Grand Committee
Energy Bill [HL]
Monday 19th December 2022
(2 years ago)
Grand CommitteeRead Full debate Energy Act 2023 View all Energy Act 2023 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 39-V Fifth marshalled list for Grand Committee - (15 Dec 2022)
The Deputy Chairman of Committees (Lord Haskel) (Lab)
My Lords, if there is a Division in the Chamber while we are sitting, the Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.
Clause 165: Relevant heat network
Amendment 161AA
Lord Callanan
Member's explanatory statement
This amendment amends the definition of “heat network” to include any appliance connected to a heat network where the main purpose of that appliance is to provide heating or cooling for the network.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, the Committee will note the large number of amendments tabled in my name on heat networks. These amendments are needed to ensure that Ofgem can operate effectively as the heat networks regulator. A large proportion of them ensure that Ofgem’s enforcement powers will replicate those that it has as gas and electricity regulator. These amendments also ensure that the Bill reflects the approach to regulation which the Government committed to in their response to the heat networks market framework public consultation. The majority of these amendments are minor and technical in nature. Some are a little more substantial, and I will address those first.
Amendments 162C and 162YYI will ensure that any price cap introduced through regulations in future can apply to non-domestic as well as domestic heat network consumers. They also widen the scope of the regulator’s power to conduct pricing investigations into instances where non-domestic heat network consumers are receiving disproportionately high prices.
The Government are committed to introducing consumer protection rules that ensure that heat network consumers receive a fair price for their heating. Regulations under the Bill will provide Ofgem with powers to investigate and intervene where consumer prices appear disproportionate, compared with heat networks with similar characteristics or compared with alternative and comparable heating systems.
Non-domestic heat network consumers, particularly micro-businesses, can be vulnerable to receiving disproportionately high prices from heat suppliers. We therefore consider it appropriate to make this amendment so that the regulator’s price investigation powers extend to non-domestic consumers, in addition to domestic consumers. The Bill also provides the Secretary of State with powers to introduce various forms of price regulation, including a price cap, should it be necessary to protect consumers while growing and decarbonising the market.
The Government have committed to using any future powers to set price caps cautiously to avoid undermining investment in this nascent sector and putting at risk the supply of heating to consumers. Should a price cap be appropriate in future, we want to ensure that it could apply to both domestic and non-domestic consumers. In particular, we found in our public consultation in 2020 that micro-businesses supplied by heat networks share similar characteristics with domestic consumers. We therefore consider that these two consumer groups should have similar protections. This amendment would enable any future price cap to also apply to non-domestic consumers such as micro-businesses.
Amendments 162YYV to 162YYY serve to ensure that the full extent of heat network regulatory activities performed by Ofgem in Great Britain, the Utility Regulator in Northern Ireland, consumer advocacy bodies and other entities are funded by heat networks and holders of gas or electricity licences. Last year, the Government ran a public consultation on a mechanism for recovering the costs of heat network regulation. The nascent state of the sector and small consumer base means that recovering these costs solely from heat networks would amount to an extra £10 or more on each heat network consumer bill per year. This would be too high and create risks to the competitiveness of the market and, of course, issues of affordability for heat network consumers.
The Government consulted on heat network, gas and electricity regulatory costs being spread evenly across heat network, gas and electricity consumers in Great Britain. The Government have estimated that this approach would amount to less than £2 added to each heat network consumer bill per year, and an additional 10p per gas and electricity consumer bill per year. Most consultation respondents agreed that this approach was the fairest and crucial to supporting the growth of the heat networks sector. The Northern Ireland Executive conducted an equivalent public consultation for cost recovery in Northern Ireland and determined this a desirable approach.
This amendment sets out for transparency purposes the full extent of the regulatory activities in scope of this approach to cost recovery. The amendment also includes Ofgem’s role as a licensing authority under the Heat Networks (Scotland) Act 2021 in the cost-recovery regime. The Scottish Government passed this Act to introduce their own heat networks regulatory framework. By ensuring a funding route for Ofgem to perform this role, the Government are helping to ensure that Scottish heat network consumers receive robust protections and that heat networks regulation is coherent across Great Britain.
The remaining amendments are minor and technical, so I will not detain your Lordships for too long with them. In summary, these amendments, first, ensure that the provisions relating to heat networks regulation are accurate; secondly, allow for regulations and authorisation conditions to be made about the connection of premises to a heat network; and, thirdly, relate to Ofgem and the Utility Regulator in their role as heat networks regulator in Great Britain and Northern Ireland respectively.
I hope, therefore, that noble Lords will agree that these amendments are necessary to enable a fair and consistent heat network market across the United Kingdom. The one non-government amendment in this group is in the name of the noble Baroness, Lady Worthington. I thank her for her thoughtful contributions—actually, I should do that at the end, after she has spoken. Oh, she is not here. I beg to move Amendment 161AA.
Lord Ravensdale (CB)
My Lords, first, I declare my interests as a project director working in the energy industry for Atkins and as a director of Peers for the Planet. I will speak to Amendment 162 in the name of the noble Baroness, Lady Worthington, who cannot be here today.
To give some context to this amendment, I welcome paragraph 14(3) of Schedule 15, in that it provides for all the conditions which may be attached to a heat network authorisation. All of this is welcome—in particular, paragraph 14(3)(f) refers to
“conditions about limiting emissions of targeted greenhouse gases in relation to relevant heat networks”.
However, it is noteworthy that the schedule does not include any conditions about the actual heat source for the emissions, and that is what Amendment 162 focuses on. It is a probing amendment, seeking to determine whether the Secretary of State or Ofgem already have the power to control the heat source using the heat networks and whether they are minded to use them.
There are some fuels which it may be in the public interest to restrict using in a heat network. For example, the UK Government are currently establishing carefully controlled trials for hydrogen for heating. Presumably, the Government would not want to be powerless to prevent a heat network provider using green hydrogen for heating if they had concerns about, for example, safety or the cost effectiveness of hydrogen as a power source. If the hydrogen trials are not taken forward, the Government may not want someone to use hydrogen in a heat network without effective oversight from Ofgem.
In another example, it may be appropriate to restrict the use of biomass, which is ostensibly low or zero-carbon. However, the Minister will have heard concerns from the noble Baroness, Lady Boycott, and other Peers last week, and there are concerns about whether the Government would have the powers to restrict biomass for local heat networks to the sustainable practices the Minister outlined in his response to that question. Can the Minister confirm in his summing up whether the Government have powers to restrict the source of heat input as applied to heat networks? If so, where? If not, would he consider taking these powers?
Baroness Bennett of Manor Castle (GP)
My Lords, I shall speak chiefly to Amendment 162. tabled by the noble Baroness, Lady Worthington, although I take the opportunity to welcome the government amendment on help for micro-businesses and say that it is great to see that happening. The noble Lord, Lord Ravensdale, has already introduced this very clearly; I shall make just one additional point and apologise to the Committee for my absence last week when a number of amendments that I had either tabled or supported were debated. I was in the Chamber with the genetic technology so-called precision breeding Bill. If we have two environment Bills running in exact parallel, it creates some difficulties. I particularly want to thank the noble Baroness, Lady Worthington, for some excellent support for some of my amendments last week.
On Amendment 162, I want to make the point that it is crucial here that we are talking about local networks; what may be appropriate in one place may be inappropriate in another. I am thinking, for example, of areas where air pollution is an issue and the kind of fuel used will be a particular issue in that area. It may, indeed, be appropriate for the regulator to take action on the basis of local conditions as well as of national polities, in terms of either the nature crisis or the climate emergency.
Lord Whitty (Lab)
My Lords, noble Lords may have noticed that I extracted my amendments to the second group, when they were originally suggested to be tabled in this group. They relate to the protection of consumers.
I am grateful that the Minister emphasised protection, for both domestic and non-domestic consumers, of the commitments to district heating, decentralised energy and community energy. I am strongly in favour of that move, but I do not think the Bill, as first drafted, or as I read the amendments proposed in the Minister’s group, entirely meet the need to protect consumers of district heating et cetera to the same extent that consumers of other suppliers are protected. I was gratified by some of the Minister’s words this afternoon, but I still do not feel that this combination of what is in the Bill and the Minister’s own amendments will deliver for consumers of district heating the protections, that have been absent for so long, which are supplied via Ofgem to consumers of other forms of electricity supply. I think it will need a bit of tweaking and I shall come to that in the following group.
I do, however, want to register my appreciation for the role of decentralised energy being recognised here. We have some tidying up to do, but I welcome the Government’s commitment to extend support both for consumers in this sector and for the sector itself.
Lord Lucas (Con)
My Lords, I wonder whether rounds one to three of the green heat network fund are throwing some light on the potential for expansion in this sector. Are the Government viewing heat networks as something that we will see a lot of, or just little bits and pieces? Coming back to the amendment spoken to by the noble Lord, Lord Ravensdale, if we are going to see a lot, are we seeing green heat sources coming into play in this area? If we are to see a lot of networks, and since the ones I am familiar with, at least, require serious street works, is there a possibility of combining those street works with separating sewage from storm water?
Lord Teverson (LD)
My Lords, I want to reflect the comments of the noble Lord, Lord Whitty, in welcoming the fact that the Government really are concentrating on this area and giving it the attention that they have. We are one of the lackeys on heat networks, certainly in comparison with the rest of Europe.
One thing that struck me, though, was that on the occasions when I meet the Minister before a Bill goes through, he normally asks me to keep the number of Liberal Democrat amendments to a minimum. I think he has broken the record on this occasion, but I will keep my side of the bargain.
Lord Lennie (Lab)
My Lords, I thank the Minister and others who have spoken in this brief debate for bringing forward these amendments, as they represent necessary but foreseeable conditions for what is already a doorstep of a Bill. As the Minister said in his introductory statement, these amendments collectively show why and how heat networks and heat zones will be regulated and established.
In response to the noble Lord’s query, my understanding is that there are currently 14,000 heat networks, which represent 480,000 customers—about 2% of the total energy network. However, that percentage is predicted to rise to just under 20% by 2050. They will be a huge and significant part of the future energy market, and thus crucial in meeting net zero as they can unlock otherwise unobtainable and inaccessible large-scale renewable and recovered heat sources, such as waste heat. They are especially important for built-up areas, as they are the most effective way of accessing waste heat from industry and heat from rivers and mines.
There are currently no specific protections for customers of heat networks. A recent Competition and Markets Authority report said that while the majority of heat networks customers received a service comparable to that for other traditional customers, a significant minority did not. Higher prices and more frequent outages were just a couple of the highlighted issues. The CMA recommended regulating the sector, with Ofgem announced as the regulator and Citizens Advice and the energy ombudsman named as alternative dispute resolution bodies.
I have some questions for the Minister. First, on non-domestic customers, what steps do the Government envisage will be taken to draw the line between which of them will receive these protections and which will not? Secondly, while protecting these provisions, why have they come to us so late and to what extent were Scottish heat network customers not receiving equivalent protections under the initial drafting of the Bill? Finally, does this come into play only in a case where the powers in Clause 171 to designate GEMA as the licensing authority in Scotland are used?
Lord Callanan (Con)
I thank all noble Lords for their contributions to this brief debate. I acknowledge the point made by the noble Lord, Lord Teverson: it will be difficult for me to ask him in future to limit the number of Liberal Democrat amendments after tabling all these. I quite take his point there; all I will say is that I flagged up to noble Lords at Second Reading that these amendments would be coming forward. There will be more on other subjects, as I also flagged up at Second Reading, which are still being drafted and will be tabled as soon as possible.
I first remind noble Lords, in acknowledging the point made by my noble friend Lord Lucas, that heat networks will play a crucial role in the UK reaching its net-zero targets, as they are one of the most cost-effective ways of decarbonising heating, particularly in built-up areas, where it would be more difficult to have individual property solutions. Noble Lords will probably be aware that the Climate Change Committee estimated that around 18% of UK heat will potentially come from heat networks by 2050—up from around 2% currently—to support the cost-effective delivery of our carbon targets. However, the sector is currently unregulated.
The Bill will provide regulation for that sector and give Ministers a power to introduce, among other things, consumer protection rules and carbon emission limits on heat networks. The majority of heat networks are performing perfectly well and often run by local authorities, housing associations and others, but one or two small, private networks are abusing their customers. Of course, once you are connected to it, that is effectively a monopoly. You have no choice but to take your business elsewhere, so regulation is required in the sector.
I will now talk to Amendment 162. The Bill already allows the Government to control heating sources by providing for authorisation conditions to contain emissions limits; this is contained in paragraph 14(3)(f) of Schedule 15. By gradually lowering emissions limits, authorisation conditions will drive changes in the types of fuels and technologies used to power various heat networks.
Using emission limits allows for dynamic, ongoing regulation. I submit that mandating specific heat sources is a more limited approach that risks the Government and this House picking winners. The exact approach for implementing emission limits will of course be subject to further consultation with industry and stakeholders. Settling on a pathway ahead of that consultation would, at this stage, be unwise.
Removing whole fuel types risks ignoring other factors that will come into play, such as technological improvements, system efficiencies, varying fuel costs, the replacement cycle of generation assets, and the need for flexibility in a system to provide separately for back-up or peak demand.
The Government are of course committed to net zero by 2050, and we see heat networks playing a vital role in this. The Government wish for the Bill and its secondary legislation to ensure that the heat network sector thrives and expands and is not held back in this goal. Therefore, I hope that the noble Lord, on behalf of the noble Baroness, Lady Worthington, will feel able not to press the amendment.
Lord Lucas (Con)
My Lords, I am delighted that my noble friend is so optimistic and shares the Climate Change Committee’s optimism about the future of heat networks. Will he therefore encourage his colleagues to support deep geothermal which, if we are to need that volume of energy, must be a serious contender as it is on the continent. However, in this country, since we have not had the exploration, there is a lot of uncertainty about whether the particular strata will behave in a way that allows heat extraction. It would be a real help to that industry if the Government were to take an interest in how to reduce that first well risk, so that we can get going in the way that the Netherlands and Germany have to take advantage of the deep heat that we all believe—or the British Geological Survey at least believes—is down there and available.
Similarly, is my noble friend content that the regulations governing tidal rivers—such as the one just outside—are such that we can use those as a source of heat for heat networks?
Lord Callanan (Con)
My noble friend makes some good points. There is tremendous potential from deep geothermal, and we are funding some exploratory projects. However, the performance is mixed: some projects have drilled and not found any rocks hot enough to power the network. What is perhaps more viable, particularly in mining areas, is the use of waste mine water for powering heat networks. There are a number of exciting schemes that I have visited, particularly in the north-east of England, where they can extract the warm water from existing mine workings, put it through heat exchangers and use it for heat networks. There are a lot of promising developments in this area.
I will get a more detailed answer for my noble friend on his question about tidal waters, but I know that there are some concerns in the industry about over-regulation from the Environment Agency in some of these areas—they have been flagged up to me. I wrote to Defra about a year ago on this subject but, to be honest, I cannot remember what reply I got—if any—at the time. I will write to him on that subject.
Lord Callanan
Member's explanatory statement
This amendment (together with the amendment in the name of Lord Callanan at page 139, line 35) widens the provision made by Clause 165(3) about the treatment of heat pumps so that it applies in relation to communal heat networks (as well as district heat networks).
Member's explanatory statement
This amendment is consequential on the amendment in the name of Lord Callanan at page 139, line 34.
Lord Whitty
“(3A) The central role of the Regulator in relation to heat networks is to ensure that customers of heat networks have at least equivalent consumer protection to customers of other forms of energy.(3B) The Regulator must have regard to the need for ensuring regulations are supportive of, and compatible with, the United Kingdom’s climate change commitments.”
Lord Whitty (Lab)
My Lords, I cannot hope to compete with the Minister, who took six minutes to speak to about 40 amendments, which I think is a record even for this Committee Room. I took out my amendments from the previous group, as I mentioned, because the combination of the Bill at present and the amendments to which the Minister and I just referred does not clearly put the consumer of heat networks on the same basis as the consumer of other forms of energy supply.
I confess that, for part of my career 10 or 12 years ago, I was a little schizophrenic about this, because I was both the honorary president of the CHP Association, which is the predecessor of the Association for Decentralised Energy, and the chair of the statutory energy consumers protection body, which was the National Consumer Council and then Consumer Focus, until the coalition Government unfortunately abolished it. I was both a champion for consumers and for this technology, and I still am. The problem is that the consumers of this technology, the households and commercial or industrial elements that depend on district heating and other forms of heat network, are the least protected of all consumers. While I agree with the amendments the Minister spoke to just now—they are a significant improvement—I do not yet feel that the new wording makes that clear.
My Amendments 161B and 161C propose to put in the Bill, eventually in the Act and the Schedule associated with it, a clear and unequivocal commitment that the regulator’s main and central role will be to ensure that consumers of energy supplied through heat networks have the same rights, protections and regulatory authority as other consumers. If you put that centrally, the role of regulation will be clear. I was gratified when the Government committed to extending regulation in this area and, by and large, I was in favour of the consultative document they put forward. I was slightly more equivocal about giving Ofgem the job, but it is logical that it should be done by Ofgem. My equivocation on that issue was that Ofgem’s record in protecting consumers over the last two or three years has not been that great. Nevertheless, I accept that Ofgem should undertake this role.
The situation at present is that the majority of customers of heat networks are in social housing run by local authorities or organisations subcontracted by local authorities. While there are a lot of private heat networks and some commercial heat networks, the majority are in that category. The consumers are therefore tenants and leaseholders of local authorities on what were once local authority estates. Therefore, they are probably among the lower incomes and have a higher proportion of vulnerable consumers.
This makes it doubly worrying that, for years, there has been no equivalent protection for those who receive their energy from the big six or big eight—whatever it is now—energy suppliers. My amendments are intended to make clear that the main role of the regulator is to protect those consumers. They relate in part to the amendments moved by the Minister relating to the price cap, but they are not just about the price cap. They are also about the price support schemes and the whole range of requirements placed on energy supply companies in relation to customer service for consumers, recognition of the problems of vulnerable consumers in particular and the need to ensure that supplies are continuous for such consumers.
Baroness Blake of Leeds (Lab)
My Lords, I rise to address the amendments in this group. My noble friend Lord Whitty outlined clearly the reasons for his amendments. I will speak to Amendment 161CA in my name and that of my noble friend Lord Lennie. At this stage, it is appropriate for me to declare my interest as a vice-president of the Local Government Association because it comes up in subsequent groups.
I want to refer to my experience when I was the leader of Leeds Council. Leeds PIPES is one of the most successful district heating schemes in the country and is expanding. It aims to take more than 16,000 tonnes of carbon out per year. It is already securing reductions in fuel bills of between 10% and 25%. The other element, which we have not addressed, is that, by working locally through these schemes, we have been able to bring training and employment to the local community. Indeed, 60% of the project spend is by local businesses in the community, making it a win-win scenario.
Social housing and council housing are not the only beneficiaries of the schemes, although they are an important aspect as there are more than 2,000 such homes already on the system. The system has started to be installed and expanded into the city centre, including in council buildings, ensuring that it is a sustainable project. I look forward with interest to the Minister’s response to the specific concerns raised by my noble friend Lord Whitty about consumer protection. The third amendment in his name, on the contribution to net zero, is valuable; it highlights how these networks need to be taken seriously. We need to make sure that they are sustainable and that their future is secure on behalf of the consumers that they supply.
Amendment 161CA in my name and that of my noble friend Lord Lennie refers specifically to ensuring
“that regulation covers systems that are operational but are operating inefficiently to the detriment of customers.”
As one of the heat network providers, Switch2, explains, a 2018 study by the CMA found that,
“although heat networks provide customers with a cost effective, efficient supply of heat compared to alternatives, some customers experience poorer outcomes in terms of price and service.”
That provider has contributed to the thinking on why heat network efficiency is so important. It says:
“The efficiency of your heat network is the crux of effective operation. Before the energy crisis and regulatory requirements, heat network efficiency was often seen by operators as a ‘nice to have’, rather than a necessity, despite significant cost saving benefits to both residents and operators.”
I think we have moved forward a great deal on that consideration.
Although we are focused on the incredibly high cost of gas at the moment, I hope that we can do everything in our power to improve efficiency and take this issue forward. It is clear that the Government are aware of this issue and are acting on it to a degree. Would it not be sensible to ensure that the regulatory remit also covers inefficiencies and that consumers are protected from the issue, rather than just requiring operators to apply for grants voluntarily?
Lord Callanan (Con)
I thank the noble Lord, Lord Whitty, and the noble Baroness, Lady Blake, for their comments and amendments. As I said on the previous group, the Government are committed to introducing protections for heat network consumers that ensure that they receive a fair price and a reliable supply of heat, and are not disadvantaged compared to other consumers. Ensuring that heat network consumers receive comparable protections to gas and electricity consumers is the primary reason for agreeing to the CMA’s recommendation to regulate heat networks.
We also recognise the vital contribution that heat networks will ultimately make in decarbonising heat in buildings. I highlight to the noble Lord that the Bill already provides for the heat networks regulator to prioritise protection of consumers and the decarbonisation of the sector. The Bill provides for Ofgem to be the heat networks regulator in Great Britain, with the Utility Regulator taking on the equivalent role in Northern Ireland.
Schedule 15 to the Bill provides for regulations making provision about the objectives of the regulator. This includes its principal objective to protect the interests of existing and future heat network consumers. This is equivalent to Ofgem’s principal objectives to protect the interests of existing and future gas and electricity consumers. We intend for this principal objective to be set out in the regulations.
Schedule 15 also provides for regulations specifying the interests of existing and future heat network consumers that are to be protected. This includes consumers’ interests in the reduction of greenhouse gas emissions generated by heat networks. Schedule 15 also provides for the introduction of carbon emissions limits on heat networks in England and Northern Ireland. We intend again for this to be provided for in the regulations.
The regulations will also give Ofgem powers to investigate and intervene on networks where prices for consumers appear to be disproportionate compared to systems with similar characteristics or if prices are significantly higher than those consumers would expect to pay if they were served by an alternative, comparable heating system. Ofgem will also be able to set rules and guidance on how heat networks recover their costs through their heat tariffs.
Amendment 161CA tabled by the noble Lord, Lord Lennie, and the noble Baroness, Lady Blake, is on ensuring the efficiency of existing heat networks. I thank them for highlighting the importance of ensuring that regulation facilitates the improvement of technical standards on heat networks. This will ensure efficient heat networks that provide fair prices and reliable heat to consumers at the same time.
I reassure noble Lords that the Bill, more specifically paragraph 14(3)(d) of Schedule 15, already provides measures for ensuring heat network efficiency. Schedule 15 provides for the introduction of technical standards, which will protect consumers from being supplied by inefficient networks. The regulator’s compliance activity in relation to new and existing heat networks will include work on any standards mandated in authorisation conditions under this power.
I therefore submit that the intentions behind the noble Lords’ amendments are already provided for in the Bill, so I hope that they do not press them.
Lord Whitty (Lab)
My Lords, I thank the Minister for that reply. I will clearly want to look at these clauses and the Schedule once all these amendments have been agreed and adopted. I am still not absolutely convinced that all aspects of consumer protection will be covered by this and by Ofgem’s role, but I welcome the Minister’s reassurance.
The key issue is whether all interventions will treat the consumers of district or decentralised heating the same as they would consumers of other forms of energy supply. That also applies to the Government. The Minister referred to the price cap, but the price subsidies or support that we agreed the other week has not found its way to consumers of district heating. That may be a matter of time or it may be that the entity that supplies the heat is obliged to pass that on, but that is not clear at the moment. Things like that need to be tightened up before the final version of the Bill is agreed. I therefore look forward to seeing what the clauses look like following the Minister’s amendments to see whether any further amendments are needed to meet my concerns in this respect. In the meantime, I withdraw my amendment.
Lord Callanan
“(2A) The provision made in Schedule 15 is without prejudice to the generality of subsection (1).”Member’s explanatory statement
This amendment makes it clear that the breadth of the power under Clause 168 is not affected by the detailed provisions made by Schedule 15.
Lord Callanan
Member’s explanatory statement
This amendment omits a definition that is no longer needed as a consequence of the amendments in the name of Lord Callanan at page 292, line 6 and at page 303, line 35.
““enforcement undertaking” has the meaning given by paragraph 39(2);”Member’s explanatory statement
This amendment inserts a definition signposting the definition of “enforcement undertaking” in paragraph 39 of Schedule 15.
““relevant requirement” has the meaning given by paragraph 38;”Member's explanatory statement
This amendment inserts a definition signposting the definition of “relevant requirement” in paragraph 38 of Schedule 15.
Lord Teverson (LD)
Is there a way in which we can just say yes to the government amendments here? There are hundreds of them—well, about 50—so it would make a lot of sense.
The Deputy Chairman of Committees (Lord Haskel) (Lab)
I am applying the usual convention. Okay?
Lord Callanan
Member’s explanatory statement
This amendment limits any requirement on a Regulator of heat networks to keep under review the carrying on of activities connected with heat networks to those activities carried on in the part or parts of the United Kingdom for which that Regulator is responsible.
Member’s explanatory statement
This amendment (together with the amendment in the name of Lord Callanan at page 290, line 33) enables regulations made under Clause 168 to provide for the Regulator to specify information that must be provided by an applicant for a heat network authorisation.
Member’s explanatory statement
See the explanatory statement for the amendment in the name of Lord Callanan at page 290, line 32.
“(2A) The regulations may, in particular, provide for conditions to be included in a heat network authorisation requiring the person who holds the authorisation—(a) to comply with the provisions of a particular designated document;(b) to enter into governance arrangements with the person who is from time to time the licensed code manager for that designated document and to comply with those arrangements;(c) to provide funding for the person who is from time to time the licensed code manager for that designated document.”Member’s explanatory statement
This amendment enables regulations to provide for conditions to be included in heat network authorisations requiring their holders to comply with designated documents for purposes not limited to those concerning technical standards.
“(za) conditions about the terms on which premises are connected to a relevant heat network (whether for the purpose of supplying heating, cooling or hot water to premises, or supplying thermal energy to a relevant heat network);”Member’s explanatory statement
This amendment enables heat network authorisations to include conditions about the terms on which premises are connected to a relevant heat network, whether a connection is for the purpose of supplying heating, cooling or hot water to premises, or for the purpose of supplying thermal energy to a relevant heat network.
Lord Callanan
Member’s explanatory statement
This amendment ensures consistency with the reference to costs in the amendments in the name of Lord Callanan to Clause 170.
Member’s explanatory statement
This amendment clarifies the drafting of a reference to the sorts of condition that regulations may provide may be included in heat network authorisations.
Member’s explanatory statement
This amendment enables regulations to provide for a price cap in relation to the charges imposed on any heat network consumer, whether domestic or not.
Member’s explanatory statement
This amendment clarifies the drafting of a reference to the sorts of condition that regulations may provide may be included in heat network authorisations.
“(6) The regulations may, in particular, provide for conditions to be included in a heat network authorisation that—(a) in relation to England and Wales or Scotland, impose on the person who holds the authorisation a requirement of a kind that may be imposed under section 7(3) of the Electricity Act 1989 on the holder of a licence under section 6(1) of that Act;(b) in relation to Northern Ireland, impose on the person who holds the authorisation a requirement of a kind that may be imposed under Article 11(3) of the Electricity (Northern Ireland) Order 1992 (S.I. 1992/231 (N.I. 1)) on the holder of a licence under Article 10(1) of that Order.”Member’s explanatory statement
This amendment enables regulations to provide for heat network authorisations to include conditions imposing any requirement of a kind that may under section 7(3) of the Electricity Act 1989 (or under Article 11(3) of the Electricity (Northern Ireland) Order 1992) be imposed on licence holders under that Act (or that Order).
Member’s explanatory statement
This amendment removes provision duplicated by the amendments in the name of Lord Callanan at page 291, line 14 and at page 292, line 20.
Member’s explanatory statement
This amendment clarifies the drafting of a reference to the sorts of condition that regulations may provide may be included in heat network authorisations.
Member’s explanatory statement
This amendment clarifies the drafting of a reference to the sorts of condition that regulations may provide may be included in heat network authorisations.
“(3) In sub-paragraphs (1) and (2), a reference to the modification of a condition includes a reference to the revocation of a condition.”Member’s explanatory statement
This amendment ensures that regulations may provide for the Regulator to revoke conditions included in heat network authorisations.
“(4) The regulations may provide for the conditions of a heat network authorisation—(a) to have effect or cease to have effect at such times and in such circumstances as may be determined by or under the conditions;(b) to be modified in such manner as may be specified in the conditions at such times and in such circumstances as may be so determined.”Member’s explanatory statement
This amendment ensures that regulations may provide for conditions included in heat network authorisations to come into effect, cease to have effect or be modified in accordance with the conditions.
“(a) for the revocation of a heat network authorisation by the Regulator;(b) for a heat network authorisation to cease to have effect in circumstances specified in or determined under the authorisation.”Member’s explanatory statement
This amendment enables regulations to provide for a heat network authorisation to be revoked by the Regulator or to cease to have effect in accordance with the terms on which it was conferred.
Member’s explanatory statement
This amendment is consequential on the amendment in the name of Lord Callanan at page 293, line 30.
Member’s explanatory statement
This amendment (together with others in the name of Lord Callanan in relation to Schedule 15) ensures that the purposes for which a document may be designated are not limited to those concerning technical standards.
Member’s explanatory statement
See the explanatory statement to the first amendment in the name of Lord Callanan at page 295, line 2.
Member’s explanatory statement
See the explanatory statement to the first amendment in the name of Lord Callanan at page 295, line 2.
Member’s explanatory statement
See the explanatory statement to the first amendment in the name of Lord Callanan at page 295, line 2.
“(ba) conditions about functions of the Regulator in connection with the modification of a designated document;”Member’s explanatory statement
This amendment enables regulations to provide for a code manager licence to include conditions about the role of the Regulator in the modification of designated documents.
“(4) The regulations may, in particular, provide for conditions to be included in a code manager licence that—(a) in relation to England and Wales or Scotland, impose on the person who holds the licence a requirement of a kind that may be imposed under section 7(3) of the Electricity Act 1989 on the holder of a licence under section 6(1) of that Act;(b) in relation to Northern Ireland, impose on the person who holds the licence a requirement of a kind that may be imposed under Article 11(3) of the Electricity (Northern Ireland) Order 1992 (S.I. 1992/231 (N.I. 1)) on the holder of a licence under Article 10(1) of that Order.”Member’s explanatory statement
This amendment enables regulations to provide for code manager licences to include conditions imposing any requirement of a kind that may under section 7(3) of the Electricity Act 1989 (or under Article 11(3) of the Electricity (Northern Ireland) Order 1992) be imposed on licence holders under that Act (or that Order).
Member’s explanatory statement
This amendment ensures consistency with the reference to costs in the amendments in the name of Lord Callanan to Clause 170.
“(3) In sub-paragraphs (1) and (2), a reference to the modification of a condition includes a reference to the revocation of a condition.”Member’s explanatory statement
This amendment ensures that regulations may provide for the Regulator to revoke conditions included in code manager licences.
“(4) The regulations may provide for the conditions of a code manager licence—(a) to have effect or cease to have effect at such times and in such circumstances as may be determined by or under the conditions;(b) to be modified in such manner as may be specified in the conditions at such times and in such circumstances as may be so determined.”Member’s explanatory statement
This amendment ensures that regulations may provide for conditions included in code manager licences to come into effect, cease to have effect or be modified in accordance with the conditions.
(b) for a code manager licence to cease to have effect in circumstances specified in or determined under the licence.”Member’s explanatory statement
This amendment enables regulations to provide for a code manger licence to be revoked by the Regulator or to cease to have effect in accordance with the terms on which it was conferred.
Member’s explanatory statement
This amendment is consequential on the amendment in the name of Lord Callanan at page 297, line 14.
Member’s explanatory statement
This amendment enables regulations made by the Regulator about applications for installation and maintenance licences, so far as relating to England and Wales, to include provision about the information that must be provided to the Regulator by a person making an application.
Member’s explanatory statement
This amendment omits a reference to “road” that is not necessary in light of the meaning “street” has in paragraph 33.
Member’s explanatory statement
This amendment omits the definition of “road”, which is not necessary in light of the definition of “street” for the purposes of paragraph 33.
Member’s explanatory statement
This amendment broadens the definition of “transport land”, in relation to rights that may be conferred on a person by an installation and maintenance licence, to include waterways other than canals.
Member’s explanatory statement
See the explanatory statement to the amendment in the name of Lord Callanan at page 299, line 23.
Member’s explanatory statement
This amendment corrects a reference in paragraph 34(2)(d) to the wrong type of licence.
“(4) The regulations may, in particular, provide for conditions to be included in an installation and maintenance licence that—(a) in relation to England and Wales or Scotland, impose on the person who holds the licence a requirement of a kind that may be imposed under section 7(3) of the Electricity Act 1989 on the holder of a licence under section 6(1) of that Act;(b) in relation to Northern Ireland, impose on the person who holds the licence a requirement of a kind that may be imposed under Article 11(3) of the Electricity (Northern Ireland) Order 1992 (S.I. 1992/231 (N.I. 1)) on the holder of a licence under Article 10(1) of that Order.”Member’s explanatory statement
This amendment enables regulations to provide for installation and maintenance licences to include conditions imposing any requirement of a kind that may under section 7(3) of the Electricity Act 1989 (or under Article 11(3) of the Electricity (Northern Ireland) Order 1992) be imposed on licence holders under that Act (or that Order).
“(3) In sub-paragraphs (1) and (2), a reference to the modification of a condition includes a reference to the revocation of a condition.”Member’s explanatory statement
This amendment ensures that regulations may provide for the Regulator to revoke conditions included in installation and maintenance licences.
“(4) The regulations may provide for the conditions of an installation and maintenance licence—(a) to have effect or cease to have effect at such times and in such circumstances as may be determined by or under the conditions;(b) to be modified in such manner as may be specified in the conditions at such times and in such circumstances as may be so determined.”Member’s explanatory statement
This amendment ensures that regulations may provide for conditions included in installation and maintenance licences to come into effect, cease to have effect or be modified in accordance with the conditions.
“(a) for the revocation of an installation and maintenance licence by the Regulator;(b) for an installation and maintenance licence to cease to have effect in circumstances specified in or determined under the licence.”Member’s explanatory statement
This amendment enables regulations to provide for an installation and maintenance licence to be revoked by the Regulator or to cease to have effect in accordance with the terms on which it was conferred.
Member’s explanatory statement
This amendment is consequential on the amendment in the name of Lord Callanan at page 300, line 23.
Member’s explanatory statement
This amendment (together with other amendments to Part 6 of Schedule 15 in the name of Lord Callanan) provides that regulations under Clause 168 may make provision about the enforcement of requirements contained in regulations, as well as about the enforcement of conditions contained in heat network authorisations and other licences.
Member’s explanatory statement
See the explanatory statement for the amendment in the name of Lord Callanan at page 300, line 32.
Member’s explanatory statement
This amendment is consequential on the amendment in the name of Lord Callanan at page 300, line 38.
Member’s explanatory statement
This amendment clarifies that regulations making provision for the Regulator to make orders for the purposes of securing compliance may impose requirements to take such steps as the Regulator considers appropriate.
Member’s explanatory statement
See the explanatory statement for the amendment in the name of Lord Callanan at page 300, line 32.
“(aa) in a case where it appears to the Regulator that a relevant person is contravening or is likely to contravene a relevant condition or requirement, to make a provisional order requiring the person to take such steps as the Regulator considers appropriate for the purpose of securing compliance with the relevant condition or requirement;”Member’s explanatory statement
This amendment clarifies that regulations may provide for a lower standard of proof to apply to provisional orders made by the Regulator.
Member’s explanatory statement
See the explanatory statement for the amendment in the name of Lord Callanan at page 300, line 32.
Member’s explanatory statement
See the explanatory statement for the amendment in the name of Lord Callanan at page 300, line 32.
Member’s explanatory statement
This amendment corrects a typographical error.
Member’s explanatory statement
See the explanatory statement for the amendment in the name of Lord Callanan at page 300, line 32.
Member’s explanatory statement
See the explanatory statement for the amendment in the name of Lord Callanan at page 300, line 32.
““relevant requirement”, in relation to a relevant person, means a requirement imposed on the person by or under the regulations or by regulations made by the Regulator by virtue of any provision of this Schedule;”Member’s explanatory statement
This amendment defines “relevant requirement”, for the purposes of paragraph 38 of Schedule 15, as any requirement imposed by regulations made under clause 168 or by regulations made by the Regulator by virtue of any provision of Schedule 15.
Member’s explanatory statement
This amendment is consequential on the amendment in the name of Lord Callanan at page 300, line 38.
Member’s explanatory statement
This amendment omits provision superseded by the amendment in the name of Lord Callanan at page 300, line 38.
Member’s explanatory statement
This amendment is consequential on the amendment in the name of Lord Callanan at page 300, line 38.
“(f) make provision enabling the Regulator to accept an enforcement undertaking from a relevant person and about the consequences of accepting such an undertaking.(2) An “enforcement undertaking” is an undertaking to take, within the period specified in the undertaking, such action as may be so specified to secure compliance with a relevant condition or requirement.”Member’s explanatory statement
This amendment (together with the amendment in the name of Lord Callanan at page 302, line 21) gives the Regulator power to make regulations allowing it to accept enforcement undertakings instead of taking enforcement action.
“(3) Except as provided by the regulations, the validity of an order made by virtue of paragraph 38(2)(a) or (aa) is not to be questioned in any legal proceedings.”Member’s explanatory statement
This amendment provides that the validity of an order made by virtue of paragraph 38(2)(a) or (aa) of Schedule 15 may not be challenged in legal proceedings except as provided by regulations.
“(ea) make provision about payment of a penalty (and any interest) in instalments;”Member’s explanatory statement
This amendment provides that regulations under Clause 168 may provide for payment of a penalty in instalments.
“(g) make provision enabling the Regulator to accept an enforcement undertaking from a relevant person and about the consequences of accepting such an undertaking.”Member’s explanatory statement
See the explanatory statement for the first amendment in the name of Lord Callanan at page 302, line 5.
“(3) Except as provided by the regulations, the validity of a penalty imposed by virtue of paragraph 38 is not to be questioned in any legal proceedings.”Member’s explanatory statement
This amendment provides that the validity of a penalty imposed by virtue of paragraph 38 of Schedule 15 may not be challenged in legal proceedings except as provided by regulations.
Member’s explanatory statement
This amendment corrects a typographical error.
“(ea) make provision about payment of compensation (and any interest) in instalments;”Member’s explanatory statement
This amendment provides that regulations made under Clause 168 may provide for payment in instalments of sums under a consumer redress order.
“(g) make provision enabling the Regulator to accept an enforcement undertaking from a relevant person and about the consequences of accepting such an undertaking.”Member’s explanatory statement
See the explanatory statement for the amendment in the name of Lord Callanan at page 302, line 5.
“(3) Except as provided by the regulations, the validity of a consumer redress order is not to be questioned in any legal proceedings.”Member’s explanatory statement
This amendment provides that the validity of a consumer redress order (imposed by virtue of paragraph 38(2)(c) of Schedule 15) may not be challenged in legal proceedings except as provided by regulations.
Member’s explanatory statement
This amendment ensures that the language of paragraph 43(1) is consistent with that used in paragraph 14(4)(b) in order that regulations may make provision about how the Regulator is to determine whether charges payable by any consumer are disproportionate, rather than only domestic consumers.
“(1) The regulations may make provision conferring powers on the Regulator or imposing requirements on any person, for the purposes of or in connection with enabling the Regulator—(a) to monitor and secure compliance with relevant conditions or requirements;(b) to make an order in respect of the contravention of a relevant condition or requirement;(c) to enforce relevant conditions or requirements;(d) to make a determination under provision made by virtue of paragraph 43(1).”Member’s explanatory statement
This amendment (together with the amendment in the name of Lord Callanan at page 304, line 24) allows regulations to confer powers on the Regulator or to impose requirements on any person for purposes connected to the enforcement of relevant conditions or requirements.
“(3) Regulations made by virtue of sub-paragraph (1) may, in particular—(a) confer powers to enter premises for the purposes of exercising powers conferred by the regulations;(b) make provision about the circumstances in which a warrant is required to exercise a power conferred by virtue of paragraph (a);(c) make provision for the issuing of such a warrant where conditions specified in the regulations are satisfied.”Member’s explanatory statement
This amendment clarifies that regulations made by virtue of paragraph 44(1) may confer powers to enter premises and make provision about circumstances in which a warrant is required.
“(5) Regulations made by virtue of sub-paragraph (1) may, in particular, impose requirements relating to—(a) the keeping of records by relevant persons;(b) the provision of information by relevant persons and others;(c) the audit and verification of that information.”Member’s explanatory statement
See the explanatory statement to the amendment in the name of Lord Callanan at page 304, line 5.
“(1A) Regulations made by virtue of this paragraph may make provision relating to the connection of premises to a relevant heat network whether a connection is for the purpose of—(a) supplying heating, cooling or hot water to premises, or(b) supplying thermal energy to a relevant heat network.”Member’s explanatory statement
This amendment enables regulations to make provision about the connection of premises to relevant heat networks whether a connection is for the purpose of supplying heating, cooling or hot water to premises, or for the purpose of supplying thermal energy to a relevant heat network.
Member’s explanatory statement
This amendment ensures consistency with the reference to costs in the amendments in the name of Lord Callanan to Clause 170.
“(1A) The regulations may provide for sections 24 and 25 of the Consumers, Estate Agents and Redress Act 2007 (provision of information to consumer advocacy bodies) to apply in relation to relevant persons as they apply to regulated providers within the meaning of section 25 of that Act, with such modifications as appear to the appropriate authority to be appropriate.”Member’s explanatory statement
This amendment provides that requirements relating to the provision of information to consumer advocacy bodies, imposed by sections 24 and 25 of the Consumers, Estate Agents and Redress Act 2007, may be imposed on holders of heat network authorisations and others by regulations under Clause 168.
“(a) to apply in relation to heat network consumers in England, Wales or Scotland as it applies in relation to gas or electricity consumers, with such modifications as appear to the Secretary of State to be appropriate;(b) to apply in relation to relevant persons in England, Wales or Scotland as it applies in relation to regulated providers within the meaning of that Part, with such modifications as appear to the Secretary of State to be appropriate.”Member’s explanatory statement
This amendment provides that requirements relating to complaints handling and redress schemes, imposed by Part 2 of the Consumers, Estate Agents and Redress Act 2007, may be imposed on holders of heat network authorisations and others by regulations under Clause 168.
Member’s explanatory statement
This amendment ensures consistency with the reference to costs in the amendments in the name of Lord Callanan to Clause 170.
Member’s explanatory statement
This amendment ensures consistency with the reference to costs in the amendments in the name of Lord Callanan to Clause 170.
Member’s explanatory statement
This amendment ensures consistency with the reference to costs in the amendments in the name of Lord Callanan to Clause 170.
Member’s explanatory statement
This amendment ensures consistency with the reference to costs in the amendments in the name of Lord Callanan to Clause 170.
Lord Callanan
“(ba) regulations under section 168 which create an offence or provide for an increase in the penalty for an existing offence;”Member’s explanatory statement
This amendment provides that regulations made by the Department for the Economy in Northern Ireland that create an offence, or provide for an increased penalty for an existing offence, may not be made unless a draft has been laid before and approved by a resolution of the Northern Ireland Assembly.
Lord Callanan
Member’s explanatory statement
This amendment (together with the amendment in the name of Lord Callanan at page 142, line 37) clarifies the heat network-related costs that can be charged to holders of gas or electricity licences in England, Wales and Scotland.
