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Oral Answers to Questions
(2 years ago)
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Martin Docherty-Hughes (West Dunbartonshire) (SNP)
Chris Law (Dundee West) (SNP)
Chris Stephens (Glasgow South West) (SNP)
Angela Crawley (Lanark and Hamilton East) (SNP)
Steven Bonnar (Coatbridge, Chryston and Bellshill) (SNP)
The Secretary of State for Business, Energy and Industrial Strategy (Grant Shapps)
Future energy prices remain highly uncertain and are expected to remain elevated throughout next year. The energy price guarantee from April ’23 is currently expected to equate to £500 of support for households in 2023-24.
Martin Docherty-Hughes
As I hope the Secretary of State will know, recent analysis published by The Herald has shown that the typical dual fuel bill for people in Scotland will be £3,300—£800 more than the current £2,500 price cap. Given the Chancellor’s plans to increase the price cap further, what levels does the Secretary of State expect average energy bills to reach in Scotland next year?
Grant Shapps
As the hon. Gentleman will know, a comprehensive range of different support is in place, including the energy price guarantee, which on average looks to guarantee £2,500. It is not specific to each household, of course, and it depends on how much energy is actually used—it is a cap—but there is additional help including the £400 non-repayable support through the energy bills support scheme.
Chris Law
The support to which the Secretary of State refers offers scant consolation to those suffering, particularly the near-130,000 households in Scotland who rely on heating oil. The £200 of support from the UK Government covers less than half the price of the typical minimum order of heating oil, so will he finally commit to increasing the support available to these households?
Grant Shapps
Of course, everybody has had a £400 discount from their bill that is not repayable, and 8 million families also have additional support—those on income support and the like. The hon. Gentleman mentions the £200; we only just doubled that from £100 in the autumn statement the week before last.
Chris Stephens
Rising bills terrify most households. The End Fuel Poverty Coalition recently warned that
“predictions of ‘a humanitarian crisis’ for children stuck in cold homes are now a very real possibility”,
so does the Secretary of State accept that failure to provide additional support for vulnerable families in April will have dire consequences?
Grant Shapps
I just mentioned support for 8 million families that goes beyond just the £400 and the energy price guarantee. Those 8 million families will benefit from all manner of additional support—£1 billion for local authorities, additional money for people on various forms of universal credit, and money for pensioners—all of which is designed to help people through a crisis that the whole House should recognise has been brought on by Putin the dictator invading Ukraine.
Angela Crawley
Contrary to what the Secretary of State says, the consequences will be dire. The Institute of Health Equity indicates that the development of millions of children will be damaged, so will he commit to providing adequate support for vulnerable families so that no child suffers the diverse health impacts of fuel poverty this winter?
Grant Shapps
I have mentioned the 8 million homes, but perhaps it will help the hon. Lady if I point out the specific means-tested benefits which mean that those families will receive an extra payment of £650 on top of all the other assistance and help that I have outlined. This is an unprecedented situation. We have put billions of pounds of taxpayers’ money into supporting people. I hope the whole House will recognise that this Government have done everything within our power to assist.
Steven Bonnar
The reality is that it is a damning indictment of decades of failed UK Government energy policy that we are even discussing harm to children as a result of rising energy Bills, given the vast energy resources at Scotland’s fingertips. Given that context, does the Secretary of State agree that it is absurd that nearly 1 million households in Scotland will be experiencing fuel poverty?
Grant Shapps
I have mentioned the household support fund, which is also available for the most vulnerable. I do just have to say, to this line of questioning, that it is extraordinary that while this Government are spending so much energy and money trying to support consumers, we still have the SNP refusing to allow new renewables such as nuclear power.
Sir Desmond Swayne (New Forest West) (Con)
When will there be clarity for park home owners about exactly what they have to do to get what they have still to receive?
Grant Shapps
My right hon. Friend is absolutely right to point out the plight of park home owners, who are in a different position from others because of the lack of connection, sometimes, to the grid. We are working very hard to ensure that they get their payments as well, which will happen this winter. My right hon. Friend can be reassured that we are doing that, and currently working through local authorities to deliver it.
Jonathan Gullis (Stoke-on-Trent North) (Con)
Mr Speaker, I know you are a huge fan of making sure your pottery comes from the Potteries. Ceramic manufacturers, despite the energy price cap guarantee—it has been hugely helpful, with one manufacturer saying it will save it £4 million over the winter months—are still left in a dire situation. Will the Secretary of State agree to meet me, the other Members of Parliament for Stoke-on-Trent and Rob Flello, the chief executive of the British Ceramic Confederation, to discuss what further support can be given to this vital industry?
Grant Shapps
My hon. Friend is absolutely right about the pressure those manufacturers are under, and I absolutely recognise that. There is the energy-intensive industries discount of 85%, but I would certainly be very happy to meet him and colleagues to discuss the matter further.
Stephen Flynn (Aberdeen South) (SNP)
To summarise, what we know is that, in Scotland, average household energy bills will exceed the energy price guarantee, but the Secretary of State is unwilling or unable to tell us by quite how much. Of course, we know that on top of that households in Scotland, and indeed children in Scotland, are going to suffer as a result, yet we see no new announcements of additional financial support forthcoming. All the while, Scotland produces its own energy far in excess of what would be required to meet its own demands. Can I therefore ask the Secretary of State whether it is little wonder that viewers watching this at this moment in time would be thinking that Westminster is failing Scotland?
Grant Shapps
I absolutely do not agree with the hon. Gentleman. I have already talked about the £400 that everybody has been able to receive back, with some additional measures coming through for people with unusual connection positions. We have the £650 cost of living payments for those on benefits, £300 for pensioners and £150 for disability costs of living. From what I can work out, the SNP does not like its oil and gas industry and does not want new nuclear power, so I have no idea what its plan actually is.
Stephen Flynn
It is a remarkable state of affairs that a nation that produces more energy than it requires faces child fuel poverty as a result of the actions of this Government here. The Secretary of State does not like those facts, but here are some more for him. To alleviate this crisis in the medium to long term, what we need from this UK Government is not investment in nuclear, but investment in clean, sustainable renewable industries. In that regard, can I welcome his U-turn on onshore wind, but also seek clarity about whether he will provide the same tax incentives for the renewables sector as he will for the fossil fuel industry?
Grant Shapps
This Government have a very proud record when it comes to renewables. When we came to power, barely 10% was from renewables; now the figure is 42%. In fact, on one day the week before last over half of this country’s energy was produced from offshore wind alone. The SNP does not like the answers I am giving because the amounts of money we are spending supporting people, including Scots, with energy bills this year means that, for example, the average single parent on means-tested benefit will be £1,050 better off because of the energy bills support scheme. Yes, we are doing our part, and perhaps it is time the SNP looked at its own policy to make sure it is encouraging energy production.
Tom Hunt (Ipswich) (Con)
The Secretary of State for Business, Energy and Industrial Strategy (Grant Shapps)
I visited the site yesterday and was delighted to confirm the nearly £700 million investment in Sizewell C pledged in the autumn statement.
Tom Hunt
There are clearly significant national benefits to Sizewell C in terms of national security, but as a Suffolk MP I am particularly interested in potential jobs creation. I understand that about 10,000 new jobs could be created. I previously worked closely with EDF and Suffolk New College to see how we can ensure that as many local people—and my constituents in Ipswich—benefit from Sizewell C as possible. Will the Secretary of State, in his own time—when he has a little availability—meet me, the principal of Suffolk New College, other education sector leaders and EDF to see how Ipswich people can benefit in a real, tangible way from Sizewell C?
Grant Shapps
My hon. Friend will be interested and happy to learn that I met two apprentices at Sizewell yesterday, who have two of what we expect to be 1,500 new apprentice jobs. He is right to mention 10,000 jobs in the immediate area—perhaps there will be 20,000 across the country—and we expect more than 70% of investment in the project to come to the UK. I will gladly meet him and his colleagues to discuss that further.
Tim Farron (Westmorland and Lonsdale) (LD)
Cumbria’s energy coast, including nuclear, wind, wave and tidal, also has the capacity to create thousands of jobs in our county. When will the Secretary of State make an announcement in respect of his engagement with Cumbria’s energy coast to make best use—
Mr Speaker
Order. That is not a fair representation of the question. It is a poor effort, so I am going to let it go.
Selaine Saxby (North Devon) (Con)
The Minister for Climate (Graham Stuart)
Ofgem supports community energy projects and welcomes applications from the sector to the industry voluntary redress scheme. We encourage community energy groups to work with their local authority to support the development of community energy projects through UK-wide growth funding schemes.
Selaine Saxby
Will my right hon. Friend support measures to enable community energy schemes to sell their clean power directly to local customers, as contained in last Session’s Local Electricity Bill, and look at including them in the Energy Bill?
Graham Stuart
Although I am sympathetic to the outcome desired by proponents of, for instance, last Session’s Local Electricity Bill, I am concerned that mandating suppliers to offer local tariffs may be disproportionate and have unintended consequences. But I am delighted to tell my hon. Friend, who I recognise is a great champion in this area, that as part of a wider review of market mechanisms we are considering retail market reforms and responses to the electricity market consultation.
Anna McMorrin (Cardiff North) (Lab)
While the Government seem particularly confused about their position on onshore wind—the most tried and tested and easiest to roll out of all renewables—their focus on community energy is even worse. The creation of strong, well informed, capable communities able to take advantage of their renewable energy resources and create community benefits is embraced by the Welsh Labour Government. Why do the Conservative Government not do the same?
Graham Stuart
I thank the hon. Lady for her typically partisan contribution. [Interruption.] She is always consistent, and her Front-Bench colleagues rightly point out that I have some things in common with her. The rural community energy fund has provided £8.8 million in development grants for 208 projects focusing on a variety of technologies, which I am pleased to say include solar, wind, low-carbon heating and electric vehicle charging. The Government will be delighted to work with the devolved Administrations and others to drive forward our pathway to net zero.
Bim Afolami (Hitchin and Harpenden) (Con)
Referring to the Minister’s response to my hon. Friend the Member for North Devon (Selaine Saxby), energy market reform is critical to ensure the growth of the community energy sector and to splitting out the wholesale gas price from the electricity price and other things. Will the Minister update the House on the Government’s current thinking on wholesale market reform?
Graham Stuart
We will update the House as soon as we have announcements to make.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
Community energy schemes such as Hoy Energy Ltd in Orkney perform a really important role in the community by reinvesting their profits in local schemes and projects. Will the Minister assure me that when it comes to devising regulations under section 16 of the Energy Prices Act 2022, there will be exemptions for such companies to ensure that they can continue to put the profits that they generate back into the community?
Graham Stuart
The provisions in the Energy Prices Act have been superseded by the announcements made by the Chancellor in the autumn statement, and therefore I do not think that they strictly apply any longer, as the right hon. Gentleman has suggested.
Dr Alan Whitehead (Southampton, Test) (Lab)
Does the Minister accept that the inability of local energy providers to trade within their local community remains one of the biggest obstacles to the development of community energy overall? If he is not willing to take on board the provisions of the community energy Bill that is presently being promoted by community energy supporters, does he have any other ideas as to how that problem could be overcome in the context of the Energy Bill, which I am delighted to see has resumed its parliamentary process today?
Graham Stuart
I thank the hon. Gentleman for his question, and for his close interest in this field and knowledge of it. I look forward to sharing with the House further thoughts on how we can deliver precisely that more dynamic situation going forward. As he rightly says, there are provisions in the Energy Bill, which I am delighted to announce is resuming its passage through Parliament.
Sarah Green (Chesham and Amersham) (LD)
Lee Anderson (Ashfield) (Con)
Andrew Bridgen (North West Leicestershire) (Con)
The Minister for Climate (Graham Stuart)
The Government have doubled support to £200 for alternatively fuelled households in recognition of the pressures caused by rising fuel costs. We are committed to delivering that payment to households as soon as possible this winter, and will announce further information on the delivery and timing of those payments in due course.
Sarah Green
People living in park homes are concerned that they have had no further information on when support will be available to them, or how they will access it. One representative of the company managing a park home site in my constituency first raised this issue with me in August, yet months on we still have no further information. Can the Minister provide some reassurance that people living in park homes will not slip through the cracks, and give some clarity as to when they will receive the £400 of support that they have been promised?
Graham Stuart
I think the hon. Lady has slightly confused the alternative fuel payment for those who are not on the gas grid with the energy bills support scheme—an easy mistake to make in this complex landscape. Those with a domestic electricity supply are already receiving the £400 discount under the EBS scheme that she has talked about. We are looking to come forward with details about timing, but it will be this winter; we are looking to work with local authorities in Great Britain to set up a scheme whereby people in park homes can apply as households, to ensure that they receive that £400 through local authorities as quickly as we can manage.
Lee Anderson
Now then. The residents of Ashfield mobile home park do not have a regular energy supplier. They get their gas and electricity sold on by the park owner—who, by the way, marks it up and puts a little bit back in his own pocket. Those residents do not have a great deal of money, so can the Minister please reassure them that help is on the way as soon as possible?
Graham Stuart
I thank my hon. Friend for his question; I hope he found my letter yesterday, and the annex to it, helpful. As I said, the Government have doubled support to £200 for alternatively fuelled households in recognition of the pressures caused by rising fuel costs. We are also determined to get support in place for edge cases. It sounds simple, and if I were where my hon. Friend is, I would certainly be shouting at the Minister to get on with it, but we do not live in a central database-driven society; it is necessary to identify these people in a way that protects public money. We are working flat out to deliver this support as quickly as we can.
Andrew Bridgen
A number of my constituents live in park homes, and many more have no access to gas mains and so rely on bulk deliveries of kerosene and liquefied petroleum gas. They are all concerned about the rising cost of energy, so would the Minister outline to the House how he is going to communicate to those groups the support that is available, and ensure that it is delivered for them this winter?
Graham Stuart
I thank my hon. Friend for his question. As I said, we are very much looking to work with local authorities, which we think are in the best position to help to go through the verification and assessment process and look after public money, and most importantly, to get the funding to heating oil users and others who need support to meet these unprecedented bills this winter.
Mr Speaker
I call the Chair of the Business, Energy and Industrial Strategy Committee.
Darren Jones (Bristol North West) (Lab)
The Government announced this week that £1 billion will go towards energy efficiency to reduce energy bills. Will the Minister confirm how many new homes will be covered by that £1 billion?
Graham Stuart
I cannot give the Chair of the Committee an exact figure, but I hope that very large numbers will be covered by that—[Interruption.] Opposition Front Benchers may find that amusing, but we should remember how few homes had an energy performance certificate C when Labour left power and how many more have had their level raised since then.
Henry Smith (Crawley) (Con)
The Minister of State, Department for Business, Energy and Industrial Strategy (George Freeman)
Despite the Opposition’s constant attempts to talk down UK manufacturing, the truth is that we are ninth in the world and fourth in Europe, and that our advanced manufacturing sector contributes £205 billion gross value added to the UK economy. That is why we continue to support it in sectors such as aerospace, automotive and life sciences through £850 million to the high-value manufacturing catapult and nearly £200 million through our Made Smarter programme.
Henry Smith
Recently, Rolls-Royce, in conjunction with Gatwick-based easyJet, carried out a successful green hydrogen jet engine trial. Will my hon. Friend assure me that the Government will continue to invest in sustainable aviation innovation?
George Freeman
I thank my hon. Friend, the chair of the all-party group for the future of aviation, and I take this opportunity to invite the whole House to celebrate the world-first achieved by Rolls-Royce and easyJet: the first run of a green hydrogen-powered auto engine. I am happy to reconfirm our commitment to aerospace technology. That is why we have put £685 million into the Aerospace Technology Institute programme and £125 million through the industrial strategy challenge fund into the UK Research and Innovation future flight challenge. The UK is leading in clean energy for the aviation sector and jet zero.
Ian Lavery (Wansbeck) (Lab)
The Government set a goal of the development of eight gigafactories before 2040. Will the Minister say how that is progressing, and will he reassure my constituents that the Government are in conversation with Britishvolt to secure its gigafactory site at Cambois in my constituency?
George Freeman
The hon. Member is absolutely right that we are committed to growing that supply chain for the gigafactory revolution in the north-east, the midlands and all around the country. That is why we set out, in our critical minerals strategy, a coherent plan for making sure that the country has the whole supply chain, as well as those factories. I know that the Minister with responsibility for energy technology will be happy to talk to the hon. Member to make sure that the supply chain is working locally as well.
Bill Esterson (Sefton Central) (Lab)
On 16 November, the Government awarded the contract for the new fleet solid support ships to a Spanish state-led consortium. Around £700 million of that contract will go to overseas industry when our steel and shipbuilding sectors are crying out for support. Also on 16 November, the Minister for Industry and Investment Security wrote to me to say that the future of UK steel companies was a commercial decision. Will this Minister explain why the UK Government did not take the commercial decision to deliver £700 million of work to UK steelmakers and shipyards?
George Freeman
The hon. Member raises an important point. We are committed to using our Brexit freedoms both on procurement and regulation to support UK industries. I will raise that issue with the Minister for Industry and Investment Security, who sadly cannot be here this morning, and make sure that she picks that up with the hon. Member directly. However, the answer is that we are totally committed to the UK steel sector and to getting the balance right between ensuring that we have open procurement and that we use Government procurement muscle to back our industries. They are not easy decisions to make, but we are very sighted on them to try to get that balance right.
Catherine West (Hornsey and Wood Green) (Lab)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kevin Hollinrake)
It is a delight to be part of a ministerial team of whom many members actually have a business background. We are for business because we are from business, and we know what it is like to lie awake at night worrying about how to pay the bills.
The reversal of the national insurance rise will save small businesses an average of approximately £4,200 a year, alongside the cut to fuel duty for 12 months and the energy bill relief scheme. The British Business Bank supports small and medium-sized enterprises to access growth finance.
Catherine West
From Muswell Hill to Myddleton Road, from Turnpike Lane to Hornsey High Street, we are celebrating Small Business Saturday in my constituency this weekend. There are two major concerns on the mind of small businesses. The first is the business rates expense. When will the Minister consider reforming it to help small business? The second is a wider question for business and trade unions about retained EU legislation, which is providing a lot of uncertainty in the business community and a drag on growth. When will the Government come out with a decision on that crucial issue?
Kevin Hollinrake
I am grateful for the hon. Lady’s question, especially the part about Small Business Saturday. As hon. Members can imagine, I will be spending much of the day visiting small businesses across my constituency. I will also shortly be attending a House of Lords reception to celebrate the 100 small businesses recognised in the programme.
As the hon. Lady knows, in the autumn statement my right hon. Friend the Chancellor announced £13.6 billion of support for businesses over the next five years, reducing the burden of business rates for SMEs. Of course we all want to see reform, but simply announcing the scrapping of business rates without announcing any replacement cannot be the right thing, because it does not give business the certainty that it needs. That is the sensible reform that I think the hon. Lady should be grateful for.
Mr Gagan Mohindra (South West Hertfordshire) (Con)
May I put it on the record that as well as being the week of Small Business Saturday, this is Family Business Week? I had the opportunity to visit Tony at Croxley Hardware a few weeks ago. Does the Minister agree that small businesses are the lifeblood not only of the economy, but of our communities?
Kevin Hollinrake
I thank my hon. Friend for his recognition of the small businesses in his constituency. He is absolutely right: there is no greater force behind the supply side of the economy than small businesses, which are essential to prosperity and productivity. He is absolutely right to champion their cause, and we should all join him in that endeavour.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
There has been some talk about business rates. I appreciate what the Minister says about needing a proper plan. Businesses in my constituency tell me that business rates are their big bête noire and that reforming and replacing them would make their lives a lot easier and their survival more certain. Will he give some indication of the Government’s thinking, and of the timescale in which they might be looking at the matter? Labour is proposing a radical reform.
Kevin Hollinrake
Well, Labour is proposing a radical reform, but we cannot quite work out whether it will scrap business rates or reform them. There have been mixed messages among Labour Front Benchers—indeed, among the shadow Chancellor and the Leader of the Opposition—so we are not quite sure what Labour’s policy will be. We are certainly not sure how it would replace the £25 billion to £30 billion of revenue. I would really like to understand that.
This is a thorny issue, because if we scrapped business rates the taxpayer would have to find that huge amount of money by some other means. The right thing to do right now is to see businesses through this very difficult time with the kind of concession that we have made, such as the £13.6 billion, rather than making irresponsible and in my view undeliverable promises to completely scrap business rates.
Sir James Duddridge (Rochford and Southend East) (Con)
Essex Linen Services, which provides laundry services to hospitals and hotels, is struggling to survive because of electricity prices. It believes that its sector has been left out of the energy support packages. Will the Minister agree to review the situation for providers of laundry services and see whether they can be supported in paying their electricity bills in future?
Kevin Hollinrake
All businesses have access to the energy bill relief scheme. There are concerns about which sectors will be covered by the revised scheme. We will have details on that by the end of the year; the Government have committed to that. Clearly we are trying to balance the interests of the taxpayer, who has to fund this, with those of business. It is right that we focus on businesses that cannot mitigate their energy use, by whatever means, or pass on the costs to consumers. My hon. Friend is absolutely right to raise the interests of the sector.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
I grew up in a small family business. Labour is proud to be supporting Small Business Saturday and its 10th anniversary, and to have supported last week’s family business week.
Small and medium-sized enterprises are indeed the lifeblood of our economy, but they have been hit hard by 12 years of Tory failure and staggeringly low growth. Even after three Prime Ministers this year, the Government have no answers—and the House should not just take that from me; the Federation of Small Businesses judged the autumn statement as being
“low on wealth-creation, piling more pressure on the UK’s 5.5 million small businesses”.
If the Government are really serious about helping small businesses to grow, is it not time they adopted Labour’s plan to reform business rates, back our high streets, make Brexit work, and make Britain the best place in which to start and grow a business?
Kevin Hollinrake
As one who was in business in 2010, I remember very well what the economy was like in that year, when we took over from Labour: it was not having a good time. [Interruption.] Yes, it is a lot stronger now.
We should bear in mind that while we can choose our own opinions, we cannot choose our own facts, and the facts are that the UK has experienced the third fastest growth in the G7 since 2010—behind only the United States and Canada—and has grown faster than Germany since 2016. It is right that we seek to provide new solutions for businesses; we have to stimulate the supply side of the economy, not least because that is good not only for businesses but for consumers. However, as I said earlier, simply claiming that you are going to scrap business rates without saying how you are going to replace that £25 billion of revenue is highly irresponsible.
Douglas Chapman (Dunfermline and West Fife) (SNP)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kevin Hollinrake)
I am new to this, Mr Speaker.
My Department works closely with other Government Departments and with firms in all sectors of the economy on a range of issues relating to the labour market and skills. That includes increasing the number of apprentices and business investment in skills development, the adoption of T-levels and skills bootcamps, and ensuring that there is better information along with easier routes into careers in a range of sectors.
Douglas Chapman
Last month I held a business roundtable with the Association of Chartered Certified Accountants. It was clear that SMEs were struggling with recruitment, high energy costs, Brexit, and £20 billion worth of late payments.
When it comes to late payments, the prompt payment code does not cut it for SMEs. Will the Minister work with me to introduce legislation to outlaw late payments once and for all and give our SMEs a fighting chance?
Kevin Hollinrake
I am grateful for the hon. Gentleman’s correspondence on this matter, and I look forward to meeting him on 7 December.
The prompt payment code, which we introduced and which we reviewed recently, will be out for consultation very shortly, and I am keen to learn from best practice how we can make it more effective. The hon. Gentleman is right to say that there are many issues facing businesses today, and we are keen to help them get through the difficulties that will no doubt continue over the next few months, but in my experience of business our best years come after our worst years, and I think we can be confident when looking ahead while also recognising that there will be difficult times in the short term.
Mark Pawsey (Rugby) (Con)
There are many SMEs in the retail and hospital sector. It is a sector that does well in the run-up to Christmas, which gives those businesses the opportunity to make some money. What impact does the Minister think the rail strikes that are planned for next week will have on their ability to recruit more staff?
Kevin Hollinrake
It is, of course, right that we look after the interests of business and consumers. There is no doubt that the strikes will have an impact on both parts of that sector, and it is also right for us to prioritise the needs of all consumers, not just those who are seeking to take industrial action. We urge all parties to get round the negotiating table as quickly as possible and try to reach a sensible agreement.
James Grundy (Leigh) (Con)
The Minister of State, Department for Business, Energy and Industrial Strategy (George Freeman)
As my colleagues have already pointed out, the Government are supporting households and businesses during the winter through a series of measures including the energy price guarantee, which will save the average household £900 this winter, the £400 energy bill support scheme payment, and, for businesses, the energy bill relief scheme, which will provide a price reduction to ensure that all eligible businesses and other non-domestic customers are protected. That is in addition to the £2 billion that the energy-intensive industries have received since 2013.
James Grundy
Over the last six months, several businesses in my constituency have approached me to raise concerns about potential tenfold increases in their energy bills. Can my hon. Friend assure me that the Government will continue to act to ensure that no business will face such shocking increases in reality, either this year or next year?
George Freeman
In a word, yes. All of us in the Business Department are focused on the point that my hon. Friend raises—namely, the pressure on businesses from the energy price spike this winter. In the autumn statement the Chancellor announced the Treasury-led review of our energy bill relief scheme beyond March, and we are actively working as a Department to make sure that that review has all the necessary data and evidence from businesses. Our energy bill relief scheme supporting energy-intensive industries has put in £2 billion of relief since 2013, and our 2022 energy security strategy announced that the EII compensation scheme would be extended for a further three years. We are also looking at making similar changes to the related EII exemption scheme. The Business Department absolutely gets how much difficulty businesses are facing through energy.
Andy McDonald (Middlesbrough) (Lab)
The north-east of England process industry cluster has advised me that major companies on Teesside currently obtaining their energy via a private wire relationship do not qualify for the energy bill relief scheme, with some major employers paying millions more for their energy and facing the real prospect of ceasing operations and moving overseas. Will the Minister meet me to discuss how their concerns can be addressed?
George Freeman
Even better than that, I can make sure that the energy Minister, my right hon. Friend the Member for Beverley and Holderness (Graham Stuart), meets the hon. Gentleman. We are aware of this problem and we are actively working on it.
John Stevenson (Carlisle) (Con)
The Minister of State, Department for Business, Energy and Industrial Strategy (George Freeman)
As the Department for science, research and innovation, with the historic uplift in public R&D announced in the comprehensive spending review 2021 and the autumn statement 2022, and the Department for net zero, BEIS secured the highest increase in capital budgets at the last spending review, growing at 8.3% per annum over the spending review period.
John Stevenson
As we know, capital expenditure spent effectively drives economic growth. To this end, would the Minister agree that capital projects such as those in my constituency that will clearly help economic growth and can start in the next 12 months will be prioritised, and that additional support will be given where they have shortfalls due to rising costs?
George Freeman
My hon. Friend has put his powerful point on record. I can assure him that the Department is actively working with the Treasury to make sure that those sorts of schemes are accelerated.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Is it still in the Department’s plans to take a 20% shareholding in Sizewell C? If so, will that result in a capital spend of £6 billion or £7 billion—money that could be better spent elsewhere? Private investment could be freed up in the Scottish cluster if it was made a track 1 cluster and pumped storage hydro could be helped by agreeing a pricing mechanism for electricity.
George Freeman
Unlike the Scottish nationalists, we are committed to the private-public partnership that drives investment in our nuclear industry, and Sizewell C is a major commitment. The Government are proud to be partnering with industry, and it is a shame that the Scottish nationalists are not similarly partnering with industry for the benefit of Scots voters and bill payers.
John Penrose (Weston-super-Mare) (Con)
The Minister for Climate (Graham Stuart)
The Government have announced changes to the energy price guarantee from April 2023, as well as additional support for pensioners and those on benefits. The Government will work with consumer groups and industry to consider the best approach to consumer protection from April 2024 as part of wider retail market reforms.
John Penrose
Does the Minister agree that while subsidies are necessary short-term sticking plasters, investors will not commit the multi-billion pound investments that the energy sector needs to upgrade and modernise energy storage, generation and transmission unless the long-term rules are clear? Will he therefore update the Energy Bill to lay out a sustainable long-term future with investable deadlines and milestones to transition from today’s highly distorted, politicised and bureaucratic sector to a cheaper, simpler, better-value industry with much lower political and regulatory risks?
Graham Stuart
I am proud that this Government have led the way, with contracts for difference driving renewables such as offshore wind by driving down costs. I am also delighted that we have the legislative vehicle to deliver the necessary changes, and the Energy Security Bill will be taken forward in this Parliament to transform our energy industry by turbocharging carbon capture, utilisation and storage and our hydrogen industries in pioneering projects from the Humber to the Mersey, and beyond. The Bill will encourage competition in the energy sector, creating opportunity, prosperity and security with clean jobs, new skills and, as my hon. Friend rightly highlights, cheaper bills.
Sammy Wilson (East Antrim) (DUP)
The Minister talks about long-term energy support. Will he bear in mind that, despite the promises made here today that everyone in the United Kingdom is already benefiting from short-term support, not one penny has been allocated to consumers in Northern Ireland, even though the electricity companies are ready and the utility regular has told him that the ground has been set. When will payments be made to people in Northern Ireland? We are looking not for promises tomorrow but for payments today.
Graham Stuart
The energy price guarantee is benefiting Northern Ireland consumers today, along with pensioners and vulnerable families—they are all being helped. Of course, energy policy is devolved to Northern Ireland, and we have had to step in because of the lack of an Executive. We are working very hard. I held a roundtable with energy suppliers only last week, and another one was held yesterday. We are doing everything within our power to find the right route, while protecting public money in the proper fashion, to get money out to Northern Ireland consumers this winter. We are doing everything for our part, and I hope the right hon. Gentleman will support me in urging others to do the same.
Andrew Bridgen (North West Leicestershire) (Con)
The Secretary of State for Business, Energy and Industrial Strategy (Grant Shapps)
With Sizewell C, we are securing a cheap, clean and reliable supply of energy to supercharge growth—I will provide more details in my oral statement. We have recommitted to increasing public investment in research and development to £20 billion each year by 2024-25, which will supercharge science and innovation, and we are supporting local enterprises and increasing the national living wage by almost 10%, the largest ever cash-terms increase.
Andrew Bridgen
As well as renewables, it is clear that we need to add more baseload capacity, and nuclear is the favourite for that. Hundreds of my constituents work at Rolls-Royce, and many of them work on the development of small modular nuclear reactors. Will my right hon. Friend outline what support the Government are giving to Rolls-Royce to develop this technology, which will not only add to the UK’s energy security but deliver a technology that we will be able to export successfully around the globe?
Grant Shapps
Like my hon. Friend, I am very keen on small nuclear reactors as part of the solution. We will be launching Great British Nuclear early next year to assist both Rolls-Royce and its competitors. There are other brands out there, all of which have interesting ideas about modular production of nuclear power, which will provide sustainable energy even when the wind is not blowing and the sun is not shining.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
I welcome the Business Secretary to his first oral questions. He is the third Business Secretary we have had this year, and I have to say that lack of stability is the No. 1 complaint from businesses, which genuinely cannot keep track of Government policy in any particular area. If they do know the policy, they feel it could change at any moment if the internal politics of the Conservative party shift one way or the other. Does he accept that political instability has very real consequences for economic stability?
Grant Shapps
I very much welcome the hon. Gentleman’s welcome, I hope to be in post for a long time, not to disappoint him in any way. His talk about the instability of policy is a bit rich, as many Labour Members sat on the Front Bench under their previous leader, who believed in a whole bunch of different things. Even the shadow Secretary of State for Climate Change and Net Zero, the right hon. Member for Doncaster North (Edward Miliband), once said it is impossible for this country to get to 40% renewable energy—he called it “pie in the sky.” Right now we are producing 43.1% of our energy from renewables. That is from a party that is consistent.
Jonathan Reynolds
Respectfully, I think the Business Secretary needs to focus a little bit more on his own side and the humility required to do that.
On a more positive note, this Saturday is small business Saturday. A future Labour Government will tackle the issue of late payments to small and medium-sized enterprises by making audit committees report on public companies’ payment practices. With more than £20 million waiting to be paid at any one time, this is a change that will make a real difference and one that is backed by the Federation of Small Businesses. We could, however, implement it sooner by amending the draft audit reform Bill when it comes forward. Would the Secretary of State support that change?
Grant Shapps
I agree that payment for small businesses is very important, particularly when it is not done by larger companies that have the resources. That is one of the reasons why the Government have led the way to make sure that, when small businesses deal with Government, payments are made quickly and efficiently. The Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) is looking at a whole range of different things to ensure that we speed up the culture of late payments to small businesses, and he will be saying more about that very shortly.
Elliot Colburn (Carshalton and Wallington) (Con)
Grant Shapps
My hon. Friend is absolutely right. Labour Members talk about helping businesses, but that is what you get with a Labour Mayor in London, bashing businesses. I would be proud to meet my hon. Friend.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
We do not know where the half a billion pounds announced last week to cover Horizon uncertainty is coming from, as the Science Minister refuses to answer my questions, but we do know that British scientists are still having to choose between the country they love and the funding they need. British science, British businesses and British jobs are at risk while the Government play a blame game, instead of keeping their manifesto promise to associate with the world’s biggest science fund. Will the Science Minister admit that no science fund can have the efficiency, effectiveness, influence, prestige or range of Horizon, and that he has let British science down?
The Minister of State, Department for Business, Energy and Industrial Strategy (George Freeman)
In a word, no. I will tell the hon. Lady exactly where the £484 million that we announced last Monday—I think the Opposition supported it—is coming from. It is coming from Her Majesty’s Treasury to support universities, researchers and companies in this country that have been affected by—and this is the second point—the European Union’s block on our negotiated membership of Horizon, Copernicus and Euratom. I was in Paris last week negotiating. We are still actively pushing to be in Horizon, Copernicus and Euratom, but we have made provision, and early in the new year Members will start to see that we will be rolling out additional support for fellowships, innovation and global partnerships. If UK scientists cannot play in the European cup, we will play in the world cup of science.
Gareth Johnson (Dartford) (Con)
Grant Shapps
That is absolutely right. Voters will have their say. I say no taxation without representation.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
The Minister for Climate (Graham Stuart)
We consider all those that have left the energy charter treaty, but we have so far supported its modernisation. We keep that under advisement.
Greg Smith (Buckingham) (Con)
Grant Shapps
I do enthusiastically support our SAF—sustainable aviation fuel—industry. Actually, it is a little known fact that last year at COP26 we sent more than 500 aircraft home with sustainable aviation fuel in their tanks, and this country has set a more ambitious target for sustainable aviation fuel than elsewhere, with 10% by 2030.
Sir Stephen Timms (East Ham) (Lab)
The Groceries Code Adjudicator has done a good job over the past 10 years, leading to a big fall in the number of breaches of the fair purchasing code, but bad practice is still rife in the fashion industry, with UK fashion retailers among the worst offenders. The Environmental Audit Committee called for a garment trade adjudicator. Will Ministers bring that proposal forward?
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kevin Hollinrake)
I thank the right hon. Member for all his work in this area; I know that he has done an awful lot. We have no plans to bring forward a garment code adjudicator, but we do take reports of illegal and unsafe employment practices very seriously. Since October 2020, a wide group of stakeholders, comprising retailers, manufacturers and non-profit organisations have been working with the Gangmasters and Labour Abuse Authority to address poor practice and working conditions.
Virginia Crosbie (Ynys Môn) (Con)
Grant Shapps
I can confirm that that is the intention with Great British Nuclear. I know that areas such as Wylfa Newydd—if I am pronouncing it correctly—in my hon. Friend’s constituency could well be in line to benefit. However, as she can tell from my Welsh pronunciation, I suspect that I will be on the English side tonight.
Mr Virendra Sharma (Ealing, Southall) (Lab)
Yesterday, I hosted a roundtable meeting for businesses in my constituency. They were worried about late payments and a Government who are not helping them. Fifty thousand businesses close every year due to late payments, and small businesses account for two thirds of UK private sector employment. Will this Government act before the worst of the Tory-led recession bites to save millions of jobs?
Kevin Hollinrake
I thank the hon. Member for his question. He is absolutely right to bring up this matter. It is one of the concerns that has been raised most frequently with me since taking on this role. We are tackling the culture of late payments with measures including the Payment Practices Reporting, the Small Business Commissioner and the Prompt Payment Code, but I am determined to see how much further we can go to be effective in this area.
David Simmonds (Ruislip, Northwood and Pinner) (Con)
Kevin Hollinrake
It is great to hear that my hon. Friend’s constituent is looking to export right across the world, and we are determined to make it easier to do so through trade deals outside the European Union. Ministers and officials from across BEIS regularly engage with SMEs on a wide range of issues and will continue to do so as the retained EU law programme proceeds.
John Cryer (Leyton and Wanstead) (Lab)
Further to the question from my hon. Friend the Member for Sefton Central (Bill Esterson), when will Ministers start to use procurement in order to generate and defend British jobs? I have been listening for years to Ministers coming to that Dispatch Box saying that they will use procurement, so when will we actually see it?
Kevin Hollinrake
That is a very important point. The Government are determined to tackle not just their own procurement practices, but those further afield. Clearly, we want to keep our markets open to international competition, because we want to compete internationally as well, but there also needs to be fair competition. Where we can prioritise the needs of British companies and British workers, we should do so.
Gary Sambrook (Birmingham, Northfield) (Con)
Kevin Hollinrake
I am grateful to my hon. Friend for standing up for his constituency businesses; I hope he is supporting Small Business Saturday this weekend, as I am sure hon. Members across the House will be. It is absolutely right that we are supporting businesses through these difficult times with the energy bill relief scheme and the £13.6 billion of rates support that they will see over the next five years, but we will continue to look at the needs of business to ensure that we have the right measures in place.
Caroline Lucas (Brighton, Pavilion) (Green)
The Rosebank oilfield would produce more than 200 million tonnes of CO2 when burned, which is equivalent to running 58 coal-fired power stations for a year and more than the combined annual emissions of 28 low-income countries. How does that make any sense in a world where heating needs to be constrained to below 1.5°?
Graham Stuart
Our use of oil and gas in this country is falling as part of our pathway to net zero. It is usage that drives the burning of oil and gas, and it is on the downward pathway. Producing our own oil and gas when we will be burning it on our net zero pathway domestically is sensible. It is good for Scottish jobs—although sadly opposed by the Scottish nationalists—it is good for the British economy and it is entirely net zero compliant. That is why we will continue to manage the mature and declining basin that is the North sea.
Henry Smith (Crawley) (Con)
Grant Shapps
My hon. Friend will be reassured to know that I did know that he would have a topical question, and the answer to it is yes.
Feryal Clark (Enfield North) (Lab)
Recently, a Premier Inn hotel in my constituency threw out one of their visually impaired guests, Ms Angharad Paget-Jones, and her guide dog Tudor in the middle of the night because they refused to believe, despite being shown identification, that Tudor was a guide dog. Can the Minister tell me what action his Department is taking not only to ensure that businesses are complying with the Equality Act 2010, but to go after those who show frank disregard for it in practice?
Kevin Hollinrake
That is a very disturbing case, and I am happy to help the hon. Lady with it. I know that the guide dog campaigning organisations have this issue in their sights as something we need to address. I would be grateful if she wrote to me with the specific instance and I will be happy to deal with it for her.
David Duguid (Banff and Buchan) (Con)
I welcome the Government’s recent doubling of the alternative fuel payment and yesterday’s written communication from the Minister confirming that the majority of households eligible for those payments will receive their £200 automatically as a credit on their electricity bill. Can he reassure constituents in Banff and Buchan who are dependent on heating oil in particular that those payments will indeed be made as soon as practically possible?
Graham Stuart
I can give my hon. Friend and his constituents that assurance.
Alex Cunningham (Stockton North) (Lab)
A few months ago, CF Fertilisers in Billingham ceased ammonia production there because of the high gas price. Now Mitsubishi, just a few hundred yards along the road, is consulting on the closure of one of its plants, with the loss of hundreds of direct and contractor jobs, for the same reason. Is the Minister aware of that latest blow to Teesside, and what is he doing to help firms such as Mitsubishi?
Grant Shapps
I was up in Teesside the week before last, and I have been keeping in close contact with what is happening there. The good news is that there are new jobs coming about in new industries, including new industries supplying electric battery manufacturing, which are available because this country is outside the European Union and able to produce new rules that will allow things such as green lithium to thrive here and provide up to 8% of Europe’s entire needs. New jobs are coming to Teesside.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
As my right hon. Friend will know, maths and higher maths is often the foundation skill upon which other innovative technologies are built. Can he therefore tell the House what steps his Department is taking both to fund higher maths and to give people the skills they need in maths to help us to reinforce our status as a global science power?
The Minister of State, Department for Business, Energy and Industrial Strategy (George Freeman)
My hon. Friend makes an important point: maths is one of the underpinning disciplines of all our science and technology leadership. That is why we have increased funding through UK Research and Innovation for core maths, and I am delighted to confirm that we are looking at various ways in which we might be able to turbocharge our international fellowships in maths as well.
Stephen Farry (North Down) (Alliance)
Households in Great Britain have had access to the £400 energy support payments since 1 October, but households in Northern Ireland have not had any substantial support whatsoever. The energy price guarantee does not really work in Northern Ireland, because 70% of households there use oil. Can the Government give the people of Northern Ireland a firm date by which the £400 payments will be made available?
Graham Stuart
As I said in an earlier answer, we are doing everything we can, working through suppliers, to ensure that the money reaches Northern Ireland consumers. The hon. Gentleman will be pleased to know that every single Northern Ireland household is receiving the alternative fuel payment, in addition to the energy bills support scheme. We are looking to make sure not only that that money gets out and is credited to households, but that they are able to access it this winter. There is no point having it as a credit on an electricity bill, as that does not help them deal with other costs this winter. That is the sticking point; that is what we are working on.
Matt Warman (Boston and Skegness) (Con)
The proposed takeover of Activision by Microsoft has the potential to have a profound impact on many of Britain’s brilliant video games industry manufacturers and makers. Although I know that the Secretary of State will not want to comment on the specifics of that case, can he reassure me that the Competition and Markets Authority has all the resources it needs to come to the right conclusion and to do so as thoroughly and rapidly as possible on this important matter?
Kevin Hollinrake
My hon. Friend is right to raise that question. I know that the CMA has received a large number of submissions, and some very large submissions as well. I think it has until 1 March next year to complete its phase 2 inquiry. We absolutely believe that it has the right resources to do that, and we will make sure that it has over the coming months.
Anti-lockdown Protest in Shanghai: Arrest and Assault of Edward Lawrence
(2 years ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Mr Speaker
We come now to the urgent question. I believe this is the first time Jim Shannon has had one.
Jim Shannon (Strangford) (DUP)
(Urgent Question): To ask the Secretary of State for Foreign, Commonwealth and Development Affairs if he will make a statement on the arrest and assault of Edward Lawrence by Chinese authorities while covering an anti-lockdown protest in Shanghai.
Thank you, Mr Speaker, for giving me the opportunity. It has been 12 years of waiting—patience is a virtue.
The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (David Rutley)
I find it hard to believe, given his powers of persuasion, that this is the hon. Gentleman’s first urgent question. He is an ever present ray of sunshine in Parliament, and we love him for it.
As the Foreign Secretary made clear yesterday, the arrest of a BBC journalist while covering the recent protests in Shanghai is a deeply disturbing and wholly unacceptable situation. Journalists must be able to do their job without fear of arrest of intimidation. The BBC has stated that the journalist was beaten and kicked by the police during his arrest, and was held for several hours before being released. In response, we are calling in the Chinese ambassador to make clear the unacceptable and unwarranted nature of those actions and the importance of freedom of speech, and to demand a full explanation. We have also been in close touch with the journalist and the BBC throughout to gather the facts and provide consular support.
We recognise that the covid-related restrictions in China are challenging for the Chinese people. We urge the Chinese authorities to respect the rights of those who decide to express their views about the situation. Moreover, as the Prime Minister made clear yesterday in his Mansion House speech, the media—and, for that matter, our parliamentarians—must be able to highlight issues without fear of sanction or intimidation, whether in calling out human rights violations in Xinjiang and the curtailment of freedom in Hong Kong, or in reporting on the recent protests.
This, of course, follows the recent incident in Manchester. As we have previously made clear to the House, the apparent behaviour of staff at the Chinese consulate general was wholly unacceptable. In view of the gravity of that incident, we summoned the Chinese chargé d’affaires on 18 October and delivered a clear message through our ambassador in Beijing. There is now an ongoing investigation and it would be wrong to pre-empt the findings.
More broadly, we recognise that China poses a systemic challenge to our values and interests, which, again, the Prime Minister highlighted yesterday. That challenge grows more acute as China moves towards greater authoritarianism. That is why we are taking robust action to protect our interests and stand up for our values. That includes imposing sanctions, leading action at the UN and strengthening our supply chain resilience. Let me assure Members that, as part of our frank relationship with China, we will continue to raise our human rights concerns at the highest levels.
Jim Shannon
I thank the Minister for having a certain firmness in his response, which is what we wish to hear. I welcome the news that the Chinese ambassador has been summoned by the FCDO to account for this arrest. I encourage the Minister to share—hopefully he can—all the justifications that will be given at that meeting. The reason given to the BBC by the Chinese authorities was that they had arrested Edward Lawrence for his own good in case he caught covid from the crowd. Wow, what a pathetic answer! My goodness. Such was their concern for him, a senior journalist in the BBC and a British citizen, that the Chinese police beat him and kicked him as he tried to lawfully cover a peaceful protest in Shanghai. He had all the necessary permits and licences, and is a veteran reporter in China.
The first question we need to ask is: what assessment has the FCDO Minister made of the safety of British journalists in China following this assault? It is important to remember that the arrest and assault of Edward Lawrence is not the first attack on freedom of speech, but just another example in a long line of journalists and human rights defenders who have been silenced, arrested or simply disappeared by the Chinese Communist party. This is the sixth urgent question granted in this parliamentary term on human rights abuses by the Chinese Communist party. We have seen the CCP establishing incognito police stations in the UK, the assault of Bob Chan outside the Chinese consulate in Manchester, the Xinjiang police files highlighting horrendous crimes against the Uyghurs, and the arrest of pro-democracy activists in Hong Kong. This is unprecedented and needs urgent action.
This incident is part of a clear pattern of behaviour of increased crackdowns and restrictions on Chinese people within China and on British soil in the run-up to, and following, the 20th national congress of the Chinese Communist party last month. Last night at the Lord Mayor’s banquet, the Prime Minister gave a speech stating that the “golden era” of China-UK relations was over. I welcome the Prime Minister’s commitment, which is worthy of saying. The director general of MI5 said that China represents
“the biggest long-term threat to Britain and the world’s economic and national security”.
Clearly, tougher action is needed to protect British citizens, human rights defenders, pro-democracy activists, and religious and ethnic minorities targeted by the CCP.
David Rutley
As always, my friend the hon. Gentleman raises important points, and he can be assured that when the Chinese ambassador is called in to the FCDO, they will be raised, particularly the immediate point about the arrest, its unacceptable manner and the justification, which as he highlighted is incredibly thin. In that meeting, we will also raise the wider point he has mentioned about the safety of journalists. He raises a number of other important points, including about Chinese police stations. As the Minister for Security, my right hon. Friend the Member for Tonbridge and Malling (Tom Tugendhat), made clear in his statement to the House on 1 November, reports of undeclared police stations in the United Kingdom are extremely concerning and will be taken seriously. The Home Office is reviewing our approach to transnational repression, and the Minister for Security has committed to providing an update on that work to the House in due course. The hon. Gentleman rightly says that there are wider concerns about the increasing authoritarianism and muscular foreign policy of the Chinese, and the Prime Minister rightly set out a new era of robust pragmatism, which we have seen grow over recent years, but which was clearly articulated by the Prime Minister yesterday.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
May I congratulate our friend the hon. Member for Strangford (Jim Shannon) on successfully securing this urgent question? He raises a series of very important points. We all absolutely and rightly condemn the brutal treatment yesterday of Ed Lawrence, the BBC cameraman, that saw him dragged away and beaten. I have seen a text from him to a colleague saying that he was beaten hard during the course of his detention.
With all the other issues that have been raised—the chasing and incarceration of journalists in Hong Kong, the crackdowns and genocide on the Uyghur—there is now an endless litany of China’s bad behaviour, so I simply ask my hon. Friend the Minister this. How is it that yesterday the Prime Minister, who previously said that China posed a “systemic threat”, has now moved to saying it poses “a systemic challenge”, and that our strongest policy statement now, in terms of our reputation and relationship with China, is that we are going to be “robustly pragmatic”? Can he please explain to me how “robustly pragmatic” will worry the Chinese any one bit?
David Rutley
I thank my right hon. Friend for his comments. He is a long-standing campaigner on these issues, and I listen keenly to what he says, as does the Foreign Secretary. What the Prime Minister set out yesterday was a co-ordinated and coherent approach in which we do more to adapt to China’s growing impact. As he knows, we will revise and update the integrated review, which will help us to invest in our alliances and in the serious capabilities that we need to counter the actions that we see in China’s foreign policy.
Catherine West (Hornsey and Wood Green) (Lab)
I congratulate the hon. Member for Strangford (Jim Shannon) on securing his first urgent question in the House—who would have known that it was the first?
I turn to the serious matter of the arrest and detention of journalists, which is deeply shocking and, in this particular case, concerns our own BBC. Sadly, this is the approach and tone that we have come to expect from an increasingly authoritarian Chinese regime. That has been further demonstrated this week by the case in Hong Kong of the independent media outlet, Apple Daily, whose founder, Jimmy Lai, faces court cases in Hong King on basic freedom of expression for local people. We must show solidarity in that terrible situation, not just in Hong Kong but across the People’s Republic of China.
I welcome the fact that the Foreign Secretary has summoned the Chinese ambassador, as well as the consular support that has been provided for Mr Lawrence. The robust response is a welcome change to the Government’s previous handling of Chinese overreach in Manchester, which the House thought did not match the severity of the violence outside the Chinese consulate. Our support for the work of the press must be unified, and we stand squarely behind the Government in making it clear to Chinese officials that their treatment of journalists doing their job is not and never will be acceptable. The Opposition have made it clear that the BBC must be protected in its crucial work abroad, tackling disinformation and providing reliable, accurate reporting—I am sure the Minister agrees with that.
I have one question for the Minister. We are in the middle of profound cuts to the BBC World Service, including of Chinese journalists. Will the Foreign, Commonwealth and Development Office say on the record today that it will not defund Mandarin-speaking journalists, because, particularly in covid lockdown, it is crucial that individuals can listen to good journalism on our BBC World Service?
David Rutley
I thank the hon. Member for her considered and important words. Of course, with the calling in of the ambassador, we will raise those matters, and to hear them raised across the House helps to add strength to what we are going to say, so we are grateful for that.
The hon. Member made an important point about protecting journalists across the board, and I will raise that with my right hon. Friend the Foreign Secretary and with the Minister of State, Foreign, Commonwealth and Development Office, my right hon. Friend the Member for Berwick-upon-Tweed (Anne-Marie Trevelyan), who is responsible for the Indo-Pacific and is currently travelling.
The hon. Member made some important points about Manchester, and I assure her that we do not have any intention of giving the Chinese Government any excuse to make this a political issue. It is about law, and we will see it through.
The hon. Member made points about the BBC World Service. There is a move to a digital platform, and we have set out our funding plans with the World Service. I will meet it shortly on the wider points that she made.
Tim Loughton (East Worthing and Shoreham) (Con)
Another day, another blatant abuse of human rights by the Chinese communist Government. Who but that Government would think that arresting, cuffing, kicking and beating a journalist could be construed as for his own good?
We have had an awful lot of calling in the Chinese ambassador. If robust pragmatism is to mean anything, should there not be clear consequences? We have still not expelled the Manchester consulate general, and there should be sanctions against Chinese officials who are waging seriously cruel oppression on brave protesters who are simply trying to stand up for their rights in China and against the oppressive lockdown, which resulted in the deaths of over 100 people in a fire in Wuhan last week. When are we going to get serious about China?
David Rutley
My hon. Friend makes a good point: the case against the BBC journalist was thin to say the least, and we will raise that with the ambassador today. He raises an important point about Manchester, about which an investigation is ongoing. Unlike the Chinese, we will see that process through before we take action—and we will. On his broader point about the action that we will take, we have put sanctions in place in relation to the atrocities in Xinjiang, so action is being taken. We are also refreshing our integrated review, which will help us to create the framework in which further action can be taken as appropriate.
Alyn Smith (Stirling) (SNP)
I warmly congratulate the hon. Member for Strangford (Jim Shannon) on securing this urgent question and I thank you, Mr Speaker, for granting it. It is important for the House to take account of the issue. Journalists deserve a special status anywhere: they tell the truth, they shed a light and they do a public service. They need support, so we express our support for Edward Lawrence. I am glad to hear that the ambassador will be summoned to the FCDO, but, frankly, I would like to hear about more consequences. Bluntly, the Manchester investigation also seems to be taking longer than it needs to; I think the House would support consequences on that.
There is a wider issue at play. I am deeply concerned about the pressure that is building within China. The Communist party has boxed itself into a zero covid strategy that has been coupled with a terrifyingly low vaccine uptake, particularly among the elderly. That huge pressure could tend towards greater authoritarianism and a more violent crackdown. What assessment has the FCDO made of the risk to UK nationals in China? Does the advice need to change? On a humanitarian level, is there scope for assisting the Chinese state, for all its faults, with a catch-up vaccine roll-out? That might go some way to alleviating the humanitarian pressure that could tend towards worse consequences for the people of China.
David Rutley
As I have highlighted, consequences have been put in train in relation to other situations, particularly in Xinjiang, and we will be having a robust conversation with the ambassador today. The hon. Member talks about Manchester; I have already highlighted that we are awaiting the details of the police investigation. It is absolutely right that we get that done properly so that we can then take informed action, which was clearly not the case with what happened to our BBC journalist.
On what is happening more broadly with the Chinese Government and their approach to covid, that is for them to decide. We have scientific co-operation and, if and when appropriate, that dialogue can take place. Ultimately, they need to make a decision about how they tackle covid within their borders.
Mr Jacob Rees-Mogg (North East Somerset) (Con)
May I add my congratulations to the hon. Member for Strangford (Jim Shannon) on securing this crucial urgent question?
The Government must always do all they can to protect the safety of His Majesty’s subjects abroad; that is a fundamental duty. I wonder what effect calling in the ambassador will have and whether more does not need to be done urgently that actually has an effect on the Chinese operation in the UK. Should we not be looking to expel diplomats; to take tougher actions in international forums where Chinese interests are at stake; or to do things that the Chinese would not want us to do, such as improving our relationship with Taiwan or inviting the Dalai Lama on a formal visit by the British Government to show that we are not a pushover and will not support the communist running dogs?
David Rutley
At the calling in today, those issues will be raised in a robust manner. Of course, the safety of our citizens is absolutely key across the world and in China, so we will raise those issues. In terms of providing a robust, muscular approach, as we have seen, given the concerns that have been raised in the House about Uyghur minorities, sanctions and trade guidelines have been put in place. We will continue to take the appropriate action to counter what we believe are incorrect practices.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Last night, the Prime Minister said that our relationship with China would be characterised by “robust pragmatism”. I have no idea what that means, and nor, I expect, do tech start-ups trying to decide about Chinese investment; universities looking at Chinese funding; journalists trying to decide how to cover Chinese stories; businesses looking at their supply chains and market strategies; and Chinese activists risking their lives. Is it not time that we had the long-promised China strategy, not just another hollow slogan?
David Rutley
As I said in answer to a previous question, we will be updating the integrated review to ensure that we continue to invest in our alliances and the capabilities that we need. We have not committed to publish a separate China strategy, but we will continue to maintain as much transparency as possible and keep Parliament updated on our approach to China. The integrated review will be the main focus for that.
Dr Julian Lewis (New Forest East) (Con)
This disgraceful episode reminds us of the importance of the BBC’s work in China. About a decade ago, ringfenced funding was stopped for the BBC World Service and BBC Monitoring. Some ringfenced funding has now been restored for the World Service but not, as far as I know, for Monitoring. Will the Government undertake to look at that matter? The degree of investment in such services should not be competing with commercial BBC considerations.
David Rutley
My right hon. Friend makes an important point. I have already highlighted that a broader strategy is taking place with the World Service, but I will follow up about Monitoring and get back to him in more detail.
Ms Marie Rimmer (St Helens South and Whiston) (Lab)
The Chinese people are living with this authoritarian rule and they are taking immensely brave actions in protesting against it. We all remember—they will remember better than we do—Tiananmen Square and the way that the Government cracked down on that protest. There is a serious threat and a serious challenge, and now we have “robust pragmatism”—I am trembling at those words. Words mean nothing; action is desperately needed. Manchester is less than 20 miles from where I live, so this is on our doorsteps. We must take action now and start sanctioning to let the Chinese Government know that we are taking them seriously. They are laughing up their sleeves at us in this state.
David Rutley
The hon. Member makes an important point about the protests that are taking place and we urge the Chinese authorities to respect those who decide to express their views about the current situation. The freedom to protest must be respected. She also makes an important point about Manchester, which is not far from my constituency either. We have these concerns, but we need to go through due process. We have taken steps on sanctions in response to the situation of the Uyghurs and the integrated review will set out a wider strategy.
Vicky Ford (Chelmsford) (Con)
The violent, aggressive crackdown against journalists and protesters is yet another completely unacceptable act by the Chinese Communist party. I have seen at first hand how UK Ministers and our brave diplomats are prepared to stand up against autocratic bullies across the world; often, we are one of the few countries that will do that. When it comes to robustness, I urge my hon. Friend to continue to ensure that the UK is a leader in standing on the side of freedom, especially freedom of speech.
David Rutley
That is something that we take great pride in and is fundamental to our values and those of many other countries. We need to speak up for those values. I pay tribute to my right hon. Friend for her incredible work at the FCDO in making the case and highlighting the robust action that we take and will continue to take.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
What happened to Edward Lawrence was not a one-off or isolated incident. It is part of a deliberate strategy to ensure that reporters in China do not tell the rest of the world what is going on there. This week, the other place will debate the Report stage of the Procurement Bill and will consider an amendment in the name of Lords Alton, Blencathra, Coaker and Fox. It would require the Government to set out a timetable
“for the removal of physical technology or surveillance equipment from the Government’s procurement supply chain”
where there is evidence that the supplier has been engaged or involved in modern slavery, genocide or crimes against humanity. Is the Government’s policy now sufficiently robust to accept the noble Lords’ amendment, or does the Minister think that pragmatism will lead them to vote against it?
David Rutley
I am not aware of that amendment, but I am sure the relevant Ministers will listen to what the right hon. Member has said. I would highlight that action is being taken, however. On 24 November the Government announced that companies subject to the national intelligence law of the People’s Republic of China should not be able to supply surveillance systems to sensitive Government sites. Actions are being taken, and I will get back to the right hon. Member on the particular amendment he talks about.
Jason McCartney (Colne Valley) (Con)
The Chinese Communist party’s attacks on freedom of speech and democratic institutions abroad show that its domestic authoritarianism is now spreading overseas. Following recent revelations about overseas police stations, attacks on the free press, and now crackdowns on peaceful protestors, what steps are the Government taking to stand against totalitarianism and for British values of democracy and freedom of speech at home as well as abroad?
David Rutley
I have just returned from my first ministerial visit to Latin America—Colombia and Panama—and it is very clear that our amazing civil servants and diplomats speak up, actively call out any authoritarian activity and speak true to our values. We will continue to do that, including this afternoon when the Chinese ambassador is called in.
Sammy Wilson (East Antrim) (DUP)
I congratulate my hon. Friend the Member for Strangford (Jim Shannon) on obtaining this urgent question, but I must warn you, Mr Speaker, that I think you have set him on a new trend. He was always concerned as to why he was the last person to be called in questions, but now he has found a method to be called first, so just beware, Mr Speaker, because I think you are going to get a tsunami of requests from him.
Is the Minister not concerned that increasingly autocratic regimes seem to think they can kill our citizens, attack people on our own territory, tear up agreements made with us, and affect our vital interests by their behaviour? Does he not have some concern that the message being sent out by the Prime Minister that we will be pragmatically robust—whatever that means—will not scare the Chinese and will not stop them doing what they are doing at present? Given the vital interests we have in the China sea, where China is expanding, and in Taiwan, where China is increasingly aggressive, and given the stranglehold China is seeking on resources across the world through colonialism, the pragmatic—
Mr Speaker
Mr Wilson, I granted the UQ to Mr Shannon, not you. I call the Minister.
David Rutley
It is indeed a team effort; we have seen our colleagues work together on these issues before, but it is good to be able to respond to both of them. The points the right hon. Member for East Antrim (Sammy Wilson) makes are important and we are updating the integrated review and our broader strategy. We are very committed to investing in the alliances and capabilities we need to counter the growing threats and challenges the right hon. Gentleman highlighted in his important contribution—even if it was a bit long.
Rob Butler (Aylesbury) (Con)
I spent much of my early career working as a presenter on BBC World Service TV news. Its correspondents and crews then as now put themselves at risk in order to tell the truth to the world, and we owe them all a debt of gratitude. Can my hon. Friend assure the House that he will be extremely firm and robust in future conversations with China, and indeed with other countries, in insisting that protecting journalists’ rights to report freely is absolutely non-negotiable?
David Rutley
My hon. Friend makes his point with real conviction and experience. We are grateful for his work and owe a debt of gratitude to the reporters who do invaluable work. He can be assured that we will make that point today to the Chinese ambassador.
Henry Smith (Crawley) (Con)
Whether it is Chinese Communist officials beating up pro-democracy protestors on the streets of Manchester or Chinese authorities arresting British journalists on the streets of Shanghai, it is deeply worrying and sinister that the so-called Chinese Communist police stations overseas, including in this country, are even a factor that is occurring. May I through my hon. Friend encourage the Minister for Security to come back to this House as soon as practically possible for an update on what actions the British Government will be taking to close down such agents of the Chinese Communist party acting here in British cities?
David Rutley
That is an important point and was well made. As I highlighted earlier, the Minister for Security has committed to coming back to update the House, and the Home Office is reviewing our approach to transnational oppression and will provide an update in due course.
Energy Security
(2 years ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Secretary of State for Business, Energy and Industrial Strategy (Grant Shapps)
With permission, Mr Speaker, I will make a statement on energy security.
Over half the gas we use in this country is imported. A third of all our energy comes from other countries. Each click of the thermostat and every flick of the kettle sends our money abroad. We are lucky that we have access to secure supplies and strong alliances, but while the price of energy is dictated by the whims of international energy markets, it will be hard to release ourselves from the grip of high bills ushered in by Putin’s brutal invasion of Ukraine.
The solution is energy sovereignty. We have the ability to generate our own energy here in the UK. We need only look at our renewables to know we are already doing this rather well, but it is time for us to do more: to bring energy home; to clean it up; to reduce our reliance on dirty, expensive fossil fuels; and to create a thriving, secure and affordable energy network. We will use the might of our many brilliant engineers, experts and innovators to build a system fit for the future.
As I mentioned in questions earlier, yesterday I was in Suffolk where, thanks to Government investment, the development of the Sizewell C nuclear plant has been given the green light. It will generate not only cleaner, cheaper, low-carbon electricity for the equivalent of 6 million homes, but 10,000 jobs during construction and thousands more in the supply chain. This is the first direct stake a Government have taken in a nuclear project since 1987, and it is the first step on the ladder to long-term energy independence. This has been long awaited, and to boost the nuclear industry further we will work fast to scope and set up Great British Nuclear. With GBN we are aiming to build a pipeline of new nuclear projects beyond Sizewell C where they offer clear value for money, and we will make announcements on this early in the new year.
It is not just nuclear of course: in order to strengthen our energy sovereignty we must look to our natural resources. This island is, as students of Shakespeare will know, a “fortress built by Nature”, and we are utilising that which nature has bestowed upon us—the howling winds of our coastlines, the crashing waves of our sea, and the radiant sun across our land—to create green, clean, cheap energy at home for us.
Those industries are booming, providing jobs and growth up and down the country. In fact, earlier this month, the country hit a truly historic moment, when our onshore and offshore wind farms provided more than half the UK’s electricity. Furthermore, the National Grid reported that on that day all our renewable energy combined provided 70% of the country’s overall electricity needs. However, we need low-carbon back-up for those days when the wind is not blowing and the sun is dimmed, which is why I have put the Energy Bill back on track. It will fire up our nascent hydrogen and carbon capture industries by providing new business models and liberating private investment. The Bill will hammer into place the high-tech solutions we need to produce our own energy.
Even after record Government support for household and business bills, the British people need us to take bold action, and the war in Ukraine, combined with sky-high energy prices, has put a spotlight on the importance of energy efficiency. Our ambition is to reduce energy demand by 15% by 2030. That will be backed by £6 billion in cash between ’25 and ’28, coming on top of the £6.6 billion we have already spent during this Parliament.
The majority of British houses are, thanks to their Victorian builds, rather draughty. Our energy performance certificates did not really bother the estate builders of the 19th century, which is why our ECO+ scheme will help households install insulation, saving them hundreds of pounds off their bills each year—money they can spend elsewhere to grow the economy.
Energy sovereignty is now within our grasp. Clean, affordable energy for households and businesses is not a pipe dream; it is a project we have now embarked upon. Building new energy networks will create jobs; producing our own renewable energy will keep bills low; and as businesses and households are relieved of the pressure of crippling bills, the economy can flourish and grow. Energy is coming home.
Edward Miliband (Doncaster North) (Lab)
I thank the Secretary of State for his statement, and can I take the opportunity to welcome him to his new role? We support new nuclear, and I welcome the announcement on Sizewell. The Climate Change Committee tells us that nuclear should play a role as part of the balanced pathway to net zero. In his reply, could he tell us the timetable for Sizewell’s final investment decision and when we expect it to be up and running? I also welcome the return of the delayed Energy Bill, which should never have been paused by the Government.
As for the rest of the statement, I am bound to ask: is that it? Alongside nuclear, we need a sprint for cheap, clean, home-grown renewables, and I have to say to the Secretary of State that, given the chaos, confusion and embarrassment of the Government on onshore wind, I find it extraordinary that he did not clear that up in the House today. Let me remind the House of some facts. The ban on onshore wind in England that they put in place in 2015 has raised bills for every family in this country by £150 each, and keeping the ban in place up to 2030 would mean customers paying £16 billion more on bills compared with a target of doubling onshore wind. Let us be clear: opposing onshore wind waves the white flag on our energy security and raises bills for families.
The only reason we are debating this issue is not that the public do not support onshore wind—they do, by 78%, according to the Department’s own polling—but that dinosaurs on the Government Benches oppose clean energy, and David Cameron and every leader since has indulged them. The problem is that the Secretary of State, who prides himself on being a truly modern man, is part of the fossilised tendency. He was part of the lobbying effort against lifting the ban in April. He said onshore wind was an “eyesore” and created “problems of noise”, and he urged the then Prime Minister to “largely” reject it. I may have had some issues with his predecessor, the right hon. Member for North East Somerset (Mr Rees-Mogg), but the Secretary of State’s position is making the Victorian of the Tory party look positively on trend, because the right hon. Member for North East Somerset after all called for the consenting regime for onshore wind to be brought into line with other infrastructure. Can the Secretary of State clear up once and for all what his position is on onshore wind? Will he now act in the national interest, properly end the ban and finally bring the consenting regime in line with other infrastructure?
On solar, it is the same problem. The Prime Minister spent the summer saying he wanted to block solar, echoed by the Environment Secretary in the last couple of weeks. Blocking solar risks preventing the equivalent of 10 nuclear power stations-worth of power being built, so will the Secretary of State rule out the plans of the previous Environment Secretary to further block solar power on land?
On energy efficiency, frankly this Government should be ashamed of their record, with the green deal fiasco, the green homes grant fiasco and energy efficiency installations running 20 times lower than under the previous Labour Government. Can the Secretary of State tell us from his announcement, which I am afraid contains no new resources, in what year the 19 million cold, draughty homes below energy performance certificate band C would be brought up to that level of decency under his plan? We would do it in a decade. Can he confirm that, at the current rates of installation, under this Government it would not happen till the next century?
We have seen five Energy Secretaries since 2019. To overcome the bills crisis we face and to tackle the climate crisis, we need ambition, consistency and going all in on the green energy sprint. I am afraid we have not had these things from this Government. All we have had is inconsistency, dithering and a Government looking over their shoulder at their own Back Benchers. The Secretary of State has a lot of work to do to convince the country that that is going to change, and if he does not, it means that this Government will land us with higher bills and more energy insecurity, and will fail to take the leadership we need in tackling the climate crisis.
Grant Shapps
I do not think the right hon. Gentleman was in the Chamber earlier for Business, Energy and Industrial Strategy questions, but I did point to a quote from him back in 2010, when he said it was “pie in the sky” that the then new Conservative Government would get to 40% renewables by 2020. What happened? By 2020 we had got to 43.1% renewables. That is our record of delivery when it comes to renewables, so I do not think we need to take too many lectures from the Labour party, or from the party that five minutes ago did not support new nuclear power. It failed to commission any of it during its time in office—13 years, was it?—but now that we are getting on with it, all of a sudden it seems to have swapped sides.
On wind power, both offshore and onshore, I do not think the right hon. Gentleman recognises the fact that the strike prices in the contracts for difference are now lower for any version of power production at all when it comes to offshore wind. These turbines are now so large that they cannot even be constructed onshore. They are so big that the turbines cannot be carried by road; they have to put offshore.
Grant Shapps
How big are they? It is convenient that the World cup is on because the right hon. Gentleman will be able to envisage this. Single turbines are seven football pitches in scope, as they turn. They are not buildable onshore, which is one of the reasons why the cheapest way to build them offshore to produce energy offshore is to build these mammoth turbines, which go together in groups of 200 or even up to 300. However, I am sure he knows all of this and that, rather than discussing the actual solutions, he likes to throw up the chaff.
Since the right hon. Gentleman has mentioned onshore, I just want to note that the energy White Paper and the net zero strategy have both said exactly the same as we have been saying this week, which is that onshore can happen where it has local consent. I do not know why this local consent principle is so difficult for him to understand. There it is: we are delivering on the renewables, on the nuclear, on the energy independence and sovereignty that this country needs, and there is nothing from the Labour party.
John Redwood (Wokingham) (Con)
Over the last 48 hours, wind has generated as little as 1% of our electricity, and it was at 2% when I checked this morning, while of course most of the homes we represent use gas for heating. Will the Secretary of State confirm that we need to get on with issuing more production licences for domestic oil and gas, which cuts the carbon dioxide involved and will enable us to keep the lights on, which we cannot do when the wind does not blow?
Grant Shapps
My right hon. Friend is characteristically correct that we cannot always rely on a single form of electricity generation. As the French have found out, we cannot always rely on nuclear. I think France has 71 nuclear power stations in its fleet, but about half of them are down at the moment, so it cannot rely only on nuclear. I was discussing this very fact with my opposite number yesterday. I know that my right hon. Friend welcomes the £700 million development approval cash that we have put into the first new nuclear since the 1980s, and he is absolutely right that we need a broad spread of different energy forms to ensure that we can provide the cheap power we require at all times.
Alan Brown (Kilmarnock and Loudoun) (SNP)
The reality is that this statement is just a padding out of the press release that BEIS put out earlier. I do welcome the energy company obligation funding for energy efficiency, but I think we need to be clear that this is not Government money; it is money funded from our energy bills and paid for by all bill payers. One issue with ECO4 is that it cannot be combined with other grants, whereas ECO3 did allow that money to be combined with other grants to bring down the costs of external insulation, for example. That is something the Secretary of State could consider to make schemes more affordable for people. The reality with EPC bandings is that there are more homes currently rated D to G than A to C, so much more direct investment is needed in energy efficiency to rectify that.
The Secretary of State talked about energy security, so does that mean that the Government have finally bought out China General Nuclear from the Sizewell C consortium? Talking about sovereignty, will he confirm that uranium imports are going to be needed to keep Sizewell C going? Is it still the intention to take a 20% stake, and does that mean funding capital of £6 billion or £7 billion towards Sizewell C, because there is still no clarity in today’s statement? On the myth about nuclear baseload, by the time Hinkley Point C comes on stream, seven of the eight existing nuclear power stations will have stopped operating, which proves there is no need for nuclear baseload whatsoever.
On wider energy policy, the Scottish carbon capture and storage cluster was the most advanced project, but it was still only classed as a reserve. Will the Government urgently review this classification, and make the Scottish CCS cluster a track 1 cluster to allow that investment to be released and for that project to go ahead? Pump storage hydro, as I have raised several times, could deliver about 3 GW of power by 2030. All that is needed is an electricity pricing mechanism—a cap and floor mechanism—so will the Government urgently review that and start these discussions?
Finally, we know about the oil and gas investment allowance. If we are going to have continued record investment in renewables, there should be a renewables investment allowance to encourage that, particularly for green hydrogen.
Grant Shapps
Yes, I can confirm that China has now been bought out of the deal on Sizewell. The money yesterday ensured that it is no longer involved in the development.
The hon. Gentleman asked about the future funding for Sizewell. He may be familiar with the new “regulatory asset base” approach to funding, which is built along similar lines to the contracts for difference that have been used so successfully for offshore wind power. That is how we will look to bring income to the project. I should also say that CfDs will now take place on an annualised basis, which will give those including Scottish clusters the opportunity to bid in as well.
I am always curious about the SNP’s approach to energy. As far as I can work out, it does not like the oil and gas industry—even though the industry employs thousands of its constituents—and it absolutely hates nuclear. I am not quite sure what it wants to do on non-windy days.
Mark Jenkinson (Workington) (Con)
Cumberland has sites ready to go for new nuclear. It has expertise, interest and development companies for both small modular reactors and large-scale nuclear. Will the Secretary of State work with me and my hon. Friends the Members for Copeland (Trudy Harrison) and for Carlisle (John Stevenson) to bring Rolls-Royce SMR and UK European pressurised reactors 5 and 6 to Moorside?
Grant Shapps
I know that Cumberland has a tremendous amount of expertise and a lot more to offer. When Great British Nuclear launches in the new year, it will help to bring not just traditional Sizewell-style nuclear assets to this country, but the small modular reactors from Rolls-Royce and potentially other competitors.
Mr Speaker
I call the Chair of the Business, Energy and Industrial Strategy Committee.
Darren Jones (Bristol North West) (Lab)
I welcome the Secretary of State to his role. May I push him slightly further on the financing of Sizewell C? My understanding is that the Government are committed to spending 20% of the cost, and EDF 20% of the cost. That leaves 60% to be financed from the private sector, which I think means that up to £20 billion of financing still needs to be sourced. What will the Government do if they cannot find that from the private sector?
Grant Shapps
I thank the hon. Member for welcoming me to the Dispatch Box. As he will know as Chair of the Select Committee, we have been working on the Sizewell deal for quite some time and we got to the Government investment decision stage yesterday. Of course, we have been talking to potential financiers along with EDF and the French Government. We are confident about the level of interest, but I have no doubt that I will come to his Select Committee, along with my right hon. Friend the Minister for Climate, to discuss that in more detail soon.
Sir Robert Syms (Poole) (Con)
I welcome the announcements on nuclear and specifically on Sizewell C. The Rolls-Royce scheme for modular nuclear seems very exciting, but we do need to get on with it. Does the Secretary of State have a view as to what year we will be starting the first project?
Grant Shapps
My hon. Friend will be pleased to hear that when I was at Sizewell yesterday, I was with leaders from EDF and the French Government—indeed, the French ambassador was there. Later in the day I spoke to my opposite number about ensuring that we can speed up co-operation on nuclear, as well as on things such as wind, and even on our interconnectors. I was going to say that the point of Great British Nuclear is to really put the acid under this, but I am sure that there is a much better nuclear comparison. It is really about ensuring that we get on with producing our new nuclear fleet a lot faster than has happened in the last few decades.
Clive Efford (Eltham) (Lab)
Will the Secretary of State confirm that, even with the additional money made available for home insulation, his officials have told him that the money falls short by tens of billions?
Grant Shapps
It is worth the House knowing that we have already put in £6.6 billion. We have announced another £6 billion, which will be spent in the period from 2025 to 2028. The £1 billion that I announced yesterday will cover hundreds of thousands of homes. Of course, it is typical of the Labour party to think that the only way in which this can ever be funded is by the taxpayer and that there are no other routes to market. Lots of homes will be improved by, for example, regulations on build, ensuring that the overall increase in improvements in EPCs comes not just through spending taxpayers’ cash.
Bim Afolami (Hitchin and Harpenden) (Con)
It is a pleasure to welcome my constituency neighbour to his place as Secretary of State. He and the House will understand the importance of critical minerals to energy security. Could he outline his approach for the UK securing critical mineral supply to ensure that, over the longer term, we have energy security, particularly on things like lithium-ion batteries?
Grant Shapps
My hon. Friend and neighbour is absolutely right. Critical minerals are so important in securing the entire supply chain. Earlier I mentioned green lithium up in Teesside, which is part of that supply chain. The UK can have the first green lithium production in Europe because of Brexit and our ability, for example, to use more flexible rules that the Europeans cannot access at the moment to produce it, so that is a very good win. He is right about the strategy, and we have a strategy for the most important critical minerals.
Wera Hobhouse (Bath) (LD)
On energy efficiency, will the Government introduce an inspection scheme for all rented accommodation to stop landlords from letting out properties that do not meet energy efficiency minimums?
Grant Shapps
Private landlords are already under an obligation to ensure that their properties reach certain standards. However, as the hon. Member may well know, the Government are consulting on raising that standard in line with the improvements that we would expect over a period of time, and we have already signalled that that would be likely to be to an EPC rating of C.
Andrew Bridgen (North West Leicestershire) (Con)
What is my right hon. Friend’s assessment of the risk to our country’s energy security this winter from possible disruption to the vital Norwegian gas pipeline, which will supply our country with approximately half of its gas needs this winter? Will he confirm that contingency plans are in place?
Grant Shapps
I am pleased to report that, notwithstanding things like terrorism or developments in the war in Ukraine, we have confidence about both our supply and European supply this winter. The weather has been better than might have been expected and gas supplies are full. I should also point out that the rough storage supply has been brought back online, which has increased our own storage by about 50%. I think that in all expected, imagined circumstances, we will be okay this winter.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
This morning the Secretary of State and my Opposition Front-Bench colleagues have spent a long time tilting at windmills. Does he agree that when it comes to getting the right energy and keeping people warm this winter, all of us need to have more courage? Energy from waste could fulfil 20% of our energy needs. Good energy from waste schemes can heat the whole of a town or city, such as Sheffield. Is it not about time that we took energy from waste really seriously?
Grant Shapps
The reality of energy supply is that anyone who thinks there is a single silver bullet—I am not accusing the hon. Member of that at all—is typically wrong. Almost any energy source or supply has its vulnerabilities and its shortcomings. Certainly, energy from waste has its place—we are active in that space—as does ensuring that, for example, we are using energy as efficiently as possible. That is why we announced yesterday that there will be an £18 million campaign about doing straightforward things such as ensuring that the boiler flow is set correctly on people’s boilers.
Selaine Saxby (North Devon) (Con)
Does my right hon. Friend agree that, as we pursue energy sovereignty, floating offshore wind in the Celtic sea can play a vital part? Will he confirm when we can expect an announcement on the floating offshore wind manufacturing investment scheme funding? To maximise the benefits to the communities around the Celtic sea, we need good port infrastructure to drive the project forward.
Grant Shapps
My hon. Friend is absolutely right. Floating offshore wind is an interesting development, and we are actively looking at it and working on it with a whole load of industry partners. She can expect some exciting information in this area in the future.
Caroline Lucas (Brighton, Pavilion) (Green)
As a student of 16th-century literature, I enjoyed the Secretary of State’s Shakespearian rhetoric, but I am frankly staggered that he can possibly think that Sizewell C is cheaper—cheaper than what? It is massively costly. The RAB funding model basically means that consumers end up paying twice: once towards the cost of construction to lower the cost of borrowing, and again for more costly energy. The Secretary of State will know that no nuclear power station in the world has been built to time and to budget. He has asked what we do on windy days: may I suggest more interconnectors, far more solar—including ground-based solar—flexible energy demand systems, onshore wind, energy storage, tidals, and the mass energy efficiency and insulation programme that this Government are still failing to deliver?
Grant Shapps
One would think the Green party would welcome 43% of our power being renewable, done under a Conservative Government. On Sizewell C, she asks what it is cheaper than; I will tell her—it is cheaper than being subject to Putin’s invasion of Ukraine.
Dr Julian Lewis (New Forest East) (Con)
It took an international conflict to lessen and hopefully eliminate Europe’s dependency on a potential enemy, Russia. Can the Minister confirm that we will have no future dependency on China for our nuclear power stations?
Grant Shapps
I can certainly confirm that in the case of Sizewell C; as I mentioned, we are making sure that the Chinese element of that is no longer involved. We do not have a principled objection, apart from where issues of national security are concerned: clearly, energy provision is very much in our sights.
Richard Burgon (Leeds East) (Lab)
I welcome the Secretary of State to his place. Renewable energy is nine times cheaper than gas, and onshore wind is incredibly cheap and incredibly green, so we need to be clear: the Tory ban on onshore wind has kept bills unnecessarily high, and has also undermined energy security. Is it not time that the ban was fully scrapped and the interests of people struggling with their bills were put ahead of the political interests of nimby Tory Back Benchers?
Grant Shapps
It is good that the electorate know what they will be getting if they vote for the Labour party. With us, they will be getting local consent: if people locally are happy to see such power production, they will get it. With them, they will get it willy-nilly.
I want to correct the hon. Gentleman on one fact: the cost projections on new forms of energy supply show that offshore wind is the cheapest available in the next likely bidding round.
Greg Smith (Buckingham) (Con)
I warmly welcome my right hon. Friend’s focus on securing energy security domestically, but does he agree that that must happen alongside food security, not over the top of it? We have vast swathes of land being taken for solar farms, while warehouse and factory owners cannot install solar because the grid cannot take the power. What is being done to ensure that rooftop solar can happen?
Grant Shapps
My hon. Friend is absolutely right about rooftop solar; I have had it on my own house for the past 11 years, and once it is there, it just carries on producing power. We need to expand that, both domestically and on factory roofs. I will be looking at things like permitted development rights, which enable those panels to go up on top of roofs. There are currently limits to the size of the panels that can be put in place, and I think they are a fruitful source of additional power.
Mr Clive Betts (Sheffield South East) (Lab)
I welcome the Secretary of State to his place. According to what he has said, Sheffield must be getting some things right: we have been doing energy from waste for over 30 years, since I was council leader, and ITM Power, the leading green hydrogen company, is in my constituency.
Regarding nuclear, is it not important that we ensure a UK supply chain, which has not always happened? Rolls-Royce and SMRs are therefore really important, working with Sheffield Forgemasters, but Madhvani International is also prepared to put billions of pounds of development capital into developing Hitachi-based SMRs—which are already regulated in North America—working with Forgemasters and other Sheffield companies. I am pleased that the Secretary of State will meet me tomorrow to discuss the proposal in more detail, but in principle, I hope that he welcomes it.
Grant Shapps
I welcome the hon. Gentleman’s foresightedness in all the schemes that he mentioned. It is a shame that the last Government to invest in nuclear power was Margaret Thatcher’s Government, all the way back in the 1980s; yesterday brought that long drought to an end. As the energy Minister, my right hon. Friend the Member for Beverley and Holderness, has reminded me, we have already provided £210 million to Rolls-Royce for the small modular reactor programme. I wish both Sheffield and the rest of the country well in attracting some of this new technology, and the supply chain that goes with it, to their constituencies.
Craig Whittaker (Calder Valley) (Con)
Land-based wind is a good, quick and relatively cheap way for the Government to achieve more on alternative energy and security of supply. Does my right hon. Friend therefore agree that the current partial ban on onshore wind is stifling growth, our march towards net zero, and our quest for security of supply?
Grant Shapps
I think a mixed provision of energy is extremely important—I have talked about solar, offshore and onshore wind, nuclear, and other sources. The answer is very simple: as has been set out in our energy review, the 10-point plan and elsewhere, where there is local consent, we will ensure that onshore wind can be part of that critical mix. It is a fairly simple principle, which the whole House should be able to unite behind, that local consent is important in these matters. That is the situation that exists, and will continue to exist.
Hywel Williams (Arfon) (PC)
The role that community renewable energy production could play is currently hampered by an unwieldy regulatory process. Will the Secretary of State bring forward amendments to the Energy Bill to empower community energy schemes to sell their power directly to local companies and customers, thereby also neatly slashing bills?
Grant Shapps
The hon. Gentleman makes a very good point. We are already doing everything we can to cut that regulatory burden, and my right hon. Friend the Member for Beverley and Holderness would be happy to take that conversation forward.
Mr Robin Walker (Worcester) (Con)
As my right hon. Friend has mentioned, the last time that a Government invested in new nuclear in this way was when my late father was at the Dispatch Box as Energy Minister in 1987. I remember very well the campaign to “Get more for your monergy”—as a nine-year-old boy, I even got to wear the T-shirt. To ensure that our constituents get more for their monergy, does it not make sense to break the link between gas prices and electricity prices? When will my right hon. Friend do that?
Grant Shapps
My hon. Friend’s late father clearly showed great foresight—it is a shame that it has taken all these years, via a 13-year Labour Administration, to do nothing at all on nuclear. I like the T-shirt that my hon. Friend’s father made him wear, and I agree with him on separating out those prices. At the moment the highest cost in electricity applies to everything, and we are actively looking at breaking that complex relationship.
Matt Western (Warwick and Leamington) (Lab)
I welcome the Secretary of State’s quote from Shakespeare, but if the bard were alive today, he would be writing either a comedy about the Government or a tragedy about their energy strategy. We have houses in my constituency being built with insufficient insulation and no solar panels, or solar panels on north-facing roofs. If onshore wind is indeed the cheapest source of energy generation currently, how is it that Warwickshire has no onshore wind turbines?
Grant Shapps
As I mentioned, the reference price shows that other forms of energy could be even cheaper. Until now, solar panels were not as effective on north-facing roofs, for example, but the hon. Gentleman is absolutely right that the technology is improving rapidly, with the result that we can install solar panels in more conditions than would otherwise have been available.
Alun Cairns (Vale of Glamorgan) (Con)
We need to recognise that developing our renewable mix of energy to 43% is a significant success—far more successful than other comparable nations—yet in these current weather circumstances, as people switch on their electric kettles during tonight’s football match, wind will only generate 2% of that energy mix. That underlines the importance of my right hon. Friend’s statement, so will he provide further detail and timescales regarding when small and advanced modular reactors will be possible? Wales has two of the preferred development sites, but does my right hon. Friend further agree that the Welsh Government need to be supportive of those projects to make them a reality?
Grant Shapps
My right hon. Friend is right. In Wales and Scotland, the devolved Administrations need to support new nuclear provision to provide energy security for their constituents. He talked about 43.1% of our energy coming from renewable power. Opposition Members said that it could not be done, but it has been done ahead of time and we will only go further.
Jim Shannon (Strangford) (DUP)
I thank the Secretary of State for his answers. In BEIS questions today, he referred to 10,000 highly skilled jobs and securing UK energy security, with British energy used for British homes. Some 6 million of those homes can be powered by the Sizewell C nuclear plant. Has the Secretary of State come to an assessment of how these decisions will have an impact on energy security for the devolved institutions? What steps will be taken to ensure that Northern Ireland, which I come from and represent, plays a part in securing energy independence?
Grant Shapps
The hon. Gentleman is right that a single nuclear power station can power 6 million homes, whereas a modular reactor can power perhaps 1.5 million homes. As a result of interconnectors, that power—when it is generated in Great Britain—helps Northern Ireland and all the devolved Administrations around the country. He is on the right track; that is the kind of energy independence that I mentioned in my statement.
David Duguid (Banff and Buchan) (Con)
The Secretary of State will be aware of analysis from the Climate Change Committee that states that we will not get to net zero in this country without carbon capture and storage. I therefore welcome his commitment to helping to liberate private investment in carbon capture and storage and other technologies. The Scottish cluster alone is poised to have billions of dollars-worth of investment. While he is pondering the acceleration of that project, will he consider joining me on a visit to the St Fergus gas terminal in my constituency? It has not only carbon capture and storage, but blue hydrogen, sustainable aviation fuel and net zero thermal power generation, and grid capacity and resilience improvements are being made in and around it.
Grant Shapps
My hon. Friend is right about the importance of private investment in carbon capture, utilisation and storage. The Energy Bill will look to unlock that private investment.
Aaron Bell (Newcastle-under-Lyme) (Con)
I welcome the Secretary of State to his place. Global gas prices have been at record highs. That has been caused by Putin’s illegal war in Ukraine and it has been a problem for the whole of Europe, so I welcome what the Government have done to protect my constituents from this impact through our energy price guarantee. Does he agree that the long-term solution to ensure stable and lower prices is to have diverse sources of British energy providing the power to our homes and businesses?
Grant Shapps
My hon. Friend is right. We need energy independence, security and sovereignty. That is what we are building in co-operation with our partners, with interconnectors, so that we are never again subject to the whims of a dictator from the east, as has happened this year.
Andy Carter (Warrington South) (Con)
I welcome many of my right hon. Friend’s steps to ensure energy security, particularly in the nuclear sector. He talks a great deal about Sizewell C; Warrington is the home of the National Nuclear Laboratory, so the decision will secure many of the 2,500 jobs that nuclear generates in Warrington. The north-west leads the way in carbon capture and storage and hydrogen technology with HyNet, so will he outline how hydrogen can play an important part in large industry energy generation for the future?
Grant Shapps
My hon. Friend is right about the role of hydrogen. I know from my time as Secretary of State for Transport how important that will be, particularly for transport in the much larger category of goods vehicles, buses, coaches, marine vessels and aviation. This is not just about the jobs in nuclear, which the Sizewell decision and Great British Nuclear will help, but about the development in hydrogen power. In particular, those hubs with great expertise will be tremendously important, and this Government fully back them.
Jack Brereton (Stoke-on-Trent South) (Con)
Investment in energy-intensive industries such as ceramics must also be a key part in reducing our overall energy consumption. Will my right hon. Friend look at what more can be done to invest in those key manufacturing sectors not only to reduce that energy dependence, but to reduce costs and support jobs in places such as Stoke-on-Trent?
Grant Shapps
The brilliant industries—particularly ceramics—in my hon. Friend’s constituency have been badly impacted by Putin’s war. The energy bill relief scheme has helped, and such things as the scheme for energy-intensive industries will assist, too. Ultimately, this comes to the point of today’s statement: energy independence, with low-cost and affordable energy, is the way forward not just for domestic users, but businesses such as those in my hon. Friend’s constituency.
Bill Presented
Elections (Proportional Representation) Bill
Presentation and First Reading (Standing Order No. 57)
Cat Smith presented a Bill to introduce a system of proportional representation for Parliamentary elections, for elections for directly-elected mayors in England, for local authority elections in England and for police and crime commissioner elections in England and Wales.
Bill read the First time; to be read a Second time on Friday 20 January 2023, and to be printed (Bill 201).
National Eye Health Strategy
Tuesday 29th November 2022
(2 years ago)
Commons ChamberRead Full debate National Eye Health Strategy Bill 2022-23 View all National Eye Health Strategy 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
Marsha De Cordova (Battersea) (Lab)
I beg to move,
That leave be given to bring in a Bill to require the Secretary of State to publish a national eye health strategy for England; and to require that strategy to include measures for improving eye health outcomes, for reducing waiting times for eye health care, for improving patient experiences of eye health care, for ensuring that providers of eye health care work together in an efficient way, for increasing the capacity and skills of the eye health care workforce, and for making more effective use of research and innovation in eye health care.
The Bill would ensure that regardless of where one lives, everyone can access the right care where and when they need it, eliminating the postcode lottery and addressing the inequalities in access to eye care services. An estimated 2 million people are living with sight loss in the UK. We rely on our eyes every day, yet we do not give much thought to our eye health until our vision changes.
A report earlier this summer showed that 17.5 million adults in the UK had not had an eye test in the past two years, as recommended. Anyone can be impacted by sight loss, and Members from across the House will have hundreds of constituents affected. Fifty per cent. of all sight loss is avoidable and 250 people begin to lose their sight every day, with a shocking 21 people a week losing their sight due to a preventable cause.
Eye care services in England are under intense pressure due to huge backlogs as a result of the pandemic, demand from an ageing population and low recruitment and retention of all groups of the ophthalmology clinical workforce. More than 650,000 people are on the waiting list in England, of whom 37% have been waiting for over 18 weeks and over 4% have been waiting for more than a year—that is, 26,000 people who have been waiting for more than 12 months to see a specialist.
Ophthalmology has been the busiest NHS out-patient clinic for the past three years. Delays to diagnosis and treatment can lead to a complete loss of sight. For example, patients with age-related macular degeneration can experience rapid and sometimes complete central vision loss within weeks if not treated. As well as the social and emotional impact of sight loss, there is a huge economic cost to the UK economy, which is estimated to be £36 billion annually.
To respond to the crisis in eye health, the Government can commit to implementing a national eye health strategy for England that would include measures to improve eye health outcomes, reduce waiting times, improve patient experiences, increase the capacity and skills of the workforce and make more effective use of data, research and innovation.
In the first instance, the Government could seek to appoint a single Minister with responsibility for eye health rather than having the current situation where multiple Ministers are responsible.
The strategy should include the following areas. First, there should be an eye health and sight loss pathway to require care and support for those with sight loss, focusing on the provision of non-clinical community support to complement the work of community optometrists, ophthalmologists in hospitals and rehab officers. The pathway must focus on the physical and emotional impacts of being diagnosed with sight loss, as research has shown that people affected are likely to experience poor mental health lifetime outcomes such as depression and anxiety. It should not only address geographical eye health inequalities, but ensure more equity of access to eye care among communities and populations more at risk of being unable to access NHS sight tests, including people who are homeless and people with a learning disability.
The second area is to improve connections between primary and secondary care, with an emphasis on integrated care systems and on improving the relationships and collaboration across the two services so that they can work more effectively together while ensuring timely and accurate referrals. That would significantly improve patient experiences and health outcomes.
The third area is workforce expansion. Limited capacity is a particular concern in eye care because there is a significant shortage of eye doctors. Back in 2018, the Royal College of Ophthalmologists revealed that 434 additional specialist posts were required to meet demand, and we know that the situation is now even worse. The World Health Organisation’s Workforce 2030 plan recognises the fundamental role of the workforce in improving health outcomes. A national strategy for eye health must address that issue, placing emphasis on the recruitment, training and upskilling of medical and non-medical eye health professionals.
The fourth area is health intelligence and data. Meaningful action starts with good-quality data, but for too long population data has not been used effectively to pinpoint the location of need and places where opportunities for change can be found. A strategy should involve focusing on robust data collection to inform decisions and improve the delivery of the service. Advances in research and technology, from how people are diagnosed to how they receive treatment, must be incorporated. Effective and efficient methods are available, but they are not being used. A strategy would change that.
Finally, the fifth area is raising awareness of eye health by creating better public health messaging. Nearly 2 million people each year turn up at an accident and emergency department or try to get a GP appointment for a problem that could be dealt with by visiting a community optometrist. We need campaigns to raise awareness of the importance of maintaining good eye health and to educate the public on the differences between eye screening and eye tests, along with improved signposting on where to go for help, should one need it.
Health strategies have delivered positive outcomes in Scotland, as they have in England for other diseases, but at present England is the only country in the UK without an eye health strategy. It is important to note that for such a strategy to be successful and of value, it must be designed in collaboration with stakeholders, including blind and partially sighted people, civil society groups, care providers and the industry. It must also have sufficient resource and investment.
Given the scale of the problems, it is in the Government’s interest to commit to a strategy. The benefits would transform lives, alleviate pressures on the health service and reduce economic costs. We should make it our goal to ensure that no one loses their sight unnecessarily. I thank everyone who has contributed to the Bill, including the partnership The Eyes Have It, the Thomas Pocklington Trust, industry leaders such as Specsavers and Roche and, most importantly, people living with sight loss. The sector has been united in the call for a national eye health strategy. It is time for the Government to act.
Question put and agreed to.
Ordered,
That Marsha De Cordova, Kate Osamor, Bell Ribeiro-Addy, Sir Stephen Timms, Rosie Duffield, Janet Daby, Kim Johnson, Ian Byrne, John McDonnell, Clive Lewis, Dr Rupa Huq and Jim Shannon present the Bill.
Marsha De Cordova accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 3 March 2023, and to be printed (Bill 202).
Privilege
(2 years ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
14:27 - The House divided: - Ayes: 371 / Noes: 16 - Question accordingly agreed to.
Madam Deputy Speaker (Dame Rosie Winterton)
I remind hon. Members of the decision in question and of the procedure on this motion. The decision before the House is whether to refer the matter to the Committee of Privileges. It will be for the Committee to report back on whether it considers that there has been a contempt.
Although it is in order for hon. Members to refer to the issues cited in the motion, it is not in order to make general criticisms of the conduct of the hon. Member for Ochil and South Perthshire (John Nicolson) or of any other hon. Member. Good temper and moderation must be maintained in parliamentary language. Previous debates on such motions have usually been relatively short; I hope that this debate will be focused and brief. Any hon. Member who wishes to speak needs to stand at the beginning of the debate to ensure that they catch my eye.
The right hon. Member for Haltemprice and Howden (Mr Davis) has tabled a motion for debate on the matter of privilege, which Mr Speaker has agreed should take precedence today. I call David Davis to move the motion.
Mr David Davis (Haltemprice and Howden) (Con)
I beg to move,
That the matter of the actions and subsequent conduct of the hon Member for Ochil and South Perthshire in relation to correspondence from the Speaker on a matter of privilege be referred to the Committee of Privileges.
I have been advised by the Clerks that this is a very narrow motion, so I will stick strictly and exclusively to the matter at hand. Before I come to the substantive motion, however, I want to say something to those members of the public who may think that this is an arcane or even abstruse issue.
Ever since Speaker Lenthall told King Charles I that
“I have neither eyes to see, nor tongue to speak in this place, but as the House is pleased to direct me,”
the Speaker has been the spokesman, champion and protector of the Members and institutions of this place, as well as being the impartial arbiter of our proceedings. If hon. Members think that that is just a piece of ancient history, they ought to consider more recent times. Mr Speaker’s more recent predecessors have been criticised on issues of impartiality or for failing to protect Members: for example, Mr Speaker Martin’s failure to protect my right hon. Friend the Member for Ashford (Damian Green) was highly controversial at the time and very important.
As for upholding the rights of Back Benchers and Opposition Members, we need only look at Mr Speaker’s fierce criticism of the Government during the statement yesterday, when he upheld our rights. It is therefore vital for Members to protect the integrity, impartiality and apolitical nature of the Speaker’s office. That point is clearly recognised in “Erskine May”—hardly a polemical document—at paragraph 15.14, which states that
“reflections on the character of the Speaker or accusations of partiality in the discharge of their duties”
are a punishable offence. “Erskine May” also recognises that a Member’s behaviour and conduct outside this House count towards that.
I turn to the substantive motion. Following an appearance by my right hon. Friend the Member for Mid Bedfordshire (Ms Dorries) before the Select Committee on Digital, Culture, Media and Sport while she was Secretary of State, the Committee opened an investigation into several claims that she made, but ultimately it decided against any action. The Committee as a whole published a special report—[Interruption.] [Hon. Members: “He’s turned up.”] Oh, right.
The Committee as a whole published a special report, which said:
“we may have sought a referral to the Privileges Committee but, as her claims have not inhibited the work of the Committee and she no longer has a position of power over the future of Channel 4, we are, instead, publishing this Report to enable the House, and its Members, to draw their own conclusions.”
It is crucial in this matter to remember that the hon. Member for Ochil and South Perthshire (John Nicolson) sits on that Committee. He did not ask for a Division before the report was published; he did not vote against it; he did not publish a dissenting opinion on that report. Instead, he wrote to Mr Speaker asking him to give precedence to matters reported on by the Committee, even though the Committee itself was not seeking such precedence. As would be expected, Mr Speaker did the usual thing, and—in his own words—decided to
“respect the Committee’s assessment of the situation.”—[Official Report, 23 November 2022; Vol. 723, c. 291.]
After Mr Speaker had replied to the hon. Member privately, as is the convention with privilege issues, the hon. Member took to Twitter. He brandished a copy of Mr Speaker’s letter in his video. He broke all the conventions on the privacy of Speakers’ correspondence on privilege, and disclosed a partial and partisan account of Mr Speaker’s letter. He said on Twitter:
“He’s considered my letter, but he’s decided to take no further action.”
In doing so, he implied that it was Mr Speaker’s unfettered decision not to refer the matter to the Privileges Committee. Nowhere in his filmed statement did he tell his followers that Mr Speaker was following normal procedure by accepting the will of the DCMS Committee—I imagine that is why Mr Speaker described his action last week as giving a “partial and biased account” of the correspondence—and nowhere in his statement did he tell his followers that it was he himself who sat on that Committee and signed off the conclusions.
All of us in this House have a duty to uphold its rules and institutions, but by knowingly breaching the confidentiality of the Speaker’s correspondence, the hon. Member has done the opposite. This is a clear breach of our rules. The proper response after Mr Speaker’s censure of him for his behaviour last week was for the hon. Member to accept the seriousness of his actions, apologise properly to the House, and delete the offending tweets. If he had done so, I imagine that would have been the end of the matter; indeed, I would not have made my point of order on the day. However, he failed to apologise, and instead compounded his misdemeanour. Taking to Twitter once again, he claimed that he
“offered no apology as there was no misrepresentation.”
Pete Wishart (Perth and North Perthshire) (SNP)
Will the right hon. Gentleman give way?
Mr Davis
He claimed that he
“didn’t ‘release’ the Speaker’s letter. I summarised it entirely fairly.”
That is untrue. He misled the country by deliberately withholding the way in which this decision had been arrived at and his part in it. He also retweeted an account that was directly critical of Mr Speaker, saying that Mr Speaker’s statement had been merely “Ermine pursuing theatrics” and that Mr Speaker was placing his
“integrity above that of parliament”.
Mr Davis
The hon. Member for Ochil and South Perthshire had again compounded his misdemeanour by deliberately attempting to undermine the impartiality and integrity of the Speaker’s office. It is the role of the Speaker of this House to protect Members and stand up for its Back Benchers, and it is the Members’ duty, on our part, to uphold the dignity of the Speaker’s office.
Mr Davis
I do not believe any of this conduct to be appropriate for a Member of this House. However, that is not for me to judge, as a single, ordinary Member, which is why this is not a motion to condemn, but a motion to pass the matter to the Privileges Committee of the House of Commons.
John Nicolson (Ochil and South Perthshire) (SNP)
At the heart of this issue, I believe, is accountability. What should happen to Members who break the rules, and how open should our procedures be? What should the public be allowed to know?
Let me say at the outset that I am very sorry that the Speaker feels that my revealing his decision not to have a debate in the House about our Committee’s report has put him in a bad light with the public. That was never my intention. My intention—[Interruption.] If Members allow me to develop my speech, they will hear my points. My intention was merely to let the public know what had been decided.
I am accused of breaking a rule myself, and I would like to explain the circumstances to the House. I am a member of the Digital, Culture, Media and Sport Committee. We held a hearing with the then Culture Secretary, the right hon. Member for Mid Bedfordshire (Ms Dorries), at which she claimed that a Channel 4 reality series in which she had appeared some years ago had used actors pretending to be members of the public. She claimed that they had confessed this to her. A member of the production team who lived on the estate concerned—
Madam Deputy Speaker (Dame Rosie Winterton)
Order. I am sorry that the hon. Gentleman missed my opening remarks, but it is quite clear that this is not about the actions of any other Member. It is not about what happened in the Committee with any other right hon. Member. It is about the motion before us.
John Nicolson
Thank you, Madam Deputy Speaker. Let me say that there was considerable press interest in our Committee’s work, and I decided that we should send a copy of the report to the Speaker. I thought that time might be set aside for a debate about referring it to the Committee of Privileges. However, the Speaker wrote back to me saying that he did not believe the case met the threshold for a debate. I recorded a video summarising the Speaker’s decision, and I tweeted it. I offered no comment about the Speaker, nor did I criticise him. There was considerable public interest, and I soon discovered that the Speaker was angry. He believed that I should not have reported his decision. Last Wednesday, he told me in the House that he thought I had not summarised him accurately, and that I should not have reported him at all. It was not my intention in any way to summarise him inaccurately.
Before I was elected to the House, I was a journalist—a reporter for “Newsnight”, among other current affairs shows. I believe in open democracy, but I also believe in maintaining agreed confidentiality. It did not cross my mind that revealing the Speaker’s decision on this was a breach of privilege. After all, what was I to say if journalists asked me whether I had written to the Speaker? Was I to say, “Yes”? If they asked me, “Has the Speaker responded? Has the Speaker given a ruling?”, was I then to say, “I’m afraid I can’t tell you”? I did not consider that I had broken any confidence or betrayed any trust. I did not imagine that the Speaker’s decision on a matter of importance to my constituents could not be revealed. Moreover, I believe that I summarised the Speaker fairly, but I am in the unfortunate position of finding myself unable to prove that, because in order to do so I would have to release the Speaker’s letter to me in its entirety—something which, as we have established, the Speaker does not believe I should do.
There has been a suggestion that I printed only half the letter. That is not the case. The Speaker’s letter to me came as a letter through the post. There was no need for me to print it, nor did I publish it, nor did I show its contents to the camera, nor did I leak it to others. I was very open in the way I talked about it, which I hope shows that I did not think I was behaving improperly. There has also been some suggestion that the Select Committee did not wish to see this matter proceed to a privileges debate. That, too, is not the case. The Committee decided not to refer the Member concerned because she was no longer a Cabinet Minister, but the Committee left open the option for others to do so. Indeed, some Committee members expected that to happen. I agreed with the findings of the Committee, which were unanimous and cross-party.
The right hon. Member for Haltemprice and Howden (Mr Davis), who wrote to the Speaker asking for this debate, has just spoken again. I have never met the right hon. Member or spoken to him here, although I may have interviewed him in the past. He is not a member of the Select Committee, and he has previously championed free speech.
Madam Deputy Speaker
Order. We really are not here to discuss the matters surrounding the Committee itself. The hon. Gentleman needs to stick to what is in the motion.
John Nicolson
May I just say this, Madam Deputy Speaker? I spoke to the Chair and the Clerk of the Committee today. I gave them exactly the words that I intended to use, and obtained their permission to use the words that I have just repeated.
Madam Deputy Speaker
Order. It is up to me to make the final decision. [Hon. Members: “Hear, hear.”] Those people do not give the hon. Gentleman permission; I do.
John Nicolson
The right hon. Member for Haltemprice and Howden spoke last Wednesday following the Speaker’s remarks from the Chair, and he laid into me with some vigour, using what appeared to be a pre-prepared speech. He was especially exercised by what he saw as my breach of parliamentary etiquette. It is worth me pointing out in that context that he did not contact me to inform me that he planned to speak about me, which as we all know is the convention. I was not afforded the opportunity to reply last Wednesday, but before moving on to other business the Speaker concluded:
“I am going to leave it there for today”.—[Official Report, 23 November 2022; Vol. 723, c. 292.]
I therefore assumed that the matter had been laid to rest. However, the right hon. Member then took to Twitter to pursue his criticism of me, complete with a video of his speech.
Madam Deputy Speaker
Order. It is not for the hon. Gentleman to be criticising the right hon. Gentleman who moved the motion. He can speak to the motion, not outside it, so can we just stick to the matter in hand?
Simon Hoare
I am grateful to the hon. Gentleman, who on a personal level I like. Can I just give him some friendly advice? Put the spade down.
John Nicolson
People are watching this, and I am pleased that they are. I think they will draw conclusions, having heard both sides of the argument.
Pete Wishart
I have been in this House for 21 years, and as you know, Madam Deputy Speaker, I have been a member of the House of Commons Commission for something like four years. I had absolutely no idea that we could not reveal that we had had correspondence with the Speaker or summarise what it was. How on earth was my hon. Friend supposed to know that, when I, with my 21 years in this House and my service on the Commission, did not know it? All of this seems to be, at best, some sort of means for retribution and, at worst, institutional bullying, because that is what it is starting to feel like right now.
Madam Deputy Speaker
Order. Interventions can be made, but they should be brief. I would also remind hon. and right hon. Members that if the House decides to refer this matter to the Committee of Privileges, these sorts of arguments can be made there. This debate is on the simple matter of the motion. Other arguments can be made to the Committee if the House decides it wants the matter to go to the Committee.
John Nicolson
I know that the Speaker has been on the receiving end of often unpleasant comments from the public since I revealed his decision. That was never my intention. I did not use his name, I did not link to him and I did not post contacts for him. I am very sorry that a pile-on has ensued. I have friends across the House, and I believe in vigorous but fair debate. I have no time for abusive behaviour; I do not engage in it and I deplore it.
I am advised that I breached a parliamentary rule by referring to the Speaker’s letter, but as I have explained, I did not knowingly do so. I would never reveal a confidence. I did not believe that the Speaker’s decision on a parliamentary matter was a secret. Indeed—this is perhaps not a matter for today—should there not be a distinction between correspondence containing confidences and correspondence on policy decisions? Has every Member who has revealed a Speaker’s decision by letter found themselves the subject of a parliamentary privilege debate, as I am today? Although this convention appears to exist, is it not the very antithesis of open democracy? Many Members on both sides of the House have told me privately that they did not know this rule existed.
Tim Loughton (East Worthing and Shoreham) (Con)
I should declare an interest as another Member who appeared in the very same reality show that the hon. Gentleman’s Committee discussed. He has not apologised to the Speaker. Does he not think that, having betrayed what was marked as private correspondence, which clearly and rightly aggrieved the Speaker, if he had given an apology at the time when it was raised by the Chair last week, he would not be in this position now? Why did he not do that? Would he not like to bring back at least some decorum by apologising profusely to the Speaker and the House now for the offence he has caused?
John Nicolson
The hon. Gentleman says the letter was marked “private”. I do not know how he knows what was on the letter. I have shown the letter to absolutely nobody. But since he challenges me, the letter was not marked “private”. If it had been, I would not have talked about it. It is a core belief of people in my former profession that we hold confidences and that we will go to prison rather than reveal our sources. The letter was not marked “private”. It was about a matter of policy on whether or not a debate could be held, and I did not think that it was confidential.
Wera Hobhouse (Bath) (LD)
The hon. Member has said that he was aware that the Speaker had become very angry. As the Speaker serves all of us, and as this is all about decorum, is it not time that he apologised to the Speaker? Maybe that would resolve a lot of things.
John Nicolson
I want to answer that question honestly. I am slightly torn because, on the one hand, I am deeply sorry that the Speaker is upset. Those who know me will know that I do not ever conduct politics in a way that aims to be offensive, and I am truly sorry that the Speaker is upset. I am truly sorry that I have upset the Speaker, but it would be disingenuous of me to say that I knowingly revealed this. I could not have been more open by going on camera and discussing this. I clearly was not trying to hide it. If people in my profession—my former profession and this profession—want to pass things into the public domain in a sleekit or surreptitious way, they give them to journalists. I did not do that. I stood up and talked about the letter, not revealing its contents in detail but summarising it.
This place often seems hard to understand for the general public, and its procedures can appear opaque. I suspect that most people will find it curious that the Member who misled the Select Committee was subject to no consequences but the Member who revealed that—
Madam Deputy Speaker (Dame Rosie Winterton)
Order. The hon. Gentleman absolutely needs to withdraw that remark.
John Nicolson
I withdraw that remark. I, however, am subject to the current debate. I note that, over the years, these debates have been confined to people who have committed or been accused of committing some of the most egregious offences, but I have yet to meet a Member who thinks this falls into that category.
I want to conclude by saying again that it was never my intention to insult the Speaker. I do not know him well but we have only ever had friendly exchanges when meeting. I bear him absolutely no ill will. I deplore any and all online abuse that he has suffered. Nobody, I imagine, is enjoying this debate—least of all me. I find interpersonal conflict stressful and unpleasant. I hope the House concludes that there was no malicious intent in anything that I did, and I apologise to the Speaker for breaching a House rule, but given the all-party nature of the Committee report I sought no party political advantage and I hope that Members here today will seek no party political advantage. My only motivation was to do what I always try to do, and that is to engage with the debate and to communicate my work here with constituents and with journalists as openly and fairly as I can.
Sir Peter Bottomley (Worthing West) (Con)
I received a letter today from someone who met me at a conference, saying that I was right in saying to her then that although I was not directly involved in her cause, it was a cause worth fighting for. I took that as a tribute. It was the LGB Alliance conference across the road from here. The hon. Member for Ochil and South Perthshire (John Nicolson) talked about pile-ons, and he constantly used the term on Twitter. That may or may not be relevant to the Committee of Privileges, if the matter is referred to that Committee—[Interruption.]
Madam Deputy Speaker
Order. I have to say to the Father of the House that this is not about criticising other people’s behaviour. It is strictly about the motion before us.
Sir Peter Bottomley
In the Hansard of 23 November, at 12.33 pm, Mr Speaker said he was awaiting an apology. The response from the hon. Member for Ochil and South Perthshire expressed regret at the pile-on against the Speaker, and we have heard today that the hon. Gentleman did not intend to be offensive to anybody.
I think the proper description of last week’s exchange with the Speaker, as shown on the record in Hansard, is that the Speaker is awaiting an apology, which we have not yet heard. We have heard an explanation this afternoon that the hon. Gentleman was asking for a debate on a Select Committee report. The way to ask for a debate on a Select Committee report is to ask the Leader of the House. That is the normal parliamentary procedure.
The hon. Gentleman was actually asking for a privileges reference, which was not accepted. If a Member has been here for 21 years, they know the rules changed some years ago. Requests for a privileges reference are taken up in private with the Speaker, who then gives a view. If an hon. Member receives a reply from the Speaker saying no, and if they decide to make it public that they asked, they have a responsibility to be fully open about Mr Speaker’s whole response, not a part of it, as the Speaker said in the Chamber last week at 12.33 pm.
I believe the House has a responsibility to back the Speaker, right or wrong, but especially when he is right. On this issue, my right hon. Friend the Member for Haltemprice and Howden (Mr Davis) is right, and I ask the House to support the reference to the Committee of Privileges. After that, when the Committee has reported, we can decide whether to have a fuller debate and whether the hon. Member for Ochil and South Perthshire has, by then, done as the House would expect, and as the Speaker asked, and given a full apology.
Madam Deputy Speaker (Dame Rosie Winterton)
I call the SNP spokesperson, Deidre Brock.
Deidre Brock (Edinburgh North and Leith) (SNP)
It is extremely unfortunate that matters have come to this, but I understand the conventions of the House that brought us here. The Scottish National party respects the need for a transparent and open process.
The Leader of the House has previously spoken of the importance of parliamentary modernisation, and of how the House operates unlike any normal administrative centre in the public or private sector, and I agree with her. The procedures of the Houses of Parliament need updating, and this situation perhaps provides us with an example of where some reform could take place.
I am confident, having spoken to my hon. Friend the Member for Ochil and South Perthshire (John Nicolson), that he was completely unaware of the conventions of the House at the heart of this issue. He sought clarity on proper procedure and was caught out. He has already spoken at length, with his customary eloquence, outlining his position and how there was no malicious intent.
In closing, I repeat that the SNP respects the need for transparency and openness.
Madam Deputy Speaker (Dame Rosie Winterton)
I call the shadow Leader of the House.
Thangam Debbonaire (Bristol West) (Lab)
The upholding of conventions is essential to the smooth running of this House and to the foundation of political order in this country. “Erskine May” is clear—there is a search function, and I checked this morning—about the procedure for raising a complaint about a breach of privilege. The rules are there to find for a Member who seeks to raise such a complaint. “Erskine May” says that Members need the permission of the Speaker and must request it in writing. There is a long-standing convention that, when Members write to the Speaker, they do so on the basis that the correspondence in both directions will remain confidential. This is especially the case on matters of privilege. Paragraph 15.32, footnote 6, is explicit:
“It is not the practice for such letters to be made public… Members should not challenge the Speaker’s decision in the House.”
As Members of this House we all hold parliamentary privilege, but that comes with responsibility. We have a duty not to misuse it, and we have a duty to respect the Chair’s rulings. Our conduct must live up to the high expectations that the public should have a right to expect of us.
I therefore believe the conduct of the hon. Member for Ochil and South Perthshire (John Nicolson) warrants an investigation by the Committee of Privileges, as requested by the right hon. Member for Haltemprice and Howden (Mr Davis), so I will support the motion today, and I urge others to do so.
The Leader of the House of Commons (Penny Mordaunt)
I thank my right hon. Friend the Member for Haltemprice and Howden (Mr Davis) for moving the motion. I deeply regret it, but I understand why he has had to do so.
I heard what the hon. Member for Ochil and South Perthshire (John Nicolson) said today, and I am glad to see him in the Chamber. I do not think his argument that he was not aware of the right course of action or of the appropriate response to journalistic inquiries, which is to state that any such correspondence is confidential, is a reason for not passing the motion. I sincerely hoped he would make an apology. I think there is consensus across the House about the right course of action. Had he taken that opportunity, the matter could potentially have been brought to an end today.
The procedure for raising breaches of privilege is a long-standing and important convention that ensures the privileges and rights of this House are protected.
John Nicolson
I think there is a misunderstanding. I quite clearly said that I was apologising to Mr Speaker. I was unaware of this convention, and I wished to cause him no hurt. I apologised, and I am repeating that now.
Penny Mordaunt
I am afraid that the way in which the hon. Gentleman phrased it, and the way in which he has not appreciated—
Penny Mordaunt
I will continue.
The hon. Member for Ochil and South Perthshire has not appreciated the damage that has been done in these circumstances. The Speaker’s role in this is integral, including in avoiding—
Penny Mordaunt
No, I will not give way. I am going to have my say.
The Speaker’s role in this is integral, including in avoiding frivolous complaints. It is important that his role is respected.
Penny Mordaunt
No.
Correspondence on such matters must remain confidential and, in this place, we all suffer if that does not happen. As Mr Speaker noted, it is not for him to determine whether a contempt has been committed. I therefore support the motion and the need for the Committee of Privileges to thoroughly and correctly investigate any potential breach. I think we all regret where we are today. I am sorry the hon. Member for Ochil and South Perthshire did not make a full and frank apology, and I support the motion.
Question put.
Northern Ireland (Executive Formation etc) Bill
Tuesday 29th November 2022
(2 years ago)
Commons ChamberRead Full debate Northern Ireland (Executive Formation etc) Act 2022 View all Northern Ireland (Executive Formation etc) Act 2022 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 29 November 2022 - (29 Nov 2022)
The Secretary of State for Northern Ireland (Chris Heaton-Harris)
I beg to move, That the Bill be now read a Second time.
Three weeks ago, I stood at this Dispatch Box setting out my profound regret that the Northern Ireland Executive had not been restored by the legal deadline of 28 October. As I said then, I believe strongly that the people of Northern Ireland deserve a functioning Assembly and Executive, where locally elected representatives can address issues that matter most to those who elect them. That has been denied to the people of Northern Ireland since February, and Northern Ireland has been without fully functioning devolved institutions for the bulk of this year. That is both unacceptable and a cause for alarm.
What the people of Northern Ireland would welcome is getting their devolved institutions up and running. They are worried that almost 187,000 people in Northern Ireland have been waiting for more than a year for their first out-patient appointment; they are concerned that there is a higher share of working-age adults in Northern Ireland with no formal qualifications than anywhere else in the UK; and they are worried that a quarter of children in Northern Ireland are growing up in poverty.
There is also a legitimate and strong concern about the functioning of the Northern Ireland protocol. This concern is felt very strongly indeed in the Unionist community. It is clear, though, that the Executive will not return overnight, and that a further election in the immediate term would be unlikely to produce a significantly different result.
Ian Paisley (North Antrim) (DUP)
I thank the Secretary of State for giving way so quickly into his speech. He used the term “considerable alarm”. I wonder whether he is pondering what is taking place in the Hutch criminal trial in the courts in Dublin and the implications that the outcome of that trial could have for the operation of any political activity not only in Northern Ireland, but in the Republic of Ireland. Is that being factored in to the Secretary of State’s alarm?
Chris Heaton-Harris
The trial is certainly being watched assiduously by my officials and me. However, this Bill is about the restoration of the Executive in Northern Ireland—something that is very important indeed. Unfortunately, the time has come for the Government, and indeed for hon. and right hon. Members in this House, to take action in response to the governance gap that has emerged in Northern Ireland, and that is what this Bill seeks to do.
Gavin Robinson (Belfast East) (DUP)
The Secretary of State outlines his disappointment that we do not have functioning devolution in Northern Ireland and I share that disappointment, but he knows acutely why the Government are not functioning in Northern Ireland. Instead of sharing his disappointment, can he tell us why, in the three weeks since the duty to call an election—or the past 10 months—there has been no fundamental, sincere or considered progress on resolving the Northern Ireland protocol?
Chris Heaton-Harris
I am afraid that it is unfair of the hon. Gentleman to say that. He and this Government are absolutely not commenting day-to-day about the talks between this Government and the European Commission. As both the Foreign Secretary and I have set out at the Dispatch Box, we will continue not to do that.
Simon Hoare
While there is probably never a good time to collapse Stormont, does my right hon. Friend agree that, at a time of pressing problems occasioned by a cost of living crisis and with all the concerns that affect all communities and both traditions across Northern Ireland, now is most certainly not the time to be depriving Northern Ireland of its elected representatives who serve the good people who put them there?
Chris Heaton-Harris
I thank my hon. Friend, the Chair of the Select Committee, for his point. Although I agree with him, I cannot put myself in the shoes of those who represent the different communities in Northern Ireland. I understand the views and the strongly held sentiment about the functioning of the Northern Ireland protocol and the concern that there is within the Unionist community. That has been borne out by polls across the piece.
Several hon. Members rose—
Chris Heaton-Harris
I feel that I have provoked all sorts of things. I hope that colleagues will forgive me if I take three interventions and then move on, because there is also a football game to get to at the end of the day.
Jim Shannon (Strangford) (DUP)
In Northern Ireland, 17% of people are in poverty, and 12% in absolute poverty; I understand what the Chair of the Select Committee is referring to when it comes to addressing that. The Government went through the legislation in this House to ensure that the money offered on the UK mainland is equal to that offered in Northern Ireland. If the Government move with some urgency to ensure that that happens—on energy prices and everything else—the fact that the Northern Ireland Assembly cannot operate today because of the Northern Ireland protocol should not in any way hold up help going to people who are very much in need.
Chris Heaton-Harris
But, unfortunately, it did. When Ministers were in place they were unable to help us with the money going through the system. Now, as per the responses to the urgent question and to the questions to the Secretary of State for Business, Energy and Industrial Strategy earlier, there are unbelievable difficulties in the UK Government doing what the hon. Member and I both want to happen.
Brandon Lewis (Great Yarmouth) (Con)
I thank my right hon. Friend for his generosity in taking interventions. He is quite right about the budgetary challenges facing the people in Northern Ireland at this time, with the economic structures and problems we are seeing, which is why it is so important that we see Stormont back up and running. We all know—this has been touched on already—why Stormont is not functioning, so does he agree that it is imperative that the European Union understands the strength of feelings in Northern Ireland, across communities but particularly in the Unionist community? Without my right hon. Friend commenting on the detailed negotiations, does he not agree that the European Union must show flexibility in allowing an agreement to be formed between it and the UK Government that will facilitate Stormont’s getting back up and running, especially with the 25th anniversary of the Good Friday agreement close upon us?
Chris Heaton-Harris
I thank my right hon. Friend for his wise words. I know, because I was present in some of the meetings, that he articulated those words directly to representatives of the European Commission when he was Secretary of State, and he is completely right in what he says.
Paul Girvan (South Antrim) (DUP)
I go back to the intervention by the Chair of the Northern Ireland Committee and state that, while the cost of living is affecting everyone in Northern Ireland, it is exacerbated by the protocol and the costs that are being added on to every single basket of shopping bought in Northern Ireland.
Chris Heaton-Harris
The hon. Gentleman makes a fair point that is well evidenced; that is why the protocol needs fixing.
I have separately set out in a written statement to this House how the Government intend to respond to the budgetary issues that have arisen in Northern Ireland. I do not intend to go into the detail of the budget now, but right hon. and hon. Members will see from the written statement just how difficult the fiscal situation in Northern Ireland is at present. The Government will be bringing forward a separate budget Bill in which more detail will be provided, and no doubt this House will want to consider that Bill particularly carefully.
Colum Eastwood (Foyle) (SDLP)
Does the Secretary of State agree that New Decade, New Approach contains many commitments, such as funding the Northlands Addiction Treatment Centre, the Magee university expansion and the Brandywell stadium—all in my constituency—and that in this new context they should not be seen as controversial but should be able to get funded even though we do not have Ministers in the Executive?
Chris Heaton-Harris
I believe I have just laid a written ministerial statement to give an update on how the Government are delivering on the commitments in the New Decade, New Approach paper. The hon. Gentleman is quite right that all these things can happen simultaneously or separately and at different speeds, and have done, but there is also a fundamental issue, which was noted at that time, with the protocol. This Bill, though, is about creating the conditions in which key decisions in Northern Ireland can be taken, including on the implementation of the budget, rather than the content of the budget that I was describing before the intervention.
I will briefly summarise the overall intention of the Bill before running through its provisions. At the outset, though, I must say that I am grateful to those on the Opposition Benches—all of them—for their co-operation in moving this Bill forward. Specifically, though I know I should perhaps save this for Third Reading, I thank the shadow Northern Ireland Secretary, the hon. Member for Hove (Peter Kyle), for the constructive and cross-party fashion in which he and others on the Opposition Front Bench have approached this Bill, both in this place and the other place. I am also grateful to him for speaking to me on this important Bill over the weekend and for speaking to my hon. Friend the Minister of State yesterday evening.
The Bill broadly seeks to do three main things. It retrospectively extends the period of Executive formation for two six-week periods. That means, subject to the agreement of this House and the other place, that if an Executive is not formed within those timeframes, the election duty placed on me will kick in after the second extension of six weeks, on 20 January 2023.
Stephen Farry (North Down) (Alliance)
I ask the Secretary of State to reflect on the disjoint between the timetable he is setting out today for restoration of the Executive and the current pace of negotiations with the European Union. Does he not recognise the need for him to build in some further flexibility, to avoid a situation where he has to call an election at a time when the negotiations are coming to a conclusion and potentially inside that tunnel, given that an election may be very prejudicial to securing a stable outcome and to getting the necessary compromise so that Northern Ireland can move forward?
Chris Heaton-Harris
I thank the hon. Gentleman for his intervention and for his message to me on the subject earlier. I completely understand the point he makes, but I am hopeful that we can do the work that needs to be done within the timeframe that we are setting down now.
Returning to the Bill, the second main thing it does is to clarify the decisions that civil servants in Northern Ireland Departments can take in the absence of Northern Ireland Ministers, so that decisions in crucial areas such as public sector spending and the maintenance of public services can continue to be taken in the absence of an Executive.
Dame Maria Miller (Basingstoke) (Con)
My right hon. Friend talked about the importance of public services; many of us in this House have been talking in particular about the provision of abortion services in Northern Ireland, which the Government made a very helpful statement on last month. Can he update the House on how those services are being put in place? Many want to ensure that the legislation we passed here about two years ago will lead to an improvement in provision for women in Northern Ireland.
Chris Heaton-Harris
I can give a brief update. Indeed the hon. Member for Walthamstow (Stella Creasy) tabled amendments on that matter earlier, so I believe she might want to come in at this point, and then I should be able to answer.
Stella Creasy (Walthamstow) (Lab/Co-op)
It is now 1,134 days since this House passed the Northern Ireland (Executive Formation etc) Act 2019 and 973 days since the Abortion (Northern Ireland) Regulations 2020 were laid to give effect to it. Women in Northern Ireland have been waiting patiently for safe, legal and local abortion services. Can the Secretary of State tell us how many more days he thinks it is acceptable to ask them to wait, now that he has the powers and the money to deliver those services? Would 90 days be enough, for example?
Chris Heaton-Harris
I thank both the hon. Lady and my right hon. Friend the Member for Basingstoke (Dame Maria Miller) for their questions. I can give some clarity on this now, and later the Minister of State will be able to give a bit more detail. My officials have been working closely with the Northern Ireland Department of Health and I have instructed the permanent secretary to commission abortion services in Northern Ireland. I am also ensuring that the required funding is allocated for those services, and funding will be ring-fenced in the Northern Ireland budget, as set out by my written ministerial statement of last week.
That will mean that, in line with my statutory duty, health and social care trusts will have both the assurance of commissioned service and the guarantee of funding for that service, allowing them to recruit and plan for the full roll-out of services that this House decided women should have access to. The hon. Member for Walthamstow asked about dates. This is a service that is sometimes controversial, but also unbelievably important, and appropriate recruitment and training of staff needs to take place. Her amendment, which I know is a probing amendment, mentions 28 days, but I hope I can demonstrate to her that recruitment is already starting and training is going to start.
The hon. Lady also mentioned the period of 90 days. I would like to think that most services will be at least en route to being delivered by that point in time, but, if I may, I intend to write to those hon. Members who might be interested, maybe on a monthly basis, to give continual updates so that the hon. Lady and my right hon. Friend the Member for Basingstoke can see what is happening and when.
Carla Lockhart (Upper Bann) (DUP)
The Secretary of State will be aware that since the introduction of the new legislation to Northern Ireland, more than 4,000 babies have been aborted in the womb. That is 4,000 lives lost—a stark difference from the 100,000 who are alive today because of the life-affirming laws that we have. He will be aware that 79% of people opposed that legislation. This is being forced on the people of Northern Ireland against their will, and yet he can find funding for it and not for other important things in Northern Ireland.
Chris Heaton-Harris
The hon. Lady and I have had this conversation before. I have a statutory duty to deliver that service and I will do so.
Lastly, the Bill provides for powers around the remuneration of Members of the Northern Ireland Assembly, meaning that I will be able to take action to amend their pay when they are unable to conduct the full range of the functions expected of them. The Bill also provides for a number of other measures, including on the regional rate and public appointments, that I will speak to shortly.
Taken together, the measures in the Bill will help to plug the governance gap that has emerged in Northern Ireland. We recognise that the Bill is a stopgap and is not intended to be a long-term solution to the issues that Northern Ireland faces; that is a matter for locally elected politicians.
I will now go through the clauses in turn to explain the Government’s rationale behind some of the policy choices we have made in this process. Clause 1 makes provision for an extension of the period for filling ministerial offices, as set out in the Northern Ireland Act 1998 and amended by the Northern Ireland (Ministers, Elections and Petitions of Concern) Act 2022—cannily nicknamed “MEPOC”. The clause retrospectively introduces a further six-week period during which an Executive can be formed. That means that the election duty previously placed on me from 28 October no longer applies and, through the Bill, would not apply again until 9 December 2022 at the earliest.
Clause 2 provides for a power to extend the Executive formation period by a further six weeks to 19 January 2023. That power is exercisable through a statutory instrument. I will just say a brief word about that, as I know that it is not necessarily conventional. The regulations made under clause 2 will not be subject to any parliamentary procedure— other than having to be laid after they are made—on the basis that the power is limited and exercisable only once. It is not a recurring power that allows me to extend the period for Executive formation indefinitely, but rather a very tightly drawn single further extension to a defined date.
All taken, the Government judge that this extension will afford political parties in Northern Ireland the time they need to get around the negotiating table, back to the Assembly and into the Executive. I have listened clearly and carefully to party leaders, who have all said publicly that now is not the time for a further Assembly election, and I have acted on those concerns. Right hon. and hon. Members with eagle eyes will note that the clause does not fully replicate previous legislation in that it does not provide for the extension or restoration of caretaker Ministers. The Government considered that, but we have come to the firm view that it would not have been appropriate to restore Ministers who left office on 28 October, even in a caretaker capacity. Instead, civil servants have been holding the tiller in Northern Ireland Departments since that date. They have done so admirably given the circumstances under which they have been working.
That brings me neatly to clauses 3 to 5, which clarify the decisions that Northern Ireland civil servants can take in the continued absence of an Executive. The Government have broadly mirrored the approach to these powers taken by the previous Administration but one in 2018, largely replicating the relevant provisions in the Northern Ireland (Executive Formation and Exercise of Functions) Act 2018. We recognise that precedent is helpful both to Parliament and to decision-makers themselves. Northern Ireland civil servants will therefore be provided with the certainty to take a limited set of decisions when it is in the public interest to do so. That will enable them to address key issues facing Northern Ireland right now: a sustainable budget, the cost of living and—importantly—the delivery of public services.
Chris Clarkson (Heywood and Middleton) (Con)
Conservatives believe that work should pay and that those who choose not to work should not be as well off. We are now hearing that civil servants will have to discharge some ministerial functions. The Secretary of State mentioned that he will have the power to vary the pay of MLAs. It will stick in lots of people’s throats that, during a cost of living crisis, MLAs are receiving full wages for doing half a job. Will he look at that urgently?
Chris Heaton-Harris
I absolutely will. Indeed, depending on the passage of the Bill through this House and the other place, when the power falls to me, I intend to act on it rapidly. I am fully aware that it is a heartfelt plea from the people of Northern Ireland that their politicians should be active in the Assembly and working on these issues—people are quite cross that they are not.
Ian Paisley
Is the Secretary of State equally deeply angry about those abstentionist MPs from Northern Ireland who get allowances and run offices but do not take their seats in this House, and is he prepared to take immediate action and amend his own activities today by removing those allowances? Will he be consistent on that matter?
Chris Heaton-Harris
The hon. Gentleman will be talking about Sinn Féin Members of Parliament. I guess I would compare their take-home pay, allowances and everything with his—it would not be the same. I am just essentially taking the same principle and using it in a slightly different way.
We do not, I am afraid, have the luxury of waiting for a restored Executive to take these key decisions. That is why it is right that we give civil servants the legal cover to keep things moving. To aid them in doing that, I will shortly publish draft guidance on taking decisions in the public interest and on the principles that should be taken into account in deciding whether or not to do so. Again, that mirrors the approach that was taken previously in 2018. Final guidance will be published after Royal Assent. We recognise, though, that this is not a long-term solution, and civil servants cannot be left to take decisions indefinitely. That is why these provisions will last for six months or until an Executive reforms—whichever is sooner.
Clauses 6 to 9 make provision for certain public appointments that would usually have to be made by, or require their approval of, Ministers. That largely mirrors provision made in the Northern Ireland (Executive Formation and Exercise of Functions) Act 2018. This is another sensible step and will ensure that key appointments, which are necessary to maintain governance and public confidence in the institutions in Northern Ireland, can still be made.
Clause 10 will allow me to do something that has just been mentioned: take action when it comes to the pay of Members of the Assembly—or MLAs, as they are usually known. At a time when taxpayers’ money, and indeed taxpayers themselves, are under enormous strain, it is simply not acceptable that MLAs continue to draw a full salary while unable to conduct the full range of functions for which they were elected. The clause will therefore allow me to amend the pay of MLAs in this and any future periods of inactivity, drawing on sections 47 and 48 of the Northern Ireland Act 1998.
Simon Hoare
Clearly, the vast majority of MLAs want Stormont up and running. They want to do 100% of their jobs seven days a week, rather than the 50% that they are able to do at the moment. Can my right hon. Friend assure me that he has robustly explored employment law—and if he has not, that he will do so—and that it would allow only for those who refuse to attend to have a pay cut? Those who wished to attend but could not because somebody was exercising their veto should not see their income reduced through no fault of their own.
Mr Gregory Campbell (East Londonderry) (DUP)
Like Sinn Féin did four years ago.
Chris Heaton-Harris
Amid the interesting debate that is going on across my shoulder, I can honestly say to the Chair of the Northern Ireland Affairs Committee, my hon. Friend the Member for North Dorset (Simon Hoare), that I have sought and received lots of advice on that very issue. It is judged that, legally, I would be in a very safe place to do exactly as I am doing, but to differentiate would put us into a different place whereby I could be legally challenged or, potentially, legally challenged.
Simon Hoare
As many Members have said, the Secretary of State is being very generous with his time. He said that he would run the risk of being judicially reviewed. All Ministers of the Crown in this place run that risk. May I urge him to think again, because the risk would be worth it given the situation we are in?
Chris Heaton-Harris
I think I might arrange for my hon. Friend a meeting with my Department’s lawyers, who will happily take him through the issues, the various risks that they are running at this point in time, and the number of cases that we have.
Sir Jeffrey M. Donaldson (Lagan Valley) (DUP)
I assure the hon. Member for North Dorset (Simon Hoare) that if he has his way, and believes that that will make any difference whatever to the principled stand that my party is taking based on the mandate we were given in the Assembly election, he is gravely mistaken.
Chris Heaton-Harris
I seem to be in the middle of an argument between two great gentlemen of this House, so I will just tactfully duck and continue with my contribution, because I know that people would like me to move on.
Any determination made by me once the provisions come into force will, I anticipate, take into account the independent analysis produced in the previous political impasse. Again, there is precedent for these powers—the Government took similar action in 2018 to deliver recommendations produced by that analysis.
However, there is an important difference that the House should note: I will retain the power to set MLA pay in future instances where the Assembly is unable to elect a Speaker and deputies following an election. The power would then snap back to the current arrangement when those roles are filled, the Assembly can conduct business and MLAs are fulfilling the full range of functions expected of them. That will mean the Government do not need to return to the House on this matter if the institutions cease to function in the future, which, of course, I hope will not be the case.
Julian Smith (Skipton and Ripon) (Con)
It is worth confirming to the House that all MLAs, from whatever party—even if some of those parties do not want to be part of the Executive—are working on their constituency work, which is difficult and particularly busy at the moment. We have the biggest and most diverse set of MLAs in the Assembly’s history, and it is worth speaking up for that group.
Chris Heaton-Harris
I thank my right hon. Friend, the former Secretary of State for doing exactly that. I am fully aware that MLAs, whatever their political stance or party, do good work in their constituencies, which is why the approach I have set out today is the one I hope to take. I am grateful to my hon. Friend the Member for North Dorset, the Chair of the Select Committee, who has tabled a number of amendments on MLA pay that seek to strengthen provisions in the Bill. I know that he has spoken to the Minister of State, my hon. Friend the Member for Wycombe (Mr Baker), and I am sure there will be a bit more of this debate in Committee.
Finally, I draw the House’s attention to a few other provisions in the Bill. Clause 11 confers on me a power to set through regulations the regional domestic and non-domestic rate in Northern Ireland for the financial year ending 31 March 2024. Those rates must be set for every financial year. The regional rate is normally set by the Northern Ireland Department of Finance by way of affirmative order in the Northern Ireland Assembly and comprises rates charged to domestic and non-domestic properties in Northern Ireland. In the continued absence of an Assembly and Executive, this power is an insurance policy where there is continued stasis after a further election, and it will allow the UK Government to set these rates as required. Clauses 12 to 15 are minor and consequential.
No Northern Ireland Secretary would want to introduce a Bill of this nature. As we approach the 25th anniversary of the Belfast/Good Friday agreement, we should be celebrating the progress that Northern Ireland has made since that historic agreement, which is undeniably substantial. As I said in my statement to Parliament, this Government will always seek to implement, maintain and protect the Belfast/Good Friday agreement. This Bill will help to do that, providing short-term cover to plug the governance gap in Northern Ireland, but it is not a long-term solution to the issues with which Northern Ireland is grappling. Those are for a newly reconstituted Northern Ireland Executive and Assembly to solve.
Mr Laurence Robertson (Tewkesbury) (Con)
My right hon. Friend is right to introduce this Bill, which I am happy to support, but with the time that he is buying with the Bill, will he make sure that the Northern Ireland Protocol Bill is taken through the Lords rather more quickly than it is presently? That will give him strength in the negotiations with the European Union and then we can get the whole matter sorted properly.
Chris Heaton-Harris
In my former role as Government Chief Whip, this place having any sway over what happened at the other end of the building would have been a pleasurable occurrence. I cannot give my hon. Friend that assurance, but I can assure him that a huge amount of work is going on in that area.
The people of Northern Ireland want their elected representatives to get round the table again and get back to power-sharing. I hope the measures in this Bill go some way to providing the space and time for that to happen, but if the Executive and Assembly are to return, it will require the determination, creativity and compromise of those who hold the keys. I know they are up to the task, but for now I commend this Bill to the House.
Peter Kyle (Hove) (Lab)
I thank the Secretary of State for setting out the measures in the Bill. I was clear when he introduced it that we would not oppose this legislation.
There is sufficient consensus in Northern Ireland and outside it that elections this winter will not help to break the political deadlock. In many ways, this emergency legislation is the least worst of the options open to the Secretary of State. I emphasise again that Northern Ireland is a valued part of the United Kingdom, and restoring power-sharing should be one of the top priorities of No. 10. The longer the Executive are collapsed, the hollower the 25th anniversary of the Belfast/Good Friday agreement next year will be. Power sharing is the essential and hard-won outcome of that agreement. It is incumbent on the UK Government and the European Union to engage with the concerns of the Unionist community that led to its withdrawal from the institutions. Equally, any solution that emerges must be acceptable to the nationalist community to allow power sharing to resume.
There is also a growing part of Northern Ireland’s population that identifies as neither nationalist nor Unionist. In May, the cross-community Alliance party achieved its best ever results in the Assembly election. Balancing these relationships is the nature of the UK Government’s role as the honest broker for Northern Ireland that Northern Ireland deserves. I was encouraged to hear that the Secretary of State made the decision to delay elections after, in his own words,
“engaging widely in Northern Ireland with the parties, with businesses, with community representatives and with members of the public. I have also spoken with other international interlocutors.”—[Official Report, 9 November 2022; Vol. 722, c. 278.]
The need to mark a new chapter in how the Government deal with Northern Ireland is profound, and I hope this marks that point.
To date, there is a fundamental contradiction at the heart of the Government’s approach to Northern Ireland, which is perfectly illustrated by two Bills affecting Northern Ireland that are going through Parliament at this moment. The Northern Ireland Protocol Bill has as its central justification the lost consent of one community for the protocol. The second, the Northern Ireland Troubles (Legacy and Reconciliation) Bill, not only has no consent of any community, but is actively opposed by all communities, the Northern Ireland Human Rights Commission and every single victims group, yet the Government obstinately plough on. This Government care about the concerns of Northern Ireland when it suits their needs, but sadly overlook them when it does not. That is a recipe for dysfunction, and dysfunction is what has been delivered.
Labour will always take a constructive approach to Northern Ireland, and one way of trying to make progress would be for the Prime Minister to step in and use his great office. Tony Blair’s first visit outside of London as Prime Minister was to Belfast. He visited five times in his first year as Premier. He did it to show commitment to Northern Ireland. It is revealing that the current Prime Minister has not yet made the short trip himself since he came to power, but in that time has managed to go to Egypt and Indonesia.
The Minister of State, Northern Ireland Office (Mr Steve Baker)
He went to the conference in Blackpool.
Peter Kyle
The shadow—sorry, the soon to be shadow Minister intervenes to point out that the Prime Minister went to the conference in Blackpool, which he did, and we are very grateful for it. I hope that he will soon make time to go to Northern Ireland himself and perhaps use the power of his office to convene multi-party talks and get some progress over there. This matters, because it was a Conservative Prime Minister who personally championed, negotiated and signed the protocol into international treaty. It is not unreasonable to expect it to take a similar level of involvement to change it.
The Bill before us allows the Secretary of State to delay elections, but it does not explain how the Government will use the extra time they are buying themselves. The first deadline in the Bill for restoring the Executive is 8 December. That is next week. It is unclear how the Government have used the period from 28 October to 8 December to find solutions to restore the Executive. Sadly, I can go back even further and say that it is not clear how the Government have used the entire six months since the Assembly elections. For months the Executive have been collapsed, and there was no visit from the Tory Prime Minister and no multi-party talks in Downing Street. There was not even a statement to Parliament. I would like to think that, had the current Secretary of State been in place back then, he would have done so, because he has respected the House by giving multiple statements since, for which I am grateful. It is a shame that there was no such similar action in that period.
The most recent update on the Northern Ireland protocol negotiations came from the Foreign Secretary during his appearance at the European Scrutiny Committee on 15 November. He said:
“I do not want people to be defeatist, but I also do not want people to run away with the idea that we are just on the cusp of some amazing breakthrough”.
He went on to say that he wanted to “manage expectations.” The Bill gives the Northern Ireland Secretary the power to extend the deadline by a further six weeks to 19 January, but no further. It is not clear whether the Foreign Secretary is bluffing or the deadlines in the Bill are too short.
That matters, because over the next few months, the Government have built up hopes that a deal is imminent. The delegated powers memorandum says of the decision by the Secretary of State:
“Parliament will have an opportunity during the passage of the Bill to scrutinise fully his likely decision and the basis on which he will make it. Any decision he takes will necessarily have to be made very shortly afterwards.”
I hope that when he responds to the debate the Minister is crystal clear on this. He must explain what progress has been made to reach a negotiated solution on the protocol and on restoring the Executive.
Other powers that the Secretary of State gains through the Bill include the ability to make public appointments, cut Assembly Members’ pay and set regional rates. We have been assured that the clauses relating to those measures are all based on previous legislation. Public appointments and rate setting are necessary powers for practical reasons. I hope that Members all agree with the need for the appointment of a Northern Ireland Commissioner for Children and Young People and of commissioners for the Northern Ireland Judicial Appointments Commission. Setting regional rates will provide businesses with certainty. It is also fine to cut Assembly Members’ pay, as that has been done before. Northern Ireland is suffering more from the cost of living crisis than any other part of the country, so I understand why residents would want that part of the Bill to be introduced.
Ian Paisley
I want to give the hon. Gentleman time to outline issues that have alarmed him. Does what has happened in the criminal courts in Dublin, including the Hutch criminal gang trial, create or provoke alarm in the Labour party? He will recall that, historically, whenever the IRA was involved in a major bank robbery, such as the Northern Bank robbery, and whenever its activists colluded with FARC guerrillas, that brought political institutions to a shuddering halt. Does he believe that the implications of what has been revealed in the Hutch criminal gang trial will have another shuddering impact on political activity?
Peter Kyle
The hon. Gentleman raises extremely serious issues, which relate to the Republic of Ireland and an ongoing trial. I watch that trial closely and await its outcome. I do not think that it would be appropriate at this point to comment on a trial that is under way, but I am grateful for his intervention.
Significantly, the Bill gives civil servants greater decision-making powers to allow public services to function. These decisions will be based on guidance issued by the Secretary of State. However, we should be aware that we are asking a lot of civil servants. Yesterday, Jayne Brady, head of the Northern Ireland civil service, gave an interview in which she said:
“We are in a period of keeping the system running, compounded by a requirement to make savings. But equally we won’t be moving and addressing those big systemic issues. That is why it is so important that we get the Executive up and running.”
I want to pay tribute to civil servants, who will undoubtedly do their best in the challenging weeks that lie ahead, but the big systemic issues require political leadership and political decision making.
Last week, I had the pleasure of visiting beautiful Enniskillen, where I witnessed first hand some of those acute challenges. In the local hospital, I saw outstanding facilities that are going unused because of the struggle to recruit the clinicians needed to keep services going. I spoke to nurses whose pay deals have been agreed by Ministers but are blocked by the absence of an Executive. Once again, nurses’ pay in Northern Ireland has diverged from pay in other parts of the United Kingdom. Those nurses are essential in tackling the longest waiting lists in the UK. Those issues need to be resolved, and they need to be resolved quickly.
I also want to put on record my thanks to the Police Service of Northern Ireland, whose officers have had to deal with recent attempts on their lives by terrorists. It is worrying that in these times there has been a partial freeze on the recruitment of new officers due to the lack of a budget. Northern Ireland needs a restored Executive so that decisions in such crucial areas can be made locally, instead of here in Westminster. The Government must use the extra time that the Bill gives them to make concrete progress. After months of uncertainty and neglect, it is the very least that people of Northern Ireland deserve.
Simon Hoare (North Dorset) (Con)
It is a pleasure to follow the shadow Secretary of State, the hon. Member for Hove (Peter Kyle). May I begin by thanking Government Ministers, particularly my hon. Friend the Minister of State and his officials for many briefings and conversations that he has facilitated for the Select Committee on Northern Ireland Affairs and for me personally? That really is appreciated. There are rumours of a bromance breaking out between my hon. Friend and me, but it is nice that we are working together so closely.
Many, if not all, Members of Parliament—I would probably say all Members and everyone in the country at large—would wish the doing of politics to be normalised in Northern Ireland, which is an integral part of the United Kingdom, yet here we are again, having to deal with pressing matters through the use of emergency legislation. That is a real sadness, and I contend that such a situation would not be tolerated in any other part of the UK. At some point, we have to try to find a focused way of trying to deliver normalised politics.
I fear—and I understand precisely why the Secretary of State and the Government have introduced the Bill, which has my full support—that we are falling into a trap. The functioning and delivery of devolution, and the changes that many people would like to see delivered to the protocol, are two distinct, divorced and separate workstreams. We should not stand idly by and allow their conflation in the minds of people across the country. In 2022, no party worthy of that name, against the pressing economic backdrop that we face, should ever have a right to veto or walk away at any time, as I said earlier, still less now. I listened to the intervention from the right hon. Member for Lagan Valley (Sir Jeffrey M. Donaldson), the leader of the Democratic Unionist party, about whether or not the reduction of pay was intended to drive, cajole or whip his party back to Stormont. I do not see it that way, but it is the clearest signal possible to members of the public that Parliament gets it and understands what full public service is. If people decide to exercise the veto which currently exists, clearly there should be an opportunity to deliver better value to the taxpayer by reducing the remuneration package. I have always been keen and hot on that, and I hope that the Secretary of State exercises that power under clause 10, which uses the word “may”. However, I very much hope that he does.
I welcome what my right hon. Friend the Secretary of State has said in recent weeks about the process or impetus that could spur a review of the rubric on which we base the formulation and establishment of the Executive. I paraphrase, but he has said in terms that he would respond if there were overtures from the parties in Northern Ireland, from the grassroots up. That is probably the right approach, and I urge my right hon. Friend—he probably needs no urging—should those overtures be made, to respond positively to try to address them as quickly as possible.
Clause 10 says that the Secretary of State “may” make a determination; I think that he has to and that it should be done speedily. I know that many people wish that the law allowed him to differentiate between the MLAs who want to be in Stormont doing their job and those who have decided not to for reasons that are perfectly respectable. As we all know, however, any decisions that we take do and must have consequences.
Mr Gregory Campbell
The Chair of the Northern Ireland Affairs Committee alludes to differentiating between MLAs who want to do their job and those who do not. Does he make the same differentiation between MPs who want to do their job and those who do not, but still get remunerated?
Simon Hoare
Yes, I do. At the end of the day, irrespective of which forum people are working in, that is taxpayers’ money. If one is prepared to do only a portion of the job, there should be implications for that. A teacher could not say, “I’m only going to teach boys called George or girls called Helen, and everybody else can go hang,” and expect the full package of remuneration and all the benefits. Likewise—again, I am grateful for the Minister of State’s briefing—I wish that clause 10(5) were not in the Bill, although I understand the complexities, because there should be knock-on implications for pensions as well. That needs to be looked at in due course.
This is a regrettable but understandable Bill. As the Secretary of State said, no Secretary of State would want to introduce this kind of legislation. Next year is the 25th anniversary of the Belfast/Good Friday agreement—we say that so flippantly; it has been hard-baked into our DNA as if it has always been there. As well as providing a moment for celebration and looking to the future, that provides us with an opportunity to look to the past and what led to its creation. We must never take its benefits for granted. Is it perfect? No. Does it deliver the process that we had hoped for at the speed that we had intended? Of course not, but let us not take it for granted. Let us all put our shoulders to the wheel to make sure that, across the communities, we can celebrate the huge strides for peace that it presented.
Richard Thomson (Gordon) (SNP)
As I said in response to the Secretary of State’s statement on 9 November, my party has made clear its view that the best place for Members of the Legislative Assembly to be, and where we believe that the overwhelming majority of people in Northern Ireland would expect them to be, is at work in Stormont holding a functioning Executive to account as they get on with overseeing the delivery of vital public services. As I also said, and still firmly believe, although it certainly does not serve the best interests of the people of Northern Ireland for an Executive not to be in place, it would also not serve their interests to hold another election at this point that would further embed already entrenched positions. We therefore welcome the Bill as a means of postponing an election that nobody wants and that would serve no purpose, and as a means of allowing the essential functions of Government to proceed in the interim, pending, we hope, the formation of an Executive.
Northern Ireland has, of course, been in the unfortunate position of both its Governments being paralysed by inaction in the last few months, albeit for different reasons. We hope that the Bill will allow for some long-overdue negotiations to take place about amending the terms on which the UK Government chose to leave the EU. We are all clear about why we are here, and that sits at the back of it, because that is what led the DUP to refuse to form an Administration based on the Northern Ireland protocol, which it considers to represent the undermining of Northern Ireland’s place in the Union.
We are clear, as other hon. Members have been in previous debates on the subject, that the protocol was not anybody’s favoured option. It was certainly not the Scottish National party’s preferred way; we saw considerable advantages in remaining aligned with the single market and the customs union, which would have meant that these problems simply did not arise. The protocol was, however, an unloved solution to protect the people of Northern Ireland from the consequences of the form of Brexit that was chosen by the UK Government in line with their negotiating objectives at the time.
Things froze at that point, but I was pleased to note at the British-Irish Association conference in Oxford that some fruitful discussions appeared to happen behind the scenes that started to melt some of that ice. Some of the Minister of State’s public reflections and observations on how we have got to where we are have been particularly helpful in re-establishing a basis for discussions. We welcome that and wish the UK Government well in their attempts to renegotiate the protocol; we have never at any point criticised them for having that objective, but it is now time to get on and do it.
I certainly understand the desire to dock MLA salaries, but it seems to be little more than a gesture. It is not going to provide the motive force that puts anyone back to work, because we can all see the political issues at the back of this. It might be more productive if Ministers proposed an amendment to their own salaries if they are unable to negotiate a suitable agreement within the time they have now allowed themselves. [Interruption.] That seems to have started a discussion; I will let it rattle around and see where it ends up.
Our views on Brexit and the diminished position it has left not just Scotland but all parts of the UK in are unchanged, but any new settlement on the protocol cannot only be about Northern Ireland: a revised settlement will only be a better one if it resolves issues in trade both between Great Britain and Northern Ireland and between the UK and the European Union. In that regard, while supporting this Bill, we urge the UK Government to move at pace.
Julian Smith (Skipton and Ripon) (Con)
I support this proposed legislation. We had the bandages in New Decade, New Approach of keeping Ministers in place after the Executive fell, and we are now on to the elastoplast. It is worth stressing the limited nature of this Bill. There are very difficult choices that civil servants in Northern Ireland are not able to take. There are big challenges in all sorts of areas, including health, with long waiting lists; education, with hundreds of millions of pounds going in the wrong direction on the budget; foreign direct investment, where Northern Ireland has a great reputation but not having Ministers has an impact; and community groups and other organisations, which are desperate for political direction.
It is worth stressing to the House that there is the current period of not having an Executive, but there have also been other periods. One party is getting a lot of heat this time, but there were other parties involved in the past, and the implication in Northern Ireland when this happens is severe: if we did not have Westminster and instead just had civil servants in Whitehall taking the decisions, people in England, Wales and Scotland would be up in arms. So I want to emphasise that the implications of not having political decision making in Northern Ireland are very significant.
We have heard a lot about restoring the Executive. I was lucky enough to work with Northern Ireland parties in 2019-20 to restore the Executive then, and I took huge inspiration from the quality of politicians in Northern Ireland and the constructiveness and good will there at that time despite strong crosswinds. There are attempts to think about ways to run a negotiation to restore the Executive separately from the issue of the protocol, but that ship has sailed, because for one group and community in Northern Ireland fixing the protocol is key to the Executive getting back up and running. I have had strong views on how we have got here, on how previous Prime Ministers have handled this and on other routes that could have been taken, but the polling shows there is strong support for the Democratic Unionist party position among a big chunk of citizens in Northern Ireland.
We have heard that the new Prime Minister went to Blackpool, and I think he has developed new trust and new connections, and restored connections with Ireland, France and other European countries. In my view, however, we are now at a point where we really need to appeal to the EU to think again about how it is viewing this negotiation. There is some frustration—well, huge frustration—particularly about how the Conservative party has conducted these negotiations over the past couple of years, and I suspect that many of those complaints are correct, but we now need this.
We now need the EU to look back at what it did in Northern Ireland. It set up a taskforce, with multiple reports and multiple streams of investment. It invested in the Peace bridge in Derry, and it invested in the Peace Plus initiative. It had the widest set of co-ordinated activity in the European Commission on this particular vulnerable part of the EU. It thought very carefully and worked very hard to bring stability to Northern Ireland, and we now have one community that needs change to happen to get back to the restored settlement that is such a key part of the GFA.
My appeal to the EU is to think again about how it is going about this. Northern Ireland deals, in my experience, are not great on lots of legal detail, lots of bold paragraphs and lots of black and white. Instead, they are really based on compromise, fudge and flexibility. Whether it is two lanes, two approaches or different approaches to EU goods and NI goods, whether it is providing options to businesses in Northern Ireland about regulatory rules, or whether it is taking the European Court of Justice away from the very front of this deal to some distance in the background, all these things are achievable.
Those are all things on which the EU has recognised the uniqueness of Northern Ireland, with the very limited impact its trade and the risk at the border have on the single market. In this 25th year of the GFA, one community needs these changes to take place. We have a Prime Minister who is really trying to reset this relationship, and we now need to go for it. We now need to really encourage the EU to think about this differently and to work intensively at a political level to resolve this, because it is only through the resetting of the protocol situation that my colleagues in the DUP will come forward and restore the Executive. We can debate all we want whether that is good, and whether they are right or wrong, but that is the situation.
In any negotiation, one has to identify the realities, and the reality is that we need significant reform of the protocol at every level, with the EU leaning in on why that is so important. At a time of all this conflict across the broader European continent, it would be a tragedy should the EU not be flexible on the best possible success story in Northern Ireland. I realise this is a debate about Executive formation, but Executive formation in Northern Ireland comes from protocol renegotiation, and protocol renegotiation comes from the EU having some amnesia about its views on the Conservative party position on Brexit and moving forward in the best interests of the citizens of Northern Ireland.
Sir Jeffrey M. Donaldson (Lagan Valley) (DUP)
It is a pleasure to follow the right hon. Member for Skipton and Ripon (Julian Smith). We fondly recall his facilitation of the talks immediately after the general election in 2019 and the New Decade, New Approach agreement that opened the door for the restoration of the devolved institutions in Northern Ireland, and we thank him for his continuing interest.
I recognise that the Secretary of State is mandated by legislation to bring forward the Bill, and I think that neither he nor I want to be in this position. Let me be clear that the Democratic Unionist party wants to be back in a functioning Executive. It wants to be dealing with the issues that matter to our constituents. Our MLAs stood for election in May, and they sought a mandate from the people of Northern Ireland. That mandate was clear. I sat in TV studios in Belfast, I sat in radio studios in Belfast and I was interviewed by the print media in Belfast and made it absolutely clear that we would not nominate Ministers to an Executive until decisive action had been taken to address the difficulties created by the Northern Ireland protocol. There was no ambiguity on the part of my party about where it stood and the mandate that it sought.
I say gently to the hon. Member for North Dorset (Simon Hoare), the Chair of the Northern Ireland Affairs Committee that he may wish to punish us because we sought a mandate from the people for the stance that we are now taking, but I would like to see him, as Chair of the Committee, adopting a more conciliatory approach, as the right hon. Member for Skipton and Ripon (Julian Smith) did, which recognises the very serious concerns that Unionists have about the protocol. I am not prepared to nominate Ministers to an Executive where a Unionist Minister is required to implement a protocol that every day harms our place in the United Kingdom. It vexes me that the hon. Member for North Dorset does not get that. He does not understand it and has not sought to understand it. In my time as party leader, he and I have not had an honest conversation with each other about this issue. I would welcome the opportunity to explain to him why it is important to my party that it is resolved.
When I was elected leader of the DUP, I set out very clearly on 1 July 2021 the course of action that we would take. The Government published their Command Paper in July 2021. We welcomed the commitments that the Government gave in that Command Paper to address the real problems that the protocol has created. On the foot of that Command Paper, I outlined seven tests based on the commitments made by the Government of the United Kingdom—they were not tests that I had created—to address the problems with the protocol. That, again, was in July/August 2021.
In September last year, I again warned that if the Government and the EU were not able to agree on measures to resolve the problems created by the protocol, there would come a moment when it would no longer be tenable for my party to remain in an Executive. Why is that the case? In the New Decade, New Approach agreement, which was the basis on which devolution was restored, a number of commitments were made by all parties to that agreement. It is a fact that the one single remaining issue that has not been resolved, and which is a commitment by the UK Government in New Decade, New Approach, is restoring Northern Ireland’s place in the UK internal market. That commitment has not been delivered. That was made at the beginning of 2020 and we are now almost at the end of 2022, almost three years after we received that commitment from the Government, and it has not been delivered.
I welcome the publication of the Northern Ireland Protocol Bill. I believe that that Bill takes us in strides towards achieving the objective of restoring Northern Ireland’s place in the UK internal market, but it has not been delivered. The Bill is now sitting in the House of Lords, and we do not have a date for when Report will occur in the other place. We do not know what the timetable is for the Bill eventually gaining Royal Assent. It is and remains an outstanding commitment by the UK Government that has not been delivered, and that was the basis on which my party signed up to New Decade, New Approach.
Notwithstanding that, all the other main commitments are being delivered, including recently the Identity and Language (Northern Ireland) Bill, which was a key commitment made by the UK Government—and, I accept, others—in that agreement. That has been delivered, notably before the proposed date of the Assembly election. The Secretary of State has now quite rightly extended that date, because an election at this stage will not solve the problem.
That is what we are looking for: a solution. That is what we need. I say—again, respectfully—to the Chair of the Northern Ireland Affairs Committee that it would be good to hear him talk about solutions, rather than focusing on punishing people who have a real problem with the protocol and who have a mandate from the people who voted for them to take the stand that they are now taking.
Jim Shannon
On that point, that mandate was created in May of this year—a very clear mandate for the DUP to be the largest Unionist party. Since then, the opinion polls in Northern Ireland have shown a greater mandate for our party, because more and more people of the Unionist tradition and across Northern Ireland see the Northern Ireland Protocol Bill as the solution that will sort this matter out. If that does not happen, everyone in this House has to be aware that opinions are hardening, especially on the Unionist side, and they cannot be ignored.
Sir Jeffrey M. Donaldson
I thank my hon. Friend for his intervention.
I agree entirely with the right hon. Member for Skipton and Ripon: although the Government have not yet been able to deliver on their commitment to restore Northern Ireland’s place within the UK internal market, the biggest culprit in all of this is the European Union. The European Union was formed and founded on the basis that developing consensus in Europe was preferable in order to avoid conflict—that was its original concept. Two terrible world wars had absolutely destroyed Europe, with millions of lives lost, and there was a genuine desire on the part of many European leaders to develop a basis for working and co-existing together through consensus to avoid conflict.
The principle of consensus is central to this discussion. Since 1972 and the collapse of the then Northern Ireland Government, every single Government in this House have made clear that power can only be devolved to institutions in Northern Ireland on the basis of power sharing—a cross-community consensus. I was a Member of the Northern Ireland Assembly during the mandate from 1982 to 1986, and the hon. Member for Belfast South (Claire Hanna) will recall that the SDLP refused to take their seats in that Assembly. They did so on the basis that they would not enter any devolved legislature in Northern Ireland unless an agreement had been established on the basis of power sharing. That has been the case ever since: it is accepted that in a divided society such as Northern Ireland, only a cross-community consensus offers the basis for stable government. After the Good Friday or Belfast agreement, we worked hard from 1998 until 2007 to create the conditions in which that stable, cross-community, consensus-style government could be delivered, and it was created. For 10 years, from 2007 to 2017, we had a stable devolved Government in Northern Ireland, which then collapsed in 2017 when Sinn Féin withdrew.
