbara received chemotherapy for six months. At first, the treatment caused the tumour to shrink a little, but it soon began to grow again. The treatment made her feel very ill. Barbara made the decision to discontinue the chemotherapy. It took almost 18 months for Barbara to have her condition diagnosed, and that happened only after a private healthcare consultation. She died two years and two months after experiencing her first symptoms. I thank her family for allowing me to share her story today to help raise this crucial awareness.
By raising awareness, we can help people get diagnosed earlier and live longer lives. For those diagnosed in time for life-saving surgery, five-year survival increases significantly. Raising awareness of an issue or illness comes in a multitude of ways. I congratulate my constituent Lesley Irving on the power of work she has done to raise awareness of pancreatic cancer since losing her mum to the illness on 6 June 2020. Lesley has got public and private buildings across Scotland to light up purple, and she assures me that this year will be the best one yet. I look forward to meeting her next week to recognise her achievements and celebrate the memory of her mum.
If anyone watching this debate is experiencing a loss of appetite, upper abdominal or mid-back pain, fatigue, unexplained weight loss, jaundice, nausea and vomiting, they should please see their GP and explain that they think it could be pancreatic cancer. It could just save their life.
Elliot Colburn (Carshalton and Wallington) (Con)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate the hon. Member for Strangford (Jim Shannon) on securing the debate, and I thank my hon. Friend the Member for Stroud (Siobhan Baillie) and the hon. Member for East Dunbartonshire (Amy Callaghan) for their contributions. I am delighted to be taking part in this debate, not just because I am the new chair of the all-party parliamentary group on cancer, but because my borough is home to the excellent Royal Marsden Hospital, the Institute of Cancer Research and the London Cancer Hub.
Colleagues have set out the key issues very well indeed, but they are worth repeating. Out of all the common forms of cancer, pancreatic cancer remains the deadliest. More than half of all patients die within just three months, and only 7% live beyond five years. It is always difficult for an individual to go through a cancer diagnosis, but the statistics make a pancreatic cancer diagnosis particularly hard on the individual, their friends and family, so it is right that Government redouble their efforts to work with the NHS and the third sector, particularly with Pancreatic Cancer UK, in order to improve survival rates.
I join colleagues who have reiterated key calls made by Pancreatic Cancer UK. They include providing a clear and urgent national-level focus on pancreatic cancer and other less survivable cancers, investment in targeted innovative pancreatic cancer research, producing more and better data, publishing the 10-year cancer plan and improving access to PERT. However, I would like to focus on an additional call in my speech today.
I acknowledge the good work the Government have done in this space already, including trying to raise awareness of PERT, conducting better data audits, looking to see how we can improve diagnosis and providing a commitment to look at that in the 10-year cancer plan. I hope the Minister can provide us with some assurances about the publication of that plan. We know that health disparities exist across the country and between people with different protected characteristics, but I hope we can learn from an example of best practice in my own constituency.
In Carshalton and Wallington, we are lucky to have the Royal Marsden on our doorstep, along with the Institute of Cancer Research, where world class research is happening, and the London Cancer Hub, which I would be delighted to invite the Minister to come and visit whenever she is free. That site is truly a world leader in cancer research, second only to those in the United States. The Royal Marsden is currently being refurbished, and it is looking to increase its capacity and work with partners to deliver new and innovative treatments.
One of the most exciting projects coming down the line is the partnership with the Epsom and St Helier University Hospitals NHS Trust. That project plans to invest in the existing two hospitals and build a third acute hospital, which will be a specialist emergency care hospital, on the old Sutton hospital site, next to the Royal Marsden. As well as providing state-of-the-art acute services, that will also help the Royal Marsden with capacity to provide cancer surgery on the Sutton site, rather than sending people covered by that catchment area up to Chelsea, which can sometimes be difficult. That means local cancer patients, and cancer patients from across south London, Surrey and parts of Sussex, will be able to conduct most, if not all, their cancer journey right on their doorsteps.
I welcome the work the Government have done to increase investment in the NHS and develop strategies in this area, but a major barrier that prevents optimal care, not just for pancreatic cancer but across the NHS and social care sector, is workforce. I know the Minister knows that already. Yesterday, I had the honour of chairing a roundtable event with the Westminster Health Forum to discuss how we tackle cancer backlogs and how we optimise cancer care in the UK. Again and again, workforce was brought up as the major barrier to improvement. We can invest as much money as we like, develop new strategies and, of course, find efficiencies and better ways to do things, for example by investing in digital and information technology, but without the workforce on the ground to deliver it, much of what we do will not create an impact, at least from a patient perspective, for a long time.
It must be stressed that workforce does not just mean doctors. Of course we need more doctors, and I am glad to see the progress the Government are making on our manifesto commitment to recruit more doctors, but it must also include nurses and allied health professionals, such as oncologists, pathologists, data scientists and all the specialists involved in the cancer pathway. I appreciate that creates a massive challenge, because we cannot magic a skilled workforce out of nowhere: it takes years to train the staff required. There are a few things the Government can do in the short term to encourage recruitment and retention—I reiterate calls to look again at NHS pensions, which are incentivising early retirement—but workforce options are few and far between, without training the next generation of the NHS workforce.
As the Minister may have guessed, my fifth call to Government is that a specific NHS and social care workforce plan is developed, alongside the cancer plan, in order to take advantage of the measures available in the short term and to increase the number of people in that highly trained workforce. That will help to fill the vacancies that it is necessary to fill and deliver first class, nationwide cancer care, including for pancreatic cancer patients.
I look forward to hearing the Minister’s response to the calls from colleagues and from Pancreatic Cancer UK, because as has been set out so well, a diagnosis of pancreatic cancer can be truly devastating for people. I hope the Government can offer some assurance and some hope to patients today, and to future cancer patients, about the work they are undertaking to improve patient experiences.
Carla Lockhart (Upper Bann) (DUP)
Thank you for your indulgence in allowing me to speak, Mr Hollobone. I commend the hon. Member for Strangford (Jim Shannon) for securing this debate; he is a tireless champion for his constituents and for many issues that impact the lives of people across the United Kingdom.
The words pancreatic cancer strike fear into us all, as it is widely recognised to be the most deadly form of this terrible disease. We all know of people in our own lives who, when faced with that diagnosis, have fought valiantly, but ultimately have succumbed to this aggressive form of cancer. Sadly, I know of some who are no longer with us, who were diagnosed during the pandemic and so received the devastating news alone. They were not allowed to have anyone there to comfort them, offer spiritual support or bring someone with them on their treatment journey. That is cruel in the aftermath of such a cruel diagnosis.
As with all cancers, early detection of the disease and the resumption of treatment is of fundamental importance. It is when considering this aspect that we must look closely at access to GPs. As Members across the House have said, over the last two years we have seen how obtaining any appointment, even by telephone, is increasingly difficult. Face-to-face appointments are almost impossible to secure for many people. The vague symptoms that often present for those with pancreatic cancer are unlikely to trigger any form of consultation, particularly face to face. They are also most likely to lead to a patient giving up the fight to see their GP, given the barriers to consultation.
We have rightly spoken today about the awareness of symptoms and the importance of early detection. My concern is the pathway to investigation of symptoms; detection is blocked off at that first point of community healthcare. We need to focus on GP services and ensure GPs are resourced and then willing to return to pre-pandemic practices. Colleagues have rightly spoken about research and the importance of increasing funding. We have seen encouraging developments in recent years, including in the research led by Queen’s University Belfast. I join others in asking for increased funding towards treatments to help save lives.
I will finish by commending some of the charities in my own constituency and in Northern Ireland, which are so forward thinking in raising funds to support those who receive a diagnosis, as well as the families who have to live with that diagnosis. They also help to fund research. I commend NIPANC, a charity headed up by Mr Mark Taylor and supported by a family in my constituency, Mrs Susan McLaughlin and her two sons, Aaron and Adam. They lost a father and a husband, Colin. Adam was just three when Colin died very suddenly from pancreatic cancer. I want to commend Mrs Victoria Poole, who volunteers with Pancreatic Cancer UK and who also lives in my constituency. They are all strong advocates who want to see change and to see the Government stepping up to the mark with regards to pancreatic cancer research.
Jim Shannon
I am reminded of a lady I met when I was a Member of the Assembly between 1998 to 2010. Her name was Una Crudden, and she brought the issue to my attention. She was a great advocate of how to deal with pancreatic cancer; she was raising awareness, even back at that time. I often think of her because she was a determined lady and a great supporter of her family. They were a family who were very much together. I am minded that she struggled with that disease for four or five years and ultimately passed away, but it is the Una Cruddens of this world—my hon. Friend referred to some of her constituents—who bring this matter to the fore.
Carla Lockhart
Absolutely. I knew Una from my Stormont days as well—she was a courageous lady who deserves to be mentioned in this debate.
I pay tribute to all those who are involved in charities. They support our healthcare system and I commend them today because they are the true heroes. The NIPANC motto for Pancreatic Cancer Awareness Month is “Time Matters”, and the message today is that time matters: understand the symptoms and seek urgent, early diagnosis.
Steven Bonnar (Coatbridge, Chryston and Bellshill) (SNP)
It is a pleasure to see you in the Chair, Mr Hollobone. I congratulate the hon. Member for Strangford (Jim Shannon) on securing this debate on Pancreatic Cancer Awareness Month and setting out matters in such great detail for us. We have heard from hon. Members about a wide range of issues faced by constituents across the nations of the UK in dealing with this type of cancer. The hon. Member for Stroud (Siobhan Baillie) spoke of how well informed her constituents are and the asks they have of the Government in this area. My hon. Friend the Member for East Dunbartonshire (Amy Callaghan) spoke of her constituent Barbara and her experience of NHS services failing to identify and diagnose her cancer in time. We also heard from the hon. Members for East Londonderry (Mr Campbell), for Upper Bann (Carla Lockhart) and for Carshalton and Wallington (Elliot Colburn), and I thank all Members for their contributions.
November is Pancreatic Cancer Awareness Month and 17 November is World Pancreatic Cancer Day 2022. It is so important to raise awareness through these days and through our debates to improve early diagnosis by ensuring that more people know the early symptoms of pancreatic cancer. It has the lowest survival rate of all common cancers and is the deadliest common cancer in Scotland and across the United Kingdom. There are around 10,500 new cases in the UK each year. That equates to 29 cases every single day. It is the 10th most common cancer in the United Kingdom, accounting for 3% of all new cases, and the fifth biggest cancer killer with 9,000 deaths each year. In Scotland, there are around 900 new cases per year, with an incidence rate of 15.5 per 100,000 people.
Pancreatic cancer is caused by the abnormal and uncontrolled growth of cells in the pancreas—a large gland that is part of our digestive system. In the early stages, a tumour in the pancreas does not cause any symptoms, which can make it difficult to diagnose, as we have heard. Symptoms can vary from person to person and may include jaundice, indigestion, stomach or gut pain, back pain, diarrhoea, constipation or weight loss. Pancreatic cancer is particularly difficult to diagnose early, as we have heard so many times, and Pancreatic Cancer UK reports that 80% of cancer patients are not diagnosed until the cancer is at an advanced stage. While the causes are not clear, it is most common among those aged 75 years and over, with almost half of all new cases diagnosed falling in that age demographic.
Early diagnosis is crucial to improving survival outcomes, with one year survival rates for those diagnosed at an early stage being six times higher than those diagnosed at stage 4. However, most people with pancreatic cancer are unfortunately diagnosed at that late stage. At present, surgery is the only treatment with curative intent for pancreatic cancer, while chemotherapy and radiotherapy have been shown to improve survival in those with late- stage pancreatic cancer. If it is diagnosed at a late stage, surgery to remove the cancer is usually not possible.
The Scottish Government are committed to diagnosing cancer as early as possible, which is why they continue to invest in their detect cancer early programme, or DCE, and are rolling out rapid cancer diagnostic services across Scotland. We know the earlier that cancer is diagnosed, the easier it is to treat. That is why the Scottish Government continue to invest in that programme, which adopts a whole-system approach to diagnose and treat cancer as early as possible. They are developing a new plan for early diagnosis as part of their new cancer strategy to be put in place in spring.
The new 10-year strategy will take a comprehensive approach to improving patient pathways from prevention and diagnosis through to treatment and post-treatment care. That follows on from the establishment of three rapid diagnostic services centres, developed within the NHS infrastructure. The centres are in Ayrshire and Arran, Dumfries and Galloway, and Fife. They will play a key role in delivering early diagnosis and improved care, with fast-track diagnostic testing at the first appointment wherever possible.
The First Minister announced as recently as 10 October that the next two rapid cancer diagnostic services centres in NHS Scotland will go live in my own NHS board of NHS Lanarkshire and in NHS Borders. Through the NHS recovery plan, the Government in Holyrood have invested £29 million to provide an increase of 70,000 diagnostic procedures next year and 90,000 by the end of the plan in 2026. A new DCE awareness campaign is also under development to empower people with possible cancer symptoms to act early. That is due to be published in spring 2023.
In Scotland, it has been recognised that the impact of the covid-19 pandemic may have exacerbated inequalities within cancer screening, and the Scottish Government have committed up to £2.45 million to the screening inequalities fund over the past two years. Public awareness campaigns and messages have run throughout the pandemic to encourage those with possible cancer symptoms to seek help. To support scope-based diagnostics, the Scottish Government have published a £70 million endoscopy and urology diagnostic recovery and renewal plan, focusing on key areas such as balancing demand and capacity, optimising clinical pathways, improving quality and efficiency, workforce training and development, and infrastructure and innovation redesign. A further £9 million has been allocated this financial year to support diagnostic imaging capacity, with six mobile MRI scanners and five CT scanners in place across Scotland’s NHS.
Despite all that work and all the amazing work of charities and activist organisations, and their dedicated supporters, which has been placed on the record today, there is still so much more for us to do. Investment in facilities, improved treatment options and early detection are all necessary, but it is also vital that research into alternative cancer treatments continues and expands. The Scottish Government provided an average of £2 million each year to cancer research causes in the five years before the pandemic, and that remains our priority.
According to Pancreatic Cancer UK, research into the disease has been underfunded for decades. The charity estimates that pancreatic cancer receives 1.4% of cancer research funding and yet is the fifth biggest cancer killer. Just recently, to mark World Cancer Day, Cancer Research UK delivered a cash injection of £12 million to the Cancer Research UK Scotland centre, supporting the work of cancer researchers from the University of Edinburgh and the University of Glasgow. Professor Ian Tomlinson, who is co-director of the centre, welcomed the finance but highlighted how challenging the previous year had been and the fact that covid-19 has slowed down research.
Finally, we in the SNP commend all the charities and activist organisations and their dedicated supporters for their tireless efforts to raise awareness of pancreatic cancer. We have called on the UK Government to support Cancer Research UK and other research charities throughout the pandemic, while their funding activities have been curtailed by restrictions, and now in the face of people being more cautious with their money. With the Tory cost of living crisis continuing to undermine people’s financial security and their ability to support charitable efforts, it is more important than ever for the Government to step in and support charities in their work and to directly fund cancer research.
Feryal Clark (Enfield North) (Lab)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I start by thanking and paying tribute to the hon. Member for Strangford (Jim Shannon) for securing this morning’s debate to mark Pancreatic Cancer Awareness Month.
As other Members have done, I pay tribute to the brilliant work of Pancreatic Cancer UK. Such organisations are vital in raising awareness of this awful disease. I also praise the important contributions made by all Members, and thank them especially for sharing the touching stories of their constituents.
As we have heard throughout the debate, pancreatic cancer is the deadliest of the common cancers. It affects about 10,000 people a year across the UK, with three in five of those being diagnosed at a very late stage. More than half of those people will die within three months of diagnosis, only 7% will survive for more than five years, and 5% will survive for 10 years or longer. The figures are even worse in Northern Ireland, as we have heard.
In the North Central London integrated care board area, within which my constituency of Enfield North falls, 161 people were diagnosed with pancreatic cancer in 2020, and there were 153 deaths due to pancreatic cancer, so I sympathise profoundly with anyone who is affected by pancreatic cancer and with the family members of those who are suffering. Those statistics are shocking, but even more shocking is the fact that they have barely changed in the past 50 years, and that the UK ranks 29th of 33 countries with comparable data on five-year survival for people with pancreatic cancer.
One reason for the tragically low survival rates is the stage at which people are diagnosed, as was mentioned by the hon. Members for East Londonderry (Mr Campbell), for East Dunbartonshire (Amy Callaghan) and for Strangford, and other Members who contributed. Only 16% of people with pancreatic cancer are diagnosed at an early stage. For many, it is simply too late, so I would be grateful if the Minister outlined how the Government intend to improve the diagnosis of pancreatic cancer.
One thing we cannot ignore is the cancer backlog. Over the past decade, pancreatic cancer mortality rates have increased by a fifth. Waiting lists have risen to record levels and the proportion of people waiting less than 18 weeks for treatment is at its lowest in a decade. At the end of July 2020, waiting lists had risen to a record 6.8 million people, with almost 400,000 patients waiting more than a year. The Government are missing their target to eradicate the two-year wait, and analysis produced in May by Macmillan found that it could take more than five years to clear England’s cancer treatment backlog. For pancreatic cancer patients, that is simply not good enough. They cannot afford to wait.
Many Members have spoken about the workforce element, which underpins all the issues outlined in the debate. As was eloquently described by the hon. Member for Carshalton and Wallington (Elliot Colburn), without a robust workforce strategy, our NHS will simply not be in a place to provide the support that pancreatic cancer patients need, yet Ministers continue to ignore those calls—even calls from their own Chancellor, who is the former Chair of the Health and Social Care Committee. A recent report by the Committee said that the absence of a “serious effort” from the Government to tackle gaps in the cancer workforce is jeopardising earlier diagnosis, so I am keen to hear from the Minister what plans the Government have to ensure that staff are trained and retained sustainably, such that pancreatic cancer patients can always access care in a timely manner.
Labour has already set out its plans, pledging the biggest expansion of medical school places in history to give the NHS the doctors it needs so that patients can be seen on time. That commitment also includes creating 10,000 new nursing placements every year and training 5,000 new health visitors. Labour will also produce a long-term workforce plan for the NHS for the next five, 10 and 15 years to ensure that we do not find ourselves in this position again.
Members also mentioned the 10-year cancer plan. In February, the then Health Secretary announced a new war on cancer and launched a call for evidence to inform a new 10-year cancer plan for England. That call for evidence closed in April. We are now on our fourth Health Secretary since April, but there is still no sign of the plan. That is not good enough not just for those suffering with pancreatic cancer, but for those with all forms of cancer. Will the Minister set out exactly when we can expect this cancer plan? As we emerge from the pandemic, people living with pancreatic cancer need an NHS that has the time and resources to support them. It is about time that the Government delivered on that.
The Minister of State, Department of Health and Social Care (Helen Whately)
I congratulate the hon. Member for Strangford (Jim Shannon) on securing this important debate, and for his work as chair of the APPG on pancreatic cancer. He is right: we should talk about pancreatic cancer; we should talk about how to improve survival rates and diagnosis rates; and we should talk about how we can raise awareness of pancreatic cancer. As we do so—including in this very debate—that in itself will make a difference, and if we do not debate this now, during Pancreatic Cancer Awareness Month, then when? I believe in seizing the moment.
I welcome the speeches from the hon. Members for Strangford, for East Dunbartonshire (Amy Callaghan) and for Upper Bann (Carla Lockhart) and my hon. Friends the Members for Stroud (Siobhan Baillie) and for Carshalton and Wallington (Elliot Colburn), who also seized this moment to speak about pancreatic cancer. The hon. Member for Strangford spoke movingly about Rebecca Buggs, whose children were just eight and nine years old at the time she had surgery. I am very glad that because she was diagnosed early, she was able to have surgery, but we know that, sadly, her experience is the exception not the rule.
The hon. Member spoke about the importance of raising awareness of symptoms such as stomach and back pain, indigestion, unexplained weight loss and jaundice, and the importance of getting those symptoms checked if there is no explanation. He also spoke about research as the key to earlier diagnosis. On one of his questions, I will answer straightaway that, yes, I would be delighted to join him for a meeting with Pancreatic Cancer UK. I will come to his other questions as I go through my speech.
My hon. Friend the Member for Stroud mentioned that she wants to help everybody and, knowing her well as a colleague, I know that that is absolutely true. She also mentioned the catchphrase, “The clue is in the loo,” as mentioned by other hon. Members. She spoke movingly about one of her constituents, a young woman who spent five years going to and from her GP with symptoms, including fatigue and bloating, which brought to life how hard this cancer is to detect. She also talked about the PERT treatment, which I will come to in a moment.
It is very good to see the hon. Member for East Dunbartonshire, a former chair of the APPG, here and to hear her speaking so eloquently in this debate. She spoke about Barbara, a PE teacher, and about the healthy life she lived. Barbara went many times to get a diagnosis, but it took almost 18 months to get one. Again, sadly, that brought to life how hard this cancer is to detect.
I thank my hon. Friend the Member for Carshalton and Wallington for acknowledging the work that the Government have done, particularly on raising awareness for pancreatic cancer. He talked about the importance of the workforce, which I will come to. He also asked me to visit the Royal Marsden, of which he is rightly proud, and which I would be delighted to do.
The hon. Member for Upper Bann spoke about the importance of access to GPs. She called for more funding into research, and said, rightly, that time matters.
I will come to many of the points that hon. Members have raised, but first, I believe in saying it as it is. Nearly 10,000 people a year are diagnosed with pancreatic cancer, and that figure has steadily increased since 2013. Diagnosis rates increase with age, and from the mid-40s onwards pancreatic cancer is more common in men than in women. Just under a quarter of pancreatic cancers are diagnosed at an early stage, so three quarters are not. About 40% of diagnoses follow an emergency presentation. The one-year survival rate is just 27% and the five-year survival rate is only 7.8%. Although those figures have improved in the past 10 years, they are still bleak for anyone who receives a diagnosis and for their loved ones. That is why it is right to talk about pancreatic cancer.
As with many other cancers, early diagnosis of pancreatic cancer is crucial so that there is the opportunity for successful treatment. One of the Government’s healthcare priorities is to improve early diagnosis of all cancers, and to achieve 75% diagnosis at stage 1 or stage 2 by 2028, compared with the current rate of about 50%. We have opened 91 community diagnostic centres, which have carried out 2 million extra scans, tests and checks, including cancer tests. We are rolling out non-specific symptom pathways so that people with symptoms such as weight loss or fatigue are either diagnosed or have cancer ruled out. We are encouraging people to go and get their symptoms checked. The NHS’s “Help Us, Help You” campaign tackles the barriers that prevent some people from getting their symptoms checked, such as fear about what might be found.
The hon. Member for Enfield North (Feryal Clark) talked about waiting times, and I assure her that we are tackling them. This August, more than 19,000 patients saw an upper gastrointestinal specialist, compared with 17,600 last August, and 17% more patients have seen a specialist within the two-week performance standard. That said, I recognise that the NHS is still not hitting the standard for enough people—it is currently 83%, compared with the 93% standard—so we will continue to support the NHS’s efforts to tackle waiting lists and backlogs.
On treatment, credit is due to hard-working NHS staff who have increased cancer treatment levels to 107%, compared with pre-pandemic levels. The cancer drugs fund has helped more than 80,000 patients, and we are investing £5.4 million in five new national clinical audits of cancer, one of which is focused on pancreatic cancer.
As several hon. Members said, the key to making a big leap forward in survival rates for diseases such as pancreatic cancer is research—research into tests that will achieve earlier diagnosis and research into treatments. The Government spend £1 billion a year on health research through the National Institute for Health and Care Research. The NIHR has funded seven research projects for pancreatic cancer since 2019, with a committed spend of about £3.6 million. That is about 5% of the NIHR’s total funding for cancer research, which is over £73.5 million.
Jim Shannon
I referred to the fact that Pancreatic Cancer UK has raised £10 million for research every year, and one of its requests is that the Government match that. I thank the Government very much for the £3.6 million that is going to pancreatic cancer, but is it possible for that extra bit of effort to be made and for the Government to match the charity’s £10 million? I do not want to put the Minister on the spot, but I really do think that is an important issue.
Helen Whately
I absolutely hear the hon. Gentleman’s request, which is for match funding for the funding contributed by Pancreatic Cancer UK. I will say two things about that. Another function of the NIHR is to support research where the funding comes from other organisations; it already does that. In fact, it has supported 70 pancreatic cancer-related studies that have been funded by others.
The other point, which the hon. Gentleman may be aware of, is that the NIHR does not actually ringfence funding for specific diseases. That is similar to his match funding point. The NIHR is ready to fund research. It looks at applications for funding from the research community and then allocates that funding by looking at the merits of the proposal. We should encourage more bids for funding for pancreatic cancer research and more bids to go into the NIHR, which would then enable it to allocate more funding. I am assured the NIHR stands ready to fund pancreatic cancer research; it is about getting those applications in to carry out that research. I could publish a highlight notice to flag to the research community the importance of pancreatic cancer, which may go some way to achieving what the hon. Gentleman seeks.
My hon. Friend the Member for Stroud spoke about PERT and asked why it is not prescribed for more people. National Institute for Health and Care Excellence guideline NG85 recommends that PERT be offered to patients with inoperable pancreatic cancer, and NICE includes PERT in its quality standard for pancreatic cancer. NICE guidelines do not replace clinical judgment. They are not mandatory; they are guidelines. However, it is clear that PERT should be discussed between a doctor and a patient so a clinical decision can be made. I heard what my hon. Friend called for and I will look into whether there is evidence that such discussions between doctor and patient are not happening.
My hon. Friend the Member for Carshalton and Wallington spoke about the importance of the workforce and, as the daughter of two NHS doctors and a former Minister for the NHS workforce, I agree with him. In essence, the NHS is its workforce, and I am proud that we are on track to achieve our ambition of 50,000 more nurses. Talking specifically about the cancer workforce, the workforce plan published in 2017 set an ambition to increase the workforce by 1,500 full-time equivalents by 2021. That has been achieved and, in fact, exceeded by 226 staff members.
Since then, Health Education England has been taking forward the priorities in the cancer workforce plan, with an additional £50 million of funding in the last financial year and this one. Also, a significant proportion of the elective recovery funding—£8 billion in the next two years—will be spent on workforce, both on capacity and skills. I assure my hon. Friend that, as the Minister with oversight of cancer care, I will look carefully at whether we have the necessary workforce coming on track now and in the future to achieve our ambitions and aspirations for cancer care.
The hon. Member for Strangford and several others asked about the 10-year cancer plan, and I know hon. Members are keen to hear about progress. More than 5,000 individuals and organisations responded to the Government’s call for evidence. The Government are considering the responses and the next steps, so I may have to disappoint some colleagues who may want to know more, because that is as far as I will go today. I assure hon. Members that I know how strongly they and their constituents feel about the matter.
I have welcomed this debate as a chance to talk about all the work going on to improve cancer diagnosis, treatment and survival rates, and crucially, to talk specifically about pancreatic cancer. Not least because raising awareness of pancreatic cancer is, in itself, an important step towards improving people’s chances of survival, raising awareness of the symptoms and, in turn, encouraging people to contact their GP and get themselves checked. I pay tribute to everyone involved in Pancreatic Cancer Awareness Month, particularly to Pancreatic Cancer UK and to everyone taking part, whether that is walking 30 km this month or doing their own thing to raise funds and awareness. I thank them all for what they are doing. In turn, I will do what I can in Government to support all those efforts and to improve the chances for anyone suffering from pancreatic cancer.
Jim Shannon
I thank all hon. Members for their contributions, in particular the hon. Member for Stroud (Siobhan Baillie). It is not a great headline, and not one we want to think about, but hers was, “The clue is in the loo.” That is a fact. The hon. Lady also referred to the medical system as failing, and many of us feel the same. We have to highlight the negatives and then ask for the positives. It is not about negativity all the time; it is about looking for solutions, which is what we all try to do. She also referred to people taking 60 tablets a day and nutritional expertise, which is part of the issue.
My hon. Friend the Member for East Londonderry (Mr Campbell) referred to the Northern Ireland statistics and early diagnosis. My good friend, the hon. Member for East Dunbartonshire (Amy Callaghan), referred to raising awareness of the signs and symptoms: 16% of pancreatic cancers are diagnosed at a very early stage. She referred to her constituent Barbara, as did the Minister. It is humbling to think that that lady had all the symptoms but, after various investigations, nobody could find what was wrong. The hon. Lady and others, including the Minister, referred to better GP awareness, as well as a test that works, which is really important.
The hon. Member for Carshalton and Wallington (Elliot Colburn) rightly referred to the good work that has been done. We often focus on the negatives rather than the positives, but many people are doing good things. He also referred to awareness of the publication of the plan, and he clearly made five calls. He also referred to digital and IT and the steps forward, but we need a workforce of people physically on the ground. He also referred to the good work in his constituency.
My hon. Friend the Member for Upper Bann (Carla Lockhart) referred to the impact on families, which is sometimes forgotten when the focus is on individuals. She also referred to contact with GPs and hospitals, and a pathway to detection, focusing on the GP service. She also mentioned research at Queen’s University Belfast. Her headline was, “Time matters,” and so it does.
As always in these debates, the hon. Member for Coatbridge, Chryston and Bellshill (Steven Bonnar) and I are together. We are mostly on the same side, unless we are discussing constitutional issues, but that is by the way. He referred to pancreatic cancer being the deadliest cancer—the fifth biggest killer in the UK. He also referred to some good work in Scotland with its 10-year strategy. I am a bit envious of some of the things that Scotland does. I thank him for sharing that with us. He also referred to the good work done by charities.
I always look forward to contributions from the shadow Minister, the hon. Member for Enfield North (Feryal Clark), which always get close to the heart of things. She referred to pancreatic cancer as the deadliest of common cancers. The figures from her constituency— I think this is right or not far away—of 161 people diagnosed with pancreatic cancer and 153 deaths are shocking. She implored the Government to bring in early diagnosis and improve the cancer backlog. She referred to nearly 400,000 people waiting for a cancer diagnosis and other things. She referred to the workforce, with more nurses needed. Her headline was, “War on cancer.”
Lastly, I thank the Minister, as I always do sincerely, as we all do. We understand the Minister’s deep interest in the subject matter. She grasped the issues we want addressed and said to seize the moment. She also referred to Rebecca Buggs, the lady I mentioned. There is a need for research and development. The Minister referred to the bleak figures of 25% diagnosis, with 75% not diagnosed. She recognises the issues and I believe she also recognises the solutions. That is why I welcome her commitment, when she said that more is needed.
Matched funding for Pancreatic Cancer UK was referred to, with a figure of £10 million, and £3.5 million or £3.6 million committed by Government. The Minister will do that. The hon. Member for East Dunbartonshire and I and others have a meeting with the Minister, and I thank her very much for that. We look forward to it and thank the Minister for that commitment.
We also welcome the 50,000 new nurses that the Government have committed to. It is important to have a knowledgeable workforce. We also welcome the 10-year cancer strategy. Those are things that we all agree on. We look to the Minister to lead the charge for the 10-year strategy, because it is important to have that in place. I conclude by thanking everyone for their contributions, especially the Minister.
Question put and agreed to.
Resolved,
That this House has considered pancreatic cancer awareness month.
Asylum Accommodation: Novotel Ipswich
(2 years ago)
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Tom Hunt (Ipswich) (Con)
I beg to move,
That this House has considered the use of Novotel Ipswich as asylum accommodation.
It is a pleasure to serve under your chairmanship for the first time, Mr Hollobone.
It is difficult for me to stress how big an issue this is in my constituency. It is something I have been aware of for some time. Before it became public, I was made aware of it as the local Member of Parliament, so that is not my complaint—I was aware of it. There is a paper trail that shows me strongly opposing the use of the Novotel for the purposes in question, and I have worked with Ipswich Borough Council on it. There are many issues on which the Labour-run council and I do not see eye to eye, but on this matter we have been on the same side.
In keeping with what many other local authorities have done, the council has, on planning grounds, secured a temporary injunction, and there will be a court hearing later today—it was meant to be yesterday. What the outcome will be I do not know. What I am saying today is less of a legal point and more of a political point on the ins and outs of whether this is the right thing to do, and I will give my views as the as the local Member of Parliament representing my constituents.
The Novotel is a town centre hotel in Ipswich. It is a good quality hotel in an incredibly important location, linking the waterfront to the Saints, which leads up to the town centre. It is an area of the town that has been at the heart of our regeneration efforts. My right hon. Friend the Minister might remember his visit to Ipswich to talk about the town deal. A significant part of the town deal is about regenerating the part of the town where the Novotel sits, and that is one of my concerns. I am already hearing stories about the way in which the building and the upkeep of it has deteriorated since it was acquired by the Home Office for this six-month period.
Paul Bristow (Peterborough) (Con)
My hon. Friend is making an important point. Does he agree that often we are talking not about budget accommodation, but about accommodating those who come over here illegally on small boat crossings in smart hotels in city and town centre locations? What sort of message does he think that sends to those living on modest incomes in the middle of a global cost of living crisis?
Tom Hunt
I thank my hon. Friend for his intervention. In answer to his question, I think it sends all the wrong messages. The cost to the taxpayer at a national level of putting up many illegal immigrants in hotel accommodation is huge. To say that it grates with a large number of my constituents would be an understatement. The Novotel is a nice hotel. I have been there before and my family have stayed there. I have spent time there. The issue is not in keeping with what we should be doing. My personal view is that if someone has entered this country illegally, they are not welcome and virtually all of them should be deported. But if we are going to have them staying here for a short term, it should be in basic, safe and secure accommodation, not hotels.
In addition to the Novotel with its 200 spaces in the town centre of Ipswich, there is a Best Western hotel in Copdock, which is not technically within the boundaries of Ipswich borough or my constituency, but for all intents and purposes it is within the urban area of Ipswich, so this is already causing concern for my constituents and having an impact on local public services. We are looking not just at the 200 in the Novotel, but the 150 in Copdock, so we are talking about 350 individuals who are overwhelmingly young men and who have all entered this country illegally.
Why is the Novotel the wrong location? Why is the decision to acquire the use of the Novotel for 200 individuals the wrong thing to do? Why has it united virtually everyone in the community against it? It has united the Conservative Member of Parliament, the Labour-run borough council, and the local business improvement district. It has united all sorts of people whom I do not often agree with, but we are all of one view: this is not the right location to be accommodating these individuals.
Something that I also find desperately concerning is the way in which 20 constituents of mine who worked at the hotel have been treated by Fairview Hotels (Ipswich). They were given five and a half days’ notice that their jobs were on the line, and many of them felt pressured into resigning under the vague promise that they might get their jobs back after the six-month period. I have one constituent whose daughter came home and broke down in tears because of the way she had been treated by those who manage the hotel. My responsibility is to her. My responsibility is to those 20 constituents. My responsibility is not to think about the welfare of those who have entered our country illegally, and I make no apology for that.
In terms of the economic impact of using this Novotel, a huge amount of effort is going into promoting Ipswich as a visitor destination. Ipswich is surrounded by beautiful countryside. It is the oldest town in the country—I thought it was older than Colchester anyway, but now that Colchester has city status, Ipswich is definitely the oldest town in the country. It was home to Cardinal Wolsey, and soon we will be celebrating the 550th anniversary of his birth. Only a stone’s throw away from the Novotel is Wolsey’s Gate, which was built by Cardinal Wolsey, and there is a whole operation to try to enhance the area.
What we are talking about is a 200-room, good-quality hotel in the centre of Ipswich that is lost to us and our local economy. It has been described by a business lady who runs a successful shop a stone’s throw away from the hotel as being an economic bomb that has landed on the town, and there is consensus within the business community that that is the case.
There is also the other angle: the nature of the hotel means that it is often used by successful businesses in Ipswich to host clients. If they have clients visiting or there are conferences, the Novotel is more often than not the hotel that is used, so losing those 200 beds is a further negative economic impact.
I also want to talk about community tension, which is an important point and I plan to address it directly. Ipswich is a welcoming town. It is a multicultural town and it has benefitted from that diversity. It is an integrated town. We have a history of welcoming genuine refugees—some of them are Conservative councillors, and some are from Albania—but they came here in a proper way. They came here legally, they were welcomed, and they have thrived in Ipswich. They have been welcomed in Ipswich and have made a positive contribution. The people of Ipswich are welcoming people but, quite frankly, there is a limit. When they see that people who deliberately enter our country illegally from another safe European country are being accommodated at vast expense in a good quality local hotel in an important location, which is costing local jobs and having a spill-over negative impact on the local economy, they are quite rightly furious. It is not surprising—I make no exaggeration in saying this—that at a time of cost of living strain, when many constituents are desperately concerned about getting by, I am hearing more about this than any other local issue in my postbag. I need to make the point that we are a welcoming and compassionate town.
I move on now to the general point. My right hon. Friend the Minister will know that I have been a consistent voice on the issue of illegal immigration since I was elected to this place. I support the Home Secretary fully in her efforts, and I support my right hon. Friend the Minister’s efforts fully. I was behind him in the main Chamber yesterday, supporting him. I was proud to do that, and he knows he has my support.
My view is that the situation would be even worse under Labour—there is no one from the party present. I find it somewhat ironic that the shadow Home Secretary, the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper), visited Ipswich last week and commented on this matter, even though about a year ago, when she was Chair of the Home Affairs Committee, she called an urgent question to oppose the use of Napier barracks for those who have entered our country illegally. All I would say is that I would much prefer the use of disused Army barracks for these individuals, rather than good quality hotels in the centre of Ipswich. I also note that the Labour candidate for Ipswich has made multiple visits to Calais. Quite what he was doing there, I do not know, but that is by the by; I will not get distracted by that.
I will finish simply by saying that I acknowledge the fact that, in tackling illegal immigration, there is no silver bullet. I am encouraged by the Prime Minister’s meeting with President Macron yesterday, and I look forward to hearing what came out of it. I have confidence in the Prime Minister on the issue. I spoke to him, and supported him. He is a great man. But, ultimately, we have to put turbochargers under the Rwanda policy. That needs to be part of it. Sections of the left deride what happened in Australia; they say that Australia’s offshore processing approach was not successful. Everything that I have seen indicates that it was successful. The fact of the matter is that Australia had a big problem with illegal immigration, it started offshore processing, and it now no longer has a big problem. I understand that Australia had two different locations and is not using one of them, and that there might be differences between Australia and ourselves, but ultimately the principle holds. I strongly encourage my right hon. Friend the Minister not just to support the concept in principle but to stress the urgency of delivering it and of doing what is required to deliver it. He has huge support on our Benches to get this done.
I thank my hon. Friend the Member for Peterborough (Paul Bristow) for coming to support me today. He is also a strong voice on this matter. We do not know what will happen in court later today with the temporary injunction; I hope that it is successful. But if it is not, we must separate it from the bigger issue of how we tackle the crossings. In the short term, we are where we are now. We must look again at the use of Novotel, take on board the view of the local business community and work with and support those 20 employees. They are my constituents, and have been treated very poorly. That is all I have to say on the matter.
The Minister for Immigration (Robert Jenrick)
I am pleased to serve under your chairmanship, Mr Hollobone. Given your duties as Chair you will not be able to say so, but I know that you also feel strongly about the issue, which affects your constituents in Kettering. I am grateful to my hon. Friend the Member for Ipswich (Tom Hunt) for raising the matter, and to my hon. Friend the Member for Peterborough (Paul Bristow) for supporting him. The issue clearly concerns many Members across the House and millions of people across the country. Resolving it is a first-order priority for the Government.
The ongoing legal action means it is difficult for me to comment on the specific case of the hotel in Ipswich, but I will speak about it in more general terms, and about the wider issues raised by my hon. Friend the Member for Ipswich. I know Ipswich well, and met my hon. Friend for the first time when he was standing for Parliament there, when we toured Ipswich and visited the harbour, where the hotel is. I have seen the good work that he is doing with the council and others on the town deal board to regenerate Ipswich and help it achieve its potential. It is concerning to hear that the actions of the Home Office might, in a small way, be damaging his and the community’s wider efforts to boost opportunities and prosperity in Ipswich.
Since we came into office, the initial task for me and my right hon. and learned Friend the Home Secretary has been to resolve the very urgent situation that we found in Manston in Kent, where a large number of migrants who crossed the channel illegally in small boats were being accommodated in a temporary processing facility that was meant for a smaller number of individuals. That was not within the control of the Government. It was the result of thousands of people choosing to make that perilous journey—over 40,000 this year alone, and rising. We had to ensure that the site was operating legally and decently. As a result, we had to procure further hotels and other types of accommodation across the country at some pace. I am pleased to say that that hard work is bearing fruit, and the situation at Manston has significantly improved. The number of people being accommodated there is now back down to the level for which it was designed.
That leads to the second priority, which is to stabilise the situation more broadly, and ensure that we procure hotels in a sensible, common-sense way. The case that my hon. Friend the Member for Ipswich raises prompts some important questions. First, when we choose hotels, other than in emergency situations such as the one we have been in with Manston, we need to ensure there is proper engagement with local Members of Parliament and local authorities, so that we choose hotels that might not be desirable but are none the less broadly suitable and can command a degree of public support. In some cases, we have seen hotels chosen that simply do not meet that barrier.
We need to ensure hotels are chosen against sensible, objective criteria. Those criteria might mean ensuring that towns such as Ipswich can continue to carry out their day-to-day business, and ensuring that tourists can be accommodated and that business and leisure travellers can find hotel accommodation in the centre. They will include ensuring that we take into account safeguarding concerns, for example by not choosing hotels that are next to children’s homes, schools or places where young people congregate. The criteria will certainly include taking into account community cohesion and the likelihood for disruption, and they should, obviously, include value for money for the taxpayer. On that point, I wholeheartedly agree with my hon. Friend that we should be choosing decent but not luxurious accommodation. People coming here seeking refuge should be accommodated in simple but humane accommodation. He referenced the situation in Calais. The way this country accommodates asylum seekers vastly outweighs the way some neighbouring countries choose to do so, and I am afraid that creates an additional pull factor to the UK.
Deterrence needs to be suffused throughout our entire approach. We can be decent and humane, but we also need to apply hard-headed common sense. Once we have stabilised the present situation, and applied those criteria and better engagement methods, the third strand of our strategy is to exit from hotels altogether. Accommodating thousands of individuals in hotels costs the UK over £2 billion a year. In a time of fiscal constraints, that is an unconscionable sum of money and we need to ensure we move away from that as swiftly as we can.