“(1A) The costs within this subsection are—(a) costs of the GEMA—(i) under regulations made under section 168, or(ii) in its capacity as the licensing authority for the purposes of the Heat Networks (Scotland) Act 2021 (asp 9), if the GEMA is designated as such under section 171(1) of this Act,(b) costs of a person other than the GEMA in carrying out, by virtue of section 166(2) or paragraph 5 of Schedule 15, functions of the Regulator,(c) costs of holders of licences issued under Part 4 of Schedule 15 (code manager licences),(d) costs incurred by the Secretary of State in giving financial assistance under regulations made by virtue of paragraph 51 of Schedule 15 (special administration regime),(e) costs incurred by a person or body in providing, or arranging for the provision of, consumer advocacy and advice in relation to heat network consumers, and(f) costs not within any of paragraphs (a) to (e) incurred by a person in exercising a function in relation to heat networks in England, Wales or Scotland (whether by virtue of regulations under section 168 or otherwise).”Member’s explanatory statement
See the explanatory statement for the amendment in the name of Lord Callanan at page 142, line 36.
Member’s explanatory statement
This amendment (together with the amendment in the name of Lord Callanan at page 143, line 2) clarifies the heat network-related costs that can be charged to holders of gas or electricity licences in Northern Ireland.
“(3) The costs within this subsection are—(a) costs of the NIAUR under regulations made under section 168,(b) costs of a person other than the NIAUR in carrying out, by virtue of section 166(3) or paragraph 5 of Schedule 15, functions of the Regulator,(c) costs incurred by the Department in giving financial assistance under regulations made by virtue of paragraph 51 of Schedule 15 (special administration regime),(d) costs incurred by a person or body in providing, or arranging for the provision of, consumer advocacy and advice in relation to heat network consumers, and(e) costs not within any of paragraphs (a) to (d) incurred by a person in exercising a function in relation to heat networks in Northern Ireland (whether by virtue of regulations under section 168 or otherwise).”Member’s explanatory statement
See the explanatory statement for the amendment in the name of Lord Callanan at page 143, line 1.
Lord Lennie
Member’s explanatory statement
This amendment would ensure that the GEMA may be designated as the regulator for heat network zones.
Lord Lennie (Lab)
I shall speak to just this amendment and be fairly brief. It would ensure that the Gas and Electricity Markets Authority was designated as the regulator for heat network zones. Those zones are fundamental to the scale of expansion necessary to achieve net zero. As we heard before, this in turn depends on local authorities having the right resources to deliver their responsibilities effectively. The amendment would ensure that the Secretary of State delegates to GEMA its authority status to act as regulator in this regard, as already described for heat networks. Essentially, they should expand them in the most efficient manner possible if we are to achieve net zero. Given Ofgem’s regulatory responsibility for zoning, as well as for the networks themselves, this would ensure a joint approach to get the best out of heat networks.
While the devil may be in the detail of the regulations themselves—we have heard about some of that already—the Opposition support the proposals in this group of amendments. Essentially, they are adaptable to changes. Monitoring and adapting to market changes will be vital, and we support the amendments in the names of the noble Lords, Lord Teverson and Lord Ravensdale, to which they will speak shortly. I beg to move.
Lord Teverson (LD)
My Lords, we move on to the zoning regulations. I very much agree with the amendment moved by the noble Lord, Lord Lennie. When I read through this section, I must admit that I found it extremely opaque in many ways. I will come to my own amendments in a minute, but perhaps the Minister can explain a few things to me. Clause 174(2) says:
“A heat network zone is an area in England”.
I presume that means that this is just English legislation, not for the rest of the United Kingdom, but it is very unspecific about what a network zone would be. I had assumed that it would be a single zone or single heating system, but it obviously is not. I am interested to hear from the Minister what a zone is likely to be in practice.
We then have a zone authority. Clause 175(1) states:
“Zones regulations may designate a person to act as the Heat Network Zones Authority”.
Again, as the noble Lord, Lord Lennie, pointed out, we have very vague ideas as to who this should be. I am interested to hear again from the Minister who the authority is expected to be.
Then we move on to zone co-ordinators. Who are they and what exactly do they do in comparison with the zone authority? Of course, in Clause 175(5), we have a list defining local authorities. I was delighted to see the Council of the Isles of Scilly, which I have represented in the past, there—all 2,000 souls are represented in that list. I would be really interested to understand from the Minister how all this works. Clause 175(4) says that the
“Regulations … may make provision for the Authority to require a local authority, or two or more local authorities”,
so it seems to me a very complicated landscape. I would be interested to understand how that jigsaw fits together.
Two of my amendments would change “may” to “must”; I just cannot see how it could remain “may” in those two places. The main thrust of my arguments is in Amendments 165 and 166. They are about making sure that the regulations are in line not only with the strategy and policy statement—which we have referred to many times already regarding the text of the Bill—but with, in particular, local authorities’ net-zero plans. A huge number of local authorities, as I know the noble Baroness, Lady Bennett, has pointed out, now have net-zero objectives and plans to back them up. We should give credit to that and include it in the Bill. My Amendment 166 is very much on the same area of the delivery of heat networks within zones and how they fit in with local net-zero energy systems.
As I said, it would be really useful to everybody to understand how this geography is meant to work. I suppose my question is: is this just too complicated or is there some logical method here that does not get in the way, and does not create a bureaucracy that gets in the way, of these systems?
Lord Ravensdale (CB)
My Lords, I again declare my interests as set out in the register. I speak to Amendment 167 in my name, which really builds on the amendments that the noble Lords, Lord Lennie and Lord Teverson, have put forward to better set out the role of local authorities in this picture.
There is a great opportunity here to extend the zoning powers that we have in the Bill beyond heat networks into other areas. Ensuing that the Bill better defines local authority roles is really very applicable to the delivery of heat, because it is local authorities that know best about their housing stock and its condition and how they can deliver clean heat in their areas.
Lord Callanan (Con)
Let me first remind the Committee of the broader ambitions of this section of the Bill, which covers heat network zoning, which is a key policy to deliver the scale of expansion of heat networks that will be required to meet net zero. This process brings together local stakeholders and industry, to identify and designate areas where heat networks are expected to be the lowest-cost solution for decarbonising heating. The clauses will enable the Government’s commitment to introduce zoning by 2025.
Amendments 162YYYA, 162YYYB, 162YYYC, 162YYYD, 162YYYE, 162YYYF, 162YYYG and 165A—who gives these numbers to amendments?—are in my name. They will permit regulations to allow the heat network zones authority, which I will refer to as the authority, to directly designate zone co-ordinators and heat network zones in cases where these functions have not been performed by the relevant responsible bodies. This will deliver a more efficient process for establishing heat network zones.
More specifically, Amendment 162YYYA permits regulations to enable the authority to designate a person as zone co-ordinator. This may be necessary in scenarios where, despite directing it to do so using the powers in Clause 176(4), a local authority does not establish a zone co-ordinator. This could prevent the heat network opportunity that has been identified from being realised. Similarly, Amendments 162YYYB to 162YYYG provide for areas to be designated as heat network zones by the authority, in addition to zone co-ordinators as already provided for in Clause 177(1)(b). They also ensure that this expanded role for the authority is reflected elsewhere in Clause 177. This mirrors existing powers for identifying areas as heat network zones and reviewing areas designated as such. The authority or zone co-ordinators may undertake each of these activities. These amendments will therefore ensure that the authority may designate zones directly, avoiding unnecessary delays to the rollout of heat networks.
Amendment 165A concerns low-carbon heat sources. A range of heat sources could potentially be used by heat networks, including heat from thermal power stations, industrial processes or cooling and refrigeration. Clause 180 gives the Secretary of State powers to require heat sources in zones to connect to a heat network. This amendment will allow regulations to ensure that heat sources that are required to connect do not abuse their monopoly position and charge disproportionate prices for the heat that they provide. Equally, it will allow the regulations to ensure that the requirement to connect does not unduly disadvantage heat sources themselves. This will help to support fair pricing, which will give investors greater security and confidence and help to accelerate the delivery of large-scale heat networks in zones.
I now turn to Amendment 162YYYZA in the names of the noble Lord, Lord Lennie, and the noble Baroness, Lady Blake of Leeds, regarding designating GEMA as the heat network zones authority. The authority will be a national body responsible for zoning functions that require national-level standardisation or are most efficiently or effectively carried out at a national level. This approach will allow for national standards and consistent rules to apply in the initial identification of a potential heat network zone.
In terms of who could fulfil the authority role, Clause 176(3) is explicit that the Secretary of State may but need not be designated as the authority. The clause as drafted therefore already provides that regulations may appoint GEMA as the authority. We will be specifying the authority’s functions and responsibilities in the regulations; this will therefore be the subject of further consultation.
The authority will fulfil a different function from the heat network regulator, which, as set out in Clause 166, we propose will be fulfilled by GEMA in relation to Great Britain. This role will cover all heat networks, both within and outside heat network zones. We do not envisage a separate regulator for heat network zones in England. We will be specifying the authority’s functions and responsibilities in the appropriate regulations; we intend for the body to undertake functions on behalf of the Secretary of State and be accountable to the Secretary of State.
Detailed considerations regarding roles and responsibilities in zones will of course be subject to further consultation as we continue to develop our policy proposals. Consultation on these issues will take place in due course. Appointing the authority in regulations will allow for amendment should this be required as and when its functions change over time as the networks become more developed in the UK. I hope that this has helped to clarify our proposed approach and the scope of the powers already provided.
I thank the noble Lord, Lord Teverson, for his thoughtful Amendments 163 and 164, which would make the provision of the zoning methodology mandatory and require the methodology to include certain details. As always, we want legislation to be flexible and future-proofed. In this context, this means that the regulations can adapt to developments in the heat network market. The Government are clear that a national methodology for identifying zones will be necessary to enable a robust and transparent approach that increases overall efficiency and drives consistency. To this end, a pilot to support the development of the methodology is under way in 28 English cities and towns. The outputs from the pilot will help to inform policy design and future consultation on the methodology and its contents. Accepting these amendments now would, in effect, tie the Government’s hands at this stage to the potential cost of industry, stakeholders and, ultimately, consumers.
Next, I turn to Amendments 165 and 166, also from the noble Lord, Lord Teverson, which concern interactions between the national methodology and the co-ordination and delivery of heat networks at a local level. Accepting Amendment 165 would mean that the methodology was no longer nationally determined and would have to vary according to each local authority’s requirements. A national methodology will minimise the duplication of effort at the local level and instead ensure that local input is applied at the most appropriate stage: the refinement and designation of the zones themselves.
Heat network zoning will support local net-zero goals by unlocking the lowest-cost pathway to heat decarbonisation in built-up areas. As we expect that zoning co-ordinators will work with the local authority, their work will be brought into local net-zero plans. Therefore, Amendment 166 risks creating unnecessary bureaucracy at a local level, reducing zoning co-ordinators’ capacity to focus on the effective delivery of zones.
The final amendment in this group, Amendment 167 tabled by the noble Lord, Lord Ravensdale, would extend the Bill’s heat network zoning provisions to individual heat pumps. As noble Lords will be aware, various factors, including building density and availability of heat sources, mean that certain localised areas are particularly suited to heat networks. This is why we are introducing a framework to identify where heat networks can provide the lowest-cost low-carbon heating solution.
The noble Lord’s amendment would apply zoning to heat pumps. Our strategic approach, set out in the heat and buildings strategy, is to work with the grain of the market and our policy levers are aligned to natural trigger points to create optionality for consumers regarding their various heating options. For clarity, such trigger points include appliance replacement and change of tenancy or property ownership, among many others of course. An approach where more technologies are zoned risks removing choice for consumers and could cause early appliance scrappage and additional disruption.
I thank noble Lords for this debate and for their amendments. I ask them not to press their amendments.
Lord Teverson (LD)
Could I ask the Minister for some clarification? I apologise if I have not got my head around this. What is a zone: a council estate, a county, a region or a combined authority? I am trying to get from the Minister a mental picture of what a zone could be and what determines that boundary.
Lord Callanan (Con)
No specific boundary is set out in the proposals. It can vary from authority to authority. It is very unlikely to be a whole region; it is much more likely to be an inner-city area, an industrial estate or something like that. It will very much depend on the local circumstances and what heating sources are available. Crucially, it will depend on local support, which is why local authorities are crucial to this process. Many local authorities around the country are already in discussions and are very keen to get on with these zoning proposals, presumably including Leeds. Although I know that the noble Baroness, Lady Blake, does not speak for Leeds any more, I know that it is one of the pioneers in this area.
Lord Ravensdale (CB)
I thank the Minister for his response. He set out the reasons why district heating is particularly well suited to a zoning approach. Could he expand a little on why, for example, heat pumps or urgent retrofits are not suitable for zoning in the same way?
Lord Callanan (Con)
They could be, but we do not want to designate a particular technology because it will vary from area to area and locality to locality. It is to be expected that heat pumps will play a part in heat network zoning. That would be the case but we do not want to be particularly specific.
Lord Lennie (Lab)
I thank the Minister and the noble Lords, Lord Teverson and Lord Ravensdale, for their contributions. I will assume that their questions have at least been addressed, if not fully answered. We might come back to them later; we shall see. On Amendment 162YYYZA, which would designate GEMA, the Minister said that there will be further consultation on who will ultimately become the designated body for network zones. Once that decision is made, will we hear about it? Will whoever has been designated that role be regulated or will it just be announced?
Lord Callanan (Con)
It will be set in the appropriate regulations. The bottom line is that we have not made a final decision at this stage.
Lord Callanan
“(b) to designate a person as a zone coordinator where a local authority (or local authorities) fail to comply with a requirement imposed by virtue of paragraph (a).”Member's explanatory statement
This amendment enables the Heat Networks Zones Authority to designate a zone coordinator where a local authority (or authorities) fail to comply with a requirement to make such a designation.
Lord Callanan
Member's explanatory statement
This amendment enables zones regulations to provide for areas to be designated as heat network zones by the Heat Network Zones Authority as well as by zone coordinators.
Member's explanatory statement
This amendment is consequential on the amendment in the name of Lord Callanan at page 146, line 5.
Member's explanatory statement
This amendment is consequential on the amendment in the name of Lord Callanan at page 146, line 5.
Member's explanatory statement
This amendment is consequential on the amendment in the name of Lord Callanan at page 146, line 5.
Member's explanatory statement
This amendment is consequential on the amendment in the name of Lord Callanan at page 146, line 5.
Member's explanatory statement
This amendment enables regulations made by virtue of Clause 177(1)(c) to impose requirements as to consultation on the Authority as well as on zone coordinators.
Lord Callanan
“(ga) make provision about the terms on which thermal energy is supplied to a district heat network in pursuance of regulations made by virtue of paragraph (f) or (g) (including in particular provision about the amount that may be charged);”Member's explanatory statement
This amendment enables regulations to make provision about the terms on which thermal energy is supplied to a district heat network where the supply is enabled by a requirement imposed on a person by a zone coordinator or where the thermal energy is generated by machinery or other equipment of specified types.
Lord Ravensdale
“PART 7ALocal Area Energy PlansDuty to provide guidance(1) The Secretary of State must publish guidance for local authorities on local area energy planning within 12 months of this Act being passed.(2) The guidance in subsection (1) may include, but is not limited to, guidance on—(a) contributing towards meeting the targets set under—(i) Part 1 of the Climate Change Act 2008 (UK net zero emissions target and budgeting), and(ii) sections 1 to 3 of the Environment Act 2021 (environmental targets);(b) adapting to any current or predicted impacts of climate change identified in the most recent report under section 56 of the Climate Change Act 2008 (report on impact of climate change);(c) the data and assumptions used in creating a local area energy plan;(d) the roles and responsibilities of those involved in creating a local area energy plan;(e) the minimum standards for a local area energy plan.(3) Local authorities must have regard to the guidance produced under subsection (1) when developing local area energy plans.(4) In this section, “local authority” has the meaning given in section 176.”Member's explanatory statement
This amendment provides guidance for local authorities to help them produce Local Area Energy Plans. It aims to widen the roll out of Local Area Energy Plans among local authorities and help better define the role of local authorities in delivering the future energy system.
Lord Ravensdale (CB)
My Lords, Amendment 168 in my name would put a duty on the Secretary of State to
“publish guidance for local authorities on local area energy planning”
and clarify some of the criteria that should be included in the guidance. This is based on Energy Systems Catapult’s guidance and includes how local area energy plans can contribute to meeting our net-zero environmental and adaption targets.
As I said on Amendment 167, local authorities will be crucial to delivering our net-zero targets, particularly on decarbonising heat from buildings, yet the Energy Bill makes only limited reference to the vital role of local authorities in heat networks. That is a particular gap in relation to local area energy planning, which is not mentioned in the Bill, and I do not believe the Government have made a firm commitment to create this mechanism.
The Government should ensure that local authorities are given powers and mechanisms to enable local area energy planning, which is a whole-system approach and methodology to discover the locally preferred and most cost-effective means to decarbonise local transport of heat in any given place. Ofgem commissioned the Centre for Sustainable Energy and Energy Systems Catapult to develop the local area energy planning methodology and, under the pilot, local area energy plans were prepared in three areas—Newcastle, Bridgend and Bury in Manchester. Other local authorities are also in the process of developing plans, but these are piecemeal, often without funding and are taking too long.
It is worth giving a bit of context around the pilots. They divided each area into zones suitable for different types of low-carbon heating technologies. The balance of technologies across the three areas shows how different each area can be. For example, the local area energy plan in Newcastle found that roughly half the homes could be heated by a heat network, whereas it was less than 30% in Bury and only 15% in Bridgend. In Bridgend, a far higher proportion of homes would need to be heated with high-temperature heat pumps to save on the extra expense of retrofitting insulation in its poorer-quality housing stock. That illustrates how different areas can be and the benefits of this local area energy planning approach.
As I have said, local authorities have the best view of their local areas and the state of their housing stock. A joined-up, co-ordinated approach to local area energy planning, led by government and providing local authorities with the support they need could, according to the Energy Systems Catapult, save £252 billion between 2025 and 2050 compared with organic, unco-ordinated approaches to energy planning. There is real value in such an approach.
In its independent review of the heat and buildings strategy, the Climate Change Committee said that local area energy planning,
“If done well … will ensure a coordinated approach for rolling out different low-carbon heating solutions in different areas.”
It also said that,
“The government acknowledges the value of Local Area Energy Planning … but is yet to bring forwards strong policy proposals that would set a direction here.”
This is a real opportunity. My amendment is really to explore what plans the Government have to develop the institutional framework to empower and fund local authorities to roll out these plans.
As a final note, I originally considered tabling an amendment that puts a duty on local authorities to prepare a local area energy plan, but we were advised by the LGA that mandating this would be very daunting for some local authorities that may be unable to achieve this without committed government funding and support. I would be grateful if the Minister could expand on the Government’s plans to develop local area energy plans in the future. I beg to move.
Baroness Bennett of Manor Castle (GP)
My Lords, it is a pleasure to follow the noble Lord, Lord Ravensdale. I declare my position as a vice-president of the Local Government Association in offering my support for his Amendment 168, which I would have signed had I seen it. He has clearly set out the arguments for this. I just add that this would be a significant step forward for energy democracy, with decisions not being centralised in Westminster but made in local areas, by local people.
I think back to an event I attended with Gina Dowding, who was then the MEP for North West England, which dates the event rather precisely. There was work going on by a wide range of organisations in the north-west, looking at renewables across the region. With this kind of plan, different local authorities would be able to band together in different ways, according to what worked for the geography and the energy supply systems. That would be a flexible and effective way of doing that.
I have one more point to make on Amendment 168. Last month I was in Kyiv, talking to energy managers who had suffered as much of a shock as one could possibly imagine any energy manager having to receive, which was half of their systems being destroyed by vicious Russian attacks directed by people who had actually built the systems, so knew exactly where to hit hardest and worst. The Ukrainians were holding their system together, and one of the things they stressed to me was the importance of decentralised, local systems that were holding up and helping to support the national system because the local system was able to function effectively. So, we know we are in the age of shocks and, in terms of resilience, having that local basis is crucial.
That brings me on to my Amendments 237 and 238, which together form an attempt to deliver the potential of something that we saw flowering a decade ago but was then cut off in its prime, and that is community energy schemes, where community groups come together to provide cheaper, greener power and to distribute the benefits locally. The Government have made us all very familiar with the phrase “world-leading”, but I am afraid that when it comes to community energy, it really is impossible for the Government to claim any kind of leadership in clean, home-produced energy schemes at a local level. What we saw a decade ago was a real explosion of community-owned and run renewable energy generation projects that were driven by the feed-in tariff. Indeed, I recall visiting Berwick solar farm in Sussex with the sadly late Keith Taylor, then MEP for South East England, in 2015. They said, “This is now dead. This has been killed”, by the cutting of the feed-in tariff, which of course entirely disappeared in 2019.
These two amendments reflect what is contained within the Local Electricity Bill, started in the other place. That has the backing of 314 MPs from all the major parties and aims to help community groups sell the electricity they generate to local customers. That Bill is also supported by more than 100 principal authority councils and more than 80 national organisations, including the National Trust, WWF, Greenpeace, Friends of the Earth and CPRE. These two amendments offer a chance to take that Bill forward; this is the obvious opportunity to act now. Noble Lords will note that both amendments have been kindly backed by the noble Baronesses, Lady Boycott and Lady Young of Old Scone, and the noble Lord, Lord Teverson, so it has full cross-party and indeed non-party support, and I believe we will also be hearing other noble Lords speaking in support.
Similar Amendments, Amendments 242F and 242G have, been tabled by the noble Lord, Lord Lennie, and the noble Baroness, Lady Blake of Leeds. I have a list setting out the differences, but in the interests of time, I will leave it to those noble Lords to set out the details of how they differ. They are very much differences of detail, rather than of the main content and intent. The Environmental Audit Committee has looked into community energy and it says that the sector could grow between 12 and 20 times by 2030, powering 2.2 million homes and saving 2.5 million tonnes of CO2 emissions every year. That could take community renewable energy generation to 10% of the UK’s electricity generation, around 6,000 megawatts. At the moment, however, it is less than 0.5% of total UK electricity generation capacity: 331 megawatts in 2021. It is not, of course, because of the cost of generating, which has fallen very rapidly over the past decade, but is due to insurmountable costs in selling the electricity they generate and providing the operational requirements to become a licensed energy supplier. Initial costs are put at £1 million, which of course is far beyond the scale of most community energy projects.
To make it worse, community energy schemes receive no guaranteed price certainty for the electricity they generate. They knew what they were going to get under the feed-in tariff, but that scheme closed to new applicants in April 2019, at which point many schemes that were already on the drawing board and well advanced just fell apart. It is not that the Government have not been trying to encourage community energy—that is clearly their intention. There was the Licence Lite scheme route to market, but it did not put reasonable limits on costs and there was no obligation on fully licensed energy utilities to partner with community groups. More recently, we saw the smart export guarantee. That also places a requirement on larger suppliers to purchase the power, but with no guaranteed purchase price or length of contract, again making the lack of certainty killing.
Baroness Boycott (CB)
My Lords, I am very pleased to support Amendments 237 and 238, along with the noble Lord, Lord Teverson, and the noble Baroness, Lady Young. The noble Baroness, Lady Bennett, set out so many of the reasons why we should support this. As she said, the rollout of community energy has ground to a near halt in recent years for reasons related to the withdrawal of the feed-in tariffs and the surely well-intentioned but hopelessly ineffective smart export guarantee, which has given community energy generators either prices which are inadequate or, where they are adequate, no confidence that they will remain so. This has been distressing for volunteers and community energy generators who have put down roots in the community and are supplying valuable services for their community, including energy efficiency—a significant omission from the Bill, which we will hear more about—and skills.
The Government effectively banned onshore wind in 2015 and are now, after seven lost years, belatedly unbanning it in rather curious circumstances. Some communities are up in arms about solar farms, and the Government have recently wobbled somewhat awkwardly between permitting and restricting them, only to now be talking about the need for a balance between farmland and solar PV. This is odd, given that meeting the Government’s own energy security strategy, published in April this year, of reaching 20 gigawatts of installed solar by 2030 would occupy only 0.5% of UK land, which is half of that occupied by golf courses. As noble Lords know, I am very passionate about food production, but I know that we can also produce a level of energy. As I said, I am not so sure that there really is a great tension when the land needs of solar are so limited.
These bannings and unbannings and restrictions and relaxations are really just the policy manifestations of community concerns about energy installations being done to them, rather than with them. The point about the vast majority of large-scale generation in people’s areas is that there is actually very little community benefit. If the Government were willing not just to see the benefits of community energy—as I am sure the Minister does—but to put in place the policy measures to support it, it would make things so much easier for all of us.
I sit on the Environment and Climate Change Committee, which has been taking evidence about boiler upgrade schemes and the like lately. One of the things about community energy is that one or two people within a community are capable of finding their way through the quite complicated government documents to obtain the subsidies, and they in turn can empower a load of residents who otherwise might not be so minded to install insulation and take up new means of energy. There are multiple benefits to this, and I find it hard to see any drawbacks. I am sure the Minister agrees.
Baroness Young of Old Scone (Lab)
My Lords, I also support Amendments 237 and 238, to which I have added my name, and Amendments 242F and 242G in the names of the noble Lord, Lord Lennie, and the noble Baroness, Lady Blake, which, with some variations, aim to achieve the same outcome. Previous speakers talked about the role of community energy generation, which is an important one in future energy supply. It was a small but growing effort in this country and a contribution to the development of renewable energy on a local scale.
However, when the feed-in tariff disappeared for new applications that really put the nail through the head of that growth, and nothing that the Government have done in the last few years to try to reignite it seems to have worked. People have talked about Licence Lite and the smart export guarantee, but neither of these has really produced an uptick in that trend of community energy generation. We need to find a way to get around that. This depends quite substantially on reducing the barriers of upfront capital and the regulatory effort of getting a connection to the system, on making sure that there is a key partnership between the big boys and the small community energy generators, and on some sort of guarantee of purchase price and length of contract. If we do not have those, we will not get any security into the community energy generation sector through investment.
These amendments put forward simple solutions. I shall not go into any detail, because the noble Baroness, Lady Bennett, has gone through them, suffice it to say that the whole issue is about how local energy generators can sell the power they generate locally through a community scheme to local communities. That is the magic bit in this area of community generation. Local schemes are developed and owned by local people, and they have local benefits in the form of cheaper and cleaner energy. They also provide other benefits for local communities.
When I was thinking about a way of describing this, it came to mind that the Labour Party used to talk about Arthur Scargill in a particular way: “He may be a bastard but at least he’s our bastard”. There is a difference between “damn windmills” and “our damn windmills”, so there is a real attraction in local support. I thought that the Government were keen on improving the popularity of locally determined schemes—I am sure that they are—which gives me huge confidence that the Minister will take these four amendments and do the job that the noble Baroness, Lady Bennett, suggested some of the rest of us do: draw out the best cherries from among them.
However, I do not intend to do that. I would rather like the Minister to do it and come forward on Report with a government amendment that meets the key needs of obligating the big boys to buy from the small-scale generators; setting a predictable, fair price; and setting a minimum contract period.
Lord Teverson (LD)
My Lords, I was pleased to put my name to both of the amendments in the name of the noble Baroness, Lady Bennett. Most of what needs to be said has been said. I guess I need to declare my interests: I am a fairly insignificant shareholder of St Ewe community energy, which I have not heard a lot from recently—probably because of the reasons that we outlined here.
The one point I want to make is that this is exactly one of the areas that has been left out of this Bill, as the noble Baroness, Lady Boycott, said. It should be in here. However, to me, although community energy is about generating power, the real importance of it is in allowing communities to come together and be a part of the national and global march forwards to net zero. When there were feed-in tariffs, there was an enthusiasm for people coming together and being part of this essential journey towards a clean economy, a clean society and the environment that communities, families, households and small businesses wanted to see in their local areas. It is not about participation in that big COP 27 or whatever; it is about the local contribution that allows people to participate in one of the most important journeys and fights that we face at the moment, which is about climate change and all the benefits that come from net zero.
Let us have this issue in the Bill. Let us ignite this sector again. Let communities participate in one of the most important objectives that we have on this planet.
Baroness Meacher (CB)
My Lords, I rise to add my strong support for Amendments 237 and 238, so ably introduced by the noble Baroness, Lady Bennett of Manor Castle, and her strong team of cross-party supporters. I thank Steve Shaw of Power for People for his briefing. I will speak only briefly, principally to ask a few questions of the Minister; I hope that he will be able to respond to them—if he heard what I just said.
As we face the existential threat from climate change, it cannot be right for small-scale community renewable energy schemes to be rendered unworkable by disproportionate regulatory burdens and costs. Other countries are promoting small-scale energy production, apparently often by community groups, far more effectively. It must be possible for the UK to do the same. I hope that, today, the Minister will agree in principle that this Bill must remove the barriers to community energy production.
As somebody else—I think it was the noble Lord, Lord Teverson—said, if the Government can come up with improved amendments on Report to achieve this objective, I for one will welcome them. Does the Minister accept that the community renewable energy sector has the potential, as claimed by its advocates and the noble Baroness, Lady Bennett, to provide 10% of the UK’s electricity generation? I hope that the Minister can respond to this question because it is incredibly important. If the Government can really do that—come on—surely we have to enable them to do it.
Does the Minister accept that it is perfectly feasible to reduce significantly the financial, technical and operational requirements to become a licensed energy supplier, and thus to reduce significantly the initial £1 million start-up cost involved? Of course, that makes the whole idea of developing these community energy schemes quite out of the question. Can he assure the Committee that the department will work to resolve these issues before Report?
Baroness Blake of Leeds (Lab)
I shall speak to the amendments in the names of my noble friend Lord Lennie and myself. Before I get to that point, though, I want to stress that the contributions made in this debate have been so strong that I cannot see how the Government can continue not to take this aspect of the debate with the seriousness it deserves, because at the end of the day we have very serious obligations and commitments to make. We are not going to achieve what we have set out to do if we do not focus on delivery, and the importance of how we take our communities and people with us on that journey. I really do not think that has been stressed enough.
The noble Lord, Lord Ravensdale, put it very well when he stressed the importance of involving local authorities in setting up local area energy plans, particularly something that has to be repeated again and again when we talk about this: the bringing-in of powers that need to go down to local authorities and then into the communities. The important aspect of this is that the resources must be there to accompany those powers. Frankly, we are in a situation where local authorities across the country have lost over 60% of their budgets. This needs to be taken into account when we consider how local areas can contribute to the important work that needs to be done in this space. The noble Baroness, Lady Boycott, expressed it exceptionally well by highlighting the current contradictions in government policies that are holding us back in so much of what we need to do.
Going through the debate, I commend the contributions that have been made from our partners coming in. They have brought such important evidence as to what we could be doing, and about the huge potential that could be unleashed if the Government were able to put the necessary measures in place.
In this group, we have focused specifically on setting up a community electricity export guarantee programme. Our amendments relate to community energy and would bring in new clauses between Parts 7 and 8 and Parts 12 and 13. We have done this because, as we have heard, community energy covers aspects of collective action to reduce, purchase, manage and generate electricity. Projects obviously have an emphasis on local engagement and local leadership and control. I firmly believe that that action can often tackle challenging issues around energy with communities, which are well placed to understand their local areas, and bring people together with common purpose. As we have heard, it often takes only a couple of experienced and committed people at a local level to unlock some of the issues we have faced that have been holding us back, and to advise government on what needs to be changed and done to bring this forward.
I do not know whether others picked up a significant amount of interest in the different media outlets over the weekend about community energy projects and initiatives that are being brought forward. We have heard that those projects are significant and cover a whole range of different aspects and ways of coming forward. I do not want to go over all the contributions that have been made, but I hope that we are all looking for some very specific measures and some movement from the Government that we can take forward to Report to examine how we can make the difference that we need.
Running all the way through this is the cruel impact of energy bills on our communities and local people. The response communitywide is because people have to work across so many different areas. That key element of behaviour change is absolutely essential if we are to bring the necessary partners together.
Our amendments would require the Secretary of State, within six months, to
“require licensed energy suppliers with more than 150,000 customers (‘eligible licensed suppliers’) to purchase electricity exports from sites generating low carbon electricity with a capacity below 5MW, including community energy groups … Licensed energy suppliers with fewer than 150,000 customers may also offer to purchase electricity exports from exporting sites … including community owned energy groups”.
Eligible licensed suppliers must
“offer a minimum export price set annually by OFGEM”,
offer a minimum five-year contract and allow
“the exporting site to end the contract after no more than 1 year.”
These steps are important to make sure that the benefits come to community energy projects and that they have a guaranteed stable market to operate in.
A community smart export guarantee is supported by Community Energy England. It would increase investor certainty, especially for larger-scale ground-mounted projects where most of the energy is exported. I am interested to hear what consideration the Government have given to such a scheme and whether we can look forward to progress to ensure that we can deliver.
Lord Callanan (Con)
I thank all noble Lords who contributed to this important debate. Let me start with Amendment 168, moved by the noble Lord, Lord Ravensdale. It seeks to ensure that guidance is published for local authorities regarding local area energy planning. Although the amendment is well-intentioned, in my view, it is not necessary. The Government already have work under way to consider the role of local area energy planning in delivering net zero and supporting efficient network planning, including heat network zoning policy. Through the Government’s Local Net Zero Forum, we are working with local authority representative bodies to discuss the roles and responsibilities of local government, and how we will work with local government to reach our targets.
I am sure the noble Lord agrees that local authorities are already well placed to undertake local area energy planning given their established relationships with many key stakeholders. Guidance to help develop local area energy plans was already published earlier this year and the Government directly supported this activity through the £104 million “prospering from the energy revolution” programme. This included co-funding for the development of guidance for local areas developing local energy plans and the subsequent delivery of those plans. This has so far seen plans produced for Peterborough, Pembrokeshire, Stafford, Cannock Chase and Lichfield. Given that this activity is already under way, I hope the noble Lord agrees that his amendment is unnecessary and will therefore feel able to withdraw it.
I thank the noble Baronesses, Lady Young, Lady Boycott and Lady Blake, and the noble Lords, Lord Teverson and Lord Lennie, for Amendments 238 and 242G, which seek to enable community renewable generation schemes to sell electricity generated to local consumers. I also thank the noble Baroness, Lady Meacher, for her contribution. The Government believe that community groups have a role to play in our efforts to eliminate our contribution to climate change. However, it is our view that encouraging or introducing obligations on licensed electricity suppliers to mandate them to offer local tariffs would be a disproportionate intervention in the market. Local tariffs are better left as commercial decisions for suppliers.
There are already examples of suppliers offering local tariffs through the market. Octopus Energy offers customers in Market Weighton, Caerphilly and Halifax a tariff with discounted prices at times when electricity is generated locally. Any new obligation in this area is likely to be complex and burdensome, particularly if it interferes with suppliers’ existing services and processes already used to serve their customers.
It is therefore more appropriate to allow market-led solutions to continue to develop, rather than us trying to make commercial decisions on behalf of suppliers. As we set out in the British energy security strategy, the Government are developing local partnerships in England that will enable supportive communities to host new onshore wind infrastructure, for example, in return for benefits including lower energy bills. The Government are separately considering wider retail market reforms that deliver a fair deal for consumers, ensuring that the energy market is resilient and investable over the long term.
As I am sure noble Lords are aware, the Government are undertaking a comprehensive review of electricity market arrangements in Great Britain, which considers options that encourage generation and demand to consider location. It also asks how markets can better value the role of small-scale, distributed, renewable electricity. The department is currently looking at the responses to the review of electricity markets consultation, which closed in October.
Amendments 237 and 242F would enable community renewable generation schemes to receive a guaranteed minimum price for the electricity that they export to the grid. Small-scale, low-carbon electricity generation should be brought forward through competitive, market-based solutions, which will help to encourage innovation and investment. We introduced the smart export guarantee in 2020 to provide exactly that: small-scale, low-carbon electricity generators with the right to be paid for the renewable electricity that they export to the grid. It ensures that these generators, which would otherwise struggle to find a way to sell electricity, can have guaranteed access to the market and a choice of options following the closure of the feed-in tariffs scheme.
To enable the SEG to be truly market-based and encourage innovation, however, suppliers must be in a position to set both the tariff levels and structure for themselves. We should allow the small-scale export market to develop with minimum intervention and not introduce a support scheme that specifies minimum prices or contract lengths for generators.
I say without much optimism that I hope noble Lords are reassured that the Government recognise the role that community-owned and locally owned renewable energy schemes can play in supporting the UK’s national net-zero targets. I hope that noble Lords will feel able to withdraw or not press their amendments.
Baroness Bennett of Manor Castle (GP)
Before the Minister sits down, can he tell me—either now or in writing later—what is the Government’s estimate of the amount of local community energy generation that would be arrived at by 2030 under the market-led approach?
Lord Callanan (Con)
I am happy to give the noble Baroness a detailed answer in writing but we do not see any particular limit on it. It is what the market will develop. The problem with the noble Baroness’s amendment is that she is seeking, in effect, to get every other customer to subsidise a relatively uncompetitive form of energy production. If community energy schemes are low-carbon and competitive, they will be able to take their place in the generation mix. Many of these community energy schemes are already supported and will continue to be.
Baroness Young of Old Scone (Lab)
I wonder whether, in writing to the noble Baroness, the Minister could also write to us on a couple of other things, including the number of schemes that have gone through the two mechanisms that were introduced subsequent to the feed-in tariff changes. This would let us see how trends are operating in the market situation that he is describing at the moment; my perception is that it is not producing growth in the uptake of community schemes. The Government must be clear: are they keen on community schemes, seeing them as a real attribute, or are they keen on only commercially competitive ones? If it is the latter, I am almost certain that we will not see many come forward.
Lord Callanan (Con)
We are keen on these schemes but, as always, the question comes down to cost. How much we are prepared to subsidise an essentially uncompetitive scheme that is leveraged on the bills of everyone else who is not benefiting from these schemes? That is the fundamental question. I am of course happy to write with the clarification that the noble Baroness asks for.
Baroness Bennett of Manor Castle (GP)
I am sorry but I really have to come back on that. Does the Minister acknowledge that there are advantages to these schemes other than on cost? They include, for example, insulation, bringing communities together and increasing acceptance and understanding of net zero, as many noble Lords have outlined.
Lord Callanan (Con)
If the noble Baroness is asking me whether I think that there is an advantage to insulation schemes, the answer is of course yes. I am not sure what her question is, but insulation is a great thing.
Baroness Meacher (CB)
Finally, if the Minister can bear it, can he tell us in writing whether he feels that these small community schemes could in fact deliver 10% or so of the UK’s electricity energy; and what estimate he has made of the feasibility of reducing all these technical regulatory constraints, which cost so much at the very beginning? He will understand that, if you are going to make a profit, you have to invest up front. Small schemes are unlikely to be able to make that initial investment but it may well be a tremendous bonus to the country in the longer term if the Government were able to help them reduce all these costs at the outset. It would be helpful to have all that set out in a letter if the Minister is able to do so.
Lord Callanan (Con)
I am of course happy to set out to noble Lords the details of our position in writing. We want to reduce bureaucracy as much as possible but we have an overriding need to ensure the stability of the energy system. Certain technical requirements need to be met by these schemes. We want to encourage them as much as we possibly can, but that comes with limits. We will certainly write with as many details as we can provide.
Lord Lucas (Con)
My Lords, my noble friend has been very helpful, but I am none the less fairly disappointed by the replies he has been able to give. To illustrate, I live in Eastbourne and, if you stand on the hills above Eastbourne—Britain’s sunniest town—and look down at hundreds of acres of industrial and retail estates and car parks, about the only solar panel you will see is on the local college’s eco training hub. That is because the ownership and commercial benefits of these areas are extremely complicated. No one is in a position to get a cost-effective, reasonable-scale scheme going on their own; it needs something that will work as a whole.
A decent feed-in tariff need not be subsidised—it can be below market rate—but there needs to be something so that there is a base on which you can build. My noble friend’s department was kind enough to send a representative to our recent solar summit. One of the main things that came out of a gathering of local businesses, energy suppliers and so on was the need for a basis on which local collaboration can be built, not to create something that requires a subsidy to produce electricity at a greater cost than would otherwise be the case, but to enable a very complicated situation to come together and be supported into commerciality, allowing local virtuous circles of electricity generation and consumption to emerge. That is not happening in our system at the moment, which is ridiculous. Something needs to happen to enable us to move from 200 hectares of white roof to 200 hectares of black roof, and to get the benefits of that.
Lord Callanan (Con)
As I said, a number of suppliers already offer competitive tariffs in the market. They will provide long-term certainty on pricing. There are many examples of industrial units that have already put solar panels on. Obviously, the most cost-effective way is for them to use that power themselves and export any surplus power to the grid using the smart export tariff guarantees. I will answer that question again: the Government are supportive of community energy schemes. We want to see more of them, but we think that is best delivered through the market framework. I will happily provide noble Lords with more detail in writing.
Lord Teverson (LD)
Can I remind the Minister that it is government policy to decarbonise the electricity system within 12 years and one week? That is no time at all. I am absolutely a defender and promoter of market forces, but in some places they just do not act quickly enough. We have a very short period of time in which we must decarbonise the electricity system. I cannot see why the Minister would not be in favour of ease of movement into this market. As the noble Lord, Lord Lucas, said, it does not necessarily require subsidy. To use a Borisonian term, it would unleash the real will of communities in this country to help in that target of decarbonisation by 2035. I cannot see why the Government do not grasp this and make the most of it.
Lord Callanan (Con)
As I said, we are supportive of proposals. We accept the target for decarbonising electricity production and we are moving ahead full-scale with our sails erected—which is no doubt a Borisonian term—towards that goal. Community energy will play probably a small role, but it will play a role. Obviously, larger-scale generators will supply the majority of the nation’s electricity.
Lord Ravensdale (CB)
My Lords, I thank all noble Lords for participating in this very informative debate. I was very encouraged by what the Minister had to say in response to my Amendment 168 and the work already ongoing in government. I come back to the fragmented nature of local area energy plans: some local authorities have the resources and others perhaps do not. I look forward to fleshing out the detail on that as we go towards Report.
The noble Lord, Lord Teverson, and the noble Baroness, Lady Blake, put it really well. The key theme running through all this is the participation of local authorities and local groups in our energy transition and about defining the part they have to play. We have these big, top-down targets—50 gigawatts of offshore wind by 2030 and 24 gigawatts of nuclear by 2050, as well as heating targets—which are all of course very necessary. But we need that bottom-up view and a better definition of the role of local authorities and local groups in supporting this huge engineering challenge, and I say that as an engineer. It is about stitching together all that local data to better inform how we respond nationally. I look forward to further discussions leading up to Report but, with that, I beg leave to withdraw my amendment.
Member's explanatory statement
This amendment amends the reference to electrical energy in the definition of “energy smart appliance” that applies for the purposes of Part 8.
Baroness Bloomfield of Hinton Waldrist (Con)
My Lords, I beg to move Amendment 169 standing in the name of the Minister, my noble friend Lord Callanan, and will also speak to Amendments 170 to 172. This group of amendments considers the definitions set out in Chapter 1 under Clause 186 on “Energy smart appliances and load control”. Clause 186 sets out a number of definitions that are used in other clauses of the Bill relating to load control. These include permitting the creation of new licensable activities, the modification of licence conditions and industry codes for load control purposes, and the making of regulations for energy smart appliances.
Amendments 169 to 171 have two combined effects. First, by removing the reference to the “use, discharge and storage” of electricity, the definition broadens the potential scope of appliances captured. This is because the definition is now agnostic to the way in which the appliance interacts with electricity. Instead, we are now concerned only that there is a flow of electricity into or out of the appliance which can be controlled by a load control signal. The original formulation does not clearly capture local generation of electricity by an appliance—for example, solar panels—and we wish to capture this.
For the purposes of licensing load control, the relevant factor is the sending of a load control signal to an energy smart appliance, regardless of whether that signal is then received by the appliance. Therefore, the amendments make it clearer that the signal needs only to be sent to an energy smart appliance, not necessarily received, to be regarded as a load control signal.
Amendment 172 clarifies that a load control signal may not only be a signal that directly affects electricity usage by an appliance but one that affects the electricity flow into or out of an appliance, based on additional information that is available to the appliance. This means that the improved definition also captures a signal which can configure a device to change electricity usage, depending on additional information available to the appliance. For example, an appliance could be configured to increase its electricity usage if the price of electricity drops below a certain level.