It concerns me when people talk about the need to normalise politics in Northern Ireland—what does that mean? Does it mean majority rule? Does it mean excluding one section of the community? That fundamentally will not work, and I say that as a Unionist, part of a tradition that held the majority in Northern Ireland for very many years. Now, as the hon. Member for North Dorset has reminded us, we have three groupings. There is no majority in Northern Ireland, in the sense that although support for the Union remains the position of a majority of the people of Northern Ireland, the parties in the Northern Ireland Assembly that they vote for belong to three different political groupings: Unionist, nationalist, and other. However, the idea that an Executive can be created that excludes the largest grouping—the Unionists—simply does not wash.
If we are going to celebrate the 25th anniversary of the Belfast agreement, we have to accept and recognise that the principle of consensus is the way forward. As the Secretary of State acknowledged, that consensus on the protocol does not exist. On Thursday, I think, the Supreme Court will rule on the case that has been brought in relation to the Northern Ireland protocol. However, the High Court and the Court of Appeal in Northern Ireland have already ruled that the protocol supersedes article 6 of the Act of Union.
Article 6 gives the people of Northern Ireland the right to trade freely with the rest of this United Kingdom. It is the embodiment of the economic Union—this is not just a political Union, but an economic Union—and article 6 says to the citizens of Northern Ireland that they have the right to trade without barriers with the rest of the United Kingdom. As the High Court and the Court of Appeal have confirmed, the protocol creates barriers to trade between Northern Ireland and Great Britain. It subjugates the Act of Union. For us as Unionists, that represents a fundamental change in our constitutional status as part of the United Kingdom, yet we are expected to suck it up and operate political institutions that implement that change—that impose barriers to trade in our country. We are simply meant to accept that that is the way it is, but I am sorry, that is not the way it is. My party will not be in a position where it implements measures that harm our place in the United Kingdom and create barriers to trade with the rest of our country. We will not do that, which is why the protocol needs to be resolved. It affects trade.
I understand that His Majesty’s Revenue and Customs is proposing a pilot scheme, to be introduced in conjunction with Fujitsu, that would seek to digitise arrangements for checking the movement of goods between Great Britain and Northern Ireland. In other words, it would digitise the Irish sea border. Let me absolutely clear: the digitisation of the Irish sea border does not remove it. Tinkering around the edges of the protocol will not resolve the problems that it creates. The EU needs to understand that.
Last week, the Prime Minister spoke with great clarity when he was challenged on a story that appeared in The Sunday Times stating that the UK Government were prepared to consider the Swiss model as a way forward for our trading relationship with the EU. The Prime Minister said that the UK will not be aligning with EU laws. When we met him that evening, I reminded him that not only is Northern Ireland aligned with EU laws, but we are subject to them. Our ability to trade with the rest of our country is subject to legislation over which we have no control and on which we have no say. More than 300 areas of law govern the way we trade with the rest of the United Kingdom and we have no say on them.
Simon Hoare
The right hon. Member referred to digitalisation and Fujitsu. I can recall, as I am sure he can, that many on the DUP Bench kept referring during the passage of various bits of legislation to the evolving nature of IT and digital as a way of providing that light, invisible touch to deliver something. The IT companies have caught up and are providing those solutions, or are certainly evolving them with HMRC, so I do not understand why a digital solution suddenly has to be taken off the table as unacceptable.
Sir Jeffrey M. Donaldson
I am happy to offer clarity to the Chairman of the Select Committee. If the digitisation is used to check the movement of goods from Great Britain to Northern Ireland and into the European Union, then yes, anything that makes that a smooth operation and provides the EU with the data it needs to satisfy itself that the integrity of the single market is being protected is fine. But why do my constituents need digitisation for the movement of goods that they purchase at a Sainsbury’s supermarket at Sprucefield in my constituency? Sainsbury’s does not have any supermarkets in the Republic of Ireland; there is therefore no risk of those goods travelling into the Republic of Ireland. Why do we need digital technology to monitor the movement of goods from the Sainsbury’s depot in London to the Sainsbury’s store at Sprucefield?
Simon Hoare
I think we all take the point about Sainsbury’s, but may I respectfully say to the right hon. Gentleman that what he says sounds very much like a moving of the goalposts? When he and his party colleagues were advocating invisible, light digital solutions, I paid very keen attention. In all those debates and Select Committee sessions, his party colleagues’ voices were heard, so we all knew the DUP’s position, but I did not hear that distinction being made; it was about a digital solution for everything. It suggests to me that with a digital solution having been on the cusp of delivery, it is now not quite good enough and the goalposts are being moved still further.
Sir Jeffrey M. Donaldson
I assure the hon. Member that our position has been absolutely consistent. We have said from day one—and this is why we voted against the protocol at the outset—that we do not believe that there should be regulatory barriers on the movement of goods between Great Britain and Northern Ireland when they are remaining within the UK internal market.
I say to the Chairman of the Select Committee that the New Decade, New Approach agreement is very specific. It talks about restoring Northern Ireland’s place within the UK internal market. What does that mean? It means that there should not be regulatory barriers to trade on the movement of goods that travel between Great Britain and Northern Ireland and remain within the United Kingdom. The Democratic Unionist party has never, at any stage, advocated that there should be an Irish sea border on the movement of goods that remain within the UK internal market. That has never been our position.
I simply say to the hon. Member that, yes, I am all for using technology. I have consistently argued that technology can help us where goods are moving through Northern Ireland and into the Republic of Ireland, because that, in essence, is the problem—
Mr Deputy Speaker (Mr Nigel Evans)
Order. Interesting and important as this is, let us have a look at the scope of the Bill. Perhaps we can now return to the Bill before the House.
Sir Jeffrey M. Donaldson
Mr Deputy Speaker, the scope of the Bill is about the government of Northern Ireland. If the government of Northern Ireland cannot function because of the protocol, we need to identify the problems that the protocol is creating.
I say to the Secretary of State and the Government that I think the United Kingdom has been accommodating in its negotiating objectives, as have we. The UK Government and Unionists both accepted from the outset of the debate that there could not be a hard border on the island of Ireland. Let us really think about that for a moment. The United Kingdom accepted, and we accepted, that using the place where customs checks normally take place, which is on the international frontier, would be disruptive to the political process and to the co-operation required to operate the political institutions in Northern Ireland—and what did the European Union do? It pocketed that accommodation and drove for an Irish sea border that it knew full well would have the effect on the Unionist community that a hard border would have on the nationalist community. I say it again: I agree with the right hon. Member for Skipton and Ripon that the European Union has a responsibility to put right what was done wrong in relation to the protocol.
Karin Smyth (Bristol South) (Lab)
The right hon. Gentleman and I are both members of the EU-UK Parliamentary Assembly, which met recently to highlight our current problems. He and I may disagree on this, but it was the then British Prime Minister, the right hon. Member for Uxbridge and South Ruislip (Boris Johnson), who actually proposed the Northern Ireland Protocol Bill as a solution to the problem that the Government had got themselves into, and I think we should be laying the blame squarely there.
The issue, as was said in the Parliamentary Assembly and as we all know, is problematic now, but the real problem for future trust is the future relationship. We have still not heard from the UK Government—from one voice in the Conservative party—what sort of realignments, changes and newfound freedoms they want, and that is going to create more problems on the island of Ireland, for all communities. It would be helpful if we could hear from the Government how they see the future relationship operating once we get through the current one. We are not that far apart at the moment, but the fear is that we will be very far apart in the not so distant future.
Sir Jeffrey M. Donaldson
The hon. Lady has made an important point. Let me say at this stage that I applaud the Government for introducing the Northern Ireland Protocol Bill, because somebody had to do something. Somebody had to make the first move, and the Bill has at least brought the European Union to the point at which they are back at the negotiating table, and perhaps adopting a more realistic approach. However, we have yet to see that manifest itself in the form of agreement, and we need to see progress being made.
Why is progress important? Progress is important because coming down the track is a major piece of legislation which will, in my opinion, greatly exacerbate the current difficulty: the Retained EU Law (Revocation and Reform) Bill. Why will that exacerbate the problem? Because Northern Ireland will be excluded from large swathes of the Bill, as it is not possible to remove EU regulations in Northern Ireland that are linked to the protocol, the changes that will made to law in Great Britain will leave Northern Ireland further behind in terms of regulatory alignment within the UK internal market. This will greatly enhance the divide between Northern Ireland and Great Britain. It will lead to regulatory divergence. Therefore time is of the essence, but time is also of the essence because the EU is coming forward with new regulations every week, and those regulations apply to Northern Ireland.
Let me give an important example. The EU is proposing a new regulation on human organs and tissues, which will apply to Northern Ireland but not to Great Britain. What does that mean? It means that unless Great Britain adopts the changes that will be brought about by this new regulation, when Northern Ireland patients are hoping for organ transplants or blood transfusions, special blood products or organs will have to be brought from Great Britain. That presents us with a major problem. Because there will no longer be regulatory alignment between the rules on organ transplants in Great Britain and those in Northern Ireland, there will no longer be regulatory alignment in respect of the use of blood products coming from Great Britain for use in the health service in Northern Ireland. This regulation is coming forward: it has already been the subject of scrutiny by the European Scrutiny Committee in this House.
That is just one small example of how further EU regulation will cause Northern Ireland to diverge further from Great Britain, and will present real and practical issues that are about not just trade, but the health and wellbeing of every single citizen in Northern Ireland.
Mr Deputy Speaker (Mr Nigel Evans)
Order. I will allow this intervention, but I think we have gone way beyond the Bill that is before us. There will be plenty of other opportunities to discuss the issues that you are raising today, Sir Jeffrey. I know that this is vitally important, but there will be many more such opportunities.
Julian Smith
Does my right hon. Friend agree that the EU, on the issue of medicines, did show flexibility this year, and did start to move into the area that we were discussing earlier—the area of compromise and less hard facts? We need more of that in other areas. We should encourage the EU to use the principle that it applied to medicines in these other sectors, and to start to move in that direction.
Sir Jeffrey M. Donaldson
I thank the former Secretary of State for making that point, and I agree with him. I think that the point he made in his speech— which I echo—is that what we need now, more than anything, is for the European Union to recognise that consensus in Northern Ireland is essential to restoring the political institutions.
In conclusion, the European Union has stated that the primary reason for the protocol is to protect the integrity of the Belfast/Good Friday agreement and the political institutions created by that agreement. That is what the European Union has said countless times, yet the reality is that the protocol is harming the agreement. It is harming the consensus that is necessary—nay, essential —to operate the political institutions created under the agreement. We are approaching the 25th anniversary, and a lot has been said about that in the House this afternoon. For the record, we want to see the political institutions restored well before the 25th anniversary. We want to be able to join with all our citizens in Northern Ireland to celebrate 25 years of a relative degree of peace.
Dame Andrea Leadsom (South Northamptonshire) (Con)
I am grateful to the right hon. Gentleman for giving way one last time. I just want to remind him of when he and I sat on the Parliamentary Partnership Assembly just a few weeks ago in Committee Room 14 and talked to the EU about moving forward. He made an impassioned plea, as did I, for the EU to take account of the needs of all the communities in Northern Ireland, and I certainly felt that that was listened to and respected. I feel optimistic about this, and I wonder if he shares that view.
Sir Jeffrey M. Donaldson
I would like to be optimistic about the European Union changing its negotiating stance, but we have not seen it yet. We are looking for the evidence of it; we want to see it. That is now essential to break the logjam and open up the opportunity for the UK Government and the European Union to reach an agreement on this most pressing of issues. Therefore, we want to see this legislation have an endpoint. We want to see the political institutions restored in Northern Ireland, but let me be absolutely clear: that requires a solution on the protocol and it requires the European Union to accept that the protocol is not working. It is harming the consensus in Northern Ireland and it needs to be replaced by arrangements that respect the integrity of the UK and Northern Ireland’s place within it.
Bob Stewart (Beckenham) (Con)
Although I am an English MP, I have a huge affection for the people of Northern Ireland. What happens there matters a lot to me because of the three years I spent soldiering in the place. Indeed, I am revisiting the Province this weekend, as Northern Ireland Members know, for the rather sad commemoration of the Ballykelly bombing, which occurred 40 years ago and for which I was the incident commander. Thankfully the bad old days of the past have gone now, and they must never return.
May I at this point commend to the House the continuing dedication, hard work and often gallantry of the Police Service of Northern Ireland? In the past I worked closely with its predecessor, the Royal Ulster Constabulary—especially the special branch—and I have nothing but the greatest of respect and admiration for the men and women who make up its ranks.
It is unfortunate that we have to have this Bill to try to get an Executive formed in Northern Ireland, but that is where we are. It is also essential that we get through this deadlock of democracy in Ulster. Everyone agrees on that, and the stumbling block to achieving that progress is the protocol. It is certainly stumped at the moment, and people and businesses are really hurting in Northern Ireland. The protocol directly costs people in Northern Ireland. It is totally unfair that my constituents in Beckenham do not have to pay as much money in the supermarket as people in Northern Ireland do because of the protocol.
Claire Hanna (Belfast South) (SDLP)
Will the right hon. Gentleman outline where he saw these price differentials? Through my work, I spend half the week in London and half the week in Belfast, and I am not seeing it. I do not think the evidence provided by the retailers is bearing out that assertion. Can he give evidence of the price distortions he says the protocol is causing?
Mr Deputy Speaker (Mr Nigel Evans)
Order. I make the same plea: there are plenty of opportunities to talk about these other issues. We have the Bill in front of us, and I think it would be more fruitful if we directed our comments towards that.
Bob Stewart
I will not respond to the hon. Member for Belfast South (Claire Hanna). I have not been to Northern Ireland recently, but I will be there at the weekend and I will buy something in the supermarket. I have been reprimanded by Mr Deputy Speaker, and I always take a reprimand from the Chair with seriousness.
Northern Ireland must develop and regain its devolved institutions and local decision making, and I know my right hon. Friend the Secretary of State—he is sitting on the Front Bench and paying great attention to everything I say, as he always does—is bending over backwards to try to sort out this problem. There is no doubt about that.
Nobody benefits from the current situation, and I welcome the Secretary of State’s continuing discussion and co-operation with the Irish Government on matters of mutual concern. However, I am somewhat worried by some suggestions that, if an Executive cannot be formed, there could be some form of joint authority over the island of Ireland. That must not even be considered. It is utterly unacceptable and would be a direct attack on the sovereignty of the United Kingdom of Great Britain and Northern Ireland. We cannot have that.
Obviously, we all hope that an agreement on changes to the protocol can be agreed in time for the 25th anniversary of the Good Friday agreement. To be honest, I have mixed feelings about docking the pay of MLAs because they are apparently not fulfilling all their duties of representation. I accept that, in principle, they might not be doing all their job, but every one of them—DUP included—wants to go back to work. However, I will support the Secretary of State if he decides to take that form of action.
I presume that, unless an Executive is formed by 19 January, new elections in the Province will be inevitable. To stop this, we need the problems of the protocol to be sorted by then. We really have to fix it, because my friends in Northern Ireland do not deserve to go through all this.
Thank you very much, Mr Deputy Speaker. I sit down, having been reprimanded.
Several hon. Members rose—
Mr Deputy Speaker (Mr Nigel Evans)
I know I will not need to reprimand Gregory Campbell, because he will focus on the legislation.
Mr Gregory Campbell (East Londonderry) (DUP)
It is a privilege to speak with you in the Chair, Mr Deputy Speaker. I am delighted to follow my esteemed colleague and friend, the right hon. Member for Beckenham (Bob Stewart).
In speaking to the Bill, I will limit my remarks to a small number of areas. The first is the matter of MLAs’ pay, which has been alluded to not only in the Chamber but more widely as a significant contributor to the moving of the Bill. The Secretary of State helpfully introduced the Bill last week. I shall quote from what he told us:
“It is also unacceptable that Members of the Legislative Assembly (MLAs) should continue to receive full remuneration from the public purse when they are not fulfilling their Assembly duties”.
That is the justification for that portion of the Bill.
I presume that if I were to ask the Secretary of State—which I may well—whether his Government are acting with a very even hand in relation to all aspects in Northern Ireland, and whether he wants to ensure that what he applies to one community is applied equally to the other, I would not see him in any way diverting from that. Indeed, I can almost see him nodding in acclamation: that the Government want to treat everyone equally, and that that has been the sum and substance of what he and previous Secretaries of State have said on previous occasions.
If this Government are treating everyone equally in respect of the potential to reduce MLAs’ salaries—on the basis of what the Secretary of State has said in introducing the Bill about it being unacceptable that they should continue to receive full remuneration from the public purse when they are not fulfilling their duties—I trust that he has had some level of conversation with the Leader of the House on the almost reprehensible nature of the fact that there are MPs who do not fulfil their duties in this House. Having done some research and received answers to parliamentary questions I have tabled about representation moneys, I know that they receive funding of not thousands, not tens of thousands, not even hundreds of thousands, but millions of pounds. In the past 10 years, those who do not fulfil their duties as Members of Parliament in this Parliament have received £10 million—ten million pounds—so I trust that, in conjunction with this Bill, the Northern Ireland Office has had conversations with the Leader of the House about wanting to treat everyone equally. I am sure that those conversations have taken place and that they have been along the lines of, “We’re going to introduce this Bill to ensure that MLAs don’t get the full remuneration from the public purse, but you’re going to have to introduce something similar in this House, so that Sinn Féin MPs or anyone else who doesn’t fulfil their duties also don’t receive remuneration from the public purse.”
Chris Heaton-Harris
I am curious as to whether the hon. Gentleman knows that Sinn Féin Members do not receive their parliamentary salaries.
Mr Campbell
I am well aware of that. The remuneration I am talking about does not include salaries, but it does include all other expenses, including representation moneys, and the total amount in the last 10 years was in excess of £10 million—for not performing their public duties. That is not the responsibility of the Secretary of State, but it is the responsibility of the Leader of the House.
Claire Hanna
Is the hon. Member’s point that he would like the salaries of his party colleagues’ staff stopped as well? That seems to be the logical extension of what he is saying. I think we are all agreed that abstentionists should not receive a salary, but if he is saying that the issue is that there are office costs and other remuneration, is he proposing that they are taken away from MLAs?
Mr Campbell
I thank the hon. Member for that intervention. I think she knows full well that that is not what I am suggesting. I was quoting the exact reference from the Secretary of State in introducing the Bill: “full remuneration from the public purse”. That should apply equally to Sinn Féin’s allowances and representation money. Action should be taken on that. It has been requested and sought for many years. I will leave it there and hope that the Leader of the House will introduce such a change. It would be entirely unacceptable if she were not do so.
We have discussed this Bill on many occasions and also the need to get back into Stormont, which all of us share. My party is a devolutionist party. I have served for many years in various capacities under the devolutionary settlement of Stormont, so I want to see Members back doing their jobs. However, it is a mistake to keep referring to a variety of problems and say that they could be solved if Ministers were back at their desks. Ministers were at their desks when hospital waiting times got worse. The A6 dual carriageway in my constituency is almost finished, but it has been almost finished for a year, and that has been mostly under devolution. Unfortunately, the road remains unfinished. I hope that no one will suggest that we should get back into devolved Government so that the roads can be finished. I hope that no one will suggest that we should get back into Government because the waiting times in various hospitals are getting worse. They were getting worse under devolution. Yes, I want to see devolution work, but let us not create straw men for others to knock down.
Sammy Wilson (East Antrim) (DUP)
Does my hon. Friend also accept that the £670 million hole in the budget occurred when the Executive were sitting and that, this time last year, the Sinn Féin Minister could not get agreement from any party—not one party—in the Assembly to his budget?
Mr Campbell
Not only is my right hon. Friend right, but the Secretary of State alluded to that. He was extremely critical of the overspend that the devolved Government had achieved. I just think that we should be more circumspect when we talk about getting back into devolved Government. We come back to the point that my good friend the right hon. Member for Beckenham made just before I rose to speak, which was that there is one issue that prevents devolved Government from returning—with all their faults, which must be remedied—and that is the protocol.
Again, I hope that the Secretary of State, the Minister of State or anyone else will not use the other straw man, which is preventing the return of a hard border, because everyone knows that that will not happen. It was never going to happen. It was raised to pressure our Government; that is the reason that it was raised. That is why Leo Varadkar, when he was Taoiseach, threw down the front page of The Irish Times, which showed a border post ablaze in the 1970s, and said to Messrs Macron and Merkel that we cannot go back to that. Our Government took fright and would have agreed to anything rather than this false assertion that violence would return.
A hard border is not on the equation. It will not be implemented. Everyone accepts that that is the case. The Government have to deal with the one thing that prevents us from getting devolved Government back up and running—the one thing that has introduced the Bill that we are discussing today—and that is the protocol. Sort out the protocol and we will get back into government.
Claire Hanna (Belfast South) (SDLP)
I am pleased to be called to speak in the debate, but I am disappointed that it is on another Bill that is a manifestation of political failure. It is the latest in the diet of political failure that the people in Northern Ireland have been fed, and attention is rightly on the current abeyance of the institutions. However, the truth is that the stewardship of the Good Friday institutions has been abused for the past decade by partisan positioning. The people who pay the price, time and again, are those who are waiting for health treatment for want of reform of health and for want of workforce planning, the children who are sitting in an inadequate school estate because of delayed development decisions, and the people sitting in the cold and getting sick because of it, waiting for cost of living support payments that reached other regions many months ago.
We should be in absolutely no doubt that, despite the nihilist anti-devolution rhetoric that we have just heard, the responsibility to govern and the refusal of it does have a measurable impact on public services. Nobody is saying that the parties in charge over the past decade have done a particularly good job of running those services, but it is absolutely the case that having no Ministers degrades decision making. We should be in no doubt, either, that the normalisation of crisis politics is wearing people in Northern Ireland down, entrenching division and making our society even sicker.
Anybody listening to the speeches from DUP Members will have had a mind-bending experience. I am going to stick to the scope of the Bill, but I want to clarify that nobody is dismissing the hurt that many ordinary Unionists feel about Brexit and the protocol; that is why many of us advocated exhaustively for better solutions, which were dismissed, while DUP Members were gleefully all about their selfies with the European Research Group. However, we are being honest with people about the fact that the Northern Ireland Assembly does not have a role in that negotiation.
In the debate about restoring the institutions, people are frustrated at the idea that the DUP is the victim in all this, when the people I, my hon. Friend the Member for Foyle (Colum Eastwood), the hon. Member for North Down (Stephen Farry) and many others represent are the people who have been Brexited against our will. Are we tearing everything down? Are we punishing the health service? No—we are turning up for work every day to try to find solutions.
We have heard it demonstrated today that no solutions are going to be acceptable. Perhaps I imagined the years of debate about blockchain and all the other technical solutions to Brexit that were put forward, including by the DUP, but we know there is no bottom line that is going to be met. Instead, we have the promulgation of a “them’uns did it” narrative that the protocol is somehow a creation of Irish people, nationalists and foreigners in the EU, rather than a proposal by the UK Government to get themselves off the hook of the original Brexit trilemma and the fact that we cannot reconcile a hard Brexit with the geography we have. In all the debate I have heard over the last six years, including today, I have yet to hear a solution to that.
The Good Friday agreement is about solutions. That agreement and the institutions it created were supposed to give life to the aspirations of everybody in Northern Ireland, regardless of their community background or their view on the constitutional issue. Instead of people being able to see opportunity in politics and opportunity in public service, they just see dysfunction, an Assembly not sitting and—with respect—a UK Government who are not interested.
People in Northern Ireland know that our future is not fixed. They know the experience we are having right now does not have to be the experience that we have forever, and people are beginning to look clearly at their options. They see the Stormont dysfunction and the merry-go-round here, and they can see a very clear contrast with the Government in the rest of the island of Ireland, who are stable and delivering a budgetary surplus that can mean investment in public services.
The Social Democratic and Labour party has always been clear about our desire to create a new Ireland on the basis of consent, and we have rejected the scorched-earth approach of others that would see a new Ireland rooted through dislocation and disarray, but the hard truth is that those creating chaos in our institutions are absolutely scorching the earth. They are driving more people every day to think about a new paradigm in which they can enjoy good governance, run their businesses and raise their families.
Our primary political objective will always be meeting the needs of people in the here and now. That is why we support the provisions in this Bill—reluctantly, because we know it is required to keep the show on the road, and it does just that and no more.
We acknowledge the need to postpone an election. Elections are supposed to put power in the hands of the people, but the reality is that an election, had it been run next month, or in March or May, if the veto was not removed and the blockage was not removed, would do no such thing. It would not put the people in the driving seat and it would further disrespect the mandate that those people expressed six months ago.
We acknowledge the need to give clarity about interim political decisions, but—I appreciate that the Secretary of State understands this—it is no substitute for democratically accountable Ministers. We are not over the last governance black hole that caused much of the degradation in public services that we are currently experiencing.
However, the SDLP is equally clear that DUP intransigence cannot be rewarded by either direct rule or indirect rule. In the absence of an executive, even with the mitigations in this Bill, the Conservative party would be in the driving seat on major decisions. That does not reflect the will of the people as expressed either this past May or in 1998 with the Good Friday agreement. That agreement was about creating devolved institutions that reflect the views of people who are Unionist, people who are nationalist and people who are neither.
Plan A for the SDLP is a devolved Executive as chosen by the people in May. But we have tabled new proposals that would give a formal consultative role to the Irish Government and a role to the First Ministers-designate, who should be chosen from the two largest traditions—[Interruption.] People can call that what they will, but we are very clear that if strands 1 and 2 are deliberately paralysed, strand 3 and the British-Irish Intergovernmental Conference should be consciously operated. Parties should know that that will be the recourse and the consequence of their choice to hold strands 1 and 2 of the Good Friday agreement to ransom. The institutions of government rely on Unionists, nationalists and others working together in our substantial common interest, and that principle should be hardwired into any governance decisions—even those that are operating only temporarily.
We acknowledge the injustice of MLAs who are not fully at work continuing to receive a full and decent salary at a time when so many are struggling, and when those with trade unions are losing pay because they are striking to improve terms and conditions and the public services that they deliver. We regret the collective punishment and untargeted scope of this approach.
As the right hon. Member for Skipton and Ripon (Julian Smith) outlined, there are many decent and talented people in all the parties, including the many who have stepped forward for election for the first time this year. I spend a lot of time trying to persuade people of all political backgrounds to go into politics. It is difficult enough to attract talent—many of us now on these Benches had our pay cut last time the Assembly was in abeyance—but it is harder when you say, “These are the terms and conditions. This is the abuse you’ll get on social media. These are the hours you’ll keep. And by the way, for a few months every year, you’ll struggle to pay your mortgage and childcare bills because of the intransigence of others.” We have tabled an amendment that would direct that tactic at those who are creating the problem and who refuse to allow even the nomination of a Speaker.
We have also proposed by amendment a means of electing First Ministers and a Speaker. That would move us away from the culture of veto and the focus on binary designation, neither of which have, in recent years, proven healthy for discourse or decision making, unfortunately. That reflects our desire to evolve and reform the institutions without jeopardising the fundamental principles of power sharing and mutual respect. There is absolutely no attempt by the SDLP to move away from those principles, which have been at the core of our party and everything we do for the last five decades and more. But if that is only ever expressed by veto and by blocking the people of Northern Ireland from having a decent life—if that is the only tactic that people appear to be prepared to use—we will absolutely look for solutions.
If the DUP continues to be abstentionist in the new year, post any EU-UK deal, and given that an Assembly election while those are still the conditions will not put power in the hands of people, we will explore reform with more urgency—
Claire Hanna
You are doing a great job yourself.
We began that work by tabling amendments to the Northern Ireland (Ministers, Elections and Petitions of Concern) Act 2022 to introduce an alternative election of First Ministers—[Interruption.] We do that work despite the chuntering from a sedentary position of people who just say no, who just nag from the sidelines, who are blocking good governance, and who, day by day, move more people towards considering and exploring a new Ireland—[Interruption.] Those on the DUP Bench below me have no interest in making Northern Ireland work, have derided and mocked people like me for wanting to do so, and have shown that they are unwilling or unable to do that. Those who vote for that party to protect the Union should really take a strong look at the strategic direction that is being provided and the value that they are being given for their vote.
Mr Deputy Speaker (Mr Nigel Evans)
Order. I am going to be less generous than I was earlier. As far as the protocol is concerned, the points have been well heard. Members’ remarks are going much wider than what is in the legislation before us. Can we have a bit of focus, please? There is plenty of meat here.
Claire Hanna
I appreciate that, Mr Deputy Speaker, and my focus is exclusively on the restoration of the Executive and restoring government to the people of Northern Ireland. I am outlining the efforts that we made last year with the MEPOC Act to introduce or reintroduce mechanisms that would move us away from veto and confrontation, which have become the political culture.
We sought to equalise the titles of First Minister to clarify the joint nature of that office and to end campaigning that is only ever built on dominating other communities. We also attempted to introduce a change that would allow for the election of First Ministers based on the votes of two thirds of Assembly Members, including broad-based, not majority rule. It is worth saying that had that been voted for last July and extended to the election of the Speaker, we would be back in the Assembly now.
Solutions do exist, and we will engage with any solutions that are serious about ending the deadlock while retaining the core principles that we adhere to of common endeavour and mutual respect. The way that things are being operated at the moment and the tactics of the DUP are destroying trust in devolution, and the DUP is profiting from prioritising victory and veto in a system designed for partnership. As John Hume said many times, “If you ask for all or nothing, you will get nothing.” [Interruption.] DUP Members may think they are being smart by chatting over me, as they do. They reject anybody whose views are not identical to their own, and they will see in the long term where they get. As long as this fiasco continues, the Social Democratic and Labour party will continue to speak up for people who are just trying to get through their days, live their lives, raise their families and run their businesses. We will support the necessary provisions in the Bill that help them do that.
Carla Lockhart (Upper Bann) (DUP)
I take no pleasure in seeing this legislation before the House today, as it sadly represents failure between the Government and the EU to protect the cornerstone of the political institutions in Northern Ireland and the fundamental principle of cross-community consent. It represents a failure to the Unionist people of Northern Ireland and businesses in Northern Ireland, and it continues to put at risk the great Union of Great Britain and Northern Ireland.
Today, I want to make it as clear as I can that Unionism does not consent to the protocol or the institutions operating in a business-as-usual manner. Today, Unionism feels aggrieved by the sheer disregard for its concerns. Never before have I experienced such a groundswell of support for our position to hold the line, not give in and take a stand—all phrases we have heard so often from the people we represent. Let us not forget the words of the very author of the Belfast agreement, the late David Trimble, who said:
“Make no mistake about it, the protocol does not safeguard the Good Friday Agreement. It demolishes its central premise by removing the assurance that democratic consent is needed to make any change to the status of Northern Ireland.”
The protocol poses an existential threat to the Belfast agreement and the St Andrews agreement. Despite the time and space afforded by my party leader for the Government and EU to face up to the stark reality and find a new way forward, nothing was done. We had months of minimal action and tinkering around in the hope that the DUP would quietly let it slide. Well, the DUP can be accused of many things, but not of backing down and letting things slide. When we see the economic and constitutional damage the protocol is having on the people of Northern Ireland, we will not let it slide and we will continue to take our stand for the people who are impacted.
Our commitment to devolution throughout that window of opportunity was clear. While we urged people to face up to the political reality, others looked away.
Ian Paisley
Does my hon. Friend think it important that those who want full implementation of the protocol take cognisance of a recent report from this House and the House of Lords, which claims that that would halt east-west trade within 48 hours? Is it not the case that the reason why Unionists are staying out is that this protocol damages everybody’s livelihoods in Northern Ireland?
Carla Lockhart
Absolutely. My hon. Friend’s point is so well made. The takeaway from that is that it is the industry leads who are saying that the protocol will grind east-west trade to a halt within 48 hours, and that is a stark reality.
Last week I hosted the Minister of State on a visit to my constituency, and I thank him for that visit. He met Wilson’s Country potatoes. Wilson’s is a leading potato brand, but it faces ongoing difficulty arising from the protocol, because Scottish seed potatoes, needed to grow crops of certain varieties that the market demands, are banned from entering Northern Ireland.
Mr Deputy Speaker (Mr Nigel Evans)
Order. I gently ask the hon. Lady to return to the legislation that we are considering. We understand why we are here discussing it, and that has been dealt with very well by Sir Jeffrey Donaldson, but I do not think that we need every Member to stand up and cover exactly the same area. The protocol will be debated again in the Chamber, I am absolutely certain, but let us not have lengthy speeches on it today.
Carla Lockhart
Thank you, Mr Deputy Speaker, for bringing us back to the Bill. The fact remains that we would not need it if the protocol was resolved.
Moving on to MLAs’ pay, the hon. Member for North Dorset (Simon Hoare), who chairs the Northern Ireland Affairs Committee, seems determined to punish MLAs for his party’s failures. His party gave us the protocol, and in doing so undermined the fundamental building blocks of the institutions and the Union which they claimed to cherish. His party failed to act when the DUP offered time and space to find a replacement and avoid the position in which we find ourselves. Does he accept any responsibility?
Let me be absolutely clear: DUP MLAs will embrace any pay cut that the hon. Member for North Dorset, or anyone else for that matter, imposes on them, whenever it comes. That will not change their stance or the stance of the DUP. As someone who was in the Assembly when pay was cut last time, I can assure the House that we are in politics because of our conviction, not for the pay that we receive.
Our refusal to enter the institutions has the support of our community, which will allow us to return to them only on the basis of respect for our constitutional position and the restoration of the integrity of the UK. The Minister of State knows that, because he heard the message loud and clear in Hillhall when he visited my constituency and the constituency of my right hon. Friend the Member for Lagan Valley (Sir Jeffrey M. Donaldson) last week.
Today, Members are exercised about the pace and severity of a pay cut. They ought to be exercised about the reality that should a new way forward not emerge soon, there will be no MLAs, no Ministers, no Stormont and no devolution. Furthermore, should those who now seek to exclude Unionism from the institutions under the guise of reform continue to undermine the agreements they claim to cherish, restoring those institutions will be increasingly difficult. It is telling that the same voices fell silent for years when Sinn Féin refused to enter the institutions. Indeed, rather than demand their exclusion, Alliance and Social Democratic and Labour party representatives stood at protests shoulder to shoulder with those blocking government. The double standards, and the desire to exclude Unionism from the institutions, are not lost on my community.
Claire Hanna
Does the Member acknowledge that only three or four days ago I stood shoulder to shoulder, so to speak, with a member of her party when addressing provision by the education authority? Does she acknowledge that working with members of other parties on different issues is not the same as endorsing their entire policy platform? She made an accusation again about my party withholding government. Is she going to keep repeating that falsehood, or does she acknowledge that cross-party working does not mean that we buy into the entire manifestoes and approaches of other parties?
Carla Lockhart
We will have an opportunity to read Hansard and the Member’s contribution today, so we will be able to see that there is a clear ignoring of Unionist views and a clear sidelining of Unionism and the many people on whom the protocol continues to impact.
Carla Lockhart
The onus is on the Government and the EU to bring about the conditions whereby power sharing can be restored. Should a new agreement be found that meets the seven tests that my party has outlined, we will not be found wanting in returning to office. The ball is in the court of the Secretary of State.
Stephen Farry (North Down) (Alliance)
I cannot say that I welcome the legislation, but I recognise that it is sadly necessary. It is shameful and disgraceful that the Northern Ireland Assembly and Executive are currently not in place. We continue to maintain that they should be established forthwith.
We are facing twin governance and financial crises in Northern Ireland, and huge damage has been done to our economy and public services through delayed or missed decision making. That comes at a time when there is immense pressure on Northern Ireland’s public finances. I have made the point that mistakes were made in the past and the roof was not mended when the sun was shining and we had better opportunities, so difficult decisions are now required. Indeed, our health service in particular is going through tremendous difficulties. Necessary reforms to our public sector are being delayed, which means that the budget crisis gets ever tighter as we try to balance the books on an ever-declining, burning platform.
I will touch on the key areas of the Bill, mindful of your guidance, Mr Deputy Speaker. First, I will touch on the revised deadline for the formation of an Executive and, by implication, the resumption of the duty on the Secretary of State to call an election within 12 weeks if those deadlines are not met. The Secretary of State took the right decision to defer an election after 28 October and to seek further flexibility. In the current climate, an election would have been counterproductive and would have made the task of restoration and the wider negotiations with the European Union more difficult.
My difficulty lies with the revised dates. I appreciate that the Government have to try to move the process along and put in place some kind of deadline to get people over the line, but there is a disconnect between the timescale that the Northern Ireland Office is setting out and the reality of the pace of negotiations with the European Union. Evidently, we have seen a change in the mood music over the past few weeks, which is extremely welcome, but we have not yet seen real progress in the substance of those negotiations. I earnestly wish that we reach a conclusion as quickly as possible, which will require flexibility from the UK and, may I say, the European Union. The UK Government need to take a view on exactly where they will land on these issues; I will refrain from going into the detail of those discussions, given the nature of the Bill.
The shadow Secretary of State has already alluded to the fact that the first deadline in the legislation of 8 December is next Thursday, which may in practice be only a couple of days after the Bill gets Royal Assent. What seemed to be a reasonable deadline a few weeks ago is now, I suspect, fairly meaningless, so we are focused on the second deadline of 19 January, which I note is essentially only seven weeks away. In theory, that is ample time for the negotiations with the European Union to reach a conclusion, but based on the rate of progress that we have seen in recent weeks and months, we need to be realistic that that may not be the case.
We could therefore be in a situation where the Secretary of State has a restored duty to call an election after 19 January. At that stage, perhaps progress will have finally been made in the negotiations or we might be in or about to enter the metaphorical tunnel of those negotiations. In that context, I venture that the prospect or actuality of an Assembly election would be at best counterproductive and at worst extremely damaging. The talks could grind to a halt because of that potential election, or a certain political party or others could harden their red lines about those negotiations, which would make compromise, or the acceptance of a compromise deal, more difficult.
Obviously we need strong leadership from all quarters to ensure that we can get something workable over the line. I suggest to the Secretary of State that this Bill is too inflexibly framed. I appreciate the need to focus minds, but if after 19 January it is manifestly not in the interests of the people of Northern Ireland, the negotiations or the wider public interest to have an election, the only recourse available will be the Secretary of State’s coming back to Parliament seeking a further Bill. I imagine it would go down like a lead balloon if we were in that situation. I urge the Secretary of State to take the time between now and consideration of this Bill in the other place to reflect on the way forward—to keep us focused on the job in hand but to give that bit of flexibility if it proves necessary.
Secondly, I want to talk about the guidance. I welcome the publication of the draft guidance today, but the Bill is at best a stopgap in terms of governance. We have a major hole in that regard. What we have before us is neither tenable nor sustainable beyond the shortest possible periods. There are many difficult, pressing, urgent decisions that need to be taken, and it is right that civil servants are reluctant to take significant decisions that are normally left to be taken at the political level. There are particular difficulties in taking budget decisions: it is one thing keeping a budget ticking over on a care and maintenance basis, but if the books need to be balanced in a tighter budget situation, any decision to cut something is inherently political and will be subject to some degree of challenge. The civil servants are placed in an unenviable situation, but a balance must be struck between recognising that reluctance while at least enabling critical things to be taken forward.
We must have some further discussion on the guidance. I understand it could be clarified in due course, but what type of consultations will happen over a short period of time to get the draft guidance turned into final guidance whenever this Bill receives Royal Assent? I also seek an assurance that the guidance will be flexible enough to enable—rather than direct—civil servants to implement any pay body recommendations, because that is clearly a pressing issue for many public sector workers in Northern Ireland, who perhaps at this stage have not received what has been made available in Great Britain, never mind the legitimate concerns around additional pay that many are making.
On MLA pay, I declare a previous interest in that I was an MLA whose pay was deducted under a previous Assembly. It was difficult, but it was the right thing to do, and I recognise that cutting MLA pay is the right thing to do today. I say slightly flippantly that it should be directed primarily at those who are blocking restoration of the Executive, but I appreciate that is difficult to do. I recognise the remarks from Members of other parties that this might not in itself force a change of minds, but as the Chair of the Select Committee, the hon. Member for North Dorset (Simon Hoare), recognised, there is major disquiet at MLAs receiving their full salary in the current environment, and that must be recognised inside this Parliament. Most MLAs recognise that; certainly my party colleagues do so. Notwithstanding the fact that they cannot perform their full job description as set out, they are working extensively every week to act on behalf of their constituents, to make representations and work with other groups in Northern Ireland. But they are also massively frustrated.
Finally, I want to talk about what will happen if this Bill fails, and indeed if there is no outcome from negotiations with the EU or we have an outcome that most common-sense people would accept but is none the less rejected by some Northern Ireland parties, and we therefore have continued blockage. As I have said, I do not believe the current stopgap approach to governance is sustainable. Decisions should be taken by locally elected people in Northern Ireland on behalf of their constituents. If we are in the situation of defaulting to direct rule, that is problematic in many respects. As there has been some talk of joint authority being an alternative, I want to take this opportunity just to make it very clear that for my party, joint authority is outside the context of the Good Friday agreement and outside the principle of consent. None the less, if we are to talk about direct rule, that would have to have an Irish dimension of some description, and that has been understood going back to the Anglo-Irish agreement of 1985.
That is basically what we are looking into, but short of that, we should be looking at reform of the institutions. I am not going to go into the detail of that, except to reiterate my party’s very strong commitment to allow those parties in Northern Ireland that wish to govern to do so. That is by far the next best alternative to the current arrangements. I would prefer that to be done on an inclusive basis, but the point is that some parties have the opportunity to take up places in government, and it is they who are self-excluding.
Sammy Wilson
When did the Alliance party have this Damascus road experience? For three years when Sinn Féin was holding up progress and holding up the Assembly in Northern Ireland, I never heard once that the Alliance party believed that the Assembly and its structures should be changed to facilitate that.
Stephen Farry
I am grateful to the right hon. Member for his intervention because it gives me the opportunity to reiterate that my party has consistently advocated reform of the Assembly structures. It has been in our party manifestos going back to 1999. In particular, in the period between 2017 and 2020, my party made numerous comments publicly on the need for reform. I will gladly forward copies of speeches made by my party leader to party conferences to the right hon. Member so that he can read them with a great deal of interest.
Colum Eastwood
Far be it from me to get involved in this conversation between the Alliance party and the DUP, but would the hon. Member like to tell us his understanding of what the DUP’s position actually is on mandatory coalition, because as far as I am concerned, it seems to be a new convert to the principle?
Stephen Farry
We can look at this in two different ways—what happened before 1972, and what happened in the 1970s and 1980s through to what happened during the talks. I would stress that, if we read the DUP manifestos up to the point of its current walk-out, we can see that it was actually a fan of reform of the institutions and moving away from mandatory coalition. It was a principle for the DUP then, but that is no longer the case. Indeed, the right hon. Member for Lagan Valley (Sir Jeffrey M. Donaldson) famously went on “Question Time” during the last impasse and lambasted the situation in which a party with about 25% of the vote was able to frustrate the institutions. I think I will leave it there.
Stella Creasy (Walthamstow) (Lab/Co-op)
I rise to make what I hope is, in comparison, a relatively brief speech, but I have some questions about how this Bill will work. I hope that will meet your requirements, Mr Deputy Speaker, because I think it is important that we ask these questions and that we centre in this debate the people of Northern Ireland. We have already talked a lot about the institutions, the challenges with the protocol and, indeed, Brexit, as well as about who needs to be flexible—this Government, the European Union—but I think it is absolutely key to talk about the public in Northern Ireland and how they are affected by this legislation. I say that as somebody who has now lobbied five separate Secretaries of State about Executive formation legislation.
Members who were here before 2019 will remember the last incarnation of this legislation, which led to the situation in which we finally had legal abortion in Northern Ireland. It is with the provisions of the Northern Ireland (Executive Formation etc) Act 2019 and how this Bill will affect that in mind that I want to ask these questions. As I said earlier, it has now been 1,134 days since we passed that legislation, and this House took a decision that we wanted to support access at local level that is safe and legal for women in Northern Ireland. We agreed subsequently, in the abortion regulations in 2020—it is 973 days since they were passed—that there should be a service on request up to 12 weeks and that beyond that, up to 24 weeks, two medical professionals could certify that a woman should have an abortion if there was a greater risk of mental harm or physical harm if she did not, which is very similar to England and Wales.
I raised that because one thing to remember in all of these debates is that decriminalisation and legalisation do not mean deregulation. Indeed, the legislation that we have seen flowing from the 2019 Act absolutely sets out how access to abortion should be provided. The challenge for many of us, though, is that during all that time, that has not happened. Time and again, we have seen the 2 million women in Northern Ireland denied that right. Abortion might be legal, but it is not accessible. Indeed, in July this year we heard that a woman in Belfast who had suffered from pre-term premature rupture of membranes was told that she had to travel to Liverpool. We have seen many more not able to access pills.
The reason we have been given for that through the last three years is basically a stand-off between the Northern Ireland Health Department and the UK Government, with the Government upholding the human rights of women in Northern Ireland set out in the 2019 Act. In the last three years, women in Northern Ireland have directly suffered because the previous incarnation of the Bill had not been delivered. All of us in the House recognise that it is one thing to win an argument—it might be another thing to win an amendment—but delivery and implementation are where change happens.
Mr Steve Baker
The hon. Member has won the argument, and I can tell her that we are making enormous progress towards delivering abortion. The Government can confirm that services will be commissioned in Northern Ireland before the Bill passes through the other place.
Stella Creasy
I thank the Minister for that confirmation. I hope he will join me in paying tribute to all those women in Northern Ireland who have continued to work on the issue, championing their sisters and neighbours—those who need these services—through the political dysfunction and patriarchal discrimination that has led to a situation where we might have decided that something was legal through a previous incarnation of the Bill, but it was not accessible.
Stella Creasy
I happily give way to one of the many former Ministers, in addition to Secretaries of State, who has worked with us on this issue.
Mr Walker
I join the hon. Member in paying tribute to those people who have campaigned on this issue. They have been right to raise the disparity of rights. If we believe in the United Kingdom, there ought to be that equality of rights. I am pleased to hear what my hon. Friend the Minister said, because it is frustrating that the House can pass laws that do not get enacted in such a way. It will be an important step for Parliament to take to ensure that that law is respected across the whole of the United Kingdom.
Stella Creasy
I thank the hon. Gentleman for his intervention. I know that he was frustrated by it. That is why I am speaking today. We have seen the frustration, and for three years women in Northern Ireland have seen multiple letters traded between Departments but little change. It is worth reflecting that even during the pandemic, women from Northern Ireland were still travelling to England and Wales, with 161 doing so in 2021 compared with 371 in 2020.
It is welcome to hear what Ministers have to say. We helped to give those women a voice in 2019, and through the Bill we want to see those women given delivery in 2022. I have some specific questions that I hope the Minister will be able to address. The Government have powers in the Bill to direct commissioning. We recognise that public services need to continue. Those services include healthcare and—let us be clear—abortion is healthcare. Those who have sought to threaten that have not protected devolution; they have simply harmed women, and in particular women from refugee and minority community backgrounds who have been the least able to take advantage of an ability to travel in the United Kingdom.
Previous Ministers have told me that, even under those powers, one of the operational actions is for women to continue to travel. I hope the Minister will recognise that that is not a satisfactory response, particularly when dealing with incredibly tragic cases in which, frankly, travelling creates a health risk. Will he set out how that will be dealt with? I recognise that there is a challenge with staffing and that we are asking Ministers to move quickly, although some of us might reflect that, in three years, it is not unrealistic to have asked for priority to be given to training and recruitment, because the direction of travel that I was told was coming by previous Secretaries of State should have been translated across. Will he set out how the Government will ensure that the service will be properly staffed not just in one or two locations but across Northern Ireland? We know that there are travel difficulties within Northern Ireland, so it is not enough to say to women, “The service that you might need does exist, but it is in a particular location.” We absolutely want to see those services start, but ultimately, when we talk about a safe, legal and local service, it really does need to be local, just as we seek similar provision for our constituents here in England, Wales and Scotland.
Another issue we have seen, which I hope this funding can help address, is that there are very clear reports that some are using the online nature of seeking guidance about where services are to cause harm. What I mean is that some people are using advertising, particularly on things like Google, to encourage women to go to services that are not about abortion, but are trying to deter women from having an abortion. One of the critical issues is how women will know how to access these services. Ministers have said that they hope that services will be available on the ground within the next 90 days, particularly services for between 10 weeks and 12 weeks. We know that access to pills is patchy, but access to medical procedures is non-existent. If women are seeking information about those services and how to access them, under this legislation, what powers will the Government have and what action will they take to make sure that those women are getting information about the right services—the actual abortion services—if they make that choice?
Finally, I want to make a plea to the Minister: there is still a stigma, as I know he understands. Contrary to what might have been said in this place, there is very clear evidence that the mood of people in Northern Ireland has shifted on this issue, as the mood of the people in Ireland shifted following the “repeal the eighth” campaign. There is widespread support for the provision of these new services and frustration at the delay that has taken place, but if those services are to survive, we need to address the stigma about working to support women who wish to have an abortion, and also having an abortion. I hope Ministers will talk about what they will do while we wait to see whether the Executive can be reformed, but also about what they will do to tackle that stigma, so that we can get the staffing and ensure that when a woman in Northern Ireland exercises her human right to choose to have an abortion, she does not face any further barriers.
As we have said, making laws—whether in this place or in devolved Administrations—requires more than just passing a Bill. It requires implementation and delivery, and the past three years have been a story of not delivering—of not meeting the promise that we made to those women in Northern Ireland. In passing this legislation today, and delivering on the work that has been done and the promise of that previous legislation, we have to show our homework, and that homework is both logistical and cultural. I hope Ministers recognise where these questions are coming from. They will have my support in working this through, and I welcome the words of the Secretary of State when he talks about this being an important provision. However, it is necessary to seek detail now, because we have had five different Secretaries of State, so many different letters and so little progress. The women in Northern Ireland who need this service deserve to be heard.
Mr Deputy Speaker (Mr Nigel Evans)
Following the next speaker, we will move on to the wind-ups. I call Jim Shannon.
Jim Shannon (Strangford) (DUP)
Thank you, Mr Deputy Speaker. It is always a pleasure to speak in the House, but this is a subject matter that we hoped we would not have to address or bring before the House. However, because we are where we are, we feel it is important to do so. My party has tabled amendments, which I believe demonstrate our concerns; we will do what we can to address those concerns, and also to show support for our community. I respect the fact that there are Members present from different parties and with different opinions. It is no secret that we differ on many things, but there is an understanding that we do what we can to represent our constituents, so I am very pleased and proud to be able to stand here and speak for my Ulster Scots, Unionist community of Strangford.
I will speak to some of the DUP amendments, particularly amendment 13. First, I want to make it clear that we in the DUP recognise the need for what we have in front of us today. It is not what we want, but we are where we are, and we have to recognise that. We believe in the right to take a stand for the political good, and unfortunately, the fundamental issue of the Northern Ireland protocol remains. The allowance for negotiations is also welcome, which is part of why the deadline will be extended by another six weeks, but it is important to remember that time is no object in this debate. The route to a resolution will come through an understanding of our conditions in relation to the Northern Ireland protocol.
The Bill in front of us is the Northern Ireland (Executive Formation Etc) Bill. We are here today because we do not have an Executive, and we do not have an Executive because of the protocol. We can talk until we are blue in the face—or until the cows come home, as we say in my neck of the woods—about the need to restore the Executive, but if Executive formation really is our purpose, we are wasting our time unless we address the issue that stands in the way of Executive formation.
In addressing the challenge of Executive formation—to which the Bill’s title refers—it is vital that we recognise that the imperative for finding a solution arises from the fact that the current arrangements cause the UK Government to violate international law, a situation that must be terminated as quickly as possible.
Mr Deputy Speaker (Mr Nigel Evans)
Order. Mr Shannon, I will allow you to touch on the protocol, but not to go into detail on that.
Jim Shannon
I will move straight on, Mr Deputy Speaker.
Clauses 3 to 5 permit the exercise of Northern Ireland departmental powers by senior civil servants under guidance published by the Secretary of State. Our amendment 13 reinforces the importance of accountability to the people of Northern Ireland. Elected representatives have the power to legislate and make laws for Northern Ireland, and to be scrutinised and held very much accountable. The proposal sets out the framework relating to the choice to do something, why it was done and how it could be done. At the same time, it allows people to be liable to answer questions from MLAs and MPs. As policymakers, we are all subject to the same scrutiny and accountability measures. If legislation cannot be made in the Northern Ireland Assembly, those who are asked to do it are responsible for ensuring that there is robust and transparent reasoning.
The Northern Ireland Executive would be functioning were it not for the Northern Ireland protocol. The current arrangements are a clear violation of international law. Articles 1 and 2 of the Northern Ireland protocol are subject to the Good Friday agreement. It is important to remind ourselves of that, because we are all looking forward, for different reasons, to a future time. The GFA commits the state parties to uphold the right of the people of Northern Ireland
“to pursue democratically national and political aspirations”.
Articles 3 to 19 of the protocol are subject to the GFA and article 2 places an explicit obligation on the UK Government not to allow the impacts of the protocol to diminish the rights under the GFA. It is important to reiterate those things. I understand that everyone in the House is fully committed to maintaining the GFA.
The Northern Ireland Protocol Bill is due to be on Report in the House of Lords, and I urge that all is done to secure its smooth passage. Many comments have been made about the DUP’s decision not to nominate a Speaker during the period when we have had no Assembly, yet no consideration has been given to cross-community support for this Bill. The Unionist community, which we in this House and in this party represent, are very clear about where we stand on these issues. There is no community support for this. Residents from other constituencies have contacted me to thank our party for standing up against the Northern Ireland protocol. This is not a Unionist issue, but one that impacts the Northern Ireland economy and its place in the United Kingdom. It restricts our local businesses from having free-flowing trade and, most importantly, it subjects our constituents to red tape and undermines their right to trade with their United Kingdom neighbours.
As the hon. Member for Walthamstow (Stella Creasy) spoke at some length on this issue, for the record, the Government did a consultation in Northern Ireland, and 79% of the people who responded from Northern Ireland were against any changes in the abortion law in Northern Ireland. The people of Northern Ireland were asked for their opinion and when the Government got their opinion, they ignored it. She does not care, of course, about the opinion of 79% of the people in Northern Ireland, but we already knew that. Opposition Members will know of our opposition to amendment 11, which was not selected. We are here to represent and speak for the 79% of people who objected to that.
I note with interest amendments 1 to 4 from the hon. Member for North Dorset (Simon Hoare) on MLA pay. I reiterate that we cannot stress enough that the notion that we might be moved back into government for monetary reasons is grossly misjudged. My right hon. Friend the Member for Lagan Valley (Sir Jeffrey M. Donaldson), the leader of our party and of our DUP group here, clearly said that we will not be bullied.
Simon Hoare
Let me rehearse the arguments. This is nothing to do with bullying, or whatever; it is about demonstrating a sense of fairness to taxpayers, so if people do only 50% of the work, they get only 50% of the pay. That is it.
Jim Shannon
The hon. Gentleman gives us his opinion. My opinion is clearly very different: we will not be persuaded, bullied or coerced—whichever way people want to put it—into something. As far as we are concerned, we have an objective that we want to achieve and a mandate from Northern Ireland, and we will deliver on our mandate.
Ian Paisley
Can my hon. Friend explain how removing the salaries of some MLAs will suddenly make the Assembly work, when under the terms of the Belfast agreement, which the hon. Member for North Dorset (Simon Hoare) obviously supports, we cannot have a working Assembly unless Unionists are part of it? I fail to understand the logic of that position. Does my hon. Friend understand it?
Jim Shannon
In the Unionist community that we represent, people are clearly not persuaded by the actions that have been taken. As their elected representatives in this House, we feel very strongly about the matter, and so do their representatives back home.
The existential threat to Northern Ireland is the root of the entire issue. The problem that other parties have is that the DUP is taking a principled stand against an issue that has proven detrimental to Northern Ireland. It should not be an issue that sends Northern Ireland back into the past and divide Stormont down the middle. The DUP has remained strong and certain on the protocol, and there are no plans to dodge the issue of MLA salaries.
Ian Paisley
Will my hon. Friend take the opportunity to reflect on the points that Front Benchers on both sides of the House have made about the Dublin criminal trial? Does he agree that if the current crisis were not going on, the trial would be an equally huge and significant crisis for the body politic not only of Northern Ireland, but of the Republic of Ireland? The Government really need to prepare themselves for the tsunami when the verdict eventually comes.
Jim Shannon
I thank my hon. Friend and colleague for reminding us of that important factor, which cannot be ignored. The leader of Sinn Féin across all Ireland, north and south, is a Member for her political party down south and has jurisdiction through her party in Northern Ireland as well, so what happens in Dublin will clearly have an impact on Northern Ireland. I therefore believe, like my hon. Friend and others, that we cannot ignore the issue in this House. That is the point that I think he was making, and I concur totally.
The DUP was proud to table new clause 7, but it was not selected for debate. It would have changed the date of the local government elections in 2023 to take into consideration the King’s coronation celebrations. Because Northern Ireland elections are conducted under proportional representation, counting takes significantly longer than is normal in other parts of the United Kingdom.
Stephen Farry
May I put it on the record that my party agrees with the DUP on the issue? There may well be some degree of consensus on a pragmatic reform to take into account the need to respect the coronation and respect the elections in Northern Ireland. I hope that that gives the Northern Ireland Office a hint.
Jim Shannon
Well, we have a consensus! I am pleased to hear that the hon. Member and his party concur with our opinion, so I hope that when the Minister of State replies to the debate he will give us a positive answer. It is important because if 4 May remains election day, the results will extend into coronation day. That is the very nature of what will happen back home, so it must be changed to ensure the public participation of candidates, the electoral office staff, who are an important part of it all, and the party supporters attending count centres. I urge the Government to take our proposal into immediate consideration for the sake of the celebration of the King’s coronation, and I thank the hon. Member for North Down (Stephen Farry) for his support.
The amendments that the DUP has tabled are for the greater good of Northern Ireland and our economic and constitutional position within this great United Kingdom. We hope that the Government will listen to us. They must be assured of our stealth and determination in regard to the damaging effect that the Northern Ireland Protocol Bill is having on Northern Ireland.
Tonia Antoniazzi (Gower) (Lab)
I thank all hon. Members for their contributions to the debate so far. It was only a few weeks ago that I was standing in this Chamber to close the debate on the Identity and Language (Northern Ireland) Bill; I shared my regrets that the Bill was being debated in this Chamber and not in Stormont. Hopefully today’s Bill will be a significant factor in the return to a functioning legislature in Stormont, but it would be remiss of me not to share again my disappointment that this House has been forced to act as a result of the political deadlock in Northern Ireland.
The restoration of the Executive is not simply about a restoration of process. The lack of an Executive has a very real impact on people’s lives in Northern Ireland. As my hon. Friend the Member for Walthamstow (Stella Creasy) has outlined, the delay in the commissioning of abortion services has meant that women are still being forced to cross the border to access essential services, long after they should have been able to access them in Northern Ireland. I pay tribute to my hon. Friend for her tireless work in raising the issue, and to the Minister for his words of commitment to addressing it by the time the Bill has passed through Parliament.
As Members have pointed out, Northern Ireland has longer NHS waiting times than any other UK region. Many will be aware of the particularly troubling figures relating to specialist women’s healthcare, with no trusts meeting the in-patient treatment targets for gynaecology. Owing to the lack of political leadership and power to reform the system, a significant proportion of women who suffer from life-changing illnesses such as endometriosis are having to pay for private healthcare, taking out loans and borrowing from friends and family so that they can simply live their lives without pain every day.
There are dozens, if not hundreds, of real-life examples of the detrimental impact that the lack of an Executive is having on the everyday lives of the people of Northern Ireland. The right hon. Member for Skipton and Ripon (Julian Smith) correctly described the Bill as an elastoplast—just a big plaster. While I welcome it, its words must be backed up by action from the Government, and I urge the Secretary of State to ensure that the restoration of the Executive at Stormont is at the top of the Cabinet’s agenda. As my hon. Friend the Member for Hove (Peter Kyle) said at the beginning of the debate, now is the time for the Prime Minister to show his commitment to the restoration of power sharing by visiting Northern Ireland, bringing together parties from across the political spectrum, and to take a lead in negotiations on the protocol. Belfast is not Blackpool, and he really does need to be there.
As the cost of living crisis deepens, the need for political leadership at Stormont becomes more urgent. We must have a commitment from the Government that they will use the additional time offered by the Bill well, and they must provide a clear plan for how they will work to restore the Executive.
The Minister of State, Northern Ireland Office (Mr Steve Baker)
My goodness, what an excellent debate this has been.
The hon. Member for Strangford (Jim Shannon) told us why we are here. “We are here because we do not have an Executive,” he said, “and we do not have an Executive because of the protocol.” With great respect to my hon. Friend the Member for North Dorset (Simon Hoare), the Chairman of the Select Committee, I think it must be said, on the basis of realistic observation of the factors at work, that the hon. Gentleman is right: that is indeed why we are here.
The shadow Secretary of State, the hon. Member for Hove (Peter Kyle), said that the Bill was the “least worst” option, and I agree with him. As has been said several times, this is not a position in which we would want to find ourselves today. I think that Members in all parts of the House and all parties represented here, including the Democratic Unionist party, have made it clear that they are devolutionists and would like the Executive to be back in power; but I will return to the protocol in a moment. The Bill is a responsible—if hugely regrettable—piece of legislation, but we wish we did not have to do this.
I will try to deal with as many of the points that have been made as possible, conscious that I will be dealing with the amendments themselves in Committee. The Labour Front Benchers asked how we would use this time, but I was extremely grateful to the hon. Member for Hove for referring to the need to engage with the concerns of Unionism. Let me also record my thanks to Minister Byrne, from the Republic of Ireland, who tweeted about the need to recognise those legitimate concerns—although we need to do that in a way that is acceptable to nationalism, and I was grateful to the Scottish National party spokesman, the hon. Member for Gordon (Richard Thomson), for referring to a move I had made in that direction. We need to have the humility to recognise the interests of our negotiating partners, and to say, as DUP speakers have said today, “Yes, we are willing to use our law to defend their interests.”
Since I have led myself on to this territory, I will just say that my right hon. Friend the Member for Skipton and Ripon (Julian Smith) made an exceptionally powerful speech, which I hope will be heard in the European Union. However, I also hope it will be heard together with the exceptional speech made by the right hon. Member for Lagan Valley (Sir Jeffrey M. Donaldson), the leader of the DUP. I think that anyone listening to his speech and appreciating that it was made in earnest—and, of course in good faith—will understand what forces at work here will allow us to restore the Executive in Northern Ireland, and restore it in a way that can endure and carry us through the 25th anniversary of the Belfast/Good Friday agreement. We all want to be there celebrating that agreement—I am pleased to see Members opposite nodding—with the institutions up and running. I think that all parties to the protocol, having listened to the speeches that have been made, can see very clearly those forces that are at work.
Members on the Labour Front Bench have asked us how we will use this time well. It is very clear how we need to use this time. We need to use it to persuade the European Union, and indeed ourselves, to work with great political resolve to deliver change on the protocol. This extension provides space for that further progress, and my right hon. Friend the Secretary of State and I will continue to work with our colleagues in the Foreign, Commonwealth and Development Office to that end. It has always been our preference to resolve issues through talks. The Foreign Secretary and Vice-President Maroš Šefčovič are speaking regularly and UK Government officials are having technical talks with the EU.
Ian Paisley
Can the Minister update us on how the talks on veterinary medicines are going? Will we have a solution on that before 16 December? Can he also outline whether any more of my constituents will be receiving VAT notices from the Republic of Ireland for goods on which VAT has already been paid in His Majesty’s territories here?
Mr Baker
The right hon. Gentleman makes his point with great clarity and force, but I think he encourages me to stray a little too far from the Bill on this occasion. If I recall correctly, I have replied to him on the question of veterinary medicines—whether through a parliamentary answer or a letter, I forget. I think I have signed off a reply, but I will check.
Officials are continuing to hold technical talks, but the reality is that there is still some distance between us, even though some of our technical solutions are relatively close. I say to Members on the Labour Front Bench that we need to continue to show resolve. Anyone watching this debate will see that a great degree of consensus has broken out on all sides. My hon. Friend the Member for North Dorset, the Chairman of the Select Committee, referred to our bromance, and although I have to tell him that he is not actually my type, people might like to observe the good will that exists in all parts of the House. We all want to get the protocol resolved so that we no longer have to talk about it, get the Executive up and running and move on to providing the good government that the people of Northern Ireland deserve.
Before moving on to other contributions, I want to join Labour Members in thanking the PSNI, particularly in the difficult circumstances it has recently faced.
With great respect to my right hon. Friend the Prime Minister, I do not think that his visiting Belfast and holding multi-party talks will be a silver bullet. We can see plainly what the obstacle is to the formation of the Executive, and we need to focus our efforts on the European Union. I should just say that the Prime Minister’s attendance at the British-Irish Council in Blackpool was the first such attendance by a Prime Minister since 2007, and I am grateful that he had the opportunity to meet the Taoiseach.
The Chairman of the Select Committee, my hon. Friend the Member for North Dorset, made a point about the normalisation of politics, which elicited an interesting response from the leader of the DUP, the right hon. Member for Lagan Valley. We have to be extremely clear that we are always going to uphold all three strands of the Belfast/Good Friday agreement, and the right hon. Gentleman set out clearly that that involves the consent of all communities. During my short experience of being in Northern Ireland, I have heard from the public there—and from a number of Members here, including the hon. Member for Belfast South (Claire Hanna)—that people are clearly in the market for normal political government that concentrates on public services, and that there is a desperate need for that. I am grateful to my hon. Friend the Chairman of the Select Committee for making that point.
The role of the Irish Government was brought up by my right hon. Friend the Member for Beckenham (Bob Stewart). I want to be absolutely clear that we are not considering joint authority, nor will we. We have kept the Irish Government apprised of our plans to maintain public services in Northern Ireland in the absence of Northern Ireland Ministers. The Irish Government share our commitment to devolution and the Good Friday agreement. We are pleased that we have begun to transform our friendship and relationship with Ireland, and we will continue to do so.
A number of Members, and particularly the hon. Members for North Down (Stephen Farry) and for Strangford (Jim Shannon), raised the position that officials will find themselves in. We recognise that civil servants should not ideally be put in a position where they need to take political decisions themselves, but we simply cannot bring forward this further extension without taking measures to ensure that some decisions can be taken in the meantime. We believe that the Bill provides Northern Ireland’s civil servants with the clarity they require in order to take the limited but necessary decisions to maintain the delivery of public services during this period.
Gavin Robinson
I want to raise an important amendment that was tabled but not selected for consideration in Committee, on the Grenfell remediation scheme for non-aluminium composite material cladding. The money was distributed and then reallocated in Northern Ireland because the scheme was not in place. There are ongoing discussions with Whitehall. This is a public safety issue and, given that there was a fire in Belfast’s Obel Tower just two days ago, it needs urgent attention. Can we remove party politics and, if we are not going to get traction with this Bill, at least have a commitment from the Minister and the Secretary of State that they will turn their urgent attention to this?
Mr Baker
The hon. Gentleman knows that the Government care very much about this issue, as he does. This is a good moment to say the Bill is absolutely not taking powers for this Government to direct what happens in Northern Ireland on any particular policy, which is a good reason to come on to the issue raised by the hon. Member for Walthamstow (Stella Creasy), whom I congratulate on her victory in providing abortion in Northern Ireland. Before the Bill completes its passage through the other House, we will have commissioned services in Northern Ireland, but the Bill does not give Ministers of this Government the power to direct what is delivered by the Northern Ireland Department of Health, which will find that it is compelled to commission abortion services, but many of the questions she raises will be properly decided in Northern Ireland. That still relies on the Executive reforming to get the work done. We will commission services and, of course, the Secretary of State and I will continue to take a close interest in how those commitments are carried through and delivered.
The hon. Member for East Londonderry (Mr Campbell) raised the issue of Sinn Féin MPs, and he talked about a figure of £10 million, which I do not recognise, so I would be grateful if he provided a breakdown so that I can consider what he said. Sinn Féin MPs are not paid salaries, because they do not take their seats. If we were to treat MLAs similarly, we would presumably reduce their salaries to zero, which is not our intent. We will have an evidence base when the Secretary of State makes his determination, and that evidence base is not likely to recommend the complete removal of salaries. We have chosen, for good, technical reasons, not to connect our measures to pensions. Of course, other measures, such as allowances, will continue.
Mr Gregory Campbell
I accept what the Minister says about Sinn Féin MPs not getting salaries but, if there is to be a reduction, we cannot reduce something that is not given. The only thing they get is representative moneys and allowances. No attempt at all has been made to cut those moneys and allowances for not doing their job, despite repeated attempts to raise it with successive Leaders of the House.
Mr Baker
The hon. Gentleman makes his point with great passion, and I think we agree with one another that it is not a good thing to have abstentionist MPs, although I have to say I have met Sinn Féin MPs a number of times in London and found them to be very constructive—to a much greater extent than I expected. They do not draw any pay, and we do not anticipate reducing the pay of MLAs to zero, nor do we anticipate taking away their allowances. Members of the public watching this debate will see that we are behaving reasonably in relation to MLAs.
I thank everyone who has participated in this debate. We are absolutely determined to do what is necessary to restore the Executive in Northern Ireland, which is going to mean reaching a negotiated conclusion on the protocol, and I look forward to doing so.
Question put and agreed to.
Bill accordingly read a Second time; to stand committed to a Committee of the whole House (Order, this day).
Northern Ireland (Executive Formation etc) Bill
Tuesday 29th November 2022
(2 years ago)
Commons ChamberRead Full debate Northern Ireland (Executive Formation etc) Act 2022 View all Northern Ireland (Executive Formation etc) Act 2022 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 29 November 2022 - (29 Nov 2022)
The First Deputy Chairman of Ways and Means (Dame Rosie Winterton)
With this it will be convenient to discuss the following:
Amendment 10, in clause 2, page 1, line 15, leave out “19 January 2023” and insert
“a date set out in regulations by the Secretary of State”.
This amendment gives the Secretary of State discretion to set a later deadline for the filling of Ministerial Offices.
Clause 2 stand part.
Amendment 13, in clause 3, page 2, line 25, at end insert—
“(5A) Guidance under subsection (4) must require senior officers of a Northern Ireland department who exercise a function in reliance on subsection (1)—
(a) to notify in writing members of the Northern Ireland Assembly and Members of Parliament representing constituencies in Northern Ireland on each occasion that they exercise such a function, and to set out their justification and rationale for exercising the function, and
(b) to make themselves available to answer expeditiously any questions regarding their exercise of the function put by members of the Assembly or Members of Parliament representing constituencies in Northern Ireland.”
Amendment 7, page 2, line 28, after “Assembly” insert
“and have due regard to the views of the First Ministers designate (the leaders of the two largest groupings elected to the Northern Ireland Assembly).”
This amendment would require the Secretary of State to have due regard to the First Ministers designate, defined as the leaders of the two largest groupings elected to the Northern Ireland Assembly, who are entitled to nominate the First Minister and the deputy First Minister.
Amendment 8, page 2, line 28, at end insert —
“(7) Any representations made by Members of the Northern Ireland Assembly under subsection (6) must be published by the Secretary of State, who must also place a written report of those representations in the library of the Northern Ireland Assembly.”
Clauses 3 to 9 stand part.
Amendment 1, in clause 10, page 5, line 22, leave out “may” and insert “must”.
The intention of this amendment is to require the Secretary of State to make a determination reducing the salary of Northern Ireland Assembly Members during a period in which the Northern Ireland Assembly is not functioning.
Amendment 2, page 5, line 24, leave out
“in respect of some or all of that period”
and insert
“with effect from 1 January 2023 (unless the Northern Ireland Assembly is functioning by then)”.
Amendment 3, page 5, line 28, at end insert—
“(2A) The first determination must reduce by 50 per cent the salaries of Northern Ireland Assembly Members payable during a period in which the Northern Ireland Assembly is not functioning.”
Amendment 4, page 5, line 40, leave out
“would have had were it not for”
and insert “have had under”.
The intention of this amendment is to link the pension entitlement of Northern Ireland Assembly Members to the salary they actually receive.
Clauses 10 to 15 stand part.
New clause 1—Report to Northern Ireland Affairs Select Committee—
“(1) The Secretary of State must provide a written report to the Northern Ireland Affairs Select Committee of the House of Commons about the exercise of departmental functions under section 3 of this Act, no later than six weeks after the date on which this Act is passed, and thereafter at intervals of no more than six weeks until Ministerial appointments are made to the Executive.
(2) In this section ‘the Northern Ireland Affairs Select Committee of the House of Commons’ means the Select Committee of the House of Commons known as the Northern Ireland Affairs Select Committee or any successor of that committee.”
New clause 3—Consultation with First Ministers designate—
“The Secretary of State must have due regard to the views of the First Ministers Designate (the leaders of the two largest groupings entitled to nominate First Minister and deputy First Minister) in issuing guidance under section 3 of this Act.”
New clause 6—Reports on progress towards forming an Executive—
“(1) The Secretary of State must, on or before 8 December 2022, publish a report explaining what progress has been made towards the formation of an Executive in Northern Ireland (unless an Executive has already been formed).
(2) The Secretary of State must lay a copy of each report published under subsection (1) before each House of Parliament by the end of the day on which it is published.
(3) The Secretary of State must make a further report under subsection (1) on or before 19 January 2023.
(4) For the purposes of this section an Executive is formed once the offices of the First Minister, deputy First Minister and the Northern Ireland Ministers are all filled.”
Mr Steve Baker
In speaking in favour of clause 1 standing part of the Bill, I do not propose to go through the Bill clause by clause and elaborate on its purpose, because the Secretary of State has not long done that during the debate on Second Reading. I also sense that Members have already spoken to the content of many of the amendments, so I propose to conclude my initial remarks now and then come back to the amendments in detail at the end of the debate.
Gavin Robinson
I wish to speak to the amendments in my name and those of my party colleagues. I have a sense from the way in which some colleagues have gathered that they are interested in an accelerated conclusion to proceedings, but I know that nobody would want to deny us the opportunity to talk to important matters that affect the Province and governance in Northern Ireland.
I suspect that the conclusion to our consideration of amendment 13 will be positive and allow Members to retire gracefully from the Chamber. Until we get there, however, it is important to say that I hope that Members were able to discern on Second Reading that there is agreement across the parties on the content of a whole range of amendments—some in scope, some out of scope —tabled for Committee. A number of the amendments are remarkably similar in intent and import. Whether we are Members of the Social Democratic and Labour party, the Alliance party or the Democratic Unionist party, there is common ground to be had among all of us in this Committee stage and in other areas that fell outside consideration. If there is any encouragement to be taken from these proceedings, that should be it.
Amendment 13 is important, given that what we have in governance at the moment is suboptimal. There are ways in which we can enhance the governance oversight and democratic accountability of decisions taken through this Bill. We are asking that the Northern Ireland Office consider incorporating and involving Members of Parliament and Members of the Legislative Assembly in the decisions taken and in notifying us accordingly. That is the import of amendment 13.
Gavin Robinson
I know that the Minister has considered amendment 13 and that he has published helpful guidance, which he may wish to address now.
Mr Baker
Yes, we published the guidance as my right hon. Friend the Secretary of State was making his opening remarks. I draw the House’s attention to paragraph 15 of the draft guidance, which says that records should be kept of decisions that have been taken by officials. It goes on to say:
“A monthly summary report of decisions taken using the Guidance should be prepared by NI Departments and shared with the Secretary of State. The Secretary of State will promptly make these reports available to Parliament.”
We will be very happy to append “and MLAs”, and I hope that the guidance, as we aim to amend it, meets the aims and intentions of the hon. Gentleman’s amendment.
Gavin Robinson
We are almost there. I am very grateful to the Minister for that clarification. Clearly, the guidance says that the reports will be made available to Parliament. In our normal understanding, that would mean laying those reports in our Library. If we are incorporating MLAs, I think it would also be appropriate for relevant MPs who have expressed an interest in the passage of this Bill and who are from Northern Ireland to be able to get access to those reports. That means making them available in the Libraries of the House of Commons and the House of Lords, and to the Northern Ireland Assembly and relevant representatives.
Gavin Robinson
Dame Rosie, you can see that there is a willingness and desire to move things along. I am very grateful to the Minister and to the Secretary of State for their engagement. That is a helpful clarification on the guidance.
As I mentioned tangentially during an intervention I made on Second Reading, a number of amendments that were tabled fell outside the scope of the Bill, but I hope that the Northern Ireland Office will engage with us and colleagues across the House pragmatically over the next few weeks, because these issues are not going to go away and need to be resolved.
The First Deputy Chairman of Ways and Means (Dame Rosie Winterton)
I call the Chair of the Northern Ireland Committee.
Simon Hoare
I rise to speak, Dame Rosie, while trying to maintain my composure, having been rejected by the Minister of State, but I am sure that both he and I will cope.
I wish to speak in support of the clauses in my name and the name of my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland), although I will not be pushing them to a Division. Let me take a moment to underscore the underlying principle of these amendments and to address front and centre the erroneous assertions of the hon. Member for Strangford (Jim Shannon) and the right hon. Member for Lagan Valley (Sir Jeffrey M. Donaldson): these are not bullying tactics. I am pretty certain that most people who have an interest in this area will have been receiving emails and other communications from people across the divide and across the communities in Northern Ireland making a very simple point—a point that is underpinned by these amendments. The point is that no other employee in the public sector would say that they were prepared to do 50% of the job, but that they want 100% of the pay. Nobody who says that they are prepared to do 50% of the job but still want 100% of the pay would also then expect to get the full whack on the pension as well. If the pay is reduced, there should be a concomitant reduction in pension. It may well be that pension law precludes that, and the Minister of State might have suggested that that is the case.
We all know that there are powers in statute law, and clause 10 (1) says:
“During a period in which the Northern Ireland Assembly is not functioning, the Secretary of State may make a determination”.
Amendment 1 says that he “must” make a determination. The Secretary of State may make a determination not to do anything at all, but I want him to confirm that he will be looking at this issue, commissioning the evidence, coming to a conclusion and sharing it with this House and others. It is an important principle. We are all recipients of taxpayers’ money, and taxpayers’ money is always a precious commodity, and never more so than at a time of economic uncertainty, heightened prices, inflation and rising interest rates.
We need to make sure that those who seek election—nobody forces us to take up the burden and the privilege of public service—are prepared to shoulder that full burden, to put their shoulders to the wheel, to work as hard as we damn well can in order to address the needs of all of our constituents wherever they may happen to reside, and to discharge our duties, whether it be in Stormont or in this place, to the benefit of the wider community outside the narrow boundaries of our constituencies.
Sir Robert Buckland (South Swindon) (Con)
I am grateful to my hon. Friend for outlining the amendments that I support. Does he think that there seems to be some misunderstanding by DUP Members about the amendments that we have tabled? Amendment 9 could be argued to be somewhat discriminatory when it comes to various Members of the Legislative Assembly, but the amendments that we have tabled in my hon. Friend’s name do not seek to discriminate in any way at all.
Simon Hoare
I agree with my right hon. and learned Friend. We have sought to be equal across the piece. On a personal note, I have some considerable sympathy with those MLAs who have made representations to me over these past eight, nine or 10 hours. They say, “We want to be there. We want to be addressing the issues of health, housing, transport, infrastructure, encouraging inward investment, growing the economy, and making sure that the prosperity dividend of the peace process is felt across the communities of Northern Ireland. Why should we be held up from doing so because of one party?” Indeed, the artist, Sara O’Neill, sent me a message this morning to say that, as the protocol—the principal, legitimate concern of the DUP—is reserved to this place, and nothing to do with Stormont, would it not make more sense for the DUP to boycott Westminster and not Stormont?
Simon Hoare
I will not give way, because I want to be quick.
That is the principle underlying these amendments. I hope the Secretary of State will use his powers and use them speedily, because a message must be sent to the taxpayers of Northern Ireland that, if no one else is on their side, this place is.
Tonia Antoniazzi
I rise to speak to new clause 6 in my name and that of the shadow Secretary of State. I will not repeat too much of what was said on Second Reading; the Labour party has accepted the need for this legislation and, as its measures are so time limited, we do not think it needs significant changes. The Government have been clear that they have used previous Executive Formation Acts as the basis for this Bill. Our probing amendment has taken the same approach and is based on a section the Government put into the Northern Ireland (Executive Formation etc) Act 2019.
New clause 6 would simply require the Secretary of State to publish a report explaining what progress has been made towards the formation of an Executive in Northern Ireland if the deadlines in the Bill are passed without one being formed. As my hon. Friend the Member for Hove (Peter Kyle) has set out, we need to hear from the Government how they will use the extra time this Bill gives them.
During the oral statement at the beginning of this month, the Secretary of State made several commitments at the Dispatch Box in response to Labour suggestions. We are really happy to work constructively with the Government on how we approach Northern Ireland. He said he would be happy to convene multi-party talks and request that the Foreign Secretary brief the Northern Ireland parties on protocol negotiations. He will know that those would be very constructive steps, but it is not clear if they have been taken yet.
As these debates have shown, there is a wealth of history to learn from on how the Government can move things forward. In the other place, my good friend Lord Murphy, who was very involved in the peace process, had this advice for the Government:
“The one thing I would stress in what I ask the Minister is that the negotiations themselves should be very different from what has occurred over recent months. First, there should be a proper process and plan, and there should be a timetable and a structure. There has been ad hocery, if you like, over recent months”.—[Official Report, House of Lords, 14 November 2022; Vol. 825, c. 760.]
The deadlines in this Bill mean there is no more room for ad hocery. In 2019, when there was no Executive, the Government convened more than 150 meetings in a nine-week period. Similar ambition is needed now, and the House must be kept updated.
Sir Jeffrey M. Donaldson
I had not intended to speak, but I really cannot allow the comments made by the Chair of the Select Committee to go without challenge. For someone who has chaired a Committee specifically on Northern Ireland for a number of years to state to this House that the protocol has nothing to do with the Northern Ireland Assembly is frankly amazing. The Northern Ireland Executive are responsible for implementing key elements of the protocol. The Assembly has a legislative role in relation to elements of the protocol and a four-year duty to decide whether the provisions of the protocol are to continue or not. For someone who ought to know better to suggest that the Assembly has nothing to do with the protocol is amazing.
Simon Hoare
I said the Assembly had nothing to do with the negotiation of the protocol. That is reserved to Ministers in this place. On the implementation, of course, the right hon. Gentleman is absolutely right, but the negotiations are reserved to the United Kingdom Parliament. That is the point I made; it was not about the implementation.
Sir Jeffrey M. Donaldson
The implementation is the problem. The negotiation, hopefully, will deliver the solution. Therefore, we cannot divorce the Assembly from the impact the protocol is having, and it is simply unrealistic to do so.
Sammy Wilson
It is surprising that the Chair of the Select Committee has so little knowledge of something that we would expect him to be able to talk about with some degree of clarity. Does my right hon. Friend accept that it would be totally unreasonable to ask Unionists—who are opposed to the protocol and who believe it damages the constitution and their position in United Kingdom and hurts the economic standing of every citizen in Northern Ireland—to implement the thing to which they are so opposed?
Sir Jeffrey M. Donaldson
Not only would that be unreasonable, but those Assembly Members were elected on a mandate not to do so.
Claire Hanna
Does that mandate extend to the former Minister at the Department of Agriculture, Environment and Rural Affairs who, while government was being withheld from people, was writing to UK Government Ministers asking for portions of the protocol to be retained, to benefit financially farmers such as himself?
Sir Jeffrey M. Donaldson
Actually, that is not what the former DAERA Minister said. He recognised that the protocol is not working and is harming agriculture. Our farmers cannot bring seed potatoes from Great Britain into Northern Ireland, and there are many other restrictions on the movement of livestock and so on. The point he was making was that there should be no restriction on state aid support for farmers in Northern Ireland as a result of the protocol Bill—not as a result of the protocol.
We can go around in circles on all this. We can train-spot on MLA pay all day long, but the reality is that we are missing the train coming down the track. And the train coming down the track is the lack of consensus enabling the political institutions to function properly. That is what we need to resolve. The Bill allows more time for the solution to be found, and that is what we need to happen. We need the solution.
Stephen Farry
Members will be pleased to know that I will be extremely brief. I will touch on a few points.
First, I will not repeat the arguments for amendment 10 given that I mentioned them on Second Reading, but I invite the Secretary of State or the Minister to respond to the substance of it when they wind up. I hope they will reflect on what I and the shadow Secretary of State, the hon. Member for Hove (Peter Kyle) have said about not boxing themselves in for what lies ahead.
Beyond that, I stress that there is a need for some degree of ad hoc scrutiny in what happens over the coming weeks and months. With respect to my DUP colleagues, amendment 13, taken literally, is somewhat onerous, but there is also an elephant in the room: our best means to scrutinise decision making in Northern Ireland is to have a fully functioning Assembly.
Mr Baker
First, I thank Members opposite for being constructive in dealing with Northern Ireland issues while also holding us to account. They are holding us to account on new clause 6 in particular, and have asked us to provide reports. We propose instead to make statements to Parliament, including oral statements. Those Members know that they are very welcome to be in touch with us with suggestions. Clearly, we do not want to be in here every day—nor would we need to be—but we would wish to make statements so that Parliament is properly informed. The Secretary of State and I are fully committed to working constructively with the House.
Turning to amendment 10 on indefinite extension, it is not the intention of the legislation to create indefinite or undefined extensions to the Executive formation period. We are deeply aware that the previous political impasse dragged on for three years, and we cannot allow that to happen again.
Julian Smith
My hon. Friend is absolutely right. We are in the last-chance saloon. We have all seen that political decision making on public services is required now. There is a short period, I would argue, for a negotiation on the protocol, and then we need to get back to an Executive. All these amendments are fine, but the only thing we have to achieve is a deal with the EU that allows our colleagues in the DUP to get back into the Executive.
Mr Baker
I wholeheartedly agree with my right hon. Friend. Getting that deal will require us, as we have said several times, to respect the legitimate interests of our negotiating partners while also delivering on the legitimate interests of Unionists. I am extremely grateful to him for his support.
Stephen Farry
I want to press the Minister on that point. I fully accept his point that the legislation being open-ended is not desirable in any sense, but, equally, we are seven weeks away from the 18 January deadline. If he is genuinely telling us that he believes we will have a full outcome in that period, that is great, but surely he recognises that that may not be the case and that it would be best not to box himself in entirely.
Mr Baker
I certainly recognise that we may not reach a deal, and that is why the Northern Ireland Protocol Bill continues its passage in the other place, but the reality is that we cannot allow ourselves to drag on with indefinite extension. The people of Northern Ireland deserve good government, and that is why the legislation is drafted to create a short, straightforward and defined extension to the period for Executive formation. I very much hope that we will conclude an agreement, reform the institutions and then move forward.
Sir Geoffrey Cox (Torridge and West Devon) (Con)
I had the great privilege a little while ago of being the Advocate General for Northern Ireland, and I recall in the same situation the Chief Justice of Northern Ireland saying to me that there was a serious problem in the appointment of Northern Ireland barristers to the rank of King’s counsel. Can my hon. Friend give me the assurance that he and my right hon. Friend will be in close touch with the Chief Justice of Northern Ireland and that there will be no impediment to the appointment of King’s counsel in the province? It is very important from the point of view of judicial appointments generally that that first rung on the ladder is not obstructed or delayed.
Mr Baker
The Secretary of State is well aware of the issue that my right hon. and learned Friend raises. I am grateful to him for putting it on the record, and we will certainly take up the point that he makes.
We do not think we can anticipate all the decisions that civil servants will need to take, so this House should not try to start prioritising some decisions over others. We are clear, however, that we want to restore the Executive with locally accountable politicians taking those political decisions. Amendment 13 concerns reporting on decisions taken. In my intervention on my friend the hon. Member for Belfast East (Gavin Robinson), we reached a conclusion on what we will do through the guidance in paragraph 15, and I look forward to amending the guidance when it is published in its final form.
On amendment 7 and new clause 3 and having “due regard” to the views of the First Minister designate and the Deputy First Minister designate, the essential issue is that the Belfast/Good Friday agreement does not recognise any position of First Minister designate or deputy First Minister designate, nor a joint office of First Ministers designate, so it would not be appropriate to refer to those positions, which do not exist in this expedited legislation. There is also no reference in the Belfast/Good Friday agreement to leaders of groupings.
Clause 3 as drafted already requires the Secretary of State to have regard to representations made by any MLA, and that will allow views from across the political spectrum to be put forward, including but not limited to the leaders of the largest parties in the two largest designations within the Assembly. On other occasions, Members have conceded that the Secretary of State and I have been engaging widely with Members, and we will be glad to continue doing so.
Amendment 8 and new clause 1 are about publishing representations of MLAs and providing a report to the Northern Ireland Affairs Committee. I can assure the hon. Members for Foyle (Colum Eastwood) and for Belfast South (Claire Hanna) that the Secretary of State will treat the duty with all the seriousness it deserves as we provide guidance to senior officers on the exercise of departmental functions in relation to clause 3(1). We do not think that publishing representations from MLAs themselves is a proportionate or necessary step. I would also make the same point about the hon. Members’ new clause 1, which would require a specific report to the Northern Ireland Affairs Committee on decisions taken. As we discussed earlier, reports will be made available through the Secretary of State to MLAs, Members of Parliament and through Libraries, as we discussed earlier.
We have already had a fairly wide-ranging discussion of MLA pay, but what I would say to my hon. Friend the Member for North Dorset (Simon Hoare), the Chair of the Select Committee is that my right hon. Friend the Secretary of State has a real zeal for this issue. He will need to make a determination, and I know that he will consider the current evidence base, but also I am confident that he will instruct officials to look for further evidence on the level of remuneration that MLAs should receive while they are not sitting and carrying out their full duties. We have heard some reasonable arguments about what that will mean for people who are less well off, and I know that my right hon. Friend will bear all of that in mind when he makes his determination. However, I should like to reassure my hon. Friend the Chairman of the Northern Ireland Affairs Committee about all of his amendments and say that his zeal is matched at least by that of my right hon. Friend.
My hon. Friend the Member for North Dorset mentioned pension entitlements. Although it is perfectly reasonable to raise that, and we have considered the issue, the amendment would have a number of unintended consequences, which we do not have the powers to mitigate. We have therefore legislated to avoid those consequences.
I am extremely grateful for a wide-ranging and constructive debate. We have addressed a wide range of amendments to this short Bill, and they are all constructive. I am grateful to hon. Members above all for their forbearance on the compressed timescale that has been necessary for these measures.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clauses 2 to 15 ordered to stand part of the Bill.
The Deputy Speaker resumed the Chair.
Bill reported, without amendment.
King’s Consent signified.
Bill read the Third time and passed.
Business without Debate
Committees
Madam Deputy Speaker (Dame Rosie Winterton)
With the leave of the House, we will take motions 6 to 16 together.
Ordered,
Business, Energy and Industrial Strategy
That Tonia Antoniazzi be discharged from the Business, Energy and Industrial Strategy Committee and Ian Lavery be added.
Education
That Angela Richardson be discharged from the Education Committee and Nick Fletcher be added.
Foreign Affairs
That Saqib Bhatti be added to the Foreign Affairs Committee.
Health and Social Care
That Dr Luke Evans be discharged from the Health and Social Care Committee and Paul Bristow be added.
Justice
That Ms Diane Abbott and Laura Farris be discharged from the Justice Committee and Janet Daby and Edward Timpson be added.
Human Rights (Joint Committee)
That Florence Eshalomi be discharged from the Joint Committee on Human Rights and Bell Ribeiro-Addy be added.
Levelling Up, Housing and Communities
That Florence Eshalomi be discharged from the Levelling Up, Housing and Communities Committee and Nadia Whittome be added.
Northern Ireland Affairs
That Stephanie Peacock be discharged from the Northern Ireland Affairs Committee and Tony Lloyd be added.
Public Accounts
That James Wild be discharged from the Committee of Public Accounts.
Science and Technology
That Zarah Sultana be discharged from the Science and Technology Committee and Christian Wakeford be added.
Women and Equalities
That Theo Clark and Philip Davies be discharged from the Women and Equalities Committee and Dr Jamie Wallis and Mark Jenkinson be added.—(Sir Bill Wiggin, on behalf of the Selection Committee.)
Petition
Illegal Money Lending
(2 years ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Paul Maynard (Blackpool North and Cleveleys) (Con)
It is a pleasure to serve with you in the Chair, Madam Deputy Speaker. I will endeavour to make concision my watchword, with my eye half on the clock, but I want to give this issue an airing. Illegal money lending is a growing and pernicious problem in constituencies such as mine, but it receives little attention and is almost surrounded by stigma. I am grateful to the Centre for Social Justice for its assistance in preparing for today’s debate, particularly Matthew Greenwood, who authored an exceptional report on the issue.
On the surface, illegal money lending sounds as though it might be a rather low technical offence—lending money as a business without approval from the Financial Conduct Authority. In practice, however, it is a frequently devastating crime that sees the exploitation of the financially vulnerable and carries with it deep financial, mental and physical costs. No two cases of illegal money lending are the same, but, in England today, the Centre for Social Justice estimates that up to 1 million people could be borrowing from an illegal money lender. Those people each experience illegal lending in their own way and for their own reasons. It is dangerous to over-generalise and I will try to avoid doing so.
Anyone can be the victim of an illegal money lender—indeed, anyone can be an illegal money lender—but known victims tend to share a number of common experiences. Just over 60% have an income below £20,000 a year and almost half live in social housing. That constitutes a large proportion of my constituency, as Blackpool has eight of the 10 most-deprived neighbourhoods in the country. Illegal money lending is a danger that stalks every street in the centre of Blackpool. It is a risk to almost every home, but those who are often the victims have limited awareness of it.
Sometimes illegal money lenders are called loan sharks, but I am not fond of that phrase, because the problem is much more insidious than the almost-cartoonish quality of “loan shark” suggests. The lender is not an unknown quantity circling menacingly outside the front door; too often, they are a friend or relation popping round for tea and sitting on the sofa. When people are struggling to afford the costs of everyday items and bills, and often unable to access credit, they turn to someone they know and consider a friend, or even a family member they trust, but they are deceived.
Simply, that lender is not a friend, but a fraud who deceives their victims with an offer of financial support that does not materialise in practice. Having advanced money to their customer illegally, the lender does not adhere to the stringent credit regulations put in place more widely to protect consumers but exploits their sense of obligation to repay for financial gain.
We have an excellent illegal money lending team in this country, who I know the Minister supports and works with closely. They can evidence annual percentage rate repayments into the thousands, as people are emotionally manipulated into a deep sense of obligation to repay a so-called mate who once ostensibly helped them out.
Jim Shannon
I commend the hon. Gentleman for bringing this forward. In Northern Ireland, we have real problems with illegal money lending, and paramilitaries are usually involved. People on estates are desperate, with energy prices and everything else rising to a level that is absolutely beyond their means, and they think the only way out is via illegal money lenders. In these trying times, with the rise in the cost of living, many may be tempted to go down this route for a quick loan, so does he agree that more needs to be done—I am looking forward to the Minister’s response—to make people aware of the damage that loan sharks can cause? A £100 loan could mean an £800 repayment, and that is outrageous.
Paul Maynard
I thank the hon. Member for his intervention. As ever, he speaks a lot of sense. His evidence from Northern Ireland shows why we cannot generalise about this issue—there are specific circumstances there—but I join him in looking forward to the Minister’s reply, and I am sure those points will be taken on board.
I was struck by one example in which an illegal lender took all a young girl’s money in repayments because she felt obliged to him, as he had taken the effort to go round and put drops into her pet dog’s eyes because she could not manage it herself. What an awful situation to be in. Coercion and intimidation are all too often encouragements to repay, and that should not be the case.
What about when a victim cannot pay? Illegal lenders have been known to add arbitrary late fees, causing the debt to spiral out of control, and to threaten their victims and even demand sexual favours. I know the Minister is more than familiar with the practices of illegal lenders and their economic abuse, but for the benefit of a wider audience, let me tell the House about Michelle. Michelle met her lender on the school playground. She needed money and her friend—her lender—offered to meet that need. She thought she was borrowing from a friend. When she struggled to repay, her lender made it her business to know when money went into her account so they could make her repay. The more she repaid, the more she needed to borrow, but that was not all. Michelle received threats, and she had her windows smashed. As she tried to sleep at night, she was shouted at, making her own home an unsafe place to stay. It got so bad that Michelle and her two children were put into temporary housing. Why? Because she borrowed £50.
I raise these issues not only because they are a blight on our communities, but because we are facing an increase in the cost of living. Those on the sharpest edges will be pushed further away from financial inclusion and the legal credit market into the hands of the most unscrupulous. I very much welcome the financial support that the Government have already given to support people’s incomes, but we must do all we can to prevent illegal money lenders from taking hold by supporting the illegal money lending team to do its job and provide long-term, scalable market solutions to financial exclusion.
The illegal money lending team is a specialised body equipped to identify and prosecute illegal money lenders, but its current scale is insufficient to meet rising demand. Money is scarce, but support to improve the team and its data capabilities would go a long way to improve understanding of this issue and better tackle it. I know the Minister will be aware of the consumer credit levy that raises funds for the team, but perhaps funds could be found from elsewhere in the Department, even in these straitened times. Another part of this support must surely be improving the quality of debt advice and its ability to identify clients who are borrowing from illegal lenders.
It is worth touching briefly on the Help to Save scheme, which is one of my pet favourite projects of the entire Government. It is a fantastic mechanism by which people on universal credit and some legacy benefits can save for a rainy day. To date, His Majesty’s Treasury reports that the scheme supports almost 360,000 people, but this is well below 10% of even those on universal credit. Improving access to and the uptake of this solution to financial resilience is a priority.
May I make a wider point? I have participated in numerous online sessions, meetings there, speeches—you name it—and often all I hear is how we remedy the consequences of poor financial resilience, not how we avoid it in the first place. Help to Save should be front and centre in all our debates about this, not waiting for things to go wrong when we could solve them further upstream. I urge the Minister, as he is new to the job, to make Help to Save a personal passion, because it can make so much of a difference to so many lives.
Finally, let me touch on credit unions and the consumer credit market more widely. Accessing credit should be something that everyone can do. It should not be stigmatised as wrong for certain types of people, as sadly I often hear in this place. We need to do much better through innovation at ensuring that those who most need credit can access credit that is affordable, and that successful repayments can open the door to future, cheaper forms of credit. That journey—the focus of the much lamented and unadvanced Woolard review—is crucial if consumers are to steer clear of illegal lenders.
Part of creating a healthy credit ecosystem is emphasising the role of credit unions, which are strong, community-focused organisations that offer low-cost, alternative credit. However, they are not currently up to the task of plugging the entire credit gap because of over-prescriptive legislation that is both old and in need of modernisation, as well as designed in such a way that it limits their growth, scalability, size and membership.
I know that this is an area of work that the Minister is taking an interest in, and I welcome the provisions in the Financial Services and Markets Bill, which he is shepherding through the House. The Bill will help to expand credit unions’ coverage across the credit spectrum and improve access to services, but if we are to truly scale these lending bodies, we need to reimagine what is called the common bond. By tweaking existing legislation to allow credit unions to have a maximum membership rather than a maximum potential membership, we might allow them to cover a wider geographic area, pool their talent into bigger, more professional bodies and compete with one another to offer the best services. That would create scale, and it seems to me to be a sensible, market-oriented Conservative policy. If only we had so many more of them at the moment. Come along—it cannot be that difficult.
More widely, it is important that the consumer credit market is fit and able to serve customers across the credit spectrum. I urge the Minister to undertake work to see whether the Bill can be adjusted to accommodate those views. Reimagining the common bond, promoting strategic mergers and supporting the illegal money lending teams to clamp down on illegal lenders are small tweaks. I know that those are issues that he takes seriously. I hope—I ask this in every Adjournment debate—he will meet with me and the Centre for Social Justice to discuss how we can take this agenda forward. I thank him for his time today and for listening to me. I thank hon. Members present and hope that, as I have been concise, the staff of the House can make it in time for kick-off.
The Economic Secretary to the Treasury (Andrew Griffith)
It is a pleasure to speak in this debate. I congratulate my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard), who has a distinguished record in advocating for this subject that is matched only by his distinguished record in speaking up for his constituents.
As my hon. Friend so persuasively explained, loan sharks—he prefers to call them illegal money lenders, so I will do so going forward—can at best use unfair, hidden fees and sky-high interest rates and, at worst, some of the much more aggressive practices that he talked about. The Government recognise many of the concerns that he outlined, and I recognise them from stories that I have heard.
Illegal money lenders prey on the most vulnerable people, which is one of the saddest things about this particular form of crime. As we heard in the case of Michelle, it causes the victims great harm and distress, as well as inflicting damage on the wider communities—sometimes, those communities already face adversity—in which they operate. It is a devastating crime.
This is not a novel issue affecting only some. Only recently, I too met the Centre for Social Justice, including Matthew Greenwood, who has produced an excellent report, to listen to the findings about the prevalence of illegal money lending in England. I want to be absolutely clear with the House that lending money without Financial Conduct Authority authorisation is a crime. We want to clamp down on this immoral and damaging practice, and that is why, as my hon. Friend mentioned, the Treasury funds the illegal money lending teams across the UK. Those teams include specialist local trading standards officers who operate nationally and work alongside the FCA in maintaining standards in the consumer credit market. They can draw on geographically dispersed community intelligence officers, who are crucial in identifying local illegal money lenders, who disproportionately operate in low-income communities, and clearly, by the nature of the crime—my hon. Friend mentioned that there is often a family and friends link—can be hard to detect.
Since the teams were established in 2004, they have prosecuted over 400 cases of illegal money lending and the associated criminality that accompanies it, and have caused nearly £90 million of illegal debt to be written off. That is a huge number, but there is more we can do.
Jim Shannon
I thank the Minister for the comprehensive and detailed response he is giving, which I think is what the hon. Member for Blackpool North and Cleveleys (Paul Maynard) is looking for. I mentioned the issue in Northern Ireland in my previous intervention. I know that the Minister may not have had an opportunity to speak to anyone in Northern Ireland, whether in policing and justice or in the Police Service of Northern Ireland, but if he has, can he give any indication of what discussions he has had with those in Northern Ireland, where paramilitaries seem to be the moneylenders, about how we can take those bloodsuckers—which is what they are—out of society and off the backs of the local people?
Andrew Griffith
I thank the hon. Member for his intervention. I have not had that opportunity: I am a relatively new Minister, but one who has already had impressed upon him the gravity and prevalence of this situation. I will undertake to understand the situation not just in England, but in all parts of our Union, including with the Police Service of Northern Ireland. Of course, if we are going to tackle this problem, it is right to tackle it in every corner of the Union and make sure there is no hiding place.
The Government have increased funding since the Treasury took over responsibility in 2017. That funding has gone up by 37%, and this year, the Government will provide around £7 million to the teams. I understand the desire of my hon. Friend the Member for Blackpool North and Cleveleys for more resources to be put into this area. I will take that away, meet with the teams and those responsible, and see what more we can do, whether that is simply a question of resources and priorities or whether some legislative changes could be examined. I cannot make any promises at the Dispatch Box today, but I will do that for my hon. Friend as we seek to bear down on this issue.
Those teams also provide support to victims and education to those who are most at risk, and they tell me that they have helped over 30,000 people through that process. They undertake community work, warning people like Michelle, my hon. Friend’s constituent, of the risks of loan sharks—perhaps that term is okay in this colloquial context—or illegal moneylenders. They also support people through the provision of legal and affordable credit, which is something I am very keen to increase. As my hon. Friend impressed on me, we have to work upstream, providing safe, legal and low-cost alternatives to cut off the demand for this product at source. I want consumers to build resilience through having a savings buffer, as well as getting young children into the savings habit at a very early age, as I did. That is a great life gift to give to somebody, and we are well placed to do so through the provision of things like credit unions—safe, legal and affordable credit when people need it.
Jim Shannon
The Minister is incredibly gracious in giving way, and I am not going to hold up the debate for much longer. I just want to say that I was very fortunate to have a mother who, when I was 16, gave me my first £10. I went down to the Northern bank, as it was then—it is now Danske bank—and that was the first stage in my savings. That instilled a habit in me, and probably in all my brothers and sisters, of saving and being able to pay our debts.
Andrew Griffith
I commend the hon. Gentleman and his mother—he probably would not be where he is today if not for that brilliant savings habit established at an early age. I had a National Savings and Investments blue book; I used to go along to the post office, put in my pound and get a little entry into that book.
I do not mean to digress—not every part of the United Kingdom has an important fixture, a date with destiny, shortly—but I share the passion of my hon. Friend the Member for Blackpool North and Cleveleys about getting people into the savings habit. I will be meeting soon to understand more about the opportunity presented by community development finance institutions, which provide a local, place-based alternative source of credit to people. Also, as my hon. Friend mentioned, there is the brilliant Help to Save scheme, and it would be a delight to work with him to see how we can upscale that—I am sure that he has great insights into it. The scheme is very creditable. It does a good job, and I am delighted to learn that it has helped more than 350,000 individuals. However, as we learned on the prevalence of illegal lending, there is a great deal more to do, and I am keen to understand that scheme more. I recently met the management team of National Savings and Investments at its new offices just around the corner from here. It operates that scheme on behalf of the Department for Work and Pensions, and that could provide a great opportunity.
I know that people across the United Kingdom are worried at this time about the cost of living. Some of them are seeing their disposable incomes decrease or be squeezed. We are fully alive to the fact that that may induce people to turn to illegal lenders. To help the most vulnerable, we have announced £37 billion of support for the cost of living this financial year. We have taken decisive action to support millions of households and businesses with rising energy costs this winter through the energy price guarantee and the energy bill relief scheme. I know that my hon. Friend would say that there is always more to be done, and that the Prime Minister would say that, however generous the Government wish to be, there is a limit to how much we can do. We seek to get the balance right.
In addition to the energy price guarantee, millions of the most vulnerable will receive £1,200 of support through the £400 from the energy bills support scheme, the £150 from the council tax rebate and a one-off £650 cost of living payment. I hope that that gives my hon. Friend some reassurance about how seriously we take this issue and how we are putting the taxpayers’ money where our mouth is, in terms of helping the most vulnerable and trying to keep them out of the clutches of illegal money lenders. I undertake to him to continue to work hard to introduce safe, legal and affordable alternatives, as well as to be relentless in our pursuit of those who would try to exploit this opportunity.
Question put and agreed to.
Draft Social Security (Class 2 National Insurance Contributions Increase of Threshold) Regulations 2022
(2 years ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Financial Secretary to the Treasury (Victoria Atkins)
I beg to move,
That the Committee has considered the draft Social Security (Class 2 National Insurance Contributions Increase of Threshold) Regulations 2022.
It is a pleasure to serve under your chairmanship, Mrs Cummins. You suit that seat very well, if I may say so.
The Government’s priority for taxation is to be fair by following two broad principles: first, we ask those with more to contribute more, and secondly, we avoid the tax rises that most damage growth. The measure we are discussing today delivers the final element of Government’s ultimate ambition to align the national insurance contributions thresholds with the personal allowance for income tax. In other words, nobody pays tax wbelow £12,570. This latest and last change benefits around 500,000 self-employed people.
The National Insurance Contributions (Increase of Thresholds) Act 2022 increases the point at which class 1 NICs and class 4 NICs are paid to align with the personal allowance for income tax. The measure will also increase the point at which the self- employed pay class 2 NICs, so that it aligns with the personal allowance. In practice, this measure means that no one will pay a penny of income tax or NICs on their first £12,570 of income.
The measure goes further, and through class 2 NICs—the mechanism by which the self-employed become entitled to certain contributory benefits such as the state pension and statutory maternity pay—we will maintain the point at which the self-employed gain access to those benefits through the small profits threshold. That means that individuals will benefit from the increased threshold for paying class 2 NICs without losing their entitlement to contributory benefits. That will apply retrospectively from the start of the 2022-23 tax year, and will be delivered by the annual self-assessment process for the vast majority of customers following the end of the tax year.
The measure is the fulfilment of the Government’s obligation to increase the point at which the self-employed pay class 2 NICs and, importantly, it allows people to keep more of what they earn. I therefore seek approval of the regulations.
James Murray (Ealing North) (Lab/Co-op)
It is a pleasure to serve on this Committee with you as chair, Mrs Cummins. I thank the Minister for her opening remarks.
As we have heard from the Minister, the statutory instrument seeks to amend legislation relating to social security and to introduce a new threshold above which self-employed people are liable to pay class 2 NICs. That is referred to in the regulations as the “lower profits threshold” and is set at £11,908 for 2022-23. The SI also seeks to make sure that self-employed individuals with profits at or above the existing small profits threshold of £6,725, but below the lower profits threshold, are treated as if they had paid class 2 NICs. That means people with profits within that range will maintain their eligibility to contributory benefits and statutory payments without having to pay class 2 NICs.
As we can see from the detail of the instrument, part 1 simply gives effect to the regulations from 6 April 2022. Part 2 introduces the lower profits threshold, the new threshold at which liability to pay class 2 NICs begins. It is set at a level equivalent to the threshold at which class 4 NICs become payable. At £11,908 it is an annualised threshold, recognising an increase to £12,570 from July 2022. Part 2 also makes it clear that self-employed individuals should be treated as having paid class 2 NICs where their profits are at or above the small profits threshold but do not exceed the lower profits threshold. Part 3 of the instrument makes consequential amendments to other regulations to make sure they are aligned with the changes made by earlier parts of the regulations before us.
The Opposition will not oppose the regulations. Particularly with the tax burden having risen under the Government to its highest level in 70 years, any help to relieve the pressure on working people is welcome. It is hard, however, to avoid drawing a contrast between the Government's regulations today, which seek to increase certain thresholds at which working people pay taxes, with how they voted last night on the Second Reading of Finance Bill, through which the Government are freezing thresholds, thereby making working people pay more tax. Indeed, last night the Minister defended her and her colleagues’ decision to freeze the personal allowance until 2028—a choice that will leave an average earner paying over £500 more in income tax a year.
I wonder whether the Minister could explain whether she feels there is any inconsistency in her approach. This afternoon, she is taking credit for raising thresholds—
The Chair
May I gently remind the shadow Minister to keep his comments in scope of the SI before us?
James Murray
Absolutely, Mrs Cummins. I am simply asking the Minister to compare her comments on the regulations in front of us with what she said last night. She may choose to address that in her response.
Ian Murray
I take your judgment on that, Mrs Cummins.
More specifically, I ask the Minister to refer to the explanatory memorandum to the regulations, in particular, paragraph 12.3 on the impact of the changes. It explains that a
“Tax Information and Impact Note covering the wider NICs threshold changes…was published on 23 March 2022.”
The explanatory memorandum confirms that that impact note
“remains an accurate summary of the impacts that apply to this instrument.”
Can the Minister confirm whether she believes that that statement will remain true if the current Finance Bill passes unamended?
In the tax information and impact note, we see figures reproduced in the section on “Exchequer impact” from the spring statement 2022. Those figures show the cost to the Exchequer of the increase of the primary threshold and lower profits limit from July 2022, and the removal of class 2 NICs liabilities between the small profits threshold and lower profits limit from April 2022. The figures in the information note are set out from 2021-22 to 2026-27, and presumably they make certain assumptions about the level of the personal allowance. I would be grateful if the Minister could therefore confirm whether, if the Government are successful in freezing the personal allowance through to 2027-28 in the Finance Bill, the figures for 2026-27 would change? I would be grateful if the Minister could confirm whether she therefore expects the cost to Government in that year to reduce, which would represent a relative tax rise on working people.
Victoria Atkins
I am extremely grateful to the shadow Minister for his comments. As he knows, none of his questions are within the scope of the regulations. I will be very happy—[Interruption.]
The Chair
May I gently remind everyone that some of the hon. Gentleman’s questions are in scope? If they were not, I would have said. But do feel free to write to the shadow Minister.
Victoria Atkins
Yes.
I am helpfully reminded that the Office for Budget Responsibility produced updated forecasts for the autumn statement, including on all previous measures. Any broader debates about the autumn statement should be dealt with tomorrow in the Finance Bill Committee.
James Murray
You have been very clear in your guidance, Mrs Cummins, about what is within and without scope. The points that I referenced about the tax information and impact note were referred to in the explanatory memorandum to the regulations. I therefore followed your judgment, Mrs Cummins, that they were within scope. If the Minister is not entirely clear of my argument, she can either consult Hansard or speak to me after the Committee rises.
Victoria Atkins
I have been assured that we produced updated forecasts, as I have already said, for the autumn statement. On the details about TIIMs, I will happily speak to him after the Committee, or write to him and put a copy of my response in the Library. We are in danger of encroaching on the Finance Bill, however, and—
Victoria Atkins
I have already said to the shadow Minister that I will write to him on outstanding matters. I have taken that approach because we will be going through an awful lot of this tomorrow in the Committee stage of the Finance Bill.
Question put and agreed.
Ministerial Correction
Education
(2 years ago)
Ministerial CorrectionsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Margaret Ferrier
What steps are Ministers taking to achieve the target of delivering 20,000 defibrillators in schools by 2023?
Nick Gibb
We have been delivering defibrillators in schools up and down the country—it is a successful programme. I will write to the hon. Member with the precise figures that she is seeking.
[Official Report, 28 November 2022, Vol. 723, c. 656.]
Letter of correction from the Minister of State, Department for Education, the right hon. Member for Bognor Regis and Littlehampton (Nick Gibb):
An error has been identified in my response to the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier).
The correct response should have been:
Social Housing and Regulation Bill (First sitting)
Tuesday 29th November 2022
(2 years ago)
Public Bill CommitteesRead Full debate Social Housing (Regulation) Act 2023 View all Social Housing (Regulation) Act 2023 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 29 November 2022 - (29 Nov 2022)
The Chair
We are now sitting in public and the proceedings are being broadcast. Hansard colleagues will be grateful if Members could email any speaking notes to hansardnotes@parliament.uk. All the normal rules apply.
Today, we will consider the programme motion on the amendment paper and then a motion to enable the reporting of written evidence for publication. I am sure we can take those matters formally, without debate. I first call the Minister to move the programme motion standing 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 29 November) meet—
(a) at 2.00 pm on Tuesday 29 November;
(b) at 11.30 am and 2.00 pm on Thursday 1 December;
(c) at 9.25 am and 2.00 pm on Tuesday 6 December;
(d) at 11.30 am and 2.00 pm on Thursday 8 December;
(e) at 9.25 am and 2.00pm on Tuesday 13 December;
(2) the proceedings shall be taken in the following order: Clauses 1 to 13; Schedule 1; Clause 14; Schedule 2; Clauses 15 to 35; Schedule 3; Clauses 36 to 38; Schedule 4; Clauses 39 and 40; Schedule 5; Clauses 41 to 44; new Clauses; new Schedules; remaining proceedings on the Bill;
(3) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 pm on Tuesday 13 December.—(Dehenna Davison.)
Resolved,
That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.—(Dehenna Davison.)
The Chair
Copies of written evidence that the Committee receives will be made available in the Committee Room and circulated to Members by email.
We will now begin line-by-line consideration of the Bill. A selection and grouping list for today’s sittings is available in the room. It shows how the clauses and selected amendments have been grouped for debate. Amendments grouped together are generally on the same or similar issues. Please note that decisions on amendments do not take place in the order they are debated, but in the order that they appear on the amendment paper. The selection and grouping list shows the order of debates. Decisions on each amendment and on whether each clause should stand part of the Bill are taken when we come to the relevant clause.
A Member who has put their name to the lead amendment in a group is called first. Other Members are then free to catch my eye to speak on all or any of the amendments in that group. A Member may speak more than once in a single debate. At the end of the debate on a group of amendments, I shall call the Member who moved the lead amendment again. Before they sit down, they will need to indicate whether they wish to withdraw the amendment or to seek a decision on it. If any Member wishes to press another amendment in the group to a vote, they will need to let me know in advance.
Clause 1
Fundamental objectives
Matthew Pennycook (Greenwich and Woolwich) (Lab)
I beg to move amendment 13, in clause 1, page 1, line 5, at end insert—
‘(aa) after paragraph (a) insert—
“(aa) to ensure the provision of care and support services in supported exempt accommodation and in temporary accommodation are adequate, well-managed, safe, and of appropriate quality,”’.
This amendment would ensure that support services provided to residents of supported exempt accommodation and temporary accommodation for those properties that already fall within consumer regulation are adequate and of an acceptable quality.
The Chair
With this it will be convenient to discuss new clause 8—Standards relating to supported and temporary accommodation—
‘(1) The Housing and Regeneration Act 2008 is amended as follows.
(2) In section 192 (Overview)—
(a) in paragraph (a), after “social housing” insert “, supported exempt accommodation and temporary accommodation”
(3) In section 193 (Standards relating to consumer matters)—
(a) in subsection (1), after “social housing” insert “or accommodation to which subsections (1A) to (1D) applies”
(b) after subsection (1) insert—
“(1A) The Secretary of State, after consultation with the regulator, may by order bring into consumer regulation accommodation managed or in the control of a registered provider that falls within subsection (1C) or subsection (1D).
(1B) An order under subsection (1A) may apply to either subsection (1C) or (1D) only or to both and orders commencing either can be made separately at different times and for any part of England.
(1C) The accommodation to which this subsection applies is supported exempt accommodation as defined by regulations under subsection (1E).
(1D) The accommodation to which this subsection applies is temporary accommodation as defined by regulations under subsection (1E).
(1E) The Secretary of State may by regulations set out the classes of accommodation that fall within subsection (1C) or subsection (1D) and may define each class by reference to the Housing Benefit Regulations 2006 or the Universal Credit Regulations 2013.”
(c) in subsection (2), after paragraph (2)(d) insert—
“(da) standards relating to supported exempt accommodation or temporary accommodation,”’.
This new clause would ensure that providers of supported exempt accommodation and temporary accommodation who are registered with the regulator and charge market rents covered by housing benefit are brought within the scope of the new consumer regulatory regime.
Matthew Pennycook
It is a pleasure to begin our line-by-line consideration of the Bill with you in the Chair, Sir Edward, and in a Committee with a considerable amount of housing expertise, which I hope will put us in good stead for further improving the Bill. The Opposition have consistently maintained that the Bill is uncontroversial legislation, and we welcome it and the measures it contains.
We desperately need to build more social homes, but we also need to ensure that our existing stock is of good quality and well managed. Almost half a million social homes fail to meet the Government’s decent homes standard and, as that standard is not a requirement, it is almost impossible to enforce.
The Regulator of Social Housing can and does react to systemic failings among registered providers—for example, the request for evidence issued in relation to damp and mould following the coroner’s report into the death of two-year-old Awaab Ishak in 2020—but at present it has no proactive way of regulating consumer standards. The spotlight of media attention, tenant campaigning or intervention by individual hon. Members should not be required to trigger the appropriate response to substandard conditions in social housing, yet that is all too often the case.
To ensure that tenants are properly protected by a robust, effective system of regulation, major reform is needed. Indeed, it is long overdue, and the Secretary of State was right to concede, in the wake of Awaab’s untimely death, that the Government have been too slow to toughen regulation in this area.
Despite its limited number of clauses, the Bill is therefore of real significance for millions of social housing tenants across the country. That is why the Opposition regret how long it took the Government to bring it forward, and it is why we want to see it on the statute book as soon as possible. To that end, we want to see the Committee to sit no longer than is absolutely necessary. However, we are determined to see the Bill strengthened in a number of areas, so that standards in social housing markedly and rapidly improve, tenants are able in practice to pursue and secure effective redress, the collective voice of tenants is heard more audibly and they have a greater role in shaping national policy, and we are better able to respond to pressing issues affecting some of those living in social housing, such as serious violence.
We owe it to the bereaved and the survivors of Grenfell, Awaab’s family and all those social tenants currently living in appalling conditions to pass the most robust legislation that the House can possibly deliver. To that end, we have tabled a limited number of amendments in key areas, the intention of which is to persuade the Government to reflect sincerely on how the Bill might be improved still further. Although we intend to work constructively with Ministers to secure the Bill’s speedy passage out of Committee, we expect the Government to give serious consideration to the arguments that we make in respect of those amendments.
Amendment 13 and new clause 8 relate to supported exempt accommodation and temporary accommodation. The new clause would provide the Secretary of State with the power to bring properties let at market rents by non-profit making providers of supported exempt or temporary accommodation registered with the regulator into the scope of consumer regulation. It would allow Ministers to do so at a time of their choosing and on an area-by-area basis as required. The amendment would extend the regulator’s fundamental objectives to the care and support services provided by supported exempt and temporary accommodation in relation to properties that already fall within the scope of consumer regulation.
I want to be clear at the outset that these proposals do not seek to extend the scope of the regulatory framework provided for by the Bill to all non-registered supported exempt and temporary accommodation providers in a way that could place unreasonable burdens on the regulator. Rather, they would apply only to those landlords who are registered, or entitled to register, with the regulator as non-profit making providers because they let some properties at below market rents—that is, social housing.
The purpose of these two related proposals is to address an existing loophole that, unless addressed, will remain a problematic gap in the consumer regulatory regime after the Bill has come into force. It is that non-profit making providers of supported exempt or temporary accommodation can let properties at market rents that are eligible for housing benefit support on the basis that “more than minimal” care, support or supervision is being provided, without those properties coming within the scope of consumer regulation.
We know that the regulatory gap is currently being exploited by unscrupulous providers. The three biggest registered providers of non-commissioned exempt accommodation in Birmingham last year, Reliance Social Housing CIC, Ash-Shahada Housing Association Ltd and Concept Housing Association CIC, received £159 million in housing benefit payments for 16,370 market rent properties that fell outside consumer regulation. They were able to operate those properties free from the fear of intervention on consumer standards grounds, because they collectively operate 310 properties—in Reliance’s case, it is just six—at below market rents.
As a result of the regulator being unable to enforce against poor performance by providers in relation to market rent properties that they operate on the basis of consumer standards, the regulator can enforce against bad practice in such cases only on grounds of economic viability. It has done so—for example, it found the large, Birmingham-based Reliance to be non-compliant with the governance and financial viability standard in October last year. However, Opposition Members struggle to understand why the Government have not enabled the regulator to take action against supported exempt and temporary accommodation providers letting units at market rents who fail to meet expected standards, using the tools provided for by the new proactive consumer regulatory regime introduced by the Bill, given that permitting it to do so would simply provide an additional weapon in the regulator’s arsenal when it comes to clamping down on unscrupulous providers.
It is true that clause 8(d) tightens the definition of what constitutes a non-profit making provider. That should help to ensure that some of the most flagrant abuses, such as out-of-balance portfolios, can be clamped down on. However, it will not end all instances of rogue providers gaming the system by letting some properties at below market rents, registering as non-profit making providers on that basis, and then operating far larger numbers of substandard market rent properties outside the scope of consumer regulation. For example, those with more balanced portfolios—presumably even if that were achieved on the basis of a split of 51% of properties let non-profit and 49% for profit—will escape the provisions of clause 8 that I just referred to.
We recognise that the Government support, as we do, the Supported Housing (Regulatory Oversight) Bill introduced by the hon. Member for Harrow East. I am pleased that the hon. Gentleman is on the Committee with us. His Bill will enhance local authority oversight of supported housing and thereby enable local authorities to drive up standards in their areas. However, it does not contain provisions to close the particular loophole that is the focus of amendment 13 and new clause 8. As such, if the Government do not accept our amendments or bring forward their own to tackle the loophole in question, enforcement action on the part of the regulator in these cases will be confined to matters of economic regulation.
One element of our concern about the gap in the proposed consumer regulatory regime that the amendments seek to address is that, once the hon. Gentleman’s Bill has received Royal Assent, rogue providers of supported exempt accommodation will be incentivised to exploit this loophole further, as it will be one of the last remaining loopholes because their operations will be hampered by the range of measures in the hon. Gentleman’s Bill. Using the Bill before us to address the issue of supported exempt and temporary accommodation landlords who are already partially regulated would also close down the loophole more quickly than would be possible by doing so through the Supported Housing (Regulatory Oversight) Bill, because it will be some time before that Bill is in Committee, and the detailed regulations required to give it full effect will take some time to be passed.
If the Government were persuaded of the merits of the argument underpinning amendment 13 and new clause 8, they could determine to deal with supported exempt accommodation and temporary accommodation separately. We ultimately decided that the amendments should cover both, because there is good evidence to suggest that the loophole is being increasingly exploited by private temporary accommodation providers, in particular those providing nightly paid temporary accommodation, who often describe themselves as social landlords but who are exempt from consumer regulation in relation to substandard properties they let at market rents at great cost to the taxpayer.
Dealing with supported exempt accommodation and temporary accommodation together is also an attempt to pre-emptively address the scenario in which the Government accept that properties let at market rents by registered non-profit making providers of supported exempt accommodation should be covered by consumer regulation and legislate to that end, but, by setting aside market rent temporary accommodation let by registered non-profit providers, ensure that that becomes an obvious target for rogue providers seeking to escape consumer regulation standards.
I appreciate fully—I expect that the Minister will respond along these lines—that the Government will be reluctant to re-open at this stage of the Bill’s proceedings what and who falls within the ambit of the new consumer regulatory regime, but surely they cannot believe that the Bill as drafted ensures that support services beyond general management that are provided to residents of supported exempt and temporary accommodation will be of acceptable quality, or that non-profit making registered providers can simply ignore consumer standards when it comes to those properties let at market rents eligible for housing benefit support.
The issues that are the subject of these two amendments will need to be addressed if the Government are serious about clamping down on rogue providers who take public money while failing vulnerable people. I hope that the Minister can signal that the Government are minded to act either by accepting the amendments or by bringing forward their own in due course.
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Dehenna Davison)
It is a pleasure to serve under your chairmanship today, Sir Edward. I am incredibly grateful to the shadow Minister, the hon. Member for Greenwich and Woolwich, for the constructive way he has embraced this debate, for the Opposition’s broad support for the Bill, and for his commitment to ensuring that the regulator is as robust as it can be. On that point, we have certainly found some early agreement.
As the hon. Member outlined, amendment 13 would extend the remit of the regulator to the care and support provided to residents in supported exempt accommodation and temporary accommodation, while new clause 8 would extend the remit to those types of accommodation when they are not social housing but are held by a registered provider.
Temporary accommodation and supported housing that meets the definition of social housing is already regulated under the regulator’s standards, and the Care Quality Commission already regulates the provision of personal care in supported housing. The support needs of people in supported housing are wide, varied and often complex compared with those living in general needs accommodation. That is why we are supporting targeted measures in the Supported Housing (Regulatory Oversight) Bill, introduced by my hon. Friend the Member for Harrow East, to tackle the issues we are seeing in supported housing. I echo the shadow Minister’s comments; I am very grateful that my hon. Friend is bringing his incredible expertise to the Committee.
While there are many excellent supported housing providers, the Government recognise that there are some rogue supported housing landlords. Let me be completely clear for the record: any abuse of the supported housing system will not be tolerated. The Supported Housing (Regulatory Oversight) Bill will introduce national standards to be applied to supported housing and to give local authorities new powers to introduce licensing schemes and other enforcement powers.
Temporary accommodation is a key safety net for homeless households in this country. The homelessness code of guidance is clear that, at a minimum, temporary accommodation must be free from all category 1 health hazards, as assessed by the housing health and safety rating system, and it must be suitable for all members of the household. Households have the right to request that the council reviews the suitability of their accommodation.
Siobhain McDonagh (Mitcham and Morden) (Lab)
On temporary accommodation for homeless families and the code of guidance, who enforces the code? Who knows whether councils are living up to it? Who inspects the accommodation with a third eye to see whether it meets the standards?
Dehenna Davison
I will follow that up with the hon. Member in writing after our sittings today.
Dehenna Davison
As I have just outlined, I will write to the hon. Member to pick up her point following today’s sittings.
The focus of the Regulator of Social Housing is on regulating the standards for registered providers of social housing. I believe that the regulator should remain focused on that vital role, and that greatly expanding its scope to include temporary accommodation could be a significant risk to its expertise. I do not believe that expanding the scope of the regulator into those areas, as proposed by the amendments tabled by the hon. Member for Greenwich and Woolwich, is the right way to address them. The regulator should continue to focus on ensuring that registered providers provide safe and high-quality social housing for tenants and on delivering the new consumer regime.
On that basis, I ask the shadow Minister to consider withdrawing his amendments today, but with a commitment from me to follow up with him before Report to see whether anything more can be done.
Bob Blackman (Harrow East) (Con)
It is a pleasure to serve under your chairmanship, Sir Edward. I thank the Minister and the shadow Minister for their compliments about me and my Bill. No doubt we will be debating it in one of these Committee Rooms in the not too distant future.
One concern about the position on supported housing is the number of regulators that get involved already. There is almost a confusion of regulation. There is another problem: as we legislators seek to plug gaps, the rogue landlords seek alternative ways of making huge amounts of money. We already know that nearly £1 billion in housing benefit was paid out last year on supported housing in exempt accommodation. Clearly, that was for people who are vulnerable and need help and support. They are from a wide variety of different backgrounds. They might be recovering drug addicts; they might be people who became temporarily homeless or people who have had mental or physical health problems. I could go through a long list of people, but they are vulnerable and need help and support.
However, I have a concern about the proposed amendments. They seek to plug a gap, but are they comprehensive enough? We need more discussion to make sure we have a comprehensive measure that includes everything and makes it clear who the regulator is. Given the interventions by the hon. Member for Mitcham and Morden, we want to make sure, as a Committee and as legislators, that the laws we introduce are actually enforced.
Eddie Hughes (Walsall North) (Con)
The shadow Minister made a very interesting point, and I believe his case has some merit. We have invested in pilots in several areas of the country so that we can explore the case more fully. When the Levelling Up, Housing and Communities Committee looked at the procedure, there was some frustration on the part of Members about the fact that we cannot easily compartmentalise the breadth of people who are supported in the accommodation, so a range of organisations have oversight of the quality of the accommodation provided, supported or otherwise. We need further work to be done through the pilots to make sure that any intervention we make does not have unintended consequences for the providers who provide excellent quality supported accommodation.
Bob Blackman
I thank my hon. Friend for that intervention. Clearly, while the amendments may have good intentions, he makes a good point. We do not want the good providers, who are doing a fantastic job in supporting people to rebuild their lives, to face unnecessary burdens and regulation. It behoves the movers of amendments such as these to ensure that we have covered all those bases.
We must therefore ask: even though the amendments look superficially beneficial, do we have a comprehensive series of measures that plugs all the loopholes and does not burden good providers? Rogue providers are smart; they will look at any gaps in the law and for all opportunities to exploit the system and vulnerable people. The sensible thing would be to withdraw the amendment and have further discussion so that, together, on a cross-party basis, we can make sure that the Bill ends up in the right place.
Siobhain McDonagh
I support the amendments tabled by my hon. Friend the Member for Greenwich and Woolwich. At the moment, we have two things going on. First, we have exempt accommodation, where private property developers access vulnerable people and place them in houses in multiple occupation, cream off large amounts of housing benefit and provide no support to those individuals. They are exploited and left until the police, in many cases, or mental health services come along and take them away. Secondly, neighbourhoods are completely terrorised by people who are vulnerable but unable to control their behaviour, and absolutely nobody regulates that.
I represent a suburban south-west London constituency. Do not get me wrong; properties are not cheap, but they are cheaper than in other bits of London. Companies such as Stef & Philips are exploiting wholesale every loophole and making large amounts of money to bring fear and distress to neighbourhoods and to the residents who occupy those premises.
Last week, a lady who lives in the Pollards Hill area came to my surgery. The 1930s semi-detached house next door to her had been converted into an HMO for five vulnerable tenants. There were no bins to collect the rubbish and no facilities to ensure people could live adequately. She lives next door and has cancer. One of the residents in that home had pulled a knife on her only the day before, and all the other vulnerable tenants in the house had to stay locked in their rooms to avoid that individual. Stef & Philips are making hundreds or thousands of pounds every week from that property.
In Ravensbury, another ward in my constituency, on Malmesbury Road, the same company had a man who was so vulnerable that the police raided the property and had to withdraw because he had a crossbow and they needed firearms support. The whole street was blocked off. That is St Helier estate, for any hon. Members who may know it. It is a beautiful local authority estate built after the first world war to provide homes fit for heroes. The house is beautiful, but not as an HMO for five vulnerable people. People in the street are terrified. Who knows how terrified the other residents in the property are? The company’s balance sheet goes up and up while people go out to work to pay ever-higher tax rates to sustain that company in exploiting people.
Sarah Owen (Luton North) (Lab)
My hon. Friend is making excellent points. That is the human impact of the lack of regulation and enforcement on rogue providers that are making millions out of very vulnerable people. Their impact is felt not only by the individuals who are being harmed, but by entire communities. Does she agree that although we do not want regulation for regulation’s sake, we need not just regulation but enforcement for those who are getting away with this scot-free right now? We do not just need legislation; we need the ability to enforce and act.
Siobhain McDonagh
I absolutely agree with my hon. Friend. If there is no regulation, this will just grow and grow. As mortgage interest rates go up and business for buy-to-let landlords becomes less profitable, more people are going to look at providing this style of housing, because they can exploit the housing benefit system. If that is not happening in the constituencies of all the hon. Members of this Bill Committee, it will be coming to them soon.
Eddie Hughes
The point I am about to make is non-political, given that I am going to use the example of Labour-led Birmingham Council. That council did pilot work, and its scrutiny committee, which was chaired by a Labour member, subsequently published a report. It was able to identify a number of improvements that it could make within the existing legislation. I fully appreciate that legal challenge is an option for landlords who have their claims turned down. However, the council was able to reduce the number of people coming through the pipeline to provide this type of accommodation, and it was able to improve the quality of that accommodation. There is some room for councils who are prepared to focus on this, to improve outcomes for local people within the framework of the existing legislation.
Siobhain McDonagh
I turn to Aves housing association, which was run by a man who was exposed by the BBC for running a former supposed housing association that is in fact a commercial enterprise. It specialises in parts of Pollards Hill and Longthornton in my constituency, which neighbour Croydon, and it routinely takes very vulnerable people to live in houses that are simply not big enough for conversion. It accesses people’s universal credit accounts and takes their money. When the housing benefit department at Merton Council discovered that, it decided not to pay housing benefit to Aves residents. That might seem sensible to most Committee Members. However, that then meant that 92 vulnerable people were not having their rent paid, so were vulnerable to eviction—at which point, Merton Council’s housing department and adult social services departments would have collapsed. Local authorities are in a bind. Do they take notice of what is going on—in which case, they get responsibilities they cannot meet—or do they turn a blind eye because, in the end, that is the only way they can manage?
Bob Blackman
The hon. Member is making a very clear case about the problems in her constituency. One problem that local authorities face is that they have no powers to prevent such properties from being turned over in this way. Does she agree that one issue we have to deal with, which is not addressed in this amendment, is that local authorities need powers? Those powers might be around planning permission to do with HMOs and HMO regulation, to control the type of housing that she quite rightly describes as being a challenge in her area; or they might be over a licensing system to make sure that the operators of supported housing projects are fit and proper persons who will not exploit their position.
Further, data-sharing should be spread across the country. These rogues might well jump from Merton to Croydon to somewhere else, because they know that the local authority does not know about them. However, that is not within the scope of the amendment, although it is in the scope of my Bill, which I will be debating later. Although we would all agree that the issues that the hon. Member has raised are a scandal and need to be addressed, we must be clear that that is not within the scope of the amendment.
Siobhain McDonagh
I believe that the regulator should have power to look at this area of housing. It is all very well for councils to get more powers, and I would be the first to agree with that, but many councils already have a lot of powers that they cannot use because they cannot afford to. They do not have access to social housing units. They do not have access to the level of environmental health officers that they need. They do not have access to the number of planning officers they need in the area of planning enforcement.
Sarah Owen
My hon. Friend hits the nail on the head. The pilot work that the hon. Member for Harrow East just spoke about is fantastic. We will take whatever we can from that and learn, but the point is that the councils and authorities that did that work had to have extra resources to use their existing powers. This is not just about legislating and enabling local authorities to have more powers; it is also about them having the funds and resources to use those powers.
Siobhain McDonagh
Absolutely, and I know the hon. Member for Harrow East will be aware of how few London councils ever prosecute anybody under their current powers. It is about regulation, but it is also about local authorities being able to use their powers. In the light of the recent Budget, local authorities’ powers will become even less well used if their finances continue to be squeezed.
Let us go back to Aves in Pollards Hill and Longthornton. I met the regulator and spoke about Aves and my concern about the exploitation of tenants. The regulator said to me, “We completely agree with you, but there is nothing we can do. We do not have the power to do anything.” Either we give the regulator the powers and do something about it, or we go on talking about it in a well-meaning way while the problem exponentially grows. I, for one, want to see some action rather than none.
Maggie Throup (Erewash) (Con)
It is a pleasure to serve under your chairmanship, Sir Edward. I think this is an important Bill. Amendment 13 and new clause 8 relate to supported exempt accommodation and temporary accommodation when provided by providers that are the subject of other parts of the Bill. The hon. Member for Greenwich and Woolwich made a very good case.
The hon. Member for Mitcham and Morden made a passionate speech, and I think we can all relate to what she was saying, because we all have examples in our constituency of providers who sound very legitimate and credible, but after they are looked into, it turns out that they are not. They are fly-by-nights who are just taking the opportunity provided by the loophole in regulations. We can all cite examples of HMOs that have been passed by councils because the councils do not have the powers to stop them. The impact on neighbourhoods is quite dire, and it really does destroy local communities.
While I appreciate the intentions behind the Opposition’s amendments, I think the better place to close the gaps in regulation would be in the Bill from my hon. Friend the Member for Harrow East. This measure is obviously needed, but I think this Bill is the wrong place for it. I hope to speak later about some of the specific issues in my constituency and the importance of regulating the providers and ensuring the provisions of the Bill are met, because they are so needed.
Matthew Pennycook
That was an incredibly informed and helpful debate. I just want to say at the outset that we fully appreciate how complex an area of law and regulation this is. I have done enough of these Committees to know that the Minister is not going to simply stand up and accept the amendments we have cobbled together just on the basis of my speech, however good it might have been.
I will try to respond to the points made, which I take in the constructive spirit they were offered in. I do not think many of the points made get to the heart of what the amendments are driving at. I agree with the hon. Member for Harrow East: there is a plethora of regulators in housing and planning generally, and I am concerned that we are creating overlap and confusion in various ways. I will come to how that might be true in relation to the ombudsman and the regulator when we discuss clause 5, but that is absolutely a point.
The Minister made the point well: the private Member’s Bill of the hon. Member for Harrow East, the Supported Housing (Regulatory Oversight) Bill, includes a range of targeted measures to address the scandal—we all agree it is a scandal—of rogue providers of exempt accommodation and temporary accommodation in many cases. However, as I made clear, that Bill does not address this gap. The hon. Member for Erewash said that if it is not covered by these amendments, it can be done via the Supported Housing (Regulatory Oversight) Bill, but it is not in that Bill. Perhaps it will end up in that Bill after Committee stage, in which case we will be entirely happy with that being a vehicle for it rather than this Bill, but it needs to be addressed.
Dehenna Davison
Absolutely, we will take this away. I would be grateful for the expertise of all on the Committee, including the hon. Member for Mitcham and Morden, who made an incredibly passionate case. Let us have a roundtable discussion about how best we can take this forward following Committee.
Matthew Pennycook
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
New clause 2—Regulator duty to report on safety defects—
‘(1) In fulfilling its consumer regulation objective under section 92K of the Housing and Regeneration Act 2008, the regulator must report to the Secretary of State on actions taken by registered providers to remediate unsafe external wall systems and other historic fire safety defects in social housing.
(2) A report produced under this section may make recommendations to the Secretary of State on further action required to sufficiently address identified issues.’
This new clause would ensure that in meeting its fundamental objective to support the provision of social housing that is well-managed and of appropriate quality, the regulator would be required to report to the government on the progress of building safety remediation.
New clause 3—Regulator duty to support provision of social housing—
‘(1) In fulfilling its economic regulation objective under section 92K of the Housing and Regeneration Act 2008, the regulator must–
(a) within six months of this Act receiving Royal Assent, and
(b) at intervals of no more than three years thereafter
provide a report to the Secretary of State on whether the supply of social housing in England and Wales is sufficient to meet reasonable demands.
(2) A report produced under this section may make recommendations relating to how to ensure that the provision of social housing in England and Wales is sufficient to meet reasonable demands.’
This new clause would ensure that in meeting its fundamental objective to support the provision of social housing sufficient to meet reasonable demands the regulator would be required to report to the government on adequacy of social housing supply.
Dehenna Davison
Clause 1 relates to the fundamental objectives of the Regulator of Social Housing and adds safety and energy efficiency of tenants’ accommodation and transparency. New clauses 2 and 3 seek to take that further and expand the role of the regulator into new areas.
New clause 2 relates to monitoring the remediation of unsafe cladding and other fire safety defects in the social housing sector. I want to make clear from the outset that nothing is more important to this Government than making sure people are safe in their homes. The tragic, horrendous case of Awaab Ishak, which we are all unfortunately now familiar with, has highlighted the crucial role of registered providers of social housing in making sure that happens.
The Bill sits alongside other key reforms that we have introduced in response to the Grenfell Tower fire, including the Building Safety Act 2022 and the Fire Safety Act 2021. New clause 2 is incredibly well intentioned, given what it seeks to achieve, but the Bill is not the correct vehicle for it. A duty should be placed on the Regulator of Social Housing to undertake such monitoring. The regulator is not a specialist fire or building safety body. The proposed new clause would be a significant expansion of the regulator’s remit. Currently, the regulator does not have the expertise to fulfil that function effectively.
The question of who should undertake that kind of role is, however, an important one for Government. The Department is evaluating options on how best to monitor and report on the progress made in remediating unsafe cladding and other fire-safety defects. It is important that the work is done at pace, but thoroughly. I understand that hon. Members will be keen to study its outcomes and implications for future policy, but I must reiterate that it would be improper to pre-empt it while it is ongoing by allocating responsibility for that highly important function without the benefit of fully understanding the options. We need to ensure that that work is undertaken by those with the correct skills, expertise and capacity. My concern with new clause 2, therefore, is that it would make for a hasty decision that might mean we do not achieve the desired outcomes in the optimal way.
I turn to new clause 3. The hon. Member for Greenwich and Woolwich is right to draw attention to the importance of increasing the supply of social housing. In the levelling-up White Paper, we made it clear that we want to
“increase the amount of social housing available over time to provide the most affordable housing to those who need it.”
Our £11.5 billion affordable homes programme will play an important role in achieving that aim, as will the measures we have taken to support increased council house building.
For its part, the regulator has an objective to support the provision of sufficient social housing. It discharges that role through its work to ensure that private registered providers are financially viable, efficient and well governed. In turn, that helps providers to obtain funding to enable them to deliver more social housing. However, I do not agree that we should make the regulator responsible for assessing the adequacy of social housing provision in England or, indeed, in Wales. I am concerned that such an additional role could divert resources away from the activities that should be the focus for the regulator, which is setting standards for social housing so that landlords are clear about expectations on them to deliver quality of housing, to monitor compliance with those standards and, where necessary, to undertake relevant enforcement action.
Organisations outside Government often publish their own analysis of the level of need for social housing. There are a number of different approaches to assess that, and not necessarily a single right answer. I am therefore not convinced that the regulator stepping in to provide its own assessment is the right approach. It should focus on the task at hand and on standards, quality and enforcement. On that basis we would not want to accept new clauses 2 and 3.
Matthew Pennycook
I thank the Minister for her explanation of the clause and for the response to the two new clauses tabled by the Opposition. As the Minister has made clear, with a view to providing for a stronger and more proactive consumer regulatory regime, the clause expands the regulator’s fundamental objectives as set out in the Housing and Regeneration Act 2008 to include those of safety, transparency and—following the well-deserved success of Baroness Hayman’s amendment in the other place on standards relating to energy demand—energy efficiency.
My response to the case that the Minister made against new clauses 2 and 3 has, thankfully, pre-empted a number of the points she has just made. New clause 2 seeks to ensure that in meeting its fundamental objective to support the provision of social housing that is well managed and of appropriate quality, under proposed new subsection (3)(a) of the amended 2008 Act the regulator would also be required to report to the Government on the progress of building safety remediation in the social housing sector.
According to the Department’s own figures, every one of the 160 social sector buildings identified as having unsafe aluminium composite material—ACM—cladding, similar to that which covered Grenfell Tower, have been remediated through the social sector ACM cladding remediation fund. When it comes to buildings in the social sector with unsafe non-ACM cladding systems, we know that, as of 31 October, 251 have applied for Government funding for remediation. Alarmingly, as things stand, not a single one of those 251 buildings has been remediated.
Perhaps more worryingly, we have no estimate of the total number of social sector buildings with unsafe non-ACM cladding systems, because social landlords can apply for Government funding only if the costs of remediation are unaffordable or if there is a threat to their financial viability. We have no idea whatsoever how many social sector buildings have other non-cladding building safety defects.
There is a wider debate to be had outside this Committee about social landlords’ restricted access to funding for non-ACM remediation work, given the impact that has on social tenants, whose rent payments are contributing to the costs of the works required, and on providers in terms of upgrade and maintenance works, services provided such as welfare advice and the supply of new social homes.
However, all new clause 2 seeks to achieve is to make the regulator—which, as a result of the Bill will now have to perform its functions with a view to supporting the provision of social housing that is safe—report to the Secretary of State on the progress of remediating unsafe external wall systems and other historical fire safety defects in social housing, and provides it with the opportunity to make recommendations to the Secretary of State on further action required.
Speaking for the Government in the other place in response to a similar amendment in the name of Baroness Pinnock, Baroness Scott of Bybrook argued, as the Minister just has, that the type of monitoring sought by new clause 2 would not be “appropriate” for the regulator to undertake because
“it is not a specialist health and safety body.”—[Official Report, House of Lords, 6 September 2022; Vol. 824, c. 114.]
I am afraid that we find that argument wholly unconvincing.
New clause 2 does not seek to impose a duty on the regulator to carry out inspections of social sector buildings that are either potentially unsafe or identified as unsafe and in need of remediation or to physically monitor the progress of remediation works. As such, it does not require the regulator to possess the relevant professional skills, expertise and capacity necessary for assessments of that nature. All it would require is that the regulator be responsible for reporting to the Government on the progress of remediation in respect of social sector buildings—on the overall number of such buildings identified as having defects and the progress of whether they have started and completed remediation.
Given that the regulator already collects data from registered providers to inform its regulation of standards, and that the Bill ensures that one of the regulator’s new fundamental objectives will be the safety of buildings, we believe it is entirely reasonable and appropriate to task it with reporting to the Government along these lines.
As the Minister made clear, the Government have been at pains over recent months to stress they are examining options for monitoring and reporting remediation progress in future. Yet, as we consider the Bill today, neither the Department nor the new Building Safety Regulator is providing accurate data with regard to the scale of the building safety challenge in the social housing sector, or progress toward meeting it; no firm proposals have been brought forward by the Government to address that gap; and we have no guarantees that appropriate measures will be forthcoming any time soon, although I take at face value what the Minister has just said.
The Bill rightly ensures that the provision of safe, high-quality social housing will be integral to the function of the regulator’s role. There can be no more important task in respect of social housing—I think we are agreed on this point—than to ensure that buildings that are either covered in combustible material or riddled with other non-cladding safety defects are made safe. New clause 2 would ensure the regulator monitors progress to that end and reports to Government. I urge the Minister to rethink. If the Government are not minded to amend the Bill as new clause 2 seeks, I urge them to bring forward other proposals for monitoring this important element of the remediation drive in the near future.
I turn to new clause 3. In a similar way to how new clause 2 seeks to place additional requirements on the regulator in relation to its fundamental objective to support the provision of social housing that is well-managed and of appropriate quality, new clause 3 seeks to ensure that, in meeting its fundamental objective under the 2008 Act to support the provision of social housing that is sufficient to meet reasonable demands, the regulator would also be required to report to the Government on the adequacy of social housing supply.
The problem to which this new clause relates is well known. While more people than ever are struggling to afford a secure place to live, nowhere near enough social homes are being built. Almost 1.2 million households in England are now languishing on a housing waiting list. The Green Paper that foreshadowed the Bill stated:
“Social housing remains central to our supply ambitions.”
Despite that, the Government are doing nowhere near enough to deliver the volume of social homes our country needs.
Not only are the Government failing to build the volume of social homes that we need, but by means of reduced grant funding, the introduction of the so-called affordable rent tenure, increased right-to-buy discounts and numerous other policy interventions, we would argue that they have actively engineered the decline of social housing over the past 12 years. The result is that not only were fewer than 6,000 social homes constructed last year but over 21,000 were sold or demolished—a net loss of 15,000 desperately needed genuinely affordable homes.
Bob Blackman
I agree with the shadow Minister that the provision of affordable social housing in this country is far too low. It has been far too low for far too long. That has been the case not just under this Government, but under successive Governments for more than 30 years.
The shadow Minister has put forward his case, and he quoted one report claiming that 145,000 units are required per year. The Levelling Up, Housing and Communities Committee and I have always taken the view that 90,000 units per year would be required just to get us back to where we should be. From that perspective, it is clear that there needs to be more investment in affordable social housing, and we need to get to a point where people have a place they can call home, a rent that they can afford, and the option to buy when their circumstances allow.
The new clauses seem to put extra burdens on the regulator, for example by requiring them to report on the amount of social housing there should be in this country. I do not think that is an appropriate role for the regulator. It is right that organisations, such as those the shadow Minister quoted—Shelter, Crisis, CIH and others—should be reporting and commenting to Government, but I do not think it is the role of the regulator to report to Government.
I think the role of the regulator is quite clearly to report on the condition of social housing. I hope as we go through the Bill—and I will challenge the Secretary of State on this particular issue—we will see some amendments that strengthen the role of the regulator to ensure that social housing providers are performing as they should be. That means providing a high-quality standard of accommodation. We have heard about what has happened in Rochdale, but the issue of the condition of property is not confined to Rochdale. It goes up and down the country.
We need to see dramatic improvements in the provision of not only the quantity of social housing, but the conditions within those units. It is a sheer scandal in this country that we are paying huge salaries to social housing providers who are pocketing the money while providing a very poor service for their tenants. We need to call them to account. I believe that comes through the role of the regulator. That is the way it should be. I hope we can see some strengthening of the Bill on that point through Government amendments, at least when we get to Report stage.
On safety defects, there is clearly an issue about data, performance and the funding of removing unsafe cladding and dealing with fire safety defects. The hon. Member for Greenwich and Woolwich will know that I have been on this case for quite some time—since before Grenfell. One of the key issues here is about whether the regulator should be reporting on it, but frankly I think the regulator should be enforcing it. They should be making sure the providers actually do their job of providing safe accommodation for people.
While I recognise that the new clauses are well-intentioned, I do not think they hit the nub of where we need to be going. I hope the Government will come forward with some new clauses to strengthen the Bill when we get to Report stage, particularly in light of the scandal in Rochdale and the conditions people are facing up and down the country.
Siobhain McDonagh
Thank you, Sir Edward, for your generosity in calling me. I realise I registered quite late that I wanted to speak.
Why are we sitting here in this Bill Committee today? We are sitting here because, under the coalition Government’s bonfire of the quangos, we set fire to the housing inspectorate and the Audit Commission in the belief that no regulation of damp or mould growth in properties was required, that all the adjudicator had to do was look at the financial structure of housing associations, and that that would be enough. What a terrible error that has been.
In my constituency, the largest social housing provider is Clarion Housing Association. After an ITV news programme about some of its standards, it was referred to the regulator. The regulator’s decision was that it could not investigate because there was not a systemic problem. That is where we have got to. How many of us were distressed by Awaab Ishak’s death? How many of us know that we have plenty of social housing units in our constituencies with the same damp and mould growth problems? At the moment we have no form of regulation that can tackle that.
The adjudicator does not go out and look at properties or inspect procedures. The adjudicator is interested in the financial structures. I would never argue that we should not look at the financial viability of a housing association, but I also want to know what it does when it has problems of damp and mould growth. I want to know that a Government inspector goes out and sample-tests and looks at properties.
We would never accept an Ofsted that did not inspect schools or a Care Quality Commission that did not go in and inspect hospitals, care homes or local authority social services, but we have accepted that the regulator has no responsibility for going into social housing properties and inspecting their conditions.
When we look at reducing regulation, we must remember Awaab Ishak, and remember that we do not have a regulator in our country that would do anything about that.
Dehenna Davison
I will be brief and just say that I recognise the arguments made by the shadow Minister, but I hope he recognises the arguments that I made in my opening statement. I have made a commitment to my hon. Friend the Member for Harrow East that before Report we will sit down to discuss the issues further and make sure the regulator has the teeth it really needs.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clause 2
Advisory panel
Matthew Pennycook
I beg to move amendment 14, in clause 2, page 1, line 18, at end insert—
“(2A) The Panel may provide information and advice to the Secretary of State about, or on matters connected with, the regulator’s functions and wider issues affecting the regulation of social housing (whether or not it is requested to do so by either the regulator or the Secretary of State).”
This amendment would enable the Panel to provide information and advice and to proactively raise issues affecting social housing regulation more generally directly to the Secretary of State.
The Chair
With this it will be convenient to discuss amendment 15, in clause 2, page 2, line 17, at end insert—
“(8) The Panel must be chaired by a tenant of social housing.
(9) The Chair is responsible for setting Panel meeting agendas.
(10) The majority of persons appointed to the panel must be tenants of social housing.”
This amendment would ensure that tenant representation on the advisory panel is mandatory and that tenants are able to influence effectively what information and advice is presented to the regulator in respect of issues affecting social housing regulation.
Matthew Pennycook
For all its technical complexity, the Bill is ultimately about those who live in social housing and overhauling regulation to ensure that they are treated fairly by landlords who are well run, responsive, transparent and accountable. In considering the detail of the Bill, we must never forget that the impetus for it was the deaths of 72 men, women and children in the early hours of 14 June 2017. Those 72 human lives were ended in an inferno fuelled by the highly combustible cladding system installed on the outside of the tower block in which they lived, despite the fact that tenants had repeatedly sounded the alarm about the building’s safety defects and the fact that warnings were going unheeded.
I have met and spoken to Grenfell United, as I assume the Minister and many other Members have. I once again pay tribute to them and the wider Grenfell community. I know that what the survivors and the bereaved are determined to achieve is not only justice, but lasting change in how social housing is regulated and the power that tenants themselves can exercise. We firmly believe that the empowerment of tenants must be at the heart of the Bill, and we believe that a key test of its robustness is whether it establishes mechanisms that will enable tenants to influence in practice the regulator’s approach to regulating standards; to shape any future changes to regulatory standards and codes of practice; and to proactively raise wider issues affecting social housing regulation and policy, not just with the regulator but with Ministers.
The Government ostensibly agree that tenants are at the heart of the Bill, and Ministers have repeatedly assured us that one of its primary objectives is to give social housing tenants a voice and ensure that it is listened to. Yet when it comes to providing ways in which tenant representatives can exert a measure of control over the work of the regulator, shape the future direction of the regulatory arrangements that the Bill establishes and proactively influence national regulation and policy so as to shape the services that tenants receive from their landlords, we feel that the Bill is somewhat lacking in ambition.
Dehenna Davison
I am grateful to the shadow Minister for making his case for amendments 14 and 15. Amendment 14 seeks to enable the advisory panel to provide information and advice and to raise issues affecting social housing regulation directly with the Secretary of State. The social housing White Paper made it clear that the purpose of the advisory panel was to provide independent and unbiased advice specific to the regulator on matters connected to regulation. Clearly, the views of tenants are central to that objective.
As the hon. Gentleman outlined, in parallel we also established the social housing quality resident panel, which will provide an opportunity for us to hear from tenants. The aim of the resident panel is to enable tenants to share their views directly with Government and Ministers on their approach to improving the quality of social housing, and on whether the Government’s interventions will deliver the changes that they want to see.
The resident panel is made up of 250 social housing residents from across the country and from diverse backgrounds. They met for the first time last week on 26 November, and will meet approximately monthly over the coming year, with opportunities for the agenda to be shaped by panel members. At that meeting, residents told the Secretary of State for Levelling Up, Housing and Communities, my right hon. Friend the Member for Surrey Heath (Michael Gove), that the most important issues to them were how repairs are dealt with, how landlords are held to account and how complaints are handled by their landlords and the housing ombudsman. The Department’s resident panel and the regulated advisory panel have a specific role and remit to ensure that tenants’ views are properly represented to both Ministers and the regulator.
Amendment 15 seeks to require a social housing tenant to chair the advisory panel and have responsibility for setting the agenda that the panel considers. It also seeks to ensure that social housing tenants comprise the majority of panel members. We share the notion that it is vital that tenants’ voices are heard, but it is important that the advisory panel considers the full range of regulatory issues that the regulator has to tackle. That means that we need to allow a diverse collection of voices to share their knowledge and opinions with the regulator.
Consumer matters are rightly at the forefront of the Bill but, equally, working to resolve some of the economic issues should not be diminished. Legislating for a tenant to chair and set the agenda and requiring the majority of the panel members to be tenants would not support what we are trying to achieve with the advisory panel. I am concerned that being too prescriptive in legislation about how the advisory panel must operate may prevent the panel from having the flexibility to decide how it best operates. In practice, I expect that all members of the advisory panel, along with the regulator, will shape how it works and what it considers.
We are committed to ensuring that tenants can effectively engage with the Department and the regulator, and that tenant voices are at the heart of social housing regulation and policy, but we do not feel that amendments 14 and 15 are necessary to achieve that so I ask the shadow Minister to withdraw them.
Matthew Pennycook
I thank the Minister for that helpful response, and I take on board the concerns she raised about the amendments.
I am slightly concerned about the lack of what we would consider to be true tenant empowerment. The quality resident panel is important, but it only lasts a year, so how will we get ongoing tenant engagement with the work of the regulator to inform how it operates, to shape future regulation, which is part of its remit, and to raise future issues of concern to tenants nationally, in terms of social housing regulation and policy? We do not think the Bill allows for that, and in all honesty I cannot understand the Government’s objection to allowing the advisory panel to notify Ministers directly, rather than the regulator, in certain rare circumstances. As the Minister said, the panel is at present constituted by the regulator, which appoints its membership, and it can only provide views directly to the regulator. We think there are some circumstances in which it may need to do otherwise. I hope the Minister takes away those points.
Eddie Hughes
Although there might be some deliberation about this mechanism, there are several mechanisms through which resident organisations are able to engage with Ministers and the regulator. I am delighted to see representatives of Grenfell United in the Public Gallery. There is a regular opportunity to meet Ministers, although it is not prescriptive and perhaps not as frequent as many would like, but the Government are certainly determined to build on it.
Matthew Pennycook
We recognise that Ministers meet tenants and tenant representatives frequently. My concern is that if tenants on the advisory panel have an issue that they feel is sufficiently serious that they need to bring it to the attention of Ministers, rather than the regulator, they should not have to rely on attempting to get a meeting with Ministers. There should be a mechanism through which they can put serious issues on the desk of the Secretary of State or the Minister if they feel that they, as well as the regulator, need to know about them. That is the point we are trying to address with amendment 14.
On amendment 15, I understand the Minister’s concerns about being too prescriptive, but I urge the Government to go away and think again about the membership of the advisory panel. I appreciate fully the need to have a diverse panel, but as I read clause 2(4), there is nothing on the face of the Bill to prevent the Government from putting one tenant or tenant representative on the panel and leaving it at that. There is no minimum quota for tenants, and we want tenant voices to be properly represented.
Bob Blackman
The shadow Minister is making a good point. We want to empower tenants, but his proposal could have an unintended consequence. Supposing tenant representatives on the board cannot agree among themselves who will be the chair, the panel could meet, but obviously that would be a difficult situation. There may potentially be social tenants from various parts of the country, representing different organisations. It is therefore not appropriate to prescribe a chair on the face of the Bill; that would defeat the objective. It might well be that we could find some suitable wording about the number of representatives, but I do not think we should force the panel to have a particular individual or representative as the chair.
Matthew Pennycook
The point about obvious issues around tenant representation and selection is well made, although those issues exist for the quality residents panel and the 250 members it selects. They have existed every time we have tried to create a body that gives voice to residents, so I do not think they are insurmountable. I welcome the fact that the hon. Gentleman thinks a minimum level of tenant representation on the panel is a good thing, and I urge the Government to think again about that.
We ultimately want to achieve tenant empowerment on the advisory panel so that tenants can be confident that, when the advisory panel gives information and advice to the regulator about the new system of regulatory standards, its voice is properly heard and it can bring issues to the attention of Ministers if required. I hope the Government will take away the points we have made about the amendments. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Dehenna Davison
Clause 2 makes it a requirement that the regulator will engage with a wide range of stakeholders, including tenants and landlords. It also sets out expectations about who should be represented on that panel. It is not just about the regulator asking a group of people for views once it has already made up its mind about what it wants to do. The panel is designed to be used to test and shape the regulator’s thinking. For example, we expect the regulator to engage the panel on the design and implementation of new consumer standards. The clause also empowers the panel to raise issues directly with the regulator that its members consider important. I hope the Committee will support the clause.
Question put and agreed to.
Clause 2 accordingly ordered to stand part of the Bill.
Clause 3 ordered to stand part of the Bill.
Clause 4
Power to charge fees
Dehenna Davison
I beg to move amendment 1, in clause 4, page 3, line 40, leave out “follows” and insert
“set out in subsections (2) to (6)”.
This amendment is consequential on Amendment 2.
The Chair
With this it will be convenient to discuss the following:
Government amendment 2.
Clause stand part.
Dehenna Davison
Clause 4 and Government amendments 1 and 2 deal with the regulator’s fee-charging powers. As we heard from a number of hon. Members on Second Reading, the Regulator of Social Housing must be provided with the necessary funding to enable it to deliver the outcomes the Bill is designed to achieve.
Once the new consumer regime is implemented, the regulator will see substantial growth in its regulatory activity, which means its costs will increase significantly. It is Government policy to maximise the recovery of costs of arm’s length bodies, so clause 4 will refine the existing fee-charging power to allow for the cost of some additional functions to be recovered, and to charge fees that cover costs of activities that may not be connected to the specific fee payer, such as the cost of investigation and enforcement. Any significant changes to the design of the regime will be consulted upon and require ministerial approval.
Government amendments 1 and 2 also address the regulator’s fee-charging powers. The amendments remove specific provision allowing the regulator to charge following the completion of inspections, if authorised by the Secretary of State by order. The existence of that special provision relating to fees for inspections is no longer necessary given the changes we are making to the regulator’s general power to charge fees. That power will now allow it to cover the cost of inspections in its fees for initial and continued registration.
Leaving the provision in legislation erroneously risks causing confusion and casting doubt on the regulator’s ability to set fees to cover inspections as part of its general fee-setting power. As such, the change serves to ensure that there is greater clarity and consistency in this legislation.
Clause 4 establishes the parameters to the regulator’s fee-charging powers and makes clear that it can charge the sector for costs that may be unconnected to the specific fee payer. Government amendments 1 and 2 support clause 4 by delivering a technical change that will ensure there is no confusion over the powers available to the regulator to deliver maximum cost recovery. On that basis, I commend the clause to the Committee and beg to move the amendments.
Matthew Pennycook
I thank the Minister for that explanation of Government amendments 1 and 2. As she makes clear, clause 4 amends section 117 of the Housing and Regeneration Act 2008 to clarify the extent of the regulator’s fee-charging powers. New subsection (4A) adds to the 2008 Act and makes it clear that the regulator has the power to recover the cost of activities it does not currently charge social housing providers for.
If I understood the Minister correctly, Government amendment 2 revises section 202 of the 2008 Act because the powers in new subsection (4A) are sufficiently broad to cover charging providers fees for inspections. In short, as I hope she agrees, this is just a tidying-up exercise, the rationale for which is that the power is being omitted from section 202, concerning inspections only, because it more properly fits within section 117, concerning fees generally, to ensure that references to fee charging are all in one place in the 2008 Act. If that is the case, and amendment 2 in no way prevents the regulator from charging fees for inspections, we take no issue with it, because it is important that the regulator is able to charge fees to cover the significant costs involved in overseeing the comprehensive and rigorous Ofsted-style inspections regime that the Bill introduces.