The strategy that my right hon. and learned Friend the Home Secretary and I are establishing to do that has a number of fronts. One will be ensuring fairer dispersal across the country, so that cities and larger towns do not bear a disproportionate impact of the asylum seeker issue. Secondly, it will involve looking for other sites, away from hotels, that provide better value for money for the taxpayer, which might mean more simple forms of accommodation; we hope to say more on that soon. Thirdly, and perhaps most importantly, we will accelerate the processing of asylum claims altogether, so that those individuals whose claims are rejected can be removed from the country swiftly and those whose claims are upheld can start working, create a new life in the UK and make an economic and broader contribution to the country.
Tom Hunt
I thank my right hon. Friend the Minister for giving way. There are a great number of Members on our Benches who think that the very act of coming here illegally should prohibit people from making an application at all. Frankly, those people have already broken the law of the land by entering illegally. There is also an issue with the definition of “refugee” and I understand our rates of granting refugee status are much higher than those of comparable European countries. Will he expand further on any work that may be done by Government to make a narrower definition of what a refugee actually is? My concern is that some people are being given refugee status who may not be refugees, if we stick to the sense of the word.
Robert Jenrick
My hon. Friend raises two important points. First, we are very concerned that a large number of individuals, certainly all those coming across in small boats, have transited through multiple safe countries before choosing to make the crossing to the UK. We do not want to be a country that attracts asylum shoppers. We want people to be seeking asylum in the first safe country that they enter. That may necessitate further changes to the law. We want to have a legal framework that is broadly based on individuals who are fleeing genuine persecution, such as war or serious human rights abuses, finding refuge in the UK through safe and legal routes, such as the highly effective resettlement schemes that we have established in recent years for, for example, Syria, Afghanistan, Ukraine and Hong Kong. My hon. Friend was right to say that his constituents in Ipswich, like millions of people across the country, broadly support that approach and have played an important role in recent months, for example by taking in refugees under the Homes for Ukraine scheme. We do not want people to be encouraged by people smugglers to cross the channel illegally and then find refuge in the UK.
The second point that my hon. Friend raises, which is equally perceptive, is that the UK’s asylum system grants asylum to a higher proportion of applicants than those of some comparable countries, such as France and Germany. The Home Secretary and I are looking at that issue in some detail to see whether we can make changes to the way we manage the process and the criteria we adopt, not so that we become a country that is unwelcoming or ungenerous—that is not the British way—but so that we do not create an additional pull factor to the UK over and above other countries that are signatories to exactly the same conventions and treaties to which the UK is party.
Tom Hunt
To be perfectly honest, I am quite keen for us to be unwelcoming towards those who have illegally entered our country. What is the difference between breaking our immigration law and breaking any other domestic law? From what I see, if someone breaks a law in the country, they get punished. Surely breaking our immigration law is breaking our law, and the people who do so should be treated as such.
Robert Jenrick
I do not want to get into a detailed conversation about our exact treaty obligations and the legal framework, but the issue is that any individual can claim asylum regardless of the means by which they came to the UK, regardless of whether they have transited through safe countries, and even regardless of whether they came from a safe country in the first place. That balance is not currently right, so we need to look carefully at how we can change it.
The most striking issue is the individuals coming from demonstrably safe countries. Today, about 30% of the individuals crossing the channel have come from Albania. That is a first-order priority for the Home Secretary and I to address, because it cannot be right that the UK provides safety and support for those individuals—mostly young men who are healthy and sufficiently prosperous to pay people traffickers, and who come from a country as safe as Albania. We need to change that. We have already returned 1,000 Albanians under the return agreement signed by the previous Home Secretary, my right hon. Friend the Member for Witham (Priti Patel). The present Home Secretary and I want to take that significantly further.
The longer-term trajectory obviously has to be moving away from tackling merely the symptoms of the problem—the processing of applications and the accommodation of individuals in expensive hotels—to tackling the root cause itself. My hon. Friend the Member for Ipswich is correct that a significant element of that will be to make further legal changes to our framework. Another element will be ensuring that deterrence is suffused through our approach so that we do not become a magnet for illegal migrants. We need the UK to be a country that supports those in genuine need, but we must not create a framework that is significantly more attractive than those of our EU neighbours.
That will also require work on the diplomatic front. My right hon. Friend the Prime Minister has just returned from Sharm el-Sheikh, where he had further positive conversations with President Macron and other world leaders who are dealing with the symptoms of a global migration crisis. It will require tougher action by the security services to address the criminal gangs and gain greater intelligence on their work overseas. It will include tougher action at home on employers who illegally employ migrants who do not have the right to work here.
On all those fronts, the Home Secretary and I are absolutely committed to tackling this issue. I know it is extremely important to my hon. Friend the Member for Ipswich, who is one of the leading voices in Parliament on it, as is my hon. Friend the Member for Peterborough. They are both simply representing the strong views of their constituents, who, like millions of people across the country, want secure borders and a fair and robust immigration and asylum system. That is exactly what the Home Secretary and I intend to deliver.
Question put and agreed to.
Labour and Skills Shortages: Temporary Recovery Visa
(2 years ago)
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Tim Farron (Westmorland and Lonsdale) (LD)
I beg to move,
That this House has considered the matter of a temporary recovery visa for industries experiencing labour and skills shortages.
It is a privilege to serve under your guidance, Mrs Cummins. Before I start, I draw Members’ attention to my entry in the Register of Members’ Financial Interests and the support provided to my office by the Refugee, Asylum and Migration Policy project.
As the UK faces its longest recession on record, it is the Government’s duty to pull every lever they have to prevent hardship and support businesses, workers, families and the economy as a whole. My contention is that to do otherwise would be reckless, foolish and, indeed, heartless. It is great to see the Minister in his place and I welcome him to his important role. My plea today is for him to recognise the clear fact that hospitality and tourism businesses in my constituency in Cumbria are unable to operate to their full capacity because, despite their best efforts, they cannot recruit sufficient workers.
A recent survey by Cumbria Tourism, our excellent destination management organisation, found that 73% of businesses say recruitment is a problem, with more than half citing it as a significant problem. A lack of job applicants is an issue for 78% of employers. As I listen to employers right across Cumbria—the lakes, the dales and other beautiful parts of the county that are in neither—it is painfully clear that the situation is limiting business capacity and profitability, and forcing temporary or partial closures for almost half of all businesses.
Sadly, it is likely that anyone who has visited the Lake district on holiday, particularly in the last couple of years, saw reduced opening hours and capacity in cafés, hotels, restaurants and other visitor attractions, simply because they do not have sufficient staff. Those businesses came through the challenges of covid despite the odds, adapting to the drop in visitor numbers, but they have since been hit by massive problems with recruitment.
The backdrop to the issue is that Cumbria has a smaller than average working-age population, with 61% of people of working age compared with the rest of England’s 64%. It also has lower unemployment than the national average, at 1.5% versus 3.7%. The reality is that we just do not have the people to fill the vacancies. Some 80% of the entire working-age population in the Lake district already works in hospitality and tourism.
In the years that I have been raising the issue with the Government, I have been told repeatedly that the answer lies with the education and training of our UK workforce. A national cross-departmental skills strategy would, indeed, seem to be a reasonable and sensible development. Moreover, we do not want high domestic unemployment while employers take on migrant workers. However, that is not happening, and there is no prospect whatsoever of it happening. Instead, we have very low unemployment locally, so employers in Cumbria have spent the last two years trying a range of things to attract workers, such as increasing wages, adding benefits, providing more training, offering better hours or acquiring accommodation for staff to live in on site.
Cumbria Tourism and individual tourism businesses right across our county continue to work closely with the Department for Work and Pensions, supporting careers events and working with partners to engage directly with schools and colleges. Despite all those initiatives, businesses in our Cumbrian communities are struggling to survive and many are having to close altogether. How tragic it is that we can see the demand and the profit that could be made, or the losses that could be avoided, yet we cannot meet that demand because we do not have the workforce.
Although the lakes and dales of Cumbria have an acute problem, labour shortages are a nationwide challenge. That means that there is not a big reservoir of untapped talent in the UK that might move for work. We therefore need a range of solutions, and short, medium and long-term migration has to be part of that. We have a choice. If we do nothing to change the status quo, many businesses will go under, and then we will have an unemployment problem and rural communities will fall into decline. It could be argued that the market will adapt and that is just the way of things. However, the Government must take responsibility for having interfered to undermine the free market. While land tends not to be all that mobile, capital and labour do tend to be, or at least they were until the Government chose to inflict harm on our economy by cutting off the supply and movement of labour. The party allegedly of the free market has become the dead hand that is killing our economy locally and nationally.
It does not need to be that way. The question is, do we want thriving tourist destinations outside London? Do we want them to continue to be able to offer a fantastic experience for tourists from home and abroad? Do we want that contribution to our economy? Domestic and inbound tourism combined contribute approximately £127 billion a year to the UK economy. Tourism is worth 9% of GDP and is our fourth biggest employer. As we face a self-inflicted Conservative recession, do we think that it might be a good idea to back an industry that is chomping at the bit to mitigate that recession to grow and thrive?
If the answer to any of those questions is yes—and surely it is—then, if we want real, sustainable economic growth and are serious about levelling up, we cannot close our eyes to the stultifying impact of labour shortages. By the way, a Conservative Government that understood and cared about business would not need anyone to tell them that; it would be obvious to them. Such a Government would also know that welcoming migrant workers into areas such as mine, to complement the local workforce, is part of the action that needs to be taken.
The current work visa situation does not support the labour needs of the Lake district. Again, the Government would know that if they listened to Cumbrian businesses. We need a visa like the youth mobility scheme, which is flexible across sectors. Of course, that scheme already exists for places such as Australia and New Zealand, whose populations are fairly small—places that, to misquote “Father Ted”, are small and far away. How about also developing youth mobility visa agreements with countries whose populations are large and much closer geographically? The youth mobility visa would provide greater work protections than sector-based schemes, so that workers are not tied to a specific employer. The Government could easily impose restrictions on workers’ rights to access benefits, to bring in dependants, or to remain in the UK long term.
In my correspondence last month with the former Minister, the hon. Member for Corby (Tom Pursglove), he stated that that there were ongoing negotiations with both European and wider international partner countries for youth mobility scheme agreements. That was encouraging news. I had a similar response from his predecessor, the hon. Member for Torbay (Kevin Foster), when I met him earlier this year alongside lakes tourism and industry leaders.
Please will the Minister tell us the timescale for those negotiations? Will new schemes be available in time for the beginning of the 2023 season? If the negotiations are stalling because we are seeking bilateral agreements, which may be slowing down progress, could the Minister set out whether unilateral agreements are being considered, given the desperate need of our tourism economy?
The former Minister, the hon. Member for Corby, also stated in his letter that employment is not the primary purpose of the youth mobility visa, and that young people cannot be compelled to work in specific sectors or regions. I did, of course, know those things. However, people who come in through a youth mobility visa will no doubt be seeking employment. We want to give them opportunities in desirable areas such as the Lake district while allowing our economy to benefit. That is exactly how it has happened in the past; migrants have chosen to come to the Lake district and the Yorkshire dales to work, often with accommodation provided.
The Government have made much of the claim that we in Britain can control our borders, but surely we want to control our borders in our own interests, in a way that gives us an advantage, rather than to do ourselves pointless economic harm. The youth mobility scheme enables the Government to control migration and make use of an existing mechanism to bring in those who will allow our businesses to thrive and meet demand, while developing an effective national skills strategy to maximise benefits to the domestic workforce. It is a win-win.
If the Government are not willing to take advantage of that win-win, Cumbrian businesses will demand to know why they are choosing to do active harm to them and our wider economy, rather than taking action that would help them. While employers can make changes to their employment offers—and they really are doing so—a national strategy of skills development, linked to labour market needs, must be led by the Government. The onus cannot be on small and medium-sized enterprises. The Government have to make a choice: if they do not accept that migration is part of the solution to labour shortages, then reduced economic growth, business failure, and poverty is the choice they have made.
In its report, “Promoting Britain abroad,” published last month, the Digital, Culture, Media and Sport Committee stated:
“We welcome efforts to create apprenticeships and the new T-Level in Catering in 2023 but believe that more could be done to support business-owners who are short of staff today.”
The Committee then recommended that the Government
“should introduce a temporary recovery visa for industries where there is clear evidence of labour and skills shortages.”
Does the Minister agree with the DCMS Committee on that, and will he introduce a temporary recovery visa?
In the context of a lack of people to fill vacancies, there is, of course, another lever that the Minister could pull. It is staring him right in the face. We have more than 85,000 people who have been waiting more than six months for their asylum claim to be decided and who are banned from working. Many of those awaiting a decision are ready and able to work. It makes absolutely no sense that the Government would prefer them to rely on state support instead of keeping their skills alive.
Forcing people into inactivity is at complete odds with the Government’s stated policy aim to move people away from dependency and into work. Getting into employment at the earliest opportunity will put those people in a much better position to integrate and flourish in the UK when they receive their refugee status—and 76% of them will be given that status by this Government. Giving asylum seekers the right to work would mean that they pay their own way, rather than relying on state finance. It would save the taxpayer millions. There is literally no downside.
Last week, I visited asylum seekers housed in hotels in Cumbria. Some 130 of them are living in limbo, unable to work while they await a decision on their asylum claims. They are from Eritrea, Afghanistan, Syria, Iran—all places with high grant rates. Their professions are catering, architecture, agriculture, construction, aircraft engineering, welding, senior logistics and data analysis, to name just a few. It makes no sense that they cannot work where local employers have vacancies. Public opinion is supportive: a YouGov poll in March found that 81% of the population would support an asylum seeker’s having the right to work after they have been waiting for six months.
It is plainly not the case, as some have said, that that policy would be a pull factor. We are an outlier in having such a foolish policy. Look at all comparable countries in Europe: France grants permission to work after a six-month wait; Germany does so after three months. A six-month wait would safeguard against economic migrants using the asylum system to circumvent the work visa process. Given the current economic climate, the clamouring of our employers, workforce shortages—not just in my communities but elsewhere—and the backlog in the asylum process, will the Minister reconsider the right to work for asylum seekers, as many of his Conservative colleagues believe he should?
There are, of course, other reasons that Cumbria’s workforce has been so drastically reduced in recent times. The other main factor is the rapid growth in second home ownership in our communities and the collapse of the long-term private rented sector into the short-term Airbnb market. Housing for people who are not wealthy in our area has become such a rarity that hundreds who worked in hospitality and tourism have simply been evicted from their homes and ejected from their communities. It is tragic. I hope the Minister will back my amendments to the Levelling-up and Regeneration Bill, which would enable us to guarantee sufficient homes for local people and families by limiting the number of second homes and short-term lets in communities like mine.
The Government’s inaction in tackling the housing crisis is compounding their failure to look intelligently and pragmatically at the matter of visas. This all adds up to a situation where 63% of tourism businesses in communities in Cumbria are working below capacity because they cannot find staff. There is demand, but we cannot meet it. The Government have chosen to allow the growth of Airbnb to eject our domestic workforce and counterproductive visa rules to prevent overseas staff from supplementing our small labour pool.
After London, the lakes is the second biggest visitor destination in the country; at the same time, we have one of the smallest populations. Of course we need to bring in outside talent to work alongside our own; otherwise, the Lake district and Yorkshire dales economies just could not function. I ask the Minister to stop hamstringing our economy, listen to our businesses and adopt a pragmatic approach to addressing labour shortages in the UK, especially in rural communities such as mine.
Priti Patel (Witham) (Con)
I congratulate the hon. Member for Westmorland and Lonsdale (Tim Farron) on securing the debate. I will come to some themes he spoke about in a minute but, importantly, I want to congratulate the Minister not just on being here but on the work he is doing. I will disaggregate some of my remarks because, clearly, I have worked in the Home Office and I know a little bit about certain aspects of policy, but there are wider issues around labour market skills and shortages that I want to air, and those are what brought me to the debate.
It has been a few years since I have been to the hon. Gentleman’s beautiful constituency. I have a bit more time on my hands now and, provided I can get there, I will, because it is a very beautiful part of the country. However, the debate and the issues he raised are incredibly pertinent to the entire United Kingdom. We have seen labour and skills shortages in certain sectors for as long as I can remember as a Member of Parliament, and that is what we need to address.
I will park home affairs issues—particularly visas and things of that nature—for the moment. As the hon. Gentleman mentioned, there has already been some work, although not enough, across the whole of Government to put together a wider strategy for the labour market. I have been very vocal about this; when I was Employment Minister, I was one of the few advocates for a labour market strategy for the entire economy. If I may say so, that is something that I have also encouraged our new Chancellor to adopt and champion. We need the Treasury and, in particular, the DWP to be the advocates of a proper, coherent labour market strategy. That is really important, because we see wage inflation in certain sectors. We know there are shortages in the hospitality sector, which the hon. Gentleman pointed to, but we have to be honest that there is not enough training, investment or career progression in certain sectors, and hospitality is one of them.
I remember from my time as Employment Minister that the hospitality sector did a great deal to develop career paths, to make its jobs much more appealing and to invest in the individuals who got jobs in order that, although they might start behind the bar, they could become general managers of hotels, bars or restaurants, and so on. That is really important. My party believes in the ladder of opportunity. It wants to see people develop their careers and be incredibly successful, rather than the haemorrhaging of staff in certain sectors. My major point is not party political: we should encourage the development of a labour market strategy for the whole country, rather than try to find sticking-plaster fixes of visas and things of that nature, which I will come to in a minute.
The hon. Gentleman referred to the immigration system and some of the changes that have been made, which I was involved in as Home Secretary. Ending free movement was a manifesto commitment and part of Brexit, which the British public voted for. We delivered that at the same time as reforming aspects of the immigration system. The points-based immigration system is there to ensure that employers can sponsor individuals, admittedly not in the sectors the hon. Gentleman spoke about but certainly in other critical sectors, including the NHS, which should not be overlooked. The NHS relies on overseas workers, which are important for its health and wellbeing, although of course we need to grow more talent domestically as well. Those are important areas.
I want to touch on another aspect—youth mobility, which is an important way forward. The hon. Gentleman and other colleagues will know about the scheme for seasonal agricultural workers. That enables workers to come to our country for specific and restricted timeframes in key sectors. That enables workers to come to our country for specific and restricted timeframes in key sectors. Only last year, following a shortage, the seasonal agricultural workers list was expanded to include haulage drivers, key workers in agriculture, but not horticulture, and the farming sector when we saw pressures in the economy. It is right that we have the agility and freedom effectively to determine some of those changes while also—and I am sure that the Minister will agree with me on this—demonstrating to the British public that we are able to invest in our own home-grown skills and in particular parts of the country. I saw this in one of my previous roles in Government—not in my last role, but in employment—where we had pockets of unemployment around certain parts of the country. We must invest in those parts of the country too.
I said that I would talk about youth mobility schemes in particular. I have been involved in some of those discussions, and the hon. Member for Westmorland and Lonsdale referenced some of the bigger countries and economies; one of those is India, with which we have an agreement to actively bring over young people who are highly educated and skilled. We still want them to work here; the point of youth mobility is that we can reciprocate, which is really important, with our young people gaining life skills elsewhere in the world and showing what a free and open country we are.
In the interests of time, I will conclude by emphasising that it is quite unfair that a Home Office Minister has to respond to wide-scale labour market issues, which are cross-governmental. One of the biggest takeaways is the need for better integration across Government Departments to address issues with the labour market and skills shortages. When we look at what is happening with the apprenticeship levy, for example, we must ask how we can make that much more effective in different parts of the country. How can it be targeted to key sectors? How can colleges have more bespoke schemes for shortages in the labour market so that we develop a pipeline of young people to come forward? I am a Member of Parliament for a constituency in Essex, Witham. Some 80% of my constituents are employed by small and medium-sized enterprises; that is 20% higher than the national average. By default, we are an entrepreneurial and SME-based part of the country, but at the same time we must look at the needs of many of those small and medium-sized enterprises regarding skills and sustainable employment. That is why I encourage colleagues across the House to work in a united way to look at getting the Government to have a skills and labour market strategy for the entire country.
Several hon. Members rose—
Jim Shannon (Strangford) (DUP)
Thank you, Mrs Cummins. You caught me out, because I was not expecting to be called; I was just doing my duty of jumping up and sitting down again. You are most kind. I congratulate the hon. Member for Westmorland and Lonsdale (Tim Farron) on setting the scene for the debate. The Minister probably knows what I will ask in relation to the fishing sector, because I asked him last week after the debate; his Parliamentary Private Secretary, the hon. Member for West Bromwich West (Shaun Bailey), was there as well. I have sought a meeting with the Minister and he has agreed to it, so hopefully we will have that in the diary over the next period of time. I will specifically focus on that and explain why it is so important, and reflect on my meetings with the previous Minister, the hon. Member for Torbay (Kevin Foster), and how we move forward on the issue.
One UK sector that most people agree has a bright future following Brexit is our fishing industry. Located in often remote coastal communities, the industry has weathered many challenges over many years, including those that are unique to the sector. The fishing fleet based in Portavogie, in my constituency, probably had its heyday during the second half of the ’70s and into the ’80s. Good profits were made and shared with the crew, which reflected the hard work and long hours that fishermen put into their profession. My brother is one of them; he worked the fishing boats in Portavogie over a period of time. I could never understand how the guys could get into the fishing boats, never mind get out of them, but that is by the way. It is a dangerous profession. Being a fisherman carried with it a great deal of pride, but something went wrong. Fisheries management policies were applied that undermined the industry; with hindsight, it is debatable whether those policies were right or wrong. Nevertheless, the policies succeeded in reducing most crew wages. Combined with alternative occupations, this led to a situation developing in the 1990s where there were more crew vacancies than there were crew to fill them. That is a wee bit of background about the sector before I put forward some ideas.
Fishing vessel decommissioning schemes released some crew who found positions in other fishing vessels. At that time, it was migrants from eastern Europe who, although inexperienced in commercial fishing, offered a breathing space when they were recruited to fill the crewing gaps. Then, trawler owners from Portavogie, Kilkeel and Ardglass followed the lead of owners elsewhere in the UK by beginning to recruit new crews from overseas. Those crews were Filipinos, who became a very important part of fishing for nephrops in the Irish sea and the Clyde.
The fishing fleet has never pretended that overseas crews offer a long-term replacement for domestic recruits. I understand exactly that it is not a long-term solution, but it is a short-term solution. It would be great if young people from my constituency were going into fishing, but they are not, and neither are young people from Kilkeel or Ardglass. The hon. Member for Glasgow North East (Anne McLaughlin) will speak for Scotland shortly, and the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts) will speak for Wales. I think both of them will endorse that point.
Overseas crews have filled critical roles, which has kept a large part of the UK’s fishing fleet at sea and, in turn, maintained supplies of domestically caught seafoods to markets at home and overseas. Overseas fishing crews have largely been recruited to the UK on the basis of transit visas. I understand that transit visas were never intended for that purpose. Transit visas permit a crew member to join a vessel that is departing the UK and working outside UK territorial waters. It has generally been accepted that the majority of time on a fishing vessel at sea has to spent beyond the UK’s—
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
One fishing practice that the Minister might propose is for those vessels to keep their foreign-originating crew offshore, beyond the 12 miles of territorial waters, but that is both dangerous and inhumane.
Jim Shannon
The right hon. Lady illustrates the issue very clearly, as well as the concerns that we have. I think there are solutions that all of us here can support. I suspect that, besides fishing vessel owners, many ship operators would find the 12-mile limit challenging, as she mentioned. That is certainly not a new issue.
For well over a decade, the fishing industry has sought to engage with the Home Office to resolve the ambiguities around the matter. Ten years ago, a concession was granted: the option to move crew on to work permits. That was not widely taken up. The situation has changed again, not least because EU crew have left the industry, so there is a dependence on non-UK and non-EU crew.
Geographically, areas such as the Clyde have nowhere outside 12 miles. I am told that, towards the end of 2021 and early 2022, staff from Border Force visited Campbeltown, where they reminded fishing vessel owners about their roles, and effectively told the owners that overseas crew would have to go home. As a result, boats have been tied up and some have been sold. On 20 August, Border Force visited the fishing community in Mallaig and delivered a similar message to the one that was heard in the Clyde. A virtual meeting was held with industry representatives in Northern Ireland on 15 September.
I arranged a meeting with the previous Minister, the hon. Member for Torbay, and we discussed concessions granted to other marine operators, specifically those engaged in the construction of offshore wind farms and the owners of well boats. The latter are largely Norwegian-owned ships that transport fish between salmon farms in the west of Scotland, which are all within the 12-mile limit. Will Minister tell us the difference between a well boat carrying salmon smolt inside the 12-mile limit and a trawler carrying prawns in the same area? I do not quite understand that, but if we have a meeting, perhaps we can develop that argument constructively and find a solution. For me, it is all about solutions. It is never about the negativity; it is about the solutions. It is about what we can do to make it better. We ask the Minister for that meeting.
The industry is indebted to the Minister of State, Department for Environment, Food and Rural Affairs, the right hon. Member for Sherwood (Mark Spencer), for his early intervention with the Home Office on this matter. A six-month window has been agreed during which trawler owners are encouraged to pursue the sponsorship route for fishing crew, and the industry is working on that. Although that avenue is being pursued by some, questions are being asked about its applicability to the fishing fleets, especially in respect of the Government’s immigration targets.
Fishing vessel operators accept the need for a scheme that is transparent, complies with international law and affords protection to all fishing crew, especially those from overseas. There is no question about what they are trying to achieve. Fishermen and fisherwomen are skilled professionals, as the Government recognised in early 2021, following a recommendation from the Migration Advisory Committee. However, despite the committee’s further advice that deckhands be added to the shortage occupation list, the then Home Secretary declined to approve the recommendation, and stated that more time was needed to examine the impact of the covid pandemic on UK employment levels. Again, I honestly believe that the fishing organisations that I and other Members represent have a working solution. The Minister’s PPS, the hon. Member for West Bromwich West, is not involved in the debate, but he knows that only too well, so he knows what I am going to say. I also note that it is accepted that skills can differ across the professions on the Government’s shortage occupation list, with one being English language fluency. However, the same standard of English is required across all occupations, which is something that we urgently need to examine.
I am nearly finished and am going really fast—I hope Hansard can follow my flow of words. The hon. Member for Vauxhall (Florence Eshalomi) says that Jim Shannon gets more words to the minute than any other MP, and today may be one of those occasions.
Leaving the EU creates opportunities for our fishermen, yet they are still competing with EU fishermen. The Home Office’s refusal to engage with the fishing industry and consider a bespoke or flexible approach to the issues around overseas crews compares less than favourably with the approach taken by others, such as the Dublin Government. In Ireland, a partnership approach has recently resulted in a new policy being unveiled. When we meet the Minister, we might be able to share this example, which is a constructive one. Less than a month ago, on 11 October, the Irish Government approved the publication of the “Review of the Atypical Scheme for non-EEA crew in the Irish Fishing Fleet”. The report and its recommendations followed an extensive consultation process, with stakeholders involved in the scheme. It is that kind of collaborative approach that needs to be pursued by the Home Office, instead of trying to squeeze the square peg of the fishing crew into the round hole of the sponsorship route. A square peg in a round hole really does not work.
The fishing industry remains focused on creating an economically viable sector that will offer financial rewards in order to reflect the hard work that the fishing sector does. After decades of challenges, that ambition will not be met overnight, which is why officials need to work with the industry to develop a visa system that allows skilled overseas crew to pursue their professions on UK fishing vessels in a controlled, transparent and law-abiding way. That would allow our fishing industry to develop its full potential, benefiting the economic life of our coastal communities as well as the whole of the United Kingdom.
What I have said today about Northern Ireland is reflected for our fishermen in Scotland, Wales and England, and I honestly believe in my heart that we have a solution. I know the meeting last week was about a different thing, but none the less I took the opportunity to appeal to the Minister’s good nature and will. I hope to have a meeting shortly, so that collectively we can move forward together in a partnership fashion and solve this problem. If we can do that, it will be a big day.
Rachael Maskell (York Central) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mrs Cummins, and I thank the hon. Member for Westmorland and Lonsdale (Tim Farron) for securing a debate of such importance for my city of York. I will focus mainly on the hospitality sector, but I will also stray into a few other sectors where we are certainly experiencing skills shortages.
To realise York’s potential productivity, and ultimately the value of the pound, we cannot stand still, which is why the debate is timely. We need to move forward by putting pragmatism ahead of ideology in order to understand the reality of particular sectors and local economies across the country, to focus on the data, which speaks so loudly, and to listen to sector leaders across our communities to ensure that their aspirations for their industries can be realised, and that we are not left short of potential opportunities that people want to bring to the economy.
On Friday, I met York’s hospitality sector leaders—people from hotels, visitor attractions, restaurants and others—to talk about the challenges that we face in our city. Of course, the issue of skills shortages was high on the agenda. We have 1,605 enterprises in York’s hospitality sector, which employs 20,000 people, two thirds of them part time. It is growing, which is encouraging. Our “Skills for Employment” strategy—a 10-year plan for skills that Lee Probert, the principal of York College, assembled for our city—highlights the fact that the sector grew by 7.8% between 2017 and 2020, so we have a great opportunity to consolidate it. However, many places cannot open their doors full time, and with the cost of living crisis hitting hard, businesses are struggling and we need to ensure that we get the labour. They live hand to mouth with the innovation that they are able to bring. They got to the summer, got to half term, and they are going to get to Christmas, but, come January, they are worried not only about the great freeze, but about the freeze in business itself. They are really worried about that, and I hope the Minister will talk to his colleagues in the Department for Digital, Culture, Media and Sport about the cliff edge that the sector faces.
People in the sector do not want to limp from season to season. They want to be able to plan. When they plan, they can put in place their skills strategy. When they plan, they have the headspace and can grow their industry, whether in the supply chain or directly facing their customers. We therefore have to build resilience into the system. We are fortunate. We have around 40,000 students across York, which helps to address some of the capacity issues, but not by itself.
Some businesses are doing incredible work. The Grand in York has taken refugees from Ukraine and supported people into employment, ensuring that there is a labour supply. It has also provided wider skills, including language courses, and has provided support even if people then move elsewhere in the sector. That is a positive sign of a good employer with the ability to invest, but not every employer has the margins to be able to do that.
In York, we have a skills strategy for 10 years in the city, but it will not be enough when we are near 100% employment. That is why we need to look further afield to ensure that we have a supply of labour coming into the city.
The Yorkshire hospitality sector has put together a three to five-year plan, looking at the cliff edges in front of it and highlighting the fact that only 5% of young people see a future in the hospitality sector. Again, we need to ensure that we have a supply of labour. The sector is using innovation as much as possible, with skills camps and academies in order to deliver so much more, but the workforce is not sufficient. That is why I turn, as other colleagues have, to the report by the Select Committee on Digital, Culture, Media and Sport. It highlights the scale of vacancies across the economy now, so we know we cannot stand still on this issue.
The youth mobility scheme is excellent. It gives young people the opportunity to come to the UK, learn the language and skills and have vital life experience. When we look at the list of countries we have heard about today—Japan, Australia, New Zealand, Iceland, Hong Kong, India, Canada, South Korea, Monaco, San Marino and Taiwan—we do not have any EU countries on that list. With regard to the aim of bringing 1,000 people over to the UK, if we compare San Marino’s population of 34,000 with the EU’s 446.8 million, the Government’s thinking seems to demonstrate a disparity. We need the movement of young people to be expedited so that they come and support our economy and our labour market, and see that investment in their future and our future, too. It is a perfect scheme that would work for my city of York, where people can really enjoy the sector.
We do have a challenge, and I am going to be very straight and honest about this. As has been mentioned in this debate, we need sufficient housing, and we need to address that urgently because of the cost of living in York and the Airbnb situation. The flipping of private rented accommodation into Airbnbs means that we need to ensure we have suitable housing for people when they come and give to our local economies. We must have systems in place to support the city.
I want to highlight an opportunity to the Minister. I know he is working hard on the issue of those seeking asylum in the UK, but these people come with skills. That is why I ask him to look at the shortage occupation list to see whether we can passport people with skills into the economy, so that we can utilise the skills that people bring and ensure that we are not experiencing labour shortages in certain areas.
York is about to receive 450 people into a hotel in the city. They will get an incredibly warm welcome and lots of support from the infrastructure within York. We will provide people with a home for as long as they are with us. However, if they are not able to work, that is a missed opportunity for them and for us. That is why we need to ensure that we enable people to both utilise and gain skills while they are with us. We recognise that people need time to get oriented and to heal their trauma, but engaging in good employment will give them the opportunities that they need and that our city needs. It is such a waste of talent, skill and life if people are just waiting in hotels for their claims to be processed. We want that process to be expedited, but while they wait, we welcome their employment across our industries. Those people then build relationships in the city, which gives greater security not only to them but to all of us. I hope that the Minister will bear that in mind and ensure that there is more opportunity for those individuals in future.
The tourism and hospitality sector has the advantage that it can use its resources to pay staff slightly more than other sectors. As a result, people have been sucked out of the care sector. Indeed, I will end by speaking about the care sector. The scale of vacancies is affecting the delivery of social care and the ability to discharge patients from hospital. That means people cannot get in the front door and we have an NHS crisis. Not being able to bring care workers into the UK because they do not fit into the points-based system seems completely ludicrous and self-defeating.
I trust that the Minister will look specifically at social care and the opportunity to bring highly skilled staff to the UK to deliver that vital role, so that all our constituents can have the care that they need, as we would expect. Not only are we in a crisis now, with 165,000 vacancies in social care nationally; given that 28% of care workers are over the age of 55, will have a greater crisis in future. That must be sorted out. I trust that the Minister will look at ways in which we can bring in young people and other people with skills, albeit for the short term, until we have the labour supply. However long it takes, we need to address those crises.
I am calling for pragmatism over ideology. I am sure the Minister understands that our communities must be heard and that the skills they require must be met. It is for him to deliver that.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
Diolch yn fawr iawn, Mrs Cummins. I congratulate the hon. Member for Westmorland and Lonsdale (Tim Farron) on securing this timely debate. Many, if not all, of us are aware that the hard Brexit the Government are pursuing is causing huge damage across many industries. I, too, want to focus on labour shortages as they affect the larger fishing vessels in Wales, just as they do beyond, as we have already heard.
I support local employment on Welsh fishing vessels, as would every local MP, but the simple truth is that the people are not there to do those jobs at present. Fishing vessels therefore need to be able to recruit from abroad to fill the gap in the short and medium term. Much like elsewhere in Northern Ireland, Wales, Scotland and England, the fishing fleet is being reduced. I do not think that is something any of us wants to be seen to be presiding over. Since 2018, it has been reducing by about 6% per year in Wales, possibly as the result of a combination of an ageing workforce, high costs of entry and now a restrictive visa system.
I want to raise the case of my constituent Mark Roberts, as it puts under the microscope something that is affecting a number of fishing vessels. He is a fisherman from Nefyn, a town near where I live, which has a long and proud tradition of both onshore and offshore fishing; it even supplied captains for whaling vessels back in the day. Mr Roberts has been trying to recruit fishing crew members from outside the European economic area. In the past, he has employed local crew, a number of whom have now gone on to own their own vessels. He would like to continue to employ a local crew, but the plain truth is that they are just not there. He faces not being able to go out to sea and operate as a business unless he has a sufficient number of crew members.
Mr Roberts told me that one of the main barriers to employment is the written English language element of the skilled worker visa, for which fishing crew members are eligible. He wanted me to raise the case of a Ghanaian fisherman who recently failed the B1 English exam for a fourth time. He is a highly skilled, highly motivated fisherman and he continues to persevere with the test. However, it has caused additional delay and cost for both him and Mr Roberts.
Mr Roberts and the rest of the crew have been trying to tutor him, in the hope that he will be able to pass next time. They also hope that the Home Office will relax the rule and recognise that written English is not a key skill for this vocational area. Does someone need written English to be a proficient crew member on a fishing vessel, when there is a skipper alongside? If we want our crews and our vessels to survive into the future, is that a skill we need, here and now?
The experience is, of course, far from unique. The fishing industry says that the high bar for English, particularly the written element, goes far beyond that required of deckhands. Mr Harry Wick, chief executive officer of the Northern Ireland Fish Producers’ Organisation, gave evidence to the all-party parliamentary group on fisheries. He told us that we need a vision of evolution for fisheries. There is no short-term fix, but they still need crew and, in the meantime, those crew will need to come from abroad.
Earlier this year, Seafish, the public body supporting the seafood industry, noted that only one person had successfully applied using the skilled worker visa route. Will the Minister tell me how many fishing crew workers from abroad have used that route since then? [Interruption.]
Because of my cough, I will come to a conclusion fairly shortly and will not be able to say everything I want to say, but I want to close on one thing that Mr Roberts told me. He has spent £17,000 in immigration solicitor fees to recruit crew members, because he is an honest man who wants to follow the post-Brexit rules to the letter. He wants to avoid the enormous fines he would face if he were to operate within 12 nautical miles of the UK with crew members who have transit rather than skilled worker visas.
This situation cannot continue. If we are serious about wanting this vocational area to operate into the future, I agree that we must look at careers, skills, apprentices and training into the future, but they are not here in the here and now. If I could meet the Minister to discuss how we can find a solution for honest, good, well-established family businesses like that of Mr Roberts, I would be very grateful.
Anne McLaughlin (Glasgow North East) (SNP)
I am pleased to serve under your chairwomanship, Mrs Cummins. I thank the hon. Member for Westmorland and Lonsdale (Tim Farron)—he comes from a beautiful part of England—for highlighting this crucial topic. Much like a lot of Scotland, his constituency faces the problems of rurality and the challenges of supporting a hospitality industry plagued by labour shortages.
It has been interesting to hear the many views on how we can tackle the issue of labour shortages post Brexit and post covid, especially given the divergence in the types of constituencies we represent, each with its own unique set of labour challenges, be they in agriculture, hospitality, fishing—we have heard extensively about fishing today—transport, construction, health and social care, logistics or food processing. The list goes on, but the core issue at heart remains the same. We have witnessed the doors slam on free movement, which is now a dirty word—well, two dirty words—for both the UK Government and the official Opposition. In addition, the global pandemic saw more than 1.3 million EU workers return home. When they finally thought about coming back, they were locked out by this Government’s hugely regressive post-Brexit points system.
If we had stayed in the single market, as the majority of people in Scotland voted to do, free movement would be the perfect solution to the many labour shortages across these islands. It will come as no surprise to hear that I am confident that Scotland will rejoin the EU—and that means the single market—as an independent member soon. Until then, we fully support the call for solutions to labour shortages through visa schemes, including a temporary recovery visa.
This is a crisis of the Government’s making. It was completely avoidable. It is a crisis caused by policy, politics and a rhetoric on immigration that is fuelling the right, stirred up by inflammatory language from the Home Secretary. I cannot tell hon. Members how shocked and disgusted I was to hear the Home Secretary refer to an “invasion” of immigrants to these shores. An invasion—really? “Invasion” conjures up images of insects, wild animals, wars and battles. It is far removed from the reality of the humanitarian crisis that we are witnessing in the channel.
The Minister could argue that the Home Secretary was not talking about migrants per se, just those crossing the channel—I do not think he will—but it is not acceptable, whoever she was referring to. The Home Secretary must understand that using that kind of language and stoking up fear about one set of migrants has an impact on all migrants. That includes the current and future migrant workers that the UK is absolutely dependent on.
It has taken empty shelves and closed restaurants to bring this issue to the public’s attention, but business leaders have been warning the Government for quite some time about the dire situation that they would find themselves in because of these shortages. The British Chambers of Commerce has said that of 5,700 businesses, more than 60% need to find more staff in the UK. Kate Nicholls, the chief executive of UKHospitality, pointed out that one in five workers has not returned after furlough, giving the sector a 10% vacancy rate. She agreed with the recommendations from the Digital, Culture, Media and Sport Committee for a temporary recovery visa, and said:
“This would go a long way to helping recruitment challenges and would support the sector’s ability to provide fantastic service to all its customers. We would strongly urge the government to consider its introduction as part of a pro-growth review of immigration policy.”
Three quarters of UK businesses have said that they are experiencing difficulties filling vacancies. I have received numerous letters from businesses in my constituency that are struggling to get staff and asking what exactly the Government plan to do about it. There is another reason to ensure that we fill those vacancies. As the CBI said recently,
“Guarding against skills and labour shortages can…help keep inflation in check”.
At a time when the cost of living is going through the roof, should the Government not heed that advice?
The Scottish Government have tried to help the UK Government out. The First Minister even offered to split responsibility for immigration policy with them, and proposed a Scottish visa, but that was refused. It would solve some of the economic problems in Scotland, but it clearly does not fit the ideology that says that if the Scottish National party suggests it, it must be wrong. The Scottish Government are determined to address these issues but have very limited powers available to them. They are proposing a rural visa pilot, which offers a community-driven approach to migration that can respond to the distinct needs of remote, rural and island areas.
We want to welcome people, not ward them off, because people make communities and keep our economy growing. It makes no sense to stubbornly believe that we can just do everything ourselves, especially when our rural communities—much like that of the hon. Member for Westmorland and Lonsdale, I am sure—face population decline.
Many of the initiatives from the UK Government are very temporary. I understand that the solution is not complete permanence, but they are so temporary that they offer no real certainty for businesses or workers. They are simply sticking plasters. That is the crux of the issue with so much policy at the moment—the short expiry dates. I have had milk that has lasted longer than some of the previous Cabinet’s plans. I hope this one does better.
Business, industry and the workers themselves need certainty. I have been trying to hammer home that point in relation to the six-month energy relief scheme that is on the table for SMEs, public sector organisations and charities. They simply cannot operate in weeks and months. Last year, we saw a three-month visa offered to HGV drivers. What good is a three-month visa? Who in their right mind would move to a country where they face being kicked out in 12 weeks’ time? That is a point that I would like to make to Labour colleagues. I am not going to go into how crushed I felt when I heard the Labour leader say that we have too many migrants working in the NHS, though I know I was not as crushed as the migrant workers themselves. Today, Labour’s shadow Health Secretary, the hon. Member for Ilford North (Wes Streeting), said that if they got into power, they would keep migrant workers in the NHS until they had enough home-grown workers trained for the health service.