I hope the Committee will agree that these are important amendments that deliver additional clarity in the definitions used.
Member’s explanatory statement
This amendment, together with the amendment in the name of Lord Callanan at page 154, line 25, amends the definition of “load control signal” that applies for the purposes of Part 8 so that it includes a digital communication sent to an energy smart appliance even if the communication is not received by the appliance.
Member’s explanatory statement
This amendment is consequential on the amendment in the name of Lord Callanan at page 154, line 24.
“(4A) For the purposes of subsection (2) an adjustment to the flow of electricity into or out of an appliance is made in response to a load control signal whether it is made in response to—(a) the sending of the signal, or(b) the sending of the signal and one or more additional factors.”Member’s explanatory statement
This amendment glosses the definition of “energy smart appliance” that applies for the purposes of Part 8 to make it clear that a load control signal may be one of a number of factors in response to which an adjustment is made.
Member's explanatory statement
This amendment, together with the other amendment in the name of Lord Callanan at page 155, line 6, amends the list of purposes of energy smart appliances about which regulations may be made so that it includes appliances for cleaning tableware and washing or drying textiles but not other cleaning appliances.
Baroness Bloomfield of Hinton Waldrist (Con)
My Lords, in moving Amendment 173, I will also speak to Amendments 174 to 176, 178 to 180 and 182 in the name of the Minister, my noble friend Lord Callanan.
Amendments 173 to 176 provide clarification and consistency to the definitions of the appliances to which the energy smart regulations will apply. These definitions focus on the purpose of an appliance. Amendments 173 and 174 ensure that energy smart regulations can be made only for cleaning appliances that are most appropriate for demand-side flexibility. This includes, for example, a dishwasher or a washing machine. Amendment 175 allows battery storage to be captured in a manner consistent with the definition of electricity storage in Clause 162. Amendments 176 and 182 clarify that the regulations capture heat pumps, which are essential to the Government’s policy objectives for decarbonising heat.
Next, Amendments 178 and 179 indicate that the Secretary of State may make provision about the recall of non-compliant appliances and may issue guidance about the prohibitions and requirements imposed by these regulations. These amendments therefore provide further safeguards to address serious cases of non-compliance and will support industry to comply with its obligations, aided by guidance.
Lastly, Amendment 180 makes a minor amendment to ensure that the regulations cover additional methods other than ordinary selling for making energy smart appliances available to consumers, such as hire purchase agreements.
Energy smart appliances will play an essential part in the transition to a smarter energy system, enabling consumers to save money on bills and contributing to cost-effective decarbonisation. These amendments provide important clarifications on the scope of these regulations and make certain that they can be implemented effectively in a way that maximises the benefits of smart functionality for consumers and the electricity group.
I will respond to the non-government amendments in this group when we have heard noble Lords’ contributions. I beg to move.
Baroness Randerson (LD)
My little Amendment 177 seems to have intruded on this group of government amendments. I tabled it because I was concerned about the practical implications of the Government’s reliance on smart regulations and smart appliances. I am certainly not arguing with the technology but I am seeking to tease out exactly how this will impact on us and the people of Britain as ordinary consumers.
If you read Clause 187, you will see that it is very dictatorial and centralised in its approach. Yet if you look at paragraph 438 of the Explanatory Notes you will see that, in practice, the Government’s intentions are going to be carried out by retailers and manufacturers, and they will face penalties if they do not get it right. My concern is that one size does not fit all. For example, the noble Baroness just mentioned washing machines and so on, but my example would be electric vehicles. We are told to charge electric vehicles at times when electricity usage is low, and we are promised that this will become an automatic default position. The Government are relying on smart usage, in effect, to expand limited national grid capacity. At the weekend, when I was reading some background material, I noticed that there are only two regions where there is currently said to be any level of surplus national grid capacity. The rest of the country is in a very stretched position.
I have been asking these questions for some years. I have been asking how a reliance on telling people when they can wash their clothes or charge their cars will impact on consumers and the way we use our gadgets and run our daily lives. There is a current experiment, not using smart technology but with a voluntary agreement, to get people to opt in to using their washing machines, dishwashers and so on at low-demand periods, with a financial incentive to do that. That is great if it is convenient for these people and they are opting in to do it. I am pleased that the experiment is taking place, as I am sure it will produce some useful information, but I want to float past everyone a couple of potential issues.
First, I do not want to bore noble Lords for long with the details of my domestic life but I have solar panels and an electric car. I want to use my washing machine and dishwasher and charge my electric vehicle when the sun is out; sometimes, that is at a time of peak demand. I am saving myself money, which I regard as a good thing, but, more importantly, I am limiting the amount I draw down from the grid because my solar panels provide my electricity. I am minimising my call on the grid. There are lots of people like me with solar panels; let us hope that there are heaps more in the coming months and years. This issue needs to be taken into account.
Secondly, more importantly, there is a host of people whose working patterns require them to charge their cars and do their washing at peak times. A care worker working nights has to fit their domestic life around those daily patterns, which might be peak demand times. This is not just about just care workers; it is about health workers, district nurses or anyone working on shifts—the police, firefighters and taxi drivers. We want taxi drivers to drive electric vehicles but they are going to run out of electricity half way through the day; they must be enabled to carry on their work.
We have all, I am sure, experienced a situation where we have had to take our phone or laptop to the technical experts because it is doing something strange, behaving in a way that is beyond our understanding. We are normally told that it is the factory settings or an automatic download. I am now aware that, because they are so automated, electric vehicles adopt patterns that one might not necessarily understand fully because they have downloaded a new program and so on. As the technology becomes more sophisticated, in reality, consumers will find it more difficult to understand what it is doing, why and to override it when they need to.
My big question is that any reliance on smart charging and smart usage must be able to be adapted for that large body of people for whom it is not convenient. In days of high energy prices, most of us can probably be relied on to know what is best for us financially and, therefore, what draws least from the grid. I am concerned that the way in which this is expressed allows no latitude, judgment or option for consumers to make that decision for themselves.
Lord Teverson (LD)
My Lords, I will speak to Amendment 181 in my name, which follows on from what my noble friend Lady Randerson was talking about.
The whole area of smart appliances is really important. It is in fact where demand management starts to creep into this Bill; it is about the only place that it does. The popularity of their potential has, I think, been shown by National Grid’s call for people to offer to manage their energy usage over particular times in the winter; the Minister may give us the figures but I think that more than a million people have shown an interest in it. I would be interested to know where we are with that.
There is a risk here, however. We have seen it with smart meters. I will not go back to the smart meters argument but one barrier to rollout has been the fear of people sharing information. Clearly, data is core to smart technology; data is personal so there is the question of how that data will be used.
My Amendment 181 is really a probing amendment; it is not in the form that would finally go into a Bill. It seeks to understand how the Government are going to communicate what is a really important thrust in terms of demand management and the way we use dispersed energy systems in a smart grid. How are they going to explain and deliver the strategy outlined so that we do not have the consumer reaction that we have had in other areas, including smart meters—very much media-driven, I should add? I want to avoid that.
The other area on which I want to tackle the Minister is concerns Clause 187(3)(d). It is one sub-paragraph of just three lines about security of information—indeed, the whole area of security. This is a core, important area: we know that, wherever smart systems or information technology are involved, there are all sorts of threats regarding the use of personal information. There is also the threat of external hacking, with state actors or others going into these systems and making them unusable.
It is easy and right to say that personal and other data used with smart technologies are secure or otherwise protected, but who is actually going to do that? I am talking about security or communication software systems. I would like to know from the Minister who will be responsible for the protection and security of these systems. I believe that it is important from the bottom up in terms of personal information but also in terms of smart grids and external, less favourable people towards the United Kingdom intervening here. I am sure that the Government have this under control and consideration but it is a really important area. We need to understand that it is being taken seriously and that, whoever the person or authority, they are going to make sure that these particular three lines in Clause 187(3)(d) are delivered.
Baroness Blake of Leeds (Lab)
I will be brief, but I will continue the comments made by the noble Lord, Lord Teverson, on security. I do not have a sense of confidence when we are told that the Government are going to be responsible for these specific areas. Could we have some more detail from the Minister about how this will be put in place and regulated? As we have heard in this discussion, exposure to cyberthreats could be enhanced by the very nature of smart technology. Therefore, we need a great deal of reassurance that this is being dealt with appropriately, and we know who is ultimately responsible for that reassurance.
Baroness Bloomfield of Hinton Waldrist (Con)
I thank the noble Lord, Lord Teverson, and the noble Baronesses, Lady Randerson and Lady Blake, for their contributions. I was going to cover enforcement in group 7, but I have now catapulted some of those remarks back into this group so that we can cover that at the same time.
Turning first to Amendment 177, tabled by the noble Baroness, Lady Randerson, the Government have published both the smart systems and flexibility plan of 2021 and the July 2022 public consultation on developing a smart and secure electricity system. Both documents set out how consumers can provide flexibility to the system and reduce their energy bills via the deployment and use of energy smart technologies and flexibility services. Consumer interests and considerations are at their heart. However, we believe that this amendment would place an unreasonable and inappropriate expectation that regulations could determine or pre-empt how and when consumers choose to use those smart technologies and appliances. It is unnecessary as the Energy Bill is already clear on the importance of protecting and providing benefit to consumers.
First, Clause 187 already allows for regulations to be made which impose requirements on energy smart appliances—in particular, to ensure that the appliance can operate in response to load control signals; to ensure the protection of end-users; and to impose technical requirements, including the requirement to display or provide information about the appliance. Secondly, in taking these primary powers, the Government are also clear that energy smart appliances should always benefit consumers in line with their preferences and choices. The detail of how appliances may be operated is for manufacturers and product designers, and for consumers when they make their product choices. No one will be forced to use their appliances at particular times, and consumers should decide how they want to utilise smart functionality to best meet their individual needs and lifestyles.
The noble Baroness referenced EV charge points. The Government anticipate implementing these measures in a phased approach over several years, recognising the EV charge point sector is already working hard to implement existing regulations. We will work collaboratively with industry as our policy develops, building and learning from the experience of the EV charge point regulations to deliver necessary protections for the energy system and for consumers. To reiterate, consumers will remain in control. This legislation is aimed at facilitating exactly the sorts of exemplary behaviours the noble Baroness is referring to. So, while I welcome the intention of her amendment, I hope she recognises that the Bill sufficiently commits future regulations to maximising the benefits of smart energy technology to deliver the best outcomes for consumers and the wider system.
Turning to Amendment 181, tabled by the noble Lord, Lord Teverson, the Government have already set out how consumers could reduce their bills and be rewarded for the value they provide by using smart appliances in a flexible way. I refer noble Lords again to the smart systems and flexibility plan and the public consultation on developing a smart and secure electricity system. However, this amendment would place an impractical and inappropriate expectation on the Secretary of State to make a statement on exactly how individual consumers can derive maximum value from their smart appliances.
This value is highly variable, depending on how flexible consumers can be with their energy use, their location and the type of smart service and appliances they wish to use. Manufacturers and flexibility service providers will be best placed to inform consumers about the best available benefits and value from their products and services. So, while I welcome the intention of the noble Lord’s amendment, I hope that he can recognise the impracticality of his suggestion and appreciate the wider government actions in train to maximise the benefits of smart energy technology for consumers and the wider system.
The noble Lord also spoke about security, a concern also raised by the noble Baroness, Lady Blake. Regulations made under these enabling powers will ensure that smart devices in scope are secure by design, and that economic operators that play a critical role in delivering load control services to consumers are meeting minimum standards of cybersecurity and data privacy. BEIS is working very closely with the National Cyber Security Centre as well as industry experts to implement measures we intend to take to achieve this. So I beg to move the amendments in the name of my noble friend Lord Callanan and ask noble Lords to withdraw their amendments.
“(ba) washing or drying textiles;”Member’s explanatory statement
See the explanatory statement to the other amendment in the name of Lord Callanan at page 155, line 6.
“(c) storing energy that—(i) was converted from electricity, and(ii) is stored for the purpose of its future reconversion into electricity;”Member’s explanatory statement
This amendment amends the list referred to in the amendment in the name of Lord Callanan at page 155, line 6 so as to refer to electricity storage using language consistent with that used in Clause 162 of the Bill.
“(d) heating;”Member’s explanatory statement
This amendment amends the list referred to in the amendment in the name of Lord Callanan at page 155, line 6 to remove unnecessary words from the entry referring to heating.
“(ca) make provision about the recall of appliances to prevent, or in response to, non-compliance with the regulations;”Member’s explanatory statement
This amendment enables energy smart regulations to make provision about the recall of appliances.
“(cb) make provision for the Secretary of State to issue guidance about prohibitions or requirements imposed by or under the regulations;”Member’s explanatory statement
This amendment enables energy smart regulations to provide for the Secretary of State to issue guidance about prohibitions or requirements imposed by or under the regulations.
Member’s explanatory statement
This amendment amends the list of persons on whom energy smart regulations may impose prohibitions or requirements so as to include persons who supply energy smart appliances by means including but not limited to selling them.
“(3A) The reference in subsection (3)(b)(ii) to electrical heating appliances includes a reference to heat pumps.”Member’s explanatory statement
This amendment glosses the definition of “relevant appliance” so as to clarify that heat pumps without the energy smart function, or that are not compatible with the energy smart function of another appliance, are relevant appliances about which provision by virtue of Clause 187(4)(c) may be made.
“(iii) take specified steps to remedy non-compliance;”Member’s explanatory statement
This amendment enables energy smart regulations to make provision about steps that must be taken to remedy non-compliance (without an enforcement authority imposing a requirement under provision made by virtue of Clause 189(5)).
Baroness Bloomfield of Hinton Waldrist (Con)
My Lords, this group of amendments seeks to strengthen the enforcement powers of the energy smart regulations. This would enable an enforcement authority to investigate and take action swiftly and effectively against non-compliance, and to provide support to industry to comply with their obligations. First, these amendments enable the regulations to place obligations on economic actors to take steps to remedy non-compliance, and to provide evidence of their compliance to an enforcement authority.
Secondly, the amendments allow an enforcement authority to test and make test purchases to assess and to ensure that appliances comply with the regulations. This is an essential requirement, given the necessarily technical requirements the Government will impose to protect consumers and the energy system. If severe non-compliance is identified, Amendment 186 grants a power to an enforcement authority to issue a recall notice to withdraw appliances from the market, if necessary.
Thirdly, Amendment 187 permits an enforcement authority to accept enforcement undertakings. This allows authorities to work constructively with industry to ensure appliances are brought into compliance with regulations, without the need for costly corrective enforcement action being taken.
Finally, Amendment 188 allows an enforcement authority to issue guidance about the enforcement of the regulations and how any authority would exercise its role. This will support industry to comply with their obligations. The market for these appliances is expected to grow rapidly and will play an essential part in the transition to a smarter energy system. These appliances will help consumers save money on bills and contribute to cost-efficient decarbonisation. I hope noble Lords will agree that this is an important group of amendments to enable an appropriate and proportionate enforcement regime to develop, which is consistent and compatible with existing product safety legislation. I beg to move.
Lord Teverson (LD)
My Lords, I just want to probe the Minister so that I understand how this works in practice. What are the Government enforcing? Is it an operating system? Is it the design of a chip? Is it the company that makes them? Will they be type-approved in the UK? Will there be compatibility across different domains? All producers of white goods are international, I think. Will we have our own standards here? I am trying to understand how this will work practically. I absolutely agree with the Minister that this is a key area.
Enforcement authorities are mentioned in the Bill. I just want to understand who they are. Are they the thought police? The Minister mentioned an organisation—the UK cyber headquarters or whatever—so is it that? Is it the Department of Trade, as we would have understood it? Is it the police? Who are those enforcement agencies and how will they work?
I have one last request for clarification. Clause 189(2)(f) refers to
“conferring functions, including functions involving the exercise of a discretion.”
I cannot work out what that means so I would be pleased to understand it.
Baroness Bloomfield of Hinton Waldrist (Con)
I agree that the language in that particular paragraph is quite legalistic. I might need to come back to the noble Lord on that one unless I can get an instant answer.
As I have said, the detailed enforcement regime will be set out in legislation. The enforcement powers underpinning these regulations will provide an appropriate toolkit to allow an enforcement authority to work with industry to ensure that appliances are both compliant with the future regulations and proportionate to the risks that non-compliant devices could pose to consumers and the grid. The Government have aligned the enforcement powers underpinning the regulations with other product regulations that have similar enforcement powers, such as the Electrical Equipment (Safety) Regulations 2016 and the Electric Vehicles (Smart Charge Points) Regulations 2021.
We are in conversation with regulators on our measures. We are confident that we will have the right knowledge and expertise to resource and regulate this market as it develops. I think that is probably as far as I can go at this stage.
“(ba) requiring persons to supply evidence of their compliance to enforcement authorities;”Member's explanatory statement
This amendment enables energy smart regulations to make provision requiring persons to supply evidence of their compliance to enforcement authorities.
“(ea) conferring powers to enable the testing of energy smart appliances by enforcement authorities, including powers to require the provision of sample appliances and powers to make test purchases;”Member's explanatory statement
This amendment enables energy smart regulations to confer the powers necessary to enable enforcement authorities to test energy smart appliances.
“(d) recall appliances to prevent, or in response to, non-compliance with energy smart regulations.”Member's explanatory statement
This amendment enables energy smart regulations to allow enforcement authorities, by written notice, to require persons to recall energy smart appliances.
“(7A) Energy smart regulations may make provision to enable an enforcement authority to accept an enforcement undertaking from a person where the authority has reasonable grounds to suspect that the person has failed to comply with any prohibition or requirement imposed by or under the regulations.(7B) An “enforcement undertaking” is an undertaking to take such action to secure compliance with the regulations as may be specified in the undertaking within such period as may be so specified.(7C) Provision made by virtue of subsection (7A) must include provision that unless the person from whom the undertaking was accepted has failed to comply with the undertaking or any part of it—(a) that person may not at any time be convicted of an offence in respect of the act or omission to which the undertaking relates, and(b) the enforcement authority may not impose on that person any penalty which it would otherwise have power to impose under the regulations.(7D) Provision made by virtue of subsection (7A) may include any provision of a kind mentioned in section 50(5) of the Regulatory Enforcement and Sanctions Act 2008.”Member's explanatory statement
This amendment enables energy smart regulations to make provision enabling an enforcement authority to accept enforcement undertakings.
“(9) Energy smart regulations may provide for an enforcement authority to issue guidance about the enforcement of the regulations and the exercise by the authority of its functions under the regulations.”Member's explanatory statement
This amendment enables energy smart regulations to provide for an enforcement authority to issue guidance about the enforcement of the regulations and about the exercise of its functions.
“(1A) Energy smart regulations may make provision about the sharing of information between an enforcement authority and the GEMA for the purposes of their functions in relation to energy smart appliances and load control.”Member's explanatory statement
This amendment enables energy smart regulations to make provision to facilitate information sharing between any enforcement authority designated under the regulations and the Gas and Electricity Markets Authority (and vice versa).
Baroness Bloomfield of Hinton Waldrist (Con)
My Lords, the Government have tabled two amendments relating to the licensing of load control. The activity of load control here refers to the control of electricity flow to an energy smart appliance by a load controller.
The first of these amendments, to Clause 192, will ensure that the information-sharing between enforcement authorities for energy smart appliance regulations and load-control licensing is explicitly provided for in legislation. The energy smart appliance regime and the load control regime may be regulated by different authorities, so it is imperative that they are able to communicate effectively and share information where necessary. The second of these amendments also relates to the effective delivery of the load control licensing regime. It relates to Schedule 16 and ensures that the provision for consequential amendments to be made to existing legislation, in practice to support the amending of licence conditions, also applies to Acts of the Scottish Parliament or instruments made under them.
In practice, it is unlikely that amendments will be required to Acts of the Scottish Parliament or instruments made under them. However, the load control market is a nascent market. We cannot rule out the possibility that future categories of licence could interact with devolved matters in Scotland. This amendment will ensure that that scenario is provided for, should it ever be needed; should this scenario arise, the Government would of course work with the Scottish Government and adhere to the appropriate processes.
These two amendments will help to provide clarification and explicit provision to support the effective delivery of a load-control licensing system. I beg to move.
Member's explanatory statement
This amendment omits a provision that is superseded by new Clause (Section (Modifications of licences etc): supplementary).
Member's explanatory statement
This amendment enables provision made by regulations under section 56FBA of the Electricity Act 1989 (inserted by the Bill) to include amendments to Acts of the Scottish Parliament and Scottish Statutory Instruments (which are not within the meaning of “enactment” given by the Interpretation Act 1978).
Lord Ravensdale
“National Energy Demand Reduction Strategy(1) The Secretary of State must, before the end of the period of 12 months beginning with the day on which this Act is passed, publish an Energy Demand Reduction Strategy, to include but not limited to the following—(a) achieving a low-carbon heat target, of 100% of installations of relevant heating appliances being low-carbon by 1 January 2035;(b) achieving an energy-efficiency target, of all UK homes and buildings attaining a minimum EPC C rating by 2028;(c) interim targets relating to the targets in paragraphs (a) and (b), and the development of skills to achieve them, at not less than three-yearly intervals;(d) a programme of public engagement and a single source of advice provided by the Government to raise awareness of and encourage energy demand reduction.(2) The Secretary of State must, in developing the Government’s strategy on reducing energy demand, consult the Climate Change Committee and its sub-committee on adaptation.”Member's explanatory statement
This is a new Clause which requires the Secretary of State to publish a National Energy Demand Reduction Strategy to provide for delivery of low carbon heat and energy efficiency targets for all UK homes and buildings.
Lord Ravensdale (CB)
My Lords, I shall speak to Amendment 192 in the name of my noble friend Lady Hayman, which is supported by noble Lords across the House, some of whom cannot be here today, including my noble friend. Amendment 192 is quite simple in that its sole purpose is to require the Government to produce an energy demand reduction strategy. It would require the strategy to be in line with the Climate Change Committee’s recommendation for all buildings to be EPC C by 2028, and in line with the Government’s own non-statutory commitments for all heating appliances to be low carbon by 2035. The strategy would have to include interim targets, including on the development of the necessary skills needed for the strategy to be achieved, and a public engagement element.
Since my noble friend Lady Hayman tabled this amendment at the end of the summer, we have seen some welcome movement from the Government. Last month they announced an £18 million public awareness campaign, with an overall target of reducing energy demand by 15% by 2030. To do this the Chancellor, in his Autumn Statement, announced £6 billion of funding—but not for this Parliament. I believe that while the Exchequer is footing our energy bills to the tune of billions of pounds a year, it would perhaps make sense to bring forward this investment. A new energy efficiency task force was also announced, which will be charged with delivering energy efficiency across the economy to realise that 15% reduction.
The government announcements on demand are most welcome, but what is lacking is that golden thread of a strategy to weave it all together. In that sense, the amendment is highly complementary to what the Government are aiming to achieve with demand reduction. A strategy such as this would link together all the areas which need to coalesce to ensure we can reduce the energy consumption of our buildings: strategic leadership by government, providing certainty to the sector; a plan for how and where efficiency will be achieved; importantly, the jobs and skills which will be required to deliver the energy efficiency improvements; and engaging with the public so that they are fully aware of the necessity of doing this and of the benefits to them that can be realised.
The final strategy would be up to the Government to decide, as is correct, but it could include and outline who will receive government support and through what means; what the expectations will be for those who are able to pay for it but perhaps are not doing so at the moment, because they are waiting to see whether they will receive support from the Government; and what non-financial incentives the Government will use to achieve the overall target. The strategy could also outline in what order improvements to efficiency could or should be made, while it should include provisions for skilling the workforce that will be needed. As I said, the Government have already implemented or are planning to implement things which are included in this amendment, but it would be helpful for the sectors which will carry out the work, for households and building managers and, no doubt, for civil servants to have this all in one place.
I have an example: I went to visit a heat pump manufacturer a few weeks back. It made the point that we have the target of installing 600,000 heat pumps per year by 2028, which is very good, but that the dots need to be joined—for example, having the skills available to install those heat pumps and incentives for households to install them. The dots need to be joined between the production of heat pumps, demand, skills and all those other aspects. That is one of the things this strategy could provide.
Reducing energy consumption in the near term does not require every household to do an urgent retrofit or install a heat pump next year. There are small and relatively cheap improvements, such as installing loft and cavity wall insulation, draught-proofing, thermostatic radiator valves and smart thermostats. It would cost around £1,100 on average to install these in a typical semi-detached house, which would cut energy bills by £273 annually. Under current energy prices, these costs would pay for themselves in just five years. The earlier we take action, the bigger the aggregate savings will be.
I also note that this approach would be popular with the public. Various organisations have come out in favour of a strategy like this. In a recent briefing, UKSIF, E3G and Carbon Tracker stated that improving the efficiency of the UK housing stock could lead to bill savings of at least £500 every year per household, and around £1,000 per year for the least efficient homes—an aggregate annual saving to the economy of £10 billion. Insulated buildings are also less damp and healthier to live in. I beg to move Amendment 192.
Baroness Young of Old Scone (Lab)
My Lords, I rise to support Amendment 192 in the name of the noble Baroness, Lady Hayman, which has been so ably introduced by the noble Lord, Lord Ravensdale. The crux of it is that it calls for joined-up policies around energy demand management, low-carbon heat and energy efficiency by requiring a national energy demand reduction strategy.
I have the privilege of sitting on your Lordships’ Environment and Climate Change Select Committee, and our current inquiry, as noble Lords have already heard, is into the boiler upgrade scheme. Indeed, we had an interesting session with the Minister last week. We have been hearing evidence from the UK and internationally, particularly those countries which are further ahead on air and ground-source heat pump adoption than we are. Both national and international witnesses have confirmed the importance of the key elements of this amendment.
The first is joining up policies by having multiple instruments clustered together and working to maximise uptake of grants and loans. Regulatory bars on old technology should be signalled in advance, but not too far in advance. There should be public information campaigns and effective campaigning for the positive promotion of energy demand reduction.
The second feature that comes clearly in this amendment is that low-carbon heat is not enough. Our housing stock is among the worst in western Europe. Low-carbon heat needs to be linked much more closely than it currently is with effective energy efficiency programmes, and both need interlinked targets so that progress can be co-ordinated and measured. The whole issue of rising energy prices has brought this into sharp focus. We expect to see nearly 11 million households in fuel poverty this winter. Many of those households live in houses that typify the UK as having the worst-insulated housing stock in western Europe.
There needs to be huge progress in energy efficiency as part of the mix but I caution an overreliance on EPCs as a means of judging that, because they are very imprecise instruments. In fact, they can have some peculiar outcomes: if you have an air source heat pump installed in your building you will not necessarily get a higher rated EPC as a result. We have to be sure that we are not inadvertently placing a trap for ourselves for buildings, particularly old and heritage buildings, that will never reach EPC band C.
The third element of the integrated strategy the amendment calls for is the issue of skills in installing and maintaining low-carbon technologies, and in installing energy-efficiency measures. Energy-efficiency skills are much more timeworn and easier. Skills for installing low-carbon technologies are more complex and we are only at the beginning of the road. NESTA has estimated that there were around 3,000 heat pump engineers as of July. It projects that we will need around 27,000 heat pump engineers if the Government are to meet that target of 600,000 installations a year by 2028. There has to be a really big investment in skills programmes. I had a figure that I have now lost, but the German Government have put about €28 million towards skills improvement. We need to be in that ballpark.
The fourth thing is public engagement. I commend the Government for, at long last, having lurched into action with their “It All Adds Up” campaign, but that is rather late in the day and very much short term in the face of price rises. It needs to be sustained and not overly to rely on social media and the public being left to seek out digital sources. I am glad that it will contain a couple of TV ads, but you do not get much television advertising for an £18 million budget these days.
The national energy demand reduction strategy that the amendment proposes would be well worth while in bringing these issues together in a co-ordinated way.
Lord Foster of Bath (LD)
My Lords, I will speak to Amendments 197, 198A, 198B and 212. While I acknowledge that there are some differences between the targets referred to in Amendment 192 and my own, I nevertheless support the principles behind the amendment from the noble Baroness, Lady Hayman, which was so ably introduced. The main purport of my amendments, and part of her Amendment 192, relates to energy efficiency and the important, urgent need to improve that in some 19 million homes across the UK. which are currently classed as energy inefficient—those rated below EPC band C. I say in passing to the noble Baroness, Lady Young, that I entirely agree that we urgently need to address the way we take the measurements that we currently use in our very out-of-date EPC system.
I have raised the issue of energy efficiency on numerous occasions in your Lordship’s House and have arguing for a crash programme of energy efficiency to reduce fuel consumption and fuel bills for years to come. Yet, sadly, even in the past year, work on home energy efficiency has plunged by 50% and is now at its lowest level since 2018. A decade ago, 2.3 million homes had energy-efficiency measures being installed; now it is nothing like that.
Baroness Bennett of Manor Castle (GP)
My Lords, it is a great pleasure to follow that tour de force from the noble Lord, Lord Foster of Bath, who is your Lordships’ House’s acknowledged expert in this area. I will add just a couple of small points to what he said. In case anyone is wondering, all those withdrawn amendments to the noble Lord’s original amendments were me saying, “Please, Government, can we have some more?”, because that is the Greens’ role in life.
The arguments just presented by the noble Lord for the Government putting their own existing targets into the Bill are overwhelming. I would be very happy to come behind his amendment on Report, if needed, although I should note that I will also be speaking in favour of Amendment 192, tabled by the noble Baroness, Lady Hayman. It has full cross-party support, including from the Conservative noble Lord, Lord Bourne of Aberystwyth, so there was no space for my name.
I shall make just a couple of points and point to a couple of sets of stats that I think are quite useful here. One is a study by Friends of the Earth, which found that nearly 9,000 neighbourhoods in England and Wales—just over a quarter of all neighbourhoods—have less-than-average incomes but higher-than-average energy bills. This picks up the point made by the noble Baroness, Lady Young of Old Scone, that EPCs take us only so far and can be misleading. It is looking at actual energy figures that really shows us where some of the greatest need lies. These neighbourhoods are occupied by 15 million people. Although it is not explicitly written into Amendment 192, it could be in the strategy to target help at those who need it most and fastest. We could make that a priority area, which would certainly seem to be a logical part of an energy strategy and, again, very much in line with the Government’s levelling-up agenda.
One other point to make is that we tend to feel that we have done all the easy stuff and now we have to think about ground source heat pumps and high levels of insulation. We still have an estimated 4.4 million homes in England that do not have cavity wall insulation but could have it, and 4.8 million homes without the absolute basic of loft insulation. There is a lot of basic stuff to be done.
Coming back to Amendment 192, I will spare the Minister another debate on video advertising screens but it is worth stressing—I see this in my social media feeds all the time—that we are now subsidising business energy use. Surely the Government want to cut government spending as much as possible. It may not be the biggest scandal in the world but, boy, it annoys people to regularly drive past an unoccupied building site and see it, or unoccupied or barely occupied office buildings, lit up like a Christmas tree 24 hours a day—and we are all paying for it. Surely this is something that the Government would want to tackle in an energy strategy to make sure that we are not subsidising unnecessary energy use.
I probably will not make myself very popular with the Government by saying this, but I want to point to a report, which came out at the weekend, by Another Europe Is Possible and the Friedrich Ebert Foundation, a well-respected group in Germany. The report points out that the EU already has a much higher rate of home energy efficiency measures, so is starting from a much better base, and is aiming to double its annual rate of renovation and reduction in energy use over the next eight years to 2030. If the EU can do it, why can we not?
Baroness Sheehan (LD)
My Lords, so much has already been said that there is little for me to add. I have put my name to Amendment 192.
The only thing I want to say is that the Government need to understand the strength of feeling across the Committee on the complete lack of emphasis in this Bill on something that is doable, that is within our grasp and that the Government have recognised needs to be done but have done nothing whatever to implement it. Noble Lords are trying to help the Government here by tabling what I think are very sensible amendments; I hope that the Government will take note of them.
We have had lots of briefings on this issue. There is huge depth of feeling in the communities of Britain on this. One of the NGOs that we received some briefings from, the UK Green Building Council—sorry, it is not an NGO; it is, however, a body that knows an awful lot about this matter—published a scorecard assessing the Government’s progress since they published their Heat and Buildings Strategy in October 2021. The council concluded that
“most of the Government’s proposals or plans fail to deliver progress towards—or even actively hinder—a net zero carbon built environment.”
In its Review of Energy Policy 2022, the UK Energy Research Centre is equally scathing.
I hope that the Government will take note of these telling criticisms and do something in the Bill to rectify that.
Lord Lennie (Lab)
My Lords, I thank noble Lords who have spoken in this debate so far. We on the Labour Benches certainly welcome Amendment 192 in the names of the noble Baronesses, Lady Sheehan and Lady Hayman, and others, which would create a requirement to publish a national energy demand reduction strategy. It seems an obvious point to make.
We received some information from Energy UK. It says that, although we cannot deal with the current crisis in this Bill, it can ensure that long-term strategies are put in place to tackle the energy efficiency of the UK’s housing stock. This powerful point was made by the noble Lord, Lord Foster. If we do not have targets to measure it against, we cannot really manage it; we just have—I do not quite know what—a sort of wish list, I suppose. We support the targets suggested by the noble Lord, Lord Foster.
The Bill outlines its intention to create powers to remove the European energy performance of buildings directive, or EPBD, requirements in the UK. Those requirements are not perfect, but they have been in place in the supply chain, effectively delivering energy efficiency measures and low-carbon technologies. How will the Government safeguard against the potential for the UK to roll back on energy performance of buildings regulations when we remove the European energy performance of buildings regulations? We risk falling behind the rest of Europe, if we have not done so already, in this space.
We also need to see the detail regarding how the Government will safeguard against the potential for the UK to fall behind the rest of Europe. We need clarification on what measures the Government will take to ensure that all buildings are fit for the future, given the lack of measures in the Bill to reform planning and building regulations. The latter requirement could also be backed by the introduction of a net-zero test, as previously set out, but what measures will the Government take to ensure that all buildings are fit for the future, given the lack of measures in the Bill to reform planning and building regulations or set specific targets for delivery?
Finally, in relation to what the noble Lord, Lord Foster, said about the 19 million homes requiring energy efficiency measures to be put in place pretty quickly, I recommend to the Government Labour’s warm homes plan, which will deliver fully costed upgrades to 19 million homes, cutting bills and creating thousands of good jobs for the future.
Lord Callanan (Con)
I thank everyone who has contributed to this debate on energy efficiency, which is very much a matter dear to my heart. Noble Lords may have noticed that I was delighted to launch the Government’s £18 million “It all adds up” energy saving campaign on Saturday—it is almost as if it was designed especially for this debate—with advice that could help UK households cut hundreds of pounds off their bills. The campaign features tips on simple, low or no-cost actions that households can take to immediately cut energy use and save money while ensuring that people are able to stay safe and warm this winter.
We know that warmer homes and buildings are key to reducing bills and will create jobs along the way. That is why the Government 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. Existing plans that we already have in place are expected to deliver around half of this new ambition. To go further, we will need to work together as a country to reduce waste and improve the way we use energy. As has been referenced in this debate, a new energy efficiency task force is being established to lead this national effort.
First, Amendment 192, in the names of the noble Baronesses, Lady Hayman and Lady Sheehan, and the noble Lord, Lord Whitty, requires the Secretary of State to publish a national energy demand reduction strategy to provide for the delivery of low-carbon heat and energy efficiency targets for all UK homes and buildings. Again, while I understand the reasoning behind this amendment, we do not consider it necessary to ensure that our commitments to improve the energy performance of buildings and our net-zero targets are met.
We already have a heat and buildings strategy which sets out the actions the Government need to take to increase the energy efficiency of buildings in the near term and provides a clear long-term framework to enable industry to invest and deliver the transition to low-carbon heating. Just having another strategy document does not make the policy decisions that are required any less difficult. As I have already mentioned, the Government are launching the energy efficiency task force with the key objectives of developing a long-term strategy to drive improvements in energy efficiency and reduce national energy demand.
As I have repeated many times in the House, we are investing £6.6 billion over this Parliament on clean heat and improving energy efficiency in buildings, reducing our reliance on fossil fuel heating. As I think the noble Lord, Lord Ravensdale, referenced, the Autumn Statement also recently announced a further £6 billion of funding to become available from 2025. In the context of spending reductions and a difficult economic environment, I was delighted to see that announcement from the Chancellor. The Government also recently announced—and we are now consulting on—a further energy efficiency support scheme through ECO+. The scheme will be worth about £1 billion and shall deliver an average household saving of around £310 per year through a broad mix of affordable insulation measures, including loft insulation, cavity wall insulation, draught-proofing and heating controls.
Amendment 197, in the name of the noble Lord, Lord Foster, requires the Secretary of State to set an average energy performance certificate target for mortgage lenders of EPC C by the end of 2030. It also gives the Government the power to make regulations that relate to the disclosure of energy performance information on properties in their portfolio. I have met with many of the lenders, and I agree that they have an important role to play in improving the energy efficiency of the UK’s housing stock. However, as we highlighted in our consultation on improving home energy performance through lenders, the Government are concerned that the amendment may have unintended consequences for the mortgage and housing market. I am sure that this is not the noble Lord’s intention, but there is a danger of disincentivising mortgage lenders from lending to energy-inefficient properties. We would then end up with a load of unmortgageable homes in the UK, which I do not think anybody wants to see.
It is imperative that mortgage lenders are not disincentivised from lending to any particular group while home owners are under unprecedented financial pressure. The Government are using the feedback from the consultation to refine the policy and will publish a response once the policy matters have been resolved.
The noble Lords, Lord Ravensdale and Lord Foster, and the noble Baroness, Lady Young, all mentioned the importance of skills. If anything, that is key to this area, probably even more so than the availability of funding. We understand that scale-up requires consistent long-term deployment streams via government funding and regulation, which is what we are attempting to do, so that companies working in these markets can make the investments needed and individuals can choose to upskill.
To grow the installer supply chain, we are investing in skills and training. In 2021, the Government invested £6 million in the BEIS skills training competition, resulting in almost 7,000 training opportunities being provided across heat pump installation and wider retrofit skills. In fact, we have another training competition out for bids at the moment.
Amendment 212 in this group from the noble Lord, Lord Foster, would require the Secretary of State to collect and publish a list of those public buildings that hold display energy certificates, commonly referred to as DECs, and those that do not. I really do not believe that it would be cost effective for the Government to identify and inspect all public buildings that require a DEC, nor to record this information. The energy performance of buildings report published in 2020 cited an estimated DEC compliance of about 83%. We currently publish DEC data as part of our register. I hope noble Lords agree that this demonstrates that the existing system, which we intend to continue and keep under review, is working well in respect of DEC compliance.
Finally, Amendments 198A and 198B from the noble Lord, Lord Foster, would require the Secretary of State to ensure that all households achieve an energy performance certificate band C by 2035, with specified exemptions, and require regulations relating to energy performance in existing premises. The Government remain committed to our aspiration of improving as many homes as possible to reach EPC band C by 2035 where practical, cost effective and affordable. That is why, as I mentioned, we are investing £12 billion during this Parliament into the various Help to Heat schemes, some of which the noble Lord referenced, to make sure that homes are warmer and cheaper to heat, including £1.5 billion to upgrade around 130,000 social housing and low-income properties in England. However, we need to retain flexibility to choose the best approach, rather than being restricted to the regulatory requirement.
Regarding existing premises, the Government have consulted on raising the minimum energy-efficiency standards for the domestic and non-domestic private rented sectors. We are in the process of considering our responses to both consultations. However, it is important to stress that improving existing buildings is a complicated issue and requires striking a balance between improving standards and minimising impacts on the housing market, and, for the private rented sector specifically, ensuring that the final policy is fair to both landlords and tenants. That is a particular dilemma that we face with the PRS regulations.
Similarly, regarding the social rented sector, the Government have committed to consult within six months of the Social Housing (Regulation) Bill receiving Royal Assent. By prescribing specific targets without any opportunity for landlords to offer views, the proposed amendment would be at odds with this commitment.
I thank all noble Lords who contributed during this debate, but given what I have set out and the Government’s long-term commitment to drive improvements in energy efficiency, I hope that they will not press their amendments.
Lord Foster of Bath (LD)
Before the Minister sits down, could he clarify whether the Government believe that the 2017 Clean Growth Strategy, which talks about achieving EPC band C by 2035 for all homes where this is feasible, affordable and cost-effective, is a target or now just an aspiration? Could he be clear on the language? He used “aspiration” a minute ago. In the documentation, and in every letter he has written to me and in every answer, it has been described as a “target”. I just want to be clear.
Lord Callanan (Con)
I think we are getting into semantics here. I am not sure there is a huge difference between them. My point is that it is not helpful to embed it in primary legislation. It is a target; it is an aspiration; it is something we are working towards that we want to try to deliver, but it is a complicated area with a lot of difficult policy choices and potentially a huge amount of expenditure.
Lord Foster of Bath (LD)
In the light of that, if “aspiration” and “target” are the same and the Minister is not therefore resiling from the 2017 document, could he tell me why the noble Lord, Lord Greenhalgh, and, more recently, the Secretary of State for Environment, Food and Rural Affairs have argued that there is merit in putting environmental targets into legislation? I do not understand where the problem comes. The Minister says the Government need flexibility in the way this is delivered. I do not disagree with that. I am sure that new technology will come along that will perhaps help to do this more efficiently, effectively and quickly. I hope that is the case, but the way in which a target is achieved is totally different from having that target. The industry has been absolutely clear that it is very keen to see a statutory target to give it the confidence it needs.
Lord Callanan (Con)
I disagree with the noble Lord. I have had many discussions with businesses and companies in this area, and we are providing the policy certainty they need. It is clear what direction the country is going in. We have listened to a lot of the feedback, have set out longer delivery programmes for the various schemes that we fund directly and are giving the certainty that people need. It does not make any difference to the industry, in terms of the policy landscape, to enshrine a target in primary legislation as opposed to it being an aspiration, a target or whatever other language the noble Lord prefers.
Lord Ravensdale (CB)
My Lords, I have listened to everything the Minister said in response and, as I said earlier, it is great that the Government are moving strongly on this and all these matters, particularly skills and many other areas. However, there is still a need for a joined-up strategy and for some of these targets to be in statute. We have learned from the green homes grant, for which one of the issues was the lack of the long-term thinking that a strategy would provide.
The real issue here, as noble Lords have powerfully articulated, is that we have picked all the low-hanging fruit—the decarbonisation of our electricity system, and vehicle and transport electrification—and now we have to move much higher up the tree to more difficult matters, such as the decarbonisation of heat. The noble Lord, Lord Foster, powerfully articulated the challenges in that area. We will have many more discussions on this leading to Report but, with that, I beg leave to withdraw the amendment.