The amendment raises wider issues relating to the resourcing of the regulator. Since the Bill’s publication, we have consistently expressed concern about the very real risk that the regulator will struggle to discharge its new functions and that it will not be adequately resourced to perform its enhanced role, in particular in relation to inspections. Prior to the Bill’s publication there were already concerns, expressed by the Select Committee and others, as to whether the regulator had the resourcing, skills and capacity to continue to regulate economic standards adequately, given the complex financial and corporate structures proliferating in the sector.
The new consumer regulatory regime will impose significant burdens on the regulator. The Minister stated on Second Reading that the Government are
“firmly committed to ensuring that the regulator has the resources that it needs not only to deliver the new consumer regulation regime but to ensure that it continues to regulate its economic objectives effectively.”—[Official Report, 7 November 2022; Vol. 722, c. 83.]
She also suggested that the Government were potentially minded to introduce changes to the fee regime to ensure that the regulator is funded appropriately. We accept that the Government have made limited additional funding available this financial year to support the new regime, but we are concerned that there may still be a resourcing challenge for the regulator. I would welcome any further assurances from the Minister that the regulator will have all the resources it needs to discharge the enhanced functions that the Bill requires of it.
Dehenna Davison
I am grateful to the shadow Minister for raising the question of resourcing. We touched on this on Second Reading, as he highlighted. He is right that in this financial year we are providing £4.8 million to aid the regulator in its vital work, but this is why it is so important that we get the fee charging regime right—to ensure that the regulator is properly resourced. As we have discussed today, on Second Reading and in the other place, the regulator needs the teeth to be able to do its job, and a huge part of that is resourcing. He is right that, effectively, we are tidying the legislation up to make it a bit neater and ensure further clarity, so I hope he will support these amendments.
Amendment 1 agreed to.
Amendment made: 2, in clause 4, page 4, line 16, at end insert—
‘(7) In section 202 of the Housing and Regeneration Act 2008 (inspections: supplemental) omit subsections (4) to (7).’—(Dehenna Davison.)
This amendment repeals the provisions of the Housing and Regeneration Act 2008 which provide specific powers to enable the regulator to charge registered providers of social housing fees for inspections.
Clause 4, as amended, ordered to stand part of the Bill.
Clause 5
Relationship between regulator and housing ombudsman
Question proposed, That the clause stand part of the Bill.
Matthew Pennycook
I will be brief, but there is an issue that we want to highlight in relation to clause 5, which is about the relationship between the regulator and housing ombudsman. Clause 5 amends the Housing and Regeneration Act 2008 and the Housing Act 1996 to add measures on the relationship between the two bodies, so that they can exchange information quickly and effectively to provide better protection for tenants, all of which is entirely to the good and uncontroversial. However, consideration of the clause provides me with an opportunity to seek clarification from the Minister about the precise role of each body in the reformed regulatory regime that the Bill establishes.
Taken at face value, the role of each body is clearly delineated: the regulator regulates registered providers in England, while the housing ombudsman seeks to resolve complaints from individual residents about their registered provider. The regulator operates on a top-down basis, and the housing ombudsman operates on a bottom-up basis. However, when one considers how the reformed regulatory regime will operate in practice, things start to appear somewhat more complicated.
First, if my reading of the Bill is correct, the regulator appears to be able to intervene in individual complaints. Clause 31, for example, enables the regulator to arrange for an authorised person to take emergency remedial action in respect of individual premises following completion of a survey. Presumably, it is therefore necessary for the regulator to receive a complaint from a tenant who fears they are at risk of an imminent serious health and safety risk. Otherwise, how could the regulator order the necessary survey of a given premises? It may be that that is not the case, and it will be for the ombudsman to refer an individual complaint to the regulator to allow them to make use of the provisions in clause 31; if that is the case, it is not clear from the Bill.
Secondly, following revisions to the housing ombudsman scheme enacted in September 2020, the ombudsman has a responsibility to publish a complaint handling code, enjoys a new power to issue complaint handling failure orders that can relate to a landlord’s overall complaint-handling policy and, crucially, has the ability to investigate beyond an initial complaint to establish whether evidence might indicate a systemic failing by a registered provider. It may be that the ombudsman can address such systemic failings on the part of registered providers on the basis of suggested changes to their policies only with the regulator responsible for exploring whether changes to their systems are necessary, but again that is not immediately clear in the Bill.
Eddie Hughes
I understand the point that the hon. Gentleman is making, but it is based on the premise that these bodies operate in a completely siloed fashion. The relationship between them is a fluid one; they speak regularly and consider complaints and points that have been raised, which come to them from either direction. They work in a collaborative fashion and are then able to identify who should best proceed with a particular case. Obviously, it is governed by a memorandum of understanding, but it is a much more fluid and collaborative arrangement than that.
Matthew Pennycook
I thank the hon. Gentleman, and I fully understand his point. I met with senior staff from the housing ombudsman yesterday, and we were talking precisely about the ways in which the respective roles operate and how they could be clarified. What these examples seek to illustrate is that there is still an obvious risk of overlap and duplication of roles in respect of these two bodies. One could argue, as the hon. Gentleman just has, that those issues can be resolved by means of updating the non-statutory memorandum of understanding that already sets out the functions of both organisations and how they work together, but that throws up two distinct issues in and of itself.
First, is it appropriate for us to leave these matters to the two bodies themselves to resolve, rather than clarifying on the face of the Bill the precise role of each body in the new regulatory regime, so as to avoid the duplication of functions and potential gaps in coverage—even if only in the short term, before they update that memorandum of understanding to reflect the new regulatory system of proactive consumer regulation?
Secondly, I am sure that hon. Members have been contacted by tenants who are aware that the Bill is progressing through the House. The expectations around the Bill are such that, after it receives Royal Assent, tenants who feel that they have not secured appropriate redress by means of a standard complaint to their landlord and believe that their grievance might be systemic in nature will understandably be uncertain about whether they should approach the ombudsman or the regulator with their complaint. I appreciate that the Department is alive to the risk, has produced guidance in the form of a fact sheet and is apparently delivering a communications campaign to tenants so that they know where to go and are well informed but, without greater clarity prior to Royal Assent about the precise roles of each body in the regime established by the Bill, I fear that neither will be sufficient to prevent a large degree of confusion. When debating this matter in the other place, Baroness Scott of Bybrook conceded that fears about confusion of the kind that I alluded to are legitimate, and that greater clarity is required as a result; yet, despite her promise to take the matter back to the Department, the Government are not amending the Bill to provide greater clarity or committing to take any further concrete steps—that I am aware of, at least—to ensure that confusion will be avoided.
As Shelter and others have argued, it is essential that the roles of the regulator and the housing ombudsman are clearly defined, that tenants and tenant groups understand the appropriate way to make complaints and that any complaints process or system is easy to use, accessible and effective. I would be grateful if the Minister provided greater clarity today and, if not today, in writing. I hope that, in general terms, she will assure me that the issues that I have highlighted will be both considered and acted on by the Department before the Bill receives Royal Assent.
Dehenna Davison
I am grateful to the shadow Minister for raising his concerns and giving me the opportunity to provide some clarity. We will take it from the experience of one particular tenant, if we may. If a tenant has a complaint, they should first go to their landlord but, if that complaint cannot be resolved between tenants and the landlord, it can be escalated to the housing ombudsman to investigate individual complaints from tenants. If the ombudsman’s investigation finds instances of maladministration on the part of the landlord, the ombudsman can issue orders to that landlord to put things right for the complainant. That can include requiring the landlord to pay compensation to the complainant or to undertake repairs.
If an investigation raises a potential breach of a regulatory standard or there is evidence of systemic failure by the landlord, the ombudsman can refer the matter to the regulator. In situations where the regulator has concerns that the provider is failing to maintain the premises in accordance with the regulatory standards, it can conduct a survey and, following the implementation of this Bill, arrange for emergency repairs to remediate the issue in cases where there is a risk of serious harm to tenants that is not being addressed by the landlord.
Matthew Pennycook
That is useful clarification. If I have correctly understood what the Minister is saying, emergency remedial action under clause 31 of the Bill stems, in the first instance, from a referral from the ombudsman. Let us think about that process in detail. To get to the ombudsman, a tenant would have to exhaust all stages of their resident provider’s internal complaints process, which is three stages in most cases. It takes about a year to get through it. They would then have to go to the ombudsman, who has a huge backlog. Clause 31 is about emergency remedial action that poses an imminent threat to health and safety. I urge the Government to think again about how, in particular, clause 31 operates because tenants will need to give notice to the regulator about specific clause 31 failures far quicker than the process she has just described.
Siobhain McDonagh
The situation gets even more complicated when a tenant exasperatedly says, “I want to go to a lawyer” and then the whole thing closes down.
Matthew Pennycook
We are testing the patience of Sir Edward and the rules, but the point my hon. Friend highlights is a genuine one about the complication of legal matters and whether tenants abandon complaints at whatever point, which I hope adds to the weight of the point that I have just made. It is not immediately clear, and we have to be clear with, most importantly, tenants once this Bill is in force about where they go and how they can seek redress under the provisions of the Bill as quickly as they need to. As I said, in the case of clause 31, the process the Minister has described does not seem like it is fast enough to ensure that emergency remedial action of the kind provided for by clause 31 will happen. I hope the Government will take this and those other points away.
Dehenna Davison
Again, I am grateful to the shadow Minister and to the hon. Member for Mitcham and Morden. On the shadow Minister’s point about communications ensuring that tenants know where to go and how this process works, we have been working with organisations that represent landlords, social housing residents and the housing ombudsman service. We delivered communications and marketing campaigns in 2021 and this year to ensure that social housing residents were aware of how to make a complaint and how to seek redress where appropriate. We are putting in the work through communications to ensure that tenants understand the process, but I have heard his points on timeliness and I will endeavour to take that away.
Question put and agreed to.
Clause 5 accordingly ordered to stand part of the Bill.
Clauses 6 to 9 ordered to stand part of the Bill.
Clause 10
Appointment of health and safety lead by registered provider
Question proposed, That the clause stand part of the Bill.
Matthew Pennycook
Clause 10 is not contentious, and we broadly welcome it, but I would appreciate some clarification from the Minister on a specific issue arising from it. At present, proposed new section 126B ensures that
“The functions of the health and safety lead”
are to
“monitor the provider’s compliance with health and safety requirements”
and to notify the provider’s responsible body of any material risk to or failures of compliance, and to advise on steps to ensure the provider addresses them.
As Ministers may be aware, the Local Government Association, among others, has inquired what—if any—channels of communication or reporting mechanisms will exist between the health and safety leads of registered providers and the regulator itself. The LGA also highlighted the obvious need for sufficient new burdens funding in the case of local authority landlords. Will the Minister provide answers today or in writing to the following questions? First, did the Government intend to establish any direct permanent relationship between the regulator and RP health and safety leads? Secondly, what is the rationale for not requiring health and safety leads to report any material risks or failures of compliance directly to the regulator, as well as the responsible body, as a matter of course? Thirdly, can the Minister guarantee that the Government will make sufficient new burdens funding available to local authorities to fully implement the provisions in the clause?
Dehenna Davison
I will follow up in writing with a bit more clarity and specific detail on the questions the shadow Minister has raised.
Question put and agreed to.
Clause 10 accordingly ordered to stand part of the Bill.
Clause 11
Electrical safety standards
Question proposed, That the clause stand part of the Bill.
Matthew Pennycook
We welcome the Government’s decision, in response to concerns raised during the passage of the Building Safety Act 2022, to carry out a consultation on the introduction of mandatory checks on electrical installations for social housing at least once every five years and to include measures within this Bill to partially implement such checks—only partially, because the section of the Housing and Planning Act 2016 that this clause seeks to amend is concerned with properties let by landlords, not owner-occupier leaseholders. That is an important distinction, for reasons I will explain.
As we know, there is currently no legal requirement in England for social landlords or leaseholders to undertake electrical safety checks of their dwellings. The situation is distinct from that in the private rented sector, where the Housing and Planning Act introduced mandatory safety checks on electrical installations at least once every five years.
We know that fires in numerous tower blocks, including Grenfell, Shepherd’s Court, and Lakanal House, were caused by electricity. Home Office fire data shows a consistently high level of accidental electrical fires in high-rise buildings with 10 or more flats. Campaign groups such as Electrical Safety First have been at pains to stress that those buildings were mixed-tenure buildings containing an assortment of owner-occupier leasehold and social rented units and that there is therefore a case, given that the fire safety of a building depends on the safety of all the units within it, for ensuring parity in electrical safety standards across all tenures in high-rise residential blocks.
The Government’s own consultation on this issue noted that the National Federation of ALMOs supported introducing electrical safety requirements for owner-occupiers in mixed-tenure blocks and highlighted that properties being considered by authorities for London’s right to buy-back programme often have electrical installations that are
“in a state of significant disrepair.”
Given that we know that many high-rise social housing blocks contain owner-occupied flats owned on a leasehold basis, it surely cannot be right that a leaseholder living next door to a social renter will not have their electrical installations mandated to be checked every five years. To put it another way, what good is having the electrical installations of two thirds of a building checked every five years if the other third is not? The risk of a potentially life-threatening fire obviously does not discriminate by tenure.
Bob Blackman
This is a very significant point, particularly with what happened at Grenfell. We should reflect on that carefully. Who does the hon. Gentleman suggest should carry out the inspections and how would they be enforced? One of the problems that is clearly still relevant is people buying second-hand white goods that are not safety checked, which could then be faulty and cause electrical fires. In his research, has the hon. Member come up with any proposals as to how this measure could be implemented and work could be undertaken?
Matthew Pennycook
I thank the hon. Gentleman for that point—it is a point well made. I do not have a comprehensive answer to hand. There are provisions in this clause that apply to mandatory electrical safety checks for social rented properties. There are similar requirements in place for the private rented sector. My instinct is that it would seem obvious that those could be applied to the owner-occupier sector in a way that the provisions in the clause perhaps could not be. Whatever way we cut it, what we want to see are mandatory checks on all electrical installations in all units in high-rise buildings, because, as I said, fire does not discriminate between tenure. I hope the Minister will take the points away for further consideration.
Dehenna Davison
The shadow Minister is right to highlight the consultation, which concluded in August. It included a call for evidence seeking views on whether leasehold properties in mixed tenure social housing blocks should have mandatory five-year checks. My hon. Friend the Member for Harrow East was right to say that we need to get this mechanism right to ensure that people living in mixed-use blocks are protected. I am grateful to the shadow Minister for his pragmatism on this point. We are still assessing the responses to the consultation, so it is a bit too early to say what the outcome will be and we do not wish to pre-empt it. However, we will announce further details as the work progresses, and I will endeavour to keep the shadow Minister informed.
Question put and agreed to.
Clause 11 accordingly ordered to stand part of the Bill.
Clauses 12 and 13 ordered to stand part of the Bill.
Schedule 1 agreed to.
Clause 14 ordered to stand part of the Bill.
Schedule 2 agreed to.
Clauses 15 to 20 ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned.—(Julie Marson.)
Retained EU Law (Revocation and Reform) Bill (Seventh sitting)
Tuesday 29th 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 Amendment Paper: Public Bill Committee Amendments as at 29 November 2022 - (29 Nov 2022)
The Committee divided: - Ayes: 8 / Noes: 2 - Question accordingly agreed to.
The Committee divided: - Ayes: 9 / Noes: 2 - Question accordingly agreed to.
The Committee divided: - Ayes: 7 / Noes: 9 - Question accordingly negatived.
Brendan O’Hara (Argyll and Bute) (SNP)
I beg to move amendment 70, in clause 16, page 18, line 25, at end insert—
“(1A) Before the power in subsection (1) may be exercised, the relevant national authority must publish a written statement on any societal and economic changes relevant to the intended modifications.”
Brendan O’Hara
It is a pleasure to see you in the Chair, Sir Gary, for our final day of scrutiny of the Bill. The amendment was tabled in my name and that of my hon. Friend the Member for Glenrothes. It will be a relief to the Committee that I will be as brief as I can, as I know we have an awful lot to get through.
Clause 16 allows a relevant national authority to make modifications to secondary legislation that it considers appropriate, taking into account
“changes in technology, or…scientific understanding.”
We do not disagree with that. Our amendment simply seeks to widen the scope of the clause by allowing relevant national authorities not just to consider changes in technology and developments in scientific understanding, but to take into account societal and economic changes that may be pertinent when making modifications to retained EU law.
It is the narrowness of the clause that concerns us the most. It has been highlighted as a potential problem by the Law Society of Scotland, which in its excellent briefing paper suggested widening the scope to reflect other factors and include economic or societal changes. It seems eminently sensible to include factors that go beyond science and technology. Whether we like it or not, things happen in society that we cannot reasonably predict. It would therefore be unwise for the legislation to be so completely straitjacketed that we could not react appropriately to unpredicted societal events.
Similarly, giving relevant national authorities the ability to pivot when changes to the economic circumstances dictate also seems logical. Imagine we had been examining the Bill before the summer, and I had tabled an amendment that would have allowed relevant national authorities the flexibility to consider changes in economic circumstances when considering retained EU law. Had I based my argument around a Conservative Prime Minister resigning and forcing a lengthy leadership election, and the arrival of a new Prime Minister who promptly tanked the economy and then resigned six weeks later, everyone on the Government Benches would have howled with derision, but that is precisely what happened.
As much as we like to think we know what is around the corner in terms of society and the economy, the truth is that we simply do not. That is why, again in the spirit of trying to be helpful and improve what is a thoroughly dreadful piece of legislation, I commend amendment 70 to the Government.
Justin Madders (Ellesmere Port and Neston) (Lab)
It is a pleasure to see you in the Chair, Sir Gary. I was sorry to read that you may not be seeking re-election. I know that social media is not always truthful on such things, but what I read appeared to be legitimate, and I will be sorry to see you go. I welcome the Minister in the Jack Grealish role, coming in late in the day to retrieve a seemingly lost position for the Government.
I understand that we are dealing with clause 16 stand part as well as amendment 70. I thank the hon. Member for Argyll and Bute for moving the amendment, which is very similar to some of ours. It will be no surprise that we are sympathetic to and supportive of it, but to avoid repeating what we have said previously I will try to keep my statements brief. Government Members will be tired of hearing this, but those who are tired of scrutiny are tired of democracy itself, so I will yet again refer to the lack of scrutiny and consultation that are the hallmarks of the Bill.
Amendment 70 offers a means to address that problem in the specific and possibly limited circumstances in which clause 16 will apply. We know how often the Government like to use the phrase “specific and limited circumstances”. The amendment contains the guiding principle of our new clause 9, which was previously debated: the Government and relevant national authorities need to address the impact of changes made by the use of the Bill’s powers. Having Ministers of the Crown produce written statements about intended modifications will ensure not only that the societal and economic impacts of changes are considered, but that they are justified, which, as we have discussed, ought to provide a greater level of accountability. Despite the fact that the amendment could benefit from extra conditions—for example, mandating a programme of consultation with relevant stakeholders—it serves the purpose of demanding greater scrutiny. Given that the Government rejected our new clause, which previously requested that, I suspect we will not find favour with this one.
The Minister for Climate (Graham Stuart)
It is a pleasure to serve under your chairmanship, Sir Gary.
I thank the hon. Member for Argyll and Bute for tabling the amendment, but I urge the Committee to reject it. The power under clause 16 is intended as an updating power to make modifications to retained EU law that take account of a change in technology or developments in scientific understanding. The scope of that power has been deliberately restricted so that it can only be exercised to bring about such modifications.
It is critical that that power operates in that manner to ensure that legislation that sits on the UK’s statute book is able to keep pace with scientific and technological developments, so that we continue to uphold our high standards as well as ensure laws remain tailored to best suit the UK’s needs. Without that power, it would take a significant amount of parliamentary time for the Government to bring forward bespoke proposals and consider each amendment on a sector by sector basis.
I consider the requirement for Ministers to produce a written ministerial statement on the societal and economic changes relevant to the proposed changes under the clause to be neither relevant nor appropriate. The UK Government are committed to the appraisal of any regulatory changes relating to retained EU law, and the nature of that appraisal will depend on the types of changes that Departments make and the expected significance of their impact. We assess that current scrutiny procedure for legislation made under the clause is sufficient. Further scrutiny would be inappropriate for that type of power and would place additional pressure on parliamentary time. The power is circumscribed and, in answer to an earlier question, it is for Ministers to make those decisions. Further scrutiny could hinder the UK’s ability to keep pace with new scientific and technological developments, and I am sure that no member of the Committee would want that.
Justin Madders
Will there be a standard threshold across Departments to trigger when Ministers may use the power? If so, can the Minister share it with us?
Graham Stuart
In so far as I understood the hon. Gentleman’s question, the powers are circumscribed. They are designed to deliver the technical changes necessary and are certainly not meant to lead to substantive changes in policy. That would absolutely not be within the scope of the clause.
On that basis, I ask the hon. Member for Argyll and Bute to withdraw his amendment.
Brendan O’Hara
I thank the Minister for his response. I also thank the hon. Member for Ellesmere Port and Neston for his support. I still do not quite understand why the Government have been so deliberately restrictive in the scope of clause 16. In common with much of the Bill, the Government’s complete refusal to accept any reasonable amendments is worrying. The amendment is not party political, but arose directly from a suggestion from the Law Society of Scotland. I will not pursue it to a vote, however, and I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 16 ordered to stand part of the Bill.
Clause 17
Power to remove or reduce burdens
Question proposed, That the clause stand part of the Bill.
Justin Madders
The clause relates to legislative reform orders under the Legislative and Regulatory Reform Act 2006. There are certainly positives associated with the mechanisms within which those orders operate.
The procedure for enacting draft Bills, in common with the terms of new clauses we have tabled, would include requirements for consultation, with further time for parliamentary consideration. When we are talking about between 2,400 and 3,800 laws, we think that is a reasonable proposal. That requirement would apply to instruments introduced under both the negative and the affirmative procedure, with the super-affirmative procedure further requiring 60 days for consideration, and a requirement on Ministers to have regard to recommendations to amend the draft order. Even if Ministers choose to press ahead with the unamended order, they must still lay a report before the House detailing the representations made and the proposed revisions. Although these measures do not go quite as far as our proposed new clauses, if they were used across the board for non-deregulatory purposes, they would be far more preferable to the use of the standard procedures currently in the Bill.
As Jack Williams pointed out in evidence a couple of weeks ago, the main concern is that using any of the mechanisms contained in the 2006 Act will put in place completely unrealistic time constraints, if they were used on all regulations and pieces of legislation on the EU dashboard. We have discussed at length why we think the 2023 sunset is unrealistic. Given that the time restrictions we face are well known, why does the clause remain in the Bill? Are there plans to use this power? Will the Minister provide us with some examples of where he thinks it might be appropriate to use this procedure or where it is already intended to be used? How will the problem of the clear six to eight months we will have once the Bill is passed to deal with all the regulations be dealt with?
The Government have promised to abide by all the stages of consultation and reporting in the Bill. It seems to me that it would therefore be a challenge to deal with this in the timeframe we have. Will the Minister tell us what criteria will be used when deciding to use this procedure? I presume some consideration was given as to when it might be appropriate to use it before it was inserted into the Bill. If Ministers choose not to use this power, there is nothing that we as parliamentarians can do about it. That is the nub of it.
Looking at 2016 Government guidance on legislative reform orders, it was noted that it can take some 10 to 14 months from the start of a consultation before a legislative reform order becomes law and reaches the statute book. I think we are all conscious of the fact that, even in the unlikely event that there is a smooth passage of this Bill through the Lords, it will be in force at the lower end of that timescale, if not far below it. I wonder if the Minister can tell us whether there is any intention to use the powers under the clause and, if so, in which circumstance they might be operative.
Graham Stuart
Clause 17 amends the LRRA 2006 explicitly to include any retained direct EU legislation in its definition of legislation. This amendment confirms that the delegated powers existing in the framework for legislative reform orders extend to retained direct EU legislation, and enable it to be amended within the current procedures and scope of the LRO process. There is no reason to exempt this category of legislation from the LRO process. It is a pretty innocuous technical change, and I commend the clause to the Committee.
Question put and agreed to.
Clause 17 accordingly ordered to stand part of the Bill.
Clause 18
Abolition of business impact target
Question proposed, That the clause stand part of the Bill.
Alex Sobel (Leeds North West) (Lab/Co-op)
I will be brief, as we have many clauses to get through. Clause 18 abolishes the business impact target in the annual report that the Conservative Government themselves introduced in 2015. Perhaps the Minister could explain the rationale behind the change. Have the Government finally caught up with the pointlessness of this exercise, which has piled unnecessary work and bureaucracy on civil servants over the past seven years? It would be helpful to hear the Minister’s explanation for the change.
Peter Grant (Glenrothes) (SNP)
My apologies for being late for the start of the sitting, Sir Gary.
About eight years ago, I bought myself a car. For a long time, the car did pretty much what I wanted it to do, but now it is showing its age and is not really behaving the way I would like, and I am wondering whether it is worth keeping. It would be foolhardy for me to get rid of my car when I have no idea what kind of car I want to replace it with, because I would leave myself open to the possibility either that I am without a car for a lot longer than I expected to be or that a replacement car is much more difficult and expensive to acquire. That is the position the Government want to put us in with this clause.
Graham Stuart
Having left the EU, the UK has the regulatory freedom to ensure that all regulations are designed with UK interests front and centre. To seize the opportunities that come with this freedom, it is important that the Government’s framework for scrutinising regulation—the better regulation framework—is reformed. As set out in “The benefits of Brexit”, we are reforming the system to ensure that we regulate only where necessary. When regulation is needed, it should be designed and implemented in a way that minimises burdens on businesses and households, thereby driving competition, innovation and, ultimately, growth.
The abolition of the business impact target will support the delivery of the reforms by reducing what is currently a disproportionate focus on direct costs to business and allowing—I hope the whole Committee will agree—a more holistic appraisal of the impacts. By increasing the early scrutiny of the flow of new regulation and improving the existing stock of regulation undertaken through the use of powers elsewhere in the Bill, the new system will support the Government’s growth ambitions.
Peter Grant
The Minister has great faith in the new system, but none of us can have any faith in it because we have not seen it. When can we expect to see the intended replacement for the relevant sections of the 2015 Act?
Graham Stuart
As I said, we expect the reforms to the better regulation framework to set a higher bar for the introduction of regulation and to help to reduce the flow. On the precise timing of when that will be, I will come back to the hon. Gentleman, unless I am suitably refreshed right now. As I say, this is a more proportionate approach, which I think the whole Committee will support. I therefore recommend that the clause stand part of the Bill.
Peter Grant
On the basis of the Minister’s answer, I assure him that we will come back to him in due course and tell him when we are prepared to support clause 18, but we are not prepared to support it yet.
Question proposed, That the clause stand part of the Bill.
Alex Sobel
We have already debated how the Bill grants Ministers sweeping powers; we now come to clause 19, which looks like it literally and explicitly allows Ministers to do anything they want. The Minister needs to explain what the Government think the powers are going to be used for, specifically in relation to EU regulations.
On the face of it, clause 19 would allow Ministers to make the case for anything at all, provided only that they consider it appropriate and in consequence of the Act. It is entirely left up to Ministers themselves to define “appropriate” and “in consequence”. I would like the Minister to give the Committee further clarification of what “appropriate” and “in consequence” really mean—or perhaps he does not yet know.
It is noteworthy that the powers include modifications to any Act of Parliament—including this legislation. The powers are so sweeping that it is difficult to understand why the Government cannot better define the powers they are giving themselves in the clause.
Peter Grant
First, I have a concern similar to the hon. Gentleman’s. It is the same concern that the SNP has expressed repeatedly throughout the progress of this Bill and many others. If the Bill does not just give any Minister the power to do whatever they like, will the Minister explain what clause 19 does not allow them to do? I always think it is interesting that when they give powers to Ministers, the Government put it into legislation that the Minister can do only what they consider appropriate. It is almost as if they do not trust their own Ministers not to do things that are considered completely inappropriate—although, having seen the actions of some Ministers over the past few years, I completely understand why they put that restriction in.
Secondly, is there a legal definition of what is actually meant by the words
“in consequence of this Act”?
If there is not, we could see regulations made under clause 19 being challenged in court, with the case hanging on whether the Minister’s decision was in consequence of this Act. A phrase as woolly as that is going to be a field day for lawyers. It is going to end up with the Government, and potentially businesses, being tied up in exactly the kind of legal uncertainty that the Government claim they are trying to get rid of by the passing the Bill. Will the Minister clarify those two points, with particular regard to the legal interpretation?
Graham Stuart
Clause 19 establishes a power to make consequential provision. It is necessary to enable the UK Government to make appropriate provision in consequence of the Bill. That includes the ability to modify any enactment, including provisions in the Bill. The power in the clause is exercisable by a Minister of the Crown and can be used to make regulations by statutory instrument.
You might not know it from listening to the debate, Sir Gary, but the inclusion of such a power is standard practice for Bills in respect of which minor additional changes to legislation may be necessary as a consequence of the changes brought forward by the Bill. Consequential amendments to legislation may be necessary to ensure that the UK statute book continues to function effectively. It is therefore appropriate that the power be included in the Bill to enable UK Government to deal with consequential amendments—and strictly consequential amendments.
The consequential power is subject to the negative procedure. If the power is used to amend primary legislation, it will be subject to the draft affirmative procedure to ensure the sufficient level of scrutiny. It is in fact entirely appropriate and proportionate.
Question put and agreed to.
Clause 19 accordingly ordered to stand part of the Bill.
Clause 20
Regulations: general
Brendan O’Hara
I beg to move amendment 64, to clause 20, page 20, line 13, at end insert—
“(1A) A Minister of the Crown may not include in regulations under this Act any provision which is within the devolved competence of any devolved authority as defined in paragraph 2 of Schedule 2.”
The Chair
With this it will be convenient to discuss the following:
Clause stand part.
That schedule 2 be the Second schedule to the Bill.
Brendan O’Hara
The amendment was tabled in my name and that of my hon. Friend the Member for Glenrothes and takes us back to a recurring theme of this Bill Committee—namely, the incursion by the UK Government into areas that are, and have been since the establishment of the Scottish Parliament more than 20 years ago, wholly devolved.
I assure Members that before today is out they will have heard a great deal more about the power grab that is happening and how the Bill and its partner, the United Kingdom Internal Market Act 2020, are systematically undermining the devolution settlement and stripping powers from our Parliament. The amendment would simply protect the integrity of the devolution settlement by preventing a UK Minister from revoking any piece of retained EU law that currently sits within the competency of the Scottish Government, as defined in paragraph 2 of schedule 2.
The Union is hanging by a thread. The polls increasingly show a pro-independence majority, and among young voters in particular that majority is substantial and growing. We have heard lots of talk about the partnership of equals and how Scotland has an integral place in this so-called precious Union; those may be nice words and easy for politicians to say, but the problem is that fewer and fewer Scots believe it any longer. Not only have we been dragged out of the European Union in the face of an overwhelming desire to remain a member, but in the past weeks we have discovered that this is not a voluntary Union after all. We cannot decide our constitutional future without the permission of this place. Now, with this Bill, coupled with the insidious United Kingdom Internal Market Act, we have to sit and watch the powers of our Parliament being eroded and our democracy being dismantled.
I challenge the Government to prove me wrong and show the people of Scotland that this place is no threat to our Parliament and our democracy by accepting amendment 64 and allowing our Government to act according to the mandate given to them in 2007, 2011, 2016 and, again, in 2021. That mandate is to keep our regulations in lockstep with the European Union if that is what we choose to do.
Alex Sobel
I shall speak briefly to schedule 2. The need for the Government to act with devolved authorities when provisions are outside the devolution settlement makes a lot of sense. We are currently in a situation in Northern Ireland in which there is no Executive, the Assembly is not functioning and the Northern Ireland protocol, which is hugely affected by the Bill, is effectively broken. The schedule 2 powers will, in the end, as things stand—they do not look like they are going to change in the near future—be enacted by a UK Minister of the Crown rather than by the devolved authority, whether with or without a Minister. I note that that is made explicit. So we have a situation in which, although the Bill cannot have any impact on what happens regarding the Executive, there is a mismatch between what is happening de facto in Northern Ireland and de jure in the Bill. That creates a dichotomy, so will the Minister tell us how he thinks that will resolve itself, considering that a new Executive is nowhere in sight?
Peter Grant
Following the comments of my hon. Friend the Member for Argyll and Bute, the existence of schedule 2 specifically tells us everything we need to know about the nature of what is sometimes claimed to be democracy in this place. There is an explicit assumption in the schedule that Ministers in this place have the right to directly hold to account the democratically elected national Parliaments of the United Kingdom. That is not devolution; that is colonialism. It is not democracy; it is elected dictatorship. I appreciate that what is stated in schedule 2 is simply a restatement of the assumption that has run through this place for the past 300-plus years, yet it is a false assumption. It is an assumption that ultimate sovereignty by gift of God resides with an unelected individual who then passes down that sovereignty to a semi-elected Prime Minister.
Dr Luke Evans (Bosworth) (Con)
If the SNP decides to join the EU, is that not exactly what would be being joined?
Peter Grant
I think the hon. Gentleman knows perfectly well that that is not the case. The European Union is about sharing and pooling sovereignty; there is no shared or pooled sovereignty within this Union. There is absolute sovereignty exerted, in effect, by one individual. One individual was able to end the careers of 40 Conservative MPs in 2019, just because they disagreed with him. That is how powerful one individual in this place can be. No individual in the European Union would have that authority against the will of national Parliaments and national Governments. My final response to the hon. Member is that he might think it is in Scotland’s interests to leave the European Union but, with the greatest respect, it has nothing to do with him. It is—it should be—a choice for the people of Scotland—
Peter Grant
It is also for the people of Scotland to decide what restrictions are put on the actions of their national Parliament and national Government, as it is for the people of Wales and of Northern Ireland. The inclusion of the schedule is another example of the rights of those three devolved nations being usurped by a state that claims to have the absolute right of sovereignty over them—but it does not have that absolute right, and, quite soon, it is going to discover, to its cost, that it never had that right.
Graham Stuart
I urge the Committee to reject the amendment tabled by the hon. Member for Argyll and Bute. It would prevent UK Ministers from making provisions within the competence of any devolved authority in respect of any of the powers in the Bill. As Members will be aware, the UK Government are committed to respecting the devolution settlements and the Sewel convention. The territorial extent of the Bill is UK-wide, and it should take effect UK-wide so that the benefits of Brexit can be seized across all four nations of the UK.
Conferring the powers concurrently ensures that the UK Government are able to legislate on behalf of a devolved Government who do not intend to take a different policy position. That will ensure that the most efficient and appropriate approach to the reform of retained EU law can be taken in every situation. Because of the nature of retained EU law, the edges of where UK Government competence ends and devolved competence begins are not always absolutely clear, so it is important that UK Ministers are able to make provision in areas of devolved competence to ensure that nothing important falls between the areas of reserved and devolved competence.
When using the powers in the Bill, we will use the appropriate mechanisms, such as common frameworks, to engage with devolved Governments, enable us to take account of the wider context and allow for joined-up decision making across the UK. The idea that we are riding roughshod over the devolution settlement is incorrect.
The hon. Member for Leeds North West mentioned Northern Ireland. The powers in the Bill are concurrent partly so that we can work with the Northern Ireland Executive—when there is one—to ensure that the Northern Ireland REUL required to operate the withdrawal agreement and the NIP is preserved.
I think I have answered most of the points that were made—I hope so, anyway—so I ask the hon. Member for Argyll and Bute to consider withdrawing his amendment.
Brendan O’Hara
Over the course of today, I will give the Government numerous opportunities to show that they respect the devolution settlement and that they are not intent on usurping powers from our Parliament. Given their past record, I had no expectation that they would accept amendment 64, but I never wanted it to be said, in future, that they did not understand what they were doing, or that it was somehow accidental. The Minister said that it is not clear what is devolved and what is reserved. It is absolutely clear: it is in the Scotland Act 1998, which says clearly that if it is not reserved, it is devolved. We will vote against schedule 2, but I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 20 ordered to stand part of the Bill.
Question put, That the schedule be the Second schedule to the Bill.
Graham Stuart
I beg to move amendment 1, in schedule 3, page 30, line 5, leave out paragraph 2 and insert—
“2 (1) Sub-paragraph (2) applies to a statutory instrument containing regulations under this Act which is subject to a procedure before Parliament for the approval of the instrument in draft before it is made.
(2) The statutory instrument may also include regulations under this Act or another enactment which are made by statutory instrument which is not subject to the procedure mentioned in sub-paragraph (1) (whether or not it is subject to any other procedure before Parliament).
(3) Where regulations are included as mentioned in sub-paragraph (2), the statutory instrument is subject to the procedure mentioned in sub-paragraph (1) (and is not subject to any other procedure before Parliament).
(4) Sub-paragraphs (1) to (3) apply in relation to a statutory instrument containing regulations under this Act which is subject to a procedure before Senedd Cymru as they apply in relation to a statutory instrument containing regulations under this Act which is subject to a procedure before Parliament, but as if references to Parliament were references to the Senedd.
(5) Sub-paragraphs (1) to (3) apply in relation to a statutory rule as they apply in relation to a statutory instrument but as if references to Parliament were references to the Northern Ireland Assembly.
(6) Sub-paragraphs (1) to (3) apply in relation to a statutory instrument containing regulations under this Act which is subject to a procedure before a devolved legislature as well as a procedure before Parliament as they apply in relation to a statutory instrument containing regulations under this Act which is subject to a procedure before Parliament, but as if references to Parliament were references to Parliament and the devolved legislature.
(7) In sub-paragraph (6) ‘devolved legislature’ means the Scottish Parliament, Senedd Cymru or the Northern Ireland Assembly.
(8) Nothing in this paragraph prevents the inclusion of other regulations in a statutory instrument or statutory rule which contains regulations under this Act.”
This amendment enables regulations under this Act subject to the draft affirmative procedure to be combined with regulations that are not subject to that procedure.
This is a technical amendment necessary to ensure that the mechanism for combining statutory instruments in the Bill functions correctly. The intent behind the Bill is to enable regulations made under different powers in the Bill to be combined into a single statutory instrument where it would be more appropriate to do so. This technical amendment will allow provisions made under any powers in the Bill and other enactments to be combined with regulations under the Bill that require a draft affirmative instrument.
Where such provisions are combined, the default procedure will be the higher procedure, which is the draft affirmative. That will enable statutory instruments to be combined more effectively, which will save resource and reduce the future burden on parliamentary business. The amendment also makes equivalent provision for the devolved legislatures. I commend the amendment to the Committee.
Justin Madders
I am grateful to the Minister for providing an explanation of the technical nature of the amendment. It actually quite an important amendment for the Government if they are to have any chance of meeting their self-imposed deadline in a year’s time. Being able to link together different instruments that require different procedures will, as the Minister said, be a helpful tool to limit the amount of parliamentary time taken up, although that may come at the cost of scrutiny. I am, however, encouraged by the Minister’s confirmation that the affirmative procedure will be used in those circumstances. It is almost as if there will be levelling up of regulations so that the higher standard of scrutiny will apply.
Will the Minister tell us whether there has been any assessment of on how many occasions it is anticipated that the amendment will be used? It is worth saying, once again, that if the Government had not created this artificial cliff edge and put themselves up against the clock so steadfastly, the amendment would not be necessary.
Peter Grant
I will not oppose the amendment, but I need to put on record that the fact that such a detailed technical amendment is needed is clear evidence that the people who draft legislation do not always get it right first time. Is it not lucky that we have a Bill Committee, so that errors, omissions and oversights in the drafting of the Bill can be put right before it comes into force? The 4,000 or so—at the latest estimate—bits of legislation that the Bill will tear up and throw in the fire will be replaced by things that we will not get a second chance to put right in Bill Committee.
When, as will almost certainly be the case, the Government end up repealing bits of legislation that nobody knew existed, we will not have a Bill Committee to put things on hold in order to correct any mistakes. The fact that the Government have already had to table this and so many other amendments and we have no idea what else they will have to introduce on Report or in the House of Lords does not represent a criticism of those who drafted the legislation. It is simply an illustration of an uncomfortable fact: no matter how good we are at drafting legislation, we do not get it right first time. If this Bill passes in the form in which the Government are determined to pass it, there are potential catastrophic impacts from Parliament repealing legislation that it did not even know existed.
Graham Stuart
I am glad that there is, I think, acceptance that this amendment is a practical and sensible measure. By bringing procedures together in one and having the affirmative procedure, we can ensure that Parliament can scrutinise in a more holistic manner, to address some of the concerns that have been raised by the Scottish nationalist spokesman. As to precisely how often, I do not have an estimate on that, but I expect it to be on numerous occasions, because, as has been said, there is a substantial amount of retained EU law. If that can be brought together and scrutinised in an effective manner that allows full and proper scrutiny but does so in a way that does not waste parliamentary time, I hope we will have something that works for all parts of the House and is seen as practical and proportionate.
Amendment 1 agreed to.
Alex Sobel
I beg to move amendment 88, in schedule 3, page 31, line 6, leave out from “15” to the end of line 8 and insert—
“(d) regulations under section 16.”
This amendment, together with Amendment 89, would make all regulations under Clause 15 (regulations that are intended to achieve the same or similar objectives as the REUL being replaced) and under section 16 (technological developments) subject to affirmative procedure.
The Chair
With this it will be convenient to discuss amendment 89, in schedule 3, page 31, line 17, leave out paragraph (c).
See explanatory statement to Amendment 88.
Alex Sobel
We have already spoken at length about the lack of effective parliamentary scrutiny provided for in the Bill. Our amendments 88 and 89 would ensure that any instruments made by Ministers to replace retained EU law under clause 15 or to update it under clause 16 were subject to the affirmative procedure and had to be approved by both Houses. At present, schedule 3 does not provide for the affirmative procedure for clause 16 instruments at all; for clause 15, it provides for the affirmative procedure to apply only in the case of revocation or for much more limited cases where the clause 15 powers are used for sub-delegation or to create a new criminal offence.
It seems to us, as well as to many of those who have submitted written evidence, that the powers in both clauses are potentially extremely significant even if they are not being used for wholesale revocation. Updating and replacing retained EU law might well involve alterations to existing and long-established rights and protections—alterations that we feel Parliament should be asked to positively agree to before they pass into law. The Minister himself just said that this Bill covers a substantial number of regulations, so it is only right and proper that we have the correct level of scrutiny and process in this place.
Can the Minister explain the circumstances in which he envisages the powers to replace and update being used? Can he also provide examples of the replacement or updated legislation that Departments are planning to take through, using these powers? I ask because we have heard very little, but we know that civil servants are busy preparing regulations for this procedure.
Stella Creasy (Walthamstow) (Lab/Co-op)
Good morning, Sir Gary. It is a pleasure to serve under your chairmanship this morning on this Bill. You have missed some real treats, I venture to suggest, about the future of decision making in this place.
Members who have been on this Committee for the whole marathon rather than the last couple of miles will know that Opposition Members have been raising consistent concerns about how we do what we were all promised we would be able to do—take back control. The amendments before us this morning are about exactly that, because one of the central concerns that we have about this legislation is that it does not take back control to the British people; it simply takes back control to the back rooms of Downing Street and Departments. These provisions, these amendments, show why that concern is merited.
All of us have sat through statutory instrument Committees in our time in Parliament. It is a joy to receive the message, at the last minute, that you have been selected, Sir Gary, for what pleasures—what delights—await you and what information you will learn on one of those Committees. But they are a vital part of our parliamentary scrutiny process. After all, they offer the opportunity for Ministers to set out clearly the purpose behind any amendments; the recognition that not everything needs to be debated on the Floor of the House; and clarity about the Government’s thinking. Many of us who have sat through court cases will recognise how important that is when it comes to the application of the law.
As we have discussed previously in Committee, this legislation will delete overnight potentially 4,000 laws. It could be more, or it could be slightly less—who knows? We probably should know before we pass the Bill. We have had that debate and the Government still do not think it is important, but they have always told us that they wanted to take away unaccountable European bureaucrats and give us the opportunity to have British bureaucrats making legislation. The amendment challenges that process. It would give back to us, as parliamentarians, the responsibility for holding the Government to account.
Stella Creasy
Perhaps, then, the Minister will publish and confirm for all of us who have been on the Committee—he is new to these debates, but I am afraid he is going to hear this concern repeated at length—what comes next. Without clarity over what comes next, it is difficult to be confident that the legislation will not be a destructive disaster. I see he is already enjoying the fact that he is on duty today.
Having this power only for revocation undermines other powers the Bill gives to Ministers, because it is a power both to ignore and to amend legislation. Taking back control and returning it to the back rooms to allow Ministers to write legislation and then simply put it before us in a “like it or lump it” proposal is not really taking back control.
I also venture to say that it is worth ensuring that we have this procedure for all forms of legislation that are affected by the Bill—not for some grand political design so we can have these wonderful debates, but because, as we have already seen with this Bill, not everything is going to be perfect. Departments make mistakes. Drafting can contain errors. I am reminded of the tale, which is completely true, of the Belgian legislature that managed to put a recipe for asparagus into Belgian law because it was cut and pasted into legislation by accident. That genuinely happened—I am sure the Minister will google it—in 2021.
Statutory instruments give us an opportunity to pick up drafting errors, as well as to hold Ministers to account, and to challenge and query legislation—for example, one of those so-called technical amendments, although we know the Bill represents not technical amendments, but, potentially, serious changes to rights, rules and regulations that people have relied on and recognised for generations. Having such a procedure would give us the chance to identify actions, and possibly to identify the asparagus.
If the Minister will not accept the amendment, he is saying two things: first, that taking back control is not about Parliament, but simply about the back rooms, and, secondly, that we never get things wrong. We have all met in life individuals, and perhaps even organisations, who say, “I never get things wrong,” and we know that that is the most worrying thing that anybody can say. Drafting errors are part and parcel of trying to get right even one or two pieces of legislation, but the Government, potentially, are setting us up to try to get 4,000 right to replace the laws they are deleting overnight.
Statutory instruments and the use of processes and amendments are an important part of the process of trying to ensure that that is done with the greatest possible skill. Removing those powers, or not clarifying that they are part of those processes, and giving Ministers the opportunity to decide whether they want to put themselves up for parliamentary scrutiny is like letting contestants in “The X Factor” avoid the judges’ houses stage. This all forms an important part of the process.
I have a horrible feeling that the Minister is not going accept the amendment, so in responding to the queries and questions we have raised, and in reflecting on why the amendment has been tabled, will he consider why—when we are discussing potentially significant and meaningful changes, and when we know he can only water down regulation because the Bill says that regulation can only be something that does not create a burden—he believes our constituents should be denied that representation and that voice in the process? That is what not including such a provision, or not having any form of it, means.
We saw that in the pandemic, when statutory instruments were not receiving appropriate scrutiny. In December 2020, a new set of covid restrictions that would have criminalised a child going to school in tier 4, despite schools remaining open, were implemented without any parliamentary scrutiny. In that case, due to the extraordinary public scrutiny these regulations faced, the issue was finally identified before the schools returned from the Christmas break for one day. Despite what they might think, however, it is not normal for commentators on Twitter to go through legislation at this level. Such errors are not minor—they are not just asparagus—but could have real life implications. They happen and they happen in this place, and not having proper scrutiny of SIs is the foundation of such errors.
I hope the Minister will do more than laugh at the asparagus. I hope he will act on these concerns and finally agree, if not to this amendment, to the tabling of the Government’s own amendment in the other place to ensure we finally take back some control. I say to my colleagues on the Government Back Benches that at some point, somebody will turn up in their constituency surgeries asking about the outcome and implication of this legislation, and they will have to say, “Well, I didn’t vote through any changes. I did not recognise the problems with the sunset. I was pretty confident about not knowing what laws this would affect and I did not even vote through any powers to be able to scrutinise what happens next. I just thought it would all be fine because this Government never make mistakes.” It simply will not wash.
Graham Stuart
I urge the Committee to reject amendments 88 and 89. Alongside the other powers in the Bill, the power to revoke or replace in clause 15 is an important, cross-cutting enabler of reform in the Bill. The power to update in clause 16 is an essential, ongoing power that will facilitate technical updates to retained EU law to take account of changes in technology or developments in scientific understanding. We recognise Parliament’s important role in scrutinising legislation, and the Bill ensures the appropriate scrutiny of all amendments and revocations of retained EU law using the powers in the Bill, including the powers provided for in clauses 15 and 16.
When discussing matters of scrutiny, I feel it is important to note the negligible scrutiny that most of the legislation we are discussing today—with such high-falutin’ language from the Opposition—received when it was created. When our democratically elected Government of the people of the United Kingdom take decisions, for which they are accountable at the ballot box, that is what I mean by taking back control. The people who are elected are responsible for what happens. That is what we have, and we are accountable at the ballot box. When they go to the ballot box now, British people will know who to hold responsible: us. It is not some pooled whatever system in Brussels; it is here in the United Kingdom. Power sits within this legislature, which is elected by the people of this country; it is not about precisely where the powers sit within our legislature. That is why it seems ironic that the Opposition parties had so little concern when powers were exercised on the other side of the channel, but apparently it is outrageous when those powers are exercised here by a democratically elected Government.
Several hon. Members rose—
Graham Stuart
I am not going to give way. If I was, I would certainly let them know, Sir Gary. [Hon. Members: “Lack of scrutiny!”] More important than issues around lack of scrutiny is the Minister’s failure to keep everyone calm. I recognise that is a significant misstep on my part.
Let me first turn to clause 15. Any regulations made under subsection 15(2) that recreate a power to make subordinate legislation or a criminal offence present in the retained EU law that is being replaced are already subject to the affirmative procedure, as are those regulations making alternative provision to the REUL being replaced under subsection 15(3). The power to update has been crafted so that we can do this in the right way. I must underscore this by saying that the power is intended to enable UK legislation to be updated to reflect future advances in science and technology, rather than to provide for any fundamental policy changes.
Given the scope of the power and the amendments that we expect to be made to regulations under this power, we judge the negative procedure to be the proportionate level of scrutiny. We therefore do not assess that it is necessary or appropriate for all regulations made under clauses 15 or 16 to be subject to the draft affirmative procedure. To do so would place additional pressure on parliamentary time and detract from the legislative agenda, and indeed from the scrutiny of substantive measures that should be subject to that positive scrutiny that we are talking about. I therefore ask the hon. Gentleman to withdraw the amendments.
Peter Grant
Thank you, Sir Gary, for calling me to speak. You will be aware that I attempted to intervene on the Minister to correct his mistake, because we are not in the same position with this Bill as we were with European legislation. The reason that Parliament did not do more to scrutinise the action of British Government Ministers in making legislation on our behalf while we were in the European Union is that, for most of the time, Parliament under any Government was completely supine. This Parliament is set up in such a way that it does what the Government tell it to do. It is headline news around the world if Parliament does not do what the Government tell it to do. Parliament had the power to rein in Ministers, but shamefully it repeatedly failed to do so. If this Bill goes through, Parliament will not have that power; Ministers will be able to do pretty much what they like.
The Minister talks very grandly about the fact that people have the chance to hold the Government to account. It is not a debate for just now perhaps, although some of us think that it is a debate for every day of the week, but the people of Scotland have been holding this Conservative party to account since 1955 and they just cannot get rid of them. He will perhaps understand why we can have no confidence in a legislative process that puts powers into the hands of a group of Ministers who people in Scotland have rejected at every opportunity they have been given since before I was born.
Alex Sobel
I want to just pick up on the idea that before 2016, or before early 2020 anyway, the regulations that we are talking about were somehow just created out of thin air—that an EU Commissioner decided one day that that was the regulation and that was it, and suddenly it was law in this country. That is a long way from the truth. The regulations had to go through the Council of Ministers, on which a UK Minister sat; they had to go through the European Parliament, where UK MEPs sat and provided scrutiny; and then they had to go through this House and the whole process here in the UK Parliament. When they related to devolved bodies, they also had to go through the devolved Administrations. I do not understand the argument that somehow there was a lack of scrutiny and process before, and now there is proper scrutiny and proper process. What our amendments would do is introduce the affirmative procedure.
Stella Creasy
Does my hon. Friend agree that there is a heavy irony in a Minister who refuses to take interventions and to be held accountable for what he says suggesting that nobody should be worried about the details of parliamentary scrutiny, who then cloaks himself in an argument that somehow the scrutiny mechanisms within the European Union were not acceptable?
Alex Sobel
That is a theme running through the whole Bill. First, Ministers want to take powers for themselves—for the Executive—and away from Parliament. I understand that the Executive in this country is elected, at least in part—that is, down at this end of the building. Secondly, even in the microcosm of this Bill Committee, this is the third part of the Bill on which Ministers have refused to take interventions from the Opposition. They are not prepared to allow relevant scrutiny, which creates an even stronger argument as to why we need protections.
Justin Madders
Does my hon. Friend agree that although we hear an awful lot about how terrible the processes were and about these laws being imposed on us, as we discussed at length, we never hear which specific laws the Government object to?
Alex Sobel
As we do not know, there might be more than 4,000 of these regulations. We would all like lists of the various different types of regulations; I would certainly like to see which of the regulations did not receive adequate democratic process and scrutiny.
In conclusion, all of the arguments that we have heard make it even more important that the Committee accepts these two amendments.
Brendan O’Hara
I beg to move amendment 69, in schedule 3, page 33, line 10, at end insert—
“Consent of Scottish Ministers
8A Before making regulations to which this Part of this Schedule applies, a Minister of the Crown must obtain the consent of the Scottish Ministers.”
This amendment modifies the powers which are conferred on Ministers of the Crown in devolved areas so that they may only be exercised with the consent of the Scottish Ministers.
Amendment 69, tabled in my name and that of my hon. Friend the Member for Glenrothes, simply adds a line to the end of schedule 3 that, in layman’s terms, would prevent the UK Government from acting in areas of devolved competence without the consent of the relevant Scottish Government Minister or Ministers. In previous sessions, we have discussed how the UK Government plan to avoid parliamentary scrutiny by packing Delegated Legislation Committees of this House, and using secondary legislation to dispose of thousands of pieces of retained EU law.
The Minister has heard that we on these Benches are deeply concerned about the lack of parliamentary scrutiny. Although we who work in this Parliament might be concerned, it is completely unacceptable that the Governments and parliamentarians across these islands will be excluded from those Committees and will have to sit and watch us. My hon. Friend the Member for Glenrothes pointed out that they will have to watch as members of a party that has not won an election in Scotland since 1955 push through change after change to legislation in areas that have been—and are—wholly devolved, and which the people of Scotland and its democratically elected Government do not want changed.
It is yet another example of things being done to us, against our wishes, by a Government who we did not elect. I say to the UK Government that amendment 69 is another opportunity to show the people of Scotland that you value their opinion, you respect their Parliament and Government, and you wish to respect the devolution settlement. I urge you to accept this amendment. If you do, then maybe you will go some way to letting the people of Scotland know that you are not coming for our Parliament or our powers.
The Chair
Just a reminder that “you” is me. Does the hon. Gentleman mean the Minister, because I love the people of Scotland?
Brendan O’Hara
Absolutely, Sir Gary. I have no idea what you wish to do after you leave this place, but I am certain it is not that. If the Minster accepts the amendment, that would maybe go some way to showing that his Government are not coming after our powers or our Parliament.
Graham Stuart
I urge the members of the Committee to reject the amendment. As they are aware, the Bill contains a sunset date of 31 December 2023, by which all retained EU law will be removed or reformed. That date was chosen to create the impetus for REUL reform and enact change at the earliest opportunity. The Bill has been drafted to ensure that the sunset date is workable, but it is pivotal that there are no impediments or delays in that process. A delay of a month or more to seek consent would make it more difficult for the necessary regulations to be laid before that date. That risks the inadvertent sunsetting of laws that Departments have identified they wish to keep.
Peter Grant
The Minister appears to be admitting that the ideological, arbitrary and unnecessary deadline of the end of next year is more important than the basic processes of democracy and of courtesy towards the devolution settlement. Is that correct? Is that what he is saying?
Graham Stuart
I congratulate the hon. Gentleman and his colleague, the hon. Member for Argyll and Bute, on the mental and political gymnastics through which they put themselves in order to make out that perfectly reasonable, fair, proportionate and devolution-friendly legislation is somehow an affront to the Scottish people and devolution. It takes a particular turn of mind and will to twist everything into a grievance, even when that is not borne out as a reasonable outcome.
The UK Government take into account a variety of factors when seeking delegated powers in devolved areas. Each Bill is drafted according to its specific policy intent and the most appropriate way to effect those policy changes. The powers for the UK Government to make statutory instruments in devolved areas are not new, and have been used across a wide range of policy areas since the advent of devolution. That is because it is often appropriate for the UK Government to amend existing, or introduce new UK-wide regulations, including in devolved areas. That approach is more efficient and ensures greater coherence across the UK, as well as making it easier for our stakeholders.
Furthermore, the amendment would impose on UK Ministers a consent requirement from Scottish Ministers for provisions in areas of devolved competence. As I said, the boundaries are not always clearcut and could give rise to litigation, which might result in regulations being struck down by the courts.
The Bill is not intended to take powers from the devolved Governments and nothing in our proposed legislation affects the devolution settlements. In fact, the powers under the Bill will give the devolved Governments greater flexibility to decide how they will regulate those areas governed by retained EU law in the future. That will enable the Scottish Government to make active decisions about retained EU law within their devolved competence for the benefit of citizens and businesses in Scotland. What a shame that we did not hear any of that reflected in the contribution of the SNP spokesman, the hon. Member for Argyll and Bute.
The Government remain committed to continuing discussions with the devolved Governments throughout the passage of the Bill to ensure that the most efficient and appropriate approach to REUL reform can be taken in every situation in a way that works and provides certainty for all parts of the UK. As I said and do not apologise for repeating, the Scottish Government will be able to make active decisions about retained EU law within their competence. They need to get on with that and not have their representatives in this Parliament making out inaccurately that the Bill makes impositions on Scotland that it does not.
Brendan O’Hara
It is nice to see the Minister revert to type. Having been regaled for the past two or three days by someone with a slightly more considered approach, it is nice to see that the Government’s gloves have finally come off. We are getting down to the nitty-gritty of the Bill.
Let us be absolutely clear: this Bill is a full-on attack on the devolution settlement. Coupled with the United Kingdom Internal Market Act 2020, this is an attack on our Parliament and our power. The idea that the Bill is “devolution-friendly” is literally laughable, as he heard from the reaction to it of me and my hon. Friend the Member for Glenrothes.
To be clear, that date of 31 December was chosen without consent. No one asked the Scottish Government or the Scottish Parliament if they agreed to that date. The date is ideological, arbitrary and a cliff edge 13 months from now, and it is almost certain to fail. It is an impossible target to achieve, and it will not be achieved. I say to the Minister again: we are giving him and his Government the opportunity to show that they respect the devolved settlement and Administrations. The amendment gives them the opportunity to say once and for all: “We respect you, listen to you and value your contribution.”
Despite all the Minister has said, I urge him yet again to accept the amendment. If he does not, however, I will not press it to a vote.
Peter Grant
It is not only in their debate style that we have seen a complete contrast between the Minister and his colleague the Minister for Industry and Investment Security, who was in Committee last week. We should remember what the Minister’s colleague said last week about the need for the 31 December deadline and how achievable it was. When we raised concerns that bits of legislation will be repealed by mistake, that was scaremongering. When we raised concerns that if the Government force through 90,000 job cuts in the civil service, civil servants who are already overworked will be put under impossible pressure, that was scaremongering as well. When we warned that the pressure would lead to more mistakes being made than would be acceptable or sustainable, that was scaremongering because the civil servants would get it right first time in just over a year. Now we are being told that a delay of a month in a small minority of some of these 4,000 bits of legislation would be so catastrophic that it cannot even be allowed in the name of simple democracy or simple courtesy.
If the Minister is concerned that a month’s delay is too long and if the Government are really on top of the problem, as they keep telling us they are, they could send a message to the devolved Governments today to say: “These are the parts of retained EU law that we think have got a direct impact on your devolved powers. We only need to give you a month to decide whether or not to give consent. But because the Government are in control and we know what we are doing, we can give you six months. If you come back in six months and tell us whether you consent, we still have three months to negotiate any differences and then a full three months to put the legislation in place.” That is how the Government would manage the situation if, first, they really were in control and knew what they were doing, of which we have seen very little evidence so far, and secondly, if they really believed in and respected the spirit of devolution.
The spirit of devolution is that there will be different answers in the four different nations of the United Kingdom because there are different needs, different priorities and, as we see, more and more different expressions of political will. On that point, the Minister keeps referring to the suggestion that Government Members understand and respect the will of the people of Scotland. We are prepared to put that to the test at any date of the Government’s choosing. The Government are running away from the will of the people of Scotland.
Brendan O’Hara
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Chair
Just a gentle reminder that we are sometimes in danger of making Second Reading speeches on some of the amendments. We all know the rules, so let us keep our focus on the amendment in hand.
Question proposed, That the schedule be the Third schedule to the Bill.
Justin Madders
It is worth spending a little time on schedule 3 because it is the engine underneath the dashboard of the vehicle that will drive us off the cliff edge at the end of next year. It gives the Government the ability to use regulations to carry out the heavy lifting required by the Bill. As we have discussed many times already, we know the potential ramifications of that for the huge range of protections that our constituents currently enjoy and for the lack of parliamentary oversight that there will be in that process.
We have said all this before, but the broad changes that will be carried out under the regulations will mainly fall under the negative procedure. Offering only the affirmative procedure to a small proportion of the changes envisaged by the Bill falls far below the standard of scrutiny that we would expect. When one considers the sheer number of regulations required to make the changes, which we have talked about, and of course the risk that laws will fall by default because the relevant Department has not identified them, the concerns over lack of scrutiny multiply.
Stella Creasy
Does my hon. Friend agree that what is so critical is that we depend on Ministers knowing what is affected and what is not? I am struck by the fact that the Minister tried to tell us on Second Reading that airline safety rules would not be included and therefore we did not need to worry about the regulations. In fact, subsequent written parliamentary questions have confirmed that the SIs around airline safety were part of the Bill and therefore not contained in the Civil Aviation Act. Does my hon. Friend agree with me that making sure the engine underneath is roadworthy is perhaps one of the most critical things we can do in Committee, given that Ministers themselves perhaps should not be at the wheel?
Justin Madders
I think I have got rather lost in the number of analogies there; I might want to pull over and take a breather. The point is that we just do not know the full extent of the Bill. If we do not know, and if the Ministers and civil servants do not know, we cannot be confident that there will be no unintended consequences, which is why the level of scrutiny that the Bill affords is inadequate.
The wider problem is the way the Bill is framed. It seeks to provide the wrong answer to, essentially, the right question—“What do we do about all the retained EU law?”—but I am afraid that the answer we have come up with is wholly inappropriate. It does not uphold principles of scrutiny or parliamentary supremacy; actually, it makes Parliament a bystander in large parts of the process.
Graham Stuart
Schedule 3 specifies how the powers in the Bill will be exercised through regulations made by statutory instrument or the relevant equivalent in the devolved Administrations. The schedule sets out the parliamentary procedure applicable to specific powers in the Bill, including in cases where instruments contain combined provisions using a number of powers. It provides for equivalent procedures to apply in the devolved legislatures and for joint procedures to be available when Ministers of the Crown are making regulations jointly with devolved authorities.
The hon. Gentleman asked about the sifting procedure. The sifting procedure will apply to legislation made under clause 12, the power to restate retained EU law; clause 13, the power to restate assimilated law or sunsetted EU rights, powers, liabilities and so on; and clause 15, powers to revoke or replace, where Ministers decide to use the negative procedure. The sifting procedure largely corresponds with the sifting procedure under the European Union (Withdrawal) Act 2018 and under the European Union (Future Relationship) Act 2020. In both cases, sifting was effectively used to ensure proportionate parliamentary scrutiny on legislation regarding EU exit.
Under the procedure, recommendations on the appropriate procedure from both Committees, in the House of Lords and House of Commons, must be received before the instrument can be made. If either Committee recommends that the instrument should be subject to the draft affirmative procedure, the Minister must either follow that recommendation or publish a written statement explaining why they disagree with the Committee’s recommendations. If no recommendations have been received from the Committees after 10 days, the legislation can be made under the proposed procedure.
The sifting procedure will provide additional scrutiny of the powers while retaining the flexibility of using the negative procedure when and only when there are good reasons for doing so. The Government recognises the significant role Parliament has played in scrutinising instruments subject to these sifting procedures and are committed to ensuring the appropriate scrutiny of any secondary legislation made under the delegated powers in the Bill.
Question put and agreed to.
Schedule 3, as amended, accordingly agreed to.
Clause 21 ordered to stand part of the Bill.
Clause 22
Commencement, Transitional and savings
Brendan O’Hara
I beg to move amendment 66, in clause 22, page 21, line 39, at end insert—
“(aa) section [Impact assessments];”.
The Chair
With this it will be convenient to discuss new clause 3—Impact assessments—
“The Secretary of State must publish an assessment of the impact of the
(a) revocation of any—
(i) EU-derived subordinate legislation, or
(ii) retained direct EU legislation, or
(b) removal under section 3 of any rights, powers, liabilities, obligations, restrictions, remedies or procedures saved by virtue of section 4 of the European Union (Withdrawal) Act 2018 at least three months before the revocation or (as the case may be) removal takes effect.”
Brendan O’Hara
I will be mercifully brief. The amendment stands in my name and that of my hon. Friend the Member for Glenrothes. The amendment and new clause 3 would oblige the UK Government to provide an impact assessment on what they believe the likely consequences would be of any withdrawal of a piece of legislation before any revocation of the EU law takes place. That impact assessment should be published three months ahead of any scheduled revocation date.
The Government may see that requirement as a tad onerous, but it simply reflects the gravity of what the Government are planning with retained EU law. It would ensure that, rather than having the planned bonfire of legislation, the Government and their Departments of State are forced to consider very carefully and in great detail exactly the consequences of what they are about to do. Is that not what our constituents would expect of this Parliament and its parliamentarians—to consider very carefully the consequences of each piece of action that it takes and what impact it may have on those constituents, their businesses and livelihoods? I urge the Government to accept the amendment and new clause.
Graham Stuart
I ask that the Committee reject the amendment and new clause. When retained EU law is a regulatory provision and is being amended significantly, we would expect Departments to put their measures through the Government systems for regulatory scrutiny, such as the better regulation framework.
Where measures are being revoked, Departments will be expected to undertake proportionate analytical appraisal, and we are exploring appropriate steps that we can take to appraise the resulting impacts. However, given that Departments will undertake proper and proportionate cost-benefit analysis in relation to amendments to retained EU law, we do not consider there to be a need to include a reference to impact assessments in clause 22, relating to commencement, as such procedures and approaches are baked into the way Departments behave. I therefore ask the hon. Gentleman to consider withdrawing the amendment.
Brendan O’Hara
I am disappointed but not in the least surprised by the Minister’s response. In the future, when we pick over the detritus of the Bill and people say, “Why did they do it the way they did it?” the Government will never be able to say that they did not know what would happen and that it was not brought to their attention. They have decided to plough on regardless with this self-imposed cliff-edge deadline. I will not push the amendment to a vote. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Brendan O’Hara
I beg to move amendment 71, in clause 22, page 21, line 39, at end insert—
“(aa) section [Assessment of the impact of repeal of retained EU law];”.
The Chair
With this it will be convenient to discuss new clause 7—Assessment of the impact of repeal of retained EU law—
“Within three months of the passage of this Act, the Secretary of State must publish an assessment of the impact of the repeal of any retained EU law done under the provisions of this Act.”
Brendan O’Hara
I will again be brief. The amendment and new clause would oblige the UK Government to publish an impact assessment of the consequences of repealing retained EU law. If they are not prepared to publish an analysis before, it is incumbent on them to publish an impact assessment of the consequences of every piece of retained EU law that is being revoked, and for that impact assessment to be published no later than three months after the date that any revocation has taken place.
This proposal is similar to what we proposed with amendment 66. We understand that it will take a great deal of work for Ministers and officials, but given the seriousness of the consequences of getting this wrong, if this revocation of retained EU law has to happen, it should happen with as little negative impact on businesses and people’s lives. That may mean a little extra work for Ministers, their staff and Whitehall Departments, but we think it is well worth doing.
I hope the Minister will view this amendment—indeed, all our amendments—as being in the spirit of trying to make what we have described as a truly awful piece of legislation just a little better. As we said at the outset, given the rate at which the Government are planning to proceed, mistakes are absolutely inevitable, and people—our constituents and their businesses—will be hurt by those mistakes. If the Government are not prepared to do an impact assessment before they revoke EU law, it is incumbent on them to carry one out after the EU law has been revoked so we can understand the consequences of what has happened and hopefully avoid a future catastrophe.
Graham Stuart
I thank the hon. Gentleman for the constructive spirit in which he tabled the amendment and new clause. None the less, I ask the Committee to reject them. They are similar to the previous group. Given that Departments will undertake proper and proportionate analysis in relation to amendments to retained EU law, and that effort is under way to understand the potential impacts of sunsetting, we do not consider that there is a need to include them in the Bill. I therefore ask the hon. Gentleman to withdraw them.
Brendan O’Hara
I thank the Minister for his reply. It is nice to see that the temperature has come down somewhat. If only to reassure the public that what they are doing is working, it is incumbent on the Government to provide these impact assessments. The Bill is happening hurriedly and, dare I say it, with a lack of planning, and when it hits the buffers on 31 December next year, people have a right to know what that means for them. However, I will not press the amendment to a vote. I am certain that we shall return to this issue on Report, but I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Brendan O’Hara
I beg to move amendment 61, in clause 22, page 21, line 42, at end insert—
“(da) section [Impact on the UK’s obligations under the Trade and Cooperation Agreement];”.
The Chair
With this it will be convenient to discuss new clause 1—Impact on the UK’s obligations under the Trade and Cooperation Agreement—
“Within three months of the passage of this Act, the Secretary of State must lay before Parliament an assessment of the impact of this Act on the UK’s obligations under the Trade and Cooperation Agreement between the UK and the European Union done at Brussels and London on 30 December 2020.”
Brendan O’Hara
When England and Wales voted to leave the European Union, and took Scotland and Northern Ireland out of the EU along with them, the United Kingdom Government signed a withdrawal agreement with Brussels. In return for certain rights and privileges in terms of trade with the EU, the United Kingdom promised not to diverge from the agreed level playing field set out in the trade and co-operation agreement.
I and many others have serious concerns that, if the Bill passes into law as it stands, the United Kingdom is in grave danger of breaching the international agreement it signed—I presume in good faith. On the presumption that the trade and co-operation agreement was signed in good faith, and that the UK Government would not knowingly and deliberately break such an important international treaty, I strongly urge the Government accept amendment 61. It would oblige the Government to publish, within three months of the Bill becoming law, an impact assessment of how the revocation of retained EU law, particularly on workers’ rights and environmental protections, has affected the trade and co-operation agreement.
The Government cannot be deaf to people’s concerns about the Bill, or to the genuinely held fear that, if it is pushed through unamended, and is implemented in the way that the Government have suggested, it will have a detrimental impact on the level playing field agreement with the European Union. If that happens, and if we stumble, accidentally or otherwise, into a situation in which we have broken the level playing field agreement, I fear that the United Kingdom could expect economic sanctions to follow. The last thing that the economy needs right now is another completely avoidable self-inflicted knock.
I urge the Government to accept the amendment. It makes sense. It sends a signal to our friends in the European Union that the United Kingdom is not about to unilaterally diverge from or break its international agreements, that we respect the level playing field, and that we will stick to what we said.
Justin Madders
I will be brief. This is an issue about which we are also concerned. No one wants to enter into a trade war because a Minister makes a mistake, and amends or forgets to restore regulations. That is what the Bill risks. I remind the Committee what the hon. Member for Watford (Dean Russell) said on Second Reading:
“I am very happy to make a commitment today that the Government will, as a priority, take the necessary action to safeguard the substance of any retained EU law and legal effects required to operate international obligations within domestic law. We will set out where retained EU law is required to maintain international obligations through the dashboard”—[Official Report, 25 October 2022; Vol. 721, c. 189.]
We are back to the dashboard. That is not quite as good as having something in the Bill, which is what the amendment seeks. However, it prompts a question for the Minister: when can we expect the commitments regarding the lovely dashboard to be honoured? We are all regularly hitting “refresh” to see whether the dashboard will be updated with the additional 100-plus or 1,400-plus Bills that have been identified. It is important that our international obligations are maintained. If there is a way of ensuring that Parliament is content, we are happy to support the amendment.
Graham Stuart
I ask the Committee to reject the amendment. None the less, the Government agree about the importance of the UK continuing to meet the obligations set out in the UK-EU trade and co-operation agreement. As a sovereign nation, we have the right to regulate as we see fit and in the best interests of the UK. This right is preserved in the UK-EU trade and co-operation agreement, and the Bill is part of us exercising that right. The level playing field provisions commit the UK and EU not to weaken or reduce overall levels of protection on labour and social standards, climate and the environment in a manner affecting trade or investment between the parties.
The Government’s intention is to ensure the necessary legislation is in place to uphold the UK’s international obligations. That is why we pledged on Second Reading to safeguard in domestic law the substance and legal effect of any retained EU law necessary to meet those international obligations. We have an exciting opportunity to embark on ambitious regulatory reform and remove outdated legislation that does not suit the UK. We can build on the high standards we have committed to within the trade and co-operation agreement, and at the same time boost competitiveness and productivity—something I hope the whole Committee will support. I therefore urge the hon. Member for Argyll and Bute to withdraw the amendment.
Brendan O’Hara
I thank the Minister for that response. Whether on workers’ rights or environmental protection, we have heard so much evidence and correspondence from people outside this Parliament who have genuine fears that this is the starting pistol of a deregulatory race to the bottom. If that were to be the case, I fear that the United Kingdom would be in breach of the level playing field agreement. I do not think the Government have fully considered the implications of this legislation. All my amendment sought to do was force the Government to consider those implications. I would push it to a vote, but I think it is another issue we will return to at a later stage, because it is vital that we are not seen to be tearing up international agreements or flying in the face of them in the way I fear the Bill will do. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Brendan O’Hara
I beg to move amendment 65, in clause 22, page 21, line 42, at end insert—
“(da) section [Disapplication of the UK Internal Market Act 2020];”
The Chair
With this it will be convenient to discuss new clause 2—Disapplication of the UK Internal Market Act 2020—
“Where Scottish Ministers have used any power granted to them under this Act—
(a) to provide that any EU-derived subordinate legislation or retained direct EU legislation is not subject to revocation at the end of 2023, or
(b) to restate any provision of retained EU law (or, as the case may be, assimilated law), that legislation or provision shall apply notwithstanding any provision of the UK Internal Market Act 2020.”
Brendan O’Hara
Having been mercifully brief previously, I may take slightly longer now, because I think these measures are fundamental to our concerns about the Bill. Amendment 65 and new clause 2 would ensure that UK Ministers could not use the United Kingdom Internal Market Act 2020 to undermine or deny Scottish Ministers protecting retained EU law. These measures go to the heart of the issue—working between the internal market Act and this Bill.
We have said throughout Committee that even if this were a standalone piece of legislation, it would be sufficiently bad for us to oppose it at every step of the way. But for Scotland—and, I suspect, other devolved Governments—we have taken it in conjunction with the internal market Act. Not only does it present an existential threat to Parliament and the devolution settlement; this Bill is a disaster for crucial parts of the Scottish economy. I do not think it was coincidental or accidental. This is part of a deliberate policy to undermine and weaken devolution and the devolved Parliaments. It is designed to force the constituent parts of the United Kingdom to align their policies with those of the UK Government and to do what this Government tell them to do. The United Kingdom Internal Market Act 2020 knowingly created confusion and deliberately blurred the hitherto clear lines of demarcation that existed.
The Bill, when in effect, will impose this place’s will on areas that have been wholly devolved since the Scottish Parliament was reconstituted more than two decades ago. In the areas of the environment, health, food standards and animal welfare, the democratically elected Scottish Parliament is the body that sets policy and direction. Since the internal market Act came into effect, we have seen significant encroachment by the UK Government into these wholly devolved areas. Amendment 65 and new clause 2 would ensure that if the Scottish Government and Scottish Parliament decided that they wished to remain aligned to EU law, they could do so without the imposition of the internal market Act forcing them to change their position.
The infringement into the powers of our Parliament has, I fear, become a full-scale attack, with blanket, UK-wide—from Truro to Thurso—policies being imposed in areas over which this Government have no legislative consent. It is a crusade to weaken food standards, animal welfare, product labelling, environmental health and so much else by a Government who have no mandate to operate in those fields in Scotland. As I said earlier, this is the starting pistol on the deregulatory race to the bottom. That is why the United Kingdom Internal Market Act and the Bill have been brought in in this way. It goes completely against the spirit of devolution and is in direct contravention of the Sewel convention.
Before Second Reading, I met with the regional board of the National Farmers Union of Scotland in Argyll and Bute on a farm near Oban. The message was stark: farmers feel forgotten and undervalued. They have been battered by Brexit and they now face this Bill, which, they have said, is a potential death sentence for the agriculture sector in Scotland, which requires subsidies to manage the land, keep the lights on in the hills, provide employment and stem rural depopulation, as well as producing high-quality, high-value beef, lamb and dairy.
We know that the Bill will allow the lowering of food standards. We know that it will allow the relaxation of rules around labelling and animal welfare. We know that it will allow mass importation of inferior-quality products. All that will be an unmitigated disaster for Scottish agriculture. Our farmers are also painfully aware that, as it stands, there is very little that their democratically elected Parliament can do about it.
Last Wednesday, between our sittings on Tuesday and Thursday, I met Martin Kennedy, president of the National Farmers Union of Scotland, and his officials. They repeated almost word for word what I was told by my Argyll and Bute farmers. Martin Kennedy’s message to the Committee and this Government is that he and his members have severe reservations and concerns about the potential impacts of this Bill. As we do, he and his farmers accept that the Bill cannot be taken in isolation, but has to be put alongside the United Kingdom Internal Market Act.
Scottish farmers are not best noted for their political radicalism—probably because they are so busy battling the elements day and night to produce some of our best dairy and meat products—but this Government should understand that the Scottish agriculture sector is up in arms, maybe as never before, about the Bill and the United Kingdom Internal Market Act, and their disastrous consequences. If the Government will not listen to us here today and choose to ignore the Scottish Government, I implore them: listen to Martin Kennedy and his members about what this Bill will do to them, and their businesses and livelihoods. They are the ones who will bear the brunt of being forced into a UK-wide, one-size-fits-all regulatory framework that forces us to diverge from EU regulations.
When supermarket shelves become full of cheap, inferior cuts of meat, when lorryloads of chlorine-washed chicken cross the border and saturate the market, when animal welfare is a thing of the past, and when labelling rules are so relaxed that consumers do not know what they are consuming, that is a death knell for Scottish agriculture. The people of Scotland should be in no doubt that this Bill, coupled with the United Kingdom Internal Market Act, means one thing and one thing only: this place is coming for our Parliament and our democracy.
Justin Madders
Unfortunately, the new clause appears to apply only to Ministers in Scotland, not in the other devolved nations, but it does raise some important issues. If we start from the proposition that it is right that in areas of devolved competence, the devolved Administrations should have the ability to re-regulate their own priorities, which, I think, is where the Bill takes us, it does not take much to see where that might cause some difficulties, particularly when the Bill creates no wider duty in relation to the operation of the market access principles underpinning the UK internal market. The Bill creates the risk of new barriers to trade in the UK internal market. I accept that there is a conundrum there.
We want to allow the devolved nations to develop policy as per their own competencies, but there is no process in the Bill for resolution of any regulatory differences between the UK and the devolved Governments and, critically, no process for businesses or consumers to be consulted on the potential for new barriers between England, Scotland and Wales for certain categories of good. We need to understand how the Government intend to address that. Are the processes in the UK Government and devolved Administrations common frameworks post Brexit intended to apply to the Bill? If so, it is not clear from the Bill. Perhaps the Minister can reassure us on that.
Peter Grant
I take the initial point of the hon. Member for Ellesmere Port and Neston that we should perhaps have included the other devolved nations. It is an indication of the weakness of the Bill Committee system that sometimes some of the devolved nations have no representation whatever on a Committee. Of course, the way to address that is for the Government to signal their clear intent by accepting the amendment and undertaking to introduce an equivalent amendment protecting Northern Ireland and Wales at a later stage.
My hon. Friend the Member for Argyll and Bute raised a concern that the Bill will be used to lower standards. The Government always howl in protest and say that it will not be, but last week they insisted on including a clause that would prohibit making regulations under the Bill that placed additional burdens on businesses. They have not introduced a clause that prohibits the use of the Bill to make regulations to lower standards on workers’ rights, animal welfare or anything else. I wonder why that might be.
My hon. Friend also pointed out yet again that the presumptuous way in which the UK Government forced through the United Kingdom Internal Market Act 2020 was based on the assumption that, notwithstanding the devolution settlements, Ministers in the British Government have the right to overrule the elected national Parliaments and Governments of Scotland, Wales and Northern Ireland. Although there will be cases where it is better to have similar or sometimes identical standards across these islands, the Government assume that what is decided by those who are elected by and for the people of England should automatically be what is imposed on the people of the other nations of the United Kingdom. That is not how devolution works. That is not how consensus works, which is what the Secretary of State for Scotland kept going on about last Wednesday in reply to our urgent question.
If the Government seriously want to work by consensus across the four nations, they would introduce legislation that required it to be in place before anything was done to change legislation. The Government have been reminded umpteen times over the past few weeks of the devolved competencies of our national Parliament in Scotland, Senedd Cymru and the Assembly in Northern Ireland. I appreciate that there is a different situation in Northern Ireland just now, and that there may be times when it is essential, and in the interests of the people of Northern Ireland, for the UK Parliament to act when the Northern Ireland Assembly is not functioning, but the Bill is not about stepping in in emergency circumstances. The Bill, and the clause that we are looking at, is about the Government having the right to step in wherever it suits them.
I urge the Government to accept the amendment. I know they will not, because they seem to be under orders not to listen to or accept any amendment, regardless of how sound or sensible it is, if it comes from the wrong side of the Committee. If that is an indication of the way they intend to use the powers that the Bill will give them, we should all be very concerned indeed.
Graham Stuart
I urge the Committee to reject the amendment. The UKIM Act was introduced to protect businesses, jobs and livelihoods following our exit from the EU. The amendment seeks to disapply the provisions of the UKIM Act in cases where Scottish Government Ministers use the powers contained in the Bill to preserve or restate retained EU law. The operation of the UKIM Act is essential in maintaining our integrated market to ensure the free flow of goods, services, and people through the recognition of professional qualifications throughout the UK. The UKIM Act provides certainty for businesses and consumers where divergent approaches to regulation are taken in different parts of the UK, and the provisions of the Bill do not change that.
We recognise and value four nation co-operation—that is one reason that all four Administrations jointly started the common frameworks programme—and we remain committed to working with the devolved Governments in areas of shared policy interest, including REUL. I can see why the hon. Member for Argyll and Bute, from an oppositional point of view, would make out that we will lower our standards, but that is absolutely not our intent. Food standards are a devolved matter—I think that will be reassuring for Martin and his members—and key measures in the Bill apply to the devolved Administration. Accordingly, the devolved Governments will be able to exercise the powers in the Bill to amend retained EU law in their existing devolved competencies. We will work with all the devolved Governments, including the Scottish Government, on retained EU law reforms in line with commitments and common framework agreements that cover food standards.
Brendan O’Hara
If food standards will be absolutely protected and enshrined, as the Minister said, will he give me a cast-iron guarantee that, if the Scottish Government decide they do not want chlorine-washed chicken, they can prevent lorryloads of chlorine-washed chicken from crossing the border? Can he give me a cast-iron guarantee that if the Scottish Government say that they do not want inferior, cheap, hormone-injected beef on Scottish supermarket shelves, they can prevent that from happening? Can he give me a guarantee that, should the Scottish Government decide they will stick to the legislation on animal welfare and passporting, that too will be absolutely protected in this legislation?
Graham Stuart
Of course, chlorine, chlorine dioxide and other chemical washes have not been approved for washing chicken meat, and therefore are not allowed to be used. The hon. Gentleman can paint up any number of other unfounded scare stories and ask for categorical assurance from the Government that they are not planning to kill every firstborn, but I assure the Committee that that is not our intention.
Brendan O’Hara
Let me rephrase the question. Should the UK Government decide that chlorine-washed chicken is acceptable and the Scottish Government decide it is not, could the Minister give me a cast-iron guarantee that the primacy of the Scottish Government’s decision to continue to ban chlorine-washed chicken would be respected under the terms of the Bill?
Graham Stuart
Of course, it may be a question as to whether the Scottish Government decide to approve chlorine-washed chicken. Imagine if the scientific evidence provided in Scotland did that; perhaps the Scottish Government are secretly planning to bring in chlorine-washed chicken, in which case we would have to consider how that would be dealt with. In that instance or any other, the Government will continue to work closely with the devolved Governments to manage intra-UK divergence, including through existing mechanisms such as the common frameworks programme and the UK Internal Market Act.
I will not insult the Committee by suggesting that the Scottish Government will do things that I honestly do not think that they will do; I just wish that the hon. Gentleman would do us the courtesy of doing the same. I urge him to withdraw his amendment.
Brendan O’Hara
I will not withdraw the amendment, and I will seek to divide the Committee. The Minister said that the UK Internal Market Act is there to protect the interests of business; perhaps it is there to protect the interests of business as long as the business is not a Scottish farmer. This will be the death knell for the Scottish agricultural sector. Those in the sector are not the most radical group on the planet, but this Government and legislation have fired them up as I have never seen before. This is not four nation co-operation; this is as far as we can get from four nation co-operation. This is one nation imposition. On that basis, I will seek to divide the Committee.
The Chair
Order. It is 11.25 am. We will start this afternoon at 2 o’clock with a Division. I know that Members are keen to get to the Chamber, so off you go.
Economic Crime and Corporate Transparency Bill (Nineteenth sitting)
Tuesday 29th 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 29 November 2022 - (29 Nov 2022)
The Committee divided: - Ayes: 6 / Noes: 8 - Question accordingly negatived.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
I beg to move, That the clause be read a Second time.
It is a pleasure to serve under your chairmanship, Mr Robertson, and it is fantastic to rise to do something more worthy in Committee than pour water for my hon. Friend the Member for Glasgow Central.
I accept completely that, as has been said many times, the Bill is excellent and we just need to tighten it up, and that it contains provisions, including on unique identifiers, that will help to block some of the more obvious means of carrying out the practice of phoenixing, which has been discussed both when we took oral evidence and throughout line-by-line scrutiny. However, it is my view, and that of many others, that we are missing a golden opportunity to fully address phoenixing with the Bill and to tighten up all parts of the regulations relating to Companies House.
The genesis behind new clauses 69 and 70 is a specific directorate and company the businesses of which have unfortunately harmed my constituents and many others across Scotland and throughout the UK. New clause 69 would stop those who burn through multiple limited companies leaving a train of destruction in their wake, with little or no recourse for the authorities. It would not prevent those who have no nefarious or ill intent but find that their company is unsuccessful, even on more than one occasion. It would not apply automatically to any individual who hits the three winding-ups limit; it would only allow the registrar to act if there were grounds to do so.
Around 10 years, a company called HELMS—Home Energy and Lifestyle Management Systems—controlled and operated by a man named Robert Skillen, went door to door in my constituency offering solar panels and home insulation as part of the now-scrapped UK Government green deal scheme. You will be pleased to know, Mr Robertson, that I do not intend to go over the whole story; suffice it to say that hundreds of my constituents and thousands of people across Scotland are still paying the price to the tune of thousands of pounds each.
Skillen was able to wind up HELMS, move on to his latest venture with millions in his back pocket and face no consequences for his personal actions. He is an individual—there will be thousands like him—with a long track record of extracting maximum value from his scams via limited companies and then setting up shop for a new crack at it, having defrauded thousands of people. He even had the cheek to set up a company to assist those who had been defrauded by his previous company to receive compensation from which he would receive a cut. That type of individual is currently beyond the reach of the law; hopefully, provisions such as the new clause would assist with that.
Mr Skillen was fined £200,000 by the Information Commissioner’s Office and £10,500 by the Department of Energy and Climate Change, as it was at the time, but the fact is that of that £200,000 he paid only £10,000 before winding the company up. That led the ICO to lobby the Government to enable it to fine individuals such as Robert Skillen up to £500,000.
In respect of cases such as those of Mr Skillen and many others who make sharp practice look easy and do so without any care or remorse, the new clause would act as a deterrent to the manipulation of company registration for personal gain and enrichment and prevent those who have used multiple company identities for malfeasance or sinister purposes from continuing that pattern of behaviour ad nauseum. I stress that the point of the new clause is not to prevent those who have had genuinely unsuccessful businesses from starting afresh. The registrar should be able to separate those cases from those of people with evil intent.
Companies House already has the power to disqualify directors and the new clause would simply allow it to consider slightly wider grounds on which such a disqualification could rest. It would help to put an end to the cases that every Committee member will have encountered in their constituencies of companies taking payment for goods and services, shutting up shop with the cash pocketed and then popping up again under a different name but carrying out exactly the same work. The purpose of the new clause is to tease out from the Minister the Government’s approach to phoenixing. With that, I rest.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
It is a pleasure to serve under your chairship, Mr Robertson, and to follow the hon. Member for Paisley and Renfrewshire North, who made a very important speech. New clause 69 would introduce new provisions to prevent the continued trading of companies repeatedly declared insolvent and the practice of phoenixing, which the hon. Member outlined. It states:
“A company may not be registered under the Companies Act 2006 if, in the opinion of the registrar of companies, it is substantially similar to a company which has been subject to winding up procedures under the Insolvency Act 1986 on more than three occasions in the preceding ten years.”
A company may be “substantially similar” to previous companies in terms of its name, registered office, proposed officers and so on. This would mean that there is more scrutiny, and questions are raised about whether a company should be able to continue trading.
It is very important, for the reasons we have outlined in Committee, to seek to protect the public and other businesses from unscrupulous operators effectively carrying on their business activity and going through the same cycle of building up debts, which leads to consumer issues, and simply disappearing and starting again. We must deal with that behaviour, which is a route through which economic crime takes place, and that is why we support the new clause. We will listen closely to the Minister’s response on how the Government propose to tackle the issue of phoenixing.
I note the similarity between the intentions of this new clause and new clauses 28 and 46, tabled by my hon. Friend the Member for Aberavon and I, which we have discussed. In different ways, all those new clauses would tighten up glaring loopholes around strike-off, insolvency and phoenixing that enable those who are participating in economic crime to avoid scrutiny. We welcome the new clause, and we look forward to the Minister’s response.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kevin Hollinrake)
It is a pleasure to serve with you in the Chair, Mr Robertson. I appreciate the spirit of the amendment, and I also appreciate the hon. Member for Paisley and Renfrewshire North describing this as an excellent Bill—a very constructive point—but one that needs tightening up; I understand his points and applaud the efforts made by him and other Opposition Members to do so.
I am fully aware of the devastating consequences that such issues have on businesses, suppliers, supply chains and our constituents. I have a case of a gentleman called Scott Robinson who repeatedly closed his investment business down. It was called TBO Investments at one point and then became Mount Sterling Wealth. He effectively took his clients with him, and people lost huge amounts of money. They had provided money for him to invest based on supposedly low-risk investments, but he was actually gambling that money in very high-risk investments, and he did that time and again. I really sympathise with the spirit of the amendment, and I am keen to look at not just phoenixing but other types of situation where people deliberately take risks like that that have devastating consequences for consumers and businesses in our constituencies.
Gavin Newlands
The Minister says he will look at this and is sympathetic to the issue. For clarity, does that mean a later stage beyond the Bill or at a later stage of the Bill?
Kevin Hollinrake
In my view, it needs further work rather than just plonking the new clause in the Bill. There is a wider issue here and I am pleased to see that he seems to acknowledge that. Certainly, a piece of work is needed to look at this in detail. There are some measures in place already—just the pre-pack arrangements subject to Committee scrutiny. I will come on to that in a second.
There are existing provisions in the Bill that provide safeguards against the fraudulent phoenixing behaviour that the new clause targets. Section 216 of the Insolvency Act 1986 makes provision for restriction and prohibition on the re-use of a company name when new companies are formed, which is an intrinsic feature of phoenixing and one that the hon. Gentleman addresses in his new clause. That provision will be complemented by the new powers contained in the Bill. For instance, the registrar may choose to exercise the power to compel the production of information to help her determine whether an application to incorporate a company complies with the proper delivery requirements. They will include that those named as prospective directors can lawfully act as such, which would not be the case if they were barred under the 1986 Act from acting as a director of a company using a prohibited name, and the registrar would be empowered to reject the incorporation application. Furthermore, the registrar will have greater power to direct companies to change their names if they deliberately mislead in their purpose. Such powers provide the registrar with a powerful tool when considering new company registrations.
The registrar will be able to examine and interrogate information already held and share data with law enforcement partners and other authorities. That will allow other key characteristics such as verified identities, the registered office, proposed officers and business activities to be critically assessed with intelligence received to spot patterns of phoenixing.
If adopted, the new clause would be largely duplicative of provisions already in place or those introduced by the Bill. It would also erode the registrar’s discretion in the application of their powers as envisaged. There will be some instances when companies are captured by the new clause and are not culpable, but are merely victims of a legitimate business failure trying to start their enterprise. For instance, the new clause mentions companies that have
“been subject to winding up procedures”.
In that situation, they may be companies that have not necessarily gone into liquidation. There might be other legitimate reasons that those procedures have taken place, which may not be reflective of something that might be considered phoenixing. So, the registrar must be allowed to apply their powers according to the facts and information available. As I have said, I am keen to look at that, including the pre-pack rules, to see where we can tighten up on the matter to make sure those instances are minimised. For all those reasons, I hope the hon. Member will withdraw his new clause.
Gavin Newlands
I thank the Minister for his response. The new clause was very much a probing amendment and the Minister points out one weakness. It is a small new clause for dealing with quite a big problem and I may look to table a much more rounded amendment on Report. With that, I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 70
Bar on directors in breach of duties receiving public funds
“(1) A company with a director or directors which are in breach of the general duties outlined in Chapter 2 of the Companies Act 2006, or who have been found to have committed statutory breaches of employment law, may not receive Government provided funds or financial support, unless subsection (2) applies.
(2) A company whose director or directors meet the criteria outlined in subsection (1) may receive Government provided funds or financial support if such funds or support are provided solely and specifically for the direct benefit of the company’s employees.”—(Gavin Newlands.)
This new clause seeks to prevent directors who fail to comply with their duties as a company director or with employment law provisions from being able to access funds in instances where these funds are for the benefit of the company and not the company’s employees.
Brought up, and read the First time.
Gavin Newlands
I beg to move, That the clause be read a Second time.
It is like London buses—I am back. I do not propose to take as long to speak to new clause 70, which proposes to turn off the tap of public funding to those who have failed to discharge their duties under the Companies Act or who have failed to discharge their duties to their company’s staff. I mentioned Mr Skillen previously, and his local constituency got in touch with me to tell me that he is back in business and that his company had been in receipt of public funds. The aforementioned Mr Skillen is currently a director of four limited companies, each one coming after the winding up of HELMS. Those companies are interlinked via control and ownership structures. Through that, Government loan funding was applied for and granted just before Mr Skillen became a director and owner of a large chunk of the new enterprise.
My new clause is very simple and would prevent those who fail to discharge their duties from receiving public money or support for any company for which they are listed as a director. Mr Skillen’s modus operandi was to misuse and mis-sell under the Government’s green deal scheme, but he popped up a few years later at a company benefiting from taxpayer funding and is involved in the energy business as well. It is simply not good enough that policy interventions intended to promote a wider economic strategy, be it local or national, are manipulated and used by spivs who are able to hide behind company registration and face no barriers to their actions from the registrar, short of the nuclear option of being barred from acting as a director.
We have seen a number of cases over recent years of multinational companies, such as P&O Ferries and, not quite to the same extent, British Airways, breaching their duties as employers and breaching employment law. Indeed, the chief executive of the former happily admitted breaking the law while appearing before the Transport Committee’s joint session with the Business, Energy and Industrial Strategy Committee. Such blatant and open law breaking cannot be rewarded with taxpayer support, and the new clause would ensure that those breaching laws that are meant to protect workers cannot then dip into the same workers’ pockets for financial support. It would not impact on workers, because any funding, such as for a furlough scheme, would not be affected by the new clause.
Seema Malhotra
This is a useful new clause, in the spirit of some of the new clauses that we have tabled on what should and should not be available to directors who are in breach of their duties, disqualified and so on. The new clause, tabled by our colleagues from the SNP, would introduce new provisions that bar directors who are in breach of their duties from receiving public funds. Under the new clause, a company with a director or directors who are in breach of the general duties outlined in the Companies Act 2006, or who have been found to have committed statutory breaches of employment law, should not receive Government-provided funds or financial support unless it is solely and specifically for the purpose of directly benefiting the company’s employees.
This is an important debate, and I would be interested in the Minister’s response. When taxpayers find out that their money goes towards effectively supporting or enriching directors who are in breach of the Companies Act, there will be a real question about what the Government can do to further disincentivise and not reward those who are in breach of employment law or other areas of legislation. We support the sentiments behind the new clause and the arguments being made, and I look forward to the Minister’s response.
Kevin Hollinrake
I thank the hon. Member for Paisley and Renfrewshire North for his new clause; again, I support the motivation behind it. Clearly, there are restrictions already. Where a director has failed to observe a specific duty under the Companies Act 2006, they will potentially find themselves liable to criminal sanction and disqualification. I accept the fact that we have not focused too much on that area in the past, but that is exactly why we are legislating in the Bill to make the registrar far more proactive in her work. Where an employer has committed a breach of employment law, the relevant statute will generally provide appropriate remedies either by way of a right of action for the worker—normally in an employment tribunal or the courts—or by way of state enforcement, or sometimes both.
The new clause seeks to isolate only two triggers for denying access to financial support. Although they may have merit as triggers, who is to say that there are no other matters of conduct on the part of either a company or its directors that might lead one to question the wisdom of awarding it taxpayers’ money? Obviously, that should be determined within the scheme rules. The hon. Gentleman pointed to a case in which a director was interlinked with four other companies. There are already restrictions on Government loans—covid loans, for example—which must be taken into account where there are interlinked schemes, and he is probably aware of that.
Gavin Newlands
I appreciate the Minister’s response. To pick up on a couple of his points, he said that there are already remedies available, but as we have seen there are far too few for employees who suffer at the hands of a nasty business owner. We have all seen such cases on the news or from our own case loads.
The Minister mentioned the regulations governing covid loans. Clearly, that is a very specific example, and he makes a fair point, but that is not the case for all public moneys. However, this is a probing provision and would require further work before I sought to test the Committee or the Chamber with a vote. I therefore beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 71
Suspicious Activity Reporting: risk rating
“(1) The Proceeds of Crime Act 2002 is amended as follows.
(2) After subsection 339(1) insert—
‘(1ZA) An order under subsection (1) must prescribe that a risk rating be included as part of a disclosure.’”—(Dame Margaret Hodge.)
Brought up, and read the First time.
Dame Margaret Hodge (Barking) (Lab)
I beg to move, That the clause be read a Second time.
I will be on my feet for a bit, so I will try to be succinct—I know that Members have other things to do this afternoon. [Laughter.] It may be impossible for me. I want to say quite a lot about this new clause.
New clause 71 is about reforming of the suspicious activity reports regime. Ministers will accept that the SARs regime is a central tool in our defence against money laundering, but I hope they also accept that the current system is broken—it is not working. The new clause would introduce a new risk rating system, which would transform the efficacy and efficiency of the current regime.
SARs are very valuable and a vital source of intelligence. They are made mainly by financial institutions, but also by solicitors, accountants or estate agents, and they report suspicious activity. They have been absolutely instrumental in a range of successful actions against criminal activities, locating sex offenders, tracing murder suspects and identifying those involved in online child abuse, and they have shown how young women are trafficked into the UK. They have also been instrumental in closing down fraud and money laundering.
To give one example of a successful case involving fraud, a vulnerable elderly man in his 80s was the victim of a fraudster who had gained his personal details through a cloned website, when the elderly man believed that he was making a genuine investment. The reporter who saw the transaction going through was suspicious when the fraudster tried to impersonate the victim and access his main funds. He reported the transaction, and the UK Financial Intelligence Unit, which operates the SARs regime, received that report. The unit immediately passed it on to the enforcement agency—I wish this happened every time—which visited the victim in his house. The agency was then able to quickly contact the institution where the transaction was supposed to take place. It reported that the suspicious activity was wrong and confirmed the real identity and bank details of the elderly man, which all prevented him from losing in excess of £80,000.
This scheme is therefore important, and it is successful when it works well. However, at present, the sheer volume of SARs and the limited resources available mean that the information is not analysed and often simply not used. In evidence to the Treasury Committee, Mark Steward, the director of enforcement at the Financial Conduct Authority, said:
“More needs to be done in order to get more out of the valuable data that is in there. Otherwise, it just sits there.”
Graeme Biggar, also giving evidence to the Treasury Committee, as director general of the National Economic Crime Centre, said:
“Twenty years ago, we got 20,000 suspicious activity reports in, largely from banks. This year, we would not be surprised if we got three quarters of a million, and the number of defence against money laundering SARs, where we are told in advance and given the option to refuse permission to proceed, is going to double, we think, this year. The sheer volume coming through is really significant and very hard to deal with.”
According to research from Spotlight on Corruption, only 118 people handle the SARs. That is one employee to 4,250 SARs. The Australians, who have a similar enforcement regime, and who have also experienced an explosion in SARs, have a staff complement of one to 1,400—three times better than our own. The Committee has often talked about the relative budgets for enforcement of the UK and the USA. The USA has increased funding of the Financial Crimes Enforcement Network by 30%, and its staffing by 50%. The Minister should recognise that the Federal Bureau of Investigation’s budget is now 15 times larger than the National Crime Agency, although our population is only five times smaller than America’s.
The Financial Action Task Force review in 2018 said SARs should be reformed, and SARs were criticised by the FATF. The Treasury Committee report in 2019 talked about SARs reform. In 2017, the Government had announced a reform programme for SARs, led by the Home Office together with the NCA. That reform programme constituted action 30 in the economic crime plan. The intent was to have an IT transformation, better analytical resources and capabilities, and an improvement in SARs processes. That SARs programme was reviewed by the Government’s Infrastructure and Projects Authority, and was given an amber rating in 2021. So reform started in 2017, the programme was given an amber rating in 2021, and today, in 2022, it is not complete and there is no timetable from the Home Office—maybe the Minister can help with that—or a target date for completion, which was a criticism the Treasury Committee made of the programme. Delivery was originally promised by December 2020, but we are two years on from that and we are a long way from seeing SARs completed.
In that context, new clause 71 introduces a risk-rating regime. I do not think anybody thinks that is a crazy idea, and I hope the Minister will—just for once—adopt one of the suggestions that the Opposition have made in Committee. I hope he will not say that we do not need the legislation. We are nearly six years on from when the reform programme was announced, and reform has not happened. The Government cannot, despite the best efforts of right hon. Member for Uxbridge and South Ruislip (Boris Johnson), ignore legislation, although they seem to be ignoring the desire to reform the SARs programme.
If Ministers want action, which they have consistently said they seek with the Bill, they should accept new clause 71. If they simply see this measure as party political, they should not. We do not deal with the funding issue in the new clause, but we will ensure that the focus is on the most significant SARs. That will lead to more enforcement. I urge the Minister to adopt our new clause.
Seema Malhotra
It is a pleasure to speak briefly in support of the new clause tabled by my right hon. Friend the Member for Barking. It would amend the Proceeds of Crime Act 2002 such that any disclosure made as part of the suspicious activity reporting regime must include a risk rating. My right hon. Friend outlined very effectively the reasons why the new clause is important. Much of the evidence in our meetings at the outset of the Bill, which set out the context and stakeholder views, it was clear that the SARs regime was failing. The databases of referrals were going unreviewed and unlooked at, because the resources were not there. There was no effective means that we could see of prioritising SARs fed into the NCA.
SARs is an essential tool in our defence against money laundering, but if the system is not working, something needs to happen. Having an extra step in the process to help with prioritisation, look at risks and deal with those identified as higher risk would help, as my right hon. Friend outlined, to bring in quality, at a time when we know that quantity is the new battle. She said that the current estimate is three quarters of a million referrals, which is extraordinary. Given the scale and types of economic crime, the number of referrals is likely to get worse, not better. That is a good thing if we are starting to highlight and refer more cases as we start to clean up our systems. However, we then need to deliver on that; otherwise, the downside is that we will reduce confidence among those doing the referrals that anything will actually happen.
Nigel Kirby of Lloyds Bank said in his evidence to the Committee:
“I think the SARs regime and the Proceeds of Crime Act 2002 itself actually need—well, not necessarily to be turned upside down, but to be looked at as a whole.”––[Official Report, Economic Crime and Corporate Transparency Public Bill Committee, 25 October 2022; c. 19, Q26.]
I think we have some agreement that the system itself is important, essential and necessary but that it needs wholesale reform to make it more efficient and effective and to ensure that it does what we ask of it.
The Minister for Security (Tom Tugendhat)
I thank the right hon. Member for Barking for the new clause. I will slightly gloss over one element and focus on something she mentioned several times—I always listen carefully to what she says—about the comparison between the FBI and the NCA. I take the comparison, but the NCA is not a direct comparator for the FBI. After all, the FBI includes the equivalent to MI5. It also includes counter-terrorism police and a lot of what we call regional organised crime units. It includes a lot of other areas of policing that simply do not come under the NCA’s budget, so the comparison of budgets is not apples and oranges; it is more like apples and cider—the bulk of one and the punch of the other are not quite the same. I hope the right hon. Lady will forgive me for saying that that is not entirely a fair comparison.
That said, the NCA does an enormous amount of good work and uses SARs in many different ways. I have the figure here: the UKFIU received and processed nearly 600,000 SARs in 2019-20. That has increased significantly every year. The action taken has resulted in about £192 million being denied to criminals in 2019-20, up 46% on the previous year. So this is something that we are already using heavily.
Dame Margaret Hodge
We all think that SARs is a helpful regime. I wonder whether the Minister has been given the information by the NCA. It got more than half a million SARs, but how much of that data did it use to get the millions that it got in? That is a heck of a lot of data, which should yield a huge amount of valuable information.
Tom Tugendhat
First, not every SAR leads to an actionable offence. Many of them are simply, and quite rightly, reports. They are reports because there are suspicions, but suspicion does not necessarily mean guilt. Many times these are companies that are taking on clients or that have clients who are suspicious, and they want to be sure they are doing the right thing so, responsibly, they report in. We should not confuse the absolute number of reports with a level of criminality. That would not be fair on the British population, those doing the reporting or the NCA, which is looking into these things.
Alison Thewliss (Glasgow Central) (SNP)
I did not mean to stop the Minister in mid-flow. He says that the number does not necessarily correlate to criminality. Is he concerned to hear that trust and company service providers have provided only 31 SARs, according to Graeme Biggar when he gave evidence to the Treasury Committee? A total of 31 seems impossibly low for the number of trust and company service providers, compared with what comes in from others.
Tom Tugendhat
The hon. Lady makes a fair point, but as she knows well that is not the point of the new clause, which is about the supervision of SARs and the ways in which they are checked and verified. That said, I have listened carefully to her and will have a look at that, because I do appreciate the point she makes. That said, I think these codes already enable the NCA to triage effectively, although if she has better ideas I am happy to listen and look at them further. However, I am to be convinced, because I think the Bill already addresses the areas she indicates. I get the point she is trying to make, but I am not sure that her suggestions would lead to a significant improvement on what is already there.
Dame Margaret Hodge
I am trying to untangle what the Minister said. If he is open to further discussions, I do not think that there is a rating regime. All we are saying is that there should be a rating regime so that the most urgent cases come at the top. My understanding is that that does not exist. There may be some form of triaging that I am not aware of. We just want to introduce a rating regime. If he is willing to engage in discussions before Report, I am happy not to put the matter to the vote. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 72
Office for Professional Body Anti-Money Laundering Supervision: powers and duties
“(1) The Secretary of State must by regulations set out a further power and duty for the Office for Professional Body Anti-Money Laundering Supervision.
(2) The power referred to in subsection (1) is the power to impose unlimited financial penalties on Professional Body Supervisors that fail to—
(a) adopt an effective risk-based approach to anti-money laundering supervision;
(b) impose proportionate and dissuasive sanctions for non- compliance with anti-money laundering requirements; and
(c) fail to separate their advocacy and regulatory functions.
(3) The duty referred to in subsection (1) is the duty to publish the details of any sanctions imposed on Professional Body Supervisors, and its reviews of Professional Body Supervisors with data disaggregated by body rather than by sector.”—(Dame Margaret Hodge.)
Brought up, and read the First time.
Question put, That the clause be read a Second time.
The Chair
With this it will be convenient to discuss new clause 74—Failure to prevent fraud, false accounting or money laundering: director liability—
“(1) If an offence under section [Offence of failure to prevent fraud, false accounting or money laundering] is committed by a body corporate and it is proved that the offence—
(a) has been committed with the consent or connivance of an officer of the body corporate, or
(b) is attributable to any neglect on the part of an officer of the body corporate, the officer (as well as the body corporate) commits the offence.
(2) For the purposes of this section, ‘officer’ means—
(a) a director, manager, associate, secretary or other similar officer, or
(b) a person purporting to act in any such capacity.”
Dame Margaret Hodge
I will speak for a little longer on new clause 73, but hopefully we will get through the others more quickly. It is probably one of the most important new clauses that we have tabled. It sits with new clause 79, which we will come to a little later. If we can make progress on this issue, we will be putting some better meat on the bones of what is still quite timid legislation.
We all want to do all we can to prevent economic crime from occurring in the first place. Prevention and early intervention is obviously the best, cheapest and most effective way of tackling the problem of dirty money. We want to stop it happening in the first place. We also all know that much economic crime takes place because lawyers, company service providers, accountants, bankers or estate agents either enable or collude with bad actors, helping them or turning a blind eye to the things that they do, thus enabling money to be laundered, crime to be committed, and our systems to be used to commit financial crimes.
There is currently too little in our laws and regulations that will stop the enablers—accountants and all the others—supporting and enabling economic crime. Companies and individuals are not held to account for what they do. The new clause aims to put a halt to that. We need to reform our outdated corporate liability laws so that not only companies but senior managers can be prosecuted if they fail to prevent fraud, false accounting and money laundering. It is not because we want to have endless prosecutions, or to fill prisons with these enablers, but because the threat of criminal prosecution will act as the best and most vital deterrent in preventing professionals from helping criminals to launder and manage their dirty money.
As we have said time and again in Committee, most professionals act with integrity. Those professionals with integrity have absolutely nothing to fear from the new clause. Indeed, the majority, who act responsibly, should welcome the change, because it will help us to clean up their profession, get rid of the bad apples and restore our reputation as a trusted jurisdiction. The Minister knows very well—I am trying to find the right Minister—
Dame Margaret Hodge
Both Ministers know that reform has been promised, and delayed, for a long time. The 2015 Conservative manifesto committed to making it illegal for companies to fail to put in place measures to prevent economic crime. The 2017 Ministry of Justice consultation on corporate liability reform sat for three and a half years. Inexplicably, it found that there was not enough evidence to pursue reform. I can only imagine that the Ministry was strongly lobbied. It said there was not enough evidence despite the fact that 76%, or three out of four respondents, said that the identification doctrine, which we will come to, inhibits the holding of companies to account for economic crime, and that two out of three respondents thought that corporate liability reform would result in improved corporate conduct. Despite all that, the Ministry chose not to pursue reform.
We then got the Law Commission’s review in 2022. It found that the current situation was “highly unsatisfactory” and that, on the status quo on corporate liability, “the identification doctrine”—for fraud and money laundering, the way in which we determine whether the people involved represent the “directing mind and will” of the company and can therefore be held responsible—
“is an obstacle to holding large companies criminally responsible for offences committed in their interests by their employees.”
The commission said that the status quo is “unfair” and that if the law remains unchanged it
“will continue to enable large companies to be acquitted for conduct which would see small businesses convicted.”
It also stated that that
“could diminish confidence in the criminal law”
and, finally, that the status quo incentivises poor corporate governance and
“rewards companies whose boards do not pay close attention.”
Given all that, I cannot think of a stronger indictment of the status quo.
There are endless examples of where our failure to modernise our criminal liability law has led to failure in the courts. The Barclays bank action is probably the most infamous, or famous, of them all. In 2008, during the financial crisis, Barclays wanted to avoid nationalisation and entered into a deal with Qatar, from which it received more than £11 billion and a loan of £3 billion. The bank, however, also set up what was called an advisory service agreement—in a sense, as I can say under parliamentary privilege, it was a bribe—and, under it, £322 million was given to those who facilitated the deal between Qatar and Barclays bank.
The Serious Fraud Office tried to prosecute the bank and its chief operating officer with charges of conspiracy to commit fraud and charges involving “disguised commissions”—in my interpretation, bribes. The court threw out all the charges, saying that the alleged criminal dishonesty of senior officers “could not be attributed” to Barclays. So the chief executive could not be held responsible for what the bank did, because the chief executive was not the bank, but reported to the bank. It was a crazy judgment. The court also dismissed cases against other individuals, as they could not be defined as the “directing mind and will” of Barclays.
There was, then, a Barclays fiasco, but there were other examples, such as the LIBOR rate-rigging scandal. No criminal prosecutions were brought, although the individuals prosecuted gave evidence that their managers knew what they were doing, so the company itself was liable. If the Minister for Security will allow this comparison, the US brought criminal enforcement action against 12 of the banks in the LIBOR scandal—British banks—and extracted $3.4 billion in criminal fines. Other examples include HBOS—to which the Under-Secretary often refers—Serco and the tagging contract, London Capital & Finance, and so on and so forth.
In 2022, four parliamentary Committees called for the reform of corporate criminal liability legislation. In February 2022, the Treasury Committee urged the Government to
“act quickly in bringing forward any legislation flowing from the Law Commission’s review. In the meantime, corporate criminals will continue to be able to escape prosecution for economic crimes.”
I probably do not have to quote this one, as the Minister might remember it, but the Foreign Affairs Committee called for
“reform of outdated and ineffective corporate criminal liability laws which mean that it is difficult to hold large companies to account for economic crimes.”
Dame Margaret Hodge
Anyway, I thought it was a speech in favour of the intent of this new clause.
Failure to prevent offences have proved effective elsewhere, as the Minister himself has said. We use them to tackle bribery and tax evasion, and the Minister always raises the best example when he refers to what used to go on in the construction industry. In my youth, people would regularly have terrible accidents on construction sites, some of which were fatal. It was only when a duty was introduced for those who ran construction companies to ensure the health and safety of their workers in the workplace, meaning it would be a criminal offence if they failed to do so, that miraculously, overnight, deaths on building sites came almost to a 100% halt. We have lots of examples of where a failure to prevent does not end up with people being locked up but does change behaviour. That is what we are trying to do.
I have lots of examples of areas where the Bribery Act 2010 has been successful and this is not one. This is the last legislative opportunity we will have in this Parliament to put into effect something that Members across the House think is important. There is so much evidence from so many bodies emphasising the importance of this bit of legislation. I cannot see any argument for delay. Before they reached their great, really important roles on the Front Bench, both Ministers argued passionately, frequently and loudly for this reform. I hope they will accept the new clauses, together with new clause 79, on the identification principle. With the inclusion of those three new clauses, we can hold our heads up high and say that we have done good work in Parliament.
Stephen Kinnock (Aberavon) (Lab)
It is a pleasure to serve under your chairship, Mr Robertson. I pay tribute to my right hon. Friend the Member for Barking. The passion and eloquence with which she spoke was exemplary in terms of reminding us about what is at the heart of the Bill and one of the top priorities that we want to achieve. I do not want to say much more; how can I follow that?
New clause 73 would introduce a new offence of failing to prevent fraud, false accounting or money laundering, and new clause 74 would extend that offence, so I shall take them together. In effect, the new clauses would extend current failure to prevent offences beyond bribery and tax evasion to other economic crimes, money laundering and fraud. The offences would be applicable both to companies themselves and to senior managers or directors.
The Labour Front Bench team welcomes the new clauses tabled by my right hon. Friend the Member for Barking as vital to help to drive cultural change and corporate governance standards for the prevention of economic crime in the UK. They would also standardise criminal rules for holding companies to account across different economic crimes.
The call for this change is supported by a number of stakeholders, including Spotlight on Corruption, which made the following argument in written evidence to the Committee:
“Most urgently, a new failure to prevent fraud offence would help address the UK’s serious fraud epidemic. Fraud accounts for 40% of all recorded crime, but fraud prosecutions have fallen from 42,000 in 2011, to 13,500 in 2021 in the last decade, a 67% decrease. According to the Crown Prosecution Service (CPS): ‘an extension of the “failure to prevent” model to fraud, false accounting and money laundering would be unlikely to require companies to do more than what they would already be expected to do under the current law (which relies on the identification doctrine) but it would enable prosecutors to hold them to account more effectively where they fail to do so’. The heads of the Serious Fraud Office (SFO) and the CPS have both recently called for new failure to prevent offences.”
I refer the Minister, in addition to the stakeholders that support the call for change, to his own words on Second Reading. I will not replay his greatest hits—that my right hon. Friend the Member for Barking has already done so—but he has stated clearly that he sees this offence as “the No. 1 measure” that we need. The Opposition fervently hope that both Ministers will agree with their former selves that this is the No. 1 measure we need in the prevention and detection of economic crime. We urge the Conservative Front-Bench team to accept the new clause as a necessary and urgent provision to tackle economic crime that would have support across the board.
Alison Thewliss
I, too, rise to support the new clauses, which are incredibly important.
“Of all the measures we have talked about today, this would have the biggest effect in terms of cutting down on economic crime, because lots of our financial organisations are complicit when it suits their interests to be so.”—[Official Report, 13 October 2022; Vol. 720, c. 309.]
If the Under-Secretary recognises those words, it is because they are his own from just a few weeks ago, on 13 October 2022. What a long time it has been; here we are today at the end of November.
It is important that we use the new clauses as an opportunity. As the right hon. Member for Barking said, this is an opportunity to make this change now and get it right. It cannot be said that the Ministers present do not agree with the measures. The Under-Secretary argued for a failure to prevent economic crime offence not just on 13 October 2022 but on 7 July 2022 and 1, 22 and 28 February 2022, on 2 December 2021, on 9 November 2021, on 22 September 2021, on 18 May 2021, on 9 November 2020, on 25 February 2020, on 19 July 2019, on 23 April 2019, on 18 December 2018 and on 9 October 2018. Why have we got to the point today where he is arguing against something that he has argued for so consistently and repeatedly in this House?
Alison Thewliss
I will if the Minister can give me an explanation as to why he is not going to back the new clause.
Alison Thewliss
I suspect that if it goes to a vote, he will vote against the new clause, so he does not even need to argue against it. If it goes to a vote, he and his colleagues will vote against something that he has consistently and repeatedly supported in this House. He knows in his heart of hearts that this is the right thing to do. I am very interested to know whether, if the Government will not support the new clause—whether it goes to a vote or not—they will introduce something similar on Report. Both Ministers know that this is the right thing to do. The opportunity is here in the Bill. If the opportunity is there and the will is not, that leaves huge questions for the credibility of the entire Bill.
Tom Tugendhat
I am delighted to speak on the new clause. As the right hon. Member for Barking correctly identifies, it touches on many areas that my hon. Friend the Under-Secretary and I have spoken about on numerous occasions, and we are not alone in having done so. Section 172(1)(b) and (d) of the Companies Act 2006 speaks about the interests of employees and of the community being the responsibility of directors as well, so having an emphasis on directors’ responsibility in corporate legislation is not new. My hon. Friend the Under-Secretary has also spoken about it in building safety legislation, which the right hon. Lady cited.
There are many different examples of our recognition that the interests of the whole of society and of the whole United Kingdom are better protected when directors understand that they are there not simply to advance shareholder value, but to further the interests of the whole community of their employees and wider society in actions and responsibilities they undertake. Although I see all of the responsibility laid out and I take very seriously the point the right hon. Lady made, we still need to do a little bit of work on how this can be made to work. There are arguments, some of which hold water, about whether the 2017 money laundering regulations include elements that already cover some of these areas, and there are arguments about whether the Law Commission will want to look at different bits of this. I can assure the right hon. Lady that I will look at this extremely seriously, because she is absolutely right that the Bill offers an opportunity to introduce different reforms. I will look to make sure that any opportunity is fulfilled as quickly as possible.
Dame Margaret Hodge
I am grateful for that. The hon. Gentleman referred to the Companies Act 2006—I cannot remember which section. In the days when Tony Blair changed our jobs every year, I was lumbered with taking through the biggest Act in Parliament. We deliberately put that section in, in the face of massive opposition. At the time there was a front page story in the FT that said, “How dare you talk about any interest but shareholder interest?” But the provision has stood the test of time, I am pleased to say, and I am glad to hear him cite it.
I do not want to embarrass Ministers today by putting the issue to a vote. I know that they feel strongly about this, but so do we—really strongly. The Bill will not pass any litmus test of its potency if the new clause is not included. I know there will be resistance because the professions that would be subject to the new potential criminal liability are very strong in lobbying. They are probably strongly lobbying the Department for Business, Energy and Industrial Strategy, as well as the Treasury and other Government Departments. I say to Ministers that they have to resist that lobbying with every bone in their bodies, because this is not an attack on any profession. There ought to be a new offence that cleans up the profession, and we will pursue this issue right through every phase and stage of the Bill’s passage.
I want to say one final thing to the Minister. Of course we need to make the new clause work, but for goodness’ sake, we have the same offence in the Bribery Act and the tax evasion legislation, and it works perfectly well.
Kevin Hollinrake
The right hon. Lady makes a very important point about vested interests. We have previously discussed the influence of people who may not be keen on these kinds of clauses. I would say to anybody in the financial services sector who is making these claims that there are potentially huge benefits from preventing fraud across the board, because 70% of online fraud, which costs banks a lot of money, comes from platforms, and this kind of legislation could make the platforms responsible for removing content. So the sector could see benefits as well as potential new obligations.
Dame Margaret Hodge
I am grateful to the Minister for reinforcing my argument. I would add simply that the same is true of the online harms Bill. If we had director liability there, I think we would see a lot of the online harms disappearing, but that is for next week.
On how the new clause would work, we can mirror processes that take place in other bits of legislation. To say that it is already covered is a nonsense, because we would not have had the failure of the Barclays case and all the other cases that I cited to the Minister had we already put in place legislation that was appropriate for ensuring that companies and their directors are held to account. I will not put the matter to a vote, but this is a hugely important issue. I look forward to our debating it further at other stages during the course of the Bill. I wish Ministers well in their attempts to get it past the Government, but if they do not, Parliament will do so. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 75
The Economic Crime Committee of Parliament
“(1) The Secretary of State must by regulations establish a body to be known as the Economic Crime Committee of Parliament (in this section referred to as “the ECC”).
(2) The ECC will consist of nine members who are to be drawn both from the members of the House of Commons and from the members of the House of Lords.
(3) Each member of the ECC is to be appointed by the House of Parliament from which the member is to be drawn.
(4) The ECC will have the power to meet confidentially.
(5) The ECC may examine or otherwise oversee any regulatory, enforcement or supervision agencies involved in work related, but not limited to—
(a) tax avoidance and evasion by corporations;
(b) illicit finance;
(c) anti-money laundering supervision;
(d) tackling fraud;
(e) kleptocracy and corruption; and
(f) whistleblower protection.”—(Dame Margaret Hodge.)
Brought up, and read the First time.
Dame Margaret Hodge
I beg to move, That the clause be read a Second time.
I have been promoting accountability for years now. In the work that I did with the Minister as we thought about how we could tackle economic crime and turn round the tanker, we always said there were four ways in which we had to respond. One was through having not more regulation, but smart regulation. The second was through tough enforcement. The third was through broad transparency—the ruling of the European Court of Justice last week is an absolute nightmare that could create real difficulties for us in the economic crime space. The fourth was accountability, and with the new clause we are suggesting a way for us to have that accountability.
There is interest in this subject across the House. The hon. Member for Hitchin and Harpenden (Bim Afolami) has written a paper on these issues. Can we find a mechanism for holding the regulatory bodies properly accountable to Parliament for what they do?
A lot of these questions arose when I chaired the Public Accounts Committee and we first started looking at tax avoidance. The rule is that everybody should be equal before the law in tax, but there was always a suspicion that sweetheart deals were being struck with certain big corporations and high net worth individuals. In fact, early on we came across one involving Goldman Sachs; on the back of a story in Private Eye, we uncovered a sweetheart deal. To this day, though, I do not understand whether Google is paying the correct tax or whether there is a deal there, and I could say the same about a lot of the big multinational companies. Because of the confidentiality of taxpayers’ interests, Parliament has no way to get the information that it needs to assure itself that the tax authorities are treating all taxpayers equally.
I have worked with all the agencies in this area—the NCA, the Serious Fraud Office, the Metropolitan police and so on—so whistleblowers, or just people who come across something that is wrong, often come to me, and I give the case to one of the agencies—and that is the last I ever hear of it. I always pursue the cases, but all too often I get the response, “Oh, there are security reasons for you not being given the information.” There was the Savaro case, which I referred to BEIS at the time. It went through BEIS and I still do not know whether anybody was pursued. Certainly, there were people behind that explosion in Lebanon, which led to so many deaths and loss of property.
I think that Parliament needs a better hold on what is happening and better accountability around how those agencies are operating. In the new clause, we suggest that we mirror the Intelligence and Security Committee, which meets under Privy Council terms. The proposed economic crime committee could be a Committee of both Houses, meeting under Privy Council terms and overseeing all the regulatory bodies in this space—in financial services and economic crime. It could call for papers relating to individual cases, which would remain confidential because the ECC would meet in private. The ECC could then produce reports on systemic changes that are necessary, arising from consideration of those individual cases.
I think that that would massively improve accountability, as well as the performance and effectiveness of the agencies. With that information, members of the ECC would have a better understanding of what, if anything, they needed to do as legislators to improve the situation. I believe that this committee will happen one day, but I am proposing it today as a new clause in this Bill. I know that the hon. Member for Hitchin and Harpenden and those who support him in this mission would be happy to support me today, and I hope that Ministers give it a good hearing.
Stephen Kinnock
I am happy to support new clause 75, tabled by my right hon. Friend the Member for Barking, which would require the Secretary of State by regulation to establish a body to be known as the economic crime committee of Parliament.
The new clause is driven by and based on the fundamental principles of transparency and accountability. Our call for those two principles to be adhered to is important because it recognises that the structures for reviewing progress, and scrutinising and reviewing economic crime, are simply not good enough. There is too much siloed thinking. This aspect of scrutiny does not sit neatly within BEIS, the Treasury, the Home Office, or the Ministries of Defence and of Justice; it really spans the waterfront, yet those Departments are all vital parts of what should be a systemic approach to tackling economic crime.
The proposed committee would consist of nine Members drawn from the House of Commons and the House of Lords, with each member of the ECC appointed by their respective House of Parliament. The ECC would have the power to meet confidentially; it could examine or otherwise oversee any regulatory enforcement or supervision agencies involved in work related to, but not limited to, tax avoidance and evasion by corporations, illicit finance, money laundering, fraud, kleptocracy, corruption, and whistleblower protection.
We welcome the new clause as it would introduce a vital mechanism for transparency and accountability within the Bill. If the Minister does not agree with it, we hope that he will acknowledge that the existing mechanisms are unfit for the kind of joined-up, systemic, expert-driven scrutiny that is needed to keep pace with and keep ahead of economic crime. Throughout this Committee’s proceedings, my colleagues and I have tabled amendments and new clauses designed to increase the scrutiny and transparency of the measures that the Bill will introduce, so as to ensure that when they are implemented, they are as effective as possible. If the Minister is not able to support the new clause, Parliament and the country more broadly would need him to come up with something better.
Alison Thewliss
I wholeheartedly agree with the new clause. When the Treasury Committee looked at this issue, what struck me was that economic crime was nobody’s priority. Our report said:
“Economic crime seems not to be a priority for law enforcement. The number of agencies responsible for fighting economic crime and fraud is bewildering.”
If it is bewildering in that sense, it is bewildering to Parliament, too. This is a BEIS and Home Office Bill, yet it has huge Treasury implications and huge security implications, and that gets to the heart of why this new clause is so important. There needs to be a body in Parliament that holds all these agencies to account in one place. If BEIS does a little bit, and the Home Office does a little bit, and security does a little bit, and the Treasury does a little bit, there will not be the cohesive scrutiny of all those agencies that is needed. Committees could well be palmed off with different responses by different agencies, with nobody consistently holding them to account.
The work of the Treasury Committee is very wide ranging. We have two meetings a week, and that is not enough to cover all the issues we need to cover. Setting up a bespoke Committee that could build up expertise on this issue would allow for that accountability. It could meet in private if it needed to, although it would ideally meet in public. The point is that it would keep an eye on all the things that we have agreed to in the Bill, and we would be holding all these agencies and Ministers to account in a consistent way. The reports of the ECC would also, we hope, be taken seriously, and its recommendations implemented.
It is not really enough that the Treasury Committee or another Committee looks at economic crime every once in a while and sees how things are going. The Treasury Committee has done that previously, looking back at previous reports and asking, “How are things going now?” but there is not that week in, week out consistent scrutiny of what is happening. Without scrutiny and consistency, it is difficult to see how the Government will get this right. We are legislating here, but legislation cannot be put on a shelf and left; it has to be living legislation that is scrutinised on a regular basis. A committee of sort proposed in the new clause really would give Parliament a lot of power to ensure that these measures are implemented correctly and that the agencies responsible for economic crime, which affects all of our constituents, continue to be held to account.
Tom Tugendhat
The right hon. Member for Barking will not be surprised to hear that I am a huge fan of parliamentary scrutiny, not just of Government but of various issues that others have sometimes felt are not in the immediate remit of the scrutinising Committee. As she will be aware, I received some criticism when the Foreign Affairs Committee, which I was fortunate to chair, focused so clearly on economic crime in 2017-18—in fact, it was some of the first work that we did—because of the national security threat that it poses to the United Kingdom. Its importance in foreign policy is very clear.
The Treasury Committee has done an awful lot of extremely good work on this issue; over the years, it has done some excellent reports on economic crime. The Public Accounts Committee, the Justice Committee and others have also focused on economic crime at various points. However, while I completely understand the right hon. Lady’s argument, I cannot support the new clause, because it is simply not up to a Secretary of State to set up a Committee of the House. As she knows very well, that is a decision for the House; it would therefore not be appropriate to have that provision in the Bill.
I would add that there are various other elements that already scrutinise quite a lot of the agencies referred to. There is the Economic Crime Strategic Board, co-chaired by the Chancellor and the Home Secretary—I know it is within Government, but it is still a challenging body because it supervises the agencies of Government. Various other levels of scrutiny appear at different points, which help to oversee the function of the agencies and different elements that the Government are trying to deliver—that the ministerial element of the Government is trying to get the bureaucratic element of the Government to deliver. It is really important that we keep those intentions.
Dame Margaret Hodge
I am sure that, in that spirit, the Minister also accepts that scrutiny by the Executive is different to scrutiny by the legislature.
Dame Margaret Hodge
What we are seeking is scrutiny by the legislature. I take what he said, and will reflect on it. There is cross-party support for this concept; whether we have got it quite right is open to debate, and we will have to find another means of getting it debated in the House. On that basis, I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 76
Whistleblowing: economic crime
“(1) Whistleblowing is defined for the purposes of this section as any disclosure of information suggesting that, in the reasonable opinion of the whistleblower, an economic crime—
(a) has occurred,
(b) is occurring, or
(c) is likely to occur.
(2) The Secretary of State must, within twelve months of the date of Royal Assent to this Act, set up an office to receive reports of whistleblowing as defined in subsection (1) to be known as the Office for Whistleblowers.
(3) The Office for Whistleblowers must—
(a) protect whistleblowers from detriment resulting from their whistleblowing,
(b) ensure that disclosures by whistleblowers are investigated, and
(c) escalate information and evidence of wrongdoing outside of its remit to another appropriate authority.
(4) The objectives of the Office for Whistleblowers are—
(a) to encourage and support whistleblowers to make whistleblowing reports,
(b) to provide an independent, confidential and safe environment for making and receiving whistleblowing information,
(c) to provide information and advice on whistleblowing, and
(d) to act on evidence of detriment to the whistleblower in line with guidance set out by the Secretary of State in regulations.
(5) The Office for Whistleblowers must report annually to Parliament on the exercise of its duties, objectives and functions.” —(Dame Margaret Hodge.)
Brought up, and read the First time.
Dame Margaret Hodge
I beg to move, That the clause be read a Second time.
This new clause relates to another issue on which there is cross-party support: reform of whistleblowing. It has been put together for me, although it is in my name, by the hon. Member for Cheadle (Mary Robinson), who leads the all-party parliamentary group for whistleblowing. I must put it on the record that she has been a fantastic campaigner in this area and an outspoken champion for the countless courageous individuals who have dared to speak out. As she rightly says, for most of those individuals whistleblowing has shattered their lives, with many losing their health and livelihood. What we are talking about here is really important.
Our new clause would introduce an office for whistleblowers, which would protect the whistleblowers and ensure that their disclosures are investigated and information provided is passed to the relevant authorities. In clause 4, we set out ways in which whistleblowers would provide that service. I think that the hon. Member for Thirsk and Malton is the Minister replying to this debate; I know that he is passionate about this topic, because he has said so on lots of occasions—most recently on Second Reading on 13 October, when he said:
“We do not protect or compensate whistleblowers, and that is wrong. Those people do the right thing and come forward but—not to put too fine a point on it —we hang them out to dry.”—[Official Report, 13 October 2022; Vol. 720, c. 309.]
He went on to say:
“It is pointless having lots of law enforcement people charging around not knowing where to look. Whistleblowers tell us where to look. Some 43% of all financial crimes are identified through whistleblowers, yet it is something we do not talk about. We do not just need more regulators; we need somebody to point us in the right direction. Regulators will always be watchdogs, never bloodhounds. We need the bloodhounds in the organisations who are willing to speak up if things are going wrong.”—[Official Report, 7 March 2022; Vol. 710, c. 121.]
Hear, hear to that, but let us have some action arising out of those passionate words.
Whistleblowing plays an absolutely key role in addressing economic crime, whether it is for money laundering or other crimes. Think of the Panama papers 2016—we would never have had them—or the Paradise papers, the Russian and Troika laundromats, the Azerbaijan laundromat, the FinCEN files and the Pandora papers. Let us look at just one of those—the Panama papers—which were 11.5 million legal documents held by the Panamanian law firm Mossack Fonseca. It basically made its money by creating offshore companies and bank accounts to launder and hide the money. The story was given to a German paper, then 370 journalists got involved in investigating the data, working in 80 countries.
Just think what came out of that. Twelve current and former world leaders were named in those papers. There was a $2 billion trail to Putin through his close friend Sergei Roldugin, known as Putin’s wallet. The money went all over the world, including into an upmarket ski resort in Leningrad owned by a company funded by this dirty money and where Putin gave his daughter a sumptuous wedding. The Icelandic Prime Minister resigned off the back of the papers. The Pakistani Prime Minister was removed from office due to allegations of corruption and fraud.
Through the leak, some £1.2 billion of tax revenue was restored to 23 national Governments. In the UK, there was an extraordinary list of the rich and powerful, from Kevin Keegan to Nick Faldo, Lewis Hamilton, Tiger Woods, Gary Lineker, Madonna, Keira Knightley, Simon Cowell, Nicole Kidman, the Barclay brothers, Stuart Gulliver of HBSC, and political figures like Arron Banks, Michael Ashcroft and the right hon. Member for North East Somerset (Mr Rees-Mogg). They were all named and exposed.
Going back to my Public Accounts Committee days, the work we did all came from whistleblowers in the area of economic crime. I referred earlier to the Goldman Sachs sweetheart deal. That emerged from a whistleblower—a lawyer working in His Majesty’s Revenue and Customs. We had a very frustrating session. We knew something was going on, and we interviewed the head of tax at HMRC, but he would tell us absolutely nothing. I then got a bundle of papers from a lawyer who was working there, and in that bundle was a sheet of paper that had on it two things. It said that a meeting was held by the head of law, and he had said that the head of tax had shaken hands on the deal, which the head of tax had denied at the Treasury Committee. He also said that the deal was unconscionable.
We called back the head of tax and head of law and interrogated them. They still said nothing. Then my hon. Friend the Member for Norwich South (Clive Lewis) said to me, “Put the guy on oath. He might tell you something.” That had never happened in a Select Committee. I turned to the clerk, who told me that I could put him on oath, and said, “Go and find a Bible.” It took them 20 minutes to find a Bible. But the point is that all that from a whistleblower led to the trail that I think has certainly ended up with me being on this Committee considering the Bill today.
What is so terrible about that story is that the then head of tax left public service, and I asked the person who became the permanent secretary in HMRC every time she appeared before the Committee, “Are you looking after that whistleblower? Is he okay?” She always gave me assurances that he was, but actually they raided his computer and telephone. His marriage broke up, and in the end life became so intolerable that he had to leave public office. It is one of the things I feel great shame about really—that I was not able even in that position to protect him, even though it was his revelations that enabled us to start discovering what was going on.
Whistleblowing helps everywhere. It is a vital way of revealing wrongdoing in all sorts of sectors. It was a child sex abuse whistleblower who helped reveal the child sexual exploitation in Rotherham. The NHS is full of workers who blew the whistle on things such as the lack of personal protective equipment. The Public Accounts Committee saw another example, relating to Serco, where a GP contract was done in Cornwall but they were lying about their performance. A whistleblower came to us, but Serco’s response was simply to rifle through everybody’s lockers to try to find out who the whistleblowers were. Serco was not interested at all in the fact that the information it provided was inaccurate, or in trying to improve the quality of the service.
Interestingly, whistleblowers in America are treated very differently, particularly on the issue of compensation. To give one example, in the JPMorgan case, there was a $45 million settlement after two whistleblower employees at a Georgia mortgage broker alleged that the bank had scammed a programme that was intended to make it easier for veterans to qualify for loans, and had submitted fraudulent claims to the Government. The whistleblowers were awarded $11 million. Facing the same charges, Wells Fargo later settled for $108 million. A whistleblower revealed massive robo-signing at the four banks that were the country’s largest mortgage providers. The companies had allegedly relied on a company called Docx to forge signatures on thousands of mortgage documents. The suit was settled for $95 million, and the whistleblowers received $18 million for helping to expose the fraud.
The Minister well knows the facts that I will give him now. In 2018, 40% of whistleblowers reported going on sick leave—that is the pressure in the workplace. Only 4% of whistleblowers who bring claims under the current legal structure succeed. Of the 1,041 whistleblower reports submitted to the FCA in 2021-22, only three have resulted in any significant action. The Minister must agree that enough is enough. We in this country cannot go on failing to treat whistleblowers with the respect, support and advice that they deserve. Our new clause starts the process of reform. It does not do everything—for example, it does not do financial compensation—but it is a start.
Finally, please do not just say, “We are looking at this.” Do not tell us you will come back. This is a once-in-a-lifetime opportunity.
Kevin Hollinrake
The right hon. Lady makes an interesting point about how compensation works in the USA. She will be aware that Protect, the most high-profile whistleblower organisation in the UK, is against a compensation scheme similar to that in the USA. There is good reason for that: very few whistleblowers in the USA actually get compensation, which is one of the flaws in the scheme. Does she agree that we must think carefully about how we introduce whistleblower reform? It needs to be well thought through, rather than simply rushed.
Dame Margaret Hodge
I agree that we have to think carefully, but setting up an office for whistleblowing, which is what our new clause would do, could be the start. We might get some proper expertise in there, so as to think through some of the more complex issues.
Minister, grasp the opportunity and agree with our proposal. It would set up a new office—a central place for any would-be whistleblower to come for advice. It would support regulation in organisations. It would be a central place for setting standards, monitoring, evaluating and reporting. It would ensure that those who inflict or suffer detriment will be properly held to account or properly compensated. An office for whistleblowers would drive up standards across both the private and public sectors, increase transparency and restore public confidence. Whistleblower discrimination is a global problem, and the new office would set a global standard here in the UK.
Stephen Kinnock
I will be brief because my right hon. Friend the Member for Barking has, again, made the case so eloquently. We support new clause 76. The basic fact is that by their very nature, money laundering and economic crime are very often linked to serious organised crime gangs and hostile states. We are dealing with some pretty frightening people. Without adequate protection, the stakes for an informed insider blowing the whistle are simply too high.
New clause 76 would take those vital first steps to provide more adequate protection for whistleblowers and enable the greater detection of fraud and economic crime by establishing a body specifically set up to both protect whistleblowers and investigate their reports. We feel strongly that the Government must bring forward steps to protect and enable whistleblowers. New clause 76 provides an excellent and strong platform to make that happen.
Alison Thewliss
We also support this important new clause. In a recent speech, the Minister said that 43% of all economic crime was identified by whistleblowers, which illustrates why the new clause belongs in the Bill. We all know from whistleblowers’ stories that doing the right thing comes often at a significant cost personally, professionally and financially. It is important that we do anything we can to support those whistleblowers and to make sure they feel comfortable to go ahead and do what they do to ensure that we are all protected. I look forward to hearing the Minister supporting the new clause, because he has supported it umpteen times in the past.
Kevin Hollinrake
I think this is the last occasion I have to address the Committee, so I thank all Members for their contributions. We have had very constructive debates throughout the days that we have looked at the Bill. I thank the officials for all their work in these areas.
Not for the first time, I am very sympathetic to the new clause and to the previous one on failure to prevent. Nothing I have seen or heard since I started as a Minister only a few weeks ago has changed my mind on the things I have said in the House and other places about the need for whistleblower reform and failure to prevent reform. There is no conspiracy behind the scenes here. There is a difference between arguing against the principle of something and arguing against the provisions of something. That is where we probably differ a little.
As the hon. Member for Glasgow Central said, I have said before that 43% is the stat for the discovery of financial crime. In my experience, it is much higher than that—about 100%. Everything I have dealt with has been brought to the attention of authorities through whistleblowers, not least Ian Foxley, my constituent who was very important to the case on GPT Special Project Management Ltd that the right hon. Member for Barking referenced. He was the bloodhound in that case. We need those bloodhounds.
Since taking over as Minister with whistleblowing in my portfolio, I have asked officials to prioritise this review and to get it moving properly, and that is what we have committed to do. There are differences in where we go with it: do we do something to address the cases like Ian Foxley’s and the others the right hon. Lady references? Sally Masterton addressed those cases. Do we do something longer term and more complex? It is either low-hanging fruit or something more radical.
My hon. Friend the Member for Cheadle has done fantastic work in this area. I am keen to engage with her and my hon. Friend the Member for Weston-super-Mare (John Penrose) to make as much progress as we can as quickly as we can. Ian Foxley’s case is interesting because he was prevented from getting compensation. He was very successful in getting that case highlighted and the authorities successfully prosecuted it, but he was denied compensation because the PIDA rules on what it describes as an employee did not cover his particular category. That is a relatively easy issue to fix and something I want to look at.
The other part of the current legislation is around prescribed persons. There are 80 prescribed persons at the moment: people to whom others can make a protected disclosure. We are extending that this week when I introduce a statutory instrument on extending the number of prescribed persons to whom whistleblowers can go to seek assistance. Indeed, some of those prescribed persons are in this room. Members of Parliament are prescribed persons, as are some Ministers, but so too are our agencies. That is probably my biggest concern.
I took the case of Sally Masterton, who was key to highlighting the HBOS Reading scandal, which I have referred to many times in Parliament, to the Financial Conduct Authority. When I asked Andrew Bailey, who was then the chief executive of the FCA, whether he had followed his own whistleblowing procedures in relation to Sally Masterton, who was terribly mistreated by Lloyds Banking Group, he refused to answer the question because I was not a relevant person, under the relevant legislation. That is quite astounding, when it was Parliament that legislated to introduce the whistleblowing protections in the first place.
There are things that we need to do quickly that would address many of the problems, but we have done much. We have improved the guidance on what a prescribed person needs to do. We have a requirement on people to make public annual reports on what they have done in terms of whistleblowers, but I am keen to hold regulators’ feet to the fire in this area. I ask the right hon. Member for Barking not to pre-empt the review that I am urgently undertaking, because she knows how serious I am. I would like to bring forward effective reform very quickly, and to effect change more quickly. I fear that the new clause would delay the reform, when we can make progress by other means.
Dame Margaret Hodge
I hear what the Minister says. I simply say to him that finding legislative time will be a battle, so I hope that he has some mechanism to get the reform through.
Kevin Hollinrake
There are things that we can do without primary legislation that could move much more quickly.
Dame Margaret Hodge
I hear that. This matter will be debated by others on Report. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 79
Identification doctrine
“(1) A body corporate commits an offence listed in Schedule 8 where the offence is committed with the consent, connivance or neglect of a senior manager or senior managers.
(2) An individual is a ‘senior manager’ of an entity if the individual—
(a) plays a significant role in—
(i) the making of decisions about how the entity’s relevant activities are to be managed or organised, or
(ii) the managing or organising of the entity’s relevant activities, or
(b) is the Chief Executive or Chief Financial Officer of the body corporate.
(3) A body corporate also commits an offence if, acting within the scope of their authority—
(a) one or more senior managers engage in conduct, whether by act or omission, such that, if it had been the conduct of only one representative, that representative would have been a party to the offence; and
(b) the senior manager who is responsible for the aspect of the organization’s activities that is relevant to the offence — or the senior managers collectively — fail to take all reasonable steps to prevent that offence being committed.”—(Dame Margaret Hodge.)
Brought up, and read the First time.
Dame Margaret Hodge
I beg to move, That the clause be read a Second time.
This goes with the failure to prevent, so I will not speak to the new clause. It literally just sorts out the legalese to ensure that we can get at companies and their directors.
Dame Margaret Hodge
Yes, because I want it on the record. I am just conscious that Members want to get on, and that the argument is the same.
Stephen Kinnock
We fully welcome the new clause, which we think is very important to ensure that all perpetrators of economic crime are caught and dealt with.
Tom Tugendhat
I merely point out that, while the new clause addresses many of the points that the right hon. Member for Barking has raised before, it also raises many of the same challenges. For that reason, I will object to it.
Dame Margaret Hodge
I will not at this point press the new clause to a vote, so I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 80
Forfeiture of recoverable property obtained through economic crime
“(1) Where the conditions in paragraph(2) are fulfilled, a notice may be served in accordance with subsection(4) by the Director of Public Prosecutions, the Director of Serious Fraud Office, or the Director General of the National Crime Agency (hereafter, ‘the Director’) upon the holder of an account held at a bank in the United Kingdom.
(2) The conditions mentioned in paragraph(1) are that—
(a) the Director has reasonable grounds to believe that property held in the bank account is recoverable property obtained as a result of an economic crime offence;
(b) in relation to the bank account or any property in the bank account, a consent request has been made to an authorized officer under Section 335 of the Proceeds of Crime Act;
(c) an authorized officer refused the consent requested;
(d) a court has granted an extension of a moratorium period for 186 days under section 336A of the Proceeds of Crime Act 2002; and
(e) a court has granted approval to the Director to serve the notice.
(3) A notice under this section shall be a notice by way of representation and shall—
(a) state the name of the holder of the bank account to whom it is addressed;
(b) specify the details of the bank account and of the property or part of the property in the bank account which in the opinion of the Director is recoverable property;
(c) state a date on which, and a place and time at which, the holder of the bank account is required to attend a hearing of the Court to show cause why the property so specified is not recoverable property and should not be forfeited; and
(d) be served on—
(i) the holder of the bank account, and
(ii) the bank at which the account in question is held,
and if an address for service on the holder of the bank account is not known, service on the bank only shall be taken as sufficient for the purposes of this paragraph.
(4) In this section and section [ Forfeiture of recoverable property obtained through economic crime: summary procedure ]—
(a) ‘economic crime offence’ means an offence listed in Schedule 8 of this Act; and
(b) ‘recoverable property’ has the meaning given in section 304 of the Proceeds of Crime Act 2002.”—(Dame Margaret Hodge.)
Brought up, and read the First time.
The Chair
With this it will be convenient to discuss new clause 81—Forfeiture of recoverable property obtained through economic crime: summary procedure—
‘(1) If the person on whom a notice under section [Forfeiture of recoverable property obtained through economic crime](3)(d)(i) served (the “respondent”) fails to attend the hearing as required by the notice, the Director may apply forthwith for a forfeiture order, and the Court may make such an order, without further notice to the respondent.
(2) If the respondent appears (whether in person or by a legal representative) at the hearing, the respondent may—
(a) at the hearing, satisfy the Court that the property is not recoverable property; or
(b) request that the question of whether or not the property is recoverable property be determined at such later date as the Court may order.
(3) If the respondent makes a request under subsection(2)(b), the respondent must provide an affidavit in answer to the notice within the period of 21days beginning with the date on which the matter is placed on the list, satisfying the Court that the property is not recoverable property.
(4) Unless the respondent satisfies the Court that the property is not recoverable property obtained as a result of an economic crime offence, the Court shall, upon the application of the Director, make a forfeiture order in relation to the property specified in the notice or any part of it.
(5) Property which is forfeited pursuant to a forfeiture order under this section shall be paid into the top slice of the Asset Recovery Incentivisation Scheme run by the Home Department.’
Dame Margaret Hodge
I will speak to this very quickly, too. This is an interesting new clause, because its purpose is to tackle the issue of suspicious wealth remaining frozen in bank accounts and serving no useful purpose. We propose a new, more straightforward, pragmatic solution to deal with suspicious wealth, enabling our enforcement agencies to confiscate the moneys in the bank and repurpose them so that much of the wealth can be used to fund and strengthen our anti-money laundering enforcement capacity and perhaps be given back, in some cases, to the nations from which it has been stolen.
When a banker sees a suspicious transaction, he or she is required to ask for consent from the police to allow the transaction to go ahead. If the police officer refuses consent, the moneys can be frozen in the bank account. Under our new clause, the money would then remain frozen for six months, and the director of the Serious Fraud Office could apply to the courts to confiscate or seize the moneys. They will be granted that application unless the respondent proves to the court that the funds do not have a criminal origin. The onus is on the respondent to prove that he or she has obtained the assets legitimately. The SFO does not have to prove that the respondent committed a criminal activity; it is up to the respondent to prove that the funds are legitimately and honestly acquired and are not linked to acts of criminality. The new clause is modelled on unexplained wealth orders.
This would add an important new weapon to our arsenal in the fight against economic crime, as it provides for the non-conviction-based confiscation of frozen assets. Although they are not my favourite people, the people of Jersey have introduced a very similar law and recently managed to secure £1.7 million that was frozen in accounts there. That was money paid to Lieutenant General Jeremiah Useni, who had held office in the Abacha regime in Nigeria, and the allegation was that it was the proceeds of corruption. Although he tried to get his money back, he could not, and a lot of the £1.7 million went back to Nigeria.
The British Bankers’ Association thinks that we have up to £50 million held in frozen accounts, untouched. We need a little touch of boldness from the Minister. He should not just accept the message of “resist” that he gets from his officials. He should give good consideration to this sensible, practical, good idea of seizing money stolen by bad people and giving it back to the citizens who have been robbed, or repurposing it to strengthen the fight against economic crime.
Stephen Kinnock
We welcome these new clauses, which would give effect to the Government’s stated intention to unlock the proceeds of crime held in bank accounts to fund law enforcement efforts to tackle economic crime. Their adoption would also optimise the potential of the defence against money laundering regime and streamline the process of UK law enforcement identifying tainted wealth and being able to seek its forfeiture.
Tom Tugendhat
I thank the right hon. Member for Barking. While I agree with the intent behind her new clauses, I argue that they narrow slightly the scope in which the state can already recover much of the proceeds of crime. While they attempt to simplify, the reality is that we are already recovering large sums. I am not saying that we could not do more—we certainly could—but I am not convinced that the new clauses would add significantly to existing legislation. Last year, for example, a record £115 million of proceeds of crime were recovered under existing powers.
Dame Margaret Hodge
That is not a brilliant argument, but I will pursue this issue on Report, as we are doing with other issues around seizing and freezing assets. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 84
Compensation for Victims of Economic Crime
‘(1) The Secretary of State must, no later than 90 days from the date on which this Act comes into force, publish and lay before Parliament a strategy for the potential establishment of a fund for the compensation of victims of economic crime.
(2) The strategy may include provisions on the management and disposal of any assets realised by the government, or any body with law enforcement responsibilities in relation to economic crime, under relevant UK legislation.’—(Stephen Kinnock.)
This new clause would require the Secretary of State to prepare and publish a strategy on the potential establishment of a fund to provide compensation to victims of economic crime.
Brought up, and read the First time.
Stephen Kinnock
I beg to move, That the clause be read a Second time.
As this is the last time I will be on my feet, I thank the Committee; it has been an excellent set of debates, and I look forward to further constructive engagement with the Government on these matters.
The context of new clause 84 is the devastation caused by Putin’s barbaric and illegal war for the lives and livelihoods of Ukraine’s population. This demands a concerted cross-party and international effort, of which the UK should be at the forefront, as the staggering costs of reconstruction are sure to remain a key challenge long after the war itself has reached its inevitable end.
The new clause would require the Government to prepare and publish a wide-ranging strategy for efforts to ensure that the necessary financial compensation is made available to victims of economic crime, wherever they may be. This could and should be applied to victims of international crimes, of which the war in Ukraine is without doubt an example, but it could be applied more broadly as a means of providing a measure of justice to the victims of any other kleptocratic regimes around the world. The new clause would provide a mechanism for compensating victims of economic crime in the UK, including the thousands, or perhaps even millions, of British victims of online scams and other kinds of fraud. We therefore commend the new clause to the Committee, and I look forward to the Minister’s response.
Alison Thewliss
If this is indeed the last opportunity I have to speak in the Committee, I thank the Ministers. I hope they have been listening closely to what we recommend and will bring back amendments on Report. I also thank my hon. Friend the Member for Paisley and Renfrewshire North for being so patient and helpful in supporting me throughout the passage of the Bill.
The new clause gets to the heart of the matter. Victims of economic crime often receive very little compensation but suffer greatly from the impact of the crime. It can be devastating for people, both financially and personally, and they are deeply affected by it for the rest of their lives, so anything that will go towards helping to compensate those victims seems like a sensible prospect.
Tom Tugendhat
As this is probably the last time I will speak in the Committee, I thank you, Mr Robertson. I also thank the right hon. Member for Barking for her input into the Bill not just today, but over many years and as Chair of the Public Accounts Committee. The way in which she has championed tackling economic crime, drawn the House’s attention to it, and focused the country on the real threats that we have faced has been impressive to us all, and I am personally enormously grateful to her. She certainly helped my work enormously when I chaired the Foreign Affairs Committee, and she has now helped to focus my work as a Minister. I am very grateful that I have had the privilege of working with her.
Dame Margaret Hodge
I forgot to thank you, Mr Robertson, for chairing the Committee and for showing such an interest in what we are doing. I also thank the Ministers and Members of all parties who have spoken and participated. I look forward to working further to get even more into the Bill.
Tom Tugendhat
If anybody thinks that I was trying to soft-soap the right hon. Lady in order to shut her up in future sittings, they do not know her very well. It would have not worked, and I have not tried it. All I have done is to pay credit to somebody who has definitely earned it. I also thank my fellow Minister and the Whips, who have got us through at lightning speed.
On the new clause, the powers in part 4 already increase the focus on victims. The compensation principles of the Serious Fraud Office, CPS, the National Crime Agency and others have committed law enforcement bodies to ensuring that compensation for economic crime is considered in every relevant case, including where there are overseas victims, so I believe that the Bill already focuses on many of the aspects that we have discussed. That said, we are coming to Report. As always, I will be listening, but I have yet to be convinced about the new clause, because I believe that it has largely been covered.
Stephen Kinnock
Has the Minister any thoughts on the international forums that have been set up—for example, the Russian Elites, Proxies, and Oligarchs Taskforce and the European Commission’s Freeze and Seize Taskforce. What contribution are the UK Government planning to make to those processes?
Tom Tugendhat
I can speak directly to that, because I have recently had a meeting about it with other Governments and other jurisdictions. So far, many people have come up with ways to freeze assets. That is not a particular challenge; the UK does so very actively. Seizing and forfeiting in totality is a different challenge, because it depends on ownership and on many aspects of common law jurisdiction that we would not want to understate. I assure the hon. Gentleman honestly that I have not given up on this, because compensation for the victims in Ukraine is the very least that we should expect, as he correctly identified. Ukraine’s inevitable victory, which is absolutely assured, leads us to start thinking about how we reconstruct that extraordinary country. It is clear that Russian state assets held abroad—some, sadly, are held in the UK—should go some way to contributing to that.
That said, how do we construct the legal arguments to ensure that that is possible? They need to be in keeping with British common law, for obvious reasons. We do not want a jurisdiction of forfeiture; we want a jurisdiction of law. There is more work to be done, therefore. We are working very closely with other common law jurisdictions, such as Australia, Canada and, indeed, the United States. There is an ongoing discussion, but it is not quite as straightforward as I would have hoped.
Stephen Kinnock
I have no further comments, and I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Schedule 1
Cryptoassets: terrorism
“Part 1
Amendments to the Anti-terrorism, Crime and Security Act 2001
1 Schedule 1 to the Anti-terrorism, Crime and Security Act 2001 (forfeiture of terrorist property) is amended as follows.
2 After Part 4B insert—
‘Part 4BA
Seizure and detention of terrorist cryptoassets
Interpretation
10Z7A (1) In this Schedule—
“cryptoasset” means 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;
“crypto wallet” means—
(a) software,
(b) hardware,
(c) a physical item, or
(d) any combination of the things mentioned in paragraphs (a) to (c),
which is used to store the cryptographic private key that allows cryptoassets to be accessed.
“terrorist cryptoasset” means a cryptoasset which—
(a) is within subsection (1)(a) or (b) of section 1, or
(b) is earmarked as terrorist property.
(2) The Secretary of State may by regulations made by statutory instrument amend the definitions of “cryptoasset” and “crypto wallet” in sub-paragraph (1).
(3) Regulations under sub-paragraph (2)—
(a) may make different provision for different purposes;
(b) may make consequential, supplementary, incidental, transitional, transitory or saving provision.
(4) A statutory instrument containing regulations under sub-paragraph (2) may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.
(5) In this Part—
“cryptoasset-related item” means an item of property that is, or that contains or gives access to information that is, likely to assist in the seizure under this Part of terrorist cryptoassets;
“senior officer” means—
(a) a senior police officer;
(b) an officer of Revenue and Customs of a rank designated by the Commissioners for His Majesty’s Revenue and Customs as equivalent to that of a senior police officer;
(c) an immigration officer of a rank designated by the Secretary of State as equivalent to that of a senior police officer;
“senior police officer” means a police officer of at least the rank of superintendent.
Seizure of cryptoasset-related items
10Z7AA (1) An authorised officer may seize any item of property if the authorised officer has reasonable grounds for suspecting that the item is a cryptoasset-related item.
(2) If an authorised officer is lawfully on any premises, the officer may, for the purpose of—
(a) determining whether any property is a cryptoasset-related item, or
(b) enabling or facilitating the seizure under this Part of any terrorist cryptoasset,
require any information which is stored in any electronic form and accessible from the premises to be produced in a form in which it can be taken away and in which it is visible and legible, or from which it can readily be produced in a visible and legible form.
(3) But sub-paragraph (2) does not authorise an authorised officer to require a person to produce privileged information.
(4) In this paragraph “privileged information” means information which a person would be entitled to refuse to provide—
(a) in England and Wales and Northern Ireland, on grounds of legal professional privilege in proceedings in the High Court;
(b) in Scotland, on grounds of confidentiality of communications in proceedings in the Court of Session.
(5) Where an authorised officer has seized a cryptoasset-related item under sub-paragraph (1), the officer may use any information obtained from the item for the purpose of—
(a) identifying or gaining access to a crypto wallet, and
(b) by doing so, enabling or facilitating the seizure under this Part of any cryptoassets.
Initial detention of cryptoasset-related items
10Z7AB (1) Property seized under paragraph 10Z7AA may be detained for an initial period of 48 hours.
(2) Sub-paragraph (1) authorises the detention of property only for so long as an authorised officer continues to have reasonable grounds for suspicion in relation to that property as described in paragraph 10Z7AA(1).
(3) In calculating a period of 48 hours for the purposes of this paragraph, no account is to be taken of—
(a) any Saturday or Sunday,
(b) Christmas Day,
(c) Good Friday,
(d) any day that is a bank holiday under the Banking and Financial Dealings Act 1971 in the part of the United Kingdom within which the property is seized, or
(e) any day prescribed by virtue of section 8(2) of the Criminal Procedure (Scotland) Act 1995 as a court holiday in a sheriff court in the sheriff court district within which the property is seized.
Further detention of cryptoasset-related items
10Z7AC (1) The period for which property seized under paragraph 10Z7AA may be detained may be extended by an order made—
(a) in England and Wales or Northern Ireland, by a magistrates’ court;
(b) in Scotland, by the sheriff.
(2) An order under sub-paragraph (1) may not authorise the detention of any property—
(a) beyond the end of the period of 6 months beginning with the date of the order, and
(b) in the case of any further order under this paragraph, beyond the end of the period of 2 years beginning with the date of the first order; but this is subject to sub-paragraph (4).
(3) A justice of the peace may also exercise the power of a magistrates’ court to make the first order under sub-paragraph (1).
(4) The court or sheriff may make an order for the period of 2 years in sub-paragraph (2)(b) to be extended to a period of up to 3 years beginning with the date of the first order.
(5) An application to a magistrates’ court, a justice of the peace or the sheriff to make the first order under sub-paragraph (1) extending a particular period of detention—
(a) may be made and heard without notice of the application or hearing having been given to any of the persons affected by the application or to the legal representatives of such a person, and
(b) may be heard and determined in private in the absence of persons so affected and of their legal representatives.
(6) An application for an order under sub-paragraph (1) or (4) may be made—
(a) in relation to England and Wales and Northern Ireland, by the Commissioners for His Majesty’s Revenue and Customs or an authorised officer;
(b) in relation to Scotland, by a procurator fiscal.
(7) The court, sheriff or justice may make an order under sub-paragraph (1) if satisfied, in relation to the item of property to be further detained, that—
(a) there are reasonable grounds for suspecting that it is a cryptoasset-related item, and
(b) its continuing detention is justified.
(8) The court or sheriff may make an order under sub-paragraph (4) if satisfied that a request for assistance is outstanding in relation to the item of property to be further detained.
(9) A “request for assistance” in sub-paragraph (8) means a request for assistance in obtaining evidence (including information in any form or article) in connection with the property to be further detained, made —
(a) by a judicial authority in the United Kingdom under section 7 of the Crime (International Co-operation) Act 2003, or
(b) by an authorised officer, to an authority exercising equivalent functions in a foreign country.
(10) An order under sub-paragraph (1) must provide for notice to be given to persons affected by the order.
Seizure of cryptoassets
10Z7AD (1) An authorised officer may seize cryptoassets if the authorised officer has reasonable grounds for suspecting that the cryptoassets are terrorist cryptoassets.
(2) The circumstances in which a cryptoasset is “seized” for the purposes of sub-paragraph (1) include circumstances in which it is transferred into a crypto wallet controlled by the authorised officer.
Prior authorisation for detention of cryptoassets
10Z7AE (1) Where an order is made under paragraph 10Z7AC in respect of a cryptoasset-related item, the court, sheriff or justice making the order may, at the same time, make an order to authorise the detention of any cryptoassets that may be seized as a result of information obtained from that item.
(2) An application for an order under this paragraph may be made, by a person mentioned in paragraph 10Z7AC(6), at the same time as an application for an order under paragraph 10Z7AC is made by that person.
(3) The court, sheriff or justice may make an order under this paragraph if satisfied that there are reasonable grounds for suspecting that the cryptoassets that may be seized are terrorist cryptoassets.