Rachael Maskell
I worked in the NHS for 20 years and all I will say is that I know the value of working alongside people who have trained across the world. They bring their skills into the NHS, and it has been a privilege to work alongside them. I think we should aspire to recognise the skills they bring and the opportunities that provides for our patients.
Anne McLaughlin
I really do thank the hon. Lady for that. There will be so many migrant workers who have worked their backsides off in the NHS, especially during the pandemic, and who will be devastated about what has been said, but the hon. Lady’s remarks go some way towards balancing that out.
I have to ask: what kind of arrogance does it take to believe that doctors, nurses, radiographers and others are so desperate to be here in the UK that they will fill the positions that we desperately need to be filled in the NHS, knowing that when they are surplus to requirements, they will simply be dispensed with because both Tory and Labour Governments would much prefer the jobs to go to those who were born here? Employment is a two-way thing. Migration is a two-way thing. If we do not meet migrants halfway, they will not come and we will not be able to look after people. Everybody needs to think clearly about that.
We need solutions and ideas. One solution that has been put to the Home Office, certainly by my party—indeed some of my colleagues have private Members’ Bills on it—and other colleagues today, is to allow asylum seekers to work. We are facing labour shortages, yet we have tens of thousands of people who are already here, desperate to contribute and integrate with our communities, but they are cut off and left to rely on meagre handouts from the state.
The current situation plays into the hostile environment rhetoric so well. To paint asylum seekers as economic migrants here for benefits is just not true. Nobody wants to live on less than £6 a day, and people should not be put in that situation. Given that 76% of asylum applications are allowed on the initial decision, not to mention the many more who win their appeals, we are putting thousands of people in an enforced limbo when they could easily be contributing, paying tax and filling the gaps in our labour market.
I would like to know if the Government have any plans to consider this eminently sensible solution. As the hon. Member for Westmorland and Lonsdale said, there is no downside. If the Minister’s answer is, “No, we are not going to consider this solution,” he must see a downside, and he must tell us what he thinks that is. My preference, and my fervent hope—I saw him nodding his head earlier when it was mentioned—is that he agrees to look into allowing asylum seekers to work and plug the damaging gaps that are holding the economy back.
Stephen Kinnock (Aberavon) (Lab)
It is a pleasure to serve under your chairship for the second time in two days, Mrs Cummins—it is truly a privilege for me. I thank the hon. Member for Westmorland and Lonsdale (Tim Farron) for securing this important debate, and other right hon. and hon. Members for their thoughtful contributions. I particularly thank my hon. Friend the Member for York Central (Rachael Maskell) for her insightful speech. Her clarion call for pragmatism over ideology is something I hope everyone in this Chamber will support.
I would like to set out the Labour party’s approach to work-based migration in the UK. In a nutshell, we support the principle of a points-based system for migrant workers. I will not need to remind hon. Members that it was a Labour Government that introduced the points-based system in 2008 for immigration from outside the European Union. We are clear that there will be no returning to the free movement of labour that was a feature of our membership of the European Union, but we are equally clear that we need to build on and improve the points-based system currently in place. Our long-term ambition is to ensure that all businesses, in every sector, and our public services recruit and train as much home-grown talent as possible to fill vacancies, before they look overseas. For instance, we need to train more home-grown doctors, hence our commitment to doubling the number of clinical placements and to setting out a five to 10-year workforce plan, which is desperately needed when we consider the 7 million person waiting list and the huge issues with workforce shortages and challenges. We know that if we just turn off the tap of migrant labour, without the appropriate workforce structures and adequate training and recruitment in place, our public services will deteriorate and our businesses will struggle to meet our wider economic ambition to make, buy and sell more in Britain. In the end, it becomes a crutch, with more and more jobs eventually disappearing overseas.
Let me address the comments made by the spokesperson for the SNP, the hon. Member for Glasgow North East (Anne McLaughlin). I did not hear the comments today from the shadow Health Secretary, my hon. Friend the Member for Ilford North (Wes Streeting), but I know that our policy is very clear. We want to maximise opportunities for home-grown talent—doctors, nurses and care workers—but we absolutely recognise that we have to get the balance right. Where we have migrant workers playing vital roles, that is what we want to continue to have, but we want at the same time to maximise opportunities for home-grown talent. It is not an either/or question—a binary question. It is a “both …and”. It is a question of balancing—not turning the taps off here and turning the taps on somewhere else.
Anne McLaughlin
I appreciate the clarification, but it was quite clear that the leader of the Labour party said there were too many migrant workers in the NHS. The shadow Secretary of State for Health and Social Care seemed to be saying—I cannot remember the exact words, but obviously I will go and look again—“Yes, okay, we’ll allow migrant workers to be our doctors, nurses, whatever, until we have got enough of our own.” What does that say to them? “You are here when we need you, but when we no longer need you…” I support training people who want those jobs—training people here. But what does that say to those migrant workers who have committed themselves to our NHS? “As soon as we have got enough of our own home-grown people, we are going to kick you out.”
Stephen Kinnock
I think it would be a caricature of whatever comments were made to say that we are going to somehow stop people who are already here being here. That seems to be the logical extrapolation of what the hon. Lady is arguing, and I do not think that anybody would argue that. We value the workforce that we have, but we also want to build and create more opportunities for our own, home-grown talent. I am sure that that is something we can all agree on.
Let me turn away from the health and care sector for a moment and look at some of the issues that have been raised about the agricultural sector. We cannot have a situation such as we have had in the farming sector where 30,000 pigs are being slaughtered and £60 million-worth of crops are being burned, which is what happened over the past year. We also know that the construction industry lost 175,000 jobs in 2020-21, and that has had a big impact in the form of projects being slowed down. We know that, in September 2021, UKHospitality called for the Government to include the hospitality sector in temporary work visa schemes in the aftermath of covid-19 and reflecting the need to boost our economy. That call was of course echoed in the report by the Digital, Culture, Media and Sport Committee that was published on 24 October. It recommended the introduction of temporary recovery visas for industries—predominantly tourism and hospitality in this case—that are experiencing short-term labour shortages for so-called low-skilled roles.
We recognise these challenges and we feel that the way to find solutions is to go to the heart of the system so that it is better positioned and placed to deliver results on a sector-by-sector basis—pragmatism over ideology, as has already been said. The Opposition are well aware of the flaws in the current points-based system. We feel that the Government are failing to balance the need to encourage businesses to recruit and train home-grown talent with the need to use migrant labour to address short-term pressure points in the labour market.
The fundamental weakness is that the Government’s economic migration strategy is not joined up, so they will struggle to meet their economic and public-service priorities. For instance, we feel that the Migration Advisory Committee and the Skills and Productivity Board are not as integrated as they could be in making decisions on the shortage occupation lists.
We believe that the way to understand the type of short-term support that sectors require, for instance access to temporary work visas, is to get the system working properly, with more flexibility. At the heart of that should be a three-way dialogue, led and convened by the MAC, drawing together representatives from employers speaking for the sector, trade unions, and relevant Government Departments, to look at the sectors on the Migration Advisory Committee’s shortage occupation lists in detail. That dialogue would be the mechanism through which decisions are made around the short-term visa schemes, such the seasonal worker scheme, the youth mobility scheme, and new ideas, such as the temporary recovery visa, which is being debated here today.
The three-way working group would not only look at the shortage occupation lists but set conditions that companies that have sponsorship licences would need to meet on workers’ rights. We are worried that the current points-based system is also failing when it comes to the enforcement of labour standards.
We know, for instance, that Nepalese health workers, Indonesian fruit pickers, and care workers from the Philippines and Ghana, are at serious risk of exploitation through recruitment agencies charging fees, leading to migrant workers ending up in illegal debt bondage through having to repay those recruitment fees. Many of those recruitment agencies operate abroad, and it would be good if the Government were able to investigate whether work could be done by British embassies overseas to look out for problems and red-flag agencies that are suspected of nefarious practices.
We must also clamp down on illegal practices in the UK. Of course, it is illegal to charge migrant workers recruitment fees in Britain, but the Association of Labour Providers said that some employers in the UK are still demanding that workers pay for their recruitment fees. We need solutions to those issues.
Part of the challenge is that, under the past 12 years of successive Conservative Governments, the number of labour market inspectors has decreased to one inspector for every 20,000 workers, when the International Labour Organisation recommends one for every 10,000. I hope the Minister will share his thoughts on that ratio, and whether he believes that it will enable the Government to crack down on exploitation.
In 2019, the Conservative party committed to merging the three enforcement bodies—the Employment Agency Standards Inspectorate, the Gangmasters and Labour Abuse Authority and His Majesty’s Revenue and Customs’ national minimum wage enforcement teams—into one enforcement body. Perhaps the Minister could confirm what progress is being made on that, or is it perhaps another broken manifesto promise?
The main agency involved in the welfare of seasonal workers is the Gangmasters and Labour Abuse Authority. The scheme operators, which are responsible for recruitment, must have a licence from the authority and can have it revoked if they failed to abide by certain standards. However, the regulator does not routinely carry out inspections on farm premises, and some critics say it lacks the resources to police abuses of workers’ rights.
We also need to understand, for seasonal workers specifically, what action is being taken by the Government to ensure that the 40,000 businesses with sponsorship licences from the GLAA are being properly regulated by HMRC to ensure that they maintain high employment standards.
Anne McLaughlin
Is the hon. Gentleman aware of another issue, which the Daily Record in Scotland revealed the other day, that delivery drivers for Just Eat, Deliveroo and others—I cannot remember which of the others it was, so I had better not say any names—are able to rent out their accounts? They are told that they are responsible for ensuring that the person they rent it out to is allowed to work and has passed basic health and safety checks, and that is obviously not happening. People are having meals delivered, and do not know if that person has passed the checks that they should have. Just as importantly, some of the workers renting those accounts are not allowed to work and are being exploited. Would the hon. Gentleman agree that the agencies he mentioned should be able to look into that as well?
Stephen Kinnock
The hon. Lady is absolutely right that there is a vital role to play here, in terms of regulation and enforcement. Our major concern is twofold. There is a bit of a mixture of all of these agencies not necessarily co-ordinating together. There are three main agencies, so, first, let us have a single enforcement body. Secondly, the number of labour market inspectors should meet ILO standards. It is currently one to 20,000 and it should be one to 10,000. Those would be major steps in the right direction, and could be the start of cracking down on the issue the hon. Lady rightly raises.
Maintaining standards is not just important for the wellbeing of migrant workers and preventing undercutting, it is also good for employers, as we need to make Britain an attractive place to work, not least in sectors such as food and farming, where we are clearly more reliant on migrant workers than in other sectors. The National Farmers Union deputy president, Tom Bradshaw, told the Environment, Food and Rural Affairs Committee that, although a 30,000 quota for seasonal workers visas in 2021 was a lifeline for the industry, it has not been big enough.
We also know that the challenge for the sector is not just seasonal but year-round. We understand that there are recruitment challenges in relation to the short-term nature of these visas, which the Government must look at closely. Therefore, we need to be sure that the working conditions attached to the visas are as attractive as possible, in order to attract the workers that we need, and to avoid undercutting.
Of course, where sectors and businesses are given permission to recruit from overseas, we need to see commitment to long-term workforce planning. How, for instance, would a company plan to invest in home-grown talent in the long term? What is it doing to invest in research and development, in modernising its technology and machinery to boost productivity? Does it have a skills strategy? Those are the questions that should be asked of companies, as a quid pro quo and part of the conversation about being given shortage occupation and other permissions to bring labour from overseas. What is it doing to show its long-term workforce plan? How is it boosting productivity? Those are the questions that Government should ask. There should be a proper dialogue, rather than pulling arbitrary numbers out of the air within the Westminster bubble.
Are the Government asking for workforce plans from companies that benefit from the shortage occupation lists? If not, perhaps the Minister might like to say a few words on that. Those are the questions that Labour will ask, as and when we enter Government, committed as we are to ensuring that our points-based system strikes the right balance between incentivising employers to train and recruit locally with the right to recruit internationally where required.
I look forward to the Minister’s responses to my questions, in addition to those raised by other right hon. and hon. Members.
The Minister for Immigration (Robert Jenrick)
It is a pleasure to serve under your chairmanship, Mrs Cummins. I am grateful to the hon. Member for Westmorland and Lonsdale (Tim Farron) for calling the debate. As others have said, he represents one of the most beautiful parts of the country and one of my favourite destinations. Any help we can give him to ensure that his hospitality and tourism sector continues to thrive is a priority for me.
I am grateful for comments and speeches from other right hon. and hon. Members, and will try to answer as many as I can in the time available. I am particularly pleased to see my right hon. Friend the Member for Witham (Priti Patel) make her debut in Westminster Hall after many years. I know from my new colleagues at the Home Office how much she is missed. I was pleased to hear her thoughts today.
I will begin by addressing the specific question of a temporary recovery visa, and then broaden out. We have had a wider debate about how we handle labour market shortages, the balance between migration and our domestic labour market and how we train people here in the country to meet those challenges. That includes how to balance bringing people into the country versus the significant issue of more than 5 million economically inactive people, and how we can help those individuals back into the labour market, whether they be older people who left the labour market during the pandemic, or younger people who need to get back or into work for the first time.
It is important to say at the outset that an impression has been given during the debate that the visa system is highly restrictive, enabling few people to come into the country, and that essentially migrant labour has been cut off as a result of policy decisions. That really is not true. We have a comparatively flexible work visa system, and the Home Office granted over 330,000 work-related visas in the year ending June 2022, including—I will come to this in more detail in a moment—just over 96,000 health and care worker visas to support the NHS. We have more than doubled the number of eligible occupations for skilled worker visas so that more than 60% of jobs in the UK economy are now eligible. Over 48,000 employers are now on the sponsor register, and we encourage others to join.
We have to set today’s debate, and the important and valid points that have been raised, within that context. As a country, we are welcoming very significant numbers of people to work and live here as a result of our visa system. Of course, there can be a legitimate debate about who we are inviting in, and whether we address specific concerns, but it is not correct to suggest that we have a highly restrictive system, or that that has been a consequence of leaving the European Union.
In general, I do not think that a temporary recovery visa is the right approach. The points-based system is the right way forward. It supports UK businesses to recruit workers with the skills that they need from around the world, and it is broader than the previous immigration system, with many more jobs now eligible, stretching across all the key sectors of the British economy, thanks to the good work that my right hon. Friend the Member for Witham did during her time in office.
We have a large and growing domestic labour force, which includes UK workers, the millions of people who applied successfully under the EU settlement scheme, and visa-holders with general work rights. It is important to stress that, over the course of the last year or so, we have also had tens of thousands of Ukrainian and Afghan citizens. In fact, well over 100,000 are now living in the United Kingdom, a good deal of whom want to work. We should encourage them into paid employment for many reasons, not least so that we can help them to make fruitful lives here and ensure that they are not living in hotel accommodation, which too many still are. That has been the subject of other debates elsewhere in Parliament this week.
Many of the sectors that have called for a recovery visa, some of which have been discussed today, including hospitality, haulage and construction—all sectors for which I have sympathy; I have been involved in some of them in recent years as a Minister—have long-standing recruitment challenges, stretching back many years. Some of them are essentially calling for a general immigration route, allowing recruitment at or near the minimum wage for roles that have only relatively short work-based training requirements. It could be a choice for this country to welcome workers to that type of role, and other parties may make different choices from us, but it is important not only that we are guided by the Migration Advisory Committee’s recommendations, but that we think carefully about the skill and salary thresholds of people coming into this country.
That is for a number of reasons. One reason is so that we can ensure that people who are looking for work in this country are encouraged into those jobs. As Members of Parliament, I am sure that we have all come across employers in our constituencies who in the past have reached too easily for international workers rather than trying to recruit, retain and skill up British workers. I have certainly encountered that in my constituency, which has a good deal of employers in the food processing and agricultural sectors.
Another reason is that we want to encourage the British economy to be more productive. Employers should ensure, where possible—it is not appropriate in every sector—that we are better at automation and have a more innovative economy, not one that is simply hooked on the drug of relatively low-paid and low-skilled migrant workers. I appreciate that in sectors such as care, and perhaps hospitality and tourism, talk of automation and innovation is not as relevant. I will come to some of the work that we have been doing in those sectors in a moment.
I want to stress that some of the businesses we have been talking about, particularly in hospitality and tourism, although undoubtedly they have been through an extremely difficult period during the pandemic and our recovery from it, have benefitted from substantial Government support, whether through the business support scheme or furlough. Those schemes amounted to hundreds of billions of pounds. I do not diminish the challenges that businesses face, but it is worth reminding ourselves of the scale of support we have given. We are, of course, living in the long shadow of the pandemic and the fiscal challenges it has brought upon us all.
We really need to encourage businesses to play their part by investing in and developing the UK’s domestic labour force, rather than relying on immigration policy as an alternative, especially given the 5 million economically inactive people in our economy. That does not mean we should not think carefully about the sectors that face particular challenges. We are alive to those issues and want to adopt a pragmatic approach, but that approach has to be a two-way street. As the hon. Member for Aberavon (Stephen Kinnock) said, it involves businesses themselves working hard to recruit and retain domestic workers and thinking about improving their productivity, rather than immigration being the long-term solution for those sectors.
We must also be alive to the fact that some of the industry bodies and lobbyists who approach the Government, perfectly understandably to represent their members, occasionally overstate the value of migrant workers and their availability in the international labour market. The former Home Secretary, my right hon. Friend the Member for Witham, will remember some of those instances. I am thinking, for example, of HGV drivers: there was a concerted campaign—one that ostensibly seemed valid—to create a specific route to bring more HGV drivers into the country to meet the significant issues we had at one stage. We responded to that call and only a tiny number of foreign HGV drivers ultimately applied for the visa, met our requirements and came here.
The lobby groups that raised that issue, although they were perfectly at liberty to do so, were wrong. That was not the route to solve the problem. The long-term solution was to make the industry more attractive to domestic workers, to retain more HGV drivers and to help to put the sector on a more sustainable footing.
Several hon. Members rose—
Robert Jenrick
I will give way to the hon. Member for Glasgow North East (Anne McLaughlin) and then the hon. Member for Strangford (Jim Shannon).
Anne McLaughlin
Could that failure to recruit enough HGV drivers from overseas have been anything to do with the fact that they were told they could come here for 12 weeks and would then have to go home again?
Robert Jenrick
No, that was not the issue. Without going off on a tangent, the root cause of the issue was the aging population of HGV drivers. Many were coming up for retirement and the industry had had poor pay and working conditions for a long time. There was also a global shortage of HGV drivers, so it was not unique to the UK. We saw it all over Europe.
Jim Shannon
I thank the Minister for his interest in trying to solve these problems. In my contribution I spoke specifically about fishing and skills; will he give an assurance that he will meet me, and other Members who wish to join us, to discuss that topic? That would be helpful. I make that request in a constructive fashion—I mean that honestly—because I believe there is a way forward that we can all agree on.
Robert Jenrick
In the time I have available, let me address some of the specific points raised. I am looking forward to meeting the hon. Member for Strangford and representatives from the fishing industry. He has made a number of good points today and I hope we can explore them in more detail when we meet.
The hon. Member for York Central (Rachael Maskell) made valid points, particularly on health and social care. As a former Health Minister, I hear what she said. The issues she raised are the reason why my right hon. Friend the Member for Witham created the health and social care visa, which has been very successful, and we now see tens of thousands of doctors and nurses coming to the UK. That is not the long-term answer—we want to train more people domestically, and I am alive to arguments made for lifting the cap on medical school places—but in the meantime it is important to bring in those who want to come here to work. That visa is also applicable for care workers, although I appreciate that there are some legitimate concerns about the salary threshold and so on that make it more challenging than we would like it to be.
In opening the debate, the hon. Member for Westmorland and Lonsdale talked about the broader labour market challenges and how we respond to them—a valid point also made by my right hon. Friend the Member for Witham. We need to take that up across Government so that we have a far more joined-up approach to these challenges. One way in which we are trying to ensure that skills training more adequately meets the needs of particular communities in England, at least, is through devolution. We now routinely devolve the skills budget for adults to local authorities and Mayors. The hon. Member for Westmorland and Lonsdale has a new devolution deal in his area; if that progresses to a mayoral deal, I suspect he will see a devolution of skills budgets and training to Cumbria, which may be helpful to him.
A number of colleagues raised the question of youth mobility schemes, which I fully support and would like to see more of. Most recently, we have progressed that idea through the Australia and New Zealand free trade agreements, while negotiations are ongoing with other countries. We are open to more agreements, which clearly must be reciprocal. With respect to European countries, we are open to that debate. The EU is currently seeking an agreement across the whole European Union, rather than on a state-by-state basis; although that does not preclude us from entering into it, it clearly means a longer and more complex negotiation than if we were able to negotiate with individual states.
Several Members raised the question of asylum seekers having the right to work in the UK. I appreciate that there are good arguments on both sides of this debate, which I have considered at length. On balance, I do not agree with doing it because it would add a further pull factor to the UK. The UK already sees a very large number of individuals making the dangerous crossing across the channel. There are a number of reasons for that. The UK is viewed as a more attractive location to come to for work and access to public services because of the way in which we treat those individuals versus other European countries. I do not think it would be sensible for us to add a further pull factor to the many we already have. Deterrence has to be suffused through our approach to tackling illegal immigration. If we undermine that further, we will only find larger numbers of individuals crossing the channel.
With that, I draw my remarks to a close. I look forward to meeting the hon. Member for Strangford to discuss fishing. If the hon. Member for Westmorland and Lonsdale ever wishes to take up these matters with me, I would be happy to meet with him to discuss them further.
Tim Farron
I am grateful to you for overseeing the debate, Mrs Cummins.
I thank the Minister for that offer. Let me cut to the chase: yes, we would love to have a meeting with the tourism leaders for the lakes and the rest of Cumbria Tourism to talk about all the practicalities.
The tone of the debate was good. It is a low bar, I am afraid, but at least there has not been any incendiary language about foreigners and asylum seekers flooding our shores and all the rest of that nonsense, although I did disagree with some of the things that others said.
The right hon. Member for Witham (Priti Patel) made some good points about us training our own staff and ensuring that we develop young people’s talent. In my part of the world, Kendal College has certainly added massive value for young people so that they can set up a career in the Lake district. We should not see hospitality just as something that is menial and low paid; it is a real career trajectory that people can follow.
My more general concern about the Government’s position is that they have allowed political considerations to overwhelm economic and practical ones. If someone trying to run a business in the Lake district has a workforce problem, that is partly—maybe mostly—caused by the housing disaster, which the Government need to get a grip of, but it is in no small part also caused by inflexibility on migration. It needs to be something that is reciprocal, whereby we give people a reasonable length of time here so that they can contribute. That is what businesses want; I hope the Minister will listen to them.
Question put and agreed to.
Resolved,
That this House has considered the matter of a temporary recovery visa for industries experiencing labour and skills shortages.
Bankers’ Bonuses
(2 years ago)
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Judith Cummins (in the Chair)
I will call Jon Trickett to move the motion, and then the Minister to respond. There will not be an opportunity for the Member in charge to wind up, as is the convention for 30-minute debates.
Jon Trickett (Hemsworth) (Lab)
I beg to move,
That this House has considered the Government policy on bankers’ bonuses.
It is a pleasure to serve under your chairpersonship, Mrs Cummins. It is good to hear somebody from the old West Riding, as we would call it, in charge of the sitting this afternoon. I look forward to fair but firm chairpersonship.
It was the great German playwright Bertolt Brecht who once said that, to make money from banking, set up a bank rather than rob one. People make more money that way. It is clear that there needs to be a wider debate about the role of the financial sector in the British economy, but it is good to start with the remuneration structures in the finance sector. That is what this debate is about.
The previous Chancellor’s deplorable mini-Budget, as I would insist it is called, contained a series of clearly mistaken policy shifts. Following the change in Chancellor and then in Prime Minister, almost the whole of that mini-Budget disappeared, except for one thing: the idea that we should lift or remove the cap on bankers’ bonuses. I hope that the Minister will be able to change Government policy this afternoon, following my persuasion, but we will see what he says.
We have been here before on the question of bankers’ bonuses. I want quickly to recall what happened in the 2008 banking crash. As it happened, I was working in Downing Street at the time and saw clearly that we were on an economic precipice, in part because bankers’ remuneration had been allowed to let rip. The crash almost brought down our whole economic system.
When it came time to review how the crash happened, a significant part of it was attributed to the reckless culture of greed in the banking sector, which had exposed the banks to unacceptable levels of risk. Adair Turner, the then chair of the Financial Services Authority, said that
“inappropriate incentive structures played a role in encouraging behaviour which contributed to the financial crisis”.
He is hardly a man of the left, and therefore I think his words might be regarded as authoritative.
In 2009, the all-party Treasury Committee returned to the question of remuneration. It said that remuneration in the banking industry had played a role in causing the banking crisis. It questioned whether Turner’s response was strong enough and whether
“the Financial Services Authority has attached sufficient priority to tackling remuneration in the City.”
As we know, although bankers played a major role in bringing the system to its knees, in the immediate aftermath of the crash no banker was charged with any offence, in spite of their reckless behaviour. Many people in the country, in my constituency and elsewhere—perhaps in yours, Mrs Cummins—thought that at least some of them should have served time at Her Majesty’s pleasure.
It was the European Union that eventually instituted control of bankers’ bonuses. The EU said that no banker should receive a bonus of more than 100% of their salary—though where that figure came from I do not know—or 200% if shareholders had voted in agreement. It is that cap that the Government appear to now be intent on removing.
I want to use this short debate to ask three questions. First, how much is remuneration for bankers now, 14 years after the crash? Secondly, who is suggesting that the bankers’ cap be removed and why? Thirdly, how do we justify an ethos of greed as a determining factor guiding so many decision makers in a strategically important sector of the British economy?
Beth Winter (Cynon Valley) (Lab)
My hon. Friend is making a very important speech, particularly in terms of who is advocating this policy. When the previous Chancellor made the fiscal statement announcing the policy, I tabled a written question asking how many people in my constituency of Cynon Valley were going to benefit from lifting the bankers’ bonus. The response was as expected and inadequate, in that the Government said that they did not know. I wonder whether that was because nobody in Cynon Valley is going to benefit from it. Does my hon. Friend agree that the reason nobody in places such as Cynon Valley will benefit is that the ban is being lifted to benefit financiers and others in the City, when the people who should be benefitting are those in the regions of Wales, the north of England and Scotland and our essential key workers—nurses, teachers and so on?
Jon Trickett
I am grateful to my hon. Friend for that intervention. I agree with every point she made and I will develop some of those arguments as I speak.
First, I will address the question of where we are now with remuneration in the banking sector. We know quite a lot about it. The chief executive officer and chief financial officer of Britain’s largest bank, HSBC, were paid $2.2 million and $1.3 million, respectively, for 2021. The truth is that bankers’ bonuses have doubled in spite of the cap since the 2008 financial crash. According to the most recently available data, there are 3,500 bankers working in our country who made more than €1 million—£880,000—in a single year. That information comes from the European Banking Authority. Seven out of 10 of all the bankers who made more than €1 million in the whole of Europe are located in the United Kingdom. Meanwhile, 27 bankers in the UK were paid more than €10 million in a year. Two UK-based asset managers received between €38 million and €39 million in a year—I think that clearly makes the point referred to by my hon. Friend—and at the top of the pops, one merchant banker was paid €64.8 million in a single year, and almost all of that was a bonus.
Those are absolutely outrageous figures. They make me wonder why the Government feel it is necessary to lift the bonus cap at all, given the outrageous sums that are being paid.
That brings me to my second question, which was an attempt to discover who is actually pressing for a lifting of the cap on bonuses. Given the rates of remuneration I have just indicated, it would take a colossal amount of unrestricted greed for bosses in the banking sector to propose such a thing. However, according to The Guardian, sources in some of the City’s largest banks are saying, “Not me, guv. I didn’t ask for the cap to be raised.” Those bankers admitted that they were baffled by the then Chancellor’s plan, and I think that they are equally baffled by the current Chancellor’s decision to continue with the plan to lift the EU-imposed cap. The bankers said that they had not lobbied for the move, so it begins to look like this was an ideological move by the Conservative Government, who believe as a matter of faith in rewarding the super-rich with additional wealth.
Ms Anum Qaisar (Airdrie and Shotts) (SNP)
The hon. Member is making an excellent speech. In my constituency of Airdrie and Shotts, 68% of people are cutting back on their essential groceries, and 65% are worried about not being able to pay their energy bills. Is it not simply the case that under the Tories the poor get poorer and the rich get richer, whether they be bankers or oil giants not paying windfall tax? Does the hon. Gentleman agree that the UK Government would do well to adopt the Scottish Government’s approach of implementing policies designed to alleviate the cost of living crisis, such as freezing rent and rail fares, expanding access to free school meals and increasing the Scottish child payment to £25 a week, rather than looking after their rich banker friends?
Jon Trickett
The hon. Lady makes a number of important points, and I agree with most of them.
I was asking whether the Government are ideologically committed to this policy, since no banker is prepared to admit that they had lobbied for it. If that is the case, and it looks like it is, there is not a single shred of empirical evidence that money can trickle down from the most wealthy to the rest of society—quite the reverse. Beyond a certain point, it has been argued that the further growth of the finance sector hampers rather than supports the real economy. One study estimated that the excessive size of the UK’s financial sector may well have cost our economy £4.5 trillion in lost growth over a 20-year period.
Turning to my third question, there is no evidence to suggest that individualised reward systems for key decision makers are necessarily for the corporate good of the institution for which they work, let alone the common good of the country as a whole. An argument that the Government have developed is that if banks pay more bonuses, they will attract more bankers who will pay more tax. A better argument would be to pay those who are on the lowest pay more money because they will spend it in the local economy and contribute to income for the Treasury.
A Government who set out public policy to raise the incomes of the wealthiest while holding down the wages and salaries of working people are totally at variance with the values of the overwhelming majority of people in this country. How can they justify the multimillion remuneration packages for a handful of people at the top when the number of food banks for working communities is growing? In any event, it seems that avarice in the financial sector is simply piling up the material for the next crash, which will come if we do not change direction fast. The Government need to abandon this policy. That is just plain Yorkshire common sense.
I want to make one further point, and I will be careful how I express it—the House will understand why. The Code of Conduct for Members states:
“Holders of public office should not place themselves under any financial or other obligation to outside individuals or organisations that might influence them in the performance of their official duties.”
I quote that because 10% of all MPs have disclosed in the Register of Members’ Financial Interests that they have monetary ties with for-profit companies or individuals in the financial sector. The same is true of one fifth of all peers. I worry about how embedded the financial sector is in this very building. Financial institutions and individuals closely tied to the banking and finance sector donated a total of £15.3 million to political parties throughout 2020 and 2021.
Returning to bankers’ bonuses, the Government need to take three steps. First, they should immediately announce that they will not lift the cap on bonuses. Secondly, they should appoint an independent commission to examine the whole remuneration structure in the UK, starting with the financial sector. Thirdly, they should make an interim announcement that there will be a suspension of all bonus payments in the City during the current financial crisis, until the independent commission that I have recommended reports.
Beth Winter
In addition, does my hon. Friend agree that a windfall tax on the profits of the banks should be introduced as an alternative to a future round of austerity, as stated by the previous deputy governor of the Bank of England?
Jon Trickett
My hon. Friend has caught my next point. In the interest of social justice, the country feels that a 2% cap on the salaries of public sector employees and the lifting of the cap on already over-remunerated bankers is the wrong way for the Government to go. I agree with the statement made last week by the former deputy governor of the Bank of England, who my hon. Friend has just referred to. He said:
“The British government should raid the banks for tens of billions of pounds to fill a black hole in the public finances”.
He argued that the combination of rising interest rates and the money printed as part of quantitative easing has handed banks windfall profits. Those profits are going towards increased bonuses, which is totally unacceptable. Surely the banks and the financial sector should work for the common good, rather than for the private interests of a handful of very wealthy people. I will now make way for the Minister, and I look forward to him attempting to defend the indefensible.
Judith Cummins (in the Chair)
Just so Members are aware, the debate will finish by 4.40 pm.
The Economic Secretary to the Treasury (Andrew Griffith)
It is a pleasure to serve under your chairmanship, Mrs Cummins, and I congratulate the hon. Member for Hemsworth (Jon Trickett) on securing the debate. I accept that he is sincere in bringing forward his concern and that of his constituents, but we on this side of the House believe that he is sadly wrong.
In responding for the Government, I am grateful for the opportunity to lift the lid on what is an important but often misrepresented issue. Let me be unequivocal from the outset that the Government are unapologetic about our commitment to the financial services industry, which stretches across the whole of this great nation. If the hon. Gentleman cares to talk to his Front-Bench colleagues, he will find that the policy of both Front-Bench teams is to support the sector in order to help grow our economy and create the prosperity from which we all benefit.
Andrew Griffith
I will happily do so. Perhaps we will hear more about the policy of those on the Opposition Front Bench.
Jon Trickett
Does the Minister accept that I am not speaking on behalf of my Front-Bench colleagues? I am speaking about the views of my constituents and others across the country, and in the interests of what I believe the country should be doing. The Government are clearly wrong, whatever those on the two Front Benches are proposing.
Andrew Griffith
It is always a pleasure to hear a Member of this House speak on behalf of their constituents, which is indeed what we are here to do. I stand corrected by the hon. Gentleman: this debate is not about the policy of Opposition Front Benchers. I just thought it was worth setting that in context, because where there is consensus, we should build on it. I understand his views, but the scale of the sector’s contribution to the United Kingdom is truly massive.
Financial and related professional services, and all those that are engaged in the support functions, make up 12% of the UK’s gross value added—12% of the economy. That is millions of jobs, and not just in the City. Indeed, I actively push back against the idea that I am the City Minister, because that is not the case. The financial sector has to build bridges and reach into every household across the country. To that point, the hon. Gentleman is probably aware from talking to his constituents that there are 145,000 jobs in the financial sector and related industries in Yorkshire and the Humber, and long may that continue. Those are the sorts of high-quality, high-skilled jobs that I am sure he seeks for his constituents, for our generation and for generations to come.
The sector produces prodigious amounts of tax revenues—billions of pounds—without which our public services would be in peril. Because of the financial services sector, I can look our hospitals, schools, police, fire services and all of our brilliant, fabulous public servants in the eye. The hon. Gentleman might tell us that they do not get enough revenues, but one of the ways in which we can continue to make sure that they are sustainably well financed is on the back of the very bankers he decries, and my mission is to continue to grow this wonderful sector.
I return to the subject of the debate: the bonus cap. Although many people are confused about what the bonus cap is, I know that the hon. Gentleman has followed this topic and is not confused. It is not a cap on bonus pay. If he would like to introduce such a measure, Parliament offers many wonderful opportunities for him to do so, including ten-minute rule Bills and Backbench Business debates. If he would like to propose a cap on bonuses, I am sure that the House would be keen to hear more about how such a cap would work.
I think the hon. Gentleman knows that what we are talking about is not a cap on bonuses whereby fixed pay is inflated and bankers are paid the egregious amounts that he talks about. This did no such thing. It was simply about the composition of pay and how much of it is geared to performance versus a mere entitlement or fact of contractual law. It has never been a cap. The EU directive that the hon. Gentleman talked about relates to the ratio of fixed pay to bonuses. At no point has there been a cap. To be in favour of the status quo is actually to be in favour of higher basic salaries for bankers. Perhaps we should have renamed this debate, “The debate about higher basic salaries for bankers.” We may have got more bankers to come and watch, but I am not sure how many hon. Members would have clamoured to support a debate about higher basic pay for bankers. This is a really important point. The hon. Gentleman himself raised the fact that since this so-called cap was introduced, we have actually seen an increase in pay. If it was a cap, by its own definition it has failed.
The consequence of all this is that by removing restrictions, more of bankers’ pay can be performance-based. If they do not perform, perhaps their salaries will go down and perhaps the hon. Member’s objectives would be achieved by the very measure the Government have advocated. We would be removing the insistence on higher fixed pay, and more of it would be based on performance. If they do not perform or grow the economy, and if they do not contribute the near 50% share that the bankers will typically be paying in tax to our nation, then their salaries will go down. I would offer that to the hon. Gentleman as a reframing of how he thinks about this.
This is a common remuneration structure, not just in this sector but elsewhere in the economy. It is how many industries align performance and incentives in a sensible way. I have heard the argument that removing what we have now established as a so-called bonus cap will see a return to the bad behaviour and perverse incentives that led to the global financial crisis. The hon. Gentleman was there at the heart of that in No. 10, and I can understand that experience, but things have moved on—not just in respect of this cap, but the fourth European directive.
At that point there was no broader remuneration framework for bankers. They could get their entire variable pay on the day it was awarded. There was no element of deferral or additional regulatory requirements, such as those imposed by the Prudential Regulation Authority and the Financial Conduct Authority, to require a significant proportion of variable remuneration to be deferred for a number of years. In those years, firms are able to revisit performance and material events or misconduct and then take account of those within the remuneration framework. Since the hon. Gentleman’s service in No. 10, we have seen the introduction of the senior managers regime, which has even greater accountability.
The point is that the regulatory structures have evolved. They were right to evolve in the aftermath of the global financial crisis, but the reforms that work do not include this arbitrary and variable remuneration ratio.
Jon Trickett
The Minister will have heard me talking about a person in the City being remunerated £68 million in a single year. Of that, £200,000 was the basic pay, and the rest was bonus. I think the Minister is resting his case on the expansion of basic salaries, but that is not the case for that person. It would take the average person in my constituency 2,260 years on an average salary to achieve what that person achieved in a year. Is that possibly morally justifiable?
Andrew Griffith
The hon. Gentleman needs to make peace with the benefits of a capitalist, free-enterprise, private, risk-taking economy. I understand that that is a certain distance for the hon. Gentleman to travel. Perhaps we do not have enough time this afternoon for the hon. Gentleman to travel all that distance. By his own admission, he chose the most extreme of the most extreme cases. I celebrate, because in that example, his, mine and your constituents, Mrs Cummins, would be better off to the tune of £34 million, from that single, most productive of financial services employees in that year putting that money back into the Exchequer. I sincerely hope that is absolutely the case, because the Government have made a great endeavour to collect all the tax revenues owed.
I will shortly conclude, but earlier the hon. Gentleman seemed to decry the fact that seven out of 10 of the most highly paid bankers in Europe were based in London in the United Kingdom. I think the very opposite. The Government’s view is that, if not seven, it should be eight, and that we should seek to obtain those revenues and grow our economy, reinvesting in the productive and public services.
At the beginning, the hon. Gentleman made great play that this was one of the few surviving measures of the mini-Budget, the then growth plan. I cannot leave that lying on file, because the biggest single measure, which all our constituents benefit from right now, as the nights grow colder and the temperatures plummet, was the £60 million—
Andrew Griffith
Sixty billion pounds—a little more than bankers’ pay. That is now flowing into individuals’ heating, fuel and energy bills, protecting every one of our constituents, up and down the United Kingdom. This was not the sole surviving measure that the hon. Gentleman talked about. This was a sensible measure, part of taking an inherited European rulebook that never fitted the fact pattern of the United Kingdom. That is why the Bank of England and the Liberal Democrat part of the coalition all made great protestations at the time that the fourth European capital requirements directive was introduced, because it did not fit the unique fact pattern of the United Kingdom.
Let me conclude. I pay tribute to the hon. Gentleman for bringing these matters to the House. It is absolutely right that we talk about this and understand how we are going to drive our economy forward in the fairest possible way. The City, I hasten to remind him, has a significant duty to society, and must be connected to every part of the United Kingdom, even our wonderful Administration north of the border. The Government’s position is that the measure is the right one. The hon. Gentleman asked whether the Government stood by that. It is the case, because we want a productive economy and people to be paid what they earn, but no more than is warranted. That is why we continue to stand by the measure.
Question put and agreed to.
Cryptoasset Promotions in Sport
(2 years ago)
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Aaron Bell (Newcastle-under-Lyme) (Con)
I beg to move,
That this House has considered cryptoasset promotions in sport.
It is a pleasure to serve under your chairmanship, Mrs Cummins. I thank Mr Speaker for granting the debate and welcome the Minister to his place. The debate was originally set to be held on 13 September, but the very sad death of Her late Majesty the Queen meant it was rightly postponed, until today. I should also mention the hon. Member for West Dunbartonshire (Martin Docherty-Hughes), who pipped me to the post in securing the first parliamentary debate on regulating cryptoassets, which took place on 7 September. That was a very well informed debate, which I read in Hansard. While acknowledging the opportunities that blockchain can present, it foreshadowed some of the issues I will talk about today.
As the Minister and I heard just last night in the Adjournment debate led by the hon. Member for Birmingham, Ladywood (Shabana Mahmood), our sports teams occupy a very special place in our communities. The fans have a special bond with their clubs that goes far beyond being a customer or a consumer. Their loyalties are passed down through generations, and the shared memories of league titles, cup finals and spectacular upsets bond families and communities together in tribal loyalties towards those clubs.
When an individual club or sport as a whole takes its fans for granted or seeks to exploit them, those bonds are not only frayed, but lasting damage can be done to the community as a whole. It is for that reason that the fan-led review, chaired by my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch), is so important, as we also heard last night. It is also for that reason that I urge the Minister and the Football Association to crack down on some of the cryptoasset promotions I will discuss today. Many have been almost entirely exploitative and have traded on fans’ love for their club and on the susceptibility of some of those fans, particularly young men, to speculative get-rich-quick schemes.
Cryptoassets are the ownership of a digital entity, whether a currency or some sort of collectible. The formal Government definition is:
“A cryptographically secured digital representation of value or contractual rights that uses a form of distributed ledger technology and can be transferred, stored, or traded electronically.”
That definition includes things like bitcoin, the currency, but also tokens that can be traded among people, which is where a lot of the current problems in sport lie.
We could debate on a moral level the fundamental value of such cryptoassets—it is my contention that many I will describe today have zero value—but what is apparent is that their value and their price is often not the same thing. Their prices can be very volatile, which is partly why they have proved so attractive in the field of speculation and in encouraging people to speculate.
In general, the crypto space is growing. There are potential economic benefits to some uses of blockchain technology and I cautiously welcome the Government’s announcement of April 2022 to
“make the UK a global cryptoasset technology hub.”