Lord Callanan
“Part 9AEnergy Savings Opportunity SchemesEnergy savings opportunity schemes(1) The Secretary of State may by regulations (“ESOS regulations”) make provision for the establishment and operation of one or more energy savings opportunity schemes.(2) An “energy savings opportunity scheme” is a scheme under which obligations are imposed on undertakings to which the scheme applies for one or more of the ESOS purposes.(3) The ESOS purposes are—(a) enabling or requiring the energy consumption for which an undertaking is responsible, or the greenhouse gas emissions resulting from that consumption, to be assessed, audited, reported and published;(b) enabling or requiring possible energy savings or emissions reductions to be identified and recommended;(c) enabling or requiring the costs and benefits of possible energy savings or emissions reductions to be assessed;(d) encouraging or requiring undertakings to produce plans or set targets for achieving energy savings or emissions reductions;(e) encouraging or requiring undertakings to take action for the purpose of achieving energy savings or emissions reductions;(f) encouraging or requiring undertakings to achieve energy savings or emissions reductions.(4) An energy saving is a reduction in the energy consumption for which an undertaking is responsible.(5) An emissions reduction is a reduction in the greenhouse gas emissions that result from the energy consumption for which an undertaking is responsible (whether or not that consumption is also reduced).(6) ESOS regulations may make provision about determining—(a) the energy consumption for which an undertaking is responsible;(b) the greenhouse gas emissions resulting from that consumption.(7) ESOS regulations may—(a) impose requirements on any person;(b) confer functions on any person;(c) provide for a person to exercise discretion in dealing with any matter.(8) The provision made by this Part is without prejudice to the generality of subsection (1).(9) For the purposes of this Part—(a) the scheme established by the Energy Savings Opportunity Scheme Regulations 2014 (S.I. 2014/1643) is to be treated as having been established by provision made under subsection (1);(b) a reference to a scheme administrator includes a reference to a compliance body within the meaning given by those Regulations.”Member's explanatory statement
This new Clause is the first Clause in a new Part 9A of the Bill (also containing the 12 other new Clauses inserted after Clause 201 by amendments in the name of Lord Callanan) making provision about Energy Savings Opportunity Schemes. The new Clause gives the Secretary of State the power to make regulations about Energy Savings Opportunity Schemes.
Lord Callanan (Con)
My Lords, for the benefit of the noble Lord, Lord Teverson, I have some more government amendments for his delectation. I will also speak to Amendments 200 to 211, 243 and 244, 246 and 247, which all stand in my name.
Amendment 199 introduces a new Part 9A to the Bill which relates to the existing energy savings opportunity scheme, commonly referred to as ESOS. I committed at Second Reading to table these new clauses regarding improvements to ESOS. For those noble Lords who do not know, ESOS is a mandatory energy audit scheme for large organisations, covering their buildings, transport and industrial processes. ESOS provides businesses with cost-effective recommendations on energy efficiency measures. The existing scheme is estimated to lead to £1.6 billion of net benefits to the UK, with the majority of these benefits applying to participating businesses as a result of reduced energy costs.
The power in the amendment would replace the repealed power in the European Communities Act 1972 under which the UK established ESOS in 2014. Without this, ESOS is a frozen scheme and cannot be updated. The changes are aimed at encouraging businesses to take action on recommendations to increase their energy and carbon savings.
Lord Teverson (LD)
Can the Minister clarify: did he say that this Bill revokes that EU legislation? Is that what he just said?
Lord Callanan (Con)
The power in the amendment would replace the repealed power in the European Communities Act 1972, which I presume was repealed after Brexit, or rather the end of the implementation period.
The changes are aimed at encouraging businesses to take action on recommendations to increase their energy and carbon savings. The benefits to existing participating businesses are estimated to be savings of £1.12 billion from 2023 to 2037 through reduced energy bills. The savings would of course help to support businesses to keep the costs of their products and services affordable for consumers.
Amendments 200 to 202 outline some of the details of the ESOS regime and associated powers to make regulations. They include provisions regarding which undertakings ESOS should apply to; provisions regarding when, how and by whom an ESOS assessment should be carried out; and ESOS assessor functions and requirements.
Amendment 203 enables regulations to introduce a requirement for ESOS participants to publish an ESOS action plan covering intended actions to reduce energy use or greenhouse gas emissions. This requirement aims to increase participants’ engagement with ESOS and stimulate greater uptake of energy efficiency measures. Amendment 204 enables regulations to impose requirements for ESOS participants to take actions that directly or indirectly support the reduction of energy use or greenhouse gas emissions.
Amendments 205 to 207, 209 and 210 concern the administration and enforcement of the scheme. They enable regulations to make provisions about the appointment of scheme administrators and their functions, including compliance monitoring and enforcement, provisions on penalties and offences, and rights of appeal. These amendments also enable the Secretary of State to provide financial assistance and to give directions to a scheme administrator, with which it must comply.
Amendment 208 concerns procedures for making regulations. It requires the Secretary of State to consult appropriate persons considered likely to be affected by the regulations and, where provisions relate to devolved matters, the respective devolved Administrations. It describes where affirmative procedure would be required, for example if extending ESOS to smaller businesses, mandating action by ESOS participants or creating offences.
Amendments 211 and 243 define certain terms used in the ESOS provisions, explain where provisions fall within devolved competence and set out the extent of the ESOS provisions to be England and Wales, Scotland and Northern Ireland. Amendments 244 and 246 clarify when the amendments will come into force. Amendment 247 inserts into the Title of the Bill a reference to the new clauses on ESOS, introduced by Amendments 199 to 211. With that, I beg to move Amendment 199 in my name.
Baroness Bennett of Manor Castle (GP)
My Lords, given the hour I will ask one very simple and direct question on government Amendment 210, which is about financial assistance. The second part of it says:
“‘Financial assistance’ means grants, loans, guarantees or indemnities, or any other kind of financial assistance”.
Can the Minister give us any indication of what the Government’s intentions are here? That is a very broad range and we know, for example, how wrong loans have gone in the past and how schemes based on loans have really not worked out. Given what interest rates are now, that is obviously a challenge. To tackle the kind of issues I raised earlier about the most disadvantaged areas having particular problems with the quality of housing, do the Government intend to look towards grant-type schemes?
Lord Callanan (Con)
The clause enables the Secretary of State to provide financial assistance to scheme administrators and ESOS participants. It does not, of course, compel us to do so but we are taking a power to have that option. If we decide to provide financial assistance, I will inform the House accordingly.
Lord Teverson (LD)
My Lords, there was a reason for my question. I absolutely agree that the Minister warned us that we would have these amendments coming down the track, and on ESOS I welcome that fact because it has been a very good scheme. Although companies occasionally bitch about it, as he says, it has caused actual change.
As the Minister will know, being a former MEP and so on, the ESOS scheme at the moment is based on the energy efficiency directive of 2012, which was updated in 2018. It came into force in the UK in 2014 and, as the Government’s website says:
“Government established ESOS to implement Article 8 (4 to 6) of the EU Energy Efficiency Directive (2012/27/EU).”
The reason I asked him for a clarification on his opening statement is that nowhere in his amendments could I see anything that repealed the existing directive or regulations that related to the energy efficiency directive.
Is this a sort of parallel scheme to the one that still exists, or is it still based on the original EU directive? If it is still based or relies upon the original EU directive, what happens if ever the retained EU law revocation Bill becomes a statute? Does all this fall away because it still relies on that EU legislation? If it is a parallel scheme, when does the existing one stop under the EU directive and this one actually start? That is what I am trying to understand. The Minister may well have explained this—forgive me if he has—but I do not get a flavour for what the big difference is between this one and the existing one. What would he see as the big positive change?
My last question is a more general one. I have not counted the non-government amendments that have come forward, yet—despite having on this side, and even part of that side, combined brains the size of a planet, excluding mine—the Government have not seen one amendment worthy of thinking, “Yes, that could be useful and might be something that could improve the Bill.” I just ask the Minister before the end of the year—and I wish him and the Bill team a very enjoyable Christmas and break—why has none of the brainpower on this side has been worth taking notice of in terms of the Bill going forward?
Baroness Blake of Leeds (Lab)
I shall be very brief. There are many aspects of this that are to be welcomed, but I am just intrigued. The Minister mentioned the section on finances. I am concerned about the capacity of the lead assessors and professional bodies to do this work, with particular reference to the intention to expand the scheme to, I think he said, small and medium-sized enterprises. I understood that it was medium-sized: I do not know quite where the definition lies, which would also be interesting. That is a major expansion, and I wonder whether an assessment has been made of how many additional businesses we could be talking about, and how the work is going to be done in those circumstances.
Lord Callanan (Con)
Let me respond first to the final point of the noble Lord, Lord Teverson. He and I know each other well; I have taken a number of Bills through this House, and I think that if he talks to the Official Opposition as well, he will find that I have a reasonable record of listening carefully throughout Committee on Bills and, where I can, within the confines of government policy—he will know how the process works within government—I try to take on board, where possible, the concerns of the Committee. On some Bills, that does mean accepting opposition or Back-Bench amendments directly, and I have done so on a number of occasions.
I am not giving any commitments on some of the amendments we have been debating in this Committee but, as always, I will take careful note of comments, discuss them with the Bill officials and other departments where it is required to do so and, if there are matters on which we can move, then of course we will do so. We will seek to discuss these matters before Report and, as always, I am listening to comments that noble Lords are making and trying to assess the will of the Committee.
ESOS is an important scheme that was originally implemented on the back of the energy efficiency directive, but there were specific parts of it that were UK legislation. We did not directly copy the energy efficiency directive and we will seek to do the same with the new scheme as well. The BEIS Select Committee made recommendations on energy efficiency, including that ESOS should require reports to be made public and should mandate participants to take action to reduce energy review. There was also a post-implementation review of ESOS in 2020, which found that it was largely achieving its original aims and that businesses were unlikely to carry out energy audits unless mandated to do so, but that the scheme could be helpful in producing that. I think that covers most of the points that were discussed and I thank noble Lords for their attention.
Baroness Blake of Leeds (Lab)
The Minister did not respond to my question about the capacity and extent of extending the scheme.
Lord Callanan (Con)
It is not our intention to extend it to small businesses at the moment. We are obviously always concerned about the impact on small businesses in particular but, if these amendments are accepted, we would have the regulation-making powers to extend it to businesses of different sizes. I think it is very unlikely that we would ever extend it to small businesses but that would be the subject of secondary legislation, which would, of course, be debated in the House.
Baroness Blake of Leeds (Lab)
I raised that because I may have misheard what the Minister said in referencing small businesses. I understood that this extended to medium-sized businesses but, even so, that is a significant increase. Have the Government taken on board the additional workload and whether the capacity will be there, assuming that the work is taken on?
Lord Callanan (Con)
We are not proposing to extend it to medium-sized businesses at this stage. We would want to work with stakeholders on the detail of any potential future implementation, which would be subject to a further consultation and, ultimately, a cost-benefit analysis. This is a complicated area and there are a number of different views. We have had a couple of consultations on this. With these amendments, we are taking the powers to implement the scheme. Of course, the regulations would be subject to further debate in the House.
Lord Teverson (LD)
I just want to check something with the Minister. Are we saying that, if the retained EU law Bill became an Act, with its sunset clause of 2023, this scheme would still remain in force and there would be no legal ambiguity about it? Also, I believe that the next deadline for reporting is December 2023. Can I check that this still holds?
Lord Callanan (Con)
The noble Lord is asking for commitments on a different piece of legislation. When that Bill arrives in the House, we will no doubt have a full discussion on it. My understanding is that it is at Report stage in the House of Commons now. The sunset date is still set at 2023 although there are powers in that Bill to exempt particular pieces of legislation and Ministers have the option of extending the sunset date for pieces of retained law that it is not possible to update or review in the short time available. I am sure that we will have a long, involved discussion on the retained EU law Bill when it arrives in the House and that I will get déjà vu from the Brexit withdrawal Act, with many of the same people no doubt making many of the same points they made during that time.
Lord Callanan
“Application of energy savings opportunity schemes(1) ESOS regulations may provide for—(a) an energy savings opportunity scheme to apply to specified descriptions of undertakings;(b) specified descriptions of undertakings to be excluded from the application of the scheme.(2) ESOS regulations may make provision about circumstances in which—(a) two or more participants are to be treated for the purposes of the regulations as if they were a single participant;(b) an obligation imposed under the regulations on one participant is to be treated as if it had been imposed on a different participant.(3) The provisions of this Part relating to energy consumption apply to energy consumed by assets located, or activities carried on—(a) wholly or partly in the United Kingdom;(b) wholly or partly in an offshore area;(c) where subsection (4) applies, elsewhere.(4) ESOS regulations may make provision about circumstances in which the energy consumption for which a participant is, for the purposes of the regulations, responsible may include energy consumed by—(a) assets located elsewhere than in the United Kingdom or an offshore area, or(b) activities carried on elsewhere than in the United Kingdom or an offshore area.(5) The provisions of this Part relating to greenhouse gas emissions apply to the emissions resulting from energy consumption to which this Part applies whether such emissions occur in the United Kingdom, in an offshore area or elsewhere.(6) ESOS regulations may make provision about the attribution of energy consumption to participants, including in particular provision about the treatment for the purposes of the regulations of—(a) a participant’s consumption of energy generated by that participant;(b) energy consumption by a person over whom a participant has control or influence;(c) energy consumption shared between a participant and one or more other participants or other persons;(d) energy consumed by assets held on trust by or for a participant.(7) In this section, “offshore area” means—(a) waters landward of the seaward limit of the territorial sea adjacent to the United Kingdom,(b) any designated area within the meaning of section 1(7) of the Continental Shelf Act 1964, and(c) any area for the time being designated under section 41(3) of the Marine and Coastal Access Act 2009,and includes the places above those areas and the bed and subsoil of the sea within those areas.”Member's explanatory statement
This new Clause makes provision about the application of regulations made under the first of the new Clauses in the name of Lord Callanan inserted after Clause 201.
“Requirement for assessment of energy consumption(1) ESOS regulations may require the carrying out of assessments of—(a) a participant’s energy consumption;(b) the greenhouse gas emissions resulting from that consumption.Such an assessment is referred to as an “ESOS assessment”.(2) The provision that may be made by virtue of subsection (1) includes in particular provision about—(a) the frequency of ESOS assessments;(b) the period or periods to which assessments must relate;(c) how assessments are to be carried out;(d) the information that must be provided or obtained for the purposes of an assessment;(e) the matters that must be taken into account in an assessment;(f) record-keeping in relation to an assessment.(3) ESOS regulations may make provision requiring an ESOS assessment, or specified parts of an ESOS assessment, to be carried out, approved or audited by a person appointed by a participant (referred to as “an assessor”).(4) Regulations made by virtue of subsection (1) may include provision enabling or requiring an ESOS assessment to include recommendations relating to energy savings or emissions reductions.(5) The provision that may be made by virtue of subsection (4) includes in particular provision about—(a) the matters about which recommendations may, must, or must not be made;(b) the matters that must be taken into account in making a recommendation;(c) the carrying out of a cost-benefit analysis before including a recommendation in a report.(6) “Cost-benefit analysis”, in relation to a recommendation or requirement to take action, means—(a) an estimate of the likely costs to a participant of acting in accordance with the recommendation or requirement;(b) an estimate of the energy savings or emissions reductions likely to result from such action;(c) an analysis of the costs referred to in paragraph (a) together with an analysis of the savings or reductions referred to in paragraph (b) and of any other benefits likely to arise.(7) ESOS regulations may make provision about the reporting of ESOS assessments, including in particular provision—(a) about the production of written reports;(b) about the form and content of such reports;(c) about the dissemination of such reports within an undertaking and between related undertakings.(8) ESOS regulations may make provision requiring a participant to notify a scheme administrator of specified matters relating to the participant’s compliance with requirements imposed by virtue of this section and may in particular include provision—(a) about the procedure for giving such notice;(b) about the form and content of notices;(c) about the publication of certain information contained within a notice;(d) requiring a participant to justify its choice of assessor.(9) ESOS regulations may provide for any requirement imposed by virtue of subsection (1)—(a) to be treated as having been complied with by a participant in specified circumstances, or(b) not to apply to a participant in specified circumstances.”Member's explanatory statement
This new Clause enables regulations made under the first of the new Clauses in the name of Lord Callanan inserted after Clause 201 to make provision about the assessment of the energy consumption of participants in an energy savings opportunity scheme and of the greenhouse gas emissions resulting from that consumption.
“Assessors(1) ESOS regulations may confer functions on an assessor in relation to assessing, monitoring and reporting on compliance with requirements imposed by the regulations.(2) ESOS regulations may provide that a participant may only appoint as an assessor a person of a specified description.(3) A description may be specified for the purposes of subsection (2) by reference to any criteria, including by reference to—(a) a person’s competence, qualifications or experience;(b) a person’s inclusion in a designated list or register;(c) a person’s membership of a designated body;(d) a person’s participation in an designated accreditation scheme;(e) a person’s relationship to a participant.(4) For the purposes of this section, “designated” means designated by the Secretary of State or a scheme administrator in accordance with ESOS regulations.(5) A body may only be designated for the purposes of this section if the body is willing to be so designated.(6) ESOS regulations may make provision about—(a) the giving of designations for the purposes of subsection (4);(b) reviewing such designations;(c) circumstances in which such a designation may be removed;(d) maintaining and publishing a list of such designations.(7) ESOS regulations may make provision enabling a list or register of persons who may, or who may not, be appointed as an assessor for the purposes of subsection (2) to be maintained by—(a) a designated body;(b) a scheme administrator;(c) the Secretary of State.(8) ESOS regulations may confer functions or impose requirements on a person responsible for maintaining a designated list or register and may in particular include provision—(a) about the process for including a person in a list or register;(b) about the details to be included in a list or register;(c) for ensuring those details remain up to date;(d) about the publication of a list or register;(e) for the purpose of ensuring that a person included in a list or register continues to meet the criteria for appointment as an assessor;(f) for the purpose of ensuring the quality of ESOS assessments;(g) about the temporary or permanent removal of a person from a list or register in specified circumstances.(9) The regulations may make provision authorising a scheme administrator to share reports, notices or other information relating to an energy savings opportunity scheme with a designated body for the purposes referred to in subsection (8)(e) or (f).(10) ESOS regulations may make provision—(a) enabling the Secretary of State or a scheme administrator to give a direction relating to the maintenance of a list or register;(b) requiring a person responsible for maintaining a list or register to comply with such a direction.”Member's explanatory statement
This new Clause enables regulations made under the first of the new Clauses in the name of Lord Callanan inserted after Clause 201 to make provision about the persons who may be required to carry out, approve or audit some or all of an assessment carried out for the purposes of an energy savings opportunity scheme; and about the maintenance of lists of persons who may be appointed for those purposes.
“ESOS action plans(1) ESOS regulations may require participants to produce ESOS action plans.(2) An “ESOS action plan” is a written statement of—(a) any action a participant proposes to take for the purpose of achieving energy savings or emissions reductions;(b) any energy savings or emissions reductions targets a participant intends to achieve.(3) Where an ESOS action plan does not include any proposals for taking such action or any such targets, provision made by virtue of subsection (1) may require that a participant include an explanation in the plan.(4) ESOS regulations may make provision about the production of ESOS action plans, including in particular provision about—(a) when a participant must produce a plan;(b) the period to which a plan must relate;(c) the form and content of a plan;(d) the matters that must be taken into account in producing a plan.(5) ESOS regulations may make provision about the publication of ESOS action plans.”Member's explanatory statement
This new Clause enables regulations made under the first of the new Clauses in the name of Lord Callanan inserted after Clause 201 to make provision about action plans for achieving energy savings or emissions reductions.
“Action to achieve energy savings or emissions reductions(1) ESOS regulations may make provision—(a) imposing requirements (other than the requirements referred to in paragraph (b)) on participants so as to encourage them to—(i) take specified action for the purpose of achieving energy savings or emissions reductions, or(ii) achieve specified energy savings or emissions reductions, or(b) requiring participants to—(i) take specified action for the purpose of achieving energy savings or emissions reductions, or(ii) achieve specified energy savings or emissions reductions.(2) The kinds of action that may be specified for the purposes of subsection (1) are—(a) taking action in accordance with a recommendation made in an ESOS assessment;(b) taking action in accordance with an ESOS action plan;(c) taking any other action of a specified kind;(d) taking action to achieve a target included in an ESOS action plan;(e) taking action to achieve any other specified outcome;(f) adopting processes, practices or systems of a specified kind;(g) conforming to specified standards.(3) The provision that may be made by virtue of subsection (1)(a) includes in particular—(a) provision requiring a participant to report—(i) on whether the participant has taken the specified action, or on the steps taken by the participant towards doing so, or(ii) on whether the participant has achieved the specified energy savings or emissions reductions, or on the progress made by the participant towards doing so;(b) provision requiring a participant to provide an explanation for any of the matters mentioned in paragraph (a).(4) Provision made by virtue of subsection (1)(b) may include a requirement for a participant to report on action taken or energy savings or emissions reductions achieved.(5) Regulations made by virtue of subsection (1) may make provision—(a) requiring participants to produce and retain evidence;(b) about the verification of matters about which the participant has reported;(c) about the publication of reports.(6) ESOS regulations may—(a) specify the requirements imposed on a participant by virtue of subsection (1) by reference to a cost-benefit analysis;(b) specify circumstances in which a participant is required to take action;(c) impose a requirement to take a specified action on all participants in an energy savings opportunity scheme, or on all participants of a specified description.”Member's explanatory statement
This new Clause enables regulations made under the first of the new Clauses in the name of Lord Callanan inserted after Clause 201 to require, or to impose requirements to encourage, participants in an energy savings opportunity scheme to achieve energy savings or emissions reductions.
“Scheme administration(1) ESOS regulations may appoint one or more public authorities to carry out functions with respect to—(a) administering an energy savings opportunity scheme;(b) monitoring compliance with, and enforcing requirements imposed by, the regulations.(2) A person appointed by virtue of subsection (1) is referred to as a “scheme administrator”.(3) The regulations may make provision for a scheme administrator to authorise another person to exercise specified functions of the scheme administrator.(4) Regulations made by virtue of subsection (1) may in particular include provision about—(a) the obtaining of information by, and the provision of information to, a scheme administrator;(b) the determination by a scheme administrator of information in default of its being provided;(c) the auditing and verification of information;(d) the keeping, production and inspection of records;(e) the determination by a scheme administrator of whether an undertaking is a participant in an energy savings opportunity scheme;(f) cooperation and information sharing between scheme administrators.(5) ESOS regulations may make provision imposing requirements on a participant relating to the provision of such facilities and services, including transport and accommodation, as may be necessary to facilitate the carrying out of any of the scheme administrator’s functions.(6) ESOS regulations may confer functions on a scheme administrator in relation to the publication of information relating to an energy savings opportunity scheme or its participants.(7) ESOS regulations may make provision—(a) about the giving of guidance by a scheme administrator or the Secretary of State in connection with the operation of an energy savings opportunity scheme;(b) requiring specified persons to have regard to such guidance.(8) ESOS regulations may make provision requiring the payment by participants to the scheme administrator of fees for or in connection with the carrying out by the scheme administrator of the scheme administrator’s functions.(9) ESOS regulations may confer a power on a national authority to require a scheme administrator to provide the authority with such information—(a) relating to an energy savings opportunity scheme, and(b) relevant to the exercise of the authority’s functions,as the authority requests.(10) In this section—“national authority” means—(a) the Secretary of State;(b) the Welsh Ministers;(c) the Scottish Ministers;(d) the Department for the Economy in Northern Ireland;“public authority” means a person with functions of a public nature.”Member's explanatory statement
This new Clause enables regulations made under the first of the new Clauses in the name of Lord Callanan inserted after Clause 201 to make provision about the administration of energy savings opportunity schemes.
“Enforcement, penalties and offences(1) ESOS regulations may authorise a scheme administrator—(a) to require the production of documents or the provision of information by any person;(b) to question the officers of an undertaking;(c) to enter premises with a warrant;(d) to inspect premises and anything on premises and when doing so—(i) to take measurements, photographs, recordings or copies;(ii) to seize documents or records;(iii) to require any person at the premises to provide facilities and assistance to the extent that is within that person’s control;(e) to issue a notice requiring a participant to take steps specified in the notice for the purpose of—(i) demonstrating compliance with requirements imposed by or under ESOS regulations, or(ii) remedying a failure to comply with such requirements.(2) ESOS regulations may make provision requiring a participant to give notice to a scheme administrator where the participant is unlikely to comply, or has failed to comply, with a requirement imposed by or under the regulations.(3) ESOS regulations may provide that a person is liable to one or more penalties in respect of—(a) a failure to comply with a requirement imposed on the person by or under the regulations;(b) making a false or misleading statement in connection with an energy savings opportunity scheme.(4) The provision that may be made by virtue of subsection (3) includes provision—(a) for the publication of specified information relating to the failure to comply;(b) authorising a scheme administrator to impose a financial penalty.(5) Where by virtue of subsection (3) ESOS regulations provide for the imposition of a financial penalty, the regulations—(a) must provide for the penalty to be paid to the scheme administrator or such other person as the regulations may specify;(b) may specify the amount of the penalty or provide for the amount to be determined by the scheme administrator in accordance with the regulations;(c) may provide for the payment of a further penalty (of an amount specified by or determined in accordance with the regulations) for each day on which the failure to comply is not remedied;(d) may specify how the penalty may be recovered.(6) ESOS regulations may create offences relating to energy savings opportunity schemes.(7) Regulations made by virtue of subsection (6) may provide for an offence created by the regulations to be triable—(a) only summarily, or(b) either summarily or on indictment.(8) Regulations made by virtue of subsection (6) may provide for an offence created by the regulations to be punishable with a fine.(9) Regulations may—(a) provide for defences against offences;(b) make provision about matters of procedure and evidence in proceedings relating to offences;(c) include provision about the liability of a director, manager, secretary or other officer of a body corporate, or a partner of a Scottish partnership, or of a person purporting to act in such a capacity, where an offence under the regulations—(i) is committed with the consent or connivance of such a person, or(ii) is attributable to neglect on the part of such a person.(10) References in this section to a scheme administrator include references to a person authorised by a scheme administrator in accordance with provision in ESOS regulations made by virtue of section (Scheme administration)(3).”Member's explanatory statement
This new Clause enables regulations made under the first of the new Clauses in the name of Lord Callanan inserted after Clause 201 to make provision for the enforcement of those regulations.
“Appeals(1) ESOS regulations may confer rights of appeal against—(a) decisions made in relation to an energy savings opportunity scheme, and(b) penalties imposed or enforcement action taken for failure to comply with the requirements of the regulations.(2) The regulations must specify the court, tribunal or person who is to hear and determine an appeal.(3) The provision that may be made by virtue of subsection (1) includes, in particular, provision about—(a) the grounds on which an appeal may be made;(b) the procedure for making an appeal (including any fee which may be payable);(c) suspending the effect of any decision, penalty or enforcement action pending determination of the appeal;(d) the powers of the court, tribunal or person to which an appeal is made.”Member's explanatory statement
This new Clause enables regulations made under the first of the new Clauses in the name of Lord Callanan inserted after Clause 201 to make provision about appeals.
“ESOS regulations: procedure etc(1) Before making ESOS regulations, the Secretary of State must consult—(a) such persons likely to be affected by the regulations as the Secretary of State considers appropriate;(b) to the extent that the regulations contain provision within Welsh devolved competence, the Welsh Ministers;(c) to the extent that the regulations contain provision within Scottish devolved competence, the Scottish Ministers;(d) to the extent that the regulations contain provision within Northern Ireland devolved competence, the Department for the Economy in Northern Ireland.(2) Subsection (1) may be satisfied by consultation before this section comes into force (as well as by consultation after that time).(3) ESOS regulations may make consequential provision including provision amending or repealing primary legislation.(4) ESOS regulations may create exceptions to any requirement imposed by the regulations.(5) ESOS regulations may—(a) make provision about application to the Crown;(b) to the extent that they bind the Crown, restrict or modify the application of the regulations.(6) ESOS regulations containing any of the following (with or without other provision) are subject to the affirmative procedure—(a) provision extending the descriptions of undertaking to which the regulations apply;(b) provision made by virtue of section (Action to achieve energy savings or emissions reductions)(1)(b) of a kind not previously provided for in ESOS regulations;(c) provision conferring on a scheme administrator enforcement powers of a kind not previously provided for in ESOS regulations;(d) provision creating penalties;(e) provision increasing the amount of financial penalties by more than is necessary to reflect changes in the value of money;(f) provision creating an offence or increasing the fine for an existing offence;(g) provision for the payment of a new fee;(h) provision amending or repealing primary legislation.(7) Any other ESOS regulations are subject to the negative procedure.(8) In this section,“primary legislation” means—(a) an Act,(b) an Act of the Scottish Parliament,(c) a Measure or Act of Senedd Cymru, or(d) Northern Ireland legislation.”Member's explanatory statement
This new Clause makes provision about the procedure for making regulations about Energy Savings Opportunity Schemes under the first of the new Clauses in the name of Lord Callanan inserted after Clause 201.
“Directions to scheme administrators(1) The Secretary of State may give directions to a scheme administrator.(2) The power to give directions under this section includes a power to vary or revoke the directions.(3) A scheme administrator must comply with any direction given to it under this section.”Member's explanatory statement
This new Clause enables the Secretary of State to give directions to a scheme administrator under an Energy Savings Opportunity Scheme.
“Financial assistance to scheme administrators and participants(1) The Secretary of State may give, or arrange for the giving of, financial assistance to—(a) scheme administrators;(b) participants.(2) “Financial assistance” means grants, loans, guarantees or indemnities, or any other kind of financial assistance.(3) Financial assistance under this section may be given subject to such conditions as may be determined by, or in accordance with arrangements made by, the Secretary of State.”Member's explanatory statement
This new Clause enables the Secretary of State to provide financial assistance to scheme administrators under, and participants in, an Energy Savings Opportunity Scheme.
“Interpretation(1) In this Part—“assessor” has the meaning given by section (Requirement for assessment of energy consumption)(3);“cost benefit analysis” has the meaning given by section (Requirement for assessment of energy consumption)(6);“emissions reduction” has the meaning given by section (Energy savings opportunity schemes)(5);“energy consumption” has the meaning given by ESOS regulations;“energy saving” has the meaning given by section (Energy savings opportunity schemes)(4);“energy savings opportunity scheme” has the meaning given by section (Energy savings opportunity schemes)(2);“ESOS action plan” has the meaning given by section (ESOS action plans)(2);“ESOS assessment” has the meaning given by section (Requirement for assessment of energy consumption)(1);“ESOS regulations” means regulations made under section (Energy savings opportunity schemes)(1);“greenhouse gas” has the meaning given by section 92 of the Climate Change Act 2008;“participant” means an undertaking to which an energy savings opportunity scheme applies;“related undertaking” , in relation to a participant, means a fellow subsidiary undertaking of, or a group undertaking in relation to, that participant;“scheme administrator” has the meaning given by section (Scheme administration)(2);“specified” means specified in ESOS regulations;“undertaking” , “group undertaking” and “fellow subsidiary undertaking” have the meanings given by section 1161 of the Companies Act 2006.(2) For the purposes of this Part, provision—(a) is within Welsh devolved competence if it would be within the legislative competence of Senedd Cymru if it were contained in an Act of the Senedd (ignoring any requirement for the consent of a Minister of the Crown imposed under Schedule 7B to the Government of Wales Act 2006);(b) is within Scottish devolved competence if it would be within the legislative competence of the Scottish Parliament if it were contained in an Act of that Parliament;(c) is within Northern Ireland devolved competence if that provision—(i) would be within the legislative competence of the Northern Ireland Assembly if it were contained in an Act of that Assembly, and(ii) would not, if it were contained in a Bill in the Northern Ireland Assembly, result in the Bill requiring the consent of the Secretary of State under section 8 of the Northern Ireland Act 1998.”Member's explanatory statement
This new Clause makes provision about the interpretation of the new Clauses in the name of Lord Callanan to be inserted as a new Part 9A after Clause 201.
House of Lords
Introduction: Lord Verdirame
Introduction: Lord Watson of Wyre Forest
Hospital Beds: Social Care
(2 years ago)
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The Parliamentary Under-Secretary of State, Department of Health and Social Care (Lord Markham) (Con)
There are around 13,000 people in hospital who do not meet the clinical criteria to reside, including, but not limited to, people waiting to go home and people awaiting access to residential care. We constantly look to reduce these delayed discharges to ease flow in the system, and we have provided a £500 million discharge fund to support people to be discharged at the right time, to the right place and with the right support.
Lord Dubs (Lab)
My Lords, I am grateful to the Minister for answering the Question. Does he understand that many of us will think it is a complete disgrace that, for a long time now, hospital beds have been blocked by people who could be discharged into the community or residential care? These people would be better off and have a decent quality of life. Should we not be making this a high priority, instead of saying that we are planning to do this? We have heard that for so long.
Lord Markham (Con)
It absolutely is a high priority. Noble Lords have heard me say many times that the key to the whole system is flow through the system, to relieve times in A&E and ambulance wait times. That flow depends on us discharging the 13% of beds that are currently held up. That is why we put the £500 million discharge fund in place and will put £2.8 billion of funding next year, and £4.7 billion the year after, to solve exactly this problem.
Baroness Berridge (Con)
My Lords, I currently serve on the Joint Committee that is scrutinising the mental health Bill. Could my noble friend the Minister outline whether that 13,000 includes those who are perhaps in secure mental health beds, awaiting discharge? That of course causes backlogs, and not only into A&E: currently, some of those people could be being held in a police cell, which is not an ideal place if you need admission for assessment to a mental health bed.
Lord Markham (Con)
I will happily write on the detail, but, yes, it includes everyone who could be provided a space, either in a care home or a mental health home, and those who are fit to go home but need domiciliary care.
Baroness Brinton (LD)
My Lords, Our Plan for Patients, which was published at the end of September, says:
“This winter, the NHS will open up the equivalent of 7,000 beds so that every hospital has space to see and treat patients more quickly.”
Winter is clearly here, so how many of those virtual beds are in operation now?
Lord Markham (Con)
I thank the noble Baroness. She is absolutely right that the target of 7,000 beds is a key part of this. All Ministers have been talking about it with every ICB over the last few days to see exactly where they are on the target for both real beds and virtual beds. I will happily provide exact information on the target, but I know that we are making good progress.
Baroness Merron (Lab)
My Lords, an estimated one in four hospital beds is occupied by people living with dementia. Many of the admissions would have been avoidable if they had had better community support. Of course, their stay in hospital is typically twice as long as those of other people who are over the age of 65. Does the Minister acknowledge that those dementia patients need to be discharged to a place of their own, or their carer’s, choosing, after a holistic assessment? What steps are the Government taking to ensure that this happens, so that people with dementia do not experience discharges that are inappropriate and unsafe?
Lord Markham (Con)
I thank the noble Baroness. We are all seeing different shapes and forms of describing how we need a local care system set up by the integrated care boards that can have an overview of all the needs in their area. That is exactly what we are doing, and exactly what the Patricia Hewitt review is reviewing. It will give advice on how best to do that by looking at the best needs of mental health care patients, or any other kind of patient, to make sure that the proper institutions and places are set up to give them the up-front support so that, as the noble Baroness said, they never need to go to hospital in the first place.
Lord Patel (CB)
My Lords, while recognising the current problems caused by bed blockages in NHS hospitals due to capacity and social care issues, does the Minister agree with the report from the Health Foundation, which, looking ahead, suggests that, because of changing demography and disease patterns in future, we will require between 25,000 and 40,000 more beds in the NHS if we are going to cope with the pressures on both the NHS and social care? What plans do the Government have to address that?
Lord Markham (Con)
We are absolutely aware that we need long-term plans and forecasts. That is also one of the things that the healthcare workforce plan will take into account: it will look at exactly where the capacity needs to be on a regional basis going forward so that we have the right number of hospital beds and social care places for an elderly and growing demographic in terms of age groups.
Lord Turnberg (Lab)
My Lords, is it not the case that patients are stuck in hospital because social care staff are leaving in droves? They are leaving because they are not respected, not given a career and not paid sufficiently. Should we not be doing something about retaining these vital social care staff?
Lord Markham (Con)
The number of care workers is key to all this and I delighted to say that the latest data shows that we are back to the levels of April 2021. Too many people have left, but we have managed to fill the gaps with the international recruitment fund and other measures. We all agree that we need to progress that further, but we are now making the increases that are needed in this space.
The Lord Bishop of London
My Lords, we have heard how important a sustainable workforce is, both in social care and healthcare. Can the Minister tell us what the Government are doing to listen to the concerns of health and social care workers about patient safety and their own working conditions at this time?
Lord Markham (Con)
Clearly, if we are going to retain and recruit the key staff in this area, it has got to be a good career, and that means that we must listen to their concerns. I know that Minister Whately is talking to and visiting them all, so it is a key part of the plan. As I say, the fact that we are managing to grow the workforce again shows, I think, that we getting on top of it—but absolutely we need to keep close and make sure it is a good place to work.
Lord Kirkhope of Harrogate (Con)
Does my noble friend agree that there are main concerns in some hospitals that dialysis patients are having to be retained in hospital over the Christmas period because of their deep concerns about transport arrangements, partly through the threatened ambulance strikes but also in other ways? Is this not another problem with regard to the bed blocking that we are looking at at the moment?
Lord Markham (Con)
The best hospital trusts I have seen have got that absolutely organised. We see a difference in different trusts between as low as 6% bed blocking for social care and over 30%. That depends somewhat on local demography and the amount of care homes, but also on how quickly they can arrange transport, and that is what the best ones are doing, so that cases such as the ones brought up by my noble friend do not exist.
Lord Laming (CB)
My Lords, the report from the Adult Social Care Committee that was published just a few days ago—which I commend most warmly to the Minister—highlights that in the past 10 years there has been a 29% real-terms reduction in local government spending power. This is despite the increase in the population during that period. Can the Minister assure the House that the Government are taking seriously the reality of life in social care?
Lord Markham (Con)
I thank the noble Lord. Yes, we are, and I think that is shown by the investment we are putting into place. As I say, that will be up to £2.8 billion next year and up to £4.7 billion the year after, which will be a 22% increase. That shows that we are very serious about this.
Baroness Tyler of Enfield (LD)
My Lords, we have already heard about the crisis in the social care workforce. NHS leaders are calling on the Government to introduce a new national minimum care worker wage of at least £10.50 an hour to stem the flow of social care staff to other sectors. Can the Minister say what plans they have to introduce such a minimum wage, which could hardly be said to be stoking inflation at that level?
Lord Markham (Con)
Of course, the noble Baroness is aware that it is the third parties, whether it be the local authorities or the private sector, that employ them. But what we have done in terms of setting the national living wage, which I believe is around that amount, is exactly making sure that there is a minimum amount that these people can get. About 65% of the funding going into the system goes through to wages, so the £2.8 billion increase next year will flow largely into wages and salaries.
Baroness Pitkeathley (Lab)
Every one of the interventions we hear about points to the inadequacy of the social care system and every one of the interventions that the Minister makes, however well intentioned—and I do not dispute that they are well intentioned—concerns piecemeal reforms. Will the Government ever accept that the only thing that is going to solve this ongoing problem, which is only going to get worse, is a wholesale reform of the social care system?
Lord Markham (Con)
There are a lot of questions that we need to answer in this space—I absolutely accept that—and lots of things that need long-term thought. I think and hope that noble Lords are starting to see that thinking emerge. A lot more needs to be done at the moment, but I think that we accept that this is a long-term issue that needs to be resolved with help from all sides of the House.
Prime Minister: Trade Unions
(2 years ago)
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Lord Balfe
To ask His Majesty’s Government what plans the Prime Minister has to meet representatives of the Trades Union Congress, as well as individual trade unions, in the light of the current economic situation.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
The Department for Business, Energy and Industrial Strategy is responsible for labour relations and works closely with trade unions. Engagement is essential to developing and delivering our policies, and during the pandemic it helped to support jobs and to keep workers safe. For example, the unions and business worked together to help deliver a package of economic support through the job retention scheme that has protected millions of jobs.
Lord Balfe (Con)
My Lords, can the Minister request his colleagues to make clear what the basis is for the Government’s current policy, which comes across as rather dismissive and uncaring in view of the rapid rise of inflation? Can I ask him to encourage the Government, in view of the sharp rise in inflation since the last pay review body reports, to ask the pay review bodies to reconvene and bring forward in January proposals for an interim settlement that takes account of the recent rapid rise in inflation and of staffing levels, such as the 600-midwife shortfall reported to me by the Royal College of Midwives this morning?
Lord Callanan (Con)
I thank my noble friend for that question but, as he knows, the Government have said that they will accept the recommendations from the independent pay review bodies in full. We certainly hope that the trade unions will call off the actions that are causing so much misery to billions of people all over the country.
Lord Woodley (Lab)
As the former leader of Unite the Union, let me tell noble Lords that no worker wants to go out on strike, as it costs them wages that they can least afford to lose. But workers, such as our marvellous nurses and others, are being driven to despair and desperation; their must-go place before Christmas is the local food bank, unfortunately. Pay the nurses and other public servants proper wages covering inflation that is not of their making, and stop hiding behind the farcical and outdated review body’s recommendations. It is corporate profiteering that is driving inflation. Does the Minister agree?
Lord Callanan (Con)
It will not surprise the noble Lord to know that I do not agree with him. The reason we have independent pay review bodies is to try to take the politics out of these settlements. The Government have said that we will accept those recommendations in full. Frankly, some of the increases that are being asked for are unaffordable.
Lord Fox (LD)
My Lords, over the weekend several senior government spokespeople have justified not increasing the offer on public sector pay because it would fuel inflation. I believe that the Minister here is more economically literate than those spokesmen, because he knows well that public sector pay does not fuel inflation, neither is it driving private sector pay—you have only to look at the discontinuity now. Will the Minister please disabuse his colleagues of this specious argument? Will he urge them to sit down with the nurses and settle this dispute?
Lord Callanan (Con)
Of course we want to see the action ended and the dispute brought to an end, but it remains the case that, if above-inflation pay rises are accepted, that will mean less money for the services that everybody wants to see expanded. There is a limited pot of money that can go only so far.
Lord Hunt of Kings Heath (Lab)
My Lords, at some point the Government are going to have to find a way out. The Minister’s noble friend has suggested a very elegant way—by asking the review body to review the evidence. Would he confirm that the report of the review body for nurses came out in July, based on evidence submitted three months before? Surely there is a unique case here to ask the review body to look again.
Lord Callanan (Con)
I understand the point that the noble Lord is making but the problem is that, once you make an exception for one group, I imagine that lots of other deserving groups will also want exceptions made for them. Pretty soon, the exception becomes the rule. We are sticking to the position that we asked the pay review bodies to look at the appropriate level of remuneration; they have done so and we have accepted their recommendation.
Lord Hamilton of Epsom (Con)
My Lords, is it not true that, in the National Health Service, there are many different grades that nurses can achieve? They can go on doing the same job but be promoted up the grades and get more pay.
Lord Callanan (Con)
I am not overly familiar with the pay grades in the National Health Service—perhaps my noble friend Lord Markham could have answered that on the previous Question better than me.
Baroness Jones of Moulsecoomb (GP)
My Lords, is the Minister aware that the Government have lost the public opinion battle? Nobody believes that the independent pay review is independent or the Government’s figures about how much it will cost per household. The Government frittered away billions on the PPE scandal, so people just do not believe them any more. Will the Minister accept that it is time to sit down and talk money with nurses, posties and railway workers?
Lord Callanan (Con)
It is very easy for Opposition Members to say that we should grant this and that pay rise, but only a limited number can be funded. The noble Baroness talks about PPE; I seem to remember that, when we had these debates in the House at the time, the Opposition Benches were united in telling us that we needed to procure more of it as quickly as possible and not let other things get in the way of delivering essential PPE for our health service professionals. That is what we did.
Lord Morris of Aberavon (Lab)
My Lords, does not the independent report predate a further surge in inflation? What do the Government consider to be appropriate to deal with that further surge?
Lord Callanan (Con)
I am not familiar with the details of the negotiations. I can tell the noble and learned Lord only that the Government have accepted in full the recommendations of the pay review body. I assume that, when it reports again next year, it will take account of the inflation that has taken place this year.
Lord Watts (Lab)
My Lords, do the Government understand that this pay review body made its award when there was low inflation? Inflation is now at 10% or higher. Is it not time that we asked it to look at this again and give a fair offer? It might not be above inflation, but it would be a lot fairer than the one being offered.
Lord Callanan (Con)
No matter how many times Opposition Members ask the same question, they will get the same answer. We have accepted the recommendation from the pay review body. The next step is that another pay review body will presumably look at the issue again next year and take account of the impact of inflation and workforce patterns on availability and recruitment, et cetera, for this year. That is the appropriate time to do it.