(4) An order under this paragraph authorises detention of the cryptoassets for the same period of time as the order under paragraph 10Z7AC authorises detention in respect of the cryptoasset-related item to which those cryptoassets relate.
Initial detention of cryptoassets
10Z7AF (1) Cryptoassets seized under paragraph 10Z7AD may be detained for an initial period of 48 hours.
(2) Sub-paragraph (1) authorises the detention of cryptoassets only for so long as an authorised officer continues to have reasonable grounds for suspicion in relation to those cryptoassets as described in paragraph 10Z7AD(1).
(3) In calculating a period of 48 hours for the purposes of this paragraph, no account is to be taken of—
(a) any Saturday or Sunday,
(b) Christmas Day,
(c) Good Friday,
(d) any day that is a bank holiday under the Banking and Financial Dealings Act 1971 in the part of the United Kingdom within which the property is seized, or
(e) any day prescribed by virtue of section 8(2) of the Criminal Procedure (Scotland) Act 1995 as a court holiday in a sheriff court in the sheriff court district within which the property is seized.
(4) This paragraph is subject to paragraph 10Z7AE.
Further detention of cryptoassets
10Z7AG (1) The period for which cryptoassets seized under paragraph 10Z7AD may be detained may be extended by an order made—
(a) in England and Wales or Northern Ireland, by a magistrates’ court;
(b) in Scotland, by the sheriff.
(2) An order under sub-paragraph (1) may not authorise the detention of any cryptoassets—
(a) beyond the end of the period of 6 months beginning with the date of the order, and
(b) in the case of any further order under this paragraph, beyond the end of the period of 2 years beginning with the date of the first order; but this is subject to sub-paragraph (4).
(3) A justice of the peace may also exercise the power of a magistrates’ court to make the first order under sub-paragraph (1).
(4) The court or sheriff may make an order for the period of 2 years in sub-paragraph (2)(b) to be extended to a period of up to 3 years beginning with the date of the first order.
(5) An application to a magistrates’ court, a justice of the peace or the sheriff to make the first order under sub-paragraph (1) extending a particular period of detention—
(a) may be made and heard without notice of the application or hearing having been given to any of the persons affected by the application or to the legal representatives of such a person, and
(b) may be heard and determined in private in the absence of persons so affected and of their legal representatives.
(6) An application for an order under sub-paragraph (1) or (4) may be made—
(a) in relation to England and Wales and Northern Ireland, by the Commissioners for His Majesty’s Revenue and Customs or an authorised officer;
(b) in relation to Scotland, by a procurator fiscal.
(7) The court, sheriff or justice may make an order under sub-paragraph (1) if satisfied, in relation to the cryptoassets to be further detained, that condition 1, condition 2 or condition 3 is met.
(8) Condition 1 is that there are reasonable grounds for suspecting that the cryptoassets are intended to be used for the purposes of terrorism and that either—
(a) their continued detention is justified while their intended use is further investigated or consideration is given to bringing (in the United Kingdom or elsewhere) proceedings against any person for an offence with which the cryptoassets are connected, or
(b) proceedings against any person for an offence with which the cryptoassets are connected have been started and have not been concluded.
(9) Condition 2 is that there are reasonable grounds for suspecting that the cryptoassets consist of resources of an organisation which is a proscribed organisation and that either—
(a) their continued detention is justified while investigation is made into whether or not they consist of such resources or consideration is given to bringing (in the United Kingdom or elsewhere) proceedings against any person for an offence with which the cryptoassets are connected, or
(b) proceedings against any person for an offence with which the cryptoassets are connected have been started and have not been concluded.
(10) Condition 3 is that there are reasonable grounds for suspecting that the cryptoassets are property earmarked as terrorist property and that either—
(a) their continued detention is justified while their derivation is further investigated or consideration is given to bringing (in the United Kingdom or elsewhere) proceedings against any person for an offence with which the cryptoassets are connected, or
(b) proceedings against any person for an offence with which the cryptoassets are connected have been started and have not been concluded.
(11) The court or sheriff may make an order under sub-paragraph (4) if satisfied that a request for assistance is outstanding in relation to the cryptoassets to be further detained.
(12) A “request for assistance” in sub-paragraph (11) means a request for assistance in obtaining evidence (including information in any form or article) in connection with the property to be further detained, made —
(a) by a judicial authority in the United Kingdom under section 7 of the Crime (International Co-operation) Act 2003, or
(b) by an authorised officer, to an authority exercising equivalent functions in a foreign country.
(13) An order under sub-paragraph (1) must provide for notice to be given to persons affected by the order.
Safekeeping of cryptoasset-related items and cryptoassets
10Z7AH (1) An authorised officer must arrange for any item of property seized under paragraph 10Z7AA to be safely stored throughout the period during which it is detained under this Part.
(2) An authorised officer must arrange for any cryptoassets seized under paragraph 10Z7AD to be safely stored throughout the period during which they are detained under this Part.
Release of cryptoasset-related items and cryptoassets
10Z7AI (1) This paragraph applies while any cryptoasset or other item of property is detained under this Part.
(2) A magistrates’ court or (in Scotland) the sheriff may, subject to sub-paragraph (9), direct the release of the whole or any part of the property if the following condition is met.
(3) The condition is that the court or sheriff is satisfied, on an application by the person from whom the property was seized, that the conditions for the detention of the property in this Part are no longer met in relation to the property to be released.
(4) A person within sub-paragraph (5) may, subject to sub-paragraph (9) and after notifying the magistrates’ court, sheriff or justice under whose order property is being detained, release the whole or any part of the property if satisfied that the detention of the property to be released is no longer justified.
(5) The following persons are within this sub-paragraph—
(a) in relation to England and Wales and Northern Ireland, an authorised officer;
(b) in relation to Scotland, a procurator fiscal.
(6) If any cryptoasset-related item which has been released is not claimed within the period of a year beginning with the date on which it was released, an authorised officer may—
(a) retain the item and deal with it as they see fit,
(b) dispose of the item, or
(c) destroy the item.
(7) The powers in sub-paragraph (6) may be exercised only—
(a) where the authorised officer has taken reasonable steps to notify—
(i) the person from whom the item was seized, and
(ii) any other persons who the authorised officer has reasonable grounds to believe have an interest in the item,
that the item has been released, and
(b) with the approval of a senior officer.
(8) Any proceeds of a disposal of the item are to be paid—
(a) into the Consolidated Fund if—
(i) the item was directed to be released by a magistrates’ court, or
(ii) a magistrates’ court or justice was notified under sub-paragraph (4) of the release;
(b) into the Scottish Consolidated Fund if—
(i) the item was directed to be released by the sheriff, or
(ii) the sheriff was notified under sub-paragraph (4) of the release.
(9) If (in the United Kingdom or elsewhere) proceedings are started against any person for an offence with which the property is connected, the property is not to be released under this paragraph (and so is to continue to be detained) until the proceedings are concluded.
Part 4BB
Terrorist cryptoassets: crypto wallet freezing orders
Interpretation
10Z7B (1) In this Part—
(a) “cryptoasset exchange provider” means a firm or sole practitioner who by way of business provides one or more of the following services, including where the firm or sole practitioner does so as creator or issuer of any of the cryptoassets involved—
(i) exchanging, or arranging or making arrangements with a view to the exchange of, cryptoassets for money or money for cryptoassets,
(ii) exchanging, or arranging or making arrangements with a view to the exchange of, one cryptoasset for another, or
(iii) operating a machine which utilises automated processes to exchange cryptoassets for money or money for cryptoassets;
(b) “custodian wallet provider” means a firm or sole practitioner who by way of business provides services to safeguard, or to safeguard and administer—
(i) cryptoassets on behalf of its customers, or
(ii) private cryptographic keys on behalf of its customers in order to hold, store and transfer cryptoassets;
(c) “cryptoasset service provider” includes cryptoasset exchange provider and custodian wallet provider.
(2) In the definition of “cryptoasset exchange provider” in sub-paragraph (1)—
(a) “cryptoasset” includes a right to, or interest in, a cryptoasset;
(b) “money” means—
(i) money in sterling,
(ii) money in any other currency, or
(iii) money in any other medium of exchange,
but does not include a cryptoasset.
(3) The Secretary of State may by regulations made by statutory instrument amend the definitions in sub-paragraphs (1) and (2).
(4) Regulations under sub-paragraph (3)—
(a) may make different provision for different purposes;
(b) may make consequential, supplementary, incidental, transitional, transitory or saving provision.
(5) A statutory instrument containing regulations under sub-paragraph (3) may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.
(6) For the purposes of this Part—
(a) a crypto wallet freezing order is an order that, subject to any exclusions (see paragraph 10Z7BD), prohibits each person by or for whom the crypto wallet to which the order applies is administered from—
(i) making withdrawals or payments from the crypto wallet, or
(ii) using the crypto wallet in any other way;
(b) a crypto wallet is administered by or for a person if the person is the person to whom services are being provided by a cryptoasset service provider in relation to that crypto wallet.
(7) In this Part—
“enforcement officer” means—
(a) a constable, or
(b) a counter-terrorism financial investigator;
“relevant court” means—
(a) in England and Wales and Northern Ireland, a magistrates’ court, and
(b) in Scotland, the sheriff;
“senior officer” means a police officer of at least the rank of superintendent;
“UK-connected cryptoasset service provider” means a cryptoasset service provider which—
(a) is acting in the course of business carried on by it in the United Kingdom,
(b) has terms and conditions with the persons to whom it provides services which provide for a legal dispute to be litigated in the courts of a part of the United Kingdom,
(c) holds, in the United Kingdom, any data relating to the persons to whom it provides services, or
(d) meets the condition in sub-paragraph (8).
(8) The condition in this sub-paragraph is that—
(a) the cryptoasset service provider has its registered office, or if it does not have one, its head office in the United Kingdom, and
(b) the day-to-day management of the provider’s business is the responsibility of that office or another establishment maintained by it in the United Kingdom.
Application for crypto wallet freezing order
10Z7BA (1) This paragraph applies if an enforcement officer has reasonable grounds for suspecting that cryptoassets held in a crypto wallet administered by a UK-connected cryptoasset service provider are terrorist cryptoassets.
(2) Where this paragraph applies the enforcement officer may apply to the relevant court for a crypto wallet freezing order in relation to the crypto wallet in which the cryptoassets are held.
(3) But—
(a) an enforcement officer may not apply for a crypto wallet freezing order unless the officer is a senior officer or is authorised to do so by a senior officer, and
(b) the senior officer must consult the Treasury before making the application for the order or (as the case may be) authorising the application to be made, unless in the circumstances it is not reasonably practicable to do so.
(4) An application for a crypto wallet freezing order may be made without notice if the circumstances of the case are such that notice of the application would prejudice the taking of any steps under this Schedule to forfeit cryptoassets that are terrorist cryptoassets.
(5) An application for a crypto wallet freezing order under this paragraph may be combined with an application for an account freezing order under paragraph 10Q where a single entity—
(a) is both a relevant financial institution for the purposes of paragraph 10Q and a cryptoasset service provider for the purposes of this Part, and
(b) operates or administers, for the same person, both an account holding money and a crypto wallet.
Making of crypto wallet freezing order
10Z7BB (1) This paragraph applies where an application for a crypto wallet freezing order is made under paragraph 10Z7BA in relation to a crypto wallet.
(2) The relevant court may make the order if satisfied that there are reasonable grounds for suspecting that some or all of the cryptoassets held in the crypto wallet are terrorist cryptoassets.
(3) A crypto wallet freezing order ceases to have effect at the end of the period specified in the order (which may be varied under paragraph 10Z7BC) unless it ceases to have effect at an earlier or later time in accordance with this Part or Part 4BC or 4BD.
(4) The period specified by the relevant court for the purposes of sub-paragraph (3) (whether when the order is first made or on a variation under paragraph 10Z7BC) may not exceed the period of 2 years, beginning with the day on which the crypto wallet freezing order is (or was) made; but this is subject to sub-paragraph (5).
(5) The relevant court may make an order for the period of 2 years in sub-paragraph (4) to be extended to a period of up to 3 years beginning with the day on which the crypto wallet freezing order is (or was) made.
(6) The relevant court may make an order under sub-paragraph (5) if satisfied that a request for assistance is outstanding in relation to some or all of the cryptoassets held in the crypto wallet.
(7) A “request for assistance” in sub-paragraph (6) means a request for assistance in obtaining evidence (including information in any form or article) in connection with some or all of the cryptoassets held in the crypto wallet, made—
(a) by a judicial authority in the United Kingdom under section 7 of the Crime (International Co-operation) Act 2003, or
(b) by an enforcement officer, to an authority exercising equivalent functions in a foreign country.
(8) A crypto wallet freezing order must provide for notice to be given to persons affected by the order.
Variation and setting aside of crypto wallet freezing order
10Z7BC (1) The relevant court may at any time vary or set aside a crypto wallet freezing order on an application made by—
(a) an enforcement officer, or
(b) any person affected by the order.
(2) But an enforcement officer may not make an application under sub-paragraph (1) unless the officer is a senior officer or is authorised to do so by a senior officer.
(3) Before varying or setting aside a crypto wallet freezing order the court must (as well as giving the parties to the proceedings an opportunity to be heard) give such an opportunity to any person who may be affected by its decision.
(4) In relation to Scotland, the references in this paragraph to setting aside an order are to be read as references to recalling it.
Exclusions
10Z7BD (1) The power to vary a crypto wallet freezing order includes (amongst other things) power to make exclusions from the prohibition on making withdrawals or payments from the crypto wallet to which the order applies.
(2) Exclusions from the prohibition may also be made when the order is made.
(3) An exclusion may (amongst other things) make provision for the purpose of enabling a person by or for whom the crypto wallet is administered—
(a) to meet the person’s reasonable living expenses, or
(b) to carry on any trade, business, profession or occupation.
(4) An exclusion may be made subject to conditions.
(5) Where a magistrates’ court exercises the power to make an exclusion for the purpose of enabling a person to meet legal expenses that the person has incurred, or may incur, in respect of proceedings under this Schedule, it must ensure that the exclusion—
(a) is limited to reasonable legal expenses that the person has reasonably incurred or that the person reasonably incurs,
(b) specifies the total amount that may be released for legal expenses in pursuance of the exclusion, and
(c) is made subject to the same conditions as would be the required conditions (see section 286A of the Proceeds of Crime Act 2002) if the order had been made under section 245A of that Act (in addition to any conditions imposed under sub-paragraph (4)).
(6) A magistrates’ court, in deciding whether to make an exclusion for the purpose of enabling a person to meet legal expenses in respect of proceedings under this Schedule—
(a) must have regard to the desirability of the person being represented in any proceedings under this Schedule in which the person is a participant, and
(b) must disregard the possibility that legal representation of the person in any such proceedings might, were an exclusion not made—
(i) be made available under arrangements made for the purposes of Part 1 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, or
(ii) be funded by the Department of Justice in Northern Ireland.
(7) The sheriff’s power to make exclusions may not be exercised for the purpose of enabling any person to meet any legal expenses in respect of proceedings under this Schedule.
(8) The power to make exclusions must, subject to sub-paragraph (6), be exercised with a view to ensuring, so far as practicable, that there is not undue prejudice to the taking of any steps under this Schedule to forfeit cryptoassets that are terrorist cryptoassets.
Restriction on proceedings and remedies
10Z7BE (1) If a court in which proceedings are pending in respect of a crypto wallet administered by a UK-connected cryptoasset service provider is satisfied that a crypto wallet freezing order has been applied for or made in respect of the crypto wallet, it may either stay the proceedings or allow them to continue on any terms it thinks fit.
(2) Before exercising the power conferred by sub-paragraph (1), the court must (as well as giving the parties to any of the proceedings concerned an opportunity to be heard) give such an opportunity to any person who may be affected by the court’s decision.
(3) In relation to Scotland, the reference in sub-paragraph (1) to staying the proceedings is to be read as a reference to sisting the proceedings.
Part 4BC
Forfeiture of terrorist cryptoassets
Interpretation
10Z7C (1) In this Part—
“cryptoasset service provider” has the same meaning as in Part 4BB (see paragraph 10Z7B(1));
“crypto wallet freezing order” has the same meaning as in Part 4BB (see paragraph 10Z7B(6));
“senior officer” means—
(a) a senior police officer;
(b) an officer of Revenue and Customs of a rank designated by the Commissioners for His Majesty’s Revenue and Customs as equivalent to that of a senior police officer;
(c) an immigration officer of a rank designated by the Secretary of State as equivalent to that of a senior police officer;
“senior police officer” means a police officer of at least the rank of superintendent.
(2) Paragraph 10Z7B(6)(b) (administration of crypto wallets) applies in relation to this Part as it applies in relation to Part 4BB.
Forfeiture
10Z7CA (1) This paragraph applies—
(a) while any cryptoassets are detained in pursuance of an order under paragraph 10Z7AE or 10Z7AG, or
(b) while a crypto wallet freezing order made under paragraph 10Z7BB has effect.
(2) An application for the forfeiture of some or all of the cryptoassets that are detained or held in the crypto wallet that is subject to the crypto wallet freezing order may be made—
(a) to a magistrates’ court by the Commissioners for His Majesty’s Revenue and Customs or an authorised officer, or
(b) to the sheriff by the Scottish Ministers.
(3) The court or sheriff may order the forfeiture of some or all of the cryptoassets if satisfied that the cryptoassets are terrorist cryptoassets.
(4) An order under sub-paragraph (3) made by a magistrates’ court may provide for payment under paragraph 10Z7CJ of reasonable legal expenses that a person has reasonably incurred, or may reasonably incur, in respect of—
(a) the proceedings in which the order is made, or
(b) any related proceedings under this Part.
(5) A sum in respect of a relevant item of expenditure is not payable under paragraph 10Z7CJ in pursuance of provision under sub-paragraph (4) unless—
(a) the person who applied for the order under sub-paragraph (3) agrees to its payment, or
(b) the court has assessed the amount allowed in respect of that item and the sum is paid in respect of the assessed amount.
(6) For the purposes of sub-paragraph (5)—
(a) a “relevant item of expenditure” is an item of expenditure to which regulations under section 286B of the Proceeds of Crime Act 2002 would apply if the order under sub-paragraph (3) had instead been a recovery order made under section 266 of that Act;
(b) an amount is “allowed” in respect of a relevant item of expenditure if it would have been allowed by those regulations;
(c) if the person who applied for the order under sub-paragraph (3) was an authorised officer, that person may not agree to the payment of a sum unless the person is a senior officer or is authorised to do so by a senior officer.
(7) Sub-paragraph (3) ceases to apply on the transfer of an application made under this paragraph in accordance with paragraph 10Z7CE.
Forfeiture: supplementary
10Z7CB (1) Sub-paragraph (2) applies where an application is made under paragraph 10Z7CA for the forfeiture of any cryptoassets detained in pursuance of an order under paragraph 10Z7AE or 10Z7AG.
(2) The cryptoassets are to continue to be detained in pursuance of the order (and may not be released under any power conferred by this Schedule) until any proceedings in pursuance of the application (including any proceedings on appeal) are concluded.
This is subject to Part 4BD (conversion to money)
(3) Where an application is made under paragraph 10Z7CA in relation to cryptoassets held in a crypto wallet that is subject to a crypto wallet freezing order—
(a) sub-paragraphs (4) and (5) apply, and
(b) the crypto wallet freezing order is to continue to have effect until the time referred to in sub-paragraph (4)(b) or (5).
(4) Where the cryptoassets are ordered to be forfeited under paragraph 10Z7CA(3) or 10Z7CE(3)—
(a) the cryptoasset service provider that administers the crypto wallet must transfer the cryptoassets into a crypto wallet nominated by an authorised officer, and
(b) immediately after the transfer has been made, the freezing order ceases to have effect.
(5) Where the application is determined or otherwise disposed of other than by the making of an order under paragraph 10Z7CA(3) or 10Z7CE(3), the crypto wallet freezing order ceases to have effect immediately after that determination or other disposal.
(6) Sub-paragraphs (4)(b) and (5) are subject to paragraph 10Z7CF and Part 4BD.
(7) The Secretary of State may by regulations made by statutory instrument amend this paragraph to make provision about the forfeiture of cryptoassets held in a crypto wallet that is subject to a crypto wallet freezing order.
(8) Regulations under sub-paragraph (7) may in particular make provision about—
(a) the process for the forfeiture of cryptoassets;
(b) the realisation of forfeited cryptoassets;
(c) the application of the proceeds of such realisation.
(9) Regulations under sub-paragraph (7) may—
(a) make different provision for different purposes;
(b) make consequential, supplementary, incidental, transitional, transitory or saving provision, including provision which makes consequential amendments to this Part.
(10) A statutory instrument containing regulations under sub-paragraph (7) may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.
Associated and joint property
10Z7CC (1) Paragraphs 10Z7CD and 10Z7CE apply if—
(a) an application is made under paragraph 10Z7CA in respect of cryptoassets,
(b) the court or sheriff is satisfied that some or all of the cryptoassets are terrorist cryptoassets, and
(c) there exists property that is associated with the cryptoassets in relation to which the court or sheriff is satisfied as mentioned in paragraph (b).
(2) Paragraphs 10Z7CD and 10Z7CE also apply in England and Wales and Northern Ireland if—
(a) an application is made under paragraph 10Z7CA in respect of cryptoassets,
(b) the court is satisfied that some or all of the cryptoassets are earmarked as terrorist property, and
(c) the cryptoassets in relation to which the court is satisfied as mentioned in paragraph (b) belong to joint tenants and one of the tenants is an excepted joint owner.
(3) In this paragraph and paragraphs 10Z7CD and 10Z7CE, “associated property” means property of any of the following descriptions that is not itself the forfeitable property—
(a) any interest in the forfeitable property;
(b) any other interest in the property in which the forfeitable property subsists;
(c) if the forfeitable property is part of a larger property, but not a separate part, the remainder of that property.
References to property being associated with forfeitable property are to be read accordingly.
(4) In this paragraph and paragraphs 10Z7CD and 10Z7CE, the “forfeitable property” means the cryptoassets in relation to which the court or sheriff is satisfied as mentioned in sub-paragraph (1)(b) or (2)(b) (as the case may be).
(5) For the purposes of this paragraph and paragraphs 10Z7CD and 10Z7CE—
(a) an excepted joint owner is a joint tenant who obtained the property in circumstances in which it would not (as against them) be earmarked, and
(b) references to the excepted joint owner’s share of property are to so much of the property as would have been theirs if the joint tenancy had been severed.
Agreements about associated and joint property
10Z7CD (1) Where—
(a) this paragraph applies, and
(b) the person who applied for the order under paragraph 10Z7CA (on the one hand) and the person who holds the associated property or who is the excepted joint owner (on the other hand) agree,
the magistrates’ court or sheriff may, instead of making an order under paragraph 10Z7CA(3), make an order requiring the person who holds the associated property or who is the excepted joint owner to make a payment to a person identified in the order.
(2) The amount of the payment is (subject to sub-paragraph (3)) to be the amount which the persons referred to in sub-paragraph (1)(b) agree represents—
(a) in a case where this paragraph applies by virtue of paragraph 10Z7CC(1), the value of the forfeitable property;
(b) in a case where this paragraph applies by virtue of paragraph 10Z7CC(2), the value of the forfeitable property less the value of the excepted joint owner’s share.
(3) The amount of the payment may be reduced if the person who applied for the order under paragraph 10Z7CA agrees that the other party to the agreement has suffered loss as a result of—
(a) the seizure of the forfeitable property under paragraph 10Z7AD and its subsequent detention, or
(b) the making of a crypto wallet freezing order under paragraph 10Z7BB.
(4) The reduction that is permissible by virtue of sub-paragraph (3) is such amount as the parties to the agreement agree is reasonable, having regard to the loss suffered and any other relevant circumstances.
(5) An order under sub-paragraph (1) may, so far as required for giving effect to the agreement, include provision for vesting, creating or extinguishing any interest in property.
(6) An order under sub-paragraph (1) made by a magistrates’ court may provide for payment under sub-paragraph (11) of reasonable legal expenses that a person has reasonably incurred, or may reasonably incur, in respect of—
(a) the proceedings in which the order is made, or
(b) any related proceedings under this Part.
(7) A sum in respect of a relevant item of expenditure is not payable under sub-paragraph (11) in pursuance of provision under sub-paragraph (6) unless—
(a) the person who applied for the order under paragraph 10Z7CA agrees to its payment, or
(b) the court has assessed the amount allowed in respect of that item and the sum is paid in respect of the assessed amount.
(8) For the purposes of sub-paragraph (7)—
(a) a “relevant item of expenditure” is an item of expenditure to which regulations under section 286B of the Proceeds of Crime Act 2002 would apply if the order under sub-paragraph (1) had instead been a recovery order made under section 266 of that Act;
(b) an amount is “allowed” in respect of a relevant item of expenditure if it would have been allowed by those regulations.
(9) If there is more than one item of associated property or more than one excepted joint owner, the total amount to be paid under sub-paragraph (1), and the part of that amount which is to be provided by each person who holds any such associated property or who is an excepted joint owner, is to be agreed between both (or all) of them and the person who applied for the order under paragraph 10Z7CA.
(10) If the person who applied for the order under paragraph 10Z7CA was an authorised officer, that person may enter into an agreement for the purposes of any provision of this paragraph only if the person is a senior officer or is authorised to do so by a senior officer.
(11) An amount received under an order under sub-paragraph (1) must be applied as follows—
(a) first, it must be applied in making any payment of legal expenses which, after giving effect to sub-paragraph (7), are payable under this sub-paragraph in pursuance of provision under sub-paragraph (6);
(b) second, it must be applied in payment or reimbursement of any reasonable costs incurred in storing or insuring the forfeitable property and any associated property whilst detained under this Schedule;
(c) third, it must be paid—
(i) if the order was made by a magistrates’ court, into the Consolidated Fund;
(ii) if the order was made by the sheriff, into the Scottish Consolidated Fund.
Associated and joint property: default of agreement
10Z7CE (1) Where this paragraph applies and there is no agreement under paragraph 10Z7CD, the magistrates’ court or sheriff may transfer the application made under paragraph 10Z7CA to the appropriate court.
(2) The “appropriate court” is—
(a) the High Court, where the application under paragraph 10Z7CA was made to a magistrates’ court;
(b) the Court of Session, where the application under paragraph 10Z7CA was made to the sheriff.
(3) Where (under sub-paragraph (1)) an application made under paragraph 10Z7CA is transferred to the appropriate court, the appropriate court may order the forfeiture of the property to which the application relates, or any part of that property, if satisfied that what is to be forfeited—
(a) is within subsection (1)(a) or (b) of section 1, or
(b) is property earmarked as terrorist property.
(4) An order under sub-paragraph (3) made by the High Court may include provision of the type that may be included in an order under paragraph 10Z7CA(3) made by a magistrates’ court by virtue of paragraph 10Z7CA(4).
(5) If provision is included in an order of the High Court by virtue of sub-paragraph (4) of this paragraph, paragraph 10Z7CA(5) and (6) apply with the necessary modifications.
(6) The appropriate court may, as well as making an order under sub-paragraph (3), make an order—
(a) providing for the forfeiture of the associated property or (as the case may be) for the excepted joint owner‘s interest to be extinguished, or
(b) providing for the excepted joint owner‘s interest to be severed.
(7) Where (under sub-paragraph (1)) the magistrates’ court or sheriff decides not to transfer an application made under paragraph 10Z7CA to the appropriate court, the magistrates’ court or sheriff may, as well as making an order under paragraph 10Z7CA(3), make an order—
(a) providing for the forfeiture of the associated property or (as the case may be) for the excepted joint owner‘s interest to be extinguished, or
(b) providing for the excepted joint owner‘s interest to be severed.
(8) An order under sub-paragraph (6) or (7) may be made only if the appropriate court, the magistrates’ court or the sheriff (as the case may be) thinks it just and equitable to do so.
(9) An order under sub-paragraph (6) or (7) must provide for the payment of an amount to the person who holds the associated property or who is an excepted joint owner.
(10) In making an order under sub-paragraph (6) or (7), and including provision in it by virtue of sub-paragraph (9), the appropriate court, the magistrates’ court or the sheriff (as the case may be) must have regard to—
(a) the rights of any person who holds the associated property or who is an excepted joint owner and the value to that person of that property or (as the case may be) of that person’s share (including any value that cannot be assessed in terms of money), and
(b) the interest of the person who applied for the order under paragraph 10Z7CA in realising the value of the forfeitable property.
(11) If the appropriate court, the magistrates’ court or the sheriff (as the case may be) is satisfied that—
(a) the person who holds the associated property or who is an excepted joint owner has suffered loss as a result of—
(i) the seizure of the forfeitable property under paragraph 10Z7AD and its subsequent detention, or
(ii) the making of the crypto wallet freezing order under paragraph 10Z7BB, and
(b) the circumstances are exceptional,
an order under sub-paragraph (6) or (7) may require the payment of compensation to that person.
(12) The amount of compensation to be paid by virtue of sub-paragraph (11) is the amount the appropriate court, the magistrates’ court or the sheriff (as the case may be) thinks reasonable, having regard to the loss suffered and any other relevant circumstances.
(13) Compensation to be paid by virtue of sub-paragraph (11) is to be paid in the same way that compensation is to be paid under paragraph 10Z7CM.
Continuation of crypto wallet freezing order pending appeal
10Z7CF (1) This paragraph applies where, on an application under paragraph 10Z7CA in relation to a crypto wallet to which a crypto wallet freezing order applies—
(a) the magistrates’ court or sheriff decides—
(i) to make an order under paragraph 10Z7CA(3) in relation to some but not all of the cryptoassets to which the application related, or
(ii) not to make an order under paragraph 10Z7CA(3), or
(b) if the application is transferred in accordance with paragraph 10Z7CE(1), the High Court or Court of Session decides—
(i) to make an order under paragraph 10Z7CE(3) in relation to some but not all of the cryptoassets to which the application related, or
(ii) not to make an order under paragraph 10Z7CE(3).
(2) The person who made the application under paragraph 10Z7CA may apply without notice to the court or sheriff that made the decision referred to in sub-paragraph (1) for an order that the crypto wallet freezing order is to continue to have effect.
(3) Where the court or sheriff makes an order under sub-paragraph (2) the crypto wallet freezing order is to continue to have effect until—
(a) the end of the period of 48 hours starting with the making of the order under sub-paragraph (2), or
(b) if within that period of 48 hours an appeal is brought (whether under paragraph 10Z7CG or otherwise) against the decision referred to in sub-paragraph (1), the time when the appeal is determined or otherwise disposed of.
(4) Sub-paragraph (3) of paragraph 10Z7AF applies for the purposes of sub-paragraph (3) as it applies for the purposes of that paragraph.
Paragraphs 10Z7CA to 10Z7CE: appeals
10Z7CG (1) Any party to proceedings for an order for the forfeiture of cryptoassets under paragraph 10Z7CA may appeal against—
(a) the making of an order under paragraph 10Z7CA;
(b) the making of an order under paragraph 10Z7CE(7);
(c) a decision not to make an order under paragraph 10Z7CA unless the reason that no order was made is that an order was instead made under paragraph 10Z7CD;
(d) a decision not to make an order under paragraph 10Z7CE(7).
Paragraphs (c) and (d) do not apply if the application for the order under paragraph 10Z7CA was transferred in accordance with paragraph 10Z7CE(1).
(2) Where an order under paragraph 10Z7CD is made by a magistrates’ court, any party to the proceedings for the order (including any party to the proceedings under paragraph 10Z7CA that preceded the making of the order) may appeal against a decision to include, or not to include, provision in the order under paragraph 10Z7CD(6).
(3) An appeal under this paragraph lies—
(a) in relation to England and Wales, to the Crown Court;
(b) in relation to Scotland, to the Sheriff Appeal Court;
(c) in relation to Northern Ireland, to a county court.
(4) An appeal under this paragraph must be made before the end of the period of 30 days starting with the day on which the court or sheriff makes the order or decision.
(5) Sub-paragraph (4) is subject to paragraph 10Z7CH.
(6) The court hearing the appeal may make any order it thinks appropriate.
(7) If the court upholds an appeal against an order forfeiting any cryptoasset or other item of property, it may, subject to sub-paragraph (8), order the release of the whole or any part of the property.
(8) If (in the United Kingdom or elsewhere) proceedings are started against any person for an offence with which the property is connected, the property is not to be released under this paragraph (and so is to continue to be detained) until the proceedings are concluded.
Extended time for appealing in certain cases where deproscription order made
10Z7CH (1) This paragraph applies where—
(a) a successful application for an order under paragraph 10Z7CA relies (wholly or partly) on the fact that an organisation is proscribed,
(b) an application under section 4 of the Terrorism Act 2000 for a deproscription order in respect of the organisation is refused by the Secretary of State,
(c) the property forfeited by the order under paragraph 10Z7CA was seized under this Schedule on or after the date of the refusal of that application,
(d) an appeal against that refusal is allowed under section 5 of the Terrorism Act 2000,
(e) a deproscription order is made accordingly, and
(f) if the order is made in reliance on section 123(5) of the Terrorism Act 2000, a resolution is passed by each House of Parliament under section 123(5)(b) of that Act.
(2) Where this paragraph applies, an appeal under paragraph 10Z7CG against the making of an order under paragraph 10Z7CA, and against the making (in addition) of any order under paragraph 10Z7CE(7), may be brought at any time before the end of the period of 30 days beginning with the date on which the deproscription order comes into force.
(3) In this paragraph a “deproscription order” means an order under section 3(3)(b) or (8) of the Terrorism Act 2000.
Realisation or destruction of forfeited cryptoassets etc
10Z7CI (1) This paragraph applies where any cryptoasset or other item of property is forfeited under this Part.
(2) An authorised officer must—
(a) realise the property, or
(b) make arrangements for its realisation.
This is subject to sub-paragraphs (3) to (5).
(3) The property is not to be realised—
(a) before the end of the period within which an appeal may be made (whether under paragraph 10Z7CG or otherwise), or
(b) if an appeal is made within that period, before the appeal is determined or otherwise disposed of.
(4) The realisation of property under sub-paragraph (2) must be carried out, so far as practicable, in the manner best calculated to maximise the amount obtained for the property.
(5) Where an authorised officer is satisfied that—
(a) it is not reasonably practicable to realise any cryptoasset, or
(b) there are reasonable grounds to believe that the realisation of any cryptoasset would be contrary to the public interest,
the authorised officer may destroy the cryptoasset.
(6) But—
(a) the authorised officer may destroy the cryptoasset only if the officer is a senior officer or is authorised to do so by a senior officer, and
(b) the cryptoasset is not to be destroyed—
(i) before the end of the period within which an appeal may be made (whether under paragraph 10Z7CG or otherwise), or
(ii) if an appeal is made within that period, before the appeal is determined or otherwise disposed of.
(7) The question of whether the realisation of the cryptoasset would be contrary to the public interest is to be determined with particular reference to how likely it is that the entry of the cryptoasset into general circulation would facilitate criminal conduct by any person.
Proceeds of realisation
10Z7CJ (1) This paragraph applies where any cryptoasset or other item of property is realised under paragraph 10Z7CI.
(2) The proceeds of the realisation must be applied as follows—
(a) first, they must be applied in making any payment required to be made by virtue of paragraph 10Z7CE(9);
(b) second, they must be applied in making any payment of legal expenses which, after giving effect to paragraph 10Z7CA(5) (including as applied by paragraph 10Z7CE(5)), are payable under this sub-paragraph in pursuance of provision under paragraph 10Z7CA(4) or, as the case may be, 10Z7CE(4);
(c) third, they must be applied in payment or reimbursement of any reasonable costs incurred in storing or insuring the property whilst detained under this Schedule and in realising the property;
(d) fourth, they must be paid—
(i) if the property was forfeited by a magistrates’ court or the High Court, into the Consolidated Fund;
(ii) if the property was forfeited by the sheriff or the Court of Session, into the Scottish Consolidated Fund.
(3) If what is realised under paragraph 10Z7CI represents part only of an item of property, the reference in sub-paragraph (2)(c) to costs incurred in storing or insuring the property is to be read as a reference to costs incurred in storing or insuring the whole of the property.
Victims etc: detained cryptoassets
10Z7CK (1) A person who claims that any cryptoassets detained under this Schedule belong to the person may apply for some or all of the cryptoassets to be released.
(2) An application under sub-paragraph (1) is to be made—
(a) in England and Wales or Northern Ireland, to a magistrates’ court;
(b) in Scotland, to the sheriff.
(3) The application may be made in the course of proceedings under paragraph 10Z7AG or 10Z7CA or at any other time.
(4) The court or sheriff may, subject to sub-paragraph (8), order the cryptoassets to which the application relates to be released to the applicant if it appears to the court or sheriff that—
(a) the applicant was deprived of the cryptoassets to which the application relates, or of property which they represent, by criminal conduct,
(b) the cryptoassets the applicant was deprived of were not, immediately before the applicant was deprived of them, property obtained by or in return for criminal conduct and nor did they then represent such property, and
(c) the cryptoassets belong to the applicant.
(5) If sub-paragraph (6) applies, the court or sheriff may, subject to sub-paragraph (8), order the cryptoassets to which the application relates to be released to the applicant or to the person from whom they were seized.
(6) This sub-paragraph applies where—
(a) the applicant is not the person from whom the cryptoassets to which the application relates were seized,
(b) it appears to the court or sheriff that those cryptoassets belong to the applicant,
(c) the court or sheriff is satisfied that the release condition is met in relation to those cryptoassets, and
(d) no objection to the making of an order under sub-paragraph (5) has been made by the person from whom those cryptoassets were seized.
(7) The release condition is met—
(a) if the conditions in Part 4BA for the detention of the cryptoassets are no longer met, or
(b) in relation to cryptoassets which are subject to an application for forfeiture under paragraph 10Z7CA, if the court or sheriff decides not to make an order under that paragraph in relation to the cryptoassets.
(8) If (in the United Kingdom or elsewhere) proceedings are started against any person for an offence with which the cryptoassets are connected, the cryptoassets are not to be released under this paragraph (and so are to continue to be detained) until the proceedings are concluded.
Victims etc: crypto wallet freezing orders
10Z7CL (1) A person who claims that any cryptoassets held in a crypto wallet in respect of which a crypto wallet freezing order has been made belong to the person may apply for some or all of the cryptoassets to be released.
(2) An application under sub-paragraph (1) is to be made—
(a) in England and Wales or Northern Ireland, to a magistrates’ court;
(b) in Scotland, to the sheriff.
(3) The application may be made in the course of proceedings under paragraph 10Z7BB or 10Z7CA or at any other time.
(4) The court or sheriff may, subject to sub-paragraph (8), order the cryptoassets to which the application relates to be released to the applicant if it appears to the court or sheriff that—
(a) the applicant was deprived of the cryptoassets to which the application relates, or of property which they represent, by criminal conduct,
(b) the cryptoassets the applicant was deprived of were not, immediately before the applicant was deprived of them, property obtained by or in return for criminal conduct and nor did they then represent such property, and
(c) the cryptoassets belong to the applicant.
(5) If sub-paragraph (6) applies, the court or sheriff may, subject to sub-paragraph (8), order the cryptoassets to which the application relates to be released to the applicant.
(6) This sub-paragraph applies where—
(a) the applicant is not the person from whom the cryptoassets to which the application relates were seized,
(b) it appears to the court or sheriff that those cryptoassets belong to the applicant,
(c) the court or sheriff is satisfied that the release condition is met in relation to those cryptoassets, and
(d) no objection to the making of an order under sub-paragraph (5) has been made by the person from whom those cryptoassets were seized.
(7) The release condition is met—
(a) if the conditions for the making of the crypto wallet freezing order are no longer met in relation to the cryptoassets to which the application relates, or
(b) in relation to cryptoassets held in a crypto wallet subject to a crypto wallet freezing order which are subject to an application for forfeiture under paragraph 10Z7CA, if the court or sheriff decides not to make an order under that paragraph in relation to the cryptoassets.
(8) Cryptoassets are not to be released under this paragraph—
(a) if an application for their forfeiture under paragraph 10Z7CA is made, until any proceedings in pursuance of the application (including any proceedings on appeal) are concluded;
(b) if (in the United Kingdom or elsewhere) proceedings are started against any person for an offence with which the cryptoassets are connected, until the proceedings are concluded.
(9) In relation to cryptoassets held in a crypto wallet that is subject to a crypto wallet freezing order, references in this paragraph to a person from whom cryptoassets were seized include a reference to a person by or for whom the crypto wallet was administered immediately before the crypto wallet freezing order was made.
Compensation
10Z7CM (1) This paragraph applies if no order is made under paragraph 10Z7CA, 10Z7CD or 10Z7CE in respect of cryptoassets detained under this Schedule or held in a crypto wallet that is subject to a crypto wallet freezing order under paragraph 10Z7BB.
(2) Where this paragraph applies, the following may make an application to the relevant court for compensation—
(a) a person to whom the cryptoassets belong or from whom they were seized;
(b) a person by or for whom a crypto wallet to which the crypto wallet freezing order applies is administered.
(3) If the relevant court is satisfied that the applicant has suffered loss as a result of the detention of the cryptoassets or the making of the crypto wallet freezing order and that the circumstances are exceptional, the relevant court may order compensation to be paid to the applicant.
(4) The amount of compensation to be paid is the amount the relevant court thinks reasonable, having regard to the loss suffered and any other relevant circumstances.
(5) If the cryptoassets were seized, or the crypto wallet freezing order was applied for, by an officer of Revenue and Customs, the compensation is to be paid by the Commissioners for His Majesty’s Revenue and Customs.
(6) If the cryptoassets were seized, or the crypto wallet freezing order was applied for, by a constable, the compensation is to be paid as follows—
(a) in the case of a constable of a police force in England and Wales, it is to be paid out of the police fund from which the expenses of the police force are met;
(b) in the case of a constable of the Police Service of Scotland, it is to be paid by the Scottish Police Authority;
(c) in the case of a police officer within the meaning of the Police (Northern Ireland) Act 2000, it is to be paid out of money provided by the Chief Constable of the Police Service of Northern Ireland.
(7) If the cryptoassets were seized, or the crypto wallet freezing order was applied for, by a counter-terrorism financial investigator, the compensation is to be paid as follows—
(a) in the case of a counter-terrorism financial investigator who was—
(i) a member of the civilian staff of a police force (including the metropolitan police force), within the meaning of Part 1 of the Police Reform and Social Responsibility Act 2011, or
(ii) a member of staff of the City of London police force,
it is to be paid out of the police fund from which the expenses of the police force are met;
(b) in the case of a counter-terrorism financial investigator who was a member of staff of the Police Service of Northern Ireland, it is to be paid out of money provided by the Chief Constable of the Police Service of Northern Ireland.
(8) If the cryptoassets were seized, or the crypto wallet freezing order was applied for, by an immigration officer, the compensation is to be paid by the Secretary of State.
(9) If an order under paragraph 10Z7BB, 10Z7CA, 10Z7CD or 10Z7CE is made in respect of some of the cryptoassets detained or held, this paragraph has effect in relation to the remainder.
(10) This paragraph does not apply if the relevant court makes an order under paragraph 10Z7CK or 10Z7CL.
(11) In this paragraph “relevant court” means—
(a) in England and Wales and Northern Ireland, a magistrates’ court;
(b) in Scotland, the sheriff.
Part 4BD
Conversion of cryptoassets
Interpretation
10Z7D (1) In this Part—
“converted cryptoassets” is to be read in accordance with paragraphs 10Z7DC and 10Z7DD;
“crypto wallet freezing order” has the same meaning as in Part 4BB (see paragraph 10Z7B(6));
“relevant court” means—
(a) in England and Wales and Northern Ireland, a magistrates’ court;
(b) in Scotland, the sheriff;
“relevant financial institution” has the same meaning as in Part 4B (see paragraph 10Q);
“UK-connected cryptoasset service provider” has the same meaning as in Part 4BB (see paragraph 10Z7B(7)).
(2) Paragraph 10Z7B(6)(b) (administration of crypto wallets) applies in relation to this Part as it applies in relation to Part 4BB.
(3) In this Part references to the conversion of cryptoassets into money are references to the conversion of cryptoassets into—
(a) cash, or
(b) money held in an account maintained with a relevant financial institution.
(4) For the purposes of Parts 2 to 4, converted cryptoassets detained under this Part are not to be treated as cash detained under this Schedule.
Detained cryptoassets: conversion
10Z7DA (1) Sub-paragraph (2) applies while any cryptoassets are detained in pursuance of an order under paragraph 10Z7AE or 10Z7AG (including where cryptoassets are subject to forfeiture proceedings).
(2) A person within sub-paragraph (3) may apply to the relevant court for an order requiring all of the cryptoassets detained pursuant to the order to be converted into money.
(3) The following persons are within this sub-paragraph—
(a) an authorised officer;
(b) a person from whom the cryptoassets were seized.
(4) In deciding whether to make an order under this paragraph, the court must have regard to whether the cryptoassets (as a whole) are likely to suffer a significant loss in value during the period before they are released or forfeited (including the period during which an appeal against an order for forfeiture may be made).
(5) Before making an order under this paragraph the court must give an opportunity to be heard to—
(a) the parties to the proceedings, and
(b) any other person who may be affected by its decision.
(6) As soon as practicable after an order is made under this paragraph, an authorised officer must convert the cryptoassets, or arrange for the cryptoassets to be converted, into money.
(7) The conversion of cryptoassets under sub-paragraph (6) must be carried out, so far as practicable, in the manner best calculated to maximise the amount of money obtained for the cryptoassets.
(8) At the first opportunity after the cryptoassets are converted, the authorised officer must arrange for the amount of money obtained for the cryptoassets to be paid into an interest-bearing account and held there.
(9) Interest accruing on the amount is to be added to it on its forfeiture or release.
(10) Where cryptoassets are converted into money in accordance with an order made under this paragraph—
(a) the cryptoassets are no longer to be treated as being detained in pursuance of an order under paragraph 10Z7AE or 10Z7AG, and
(b) any application made under paragraph 10Z7CA(2) in relation to the cryptoassets which has not yet been determined or otherwise disposed of (including under paragraph 10Z7CD or 10Z7CE) is to be treated as if it were an application made under paragraph 10Z7DG(2) in relation to the converted cryptoassets.
(11) An order made under this paragraph must provide for notice to be given to persons affected by the order.
(12) No appeal may be made against an order made under this paragraph.
Frozen crypto wallet: conversion
10Z7DB (1) This paragraph applies while a crypto wallet freezing order under paragraph 10Z7BB has effect (including where cryptoassets held in a crypto wallet that is subject to a crypto wallet freezing order are subject to forfeiture proceedings).
(2) A person within sub-paragraph (3) may apply to the relevant court for an order requiring all of the cryptoassets held in the crypto wallet to be converted into money.
(3) The following persons are within this sub-paragraph—
(a) an authorised officer;
(b) a person by or for whom the crypto wallet is administered.
(4) In deciding whether to make an order under this paragraph, the court must have regard to whether the cryptoassets (as a whole) are likely to suffer a significant loss in value during the period before—
(a) the crypto wallet freezing order ceases to have effect, or
(b) the cryptoassets are forfeited (including the period during which an appeal against an order for forfeiture may be made).
(5) Before making an order under this paragraph the court must give an opportunity to be heard to—
(a) the parties to the proceedings, and
(b) any other person who may be affected by its decision.
(6) As soon as practicable after an order is made under this paragraph, the UK-connected cryptoasset service provider that administers the crypto wallet must convert the cryptoassets, or arrange for the cryptoassets to be converted, into money.
(7) The conversion of cryptoassets under sub-paragraph (6) must be carried out, so far as practicable, in the manner best calculated to maximise the amount of money obtained for the cryptoassets.
(8) At the first opportunity after the cryptoassets are converted, the UK-connected cryptoasset service provider must arrange for the amount of money obtained for the cryptoassets to be paid into an interest-bearing account nominated by an authorised officer and held there.
(9) But—
(a) the UK-connected cryptoasset service provider may deduct any reasonable expenses incurred by the provider in connection with the conversion of the cryptoassets, and
(b) the amount to be treated as the proceeds of the conversion of the cryptoassets is to be reduced accordingly.
(10) Interest accruing on the amount obtained for the cryptoassets is to be added to it on its forfeiture or release.
(11) Where cryptoassets are converted in accordance with an order made under this paragraph—
(a) the crypto wallet freezing order ceases to have effect,
(b) any application made under paragraph 10Z7CA(2) in relation to the cryptoassets which has not yet been determined or otherwise disposed of (including under paragraph 10Z7CD or 10Z7CE) is to be treated as if it were an application made under paragraph 10Z7DG(2) in relation to the converted cryptoassets, and
(c) any application made under paragraph 10Z7CF(2) in relation to the crypto wallet which has not yet been determined or otherwise disposed of may not be proceeded with.
(12) An order made under this paragraph must provide for notice to be given to persons affected by the order.
(13) No appeal may be made against an order made under this paragraph.
Conversion: existing forfeiture proceedings
10Z7DC (1) Where—
(a) cryptoassets are forfeited under paragraph 10Z7CA or 10Z7CE, and
(b) before the cryptoassets are realised or destroyed in accordance with paragraph 10Z7CI, an order is made under paragraph 10Z7DA requiring the cryptoassets to be converted into money,
paragraph 10Z7DJ(1) applies in relation to the converted cryptoassets as if they had been detained under paragraph 10Z7DD and forfeited under paragraph 10Z7DG (and accordingly paragraph 10Z7CI ceases to apply).
(2) Where—
(a) cryptoassets are forfeited under paragraph 10Z7CA or 10Z7CE, and
(b) before the cryptoassets are realised or destroyed in accordance with paragraph 10Z7CI, an order is made under paragraph 10Z7DB requiring the cryptoassets to be converted into money,
paragraph 10Z7DJ(2) applies in relation to the converted cryptoassets as if they had been detained under paragraph 10Z7DE and forfeited under paragraph 10Z7DG (and accordingly paragraph 10Z7CI ceases to apply).
(3) Where—
(a) an appeal may be made under paragraph 10Z7CG(1) or (2) in relation to the determination of an application under paragraph 10Z7CA(2) for the forfeiture of cryptoassets (including where paragraph 10Z7CD or 10Z7CE applies), and
(b) an order is made under paragraph 10Z7DA or 10Z7DB requiring the cryptoassets to be converted into money,
the appeal may instead be made under paragraph 10Z7DH (within the time allowed by paragraph 10Z7CG(4)) as if it were an appeal against the determination of an application under paragraph 10Z7DG.
(4) Where—
(a) an appeal is made under paragraph 10Z7CG(1) or (2) in relation to the determination of an application under paragraph 10Z7CA(2) for the forfeiture of cryptoassets (including where paragraph 10Z7CD or 10Z7CE applies), and
(b) before the appeal is determined or otherwise disposed of, an order is made under paragraph 10Z7DA or 10Z7DB requiring the cryptoassets to be converted into money,
the appeal is to be treated as if it had been made under paragraph 10Z7DH(1) in relation to the determination of an application under paragraph 10Z7DG for the forfeiture of the converted cryptoassets.
Detained cryptoassets: detention of proceeds of conversion
10Z7DD (1) This paragraph applies where cryptoassets are converted into money in accordance with an order under paragraph 10Z7DA.
(2) The proceeds of the conversion (the “converted cryptoassets”) may be detained initially until the end of the period that the cryptoassets could, immediately before the conversion, have been detained under Part 4BA (ignoring the possibility of any extension of that period).
(3) The period for which the converted cryptoassets may be detained may be extended by an order made by the relevant court.
(4) An order under sub-paragraph (3) may not authorise the detention of the converted cryptoassets beyond the end of the period of 2 years beginning with the relevant date; but this is subject to sub-paragraph (5).
(5) The relevant court may make an order for the period of 2 years in sub-paragraph (4) to be extended to a period of up to 3 years beginning with the relevant date.
(6) In sub-paragraphs (4) and (5) “the relevant date” means the date on which the first order under paragraph 10Z7AE or 10Z7AG (as the case may be) was made in relation to the cryptoassets.
(7) An application for an order under sub-paragraph (3) or (5) may be made—
(a) in relation to England and Wales and Northern Ireland, by the Commissioners for His Majesty’s Revenue and Customs or an authorised officer;
(b) in relation to Scotland, by a procurator fiscal.
(8) The relevant court may make an order under sub-paragraph (3) only if satisfied that there are reasonable grounds for suspecting that the converted cryptoassets to be further detained—
(a) are within subsection (1)(a) or (b) of section 1, or
(b) are property earmarked as terrorist property.
(9) The relevant court may make an order under sub-paragraph (5) only if satisfied that a request for assistance is outstanding in relation to the cryptoassets mentioned in sub-paragraph (1).
(10) A “request for assistance” in sub-paragraph (9) means a request for assistance in obtaining evidence (including information in any form or article) in connection with the cryptoassets, made—
(a) by a judicial authority in the United Kingdom under section 7 of the Crime (International Co-operation) Act 2003, or
(b) by an authorised officer, to an authority exercising equivalent functions in a foreign country.
Frozen crypto wallets: detention of proceeds of conversion
10Z7DE (1) This paragraph applies where cryptoassets held in a crypto wallet subject to a crypto wallet freezing order are converted into money in accordance with an order under paragraph 10Z7DB.
(2) The proceeds of the conversion (the “converted cryptoassets”) may be detained initially until the end of the period that the crypto wallet freezing order was, immediately before the conversion, due to have effect under Part 4BB (ignoring the possibility of any extension of that period).
(3) The period for which the converted cryptoassets may be detained may be extended by an order made by the relevant court.
(4) An order under sub-paragraph (3) may not authorise the detention of the converted cryptoassets beyond the end of the period of 2 years beginning with the day on which the crypto wallet freezing order was made; but this is subject to sub-paragraph (5).
(5) The relevant court may make an order for the period of 2 years in sub-paragraph (4) to be extended to a period of up to 3 years beginning with the day on which the crypto wallet freezing order was made.
(6) An application for an order under sub-paragraph (3) or (5) may be made—
(a) in relation to England and Wales and Northern Ireland, by the Commissioners for His Majesty’s Revenue and Customs or an authorised officer;
(b) in relation to Scotland, by a procurator fiscal.
(7) The relevant court may make an order under sub-paragraph (3) only if satisfied that there are reasonable grounds for suspecting that the converted cryptoassets to be further detained—
(a) are within subsection (1)(a) or (b) of section 1, or
(b) are property earmarked as terrorist property.
(8) The relevant court may make an order under sub-paragraph (5) only if satisfied that a request for assistance is outstanding in relation to the cryptoassets mentioned in sub-paragraph (1).
(9) A “request for assistance” in sub-paragraph (8) means a request for assistance in obtaining evidence (including information in any form or article) in connection with the cryptoassets, made—
(a) by a judicial authority in the United Kingdom under section 7 of the Crime (International Co-operation) Act 2003, or
(b) by an authorised officer, to an authority exercising equivalent functions in a foreign country.
Release of detained converted cryptoassets
10Z7DF (1) This paragraph applies while any converted cryptoassets are detained under paragraph 10Z7DD or 10Z7DE.
(2) The relevant court may, subject to sub-paragraph (7), direct the release of the whole or any part of the converted cryptoassets if the following condition is met.
(3) The condition is that, on an application by the relevant person, the court is not satisfied that there are reasonable grounds for suspecting that the converted cryptoassets to be released—
(a) are within subsection (1)(a) or (b) of section 1, or
(b) are property earmarked as terrorist property.
(4) In sub-paragraph (3) “the relevant person” means—
(a) in the case of converted cryptoassets detained under paragraph 10Z7DD, the person from whom the cryptoassets mentioned in sub-paragraph (1) of that paragraph were seized, and
(b) in the case of converted cryptoassets detained under paragraph 10Z7DE, any person affected by the crypto wallet freezing order mentioned in sub-paragraph (1) of that paragraph.
(5) A person within sub-paragraph (6) may, subject to sub-paragraph (7) and after notifying the magistrates’ court or sheriff under whose order converted cryptoassets are being detained, release the whole or any part of the converted cryptoassets if satisfied that the detention is no longer justified.
(6) The following persons are within this sub-paragraph—
(a) in relation to England and Wales or Northern Ireland, an authorised officer;
(b) in relation to Scotland, a procurator fiscal.
(7) Converted cryptoassets are not to be released under this paragraph (and so are to continue to be detained)—
(a) if an application for their forfeiture under paragraph 10Z7DG is made, until any proceedings in pursuance of the application (including any proceedings on appeal) are concluded;
(b) if (in the United Kingdom or elsewhere) proceedings are started against any person for an offence with which the converted cryptoassets are connected, until the proceedings are concluded.
Forfeiture
10Z7DG (1) This paragraph applies while any converted cryptoassets are detained under paragraph 10Z7DD or 10Z7DE.
(2) An application for the forfeiture of some or all of the converted cryptoassets may be made—
(a) to a magistrates’ court by, the Commissioners for His Majesty’s Revenue and Customs or an authorised officer;
(b) to the sheriff, by the Scottish Ministers.
(3) The court or sheriff may order the forfeiture of some or all of the converted cryptoassets if satisfied that the converted cryptoassets to be forfeited—
(a) are within subsection (1)(a) or (b) of section 1, or
(b) are property earmarked as terrorist property.
(4) But in the case of property which belongs to joint tenants, one of whom is an excepted joint owner, the order may not apply to so much of it as the court thinks is attributable to the excepted joint owner’s share.
(5) Where an application for forfeiture is made under this paragraph, the converted cryptoassets are to continue to be detained under paragraph 10Z7DD or 10Z7DE (and may not be released under any power conferred by this Part) until any proceedings in pursuance of the application (including any proceedings on appeal) are concluded.
(6) For the purposes of this paragraph—
(a) an excepted joint owner is a joint tenant who obtained the property in circumstances in which it would not (as against them) be earmarked, and
(b) references to the excepted joint owner’s share of property are to so much of the property as would have been theirs if the joint tenancy had been severed.
Forfeiture: appeals
10Z7DH (1) Any party to proceedings for an order for the forfeiture of converted cryptoassets under paragraph 10Z7DG who is aggrieved by an order under that paragraph or by the decision of the court not to make such an order may appeal—
(a) from an order or decision of a magistrates’ court in England and Wales, to the Crown Court;
(b) from an order or decision of the sheriff, to the Sheriff Appeal Court;
(c) from an order or decision of a magistrates’ court in Northern Ireland, to a county court.
(2) An appeal under sub-paragraph (1) must be made before the end of the period of 30 days starting with the day on which the court makes the order or decision.
(3) The court hearing the appeal may make any order it thinks appropriate.
(4) If the court upholds an appeal against an order forfeiting the converted cryptoassets, it may, subject to sub-paragraph (5), order the release of some or all of the converted cryptoassets.
(5) If (in the United Kingdom or elsewhere) proceedings are started against any person for an offence with which the converted cryptoassets are connected, the converted cryptoassets are not to be released under this paragraph (and so are to continue to be detained) until the proceedings are concluded.
Extended time for appealing in certain cases where deproscription order made
10Z7DI (1) This paragraph applies where—
(a) a successful application for an order under paragraph 10Z7DG relies (wholly or partly) on the fact that an organisation is proscribed,
(b) an application under section 4 of the Terrorism Act 2000 for a deproscription order in respect of the organisation is refused by the Secretary of State,
(c) the converted cryptoassets forfeited by the order under paragraph 10Z7DG were converted from cryptoassets which were seized under this Schedule on or after the date of the refusal of that application,
(d) an appeal against that refusal is allowed under section 5 of the Terrorism Act 2000,
(e) a deproscription order is made accordingly, and
(f) if the order is made in reliance on section 123(5) of the Terrorism Act 2000, a resolution is passed by each House of Parliament under section 123(5)(b) of that Act.
(2) Where this paragraph applies, an appeal under paragraph 10Z7DH against the making of an order under paragraph 10Z7DG may be brought at any time before the end of the period of 30 days beginning with the date on which the deproscription order comes into force.
(3) In this paragraph a “deproscription order” means an order under section 3(3)(b) or (8) of the Terrorism Act 2000.
Application of forfeited converted cryptoassets
10Z7DJ (1) Converted cryptoassets detained under paragraph 10Z7DD and forfeited under paragraph 10Z7DG, and any accrued interest on them, must be applied as follows—
(a) first, they must be applied in making any payment of reasonable expenses incurred by an authorised officer in connection with the safe storage of the cryptoassets mentioned in paragraph 10Z7DD(1) during the period the cryptoassets were detained under Part 4BA;
(b) second, they must be applied in making any payment of reasonable expenses incurred by an authorised officer in connection with the conversion of those cryptoassets under paragraph 10Z7DA(6);
(c) third, they must be applied in making any payment of reasonable expenses incurred by an authorised officer in connection with the detention of the converted cryptoassets under this Part;
(d) fourth, they must be paid—
(i) if forfeited by a magistrates’ court in England and Wales or Northern Ireland, into the Consolidated Fund, and
(ii) if forfeited by the sheriff, into the Scottish Consolidated Fund.
(2) Converted cryptoassets detained under paragraph 10Z7DE and forfeited under paragraph 10Z7DG, and any accrued interest on them, must be applied as follows—
(a) first, they must be applied in making any payment of reasonable expenses incurred by an authorised officer in connection with the detention of the converted cryptoassets under this Part;
(b) second, they must be paid—
(i) if forfeited by a magistrates’ court in England and Wales or Northern Ireland, into the Consolidated Fund, and
(ii) if forfeited by the sheriff, into the Scottish Consolidated Fund.
(3) But converted cryptoassets are not to be applied or paid under sub-paragraph (1) or (2)—
(a) before the end of the period within which an appeal under paragraph 10Z7DH may be made, or
(b) if a person appeals under that paragraph, before the appeal is determined or otherwise disposed of.
Victims etc
10Z7DK (1) This paragraph applies where converted cryptoassets are detained under this Part.
(2) Where this paragraph applies, a person (“P”) who claims that the relevant cryptoassets belonged to P immediately before—
(a) the relevant cryptoassets were seized, or
(b) the crypto wallet freezing order was made in relation to the crypto wallet in which the relevant cryptoassets were held,
may apply to the relevant court for some or all of the converted cryptoassets to be released to P.
(3) The application may be made in the course of proceedings under paragraph 10Z7DD, 10Z7DE or 10Z7DG or at any other time.
(4) The relevant court may, subject to sub-paragraph (9), order the converted cryptoassets to which the application relates to be released to the applicant if it appears to the relevant court that the condition in sub-paragraph (5) is met.
(5) The condition in this sub-paragraph is that—
(a) the applicant was deprived of the relevant cryptoassets, or of property which they represent, by criminal conduct,
(b) the relevant cryptoassets the applicant was deprived of were not, immediately before the applicant was deprived of them, property obtained by or in return for criminal conduct and nor did they then represent such property, and
(c) the relevant cryptoassets belonged to the applicant immediately before—
(i) the relevant cryptoassets were seized, or
(ii) the crypto wallet freezing order was made in relation to the crypto wallet in which the relevant cryptoassets were held.
(6) If sub-paragraph (7) applies, the relevant court may, subject to sub-paragraph (9), order the converted cryptoassets to which the application relates to be released to the applicant or to the person from whom the relevant cryptoassets were seized.
(7) This sub-paragraph applies where—
(a) the applicant is not the person from whom the relevant cryptoassets were seized,
(b) it appears to the relevant court that the relevant cryptoassets belonged to the applicant immediately before—
(i) the relevant cryptoassets were seized, or
(ii) the crypto wallet freezing order was made in relation to the crypto wallet in which the relevant cryptoassets were held,
(c) the relevant court is satisfied that the release condition is met in relation to the converted cryptoassets, and
(d) no objection to the making of an order under sub-paragraph (6) has been made by the person from whom the relevant cryptoassets were seized.
(8) The release condition is met—
(a) if the conditions in this Part for the detention of the converted cryptoassets are no longer met, or
(b) in relation to converted cryptoassets which are subject to an application for forfeiture under paragraph 10Z7DG, if the court or sheriff decides not to make an order under that paragraph in relation to the converted cryptoassets.
(9) If (in the United Kingdom or elsewhere) proceedings are started against any person for an offence with which the converted cryptoassets are connected, the converted cryptoassets are not to be released under this paragraph (and so are to continue to be detained) until the proceedings are concluded.
(10) Where sub-paragraph (2)(b) applies, references in this paragraph to a person from whom relevant cryptoassets were seized include a reference to a person by or for whom the crypto wallet mentioned in that provision was administered immediately before the crypto wallet freezing order was made in relation to the crypto wallet.
(11) In this paragraph “the relevant cryptoassets” means—
(a) in relation to converted cryptoassets detained under paragraph 10Z7DD, some or all of the cryptoassets mentioned in sub-paragraph (1) of that paragraph, and
(b) in relation to converted cryptoassets detained under paragraph 10Z7DE, some or all of the cryptoassets mentioned in sub-paragraph (1) of that paragraph.
Compensation
10Z7DL (1) This paragraph applies if no order is made under paragraph 10Z7DG in respect of converted cryptoassets detained under this Part.
(2) Where this paragraph applies, the following may make an application to the relevant court for compensation—
(a) a person to whom the relevant cryptoassets belonged immediately before they were seized;
(b) a person from whom the relevant cryptoassets were seized;
(c) a person by or for whom the crypto wallet mentioned in paragraph 10Z7DE(1) was administered immediately before the crypto wallet freezing order was made in relation to the crypto wallet.
(3) If the relevant court is satisfied that—
(a) the applicant has suffered loss as a result of—
(i) the conversion of the relevant cryptoassets into money, or
(ii) the detention of the converted cryptoassets, and
(b) the circumstances are exceptional,
the relevant court may order compensation to be paid to the applicant.
(4) The amount of compensation to be paid is the amount the relevant court thinks reasonable, having regard to the loss suffered and any other relevant circumstances.
(5) If the relevant cryptoassets were seized, or the relevant crypto wallet freezing order was applied for, by an officer of Revenue and Customs, the compensation is to be paid by the Commissioners for His Majesty’s Revenue and Customs.
(6) If the relevant cryptoassets were seized, or the relevant crypto wallet freezing order was applied for, by a constable, the compensation is to be paid as follows—
(a) in the case of a constable of a police force in England and Wales, it is to be paid out of the police fund from which the expenses of the police force are met;
(b) in the case of a constable of the Police Service of Scotland, it is to be paid by the Scottish Police Authority;
(c) in the case of a police officer within the meaning of the Police (Northern Ireland) Act 2000, it is to be paid out of money provided by the Chief Constable of the Police Service of Northern Ireland.
(7) If the relevant cryptoassets were seized, or the relevant crypto wallet freezing order was applied for, by a counter-terrorism financial investigator, the compensation is to be paid as follows—
(a) in the case of a counter-terrorism financial investigator who was—
(i) a member of the civilian staff of a police force (including the metropolitan police force), within the meaning of Part 1 of the Police Reform and Social Responsibility Act 2011, or
(ii) a member of staff of the City of London police force,
it is to be paid out of the police fund from which the expenses of the police force are met;
(b) in the case of a counter-terrorism financial investigator who was a member of staff of the Police Service of Northern Ireland, it is to be paid out of money provided by the Chief Constable of the Police Service of Northern Ireland.
(8) If the relevant cryptoassets were seized, or the relevant crypto wallet freezing order was applied for, by an immigration officer, the compensation is to be paid by the Secretary of State.
(9) This paragraph does not apply if the relevant court makes an order under paragraph 10Z7DK.
(10) In this paragraph—
“the relevant cryptoassets” means—
(a) in relation to converted cryptoassets detained under paragraph 10Z7DD, the cryptoassets mentioned in sub-paragraph (1) of that paragraph;
(b) in relation to converted cryptoassets detained under paragraph 10Z7DE, the cryptoassets mentioned in sub-paragraph (1) of that paragraph;
“the relevant crypto wallet freezing order”, in relation to converted cryptoassets detained under paragraph 10Z7DE, means the crypto wallet freezing order mentioned in sub-paragraph (1) of that paragraph.”
3 In Part 1, in paragraph 1(1) (terrorist cash), for “and 4B” substitute “to 4BD”.
4 In Part 4B (forfeiture of terrorist money held in bank and building society accounts), after paragraph 10Z6 insert—
“Victims etc
10Z6A (1) A person who claims that money in respect of which an account freezing order has been made belongs to them may apply to the relevant court for the money to be released.
(2) The application may be made in the course of proceedings under paragraph 10S or 10Z2 or at any other time.
(3) The court may, subject to sub-paragraph (7), order the money to which the application relates to be released to the applicant if it appears to the court that—
(a) the applicant was deprived of the money to which the application relates, or of property which it represents, by criminal conduct,
(b) the money the applicant was deprived of was not, immediately before the applicant was deprived of it, property obtained by or in return for criminal conduct and nor did it then represent such property, and
(c) the money belongs to the applicant.
(4) If sub-paragraph (5) applies, the court may, subject to sub-paragraph (7), order the money to which the application relates to be released to the applicant.
(5) This sub-paragraph applies where—
(a) the applicant is not the person from whom the money to which the application relates was seized,
(b) it appears to the court that the money belongs to the applicant,
(c) the court is satisfied that the release condition is met in relation to the money, and
(d) no objection to the making of an order under sub-paragraph (4) has been made by the person from whom the money was seized.
(6) The release condition is met—
(a) in relation to money held in a frozen account, if the conditions for making an order under paragraph 10S in relation to the money are no longer met, or
(b) in relation to money held in a frozen account which is subject to an application for forfeiture under paragraph 10Z2, if the court or sheriff decides not to make an order under that paragraph in relation to the money.
(7) Money is not to be released under this paragraph—
(a) if an account forfeiture notice under paragraph 10W is given in respect of the money, until any proceedings in pursuance of the notice (including any proceedings on appeal) are concluded;
(b) if an application for its forfeiture under paragraph 10Z2, is made, until any proceedings in pursuance of the application (including any proceedings on appeal) are concluded;
(c) if (in the United Kingdom or elsewhere) proceedings are started against any person for an offence with which the cash is connected, until the proceedings are concluded.
(8) In relation to money held in an account that is subject to an account freezing order, references in this paragraph to a person from whom money was seized include a reference to a person by or for whom the account was operated immediately before the account freezing order was made.”
5 In Part 6, in paragraph 19(1), at the appropriate places insert—
““cryptoasset” has the meaning given by paragraph 10Z7A(1);”;
““crypto wallet” has the meaning given by paragraph 10Z7A(1);”;
““justice of the peace”, in relation to Northern Ireland, means lay magistrate;”;
““terrorist cryptoasset” has the meaning given by paragraph 10Z7A(1);”.
Part 2
Amendments to the Terrorism Act 2000
6 The Terrorism Act 2000 is amended as follows.
7 In Schedule 6 (financial information)—
(a) in paragraph 6(1) (meaning of financial institution)—
(i) omit the “and” after paragraph (ha), and
(ii) after paragraph (i) insert—
(b) after sub-paragraph (1AA) insert—
“(1AB) For the purposes of sub-paragraph (1)(j), “cryptoasset exchange provider” means a firm or sole practitioner who by way of business provides one or more of the following services, including where the firm or sole practitioner does so as creator or issuer of any of the cryptoassets involved—
(a) exchanging or arranging or making arrangements with a view to the exchange of, cryptoassets for money or money for cryptoassets,
(b) exchanging, or arranging or making arrangements with a view to the exchange of, one cryptoasset for another, or
(c) operating a machine which utilises automated processes to exchange cryptoassets for money or money for cryptoassets.
(1AC) For the purposes of sub-paragraph (1)(k), “custodian wallet provider” means a firm or sole practitioner who by way of business provides services to safeguard, or to safeguard and administer—
(a) cryptoassets on behalf of its customers, or
(b) private cryptographic keys on behalf of its customers in order to hold, store and transfer cryptoassets.
(1AD) For the purposes of sub-paragraphs (1AB) and (1AC), “cryptoasset” means 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.
(1AE) For the purposes of sub-paragraph (1AB)—
(a) “cryptoasset” includes a right to, or interest in, the cryptoasset;
(b) “money” means—
(i) money in sterling,
(ii) money in any other currency, or
(iii) money in any other medium of exchange,
but does not include a cryptoasset.
(1AF) The Secretary of State may by regulations amend the definitions in sub-paragraphs (1AB) to (1AE).”
8 In section 123 (orders and regulations), after subsection (6ZE) insert—
“(6ZF) Regulations under paragraph 6(1AF) of Schedule 6 may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.”’—(Tom Tugendhat.)
Part 1 of this Schedule amends the Anti-terrorism, Crime and Security Act 2001 to make provision for a civil recovery regime in relation to terrorist cryptoassets. Part 2 of this Schedule amends the Terrorism Act 2000 to make provision about financial institutions and cryptoassets.
Brought up, read the First and Second time, and added to the Bill.
Bill, as amended, to be reported.
Retained EU Law (Revocation and Reform) Bill (Eighth sitting)
Tuesday 29th 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 Amendment Paper: Public Bill Committee Amendments as at 29 November 2022 - (29 Nov 2022)
The Committee divided: - Ayes: 2 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 9 / Noes: 2 - Question accordingly agreed to.
The Committee divided: - Ayes: 5 / Noes: 9 - Question accordingly negatived.
The Chair
I remind the Committee that with this we are considering new clause 2—Disapplication of the UK Internal Market Act 2020—
“Where Scottish Ministers have used any power granted to them under this Act—
(a) to provide that any EU-derived subordinate legislation or retained direct EU legislation is not subject to revocation at the end of 2023, or
(b) to restate any provision of retained EU law (or, as the case may be, assimilated law),
that legislation or provision shall apply notwithstanding any provision of the UK Internal Market Act 2020.”
Question put, That the amendment be made.
Brendan O’Hara (Argyll and Bute) (SNP)
I beg to move amendment 62, in clause 22, page 22, line 5, at end insert—
“(3A) But no provision of this Act, other than this section, may come into force in relation to Scotland unless the Scottish Parliament has passed a motion consenting to the Act.”
This is the last of the amendments in my name and that of my hon. Friend the Member for Glenrothes, but it is arguably the most telling, because it gets to the nub of everything that we have said about the Bill, while putting the Government on the spot about their commitment to the devolution settlement. The amendment says that none of the Bill’s provisions can take effect on areas of devolved competence unless and until the Scottish Parliament has consented to the Bill through the granting of a legislative consent motion.
I have mentioned on numerous occasions in Committee the seemingly endless stream of warm words on how valued, respected, appreciated and indeed cherished Scotland is by this place, and on how absolutely catastrophic it would be if we decided to leave this not-so-voluntary and not particularly precious Union. The amendment is a litmus test of that commitment to devolution. It would allow the Scottish Parliament to operate as it has done, and as it has always intended to, by giving it the power to decide on matters in a whole raft of policy areas—indeed, on everything that is not specifically reserved to this place. In that spirit, and mindful of everything said by the Prime Minister and others in the past week, I ask: is it too much to ask the Government turn that stream of warm words into action, to accept this amendment, and to prove to the growing band of doubters north of the border that the Government respect Scottish democracy after all? This is, in many ways, the last chance for the Government to secure their support and turn the tide. I wonder whether they will take it.
The Minister for Climate (Graham Stuart)
It is only right that all four nations of this United Kingdom should benefit from the ability to reform and amend retained EU law, so I reject the amendment. The Bill’s territorial scope is the whole UK. As such, all its key measures, including the sunset, will apply to the devolved Governments. That will ensure that we can amend or remove outdated EU-derived law that is no longer right for any part of the UK. The Bill is an essential piece of legislation that will enable the four nations of the UK to capitalise on the regulatory autonomy offered by our departure from the EU, and to fully realise the opportunities of Brexit.
Peter Grant (Glenrothes) (SNP)
Who is best placed to decide whether any of this retained EU law is in Scotland’s best interests? Is it the 5.5 million people who live in Scotland or the Minister?
Graham Stuart
I would have thought the hon. Gentleman would still be smarting from finding out—from the Supreme Court, no less—that all the exaggerated, hyperbolic claims made by the Scottish National party had no grounding whatever. If he was a true democrat, he would respect that once-in-a-generation opportunity taken by the Scottish people, in which they were asked if they wished to stay part of this Parliament and this United Kingdom; and they decided that, yes, they would. It is on that basis that I reject the amendment. I am pleased that the Supreme Court agreed with any other well-informed commentator—other than those specially selected by the Scottish nationalist party—that we are behaving in an appropriate way that fully supports and respects Scottish democracy, and will continue to do so.
Peter Grant
I genuinely and sincerely thank the Minister for the contemptuous way in which he has dismissed the demands of the people of Scotland, because he has added another couple of percentage points to their support for independence. Perhaps—appropriately, when we are discussing a Bill that is full of opportunities for the Government to change the law by mistake—he is single-handedly bringing independence day that wee bit nearer.
There is an important point here. The Minister claimed that in 2014 the people of Scotland were given the chance to decide our future. The chance to decide our future is not something we are given by some colonial overlord. The chance to decide our future is recognised in this place as a fundamental right, as, indeed, is the chance to decide whether the interests of Scotland are best served by a chaotic Brexit, as illustrated in this Bill, or by remaining in the European Union. I accept the Minister wants this country out of the European Union. It is time he respected that I want my country back in. If he wants to talk about the decision that was made in 2014—
The Chair
Order. I blame the Minister for taking us down a particular path, but I encourage the hon. Gentleman to stick to amendment 62.
Peter Grant
I will stick to amendment 62, Sir Gary. The amendment is the last chance in the Bill to respect the decision of the people of Scotland in 2014. Among other things, they voted the way they did because they wanted to remain in the European Union, and they confirmed that with a 24% margin of victory in the 2016 referendum. If the Minister wants to respect the will of the people of Scotland in respect to our relationship with Europe, he will support the amendment, and his Whip, the hon. Member for Beaconsfield, will hold up a board telling Government Back Benchers to support it too.
Brendan O’Hara
Again, I am not remotely surprised that the Government have rejected the amendment; they have rejected every single amendment we have tabled in the past six sittings, over three days. We have given the Government ample opportunity to respect the devolution settlement and for them to say to the Scottish people, “Yes, we respect your Parliament. We respect your democracy. We respect that you have the right to do things differently, as enshrined in the devolution settlement,” but they have rejected every single opportunity they have been offered.
My hon. Friend the Member for Glenrothes is absolutely right to say that Scotland is being denied democracy. This Bill, coupled with the UK Internal Market Act 2020, is a full-on assault on Scottish democracy. I will not push the amendment to a vote, but I will return to this issue on Report. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Graham Stuart
I beg to move amendment 7, in clause 22, page 22, line 9, at end insert—
“(b) the revocation of anything by section 1, or
(c) anything ceasing to be recognised or available in domestic law (and, accordingly, ceasing to be enforced, allowed or followed) as a result of section 3.”
This amendment provides that transitional, transitory or saving provision may be made in connection with anything sunsetted under Clause 1 or 3.
Graham Stuart
The amendment clarifies the power to make transitional provisions for the sunset. Transitional provisions regulate transition from the current law to the law as it will be when amended by the Bill. For instance, transitional provisions could be made to ensure that laws that will fall away after the sunset continue to apply to certain types of ongoing contracts after the sunset date, if the contracts were entered into on the basis of those rules applying. Consequently, the amendment ensures consistency for businesses and citizens following the sunset’s effects. That is highly important, given the roles the Bill will play as a key driver for growth. I trust the Committee will support consistency and growth for British business and citizens, and thus will join me in voting for the amendment.
Justin Madders (Ellesmere Port and Neston) (Lab)
As the Minister just said, Labour will support growth for British business, and we look forward to seeing some in the next 18 months, or maybe before. However, I have a couple of questions about the commencement dates.
Subsection (2) states:
“Section 18 comes into force…two months”
after Royal Assent, whereas subsection (3) contains a much broader provision for Ministers of the Crown to implement different parts of the Act on different dates. As the Committee will have gathered from my comments this morning, I think that that will be sooner rather than later for much of this Bill, but will the Minister explain the difference? Why is there a specific date for section 18, but a much broader power for the remaining provisions?
Subsection (5) refers to various pieces of legislation, including the Financial Services and Markets Act 2022, Financial Conduct Authority and Prudential Regulation Authority rules, and the Financial Services (Banking Reform) Act 2013, as not being applicable to this Act. We have tried to exclude and carve out various pieces of legislation from this Bill, because we believe that some provisions are important for our constituents. I wonder what the rationale is for deciding that those particular provisions are so special that they deserve that treatment.
Graham Stuart
In short, it is because clause 18 covers the business impact target, which is an internal Government process, so I hope that answers the hon. Gentleman’s question.
Amendment 7 agreed to.
Question put, That the clause, as amended, stand part of the Bill.
The Chair
We come to new clause 1, which has already been debated. I call Brendan O’Hara to move new clause 1 formally.
Peter Grant
On a point of order, Sir Gary. I am looking for some clarification. The earlier amendments that would have introduced these new clauses were voted down, so we were unsure whether the new clauses themselves could still be voted on, or whether they had automatically been deemed to have fallen.
The Chair
I think I have made a slight error, so we will move on. The new clauses have fallen—my apologies.
New Clause 8
Conditions for bringing sections 3, 4 and 5 into force
“(1) None of sections 3, 4 or 5 may be brought into force unless all the following conditions have been satisfied.
(2) The first condition is that a Minister of the Crown has, after consulting organisations and persons representative of interests substantially affected by, or with expertise in the likely legal effect of, that section on a draft of that report, laid a report before each House of Parliament setting out, with reasons, the Minister’s view as to the likely advantages and disadvantages of bringing that section into force, setting out in particular the effect of that section on—
(a) the rights of and protections for consumers, workers, and businesses, and protections of the environment and animal welfare;
(b) legal certainty, and the clarity and predictability of the law;
(c) the operation of the Trade and Cooperation agreement between the United Kingdom and the EU, and UK exports of goods and services to the European Economic Area; and
(d) the operation of the Protocol on Ireland/Northern Ireland in the EU withdrawal agreement.
(3) In relation to section 4, that report must take into account any regulation made or likely to be made by a relevant national authority under section 8(1).
(4) The second condition is that a period of sixty days has passed since that report was laid before Parliament, with no account to be taken of any time during which Parliament is dissolved or prorogued or during which either House is adjourned for more than four days.
(5) The third condition is that, after the end of that period, both Houses of Parliament have approved a resolution that that section come into force.
(6) If both Houses of Parliament have approved a resolution that that section should not come into force unless it is amended in a way set out in that resolution, then the Minister may by regulation amend that section accordingly, and that section may not be brought into force until that amendment has been made.”—(Justin Madders.)
This new clause requires Ministers to analyse, and to explain their analysis of, the effect of the removal of retained EU law rights, the principle of supremacy of EU law, and of the general principles. It also includes opportunity for Parliamentary approval and timeframes for laying reports before both Houses.
Brought up, and read the First time.
Question put, That the clause be read a Second time.
The Chair
With this it will be convenient to discuss new clause 11—Impact assessments—
“(1) This section applies when—
(a) a relevant national authority is making regulations under section 12, 13, 15 or 16, or
(b) EU-derived subordinate legislation or retained direct EU legislation is to be revoked under section 1(1) of this Act and regulations made under section 2 do not apply to that legislation.
(2) Six weeks prior to the coming into force of the regulations or (as the case may be) three months before the revocation of the legislation, a relevant national authority must lay before Parliament the report required by subsection (3).
(3) The report required by this subsection must outline the impact the authority expects the regulations or (as the case may be) revocation to have on—
(a) the UK’s obligations under the Trade and Cooperation Agreement,
(b) divergence in standards, rights, protections and regulatory burden between component parts of the UK,
(c) the regulatory burden for businesses seeking to import or export goods or services, and
(d) level playing field provisions contained within bilateral trade agreements between the UK and countries outside the EU.
(4) If the report required by subsection (3) is not laid before Parliament by the date required by subsection (2), the regulations may not be made or (as the case may be) the legislation is, notwithstanding section 1(1), not revoked.”
This new clause will insert the requirement for taking out a comprehensive impact assessment when using the powers afforded by sections 12, 13, 15, and 16, and before the application of section 1(1) (sunset of retained EU law).
Justin Madders
The Government have a track record of inadequate impact assessments going back a few years, and they are not showing much sign of improvement with this Bill. Labour sees it as our duty to push for new clauses that would force the Government to wake up and properly assess the impact of this Bill and policies that will flow from it. As we are approaching the end of proceedings, I will try to keep this brief.
Subsections (1) and (2) of both new clauses should be somewhat familiar to those who have been following our new clauses closely. In both new clauses, subsection (1) simply states that the new clauses would apply to national authorities making regulations under clauses 12, 13, 15 and 16, or section section 1(1), and subsection (2) mimics the timeframe stipulations in our other new clauses; it requires that at least six weeks before the legislation comes into force, or at least three months before it is revoked, a report should be laid before the House that sets out the issues outlined in the new clauses.
The two new clauses differ in the issues that the impact assessments are designed to tackle. New clause 10 focuses on the impact that modifications will have on each authority’s obligations under section 149 of the Equality Act 2010. If Members are unaware of what that includes, it is a duty to consider the need to
“eliminate discrimination, harassment, victimisation and any other conduct that is prohibited by or under this Act…advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it”
and
“foster good relations between persons who share a relevant protected characteristic and persons who do not share it.”
Those are principles that I hope all members of the Committee can sign up to, so it should not be seen as an unreasonable requirement on the Government to prepare such an assessment. In fact, I would be deeply concerned if they were not planning to do that as a matter of course.
The Minister told us last week that the Government were committed to retaining all necessary equality legislation. Leaving aside the question of who decides whether legislation is necessary, if the Government were committed to maintaining equality, they would surely as a matter of course want to know the impact on equalities of all the changes that Ministers are giving themselves the power to make under the Bill. All the new clause does is require the Government to lay a report on these issues before Parliament in good time. Can the Minister tell us whether the Government intend to undertake equality impact assessments of each legislative change in the Bill? He mentioned this morning that there was a commitment to undertaking assessments, but I do not think that we specifically heard that there would be equality impact assessments.
I remain sceptical that we will get the full and proper assessments that we need, because there has been little time and space for proper scrutiny and assessment of the consequences of the powers that Ministers are giving themselves in the Bill. That is, of course, not an accident. As I argued last week, it is by design, so that as little attention as possible is drawn to the impact of any changes that the Bill may deliver.
Tom Randall (Gedling) (Con)
I stand to be corrected, but my understanding is that equality impact assessments under the 2010 Act are not a legal requirement anymore. If I am right on that—I may not be—are the Opposition requiring an equality impact assessment for this Bill alone, or is this part of a broader change in their approach?
Justin Madders
Of course, we can talk only about the effects of the Bill, so the proposal is limited to the Bill at this stage. If the hon. Member has been listening throughout the last three days, he will know that Ministers’ powers to revoke and amend EU legislation have a range of potential implications on equalities. That is why an assessment is particularly important in this instance. Our concern is that the Government do not want it in the public domain that changes under the legislation will lead to Equality Act obligations being failed or less stringent. They seem to be trying to ensure, either by accident or design, that the legislation passes without the microscope of scrutiny and assessment that we think is necessary when talking about basic protections and equality laws.
We parliamentarians should be concerned about the consequences of any legislation that we pass. Our new clauses address that. They do not just set out a requirement to report on obligations under the Equality Act. In new clause 11 we ask for a more general impact assessment, including of the effect on our obligations under the trade and co-operation agreement, which we discussed briefly, and on divergences in rights, standards protections and regulatory burdens in the component parts of the UK. We discussed that, and why it is important, this morning.
We have already discussed the regulatory burdens incurred by businesses seeking to import and export goods and services, and the level playing field provisions in bilateral trade agreements between the UK and the EU, so I will not detain the Committee by setting out why those assessments are vital for the Bill. One would hope that those issues were being factored into any decisions made by Ministers under the powers in the Bill, but there are two key problems that would be made less likely as a result of the impact assessments under new clause 11. Proposed new subsection (3)(a) and (d) would ensure that the assessment highlighted the potential for changes to break international trade obligations. Proposed new subsection (3)(b) and (c) would require the assessment to ensure that the impact on our economy was minimal.
The Minister does not need me to tell him that if the Government decide that basic employment or environmental protections should no longer apply, they will potentially be in breach of the level playing field provisions in the TCA. That is probably the headline example of why we think that impact assessments are important. We certainly do not want to enter into a trade war. All we ask is that the Government make available to parliamentarians the details of what they have taken into consideration. Given how short a period the Government have in which to process every retained law, it is important that the assessment is available to parliamentarians. It will help us to identify any potential burdens on businesses and, significantly, whether there will be divergences across the country—an issue that we have already discussed. It is important that those issues are picked up at an early stage before regulations are passed.
We rely on the Government to undertake the necessary due diligence, but at the moment, we parliamentarians will not see the benefit of it. That is why I tabled the new clauses. We are trying not to place unreasonable restrictions on the Government, but we parliamentarians need the right information to scrutinise the changes. Unfortunately, assessments in recent times have been pretty flimsy. The Regulatory Policy Committee described the impact assessment for the Bill as “weak” or “very weak” in every respect. It said:
“As first submitted, the IA was not fit for purpose as it failed to consider adequately the full impacts of the Bill, in line with RPC primary legislation guidance. Specifically, the RPC highlighted, in its initial review, that the IA had not…provided a clear baseline position, with respect to the overall number of REUL”,
which of course is something that we are still waiting to get to the bottom of,
“that was in scope of the Bill and would, potentially, be retained, amended or sunset”.
We have discussed the question of what is in scope. The report also said that the impact assessment had not
“clarified whether other legislation that is in progress, will have impacts on some of the REUL contained in the overall figure of over 2,400 pieces of REUL”,
or 3,800, depending on which report we believe.
The Regulatory Policy Committee also said:
“The Department was not clear on how the different legislation would interact with the Bill”,
nor had it
“discussed, or set out, any examples of the REUL that is likely to be sunset, despite the Department having previously published extensive assessments of candidate REUL that could be changed or removed…The Department had not drawn upon any evidence or analysis, which was used to support those prior legislative changes, to provide an indication of the potential impacts associated with amending/replacing”
legislation, nor had it
“provided a more considered assessment of the full range of impacts of the Bill”,
so—
The Chair
We will continue with the excellent speech being made by the shadow Minister, the hon. Member for Ellesmere Port and Neston. If you feel that there are points that we may have forgotten, you may wish to repeat them.
Justin Madders
With that encouragement, I will start from the beginning. Hon. Members will be relieved to hear that I was actually reaching my peroration. The new clauses are designed to address our concerns about the amount of consideration that has been given to the Bill’s impact. We are continually told that this is a framework Bill. What confidence can we have that there will be sufficient assessment of the powers in the Bill? It is not outlandish or unreasonable to ask the Government to identify and critique the impact of the changes that they intend to make. Any prudent Government would seek to do that, given the nature of the Bill. For that reason, I hope that the Minister will finally agree, at the fag end of this Committee, to the new clause.
Graham Stuart
I ask the Committee to reject the new clause. I assure the hon. Gentleman that the Government take their responsibilities under the Equality Act 2010 very seriously. We would never intend to bring forward legislation that does not comply with that law. The Government will continue to provide equality impact assessments for regulations that engage a relevant public sector equality duty, as is good practice. We follow our responsibilities under the Equality Act, and will continue to do so when the Bill becomes law. With no further ado, I ask the hon. Gentleman to consider withdrawing the new clause.
Justin Madders
I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 12
Assessment of impact on governance
“(1) Each relevant national authority must, within 28 days of the passage of this Act, lay before Parliament a report on—
(a) the projected cost incurred by each Government department or relevant national authority of complying with the requirements of sections 1 to 23 of this Act;
(b) the projected number of staff required by each Government department or relevant national authority to process all of the relevant retained EU law by the deadline in section 1(1);
(c) the amount of Parliamentary time expected to be needed to process the legislation relevant to each Government department or relevant national authority; and
a timeline outlining how each Government department or relevant national authority plans to meet the deadline in section 1(1).”—(Justin Madders.)
This new clause will establish the requirement for relevant departments to publish an assessment of the impact of processing through all the retained EU Law before the deadline set by Clause 1(1).
Brought up, and read the First time.
Justin Madders
I beg to move, That the clause be read a Second time.
We are almost back where we started, with questions about governance and capacity. Despite spending the best part of three days scrutinising the Bill, we are no closer to getting satisfactory answers. The new clause requires each national authority to produce a report for its Parliament within 28 days of the Bill becoming law, setting out the costs that each Department expects to incur in complying with the Bill’s requirements, the projected number of staff required to process all the retained EU law before the 2023 cliff edge, and the amount of parliamentary time that will be needed to deal with all the legislation. Most importantly, the new clause requires national authorities to produce a plan for how that deadline will be met.
I hope that Members see why there is a need for that report. We are concerned, if not alarmed, about the level of denial in Government about what they are letting themselves in for. There will be consequences, possibly negative ones, because of that lack of understanding of the task ahead. Any big project needs a critical analysis of timescales, resources and capacity.
Say the Government decided to build a giant gas pipeline all the way to Arctic, and someone said, “Let’s have it done by the end of next year.” People might reasonably ask whether one could build a pipeline of that length in just over a year. If all we parliamentarians got back was an assurance that each Department had teams looking at what was involved, we might question whether those plans were realistic. If we were lucky, that Arctic pipeline might reach the Shetland islands by the end of next year. The Bill is that pipeline. It is a hopelessly optimistic, totally unrealistic and frankly reckless attempt to achieve something on a timescale that is driven entirely by political rather than practical considerations. For the umpteenth time, completing this task by the end of next year is not going to stop Brexit, because we have already left the European Union.
Graham Stuart
You will be surprised to learn, Sir Gary, that I ask the Committee to reject the new clause. I apologise to Government Members for the Opposition’s mournful tone. They may not realise that, here we are, restoring our sovereignty in this Parliament—restoring our law, rather than being subject to that of a foreign sovereign.
Through the legislation that my colleagues and I are helping to proceed through this House, we are seeking to ensure that this law is fit for the needs of the UK, Department by Department. We are challenging Departments to look at retained EU law to ensure it is fit for purpose. I admit we are giving them a challenging deadline by which to do that, but I make no apology for doing that, and nor does any other Government Member. We are ambitious; we want to get on with growing the UK economy and ensure we do so in the right way. The new clause would place an unnecessary and laborious burden on the very officials who should be dedicating their time to delivering the retained EU law reform programme.
Paul Blomfield
I am impressed by the Minister’s ambition, although I am not sure that everybody shares his confidence. Will he share with the Committee how realistic it is that that ambition will be realised? He will know that the previous Secretary of State, the right hon. Member for North East Somerset (Mr Rees-Mogg), was advised that, in his Department alone, it would take 400 civil servants to work on the 300 laws that need revision. What assessment has the Minister made of the impact that will have on the Department’s other work? If that figure is wrong, what is the correct figure? I am sure that, behind all that rhetoric, an awful lot of detailed work has gone on to work out how this will be put into practice.
Graham Stuart
I recognise that the retained EU law reform programme is a significant piece of work. However, it is the quickest and most efficient way to deliver the Bill’s objective and end retained EU law as a legal category in its current form—something that everyone who accepts the result of the referendum—
Graham Stuart
The hon. Gentleman, who represents the SNP, does, of course, have a problem with accepting the results of referendums. He never likes the result they come to! Those who have accepted the result will recognise that this is the best way to incentivise genuine reform of retained EU law in ways that work for all four nations of the UK and are consistent with the devolution settlements.
Peter Grant
If the Minister checks his record, he will find that in three of the four referendums I have voted in in Scotland, Scotland voted in accordance with my wishes, and only one of those has been in any way respected by the present Government. The Minister gave a great oration about how important it is for him that the laws affecting his country are made by his country. Could he then explain why it is that when he wants the laws that affect his country to be made by a Government elected by his country, he is a patriot, but when I want the laws affecting my country to be made by the Government elected by the people of my country, I am a narrow-minded separatist? Why is that?
Graham Stuart
Of course, the hon. Gentleman is part of Parliament. That is why he is sitting in this United Kingdom Parliament—because, when his electors and electors across Scotland were asked, “Do you want to be in an independent Scotland?”, they said no. Despite that, this false narrative is pushed on a daily basis by the separatists opposite, who try to suggest that they are being held against their will. In fact, the only will they are being held against is the will of the Scottish people, who refuse to comply with the demands of the separatist SNP, which does not listen to the results of a referendum taking place in Scotland.
Getting back to the Bill, Departments will be expected to develop a delivery plan that outlines their intention for each piece of retained EU law. The Brexit Opportunities Unit will work with Departments to draw up those delivery plans and ensure the legislative process proceeds smoothly. The delivery plans will be subject to scrutiny via an internal Government process or ministerial stocktake process. More information on that will follow, including information on how to factor these processes into statutory instrument timetables.
Turning to the body of law we are talking about, we are currently engaging with the National Archives to uncover any additional information on retained EU law. However, it is worth nothing that many statutory instruments uncovered by the National Archives have been recognised either as orphaned statutory instruments or as no longer applicable to our current legal framework. We are exploring various ways—whether that is star chambers or using the dashboard—to identify what REUL is kept or sunsetted. Although individual Departments will take responsibility, we in the Department for Business, Energy and Industrial Strategy will be helping to co-ordinate this across Government.
Alex Sobel (Leeds North West) (Lab/Co-op)
It is helpful that the Minister has given us some insight into the work of the National Archives. When does he think those regulations—whether orphaned or not—will appear on the dashboard so that we can see them? They are currently opaque for the rest of us.
Graham Stuart
The National Archives has a statutory duty, as the King’s printer, to ensure the statute book is accurate, so asking it to look at REUL is in its existing remit, and—going back to the question from the hon. Member for Ellesmere Port and Neston—it does not cost additional money. It is actually a fundamental part of its work. It is working on that and, like him, I hope to see progress as quickly as possible.
The Government have proved during the Brexit transition and covid-19 that they can deliver extensive legislative programmes to tight deadlines. In so many ways—I should not stray from the subject, so I will not—we have learned from those programmes, and will work with Parliament to bring an even more successful REUL SI programme before the House. I therefore ask the hon. Member for Ellesmere Port and Neston to consider withdrawing his new clause.
Justin Madders
We have had a slightly lively end to the proceedings. I want to pick up on some of the comments made by the Minister. He characterised our opposition to the Bill as not being ambitious—well, if we are in league with the Institute of Directors in saying that this Bill should be withdrawn, I cannot think of a more ambitious bunch of people. Its correct characterisation is that anyone who thinks the timescales in this Bill are realistic is deluded. There is a difference between reality and ambition, and at some point the Government will find the two colliding. I do not want be on the Government Benches when we have to deal with the fallout from that.
Justin Madders
We’ll see about that.
Whichever Benches I am on, I will always hold firm to the view that Parliament should be sovereign, and that Parliament should be the body that looks at laws and considers changes that affect our constituents. People voted in 2016 for Parliament to take back control, but the Bill does not do that; it gives control to Ministers. It wrenches control away from Parliament and the people we represent. At the core of this is a lack of transparency and a lack of confidence in the Government’s programme, because if they cannot tell us what they intend to do with the Bill and they do not want the light of scrutiny shone on their intentions, it suggests that they are not confident about what the public will say when those intentions become clear. A Government who are not confident in their own policies should not have the confidence of the public. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
Justin Madders
On a spurious point of order, Sir Gary—no point of order is ever spurious in this place. I would like to thank you and Sir George for chairing the Committee, and the Clerks for their hard work in making sure that everything we have done has been in order—even this point of order. I also thank all Members for participating. We have had some robust and healthy debates, and I look forward to taking them forward in the main Chamber.
Brendan O’Hara
Further to that point of order, Sir Gary. I associate myself with the comments made by the hon. Member for Ellesmere Port and Neston, and thank the Clerks and the Government’s civil servants for the hard work that they have done. I realise that it has been a bit of mauling from this side of the House, but it was never, ever intended to be personal; it is purely political.
I thank you, Sir Gary, and Sir George, who guided us through the first two days of our proceedings. I am delighted to thank colleagues on both sides of the Chamber for the usually constructive, respectful and informed discussions that we have had over the past few days. I put on the record my sincere thanks, and those of my hon. Friend the Member for Glenrothes, to Emilie-Louise Purdie, who did so much work behind the scenes so that my hon. Friend and I occasionally knew what we were talking about.
Graham Stuart
Further to that point of order, Sir Gary—spurious or otherwise. I thank the Committee for being so indulgent of me, as I have come in on this final day. It has been a robust but extremely good-humoured Committee, which has managed—under your excellent chairmanship, Sir Gary—to move with expedition through the Order Paper in front of us. I thank the Clerks for their support for all that we have done, and my civil servants in BEIS. If the hon. Member for Argyll and Bute had trouble with his colleague being brought up to speed, I can assure him that BEIS civil servants had an even harder task at bringing me up to speed. Members will be the judge of whether they managed that very well, but they put in a great deal of effort. Finally, I thank the hon. Member for Ellesmere Port and Neston, and I congratulate him on his birthday last week and on the fact that he brought in his 50th birthday cake—it is just a shame I did not get a slice.
Bill, as amended, to be reported.
Social Housing and Regulation Bill [ LORDS ] (Second sitting)
Tuesday 29th November 2022
(2 years ago)
Public Bill CommitteesRead Full debate Social Housing (Regulation) Act 2023 View all Social Housing (Regulation) Act 2023 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 29 November 2022 - (29 Nov 2022)
The Committee divided: - Ayes: 7 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
The Chair
With this it will be convenient to discuss new clause 4—Persons engaged in the management of social housing to have relevant professional qualifications—
“After section 217 of the Housing and Regeneration Act 2008 (accreditation) insert—
‘217A Professional qualifications and other requirements
(1) The Secretary of State may, by regulations, provide that a person may not engage in the management of social housing or in specified work in relation to the provision of social housing unless he or she—
(a) has appropriate professional qualifications, or
(b) satisfies specified requirements.
(2) Regulations specifying work for the purpose of subsection (1) may make provision by reference to—
(a) one or more specified activities, or
(b) the circumstances in which activities are carried out.
(3) Regulations made under this section may, in particular, require—
(a) the possession of a specified qualification or experience of a specified kind,
(b) participation in or completion of a specified programme or course of training, or
(c) compliance with a specified condition.
(4) Regulations may make provision for any of the following matters—
(a) the establishment and continuance of a regulatory body;
(b) the keeping of a register of qualified social housing practitioners;
(c) requirements relating to education and training before and after qualification;
(d) standards of conduct and performance;
(e) discipline and fitness to practise;
(f) removal or suspension from registration or the imposition of conditions on registration;
(g) investigation and enforcement by or on behalf of the regulatory body, and appeals against the decisions or actions of the regulatory body.”’
This new clause would require managers of social housing to have appropriate qualifications and expertise.
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Dehenna Davison)
As I said on Second Reading, the Government are fully committed to driving up housing management standards by improving the professional behaviours, skills and capabilities of all staff in the sector. The Grenfell tragedy and our subsequent social housing Green Paper consultation highlighted the fact that many staff did not listen to or treat residents with respect, provide a high-quality service or deal appropriately with complaints. The circumstances surrounding the death of Awaab Ishak have once again shown the tragic consequences that can occur when staff lack empathy and when tenants are not listened to. That is why clause 21 makes provision to enable the Secretary of State to direct the regulator of social housing to set standards for the competence and conduct of social housing staff. Registered providers will be required to comply with specified rules concerning the knowledge, skills and experience of social housing staff. They will also be required to comply with specified rules concerning the conduct expected of such individuals when dealing with tenants. Those factors are crucial in determining the quality of services provided to tenants.
Our approach offers a holistic solution to the issue of professionalisation. It champions the value of skills, knowledge and experience, and maintains landlords’ flexibility in choosing the most appropriate training programmes and qualifications to equip their workforces. The standards set under this clause will ensure that social housing staff develop the core skillsets and behaviours required to treat tenants with the empathy and respect that they deserve. They will also empower staff to take appropriate action to support tenants.
New clause 4, tabled by the shadow Minister, takes a different approach to achieving professionalisation. It gives the Secretary of State the power to stipulate, through regulations, that a person
“may not engage in the management of social housing or in specified work in relation to the provision of social housing unless he or she—
(a) has appropriate professional qualifications, or
(b) satisfies specified requirements.”
As both myself and the Secretary of State set out on Second Reading, there is a real risk that mandating qualifications for all housing management staff would lead to the reclassification of housing associations to the public sector. The sector is close to the threshold for reclassification, and we saw that happen in 2015. Since then, a number of deregulatory measures have had to be taken before housing associations could be reclassified back to the private sector.
To make this point very clear, reclassification would bring around £90 billion of debt and all housing association annual spending on to the public ledger, and would likely reduce the ability of housing associations to improve the quality of their stock and build new homes. We have to be mindful of that risk and that outcome, which could be harmful to tenants.
However, we have listened carefully to the arguments made both in this House and the other place in support of mandatory qualifications. As I committed to do on Second Reading, I met with my right hon. Friend the Member for Maidenhead (Mrs May) to discuss this issue before the Bill reached Committee stage. We are continuing to look at whether there is any scope to include qualifications requirements in the competence and conduct standards without triggering reclassification. If we can identify a solution, then we will be able to bring that forward on Report.
We continue to believe that the existing provisions in the Bill, which will enable us to direct the regulator to set standards for the competence and conduct of all staff, will be an effective means of professionalising the sector. Our approach has been informed by the findings of our professionalisation review, which we will publish in full early next year. There is no doubt that housing management qualifications are an important aspect of professional development for some staff. Our review heard no clear evidence that such qualifications in and of themselves lead to better staff behaviours or improved tenant experiences. Qualifications such as those offered by the Chartered Institute of Housing will be an important part of how landlords ensure their staff have the skills, knowledge, experience and behaviours they need to deliver professional services, as required by the competence and conduct standards. Qualifications will sit alongside external and in-house training and more informal developmental tools such as staff supervision, mentoring and reflective practice.
Our review findings echoed what we heard after the Grenfell tragedy and more recently in relation to the death of Awaab Ishak—that what tenants most want and need is for all of the staff they deal with, whether housing managers, officers, or contact centre staff, to treat them with respect and empathy, to listen carefully and take appropriate and timely actions in response to their issues and concerns. We heard that these behaviours, and the interpersonal skills and attitudes that underlie them, are more likely to be achieved through a combination of organisational culture change led by senior executives and boards, adoption of codes of ethics and values, delivery of bespoke on-the-job training and effective supervision by experienced staff, than they are necessarily by formal qualifications.
The review also highlighted how important flexibility is in designing staff development programmes, given the sector’s diverse structures, operating models, role types, and breadth of service provision. Mandating qualifications for all housing management staff could hinder landlords in delivering the right mix of qualifications, training and development for their staff. Through the review we also heard that mandating qualifications for all staff would likely add to the recruitment and retention challenges faced by many landlords. Recruiting staff who have the right attitudes and aptitudes is more important to building a caring and empathetic workforce than employing people who possess formal qualifications. So we are concerned about the recruitment issues in that regard.
The standards that we are bringing forward will drive a holistic and organisation-wide approach to professional development, and deliver the empathetic, forward-looking and professional housing services the sector deserves, with staff who treat tenants with respect and act swiftly to remedy issues.
Dehenna Davison
Two to choose from—I give way to my hon. Friend the Member for Harrow, East.
Bob Blackman
The clause refers to the standards and competence that we expect to be achieved in this sector, and the amendment goes further and expands on them. However, it is silent on sanctions when they are not achieved. It is all very well having qualified people, but, if they do not perform properly, sanctions have to be available and directions by the Secretary of State should be possible. I wonder whether my hon. Friend will look at how we might strengthen the position when we get to Report stage.
Dehenna Davison
I am grateful to my hon. Friend. I will respond to him and then perhaps I will have answered the question that my hon. Friend the Member for Walsall North wanted to ask. It is right that the regulator must have the right powers in place to deal with breaches of its standards. With regard to competence and conduct, the Bill enables the regulator to require providers to produce and implement a performance improvement plan to be approved by the regulator. If a provider fails to implement a plan, the regulator can issue an enforcement notice and levy an unlimited fine if that notice is not complied with. So the regulator will have teeth to ensure the kind of conduct that we expect. I hope that that answers the question from one hon. Friend.
Eddie Hughes
Anyone who has listened to the Grenfell Tower inquiry—especially the podcast, which provides a great summary of the challenges that were faced—will know that a number of tenants encountered members of staff who simply were not appropriately qualified to carry out their role. As a result, the tenants did not get the experience, support and help that they so rightly deserved. So, while I fully appreciate that it is appropriate to recruit for aptitude—this is a vocational area for many—it is incredibly appropriate to make sure that staff are trained for their role.
Dehenna Davison
I am grateful to my hon. Friend. His expertise on this matter is welcome to all of us, and I thank him for all the work that he did as Minister on this really important body of work. He is right. That is why we have taken this away and are looking at what more we can do around professional qualifications, without that risk of reclassification. I hope that, following Committee stage, I will be able to report on what progress we have made before we reach Report stage.
It is important that we get this process right. We will continue the dialogue that we have already started with key stakeholders such as Grenfell United, Shelter and the CIH before we issue a statutory consultation on the direction itself. The regulator will then also consult on its draft standard before it comes into force. This Committee can be assured of our intent to take on board fully the views of both tenants and providers in developing the way forward. I have already spoken a little about compliance and sanctions if standards are not complied with, so I will leave that point there.
To summarise, the Government’s ambition is to build an empathetic, qualified and skilled social housing workforce. We want to bring about a wholesale organisational and cultural change, which we all recognise is desperately needed. We remain firm in our belief that our approach and the clause will deliver the professionalisation of the social housing sector, but we will of course continue to explore options for qualification requirements that would not trigger reclassification and would deliver the right outcomes for tenants. I commend the clause to the Committee and, on the basis of what I have outlined, I ask the shadow Minister not to move his new clause.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
We welcome the concession made by the Government in the other place on professional training and qualifications, and the resulting inclusion of the clause in the Bill. However, if we are to be certain that this legislation will expedite the professionalisation of the sector, we are absolutely convinced that the Government need to go still further.
As the Minister said, the clause amends section 194 of the Housing and Regeneration Act 2008 by adding a proposed new section allowing the regulator to set regulatory standards on the competence and conduct of social housing managers, and making it clear that such standards may require providers to comply with specified rules relating to knowledge, skills and experience. However, the clause as drafted includes no requirement for those involved in the management of social housing to meet objective professional standards. We therefore agree with, among others, Grenfell United and Shelter, that it therefore risks introducing an insufficiently high bar for registered providers in respect of the professional training that they implement.
New clause 4 seeks to strengthen the Bill in relation to professionalisation by amending section 217 of the 2008 Act, concerning accreditation, to require managers of social housing to have appropriate objective qualifications and expertise.
Sally-Ann Hart (Hastings and Rye) (Con)
On professional qualifications, I completely understand that we need to have properly qualified people overseeing those in social housing and giving them support, but most professions—whether lawyers, accountants, firemen or police—have a professional body. What professional body does the hon. Gentleman propose should be behind social housing, because I do not think that there is one, is there?
Matthew Pennycook
I will touch on that. The Chartered Institute of Housing does a considerable amount of work in this area. For reasons I will come on to, however, the review that it is undertaking perhaps does not go as far as we need in the ways in which we think this legislation must be amended to drive professionalisation along the lines that many groups are calling for.
As I was saying, we think it is vital that those requirements should be put on the face of the Bill. As a result of the progressive residualisation of social housing over the past 40 years, it is now overwhelmingly let to those most in need. According to the latest English housing survey data, half of social renters are in the lowest income quintile, compared with 22% of private renters and 12% of owners; more than half of all households in such tenure have one or more members with a long-term illness or disability; and more than a quarter are 65 or over. We also know—this is certainly the case from my own post bag—that many social tenants find themselves facing intimidation by criminal gangs, domestic abuse and racial harassment, and that a minority are in desperate need of urgent moves to escape serious youth violence. We will return to that point when we debate new clause 1 in the name of my hon. Friend the Member for Dulwich and West Norwood.
As a result of frequently having little voice or power, and because there is a chronic shortage of social housing, tenants have few if any options to move if they receive an unprofessional service from their landlord. They face significant barriers when it comes to challenging poor conditions. We therefore must do more to ensure that those managing the homes of social tenants are properly qualified to do so and that they have undergone the necessary training, for example in anti-discriminatory and anti-oppressive practice, to ensure that they are treating tenants fairly and providing them with the necessary support. We rightly expect those working in other frontline services, such as education and social care, to have the professional qualifications and training necessary to carry out their work effectively, and to undergo continuous professional development. We should expect no less for those managing social homes.
Bob Blackman
The shadow Minister is applying quite a long list of prescriptions, and I think Members on both sides of the Committee would probably agree with much of what he is saying. One of the problems with putting such provisions into the Bill is that they are very difficult to amend at a future time. I accept that what he is proposing now is that regulations “may” be made; I wonder whether a better approach might be for a Government amendment to set out that regulations may be made. The prescription he has put in his new clause could then be made under regulation and, therefore, be easier to amend in the event that matters change. Otherwise, we would have to introduce primary legislation.
Matthew Pennycook
I do not want to engage the hon. Member in a prolonged discussion about “may” and “must”—we had enough of that with his private Member’s Bill. We are open to a discussion about how to proceed, but what we need at this stage is a commitment from the Minister that the Government are going to move on objective professional qualifications and training, rather than leaving the Bill as is. If that requires regulations to be moved in due course, we would be open to that, but let us see what the Government bring back on Report.
We will press our new clause to a vote at the appropriate moment to underscore how strongly we feel that this is one of the areas on which the Government must move by Report stage, to ensure that the legislation is as robust as it can possibly be.
Dehenna Davison
I will keep this brief. I am grateful to the shadow Minister for outlining his concerns, which were mentioned on Second Reading. The commitment I can give is that we are seriously looking at the issue and seeing how far we can go without that risk of reclassification. I appreciate his reasoning behind wanting to push the new clause to a vote; I hope in the meantime that he will be inclined to change his mind before we get to that point.
Question put and agreed to.
Clause 21 accordingly ordered to stand part of the Bill.
Clause 22
Standards relating to information and transparency
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss new clause 9—Application of Freedom of Information Act 2000 to registered providers—
“(1) Within six months of this Act receiving Royal Assent, the Secretary of State must by order designate registered providers of social housing as public authorities for the purposes of the Freedom of Information Act 2000.”
This new clause would bring registered providers of social housing within the scope of the Freedom of Information Act 2000.
Dehenna Davison
It is essential that social housing tenants should be able to access relevant information about their landlords and their homes. Greater transparency will empower tenants and drive providers to improve service delivery. Clause 22 extends the standard-setting powers of the Regulator of Social Housing to cover information and transparency. The clause will enable the regulator to deliver key social housing White Paper commitments, including setting standards relating to the new access to information scheme. We also expect information and transparency standards to include requirements for registered providers to share information on how landlords spend their income, executive pay and breaches of the standards.
When a provider is failing to meet these standards, the clause ensures that the regulator can take strong enforcement steps, including penalties, compensation and requiring changes in the management of the provider. Extending the regulator’s power to set regulatory standards to include standards on information and transparency will empower tenants to hold their landlord to account and strengthen overall consumer regulation.
New clause 9 seeks to require the Secretary of State to extend the Freedom of Information Act 2000 to registered providers of social housing, via statutory instrument, within six months of Royal Assent. I do not believe the amendment is necessary or advisable. The Government have worked closely with stakeholders to agree plans to deliver the access to information scheme for tenants of housing associations and other private registered providers, as promised in the social housing White Paper.
The new scheme will enable tenants of private registered providers and their representatives to request information from their landlords in a way similar to that available under the 2000 Act. It will also impose similar obligations on private registered providers. Tenants of private registered providers will be able to request information from their landlord on anything relating to the management of their homes. The new scheme will be integrated into the regulatory environment, tailored to the needs of tenants, and enforced as part of the regulator’s consumer standards.
If a tenant is unhappy with how a landlord has dealt with their request for information, they will be able to take their complaint to the housing ombudsman. The process will be the same as for other complaints, ensuring ease of use and accessibility for tenants. The ombudsman also has a strong understanding of the social tenant and landlord relationship, and an established relationship with the Regulator of Social Housing. Additionally, local authority providers, which would fall under the new clause, are already subject to the Freedom of Information Act 2000 as public bodies.
Finally, extending freedom of information to registered providers would increase the level of Government control exercised over the sector. We are back to the potential argument around reclassification, which we are keen to avoid. The access to information scheme that we have laid out does not carry the same reclassification risk. On that basis, although I commend the excellent clause, I ask the hon. Member for Greenwich and Woolwich to consider not pressing his new clause to a vote.
Matthew Pennycook
At the outset, I should thank the Greater Manchester Law Centre for its support in drafting the new clause, the purpose of which is to probe the Government’s rationale for not using the Bill to bring registered providers of social housing within the scope of the Freedom of Information Act—other than local authorities, which, as the Minister rightly said, are already subject to it—and to press the Government to reconsider.
As the Minister is no doubt aware, this matter has been a perennial cause of concern. In 2011, the coalition Government announced that they would consult housing associations on bringing them within the scope of the Act; however, no further action was taken—almost certainly as a result of housing associations objecting. The issue resurfaced in the wake of the Grenfell Tower fire as a result of the Information Commissioner’s Office reporting to Parliament that it had experienced difficulties in accessing information relating to social housing and to the Kensington and Chelsea Tenant Management Organisation because the information was not covered by the Freedom of Information Act. The Information Commissioner at the time, Elizabeth Denham, made it clear that
“housing Associations are currently not subject to Freedom of Information Act because the Act does not designate them as public bodies. It is clear to me that this is a significant gap in the public’s right to know”.
We believe that she was right to highlight that gap, which remains to this day.
It is not simply that the public do not enjoy rights that they have never had; in the cases of housing associations that have had local authority stock transferred to their management, tenants and the public have lost freedom of information rights that they previously enjoyed when those homes were under local authority control. As I expected, the Minister has made the case that the issues are addressed by the provisions in clause 22 relating to information and transparency; however, those provisions are limited both in scope and specificity in terms of who may request the disclosure of information—it would appear that only tenants themselves have access to it, while journalists and others would not—and how the scheme will operate in practice.
Eddie Hughes
Perhaps the Minister can clarify this, but I understood that it was not just tenants, but people who were acting on their behalf. Can we confirm that? [Interruption.]
The Chair
Order. There is a Division in the House, so we will have to break for 15 minutes or so. We will resume as quickly as people can get back.
Matthew Pennycook
Before we suspended, the hon. Member for Walsall North pressed me on what he felt was an inaccuracy in my statement that journalists were not covered by the provisions. The Division has given me a chance to look at both the Bill and the explanatory notes. Unless he can find one, I see no mention of tenants or their representatives in the Bill. The provision in question, on page 18 of the Bill, merely states:
“the provision of information to their tenants of social housing”.
If it is the case that tenant representatives, including a broad definition of what that entails—including journalists—can access the information in question, that would be welcome.
However, not only is clause 22 limited to tenants themselves, but it provides no guarantees that an information and transparency scheme will be established. All it specifies is that the regulator “may set standards” for RPs in relation to those matters.
Although we can debate the efficacy of clause 22 in terms of whether the regulator’s ability to set standards relating to the provision of information and transparency will significantly increase RP accountability, it is clear that the clause does not provide for anything akin to that facilitated by the freedom of information regime. As the Information Commissioner’s Office put it, on welcoming the commitment to provide some information to tenants, the scope of the proposed access to information scheme
“appears narrower than FOI in a number of significant ways”.
The arguments against bringing housing associations within the Bill’s scope have been that it would inevitably result in reclassification by the Office for National Statistics and that RPs would be overwhelmed with FOI requests. However, the Scottish Government’s decision to extend coverage of Scotland’s freedom of information legislation to registered social landlords there, following a 2017 consultation—despite opposition from a majority of the housing associations affected—appears to undermine both those counter-arguments. A 2021 report by the Scottish Information Commissioner following the changes made there found that social landlords had responded well to being covered by the legislation, with a significant majority of organisations surveyed making it clear that they were responding effectively, were publishing more information as a result of FOI and were not overwhelmed with requests, with 57% reporting a small impact on staff workload. Importantly, despite being subject to the Freedom of Information Act, Scottish providers remain classified as private non-financial corporations by the ONS.
There are numerous examples from across the country of RPs either ignoring or refusing outright to respond to reasonable requests from tenants for information on a range of issues, including fire safety and health hazards, on the basis that they are not covered by the Freedom of Information Act. I note what the Minister said about tenants’ ability to take such concerns to the housing ombudsman, but we have already discussed what a lengthy and time-consuming process that is. Given that local authority RPs are already covered by FOI, we cannot understand why non-local authority RPs are not brought within the scope of that Act. Given that one of the central aims of the White Paper and the Bill is to engender a culture of transparency and accountability among RPs and that clause 22 is far narrower in scope than FOI, we believe it would be beneficial to the public if housing associations that are not publicly owned are brought within the scope of the 2000 Act. The UK Information Commissioner’s Office agrees, stating as recently as January 2022:
“The ICO believes that housing associations that provide social housing should be covered by the Freedom of Information Act 2000 in the same way as housing provided by local authorities. We believe access to information laws should remain relevant and appropriate to how public services are delivered.”
I hope that the Minister has listened carefully to the arguments about the new clause, in particular the Scottish experience, and I look forward to her response. I will not press the new clause to a Division at this stage. Depending on her reply, we may return to it on Report.
Dehenna Davison
I am grateful to the shadow Minister for outlining his case so coherently. I go back to points that I made earlier. On the point about tenant representatives, it is certainly the intent that they will be able to make those requests on behalf of tenants. In some cases, that could include journalists—the hon. Member specifically commented on them. I hope that provides some assurance about intent. I am grateful to the hon. Member for not pressing the new clause to a Division for now.
Question put and agreed to.
Clause 22 accordingly ordered to stand part of the Bill.
Clause 23 ordered to stand part of the Bill.
Clause 24
Standards relating to energy demand
The Chair
The Government indicated an intention to vote against the Question that the clause stand part of the Bill by tabling an amendment to leave out the clause.
Matthew Pennycook
The proposed tenant satisfaction measures scheme, as outlined in the social housing White Paper and underpinned by the provisions in the clause, has the potential to be an extremely useful tool for tenants, both in gaining a better understanding of their landlords’ performance and in providing feedback that can assist in driving up standards. We support it.
Given the diversity of providers across the social housing sector, however, a sufficient degree of standardisation of the collecting, processing and presenting of the information relating to the new tenant satisfaction measures is crucial. If steps are not taken to ensure a prescribed collection method for obtaining the information in question so that, when published, it allows for rigorous like-for-like comparison, the obvious risk is that the TSM scheme will struggle to facilitate an accurate and fair comparison of performance between RPs, and its use as a means of informing regulation will be compromised. The regulator itself has acknowledged the potential limitations of the scheme, owing to the variation in methods of data collection and sampling across different organisations.
The question, therefore, is what might be done to address those potential pitfalls to ensure that the TSM scheme works as effectively as it can. I will be grateful if the Minister could give us a sense of how the Government believe that a degree of standardisation might be imposed upon the TSM process to facilitate an accurate and fair comparison of performance between providers. Also, she might ask her officials to consider whether it would be appropriate for the Government to commit to asking the regulator to review the method of collecting, processing and presenting the information in question within a certain timeframe, following any directions issued under proposed new section 198C coming into effect.
Dehenna Davison
I will write to the shadow Minister following our sitting to give him further clarity about the clause.
Question put and agreed to.
Clause 27 accordingly ordered to stand part of the Bill.
Clause 28
Surveys
Dehenna Davison
I beg to move amendment 4, in clause 28, page 22, leave out lines 3 to 8 and insert—
“(8) Equipment or materials taken onto premises by virtue of subsection (7) may be left in a place on the premises until the survey has been carried out provided that—
(a) leaving the equipment or the materials in that place does not significantly impair the ability of an occupier to use the premises, or
(b) leaving the equipment or the materials on the premises is necessary for the purposes of carrying out the survey and it is not possible to leave it or them in a place that does not significantly impair the ability of an occupier to use the premises.”
This adjusts the power to leave equipment etc on premises so that it can only be left in a place that significantly impairs the ability of occupiers to use the premises if there is no other place on the premises it can be left which doesn’t impair such use.
The Chair
With this it will be convenient to discuss the following:
Government amendments 5 to 11.
Clause stand part.
Dehenna Davison
The regulator has an existing power to arrange for a survey of a premises where it suspects that a landlord may be failing to maintain the premises in accordance with its standards. The clause takes steps to ensure that those important surveys can take place more promptly by reducing the notice period required from 28 days for landlords and seven days for tenants to 48 hours for both parties. These are minimum requirements, and in the majority of cases the regulator would seek to give more than the minimum notice period, but the changes ensure that the regulator can act quickly in the most serious cases.
The clause also includes a power for the regulator to seek a warrant for entry when necessary, meaning that surveys can take place when required to ensure that the regulator can identify problems and take appropriate action. In the most serious cases, following a survey the regulator will be able to arrange for emergency remedial action to take place, as set out under clause 31, to address an imminent risk to the health and safety of tenants if the provider fails to take action required by the regulator.
Committee members may be aware that we have stipulated in the Bill that equipment or materials can be left on the premises only if it is necessary for the survey or emergency remedial action to go ahead, or otherwise if that does not significantly impair an occupier when using the premises.
Government amendments 4 to 11 are common-sense amendments designed to ensure that regulatory activities do not unnecessarily obstruct or inconvenience residents of social housing. Our changes are slight and intend to strengthen the Bill’s provisions to the benefit of tenants. They require that even if it is necessary to leave equipment or materials on the premises for surveys or emergency remedial action, they must not be left in a way that causes significant inconvenience to occupiers if they can be left in another place where this inconvenience does not occur. This means that thought must be given to minimising the impact of a survey or works on occupiers, including the impact on a tenant’s use of the common parts.
Those small, technical changes are intended to ensure that a survey or emergency remedial action can be conducted, but in such a way that is mindful of the impact on tenants and courteous to them. I commend the amendments to the Committee.
Amendment 4 agreed to.
Amendments made: 5, in clause 28, page 22, line 8, at end insert—
“(9) Where the premises include common parts of a building, references in subsection (8) to the ability of an occupier to use the premises include the ability of an occupier of a dwelling that has use of the common parts to use those parts or the dwelling.
(10) In this section, “common parts”, in relation to a building, includes the structure and exterior of that building and any common facilities provided (whether or not in the building) for persons who occupy the building.”
Where a survey is carried out on premises which include common parts of a building this amendment requires the effect on the ability of occupiers to use their dwellings and the common parts to be considered in determining whether equipment or materials can be left on the premises while the survey is carried out.
Amendment 6, in clause 28, page 22, leave out lines 31 to 36 and insert—
“(5) Equipment or materials taken onto premises by virtue of subsection (4) may be left in a place on the premises until the survey has been carried out provided that—
(a) leaving the equipment or the materials in that place does not significantly impair the ability of an occupier to use the premises, or
(b) leaving the equipment or the materials on the premises is necessary for the purposes of carrying out the survey and it is not possible to leave it or them in a place that does not significantly impair the ability of an occupier to use the premises.”
This adjusts the power to leave equipment etc on premises so that it can only be left in a place that significantly impairs the ability of occupiers to use the premises if there is no other place on the premises it can be left which doesn’t impair such use.
Amendment 7, in clause 28, page 22, line 36, at end insert—
“(5A) Where the premises include common parts of a building (as defined in section 199A), references in subsection (5) to the ability of an occupier to use the premises include the ability of an occupier of a dwelling that has use of the common parts to use those parts or the dwelling.”—(Dehenna Davison.)
Where a survey is carried out on premises which include common parts of a building this amendment requires the effect on the ability of occupiers to use their dwellings and the common parts to be considered in determining whether equipment or materials can be left on the premises while the survey is carried out.
Clause 28, as amended, ordered to stand part of the Bill.
Clause 29
Inspection plan
Matthew Pennycook
I beg to move amendment 16, in clause 29, page 23, line 36, leave out lines 36 to 39 and insert—
“(a) the inspection of every registered provider within four years of the commencement of this Act,
(b) the inspection of every registered provider at intervals of no longer than four years thereafter, and”.
This amendment would ensure that the regulator is required to carry out regular inspections of every registered provider.
Matthew Pennycook
We strongly support the introduction of routine inspections of social landlords. We therefore welcome clause 29. I would like to take the opportunity once again to commend the efforts of Lord Best in the other place and the perseverance of Grenfell United, which ensured that the Bill was strengthened.
Routine inspections of social housing landlords must be central to the new consumer regulatory regime introduced by the Bill if tenants are to have confidence that landlords will be monitored appropriately and deterred from risking breaches that could undermine health and wellbeing. The welcome removal of the serious detriment test in its entirety through the provisions in clause 26 legally allows the regulator to adopt a proactive approach to monitoring and enforcing consumer standards.
In our view, such an approach should be premised on inspections that are at short notice, rigorous, thorough and that include direct engagement with tenants who can highlight issues of concern, thereby helping the regulator determine whether a given provider is meeting the enhanced consumer standards introduced by the Bill.
Clause 29 amends section 201 of the Housing and Regeneration Act 2008, adding a new section 201A to require the regulator to make, and take appropriate steps to implement, a plan for carrying out inspections. The plan must be published, kept under review, and revised or replaced where appropriate. However, the nature of the plan and issues such as the types of RPs that should be subject to regular inspections, the frequency of those inspections, and the circumstances in which RPs should be subject to ad hoc inspections are not prescribed on the face of the Bill, instead being left to the regulator to determine in due course.
While we recognise the need for the regulator to have a significant degree of discretion when it comes to formulating the inspections plan, we believe that the Bill should be more prescriptive in two important respects. First, we believe it is essential that the Bill make clear that all RPs, large or small, will be subject to inspections by the regulator. Secondly, we believe it is essential that the Bill ensures that each RP will be subject to routine inspections.
Amendment 16 seeks to achieve both those objectives by specifying which landlords will be inspected and the maximum duration of time between each inspection they are subject to. It does so by replacing proposed new section 201A(1)(a) and (b) of the Housing and Regeneration Act 2008, as inserted by clause 29—for those following in the Bill, that is lines 36 to 39 on page 23—with a requirement that every RP must be inspected within four years of the commencement of the Act and then inspected at intervals of no longer than four years thereafter.
We believe it is entirely reasonable to detail in the Bill the minimum expectations for the regulator’s inspections plan. The policy paper published alongside the Bill in June made clear that it would enable Ofsted-style inspections of social housing providers by the regulator. The Education Act 2005 that introduced those inspections specified that every school in England would be subject to them and that they would be inspected on a routine basis at least once every three years. Amendment 16 takes that arrangement and applies it to RPs, subject to the enhanced consumer standards introduced by the Bill.
The amendment deliberately does not specify the precise frequency of inspections, merely requiring that they take place at least once every four years—the timeframe proposed by the Government in their 2020 White Paper in relation to the largest landlords. In doing so, the amendment would allow the regulator to determine the precise frequency and nature of individual inspections based on the size of the landlord and its risk profile as determined by means of desktop review.
We believe amendment 16 would preserve the regulator’s operational independence and flexibility when it comes to formulating and implementing the inspections plan now required by clause 29, while strengthening the clause to ensure that key minimum expectations are specified and that tenants can have real confidence in the new inspections regime as a result. I hope the Minister will consider accepting it.
Dehenna Davison
Clause 29 commits the regulator to the delivery of regular inspections by providing it with a duty to publish, and take reasonable steps to implement, a plan for regular inspections. The clause will reinforce the regulator’s commitment to deliver the policy objective set by the social housing White Paper, while ensuring the regulator has the freedom to design the inspections regime following engagement with the sector.
As members of the Committee know, a key part of our efforts to drive consumer standards is the introduction of routine inspections by the regulator for the largest landlords. Inspections will help the regulator to hold landlords to account and intervene where necessary, ultimately driving up the quality of homes and services provided to tenants. That measure is integral to the success of the proactive consumer regime facilitated by the Bill.
However, I cannot accept amendment 16, which seeks to introduce a specific duty for the regulator to conduct inspections of all RPs every four years. As I have said, clause 29 puts the Government and the regulator’s shared commitment to inspections into legislation, through requiring the regulator to publish and take reasonable steps to implement an inspections plan. The clause also ensures that the regulator maintains a level of operational flexibility to allow it to respond on a risk basis to significant developments in the sector.
The regulator is committed to developing a robust approach to inspections, and continues to develop the details of how it will manage consumer inspections via a process of targeted engagement with the sector and social housing tenants. I do not feel that we should bind the regulator’s hands by putting into legislation detailed requirements about inspections that would pre-empt the work it is currently undertaking.
The system of inspections will be based on a risk profile to ensure that those landlords at greatest risk of failing, or where failure might have the greatest impact on tenants, are subject to greater oversight. As part of that provision, the regulator will aim to inspect landlords with more than 1,000 homes every four years. We will, of course, hold the regulator to account to deliver and implement its inspections plan, and the regulator continues to be accountable to Parliament for the delivery of its statutory objectives.
Bob Blackman
Clearly, the providers with the most complaints against them to the regulator will be placed most at risk. In my view, some could be subject to an annual inspection, while providers that are doing a really good job and do not warrant an inspection could be left, although, clearly, if there were complaints, the inspection could be brought forward. Is that my hon. Friend’s understanding of how this will work? Obviously, the regulator will have limited resources to ensure that standards are improved.
Dehenna Davison
Absolutely—this is all about driving up standards. The plan is that the regulator will aim to inspect landlords with over 1,000 homes at least every four years, and those at highest risk could be subject to more frequent inspections. As I say, the regulator is doing detailed work to see how best to implement the measure, and it is important that we let it get on with that work before putting anything into the Bill. On that basis, I hope that the shadow Minister will withdraw the amendment.
Siobhain McDonagh (Mitcham and Morden) (Lab)
I rise to support amendment 16 on the basis of 17 years’ experience of Ofsted. We know that unless a school knows that Ofsted is coming, problems begin. A substantial proportion of outstanding schools that were not inspected for five years have recently been graded as needing improvement. Organisations need to know that somebody is coming, and coming in a reasonable time.
I simply do not understand why we would oppose registered providers being inspected once every four years, or why we would choose to inspect large housing associations but not smaller ones. Are housing associations with 1,000 tenants or fewer not just as susceptible to poor standards, and are those residents not entitled to live under the same inspection regime?
If regulation just requires looking at the paperwork, things can be made to look brilliant. Who here has not been told by their housing provider that it does not have a problem because 80% of tenants say that its repairs system is fantastic? When we dig into the detail, we appreciate how few people respond to customer service requests and just how hard some of our constituents find it to complain or get themselves heard. We need a clear and strong inspection regime.
Eddie Hughes
The hon. Lady makes a valid point. That is why we will do customer satisfaction surveys that have been agreed with the regulator. The format has been agreed. We will be able to compare housing associations and their relative performance in order to drill down and improve that performance. I understand her point, but the Government are making significant strides with the regulator to try to drive up customer and tenant engagement to ensure that we are genuinely getting the opinion of the majority, rather than a minority.
Siobhain McDonagh
That is not possible. We cannot construct a customer survey as emphatic or successful as that, because we have a broad span of residents and tenants, with different lives that determine whether they fill in forms. We as politicians, and people who deliver leaflets and get others to do so on our behalf, know that some people will always respond and others never will, even if, objectively speaking, they need to do so.
Sara Britcliffe (Hyndburn) (Con)
Surely, if a tenant is aggrieved with the process, they are likely to fill in the survey response.
Siobhain McDonagh
I have been an MP for 25 years and a member of the Labour party for 42 years. I am really interested in political communication and getting people to respond. I have to tell the hon. Member that a substantial number of people will never respond, and it is often those who live in the most dire circumstances. If we are serious about improving standards, we need the most structured inspection system that we can afford—I appreciate that it is public money.
I do not deny that anything done in the Bill is a step forward and an improvement, but if we are going to spend public money on behalf of some of our most vulnerable constituents, we want to make it the best-spent money that we can. Let us get it right. We are not starting with a clean piece of paper; we are starting with 17 years of experience with Ofsted and years of experience with the Care Quality Commission. We know a great deal about how inspection regimes work.
Dehenna Davison
On the point about making sure we get the system right, the hon. Lady mentioned public funds, which is clearly a crucial issue. That is precisely why the regime is being designed so that those who are most at risk will be inspected more frequently. That includes not just larger landlords but smaller landlords where there is a clear indication of issues that have been found previously. Inspections can also be done on a more reactive basis. If a report goes to the regulator to suggest that there is a specific issue with a smaller landlord, the risk profile will be there and the landlord could be inspected much more frequently.
Siobhain McDonagh
I am glad that there will be reactive inspections. I am not suggesting that there should not be. What I am saying is that, along with reactive inspections, there should be a regular and rigid routine of inspections. That way, everybody knows that they will have an inspection once during a four-year period. That does not seem to me to be over-regulation, certainly given recent events in social housing stock.
Matthew Pennycook
I have to say that I am slightly disappointed with the Minister’s speech. I am not convinced by her arguments. There is clearly a debate here about how prescriptive we should be in the Bill as to the regulator’s functions. I am convinced that we need to be slightly more prescriptive. I say that for a couple of reasons.
First, my hon. Friend the Member for Mitcham and Morden made a good point on the size of providers. It has certainly been my experience that some of the smaller providers are the most egregious when it comes to standards, partly because they do not face the reputational risk, or the extent of investigations by Members of Parliament or others into their activities, that some of the larger providers do. I do not think the size of providers should play a part in who is inspected.
We think it is important that all providers are inspected within the four-year period. I absolutely agree with my hon. Friend: it is not enough to base a reactive inspections regime, to the extent that that is a part of the process provided by the clause, on surveys or desktop studies alone. We do not leave schools out of the Ofsted inspections process because we are not getting complaints about them. We inspected all schools routinely within a certain period.
Secondly, to the extent that the amendment is prescriptive, I do not think that it is particularly onerous on the regulator. All we are asking for is an inspection within four years of the Bill receiving Royal Assent and every four years thereafter. That four-year timeframe was proposed by the Government in their White Paper; we did not pluck it out of thin air. I think it is entirely reasonable to ask for an inspections regime to take place on that basis. If the regulator needs the resources to carry out those inspections, let us ensure that it has them. However, I struggle to understand why the Government do not feel they can add an element of prescription to the inspections plan in the way that amendment 16 proposes. We will therefore press the amendment to a Division.
Question put, That the amendment be made.
Matthew Pennycook
We welcome the introduction of performance improvement plans as a sensible measure to drive up standards where registered providers are falling short. I would, however, like to raise a few issues in relation to how these plans will work in practice.
We note that the tenant is provided with a copy of the performance improvement plan, which is drawn up where a registered provider has failed to reach a statutory standard for properties under their responsibility, only if the tenant makes a written request for one. Given the strong case for ensuring that all affected tenants know how their landlord is performing and what decisions they are making, we question whether that is sufficient. We note that this matter was also explored during Committee stage in the other place.
In the material it supplied in relation to consideration of the Bill, the Chartered Institute of Housing argued:
“Consideration should be given as to how tenants will be alerted should any poor performance lead to the regulator requiring a performance improvement plan”.
The Local Government Association has also put on record its desire to see the publication of guidance on the regulator’s requirements and timescales for preparing and implementing performance improvement plans.
In the light of these points, I hope the Minister could clarify, either today or in writing—I am happy to take another letter from her—the operation of the provisions in this clause in relation to the following. First, how will tenants be notified if the poor performance of their registered provider leads to the regulator initiating the process of preparing an improvement plan? Will tenants, for example, have the chance to input their views about the problems identified and the measures specified for improvement in these plans?
Secondly, what is the rationale for specifying that tenants can only request a copy of the plan if they require one, rather than being provided with the plan as a matter of course along with any information about what it is, why it came about and what changes they can expect to see as a result—an arrangement that strikes us as more in keeping with the aims outlined in the Government White Paper? Thirdly, is the Minister able to tell us when the guidance on the regulator’s requirements and timescales for preparing and implementing performance improvement plans will be published? Lastly, does the Minister expect that performance improvement plans will be used as a first resort to give underperforming landlords the chance to improve before the regulator considers more punitive measures?
Dehenna Davison
I am grateful to the shadow Minister for his questions. I will follow up in writing and provide some more clarity. Where there is a performance improvement plan in place, the provider is required to publish that, so it will be freely available to tenants and, indeed, to members of the public.
Question put and agreed to.
Clause 30 accordingly ordered to stand part of the Bill.
Clause 31
Emergency remedial action
Matthew Pennycook
I beg to move amendment 17, in clause 31, page 27, line 28, leave out “may” and insert “must”.
This amendment would ensure that emergency remedial action takes place on every occasion where the conditions in subsections (2) to (4) of section 225B inserted by clause 31, are met rather than being discretionary.
Matthew Pennycook
Amendment 17, in my name and that of my hon. Friend the Member for Luton North, is extremely straightforward, and I will therefore be very brief in speaking to it.
Clause 31 relates to emergency remedial action. It amends section 225 of the Housing and Regeneration Act 2008, adding new sections 225A to 225H, which enable the regulator to arrange for an authorised person to take emergency remedial action in instances where a tenant faces an imminent health and safety risk. We strongly support it. The purpose of amendment 17 is simply to ensure that emergency repairs of the kind proposed must take place, rather than may take place—with apologies to the hon. Member for Harrow East, we return to the “may” and “must” distinction—on every occasion where the relevant conditions have been met.
It is worth briefly touching on what those conditions—as set out in proposed new section 225B(2) to (4)—are, because they are stringent, which is why we think that the regulator should be required to act in all instances. For the premises of a social housing provider to be considered appropriate for possible emergency remedial action under clause 31, a survey of its condition must have been completed; the premises must have been found to be improperly maintained; its condition has to have been found to cause an imminent risk of serious harm to the health or safety of the tenants who reside in it or neighbouring residents; and the provider has to have failed to comply with an enforcement notice requiring it to take action to bring the premises up to standard.
Our contention is that any premises managed by any provider found to have satisfied all those tests should automatically receive emergency repairs, rather than merely be considered for them. As such, we think the replacement of the offending “may” with a “must” is vital. I hope the Minister will give the issue considered thought.
Dehenna Davison
It is the responsibility of every registered provider of social housing to ensure that they provide safe and decent housing to their tenants. That means maintaining properties in accordance with the Regulator of Social Housing’s standards and addressing problems issues quickly where problems are identified.
Where a provider cannot or will not address issues that risk the health and safety of tenants, it is essential that the regulator can act. The clause therefore allows the regulator to authorise persons to enter a property and conduct emergency remedial works in cases where failings risk causing serious harm to tenants. For the regulator to do so, it must first conduct a survey of the premises, be satisfied that the provider has failed to maintain the premises in accordance with relevant standards and that the failure poses a serious health and safety risk, and give an enforcement notice requiring those failures to be addressed. If those grounds are met, the regulator may step in and take emergency remedial action. The amendment moved by the shadow Minister would mean that the regulator must take emergency remedial action when the relevant grounds are met.
I have made it clear several times that nothing is more important to the Government than keeping people safe in their homes. Sadly, however, I cannot accept the amendment, because we feel it is essential that the regulator retains the independence and flexibility to determine where it is appropriate to use the power set out in the clause. That reflects regulatory best practice, whereby the regulator has the operational independence to regulate the sector effectively by deciding which of its enforcement powers to use in any given case.
Matthew Pennycook
If a provider has failed all the tests in the clause, what other powers might the regulator use if it did not feel that emergency remedial action was necessary? What other things might it do to address a series of failings that triggered its ability to act along the lines we have discussed?
Dehenna Davison
We have talked, for example, about enforcement notices and possible fines, which are clearly measures available to the regulator. One of the things that we are concerned about at this stage—this has been drawn out at various points today—is binding the hands of the regulator. We do not want to commit it to one course of action.
Maggie Throup (Erewash) (Con)
Does the Minister agree that we are providing the framework for the regulator? As politicians, we should not be telling it how to do its job. If we make the regulations and powers strong enough and give the regulator teeth, whether the word is “may” or “must” becomes irrelevant, because it will take action anyway.
Dehenna Davison
My hon. Friend makes the point extremely well and much more strongly than I did. She is absolutely right. We are setting out the framework of what the regulator can use and will have access to. It will have a full suite of powers available to ensure that it is looking out for tenants and that they are in the best possible housing.
To summarise, we do not wish to bind the hands of the regulator too stringently. We want to give it a suite of powers and the operational independence to choose which powers to use. On that basis, I ask the hon. Member for Greenwich and Woolwich to consider withdrawing his amendment.
Matthew Pennycook
I appreciate the Minister’s concern about binding the regulator too rigidly. I push back slightly against the point made by the hon. Member for Erewash: I think it is wrong to say—the experience of recent years shows this—that just because we give a regulator a power, it necessarily uses it, and certainly not in a proactive way. At this stage, however, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendments made: 8, in clause 31, page 29, line 41, leave out from beginning to end of line 6 on page 30 and insert—
“(5) Equipment or materials taken onto premises by virtue of subsection (4)(b) may be left in a place on the premises until the emergency remedial action has been taken provided that—
(a) leaving the equipment or the materials in that place does not significantly impair the ability of an occupier to use the premises, or
(b) leaving the equipment or the materials on the premises is necessary for the purposes of taking the emergency remedial action and it is not possible to leave it or them in a place that does not significantly impair the ability of an occupier to use the premises.”
This adjusts the power to leave equipment etc on premises so that it can only be left in a place that significantly impairs the ability of occupiers to use the premises if there is no other place on the premises it can be left which doesn’t impair such use.
Amendment 9, in clause 31, page 30, line 6, at end insert—
“(6) Where the premises include common parts of a building (as defined in section 225C), references in subsection (5) to the ability of an occupier to use the premises include the ability of an occupier of a dwelling that has use of the common parts to use those parts or the dwelling.”
Where emergency remedial action is taken on premises which include common parts of a building this amendment requires the effect on the ability of occupiers to use their dwellings and the common parts to be considered in determining whether equipment or materials can be left on the premises while the work is carried out.
Amendment 10, in clause 31, page 30, leave out lines 29 to 36 and insert—
“(5) Equipment or materials taken onto premises by virtue of subsection (4) may be left in a place on the premises until the emergency remedial action has been taken provided that—
(a) leaving the equipment or the materials in that place does not significantly impair the ability of an occupier to use the premises, or
(b) leaving the equipment or the materials on the premises is necessary for the purposes of taking the emergency remedial action and it is not possible to leave it or them in a place that does not significantly impair the ability of an occupier to use the premises.”
This adjusts the power to leave equipment etc on premises so that it can only be left in a place that significantly impairs the ability of occupiers to use the premises if there is no other place on the premises it can be left which doesn’t impair such use.
Amendment 11, in clause 31, page 30, line 36, at end insert—
“(5A) Where the premises include common parts of a building (as defined in section 225C), references in subsection (5) to the ability of an occupier to use the premises include the ability of an occupier of a dwelling that has use of the common parts to use those parts or the dwelling.”—(Dehenna Davison.)
Where emergency remedial action is taken on premises which include common parts of a building this amendment requires the effect on the ability of occupiers to use their dwellings and the common parts to be considered in determining whether equipment or materials can be left on the premises while the work is carried out.
Clause 31, as amended, ordered to stand part of the Bill.
Clauses 32 to 35 ordered to stand part of the Bill.
Schedule 3 agreed to.
Clauses 36 to 38 ordered to stand part of the Bill.
Schedule 4 agreed to.
Clauses 39 and 40 ordered to stand part of the Bill.
Schedule 5 agreed to.
Clauses 41 to 43 ordered to stand part of the Bill.
Clause 44
Short title
Amendment made: 12, in clause 44, page 37, line 10, leave out subsection (2).—(Dehenna Davison.)
This amendment removes the privilege amendment inserted by the Lords.
Clause 44, as amended, ordered to stand part of the Bill.
New Clause 1
Regulator duty to ensure continuity of secure tenancy in cases of threat to safety
“(1) The Housing and Regeneration Act 2008 is amended as follows.
(2) After section 92K insert—
‘92KA Duty to ensure continuity of secure tenancy in cases of threat to safety
(1) This section applies where—
(a) a registered provider of social housing has granted a secure tenancy of a dwelling-house in England to a person (whether as the sole tenant or a joint tenant), and
(b) the registered provider is satisfied that there is a threat to the personal safety of that person or of a member of that person’s household which means there is a risk to their personal safety unless they move.
(2) When subsection (1) applies, the regulator must ensure that the registered provider grants the tenant a new secure tenancy which is–
(a) on terms at least equivalent to the existing tenancy; and
(b) in a dwelling where the threat to the tenant’s personal safety does not apply.
(3) In this section, a “threat to personal safety” means any threat of violence, including in circumstances of—
(a) domestic abuse where the perpetrator does not live at the same address as the victim;
(b) an escalating neighbour dispute;
(c) a threat of targeted youth or gang violence.
(4) In assessing the threat under subsection (1)(b), the registered provider must act in accordance with any relevant police advice provided to–
(a) the registered provider,
(b) the tenant, or
(c) any member of the tenant’s household.
(5) In the event that a registered provider is unable to ensure the provision of an appropriate new secure tenancy pursuant to subsection (2), the regulator must ensure that the registered provider concerned co-operates with other registered providers to ensure an appropriate new secure tenancy is provided in a timely manner.’”—(Helen Hayes.)
This new clause would require the regulator to ensure that tenants whose safety is threatened are granted alternative accommodation by their housing provider on equivalent terms to their existing tenancy. It also requires the regulator to ensure that a provider which is unable to provide appropriate alternative accommodation co-operates with other providers to do so.
Brought up, and read the First time.
Helen Hayes (Dulwich and West Norwood) (Lab)
I beg to move, That the clause be read a Second time.
It is a pleasure to serve under your chairmanship, Sir Edward. The new clause proposes a small but significant amendment to housing law to give additional security to social housing tenants who suffer the consequences of a threat of serious violence. The clause arises from my experience of representing my constituent Georgia, an NHS worker whose teenage son was threatened by gang members. Georgia was a housing association tenant who had lived in her home for nine years. She and her children were happy in their home, which she had recently redecorated—then her neighbours told her that one afternoon, while she was at work, they had heard loud banging on her door. Georgia eventually coaxed out of her son the information that he had witnessed something that local gang members had not wanted him to see, and they had come to her home looking for him. Georgia contacted the police, who told her that she had to move immediately for her family’s safety. She got in touch with her housing association, which told her that it was the council’s responsibility to provide emergency housing. The council placed Georgia and her children in temporary accommodation, which was in another borough, of poor quality and expensive. Georgia’s children did not have enough space, the flat was damp and dirty, it was hard for her children to do their homework and Georgia started to suffer from panic attacks that affected her work.
By the time that Georgia’s friend got in touch with me because she was worried about Georgia’s health and the wellbeing of her children, they had been in the temporary accommodation for six months, and her housing association had started the process of ending her tenancy because she was no longer living in her flat. The consequence of this, in the context of the UK’s housing crisis, would have been Georgia and her children being added to the statistics of homeless households, in temporary accommodation—potentially indefinitely—and at the bottom of the housing waiting list. No one should become homeless because their child is threatened.
In one London borough, 47 housing association tenants—at the time that I did this research, earlier this year—have required homelessness assistance from the council as a result of a threat of violence since 2019. Across the country, that means that thousands of families have had to leave their home each year, with their secure tenancies potentially at risk, on top of having to rebuild their lives in a new area. Homelessness is fundamentally destabilising, involving the loss of a sanctuary and a place in one’s community. It is deeply traumatising to have to make an emergency move because of a threat of violence and start again somewhere else. Our housing system should do everything possible to help families in such circumstances to make the transition to a new, permanent home as soon as possible to limit the harm caused by that threat.
I am delighted that the new clause has the support of both Shelter and the National Housing Federation. Shelter has also highlighted the case of Corey Junior Davis, or CJ, whose mum had asked her housing association for an urgent move after her son had been threatened and told her that he feared for his life. CJ’s mum had done everything possible to keep her son safe, including sending him to stay with relatives in a different area, but six months after her initial request, while they were still waiting for a move, CJ was shot and killed. I have also met several constituents who have sent their children away to keep them safe, because they know what the consequences of an emergency move to temporary accommodation would mean and they fear those consequences. That is not a choice that any parent should have to make.
The new clause would have the effect of requiring social landlords to protect the tenancy rights of secure tenants who have had to move due to a threat of serious violence, and would place a duty on social landlords to co-operate in a situation in which the tenant’s current landlord does not hold stock in an area that is considered safe for the tenant to move to. The threshold for these new duties to be triggered is that the police consider an emergency move to be necessary. Georgia was troubled by what had happened to her son, but it had not occurred to her that she would have to move out of the home that she loved until the police said that that was necessary to safeguard her child’s life. The group of people who would be protected by the new clause are not net additional demand on the social housing system; they are already secure social tenants, and the current social home that they are vacating would of course be returned to the landlord to be let to a new tenant.
There are many reasons why people become homeless due to no fault on their part. The clause will not protect all of them, but I am tabling this new clause for two reasons. The first is that the loss of a secure social tenancy, and effectively going to the bottom of an impossibly long housing waiting list, is far too high a price to pay for being the victim of a threat of violence. Georgia and her children suffered a grave detriment, simply because some violent gang members decided to threaten her son. The second is that serious violence is a scourge on the lives of all those that it affects. Far too many young people are living with the deep trauma of things that they have witnessed or friends that they have lost to knife or gun crime. We have a duty to do everything possible to stop the cycle of violence and the trauma that it causes in our communities. Supporting the victims of threats of violence to regain stability and move on with their lives is one way in which we can do that. Plunging victims into the unstable, often appalling, world of temporary accommodation has the opposite effect. We have the opportunity to change that.
Bob Blackman
Does my hon. Friend—I classify her as my hon. Friend because we have co-operated on so many other things—not accept that one of the problems is the shortage of suitable accommodation? I had a similar event in my constituency: a family was encouraged by the police to seek alternative accommodation, the registered social landlord said, “We don’t have any,” and naturally there was a problem as a result. Does she accept that providing suitable accommodation within a reasonable distance that allows children to go school, perhaps, and the tenant to get to work will be very challenging? I wonder whether she has considered that she is putting the onus on the registered social landlord to provide that. They may not operate within suitable areas, or may not be able to get co-operation from another registered social landlord. Would it not be better to have a range of potential organisations that might provide accommodation in what are, as she said, exceptional circumstances, rather than putting the onus on the registered social landlord?
Bob Blackman
I understand that, Sir Edward, but this is an important issue that merits further explanation.
Helen Hayes
I thank the hon. Member for that intervention. The new clause would impose a duty of co-operation on registered social landlords, which is designed to deal exactly with such a circumstance, where accommodation cannot be found that is safe for the tenant within the area in which the current landlord holds property. These are of course very challenging cases. I have certainly come across constituency cases in which the tenant simply cannot bring themselves to move from their home because the consequences are so dire for them, even when an offer has been made in an area that is considered by the police to be safe for them.
The new clause will not resolve every single circumstance, but in Georgia’s case, when I phoned a senior director in her large registered housing provider she was provided with a new tenancy in a safe borough, and signed that tenancy within a week. With greater will on the part of registered providers, and I believe that placing a duty would prompt that greater will, much more can be done to stop the cycle of violence in our communities.
Matthew Pennycook
I rise briefly to support my hon. Friend’s new clause, Georgia’s law. She made an extremely powerful case for it. I believe that it is sensible and proportionate, and will have a significant impact. I am sure that many hon. Members present have dealt with the kind of cases that she outlined—I certainly have. We are talking about a small but significant minority of tenants in England, but they find themselves, as the hon. Member for Harrow East said, in the exceptional circumstances of a police referral. All the new clause asks for is the protection of their tenancy rights, which should not be lost when they are forced to move, and greater co-operation between registered providers.
It is no surprise that the new clause is supported by organisations such as the NHF and Shelter. I think this is a very strong new clause, and I very much hope that the Government are minded to act on this issue, if not today then on Report. It is a crucial provision and will benefit the lives of many of our constituents.
Dehenna Davison
I am grateful to the hon. Member for Dulwich and West Norwood for tabling the new clause and for her engagement on the issue some weeks ago when we met to discuss it. I am grateful to her for raising the case of Georgia and her boys, and that of CJ. They are both horrendous cases, which give us all food for thought. I thank her for her words on the need to reduce violence more widely. That is something I am incredibly passionate about on a personal level too.
Before I begin, I want to clarify some technicalities. The new clause would provide protection where registered providers have granted their tenants secure tenancies. Secure tenancies are only granted by local authorities, so we will talk to the intention of the new clause, which is I believe around assured tenancies, as well as those in secure tenancies given by local authorities that are registered with the regulator.
We do not expect anyone who is threatened with violence to feel like they cannot move to safety for fear of losing their security of tenure. There are already a number of policies in place that seek to protect people at risk of violence who are in need of urgent rehousing. If a local authority grants a victim of domestic abuse, for example, a new tenancy for reasons connected with the abuse, it is required to give them a secure lifetime tenancy, rather than a tenancy with a fixed term.
Local authorities are also required to give people who need to move for their safety reasonable preference for social housing under section 166A(3) of the Housing Act 1996. Chapter 4 of the statutory guidance encourages local authorities to give additional preference or high priority to those fleeing violence, including intimidated witnesses, those escaping serious antisocial behaviour and people fleeing domestic violence.
By extension, those protections can be applied to private registered providers through duties to co-operate with their local authority in housing people with priority. Most private registered providers let 50% to 100% of their tenancies via nominations from their local authority. The current approach, which considers applicants for social housing on a case-by-case basis, and retains some flexibility, is the most appropriate means of determining whether a household should be granted a new tenancy.
The new clause would have the effect of requiring registered providers to relocate tenants and provide them with a new tenancy agreement. As we know, there are sadly many people with urgent housing needs who need to move immediately—for example, families who are living in conditions that pose a serious risk to their health. Going further than the existing protections by requiring registered providers to prioritise people fleeing violence above others would undermine some of the flexibilities given to housing providers to respond to the specific requirements of those in urgent need of social housing locally.
It is a fundamental right of the landlord to determine who they grant a tenancy to and who lives in their property. Retaining that right is key to registered providers being able to achieve their goal of creating safe and stable communities. It is therefore important to retain some flexibility for social landlords to decide their policy on allocations and who to house. That is integral to the effective functioning of the wider system.
Finally, as I am sure the hon. Member for Dulwich and West Norwood will be aware, we are taking steps to reform tenancy law to protect the security of tenure for social tenants. After section 21 is removed, all tenancies given by private registered providers will have greater security of tenure.
On that basis, I ask the hon. Lady to withdraw the new clause. I am very willing to work with her to see what more can be done in this area to prevent any more cases like that of Georgia and her boys emerging.
Helen Hayes
I thank my hon. Friend the shadow Minister for his support for the new clause. I am grateful to the Minister for her engagement and discussions prior to Committee stage, and for her comments just now. I would be more than happy to work with the Minister to resolve any drafting clarifications and on the intention of the new clause.
The Minister mentioned existing protections, but surely if they were working as they should, cases such as Georgia’s would simply not be arising in their current number. When I first spoke to the local authority that covers the part of my constituency where Georgia was resident, it said that registered providers, housing associations, fall back on the local authority’s duty to provide emergency accommodation. It says that happens all the time, and that there is no regard for what happens to the tenant, given all the destabilisation that comes from a very long time in temporary accommodation.
Certainly in London, on paper the local authority has a duty to provide emergency accommodation and then to rehouse that resident. There is nothing in the priority need criteria, however, that would have given Georgia or her family any significant level of priority need—certainly not a sufficient level of priority, because the violence would not have been taken into account. She was housed with a roof over her head in another borough, where it was thought it was safe for her to be. As it turned out, it was not safe for her, but it was judged to be a borough distant from where the initial threat was made. There was nothing in her circumstances to give her a level of priority band above about band C. She was never going to be rehoused, and because of the consequence of a threat to her son, she went from being a secure tenant in a very stable situation to facing, realistically, an indefinite period of time in temporary accommodation.
I simply do not believe that that situation is fair, and the current system is not functioning as it should. I acknowledge that there are many people who need to move and that our housing system is absolutely full of people who have a pressing and real need to do so. We also have a duty as a society to prevent harm from serious violence, and that is why that additional protection is needed over and above the current protections in law outlined by the Minister. I am happy to withdraw the new clause, but it is my intention to re-table it on Report, when I will divide the House if there is insufficient evidence of progress, because I strongly believe that this needs to get on the statute book. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 4
217A Professional qualifications and other requirements
“After section 217 of the Housing and Regeneration Act 2008 (accreditation) insert—
‘217A Professional qualifications and other requirements
(1) The Secretary of State may, by regulations, provide that a person may not engage in the management of social housing or in specified work in relation to the provision of social housing unless he or she—
(a) has appropriate professional qualifications, or
(b) satisfies specified requirements.
(2) Regulations specifying work for the purpose of subsection (1) may make provision by reference to—
(a) one or more specified activities, or
(b) the circumstances in which activities are carried out.
(3) Regulations made under this section may, in particular, require—
(a) the possession of a specified qualification or experience of a specified kind,
(b) participation in or completion of a specified programme or course of training, or
(c) compliance with a specified condition.
(4) Regulations may make provision for any of the following matters—
(a) the establishment and continuance of a regulatory body;
(b) the keeping of a register of qualified social housing practitioners;
(c) requirements relating to education and training before and after qualification;
(d) standards of conduct and performance;
(e) discipline and fitness to practise;
(f) removal or suspension from registration or the imposition of conditions on registration;
(g) investigation and enforcement by or on behalf of the regulatory body, and appeals against the decisions or actions of the regulatory body.’”—(Matthew Pennycook.)
This new clause would require managers of social housing to have appropriate qualifications and expertise.
Brought up, and read the First time.
Question put, That the clause be read a Second time.
Matthew Pennycook
I beg to move, That the clause be read a Second time.
This is, quite consciously, a probing amendment. As a result of the Regulation of Social Housing (Influence of Local Authorities) (England) Regulations 2017, the amount of local authority influence over private registered providers was reduced through the loss of local authority voting rights and restrictions on the percentage of officers a local authority may nominate as board members. The rationale for that reduction of influence was that it was necessary for the Government to relinquish sufficient control to allow the Office for National Statistics to reverse its 2015 classification of housing associations into the public sector following the Cameron Government’s decision to force registered providers to cut social sector rents by 1% a year for four years, with all that that entailed for the ability of social landlords to fund essential services, spend on repairs and maintenance, carry out retrofit work and build new social homes. If you recall, Sir Edward, it was done as a means of slashing the housing benefit bill.
Dehenna Davison
As the shadow Minister rightly outlined, new clause 5 seeks to ensure representation of tenants and councillors on the board of registered providers. While I agree with the sentiment behind the amendment—that we must ensure that the voice of social housing tenants is heard loud and clear in matters that affect them—I am afraid I must disagree that it is the best approach to take.
Tenants speak from their lived experience, which can bring a different and valuable perspective to that of other board members. They should be listened to at all stages of decision making. However, we do not think that mandating the inclusion of a tenant board member is necessarily the best way to achieve that aim.
Eddie Hughes
I have some experience of this, having been a councillor representative on the board of Walsall Housing Group at a time when it was a prescribed position. I distinctly remember a couple of instances prior to my being on the board when the Conservative spot was decided by random voting or people having been coerced into filling it. That seemed completely inappropriate.
When I became chair of the board of that group, we took a different view—to adopt a skills-based approach, determining that some of the skills would be best met by those who had experience of being a tenant. It was not prescribed that we were saving places for tenants; it just became a natural order of business that they would have the appropriate skills and experience to fill some of the vacancies on the board. Speaking from personal experience, too prescriptive an approach can sometimes lead to unintended consequences: people filling a place just because they need somebody under a certain heading to fill it.
Dehenna Davison
I thank my hon. Friend for setting out his own experience. It is an area the Government are very concerned about, and it comes back to the Committee’s debate today about how prescriptive we should be in the Bill.
Some housing providers already have tenants on boards, and they have been effective in championing residents’ voices, but this is not the case for everyone. Tenant board members are required to put their legal duties as a board member before their role as the representative for residents, which can cause confusion and conflict. Other structures can be just as successful and involve a more diverse range of tenants in decision making. That can range from formal consultations, focus groups and local events to appointed board observers and membership of panels focused on scrutiny, procurement or complaints that feed in at all stages of the decision-making process. We want to retain a flexible approach that promotes tenant empowerment and engagement for all tenants without forcing the statutory duties of a board member on a single individual.