However, the field urgently needs better regulation, and the need for regulation comes from the potential risk of people losing all their money. The Financial Conduct Authority has said that consumers should regard such investments in crypto as high risk and speculative and that people
“should be prepared to lose all your money”.
The speculation surrounding cryptoassets, with prices often far exceeding any possible intrinsic value, brings to mind previous bubbles, going back to tulip mania. All of these bubbles are examples of the greater fool theory—the idea that someone might pay for an overpriced asset, knowing it to be overpriced, but they hope to sell it for even more to the so-called greater fool, to make a profit. The modern terminology used in forums to boast, by those who get involved in these schemes—the so-called crypto bros—is pump and dump, and the most effective way of pumping a cryptoasset seems to be the endorsement of a sports club or a sports star, which is also known as crypto-washing.
By endorsing these speculative assets and by letting themselves or their players be the pumpers of the assets, clubs are potentially putting their own fans in the role of the greater fool, which is something they do at considerable risk to their reputation and the long-term bonds I spoke about a moment ago.
In calling for better regulation of cryptoasset promotion in sport, there are four significant areas of concern, and I offer my thanks to the journalist Martin Calladine—@uglygame on Twitter—for the taxonomy. I will come to them in turn. They are the misleading promotion of the assets; the lack of consumer protection; the lack of due diligence by the clubs entering into deals; and the problematic nature of their attempts to monetise fan engagement with the clubs.
As I said, I will start with misleading promotion. The widespread and often misleading promotion of crypto has helped it to make it into the mainstream. It minimises the risks involved in so-called investing—in many cases, fans just spending their money on this product. Many sports teams, players and, now, leagues have made or are in the process of making deals with companies in the crypto sector and are using their own social media—clubs or players—to push these items on to people who might not otherwise have been aware of them. We know from FCA research that more than 70% of people are not very aware of what crypto is, but we also know from the same research that 10% of people, as of June this year, have held or currently hold a cryptoasset. That is up from 5.7%, I think, in January 2021, so this is clearly a growing space.
I have also talked about fan tokens: digital assets that allow holders to access a range of alleged benefits. A fan token is a fully fungible digital token giving fans some influence over certain decisions made by a sports team. Quite how valuable that influence is I will come to later, but the fan tokens themselves usually require an intermediary step of buying cryptocurrency to purchase the fan token, thus exposing the fans to the whole world of cryptocurrency and not just the alleged benefits of the fan token. Of course, both the tokens themselves and the cryptocurrency can be traded as a speculative asset.
A few years ago, barely any football clubs were doing anything with crypto. Now, nearly every single club in the top four divisions either has a crypto partner or—in a few rare cases—has turned down the offer to sign one. Cryptoassets are of course often promoted as a new and exciting opportunity, and the potential downsides are glossed over or downplayed. For example, last year Southampton football club promoted a crypto “education” website by its crypto partner, Yolo Group—Yolo presumably standing for “You only live once”. The content of that website is utterly one-sided and totally inadequate. It is just propaganda rather than education, and it is biased wholly in favour of crypto. For example, its “what is cryptocurrency” page states that €1 invested in bitcoin in 2009 is worth €60 million in 2021—without any recognition whatever that that is no guide whatever to potential future returns from any currency, let alone bitcoin or the one that it is promoting.
Socios, the largest and most famous provider of so-called fan tokens, has repeatedly marketed its products in the UK without proper acknowledgement of the risks. If we look at a recent deal that it did with three English rugby union clubs—Harlequins, Leicester and Saracens—we see that it is clearly promoting the claim that fans can access an exciting new opportunity. Only on a separate webpage, at the very bottom of the frequently asked questions does it say:
“You should not purchase any cryptoassets if you do not fully understand the nature of your purchase and the risks involved.”
Not only are those risks not identified properly, but the benefits—most notably the potential financial returns—are hyped up.
This in particular was the subject of so many complaints that the Advertising Standards Authority drew up new crypto-marketing rules with specific reference to Socios. The ASA ruled in December 2021 that Arsenal FC
“trivialised investment in cryptoassets and took advantage of consumers’ inexperience or credulity”
in a promotion of its Socios fan tokens featuring three first-team players.
Despite my misgivings about its product, I am grateful that Socios engaged with me prior to this debate, and I should say that its official position is that it does not
“market fan tokens as investments. The purpose of tokens is to give fans new ways to engage with their club, be entertained by it and to win rewards that can’t be gained anywhere else… Our marketing materials include warnings about the risks of purchasing fan tokens for any other purpose.”
In the discussion that I had with it over Zoom, it acknowledged that it has come some way, but I still feel, fundamentally, its product is not really worth anything in particular to anybody. I will come to some of those alleged fan engagement benefits later.
The second problem that I would like to turn to is the lack of consumer protection. This is still a very unregulated space—a wild west—leaving fans with no recourse if the scheme collapses or is subject to fraud. I think there is a comparison here with the Football Index scandal, which I raised in this Chamber a few months ago. I mentioned crypto at that point, which is what ultimately led to this debate today. Again, there was no recourse for people who had lost all their money. They were led into believing in something that was regulated in that case, through the Gambling Commission. It turned out it was not, and it has been a real struggle for people to get their money back. There is even less protection in this space, given that the FCA has not regulated firmly yet.
To see the impact on the consumer, we should also look at the profile of the consumers. Socios’s own data shows that 50% of its users are aged from 24 to 34. As with Football Index, those young people interested in crypto are usually men. They usually do not have a traditional finance background and they find crypto attractive because it does look like an opportunity to get rich quick. That is precisely why the companies in turn look towards sports teams and sports players alike—because they have a huge following among young men that they can sell the emperor’s new clothes to.
Numerous non-fungible token schemes, having been pumped and dumped—again, fitting in with the greater fool theory—have rapidly lost almost all their value. The investigations writer for The Athletic, Joey D’Urso, who is here today, has covered the topic very rigorously and has set out how these schemes have infiltrated top-flight and lower-league football. He has shown how so many of them have depreciated substantially in a very short space of time, to the disadvantage of the fans who were encouraged to get in at the beginning.
Of the 20 football clubs in last season’s premier league, all but one had at least one cryptocurrency sponsor, and some had several. As I said earlier, the assets are very volatile, so much so that we have seen multiple crashes of the cryptoasset bubble, most recently a few months ago. In June 2022, bitcoin was down 70% from its all-time peak in November 2021, but at least it still has some value. Compared with when the deals were originally signed, the value of nearly all cryptoassets linked with premier league clubs tanked over the course of last season. Some have gone bust completely. Companies such as IQONIQ and Sportemon Go have collapsed totally, which has wiped out the value of any investments fans have made. IQONIQ had deals with Crystal Palace, La Liga in Spain, the McLaren Formula 1 team and several leading European football clubs.
The schemes partner not just with sports clubs but, as I have said, with players. Most infamously, perhaps, the former England and Chelsea captain John Terry launched the Ape Kids Football Club NFTs on 2 February 2022. If hon. Members were not on Twitter, they might have missed that, but those were cartoon monkeys being sold, initially, for an average price of $665—that was the early peak. They were literally cartoon images of monkeys. They are all slightly different, and buyers allegedly own their particular one, but, of course, anyone can just take a screenshot and claim that they own it too. As the scheme was going well, other footballers endorsed Terry’s project. His former teammates Tammy Abraham and Ashley Cole also posted them on their social media pages. Predictably enough, within a month those NFTs plummeted in value by 90%, and Terry’s former colleagues quietly deleted their tweets of support.
It seems to me that cryptoassets and fan tokens are the only unregulated business that those in the sports industry are willing to endorse to their fans. If a club was sponsored by a chocolate bar, for example, the chocolate bar would be tested and regulated by the Food Standards Agency. More to the point, consumers of that product would be protected by the law. There is nothing like that for crypto: no trading standards, no industry ombudsman, no FCA regulation, no fit and proper persons test and, in the event of a suspected crime—some of these cases are probably criminal—no great likelihood of any police action. In fact, the closest we have come to regulation is the Advertising Standard Authority’s new rules, which I referred to earlier. It should not fall to the ASA to be an ersatz regulator in this space.
I recognise that the FCA is doing work through its cryptoassets taskforce, and that is a matter for the Treasury, but sports bodies themselves need to do more. That is why I am grateful that we have a Minister from the Department for Digital, Culture, Media and Sport here today. I am grateful for his attention.
The third issue with cryptoasset promotion in sport is the lack of due diligence by those who do deals around such investments. The large sums of money on offer, combined with the opaque nature of many of the schemes, has exposed the low quality of due diligence. Football clubs are routinely doing business with crypto schemes that fans cannot interrogate, and clubs themselves often make no effort to assess their partners’ integrity.
In yesterday’s Adjournment debate, I referenced the example of Birmingham City’s ill-fated tie-in with Ultimo GG, but perhaps the most unbelievable example is the story of Manchester City and a company called 3Key. Man City has been at the forefront of football’s crypto sponsorship revolution. This time last year, the club announced 3Key as its new crypto partner, only for it to drop the company within a week when it came out that nothing about the company—even the fact that it existed—seemed to be true.
Again, Martin Calladine had the story. He established that 3Key was actually the new name for a massive, rolling crypto pyramid scheme. Man City subsequently refused to discuss the partnership or reveal what due diligence had been done, which for Mr Calladine left some serious unanswered questions. If the club signed a deal with what was, in effect, a criminal gang, and did not take any steps to establish who it was dealing with, it seems obvious that there are money laundering issues. In his article, Martin writes:
“The question is how could City not have noticed when literally just 15 minutes of googling would’ve been enough to establish that 3Key were not who they claimed to be…They didn’t have, or wouldn’t give me, 3Key’s address, company registration details or even their telephone number. If you were a junior estate agent who rented a flat to someone on this basis, you would get fired. If City actually accepted money from 3Key without having verified their identity, then this could be a breach of money laundering regulations.
In essence, it appears that it is only by luck that Man City failed to become party to a massive fraud, which could’ve severely harmed their own fans.”
I spoke to a number of clubs in the lead-up to the debate. I wanted to establish their intentions in making partnerships with crypto companies. The official line is frequently fan engagement, which I will come to shortly, but I have been told another reason: commercial reality. That applies in particular to clubs that are not at the top table—those outside the gilded land of the premier league. We know from previous debates, and from the work that so many people have done to save their local football clubs—I think of my hon. Friend the Member for Bury North (James Daly)—that it is difficult for those clubs to balance their books. Clubs are keen to get sponsorship. One club told me that crypto companies often offer five to six times more than other companies normally would. I therefore completely understand the temptation, perhaps even the necessity, to take what is on offer, particularly for clubs on the financial brink, as many are. However, that should not mean that a comprehensive appraisal of such companies—true due diligence—does not take place.
The fourth and last problem I want to raise is the issue of attempting to monetise fan engagement. The promotion of crypto as an alternative way of letting fans contribute, through tokens, is encouraging clubs to monetise fan engagement and replace the genuine consultation that many have pioneered over the past 20 or 30 years with a deeply flawed pay-to-have-your-say model.
Many clubs and crypto businesses that I have spoken with say that their main intention is fan engagement. For example, Manchester United, which has an official blockchain partner, Tezos, provided the following comment:
“Blockchain is a hugely exciting area of technology which, over the long-term, has the ability to revolutionise the way in which we digitally engage with our fans.”
On the intentions of crypto companies, Socios stated:
“We are the leading fan engagement and rewards platform in the sports industry. Through digital utility tokens, known as Fan Tokens, we are creating a new form of digital membership for sports fans around the world.”
Sorare, a French start-up digital entertainment platform that is allegedly lining up an NFT deal worth £30 million a year with the Premier League itself, provided this comment:
“Our platform connects fans with their passion for sports.”
The crypto businesses and the clubs profess that the deals are based on fan engagement, but what do the fans think? I met the Football Supporters’ Association, which gave me the following comment:
“We’ve seen a lot of clubs and players entering into partnership with crypto providers including those selling tokens which provide ‘engagement opportunities’. We don’t think supporter engagement should be monetised—if an issue is important, clubs should consult with their fans as outlined by the fan-led review of football governance…Fan loyalty is something to be cherished, not exploited.”
When we look at the fan tokens, a large number are owned by traders and not fans of the club. There is no limit to the number of tokens people can buy and therefore no limit to the number of votes they can have, and there is no limit to the number of clubs they can hold tokens in. When we look at engagement with polls, the turnout is rarely more than 20%, and the polls themselves often cover ludicrously trivial matters. There was even one that asked token holders to vote on which player’s washbag they wanted to see inside.
Tellingly, when the decision is really important, clubs have recognised that a vote via NFT is not appropriate after all. Aston Villa announced last Friday that it wanted to redesign its crest. That is a pretty fundamental thing. I remember that when Chelsea redesigned its crest, there was prolonged fan engagement. Aston Villa has launched a vote for season ticket holders and members, despite having an arrangement with Socios. To my mind, that eminently sensible decision gives the lie to the idea that the tokens are primarily about engagement rather than speculation.
What would go towards fixing these four interlinked problems? The answer is pretty simple: better regulation. That can happen on two fronts: better statutory regulation by the Government, with the Treasury and DCMS working together, and better self-regulation by governing bodies and leagues.
The independent fan-led review of football governance, overseen by my hon. Friend the Member for Chatham and Aylesford, called for a new independent regulator for English football and made many recommendations, which I endorse. My hon. Friend sits on the Science and Technology Committee with me, and she picked up on precisely the issue I am raising today during the evidence session we held on blockchain on 29 June this year. She asked David Gerard, a journalist and author who has written extensively on blockchain:
“Given the volatility that you have spoken about and we have heard about in terms of cryptocurrency and crypto cash and the volatility in football finance, surely this will create the perfect storm or disaster of which the fans of those clubs, who are buying NFTs, for example, will be the victims.”
David answered:
“The fans end up being the victims in this financial issue; they are the public interest here.”
As politicians, we should be mindful of the public interest at all times.
Unfortunately, my hon. Friend is away on other business and was unable to make today’s debate. I know she wanted to be here. I pay tribute to her both for the fan-led review and for her tenaciousness on this topic. The Government published their response to the review’s recommendations in April 2022, saying that they would seek to implement the proposals. I note the Minister’s words at the Dispatch Box last night about the matter. It is my hope that the problems of crypto in the sport of football could fall under the remit of the independent regulator for English football.
The FSA suggested ways to address these problems at its 2022 annual general meeting, and I hope the Minister takes those away. They include engagement on common self-regulatory standards for any cryptocurrency partnership entered into by a football club, so that we see some genuine self-regulation in the sport of football; an information awareness campaign for football fans advising them of the risks to their capital; lobbying of the Government for statutory regulation—I suppose I am ticking that box today—and better due diligence by football clubs before entering into deals, including engagement with their supporters, supporters’ trusts or fan groups before they issue any promotional material aimed at their fans.
I hope today’s debate will have helped raise the profile and, more importantly, the reality of crypto in sport so that fans and, more importantly, the senior actors in this space think twice. The Premier League really should review that proposed £30 million deal with Sorare. Is that really what it thinks of its fans? If the Government are serious about looking to make the UK a global cryptoasset technology hub, they need to work with all the relevant actors across all sectors to ensure that we have both statutory regulation and self-regulation, but that need is perhaps most urgent in sport.
Jim Shannon (Strangford) (DUP)
For the second time today, I am pleased to serve under your chairmanship, Mrs Cummins. I congratulate the hon. Member for Newcastle-under-Lyme (Aaron Bell) for leading the debate, and for his contribution to last night’s Adjournment debate on the financial sustainability of football clubs in England. It was an excellent debate. The Minister was there to respond to it, and I know that he is biting at the bit to respond to this debate, too. I am genuinely pleased to see him in his place; we have all grown fond of him, and we know that we will be more than pleased with his response.
I spoke in the recent Westminster Hall debate on the regulation of cryptoassets. It was clear from the contributions of all Members that there are real concerns surrounding the impact that “online money” can have on society. There is uncertainty; people have invested and been caught out. I understand that the figures for crypto investment are higher as a proportion of the population in Northern Ireland than anywhere else in the United Kingdom. There is an interest for us there, although I am not aware of any football teams or other sporting organisations in Northern Ireland that are involved. That does not mean that they are not, of course; I am just not aware of them at the moment.
As the hon. Member for Newcastle-under-Lyme rightly stated, cryptoassets are becoming more prominent in sports, which are a major source of enjoyment for many in the UK. It is great to be here to discuss these issues. The hon. Gentleman has an incredible interest in and knowledge of this matter, so I am pleased that he has set the scene so well. Sports as an industry has realised the potential that cryptocurrencies and blockchain technologies can bring to further monetise fan engagement, attract sponsors and engage a global market in ways that were unimaginable decades ago. However attractive that may be, it is not always safe, and that is what I want to focus on. I know that the hon. Gentleman has already done so, and we look forward to the Minister’s summing up.
As far as I am aware, there are currently no sports clubs in Northern Ireland enabling the use of cryptoassets; I stand to be corrected, but I am pretty sure that that is the case. As of 6 August, Oxford City became the first football club in the United Kingdom to accept bitcoin for matchday tickets. In March this year, as the hon. Member for Newcastle-under-Lyme referred to, Manchester City announced a global partnership with one of the world’s largest crypto exchanges, OKX. We have seen incidents in the past where similar online products, such as bitcoin, have proven dangerous but at the same time appealing, as they pose as get-rich-quick schemes. It is a bit like doing the lottery on a Saturday. If anyone is as successful as I am—I have not done it for a long time—they will never get anything.
In 2021, Football Index went bust after its contractor suspended operations, and it was revealed that customers could lose up to £90 million. I remember that well; it was incredibly scary. For some people, it was a get-rich-quick scheme, but it did not work out. Similarly to cryptoassets, these types of investment companies sound fantastic in theory, as people are told that they will make money quickly and profits will increase over time, but it becomes clear that that is not always the case; indeed, many end up losing their life savings. As the hon. Gentleman referred to, and as he reinforced in last night’s Adjournment debate, many in sports clubs find themselves in incredible difficulty. Many clubs were mentioned last night—the Minister mentioned some of them—and there is a need to have them regulated.
Our sporting industry in the UK is so loved by so many. In my constituency, crowds gather every weekend to watch local football matches, and teams of all ages compete in different leagues, tournaments and cups. We have seen the excitement of fans ahead of the 2022 World cup. There are massive calls for a greater review of the Gambling Act 2005, and for a deeper look at blockchain technology—the quicker the better—which allows participants to review transactions made in digital currency without the need for a central clearing authority. Something is just not right about that, and I hope the Minister will listen to our concerns and give us some encouragement.
We have the Financial Conduct Authority to ensure that things are done correctly, but sometimes, as technology advances and rolls on, it is hard to keep up with all the things that are happening. Unfortunately, the promotion of cryptoassets by sports teams poses new, unheard-of regulatory challenges. The Chancellor must take that into consideration and ensure that cryptoassets are brought into financial regulation. I think that might be a solution; it would certainly give us some peace of mind. Some athletes in the United States are already getting part of their salary in digital money or shares. Cryptoassets must be held to the same high standards for fairness to consumers.
Let me conclude my contribution to this worthwhile debate by saying that this is an issue that we must aim to address UK-wide. The issue will be dealt with at Westminster but it is important that the regional Administrations are kept on board. The Treasury must put the correct provisions in place to ensure our constituents’ financial security. Cryptoassets are becoming incredibly popular, and not just in sport; many employers are considering them as a payroll method—talk about taking a chance with your pay on a Friday night. If we cannot stop this, it is important that we at least take the correct steps to ensure that it is done in the right way.
I am pleased to see the Minister in his place, but the discussions need to take place with the Chancellor and the Minister with responsibility in DCMS. I hope that the Chancellor will maintain regular contact with DCMS Ministers and with the economy Ministers in the devolved Administrations to ensure that all efforts are made to keep up to date with cryptoassets and their impact on our sporting industries. We cannot rule out, either, the role of the Home Office and the police in this matter—I think it is at that level. Some people have done well out of cryptoassets, but many people have not. We need to protect them, and protect the clubs, too.
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
It is good to see you in the Chair, Mrs Cummins. I thank the hon. Member for Newcastle-under-Lyme (Aaron Bell) for securing the debate, which is important not only because it dovetails with the debate that I secured two months ago, but because I agree with most, if not everything, that he said.
I began my speech two months ago by declaring my interest as chair of the all-party parliamentary group on blockchain, which has done a most excellent job of examining and understanding the blockchain—or, as I like to call it, distributed ledger technology. I remind Members who were not in that debate—the hon. Member for Strangford (Jim Shannon) was—that cryptoasset promotion in sport was one of the first things I touched on.
Something of a watershed was reached during the January Super Bowl in the United States, as cryptoasset ads took up a large chunk of the lucrative half-time advertising. The adverts starred such Hollywood luminaries as Matt Damon and Larry David. A cross-platform, cross-interest advertising nirvana was reached as some of the most trusted personalities were crossed with some of the most trusted brands in American life. The cryptoasset companies that paid for those lucrative spots surely hoped that would impress the hundreds of millions of viewers in the United States and across the world.
Although I used the Super Bowl as my example in my previous speech, I could have gone for other examples closer to home. After the National Football League, the most lucrative sports competition is the English premier league. As the hon. Member for Newcastle-under-Lyme alluded to, there is no shortage of crypto sponsorship there, either. Most if not all clubs have tie-ins as a secondary or main sponsor. Quite simply, sports teams provide perfect synergies for advertisers. Unlike most institutions that command national and international respect, they are open to commercial partnerships, exchanging the cachet that their brand commands among millions of people for handsome pecuniary rewards.
It would be fair to say that issues of morality or due diligence have not always come to the fore when making commercial partnership decisions, as exemplified by the hosting of the world’s largest sporting tournament this month in a tiny yet fabulously wealthy sliver of the land in the Persian gulf, or in the way that one of English football’s most traditional clubs was purchased last year by a group close to the Saudi royal family. I would not ask Members to just take my word for it. The Financial Times, in an article examining the relationships between sports and crypto, said that
“the love affair between sport and crypto appears to be a perfect match, as franchises can deliver a wider audience within the demographic that digital asset players want to reach.”
The article also came up with the astonishing figure of $600 million spent by crypto firms worldwide on sports sponsorship last year, which is up from just $25 million the year before. That is an incredible growth that really demands further examination by anyone interested in issues of consumer protection and good governance, as the hon. Member for Newcastle-under-Lyme mentioned. The risks are obvious, and I will quote the Financial Times article from 27 May one last time to demonstrate that.
“Ronan Evain, executive director at Football Supporters Europe, a prominent fans group, pointed to the risks of ‘an unregulated financial product’. He said teams and players backing crypto assets were ‘considerably irresponsible’, as such tie-ups were aimed at ‘building the legitimacy of the product for an audience that wasn’t necessarily familiar with it’.”
That essentially gets to the nub of my debate in September —the grey areas that are allowed to flourish in the regulation vacuum, the lack of clarity around so many of the products that are being offered, and then the resulting fertile ground for the outright scams that will inevitably follow.
To give just one example, the—how shall I put this—lack of attention to due diligence given by many sporting brands has already resulted in pretty shocking examples of fraud. Take the example of Sportemon Go, something that described itself as an
“NFT-augmented reality sports trading platform”
when it signed deals to appear on the kits of two Scottish Premiership teams, Rangers FC, which I know the hon. Member for Strangford supports, and Hibernian FC, which I know my right hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford) is a big fan of. The company collapsed earlier this year after seeing the value of its proprietary “SGOX” token reduced to zero.
That is far from the only example of bizarre cryptoassets being lent a sheen of respectability by our own beloved sporting brands. The Guardian reported last year a press release from English champions Manchester City that trumpeted:
“We are excited to partner with 3Key”,
which I think the hon. Member for Newcastle-under-Lyme already mentioned,
“in their journey to simplify the decentralised finance (DeFi) trading analysis user experience through the power of football to engage with our fans with a range of content and activations.”
While that sounds like the marketing babble that most sports fans are used to, the real story was that 3Key lacked what could be called a digital footprint. It was unclear what services and products it sold, and where it was regulated. Websites associated with the company then went offline, and the club had no choice but to suspend the partnership. I could go on, but we have also heard plenty of examples from elsewhere today. I think there is a broad agreement that something needs to be done.
The Financial Services and Markets Bill, which has just finished in Committee—I was on the Committee myself—could have been one such avenue for regulation. However, to go back to the arguments that I made in my own debate two months ago, there is no legislation needed to clamp down on the worst excesses and sharp practices employed by some of those companies. That said, particularly when it comes to sports clubs—and individual athletes, a subject I have not really mentioned—there is plenty of evidence to suggest that the Government could be doing a lot more to protect institutions that ultimately command so much respect in our communities from the worst excesses and temptations that these sorts of bubbles can bring.
There is only one professional sports team in my constituency of West Dunbartonshire, Dumbarton FC—or the Sons, as they are commonly known—and they are celebrating their 150th anniversary this year. There used to be two, but my hometown team of Clydebank FC folded in 2003 after poor financial decisions were taken by the previous owners, so I know, at first hand, the importance of these brands to communities. Thankfully, the Bankies are now climbing up through the leagues and got into the Scottish cup last year, for the first time since they folded, and I was delighted to be there.
We need to make sure that our communities and constituents are protected from the worst excesses of what I would call unregulated capitalism. When the Minister, whom I congratulate on coming back into Government—I know he is all over this and crypto is way up there at the top of his agenda—rises to his feet, will he therefore highlight the broad range of existing legislation that can deal with fraud and advise how the Government intend to work with sporting bodies across these islands to better understand why they are falling for this fraud and these scams? If necessary, as mentioned by the hon. Member for Newcastle-under-Lyme, perhaps the Minister could also lay out whether existing regulations need to be improved or new regulations need to be added to the statute book to protect consumers. I know that Members on the Opposition Benches would at least support him on that.
Jeff Smith (Manchester, Withington) (Lab)
It is great to see you in the Chair, Mrs Cummins. I congratulate the hon. Member for Newcastle-under-Lyme (Aaron Bell) not only on securing the debate, but on what I thought was an excellent speech that really set out the issues. I completely agreed with most of his speech, including, sadly, his criticism of the club for which I have been a lifelong season ticket holder, Man City. We have not covered ourselves in glory on this issue.
Some 2.3 million people in the UK apparently own cryptocurrency or cryptoassets, so it is no surprise that lots of sports teams have seen the financial opportunities and signed up for lucrative deals with the sector. In the USA, crypto sponsorships have been established across Formula 1, the Ultimate Fighting Championship and Major League Baseball, with major venue sponsorships as well. In the UK, most premier league clubs have some sponsorship links with cryptocurrency businesses and some clubs have launched their own non-fungible tokens. As we have heard, the Premier League has just signed a multimillion dollar deal with a blockchain company, Sorare, to deliver its own NFT collection. Alongside several major European teams, six premier league clubs have partnered with the company Socios, which markets itself as a fan engagement platform and also has links with rugby union. By purchasing fan tokens based on blockchain, fans are told they will have more of a say and can vote on club decision making, mostly on issues around the match day experience and so on.
There is a key question here for the clubs, not the businesses. The businesses are just in it for the money, but the clubs should be in it for more than that. In the wake of the fan-led review, if clubs really want to engage with fans and give them a say on these issues, they should do so. Why can they not do that without requiring their fans to sign up to spend money on cryptoassets? In this day and age, it is not hard for clubs to carry out that kind of engagement. Is it, as many of us suspect, just another way to exploit the loyalty and wallets of football fans?
Labour believes that fans should as a right have a say in the direction and decision making of their club, and that they should not have to invest in a cryptoasset to earn that right. I was reassured many times by the Minister’s predecessor, the hon. Member for Mid Worcestershire (Nigel Huddleston), that the Government are on board with all the recommendations in the fan-led review. When they come forward with the White Paper and the proposals, I trust that we will see some opportunities to clamp down on this kind of business and really promote genuine fan engagement by the clubs.
In December 2021, analysis commissioned by the BBC estimated that more £262 million had been spent on fan tokens through Socios. Some producers of football NFTs and fan tokens state that these cryptoassets were never intended as investments, which is fair enough. However, that is certainly not always made clear by all producers. It is clear that some people have felt encouraged to purchase these tokens as investments. If so, they are taking a risk. We have already heard about John Terry’s Ape Kids Football Club NFT collection, which was promoted by a number of high-profile football stars, and how the NFTs crashed in value and lost about 99% of their initial price. Several footballing figures have advertised NFT schemes on social media and then had to retract or delete their posts when the schemes nosedived and fans lost money.
As fan tokens are usually linked to volatile cryptocurrencies, which they provide an incentive to invest in, and are influenced by supply and demand, the value of those NFTs has fluctuated wildly. In November 2021, the crypto market was at its peak, with a valuation of almost $3 trillion; by June 2022, it had lost more than two thirds of its value. As we have heard, fan tokens pushed by premier league teams have often tanked in value. I do not think we have heard about this in previous contributions: the Advertising Standards Authority recently upheld a ruling against Arsenal for its promotion of Socios fan tokens in an advert. It found that the club
“trivialised investment in crypto assets and took advantage of consumers’ inexperience or credulity.”
We need some action and we need regulation. Labour is not advocating a ban on the ownership of cryptocurrencies. We recognise the opportunities they can create for our economy when done right. Proper regulation of cryptoasset promotions marketed to sports fans is clearly needed, as the hon. Member for Newcastle-under-Lyme set out.
I have some questions for the Minister. First, as I have asked many times of his predecessor, can he tell us when or if—I hope it is when—he will bring forward proposals for the independent regulator? Does he foresee an independent regulator of English football having any role to play in the regulation of cryptoassets in football? It might be that the FCA is the appropriate regulatory body. The FCA has indicated that it is working with the Government to target financial promotions and advertising in crypto as a priority. Can the Minister set out a timeline of when those reforms will happen and what the legislative vehicle for doing so will be?
I will conclude with an aside. In the week of COP27, we should probably note that cryptoassets are really bad for the environment. They require huge amounts of power and powerful computer calculations to verify the transactions. They are very carbon-intensive. Will the Government be clear with supporter bodies about at least the environmental impact of crypto technologies? I do not want to let COP27 week go by without mentioning the detrimental effect of crypto.
The clear message from across this Chamber today has been that this is a really worrying development for football fans. It is not something we need necessarily, unless the clubs and businesses are out to make money and at the expense of football fans. Regulation is clearly needed. That is the message from Members today. I hope the Minister will take that on board.
The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport (Stuart Andrew)
It is a pleasure to serve under your chairmanship, Mrs Cummins. I thank my hon. Friend the Member for Newcastle-under-Lyme (Aaron Bell) for securing the debate. It is clear that he and I share a passion that everyone should be able to enjoy sport safely. That is ultimately one of the things that has motivated him to secure this debate.
We both understand how important it is to protect the integrity of our sports as well as the fans, who are their lifeblood, frankly. In my first few weeks in this job I have been learning an awful lot, but I would say that in the last hour I have learned even more. I am certainly grateful for the focus on this very important area. It will be informing a number of areas I am currently looking at.
It is a privilege as the Minister for Sport to be able to champion a sector that means so much to so many fans across the country, plays such an important part in local economies and has such a rich history in each of our communities. We would all agree that for those reasons and more we should ultimately encourage innovation in sport. Innovations that can harness emerging technologies, providing both new commercial opportunities for sport and greater engagement for fans, should be embraced. That being said, any such innovations should be implemented responsibly, in line with any relevant regulation, and with transparency in how they are advertised and promoted.
As I mentioned in last night’s Adjournment debate on the governance and financial sustainability of English football clubs, fans are the lifeblood of sports clubs. That is why they were the first people I met when I took on this role. I met representatives from the Football Supporters’ Association as well as a number of club supporters’ trusts. I listened to their perspectives, because their needs must be understood and protected and should be central in any decisions we take. That way, we can ensure a sustainable, thriving future for sport in this country.
As part of the Government’s ongoing work on football regulation, we are committed to breaking the cycle of inappropriate ownership, financial instability and poor governance practices. I join my hon. Friend the Member for Newcastle-under-Lyme in congratulating and thanking our hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) for the amazing work she has done with her review.
However, engaging with fans’ groups goes wider than that, and the growing interest in, and promotion of, cryptoassets issued by sports clubs should clearly keep fans at the forefront. The enthusiasm of fans for sports memorabilia and collectibles is not new, and it is no surprise that this enthusiasm remains undimmed in the digital age through new technologies. It is clear to see that there is a hugely positive potential for cryptoassets in a fan market, with such a latent appetite for merchandise, memorabilia and other opportunities to show one’s colours.
A number of sports clubs and competitions have taken early steps into partnerships with cryptoasset businesses, or in developing their own assets. As we have heard, fan tokens have the functionality of making fans feel more immediately involved in their clubs on a digital platform by giving them a vote on matchday music or entering them into draws for signed shirts. Non-fungible tokens bring traditional collector opportunities into the 21st century, with opportunities to purchase digital cards. That can be at club level or relate to evolving digital assets that chart a team’s progress, such as the recent product launched by the sponsors of the 2022 World cup. Sponsor relationships can be as responsibly explored as any other corporate partnership—none of these alone represents a significant risk that needs to be mitigated—but as we have heard today, not all projects launched by the sector thus far have delivered on their potential or done so in a transparent manner.
As I have said, any promotions of cryptoassets in sport should have fans’ interests at their heart and must be transparent about any risks, and the sector should be mindful of that as it looks to further develop its digital offers. Cryptoassets should not be viewed in isolation from their wider relationship with a club’s fan base and our normal expectations of responsible corporate relationships. It is reassuring to see that clubs are being held accountable on that point—for example, as we have heard, the Advertising Standards Authority ruled that some of the adverts promoting Arsenal’s fan tokens through their partnership were “misleading” and “irresponsible”, with insufficient warnings of the risks involved.
My hon. Friend the Member for Newcastle-under-Lyme mentioned the incredibly damaging collapse of Football Index, which is an example of the four main problems that he has highlighted. Our independent review into the regulation of Football Index identified lessons to be learned by the Gambling Commission and the Financial Conduct Authority. The commission has taken action, including strengthening its approach to novel products.
As we have heard, cryptoassets can come in many forms, ranging from cryptocurrencies to non-fungible tokens. It is important to note that the Government are taking action on the regulation of cryptoassets and their promotion. In July, the Government set out our vision for the future of the financial services sector, which included a plan to ensure that the UK remains at the forefront of technology and innovation. That was one of the four key components of the vision, with the ultimate aim of building a financial services sector that continues to be one that the rest of the world looks towards.
The global and UK cryptoasset markets have evolved rapidly in recent years. In 2021, the FCA estimated that 2.3 million people in the UK hold cryptoassets—up from 1.9 million in 2020. The Government see enormous potential in this innovative market, which needs to be carefully balanced against the risks. We have set out our firm ambition to make the UK a global hub for cryptoasset technology and investment. We want to ensure that firms can invest, innovate and scale up in this country, and we have announced a number of reforms that will see the regulation of cryptoassets and aspects of tax treatment evolve. Our clear message to cryptoasset firms is that the UK is open for business, and these announcements are in line with our objective to create a regulatory environment in which firms can innovate while, crucially, maintaining financial stability and regulatory standards, so that people can use new technologies both reliably and safely. That is essential for continuing confidence in the financial system.
The Government established the cryptoassets taskforce in 2018, consisting of the Treasury, the Bank of England and the Financial Conduct Authority. The taskforce’s objectives include exploring the impact of cryptoassets and the potential benefits and challenges of distributed ledger technology in financial services, and assessing what, if any, regulation is required in response. To protect consumers, the FCA has banned the sale of cryptoasset derivatives to retail consumers. The Government launched a new anti-money laundering and counter-terrorist financing regime in this area in 2020. The Government will continue to monitor the wider cryptoasset market and stand ready to take further regulatory action if required.
The Government are taking action on the regulation of cryptoasset promotions. In January 2022, the Government published a response to a consultation on proposals to bring certain cryptoassets into scope of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, which would ensure those promotions are fair, clear and not misleading. The measure aims to improve consumer understanding of the risks and benefits associated with such purchases and to ensure that promotions are held to the same standards as financial services products with similar risk.
The Government have been clear that UK authorities are committed to supporting the growth of the sector in a safe and competitive manner. Certain cryptoassets are already subject to FCA financial promotions rules. A wider array of unregulated cryptoassets, such as bitcoin, are not subject to similar regulation for financial promotions. The Government’s proposed measure to expand the scope of the financial promotion order to capture qualifying cryptoassets will bring most of these unregulated cryptoassets into financial promotions regulation. That forms part of the Government’s staged and proportionate approach to such regulation, which is sensitive to the risks posed and responsive to new developments in the market.
As is already the case in the application of the financial promotions regime, the Government set the regulatory perimeter while detailed rules for the regime are determined by the FCA. The FCA’s consultation on its rules closed earlier this year and it will carefully consider representations from firms. The Government will continue to closely monitor market developments and stand ready to take further legislative action if required.
In summary, the cryptoasset market is an emerging and rapidly evolving one. This innovative market has huge potential, but that must be balanced against the risks. The Government are actively monitoring the cryptoasset market and stand ready to regulate where necessary. The same is true for cryptoassets in sport. There is potential for cryptoassets to enhance fans’ experience of sport and make them feel more a part of the clubs they love. However, their use by clubs must be responsible and transparent about any risks involved.
I absolutely recognise the four main problems that my hon. Friend the Member for Newcastle-under-Lyme highlighted. Misleading promotion, consumer protection, due diligence and fan engagement are interconnected factors that must be considered and addressed in the context of cryptoasset promotion in sport. The Government are happy to engage with the FCA and others on these issues in relation to our work on football governance and in respect of sport more broadly.
The Government will continue to monitor the use and promotion of cryptoassets in sport and will factor this into our considerations around the wider market and its regulation. I will certainly raise the important issues that have been highlighted today with my Treasury colleagues. I assure the hon. Member for Strangford (Jim Shannon) that I will ensure that the issues for Northern Ireland are highlighted. I will come back to the hon. Member for West Dunbartonshire (Martin Docherty-Hughes) on the current legislative options that may be available following the meeting I have with him.
I knew that I would be asked about the publication of the White Paper. As I said last night, it is a priority for me. I get how important this is to fans. I hope the hon. Member for Manchester, Withington (Jeff Smith) will understand that, as a new Minister, it is important that I get this right and take the time to consider all aspects that have been raised. We are committed to reform, and that will come. Once again, I thank my hon. Friend the Member for Newcastle-under-Lyme for leading this very insightful debate. He has certainly given me even more to consider as I make preparations for the White Paper.
Aaron Bell
It was a pleasure to speak in a debate where everyone seemed to agree with me, which is fairly unusual for this place. I thank the hon. Member for Strangford (Jim Shannon) for his kind words. He is right to emphasise the impact on our constituents. That is always at the heart of his speeches, whatever the topic—and he speaks on a number of topics. He is right that the public interest point, which I drew out in the quotation from our evidence session, should be at the forefront of what we are doing. It really is about the public interest, and the public interest in this case means the fans.
I am grateful to the SNP spokesman, the hon. Member for West Dunbartonshire (Martin Docherty-Hughes), particularly for highlighting that huge growth figure—from $25 million to $600 million in one year. Goodness only knows where it will be next year, though perhaps it will go the other way, given the scale of the crash that has been happening. He also gave us another example of a company going bust—the one that sponsored Rangers and Hibernian. The truth is that there are plenty of examples. I had to cut so many from my own speech. They are all equally jaw-dropping in their way. I focused perhaps on some of the better known clubs and examples.
I thank the shadow Minister, the hon. Member for Manchester, Withington (Jeff Smith), for what he said. He is right that it is all very well our criticising the crypto firms, but it is really the clubs that we should be talking about. They should be in it for more than the money. They represent heritage and communities, and they really need to think carefully. Likewise, the Premier League needs to think carefully about what it does, because it is the custodian of the top flight of the game, and the FA is the custodian of the whole game. It too needs to think about what it does in this space.
I thank the Minister for his kind words. He is right that my motivation is that everyone should enjoy sport safely, but my secondary motivation is that clearly we will look back in two years’ time and say, “How on earth did that happen?” It is a potential scandal unfolding in real time, and it is for us as Members of Parliament to do and say something about it, which is what I am doing today. I hope that the Treasury does bring forward both the regulation and the consultation that it has promised. In the answer that my hon. Friend the Member for North East Bedfordshire (Richard Fuller) gave the hon. Member for Cardiff West (Kevin Brennan) on 22 July, it promised a consultation and legislation this year on this topic.
I look forward to the White Paper, and I hope that the Minister will find some space for crypto in it, and that he will perhaps work with me and my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) on that. I hope that he uses his good offices to speak not only to the Treasury but to the Premier League, the Football Association and so on to emphasise that they need to do more in this space.
I thank my staff for helping me put the speech together. It has been over two months in gestation, given the delay. I also thank everyone who took the time to speak with me, including football clubs, some of the crypto firms themselves, and in particular Joey D’Urso and Martin Calladine, who have been extremely helpful. They have been completely on top of this topic as journalists for a long time. The work that they have done has obviously informed my speech and those of many Members present. It is really important to have people standing up for fans and doing that hard work in the sports sector, so I pay tribute to them.
Question put and agreed to.
Resolved,
That this House has considered cryptoasset promotions in sport.
Written Statements
NATO Parliamentary Assembly
(2 years ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (Leo Docherty)
My right hon. Friend the Member for Aldridge Brownhills (Wendy Morton) has replaced my hon. Friend the Member for Wolverhampton South West (Stuart Anderson) as a member of the United Kingdom delegation to the NATO Parliamentary Assembly.
My hon. Friend the Member for Colne Valley (Jason McCartney) has replaced my hon. Friend the Member for Wealden (Nusrat Ghani) as a member of the United Kingdom delegation to the NATO Parliamentary Assembly.
My hon. Friend the Member for Bracknell (James Sunderland) has replaced my hon. Friend the Member for Beckenham (Bob Stewart) as a member of the United Kingdom delegation to the NATO Parliamentary Assembly.