Lord Monks (Lab)
My Lords, during the recent crisis, the mood of the nation was clearly that we were all in it together and people observed common rules—with a few exceptions in Downing Street and Barnard Castle. However, that is not the public mood in the current cost of living crisis; the mood is much more divisive, and the burden is falling almost totally on public servants. Is this not a recipe for strikes and for key workers leaving the essential services on which we all depend? Will the Government adjust their position and discuss with the TUC and relevant unions how we can recreate that mood of being in it together, come through this crisis and put an end to the damaging disruption?
Lord Callanan (Con)
We sit down with the TUC and others to discuss these matters, and we worked together during the pandemic. I remind the noble Lord that the TUC does not represent all workers; 75% of workers in this country are not in trade unions.
Lord Dobbs (Con)
Does my noble friend agree that it is very difficult to imagine, and in some cases to remember, what it is like as a family to look towards Christmas not knowing how you will meet your responsibilities? Does that not put a particular cast on the current rail strike, which is aimed not at fat cats but at the young, the weak, the sick and, in particular, old people—grandparents who want nothing more than to get home and join their families for Christmas? Does he agree that the rail strike is looking less like a normal industrial dispute and more like one man’s ego trip?
Lord Callanan (Con)
My noble friend makes an important point. It is almost as if the rail unions, in particular, are seeking to punish the public at this difficult time and exploit the monopoly position that they have to make life as difficult as possible for people wanting to join their friends and family for Christmas. It is appalling behaviour.
Lord Lennie (Lab)
My Lords, on Tuesday the UK quarter 3 growth figures will be published. They are expected to show that the economy has contracted by 0.2%, as well as real falls in household disposable income as wage increases fail to match inflation. These pressures on working people will have a severe impact, with families already cutting back on food and heat. What discussions have the Government had with the trade unions on policy options which will give families the support they will need to get through the crisis in the winter months?
Lord Callanan (Con)
We have given extensive levels of support. We are spending tens of billions of pounds on direct support to households over the winter on energy bills, cost of living payments, et cetera. This Government have an excellent record of standing by people, both in the pandemic and since then. We all know it is a difficult time; public expenditure is tight and, if what the noble Lord says is true and the economy has contracted, then there is even less money to go around because tax receipts will collapse as well. We have to keep all of these matters under consideration. We will stand by families as much as we can, and I think our record proves that.
Military Personnel: Strike Action Cover
(2 years ago)
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Lord Robathan
To ask His Majesty’s Government what assessment they have made of the deployment of military personnel over Christmas to replace Border Force staff, ambulance drivers, and other public sector workers taking industrial action; and what plans they have to give those military personnel additional pay.
The Minister of State, Ministry of Defence (Baroness Goldie) (Con)
My Lords, defence always ensures that military assistance to civil authorities does not incur unacceptable impacts to defence outputs. Any request for military support is governed by the military aid to civil authorities, or MACA, principles. These set out that military support is to be called on only when aid from elsewhere in government or from the commercial sector is not available. The issue of additional pay is under consideration and is being explored with the Treasury.
Lord Robathan (Con)
My Lords, it is the role of the Armed Forces to defend and support this country and its people in difficult times, including times like this. Many of us will remember the serried ranks of Green Goddesses parked up in 1977-78 under the Callahan Government, when they were fighting the firemen’s strike. That is absolutely fine. However, while the Government praise the Armed Forces so often, not only are we cutting numbers but we are not paying them sufficiently—and we have just been discussing public sector pay. Kipling’s Tommy Atkins springs to mind: you might rephrase it as “Saviour of the Government when the unions go on strike”. The people who are going to be working over Christmas are probably paid a lot less than those who are on strike and whom they are replacing—and, by the way, they do not get overtime in the Armed Forces. Will the Minister ensure that every soldier, sailor or airman who works, say, five or six days over the holiday period is given extra-duty pay, which I say should be in the region of £1,500 a head?
Baroness Goldie (Con)
I can reassure my noble friend that the Ministry of Defence is acutely conscious of the sacrifice our Armed Forces are making this winter to ensure the smooth running of essential public services amid widespread industrial action. As he may be aware, arrangements already exist to compensate Armed Forces personnel for short-notice disruption and the changing of leave arrangements, because that is not uncommon. They are compensated for it as a part of the military X-factor that they receive in their pay, and a number of other benefits have been given to our Armed Forces personnel. However, I have great sympathy with the point made my noble friend, and decisions are currently under consideration by the Government, although none have yet been made.
Lord Reid of Cardowan (Lab)
My Lords, I welcome the announcement that consideration will be given to additional payments for members of the Armed Forces. At a time when there is widespread—and potentially even more widespread—industrial action, and the British Army is at its lowest since the Napoleonic wars, will the Minister weigh heavily on the words of the Chief of the Defence Staff, who said that we should not fall into a practice of regarding the Armed Forces as surplus labour to cover every contingency? In that context, will she—as someone who I know has the respect of the Armed Forces—distance herself from the comments this morning from Jacob Rees-Mogg, paraphrased in the Daily Mail as telling the Armed Forces to shut up and just do as they are told? That is no way for a former failed Minister to speak to people who have pledged their lives—even until death—for this country. I hope she will make it plain that that is not the view of Ministers.
Baroness Goldie (Con)
I have detected frequently in this Chamber—I do not think it necessary to seek that reassurance again—that there is huge respect and affection for our Armed Forces, a respect and affection which I personally try to embody and observe. While we are committed as a Government to protecting people from strike disruption during a challenging winter, we are sensible to the fact that repeated employment of our Armed Forces in routine domestic tasks, for which civil authorities are responsible, is not a viable long-term solution. There, I agree with the noble Lord. We are also very conscious of our public obligation to keep core services running. That is why I applaud the Armed Forces who are responding to the MACA request and will do their level best to mitigate the suffering that is currently so widespread.
Baroness Smith of Newnham (LD)
My Lords, from these Benches as well, we support our Armed Forces. What assessment have His Majesty’s Government made of the size of the Army? As the Chief of the Defence Staff said, our Armed Forces cannot be “spare capacity” in times of strikes. Are our Armed Forces really large enough for everything that the Government expect them to do?
Baroness Goldie (Con)
I reassure the noble Baroness and the House that I and my ministerial colleagues are clear about the primary task of the Armed Forces: defence of the realm. We would not approve a request for military aid if it put our ability to undertake that task at inappropriate risk or if we felt it compromised our operational effectiveness. We would not allow that to happen.
Lord Lancaster of Kimbolton (Con)
My Lords, I remind your Lordships’ House of my interest as a serving member of the Armed Forces. As a Minister responsible for many MACA tasks a few years ago, two things became very clear. First, while the Treasury rules are there, the MoD sometimes did not help itself by failing to send a bill to the other department, meaning that we created a dependency culture and were often the first port of call and not the last. Secondly, other government departments simply failed to have adequate contingency plans in place, meaning they always came back to the MoD—to echo the point made by the noble Lord, Lord Reid. Will my noble friend ensure that other government departments have appropriate contingency plans in place to limit the call on the Armed Forces?
Baroness Goldie (Con)
The Secretary of State, my right honourable friend Ben Wallace, is very clear about his primary obligation to the MoD and our Armed Forces, whom we depend on and on whom we are calling. He is very sparing in agreeing to MACA requests. I again reassure the House that there is a very fine filter through which such requests have to pass. My noble friend is quite right: the commissioning department has to pay the bill, but my right honourable friend is very keen on sending out bills.
Lord Woodley (Lab)
My Lords, bringing in the military to break strikes is, in my view, an appalling use of our Armed Forces. As my noble friend Lord Reid said, top military brass are saying that this is, at the very least, slightly perilous. Does the Minister agree that our public sector heroes, the same people we banged pans for every week as they kept our vital services running through the pandemic, deserve the same pay rise as Unite members at Rolls-Royce, who have just secured a 17.6% increase in wages? My advice is to pay the nurses what the public think they deserve or pay the price at the next election.
Baroness Goldie (Con)
The noble Lord will appreciate that I am here to answer questions on behalf of the MoD. However, I can say that despite the complex range of national security threats we face, our Armed Forces are also heroes of the public sector. We will always be the ultimate guarantor of national resilience. That applies equally when industrial action compromises the safe operation of core functions of the state as when flooding or fire threatens the homes and lives of British citizens. That is once again why we are so thankful to have the dedication and commitment of those professional and skilled people.
Lord Trefgarne (Con)
My Lords, given that the Armed Forces are trained to obey orders regardless of the circumstances, will the Government be sure not to take advantage of that situation?
Baroness Goldie (Con)
As I indicated earlier, we exercise a robust test when we get a MACA request from another government department. Strict principles have to be observed, and we would never willingly offer help if we felt that it was available elsewhere in government or, indeed, from the commercial sector.
Lord Tunnicliffe (Lab)
My Lords, MACA requests—that is, military aid to civil authorities—are being used routinely, when guidance states that military assistance should be used
“responding to emergencies or in maintaining supplies and essential services”.
Such requests create increased domestic pressure on our Armed Forces at a time when the Government are pushing ahead with cutting a further 10,000 troops from the size of the Army. Will the Minister confirm that the Government’s refresh of the integrated review will take account of this and halt any further cuts?
Baroness Goldie (Con)
To reply to the first part of the noble Lord’s question, it is the case that a proportion of our Armed Forces have been identified to be deployed to MACA tests—the figure I have at the moment is a total of 1,455. That is a relatively small proportion of our combined Regular Army and reservists. As I said earlier, we are comfortable with offering that help in terms of not compromising national security and not in any way impacting on our ability to do our fundamental task, which is the security of the realm.
As for the integrated review refresh, we are always vigilant about the nature of the threat, the character of the threat, and what we think we need to respond to it. We will be flexible and open-minded as to how to we submit our views to that integrated review refresh.
Plastics: Health Research
(2 years ago)
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Baroness Meacher
To ask His Majesty’s Government what plans they have to fund research into the health impact of plastic through a new National Plastic Health Impact Research Fund.
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Lord Markham) (Con)
The Government are funding a broad portfolio of research in this area through UK Research and Innovation and the National Institute for Health and Care Research; both funders welcome applications for research into any aspect of human health. Since 2018 the Government have committed over £100 million for research and development and innovation support, to tackle the issues that arise from plastic waste.
Baroness Meacher (CB)
My Lords, I thank the Minister for his reply and assurance that the private sector and trusts and others are investing in this area. But when almost four-fifths of people in this country have plastic particles in their blood, which means most of us in this Chamber if you think about it, and when these particles are associated with cancer, diabetes and other, serious, chronic illnesses, does the Minister accept that this really is a priority? Does he accept that a proportion of the Government’s R&D spending—we suggest 0.1%, which is hardly great—should be allocated as a priority to investigating the impact of plastic particles on human health, and how to tackle the problem?
Lord Markham (Con)
I have had the opportunity to speak to the chief scientific officer in this space, so I am guided by the science here, and I have also heard the impact from the Food Standards Authority, which considers it unlikely that the presence of plastic particles in food would cause harm. Further research in this space will be reporting in March 2023, but currently there is limited evidence to suggest that there is any harm.
Viscount Colville of Culross (CB)
My Lords, the Environment Act includes the power to be able to charge for single-use items, including plastics, to reduce consumer consumption. Can the Minister tell the House whether or not the Government intend to use this power and, if so, when?
Lord Markham (Con)
I am mindful that my brief as Health Minister is fairly large but maybe not quite that large. But I note that in this space we have already replaced plastic bags, very successfully introduced a usage charge, and reduced consumption by 95% in the main supermarkets, so that is a tool that we know works. But currently there is limited evidence suggesting that it is a health hazard.
Lord Allan of Hallam (LD)
My Lords, while the global production of plastics continues to grow, the literature tells us that there is still very limited information about their long-term health effects. As we are trying to shift behaviour so that people and businesses reduce their use of plastic, for a variety of reasons, would the Minister agree that more research into the health effects would be helpful to support that public awareness effort?
Lord Markham (Con)
We have set up a research fund; as I say, £100 million has been spent around plastic waste in the last few years. Again, I have spoken to the chief scientific officers on exactly this, and if there are good research proposals in this space, they are ready to look, assess and commission them if they will be valuable here.
Baroness Merron (Lab)
My Lords, air pollution is the largest environmental risk to public health. Can the Minister say what assessment has been made of the contribution to that risk by the burning of plastic in landfill?
Lord Markham (Con)
Again, my understanding from the science is that that is not a concern here. The presence of nanoparticles in the bloodstream has not caused concern to date. However, again, if there are good research proposals in this space, that is exactly what the research council was set up to look at.
Baroness Bennett of Manor Castle (GP)
My Lords, the Minister has said a number of times that there is limited evidence, yet we know, as the noble Baroness, Lady Meacher, said, that there are microplastics in our blood. There is evidence that nanoplastics cause change and inflammation in skin and lung cells, and plastics also contain additives, including bisphenol A, phthalates and polychlorinated biphenyls, which are endocrine disruptors and alter reproductive activity. Is a lack of knowledge, in the light of the Government’s supposed attachment to the precautionary principle, an excuse for not acting while all these risks are clearly evident?
Lord Markham (Con)
Again, the research bodies are very happy to look at any good proposals. The only place I would disagree with this is on whether you would want to ring-fence a certain amount to a space when you do not know whether there is a health risk there. Therefore, if there are good research proposals, we are definitely ready to take that forward. I will caution against some of the quotes where they are based on a sample size of 22 people, in terms of the common-sense study. That is why we place caution on this, but if there are good research proposals, I say: absolutely, please bring them forward.
Lord St John of Bletso (CB)
My Lords, while welcoming the plastic packaging tax in April this year, I noted an alarming OECD report recently that plastic waste entering the oceans is set to treble in the next 40 years. What are our Government doing to fund credible plastic alternatives so as to mitigate the problems at source?
Lord Markham (Con)
I understand that this is part of the £500 million Blue Planet Fund that we put in place to help developing countries support the marine environment, and we are a contracting party to the OSPAR convention to participate in marine-limited monitoring programmes.
Lord Kamall (Con)
As the Department of Health and Social Care moves towards prevention, is my noble friend the Minister aware of initiatives within the National Health Service and across the health and care system to reduce the use of plastic across our system?
Lord Markham (Con)
I thank my noble friend. Yes, the NHS is committed to a 10% reduction in clinical single usage by 2045, and these plans are set out in the NHS long-term plan document, Delivering a “Net Zero” National Health Service.
Lord Harris of Haringey (Lab)
My Lords, the Minister has said several times that there is no credible evidence that this is harmful. I just ask him to contemplate whether it really can be good for the human body to be pumped full of foreign material in this way. Would he have given the same answer in respect of smoking, which, when it was first promulgated and mass-marketed, was also seen as beneficial to health?
Lord Markham (Con)
The phrase I used was that there is “limited evidence” in this space. I reiterate that if a good research proposal is put forward, funds are available there. The only point of difference on this is that I do not believe we should ring-fence a definite amount each year when the evidence does not yet exist that it is a health risk.
Lord Patel (CB)
My Lords, the Minister suggested that his scientific advisors told him that there was no evidence. Finding “no evidence” does not scientifically prove that there is no evidence. It has been said several times that if a scientific proposal was put forward, it would be looked at. Accepting that plastic pollution is a problem, should the NIHR not put out tenders inviting research proposals?
Lord Markham (Con)
Again, my wording was “limited evidence”. There are many demands. It feels as though every day I am up here being asked to spend money on something else. As a responsible Minister, I must prioritise spend in areas where it is needed. At the moment, I am being guided by the science, which tells me that there is very limited evidence in this space. If a good proposal is put forward, we will welcome it and look into it. Until then, this is not good use of public money.
Public Contracts (Amendment) Regulations 2022
(2 years ago)
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Baroness Bloomfield of Hinton Waldrist
That the draft Regulations laid before the House on 8 November be approved.
Considered in Grand Committee on 13 December.
South Yorkshire Passenger Transport Executive (Transfer of Functions) Order 2023
(2 years ago)
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Baroness Vere of Norbiton
That the draft Order laid before the House on 8 November be approved. Considered in Grand Committee on 13 December.
Product Safety and Metrology (Amendment and Transitional Provisions) Regulations 2022
(2 years ago)
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Lord Callanan
That the draft Regulations laid before the House on 14 and 21 November be approved.
Relevant document: 20th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 13 December.
National Security Bill
Monday 19th December 2022
(2 years ago)
Lords ChamberRead Full debate National Security Act 2023 View all National Security Act 2023 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 68-II Second marshalled list for Committee - (19 Dec 2022)
Member's explanatory statement
This amendment is intended to tighten the scope of the offence in Clause 1.
Lord Marks of Henley-on-Thames (LD)
My Lords, all the amendments in this group are in my name and that of my noble friend Lord Purvis of Tweed. Before speaking to them, I make a general observation which is applicable to nearly all the amendments we have put down for debate today.
Broadly, Part 1 of the Bill is aimed at updating and clarifying the law against espionage, sabotage and subversive behaviour which threatens the safety, security or defence of the United Kingdom. We and the whole House support that aim, which is clearly described in the Long Title: to
“Make provision about threats to national security from espionage, sabotage and persons acting for foreign powers.”
However, as I said at Second Reading, we on these Benches wish to ensure that the Bill sticks to that remit and is not so wide as to damage individual liberties which our security and defence services are there to protect.
The amendments in this group would ensure that guilt of the relevant offences could be established only on the basis of actual knowledge of essential facts, and not merely what is often called imputed knowledge. The Bill talks of what a person ought reasonably to know rather than what they might be deemed to know. However, we object to the addition of
“or ought reasonably to know”
after “know”.
I shall remind your Lordships briefly of the offences covered by these amendments and the sentences proposed for them. The offences in Clause 1, “Obtaining or disclosing protected information”, and Clause 12, “Sabotage”, both attract a maximum sentence of life imprisonment. All four offences in Clause 2, “Obtaining or disclosing trade secrets”, Clause 3, “Assisting a foreign intelligence service”, Clause 4, “Entering a prohibited place for a purpose prejudicial to the UK”, and Clause 15, “Obtaining etc material benefits from a foreign intelligence service”, attract a maximum sentence of 14 years imprisonment. The offence in Clause 5, “Unauthorised entry etc to a prohibited place”, is in a different category because it is a summary offence, but, apart from that Clause 5 offence, all these offences are treated very seriously indeed.
Yet in order to be guilty of the offences, the defendant does not actually have to know essential facts. It is enough if they “ought” to know them. In Clause 1, the offence is committed if the person
“obtains, copies, records or retains protected information, or … discloses or provides access to protected information”.
Clause 1(b) provides that the person’s conduct has to be
“for a purpose that they know, or ought reasonably to know, is prejudicial to the safety or interests of the United Kingdom”.
In the next group, I will make the point that the interests of the United Kingdom concerned ought to be the “security or defence interests”, not just interests in general. But in this group, our point is that, in order to be guilty under this clause, the person should actually have to know that their conduct was for a purpose that was prejudicial to the UK. It should not be sufficient to constitute guilt that they merely “ought to have known” that, even if they did not. That is the point of our Amendment 1.
Another unsatisfactory feature of this and other clauses is that the clause presupposes an actual purpose—that purpose, presumably, being the reason for the defendant’s actions. It would be very odd if, the prosecution having established the purpose, the additional requirement of knowledge could be met not by showing that the defendant knew that that purpose, which was his or her own, was prejudicial to the national interest but merely that they “ought” to have known that.
Under Clause 2, which is the trade secrets offence, the defendant’s conduct, under the Bill, has to be “unauthorised”. However, as drafted, the defendant does not have to know that the conduct is unauthorised; it is enough if the defendant “ought” to have known that. Our Amendment 7 would change that.
Under Clause 3, “Assisting a foreign intelligence service”, it should be required, we say, that to convict a person of this offence, they actually knew—the Bill says that they ought to have known that it was “reasonably possible”—that
“their conduct may materially assist a foreign intelligence service”,
not merely that they should have realised that the possibility existed. Amendment 14 would address this. We also say that the word “likely” would be more effective than the words “reasonably possible”, but that is addressed in a later group.
In Clause 4, the offence of entering a prohibited place suffers from the same inherent problem as the Clause 1 offence. The purpose has to be proved, but the defendant does not actually have to know that the purpose was prejudicial to the safety or interests of the United Kingdom; it is enough that they “ought reasonably” to have known. The clause heading, “Entering etc a prohibited place for a purpose prejudicial to the UK”, highlights the illogicality. How can you have that purpose if you do not actually know that the purpose is prejudicial at all? Yet the clause as drafted says that you can; that should go, and our Amendment 17 would remove it.
Clause 5 is the summary offence of unauthorised entry to a prohibited place. Under the Bill, proof of actual knowledge of the lack of authorisation is unnecessary; again, merely the defendant “ought” to have known that. Our Amendment 22 addresses that.
Regarding Clause 12, the very serious sabotage offence, the same point applies to the purpose as in Clauses 1 and 4. Again, we say that guilt ought, crucially, to depend on actual knowledge that the purpose was prejudicial. Amendment 36 addresses that.
Amendments 46 and 48 make similar points about the defendant’s knowledge of the source of benefits provided by a foreign intelligence service. Amendment 65 would amend the application of the foreign power condition in Clause 29, which states that
“the person knows, or ought reasonably to know,”
that the conduct is carried out
“on behalf of a foreign power.”
The foreign power condition in the Bill is a very important condition for liability for a number of these offences. How can it possibly be just for the law to provide that the condition can be met if a person does not know that their conduct is carried out on behalf of a foreign power and naively does not catch on, just because it is later decided that even if they did not know at the time, they should have realised? Juries can, and frequently are asked to, come to a conclusion about what defendants know or knew or even what they believe or believed. Juries are good at determining actual states of mind, drawing conclusions from the evidence they hear and see.
To take a simple example, the Theft Act defines receiving stolen goods as:
“A person handles stolen goods if (otherwise than in the course of the stealing) knowing or believing them to be stolen goods he dishonestly receives the goods”.
But here we are concerned with the proposal that juries should decide cases not on the basis of conclusions they reach about an actual state of knowledge or belief but on views they may take about what the defendant did not know but should have done. These are value judgments, not true decisions of fact.
We are not suggesting that imputed knowledge is never used in the criminal context, but where it is the context is very different. It is used, for example, for insider trading in Canada, where professional insiders receiving tips are able to be found guilty on conclusions that they ought to have drawn. It is used in the Protection from Harassment Act 1997 in respect of defendants who should have known their own conduct would amount to harassment. In the Official Secrets Act 1989 the reference is broadly to unlawful disclosures by Crown servants and contractors or others to whom confidential information was entrusted. They have a defence to unlawful disclosures if they show they did not know and had no reason to believe that the disclosures were unlawful. The burden of proof is reversed, I accept, but I suggest that is because of the positions the defendants hold or held. However, lack of knowledge or of the reason to believe in a state of fact amounts to a defence even then, so that liability is a long way from these cases because these provisions may catch anyone with no special relationship to the Government on an assessment that the defendant did not know the relevant facts but ought to have done so. Our position is that that is unjust. I beg to move.
Lord Hope of Craighead (CB)
My Lords, I venture a few thoughts on this phraseology. The crucial question is: how much would the prosecutor have to prove about the state of knowledge of the defendant? In some contexts, when phraseology of this kind is used, it is necessary to show what the individual knew was the state of the law and what information that individual had at the relevant time from which a conclusion should be drawn.
The problem with the phraseology here is that it is so general that it is not clear whether the knowledge the individual had is to be the actual knowledge which that person had, which is one thing, or, as has been suggested by the noble Lord, Lord Marks, imputed knowledge. If we are dealing with imputed knowledge, the situation becomes much more serious, particularly having regard to the fact that one is concerned with not just the safety of the United Kingdom but the interests of the United Kingdom, which itself is an unfortunately vague expression. I think it would help the Committee if the Minister would explain exactly what a prosecutor would be expected to have to prove in order to establish the offence.
Putting myself into my former position of prosecutor, I would find it quite troublesome to have to face up to proving not only what the individual knew about the law but what the individual knew about the facts. But it would be quite reasonable for me as a prosecutor to have to do that. To impute knowledge of facts to an individual with an offence as serious as this is to take the matter a long way from a reasonable punishment with the extreme penalties mentioned in this clause. It would be helpful if the Minister would explain exactly what would need to be proved in order to establish the offence so that the noble Lord and those supporting know exactly where they are.
Lord Purvis of Tweed (LD)
My Lords, I rise to support my noble friend and have added my name to these amendments. I apologise to the Committee that I was not present at Second Reading. The Minister knows that I was in Malawi supporting the launch of a parliamentary programme and explaining to our colleagues in Malawi the benefit of line-by-line scrutiny of legislation, which I know the Minister will be relishing over these coming days in Committee. As my noble friends indicated at Second Reading, and as my noble friend has indicated today, we take threats to our country very seriously, and we will work constructively with the Government in the scrutiny of the Bill.
I was struck by the remarks of the former head of the SIS, Sir Alex Younger, when he gave evidence to the Public Bill Committee in the Commons and said that the need to address the changing threats was in front of us. He said:
“What I would call grey threats … often presented us with real challenges, particularly when actors or states felt themselves at war with us and we did not feel ourselves at war with them, for good reason. My career saw less emphasis on conventional threats and more on grey space. Most of my career was devoted to counter-terrorism, which was the dominant example, but subsequently we saw state actors working in sub-threshold space—operations short of conventional war—to harm us.”—[Official Report, Commons, National Security Bill Committee, 7/7/22; cols. 11-12.]
In many respects, it is that grey space that we are seeking to address. I understand the Government’s challenge ahead but, as my noble friend indicated, casting the net so widely without a sharp mesh, I am not sure we will have the kind of security the Government are intending for us to have in this area.
This will be very apparent when we get to Part 3, when it comes to foreign interference in the registers, and other parts. I know the Minister will be in listening mode for a lot of Committee, but I hope he will consider pausing at that part of the Bill for further consultation, because what was apparent at Second Reading—many other noble Lords have, I am sure, received representations from a wide variety of groups, as I have—is that more consultation on that part of the Bill is necessary. Pausing that and bringing it back for the economic crime Bill may be an appropriate way forward. That is a debate we are yet to have, but I just wanted to give the Minister foresight of the case we are making.
As my noble friend indicated—and I defer to his legal knowledge and that of others with extensive legal knowledge who will be participating in Committee—I am struck that because of the Government’s choice not to reform the Official Secrets Act 1989, we will have two competing offences with two contradictory defences. Under this Bill, as my noble friend indicated, anyone who discloses protected information is committing an offence. In the 1989 Act, if an intelligence officer or former intelligence officer discloses any information relating to security or intelligence, they can be imprisoned for up to two years.
Under this Bill, anyone disclosing protected information to a foreign power or a body under the authority of a foreign power faces life imprisonment. However, as my noble friend indicated, in Section 1(5) of the Official Secrets Act 1989 there is a form of defence:
“It is a defence for a person charged with an offence under this section to prove that at the time of the alleged offence he did not know, and had no reasonable cause to believe, that the information, document or article in question related to security or intelligence or, in the case of an offence under subsection (3), that the disclosure would be damaging within the meaning of that subsection.”
There is no equivalent in this legislation, and I would be grateful if the Minister would outline in very clear terms why.
Part of the rationale given by the Minister in the House of Commons was that the difference between this and the Official Secrets Act is that with this, for any prosecution, three tests have to be met. I suspect we will hear quite a lot in Committee about the three tests. The Minister, Stephen McPartland, indicated that the three tests for someone to be prosecuted under this part of the Bill were,
“conducting harmful activity with regard to information that is protected effectively, knowingly prejudicing the safety or interests of the United Kingdom, and acting in a way that benefits a foreign power.”—[Official Report, Commons, National Security Bill Committee, 12/7/22; col. 80.]
But “harmful activity” and “protected effectively” are not specified in the Bill and “benefits a foreign power” is not necessary in Clause 29.
Because of the breadth of Clause 29, in some areas it is opaque. For example, does someone have to prove objectively that they did not know they were providing a service to a foreign power because they were providing it for an authority of a power? That means that the objective test, on a subjective element under this clause, is problematic.
The Minister in the Commons was not clear with regard to what the three tests are, and Clause 29 is broad. It would therefore be preferable for there to be a far more objective approach, as there is in the 1989 Act, rather than what is in this Bill. On that basis I support the amendments in my noble friend’s name.
Lord Ponsonby of Shulbrede (Lab)
My Lords, the amendments in this group, tabled by the noble Lords, Lord Marks and Lord Purvis, intend to tighten the scope of offences in Clauses 1, 2, 3, 4, 5, 12, 15 and 29. This is achieved in these amendments by leaving out
“or ought reasonably to know”
from the relevant clauses, meaning that an offence is committed under these clauses only if the person
“knows … that to be the case.”
The practical effect of these amendments is therefore that offences are committed only when a person knows that their actions are damaging. Given that the offences in the Bill could carry significant sentences, as we heard from the noble Lord, Lord Marks, the Committee is right to probe to what extent a person must know that they are committing such an offence, especially as it will otherwise be up to the courts to determine whether a person ought reasonably to have known that they were committing the offence.
However, it is not unusual for offences to be committed when a person ought reasonably to know. There is a recent example of this, which includes the Criminal Justice and Courts Act 2015. I was recently googling it, and it seems that the Act was passed by the coalition Government.
Further to this, if an offence is committed only when a person knows it to be the case that their actions are damaging, it could be difficult to get a successful prosecution. None the less, it is right and helpful that the Committee should ask the Minister to expand on the points we have heard in this short debate.
As the noble Lord, Lord Marks, said, juries often decide on the state of somebody’s mind when an action is committed, and the decision as to whether the defendant is guilty or not guilty can easily turn on their perception of the state of the person’s mind. The noble and learned Lord, Lord Hope, spoke about the difference between knowledge and imputed knowledge. As he said, it would indeed be helpful if the Minister could expand on the level of imputed knowledge that may be expected to secure a conviction.
The noble Lord, Lord Purvis of Tweed, reminded us of the complexity of dealing with “grey space”, as he referred to it. This is an opportunity for the Minister to try to clarify the situation so that prosecutions can be appropriately brought and reasonably thought to have secured an appropriate conviction.
The Parliamentary Under-Secretary of State, Home Office (Lord Sharpe of Epsom) (Con)
My Lords, I thank noble Lords for their broad support for the Bill and the noble Lord, Lord Marks of Henley-on-Thames, for introducing these amendments.
The test that a person
“knows, or ought reasonably to know”
the effect of their conduct recurs throughout the offences and measures in Part 1 of the Bill. Failing to include an element of objectivity in this test would risk seriously undermining the offences and not criminalising behaviour for which we consider individuals should be culpable. Those conducting state threats activity are likely to be skilled at their tradecraft and will be adept at hiding their activities from our intelligence and law enforcement agencies. It is important that we do not hinder our ability to prosecute in these cases.
We consider that knowledge is an appropriate threshold for these offences and the foreign power condition. However, we believe it is also right to include constructive knowledge in these provisions. Given the seriousness of the offences to which this test applies, it is essential that an element of objectivity is included to ensure that offences can still be prosecuted where individuals are unjustly claiming not to have known the relevant consequences or circumstances. It is, of course, right that those who could not have seen those consequences or circumstances should not be criminally liable under these offences.
I think it is helpful at this point to draw noble Lords’ attention back to the 1911 Official Secrets Act, which we are replacing with this Bill. The offences under that legislation cover certain actions, such as obtaining information, by a person
“for any purpose prejudicial to the safety or interests”
of the United Kingdom. Those offences require a no-fault element to be proved in relation to the prejudice to the safety or interests of the state. The proposed amendments to Clauses 1, 4 and 12 contain the same requirement for prejudice to the safety or interests of the United Kingdom, but, importantly, and as recommended by the Law Commission, introduce a subjective fault element. We agree with the Law Commission that these offences should contain a subjective fault element. Crucially, the offences would not capture a person who genuinely could not reasonably have known the effect or nature of their conduct.
Perhaps I might provide a hypothetical scenario of how the proposed amendment could affect the foreign power condition in Clause 29. It is possible that an individual is unaware that they are working for an undercover foreign agent. The noble Lord, Lord Purvis of Tweed, made a very good point about the grey area in which much of this activity takes place. Let us imagine that the security services tell that individual that the person they are working for is, in fact, a foreign agent but the individual refuses to believe it despite clear warnings. At this point, it would be reasonable to make that individual culpable should they continue activities at the behest of the foreign agent, whereas it might prove difficult to successfully prosecute the individual if knowledge had to be proved.
To be clear, the individual in this example would still need to meet all the other tests in any given offence to be charged with that offence. Meeting the foreign power condition is not in itself wrongdoing.
The same logic applies to other amendments tabled. In Clauses 3 and 15, I am sure the whole House would agree that it is not right that an individual should escape liability when they reasonably should have known that their conduct could assist a foreign intelligence service or that they were receiving a benefit from a foreign intelligence service. A purely subjective test would make these offences very difficult to successfully prosecute.
Constructive knowledge is applied by the courts in other circumstances and the Government are confident that this test is appropriate. There will be a range of culpability between those who have actual knowledge and those who should have known, but that is something that is appropriate for sentencing rather than conviction. I hope that goes some way to answering the question put by the noble and learned Lord, Lord Hope—ah, apparently not.
Lord Hope of Craighead (CB)
I want to make it quite clear that, for the reason that was expressed earlier, I do not object to the idea of objectivity here, because it is sometimes extremely difficult to prove that someone knew something. The phraseology being used is pointing in the right direction, but there are two different levels of knowledge. The first is the knowledge of the background facts, and then there is the knowledge that flows from the conclusion based on those facts. Both of those are built into the rather short phraseology of this clause.
Taking those as two separate things, I can agree that the conclusion to be drawn from those facts can be looked at objectively. My question is: how much is the prosecutor going to be dependent on imputed knowledge of the background facts? It would be consistent with some other contexts in which reasonable knowledge is used to say that you look to see what information is possessed by the individual. Taking that as a given, you look at what facts the individual knew, and then you look at the conclusion that ought to be drawn from those facts. I hope I have made it clear that there are two stages here and my concern is about the first stage—whether the clause is imputing knowledge to the individual which that individual does not have. If it is going that far, it is taking a very serious step.
Lord Sharpe of Epsom (Con)
I thank the noble and learned Lord for that clarification. I do not think the clause is imputing that but I will read Hansard very carefully and, if I may, I will come back to him in writing on this point.
The noble Lord, Lord Purvis, will pick me up if I do not address the Official Secrets Act 1989, but that is due to be discussed in group 33 on a subsequent Committee day, so I ask if we can come back to that detail then, if that is acceptable.
Lord Purvis of Tweed (LD)
Of course, as long as it is on the basis of the point that my noble friend raised—that we will have two pieces of legislation. The 1989 Act will cover serving or former members of the intelligence services, but this Bill means that there will now be two competing pieces of legislation. I do not know which the Government intend will trump the other.
Lord Sharpe of Epsom (Con)
I understand where the noble Lord is coming from. I commit to making sure that we explain that in considerable detail at the appropriate time, if that is acceptable.
For the reasons I have given, the Government cannot accept the tabled amendments and I ask the noble Lord to withdraw.
Lord Marks of Henley-on-Thames (LD)
My Lords, I shall certainly withdraw the amendment at this stage at the end of what I have to say, and will then consider it and my other amendments with the Minister and others between now and Report.
I am grateful for the incisive consideration of imputed knowledge by the noble and learned Lord, Lord Hope, supported, as I understood it, by the noble Lord, Lord Ponsonby, who clearly articulated the difference between the basic knowledge that you must have and the conditions for imputing knowledge. That is what the Government’s drafting of all these clauses in the Bill simply does not address.
My noble friend Lord Purvis of Tweed pointed out the very difficult coexistence of the Bill with the Official Secrets Act 1989, which I think the Minister accepted and said that we are going to come back to. It is difficult precisely because it is not simply a competition between offences that involve serving or former intelligence officers and those involving any person; it is also that there is a carefully defined defence under the Official Secrets Act that does not apply here, and the offences can be made out on the basis of imputed knowledge.
The point made by the Minister, that the requirement for actual knowledge might hinder prosecutions, would be a good one were it not for the fact that juries are very good at determining whether or not people who deny knowledge actually have it, as the noble Lord, Lord Ponsonby, pointed out. With the exception of the Clause 5 offence, these are all indictable-only offences, as you would expect, carrying very serious penalties. A defendant who denies knowledge will have that denial very carefully considered, and the underlying facts that he knew, or can be shown to have known, will be considered to enable a jury to decide whether he actually knew.
On that basis, I suspect that, at the end of the deliberations on the Bill, the House may well want to ensure that, for a conviction to stand, it is a question not of hindering prosecutions but of whether a conviction on reasonable evidence is a likely outcome. When that is considered, I believe that actual knowledge should be required, although I of course wish to consider this over the intervening stages of the Bill. On that basis, I beg leave to withdraw the amendment.
Member's explanatory statement
This amendment is intended to clarify the definition of “interests of the UK”.
Lord Marks of Henley-on-Thames (LD)
My Lords, our amendments in this group would all tighten the definition of the
“interests of the United Kingdom”
that are to be protected under the provisions of the Bill. They would make it clear that the interests to be protected from damage or prejudice by this National Security Bill should be the “security or defence” interests of the United Kingdom.
In opening group 1, I made the point that the aim of Part 1 was set out in the Long Title: the Bill is about “threats to national security”, not general concerns about the interests of the United Kingdom. This reflects a point, made by me and others at Second Reading, that the interests of the UK in the Bill as drafted are not restricted to the defence or security interests of the UK at all but that any interests of the United Kingdom are to receive protection.
For example, under Clause 1, obtaining records or disclosing “protected information” is to be criminalised. “Protected information” includes any information that is “restricted in any way”, or may be reasonably expected to be so restricted, for the purpose of protecting any interests of the United Kingdom, not just security or defence interests. There is no requirement that a genuine threat to the UK be shown, and there is no restriction on which areas the interests of the UK might be held to cover.
As the Minister said in responding to the Second Reading debate, the phrase “interests of the United Kingdom” has been interpreted by the courts as meaning
“the objects of state policy determined by the Crown on the advice of Ministers”.
He also said:
“This is notably different from protecting the particular interests of those in office.”—[Official Report, 6/12/22; col. 152.]
In a personal sense, that may be so, but the interpretation that he recited, which I accept is correct in law, means effectively that the interests of the UK are synonymous with government policy at a particular time. So if the Government of the day are pursuing a particular policy on environmental protection, for example—I mentioned fracking at Second Reading but it could just as easily be immigration or any commercial interest covering transport, planning, housing, safety standards, employment rights or whatever—then investigation and disclosure would be at risk of being criminal.
Under Clause 4, photographing, recording or even looking at any prohibited place for a purpose contrary to any interests seen as those of the UK—these interests are effectively determined by the policy of the Government of the day—would all be criminal. Worse still, the photography or the recording could all be from outside the prohibited place.
Under Clause 8, the Secretary of State may designate anywhere in the United Kingdom—or for that matter any vehicle—as a prohibited place if they consider it necessary to protect the unlimited and undefined interests of the UK. That would hand an unscrupulous Government the power to choke off much of the investigative journalism and broadcasting that is fundamental to our democracy. Consequently, informed discussion of what the national interest requires would be similarly choked off. The dissemination of information about government policy on almost any topic that the Government could claim bore on the national interest could be stifled by the imposition of government restriction at will.
As drawn, many of these provisions have nothing whatever to do with national security. All of our amendments in this group are designed to restrict the interests to be protected by the Bill to “security or defence” interests. That is sufficiently wide, and it is the aim of the Bill, as demonstrated by the Long Title. We therefore hope that the Government will accept these amendments, because we find it hard to believe that they would wish to arrogate to themselves such wide-ranging protection of all possible interests that could be designated as interests of the United Kingdom in a Bill that is rightly concerned with the protection of national security. I beg to move.
Baroness Jones of Moulsecoomb (GP)
My Lords, I will make some simple arguments, because there are other noble Lords who can make much more complex arguments. I say very clearly that the Bill we are debating is the National Security Bill and, therefore, it ought to be about national security. The offences should not be able to be translated to other areas. The offences are drawn so badly and broadly that they will criminalise a huge range of conduct which might only vaguely affect the interests of the UK. The wording should be changed to “security or defence”, as the noble Lords, Lord Marks and Lord Purvis, have suggested in their amendment. It is a dangerous piece of legislation, because it is so broad that the police and security services will be able to turn it into something they can use against far too many people.
Lord Evans of Weardale (CB)
My Lords, I have reservations about this amendment, because it seems to me that, for the reasons outlined by the noble Lord, Lord Purvis of Tweed, we are talking about a grey-zone threat from foreign powers and not just the traditional threat which focused almost entirely on national security and defence in the traditional sense. If we are to have legislation which is fit for purpose for the current hybrid warfare that we face as a country, it needs to enable the intelligence and security services to take the appropriate action against not only narrowly defined national security and defence interests but the wider interests of the country—that is what the grey zone is about. While we may be talking about, for example, economic or political interests, it would be an error to focus solely on national security and defence, because, unfortunately, that is not the only area on which our opponents and enemies are focused.
Baroness Butler-Sloss (CB)
My Lords, I understand entirely what the noble Lord, Lord Evans, has said about the grey area, and we may need to look at that. However, because of how the clause is drafted, it goes far broader than that: as the noble Lord, Lord Marks, said, it allows for any interests of any Government at any period of time. What does the Minister think is the purpose of “interests”?
Lord Hope of Craighead (CB)
My Lords, there is an important principle at heart here. While I appreciate the description of the zone as grey, the problem is that, when you are criminalising conduct, particularly with the penalties that are mentioned in the clause, absolute clarity is needed so that the individuals at risk of being prosecuted can judge whether or not they are at risk of prosecution. Therefore, some attempt at changing the wording—not necessarily following the exact wording in the amendments—is needed to clarify the situation in the interests of the members of the public who are at risk of being prosecuted. I quite understand the greyness of the area, but that is a challenge that must be faced by finding a way, though some form of wording, to avoid the broad reach—indeed, the broadest possible reach—which is at risk if the wording of the clause is kept as it is.
Lord Carlile of Berriew (CB)
My Lords, I agree absolutely with the Government’s aim in that there are certain British interests that they wish to protect. However, the way the Bill is drawn leaves an area of opacity and inconsistency with other important and analogous publications. I draw your Lordships’ attention to the revised version of the integrated review produced in 2021, which refers to:
“Our interests and our values: the glue that binds the”
nation. It continues:
“The Government’s first and overriding priority is to protect and promote the interests of the British people through our actions at home and overseas. The most important of these interests are: … Sovereignty … Security … Prosperity”—
and it explains each of those terms. The explanation of prosperity is extremely vague, but the descriptions of both sovereignty and security are quite clear. Those two descriptions are different from “the safety or interests of the United Kingdom” in the Bill, at least as I understand it. My plea to the Minister is for him to accept that there may be some opacity in what we are presented with, and for him to go back and consider this—alongside other publications that the Government have produced, including the integrated review—so that we can have something which is consistent across the board by the time we complete the Bill.
Lord Beith (LD)
My Lords, one of the considerations of the kind referred to by the noble Lord, Lord Carlile, is, of course, a fairly familiar debate parallel to this one which is about the economic well-being of the United Kingdom. Many of the powers exercised by security services can be exercised to defend the United Kingdom from physical threat, but they can also be used to defend the economic well-being of the United Kingdom. I have always been worried about the potential growth of that term, not its actual use. It is very easy to think of things that perhaps ought not to attract intelligence activity but which affect the economic well-being of the United Kingdom. The achievement by a particular firm of a particular contract in competition with another firm is a simple example.
We have some experience of trying to deal with this, and to move to an even wider definition of United Kingdom interests seems to me to open the door to criminal cases being mounted with serious potential penalties in circumstances which Parliament will not have envisaged, except in this short debate, when the matter arises in real life. I can see the intelligence agencies being put at some disadvantage by there being a suspicion that they can do things to favour one group of people over another in the economic interests of the United Kingdom or, as in this case, in the wider interests of the United Kingdom. There is a problem, and I think it needs to be addressed by tighter wording.