The Regulator of Social Housing already sets standards for the outcomes that landlords must achieve in respect of tenant engagement. It will review, consult and update them as part of the new consumer regulation regime. The regulator will also ask landlords to demonstrate how they engage with tenants and require them to report on tenant satisfaction measures, as part of their assessment and inspection of landlords in the new regime. That is important because for the first time it makes tenants’ experiences a measure by which housing providers will be judged and held to account by the regulator.
There will also be improved transparency measures for tenants to be able hold their landlord to account. They need to know how it is performing and what decisions it is making. That information needs to be easily available. Earlier today we touched on the access to information scheme that we will introduce. That will enable tenants of private registered providers to request information from their landlords.
In addition, we have made funding available for a residents’ opportunities and empowerment programme, which will provide training to residents across the country on how to engage effectively and hold landlords to account. I hope that I have provided enough reassurance for the shadow Minister to withdraw his new clause.
Matthew Pennycook
I thank the Minister for that useful response and the hon. Member for Walsall North for his contribution. The Minister touched on an interesting issue when exploring the details of the Bill before today. There is not only potential for confusion but potential conflict about the role of a board member, particularly in the case of an elected councillor.
I was interested to read when looking into the death of Awaab Ishak that two councillors were removed by the board of Rochdale Boroughwide Housing for drawing attention to their concerns about buildings being pulled down—I am not saying that was anything specifically related to his death, but it related to concerns they had about a particular decision by the provider that was in conflict with their role.
In general terms, I understand the concern about being too prescriptive. This area should perhaps be kept under review. Whether it is best practice by some registered providers, guidance or whatever it might be, it is important to keep under review how to ensure that we can get the most representative and effective board of registered providers. As I said, this is a probing new clause. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 6
Standards relating to consumer matters
‘(1) Section 193 of the Housing and Regeneration Act 2008 is amended as follows.
(2) In subsection (2)—
(a) after paragraph (d) insert—
“(da) major repair or improvement works,
(db) estate regeneration,
(dc) service charges,”
(b) after paragraph (ga) insert—
“(gb) advice and assistance in relation to the prevention of homelessness,”
(c) after paragraph (h) insert—
“(ha) provision for urgent transfer of tenancies in relation to tenants affected by domestic abuse or other violence”’.—(Matthew Pennycook.)
This new clause would allow the regulator to set standards in relation to major repair or improvement works, estate regeneration, service charges, homelessness prevention, and urgent moves for residents at risk of violence.
Brought up, and read the First time.
Matthew Pennycook
I beg to move, That the clause be read a Second time.
In rising to speak to the final new clause, I thank hon. Members for their indulgence. They have listened to me a lot today.
Matthew Pennycook
Absolutely right.
We finish with an important new clause. It relates to what comes under the rubric of consumer standards as defined by the Bill. Since its initial publication in June, the Bill has been improved in several important respects. Today we have urged the Government to go further in relation to some areas and we will continue to do so, but we welcome the introduction of the consumer standards in relation to safety, transparency, competence and conduct.
However, there are other matters of real importance to social tenants that the Bill, as drafted, does not extend new consumer standards to. They include major repairs or improvement works, estate regeneration, service charges, advice and assistance in relation to the prevention of homelessness and urgent moves resulting from the risk of domestic abuse or serious violence.
New clause 6 simply seeks to ensure that the regulator has the freedom to set standards for registered providers in respect of each of those areas of housing management by amending section 193 of the Housing and Regeneration Act 2008 to include them within the scope of what is considered a consumer matter.
There is arguably a need for the regulator to carry out a thorough consultation about consumer standards to better understand what housing management issues currently matter most to tenants. However, we know both from organisations providing housing support, guidance and expert advice services and, I would argue, from our own postbags, that the issues covered by new clause 6 are important to tenants. There is an arguable case for placing them in the Bill to at least allow the regulator, which has probably consulted and developed them, to set consumer standards in relation to some of these issues at a later date. I look forward to the Minister’s response.
Dehenna Davison
As the shadow Minister outlined, the new clause seeks to amend the Regulator of Social Housing’s powers to set consumer standards in a number of ways. All the issues that he raised are important. Although I cannot accept the amendment, I will seek to address the issues raised in turn.
On major repairs and improvements, all social housing landlords should be delivering decent social housing and prioritising repairs and improvements that need to be made to ensure that housing is up to standard. The regulator is already able to set standards relating to the nature, extent and quality of accommodation, and the facilities and services, provided. That can include specified rules about maintenance, which would cover major repairs.
The regulator’s current homes standard already requires registered providers to provide a repairs and maintenance service that meets the needs of tenants, with the objective of getting repairs and improvements right the first time. The regulator will consult on and revise the standards following the passage of legislation and the issuance of Government directions.
On estate regeneration, let me be clear that I agree that landlords should be adequately planning for major regeneration projects and delivering planned maintenance. However, including that area as part of the regulator’s standard-setting remit is not necessary. As I have noted before, the regulator already has the powers required to set standards required relating to maintenance and repairs. Those standards apply to all homes, regardless of whether they are part of a regeneration project.
Existing legislation also enables the regulator to set standards relating to the contribution of landlords to the environmental, social and economic wellbeing of the areas in which their property is situated, which relates closely to the intended outcomes of regeneration projects. The regulator already sets expectations about neighbourhood management in its consumer standards and will be consulting on revised expectations under the proposed new standards, once the Bill has been passed.
It remains the responsibility of landlords to effectively manage their stock and deliver decent housing for their residents. We believe that a specific standard-setting power for regeneration is unnecessary. Effective asset management is already a focus of the in-depth assessments that the regulator conducts, which mean that landlords have to demonstrate to the regulator that they are able to maintain adequate levels of investment in the homes that they are responsible for.
I turn to service charges. The Government’s policy statement on rents for social housing encourages registered providers of social housing to keep any service charge increases within the consumer prices index plus 1% per year—the current limit on annual increases in social housing rents—in order to help ensure that charges stay affordable. Following our recent consultation on social housing rent increases, the Chancellor announced as part of his autumn statement that the Government will cap the increase in social rents at a maximum of 7% in 2023-24. In line with the proposal set out in our consultation, we will amend the policy statement to encourage providers to apply the 7% limit to any service charge increases in 2023-24.
Our policy statement also states that tenants should be supplied with clear information on how service charges are set; in the case of social rent properties, providers are expected to identify service charges separately from the rent charge. The new clause is not necessary to facilitate the regulator’s requiring that transparency from providers.
Furthermore, service charges are already governed by legislation in the Landlord and Tenant Act 1985, which states that service charges can be charged only to the extent that they are reasonably incurred and that enforcement of that is via the courts. Consequently, it is not appropriate or necessary to add to the Bill a specific standard-setting power relating to service charges.
I move on to the issue of homelessness. Let me be crystal clear: the Government are committed to preventing homelessness, and I commend my hon. Friend the Member for Walsall North on the incredible work he did on that as a Minister. Since the introduction of the Homelessness Reduction Act 2017, more than half a million households have been supported into secure accommodation. We are investing £2 billion over the next three years into addressing homelessness and rough sleeping, and in September we published our bold new strategy “Ending rough sleeping for good”. We have also provided £316 million this year for the homelessness prevention grant, which local authorities can use flexibly to meet their homelessness objectives—including to work with providers to prevent evictions.
I am not in a position to accept the new clause, as I believe the existing legislation is sufficient to achieve the outcome that the hon. Member for Greenwich and Woolwich is seeking. The regulator’s existing tenancy standard already requires social landlords to develop and provide services that will support tenants to maintain their tenancy and prevent unnecessary evictions. The regulator’s standards will be consulted on and updated following the passage of legislation and the issuance of Government directions. Consequently, homelessness prevention is already a priority for providers; the regulator plays a vital role in support.
I move on to the urgent transfer of tenancies in cases of domestic abuse and violence. Again, to be absolutely clear we do not expect anyone who is threatened with violence to feel that they cannot move to safety for fear of losing their security of tenure. A range of measures are therefore already in place to protect people at risk of violence and in need of urgent rehousing, some of which I have already outlined that in earlier contributions.
Chapter 4 of the statutory guidance encourages additional preference to be given to those fleeing violence, including people fleeing domestic violence, and private registered providers have a role in housing such people through their duties to co-operate, as I outlined earlier.
I will not rehash any more of the arguments that I made in response to the hon. Member for Dulwich and West Norwood and her new clause 1. However, I should add that in schedule 5 to the Bill, we are already amending the regulator’s standard-setting powers to include policies and procedures in connection with behaviour that amounts to domestic abuse within the meaning of the Domestic Abuse Act 2021.
For all the reasons I stated, I do not believe that the amendments to the regulator’s standard-setting powers are necessary. I ask the hon. Member for Greenwich and Woolwich to withdraw his new clause.
Matthew Pennycook
I thank the Minister for that response. I am somewhat reassured by it, to the extent that she has laid out—in considerable detail, in some cases—the ways in which some of the issues of concern flagged in the new clause are appropriately covered by the standards, guidance, policies and procedures. My reservation is about whether those existing processes have the effect that would be achieved by allowing the regulator itself to set standards and consumer standards.
Given how complex an issue this is, I will take away the Minister’s response and look at it in more detail, but I reserve the right to come back to the issue on Report. We think it is important that some of these real issues of concern to tenants be given due consideration when it comes to whether they are brought within the new regulatory regime to be established by the Bill. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
Question proposed, That the Chair do report the Bill, as amended, to the House.
Dehenna Davison
I have my Oscars-style speech of thanks to give before we finish today. First, a huge thank you to you, Sir Edward, for chairing the Committee so successfully and professionally, and for keeping us all in check. We are MPs; we always need someone to keep a good gaze over us to ensure that we are behaving.
I thank all members of the Committee for a constructive debate. One of the most reassuring things has been that there is such cross-party consensus in recognising that the Bill is absolutely needed and that we can all very much get behind its aims.
I thank the Clerks for their stellar work and my officials, who have been brilliant at speedily giving me all the information that I need. I thank the fabulous Whip, my hon. Friend the Member for Hertford and Stortford, again for keeping us in check on the Government Benches.
I also say a huge thank you to Grenfell United, Shelter and others for their engagement on this important legislation. As the Minister, I feel grateful to have had the opportunity to take the Bill through Committee. I look forward to its coming back on Report; as I said, I will engage with Members before that point.
In my final breath, I say a massive good luck to both teams tonight. I am sure most people know which one I am supporting.
Matthew Pennycook
Briefly, Sir Edward, I thank you for your chairmanship of the Committee and the Clerks for all their work to prepare us. I thank the Minister for the constructive tone in which she approached the debate, and all hon. Members for the considerable amount of expertise and insight put forward in our debates. I, too, thank all the organisations, not least Grenfell United, that sent us their views and engaged with us on what they see as important in how the Bill could be strengthened.
As I said at the start, the Bill is uncontroversial and we welcome the vast majority of measures. We want to see it strengthened and we have made the case for that today. We will continue to make the case on Report for those areas of the Bill where we want to see further improvement, but I am glad that it can make swift progress to its next stage.
The Chair
I thank you for being so expeditious. My fellow Chair, who is a Scot Nat, has had an easy ride.
Question put and agreed to.
Bill, as amended, accordingly to be reported.
Social Housing and Regulation Bill [ Lords ] (First sitting)
(2 years ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chair
We are now sitting in public and the proceedings are being broadcast. Hansard colleagues will be grateful if Members could email any speaking notes to hansardnotes@parliament.uk. All the normal rules apply.
Today, we will consider the programme motion on the amendment paper and then a motion to enable the reporting of written evidence for publication. I am sure we can take those matters formally, without debate. I first call the Minister to move the programme motion standing 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 29 November) meet—
(a) at 2.00 pm on Tuesday 29 November;
(b) at 11.30 am and 2.00 pm on Thursday 1 December;
(c) at 9.25 am and 2.00 pm on Tuesday 6 December;
(d) at 11.30 am and 2.00 pm on Thursday 8 December;
(e) at 9.25 am and 2.00pm on Tuesday 13 December;
(2) the proceedings shall be taken in the following order: Clauses 1 to 13; Schedule 1; Clause 14; Schedule 2; Clauses 15 to 35; Schedule 3; Clauses 36 to 38; Schedule 4; Clauses 39 and 40; Schedule 5; Clauses 41 to 44; new Clauses; new Schedules; remaining proceedings on the Bill;
(3) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 pm on Tuesday 13 December.—(Dehenna Davison.)
Resolved,
That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.—(Dehenna Davison.)
The Chair
Copies of written evidence that the Committee receives will be made available in the Committee Room and circulated to Members by email.
We will now begin line-by-line consideration of the Bill. A selection and grouping list for today’s sittings is available in the room. It shows how the clauses and selected amendments have been grouped for debate. Amendments grouped together are generally on the same or similar issues. Please note that decisions on amendments do not take place in the order they are debated, but in the order that they appear on the amendment paper. The selection and grouping list shows the order of debates. Decisions on each amendment and on whether each clause should stand part of the Bill are taken when we come to the relevant clause.
A Member who has put their name to the lead amendment in a group is called first. Other Members are then free to catch my eye to speak on all or any of the amendments in that group. A Member may speak more than once in a single debate. At the end of the debate on a group of amendments, I shall call the Member who moved the lead amendment again. Before they sit down, they will need to indicate whether they wish to withdraw the amendment or to seek a decision on it. If any Member wishes to press another amendment in the group to a vote, they will need to let me know in advance.
Clause 1
Fundamental objectives
Matthew Pennycook (Greenwich and Woolwich) (Lab)
I beg to move amendment 13, in clause 1, page 1, line 5, at end insert—
‘(aa) after paragraph (a) insert—
“(aa) to ensure the provision of care and support services in supported exempt accommodation and in temporary accommodation are adequate, well-managed, safe, and of appropriate quality,”’.
This amendment would ensure that support services provided to residents of supported exempt accommodation and temporary accommodation for those properties that already fall within consumer regulation are adequate and of an acceptable quality.
The Chair
With this it will be convenient to discuss new clause 8—Standards relating to supported and temporary accommodation—
‘(1) The Housing and Regeneration Act 2008 is amended as follows.
(2) In section 192 (Overview)—
(a) in paragraph (a), after “social housing” insert “, supported exempt accommodation and temporary accommodation”
(3) In section 193 (Standards relating to consumer matters)—
(a) in subsection (1), after “social housing” insert “or accommodation to which subsections (1A) to (1D) applies”
(b) after subsection (1) insert—
“(1A) The Secretary of State, after consultation with the regulator, may by order bring into consumer regulation accommodation managed or in the control of a registered provider that falls within subsection (1C) or subsection (1D).
(1B) An order under subsection (1A) may apply to either subsection (1C) or (1D) only or to both and orders commencing either can be made separately at different times and for any part of England.
(1C) The accommodation to which this subsection applies is supported exempt accommodation as defined by regulations under subsection (1E).
(1D) The accommodation to which this subsection applies is temporary accommodation as defined by regulations under subsection (1E).
(1E) The Secretary of State may by regulations set out the classes of accommodation that fall within subsection (1C) or subsection (1D) and may define each class by reference to the Housing Benefit Regulations 2006 or the Universal Credit Regulations 2013.”
(c) in subsection (2), after paragraph (2)(d) insert—
“(da) standards relating to supported exempt accommodation or temporary accommodation,”’.
This new clause would ensure that providers of supported exempt accommodation and temporary accommodation who are registered with the regulator and charge market rents covered by housing benefit are brought within the scope of the new consumer regulatory regime.
Matthew Pennycook
It is a pleasure to begin our line-by-line consideration of the Bill with you in the Chair, Sir Edward, and in a Committee with a considerable amount of housing expertise, which I hope will put us in good stead for further improving the Bill. The Opposition have consistently maintained that the Bill is uncontroversial legislation, and we welcome it and the measures it contains.
We desperately need to build more social homes, but we also need to ensure that our existing stock is of good quality and well managed. Almost half a million social homes fail to meet the Government’s decent homes standard and, as that standard is not a requirement, it is almost impossible to enforce.
The Regulator of Social Housing can and does react to systemic failings among registered providers—for example, the request for evidence issued in relation to damp and mould following the coroner’s report into the death of two-year-old Awaab Ishak in 2020—but at present it has no proactive way of regulating consumer standards. The spotlight of media attention, tenant campaigning or intervention by individual hon. Members should not be required to trigger the appropriate response to substandard conditions in social housing, yet that is all too often the case.
To ensure that tenants are properly protected by a robust, effective system of regulation, major reform is needed. Indeed, it is long overdue, and the Secretary of State was right to concede, in the wake of Awaab’s untimely death, that the Government have been too slow to toughen regulation in this area.
Despite its limited number of clauses, the Bill is therefore of real significance for millions of social housing tenants across the country. That is why the Opposition regret how long it took the Government to bring it forward, and it is why we want to see it on the statute book as soon as possible. To that end, we want to see the Committee to sit no longer than is absolutely necessary. However, we are determined to see the Bill strengthened in a number of areas, so that standards in social housing markedly and rapidly improve, tenants are able in practice to pursue and secure effective redress, the collective voice of tenants is heard more audibly and they have a greater role in shaping national policy, and we are better able to respond to pressing issues affecting some of those living in social housing, such as serious violence.
We owe it to the bereaved and the survivors of Grenfell, Awaab’s family and all those social tenants currently living in appalling conditions to pass the most robust legislation that the House can possibly deliver. To that end, we have tabled a limited number of amendments in key areas, the intention of which is to persuade the Government to reflect sincerely on how the Bill might be improved still further. Although we intend to work constructively with Ministers to secure the Bill’s speedy passage out of Committee, we expect the Government to give serious consideration to the arguments that we make in respect of those amendments.
Amendment 13 and new clause 8 relate to supported exempt accommodation and temporary accommodation. The new clause would provide the Secretary of State with the power to bring properties let at market rents by non-profit making providers of supported exempt or temporary accommodation registered with the regulator into the scope of consumer regulation. It would allow Ministers to do so at a time of their choosing and on an area-by-area basis as required. The amendment would extend the regulator’s fundamental objectives to the care and support services provided by supported exempt and temporary accommodation in relation to properties that already fall within the scope of consumer regulation.
I want to be clear at the outset that these proposals do not seek to extend the scope of the regulatory framework provided for by the Bill to all non-registered supported exempt and temporary accommodation providers in a way that could place unreasonable burdens on the regulator. Rather, they would apply only to those landlords who are registered, or entitled to register, with the regulator as non-profit making providers because they let some properties at below market rents—that is, social housing.
The purpose of these two related proposals is to address an existing loophole that, unless addressed, will remain a problematic gap in the consumer regulatory regime after the Bill has come into force. It is that non-profit making providers of supported exempt or temporary accommodation can let properties at market rents that are eligible for housing benefit support on the basis that “more than minimal” care, support or supervision is being provided, without those properties coming within the scope of consumer regulation.
We know that the regulatory gap is currently being exploited by unscrupulous providers. The three biggest registered providers of non-commissioned exempt accommodation in Birmingham last year, Reliance Social Housing CIC, Ash-Shahada Housing Association Ltd and Concept Housing Association CIC, received £159 million in housing benefit payments for 16,370 market rent properties that fell outside consumer regulation. They were able to operate those properties free from the fear of intervention on consumer standards grounds, because they collectively operate 310 properties—in Reliance’s case, it is just six—at below market rents.
As a result of the regulator being unable to enforce against poor performance by providers in relation to market rent properties that they operate on the basis of consumer standards, the regulator can enforce against bad practice in such cases only on grounds of economic viability. It has done so—for example, it found the large, Birmingham-based Reliance to be non-compliant with the governance and financial viability standard in October last year. However, Opposition Members struggle to understand why the Government have not enabled the regulator to take action against supported exempt and temporary accommodation providers letting units at market rents who fail to meet expected standards, using the tools provided for by the new proactive consumer regulatory regime introduced by the Bill, given that permitting it to do so would simply provide an additional weapon in the regulator’s arsenal when it comes to clamping down on unscrupulous providers.
It is true that clause 8(d) tightens the definition of what constitutes a non-profit making provider. That should help to ensure that some of the most flagrant abuses, such as out-of-balance portfolios, can be clamped down on. However, it will not end all instances of rogue providers gaming the system by letting some properties at below market rents, registering as non-profit making providers on that basis, and then operating far larger numbers of substandard market rent properties outside the scope of consumer regulation. For example, those with more balanced portfolios—presumably even if that were achieved on the basis of a split of 51% of properties let non-profit and 49% for profit—will escape the provisions of clause 8 that I just referred to.
We recognise that the Government support, as we do, the Supported Housing (Regulatory Oversight) Bill introduced by the hon. Member for Harrow East. I am pleased that the hon. Gentleman is on the Committee with us. His Bill will enhance local authority oversight of supported housing and thereby enable local authorities to drive up standards in their areas. However, it does not contain provisions to close the particular loophole that is the focus of amendment 13 and new clause 8. As such, if the Government do not accept our amendments or bring forward their own to tackle the loophole in question, enforcement action on the part of the regulator in these cases will be confined to matters of economic regulation.
One element of our concern about the gap in the proposed consumer regulatory regime that the amendments seek to address is that, once the hon. Gentleman’s Bill has received Royal Assent, rogue providers of supported exempt accommodation will be incentivised to exploit this loophole further, as it will be one of the last remaining loopholes because their operations will be hampered by the range of measures in the hon. Gentleman’s Bill. Using the Bill before us to address the issue of supported exempt and temporary accommodation landlords who are already partially regulated would also close down the loophole more quickly than would be possible by doing so through the Supported Housing (Regulatory Oversight) Bill, because it will be some time before that Bill is in Committee, and the detailed regulations required to give it full effect will take some time to be passed.
If the Government were persuaded of the merits of the argument underpinning amendment 13 and new clause 8, they could determine to deal with supported exempt accommodation and temporary accommodation separately. We ultimately decided that the amendments should cover both, because there is good evidence to suggest that the loophole is being increasingly exploited by private temporary accommodation providers, in particular those providing nightly paid temporary accommodation, who often describe themselves as social landlords but who are exempt from consumer regulation in relation to substandard properties they let at market rents at great cost to the taxpayer.
Dealing with supported exempt accommodation and temporary accommodation together is also an attempt to pre-emptively address the scenario in which the Government accept that properties let at market rents by registered non-profit making providers of supported exempt accommodation should be covered by consumer regulation and legislate to that end, but, by setting aside market rent temporary accommodation let by registered non-profit providers, ensure that that becomes an obvious target for rogue providers seeking to escape consumer regulation standards.
I appreciate fully—I expect that the Minister will respond along these lines—that the Government will be reluctant to re-open at this stage of the Bill’s proceedings what and who falls within the ambit of the new consumer regulatory regime, but surely they cannot believe that the Bill as drafted ensures that support services beyond general management that are provided to residents of supported exempt and temporary accommodation will be of acceptable quality, or that non-profit making registered providers can simply ignore consumer standards when it comes to those properties let at market rents eligible for housing benefit support.
The issues that are the subject of these two amendments will need to be addressed if the Government are serious about clamping down on rogue providers who take public money while failing vulnerable people. I hope that the Minister can signal that the Government are minded to act either by accepting the amendments or by bringing forward their own in due course.
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Dehenna Davison)
It is a pleasure to serve under your chairmanship today, Sir Edward. I am incredibly grateful to the shadow Minister, the hon. Member for Greenwich and Woolwich, for the constructive way he has embraced this debate, for the Opposition’s broad support for the Bill, and for his commitment to ensuring that the regulator is as robust as it can be. On that point, we have certainly found some early agreement.
As the hon. Member outlined, amendment 13 would extend the remit of the regulator to the care and support provided to residents in supported exempt accommodation and temporary accommodation, while new clause 8 would extend the remit to those types of accommodation when they are not social housing but are held by a registered provider.
Temporary accommodation and supported housing that meets the definition of social housing is already regulated under the regulator’s standards, and the Care Quality Commission already regulates the provision of personal care in supported housing. The support needs of people in supported housing are wide, varied and often complex compared with those living in general needs accommodation. That is why we are supporting targeted measures in the Supported Housing (Regulatory Oversight) Bill, introduced by my hon. Friend the Member for Harrow East, to tackle the issues we are seeing in supported housing. I echo the shadow Minister’s comments; I am very grateful that my hon. Friend is bringing his incredible expertise to the Committee.
While there are many excellent supported housing providers, the Government recognise that there are some rogue supported housing landlords. Let me be completely clear for the record: any abuse of the supported housing system will not be tolerated. The Supported Housing (Regulatory Oversight) Bill will introduce national standards to be applied to supported housing and to give local authorities new powers to introduce licensing schemes and other enforcement powers.
Temporary accommodation is a key safety net for homeless households in this country. The homelessness code of guidance is clear that, at a minimum, temporary accommodation must be free from all category 1 health hazards, as assessed by the housing health and safety rating system, and it must be suitable for all members of the household. Households have the right to request that the council reviews the suitability of their accommodation.
Siobhain McDonagh (Mitcham and Morden) (Lab)
On temporary accommodation for homeless families and the code of guidance, who enforces the code? Who knows whether councils are living up to it? Who inspects the accommodation with a third eye to see whether it meets the standards?
Dehenna Davison
I will follow that up with the hon. Member in writing after our sittings today.
Dehenna Davison
As I have just outlined, I will write to the hon. Member to pick up her point following today’s sittings.
The focus of the Regulator of Social Housing is on regulating the standards for registered providers of social housing. I believe that the regulator should remain focused on that vital role, and that greatly expanding its scope to include temporary accommodation could be a significant risk to its expertise. I do not believe that expanding the scope of the regulator into those areas, as proposed by the amendments tabled by the hon. Member for Greenwich and Woolwich, is the right way to address them. The regulator should continue to focus on ensuring that registered providers provide safe and high-quality social housing for tenants and on delivering the new consumer regime.
On that basis, I ask the shadow Minister to consider withdrawing his amendments today, but with a commitment from me to follow up with him before Report to see whether anything more can be done.
Bob Blackman (Harrow East) (Con)
It is a pleasure to serve under your chairmanship, Sir Edward. I thank the Minister and the shadow Minister for their compliments about me and my Bill. No doubt we will be debating it in one of these Committee Rooms in the not too distant future.
One concern about the position on supported housing is the number of regulators that get involved already. There is almost a confusion of regulation. There is another problem: as we legislators seek to plug gaps, the rogue landlords seek alternative ways of making huge amounts of money. We already know that nearly £1 billion in housing benefit was paid out last year on supported housing in exempt accommodation. Clearly, that was for people who are vulnerable and need help and support. They are from a wide variety of different backgrounds. They might be recovering drug addicts; they might be people who became temporarily homeless or people who have had mental or physical health problems. I could go through a long list of people, but they are vulnerable and need help and support.
However, I have a concern about the proposed amendments. They seek to plug a gap, but are they comprehensive enough? We need more discussion to make sure we have a comprehensive measure that includes everything and makes it clear who the regulator is. Given the interventions by the hon. Member for Mitcham and Morden, we want to make sure, as a Committee and as legislators, that the laws we introduce are actually enforced.
Eddie Hughes (Walsall North) (Con)
The shadow Minister made a very interesting point, and I believe his case has some merit. We have invested in pilots in several areas of the country so that we can explore the case more fully. When the Levelling Up, Housing and Communities Committee looked at the procedure, there was some frustration on the part of Members about the fact that we cannot easily compartmentalise the breadth of people who are supported in the accommodation, so a range of organisations have oversight of the quality of the accommodation provided, supported or otherwise. We need further work to be done through the pilots to make sure that any intervention we make does not have unintended consequences for the providers who provide excellent quality supported accommodation.
Bob Blackman
I thank my hon. Friend for that intervention. Clearly, while the amendments may have good intentions, he makes a good point. We do not want the good providers, who are doing a fantastic job in supporting people to rebuild their lives, to face unnecessary burdens and regulation. It behoves the movers of amendments such as these to ensure that we have covered all those bases.
We must therefore ask: even though the amendments look superficially beneficial, do we have a comprehensive series of measures that plugs all the loopholes and does not burden good providers? Rogue providers are smart; they will look at any gaps in the law and for all opportunities to exploit the system and vulnerable people. The sensible thing would be to withdraw the amendment and have further discussion so that, together, on a cross-party basis, we can make sure that the Bill ends up in the right place.
Siobhain McDonagh
I support the amendments tabled by my hon. Friend the Member for Greenwich and Woolwich. At the moment, we have two things going on. First, we have exempt accommodation, where private property developers access vulnerable people and place them in houses in multiple occupation, cream off large amounts of housing benefit and provide no support to those individuals. They are exploited and left until the police, in many cases, or mental health services come along and take them away. Secondly, neighbourhoods are completely terrorised by people who are vulnerable but unable to control their behaviour, and absolutely nobody regulates that.
I represent a suburban south-west London constituency. Do not get me wrong; properties are not cheap, but they are cheaper than in other bits of London. Companies such as Stef & Philips are exploiting wholesale every loophole and making large amounts of money to bring fear and distress to neighbourhoods and to the residents who occupy those premises.
Last week, a lady who lives in the Pollards Hill area came to my surgery. The 1930s semi-detached house next door to her had been converted into an HMO for five vulnerable tenants. There were no bins to collect the rubbish and no facilities to ensure people could live adequately. She lives next door and has cancer. One of the residents in that home had pulled a knife on her only the day before, and all the other vulnerable tenants in the house had to stay locked in their rooms to avoid that individual. Stef & Philips are making hundreds or thousands of pounds every week from that property.
In Ravensbury, another ward in my constituency, on Malmesbury Road, the same company had a man who was so vulnerable that the police raided the property and had to withdraw because he had a crossbow and they needed firearms support. The whole street was blocked off. That is St Helier estate, for any hon. Members who may know it. It is a beautiful local authority estate built after the first world war to provide homes fit for heroes. The house is beautiful, but not as an HMO for five vulnerable people. People in the street are terrified. Who knows how terrified the other residents in the property are? The company’s balance sheet goes up and up while people go out to work to pay ever-higher tax rates to sustain that company in exploiting people.
Sarah Owen (Luton North) (Lab)
My hon. Friend is making excellent points. That is the human impact of the lack of regulation and enforcement on rogue providers that are making millions out of very vulnerable people. Their impact is felt not only by the individuals who are being harmed, but by entire communities. Does she agree that although we do not want regulation for regulation’s sake, we need not just regulation but enforcement for those who are getting away with this scot-free right now? We do not just need legislation; we need the ability to enforce and act.
Siobhain McDonagh
I absolutely agree with my hon. Friend. If there is no regulation, this will just grow and grow. As mortgage interest rates go up and business for buy-to-let landlords becomes less profitable, more people are going to look at providing this style of housing, because they can exploit the housing benefit system. If that is not happening in the constituencies of all the hon. Members of this Bill Committee, it will be coming to them soon.
Eddie Hughes
The point I am about to make is non-political, given that I am going to use the example of Labour-led Birmingham Council. That council did pilot work, and its scrutiny committee, which was chaired by a Labour member, subsequently published a report. It was able to identify a number of improvements that it could make within the existing legislation. I fully appreciate that legal challenge is an option for landlords who have their claims turned down. However, the council was able to reduce the number of people coming through the pipeline to provide this type of accommodation, and it was able to improve the quality of that accommodation. There is some room for councils who are prepared to focus on this, to improve outcomes for local people within the framework of the existing legislation.
Siobhain McDonagh
I turn to Aves housing association, which was run by a man who was exposed by the BBC for running a former supposed housing association that is in fact a commercial enterprise. It specialises in parts of Pollards Hill and Longthornton in my constituency, which neighbour Croydon, and it routinely takes very vulnerable people to live in houses that are simply not big enough for conversion. It accesses people’s universal credit accounts and takes their money. When the housing benefit department at Merton Council discovered that, it decided not to pay housing benefit to Aves residents. That might seem sensible to most Committee Members. However, that then meant that 92 vulnerable people were not having their rent paid, so were vulnerable to eviction—at which point, Merton Council’s housing department and adult social services departments would have collapsed. Local authorities are in a bind. Do they take notice of what is going on—in which case, they get responsibilities they cannot meet—or do they turn a blind eye because, in the end, that is the only way they can manage?
Bob Blackman
The hon. Member is making a very clear case about the problems in her constituency. One problem that local authorities face is that they have no powers to prevent such properties from being turned over in this way. Does she agree that one issue we have to deal with, which is not addressed in this amendment, is that local authorities need powers? Those powers might be around planning permission to do with HMOs and HMO regulation, to control the type of housing that she quite rightly describes as being a challenge in her area; or they might be over a licensing system to make sure that the operators of supported housing projects are fit and proper persons who will not exploit their position.
Further, data-sharing should be spread across the country. These rogues might well jump from Merton to Croydon to somewhere else, because they know that the local authority does not know about them. However, that is not within the scope of the amendment, although it is in the scope of my Bill, which I will be debating later. Although we would all agree that the issues that the hon. Member has raised are a scandal and need to be addressed, we must be clear that that is not within the scope of the amendment.
Siobhain McDonagh
I believe that the regulator should have power to look at this area of housing. It is all very well for councils to get more powers, and I would be the first to agree with that, but many councils already have a lot of powers that they cannot use because they cannot afford to. They do not have access to social housing units. They do not have access to the level of environmental health officers that they need. They do not have access to the number of planning officers they need in the area of planning enforcement.
Sarah Owen
My hon. Friend hits the nail on the head. The pilot work that the hon. Member for Harrow East just spoke about is fantastic. We will take whatever we can from that and learn, but the point is that the councils and authorities that did that work had to have extra resources to use their existing powers. This is not just about legislating and enabling local authorities to have more powers; it is also about them having the funds and resources to use those powers.
Siobhain McDonagh
Absolutely, and I know the hon. Member for Harrow East will be aware of how few London councils ever prosecute anybody under their current powers. It is about regulation, but it is also about local authorities being able to use their powers. In the light of the recent Budget, local authorities’ powers will become even less well used if their finances continue to be squeezed.
Let us go back to Aves in Pollards Hill and Longthornton. I met the regulator and spoke about Aves and my concern about the exploitation of tenants. The regulator said to me, “We completely agree with you, but there is nothing we can do. We do not have the power to do anything.” Either we give the regulator the powers and do something about it, or we go on talking about it in a well-meaning way while the problem exponentially grows. I, for one, want to see some action rather than none.
Maggie Throup (Erewash) (Con)
It is a pleasure to serve under your chairmanship, Sir Edward. I think this is an important Bill. Amendment 13 and new clause 8 relate to supported exempt accommodation and temporary accommodation when provided by providers that are the subject of other parts of the Bill. The hon. Member for Greenwich and Woolwich made a very good case.
The hon. Member for Mitcham and Morden made a passionate speech, and I think we can all relate to what she was saying, because we all have examples in our constituency of providers who sound very legitimate and credible, but after they are looked into, it turns out that they are not. They are fly-by-nights who are just taking the opportunity provided by the loophole in regulations. We can all cite examples of HMOs that have been passed by councils because the councils do not have the powers to stop them. The impact on neighbourhoods is quite dire, and it really does destroy local communities.
While I appreciate the intentions behind the Opposition’s amendments, I think the better place to close the gaps in regulation would be in the Bill from my hon. Friend the Member for Harrow East. This measure is obviously needed, but I think this Bill is the wrong place for it. I hope to speak later about some of the specific issues in my constituency and the importance of regulating the providers and ensuring the provisions of the Bill are met, because they are so needed.
Matthew Pennycook
That was an incredibly informed and helpful debate. I just want to say at the outset that we fully appreciate how complex an area of law and regulation this is. I have done enough of these Committees to know that the Minister is not going to simply stand up and accept the amendments we have cobbled together just on the basis of my speech, however good it might have been.
I will try to respond to the points made, which I take in the constructive spirit they were offered in. I do not think many of the points made get to the heart of what the amendments are driving at. I agree with the hon. Member for Harrow East: there is a plethora of regulators in housing and planning generally, and I am concerned that we are creating overlap and confusion in various ways. I will come to how that might be true in relation to the ombudsman and the regulator when we discuss clause 5, but that is absolutely a point.
The Minister made the point well: the private Member’s Bill of the hon. Member for Harrow East, the Supported Housing (Regulatory Oversight) Bill, includes a range of targeted measures to address the scandal—we all agree it is a scandal—of rogue providers of exempt accommodation and temporary accommodation in many cases. However, as I made clear, that Bill does not address this gap. The hon. Member for Erewash said that if it is not covered by these amendments, it can be done via the Supported Housing (Regulatory Oversight) Bill, but it is not in that Bill. Perhaps it will end up in that Bill after Committee stage, in which case we will be entirely happy with that being a vehicle for it rather than this Bill, but it needs to be addressed.
Dehenna Davison
Absolutely, we will take this away. I would be grateful for the expertise of all on the Committee, including the hon. Member for Mitcham and Morden, who made an incredibly passionate case. Let us have a roundtable discussion about how best we can take this forward following Committee.
Matthew Pennycook
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
New clause 2—Regulator duty to report on safety defects—
‘(1) In fulfilling its consumer regulation objective under section 92K of the Housing and Regeneration Act 2008, the regulator must report to the Secretary of State on actions taken by registered providers to remediate unsafe external wall systems and other historic fire safety defects in social housing.
(2) A report produced under this section may make recommendations to the Secretary of State on further action required to sufficiently address identified issues.’
This new clause would ensure that in meeting its fundamental objective to support the provision of social housing that is well-managed and of appropriate quality, the regulator would be required to report to the government on the progress of building safety remediation.
New clause 3—Regulator duty to support provision of social housing—
‘(1) In fulfilling its economic regulation objective under section 92K of the Housing and Regeneration Act 2008, the regulator must–
(a) within six months of this Act receiving Royal Assent, and
(b) at intervals of no more than three years thereafter
provide a report to the Secretary of State on whether the supply of social housing in England and Wales is sufficient to meet reasonable demands.
(2) A report produced under this section may make recommendations relating to how to ensure that the provision of social housing in England and Wales is sufficient to meet reasonable demands.’
This new clause would ensure that in meeting its fundamental objective to support the provision of social housing sufficient to meet reasonable demands the regulator would be required to report to the government on adequacy of social housing supply.
Dehenna Davison
Clause 1 relates to the fundamental objectives of the Regulator of Social Housing and adds safety and energy efficiency of tenants’ accommodation and transparency. New clauses 2 and 3 seek to take that further and expand the role of the regulator into new areas.
New clause 2 relates to monitoring the remediation of unsafe cladding and other fire safety defects in the social housing sector. I want to make clear from the outset that nothing is more important to this Government than making sure people are safe in their homes. The tragic, horrendous case of Awaab Ishak, which we are all unfortunately now familiar with, has highlighted the crucial role of registered providers of social housing in making sure that happens.
The Bill sits alongside other key reforms that we have introduced in response to the Grenfell Tower fire, including the Building Safety Act 2022 and the Fire Safety Act 2021. New clause 2 is incredibly well intentioned, given what it seeks to achieve, but the Bill is not the correct vehicle for it. A duty should be placed on the Regulator of Social Housing to undertake such monitoring. The regulator is not a specialist fire or building safety body. The proposed new clause would be a significant expansion of the regulator’s remit. Currently, the regulator does not have the expertise to fulfil that function effectively.
The question of who should undertake that kind of role is, however, an important one for Government. The Department is evaluating options on how best to monitor and report on the progress made in remediating unsafe cladding and other fire-safety defects. It is important that the work is done at pace, but thoroughly. I understand that hon. Members will be keen to study its outcomes and implications for future policy, but I must reiterate that it would be improper to pre-empt it while it is ongoing by allocating responsibility for that highly important function without the benefit of fully understanding the options. We need to ensure that that work is undertaken by those with the correct skills, expertise and capacity. My concern with new clause 2, therefore, is that it would make for a hasty decision that might mean we do not achieve the desired outcomes in the optimal way.
I turn to new clause 3. The hon. Member for Greenwich and Woolwich is right to draw attention to the importance of increasing the supply of social housing. In the levelling-up White Paper, we made it clear that we want to
“increase the amount of social housing available over time to provide the most affordable housing to those who need it.”
Our £11.5 billion affordable homes programme will play an important role in achieving that aim, as will the measures we have taken to support increased council house building.
For its part, the regulator has an objective to support the provision of sufficient social housing. It discharges that role through its work to ensure that private registered providers are financially viable, efficient and well governed. In turn, that helps providers to obtain funding to enable them to deliver more social housing. However, I do not agree that we should make the regulator responsible for assessing the adequacy of social housing provision in England or, indeed, in Wales. I am concerned that such an additional role could divert resources away from the activities that should be the focus for the regulator, which is setting standards for social housing so that landlords are clear about expectations on them to deliver quality of housing, to monitor compliance with those standards and, where necessary, to undertake relevant enforcement action.
Organisations outside Government often publish their own analysis of the level of need for social housing. There are a number of different approaches to assess that, and not necessarily a single right answer. I am therefore not convinced that the regulator stepping in to provide its own assessment is the right approach. It should focus on the task at hand and on standards, quality and enforcement. On that basis we would not want to accept new clauses 2 and 3.
Matthew Pennycook
I thank the Minister for her explanation of the clause and for the response to the two new clauses tabled by the Opposition. As the Minister has made clear, with a view to providing for a stronger and more proactive consumer regulatory regime, the clause expands the regulator’s fundamental objectives as set out in the Housing and Regeneration Act 2008 to include those of safety, transparency and—following the well-deserved success of Baroness Hayman’s amendment in the other place on standards relating to energy demand—energy efficiency.
My response to the case that the Minister made against new clauses 2 and 3 has, thankfully, pre-empted a number of the points she has just made. New clause 2 seeks to ensure that in meeting its fundamental objective to support the provision of social housing that is well managed and of appropriate quality, under proposed new subsection (3)(a) of the amended 2008 Act the regulator would also be required to report to the Government on the progress of building safety remediation in the social housing sector.
According to the Department’s own figures, every one of the 160 social sector buildings identified as having unsafe aluminium composite material—ACM—cladding, similar to that which covered Grenfell Tower, have been remediated through the social sector ACM cladding remediation fund. When it comes to buildings in the social sector with unsafe non-ACM cladding systems, we know that, as of 31 October, 251 have applied for Government funding for remediation. Alarmingly, as things stand, not a single one of those 251 buildings has been remediated.
Perhaps more worryingly, we have no estimate of the total number of social sector buildings with unsafe non-ACM cladding systems, because social landlords can apply for Government funding only if the costs of remediation are unaffordable or if there is a threat to their financial viability. We have no idea whatsoever how many social sector buildings have other non-cladding building safety defects.
There is a wider debate to be had outside this Committee about social landlords’ restricted access to funding for non-ACM remediation work, given the impact that has on social tenants, whose rent payments are contributing to the costs of the works required, and on providers in terms of upgrade and maintenance works, services provided such as welfare advice and the supply of new social homes.
However, all new clause 2 seeks to achieve is to make the regulator—which, as a result of the Bill will now have to perform its functions with a view to supporting the provision of social housing that is safe—report to the Secretary of State on the progress of remediating unsafe external wall systems and other historical fire safety defects in social housing, and provides it with the opportunity to make recommendations to the Secretary of State on further action required.
Speaking for the Government in the other place in response to a similar amendment in the name of Baroness Pinnock, Baroness Scott of Bybrook argued, as the Minister just has, that the type of monitoring sought by new clause 2 would not be “appropriate” for the regulator to undertake because
“it is not a specialist health and safety body.”—[Official Report, House of Lords, 6 September 2022; Vol. 824, c. 114.]
I am afraid that we find that argument wholly unconvincing.
New clause 2 does not seek to impose a duty on the regulator to carry out inspections of social sector buildings that are either potentially unsafe or identified as unsafe and in need of remediation or to physically monitor the progress of remediation works. As such, it does not require the regulator to possess the relevant professional skills, expertise and capacity necessary for assessments of that nature. All it would require is that the regulator be responsible for reporting to the Government on the progress of remediation in respect of social sector buildings—on the overall number of such buildings identified as having defects and the progress of whether they have started and completed remediation.
Given that the regulator already collects data from registered providers to inform its regulation of standards, and that the Bill ensures that one of the regulator’s new fundamental objectives will be the safety of buildings, we believe it is entirely reasonable and appropriate to task it with reporting to the Government along these lines.
As the Minister made clear, the Government have been at pains over recent months to stress they are examining options for monitoring and reporting remediation progress in future. Yet, as we consider the Bill today, neither the Department nor the new Building Safety Regulator is providing accurate data with regard to the scale of the building safety challenge in the social housing sector, or progress toward meeting it; no firm proposals have been brought forward by the Government to address that gap; and we have no guarantees that appropriate measures will be forthcoming any time soon, although I take at face value what the Minister has just said.
The Bill rightly ensures that the provision of safe, high-quality social housing will be integral to the function of the regulator’s role. There can be no more important task in respect of social housing—I think we are agreed on this point—than to ensure that buildings that are either covered in combustible material or riddled with other non-cladding safety defects are made safe. New clause 2 would ensure the regulator monitors progress to that end and reports to Government. I urge the Minister to rethink. If the Government are not minded to amend the Bill as new clause 2 seeks, I urge them to bring forward other proposals for monitoring this important element of the remediation drive in the near future.
I turn to new clause 3. In a similar way to how new clause 2 seeks to place additional requirements on the regulator in relation to its fundamental objective to support the provision of social housing that is well-managed and of appropriate quality, new clause 3 seeks to ensure that, in meeting its fundamental objective under the 2008 Act to support the provision of social housing that is sufficient to meet reasonable demands, the regulator would also be required to report to the Government on the adequacy of social housing supply.
The problem to which this new clause relates is well known. While more people than ever are struggling to afford a secure place to live, nowhere near enough social homes are being built. Almost 1.2 million households in England are now languishing on a housing waiting list. The Green Paper that foreshadowed the Bill stated:
“Social housing remains central to our supply ambitions.”
Despite that, the Government are doing nowhere near enough to deliver the volume of social homes our country needs.
Not only are the Government failing to build the volume of social homes that we need, but by means of reduced grant funding, the introduction of the so-called affordable rent tenure, increased right-to-buy discounts and numerous other policy interventions, we would argue that they have actively engineered the decline of social housing over the past 12 years. The result is that not only were fewer than 6,000 social homes constructed last year but over 21,000 were sold or demolished—a net loss of 15,000 desperately needed genuinely affordable homes.
Bob Blackman
I agree with the shadow Minister that the provision of affordable social housing in this country is far too low. It has been far too low for far too long. That has been the case not just under this Government, but under successive Governments for more than 30 years.
The shadow Minister has put forward his case, and he quoted one report claiming that 145,000 units are required per year. The Levelling Up, Housing and Communities Committee and I have always taken the view that 90,000 units per year would be required just to get us back to where we should be. From that perspective, it is clear that there needs to be more investment in affordable social housing, and we need to get to a point where people have a place they can call home, a rent that they can afford, and the option to buy when their circumstances allow.
The new clauses seem to put extra burdens on the regulator, for example by requiring them to report on the amount of social housing there should be in this country. I do not think that is an appropriate role for the regulator. It is right that organisations, such as those the shadow Minister quoted—Shelter, Crisis, CIH and others—should be reporting and commenting to Government, but I do not think it is the role of the regulator to report to Government.
I think the role of the regulator is quite clearly to report on the condition of social housing. I hope as we go through the Bill—and I will challenge the Secretary of State on this particular issue—we will see some amendments that strengthen the role of the regulator to ensure that social housing providers are performing as they should be. That means providing a high-quality standard of accommodation. We have heard about what has happened in Rochdale, but the issue of the condition of property is not confined to Rochdale. It goes up and down the country.
We need to see dramatic improvements in the provision of not only the quantity of social housing, but the conditions within those units. It is a sheer scandal in this country that we are paying huge salaries to social housing providers who are pocketing the money while providing a very poor service for their tenants. We need to call them to account. I believe that comes through the role of the regulator. That is the way it should be. I hope we can see some strengthening of the Bill on that point through Government amendments, at least when we get to Report stage.
On safety defects, there is clearly an issue about data, performance and the funding of removing unsafe cladding and dealing with fire safety defects. The hon. Member for Greenwich and Woolwich will know that I have been on this case for quite some time—since before Grenfell. One of the key issues here is about whether the regulator should be reporting on it, but frankly I think the regulator should be enforcing it. They should be making sure the providers actually do their job of providing safe accommodation for people.
While I recognise that the new clauses are well-intentioned, I do not think they hit the nub of where we need to be going. I hope the Government will come forward with some new clauses to strengthen the Bill when we get to Report stage, particularly in light of the scandal in Rochdale and the conditions people are facing up and down the country.
Siobhain McDonagh
Thank you, Sir Edward, for your generosity in calling me. I realise I registered quite late that I wanted to speak.
Why are we sitting here in this Bill Committee today? We are sitting here because, under the coalition Government’s bonfire of the quangos, we set fire to the housing inspectorate and the Audit Commission in the belief that no regulation of damp or mould growth in properties was required, that all the adjudicator had to do was look at the financial structure of housing associations, and that that would be enough. What a terrible error that has been.
In my constituency, the largest social housing provider is Clarion Housing Association. After an ITV news programme about some of its standards, it was referred to the regulator. The regulator’s decision was that it could not investigate because there was not a systemic problem. That is where we have got to. How many of us were distressed by Awaab Ishak’s death? How many of us know that we have plenty of social housing units in our constituencies with the same damp and mould growth problems? At the moment we have no form of regulation that can tackle that.
The adjudicator does not go out and look at properties or inspect procedures. The adjudicator is interested in the financial structures. I would never argue that we should not look at the financial viability of a housing association, but I also want to know what it does when it has problems of damp and mould growth. I want to know that a Government inspector goes out and sample-tests and looks at properties.
We would never accept an Ofsted that did not inspect schools or a Care Quality Commission that did not go in and inspect hospitals, care homes or local authority social services, but we have accepted that the regulator has no responsibility for going into social housing properties and inspecting their conditions.
When we look at reducing regulation, we must remember Awaab Ishak, and remember that we do not have a regulator in our country that would do anything about that.
Dehenna Davison
I will be brief and just say that I recognise the arguments made by the shadow Minister, but I hope he recognises the arguments that I made in my opening statement. I have made a commitment to my hon. Friend the Member for Harrow East that before Report we will sit down to discuss the issues further and make sure the regulator has the teeth it really needs.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clause 2
Advisory panel
Matthew Pennycook
I beg to move amendment 14, in clause 2, page 1, line 18, at end insert—
“(2A) The Panel may provide information and advice to the Secretary of State about, or on matters connected with, the regulator’s functions and wider issues affecting the regulation of social housing (whether or not it is requested to do so by either the regulator or the Secretary of State).”
This amendment would enable the Panel to provide information and advice and to proactively raise issues affecting social housing regulation more generally directly to the Secretary of State.
The Chair
With this it will be convenient to discuss amendment 15, in clause 2, page 2, line 17, at end insert—
“(8) The Panel must be chaired by a tenant of social housing.
(9) The Chair is responsible for setting Panel meeting agendas.
(10) The majority of persons appointed to the panel must be tenants of social housing.”
This amendment would ensure that tenant representation on the advisory panel is mandatory and that tenants are able to influence effectively what information and advice is presented to the regulator in respect of issues affecting social housing regulation.
Matthew Pennycook
For all its technical complexity, the Bill is ultimately about those who live in social housing and overhauling regulation to ensure that they are treated fairly by landlords who are well run, responsive, transparent and accountable. In considering the detail of the Bill, we must never forget that the impetus for it was the deaths of 72 men, women and children in the early hours of 14 June 2017. Those 72 human lives were ended in an inferno fuelled by the highly combustible cladding system installed on the outside of the tower block in which they lived, despite the fact that tenants had repeatedly sounded the alarm about the building’s safety defects and the fact that warnings were going unheeded.
I have met and spoken to Grenfell United, as I assume the Minister and many other Members have. I once again pay tribute to them and the wider Grenfell community. I know that what the survivors and the bereaved are determined to achieve is not only justice, but lasting change in how social housing is regulated and the power that tenants themselves can exercise. We firmly believe that the empowerment of tenants must be at the heart of the Bill, and we believe that a key test of its robustness is whether it establishes mechanisms that will enable tenants to influence in practice the regulator’s approach to regulating standards; to shape any future changes to regulatory standards and codes of practice; and to proactively raise wider issues affecting social housing regulation and policy, not just with the regulator but with Ministers.
The Government ostensibly agree that tenants are at the heart of the Bill, and Ministers have repeatedly assured us that one of its primary objectives is to give social housing tenants a voice and ensure that it is listened to. Yet when it comes to providing ways in which tenant representatives can exert a measure of control over the work of the regulator, shape the future direction of the regulatory arrangements that the Bill establishes and proactively influence national regulation and policy so as to shape the services that tenants receive from their landlords, we feel that the Bill is somewhat lacking in ambition.
Dehenna Davison
I am grateful to the shadow Minister for making his case for amendments 14 and 15. Amendment 14 seeks to enable the advisory panel to provide information and advice and to raise issues affecting social housing regulation directly with the Secretary of State. The social housing White Paper made it clear that the purpose of the advisory panel was to provide independent and unbiased advice specific to the regulator on matters connected to regulation. Clearly, the views of tenants are central to that objective.
As the hon. Gentleman outlined, in parallel we also established the social housing quality resident panel, which will provide an opportunity for us to hear from tenants. The aim of the resident panel is to enable tenants to share their views directly with Government and Ministers on their approach to improving the quality of social housing, and on whether the Government’s interventions will deliver the changes that they want to see.
The resident panel is made up of 250 social housing residents from across the country and from diverse backgrounds. They met for the first time last week on 26 November, and will meet approximately monthly over the coming year, with opportunities for the agenda to be shaped by panel members. At that meeting, residents told the Secretary of State for Levelling Up, Housing and Communities, my right hon. Friend the Member for Surrey Heath (Michael Gove), that the most important issues to them were how repairs are dealt with, how landlords are held to account and how complaints are handled by their landlords and the housing ombudsman. The Department’s resident panel and the regulated advisory panel have a specific role and remit to ensure that tenants’ views are properly represented to both Ministers and the regulator.
Amendment 15 seeks to require a social housing tenant to chair the advisory panel and have responsibility for setting the agenda that the panel considers. It also seeks to ensure that social housing tenants comprise the majority of panel members. We share the notion that it is vital that tenants’ voices are heard, but it is important that the advisory panel considers the full range of regulatory issues that the regulator has to tackle. That means that we need to allow a diverse collection of voices to share their knowledge and opinions with the regulator.
Consumer matters are rightly at the forefront of the Bill but, equally, working to resolve some of the economic issues should not be diminished. Legislating for a tenant to chair and set the agenda and requiring the majority of the panel members to be tenants would not support what we are trying to achieve with the advisory panel. I am concerned that being too prescriptive in legislation about how the advisory panel must operate may prevent the panel from having the flexibility to decide how it best operates. In practice, I expect that all members of the advisory panel, along with the regulator, will shape how it works and what it considers.
We are committed to ensuring that tenants can effectively engage with the Department and the regulator, and that tenant voices are at the heart of social housing regulation and policy, but we do not feel that amendments 14 and 15 are necessary to achieve that so I ask the shadow Minister to withdraw them.
Matthew Pennycook
I thank the Minister for that helpful response, and I take on board the concerns she raised about the amendments.
I am slightly concerned about the lack of what we would consider to be true tenant empowerment. The quality resident panel is important, but it only lasts a year, so how will we get ongoing tenant engagement with the work of the regulator to inform how it operates, to shape future regulation, which is part of its remit, and to raise future issues of concern to tenants nationally, in terms of social housing regulation and policy? We do not think the Bill allows for that, and in all honesty I cannot understand the Government’s objection to allowing the advisory panel to notify Ministers directly, rather than the regulator, in certain rare circumstances. As the Minister said, the panel is at present constituted by the regulator, which appoints its membership, and it can only provide views directly to the regulator. We think there are some circumstances in which it may need to do otherwise. I hope the Minister takes away those points.
Eddie Hughes
Although there might be some deliberation about this mechanism, there are several mechanisms through which resident organisations are able to engage with Ministers and the regulator. I am delighted to see representatives of Grenfell United in the Public Gallery. There is a regular opportunity to meet Ministers, although it is not prescriptive and perhaps not as frequent as many would like, but the Government are certainly determined to build on it.
Matthew Pennycook
We recognise that Ministers meet tenants and tenant representatives frequently. My concern is that if tenants on the advisory panel have an issue that they feel is sufficiently serious that they need to bring it to the attention of Ministers, rather than the regulator, they should not have to rely on attempting to get a meeting with Ministers. There should be a mechanism through which they can put serious issues on the desk of the Secretary of State or the Minister if they feel that they, as well as the regulator, need to know about them. That is the point we are trying to address with amendment 14.
On amendment 15, I understand the Minister’s concerns about being too prescriptive, but I urge the Government to go away and think again about the membership of the advisory panel. I appreciate fully the need to have a diverse panel, but as I read clause 2(4), there is nothing on the face of the Bill to prevent the Government from putting one tenant or tenant representative on the panel and leaving it at that. There is no minimum quota for tenants, and we want tenant voices to be properly represented.
Bob Blackman
The shadow Minister is making a good point. We want to empower tenants, but his proposal could have an unintended consequence. Supposing tenant representatives on the board cannot agree among themselves who will be the chair, the panel could meet, but obviously that would be a difficult situation. There may potentially be social tenants from various parts of the country, representing different organisations. It is therefore not appropriate to prescribe a chair on the face of the Bill; that would defeat the objective. It might well be that we could find some suitable wording about the number of representatives, but I do not think we should force the panel to have a particular individual or representative as the chair.
Matthew Pennycook
The point about obvious issues around tenant representation and selection is well made, although those issues exist for the quality residents panel and the 250 members it selects. They have existed every time we have tried to create a body that gives voice to residents, so I do not think they are insurmountable. I welcome the fact that the hon. Gentleman thinks a minimum level of tenant representation on the panel is a good thing, and I urge the Government to think again about that.
We ultimately want to achieve tenant empowerment on the advisory panel so that tenants can be confident that, when the advisory panel gives information and advice to the regulator about the new system of regulatory standards, its voice is properly heard and it can bring issues to the attention of Ministers if required. I hope the Government will take away the points we have made about the amendments. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Dehenna Davison
Clause 2 makes it a requirement that the regulator will engage with a wide range of stakeholders, including tenants and landlords. It also sets out expectations about who should be represented on that panel. It is not just about the regulator asking a group of people for views once it has already made up its mind about what it wants to do. The panel is designed to be used to test and shape the regulator’s thinking. For example, we expect the regulator to engage the panel on the design and implementation of new consumer standards. The clause also empowers the panel to raise issues directly with the regulator that its members consider important. I hope the Committee will support the clause.
Question put and agreed to.
Clause 2 accordingly ordered to stand part of the Bill.
Clause 3 ordered to stand part of the Bill.
Clause 4
Power to charge fees
Dehenna Davison
I beg to move amendment 1, in clause 4, page 3, line 40, leave out “follows” and insert
“set out in subsections (2) to (6)”.
This amendment is consequential on Amendment 2.
The Chair
With this it will be convenient to discuss the following:
Government amendment 2.
Clause stand part.
Dehenna Davison
Clause 4 and Government amendments 1 and 2 deal with the regulator’s fee-charging powers. As we heard from a number of hon. Members on Second Reading, the Regulator of Social Housing must be provided with the necessary funding to enable it to deliver the outcomes the Bill is designed to achieve.
Once the new consumer regime is implemented, the regulator will see substantial growth in its regulatory activity, which means its costs will increase significantly. It is Government policy to maximise the recovery of costs of arm’s length bodies, so clause 4 will refine the existing fee-charging power to allow for the cost of some additional functions to be recovered, and to charge fees that cover costs of activities that may not be connected to the specific fee payer, such as the cost of investigation and enforcement. Any significant changes to the design of the regime will be consulted upon and require ministerial approval.
Government amendments 1 and 2 also address the regulator’s fee-charging powers. The amendments remove specific provision allowing the regulator to charge following the completion of inspections, if authorised by the Secretary of State by order. The existence of that special provision relating to fees for inspections is no longer necessary given the changes we are making to the regulator’s general power to charge fees. That power will now allow it to cover the cost of inspections in its fees for initial and continued registration.
Leaving the provision in legislation erroneously risks causing confusion and casting doubt on the regulator’s ability to set fees to cover inspections as part of its general fee-setting power. As such, the change serves to ensure that there is greater clarity and consistency in this legislation.
Clause 4 establishes the parameters to the regulator’s fee-charging powers and makes clear that it can charge the sector for costs that may be unconnected to the specific fee payer. Government amendments 1 and 2 support clause 4 by delivering a technical change that will ensure there is no confusion over the powers available to the regulator to deliver maximum cost recovery. On that basis, I commend the clause to the Committee and beg to move the amendments.
Matthew Pennycook
I thank the Minister for that explanation of Government amendments 1 and 2. As she makes clear, clause 4 amends section 117 of the Housing and Regeneration Act 2008 to clarify the extent of the regulator’s fee-charging powers. New subsection (4A) adds to the 2008 Act and makes it clear that the regulator has the power to recover the cost of activities it does not currently charge social housing providers for.
If I understood the Minister correctly, Government amendment 2 revises section 202 of the 2008 Act because the powers in new subsection (4A) are sufficiently broad to cover charging providers fees for inspections. In short, as I hope she agrees, this is just a tidying-up exercise, the rationale for which is that the power is being omitted from section 202, concerning inspections only, because it more properly fits within section 117, concerning fees generally, to ensure that references to fee charging are all in one place in the 2008 Act. If that is the case, and amendment 2 in no way prevents the regulator from charging fees for inspections, we take no issue with it, because it is important that the regulator is able to charge fees to cover the significant costs involved in overseeing the comprehensive and rigorous Ofsted-style inspections regime that the Bill introduces.
The amendment raises wider issues relating to the resourcing of the regulator. Since the Bill’s publication, we have consistently expressed concern about the very real risk that the regulator will struggle to discharge its new functions and that it will not be adequately resourced to perform its enhanced role, in particular in relation to inspections. Prior to the Bill’s publication there were already concerns, expressed by the Select Committee and others, as to whether the regulator had the resourcing, skills and capacity to continue to regulate economic standards adequately, given the complex financial and corporate structures proliferating in the sector.
The new consumer regulatory regime will impose significant burdens on the regulator. The Minister stated on Second Reading that the Government are
“firmly committed to ensuring that the regulator has the resources that it needs not only to deliver the new consumer regulation regime but to ensure that it continues to regulate its economic objectives effectively.”—[Official Report, 7 November 2022; Vol. 722, c. 83.]
She also suggested that the Government were potentially minded to introduce changes to the fee regime to ensure that the regulator is funded appropriately. We accept that the Government have made limited additional funding available this financial year to support the new regime, but we are concerned that there may still be a resourcing challenge for the regulator. I would welcome any further assurances from the Minister that the regulator will have all the resources it needs to discharge the enhanced functions that the Bill requires of it.
Dehenna Davison
I am grateful to the shadow Minister for raising the question of resourcing. We touched on this on Second Reading, as he highlighted. He is right that in this financial year we are providing £4.8 million to aid the regulator in its vital work, but this is why it is so important that we get the fee charging regime right—to ensure that the regulator is properly resourced. As we have discussed today, on Second Reading and in the other place, the regulator needs the teeth to be able to do its job, and a huge part of that is resourcing. He is right that, effectively, we are tidying the legislation up to make it a bit neater and ensure further clarity, so I hope he will support these amendments.
Amendment 1 agreed to.
Amendment made: 2, in clause 4, page 4, line 16, at end insert—
‘(7) In section 202 of the Housing and Regeneration Act 2008 (inspections: supplemental) omit subsections (4) to (7).’—(Dehenna Davison.)
This amendment repeals the provisions of the Housing and Regeneration Act 2008 which provide specific powers to enable the regulator to charge registered providers of social housing fees for inspections.
Clause 4, as amended, ordered to stand part of the Bill.
Clause 5
Relationship between regulator and housing ombudsman
Question proposed, That the clause stand part of the Bill.
Matthew Pennycook
I will be brief, but there is an issue that we want to highlight in relation to clause 5, which is about the relationship between the regulator and housing ombudsman. Clause 5 amends the Housing and Regeneration Act 2008 and the Housing Act 1996 to add measures on the relationship between the two bodies, so that they can exchange information quickly and effectively to provide better protection for tenants, all of which is entirely to the good and uncontroversial. However, consideration of the clause provides me with an opportunity to seek clarification from the Minister about the precise role of each body in the reformed regulatory regime that the Bill establishes.
Taken at face value, the role of each body is clearly delineated: the regulator regulates registered providers in England, while the housing ombudsman seeks to resolve complaints from individual residents about their registered provider. The regulator operates on a top-down basis, and the housing ombudsman operates on a bottom-up basis. However, when one considers how the reformed regulatory regime will operate in practice, things start to appear somewhat more complicated.
First, if my reading of the Bill is correct, the regulator appears to be able to intervene in individual complaints. Clause 31, for example, enables the regulator to arrange for an authorised person to take emergency remedial action in respect of individual premises following completion of a survey. Presumably, it is therefore necessary for the regulator to receive a complaint from a tenant who fears they are at risk of an imminent serious health and safety risk. Otherwise, how could the regulator order the necessary survey of a given premises? It may be that that is not the case, and it will be for the ombudsman to refer an individual complaint to the regulator to allow them to make use of the provisions in clause 31; if that is the case, it is not clear from the Bill.
Secondly, following revisions to the housing ombudsman scheme enacted in September 2020, the ombudsman has a responsibility to publish a complaint handling code, enjoys a new power to issue complaint handling failure orders that can relate to a landlord’s overall complaint-handling policy and, crucially, has the ability to investigate beyond an initial complaint to establish whether evidence might indicate a systemic failing by a registered provider. It may be that the ombudsman can address such systemic failings on the part of registered providers on the basis of suggested changes to their policies only with the regulator responsible for exploring whether changes to their systems are necessary, but again that is not immediately clear in the Bill.
Eddie Hughes
I understand the point that the hon. Gentleman is making, but it is based on the premise that these bodies operate in a completely siloed fashion. The relationship between them is a fluid one; they speak regularly and consider complaints and points that have been raised, which come to them from either direction. They work in a collaborative fashion and are then able to identify who should best proceed with a particular case. Obviously, it is governed by a memorandum of understanding, but it is a much more fluid and collaborative arrangement than that.
Matthew Pennycook
I thank the hon. Gentleman, and I fully understand his point. I met with senior staff from the housing ombudsman yesterday, and we were talking precisely about the ways in which the respective roles operate and how they could be clarified. What these examples seek to illustrate is that there is still an obvious risk of overlap and duplication of roles in respect of these two bodies. One could argue, as the hon. Gentleman just has, that those issues can be resolved by means of updating the non-statutory memorandum of understanding that already sets out the functions of both organisations and how they work together, but that throws up two distinct issues in and of itself.
First, is it appropriate for us to leave these matters to the two bodies themselves to resolve, rather than clarifying on the face of the Bill the precise role of each body in the new regulatory regime, so as to avoid the duplication of functions and potential gaps in coverage—even if only in the short term, before they update that memorandum of understanding to reflect the new regulatory system of proactive consumer regulation?
Secondly, I am sure that hon. Members have been contacted by tenants who are aware that the Bill is progressing through the House. The expectations around the Bill are such that, after it receives Royal Assent, tenants who feel that they have not secured appropriate redress by means of a standard complaint to their landlord and believe that their grievance might be systemic in nature will understandably be uncertain about whether they should approach the ombudsman or the regulator with their complaint. I appreciate that the Department is alive to the risk, has produced guidance in the form of a fact sheet and is apparently delivering a communications campaign to tenants so that they know where to go and are well informed but, without greater clarity prior to Royal Assent about the precise roles of each body in the regime established by the Bill, I fear that neither will be sufficient to prevent a large degree of confusion. When debating this matter in the other place, Baroness Scott of Bybrook conceded that fears about confusion of the kind that I alluded to are legitimate, and that greater clarity is required as a result; yet, despite her promise to take the matter back to the Department, the Government are not amending the Bill to provide greater clarity or committing to take any further concrete steps—that I am aware of, at least—to ensure that confusion will be avoided.
As Shelter and others have argued, it is essential that the roles of the regulator and the housing ombudsman are clearly defined, that tenants and tenant groups understand the appropriate way to make complaints and that any complaints process or system is easy to use, accessible and effective. I would be grateful if the Minister provided greater clarity today and, if not today, in writing. I hope that, in general terms, she will assure me that the issues that I have highlighted will be both considered and acted on by the Department before the Bill receives Royal Assent.
Dehenna Davison
I am grateful to the shadow Minister for raising his concerns and giving me the opportunity to provide some clarity. We will take it from the experience of one particular tenant, if we may. If a tenant has a complaint, they should first go to their landlord but, if that complaint cannot be resolved between tenants and the landlord, it can be escalated to the housing ombudsman to investigate individual complaints from tenants. If the ombudsman’s investigation finds instances of maladministration on the part of the landlord, the ombudsman can issue orders to that landlord to put things right for the complainant. That can include requiring the landlord to pay compensation to the complainant or to undertake repairs.
If an investigation raises a potential breach of a regulatory standard or there is evidence of systemic failure by the landlord, the ombudsman can refer the matter to the regulator. In situations where the regulator has concerns that the provider is failing to maintain the premises in accordance with the regulatory standards, it can conduct a survey and, following the implementation of this Bill, arrange for emergency repairs to remediate the issue in cases where there is a risk of serious harm to tenants that is not being addressed by the landlord.
Matthew Pennycook
That is useful clarification. If I have correctly understood what the Minister is saying, emergency remedial action under clause 31 of the Bill stems, in the first instance, from a referral from the ombudsman. Let us think about that process in detail. To get to the ombudsman, a tenant would have to exhaust all stages of their resident provider’s internal complaints process, which is three stages in most cases. It takes about a year to get through it. They would then have to go to the ombudsman, who has a huge backlog. Clause 31 is about emergency remedial action that poses an imminent threat to health and safety. I urge the Government to think again about how, in particular, clause 31 operates because tenants will need to give notice to the regulator about specific clause 31 failures far quicker than the process she has just described.
Siobhain McDonagh
The situation gets even more complicated when a tenant exasperatedly says, “I want to go to a lawyer” and then the whole thing closes down.
Matthew Pennycook
We are testing the patience of Sir Edward and the rules, but the point my hon. Friend highlights is a genuine one about the complication of legal matters and whether tenants abandon complaints at whatever point, which I hope adds to the weight of the point that I have just made. It is not immediately clear, and we have to be clear with, most importantly, tenants once this Bill is in force about where they go and how they can seek redress under the provisions of the Bill as quickly as they need to. As I said, in the case of clause 31, the process the Minister has described does not seem like it is fast enough to ensure that emergency remedial action of the kind provided for by clause 31 will happen. I hope the Government will take this and those other points away.
Dehenna Davison
Again, I am grateful to the shadow Minister and to the hon. Member for Mitcham and Morden. On the shadow Minister’s point about communications ensuring that tenants know where to go and how this process works, we have been working with organisations that represent landlords, social housing residents and the housing ombudsman service. We delivered communications and marketing campaigns in 2021 and this year to ensure that social housing residents were aware of how to make a complaint and how to seek redress where appropriate. We are putting in the work through communications to ensure that tenants understand the process, but I have heard his points on timeliness and I will endeavour to take that away.
Question put and agreed to.
Clause 5 accordingly ordered to stand part of the Bill.
Clauses 6 to 9 ordered to stand part of the Bill.
Clause 10
Appointment of health and safety lead by registered provider
Question proposed, That the clause stand part of the Bill.
Matthew Pennycook
Clause 10 is not contentious, and we broadly welcome it, but I would appreciate some clarification from the Minister on a specific issue arising from it. At present, proposed new section 126B ensures that
“The functions of the health and safety lead”
are to
“monitor the provider’s compliance with health and safety requirements”
and to notify the provider’s responsible body of any material risk to or failures of compliance, and to advise on steps to ensure the provider addresses them.
As Ministers may be aware, the Local Government Association, among others, has inquired what—if any—channels of communication or reporting mechanisms will exist between the health and safety leads of registered providers and the regulator itself. The LGA also highlighted the obvious need for sufficient new burdens funding in the case of local authority landlords. Will the Minister provide answers today or in writing to the following questions? First, did the Government intend to establish any direct permanent relationship between the regulator and RP health and safety leads? Secondly, what is the rationale for not requiring health and safety leads to report any material risks or failures of compliance directly to the regulator, as well as the responsible body, as a matter of course? Thirdly, can the Minister guarantee that the Government will make sufficient new burdens funding available to local authorities to fully implement the provisions in the clause?
Dehenna Davison
I will follow up in writing with a bit more clarity and specific detail on the questions the shadow Minister has raised.
Question put and agreed to.
Clause 10 accordingly ordered to stand part of the Bill.
Clause 11
Electrical safety standards
Question proposed, That the clause stand part of the Bill.
Matthew Pennycook
We welcome the Government’s decision, in response to concerns raised during the passage of the Building Safety Act 2022, to carry out a consultation on the introduction of mandatory checks on electrical installations for social housing at least once every five years and to include measures within this Bill to partially implement such checks—only partially, because the section of the Housing and Planning Act 2016 that this clause seeks to amend is concerned with properties let by landlords, not owner-occupier leaseholders. That is an important distinction, for reasons I will explain.
As we know, there is currently no legal requirement in England for social landlords or leaseholders to undertake electrical safety checks of their dwellings. The situation is distinct from that in the private rented sector, where the Housing and Planning Act introduced mandatory safety checks on electrical installations at least once every five years.
We know that fires in numerous tower blocks, including Grenfell, Shepherd’s Court, and Lakanal House, were caused by electricity. Home Office fire data shows a consistently high level of accidental electrical fires in high-rise buildings with 10 or more flats. Campaign groups such as Electrical Safety First have been at pains to stress that those buildings were mixed-tenure buildings containing an assortment of owner-occupier leasehold and social rented units and that there is therefore a case, given that the fire safety of a building depends on the safety of all the units within it, for ensuring parity in electrical safety standards across all tenures in high-rise residential blocks.
The Government’s own consultation on this issue noted that the National Federation of ALMOs supported introducing electrical safety requirements for owner-occupiers in mixed-tenure blocks and highlighted that properties being considered by authorities for London’s right to buy-back programme often have electrical installations that are
“in a state of significant disrepair.”
Given that we know that many high-rise social housing blocks contain owner-occupied flats owned on a leasehold basis, it surely cannot be right that a leaseholder living next door to a social renter will not have their electrical installations mandated to be checked every five years. To put it another way, what good is having the electrical installations of two thirds of a building checked every five years if the other third is not? The risk of a potentially life-threatening fire obviously does not discriminate by tenure.
Bob Blackman
This is a very significant point, particularly with what happened at Grenfell. We should reflect on that carefully. Who does the hon. Gentleman suggest should carry out the inspections and how would they be enforced? One of the problems that is clearly still relevant is people buying second-hand white goods that are not safety checked, which could then be faulty and cause electrical fires. In his research, has the hon. Member come up with any proposals as to how this measure could be implemented and work could be undertaken?
Matthew Pennycook
I thank the hon. Gentleman for that point—it is a point well made. I do not have a comprehensive answer to hand. There are provisions in this clause that apply to mandatory electrical safety checks for social rented properties. There are similar requirements in place for the private rented sector. My instinct is that it would seem obvious that those could be applied to the owner-occupier sector in a way that the provisions in the clause perhaps could not be. Whatever way we cut it, what we want to see are mandatory checks on all electrical installations in all units in high-rise buildings, because, as I said, fire does not discriminate between tenure. I hope the Minister will take the points away for further consideration.
Dehenna Davison
The shadow Minister is right to highlight the consultation, which concluded in August. It included a call for evidence seeking views on whether leasehold properties in mixed tenure social housing blocks should have mandatory five-year checks. My hon. Friend the Member for Harrow East was right to say that we need to get this mechanism right to ensure that people living in mixed-use blocks are protected. I am grateful to the shadow Minister for his pragmatism on this point. We are still assessing the responses to the consultation, so it is a bit too early to say what the outcome will be and we do not wish to pre-empt it. However, we will announce further details as the work progresses, and I will endeavour to keep the shadow Minister informed.
Question put and agreed to.
Clause 11 accordingly ordered to stand part of the Bill.
Clauses 12 and 13 ordered to stand part of the Bill.
Schedule 1 agreed to.
Clause 14 ordered to stand part of the Bill.
Schedule 2 agreed to.
Clauses 15 to 20 ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned.—(Julie Marson.)
Social Housing (Regulation) Bill [ Lords ] (First sitting)
The Chair
We are now sitting in public and the proceedings are being broadcast. Hansard colleagues will be grateful if Members could email any speaking notes to hansardnotes@parliament.uk. All the normal rules apply.
Today, we will consider the programme motion on the amendment paper and then a motion to enable the reporting of written evidence for publication. I am sure we can take those matters formally, without debate. I first call the Minister to move the programme motion standing 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 29 November) meet—
(a) at 2.00 pm on Tuesday 29 November;
(b) at 11.30 am and 2.00 pm on Thursday 1 December;
(c) at 9.25 am and 2.00 pm on Tuesday 6 December;
(d) at 11.30 am and 2.00 pm on Thursday 8 December;
(e) at 9.25 am and 2.00pm on Tuesday 13 December;
(2) the proceedings shall be taken in the following order: Clauses 1 to 13; Schedule 1; Clause 14; Schedule 2; Clauses 15 to 35; Schedule 3; Clauses 36 to 38; Schedule 4; Clauses 39 and 40; Schedule 5; Clauses 41 to 44; new Clauses; new Schedules; remaining proceedings on the Bill;
(3) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 pm on Tuesday 13 December.—(Dehenna Davison.)
Resolved,
That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.—(Dehenna Davison.)
The Chair
Copies of written evidence that the Committee receives will be made available in the Committee Room and circulated to Members by email.
We will now begin line-by-line consideration of the Bill. A selection and grouping list for today’s sittings is available in the room. It shows how the clauses and selected amendments have been grouped for debate. Amendments grouped together are generally on the same or similar issues. Please note that decisions on amendments do not take place in the order they are debated, but in the order that they appear on the amendment paper. The selection and grouping list shows the order of debates. Decisions on each amendment and on whether each clause should stand part of the Bill are taken when we come to the relevant clause.
A Member who has put their name to the lead amendment in a group is called first. Other Members are then free to catch my eye to speak on all or any of the amendments in that group. A Member may speak more than once in a single debate. At the end of the debate on a group of amendments, I shall call the Member who moved the lead amendment again. Before they sit down, they will need to indicate whether they wish to withdraw the amendment or to seek a decision on it. If any Member wishes to press another amendment in the group to a vote, they will need to let me know in advance.
Clause 1
Fundamental objectives
Matthew Pennycook (Greenwich and Woolwich) (Lab)
I beg to move amendment 13, in clause 1, page 1, line 5, at end insert—
‘(aa) after paragraph (a) insert—
“(aa) to ensure the provision of care and support services in supported exempt accommodation and in temporary accommodation are adequate, well-managed, safe, and of appropriate quality,”’.
This amendment would ensure that support services provided to residents of supported exempt accommodation and temporary accommodation for those properties that already fall within consumer regulation are adequate and of an acceptable quality.
The Chair
With this it will be convenient to discuss new clause 8—Standards relating to supported and temporary accommodation—
‘(1) The Housing and Regeneration Act 2008 is amended as follows.
(2) In section 192 (Overview)—
(a) in paragraph (a), after “social housing” insert “, supported exempt accommodation and temporary accommodation”
(3) In section 193 (Standards relating to consumer matters)—
(a) in subsection (1), after “social housing” insert “or accommodation to which subsections (1A) to (1D) applies”
(b) after subsection (1) insert—
“(1A) The Secretary of State, after consultation with the regulator, may by order bring into consumer regulation accommodation managed or in the control of a registered provider that falls within subsection (1C) or subsection (1D).
(1B) An order under subsection (1A) may apply to either subsection (1C) or (1D) only or to both and orders commencing either can be made separately at different times and for any part of England.
(1C) The accommodation to which this subsection applies is supported exempt accommodation as defined by regulations under subsection (1E).
(1D) The accommodation to which this subsection applies is temporary accommodation as defined by regulations under subsection (1E).
(1E) The Secretary of State may by regulations set out the classes of accommodation that fall within subsection (1C) or subsection (1D) and may define each class by reference to the Housing Benefit Regulations 2006 or the Universal Credit Regulations 2013.”
(c) in subsection (2), after paragraph (2)(d) insert—
“(da) standards relating to supported exempt accommodation or temporary accommodation,”’.
This new clause would ensure that providers of supported exempt accommodation and temporary accommodation who are registered with the regulator and charge market rents covered by housing benefit are brought within the scope of the new consumer regulatory regime.
Matthew Pennycook
It is a pleasure to begin our line-by-line consideration of the Bill with you in the Chair, Sir Edward, and in a Committee with a considerable amount of housing expertise, which I hope will put us in good stead for further improving the Bill. The Opposition have consistently maintained that the Bill is uncontroversial legislation, and we welcome it and the measures it contains.
We desperately need to build more social homes, but we also need to ensure that our existing stock is of good quality and well managed. Almost half a million social homes fail to meet the Government’s decent homes standard and, as that standard is not a requirement, it is almost impossible to enforce.
The Regulator of Social Housing can and does react to systemic failings among registered providers—for example, the request for evidence issued in relation to damp and mould following the coroner’s report into the death of two-year-old Awaab Ishak in 2020—but at present it has no proactive way of regulating consumer standards. The spotlight of media attention, tenant campaigning or intervention by individual hon. Members should not be required to trigger the appropriate response to substandard conditions in social housing, yet that is all too often the case.
To ensure that tenants are properly protected by a robust, effective system of regulation, major reform is needed. Indeed, it is long overdue, and the Secretary of State was right to concede, in the wake of Awaab’s untimely death, that the Government have been too slow to toughen regulation in this area.
Despite its limited number of clauses, the Bill is therefore of real significance for millions of social housing tenants across the country. That is why the Opposition regret how long it took the Government to bring it forward, and it is why we want to see it on the statute book as soon as possible. To that end, we want to see the Committee to sit no longer than is absolutely necessary. However, we are determined to see the Bill strengthened in a number of areas, so that standards in social housing markedly and rapidly improve, tenants are able in practice to pursue and secure effective redress, the collective voice of tenants is heard more audibly and they have a greater role in shaping national policy, and we are better able to respond to pressing issues affecting some of those living in social housing, such as serious violence.
We owe it to the bereaved and the survivors of Grenfell, Awaab’s family and all those social tenants currently living in appalling conditions to pass the most robust legislation that the House can possibly deliver. To that end, we have tabled a limited number of amendments in key areas, the intention of which is to persuade the Government to reflect sincerely on how the Bill might be improved still further. Although we intend to work constructively with Ministers to secure the Bill’s speedy passage out of Committee, we expect the Government to give serious consideration to the arguments that we make in respect of those amendments.
Amendment 13 and new clause 8 relate to supported exempt accommodation and temporary accommodation. The new clause would provide the Secretary of State with the power to bring properties let at market rents by non-profit making providers of supported exempt or temporary accommodation registered with the regulator into the scope of consumer regulation. It would allow Ministers to do so at a time of their choosing and on an area-by-area basis as required. The amendment would extend the regulator’s fundamental objectives to the care and support services provided by supported exempt and temporary accommodation in relation to properties that already fall within the scope of consumer regulation.
I want to be clear at the outset that these proposals do not seek to extend the scope of the regulatory framework provided for by the Bill to all non-registered supported exempt and temporary accommodation providers in a way that could place unreasonable burdens on the regulator. Rather, they would apply only to those landlords who are registered, or entitled to register, with the regulator as non-profit making providers because they let some properties at below market rents—that is, social housing.
The purpose of these two related proposals is to address an existing loophole that, unless addressed, will remain a problematic gap in the consumer regulatory regime after the Bill has come into force. It is that non-profit making providers of supported exempt or temporary accommodation can let properties at market rents that are eligible for housing benefit support on the basis that “more than minimal” care, support or supervision is being provided, without those properties coming within the scope of consumer regulation.
We know that the regulatory gap is currently being exploited by unscrupulous providers. The three biggest registered providers of non-commissioned exempt accommodation in Birmingham last year, Reliance Social Housing CIC, Ash-Shahada Housing Association Ltd and Concept Housing Association CIC, received £159 million in housing benefit payments for 16,370 market rent properties that fell outside consumer regulation. They were able to operate those properties free from the fear of intervention on consumer standards grounds, because they collectively operate 310 properties—in Reliance’s case, it is just six—at below market rents.
As a result of the regulator being unable to enforce against poor performance by providers in relation to market rent properties that they operate on the basis of consumer standards, the regulator can enforce against bad practice in such cases only on grounds of economic viability. It has done so—for example, it found the large, Birmingham-based Reliance to be non-compliant with the governance and financial viability standard in October last year. However, Opposition Members struggle to understand why the Government have not enabled the regulator to take action against supported exempt and temporary accommodation providers letting units at market rents who fail to meet expected standards, using the tools provided for by the new proactive consumer regulatory regime introduced by the Bill, given that permitting it to do so would simply provide an additional weapon in the regulator’s arsenal when it comes to clamping down on unscrupulous providers.
It is true that clause 8(d) tightens the definition of what constitutes a non-profit making provider. That should help to ensure that some of the most flagrant abuses, such as out-of-balance portfolios, can be clamped down on. However, it will not end all instances of rogue providers gaming the system by letting some properties at below market rents, registering as non-profit making providers on that basis, and then operating far larger numbers of substandard market rent properties outside the scope of consumer regulation. For example, those with more balanced portfolios—presumably even if that were achieved on the basis of a split of 51% of properties let non-profit and 49% for profit—will escape the provisions of clause 8 that I just referred to.
We recognise that the Government support, as we do, the Supported Housing (Regulatory Oversight) Bill introduced by the hon. Member for Harrow East. I am pleased that the hon. Gentleman is on the Committee with us. His Bill will enhance local authority oversight of supported housing and thereby enable local authorities to drive up standards in their areas. However, it does not contain provisions to close the particular loophole that is the focus of amendment 13 and new clause 8. As such, if the Government do not accept our amendments or bring forward their own to tackle the loophole in question, enforcement action on the part of the regulator in these cases will be confined to matters of economic regulation.
One element of our concern about the gap in the proposed consumer regulatory regime that the amendments seek to address is that, once the hon. Gentleman’s Bill has received Royal Assent, rogue providers of supported exempt accommodation will be incentivised to exploit this loophole further, as it will be one of the last remaining loopholes because their operations will be hampered by the range of measures in the hon. Gentleman’s Bill. Using the Bill before us to address the issue of supported exempt and temporary accommodation landlords who are already partially regulated would also close down the loophole more quickly than would be possible by doing so through the Supported Housing (Regulatory Oversight) Bill, because it will be some time before that Bill is in Committee, and the detailed regulations required to give it full effect will take some time to be passed.
If the Government were persuaded of the merits of the argument underpinning amendment 13 and new clause 8, they could determine to deal with supported exempt accommodation and temporary accommodation separately. We ultimately decided that the amendments should cover both, because there is good evidence to suggest that the loophole is being increasingly exploited by private temporary accommodation providers, in particular those providing nightly paid temporary accommodation, who often describe themselves as social landlords but who are exempt from consumer regulation in relation to substandard properties they let at market rents at great cost to the taxpayer.
Dealing with supported exempt accommodation and temporary accommodation together is also an attempt to pre-emptively address the scenario in which the Government accept that properties let at market rents by registered non-profit making providers of supported exempt accommodation should be covered by consumer regulation and legislate to that end, but, by setting aside market rent temporary accommodation let by registered non-profit providers, ensure that that becomes an obvious target for rogue providers seeking to escape consumer regulation standards.
I appreciate fully—I expect that the Minister will respond along these lines—that the Government will be reluctant to re-open at this stage of the Bill’s proceedings what and who falls within the ambit of the new consumer regulatory regime, but surely they cannot believe that the Bill as drafted ensures that support services beyond general management that are provided to residents of supported exempt and temporary accommodation will be of acceptable quality, or that non-profit making registered providers can simply ignore consumer standards when it comes to those properties let at market rents eligible for housing benefit support.
The issues that are the subject of these two amendments will need to be addressed if the Government are serious about clamping down on rogue providers who take public money while failing vulnerable people. I hope that the Minister can signal that the Government are minded to act either by accepting the amendments or by bringing forward their own in due course.
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Dehenna Davison)
It is a pleasure to serve under your chairmanship today, Sir Edward. I am incredibly grateful to the shadow Minister, the hon. Member for Greenwich and Woolwich, for the constructive way he has embraced this debate, for the Opposition’s broad support for the Bill, and for his commitment to ensuring that the regulator is as robust as it can be. On that point, we have certainly found some early agreement.
As the hon. Member outlined, amendment 13 would extend the remit of the regulator to the care and support provided to residents in supported exempt accommodation and temporary accommodation, while new clause 8 would extend the remit to those types of accommodation when they are not social housing but are held by a registered provider.
Temporary accommodation and supported housing that meets the definition of social housing is already regulated under the regulator’s standards, and the Care Quality Commission already regulates the provision of personal care in supported housing. The support needs of people in supported housing are wide, varied and often complex compared with those living in general needs accommodation. That is why we are supporting targeted measures in the Supported Housing (Regulatory Oversight) Bill, introduced by my hon. Friend the Member for Harrow East, to tackle the issues we are seeing in supported housing. I echo the shadow Minister’s comments; I am very grateful that my hon. Friend is bringing his incredible expertise to the Committee.
While there are many excellent supported housing providers, the Government recognise that there are some rogue supported housing landlords. Let me be completely clear for the record: any abuse of the supported housing system will not be tolerated. The Supported Housing (Regulatory Oversight) Bill will introduce national standards to be applied to supported housing and to give local authorities new powers to introduce licensing schemes and other enforcement powers.
Temporary accommodation is a key safety net for homeless households in this country. The homelessness code of guidance is clear that, at a minimum, temporary accommodation must be free from all category 1 health hazards, as assessed by the housing health and safety rating system, and it must be suitable for all members of the household. Households have the right to request that the council reviews the suitability of their accommodation.
Siobhain McDonagh (Mitcham and Morden) (Lab)
On temporary accommodation for homeless families and the code of guidance, who enforces the code? Who knows whether councils are living up to it? Who inspects the accommodation with a third eye to see whether it meets the standards?
Dehenna Davison
I will follow that up with the hon. Member in writing after our sittings today.
Dehenna Davison
As I have just outlined, I will write to the hon. Member to pick up her point following today’s sittings.
The focus of the Regulator of Social Housing is on regulating the standards for registered providers of social housing. I believe that the regulator should remain focused on that vital role, and that greatly expanding its scope to include temporary accommodation could be a significant risk to its expertise. I do not believe that expanding the scope of the regulator into those areas, as proposed by the amendments tabled by the hon. Member for Greenwich and Woolwich, is the right way to address them. The regulator should continue to focus on ensuring that registered providers provide safe and high-quality social housing for tenants and on delivering the new consumer regime.
On that basis, I ask the shadow Minister to consider withdrawing his amendments today, but with a commitment from me to follow up with him before Report to see whether anything more can be done.
Bob Blackman (Harrow East) (Con)
It is a pleasure to serve under your chairmanship, Sir Edward. I thank the Minister and the shadow Minister for their compliments about me and my Bill. No doubt we will be debating it in one of these Committee Rooms in the not too distant future.
One concern about the position on supported housing is the number of regulators that get involved already. There is almost a confusion of regulation. There is another problem: as we legislators seek to plug gaps, the rogue landlords seek alternative ways of making huge amounts of money. We already know that nearly £1 billion in housing benefit was paid out last year on supported housing in exempt accommodation. Clearly, that was for people who are vulnerable and need help and support. They are from a wide variety of different backgrounds. They might be recovering drug addicts; they might be people who became temporarily homeless or people who have had mental or physical health problems. I could go through a long list of people, but they are vulnerable and need help and support.
However, I have a concern about the proposed amendments. They seek to plug a gap, but are they comprehensive enough? We need more discussion to make sure we have a comprehensive measure that includes everything and makes it clear who the regulator is. Given the interventions by the hon. Member for Mitcham and Morden, we want to make sure, as a Committee and as legislators, that the laws we introduce are actually enforced.
Eddie Hughes (Walsall North) (Con)
The shadow Minister made a very interesting point, and I believe his case has some merit. We have invested in pilots in several areas of the country so that we can explore the case more fully. When the Levelling Up, Housing and Communities Committee looked at the procedure, there was some frustration on the part of Members about the fact that we cannot easily compartmentalise the breadth of people who are supported in the accommodation, so a range of organisations have oversight of the quality of the accommodation provided, supported or otherwise. We need further work to be done through the pilots to make sure that any intervention we make does not have unintended consequences for the providers who provide excellent quality supported accommodation.
Bob Blackman
I thank my hon. Friend for that intervention. Clearly, while the amendments may have good intentions, he makes a good point. We do not want the good providers, who are doing a fantastic job in supporting people to rebuild their lives, to face unnecessary burdens and regulation. It behoves the movers of amendments such as these to ensure that we have covered all those bases.
We must therefore ask: even though the amendments look superficially beneficial, do we have a comprehensive series of measures that plugs all the loopholes and does not burden good providers? Rogue providers are smart; they will look at any gaps in the law and for all opportunities to exploit the system and vulnerable people. The sensible thing would be to withdraw the amendment and have further discussion so that, together, on a cross-party basis, we can make sure that the Bill ends up in the right place.
Siobhain McDonagh
I support the amendments tabled by my hon. Friend the Member for Greenwich and Woolwich. At the moment, we have two things going on. First, we have exempt accommodation, where private property developers access vulnerable people and place them in houses in multiple occupation, cream off large amounts of housing benefit and provide no support to those individuals. They are exploited and left until the police, in many cases, or mental health services come along and take them away. Secondly, neighbourhoods are completely terrorised by people who are vulnerable but unable to control their behaviour, and absolutely nobody regulates that.
I represent a suburban south-west London constituency. Do not get me wrong; properties are not cheap, but they are cheaper than in other bits of London. Companies such as Stef & Philips are exploiting wholesale every loophole and making large amounts of money to bring fear and distress to neighbourhoods and to the residents who occupy those premises.
Last week, a lady who lives in the Pollards Hill area came to my surgery. The 1930s semi-detached house next door to her had been converted into an HMO for five vulnerable tenants. There were no bins to collect the rubbish and no facilities to ensure people could live adequately. She lives next door and has cancer. One of the residents in that home had pulled a knife on her only the day before, and all the other vulnerable tenants in the house had to stay locked in their rooms to avoid that individual. Stef & Philips are making hundreds or thousands of pounds every week from that property.
In Ravensbury, another ward in my constituency, on Malmesbury Road, the same company had a man who was so vulnerable that the police raided the property and had to withdraw because he had a crossbow and they needed firearms support. The whole street was blocked off. That is St Helier estate, for any hon. Members who may know it. It is a beautiful local authority estate built after the first world war to provide homes fit for heroes. The house is beautiful, but not as an HMO for five vulnerable people. People in the street are terrified. Who knows how terrified the other residents in the property are? The company’s balance sheet goes up and up while people go out to work to pay ever-higher tax rates to sustain that company in exploiting people.
Sarah Owen (Luton North) (Lab)
My hon. Friend is making excellent points. That is the human impact of the lack of regulation and enforcement on rogue providers that are making millions out of very vulnerable people. Their impact is felt not only by the individuals who are being harmed, but by entire communities. Does she agree that although we do not want regulation for regulation’s sake, we need not just regulation but enforcement for those who are getting away with this scot-free right now? We do not just need legislation; we need the ability to enforce and act.
Siobhain McDonagh
I absolutely agree with my hon. Friend. If there is no regulation, this will just grow and grow. As mortgage interest rates go up and business for buy-to-let landlords becomes less profitable, more people are going to look at providing this style of housing, because they can exploit the housing benefit system. If that is not happening in the constituencies of all the hon. Members of this Bill Committee, it will be coming to them soon.
Eddie Hughes
The point I am about to make is non-political, given that I am going to use the example of Labour-led Birmingham Council. That council did pilot work, and its scrutiny committee, which was chaired by a Labour member, subsequently published a report. It was able to identify a number of improvements that it could make within the existing legislation. I fully appreciate that legal challenge is an option for landlords who have their claims turned down. However, the council was able to reduce the number of people coming through the pipeline to provide this type of accommodation, and it was able to improve the quality of that accommodation. There is some room for councils who are prepared to focus on this, to improve outcomes for local people within the framework of the existing legislation.
Siobhain McDonagh
I turn to Aves housing association, which was run by a man who was exposed by the BBC for running a former supposed housing association that is in fact a commercial enterprise. It specialises in parts of Pollards Hill and Longthornton in my constituency, which neighbour Croydon, and it routinely takes very vulnerable people to live in houses that are simply not big enough for conversion. It accesses people’s universal credit accounts and takes their money. When the housing benefit department at Merton Council discovered that, it decided not to pay housing benefit to Aves residents. That might seem sensible to most Committee Members. However, that then meant that 92 vulnerable people were not having their rent paid, so were vulnerable to eviction—at which point, Merton Council’s housing department and adult social services departments would have collapsed. Local authorities are in a bind. Do they take notice of what is going on—in which case, they get responsibilities they cannot meet—or do they turn a blind eye because, in the end, that is the only way they can manage?
Bob Blackman
The hon. Member is making a very clear case about the problems in her constituency. One problem that local authorities face is that they have no powers to prevent such properties from being turned over in this way. Does she agree that one issue we have to deal with, which is not addressed in this amendment, is that local authorities need powers? Those powers might be around planning permission to do with HMOs and HMO regulation, to control the type of housing that she quite rightly describes as being a challenge in her area; or they might be over a licensing system to make sure that the operators of supported housing projects are fit and proper persons who will not exploit their position.
Further, data-sharing should be spread across the country. These rogues might well jump from Merton to Croydon to somewhere else, because they know that the local authority does not know about them. However, that is not within the scope of the amendment, although it is in the scope of my Bill, which I will be debating later. Although we would all agree that the issues that the hon. Member has raised are a scandal and need to be addressed, we must be clear that that is not within the scope of the amendment.
Siobhain McDonagh
I believe that the regulator should have power to look at this area of housing. It is all very well for councils to get more powers, and I would be the first to agree with that, but many councils already have a lot of powers that they cannot use because they cannot afford to. They do not have access to social housing units. They do not have access to the level of environmental health officers that they need. They do not have access to the number of planning officers they need in the area of planning enforcement.
Sarah Owen
My hon. Friend hits the nail on the head. The pilot work that the hon. Member for Harrow East just spoke about is fantastic. We will take whatever we can from that and learn, but the point is that the councils and authorities that did that work had to have extra resources to use their existing powers. This is not just about legislating and enabling local authorities to have more powers; it is also about them having the funds and resources to use those powers.
Siobhain McDonagh
Absolutely, and I know the hon. Member for Harrow East will be aware of how few London councils ever prosecute anybody under their current powers. It is about regulation, but it is also about local authorities being able to use their powers. In the light of the recent Budget, local authorities’ powers will become even less well used if their finances continue to be squeezed.
Let us go back to Aves in Pollards Hill and Longthornton. I met the regulator and spoke about Aves and my concern about the exploitation of tenants. The regulator said to me, “We completely agree with you, but there is nothing we can do. We do not have the power to do anything.” Either we give the regulator the powers and do something about it, or we go on talking about it in a well-meaning way while the problem exponentially grows. I, for one, want to see some action rather than none.
Maggie Throup (Erewash) (Con)
It is a pleasure to serve under your chairmanship, Sir Edward. I think this is an important Bill. Amendment 13 and new clause 8 relate to supported exempt accommodation and temporary accommodation when provided by providers that are the subject of other parts of the Bill. The hon. Member for Greenwich and Woolwich made a very good case.
The hon. Member for Mitcham and Morden made a passionate speech, and I think we can all relate to what she was saying, because we all have examples in our constituency of providers who sound very legitimate and credible, but after they are looked into, it turns out that they are not. They are fly-by-nights who are just taking the opportunity provided by the loophole in regulations. We can all cite examples of HMOs that have been passed by councils because the councils do not have the powers to stop them. The impact on neighbourhoods is quite dire, and it really does destroy local communities.
While I appreciate the intentions behind the Opposition’s amendments, I think the better place to close the gaps in regulation would be in the Bill from my hon. Friend the Member for Harrow East. This measure is obviously needed, but I think this Bill is the wrong place for it. I hope to speak later about some of the specific issues in my constituency and the importance of regulating the providers and ensuring the provisions of the Bill are met, because they are so needed.
Matthew Pennycook
That was an incredibly informed and helpful debate. I just want to say at the outset that we fully appreciate how complex an area of law and regulation this is. I have done enough of these Committees to know that the Minister is not going to simply stand up and accept the amendments we have cobbled together just on the basis of my speech, however good it might have been.
I will try to respond to the points made, which I take in the constructive spirit they were offered in. I do not think many of the points made get to the heart of what the amendments are driving at. I agree with the hon. Member for Harrow East: there is a plethora of regulators in housing and planning generally, and I am concerned that we are creating overlap and confusion in various ways. I will come to how that might be true in relation to the ombudsman and the regulator when we discuss clause 5, but that is absolutely a point.
The Minister made the point well: the private Member’s Bill of the hon. Member for Harrow East, the Supported Housing (Regulatory Oversight) Bill, includes a range of targeted measures to address the scandal—we all agree it is a scandal—of rogue providers of exempt accommodation and temporary accommodation in many cases. However, as I made clear, that Bill does not address this gap. The hon. Member for Erewash said that if it is not covered by these amendments, it can be done via the Supported Housing (Regulatory Oversight) Bill, but it is not in that Bill. Perhaps it will end up in that Bill after Committee stage, in which case we will be entirely happy with that being a vehicle for it rather than this Bill, but it needs to be addressed.
Dehenna Davison
Absolutely, we will take this away. I would be grateful for the expertise of all on the Committee, including the hon. Member for Mitcham and Morden, who made an incredibly passionate case. Let us have a roundtable discussion about how best we can take this forward following Committee.
Matthew Pennycook
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
New clause 2—Regulator duty to report on safety defects—
‘(1) In fulfilling its consumer regulation objective under section 92K of the Housing and Regeneration Act 2008, the regulator must report to the Secretary of State on actions taken by registered providers to remediate unsafe external wall systems and other historic fire safety defects in social housing.
(2) A report produced under this section may make recommendations to the Secretary of State on further action required to sufficiently address identified issues.’
This new clause would ensure that in meeting its fundamental objective to support the provision of social housing that is well-managed and of appropriate quality, the regulator would be required to report to the government on the progress of building safety remediation.
New clause 3—Regulator duty to support provision of social housing—
‘(1) In fulfilling its economic regulation objective under section 92K of the Housing and Regeneration Act 2008, the regulator must–
(a) within six months of this Act receiving Royal Assent, and
(b) at intervals of no more than three years thereafter
provide a report to the Secretary of State on whether the supply of social housing in England and Wales is sufficient to meet reasonable demands.
(2) A report produced under this section may make recommendations relating to how to ensure that the provision of social housing in England and Wales is sufficient to meet reasonable demands.’
This new clause would ensure that in meeting its fundamental objective to support the provision of social housing sufficient to meet reasonable demands the regulator would be required to report to the government on adequacy of social housing supply.
Dehenna Davison
Clause 1 relates to the fundamental objectives of the Regulator of Social Housing and adds safety and energy efficiency of tenants’ accommodation and transparency. New clauses 2 and 3 seek to take that further and expand the role of the regulator into new areas.
New clause 2 relates to monitoring the remediation of unsafe cladding and other fire safety defects in the social housing sector. I want to make clear from the outset that nothing is more important to this Government than making sure people are safe in their homes. The tragic, horrendous case of Awaab Ishak, which we are all unfortunately now familiar with, has highlighted the crucial role of registered providers of social housing in making sure that happens.
The Bill sits alongside other key reforms that we have introduced in response to the Grenfell Tower fire, including the Building Safety Act 2022 and the Fire Safety Act 2021. New clause 2 is incredibly well intentioned, given what it seeks to achieve, but the Bill is not the correct vehicle for it. A duty should be placed on the Regulator of Social Housing to undertake such monitoring. The regulator is not a specialist fire or building safety body. The proposed new clause would be a significant expansion of the regulator’s remit. Currently, the regulator does not have the expertise to fulfil that function effectively.
The question of who should undertake that kind of role is, however, an important one for Government. The Department is evaluating options on how best to monitor and report on the progress made in remediating unsafe cladding and other fire-safety defects. It is important that the work is done at pace, but thoroughly. I understand that hon. Members will be keen to study its outcomes and implications for future policy, but I must reiterate that it would be improper to pre-empt it while it is ongoing by allocating responsibility for that highly important function without the benefit of fully understanding the options. We need to ensure that that work is undertaken by those with the correct skills, expertise and capacity. My concern with new clause 2, therefore, is that it would make for a hasty decision that might mean we do not achieve the desired outcomes in the optimal way.
I turn to new clause 3. The hon. Member for Greenwich and Woolwich is right to draw attention to the importance of increasing the supply of social housing. In the levelling-up White Paper, we made it clear that we want to
“increase the amount of social housing available over time to provide the most affordable housing to those who need it.”
Our £11.5 billion affordable homes programme will play an important role in achieving that aim, as will the measures we have taken to support increased council house building.
For its part, the regulator has an objective to support the provision of sufficient social housing. It discharges that role through its work to ensure that private registered providers are financially viable, efficient and well governed. In turn, that helps providers to obtain funding to enable them to deliver more social housing. However, I do not agree that we should make the regulator responsible for assessing the adequacy of social housing provision in England or, indeed, in Wales. I am concerned that such an additional role could divert resources away from the activities that should be the focus for the regulator, which is setting standards for social housing so that landlords are clear about expectations on them to deliver quality of housing, to monitor compliance with those standards and, where necessary, to undertake relevant enforcement action.
Organisations outside Government often publish their own analysis of the level of need for social housing. There are a number of different approaches to assess that, and not necessarily a single right answer. I am therefore not convinced that the regulator stepping in to provide its own assessment is the right approach. It should focus on the task at hand and on standards, quality and enforcement. On that basis we would not want to accept new clauses 2 and 3.
Matthew Pennycook
I thank the Minister for her explanation of the clause and for the response to the two new clauses tabled by the Opposition. As the Minister has made clear, with a view to providing for a stronger and more proactive consumer regulatory regime, the clause expands the regulator’s fundamental objectives as set out in the Housing and Regeneration Act 2008 to include those of safety, transparency and—following the well-deserved success of Baroness Hayman’s amendment in the other place on standards relating to energy demand—energy efficiency.
My response to the case that the Minister made against new clauses 2 and 3 has, thankfully, pre-empted a number of the points she has just made. New clause 2 seeks to ensure that in meeting its fundamental objective to support the provision of social housing that is well managed and of appropriate quality, under proposed new subsection (3)(a) of the amended 2008 Act the regulator would also be required to report to the Government on the progress of building safety remediation in the social housing sector.
According to the Department’s own figures, every one of the 160 social sector buildings identified as having unsafe aluminium composite material—ACM—cladding, similar to that which covered Grenfell Tower, have been remediated through the social sector ACM cladding remediation fund. When it comes to buildings in the social sector with unsafe non-ACM cladding systems, we know that, as of 31 October, 251 have applied for Government funding for remediation. Alarmingly, as things stand, not a single one of those 251 buildings has been remediated.
Perhaps more worryingly, we have no estimate of the total number of social sector buildings with unsafe non-ACM cladding systems, because social landlords can apply for Government funding only if the costs of remediation are unaffordable or if there is a threat to their financial viability. We have no idea whatsoever how many social sector buildings have other non-cladding building safety defects.
There is a wider debate to be had outside this Committee about social landlords’ restricted access to funding for non-ACM remediation work, given the impact that has on social tenants, whose rent payments are contributing to the costs of the works required, and on providers in terms of upgrade and maintenance works, services provided such as welfare advice and the supply of new social homes.
However, all new clause 2 seeks to achieve is to make the regulator—which, as a result of the Bill will now have to perform its functions with a view to supporting the provision of social housing that is safe—report to the Secretary of State on the progress of remediating unsafe external wall systems and other historical fire safety defects in social housing, and provides it with the opportunity to make recommendations to the Secretary of State on further action required.
Speaking for the Government in the other place in response to a similar amendment in the name of Baroness Pinnock, Baroness Scott of Bybrook argued, as the Minister just has, that the type of monitoring sought by new clause 2 would not be “appropriate” for the regulator to undertake because
“it is not a specialist health and safety body.”—[Official Report, House of Lords, 6 September 2022; Vol. 824, c. 114.]
I am afraid that we find that argument wholly unconvincing.
New clause 2 does not seek to impose a duty on the regulator to carry out inspections of social sector buildings that are either potentially unsafe or identified as unsafe and in need of remediation or to physically monitor the progress of remediation works. As such, it does not require the regulator to possess the relevant professional skills, expertise and capacity necessary for assessments of that nature. All it would require is that the regulator be responsible for reporting to the Government on the progress of remediation in respect of social sector buildings—on the overall number of such buildings identified as having defects and the progress of whether they have started and completed remediation.
Given that the regulator already collects data from registered providers to inform its regulation of standards, and that the Bill ensures that one of the regulator’s new fundamental objectives will be the safety of buildings, we believe it is entirely reasonable and appropriate to task it with reporting to the Government along these lines.
As the Minister made clear, the Government have been at pains over recent months to stress they are examining options for monitoring and reporting remediation progress in future. Yet, as we consider the Bill today, neither the Department nor the new Building Safety Regulator is providing accurate data with regard to the scale of the building safety challenge in the social housing sector, or progress toward meeting it; no firm proposals have been brought forward by the Government to address that gap; and we have no guarantees that appropriate measures will be forthcoming any time soon, although I take at face value what the Minister has just said.
The Bill rightly ensures that the provision of safe, high-quality social housing will be integral to the function of the regulator’s role. There can be no more important task in respect of social housing—I think we are agreed on this point—than to ensure that buildings that are either covered in combustible material or riddled with other non-cladding safety defects are made safe. New clause 2 would ensure the regulator monitors progress to that end and reports to Government. I urge the Minister to rethink. If the Government are not minded to amend the Bill as new clause 2 seeks, I urge them to bring forward other proposals for monitoring this important element of the remediation drive in the near future.
I turn to new clause 3. In a similar way to how new clause 2 seeks to place additional requirements on the regulator in relation to its fundamental objective to support the provision of social housing that is well-managed and of appropriate quality, new clause 3 seeks to ensure that, in meeting its fundamental objective under the 2008 Act to support the provision of social housing that is sufficient to meet reasonable demands, the regulator would also be required to report to the Government on the adequacy of social housing supply.
The problem to which this new clause relates is well known. While more people than ever are struggling to afford a secure place to live, nowhere near enough social homes are being built. Almost 1.2 million households in England are now languishing on a housing waiting list. The Green Paper that foreshadowed the Bill stated:
“Social housing remains central to our supply ambitions.”
Despite that, the Government are doing nowhere near enough to deliver the volume of social homes our country needs.
Not only are the Government failing to build the volume of social homes that we need, but by means of reduced grant funding, the introduction of the so-called affordable rent tenure, increased right-to-buy discounts and numerous other policy interventions, we would argue that they have actively engineered the decline of social housing over the past 12 years. The result is that not only were fewer than 6,000 social homes constructed last year but over 21,000 were sold or demolished—a net loss of 15,000 desperately needed genuinely affordable homes.
Bob Blackman
I agree with the shadow Minister that the provision of affordable social housing in this country is far too low. It has been far too low for far too long. That has been the case not just under this Government, but under successive Governments for more than 30 years.
The shadow Minister has put forward his case, and he quoted one report claiming that 145,000 units are required per year. The Levelling Up, Housing and Communities Committee and I have always taken the view that 90,000 units per year would be required just to get us back to where we should be. From that perspective, it is clear that there needs to be more investment in affordable social housing, and we need to get to a point where people have a place they can call home, a rent that they can afford, and the option to buy when their circumstances allow.
The new clauses seem to put extra burdens on the regulator, for example by requiring them to report on the amount of social housing there should be in this country. I do not think that is an appropriate role for the regulator. It is right that organisations, such as those the shadow Minister quoted—Shelter, Crisis, CIH and others—should be reporting and commenting to Government, but I do not think it is the role of the regulator to report to Government.
I think the role of the regulator is quite clearly to report on the condition of social housing. I hope as we go through the Bill—and I will challenge the Secretary of State on this particular issue—we will see some amendments that strengthen the role of the regulator to ensure that social housing providers are performing as they should be. That means providing a high-quality standard of accommodation. We have heard about what has happened in Rochdale, but the issue of the condition of property is not confined to Rochdale. It goes up and down the country.
We need to see dramatic improvements in the provision of not only the quantity of social housing, but the conditions within those units. It is a sheer scandal in this country that we are paying huge salaries to social housing providers who are pocketing the money while providing a very poor service for their tenants. We need to call them to account. I believe that comes through the role of the regulator. That is the way it should be. I hope we can see some strengthening of the Bill on that point through Government amendments, at least when we get to Report stage.
On safety defects, there is clearly an issue about data, performance and the funding of removing unsafe cladding and dealing with fire safety defects. The hon. Member for Greenwich and Woolwich will know that I have been on this case for quite some time—since before Grenfell. One of the key issues here is about whether the regulator should be reporting on it, but frankly I think the regulator should be enforcing it. They should be making sure the providers actually do their job of providing safe accommodation for people.
While I recognise that the new clauses are well-intentioned, I do not think they hit the nub of where we need to be going. I hope the Government will come forward with some new clauses to strengthen the Bill when we get to Report stage, particularly in light of the scandal in Rochdale and the conditions people are facing up and down the country.
Siobhain McDonagh
Thank you, Sir Edward, for your generosity in calling me. I realise I registered quite late that I wanted to speak.
Why are we sitting here in this Bill Committee today? We are sitting here because, under the coalition Government’s bonfire of the quangos, we set fire to the housing inspectorate and the Audit Commission in the belief that no regulation of damp or mould growth in properties was required, that all the adjudicator had to do was look at the financial structure of housing associations, and that that would be enough. What a terrible error that has been.
In my constituency, the largest social housing provider is Clarion Housing Association. After an ITV news programme about some of its standards, it was referred to the regulator. The regulator’s decision was that it could not investigate because there was not a systemic problem. That is where we have got to. How many of us were distressed by Awaab Ishak’s death? How many of us know that we have plenty of social housing units in our constituencies with the same damp and mould growth problems? At the moment we have no form of regulation that can tackle that.
The adjudicator does not go out and look at properties or inspect procedures. The adjudicator is interested in the financial structures. I would never argue that we should not look at the financial viability of a housing association, but I also want to know what it does when it has problems of damp and mould growth. I want to know that a Government inspector goes out and sample-tests and looks at properties.
We would never accept an Ofsted that did not inspect schools or a Care Quality Commission that did not go in and inspect hospitals, care homes or local authority social services, but we have accepted that the regulator has no responsibility for going into social housing properties and inspecting their conditions.
When we look at reducing regulation, we must remember Awaab Ishak, and remember that we do not have a regulator in our country that would do anything about that.
Dehenna Davison
I will be brief and just say that I recognise the arguments made by the shadow Minister, but I hope he recognises the arguments that I made in my opening statement. I have made a commitment to my hon. Friend the Member for Harrow East that before Report we will sit down to discuss the issues further and make sure the regulator has the teeth it really needs.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clause 2
Advisory panel
Matthew Pennycook
I beg to move amendment 14, in clause 2, page 1, line 18, at end insert—
“(2A) The Panel may provide information and advice to the Secretary of State about, or on matters connected with, the regulator’s functions and wider issues affecting the regulation of social housing (whether or not it is requested to do so by either the regulator or the Secretary of State).”
This amendment would enable the Panel to provide information and advice and to proactively raise issues affecting social housing regulation more generally directly to the Secretary of State.
The Chair
With this it will be convenient to discuss amendment 15, in clause 2, page 2, line 17, at end insert—
“(8) The Panel must be chaired by a tenant of social housing.
(9) The Chair is responsible for setting Panel meeting agendas.
(10) The majority of persons appointed to the panel must be tenants of social housing.”
This amendment would ensure that tenant representation on the advisory panel is mandatory and that tenants are able to influence effectively what information and advice is presented to the regulator in respect of issues affecting social housing regulation.
Matthew Pennycook
For all its technical complexity, the Bill is ultimately about those who live in social housing and overhauling regulation to ensure that they are treated fairly by landlords who are well run, responsive, transparent and accountable. In considering the detail of the Bill, we must never forget that the impetus for it was the deaths of 72 men, women and children in the early hours of 14 June 2017. Those 72 human lives were ended in an inferno fuelled by the highly combustible cladding system installed on the outside of the tower block in which they lived, despite the fact that tenants had repeatedly sounded the alarm about the building’s safety defects and the fact that warnings were going unheeded.
I have met and spoken to Grenfell United, as I assume the Minister and many other Members have. I once again pay tribute to them and the wider Grenfell community. I know that what the survivors and the bereaved are determined to achieve is not only justice, but lasting change in how social housing is regulated and the power that tenants themselves can exercise. We firmly believe that the empowerment of tenants must be at the heart of the Bill, and we believe that a key test of its robustness is whether it establishes mechanisms that will enable tenants to influence in practice the regulator’s approach to regulating standards; to shape any future changes to regulatory standards and codes of practice; and to proactively raise wider issues affecting social housing regulation and policy, not just with the regulator but with Ministers.
The Government ostensibly agree that tenants are at the heart of the Bill, and Ministers have repeatedly assured us that one of its primary objectives is to give social housing tenants a voice and ensure that it is listened to. Yet when it comes to providing ways in which tenant representatives can exert a measure of control over the work of the regulator, shape the future direction of the regulatory arrangements that the Bill establishes and proactively influence national regulation and policy so as to shape the services that tenants receive from their landlords, we feel that the Bill is somewhat lacking in ambition.
Dehenna Davison
I am grateful to the shadow Minister for making his case for amendments 14 and 15. Amendment 14 seeks to enable the advisory panel to provide information and advice and to raise issues affecting social housing regulation directly with the Secretary of State. The social housing White Paper made it clear that the purpose of the advisory panel was to provide independent and unbiased advice specific to the regulator on matters connected to regulation. Clearly, the views of tenants are central to that objective.
As the hon. Gentleman outlined, in parallel we also established the social housing quality resident panel, which will provide an opportunity for us to hear from tenants. The aim of the resident panel is to enable tenants to share their views directly with Government and Ministers on their approach to improving the quality of social housing, and on whether the Government’s interventions will deliver the changes that they want to see.
The resident panel is made up of 250 social housing residents from across the country and from diverse backgrounds. They met for the first time last week on 26 November, and will meet approximately monthly over the coming year, with opportunities for the agenda to be shaped by panel members. At that meeting, residents told the Secretary of State for Levelling Up, Housing and Communities, my right hon. Friend the Member for Surrey Heath (Michael Gove), that the most important issues to them were how repairs are dealt with, how landlords are held to account and how complaints are handled by their landlords and the housing ombudsman. The Department’s resident panel and the regulated advisory panel have a specific role and remit to ensure that tenants’ views are properly represented to both Ministers and the regulator.
Amendment 15 seeks to require a social housing tenant to chair the advisory panel and have responsibility for setting the agenda that the panel considers. It also seeks to ensure that social housing tenants comprise the majority of panel members. We share the notion that it is vital that tenants’ voices are heard, but it is important that the advisory panel considers the full range of regulatory issues that the regulator has to tackle. That means that we need to allow a diverse collection of voices to share their knowledge and opinions with the regulator.
Consumer matters are rightly at the forefront of the Bill but, equally, working to resolve some of the economic issues should not be diminished. Legislating for a tenant to chair and set the agenda and requiring the majority of the panel members to be tenants would not support what we are trying to achieve with the advisory panel. I am concerned that being too prescriptive in legislation about how the advisory panel must operate may prevent the panel from having the flexibility to decide how it best operates. In practice, I expect that all members of the advisory panel, along with the regulator, will shape how it works and what it considers.
We are committed to ensuring that tenants can effectively engage with the Department and the regulator, and that tenant voices are at the heart of social housing regulation and policy, but we do not feel that amendments 14 and 15 are necessary to achieve that so I ask the shadow Minister to withdraw them.
Matthew Pennycook
I thank the Minister for that helpful response, and I take on board the concerns she raised about the amendments.
I am slightly concerned about the lack of what we would consider to be true tenant empowerment. The quality resident panel is important, but it only lasts a year, so how will we get ongoing tenant engagement with the work of the regulator to inform how it operates, to shape future regulation, which is part of its remit, and to raise future issues of concern to tenants nationally, in terms of social housing regulation and policy? We do not think the Bill allows for that, and in all honesty I cannot understand the Government’s objection to allowing the advisory panel to notify Ministers directly, rather than the regulator, in certain rare circumstances. As the Minister said, the panel is at present constituted by the regulator, which appoints its membership, and it can only provide views directly to the regulator. We think there are some circumstances in which it may need to do otherwise. I hope the Minister takes away those points.
Eddie Hughes
Although there might be some deliberation about this mechanism, there are several mechanisms through which resident organisations are able to engage with Ministers and the regulator. I am delighted to see representatives of Grenfell United in the Public Gallery. There is a regular opportunity to meet Ministers, although it is not prescriptive and perhaps not as frequent as many would like, but the Government are certainly determined to build on it.
Matthew Pennycook
We recognise that Ministers meet tenants and tenant representatives frequently. My concern is that if tenants on the advisory panel have an issue that they feel is sufficiently serious that they need to bring it to the attention of Ministers, rather than the regulator, they should not have to rely on attempting to get a meeting with Ministers. There should be a mechanism through which they can put serious issues on the desk of the Secretary of State or the Minister if they feel that they, as well as the regulator, need to know about them. That is the point we are trying to address with amendment 14.
On amendment 15, I understand the Minister’s concerns about being too prescriptive, but I urge the Government to go away and think again about the membership of the advisory panel. I appreciate fully the need to have a diverse panel, but as I read clause 2(4), there is nothing on the face of the Bill to prevent the Government from putting one tenant or tenant representative on the panel and leaving it at that. There is no minimum quota for tenants, and we want tenant voices to be properly represented.
Bob Blackman
The shadow Minister is making a good point. We want to empower tenants, but his proposal could have an unintended consequence. Supposing tenant representatives on the board cannot agree among themselves who will be the chair, the panel could meet, but obviously that would be a difficult situation. There may potentially be social tenants from various parts of the country, representing different organisations. It is therefore not appropriate to prescribe a chair on the face of the Bill; that would defeat the objective. It might well be that we could find some suitable wording about the number of representatives, but I do not think we should force the panel to have a particular individual or representative as the chair.
Matthew Pennycook
The point about obvious issues around tenant representation and selection is well made, although those issues exist for the quality residents panel and the 250 members it selects. They have existed every time we have tried to create a body that gives voice to residents, so I do not think they are insurmountable. I welcome the fact that the hon. Gentleman thinks a minimum level of tenant representation on the panel is a good thing, and I urge the Government to think again about that.
We ultimately want to achieve tenant empowerment on the advisory panel so that tenants can be confident that, when the advisory panel gives information and advice to the regulator about the new system of regulatory standards, its voice is properly heard and it can bring issues to the attention of Ministers if required. I hope the Government will take away the points we have made about the amendments. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Dehenna Davison
Clause 2 makes it a requirement that the regulator will engage with a wide range of stakeholders, including tenants and landlords. It also sets out expectations about who should be represented on that panel. It is not just about the regulator asking a group of people for views once it has already made up its mind about what it wants to do. The panel is designed to be used to test and shape the regulator’s thinking. For example, we expect the regulator to engage the panel on the design and implementation of new consumer standards. The clause also empowers the panel to raise issues directly with the regulator that its members consider important. I hope the Committee will support the clause.
Question put and agreed to.
Clause 2 accordingly ordered to stand part of the Bill.
Clause 3 ordered to stand part of the Bill.
Clause 4
Power to charge fees
Dehenna Davison
I beg to move amendment 1, in clause 4, page 3, line 40, leave out “follows” and insert
“set out in subsections (2) to (6)”.
This amendment is consequential on Amendment 2.
The Chair
With this it will be convenient to discuss the following:
Government amendment 2.
Clause stand part.
Dehenna Davison
Clause 4 and Government amendments 1 and 2 deal with the regulator’s fee-charging powers. As we heard from a number of hon. Members on Second Reading, the Regulator of Social Housing must be provided with the necessary funding to enable it to deliver the outcomes the Bill is designed to achieve.
Once the new consumer regime is implemented, the regulator will see substantial growth in its regulatory activity, which means its costs will increase significantly. It is Government policy to maximise the recovery of costs of arm’s length bodies, so clause 4 will refine the existing fee-charging power to allow for the cost of some additional functions to be recovered, and to charge fees that cover costs of activities that may not be connected to the specific fee payer, such as the cost of investigation and enforcement. Any significant changes to the design of the regime will be consulted upon and require ministerial approval.
Government amendments 1 and 2 also address the regulator’s fee-charging powers. The amendments remove specific provision allowing the regulator to charge following the completion of inspections, if authorised by the Secretary of State by order. The existence of that special provision relating to fees for inspections is no longer necessary given the changes we are making to the regulator’s general power to charge fees. That power will now allow it to cover the cost of inspections in its fees for initial and continued registration.
Leaving the provision in legislation erroneously risks causing confusion and casting doubt on the regulator’s ability to set fees to cover inspections as part of its general fee-setting power. As such, the change serves to ensure that there is greater clarity and consistency in this legislation.
Clause 4 establishes the parameters to the regulator’s fee-charging powers and makes clear that it can charge the sector for costs that may be unconnected to the specific fee payer. Government amendments 1 and 2 support clause 4 by delivering a technical change that will ensure there is no confusion over the powers available to the regulator to deliver maximum cost recovery. On that basis, I commend the clause to the Committee and beg to move the amendments.
Matthew Pennycook
I thank the Minister for that explanation of Government amendments 1 and 2. As she makes clear, clause 4 amends section 117 of the Housing and Regeneration Act 2008 to clarify the extent of the regulator’s fee-charging powers. New subsection (4A) adds to the 2008 Act and makes it clear that the regulator has the power to recover the cost of activities it does not currently charge social housing providers for.
If I understood the Minister correctly, Government amendment 2 revises section 202 of the 2008 Act because the powers in new subsection (4A) are sufficiently broad to cover charging providers fees for inspections. In short, as I hope she agrees, this is just a tidying-up exercise, the rationale for which is that the power is being omitted from section 202, concerning inspections only, because it more properly fits within section 117, concerning fees generally, to ensure that references to fee charging are all in one place in the 2008 Act. If that is the case, and amendment 2 in no way prevents the regulator from charging fees for inspections, we take no issue with it, because it is important that the regulator is able to charge fees to cover the significant costs involved in overseeing the comprehensive and rigorous Ofsted-style inspections regime that the Bill introduces.
The amendment raises wider issues relating to the resourcing of the regulator. Since the Bill’s publication, we have consistently expressed concern about the very real risk that the regulator will struggle to discharge its new functions and that it will not be adequately resourced to perform its enhanced role, in particular in relation to inspections. Prior to the Bill’s publication there were already concerns, expressed by the Select Committee and others, as to whether the regulator had the resourcing, skills and capacity to continue to regulate economic standards adequately, given the complex financial and corporate structures proliferating in the sector.
The new consumer regulatory regime will impose significant burdens on the regulator. The Minister stated on Second Reading that the Government are
“firmly committed to ensuring that the regulator has the resources that it needs not only to deliver the new consumer regulation regime but to ensure that it continues to regulate its economic objectives effectively.”—[Official Report, 7 November 2022; Vol. 722, c. 83.]
She also suggested that the Government were potentially minded to introduce changes to the fee regime to ensure that the regulator is funded appropriately. We accept that the Government have made limited additional funding available this financial year to support the new regime, but we are concerned that there may still be a resourcing challenge for the regulator. I would welcome any further assurances from the Minister that the regulator will have all the resources it needs to discharge the enhanced functions that the Bill requires of it.
Dehenna Davison
I am grateful to the shadow Minister for raising the question of resourcing. We touched on this on Second Reading, as he highlighted. He is right that in this financial year we are providing £4.8 million to aid the regulator in its vital work, but this is why it is so important that we get the fee charging regime right—to ensure that the regulator is properly resourced. As we have discussed today, on Second Reading and in the other place, the regulator needs the teeth to be able to do its job, and a huge part of that is resourcing. He is right that, effectively, we are tidying the legislation up to make it a bit neater and ensure further clarity, so I hope he will support these amendments.
Amendment 1 agreed to.
Amendment made: 2, in clause 4, page 4, line 16, at end insert—
‘(7) In section 202 of the Housing and Regeneration Act 2008 (inspections: supplemental) omit subsections (4) to (7).’—(Dehenna Davison.)
This amendment repeals the provisions of the Housing and Regeneration Act 2008 which provide specific powers to enable the regulator to charge registered providers of social housing fees for inspections.
Clause 4, as amended, ordered to stand part of the Bill.
Clause 5
Relationship between regulator and housing ombudsman
Question proposed, That the clause stand part of the Bill.
Matthew Pennycook
I will be brief, but there is an issue that we want to highlight in relation to clause 5, which is about the relationship between the regulator and housing ombudsman. Clause 5 amends the Housing and Regeneration Act 2008 and the Housing Act 1996 to add measures on the relationship between the two bodies, so that they can exchange information quickly and effectively to provide better protection for tenants, all of which is entirely to the good and uncontroversial. However, consideration of the clause provides me with an opportunity to seek clarification from the Minister about the precise role of each body in the reformed regulatory regime that the Bill establishes.
Taken at face value, the role of each body is clearly delineated: the regulator regulates registered providers in England, while the housing ombudsman seeks to resolve complaints from individual residents about their registered provider. The regulator operates on a top-down basis, and the housing ombudsman operates on a bottom-up basis. However, when one considers how the reformed regulatory regime will operate in practice, things start to appear somewhat more complicated.
First, if my reading of the Bill is correct, the regulator appears to be able to intervene in individual complaints. Clause 31, for example, enables the regulator to arrange for an authorised person to take emergency remedial action in respect of individual premises following completion of a survey. Presumably, it is therefore necessary for the regulator to receive a complaint from a tenant who fears they are at risk of an imminent serious health and safety risk. Otherwise, how could the regulator order the necessary survey of a given premises? It may be that that is not the case, and it will be for the ombudsman to refer an individual complaint to the regulator to allow them to make use of the provisions in clause 31; if that is the case, it is not clear from the Bill.
Secondly, following revisions to the housing ombudsman scheme enacted in September 2020, the ombudsman has a responsibility to publish a complaint handling code, enjoys a new power to issue complaint handling failure orders that can relate to a landlord’s overall complaint-handling policy and, crucially, has the ability to investigate beyond an initial complaint to establish whether evidence might indicate a systemic failing by a registered provider. It may be that the ombudsman can address such systemic failings on the part of registered providers on the basis of suggested changes to their policies only with the regulator responsible for exploring whether changes to their systems are necessary, but again that is not immediately clear in the Bill.
Eddie Hughes
I understand the point that the hon. Gentleman is making, but it is based on the premise that these bodies operate in a completely siloed fashion. The relationship between them is a fluid one; they speak regularly and consider complaints and points that have been raised, which come to them from either direction. They work in a collaborative fashion and are then able to identify who should best proceed with a particular case. Obviously, it is governed by a memorandum of understanding, but it is a much more fluid and collaborative arrangement than that.
Matthew Pennycook
I thank the hon. Gentleman, and I fully understand his point. I met with senior staff from the housing ombudsman yesterday, and we were talking precisely about the ways in which the respective roles operate and how they could be clarified. What these examples seek to illustrate is that there is still an obvious risk of overlap and duplication of roles in respect of these two bodies. One could argue, as the hon. Gentleman just has, that those issues can be resolved by means of updating the non-statutory memorandum of understanding that already sets out the functions of both organisations and how they work together, but that throws up two distinct issues in and of itself.
First, is it appropriate for us to leave these matters to the two bodies themselves to resolve, rather than clarifying on the face of the Bill the precise role of each body in the new regulatory regime, so as to avoid the duplication of functions and potential gaps in coverage—even if only in the short term, before they update that memorandum of understanding to reflect the new regulatory system of proactive consumer regulation?
Secondly, I am sure that hon. Members have been contacted by tenants who are aware that the Bill is progressing through the House. The expectations around the Bill are such that, after it receives Royal Assent, tenants who feel that they have not secured appropriate redress by means of a standard complaint to their landlord and believe that their grievance might be systemic in nature will understandably be uncertain about whether they should approach the ombudsman or the regulator with their complaint. I appreciate that the Department is alive to the risk, has produced guidance in the form of a fact sheet and is apparently delivering a communications campaign to tenants so that they know where to go and are well informed but, without greater clarity prior to Royal Assent about the precise roles of each body in the regime established by the Bill, I fear that neither will be sufficient to prevent a large degree of confusion. When debating this matter in the other place, Baroness Scott of Bybrook conceded that fears about confusion of the kind that I alluded to are legitimate, and that greater clarity is required as a result; yet, despite her promise to take the matter back to the Department, the Government are not amending the Bill to provide greater clarity or committing to take any further concrete steps—that I am aware of, at least—to ensure that confusion will be avoided.
As Shelter and others have argued, it is essential that the roles of the regulator and the housing ombudsman are clearly defined, that tenants and tenant groups understand the appropriate way to make complaints and that any complaints process or system is easy to use, accessible and effective. I would be grateful if the Minister provided greater clarity today and, if not today, in writing. I hope that, in general terms, she will assure me that the issues that I have highlighted will be both considered and acted on by the Department before the Bill receives Royal Assent.
Dehenna Davison
I am grateful to the shadow Minister for raising his concerns and giving me the opportunity to provide some clarity. We will take it from the experience of one particular tenant, if we may. If a tenant has a complaint, they should first go to their landlord but, if that complaint cannot be resolved between tenants and the landlord, it can be escalated to the housing ombudsman to investigate individual complaints from tenants. If the ombudsman’s investigation finds instances of maladministration on the part of the landlord, the ombudsman can issue orders to that landlord to put things right for the complainant. That can include requiring the landlord to pay compensation to the complainant or to undertake repairs.
If an investigation raises a potential breach of a regulatory standard or there is evidence of systemic failure by the landlord, the ombudsman can refer the matter to the regulator. In situations where the regulator has concerns that the provider is failing to maintain the premises in accordance with the regulatory standards, it can conduct a survey and, following the implementation of this Bill, arrange for emergency repairs to remediate the issue in cases where there is a risk of serious harm to tenants that is not being addressed by the landlord.
Matthew Pennycook
That is useful clarification. If I have correctly understood what the Minister is saying, emergency remedial action under clause 31 of the Bill stems, in the first instance, from a referral from the ombudsman. Let us think about that process in detail. To get to the ombudsman, a tenant would have to exhaust all stages of their resident provider’s internal complaints process, which is three stages in most cases. It takes about a year to get through it. They would then have to go to the ombudsman, who has a huge backlog. Clause 31 is about emergency remedial action that poses an imminent threat to health and safety. I urge the Government to think again about how, in particular, clause 31 operates because tenants will need to give notice to the regulator about specific clause 31 failures far quicker than the process she has just described.
Siobhain McDonagh
The situation gets even more complicated when a tenant exasperatedly says, “I want to go to a lawyer” and then the whole thing closes down.
Matthew Pennycook
We are testing the patience of Sir Edward and the rules, but the point my hon. Friend highlights is a genuine one about the complication of legal matters and whether tenants abandon complaints at whatever point, which I hope adds to the weight of the point that I have just made. It is not immediately clear, and we have to be clear with, most importantly, tenants once this Bill is in force about where they go and how they can seek redress under the provisions of the Bill as quickly as they need to. As I said, in the case of clause 31, the process the Minister has described does not seem like it is fast enough to ensure that emergency remedial action of the kind provided for by clause 31 will happen. I hope the Government will take this and those other points away.
Dehenna Davison
Again, I am grateful to the shadow Minister and to the hon. Member for Mitcham and Morden. On the shadow Minister’s point about communications ensuring that tenants know where to go and how this process works, we have been working with organisations that represent landlords, social housing residents and the housing ombudsman service. We delivered communications and marketing campaigns in 2021 and this year to ensure that social housing residents were aware of how to make a complaint and how to seek redress where appropriate. We are putting in the work through communications to ensure that tenants understand the process, but I have heard his points on timeliness and I will endeavour to take that away.
Question put and agreed to.
Clause 5 accordingly ordered to stand part of the Bill.
Clauses 6 to 9 ordered to stand part of the Bill.
Clause 10
Appointment of health and safety lead by registered provider
Question proposed, That the clause stand part of the Bill.
Matthew Pennycook
Clause 10 is not contentious, and we broadly welcome it, but I would appreciate some clarification from the Minister on a specific issue arising from it. At present, proposed new section 126B ensures that
“The functions of the health and safety lead”
are to
“monitor the provider’s compliance with health and safety requirements”
and to notify the provider’s responsible body of any material risk to or failures of compliance, and to advise on steps to ensure the provider addresses them.
As Ministers may be aware, the Local Government Association, among others, has inquired what—if any—channels of communication or reporting mechanisms will exist between the health and safety leads of registered providers and the regulator itself. The LGA also highlighted the obvious need for sufficient new burdens funding in the case of local authority landlords. Will the Minister provide answers today or in writing to the following questions? First, did the Government intend to establish any direct permanent relationship between the regulator and RP health and safety leads? Secondly, what is the rationale for not requiring health and safety leads to report any material risks or failures of compliance directly to the regulator, as well as the responsible body, as a matter of course? Thirdly, can the Minister guarantee that the Government will make sufficient new burdens funding available to local authorities to fully implement the provisions in the clause?
Dehenna Davison
I will follow up in writing with a bit more clarity and specific detail on the questions the shadow Minister has raised.
Question put and agreed to.
Clause 10 accordingly ordered to stand part of the Bill.
Clause 11
Electrical safety standards
Question proposed, That the clause stand part of the Bill.
Matthew Pennycook
We welcome the Government’s decision, in response to concerns raised during the passage of the Building Safety Act 2022, to carry out a consultation on the introduction of mandatory checks on electrical installations for social housing at least once every five years and to include measures within this Bill to partially implement such checks—only partially, because the section of the Housing and Planning Act 2016 that this clause seeks to amend is concerned with properties let by landlords, not owner-occupier leaseholders. That is an important distinction, for reasons I will explain.
As we know, there is currently no legal requirement in England for social landlords or leaseholders to undertake electrical safety checks of their dwellings. The situation is distinct from that in the private rented sector, where the Housing and Planning Act introduced mandatory safety checks on electrical installations at least once every five years.
We know that fires in numerous tower blocks, including Grenfell, Shepherd’s Court, and Lakanal House, were caused by electricity. Home Office fire data shows a consistently high level of accidental electrical fires in high-rise buildings with 10 or more flats. Campaign groups such as Electrical Safety First have been at pains to stress that those buildings were mixed-tenure buildings containing an assortment of owner-occupier leasehold and social rented units and that there is therefore a case, given that the fire safety of a building depends on the safety of all the units within it, for ensuring parity in electrical safety standards across all tenures in high-rise residential blocks.
The Government’s own consultation on this issue noted that the National Federation of ALMOs supported introducing electrical safety requirements for owner-occupiers in mixed-tenure blocks and highlighted that properties being considered by authorities for London’s right to buy-back programme often have electrical installations that are
“in a state of significant disrepair.”
Given that we know that many high-rise social housing blocks contain owner-occupied flats owned on a leasehold basis, it surely cannot be right that a leaseholder living next door to a social renter will not have their electrical installations mandated to be checked every five years. To put it another way, what good is having the electrical installations of two thirds of a building checked every five years if the other third is not? The risk of a potentially life-threatening fire obviously does not discriminate by tenure.
Bob Blackman
This is a very significant point, particularly with what happened at Grenfell. We should reflect on that carefully. Who does the hon. Gentleman suggest should carry out the inspections and how would they be enforced? One of the problems that is clearly still relevant is people buying second-hand white goods that are not safety checked, which could then be faulty and cause electrical fires. In his research, has the hon. Member come up with any proposals as to how this measure could be implemented and work could be undertaken?
Matthew Pennycook
I thank the hon. Gentleman for that point—it is a point well made. I do not have a comprehensive answer to hand. There are provisions in this clause that apply to mandatory electrical safety checks for social rented properties. There are similar requirements in place for the private rented sector. My instinct is that it would seem obvious that those could be applied to the owner-occupier sector in a way that the provisions in the clause perhaps could not be. Whatever way we cut it, what we want to see are mandatory checks on all electrical installations in all units in high-rise buildings, because, as I said, fire does not discriminate between tenure. I hope the Minister will take the points away for further consideration.
Dehenna Davison
The shadow Minister is right to highlight the consultation, which concluded in August. It included a call for evidence seeking views on whether leasehold properties in mixed tenure social housing blocks should have mandatory five-year checks. My hon. Friend the Member for Harrow East was right to say that we need to get this mechanism right to ensure that people living in mixed-use blocks are protected. I am grateful to the shadow Minister for his pragmatism on this point. We are still assessing the responses to the consultation, so it is a bit too early to say what the outcome will be and we do not wish to pre-empt it. However, we will announce further details as the work progresses, and I will endeavour to keep the shadow Minister informed.
Question put and agreed to.
Clause 11 accordingly ordered to stand part of the Bill.
Clauses 12 and 13 ordered to stand part of the Bill.
Schedule 1 agreed to.
Clause 14 ordered to stand part of the Bill.
Schedule 2 agreed to.
Clauses 15 to 20 ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned.—(Julie Marson.)
Social Housing (Regulation) Bill [ LORDS ] (Second sitting)
The Committee divided: - Ayes: 7 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
The Chair
With this it will be convenient to discuss new clause 4—Persons engaged in the management of social housing to have relevant professional qualifications—
“After section 217 of the Housing and Regeneration Act 2008 (accreditation) insert—
‘217A Professional qualifications and other requirements
(1) The Secretary of State may, by regulations, provide that a person may not engage in the management of social housing or in specified work in relation to the provision of social housing unless he or she—
(a) has appropriate professional qualifications, or
(b) satisfies specified requirements.
(2) Regulations specifying work for the purpose of subsection (1) may make provision by reference to—
(a) one or more specified activities, or
(b) the circumstances in which activities are carried out.
(3) Regulations made under this section may, in particular, require—
(a) the possession of a specified qualification or experience of a specified kind,
(b) participation in or completion of a specified programme or course of training, or
(c) compliance with a specified condition.
(4) Regulations may make provision for any of the following matters—
(a) the establishment and continuance of a regulatory body;
(b) the keeping of a register of qualified social housing practitioners;
(c) requirements relating to education and training before and after qualification;
(d) standards of conduct and performance;
(e) discipline and fitness to practise;
(f) removal or suspension from registration or the imposition of conditions on registration;
(g) investigation and enforcement by or on behalf of the regulatory body, and appeals against the decisions or actions of the regulatory body.”’
This new clause would require managers of social housing to have appropriate qualifications and expertise.
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Dehenna Davison)
As I said on Second Reading, the Government are fully committed to driving up housing management standards by improving the professional behaviours, skills and capabilities of all staff in the sector. The Grenfell tragedy and our subsequent social housing Green Paper consultation highlighted the fact that many staff did not listen to or treat residents with respect, provide a high-quality service or deal appropriately with complaints. The circumstances surrounding the death of Awaab Ishak have once again shown the tragic consequences that can occur when staff lack empathy and when tenants are not listened to. That is why clause 21 makes provision to enable the Secretary of State to direct the regulator of social housing to set standards for the competence and conduct of social housing staff. Registered providers will be required to comply with specified rules concerning the knowledge, skills and experience of social housing staff. They will also be required to comply with specified rules concerning the conduct expected of such individuals when dealing with tenants. Those factors are crucial in determining the quality of services provided to tenants.
Our approach offers a holistic solution to the issue of professionalisation. It champions the value of skills, knowledge and experience, and maintains landlords’ flexibility in choosing the most appropriate training programmes and qualifications to equip their workforces. The standards set under this clause will ensure that social housing staff develop the core skillsets and behaviours required to treat tenants with the empathy and respect that they deserve. They will also empower staff to take appropriate action to support tenants.
New clause 4, tabled by the shadow Minister, takes a different approach to achieving professionalisation. It gives the Secretary of State the power to stipulate, through regulations, that a person
“may not engage in the management of social housing or in specified work in relation to the provision of social housing unless he or she—
(a) has appropriate professional qualifications, or
(b) satisfies specified requirements.”
As both myself and the Secretary of State set out on Second Reading, there is a real risk that mandating qualifications for all housing management staff would lead to the reclassification of housing associations to the public sector. The sector is close to the threshold for reclassification, and we saw that happen in 2015. Since then, a number of deregulatory measures have had to be taken before housing associations could be reclassified back to the private sector.
To make this point very clear, reclassification would bring around £90 billion of debt and all housing association annual spending on to the public ledger, and would likely reduce the ability of housing associations to improve the quality of their stock and build new homes. We have to be mindful of that risk and that outcome, which could be harmful to tenants.
However, we have listened carefully to the arguments made both in this House and the other place in support of mandatory qualifications. As I committed to do on Second Reading, I met with my right hon. Friend the Member for Maidenhead (Mrs May) to discuss this issue before the Bill reached Committee stage. We are continuing to look at whether there is any scope to include qualifications requirements in the competence and conduct standards without triggering reclassification. If we can identify a solution, then we will be able to bring that forward on Report.
We continue to believe that the existing provisions in the Bill, which will enable us to direct the regulator to set standards for the competence and conduct of all staff, will be an effective means of professionalising the sector. Our approach has been informed by the findings of our professionalisation review, which we will publish in full early next year. There is no doubt that housing management qualifications are an important aspect of professional development for some staff. Our review heard no clear evidence that such qualifications in and of themselves lead to better staff behaviours or improved tenant experiences. Qualifications such as those offered by the Chartered Institute of Housing will be an important part of how landlords ensure their staff have the skills, knowledge, experience and behaviours they need to deliver professional services, as required by the competence and conduct standards. Qualifications will sit alongside external and in-house training and more informal developmental tools such as staff supervision, mentoring and reflective practice.
Our review findings echoed what we heard after the Grenfell tragedy and more recently in relation to the death of Awaab Ishak—that what tenants most want and need is for all of the staff they deal with, whether housing managers, officers, or contact centre staff, to treat them with respect and empathy, to listen carefully and take appropriate and timely actions in response to their issues and concerns. We heard that these behaviours, and the interpersonal skills and attitudes that underlie them, are more likely to be achieved through a combination of organisational culture change led by senior executives and boards, adoption of codes of ethics and values, delivery of bespoke on-the-job training and effective supervision by experienced staff, than they are necessarily by formal qualifications.
The review also highlighted how important flexibility is in designing staff development programmes, given the sector’s diverse structures, operating models, role types, and breadth of service provision. Mandating qualifications for all housing management staff could hinder landlords in delivering the right mix of qualifications, training and development for their staff. Through the review we also heard that mandating qualifications for all staff would likely add to the recruitment and retention challenges faced by many landlords. Recruiting staff who have the right attitudes and aptitudes is more important to building a caring and empathetic workforce than employing people who possess formal qualifications. So we are concerned about the recruitment issues in that regard.
The standards that we are bringing forward will drive a holistic and organisation-wide approach to professional development, and deliver the empathetic, forward-looking and professional housing services the sector deserves, with staff who treat tenants with respect and act swiftly to remedy issues.
Dehenna Davison
Two to choose from—I give way to my hon. Friend the Member for Harrow, East.
Bob Blackman
The clause refers to the standards and competence that we expect to be achieved in this sector, and the amendment goes further and expands on them. However, it is silent on sanctions when they are not achieved. It is all very well having qualified people, but, if they do not perform properly, sanctions have to be available and directions by the Secretary of State should be possible. I wonder whether my hon. Friend will look at how we might strengthen the position when we get to Report stage.
Dehenna Davison
I am grateful to my hon. Friend. I will respond to him and then perhaps I will have answered the question that my hon. Friend the Member for Walsall North wanted to ask. It is right that the regulator must have the right powers in place to deal with breaches of its standards. With regard to competence and conduct, the Bill enables the regulator to require providers to produce and implement a performance improvement plan to be approved by the regulator. If a provider fails to implement a plan, the regulator can issue an enforcement notice and levy an unlimited fine if that notice is not complied with. So the regulator will have teeth to ensure the kind of conduct that we expect. I hope that that answers the question from one hon. Friend.
Eddie Hughes
Anyone who has listened to the Grenfell Tower inquiry—especially the podcast, which provides a great summary of the challenges that were faced—will know that a number of tenants encountered members of staff who simply were not appropriately qualified to carry out their role. As a result, the tenants did not get the experience, support and help that they so rightly deserved. So, while I fully appreciate that it is appropriate to recruit for aptitude—this is a vocational area for many—it is incredibly appropriate to make sure that staff are trained for their role.
Dehenna Davison
I am grateful to my hon. Friend. His expertise on this matter is welcome to all of us, and I thank him for all the work that he did as Minister on this really important body of work. He is right. That is why we have taken this away and are looking at what more we can do around professional qualifications, without that risk of reclassification. I hope that, following Committee stage, I will be able to report on what progress we have made before we reach Report stage.
It is important that we get this process right. We will continue the dialogue that we have already started with key stakeholders such as Grenfell United, Shelter and the CIH before we issue a statutory consultation on the direction itself. The regulator will then also consult on its draft standard before it comes into force. This Committee can be assured of our intent to take on board fully the views of both tenants and providers in developing the way forward. I have already spoken a little about compliance and sanctions if standards are not complied with, so I will leave that point there.
To summarise, the Government’s ambition is to build an empathetic, qualified and skilled social housing workforce. We want to bring about a wholesale organisational and cultural change, which we all recognise is desperately needed. We remain firm in our belief that our approach and the clause will deliver the professionalisation of the social housing sector, but we will of course continue to explore options for qualification requirements that would not trigger reclassification and would deliver the right outcomes for tenants. I commend the clause to the Committee and, on the basis of what I have outlined, I ask the shadow Minister not to move his new clause.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
We welcome the concession made by the Government in the other place on professional training and qualifications, and the resulting inclusion of the clause in the Bill. However, if we are to be certain that this legislation will expedite the professionalisation of the sector, we are absolutely convinced that the Government need to go still further.
As the Minister said, the clause amends section 194 of the Housing and Regeneration Act 2008 by adding a proposed new section allowing the regulator to set regulatory standards on the competence and conduct of social housing managers, and making it clear that such standards may require providers to comply with specified rules relating to knowledge, skills and experience. However, the clause as drafted includes no requirement for those involved in the management of social housing to meet objective professional standards. We therefore agree with, among others, Grenfell United and Shelter, that it therefore risks introducing an insufficiently high bar for registered providers in respect of the professional training that they implement.
New clause 4 seeks to strengthen the Bill in relation to professionalisation by amending section 217 of the 2008 Act, concerning accreditation, to require managers of social housing to have appropriate objective qualifications and expertise.
Sally-Ann Hart (Hastings and Rye) (Con)
On professional qualifications, I completely understand that we need to have properly qualified people overseeing those in social housing and giving them support, but most professions—whether lawyers, accountants, firemen or police—have a professional body. What professional body does the hon. Gentleman propose should be behind social housing, because I do not think that there is one, is there?
Matthew Pennycook
I will touch on that. The Chartered Institute of Housing does a considerable amount of work in this area. For reasons I will come on to, however, the review that it is undertaking perhaps does not go as far as we need in the ways in which we think this legislation must be amended to drive professionalisation along the lines that many groups are calling for.
As I was saying, we think it is vital that those requirements should be put on the face of the Bill. As a result of the progressive residualisation of social housing over the past 40 years, it is now overwhelmingly let to those most in need. According to the latest English housing survey data, half of social renters are in the lowest income quintile, compared with 22% of private renters and 12% of owners; more than half of all households in such tenure have one or more members with a long-term illness or disability; and more than a quarter are 65 or over. We also know—this is certainly the case from my own post bag—that many social tenants find themselves facing intimidation by criminal gangs, domestic abuse and racial harassment, and that a minority are in desperate need of urgent moves to escape serious youth violence. We will return to that point when we debate new clause 1 in the name of my hon. Friend the Member for Dulwich and West Norwood.
As a result of frequently having little voice or power, and because there is a chronic shortage of social housing, tenants have few if any options to move if they receive an unprofessional service from their landlord. They face significant barriers when it comes to challenging poor conditions. We therefore must do more to ensure that those managing the homes of social tenants are properly qualified to do so and that they have undergone the necessary training, for example in anti-discriminatory and anti-oppressive practice, to ensure that they are treating tenants fairly and providing them with the necessary support. We rightly expect those working in other frontline services, such as education and social care, to have the professional qualifications and training necessary to carry out their work effectively, and to undergo continuous professional development. We should expect no less for those managing social homes.
Bob Blackman
The shadow Minister is applying quite a long list of prescriptions, and I think Members on both sides of the Committee would probably agree with much of what he is saying. One of the problems with putting such provisions into the Bill is that they are very difficult to amend at a future time. I accept that what he is proposing now is that regulations “may” be made; I wonder whether a better approach might be for a Government amendment to set out that regulations may be made. The prescription he has put in his new clause could then be made under regulation and, therefore, be easier to amend in the event that matters change. Otherwise, we would have to introduce primary legislation.
Matthew Pennycook
I do not want to engage the hon. Member in a prolonged discussion about “may” and “must”—we had enough of that with his private Member’s Bill. We are open to a discussion about how to proceed, but what we need at this stage is a commitment from the Minister that the Government are going to move on objective professional qualifications and training, rather than leaving the Bill as is. If that requires regulations to be moved in due course, we would be open to that, but let us see what the Government bring back on Report.
We will press our new clause to a vote at the appropriate moment to underscore how strongly we feel that this is one of the areas on which the Government must move by Report stage, to ensure that the legislation is as robust as it can possibly be.
Dehenna Davison
I will keep this brief. I am grateful to the shadow Minister for outlining his concerns, which were mentioned on Second Reading. The commitment I can give is that we are seriously looking at the issue and seeing how far we can go without that risk of reclassification. I appreciate his reasoning behind wanting to push the new clause to a vote; I hope in the meantime that he will be inclined to change his mind before we get to that point.
Question put and agreed to.
Clause 21 accordingly ordered to stand part of the Bill.
Clause 22
Standards relating to information and transparency
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss new clause 9—Application of Freedom of Information Act 2000 to registered providers—
“(1) Within six months of this Act receiving Royal Assent, the Secretary of State must by order designate registered providers of social housing as public authorities for the purposes of the Freedom of Information Act 2000.”
This new clause would bring registered providers of social housing within the scope of the Freedom of Information Act 2000.
Dehenna Davison
It is essential that social housing tenants should be able to access relevant information about their landlords and their homes. Greater transparency will empower tenants and drive providers to improve service delivery. Clause 22 extends the standard-setting powers of the Regulator of Social Housing to cover information and transparency. The clause will enable the regulator to deliver key social housing White Paper commitments, including setting standards relating to the new access to information scheme. We also expect information and transparency standards to include requirements for registered providers to share information on how landlords spend their income, executive pay and breaches of the standards.
When a provider is failing to meet these standards, the clause ensures that the regulator can take strong enforcement steps, including penalties, compensation and requiring changes in the management of the provider. Extending the regulator’s power to set regulatory standards to include standards on information and transparency will empower tenants to hold their landlord to account and strengthen overall consumer regulation.
New clause 9 seeks to require the Secretary of State to extend the Freedom of Information Act 2000 to registered providers of social housing, via statutory instrument, within six months of Royal Assent. I do not believe the amendment is necessary or advisable. The Government have worked closely with stakeholders to agree plans to deliver the access to information scheme for tenants of housing associations and other private registered providers, as promised in the social housing White Paper.
The new scheme will enable tenants of private registered providers and their representatives to request information from their landlords in a way similar to that available under the 2000 Act. It will also impose similar obligations on private registered providers. Tenants of private registered providers will be able to request information from their landlord on anything relating to the management of their homes. The new scheme will be integrated into the regulatory environment, tailored to the needs of tenants, and enforced as part of the regulator’s consumer standards.
If a tenant is unhappy with how a landlord has dealt with their request for information, they will be able to take their complaint to the housing ombudsman. The process will be the same as for other complaints, ensuring ease of use and accessibility for tenants. The ombudsman also has a strong understanding of the social tenant and landlord relationship, and an established relationship with the Regulator of Social Housing. Additionally, local authority providers, which would fall under the new clause, are already subject to the Freedom of Information Act 2000 as public bodies.
Finally, extending freedom of information to registered providers would increase the level of Government control exercised over the sector. We are back to the potential argument around reclassification, which we are keen to avoid. The access to information scheme that we have laid out does not carry the same reclassification risk. On that basis, although I commend the excellent clause, I ask the hon. Member for Greenwich and Woolwich to consider not pressing his new clause to a vote.
Matthew Pennycook
At the outset, I should thank the Greater Manchester Law Centre for its support in drafting the new clause, the purpose of which is to probe the Government’s rationale for not using the Bill to bring registered providers of social housing within the scope of the Freedom of Information Act—other than local authorities, which, as the Minister rightly said, are already subject to it—and to press the Government to reconsider.
As the Minister is no doubt aware, this matter has been a perennial cause of concern. In 2011, the coalition Government announced that they would consult housing associations on bringing them within the scope of the Act; however, no further action was taken—almost certainly as a result of housing associations objecting. The issue resurfaced in the wake of the Grenfell Tower fire as a result of the Information Commissioner’s Office reporting to Parliament that it had experienced difficulties in accessing information relating to social housing and to the Kensington and Chelsea Tenant Management Organisation because the information was not covered by the Freedom of Information Act. The Information Commissioner at the time, Elizabeth Denham, made it clear that
“housing Associations are currently not subject to Freedom of Information Act because the Act does not designate them as public bodies. It is clear to me that this is a significant gap in the public’s right to know”.
We believe that she was right to highlight that gap, which remains to this day.
It is not simply that the public do not enjoy rights that they have never had; in the cases of housing associations that have had local authority stock transferred to their management, tenants and the public have lost freedom of information rights that they previously enjoyed when those homes were under local authority control. As I expected, the Minister has made the case that the issues are addressed by the provisions in clause 22 relating to information and transparency; however, those provisions are limited both in scope and specificity in terms of who may request the disclosure of information—it would appear that only tenants themselves have access to it, while journalists and others would not—and how the scheme will operate in practice.
Eddie Hughes
Perhaps the Minister can clarify this, but I understood that it was not just tenants, but people who were acting on their behalf. Can we confirm that? [Interruption.]
The Chair
Order. There is a Division in the House, so we will have to break for 15 minutes or so. We will resume as quickly as people can get back.
Matthew Pennycook
Before we suspended, the hon. Member for Walsall North pressed me on what he felt was an inaccuracy in my statement that journalists were not covered by the provisions. The Division has given me a chance to look at both the Bill and the explanatory notes. Unless he can find one, I see no mention of tenants or their representatives in the Bill. The provision in question, on page 18 of the Bill, merely states:
“the provision of information to their tenants of social housing”.
If it is the case that tenant representatives, including a broad definition of what that entails—including journalists—can access the information in question, that would be welcome.
However, not only is clause 22 limited to tenants themselves, but it provides no guarantees that an information and transparency scheme will be established. All it specifies is that the regulator “may set standards” for RPs in relation to those matters.
Although we can debate the efficacy of clause 22 in terms of whether the regulator’s ability to set standards relating to the provision of information and transparency will significantly increase RP accountability, it is clear that the clause does not provide for anything akin to that facilitated by the freedom of information regime. As the Information Commissioner’s Office put it, on welcoming the commitment to provide some information to tenants, the scope of the proposed access to information scheme
“appears narrower than FOI in a number of significant ways”.
The arguments against bringing housing associations within the Bill’s scope have been that it would inevitably result in reclassification by the Office for National Statistics and that RPs would be overwhelmed with FOI requests. However, the Scottish Government’s decision to extend coverage of Scotland’s freedom of information legislation to registered social landlords there, following a 2017 consultation—despite opposition from a majority of the housing associations affected—appears to undermine both those counter-arguments. A 2021 report by the Scottish Information Commissioner following the changes made there found that social landlords had responded well to being covered by the legislation, with a significant majority of organisations surveyed making it clear that they were responding effectively, were publishing more information as a result of FOI and were not overwhelmed with requests, with 57% reporting a small impact on staff workload. Importantly, despite being subject to the Freedom of Information Act, Scottish providers remain classified as private non-financial corporations by the ONS.
There are numerous examples from across the country of RPs either ignoring or refusing outright to respond to reasonable requests from tenants for information on a range of issues, including fire safety and health hazards, on the basis that they are not covered by the Freedom of Information Act. I note what the Minister said about tenants’ ability to take such concerns to the housing ombudsman, but we have already discussed what a lengthy and time-consuming process that is. Given that local authority RPs are already covered by FOI, we cannot understand why non-local authority RPs are not brought within the scope of that Act. Given that one of the central aims of the White Paper and the Bill is to engender a culture of transparency and accountability among RPs and that clause 22 is far narrower in scope than FOI, we believe it would be beneficial to the public if housing associations that are not publicly owned are brought within the scope of the 2000 Act. The UK Information Commissioner’s Office agrees, stating as recently as January 2022:
“The ICO believes that housing associations that provide social housing should be covered by the Freedom of Information Act 2000 in the same way as housing provided by local authorities. We believe access to information laws should remain relevant and appropriate to how public services are delivered.”
I hope that the Minister has listened carefully to the arguments about the new clause, in particular the Scottish experience, and I look forward to her response. I will not press the new clause to a Division at this stage. Depending on her reply, we may return to it on Report.
Dehenna Davison
I am grateful to the shadow Minister for outlining his case so coherently. I go back to points that I made earlier. On the point about tenant representatives, it is certainly the intent that they will be able to make those requests on behalf of tenants. In some cases, that could include journalists—the hon. Member specifically commented on them. I hope that provides some assurance about intent. I am grateful to the hon. Member for not pressing the new clause to a Division for now.
Question put and agreed to.
Clause 22 accordingly ordered to stand part of the Bill.
Clause 23 ordered to stand part of the Bill.
Clause 24
Standards relating to energy demand
The Chair
The Government indicated an intention to vote against the Question that the clause stand part of the Bill by tabling an amendment to leave out the clause.
Matthew Pennycook
The proposed tenant satisfaction measures scheme, as outlined in the social housing White Paper and underpinned by the provisions in the clause, has the potential to be an extremely useful tool for tenants, both in gaining a better understanding of their landlords’ performance and in providing feedback that can assist in driving up standards. We support it.
Given the diversity of providers across the social housing sector, however, a sufficient degree of standardisation of the collecting, processing and presenting of the information relating to the new tenant satisfaction measures is crucial. If steps are not taken to ensure a prescribed collection method for obtaining the information in question so that, when published, it allows for rigorous like-for-like comparison, the obvious risk is that the TSM scheme will struggle to facilitate an accurate and fair comparison of performance between RPs, and its use as a means of informing regulation will be compromised. The regulator itself has acknowledged the potential limitations of the scheme, owing to the variation in methods of data collection and sampling across different organisations.
The question, therefore, is what might be done to address those potential pitfalls to ensure that the TSM scheme works as effectively as it can. I will be grateful if the Minister could give us a sense of how the Government believe that a degree of standardisation might be imposed upon the TSM process to facilitate an accurate and fair comparison of performance between providers. Also, she might ask her officials to consider whether it would be appropriate for the Government to commit to asking the regulator to review the method of collecting, processing and presenting the information in question within a certain timeframe, following any directions issued under proposed new section 198C coming into effect.
Dehenna Davison
I will write to the shadow Minister following our sitting to give him further clarity about the clause.
Question put and agreed to.
Clause 27 accordingly ordered to stand part of the Bill.