The right hon. Member for Walsall South (Valerie Vaz) has replaced the hon. Member for Erith and Thamesmead (Abena Oppong-Asare) as a member of the United Kingdom delegation to the NATO Parliamentary Assembly
[HCWS362]
Government Response to House of Lords Liaison Committee Report on Licensing Act 2003 Post-Legislative Scrutiny: Follow Up Report
(2 years ago)
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The Minister of State, Home Department (Chris Philp)
The Government recognise that the majority of people drink at lower-risk levels and enjoy alcohol as part of socialising both at home and out and about. However, we also recognise that alcohol related harms remain of concern and need to be addressed.
The Government believe that the Licensing Act 2003 sets out a clear and effective legislative framework to regulate licensable activities nationally balanced with considerable local autonomy allowing areas to develop their own localities and economies based on their unique character and needs. We keep the Act under review and continue to work closely with licensing practitioners to ensure the regime remains fit for purpose and meets emerging challenges such as new digital technologies. There is a considerable body of good practice around implementation of the licensing regime for areas to draw on where needed.
We are taking forward an ambitious programme of work to tackle alcohol-related harms including the biggest reform of alcohol duties for over 140 years, the introduction of the alcohol abstinence monitoring requirement and alcohol monitoring on licence, and a strong programme of work to address alcohol-related health harms and their impact on life chances.
We welcome this follow up report from the Committee and have given careful consideration to all of the additional recommendations.
The Government Response to the Committee’s follow up report (CP 753) has been laid before the House today and will be published on www.gov.uk.
[HCWS360]
Liverpool City Council Commissioners
(2 years ago)
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The Secretary of State for Levelling Up, Housing and Communities (Michael Gove)
On 19 August 2022, my right hon. Friend the Member for Tunbridge Wells (Greg Clark), the then Secretary of State for Levelling Up, Housing and Communities, announced he was minded to expand the intervention into Liverpool City Council by appointing a commissioner to oversee the council’s financial management and to transfer functions associated with governance and financial decision making to the commissioners together with powers regarding recruitment to improve the running of the organisation. Today I am confirming that I will be implementing these proposals.
The intervention at Liverpool City Council started on 10 June 2021 following a best-value inspection trigged by the arrest of the former Mayor. The then Secretary of State appointed four commissioners with powers over regeneration, highways and property and their associated governance.
The commissioners submitted their second report on 10 June 2022, the anniversary of the intervention, leading to the “minded to” announcement in August. I am pleased that progress has been made and commend the hard work of the councillors and officers to achieve this. Commissioners also report that the arrival of Theresa Grant OBE as interim chief executive in September has bought renewed drive to the transformation work across the council.
The intervention is at a critical juncture as it approaches the halfway point and it is clear significant challenges remain. The commissioners’ second report identified systematic, whole-council weaknesses in areas that stretch beyond the existing intervention. It concluded the council is not meeting its statutory duty to provide best value and the council must take urgent, whole-council action to progress on their improvement journey.
My predecessor invited representations on the proposals on or before 2 September 2022. Having considered the representations received from the authority, councillor Richard Kemp and the evidence in the commissioners report, I have decided to implement the proposals. I have made one small modification to remove an errant timeframe attached to a direction.
I am appointing Stephen Hughes as finance commissioner, until June 2024 or such earlier or later time as I determine. Stephen is a seasoned finance officer who has recently worked as a finance and management consultant and previously worked as interim chief executive at Bristol.
More must be done to embed the desired cultural change across the organisation, to bridge the budget gap and set a balanced budget for 2023-24. My decision, to expand the intervention, reflects the stark situation in the council. The powers provided to commissioners are wide-ranging, but I feel are necessary to deliver the effective, efficient and convenient local government for communities across Liverpool.
The commissioners have agreed to provide their next report to me in February 2023 and I will update the House on further progress with the intervention at that time. I have published the directions and explanatory memorandum associated with this announcement on gov.uk and placed copies, together with the commissioners’ second report, in the Libraries of both Houses.
My predecessor also announced the Liverpool Strategic Futures Panel to craft a vision for Liverpool’s future beyond Government intervention, with a plan for driving growth in skills, jobs and opportunities. Liverpool has fantastic potential, and I am considering carefully how we can work together with partners to best support levelling up in the area. I will update separately on these plans in due course.
[HCWS361]
House of Lords
Introduction: The Lord Bishop of Leicester
Oaths and Affirmations
HS2: Wales
(2 years ago)
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Baroness Wilcox of Newport
To ask His Majesty’s Government what assessment they have made of the impact, if any, of the HS2 rail project in Wales.
The Parliamentary Under-Secretary of State, Department for Transport (Baroness Vere of Norbiton) (Con)
My Lords, HS2 will free up capacity on the existing west coast main line and enable faster journey times from the rest of Great Britain to both north and south Wales via new interchange opportunities. Journey times from many places in north Wales to London could be reduced to around two and a quarter hours, changing at the refurbished Crewe station.
Baroness Wilcox of Newport (Lab)
The continued categorisation of HS2 as an England and Wales project by the UK Treasury scuppers the Welsh Government’s ability to invest in rail in Wales. In July 2021, the Welsh Affairs Committee concluded that HS2 should be reclassified as an England-only scheme. Will the Minister review this profoundly unfair situation?
Baroness Vere of Norbiton (Con)
My Lords, it is the case that Wales does not receive Barnett funding from HS2, as the UK Government remain responsible for heavy rail infrastructure in England and Wales, but the use of departmental comparability factors in the Barnett formula at spending reviews means that the Welsh Government have received a significant uplift in Barnett-based funding.
Lord Bellingham (Con)
My Lords, I declare an interest as a former member of the HS2 Select Committee, which sat every day, mostly all day, for two years—a bit of an exile to the eastern front, if there ever was one. There is now a lot of uncertainty over the northern sections of HS2. Does she agree that it is incredibly important that this uncertainty is cleared up as soon as possible—not least because of the number of properties that have been blighted and the amount of compensation that will have to be paid if these two links go ahead?
Baroness Vere of Norbiton (Con)
I am grateful to my noble friend for his service on the Select Committee—I know that these Bills can sometimes be very large indeed. That for phase 2b, the western leg, is in the other place at the moment, and a Select Committee is being put in place. The Government remain committed to delivering HS2, as the Secretary of State set out in his update to Parliament last month.
Baroness Randerson (LD)
My Lords, in her answer to the noble Baroness, the Minister had an interesting new interpretation of the way in which the Barnett formula works. In the past, it has always been possible to track through how much Barnett money would come, and why. It has not been possible in this case to detect Barnett formula money as a result of HS2. Can the Minister explain to us exactly how much Wales has received in Barnett consequentials as a result of this project, and when that money was received and why?
Baroness Vere of Norbiton (Con)
As I tried to explain, the Government take an overarching approach, as heavy rail infrastructure is the responsibility of the Government in England and Wales. But if one looks at rail investment in Wales, one can see that we are investing record amounts already. In CP6, we have invested £2 billion in Wales alone, which includes £1.2 billion in renewals and upgrading infrastructure and £373 million for rail enhancements.
Lord Berkeley (Lab)
My Lords, Ministers have said that all trains from south Wales to Paddington will stop at Old Oak Common, the station of HS2 in London. That will add 10 minutes to the journey. How much will that station cost and how many years of delay will there be while it is constructed on the Great Western main line?
Baroness Vere of Norbiton (Con)
The noble Lord and I have had many conversations about Old Oak Common in the past. The Government remain committed to the construction of Old Oak Common; we believe that having trains stopping there will mean that the station becomes a vital integrated transport link in west London, which would lead into many other parts of London and beyond.
Lord Watts (Lab)
My Lords, is it not the case that the taxpayer is being ripped off by contractors because there is a lack of oversight of this scheme? What are the Government going to do to bring it back into budget?
Baroness Vere of Norbiton (Con)
If the noble Lord is talking about HS2, I do not recognise his comments about the Government being ripped off, but I certainly recognise that the Government must make sure that the scheme is adequately scrutinised. Indeed, that is the case. As he will have seen from the most recent update to Parliament, HS2 remains within its funding envelope.
Lord Faulkner of Worcester (Lab)
My Lords, the Minister is absolutely right to say that north Wales will benefit from the construction of HS2, with shorter journey times and relief of overcrowding on the west coast main line. Would it not be even more sensible, rather than expecting passengers to change at Crewe, if the north Wales coast line were electrified before High Speed 2 got to Crewe, so they could run through trains along the north Wales coast which are all High Speed 2 trains?
Baroness Vere of Norbiton (Con)
The noble Lord is trying to get me to make commitments from the Dispatch Box which I am not able to make, unfortunately. However, I think it is worth understanding that the Crewe interchange as it is now planned was substantially revamped following significant concerns from stakeholders in north Wales and beyond. We have altered the Crewe northern connection so that it could allow for five to seven trains per hour to call at Crewe and then to be able to go down the high-speed line or, indeed, the conventional track.
Baroness McIntosh of Pickering (Con)
My Lords, my noble friend referred to the uncertainty over the northern part of HS2. Will she commit to rail improvements for the northern rail project to make sure that we have a new line to open up the railway between Teesside and Liverpool?
Baroness Vere of Norbiton (Con)
As my noble friend will know, the Government set out in the integrated rail plan tens of billions of pounds of investment across the north and the Midlands. We want to take that forward in line with the 2019 manifesto. She will also be aware that an Autumn Statement is coming up on 17 November, and I cannot say anything further at this time.
Lord Hunt of Kings Heath (Lab)
My Lords, in the discussions which the noble Baroness has undoubtedly had with the Treasury on the benefits of continuing with HS2 north of Birmingham, has she pointed out that the city of Birmingham has already seen massive inward investment by companies moving there in advance of HS2 coming? Does she not agree that the same would happen in the north if HS2 were to continue up there?
Baroness Vere of Norbiton (Con)
I agree with the noble Lord that Birmingham and the surrounding areas have seen huge investment following the confirmation that HS2 would go there. Indeed, the same could well happen for the western leg. It is in the strategic case, and the case for HS2 going north from Birmingham is strengthened by the fact that we believe businesses will flock to Manchester and other areas.
Lord Roberts of Llandudno (LD)
As a north Walian, I support all the concerns that the noble Baroness, Lady Wilcox, and others have mentioned already. What I and a lot of north Walians are concerned about is that we have no through trains on the Holyhead to Euston line—although I think there is just one through train a day. I came here this morning, and I had to change on the way; often, we have to change at Crewe and at Chester. Why is this promise of a through train from north Wales to Euston not being kept? What is the cause of that?
Baroness Vere of Norbiton (Con)
I understand the noble Lord’s concern, and the Government are looking very carefully at train timetables at the moment. Noble Lords will have heard me discuss in the House before the challenges at Avanti. We are working very closely with Avanti to make sure that it can offer as full a service as possible. The next upgrade is on 11 December.
Baroness Lister of Burtersett (Lab)
My Lords, my noble friend Lord Berkeley asked some specific questions about costs and delays which I do not think the Minister answered. Could she do so now, please?
Baroness Vere of Norbiton (Con)
I think the noble Lord, Lord Berkeley, asked me about the cost of Old Oak Common station. I do not have that figure to hand, but I will be happy to write.
Lord Grocott (Lab)
I welcome the Minister’s clear assertion on behalf of the Government that they remain fully committed to the construction of HS2. There can be barely a capital expenditure programme that has been examined so repeatedly, not only nationwide but here in the House of Lords. Can I remind her that opposition to HS2 is in the finest traditions of the House of Lords, which in the 1830s threw out the London to Birmingham railway proposal? Fortunately, that was later reversed, but if it had been thrown out and the Lords had succeeded in their opposition, we would be in an infinitely worse position than we are today.
Baroness Vere of Norbiton (Con)
I am grateful to the noble Lord for that reminder. I will ensure that the relevant people in my department are aware of it.
Devolved Administrations: Intergovernmental Relations
(2 years ago)
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Baroness Bryan of Partick
To ask His Majesty’s Government what meetings have been held in 2022 with the devolved administrations as part of the intergovernmental relations arrangements.
The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Scott of Bybrook) (Con)
My Lords, the Prime Minister spoke with the First Ministers of Scotland and Wales on his first day in office, underlining the Government’s commitment to working closely with the devolved Governments on the shared challenges facing people across the UK. From January to September this year, there have been over 200 ministerial meetings between the United Kingdom Government and the devolved Governments on a wide range of issues.
Baroness Bryan of Partick (Lab)
I thank the Minister for that reply. Unfortunately, there is a sense of quantity overriding quality in some of these meetings. I have searched high and low to find as many minutes and communiqués as I could, but I get the impression that many of these meetings are simply going through the motions. Academics have put this down to the Government having a unitary mindset, even after 20 years of devolution, and not actually accepting that there has been a fundamental change in the constitution. Does the Minister understand why people in Scotland and Wales feel that their Parliaments and political representatives are not given the level of respect that they should be afforded?
Baroness Scott of Bybrook (Con)
I do not agree with that. The UK Government and the devolved Governments are working under jointly agreed operating arrangements; therefore, the quality and frequency of engagements are a joint endeavour between Governments. The UK Government deeply value transparency, accountability and effective scrutiny by the UK Parliament and the broader public of the Government’s participation in intergovernmental structures. We will continue to update the House on our published transparency reports. The last one came out on 21 July, and there is one due out shortly, in the third quarter of 2022.
Lord Morris of Aberavon (Lab)
My Lords, given the reliance on science during the pandemic, which does not recognise national boundaries, and the frequency of travel between nations, what lessons have been learned from the divergence of pandemic policies between each area? Will the Government take account of the agreed actions of the four vets from each area in dealing with the avian flu in any evidence they give to the Hallett inquiry?
Baroness Scott of Bybrook (Con)
I thank the noble and learned Lord for that question. I think it goes slightly away from today’s Question, but I can tell him that, last year and the year before, the number of ministerial meetings between the UK Government and the devolved Governments increased considerably. That is important, because it reflects the work they all did on Covid-19 issues. I will certainly take his questions on avian flu and the learnings from Covid to the Department of Health and Social Care.
Lord Bruce of Bennachie (LD)
Would the Minister agree that relations between the Government and the devolved Administrations fall far short of what was hoped for when devolution was established? Will the Government therefore set up a genuine consultation to ensure that what is devolved stays devolved, what is reserved is reserved and what is shared is shared with an atmosphere of mutual respect?
Baroness Scott of Bybrook (Con)
I do not agree with the noble Lord. I think it is. We have clear arrangements between the UK Government and devolved Governments about how they work together, the frequency of those engagements and what they talk about. This is not just at Prime Minister level but right the way through, through the Ministers and down to the officials. The work done between the four areas of the United Kingdom is good and works well.
Baroness Fraser of Craigmaddie (Con)
My Lords, the Minister will be aware that the Scottish Government plan to publish their budget for 2023-24 on 15 December. Is she aware of any discussions or considerations the UK Government have had with the devolved Administrations on the Chancellor postponing the Autumn Statement until 17 November and the corresponding ability of the devolved Administrations to plan for their budgets, less than a month later?
Baroness Scott of Bybrook (Con)
The Treasury considers a range of factors when setting fiscal events, including the impact on the devolved Administrations. The Scottish Government’s agreed fiscal framework sets out that funding will normally be finalised in the autumn prior to each financial year. Delivering the Autumn Statement on 17 November is therefore in line with these normal arrangements. The fiscal framework also recognises that normal arrangements sometimes need to be delayed, so sets out alternative arrangements in such a scenario. However, I do not think that delivering this on 17 November is such a case; for example, I think what it is thinking of are abnormal events such as when we had a general election close to Christmas.
Lord Wigley (PC)
Will the Minister accept that the last three or four years have been a period when relationships between Westminster and Cardiff have been far from satisfactory? Given that we have a new Government, will she give an undertaking that there will be a positive initiative to try to overcome the difficulties that have existed, particularly by giving information to the Government in Cardiff in good time, so that they can react after considering the matter and not be rushed into taking decisions that cause problems later?
Baroness Scott of Bybrook (Con)
The Prime Minister set the tone for the Government’s collaborative approach to working with the devolved Governments right from his very first day in office. I can tell the House that the Prime Minister expects to meet the First Ministers again later this week. That is the tone that he has set and that we will continue.
Baroness Fookes (Con)
My Lords, is my noble friend aware that the Constitution Committee issued a very important report on the future of the United Kingdom? We would hope that intergovernmental relations will be taken very seriously, but there is a particular problem, in that the consent of the devolved Governments does not have to be sought for delegated legislation on matters that I am very aware would otherwise not be reserved. May we hope that this problem will be looked at very seriously, because it causes intense irritation among the devolved Administrations?
Baroness Scott of Bybrook (Con)
I thank my noble friend for that comment. I will take it back to the department, discuss it and then come back to her.
Lord Khan of Burnley (Lab)
My Lords, the challenges we face—the cost of living crisis, the climate crisis and standing up to Putin—are common across our four nations and we need to face them together. Can the Minister detail what recent engagements the Government have had in the past few months with the devolved Administrations on the climate crisis as part of preparations for COP 27?
Baroness Scott of Bybrook (Con)
I thank the noble Lord. I cannot give the dates for what happened but it is possible, at any time, to go on to the government website and see what those meetings were about. However, I can tell the noble Lord that if those are the issues which the devolved Governments want to speak to the Prime Minister about, I am sure he will be listening at this coming meeting.
The Earl of Kinnoull (CB)
My Lords, I do not think the Cross Bench has had a go yet. The first inter- governmental relations quarterly report came from the Cabinet Office. The latest one comes from the Department for Levelling Up. Can the Minister explain why that has moved and explain how the machinery of government works so that if a ministry is found not to be pulling its weight in this important aspect, it is encouraged to do so?
Baroness Scott of Bybrook (Con)
The area of inter- governmental relations was with the Department for Levelling Up prior to the last reshuffle. It then went to the Cabinet Office and it is now back with the Department for Levelling Up. That is the place—the communities area—where it should be.
Lord Woodley (Lab)
My Lords, I hope the Minister appreciates that the people of Liverpool can feel as alienated from the UK Government as those in Wales and Scotland. Does the Minister accept that Liverpool and other regions should be represented in these discussions, alongside the devolved Administrations?
Baroness Scott of Bybrook (Con)
I do not agree with that. There is a completely separate area of discussion with the devolved Administrations and another, which I think is important, with the rest of local government and the regions of the whole of the United Kingdom. Those two separate things go alongside each other and work well.
NHS: Discharge to Assess Policy
(2 years ago)
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Baroness Wheeler
To ask His Majesty’s Government what plans they have to announce new measures to ensure that carers are consulted and involved in hospital decisions to discharge patients under the Discharge to Assess policy.
Baroness Merron (Lab)
My Lords, with the permission of my noble friend Lady Wheeler, and on her behalf, I beg leave to ask the Question standing in her name on the Order Paper.
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Lord Markham) (Con)
It is vital for carers to be involved in critical decisions regarding their loved ones’ care. The Government will publish shortly new statutory discuss charge guidance, which will include the new statutory requirement to involve carers. NHS bodies and local authorities will be able to use that guidance as a resource to support carers from the point of hospital admission through to post-discharge care and support.
Baroness Merron (Lab)
My Lords, today’s State of Caring report from Carers UK paints a bleak picture, with one in two carers still not involved or properly listened to over their loved ones’ discharge from hospital. When will the Government live up to the promise of their Health and Care Act to properly involve both patients and carers in moving from hospital to social care? While there is repeated reference from Ministers to the promise of a £500 million adult social care fund, intended to support the discharge process, when will this reach the front line?
Lord Markham (Con)
I welcome the Carers UK report that came out today. It has provided much valued information which will be part of the information that we are using as part of the guidance we will be putting out shortly. It has taken some time because we want to get it right. We have involved NHSE, local authorities and carers, and we are using this report and the Carers UK conference that will take place on Thursday as vital inputs to make sure that we get that guidance out properly. As the report rightly states, the fact that 50% are not getting the guidance and support they need clearly shows that more needs to be done in this space. On the £500 million discharge fund, that has now been agreed, and I understand that that will go out very shortly—in a matter of days.
Lord Laming (CB)
My Lords, I am sure the Minister will recognise that any one of us at any time could suddenly have a major caring role thrust upon us —completely unplanned and unexpected. Carers make a huge contribution in our society and to the success of the National Health Service. Can the Minister assure the House that he will do everything he can to ensure that the contribution carers make is recognised and respected and that they are valued?
Lord Markham (Con)
I agree. The legislation was put forward by the Government to recognise the vital role that carers have in all this. As we are all aware, there are 5.4 million carers out there, and they make a vital contribution, not only to the health of their loved ones but to the wider economy. Of those, 1.3 million receive the carer’s allowance; that shows how many of them do it completely unpaid. That is why I welcome the legislation, and I hope the guidance will show a big improvement in the way that carers feel that they are valued, because they truly are.
Baroness Verma (Con)
My Lords, I declare my interests as in the register. First, carers need respite, so will the Government focus on ensuring that carers’ families are given respite so that they can have some quality of life, which, at the moment, is not readily available to them? Secondly, will my noble friend the Minister please look yet again at the minimum that councils can pay providers for delivering adult social care?
Lord Markham (Con)
First, I repeat that the needs of carers, including for a break, some respite, are very much understood. Part of the £292 million fund in 2022-23 is in place to try to give unpaid carers a week’s break. On the second part of the question, I will need to come back to my noble friend in writing.
The Lord Bishop of Bristol
My Lords, there are currently more than 160,000 vacancies in the social care sector, and, so often, the work of voluntary carers—relatives—needs the support of the wider social care system. Research from the TUC finds that one in three current care workers is likely to leave in the next few years due to low pay. It is very good to see the Government’s new Made with Care recruitment drive. However, please can the Minister set out what the Government are doing to address the concerns about pay and status in the social care system, particularly given the ongoing cost of living crisis?
Lord Markham (Con)
Carers are well valued, and the need to ensure that our social care workers are well valued was the subject of a lengthy debate that your Lordships will remember from a couple of weeks ago. In that, we set out our plans for recruitment—not only domestically but internationally. I am glad to say that, even since then, we have seen a further uptick in the number of people recruited from overseas. Overall, it is understood that this is a vital area as part of the ABCD—which still exists. The “C” for carers is still very much part of this, so we are actively monitoring those recruitment plans and making sure that we are trying to provide every element of support.
Baroness Pitkeathley (Lab)
My Lords, I hope the Minister will forgive me for correcting his figures but the figure we generally use for unpaid carers now is nearer 10 million since the pandemic. In view of the truly shocking statistics in the Carers UK report that was published today—I am glad that the Minister said it will inform the department’s policy—have the Government given any consideration to revisiting the carers action plan, which went out of date two years ago, or, better still, reviving the idea of a national carers strategy? The first one was published more than 20 years ago.
Lord Markham (Con)
My understanding is that part of the guidance will be informed by making sure that action for carers is there but, when I see the guidance, I will make sure that it covers those elements. I agree, as we all do, with the premise. If the carers action plan is out of date—again, this is legislation that this Government have brought forward to show that we understand the importance of carers—clearly it is something that I will take up.
Baroness Tyler of Enfield (LD)
My Lords, the recent survey conducted by Carers UK, which has already been alluded to, found that 63% of carers disagreed that they had been asked about their ability to provide care. Indeed, the report is littered with harrowing examples of carers who felt that the discharge of the person into their care had happened too quickly, as a result of which their condition got worse and they had to go back into hospital. Can the Minister say how the NHS will collect both qualitative and quantitative data at the point of hospital discharge to ensure that undue pressure is not being placed on families?
Lord Markham (Con)
As mentioned, the Carers UK report and its findings made for sobering reading. It clearly shows why it was right to delay the guidance until we had that input; again, that will be followed up at the conference on Thursday. I think we all agree on the premise that we want to discharge people into their home quickly because that is the best place they can be, provided that they are medically able to be there. It is then in their home that the assessment takes place. Clearly, that must happen in a timely fashion and with the carer’s involvement but, again, the survey showed that that is not being done quickly enough in many cases. I accept that there are many things we need to learn from this but I think we can all agree on the direction: it is right to discharge people quickly provided that back-up and support are there to ensure that they have what is needed.
Lord Naseby (Con)
My Lords, as one who has been a carer in the recent past, I ask my noble friend the Minister to double-check that, before any patient leaves any form of NHS care, they have had a thorough checklist of every conceivable thing, including medicines, vaccination or any other procedure that has been undertaken on that patient.
Lord Markham (Con)
My noble friend makes the point well. I agree. It is my understanding that such a checklist exists but I will check that and come back to him.
British Heart Foundation: Tipping Point Report
(2 years ago)
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Baroness Merron
To ask His Majesty’s Government what assessment they have made of the report by the British Heart Foundation, Tipping Point, published on 3 November; and what steps they intend to take in response to the finding that from the beginning of the Covid-19 pandemic to August 2022 there were 30,000 excess deaths involving coronary heart disease in England.
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Lord Markham) (Con)
This is a detailed report that requires time to be fully considered. NHSE has been monitoring excess deaths and has put in place the cardiovascular disease prevention recovery plan. This prioritises support to help systems, including prevention planning, risk-factor diagnosis, monitoring and management, to recover to pre-pandemic levels; it also tracks progress and ensures that interventions are effectively targeted. The plan includes resources to create CVD prevention leadership roles in every integrated care system from April 2022.
Baroness Merron (Lab)
My Lords, British Heart Foundation analysis has found that millions of missing heart patients, both diagnosed and undiagnosed, are struggling to get care for conditions such as high blood pressure. At the same time, modelling by NHS England suggests that a decline in blood pressure management could lead to more than 11,000 extra heart attacks and nearly 17,000 additional strokes in the next three years. What are the Government doing to identify and treat these missing patients? How will they address the backlogs in every part of the system, which are affecting time-critical emergency care?
Lord Markham (Con)
It is quite right that blood pressure management or hypertension is a key indicator. That is why we have put in place many points when people’s blood pressure can be measured. Anyone who has had a Covid vaccination recently would have had their blood pressure taken. This can now be performed at—
Lord Markham (Con)
I will check on that. I have been told that it is being done as part of that. It is available in a large number of pharmacies now and we have sent out hundreds of thousands of blood pressure monitors, so people can do it from home. It is fully understood that it is a vital part of early monitoring and we have a three-pronged strategy to make sure that we can measure people’s blood pressure at every point of contact.
Lord Patel (CB)
My Lords, the report identifies shortcomings in the delivery of primary and community care for patients with cardiac disease, which is a systems failure. I have no doubt that there will be similar findings for patients who suffer from other chronic diseases. Does the Minister agree that it is time to look at a systems change in the delivery of primary and community care, incorporating advances in technology and digital healthcare that would improve access for patients?
Lord Markham (Con)
Yes, we all agree that prevention is better than cure. One of the few benefits of Covid was that millions of people downloaded the NHS app. People are using that for self-diagnosis now, in exactly the way that has been mentioned. In October alone, 500,000 people used the app for self-diagnosis, the healthy heart blood pressure MoT and diabetes checking. That is part of this and it is all part of our five-year healthier life plan, which, as mentioned, is very much focused on MoTs from age 40 onwards, so that we can diagnose these problems early. Our focus should absolutely be on prevention rather than cure.
Lord Balfe (Con)
My Lords, will the Minister look at any connection between vaccinations and worsening heart disease—in other words, the extent to which the vaccination itself might contribute to worsening a heart condition?
Lord Markham (Con)
My understanding is that that is something for in-depth research, which I do not have at my fingertips. I will inquire and write back to the noble Lord.
Lord Scriven (LD)
My Lords, following on with prevention, prevention measures lead to fewer premature deaths from heart disease, yet this Government have slashed the public health grant by 24%, on a real terms per-person basis, since 2015-16. Some of the largest reductions over this period were in stop-smoking services and tobacco control, which fell by 41% in real terms. Do the Government not understand that decimating public health budgets means more heart disease and premature deaths?
Lord Markham (Con)
We are at the forefront of trying to encourage healthier eating, as per the sugary drinks levy and through product placement in shops. We have been at the forefront of anti-drinking and anti-smoking initiatives and are very much in favour of the smoke-free agenda. These are all key elements of our five-year healthier life plan. It takes these things into account because, as I say, prevention really is better than cure.
Baroness Browning (Con)
Would my noble friend the Minister consider that, in the same way that people check their own bodies for the possibility of cancer developing, they should be trained to take their pulse regularly to check for atrial fibrillation? It is sometimes described as a disease that nobody notices until something dramatic happens, and it can lead to stroke and pulmonary embolisms, which can cause heart attacks.
Lord Markham (Con)
Yes, the more that we can educate people to self-diagnose and take a stake in their own health, the better. Again, many of us now have Fitbits, Apple watches and so on, which can be vital early-warning indicators.
Lord Sikka (Lab)
My Lords, austerity kills: 334,000 people have died from it in the period from 2012 to 2019. The Government publish monthly statistics on GDP, inflation, wages and much more. However, we do not get monthly data on excess deaths attributable to government policies. Will the Minister provide this information every month? Secondly, can he ensure that the impact assessment accompanying each Bill shows the human cost arising from that Bill?
Lord Markham (Con)
The House will agree that we provide some very detailed information on excess deaths. That is quite sufficient at this time.
Lord McColl of Dulwich (Con)
My Lords, does the Minister agree that, when we talk about increasing mortality, there is a very obvious cause for this? Some 40 million people in this country are obese and moving inevitably to very premature deaths from a variety of very unpleasant diseases. This could be prevented if they had one fewer meal per day.
Lord Markham (Con)
My noble friend is referring to the healthy eating agenda, which we very much support. It is a key component of health and enjoyment of life. The more we can do in that department, the better. We have taken some very solid steps on sugary drinks and, more recently, on the product placement guidelines, to show that that is central to our beliefs.
Baroness Masham of Ilton (CB)
My Lords, how much research is being done on Covid-19, specifically on long Covid and heart disease? Who would collect the data?
Lord Markham (Con)
I believe that extensive, detailed research is being done in those areas under the overall guidance of Sir Chris Whitty. We will share this when we have the results.
Lord Aberdare (CB)
My Lords, what assessment has been made of how many extra deaths could have been prevented by faster access to defibrillators? What steps are the Government taking to increase the availability of defibrillators, particularly in the light of the current severe supply problems affecting them and their parts?
Lord Markham (Con)
I am afraid I do not have information on the number of deaths. I will investigate this. I can say that I am sure that we have all seen a great increase in the number of defibrillators and we very much encourage this.
Lord Hunt of Kings Heath (Lab)
My Lords, that is very kind of the Minister. May I take him back to his response to his noble friend about vaccination? Would he, none the less, tell the House that the Government are absolutely convinced that the Covid and flu vaccinations have brought huge benefits?
Lord Markham (Con)
I thank the noble Lord for giving me the opportunity to state this. I should have done so the first time around, so that is appreciated. As he says, vaccinations have brought huge benefits. We can all be proud to be the leading country on rolling them out, seeing the benefits that have come from it all.
Higher Education (Freedom of Speech) Bill
(2 years ago)
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Lord True
That the bill be reported from the Grand Committee in respect of proceedings up to and including Wednesday 2 November; that the order of commitment of 28 June be discharged and the remainder of the bill be committed to a Committee of the Whole House; and that the instruction to the Grand Committee of 28 June shall also be an instruction to the Committee of the Whole House.
The Lord Privy Seal (Lord True) (Con)
My Lords, it is not customary to discuss usual channels business at the Dispatch Box, but with your Lordships’ indulgence, may I express the great pleasure in the usual channels that His Majesty the King has been graciously pleased to assent that the noble Lord, Lord Kennedy of Southwark, be sworn of His Majesty’s Privy Council? That is a great credit to the noble Lord, his party and the House. If I can express it in less parliamentary terms, he is an all-round good man and we are absolutely delighted and congratulate him. That said, I beg to move the Motion standing in my name on the Order Paper.
Football Spectators (Relevant Offences) Regulations 2022
(2 years ago)
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Lord Sharpe of Epsom
That the Regulations laid before the House on 5 and 22 September be approved.
Relevant document: 13th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 3 November.
Rehabilitation of Offenders Act 1974 (Exceptions) (Amendment) (England and Wales) Order 2022
(2 years ago)
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Lord Bellamy
That the draft Regulations laid before the House on 5 September be approved.
Relevant document: 13th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 3 November.
Inter-American Investment Corporation (Immunities and Privileges) Order 2022
Viscount Younger of Leckie
That the draft Order laid before the House on 11 October be approved.
Considered in Grand Committee on 3 November.
Adult Social Care Information (Enforcement) Regulations 2022
Lord Davies of Gower
That the draft Regulations laid before the House on 5 September be approved.
Relevant document: 13th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 3 November.
Armed Forces (Tri-Service Serious Crime Unit) (Consequential Amendments) (No. 2) Regulations 2022
(2 years ago)
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Baroness Goldie
That the draft Regulations laid before the House on 17 October be approved.
The Minister of State, Ministry of Defence (Baroness Goldie) (Con)
My Lords, this statutory instrument makes a minor consequential amendment to Regulation 8(1) of the Armed Forces (Part 5 of the Armed Forces Act 2006) Regulations 2009. This change is required to support the establishment of the Defence Serious Crime Unit, or DSCU for short. It does this by ensuring that the new provost marshal and service police personnel of this tri-service unit are governed by the same legislation as the existing three single-service provost marshals and single-service police forces. This instrument amends Regulation 8(1) to include any reports prepared by, or provided to, the tri-service Serious Crime Unit to be provided to a person’s commanding officer when referring that person’s case to the Director of Service Prosecutions.
Although this is only a minor and consequential amendment, the original set of regulations it amends is subject to the affirmative procedure, meaning that this statutory instrument must also follow this procedure. Other consequential amendments are being made to secondary legislation by the Armed Forces (Tri-Service Serious Crime Unit) (Consequential Amendments) Regulations 2022, which is subject to the negative procedure.
Lord Craig of Radley (CB)
My Lords, this statutory instrument has a very narrow purpose, but I am content with the detail. As the Minister indicated, it follows from the review put in hand as preliminary work for the Armed Forces Act 2021. I do not recall what assessment was made of the average number of serious crime cases for investigation in the Armed Forces that might arise in, say, a 12-month period. If the Minister has a figure, it would be helpful to have it on record.
There would appear to be some flexibility available to the new provost marshal in how much to draw on additional help within the single-service establishments to match the level and complexity of any investigation he has embarked upon. Am I right in assuming that he would be able to insist on the level of single-service effort he requires always being made available? In other words, is he senior in rank and status to his single-service equivalent? Indeed, is it ever contemplated that he might be a civilian on contract? In the service environment, the importance of the chain of command needs to be upheld, and in that context I was pleased to note that the new provost marshal is required to inform the accused’s commanding officer. I raise these points to allow the Minister to expand a bit more on these details relating to this important new post and unit.
Baroness Smith of Newnham (LD)
My Lords, as the noble and gallant Lord, Lord Craig of Radley, just said, this is a very narrow statutory instrument. It is perhaps surprising that its debate has such a wide audience. On the defence side of things, we are quite used to either having Statements right at the end of business or discussing SIs in Grand Committee, where there are usually about four of us. It is important that your Lordships contribute to, listen to and are part of discussions about defence, because they are so important—but the two SIs today are both narrowly focused on service justice.
Normally I would delegate all this to my noble friend Lord Thomas of Gresford, who unfortunately is not here today. In his absence I welcome the statutory instrument and note that it very much fits with the reviews we talked about on various occasions when looking at the overseas operations Bill, when the Minister repeatedly said that the Henriques report will say or do whatever. That is obviously part of this decision, as is the Lyons review.
Paragraph 7.1 of the Explanatory Memorandum notes that the defence serious crime unit should
“bring together the Special Investigations Branches of the Royal Navy Police, Royal Military Police and Royal Air Force Police”.
It then adds,
“along with specialist investigative support.”
Building on the noble and gallant Lord’s questions about availability of support, can the Minister indicate what sort of additional support might be available? Beyond that, we on these Benches are content with the SI.
Lord Hope of Craighead (CB)
My Lords, I intervene out of order, encouraged by what the noble Baroness just said. One point that attracted my attention is that the regulations apply to all parts of Great Britain and Northern Ireland,
“and the British overseas territories (except Gibraltar).”
Is there something particular about Gibraltar that means they do not apply there? It would be interesting to know why Gibraltar should be excluded. I am sure it is not an oversight, but the Explanatory Memorandum does not explain and it would be interesting to know the reason.
Lord Tunnicliffe (Lab)
My Lords, I thank the Minister for introducing this narrow and consequential SI, which of course we totally support. It gives us an opportunity to have hopefully a final look at this gaggle of legislation that has been necessary to introduce these reforms.
I worry about whether there will be problems deciding what a serious crime is. One can see how it might become defined within a single service, and I am totally in favour of the tri-service unit, but this will involve single-service police forces designating a crime as important for the tri-service specialists. What criteria will be used to decide that it should go to the tri-service specialists? Who will make that decision? To what extent do the criteria differ from those presently used by the single-service specialist units? On personnel, how will the tri-service unit ensure it has the specialist technical capability to investigate serious crimes?
In the Minister’s introduction she touched on civilian involvement. Can she repeat that, for clarity? Does this mean that people recruited from civilian police forces or other specialists will have operational capability? In other words, will they be able to serve alongside military operational police? In those circumstances, will they still be civilian in character?
Having asked those questions, I repeat our total support for the reforms, in respect of which this is one of the last consequential amendments.
Baroness Goldie (Con)
I thank noble Lords for their contributions. As all have observed, this is a fairly narrow field of activity; none the less, the questions are predictably penetrating and searching. I will try to deal with them.
The noble and gallant Lord, Lord Craig, echoed by the noble Lord, Lord Tunnicliffe, asked what sort of crimes the serious crime unit will be investigating. I can give some degree of detail, which I hope will be helpful. I should say that it will be generically responsible for the investigation of all serious crimes committed by those subject to service law. It is worth noting that the MoD working definition of “serious crimes” is not the same as that contained in the Serious Crime Act, which I think was at the heart of the question posed by the noble and gallant Lord, Lord Craig.
So to clarify, serious crime for the purposes of the DSCU is an offence listed under Schedule 2 to the Armed Forces Act 2006, an offence committed in proscribed circumstances, or an offence under Section 42 of the Armed Forces Act 2006 for which the corresponding offence under the law in England and Wales is indictable, or any other offence which may not be dealt with at a summary hearing by a commanding officer. This essentially captures most criminal offences, which are triable only by a court martial, and some military offences such as the ill-treatment of personnel in initial training.
Prior to the DSCU standing up, the single services all have a different threshold for how they determine serious crime; as such, getting clear statistics on the full range of serious crimes is challenging. Official statistics for the most serious offences of murder, manslaughter, sexual offences and domestic abuse in the service justice system are published annually. In 2021, there were 239 service police investigations into these offences.
The rank of single service provost martial differs in each service and, as your Lordships will be aware, each is independent from the other and each has no ability to compel the other. But on 5 December, all single service SIB personnel will transfer under the direct command of the provost marshal of serious crime, who will investigate serious crime independently of the three single services and be answerable to the Chief of Defence People and Vice Chief of Defence Staff for the execution their duties. There are agreements that the single service provost martial will assist the provost marshal of serious crime in responding to serious crime in the first instance.
The noble and gallant Lord, Lord Craig, also asked about governance arrangements. I have alluded briefly to what the line of accountability is. On the matter of governance, options relating to the strategic policing and governance board are being developed to ensure the most appropriate and effective governance mechanism is created for the DSCU and the wider service police.
The noble Baroness, Lady Smith, rightly pointed out that a lot of this is now tied in with the various reviews—such as by his Honour Shaun Lyons and Sir Richard Henriques. These have been very important contributions to the development all of this. I hope that we are now reflecting the important recommendations and sensible suggestions provided in these reviews to ensure that the system is fit for purpose to deal with these serious crimes, and that we will have the necessary specialisms. I think I indicated in my speaking notes there is now a healthy cross-transfer with the Home Office police forces, the College of Policing and the guidance offered by the Police Council. So there is very good cross-fertilisation of training and professional standards.
The noble and learned Lord, Lord Hope, asked specifically about Gibraltar. I did find an inquiry but the situation is a little complicated. I will read out this note only because the question was asked by a lawyer; others will struggle to follow it, but here goes:
“The Armed Forces Act of 2006 originally extended to all the British Overseas Territories and was part of local law but that expired in 2011 in the British Overseas Territories including Gibraltar as a result of a drafting error when the Armed Forces Act 2006 was renewed for the first time by the Armed Forces Act of 2011.”
The Armed Forces Act 2016 corrected this error—I am letting a noble Lord take his seat, as I see that the noble and learned Lord is listening with rapt attention to this—by extending the Armed Forces Act 2006 to the British Overseas Territories once again. But, and this is interesting, Gibraltar was not included because it had instead asked to deal with the issue using legislation passed by the Gibraltar Parliament. Under UK law, the Armed Forces Act 2006 continues to apply to the UK’s regular and Reserve Forces when they are in the British Overseas Territories, including Gibraltar, even if it does not form part of local law, just as it applies in any foreign state where UK Armed Forces are deployed. UK law therefore allows those in the UK Armed Forces who commit service offences in Gibraltar to be charged with those offences. The Armed Forces (Gibraltar) Act 2018 recognises that the Armed Forces Act 2006 applies in Gibraltar, so there is an application but by a rather circuitous route.
Lord Hope of Craighead (CB)
I congratulate the Minister on being so very well prepared.
Lord Tunnicliffe (Lab)
Before the Minister sits down—she probably deserves a round of applause for that last answer—can I press my two points a little further? First, I have this vision of the military equivalent of Constable Plod coming across a crime. Somewhere there must be a process where that crime goes up the chain of command and gets to somebody who says, “This is a serious crime and it has to go to the specialist unit”. Who would that be? The Minister can write to me if it is too difficult to answer now. Secondly, on the use of civilians, will they have operational powers? In other words, when they are working with the military will they have the power of arrest?
Baroness Goldie (Con)
I thank the noble Lord. I was not forgetting him and was going to endeavour to address those points. It is the provost marshal of the Defence Serious Crime Unit who is in overall charge, and who will therefore expect to assume jurisdiction over the sort of crime that I detailed to the noble and gallant Lord, Lord Craig of Radley. I will endeavour to find out more about the mechanics of the structure to see if I can satisfy the noble Lord, Lord Tunnicliffe, about how this works in practice, but I understand that there are clearly understood lines of communication and information to ensure that the system works smoothly.