Lord Purvis of Tweed (LD)
My Lords, I support my noble friend’s amendments. I respect the issue of the grey area of tactics, but I equally acknowledge that if we are seeking to secure convictions beyond reasonable doubt for life sentences and sentences of 14 years, then the burden has to be, in my view, on having the primary legislation as clear as it can be. I will come back to the wider areas of concern.
The Government have referenced that this is an update not a wholesale replacement of the 1911 Act, which states in Clause 1:
“safety or interests of the State”.
But that is a very specific reference to the penalties for spying. It does not go beyond that, so the reference for the understanding of the interests of the state with regard to that penalty and that part of the 1911 Act are very clear. The difficulty with this Bill, as my noble friend indicated, is that the Government are now using that across a series of different offences which are very broad in nature. We will no doubt come back to some of those within the Bill.
The Government have also said that we do not need to have it clarified in the Bill because they are relying on case law definition for this; they cite Chandler v Director of Public Prosecutions—1964 AC 763—as far as that is concerned. I looked at that case, which was specifically about a decision that was made about protesters seeking to access a site where nuclear bombers were going to be taking off. The court found that it was not for the courts to decide what were national security interests; that was a responsibility of the Executive. That is very understandable.
That decision has also been looked at in other cases including Secretary of State for the Home Department v Rehman in 2001. In that case, with regard to Chandler v DPP on national security issues, Lord Steyn said:
“But not all the observations in Chandler v Director of Public Prosecutions … can be regarded as authoritative in respect of the new statutory system.”
So purely relying on the definition of case law on a whole breadth of different offences under this Bill is not sufficient.
I was slightly concerned by what the Minister, Stephen McPartland, told the House of Commons in Committee. He seemed to imply that the real reason why the definition was so broad in this Bill was that the evidential threshold had to be low to secure prosecutions. He said of any further restrictions, as in my noble friend’s amendment:
“That would create a higher evidential threshold to secure prosecution in an area that is often difficult to evidence due to the sensitive nature of the information that may have been obtained or disclosed. Put simply, we would have to explain why it caused damage, which may require evidence that compounds the damage. That would provide challenges to our law enforcement agencies and courts”.—[Official Report, Commons, National Security Bill Committee, 12/7/2022; cols. 81-2.]
I am not a lawyer, but I imagine that our courts are fairly well equipped to handle such cases, which are sensitive or relating to national security, as they have in the past. I was troubled to read that the Minister gave the argument that we needed to keep the definition so broad to create a lower evidential threshold, but the penalty is life imprisonment. That surely cannot be right.
More alarmingly—this goes to the noble Lord’s point about wider interests—the Minister referred to the wider elements, not just national security but economic interests. He also referred to public health interests, saying that these areas would be covered in the Bill, and not just when they are used to threaten national security. So it is not just the grey tactics that concern us with regard to national security grounds, but the greyness of how, potentially, Ministers and prosecutors will seek to define that wider national interest. On the public health interest, I can understand that a malign interest may wish to use such a tactic, as I understand the North Koreans tried to do with malware and the NHS. Those are all tactics but, ultimately, these are national security concerns and not public health concerns.
Fundamentally destabilising our economy should be a national security interest. The examples my noble friend Lord Beith gave of undermining certain sectors or competition are not sufficient to meet a trigger for national security. Therefore, I believe that that triggering should be in the Bill, which is why I support my noble friend’s amendment.
Lord Coaker (Lab)
My Lords, this is a very important group of amendments which in many ways goes to the heart of much of the debate that will take place on a number of amendments. It reminds the Committee that the heart of the issue is Clause 1(1)(b), which says that to commit an offence
“the person’s conduct is for a purpose that they know, or ought reasonably to know, is prejudicial to the safety or interests of the United Kingdom”.
Fundamental to that is that what we are discussing here, as the noble Lord, Lord Marks, ably set out, is what we actually mean by the interests and safety of the United Kingdom. It is to the great credit of our country that we can debate that here to try to decide what it should be.
I agree with the majority of noble Lords who have said that it is important that we try to understand how to make sure that defending the interests and safety of our country is about national security and defence. The noble Lord, Lord Evans, reminded us that there are grey areas in that respect. That is not a criticism of having the debate, but it means that we have to decide where we want to draw the line. I have mentioned this to the noble and learned Lord Hope, and I pray him in aid. He mentioned it with respect to the Public Order Bill, and again with this one. It is an abrogation of this Parliament’s responsibility if it does not seek to answer these difficult questions and just leaves it to the courts, saying that it is for the courts to decide and determine. We ourselves should try to give greater clarity to what we as legislators think that phrase actually means.
It is incumbent on the Government to say what they will do to try to define this, as Amendment 2 moved by the noble Lord, Lord Marks, and my Amendment 3 seek to do. Either they should say “We don’t need to do that”, lay out why it is not necessary for Parliament to determine it and why they think we should leave it to the courts, or say how we will get some sort of definition that makes sense and gives greater clarity. To be frank, that is a real problem for the Bill.
As the noble Lord, Lord Purvis, pointed out in his interesting and incisive remarks, along with other noble Lords, the Government say at paragraph 62 of the Explanatory Notes:
“The term safety or interests of the UK is not defined”.
They have already made up their mind that they do not need to define it. The basis of these amendments is that we think they do. We do not oppose the Bill or think it is not important that we protect the safety and interests of the United Kingdom, but somewhere along the line our Parliament should try to say what that means. The Government say in the Explanatory Notes that it is not defined and, as the noble Lord, Lord Purvis, mentioned,
“case-law has interpreted it as meaning, in summary, the objects of state policy determined by the Crown on the advice of Ministers (see the Court’s view in Chandler v Director Public Prosecutions (1964)”.
I remind noble Lords that in that judgment, the House of Lords—constitutional arrangements were different then—essentially rejected the idea that it was for a jury to determine or decide whether something was in the interests of the state. As Lord Pearce’s judgment stated,
“the interests of the State must in my judgment mean the interests of the State according to the policies laid down for it by its recognised organs of government and authority, the policies of the State as they are, not as they ought, in the opinion of a jury, to be.”
I am not a lawyer—I have been a politician all my life—but I would argue with that. It may be quite correct from a legal point of view, but sometimes Parliament has not caught up with public opinion or where people are. Often, juries are an important way of determining what the public think, and they work.
We have seen recent examples of that. The noble Baroness, Lady Jones, reminded us well of all the different issues that have arisen with protests. They are irrelevant to the Bill, but let me give another example: assisted dying. Time and again, juries have refused to convict on assisted dying, because they will not convict somebody in those terrible circumstances and do not believe that Parliament has caught up with the reality of where we are.
Lord Faulks (Non-Afl)
I entirely understand why the noble Lord is concerned about any uncertainty in these provisions, given the significant penalty, but is he at all reassured by the fact that it would be necessary for a jury to be satisfied beyond reasonable doubt that a defendant knew or ought reasonably to have known? That is quite a high threshold to be crossed before you even get on to this definition.
Lord Coaker (Lab)
I agree; I am just making the point that a definition would also help and give us certainty and clarity. It is important for a Bill that seeks to address issues of national security that it seeks to define that. The debate has already taken place in Parliament; the noble Lord takes the view that it is unnecessary, but I think a definition would be helpful. A number of noble Lords have said that, in the Bill as drafted, it appears that not only national security or defence issues will fall under the Bill but a whole range of other potential offences which have nothing to do with national security or the defence of the realm.
That is the clarity we seek, and it is right to explore it in Committee. It will be interesting to hear what the Minister says as to why my amendment or those of the noble Lords, Lord Marks and Lord Purvis, are unnecessary. Maybe he will use the argument the noble Lord put forward to say that that is what makes it unnecessary—
Lord Purvis of Tweed (LD)
My Lords, I agree with the thrust of the noble Lord’s argument. I was just reflecting on the intervention by the noble Lord, Lord Faulks. Of course, the jury will have to reach beyond reasonable doubt whether the individual knew. The question is what the mechanisms are of proving beyond reasonable doubt that the person knew what those interests of the Government were, if those interests are not specific and linked to national security. If the Government have made a case that those interests are as broad as the Minister in the House of Commons indicated—that they were linked with public health or economy—that makes the task in the courts much harder, I would have thought. Therefore, it is in the interest of securing better prosecutions that those restrictions are on the face of the Bill, as the noble Lord, Lord Coaker, has indicated.
Lord Coaker (Lab)
That is quite right. As I said, the problem with the Bill is that there is no indication of what else may be covered by the “safety or interests” of the state, or what the limits of those terms might be. As I have been arguing, and as others have said, as well as the prevention of terrorism and espionage, they could extend to policies on energy, national infrastructure, the protection of water, power, food, health services, transport, law and order, organised crime and immigration controls. The extent of the powers that may be taken in the Bill could be used in relation to a wide range of state interests, not just state interests related to national security or to the defence of the realm. The interests of the state clearly are ensuring that we have enough energy, but should that be covered by a National Security Bill? These are questions that the Minister needs to answer, and it will be interesting to hear his answer.
I will make a couple of final remarks. Like many, I am somebody who has never read the Official Secrets Act 1911, but in preparation for Committee—and knowing the depth of knowledge, experience and wisdom that we have around—I thought it was necessary to make sure I was quoting. The Official Secrets Act 1911 says under “Penalties for spying”:
“If any person for any purpose prejudicial to the safety or interests of the State—”.
The Official Secrets Act 1911 says that it has to be for a purpose “prejudicial” to the interests of the state. Logically, should not defendants or people have the right also to argue that their act was not prejudicial to the state? The Act says that your act has to be prejudicial, so surely you have a right and a responsibility to prove that it was not prejudicial. That argument could take place within the courts or wherever. This argument about someone’s actions in relation to the safety or interests of the state, and whether they were prejudicial, needs some sort of definition. Without it, how on earth do we know whether somebody is going to commit an offence under this Act? It would be for somebody to interpret.
Can the Minister clarify what the Government mean by “safety or interests” of the state? Who determines what they are? How can anybody act against that in a way which does not break the law, whether it be through protests or actions? If I take action outside of an RAF base, protesting against it and trying to disrupt things going in or out, or if I am at the peace camp at Faslane, will that be classed as a protest? Where does it become something that falls foul of the Bill? In other words, where do you draw the line? That is an important question for the Government to answer.
My amendment and those put forward by the noble Lord, Lord Marks, and others say to the Government that it is not good enough just to say the “safety and interests” of the state. What does that mean? People have challenged that over the decades. They have stood up and said that the safety and interests of the state are something that they challenge or do not agree with. Through history, that is how progress and reform have taken place. At the time, those protesting, taking action or conducting various activities have sometimes been accused of undermining national security or acting against the interests of the state.
We do not want to pass a law which leads to more confusion or a greater inability for Parliament to say that these are the sorts of actions we mean. That is the whole point of the amendment from the noble Lord, Lord Marks, which I support. It says that if it does not relate just to defence and national security, where is the grey zone that the noble Lord, Lord Evans, mentioned? Where do we draw the line? As the noble and learned Lord, Lord Hope, keeps reminding us, we should not abrogate our responsibility on that. It is our fundamental responsibility to try to answer that question.
Lord Sharpe of Epsom (Con)
My Lords, once again, this was a helpful debate, as noted by the noble Lord, Lord Coaker. I thank all those who participated. These amendments seek to limit the “interests” element of the “safety or interests of the United Kingdom” test which applies to many of the clauses in Part 1. As noted by many noble Lords, this concept was explored extensively in the other place.
The majority of these amendments change the “interests” element to cover only security or defence interests. This moves away from the safety or interests of the UK test that already exists and is understood in current espionage legislation. Indeed, the Law Commission noted its support of the Government’s decision to retain this term. At the oral evidence session to the Public Bill Committee, it noted that
“safety or interest of the state is consistent with a lot of the wording that already exists within the Official Secrets Act”—
those of 1911 and 1920—and
“avoids what might risk being an unduly narrow focus on national security”,—[Official Report, Commons, National Security Bill Committee, 7/7/22; col. 52.]
as the noble Lord, Lord Evans, noted.
The experience of the Government and the Governments of allied states is that espionage is frequently targeted at and can result in significant damage to all sorts of national interests, some of which may fall outside the scope of security or defence interests. Indeed, any attempt to narrow or define the interests to the UK risks creating a test that is quickly outdated, as the UK’s interests naturally and properly evolve.
A number of noble Lords referred to the Chandler v Director of Public Prosecutions case that was heard in this House in 1964. It concluded that the interests of the state meant the objects of state policy, determined by the Crown on the advice of Ministers. That is noticeably distinct from protecting the particular interests of those in office. I heard what the noble Lord, Lord Purvis, and others said in relation to the 2001 case. However, in answer to the noble Lord, Lord Coaker, the Government do not think it can be defined in legislation. It needs to retain flexibility for future threats as they evolve.
For this reason, it would also not be appropriate for the Secretary of State to attempt to define the UK’s interests in a Statement to Parliament, as in the proposed amendment to Clause 1. Notably, these amendments do not include economic interests, interests related to public health, as the noble Lord, Lord Purvis, noted, or interests related to preserving our democracy—to name just a few areas that would be overlooked by them. We know that these areas are targeted by hostile actors, and they should rightly be protected.
I was asked what safeguards are in place to prevent the Government using this legislation inappropriately—
Lord Purvis of Tweed (LD)
I am grateful to the Minister for giving way. I want to test the issue with regard to economic activity. If the Minister is saying that the Bill will be broad and go beyond national security economic activity, then presumably that brings into its remit all significant areas of major trade disputes where we have mechanisms for reciprocal action for penalising, having punitive tariff responses, et cetera, when effectively there is economic warfare. If the noble Lord, Lord Evans, and the Minister are correct, anyone involved in any trade competitor which is engaged in dumping or activity that may lead to reciprocal trade actions will now be under the remit of the Bill. It is criminalising an offence with potentially 14 years’ or life imprisonment, rather than going through the approach of what other economic trade activity is concerned. Part of the concern is that the Government will be able to decide that all these different areas would now come under the remit of the Bill.
Lord Sharpe of Epsom (Con)
If noble Lords will bear with me, I am going to address that point.
I was saying what safeguards are in place to prevent the Government using the legislation inappropriately—for example, by deciding that someone is acting against government policy but where there is no national security impact. Each offence under this legislation includes tests that must be met in order for the offences to be committed. For example, for a person to commit the Clause 1 offence, they must obtain or disclose information that is “protected” for a purpose that they know, or ought reasonably to know, is prejudicial to the safety or interests of the United Kingdom, and the activity must be conducted for, or on behalf of, or with the intention to benefit, a foreign power. The limits to the type of conduct that is capable of being caught under this offence, in particular the foreign power condition, ensure that there is a state link. Designing the offence in this way clearly focuses the offence on harmful state threats activity.
Additionally, Attorney-General consent must also be obtained before prosecution can be pursued for the majority of offences under Part 1—in the case of Northern Ireland that is the Advocate-General for Northern Ireland—and the Crown Prosecution Service must apply the public interest test.
I understand the intention of these amendments. I would say to the noble Baroness, Lady Jones of Moulsecoomb, that obviously individuals and groups might not agree with government policies, and the noble Baroness makes it very clear that she falls into that category on a regular basis, but they nevertheless represent the policy of the Government who have been elected to act for the country, and disclosing information to a foreign power can never be the right response to that.
As I say, I understand the intention of these amendments, but the Government cannot support them and respectfully ask for them not to be pressed.
Lord Marks of Henley-on-Thames (LD)
My Lords, I entirely understand the position taken by the noble Lord, Lord Evans of Weardale, but, with respect, the fallacy that he falls into, and the fallacy into which the Government fall—the Minister has articulated it—is that, in the interests of being able to prosecute a wide range of activities, they threaten to lower the threshold for such prosecutions to a point where the responsibility for the decision on guilt lies not with a jury considering guilt or innocence but with those who decide to prosecute because they perceive a threat to the interests of the United Kingdom, and the interests of the United Kingdom are very wide.
I agreed with almost everything that the noble Lord, Lord Coaker, said; the one thing he did which I did not agree with was that he misquoted the Bill. The Bill is not about prejudice to the safety “and” interests of the United Kingdom. Everywhere that the phrase occurs, it says the safety “or” interests of the United Kingdom”.
Lord Coaker (Lab)
The noble Lord is quite right; I should have said that, and I meant to. I apologise to the Committee; that is what I meant to say. I thank the noble Lord for clarifying that.
Lord Marks of Henley-on-Thames (LD)
I am quite sure that no apology was needed for what was plainly a slip in a detailed speech made without reference to lots of notes. But the point is an important one, because the protection of the interests of the United Kingdom is free-standing, and the point that almost every noble Lord who has spoken has made is that, because they are defined, there is no clarity at all.
The noble Lord, Lord Carlile, talked about opacity. It is not just opacity; it is that no one can know what is criminal. The prosecutors are there to decide what they will charge—certainly with the consent of the Attorney-General where that is required. However, where they make that decision, the jury is left with an impossible position. The judge is bound to direct the jury properly, under the terms of Chandler—that the interests of the United Kingdom are effectively what the Government of the day determine those interests to be—and the offense is left effectively without any clarity at all. That is our objection. I take it a little further, but it is an objection that illuminates the danger of going down that path. It is unjust not to have clarity about what behaviour is criminal, particularly where the sentences are so serious. It is also damaging to public confidence in the criminal law itself if prosecutors and defenders cannot know what is criminal and what is not.
Baroness Ludford
Member's explanatory statement
This amendment is recommended by the JCHR and would confine the offence of obtaining or disclosing protected information to information that has been classified as secret or top secret (rather than to all information access to which is restricted in any way).
Baroness Ludford (LD)
My Lords, the debate on Amendment 4 flows fairly naturally from the previous debate. The amendment flows from the report by the JCHR, which I am a member of, and is designed to
“confine the offence of obtaining or disclosing protected information to information that has been classified as secret or top secret (rather than to all information access to which is restricted in any way).”
As the offence relates to the sharing of information, freedom of information—which is of course protected under Article 10 of the European Convention on Human Rights—is engaged, including the potential that it could catch journalism, political expression or whistleblowing activity. This could potentially capture a wide range of information, not least given the uncertainty we have just been discussing as to how the words
“safety or interests of the United Kingdom”
might be applied in a given case.
The requirement that the information be “restricted in any way”, or even that it might be “reasonable to expect”—that also harks back to the preceding debate—that information be restricted in any way, lacks clarity and legal certainty. As your Lordships can see, common themes are emerging. It would of course catch information that was not protected but it was reasonable to expect that it would be. The Government’s Explanatory Notes set out that it would cover non-classified information accessible in a building with restricted access, such as a government building.
I recall the severity of the offence; with a potential punishment of life imprisonment, it might be reasonable in the light of that to expect that it would attach to a clear type of information such as that categorised as “Secret” or “Top Secret”. It seems unreasonable and disproportionate that the offence should attach to information simply categorised as “protected”, or indeed official information that is not restricted at all.
The offence as currently drafted in Clause 1 does not make it sufficiently clear what information is considered to be protected for the purpose of this offence. It creates an unacceptable level of legal uncertainty, raising concerns about compliance with rights to liberty and security, the right to a fair trial and the right to freedom of expression, as protected by Articles 5, 6 and 10 of the ECHR.
As proposed by the JCHR report, in the interests of improving legal certainty and proportionality, this amendment proposes that the clause be amended to say that it applies only to information at a certain level of categorisation and therefore sensitivity, such as “secret” or “top secret”. The report suggests that the details of what could be included could be contained in a non-exhaustive indicative list or specified in a statutory instrument, but this amendment is designed to tighten up the offence so that it does not spread too far or impact too much on freedom of expression, journalism and other lawful activities. I beg to move.
Lord Marks of Henley-on-Thames (LD)
My Lords, our Amendment 6 would omit Clause 1(2)(b). Your Lordships will know by now that Clause 1(2)(a) deals with protected information as being when
“access to the information, document or other article is restricted in any way”,
as my noble friend Lady Ludford has explained. However, Clause 1(2)(b) goes on to say that
“it is reasonable to expect that access to the information, document or other article would be restricted in any way”—
that way being entirely unspecified.
It is our position that the inclusion of Clause 1(2)(b) takes the clause far too wide. There is no answer to who would be doing the restricting, or what the determinant would be of when and how it would be reasonable to expect restriction. It might be completely reasonable to expect a mad authoritarian Government to restrict the most innocuous but possibly controversial informational document for the purpose of saving public or national embarrassment. Yet that would not make the entirely unjustified restriction on the information or document any less unreasonable; nor would it make the removal of the document from the public domain more justifiable.
This is a misplaced provision, and it should go. We agree with my noble friend Lady Ludford on the JCHR’s Amendment 4, that the restriction of prohibited information ought to be limited to “secret” and “top secret” categories as a matter of definition.
Lord Anderson of Ipswich (CB)
My Lords, I apologise for not being present at Second Reading. I cannot even claim, like the noble Lord, Lord Purvis of Tweed, that I was broadcasting the benefits of line-by-line scrutiny to a foreign power. I was performing a long-arranged judicial function in the Channel Islands.
I am well disposed in principle to Clause 1, and I entirely understand why the concept of protected information is not limited to “secret” or “top secret”, as the JCHR recommended. However, in the interests of obtaining a little more clarity, perhaps I might press the Minister on this point. Paragraph 63 of the Explanatory Notes states:
“Protected information includes, but is not limited to, classified material.”
Three examples are given. One is about information on the identity of police officers working with security and intelligence services. One is about information on intelligence officers operating in a foreign state. I suspect that they do not get much more classified than that. One is classified information on a defence system.
Bearing in mind that those examples appear to relate to classified information, I would be grateful if the Minister could explain, first, what circumstances he can envisage in which it should be an offence to obtain or disclose information that is not classified, or that could not reasonably be expected to be classified, applying Clause 1(2)(b). Secondly, how is one supposed to know that non-classified information is protected, given that the only controlling factor, other than the purpose of protecting the safety or interests of the United Kingdom—which, as the Committee has just heard, is very broadly framed—is that access should be restricted in some way? On one view, “restricted” could apply to anything, however innocent, that is not actually published. I assume that such a broad meaning is not intended, but could the Minister give us more of a clue as to where the line is drawn?
Lord Ponsonby of Shulbrede (Lab)
My Lords, this group relates to the new offence of obtaining or disclosing protected information. Both amendments pertain to what information should be included in this offence. While the offence currently applies to all restricted information, Amendment 4, moved by the noble Baroness, Lady Ludford, would confine the offence to “secret” or “top secret” information. This amendment reflects recommendations by the JCHR.
His Majesty’s information assets may be classified into three types: “official”, “secret”, and “top secret”. The practical effect of the amendment is therefore to exclude the disclosure of “official” information from the offence. However, according to a 2018 Cabinet Office paper, official information could have
“damaging consequences if lost, stolen or published in the media”
but is
“not subject to a heightened threat profile.”
The Official Secrets Act 1989 includes offences on the disclosure of each classification of information. Amendment 6, tabled by the noble Lord, Lord Marks, and which the noble Lord, Lord Purvis, put his name to, leaves out part of the definition of protected information, which states that
“it is reasonable to expect that access to the information, document or other article would be restricted in any way”.
As noted by the noble Lord, Lord Marks, and in the Explanatory Notes, this is a subjective view of the information.
Given that security officials and civil servants would likely have knowledge of whether or not information is restricted, the inclusion of this line, which would create an offence for when a person should reasonably expect it to be restricted, could impact journalists and civil society. I therefore think that this is an opportunity for the Minister to clarify how he expects that people should be able to reasonably expect that information is restricted or not. I look forward to his response.
The Parliamentary Under-Secretary of State, Home Office (Lord Murray of Blidworth) (Con)
My Lords, I thank all noble Lords, and the noble Baroness, for their contributions to this short debate. I also thank the Joint Committee on Human Rights for its report and its close scrutiny of the Bill. I take the opportunity to confirm that the Government’s response has been published today, and I have asked for a copy to be placed in the Library of the House.
The Government consider that limiting what can be captured under “protected information” to specific security classifications, as the noble Baroness’s amendment seeks to, risks creating loopholes within the provision that could significantly undermine the operational utility of the offence. There are already limits to what “protected information” covers: protected information is any information, document or other article, where, for the purpose of protecting the UK’s safety or interests, access to it is restricted, or it is reasonable to expect that access would be restricted. I therefore suggest that there lies the answer to the question posed by the noble Lord, Lord Ponsonby. Moreover, the current definition of protected information would cover instances where information may have been misclassified but would still be extremely harmful if shared widely.
In contrast to the proposed amendment, the current definition of protected information also includes instances where seemingly less sensitive unclassified information or lower-classification information from within a government building or on a government computer system was obtained but could undermine the safety of the United Kingdom if disclosed to a hostile actor.
To answer the question asked by the noble Lord, Lord Marks, this could include the floor plans of a government building or even an organisational chart of a team working within that building. There are many examples of official documents at lower classification levels that may also be harmful if disclosed, such as information about a UK trade deal with another country. It is imperative that this breadth of information is also covered within the definition.
Lord Purvis of Tweed (LD)
The “foreign power” test, which we will come on to later in the Bill, is extremely broad. Under Clauses 29 and 30, the “foreign power” test can cover the public service broadcaster of Canada. So, if someone who believes that our Government are committing wrongdoing provides a document to the public broadcaster in Canada because they believe that our Government are doing wrong, which is in the global interest, would that be covered, with potential life imprisonment, under this Bill?
Lord Murray of Blidworth (Con)
It would be the case only if those three tests that I have just described are met for the purposes of the offence in the Bill. So it would have to be that the information was protected, that the person ought reasonably to know that, and that its disclosure was prejudicial to the safety or interests of the UK. I imagine that will be the topic of some debate in the context of the hypothetical example that the noble Lord mentioned. It also has to be done with the intention to benefit a foreign power. I cannot see that, in the hypothetical situation the noble Lord mentioned, that issue realistically would arise because the combination of these tests means not only is the proposed offence proportionate but an appropriately high bar has to be met to bring a prosecution under this clause. The Government therefore consider that the definition of protected information is justified and cannot accept the proposed amendments. I invite the noble Baroness, Lady Ludford, to withdraw her amendment.
Lord Marks of Henley-on-Thames (LD)
Following up on my noble friend Lord Purvis’s question, would it not probably be in the interests of Canada in the example he gave to expose wrongdoing on the part of the Government of the United Kingdom? The Government of the United Kingdom might define the interests of the United Kingdom in accordance with government policy in a way which was inimical to the interests of Canada and the offence would still be committed.
Lord Murray of Blidworth (Con)
I find the hypothetical example that the noble Lord postulates hard to follow, because it seems difficult to envisage a situation where a prosecutor could conclude in those circumstances that there was a prejudice to the Government of the United Kingdom and a benefit to the Government of Canada, and that the other elements were present. It seems a most unlikely scenario.
Lord Purvis of Tweed (LD)
I would just like to make sure the Minister is very clear with the Committee. All the decisions that would take place would have to have an objective view that that foreign power benefits. But in my reading, the Bill does not state that. It is simply that providing information to an authority of a foreign Government, which could be a public sector broadcaster such as CBC, is under this Bill. No one has to make the decision that that public broadcaster is then seeking to benefit the Canadian Government. That is not in this Bill.
Lord Murray of Blidworth (Con)
It is the intention to benefit that foreign power that is in this Bill, and it seems to me that that is a sufficiently clear and adequate definition to afford protection under the proposed section.
Baroness Ludford (LD)
My Lords, I was just looking up to see whether the words “intended to benefit a foreign power” were actually in the Bill, but I did not have time. In skimming through, I did not see them.
The Minister’s response has not really reassured me. The lack of definition of “interests of the UK”, with a question mark over what that means and how you could conflate the interests of the country and the interests of the current Government, coupled with the potentially wide definition of “restricted”, suggests, to myself and my noble friends on these Benches at least, a lack of precision and an opportunity that is too wide, especially considering that the penalty that could be faced is life imprisonment. Surely, there is an onus on us to secure a tight definition of offences in this Bill.
The other missing element, which we will come to in further discussions, is the lack of a public interest defence or a whistleblowing defence. What we are facing here is considerable uncertainty about what the real scope of the offence could be. As my noble friend Lord Marks said, the term “restricted in any way” is so undefined, it could cover innocuous but controversial documents, which could be restricted to prevent embarrassment. That is the discussion we keep having on journalism and whistleblowing: we should not open the door to the criminalisation of obtaining or publishing material that could be embarrassing to the ruling party.
I scribbled some notes, but I am afraid I cannot remember which noble Lord made this point. I think it was the noble Lord, Lord Anderson. How are we meant to know what non-classified information is protected? It could apply to anything, however innocent, that was not published. If the Government have a document that they regard as restricted, even though it is not classified, the fact that it has not been published would mean it was restricted, although it may not be damaging except possibly to the reputations of the Government or Ministers.
If I were to get hold of a document saying that a Bill—for the sake of plucking something out of the air, let us say the Northern Ireland Protocol Bill—is designed to assuage some elements of political opinion in the party in power but is highly damaging to the diplomatic and economic interests of the United Kingdom, would that fall within the terms of the offence under Clause 1? In those circumstances, what is the nature of the restriction? What is the harm committed and what is the test of UK interests?
We keep coming back to the considerable grey areas in this whole package around Clause 1 and other clauses. I think we will want to explore this matter further. Otherwise, we are driving a coach and horses through the exercise of freedom of expression and other rights under the European Convention on Human Rights, which for the time being the UK is still a party to.
Lord Purvis of Tweed (LD)
I think my noble friend and I are reading the same version of the Bill, but I am not sure the Minister is. There is no reference to benefiting a foreign power with intent, so I hope that at some stage during Committee the Minister will be able to clarify this position.
Baroness Ludford (LD)
I thank my noble friend very much for that extremely useful intervention. I think we will have further discussion on this whole lack of precision in definitions in the Bill, especially considering the nature of the potential penalty: life imprisonment. You cannot afford to be vague about definitions in that context. In the meantime, I beg leave to withdraw my amendment.
Baroness Ludford
“(ca) the person’s conduct is significantly prejudicial to the safety or interests of the United Kingdom, and”Member’s explanatory statement
This amendment is recommended by the JCHR and would narrow the scope of the offence of obtaining or disclosing trade secrets so that it applies only to trade secrets that would prejudice the safety or interests of the UK.
Baroness Ludford (LD)
My Lords, this is a JCHR-recommended amendment under Clause 2, which is about making it an offence to obtain or disclose trade secrets, punishable by up to 14 years’ imprisonment. Again, the JCHR feels that, as the offence is about the sharing of information, freedom of information—protected under ECHR Article 10—is engaged, including the potential that it may catch journalism, political expression or whistleblowing.
It is difficult to justify this as being in the interests of national security because no element in the offence has a link to the interests of national security, or indeed to the safety or interests of the United Kingdom. In their human rights memorandum the Government did not address the compatibility of this offence with ECHR Article 10. In the offence there is no requirement for there to be any detriment to the UK or to the public. As such, this seems to be really an offence of theft affecting a private actor. It does not really belong in a national security Bill.
The examples given in the Explanatory Notes relate to artificial intelligence and energy technology, which suggests that the Government envisage industries with links to critical infrastructure and national security concerns for this offence, rather than mere commercial secrets—important but not relevant in the Bill—relating to industries that pose no risk to national security. But as drafted the offence risks catching all trade secrets, no matter their relevance or lack of relevance to national security. As I say, that is more properly governed by the offence of theft. In his reply, perhaps the Minister can tell me why it is not covered by the offence of theft.
Lord Carlile of Berriew (CB)
My Lords, I rise with some trepidation to disagree with these amendments, for reasons that I will try to give briefly. Amendment 8 and, indeed, all the others in the group are concerned with intellectual property. My entry in the register of interests discloses involvement with a strategy consultancy. In that role, we sometimes make ourselves available for the investigation of imposter frauds, for example. Many of those frauds can be connected with the attempted theft of intellectual property, not just by individuals and companies but by nation states. Some of those nation states are extremely big and powerful and have the capacity to make full use of the secrets they steal to become world leaders in the marketing of such goods.
I would suggest, with respect, that Amendment 8 shows a misunderstanding of the issue by the JCHR. Indeed, the reason why the proposed Clause 2(1)(ca)—Amendment 8—is not needed is that the reasons for this provision are well set out, in subsection (2)(b) in particular. This is for the protection of some very important and extraordinarily valuable intellectual property, which is created in, and in the interests of, this country. Indeed, if one looks at the other amendments, in particular those seeking to amend subsection (2), one has to think for only a moment to see the problem, and that these amendments defy that problem.
Let us take the example of a university computer science or physics laboratory where leading-edge research is being done or, to take something extremely topical, a vaccination laboratory where research is being done that could make a huge difference to humankind in general. As it happens, it could also make an enormous amount of profit for those creating the scientific inventions and, given the advantages they gain through taxation, for the Government.
It seems to me that the provisions in the Bill are absolutely needed to protect those scientists and inventors. There is a stage between the idea—which may come to someone in the bath or shower—and the production of a patent or copyright during which that idea is not protected by registration. These provisions precisely protect that intermediate area between the idea coming into the scientist’s head and its being registered and protected under the intellectual property legislation, which can be quite slow, very expensive and very complex.
So I respectfully suggest to those who have tabled these amendments that they are not needed and that, in fact, the Bill gives the right sort of protection precisely where it is needed, in the clause in question.
Lord Pannick (CB)
I respectfully disagree with the noble Lord, Lord Carlile. He may well be able to make a compelling case that there is a mischief that here needs to be addressed, but it is surely nothing whatever to do with national security, which is the subject of the Bill. The noble Baroness, Lady Ludford, is right that it is puzzling that there is no requirement in Clause 2 that it be established that the conduct in question is prejudicial to the safety or interests of the United Kingdom. The desirability of improving intellectual property law is really not an appropriate subject for a Bill of this nature.
Moreover, the noble Lord, Lord Carlile, says that if one looks at Clause 2(2)(b), that paragraph ensures the protection. I remind the Committee that all that Clause 2(2)(b) does is define a “trade secret” as information that
“has actual or potential industrial, economic or commercial value which would be … adversely affected if it became generally known”.
That is the loosest possible definition of a commercial trade secret. It is impossible to understand why matters of that sort should be dealt with in the Bill; indeed, that information may be enjoyed or owned by a foreign individual or company.
Trade secret law is very well developed. It includes remedies for damages and for injunctions. To include Clause 2 in the Bill would attract not just the considerable criminal penalties that the noble Baroness, Lady Ludford, referred to, it would invoke Clause 16, on the criminality of preparatory acts—
Lord Davies of Gower (Con)
My Lords, if this is an intervention, could the noble Lord make his point, please?
Lord Carlile of Berriew (CB)
The noble Lord asked to make an intervention, which is why I allowed him to, and I regret that he used the procedure of the House to make a speech. He will be free to make a speech if he wishes to do so.
Lord Carlile of Berriew (CB)
No, I am not letting the noble Lord in now. I am sure he will make a speech if he wishes to in a moment.
I will respond to the noble Lord’s intervention, if I may be allowed a moment to do so. His intervention completely misses the point. He seeks to impose upon us his definition of national security. I do not share his definition of national security. If there is theft by a major state overseas of important intellectual property that has yet to be registered and which could make a huge difference to this country, in my view that falls well within the definition of national security. Indeed, that is why the Government have chosen to include economic issues in the broad definition of national security. So I respect my noble friend’s intervention but I disagree with it. I shall listen very carefully to any speech that he makes—after I have sat down.
Lord Pannick (CB)
I am very sorry. I apologise to the noble Lord and the Committee; I thought he had sat down, and I was not the only Member of the House who thought so.
I have made my speech. The only point that I was going to add was that if we retain Clause 2, it includes the preparatory acts under Clause 16 and the powers of search under Clause 21. For all those reasons, I think Clause 2 should not be included in the Bill.
Lord Wallace of Saltaire (LD)
My Lords, the noble Lord obviously did not know that the noble Lord, Lord Carlile, had not sat down, but he perhaps ought reasonably to have known.
This exchange has focused my mind much more on the following question: part of the grey zone that we are dealing with is whether or not economic security is now part of national security. To a considerable extent, it is. I have not yet fully understood the relationship between the Bill and the National Security and Investment Act, passed last year, which deals with, among other things, some aspects of intellectual property. There may well be—but I am not sufficiently expert on it—a degree of overlap between that Act and what is proposed here.
Lord Carlile of Berriew (CB)
I am grateful to the noble Lord for giving way. The National Security and Investment Act 2021 deals with investment and the transfer of more than 25% of the equity in certain types of companies, and it is very clear. A unit has been set up, in two departments at least, to deal with those provisions. There is no real relationship between this provision and the NSIA.
Lord Wallace of Saltaire (LD)
I am reassured. I declare a certain interest: I have a number of relatives in aspects of scientific research. My son tells me that he is a systems biologist, but I note that engineering biology and synthetic biology are defined in the NSI Act among the strategic areas, and they are in some ways very similar to systems biology. So that is part of my active interest in this area. I am well aware that, in our universities, we have a large number of multinational teams working on the cutting edge of advanced science in a number of different areas. That is part of the grey zone with which we are now dealing and which it is extremely difficult to come to grips with.
I will speak to my Amendment 11, which is very much a probing amendment, raising the question of how we handle the very substantial number of dual nationals we have in this country, both living here and living in other countries—in some cases, they are long-term residents in other countries. If we are moving towards an increasingly unfriendly and difficult international environment, as we are already seeing, dual nationals will come under increasing pressure, not just from what we may do, mildly, within the Bill but from the other countries of which they have citizenship and with which they have connections. We have seen the pressures that the Iranian Government are willing to push on to the family members of dual nationals or single British citizens living in this country, and we have seen the same in China. Therefore, there are a number of questions about whether we need to take on board the presence and complexity of our dual-national citizens as part of the complications of the Bill.
I am also conscious that, unless the Minister can reassure me, we have no idea how many dual nationals we have, who they are or where they are. All the questions I posed during the passage of the Elections Act about our overseas citizens, and potential overseas electors, have told me that we have very little idea of who and where they are. I raise this because I simply do not know whether there is a problem or how serious it may be. But it seems to me that we should pay more attention to a world in which some hostile foreign states will do their best to bring all the pressures that they can on British citizens with origins in their country or dual citizens.
Baroness Manningham-Buller (CB)
I will not take very long; I will just correct the suggestion of the noble Lord, Lord Wallace, that economic pressures on national security are a new addition. The Security Service Act 1989—the noble Lord, Lord Beith, who is not in his place, referred to this—talked about protecting the
“economic well-being of the United Kingdom”.
This is not a new issue. That is a point of clarification, for which I have not taken too much time.
Lord Macdonald of River Glaven (CB)
My Lords, on the minor tiff between the noble Lords, Lord Pannick and Lord Carlile, both of whom I have great respect for, I am inclined to side with the noble Lord, Lord Carlile. I have no doubt at all that economic well-being is an aspect of national security. It is worth observing that Clause 2(1)(d) requires that
“the foreign power condition is met in relation to the … conduct”
in question. In Clause 29, the “foreign power” condition is:
“For the purposes of this Part the foreign power condition is met in relation to a person’s conduct if … the conduct in question, or a course of conduct of which it forms part, is carried out for or on behalf of a foreign power, and … the person knows, or ought reasonably to know, that to be the case.”
That is the sort of conduct that we are talking about. We are not talking simply about one commercial organisation stealing a science secret from the University of Oxford; we are talking about this conduct being carried out at the behest of a foreign power, which rather colours the matter in the way that the noble Lord, Lord Carlile, described.
Lord Faulks (Non-Afl)
My Lords, I had two points to make, the first of which, about foreign power, has just been made by the noble Lord, Lord Macdonald, so I will not repeat it. The second is more of a question. The noble Baroness, Lady Ludford, asked, “Why not charge theft?” I have no doubt that I will be advised by the Minister, but is there not a requirement that you have to deprive somebody permanently of something to constitute the offence of theft? I can see some potential argument that somebody charged under that offence would say that they had no intention to deprive that person permanently of that information.
Lord Marks of Henley-on-Thames (LD)
My Lords, I have not yet spoken to Amendments 9 and 10, which I was proposing to do before my noble friend spoke for us. Before doing so, I join my noble friend Lady Ludford in opposing the protection of all trade secrets without any requirement for there to be prejudice to the interests of the United Kingdom. That amendment, which has been proposed on behalf of the JCHR, seems to me to be sensible. I also share her bemusement, and that of others, that trade secrets are included in the Bill, because the way in which they are included is extremely wide.
The noble Lord, Lord Pannick, has pointed out that Clause 2(2)(b)—he read it aloud, but I will not repeat doing so—is so wide that it effectively covers any information which has any commercial value of any significance. Of course, that information is important, and, to that extent, I accept the points made by the noble Lord, Lord Carlile. However, state actors may also steal, or act nefariously in respect of, trade secrets—as may others, be they state actors or not. They may be from the United Kingdom or abroad. They may be connected to national security, but if the Bill will deal with trade secrets, they need to be defined in such a way that it is confined to trade secrets that present a threat to national security. The Bill goes far too wide if we include wide threats to trade secrets in the criminal proceedings—which, as my noble friend Lady Ludford said, carry very heavy sentences—without the need to prove the threat to national security as an element of the criminal offence. As the noble Lord, Lord Pannick, said, threats to trade secrets are normally dealt with in the civil courts, where the protection to intellectual property is customarily and very frequently dealt with every day.
It is absolutely right, as the noble Lord, Lord Macdonald of River Glaven, pointed out, that there is a requirement that the foreign power condition must be met. However, the foreign power condition in Clause 29 is not a very difficult hurdle to surmount. The present drafting does not require any prejudice to the security, defence or other interests of the United Kingdom. It is met if conduct is carried out not by a state Government but by any entity controlled or financially assisted by a foreign power—so that could be a commercial organisation that happened to be state-controlled. For “foreign power”, we have to read that as any power or any other state, including any friendly Government from anywhere in the world.
Our Amendments 9 and 10 tighten up the wording on trade secrets in Clause 2, but only in a limited way: by requiring that a trade secret must be subject to measures to prevent it becoming generally known or available to rival experts in the field. We suggest that it is simply not satisfactory—
Lord Carlile of Berriew (CB)
I have been listening very carefully to the noble Lord, whom I always listen to with great respect. Can I take it that he or his party will put down an amendment to the Long Title of the Bill in due course? Perhaps he has not read the Long Title in full, because, as far as I can see, it covers all these amendments in the exact way in which they are intended. We are in danger of over-sophisticating a non-existent definition of national security.
Lord Marks of Henley-on-Thames (LD)
I am bound to say that I discussed that before the noble Lord came in. Since, in my opening speech on the first group of amendments, I quoted specifically from the Long Title of the Bill dealing with Part 1 offences, I do not accept the criticism that I have not read it. Nor do I accept the criticism that it is apposite to threats that have nothing to do with national security, because the Long Title—which starts by dealing with Part 1, as far as the first semi-colon—is about making provision about threats to national security. My point is that, if you protect trade secrets in these very wide terms, it may include threats to national security, but it is not limited to threats to national security and it may go far wider.
It is not satisfactory for trade secrets to qualify for protection just because the information in those secrets might be reasonably expected to be subject to measures to prevent them becoming known generally. What would the measures be? Would they be imposed by a court, by government or by regulation? That is undefined. Perhaps the Minister, in replying, would explain what those measures might be. How does it help to protect trade secrets that are not subject to any protective measures, as the Bill specifically envisages? The clause raises far more questions than it answers.
Lord Purvis of Tweed (LD)
My Lords, I will very briefly follow my noble friends to agree with that proposition. There has been reference to the foreign power condition, and I will refer to that too.