Clause 28
Surveys
Dehenna Davison
I beg to move amendment 4, in clause 28, page 22, leave out lines 3 to 8 and insert—
“(8) Equipment or materials taken onto premises by virtue of subsection (7) may be left in a place on the premises until the survey has been carried out provided that—
(a) leaving the equipment or the materials in that place does not significantly impair the ability of an occupier to use the premises, or
(b) leaving the equipment or the materials on the premises is necessary for the purposes of carrying out the survey and it is not possible to leave it or them in a place that does not significantly impair the ability of an occupier to use the premises.”
This adjusts the power to leave equipment etc on premises so that it can only be left in a place that significantly impairs the ability of occupiers to use the premises if there is no other place on the premises it can be left which doesn’t impair such use.
The Chair
With this it will be convenient to discuss the following:
Government amendments 5 to 11.
Clause stand part.
Dehenna Davison
The regulator has an existing power to arrange for a survey of a premises where it suspects that a landlord may be failing to maintain the premises in accordance with its standards. The clause takes steps to ensure that those important surveys can take place more promptly by reducing the notice period required from 28 days for landlords and seven days for tenants to 48 hours for both parties. These are minimum requirements, and in the majority of cases the regulator would seek to give more than the minimum notice period, but the changes ensure that the regulator can act quickly in the most serious cases.
The clause also includes a power for the regulator to seek a warrant for entry when necessary, meaning that surveys can take place when required to ensure that the regulator can identify problems and take appropriate action. In the most serious cases, following a survey the regulator will be able to arrange for emergency remedial action to take place, as set out under clause 31, to address an imminent risk to the health and safety of tenants if the provider fails to take action required by the regulator.
Committee members may be aware that we have stipulated in the Bill that equipment or materials can be left on the premises only if it is necessary for the survey or emergency remedial action to go ahead, or otherwise if that does not significantly impair an occupier when using the premises.
Government amendments 4 to 11 are common-sense amendments designed to ensure that regulatory activities do not unnecessarily obstruct or inconvenience residents of social housing. Our changes are slight and intend to strengthen the Bill’s provisions to the benefit of tenants. They require that even if it is necessary to leave equipment or materials on the premises for surveys or emergency remedial action, they must not be left in a way that causes significant inconvenience to occupiers if they can be left in another place where this inconvenience does not occur. This means that thought must be given to minimising the impact of a survey or works on occupiers, including the impact on a tenant’s use of the common parts.
Those small, technical changes are intended to ensure that a survey or emergency remedial action can be conducted, but in such a way that is mindful of the impact on tenants and courteous to them. I commend the amendments to the Committee.
Amendment 4 agreed to.
Amendments made: 5, in clause 28, page 22, line 8, at end insert—
“(9) Where the premises include common parts of a building, references in subsection (8) to the ability of an occupier to use the premises include the ability of an occupier of a dwelling that has use of the common parts to use those parts or the dwelling.
(10) In this section, “common parts”, in relation to a building, includes the structure and exterior of that building and any common facilities provided (whether or not in the building) for persons who occupy the building.”
Where a survey is carried out on premises which include common parts of a building this amendment requires the effect on the ability of occupiers to use their dwellings and the common parts to be considered in determining whether equipment or materials can be left on the premises while the survey is carried out.
Amendment 6, in clause 28, page 22, leave out lines 31 to 36 and insert—
“(5) Equipment or materials taken onto premises by virtue of subsection (4) may be left in a place on the premises until the survey has been carried out provided that—
(a) leaving the equipment or the materials in that place does not significantly impair the ability of an occupier to use the premises, or
(b) leaving the equipment or the materials on the premises is necessary for the purposes of carrying out the survey and it is not possible to leave it or them in a place that does not significantly impair the ability of an occupier to use the premises.”
This adjusts the power to leave equipment etc on premises so that it can only be left in a place that significantly impairs the ability of occupiers to use the premises if there is no other place on the premises it can be left which doesn’t impair such use.
Amendment 7, in clause 28, page 22, line 36, at end insert—
“(5A) Where the premises include common parts of a building (as defined in section 199A), references in subsection (5) to the ability of an occupier to use the premises include the ability of an occupier of a dwelling that has use of the common parts to use those parts or the dwelling.”—(Dehenna Davison.)
Where a survey is carried out on premises which include common parts of a building this amendment requires the effect on the ability of occupiers to use their dwellings and the common parts to be considered in determining whether equipment or materials can be left on the premises while the survey is carried out.
Clause 28, as amended, ordered to stand part of the Bill.
Clause 29
Inspection plan
Matthew Pennycook
I beg to move amendment 16, in clause 29, page 23, line 36, leave out lines 36 to 39 and insert—
“(a) the inspection of every registered provider within four years of the commencement of this Act,
(b) the inspection of every registered provider at intervals of no longer than four years thereafter, and”.
This amendment would ensure that the regulator is required to carry out regular inspections of every registered provider.
Matthew Pennycook
We strongly support the introduction of routine inspections of social landlords. We therefore welcome clause 29. I would like to take the opportunity once again to commend the efforts of Lord Best in the other place and the perseverance of Grenfell United, which ensured that the Bill was strengthened.
Routine inspections of social housing landlords must be central to the new consumer regulatory regime introduced by the Bill if tenants are to have confidence that landlords will be monitored appropriately and deterred from risking breaches that could undermine health and wellbeing. The welcome removal of the serious detriment test in its entirety through the provisions in clause 26 legally allows the regulator to adopt a proactive approach to monitoring and enforcing consumer standards.
In our view, such an approach should be premised on inspections that are at short notice, rigorous, thorough and that include direct engagement with tenants who can highlight issues of concern, thereby helping the regulator determine whether a given provider is meeting the enhanced consumer standards introduced by the Bill.
Clause 29 amends section 201 of the Housing and Regeneration Act 2008, adding a new section 201A to require the regulator to make, and take appropriate steps to implement, a plan for carrying out inspections. The plan must be published, kept under review, and revised or replaced where appropriate. However, the nature of the plan and issues such as the types of RPs that should be subject to regular inspections, the frequency of those inspections, and the circumstances in which RPs should be subject to ad hoc inspections are not prescribed on the face of the Bill, instead being left to the regulator to determine in due course.
While we recognise the need for the regulator to have a significant degree of discretion when it comes to formulating the inspections plan, we believe that the Bill should be more prescriptive in two important respects. First, we believe it is essential that the Bill make clear that all RPs, large or small, will be subject to inspections by the regulator. Secondly, we believe it is essential that the Bill ensures that each RP will be subject to routine inspections.
Amendment 16 seeks to achieve both those objectives by specifying which landlords will be inspected and the maximum duration of time between each inspection they are subject to. It does so by replacing proposed new section 201A(1)(a) and (b) of the Housing and Regeneration Act 2008, as inserted by clause 29—for those following in the Bill, that is lines 36 to 39 on page 23—with a requirement that every RP must be inspected within four years of the commencement of the Act and then inspected at intervals of no longer than four years thereafter.
We believe it is entirely reasonable to detail in the Bill the minimum expectations for the regulator’s inspections plan. The policy paper published alongside the Bill in June made clear that it would enable Ofsted-style inspections of social housing providers by the regulator. The Education Act 2005 that introduced those inspections specified that every school in England would be subject to them and that they would be inspected on a routine basis at least once every three years. Amendment 16 takes that arrangement and applies it to RPs, subject to the enhanced consumer standards introduced by the Bill.
The amendment deliberately does not specify the precise frequency of inspections, merely requiring that they take place at least once every four years—the timeframe proposed by the Government in their 2020 White Paper in relation to the largest landlords. In doing so, the amendment would allow the regulator to determine the precise frequency and nature of individual inspections based on the size of the landlord and its risk profile as determined by means of desktop review.
We believe amendment 16 would preserve the regulator’s operational independence and flexibility when it comes to formulating and implementing the inspections plan now required by clause 29, while strengthening the clause to ensure that key minimum expectations are specified and that tenants can have real confidence in the new inspections regime as a result. I hope the Minister will consider accepting it.
Dehenna Davison
Clause 29 commits the regulator to the delivery of regular inspections by providing it with a duty to publish, and take reasonable steps to implement, a plan for regular inspections. The clause will reinforce the regulator’s commitment to deliver the policy objective set by the social housing White Paper, while ensuring the regulator has the freedom to design the inspections regime following engagement with the sector.
As members of the Committee know, a key part of our efforts to drive consumer standards is the introduction of routine inspections by the regulator for the largest landlords. Inspections will help the regulator to hold landlords to account and intervene where necessary, ultimately driving up the quality of homes and services provided to tenants. That measure is integral to the success of the proactive consumer regime facilitated by the Bill.
However, I cannot accept amendment 16, which seeks to introduce a specific duty for the regulator to conduct inspections of all RPs every four years. As I have said, clause 29 puts the Government and the regulator’s shared commitment to inspections into legislation, through requiring the regulator to publish and take reasonable steps to implement an inspections plan. The clause also ensures that the regulator maintains a level of operational flexibility to allow it to respond on a risk basis to significant developments in the sector.
The regulator is committed to developing a robust approach to inspections, and continues to develop the details of how it will manage consumer inspections via a process of targeted engagement with the sector and social housing tenants. I do not feel that we should bind the regulator’s hands by putting into legislation detailed requirements about inspections that would pre-empt the work it is currently undertaking.
The system of inspections will be based on a risk profile to ensure that those landlords at greatest risk of failing, or where failure might have the greatest impact on tenants, are subject to greater oversight. As part of that provision, the regulator will aim to inspect landlords with more than 1,000 homes every four years. We will, of course, hold the regulator to account to deliver and implement its inspections plan, and the regulator continues to be accountable to Parliament for the delivery of its statutory objectives.
Bob Blackman
Clearly, the providers with the most complaints against them to the regulator will be placed most at risk. In my view, some could be subject to an annual inspection, while providers that are doing a really good job and do not warrant an inspection could be left, although, clearly, if there were complaints, the inspection could be brought forward. Is that my hon. Friend’s understanding of how this will work? Obviously, the regulator will have limited resources to ensure that standards are improved.
Dehenna Davison
Absolutely—this is all about driving up standards. The plan is that the regulator will aim to inspect landlords with over 1,000 homes at least every four years, and those at highest risk could be subject to more frequent inspections. As I say, the regulator is doing detailed work to see how best to implement the measure, and it is important that we let it get on with that work before putting anything into the Bill. On that basis, I hope that the shadow Minister will withdraw the amendment.
Siobhain McDonagh (Mitcham and Morden) (Lab)
I rise to support amendment 16 on the basis of 17 years’ experience of Ofsted. We know that unless a school knows that Ofsted is coming, problems begin. A substantial proportion of outstanding schools that were not inspected for five years have recently been graded as needing improvement. Organisations need to know that somebody is coming, and coming in a reasonable time.
I simply do not understand why we would oppose registered providers being inspected once every four years, or why we would choose to inspect large housing associations but not smaller ones. Are housing associations with 1,000 tenants or fewer not just as susceptible to poor standards, and are those residents not entitled to live under the same inspection regime?
If regulation just requires looking at the paperwork, things can be made to look brilliant. Who here has not been told by their housing provider that it does not have a problem because 80% of tenants say that its repairs system is fantastic? When we dig into the detail, we appreciate how few people respond to customer service requests and just how hard some of our constituents find it to complain or get themselves heard. We need a clear and strong inspection regime.
Eddie Hughes
The hon. Lady makes a valid point. That is why we will do customer satisfaction surveys that have been agreed with the regulator. The format has been agreed. We will be able to compare housing associations and their relative performance in order to drill down and improve that performance. I understand her point, but the Government are making significant strides with the regulator to try to drive up customer and tenant engagement to ensure that we are genuinely getting the opinion of the majority, rather than a minority.
Siobhain McDonagh
That is not possible. We cannot construct a customer survey as emphatic or successful as that, because we have a broad span of residents and tenants, with different lives that determine whether they fill in forms. We as politicians, and people who deliver leaflets and get others to do so on our behalf, know that some people will always respond and others never will, even if, objectively speaking, they need to do so.
Sara Britcliffe (Hyndburn) (Con)
Surely, if a tenant is aggrieved with the process, they are likely to fill in the survey response.
Siobhain McDonagh
I have been an MP for 25 years and a member of the Labour party for 42 years. I am really interested in political communication and getting people to respond. I have to tell the hon. Member that a substantial number of people will never respond, and it is often those who live in the most dire circumstances. If we are serious about improving standards, we need the most structured inspection system that we can afford—I appreciate that it is public money.
I do not deny that anything done in the Bill is a step forward and an improvement, but if we are going to spend public money on behalf of some of our most vulnerable constituents, we want to make it the best-spent money that we can. Let us get it right. We are not starting with a clean piece of paper; we are starting with 17 years of experience with Ofsted and years of experience with the Care Quality Commission. We know a great deal about how inspection regimes work.
Dehenna Davison
On the point about making sure we get the system right, the hon. Lady mentioned public funds, which is clearly a crucial issue. That is precisely why the regime is being designed so that those who are most at risk will be inspected more frequently. That includes not just larger landlords but smaller landlords where there is a clear indication of issues that have been found previously. Inspections can also be done on a more reactive basis. If a report goes to the regulator to suggest that there is a specific issue with a smaller landlord, the risk profile will be there and the landlord could be inspected much more frequently.
Siobhain McDonagh
I am glad that there will be reactive inspections. I am not suggesting that there should not be. What I am saying is that, along with reactive inspections, there should be a regular and rigid routine of inspections. That way, everybody knows that they will have an inspection once during a four-year period. That does not seem to me to be over-regulation, certainly given recent events in social housing stock.
Matthew Pennycook
I have to say that I am slightly disappointed with the Minister’s speech. I am not convinced by her arguments. There is clearly a debate here about how prescriptive we should be in the Bill as to the regulator’s functions. I am convinced that we need to be slightly more prescriptive. I say that for a couple of reasons.
First, my hon. Friend the Member for Mitcham and Morden made a good point on the size of providers. It has certainly been my experience that some of the smaller providers are the most egregious when it comes to standards, partly because they do not face the reputational risk, or the extent of investigations by Members of Parliament or others into their activities, that some of the larger providers do. I do not think the size of providers should play a part in who is inspected.
We think it is important that all providers are inspected within the four-year period. I absolutely agree with my hon. Friend: it is not enough to base a reactive inspections regime, to the extent that that is a part of the process provided by the clause, on surveys or desktop studies alone. We do not leave schools out of the Ofsted inspections process because we are not getting complaints about them. We inspected all schools routinely within a certain period.
Secondly, to the extent that the amendment is prescriptive, I do not think that it is particularly onerous on the regulator. All we are asking for is an inspection within four years of the Bill receiving Royal Assent and every four years thereafter. That four-year timeframe was proposed by the Government in their White Paper; we did not pluck it out of thin air. I think it is entirely reasonable to ask for an inspections regime to take place on that basis. If the regulator needs the resources to carry out those inspections, let us ensure that it has them. However, I struggle to understand why the Government do not feel they can add an element of prescription to the inspections plan in the way that amendment 16 proposes. We will therefore press the amendment to a Division.
Question put, That the amendment be made.
Matthew Pennycook
We welcome the introduction of performance improvement plans as a sensible measure to drive up standards where registered providers are falling short. I would, however, like to raise a few issues in relation to how these plans will work in practice.
We note that the tenant is provided with a copy of the performance improvement plan, which is drawn up where a registered provider has failed to reach a statutory standard for properties under their responsibility, only if the tenant makes a written request for one. Given the strong case for ensuring that all affected tenants know how their landlord is performing and what decisions they are making, we question whether that is sufficient. We note that this matter was also explored during Committee stage in the other place.
In the material it supplied in relation to consideration of the Bill, the Chartered Institute of Housing argued:
“Consideration should be given as to how tenants will be alerted should any poor performance lead to the regulator requiring a performance improvement plan”.
The Local Government Association has also put on record its desire to see the publication of guidance on the regulator’s requirements and timescales for preparing and implementing performance improvement plans.
In the light of these points, I hope the Minister could clarify, either today or in writing—I am happy to take another letter from her—the operation of the provisions in this clause in relation to the following. First, how will tenants be notified if the poor performance of their registered provider leads to the regulator initiating the process of preparing an improvement plan? Will tenants, for example, have the chance to input their views about the problems identified and the measures specified for improvement in these plans?
Secondly, what is the rationale for specifying that tenants can only request a copy of the plan if they require one, rather than being provided with the plan as a matter of course along with any information about what it is, why it came about and what changes they can expect to see as a result—an arrangement that strikes us as more in keeping with the aims outlined in the Government White Paper? Thirdly, is the Minister able to tell us when the guidance on the regulator’s requirements and timescales for preparing and implementing performance improvement plans will be published? Lastly, does the Minister expect that performance improvement plans will be used as a first resort to give underperforming landlords the chance to improve before the regulator considers more punitive measures?
Dehenna Davison
I am grateful to the shadow Minister for his questions. I will follow up in writing and provide some more clarity. Where there is a performance improvement plan in place, the provider is required to publish that, so it will be freely available to tenants and, indeed, to members of the public.
Question put and agreed to.
Clause 30 accordingly ordered to stand part of the Bill.
Clause 31
Emergency remedial action
Matthew Pennycook
I beg to move amendment 17, in clause 31, page 27, line 28, leave out “may” and insert “must”.
This amendment would ensure that emergency remedial action takes place on every occasion where the conditions in subsections (2) to (4) of section 225B inserted by clause 31, are met rather than being discretionary.
Matthew Pennycook
Amendment 17, in my name and that of my hon. Friend the Member for Luton North, is extremely straightforward, and I will therefore be very brief in speaking to it.
Clause 31 relates to emergency remedial action. It amends section 225 of the Housing and Regeneration Act 2008, adding new sections 225A to 225H, which enable the regulator to arrange for an authorised person to take emergency remedial action in instances where a tenant faces an imminent health and safety risk. We strongly support it. The purpose of amendment 17 is simply to ensure that emergency repairs of the kind proposed must take place, rather than may take place—with apologies to the hon. Member for Harrow East, we return to the “may” and “must” distinction—on every occasion where the relevant conditions have been met.
It is worth briefly touching on what those conditions—as set out in proposed new section 225B(2) to (4)—are, because they are stringent, which is why we think that the regulator should be required to act in all instances. For the premises of a social housing provider to be considered appropriate for possible emergency remedial action under clause 31, a survey of its condition must have been completed; the premises must have been found to be improperly maintained; its condition has to have been found to cause an imminent risk of serious harm to the health or safety of the tenants who reside in it or neighbouring residents; and the provider has to have failed to comply with an enforcement notice requiring it to take action to bring the premises up to standard.
Our contention is that any premises managed by any provider found to have satisfied all those tests should automatically receive emergency repairs, rather than merely be considered for them. As such, we think the replacement of the offending “may” with a “must” is vital. I hope the Minister will give the issue considered thought.
Dehenna Davison
It is the responsibility of every registered provider of social housing to ensure that they provide safe and decent housing to their tenants. That means maintaining properties in accordance with the Regulator of Social Housing’s standards and addressing problems issues quickly where problems are identified.
Where a provider cannot or will not address issues that risk the health and safety of tenants, it is essential that the regulator can act. The clause therefore allows the regulator to authorise persons to enter a property and conduct emergency remedial works in cases where failings risk causing serious harm to tenants. For the regulator to do so, it must first conduct a survey of the premises, be satisfied that the provider has failed to maintain the premises in accordance with relevant standards and that the failure poses a serious health and safety risk, and give an enforcement notice requiring those failures to be addressed. If those grounds are met, the regulator may step in and take emergency remedial action. The amendment moved by the shadow Minister would mean that the regulator must take emergency remedial action when the relevant grounds are met.
I have made it clear several times that nothing is more important to the Government than keeping people safe in their homes. Sadly, however, I cannot accept the amendment, because we feel it is essential that the regulator retains the independence and flexibility to determine where it is appropriate to use the power set out in the clause. That reflects regulatory best practice, whereby the regulator has the operational independence to regulate the sector effectively by deciding which of its enforcement powers to use in any given case.
Matthew Pennycook
If a provider has failed all the tests in the clause, what other powers might the regulator use if it did not feel that emergency remedial action was necessary? What other things might it do to address a series of failings that triggered its ability to act along the lines we have discussed?
Dehenna Davison
We have talked, for example, about enforcement notices and possible fines, which are clearly measures available to the regulator. One of the things that we are concerned about at this stage—this has been drawn out at various points today—is binding the hands of the regulator. We do not want to commit it to one course of action.
Maggie Throup (Erewash) (Con)
Does the Minister agree that we are providing the framework for the regulator? As politicians, we should not be telling it how to do its job. If we make the regulations and powers strong enough and give the regulator teeth, whether the word is “may” or “must” becomes irrelevant, because it will take action anyway.
Dehenna Davison
My hon. Friend makes the point extremely well and much more strongly than I did. She is absolutely right. We are setting out the framework of what the regulator can use and will have access to. It will have a full suite of powers available to ensure that it is looking out for tenants and that they are in the best possible housing.
To summarise, we do not wish to bind the hands of the regulator too stringently. We want to give it a suite of powers and the operational independence to choose which powers to use. On that basis, I ask the hon. Member for Greenwich and Woolwich to consider withdrawing his amendment.
Matthew Pennycook
I appreciate the Minister’s concern about binding the regulator too rigidly. I push back slightly against the point made by the hon. Member for Erewash: I think it is wrong to say—the experience of recent years shows this—that just because we give a regulator a power, it necessarily uses it, and certainly not in a proactive way. At this stage, however, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendments made: 8, in clause 31, page 29, line 41, leave out from beginning to end of line 6 on page 30 and insert—
“(5) Equipment or materials taken onto premises by virtue of subsection (4)(b) may be left in a place on the premises until the emergency remedial action has been taken provided that—
(a) leaving the equipment or the materials in that place does not significantly impair the ability of an occupier to use the premises, or
(b) leaving the equipment or the materials on the premises is necessary for the purposes of taking the emergency remedial action and it is not possible to leave it or them in a place that does not significantly impair the ability of an occupier to use the premises.”
This adjusts the power to leave equipment etc on premises so that it can only be left in a place that significantly impairs the ability of occupiers to use the premises if there is no other place on the premises it can be left which doesn’t impair such use.
Amendment 9, in clause 31, page 30, line 6, at end insert—
“(6) Where the premises include common parts of a building (as defined in section 225C), references in subsection (5) to the ability of an occupier to use the premises include the ability of an occupier of a dwelling that has use of the common parts to use those parts or the dwelling.”
Where emergency remedial action is taken on premises which include common parts of a building this amendment requires the effect on the ability of occupiers to use their dwellings and the common parts to be considered in determining whether equipment or materials can be left on the premises while the work is carried out.
Amendment 10, in clause 31, page 30, leave out lines 29 to 36 and insert—
“(5) Equipment or materials taken onto premises by virtue of subsection (4) may be left in a place on the premises until the emergency remedial action has been taken provided that—
(a) leaving the equipment or the materials in that place does not significantly impair the ability of an occupier to use the premises, or
(b) leaving the equipment or the materials on the premises is necessary for the purposes of taking the emergency remedial action and it is not possible to leave it or them in a place that does not significantly impair the ability of an occupier to use the premises.”
This adjusts the power to leave equipment etc on premises so that it can only be left in a place that significantly impairs the ability of occupiers to use the premises if there is no other place on the premises it can be left which doesn’t impair such use.
Amendment 11, in clause 31, page 30, line 36, at end insert—
“(5A) Where the premises include common parts of a building (as defined in section 225C), references in subsection (5) to the ability of an occupier to use the premises include the ability of an occupier of a dwelling that has use of the common parts to use those parts or the dwelling.”—(Dehenna Davison.)
Where emergency remedial action is taken on premises which include common parts of a building this amendment requires the effect on the ability of occupiers to use their dwellings and the common parts to be considered in determining whether equipment or materials can be left on the premises while the work is carried out.
Clause 31, as amended, ordered to stand part of the Bill.
Clauses 32 to 35 ordered to stand part of the Bill.
Schedule 3 agreed to.
Clauses 36 to 38 ordered to stand part of the Bill.
Schedule 4 agreed to.
Clauses 39 and 40 ordered to stand part of the Bill.
Schedule 5 agreed to.
Clauses 41 to 43 ordered to stand part of the Bill.
Clause 44
Short title
Amendment made: 12, in clause 44, page 37, line 10, leave out subsection (2).—(Dehenna Davison.)
This amendment removes the privilege amendment inserted by the Lords.
Clause 44, as amended, ordered to stand part of the Bill.
New Clause 1
Regulator duty to ensure continuity of secure tenancy in cases of threat to safety
“(1) The Housing and Regeneration Act 2008 is amended as follows.
(2) After section 92K insert—
‘92KA Duty to ensure continuity of secure tenancy in cases of threat to safety
(1) This section applies where—
(a) a registered provider of social housing has granted a secure tenancy of a dwelling-house in England to a person (whether as the sole tenant or a joint tenant), and
(b) the registered provider is satisfied that there is a threat to the personal safety of that person or of a member of that person’s household which means there is a risk to their personal safety unless they move.
(2) When subsection (1) applies, the regulator must ensure that the registered provider grants the tenant a new secure tenancy which is–
(a) on terms at least equivalent to the existing tenancy; and
(b) in a dwelling where the threat to the tenant’s personal safety does not apply.
(3) In this section, a “threat to personal safety” means any threat of violence, including in circumstances of—
(a) domestic abuse where the perpetrator does not live at the same address as the victim;
(b) an escalating neighbour dispute;
(c) a threat of targeted youth or gang violence.
(4) In assessing the threat under subsection (1)(b), the registered provider must act in accordance with any relevant police advice provided to–
(a) the registered provider,
(b) the tenant, or
(c) any member of the tenant’s household.
(5) In the event that a registered provider is unable to ensure the provision of an appropriate new secure tenancy pursuant to subsection (2), the regulator must ensure that the registered provider concerned co-operates with other registered providers to ensure an appropriate new secure tenancy is provided in a timely manner.’”—(Helen Hayes.)
This new clause would require the regulator to ensure that tenants whose safety is threatened are granted alternative accommodation by their housing provider on equivalent terms to their existing tenancy. It also requires the regulator to ensure that a provider which is unable to provide appropriate alternative accommodation co-operates with other providers to do so.
Brought up, and read the First time.
Helen Hayes (Dulwich and West Norwood) (Lab)
I beg to move, That the clause be read a Second time.
It is a pleasure to serve under your chairmanship, Sir Edward. The new clause proposes a small but significant amendment to housing law to give additional security to social housing tenants who suffer the consequences of a threat of serious violence. The clause arises from my experience of representing my constituent Georgia, an NHS worker whose teenage son was threatened by gang members. Georgia was a housing association tenant who had lived in her home for nine years. She and her children were happy in their home, which she had recently redecorated—then her neighbours told her that one afternoon, while she was at work, they had heard loud banging on her door. Georgia eventually coaxed out of her son the information that he had witnessed something that local gang members had not wanted him to see, and they had come to her home looking for him. Georgia contacted the police, who told her that she had to move immediately for her family’s safety. She got in touch with her housing association, which told her that it was the council’s responsibility to provide emergency housing. The council placed Georgia and her children in temporary accommodation, which was in another borough, of poor quality and expensive. Georgia’s children did not have enough space, the flat was damp and dirty, it was hard for her children to do their homework and Georgia started to suffer from panic attacks that affected her work.
By the time that Georgia’s friend got in touch with me because she was worried about Georgia’s health and the wellbeing of her children, they had been in the temporary accommodation for six months, and her housing association had started the process of ending her tenancy because she was no longer living in her flat. The consequence of this, in the context of the UK’s housing crisis, would have been Georgia and her children being added to the statistics of homeless households, in temporary accommodation—potentially indefinitely—and at the bottom of the housing waiting list. No one should become homeless because their child is threatened.
In one London borough, 47 housing association tenants—at the time that I did this research, earlier this year—have required homelessness assistance from the council as a result of a threat of violence since 2019. Across the country, that means that thousands of families have had to leave their home each year, with their secure tenancies potentially at risk, on top of having to rebuild their lives in a new area. Homelessness is fundamentally destabilising, involving the loss of a sanctuary and a place in one’s community. It is deeply traumatising to have to make an emergency move because of a threat of violence and start again somewhere else. Our housing system should do everything possible to help families in such circumstances to make the transition to a new, permanent home as soon as possible to limit the harm caused by that threat.
I am delighted that the new clause has the support of both Shelter and the National Housing Federation. Shelter has also highlighted the case of Corey Junior Davis, or CJ, whose mum had asked her housing association for an urgent move after her son had been threatened and told her that he feared for his life. CJ’s mum had done everything possible to keep her son safe, including sending him to stay with relatives in a different area, but six months after her initial request, while they were still waiting for a move, CJ was shot and killed. I have also met several constituents who have sent their children away to keep them safe, because they know what the consequences of an emergency move to temporary accommodation would mean and they fear those consequences. That is not a choice that any parent should have to make.
The new clause would have the effect of requiring social landlords to protect the tenancy rights of secure tenants who have had to move due to a threat of serious violence, and would place a duty on social landlords to co-operate in a situation in which the tenant’s current landlord does not hold stock in an area that is considered safe for the tenant to move to. The threshold for these new duties to be triggered is that the police consider an emergency move to be necessary. Georgia was troubled by what had happened to her son, but it had not occurred to her that she would have to move out of the home that she loved until the police said that that was necessary to safeguard her child’s life. The group of people who would be protected by the new clause are not net additional demand on the social housing system; they are already secure social tenants, and the current social home that they are vacating would of course be returned to the landlord to be let to a new tenant.
There are many reasons why people become homeless due to no fault on their part. The clause will not protect all of them, but I am tabling this new clause for two reasons. The first is that the loss of a secure social tenancy, and effectively going to the bottom of an impossibly long housing waiting list, is far too high a price to pay for being the victim of a threat of violence. Georgia and her children suffered a grave detriment, simply because some violent gang members decided to threaten her son. The second is that serious violence is a scourge on the lives of all those that it affects. Far too many young people are living with the deep trauma of things that they have witnessed or friends that they have lost to knife or gun crime. We have a duty to do everything possible to stop the cycle of violence and the trauma that it causes in our communities. Supporting the victims of threats of violence to regain stability and move on with their lives is one way in which we can do that. Plunging victims into the unstable, often appalling, world of temporary accommodation has the opposite effect. We have the opportunity to change that.
Bob Blackman
Does my hon. Friend—I classify her as my hon. Friend because we have co-operated on so many other things—not accept that one of the problems is the shortage of suitable accommodation? I had a similar event in my constituency: a family was encouraged by the police to seek alternative accommodation, the registered social landlord said, “We don’t have any,” and naturally there was a problem as a result. Does she accept that providing suitable accommodation within a reasonable distance that allows children to go school, perhaps, and the tenant to get to work will be very challenging? I wonder whether she has considered that she is putting the onus on the registered social landlord to provide that. They may not operate within suitable areas, or may not be able to get co-operation from another registered social landlord. Would it not be better to have a range of potential organisations that might provide accommodation in what are, as she said, exceptional circumstances, rather than putting the onus on the registered social landlord?
Bob Blackman
I understand that, Sir Edward, but this is an important issue that merits further explanation.
Helen Hayes
I thank the hon. Member for that intervention. The new clause would impose a duty of co-operation on registered social landlords, which is designed to deal exactly with such a circumstance, where accommodation cannot be found that is safe for the tenant within the area in which the current landlord holds property. These are of course very challenging cases. I have certainly come across constituency cases in which the tenant simply cannot bring themselves to move from their home because the consequences are so dire for them, even when an offer has been made in an area that is considered by the police to be safe for them.
The new clause will not resolve every single circumstance, but in Georgia’s case, when I phoned a senior director in her large registered housing provider she was provided with a new tenancy in a safe borough, and signed that tenancy within a week. With greater will on the part of registered providers, and I believe that placing a duty would prompt that greater will, much more can be done to stop the cycle of violence in our communities.
Matthew Pennycook
I rise briefly to support my hon. Friend’s new clause, Georgia’s law. She made an extremely powerful case for it. I believe that it is sensible and proportionate, and will have a significant impact. I am sure that many hon. Members present have dealt with the kind of cases that she outlined—I certainly have. We are talking about a small but significant minority of tenants in England, but they find themselves, as the hon. Member for Harrow East said, in the exceptional circumstances of a police referral. All the new clause asks for is the protection of their tenancy rights, which should not be lost when they are forced to move, and greater co-operation between registered providers.
It is no surprise that the new clause is supported by organisations such as the NHF and Shelter. I think this is a very strong new clause, and I very much hope that the Government are minded to act on this issue, if not today then on Report. It is a crucial provision and will benefit the lives of many of our constituents.
Dehenna Davison
I am grateful to the hon. Member for Dulwich and West Norwood for tabling the new clause and for her engagement on the issue some weeks ago when we met to discuss it. I am grateful to her for raising the case of Georgia and her boys, and that of CJ. They are both horrendous cases, which give us all food for thought. I thank her for her words on the need to reduce violence more widely. That is something I am incredibly passionate about on a personal level too.
Before I begin, I want to clarify some technicalities. The new clause would provide protection where registered providers have granted their tenants secure tenancies. Secure tenancies are only granted by local authorities, so we will talk to the intention of the new clause, which is I believe around assured tenancies, as well as those in secure tenancies given by local authorities that are registered with the regulator.
We do not expect anyone who is threatened with violence to feel like they cannot move to safety for fear of losing their security of tenure. There are already a number of policies in place that seek to protect people at risk of violence who are in need of urgent rehousing. If a local authority grants a victim of domestic abuse, for example, a new tenancy for reasons connected with the abuse, it is required to give them a secure lifetime tenancy, rather than a tenancy with a fixed term.
Local authorities are also required to give people who need to move for their safety reasonable preference for social housing under section 166A(3) of the Housing Act 1996. Chapter 4 of the statutory guidance encourages local authorities to give additional preference or high priority to those fleeing violence, including intimidated witnesses, those escaping serious antisocial behaviour and people fleeing domestic violence.
By extension, those protections can be applied to private registered providers through duties to co-operate with their local authority in housing people with priority. Most private registered providers let 50% to 100% of their tenancies via nominations from their local authority. The current approach, which considers applicants for social housing on a case-by-case basis, and retains some flexibility, is the most appropriate means of determining whether a household should be granted a new tenancy.
The new clause would have the effect of requiring registered providers to relocate tenants and provide them with a new tenancy agreement. As we know, there are sadly many people with urgent housing needs who need to move immediately—for example, families who are living in conditions that pose a serious risk to their health. Going further than the existing protections by requiring registered providers to prioritise people fleeing violence above others would undermine some of the flexibilities given to housing providers to respond to the specific requirements of those in urgent need of social housing locally.
It is a fundamental right of the landlord to determine who they grant a tenancy to and who lives in their property. Retaining that right is key to registered providers being able to achieve their goal of creating safe and stable communities. It is therefore important to retain some flexibility for social landlords to decide their policy on allocations and who to house. That is integral to the effective functioning of the wider system.
Finally, as I am sure the hon. Member for Dulwich and West Norwood will be aware, we are taking steps to reform tenancy law to protect the security of tenure for social tenants. After section 21 is removed, all tenancies given by private registered providers will have greater security of tenure.
On that basis, I ask the hon. Lady to withdraw the new clause. I am very willing to work with her to see what more can be done in this area to prevent any more cases like that of Georgia and her boys emerging.
Helen Hayes
I thank my hon. Friend the shadow Minister for his support for the new clause. I am grateful to the Minister for her engagement and discussions prior to Committee stage, and for her comments just now. I would be more than happy to work with the Minister to resolve any drafting clarifications and on the intention of the new clause.
The Minister mentioned existing protections, but surely if they were working as they should, cases such as Georgia’s would simply not be arising in their current number. When I first spoke to the local authority that covers the part of my constituency where Georgia was resident, it said that registered providers, housing associations, fall back on the local authority’s duty to provide emergency accommodation. It says that happens all the time, and that there is no regard for what happens to the tenant, given all the destabilisation that comes from a very long time in temporary accommodation.
Certainly in London, on paper the local authority has a duty to provide emergency accommodation and then to rehouse that resident. There is nothing in the priority need criteria, however, that would have given Georgia or her family any significant level of priority need—certainly not a sufficient level of priority, because the violence would not have been taken into account. She was housed with a roof over her head in another borough, where it was thought it was safe for her to be. As it turned out, it was not safe for her, but it was judged to be a borough distant from where the initial threat was made. There was nothing in her circumstances to give her a level of priority band above about band C. She was never going to be rehoused, and because of the consequence of a threat to her son, she went from being a secure tenant in a very stable situation to facing, realistically, an indefinite period of time in temporary accommodation.
I simply do not believe that that situation is fair, and the current system is not functioning as it should. I acknowledge that there are many people who need to move and that our housing system is absolutely full of people who have a pressing and real need to do so. We also have a duty as a society to prevent harm from serious violence, and that is why that additional protection is needed over and above the current protections in law outlined by the Minister. I am happy to withdraw the new clause, but it is my intention to re-table it on Report, when I will divide the House if there is insufficient evidence of progress, because I strongly believe that this needs to get on the statute book. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 4
217A Professional qualifications and other requirements
“After section 217 of the Housing and Regeneration Act 2008 (accreditation) insert—
‘217A Professional qualifications and other requirements
(1) The Secretary of State may, by regulations, provide that a person may not engage in the management of social housing or in specified work in relation to the provision of social housing unless he or she—
(a) has appropriate professional qualifications, or
(b) satisfies specified requirements.
(2) Regulations specifying work for the purpose of subsection (1) may make provision by reference to—
(a) one or more specified activities, or
(b) the circumstances in which activities are carried out.
(3) Regulations made under this section may, in particular, require—
(a) the possession of a specified qualification or experience of a specified kind,
(b) participation in or completion of a specified programme or course of training, or
(c) compliance with a specified condition.
(4) Regulations may make provision for any of the following matters—
(a) the establishment and continuance of a regulatory body;
(b) the keeping of a register of qualified social housing practitioners;
(c) requirements relating to education and training before and after qualification;
(d) standards of conduct and performance;
(e) discipline and fitness to practise;
(f) removal or suspension from registration or the imposition of conditions on registration;
(g) investigation and enforcement by or on behalf of the regulatory body, and appeals against the decisions or actions of the regulatory body.’”—(Matthew Pennycook.)
This new clause would require managers of social housing to have appropriate qualifications and expertise.
Brought up, and read the First time.
Question put, That the clause be read a Second time.
Matthew Pennycook
I beg to move, That the clause be read a Second time.
This is, quite consciously, a probing amendment. As a result of the Regulation of Social Housing (Influence of Local Authorities) (England) Regulations 2017, the amount of local authority influence over private registered providers was reduced through the loss of local authority voting rights and restrictions on the percentage of officers a local authority may nominate as board members. The rationale for that reduction of influence was that it was necessary for the Government to relinquish sufficient control to allow the Office for National Statistics to reverse its 2015 classification of housing associations into the public sector following the Cameron Government’s decision to force registered providers to cut social sector rents by 1% a year for four years, with all that that entailed for the ability of social landlords to fund essential services, spend on repairs and maintenance, carry out retrofit work and build new social homes. If you recall, Sir Edward, it was done as a means of slashing the housing benefit bill.
Dehenna Davison
As the shadow Minister rightly outlined, new clause 5 seeks to ensure representation of tenants and councillors on the board of registered providers. While I agree with the sentiment behind the amendment—that we must ensure that the voice of social housing tenants is heard loud and clear in matters that affect them—I am afraid I must disagree that it is the best approach to take.
Tenants speak from their lived experience, which can bring a different and valuable perspective to that of other board members. They should be listened to at all stages of decision making. However, we do not think that mandating the inclusion of a tenant board member is necessarily the best way to achieve that aim.
Eddie Hughes
I have some experience of this, having been a councillor representative on the board of Walsall Housing Group at a time when it was a prescribed position. I distinctly remember a couple of instances prior to my being on the board when the Conservative spot was decided by random voting or people having been coerced into filling it. That seemed completely inappropriate.
When I became chair of the board of that group, we took a different view—to adopt a skills-based approach, determining that some of the skills would be best met by those who had experience of being a tenant. It was not prescribed that we were saving places for tenants; it just became a natural order of business that they would have the appropriate skills and experience to fill some of the vacancies on the board. Speaking from personal experience, too prescriptive an approach can sometimes lead to unintended consequences: people filling a place just because they need somebody under a certain heading to fill it.
Dehenna Davison
I thank my hon. Friend for setting out his own experience. It is an area the Government are very concerned about, and it comes back to the Committee’s debate today about how prescriptive we should be in the Bill.
Some housing providers already have tenants on boards, and they have been effective in championing residents’ voices, but this is not the case for everyone. Tenant board members are required to put their legal duties as a board member before their role as the representative for residents, which can cause confusion and conflict. Other structures can be just as successful and involve a more diverse range of tenants in decision making. That can range from formal consultations, focus groups and local events to appointed board observers and membership of panels focused on scrutiny, procurement or complaints that feed in at all stages of the decision-making process. We want to retain a flexible approach that promotes tenant empowerment and engagement for all tenants without forcing the statutory duties of a board member on a single individual.
The Regulator of Social Housing already sets standards for the outcomes that landlords must achieve in respect of tenant engagement. It will review, consult and update them as part of the new consumer regulation regime. The regulator will also ask landlords to demonstrate how they engage with tenants and require them to report on tenant satisfaction measures, as part of their assessment and inspection of landlords in the new regime. That is important because for the first time it makes tenants’ experiences a measure by which housing providers will be judged and held to account by the regulator.
There will also be improved transparency measures for tenants to be able hold their landlord to account. They need to know how it is performing and what decisions it is making. That information needs to be easily available. Earlier today we touched on the access to information scheme that we will introduce. That will enable tenants of private registered providers to request information from their landlords.
In addition, we have made funding available for a residents’ opportunities and empowerment programme, which will provide training to residents across the country on how to engage effectively and hold landlords to account. I hope that I have provided enough reassurance for the shadow Minister to withdraw his new clause.
Matthew Pennycook
I thank the Minister for that useful response and the hon. Member for Walsall North for his contribution. The Minister touched on an interesting issue when exploring the details of the Bill before today. There is not only potential for confusion but potential conflict about the role of a board member, particularly in the case of an elected councillor.
I was interested to read when looking into the death of Awaab Ishak that two councillors were removed by the board of Rochdale Boroughwide Housing for drawing attention to their concerns about buildings being pulled down—I am not saying that was anything specifically related to his death, but it related to concerns they had about a particular decision by the provider that was in conflict with their role.
In general terms, I understand the concern about being too prescriptive. This area should perhaps be kept under review. Whether it is best practice by some registered providers, guidance or whatever it might be, it is important to keep under review how to ensure that we can get the most representative and effective board of registered providers. As I said, this is a probing new clause. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 6
Standards relating to consumer matters
‘(1) Section 193 of the Housing and Regeneration Act 2008 is amended as follows.
(2) In subsection (2)—
(a) after paragraph (d) insert—
“(da) major repair or improvement works,
(db) estate regeneration,
(dc) service charges,”
(b) after paragraph (ga) insert—
“(gb) advice and assistance in relation to the prevention of homelessness,”
(c) after paragraph (h) insert—
“(ha) provision for urgent transfer of tenancies in relation to tenants affected by domestic abuse or other violence”’.—(Matthew Pennycook.)
This new clause would allow the regulator to set standards in relation to major repair or improvement works, estate regeneration, service charges, homelessness prevention, and urgent moves for residents at risk of violence.
Brought up, and read the First time.
Matthew Pennycook
I beg to move, That the clause be read a Second time.
In rising to speak to the final new clause, I thank hon. Members for their indulgence. They have listened to me a lot today.
Matthew Pennycook
Absolutely right.
We finish with an important new clause. It relates to what comes under the rubric of consumer standards as defined by the Bill. Since its initial publication in June, the Bill has been improved in several important respects. Today we have urged the Government to go further in relation to some areas and we will continue to do so, but we welcome the introduction of the consumer standards in relation to safety, transparency, competence and conduct.
However, there are other matters of real importance to social tenants that the Bill, as drafted, does not extend new consumer standards to. They include major repairs or improvement works, estate regeneration, service charges, advice and assistance in relation to the prevention of homelessness and urgent moves resulting from the risk of domestic abuse or serious violence.
New clause 6 simply seeks to ensure that the regulator has the freedom to set standards for registered providers in respect of each of those areas of housing management by amending section 193 of the Housing and Regeneration Act 2008 to include them within the scope of what is considered a consumer matter.
There is arguably a need for the regulator to carry out a thorough consultation about consumer standards to better understand what housing management issues currently matter most to tenants. However, we know both from organisations providing housing support, guidance and expert advice services and, I would argue, from our own postbags, that the issues covered by new clause 6 are important to tenants. There is an arguable case for placing them in the Bill to at least allow the regulator, which has probably consulted and developed them, to set consumer standards in relation to some of these issues at a later date. I look forward to the Minister’s response.
Dehenna Davison
As the shadow Minister outlined, the new clause seeks to amend the Regulator of Social Housing’s powers to set consumer standards in a number of ways. All the issues that he raised are important. Although I cannot accept the amendment, I will seek to address the issues raised in turn.
On major repairs and improvements, all social housing landlords should be delivering decent social housing and prioritising repairs and improvements that need to be made to ensure that housing is up to standard. The regulator is already able to set standards relating to the nature, extent and quality of accommodation, and the facilities and services, provided. That can include specified rules about maintenance, which would cover major repairs.
The regulator’s current homes standard already requires registered providers to provide a repairs and maintenance service that meets the needs of tenants, with the objective of getting repairs and improvements right the first time. The regulator will consult on and revise the standards following the passage of legislation and the issuance of Government directions.
On estate regeneration, let me be clear that I agree that landlords should be adequately planning for major regeneration projects and delivering planned maintenance. However, including that area as part of the regulator’s standard-setting remit is not necessary. As I have noted before, the regulator already has the powers required to set standards required relating to maintenance and repairs. Those standards apply to all homes, regardless of whether they are part of a regeneration project.
Existing legislation also enables the regulator to set standards relating to the contribution of landlords to the environmental, social and economic wellbeing of the areas in which their property is situated, which relates closely to the intended outcomes of regeneration projects. The regulator already sets expectations about neighbourhood management in its consumer standards and will be consulting on revised expectations under the proposed new standards, once the Bill has been passed.
It remains the responsibility of landlords to effectively manage their stock and deliver decent housing for their residents. We believe that a specific standard-setting power for regeneration is unnecessary. Effective asset management is already a focus of the in-depth assessments that the regulator conducts, which mean that landlords have to demonstrate to the regulator that they are able to maintain adequate levels of investment in the homes that they are responsible for.
I turn to service charges. The Government’s policy statement on rents for social housing encourages registered providers of social housing to keep any service charge increases within the consumer prices index plus 1% per year—the current limit on annual increases in social housing rents—in order to help ensure that charges stay affordable. Following our recent consultation on social housing rent increases, the Chancellor announced as part of his autumn statement that the Government will cap the increase in social rents at a maximum of 7% in 2023-24. In line with the proposal set out in our consultation, we will amend the policy statement to encourage providers to apply the 7% limit to any service charge increases in 2023-24.
Our policy statement also states that tenants should be supplied with clear information on how service charges are set; in the case of social rent properties, providers are expected to identify service charges separately from the rent charge. The new clause is not necessary to facilitate the regulator’s requiring that transparency from providers.
Furthermore, service charges are already governed by legislation in the Landlord and Tenant Act 1985, which states that service charges can be charged only to the extent that they are reasonably incurred and that enforcement of that is via the courts. Consequently, it is not appropriate or necessary to add to the Bill a specific standard-setting power relating to service charges.
I move on to the issue of homelessness. Let me be crystal clear: the Government are committed to preventing homelessness, and I commend my hon. Friend the Member for Walsall North on the incredible work he did on that as a Minister. Since the introduction of the Homelessness Reduction Act 2017, more than half a million households have been supported into secure accommodation. We are investing £2 billion over the next three years into addressing homelessness and rough sleeping, and in September we published our bold new strategy “Ending rough sleeping for good”. We have also provided £316 million this year for the homelessness prevention grant, which local authorities can use flexibly to meet their homelessness objectives—including to work with providers to prevent evictions.
I am not in a position to accept the new clause, as I believe the existing legislation is sufficient to achieve the outcome that the hon. Member for Greenwich and Woolwich is seeking. The regulator’s existing tenancy standard already requires social landlords to develop and provide services that will support tenants to maintain their tenancy and prevent unnecessary evictions. The regulator’s standards will be consulted on and updated following the passage of legislation and the issuance of Government directions. Consequently, homelessness prevention is already a priority for providers; the regulator plays a vital role in support.
I move on to the urgent transfer of tenancies in cases of domestic abuse and violence. Again, to be absolutely clear we do not expect anyone who is threatened with violence to feel that they cannot move to safety for fear of losing their security of tenure. A range of measures are therefore already in place to protect people at risk of violence and in need of urgent rehousing, some of which I have already outlined that in earlier contributions.
Chapter 4 of the statutory guidance encourages additional preference to be given to those fleeing violence, including people fleeing domestic violence, and private registered providers have a role in housing such people through their duties to co-operate, as I outlined earlier.
I will not rehash any more of the arguments that I made in response to the hon. Member for Dulwich and West Norwood and her new clause 1. However, I should add that in schedule 5 to the Bill, we are already amending the regulator’s standard-setting powers to include policies and procedures in connection with behaviour that amounts to domestic abuse within the meaning of the Domestic Abuse Act 2021.
For all the reasons I stated, I do not believe that the amendments to the regulator’s standard-setting powers are necessary. I ask the hon. Member for Greenwich and Woolwich to withdraw his new clause.
Matthew Pennycook
I thank the Minister for that response. I am somewhat reassured by it, to the extent that she has laid out—in considerable detail, in some cases—the ways in which some of the issues of concern flagged in the new clause are appropriately covered by the standards, guidance, policies and procedures. My reservation is about whether those existing processes have the effect that would be achieved by allowing the regulator itself to set standards and consumer standards.
Given how complex an issue this is, I will take away the Minister’s response and look at it in more detail, but I reserve the right to come back to the issue on Report. We think it is important that some of these real issues of concern to tenants be given due consideration when it comes to whether they are brought within the new regulatory regime to be established by the Bill. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
Question proposed, That the Chair do report the Bill, as amended, to the House.
Dehenna Davison
I have my Oscars-style speech of thanks to give before we finish today. First, a huge thank you to you, Sir Edward, for chairing the Committee so successfully and professionally, and for keeping us all in check. We are MPs; we always need someone to keep a good gaze over us to ensure that we are behaving.
I thank all members of the Committee for a constructive debate. One of the most reassuring things has been that there is such cross-party consensus in recognising that the Bill is absolutely needed and that we can all very much get behind its aims.
I thank the Clerks for their stellar work and my officials, who have been brilliant at speedily giving me all the information that I need. I thank the fabulous Whip, my hon. Friend the Member for Hertford and Stortford, again for keeping us in check on the Government Benches.
I also say a huge thank you to Grenfell United, Shelter and others for their engagement on this important legislation. As the Minister, I feel grateful to have had the opportunity to take the Bill through Committee. I look forward to its coming back on Report; as I said, I will engage with Members before that point.
In my final breath, I say a massive good luck to both teams tonight. I am sure most people know which one I am supporting.
Matthew Pennycook
Briefly, Sir Edward, I thank you for your chairmanship of the Committee and the Clerks for all their work to prepare us. I thank the Minister for the constructive tone in which she approached the debate, and all hon. Members for the considerable amount of expertise and insight put forward in our debates. I, too, thank all the organisations, not least Grenfell United, that sent us their views and engaged with us on what they see as important in how the Bill could be strengthened.
As I said at the start, the Bill is uncontroversial and we welcome the vast majority of measures. We want to see it strengthened and we have made the case for that today. We will continue to make the case on Report for those areas of the Bill where we want to see further improvement, but I am glad that it can make swift progress to its next stage.
The Chair
I thank you for being so expeditious. My fellow Chair, who is a Scot Nat, has had an easy ride.
Question put and agreed to.
Bill, as amended, accordingly to be reported.
Westminster Hall
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Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
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Devolution of Justice: Wales
(2 years ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
I beg to move,
That this House has considered the potential merits of the devolution of justice to Wales.
Diolch yn fawr iawn, Cadeirydd—thank you very much, Mr Vickers; it is an honour to serve with you in the Chair. I am pleased to have secured this debate on the potential merits of the devolution of justice to Wales.
Wales, of course, has its own distinct legal history dating back to the laws of Hywel Dda, prior to the Acts of Union in the 16th century. In spite of the fact that many of us enjoy talking about Welsh history immensely, I am not here to make the case for devolution by looking into the past. I am here today because of the potential for a better future and because the case for devolution of justice is self-evident for those who care to look. It is a permanent question seeking an answer in the constitutional landscape of the United Kingdom, and I believe this to be irrefutable, whether the matter is approached from a Welsh viewpoint or from a Westminster viewpoint: that is an important point to make.
It has been more than eight years since the Silk commission recommended devolving police and youth justice to Wales, although those powers were not incorporated into the Wales Act 2017. It has been three years since the Thomas commission on justice in Wales published its report in October 2019, setting out a long-term vision for the future of justice in Wales. The Thomas commission produced 78 different recommendations on how Wales can have a justice system fit for the 21st century, the central one being the devolution of justice and policing and the creation of a separate Welsh legal jurisdiction. To quote the report directly,
“the people of Wales are being let down by the system in its current state. Major reform is needed to the justice system and to the current scheme of devolution.”
The weight of evidence is behind devolution. There is a growing consensus across civil society, academia, the Welsh legal profession and justice workers in the system that this needs to move ahead. That consensus is also to be found at the political level. All of Wales’s police and crime commissioners have said that the devolution of justice and policing is the next logical step. All the representatives of the justice unions who speak here and who also speak with the Senedd are engaged with how matters could be dealt with better if justice were devolved—that is the point of devolution: how the outcomes could be better. A majority of Members of the Senedd support the devolution of justice, as outlined in the Welsh Labour Government’s co-operation agreement with Plaid Cymru, which is a year old this week.
Despite having a Parliament and a Government, a legislature and an Executive, Wales is a nation without its own legal system and courts. For a nation with 22 years of policy making characterised by the values of social justice, equality and community strength, Wales can only stand by and watch the Westminster Government impose fundamentally different values through the arc of the criminal justice policy. Imagine if Wales had policy control over that arc, from crime to arrest—namely, policing—and prosecution, and then from sentencing to imprisonment and probation. Imagine that the Government of Wales had even the powers equivalent to those held—wait for it—by the Mayors of Greater London and Manchester. This is in stark contrast to Scotland and Northern Ireland, and it is unheard of internationally. When the Minister responds, could he tell us of any other examples of nations that have their own Executive and legislature but no judiciary? Does he honestly believe that this is the best way to structure an effective justice system?
The response by the UK Government to the Thomas commission was characterised by a combination of “Westminster knows best” and funding scaremongering. Here we had a former Lord Chief Justice in Lord John Thomas of Cwmgiedd, heading up an expert commission whose work across two years included a vast amount of evidence from across Wales. That extensive overview and analysis of justice in Wales was dismissed out of hand by the UK Government, who did not even bother to formally respond.
Not content with being told no by Westminster, we in Wales have instead been doing what we have had to do all along: building the institutional frameworks and capacity, piece by piece, so that we are ready for proper control and responsibility over justice. The unification of the Welsh tribunals, which put them on a proper footing, is in effect creating a nascent justice institution, which could in turn be the basis for the transfer of the courts to Wales. We are developing our capacity properly to scrutinise the operation of justice in Wales. At present, the Senedd’s Legislation, Justice and Constitution Committee—the clue is in the name—undertakes the work of three committees in one. We are also addressing that capacity through the expansion of the Senedd, which again is thanks to Plaid Cymru’s co-operation agreement with Welsh Labour.
Hywel Williams (Arfon) (PC)
On my right hon. Friend’s earlier point about tribunals, the seven administrative tribunals that operate in Wales are in a sense Welsh bodies, but control from Westminster—from Whitehall, actually—is very strong. That point was made when the tribunals were set up: Whitehall runs them and has the final responsibility.
Liz Saville Roberts
We will look at areas where there has been a little moving ahead on other aspects of the courts that have been proposed in Wales.
In that respect, I refer to a groundbreaking new book by Dr Robert Jones and Professor Richard Wyn Jones of Cardiff University, entitled “The Welsh Criminal Justice System: On the Jagged Edge”. It is a rigorous and thoughtful analysis of criminal justice in Wales. Indeed, it is the first of its kind, because the evidence is only now beginning to become available, and at present we have only a snapshot. I think that all will agree that, if we are looking for an evidence-based system, we do not want a snapshot: we must be able to track trends and developments over time. That is one of my key asks of the Minister, to which I hope he will be able to respond anon. The book presents a thorough overview of how justice operates in Wales, and shows why devolution is a vital step for aligning policy, values and legislative powers. As I have already said, that is the case for Northern Ireland and Scotland, and also to a degree for Greater Manchester and London. It is not possible to over-emphasise that inconsistency.
Justice in Wales is currently controlled at Westminster, but the Senedd controls key devolved services that are just as important for the delivery of justice. That has created what Lord Thomas originally called the “jagged edge”—a jagged edge of intersecting competences and responsibilities. That results in serious disadvantages, which include financial and opportunity costs; a lack of coherent, joined-up policy making; and an overly complex system that leads to a lack of understanding of how justice operates in Wales.
The Cardiff University book lays out how outcomes in Wales are particularly poor. When English and Welsh data are disaggregated, we see that Wales performs even worse than England, which is one of the worst performers in Europe. The figure that we will keep coming back to is imprisonment. England and Wales have the highest imprisonment rates in Europe. Because of the disaggregated data, we now know that Wales has the highest imprisonment rate in western Europe. That fuels a cycle of poverty, as well as health and mental health problems. Wales has higher violent crime and conviction rates than England. Black people are six times more likely to be in prison than their white counterparts. Nearly half of Welsh children who are imprisoned are detained in England, far from their homes and family support, and court closures have restricted access to justice across whole swathes of rural Wales. The lack of coherent policy making is one of the key features of the jagged edge, and it is the people in the system—and the communities from which they come and to which they return—who lose out.
First, let us take the case of women in the justice system in Wales. Welsh Women’s Aid notes that the women in the prisoner population, and those in contact with the police and other related services, are far more likely than men to have additional support needs such as mental health diagnoses, a history of drug and alcohol abuse, and homelessness, or to have experienced violence, domestic abuse and/or sexual violence. Importantly, the Welsh Government, with the backing of the Senedd, have a specific policy to reduce the number of women entering custody, given their vulnerability. That is a piece of policy extant in Wales from our Senedd and our Government. However, the aim comes crashing down against the reality of how the criminal justice system operates in Wales and the differing Westminster policy in relation to putting more people into prison.
There are no women’s prisons in Wales. Welsh women are sent most often to either His Majesty’s Prison Eastwood Park in Gloucestershire or HMP Styal in east Cheshire, which are tens or hundreds of miles away from their support networks, and getting to these prisons, particularly by public transport, is extremely difficult. Given that roughly 50% of women prisoners are also mothers, the effect of such distance on the mental health of those women and their children, and on the outcomes for the children, must not be underestimated.
Alun Cairns (Vale of Glamorgan) (Con)
I congratulate the right hon. Lady on securing the debate. She makes important points about the detention of women, and I know that the Ministry of Justice has sought to discuss the issue, negotiate and open facilities in various local authorities. My constituency was a consideration at one time, but no suitable accommodation could be found. Is that not an example of the Ministry of Justice seeking to answer the issues that have been raised? Local authorities themselves are rejecting it.
Liz Saville Roberts
I will return to that later, but because the right hon. Gentleman has raised the point, I will engage with it now as well. There is a residential unit in planning for one area of Wales, but we really need to know exactly which services will be there. Will it effectively be a small-scale prison, or will it actually offer the services that women need? We also need to know what the interface will be between the devolved service and the reserved provision. That is a very timely point, because it has just become apparent at the private prison near Bridgend, HMP Parc, that the local authority has had to step in to take over social services there. Again, this ad hoc arrangement, the lack of clarity and the lack of scrutiny over who is providing what is resulting in bad outcomes, which is why the debate is so timely.
It is evident that there are not many of us in this room. That is actually part of the issue, because Westminster will concentrate on where the loudest majority issues are. However, there is a phenomenon in Wales: the disconnect. Frankly, if this is the best we can do in relation to the disconnect with the highest imprisonment rates in western Europe, we must consider looking at the issue in an alternative way.
Hywel Williams
My right hon. Friend is being very generous and I will pipe down after this, as I hope to speak in the debate. Another small example is when we were campaigning for a prison for north Wales some years ago. We almost got a prison, which would have been a community facility, for the 600 or so men from north Wales who are imprisoned. We also campaigned for units for women and for young people who are held, contrary to the regulations, further than 50 miles away from their homes. What we actually got from Westminster was a 2,000-man super-prison in Wrexham, which does not serve the needs of local people.
Liz Saville Roberts
Again, I will return to that. This is not just a matter of serving the needs of Wales. Sending thousands of prisoners miles away from home—men or women—does not serve the vast majority of those prisoners well either. If we want a joined-up magic connection with housing, work and maintaining kinship, family and friendship connections, which we know are the routes to successful rehabilitation, we should not send prisoners hundreds of miles away from where they will return, because those links will not be made, be they back home in Wales or in communities in England.
Jim Shannon (Strangford) (DUP)
I am encouraged by what the right hon. Lady said. When we look across this great United Kingdom of Great Britain and Northern Ireland, there are two examples of where it has happened: Northern Ireland and Scotland. Surely those are examples of what has worked, and Wales should have the same opportunity as Northern Ireland and Scotland for the benefit of those in Wales.
Liz Saville Roberts
I am grateful to the hon. Gentleman for his intervention, and I am honoured that Members from across parties are pointing out the inconsistency that we are experiencing in Wales.
The UK Government’s prison population projections from 2021 to 2026 anticipate that prisoner numbers in the England and Wales conglomeration will rise to 98,500 by March 2026. Those are extraordinary figures. As part of that increase, the Ministry of Justice anticipates that the number of adult female prisoners in England and Wales will increase by over a third—36%. Disaggregated data from Wales shows that the number of Welsh women in prison will likely increase from 227 to 308. Therefore, the provision that is being planned now for south-west Wales, although welcome—even to those of us who disagree that that number should be arriving in the system—is highly unlikely to deal with the numbers we are anticipating to arrive in the system.
Under the plans that took effect in May, the maximum prison sentence that can be handed out by magistrates has increased from six months to a year, which is also expected to contribute to a rise in prisoner numbers. Disaggregated sentencing data shows that the average custodial sentence length for women sentenced in Wales already increased from seven months in 2017 to 13.6 months in 2021. Although 23% of the Welsh female prison population was serving sentences of four years or more in 2019, that has increased to 29% in 2021. How does that align with the Welsh Government’s stated aim to reduce the number of Welsh women in prison? The answer, of course, is that it simply does not because there is no direct link between the very worthy policy, which most of us support, and the means to bring it about.
I am pleased that the UK Government are working with the Welsh Government to establish a pilot women’s residential centre in Wales as an alternative to custody, and my probation service in north Wales is doing very good work to the best of its ability on the ground, but the policy and structure that we have in place hinder it. In truth, the number of women supported will be small and focused in very specific areas of Wales. Therefore, my second question to the Minister is: given that overall incarceration of women from Wales will increase, does he honestly believe that to be coherent policy making for women in the criminal justice system in Wales? Particularly since the autumn statement, it looks likely that Departments such as the Ministry of Justice will have less capital money to spend in the long term. I wonder where that leaves the development of multiple women’s residential centres across Wales.
Another issue that shines the cold light of reality on the jagged edge is housing. Housing and the responsibility for preventing homelessness lie, as we all know, with the Welsh Government, and have done so for 22 years, but the policy aim is not properly aligned with the Westminster-controlled criminal justice system at present. The removal of priority need for prison leavers in the Housing (Wales) Act 2014 was driven by several factors, including low levels of housing stock and pressures on hard-working local authority staff in finding accommodation for prison leavers. It was, however, in part due to the inability of the Welsh Government to control or even influence the upstream factors that affect the rate and timing of demand for housing prison leavers. Even though prison leavers still get let out of prison on Fridays, they get no support at the weekend. The outcomes of that need proper scrutiny.
Those factors include the rapid rise in prison leavers from an ever-expanding prison population, the long distances from home addresses, which reduce the likelihood of prison leavers being able to receive support services, and the fact that Welsh prisoners are widely dispersed across England, making it hard to know when and where the demand will arise when they return to Wales. The same facts apply equally to English-address prisoners held in Welsh prisons. This is not looking at the justice experience just from a Welsh perspective but as a totality.
Alun Cairns
The right hon. Lady is looking at this from a purely nationalistic point of view, and I understand the motive behind that. Does she not accept that a prison in England could be closer to a prisoner in my constituency, and more appropriate than what she envisions in her purist approach, which is that the prison must be in Wales? If it were in north Wales, it would be four and half hours away.
Liz Saville Roberts
With respect, there are a number of prisons close to the right hon. Gentleman’s constituency. I was emphasising that women are at present going to prisons in Gloucestershire or Cheshire. If we sent prisoners from south-east England to Parc or Berwyn, they too would be very distant from their homes. That is not an effective way to ensure rehabilitation.
Alun Cairns
That is a challenge that we need to address sensibly, but simply saying that a Welsh prisoner needs to stay in Wales is not sensible. If a Welsh prisoner needs to stay in Wales, must they travel four and half hours from north Wales to a prison in south Wales? We need to recognise the interconnectivity between Wales and England; 50% of the Welsh population live within 25 miles of the border.
Liz Saville Roberts
With respect, the right hon. Gentleman is looking at the convenient location of prisons, rather than at justice outcomes, which is what I hope we look for in our scrutiny. It is not a matter of where people go; it is a matter of their coming back to the communities where they have committed crimes. I am looking at this not just from the point of view of those individuals and their families, although I hope the children of prisoners would certainly be our consideration, but from the point of view of the communities to which they return.
I hope we all aspire to effective rehabilitation. Yes, we penalise people by taking away their liberty, but when they return to the community, we hope that they are healthier than when they went to prison, have the opportunity for more education, are housed, can find work and have a stable family environment. That is all down to services, and there is a jagged edge where there is no interconnectivity between reserved and devolved powers.
To return to housing, since the removal in 2014 of priority need in Wales, there has been an increase in the number of prison leavers presenting as homeless. As we have mentioned, housing is a factor in the success or otherwise of rehabilitation. In the year 2019-20, fewer than half of those released from prison custody who were managed by probation services in Wales went into settled accommodation. However, simply reintroducing priority need for prison leavers is meaningless unless we have proper joined-up working between criminal justice and social services providers, as the local authority in Bridgend does.
I have emphasised the two issues of housing and women in the criminal justice system to highlight the illogical nature of the misaligned mishmash of powers and responsibilities, which leads to problems in the operation of justice in Wales. There are countless other examples I could have chosen from across the justice system: policing, probation, courts, education, health services, access to justice and the experience of victims in Wales.
The portrait of justice in Wales is so ill drawn that it can only be presumed that the Ministry of Justice assumes that no one is looking. We are at least looking today, but there is the important question: what is to be done? The Thomas commission proposed the devolution of justice responsibilities to
“enable the proper alignment of justice policy and spending with social, health, education and economic development policies in Wales, to underpin practical, long-term solutions; place justice at the heart of Government; enable clearer and improved accountability.”
Devolution of justice is not simply a nice thing to have, a policy toy to play with. It is essential if we want to build a better and fairer society. It is the only way truly to end the jagged edge and create a system that genuinely serves the people of Wales. It would also offer some protection against the attack on human rights and civil liberties that the UK Government have been undertaking, such as their curbing of protest rights through the Police, Crime, Sentencing and Courts Act 2022.
It is hard to see how the Welsh Government can develop any plans for a Welsh Bill of Rights without having full control over justice in Wales. I have tried to think from the opposing point of view, and there are three points that critics of what we propose might throw back at us. The first is the cost of devolution. When I spoke in the debate on the Thomas commission report three years ago, the Minister at the time claimed that the additional running costs would amount to £100 million per annum, but that is not even consistent with the evidence provided by the UK Government to the Thomas commission. Rather, the UK Government’s 2018 estimate was that the initial set-up costs associated with devolving justice—all right, at the time; fair enough—would amount to £101.5 million, with subsequent additional costs of some £37.5 million per annum.
Focusing on the additional financial costs involved for devolved Government, the Welsh Government estimated set-up costs of £13 million, with £10 million per annum of additional costs to follow. In other words, excluding set-up costs, the extra incremental cost of devolving justice would come to less than half the amount claimed by the justice Minister three years ago. That is in the context of an annual spend on justice functions in Wales of some £1.2 billion.
Moreover, while there would clearly be some additional costs involved in devolving justice, there are estimates that Wales would benefit financially if justice were devolved. Per capita spend on justice is lower in Wales than in England, but if justice were devolved, the operation of the Barnett formula would, over time, ensure that the amount in the Welsh budget derived from UK spending on justice in England equalised at the English per capita level—that is, it would be more.
While it would ultimately be up to the Senedd to decide how to allocate the extra resource, those funds would be available for spending on justice-related functions, such as crime prevention, tackling substance misuse and reducing homelessness. As it is, the Welsh Government are already putting money into funding extra police community support officers. There is an argument that people in Wales pay more for policing than people in England. This change would ensure better scrutiny, and that the money spent for Wales would be accounted for in Wales.
The potential to reduce homelessness gives an example of the real savings that could be made as a result of our reducing the negative outcomes of the justice system. The charity Crisis has estimated that
“people who experience homelessness for three months or longer cost on average £4,298 per person to NHS services, £2,099 per person for mental health services and £11,991 per person in contact with the criminal justice system.”
It is a matter of whose budget we look at to see the savings. They are not all siloed in one place.
As Lord Thomas himself noted in evidence to the Senedd last year, devolution presents a great opportunity for Wales; we could
“take advantage of Wales’s relatively small size and its lack of a vast metropolis to see if you can mould the workings of the bodies together to produce a coherent policy that is designed for the needs of Wales, rather than the needs of a much bigger country with very different potential problems.”
When it comes to the operation of justice in Wales, small really is beautiful, flexible and community focused.
Let me move to the second point I anticipate being used to counter what we propose. Advocates for the status quo might say, “We need better funding for the system.” That does not account for the structural issues at play here. Yes, fair and proper funding for Wales is vital for the operation of justice, but as I have highlighted, different policy decisions in Wales and Westminster are creating unavoidable tensions and failures, which money alone cannot solve.
There are two structures in play, and they are pulling in different directions. For example, even in the years of austerity in the 2010s, under a devolved system, the Welsh Government might well have chosen not to close so many courts or pursue the absurd privatisation of probation. We could have made different policy choices, even in the context of reduced funding.
The last Labour general election manifesto sadly rolled back from implementing the Thomas report, citing that it was a case for only reversing austerity rather than pursuing devolution to Wales. Therefore, cautiously, I ask the shadow Front Bench to recommit fully to implementing the Thomas commission report, just as they committed to doing so in their previous manifesto in 2017. If they will not, the question is whether the Labour party is intent on undermining its Labour colleagues in the Senedd.
Thirdly, other advocates of the status quo point out that it is not further devolution that we need, but better joined-up working between the Ministry of Justice and Welsh Government officials. However, even experienced MOJ officials in Wales are often overridden by their superiors in London, through policy decisions that often have no thought about Wales. There are agreements in place between the MOJ and Welsh Government, such as the concordat published in 2018 to establish a framework for co-operation between the MOJ and Welsh Government. However, in practice, such agreements do not work properly. As my hon. Friend the Member for Arfon (Hywel Williams) showed when he questioned Ministers about the memorandum in the context of the development of the Police, Crime, Sentencing and Courts Act 2022, it was unclear whether the UK Government followed the concordat and consulted properly with the Welsh Government on the Act, in spite of the impact that so many of the changes to policing and justice would have on devolved policies and competences.
Where UK and Welsh Government are aligned on justice matters, progress is slow. For instance, the Thomas commission recommended that problem-solving courts be established across Wales to promote alternatives to custody and tackle root causes of offending. The UK Government are piloting problem-solving courts, but not one is in Wales. It is in the Welsh Government’s justice work plan to pursue the establishment of a court. Can the Minister tell us what recent engagement he has had with the Welsh Government on establishing problem-solving courts in Wales?
The Welsh element of justice will always be an afterthought. My hon. Friends the Members for Arfon, and for Ceredigion (Ben Lake), run after Ministers saying, “Have you thought of this? Have you consulted on that?” The answer almost invariably is a bland no. Then, we find that we have to catch up.
On accountability, the mechanisms and institutions of the English and Wales system do not properly engage with the Welsh part. Let us take the Lammy report—a landmark report on racial disparities in justice. There is no real engagement on how devolved services interact with the justice system in Wales, or exploration of the Welsh content. The specific needs of Wales are drowned out on the Justice Committee. The Welsh Affairs Committee has sought to scrutinise the effect of the interface between reserved and devolved matters.
Alun Cairns
I am grateful to the right hon. Lady for making some points about racial injustice. Does she share my frustration that the Welsh Government chose not to be part of the race equality audit established by the former Prime Minister, my right hon. Friend the Member for Maidenhead (Mrs May), to provide a baseline of evidence? There were active invitations and efforts made to encourage the Welsh Government to participate, so that we could establish whether the same problems existed in Wales, and they chose not to. That runs contrary to the right hon. Lady’s statement that Wales is an afterthought.
Martin Vickers (in the Chair)
Order. I remind hon. Members that interventions limit the time available for other Members to speak.
Liz Saville Roberts
Thank you, Mr Vickers. I am drawing to a close. We have data for Wales. Black imprisonment rates are shocking. The Welsh Affairs Committee undertook a 2019 inquiry on the prison system in Wales, but it is not a specialist Committee, and its inquiries cannot and should not take the place of a full holistic overview of justice and the intersecting devolved services under the remit of the Senedd.
That leads us to the disaggregation of data—the teasing apart of the English-centric statistics that is necessary if we are to observe what is happening in Wales. Outcomes are particularly poor in Wales, and we know that the jagged edge exists, but we cannot properly explain trends in the justice system if the right data is not in place. Cardiff University has revealed disparities in imprisonment rates between England’s most and least deprived areas. Meanwhile, disaggregated data has shown that Wales recorded a higher rate of imprisonment. The link between poverty and imprisonment is clear, yet we do not know the degree to which that is true in Wales due to the lack of trends in Wales-specific data. This raises the question of how the MOJ can claim to make evidence-based policy for Wales. I raised that point in a Westminster Hall debate two years ago, yet we are in exactly the same position today, with no regular reporting of Wales-specific justice data. My major ask to the Minister, therefore, is to finally begin regularly publishing disaggregated criminal justice data for Wales, so that we have a proper overview.
To close, there are those who will argue for a piecemeal approach to devolution, but that, to me, will simply exacerbate the jagged edge by creating an even more complex, byzantine palimpsest of a system. If we—I include the Welsh Labour Government in this—want a transformational approach to justice in Wales, piecemeal reform will be tokenistic and on track to fail. Policing and justice, I propose, should be devolved in their entirety to Wales.
Several hon. Members rose—
Martin Vickers (in the Chair)
Order. Members should note that I intend to call the SNP spokesman at 10.28 am, which limits contributions to three to four minutes each, if I am to get everyone in.
Alun Cairns (Vale of Glamorgan) (Con)
Thank you for calling me to contribute, Mr Vickers. I congratulate the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts) on securing the debate. It is unfortunate that we have such limited time, but I will try to canter through some of the key points that I want to make.
I approach this debate as an advocate for devolution and as the former Secretary of State who took the Wales Act 2017 through Parliament. It is hard to believe that in 2010 our inheritance from the last Labour Government was the legislative competence order system, whereby the Welsh Assembly had to ask permission to pass legislation in any particular area. It is worth remembering how far we have moved from the system between 2010 and today, when we have a full law-making Parliament in Cardiff Bay. I hope that sets out the context for my remarks.
During the development of the Wales Act 2017, it was clear that some were determined to devolve justice, irrespective of the evidence from within the profession that did not support that devolution. We agreed to disagree with the Welsh Government in the end, with the First Minister specifically saying that he would revisit the matter. The only conclusion I could draw was that the political elite wish to see the devolution of justice, rather than the issue being raised on the doorstep, or forming part of a campaign from those in the profession or our constituents, who really wish for genuine improvement in this area. That is not to say that improvements do not need to be made—they do—but there have not been calls for devolution of the issue, other than from the political elite.
I also note that the Commission on Justice in Wales was established by a devolved institution on a reserved policy matter. Imagine if the UK Government decided to have a commission on health or education in Wales—devolved policy areas—without there being equal and active engagement with the other party. That demonstrates that the political elite are driving this agenda, rather than this being something that is demanded.
The right hon. Member for Dwyfor Meirionnydd based her claim around genuine problems that need addressing. I am not denying that there are challenges in the system. We all remember the challenges in Wales—it could be said that they are even greater partly as a result of the intervention by the Welsh Government, who closed down the courts during covid when they were still functioning in England. That is an example where the Welsh Government have sought to influence justice in a negative way.
The right hon. Lady said that devolution of justice is a chance for Wales to have better outcomes. If I wanted to be flippant, I would point to the outcomes in health and education; sadly, our waiting times are longer, and our education outcomes certainly have not improved, as they have across England and Scotland in the past decade or more.
The key point I want to make in the limited time I have is about the importance of the industry that is the legal system operating between Wales and England. Extremely profitable large law firms based in Cardiff form part of an ecosystem that develops businesses, often from the City of London or other parts of the United Kingdom. Functions and professional legal expertise are provided in Cardiff, creating some of the most highly paid jobs in a desired legal profession, creating career opportunities and allowing people to move inside and outside Wales to develop their business model. Some of those firms have office spaces in the City of London and attract the business of the City, and the functions are then conducted in Cardiff. Devolving justice to the Welsh Government and to Wales would really undermine those business models. Those are the businesses that the right hon. Member for Dwyfor Meirionnydd should talk to.
Hywel Williams
The right hon. Gentleman made the claim earlier that this is a matter of the elite calling for change, and then he makes an argument for elite lawyers in Cardiff.
Alun Cairns
I would like to see more elite lawyers in Cardiff, because raises gross value added and creates career opportunities for Welsh people, wherever they come from.
During the negotiations on the Bill that became the Wales Act 2017, I received representations from some of the most senior lawyers in England and Wales, who were very concerned about the agenda of devolving justice and the damage that would cause to the sector.
Liz Saville Roberts
Where does the right hon. Gentleman think our priorities should lie—the business models of law firms or justice for people living in the communities of Wales?
Alun Cairns
I am grateful to the right hon. Lady for the question, but I do not think they are mutually exclusive. We can address the injustices that the right hon. Lady has raised—those genuine challenges need to be addressed, and I look forward to the Minister’s response—but that should not undermine the large employment numbers, the well-paid positions and the career progression that is provided for people, certainly from my constituency, who work in law firms in Cardiff and south Wales. Lord Thomas of Cwmgiedd called for the development of that cluster, but the right hon. Lady’s proposals would do nothing but undermine it.
Martin Vickers (in the Chair)
I call Hywel Williams. Four minutes if you could, Mr Williams.
Hywel Williams (Arfon) (PC)
It is a pleasure to serve under your chairmanship, Mr Vickers. My right hon. Friend the Member for Dwyfor Meirionnydd (Liz Saville Roberts) has made a forceful and detailed argument. I support her questions, and I hope we get some answers.
Justice sticks out like a sore thumb as one of Westminster’s biggest devolution failures. Despite later devolution, and the change to a Scottish-style system, London has hung on to justice. Our Senedd now passes laws but it does not control the justice system, the courts or the prisons. Nor does it control the police, although between them local authorities and the Welsh Government provide about 60% of the funding for the police. Again, they have responsibility without power. As my right hon. Friend pointed out, our Senedd is a legislature without its own jurisdiction—the only one I know of in the world.
A lot of public services that make the justice system work are the responsibility of our Government in Cardiff— again, responsibility without power. Even if our public policy changes because of the decisions of our democratically elected Government in Cardiff, that need not follow through to justice. Health, mental health, education, housing, social services, the economy and employment might all improve in one direction, but justice need not change. Those are just some of the services we need to get the criminal justice system to work properly and to ensure that as few people as possible break the law and end up in prison. If they do offend, such services are crucial in getting them back on the straight and narrow. There is a huge hole in the middle of our justice system, which might be one reason why the system in Wales is clearly worse than anywhere else in Great Britain.
My right hon. Friend referred to “The Welsh Criminal Justice System: On the Jagged Edge” by Jones and Wyn Jones, which is an excellent publication that I would recommend to Conservative Back Benchers. Eastwood Park has prisoners from Wales and from England. According to Jones and Wyn Jones, the rate of recidivism—further offending—by the English prisoners is one in 10, but for the Welsh prisoners it is nine in 10. That hugely stark fact points to the problem. I visited Eastwood Park and talked to a prisoner from Aberystwyth who told me she was not going to have any visits, because the hike from Aberystwyth down to Eastwood Park was too much for her young family. That is the sort of system that we have.
I want briefly to note an historical example of the discontinuity between what Wales wants and what is public policy in Wales, and what we actually get. I hope Members will forgive me for going back as far as 2007, when I tried—as I did later under a Tory Government—to introduce a small but significant reform to the jury system in Wales, to fit in with how things really are in terms of the Welsh language and to allow for bilingual juries.
The Juries Act 1974 is clear that juries should understand the evidence as directly as possible. If members of the jury do not understand English, the judge will bar them. There is no such qualification for Welsh. A matter of principle is at stake. The principle of a language qualification for juries is already conceded for English. However, in Wales, if a young person or a child is giving evidence in Welsh, there is no guarantee that the jury will understand the evidence as directly as possible, as would be the case if the child was speaking English. A wrongdoer might get off or an innocent person might be found guilty, not on the evidence but on how it was heard. My private Member’s Bill would have brought some sense to that system, and I recommend it to the Minister.
Robin Millar (Aberconwy) (Con)
It is a privilege to serve under your chairmanship, Mr Vickers. I congratulate the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts) on securing the debate. I listened intently to what she said because the issues that drive the debate are vital.
I will be quick because of the limited time I have, and I hope colleagues will forgive me if I do not take many interventions. On behalf of residents and communities in Aberconwy, I thank our policemen and women for all they do each day to keep our communities safe. In April, I highlighted the astonishing work of the North Wales Police intercept team, which was set up to clamp down on organised crime and drug dens throughout north Wales. The team uses innovative technology to intercept and disrupt criminals, making north Wales a hostile environment for crime groups to operate in. In the last fortnight alone, the team has helped to secure the hugely significant conviction of the leader of a county lines network operating between Merseyside and north Wales and to seize considerable amounts of cash and class A drugs. I also thank the new chief constable, Amanda Blakeman, for her work with me in recent weeks on responding to community concerns about the opening of a hotel for asylum seekers in a rural village in the south of my constituency.
I will not miss an opportunity to thank and pay tribute to the police when they do that kind of good work, but that is not my sole motive for highlighting their work and successes today. County lines and the wider trade in controlled substances across north Wales are a cross-border issue that operates on an east-west axis. The point has been made well by others that one danger of the argument being made in this debate is that it focuses on a Wales only, built in Wales, made for Wales and by Wales approach. We have seen the weakness of such an approach in transport, where Wales is deeply integrated east to west with England. There is no economic driver for a north-south rail link, for example, but there is plenty of demand for east-west rail links.
We see such parallels time and again. Wales cannot consider that it sits in isolation, so my first point is about integration. The right hon. Member for Dwyfor Meirionnydd says there is no legal system in Wales, but there is. [Interruption.] Despite Members’ protestations from a sedentary position, the UK’s legal system applies in Wales, as it properly should, given that Wales is part of the United Kingdom.
One highlight of my job—perhaps the greatest—is being back in my constituency each week speaking with residents, but I do not recall the issue of devolving justice once being raised with me. I do not recall a single email, phone call or letter raising the issue. In fact, I suspect that, once we excluded conversations with fellow politicians and political activists, most hon. Members present would recognise that the prominence this issue has with their constituents is very low indeed. The fact that there are only a few Members here suggests that this is more of a conversation among academics and politicians than a pressing concern to residents.
I would also mention the question of money, because, quite simply, this debate is an answer to a question that is not being asked by residents, and an expensive answer. It is important to mention money, although I do not think money is the only rationale. If this issue has value and importance, as the right hon. Member for Dwyfor Meirionnydd rightly suggests, it is important that we pay the money necessary. However, my point is about value. If these eye-watering sums—£100 million was the estimate of the Silk Commission—are to be paid out, we must see the impact of that and value for it. We might ask the same question about the Welsh Government’s fascination with paying out £100 million to have additional Senedd Members. Again, that is an answer to a question that is not being asked.
If I had time, I would draw attention to some of the problems that Wales has in other areas of its public services. However, I will conclude by saying that, while the right hon. Member highlights that Wales has the highest imprisonment rate in western Europe, the reasons are complex. To suggest that the devolution of justice is the solution is to prioritise managing a symptom over addressing the cause. That cannot be right and, for that reason, I resist, at present, these arguments for the devolution of justice to Wales.
Martin Vickers (in the Chair)
If the remaining three speakers could limit themselves to three minutes, we can just about get them in.
Kenny MacAskill (East Lothian) (Alba)
It is a pleasure to serve under your chairmanship, Mr Vickers. I would not normally speak on Welsh affairs, but having been asked to contribute—indeed with some consent—and taking into account the fact that I contributed to the previous commission and have met trade unions and federations about this issue, I would make the point that it does not relate to the constitution as such; it relates to the administration of justice. That is the perspective from which I am coming, and I support it. It is for Wales’s to decide its constitutional future, but if it wants the best justice system it can have, it does have to take this step.
I have been listening to some of the discussion regarding prisons. One of first things the SNP did on justice when we came in in 2007 was to implement a whole-systems approach. We recognise—it will be the same thing, but with a different name and a different vocabulary, in England and Wales—that behind every troubled child there is invariably a troubled family. If we are going to sort out that child, that cannot be done simply by the justice system. It requires the involvement of education, health and employment. As it was, we made significant reductions in child offending and child imprisonment in Scotland—changes I am very proud of. That is because there was synergy and integration.
That comes to the question of prisons. We had significant problems with prisoners being released on a Friday. Very few prisoners are a bus ride from their home. By the time they got home, the GP was shut, so they were not able to get a prescription. They appeared in court the following Monday having committed another offence, and on the Monday evening they were back in the prison they had left. We have to break that. Of course, we give discretion to prison governors to release people early, but we need to bring together health, employment and education. Ultimate responsibility for keeping people secure until they are released has to be with the Prison Service, but all those agencies need to work together. That is why we need that synergy.
Equally, I understand that laws remain reserved to Westminster, but devolved jurisdictions can still make significant changes, and we did that too in Scotland, which is something I am proud of. We changed and brought in legislation against air weapons and we reduced the drink-driving limit. Air weapons were a significant problem in Scotland. People has been not only shooting animals but killing children. People wanted action. The UK did not wish to act, but the powers were given to us, and we now ensure that people have a licence for an air weapon. Not one political party would roll that back in Scotland. That would be for Wales and the rest of the UK to decide, but nobody in Scotland would support that.
Similarly, we are coming to the festive period, and we have reduced the drink-driving limit in Scotland. I was told that, on the border, it would be a disaster; people would not know which jurisdiction they were in. Well, I spoke to the chief constables, who simply said, “We’ll put up a big sign: ‘Welcome to Scotland. This is the side of the road you drive on, and this is the drink-driving limit.’” No political party in Scotland will go into any election with a manifesto arguing that we should increase the drink-driving limit. Indeed, I think the pressure has to be about giving us the powers.
Even though the laws may remain at Westminster, we can make significant changes. It might not be on those two issues, but there will be issues that matter in Wales on which a significant change can be made, albeit without changing the fundamental structure, with power retained here and the law, as such, across the UK.
Jim Shannon (Strangford) (DUP)
It is a pleasure to speak in this debate, Mr Vickers. I thank the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts) for leading today’s debate.
As a politician representing Northern Ireland, I clearly appreciate the importance of devolution and its contribution to this great United Kingdom, and that is why I am present in today’s debate, despite it relating to Wales. I want to speak about Northern Ireland and to tell Members what we have done and how it has worked for us. Devolution is all about locality and co-operation between our local Parliaments and Westminster, so it is great to be here to reinforce that importance and explain why the right hon. Lady’s contribution is significant and cannot be ignored.
When the Welsh Parliament was established in 1999, it was not intended to be a Government body, hence the lack of devolution relating to justice. Since then, we have seen the devolution of some matters to the Welsh Senedd, but justice remains solely under Westminster control. In Northern Ireland and Scotland, justice is very much devolved, and I will give some examples from Northern Ireland of how devolved justice can be and has been successful. It has been successful for us and, as the hon. Member for East Lothian (Kenny MacAskill) said, for Scotland, so I think it can be equally successful for Wales.
We have our own Department of Justice in Northern Ireland, with the ability to pass and amend laws, and we have our own Minister of Justice and a policing board, which integrates members of all communities in Northern Ireland. It is possible to do that, and we have done it and done it well. The Department covers all aspects of the justice system—most notably policing and community justice.
Community safety is critical for any country, and I believe that that heightens the calls to devolve justice to Wales, which is what the right hon. Member for Dwyfor Meirionnydd requested, and others backed her in that. While police officers answer to the Home Office in England, the division of powers perhaps makes it difficult to align the justice system in its totality with matters that Wales does have a say over, such as health and education.
Since 2009-10, the UK Government’s day-to-day spending on public services has decreased significantly in real terms, with UK Ministry of Justice spending falling by 40%, and the Home Office’s by around 25%, which puts further pressure on the Welsh Administration. For the safety of the people of Wales, which is absolutely key, it is important that they have more of a say in the funding of their own justice system, giving them the scope to allocate their own budget to their own justice system.
On justice matters such as drug abuse or mental health, there should be collaboration with the Welsh health system, but I imagine that that can become increasingly difficult. There are potentially large benefits to devolving justice to Wales, which the right hon. Member for Dwyfor Meirionnydd tried to illustrate. If we look at the success of the justice Departments of Northern Ireland and Scotland, we can see that a local, joint understanding of tackling crime is indeed the way forward.
To conclude—I am working within the timescale that you suggest, Mr Vickers—I understand the right hon. Lady’s frustrations about why justice has not been devolved yet—but it should be. Perhaps the Government will consider looking at that in the future. Perhaps today’s debate will start that discussion. As mentioned earlier, the devolution of justice certainly makes the running of the criminal and judicial systems in Northern Ireland much smoother. There is also a greater understanding of how the system works when the people running the system were brought up in that environment. We already have that in Northern Ireland and Scotland, and we also need it for Wales.
I look forward to keeping up with developments on this issue. It is great that we can all represent different regions within the United Kingdom of Great Britain and Northern Ireland, and at the same time understand the importance and success of devolution. We all want devolution—the Government are committed to it—so let us see it in action in the justice system for Wales.
Richard Thomson (Gordon) (SNP)
It is a pleasure to serve under your chairmanship, Mr Vickers. I congratulate the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts) not just on securing this important debate, but on finding a topic that manages to unite not just Plaid Cymru and the SNP, but also the SNP, the Alba party and the Democratic Unionist party—
Richard Thomson
And the Labour party, indeed. That is quite a set of Venn diagrams to pull together.
Before I get to my in-depth remarks, I will address the commonality of the remarks made by the right hon. Member for Vale of Glamorgan (Alun Cairns) and the hon. Member for Aberconwy (Robin Millar). We heard that the debate was on a rarefied topic—the preserve of politicians, academics and the political elite—and that it was all airy-fairy, fey and far removed from the doorsteps of the communities they represent. Obviously, I do not spend a huge amount of time canvassing in either of their constituencies, but I would venture to say that, just like my constituents, theirs are probably very concerned with justice matters and with outcomes.
If this debate is about anything, it is surely about how the best outcomes can be achieved and how the current set-ups, boundaries and the jagged edge, of which we have heard so much, militates against that. This morning, we have heard from a former Scottish Cabinet Secretary for Justice, the hon. Member for East Lothian (Kenny MacAskill), about the benefits that come not just from the separate and distinct nature of the Scottish justice system, but from how the powers of devolution have been used to adapt to particular demands in order to achieve those outcomes, whether those were improved road safety through reducing the drink-drive limit or tackling the menace of air weapons before they were licensed. I could even speak about how the problem of endemic knife crime in west-central Scotland was tackled by adopting a public health approach, which is now being followed in certain measures by the authorities in London. That would not have been possible were it not for the integration not just between the healthcare system and the social services ecosystem, but between the justice system and the policing system.
Robin Millar
I commend the hon. Member on his point. I had the privilege of speaking with John Carnochan at the time about that policy switch in Glasgow to treating knife crime as a public health matter. That speaks exactly to the point I made in my contribution. Does he not think that attention should be focused on the underlying causes, which is where people’s interest lies, rather than on constitutional jiggery-pokery?
Richard Thomson
Of course the underlying problems ought to be tackled, but I suggest the point at issue is how to tackle them and how best to bring to bear the various agencies of the state and the third sector to change that behaviour, rather than sticking a flag on top and saying that this is not something that people in devolved institutions should worry their pretty little heads about.
The devolution of justice has been supported by the Welsh Labour Government through the co-operation agreement signed with colleagues in Plaid Cymru. It follows the central recommendation of the 2019 Commission on Justice in Wales.
My point here is quite a simple one: even in a devolved settlement, there are some powers that naturally sit together. We would not dream of trying to set policies for economic development without looking at education, training and investment in people. We could all hopefully see through the pandemic, even if it was not glaringly apparent before, that the NHS and social care sectors must be considered side by side to ensure we live fulfilled lives and that people are always treated in the most appropriate care settings for their needs. Therefore, I find it somewhat baffling—albeit from the context of being a Scottish politician, as there has always been a distinct and separate Scottish legal system—that we would not consider there to be a disconnect in governance when powers over social aspects are held in devolved Wales and the justice elements are controlled at the other end of the M4.
To take up that point about the disconnect in governance, a sideswipe was taken at proposals to increase the number of Members of the Senedd. I think that needs to be seen in the context of the current boundary commission proposals and the obligation placed on the Boundary Commission for Wales to reduce the number of Welsh seats at Westminster from 40 to 32. At a time when Westminster interest in Welsh affairs is going to diminish significantly, surely it is right to bolster the ability to scrutinise the justice system in the round in Wales.
That lack of control over, and scrutiny of, policing and the justice system from Wales is precisely the issue. Not only is having an executive and legislature without a judiciary anomalous when compared with other countries; as we have heard, it has led to that jagged edge of intersecting competencies and responsibilities between the reserved justice system and key devolved services and institutions. That results in serious disadvantages, including a lack of coherent and accountable policymaking across the jurisdictions, an inability to allocate spending in a co-ordinated manner, and needless complexity that leads to a waste of resources and a lack of understanding of how the system operates.
We can see those disadvantages in the outcomes that I mentioned earlier. It is fair to say that in Wales, those outcomes are particularly suboptimal. Wales has one of the highest rates of imprisonment in western Europe. That fuels a cycle of poverty, as well as mental and physical health problems. Nearly half of Welsh children who are placed in custody are detained in England, far from their homes and family support. There is a chronic lack of community provision for women, which also severs family connections.
It is over three years since the Commission on Justice in Wales published its report. Surely it is past time to take forward its central conclusion that justice should be devolved to Wales. Policies and political sentiment matter. The voice of the electorate matters here. With an increasingly populist and draconian UK Government making decisions on justice matters in Wales, attempts to build a more rehabilitative system—if that is what people want, and quite clearly that is what they are voting for at the ballot box—are always likely to be thwarted.
In conclusion, there is little doubt that, as it stands, the justice system as a whole in Wales—for all the best intent of the committed professionals who are working day in, day out to get the best outcomes that they can—is simply not achieving the outcomes that it should and could. This debate should not be about sticking a great big flag on top and saying, “This is not about the priorities of my constituents,” because constituents will be concerned with the outcomes. They will be less concerned with the structures, but they will certainly be concerned that the structures work and are in their best interests, not just for them but for their communities. This should very much be about what works. We can see what works in legislative and governance terms both in Northern Ireland and in Scotland. Surely it is time for us to consider how best Wales could follow in that direction.
Anna McMorrin (Cardiff North) (Lab)
Thank you, Mr Vickers, for the chance to respond to this debate. I pay tribute to all who have contributed. It is not lost on me that the debate is happening today of all days, as we face England in the football. Yma o hyd. Pob lwc, Cymru. I am sure we are all behind the Wales football team this evening.
A fair and effective system is fundamental to any country, and 12 long years of this Tory Government have completely broken the justice system across England and Wales. When the Commission on Justice in Wales undertook that unprecedented examination of justice, its conclusion was unequivocal:
“the people of Wales are being let down”
by the justice system. Crime is high, charges are low, criminals are getting off and victims are being let down. With record court closures, a decade or more of cuts and crippling court backlogs, the UK Government’s inability to adapt to current pressures and to lead through a victim’s focus is letting every one of us down.
A survey by the Victims’ Commissioner for England and Wales revealed that less than half of victims would report to the police again due to their traumatic experiences. The former Victims’ Commissioner, Dame Vera Baird, said in her resignation letter that the
“downgrading of victims’ interests in the government’s priorities”
is appalling, and she criticised the UK Government.
That is not just our view; it is the view of victims too. My constituent Sarah, who reported being sexually abused by her doctor, had her truth misbelieved and mistrusted in court. She was stripped of her dignity in the witness box, and was subjected to vicious public humiliation and personal attacks in the so-called pursuit of justice. She told me:
“I felt like I was being publicly beaten and humiliated. I wouldn’t advise anyone to go through it”.
In Wales, many of the services are the responsibility of the Welsh Labour Government, yet the overarching justice system is at the mercy of this Tory Government. We must recognise the scale of the challenge we face. It is clear that the UK Government’s current approach is not working. They must work with the Welsh Labour Government to see how things can be managed in the future, and above all ensure that victims come first. We must focus not on where but on how justice is delivered.
The probation system in Wales was brought to its knees by a failed privatisation, based on the untested and untried payment by results system. The Tories were repeatedly warned that it would not work, but they persisted anyway. The Welsh Labour Government have done their best to mitigate the worst of the impact across the justice system, but the only solution is to have a UK Labour Government in Westminster working with a Welsh Labour Government in Wales.
Alun Cairns
The hon. Lady is making important points that obviously would need to be debated if there were time, but do the Labour Opposition in Westminster support the Welsh Government’s call for the devolution of justice? At the time of the development of the Wales Act 2017, they were opposed to it.
Anna McMorrin
The right hon. Gentleman is getting ahead of himself, although I absolutely hope that there will be a UK Labour Government shortly. We in UK Labour are working closely in partnership, as we would in government, to ensure that the best justice system is focused not on where justice is delivered, but on how it is delivered. That is done in partnership, and the details must be worked out.
Anna McMorrin
That is absolutely not being delivered by this UK Government, who have systematically broken the criminal justice system. It is appalling. Day in, day out, I speak to victims who are suffering and traumatised, and who have been retraumatised by the justice system that this UK Tory Government are presiding over. Only one in 100 rapes recorded by the Welsh police resulted in a charge last year, let alone a conviction.
Anna McMorrin
The right hon. Gentleman should listen, rather than chuntering away on the sidelines.
One victim, Rachel, told me:
“They didn’t treat me as a human being”,
as she relived her traumatic experiences in the justice system. She felt that the system was worse than the rape itself.
On International Day for the Elimination of Violence against Women, the crime survey for England and Wales released its latest figures, showing that 1.7 women experienced domestic abuse in the past year alone, but everyone knows that the true number is much, much higher. According to figures reported by the BBC, about 60% of women in custody across the UK have experienced domestic abuse.
In May, the then Justice Minister, the hon. Member for Louth and Horncastle (Victoria Atkins)—I have lost count of how many Justice Ministers we have had since—finally announced the pilot for the women’s residential centre in Swansea. That came four years after the Government originally announced it in their female offender strategy, even though they labelled it a priority, and the centre will not actually open until 2024. Across Wales, there are a total of zero female estates, and recent Cardiff University research shows that last year 218 Welsh women were sent to prisons in England.
This Conservative Government’s priorities have never been on the side of victims, and they continue to treat vulnerable women as an afterthought. Labour has long argued for facilities for vulnerable women with complex needs who would otherwise be sentenced to custody. They need a safe and secure facility that is fit for purpose, and that allows them to maintain contact with their families, especially their children. Shockingly, as the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts) pointed out, Wales has more people in prison than almost anywhere in western Europe. All the evidence shows that a sentencing policy that is based heavily on punishment, deterrence and imprisonment is counterproductive.
Anna McMorrin
I do not think there is time, sorry. Despite the Tories’ mishandling of justice, the Welsh Labour Government continue to pursue existing programmes of partnership working—for example the women’s justice and youth justice blueprints—to ensure that delivery is as good as it can be. Those arrangements require proper collaboration to achieve outcomes for the people of Wales.
Next spring, it will be eight years—and nine Secretaries of State—since the Conservatives promised to bring forward a victims’ Bill to strengthen rights and protections and deliver urgent change. As usual, this UK Government have been on the side of dither and delay, yet the issue could not be more urgent. Every day, more and more victims are failed by this Tory Government. Words are not good enough. They fall woefully short of the step change needed to ensure that there are better outcomes for victims of crime, which is what the people of Wales deserve.
A UK Labour Government, working in Westminster with a Welsh Labour Government in Wales, will repair the damage that the Conservatives have wreaked across our criminal justice system and beyond. We owe it to the people of Wales to do so much better.
Martin Vickers (in the Chair)
I call the Minister, Mike Freer, and remind him to give the mover of the motion two minutes to wind up.
The Parliamentary Under-Secretary of State for Justice (Mike Freer)
It has been a pleasure to serve under your chairmanship today, Mr Vickers; I think this is your first outing in the Chair. I congratulate the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts) on securing the debate, and am grateful for her significant contribution on justice in Wales over the past several years. I thank all hon. and right hon. Members for their contributions.
The right hon. Member for Dwyfor Meirionnydd secured a previous Westminster Hall debate, which took place on 22 January 2020, on the report by the Commission on Justice in Wales, otherwise known as the Thomas commission, which was published in October 2019. It is inevitable that we have touched on many of the same issues today. In the intervening period, work on considering and, where appropriate, implementing the Thomas commission recommendations was delayed by the coronavirus pandemic, but the right hon. Member has ensured that it remains a live issue for this House.
It will not come as a surprise that the Government’s position on the devolution settlement has not changed. We disagree with Lord Thomas and with the Welsh Government, and do not think that justice should be devolved. Indeed, the many challenges brought by the coronavirus pandemic demonstrated in a number of areas that the settlement is working well.
Alun Cairns
The Minister has provided a clear response, and we understand that the Government’s view is that we should not devolve justice. Does he understand Labour’s point of view on the issue? It seems to me that two different messages are coming from Cardiff Bay and from the Opposition in Westminster.
Mike Freer
My right hon. Friend asked a very pertinent question and did not get a clear answer from the hon. Member for Cardiff North (Anna McMorrin). My understanding is that the official Opposition do not support the devolution of justice—that is what I took from her speech.
Let me go back to what happened during the coronavirus pandemic. The pandemic served to demonstrate that in a number of areas the settlement is working well. In fact, the justice system performed better in Wales than it did in England in several respects, and I will say more on that later. Among the key arguments made by those who support devolving justice to Wales is what they see as the principle that a holistic approach is required to ensure that policy objectives can be delivered effectively. Of course, we agree that policies on substance misuse, education, mental health and social welfare need to be aligned with measures to reduce reoffending and protect the public, which is the responsibility of Westminster, but the notion that justice must be devolved to achieve that is misplaced. The Ministry of Justice works closely with the Welsh Government to ensure that justice policies are aligned and that we take account of distinct Welsh needs.
Ben Lake
On the specific point about the alignment between the UK Government, the Ministry of Justice and the Welsh Government, does the Minister accept that it is frustrating, as a Member representing a rural constituency, to have witnessed so many court closures in the past decade? The court closures were made without any clear consideration of the fact that there are no direct transport links, so people have quite literally lost access to justice. Does he understand my constituents’ frustration that, contrary to what some Members have said today, the system is not working in lockstep, is not co-ordinated and is not in alignment to ensure the right access to justice?
Mike Freer
The hon. Gentleman makes a good point. For every community that is affected by a court closure, the judiciary and the MOJ have to take into account access to justice. My understanding is that the senior judiciary take that very seriously, but I understand the frustration that he vocalises.
The joint MOJ and Welsh Government blueprints on youth justice and female offenders are successful examples of the co-development of strategies across the devolution boundary. The women’s justice blueprint seeks to transform services for women in Wales, to help keep women and their communities safe and free from crime. A key aim is to reduce the number of women coming into the criminal justice system, while doing a better job of meeting the needs of those already in the system. Services are in place to support women in Wales at all stages of the criminal justice system, avoiding fragmented delivery and enabling greater consistency in the support that women receive. More than 2,075 women across Wales were referred to diversion support in the two and a half years from January 2020 to September 2022, and 2,700 women were referred to the women’s pathfinder whole system approach, which services south Wales and Gwent, over the same period. The service remained operational throughout the covid pandemic, providing support to women with complex needs at a time of increased vulnerability.
Improving family ties is an important part of the blue- print. Through joint HMPPS Wales and Welsh Government funding, a Visiting Mum service is being re-established in HMP Eastwood Park and HMP Styal to help ensure that Welsh mothers are able to maintain positive relationships with their children throughout their prison sentence. Collaboration between the Ministry of Justice and the Welsh Government has led to the procurement of a site for a new residential women’s centre in Swansea. That is a particularly important development for Wales, given that there is no women’s prison in Wales—a position that the Welsh Government support. The new centre will offer vulnerable women an opportunity to stabilise their lives, with a range of support and interventions designed to tackle the causes of their offending.
We worked closely with partners, including the Welsh Government, police and crime commissioners and local authorities, to identify a suitable location for the RWC. We are grateful for the support that we have received from Julie James, the Member of the Senedd for Swansea West, and others at a local level, but it is disappointing that after so much collaborative work, the application for planning permission was turned down last month, and we will now have to consider the next steps with our Welsh colleagues. However, there are other examples of where the justice devolution settlement is delivering for Wales.
I mentioned earlier that Welsh justice services performed well during the pandemic, often exceeding the performance seen outside Wales. A good example of that is the performance of the Welsh courts, where the MOJ, His Majesty’s Courts and Tribunals Service and HMPPS worked together to keep the courts operating as effectively as possible. As a result, the magistrates courts in Wales were the first to recover to pre-pandemic levels in England and Wales.
During the passage of the Wales Act 2017, it was argued that it was necessary to devolve justice for Wales to operate properly as a legislature in its own right. In fact, we noted in the debate here in January 2020 that the 2017 Act ensures that the Senedd can make law on devolved matters, including the setting of criminal offences and other measures that enable the proper enforcement of its legislation. We have seen examples of where the Senedd has set its own legislative direction and introduced measures to enforce its policies. I again refer to the action taken by the Welsh Government during the pandemic.
Devolving justice would not simplify the system in a divergent landscape. It would simply shift the so-called jagged edge, to use Lord Thomas’s term, so that the devolved justice system has to manage challenges posed by reserved matters, which I would argue would be more complex than the current position.
There are also strong economic arguments in favour of maintaining the current justice settlement for Wales. A fully devolved justice system, akin to the Scottish and Northern Ireland models, would require Wales to be self- sufficient, including with regard to offender management and a prison estate that met the needs of the full range of prisoners. There are no category A prisons or, as I have already noted, women’s prisons in Wales. Wales benefits from the economies of scale that flow from being part of a larger offender management system, including the allocation of prisoners based on need and the risk they pose.
Even under other models, such as making use of the current prison estate but putting in place agreements between the Welsh and Westminster Governments on criminal justice and offender management, there would still be a need for the Welsh Government to have a justice function to manage policy across the board. They would have to develop and implement policy on criminal, civil, family and administrative law, and on matters such as legal aid. They would have to recruit staff sufficiently experienced and knowledgeable in those matters. The result of all that activity would be a significant interface between a devolved justice system and a larger body of reserved law; a much more complicated jagged edge. We are talking about a huge expense for the Welsh Government and, ultimately, the taxpayer.
I am conscious of time, but I will address one particular point raised by the right hon. Member for Dwyfor Meirionnydd. That is the call for greater transparency of data. That is not an unreasonable request, and I am pursuing it vigorously as a new Minister to the Department. I am happy to give the commitment to work with her and others to ensure that the data is more accessible and transparent in the interests of justice.
Robin Millar
Will the Minister undertake to ensure that that is a reciprocal agreement, and that data is made available from the Welsh Government to facilitate that free exchange of data between the two Governments?
Mike Freer
My hon. Friend makes a good point. Only half a picture is no picture at all. There must be transparency both ways.
The UK Government remain firmly opposed to devolution of justice to Wales. We believe that the current devolution settlement is working well and should be retained.
Liz Saville Roberts
I am grateful that the Minister has committed to work with me and others on the disaggregation of data, because I firmly believe that we should all operate on an evidence base, and we need to see trends over time.
When trying to foresee objections to the debate, I did not foresee the one that it would be solely about politicians. The idea that somehow as politicians we are not trying to improve the lives and conditions of our constituents frankly leaves me in despair. At the moment, that is evident. With the exception of the disaggregation of data, the need for that recognises that many of us are possibly working based on opinions rather than facts. We should all, therefore, be working with the facts.
It is striking that only one Welsh Labour MP of 22 is present and actually spoke. The standpoint between what is said by Welsh Labour and by UK Labour is striking in its inconsistency. It is important to note the consistency and experience in the voices from Northern Ireland and Scotland, in that knife crime is a health issue, the familiarity of community needs is important and, frankly, the argument that the border is an insurmountable problem can be blown out of the water. People do understand the difference.
Question put and agreed to.
Resolved,
That this House has considered the potential merits of the devolution of justice to Wales.
Ministerial Code
(2 years ago)
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Chris Bryant (Rhondda) (Lab)
I beg to move,
That this House has considered the Ministerial Code.
It is a delight to see you in your place, Mr Vickers. I am speaking in my own capacity, and not as Chair of the Standards Committee. The ministerial code is bust; it does not work. Civil servants find it confusing, Ministers do not care about it and Prime Ministers find it irritating. Central to it is the adviser on the ministerial code, but it is now 167 days since Lord Geidt resigned, and I gather the new Prime Minister has offered the post to three people, all of whom have said, “Not on your nelly”. At least two investigations are already pending, but they cannot be investigated because there is no adviser. There cannot be a publication of the ministerial list of interests because there is no adviser. Frankly, the system is broken.
Most importantly, the code does not do what it says. It says that Ministers are expected to observe the seven principles of public life—the Nolan principles. Let us just go through a couple of them. First, transparency. One would think that transparency requires that the public know all interests held by Ministers: what business interests they have, if any; who had invited them to expensive social occasions, such as movie premieres; what clubs give them free membership; who had paid for trips abroad; what charities they were trustees of; and what meetings they had with lobbyists, trade associations or press barons—anything that might affect their decisions as Ministers. One might also expect the interests of Ministers’ spouses and family members to be publicly available, and that all that information would be available within a week or so of any Minister taking up office or acquiring a new financial or personal interest.
That could not be further from the truth. The most recent register of Minister’s interests was published on 31 May this year. It is not an accurate list of Ministers now. It is not even an accurate list of ex-Ministers, or of Ministers who have been Ministers in the intervening period. In case we think that this year they should be forgiven for being in a bit of a mess, because of the terpsichorean dance that has been played in Downing Street—let us face it, many of us do not know who is the Minister for what at the moment, including some Ministers, who do not quite know their areas of responsibility—the list itself is very out of date.
At the best of times, the list is published only once every six months. By contrast, the Commons Register of Members’ Financial Interests is updated every fortnight when the House is sitting. The situation is often even worse with the ministerial register. The new Government appointed in December 2019 did not produce a list of its Ministers’ interests until July 2020. There was then a 10-month gap before a new list was produced, during which lots of new Ministers had arrived in post.
As for the supposedly annual report by the adviser on ministerial interests, there was no annual report in 2020 because there was no adviser. Ministers are meant to advise their Department of any relevant interests whenever they take up a new ministerial post. However, because that is published at best only twice a year, the public is nearly always in the dark about what financial interests a Minister might or might not have.
Bizarrely, because the report appears so infrequently, some financial interests are reckoned to be more than six-months old by the time they are reported, and are therefore never published at all. That is not transparency. As things stand, we have no idea what ministerial interests the Chancellor of the Exchequer, the Transport Secretary, the Secretary of State for the Department for Work and Pensions or the Minister for Security might have, because they simply have not been published.
The system leads to glaring anomalies—the following instances prove my point. None of the Members concerned have done anything wrong. To my knowledge, they have fully declared everything they are required to declare, but the way the Government operate ministerial registrations means that discrepancies abound. I have told all Members to whom I am about to refer exactly what I am going to say.
For instance, the latest version of the register, dated 31 May, states that the right hon. Member for Hertsmere (Oliver Dowden), who is Chancellor of the Duchy of Lancaster, has as his only interest his role as patron of Watford Peace Hospice, yet according to Companies House he is the director of C&UCO Services Ltd, C&UCO Management Ltd and C&UCO Properties Ltd of 4 Matthew Parker Street, London. I do not know whether that is still true—I presume those are the Conservative and Unionist party’s official management companies—but there is a discrepancy. I am told that he declared that to his Department, but it was decided that it was not a relevant interest. I do not understand why.
Likewise, the entry for the right hon. and learned Member for Northampton North (Michael Ellis) states:
“Trustee of discretionary family trusts”
without specifying what the trusts are, unlike the entry for Lord Benyon, which specifies all the trusteeships he holds. The entry for the right hon. and learned Member for Northampton North does not include the following shareholdings, which are in the Commons register, however: Arnold Estates Ltd, Arnold Estates LLC and MSA Properties Ltd. I do not understand why those are not in both registers.
Similarly, the hon. Member for Arundel and South Downs (Andrew Griffith), who is Economic Secretary to the Treasury, has registered in the Commons that he has been a member of Wilton Park Advisory Council from 1 July 2020—that is, he assures me, an unremunerated ex officio role that he quite properly disclosed to the permanent secretary to the Treasury—yet that does not appear in his list of ministerial interests, presumably because the Department or the adviser—
Martin Vickers (in the Chair)
Order. May I clarify whether the Member has advised any relevant Members that he will refer to them?
Chris Bryant
I have sent Members copies of precisely what I am going say.
However, that role does not appear in the list of ministerial interests for the hon. Member for Arundel and South Downs, presumably because either the Department or the adviser, for some reason best known to themselves, thought it irrelevant.
The ministerial entry for the right hon. Member for Croydon South (Chris Philp), the Minister for Crime, Policing and Fire, says that he is
“a director of Millgap Ltd, an investment holding company personally owned by him.”
The Commons register, however, lists the following:
“Shareholdings: over 15%... Pluto Capital Management LLP… Millgap Ltd… Pluto Partners LLP… Pluto Silverstone Co Invest LLP… Pluto Monza Co Invest LLP… Pluto Development Partners LLP”,
although it does not include his directorship of Millgap Ltd.
I do not think that any Member I have mentioned has sought to hide anything. Indeed, I think in each case the Member has made a full declaration to their Department, but the Department, or the adviser, has published only what it thinks fit. Different Departments clearly treat matters such as trusteeships differently, and the rules differ as between the ministerial code and the House of Commons code of conduct, which leads to ludicrous anomalies and undermines transparency.
Moreover, the Government continue to insist that Ministers acting in their ministerial capacity should be exempted from the requirement placed on all other MPs to register within 28 days hospitality they receive that is worth more than £300. The Government say that ministerial transparency returns cover that, but those returns carry far fewer details than the Commons register, and they are published at least three months late, and sometimes up to a year late. Unlike the Commons, which produces a single document, each Department does that separately, so anyone who wants to see the full picture of ministerial interests across a year has to look at more than 300 online forms every year.
This is about as transparent as a hippopotamus’s bathwater. It would make far more sense for all financial and other interests of a Member, whether a Minister or not, to be available in one place, published as close as possible to real time, and certainly no less than every month.
Wendy Chamberlain (North East Fife) (LD)
The hon. Gentleman is making a powerful point. Does he agree that it is simply wrong that there is a difference between what we register as MPs and what Ministers register, particularly given that the point of registration is to ensure transparency over how decisions are made? That is even more important for Ministers, arguably, than it is for MPs.
Chris Bryant
It seems to me utterly bizarre that we have a lower level of transparency for Ministers, who make decisions in their personal capacity, than we do for ordinary Back-Bench Members of Parliament. The best decisions we get to make are about our own diaries, and sometimes not even that.
It seems we have entered into a preposterous set of arrangements. The Standards Committee has made proposals for a new code of conduct that would no longer exempt Ministers from the requirement placed on all other hon. Members. I very much hope that the Minister, when he gets up later, will say that when we have the debate on the new code of conduct on 12 December, as I understand it, the Government will support the measures advocated by the Committee.
Let us try another Nolan principle: accountability. It might be thought that a code of conduct should be enforceable and if someone breaks the rules, they should face disciplinary action. Yet the Government constantly assert that ministerial appointments and discipline are solely a matter for the Prime Minister. I understand the argument—sort of—but only to a degree. If a Minister makes a minor error of judgment, it should ultimately be up to the Prime Minister to decide whether they should stay in post. However, we do not have a separation of powers in the United Kingdom, despite what several Ministers continue to assert. I am sure the Minister who is about to speak, and who is a better historian than some others, will agree that the amendment that would have removed Ministers from Parliament and inserted a separation of powers in the UK was lost in 1713 by the Whigs.
By common law, all Ministers are Members of one or other House of Parliament. That is just a fact. It therefore undermines the whole of Parliament when a Minister is seen to get away with behaviour in their Department as a Minister that, if committed on the parliamentary estate and within the parliamentary community, would see them suspended from the House and possibly expelled. How can it be right that we have a stricter and more independent system for disciplining sexual harassment and bullying in Parliament than in Government? How can we change the culture across Parliament or in any Government organisation if Ministers are exempted?
I understand that people draw the line differently when it comes to bullying. I have a very low threshold and see behaviour as intimidatory when others might think it is acceptable. Others think they are just being forceful, exacting or demanding. I would draw a distinction between assertive, which is okay, and aggressive, which is not. I would say that an MP should always remember the imbalance of power when assessing their personal behaviour. Veering between exorbitant praise and sharp public criticism can completely undermine staff, and I would worry if a single member of my staff were ever reduced to tears by my behaviour.
More importantly, all MPs are in this together. We need to change the culture of the whole of British political and parliamentary life, and we will never succeed in doing that if we have a separate rule for Ministers. Some, including the Public Administration and Constitutional Affairs Committee, have argued that the independent adviser should be put on a statutory basis, that he or she should be allowed to initiate and conclude investigations into alleged breaches of the ministerial code without the say-so of the Prime Minister, and that he or she should be allowed to recommend or impose suitable sanctions. I have argued that myself, but I no longer think that is enough—for four reasons.
First, the spider’s web of our standards system is now far too complex. In addition to the law of the land, MPs are subject to 12 different sets of rules. It is difficult for us to understand all the rules that apply to us and even the system that applies to us, let alone for the public to do so. That undermines parliamentary democracy.
Secondly, since the last general election 177 Conservative MPs have been Ministers. Some have not lasted long, of course. The Minister himself has been in and out of Government. He had 292 days at the Department for Education, then 76 days out of office and 37 days at the Department for Work and Pensions before starting his present job. MPs’ financial and other interests, including his, have remained the same throughout that period, but he has been governed by different systems at each of those moments. It is manifestly bonkers that MPs have to switch in and out of different regimes, and that the public do not get to know about it, in many cases until many months afterwards.
Thirdly, the Owen Paterson debacle showed that Ministers and their offices do not understand the Commons rules. Rory Stewart, formerly of this parish, argued that his meetings with Mr Paterson were fine because his private office would have advised him if they were a problem, but that office did not spot that Paterson was clearly engaged in paid lobbying and peddling influence on behalf of his paying clients, because, frankly, interpreting the Commons code of conduct is not its job.
Fourthly, it is simply no longer good enough for Prime Ministers to say, “As long as I enjoy a majority in the Commons, I and I alone get to choose who is a Minister.” That is the winner-takes-all approach to politics. We have very few checks and balances in the British system as it is, but when Ministers’ behaviour brings Parliament into disrepute, it is a matter for Parliament, not just the Executive.
It is time to amalgamate or at least align the ministerial code with the code of conduct of the House of Commons. The ministerial exemption for registering interests in the House within 28 days should come to an end, as should the ministerial exemption from the rules on bullying and sexual harassment in their Department. Either the House should appoint the independent adviser on the ministerial code directly, which I know some have advocated, or the Parliamentary Commissioner for Standards should be given that responsibility.
The Parliamentary Secretary, Cabinet Office (Alex Burghart)
It is a pleasure to serve under your chairmanship, Mr Vickers, and to respond to the hon. Member for Rhondda (Chris Bryant) in whatever capacity and with whichever hat he is wearing today. He, like me, has a second job—mine is currently as a Minister in the Cabinet Office. It was very good of him to enunciate how many days I was in my previous post; now I have a record in Hansard that I can refer back to when I want to check it.
Although my response today will be relatively brief, I want the hon. Gentleman to know that, as a new Minister, I am genuinely interested in the points he has raised and I will certainly consider them with colleagues. He has previously raised these important points in the House on a number of occasions, including 7 September, I think—it is my birthday; I remember it well—and again on 18 October. He is right to say that in the coming weeks we will have an opportunity to debate these matters again.
The hon. Gentleman raises substantial issues concerning transparency, timeliness and the independent adviser. As the Leader of the House said a few weeks ago of the recommendations proposed by the Committee on Standards, which the hon. Gentleman chairs, we are
“very conscious that there is further progress to be made and the House should have the opportunity to consider the additional recommendations”.
We are looking to identify solutions that command cross-party support on outstanding issues, including to improve the transparency and timeliness of ministerial declarations. The Government are very clear in our views that, as the Leader of the House said,
“the rules regulating Members’ interests and ministerial interests”—[Official Report, 18 October 2022; Vol. 720, c. 636.]
are distinct. However, the hon. Gentleman has raised important points about consistency that bear further cogitation.
I can confirm that we are talking to officials about proposals we are considering to bring forward and improve the system, and that revised guidance on ministerial transparency data will be published in the coming weeks, first on gov.uk. The guidance will be updated to more closely reflect modern working practices and Ministers’ obligations under the ministerial code. As the Leader of the House has said, we are mindful of the BAFTA challenge that has been set by the hon. Gentleman. As I said, there are important points on consistency.
Chris Bryant
The Minister entices me on the BAFTA point—and it is not just the BAFTA point, but the Bond point. If I were invited to a Bond premiere, with tickets worth something like £2,000 or £2,500, I would have to declare that within 28 days, detailing the cost and who had paid for it. All that would then be published within two weeks. However, several Home Secretaries and Foreign Secretaries ago, when the then Home Secretary, the right hon. Member for Witham (Priti Patel), and the then Foreign Secretary, the right hon. Member for South West Norfolk (Elizabeth Truss), went, they decided that they had gone in their ministerial capacities. A colleague of the Minister said that they had gone in a ministerial capacity because the Home Secretary has responsibility for MI6, which is incorrect.
Can the Minister see that the whole concept of going to a Bond premiere in a ministerial capacity brings the whole system into disrepute? Would it not be simpler for everything to be in a single place, so that members of the public could openly and transparently see the full range of a Minister’s interests?
Alex Burghart
The hon. Gentleman has made his point very clearly once again.
On timeliness, in autumn this year the Government reaffirmed their commitment to transparency, and said they would publish transparency data within 90 days of the end of each quarter. The Cabinet Office has strengthened advice to Departments on open access data, which will ensure that ministerial transparency is easily accessible to all. I appreciate what the hon. Member for Rhondda says about the importance of members of the public being able to see what is happening as promptly as possible. I can see that he is anxious to intervene again.
Chris Bryant
It is just that 90 days is not prompt; it is 28 days in this House. After 90 days, people have forgotten what they went to. I do not understand why it could not be within a fortnight, especially given the fact that Ministers might move on or make different decisions in the intervening time.
Alex Burghart
I can assure the hon. Gentleman that Ministers will not have forgotten what they went to. As he is aware, there is a very clear process, which involves permanent secretaries and good internal recording systems. He is right that the last account was published in May. It is ordinarily published every six months, so although we have been without an independent adviser, we would only be coming up for the next publication now. Because the new independent adviser is yet to be appointed, that will probably be delayed, but the Government expect it to be a very high priority for the new adviser, when he or she is appointed.
Chris Bryant
The obvious questions are, when will the adviser be appointed, and can the Minister confirm that at least three people have already been offered the post and turned it down?
Alex Burghart
The hon. Gentleman appears to have information, if it indeed is true, that is not available to me. I have not been made aware that anyone has turned the job down. I reiterate that the Prime Minister has said that the appointment of an independent adviser is a priority for him. He is pursuing it with urgency, and we very much hope and expect that an independent adviser will be in place soon. That will kick-start a number of processes that have fallen into abeyance.
Chris Bryant
I am sorry to impose on the Minister in this way, but I just offer a piece of—I hope—helpful advice. My guess is that people might be refusing the job because they are worried that their position, credibility and reputation will be at risk unless the Prime Minister agrees that a new adviser can initiate investigations, including into the Prime Minister if necessary, without the say-so of the Prime Minister, and can recommend sanctions. Unless the Government make that change, I cannot see how anybody worth having in the role will accept it.
Alex Burghart
Obviously, in May the Government said that the independent adviser would have the power to initiate investigations. The then independent adviser Lord Geidt said that that was a workable solution. As I say, there will be a new independent adviser soon. That is the desire of the Prime Minister. He is keen to ensure that our process is fit for purpose, and he is keen, as the hon. Member for Rhondda is, to ensure that we have transparency, accountability and timeliness. I am very confident that this Administration, under this Prime Minister, with a new independent adviser, can deliver that.
Question put and agreed to.
Covid-19: Economic Impact of Lockdowns
(2 years ago)
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Esther McVey (Tatton) (Con)
I beg to move,
That this House has considered the economic impact of covid-19 lockdowns.
It is a pleasure to serve under your chairmanship, Mrs Murray, and to be able to debate the economic impact of covid-19 lockdowns, because so often during the pandemic we did not have the opportunity to question key decisions that were taken. In those early days of covid, much was done in a rush. Although it was understandable then, with the passing of time analysis needs to be done of the measures and decisions taken. No matter how painful and difficult the conversations will be, we need to have them. Open and frank conversations are made more difficult by the fact that the vast majority of MPs voted for continued lockdowns and most of the media was reluctant to question them.
Although everyone supported the first lockdown—March to June 2020—no one knew what we were confronting. As knowledge of covid and medical treatments grew, so should the debate have grown, particularly about subsequent lockdowns, but that was not the case. Prior to March 2020, how many of us had heard of the concept of lockdown? Blanket, stay-at-home policies were an unknown and unevidenced method of trying to control the virus.
Although lockdowns will have saved lives from the virus, many experts predicted from the start that they would also cost lives, through the unintended collateral damage they inflict. A Government report in July 2020 found that more than 200,000 lives could be lost due to lockdown. Well-rehearsed pandemic protocols, including those endorsed by the World Health Organisation and the Department of Health and Social Care had not previously recommended lockdowns because, quite simply, they are a blunt instrument.
In addition, it was felt that such drastic restrictions would not be tolerated by western democracies. As Professor Neil Ferguson infamously put it, after observing entire communities in China in lockdown,
“We couldn’t get away with it in Europe, we thought. And then Italy did it. And we realised we could.”
That poses a question. If people assumed that the UK population would not tolerate lockdowns, was messaging hardened and questions against lockdown not tolerated, in order to force compliance? We might never know the answer. Ongoing lockdowns were achieved, but at what price? Interestingly, only the other week, Andrew Gilligan, a former No. 10 adviser said on GB News that, looking back, the ongoing lockdowns were wrong, but politically we could not have got away with not doing them.
Why was that? How was an environment created in which even asking questions and providing alternative suggestions could get someone demonised? And those people were. I wrote an article for The Daily Telegraph in November 2020 saying, regretfully, that politicians had been guilty of a dereliction of duty. Instead of just listening to the one-dimensional approach of Public Health England and the scientists, they should have factored in all competing consequences. They did not and ploughed on, without questioning those other factors.
Chris Green (Bolton West) (Con)
Does my right hon. Friend share my concern that, during the pandemic and lockdowns, Parliament was not given the opportunity during certain phases to debate the impact lockdown was having on our constituents, and that we should never lockdown Parliament again?
Esther McVey
My hon. Friend and near neighbour raises an important point. This House is about debate and questioning things, and I am afraid that that did not happen. As he rightly says, we should ensure that Parliament never closes down again, as it did under the pandemic. Even back then, the figures from the Office for National Statistics pointed out that lockdowns and anti-covid measures would lead to the deaths of 200,000 in the medium to long term, due to missed treatments, under-diagnosis, loss of jobs and tax revenue, with disadvantaged people suffering the most. Bristol University in 2020 put that figure much higher, at 560,000 deaths.
Debates are now occurring on the unintended consequences of lockdown, from the mental health issues suffered by our children, to increased deaths of dementia patients, and the lack of visiting rights in care centres and hospitals still happening, even now. A big thank you has to go to the academics and scientists who initially raised concerns in those areas, including Professor Townsend, Professor Carl Heneghan and Professor Robert Dingwall, who asked those all-important questions.
Today, however, our focus is on the economic consequences of lockdown: rising financial hardship; increased poverty levels in the UK; the hundreds of thousands of people since lockdown now classed as economically inactive; the impact on them, their families and local communities; and the economic impact on the next generation’s wealth and earning capacity. It is estimated that school closures and lockdowns will lead to £40,000 being lost from lifetime earnings for each individual. A report by UNESCO, UNICEF and the World Bank finds that students now risk
“losing $17 trillion in lifetime earnings, or the equivalent of 14 percent of today’s global GDP, as a result of COVID-19 pandemic-related school closures”
and economic shocks.
Let us look back at some of the economic shocks of lockdown. The House of Commons Library notes explain that
“The magnitude of the recession caused by the pandemic is unprecedented in modern times.”
GDP declined by 11% in 2020, the steepest drop since consistent records began in 1948 and, based on less precise estimates of GDP going back further, the contraction in 2020 was the largest since 1709. During the first lockdown, UK GDP was 26% lower in April than only two months earlier in February. More than 8 million workers were furloughed during April and May 2020, peaking at 8.9 million—roughly a third of all employees—in May 2020. Overall, 11.7 million jobs were furloughed.
In response, the Bank of England cut interest rates to 0.1% and more than doubled its quantitative easing programme by £450 billion, taking the total value of assets it owned to a peak of £895 billion by December 2021. The total amount of public money calculated to have been spent on tackling the pandemic ranges from £376 billion by the National Audit Office in June 2022 to £407 billion by the International Monetary Fund in September 2021. In 2020-21, Government had income of £794 billion in tax receipts and other revenues, which is £79 billion less than forecast, and spent more than £1,107 billion. The budget deficit was £312 billion, or 15% of GDP, which is a peacetime record. The financial cost for every man, woman and child in this country has been estimated at £5,500.
Former Supreme Court judge Lord Sumption, writing in The Daily Telegraph on 18 November, said:
“Compare the modest financial hit experienced by Sweden, the only European country to see through the hype by which other governments sought to justify their measures. Sweden operated a largely voluntary system and refused to lock down. Pandemic-related measures cost 60 billion kronor in 2020 and 2021, according to government figures. This works about at about £460 a head, less than a tenth of the UK figure. Yet their results in terms of both cases and deaths were a lot better than ours.
We are paying the price of panic, populism and poorly thought-out knee-jerk decision-making. At least the current Prime Minister can point to his warnings as chancellor that lockdowns were unaffordable if extended over any significant period of time. Boris Johnson’s indifference to mere money ensured that the cost was not even considered. All that can be said in his favour is that, if the Labour Party had had its way, the lockdowns would have been even longer and more costly.”
Let us look at the inflationary pressures we are now suffering from. As the country and world opened up after lockdown, there were sharp increases in the cost of essential goods and energy as the world emerged unprepared for such rapid demand, putting prices up, from the fuel pumps to the goods on supermarket shelves.
James Gray (North Wiltshire) (Con)
I congratulate my right hon. Friend on her speech. Although I do not necessarily subscribe to all her views about lockdown, she is right to say that the hospitality sector in particular is suffering dreadfully from energy price increases. I bring to her attention a particular case in my constituency, where we have many pubs and restaurants that are suffering. The energy bills of a large country house, which is open to the public, have gone from £16,000 a week to £60,000 a week. That is entirely and totally unsustainable. Does the right hon. Lady agree with me that the Government have to do something now to ease the pressure on the hospitality sector?
Esther McVey
I welcome my hon. Friend to this debate today. He might be one of those who voted for continuous lockdowns, but it is important that we are all together in a sense of open debate and conversation. The point he raised is correct. If subsequently, after the Government had intervened to close things down, there were effects on otherwise viable businesses, the Government had to step in and support them. Indeed, the Government have given unprecedented support, but I wish we could have had discussions beforehand so that when people voted for lockdown, they knew what would befall them. At the time, too many colleagues did not want to do that.
Patricia Gibson (North Ayrshire and Arran) (SNP)
May I ask the hon. Lady a question about a comment she made a few moments ago? She talked about populism and said that was a factor in deciding to implement lockdowns. I am confused by that because lockdowns were, at best, tolerated; they could never be described as appealing to populism.
Esther McVey
I was quoting Lord Sumption, the former Supreme Court judge, who was talking about the way governments were led at that time—those were his words. What we need to take from them is the question of why those decisions were not questioned or challenged by Members of Parliament. Why were those decisions not challenged? If we look at the record of the House, the decision appears popular because MPs voted for it pretty much unanimously, when there should have been greater debate.
Sammy Wilson (East Antrim) (DUP)
Does the right hon. Lady accept that Lord Sumption was right, although maybe not according to the common use of the term “populism”? First, the use of fear encouraged people to think, “There is no alternative. I have got to do this.” Secondly, the lack of any examination of the measures by the media ensured that there was not any contrary point of view, so listening politicians heard people saying out of fear, “You’ve got to do something”, and the media, when questioning that, saying, “This is the right thing to do.”
Esther McVey
I thank the hon. Gentleman for making that point. That is why I quoted Neil Ferguson at the start of the debate, who said that he never thought a western democracy would lock down, and why I posed the question about whether a campaign of fear was then brought forward, creating an atmosphere in which no one could dissent or ask questions. Going back to the question raised by the hon. Member for North Ayrshire and Arran (Patricia Gibson), there appeared to be a giant consensus across all political parties, leading to that word “popular” at the time.
Chris Green
Does my right hon. Friend share my concern about the point made about fear? When people look at Parliament or much of British life, it appears that we have returned to normal, but not all British life has returned to normal yet, which is having a continuing impact on our economy.
Esther McVey
My hon. Friend makes the point eloquently; I hope he will make a speech later, fleshing out his comments.
By February 2022, inflation had already surged, with the consumer price index hitting 6.2% in February, after which, without doubt, the war in Ukraine added to the problem. As it stands today, we have unprecedented inflation and costs of living.
None of that should come as a surprise. In fact, the Imperial College report of March 2020 that recommended lockdowns specifically said that the
“economic effects of the measures which are needed to achieve this policy goal will be profound.”
While many people talk about the cost of covid, it is actually the cost of lockdown and lockdown rules that need to be questioned.
The Government have spent in the region of £400 billion on the covid-19 response, which has taken the national debt to over £2.1 trillion. To make matters worse, we know vast sums of money were wasted. For example, seven Nightingale hospitals were built in England, which was an impressive achievement completed in record time. However, most of them were hardly used in the way intended and they cost more than £530 million. The Yorkshire Nightingale closed before ever seeing a patient. Elsewhere, an eye-watering £673 million was spent on unusable personal protective equipment items.
The £70 billion spent on furlough and £84 billion on business support schemes softened the blow for a while. However, the Federation of Small Businesses still warned of a ticking time-bomb, with 500,000 owners of small businesses—the backbone of our economy—at risk of going bust within weeks.
Taiwo Owatemi (Coventry North West) (Lab)
In my city of Coventry, many small businesses were hit considerably by covid and are still being hit because of the cost of living crisis. Does the right hon. Lady agree that in order to continue to support our small businesses given the turbulent year that they have had, we need to reform business rates and invest in our high streets, and we also need to ensure that our small businesses are given the support needed for them to be able to compete effectively with online giants that have been able to make hay during the covid-19 pandemic?
Esther McVey
I am a massive fan of small businesses, enterprise and those people creating wealth in their communities, and we will have to support them. Also, I will pause for a moment to reflect on all those small businesses that did not get support during the pandemic, which are known as Forgotten Ltd, and they also need support going forward. We again have to create a dynamic world and a dynamic UK for these private enterprises.
Vacancies are now at a record high as people elect to resign from the labour market, which is known as “the great resignation”, and because there are those other people who are now classed as being economically inactive. This is something that we could not have foreseen as we furloughed and closed the country down, but again it is a consequence of the lack of debate, probing and questioning at the time.
It is finally time to publish the much talked-about but still missing cost-benefit analysis that led to the nation being locked down, and to have full disclosure about the facts that were available. Let us review the list of experts on the Scientific Advisory Group for Emergencies, or SAGE, and on other advisory committees. Going forward, let us ensure that there is transparency about the members of these groups, as we have for MPs, such as their political affiliation and the financial support they receive.
All eyes are on the covid-19 inquiry for impartiality and a diverse range of experts to give evidence. We need integrity and clarity, and the policy of lockdown needs to be assessed honestly and fully. However, today I call on the Minister—the Economic Secretary to the Treasury, my hon. Friend the Member for Arundel and South Downs (Andrew Griffith)—to release the much-awaited cost-benefit analysis of lockdown.
Mrs Sheryll Murray (in the Chair)
Before I call the next speaker, may I just apologise for the background hum? I understand that staff are trying to resolve it. In the meantime, however, if Members could speak very clearly, I think we can continue with the debate.
Graham Stringer (Blackley and Broughton) (Lab)
I congratulate the right hon. Member for Tatton (Esther McVey), both on her speech—the vast majority of which, if not all, I agree with—and on bringing this matter before the House. It was not only during the time of covid that we did not debate covid enough; since the end of lockdown, we have not debated the consequences of the policy decisions taken during covid.
I will just go back to what the Government said at the start of covid; it is always better to go back and examine whether those things actually happened or were honoured. The first thing the Government said at the start of the crisis was that they would follow the science. They did not follow the science. I can give a large number of examples where they did not follow the science, but I will just concentrate on two or three important examples.
One of them has already been mentioned: children losing their education. It was clear from the very beginning of this disease that it was primarily a disease of the elderly and of people with other co-morbidities. It was clear early on that there was essentially no danger to children or anybody else from opening schools, but they were not opened quickly enough. Anyone who goes into schools and knows young children can still see the damage that was done to them both emotionally and educationally because the science was not followed.
The hon. Member for Bolton West (Chris Green) will remember that Greater Manchester, which had a two-tier system of lockdown, was put into lockdown before Merseyside. The Government’s statistics on infection rates and the R number were higher for Merseyside than they were for Greater Manchester, but the right hon. Member for West Suffolk (Matt Hancock), who is better occupied in the antipodes than he was in this House as the Secretary of State for Health and Social Care, decided that he liked the Mayor of Merseyside rather more than Andy Burnham, so Greater Manchester went into lockdown and Merseyside did not, even though the statistics suggested otherwise.
More trivially but importantly for those who like a drink was the decision to close pubs at 10 pm. When we questioned the Government’s chief scientific adviser and chief medical officer on the Science and Technology Committee, they openly admitted that this was a ministerial decision with no science behind it whatever. So the Government did not follow the science, and I do not think they ever had any intention of doing so.
Chris Green
One concern I had from the very beginning of the pandemic was that we had the Prime Minister, professors, doctors and Ministers saying, “This is the scientific evidence. This compels you to do as we are saying. We have the weight of evidence behind us.” However, not long afterwards—in fact, within days or weeks—it was clear that there was no scientific basis for the 10 pm curfew. That undermines people’s confidence when the scientific and medical establishment tells us to take the necessary precautions.
Graham Stringer
The hon. Gentleman makes a good point. Most politicians are not scientists—there are very few; I do not think we even have an epidemiologist in the House—or scientifically trained.
Dominic Cummings came to the Science and Technology Committee and made an extremely good point: members of the Government are not experts, so when scientific evidence was being given to them, it should have been challenged, and other scientists should have been brought in to challenge it—so-called red teams. That challenge would have helped the Government to see that there was a debate. Many scientists were frustrated because they had a different view of the evidence presented—sometimes they even had different evidence—and it should have been considered. However, that internal debate did not happen in Government, and the debate in the House of Commons, as the right hon. Member for Tatton said, also did not happen as it should have done.
What did happen was that the Government decided on lockdown. My view is that once Italy, China and a number of countries in south-east Asia had locked down, the Government believed that lockdown was the politically safe thing to do. It was not scientifically the right thing to do; it was not the most effective way of dealing with the covid epidemic.
There are two reasons for locking down. The first is to eliminate the disease very early on to stop it spreading at all. That position had passed a long time before the Government locked down. After that, the reason is to stop the NHS being overwhelmed by too many infections at once. The Government’s other slogan—apart from that they were following the science—was that they were going to protect the NHS. They did that in a very simple sense, because it was not overwhelmed by covid. However, since the start of 2020, there has been effectively no NHS for many people. During covid, hospitals were empty and GPs could not be seen. The fact that deaths are now about 10% higher than normal shows the impact of people not being able to access GPs or get cancer care and of elderly people suffering from dementia not getting any support or human contact.
Chris Green
Does the hon. Gentleman share my concern that the Government’s approach appeared to be to use the precautionary principle to protect the Government rather than to protect people, and to say, “If we lock down and do the restrictions, no one can blame us for what comes out from it”? In contrast, the Swedish approach was to give people good advice and take only the necessary measures.
Graham Stringer
The hon. Gentleman puts it in an interesting way, although there is another interpretation of the precautionary principle. Some people interpret it as meaning that we should be as cautious we can be, but it actually means that we should not take action until we are certain of the facts. It does not mean that we should not do anything, which is how the Government interpreted it.
The right hon. Member for Tatton made a good point about the Government’s position on lockdown. Gavin Morgan, who was a member of SPI-B, the sub-committee of SAGE, said that behavioural psychology was weaponised and that there was an exaggerated threat. We got into a vicious feedback loop: the Government frightened people, so people demanded more lockdown from the Government. That was bad for health and the economy.
That is the health side of it, and we are suffering from it now, with 6 million-plus people on the waiting lists for elective surgery. However, this debate is primarily about the economy. The Government say that the war in Ukraine is the prime reason why the economy and the Government’s finances are in difficulty.
The right hon. Lady mentioned the IMF’s estimate that £407 billion was spent on covid. Some of that money was spent really well. Some of it was spent on developing the vaccines and on the vaccine taskforce, and that work was brilliant and very effective—I congratulate the vaccine taskforce—but much of it was wasted. The National Audit Office estimated that the bulk of the £37.5 billion spent on Test and Trace was wasted because there was no communication between the centre and the public health teams. That is a huge amount to waste, and that was just the budget.
Money on personal protective equipment was wasted not only because it went to friends of the Government in pretty dodgy contracts, but because it went on pretty dodgy personal protective equipment that did not work. All that has had a disastrous effect on the Government’s finances, and therefore the economy, because it is preventing the Government from spending money where they should.
I will finish on two points. I could go on for much longer, but other Members want to speak. There was no proper debate inside or outside the Government about the science. Just before Parliament went to sleep, it passed the Coronavirus Act 2020. One would have expected that Act to be used, but it was not. The Public Health (Control of Disease) Act 1984 was the Act under which the Government mainly enacted the decisions that they had made. That Act allows less scrutiny in Parliament, and we lost many of our civil liberties for no good reason at all. I am still shocked that, when I left the House to go back to Manchester after the House had started sitting again, and I was going into Euston station, a police officer asked me where I was going. This is not Nazi Germany in the late 1930s; this is the United Kingdom of free people. I am not going to tell police officers where I am going. We need to look at that issue.
Finally, there is a great deal of hope that Baroness Hallett’s inquiry will get to the bottom of many of the issues we are discussing all too briefly today. Like other colleagues who have spoken, I have written to Baroness Hallett setting out my worry that she is disproportionately asking for evidence from people who naturally supported lockdown and not from businesses that have gone to the wall because of lockdown or from people who cannot access health services because we are still suffering the impacts of lockdown. I am worried about the way that that inquiry is structured.
I will finish on a figure from Professor Thomas of Bristol University, who has pointed out one of the issues I raised in the debates that took place when I was asking for an economic as opposed to a health analysis: poverty kills—not just covid. Professor Thomas thinks that 2.5 million life years have been lost because of the loss of GDP so far. It is a statistical factor, but it gives an indication of the economic damage and the impact that lockdown has had on people’s lives.
Chris Green (Bolton West) (Con)
It is a pleasure to serve under your chairmanship, Mrs Murray, and to follow the hon. Member for Blackley and Broughton (Graham Stringer), who brings his scientific background to bear on the Science and Technology Committee. I congratulate my near neighbour, my right hon. Friend the Member for Tatton (Esther McVey), on securing this timely debate on the economic impact of lockdown.
We went through a very difficult period during covid. It was unnerving and nerve-racking to see the broadcasts coming from China and what happened in Italy. There are so many lessons to be learned from understanding and interpreting a little better what goes on in other countries and from reflecting on what we should do in the United Kingdom.
I have always put the concerns I had over covid and the lockdowns in four categories. Following on from the point about civil liberties, it was extraordinary to see drones following people across the Derbyshire dales and hikers being told, “If you’re carrying a coffee, that counts as a picnic, and therefore the police will intervene.” There was a whole series of different things in the civil liberties area that constrained people’s activity.
One thing we know now, and which we had a good sense of fairly early on, is that good health is immensely important when we come up against any disease. Vitamin D and exercise are important, and obesity is one of the greatest problems when facing covid. Someone who is obese is more likely to be hospitalised or suffer a serious condition. Despite that, what the Government did on civil liberties was to restrict people’s access to normal healthy activities, such as walking—even if they were socially distanced because they were on top of a mountain or they were being sensible and following the guidance—or sunbathing in a park. Civil liberties are very important, and educational exclusion is also immensely important.
There is also the wider health impact of denying the routinely expected service of being able to see a GP. Shortly before the second lockdown, I flagged to the then Prime Minister, the right hon. Member for Uxbridge and South Ruislip (Boris Johnson), my concern that there were about 20,000 fewer GP-to-hospital referrals just in Bolton borough over the lockdown period—a relatively short period of time. If that is in Bolton alone, just think of the millions of people that that means over the whole of the country. I do not know what that means in terms of life and death, but if a GP thinks something is serious enough for someone to need screening, more diagnostics and then treatment—perhaps serious and urgent treatment—then how many people right across the country with a life-threatening or life-changing condition could not see a hospital consultant or someone else to get what, in so many circumstances, was basic medical treatment?
In many ways, we can understand and appreciate the decisions we made—we did have to change our approach to healthcare and to have more controls in place—but my concern was about getting the right balance. When I wrote to the then Prime Minister about that before the second lockdown, I was expecting that he would actually explain it, perhaps with a cost-benefit analysis or an impact statement. In my letter, I asked, “Is the impact of the cure worse than the disease itself? Are the measures we are taking to protect us from covid worse than the impact it is having on our society in terms of civil liberties, education, healthcare and”—the focus of this debate—“the economy?”
When people talked about the economy early on—a good distance into covid and lockdowns—they were shouted down for that. We were shouted down for talking about money. When we have those conversations today and talk about the money, how expensive covid was and the disruption to businesses—whether large businesses or small businesses, which, as was rightly pointed out, have borne more of the brunt of this—we can see the dramatic economic impact. Who would now say, “Don’t talk about it. It’s not relevant. We have to focus only on the disease itself”? We are talking about these things all the time now.
I appreciate that the situation with Europe’s biggest energy producer invading Europe’s biggest food supplier has had a dramatic impact—we cannot get away from that—but we know, and we knew very early on, that the impact of lockdown on the economy would be enormous if we went much beyond three weeks. No one actually said, “It should be for three weeks”—there was no direct expectation—but the words of the Prime Minister at the time, suggesting a three-week period, did give people reasonable cause to think at the beginning, when Members of Parliament were voting on the first lockdown and the Coronavirus Act, “Three weeks? That would be great. If it is a little bit longer, it will be bad, but that gives us a framework for the timescales.” The longer a lockdown goes on, the worse the impact on the economy, the more demands there are for furlough and other economic support, and the greater the impact on healthcare access.
However, my particular interest is education. The schools that I visit now are actually quite grateful that we got out earlier than we might have done, because a fourth lockdown was being lined up. They are looking at the impact on children, especially from poorer backgrounds, and it is far more profound than anyone was talking about at the beginning. No one was talking about the impact on those children, but the outcomes will be devastating. Even after they have gone back to school and we have pumped a few billion pounds into the education system, they will never get back the experiences they missed or the exams they would have taken. The rest of their school career will be held back. Their results will be worse, and their opportunities for further education—for higher qualifications and the jobs that go with them—will be taken away.
My right hon. Friend the Member for Tatton rightly mentioned the £40,000 of lost earning opportunities. However, some people will not get that job—they will not get the step up that would have led to horizon-broadening educational experiences and the work that goes with it. That has been taken away from so many children, and it has reverberated right across the system. We have been through a bit of political turmoil recently, but a recent Prime Minister and an Education Secretary have both said that we should never have locked down the schools. It would have been nice if that argument had been presented—or at least if the consensus had been challenged—right at the beginning. The people least affected by covid were the most affected by the lockdown. Many of the impacts on children can never be changed or redeemed.
I have an interest in medical research. I used to work in the mass spectrometry industry in the constituency of my right hon. Friend the Member for Tatton for nearly 20 years before becoming a Member of Parliament, and I think about the medical research side of things.
Mrs Sheryll Murray (in the Chair)
Order. The hon. Gentleman might want to keep within the confines of the motion that we are debating. This is about the economic impact of covid-19 lockdowns.
Chris Green
Absolutely, and the place I worked at, AstraZeneca, is a huge contributor to the British economy, not just through its manufacture of drugs, but through its research and development effort. The pharmaceutical sector is a vital part of the British economy. This goes broader than the big pharmaceutical companies, however. Smaller organisations, especially medical research charities, are an important part of the British life science sector. What did the disruption to their research effort mean? There are many rare medical conditions that need treatment. That research contributes to the economy, and the landscape in which the sector operates is a significant factor in our economy. If a lockdown disrupts medical research at an early stage, when the charity is raising money for research—perhaps recruiting a researcher and getting people on to clinical trials—it takes a long time for that medical research charity to regain those funds. Perhaps funds were raised through sporting events and other activities; that money has to be got back. They then have to recruit a researcher, or even a team of researchers, to look into getting the clinical trial started. There are many other aspects to it, too. The process takes a very long time.
The life expectancy lost due to the economic disruption has been mentioned. We should also think of the pharmaceutical and other products that would have been produced in that time. People’s life chances have been hindered because the medical progress that we would have made during that period was not achieved. If we look at all the different parts of our society, including the high streets and medical research, the disruption has been profound. This is partly about jobs when people leave school, but also about jobs in businesses and industries. We should also consider the life opportunities for people receiving medical treatment, and their ability to maintain their position in the workplace, which might be taken away if they do not get medical support.
At the beginning of covid and the lockdown, people did not realise or appreciate their impact. I think of what happened as a pulling on the thread of society, and the breaking of the bonds that bind us. Knitting them back together is challenging and difficult. It is expensive and takes a long time. In the meantime, the problems are difficult. I hope that my hon. Friend the Minister will reflect on that. In future such situations, whether the issue is covid or something else that has come along, I hope the Government will do a cost-benefit analysis, and will ask: if we need restrictions, what will that mean for all sectors of society?
Sammy Wilson (East Antrim) (DUP)
I congratulate the right hon. Member for Tatton (Esther McVey) on securing the debate, and I thank her for her sterling work in leading the all-party parliamentary group on pandemic response and recovery. The APPG has delved into many issues that those who made or supported decisions that led to this situation would love to forget. There is a desire to put all this behind us, and to ignore the fact that there was controversy about the decisions made at the time. That controversy was submerged by a deluge of fear tactics and an unwillingness to debate the issue. The media played a big part in that. I did a number of interviews back home in Northern Ireland, and people who questioned decisions were regarded as almost not caring whether people lived or died. That was the atmosphere in which the debate was carried on. There was, in part, a deliberate attempt to squeeze people into doing and accepting things that naturally, in an open and democratic society, they would never dream of doing or accepting.
Everybody who has spoken was probably in the group of those in the House of Commons who were prepared to challenge. However, this debate is not about saying, “We told you so.” The debate is important because it ensures that the inquiry into the covid response, which is being carried out, will look at the side of the argument that was ignored, and of which full cognisance was not taken, when decisions were made. The inquiry is independent, but I hope that the Minister accepts that it is important to feed back to the inquiry the point that it must not simply reinforce all the decisions that were made. It must examine whether, when those decisions were made, decision makers sought full knowledge of the consequences that would flow from them.
We are here to look at the economic consequences. Of course, they were felt at the time, but they are still being felt today, as speakers have outlined, and will be felt for a long time. As the economy was locked down and we could not leave people without some kind of support, an immediate consequence was a huge amount of borrowing. The figures have been given today: £376 billion or £407 billion. Those are mind-boggling figures. Some of that went on support for healthy people who could have gone to work safely, and without any consequences for the health service or their families. Even people who worked outside—builders or farm workers—were unable to go to work, because they might be infected by those they worked with. There was the cost of paying healthy people not to work, when they could have worked.
Then there was the splurging on many national health issues, including the rush to buy personal protective equipment, hundreds of millions of pounds-worth of which we have never used. It is still being stored by the countries that were supplying it to us; we are paying them to do that.
There should have been a more focused debate about what was needed and the nature of what we were facing, as well as a willingness to listen to the other side of the argument. On many of the discussion programmes that I took part in, all the people brought in were on one side of the debate, even though the arguments on that side were well known. The media companies had researchers who could have dug out someone on the other side of the debate—the Government were certainly in a position to do that—yet they decided not to.
There was the immediate spending, and the impact on businesses. I can think of many people in my constituency who lost their dream of having their own business. The girl who used to cut my hair had a small hairdressers and employed three people. She obeyed all the rules. She spent what little capital she had on putting up screens and buying different instruments that could all be sterilised after use. She survived the first lockdown, but when it came to the second, she said, “I’ve no more money to keep the business going,” and she lost it. We all know of hundreds of stories like that in our constituencies.
One Monday, I had parliamentary business, and I chose to come in rather than do it by Zoom, because I believed that Parliament should be sitting. As I came through Leicester Square on a Sunday evening at half-past 8—I remember, because I took a photograph of it—I went into Burger King to get a burger; I was not allowed to sit in the place, but I could sit outside, and throughout the time it took me to eat the burger, I was the only person sitting in Leicester Square. How could hospitality businesses ever survive that kind of situation? It was not necessary.
The Government argued, “You’ve got to do these things to save the health service, save older people from death, and stop disease spreading.” Other countries chose different routes and had better outcomes. They did not do the damage that was done here, because rather than spread fear, they gave information that people could choose to act on. Most people, being sensible, would act on sensible advice. I would never have dreamed of going to see my mum and dad when they were alive if I had a bad cold, because they were vulnerable. If that meant I did not see them for a week or two, I did not see them for a week or two, and yet we felt we had to tell people, “You cannot do this because we can’t rely on your common sense.”
There were short-term consequences: businesses went under and huge amounts of debt were built up. The Government were left with a huge amount of debt, which has curtailed their ability to help with the current economic crisis. Then there are the consequences still felt today. If supply chains close down, firms go out of business. If the people supplying the goods that we rely on are no longer there, or cannot get the parts that they need because other parts of the supply chain have been affected, then of course there will be inflationary pressures. People who lived through the pandemic and saved money came out of it immediately wanting to spend, but the goods were not there to spend money on, so we started the inflationary spiral. I will not fall into the trap of blaming the Government for inflation, all the economic difficulties and the fuel crisis, but they have to accept some responsibility for the consequences of the choices they made.
There are other consequences. We had questions to the Secretary of State for Business, Energy and Industrial Strategy today. There were questions about the difficulties that companies have recruiting. Why do they have those difficulties? Because the economically active workforce has declined. In some cases, having lived through furlough, people found that they could live on less. They decided to change their lifestyle abd just not work. They took early retirement or decided to work part-time, and there has been an impact on the labour market.
Hundreds of thousands of people are not able to work because the health service cannot cope—the warnings were given—with all those who were not diagnosed during the lockdown. People were afraid to go to hospital; they were told not to go, and that their doctor would not see them. Now they find themselves unable to work because of sickness. We talk about long covid; we are suffering from long covid—the long-term economic effects of the covid decisions that we made. It is important to have debates such as this, in which we highlight the impact of those decisions. We must ensure proper examination of the decision-making process at the time, and learn lessons from the actions that we took.
Ian Paisley (North Antrim) (DUP)
Does my right hon. Friend accept that in Northern Ireland, the impact has been even greater? In a population of less than 1.9 million people, about 400,000 people are on waiting lists. The cancer waiting list and undiagnosed cancers are at an all-time high. The ambulance service is in disarray, and people in our wonderful nursing profession are being left high and dry, despite their expectations. They will not be rewarded, after being told that they were the most valuable people in society.
Sammy Wilson
The other aspect to this is the excess deaths that we now have. At the time, I did not support the daily death toll being announced on the news. I thought it was wrong to do that. It is strange; there are now excess deaths due to lockdown and its implications on the health service, but we do not publish those numbers. It is a daily reminder of what happened, however. Families across the country are sadly being reminded daily of the impact on the health service of the decision that lockdown was the way to go, even though in many cases the hospitals that closed down, and were not open for normal service, were not dealing with covid patients. I mention that because it reminds me of the fear that was engendered even among health professionals. Many health professionals would phone me and say, “I don’t dare speak out, because if you do, you can get struck off.” Such was the atmosphere of fear.
An issue that I have not yet mentioned is education and the long-term impact of the unnecessary lockdown of schools. Children could not easily become infected or pass on the infection. Even if they did get covid, it had very little impact on them, but they have not escaped the long-term educational impact of being taken away from school.
It has been mentioned briefly, but not enough, that the most severe impact has been felt by the least well-off in our society. I remember going into people’s homes—I probably should not have visited them during lockdown, but I did, because they were my constituents. Those living in blocks of flats did not have a garden to put their youngsters out into, and they were worried that they were not geared up to help their youngsters with their educational needs. They were worried about the long-term impact on their education, and on their social lives. I think we have forgotten that the people hardest hit were the most vulnerable and most needy. I hope that this debate helps to remind us that we should not go down that path again, and that all these issues should be considered.
Patricia Gibson (North Ayrshire and Arran) (SNP)
I am pleased to participate in this debate, and I thank the right hon. Member for Tatton (Esther McVey) for bringing it forward. We have heard much today about the economic consequences of lockdown and the magnitude of the recession it caused, which was unprecedented in modern times. GDP declined by 9.7% in 2020—the steepest drop since consistent records began in 1948 and equal to the decline in 1921, according to unofficial estimates. The Scottish economy contracted by 19.4% between April and June 2020; that is the biggest fall in quarterly GDP on record.
We understood—how could we not?—that lockdown would of course bring significant economic cost. How could anybody not have anticipated that consequence? I have heard some Members talk about following the science; I am about as far from being a scientist as it is possible to be, but studies have shown that about 20,000 lives could have been saved if the first lockdown had been implemented a week earlier, according to research published by Imperial College London. I do not have the scientific expertise to challenge that, but when experts speak it is incumbent on us to listen. The research, incidentally, was published in the Science Translational Medicine journal, and also found that national lockdown was the only effective measure that consistently brought down the R number.
We must remember that we are speaking from the comfort of having emerged from covid, for the most part, despite the damage that it has caused on a number of levels. A Government’s first duty must be to ensure the safety of those they seek to serve. Surely we cannot forget the uncertainty during those dark days, and the need to do all we could to reduce our social contact, save lives and restrict the potential for infection. Of course there was a cost to that—nobody would pretend otherwise. How could we imagine that there would not be?
Patricia Gibson
In a moment.
These were difficult decisions that were not made lightly. I thank the lord every day that I did not have to take the responsibility to make those decisions, which were so far reaching in their consequences. They had to be made at pace and err on the side of caution, because public safety had to come first. It is easy now to sit, with some distance behind us from those days, and commentate and look at things that could have been done better. Of course mistakes would have been made, and of course things may have been done differently, but in that context and acting at speed, we—I say “we” in a societal sense—had to put public safety first.
Consider for a moment the leaders across the UK who were responsible for making those decisions, relying on public health experts as they were. As the hon. Member for Blackley and Broughton (Graham Stringer) said, politicians are not often particularly scientific or trained in scientific methods. The leaders were relying on public health experts and understanding the weight of their responsibility—that, when it comes to public health, the buck stops with them. We can make criticisms about the decisions that were taken, and talk about possible wrong turns and the damage done; all those things are true, but the reality is that the priority had to be to keep the infection rate down and save lives.
I agree with elements of what the right hon. Member for East Antrim (Sammy Wilson) said. Every single day that I was required to be in Parliament—Monday to Thursday, which is the norm—I came down here during lockdown. The reason I came was not because I felt invulnerable to infection. I came down here—it is quite a long journey, as Members can imagine—because postal workers, nurses and cleaners in my constituency had to go to their jobs. In that context, I felt unable and unwilling not to go and do my job. That is really important.
I also speak as someone whose mother-in-law was in a home with dementia. Again, I am not a scientist or doctor, but it is pretty clear that although dementia was cited as the cause of death on her death certificate, lockdown reduced her to a catatonic state because of the lack of stimulation. That does not mean that I think lockdown should not have happened, because the reality is that we cannot look at individual relatives or individual circumstances. We have to look at society in the round and make the best public health decisions, based on the scientific advice given across the UK and Europe, in order to protect the people we seek to represent.
Chris Green
The hon. Lady is making a powerful argument. One of the points that has been raised, which is part of the broader debate, is that we saw what was happening in China and Italy. People in Britain were already voluntarily choosing to restrict their activities and restrict going into work—
Mrs Sheryll Murray (in the Chair)
Order. I gently remind both speakers that we are talking about the economic impact of covid lockdowns. I also remind the hon. Lady that the shadow Minister and Minister have yet to speak, and I would like to allow at least a couple of minutes for the right hon. Member for Tatton (Esther McVey) to sum up. Please bear that in mind.
Patricia Gibson
Thank you, Mrs Murray; I will curtail my comments. The hon. Member for Bolton West (Chris Green) has made his point, but we need to move on in the light of the comments from the Chair.
I do not think the hon. Gentleman used the name of the country, but Sweden took a different approach to lockdown. However, the House of Commons Library has done some work on the issue and has pointed out that, although there was reduced economic activity as a result of lockdown, as we would all expect, it is likely that had lockdown not been implemented—a number of Members have been critical of lockdown—people would probably have reduced their social contacts voluntarily anyway, as they did in Sweden.
We will never to what extent that may or may not have happened, and we cannot know how the virus would have evolved had we not had lockdown. We could have found ourselves in a different situation all together. People can say, “At the time, I knew this and I knew that,” but the reality is that we do not know what the outcome would have been if the Governments across the UK had taken an entirely different approach. The impact could have been even greater than that which we suffered.