On civilians, the DCSU will be staffed and led by service police because, unlike civilian police, they can investigate offences wherever they are committed and use their powers overseas. They are trained and ready to deploy wherever the Armed Forces operate, including in operational theatres. Importantly, the DCSU will have access to civilian expertise by embedding reservists who are police officers in the Home Office police forces. Sir Richard Henriques recommended that the deputy provost marshal be a civilian but, due to restrictions on jurisdiction and operational deployment requirements, there is a need for the deputy provost marshal to be military. However, the DCSU will optimise the use of our skilled and experienced Reserve Forces, many of whom are serving civilian police officers within the Home Office police forces. They will be embedded within the new unit and play a significant role.
Perhaps I can provide further reassurance: the new unit will be independently inspected by His Majesty’s Inspectorate of Constabulary and Fire & Rescue Services, so there is an overall independence of monitoring. I think that has dealt with the points that were raised, so I thank noble Lords for their contributions.
Armed Forces (Court Martial) (Amendment) Rules 2022
(2 years ago)
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Baroness Goldie
That the draft Rules laid before the House on 17 October be approved.
The Minister of State, Ministry of Defence (Baroness Goldie) (Con)
My Lords, this statutory instrument consists of changes to the rules applying to the court martial contained in Schedule 1 to the Armed Forces Act 2021. Three of the four changes implement recommendations from the review of the service justice system by His Honour Shaun Lyons.
The rule changes state that six-member boards are required if the offence is a Schedule 2 offence—serious offences, such as grievous bodily harm, which must always be referred to service police for investigation—or if the offence carries a maximum penalty of more than two years’ imprisonment. They introduce Rule 30 to determine when an additional member can be appointed to a three-member board. This is to address the concern that three-member boards hearing cases lasting several days may be vulnerable to an unexpected loss of a member, which would result in the board not being quorate or validly constituted. The changes also introduce Rule 30A to allow a direction to be made to allow proceedings to continue if a board is reduced from four to three or six to five members. They also extend those ranks applicable to sit on a court martial board to include OR-7 personnel; these are senior NCOs such as chief petty officers or staff sergeants. The rules introduce other minor amendments to the court martial rules in consequence of these changes.
To explain further, the first rule change implements His Honour Shaun Lyons’s recommendation that a six-member board should be required if the offence is a Schedule 2 offence or carries a maximum penalty of more than two years’ imprisonment. He found widespread agreement that the current five-member boards, which try Schedule 2 offences and offences carrying a maximum term of over seven years’ imprisonment, should increase in size to six and reach qualified majority verdicts, rather than simple majority verdicts, in which at least five of the six members have agreed. He also recommended that they try Schedule 2 offences and offences carrying a maximum term of over two rather than seven years’ imprisonment. He recommended that smaller boards, which will continue to consist of three or four members, should try all other cases and deal with sentencing in all cases where the defendants have pleaded guilty, as they do now.
We accepted this recommendation, which will allow the three-member boards to focus on the great majority of service disciplinary offences contained in Sections 1 to 41 of the Armed Forces Act 2006, and the less serious criminal offences which would normally be heard in the magistrates’ court in the civilian criminal justice system. Six-member boards will deal with the relatively small number of disciplinary offences carrying a sentence of over two years’ imprisonment, such as assisting the enemy or mutiny, as well as criminal conduct that would normally be tried in the Crown Court. We do not anticipate that lowering the threshold for when a six-member board is required—when the offence attracts a punishment of more than two years—will place an additional resourcing burden on the single services, with the existing pools of personnel provided for court martial services sufficient to meet the new requirement. However, we will monitor the situation for the first 12 months after introduction, in the same way as the other changes we are introducing to how the court martial operates, and consider whether any adjustment to this approach might be required.
The second rule change, to introduce a new Rule 30, has its background in the “pingdemic”—fondly remembered by many of us—which occurred during the Covid pandemic and which highlighted the concern that three-member boards hearing cases lasting several days can be vulnerable to the unexpected loss of one member. To deal with this, the Armed Forces Act 2021 gave judge advocates the power to add a fourth member to a three-member board to make it more viable and anticipate the board being affected by the loss of a member. The new Rule 30 details when this power can be used. Judge advocates have a wide discretion to appoint an additional member whenever they feel it to be necessary in view of the expected length or location of the proceedings. This approach is closely based on the existing Rule 30, which currently allows up to two additional members to be appointed in cases expected to last more than 10 days, or five in the case of trials being heard outside the United Kingdom and Germany.
The third rule change, new Rule 30A, follows on from the second and implements another of His Honour Shaun Lyons’s recommendations: that there must be a mechanism to cope with the death, sickness or other absence of a member occurring during a trial, which would reduce a six-member board to five members. This would reflect Section 16 of the Juries Act 1974, under which the default position is that a Crown Court trial continues despite the loss of up to three jurors, but the judge can instead choose to discharge the jury. New Rule 30A gives judge advocates the power to direct that the proceedings with a four or six-member board should continue
“in the interests of justice”,
despite the loss of a member, and that this direction may be made at any point after all the members have been sworn in.
The final rule change relates to changes made to the Armed Forces Act 2006 by the Armed Forces Act 2021 allowing personnel at other ranks—OR7—to sit as members of the court martial. These are senior non-commissioned officers, such as chief petty officers, staff or colour sergeants, flight sergeants and chief technicians. This was another recommendation made by His Honour Shaun Lyons. Currently, only officers and warrant officers may be members of a court martial and, unlike a jury in the Crown Court, the members assist the judge advocate in sentencing. Sentencing within the service justice system has a number of purposes: not least punishment, deterrence and the maintenance of discipline. OR7 ranks have the experience and an understanding of command and rank, and are well placed to be involved in the sentencing exercise, something that civilian juries do not participate in.
Extending eligibility for board membership to OR7s will also mean that the single services have a wider pool of experienced personnel to draw on. Your Lordships will recall from our debate on 18 October that this measure will also help with the new rule to increase the representation of women on court martial boards. It may also reduce the burden on officers required on boards where the defendant is of another rank. The existing rule about all members being senior to the defendant is unchanged, meaning that OR7 personnel will be able to serve on boards hearing cases only where the defendant is of the same or a lower rank.
The new rule will allow for one OR7 on a six-member board. This means that on any six-member board, there can be no more than two warrant officers, or one warrant officer and one OR7. For three-member boards, there can be either one warrant officer or one OR7. We believe that this balance of rank will ensure that the board has a broad range of experience and perspective on which to draw during their duties.
As I said, three of these four rule changes were recommended to the department by His Honour Shaun Lyons, a highly respected retired senior Crown Court judge, and the other rule change reflects a sensible business continuity measure for three-member boards. As such, I trust that noble Lords will feel able to support the approach we have taken with this statutory instrument. I beg to move.
Baroness Smith of Newnham (LD)
My Lords, again, from these Benches, this statutory instrument seems wholly appropriate. In particular, bringing service justice closer to the civilian system and the parallels with the Crown Court seem wholly welcome. Obviously, there are reasons why courts martial can be necessary, and some degrees of detail will inevitably be different from civilian courts. However, the more we can have something that looks very much as though it brings parity and a clear sense of justice is hugely important.
I wanted to ask about bringing in senior NCOs. The Minister mentioned the statutory instrument of a couple of weeks ago, when she talked about bringing women in as lay members. To what extent is there a danger that women NCOs could find themselves brought into more courts martial than others? Could that be an undue pressure?
Other than that, there is nothing to do other than to look forward to the review of this measure in a year and, if we remember, to look at it again in 2026, when we have the quinquennial review.
Lord Tunnicliffe (Lab)
My Lords, I thank the Minister for introducing this SI. We totally support it, because we believe it to be consequential. I have two questions, although she may have answered both, but, for the avoidance of doubt, are the numbers in this SI the same as the numbers from the Lyons review? I think they are but I would value the Minister saying so. I also wanted to ask what an OR7 rank was, because it is not clear from the Explanatory Memorandum. One rule of Explanatory Memorandums is that they are supposed to be legible and understandable by a reader who does not have prior knowledge. It fails on that point, but we now know who it is.
Baroness Goldie (Con)
I thank the noble Baroness, Lady Smith, and the noble Lord, Lord Tunnicliffe. I am grateful to the noble Baroness for recognising—it has sometimes been a difficult argument to advance—that the service justice system operates for a specific purpose in a very different environment. I welcome her acknowledgement of that. As she rightly said, we have been trying to ensure that the service justice system draws on the best practice and experience of the civilian justice system and Home Office police forces, to ensure that we are using the best examples and templates that we can find. I am grateful to her for highlighting that.
The noble Baroness asked a fair question about women. I guess that the nub of the question is whether they will have to work harder, as there are fewer of them, and it could place pressure on them. That is a very perceptive question. The change is being introduced in a way that means any impact on women is limited and proportionate. She will remember that the change we have already agreed is that there should be one woman on each board. Because it will impact only on ranks of OR7 and above of women in the Armed Forces, since service personnel below that rank are not eligible to sit as lay members, it is a manageable working proposal. There will be a 12-month exemption for women who have already sat on a court martial board for more than five working days, to prevent women repeatedly sitting on boards. We think we have reached a manageable proposition, but we will monitor the impact of the change—I reassure noble Lords about that—for at least 12 months. If we identify any adverse impacts, we will then decide what action we need to take to address them. I hope that that reassures the noble Baroness.
The noble Lord, Lord Tunnicliffe, asked specifically about OR7 ranks. I gave a generic description in my speaking notes, but paragraph 2.1 of the Explanatory Memorandum states that
“chief petty officers, staff corporals, staff sergeants, colour sergeants Royal Marines, flight sergeants and chief technicians (‘OR-7 ranks’) can sit as lay members.”
Lord Tunnicliffe (Lab)
I apologise to the Minister— I should learn to read more carefully.
Baroness Goldie (Con)
The noble Lord is very gracious. Not reading things carefully is not a charge that I would ever level at him; it has been my uncomfortable experience to find that he reads things very carefully indeed.
The final question that the noble Lord posed was about whether these numbers reflected the Lyons recommendations, and I am told yes—this statutory instrument is as His Honour Shaun Lyons recommended.
I hope I have dealt with the points raised and I commend the instrument to the House.
Nationality and Borders Act 2022 (Consequential Amendments) (No. 2) Regulations 2022
(2 years ago)
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Lord Sharpe of Epsom
That the draft Regulations laid before the House on 13 October be approved. 15th Report from the Secondary Legislation Scrutiny Committee
The Parliamentary Under-Secretary of State, Home Office (Lord Sharpe of Epsom) (Con)
My Lords, keeping the public safe is a top priority for the Government. Deprivation of citizenship, where it is conducive to the public good, is reserved for those who pose a threat to the UK or whose conduct involves very high harm. It is key to our ability to preserve the UK’s national security. Noble Lords will recall that the deprivation measures in the Nationality and Borders Act 2022 attracted much considered and thorough debate. This House and the other place agreed that in cases where the Secretary of State intends to make a deprivation order on the grounds that it is conducive to the public good, without giving notice, an application must be made to the Special Immigration Appeals Commission, which will consider the Secretary of State’s reasons not to give notice.
Implementation of this process requires amendments to the Special Immigration Appeals Commission (Procedure) Rules 2003, which are made and amended by the Lord Chancellor. To create the necessary power to amend these rules we first need to amend the Special Immigration Appeals Commission Act 1997, which is the purpose of this instrument. Today, we are taking a significant step toward implementing the safeguards created in the Nationality and Borders Act 2022 that this House agreed to. I therefore trust that noble Lords will support the draft regulations and I commend them to the House. I beg to move.
Lord Paddick (LD)
My Lords, I thank the Minister for explaining this statutory instrument. As he said, deprivation of citizenship, particularly without notice, is a very serious issue. We fought hard to get the safe- guards in the Nationality and Borders Act in place. We are concerned about any move away from open justice, but we understand that there may be circumstances where a refusal of entry as a worker may require a hearing before the Special Immigration Appeals Commission. My reading of the other regulation is that it is a technical change, and on that basis we support these regulations.
Lord Coaker (Lab)
My Lords, we opposed the clause in the Act that sought to extend the power of the Secretary of State to deprive citizenship without giving a reason or telling a person that it has happened. We voted to remove that clause, as we were not convinced by the Government’s arguments that the power they were seeking was just and proportionate. However, we supported significant amendments, as the noble Lord, Lord Paddick, has just pointed out, which were accepted by the Government, to add safeguards to the process. I pay tribute to the noble Lord, Lord Anderson of Ipswich, for his leadership on those amendments. As far as that is the case, we accept that the regulations before us today comprise one of those necessary and proportionate safeguards being implemented.
I remind the Chamber that the amendments of the noble Lord, Lord Anderson, restricted the range of circumstances in which notice can be withheld, introduced various judicial safeguards and said that the Secretary of State should review those safeguards. The Explanatory Memorandum states:
“This instrument is the first stage in establishing”
the process of application to SIAC and:
“Once the procedure rules are made … applications … can commence.”
We would like to know the timeline for this. How many other stages are there, given that the Government say this is the first stage and given the controversy there was about the introduction of this power and the fact that the House voted for the inclusion of these safeguards, which enabled the clause to be passed? When are all these safeguards going to be put in place? Can the Minister explain what the current procedure is? Is there any use of this power at the moment without these safeguards?
With those brief comments, we support this SI as proposed by the Government.
Lord Sharpe of Epsom (Con)
My Lords, I am very grateful for this short debate. I appreciate the strength of feeling about deprivation of citizenship, but I feel I need to repeat what I said earlier: maintaining our national security is a priority for this Government. On the specific point made by the noble Lord, Lord Paddick, this is very much about the mechanics of how a deprivation decision is conveyed to the individual concerned, and it recognises that it may not be possible to give notice in certain exceptional circumstances. The noble Lord, Lord Coaker, asked specific questions about when it starts. I cannot answer him at this moment, so I will write on that point, and to explain more clearly exactly how it happens now, if that is acceptable.
Lord Coaker (Lab)
I am sorry to interrupt the Minister. Given the importance of this issue, will he place a copy of that letter in the Library? I think all noble Lords would like to know those answers.
Lord Sharpe of Epsom (Con)
Absolutely; I am very happy to do that.
Given that we seem to have arrived at a conclusion, to finish, this instrument is the first step in creating the important safeguards which will hold the Government to account in relation to decisions to deprive a person of citizenship without giving them notice. As I said earlier, a separate instrument amending the Special Immigration Appeals Commission (Procedure) Rules 2003 will be laid in due course, but for now I beg to move.
Police, Crime, Sentencing and Courts Act 2022 (Offensive Weapons Homicide Reviews) Regulations 2022
(2 years ago)
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Lord Sharpe of Epsom
That the draft Regulations laid before the House on 13 October be approved. 15th Report from the Secondary Legislation Scrutiny Committee
The Parliamentary Under-Secretary of State, Home Office (Lord Sharpe of Epsom) (Con)
My Lords, keeping people safe is the Government’s top priority. We must use every tool at our disposal to stop lives being lost to serious violence. Offensive weapons homicide reviews were introduced by the Police, Crime, Sentencing and Courts Act 2022 to support local agencies in working together to identify lessons that will help prevent future deaths. The Act places a duty on the relevant review partners to conduct an offensive weapons homicide review in certain circumstances where a person aged 18 or over dies and an offensive weapon was used. It is the intention to pilot these new reviews for a period of 18 months, beginning in early 2023, in specified areas in London, the West Midlands and Wales before any national rollout.
The regulations provide that the relevant review partners will be the local authority, police, and integrated care boards in England, or local health boards in Wales, from the area where the death occurs or, where the location of death is not known, where the body of the person is found. The regulations are intended to provide them with the detail they need to establish when a review must be carried out. The regulations clarify that not every homicide involving an offensive weapon will necessarily require a review. It will be necessary for one or more of the review partner agencies to have or reasonably be expected to have relevant information about the circumstances or background of the victim or suspected perpetrator that is likely to be pertinent to the purpose of the review. This will ensure that resources are not directed to cases where little or no relevant learning is likely to be found. It will also capture homicides where the identity of the victim or a suspected perpetrator is known, ensuring that homicides with circumstances that suggest that lessons can be learned to help prevent future homicides should qualify.
The regulations will allow the Secretary of State to direct which partners are the relevant ones to conduct a review, should there be uncertainty in any case. While we do not expect this power to be used often, it is important in ensuring that there are no instances where there is nobody responsible for leading the review. The regulations also make it clear that a review is not required where the death is a
“death or serious injury matter”
within the meaning of Section 12(2A) of the Police Reform Act 2002. This will exclude deaths caused by a police officer who, in the course of their duties, uses an offensive weapon and an individual dies. This will be subject to an investigation by the relevant police force or the Independent Office for Police Conduct. Finally, the regulations allow the review partners to delegate specified functions to one of themselves or to another person, including a third party, to lead or chair the review.
Reducing homicide and serious violence is a top priority for the Government. These draft regulations, in supporting the introduction and piloting of new offensive weapons homicide reviews, will deepen our understanding of serious violence, improve our response to it and, ultimately, save lives. I beg to move.
Lord Paddick (LD)
My Lords, again, I am very grateful to the Minister for explaining these regulations. The Explanatory Notes say that the pilot areas are south Wales, parts of London and the West Midlands. My understanding is that it is Barnet, Brent, Harrow, Lambeth and Southwark in London, and the Birmingham City Council and Coventry City Council areas in the West Midlands. Can the Minister explain why these particular areas were selected? I notice that they are different from the areas for the proposed pilot of serious violence reduction orders, for which the police force areas involved are the West Midlands, Merseyside, Thames Valley and Sussex. While I am here, let me say that I am very grateful to the Minister for agreeing to a deferment of consideration of the regulations in connection with serious violence reduction orders.
So, how were the pilot areas selected? Why are they not coterminous with the responsibilities of local police and crime commissioners or elected mayors, bearing in mind that those individuals have responsibility for crime reduction and that appears to be the primary purpose of conducting these reviews? What proportion of offensive weapon homicides is expected to be contained within the pilot areas, compared with the total number of homicides involving weapons?
The Explanatory Notes say that the Government estimate that 72 offensive weapon homicides will occur in the 18-month pilot period in the pilot areas, costing £12,354 for each review. As I have said in the House before, mathematics is not my strong point, but I make that £889,488, yet the total cost is estimated at £2.1 million. How much does it cost to recruit and train the oversight board and the secretariat that more than doubles the cost of each individual review? How much do the Government estimate that it will take to recruit and train the oversight boards annually, bearing in mind that there is bound to be a turnover of personnel within them? Can I also ask the Minister where the funding for these reviews is going to come from, both for the pilot scheme and if the scheme is rolled out nationally? What is the estimated total annual cost if the reviews are rolled out nationally?
The Explanatory Memorandum states:
“The final condition for a review will aid in ensuring that cases are not required to be reviewed where little or no learning is likely to be found.”
Can the Minister explain who makes that decision? What is to stop the police, for example, deciding that no review should take place in order to cover up mistakes or deficiencies in their handling of the case, or the mistakes or deficiencies of any other agency? What happens if other partners believe a review is necessary, but one partner, say the police, decides not to participate? The Minister talked about not wanting to have reviews where that would be a waste of resources, but surely there could be a very short review in every case to see whether there is any learning, and that review could then be terminated at little cost. If that is the case, why is a review not mandated in every case of a knife crime homicide, as it is in the case of homicides involving the death of a person under 18?
We support the idea of a pilot in a limited geographic area which will examine whether there are benefits to be accrued from these reviews, but I would appreciate either now or in writing answers to the questions I have raised.
Lord Coaker (Lab)
I join the noble Lord, Lord Paddick, in thanking the Minister for the withdrawal of the SI with respect to serious violence prevention orders. He is to be commended for that, and we are very grateful that he has thought again about it.
We supported these provisions to extend homicide reviews to offensive weapons cases during the passage of the Police, Crime, Sentencing and Courts Act and we welcome that the provisions are being piloted before being rolled out. We also welcome the fact that the Act requires the Secretary of State to report to Parliament on the operation of the pilot before a further rollout can take place. Again, that is a very sensible way forward for this legislation.
To build on some of what the noble Lord, Lord Paddick, asked, the Explanatory Memorandum states:
“It has been estimated that 72 OWHRs may take place across the pilot areas throughout the 18 month pilot.”
It would be interesting to know how the Government have worked that number out, and again, as the noble Lord, Lord Paddick, asked, how the various pilot areas have been identified by the Government.
On funding, the Explanatory Memorandum states that the number of anticipated reviews
“includes a 20% optimism bias to ensure funding for all necessary reviews is available. Costs to the Home Office per review have been estimated as £1,222 to each of the three relevant review partners (totalling £3,666) and £8,688 for an independent chair.”
Again, how have those figures been arrived at? For clarity, can the Minister confirm that the review partners will be fully funded by the Home Office for their work on such reviews, and does that include staffing costs?
One of the issues raised during the Bill’s passage was that recommendations made in existing reviews, such as domestic homicide reviews or indeed the under-18 reviews that the noble Lord, Lord Paddick, just referred to, are too often not acted on or shared as they should be to force change and create improvement. That is the whole point of the reviews: to inform practice and for people to learn.
I know that the Government intend to establish and fund the Home Office oversight board to oversee the introduction of the offensive weapon homicide reviews and to monitor and implement recommendations. The Explanatory Memorandum references the funding of the oversight board. However, can the Minister give us any other details about the crucial point? Once the review has happened and various recommendations have been made, how are those recommendations to be followed through so that the learning from the review is implemented by all the various partners? It would also be interesting if the Minister could say a little more about what the membership of that oversight board is likely to be and whether there are any functions that he could share with us. On relevant review partners, they can appoint a lead agency or an independent chair to take forward the review. Will all relevant review partners involved in a particular case be required to agree to this course of action?
I will address just a couple of specifics from the legislation—I know it is unusual in the Chamber, but this is effectively an SI that would normally be in Grand Committee. Part 2 of the legislation deals with the duty to arrange an offensive weapons homicide review. The noble Lord, Lord Paddick, made a really important point: who triggers the review? It is not clear to me from reading Part 2 of the legislation who does it. It just talks about all the various partners. However, somebody has to say that there should be a review and seek to have one take place. I do not know whether the noble Lord or any other Members of your Lordships’ House noticed that, but I could not see it. Unless I have misread it, not understood it or not seen it somewhere, I cannot see who triggers that review. That is important for the reason that the noble Lord mentioned. If it is a chief police officer, what happens if, bluntly, they do not want to, or it is the local authority and it does not want to, or it is the health body, which is the other statutory partner, and it does not want to because it is not in its interests?
For reasons of transparency, the difficult questions sometimes need to be asked. People would rather they were not asked, and it is not clear to me from reading Part 2 who has the duty to do that and what happens if they do not fulfil that duty when other partners think they should. It would be helpful if the Minister could explain that to us.
As I said, given that this is equivalent to what would normally take place in the Grand Committee room, I want to ask about the conditions that may trigger a review obligation. The conditions are that
“one of the following has been located— … the body of the person who died”;
I understand if the body of the person who died is located, but, for the second trigger, it says,
“or part of the body of a person who died.”
I am not trivialising this, but what do we mean by a part of a body? Without going into detail, fairly obviously, there is a difference between the whole of a top half and a toe. Again, I am not trivialising this, but it would be helpful for our understanding of the legislation to know what a “part” means.
I join the Minister and, no doubt, every Member of your Lordships’ House, in saying that we all want a reduction in the level of homicides, for whatever reason. Hopefully, a review of what has happened with respect to homicide through the use of offensive weapons will inform practice in future which will lead to a reduction in the number of homicides. On that, can the Minister tell us what is the trend at the moment for the number of homicides using offensive weapons, so that we have some understanding of the scale of the problem?
Lord Sharpe of Epsom (Con)
Once again, I thank noble Lords for their thoughtful contributions and questions, and I shall do my very best to answer all the points raised.
Both noble Lords asked about the pilot areas. It will perhaps help if I clarify what the areas are and how they were chosen. In London, as the noble Lord, Lord Paddick, highlighted, they are the boroughs of Barnet, Brent, Harrow, Lambeth and Southwark. In the West Midlands, they are Birmingham and Coventry, and in Wales it is the South Wales Police force area, which includes Swansea, Neath, Port Talbot, Bridgend, Rhondda, Merthyr Tydfil, Cardiff and the Vale of Glamorgan. The pilot is being focused on the local authorities within those three areas that, combined and based on historical data over the past five years, it is estimated may expect approximately 50 to 75 homicides of adults involving an offensive weapon during the pilot. I fear I cannot answer the question of the noble Lord, Lord Paddick, about coterminous borders with police and crime commissioner areas, but I will endeavour to find out whether there is an answer and, if there is, I shall write to him.
As for the proportion of homicides, that is a very good question. In 2021-22, there were 709, so it is up to about 10%, notionally, covered by the areas of the pilots. I would say that the homicide levels of recent years have been affected by the pandemic, and the numbers are skewed by mass victim incidents, to some extent. In 2020-21, obviously Covid-affected, there were 568 homicides. In 2019-20, there were 716, but 39 of those involved the lorry in Essex. The numbers are a bit confused in that way. I will endeavour to find out how many involved serious weapons, because, unfortunately, I do not know the answer—I apologise.
Both noble Lords asked about the relevant review partners and how they were identified. As I said, homicide reviews are intended to be an important tool in helping local partners tackle serious violence and homicide. When a death occurs in an area, it is right that the review partners in that area are involved in the review of the death. They will provide the local intelligence and help spot local patterns and trends and identify opportunities to intervene and prevent future deaths. Local partners are most likely to be involved in the lives of those involved in the death, to have information relevant to the question of whether a review is required and to identify opportunities for interventions in future.
We therefore think it important that the responsibility for establishing and conducting these reviews rests with local partners. By reducing ambiguity as to who those partners are, we are ensuring that the reviews begin as soon as possible following the death, while Section 29 of the Act provides the assurance that, if individuals involved in the death live or lived in other areas, an input is required from those other areas; that relevant information can be disclosed to them for the purpose of the review.
In terms of what happens if one of the review partners refuses to conduct a review, again, I am afraid that I will have to write to noble Lords because I am not quite sure of the answer.
Lord Coaker (Lab)
That is a really important point, so I thank the Minister for referring to it, but who starts the process? The Minister talked about somebody refusing to take part, but who kicks the process off? Who says, “We should have a review”? Is it any of them? I do not understand the process for that.
Lord Sharpe of Epsom (Con)
I understand the question. I will write to the noble Lord on that, if I may, to make sure that I do not get it wrong; I think I have the answer, but I would not want to give incorrect information.
Both noble Lords asked how the Home Office oversight board will work. It will be a non-statutory committee composed of experts in safeguarding, homicide, serious violence and public protection. They will oversee the local delivery of the offensive weapons homicide reviews, monitor the implementation of any findings and support the dissemination of learning both locally and nationally. We are currently in the process of appointing the chair and first member of the board with the final six members due to be in place for early 2024, ready for when the first OWHR reports are received.
The purpose of the oversight board is to oversee the local delivery of the reviews; to ensure consistency in criteria and approach by reviewing and assessing completed reviews; to draw together the reviews at a national level to assess and disseminate common learnings, themes, issues in service provision and areas of good practice at set intervals; to monitor the regional and national application of learning and the implementation of recommendations in policy, approach and delivery; and to share best practice and wider insight through learning events and opportunities. The membership will include representatives from areas such as local government, public health, the police, education, the voluntary and community sectors, probation services and the Crown Prosecution Service, as well as a representative from one of those areas with experience of working in Wales.
Both noble Lords asked about the funding for the reviews. The Home Office will provide the funding for the relevant review partners and the work they carry out to deliver an offensive weapons homicide review during the pilot. It will also meet the cost of the oversight board that I have just described. If the policy is rolled out nationally, the funding arrangements will be confirmed after the pilot. The costs of a homicide review vary as every homicide has a unique set of circumstances; each review will have to account for these. Based on existing reviews, we estimate that a homicide review will have an average cost of £12,354. We also anticipate that the Home Office oversight board will cost approximately £230,000 over the course of the 18-month pilot. Review partners will receive funding to cover the cost of work that they carry out in establishing and running these homicide reviews during the pilot, and details of how the budget will be allocated will be confirmed as the pilot is designed with local partners.
I think I have answered the questions I am able to—
Lord Paddick (LD)
I am slightly confused about the figures that the Minister gave. I think he referred to the death of a large number of migrants in the back of a lorry skewing the homicide figures. I asked about the proportion of offensive weapon homicides in the pilot areas compared with the number of offensive weapon homicides in total, unless—I think this would be rather unusual—in the case of the deaths in the back of a lorry, the lorry was considered to be an offensive weapon, which I am sure it is not.
Lord Sharpe of Epsom (Con)
No, that is not what I meant to imply. I do not have the numbers on homicides involving offensive weapons; I have committed to write to the noble Lord, Lord Coaker, on that, so I will of course copy the noble Lord in.
I thank noble Lords for their constructive and helpful questions. These regulations represent an effective, balanced approach for offensive weapons homicide reviews. By improving our understanding of the circumstances, drivers and causes that lead a person to take another person’s life, we can, I hope, improve our ability to tackle homicide and ultimately save lives. On that basis, I commend the regulations to the House.
Merchant Shipping (Control of Harmful Anti-Fouling Systems on Ships) Order 2022
(2 years ago)
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Baroness Vere of Norbiton
That the draft Order laid before the House on 17 October be approved.
The Parliamentary Under-Secretary of State, Department for Transport (Baroness Vere of Norbiton) (Con)
My Lords, the purpose of this order is to give the Government the powers we need to implement amendments to the International Maritime Organization’s International Convention on the Control of Harmful Anti-Fouling Systems on Ships, 2001—which I will refer to as the convention—into law. The order relies on powers in Section 128(1)(e) of the Merchant Shipping Act 1995. The draft order was laid before the House on 17 October 2022. If approved, the powers in the order will be used to make a new statutory instrument next year to implement the convention amendments. The order will also allow the convention to be entirely reimplemented in regulations, should that be necessary.
Before continuing, I will give some background on what the Government have done regarding the convention and outline our reasons for wanting to implement amendments to it. I reiterate that the draft order before your Lordships’ House is a mechanism to provide the powers for the implementation of amendments to the convention, rather than an instrument to implement the amendments themselves. Any subsequent secondary legislation using powers under this order to implement the amendments will come before your Lordships’ House in the usual way and following a public consultation.
The convention entered into force internationally on 17 September 2008 and the United Kingdom acceded to it in 2010. It aims to protect the marine environment and human health from the adverse environmental effects of anti-fouling systems used by ships. An anti-fouling system is a coating, paint or surface treatment that is used by a ship to control or prevent the attachment of unwanted organisms to that ship. The convention addresses the harmful impacts of anti-fouling systems by prohibiting the use of certain substances in those systems. In 2021, the International Maritime Organization adopted amendments to the convention to prohibit the use of a new compound in anti-fouling systems, and these will come into force on 1 January.
As the convention took effect 14 years ago, noble Lords may ask why the Government are only now seeking powers to implement amendments to it. The reason for this is that the convention was already implemented, and therefore enforced, in the UK by a combination of a European Commission regulation and the Merchant Shipping (Anti-Fouling Systems) Regulations 2009. However, both these instruments derive from EU powers and now comprise EU retained law. Consequently, implementing the convention amendments relating to this one new substance through these instruments would now require primary legislation. Therefore, to implement these amendments more efficiently into UK law, we need to introduce an Order in Council to provide the powers required for this purpose, which we will then do. The Government consider that the implementation of the convention amendments into law is an important step to ensure that the UK continues to comply with its international obligations.
The convention and its subsequent amendments were negotiated at the IMO by representatives of the Government, the shipping industry and environmental interest groups. The Maritime and Coastguard Agency, or MCA, played an active role in the negotiations at the IMO throughout the development of the convention and its amendments. The Government’s proposals for implementing the amendments to the convention by way of a new statutory instrument will be the subject of a public consultation.
Noble Lords will recall that the House considered something similar some time ago, when we looked at Section 128(1)(e) of the 1995 Act as a mechanism to change the regulations by secondary legislation when it comes to matters relating to pollution. That, in essence, is what we are doing again; we are giving ourselves a power to introduce secondary legislation when there are amendments to the anti-fouling convention.
I hope that that is fairly straightforward, but I am content to answer any of noble Lords’ questions. I beg to move.
Baroness Randerson (LD)
My Lords, I thank the Minister for her explanation. Clearly, we welcome any steps to prohibit the use of harmful chemicals in anti-fouling systems. The sooner those steps are taken, the better.
As the Minister said, this relates to a convention and decisions taken some considerable time ago. It gives the Secretary of State powers to make regulations to implement the 2001 convention and subsequent amendments. I have two brief questions for the Minister. First, she gave an explanation that related to the need to use different powers at this point because we have now left the EU, whereas we relied previously on EU legislation. I therefore wish to quibble about paragraph 8.1 in the Explanatory Memorandum, which says:
“This … does not relate to withdrawal from the European Union”.
It does relate to withdrawal from the EU, as so much does, and it is worth explaining how.
Secondly, the Minister referred—I think, though I might have misheard—to getting the regulations on the statute book by next year. Is that what she was saying? I very much hope that that is the case and that the department is being ambitious on this. I would not like to see this legislation—which should surely be uncontroversial—going to the back of the maritime queue. The sooner it can be done, the better. Having made those brief comments, I support the SI.
Lord Rosser (Lab)
My Lords, I too thank the Minister for her explanation of the purpose and objectives of this SI, which enables the Secretary of State to make regulations to give effect to the International Convention on the Control of Harmful Anti-fouling Systems on Ships, 2001. The objective of the convention is to protect the marine environment and the health of human beings from the adverse effects of anti-fouling systems. It does this by prohibiting the use of certain substances in these systems, or at least prohibiting their use on the outer coating of the hull of a ship.
As has been said, the convention was adopted in 2001 and came into force internationally in 2008. It was implemented by the UK through the adoption by the European Commission of a regulation of the European Parliament and the Council of 2003, and by a further regulation in 2009. An annexe to the convention prohibits the use of specified substances in anti-fouling systems, including an additional new specified substance which is prohibited from the beginning of next year.
According to the Explanatory Memorandum,
“the Convention will protect United Kingdom waters from harmful effects of the use of prohibited substances on United Kingdom ships and non-United Kingdom ships visiting the United Kingdom.”
I assume that this is the case, but could I check that the convention applies equally in international waters?
As has been said, on the face of it, the provisions of the convention have taken a long time to be brought into effect. Although the Minister did go some considerable way to answering the point, it would be helpful to have it confirmed again, so I will repeat the question: is that the reality, and if so why? Or is the reality, as I believe it to be, that the terms of the convention have been applied in UK waters for some years, and that the reason this SI is needed relates to our withdrawal from the EU, despite, as the noble Baroness, Lady Randerson, pointed out, paragraph 8.1 of the Explanatory Memorandum maintaining that this instrument does not relate to withdrawal from the European Union?
The fact that the instrument appears related to our withdrawal from the European Union is strengthened by the fact that the Explanatory Memorandum states that no impact assessment has been prepared because the instrument
“has no impact on the cost to business”,
including small businesses. That presumably means that no expenditure is considered necessary by any party affected to meet the terms of any regulations the Government might make to give effect to the convention. Or is the argument that it is the regulations the Secretary of State will make that will incur additional costs and not this instrument, which enables the Secretary of State to make such regulations, which is why the Explanatory Memorandum says that there is no impact on the cost to business?
Baroness Vere of Norbiton (Con)
I welcome the noble Lord, Lord Rosser, back to his rightful place. There were quite a number of questions there, some of which I definitely cannot answer but some of which I will do my best so to do. I will of course write, particularly on his wider question about the impact of anti-fouling systems on human health and the maritime environment. I will make sure that we can bring together all the evidence we have to show the harm that this convention has prevented.
The noble Lord also asked a number of questions on the number of offences, convictions and penalties to date relating to regulations that have already been passed and are on the statute book. I will certainly have to write with the details of that because it would extend back many years.
The noble Lord asked for a typical example of which route a recalcitrant ship owner might end up going down. That will depend on the regulations which are yet to be made. He also asked whether there is a precise date next year when these regulations will be in place. There is not yet because there needs to be a public consultation. My priority is to get the public consultation kicked off to see what the industry and other interested parties have to say, but we will certainly be working rapidly to get the regulations in place once we are satisfied that the public consultation has drawn out all the issues that need to be drawn out.
Some noble Lords may rightly say, “Hang on a minute, isn’t this the substance?” Cybutryne is the substance that will be under consideration for this order. It will be banned from anti-fouling systems from 1 January 2023, but that applies to brand-new ships only, and there is a limit to how many brand-new ships come out of shipyards. Therefore, although I accept that we will not quite make the 1 January deadline, I do not feel that we will be missing many ships. If a ship is brand new, this anti-fouling substance is already banned so I doubt that it would have it painted on the hull. Existing ships will need to replace their current anti-fouling systems in accordance with the new requirements when they next undergo a survey, which would need to take place within 60 months of the last application of an anti-fouling system.
Enforcement of this order, as is the case with so many maritime instruments, comes under the remit of the Maritime and Coastguard Agency, which applies sanctions as appropriate. There is a range of sanctions and it depends on the severity of any contravention. I will write about circumstances in which a ship would be detained. That is, of course, towards the more radical end of interventions. There are also prohibition notices, fines and, as a very last resort, prosecution. I will write with more information on how many contraventions have occurred.
Lord Berkeley (Lab)
When the Minister writes to my noble friend—it is great to see him back in his place—will she also say whether there are any geographical differences in where these ships might be used in relation to whether they have to comply, such as rivers, coastal waters or mid-Atlantic?
Baroness Vere of Norbiton (Con)
I will certainly ensure that all that is included. As for the impact of the EU, I suspect we could quibble all day about whether this is because of the UK leaving the EU. The simple fact is that we had no mechanism for putting these amendments into place, and that is the nature of the order that we are putting into place today.
On the impact assessment, the noble Lord, Lord Rosser, was right that this order has no impact per se because no subsequent regulations have been made. Indeed, in future other substances will probably be banned. Each one should clearly be taken into consideration and its impact assessed individually; otherwise we cannot see what will happen in future. At this time, no impact assessment is associated with this order as there are no costs. A de minimis assessment will probably be prepared for the implementing regulations, but work will have to be done by our analysts to confirm that that would be the right way forward. I have committed to write. I accept that there were some questions that I should have known the answer to, but I did not. I commend the order to the House.
Drivers’ Hours, Tachographs, International Road Haulage and Licensing of Operators (Amendment) Regulations 2022
(2 years ago)
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Baroness Vere of Norbiton
Moved by
That the draft Regulations laid before the House on 5 July be approved. 10th Report from the Secondary Legislation Scrutiny Committee.
The Parliamentary Under-Secretary of State, Department for Transport (Baroness Vere of Norbiton) (Con)
My Lords, these draft regulations will be made under the powers conferred by Section 31 of the European Union (Future Relationship) Act 2020.
The regulations implement fully some of the international road transport provisions in the trade and co-operation agreement between the European Union and the United Kingdom, entered into on 30 December 2020 and known as the TCA. These regulations are mainly about drivers’ hours and tachograph rules for most commercial drivers of lorries and coaches, but also involve the area of international haulage access to the UK.
Section 29 of the European Union (Future Relationship) Act 2020 provides a general implementation clause under which domestic law, including EU regulations retained as UK law, is, where necessary, interpreted in order to implement the TCA. On top of this, the changes being considered by your Lordships’ House today will normalise the relevant TCA provisions into UK domestic law to provide legal clarity. This will also enable UK enforcement officers to enforce against EU commercial drivers of in-scope lorries and coaches operating in the UK.
First, these regulations amend the retained EU Regulation 561/2006, which sets out driving time rules for commercial drivers. Secondly, they amend the retained EU Regulation 165/2014, which sets out rules around the installation and use of tachograph devices—recording devices used for the enforcement of driving time rules. Thirdly, they amend the retained EU Regulation EC 1072/2009, which sets out the rules on cabotage movements. They also amend the domestic Goods Vehicles (Licensing of Operators) (Temporary Use in Great Britain) Regulations 1996, which set out the rules for non-GB operators’ access to GB roads.
The EU drivers’ hours and tachograph regulations are central to keeping our roads safe and were retained as UK law by the European Union (Withdrawal) Act 2018. The retained EU drivers’ hours regulations set maximum driving times and minimum break and rest times for most commercial drivers of lorries and coaches. The consequences of driving any vehicle when fatigued can be catastrophic, of course.
The rules are enforced by the Driver & Vehicle Standards Agency and the police at targeted roadside checks, and by visiting operators’ premises. The principal tool used by enforcement officers is the record generated by the tachograph. The tachograph is a device installed in relevant vehicles that records the driving, rest and break times of the vehicle and its drivers.
The EU cabotage regulation was also retained as UK law by the EU withdrawal Act. For those unfamiliar with cabotage, it is the transport of goods between two places within a single country by a haulier registered in another country. Since 1 January 2021, international market access for hauliers operating between the UK and the EU has been governed by the trade and co-operation agreement. The general implementation clause in the future relationship Act means that domestic legislation has effect so as to implement the commitments in the TCA. However, in order to enable full and effective enforcement, in this case including in relation to visiting EU haulage operations, it is important to align the domestic legislation fully with the TCA’s provisions.
There are three broad categories of amendments that these draft regulations are making. The draft regulations will amend the retained EU drivers’ hours and tachograph regulations to include some specific international road transport aspects that were not required in the context of a no-deal exit from the EU without the TCA. That has quite limited effect.
The draft regulations will also amend the retained drivers’ hours and tachograph regulations to introduce prospective changes agreed in the TCA relating to the introduction of the smart 2 tachograph from August 2023. This includes bringing some smaller vehicles over 2.5 tonnes, used commercially for international journeys, into the scope of the drivers’ hours and tachograph rules from 2026.
Finally, the regulations will amend the retained EU cabotage regulation and the domestic goods vehicle operator licensing regulations to reflect the international road haulage access rights in the TCA. Currently, this legislation still reflects some of the market access arrangements from when the UK was an EU member state. However, the retained Regulation 1072/2009 has already been amended to reflect the reduced cabotage rights for EU operators in the UK following their usual type of arrival with an inbound international load. This is very much a tidying-up measure, which relates to undertaking cabotage operations when entering the UK without a load. Of those three areas, the area around the smart 2 tachographs is the most significant. The other two are very minor amendments that we are taking this opportunity to make.