First, I take the opportunity to say that I am grateful to the Minister for what he said to me earlier by highlighting Clause 29(5). Yes, it does include that the foreign power condition can be met,
“if the person intends the conduct in question to benefit a foreign power”,
without necessarily identifying that foreign power. However, that is not an exclusive meeting of the test, as my noble friend Lord Marks has indicated. The test can be met, for example, if one of two business partners who has some intellectual property or something of commercial value is in negotiations with, say, a sovereign wealth fund in the Gulf and then there is a dispute between the two business partners. While one wants to sell that to the sovereign wealth fund in the Gulf, the other says, “You can’t do that, because that is now in breach of the National Security Bill, because I believe that this is a trade secret.” That is because a foreign power, under Clause 30(1)(c), is
“an agency or authority of a foreign government”,
so a sovereign wealth fund seeking investment could be within that definition. Therefore, I have sympathy for the point made by the noble Lord, Lord Carlile, but a counterpoint has been raised by asking whether the Bill is the most appropriate way for national security to cover those aspects—and, on balance, I do not think that it is.
However, I agree with the noble Lord, Lord Carlile, that the acquisition, use or disclosure of a trade secret is unlawful where the acquisition, use or disclosure constitutes a breach of confidence in respect of confidential information. As I understand it, that was the thrust of his argument. That is also the law: we have transposed the Trade Secrets (Enforcement, etc.) Regulations 2018 into UK law, so we have that intellectual property legislation—including a nine-page trade secrets regulation. I listened very carefully to what the noble Lord said, and all of it, I think, is covered within existing legislation. The question then arises as to what the intent would be if one is either selling a trade secret or giving a trade secret to a foreign power to advance that foreign power.
That could absolutely be included in the Bill. The concern is that, given the way the Bill is drafted, so many other aspects could also be. That is the point we are trying to tease out: whether the Government intend that trade secrets are, as the noble Baroness indicated, some form of economic warfare, espionage or tactic. That is where the interest of the Bill should lie. It should not be the mechanism whereby trade disputes, commercial disputes or intellectual property disputes are resolved. Ultimately, that is where the Bill could be used. I do not think there are any in this Committee, but I am certain there are creative lawyers who might look for the most appropriate vehicle for the less appropriate cause. I am worried that the Bill would become one of those.
Lord Coaker (Lab)
My Lords, the amendments in this group relate to the new offences of obtaining or disclosing trade secrets. We support these new offences and agree that the Government should safeguard against threats to the UK’s trade policy. We see them as important amendments. None the less, we have had an interesting and important debate today. As the noble Lord, Lord Marks, has outlined, Amendments 8, 9 and 10 are about trying to understand why the Government believe that the offences need to have such a wide scope and whether narrowing them down would really have the unintended or bad consequences that the Government believe they would.
I have a couple of specific questions for the Government. The Bill says that there has to be a direct link to a foreign power, but suppose somebody obtains information such as a trade secret and sells it not to a foreign power but to a competitor business. Is that covered under the legislation? Is it the case that, under the Bill, to prosecute there would need to be a link from the individual to a foreign power and not just to a competitor within the UK?
The measures in Clause 2(4) to (7)—I think the noble Lord, Lord Wallace, referred to this in his Amendment 11—are really quite important. Why can the offence take place only outside the UK if it is in respect to possession by a UK national, as opposed to a UK national and/or a UK resident, or any other description of persons? Having talked about a narrow definition, I wonder why the Government have restricted the measures in subsections (4) to (7) to a UK national. I would be interested to hear the Government’s answer to that.
An interesting discussion and debate has taken place within the Committee about the JCHR recommendation. It is an interesting point that we will all want the Government to clarify. What is the Minister actually saying to the points from the noble Lords, Lord Carlile and Lord Marks, and the noble Baroness, Lady Ludford? The JCHR quite clearly states that:
“The theft of trade secrets that pose no risk to national security is more properly governed by the offence of theft (and other breach of confidence and intellectual property rules) than through new espionage offences.”
It would be interesting to understand whether the Government think the JCHR is wrong or whether it has a point. If the JCHR is wrong, why do the Government believe it is wrong? Maybe the points made by the noble Lord, Lord Carlile, have greater relevance with respect to this Bill. With those few remarks, I look forward to the Minister’s response.
Lord Sharpe of Epsom (Con)
My Lords, I thank all noble Lords who have participated in another lively and entertaining debate. Amendment 8 seeks to add a “safety or interests of the UK” test to Clause 2. Amendments 9 and 10 seek to narrow the definition of a “trade secret” so that it captures only information which is actually subject to measures to protect it. Amendment 11 seeks to expand the scope of a “UK person”. The Government reject these amendments and I will try to explain why.
The offence of obtaining or disclosing trade secrets targets threats designed to undermine our economic prosperity, tackling the whole-state approach to national security adopted by state actors. The Government believe that economic prosperity and national security are inherently linked. You cannot have one without securing the other, and Clause 2 seeks to protect both.
Lord Coaker (Lab)
I am not going to disagree with the Minister, but on the question of the letter—and I am pleased that he is writing to me—could he put it in the Library, and do that with respect to all the letters, so that every noble Lord can see his answers to the various questions?
Lord Sharpe of Epsom (Con)
Yes, I am happy to give that reassurance. This is just me flying somewhat solo, so I shall clarify that, but I can think of a number of circumstances where it would very much depend on the corporate. But I shall seek official clearance on that. In light of all those answers, I respectfully ask the noble Baroness to withdraw her amendment.
Baroness Ludford (LD)
My Lords, that was another interesting debate. I am very grateful to the noble Lord, Lord Pannick, for defending the honour of the JCHR against a charge of naivety from the noble Lord, Lord Carlile, which I reject. I am sure that the JCHR is capable of understanding the noble Lord’s points.
As the noble Lord, Lord Pannick, said, there is a mischief here. As the noble Lord, Lord Macdonald, said, economic espionage can be against national security—and it can be, but I think that the Minister went further than that. He said that economic prosperity and national security were synonymous. That is a very broad assertion. For instance, the shareholders in Tesla apparently believe, because the share price of Tesla has dropped rather fast, that Elon Musk has neglected the economic prosperity of Tesla by his concentration on Twitter. I do not think that any of us would regard the share price of Tesla as affecting the national security of the United States. I believe that the Minister is wrong in saying that economic prosperity and national security are synonymous, but of course I accept that economic espionage can certainly damage national security.
As my noble friend Lord Marks said, my Amendment 8 intends precisely to put in a test or condition that the theft of a trade secret is prejudicial to the “safety or interests of the United Kingdom”, preferably with that term redefined by amendments from these Benches. Without that condition, as the noble Lord, Lord Pannick, said, Clause 2 does not belong in this Bill. I conclude that I am really not persuaded by the arguments against Amendment 8. When damage to economic prosperity is also harmful to national security, that would be satisfied, if a test of that was added—and I have not heard an argument as to why that test is missing from Clause 2. If the Minister is correct that economic espionage and damage to national security are synonymous, what is the harm of putting in a definition, as the amendment suggests? But I have not yet persuaded the Minister, or indeed some other Members of the House, so for the time being I beg leave to withdraw the amendment.
“(c) intends that the conduct will prejudice the safety or security or defence interests of the United Kingdom.”Member's explanatory statement
This amendment adds a further intentional element to the offence in Clause 3.
Lord Marks of Henley-on-Thames (LD)
My Lords, the amendments in this group would add a mental element of intention to prejudice the safety and security or defence interests of the UK to a number of offences in the Bill—those in Clause 3, assisting a foreign intelligence service; in Clause 4, entering a prohibited place; Clause 5, unauthorised entry to a prohibited place; and Clause 16, preparatory conduct to any of the offences in Clauses 1, 2, 4 or 12. The amendments also add, importantly, a similar mental element of intention to prejudice to the foreign power condition that we discussed in the last group, in Clause 29.
The Clause 3 offence of assisting a foreign intelligence service would require intent to prejudice the safety, security or defence interests of the United Kingdom to be proved. That would answer my criticism at Second Reading that the Bill would criminalise a private citizen who helped Mossad to trace possessions looted by the Nazis from their victims, or criminalise the private citizen who helped the CIA to trace war criminals and bring them to justice from whatever theatre. Noble Lords may remember that the only answer that the Minister, the noble Lord, Lord Sharpe, gave to my example of a citizen working for Mossad was that
“we would expect that the UK would have been made aware of such activity and it is possible that the UK would have made an arrangement with Israel. As such, the activity would have a defence in Clause 3(7)(c)(i)”.—[Official Report, 6/12/22; col. 156.]
On analysis, that is no answer at all. There is no legitimate reason why a British citizen should not assist the intelligence service of a friendly nation to achieve ends which are not remotely inconsistent with the interests of the United Kingdom. It is entirely wrong, not to mention high-handed and often either impractical or impossible, to suggest that the citizen should have to go through one of the hoops set out in Clause 7 of demonstrating a legal obligation, carrying out a UK public function, or being in accordance with an agreement with the UK or a proxy of the UK to make his or her conduct lawful.
The proper way out of this difficulty is to criminalise assistance to a foreign intelligence service only if it is intended to prejudice the safety or security or defence interests of the United Kingdom—although, as I pointed out in an earlier group, I am not wedded to those words. But it must be clearly defined, and that is the point of the proposal in Amendments 12 and 15. That is consistent with the aim of the Bill, which the clause as drafted, with its breadth, is not.
The noble Baroness, Lady Ludford, has Amendment 16 from the JCHR in this group, which we support, but we stress the need for the interests of the United Kingdom to be defined by reference to national security; the disjunctive safety or interests of the United Kingdom generally is not enough.
Amendment 19 adds a similar requirement to the Clause 4 offence of entering a prohibited place. That clause is less offensive as it stands, because it already requires knowledge or imputed knowledge that the conduct in question is prejudicial to the safety or interests of the UK. If our amendments in groups 1 and 2 were accepted, as they have not been as yet, all Amendment 19 would add is a positive intention requirement, which we say is justifiable and needed but which would not cause great problems by its omission if those amendments were accepted.
Amendment 20 to Clause 5, the summary offence, is more in need of change, even if our amendments in groups 1 and 2 were accepted. The noble Baroness, Lady Ludford, has Amendment 21 in this group, with a similar change to Amendment 16 of requiring the intention to prejudice, which we support, subject to the same proviso regarding the definition of UK interests.
Amendment 47 adds an intentional prejudice element to the Clause 15 offence of obtaining a material benefit from a foreign intelligence service. Again, as drafted, this is far too wide and ill defined. If a journalist is paid to investigate or write a story for the intelligence service of a friendly nation, entirely compatibly with the national interests of the United Kingdom, he should not be guilty of a criminal offence unless the benefit derived was, in the words of the Bill,
“reasonable consideration for the provision of goods or services”,
and so was within the so-called excluded benefits in Clause 15(4).
Baroness Jones of Moulsecoomb (GP)
I have watched quite a number of debates in your Lordships’ House and am always struck that the Government invariably reject all the wonderful advice they get from their KCs and former judges. I appreciate that it is much harder when they disagree, but perhaps they ought to look a little more closely at these amendments, read Hansard and think about changing some of the Bill.
These are extremely serious offences. They are meant to protect national security, but currently they do not need intention to be proven. That is incredibly important. A person could unwittingly commit a serious criminal offence without having the foggiest clue that they were doing anything wrong. That is not to suggest that ignorance is a defence, but unintentional consequences to the UK’s interests should not be a serious criminal offence.
One example that is extremely important to me is journalists and whistleblowers exposing government wrongdoing. As the noble Baroness, Lady Ludford, said in the previous group, it is a perfectly legitimate activity that risks being criminalised by this legislation. The intention of journalists and whistleblowers is not to harm national security but to hold power to account. That is partly what your Lordships are doing in this House, so we should take every opportunity to support journalists and whistleblowers who do it too. I am concerned that they might be trapped by this legislation.
Likewise, the offence in Clause 15 risks criminalising people for receiving a benefit from an intelligence service. Those benefits include receiving information. A person could commit a criminal offence simply through a foreign intelligence service telling them some information which they may not want to hear, potentially completely against their will. Overall, these clauses are deeply flawed and need substantial rewriting.
Baroness Ludford (LD)
My Lords, I will speak to Amendments 16 and 21. I will get a bit repetitive in the debates on this Bill, since I am speaking to amendments stemming from the JCHR, whose job is to pay attention to human rights.
The problem that Amendment 16 seeks to address is that the conduct that could be criminalised is very wide and could include conduct that engages a number of human rights, most obviously freedom of expression, as the noble Baroness, Lady Jones of Moulsecoomb, said—journalism, other political expression and possibly whistleblowing—but also freedom of association and the right to protest. The Government have not sought to justify any interference with human rights in respect of this new offence in their human rights memorandum. It seems difficult to argue credibly a national security justification for bringing proceedings under this clause when there is no prejudice to the safety or interests of the United Kingdom in the test of the offence.
Conduct outside the UK is not caught unless it is
“prejudicial to the safety or interests of the United Kingdom”
but that test does not apply to conduct within the UK. I hope the Minister can explain why. The JCHR gives the example that the offence would seem to criminalise a French national in the UK who alerts the French intelligence authorities to a terrorist threat in the UK. Let us posit that they do not know how to alert the authorities in the UK. It does not seem very sensible to criminalise such behaviour. Amendment 16 suggests a requirement that the conduct must have the potential to harm UK interests—
Baroness Manningham-Buller (CB)
I may have misunderstood the noble Baroness, so perhaps she would be kind enough to clarify. Did she say that the French intelligence service would not know how to contact the British authorities about an incident in the UK? It may be my fault for not hearing—I apologise if it was.
Baroness Ludford (LD)
It is possible that I gabbled. I would not suggest that the French intelligence authorities would not know how to contact their UK counterparts; I think we all hope and believe that there is close collaboration between them.
Baroness Manningham-Buller (CB)
I assure the noble Baroness that they absolutely would.
Baroness Ludford (LD)
Of course; the example in the JCHR report was of a French national in the UK—an ordinary person working in a bar or a bank who alerts the French intelligence authorities to a terrorist threat in the UK. It may or may not be hugely realistic, but that would be criminalised, which does not seem very sensible. The focus of Amendment 16 is to add a test of
“prejudicial to the safety or interests of the United Kingdom”,
always with the caveat that we want that test to get further attention and elaboration.
Amendment 21 concerns the offence of entering a prohibited place, which is punishable by up to 14 years’ imprisonment. Clause 5 is about accessing a prohibited place where
“the person knows, or ought reasonably to know, that their conduct is unauthorised.”
There is no requirement in this offence for any prejudice to the safety or interests of the UK. The JCHR suggests that it is more akin to an offence of criminal trespass—it will have nothing to do with national security, unless there is some sort of test of national security.
All the amendments I have spoken to today are about tightening up definitions so that we do not inadvertently catch what ought not to be criminalised behaviour and avoid any clash with human rights under the HRA and the ECHR.
Lord Pannick (CB)
My Lords, I share the concerns expressed by the noble Lord, Lord Marks, and the noble Baroness, Lady Ludford, about the breadth of Clause 3, particularly Clause 3(1), and the absence of any requirement that the defendant intends that the conduct will prejudice the safety or security or defence interests of the United Kingdom.
The noble Lord, Lord Marks, gave a practical example relating to Mossad which I will not repeat. I have a concern because of my professional interest as a practising barrister, and I would welcome advice from the Minister as to whether I will be committing a criminal offence under Clause 3(1) if I give legal advice to a foreign intelligence service in carrying out UK-related activities. Clause 3(1) refers to “conduct of any kind”; it is a criminal offence, punishable with 14 years’ imprisonment, for me to materially assist a foreign intelligence service in carrying out UK-related activities. My advice, of course, may be to say to that foreign intelligence service, “You can’t do this in the United Kingdom, it would be unlawful, and you should be aware of that”, but what are the potential defences if I am prosecuted? Under Clause 3(7), it is a defence for me to show that I am acting
“in compliance with a legal obligation under the law of the United Kingdom which is not a legal obligation under private law”.
I am very doubtful that my actions as a practising barrister fall within that provision. It is a defence, however, under Clause 3(7)(b)
“in the case of a person having functions of a public nature under the law of the United Kingdom”.
I do not have that; I am a mere practising barrister. Clause 3(7)(c) relates to some agreement with the United Kingdom; that does not apply.
The only other defence that I could offer when I am prosecuted at the Old Bailey for giving legal advice is the exemptions for legal activity which are in Schedule 14, but they seem to me—and I would be delighted to be corrected if I am wrong—to be exemptions confined to the provisions to which we will come which concern requirements to register foreign activity arrangements and foreign influence arrangements. We are not talking about that; Clause 3 is not concerned with any of that. My question to the Minister is please can I be told whether the legal advice that I give as counsel to a foreign intelligence service falls within the scope of Clause 3(1). I raise this not just because I am very concerned not to end up at the Old Bailey but because that demonstrates that Clause 3(1) is far too wide. It really needs to be redrafted to ensure that it addresses only matters of national security.
Baroness Manningham-Buller (CB)
My Lords, I understand the wish of the noble Lord, Lord Marks, to define and narrow this part of the Bill. To a degree, I have some sympathy with him. I would like to answer the Mossad point and make a second point. For Mossad to operate in the United Kingdom, there would be an understanding that it should declare its activity. Therefore, I do not think this problem would arise unless it deliberately chose to conceal it, because it would be seeking support and help.
The second point is that if we make it too narrow about what British interests are, we will exclude those foreign intelligence services—including some of our friends—who act against their own citizens in this country, which we would regard as against British interests in the broadest sense though it does not directly threaten British interests. There is a range of activity that this Bill seeks to capture which is not absolutely directed against the UK but may be directed against other people here and which is unacceptable.
Lord Hacking (Lab)
My Lords, I have been out of the House for about three months, and it is very refreshing to come back to your Lordships’ House and one comes back with a rather clear mind. If one just reads the contents of Amendment 12—I have not had time to study the other clauses that the noble Lord, Lord Marks of Henley-on-Thames, is addressing—and the simplicity of it, one wonders what the Government could be objecting to. I, of course, share the concern that the noble Lord, Lord Pannick, should not go to the Old Bailey and be sent to prison.
Lord Coaker (Lab)
My Lords, we all hope that the noble Lord, Lord Pannick, will not be criminalised by this Bill, but we look forward to the Minister’s response and for the exemptions to which the noble Lord referred to cover him.
I want to make a couple of brief remarks, again supporting what the noble Lord, Lord Marks, is trying to do, which is to narrow the focus—that has been the subject of much of the debates have had on the various amendments. This amendment would require an intention that the conduct will prejudice the safety or security or defence interests of the United Kingdom and apply that to a number of clauses. The noble Lord, Lord Marks, has outlined quite adequately why a discussion about that and a decision for the Government are needed. I hope that the Minister will explain why the Government do not think it is necessary rather than just dismissing it.
I wanted something to be clarified, notwithstanding the fact that it may be a simple response. On visiting many military bases, one finds people outside them taking photographs and numbers and watching the activity because it is a pastime; it is something that is of interest to them. I do not think that the Bill will criminalise that, but on behalf of people who have an interest in something that I personally would not have an interest in doing, I wonder whether the Minister could clarify it. I have seen people taking photographs at RAF bases of the planes taking off. It is simply something of interest to them. It would be helpful for the Minister to clarify that they would not be caught by the Bill, even if unintentionally.
The noble Baroness, Lady Jones, was right to remind us about intention. It is important. We will come to the public interest debate later, but she referred to journalists and whistleblowers, who risk being criminalised even though their intention is not to undermine national security. That will take us to the public interest defence debate that we will get to later in the Bill.
In answer to the points and amendments from the noble Baroness, Lady Ludford, I think that the JCHR amendments—whether or not they are all right, and we heard a debate earlier on about them—are really important for the JCHR to have put before the Committee. What it is essentially saying is, “We think this is possibly something which impacts on the freedoms that we enjoy in our democracy”, freedom of expression being the one that the noble Baroness just referred to. The Government seek to modernise the national security law, which we all agree with—there is no disagreement in the Committee about that—but the noble Baroness, Lady Ludford, should not apologise for the JCHR; rather, we should congratulate it on coming to all of us and asking us to justify what we are doing and on asking the Government to justify what they are doing in the name of national security. There is a compromise to be made sometimes between national security and complete freedom to do X, Y or Z. All of us accept that. The debate, as we heard on earlier amendments, is where you draw the line. I, and other noble Lords, think it is important—whether in respect of this group or others—that a debate takes place in this Parliament, and we should attempt to do better at defining what we actually mean rather than just leaving it to the courts.
I say to the noble Baronesses, Lady Ludford and Lady Jones, and to others who continually remind us about the JCHR that I am sure it is sometimes immensely irritating to the Government, but that is the job. That, in a non-flippant way, is important, because there are compromises with freedom of expression, freedom of association, freedom to do X, Y or Z, and freedom for people to go about doing things exactly how they want to. It is a price we pay for our national security; how high that price should be is something we should not flinch from debating in this House.
The amendments from the noble Lord, Lord Marks, seek to put intent into these offences. If the Government do not believe that is important, it is necessary to argue the case as to why. On whistleblowers, journalistic freedom and so on, which the noble Baroness, Lady Jones, mentioned, I am sure we will come to that debate later when we discuss the public interest defence. I finish by saying again to the noble Baroness, Lady Ludford: more power to your elbow.
Lord Murray of Blidworth (Con)
My Lords, I thank noble Lords for another very interesting short debate. These amendments seek to amend or add a safety or interests test to the various offences throughout the Bill. I will address each offence separately, given the different effect each amendment will have on each offence.
Amendments 12, 15 and 16 would narrow the scope of the offence of assisting a foreign intelligence service, so that the offences would apply only to assistance that would, or is intended to, prejudice the safety or interests of the United Kingdom. The Government reject these amendments. We believe that any activity taking place in the UK on behalf of a foreign intelligence service that the UK has not even informally agreed would be inherently prejudicial to the safety or interests of the UK. I pause, as here lies at least some explanation to the noble Lord, Lord Pannick, who none of us want to see in the dock in Court 4 of the Old Bailey.
Creating an additional legal test to prove beyond reasonable doubt why that activity is prejudicial would add an unnecessary hurdle for a prosecution. The noble Lord, Lord Marks, asked why the Government are criminalising assisting a friendly foreign intelligence service in the case of Mossad. The noble Lord, Lord Pannick, and the noble Baroness, Lady Manningham-Buller, also dealt with this example. I would say that we are criminalising covert assistance and I highlight the additional safeguard of the public interest test in the prosecution. We believe that any activity taking place in the UK on behalf of a foreign intelligence service that the UK has not even informally agreed to would be inherently prejudicial.
We would be happy to consider further the point raised by the noble Lord, Lord Pannick, on the drafting of Clause 3, but need more information about that hypothetical situation. Who would counsel be advising and when? For example, is he advising a foreign intelligence service which has an agreement to operate in the UK? In those circumstances, the prosecutor’s options would of course be very different.
On Amendment 16, the existing distinction between activities taking place inside the UK and those taking place overseas was deliberate. For activity taking place overseas, Clause 3(4) requires the conduct to be prejudicial to the safety or interests of the UK. This has been done to ensure that we target activity overseas which has an appropriate link to the United Kingdom. On this amendment, and Amendments 12 and 15, it is the Government’s view that activity taking place inside the UK, where not covered by the defences in Clause 3(7) and without even informal agreement or consent, is inherently prejudicial to the UK’s safety or interests.
As I understood the example from the noble Baroness, Lady Ludford, of a French citizen working in a bar or a bank, surely the answer is that they could simply call 999. I do not think there is any need to tighten up the definition in the context of the example she gave. In further response to the points the noble Baroness raised, I quote from paragraph 43 of the Government’s formal response to the JCHR report:
“Alerting a foreign intelligence service to a potential terrorist plot against the UK would not be conduct in relation to UK activities by that intelligence service. If the UK and France have an agreement to work on such activity together in the UK then that would fall under one of the defences available.”
Regarding Amendment 19, it is the Government’s view that an individual who knew, or reasonably ought to have known, that their conduct has a purpose that is prejudicial to the safety or interests of the United Kingdom should not be outside the scope of the offence simply by virtue of it not being the intention behind the activity to cause harm to the UK. To require the higher level of intention that this amendment seeks to introduce would create gaps that would jeopardise our ability to prevent harmful activity at the sensitive sites these provisions seek to protect. The Government consider it correct to penalise such conduct irrespective of the specific intention of the perpetrator, so long as they have, or should have, knowledge of the damage their action could cause. The Government therefore cannot accept the proposed amendment.
I will address Amendments 20 and 21 together, given that they both would add some variation of the safety or interests of the UK test to Clause 5. For the current Clause 5 offence to be committed, a person must engage in specified conduct in relation to a prohibited place that is unauthorised. They must know, or ought reasonably to know, that their conduct is unauthorised. This therefore protects those who have no reason to know that the activity they are conducting at that specific location is not authorised. There is no requirement to prove intent against the United Kingdom, as the offence is aimed at circumstances where activity is unauthorised but it cannot be established that a person had a purpose they knew, or reasonably ought to have known, was prejudicial to the safety or interests of the UK. For example, if a person trespasses on a site that they know is a prohibited place and steals something from it, that is not on the face of it damaging to the safety or interests of the UK. This is reflected in the lower maximum penalty for this offence of six months’ imprisonment.
The Government consider that including a further condition to prove that conduct is prejudicial to the safety, security or defence interests of the UK significantly reduces the utility of this offence and creates an unhelpful overlap with the Clause 4 offence. This would result in these provisions not being able to capture the full range of potentially harmful activity that prohibited places face. I add that it would seem clear that the innocent photographer taking pictures of RAF aircraft at an air show would not be caught by this offence for the reasons I have set out.
Amendment 47 would add an additional condition to the offence provided in Clause 15(1). The Government reject this amendment because it would create an additional and unnecessary evidential burden to overcome, severely limiting the efficacy of the offence at preventing hostile foreign intelligence activity against the UK. I suggest that no one would ever be prosecuted in the hypothetical situation advanced by the noble Lord, Lord Marks.
The effect of the amendment would be to require the person committing the offence to know, in all circumstances, what the foreign intelligence service intended to do through the provision of the relevant material benefit. Furthermore, the prosecution would be required to prove that knowledge in court on the basis of admissible evidence, which would be a difficult task.
Were this offence to be amended as suggested, it could be simply circumvented by the foreign intelligence service ensuring that the person who would otherwise commit the offence is not told what is intended. In such circumstances, conduct as set out in the offence as drafted would not be a crime. It is the Government’s view that a foreign intelligence service funding operations in the UK is inherently prejudicial to the safety or interests of the United Kingdom.
As to Amendment 49, noble Lords seek to include an additional element of intent as part of the preparatory conduct offence under Clause 16, through the addition of a provision requiring proof that persons engaged in preparatory conduct were acting with a purpose that they knew would prejudice the safety or security or defence of the United Kingdom. In the Government’s view it is unnecessary to include this additional element; if a person engages in preparatory conduct with the intention that it will lead to one or more such offences, the preparatory conduct offence will be committed only if the person has the intention that each element of those offences will be met in the future. I do not accept that the offence could be unintentionally committed in the manner postulated by the noble Baroness, Lady Jones.
Baroness Ludford (LD)
The Minister has the advantage of having read the Government’s response to the JCHR report. As a mere member of the JCHR, I know that, unfortunately, two months after Report, it did not come in time for this Committee, let alone Second Reading. I look forward to reading it.
I did not follow every detail of what he read, but could the Minister tell me what guards against someone being prosecuted under Clause 5,
“Unauthorised entry etc to a prohibited place”?
The clause raises worries about protestors, journalists, photographers and so on, and does not have a test of breaching national security because the criteria in Clause 4—where there is a test of prejudice to the safety or interests of the UK—are not met. It could look as though you have the lower offence, with the possibility of six months imprisonment, where there is no purpose to assist a foreign power and no prejudice to the interests of the UK, but the catch-all of Clause 5, where anyone who wanders on to Ministry of Defence land can attract a six-month prison sentence, whether or not they have done any espionage or harm to the security of the UK. What is the defence to Clause 5 being some sort of compensation for not being able to charge under Clause 4?
Lord Murray of Blidworth (Con)
As I sought to explain to the Committee, the Clause 5 offence can be committed only where a person engages in the specified conduct in relation to a prohibited place that is unauthorised, and they must know, or ought reasonably to know, that their conduct is unauthorised. It is specifically the point, as I hope I alluded to in my remarks earlier, that the Clause 5 offence is the summary-only offence, which is intended to preclude unauthorised entry to prohibited places to avoid the risk of national security consequences.
Lord Pannick (CB)
Can I respectfully ask the Minister to write to me before Report, and place a copy in the Library, with a fuller explanation of why I would not be committing a criminal offence by giving advice to a foreign intelligence service? The noble Lord asked what advice; the very simple example I gave was being asked by a foreign intelligence service to advise it whether certain conduct would be unlawful in this country. Would it be a criminal offence for me to advise it on that? Grateful though I am to the Minister for his expression of the hope that I do not end up at the Old Bailey, I would like greater comfort than that. He did perhaps go a little far in suggesting that that would be the view of all noble Lords, but I am grateful for his personal assurance.
Lord Murray of Blidworth (Con)
I will endeavour to make sure that that letter goes to the noble Lord as soon as it is prepared.
Lord Purvis of Tweed (LD)
I have a genuine query. The Minister referenced a number of times, as I think was cited, that if a foreign intelligence body is operating in the UK unauthorised, it is now considered to be prejudicial to the safety and interests of the United Kingdom. Why is that activity not unlawful?
Lord Murray of Blidworth (Con)
The activity itself is made unlawful in the provisions of the Bill. Is that the point that the noble Lord is making?
Lord Purvis of Tweed (LD)
So it is unlawful for a foreign intelligence service to carry out any activities within the UK if they have not been prior approved by UK intelligence services. Is that correct?
Lord Murray of Blidworth (Con)
As the noble Lord is aware, it is the effect of Clause 2 to prohibit the offences of espionage and assisting a foreign intelligence service. Therefore, those offences in Clauses 1 and 3 of the Bill would have the effect of criminalising activity of the type described by the noble Lord.
Lord Purvis of Tweed (LD)
I am grateful to the Minister; I am purely seeking clarification for the benefit of my own ignorance. I am concerned that it is not very clear. If a friendly intelligence service is carrying out UK activities, which is not espionage against the United Kingdom, the Government are saying that this is prejudicial against the safety and interests of the United Kingdom but it is not unlawful, but a UK citizen advising on that basis is unlawful. Would it not be clearer to state that that activity is unlawful?
Lord Murray of Blidworth (Con)
I note the noble Lord’s remarks. I am not entirely sure that I follow the logic, but I will study Hansard carefully and take it back to the department.
Lord Marks of Henley-on-Thames (LD)
My Lords, the Minister has given no quarter. I suppose that is to be expected on the first day of a Committee on a Bill, with the Government defending their position as thoroughly as he has done. I hope that when he does read Hansard, as he has just promised to do, he will realise that there are a great many areas in which flaws in the Bill have been exposed—and exposed in particular by this group of amendments—where it is quite plain that conduct that ought not be criminal runs the risk of being criminalised. The question asked by my noble friend Lord Purvis of Tweed just a moment ago exposed the danger for people working for a foreign intelligence service if they are British citizens; they are plainly caught. There are a number of areas where assisting a foreign intelligence service, for instance, gives rise to particular difficulties.
Before I go on to any detail, let me say that it is a dangerous path for a Government to say that they do not believe that there would be many unjustified prosecutions because the public interest test for a prosecution would not be met. Let us remind ourselves that the prosecution services have to consider two things: first, whether there is a reasonable chance of a conviction on the evidence, and, secondly, whether it would be—
Lord Marks of Henley-on-Thames (LD)
“Realistic” is better than “reasonable”; the noble Lord knows far better than I what the test is.
The second point is whether it would be in the public interest to prosecute. That is a decision made by prosecuting authorities. What we are concerned about in this Committee is what conduct is criminal and merits a conviction in a criminal court. That carries with it the question of how a judge will be constrained to direct a jury as to what criminal conduct is. We have to get that right. Nowhere is that better shown than in this group of amendments.
The noble Baroness, Lady Jones of Moulsecoomb, was referred to jocularly in an earlier group by the Minister, the noble Lord, Lord Sharpe, who said that she often does not agree with government policy and the interests of the United Kingdom as defined by government policy. Of course, he is right that she often does not agree with government policy, but she is right to point out the danger of ill-thought-out laws that go too wide, criminalising behaviour that is no more than the democratic expression of dissenting views. That is one of the evils at which this whole suite of amendments that we have tabled is directed.
An example of how the Bill goes too far was highlighted by the response of the noble Baroness, Lady Manningham-Buller, to my Mossad example. She said that, of course, Mossad operating in the United Kingdom would be—I forget the phrase she used—notifiable activity, or it would notify of the activity. That is not the concern I was expressing. The concern that I and others were expressing is that a private citizen helping a foreign intelligence agency in the interests of the United Kingdom or compatible with them, without a government sanction and without working for the Government, would be criminalised. I suggest that it is wrong for that private citizen to be dependent on the Government, prosecuting authorities or the Attorney-General taking the view that the public interest test was not met.
In connection with the points made by the noble Lord, Lord Pannick, we simply heard no answer to his question about the tendering of legal advice. I know the Minister said that consideration would be given to that, but that calls into question the whole gamut of queries raised in this House, in this Committee and elsewhere about where the Bill goes too far. I suggest that where a Bill is too wide because it offends against human rights so that human rights are infringed and obviously infringed, the law can become positively dangerous—that is why the JCHR position taken on a number of these amendments is so important; I agree completely with the noble Lord, Lord Coaker, on this. We do not just have to consider a benign and friendly Government steeped in the traditions of British democracy. As the noble Baroness, Lady Chakrabarti, who is not here today, often says, you have to consider the possibility arising of a Government who are wholly against the traditional freedoms that are protected by our law on human rights. I suggest that that is the danger that we are concerned to defeat.
I therefore invite the Minister and his colleagues to go away and think very carefully about the breadth of these clauses and about the strength of the amendments that we have suggested to them, and to discuss with those people who have proposed amendments—we will all be willing to discuss these amendments and any refinements there should be; we are not wedded to the wording as it is the principles that are involved. Thus, by the time the Bill comes back on Report, they can be far more clearly defined, and the intent to prejudice national security—the subject of the Bill—should be clearly made out before anyone is subjected to serious criminal consequences as a result of misguided prosecutions and convictions that will inevitably flow from the misguided wording of the Bill. Having said that we will discuss it, at this stage I beg leave to withdraw the amendment.
Member's explanatory statement
This amendment provides for a higher threshold to be met for the offence in Clause 3.
Lord Marks of Henley-on-Thames (LD)
My Lords, this group contains only Amendment 13. That said, there ought to be two amendments, because a further amendment in exactly the same terms is required to Clause 3(2)(b).
Clause 3 deals with assisting a foreign intelligence service, and Clause 3(2)(a) provides that a person commits an offence if they engage in conduct
“that it is reasonably possible may materially assist a foreign intelligence service in carrying out UK-related activities.”
For some reason that I cannot explain, we did not propose that Clause 3(2)(b), which provides that the person
“knows, or ought reasonably to know, that it is reasonably possible their conduct may materially assist a foreign intelligence service in carrying out UK-related activities”
should be similarly amended. If this goes further, there will be such an amendment.
Lord Purvis of Tweed (LD)
My Lords, I too have a question to ask about this. I thank my noble friend for introducing these amendments so comprehensively. My question relates to Clause 3(2)(a) because it is so broadly scoped.
I am fully aware that there are many extremely professional UK-based organisations that provide training, support, advice and consultancy on security matters. In fact, it has become part of an industry for those who used to serve in some of our Special Forces and intelligence industry. By and large, it is done extremely professionally, which is to their credit. However, under the Bill, presumably, all that activity now needs to cease because it is criminalised. A person will commit an offence where
“it is reasonably possible their conduct may materially assist a foreign intelligence service in carrying out UK-related activities”,
which would mean training within the UK. Therefore, any consultancy—for example, a privacy sector security concern that trains allies in the Gulf and carries out any of that activity here in the UK—presumably is now liable for 14 years in jail. Can the Minister clarify whether that is the case?
Lord Ponsonby of Shulbrede (Lab)
My Lords, as the noble Lord, Lord Marks, mentioned, there should be a second amendment to go with Amendment 13. There is only one amendment in this group.
Clause 3 means that for the first time it will be a criminal offence to be a covert foreign agent and engage in activity that assists a foreign intelligence service. While the clause currently states that an offence is committed when a person engages in conduct that
“it is reasonably possible … may materially assist a foreign intelligence service”,
this amendment would mean instead that an offence is committed only if it is likely materially to assist a foreign intelligence service. The impact of the amendment is that it increases the threshold for the likelihood of whether an action assists a foreign intelligence service, reflecting concerns raised by the JCHR. As the noble Lord, Lord Marks, said, this would be punishable by up to 14 years’ imprisonment, so we look forward to the Minister clarifying why the offence is not more tightly drawn.
The noble Lord, Lord Purvis, raised a very interesting question about the large group of consultants with experience of the security services and forces who provide training to any number of actors across the world, and how they may be caught by this provision. I look forward to the Minister’s answer.
Lord Sharpe of Epsom (Con)
My Lords, Amendment 13 seeks to narrow the scope of the offence provided for in Clause 3(2). For brevity, I will refer to a foreign intelligence service as a FIS.
The Government reject this amendment because we do not consider it to be necessary. Clause 3(2) provides for an offence where a person engages in conduct which it is reasonably possible may materially assist a FIS in carrying out UK-related activities. Amendment 13 seeks to change this to “likely materially to” assist a FIS. We do not consider there to be a difference between the two terms. I recognise the spirit in which this amendment has been made, to raise the bar for this offence being conducted, but I assure noble Lords that for this offence to apply, a person not only needs to engage in the conduct that it is reasonably possible may assist a FIS but must know, or ought reasonably to know, that it will assist a FIS in carrying out UK-related activities.
To ensure that we do not capture legitimate activity, there are defences in Clause 3(7). Not only will we not criminalise activity conducted in accordance with an agreement to which we are a party—such as agreements with our Five Eyes partners based in the UK—but we will exclude law enforcement and others who are legally obliged under UK law to assist a FIS. That goes some way to answering the question asked by the noble Lord, Lord Purvis. Additionally, where someone with public functions—
Lord Purvis of Tweed (LD)
My reading of it is that, taking the defence in Clause 3(7)(b) as an example, if I was providing Special Forces training—unlikely though that might seem—because I have functions of a public nature, I would be fine, although I do not think anyone would wish to receive Special Forces training from me. I was asking specifically about UK private sector bodies—consultancies and those that carry out those functions. I am happy for the Minister to write to me if he does not have an answer now, but I do not think that private sector enterprises are covered by any of the defences in Clause 3(7).
Lord Sharpe of Epsom (Con)
My Lords, my reading of it is not the same as the noble Lord’s, but I will seek clarification and happily write to him on that.
The noble Lord, Lord Marks, raised a hypothetical about assisting foreign intelligence services. I am happy to provide a few more which may clarify the scope of this clause. Hypothetical examples of a person assisting a foreign intelligence service in carrying out its activities could include aiding intelligence-gathering operations or providing a financial benefit to a foreign intelligence service, or someone working for a foreign intelligence service to entice an individual into working for them. I hope that clarifies it to some extent.
It is important to note that the threat posed by espionage, as we have said in previous groupings, is constantly evolving. It is important that our legislative provisions withstand the test of time. We must safeguard against a rapidly changing and complex threat landscape in which foreign powers and their intelligence services use a whole-of-society approach to conduct hostile activity against the UK. That is why Clause 3 is such an important part of the Bill. We therefore reject this amendment and respectfully ask that it be withdrawn.
Lord Marks of Henley-on-Thames (LD)
I was going to ask the Minister something before he sat down, but he sat down so fast.
My concern with the Government’s approach, and the Minister’s approach in his response, is that it describes activities without reference to the legal definition of the activities concerned. Clause 3(1) involves the person committing the offence if the person
“engages in contact of any kind”.
Under Clause 3(4):
“‘UK-related activities’ means … activities taking place in the United Kingdom”.
It is not necessary to identify the service. As my noble friend pointed out, Clause 3(7) does not cover the private sector.
My amendments are very simple and very short, but even that raising of the threshold the Government resist. We are at a loss to understand why the Government are not prepared to bring a more forensic approach to the definitions in our criminal law. I quite appreciate and agree that the offence, in principle, of assisting a foreign intelligence service to the prejudice of the interests of the United Kingdom—which we say should be clearly defined—is a very important part of the Bill. But it is wrong to draft the law in such a way as to catch any conduct that attracts the displeasure of our intelligence services, our prosecuting authorities or government policy. It is important to define criminal conduct in such a way that it criminalises only conduct that ought properly to be a criminal offence when committed not only by United Kingdom citizens but by others who have absolutely no intention of assisting a foreign intelligence service to the detriment or prejudice of the United Kingdom. I beg leave to withdraw the amendment.
Baroness Ludford
Member's explanatory statement
This amendment is recommended by the JCHR and would remove the power of the police to order a person to leave an area “adjacent to” a prohibited place.
Baroness Ludford (LD)
My Lords, the offences and powers in Part 1 of the Bill, which are about entering a prohibited place, are incredibly wide and were detached to significant areas of the British countryside such as Ministry of Defence land covered by public footpaths frequented by tourists, hikers and dog walkers. My amendments in this group aim to guard against innocent members of the public inadvertently committing a criminal offence and to tighten up the conditions for the police to exercise their powers.
It does seem disproportionate to apply the restrictions, and police powers and criminal offences, to land, vehicles and buildings which do not disclose any significant risk to the safety or interests of the UK. Of course, under Clause 8, the Government would give themselves powers to declare additional land, buildings or vehicles to come under the definition of prohibited places. It may not be possible for the public even to know how much of this land and how many vehicles and buildings are Ministry of Defence property and prohibited places. They could risk committing an offence without being aware that they were approaching a Ministry of Defence car, which may have no markings at all, or walking along a coastal path which was Ministry of Defence property. My noble friend Lord Marks was talking in the previous group, or maybe the one before, about how dangerous it is to have wide definitions in criminal law. That is intrinsically bad but imagine if we got a truly authoritarian Government in this country.
Lord Wallace of Saltaire (LD)
My Lords, I have three amendments in this group. I suppose I should declare interests in relation to the amendments of my noble friend Lady Ludford. I have been stopped by the MoD police twice in my life: outside RAF Fylingdales when walking with a local Liberal Democrat councillor, and outside RAF Menwith Hill, where I had stopped to address a meeting of splendid Quaker women who constituted the Campaign for the Accountability of American Bases. We were watching American servicemen in the ceremony in which they took down the union jack. There are no British servicemen on the base most of the time.
I want to talk about the probing amendments I have put down on why the Crown dependencies and British Overseas Territories do not appear here. I explain my interest—and form—on this, which dates back to the Royal Commission on the Constitution of 1970-74, on which I was a very junior witness. I learned about the deep ambivalence surrounding the relationship between the Crown dependencies and the UK in particular, and about the British Overseas Territories.
I note that, in the Procurement Bill, which we have just passed through this House, the Crown dependencies are included under the definition of “a UK supplier”. However, under a number of other Acts that we have passed through this House in the last few years, they exclude themselves. They move in and out in various different ways.
In a number of these territories and dependencies, there are places of considerable concern to our security and interests: the Falkland Islands, the British Indian Ocean Territory, Ascension Island, Saint Helena, et cetera. The Crown dependencies I am much less sure about, although I know there is a Territorial Army base on Jersey. The last time I looked at the official Guernsey website, it still said that Guernsey’s contribution to British defence is the maintenance of the Alderney breakwater. That is a very interesting conceit. When, nearly 20 years ago, I asked the Ministry of Defence a Written Question on the importance of the Alderney breakwater, an official phoned me up to say, “We don’t understand your question”. On further investigation, he said that they had ceased to be concerned with the Alderney breakwater at the time of the Second World War.