Everybody understands the effect of lockdown on education, on social contact and—it has not been mentioned—on mental health, but we were faced with an unprecedented situation in which we had to act at speed and try to take the pressure off the NHS. The right hon. Member for East Antrim said that people who supported lockdown want to forget it and act like it did not happen, but we cannot forget the context in which we were living. It was a time of great uncertainty, great fear and lots of unknowables, and we had to respond. I know that a number of Members are attacking the Government, and it is not often that I defend them, but this is not about the Government. This is about public safety and public health.
Businesses have struggled through lockdown, which was considered necessary at the time, and many have managed to survive and cling on to their livelihoods. They are now going through another wave of unprecedented difficulties. If the Government do not offer additional long-term support to businesses on energy costs, the initial money they invested to keep businesses afloat will have been wasted, because the very idea of that investment was to save businesses and jobs—that is what the investment was for. If the energy support is not sufficient, those jobs will disappear anyway, so the initial funding during covid will have been to no purpose. I want the Minister to think about that and comment on it when summing up.
Abena Oppong-Asare (Erith and Thamesmead) (Lab)
It is a pleasure to serve under your chairship, Mrs Murray. I congratulate the right hon. Member for Tatton (Esther McVey) on securing the debate, and thank hon. Members for their contributions. I am glad we have the opportunity to discuss this issue; I agree with the right hon. Lady that we need to have these frank and difficult discussions. The pandemic had a deep financial, economic impact. It is important to think about the future, and how we can grow our economy and improve living standards.
I was elected in December 2019, before the pandemic hit. I then saw at close hand the impact on people’s livelihoods and wellbeing, and I know that people are still struggling. A lot has happened since covid-19 first reached the UK: not one, but two toppled Governments; two Prime Ministers; the scandal of Downing Street Christmas parties; and more than 50 people issued with fixed penalty notices, including the current Prime Minister.
I want to take us back to 2020. On 23 January, the Foreign Office advised against all but essential travel to Wuhan, China, the epicentre of the outbreak. The first case of covid-19 in the UK was confirmed on 30 January, with cases steadily rising over the following weeks. On 6 March, the then Prime Minister said, during a visit to a lab in Bedfordshire,
“It looks to me as though there will be a substantial period of disruption when we have to deal with this outbreak.”
It was not until 23 March that the Prime Minister announced a lockdown—the introduction of new restrictions on everyday life and travel. We know that the delay in taking that decision risked many lives, harmed our economy and prolonged the pain. For the next 16 months, the Government yo-yoed in and out of lockdowns and new restrictions, with much dither and delay.
Some members of the Government thought it might be best to let the virus rip. The result was unclear messaging, decisions taken too late, and a death rate that was too high. The Government were too slow to lock down in March 2020, too slow to protect our care homes, too slow to save jobs and businesses, and too slow to get protective equipment to the frontline.
In the summer of 2020, the Government ignored warnings about the second wave. In September, a circuit breaker was introduced, against scientific advice, followed by a longer lockdown a month later. As my hon. Friend the Member for Blackley and Broughton (Graham Stringer) mentioned, in December, when the scientific advice was that national lockdown was necessary, the Government dithered for nearly two weeks and ended up cancelling Christmas at the last minute.
The current Prime Minister, who was then Chancellor, was not even in the country at that point. The Government shut down the economy at the height of the festive period, and was nowhere to be seen. He had to fly back from his California home after business leaders demanded that he plan a financial support package, following the mixed messages from Government. That indecision cost lives and livelihoods.
I pay tribute to our fantastic NHS and social care workers, without whom we would have really struggled. Many put themselves in harm’s way to slow the speed of the virus. I also pay tribute to the British people, who rose to the challenge and came together as communities to protect the most vulnerable. It was a time of national solidarity—a shared effort to face a challenge that most of us had never experienced before.
The right hon. Member for Tatton referred to the Labour party. Throughout that period, the Labour party called for quicker decision making and measures to protect jobs and businesses. The Government could have been provided targeted support for the hardest-hit sectors, fixed sick pay and eased the burden of business rates, whether that was on high street businesses, arts venues, café or hairdressers. So many businesses suffered from the lack of clear communication and decisive action.
We know that we were not all in it together. When much of the country was struggling, No. 10 was hosting parties. Sue Gray’s independent report said that senior leadership in No. 10
“must bear responsibility for this culture.”
It continued:
“At least some of the gatherings in question represent a serious failure to observe not just the high standards expected of those working at the heart”—
Mrs Sheryll Murray (in the Chair)
Order. I gently remind the shadow Minister that we are supposed to be debating the economic impact of the covid-19 lockdowns.
Abena Oppong-Asare
Thank you, Mrs Murray, but I do think this is important because, while we were going through the economic crisis, this is what was happening. This is what we need to look into when we learn lessons for the future.
Mrs Sheryll Murray (in the Chair)
Order. We are debating the economic impact of the covid-19 lockdowns.
Abena Oppong-Asare
I will take your comments on board, Mrs Murray.
We know that the impacts of covid-19—particularly the economic impacts—run deeper. Just this month, new information has been revealed detailing how some people, including a Tory peer, sought to use covid-19 and lockdowns for their own benefit. PPE Medpro was given £230 million in Government contracts after a referral to the VIP fast lane by a Tory peer. The extent of her involvement in PPE Medpro has now come to light, and tens of millions of pounds of taxpayers’ money ended up in offshore accounts. The protective equipment produced by PPE Medpro was substandard: 25 million surgical gowns, which cost the taxpayer £122 million, were rejected by the Department of Health and Social Care after technical inspection because they were completely unusable. We also know that £6.7 billion was wasted on covid payments to businesses and individuals fraudulently or by mistake.
The economic impact of covid-19 lockdowns was immense, and was exacerbated by dither and delay in Downing Street, and hard-working businesses, families and individuals suffered as a result. It has left us with an economy that lags behind the pack. Wages are lower in 2022 in real terms than when the Tories came to power in 2010, and business investment is 8% below its pre-pandemic peak. The mini Budget from the short-lived Prime Minister and Chancellor crashed our economy.
The economic facts speak for themselves. We are now the only G7 economy that is smaller than it was before the pandemic. Other countries are still dealing with the economic impacts of covid-19, but we are doing worse. We are at the back of the pack, lagging far behind. The Chancellor said he wants to address the impacts, but again the economic facts speak for themselves.
Perhaps I am being a bit unfair to the current Chancellor and Government. They have quite a task on their hands. After all, for the 12 years in which their party has been in Government, low growth and low ambition have held our country back. What would Labour do fix the mess and grow our economy in the aftermath of covid? Back in January, we proposed a windfall tax on oil and gas giants—on the profits of rising prices and war. The Government ignored our calls and instead pressed ahead with their own windfall tax, which amounts to a huge giveaway of public money to the very oil and gas companies that are making record profits. Under the scheme, some oil and gas companies will pay zero tax this year, despite record global profits.
Ian Paisley
I have listened carefully to the hon. Lady. Some of us who turned up to Parliament during that terrible time voted against the Government’s proposals. I think I voted against every single Government restriction except one. The hon. Lady and her party, I think, voted for them all. There is a bit of complicity here: if somebody’s hands are on the steering wheel and they keep driving in one direction, it is hard for them to say in hindsight, “Something different should have been done.” This grates on me just a little because there were opportunities all along the road to say, “There’s a different course of action that can be taken here.”
Abena Oppong-Asare
I want to be clear that the Labour party did raise concerns throughout the pandemic that the Government were not looking at the scientific advice, and they took late action to address and deal with it.
To conclude, as we look to recover from the pandemic, we need an ambitious plan for growth. That is what Labour has presented and that is what we will champion.
The Economic Secretary to the Treasury (Andrew Griffith)
It is a pleasure to serve under your chairmanship, Mrs Murray, and it is always a pleasure to follow the hon. Member for Erith and Thamesmead (Abena Oppong-Asare).
I congratulate my right hon. Friend the Member for Tatton (Esther McVey) on securing this debate and on her ongoing work in this domain. We have had a wide-ranging debate. I will not respond to every point as many of them are for the inquiry chairman, Baroness Hallett, to answer. Members should be reassured that, within scope, she will look at the points they raised about the scientific and public health advice and the impact on health outcomes, education and civil liberties.
My right hon. Friend was quite right to lament the fact that we in Parliament did not have the opportunity to ask questions at the time. It is to her credit that she continues to bring back this issue so we can learn the lessons of lockdown, which she rightly referred to as a blunt instrument. I am sure that no Member would wish it to be repeated. She was also right to remind us that under Labour lockdowns would have been longer and more costly.
Andrew Griffith
I will not, because I would like to respond to as many points as possible. We have had a long debate about a wide-ranging set of consequences. We heard the hon. Lady’s perspective and, indeed, to the extent that it had a critique and a narrative it was that we did not lock down deeper, harder and for longer.
Andrew Griffith
No, I have made it clear that I will not be giving way.
My hon. Friend the Member for North Wiltshire (James Gray) mentioned the impact on the hospitality sector. I represent a constituency with a significant hospitality sector, and we know that the sector was affected disproportionately during the lockdown. He and other Members understandably raised the ongoing impact of covid. One or two Members, although perhaps not enough, also mentioned the impact of the war in Ukraine, and I thank those who did for putting it in the right context. My hon. Friend raised the issue of one hospitality business in his constituency the energy bills of which have gone from £16,000 to £60,000 per month. Clearly, he is looking at the issues that people are facing, and we hear that.
The economic priority during the pandemic was to stave off an economic depression, mass unemployment and the potential for rapidly deteriorating living standards. My right hon. Friend the Member for Tatton talked about GDP falling to its lowest level since 1709. We are fortunate that the economy is now growing, thanks not only to the productive and entrepreneurial nature of the British people but to the unprecedented level of support provided. Ours was one of the fastest growing economies in recent years and that continues to be the case, and we came out of lockdown earlier than many other countries.
As all Members recognise, the attempt to limit the spread of the virus did mean the implementation of restrictions. Alongside those restrictions, the Government provided support for individuals, families and businesses throughout the country that were impacted by the virus. The two things went hand in hand. The Government could not manage that unprecedented situation. It is easy with hindsight—we have talked a lot about hindsight —and many Members have empathised with that.
I am grateful for the support from the hon. Member for North Ayrshire and Arran (Patricia Gibson), who made some fair points about the uncertainty that was faced and the difficultly of the decisions. It is my belief that they were made in good faith and tried to do the best to protect people and the economy. We cannot know, but there is at least the possibility, which the hon. Lady raised, that the impacts could have been worse if it was not for the financial support in particular that was provided, along with the other measures.
For all too short a time I served alongside the hon. Member for Blackley and Broughton (Graham Stringer) on the Science and Technology Committee. He was a ferocious interrogator and—if I may say so—very wise in the early, almost contemporaneous analysis of the scientific advice. His contribution was largely about the scientific advice, so I hope he will forgive me if I do not respond more fully to him.
My hon. Friend the Member for Bolton West (Chris Green) reiterated how vital it is that we do not lock down Parliament again, and I support him in that. Lessons will be learned and must have been learned. We here all have a voice. The reason why we are here today is because we have a voice to protect our constituents and to protect the economy from the ravages of things such as the pandemic.
My hon. Friend the Member for Bolton West also talked about the compounding effect, not just of the pandemic. I am the first to acknowledge that the pandemic has an ongoing impact on the economy. The right hon. Member for East Antrim (Sammy Wilson) talked about “economic long covid”, which is certainly part of the context in which we sit today.
My hon. Friend the Member for Bolton West reminded us that at that time nobody anticipated—as I think he put it—Europe’s biggest oil producer invading Europe’s biggest food producer. That is one reason why the Government have once again come forward with an unprecedented level of support to get people through the winter and the energy crisis that we now face, with the same objectives as the generous support that was provided during the pandemic.
Along with other major economies, the UK is in the midst of a cost of living challenge that has been caused by global inflation as a result of the disruption of supply chains, as well as the increase in energy prices. This is a global challenge and we still see higher inflation in Germany, the Netherlands and Italy. We are acutely aware of the pressures that households and businesses face. Several Members said that having been so successful in protecting the economy, jobs and businesses, it is clearly vital—this is a shared objective of Government—that we continue to do so again this winter.
Going forward, we will continue to place our people and our businesses at the heart of our policies. We are happy to make interventions, and as we debate the economic consequences of covid that is something we can all take forward.
Mrs Sheryll Murray (in the Chair)
I call Esther McVey, with one minute to wind up.
Esther McVey
I thank everybody for such a constructive debate, which was the start of our being able to look at the cost of lockdown in an open-minded way—being able to take challenge, being able to take rebuttals and answering things as honestly as possible—because when £400 billion is spent, we know that cannot be done without having long-term impacts.
We see the impact in the vulnerability of our country now—in the cost of living, the cost of jobs, the cost of inflation and the cost of poverty. We heard about the cost in terms of our health and our mental health. We should think before we ever introduce such profound policies again, particularly when the World Health Organisation and the Department of Health and Social Care have conceded that we should not use lockdowns because they are such a blunt instrument. We can never live in an atmosphere where just to ask questions is condemned. I thank everybody for participating in the debate.
Mrs Sheryll Murray (in the Chair)
Order.
Motion lapsed (Standing Order No. 10(6)).
Blackpool: Levelling Up
(2 years ago)
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Mrs Sheryll Murray (in the Chair)
I call Scott Benton to move the motion. I will then call the Minister to respond. As is the convention with 30-minute debates, there will not be an opportunity for the Member in charge to wind up.
Scott Benton (Blackpool South) (Con)
I beg to move,
That this House has considered Blackpool and levelling up.
It is a pleasure to serve under your chairmanship, Mrs Murray, and to open this debate on levelling up in Blackpool. What is levelling up? Ask the vast majority of British people and, although everybody will have heard of the term, very few will be able to articulate exactly what it is. I suspect that if we asked Conservative MPs, who were elected on a manifesto pledge to level up, we would get 350 different answers on what exactly the term means.
For me, levelling up means a child growing up in Blackpool having exactly the same life chances as a child growing up in Bracknell, Bournemouth, Brighton or anywhere else in the country. There is also a second element to levelling up. It is not just an intergenerational challenge, which takes time; there is also the fact that people love and value their communities and want to see them change, which, of course, requires an instant big bang. The Government’s capital investment programme, levelling-up funds and so on have been so important to address that challenge.
Regional disparities, including those in the north-west and Blackpool particularly, have persisted for far too long. It is fair to say that towns, disproportionately in the north and midlands, have been forgotten by Governments going back a number of decades—but no more. It makes me proud to be a Government Member: this Government are probably the first in history to take levelling up seriously and invest to such an extent in communities such as mine in Blackpool. Sadly, we are top of the list of the communities most in need of levelling up, according to most metrics. That is clearly a place that Blackpool does not want to be. It is something that all stakeholders in the town are trying desperately to address.
Blackpool’s tourism board, Visit Blackpool, probably will not thank me for doing this, but let me illustrate the context of the challenges we face in Blackpool and why we require Government support to try to turn our resort around. According to the multiple deprivation index, we are the most deprived local authority in England. Eight of the top 10 most deprived communities in the whole of England are in Blackpool, including six in my constituency. We have the worst life expectancy in the UK, with life expectancy three years lower on average; however, in the most deprived parts of my constituency and that of my constituency neighbour, my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard), it is 12 years lower on average than the national average.
We have the highest rate of drug-related deaths in the whole of England and we are among the top five most dangerous towns. We have the largest child learning gap, the third highest proportion of obesity among adults and the sixth highest teenage pregnancy rate in England. That is quite a list—I hope it illustrates the need for Government support in Blackpool going forward. However, we have very strong communities and a brilliant, thriving voluntary sector, all of whom work with stakeholders—not least Blackpool Council—to try to turn the situation around.
Paul Maynard (Blackpool North and Cleveleys) (Con)
My hon. Friend is setting out a compelling picture of the challenges in Blackpool. Will he join me in praising Business in the Community for the work it has done through Pride of Place to pull together a coherent plan to address the issues he has raised? Will he also join me in urging the Government to reinstate the Cabinet Sub-Committee on Blackpool, which brought together Ministers to address each specific challenge in our town? We need that back now that we have a new Government.
Scott Benton
I agree with both points—not just the Business in the Community aspect but the wider policy ask. Following my hon. Friend’s intervention, it would be remiss of me not to highlight the contributions of not just local groups but big businesses in Blackpool, which employ thousands of people and really do put their money where their mouth is when it comes to regeneration. I particularly want to mention people such as Kate Shane and Amanda Thompson, who need a special thanks in that regard.
Although the challenges are stark in Blackpool, it would be remiss of me not to point out the tremendous support received not only from the Department for Levelling Up, Housing and Communities but from the Government as a whole since I was elected in 2019. With your indulgence, Mrs Murray, I will read out a compelling but lengthy list of the investment that we have received in Blackpool since 2019.
We have one of the largest town deals in the country, worth 39.5 million, which has been spent on a plethora of different projects, from upgrading the illuminations to the new multiversity, with investment and jobs created at the enterprise zone and a new Revoe sports village. Only two weeks ago the Department gave Blackpool £40 million to relocate the court complex, which will allow a £300 million private sector-led development to go ahead. That creates 1,000 new jobs and pumps £75 million into the economy every single year.
Within weeks of my being elected, we received £8.6 million for the future high streets fund, which is being spent on Abingdon Street market and upgrades at the Houndshill centre. The Government are relocating 3,000 civil service jobs to Blackpool, and that will inject an ongoing £1 million into our local town centre. We have also seen £2.9 million to upgrade the winter gardens and £1 million for the high street action zone, which my hon. Friend the Member for Blackpool North and Cleveleys and I saw at first hand only on Friday, and we have received £650,000 for a homes-led regeneration study of housing projects in Blackpool—a point I will touch on later.
In education spending, £10 million has been spent on the opportunity area, and there is £8.7 million of other educational investment over and above the revenue from the direct grant to schools coming into Blackpool. The Blackpool Teaching Hospitals NHS Foundation Trust has had £67 million of its debt written off, which means that money can now be spent on servicing patients rather than servicing a debt, and we have a brand-new £25 million upgrade to A&E occurring at the moment.
On transport, we have £20 million for electric buses, £9 million for bus and light rail projects, and £500,000 for the active travel grant. Project ADDER will receive a £1.9 million investment to tackle antisocial behaviour and serious drug crime in Blackpool, £1.1 million for the youth offending team to help get troubled youngsters off our streets, £550,000 for the safer streets fund, and £400,000 to help to address violence against women and girls—a horrific crime in our community. The Minister will be pleased to hear I am nearly at the end of the list, but I hope he can indulge me slightly longer.
The culture recovery fund saw £4.8 million spent on our brilliant Blackpool Grand Theatre and upgrades to the Blackpool Tower Ballroom, where we saw “Strictly” only last week. There was a bid for £12 million for flood defences on our sea walls. We had £80,000 for the changing places fund, £800,000 for the rough sleeping initiative and £1.7 million for the hardship fund.
There has been £237 million of extra investment in Blackpool since I was elected at the 2019 general election. If we include the support throughout the pandemic, that rises to £409 million of extra Government investment, over and above what we give to the local authority and spend on health and education, since 2019. Yet some people in the community question the Government’s commitment to levelling up and question the funding we have had. I hope those figures illustrate the tremendous support that the Government have given to Blackpool over the past few years.
Of course, Blackpool being Blackpool, as much as we have valued that £237 million investment there is always more that we can do, given the extent of the challenges. I know I have been speaking for a while, but I have two or three quick asks of the Government.
The biggest challenge that Blackpool faces, and the reason we are at the level we are in terms of social characteristics and demography, is the housing issue in Blackpool. The Secretary of State has been a bit of a trailblazer in recognising that. If we can tackle some of the grot-spots and the awful conditions in the private sector rental market, it will invariably improve people’s life chances. That is why the £30 million ask for housing-led regeneration in Blackpool is so important. It would be spent on upgrading Bond Street, Waterloo Road, Revoe and the Claremont area. The Government have already committed to a £600,000 feasibility study on that. Improving people’s housing conditions in those areas would be transformative, not just for the next few years but for generations ahead in Blackpool. I know that the Minister is very much aware of that—I spoke to her about it several days ago—and I look forward to meeting her and the Secretary of State once the feasibility process has been considered and concluded in January.
The Minister will not be surprised to hear that my second ask is Blackpool’s £63 million levelling-up fund. Of the £63 million, £40 million would go to the multiversity, which will invariably and conclusively improve people’s life chances, skills and opportunities to face the challenges of the future in Blackpool; £8 million would go to converting the former post office building on Abingdon Street into a brand new five-star hotel, which would completely regenerate that part of the town centre; and £15 million would go on a town centre access scheme.
Those are the two things on which I and my hon. Friend the Member for Blackpool North and Cleveleys are looking for support. In the last few seconds, it would be remiss of me not to mention two non-Departmental asks. One is upgrading and implementing a passing loop on the South Fylde line, which would double the number of trains that come into Blackpool every single hour. That train line services a pleasure beach—the UK’s second most visited tourist attraction—and the upgrade would improve its ability to get visitors in on busy summer days. The second is returning commercial passenger flights to Blackpool airport, which has been my main campaign since 2019. The Government have a brilliant record to sell on regional aviation. We have halved air passenger duty, we are looking to subsidise public service obligation routes, and we have the Union connectivity review. All of that has changed the landscape of regional aviation in this country, but we need support from Blackpool Council to get Blackpool flying once again. The council owns the airport and has the ability to take commercial passenger flights seriously.
The Minister and Members have indulged me long enough. I thank the Department for the superb support it has provided to our town so far. There is always more we can do—hence the distinct asks of the Minister and the Department—but I look forward to continuing to work with the Minister over the coming weeks to address some of the challenges.
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Felicity Buchan)
May I start by saying what a pleasure it is to serve under your chairmanship for the first time, Mrs Murray? I congratulate my hon. Friend the Member for Blackpool South (Scott Benton) both on securing the debate and, more importantly, on giving such an impassioned speech. It is clear that he is a tremendous representative for Blackpool, as is our hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard)—what a team! I reflect on the numbers that were mentioned: £237 million in additional funding for Blackpool and, including the support under covid, an additional £409 million. That is a record of which both Members of Parliament should be very proud. I must say that I am rather envious.
We are here today to talk about very important matters: the significant challenges and opportunities that Blackpool faces. I am grateful to speak on the Government’s levelling-up agenda, which is our ambition to spread investment, growth and opportunity across the UK to those towns, cities and areas that have been overlooked by successive Governments. As my hon. Friend the Member for Blackpool South rightly points out, Blackpool is a town with significant strengths and potential. There are almost 19 million visitors to Blackpool a year, and the tourism economy is worth more than £1.4 billion. Despite these strengths, we know that for too long Blackpool has been held back by deeply entrenched problems, and my hon. Friend listed many statistics showing the level of deprivation and the issues in health, local housing and living standards.
That is why the Government have been working in partnership with both Members of Parliament for Blackpool on the transformational regeneration of the town, supporting their vision for Blackpool to become a leading UK tourism destination and a good place to live and work, with improved jobs, housing and skills. Today, I am delighted to be able to talk about some of the successes we have seen and what we have achieved, and I will look to address the particular points that my hon. Friends raised.
To that end, I was delighted that earlier this month the Secretary of State for Levelling Up, Housing and Communities, my right hon. Friend the Member for Surrey Heath (Michael Gove), announced £40 million in funding for the relocation of the magistrates and county courts. Anyone familiar with Blackpool knows that the aging, outdated courts complex has persisted for decades. It was not only blighting the town but occupying land that had been earmarked for major commercial redevelopment. I am pleased that, working together with the Ministry of Justice, £40 million of funding is being used to create a new state-of-the-art court elsewhere in the town.
That means the Ministry of Justice can finally leave the outdated courts complex, freeing up the land to be redeveloped and enabling the growth-spurring regeneration scheme to go ahead as planned. That will create up to 1,000 new local jobs, while attracting an estimated 600,000 more visitors to the seaside town each year. What is more, the judicial system and its employees will be much better served by a modern, efficient new courts building.
That is not the only way that the Government are working with Blackpool to bring fresh investment and new job opportunities to the town. As part of our ambition to bring policy makers closer to the communities they serve, the Department for Work and Pensions and Blackpool Council will be constructing a new service hub in the centre of Blackpool. It will be home to up to 3,000 civil servants and only a short walk from Blackpool North station, in an area that is seeing a cluster of new developments, which promise to be transformative for the town.
It is also worth noting, as my hon. Friend the Member for Blackpool South did, that Blackpool is benefiting from just shy of £40 million of investment from our towns fund, which is being spent on a host of job-creating, tourism-boosting projects. As my hon. Friend will know, that includes rejuvenating the illuminations in order to attract more visitors to the town in the autumn and winter period, and support for a youth hub, giving more young people in the town vital access to jobs and training. To cater for businesses that are adopting hybrid models of working in the post-covid economy, the funding will also support the development of flexible managed workspace in Blackpool town centre.
My hon. Friend stressed the importance of housing. As Minister for housing and homelessness, I completely concur with him. I want the same level of ambition for Blackpool’s economy to be mirrored in improving the housing provision. At the moment, too many homes in Blackpool do not provide the safe and secure accommodation that residents expect or deserve. If we are truly to tackle deprivation and unlock Blackpool’s economic potential, we need to provide a wide range of quality homes across the public and private sectors—homes that cater for people at different stages of their lives. That is why, in March, we announced that Homes England, the Government’s housing accelerator, would work closely with the council to develop a transformative plan for reshaping the town, backed by £650,000 of new funding. I am pleased that that work is coming on in leaps and bounds, and my Department looks forward to examining the proposals when they are finished in the new year. Once we have seen them, we will sit down with my hon. Friends the Members for Blackpool South and for Blackpool North and Cleveleys, and I look forward to that conversation; it is clear that there is work to be done on housing in Blackpool.
To ensure that everyone has somewhere safe that they can call a home, we need to tackle rogue landlords both in Blackpool and elsewhere. We plan to do that with our reform of the private rented sector. I know that the Housing Secretary is very committed to that, and I am glad that my Department is already working with our partners to toughen enforcement on the minority of landlords who consistently break the rules.
Alongside our work with Homes England, in Blackpool we have announced £1.26 million of funding for an expanded local enforcement team, which will continue to take tough action against those who are not meeting existing standards, while proactively measuring landlords against the proposed future national standards. This enhanced inspection regime will tackle exploitation in the local private rented sector, driving up housing quality while protecting the most vulnerable. It will sit alongside a series of further pilots in other locations announced last week by the Secretary of State, to test ways of improving enforcement in the sector.
My hon. Friend the Member for Blackpool South talked about education and skills, which are clearly critical in Blackpool. The Government are exploring innovative ways of helping people get into work and build their skills through three pathfinder places, one of which is Blackpool. The idea behind the pathfinders is to bring together local delivery partners in skills and education to look at what skills local employers are looking for and how we most effectively build that skills base locally. This will ensure that the support available to people is more targeted and more relevant.
My hon. Friend asked about the levelling-up fund. I am sure he will appreciate that bids are currently being reviewed and I cannot comment on specific bids, but we will have clarity before the end of the year. I wish him and Blackpool every success with the bid. He talks passionately about it, and I am sure it is a good bid.
My hon. Friend the Member for Blackpool North and Cleveleys asked about the Cabinet Sub-Committee. I want to reassure him that Blackpool will continue to benefit from cross-ministerial deep dive and working together. Blackpool is a big priority of Government.
I finish by thanking everyone for their contributions today, and I thank my hon. Friend the Member for Blackpool South for securing the debate. It is a powerful reminder of how individual MPs can make such a difference to their constituencies, and Blackpool is fortunate to have these two MPs. I keep on coming back to the amount of Government investment that they have secured in their town. While I recognise that there are significant challenges in Blackpool, I believe that if local MPs and central Government work together with key local stakeholders, businesses and the council, we really can make a difference in Blackpool, leverage its unique strengths and restore pride to the town, so we can truly say that Blackpool is being levelled up and that people are proud and happy to work and live there. I commend both my hon. Friends.
Question put and agreed to.
Disposable Vapes: Environmental Impact
(2 years ago)
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Kirsten Oswald (East Renfrewshire) (SNP)
I beg to move,
That this House has considered the environmental impact of disposable vapes.
It is a pleasure to serve under your chairship, Mrs Murray, and I am pleased to bring the debate to this chamber. I am here because of a conversation with a young woman called Laura Young. She is a former constituent who recently moved away to study, but I am glad I have kept in touch with her on environmental matters, including this one. Laura is what I would describe as a climate influencer. I am not sure whether that is how she would describe herself, but to me that is a good explanation of what she does. She is a very well informed, influential young woman who is making a measurable difference to our environment. I am glad to work with her on this issue and I am interested in what she is doing more broadly.
Laura explained to me that she had increasingly been finding cast-off disposable vapes when she was out and about. That could be in town centres, when she was walking her dog in Rouken Glen park or wherever she was. As she mentioned this to other people, they reported that they could not believe how many of these cast-off disposable vapes were in their areas, whether urban, rural or coastal. The issue is everywhere and has arrived at speed.
These vaping products can last in the environment for many years, so it is important that we ensure that they are disposed of correctly, rather than thinking that it is fine to leave them on our pavements, in our parks or on our seafronts. The products are made from three key parts: the battery, the pod and the coil. In theory, consumers should dispose of them at household recycling centres or at the shop where they bought the device. That is simply not what happens, and it is not realistic. Who expects people to arrive at their local recycling centre with their finished vapes? Many people are simply unaware of what is meant to happen. It is clear that there is a significant issue that we should deal with. A recent study suggests that more than half are just thrown in the bin.
Because of the conversations that I have had with Laura, I am one of those people who spots these vapes. Wherever I go, I see them lying around on the ground. It is clear that a big chunk of those that do not end up in the bin are just thrown away on the ground. I have spoken to others who agree that once they have become aware of vapes, it is impossible not to see them. I see them in my constituency, in London and everywhere else. The proliferation of this new kind of waste is quickly becoming a reality and a concern.
This is a new thing. To illustrate the changing profile, I understand that Keep Scotland Beautiful and the Marine Conservation Society have this year added the category of disposable vapes to the list of litter that people collect from beaches when they do beach cleans. I have heard of a waste display, which is part of an installation at the V&A in Dundee. It involves waste from beaches, including Carnoustie beach. I basically grew up on that beach, so it feels quite close to home for me. The big display of waste that has been collected by local children shows the sheer number of disposable vapes that are now being found on the seafront, as well as in the other places I have spoken about.
The situation is developing and moving apace. Figures suggest that the number of people vaping in Britain has reached 4.3 million—a record level. It seems that 8.3% of adults in England, Wales and Scotland vape, up from 1.7% a decade ago. According to research by Material Focus, at least 1.3 million disposable vapes are thrown away every week. That is two every second—a huge number. An estimated 13.6 million disposable vapes are bought in Scotland annually.
Given those really big numbers, it matters on a whole host of fronts that we stop to have a serious think about this and a serious discussion about what it means. First, on health—I want to get this issue out of the way right at the beginning—I absolutely support any and all efforts that people are making to stop smoking. It is really important that they are supported and are able to sustain a move away from smoking. I realise that vapes are not part of NHS-supported smoking cessation programmes, but many people use them as part of that journey, and I wish them all the best in their endeavours to stop smoking.
I know it is very hard to stop smoking. I am not an expert on that, but ASH—Action on Smoking and Health—is, and it has been clear about several issues in this area. It has pointed towards a range of things that we should be thinking about, including the reality that the production of disposable vapes is a commercial endeavour and that promoting novel products is one clear way that the tobacco industry is reaching out to future generations of potential consumers. It also points out that young people who try vapes are at a much higher risk of nicotine addiction and of later using tobacco. That is a prospect that we all want our children to avoid, knowing that smoking is the direct cause of 16% of all deaths in Scotland. ASH also notes that the World Health Organisation has expressed concern that children who use these products are up to three times more likely to use tobacco products in the future.
Understandably, ASH welcomes the recent publication of the Scottish Government’s consultation on tightening rules on advertising and promoting vaping products as an important step towards protecting the health of children, young people and non-smoking adults in Scotland, and it notes the importance of further action on restricting advertising. That is important, because a survey by YouGov and ASH found that the percentage of children who had tried vaping had risen to 16% by 2022. In August, “STV News” revealed that hundreds of vapes have been confiscated from high school pupils in recent years.
The vaping market as a whole in the UK is worth more than £1 billion a year, and more than half of children who vape say that disposables are their preferred product. The most popular brand is the Chinese product Elf Bar. In July, an investigation by The Observer found Elf Bar flouting rules to promote its products to young people in Britain—for instance, via TikTok influencers. Despite the fact that legally a person has to be over 18 to purchase these products, the reality is that they are easy to get hold of, attractive and brightly coloured, and they have fruity flavours. They are designed to be attractive in a way that young people will be interested in.
Gareth Johnson (Dartford) (Con)
I congratulate the hon. Lady on securing this debate. There is no doubt that this is an issue, but vaping has saved thousands of lives in this country. The more we can encourage smokers to move from tobacco on to vaping, the more lives will be saved. I would like to impress on the hon. Lady how important it is in a debate such as this that we do not tarnish the reputation of vaping to the point where we put off smokers from switching over to it, which has to be a positive thing.
Kirsten Oswald
I am grateful to the hon. Gentleman for making that point, because it reinforces one of my earlier points. I absolutely support any and all attempts to stop smoking, and all supports that assist people. That is really important. We all know the harm that tobacco does, but I point the hon. Gentleman to the comments I have cited from bodies such as the World Health Organisation, which has concerns about the road to tobacco.
We need a nuanced approach. For instance, I would be interested in having a further conversation and seeing more research on vapes that are not disposable. I think that is a conversation worth having. I am not here to say that no one should ever use vapes; that is absolutely not my aim. My aim is to look specifically at disposable vapes and ask whether we are travelling down the right path.
We have heard about the number of young people who are vaping and the concerns about the move to tobacco, which the hon. Gentleman and I are both very concerned about because of the health implications. Are we really expecting the same young people to have a disposable vape, use it and then get themselves to a recycling centre, so that they can properly dispose of them? To me, that seems somewhat unlikely, to say the least. It is really important that we try to separate the two issues, because they are both really important, and all discussions about smoking cessation should be serious and taken seriously.
In addition to the disposal of such vapes, which I will come to a little later, we should obviously be concerned by their acquisition and use in the first place. I am really concerned and perplexed—this is perhaps a sign of my age—by reports of younger people who have never smoked but are now vaping. I just do not understand that, because I am not a young person, but I suspect that the hon. Gentleman and I would agree that this is not the direction of travel that we want to see. We want people to stop smoking, to be supported to do that, and not to move in a different direction.
As I said, I am not here today to take issue with vaping per se. I would like to see more research into the topic as a whole, but I am suggesting that having far fewer disposable vapes is going to be an immediate necessity, because of the damaging waste that is being created by the use of these devices. Reusable vapes might fill some of the gaps, should that be necessary, but I am really concerned about the environmental impact of the disposable vape industry, and there is a bit of a vacuum where there should be scrutiny on that topic. Regardless of our various views on the issue, we would probably all accept that having a bit of scrutiny would be sensible.
I recently used a written parliamentary question to ask the Secretary of State for the Environment, Food and Rural Affairs what assessment had been made of the environmental impact of vaping products. The answer was none—no environmental assessment at all. Nobody who has seen the sheer quantity of cast-off disposable vapes will think that is acceptable. I do not think that is okay, and we need to up our game quickly. Disposable vapes are fundamentally electrical items, and they contain precious metals such as lithium. We should know in this day and age that lithium is a critical material for our green transition, but it is simply going to waste in devices that are not being disposed of properly.
Disposable vapes are also another unnecessary single use of plastic, which is a material that, along with the batteries and the nicotine that disposable vapes contain, is hazardous to the environment and wildlife when littered. I have heard numerous reports of pets and wildlife in marine areas being affected by this new type of plastic waste. According to the Scottish Environment Protection Agency, if a battery is disposed of incorrectly—remember that almost all of them are disposed of incorrectly—heavy metals might leak into the ground when the battery casing corrodes. That can cause soil and water pollution, and it can endanger wildlife and human health. Again, most of the vapes are disposed of incorrectly, so this is not a theoretical issue.
I am grateful to the UK Vaping Industry Association for getting in touch with me when it learned that I had secured this debate, and it made some valid points about how some people successfully stop smoking via vaping, as we have heard, and I do not take away from that in any way. However, I was a bit disappointed by the argument that under-age concerns are not exclusive to vapes. I agree with that—it is absolutely true—but I do not think that is really the point, and it cannot be the case that we cannot look for urgent action because it could put people off stopping smoking. It cannot be beyond us both to support smoking cessation in a practical and meaningful way, and to stop making such a colossal mess of the planet.
In all of this, there must be a really important role for manufacturers, and the industry as a whole, in pushing forward better ways to operate. They do not need to wait for someone to make them do the right thing; they could do the right thing and do better right now, and I am sure we would all be very grateful. I was surprised to hear comments from the vape manufacturer Riot on a recent BBC Radio 5 Live show. When pressed about the actual rate of recycling of its products, its representative said that it was in fractions of 1%. I absolutely respect the company for taking the time to engage with this discussion, which is really important, but that tiny wee recycling rate is the reality.
That is the crux of the problem, why we are having the debate and why we are seeing all these things lying around. People are simply not recycling them because it is too hard, because they do not know how, and because the things are not ideally set up to be recycled. We have to be realistic about that. We just about need a degree in vape decommissioning to work out what to do, where to go and how to go about it. Dealing properly with what are meant to be disposable items of convenience—that is their unique selling point—is actually a monumental inconvenience to their users. Manufacturers know that, but they seem much more interested in making sales than stopping the obvious waste issues that arise from them.
To get an idea of what we are talking about, at the moment the discarded disposables mean that 10 tonnes of lithium are sent to landfill every year. We must remember that this is a growing market and that those are only the bits that are being sent to landfill, not the bits that are being thrown around the place. That is already at a level equivalent to the lithium batteries inside 1,200 electric vehicles.
Concerns are also growing about what that means more broadly. Some people suggest that the material is likely to contribute to fires at landfill sites, so a range of investigations needs to take place. Indeed, it is no wonder that 18 groups that advocate on environmental and health issues recently wrote an open letter to the UK Government, published by Green Alliance, looking for a ban on disposable vapes. I am grateful to all the organisations, which include Surfers Against Sewage, the Royal College of Paediatrics and Child Health, the Royal Society for the Prevention of Cruelty to Animals, Wildlife and Countryside Link and others. It is really important that we look at the matter. We need to very seriously take on board the points those organisations make about the importance of not squandering our precious resources, such as lithium, in such a cavalier and unthinking way.
The organisations are also correct that there is “a huge waste issue” associated with disposable vapes. In Scotland, we are moving towards a circular economy and a waste-free society. We have ambitious targets for recycling, but as part of that, specific guidance on how to recycle vapes is increasingly vital. What will the UK Government do to make the whole process easier? I know that the Department for Environment, Food and Rural Affairs says that the UK Government will set out plans for reforming the existing waste electrical and electronic equipment regulations “in due course”. “In due course” needs to come now, because there is a clear and significant environmental impact, there is uncertainty and confusion, and that allows concerted inaction on the issue to take root. What are the UK Government doing to help be part of and drive forward the conversation on how vaping markets are targeting our young people? How are we going to act on plastic waste and pollution and on the failure of any proper recycling strategy for lithium batteries?
Failure to act means we are knowingly causing damage to our environment. It means that precious resources, such as lithium, which are finite and dangerous when disposed of improperly are not being properly managed. The situation has arrived at pace; it has all come upon us quite quickly. However, we need to deal with it in the same way. We need to get a move on and try and work out the best way forward for the planet and the people who use vapes. We either sort the situation out so disposable vapes are really disposable, with proper recycling not only theoretically possible but practically happening, or we get rid of them altogether. None of us can afford for things to carry on as they are.
Gareth Johnson (Dartford) (Con)
I did not intend to speak so I apologise, Mrs Murray, for catching you unawares and for not informing the hon. Member for East Renfrewshire (Kirsten Oswald) that I was going to speak. I found her speech fascinating, so I did not want to continuously interrupt it with endless interventions. I do not agree with all her points, but she highlights a general issue with littering and plastic wastage, with everything from pens to phones and so on getting irresponsibly dumped, that then ends up causing pollution. I accept that there is an additional issue with the lithium batteries in vapes and how we deal with that.
Although I do not claim to be an expert in vaping, I argue it is a positive thing to move people away from smoking tobacco and over to vaping. The organisations the hon. Lady mentioned, such as ASH, the British Heart Foundation and Asthma + Lung UK, have all said that it is 95% risk free. That has to be a good thing. Moving people away from tobacco and giving them the option of vaping is a really positive thing that the Government could embrace more than it has previously. We are not bad in this country at promoting vaping, compared with many other countries where, ridiculously, it has been banned. I was slightly concerned by the comment, which the hon. Lady made at the end of her speech, that we should perhaps get rid of some disposable vaping devices. I would wholeheartedly oppose that because, although there is an issue with the disposal of these disposable vaping devices, to put people off vaping and maybe encourage them to go back to smoking would be a retrograde step.
I remember that when I was at school there were children who opted for tobacco, and cigarettes were common when I was growing up in the 1980s. I was one of the smokers behind the bike sheds myself. Although we do not want any children under the age of 18 vaping and we do not want non-smokers vaping, there will always be a forbidden fruit, unfortunately, when it comes to children. If you could have tobacco or vaping as that forbidden fruit, which would you prefer? You would prefer to have neither and I accept that, but vaping is 95% risk free. That is far better than when I was a child in the 1980s and so many children chose to smoke.
Kirsten Oswald
Thinking back to the 1980s—the hon. Gentleman and I must be of a similar vintage—I absolutely recognise what he is saying but I would point him back to what I said earlier about the WHO’s concerns about vaping being a gateway to tobacco for young people. I am taking this from a briefing from ASH so, to reiterate, I absolutely support any and all means of supporting people to stop smoking, but it cannot be that it is only one or the other thing with all the personal and environmental issues that this causes.
Gareth Johnson
I take her point. I do not have the statistics in front of me, but what I have seen suggests that there is not a great deal of evidence that people go from vaping on to smoking, whereas there is substantial evidence that people go from smoking on to vaping. Vaping is a far more successful way of giving up smoking that the likes of patches and chewing gum. Therefore, from a health perspective, the Government should be encouraging and promoting smokers to move on to vaping because there is far less risk associated with it.
I will draw my comments to a conclusion there. I was not intending to speak at all, but what I do not want to come out of this debate is some kind of demonisation of vaping. I know that is not the hon. Lady’s intention, but I feel that we should be recognising that vaping has its place—a very valuable place—in ensuring that we reduce the number of people dying around the world from tobacco consumption, which we all know is ridiculously dangerous for your health. Vaping has a substantially reduced risk for individuals and therefore we should embrace it. Although there certainly are improvements to be made and I am grateful that the hon. Lady has highlighted those, we should see vaping as a positive thing to help people give up smoking tobacco.
John Mc Nally (Falkirk) (SNP)
It is always a pleasure to serve under your chairmanship, Mrs Murray. I, too, congratulate my hon. Friend the Member for East Renfrewshire (Kirsten Oswald) on securing the debate and on raising the issue of the impact of disposable vapes on the environment, which I want to speak about today. As the hon. Member for Dartford (Gareth Johnson) mentioned, there are other issues and concerns with vapes, such as those on smoking, but I want to address their environmental impact.
Vapes are cheap and accessible to young people and they cause significant waste problems in the environment. Coloured vapes have now become a fashion accessory for many of our youth. As chair of the all-party parliamentary group for ethics and sustainability in fashion—believe it or not—I have heard at first hand that people are now matching their clothes with their vapes. We may not have considered such issues, but it means vapes are just left lying about everywhere.
First, I want to repeat what my hon. Friend the Member for East Renfrewshire said. I know that the Scottish Government are aiming to reach a zero-waste society. With the circular economy, we have a target of recycling 70% of waste by 2025, exceeding EU targets, and matching EU targets for all plastic packaging to be economically recyclable or reusable by 2030. Scotland is also a signatory to the Ellen MacArthur Foundation’s New Plastics Economy global commitment.
Cheap and easy-to-use disposable vapes are booming in popularity and creating a mass waste issue similar to the nurdles we all encountered and now have to deal with. Those vape waste products have now added even more to the national embarrassment of litter on our streets and cycle and canal path networks. They are even being found on mountain paths and forest trails, so people who walk in those places will start to see those things lying about in areas where they would go for their natural weekend away. If they go somewhere to relax, and come across those things, they will get more and more anxious about seeing them lying about.
All of this, in my opinion is, pitiful. Dropping litter is avoidable. In particular, it costs needless amounts of money to collect and clear up the debris from these vape pens and many other single-use products that we just discard. In fact, I might add—I put my right hand up to God and say this with all truthfulness—that when crossing a car park at night I can find my way in the dark now by following the path of the blue lights coming from the vapes. That is a stark reality. As my hon. Friend the Member for East Renfrewshire mentioned earlier, they are becoming visible everywhere. It is worth reiterating the stark figures that my hon. Friend mentioned: 1.3 disposable vapes are thrown away every week, equating to two vapes per second, and, as she has just said, an estimated 13.6 million disposable vapes are bought in Scotland annually. Those are scary statistics to hear.
I ask the Minister to speak with, or, indeed, whether she has spoken with, some of the relevant authorities—the devolved Parliaments, local authorities, regional Mayors, courts, judges and police—to ask if they could agree on a more meaningful deterrent. We could introduce something like an automatic three points on the driving licence of anyone who discards any of those products. I tried to introduce a measure into Parliament on that some years ago, and an awful lot of people congratulated me on the idea, but it did not actually go anywhere—I think we might have had an election in between.
We all recognise that vapes, and all the other disposable products, are causing a lot of damage to our fauna and flora, and that that is seeping into the whole food supply chain. As my hon. Friend said, it is now causing toxic waste to seep into everything around us. It is impacting the already perilous environment in which we live.
Furthermore, ASH Scotland has called for a tightening of vape ads and promotion, following its consultation report. The Association of Directors of Public Health has also called for tighter regulation to ban brightly coloured packaging and for a review of flavours likely to appeal to children. The “e” part of e-cigarettes—more specifically, the battery—is using up valuable minerals, the mining of which has led to water loss, ground destabilisation, biodiversity loss, increased salinity in our rivers, contaminated soil and toxic waste.
This place has the power to change the weaknesses in the law that allow those pitiful practices to continue. Members have made excellent points in their speeches, but I humbly suggest that serious action is needed to hasten a behavioural change to benefit our health, wealth, and wellbeing. That might mean points on driving licences, or that we change the way we advertise these products and tighten up the ads, but whatever we have to do, the Government must take action before it becomes too late, once again. I am very keen to hear from the Minister on the action she is taking to address the issue.
Ruth Jones (Newport West) (Lab)
It is a pleasure to serve under your chairmanship, Mrs Murray, and it is good to be in Westminster Hall with colleagues for this important debate. I acknowledge the hon. Member for East Renfrewshire (Kirsten Oswald) for securing the debate and providing Members from all parties with the opportunity to address our collective responsibility to preserve our planet, protect our environment and leave a world for the next generation.
I gently suggest to the hon. Member for Dartford (Gareth Johnson) that he may be on the wrong tack, as new evidence is revealing that vaping is encouraging young people to get into smoking, rather than the other way around. However, before you remind me to do so, Mrs Murray, I will return to the topic in hand of the environmental impact of vapes.
We have heard today about the scourge of waste in our communities increasingly being caused by disposable vapes. We need and expect our Ministers in DEFRA to stand up and be counted. They need to give councils the resources they need to keep our communities clean and safe and I encourage Members to continue to raise this issue in seeking help, change and assistance. I assure them that Labour will act when we form the next Government if Tory Ministers fail to deliver in the coming months.
Thanks to a lost decade of Tory austerity, waste is piling up on high streets and street corners and in our green open spaces. It is being exported to some of the world’s poorest countries, where what was supposed to be recycled material ends up in landfill, polluting our oceans and being shipped back to Britain for us to deal with. That is a very real problem and it requires speedy, comprehensive and properly funded solutions.
Without question, the problems have been made worse by the increasing use of disposable vapes. Members from all parties will know, as I know the Minister does, that many of the agencies that should tackle waste and pollution are underfunded and understaffed. The Environment Agency has struggled to tackle waste crime and to monitor waste exports because of the cuts to its budget and staff numbers, and we all know the impact that austerity has had on local government.
I thank the Wildlife and Countryside Link for its very helpful briefing ahead of the debate, in which it notes that the use of vapes has surged over recent years. Those items are now ubiquitous; they are for sale on every high street and are used by millions on a daily basis. As we have already heard, they are now increasingly to be found littering the natural environment.
Research suggests that half a billion vapes are now purchased every year, with almost a fifth of UK adults having bought a vape that is either single use, rechargeable or rechargeable with a single-use chamber. Further research by Material Focus has found that 37% of people who purchased vapes in the last year bought a disposable vape, and that figure rises to 52% for 18 to 34-year-olds. Wildlife and Countryside Link says that researchers have found that since 2021 there has been more than a sevenfold increase in the proportion of 11 to 17-year-olds in the UK who use disposable vapes.
Material Focus goes on to claim that at least 1.3 million disposable vapes are thrown away every week, which equates, as we have already heard, to two vapes being thrown away every second. Around 1 million of those disposable vapes are not recycled. That is unsustainable and requires action from Ministers. I would be grateful if the Minister could outline, in precise terms, what is being done to tackle the issue.
Last week, the Chair of the Environmental Audit Committee, the right hon. Member for Ludlow (Philip Dunne), agreed with the claim that there is a risk that delay will become the default culture in DEFRA. He highlighted that the targets in the Environment Act 2021 for extended producer responsibility for textiles, fishing gear and packaging, and the deposit return scheme in England are all behind schedule. Furthermore, last week also marked a year of inaction since the Government opened consultations on bans on plastic plates and cutlery, alongside a call for evidence on a wider suite of items that could be restricted, including action on tobacco filters. There is much more to do.
The Minister will know that in England the total volume of aggregate waste increased by 12% between 2010 and 2018. Recycling must outpace the growth in consumption; it really is a simple equation. Despite the new powers on waste targets in the Environment Act 2021, I am afraid that I must remind the House that the Government have delayed the roll-out of important elements of extended producer responsibility, including the scheme administrators and fee modulation.
Actual delivery is running far behind even the relatively modest new proposed targets to reduce residual waste per capita by 50% by 2042 and to raise the current municipal recycling target of 65% by 2035 to between 70% and 75% by 2042. The inadequacies of waste collection and recycling systems mean that used compostable packaging tends to end up in landfill or incineration, or messes up recycling plants.
I do not want to irritate the Minister, but I want to talk about the Welsh Labour Government, because Wales has long been a standout performer in the United Kingdom on recycling rates and tackling waste pollution. The Welsh Labour Government’s £1 billion investment in household recycling since devolution has helped recycling rates to catapult from just 4.8% in 1998 to over 65% in 2021. If the hon. Member for East Renfrewshire has come to the Chamber today hoping to find solutions to tackling vaping waste in her constituency, I urge her to look to Wales. Like her, I asked the Secretary of State whether he had made an assessment of the impact of single-use vapes on waste levels in England. I received the following response from the Minister, which said:
“The Department has not undertaken an assessment of the environmental impact of disposable vapes in the UK, including on waste levels.”
I gently say to her that that is a disappointing response.
As the Minister winds up, I hope that I can get some answers to the following questions. Has she made an assessment of the environmental impact of disposable vapes in the UK, including on waste levels, since 24 October? What discussions have taken place with the Treasury and the Secretary of State for Housing, Communities and Local Government about ensuring that councils have the resources needed to tackle waste pollution? Finally, what lessons have been picked up from the Welsh Labour and Scottish and Northern Irish Governments about their approach to tackling toxic waste, fly-tipping and waste pollution? I would be happy for the Minister to respond to me in writing, but I ask her for answers to those specific questions. This has been an interesting debate, and I am grateful to the hon. Member for East Renfrewshire for securing it.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Rebecca Pow)
It is a delight to see you in the Chair this afternoon, Mrs Murray. I thank the hon. Member for East Renfrewshire (Kirsten Oswald) for bringing the important matter of disposable vapes to our attention, and thank other Members who have taken part in the debate. This area has probably not been covered in Parliament so far and is, as has been said, a new and growing concern for the environment. I was particularly saddened to hear the comments about disposable vapes turning up on beaches; that was backed up by the hon. Member for Falkirk (John Mc Nally), who remembered the plastic nurdles that we talked about when we were both on the Environmental Audit Committee. It is terrible to think that this may be similar.
I took a puff of a disposable vape in preparation for the debate. I am not a smoker at all, and it caused a huge amount of coughing and spluttering—it was raspberry flavoured. I cannot say that it is something that I will take to, but it was important to have a look at some of them and try one.
Before I carry on and tackle the environmental issues, I will touch on the health issue so clearly outlined by my hon. Friend the Member for Dartford (Gareth Johnson). The Government are absolutely committed to making this country smoke-free by 2030, doing more to help adult smokers to quit and to stop people taking up this deadly addiction. We also note that most smokers want to quit, and there is a call to offer vaping as a substitute for smoking. We recognise that vaping is far less harmful than smoking and is an effective device for quitting. One of my officials, briefing me for the debate, shared his experience. He said that he had been a smoker for a lot of his life, starting as a young person, and how useful vapes actually were in transitioning off dangerous nicotine cigarettes. Our recently published “Nicotine vaping in England” report set out the most up-to-date evidence on vapes, providing an even more compelling case for supporting smokers to switch. Our message is clear: if the choice is between smoking and vaping, as pointed out by my hon. Friend the Member for Dartford, choose vaping. Obviously, if the choice is between vaping and fresh air, please choose fresh air.
The Government have two priorities for vaping, which are to maximise the opportunity to help smokers to quit while minimising the uptake by children, because the stats that we have heard on the number of children using vapes are shocking. It is the disposable ones, of course, which they are attracted by. The hon. Member for East Renfrewshire mentioned the Geek Bar and Elf Bar in particular. They get hooked on those products, which do not come under our waste electrical and electronic equipment register because the companies that produce these brands have not registered as WEEE producers for this compliance year. That is definitely something that the Environment Agency is working on. I will touch more on how we are getting those who import these vapes, many of which are made in China, to pay to join our producer compliance scheme, so that they are part of the collection and recycling scheme. That very much needs attention.
While the public health impacts of vaping as an aid to quit smoking are clear, I share the concerns we have heard today about the environmental impacts of these products, especially of disposable vapes. I welcome the recent report by Material Focus because it shone an important light on some of the environmental concerns that have arisen about the improper disposal of disposable vape products.
According to that study, around 1.3 million disposable vapes are thrown away every week in the UK. We have heard quite a lot of stats, but that is pretty shocking. More than half a billion of all the different types of vapes are bought each month, by 6.4% of the population. It is a huge and growing market. A significant amount of the disposable vapes that are thrown away each week are not being recycled properly and are instead being littered or discarded with residual waste in the bin.
That waste includes a lot of single-use plastics, although there are also refillable vapes, and they contain critical resources. Lithium is one of the most valuable. That lithium is literally going to waste; the single-use vapes being thrown away contain 10 tonnes of lithium per year, the equivalent of 1,200 electric car batteries. That is a huge amount of a critical material that is being thrown away.
The findings of the Material Focus report highlight the importance of ensuring that the vaping sector, its products and those that sell them are fully compliant with the obligations set out under key pieces of waste management legislation, which my Department has responsibility for. I would like to remind Members exactly what those obligations are and what my Department is already doing to assist the vaping sector with understanding those obligations and, most importantly, to increase compliance with them.
All vapes, including disposable vapes, fall within scope of the UK’s waste electrical and electronic equipment regulations, referred to as the WEEE regulations. Although waste policy is devolved, I welcome the extremely close working on the suite of producer responsibility legislation, particularly that which covers waste electricals, between the devolved nations, including Wales, where the shadow Minister, the hon. Member for Newport West (Ruth Jones), resides. DEFRA is working very closely on the issue.
The WEEE regulations require importers and manufacturers of vapes and other electrical equipment to finance the cost of collection and the proper treatment of all equipment that is disposed of via local authority household waste sites and returned to retailers and internet sellers. Producers do that via membership of approved producer compliance schemes. They must be registered with the Environment Agency in England or their partners in the devolved Administrations. I know that a number of producers of vapes are registered, but clearly a great many are not, including Geek Bar and Elf Bar, which I already mentioned.
Retailers and internet sellers of vapes also have important obligations under the WEEE regulations to take back used vapes on supply of new vapes to their customers. In addition, they must also make available information to their customers about how to recycle vapes. Smaller retailers—say, a corner shop that sells all sorts of things and just a few vapes—can opt out of the take-back obligations if they pay into a scheme that supports local authority electricals recycling. Of course, those obligations are not different from those that apply to other electrical products.
Kirsten Oswald
The Minister makes a number of factual points about the regulations and how they apply equally to vapes and to other types of electrical equipment, but the very nature of disposable vapes is so different from that of any other kind of electrical equipment. That is the crux: they are made to be disposable and to be thrown away. The problem is that people throw them away. I am keen to hear from the Minister what will be done, and what assessment will be made, so that we can take some action to stop the environmental harm.
Rebecca Pow
I get the hon. Member’s point, but I was trying to make the point that there are a lot of regulations and obligations in place, so we need to ensure that those work effectively before going on to see what more needs to be done. I will touch on that in a minute.
For example, there are also separate obligations under the Waste Batteries and Accumulators Regulations 2009 that are relevant to the batteries contained in vapes. Businesses selling vapes should be registered as battery producers because, as well as vapes, they are putting the batteries in the vapes on the market. My hon. Friend the Member for Dartford effectively asked that we not have a ban on disposable vapes because we need to consider the health aspects of this issue. The Government do not have any immediate plans to ban disposable vapes, but we are concerned by the increasing number of these products and their improper disposal. The primary focus of this debate is the environment, and we need to work constructively with the sector to help businesses understand their obligations and bring them into compliance.
I can report today that my officials have held discussions in recent weeks with the vaping sector to ensure that the sector understands and communicates its members’ obligations in relation to the WEEE regulations, as well as their similar obligations in relation to batteries. Those discussions on regulatory matters will continue with all those working in the vaping sector, and will of course be in accordance with the UK’s commitment to article 5.3 of the World Health Organisation’s framework convention on tobacco control.
My Department has already engaged with the Environment Agency and the Office for Product Safety and Standards, which is the enforcer of the retail take-back obligation. They are putting together a programme to drive up compliance, and are looking at what more can be done. They regulate the producer obligations in England and the UK-wide distributor obligations laid down in the WEEE regulations, and we are working with them on this emerging sector. It is an emerging sector, which is one of the issues: it is growing so fast, like Topsy. I can also report that, as we meet, representatives of the WEEE producer compliance schemes are meeting and discussing what they can do as a sector to proactively encourage producers of all types of vapes to fully meet their obligations under the regulations. We will support their active engagement in any way that we can.
I hope that Members will acknowledge my Department’s efforts so far. It may be that we must continue to strive to ensure compliance with existing environmental obligations before jumping to an outright ban, or anything as dramatic as that. I can also report that we are reviewing the current producer responsibility system for waste electricals and batteries, and plan to publish consultations on both areas next year—I think that the shadow Minister, the hon. Member for Newport West, touched on that. The WEEE regulations were developed when the vaping industry was in its infancy, so it is right that, in undertaking that review, we consider what, if any, changes are needed to that legislation to ensure that the vaping sector plays its part in properly financing the cost of the collection and treatment of the products when they become waste. More generally, the reviews are exploring ways in which we can make it easier for the public to dispose of their unwanted electrical items—including vapes—and how future regulations can better support the circular economy, which all of our waste and resources measures are driving. We have heard a lot about Scotland, but England is equally doing a great deal in this sector, so that we can have a level playing field between the businesses supplying electricals to customers via online sales and those that use more traditional sales and distribution channels. We are also considering similar measures under a parallel review of the UK’s battery regulations.
Littering was touched on; I mention it because disposal vapes are contributing to litter. They get thrown around in our beautiful countryside. Local councils are responsible for keeping their public land clear of litter and refuse, and the role of central Government is to enable and support that work. DEFRA published a litter strategy for England in April 2017, setting out how to deliver a substantial reduction in litter and littering within a generation by focusing on education and awareness, improving enforcement and so forth. It goes to show that all those things are relevant to vapes as well as cigarette filters, which are the most littered item. The tobacco industry is working hard on how to reduce that. Potentially, companies that make vapes should be brought into that thinking as well.
In conclusion, there is an obvious consensus that disposable vapes—and what they may break down into—represent a genuine threat and risk to our environment. I have set out the measures that my Department is already taking to increase the vaping sector’s engagement with the existing environmental legislation. I also have signalled our intention to consider any necessary changes to the WEEE regulations in their forthcoming review to ensure that the vaping sector properly meets its obligations to finance the cost of collection and proper treatment of waste from vape products.
Question put and agreed to.
Resolved,
That this House has considered the environmental impact of disposable vapes.
Written Statements
Serious Fraud Office's Handling of the Unaoil Case: Independent Review
(2 years ago)
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The Attorney General (Victoria Prentis)
Following the Court of Appeal’s judgment in the Unaoil case, R v. Akle & Anor, in December 2021, the then Attorney General, the right hon. and learned Member for Fareham (Suella Braverman), commissioned Sir David Calvert-Smith to conduct an independent review into the Serious Fraud Office’s handling of the case.
On 21 July 2022, in a written ministerial statement, the then Attorney General provided Parliament with the findings of Sir David’s review and a response to his recommendations. This also included a commitment to update Parliament on progress in delivering these recommendations in both November 2022 and February 2023. This WMS provides the first of these updates.
Sir David’s review made 11 recommendations, which were accepted. These cover a range of matters, including record keeping and case assurance, compliance with policies, and resourcing. While many of the changes recommended by Sir David can be—and have been—made quickly, it will necessarily take longer to fully embed his recommendations and assess the effectiveness of changes made.
Within this context, I am pleased to report that significant progress has been made in delivering Sir David’s recommendations. For nine of the 11 recommendations, the SFO has already implemented specific measures or steps to ensure their effective delivery. For the two remaining recommendations, work has commenced to make changes in response to Sir David’s proposals.
A detailed update on progress will be published on www.gov.uk today and copies will be placed in the Libraries of both Houses.
I would also like to take this opportunity to notify Parliament of a change to the timing of the second update on Sir David’s recommendations. This was originally planned for February 2023 but will now be provided by no later than May 2023. This is to allow the findings of an inspection of the SFO by His Majesty’s Crown Prosecution Service Inspectorate to be considered as part of the update. The inspection, a report of which will be published in April 2023, is examining case progression in the SFO with reference to relevant findings in Sir David’s review.
[HCWS395]
Energy Security
(2 years ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Grant Shapps)
It will not be news to hon. Members that in the past year, Putin’s barbaric invasion of Ukraine has sent energy prices soaring.
Without this Government’s support, it would have sent thermostats sinking this winter, too. We have taken decisive action to keep homes, businesses, hospitals, and schools warm this winter. But if we are to avoid foisting this crisis on to future generations, we must think about the years to come, too.
This Government are investing now in a long-term plan, deploying transformative technologies to secure a cheaper, cleaner, reliable supply of energy for Britain and laying firm foundations for growth.
We are one of the biggest economies in the world, but for far too long our energy dependency has threatened to make us vulnerable, when the price of our energy is dictated by the whims of international energy markets.
To put a stop to this situation, we are securing our energy sovereignty.
We are building an energy system fit for the future, by delivering low-carbon energy and greater energy efficiency. We will continue working with our allies, whilst reducing the impact of international energy markets on our energy system.
By developing our world-leading renewables and investing in new nuclear, we will generate home-grown British energy for British families and businesses, boosting British jobs and British growth even as we transition to net zero.
Energy sovereignty is within our grasp. Clean, affordable energy for households and businesses is not a pipe dream, but a project we have now embarked on. Today I am setting out the steps we are taking on our path to energy freedom, delivering opportunity, security, and prosperity for all.
Investing in nuclear power
Nuclear power will be at the core of our threefold mission: to secure our energy supply; to supercharge growth; and to cut our carbon emissions. Today, it was announced that we have delivered on our commitments in the autumn statement, and that the Government will progress Sizewell C.
Our investment, the first made directly by a Government in nuclear power for 30 years, will drive forward the project’s development, and confirm the Government as a project shareholder. Next year, the Government, EDF, and the project company will work together to raise private capital under our new regulated asset base funding model for nuclear.
This is a truly significant moment, and our biggest step so far towards increasing our energy independence. Sizewell C will create 10,000 highly skilled jobs for the area and provide cleaner, cheaper, low-carbon electricity for the equivalent of 6 million homes for over 50 years.
Great British Nuclear
We remain committed to developing a pipeline of new nuclear projects beyond Sizewell C, where these offer clear value for money for taxpayers and consumers. We have been working at pace on the scoping and set up of Great British Nuclear, with the support of industry, and we will make an announcement on the set up of GBN early in the new year.
GBN will be tasked with helping projects through every stage of the development process and developing a resilient pipeline of new builds. We will back it with funding to support projects to get investment ready and through the construction phase, while recognising the challenging fiscal environment outlined by the Chancellor at the autumn statement.
GBN will enable the delivery of clean, safe electricity over the decades to come, protecting future generations from the high prices of global fossil fuel markets.
Boosting energy efficiency
We must do all we can to boost energy generation, but we can also make sure that none of us uses more than we need.
The days of wasting energy are over. Boosting energy efficiency with warmer homes and buildings is key to bringing down bills and boosting jobs along the way with green growth.
We are aiming high, with a target to reduce the UK’s final energy consumption from buildings and industry by 15% by 2030. We are also providing the money to get there, with a new £6 billion investment from 2025 to 2028 that comes on top of the £6.6 billion we are already spending over this Parliament.
Installing insulation in hundreds of thousands of homes across the country will save consumers around £310 a year through our ECO+ scheme, making our energy system more resilient and secure by slashing energy demand.
We recently launched a consultation so that we can make sure that the right support gets to the right people in the right way.
The Government have stepped in with an unprecedented package of support for households this winter, but there is more that households can do to help meet our energy demand reduction target and save money on their bills.
The Government are expanding their public awareness campaign to help reduce bills for all households and protect the most vulnerable over this winter and beyond.
Backed by £18 million, this campaign will complement existing Government support schemes. It will use public messaging to help consumers understand how they can reduce their own household usage and bills through making their homes more energy efficient for this winter and next. Moreover, it will provide vulnerable groups with the information they need to reduce energy usage without harming their health.
This information will also be available on the existing Help for Households website.
Legislating to drive investment and to secure our energy future
We have put the legislative vehicle to power up this long-term plan, the Energy Security Bill, back on track; it will be taken forward this Parliament.
The Bill will liberate private investment, driving jobs and growth in every corner of the country. Importantly, it will help to transform our energy industry by firing up the nascent CCUS and hydrogen industries, in which we already have a head start with pioneering projects from the Humber to the Mersey.
The Bill will encourage competition in the energy sector, enabling the economy to grow and flourish by creating opportunity, prosperity, and security with clean jobs, new skills, and cheaper bills.
[HCWS394]
Defence Equipment Plan
(2 years ago)
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The Secretary of State for Defence (Mr Ben Wallace)
I am pleased to place in the Library of the House a copy of the 2022 defence equipment plan report, which details the Department’s spending plans in equipment procurement and support projects over a period of 10 years.
This year’s equipment plan report comes at a pivotal point in time as the Ministry of Defence has become increasingly in the spotlight over the last year in the wake of Putin’s invasion of Ukraine.
The uplift received from the 2020 spending review meant we were able to rectify an existing deficit and produce an affordable equipment plan. We have retained this affordable position for the 2022 plan and continue to hold a contingency to mitigate against emerging financial pressures.
Since the publication of the last report the Department has made significant improvements in the process and production of the equipment plan. We have revised guidance to improve realism judgments, strengthened our assessment of affordability and ensured closer engagement between top-level budget holders and head office to mitigate finance and capability risks.
The recent autumn statement has recognised the need to increase defence spending, and we look forward to the outcomes of this once the integrated review is refreshed. For now, however, we are assured that the spending decisions we have set out remain in line with departmental priorities.
The plan is not immune to risk, we have set ambitious savings targets and made hard decisions in spending priorities across the commands. The defence landscape has shifted, and we must and will remain agile to those emerging threats. We are entering a new age of warfare and will face pressure from the rising levels of inflation; the Department however remains confident in the resilience of our spending decisions despite now living in a more volatile environment.
[HCWS396]
Online Safety Bill
(2 years ago)
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The Secretary of State for Digital, Culture, Media and Sport (Michelle Donelan)
The Online Safety Bill is a vital, world-leading piece of legislation, designed to ensure that tech companies take more responsibility for the safety of their users, particularly children. It is also vital that people can continue to express themselves freely and engage in pluralistic debate online. For that reason, I am today committing to make a number of changes to the Online Safety Bill to strengthen its provisions relating to children, and to ensure the Bill’s protections for adults strike the right balance with its protections for free speech.
Since taking up the role of Secretary of State for Digital, Culture, Media and Sport I have engaged extensively with colleagues to hear views on this legislation. We have heard concerns from many parliamentarians, stakeholders and members of the public on a number of issues, including a desire to go further on child protections, wanting better protections for legal speech and a concern that too much power over what we see and engage with online rests with tech giants themselves. Making progress on these important concerns did not, in my view, need to come at the expense of one another. I therefore set out a clear approach with three main aims:
Strengthen the protections for children in the Bill
Ensure that adults’ right to legal free speech is protected
Create a genuine system of transparency, accountability and control to give the British public more choice and power over their own accounts and experience.
We can say with confidence that all three aims have been achieved with the amendments the Government are putting forward. We will go further to strengthen the elements of the Bill that specifically protect children online. At the same time, we will remove the clauses pertaining to “legal but harmful” content for adults and replace them with a “triple shield” that empowers users and ensures that control over the online experience rests with individuals rather than anonymous committees in Silicon Valley.
Protections for Children
The Bill’s key objective, above everything else, is the safety of young people online. Not only will we preserve the existing protections, I will table a number of amendments that go further to strengthen the existing protections for children in the Bill to:
make clearer the existing expectations of platforms in understanding the age of their users and, where platforms specify a minimum age for users, require them to clearly explain in their terms of service the measures they use to enforce this and if they fail to adhere to these measures, Ofcom will be able to act. I will table these amendments in the Commons;
require the largest platforms to publish summaries of their risk assessments for illegal content and material that is harmful to children, to allow users and empower parents to clearly understand the risks presented by these services and the approach platforms are taking to children’s safety
name the children’s commissioner as a statutory consultee for Ofcom in its development of the codes of practice to ensure that the measures relating to children are robust and reflect the concerns of parents.
The Government will table the remaining amendments in the Lords.
Legal Free Speech
A large number of colleagues, stakeholders and members of the public have been particularly concerned about provisions that would result in the over-removal of legitimate legal content by creating a new category of “legal but harmful” speech. However admirable the goal, I do not believe that it is morally right to censor speech online that is legal to say in person.
I will therefore table a number of amendments in the Commons to remove “legal but harmful” from the Bill in relation to adults, and replace it with a fairer, simpler and we believe more effective mechanism called the triple shield, which will focus on user choice, consumer rights and accountability while protecting freedom of expression. We are taking the same approach when assessing the proposed new harmful communications offence, which when applied could potentially have criminalised legitimate discussion of some topics. I have therefore tabled amendments for the second day of Report stage to remove the harmful communications offence from the Bill.
To retain protections for victims of abusive communications, including victims of domestic abuse, we will continue progressing new offences for false and threatening communications. Furthermore, the Bill will no longer repeal the Malicious Communications Act 1988 and relevant sections of the Communications Act 2003. To avoid duplication in legislation, the Government will remove elements of the offences in these Acts which criminalise false and threatening communications.
Protection for Adults: The Triple Shield
It is unquestionable that speech that is illegal in the street should also be illegal online, and that major platforms should remove illegal content from their sites. While most platforms, including social media sites, have robust terms of service detailing the types of content they do or do not allow, anyone who uses these platforms regularly will know that there is a widespread failure of companies to enforce their own terms of service and platforms can often treat some sections of society differently. Lastly, I believe that rather than censoring adults, the Government should be standing up for free speech and choice by empowering people.
Together, these three common sense principles form the basis of the triple shield, a comprehensive set of tools to protect and empower adults. Under this system, three important rules apply:
Illegal: Content that is illegal should be removed. The Bill includes a number of priority offences, and companies must proactively prevent users from encountering this content. The Bill includes the relevant offences for England and Wales, Scotland, and Northern Ireland. Companies will also have to remove other relevant illegal content, when they become aware of it.
Terms of service: Legal content that a platform prohibits in its own terms of service should be removed, and legal content that a platform allows in its terms of service should not be removed.
User empowerment: Rather than tech giants’ algorithms alone deciding what users engage with, users themselves should have the option to decide. Adults should be empowered to choose whether or not to engage with legal forms of abuse and hatred if the platform they are using allows such content. So the “third shield” puts a duty on platforms to provide their users with the functionality to control their exposure to unsolicited content that falls into this category. These functions will, under no circumstances, limit discussion, robust debate or support groups’ ability to speak about any of these issues freely.
The user empowerment tools will allow adults to reduce the likelihood that they will see certain categories of content if they so choose. The duty will specify legal content related to suicide, content promoting self-harm and eating disorders, and content that is abusive or incites hate on the basis of race, ethnicity, religion, disability, sex, gender reassignment, or sexual orientation. This is a targeted approach that reflects areas where we know adult users, in particular vulnerable users, would benefit from having greater choice over how they interact with these kinds of content. For the first time, tech giants will be required to give individual adults genuine control over their own accounts and online experience. I will table amendments relating to these provisions in the Commons.
This will be done while upholding users’ rights to free expression and ensuring that legitimate debate online will not be affected by these stronger duties. There are high thresholds for inclusion in these content categories, which will exclude discussions about these broad topics—even where that could be controversial or challenging—but where it does not become abusive. Nothing in this duty will require companies to remove or take down legal content. This will also be made clear through the Bill’s explanatory notes.
Category 1 services will still need to give users the option to verify themselves and choose not to interact with unverified users. This duty will remain unchanged, and again reinforces this Government’s commitment to ensuring users have genuine choice over their online experience.
These changes will ensure the Bill protects free speech while holding social media companies to account for their promises to users, guaranteeing that users will be able to make informed choices about the services they use and the interactions they have on those sites.
Accountability and further measures
Publication of enforcement notices: The regulator, Ofcom, will hold companies to account if they fail to comply with the requirements in the Bill by issuing fines or notifications requiring them to take steps to remedy compliance failures. To further strengthen transparency for users, we will give Ofcom the power to require services to publish the details of any enforcement notifications, including notices requiring them to remedy breaches, that they receive. I have now tabled these amendments in the Commons.
Self-harm: I am aware of particular concerns around content online which encourages vulnerable people to self-harm. While the child safety duties in the Bill will protect children, vulnerable adults may remain at risk of exposure to this abhorrent content. I am therefore committing to making the encouragement of self-harm illegal. The Government will bring forward in this Bill proposals to create an offence of sending a communication that encourages serious self-harm via an amendment in the House of Lords. This new offence will ensure that trolls sending such messages to a person, regardless of the recipient’s age, face the consequences for their vile actions.
Tackling violence against women and girls: It is unacceptable that women and girls suffer disproportionately from abuse online and it is right that we address this through the Online Safety Bill. Therefore, extensive work has been undertaken, including with Home Office colleagues, to understand how we can further protect women and girls through the Online Safety Bill, including to:
List Controlling or Coercive behaviour as a priority offence. This is an offence that disproportionately impacts women and girls—listing this as a priority offence means companies will have to take proactive measures to tackle this content, therefore strengthening the protections for women and girls under the Bill.
Name the Victims’ Commissioner and the Domestic Abuse Commissioner as Statutory Consultees for the codes of practice, to ensure that they are consulted by Ofcom ahead of drafting and amending the codes of practice.
These changes will be made to the Bill in the House of Lords.
As announced last week by the Deputy Prime Minister, we are also going to take forward reforms to the criminal law on the abuse of intimate images. Building on the campaign of my right hon. Friend the Member for Basingstoke (Dame Maria Miller), as well as recommendations from the Law Commission, we will criminalise the sharing of people’s intimate images without their consent. This, in combination with the measures already in the Bill to make cyberflashing a criminal offence, will significantly strengthen protections for women in particular as they are disproportionately affected by these activities. The Government will table these amendments in the Lords. Separate to the Online Safety Bill, the Government will also bring forward a package of additional laws to tackle a range of abusive behaviour including the installation of equipment, such as hidden cameras, to take or record images of someone without their consent.
Epilepsy Trolling: I have tabled amendments for the second day of Report Stage to legislate for a new flashing images offence. I would like to pay tribute to the passionate campaigning that has been done on this issue, both by the Epilepsy Society, and parliamentarians from across both Houses to help the Government ensure that this appalling behaviour is tackled and that we fulfil the Government’s previous commitment to legislate to protect victims from epilepsy trolling. We have also made a number of other technical changes to clarify existing policy positions, further details of which can be found in the amendment paper.
To ensure the proposed changes go through proper scrutiny, we intend to return a number of clauses back to a Public Bill Committee for consideration. These are issues that are of fundamental importance to the regime, and to members of this House, such as freedom of expression, user empowerment, and age assurance, and it would not be right to proceed with these changes without detailed scrutiny in the House of Commons. We intend to make further changes, as set out above, in the House of Lords, however the timing of these amendments will depend on parliamentary scheduling.
[HCWS397]
Further Education
(2 years ago)
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The Minister of State, Department for Education (Robert Halfon)
Today the Office for National Statistics published its decision to reclassify the further education sector and its subsidiaries as part of the central Government sector.
The ONS is an agency independent of Ministers, and it periodically reviews the classification of all sectors of the economy for the purposes of national accounts. More information on classification and how the ONS has reached this decision is available on its website.
This means the statutory further education sector—FE colleges, sixth-form colleges and designated institutions—and its subsidiaries are treated from today, 29 November 2022, for financial and accounting purposes as part of the central Government sector, with my Department as the principal Department responsible for ensuring the sector complies with financial and accounting rules. In practice, this means that colleges are now subject to the framework for financial management set out in the parliamentary document “Managing Public Money”, guidance on senior pay and other relevant central Government guidance.
The mission of colleges—to continue to fulfil their role at the heart of their communities, working in partnership with employers, local government and other providers to meet the needs of learners and the labour market—has never been more important. The decision to reclassify the FE sector will not alter these strategic aims. Colleges will continue to play a leadership role in England’s skills system. My officials will work to make sure that they provide the world-leading skills infrastructure that our country needs while adequately demonstrating that we are managing public money well.
My officials said at the start of the review that we wanted to ensure that if colleges were reclassified, it happened in as seamless a way as possible, maintaining continuity and stability for the sector where possible. We have taken the time to get these changes right; to give colleges the support that they need as the transition takes place; and to explore the ways that colleges, learners, employers and communities might all make the most of this change. Colleges will retain many of the flexibilities they currently have and day-to-day operations will continue with minimal changes, so colleges can maintain a smooth delivery.
With that in mind, my officials are publishing the Government’s response to this reclassification decision today, which sets out how my Department will continue to support colleges following the ONS’s decision.
To support and protect colleges, we will be:
Investing £300 million of payments before the end of the current financial year to eliminate the current deficit in funding experienced by March and move to a profile of funding that better matches need, recognising the challenging environment the sector faces;
Providing an additional £150 million of capital grant funding in 2023 to 2024 to support and protect colleges planning to invest in their infrastructure/estate where previously they would have borrowed from commercial lenders;
Allowing colleges to retain flexibility on using surpluses and sale of assets, ensuring that colleges can continue to invest in their estates while complying with the “Managing Public Money” framework; and
Working in partnership with the sector to develop the future approach to financial reporting, and a new college handbook
This means that how colleges report to and interact with Government will change. Colleges will be required to ensure their systems of financial control support public sector standards of accountability.
“Managing Public Money” is clear that public sector organisations may borrow from private sector sources only if the transaction delivers better value for money for the Exchequer. Because non-Government lenders face higher financing costs, in practice it is very unlikely that central Government bodies—now including colleges—will be able to satisfy this condition for future private sector borrowing. If colleges have any proposals for new private sector borrowing, they will now need Department for Education approval—we will update college learner grant agreements to include this as a condition of funding.
In recognition of the limitation on private sector borrowing that reclassification as part of central Government imposes, and in response to feedback from the FE sector and stakeholder groups, I am pleased to confirm that my Department will be investing an additional £150 million of capital funding in further education and sixth-form colleges. This change means that although colleges will have only very limited access to private finance, they will benefit from additional grant funding to improve the condition of the college estate. From the research we have done with colleges, I understand this is one of the main reasons that colleges currently seek private finance, so I hope it will be welcomed by the FE sector.
Furthermore, to help colleges manage their cashflow, my Department will address the historical issue of uneven monthly payments from central Government, which leave colleges out of pocket by March each year. My Department will invest £300 million in bringing forward payments into this financial year to enable us to smooth out the funding, so we have a new even profile for colleges from 2023 to 2024 for both the 16 to 19 and adult education budgets.
I can also confirm that colleges will retain the flexibility to carry over surpluses from one year to the next, and to keep and spend the proceeds from the sale of assets, subject to certain conditions, and this will be kept under review.
Many colleges have subsidiaries, some of which are profit-making entities with commercial operations. Subsidiaries play an important role in the college system, both in delivering provision and generating commercial income. Colleges will also retain the ability to operate their trading subsidiaries, which the ONS has reclassified to the central Government sector.
Regarding financial reporting, colleges will continue to produce their own annual report and accounts as normal for the year ending 31 July 2023. The Department will eventually be required to consolidate the accounts for all FE colleges into one. This means we will require additional information from colleges. We will be working with the sector to ensure that the impact of this request is manageable.
My officials will begin work to write a new college financial handbook and engage with representatives from the sector from the outset, with a view to sharing it in draft with colleges and sector bodies in autumn 2023 for consultation so that they are clear what is expected of them and build their understanding and support. In parallel, my officials will set up the necessary processes and data collection systems to operationalise the new MPM requirements. The handbook will be finalised for publication in March 2024, ahead of an effective date of August 2024 to coincide with the start of the financial year.
The changes will be explained in more detail in a letter from the accounting officer of the Education and Skills Funding Agency to all college financial directors and will be followed by further guidance to help colleges comply with the “Managing Public Money” framework and other central Government guidance as quickly as possible.
I am also writing today to college principals to explain the changes that need to be made and to thank them for the important role they will play in the public sector.
We have taken the opportunity of reclassification to strengthen our arrangements for, and invest more in, this hugely important sector, which is now more obviously than ever a vital part of the Government’s skills agenda for the future.
The Government’s response ensures we use this opportunity to continue to support colleges to do what they do best, while balancing this against the need to adequately demonstrate that we are managing public money well.
[HCWS392]
Funding for Woodlands and Timber Industry
(2 years ago)
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The Secretary of State for Environment, Food and Rural Affairs (Dr Thérèse Coffey)
Today we announced £20 million of funding to improve tree planting stocks, woodland resilience and domestic timber production, and to accelerate tree planting across England. Applicant Total Grant £ Oxfordshire County Council 150,000 Lancashire County Council 300,000 Tees Valley Combined Authority 299,996 Nottinghamshire County Council 149,845 Kent County Council 299,642 West of England Combined Aut. 299,738 Rotherham Metropolitan BC 107,000 North Yorkshire County Council 150,000 City of York Council 149,800 Warwickshire County Council 150,000 City of Trees 299,880 Gateshead Council 147,886 Wakefield Metropolitan DC 147,921 Gloucestershire County Council 149,853 Lambeth Council 142,024 London Borough of Enfield 144,042 London Borough of Hillingdon 148,712 East Riding of Yorkshire Council 103,153 City of Bradford Metropolitan DC 150,000 Portsmouth City Council 147,116 Calderdale Borough Council 55,332 Devon County Council 298,476 Lincolnshire County Council 283,387 Doncaster Council 138,108 Shropshire Council 149,618 Hertfordshire County Council 148,500 Halton Borough Council 148,402 Knowsley Metropolitan BC 150,000 Newcastle City Council 290,000 Buckinghamshire Council 144,778 North Somerset Council 150,000 Kirklees Council 80,524 Worcestershire CC 149,708 North Lincolnshire Council 149,932 Surrey County Council 150,000 London Borough of Islington 146,411 Haringey Council 88,296 Somerset County Council 296,948 Sheffield City Council 147,520 Leicestershire County Council 149,577 London Borough of Barnett 100,000 Walsall Council 149,624 Cheshire West and Chester Council 144,520 Royal Borough of Greenwich 135,488 Wirral Council 85,274 Hampshire County Council 150,000 Norfolk County Council 148,225 Leeds City Council 125,176 Central Bedfordshire 140,028 Solihull MBC 149,215 Wiltshire Council 294,800 Bedford Borough Council 150,000 Cambridgeshire County Council 300,000 St Helens Council 149,000 North Northamptonshire 150,000 City of London Corporation 88,292 Peterborough City Council 149,809
The £10 million has been awarded through the Woods into Management Forestry Innovation Funds and the Tree Production Innovation Fund to support projects that explore new technologies and business models to improve tree planting stocks and woodland resilience.
In addition, 57 local authorities have been awarded nearly £10 million to accelerate tree planting.
These initiatives will see hundreds of thousands of trees planted in communities across England. They represent another step forward in the Government’s drive to treble tree planting rates across England by the end of this Parliament.
The Local Authority Treescapes Fund and the Urban Tree Challenge Fund will reopen for new applications early in 2023.
[HCWS393]
House of Lords
Oaths and Affirmations
Ukraine: Russian Drone Attacks
(2 years ago)
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The Lord Bishop of St Albans
To ask His Majesty’s Government what assessment they have made of Russia’s use of drone attacks against Ukraine.
The Minister of State, Ministry of Defence (Baroness Goldie) (Con)
My Lords, Russia’s forces are resorting to striking Ukraine’s critical national infrastructure, especially the power grid. It should be noted that these facilities have no direct military role, but the impact is multiplying the misery of ordinary Ukrainian citizens. Notably, these strikes are partially being conducted by one-way-attack unmanned aerial vehicles—so-called kamikaze drones. These weapons are being provided by Iran, another sign of the strategic degradation of Russia’s military.
The Lord Bishop of St Albans
I thank the Minister for her Answer. The use of these drones is deeply worrying for everybody right across the world. Will His Majesty’s Government take a lead in international efforts to control the proliferation of these armed drones, particularly to ensure that all parties stick to both the spirit and letter of the missile technology control regime as it pertains to UAVs?
Baroness Goldie (Con)
As the right reverend Prelate will be aware, it is not so much the numbers of drones as the way in which they are used, which is required to comply with international law and the law of armed conflict. Drones have allowed Ukraine to stretch the limits of its armed forces, and certainly, having eyes in the sky to spot targets and then direct artillery fire means that it can make better use of what it has.
Lord Browne of Ladyton (Lab)
My Lords, the Government are to be commended for imposing sanctions on three individuals and one commercial entity here in the UK who have been responsible in part for the provision of kamikaze drones to Russia from Iran. What plans do the Government have to work with allies to ensure that sanctions are tethered to international criminal accountability, following the French example? Only two days ago, the French courts decided that two senior executives at Amesys should face prosecution for knowingly providing technology that facilitated the torture of Libyan citizens by the Gaddafi regime. Should we not be following that example?
Baroness Goldie (Con)
What is important is that, first, we have an effective sanctions regime. As the noble Lord indicated, the UK has sanctioned more than 1,100 individuals and 100 entities, and with our allies has frozen around £275 billion of assets. The noble Lord will be aware that certain actions constitute breach of law, and those will be acted upon. But perhaps pertinently, the Government are considering closely with international partners all options for seizing assets. They could be used, perhaps, to support the people of Ukraine and contribute towards the reconstruction of their country.
Lord Bellingham (Con)
My Lords, is it true that Iranian military experts are providing technical advice on the ground in Crimea? Is that not a blatant breach of UN sanctions?
Baroness Goldie (Con)
I have no specific information on that matter. I can make inquiries and, if permitted, I shall disclose to my noble friend what I can.
Lord Wallace of Saltaire (LD)
My Lords, I understand that the Iranian drones are slow, noisy and powered by the equivalent of motorbike engines, and that Ukrainians are shooting them down mainly with machine guns. Are there more modern methods of interception that the West should be providing but has not yet provided—for example, jammers and air-to-air defences?
Baroness Goldie (Con)
The noble Lord is correct in that intercepting these drones is challenging because some of them are relatively small in mass, so certain types of weaponry may be more effective than others in addressing them and trying to stop their continued progress. What I can say is that the UK continues to give air defence missiles to Ukraine; we are proud to be the second-largest donor of military equipment. We will provide additional air defence missiles to Ukraine, and we continue to provide sophisticated electronic warfare equipment, which gives additional protection against long-range drones and missiles.
Lord Craig of Radley (CB)
My Lords, have the Government made any detailed assessment of the impact of sanctions on Russia’s ability to produce weapons and deploy them? Is there any indication that the sanctions have in fact affected Russia’s ability to fight?
Baroness Goldie (Con)
There is evidence that the sanctions have certainly had an impact on Russia’s ability to operate a functioning economy. As to their impact on its weapons manufacturing, I have no specific information. It may not be information that I would be able to disclose; I will make inquiries and shall certainly respond to the noble and gallant Lord if I can.
Lord Howell of Guildford (Con)
My Lords, although concerns about the use of drones are justified, are not both sides—Ukraine and Russia—using them, the Ukrainians very cleverly? A year or so ago, the Azerbaijanis showed that drones can inflict terrific damage on all tanks, unless they are very clever. Is it not evident that drones really are going to be the weapon of the future and that most significant armies are developing them? Can the Minister assure us that, although we are not involved in the ground fighting in Ukraine, we are building up adequate supplies here in Britain? Can she also assure us that we are making them ourselves—or are we importing them?
Baroness Goldie (Con)
I have observed before in this Chamber that drones—unmanned aerial vehicles—are part of the UK’s defence capability. My noble friend makes an interesting point. The war in Ukraine has been instructive as to how current warfare is developing and what new stratagems and forms of equipment are necessary to conduct it. He is quite right that unmanned aerial vehicles have a role to perform.
Lord Coaker (Lab)
My Lords, last Wednesday’s defence intelligence update on Ukraine stated that no one-way attack UAVs sourced from Iran have been used “since around 17 November” and that the supply is “likely very nearly exhausted”. The same report also stated that the quicker method of resupply is procuring more from overseas. Can the Minister update us on how the Government are acting to prevent or delay this? How will we support Ukraine to take advantage of the Russians’ supply seemingly running out?
Baroness Goldie (Con)
The noble Lord is focusing on something very pertinent. Russia has increasingly struggled to secure critical inputs and technologies needed for its war against Ukraine because of unprecedented sanctions and export controls. We are committed to doing everything we can to isolate Russia further, and we are continuing to monitor whether it will extend its procurements from Iran to other suppliers of foreign weapons systems. That would be a very unwelcome development, but one that we would need to be aware of.
Lord Tyrie (Non-Afl)
My Lords, further to the question that was asked earlier, as Russia has escalated the war in this shocking way, why have we not supplied the Ukrainians with the advanced weapons they need to defend themselves directly and to attack the sites, including those on Russian territory, from which these drones are being launched?
Baroness Goldie (Con)
We have been very careful as a country, whether acting bilaterally with Ukraine or in consort with our allies, to ensure that we are responding to what Ukraine says it needs and what Ukraine’s armed forces have identified as the necessary weaponry for them. That is a very important message to listen to, and we have been endeavouring to respond to it as best we can.
Lord Campbell of Pittenweem (LD)
My Lords, following on from the question asked by the noble Lord, Lord Browne, has the Attorney-General been consulted about the legal liability of countries that supply weapons to other countries in the knowledge that they will be used against civilian targets, contrary to humanitarian law?
Baroness Goldie (Con)
I do not know whether the Attorney-General has been consulted, but the noble Lord will be aware that Iran, for example, is breaching United Nations Security Council resolutions. If it continues to do so, there will be continued pressure at United Nations level to address that. We all take very seriously the involvement of Iran and, as the noble Lord, Lord Coaker, indicated, if Russia were to expand that procurement base, we would look at that with the utmost gravity.
Baroness Meyer (Con)
My Lords, as Russia is increasing its attack on Ukraine, what are His Majesty’s Government doing to send more generators to help the Ukrainian population ahead of the harsh winter?
Baroness Goldie (Con)
I thank my noble friend. We have been able, as a country, to provide some very meaningful support, particularly on the military side. We have developed a package to support Ukrainians through the winter, including 25,000 sets of winter clothing, so that they are more effective on the battlefield and able to withstand the very low temperatures in Ukraine at this time of year. As my noble friend will be aware, we have also embarked on a number of other measures to support Ukraine in dealing with its damaged critical national infrastructure, and by trying to find ways to help it rebuild its damaged and destroyed buildings.
Rape: Prosecutions and Support
(2 years ago)
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Baroness Donaghy
To ask His Majesty’s Government what steps they intend to take (1) to increase the number of rape prosecutions, and (2) to provide more support for women and men affected by rape.
The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Bellamy) (Con)
My Lords, the 2021 End-to-End Rape Review Action Plan committed us to double the number of adult rape cases reaching court by the end of this Parliament, back to 2016 levels. We have since seen an increase in both prosecutions and convictions. Actions taken include establishing the criminal justice dashboard; funding Operation Soteria, making police investigation suspect-focused; providing the rape and sexual abuse support fund; launching a 24/7 rape and sexual abuse support line; and completing the rollout of pre-recorded cross-examination, so that victims no longer must face the courtroom but can be cross-examined beforehand.
Baroness Donaghy (Lab)
I thank the Minister, but under this Government, conviction rates for rape have reached historic lows, with only 1.3% of recorded rapes resulting in a charge. MoJ data from June of this year showed that 28% of 53,000 outstanding Crown Court cases were for alleged sexual offences, with up to five years before anything reaches the court. Some 65% of cases analysed in London last year ended in victim withdrawal, revealing a lack of high-quality victim care in the justice system. What other plans do the Government have to improve this shocking situation?
Lord Bellamy (Con)
My Lords, first and with respect, we are making progress on this matter. Your Lordships will perhaps recall that, after 2016 and the Allan case, where a prosecution collapsed for lack of disclosure, prosecutions for rape fell until 2019. Then we had the pandemic. That is why the Government are now committed to returning to 2016 levels.
I will give one example of progress. In 2016, a total of 766 rape cases per quarter were referred by the police to the CPS. In Q2 2022, we had 901 such referrals, up on 2019 by 97% and even up on 2016 by 18%. Many other examples can be seen on the criminal justice system delivery data dashboard at justice.gov.uk, to which I respectfully refer your Lordships. You can see the progress we are making on every offence, across every region of the country. That is a considerable achievement and I commend it to your Lordships. In response to the noble Baroness, I do not doubt that difficulties remain, but we are making progress.
Lord Morris of Aberavon (Lab)
My Lords, an accusation of rape is a very serious matter for both the victim and the accused. I have repeatedly asked for a breakdown of figures for rape cases where the defence is consent and where there is a failure to convict—a situation of which I have long experience. Will the Minister go back to the Attorney-General, who supervises the CPS, to ask why these figures cannot be provided? This may be the heart of the problem.
Lord Bellamy (Con)
I will certainly do my best to accommodate the noble and learned Lord.
Baroness Burt of Solihull (LD)
My Lords, many victims of rape are reluctant to follow through on prosecutions because they need medical and other care, and they want to be believed. A report from over 20 years ago by a policeman whom we may know, one Brian Paddick, and the academic Betsy Stanko, led to the establishment of sexual assault referral centres across England. But this year, an NHS survey found that 72% of victims are unaware that this support is available. If more victims knew about and used these centres, would more successful prosecutions not follow?
Lord Bellamy (Con)
My Lords, the Government are making every effort to increase support for victims of rape and sexual assault. We now have a 24/7 helpline, as I said, have increased recruitment of ISVAs—independent sexual violence advisers—and the rape support fund is £21 million this year. So I hope we will be able to address the point the noble Baroness raised, of which I take good note.
Baroness Verma (Con)
My Lords, can the Minister assure me that the number of women who are not able to communicate, as English is not their first language, is also collected in the data that my noble friend mentioned? How are we monitoring whether women from communities that cannot communicate fully in English are fully supported by the systems?
Lord Bellamy (Con)
I take good note of my noble friend’s question and will do my best to assure her that those pressing needs are dealt with.
Baroness Gohir (CB)
My Lords, some police officers spend more time considering the credibility of the victim than the rape allegation made. They unreasonably snoop through women’s mobile phone messages and emails, downloading their entire history. Perhaps they think they can get away with it. Will the Government implement the recommendation made by Vera Baird, the former Victims’ Commissioner, to provide legal aid solicitors to rape victims, who can challenge unreasonable demands made by the police?
Lord Bellamy (Con)
A legal aid solicitor ought to be able to challenge unreasonable demands by the police under the existing regime. However, I refer this House to Operation Soteria, which is directed to the very point that the noble Baroness makes about the focus on the victim rather than the suspect. It started as a pilot with Avon and Somerset Police, is gradually being rolled out nationally to 19 police forces, and should turn the approach around so that it focuses on the suspect, not the victim.
Baroness Thornton (Lab)
My Lords, many noble Lords have mentioned victims. When might we find the long- promised victims Bill coming forward? What is the Minister’s view on the Labour Party’s policy to make violence against women and girls a serious crime in legislation?
Lord Bellamy (Con)
The Government hope to bring forward the victims Bill as soon as possible but have no present plans to change the legislation on violence against women or, indeed, anybody else.
Baroness Chakrabarti (Lab)
My Lords, many women are facing a crisis of trust and confidence in the criminal justice system at the moment. I appreciate that the Minister is relatively new to this arena. However, there are people who believe that rape has effectively been decriminalised in our jurisdiction. That is a very serious matter. Would he consider meeting me, perhaps the noble Baroness, Lady Newlove—who is not in her place—other interested Members of your Lordships’ House and victims’ groups, including the Centre for Women’s Justice, to hear their experience before taking this work further forward?
Lord Bellamy (Con)
I would certainly be prepared to meet the noble Baroness and others and, on that occasion, take everyone through the steps that we are taking to combat this problem.
Lord Pannick (CB)
My Lords, in January this year, the Ministry of Justice said in answer to a Parliamentary Question from the shadow Attorney-General, Emily Thornberry, that the typical delay between an offence of alleged rape occurring and the completion of the resulting criminal trial was 1,000 days. That is a shocking statistic. What is the Ministry of Justice doing about this?
Lord Bellamy (Con)
There are several steps. There is the reference from the police to the CPS, the CPS charging decision, the CPS bringing a case, the delay in the court and so forth. Delays in the court are still a problem and have unfortunately been made worse by the barristers’ strike. Other delays have been reduced. All I can say to the noble Lord is that we are working as hard as we can to address this problem.
Baroness Armstrong of Hill Top (Lab)
My Lords, I am concerned that the Minister’s ambition seems to be to get back to the figures from 2016. Those who work with children, young women and women who have been abused, sexually and in other ways, know that the numbers misrepresented the problem that was out there even in 2016. A recent report from Agenda looks particularly at young women. It is searing about the experiences across the board, particularly in ethnic minorities. Unless support is there earlier, those young women and other women will not get near justice. The Government really need to take that into account.
Lord Bellamy (Con)
The Government are working as hard as they can. This is a top priority, and I take good note of the noble Baroness’s remarks.
Humanist Marriages
(2 years ago)
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Baroness Bakewell
To ask His Majesty’s Government when they intend to give legal recognition to humanist marriages.
Baroness Blackstone (Lab)
My Lords, I beg leave to ask the Question standing in the name of my noble friend Lady Bakewell on the Order Paper.
The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Bellamy) (Con)
My Lords, the Law Commission recently published its report on reforming wedding law in England and Wales. We must consider the 57 recommendations in full. It is important that we balance the needs and interests of all groups, religious and non-religious, and very carefully consider the implications of changing the law. I hope to be able to publish our initial response in the first part of next year.
Baroness Blackstone (Lab)
My Lords, I thank the Minister for his reply but I must say that I am a little disappointed by it. The Law Commission, to which he referred, took no position on this question. It did not make a recommendation one way or the other. That is because this is a political decision. What is preventing the Government from going ahead and laying an order under the 2013 Act, getting it done now, and stopping once and for all the discrimination against humanists in this area?
Lord Bellamy (Con)
My Lords, in a nutshell, the Government’s position is that to lay an order under the 2013 Act solely in favour of humanists would discriminate against other groups—Muslims, Sikhs, Hindus and so forth—in permitting them to have a particular form of marriage not available to other groups. The Government’s position is that we must go forward together and solve the whole problem. I will elaborate in a moment on what the problem is.
Lord Cormack (Con)
My Lords, we need to get a move on here. As one who believes very fervently in Christian marriage but even more in the institution of marriage, I ask: how can it be sensible to allow a wedding to take place in a registry office but not to allow humanists, who have their own ethics, to have a proper marriage ceremony? We need to get a move on. We had an almost identical Answer last time. Let us have a better one next time.
Lord Bellamy (Con)
The Law Commission, in a very detailed and well-argued report, took the view that we should proceed as a country to solve the whole problem across all faiths at the same time and not favour a particular group. That is the Government’s position, and we will publish our position shortly.
Baroness Meacher (CB)
My Lords, it will be 10 years next year since I tabled an amendment to the 2013 Marriage (Same Sex Couples) Bill about humanist marriages. In response to it, the Government tabled their own amendment enabling Ministers to make this tiny change—we are talking about two words—adding “and humanists” to Quakers and Jews. It seems highly unlikely that any legislation will pass following the Law Commission’s report before the next election. Therefore, will the Minister meet me to discuss how, 10 years on, this tiny adjustment can be made to the law through a ministerial order to end this discrimination once and for all?
Lord Bellamy (Con)
My Lords, I am happy to meet the noble Baroness, but I doubt whether I shall be able to give her the assurance that she asks for. This is a quite difficult problem. We have to solve it across the board without discrimination either in favour of or against any faith group or non-faith group. We have to deal with the civil preliminaries for marriage, who is to be authorised, what is the regime for authorisation and, in particular, the problems raised by the All-Party Parliamentary Humanist Group itself in relation to the Law Commission’s report.
Baroness Thornton (Lab)
My Lords, why is it that Scotland and Wales have managed to have humanist weddings in their law? If I sound frustrated it is because I was part of the move in which, with enormous cross-party support, this House agreed an amendment to the equal marriage Bill which would allow humanist weddings. That has not been implemented by successive Conservative Governments. There must be a reason why that is the case, because it is not complicated or discriminatory. It is actually very straightforward. If and when my son wants to get married and wants a humanist wedding, he has to go to Scotland or Wales. That seems very unfair indeed.
Lord Bellamy (Con)
My Lords, the Law Commission recommended reform. That has already taken place in other jurisdictions. We are working on exactly how the reform should take place in this country as fast as we can.
The Lord Bishop of St Albans
My Lords, those of us on this Bench in principle have no problem at all with humanist weddings. Does the Minister agree that the best way forward is the one that has been alluded to already, which is that it could be achieved most easily by following the historical precedent established with Jewish and Quaker weddings rather than adopting the overtly complex recommendations of the Law Commission’s report?
Lord Bellamy (Con)
The Government have to consider in detail the Law Commission report, its undoubted strengths and the various points that have been made about it, not least by humanists. We will publish our position as soon as we can in the new year.
Lord Desai (Non-Afl)
My Lords, is the problem that the humanists are not religious? Every other religion has been treated kindly and LGBTQ marriages can take place. Just the humanists in England are discriminated against. Is the Church of England so upset about humanists that it will not let humanists get married?
Lord Bellamy (Con)
My Lords, as far as I know, this problem is not a matter for the Church of England. The Government’s view is that as a country we should proceed across the board to solve and update our law of marriage all at the same time.
Baroness Burt of Solihull (LD)
My Lords, in Scotland, where humanist marriage is legal, as has been mentioned, there are more humanist marriages than Christian ones and marriage is more popular than ever. David Cameron supported gay marriage because he believed that marriage is a good thing and that everyone should be able to marry. Do this Government believe that marriage is a good thing? If so, why will they not allow humanists to legally marry?
Lord Bellamy (Con)
This Government strongly support the institution of marriage. I am probably boring your Lordships by repeating myself: the Government think the whole problem should be solved across the board at the same time, not just with one group—the humanists.
Lord Griffiths of Burry Port (Lab)
My Lords, I declare an interest as a Methodist minister nearing 50 years since I was ordained and someone who enjoys the fellowship of humanist celebrants in funeral services in crematoria across the city. I declare to the Minister my total bewilderment at the nature of this discussion. It would enrich us all if people, according to conscience and practice, could marry in the way asked for in this Question. Can he understand the predicament of those of us of religious persuasion—the right reverend Prelate the Bishop of St Albans and the noble Lord, Lord Cormack, have also spoken from faith positions—in that it would be an addition to the richness and value of the ceremonies we produce? Can the Government explain why they cannot understand this?
Lord Bellamy (Con)
With respect, I very much hope that the Government understand what the problem is. As the Government see it, we should have a regime for marriage in this country in which the civil preliminaries are common to all marriages, the persons who conduct marriages are authorised under one regime, we define what belief systems we will accept as people capable of authorising marriages, and we exclude extremists, cults and so forth. These are not straightforward questions. It is a very simple and, if I may say so, not complete answer to say that it is easy to do it for the humanists. We want to make sure that, for example, a marriage of a Muslim at home—which might not be a lawful marriage at the moment—is now taken forward and that we create a situation in which that becomes a lawful marriage and we have proper officiants, rules and regulations that regulate it all. That is the Government’s position.
Baroness Brinton (LD)
My Lords, I supported the amendment from the noble Baroness, Lady Meacher, to the same-sex marriage Bill of 2013. The Minister probably feels rather beaten up by Members from all sides of your Lordships’ House, but we remember what Ministers said then. The provision that was arranged was deliberately simple to enable this to happen. I am sure the House would welcome other faiths being drawn into it, but this is long overdue. Please can he go away and look back at the history of the passage of that Act?
Lord Bellamy (Con)
I will of course go back and look at the history. I am equipped with elderly but serviceable shin-pads and am quite used to having my shins thoroughly kicked when necessary, but in this case the Government feel that the country as a whole must go forward together and not favour a particular group.
Net Migration
(2 years ago)
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Lord Green of Deddington
To ask His Majesty’s Government how they intend to meet their commitment to reduce net migration, given the estimate by the Office for National Statistics, published on 24 November, that net international migration to the United Kingdom was 504,000 for the year ending June 2022.
The Parliamentary Under-Secretary of State, Home Office (Lord Murray of Blidworth) (Con)
The Government are committed to controlling immigration and ensuring that it works in the UK’s best interests. Our immediate priority is continuing to tackle abuse in the system and prevent dangerous and illegal crossings. In the medium to long term, we will continue to strike a balance between reducing overall net migration and ensuring that businesses have access to the skills that they need.
Lord Green of Deddington (CB)
My Lords, half a million immigrants in one year is truly extraordinary: more than the population of Manchester or Edinburgh. Admittedly, that includes 200,000 refugees from Ukraine, Hong Kong and Afghanistan. Even if you allow for that, it is now clear that the Government’s points-based system has opened up nearly half of all full-time jobs to immigrant workers. Will the Government now retighten the requirements for work visas for students and dependants so as to get a grip on the huge wave of immigration that they have so foolishly sparked off and which, rightly, is a very serious concern to many members of the public?
Lord Murray of Blidworth (Con)
As the noble Lord rightly observes, the net migration figures estimated by the ONS this year reflect the very unusual international circumstances in which we find ourselves. Home Office statistics show that we have helped over 144,000 people from Hong Kong, 144,600 people fleeing the war in Ukraine and nearly 23,000 people from Afghanistan to find safety in the UK. This means that the current set of figures is an outlier. The level of immigration for study visas reflects government policy, in that we are encouraging students from other parts of the world to study at British universities, with the great benefit that brings both to Britain and to those people who have the benefit of a British education.
Lord Blunkett (Lab)
My Lords, overnight briefings on the issue of “safe country” take me back 20 years. Last week’s briefings in relation to overseas students would take us back 60 years. Will the Minister make absolutely clear that those briefings were incorrect—because they were economically illiterate, intellectually unsustainable and incredibly damaging to our education system?
Lord Murray of Blidworth (Con)
I note what the noble Lord says.
Lord Lilley (Con)
My Lords, will my noble friend bear in mind that, over the last decade, total immigration —which ran at half the level of the last 12 months—was equal to the combined populations of Southampton, Portsmouth, Oxford, Nottingham, Middlesbrough, Leicester, Exeter, Derby and Carlisle? We wonder why we have a housing shortage. Has my noble friend the Minister ever heard those who oppose any tightening of immigration restrictions recognise that they are condemning a whole generation of British-born young people to living at home or in cramped bed-sits until they are middle-aged?
Lord Murray of Blidworth (Con)
It may assist my noble friend if I remind the Chamber that work visas are 82% higher than they were in 2019 and that this is in part driven by an increase in health and care visas, which make up 50% of all skilled worker visas issued. Family-related visas are 31% lower than in 2019. It is clear that there is a need for more people in the health and care sector, and visas are awarded in relation to that. That is the reason for these exceptional figures. Again, I point to the fact that the figures this year reflect the problems of coming out of the pandemic and the international conflict that we have had to deal with.
Baroness Ludford (LD)
My Lords, have I got this right? The Government insist on including students in the immigration statistics. Students form one-third of people coming into the country, thereby artificially inflating the migration numbers. The Government’s reaction is to seek to ban students, harming the higher education sector and the economy. Can they really not think of a better way to manage this, starting by excluding students from the immigration statistics?
Lord Murray of Blidworth (Con)
I reassure the noble Baroness that the Government have no plans to ban students.
Lord Hodgson of Astley Abbotts (Con)
Could my noble friend explain why the Government have limited the number of medical school places to 7,500? This deprives several hundreds and maybe thousands of our young people the chance to pursue a medical career. In the last five years, we have recruited 50,000 doctors from overseas, some of whom have come from less-developed countries, which I at least regard as a shameful practice.
Lord Murray of Blidworth (Con)
I note what my noble friend says, but the level of provision of medical training is a matter for the Department of Health and the Department for Education.
Lord Brooke of Alverthorpe (Lab)
My Lords, is it not true that one of the great attractions of this country is that people can come in and get employment without any real problem whatsoever, and that the major error that we have had is the abandonment of the policy we had in 2010 to have a form of identity for every individual in the country? This has now been exposed as a major failing of the then Tory and Lib Dem Government, and something needs to be done to address it.
Lord Murray of Blidworth (Con)
The Government do not agree that the answer is identity cards.
Lord Desai (Non-Afl)
My Lords, should we not recognise that the people who pay thousands of pounds to people to carry them across the channel actually want to come here? They find coming here beneficial, and the economy finds it beneficial when they come. Why do we not have a system in which we distinguish between refugees and economic migrants and welcome economic migrants as a very good thing?
Lord Murray of Blidworth (Con)
I thank the noble Lord for that question. We have indeed such a system. The points-based immigration system is designed to entice to the UK those workers who wish to come who are qualified by reason of the scheme. The asylum system exists to assist those who are claiming asylum or other protection.
Lord Coaker (Lab)
I put it simply to the Minister, following the questions he has had from around the House: would it not be helpful for a Minister of the Crown to stand up at that Dispatch Box and say, “Of course we need rules about migration, but this country benefits enormously from migration, and we should welcome that fact”?
Lord Murray of Blidworth (Con)
I entirely agree with the noble Lord that the country benefits vastly from legal migration. Indeed, that is why we have arrangements to achieve that objective.
Lord Baker of Dorking (Con)
My Lords, the Minister will be aware that there are about a quarter of a million overseas students whom we welcome to this country, but is he also aware that many of those also ask for dependent relatives to be brought in? Surely dependent relatives should not be allowed in. It is the students who require access, not their families.
Lord Murray of Blidworth (Con)
I thank my noble friend for that question. The position is that the types of students who are now availing themselves of British educational opportunities tend to be older, and there are restrictions around the provision of visas for family members. They are restricted to those on a postgraduate course—broadly, not undergraduate courses—and to a course of nine months or longer, if the course of study is with an accredited institution with a track record of compliance with immigration requirements. It appears to be the case that, of the visas issued to students and dependants, about one in five go to dependants and there is no reason in the Government’s view to change that position at this time.
Baroness McIntosh of Hudnall (Lab)
My Lords, the Minister has been asked several times a question that, with great respect, he has not answered: why are international students, who bring significant income to our universities and are an ornament to them in many other ways, included in migration statistics, with or without dependants? They distort those statistics, which, frankly, does not serve the Government’s purposes very much. Why are they still part of the immigration statistics? He has not given us an answer to that.
Lord Murray of Blidworth (Con)
I thank the noble Baroness for the opportunity to clarify the position. The ONS prepares these estimates in its own way, and it is utilising on this occasion a new methodology derived from various sources to estimate, effectively, emigration as well as immigration. The choice is taken to include students, for reasons of transparency, and that seems to me entirely sensible. The number of visas issued to students is available to the Home Office as a figure. That is only a part of the picture when considering the figures that the noble Lord, Lord Green, was referring to in his Question, which are of course the estimates provided by the ONS.
Air Quality (Designation of Relevant Public Authorities) (England) Regulations 2022
(2 years ago)
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Lord Benyon
That the draft Regulations laid before the House on 19 and 27 October be approved. Considered in Grand Committee on 24 November.
Manston Update
(2 years ago)
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Lord Coaker (Lab)
My Lords, we know that the Government’s asylum system is in chaos. Just 2% of last year’s small boat cases have been decided, creating a backlog of nearly 100,000 people waiting more than six months for a decision. Such is the chaos that we have seen, and are seeing, that we have the completely inappropriate last-minute use of hotels, with no proper information for local councils or public health officials. Then, of course, there is the disgrace that has been and is Manston.
We are all aware of revelation after revelation of overcrowding at Manston, of people being kept long after legal limits were passed and of poor health and hygiene. What is the latest revelation that we have from Manston? It is of 50 diphtheria cases—compared with just three last year. Was the Home Office warned four months ago, as reported in today’s media, that measures to prevent the spread of infectious diseases such as diphtheria at Manston were poor and that staff were ill prepared to deal with them? When were Ministers first told that there were diphtheria cases at Manston?
By mid-October, the Home Office had admitted that there were cases at Manston, but its officials told the Home Affairs Committee on 26 October that they had sufficient health measures in place to address diphtheria. Why, when they clearly did not? The Government kept thousands of people in overcrowded conditions at Manston, described by one as thousands of people “huddled around fan heaters” to stay warm. I am no expert but those seem like perfect conditions for infections to spread, so why on earth was it only on 11 November, weeks later, that diphtheria screening and vaccinations were recommended for everyone passing through Manston? How was it possible that, despite this, the Home Office continued to move people from Manston into hotels across the country, even as potential carriers of diphtheria? Why was this done in some cases with local public health councils or local authorities not being told or given proper information?
The Health Secretary tells us that 500 people have now been screened and vaccinated, but what about the thousands of others who have passed through Manston? Wherever they are in this country, have they been screened and vaccinated for diphtheria, or have they just been left? Have all those with possible symptoms been given antibiotics? Given that this was the recommendation of public health officials some three weeks ago, if it has not been done, why not? What liaison is taking place between the health department and the Home Office? What is the plan?
Across the country, residents and migrants from Manston have been dispersed. We were told by the Immigration Minister yesterday that asylum seekers with symptoms of diphtheria are to be isolated for a short period at Manston or in designated isolation hotels. Can the Minister say any more about the numbers of cases across the country and where they are? What is the current situation?
Of course, the Government, the Minister and the Home Office will now do all they can to protect public health, prevent infection and give healthcare to those who need it—but it should never have come to this, should it? It is time for the Government to listen, advise, act on advice and get a grip. Manston and now this associated health issue of diphtheria have been a public policy disgrace, alongside asylum backlogs and chaos in the channel. Frankly, it is shocking, and the Government need to get a grip.
Baroness Brinton (LD)
My Lords, it is a pleasure to follow the noble Lord, Lord Coaker. I am afraid I will repeat not only some of his questions but the many that I have asked the Minister on this issue over the last month.
On 31 October, the Home Secretary said:
“Manston … has very good medical facilities and all protocols have been followed.”—[Official Report, Commons, 31/10/22; col. 649.]
On 27 October, Robert Jenrick, the Immigration Minister, said:
“The basic needs of arrivals are provided … including … medical care.”—[Official Report, Commons, 27/10/22; col. 401.]
When we had the Statement last Thursday, it felt like the Home Office had emptied Manston and dumped unfunded people, unscreened and unvaccinated, without access to their local NHS in their new venues.
It is good that things are starting to change, and that is why I thank the Minister. If he had anything to do with the message that came out on Friday afternoon that the spot accommodation arrangements that prevented people moving from Manston to hotels from accessing GPs have now been changed. It is a shame that it has taken repeated questions to make that happen.
On Saturday morning we heard that the man who died after staying at Manston had died from diphtheria, which was clarified by a PCR test, despite some earlier negative tests. One of the problems with diphtheria is that the symptoms are not always obvious. On 1 November, I asked the Minister whether people were being routinely screened and tested, but it appears that they are still not, let alone being vaccinated.
The spread of infectious diseases was highlighted by Charlie Taylor, Chief Inspector of Prisons, in his unannounced inspection of Manston and Jet Foil at the end of July. The report was published on 1 November, but I am sure that it is still the convention for Ministers to see a draft beforehand. It says:
“Facilities for the management of detainees with COVID or other infectious diseases were poor. Detainees were placed in a claustrophobic portacabin with no clear responsibility assigned for managing their care. Paramedic staff were unsure of any guidance, policy or procedure for the management of infectious diseases.”
What happened after the draft of this advice was seen by Ministers, prior to assurances given by Ministers, from the end of October onwards, that good healthcare and protocols were being followed?
Diphtheria is a notifiable disease because, in unvaccinated people and untreated cases, it has a fatality rate of 5% to 10%. It spreads in overcrowded communities whose health may be compromised for other reasons, which is absolutely typical for asylum seekers. What data is there for how many of the people held at Manston since the middle of October have now been screened, tested and offered vaccinations? The UNHCR, UNICEF and the American CDC all vaccinate refugees and migrant communities, and it is now compulsory if you come into America through the border with Mexico.
On Sunday, the Home Office said that infectious migrants will now be told to isolate in hotel rooms but, prior to this, the only advice about those in hotels was given to hotel staff, not local doctors and certainly not directors of public health. It is good that this is beginning to change.
Yesterday morning, the government webpage entitled “Protecting yourself against diphtheria” was updated—and that too is good. It is important to say that the wider public are not at risk; only people coming into contact with someone with diphtheria are at risk. The guidance now says:
“Everyone arriving to claim asylum in the UK is currently being offered a dose of a diphtheria containing vaccine and a course of antibiotics … to reduce the risk of diphtheria and some other infections.”
This should have been normal practice the moment the first case emerged, so why is it only starting to happen now?
The Statement says that an “enhanced diphtheria vaccination programme” will be “offered to all”. So I ask the Minister what the definition is of “those arriving”: does it cover everyone who has been at or through Manston since the numbers bloomed after Suella Braverman was appointed as Home Secretary, rising from 1,500 to 4,000 in the space of three weeks? Or is it only those currently at Manston? Or will it now be every asylum seeker in the country, as is the case with CDC in America?
I also ask whether those who come through Manston have also been screened for infectious diseases, including diphtheria and scabies? Who will be managing this; will the Home Office be funding screening and vaccinations? I hope so, because local health services should not have to pick up the tab.
The Statement says that “robust screening processes” on arrival will “identify proactively” those with symptoms. However, we know that diphtheria is asymptomatic. Two are currently hospitalised, one person is dead and there are at least 50 confirmed cases. We have had only about 50 cases in the last 10 years in the UK, but the directors of public health in local areas are still struggling to get access to information and resources, from either the Home Office or the UKHSA. When will that happen? If the Minister cannot answer all these questions, please can he write to me with some answers?
The Parliamentary Under-Secretary of State, Home Office (Lord Murray of Blidworth) (Con)
I thank both the noble Lord and the noble Baroness for their speeches. The Home Secretary and the Minister for Immigration were updated over the weekend by Dame Jenny Harries of the UK Health Security Agency, who confirmed that 50 cases of diphtheria had been reported in asylum accommodation. This had the unfortunate effect of being a consequence of the speed with which Manston had been emptied in response to the earlier concerns about the conditions at Manston. While robust processes and plans have now been put in place, it is right that we remain vigilant. As the noble Baroness observed,
“robust screening processes on … arrival … at Western Jet Foil … to identify proactively those with symptoms of diphtheria”
are in place, and the
“‘round-the-clock’ health facilities at Manston”,
which I previously referred to in this House,
“including emergency department consultants and paramedics”,
remain available to those at Manston and will readily identify conditions that those people may have.
Guidance is also available
“in multiple languages on spotting the symptoms of diphtheria”,
and I am grateful to the noble Baroness for noting that changes have made on the website in an effort to enhance the spread of that message. In addition,
“an enhanced diphtheria vaccination programme, offered to all those arriving at Manston”
is now in place, and
“of those who arrived at the facility this weekend, 100% took up that … offer”.
Further,
“testing for those presenting with symptoms and for close contacts”
of confirmed cases was also available,
“and those testing positive are being isolated in a designated place.”—[Official Report, Commons, 28/11/22; col. 676.]
As the noble Baroness has observed, certain “isolation hotels” have been set up to provide facilities to make that isolation possible and easier for those who need it. Equally, special transport is provided to ensure that they can travel to their place of isolation until the symptoms of the condition have resolved.
On the question asked by both the noble Lord and the noble Baroness in relation to liaison with local health departments, the Home Office’s contracted accommodation providers are contracted to provide a liaison with health services, to provide those residents with health services, and to signpost them to local GPs and other health providers. Local authorities, too, are provided with £3,500 per person to provide their services to those in Home Office accommodation. That, of course, includes public health obligations on local authorities. As the Minister in the other place made clear, the department is going above and beyond the UKHSA baseline by instituting new guidance on the transportation of individuals displaying diphtheria symptoms.
It is clear that this is a very unfortunate consequence of the speed with which Manston was emptied in the run-up to the previous weekend, and steps are now being taken to ensure that all those in accommodation are offered a vaccination for diphtheria. Clearly, there is widespread awareness of the issue now.
On the final point raised by the noble Baroness, Lady Brinton, in relation to the medical facilities at Manston, the comments in July bear no relation to the present position. As I said, I have visited those medical facilities and found them to be very impressive. They are not accommodated in the temporary accommodation to which the noble Baroness referred. Those working in that sphere do a fantastic job, and I thank them for it.
Baroness Chakrabarti (Lab)
My Lords, I am grateful to the Minister for his answer. I appreciate that he has been a Member of your Lordships’ House and therefore, I assume, in his ministerial post for only just over a month, so this is not intended as a personal criticism in any sense. However, I do not understand the logic of saying that this is a consequence of the speed with which Manston was emptied. How did the disease get into Manston in the first place? The Minister may say that people brought the disease from other countries and that it has been spreading within Manston, but we have been living for two years inside a global health emergency. Why has it taken this death and this scandal to now introduce health screening for people arriving at our shores?
Lord Murray of Blidworth (Con)
The answer is clear from Dame Jenny Harries that those with diphtheria contracted it prior to entering the UK. It seems that the conditions through which they travelled in other countries were such that clearly they were able to contract the condition—and that is most unfortunate.
As to the reason why it has taken us so long to take steps in relation to it, I remind the noble Baroness that comprehensive health screening has been available at Western Jet Foil and Manston. As recently as late October, only five cases of diphtheria were found to be present in the population at Manston, and those were not sent onwards to accommodation without being treated. As the noble Baroness, Lady Brinton, pointed out, diphtheria is one of those conditions which can present without symptoms, so it is difficult to screen for. Further steps are being taken to preclude that occurring, as I have outlined.
Baroness Jones of Moulsecoomb (GP)
My Lords, the Minister said that the speed at which Manston was emptied was unfortunate—but of course that was not the problem, was it? The problem was the speed at which Manston was crowded, and for how long those people were held like that. Has the Minister in his department seen any embarrassment or even shame at these events?
Lord Murray of Blidworth (Con)
I agree with the noble Baroness that the reason these problems arose was the speed with which people were crossing the Channel illegally: that gave rise to the condition. The noble Baroness may shake her head, but the reality is that, if these people were not crossing the Channel illegally, the situation would not have occurred.
Baroness Ludford (LD)
My Lords, I share the surprise of the noble Baronesses, Lady Chakrabarti and Lady Jones of Moulsecoomb, that the Government are trying somehow to claim credit for rapidly emptying Manston. The fact is that it has been a story of incompetence and chaos, followed by panic. However, I particularly want to ask about staff in the hotels that the asylum seekers are living in. I have seen assurances from the Government in the press that it is not a problem for the wider community because most British residents are vaccinated. But I have also seen a concern expressed about eastern European staff in some of those hotels who apparently—I am relying on press reports—were not routinely vaccinated in their home countries against diphtheria. Is this something that the Government are paying attention to, because although we talk about “isolation hotels”, there will be some staff contact and, if it is an airborne disease, those staff could be at risk?
Lord Murray of Blidworth (Con)
I entirely get the sense of the noble Baroness’s question. The accommodation, as I say, is run by three contractors on behalf of the Home Office and I would sincerely hope that they are aware of their obligations to their staff to ensure that this is the case. I do not know the precise figures, and I can write to the noble Baroness about that.
Baroness Wheatcroft (CB)
My Lords, Napier barracks in Kent is still being used to house asylum seekers, despite an inspector’s report that said it was not fit for that purpose. Last year, an epidemic of Covid took hold there because of the unsatisfactory accommodation, with up to 24 people in dormitories. Can the Minister assure us that nobody went directly from Manston to Napier; that everybody at Napier is being screened for a disease which he says does not always exhibit symptoms; and that the conditions there are now suitable for people to be held?
Lord Murray of Blidworth (Con)
Taking that question in reverse order, yes, the conditions are now suitable for those held there. I do not have the answer as to whether people were transferred directly from Manston to Napier barracks: I can make inquiries about that and write to the noble Baroness. As for her final point, on the provision of healthcare at Napier barracks, similarly, those operating that accommodation facility will provide healthcare and signpost healthcare facilities to those who are resident there.
Lord Paddick (LD)
My Lords, why will the Government not consider humanitarian visas, where people’s initial application for asylum could be considered in situ and they could be vaccinated against serious diseases before they arrived in the UK?
Lord Murray of Blidworth (Con)
It is because the Government believe in encouraging migration via safe and legal routes, and not by those who choose simply to cross the channel in a small boat.
The Lord Bishop of Durham
I do not think the Minister answered the last question, because the whole point is that a humanitarian visa would be a new safe and legal route and it is one for which many of us have argued for quite some time. It would discourage people from travelling by boat. They could apply for a visa before they came and, as the noble Lord, Lord Paddick, said, they could also be vaccinated before travelling.
Lord Murray of Blidworth (Con)
I understood the noble Lord, Lord Paddick, to ask me whether those who had arrived at Manston should be given a humanitarian visa and be inoculated. That is not the case. On the method that the right reverend Prelate asked about, there are safe and legal routes from the countries that were discussed in the earlier topical Oral Question. Those are the routes that are to be utilised.
Lord Paddick (LD)
If the House will indulge me, I shall clarify my question. The Home Secretary was asked at the Home Affairs Select Committee last week what would happen to a genuine refugee, say from sub-Saharan Africa, where there are no safe and legal routes. Why could someone in that situation not make an initial application in country for a humanitarian visa and be vaccinated in country before they arrive in the UK? The clue in the question I asked previously was “before they arrive in the UK”.
Lord Murray of Blidworth (Con)
The short answer is that that is not the Government’s policy. We have safe and legal routes from the countries that I have already identified, and we do not propose to open any others.
Baroness Hamwee (LD)
My Lords, the Minister said in reply to my noble friend Lady Ludford that he hoped that the private sector companies which fulfil the contracts would have a care for their staff. Is that not something that the Government should urgently check into? Do the Government themselves not have an obligation in the quite unusual circumstances we are talking about? Secondly, what arrangements are there for the families of patients—I call them patients quite deliberately, because that is how we should treat them—who are put into isolation? Are the families kept together? The Minister will understand that there is a whole ream of questions like this which the House would like to know the answers to.
Lord Murray of Blidworth (Con)
As the noble Baroness is aware, the vast majority of those crossing the channel are single young men, so the issue has arisen in relation to single men. I do not know the answer about accommodation for any potential family members, but I will certainly ask the department and inform the noble Baroness of the outcome.
Baroness Jones of Moulsecoomb (GP)
May I have an answer to my question about shame or embarrassment?
Lord Murray of Blidworth (Con)
I am not sure that that is in order.
Independent Cultural Review of London Fire Brigade
(2 years ago)
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Lord Coaker (Lab)
My Lords, female firefighters groped and beaten, a black firefighter having a noose put on his locker, and a Muslim firefighter having sausage and bacon sandwiches stuffed in his pocket—these are all awful examples, among many more, from the appalling report on the culture of the London Fire Brigade published yesterday. The report says that such abuse was shockingly often dismissed as being just banter. Do the Government agree that this has to be a watershed moment? How are the Government going to work with the London Fire Brigade commissioner, Andy Roe, to deliver the much-needed cultural change quickly? What evidence is there that this is a much wider problem than just London, and what are the Government going to do about that? Being shocked is one thing, but what is needed is action.
The Parliamentary Under-Secretary of State, Home Office (Lord Sharpe of Epsom) (Con)
I agree with the noble Lord; the report written by Nazir Afzal makes for deeply troubling reading indeed. The London fire commissioner, Andy Roe, commissioned this review due to his significant concerns about the culture in his own service. The review also followed the tragic suicide of Jaden Matthew Francois-Esprit, a trainee firefighter; my thoughts and sympathies are obviously with his family. I know that all noble Lords will share our sadness and shock at the testimony of those who shared their experiences for this review, to whom I pay tribute for their courage. I assure the House that the Government have taken and continue to drive action in this area. The London fire commissioner has accepted all 23 recommendations in the report, also stating that he will be fully accountable for improving culture. We will take a very close interest in how he intends to implement this.
Baroness Pinnock (LD)
My Lords, this is indeed a deeply troubling report. A life-saving emergency public service is being laid low by corrosively damaging behaviour by a minority of firefighters, despite the obvious dedication of the majority. As the Minister has said, there are 23 recommendations in the Nazir Afzal report. I have a couple of questions. First, will the Minister commit to providing a review of these recommendations within 12 months so that progress can be made and be seen to be made? Secondly, the report exposed the failure of the model of governance. Good governance would have exposed the failings and demanded action well before this horrific bullying, harassment, misogyny, homophobia and racial discrimination was brought to light. What action will the Government take—maybe the Minister can tell us—to remedy this absolute system failure of governance?
Lord Sharpe of Epsom (Con)
I thank the noble Baroness for her questions. I think it is useful to remind the House that the report confirmed that the disadvantage and discrimination that affects brigade staff does not translate into its operations and does not impact on the way the brigade prevents and responds to incidents. It is important to note that and to note our admiration for firefighters, who walk into trouble as opposed to walking away from it.
As for the Government’s response, we should bear in mind that responsibility for London Fire Brigade rests with the Mayor of London, but the Government published a fire reform White Paper in May. That set out proposals to reform the way the fire service supports and values its people. At its heart are plans to improve culture and professionalism and to put ethics at the heart of the service. The Government have also funded a number of important change programmes in the fire sector. We have supported the creation of a new code of ethics for fire and rescue services, setting out clear national expectations for standards of behaviour. The Fire Standards Board, which is funded by the Home Office, has produced fire standards to support the core code of ethics as well as a specific safeguarding standard, supported by guidance from the National Fire Chiefs Council. It will shortly be publishing new fire standards on leadership.
Lord Udny-Lister (Con)
My Lords, could the Minister please advise, first, that responsibility for the London Fire Brigade rests with the Mayor of London, who has a deputy mayor responsible specifically for the London Fire Brigade? So my first point is on governance—what is being done on that? Secondly, what will then be done about removing the individuals who have been clearly identified in this process? We only recently had the report of the Commissioner of the Metropolitan Police on how we could not get rid of large numbers of policemen who need to leave the service quickly. Thirdly, national training has always been an issue for the fire brigade. The central Fire Service College in Moreton-in-Marsh was closed many years ago. It still has not been replaced and there are all sorts of training and governance issues around the fire brigade.
Lord Sharpe of Epsom (Con)
That is very clear; there is fairly evidently a failure of leadership. However, as I mentioned, I commend the leadership of Andy Roe, who commissioned a report into his own brigade. That was courageous and, as I say, he has committed to acting on all the recommendations.
There were two recommendations on getting rid of people. One is for a historical review of complaints, which will obviously investigate potential historical injustices. I imagine that will have some sort of component to do with removing people.
I am happy to confirm that the Mayor of London has operational responsibility for this, along with his deputy. That is on the website, and he claims it for himself. This is not blaming; it is merely stating a fact.
Baroness Chakrabarti (Lab)
My Lords, I am grateful to the Minister for his answer. He knows that I am always happy to examine issues of governance and new legislation where that is required, be it for the fire brigade or the police, which we will discuss in the debate of the noble Lord, Lord Lexden, on Thursday. But what is happening in our country? What is happening to the culture of kindness, decency and mutual respect among our fellow citizens and, it seems, I am sorry to say, particularly some men in our country? We now have these allegations—more than allegations; we have case after case in the Metropolitan Police, these new revelations about our much-needed and respected fire service and allegations of bullying in the Palace of Westminster, even at senior Cabinet level. The Deputy Prime Minister is now being investigated for bullying. Will we hear from the Minister for Equalities or from the Prime Minister—the first non-white Prime Minister—who has small daughters for whom he no doubt cares and is concerned? Will we hear some leadership on the culture of dignity and decency in our country?
Lord Sharpe of Epsom (Con)
I cannot speculate about what the Prime Minister might say so I shall speak for myself. I agree with the noble Baroness: I am disturbed by many of these reports that I have to stand here and talk about.
Lord Paddick (LD)
My Lords, rather than concentrating on who is to blame, should the Government not be focused on solutions? What have they done to look at parallels between this report and that of the noble Baroness, Lady Casey of Blackstock, into the Metropolitan Police? What are the common lessons and what, therefore, are the urgent steps that need to be taken in both the police service and the fire brigade?
Lord Sharpe of Epsom (Con)
I think I made it abundantly clear that I was blaming no one; I was stating a fact. I also made it very clear that we published a fire reform White Paper in May and that Andy Roe has committed to acting on all 23 recommendations.
Baroness Warsi (Con)
My Lords, if the Minister is open to suggestions for solutions, may I ask him to take one away? Many years ago, the Government committed to finding a definition of Islamophobia. There is an agreed definition which has been adopted by all political parties in Parliament, including the Conservative Party in Scotland. The Government, however, have not adopted that definition. There was a report recently of a private meeting at which it was suggested that the Government had dropped their work on the definition of Islamophobia, but a No. 10 spokesman subsequently confirmed that that is not correct. Can my noble friend please investigate whether this work is continuing, and, if so, can he say when we can find an agreed definition and when that is likely to be published?
Lord Sharpe of Epsom (Con)
The simple answer to my noble friend is that I am afraid I do not know but I will endeavour to find out.
Baroness Falkner of Margravine (CB)
My Lords, I start briefly by saying to the Whips that when we have an Urgent Question, we cannot entertain speeches, because several of us would like to contribute—I say that very respectfully. I declare that I am chair of the Equality and Human Rights Commission, and I just have a simple point that I would like the Minister to emphasise. The noble Baroness, Lady Chakrabarti, rightly spoke of a spread of incidents across different public sector organisations where things have gone appallingly wrong. Will the noble Lord consider that all the organisations that have been mentioned today are covered by the public sector equality duty, which they are required in law to have due regard to? What is his assessment of why they have disregarded that duty?
Lord Sharpe of Epsom (Con)
I am not sure that it is the organisations that have disregarded the duty, but clearly, individuals within them have. Obviously, that is part of a larger discussion, and I will take that suggestion back.
Export Control (Amendment) (EU Exit) Regulations 2022
(2 years ago)
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Viscount Younger of Leckie
That the draft Regulations laid before the House on 20 October be approved.
Viscount Younger of Leckie (Con)
My Lords, I am pleased to open this debate. The aims of this statutory instrument are threefold: first, to make technical amendments to the Export Control Order 2008 to implement the EU dual-use regulation, which applies in Northern Ireland by virtue of the Northern Ireland protocol; secondly, to correct an error introduced in an earlier instrument; and thirdly, to remove the Russian Federation as a permitted destination from the scope of certain general export authorisations.
I will start by giving some background. This instrument amends legislation relating to the export controls of the United Kingdom. This is a technically complex area of law. The export controls to which this instrument relates are specifically “strategic” exports; these include goods, software and technology capable of having a military use. In particular, the exports to which this instrument relates are “dual-use” exports: that is, exports that are capable of both civilian and military uses. The restrictions applying to strategic goods, software and technology are known as “controls” and can take different forms. There may, for instance, be controls relating to dual-use items and to end uses relating to weapons of mass destruction. Controlled items may be licensed for export; exporting controlled items without a licence constitutes an offence.
While the United Kingdom was a member of the European Union it was subject to the EU law on export controls. The EU set out a number of controls relating to strategic exports, as well as extensive lists of goods, software and technology subject to control. As noble Lords will be aware, since the UK’s withdrawal from the EU, certain EU rules have continued to apply in Northern Ireland in accordance with the terms of the Northern Ireland protocol. When the United Kingdom left the European Union in 2020, many of the detailed rules describing which strategic goods could not be exported without a licence were set out in European Union law.
I will pause here to say that I will use three distinct descriptions of relevant legislation, which are as follows. First, there is the old EU dual-use regulation which applied to the United Kingdom before our withdrawal from the EU. It continued to apply throughout the EU, and in Northern Ireland in accordance with the Northern Ireland protocol, until 9 September 2021. Secondly, there is the retained dual-use regulation. This is the version of the old EU dual-use regulation that was retained in UK law when we left the European Union. It applies in Great Britain. Thirdly, there is a new—I will use the EU word, “recast”—EU dual-use regulation, which came into force on 9 September 2021. Recast essentially means, in this instance, to revoke and replace. The recast dual- use regulation replaced the old dual-use regulation in the EU. Since 9 September 2021, the recast dual-use regulation has applied automatically in Northern Ireland in accordance with the rules of the Northern Ireland protocol.
The recast dual-use regulation sets out the rules that govern the export of dual-use goods, software and technology from the EU and Northern Ireland. This includes new controls on cyber surveillance items and technical assistance, which provide for additional controls relating to EU member states’ national control lists. For regulatory purposes, the recast dual-use regulation is incomplete. It sets out controls on dual-use items but does not provide the necessary legislative detail on how to license exports of those items, the offences applicable for breaching controls or the applicable customs enforcement powers. These matters have been left for domestic implementation.
In this case, the regulation that we are seeking to ensure functions properly controls the export of dual-use goods—that is, goods that have both a military and a civilian use. The statutory instrument before us aims to make the necessary changes to the Export Control Order 2008 to ensure that the recast dual-use regulation is properly connected to the existing domestic law provisions on licensing, offences and customs enforcement. To that extent, it provides for the technical implementation of the United Kingdom’s obligations under the Northern Ireland protocol, rather than representing a change in export control policy.
I will briefly give some further detail. I would like to clarify that these regulations are subject to the draft affirmative procedure because they modify criminal offences to make the new European Union controls on cyber surveillance items, technical assistance and national control lists operable in Northern Ireland. Paragraph 8F(1) of Schedule 7 to the European Union (Withdrawal) Act 2018 specifies that instruments that make provision falling within paragraph 8F(2) must be made using the draft affirmative procedure.
I will now explain what these regulations do, first with respect to the changes made to the Export Control Order, then with respect to the changes to the retained dual-use regulation. First, with respect to the order, Regulation 3 updates and clarifies definitions relating to the recast dual-use regulation as it applies in Northern Ireland and the retained dual-use regulation as it applies in Great Britain. Secondly, Regulations 4 to 8 and 15 and 16 update various cross-references to refer to the recast dual-use regulation. References to Article 20(1) of the old dual-use regulation, for instance, have been updated to refer to the equivalent provision in Article 27(1) of the recast dual-use regulation.
Thirdly, Regulations 9, 13 and 17 modify the offences provisions in the Export Control Order 2008 to cover the new controls in the recast dual-use regulation—that is, they make it an offence to contravene the prohibitions and restrictions in the recast dual-use regulation, and specify applicable penalties. They also distinguish more clearly between the offences applicable in Northern Ireland and those that are applicable in England, Wales and Scotland. Specifically, Regulation 9 limits the application of Article 35 of the Export Control Order 2008 to offences relating to the retained dual-use regulation as it applies in England, Wales and Scotland, while Regulations 13 and 17 create new offences in Northern Ireland in respect of the new controls in the recast dual-use regulation.
Fourthly, Regulation 10 both updates certain cross-references to the recast dual-use regulation and extends HMRC’s customs powers in Northern Ireland in respect of the new controls.
Fifthly, Regulation 12 updates a cross-reference to a Council directive of 18 June 1991 on control of the acquisition and possession of weapons, also known as the EU firearms directive. This too was replaced by an updated directive on the same subject matter, EU directive 2021/555, which came into force on 26 April 2021. The new directive now also applies in Northern Ireland, in accordance with the Northern Ireland protocol, and it is appropriate that we update this cross-reference accordingly.
I turn to the amendments made by this instrument to the retained dual-use regulation. First, Regulation 19 corrects an error in an earlier instrument made during the withdrawal of the United Kingdom from the European Union. It reinstates the Secretary of State’s power to refuse, annul, suspend, modify or revoke brokering services authorisation in the retained dual-use regulation. Secondly, Regulations 20 to 22 amend the retained dual-use regulation to remove the Russian Federation as a permitted destination in certain general export licences which apply in Great Britain.
I am sure your Lordships will recognise that this is a necessary step in light of Russia’s illegal invasion and annexation of Ukraine’s sovereign territory. If that was not enough, I add that the remaining regulations are genuinely minor and technical, and made in consequence of the amendments set out above. I beg to move.
Lord Lennie (Lab)
My Lords, I thank the Minister for that extraordinarily thorough and historic briefing on the substance of these regulations. It is very welcome.
As we have heard, these regulations do three things. They make the necessary changes to ensure that the new regulations of the European Parliament operate effectively in Northern Ireland. They amend the Council regulation to correct a deficiency arising from the UK’s withdrawal from the EU, and they remove the Russian Federation as a permitted destination from the scope of certain export authorisations. Consequently, Northern Ireland can continue to operate dual-use regulations effectively. As we have heard, dual-use items are those that can be used for both civilian and military purposes.
The Secretary of State’s powers that were mistakenly taken away during the transition from the EU have been reinstated. These are powers to refuse, annul, suspend, modify or revoke brokering authorisations, and the Russian Federation is rightly removed as a permitted destination for certain general export authorisations. These changes became necessary, as the Minister said, after the EU modernised its export control system and in May 2021 adopted the recast EU dual-use regulation. This statutory instrument makes it operational in Northern Ireland.
The mistake of removing the Secretary of State’s powers is corrected, but did its removal have any effects in the period before it was reinstated? Were they forced to act without the cover of the law? The removal of Russia as a permitted destination for exports follows on from a broader policy of measures taken following its continuing aggression towards Ukraine. On this side of the House, we support this necessary updating of policy.
Viscount Younger of Leckie (Con)
My Lords, that was quite a short debate. I thank the noble Lord, Lord Lennie, for his equally short speech. There was a little bit of detail in it, though certainly not as much as in mine. I will look at Hansard and write to him answering his questions.
I conclude this extremely short debate by saying that the United Kingdom operates one of the most robust export control regimes in the world. We keep our export controls under careful and continual review. The United Kingdom also works with like-minded countries through international control regimes to decide what and how strategic goods should be controlled.
An answer has just been given to me. The drafting error was a simple mistake, which officials have identified and will now correct. The correction reinstates the Secretary of State’s power to refuse, annul, suspend, modify or revoke licences granted to brokers. The power is infrequently required, and the Secretary of State has had no need of it since the mistake was made, but essentially it was a simple mistake.
Internal Market Information System Regulations (Amendment etc.) Regulations 2021
(2 years ago)
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Lord Callanan
That the draft Regulations laid before the House on 20 July 2021 be approved.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
Noble Lords will understand the importance of protecting citizens and businesses through the effective and efficient operation of the Northern Ireland protocol. This instrument will form part of the UK’s delivery of the protocol. It also serves to tidy up the statute book by removing provisions relating to access to the EU’s internal market information system database that are redundant or inoperable as a result of the UK’s departure from the EU. I hope noble Lords agree that it is important that our statute book provides a clear and up-to-date picture of UK law for the benefit of UK public authorities, businesses and citizens.
The internal market information system, which I will refer to as the IMI, is a secure online tool used to facilitate the EU single market. It was created to address problems of ineffective, unsecure and inefficient communication between EU member states and between EU member states and the European Commission. The IMI is hosted and maintained by the European Commission.
At the end of the implementation period, the EU blocked the UK’s access to the European Union’s networks, information systems and databases. Under the Northern Ireland protocol, however, the EU can grant the UK access to the systems it considers necessary to enable the UK to comply with its obligations under the protocol.
The European Commission, in its decision of 16 October 2020, granted the UK limited access to the IMI to allow the UK to fulfil certain obligations under EU legislation which continue to apply in respect of Northern Ireland under the Northern Ireland protocol and which I will set out in more detail shortly. The UK’s access to the IMI has otherwise been removed.
EU regulation 1024/2012 on administrative co-operation through the IMI sets out the legal framework for the use of the IMI. This regulation remains in force in the UK as retained EU law under the European Union (Withdrawal) Act 2018 and applies in areas where access to the IMI is retained.
This instrument does not make any policy changes, impose any new obligations or create any new powers. It removes redundant provisions that are inoperable, where UK access has already been removed by the European Commission on the grounds that it is no longer required. In particular, it removes references concerning legislative areas in respect of which the UK does not have access to the IMI, including the services directive, the recognition of professional qualifications, patients’ rights relating to cross-border healthcare, posted workers, public documents and non-road mobile machinery.
It also clarifies that the regulation applies in respect of Northern Ireland only in order to facilitate communications and the exchange of information for three general purposes, as I will explain. The first is to facilitate mutual recognition of goods lawfully marketed in another member state. EU regulation 2019/515 sets out a framework for ensuring that goods lawfully marketed in one EEA state can be sold in any other EEA state, as long as they are safe and respect the public interest.
The regulation provides that economic operators who consider that their rights under this regulation have been breached by a public authority of another EEA state can use the single market problem-solving network, SOLVIT, to try to find solutions without the need to resort to action in court. SOLVIT is hosted on the IMI. If a decision was made by a UK public authority to deny entry to the Northern Ireland marketplace goods sold in an EEA state, and the EEA economic operator considered this was incompatible with this regulation, he could lodge a case through SOLVIT. The IMI SOLVIT co-ordinator for the UK, based in my department, would then review the case and engage with the responsible authority in the UK to agree a response to the case to be submitted through the IMI.
Lord Stevenson of Balmacara (Lab)
My Lords, I am sorry that the very interesting and, to me, quite new explanation for the IMI, and its rather interesting resonances for cultural goods and other material that needs to be notified from country to country, has not attracted a wide number of speakers. However, I will do my very best to enliven the House for a few seconds while we get to the point at which we make a decision about these important regulations.
My first question is very simple, and I was surprised that the Minister did not mention this in his introduction. Why the delay? This instrument was originally laid on 20 July 2021. It is still referred to as a 2021 regulation, although it seems to me that we are in 2022, almost 2023. There must be an explanation. It might be eluding the Minister at the moment, but I am sure that inspiration will arrive very shortly from the Box. We will wait for that to occur. It may or may not be important, but it links to what I want to say at the end. I therefore make the point now and look forward to the response.
It is very unusual for this House to have the leisure of so much time to consider regulations in any detail. Those of us who have struggled under many years of Conservative government legislation will know that we are often under pressure to read and respond to material at short notice. The idea that one has nearly 24 months to respond is one I could get used to very quickly.
Secondly, why is this being done at all? The main purpose here is to eliminate from the UK statute book things that are no longer relevant or which resonate with material relating to those who work or operate in parts of the United Kingdom other than Northern Ireland, so that the statute book is not cluttered up with that. However, as I understand it, but perhaps I am out of date, there is to be an EU Bill shortly which will do exactly the same thing. Perhaps I am reading something incorrect into these regulations, and if so, perhaps the Minister will correct me when he responds. However, this seems to be ahead of the plans of the former Secretary of State and his department. Of course, given that change, perhaps that Bill is no longer happening, but as I understand it the intention was to go through all the legislation retained after we left the EU to make sure that the statute book was uncluttered by it, yet here we have a statutory instrument doing that very job. Why is that?
Thirdly—I mention this because it raises issues relating to some of the affected material—we have not had an impact assessment and no consultation has taken place, as I understand it, on this statutory instrument. That is unusual, but not in relation to material carried forward from the exit from the EU. However, it would be helpful to those of us who have to consider these matters if we knew who precisely was affected. When he responds, can the Minister name any company or organisation that would be more profitable or even affected by the passing of this legislation? I look forward to his response.
Lord Callanan (Con)
My Lords, I join the noble Lord in expressing my regret that this major piece of legislation has not attracted more speakers. Nevertheless, it is quality that counts, not quantity, and I thank the noble Lord for his intervention. As I previously set out, this instrument makes a series of technical amendments to reflect the current position regarding the UK’s access to the IMI. By updating the statute book, this instrument provides clarity for public authorities, businesses and citizens about how and when data previously shared between UK, EU member states and the European Commission is now treated following the UK’s departure from the EU. As I said in my opening speech, it introduces no new obligations, costs or powers and will not change the service provided by public authorities to UK businesses and citizens under the Northern Ireland protocol.
In response to the noble Lord’s question about what businesses would be affected, the answer is none. This instrument removes references to legislation which previously facilitated IMI access. Access was necessary to enable the UK to comply with its obligations under single market legislation while we were a member state. Now that we have left the EU, this instrument updates the statute book to reflect the areas where access has already been terminated by the European Commission on the grounds that UK access is no longer required. In other words, access is no longer necessary to support compliance under the Northern Ireland protocol. Therefore, this instrument removes references containing legislative areas in respect of which the UK does not have access to the IMI, including the services directive, recognition of professional qualifications, patients’ rights relating to cross-border healthcare, posted workers, public documents and non-road mobile machinery.
Public authorities will nevertheless continue to have access to the IMI modules relating to disputes concerning mutual recognition of goods, the return of cultural goods and firearms transfers, as I outlined earlier. This will support continued communication, administrative co-operation and data-sharing between regulators in those areas. As required by the specific legislation, it continues to apply in Northern Ireland. The instrument facilitates such co-operation where required without the need to establish new secure channels of information and communication with individual EU member states and the European Commission.
In response to the noble Lord’s question about why this instrument is so late, the answer is that the UK was given a right of access to the IMI under the withdrawal agreement for a period of nine months in order to finalise any outstanding applications for professional qualification recognition under the European professional card route from general system nurses, pharmacists and physiotherapists. The UK agreed to the EU’s decision to extend the UK’s right of access to the IMI beyond the deadline, as applications were still outstanding beyond that period. The making of this instrument therefore had to be delayed so as not to remove the UK’s ability lawfully to access the IMI for this purpose. The need for temporary access has now been resolved, and we are in a position to progress the instrument. I hope that resolves the noble Lord’s query.
As I have set out, this instrument ensures that UK public authorities can continue to access the IMI where necessary to allow them securely, effectively and efficiently to deliver their obligations under the protocol, while ensuring that the UK statute book accurately reflects the changes in access to the IMI following the UK’s departure from the EU.
I hope I have resolved the noble Lord’s query, and I commend these regulations to the House.
Food and Feed (Miscellaneous Amendments) Regulations 2022
(2 years ago)
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Lord Markham
That the draft Regulations laid before the House on 24 October be approved.
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Lord Markham) (Con)
This instrument is made under powers in the European Union (Withdrawal) Act 2018. It follows on from the previous EU exit instruments in the field of food and feed safety made since 2019. The Government’s priority is to ensure that we continue to maintain the high standards of food and feed safety and consumer protection we have established. The principal changes introduced by this instrument will ensure that national and GB-wide legislation continues to operate effectively following the UK’s exit from the EU.
The purpose of this instrument is to: amend England regulations in the fields of articles in contact with food, extraction solvents and animal feed to remove cross-references to EU directives and correct other EU exit-related inoperabilities; address a range of remaining deficiencies in retained direct EU legislation in the field of food and feed safety and hygiene to ensure the continued operability of this legislation after exiting the EU; address inoperabilities that have arisen as a consequence of previous deficiency amendments made pursuant to EUWA 2018; extend the tolerance period of three withdrawn genetically modified organisms, GMOs, for a further three years, until 31 December 2025, to align with the correction of a deficiency in retained EC regulation 619/2011; and provide for a time-limited transitional period for edible insects, specific to Great Britain. This will permit qualifying edible insects to remain on the market in GB after 31 December 2023 while applications for novel food authorisation are considered by the appropriate authority.
Let me be clear that this instrument does not introduce any changes that will impact the day-to-day operation of food and feed businesses, nor does it introduce any new regulatory burden. The essence of existing legislation is unchanged.
It is important to note that the devolved Governments have some shared and devolved legislative responsibilities in relation to food law. Both Scotland and Wales have provided their consent for the instrument. Amendments brought forward by the instrument do not apply to Northern Ireland. In accordance with the Northern Ireland protocol, EU regulations will continue to apply. However, the Northern Ireland Department of Health has been briefed. We have engaged positively with the devolved Governments throughout the development of the instrument, and I take this opportunity to note that their ongoing engagement has been warmly welcomed.
I take the opportunity to assure noble Lords that the overarching aim of these regulations is to provide continuity for business and to ensure that high standards of safety and quality for food and feed regulation will continue across the UK. The changes do not affect the essence of existing legislation. They address a range of deficiencies in retained direct EU legislation on food contact materials, extraction solvents and animal feed arising from EU exit. They will ensure that appropriate legislative provision is in place to extend the transitional period for the trace presence of withdrawn GMOs in food and feed. Finally, they will provide a time-limited transitional period for edible insects to remain on the market in GB.
Having effective and functional law in this area is key to ensuring that the high standards of food safety and consumer protection we enjoy in this country are maintained in the immediate and long term. I ask noble Lords to support the amendments proposed in this instrument to ensure the continuation of effective food and feed safety and public health controls. I commend the regulations to the House.
Baroness McIntosh of Pickering (Con)
My Lords, I thank my noble friend the Minister for bringing forward the statutory instrument this afternoon. While I am, overall, in support of the regulations contained in the instrument, I have two brief questions.
The Government seem to have a certain resistance to the labelling of food—whether it contains GMO, gene- edited or other ingredients. I note with some interest that the Explanatory Memorandum at paragraph 7.6 says that, until we adopt the regulations before us this afternoon, there has been a requirement to use a “Do not eat” pictograph on the products referred to in that paragraph. I would be interested to know the differences between a pictograph and a label. As we move towards adopting our own regulations—as I understand is the Government’s intention going forward—will the Government look favourably on clearly labelling food- stuffs of interest to the consumer where they contain ingredients made from GMO, gene-editing or any similar method, such as in novel foods, which are also referred to here?
It would be interesting know what purposes are intended for the edible insects—they sound most appetising, or perhaps not—which are referred to throughout the regulations. Are they for human, animal or pet consumption? For what purposes are they used?
My last question is: which authorities will implement the regulations before us this afternoon? Will it be the environmental health officers of local authorities? Does my noble friend share my concern that the way that such regulations are being implemented across England, in particular, is patchy owing to the fact that budgets are, obviously, under extreme pressure at the moment? I would be interested to know which will be the implementing authority.
I said that was the final question; I lied. I would like to ask one more question if I may. What will happen to this regulation—and, presumably, one to come for Northern Ireland should this one not apply to Northern Ireland—under the provisions of the retained EU law Bill?
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I thank the Minister for his introduction to this very interesting statutory instrument, which does, as its title indicates, cover a real bag of miscellaneous items.
The SI provides for the first time for edible insects specific to Great Britain to remain on the market until December 2023. I could not think of an insect specific to Great Britain that I would wish to eat. Having searched the internet, I found that I could buy crunchy crickets and other delicacies, but these did not appear to be indigenous to Great Britain. Can the Minister tell the House to which edible insects this regulation actually relates?
Further on in the Explanatory Memorandum, there is reference to
“regenerated cellulose film intended to come into contact with foodstuffs”.
Having had discussions in the past with the then Minister for Defra, the noble Lord, Lord Goldsmith, about the possibility of recycling this film, I was interested to see it popping up here with conditions for how it was to be used but, sadly, no mention of how it might be recycled.
In Part 3 of the regulations, Regulation 8 covers the use of
“additives for use in animal nutrition”,
which should be fairly straightforward, one would think. A definition of “veterinary medicinal product” used in this context covers
“any substance … having properties for treating or preventing disease in animals”.
However, the definition of “substance” is:
“any matter, irrespective of origin, which may be … human, including human blood and human blood products”,
or “
“animal, including micro-organisms, whole animals, parts of organs, animal secretions, toxins, extracts and blood products”.
Are these really to be used to treat animals that are sick?
Schedule 3 to the regulations lists feed materials that may be included for animals. These include:
“All the fleshy parts of slaughtered warm-blooded land animals … and … all products and derivatives of the processing of the carcase or parts of the carcase of warm-blooded land animals”.
I can see the benefit of this for a safari park or a zoo but, perhaps, not so for farm animals or companion animals. Is the Minister satisfied with the rigorous testing of these products and that no further incident such as occurred with the outbreak of BSE, when sheep brains were fed to cattle, could occur in the future?
New paragraph 1A(i) in Regulation 9 refers to the health hazard of parasites in fishing grounds but makes no mention of whether the discharge of sewage into fishing grounds could be a hazard. I will not ask the Minister to comment on that.
Lastly, Regulation 19 deals with the authorisation of genetically modified materials and appears to extend that to 30 December 2025. Why could that extension not have been included in the precision engineering Bill, which is currently making its passage through the Lords? Are such products to be labelled as genetically modified? The noble Baroness, Lady McIntosh, has already referred to labelling.
As I have said, this SI covers a large number of issues, too numerous to mention today, and contains some corrections of previous errors. While I find some of the SI extraordinary, I do not oppose its passage.
Baroness Merron (Lab)
My Lords, I thank the Minister for introducing the regulations and the thinking behind them. I accept the assurances that he has given. We on these Benches welcome the regulations, which are about trying to correct the drafting errors and inconsistencies that have inevitably emerged. I say that with no criticism; this is a complex area, and there is a need to tidy up regulations following exit from the European Union.
It is perhaps timely to take this opportunity to praise the work of the Food Standards Agency, and to note that it is one of the strange things about the changes introduced by the Government that Health Ministers now find themselves talking about animal feed. I am sure the Minister is delighted to do so, and I myself have certainly learned a lot today in preparation.
I turn to the regulations. The instrument generally maintains existing regulations and does not introduce new requirements, exactly as the Minister has said. I note that no concerns were raised by the Joint Committee on Statutory Instruments or the Secondary Legislation Scrutiny Committee, so I am sure that is cause for celebration on the Government Benches.
We in this country have a good food safety system, and this SI, as others may do, simply tries to ensure that that continues. The problem is of course that the world did not stop when it came to the implementation period completion day. As paragraph 7.13 of the Explanatory Memorandum tactfully puts it, “certain difficulties” emerge,
“especially in relation to the approval of new, or amendment of currently authorised, substances.”
Could the Minister help by elaborating on the difficulties that are posed and any potential costs? What happens with regard to trade when we operate to different standards from those of our near neighbours? The SI addresses the administrative challenge but does not seek to solve the problem.
Similarly, where the review process is described in paragraph 7.15, it would be helpful if the Minister could clarify the circumstances in which the Food Standards Agency will be required to review the operation and effect of the regulations. If, for example, a new extraction solvent is approved in the EU, does that automatically trigger a review? Will the Food Standards Agency be required to undertake additional processes to deliver on that? If so, has an assessment been done of whether the FSA has the capacity to undertake such duties, or can the Minister advise whether the FSA will be getting additional resources?
There is the issue of the “Do Not Eat” pictograph, which is referenced in paragraph 7.22. This states that we cannot use it because of “uncertainty” over the intellectual property rights applying to the ownership of the picture, which seems a bit strange because there must be similar cases of artwork where such provenance is uncertain. Was it asked whether we could use it, and was any uncertainty flagged up at the time? How much would a licence have cost? It is probably right to say that it seems a strange way to proceed if we cannot agree on joint use of an existing symbol to promote food safety. That suggests some problems on which the Minister may wish to comment.
I want also to reference the need to reinstate powers to extend the transitional period for the trace presence of withdrawn genetically modified organisms. There is considerable interest in genetic modification, as we know, and some concern that rules on imported products are inconsistent with rules governing domestic production. Can the Minister say a little about the scale of the issue? For example, just how much oilseed rape is there with traces of the withdrawn GM products referenced in this case?
If the Minister is not able to answer the detail of the points that I have raised, I will be pleased to hear from him in writing. We from these Benches certainly welcome the statutory instrument, and thank him and his team for their efforts.
Lord Markham (Con)
My Lords, it is my duty to close this important debate. Your Lordships perform an essential role in scrutinising the measures we have put forward today, and I thank all noble Lords for their contributions. Let me turn, as best I can, to answering some of the points raised. Where I do not quite succeed, I will gladly follow up in writing.
First, my noble friend Lady McIntosh of Pickering asked for an explanation about the pictograph. My understanding is that it is a picture which does not depend on a specific language to understand it. On what happens regarding the IP rights behind it, my understanding—again, I will confirm this—is that a number of questions were asked as to the ownership of those rights. The IP ownership was unclear, so the process for even trying to license it was not clear. That was the issue at hand, but I will come back with further detail on it.
Turning to the other questions, my noble friend Lady McIntosh asked how the SI will affect the retained EU law Bill. The Food Standards Agency is carefully considering the scope of the powers in the retained EU law Bill and whether they can be used to deliver a better, bespoke British system of food safety. Those will all be part of what we go through in the coming weeks and months.
On the labelling of GM and other foods, there are regulations requiring mandatory measures in the traceability and labelling of GM products. This is seen as necessary to inform a consumer about their choice whether to buy and eat GM food, so that will take place in all these cases. The noble Baroness, Lady Merron, asked about the level. My understanding is that it is a minor trace level, consistent with what exists today, but, again, I will follow up on the detail of that. We have been working with the FSA in these areas, which feels that it is in a position to answer and regulate in this area.
Perhaps my favourite question related to edible insects; I only wish I had known about this before “I’m a Celebrity… Get Me Out of Here!” They are apparently for human consumption. I can write on this if noble Lords let me know whether they would like the Latin or the English version, but they are apparently: the lesser mealworm, the house cricket, the yellow mealworm, the banded or decorated cricket, the bird grasshopper or desert locust, the migratory locust, and the black soldier fly. I will not try to read the Latin out for each of those, but I will happily put them down in writing.
I was asked why this could not be included in the precision breeding Bill. The wider question of the future of precision breeding and gene editing is not considered by this SI and would be a matter for the Secretary of State for Environment, Food and Rural Affairs. For now, the commercial cultivation of gene-edited plants and any food products derived from them will still need to be authorised in accordance with existing GMO rules.
On the question of the noble Baroness, Lady Bakewell of Hardington Mandeville, on safety going forward, as I said, our approach to food safety is and always will be underpinned by three principles: that UK food remains safe and what it says it is; that the high standard of food safety and consumer protection that we enjoy in this country is maintained; and that, following our exit from the EU, a robust and effective regulatory regime is in place, which means that business can continue as normal.