Taken as a whole, this instrument will ensure that we have a level playing field for UK operators by ensuring that the haulage access rights for EU operators precisely mirror the rights given to UK operators in the trade and co-operation agreement. On that basis, I beg to move.
Lord Berkeley
That this House regrets that the draft Drivers’ Hours, Tachographs, International Road Haulage and Licensing of Operators (Amendment) Regulations 2022 introduce a requirement for new tachograph equipment in goods vehicles weighing more than 2.5 tonnes on international journeys without providing evidence of the availability and cost of that equipment.
Lord Berkeley (Lab)
My Lords, I am very grateful to the Minister for her comprehensive introduction to this SI. My reason for tabling this amendment is that, when the SI was tabled in July, I came across quite a lot of evidence of a lack of availability of some of the tachographs, lack of information about the costs, and lack of general information and, possibly, training for the people who would have to make this work.
I do, of course, support the regulations, and I congratulate the Government on them, but they have to be workable. Maybe things have moved on since July, but I have a few questions for the Minister which I am sure she will be able to answer. Most of the comments that I heard came from a magazine called Roadway, which comes from the road freight industry. It comments that, since January 2022, the DVSA has changed its approach and is—as the Minister said—enforcing these regulations at the roadside and during operator investigations, which is good. It is interesting that the traffic commissioners are now getting involved, which is also something quite new. Could the Minister say whether there have been any prosecutions yet, and outline how many investigations have been going on?
Secondly, what has the DVSA done to raise awareness of these requirements? I suggest that the Government have an obligation to ensure that these very complex regulations are widely known and understood. Have the drivers been trained to meet these requirements? If they have not, it is not going to work.
Regarding some of the comments in the Explanatory Memorandum, can the Minister give some idea of whether the smart tachographs—version 2—are available, whether they will they fit into all the types of vehicles that they are supposed to fit into, and how much they will cost? If there should be a supply shortage, the whole thing will not work and the Government will get a very bad reputation over it. I assume that the cost of installation is possible. It is often found that some of the bits of equipment that people are required to use do not fit into the vehicle concerned; it also applies to ships, but I will not bring that up today. I know that it is in the future, but light goods vehicles are going to be brought into scope in 2026, which, again, is probably a good thing but will make the equipment more difficult to install.
The next issue—I do not have very many more—relates to what is called triangulation, and cabotage. Paragraph 7.20 of the Explanatory Memorandum refers to
“removing the triangular rights of EU hauliers and the cabotage rights following unladen entry”
into the UK. It says that because this is the same as the reverse on the EU it is probably all right, but is there any intention of trying to renegotiate some of these things? One reads quite often of vehicles, maybe small ones used by theatre clubs or orchestras taking their equipment across when they want to tour many different member states. We have had debates in your Lordships’ House about that, but it is a complex consequence of leaving the EU. It is not a very big problem except for those who suffer it and I hope that the Government will look at that again.
Paragraph 7.22 of the Explanatory Memorandum refers to excluding combined transport. I question why combined transport is excluded, because if the truck happens to be loading or unloading a container from a ship or train that should be included, along with everything else.
Finally, the usual question from me and other noble Lords: if there is going to be a bonfire of EU regulations, are we going to have to go through all this again or will there be a new lot? I am sure the Minister will want to write to me on that, rather than answering today, but I beg to move my amendment.
Baroness McIntosh of Pickering (Con)
My Lords, I will briefly raise some points that follow on from what the noble Lord, Lord Berkeley, has said. They were raised by the Secondary Legislation Scrutiny Committee and are just to put my mind at rest.
In particular, on page 16 of its 10th report the committee raised a number of questions in paragraph Q2. The department seems to agree that these questions are causing some concern, and has confirmed that industry raised these concerns. The committee asked:
“What are industry’s concerns, is it the cost of the new equipment or are there supply issues that will make compliance by the deadline set difficult?”
In its answer, the department says that it is both: the cost of the new equipment and meeting the deadline. Can my noble friend the Minister put my mind at rest on whether the cost issue has now been resolved? Given that the department realises that there will be “only a few months” before the supply and installation “into newly registered vehicles”, can she confirm that the deadline will be met, or will the department be fairly flexible and allow them more time in this regard?
The department says:
“If there is a supply issue it would be felt at European level not just in the UK.”
But obviously the House is concerned about how that is to be addressed in this country. I therefore ask for confirmation: how does the department expect to address this issue of supply? Are we perhaps getting a little ahead of ourselves and should the deadline for when they should be fitted be a little more flexible than it has been?
The department says in its concluding paragraph on question 2:
“The Department will work with industry to raise awareness of the new requirement.”
Perhaps my noble friend will be good enough to tell us how that is to be achieved.
Baroness Randerson (LD)
My Lords, I thank the Minister and the noble Lord, Lord Berkeley, who pays such good attention to government legislation. Some of my comments will reflect his concerns. This is possibly our third attempt at transposing various bits of EU tachograph rules into post-Brexit British law.
I want to use this opportunity, reflecting the noble Lord’s concerns, to express the fact that I am seriously concerned that some bright ministerial spark in a recent Government thought it a good idea to put a sunset clause on all EU law now transposed on to our statute book. That will mean that we have to go through it all over again, having spent so many months on it.
I feel great sorrow for and sympathy with officials and the Minister for the amount of time they must be devoting to finding neat, or less neat, solutions to this issue. It must be a depressing and nugatory experience. Even worse, it is one that, in this case, the business community is queuing up to oppose because it makes its job even harder. I wish we had time to look at the future of transport, as it needs legislation, and plan for the future rather than re-treading the past.
Turning to the detail of this SI, I have some questions and comments. Paragraph 3.1 of the Explanatory Memorandum says that it was originally laid on 23 June then withdrawn on 29 June. Can the Minister explain why it was withdrawn? Was it connected to the lack of version 2 of the smart tachograph? The new smart tachographs are superior because they allow better data exchange so that enforcement officers can download data without stopping the vehicle. It will also be more difficult to falsify the data in future.
If I have understood correctly, it seems that there will be no obligation for older UK vehicles making only domestic trips to have the updated tachographs. Only vehicles travelling to the EU will have to have them. If so, effectively we will have two standards applied to vehicles on our roads. These standards are very much connected, as the Minister made clear, with safety. Driving safely is an issue not only for drivers going to the EU; driving as safely as possible affects every driver on our roads and the tachograph is an essential part of that. I am concerned that we are going to have two separate standards of enforcement and two separate standards of evidence available to enforcement officers. I am also concerned that we will be allowing many people participating in our haulage industry to lag behind the rest of Europe on safety standards.
The amendment from the noble Lord, Lord Berkeley, refers to concerns on timing. As the noble Baroness, Lady McIntosh, made clear, this SI has been subject to a report by the Secondary Legislation Scrutiny Committee. In appendix 2, it states that the
“main tachograph manufacturer will not gain type approval for their version 2 until April 2023”.
Lord Rosser (Lab)
I, too, thank the Minister for her explanation of the purpose and content of these regulations, and for her kind words, as well as those of my noble friend Lord Berkeley, in the previous debate.
We are not opposed to the SI, since the regulations are based on existing requirements made under the trade and co-operation agreement. My noble friend Lord Berkeley has spoken to his amendment to the Motion, which is in line with views expressed by the Secondary Legislation Scrutiny Committee to the effect that:
“The industry has expressed concerns about the cost and availability of the ‘smart tachograph 2’ which is currently in short supply”.
If the Government are opposing my noble friend’s Motion, I assume that in response they will provide evidence of the availability and cost of the new tachograph equipment, what steps they are taking to ensure the required availability of the new tachographs and why they believe that the concerns expressed by my noble friend and the industry will not materialise.
The Explanatory Memorandum reminds us that
“There were availability and timing issues with the implementation of the smart tachograph 1 in June 2019”,
so this is not a new or unexpected issue. The Government’s Explanatory Memorandum states that they came up with a pragmatic solution then, and that:
“If there are difficulties on this occasion, the Department would again work with the Driver and Vehicle Standards Agency and industry to come up with similar pragmatic solutions.”
Would not the best solution, having had prior warning at least three years ago, be to make sure in the intervening period that there would be no similar availability issues? Who makes the new smart tachograph 2, and where? Is it the same organisation that made the smart tachograph 1?
The Explanatory Memorandum also says:
“If there is a supply issue it would be apparent at European level not just in the UK and action at the EU level might be taken.”
That is interesting. The Government went for a hard Brexit to be able to make their own decisions, unencumbered by having to have regard to what the EU thought, wanted or was doing.
The regulations implement parts of the EU-UK Trade and Cooperation Agreement in relation to international road transport provisions in the TCA, including international haulage access to the UK, drivers’ hours rules and the requirement for specific new tachograph equipment—the smart tachograph 2 —in goods vehicles and coaches on international journeys. Some smaller vehicles over 2.5 tonnes, and used on international journeys, are brought into the scope of the drivers’ hours and tachograph rules from July 2026.
On the issue of cost, the Explanatory Memorandum states that
“industry sources have raised concerns about the cost of installing a tachograph for the first time into smaller vehicles by 2026 and the lack of knowledge by some smaller operators of this new requirement.”
The Government’s Explanatory Memorandum is, frankly, a bit dismissive of the concerns about availability and cost, stating that they would not affect the content of this instrument that we are discussing, and that the concerns will be discussed with industry. If that is the case, I hope that it will not be in the same way as the Government clearly have not already.
The new tachograph equipment records a vehicle’s position, including when it crosses borders and when it is loading or unloading. It also allows for the down-loading of data without stopping a vehicle. What will be the cost of this new tachograph equipment? To pursue other points made by my noble friend Lord Berkeley, have the Government assessed what impact these new costs will have on the industry? The impact assessment states:
“There is no, or no significant, impact on business”.
On the basis of what figures and other evidence did the Government reach this conclusion?
One final point that I would like to make relates to what was said when this instrument was debated in the Commons Committee a week ago. We raised the issue of driver welfare. In response, the Minister in the Commons said that it was right to focus on the issue. Continuing, he said that
“the Government have now topped up to £52 million the investment that we have been making in the industry to support better facilities for drivers”.—[Official Report, Commons, Third Delegated Legislation Committee, 1/11/22; col. 6.]
That tends to be the Government’s stock response across the board to any query about inadequate facilities or services—that is, we have spent, or are spending, X millions of pounds. Could I therefore please have a breakdown in writing of exactly what improvements, in what facilities and where, that £52 million is meant to deliver; the extent to which it will or will not actually deliver those intended improvements; and the total amount of money that would need to be invested by the Government to bring the level of all facilities for drivers up to the standard which, presumably, it is intended the £52 million will deliver in the locations in which it is being spent, and for the purposes for which it is being spent?
Baroness Vere of Norbiton (Con)
I am grateful to all noble Lords who took part in this relatively short debate. I will try to answer as many questions as possible, and will certainly write. I am also grateful to the noble Lord, Lord Berkeley, for tabling his amendment; it gives noble Lords the opportunity to delve a little further into some of the issues that these regulations raise.
The trade and co-operation agreement commits the UK to the requirement that small goods vehicles weighing more than 2.5 tonnes used commercially for hire or reward for international journeys need to comply with the EU drivers’ hours rules. I stress that “international journeys” is one of the important factors here, because it means that the requirement does not apply to the vast majority of commercial vehicles, which operate only domestically. The number of smaller goods vehicles operating internationally is very small, and even for HGVs, it is not particularly large; most movement across the short straits, for example, is done by EU hauliers. However, some vehicles will need to comply with the EU drivers’ hours rules and to install and use a smart 2 tachograph from July 2026.
This gives the industry, particularly small vehicles weighing more than 2.5 tonnes, four years to prepare for this transition. It will have known about it for some time and will have four years to think about how the cost can be borne over that period. Regardless of this statutory instrument, UK operators of the vehicles concerned must install a smart 2 tachograph by 2026 if they are to operate legally in the EU. If they fail to do this, they will be subject to roadside stops, fines and other enforcement when abroad. The statutory instrument enables UK enforcement authorities to check and enforce against relative non-UK light goods vehicles—I suspect there will probably be more coming across than there are UK vehicles going abroad.
Noble Lords will remember that we have already discussed in your Lordships’ House the issue for vehicles of more than 2.5 tonnes. It is important that we continue with this. For example, larger vans sometimes come from Poland, Romania and Bulgaria, and they often have sleeping compartments in them. It is therefore very important that UK enforcement authorities are able to check drivers’ hours records contained in those tachographs.
The number of small vehicles that this is likely to cover is very small. There are 554 operator licences in place, but of these licences a total of 1,701 vehicles are authorised for international operation. That is out of a total of nearly 2 million in the UK, so we are talking about 0.09% of small vans, et cetera.
Obviously, the matters under discussion today were already obligations under the trade and co-operation agreement. This is very much a tidying-up exercise to make sure that our legislation is clear for enforcement. We have engaged with industry over a long period, particularly after the TCA was agreed, and therefore it well understands the changes that are coming down the track.
A number of noble Lords asked about awareness campaigns. We are working with the industry constantly on such matters. The traffic commissioner often sends out regulatory updates which advise those with operator licences about these sorts of changes that are coming down the track, and of course we publicise these on GOV.UK.
On impacts and costs, I believe these tachographs are likely to cost around £1,200 each—that is for buying and installation. As I mentioned, that can probably be borne over a number of years, and it is needed only for those vehicles that are travelling internationally.
The noble Baroness, Lady Randerson, and the noble Lord, Lord Berkeley, asked about enforcement. Of course, the DVSA has long been enforcing these matters. It is difficult to separate matters that are raised in this SI from the DVSA’s day-to-day enforcement activities because it is always enforcing against drivers’ hours infringements, whether for UK hauliers or EU hauliers, as well as all other infringements. I will include in my letter to the noble Lord some interesting stats around the amount of enforcement that the DVSA does; I have been incredibly impressed by the work that it does.
The noble Baroness, Lady Randerson, and the noble Lord, Lord Berkeley, both raised cabotage. Your Lordships will recall that, when the Government relaxed the cabotage rules, we had a number of debates in which noble Lords tried to convince me that it was a terrible idea. Eventually, I agreed with them and thought that we should stop doing extended cabotage, because the impact on UK hauliers was quite significant—but only in very localised places, particularly around the short straits. Relaxing cabotage did its thing when we were at the height of the challenges around not having enough HGV drivers, but I believe that we are now right to make sure that regulations in the UK mirror those of the EU, particularly regarding truckers arriving without a load and then going on to do cabotage. That should not be allowed: it is not allowed for UK hauliers and it should not be allowed for EU hauliers.
Lord Berkeley (Lab)
My Lords, I am grateful to all noble Lords who have spoken. It has been really good to hear so many questions to the Minister, and I am grateful to her for the answers she has given—most of them, anyway.
I still find it extraordinary that although we have this legislation which requires tachographs to be installed, she could not seem to tell us how many suppliers there are. In this country, we have some pretty good examples of monopoly suppliers of large volumes of things that have gone horribly wrong, particularly in the health service. This kind of equipment should be available from many manufacturers, and I am not quite sure why we can have only the ones that the EU says. We obviously have to comply, but there we are. I think that a cost of £1,200 plus installation is pretty high for many operators. I am sure they will be able to do some financial wizardry with it, but it is still quite a lot of money, though it is for a good purpose.
I worry about the cabotage issue, because we still have traffic problems at Dover and many other places quite often. The freight industry is short of drivers. We used to have a situation in which probably only 10% of cross-channel road freight was done by British drivers. Whatever we think, we have to find the drivers somewhere if we cannot find them here, otherwise we will not get the goods across.
I hope we will keep this under review and I look forward to the Minister’s letter, which may be quite long. I beg leave to withdraw my amendment to the Motion.
Housing (Built Environment Committee Report)
(2 years ago)
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Lord Moylan
That this House takes note of the report from the Built Environment Committee Meeting Housing Demand (1st Report, Session 2021–22, HL Paper 132).
Lord Moylan (Con)
My Lords, I begin by drawing the House’s attention to my registered interest as a member of the board of the Ebbsfleet Development Corporation. In moving this Motion, I pay tribute to my noble friend Lady Neville-Rolfe, who chaired the committee from its inception and during the period when it was producing this report. It was published as long ago as January this year, although it seems much fresher than that. I think I speak on behalf of all members of the committee in thanking her for her work and the way in which she welded us together as an irresistible inquisitive force trying to understand the workings of the various aspects of society that come within our purlieu.
In producing this report, we started from some common ground, the first element of which is that there are too few homes for the population in this country. There are too few homes for those who want them, but also not all the homes are necessarily the right homes to meet demand in terms of size, necessary amenities and so forth; nor are they all in the right place. I think we all started with the common view that building more homes was at least a very important part of the solution to that problem.
The Government have set themselves a target of seeing 300,000 homes built per annum. It is sometimes said that the Government have promised to build 300,000 homes, but they do not build homes, or not in any significant number; the homes are to be built by the private sector. That figure is obviously an approximation and is what would I describe as a stretch target. There is nothing wrong with setting yourself a stretch target as a tool for motivating effort, provided, of course, it is understood as such. In the current year, the industry expects to be on track to build approximately 240,000 new homes. Although that figure is less than 300,000, it is none the less not to be regarded in any way as a failure.
With that common background, our report focused on the barriers to increasing the number of homes being delivered per annum and bringing it closer to that 300,000 figure. As it is such a long report, in the interests of time, I shall inevitably be selective about the items that I draw to the House’s attention, hoping that the other members of the committee I see in the Chamber will alight on other issues.
I intend to focus on three issues. One is the house- builders themselves, though in what I am about to say I do not intend any criticism of them at all. The large housebuilders—the ones that do the volumes we need—are relatively few in number. They do not have the capacity, either financial or in personnel, to ramp up the number of houses they are building every year on the scale that the Government would necessarily hope for.
There are difficulties in becoming a large housebuilder; it is an industry that has barriers to entry. One needs the land, the resources and—I will come to this in a moment—the skills necessary to negotiate the planning system in order to get the permissions that allow one to build large developments. One of our recommendations was that everything should be done to encourage more small housebuilders, to help take up the slack. We noted that the number of small housebuilders over the last two decades had declined and the share of the new-build market they were responsible for was probably at its lowest level for a very long time. One thing we want to see is more encouragement for smaller housebuilders, partly to add to the diversity of the housing stock available to members of the public looking for a new home, but also in the hope that some of the small housebuilders might, over time or even quite rapidly, become large housebuilders so that they are able to offer some competition and spur to the existing large housebuilders.
That brings us to planning. I have already mentioned the expense and complexity of obtaining planning permission. Certainly, when it comes to the smaller housebuilders, one has to take into account the fact that a substantial amount of money must be put up in advance, at risk, as one seeks planning permission. Leaving aside the cost of the land itself, which one could take an option on, the fact is that the design, the architectural work, the necessary studies, the environmental impact assessments and so forth, together with the planning fees, represent a significant upfront investment, which may never be recovered if it turns out that the application is simply doomed to fail. That is a significant deterrent and part of the barriers to entry that I mentioned, which prevent smaller house- builders offering more competition to the large ones. Overall, however, even in relation to large housebuilders, the committee found that delays in the planning system and uncertainty over planning reform had a chilling effect on housebuilding.
We also found that in a plan-led system for development, such as we have had in this country since the end of the Second World War through the Town and Country Planning Act, the system does not work—or does not work well—unless local plans are in place that are up to date and relevant to the needs of the local area and the forecast demand for homes. We also found that local plans need to be simpler, clearer and more transparent. In that regard, we look forward—as we have done for some time—to scrutinising the Levelling-up and Regeneration Bill, and hope to see reform of local plan-making in that Bill.
In relation to planning, we were also particularly concerned about the Government’s wish to move further away from Section 106 payments in the direction of an infrastructure levy. We appreciate that if an infrastructure levy can be a simpler method of calculating the contribution expected from a developer than Section 106, that is an attraction. Our concern is not that but that Section 106 contributions must, by law, be relevant to the development taking place. Therefore, if money is paid to contribute to or provide a primary school for a large new development, the contribution is tied to that primary school and one can be reasonably confident that it will be delivered. Our understanding of the infrastructure levy, however, is that the local authority can simply take the money and it becomes part of its general funds, so the connection with the development, and therefore with providing the amenities necessary to support it, is lost. We would therefore like to see some sort of assurance in that respect.
We also noted that planning departments in local authorities up and down the country lack sufficient skills to process the applications coming to them and to assess the increasingly complicated factors loaded on to planning applications. If we are to have a plan-led system and the Government are to insist on a certain level of complexity, it is incumbent on them to ensure that there are sufficient planning officers with the right skills to process them so that development can take place.
In relation to housebuilding, it is worth moving on to skills in the construction sector as well, the point on which I shall conclude. It is fair to say that the skilled trades necessary for the traditional method of house- building have been in decline for quite a long time—well over a decade, possibly longer. That is why, long before Brexit, the phrase “the Polish plumber” had become almost standard in our language. By encouraging immigration in those skilled trades, we had been responding to a long-standing decline in local availability of those skills. That was long before Brexit. The lack of plumbers, carpenters and so forth has not been produced by Brexit; it was already there. Brexit has changed the arrangements in the use of immigration to make up the shortfall.
In this respect, it has to be asked whether constantly importing skilled trades from the European Union was a sustainable and feasible response over the long term to the problem, anyway, especially given that many of the countries from which they were coming were themselves becoming richer and had demand for that labour at home.
We therefore think it behoves the industry to consider new methods of building alongside traditional methods—and perhaps taking their place—including automation, innovation and modular housing. It struck us that modular housing has been promised for many years but has never quite taken off. The Government should be looking closely at that and trying to understand why the many words that have been spoken about it have not turned into the revolution in housebuilding we might have expected.
Many hands have gone into the making of this report. I am grateful to all the members of the committee who attended so many evidence sessions, undertook visits and made such a great contribution. I have already mentioned my noble friend Lady Neville-Rolfe. I should express thanks to our special adviser, who looked after us throughout, Professor Paul Cheshire, Emeritus Professor of Economic Geography at the LSE. I thank all the clerks and the other House staff who supported us in producing the report. I will probably break some terrible taboo in your Lordships’ House by mentioning our lead clerk by name, Dee Goddard, and giving her a special vote of thanks, because she has looked after the committee since its inception and is leaving the service of the House in a couple of weeks’ time to relocate with her family to another part of the country. I give a special word of thanks to her as I sit down and commend this report to your Lordships’ House
Lord Davies of Brixton (Lab)
My Lords, I thank the noble Lord, Lord Moylan, for introducing this report. A bit to my surprise, I found myself agreeing with virtually everything he said. I mainly thank the committee for its hard work in this important area. Given the nature of an all-party report, it is excellent, covering the whole territory. There is much to learn.
I will focus on one part of the report, which simply states:
“There is a serious shortage of social housing”.
I want to make one straightforward point on the importance of council housing. We face some public policy problems to which there is no obvious solution, but we have other problems to which we do know the solution. History tells us what the solution is but, for some reason, we avoid the obvious. We know from history that the way to obtain a bigger supply of social housing is to build council houses.
I could quote the experience of the 1964 Labour Government—there is justification for that—but I am going to look at the 1951 Conservative Government. I have been rereading Harold Macmillan’s autobiography. There is much to learn. As I read, I had to ask myself whether he would have a place in today’s Conservative Party. I think the answer is no, but I do not know; obviously, he was a man of many parts. He was the Minister for Housing from 1951. He inherited a decision of the Conservative Party conference that it wanted to build 300,000 houses a year—an interesting figure. Of course, it is worth stressing that this was new-build and at the same time, it was having to undertake a massive restoration of the housing stock, which had been destroyed or run down during the war.
Macmillan set about achieving that objective. In 1953, there was a White Paper, Houses: The Next Step. I will quote for noble Lords the biography of Harold Macmillan by Charles Williams, which says that, after the White Paper, Macmillan realised that he would
“have to persuade his own colleagues that the only way to meet the promise given to the electorate”—
the manifesto promise—
“was to engage in a sustained programme of local authority housing.”
He goes on to explain that
“the only way to achieve the housing target was by subsidising local authorities to build for rent. In other words, council housing was to have the top priority.”
By way of background, during the subsequent debate in the Commons, Macmillan gave a routine acceptance of a property-owning democracy. His whole argument was that, as a long-term aim, property ownership was fine. However, Williams states:
“Council housing for rent was the only way to meet the political objective he had been set—and which he was determined to achieve.”
We have the same target now and the same means of achieving it; that is the true meaning of the shift.
Many years ago, when I was a member of a local authority, people said, “We shouldn’t be subsidising bricks. We should be subsidising people”. That is clearly wrong. The only way to solve a housing shortage is to build houses, and the most direct and simple way to achieve that is through a massive council housing programme.
Baroness Thornhill (LD)
My Lords, I thank the noble Lord, Lord Moylan, for his introduction. I am pleased to be a member of the Built Environment Committee. I found this brief challenging and I too thank our committee officers and special adviser, Professor Paul Cheshire, who helped us to see the wood for the trees —or, in my case, at least to try to. Our title is Meeting Housing Demand, which is a wide field. The breadth and level of expertise of our witnesses was phenomenal. I felt privileged to listen to many of them.
In my contribution on this wide-ranging report, I propose to focus on the planning system and the role of councils, and perhaps to be a little challenging to us as politicians. It goes without saying that, as a member, I agreed with most the recommendations, subject to the usual wrangling in coming to consensus.
The report focuses on how to build the now-accepted target of 300,000 homes a year. Actually, even that target was disputed. What was not disputed was that the Government are failing to reach it. In all fairness, so have decades of politicians; this is a long-term issue.
However, all the major parties agree that we need more homes. They broadly agree on the numbers and we even all mention this in our manifestos and general political rhetoric, but I have two points on this fact alone. First, it is all empty bravado and meaningless if the underlying problems in the system are not addressed. The report, with which we largely concur, uncomfortably highlights many of these for the Government.
Secondly, this is completely at odds with the subsequent rhetoric and actions of individual politicians of all parties when it comes to development in their own constituencies or wards. We have seen a nation of nimbys go BANANAs—build absolutely nothing anywhere near anybody. This is a serious issue and it needs serious attention. Taking the public with us is critical to success, and we need a radical, innovative approach to engagement. I hope the Minister shares the plans for this with us.
Following a range of comments made by senior politicians recently, there seems to have been backtracking on targets and housing numbers. I would welcome the Minister clarifying whether targets and top-down housing numbers allocated to local councils are to be continued under this new Government. In particular, how effective or not do the Government believe they have been in getting more homes built?
As for housing numbers, what progress have the Government made on deciding what the right honourable Michael Gove MP said, on returning to the Cabinet, is a
“fair way of allocating housing need”?
I am sure every politician in the land is eager to learn what constitutes a fair allocation in their council area.
This kind of statement epitomises one of my main concerns: it sounds plausible and sensible, along with other soundbites, such as “simplify the planning system”, “cut red tape” and “the right homes in the right places”, but what do they actually mean? We heard lots of those in our evidence, but they clearly mean different things to different interest groups.
Take the simple statement that is often repeated of delays in the planning system or that councils are to blame for reduced completions. For the housebuilders, this gets the politicians, and therefore the community, out of the picture. It means minimising housebuilders’ involvement, reducing their fees and levies, and simplifying policies so that expectations are known up front, riding roughshod over local consideration. This was more clearly and very recently expressed in the Home Builders Federation’s report Building Homes in a Changing Business Environment. Some noble Lords were sent that report, and more could and should be said on it, but time prohibits it.
I turn now to council planners, whose version is probably closer to that of the Government: to please stop developers trying to get out of their commitments to Section 106 and infrastructure levies, particularly around social housing; to give them stronger powers to insist on higher environmental building standards so that they do not spend ages haggling with developers; and to stop trying to water down their local policies, designed with and for their communities, in efforts to make it all simpler—for the developers.
I do not doubt that some councils are not performing at their best. How do we bring the worst closer to the best, and how do we empower council officers to stand up to developers which refuse to follow our best practice? Can the Minister tell us whether the Government will in fact be bringing forward plans to reform the planning system? In particular, what changes will there be to ensure that the skills and recruitment issues within councils outlined in the report are fully addressed?
We heard that qualified planners can earn significantly more money working for developers than for councils, which, especially small district councils, cannot compete with those salaries. Within the reforms, will the Government grasp the nettle of real community engagement, make the case for the national need for more homes, and be prepared to challenge not just councils—because, hey, they are a faceless piece of bureaucracy that the Government can tell what to do, and the Government bear down on them through such mechanisms as the housing delivery test—but council leaders and MPs who use that slogan, “the right homes in the right places”, and try to ride the tide of anger from their residents while, in some cases, actually voting for the policies that are prompting the rise in unpopular developments?
How will the Government face the challenge that local communities have virtually no incentive to permit residential development while saying that they will have a major say in local plans in the future, giving them opportunity to shape what happens in their area? Once again, the soundbite is good, but what does it mean in reality? How will it be different from what many good councils have been trying to do all along? How will it get communities to accept development? Are the Government still supportive of neighbourhood plans, for example, which seemed to work in some places in this regard?
Many residents’ objections are about the strain on local services, and this is well documented in the report. What are the latest plans on CIL—the community infrastructure levy—and Section 106 contributions, and, in particular, the recent proposals that such fees should be paid by the developer not only when the development is completed but the homes occupied? Is that still going ahead? Who will therefore be responsible for funding the infrastructure while it is being built? Will it be cash-strapped councils?
What do the Government intend to do with the 61% of councils without a local plan? They would argue that the Government should please stop changing the goalposts and let them get the plans finished—but, then, guess what? The goalposts change. Depending on the Minister’s answer, they will probably have to change again. In which case, will the current plans still be valid, and until when?
Finally, many witnesses spoke of uncertainty within planning permission—all the chopping and changing, and playing the blame game. I hate that we pit developers against councils, and councils against their communities, because this will not get community buy-in for 300,000 homes a year. This is only one aspect of the many highlighted in the report. However, I purport that, without it, it will make it politically difficult to deliver those essential 300,000 homes, and we will continue to fail to meet our critical housing needs.
The Lord Bishop of Durham
My Lords, I begin by commending the report and thank the noble Lord, Lord Moylan, for introducing this debate. I also commend the work of my right reverend friend the Bishop of Chelmsford, who, as the Church of England’s lead bishop for housing, has tirelessly engaged with this issue and the Social Housing (Regulation) Bill.
Last year, the Archbishops’ Commission on Housing, Church and Community published its Coming Home report, which set out a vision for housing to be sustainable, safe, stable, sociable and satisfying. It is through these values that strong and lasting communities can be built, enabling people to thrive and flourish. It was very interesting to note how warmly these five values were welcomed by the industry itself as a guide.
However, the reality is that a large proportion of housing in this country does not embody these values. It is widely stated that we face a housing crisis, including a shortage of social housing. Social housing is designed to help those whose needs are not served by the market, most commonly those on the lowest incomes. However, when Meeting Housing Demand was published, 1.9 million households were on local authority waiting lists for social housing in England. With rents and interest rates rapidly rising, more households are being pushed into poverty and this list is only growing longer.
This social housing shortage is forcing huge numbers of lower-income households into the private rental sector, while others are placed in temporary accommodation. I recognise that, for some, temporary housing is a valuable lifeline, but it cannot become the long-term solution. In 2021, 124,290 children were living in temporary accommodation. The Archbishops’ Commission revealed that some families had been living in temporary accommodation for over a decade, during which time they had been moved around multiple times. In London, 37% of those in temporary accommodation are placed outside the resident’s home borough and, in some cases, moved to other parts of the country. This means that they are moved away from family, friends, schools, jobs and communities. This is no way for a child to grow up and it is why we need much more social housing.
Furthermore, the crisis is being exacerbated by a lack of genuinely affordable housing. Affordable rents are set at about 80% of the market rate, but in many areas this is not affordable for those on low incomes, so it pushes more households into poor-quality private rented sector housing. Do the Government have any plans to change the percentage of the market price at which housing is deemed affordable, or instead to define affordability in relation to household incomes?
To mitigate this crisis in the long run, it is crucial that more social and affordable housing is provided. Over the past 40 years, there has been a halving of the social rental sector. The Government’s target is ambitious at 300,000 new homes per year and 1 million new homes by 2024, but they have not outlined what housing types and tenures these will be. What percentage of these targets will be genuinely affordable social housing? A more detailed plan is required, outlining targets for the proportion of these homes that will be affordable.
As the Meeting Housing Demand report reveals, many tenants who previously would have been in social housing are now privately renting expensive accommodation, with their rents subsidised through housing benefit. This is costing the Government £23.4 billion per year. Providing more social housing is a matter not only of helping some of the most vulnerable in our society but of financial common sense.
I highlight the work of the local authorities in my region of the north-east, as they strategise and begin to build new social housing. In particular, I highlight Sunderland City Council, which is collaborating with Sunderland College and the Ministry of Building Innovation and Education to develop a housing innovation and construction skills academy, which will educate, train, and upskill local people, who will then be able to build local homes. I commend these local authorities as they work to build new social housing and reduce the skills shortage at the same time, but there must be a more detailed commitment on a national level. I ask the Minister: how widely are the Government encouraging councils, colleges and industries to work collaboratively on upskilling people in the housing industry?
Here, in line with the point made by the noble Lord, Lord Moylan, and the noble Baroness, Lady Thornhill, I ask about Section 106 money. The connection to local social provision has been hugely important for schooling and other community facilities. Can the Minister confirm that any proposed changes will not lose this connection to local provision?
I conclude by returning to highlight the work of the Church Commissioners, who have begun to use church land more specifically to build affordable housing that embodies the five core values of good housing, as previously stated. In the north-east, they are partnering with local councils and currently plan to build 3,952 new homes, between 510 and 930 of which—possibly more—will be affordable. I encourage local developers to follow their lead.
With the rising cost of living, it is vital that urgent action is taken. I reiterate my request to the Government to produce a clear commitment and strategy for good-quality, affordable social housing, built at net zero. Without it, this crisis will only worsen, severely impacting children, families and households across the country.
The Earl of Lytton (CB)
My Lords, it is always a pleasure to follow the right reverend Prelate. I declare my professional interest as practising chartered surveyor, and I follow the noble Lord, Lord Moylan, in saying what a wonderful chairman we had in the person of the noble Baroness, Lady Neville-Rolfe, for the production of this report. Its sharpness—the edge that it has—is her hallmark. What a privilege it has been to serve on the Built Environment Committee and to work with colleagues. I add my thanks to our clerk, policy analyst and committee operations officer for their untiring efforts.
For me it was a real pleasure to come across Professor Paul Cheshire again. He was one of my lecturers when I studied at the College of Estate Management 50 years ago. I just hope he felt that some of the fairy dust and some of his wisdom had sunk in.
I warned our chairman, the noble Lord, Lord Moylan, that I might be making a bit of a departure. I will leave the bulk of the report to speak for itself because I think it largely does that. I should like to address a little of what I might call the size of the remaining iceberg that lies beneath the surface. I may be slightly nearer to the noble Baroness, Lady Thornhill, than she might at first suppose.
We concluded that behind delivery shortfalls against target there is some lack of coherence in government policy in relation to delivery, particularly in the area of planning, which has been referred to. It is not that the Government do not have clearly stated targets—they clearly do—but the mechanism for getting results seems in disarray. A series of patch and repair operations has been undertaken over many years with an absence of thoroughgoing assessment of the implications in a very complex interleaving of tiers of government, executive agencies, international commitments, national priorities, societal and special interests, along with significant infrastructure challenges, not least when you have to meet them upfront as part of a development process. This may be due to the number of departments involved but also to the underresourcing of planning departments. They are matched by increasingly financially powerful volume housebuilders. They have been referred to in other circumstances as showing oligopolistic tendencies.
I think there is a wide perception of minimal corporate ethics in a sector that sits uncomfortably close to the political elite in the sponsorship of party conferences, political donations and photo opportunities for Prime Ministers and others wearing hard hats and high-vis jackets emblazoned with corporate logos. These might not be harmful of themselves, despite appearances, but there is obvious potential for what might be called high-level offline activity.
Closer to home, and with resource-starved authorities in high-value areas, there is clear evidence that these influences are being brought to bear in policy-making at local level, often—I suspect, and this is certainly the suspicion of many citizens—in priority to the express wishes of communities. After all, local planning officers can be effortlessly outgunned by skilled legal teams, even without recurring aspects that the average citizen would perceive as fundamentally dishonest. Strategic housing allocations are made but then built out at a dribble, thus perpetuating high and growing house prices and placing forward housing rollout in the hands of unaccountable private companies.
In turn, this leads to further manipulation and horse dealing over available sites. Railroading of developments is often done via ruinously expensive appeals and inquiries. Despite clear local and neighbourhood policies, citizens’ wishes are being overridden. As the noble Lord, Lord Moylan, pointed out, SME operators have been squeezed; they simply cannot compete in this environment. The public perceptions are negative, mistrustful and disbelieving of the conditions and controls, especially Section 106 ones, that they are told local authorities are able to impose.
Certainly, in my own area, one does not have to join up many of the dots to understand what has been going on over the last 18 months between the majority party on the council and a series of well-funded developers. Indeed, on the current matter of water neutrality, which is well up the agenda, it is beginning to look as if the clear principles set out by Natural England may be up for grabs via a system of permits according to a tariff, with long-term but ultimately unenforceable requirements of things such as low-flow taps and diminutive bath-tubs. Of course, none of these will diminish the core problem of growing abstraction and the resultant damage to environmental assets—at least, not any time soon.
Adequate delivery risks failure, not just in build-out rates and the quality of place-making and durability of homes but in less physical ways—for instance, rent charges, where a new freehold house is tied into annual payments for maintenance and management of common areas or public realm assets. That is the roadways, hard and soft landscaping, storm water drainage arrangements, play areas and maybe security systems and lighting—things that have not been adopted by the local authority. These charges are prone to being ratcheted up and can easily reach levels at which mortgage companies may decline to lend. This has earned the name “fleecehold”. Such additional charges, as compared with the generality of homes in a district as a whole, cause value writedowns and selectively unfair treatment. This is one of the unsatisfactory outcomes we are dealing with.
During my own researches, I happened upon one local authority that had set up a company to own and manage these rent charge opportunities, explaining as it did so that it would make a profit of several million pounds in the first few years of operation. This is from a council that decides the planning merits, sets the conditions and planning contributions, writes the Section 106 agreement and has the power to adopt public realm assets or not, as it chooses.
I could go on and explain—but I will not—how similar cost-recovery schemes may in due course feed into new home owners paying disproportionately for wider societal issues such as water neutrality, as I mentioned, or, perhaps more topically still, biodiversity net gain, and how the administration of these can easily cross the line between obligations, objectively fair administration and the appearance of disreputable practice. The entire delivery process is therefore between rocks and hard places, and sits above a crevasse.
The HBF—the noble Baroness, Lady Thornhill, referred to this—also sent me the report. That set out 12 critical additional burdens on the housebuilding sector, which cumulatively would add £20,000 to the build cost of every new home. That was an average; the range was £19,000 to £21,000. If that is correct, then affordability will go out of the window and, as the HBF suggests, development viability with it. There is just too much being taken out of the system.
I hope the Government will take careful note of the issues for meeting housing demand that we have reported. What we have set out are really the headlines; there is a good deal more subtext underneath. We need to recalibrate and facilitate better social housing build-out and, as the noble Lord, Lord Moylan, has said, a better situation for small and medium-sized enterprise. That will require a substantially different model because, as I see it, resources from housing development and the housing delivery process are being dissipated.
Lord Carrington of Fulham (Con)
My Lords, it is a great pleasure to follow the noble Earl, Lord Lytton. I do not propose to be quite as technical in my speech as he was in his; the expertise that he has brought to this debate is much appreciated.
I start by congratulating and adding my thanks to my noble friend Lady Neville-Rolfe, who led our committee; in the context of this debate, I suppose she is best described as our foundation chairman. She did an excellent job on this report and she is now doing an excellent job in her new role as a government Minister. I also add my congratulations to my noble friend Lord Moylan on taking over the bed of nails which is the chairmanship of this committee. I wish him all success going forward; based on what he said today in his speech, I have no doubt that he will be there for many years, producing many good reports.
What we learned from this report is that, by general agreement, 300,000 houses a year is required. We are not achieving that. Indeed, we heard a considerable amount of evidence that 300,000 houses a year is not enough; there would need to be 350, 000 or even 400,000 houses a year. That raises some very interesting questions, one of which the noble Lord, Lord Davies, raised in his speech when he mentioned Harold Macmillan and the 1950s housebuilding boom, which was largely concentrated on council housing. That is certainly one solution. The problem with it in the 1950s was the quality of housing that was put up and—as I will come to, a bit, in my speech—the quality of the design of the housing.
I want to take a little digression to one of the problems that, as a London politician, I found in council housing generally, which is that it tends to be a trap for the tenant. The great problem is that, since it is so difficult to change the tenancy for another tenancy, should the tenant wish to go and work somewhere else—or family circumstances require them to go somewhere else—they tend to get trapped in a place that may have been appropriate at the time of the initial tenancy but, over time, becomes inappropriate. It becomes very difficult if family moves away and the tenant becomes isolated. So council housing is not the panacea for everything, although it certainly has parts of the solution.
The real problem in building 300,000 houses a year is of where you are going to build them. That problem has presented our housebuilding with enormous difficulties over the years. I take up the concern of the noble Baroness, Lady Thornhill: this really has to be resolved at a local level, because it has to get local acceptance. That is acceptance by not just the local councils but the local people in those areas, because that is where the objections—the rebellion against the imposition of new housing—will come from.
The real question that has to be addressed is: how do you overcome that objection and persuade people that new housing in their area will benefit them? That is extraordinarily difficult, made worse by the fact that where you need to locate 300,000 houses is on the whole where the jobs are, where people consequently already live and where the pressure on housing tends to be already greatest. It is an extraordinarily difficult problem. Any survey you care to do on where we need to put housing will show one of the big areas is the south-east of England, which is the most difficult place to get agreement to put in housing.
I suggest there are lots of reasons why there are objections. One is the impact on local services, obviously. It is about the lack of new roads and new public transport. It is about the lack of schooling and doctors, and of a decent sewerage system, which is so catastrophic in terms of the pollution that we are seeing in neighbourhoods. That needs to be resolved, but I suggest that one of the really big issues is design.
Most of us in this House are old enough to remember that great folk group the Weavers, and when Pete Seeger sang about ticky-tacky “Little Boxes” being built. So much of the modern housing that goes up—even if it is expensive, let alone the cheap modern housing—is either ticky-tacky little boxes or ugly. We used to build beautiful houses, in tune with the time in which they were built. We used to have architects who were able to design housing that people wanted to live in. I will give one example from London’s experience: the Bedford Park estate, which was a great development of the 1880s built by one of our greatest architects, Richard Norman Shaw. It is still desirable to live in, in a rather retro manner. But we need modern Richard Norman Shaws who will, in the modern idiom, design buildings that people want to live in, whether as houses or flats.
We can start doing that by creating houses that people find attractive, and at the same time persuading communities that we are building something which will enhance their community and provide new homes—but do so for local people as well as people coming in from outside, so that the children of the community where the housing is being built can find somewhere to live near their parents or grandparents, while they bring up children and create a community which they can take pride in. If we can do that, we stand a chance of solving this problem. But if we impose from the top housing which is in the wrong place, badly serviced, not near jobs or able to provide access to work, and which is ugly so that people do not want to live in it, we will fail. We have to overcome those problems and make the housing that we are putting up something we can be proud of.
Lord Grocott (Lab)
My Lords, I agree with pretty much everything the noble Lord, Lord Carrington, said, but particularly the last part. A number of things have already been said, but I make no apology for repeating my thanks to our committee secretariat, led by Dee Goddard. I also thank the person in the chair, the noble Baroness, Lady Neville-Rolfe. It was the first big piece of work of a new committee, and I am very pleased to have been associated with it.
It has been some time since we reported: 10 months since the publication of our report. The main problems we identified remain the same, though some of them clearly are getting worse. This is particularly true when considering the issues raised in chapter 3 on “Housing types and tenures”. There are 24 million households in England, with 65% owner-occupied, 19% privately rented and 17% are homes for social rent. There have been significant changes in these proportions in recent years. Owner-occupation is down from 71% in 2005. Social housing is dramatically down from 30% in 1980. The only sector that has grown, and quite dramatically, is the private rented sector, which has doubled from 10% in 2003.
There is a real paradox at the heart of these figures. The sector that has been growing the fastest is the sector which, as far as householders are concerned, is the least popular. Owner-occupation has long been the most popular form of tenure and for social housing there is overwhelming evidence of unfulfilled demand. One measure of it is that in 2021 there were no fewer than 1,187,641 households on local authority waiting lists. Faced with huge waiting lists for social housing and the escalating costs of owner-occupation, people have no alternative but to turn to the private rented sector.
There are, of course, plenty of private tenants in well-maintained rentals that they can afford. However, the evidence tells us that the picture of the sector overall is not so rosy. There is lower continuity of tenure for private renters, who move on average every four years, compared with social renters, who move every 12 years, and owner-occupiers, who move every 17 years. As we say in our report:
“Those living in the private rented sector are more likely to live in poor quality, overcrowded conditions than owner–occupiers, and often have limited forms of redress.”
We also know that in terms of monthly expenditure—this is astonishing, but it is familiar to all of us—it is cheaper to be an owner-occupier on a mortgage than to be a private renter. The figures in our report are for 2020 and clearly will have changed since then with all that has happened. At the time, they showed that the average monthly cost for owner-occupiers in the north-west, for example, was £576 compared with the average monthly cost of private rent, which was £723. In nutshell, of the three main forms of housing tenure, the fastest growing is the least secure and the most expensive.
That almost defies economic logic, so here are the obvious questions to the Minister. What plans, if any, do the Government have to address the acute shortage of social housing? What are the Government’s targets for the provision of new social, local authority housing? I agreed with every word my noble friend Lord Davies said and particularly with the speech of the right reverend Prelate the Bishop of Durham—in fact, when he finished, I very nearly said amen. What plans, if any, do the Government have to enable those people on very high rents in private accommodation to move towards home ownership, which, as we have seen, is cheaper and for which there is clearly a huge demand?
It is taken as read, throughout our report as well as by the Government, that we need more homes. Most of this demand will have to be met by new builds. However, there is another potential source of supply among existing housing networks. Sadly, we do not have much to say on this in the report; we could say only so much. In paragraph 55, we report that, in England alone, there are around 500,000 empty properties—we were given the figure of 479,000. Regrettably, as I said, our committee did not take specific evidence on this, although we know that a number of different local authorities are trying to tackle the problem in a variety of ways. Empty homes that are neglected for long periods can blight not just their streets but the wider neighbourhood. While empty and neglected homes are clearly a problem, it is also the case that 500,000 unused properties could be part of the solution to housing demand. I ask the Minister: what is the Government’s estimate of the number of empty properties and is there any best-practice advice for local authorities about how to deal with the issue? Surely, if the aim is to provide 300,000 more homes a year, reducing the number of empty properties could be a very helpful part of the solution.
Whether we are talking about existing properties being renovated or new houses being built, we must address the fundamental problem of the supply of skilled people to do the work. You can have all the planning permissions, all the environmentally friendly targets and all the town planners and architects in the world, but, at its heart, what is needed most of all are bricklayers, plumbers, electricians, carpenters and all the associated building trades. We spell out in our report the existing acute skills shortage, which is destined to get worse. Some 48,000 vacancies in the construction industry were recorded between April and October last year. In the same period, 53% of SME builders said that they were struggling to recruit carpenters and 47% said the same about bricklayers. What is more,
“35% of the workforce are over 50. Only 20% … are … below 30”.
These are skilled trades requiring apprenticeships and for which vacancies cannot be filled overnight. They are also trades that, in practice, overwhelmingly recruit men. Only 8% of construction apprenticeships are undertaken by women and only 5% of construction workers identify at BAME. As we say in our report:
“Diversity remains a major issue in construction trades … It will be essential to draw on a wider talent base to meet the demand for skills.”
There are many reasons for this shortage. I simply do not have time to go into them all, but one is undoubtedly the difficulty of career progression, as well as the fact that wages do not tend to increase over a lifetime for most of the building trades. Table 5 of our report shows that the median hourly rate for a plumber in his 30s is £13.41 and in his 50s it is £13.59 —assuming he is still physically fit enough to do the job. As I said, one of the challenges in this sector is the lack of career progression. However, the blunt truth is that, unless the problem of skills shortage is addressed, there will simply not be the people to build the 300,000 houses that the Government are committed to providing. I ask the Minister for her assessment of just how serious this problem is and what measures she proposes to address it.
Amid all the challenges in our report, at least there is agreement on the objectives: we need more houses of good quality at prices and rents that people can afford. If the Government remain committed to their target of 300,000 builds, and to their levelling-up agenda, the message of our report is that they need to do better and quickly.
Viscount Waverley (CB)
My Lords, I am totally sympathetic to the point about skills and training made by the noble Lord, Lord Grocott. I will address that in a different way, the manner of which I will inform the House of in a moment. I have found this a fascinating debate, particularly as it is not one that I would normally be identified with. I am totally sympathetic to the approach of the noble Lord, Lord Moylan, and his concerns about homes, as I have been to those of all noble contributors. As he said, homes are not necessarily being built in the right place. I will concentrate on that point about land by adding a differing dimension, which I fear may be considered out on a limb but not out of sync.
Beyond having only one substantive but fundamental point that pertains to planning applications, and by whom and how those applications are managed, I support any move to introduce the compelling of those who secure land for the construction of housing projects, whether developers or construction entities, to use that land in short order for the purpose for which the use was granted or lose it. That could be easily achieved and the Chancellor may care to take note of that.
I offer my remarks this afternoon not as a policy proposal, but as a co-chair of two APPGs, one on the future of the United Kingdom freight and logistics sector and the other on the future of trade and investment, both of which have parallel criteria to get things moving in the national interest. Both are undertaking a strategic review and planning is a key component of the former—but I speak, of course, as an individual.
I am in line with the initial remarks of the noble Earl, Lord Lytton, and with how he intimated, without specifically mentioning the detail, that existing airport operations must be at the forefront of joined-up decision-making when new housing developments are being considered and be consistent with differing government policy. Planning processes can hold the national interest hostage, given that airports are prize assets which support the export ambitions of the United Kingdom. Housing developments should not be built within the noise envelope of an airport.
My concluding remarks will offer a case study, identifying one such district authority, of when all this went horribly awry, with national government having to intervene. It would be helpful if the Government—for all that I imagine the Minister will defend the case otherwise—approached decision-making across departments when planning applications are considered in a way that was more holistic, rather than with a silo mentality.
One principal objective of the 2013 aviation policy framework was to ensure that air links continued to make the UK one of the best-connected countries in the world, enabling it to compete successfully for economic growth opportunities. The framework noted that airports acted as focal points for business development and employment by providing rapid delivery of products by air and access to international markets. The framework specifically recognised the importance of Heathrow and East Midlands Airport, and identified that EMA acted as a hub for freight, noting that three of the four global express air freight providers, including DHL, maintained major operations at that airport.
The Government are developing a long-term aviation strategy to 2050 and beyond. As part of this emerging strategy, the Government have referred to a number of documents, including Aviation 2050: The Future of UK Aviation, a consultative publication from December 2018. I shall not tire the House by quoting the detail of paragraphs 4.45 and 4.48, which specifically recognise the importance of the 24-hour operation at EMA, particularly the provision of night flights. It is clear that the Government rightly consider air freight a particularly important part of the UK economy, confirmed in paragraph 4.49, recognise the importance of night flights at EMA and encourage their continued growth.
Housing development in the wrong locations can have an adverse impact on residents and local businesses, such as potential development in the surroundings of national and regionally significant airports. Two quotes from the National Planning Policy Framework are worthy of note. One says:
“Planning policies and decisions should ensure that new development can be integrated effectively with existing businesses and community facilities … Existing businesses and facilities should not have unreasonable restrictions placed on them as a result of development permitted after they were established.”
The second says:
“Where the operation of an existing business or community facility could have a significant adverse effect on new development (including changes of use) in its vicinity, the applicant (or ‘agent of change’) should be required to provide suitable mitigation before the development has been completed.”
This is where it becomes complex, because a local authority is the airport’s “competent authority”. Therefore, the local authority is required to consider the “balanced approach” when establishing noise-related operating restrictions at an airport. The “balanced approach” is promoted by the International Civil Aviation Organization and comprises four principal elements: land-use planning and management; reduction of noise at source; noise abatement operating procedure; and operating restrictions. On land-use planning and management, the ICAO states that:
“Compatible land-use planning and management is also a vital instrument in ensuring that the gains achieved by the reduced noise of the latest generation of aircraft are not offset by further residential development around airports.”
I end with my case study. A prime case has directly impacted the aviation modal, with the Government having written to Uttlesford District Council, in which district Stansted Airport resides, confirming that it is to remain in special measures, which limit its planning powers as not being in line with the Department for Levelling Up, Housing and Communities, noting that UDC’s decisions were “shameful”. I was adversely impacted by the operations of Stansted Airport, both flying out of the airport and, regrettably, when I returned, because of those decisions. I must, however, place on record how grateful I am to the owner, Manchester Airports Group, for its courtesy in giving me an on-the-spot detailed briefing as to what on earth was going on at that airport as a result of the types of decision-making that the district council to which I referred made. Central government has concluded that the number of major planning applications overturned on appeal was unacceptable. The chief executive, Mr Holt, was clear that the special measure vis-à-vis Uttlesford District Council was “absolutely intrinsically linked” to the absence of an acceptable local plan to deliver on government targets, including for the smooth running of Stansted Airport.
I felt that needed to be put on record in a debate on which, frankly, I have a great deal of sympathy with the whole issue of the housing and the planning elements. I give these my absolute full-hearted support, but there are other issues that need to be taken into account when we consider the national interest.
The Deputy Speaker (Lord Young of Cookham) (Con)
My Lords, the noble Lord, Lord Campbell-Savours, will speak in the gap remotely, and I invite him to speak briefly.
Lord Campbell-Savours (Lab) [V]
My Lords, an error on my part has led me to speak in the gap in a truncated contribution and I apologise. This report is a comprehensive canter round the course of housing demand. The committee is to be congratulated. I want to speak narrowly. Paragraph 180 states:
“The Local Government Association set out proposals to help councils encourage faster build out rates”,
including
“a streamlined compulsory purchase process to acquire (at pre-uplift value)”.
The words “pre-uplift value” need interpretation if the public are to understand this report.
I have previously argued that some development land valuation should not be based on planning decisions but on agricultural value, with an uplift for administrative and infrastructural redevelopment costs, which means CPO. I see no reason why huge profits to landowners at the cost of house buyers should turn on the granting of planning permissions. I further argue that while Section 106 agreements are helpful, they are a complex alternative: even where they sit alongside community infrastructural levies, they often cannot deliver.
According to the report, at paragraph 54, the Affordable Housing Commission reports a substantial increase in the private rental sector and a contraction in social housing. Due to the timing, the committee was unable to comment on the recent explosion in interest rates and the consequent increased demand for cheaper public sector rental property. The problem here is that pressure on housing availability is being used not only by heavily indebted landlords but also by others carrying little debt to take advantage of housing shortage and force up rents. We have reports of 25% to 30% increases at a time when working families are under heavy pressure due to wider cost of living increases. The truth is that the table in paragraph 53 of the report on average monthly housing costs is now totally out of date as the impact of inflation feeds through into increased rent levels.
Finally, I have just a few words on the taxation of rental income. In a debate in 2017, I drew on work by the London Borough of Newham, which has established a licensing system not only to protect tenants but to ensure that tax is paid on landlord rental incomes. The IPPR had recently estimated that the Revenue lost £183 million in a single year in London alone. In Newham, only 13,000 out of 26,000 landlords had registered with HMRC for self-assessment. I wish the Revenue well as it follows this up—I hope it does so.
This is a brilliant report providing an abundance of research material to be used in the year to come. I will certainly use it again in further debates.
Lord Haselhurst (Con)
My Lords, I too am on restricted time. Nevertheless, I record my thanks to my noble friend Lady Neville-Rolfe and the staff of the committee—
Baroness Bloomfield of Hinton Waldrist (Con)
I am very sorry, but I am afraid the noble Lord is not down to speak in this debate, and we already have two other speakers in the gap.
I am told that the noble Lord, Lord Haselhurst, is welcome to speak in the gap, but perhaps he could wait for the other two speakers who already have their names down.
Lord Best (CB)
My Lords, I am speaking in the gap, with my apologies for failing to get my name down for this excellent debate last Friday. As a proud member of the committee—and with sincere thanks to our wonderful chair, the noble Baroness, Lady Neville- Rolfe, and our brilliant team, led by Dee Goddard—I will cut to the chase and pull out just one key ingredient from this valuable report: namely, meeting the demand and need for housing for older people.
The need for new homes that reflect the UK’s demographic shift is a prominent theme of our report, with one in four people being over 65 in the near future. Retirement accommodation addresses health and well-being, combats loneliness, reduces fuel poverty and prevents the need for and crippling cost of residential care. An older person right-sizing will so often achieve “two for one” by also bringing an underoccupied family home on to the market. Catering for those requiring more accessible, manageable and energy-efficient accommodation also benefits the overstretched NHS and local care services. Some 16,000 older people in hospital on any given day cannot be discharged because their home simply cannot take them back. While they continue to occupy a hospital bed, others keep waiting.
In a report published last week, Professor Mayhew of the ILC argues for a programme of 50,000 new homes for older people each year—one-sixth of the Government’s overall homes target—but the committee’s report notes that little progress is being made. The current pipeline is for less than 8,000 homes. The volume housebuilders are not interested. Stimulus from planning requirements, and stamp duty incentives—as for first time buyers—are needed. All those involved in this field welcomed the announcement in May 2021 of a governmental older people’s housing task force, with confirmation last February but with little news since then. Can the Minister update us on progress with this key initiative, involving the Ministers for both housing and care?
Lord Berkeley (Lab)
My Lords, I apologise for joining what has become a bit of a club of gap speakers. I also thank the noble Baroness, Lady Neville-Rolfe, for her excellent role as chair, and all the other members of the committee.
I will mention a couple of things about new builds, insulation and design. I do not think any other noble Lord has mentioned it, but the impression I got from the many witnesses we heard was that the key was to keep the price down. If you think about it, it does cost a bit more to insulate a house properly, to have proper water services and sewage disposal—I am not going to go into that now—and to design homes in a way that aligns with future transport provision. We do not seem to be doing that, and that compares very unfavourably with many parts of the continent I have seen. I hope we can do something about it.
Let us not forget that there is also a problem with the existing housing stock. People will be shivering in their homes because they cannot afford to or cannot get grants to insulate—there is a very large number of houses in that category. In his very powerful speech, my noble friend Lord Grocott mentioned empty houses. I live in London and lease from Camden Council. In my little block, one house has been empty for a year because the poor tenant died. Nothing has happened; it needs a good clean, but nothing at all has happened. I am sure that is very common across many cities. The 300,000 a year target is important, but let us try to make sure that the existing stock is used to the full and upgraded.
Lord Haselhurst (Con)
My Lords, I am grateful for the opportunity to speak and I apologise that I was not able to get my name in at the proper point before the debate began.
Building 300,000 new homes a year was once a matter for rejoicing, if achieved, but now there is more likely to be a hail of protest when the schemes to meet that target are brought forward. Demand continues to exceed supply, prices rise and the dream of homeownership fades. It is amazing that the ferocity of opposition to many of these schemes comes from a belief about not wanting to see the loss of green fields, yet the people who feel like that do not seem to recognise that, as of April 2018, 91.5% of land in England is classified as non-developed.
A roof over your head is a contributory step towards a caring society. We should remember that this is a strong ambition for many people and, if they can fulfil that wish, perhaps in the same village or town where their parents have lived, they are helping to build a society with a strong social structure.
What can be done? We need more planners, as my noble friend Lord Moylan said, and this needs to be an enhanced profession. The building industry ought to try to shed its image which, though it may not like it, is of people wading around in mud and lugging piles of bricks. The building industry has far more about it now, much of which should attract bright young people.
On local authorities, we picked up some signs in the course of our hearings that large unitary authorities and combined authorities are making rather more progress in building houses, maybe because their packages are better and more attractive due to the greater scope they have for place and space.
Wider public consultation is the real difficulty, as has been brought out. In collective form, with representatives of all the different interests in the effect of plans, there are signs that people will come to recognise how a well-thought-out development can help keep schools not short of pupils, strengthen the viability of neighbourhood shops, maintain local transport, produce more insulated homes and boost care of the elderly. This is the better side of development and what we must create and promulgate.
Lord Stunell (LD)
My Lords, I start by declaring my interests as an honorary president of the National Home Improvement Council and an honorary fellow of the Institution of Civil Engineers. For the purposes of this debate, I also declare that I am a mortgage-free owner-occupier, and that my wife and I have a leasehold flat in London. I am part of the housing-privileged, as are nearly all the opinion-formers in this building. We would do well to remember, when we talk about the housing crisis and housing issues, that our own perspectives may perhaps be limiting our understanding of just how traumatic and difficult it is for many people. In that light, I believe that this report is a very clear-headed and well-evidenced document that, as a committee member, I am very ready to endorse.
I will not review the speeches made by the 13 contributors so far, particularly as nine of us have been on the committee and we have probably spoken quite enough to each other about this already. I will go straight to the Government’s response to the report, which I have described elsewhere as being half-hearted—although I have to say that there have been three different Governments to choose from, and goodness knows exactly how the industry is supposed to plan when housing targets are yo-yoing all over the place. This year started off with 300,000 as the Government’s target, which was subsequently dismissed by the next Government as being Stalinist. As I understand it, the target was reinstated by the following Government to be 300,000 again—and we are of course waiting to see what happens on 17 November. In fact, with current policies, never mind the current economic situation, 300,000 is not so much Stalinist as fantasist.
We have had four Housing Ministers this year since our report was published. Is it any wonder that housing completions are falling, house price inflation is outrunning actual inflation, as it has been for over a decade, and, as the report makes clear, the balance between supply and demand for both social homes and homes in the private rented sector is totally out of kilter? At the very bottom end of the market, homelessness and sofa surfing are rapidly rising trends.
What are the solutions and how close are the new ministerial team to applying them? Noble Lords in their contributions so far have made it clear what some of those questions and some of those answers are. I will take just a quick look at local planning and ask the Government to say what they believe the locus of decision-making should be. Should it be decided in Whitehall, in the town hall, or in the local community? The committee, four Ministers ago, got a very clear answer that that Government and that Housing Minister believed that the decision should be based in the local community, who gave a great uptick to the idea of neighbourhood plans, which have been succeeding in many parts of the country. Will the Minister tell noble Lords what the current policy is on where planning should be and what it should be delivering?
I want to draw attention to one statistic which has not come into the debate today, which is that there are over 600,000 unused planning permissions for homes already in existence. The reality is that housebuilders build houses to sell. Most years they can sell 100,000 to 150,000 homes. If the Government want more homes built, they have to bribe or pay for those homes to be built. The report in front of noble Lords found that Help to Buy certainly provided the bribe okay, but there was very little evidence that, as a result, more homes were built using that money. Instead, housebuilders still sold 150,000 homes, but they cost a lot more.
Perhaps noble Lords will indulge in a thought experiment. Just imagine that there were suddenly no planning restrictions. How many homes would house- builders build each year? The answer is: not more than 150,000, although they would, to some extent, be in different places. Incidentally, it would probably be less than that, as the asset value of their jealously hoarded land banks would collapse and so, probably, would their business.
Ministers have to decide, if they want homes that are beyond the capacity of the private market to absorb, how much they want to pay to get those extra homes. They will certainly get the most homes for their bucks if they put the money into local council housebuilding. I am making the economic argument—a financial, Treasury argument—that if you want those homes, social housing is the way to get them at the lowest cost per house. They will also get those homes with fewer delays and fewer broken bones if they let local communities take control of their planning and stop imposing Whitehall master plans.
However, market failure is not the only barrier to more and better homes built more quickly. There is a major capacity and skills deficit in the industry. I was delighted to hear what the right reverend Prelate the Bishop of Durham had to say about what is happening in Sunderland to try to address part of that. That problem is an accelerating and deepening one, made worse by some of the actions of the biggest housebuilders.
The Halifax produced its running total on house prices, and the average house price in Britain last month was £292,000. That appeared in the newspapers as bad news, because it was a fall from the rise in the previous month, but what they did not report was that it was an 8.6% rise compared with 12 months before. The average house price has risen by £28,000 in 12 months. In London, where the average house price, according to the Halifax, is £551,000, the price has risen by more than £40,000.
According to a publication called Money Matters, the top eight housebuilders made £7 billion profit in the past two years. That includes Barratt, Taylor Wimpey, Redrow, Persimmon, Berkeley and others. They are all in the Home Builders Federation, their trade association. I am not sure whether it is an oligopoly, as the noble Earl, Lord Lytton, said or whether it is a 1960s trade union, but the outcome is pretty much the same: very low standards of work, with many faults and rampant poor workmanship—the situation is so bad that purchasers prefer to buy a 30 year-old house than a new one. If you were selling 30 year-old cars from the forecourt, you would expect them to go for a lower price than the brand new ones, but that is not what we have.
Yet, the HBF, in its report to noble Lords which has already been referenced in this debate, Building Homes in a Changing Business Environment, has a self-serving list of 12 areas of additional costs, for which it pleads that it needs recompense or, better still, delay or abolition of those 12 imposts. If it does not get that, it is quite clear: it will not build as many affordable homes. It threatens to offset the extra costs it alleges will arise against its Section 106 contribution—which, in 2019-20, delivered 51% of affordable homes. It still found space to complain about the loss of Help to Buy, which was fattening its members’ wallets, obviously, despite the committee’s evidence that it was a waste of money as far as getting extra homes was concerned.
So, what were those 12 things? Electric vehicle charging points were one. Upgrading homes to produce better energy performance and biodiversity net gain—matters that the noble Earl, Lord Lytton, referred to—was another. Even the levy to put right Grenfell’s cladding failures was on the developers’ list of unbearable costs that meant that they could build fewer affordable homes.
Housebuilders have inflated margins not just on their sales, with their multi-billion pound profits, but on their cost estimates for the 12 imposts that they are complaining about. I cannot go into those as we do not have the time but nowhere in the HBF’s report to noble Lords is there any hint that not only will purchasers of a new home nowadays expect to have an electric vehicle charging point but that having zero heating bills is a rather good sales pitch just now.
Of course, not a moment’s thought is given to the idea that maybe, just maybe, housebuilders should invest more in producing decent homes and take a dip in their profits. If they did, of course, that would be one important step towards letting SMEs back into the market. They develop smaller sites, develop more quickly, develop to higher standards and are usually more locally accountable.
These are my questions for the Government. First, are the Government committed to building 300,000 homes a year? Secondly, are they willing to accept the logic of the lowest-cost delivery of the homes that the market cannot provide, and to use what money there is after 17 November to invest in social housing? Thirdly, will they resist the HBF’s blackmail and insist on it raising money to pay for Grenfell cladding replacements, higher environmental standards in and around homes, and zero-carbon standards? Fourthly, are the Government ready to work with the whole construction industry to boost skills and capacity, debug the supply chain and support new entrants on to the housebuilding scene? If so, this report will have done its job.
Baroness Wilcox of Newport (Lab)
My Lords, I thank the noble Lord, Lord Moylan, for his detailed introduction of this important report; I also thank the members and former chair of the committee.
What was discovered? A UK housing market in which
“too many people are living in expensive, unsuitable, poor quality homes.”
To meet future housing demand, the report’s recommendations focused on seven areas, many of which have been mentioned time and again in this House in various debates. Planning reform, social housing provision and skills shortages were all deemed failures over the past 12 years of Tory Governments, whoever was in charge.
Government choices over those 12 years have broken our housing system, allowing developers to maximise profits, as noted by the previous speaker, and build housing for investment rather than good-quality, safe, secure and affordable homes. They have broken the link between work and affordable, secure housing for many renters and first-time buyers. The Government built only 5,955 social rent homes in 2020—a 12% decrease on the previous year and an 85% decrease from 11 years ago.
The scale of the housing crisis means that we need a bold new approach that underlines the importance of housing as a human right and the bedrock of stable, secure family life, giving people a stake in their communities and societies and supporting opportunity and aspiration. Indeed, that is the first layer of Maslow’s hierarchy of needs. Labour reforms would allow communities to build the right homes in the right places and at prices that local people can afford. We would rebalance power between developers and communities by reforming arcane purchasing powers to stop speculators reaping all the rewards and closing the loopholes that developers use to wriggle out of affordable housing commitments. We would ensure that local councils have stronger powers to deliver the affordable housing that their communities need, not the housing that will make the most profit for developers.
Labour would give first-time buyers first chances on new homes and stop foreign buyers buying up homes off plan, before local people can get a look-in. We would set out an ambition to re-establish the link between genuinely affordable housing and average earnings, bringing affordable rents and the dream of homeownership closer for those locked out of the system today.
There are nearly 1 million more people in the private rental sector than there were when the Government came to power in 2010. Too many people are stuck in a system with no power to challenge rogue landlords, no savings to get on the housing ladder and housing that falls below acceptable standards. All those renters need a deal that gives them the security and dignity they deserve. Some 800,000 fewer households of people under the age of 45 now own their home.
The Government’s current proposal to extend the right to buy will only worsen the chronic shortage of affordable homes; it does nothing to fix the lack of social housing and is totally lacking in ambition for millions stranded in the private rental sector. In England, 190,000 homes have been lost since the Tories came to power in 2010. That number is equivalent to all the homes in Bristol. Ministers have failed to deliver the promised replacement for homes sold through right to buy. Less than 5% of the stock has been replaced. Now, for the third time in seven years, Ministers are promising expansion of right to buy into housing associations, with no plan to increase the number of new social homes or genuinely affordable homes to buy. This will lead only to more people unable to secure a home.
One major reform in the Levelling-up and Regeneration Bill relates to scrapping Section 106 agreements, which have been talked about several times this evening, and replacing them with a new national infrastructure levy. I assure noble Lords that, during my tenure as leader of Newport City Council—I am sure the Minister also experienced this when she was a council leader—every negotiation on a Section 106 agreement was hard-fought, as developers employed expensive legal experts to deviate from these agreements wherever they can. Doing away with Section 106 would be completely disastrous to ensuring that developers deliver a proportion of affordable and social housing within new developments, because the proposed levy would replace this delivery mechanism, with revenues going to local authorities to build infrastructure as well as housing. Local authorities would therefore take both the financial risk and responsibility. In the current financial and political climate, that is another unaffordable option for local government.
But Labour has a plan. We will build more affordable houses, linking the definition of affordable to local wages for the first time. We will build more social homes and give first-time buyers first chances. We are going to rebuild our social housing stock and bring homes back into the ownership of local councils and communities, with home ownership opened up to millions more. We will tilt the balance of power back to private renters through a powerful new renters’ charter and a new decent homes standard, written into law. The charter will have far-reaching consequences for those in rented accommodation, including by ending Section 21 evictions, reducing eviction powers for landlords whose tenants are in arrears, introducing four-month notice periods, creating a national register of landlords and initiating a legally binding decent homes standard in the private rental sector.
We will close the loopholes developers exploit to avoid building more affordable housing and put an end to the outrageous practice of foreign buyers purchasing swathes of new housing developments off plan, before local people can even see them. We have an ambition to re-establish the link between genuinely affordable housing and average earnings, bringing affordable rents and home ownership closer for those locked out of the system.
I conclude by asking the Minister the following questions, some of which my noble friend Lord Grocott and others addressed earlier. While building more homes is essential to address the housing crisis, supply alone will not fix the affordability crisis, which is as much a part of the housing crisis as pure numbers. Last year, there were fewer than 7,000 social homes built in England. What plans do the Government have to increase social housebuilding? What does the Minister believe is an acceptable number of social homes to build each year, and will the Social Housing (Regulation) Bill deliver this?
The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Scott of Bybrook) (Con)
My Lords, I begin by thanking the noble Lord, Lord Moylan, for securing this important debate on the committee’s report. I also thank the noble Baroness, Lady Neville-Rolfe, the noble Lord, Lord Moylan, and the members of the Built Environment Committee for their thorough inquiry into housing demand and the subsequent report. Let me also thank all noble Lords for their contributions today. It has been a very wide-ranging but extremely challenging and interesting debate. If I may, I shall go through the tenets of the report and the issues arising from it in this debate.
I start by saying that housebuilding is a priority for this Government. We are committed to continue working towards our ambition of delivering 300,000 new homes a year. However, our focus is not just on numbers. The types of homes provided, their quality, the infrastructure that new developments need and the communities that they are in all matter very much.
The committee’s report highlighted the need to give full consideration to our ageing population, especially those older people living alone, when developing housing policy. I thank the noble Lord, Lord Best, for all the work he does in this area of housebuilding. My department is working closely with the Department of Health and Social Care and with housing, health and social care stakeholders to assess how we can support the growth of a thriving older people’s housing sector. The affordable homes programme, enabling the delivery of housing for older, disabled and other vulnerable people, is extremely important to this Government. Our older people’s housing task force will also look at ways to improve the choice of and access to housing options for these groups, particularly older people. I understand that this is being taken forward by the new Housing Minister and that a date will be announced for an older people’s housing task force in due course.
Turning to housing types and tenures, our commitment is that there should be enough social homes and fewer families housed in temporary accommodation in this country. That is important to us. We do not have targets because we just make sure that we have enough social homes, particularly family homes, so that families are not in temporary accommodation—this needs repeating. Since 2010, we have delivered over 598,900 new affordable homes, of which over 157,200 are for social rent. The Government are also committed to reducing the need for temporary accommodation by preventing homelessness before it occurs. To this end, we are investing £2 billion in tackling homelessness and rough sleeping over the next three years. These are all issues rightly brought up by the noble Lords, Lord Davies of Brixton and Lord Grocott, the right reverend Prelate the Bishop of Durham, and the noble Earl, Lord Lytton.
The report outlined the importance of home ownership. Since its publication, the Help to Buy equity loan scheme has ended, on 31 October 2022. From the scheme’s launch in 2013, it has supported over 361,000 households to buy a new home and boosted housing supply: 37% of all homes sold using the scheme would not otherwise have been built.
We have also expanded the first-time buyers’ relief by increasing the level at which first-time buyers start paying stamp duty from £300,000 to £425,000. First-time buyers will be able to access this relief on property purchases up to £625,000, compared with £500,000 previously. Our shared ownership and right-to-buy schemes also continue to help people into home ownership and out of the rented sector.
SMEs have a vital role in making the housing market more diverse, competitive and resilient, as we heard from my noble friend Lord Moylan. We have put in place a package of measures to support them. This includes our £1 billion ENABLE Build guarantee scheme to reduce the cost of debt for SMEs. Since publication of the committee’s report earlier this year, we have launched the £1.5 billion levelling up home building fund, which builds on the more than £2 billion of development finance that was invested under the home building fund and continues to support SMEs and new entrants into the sector. Through the Levelling-up and Regeneration Bill, changes to the planning system will support SMEs to build more homes by making the planning process easier to navigate, faster and more predictable.
Many noble Lords brought up issues concerning planning. I particularly thank the noble Baroness, Lady Thornhill, who gave us the real nitty-gritty of what it is like in a local authority and the challenges we have all faced in the planning system—the challenges of what government, local authorities and, in particular, communities want. For me, the important thing that was brought up was the fact that you need to take communities with you. That is what local government is very good at, and we need to spend more time doing that because that is the way we get our local communities supporting the local plans early on; then we get the houses built that they and we need in this country.
The report made several recommendations on the planning system. A number of these recommendations have been addressed in the Levelling-up and Regeneration Bill, which is currently making its way through the House of Commons and will be in this House pretty soon. I will briefly cover these in turn.
The Government continue to stay committed to the planning measures in the Levelling-up and Regeneration Bill as they form a key part of the Government’s response to the challenge of levelling up the country. The Bill will modernise our planning system by putting local people at its heart, which will deliver more of what communities want. The reformed system will champion beautiful design, in keeping with local style and preferences, and ensure that development is sustainable and accompanied by the infrastructure that communities need.
Our reforms will ensure that local plans are under- pinned by better data, making them more transparent and easier to understand. This will enable local communities to more easily influence and comment on their emerging plans. The local plan preparation process will also be more standardised and shorter, supported by streamlined evidence-based requirements to reduce the burdens on local authorities—something for which they have been asking for a long time. The increased ability for local communities to get involved in planning processes will ensure that development is brought forward in a way that works best for local people.
The Levelling-up and Regeneration Bill gives the Government powers to create a new infrastructure levy. This is something else that my noble friend Lord Moylan and other noble Lords brought up. The levy will aim to capture land value uplift at a higher level than the current developer contribution regime, allowing local authorities to use the proceeds to provide the affordable housing and infrastructure that communities need. The levy will deliver at least as much, if not more, affordable housing than the current system of developer contributions. This will be secured through regulations and policy, supported by provisions in the Bill.
There were a number of questions on the levy, which I will try to answer. My noble friend Lord Moylan asked whether the levy will be for only that site. Under the levy, local authorities will be required to prepare a new document called an infrastructure delivery strategy, which will make it much clearer for communities what will be provided and when.
My noble friend Lord Moylan asked a further question on the levy. Local authorities will be able to borrow against infrastructure levy receipts and to build up cash reserves from the payment of the levy—again, something local government has been asking for. This will help local authorities to fund infrastructure that communities need.
Neighbourhood planning was brought up a number of times by several noble Lords. Neighbourhood planning is an important part of our planning system. It will now have greater weight in planning decisions, but we are also looking at allowing local communities to provide a simpler neighbourhood priorities statement which will not take as long. That can then be reflected in a neighbourhood plan as time allows.
We are proposing to make the levy a non-negotiable charge on a fixed proportion of the gross development value. That will reduce the negotiation issues to which, as we have heard from a number of noble Lords, Section 106 agreements are sometimes prone. Greater certainty and transparency around cost and the ability to factor expenditure into the price paid for the land should mean that affordable housing and infrastructure delivery is improved.
The Bill will require housing developers formally to notify the local authority via a development commencement order when they commence development. We are also modernising and streamlining existing powers for local authorities to serve completion notices—sometimes called “build-out”—which I know is very important to a number of noble Lords. These measures will increase transparency on build-out and make it easier for local authorities to take action where slow build-out occurs.
The committee’s report highlighted the importance of local planning authorities. It is vital that we have well-resourced, efficient and effective planning departments. To enable this, we are working alongside the sector to design a suite of targeted interventions to support the development of critical skills and build capacity across local planning authorities. As part of this work, the department is supporting local authorities in the development of new digital tools which will help make planning processes more efficient. We also intend to consult on an increase in planning fees that will help provide additional resources to support the delivery and improvement of planning services.
The committee’s report also suggested that we consider how best to update the calculation of local housing need. As with all policies, we are monitoring the impact of the standard method, particularly the impact of changes to the way we live and work, as that becomes clearer. We are developing policy on this topic and intend to set out further thinking on the direction of travel as soon as we are able to.
Many noble Lords brought up the skills issue. The committee’s report covered the importance of skills in meeting housing demand, and we are working to address skills shortages across the construction industry. The Government are increasing funding for apprenticeships to £2.7 billion in 2024-25. This will continue to support apprenticeships in non-levy employers, often SMEs, for which government will continue to meet 95% of apprenticeship training costs. I thank the right reverend Prelate the Bishop of Durham for giving us the example of Sunderland, where local colleges are taking this up and realise how important this sector is in increasing the skills base.
We are also part of a construction skills delivery group which has agreed new actions, including greater recruitment of apprentices, increased support for T-levels and improved routes into the industry. This work has had real-world impacts already. Apprenticeship starts in the construction sector in 2021-22 reached more than 32,000, exceeding pre-pandemic levels. As part of the building safety agenda, we are also working to develop a suite of national competence standards for individuals working on buildings.
I am conscious of the time. There was quite a lot of discussion on quality and design. As I said at the beginning, it is not just about numbers; it is about quality of housing. The quality of housing is fundamental to the well-being of communities and helps create thriving neighbourhoods. The levelling-up White Paper housing mission outlined the Government’s ambition to reduce the number of non-decent rented homes by 50% by 2030, with the biggest improvements in the worst-performing areas. This will be achieved through new minimum standards for privately rented homes and broader reforms to the social rented sector.
The noble Lord, Lord Berkeley, brought up a couple of issues, particularly on energy usage in homes. The Government are investing £12 billion in the Help to Heat schemes, which will allow investment in the housing stock we already have to make houses more energy efficient—things such as boiler upgrades, sustainable warmth competitions and home upgrade grants. There are grants out there and I am happy to give the noble Lord further details on that.
The noble Lord, Lord Stunell, brought up what we are going to do to make future homes more sustainable. From 2025, the future homes standard will ensure that new homes produce at least 75% less CO2 emissions than those built in 2013. These homes will be future-proofed with low-carbon heating and high levels of energy efficiency. That is an important part of where we are going on new homes.
My noble friend Lord Moylan mentioned modern methods of construction, which I am very interested in because that might be one way in which we can deliver more homes much faster. The report made additional recommendations about modern methods of construction. By embracing MMCs, housebuilders can deliver good-quality, energy-efficient new-build homes more quickly. The Government are working to address strategic barriers, notably the lack of component standardisation across the industry and the difficulties in obtaining product warranties, and therefore insurance and mortgages. The work we are doing will continue to provide assurance around the quality and safety of MMCs to bring them on to the market.
To conclude, I thank all noble Lords once again for their contributions today.
Viscount Waverley (CB)
It is getting late, but will the Minister kindly undertake to give the Government’s considered view on the whole question of possibly district councils, and certainly the national Government, having a key role in the decision-making over central infrastructure projects when it comes to planning permissions being given for the housing? I do not expect one now, but will the Minister kindly undertake to give a really considered view on that and write to me?
Baroness Scott of Bybrook (Con)
I was going to mention the noble Viscount and the issues of large infrastructure, such as airports, before I finished.
I thank my noble friend Lord Moylan for moving the debate and look forward to continuing the discussion and working collaboratively on the issues raised with noble Lords and the committee as it moves forward. The time is getting late. I know I have not answered everybody’s questions, but I will take a long look at Hansard, put out a letter to all members of the committee and put a copy in the Library.
Lord Moylan (Con)
My Lords, I am grateful to my noble friend for that comprehensive response. I apologise to the House, as I should have said when I first spoke that, in addition to the other registered interests that I declared, I am also an officer of the APPG for SME housebuilders; I should have said that, since it was clearly relevant, but it slipped my mind.
I am very grateful to all noble Lords who have spoken. If I may say so without giving offence, it has been a livelier and more challenging debate that I had expected when we started out. There have been many points made and much illumination cast. Many points have been made with which I could agree and some with which I do not agree. If the role of my noble friend the Minister is to respond to the points made in the debate, perhaps my role ought to be in some way to fuse together all the strands that arise from it, to create one single, coherent policy on which all of us could agree and with which we could move forward; but I fear that that would be well beyond my abilities.
I will use the couple of minutes at my disposal to focus on a single point, which struck me with great force. It was a point made by the noble Earl, Lord Lytton, when he referred to the fact that, with new housing developments of any size, the financial and managerial responsibility for external amenities is increasingly being placed on the householders through a service charge.
I mentioned that I was a member of the board of the Ebbsfleet Development Corporation. We have seen many historical planning permissions granted before the corporation was formed now being implemented, and this is the pattern of what is happening. These are services that the rest of us expect to be maintained and provided largely by the local authority through the council tax that we pay. They are to do with parks, street trees, grass on the verges and such things; yet these households are paying directly for the amenities as well as paying a full council tax to their local authority. I draw attention to this simply because I believe, and the noble Earl may agree, that this will not be sustainable, politically or financially, for very much longer. It may be the next scandal, like excessive ground rents, which are now largely dealt with. In this case, it will be service charges, not ground rents; I think that will be the next scandal that the Front Bench—the Government—are going to have to reckon with.
This is the only point that I pick out from the debate because I thought it needed amplifying, and I agreed so much with it. With that, I thank everybody who has participated and beg to move the Motion standing in my name.