I hope that I have answered the detailed questions. Like the noble Baroness, Lady Merron, I did not expect to need to understand this as part of my brief, but it is part of the rich variety of my job. I thank noble Lords for their questions and their support, generally, for our proposals. To reiterate: these regulations are critical to ensure that the UK consumer continues to enjoy the high standards of safety and quality provided by UK food and feed regulations. This instrument makes no changes to policy or to how food and feed businesses are regulated, and it is limited to necessary amendments to ensure that.
Baroness McIntosh of Pickering (Con)
I press my noble friend on what the implementing authority will be.
Lord Markham (Con)
I apologise; I will definitely need to come back in writing on this, but my understanding is that, at a local level, it will be local authorities. I am grateful for noble Lords’ contributions and the sincerity of their views.
Autumn Statement 2022
(2 years ago)
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Baroness Penn
That this House takes note of the Autumn Statement 2022.
The Parliamentary Secretary, HM Treasury (Baroness Penn) (Con)
My Lords, it is a privilege to open this debate on behalf of the Government and to set out today our plan to tackle the cost of living and to rebuild our economy. I start by welcoming the noble Baroness, Lady Lea of Lymm, to the House, and I look forward to hearing her maiden speech. I congratulate all noble Lords on their dedication to this debate over other, footballing matters that may be happening this evening.
The Government’s priorities in this Autumn Statement are
“stability, growth and public services”.
We have been honest about the challenges we face and fair in our solutions. We have taken difficult decisions to tackle inflation and to keep mortgage increases down but, in doing so, we have protected the most vulnerable. Our plan will lead to a shallower downturn, lower energy bills, lower interest rates, higher long-term growth and a stronger NHS and education system.
I turn to the first priority in the Autumn Statement: stability. High inflation is the enemy of stability. The Office for Budget Responsibility confirms that “global factors” are the primary cause of current inflation. The world is still dealing with the fallout from the Covid pandemic: furlough, vaccines and the response of our NHS protected us from the worst of the pandemic, but they all need to be paid for, and the lasting impact on the supply chains has made goods more expensive. This has been made worse by an energy crisis made in Russia. Since Putin’s invasion of Ukraine, wholesale gas and electricity prices have risen to eight times their historical average. The OBR forecast the UK’s inflation rate to be 9.1% this year and 7.4% next year. However, inflation is higher in Germany, the Netherlands and Europe, and the OBR has confirmed that our actions in the Autumn Statement will help inflation to fall sharply from the middle of next year.
Higher energy prices have fed through to forecasts for growth. Overall, this year, the economy is still forecast to grow by 4.2%. GDP is then forecast to fall by 1.4% in 2023, before rising to 1.3% in 2024, and 2.6% and 2.7% in the following years. This has also impacted our public finances, so we need a clear plan to support our economy and to restore our public finances.
The decisions that the Chancellor made in the Autumn Statement mean that, over the next five years, borrowing will be more than halved. This year, we are forecast to borrow 7.1% of GDP; next year, it will be 5.5% of GDP; and, by 2027-28, it will fall to 2.4% of GDP. The Chancellor also confirmed two new fiscal rules: first, that underlying debt must fall as a percentage of GDP by the fifth year of a rolling five-year period, and, secondly, that public sector borrowing over the same period must be below 3% of GDP. In short, as growth slows, we will use fiscal policy to support the economy; then, once growth returns, we will increase the pace of consolidation to get debt falling. With just under half the £55 billion of consolidation coming from tax, and just over half coming from spending, this is a balanced plan for stability.
I turn now to our plans for tax. Our decisions on tax have been guided by two broad principles: we are asking those who have more to contribute more, and we will avoid the tax rises that most damage growth. On personal taxes, we are reducing the threshold at which the 45p rate becomes payable from £150,000 to £125,140. At the same time, we are maintaining at current levels the income tax personal allowance, the higher rate threshold, the main national insurance thresholds and the inheritance tax thresholds for a further two years, until April 2028.
We are also reforming allowances on unearned income, something that we have discussed many times in this House. The dividend allowance will be cut from £2,000 to £1,000 next year and then to £500 from April 2024. The annual exempt amount for capital gains tax will be cut from £12,300 to £6,000 next year, then to £3,000 from April 2024. Those changes still leave us with more general core personal allowances overall than countries such as Germany, Ireland, France and Canada.
On business taxes, we have decided to freeze employers’ NICs thresholds until April 2028, but we will retain the employment allowance at its new, higher level of £5,000. That means that the smallest 40% of businesses will still pay no NICs at all. On VAT, we already have a registration threshold more than twice as high as the EU and OECD averages, but we will maintain it at its current level until March 2026. We will implement the internationally agreed OECD pillar II global corporation minimum tax rate and take further steps to tackle tax avoidance and evasion. Together those measures will raise an additional £2.3 billion by 2027-28.
We will also increase the energy profits levy from 25% to 35% from 1 January until March 2028, and we will introduce a new temporary 45% levy on electricity generators, reflecting the fact that the structure of our energy market creates windfall profits for low-carbon electricity generation too. Together those taxes will raise more than £14 billion for the public purse next year.
Finally, on business rates, we believe that bills should accurately reflect market values and so will proceed with the revaluation of business properties from April 2023. However, we will soften the impact on businesses, with nearly £14 billion of support over the next five years. Nearly two-thirds of properties will not pay a penny more next year.
Just as we want to support businesses, we need to provide a shelter for those most at risk from the economic storm. To do so, we are uprating pensions and benefits by 10.1% next year, and we are accepting the recommendation of the Low Pay Commission to increase the national living wage by 9.7% next year, which is worth more than £1,600 to a full-time worker. We are also providing £55 billion in help for households and businesses with their energy bills, one of the largest support plans in Europe. This includes continuing the energy price guarantee for a further 12 months from April at a higher level of £3,000 for the average household.
Despite some difficult decisions, we are protecting our public services, with funding rising in real terms over the next five years. Overall departmental spending will grow at an average of 3.7% per year over the spending review 2021 period, but departments will be required to find efficiency savings to manage pressures from inflation. After the spending review period, day-to-day spending will continue to grow in real terms at 1% a year until 2027-28.
This does not mean that there will not be difficult decisions. For example, while we remain committed to the 0.7% ODA target in the longer term, the OBR forecasts show the fiscal situation means that ODA will remain at around 0.5% for the forecast period. In the current global context, we recognise the need to increase defence spending, but we must first review and update the integrated review, written as it was before the Ukraine invasion. Until then, we will continue to maintain the defence budget at least 2% of GDP, consistent with our NATO commitment.
We must promote our security abroad, but we also need to invest in priorities at home. Our first priority is investment in our health and care system. To recruit and retain our dedicated NHS workforce, the Department of Health and Social Care and the NHS will publish an independently verified plan for the number of doctors, nurses and other professionals we will need in five, 10 and 15 years’ time—something that I know this House has called for.
I turn to social care. The 1.6 million employees in the sector are working extremely hard. Local authorities have rightly raised concerns about their capacity to deliver the Dilnot reforms immediately, so we will delay their implementation for two years, allocating the funding to allow local authorities to provide more care packages. We also know that we must expand the capacity of the social care system to free up some of the 13,500 hospital beds that are occupied by those who should be at home.
To expand the capacity of the social care system in England, we will make available up to £2.8 billion of extra funding, increasing to £4.7 billion in 2024-25. To deliver ever greater care, the NHS will also need to look at efficiency savings, but we will still need to invest more to meet our aims. Because of the difficult decisions taken elsewhere, we will increase the NHS budget in each of the next two years by an extra £3.3 billion. Taken together, these actions will ensure that up to £8 billion of additional funding is made available for health and social care in 2024-25.
However, a healthy country is not sufficient; we need a skilled one too, so we are not just going to protect the education and schools budget, we are going to increase it. The core schools budget will rise by £2.3 billion in both 2023-24 and 2024-25, restoring 2010 levels of per-pupil funding in real terms, and the Barnett consequentials mean an extra £1.5 billion for the Scottish Government, £1.2 billion for the Welsh Government and £650 million for the Northern Ireland Executive.
I turn to the third priority in the Autumn Statement: growth. As my right honourable friend the Prime Minister set out in his Mais lecture last year, to grow the economy we need to invest in three things: people, capital and ideas. On people, alongside our investment in schools and the health service, Sir Michael Barber will advise the Government on the implementation of our ambitious skills programme. Just as we look to improve opportunities for those in education, we are determined to help people already in work to raise their incomes, progress in work and become financially independent. That is why we will ask more than 600,000 more people on universal credit to meet a work coach so that they can get the support they need to increase their hours or earnings.
On capital, we remain committed to building the roads, rail, broadband and 5G infrastructure we need. To do so, we will maintain our capital budgets at the same level in cash terms for the next three years. We will proceed with Sizewell C and deliver the key Northern Powerhouse Rail, HS2 to Manchester and east-west rail. We are building new hospitals and rolling out gigabit broadband.
Finally, on ideas, we will continue to support innovation in our economy and remain committed to increasing public funding for R&D to £20 billion by 2024-25. We will also continue our work to support the transformation of scientific breakthroughs into breakout businesses. By the end of this year we will decide and announce changes to EU regulations in five key growth industries: digital technology, life sciences, green industries, financial services and advanced manufacturing. The Chief Scientific Adviser, Sir Patrick Vallance, will also lead new work on how we should change regulations to better support the safe and fast introduction of emerging new technologies.
It has been impossible to condense the full range of action in the Autumn Statement into my opening speech, and I look forward to responding to all noble Lords’ contributions at the end of the debate, but I hope I have been able to demonstrate that in the midst of a global economic challenge, this Government will respond in the way this country does best. United, we will use our resourcefulness and resilience to get through the storm. We will shelter the most vulnerable as we do so. We are taking difficult decisions but, in doing so, we are bringing about stability and security and setting our country up for growth in the days ahead. I beg to move.
Lord Eatwell (Lab)
My Lords, over the past three months, the Government have subjected the British economy to two episodes of extreme foolishness. First came the Truss-Kwarteng episode, going for growth without a coherent strategy and throwing money at the wealthy. Unfortunately for Britain, the ideology and economic reality did not mix. As a result, all Britain is worse off and the poorest suffer most. Then came this Sunak-Hunt episode, described by financial market experts as a “massive overreaction”. This time, political intent was dressed up as technical economics. Again, there was no coherent growth strategy as taxes were raised to an all-time high and massive expenditure cuts in 2024 and 2025 were announced. Why would anyone invest in a Britain that the Chancellor tells us is heading for a recession, not just now but with massive cuts in 2024 and 2025 too? The result is that all Britain is worse off. The two episodes share these common characteristics: no coherent plan for growth and severe damage to the British economy for years to come—a continuation of 12 years of Tory economic incompetence.
In the first half of 2010, with Alistair Darling as Chancellor of the Exchequer, the economy was growing at an annual rate in excess of 3%. Following the May election, with George Osborne as Chancellor, growth came to a shuddering halt. Austerity was the new, destructive policy. Education and local authority support for economic development were severely cut, and the NHS was underfunded. School spending per pupil in England fell by an average of 9% in real terms between 2009 and 2019—before the pandemic—which, according to the Institute for Fiscal Studies, was
“without precedent in post-war UK history.”
The result? England today is one of only a few OECD countries where the young have worse literacy and numeracy skills than 55 to 65 year-olds. Perhaps the Government were trying to balance things up, as they also halved spending on adult education. Is it any wonder there is a skills shortage?
As we know, there are currently major labour shortages in many sectors of the economy. Well over a million British workers are “missing” from the labour force. A significant contribution to the shortage of labour arises from those untreated or waiting for treatment in an overstretched NHS.
Let us add to these “headwinds”, as the Chancellor calls them, the cost of Brexit—another Conservative policy. We do not need to argue over the OBR’s estimate of a permanent 4% loss of GDP, and hence 4% loss of tax revenue: the negative impact of Brexit can be seen all around us, whether in migrant labour shortages, markets lost, SMEs withdrawing from European markets, or the Paris stock exchange overtaking London. The Conservative mayor of Birmingham has now commented on the damage to the economy in his area.
It was not the war in Ukraine that caused the current economic crisis: the war revealed the underlying long-term weakness of the UK economy. That is why the OECD ranks only Russia as a worse economic performer than the UK.
Now, to bookend the Conservative years, austerity is back. Twelve years of policies which have been consistently damaging to the economy raise an important question: why are Conservative Chancellors so incompetent? I think the answer is clear in their rhetoric: the private sector is portrayed as the “wealth creator” that has to carry the burden of funding the public sector. In a speech in 2014, George Osborne referred to
“government as the enemy of business and wealth creation”.
Similarly, in his 2021 Budget speech, Mr Sunak declared:
“Government should have limits”
and that
“my goal is to reduce taxes.”—[Official Report, Commons, 27/10/21; col. 286.]
In the Autumn Statement, Jeremy Hunt maintained the anti-state rhetoric by asserting that
“high-tax economies damage enterprise and erode freedom.”
Tell that to the Scandinavians. The point about these statements is not that reducing the burden of taxation is a bad idea—we all want lower taxes. In appropriate circumstances, cutting taxes may be a very good idea, but underfunding the public sector sources of growth is a very bad one.
However, in the Conservative mindset, the public and private sectors are seen as separate entities competing for resources—what economic nonsense. The private sector depends on top-class research conducted in publicly funded universities, on efficient infrastructure, and on a well-educated, adaptable, healthy labour force. Austerity that cuts spending on schools, libraries, skill centres and Sure Start, and underfunds the NHS, damages the very core of British private enterprise.
The lessons of economic history are clear. When in the latter half of the 19th century Germany sought to compete with the industrial strength of Britain, it created industrial banks to ensure the flow of long-term funding to nascent German industry, and it created the Technische Hochschulen to provide the scientific and engineering expertise to drive German industrial competitiveness. In more recent times, all the important technological innovations in the iPhone were made in public sector institutions; it was the public sector that took the extreme risks associated with experimental new technologies. It was the genius of Steve Jobs to take those public sector ideas and mould them into the most commercially successful product of modern times.
In today’s fast-changing competitive world of artificial intelligence and bioengineering, high risk and high reward go hand in hand. That is why the rest of this century must be the era of an entrepreneurial state. We need new institutions to channel funds to the development of new high-tech products and to link our outstanding research with commercial innovation; a pro-business state that complements private industry; and a well thought through medium-term growth strategy.
In vain, I searched the Autumn Statement for such a strategy. The Chancellor’s speech ends with what I can only interpret as a joke. He said that
“you do not need to choose either a strong economy or good public services. With the Conservatives, and only with the Conservatives, you get both.”—[Official Report, Commons, 17/11/22; cols. 845-56.]
When the Resolution Foundation reports that:
“Almost three-in-five households in the most deprived areas are already cutting back on essentials such as food and fuel”,
and the Institute for Government declares that the Autumn Statement’s impact on public services will be a “poisoned inheritance”, the joke is on the British people.
Lord Fox (LD)
My Lords, this is my first chance to welcome the noble Baroness, Lady Penn, back to her position at the Dispatch Box, and obviously my first chance to welcome the noble Baroness, Lady Lea, to her position on the Conservative Benches. I draw attention to the fact that I am on the executive of both the All-Party Parliamentary Motor Group and the Chemical Industry All-Party Parliamentary Group.
For this debate to be so long after the Statement has given time for perspective to develop—that is perhaps putting a gloss on it. Reports have been published and analysis probing the implications of the numbers and projections is available, and I am sure that your Lordships will draw on that research in various ways. For example, the Institute for Fiscal Studies concluded that the Chancellor was
“hemmed in by rising interest payments and poor growth prospects”
and in this position
“decided to allow borrowing to rise, and to put off properly tough decisions”
until after the next election. For example, I note that the vast bulk of the projected cuts in the benefits budget are scheduled to start in 2024.
That means that borrowing will take the strain in the near term, with the great majority of the planned consolidation due only after the next election. Decisions like this indicate that the Financial Statement was informed not just by a lack of headroom but by fairly cynical politics. I would judge that Chancellor Hunt has adopted either a Micawber strategy—“Something might turn up”—or what I would call the advance Liam Byrne strategy: he has already left a note for the next incoming Chancellor that says, “There’s no money left”.
However, the serious side is what this is doing to people, and how hard it is hitting and will hit families. Paul Johnson of the IFS was very clear when he said:
“The truth is we just got a lot poorer. We are in for a long, hard, unpleasant journey; a journey that has been made more arduous than it might have been by a series of economic own goals.”
The Office for Budget Responsibility—the OBR—reports that living standards will be down by 7% over this year and the next. This is the biggest fall in living memory and off the back of very poor income growth for many years prior. The effects of this will be felt across the country. To quote Paul Johnson of the IFS again, he said:
“This will hit everyone. But perhaps it will be those on middling sorts of incomes who feel the biggest hit … Middle England is set for a shock.”
What is clear is that Chancellor Hunt, and whoever is in that role after the next election, will reap the costs of Conservative chaos and a long-term failure to grow the economy. Combined with this are the effects of an ageing population, hundreds of thousands—if not millions—of people unexpectedly stepping out of the economy, QE and high levels of past borrowing. On this latter point, we face simply huge levels of expected spend on debt interest. Interest is more or less double what had been forecast and will hit around £100 billion a year by the end of the forecast period.
Without growth, however, the situation will be even worse and the Chancellor’s projections rely on growth built into the OBR projections. Yet it is very hard to see how this Statement helps that growth. Indeed, it is very likely that it will contract the economy rather than grow it. This is not helped by at least one change that actually undermines future growth. I shall use the rest of my speech to explain.
The Chancellor used his Statement to make changes in the R&D tax credit scheme. The scheme currently provides tax incentives for companies to invest in innovation, which is considered key to growing the technology base of the country. Indeed, we should take no word other than the Government’s, who trumpeted it as such a measure. In his Autumn Statement, however, the Chancellor made the incentives much less generous for small and medium-sized businesses. This is a very misplaced change, which some people have described as disastrous. For example, Make UK points out that about two-thirds of private sector expenditure on R&D is made by manufacturing companies and a large number of those will be hit by this change.
Elsewhere, the BioIndustry Association, which represents life science companies, warned that the changes would result in promising innovations, ranging from vaccines to cancer treatments, moving overseas. In taking from smaller companies, the Chancellor seems to be giving back to the country’s bigger businesses via changes in the R&D expenditure credit—RDEC—scheme. But it is in SMEs that key innovations often start, and to hit them is not sensible. I am not decrying the RDEC system, which has been shown to yield very positive returns. Increasing the generosity of RDEC, however, should not come at the expense of support for SMEs.
The Chancellor’s justification for this very detrimental change is that, in the view of the Treasury, the “generosity” —its word—of the scheme had made it a target for fraud. First, we should point out that the Treasury’s record on fraud is not glorious, given the billions of pounds shelled out during Covid that will never be repaid. Secondly, if there is an acknowledged problem in the administration of the scheme, surely the sensible thing to do is to administer it better. Yet reducing the value of the scheme means that genuine claimants are being punished for a failure properly to police the scheme. It is a very blunt instrument. If the Treasury was concerned about fraud, perhaps it could have instigated a system that properly checked the validity of the claims. If it wanted to drive growth, it should look at other systems of support and take the CBI’s advice, such as to look more carefully at the definition of R&D and to improve complicated HMRC and BEIS tax credit guidance.
It is clear that the Chancellor had a tough job, especially given the wreckage created by his immediate predecessor. However, while we are all agreed that growth is the key to digging the nation out of this hole, the Chancellor is introducing measures that will reduce growth. This is not only practically damaging but a very clear indication that this Government do not understand innovation—and that is very worrying.
Baroness Hayman (CB)
My Lords, I declare my interests as co-chair of Peers for the Planet.
The Prime Minister recently reaffirmed that, far from action on climate change and action on economic growth being in conflict, in fact there
“There is no long-term prosperity without action on climate change.”
I therefore want to look at the elements in the Budget Statement that bring those two issues together. The Chancellor pointed out that, this year, the UK will spend an extra £150 billion on energy compared to pre-pandemic levels, equivalent to paying for an entire second NHS through our energy bills. He went on to say that
“there is only one way to stop ourselves being at the mercy of international gas prices: energy independence combined with energy efficiency”.—[Official Report, Commons, 17/11/22; col. 851.]
He then signalled an acceleration of homegrown renewable energy sources, including offshore wind, carbon capture and storage and nuclear. Investment in this area, he rightly said, would not only help to address the current energy price crisis but deliver new jobs, industries and export opportunities. That is all very welcome, but there was one elephant in the room: onshore wind. It is one of the quickest and cheapest forms of energy generation, and rolling it out more quickly would help us move away from expensive fossil gas and reduce energy bills, but it was not mentioned.
It would, of course, be completely wrong to give carte blanche, without any processes or consultation, to every wind farm application made, but it is equally wrong to have the current de facto ban created by the 2015 ministerial Statement. The UK has installed 14.2 gigawatts of onshore wind capacity to date, but this has slowed dramatically to almost nothing since that ministerial Statement. We urgently need to restore balance to decision-making on applications for onshore wind.
Two years ago, I introduced a Bill to this House that did no more than put onshore wind applications on the same footing as other infrastructure projects that may be equally locally controversial to onshore wind developments—or even more so—and to deal with what to do when existing wind farms come to the end of their lives or require repowering. Polls consistently show the vast majority of the public support new onshore wind development. We do not need to overcomplicate this. We do not need new legislation. All that has to be done could be done by the very simple step of amending or removing the 2015 ministerial Statement which caused all these problems in the first place. I offer this as a simple path out of the troubles that the Government are currently having in another place. I could even offer my services as a mediator if necessary.
Turning to the new electricity generator levy, I agree with the Chancellor that there is
“no objection to windfall taxes … if they are genuinely about windfall profits caused by unexpected increases in energy prices.”—[Official Report, Commons, 17/11/22; col. 847.]
I understand the rationale behind bringing electricity generators into the scope of such taxation. But the Chancellor also said that any such tax should “not deter investment”, yet while the windfall tax on oil and gas has a generous investment allowance, no equivalent is proposed for the electricity generator levy. Considerable concern has been expressed within the industry that the disparity between the respective taxes on the oil and gas industry and renewable generators will, effectively, penalise low-carbon generators over polluting fossil fuel extractors and deter investment. As RenewableUK has said:
“Ministers now need to work with the industry to ensure that the implementation of these plans ensures a level playing-field, rather than imposing unfair burdens on renewables.”
I would be grateful if the Minister, when she winds up, could comment on how the levy will be constructed to ensure that it does not deter the investment we so desperately need in renewable energy.
Lastly, I turn to the issue of energy efficiency, where I am afraid the Statement is all about jam tomorrow and there is a sad lack of ambition. It is often said that the cheapest form of energy is the energy we never use. We have some of the worst housing stock in Europe, and the people who live in it pay not only in inflated energy costs—and every taxpayer is now doing that as well—but also in the sometimes catastrophic effects on their health. Since its peak in 2012, insulation installation rates in the UK have plummeted, and energy efficiency programmes have been bedevilled by short-termism, stop-go policies and a lack of co-ordination. We desperately need to get away from the piecemeal approach of the past and bring in a combination of policy levers. We need grants, of course, but also setting minimum energy efficiency requirements, stamp duty rebates, incentives for employers to skill up their workers, and a long-term approach that will provide consistency and certainty to the private sector, which is absolutely crucial if this is to work. It should start with social housing as a catalyst to unlock the private investment needed and scale up the market.
As a first step, the Government need to bring forward the entirety of the £3.8 billion that they committed in their 2019 manifesto via the social housing decarbonisation fund and end the burdensome and bureaucratic competitive bidding process we have at the moment. I also hope that the Minister can reassure me that the Government will not seek to reverse the measures on energy efficiency in social housing that your Lordships’ House placed in the Social Housing (Regulation) Bill when that legislation is considered in the other place.
The Lord Bishop of Gloucester
My Lords, growth is good and necessary, and it is clear that money does not grow on those proverbial trees. We find ourselves in extremely challenging times, and it seems to me that some of the measures that are set out in the Autumn Statement are prudent and necessary to rebalance the budget. I thank the Government for their desire to focus on supporting the poorest households, which is right and just, including their decision to increase benefits in line with inflation. Yet I have a number of concerns. I want to use my time to focus on just two key issues: first, food and feeding people, and, secondly, the criminal justice system. I declare an interest both as a trustee of Feeding Britain and as Anglican Bishop for prisons in England and Wales.
As I have seen first-hand in the diocese of Gloucester, food clubs and food banks are reporting record demands, with larger numbers of people seeking help for the first time and with much greater frequency. For reasons we know, food prices have soared well above inflation, and it would also seem that food supplies are getting more difficult to acquire in sufficient quantities. In order for people to safely navigate their way to next April without being hungry and to lessen the need for food aid, it would be helpful if there could be a further reduction in the rate of deductions from universal credit, as well as the introduction of something akin to a yellow card warning system in place of the current sanctions policy.
In the meantime, churches and different faith groups are playing their part, not only regarding food banks and food provision but in working with local community organisations and borough and county councils to run warm spaces, often with food provision, in our urban and rural communities. In Gloucestershire, we have an imaginative initiative called The Long Table, which not only aims to tackle hunger and loneliness and build community but is also investing in people and working to build food resilience and food sustainability, working in relationship with local farmers and food producers.
If food provision is to be sustainable, we need British farming to be viable in order to feed Britain and to grow the economy. It is not just high costs for fuel and feed which are a threat but the fact that, following the removal of the basic payment scheme, there is still a lack of clarity around the environmental land management scheme. The farming sector needs a properly funded agricultural transition plan if it is to plan effectively for the future, grow its business and ensure food sustainability for us all.
In the big picture of the Budget, what do we need to fund and where do we need yet more radical thinking regarding existing expenditure? That brings me to my second area: that of the criminal justice system. I observe a criminal justice system under great pressure, not least financially, and there is a desperate need for a robust and courageous review of our criminal justice system which will then inform when and how money is spent. A wise move would be to spend less on expanding the prison population and more on rehabilitation and reducing reoffending and indeed offending in the first place. For example, where is the join-up between money spent on prisons and money spent on addiction prevention and rehabilitation? Where is the join-up between investing in adequate housing for those leaving prison, and thus reducing reoffending, and the high cost of repeatedly sending someone to prison?
When it comes to women’s centres, I am aware that I am like a squeaky wheel, but I repeat that it costs about £5,000 a year for a woman to engage with a woman’s centre, with the outcome of significantly reduced rates of reoffending, while a place in prison costs nearer £60,000 per year. If the Government want to save money, here is a way forward which is good for all—although the starting place is not the balance sheet but a radical and courageous review of our criminal justice system. Let us not add 18,000 people to the numbers locked up in cells and let the taxpayer pay the £4 billion bill but properly invest in rehabilitation, appropriate education and skills, and prevent reoffending and seriously reduce the prison population. If the Government want to save money and redistribute expenditure, then look at the data, listen to those working in prisons and rehabilitation in the community, listen to offenders and those at risk of offending, and indeed, listen to victims of crime, and do not build more prisons and send more and more people to prison for longer as a short-term response to populist headlines regarding crime. The evidence does not support that.
To draw to a close, I am aware that I have touched briefly on only two areas. Only time will tell whether the Chancellor of the Exchequer’s balancing act is successful for the long-term growth of our economy and the good of the most vulnerable. However, I believe there is some further rebalancing and joined-up thinking to do, which will not only serve us better financially but will help to shape the kind of country we want and need to be.
Lord Lamont of Lerwick (Con)
My Lords, it is difficult to imagine a more difficult set of circumstances in which any Chancellor has had to frame a financial Statement to Parliament. Whatever the decisions, inevitably there will be predictable criticism from all sides: taxes are too high, borrowing could be a bit more, spending greater or less, according to taste. The Chancellor could not escape the shadow of the mini-Budget. It meant that, above all, he had to satisfy the markets that the national finances were sustainable.
Much public reaction to the Statement concentrated on the fall in living standards, which is indeed alarming and unprecedented, but it has been obvious, alas, for some time that a fall in living standards was absolutely inevitable because of the rise in imported energy relative to the price of exports. Sadly, no Government can protect all their citizens in circumstances such as these. I would argue that the Government have done a huge amount, spending over £100 billion supporting families and raising disposable income above where it would otherwise have been, but, alas, there is still a drop in living standards.
The Chancellor had to choose how much consolidation came from taxation and how much from cuts and expenditure, and he chose a balanced approach of 50:50. Given that many departmental budgets are under pressure because of inflation at this time, it seems improbable that he could have gone further, like cutting spending more. With inflation at 11%, protecting programmes in money terms, which the Chancellor has said he will do, means real cuts for certain departments.
The Chancellor was advised from many sources that you cannot raise taxes going into a recession. That, one might point out, flies in the face of historical evidence, such as the Budget of 1981, but leave that aside—that is in fact not what the Chancellor is doing. We are not tightening fiscal policy going into a recession. Most of the fiscal tightening falls in the latter part of the survey period, by which time, I hope, the recession will be over.
In the short term, borrowing actually increases, up by more than £64 billion this year and more than £40 billion the following year. The Chancellor raised taxes as a percentage of GDP by just over 1% during the survey period to their highest level since the war. Understandably, this leaves many of my noble friends very unhappy but the reason that tax as a proportion of GDP is at its highest level since the war is that spending as a proportion of GDP is at its highest level since the Second World War. Borrowing as a proportion of GDP is also approaching the same level, its highest since the war. All three are because of Covid, the secondary consequences of the Covid and the war in Ukraine.
Much of the increase in expenditure as a percentage of GDP—the measure of the so-called size of the state—over the survey period has come from indexation. The increases in both benefits and the triple lock increase spending-to-GDP ratios as indexation itself outstrips nominal GDP growth. Those who argued that we should take advantage of our second-lowest debt-to-GDP ratio in the G7 should look at what has happened to debt interest and why our previous financial position was, in many people’s opinion, an accident waiting to happen.
The noble Lord, Lord Fox, referred to debt interest but rather understated the problem. Debt interest has doubled from £56.4 billion last year to £120 billion this year, just slightly less than what we spend on the NHS. Much of this surge in debt was caused by indexed debt, which has nearly quadrupled from 6% of the stock of debt in 2001 to 22% this year. That process is part of the reason why, earlier this year, we saw some alarming predictions of how, in a few years’ time, debt in this country might begin to approach the levels in Italy or Japan.
Some people argue that the answer to all these problems is to go all out for growth through tax cuts, and that growth will float all these problems away. Unfortunately, however, we have another problem: severe inflation threatening to become embedded. At this moment, going for growth at all costs is likely to exacerbate inflation and probably end up exactly as the Barber boom did.
We use the phrase “cost of living” and realise the huge problems that there are for people, but we do not talk enough about the process of inflation itself. We need not just to protect people now but to prevent the situation becoming embedded and getting worse year after year. We need not just to stun the snake of inflation but to kill it. There is a real danger, as gas prices may come down, that we will end up living permanently—or for a long time—with a relatively high rate of inflation that does not go back to the 2% target where it ought to be.
Getting inflation down must be a top priority. We are in danger of forgetting, because it has been so long, the poison that inflation can inject. Getting on top of inflation is a job primarily for the Bank of England, which has not distinguished itself in recent years, but Governments also have a role to play. It is important that fiscal policy and monetary policy point in the same direction. Of course we also need growth, but we will not have growth if we do not get inflation down first. As Jim Callaghan reminded us,
“inflation is the mother and father of unemployment.”
Growth is not something that happens abracadabra because Governments will it or snap their fingers. Governments do not create growth but they can prevent it. What we need is a strategy to remove the obstacles to growth—a battery of non-inflationary supply-side measures, including training, infrastructure, deregulation and, most importantly, planning reform in the field of housing.
This Autumn Statement, against the background of a massive world crisis, makes some unavoidably tough decisions that are bound to be unpopular. However, in a very difficult situation, I believe that the Chancellor’s decisions are realistic and sensible. I commend them to the House.
Lord Hain (Lab)
My Lords, in both cheering on Wales tonight and praising everything that my noble friend Lord Eatwell said, I remind the House of some famous first words from the Prime Minister and some lesser-spotted last words from one of his predecessors as Chancellor—words that clarify both the ruinous fiscal policy the Tories have pursued since 2010 and the dreadful prospects set out in this year’s Autumn Statement, and which expose the true source and full extent of the real, gaping hole at the heart of Britain’s public finances.
Rishi Sunak concluded his first Budget speech in March 2020 with the breathtaking claim that
“the Conservatives are the party of public services.”—[Official Report, Commons, 11/3/20; col. 292.]
Their record since 2010 and their plans in the Autumn Statement tell a totally different story. Rishi Sunak and Jeremy Hunt are said to be the “numbers men”, so let us look at the numbers, courtesy of the Office for Budget Responsibility.
Last October, the OBR confirmed that nearly a decade of Tory austerity from Chancellors George Osborne and Philip Hammond had seen cuts in public spending amounting to more than 7% of GDP—savage cuts equivalent to £180 billion in today’s terms, which is almost as much as we spend each year on health and social care in England. Those public spending cuts made up 82% of the total Tory fiscal consolidation; tax increases made up 18%. Here lies the origin of the chronic and mounting staff shortages, industrial unrest, deteriorating standards and lengthening response times that are now only too typical of Britain’s struggling public services, especially in health.
This is why even Tory councils are warning that they face possible bankruptcy after enduring funding cuts for over a decade. George Osborne, once again welcome at Downing Street in advising the Chancellor and the Prime Minister, boasted of having squeezed the UK economy tighter than any of the advanced economies. He was more reticent about the plans in his final Budget in March 2016 for a further five-year fiscal squeeze—plans that would have added another £60 billion of public spending cuts to those actually made by Philip Hammond. David Cameron has confirmed that, had he stayed in office after 2016, he would have gone for even more spending cuts. The Government have now embarked on the kinds of cuts that Cameron and Osborne were exploring when they left office. They may differ in detail but it is a familiar formula, with the biggest spending cuts put off until three to five years’ time, conveniently after the election.
We can usually sum up a year’s key events with a simple phrase. In 1992, it was “Black Wednesday”, when the Tories lost whatever reputation they had for sound economic management in one turbulent day. This year, it has been “disastrous mini-Budget”, when they lost it again. Now, they are scrambling to undo the damage, but they are swimming against the tide of events. Their long record of miserably slow growth is well entrenched; their so-called plans for growth have always lacked potency and credibility. Today, Britain is the only G7 economy whose GDP is still below its pre-Covid level, and we are fast heading into recession. Slow growth is why the Government have missed all their targets for balancing the budget and bringing down Britain’s debt-to-GDP ratio since 2010. In March 2022, the OBR projected the debt ratio to fall below 80% in 2026-27, but the mini-budget and the energy crisis blew that off course. The OBR now expects it to fall in 2027-28, but to 97% this time. The Tories are going the wrong way: from bad to worse.
It is the same old story. Beyond the blue horizon waits a beautiful day but, like the horizon, Tory success is always out of reach. Fate has cast Rishi Sunak and Jeremy Hunt as the George Osborne understudies, called upon to take centre stage and share the leading role—a double act in a Whitehall revue, but not one that will run and run. This Autumn Statement will prove to be another Tory fiscal flop at the expense of the country. It is going to bomb at the box office, mercifully opening the door to a Labour Government delivering public investment, kick-started growth, business success and sound public finances, because these all go hand in hand.
Lord Howarth of Newport (Lab) [V]
My Lords, the Chancellor who warned of a black hole has indeed consigned us to a dungeon. If the main drivers of inflation—the energy crisis, the pandemic and its effect on supply chains—are global, and we face recession, it is the wrong response to weaken our economy with a planned fiscal tightening of 2% of GDP. Falling real incomes and interest rate increases will amply reduce domestic inflationary pressures. There are pay demands, of course, but no wage-price spiral. We are now on track to 19 years of no real growth in average wages and household income. We know the enormous damage that excessive austerity in Britain did to investment and productivity, public services and living standards following the global financial crisis. Once we have brought inflation down, do we then need austerity 2.0 to satisfy newly contrived fiscal rules on the ratio of debt to GDP? While markets will not tolerate unfunded tax cuts, they might well take a benign view of investment in public services that will strengthen our economy.
If there is a black hole in the British economic cosmos, it is that which sucks resources away from low-income families and public services and piles them up in the bank accounts of the wealthy. The Chancellor’s reductions in capital gains tax and dividend allowances twinkle only faintly in that murk. With his decision to allow the average energy bills faced by households to rise in the spring, we shall see how far his measures to support people on low incomes will go. The prognostications are worrying. An indexing of benefits that have previously been severely cut and capped, with disregards and capital limits frozen, hardly justifies his claims that this is a compassionate Government. His reliance on dragging low earners into the tax net through freezing the income tax and national insurance thresholds equally belies that claim.
Important for people struggling in poverty is the maintenance of law and order and the good functioning of the justice system—but once again, and scandalously, these have been neglected. The plight of renters in the private sector was unaddressed. If he sincerely wants to help more disadvantaged communities, why has he made a real-terms cut in the Budget for levelling up? How much control of resources will the Treasury really allow for mayors and local authorities?
The Chancellor offered no vision of how we are to meet certain great economic challenges. On climate change, infinitely the most important, he reaffirmed the 2030 target for emissions reduction, but gave no indication of what the Government will invest overall, with numbers and waymarks, along the journey to net zero. What are the Government’s projections for overall spending on averting climate change, adapting to climate change and repairing the damage of climate change? Confirmation that Sizewell C is to go ahead, plans to build some small modular nuclear reactors, and the investment announced in energy efficiency, welcome and significant as they are, do not amount to a full strategy. The Prime Minister is being blown hither and thither by onshore wind and his own MPs.
The Chancellor said nothing about the Treasury’s view on biodiversity loss. Nor did he tell us how our country will be enabled to support an ageing population or to develop the resilience to protect itself against another pandemic. The additional money that he announced for the NHS will not be sufficient to fund the pay increases needed to prevent the system buckling, tackle the backlog, and meet rising demand for healthcare in the recession. He offered no vision for a model of health- care that will be economically sustainable for the future. The Autumn Statement had nothing to say about resources for preventive strategies to lessen demands on the NHS and enable us to become a healthier society. A long-term workforce plan, rightly, is being commissioned, but he said nothing about its funding.
Equally, the additional funds for social care will not stabilise the system, enable the release of enough hospital beds, and provide decently for the vulnerable and frail in the community. By putting the onus on local authorities to fund much of the increase in care funding through council tax—a regressive tax—the Chancellor ensured that the cost and benefit will not fall equitably. He did not foreshadow any plan to integrate the health and social care systems in order to get rid of the vast inefficiencies of their separation.
The root cause of the threadbare state of our public services is our poor productivity. The Chancellor announced constructive policies on regulation, competition, tariffs, clusters, and R&D spend. I hope that his policy on Solvency II is prudent. More is needed to forge a comprehensive strategy covering availability of labour and capital, childcare, skills, taxation, regulation, planning, infrastructure, housing, personal and business mobility, and obstacles to trade. Plans for infrastructure investment were cut back. He said not a word about immigration. Why did he not have the candour to say that immigration is good for the economy? Will he make sure that the Home Secretary does not wreck our universities? The additional funding for schools will do no more than restore the level in 2010. The Barber review is still to come, but there was no indication of an uplift in funding for post-16 education and apprenticeships. The Chancellor should challenge convention and classify spending on education and training, which is investment in human capital, as capital expenditure.
By reducing R&D reliefs for small and medium enterprises, which the noble Lord, Lord Fox, spoke about, instead of improving the policing of abuse, the Chancellor removed incentives for enterprise and innovation in science-based industries. The tax changes that he announced, on stamp duty and business rates, were not part of a programme of tax reform to drive improved productivity. Corporation tax will rise from April, and the super-deduction capital allowance will expire. We are going to live with higher taxes under any Government. That need not impair economic performance, but it makes it all the more urgent that we have a rational tax system. The Chancellor has shown no interest in this crucial part of his responsibilities.
The Chancellor has appeased the markets for now. On the tests of strategic vision, investment, growth, the future of our public services, and fairness, his Autumn Statement is wanting.
Lord Flight (Con)
My Lords, I declare my interests as chairman of the EIS and SEIS associations. Since these bodies were set up, they have channelled some £30 billion to SMEs.
I congratulate the Chancellor and his team on their sensible Budget. To some extent it is a repeat of the Osborne Budget, but rather better organised. It cannot address adequately the problem of excessive property prices, now accompanied by materially higher mortgage rates. We will also see unemployment rise and more businesses failing. However, my judgment is that the economy will withstand the worst of the inflationary problems of this era.
The Autumn Budget proposals set out to reduce total outlays by some £55 billion, roughly half to be achieved from cutting public spending and half by increasing taxes. The Chancellor also organised to spend up to an extra £150 billion on energy, if this is necessary to restrain energy price rises. The UK has performed relatively well over the last year in increasing onshore and offshore wind and solar energy supplies. A new nuclear plant is also to be built at Sizewell B. We need secure, clean and affordable energy. The Government are mistaken in not supporting fracking, where the UK is estimated to have 100 years of fracking gas supplies.
The most important immediate objective of the Budget was to stabilise our financial position and sterling. We need our fiscal and monetary policies to work together to give the world confidence in our currency and the Government, and particularly in our ability to repay our debts. Sadly, Liz Truss’s policies frightened the world as to whether we would be able to repay our debts from her tax cuts and higher spending. Confidence was restored just in time with Liz’s resignation. Since then, sterling has strengthened against the dollar and interest rates have reduced. The Government can also give primary attention to reducing inflation.
The Government have made it clear that their priority will be to look after the most vulnerable, who will need some increase in wages and some help with rents. It is a principle of Conservative policy to protect the most vulnerable. The main cause of UK inflation is energy costs—Russia and Putin driving up gas and electricity prices. The IMF estimates that, as a result, approximately a third of the world economy is now in recession.
Next comes tax policy. I hope that the Government are committed to avoiding tax increases that damage economic growth. The Government expect tax as a percentage of GDP to rise by 1% over the coming five years. I hope that a better performance of the UK economy than is forecast will provide the needed funding. It is unfortunate that the Government have reduced the income level at which the 45p tax rate will apply. After the costs of mortgages and children, there is little left over from income levels of £125,000, especially if there are more children involved. It will be interesting to note how much revenue the higher tax on unearned income delivers.
My reaction is to invest in venture capital funds, which deliver tax-free dividends. The biggest source of extra tax revenues will come from the new 45% levy on electricity generators, which is expected to raise £14 billion in tax next year.
The Government’s policy is for public spending to rise by 1% less than the economy. Schools are set to receive an increase in spending of £2.5 billion per annum. The big issue is to sort out the NHS, which is scheduled to receive £2.7 billion extra per annum for the next two years for social care funding.
For the UK Government, the key ingredients for economic growth are energy, infrastructure and innovation. This will entail changing our use of EU regulations where required. Also of importance are increasing digital technology and life sciences, an increase in green investment and financial services. Solvency II should be capable of unlocking £600 billion of industrial growth funds over the next decades.
The key remaining requirement is to get those who have withdrawn from the workforce following the pandemic back to work. The increase in pension credits should deliver around £1,470 per couple. What is needed in tax to make it attractive to return to work? The increase in working-age adults is 630,000; there is a case for continuing to pay at least part of universal credit to those in part-time work. Its removal if a recipient takes on part-time employment has proved a major disincentive to taking up part-time employment.
Lord Shipley (LD)
My Lords, I remind the House that I am a vice-president of the Local Government Association. I look forward shortly to hearing the maiden speech of the noble Baroness, Lady Lea of Lymm.
The disastrous mini-Budget in September, with its unfunded tax cuts, led to inflation at 11%—its highest since 1981—and high and rising interest rates. We face the worst fall in living standards since records started with a 7% drop in household incomes over the next two years, as forecast by the Office for Budget Responsibility. Homelessness is set to rise further because of the increasing unaffordability of housing. Council tax will rise by up to 5% in April. Yet again the Government are shifting the tax burden for social care to poorer people and areas, which collect lower revenues from their tax bands but face higher demands for social care. Council tax is a regressive tax. Why do the Government continue, year after year, to misuse it in this way?
I understand the need to restrict rises in business rates and I support the action the Government have taken. The introduction of the new valuations is the right decision. I welcome the fact that online distribution centres can face higher business rates in future, which should help retail centres. But could I ask the Minister about business rate increases for public buildings? What impact assessment has been done on the costs of those to the public sector? Will those increases, which may be significant, be reimbursed?
Chapter 2 of the Autumn Statement, on page 26, relates to “protecting vital public services”, but there is little reference to the housing crisis. There is a lot on health and education but no apparent understanding of the impact of poor housing on the costs of the National Health Service. I have spoken many times in this Chamber on the need to build more homes for social rent. In the last 10 years, house prices have risen by 50% but wages by only 20%. There is a serious shortage of new homes, as the Government fail to deliver their promise of building 300,000 a year.
There is now a huge drop in numbers of home owners under 35. Help to Buy led to increased demand without an increase in supply, and so to higher prices. We must increase supply. A way of finding more money is to share the land value increase more when a planning permission is granted between the owner and the local authority. I suggest to the Government that the time has come to look at that seriously.
Following the mini-Budget, interest rate rises in mortgage costs to 6% have made home ownership too expensive for many aspiring first-time buyers. This is making home ownership unaffordable for too many people who currently own their homes. In both cases, that leads to greater demand for rental properties, with rents inevitably rising, certainly in the private sector.
The rise in interest rates has impacted home owners right across the country, but is more acute in places such as London and the south-east where house prices are higher. Some households face increases in their monthly payments of several hundred pounds, which they have not planned for. Some will not be able to afford it. Some will lose their homes, unless government support is forthcoming. What plans do the Government have to help people in that situation?
There is now a worrying increase in private landlords seeking possession orders under Section 21 of the Housing Act 1988. The practice of no-fault evictions was banned during much of the pandemic, and lifting the ban has seen a big increase in threats of no-fault evictions. As an example, analysis by the Northern Agenda shows a 143% rise, compared with the same period a year ago, across the north of England. This is significantly higher than in London and the south-east. When will the renters’ reform Bill be considered? When the Government published the White Paper in June, it included a commitment to ban Section 21 evictions. Is that still their intention?
The Secretary of State for Levelling Up, Housing and Communities was in Rochdale last week, after the dreadful tragedy there, to see for himself the unhealthy state of some homes. I welcome his decision to amend the Social Housing (Regulation) Bill to set mandatory requirements for inspections and action. Official advice on removing mould seems to be to open windows to bring in cold air and keep spores from settling, and then to turn up the heating to kill off the spores that do. This is unaffordable when people have to reduce their energy use. It is unacceptable and it is not levelling up.
We need to build more decent social homes. There is now a very serious problem emerging where a household is not earning enough to meet a private sector rent increase but is earning too much to qualify for social housing. Such households end up having nowhere to live, other than temporary accommodation. That, too, is unacceptable.
Finally, over a million households are already on social housing waiting lists. Those lists will grow as people are forced out of the private rented sector. We have to build more. As the Secretary of State said in Rochdale in an interview with the i newspaper last week,
“we do need to make sure that we do have more homes built, and more social and affordable homes built along the way”.
That does not quite amount to a policy, but it does at least sound like a step in the right direction. It is just a matter of regret that the Autumn Statement does not mention housing at all.
Baroness Lea of Lymm (Con) (Maiden Speech)
My Lords, it is a great honour and privilege to make my maiden speech in this House today. I would like to thank everybody in the House, from all sides, for their kindness and support. I am deeply grateful for the guidance and advice offered by all the officers and staff I have met. Black Rod and her staff, the Clerk of the Parliaments’ Office, the doorkeepers, the attendants and the police officers have all been incredibly helpful, not least because I keep getting lost.
In particular, I thank my supporters: my noble friend Lady Noakes, who is also my excellent mentor, and my noble friend Lord Blackwell, who was my excellent chairman when I was the director of the Centre for Policy Studies. I am really grateful. Indeed, I cannot thank them enough.
When I was appointed to this House, it struck me how my life had gone almost in a complete circle, because I began my career several decades ago—I am not telling your Lordships how many—on the other side of Parliament Square, in the Treasury. So I think I can find the way. In my 16 years in the Civil Service, I was attached to several government departments. I worked on, among other things, economic forecasting and the compilation of the economic accounts. It was always fascinating, and it was a terrific foundation for the rest of my career. After the Civil Service, I worked at the Mitsubishi Bank, Lehman Brothers—yes, that one—ITN, the Institute of Directors, the aforementioned Centre for Policy Studies and, lately, the Arbuthnot Banking Group.
Unsurprisingly, I have simply lost count of the number of Budgets, Spring Statements and Autumn Statements I have followed throughout my career. That brings me to this year’s Autumn Statement. I will not discuss the policy aspects of the Autumn Statement—that would be far too controversial—but will confine my remarks to some general reflections on the nature, difficulties and uncertainties relating to economic forecasts. There are many, which makes me naturally sympathetic to the OBR when it forecasts the economy and the public finances for these important fiscal statements.
First, there are uncertainties relating to the underlying data which are the basis of any forecast. I remember well being involved in the estimation and compilation of the balance of payments accounts when I was in the Central Statistical Office, the precursor of the Office for National Statistics. It taught me that, with the best will in the world, there are likely to be significant measurement errors and sampling errors in these accounts, and this applies in equal measure to much of the rest of the ONS’s output. Moreover, the data can be substantially revised as later information becomes available—history gets rewritten. This is not to criticise the ONS or question its integrity, professionalism or competence—far from it. I have the greatest respect for the ONS; I merely emphasise the inherent problems in estimating economic data.
Secondly, there are daunting problems relating to modelling and estimating the interrelationships between the variables in a complex system such as the economy. Moreover, in a changing economy, the interrelationships are not even stable—they change, adding to uncertainty. If you want a bit of light relief, look at the OBR’s website. You will see its macroeconomic model, which provides a useful, if not formidable, rundown of the variables identified within the model and how they interrelate. The model was first put together by the Treasury in the 1970s and is now jointly maintained and developed by the OBR and the Treasury.
Thirdly, any forecast is dependent on some fairly heroic assumptions. In its November Economic and Fiscal Outlook, the OBR referred to the intensification of
“the global energy … supply shocks emanating from Russia’s invasion of Ukraine”
since March’s Spring Statement. It discussed the significant knock-on effects for inflation and interest rates. Crucially, it had to make some fairly heroic assumptions about the future paths of energy prices and interest rates based on market expectations for its latest forecasts. These may or may not be fulfilled; probably not. In some sense, they are always wrong. The issue is whether these assumptions look plausible. To me, the assumptions in the Autumn Statement look perfectly plausible.
So economic forecasts are inevitably subject to great uncertainties, which the OBR and the Bank are at pains to point out. Indeed, the Bank has been using so-called fan charts around its central projections since the 1990s. These fan charts provide a useful indication of forecast uncertainties of the main economic variables: GDP, unemployment and inflation. I notice that the OBR has recently started to use fan charts for its projections of the key fiscal variables relating to the Government’s fiscal targets. This is a useful development.
Digressing for a moment, I feel I should add that it is not just economic models and forecasts that are inherently subject to uncertainties. So are epidemiological models and forecasts, and so are climate change models and forecasts. But that is for another day.
Finally, given the uncertainties surrounding the OBR’s forecasts—and, indeed, the Bank’s—some commentators have been rather dismissive, questioning the purpose of them. I would defend them. Crucially, they provide a valuable, if not invaluable, framework for analysing the economic and fiscal implications of government policy, and they offer a thought-through and informed assessment of where they think the economy is going. Moreover, I understand that the OBR’s record has been perfectly respectable when compared with other forecasts. On that upbeat note, I shall end. I thank noble Lords for their patience in listening to me today.
Baroness Fox of Buckley (Non-Afl)
My Lords, it gives me great pleasure to follow and warmly welcome the noble Baroness, Lady Lea of Lymm. Too often, professional economists are dull technocrats who have disavowed the political drivers and implications of budgetary or fiscal policy. But, as we have heard from her maiden speech, and her prolific writings over the years if noble Lords have followed them, the noble Baroness’s undoubted expertise is never devoid of an awareness of the democratic context and consequences of economic decisions.
I first met the noble Baroness, Lady Lea of Lymm, when she was head of the policy unit at the Institute of Directors, when she invited me for lunch over 20 years ago. I had never been inside the IoD. It was very grand and a tad intimidating, but the noble Baroness made me feel totally at ease. She was not overly formal: she was down to earth, frank and great fun. Despite coming at politics from completely different sides of the political spectrum—a long time before we were on the same side on Brexit—that lively and intellectually stimulating conversation over lunch showed me that the noble Baroness has a generosity of political spirit that, in 2022, is an underrated virtue, but one that will be valuable in this House.
What we had in common, and which has kept us in touch ever since, was the noble Baroness’s passion for freedom, free speech and enhancing accessible public debate. If you look at her eye-wateringly impressive CV, you will see that she has committed her whole adult life to public service. I am glad to see her continue the tradition by taking her place here. If I might say so, it is long overdue.
I am not usually one to focus on representation or role models, but that the noble Baroness was more than equal to making her presence matter in a man’s world was and is inspiring. I am sure that many noble Baronesses across the House will welcome this fearless, clever woman, and independent thinker, as a great asset to the Chamber.
The noble Baroness was very insightful in her comments on the Office for Budget Responsibility, and I shall follow her remarks about the Autumn Statement by disagreeing with her—she will understand that. In the aftermath of the Truss-Kwarteng mini-Budget, many critics suggested that if only Downing Street had allowed the OBR to publish its forecast, financial turmoil could have been avoided. Surely this credits the OBR with some all-knowing, ever-present, god-like qualities when, in reality, it is an unelected watchdog established only in 2010. Rather than treating it as representing unchallengeable truth, its outlook should be open to scrutiny and debate. For example, the OBR’s model assumes that higher interest rates are a negative for economic growth, whereas I agree with those who argue that artificially low rates and cheap credit over the past few decades have disguised serious underlying problems of productivity while facilitating unproductive sectors at the expense of investment in new innovative enterprises.
Regardless of opinions on this, my broad concern is that over recent months politicians have done too much deferring to third-party bodies. The extraordinary intervention by the IMF, with its demands that an elected UK Government should change their economic policies because it did not approve, was cheered on and cited by far too many politicians as proof of the need to halt the growth plan. It was as though everyone forgot that the IMF has been a brutal enforcer of failed austerity policies internationally. I remind the House of the 2010s euro crisis, when the troika imposed such harsh measures on Greece that its public sector employment was slashed by 30% and youth unemployment peaked at 86%, consolidating me as a Brexiteer.
Beyond the OBR and the IMF, there was the narrative that there was no alternative but to bring in the drastic measures of the Autumn Statement because we need to satiate unhappy financial markets. What the self-described grown-ups in the room need to understand is that financial markets do not have emotions, are not unhappy and do not have a purpose. They are simply places where people and institutions sell and trade. By mystifying them as some omnipotent power, markets are given the authority or are provided with an excuse for blocking democratic choices. There is little doubt that Liz Truss’s shallow, tax-cuts-equal-growth intervention was a debacle, but I fear the Autumn Statement throws the growth baby out with the bathwater. Shadow Chancellor Rachel Reeves is right. We need to escape the doom loop of low growth. We need the economy to grow, produce, make and manufacture more in less time in order to crack the long- standing and deeply entrenched productivity crisis that long predates Brexit, but which politicians of all parties have avoided, often preferring to claim credit for superficial gains of cheap credit and state subsidies. Breaking the productivity deadlock requires supply side reforms, such as cheap childcare and business investment in training and skills, not cynically cheating by treating migrants as cheap labour. Of course, we need to free up planning and infrastructure from smothering hyperregulation, so how dispiriting to see so many MPs supporting anti-growth amendments to the levelling-up Bill that threaten to institutionalise nimbyism, block desperately need housing and cost thousands of job in construction.
Meanwhile, the Autumn Statement trots out the same old net-zero priorities that put restraints on production and the use of energy, putting the majority of eggs in the renewables basket that limits options. We need maximum access to all energy sources. Yes, wind farms, but that crucially means also fossil fuels, shale gas and lots more nuclear. That kind of reliable energy is needed as the lifeblood of modern industrialisation, investment in technology and innovation, and lots of R&D. We need to fuel productivity increases as the main guarantor of improved living standards by creating skilled jobs on decent wages. Eco-austerity hurts millions however much it drapes itself in green self-righteousness. Perhaps the only positive of the chaos of the past few months is that we are now facing up to the reality of Britain’s economic stagnation, a refreshing change from decades of smoke-and-mirror claims that our economy was fundamentally sound, shamefully illustrated by all parties gaslighting the public with reassurances that locking down business, halting production and paying furlough for months on end would be cost free. What an illusion. At least now we are going to have an honest debate, and I am sure that the no-nonsense voice of the noble Baroness, Lady Lea, will be an invaluable asset in it.
Lord Bridges of Headley (Con)
My Lords, I start by drawing your Lordships’ attention to my entry in the register. I welcome my noble friend Lady Penn back to the Front Bench. It is excellent see her there. I absolutely echo the words we have just heard. I warmly welcome my noble friend Lady Lea. It gives me great pleasure to be able to call her “my noble friend”. I congratulate her on her excellent speech, which I am sure all noble Lords agree shows the great wealth of talent she will bring to our deliberations. I thought it was a wonderfully uncontroversial speech, and next time I very much hope that the gloves will come off.
In that spirit, the season of good will is about to be upon us, so I will try to start with some words of praise about the Autumn Statement. I think that the Prime Minister and the Chancellor are quite right to be honest with us all about the dire economic situation we are in. I agree with a lot of what my noble friend Lord Lamont said. The oncoming recession would be worse. My reading of it is that inflation would have been higher if the Government had not taken some of the measures they have announced. As my noble friend Lord Lamont said, those measures were tough.
From where I sit, the worrying reality is that although we have avoided falling into the economic abyss, we are still very close to the edge of the precipice. Why are we there? There was the mini-Budget—there is no doubt about that—and there has obviously been the economic shock of the two undeclared wars this country has fought, first against Covid and now against Putin, the impact of which my noble friend also eloquently referred to, so I will not repeat those points. I will also point to something else where I think that the noble Lord, Lord Eatwell, who is sadly no longer in in his place, and the noble Lord, Lord Hain, will profoundly disagree, so I am testing the spirit of good will. I see Conservative-led Governments bit by bit defaulting to a mentality that higher spending and higher taxes are the solution to all the problems we face. My concern is that that mentality has been nurtured and watered by quantitative easing, which has become the magic money tree. Our QE addiction, as the House of Lords Economic Affairs Committee warned 18 months ago, has left us perilously exposed to what might happen when the era of cheap money ended, and that era is now over. Interest rates, as we all know, are up, belatedly, to grip the tiger of inflation, and that tiger is already gnawing into household incomes, pushing up welfare costs and creating havoc with government finances.
The noble Lord, Lord Fox, is absolutely right that the Autumn Statement lays out the gruesome cost of debt servicing. It is at its highest level in a generation. In the seven minutes of my speech, if I am right in my calculations, we will spend roughly £1.5 million on debt interest. That is quite an expensive speech—I think it is six times even what Boris Johnson gets paid. More than this, our public finances are more sensitive to movements in interest rates than they have been for decades. Every one percentage point rise in short-term interest rates now adds £13 billion to debt interest costs the following year. As to the debt stock itself, despite the £60 billion of tax rises and spending cuts in the Statement, debt will be £400 billion higher in five years than forecast just back in March. Added to all this are other uncertainties. The volatility of the gas prices is one. If prices go back to their late August peak, that could add £42 billion to borrowing next year.
So, given all this, taking a step back, I think the question the Autumn Statement begs is this: as we look ahead—and when I say “look ahead”, I mean look ahead several years out—are we really addressing the enormity of the situation we are in and the need to bring spending and, with it, taxation back under control?
I fully accept the pressures we are under, as my noble friend Lord Lamont and others have said, but let us just consider spending. The cuts are not being implemented until after the next election. Even then, by 2027-28, total departmental spending will be more than £90 billion higher in real terms than at the start of this Parliament.
Consequently, in the meantime—the next couple of years—we are tackling borrowing by raising taxes. As has been said, the tax burden will be at its highest sustained level since just after World War II. Millions more people will be dragged into a higher rate of tax. Worse still, our workforce appears to be becoming sicker and more people are becoming inactive. Thanks to all this, we are destined to become poorer, which to me is the most startling fact of the Autumn Statement. Real household disposable income per person is set to see its largest fall since Suez.
Having said all this, I do not question the need for the Government to act to stabilise the economic situation—but we must beware stability becoming the stability of the graveyard, where ever-higher taxes and spending snuff out enterprise and growth. If we are to wrest control of tax and spending, we need to answer the really difficult questions and topics that I believe we—and I take full responsibility for this, as a Conservative —have failed to tackle: our appalling productivity, our planning system, and how we are going to pay for an ageing population in a sustainable way. Above all, we have to ask ourselves how we are really going to encourage enterprise, innovation and investment—the essential ingredients of growth—if we keep taxing and spending at this level.
That begs a very difficult question: what do we want the state to do? Here I sense a creeping consensus that we must somehow accept that we are in a new era of higher taxation, higher spending and a bigger state. We are told that this is the solution to the challenges we face and the way to grasp the opportunities of the future. Others will profoundly disagree, but I reject that thesis outright. It is not what I believe in, not just for reasons of principle but because this approach, I contend, will fur up the arteries of our economy. That will hinder growth, and our children’s and their children’s ability to pay for the services their generations will need.
Lord Bilimoria (CB)
My Lords, the Chancellor said the Autumn Statement on 17 November 2022 will lead to a shallower recession and higher long-term growth. He promised
“stability, growth and public services”,
£55 billion of increased taxes and spending cuts. Yet during the pandemic we spent £400 billion to save the economy, debt to GDP went up to nearly 100% and the OBR has predicted that in 2027-28 we will still have 97.3% debt to GDP. Here is the caveat: the OBR forecasts are forecasts, and invariably they do not actually transpire.
We have the highest tax burden in 70 years. The OBR has predicted that the tax burden will hit a record 37.5% as a share of GDP in 2024-25. Income tax thresholds are frozen. The fiscal drag will bring millions of people to either start paying tax or be dragged into higher bands. There is also the windfall tax on energy companies and corporation tax going up from 19% to 25%. As the noble Lord, Lord Bridges, said, high taxes will stifle the recovery and growth.
When it comes to spending, the good news is that schools are getting £2.3 billion, but that is a drop in the ocean. We have underinvested in schools for decades. As for the guaranteed 2% on defence, we need to go up to 3% because of the Ukraine war and other global threats. Does the Minister agree?
The OBR predicts that inflation will peak at a 40-year high of 11.1%. On growth, the OBR has forecast that we will be in recession—we probably already are—and we expect growth of 1.3% in 2024. Before the financial crisis we were growing at an average of 2.5%. Unemployment is at record lows rate of 3.6%; the OBR forecasts that it will go up to 4.9%. As the noble Lords, Lord Fox and Lord Bridges, said, the OBR has forecast a dramatic decline in real household disposable incomes—the lowest in memory.
What about the Opposition? The shadow Chancellor has said that the Government’s actions
“have forced our economy into a doom loop, where low growth leads to higher taxes, lower investment and squeezed wages”.
She said the UK was
“the only G7 economy that is still poorer than before the pandemic.”—[Official Report, Commons, 17/11/22; cols. 844-57.]
We recently had our CBI annual conference—I have just stepped down as president and am currently vice-president—in Birmingham, where I am proud to be chancellor of the university. There, Tony Danker, our director-general, said:
“Britain is in the middle of stagflation—hit with rocketing inflation and negative growth—for the first time”
in many years. He went on:
“Now, we know how to fight inflation. We know how to fight recession.”
But do we
“know how to fight them together”?
What about growth? He said that
“growth is good. It’s a precondition to a stable society. Without growth the NHS gets worse not better. Without growth, people’s lives get worse not better. Without growth, we lack the resources we need to transform ourselves to a zero-carbon world.”
Since the financial crisis, we have had low growth and flatlining, if not declining, productivity.
There is good news about business rates relief—the Government are finally going to address this—and about infrastructure and Sizewell C, but what about small modular reactors? Rolls-Royce has the capability. We can get them up and running in five years. A 500-megawatt SMR can power electricity for 1 million people. Why have we not started yet?
What about private sector investment? The 130% super- deduction was absolutely brilliant. Now that corporation tax is going up from 19% to 25%, we need permanent full allowances, because that will incentivise companies to invest. We at the CBI estimate that that would unlock an extra £50 billion in capital investment per year by the end of the decade. Do the Government agree?
What about trade? Our trade as a percentage of GDP is the lowest in the G7. Our biggest trade agreement is with the EU. That TCA needs to be unlocked, but we cannot unlock it unless we resolve the Northern Ireland protocol. We need to get round the table and resolve that now.
In his speech at the CBI conference, Prime Minister Rishi Sunak said that
“we … plan to grip inflation and balance the books … And critical to achieving all this is innovation.”
But we invest 1.7% of GDP in innovation and R&D, compared with 3.1% in America. The Prime Minister also said that
“we will … deliver our Lifetime Skills Guarantee to help people of any age retrain and acquire new skills.”
This is great news. When will this start? There are 1.3 million job vacancies.
In his speech, my successor as president of the CBI, Brian McBride, spoke about the good news of our tech unicorns. We have one of the highest levels of tech unicorns in the world. On the other hand, he said:
“We also have one of the biggest skills mismatches in the G7.”
We estimate that 90% of the UK workforce will need to retain by 2030.
Net migration is at 500,000 up to June 2022, yet there are job shortages in every sector, not just in low-skilled jobs. I was addressing the highest tech companies in the country. I asked, “How many of you are experiencing labour shortages?” Every single hand went up. I have said time after time that the Migration Advisory Committee needs to be revamped so that, like the Low Pay Commission and the Monetary Policy Committee, it can independently tell the Government to give one, two or three-year visas sector by sector: so many thousand jobs in this sector, so many thousand in that sector. Why do the Government not do this?
The good news about reskilling is the Help to Grow scheme launched by Rishi Sunak when he was Chancellor; I am on the council. Great—mini-MBAs for SMEs.
In his speech to the CBI, Keir Starmer said his party
“is proud of being pro-business.”
That is great news to hear. He said:
“We won’t ignore the need for workers to come to this country … Migration is part of our national story”.
Good migration has always been good for this country, yet we have fewer industrial robots than any other comparable country. He also made the point about investing in green growth. I believe we should invest in wind, hydrogen, solar, SMRs and, of course, the green industrial revolution, including HydroFLEX, the world’s first retrofitted, hydrogen-powered train, developed by the University of Birmingham with government and industry support.
We do not have an industrial strategy. Do the Government have a plan for an industrial strategy? The business department, BEIS, includes “Industrial Strategy” in its name. The apprenticeship levy is not flexible enough; we need to make it more flexible.
Finally, all this talk about reducing international students and restricting them to elite universities is absolutely wrong. As a third-generation international student from India, I know that international students bring in £30 billion to our economy. They enrich the culture of our universities, form lifelong and generation-long bridges and are one of the strongest elements of soft power in our country. Do not damage international students. We should increase their number from 600,000 to 1 million.
I conclude: growth; investment; address the immediate need for skills; address the long-term need for skills; bring in workforce from abroad; innovation; invest in the green industrial revolution; and let us be grateful and celebrate our universities and our international students.
Baroness Jones of Moulsecoomb (GP)
My Lords, I too welcome the noble Baroness, Lady Lea. Her speech was indeed uncontroversial; it is quite possible that we need more of that in this House. I certainly do not subscribe to that other view.
I want to condemn the Chancellor’s austerity Budget in the strongest possible terms: to excoriate it; to revile it. I will explain why. The spending cuts of £30 billion have left people paying the price for a decade of Conservative economic mismanagement. They will impact the poorest the hardest, while those profiteering from the crisis—we know who they are—have been let off the hook.
The Chancellor announced that he would be sticking to his cash spending plans for the next two years, meaning public sector pay rises of just 2% with inflation at 7% next year, which would result in a 5% real-terms pay cut for public sector workers across the country. Whatever Jeremy Hunt claims, this amounts to taking £30 billion away from people who need it during a cost of living crisis, both directly and through cuts in services. The cuts will force local councils and national public services to deny people vital support.
Yet we know that there is enough wealth in this country for us to avoid the dire economic situation that this Conservative Government are forcing us into. The problem is that wealth is concentrated in too few hands when it should be spread throughout the economy to the benefit of everybody. I can tell you what the Green Party would do: we would introduce a 1% wealth tax on the super-rich—obviously, that is nobody in your Lordships’ House— and increase taxes on unearned income to ensure sufficient money to fund the public services that we need and deserve.
That brings me to two questions that I really would like answered by the Minister today. She talked about a stronger NHS. Does that have a privatised element or is it still completely public? If she could tell me that, it would be fantastic. Also, she mentioned new hospitals. I really would like to know where, when and how many. It must be possible to tell us.
The Green Party would also close the loopholes in the windfall tax to enable investment in green solutions to the energy and climate crisis—not schemes like Sizewell C, which will cost a fortune to build, will come onstream far too late to make a difference and will be incredibly polluting during its construction phase. These measures would put an end to the spiral of Conservative chaos and guarantee investment in the green infrastructure and world-class public services that our country hopes for.
Several noble Lords have mentioned how good—how necessary and stabilising—growth is. That is complete nonsense, I am afraid. Growth destabilises the planet. The noble Lord, Lord Howarth, very kindly covered the issue of climate change being completely absent from the Autumn Statement so I do not need to go into that; but I can tell your Lordships that growth is not necessarily good.
Why on earth did the Government cancel the green stuff and leave tens of thousands of people with draughty homes and huge energy bills? Why do we not save everyone money and tighten up the standards for new homes so that they are all net zero? We should not even be going for net zero; we should be going for carbon negative. That can be done; it is more expensive but it saves money in the long term. It saves home owners money, it saves the Government money in terms of health and illness, and it will help to deal with the climate emergency. The only people who will be put out are the developers who quite possibly donate to the Conservative Party.
The Green Party proposals also include taxing the wealth of the richest 1% of households to raise at least £70 billion; and imposing a dirty profits tax, without any loopholes, on the oil and gas companies currently making huge sums from fossil fuels and the energy crisis. That, of course, is extremely damaging to our planet and to our future security on all sorts of fronts. We would provide increased funding for the Environment Agency and Ofwat to ensure proper enforcement of privatised water companies so that they invest in the infrastructure needed to end the scandal of sewage being poured into the rivers and seas. I have been highly amused by the number of MPs who rush to say, “Nothing to do with us,” in spite of the fact that they voted it through in the other place.
Money raised from the wealth tax and the dirty profits tax would help fund: a new green skilled workforce; a dash for renewables to bring down bills; a national home insulation programme to keep people warm; free childcare to ease the cost of living burden; reducing the cost of travelling by train and bus to make public transport cheaper than travelling by car; an end to the sewage scandal; a national minimum wage of £15 an hour; and decent pay increases that reflect rising inflation for public sector workers.
More Tory austerity will create fear in communities across the country. Services are already facing extreme pressures, and the country cannot stand billions more pounds of public spending cuts. While the Government seem belatedly to have acknowledged the importance of driving down our use of gas through energy efficiency, the measures announced in the Statement go nowhere near far enough to help people who need their homes insulated right now.
Our tax-raising alternative would mean that polluting companies and the very richest households contribute more while our investment in a rapid move to a net-zero economy would fund the new skilled, sustainable, well-paid jobs that will be needed to replace those reliant on fossil fuels. Our plans ensure that those most able and most responsible pay, while the vast majority reap the rewards of a rapid move to a green economy.
While I am laying out our measures, I mention also that we ought to have an immediate freeze on rent rises and a ban on evictions by landlords who simply want to increase rents between tenancies. The Scottish Government have done that; I cannot see why we could not do it here. It would be a very quick measure and would make people feel a lot safer.
I do not want—please—to hear any more of Ministers in your Lordships’ Chamber saying, “Well, nobody has come up with other ideas.” We have; lots of people have better ideas and we need to think about them. Of course they are better ideas, because this Government are themselves washed up and out of ideas.
Lord Sikka (Lab)
My Lords, it is a pleasure to follow the noble Baroness, Lady Jones of Moulsecoomb.
This Budget offers nothing to women. Over half the workforce in the public sector is female and all the Government are offering them is cuts in real wages, condemning millions of teachers, nurses and others to rely on charity.
Depressions are avoided by improving people’s purchasing power but this Government are bent on depleting it; for example, by freezing personal allowances and income tax thresholds. Some 3.2 million additional people will now become liable to pay income tax, and another 2.6 million will pay tax at the higher rates. Even before the pandemic, the poorest 10% of households paid 47.6% of their income in direct and indirect taxes, compared with 33.5% by the richest 10%. Can the Minister explain why the poorest continue to pay the highest proportion of their income in taxes?
After the September Budget, the Government found £19.2 billion to bail out pension funds. They have for years funnelled billions in quantitative easing to City speculators. In the most recent Budget, the Chancellor handed £18 billion of tax cuts to banks but could not hear the cry of 800,000 hungry children. Ministers have taken to the airwaves to claim that they are actually inconveniencing their rich friends, even though the Chancellor failed to introduce a wealth tax or financial transactions tax, end the non-dom tax dodges, or reform trusts to prevent the rich from avoiding inheritance tax.
However, the Government have lowered the 45% income tax band threshold from £150,000 to £125,140. The result is that, from April, a FTSE 100 chief executive earning a £4 million annual salary will pay £1,243 a year extra in income tax. That is equivalent to £24 a week, which is less than they pay for a glass of wine when they go out on a Saturday night. The Government call this progressive taxation. By taxing capital gains at the same rate as earned income and charging national insurance on the same basis, the Government could have raised £25 billion to redistribute, alleviate poverty and invest in the economy. Instead, they have tinkered with the tax-free allowances for capital gains tax and will now raise only around £1.6 billion over five years.
The Government continue to penalise workers by taxing earned income at rates between 20% and 45%, but capital gains are taxed at rates between 10% and 28%. Recipients of capital gains use the National Health Service and social care but pay nothing in national insurance. That is wrong. There is similar tinkering with domestic dividends, which will raise £940 million by 2027-28. The Government could have raised around £8 billion a year by aligning the tax rate on dividends with earned income. And the Government have done absolutely nothing to check tax avoidance on dividends paid to foreign investors; they continue to be paid tax- free. No other Government do that.
Conservative Chancellors make ritualistic references to tax avoidance, and this Budget is no exception—although the Chancellor failed to mention that, since 2010, HMRC has failed to collect over £400 billion in taxes. Alternative models of the tax gap put that amount at around £1,500 billion.
Additional investment in HMRC is most welcome. Every £1 spent on investigations into the tax affairs of large businesses yields an extra £56 in tax to HMRC, while investigations into wealthy individuals yield £28 for every £1 spent. But what budget have the Government actually allocated to HMRC? Let us look at the small print in the Treasury papers. For 2022-23 the budget for HMRC is £5.9 billion, for 2023-24 it goes down to £5.6 billion and for 2024-25 it is down to £4.6 billion. That does not suggest that the Government are serious about tackling our tax-avoiding friends—and double-digit inflation means that HMRC’s budget is in fact totally depleted.
On 13 July, during the passage of the Energy (Oil and Gas) Profits Levy Bill, I drew attention to several fatal flaws in the design of the levy, otherwise known as the windfall tax. It applied only to profits from the North Sea and excluded profits generated through refining, trading and forecourts. It did not apply to untaxed global profits of companies resident in the UK. Several Ministers continued to claim that we cannot tax the global profits of companies, so I shall remind the Minister what the law is: companies resident in the UK are liable to pay UK corporation tax on their global profits. Of course, they get credit for taxes paid in other countries that are subject to double-tax treaties and agreements. That means that if a company has funnelled profits from the UK to a tax haven with zero corporation tax or at least a lower rate, those profits can be taxed here—but the Government choose not to do so.
The result of the failed windfall tax levy is that Shell has not paid any windfall tax while BP might, and neither company has paid any UK corporation tax for the last three years. So my question to the Minister is: how do the Government hope to collect more without redesigning the windfall tax scheme? It needs a complete redesign. I hope the Minister will be able to answer that.
Finally, empirical evidence shows that austerity kills. Some 335,000 people died between 2012 and 2019 from government-imposed austerity. Could the Minister tell us how many more will die from the cuts included in this Budget?
Lord Skidelsky (CB)
My Lords, the Chancellor’s Autumn Statement is designed to reassure the markets of the sustainability of the public finances. That is, the Chancellor accepts as binding the views of the City of London, whether they are right or wrong. It is what the markets think that matters, not how matters really are—a nice intrusion of post-modernist thinking in what is supposed to be the hard science of economic policy-making.
It is pretty obvious why the Government should pay such attention to the financial markets. For decades, the financial sector has propped up the UK’s hollowed-out economy. Financial flows into the City of London allowed the country to neglect production and trade and artificially maintain a higher standard of living than its productive capacity warranted. Now we are paying the price.
Instead of starting to repair this long-term damage, the Autumn Statement is designed to repair the so-called “black hole” in the budget, in the belief that doing so will, by some magical process, produce an automatic surge in output and growth. In other words, it concentrates on shrinking the numerator, the budget, while ignoring the effects of that shrinkage on the denominator, which is GDP growth. Even in terms of maintaining investor confidence, that is misguided, as the noble Lord, Lord Eatwell, pointed out. How does the Chancellor imagine foreign creditors reacting if his spending cuts produce, or deepen, a recession?
Politics should be based on some theory, at any rate, but there is no explicit theory to be found in either the Autumn Statement or the OBR forecast. The Chancellor sets fiscal targets to reassure the markets. The OBR is there to reassure the markets that the Government’s targets are consistent with its own forecasts. The Treasury and the watchdog cling to each other for mutual protection behind a barrage of statistics that claim far more than they are entitled to.
If there is an implicit model behind both Treasury targets and OBR forecasts, it is the one known as financial crowding-out. There is assumed to be a fixed supply of capital, so the Government’s increased demand for funds puts upward pressure on interest rates. The rise in interest rates will “crowd out” any stimulus afforded by additional borrowing. That is why the less the Government borrow, the more growth you will get. That is simply a restatement of the “Treasury view” of the 1920s, explained by the then Chancellor of the Exchequer, Winston Churchill, who said that
“when the Government borrows in the money market it becomes a new competitor with industry and engrosses to itself resources which would otherwise have been employed by private enterprise, and in the process it raises the rent of money to all who have need of it.”—[Official Report, Commons, 15/4/29; col. 53.]
Presumably, Jeremy Hunt would subscribe to that hoary doctrine, though doubtless in less orotund language. It is as though the Keynesian revolution had never happened; we are just back to pre-Keynesian orthodoxy. It is all embellished in various ways and tweaked here and there, but the substance is exactly the same. However, as the economist Rob Calvert Jump wrote in a recent article:
“There is now a consensus amongst economists that austerity does significant damage to an economy’s potential, undermining growth, as the experience of the last decade in Britain has shown us. Further austerity will do far more damage than a ‘fiscal hole’ that disappears with tweaks to models or accounting rules. The ‘fiscal hole’ is a dangerous fiction compared to the hard facts of austerity’s impact.”
The last point is particularly worth emphasising. How many people realise that the notorious “fiscal black hole” is the product of shifting definitions of net public sector debt?
Theory alone cannot provide us with all the answers; in fact, all the macro models are in more or less of a mess. I will give three examples. The first is the rise in the inactivity rate. There has been a fall of 227,000 in employment since a year ago. So we have a tight labour market with unemployment at 3.6%, a strong demand for labour and a falling labour participation rate. How can that be explained?
Secondly, there is the notorious productivity puzzle. No one has much of a handle on this. What we know is that the forecasts suggest there will be a dramatic fall in living standards, by about 7.1% over the next two years. How will creating a depression stimulate enterprise, innovation or investment, which are the drivers of productivity?
Finally, inflation is expected to peak at 11% in the first quarter and then fall. Again, the discussion really makes no advance on the old discussion about the causes of inflation, whether due to excess demand or cost push—there are, of course, cost-push factors. I think everyone understands that the UK’s support of Ukraine has pushed up energy prices. That is why the Government are now explicitly asking the public to save energy to beat Putin, using crude, World War II-style “Dig for Victory” messaging. What is much less understood is that the UK has a special problem: gas is particularly expensive here, due to our chronic lack of gas storage and our inefficient and exploitative energy distributors.
To conclude, I am strongly in favour of balancing the budget, but not by any mixture of cutting spending and raising taxes. The approach I would favour in present circumstances revives the almost forgotten Keynesian idea of a balanced budget multiplier. A contemporary version of this would suggest a windfall tax or excess profits tax on energy producers, the proceeds of which would be spent by the Government on maintaining investment and consumer demand in the face of the economic downturn.
Lord Rogan (UUP)
My Lords, I too welcome the noble Baroness, Lady Lea of Lymm, to the House. In the absence of a functioning Executive and Assembly at Stormont, I wish to place some concerns and some positive words on the record about how the Autumn Statement relates to Northern Ireland.
I welcome the £650 million in Barnett consequentials for public services in Northern Ireland over the next two years. However, there is something of a dark irony about this amount, given that it almost precisely mirrors the £660 million black hole in Northern Ireland’s budget in the current financial year.
In a Written Ministerial Statement published last week, the Northern Ireland Secretary, Mr Chris Heaton-Harris, chose to adopt a rather aggressive stance towards the Province’s political parties, accusing them of failing
“to display the necessary political leadership for which they were elected.”—[Official Report, Commons, 24/11/22; col. 18WS.]
He followed this up with a BBC interview, where his tone was similarly blunt. This was disappointing on two levels.
First, by common consent—not a normal occasion in Northern Ireland politics—my Ulster Unionist colleague Robin Swann was an outstanding Health Minister, who, alongside the incredible health workers themselves, played a heroic role in tackling the challenges before him, particularly during the pandemic. The DUP’s decision to, in effect, collapse the Executive has robbed the Department of Health of the type of political leadership Mr Heaton-Harris said he wanted.
Secondly, a great many people in Northern Ireland are deeply worried about their personal finances as the cost of living crisis tightens its grip. The last thing they need at this moment is to see Mr Heaton-Harris on their television screens telling them that Northern Ireland-specific spending cuts are on their way. He then also threatened to increase fares on public transport, raise the regional rates and introduce water charges. What he failed to do was to provide an indication of when Northern Ireland consumers can expect to receive the £400 promised to them through the energy bills support scheme and the £200 home heating oil support payment promised by the Chancellor in his Autumn Statement.
I pay tribute to His Majesty’s Government for setting aside these much-needed funds at this most difficult time, but it surely cannot be right that while households in Great Britain began receiving their energy bills support scheme payments in October, people in Northern Ireland are yet to receive any payment whatever. Speaking in another place two days before delivering his Autumn Statement, the Chancellor said he was “absolutely determined” to release this money to Northern Ireland households. However, two full weeks have come and gone and still there is no firm indication of how and when these payments will be made. Indeed, the Energy Minister, Graham Stuart, recently admitted that a joint task force set up to deliver the payments had met only twice—I repeat, only twice—between the middle of August and the middle of November. I would be grateful if the Minister, in her concluding remarks, could update me and, most importantly, the people of Northern Ireland on when she expects the first energy payments to be released, and by which mechanism. It is truly a dominant issue in Northern Ireland at present, as I am sure the Minister will fully understand.
One announcement in the Autumn Statement which did not get the attention it merited was the Chancellor’s promise to fund a trade and investment event in Northern Ireland next year. As your Lordships will be aware, next year marks the 25th anniversary of the Belfast agreement, which, counter to the views of naysayers, should be a moment of pride and optimism for Northern Ireland. That landmark should also be used as a catalyst to attract inward investment, which we certainly deeply need. I would be grateful if the Minister could tell me more about the nature of the event the Government have in mind. I would be happy if she writes to me on that.
Finally, I was delighted to hear the Chancellor confirm that he intends to
“proceed with round 2 of the levelling-up fund, at least matching the £1.7 billion value of round 1.”—[Official Report, Commons, 17/11/22; col. 852.]
When he said, “at least matching,” I hope that he meant “increase” because I know many of the bids have been impacted by inflation, with the cost of building materials increasing significantly since the date for final submissions in July. I am delighted that Northern Ireland is very much part of this bidding process, with at least 3% of the £4.8 billion capital fund due to be allocated to bids in the Province, subject, according to the official guideline, to a suitable number of high-quality bids being submitted.
On a day when the minds of many in this House will be at least partially focused on a certain international football match in Qatar, I bring good news for Ministers about a high-quality levelling-up fund bid relating to local football in Northern Ireland. Earlier this month, I was invited to visit Coleraine Football Club, on the stunning Causeway Coast, to hear more about its bid to redevelop its home ground, which is located between two wards within the top 10% most deprived areas of Northern Ireland. The planned works include a vibrant community hub, with meeting rooms for community events and classrooms for educational programmes. There will also be a 3G community training pitch with floodlighting, which will provide a real boost to youth football, both male and female.
I was pleased to see that the club’s application has attracted the support of all sides—I stress, all sides—and at every level of community, business, political and sporting life in the north-west of the Province, as well as from several former Northern Ireland Secretaries of State and other distinguished parliamentarians. I urge the Minister to take an active interest in Coleraine Football Club’s bid, because it surely represents what the Government’s levelling-up agenda is all about.
Baroness Noakes (Con)
My Lords, my noble friend Lady Lea of Lymm was kind enough to reference my role as her mentor. I particularly commended the Companion to her as she absorbs the way in which we work in your Lordships’ House, so today I must live by its paragraph 4.52 and treat the excellent speech by the noble Baroness, Lady Fox of Buckley, as a welcoming of my noble friend and as congratulations on her maiden speech on behalf of the whole House.
I have not always been inspired by the various Budget Statements, Autumn Statements and Spring Statements since we came into government, although I have generally been able to content myself that they were undoubtedly better than anything that a Labour Government would have come up with. With this Autumn Statement, even that flimsy source of comfort has disappeared: it could have come from the pen of Gordon Brown. It is deeply, deeply depressing, and it is not a Conservative Budget.
I will start with growth—or, rather, the lack of focus on growth in the Statement. The Chancellor’s speech had a few references to growth, but there was no deep commitment to a growth economy. Mouthing platitudes like
“Being pro-education is being pro-growth”—[Official Report, Commons, 17/11/22; col. 849.]
is no substitute for an unerring focus on the drivers of growth. Whatever criticisms can be made of the ill-fated fiscal event in September, it was unambiguously focused on growth. I am sorry that, in the kerfuffle that followed in bond markets, amplified by complete regulatory failure in relation to concealed leverage in pension funds, we have lost sight of the imperative of growth.
Instead, this Autumn Statement has gone overboard on financial stability, which is certainly a good thing, but it is nothing like enough. Even worse, the Chancellor has taken financial stability as forecast by others, particularly the OBR and the Bank of England, whose forecasting records are nothing to brag about. More importantly, their forecasts are a largely static view of the economy and generally do not even try to incorporate the dynamic effects of pro-growth policies. The future is bleak if a Government cannot adopt positive pro-growth policies because they score negatively rather than positively in the spreadsheets of the independent forecasters. My noble friend Lady Lea gave us a master class on the issues around economic forecasting. We also need a conversation about the limitations of current approaches to economic forecasting. In my view, the Government should be going full throttle not only for growth itself but also for making the case for dynamic forecasting of the effects of that growth.
I am appalled by the tax burden rising to a post-war high of 37.5%. High taxes blunt incentives to work, invest and innovate. In short, high taxes are anti-growth. I deplore the return to a socialist narrative that singles out savings and investments, with a tax on capital gains and investment income—I never thought that I would see that from a Conservative Government. The high marginal rates of tax associated with the higher tax bands interacting with personal reliefs were already a stain on our tax system, and this has now been magnified by the reduced threshold for the higher rate of tax. We will likely not be forgiven by an electorate that will learn what fiscal drag really is in a time of inflation and what it does to household finances.
I am equally appalled at the lack of focus on controlling expenditure. If ever there were a right time to read the last rites of the expensive white elephant that is HS2, it is now. If ever there were a right time to stop shovelling money into an unreformed and under- performing NHS, it is now. Instead, we are pouring more taxpayers’ money into these black holes. There is no plan to rein in expenditure—all of that is left to another day. But the inconvenient truth is that, without a plan for growth, cuts to expenditure will last longer and be more severe.
This Statement has been clear about raising taxes, but that is all. The Chancellor concluded by saying that the Statement was:
“a balanced plan for stability, growth and public services.”—[Official Report, Commons, 17/11/22; col. 856.]
Throwing money at some public services while being silent about the consequences for others does not count as a plan for public services. There is nothing in the Statement that any reasonable person would count as a plan for growth. My noble friend Lord Bridges said that we are heading towards the stability of the graveyard, but it could be worse than that. Fiscal tightening, coupled with monetary tightening by the Bank as we move into recession, has the potential to wreck the economy.
I believe that we should strain every sinew to create a low-tax, high-growth and small-state economy, where the people of the UK can feel the benefits. This Autumn Statement delivers the exact opposite.
Lord Rooker (Lab)
My Lords, I also welcome the maiden speech of the noble Baroness, Lady Lea. Although I was not in the Chamber, I was listening, and I very much welcome how the noble Baroness, Lady Fox, welcomed her. Also, following the noble Baroness, Lady Noakes, gives me the opportunity to apologise to her for a comment that I made on a speech of hers some 12 months ago, in which I questioned her sincerity. It is a bit late in the day, but my apology is sincerely meant.
I intend to concentrate exclusively on the recent report from Barnardo’s, At What Cost? The Impact of the Cost-of-living Crisis on Children and Young People. Children are our future—that is what this financial Budget should be all about. But I will kick off with the Ben Jennings cartoon in the Guardian last Friday. A father and son are at a kitchen table; the son is eating and the dad has a cup of tea. The son says to the father:
“Dad—when will I be grown up enough not to need dinner any more, like you?”
Table 1.4b in the DWP’s households below average income statistics tells us that 3.9 million children in the UK are living in relative poverty after housing costs. That is more than one in four children in the UK, and 75% of them are in a family where at least one person is working. A YouGov poll for Barnardo’s found that 54% of parents have been forced to cut back on food spending for their family in the past 12 months, 20% struggled to provide food, 26% said that their children’s mental health had worsened, the same number had sold possessions and 16% had left their pets at rescue centres. Time does not permit me to record the statistics from Barnardo’s practitioners, but around two-thirds are supporting a child experiencing poverty, providing access to food banks or giving or signposting access to clothing.
The report notes that
“Persistent poverty can affect a child’s brain development in ways that are harmful to their physical and mental health”,
citing the LSE Centre for Analysis of Social Exclusion. Poverty creates anxiety, and the challenges created by Covid are likely to continue as rising living costs create more anxiety. I picked up such anxiety in two recent Zoom sessions with schools in different parts of the country in the Learn with the Lords programme.
The Barnardo’s report is easy to obtain and read. There are 120 citations and five recommendations, which I will summarise. The first is:
“We recommend the extension of free school meals to all primary school pupils in England”.
Kids must get at least one hot, healthy meal a day, which would overcome the stigma and red tape in present system. Only 22% of children—1.9 million—are eligible for free school meals, but it is estimated that a further 1 million in poverty remain ineligible. Participation is needed for all on universal credit, most of whom are in work.
Barnardo’s second recommendation is:
“Develop and implement a ‘full participation plan’ to ensure vulnerable children can engage … in school life, no matter their home circumstances”.
The recommendation also mentions:
“school trips, and wraparound care through an 8am-6pm extended schools offer which includes access to breakfast clubs and after school clubs”.
On welcome care, the first adult some children see in a day is a teacher, mum or dad having gone early to a cleaning job. Some kids see their younger siblings off to their schools. Uniform grants should also be included for England, as in Wales and Scotland. My view is that we should ban posh, up-market requirements for uniforms —the rules are designed to exclude some children from those schools in the first place.
The third recommendation from Barnardo’s is to:
“Strengthen social security to provide a lifeline to families on a low income.”
Yes, it needs more than the inflation uprating, but I do not want to be churlish and welcome the Government uprating by inflation. It requires targeted support to get us through this winter. Barnardo’s thinks that the Government should reintroduce the £20 universal credit uplift. It says that we are entering a period comparable to that during Covid, and that the Government should also:
“Reverse the two-child limit, which is now the largest single driver of UK child poverty.”
The fourth recommendation from Barnardo’s is:
“Improve mental health interventions and support to combat isolation for vulnerable children and young people.”
The research for the report identified young people saying they felt
“as though they were living in an extended lockdown as rising … costs”
limit their access to activities in education and training. As I said earlier, I raised this point myself in recent Zoom sessions. Although neither the children nor the staff put it in exactly that way, that was the message that I picked up.
Finally, the fifth recommendation is:
“Extend family hubs to every community.”
The report says:
“Family hubs provide a ‘local nerve centre’ for … family support within a community, from stay and play groups, to breastfeeding support to help with issues such as finding a job or applying for benefits. In the 2021 report ‘It Takes a Village’ Barnardo’s calculated that for every £1 invested in its Isle of Wight family hub service, £2.60 of savings were generated.”
Access to work is not the complete answer, otherwise we would not have the majority of universal credit claimants at work. The taxpayer is subsidising low-paying employers on a grand scale; the Government appear happy to continue with this. It is costing billions of pounds to subsidise those employers. I suspect that the forthcoming report from the Economic Affairs Committee regarding the missing 600,000 workers will refer to those who cannot now work due to a lack of access to, or the level of, childcare costs. In fact, the willingness and capacity of people to work is our greatest asset—it is the greatest asset of any country—yet we make it so difficult for many people to start work or get back into work. Low incomes are connected to low birth weights, leading to poor physical health and chronic conditions, according to the Office for National Statistics. Infants in the top 10% of most deprived areas are twice as likely to die in infancy as in the top 10% of least deprived areas, which is also according to the ONS. If they had the same mortality risk, this would amount to over 700 fewer children dying per year in the UK. So what is the answer to the son in the Jennings cartoon? It is certainly not the present policies, as the noble Baroness, Lady Noakes, said. The Tory Government have done too much damage to the UK for them to remain; it is time for them to go.
Lord Tugendhat (Con)
My Lords, like my noble friend Lord Lamont, and unlike my noble friend Lady Noakes, I welcome the Autumn Statement. In the circumstances, it is a balanced and fair attempt to deal with the country’s current problems and to set a course for the future. It has also already done a good deal to restore confidence in the United Kingdom in financial markets, as the fact that the pound is now back to $1.20 shows—and that is no inconsiderable achievement.
However, I share the regret, expressed by my noble friend Lady Noakes, of many in my party that the Chancellor was unable to do more of a direct nature to encourage growth, and that makes me regret all the more the extent to which some Conservative MPs—ex-Ministers as well as Back-Benchers in the House of Commons—seem determined to hamper growth. Let me give examples. First, a number of them are making efforts to prevent the Government achieving their target of building 300,000 homes a year. Success in achieving exactly that number, in fulfilment of an election pledge, helped to lay the foundations of Conservative political and economic success in the 1950s. It really beggars belief that what Harold Macmillan and Ernest Marples could achieve in the early 1950s appears now to be beyond the capacity of a Government who have been in power for 12 years.
Secondly, there is the obsession of some sections of the party with distancing this country as far as possible from the European Union. I refer particularly to plans, opposed by the whole business community and the trade unions, to rid the statute book of EU-derived legislation, even when it was introduced and supported by the United Kingdom, thereby creating an atmosphere of maximum uncertainty for business across the whole range of the economy.
I also draw attention to the knee-jerk reaction against any suggestion of trying to remove the barriers to trade with the EU which were erected as a result of the particular way in which the Johnson Government negotiated our exit. If ever there was a case of putting of ideology before national interest, it is that.
I turn now to criticism of the Autumn Statement for raising taxation. Raising taxes is attacked by some members of my party as being fundamentally un-Conservative. A school of thought has grown up that appears to believe that a Conservative Government must always, and in all circumstances, be in favour of cutting taxes and reducing the size of the state. Of course, there is a strong preference in the Conservative Party for lower taxes and a smaller state, but it is not always possible to pursue policies in that direction. The preference for lower taxes and a smaller state has never been an article of faith; the party has traditionally been pragmatic rather than ideological in framing its economic policies. It has believed in providing good government in accordance with the needs and requirements of the time. Sometimes, that will involve raising taxes and increasing the size of the state. Classically, of course, that is the case in times of war, but by no means only in times of war; we live in such a time now. The challenge of climate change, the consequences of the pandemic, demography and the strains that it puts on the NHS and social care, plus defence and the threat posed by Russia, are all issues that, singly and together, can be tackled only by the state and require heightened public expenditure. In these circumstances, the Government and the whole of the Conservative Party should now recognise this reality, present the country with a set of prioritised policies that respond to the challenges it faces and explain to the people how they intend to spend their money to make their lives better and safer.
Lord Davies of Brixton (Lab)
My Lords, in her absence, I congratulate the noble Baroness, Lady Lea of Lymm, on her maiden speech.
In the Chancellor’s Autumn Statement, I was struck by the emphasis placed on public services. It merited several references, and it was one of the three “priorities” that were identified, that is, stability, growth and public services. There were mentions of teachers and nurses, and the declaration that what we needed were “high-quality public services”. Even the Prime Minister got a mention shoved into the middle of the Statement, that he is also in favour of high-quality public services. My question is: how can we expect to achieve high-quality public services when we are going to cut pay to the people who provide them? Public services are, by and large, about people; people carry out the work that we require to deliver good-quality public services. What does this plan deliver? It delivers cuts to their pay. How can you align those two factors?
In addition to that, cutting the take-home income in real terms of large parts of the workforce in itself creates the austerity that the Government claim they wish to avoid. So I am puzzled—well, I am not puzzled, because it is part and parcel of the Conservative philosophy, but inflicting the pain of the cost of living crisis on public service workers who are receiving pay increases materially less than the pay increases of the equivalent employees in the private sector is totally against what the Government claim they are trying to do.
As well as pay, there are pensions, and I shall say two things. First, I challenge the use, which Ministers have frequently adopted, of the phrase “generous public service pensions”. Public service pensions are not generous; they might be good—I would describe them as “adequate”—but to me they are the pensions that everyone should be receiving. They should not be dragged down to achieve the poor-quality pensions all too prevalent in large parts of the private sector; they are the objective at which all employment should be aimed. Using the term “generous” for such pensions is clearly wrong; it ascribes a motive of generosity. Well, I can assure noble Lords that terms and conditions of employment are never a matter of generosity—they are a matter of the rate for the job, and if the rate for the job includes an adequate pension, that is nothing to do with generosity, it is paying the rate for the job.
Secondly, I come back to the annual allowance for taxation purposes. It is an issue that is not going to go away. Implicit in the Government’s plans is that it is going to be frozen at a time when inflation is out of control; there is galloping inflation of 20% or 30% over a relatively short period, which means a significant effective increase in the impact of the annual allowance on people’s pay and their employment. It is worth reminding ourselves that the last Prime Minister promised to stem the exodus of doctors from the NHS caused by the annual allowance. The Prime Minister before that promised to fix the pension tax relief rules, and the new Chancellor, no less, has called the situation a national scandal in the report that he chaired for the Commons Health Committee.
Unlike the noble Baroness, Lady Penn, I am in favour of high taxation. I make no secret of the fact that I think that the well-off and the wealthy should be paying high rates of income tax—tax on their earnings. What puzzles me, and what I do not understand, is why they think it is worth taxing income from a pension at a marginal rate of 55%. That is what the system does. We are told that 45% is at the margins of what is considered to be acceptable, yet pensions, where people have sought to provide themselves with a decent income, are being taxed at 55%. Where is the sense in that?
Clearly, pensions taxation is a mess and needs a thorough review, but we still need some short-term measures to address the problems caused by the annual allowance. It is not just a question of doctors, although they have quite rightly fought that campaign. I recall comments made three years ago by the noble and gallant Lord, Lord Craig of Radley, who spoke about the annual effect of the annual allowance on forces personnel. He referred to the
“complex and indefensible treatment of Armed Forces pensions”
and pointed out that the annual allowance
“incurs a significant … tax charge”
that
“must be paid forthwith”
unless you use the
“irrevocable scheme pays”—[Official Report, 15/10/19; col. 72.]
approach.
The noble and gallant Lord identified that at that time there were 4,000 members of the Armed Forces who in a single year had breached their annual allowance and had to produce that financial contribution, not out of their current income but out of the income that they did not prospectively expect to receive for many years in future. So I hope that the Minister will be able to assure us that action will be taken on the annual allowance to relieve the impact that it has had on NHS staff as well as on the military, in schools, and throughout the public service.
Lord Livingston of Parkhead (Con)
My Lords, first, I commend fellow Peers of the English and Welsh variety for their sacrifice in being here tonight—speaking as a Scotsman, I can say that it has not been an issue.
As a number of noble Lords have said, the Chancellor was dealt an incredibly difficult hand. We can debate the mix of causes, but I would argue that a mixture of the after-effects of the pandemic, energy price rises, Brexit and its after-effects and the need to restore credibility after a close-to-disastrous mini-Budget dealt the Chancellor a really difficult hand. I think that he has largely stabilised the position. You just have to look at the pound and at gilts and you can see that he has done a reasonable job. However, we still have very high debt, very high borrowing, very high inflation, very high taxes and, as a proportion of the total economy, very high government expenditure—and we have to recognise that the hard yards are ahead of us. Much of the spending and fiscal retrenchment is actually in the future—we have to say that.
One thing on which I also commend the Chancellor is the return of the OBR. I do not agree with the noble Baroness, Lady Fox, that the OBR does not really matter—it matters a lot, and it matters because to the market it did not look like we cared about what the OBR was saying. So I am delighted that it is back, but I raise an issue—that we have Bank of England forecasts on which monetary policy is based, while fiscal policy is based on the OBR forecast. The two are very different: there has been about a 4% gap in GDP in three years’ time between the two. That is a huge gap. To put it in context, if the Government were using the Bank of England forecast, they would not have the same fiscal room and would have had to retrench further. If the Bank of England was using the OBR forecast, it would be looking at raising interest rates higher than it is otherwise doing. We are not quite in the situation of handbrake and accelerator that we were in under the previous Prime Minister. However—and perhaps the Minister can comment on this—I will ask: should we be in a situation where we are operating fiscal and monetary policy off two very different sets of forecasts?
As I said, the Chancellor has stabilised things, but we have to look and build on it, and we have to look for growth. Growth is good—growth pays for services, growth means that we can have lower taxation, and growth means that our children will have a better future than we had. That is something that we would all want. However, it has to be built on sound money; it cannot be based on unsustainable tax cuts. There are two elements to what Governments can do to help growth—and I agree that they can do a lot more to stop it. These elements are around taxation on one side and supply-side changes on the other. On taxation, I think we would all agree that we want a taxation system that encourages people to strive to achieve, promoting social mobility and growth. Yet large parts of our tax system do not do that today; we still tax earnings more than gifts. Why is it that, if a 20-something is lucky enough to be given by his uncle £40,000, he or she pays less or no tax than if he or she worked for 60 hours a week and earned that? There is something wrong—we are not supporting people who are striving to achieve.
Budget after Budget has, regrettably, taken money away from the young, and we have to redress that. The young are our future; they will be supporting us all and providing the growth and we need to support them to do it. We also need a tax system, as the noble Lord, Lord Bilimoria, said, that encourages investment in physical capital, human capital and R&D. The noble Lord, Lord Fox, was quite right in pointing that out. In all these areas, when we look at the major OECD countries, the UK is a laggard, so we need to do something about it. Reform is needed in all these areas before we push up taxes again. As the IFS said:
“Raising badly designed taxes will be more economically damaging than raising sensibly reformed ones.”
Turning to the supply side, I do not have time to go through what we need as a pro-growth trade policy, a pro-growth approach to immigration, a pro-growth approach to skills and a pro-growth recognition that we do not have sufficient numbers of people, particularly in the older workforce, participating in the economy. But there is one area I will dwell on, which is planning. This has been said by many noble Lords already but how can we expect the younger generation to have ambition when they cannot have a home? Of course, existing homeowners have to have a say, but they do not have a veto; nor should they have one. How can we do an affordable green transition when we will not provide the planning support for onshore wind? It is the cheapest way of providing the green transition. How can we have growth in centres of excellence such as Cambridge, when there is nowhere for people to live and new labs cannot set up? Speaking as an ex-Trade Minister who encouraged a lot of investment into the UK, how can we tell people to invest in the UK when we cannot guarantee that they can actually set up their factory, their business or whatever, or have any idea how long it will take? This is a real problem and something we have to address.
In conclusion, the Chancellor has made a start. At least he has formed a vaguely solid base. But now, he has to build on it. The fiscal position was undoubtedly economically difficult. The supply-side and tax changes he needs for growth will be politically very difficult. He has started dealing with the economic problem; he now needs to start dealing with the political problem. In that way, our children can look forward to something a little better than we have.
Baroness Blackwood of North Oxford (Con)
My Lords, I declare my interests as set out in the register and, of course, I welcome the Minister back to her place.
Others more expert than I have analysed the geopolitical drivers that underpin our current economic outlook. It is impossible not to hold very strong opinions about these and the domestic response that has played into the enormous economic upheaval we face, but my plea is for a focus on solutions that will restore faith in our economic future, not least because we are exhausted.
We are exhausted by having to keep rising up as a nation to respond yet again to crisis: first the financial crisis, then Brexit, the pandemic, Ukraine and now an energy and inflation-driven economic downturn. We will be judged not by assigning blame in this time of crisis—there will always be plenty of time for that—but rather by how we respond to put things right for the millions facing real hardship up and down the country. For this reason, I welcome the three key principles laid out by the Chancellor: support for public services, the need for fiscal responsibility, and the need for growth. In the time available, I will focus on the critical role that health and innovation have to play in our national recovery.
A healthy economy needs healthy people, but we have seen a spike of 500,000 British workers dropping out of work due to poor health since the pandemic. These figures shed light on why the labour market remains so tight. The Bank of England chief economist described this as a “real shock” that is fanning inflationary pressures. Here, I must disagree with my noble friend Lady Noakes: NHS Confederation analysis shows that investment in health is not a drain on GDP, as often represented, but rather boosts economic activity. The NHS is a net contributor to the UK economy; every £1 spent on health can generate up to £4 of economic growth and improving the health of just 1% of those not in work due to ill-health, a recognised proxy for general morbidity, could help 180,000 get back into work. It is therefore critical that our health system has the capacity to respond to this, so I welcome the further investment for both the NHS and social care that the Chancellor announced, as well as his commitment to an independently verified workforce plan.
On capital, I note that while it was protected in cash terms, the current 11% inflation means that the Government will have to review their plans for buildings, equipment and, critically, IT—94% of trusts admit they still use handwritten records in at least one department. From John Snow, who analysed dot maps to uncover the link between water pumps and cholera, to Florence Nightingale, who pioneered at-scale statistical analysis in patient care, and John Shaw Billings, who worked out how to mechanically analyse medical and demographic data collected during the US Civil War, we have known for some time now that improving health at an individual and population level requires good management of health data. It is no longer an advanced concept that you can predict the future performance of a company according to how effectively it uses its data, and the NHS is no exception.
At Genomics England, we are a living example of next-generation clinical care founded on the use of technology and data. We hold the largest whole-genome dataset in the world, the National Genomic Research Library, and through the NHS Genomic Medicine Service, whole-genome sequencing is now offered as a standard of care to rare disease and cancer patients. Recent research from Great Ormond Street demonstrates that these benefits for patients include providing additional information for diagnosis in 81% of cases; changed condition management in 24% of cases; and reclassified diagnosis in 14% of cases. Many a Minister has claimed that we are world-leading in all manner of fields, but in genomics, we can be proud that this really is the case.
If we get NHS data right, it will be the cornerstone of a sustainable, high-quality NHS which can respond to the exceptional challenges we face today. It will turbocharge growth and investment in life sciences and health research and it will empower the patient as never before. On that basis, will the Minister assure me that plans for investing in health technology and innovation adoption will be prioritised?
This matters for patient care, but also for life sciences and health research. The life sciences sector is one of, if not the, most productive and high-growth sectors in our economy, contributing almost £37 billion to UK GDP and supporting over 500,000 high-value jobs. It is critical to our national recovery. I am delighted that the Chancellor committed to increasing public R&D as planned, but getting the overall level of R&D investment up requires the right incentives for private investment too. That is why, like the BIA and the noble Lord, Lord Fox, I think that the reforms to R&D tax relief may turn out to be a false economy. They fall hardest on SMEs, as he said. I know the Treasury believes that there is abuse, but life science SMEs are our biotech engine, employing a quarter of the life sciences workforce. They are often loss-leading for years but they have enormous growth and life-saving potential.
As chair of Oxford University Innovation, I am privileged to see many of the UK’s most exciting life sciences spinouts mature to global standing. These include such companies as OMass, RQ Bio, Oxford Nanopore, Autolus, Nightstar and so many more. These are the innovators and innovations that will solve the great global challenges we face, just as they did during the pandemic. It is difficult to see the economic strategy in reducing support for one of our most knowledge-intensive and globally competitive sectors.
This matters now more than ever, because our traditional leadership role in life sciences is at risk. According to the ABPI, our overall share of global R&D spend is falling. If I were to identify one root cause, it would be a serious fall in clinical trials performance. Since 2017-18, the number of patients recruited into industry trials has fallen by 44% and the number of industry trials initiated in the UK has fallen by 41%. This is wholly unacceptable. Thankfully, it is also wholly fixable.
The excellent life sciences vision is critical for sectoral confidence. It also includes action on clinical research and a number of supply-side reforms, but it remains only partially funded. This does not send the right message of long-term certainty and commitment that we need to stimulate inward investment. Will the Minister commit to fully funding the delivery of the life sciences vision, including urgent action on restoring our clinical research capabilities?
In closing, I ask the Minister to remember that we have the power to unlock the full potential of health and innovation for the benefit of all. We know that we have a latent capacity for health and life sciences that is far greater than we ever imagined: we saw it happen in front of our eyes during the pandemic. This means that as we look to the challenges that we face today, we know we can solve them if we apply the same determination, prioritisation and leadership that we applied to develop and deploy vaccines for Covid in record time. We can lead on this, and we should lead on this.
Lord Razzall (LD)
My Lords, nobody could doubt that the British economy is a basket case, and I see nothing in the Autumn Statement that can help what most people regard as the sick man of Europe.
The economic indicators for the next few years are all negative. First, our growth forecast for 2024, 2025 and 2026, as indicated by the OBR, is the worst of all the G20 countries other than Russia. Secondly, government borrowing is at its highest ever level, as noble Lords have indicated, and as a proportion of GDP, it is the highest since the Second World War. Interest costs are helping to cripple the public sector, and as the OBR tells us, the actions of the Bank of England through quantitative easing to get us through the pandemic have involved swapping long-dated gilts for floating rate reserves, thereby giving an early rise in interest rates for government debt as inflation increases. This has made the situation worse. Thirdly, as always, our productivity is the worst of all the G7 countries. The only way to improve productivity is growth and investment, but any policies to help growth have been damaged by the recent antics of the former Prime Minister and Kwasi Kwarteng. Investment possibilities have been reduced; we are no longer the desirable market we once were. Although I disagreed with a lot of Tory policies, I used to believe that at least the economy was safe in their hands—would that were still the case.
Turning to the Autumn Statement itself, first, the freezing of tax allowances to increase tax revenues is a con, if your Lordships will pardon the pun. This is simply designed to enable the Chancellor to stick to the manifesto commitment not to put up income tax rates, but so-called fiscal drag will put up tax for most people. This is clearly an unfair way to proceed.
Secondly, the Government have refused to admit that they have introduced a windfall tax on energy companies despite the fact that they have. Presumably they are saying they have not because the Lib Dems and Labour were calling for it—but they have done it and called it something else. Nevertheless, they have not taken proper advantage of the opportunities given by the huge energy profits. Putting up the rate is not enough. It is ridiculous that the availability of an investment allowance has allowed, for example, Shell to pay no windfall tax despite worldwide profits of nearly £30 billion this year. This tax needs serious reform.
As usual, as my noble friend Lord Shipley said, we have had the clobbering of local authorities. They will be allowed an increase in council tax to fund essential expenditure so that they can be blamed for tax increases to pay for services which should be funded by central government—the same old con trick.
Of course, your Lordships would not expect me to pass on this speech without indicating the elephant in the room: Brexit. The Government say that the major reasons for our disastrous recent economic performance are the pandemic and the war in Ukraine, but our European neighbours have been affected by those factors, and they are doing better than us. As the previous Governor of the Bank of England indicated recently, before the referendum the UK economy was 90% of the size of Germany’s, but that figure is now 60%. As the noble Lord, Lord Eatwell, indicated, despite the fact that the value of the French stock exchange was half of ours in 2015—before the referendum —ours is now smaller than theirs. The OBR let the cat out of the bag over a year ago when calculating that there would be a 4% per annum reduction in our GDP as a result of Brexit, which is significantly greater than the effect of the pandemic. Without Brexit, we would have the growth we need—and, dare I say, maybe Liz Truss might still be Prime Minister.
There are countless examples of the economic damage done by Brexit. I am sorry that the noble Lord, Lord Frost, is not in his place to respond to this, but I will simply mention three. First, we have difficulties exporting our shellfish to Europe; this should have been dealt with in the negotiations. Secondly, our musicians cannot tour Europe because of individual European countries’ restrictions, despite the loss of export earnings from this. The noble Lord, Lord Frost, indicates that this was an oversight. Thirdly, many SMEs have stopped exporting to Europe because of increased bureaucracy.
Any improvement in our economic relationship with Europe is frozen while the Northern Ireland protocol issue is not resolved. Even Andrew Neil told us in the Mail last week that Brexit has not delivered what people voted for: a reduction in immigration. We can forget the ONS figures from last week of net migration of over 500,000 last year, as there were clearly special factors involved. However, the OBR figures for 2025, 2026 and 2027 are based on over 200,000 net migrants generating economic activity, without whom our growth prospects—already the worst in the G20, other than Russia—will be even worse.
Is this what the Government planned when they won the last election on the slogan, “Get Brexit done”? Is this what their red wall voters voted for? When will the Government recognise that Brexit has not brought the proposed sunlit uplands that we were all promised? Does the reaction to the floating, apparently from Downing Street, of a Swiss-type deal mean that we are frozen for ever in a disastrous economic limbo? When will the Government begin serious talks with the European Union to improve our trading relationships and help our economy?
Lord Horam (Con)
One of the good things about the financial Statement was its brevity. The documents accompanying it were about one-third the length of those that normally accompany a Budget Statement. I was profoundly relieved; not only were they brief but they were clear. I actually read them. Usually I skip them or look at the summary in the newspapers, but these were a delight. I say to my noble friend Lady Penn that I hope this point can be repeated for future economic Statements.
As for the content, I had the advantage of no fewer than two briefings from the Chancellor before the Statement. In both, he said that he was aiming for stability, growth and compassion. I notice that, in the eventual Statement, “compassion” had been translated to “public services”. Perhaps the Treasury could not quite bring itself to use the word “compassion” and had to say “public services” instead. I can understand the mentality. None the less, whatever it was—compassion or public services—I know what the Chancellor meant. With regard to stability, clearly he achieved a great deal. That was not too difficult after the turmoil of the previous few weeks, but he unquestionably achieved it.
On compassion/public services, the Chancellor also did well. Universal credit was fully inflation-proofed, as was the living wage, and there was the energy price guarantee. I noticed that, in her speech, the right reverend Prelate the Bishop of Gloucester welcomed the emphasis on these factors in the Autumn Statement. I say to her that I am enormously impressed by the work that the Church of England does with food banks. It is a pity that these must be so extensive; none the less, it can be enormously proud of their vital contribution to helping the poorest in our society. Not only that, but there was more spending for the NHS, more social care spending and a continuation and extending of the levelling-up agenda. That is good too, on compassion and public services.
On growth, the Budget is clearly less good. We do not know what is happening and anything could change. In the next few months there could be a resolution of the war in Ukraine and gas prices could come down. We simply do not know, and forecasting in this area is extremely difficult. We will probably have a world recession—almost every country. In particular, the situation in China is very worrying. However, as my noble friend Lord Lamont pointed out, the timing of the Budget was very clever from that point of view because it did not squeeze things now. Things may be squeezed in about two or three years’ time, but for now it kept public spending up, which is vital during this very difficult period.
Overall, then, I agree with those who say that it has been a solid start for a new Government. I notice that even the shadow Chancellor in the other place did not really criticise the Budget measures themselves, apart from one reference to non-dom taxation. Her comments, like those of the noble Lord, Lord Eatwell, today, were about the whole 12 years, of which she was understandably critical. Criticisms of the Budget were much less marked.
I shall say something about tax levels, which were commented on by my noble friend Lord Tugendhat. As he said, it is quite normal for Conservative Governments to increase taxation. George Osborne did it; Geoffrey Howe did it. For heaven’s sake, Benjamin Disraeli did it. When the Liberals were promising to end income tax altogether, he maintained it because it was necessary for important public works. Mind you, Disraeli also said, “They give you the figures, don’t they?” Never mind that—he was rather more cavalier about these things than we would perhaps accept today. It is the case that Conservative Governments, when necessary, increase taxation.
At the moment, tax levels are at about 33% of GDP in the United Kingdom, going up to about 35% as a result of these measures, possibly even more. These are certainly the highest levels since the 1930s, which is a pity. None the less, to take this as just the UK position is an insular point of view. Looking across Europe, the average level of tax as a percentage of GDP in the European Union is 41%. In Germany it is 40%, in Belgium 46%, in Denmark 47% and in France over 47%. It is argued that if you have high taxes, you diminish growth. But look at the growth of, say, France or Germany compared to the UK. There is not a lot of difference over the past 20 or 30 years, despite their having higher taxes. We should be careful about this argument that the Tories should always be a low-tax party—I am not at all convinced. High taxes are necessary from time to time and we should not fear them.
The advantage of having higher taxes in this case is that we get better public services—and not only that but greater equality. We have been able to help the poor more than we otherwise would have done under the Truss economics. We can also help levelling up. I go to Germany a lot and see what has been done in north Germany, in the old German Democratic Republic. There has been huge improvement in places such as Weimar, Stralsund and Dresden. Why? Because they had a solidarity tax of €35 billion a year for 30 years —levelling up with a vengeance. We can only dream of levelling up on that sort of scale. So that is an advantage.
Finally, the present need is for more investment, and since private investment is so low, the public sector needs to help. I disagree with many of the things that the noble Lord, Lord Eatwell, said, but he was entirely right about that: public sector investment must step in, and it does not crowd out or hinder private investment but helps it. For example, in America at the moment they have a new CHIPS and Science Bill going through to help the semiconductors industry, which is so important to our world. That is an example of the public sector helping the private sector, and we need more.
This is a solid Budget. Undoubtedly, we will have a tough 12 months, but I believe we are heading in the right direction.
Viscount Chandos (Lab)
My Lords, what can a Back-Bench speaker this late in the order usefully do other than allow your Lordships to get home as early as possible? It is not to repeat arguments powerfully made by other speakers on every side of the House, nor is it to usurp the role of the Front-Bench spokesman in winding up—although speaking late after my noble friend Lord Eatwell so passionately opened for these Benches prompted happy memories of my winding-up debates which he opened when I was his apprentice in 1995 to 1997. What a time of justified optimism that was.
My noble friend drew comparisons between the austerity inflicted by George Osborne and that now proposed by Sunak and Hunt. As Marx said, history repeats itself,
“the first time as tragedy, the second as farce,”
although in this case, the farce came under Truss and Kwarteng, followed by a repeat of tragedy for millions of people as the Government resort to overkill in a certainly vain attempt to restore confidence in their shattered economic and financial credibility—a sticking plaster over a deep wound. For the avoidance of doubt, I am more inclined to follow Marx for his one-liners than for his economics.
I propose to use my time to cover a couple of points raised by the Minister which have perhaps not received particular attention. The Minister talked proudly of investing in capital—the noble Lord, Lord Horam, just emphasised how important that is—and then tried to spin a budgeted freeze in nominal terms in public investment at a time of rocketing inflation as confirmation of this, whereas, as the Resolution Foundation has calculated, it represents a £15 billion cut in real terms in capital investment.
Why do these cuts have to take place? A number of noble Lords have highlighted the hugely increased debt service cost that is causing the Government to look for savings elsewhere. The noble Lord, Lord Lamont, highlighted the increase in index-linked debt from 6% in 2001 to 22% now, the vast majority of that coming under Conservative or Conservative-led Governments. However, as important a factor in the increase in the debt service cost are the projected payments by the Treasury to the Bank of England under the indemnity that has been entered into for the operations of quantitative easing.
At the Economic Affairs Committee meeting earlier today, the Governor of the Bank of England said that he did not believe in hindsight and therefore he would not agree with his own chief economist’s evidence earlier this month that maybe too much quantitative easing had taken place in the period since the start of the pandemic. Quantitative easing represents a huge interest rate swap or a hedge fund carry trade, so that debt service has been lower than the last 10 years as payments under the indemnity have gone from the Bank to the Treasury. However, this is payback time. Even John Redwood has noticed this.
The Minister also made a point of the tax rises on wealthier individuals—wealthier but not the wealthiest. Growth in inequality over the last 12 years, as the noble Lord, Lord Willetts, has highlighted, has been much more in terms of wealth and capital than in income. I hope my friendship with the noble Baroness, Lady Noakes, who I am glad to say is not in her place, will survive my advocating a much more significant increase in the taxation of wealth than the phased reduction of the capital gains tax tax-free allowance, whose impact anyway is much more relevant to the relatively wealthy but is a rounding error for the very wealthy.
I am not as convinced as my noble friend Lord Sikka by the arguments for equalising the rate of CGT with that of income tax. Evidence from the tax take after that doctrinaire socialist, the noble Lord, Lord Lawson, equalised the rates suggests that it may not be the optimal policy. Equally, the right rate in terms of both tax take and fairness is almost certainly not the 50% of marginal income tax that currently applies.
Finally, inheritance tax is so important. The noble Lord, Lord Livingston, highlighted the question of why gifts should be taxed at a lower rate than income. The great reform of inheritance tax that is needed is the restoration of the taxation of inter vivos gifts as applied in capital transfer tax, introduced by Denis Healey. It is worth saying that this is particularly relevant for non-doms because, even if a non-dom volunteers to pay income tax on income from assets held overseas, the potential avoidance of UK inheritance tax deprives the Exchequer of substantial revenue, as the Prime Minister and former Chancellor must be aware. Increasing rates of VAT, personal tax and corporate tax is often said to be the only way of raising substantial amounts. However, just as public expenditure is made up of a mix of large items and smaller items, so the raising of tax is a combination of large, cash-generating taxes and smaller ones such as CGT and inheritance tax.
Baroness Cumberlege (Con)
My Lords, my interests are in the Lords register. I will be brief.
I wish to focus on the NHS expenditure that was a feature of the Autumn Statement, specifically on one element that requires attention. I am pleased that the Chancellor was able to find additional funding for the NHS in England. His action means that NHS spending will rise in real terms by 2% over the next two years. That may sound modest, but it is billions of pounds, and it has been warmly welcomed by NHS England. It will make a difference in these challenging times.
The one specific part of the NHS that I wish to focus on is community pharmacy. I do so because pharmacies are facing unprecedented problems and the answer lies in sensible funding decisions. I have just three points that I wish to make.
First, community pharmacies are the most accessible part of our health service. Six million people visit a pharmacy every day—not once a week, but every day. No other part of the NHS sees that huge number of people each day. Community pharmacies are a linchpin in the system. They provide billions of prescription medicines every year safely and promptly. They can intervene with advice on good health, diet, exercise, how to stop smoking and so on. They provide millions of flu jabs and Covid vaccinations. They also do much more, but without people having to make an appointment. That is crucial in the NHS. The fact is that we and the NHS would be in real trouble if pharmacies were not there.
That brings me to my second point. There is a real risk that pharmacies will not be there unless action is taken urgently. Community pharmacies have seen a decrease of 25% in the funding that they get from the Department of Health and NHS England since 2016. Many are now running at a loss, forced to cut back on services and opening times—precisely the opposite of what we need them to be doing. That is not sustainable; the situation is getting worse week by week. Many will face permanent closure if we do not act now.
This financial crisis in pharmacy is caused by a funding model that is out of date and not fit for purpose. Pharmacies are providing 65 million consultations to the public every year, and yet the funding model does not pay for that. They are dispensing many medicines at a loss because the funding model does not properly recognise the real costs. Because of staffing shortages, they have had to use locums, but the cost of a locum has increased by 50% since 2019, and the funding model does not pay for that.
Can my noble friend ask her DHSC colleagues to intervene before it is too late? In the short term, a modest but fair uplift is urgently needed, so that pharmacies can keep their doors open and continue to serve those millions of people who rely on them day in, day out. In the medium term, we need a new funding model that is realistic and provides stability.
My final point is that, having stabilised the situation through fair funding, we should be making more use of community pharmacies. In Scotland, there is a service called Pharmacy First. It funds pharmacies to be the first port of call to treat health issues such as sore throat, earache and urinary tract infections—conditions with which people would otherwise visit their GP or even A&E. We do not have such a service in England, but we need one. It will free up capacity so that GPs and hospitals can see those patients that they really need to see. The Pharmaceutical Services Negotiating Committee estimates that it will save £640 million a year. In the context of the NHS budget of over £160 billion, the cost of Pharmacy First would be a drop in the ocean. I hope that my noble friend the Minister agrees and that she will encourage DHSC Ministers to move at pace in putting this service in place.
If we do those things, we will ensure that community pharmacies continue to be the wonderful resource that they are and the public’s entry point into healthcare. We will be spending a relatively modest amount of money very wisely, improving services to the public and helping the NHS in the process. We cannot afford to ignore them. For many cities, towns and villages, their place is in the heart of the communities that they serve, essential to the health and well-being of the local population.
Lord Londesborough (CB)
My Lords, it was only seven weeks ago that I and many other noble Lords here today spoke out against the so-called mini-Budget during the debate on the economy in this place. Well, much has changed since then, but it has left the new Government with little room for manoeuvre and an understandable fear of markets taking fright at any further signs of fiscal lunacy. Therefore, I will give credit where due to the Chancellor for crafting a relatively sensible and balanced Autumn Statement. The reaction from both debt and currency markets has been reassuring. That said, there is very little here for business, enterprise or innovation.
Most of us, if not all, are pro-growth and pro the causes of growth. Yet here we have a Conservative Government that have dropped the baton—scarred, no doubt, by Liz Truss’s “Growth, growth, growth” strategy. I apologise for adopting a cheap football analogy at this time in the evening, but a new manager has got rid of our dodgy keeper, stiffened the defence and central midfield but left us with a toothless attack and very little creativity. My focus will be on the attack—what businesses, and especially SMEs, need to help the UK become both productive and competitive. I refer your Lordships to my interests set out in the register, and I speak from my experience of both start-ups and scale-ups.
A quick word on the SME landscape: we keep hearing about the 5.5 million SMEs in the UK, but over 4 million of these employ no staff. We should focus on the 1.3 million businesses that employ between one and 50 staff, and generate £1.3 trillion in annual turnover, and on the equally important 35,000 businesses that employ between 50 and 250 staff, and generate a further £700 billion in revenues. These two groups alone now account for almost 50% of all private sector turnover in this country. They are the businesses that grow at the fastest rate and, crucially, show potential for further growth. We need a bottom-up strategy to support and galvanise these emerging businesses, rather than a top-down macro approach—the very opposite of trickle-down economics.
As we know, economic growth is, in essence, a function of the size of the economically active workforce and the productivity of that workforce. For the last three years, our workforce has been shrinking and demographic data suggests this trend will not be reversed. That leaves us with boosting productivity—the only way we will see a return to real growth.
Since 2010, the UK’s productivity as measured by GDP output per hour has grown by a miserly 4%, according to the OECD. To put this in context, France saw an 8% gain, Germany almost 10% and the US more than 10%, and even those are not great numbers. Why we are lagging behind is a complicated question, but the continued very weak levels of business investment are undoubtedly a major factor.
As the noble Lord, Lord Fox, and the noble Baroness, Lady Blackwood, pointed out, it was especially disappointing to see the Chancellor cut the R&D tax credits for SMEs, which will inevitably hit innovation and productivity, especially in loss-making start-ups. The Treasury is apparently concerned about growing taxpayer losses to fraud and spurious claims, but that reflects on poor oversight and execution of the programme rather than the actual impact of R&D on economic growth. I ask the Minister whether the Government have conducted any assessment of the impact on productivity from these R&D tax cuts. I thought the Government were pursuing an ambition to turn Britain into the “world’s next Silicon Valley” or “the Singapore of Europe”.
There was also very little for exporters in the Autumn Statement. Given weakening domestic demand, an export-led recovery may be the most realistic way of engineering our way out of recession. We still have a very competitive exchange rate: against the US dollar, sterling is close to $1.20, compared to $1.70 in 2015. That is a depreciation of some 30%. Remember what happened back in 1992 when we crashed out of the ERM: sterling lost 20% of its value, and our economy grew by an average 3% per annum over the rest of the decade, driven by booming exports. This spells an opportunity for boosting British exports across the Americas, Middle East and Asia, because we are price competitive once again.
What are the new Government’s plans to seize this opportunity? It is all the more urgent, as our exports to Europe have fallen by 15%, with thousands of SMEs, consumed by red tape, simply giving up selling to the EU—do not mention to them Boris Johnson’s oven-ready deal. I ask this question because, although Brexit will not be reversed, there is a clear need for closer trading relations with the EU. It makes commercial sense for both sides, whether we look at a new version of the Swiss, Norwegian or any other model. I understand that factions of the Tory party—notably the European Research Group—are resistant. But at a time of recession, can we really afford to play politics with our economy?
Lord Leigh of Hurley (Con)
My Lords, I add my congratulations to the noble Baroness, Lady Lea—no relation. She is someone I have admired for many years, in all her writings and output, and she gave a most excellent maiden speech.
I welcome the Autumn Statement, which has helped the UK’s position as fiscally prudent, rescued the pound and helped interest rates—some might say that this is a coded message for 3-0—as we fight the damage caused to our economy by Mr Putin and Covid.
As the chairman of the Finance Bill Sub-Committee, I feel it would not be appropriate to talk here about research and development tax credits, much as I would like to, given that, as the Chancellor has mentioned, there is abuse of the current system. But I hope that the noble Lord, Lord Fox, will be pleased when he sees our report, which I hope will be published in January.
As the final Back-Bench speaker, it is a bit of a struggle to come up with something new, so perhaps I can start with something that was not in the Statement: an increase in capital gains tax rates, which had been rumoured and, I understand, is being discussed by the Labour Party—along with abolishing your Lordships’ House and private schools. The Chancellor listened to real concerns from British entrepreneurs and investors in both public and private companies, who said that an increase in capital gains tax would have been a disaster for SMEs, which, as has just been described to us, are the engine of growth for our economy.
Let me deal with two new issues. The first is the energy profits levy; the noble Lord, Lord Sikka, touched on this but from a different perspective. This will raise an enormous amount of revenue, putting most other measures in the shade, so I am surprised that it has not had more attention. We are talking about £41.6 billion in revenue, of which £7.2 billion is this year. I welcome the tax but have reservations, and I draw your Lordships’ attention to my interests on the register, which include my employment at the finnCap Group, a NomAd advising small oil and gas exploration companies, among many others. It is small independent UK companies that produce 60% of our oil and gas needs, and they may well be driven out of business by this tax as currently proposed.
In a highly competitive UK market, the ability of smaller players to invest in current licences—as well as new licences in the upcoming round—will be severely jeopardised by the formulas in the EPL. Smaller producers are vital to a robust and competitive market, yet lack the resilience and deep pockets of the oil super-majors. As only a teeny fraction of the super-majors’ business is based in the UK, they are largely immune to the effects of the EPL, or any further iteration of it. The effect of the EPL may therefore be to concentrate even more power in their hands—that is, if they choose to stay in the North Sea.
One simple amendment which I gather is being considered in the other place, and which would be relatively straightforward to implement and would avoid triggering the above scenarios, is to impose a proper windfall levy; in other words, one triggered at above windfall prices. For example, if we had a floor of $75 per BBL of oil and 100p per therm of gas, and a windfall tax were applied once prices were above that, that would be a taxation mechanism similar to that offered in other countries in the world, in particular in west Africa, and the industry would understand. Such a mechanism would allow investment to continue flowing into UK energy.
However, the EPL, and any successor iteration, would penalise investment in virtually all price environments. It therefore creates uncertainty about the circumstances in which it could be withdrawn. Indeed, a main driver of capital flight with the EPL is the lack of certainty. Would it be removed if commodity prices suddenly dropped? Can my noble friend the Minister give us some assurances on this? As currently outlined, most UK North Sea players instead believe that the EPL will be imposed as a permanent tax, unrelated to prices, with a deleterious effect on investment, which is of course badly needed in the North Sea.
We know that we need domestic energy security, and there is a risk that the current proposals will lead to a real flight from the UK and a corresponding loss of revenue as decommissioning is brought forward, and it will have a negative environmental impact as gas has to be imported into the country to compensate.
The other area I want to touch on is the taxation of multinational companies, which has also not been mentioned in this debate—and I have listened to every speaker. The Chancellor announced that we will implement the globally agreed G20 OECD inclusive framework pillar 2 in the UK in 2024. The pillar 1 negotiations are still stalled, and it is these which are critical to raising tax from multinationals, particularly those based in the USA. As I have argued in this Chamber before, the digital sales tax is not fit for purpose, but the Government have rejected ideas to tighten it up, and the Autumn Statement specifically said that there will not be an online sales tax. I was pleased to see that pillar 2, which is targeted at UK companies, will include a qualified domestic minimum top-up tax. However, this means that Amazon, Google and so on may pay a tiny bit more tax on their business in the UK, but nothing that will move the dial and, of course, it will mean that the UK groups bear the extra tax and compliance costs of their worldwide income.
We are bringing in the undertaxed profits rule, which is helpful. It is a backstop so will help, and the Government are to be congratulated on confirming that it will be used, but that does not come in until 2025. So we have not really addressed the taxation of, in particular, US groups trading here, and this needs urgent attention and action. I would welcome the opportunity to work with the Government on this. I believe we have turned a corner and that this Autumn Statement is the moment we address our challenges and start to tackle them.
Lord Desai (Non-Afl)
My Lords, I shall speak in the gap. In July last, when Boris Johnson was still in power, I said in this House that things are going to get very bad and we will see a repetition of the 1970s and 1980s. The only thing against the Autumn Statement is that it is too optimistic about the future. It more or less says, “Let’s hold on until the election and then we will face up to the reality.” It is not just the UK that is in trouble; I emphasise that this is not local trouble. We had an energy price shock in 1973, and it took us another 16 years before the economy more or less went back to growth. In a situation like this, we have to be ready for a very hard, harsh reality, which we were. We abandoned Keynesianism in the 1970s. We took up monetarism in the 1980s. Governments change, and our philosophies change. We are going to go through a similar crisis now. I am sorry to be the bearer of bad news, but I thought I had better say that.
In a number of ways, we do not realise that our economy has changed fundamentally. In the 1970s and 1980s, we lost manufacturing as a major activity in this country and became more or less a service economy. Manufacturing went to Asia. Part of the story of productivity growth being slow is because we lost manufacturing and gained services. All western countries have similarly lost productivity, partly because productivity is difficult to measure if you are not manufacturing, but partly because we are less productive, and that is the reality. I do not know what the solution is. Yes, history does repeat itself, but there is one difference that I want to mention. During the 1980s, Mrs Thatcher, to her great credit, squeezed the economy dry until inflation went out of the system. She had North Sea oil as a support. She sold social housing, which made some money, and she sold some of the nationalised industries. We do not have that chance any more.
If anything, we are going to face a much worse situation than currently envisaged. We ought to get our thinking out of this current tax and growth nonsense. Forget about all that. Regardless of whatever damage Liz Truss may or may not have done, long before that I had a premonition that this economy was going to go down the drain. That is all I can say. I am not the Chancellor and have no chance of becoming Prime Minister, so I will sit down.
Baroness Kramer (LD)
My Lords, if I had not been cheerful before hearing from the noble Lord, Lord Desai, obviously I am in an excellent mood now. It is a dark prospect indeed. I offset it by welcoming the noble Baroness, Lady Lea of Lymm. I look forward to hearing her controversial speeches and, I suspect, some future jousting with the noble Lord, Lord Skidelsky, on economic models.
The noble Lord, Lord Lamont, led the charge, as it were, with support for the Government. He got quite a bit of support from the noble Lord, Lord Leigh, and warm words of support from the noble Lords, Lord Tugendhat, Lord Horam and Lord Livingston. I can accept that the pandemic and Putin’s war in Ukraine have hit our economy hard, but the damage that has driven the harshest Budget in memory—the Autumn Statement was really a Budget—has been the systemic mistakes of a Conservative Government I see as largely blinded by ideology. This was an Autumn Statement dominated by the need to calm the financial markets, and for that we are now all paying a high price.
The noble Lord, Lord Eatwell, may agree with those last few words, but he might have made a little slip in his speech. The previous recession was in 2008, when we had six quarters of negative growth, the most significant of which was in the first quarter of 2009, under a Labour Government. During the coalition years there was no recession.
Speakers today have raised many concerns that I share. I pay tribute to the extraordinary speeches of both the right reverend Prelate the Bishop of Gloucester and the noble Lord, Lord Rooker, in really exposing the pain that so many vulnerable people are feeling. This is despite government help with inflation-rated increases in benefits and the state pension. They face a dire winter, and over time many will suffer additionally because of the delays in the migration of ESA to universal credit and in the PIP rollout.
I am really shocked to hear from the noble Lord, Lord Rogan, that in Northern Ireland even the energy money has not been paid out. My noble friend Lord Shipley spoke of the absence of housing anywhere in the Autumn Statement when it is so utterly critical to so many people’s well-being. The noble Lord, Lord Tugendhat, added very much to that discussion of housing.
The squeezed middle, thanks to fiscal drag, which the noble Lord, Lord Razzall, talked about, face tax increases of over £2,000, increases in council tax—we have heard that the impact of council tax is so unevenly spread across the country—higher mortgages or rent and £500 more in energy bills. I have not even started to list the increased costs of food, shoes for the kids and the rest of daily living. Wages in the private sector, rising at an average of 6.2%, can take no more than the edge off the pain, and public sector wages, rising at only 2.2% on average, are leaving many public sector workers not only near despair but ready to quit the sector. The noble Lord, Lord Davies of Brixton, very much raised this issue.
Many small businesses, the backbone of our economy, are struggling with costs in every direction. They need to know urgently what happens to energy support after April simply to be able to plan and price their products. The Government provided small businesses with a little relief from the uprating effect of business rates, but freezing the VAT threshold, keeping the lower NICs threshold for employees and cutting the R&D relief scheme will undo much of the benefit.
The loss of the R&D scheme, as we heard from so many today—the noble Lords, Lord Fox, Lord Bilimoria and Lord Londesborough, and the noble Baroness, Lady Blackwood—is having such an impact on small businesses. In the industry conversation I had last week, they said that nearly a quarter of small firms are considering either downsizing, restructuring or closing rather than investing in innovation, and that is driven by that change.
The economic forecasts in the Green Book require not just a soaring tax take but a virtual slash and burn of unprotected public services post 2025. The noble Lord, Lord Horam, talked about support for public sector investors; that is not in this Autumn Statement. The noble Lords, Lord Fox, Lord Hain and Lord Davies of Brixton, again focused on the impact on public services post the next election. All of us are in favour of efficiency in public services but we know that efficiency requires substantial investment in people, training, systems, physical plant and equipment. It is usually cost up front and savings later. Indeed, that same pattern of slash and burn after 2025 is repeated for infrastructure; I think the noble Lord, Lord Howarth, caught on to that issue.
When the Government used the phrase “a plan for growth”, most of us thought, “If only.” It is extraordinary to me that, as far as I could see, the detriment of the absence of growth drew together the remarks of the noble Baroness, Lady Noakes, and the noble Lord, Lord Bridges, with those of the noble Lords, Lord Skidelsky, Lord Sikka, Lord Bilimoria and Lord Londesborough—an extraordinary gathering who at least agree on what the detriment is. They might disagree on the causes and solutions but they are in the same place on the underlying problem.
Even the CBI, despite its usual caution, has said that there is no meaningful plan for growth. My party, the Liberal Democrats, focuses on growth and, importantly, sustainable growth. I say that to the noble Baroness, Lady Jones, as I know that is her concern. We have done it in the past by working with businesses. Vince Cable’s industrial strategy, the creation of catapults and a huge focus on innovation made such a marked difference, as did Ed Davey’s use of contracts for difference to unleash private investment in renewable energy.
This matters because business investment is now the lowest in living memory. Changing Solvency II—everyone says, “We will do it with regulation”—to allow for more pension money to go into infrastructure and upscaling may help marginally but it does not fix the problem. My goodness, do we need to be careful that our pension funds do not embark on excessive risk as a result of new freedoms to invest in illiquid and risky assets. I note today that the City Minister has just indicated that he will weaken ring-fencing on the retail banks.
Net-zero business offers us a significant opportunity for growth—we heard so much on this from the noble Baroness, Lady Hayman—but we have to be globally competitive and that means a far more effective and targeted collaboration between government and the private sector. It even means an industrial strategy. I refer to the noble Lord, Lord Bilimoria, who raised that issue; it is so absent from any government proposal.
We also have to fix the collapse in our trade. The OBR explains that our trading intensity has declined by 15%. Much-touted new trade deals barely shift the dial; to paraphrase George Eustice, the much-extolled Australian trade deal is a failure for British agriculture. The financial services industry in the UK has lost 6.6% of its services exports to the EU. The Lord Mayor of London said this week that
“businesses, intellectual property and people are leaving our shores.”
Worse is to come when euro clearing moves in 2025. I also understand this week from talking to manufacturing trade organisations that manufacturing has lost 30% of its volume of physical exports to Europe and UK firms have been essentially removed from European supply chains.
The Federation of Small Businesses tells us that most small businesses have now dropped out of exporting. At the very least, the Government should be using the trade and co-operation agreement with the EU to mitigate what they can of this damage, and they need to work out very swiftly—I refer to the noble Lords, Lord Bilimoria and Lord Razzall—how to get back to obstacle-free access to Europe.
Businesses large and small are exercised by workforce shortages. I am on the Economic Affairs Committee, which will come out with a report on this issue, but I wanted to pick up on a point made by the noble Baroness, Lady Blackwood: it is people who are already retired who are falling sick; they are not falling sick and then retiring. That is a real conundrum for us and a very dangerous pattern. Getting inactive people over 50 back into the workforce is not going to happen. I know the committee has not come to its conclusions, so we will see where it goes, but the noble Lord, Lord Londesborough, also pointed to the population demographics that are now working so strongly against us.
The Government control our immigration system, so why do they not use it to support our economy and tackle the labour shortage? The four-year visa system for skilled workers is cited constantly by Ministers, but many businesses cannot cope with the churn of workers who come for just four years; they want workers who stay long-term. We need a far more flexible system before we lose horticulture, undermine construction and shrink hospitality, just to name three sectors facing crisis.
The OECD forecasts that only Russia among the major economies will contract more than the UK next year. As so many have said, we are the only G7 country whose output has not recovered to pre-pandemic levels. I echo the noble Lord, Lord Desai: the Government have constantly neglected the fundamentals of a modern economy. They have undermined our resilience and they offer us a plan for pain, not for growth.
Lord Tunnicliffe (Lab)
My Lords, this has been an excellent and very interesting debate. I will refrain from commenting on individual speeches because I realise that everyone wants to listen to the Minister at this time of night, not to me.
I welcome the noble Baroness, Lady Lea of Lymm, to your Lordships’ House. She made an excellent maiden speech.
I also welcome the Chancellor managing to deliver his Autumn Statement without sending the markets into freefall. That may be a very low bar, but it is one that his predecessor spectacularly failed to clear. September’s mini-Budget had disastrous consequences for families across the country, leading to higher mortgages and rents and dwindling consumer confidence.
The economic vandalism of the last Prime Minister and Chancellor has led to the current occupant of Downing Street piling further pressure on the public. Having promised tax cuts during this summer’s Conservative leadership contest, Mr Sunak has now reverted to form. He hiked taxes to the highest level in 70 years as Chancellor, and Jeremy Hunt has ratcheted up taxes still further.
There were two tests for the Government ahead of this Autumn Statement: would they make fair choices, and would they deliver the growth that our economy so badly needs? All the analysis we have seen since 17 November suggests that the Government have failed on both counts. As more and more people find themselves paying tax, some others were spared an increase to their bills: banks will see their surcharge fall from 8% to 3%; energy producers that exploit fossil fuels will continue to benefit from an investment allowance that allows them to minimise their exposure to the windfall tax; and non-dom status remains, as does the VAT exemption for private schools. All the while, living standards are projected to fall by a whopping 7% over the next two years.
The impact is that real household disposable income will be lower at the end of this Parliament than at the beginning. Yes, we have been through the pandemic and felt the consequences of war in Ukraine, but so have other countries. If this is truly a global phenomenon, how can it be that the UK is consistently outperformed by comparable economies? Could it be that our current economic woes are the result of a series of “economic own goals”, as suggested by Paul Johnson, director of the Institute for Fiscal Studies?
The UK is forecast to have the lowest growth in the G7 over the next two years. The Office for Budget Responsibility estimates average growth of 1.4%, which is well below the 2% average annual rate under the last Labour Government. The UK economy remains below its pre-pandemic level—we are the only G7 nation where that is the case—and is likely to remain so until the end of 2024. Meanwhile, real wages in 2022 are lower than when the Conservatives came to power in 2010. This country has not seen a similar period of wage stagnation since the Crimean War.
It did not have to be like this. Yes, there are issues which need to be addressed, but the British economy is fundamentally strong and should be firing on all cylinders. Many people find themselves asking what we have to show for 12 years of Conservative Party control of our economy. The answer: lots of pain for too little gain. We lag behind other countries on virtually all metrics that matter: current GDP, predicted growth, inflation and so on. The NHS and other vital public services are on their knees, despite the highest tax burden in 70 years. The Autumn Budget has increased that burden further still to plug the black hole opened by Liz Truss and Kwasi Kwarteng. Eleven fiscal rules have been broken in 12 years and the UK’s soaring debt interest payments, caused partly by that reckless mini-Budget, mean the goalposts have been moved. Even then, they may still be missed.
Against this backdrop, can we be surprised by the lack of enthusiasm for the Autumn Statement? There can be little surprise that the British Chambers of Commerce said it was
“unlikely to boost … business confidence.”
The Confederation of British Industry clearly agreed, arguing that
“businesses will think there’s more to be done on growth.”
The Institute of Directors said business leaders were “so dismayed” by the events of September that
“it was good to see joined-up working between the OBR and the Treasury this time round.”
These are hardly the endorsements that the Chancellor would have liked.
The UK needs a serious plan for growth if it is to break free of the doom loop of Conservative mismanagement. The Government have demonstrated that they are out of ideas, but the Labour Party is not. We have a plan for growth which enjoys the support of a growing number of businesses. We will scrap business rates and replace them with a fairer system that is fit for the digital economy. We will ensure brick-and-mortar high-street businesses are no longer at a disadvantage. We will publish a modern industrial strategy to support the sectors of the future. We will work in partnership with business to create jobs and improve skills, reflecting the IoD’s concerns that
“there remains a hole in government policy around how to address adult skills shortages.”
We will fix the gaping holes in the Government’s Brexit deal. That means working collaboratively with the EU to ensure that our businesses can export more abroad, while capitalising on opportunities to do things differently in certain sectors. Our green prosperity plan will create good jobs across the country. We will upskill communities as we accelerate our transition to clean energy and low-emission economic growth.
Most importantly, we will lead rather than react. It was Labour that proposed a windfall tax on energy firms; Labour that called for it to be extended when Mr Sunak’s scheme was first introduced. It was Labour that called for millions of homes to be insulated to improve housing standards and bring energy bills down. The Government finally announced a scheme of their own, but it will not start until 2025. Why are they not supporting plumbers and builders to do it now, as Labour would do? While Conservative MPs fight about onshore wind, Labour is clear that we will make Britain a clean energy superpower by 2030. This would cut families’ household bills and, crucially, boost our energy security.
The Autumn Budget was a chance for the Government to show whose side they are on. Many people up and down the country will have heard the Statement, looked at the detail and concluded: “Not ours.” Yes, the economic situation is tough, and we might not be able to achieve everything as quickly as we would like. However, fairer choices could and should have been made. Through no fault of their own, too many people are facing too difficult a time. This Autumn Statement did little to show that the Government get it or that they are on their side. Only Labour has a plan to end the Conservatives’ doom loop and get our economy firing on all cylinders.
Baroness Penn (Con)
My Lords, I thank all noble Lords for their contributions to this debate. Given the range of expertise that has been contributed today, I will spend my time directly addressing as many noble Lords’ comments as possible.
Many noble Lords reflected on the economic circumstances that we find ourselves in. My noble friend Lord Lamont is correct in his analysis that there is no greater enemy than inflation. He reminded the House, as did the OBR, that the inflation we face is predominantly down to global forces, as my noble friend Lord Flight also noted. High inflation puts pressure on households managing those rising costs and, in turn, dampens growth. We have to be honest with people that we cannot shelter them from all of the effects of this economic storm. In our fiscal policy, we must be careful not to stimulate the economy in a way that makes it more difficult for the Bank of England to reduce inflation, leading to higher interest rates. So we have had to target our fiscal policy carefully.
But it is worth reminding noble Lords of the extent of the support that we are providing. Overall policy decisions since the Spring Statement provide support of £64 billion this year and £40 billion next year, which represents a combination of universal support, through the energy price guarantee, and targeted cost of living payments. In response to the noble Lord, Lord Rogan, the Government are working to ensure that the people of Northern Ireland receive energy bills support scheme support as soon as possible. I reassure him and the people of Northern Ireland that support will reach them this winter.
We have also taken action to uprate pensions and benefits in line with inflation, which I note, in the context of the contribution of the noble Lord, Lord Rooker, was a recommendation from Barnardo’s. We have accepted the Low Pay Commission’s recommendation to increase the national living wage by 9.7%.
Some noble Lords, including the noble Lord, Lord Fox, questioned the profile of the Government’s consolidation plans. But, again, we have had to strike a balance, providing support to households and the economy while inflation is high and growth is low—then, once growth returns, we will increase the pace of consolidation to get debt falling. The OBR delivered its verdict on our plans, saying that the recession will be shallower than it would otherwise have been, jobs will be protected and inflation will come down.
I must also correct the assertions of the noble Lords, Lord Hain and Lord Howarth of Newport, the noble Baroness, Lady Jones, and others that these plans are a return to austerity. In 2010, total departmental spending fell by about 3% a year; in this Parliament, it will rise at 3.6% a year in real terms. This is not just more money for public services; it is also considerably more money than the Benches opposite have committed to.
The noble Lord, Lord Hain, also claimed that the Autumn Statement would open the door to a Labour Government, but I remain slightly at a loss as to what Labour’s economic plans are. The noble Lord opposite made a valiant attempt to set some of them out, but I remain unclear: does it sign up to the need to consolidate our public finances? If it does, does it agree that we have taken a balanced approach between tax and spend? If it does not, what would it do differently?
I also profoundly, and perhaps unsurprisingly, disagree with the Benches opposite on this Government’s economic record. Over the last 12 years, alongside EU exit, the Government have had the third fastest growth in the G7. Since 2010, we have grown faster than France, Germany, Italy or Japan, and we have the lowest unemployment in nearly 50 years.
I will correct one further point from the noble Lord, Lord Razzall, and others, on the London Stock Exchange missing out to Paris. We had a Question on this the other week, where we addressed in quite a lot of detail why that is not the case. I also thank the noble Baroness, Lady Kramer, for reminding us of Labour’s own record on the economy.
Perhaps it is time for a little more consensus, and, in this debate, I heard more consensus on the need to improve productivity. Many noble Lords—including the noble Lord, Lord Eatwell, my noble friend Lord Horam and others—spoke about the need for greater investment in public sources of growth. The Government agree, which is why public spending on capital investment will remain at the record highs set at the 2021 spending review, delivering more than £600 billion of investment over the next five years. I can only ask the noble Lord, Lord Eatwell, why he could not persuade his own party of the need for this in government, with capital budgets next year being more than double those under the previous Labour Government.
Noble Lords also spoke powerfully of the need to improve private sector investment, and many spoke about the need to support R&D. The noble Lords, Lord Fox and Lord Londesborough, among others, expressed concern about the Government’s planned changes to R&D tax credits for SMEs, and many noble Lords spoke about the importance more broadly of R&D, including my noble friend Lady Blackwood. I assure noble Lords that the Government remain unequivocal in their support for R&D, including recommitting to the largest ever R&D spending increase over an SR period. Our aim is to ensure that the spending is as effective as possible and to do more to work towards a simplified, single R&D tax credit for all.
The noble Lord, Lord Londesborough, asked whether the Government have considered the impact on productivity of the changes that we are proposing. From my experience looking at the R&D tax credit, the officials working on this think of almost nothing other than how we can make the R&D tax credit system the most effective it can be. We must recognise that the SME scheme has become a target for fraud. That is not to say that noble Lords did not make important points on the need to support research-intensive SMEs in particular. Ahead of the Budget, the Government will work with industry to understand whether further support is necessary for R&D-intensive SMEs without significant changes to the overall costs of the scheme. Over the SR period, we also increasing funding for Innovate UK by 50%, and 70% of Innovate UK’s grants benefit small and medium-sized enterprises.
Also on investment, the noble Lord, Lord Bilimoria, asked about doing more regarding small modular reactors. I agree with him that, for Britain to achieve energy security, a pipeline of new nuclear is needed, alongside the large-scale project that we have committed to in Sizewell C. Today, the Government have confirmed their commitment to set up Great British Nuclear, an arm’s-length body which will develop a resilient pipeline for new builds beyond just Sizewell C.
On energy more broadly, many noble Lords, including the formidable noble Baronesses, Lady Hayman and Lady Jones of Moulsecoomb, raised questions about our approach to energy and climate change. I reassure noble Lords that the Government remain fully committed to reaching net zero by 2050, and to seizing the opportunities for growth through that transition.
On specific questions around the energy profits levy, several noble Lords, including the noble Lord, Lord Sikka, expressed concern about the design of the levy and the investment incentives in it. The Government have always been clear that the tax regime is intended to strike a balance between ensuring a fair tax return for the UK from its resources and continuing to encourage investment in the North Sea, supporting jobs and our energy security. I reassure the noble Lord that the Autumn Statement sets out that the Government expect to raise £41.6 billion from the EPL between 2022-23 and 2027-28, in addition to the £39 billion paid through existing taxes, ensuring that oil and gas companies pay their fair share.
The UK will also receive tax revenues from the investments made under the investment allowance, as and when they generate a profit. Given that these companies are mostly the same ones that are innovating and producing renewable energies, their investments will bring wider economic benefits through jobs, a secure supply chain and more progress towards net zero. Conversely, my noble friend Lord Leigh of Hurley voiced concerns about the impact of the EPL on independent UK companies and suggested that we use an approach more akin to the one that we have taken with electricity generators. His concerns are precisely why we have included such a generous investment allowance, which demonstrates our commitment to encouraging investment in the North Sea to strengthen the UK’s vital offshore oil and gas sector, putting more UK gas on the grid for longer and bolstering our energy security.
The noble Baroness, Lady Hayman, was also concerned about investment incentives for renewables under the electricity generators levy. The EGL is charged on a different basis from the energy profits levy and at a lower combined rate; the EPL is applied to total profits, whereas the EGL applies to only extraordinary returns above a given level. I reassure noble Lords that the electricity generators levy is designed in a way that maintains incentives for investment and preserves the effect of existing government support. Renewable generators will be able to deduct investment costs from their corporation tax.
Lord Eatwell (Lab)
I know that the Minister would not want to mislead the House, so I was very surprised by her figures on government investment. I looked up the OBR figures and, as a share of GDP, public sector net investment is now half what it was in the last year of the Labour Government.
Baroness Penn (Con)
My Lords, the statistics that I gave referred to overall levels of investment, not expressed as a percentage of GDP. I stand by the figures that I gave to the House.
Lord Hain (Lab)
I am very grateful to the Minister, but can I ask her to correct her statement about the last Labour Government’s record? We had 10 years of consistent economic growth, never surpassed in Britain’s economic history, with low inflation, high employment and massive investment in public services, prior to the global banking crisis, for which we were culpable only to the extent that every Government in the world were culpable. Surely, she should correct what she has said in argument to me.
Baroness Penn (Con)
I am not sure exactly which bit of what I said the noble Lord wants me to correct. I stated the Government’s record on economic growth since 2010, and I simply referred to the comments of the noble Baroness, Lady Kramer, on the recession that was also experienced under the previous Labour Government.
I return to the subject of energy. The noble Baroness, Lady Hayman, asked about energy efficiency. Warmer homes and buildings are key to reducing bills, creating jobs along the way and meeting our targets on climate change. That is why we are committed to driving improvements in energy efficiency, with a new ambition to reduce the UK’s final energy consumption from buildings and industry by 15% by 2030. A new ECO+ installation scheme was announced earlier this week.
I disagree with the analysis that this is jam tomorrow; we have £6 billion of new government capital funding that will be made available from 2025 to2028, but that is in addition to the £6.6 billion allocated in this Parliament. The aim of that kind of longer-term projection of funding is to create consistency and allow businesses and the supply chain to build up and plan for the future, which can be something that we struggle with in the provision of energy efficiency measures. We are also launching the energy efficiency task force and expanding our public awareness campaign to help reduce bills for households and protect vulnerable people over the winter and beyond.
In response to my noble friend Lord Leigh of Hurley, on other tax measures and the taxation of US groups trading in the UK, the UK has long been committed to tackling base erosion and profit-shifting, which is why we introduced the diverted profits tax in 2015 and the corporation interest restriction rules in 2017. I am glad that he welcomed progress on Pillar 2, which we will legislate for in the spring 2023 Finance Bill, but I agree with him that we need to make further progress on Pillar 1. That is why we continue to work internationally on finalising Pillar 1, so that the corresponding multilateral convention can be ready for signature in the first half of 2023, allowing for implementation in 2024.
Other noble Lords noted some strange political alliances that seemingly might have formed in the course of this debate. The noble Lords, Lord Sikka and Lord Howarth of Newport, but also my noble friends Lord Bridges and Lady Noakes raised concerns around the Government’s decision to freeze the personal allowance and other tax thresholds. I say to noble Lords that despite the need to increase taxes—I fully acknowledge that freezing thresholds is a tax increase, I am not trying to hide it in any way—given that the personal allowance nearly doubled across the last decade, it will still be £2,150 higher by April 2028 than it would have been had it been uprated by inflation each year since 2010. The noble Lord, Lord Sikka, also asked about the distributional impacts of tax. I cannot answer his specific point, but on average it is households in the poorest income deciles that are gaining the most next year as a result of decisions taken in the Autumn Statement.
I take seriously the concerns expressed by my noble friends Lady Noakes and Lord Bridges. The Government have had to take difficult decisions and we are being honest about that. We want a low-tax economy, but first must come economic stability, and we need everyone to contribute a little towards sustainable public finances. I know it will be little comfort to them to be reminded that the UK tax system remains competitive, with the tax-to-GDP ratio meaning that we are still in the middle of the pack within the G7 and lower than such countries as France, Germany and Italy. As I say, the Government take their challenge on growth seriously and we have taken some tax decisions to prioritise this; for example, keeping the annual investment allowance level that was set in the growth plan permanently at £1 million, rather than reverting to £200,000 from 1 April 2023.
My noble friend Lord Bridges rightly identified a greater range of actions that we must take to set the conditions of growth beyond tax policy. A key area and opportunity post Brexit is regulation, and I hope he will welcome the action on Solvency II that we have announced and the measures in the forthcoming Financial Services Bill, which we will seek to replicate across other growth sectors across the UK economy, such as life sciences, as spoken about passionately by my noble friend Lady Blackwood. Many noble Lords, including the noble Lord, Lord Shipley, and my noble friend Lord Tugendhat, raised the issue of housing. The noble Lord, Lord Shipley, spoke about the need to build more houses for social rent: that is exactly what the Government are doing, through such measures as removing the cap on councils borrowing against their housing revenue account. I reassure him also that we are still committed to ending no-fault evictions.
My noble friend Lady Cumberlege asked about our commitment to community pharmacists and the issue of funding there. The plan for patients set out the further expanded role of pharmacies agreed in the community pharmacy contractual framework for the next two years, as well as an additional £100 million investment to recognise the pressures facing the sector. The Government have also committed to look further by enabling pharmacists with more prescribing powers and making more simple diagnostic tests available in community pharmacies.
In response to the noble Lord, Lord Rogan, I welcome the 25th anniversary of the Belfast agreement and I am extremely pleased that we confirmed in the Autumn Statement that we are funding the planned trade and investment event in Northern Ireland. DIT will work with local partners as this is taken forward, including with Invest NI.
The noble Lord, Lord Bilimoria, asked about defence spending. As I said in my opening speech, we recognise the need to increase defence spending, but before we make announcements on that, we need to refresh the integrated review, which was drafted before Russia’s invasion of Ukraine.
The right reverend Prelate the Bishop of Gloucester referred to the benefit of women’s programmes for preventing female offending and the savings to the Ministry of Justice as a result. In September, the Ministry of Justice announced that almost £21 million will be invested in women’s services to tackle the causes of female offending and cut crime.
The noble Lord, Lord Livingston of Parkhead, asked an interesting question about the difference between the Bank of England and OBR forecasts. Given the number of recent changes in fiscal policy and the volatility in financial and energy markets, the range of external forecasts is wide. Differences will partly reflect when each forecast was produced and the differences in assumptions about government policy, interest rates and energy prices, but I take his wider point.
I congratulate my noble friend Lady Lea on her excellent maiden speech. I know she brings a wealth of economic experience, not least from her own time working in the Treasury. I look forward to working with her in the future.
We have faced two enormous shocks in the last three years. The pandemic has caused supply chain disruption, slowed growth and increased debt levels, and Putin’s war in Ukraine has caused energy prices to spike. This has added up to inflation at levels not seen in a generation, hitting the pockets of families across the country. That is why tackling inflation is our priority. It makes everyone worse off, especially the most vulnerable, so we have taken difficult decisions that will mean taxes go up and spending will not rise by as much as previously planned. When we take into account the need to invest more in areas such as our NHS, it means hard choices to be made elsewhere.
However, I remind noble Lords that we fight these economic challenges from a position of relative strength. Unemployment is close to the lowest level it has been in nearly 50 years, and the UK is forecast to have had the fastest growth in the G7 in 2022. We also have incredible strengths within our country that aid our mission: our teachers, our NHS workforce, our armed services, and everyone who works in our public sector—day in, day out—to deliver the services upon which we rely.
We are inventive and resourceful, and the innovative, intuitive and ambitious people who make up our private sector will drive our growth. Combine this with the decisions taken over the last 12 years and the results are clear to see: employment is up by millions compared to 2010; we have had the third highest real GDP growth rate in the G7 since 2010; renewable energy production is growing faster than in any other large country in Europe since 2010; thousands more children are in good and outstanding schools compared to 2010; and we have record numbers of doctors in the NHS. Now, because of the difficult decisions we take in our plan, we are strengthening our public finances, bearing down on inflation and supporting jobs—all while protecting public services.
The Autumn Statement is a plan that provides stability. It is a plan for growth and a plan for public services. I beg to move.
Lord Skidelsky (CB)
Before the noble Baroness sits down, could I ask a question, please?
Baroness Jones of Moulsecoomb (GP)
Excuse me, but before the noble Baroness sits down, she did not answer my questions, unless I fell asleep, which is quite possible because it is past my bedtime. I asked two specific questions about NHS funding and hospitals.
Baroness Penn (Con)
There were many questions that noble Lords asked that I did not get to in the time available. Maybe I should write to all those who have participated in this debate to make sure that I address all the points raised but do not detain noble Lords any further.
Lord Skidelsky (CB)
Could the Minister explain how fiscal consolidation, particularly cutting public spending, promotes growth?
Baroness Penn (Con)
My Lords, there is probably a longer conversation to be had, but I did set out how the profile that we have taken in our approach to consolidation supports growth at this time but also gets our public finances on to a sustainable footing. I am now sitting down; I will take no further interventions.