There are many ambivalences here but surely, they should be part of this Bill. They are neither foreign nor entirely British. They are of importance to the UK, in financial terms and, when it came to the Falklands, in military terms. I am assured that there are some facilities on Ascension Island. There are certainly facilities on the British Indian Ocean Territory, although they are of course primarily American, and I think there are fewer than two dozen British servicemen there. However, they should be in the Bill and are not. I merely wish to ask why.
Lord Purvis of Tweed (LD)
My Lords, anybody watching a wonderful BBC documentary series about Ordnance Survey maps a few years ago would have seen the rather amusing part about a gap in the centre of London on the Ordnance Survey map as result of the Official Secrets Act. That was because it was forbidden to have the Telecom Tower on the map because it was a prohibited place for national security, so none of our foes were able to know where it was by studying the Ordnance Survey map. I hope that we avoid such absurdities with this Bill.
In Committee in the Commons, the Minister stated that there is not, nor will there be, a register of prohibited places. I hope the Minister can provide some more clarity with regard to that today. The offences under the Bill are so significant and potentially draconian that some of the issues that my noble friend Lady Ludford indicated might well come about, because the Minister in the Commons was unable to state in clear terms how people will know where a prohibited place is. Some might be perfectly obvious, such as some of the bases which my noble friend Lord Wallace approached with a Liberal councillor, but others are not. I understand entirely that there will be some areas where the Government do not wish to promote the activities or make it clear where they are, but how will they approach inadvertent activity, given that someone statically observing a prohibited place through an iPhone lens or a binocular lens could inadvertently be committing a criminal offence? I simply do not know how the Government intend to ensure that people are aware that they are potentially falling foul of this legislation.
Not only that but the Bill allows Ministers to move quickly to extend prohibited places. It does so by general description, as the Minister said in the Commons. Prohibited places do not have to be specified, as I understand it. They can be categorised, so that all areas that meet the general specification will become prohibited places. Is there a mechanism so that local authorities or local police are informed, even if no local communities are going to be informed? The Minister in the Commons said
“some sites will not want people to know exactly where they are and what they are doing because they will become targets. Once again, there is a balance to be struck in relation to provision for the intelligence community”.—[Official Report, Commons, National Security Bill Committee, 12/07/22; col. 107.]
Of course there needs to be a balance but, as with some other elements of the Bill, we see no other part of the balance. We see no mechanism that will protect the interests of people who are inadvertent.
The Government have also indicated that they might have to move very fast. There is of course merit in understanding that if there has been an alert about a threat, certain areas might need to be prohibited. I am not advocating it, but I am curious about the choice that has been made. The Government have not chosen to go down the route of the “made affirmative” procedure, which other legislation has if something has to be done urgently. They say that if there is a threat risk, to allow a prohibited place to be put in place they will bring it forward using the negative procedure and consult on it. It does not really ring true as far as how urgent a response that would be to a national security threat.
However, there are significant wider concerns when it comes to the powers that the Government are seeking. Where are the limits for the extension of prohibited places? Would it be, for example, that an immigration centre could not become a prohibited place under this Bill? Would it be that local government department buildings could not be prohibited places? What is the limit? Unless there is a limit, notwithstanding if there is an immediate threat—I think there are procedures anyway with regard to securing areas where the police think that offences are to be carried out, and for the safety of the public there are mechanisms that can secure places under existing legislation—how do we know how far Government want to extend those prohibited places? Unless we are clear, that raises the considerable concern that they can be used to prevent peaceful protest or concern.
Lord Ponsonby of Shulbrede (Lab)
My Lords, the amendments in this group span Clauses 6 to 11 and cover the new offences of
“Entering and inspecting places used for defence etc”.
These clauses are intended to update the prohibited places provisions which fall within the century-old Official Secrets Act 1911. Given that technological developments, such as the use of drones, are providing new methods of accessing protected sites, it is right that the Government are evolving the offences, and it is right that this Committee is probing how these new offences will be implemented.
The 12 amendments in this group are probing and were recommended by the JCHR. They seek to tighten or narrow the offences and definitions. Amendment 34 in the name of the noble Baroness, Lady Ludford, raises the unintended consequences of these provisions on the right to protest and on journalism. This will be a common theme throughout Committee stage, and my Amendment 88, which will be debated at a later date, will consider the implications of later clauses for journalists and civil society.
Amendment 26 in the name of the noble Baroness, Lady Ludford, and Amendments 27, 28 and 30 in the name of the noble Lord, Lord Wallace, raise questions about where prohibited places may be located and probe why they may include any MoD land and why Crown dependencies and overseas territories are excluded. Given the sentences which offences may carry, it is important that the Minister clarifies the type of locations which will be included. As the noble Baroness, Lady Ludford said, the purpose of this group of amendments is to give greater certainty and narrow definitions. She asked the rhetorical question—perhaps it is not a rhetorical question; it is a literal question—of how people will know whether they are in prohibited places.
The noble Lords, Lord Wallace and Lord Purvis, explored quite interestingly why overseas territories are not included within the definitions, and I look forward to the Minister’s answer on that point. The noble Lord, Lord Purvis, asked other questions about who will be informed. If it will not be the general public, will it be local authorities or police forces, and which police forces will it be? The purpose of this suite of amendments is to look at the limits on the extension of prohibited places and at who should expect to be informed about any such extension. I look forward to the Minister’s answer.
Lord Murray of Blidworth (Con)
I thank noble Lords for their contributions to this short debate. I will first speak to Amendments 23 and 33 at the same time, given the argument is much the same for both. I am happy to provide the clarity sought by noble Lords and, in particular, the noble Lord, Lord Ponsonby.
Harmful activity relating to prohibited places or cordoned areas around military aircraft can take place directly outside the boundaries of a place or cordon. This could include conducting surveillance, such as taking video or photographs of the sensitive place or aircraft, monitoring the activities of staff located at the site or conducting close-range information technology attacks from outside the place. It is therefore imperative that, where the police believe a person to be conducting such activity, they should be able to order them to move away. None the less, recognising that a cordon may be imposed at short notice, it is a defence provided for in the Bill for a person to prove that they had a reasonable excuse for failing to comply with a cordon under Clause 11. The effect of these amendments would be to reduce significantly the ability of the police proactively to stop damaging activity from taking place.
The police guidance that is being developed in collaboration with the College of Policing will provide further advice to forces on the use of powers in respect of an area adjacent to a prohibited place or cordoned area. I can confirm that this is addressed directly in the Government’s response to the JCHR’s report at paragraph 52 and onwards, and I again thank the committee for its close consideration of this Bill.
Amendment 24 adds a requirement that a police officer obtain authorisation before exercising a Clause 6 power. Due to the inherently sensitive nature of prohibited places, and the threats that they face, it is likely that the Clause 6 powers will be used rapidly to prevent serious and harmful activity from taking place—activity that could well jeopardise the safety of those working within the site itself. Policing often requires the judgment of officers to take quick and decisive action to prevent harm and keep the public safe. It is important that we continue to empower our officers to make these decisions where appropriate. Introducing a requirement for a constable to seek approval from a senior officer may add an extra layer of confusion as to when constables may or may not use their powers, potentially allowing harmful activity to be completed before the police can respond. We recognise that every effort should be made to help ensure that these powers are not used in a disproportionate manner, and, as such, we are working closely with the College of Policing to develop guidance that the police should use before exercising the powers granted under Clause 6.
Amendment 25 seeks to provide that it is an offence to fail to comply with a Clause 6 order only if the order was necessary and proportionate to protect the safety or interests of the United Kingdom. The legislation is clear that a constable may exercise a power under Clause 6 only if they reasonably believe that doing so would be necessary to protect the safety or interests of the UK. The Government therefore consider that this amendment is unnecessary. As with any such situation, where it is alleged that a constable has acted outside the scope of their powers, a decision to give the order is rightly open to challenge. As it is an important point, I will stress again that the Government are working closely with the College of Policing on the guidance which should be used prior to making any decision to exercise powers under Clause 6.
On Amendment 26, it is crucial for national security that the UK continues to protect all areas used for defence purposes and by the UK intelligence community. Carving out certain places over others within these categories in the way this amendment proposes risks creating gaps that hostile actors could exploit. It could require the Government to pinpoint their most valuable defence and intelligence sites in order to establish that they are indeed prohibited places and so put these places even more at risk of harmful activity—the very opposite of what the prohibited places regime is setting out to achieve. Moreover, the proposed amendment focuses only on the risk posed by entry to such sites, which fundamentally undermines the protection being given to these sites against a range of harmful activity. It also, in inserting this condition around potential risk, significantly reduces clarity on the face of the legislation as to what constitutes a prohibited place.
I understand the intention behind this amendment, which is to ensure that land that might already be accessible, or where there is not perceived to be a significant risk, is not covered by the provision. I want to assure noble Lords that Ministry of Defence land that can be lawfully accessed by the public and such areas of the British countryside with public footpaths do not need to be excluded, nor do the public need to be given authorisation to be in that area. Therefore, they will not commit an offence under Clause 5. They will be committing an offence under Clause 4 only if the conduct is a specified activity with a purpose that they know, or reasonably ought to know, is prejudicial to the safety or interests of the United Kingdom. It is important we are able to catch such harmful activity, even on publicly accessible land. Ministry of Defence land that can lawfully be accessed by the public is still used by our Armed Forces, often for purposes that are sensitive in nature, and it is critical they should be afforded the protections granted by the prohibited places provisions.
I will address Amendments 27, 28 and 30 together, given they all seek to extend the prohibited places provisions to the Crown dependencies and the wider British Overseas Territories. The Crown dependencies and British Overseas Territories are not a part of the United Kingdom, of course, but self-governing territories with democratic Assemblies able to legislate for themselves, including on national security. Should any British Overseas Territory or Crown dependency consider it necessary to designate prohibited places within their territory, they may make similar provisions in their own legislation.
It is of note that the Government consulted with the Crown dependencies on their inclusion within the prohibited places regime, and they have advised it would be preferred if they looked towards mirroring these provisions under their own law and legislation. It is only right and proper that the United Kingdom respects these decisions. I hope that addresses the point raised by the noble Lord, Lord Wallace. I am sure the Bailiwick of Guernsey will think long and hard about the Alderney breakwater. As the grandson of an Alderney girl, I can tell noble Lords how much that breakwater is a feature of conversation.
It is important to address why the Government have chosen to include land or buildings within sovereign base areas—particularly those of Akrotiri and Dhekelia—in the prohibited places regime. Sovereign base areas are critical for UK defence and have special constitutional status among the British Overseas Territories in that their administrator, who also holds the title of “Commander British Forces Cyprus”, is vested with all the executive and legislative authority. This unique context of the sovereign base areas is precisely why, at their request, we are also including the option to extend the provisions in the Bill to the sovereign base areas. As such, it is right that the UK continues to afford protections specifically to the sovereign base areas through the National Security Bill.
Amendment 29 creates a legislative requirement to inform the public of prohibited places. The safeguards in place within Clauses 4 and 5—namely, that a person must either have a purpose that they know, or ought reasonably to know, is prejudicial to the safety or interests of the United Kingdom or know, or ought reasonably to know, that their conduct is unauthorised—protect those who have entered, or are in the vicinity of, a sensitive site without having any knowledge that they have done so.
The Government agree that, where it is reasonably practicable, every effort should be made appropriately to notify the public of areas designated as prohibited places through the use of signage surrounding these places. However, the Government consider that making it a legislative obligation to notify the public of the location of every site designated a prohibited place is not proportionate, given that Clause 7 already makes public the types of sites that will be prohibited places. Equally, any designation under Clause 8 will set out in law any further types of sites that will be prohibited places. Furthermore, and crucially, there will be a number of sites which, due to their highly sensitive nature, it would be harmful to UK national security if they were publicly declared as prohibited places.
Lord Purvis of Tweed (LD)
I have two quick questions for the Minister. I was grateful for his response to me with regard to local authorities. Can he clarify which lands will be categorised under the Crown interest? Under Clause 7(4)(b), they are
“an interest belonging to a government department or held in trust for His Majesty for the purposes of a government department”.
It is not singled out, so is my assumption correct that these government departments include devolved Administration departments—the Scottish Government, et cetera?
Similarly, I was grateful for the Minister’s reference to the College of Policing, which was also referenced in Committee by his counterpart in the House of Commons. I have heard no reference to the Government working with the Scottish Police College, which is the relevant body north of the border because the College of Policing is only for England and Wales. This is important, because many of these lands are north of the border, where I live. If the Government are consulting, they need to consult with the Scottish Police College as well. I would be grateful for that assurance.
Lord Murray of Blidworth (Con)
Yes. My suspicion is that both answers are in the affirmative, but I am afraid I do not know for sure. I will find out from my officials and write to the noble Lord. I thank him for raising that.
Baroness Ludford (LD)
My Lords, I am quite disappointed by the Minister’s responses on this. There are considerable dangers in this part of the Bill. The Minister referred to the fact that the offence under Clause 4 is committed only if
“the person knows, or ought reasonably to know,”
that their conduct
“is prejudicial to the safety or interests of the United Kingdom.”
We have been around those houses before. Ought ramblers reasonably to know that they are
“in the vicinity of a prohibited place”?
Again, what does that mean? It is like “adjacent”. I do not think the Minister replied on the meaning of “adjacent”; forgive me if I missed that. It is all very difficult for some normal, uncriminal person to know that they are committing an offence under Clause 4. Clause 5 also says they “ought reasonably to know”. It is all rather reminiscent of being “in the vicinity” or “adjacent”. The Government also have powers to designate more places as prohibited.
The Minister drew our attention to the defence
“to prove that the person had a reasonable excuse for that failure”
under Clause 11 in relation to a cordoned area. As far as I can see—I might have missed it—there is no such reasonable excuse defence in relation to the offences under Clauses 4 and 5 on entering or unauthorised entry to a prohibited place. If I am wrong, no doubt the Minister will be able to write to correct me.
This all seems quite reminiscent of the Covid restrictions. In the last couple of days, the human rights barrister Adam Wagner did a review of Matt Hancock’s diaries, or so-called diaries. Presumably, as he is an ex-Cabinet Minister, this publication would have been vetted by the Cabinet Office. This is the Minister who would have signed off all the SIs on Covid restrictions—200, or however many there were. The publication by Mr Hancock says that these were all SIs under the Coronavirus Act, which is not true; they were under the public health Act 1984, if memory serves. It went through the Cabinet Office with no one picking up that the reference was to the wrong law. This is reminiscent of the chaos among the police in applying the restrictions, their failure to distinguish between guidance and law, and the general outrage among the public at being told they could not do things that actually were not illegal. This did not help the reputation of and trust in the police.
I foresee similar echoes from the provisions of this Bill, of an outraged Middle England—or middle UK—where people find themselves adjacent to or in the vicinity of a prohibited place on Ministry of Defence land having had no reason to know about it. The Minister said he would try to consider putting up notices, but I do not think there has been any guarantee. So someone might not know that they were in the vicinity of a prohibited place that is defence land, committing an offence with potentially draconian penalties. This is inadequate as law. The Minister did say that there would be guidance, but there was guidance for the Covid regulations and that did not always solve the problems.
So, while I hear what the Minister says, I will want to return to some of the issues in this part of the Bill. The proposed law is sloppy. It could find innocent people either criminalised or dissuaded from taking their normal walk because they are not sure whether they are allowed in an area, and there could be a general chilling effect on people’s leisure activities. That said, and with the intention of having another look at all of this on Report, I beg leave to withdraw my amendment.
Levelling-up and Regeneration Bill
Monday 19th December 2022
(2 years ago)
Lords ChamberRead Full debate Levelling-up and Regeneration Act 2023 View all Levelling-up and Regeneration Act 2023 Debates Read Hansard Text Amendment Paper: Consideration of Bill Amendments as at 13 December 2022 - large print - (13 Dec 2022)
Central America: Trade and Investment
(2 years ago)
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Baroness Hooper
To ask His Majesty’s Government what plans they have to improve trade and investment relations with countries in Central America.
Baroness Hooper (Con)
My Lords, this is a short debate but an important one as it is the first to be focused on central America for a very long time—and that is not for want of trying. I am happy to have the opportunity this evening and most grateful to all those participating in the debate, as well as to those sufficiently interested to have remained in the Chamber to listen. I welcome our relatively new Minister to his first outing on Latin America. I hope—indeed, I will make sure—that it will be the first of many. I declare interests as a former president and now vice-president of Canning House, as president of the Central America Business Council, part of the Caribbean Council, and as current vice-chairman of the Latin America and Central America All-Party Parliamentary Groups.
My intentions in asking this Question for Short Debate are: to draw attention to this important and dynamic region of the world, where we have historic as well as current links on which to build; to emphasise some of the opportunities for trade and investment in the region for UK entrepreneurs, given that the balance of trade is not in our favour at the moment; and to refer to my role as trade envoy to Panama, Costa Rica and the Dominican Republic, which have been identified as target countries within the region by the Department for International Trade.
I was shocked recently to hear from the British Chambers of Commerce that only 10% of British companies export their products. I believe, therefore, that we should be working hard to encourage small and medium-sized enterprises in particular. I feel that they would find it easier to take their first steps in a relatively small country.
Central America as a region consists of seven countries: Guatemala, Belize—which, of course, is also a Commonwealth member—Honduras, El Salvador, Nicaragua, Costa Rica and Panama, which, together with the Dominican Republic, have a system of integration known as SICA, of which Guatemala currently holds the pro tempore presidency. Each country may be relatively small in terms of population, but the SICA countries have a combined population of 60.7 million, a substantial market for our exports; and the population is young, dynamic and digitally aware.
I wish to emphasise, however, that, in spite of the integration system and a common language, each country has a very individual sense of identity. A UK-Central America association agreement was signed in January 2021, post Brexit, setting provisions on trade in goods and services, intellectual property and general procurement. It also includes provisions on preferential tariffs, tariff rate quotas, rules of origin and so on, to ensure continuity with the previous European Union agreement.
CABEI, the Central American Bank of Economic Integration, is the banking arm of SICA, based in Tegucigalpa in Honduras. It aims to promote the economic and social integration and development of the region across sectors such as infrastructure, renewable energy, agriculture and commerce, as well as to reduce poverty and inequality. The United Kingdom was invited to become a non-regional member of CABEI, which has recently opened a European office in Madrid. Could my noble friend the Minister tell us what the current relationship is between the UK and CABEI, given the benefits that a strong and vibrant collaboration could bring?
With all that as background, with our embassies in-country at the ready, with the Department for International Trade providing back-up services such as UK Export Finance, British expertise, helplines and roadshows, and with an active trade commissioner based in the wider Latin America region, it seems to me that the stage is set for progress, especially in priority sectors such as education—edtech in particular—infrastructure such as airports, roads and water treatment, and services, where I want to highlight the issue of green finance.
In saying that, I appreciate that central American countries are still recovering from the consequences of the Covid pandemic, just as we are, while natural disasters, increased by climate change, have taken their toll; for example, in Honduras. I appreciate also, and I understand that others may speak to these, the issues that have to be faced, such as human rights abuses, violence and corruption, which certainly exist in some of these countries.
In the few minutes that I have left, I shall touch on the three countries for which I act as trade envoy, and which I visited in that capacity in May this year. Happily, I had been to them all previously, which has been an advantage. I shall start with Costa Rica. When we think of Costa Rica, we may think of delicious pineapples and other tropical fruits, and even coffee, but very few realise that medical devices are Costa Rica’s main export, or that AstraZeneca recently opened its splendid regional headquarters in San José, the capital.
We may also think of Costa Rica in terms of ecotourism, without realising that Costa Rica’s green credentials extend to an exemplary reforestation programme and that it won the first Duke of Cambridge Earthshot award in the “protect and restore nature” category last year. The support from its then President—incidentally, a former Chevening scholar—for COP 26 was very much welcomed by this country, especially my right honourable friend Alok Sharma, so British companies would be pushing at an open door in the whole environmental field, especially perhaps in the area of green finance.
In Panama, where many major British firms are already established in the free zone area, I was able to sign a memorandum of understanding with the Foreign Minister on clean and sustainable growth. We had fascinating meetings between the Panama Canal Authority and British companies about the recycling of freshwater in the canal locks, and other technical matters that we hope will lead to further collaboration. Education, particularly edtech, is also a top priority in Panama.
I must mention Buddi, a British invention that was originally a wristband to monitor elderly people but is now established in El Salvador by its inventor as an electronic monitoring device in prisons, and looks set fair as a project to be taken up now in Panama. In relation to Panama, perhaps the Government could also be persuaded to support the Panamanian candidate to be secretary-general of the International Maritime Organization here in London, as a new appointment is about to materialise.
Last but by no means least, I refer to the Dominican Republic, the fastest-growing economy in the region. Last month saw the eighth Dominican Republic Week in the UK, when the largest, most senior and most diverse delegation of business leaders and investors came to London and Edinburgh to forge new, and enhance existing, links—a most successful event. Again, there are huge possibilities in the education sector and in infrastructure projects, especially water treatment, while we have much to learn about the successful management of free zones from the Dominican Republic.
I understand that we have slightly more time than originally anticipated so there are two unexpected facts that I wish to mention. The first is that I discovered that more mozzarella cheese is imported into the Dominican Republic from the United Kingdom than from Italy. Think of that.
Secondly, a meeting with the Minister of Industry and Commerce revealed the problem, caused by climate change, of the sargassum seaweed that is invading the Caribbean, fouling the beautiful beaches and having a major impact on the thriving tourist industry in the Dominican Republic and elsewhere. Upon inquiry, I learned that both the National Oceanography Centre at Southampton University and Exeter University are working on this issue, and that a plan is under way to take a group of British experts and companies to the Dominican Republic to discuss ways of solving the problem and perhaps recycling this noxious weed for energy, cardboard and other useful purposes.
My time is up. I wish to say simply that much has been achieved and, if the Government could now free up the visa requirements affecting those countries and encourage more direct flights, we could be well on the way to doubling that 10% figure for companies exporting to central America.
Baroness Coussins (CB)
My Lords, I congratulate the noble Baroness, Lady Hooper, on securing this debate. It is a welcome and rare opportunity to debate a region of the world that is so often overlooked when it comes to foreign policy, trade, investment and security.
I recently returned from an IPU delegation to Mexico so I will focus my contribution on that country. Of course, I am aware that Mexico defines itself just as much as north as central America, although the term “Mesoamerica” encompasses Mexico as well as the central American countries. In addition, drug cartel activity and people trafficking from central America through Mexico en route to the US have implications for legitimate trade and investment. As His Majesty’s Government are currently engaged in negotiations on a free trade agreement with Mexico, a topic also covered in the helpful Library briefing for today’s debate, I hope noble Lords will agree that Mexico is relevant to this short debate. I have a number of questions for the Minister but, if he was not expecting to answer questions on Mexico today, I would be grateful if he might write to me in due course and place a copy in the Library.
First, I know that the second round of the UK-Mexico trade talks have been held but do the Government still expect them to be concluded by mid-2024, as originally announced? I ask this because I am aware that the Mexican ministry of economy has recently fired all its senior officials involved in the negotiations. Does that mean starting over again? What, if anything, does the Minister expect to be different with a completely new set of negotiators?
Secondly, and for me this is by far the most important point, I want to ask about the relationship between trade and investment and human rights. I ask the Minister to set out clearly the Government’s rationale for removing all consideration of a human rights clause from this free trade agreement, and indeed all such new agreements? The original FTA to which the UK was party as an EU member included a human rights clause, as did the continuity agreement. I for one was hoping that our bilateral agreement would go further and better than the merely declaratory clause that we had through the EU, and instead we would want to demonstrate our much-vaunted global leadership in this field and underpin the clause with a mechanism for monitoring and accountability. Sadly, on the contrary, it seems that no human rights clause will form part of the UK-Mexico FTA but that a separate, parallel human rights “dialogue” will take place. The trouble is that although we have already had two rounds of trade talks, the human rights dialogue has not even started and, as far as I know, no start date is in sight. Will the Minister please tell the House why not?
I am familiar with the standard line that establishing a free trade agreement then puts us in a better position to raise human rights concerns with new partners, but this seems a very weak chicken-and-egg sort of argument, and it clearly did not apply in any case when we were happy to include a human rights clause in our previous deals. A more robust and defensible stance would be that being up front on human rights would be a stronger incentive for trade and investment. At the very least, I would welcome a date for the start of a genuine human rights dialogue with Mexico, but I also hope that the Minister will agree to take this issue back and reconsider incorporating a human rights clause in the negotiations.
Should anyone be in any doubt, human rights in Mexico is a critical problem that needs an awful lot more than mere dialogue; it needs urgent action with strong international leverage behind it. Our embassy team in Mexico does sterling work, continuously raising human rights issues and individual cases and contributing to training and other technical assistance. Over 106,000 people are currently known to have disappeared in Mexico—“disappeared” is largely a euphemism for kidnapped and/or murdered. These are mainly journalists, human rights defenders and environmental and indigenous campaigners. Perpetrators enjoy almost complete impunity. In addition, there are hundreds of thousands of forcibly displaced people, some of them having been forcibly removed by companies seeking access to natural resources.
This brings me to my next question: does the Minister have any information on whether any British companies are or have been involved in such displacement activity? What specific measures or programmes does the DIT have in place to ensure that UK companies doing, or hoping to do, business in Mexico comply with the UN Guiding Principles on Business and Human Rights, sometimes known as the Ruggie principles? On a related point, what happened to the Pacific Alliance, of which Mexico is a member and with which our Government have said in the past that they were committed to deepening our involvement? For example, do the UK Government still support what they used to call high value campaigns—HVCs—to support British companies in exporting and investing across the sectors where UK industry could add most value?
Finally, can the Minister update the House on what language and cultural support his department provides to UK companies looking to build export growth in central America and Mexico? How many DIT officials and negotiators are competent in Spanish, or are taking Spanish courses at the FCDO language centre?
Baroness Anelay of St Johns (Con)
My Lords, I too congratulate my noble friend Lady Hooper on securing this short debate. Her timing is fortuitous in the light of the announcement, made by the Foreign Secretary just last Monday, that the Government will develop stronger relations with increasingly influential countries in Africa, Asia and Latin America. I welcome that statement, but the only Latin American country he referenced in his speech was Brazil, and that was simply to support the idea that the UN Security Council might be reformed and make Brazil a permanent member.
I have four questions for my noble friend the Minister. First, what new measures will now be taken to cast a spotlight on Latin American countries in central America with which we have signed an association agreement, of course not forgetting Belize, which is governed by the separate CARIFORUM-UK economic partnership agreement? It was a privilege to meet the members of CARIFORUM when I was a Minister at the FCDO and attended one of its sessions. Additionally, I made ministerial visits to several other countries in central America, primarily in my role as the Prime Minister’s special representative for preventing sexual violence in conflict. I also met representatives of UK companies in business in the region. They impressed upon me how they face significant hurdles when they compete for contracts, which are then often routinely awarded to non-UK businesses that have a record of failing to deliver the kind of quality, timeliness and reliability of work that would have been provided by the UK companies.
Over a year ago, the then CEO of UK Export Finance announced that the UK was entering a new era for trade with central America. So my second question is: can my noble friend the Minister please tell the House what increase in support and advice was given, as a result of that announcement, to UK businesses seeking to secure contracts in central America? What new steps will now be taken to build upon that work? By the way, I notice that UKEF currently has an interim CEO; can my noble friend the Minister inform the House when the Government expect to make a permanent CEO appointment?
My third question ventures into the fields covered by trade commissioners and trade envoys. I would be grateful if my noble friend put on the record the respective roles and lines of accountability for both trade commissioners and trade envoys. The Latin American trade commissioner is based in São Paulo, and his deputy is located in Mexico City. Of course, as my noble friend Lady Hooper mentioned, they also cover the Caribbean region. That is quite a stretch for their enormous amount of work. My noble friend Lady Hooper declared her work, for which she is very highly respected, as trade envoy for Costa Rica, Panama and the Dominican Republic. Select Committees of this House would benefit greatly from hearing from such experts as trade envoys.
However, I have to inform the House that, when the International Relations and Defence Committee, which I chair, sought to take evidence from one of the trade envoys to Africa in the course of our inquiry into the UK’s relations with the countries of sub-Saharan Africa, the Government refused permission for them to give evidence. That surprised us, to say the least. We had hoped to benefit from learning about their work and achievements on behalf of the UK. I would therefore be grateful if my noble friend could tell the House whether the Government’s policy of preventing trade envoys giving evidence to the committees of this House has changed. If it has not, will they consider changing it? If my noble friend is not in a position to answer any of my questions tonight, I would be grateful if he wrote to me and gave a copy of the letter to the House.
My final question refers back to comments made by both my noble friend Lady Hooper and the noble Baroness, Lady Coussins, whom I hope I may call a noble friend. Can my noble friend the Minister reassure me that all those who give advice on trade and investment to companies on behalf of the UK Government will bear in mind the human rights records of countries in central America when doing so? Will he reassure me that they are fully informed of the importance of the Ruggie principles?
Lord Mountevans (CB)
My Lords, I add my congratulations to the noble Baroness, Lady Hooper, on securing this long overdue and important debate. In addition to her service as trade envoy, she is a distinguished former honorary president of Canning House, as she mentioned. As the current holder of that position, it gave me, and all of us at Canning House, intense pleasure to award the Canning medal to her this summer, in recognition of her outstanding service to UK-Latin American relations and to Canning House. I also pay tribute to the noble Baronesses, Lady Coussins and Lady Anelay of St Johns, two formidable and steadfast advocates.
Central America is part of an increasingly important region of the world for business, and I for one would have been delighted if the noble Baroness had chosen to examine trade and industry opportunities for all of Latin America. As the excellent Michael Stott of the Financial Times reeled off at a Canning House event last week, addressing the whole of Latin America, the region has an economy of $5.5 trillion more than Japan; its area is 19.2 million square kilometres, almost as much as China and the US combined; it has 27% of the world’s forests, 30% of the fresh water and 25% of the arable land; it is home to some 650 million people, 81% of whom live in cities and towns, making it the most urbanised region in the globe after North America; it has 58% of the world’s lithium and 41% of its copper. Of course, Spanish, which is widely spoken in Latin America, is the world’s third-most spoken language. It is a region militarily at peace with itself and with an absence of war.
Latin America will be of increased importance because of resources—and, as usual, China sees the potential there. It contributed to 0% of global trade in the noughties, but it now exceeds Europe’s share and is approaching that of the US, which is declining. It is vital that the Government recognise the importance of central America—and, indeed, of Latin America in its entirety—and allocate resources accordingly. I am sure that we will hear good news of the progress on FTAs. I am very pleased that we have a DIT team that seems to mean business, but I very much endorse the question about the extent of the resources at their disposal. Last week, I met with Cristina Irving Turner, the department’s number two, and was suitably impressed. The region consists of friends, so can anything be done about high university fees, which is a real issue?
I am partly Norwegian, so I know that the Norwegian foreign service expects its ambassadors to be front-line salesmen for Norwegian industry and businesses. Can the Minister consider prioritising information and training for His Majesty’s ambassadors to play a role in growing our exports?
It is not only for the Government to increase their activity and ambition in the areas that earlier speakers have noted and that my successors will note; business must also engage fully with those challenges. There are opportunities for business in many areas, including pharma, infrastructure, food and drink, healthcare, energy, finance and especially fintech, agriculture, mining and education, among others. I want to impress on business the need to visit and visit and visit. A long-term commitment and approach is needed, because nothing else will work; this is not the area for quick results. When I was the lord mayor, all too often I heard the refrain, in different parts of the world, “We love you, Brits, and we love your products, but we don’t see you here often enough”. My experience of travelling internationally throughout my career is that there is enormous good will towards the UK and UK business. I also point out that the smaller countries in central America represent an ideal opportunity for SMEs, a potential that the noble Baroness, Lady Hooper, acknowledged.
Despite a reputation for inefficiency and procurement opacity, there are many ways in which international expertise can meet the needs of Latin American countries. Latin America—including, not least, some countries in central America—continues to be a region that carries risks with security and corruption, all of which can be managed with careful planning and due diligence. As someone recently said to me, it is easy to overestimate the risks and underestimate the rewards. I believe that Britain now has the strictest anti-corruption legislation in the world, and the right person at the right time might be able to suggest to a potential client that business with UK firms speaks to the highest standards and governance. If the DIT wants to build a roadshow to talk to businesses and trade associates about the opportunities in central America—or, indeed, in wider Latin America—I would be willing to join that enterprise and crusade.
In conclusion, Far Eastern business has the problem of an increasingly assertive China on its doorstep, while eastern Europe has the problem of an aggressive and vindictive Russia on its doorstep. I say to noble Lords, as well as to government, industry and business, that now is the time to engage with the huge potential of Latin America. We must get on with this urgently.
The Earl of Dundee (Con)
My Lords, I join your Lordships in thanking my noble friend Lady Hooper for introducing this timely debate.
I will briefly link together three themes: our scope for building up trade and investment relations with countries in central America, while also bearing in mind Brazil in Latin America; the challenges to protect the environment, to reduce poverty and to uphold human rights, as was already highlighted by the noble Baroness, Lady Coussins, and my noble friend Lady Anelay of St Johns; and, in spite of those challenges, the United Kingdom’s present opportunity to take a positive lead within a consensual international community.
In addition to the main trade in food and drink, and as correctly identified by World Bank analysis, there is now a significant potential for United Kingdom companies to export goods and services in other sectors, including those of infrastructure and clean growth. Not least, those future prospects have already inspired a partnership and memorandum of understanding between UK Export Finance and the Central American Bank for Economic Integration.
Following that, for the next five years, which higher percentage figures do my noble friend the Minister and his department predict? What different pattern of exported and imported goods and services does he thus anticipate? Given that, at the moment, the lion’s share is with Costa Rica, to which my noble friend Lady Hooper has referred, to what extent does he expect a reinvigorated deployment of trade and investment affecting the United Kingdom to be spread more evenly over other central American countries? Equally, over the next five years, and considering the same future trade prospects—from infrastructure to clean growth and certain other sectors—from their separate current base, what trade percentage rises does my noble friend the Minister forecast between the United Kingdom and the principal bloc of Latin American countries, in particular Brazil?
Then, to help facilitate this process at all, what assessment have the Government made of certain measures which they might pursue, ranging from encouraging investment, perhaps through regional as well as central banks, to focused, well-advertised and adapted government incentive schemes to be taken up by United Kingdom business and industry?
The EU-Mercosur deal should have begun in 2019 but instead has remained on hold due to European concerns about Amazon deforestation and Mr Bolsonaro’s authoritarian rule in Brazil. His recent defeat, officials claim, has removed those obstacles, while President-elect Lula has said that a trade deal could be established within six months between the European Union and South America’s Mercosur bloc, which covers Brazil, Argentina, Paraguay, Uruguay, Bolivia and Chile. Meanwhile, regarding our own enhanced trade partnership proposals with Brazil, Lula has requested that the United Kingdom should revise the component which would impose restrictions on importing Brazilian meat products, especially beef.
If handled in the right way, Brazil’s change of regime can cause dramatic changes for the better, benefiting not just that country itself but also most others within both central and Latin America. These include preservation of the Amazon rather than its piecemeal destruction and a much-improved level of respect for human rights, democracy and the rule of law. Both the United Kingdom and the European Union have a key role to play. This begins with establishing good relations with the new regime in Brazil.
Does my noble friend the Minister therefore agree, first, that in order to achieve these more important wider objectives, we should now renegotiate our ETP terms so that through their revised acceptability the UK starts to gain the confidence of the Brazilian Administration? Secondly, does he assent that thereafter, in co-operation with the EU and countries within both central and Latin America, including Brazil, we should emphasise the priority of this shared and wider agenda? Thirdly, does he concur that, along with other states, the more the United Kingdom is seen and known in South America to put that agenda’s ethical and mutually advantageous international aims first, the more its own, as well as the trade and investment levels of those other states, will also increase, diversify and consolidate?
Viscount Waverley (CB)
My Lords, a simple premise for today’s world must surely be that entry into lesser marketplaces by midsized SMEs must be a priority—not just those markets on the beaten track nor those the preserve of big business.
Therefore, the noble Baroness, Lady Hooper, is to be supported in her endeavours in the central American region, which build on the high regard in which she is held in South America. Proponents of natural trade corridors might wish to continue the trajectory on from the Caribbean, in which the Dominican Republic sits—a part of the remit of the noble Baroness, Lady Hooper, who is a trade envoy of the Prime Minister—and continue to central America and include Mexico.
I would be curious to know the rationale behind the selection of the 20 FCDO priority countries and would be grateful if the Minister would write to me on this, along with a sense of whether trade corridors might not be a better way to go. Are the DIT and other government departments aligned, for example?
On the question of human rights, my understanding is that an introduction of human rights has been downgraded as an aspiration. Am I right in that regard?
I do not wish to be unseasonal but the view of some is that the Government have adopted a fragmented approach to trade, with no long-term vision, and are short on intrinsic strategic planning. I venture some innovative thinking and that to think holistically, away from the British trait of silo mentality, would do no harm.
A recent discussion with some clear-sighted professionals arrived at two conclusions: first, that things cannot continue as before; and, secondly, that a clearer whole-of-government vision on trade is needed, together with a fully integrated approach across Whitehall to drive global growth in key sectors.
The APPG for International Trade and Investment, which I happen to co-chair, together with the Future of UK Freight and Logistics APPG, are building on the principle of identifying trade corridors. We will be conducting a review of all aspects of the United Kingdom’s export promotion strategy, looking at the role of government, the chamber of commerce movement and regional promotional bodies, including regional champions such as Midlands Engine and Northern Powerhouse, and LEPs, to name but a few. We need the rationale and criteria for trade envoy selection to be explained as some strategically important countries have none.
For the record, these are in addition to the empowerment of intra-UK trade, including supply chain issues. Through my engagement with the International Trade & Investment Center—ITIC—of Washington DC and the International Trade Council, I am working on making available the provision of information and dissemination of multiple datasets, using overlays for analytics of markets and supply chains. These allow for forecasting and prediction of market behaviour, thus allowing for a deepening of relations with New World countries.
That should greatly assist companies searching out and forecasting new markets and UK entities seeking to validate their supply chains, understand market pricing, monitor competitors and assist in locating priority investment FDI targets. Additionally, many emerging countries welcome issue focus, often in the format of round tables and implementing public/private sector workshops on capacity building, tax policy and fiscal economics, with practical initiatives that can make a real difference. Stakeholder engagement is key when on a course to win friends.
It is about co-ordinating individual local content development programmes that can be adopted by investors and government agencies, combined with utilising tax and customs data and the like, to which I have referred, with skills-based professional development and gap analyses.
In concluding, there is an urgent need for government to promote the provisions and benefits globally of the enabling electronic trade process currently on its legislative journey in the UK. What is being done in that regard?
Lord Brennan (Non-Afl)
My Lords, respecting the time constraints in the gap, I have three broad points to make. The first is on the need for international trade and investment for this country. Increasing trade is of the highest importance generally and in the dire economic circumstances that we are in in the moment—and, particularly, because of our Brexit responsibilities. Secondly, as part of this, surely, we should co-operate with international development banks which cover regions. They have the experience, the money and the will—CABEI in central America in particular.
Next, let us do something about it. In August 2021, the then CEO of UK Export Finance, Louis Taylor, signed an understanding with CABEI to co-operate—well over a year ago. He chose to describe it as a robust means of co-operation. What has happened, and what is going to happen this coming year, 2023?
Lastly, surely, we should co-operate with the areas in which we have long-term interests. Belize is a central American country that is a member of the Commonwealth, and it would welcome our participation. After Australia and India—one through complications and the other through delay—let us see action, if not this day, then at least this coming year. Central America and the Panama Canal is a centre of world focus economically. We should be there with them.
Baroness Hooper (Con)
I am told that I am remiss in not having declared my interest as a trade envoy in Panama, Costa Rica and the Dominican Republic. I thought that I had made it quite clear—but if it is necessary, I hereby declare an interest.
Lord Purvis of Tweed (LD)
Well, there is no harm in embellishing the point. The noble Baroness, Lady Hooper, has been rightly congratulated on bringing this debate to us on a neglected issue, but one that she does not neglect. She leads for us on this.
I am a member of the Selkirk Merchant Company, established in 1694 and one of the two remaining elements of the Company of Scotland—I am sure that the noble Earl, Lord Dundee, is aware of this. If the Darien scheme on the Isthmus of Panama had gone differently for Scotland, the story of our nation would have gone differently. Our history as a country is entwined with that region, but we continue to punch below our potential weight for our trading relationship.
The noble Baroness, Lady Hooper, introduced the debate so well and set the scene. I have been very fortunate to visit Latin America with her, and with the noble Baroness, Lady Coussins. The closest that I get to accompanying a royal party is whenever I accompany the noble Baroness, Lady Hooper, on a visit in Latin America, or to a Latin American embassy. She does us credit.
The focus of this debate, however, should be on what the Government are doing to promote businesses to take advantage of the potential that is so obviously there. It was referenced earlier that Canning House’s LatAm Outlook process has been illustrative in highlighting the real potential for central America and the Spanish-speaking Caribbean. As it puts it, this is a market of 45.5 million people with a GDP of over $800 billion. It outlines key areas where there is a market and where we should take advantage of that market. This is a region that is demonstrating leadership in green economies, for example, and an eagerness to collaborate with international partners such as the UK. In particular, it highlighted an area that I thought was really interesting: it is seeking companies with expertise in project management and delivery of infrastructure projects to take advantage of that green investment. This is where UK businesses should have an opportunity. Costa Rica is receiving a $700 million loan from the IMF, so there are funds available.
The next area it highlighted was the Inter-American Development Bank, the Central American Bank for Economic Integration—or CABEI, as the noble Baroness referenced—and the Corporación Andina de Fomento. In my view, if the UK took the opportunity to become an early shareholder in the Asian Infrastructure Investment Bank and be part of it from the outset, controversial as it is now, the case to be part of those as willing partners is equally strong. With Costa Rica, the Dominican Republic, El Salvador and Guatemala investing in rail infrastructure, there are enormous opportunities for the UK here, as well as in water and sanitation projects such as the Dominican upgrades to their infrastructure. The list goes on. The opportunities are there.
The challenge we have now is how to meet that opportunity given that in some respects—regrettably from these Benches—we are now a competitor with the EU and cannot take advantage of wider EU opportunities. Of course we have the rollover association agreement which the noble Baroness referenced, but it is now a decade old. I would be very interested to hear from the Minister whether there is consideration of moving the association agreement into an FTA with central America.
One area where we lost in the move from the EU association agreement to the UK stand-alone one was the removal of the number of committees and sub-committees that were part of the EU agreement that we were party to. There were the Board on Trade and Sustainable Development, which is so critical in that region, the committee on SPS and the very important committees on technical barriers to trade, customs and rules of origin, public procurement, market access and intellectual property rights. Interestingly, there was also a civil society forum. All these have met the EU through CIRCABC, as it calls it, within this year. I would be grateful if the Minister could say whether there is any equivalent to those committees in our trade dialogue with central America, especially on civil society and technical barriers to trade. All these are fundamental if we are to see the potential grow.
Reference has been made to Mexico. I have a question about that but, first, I want to say that I am grateful as the Lib Dem spokesperson to receive correspondence from the Secretary of State’s office with very welcome updates on negotiations. The new Secretary of State has been very consistent in providing this, for which I am grateful. She also offered the International Agreements Committee of this House private briefings with the chief negotiator after each round, which is fairly innovative and, I hope, signals openness. I served with great pleasure under the chairmanship of the noble Baroness, Lady Anelay, at the start of the inquiries. I could sense her frustration around trade envoys, which was shared around the table. Hopefully, the sign from the new Secretary of State is one of openness, which we can take advantage of with regard to trade envoys.
It was interesting to hear from the noble Baroness, Lady Coussins, that it is not just Mexico that fires its top people in charge of trade, as I think I am now on my seventh Minister. I am not saying that they were all fired, of course—quite the reverse. I hope that there is no disruption to the Mexico agreement, but clarity on when we can expect to see it finalised will be important. With Anne-Marie Trevelyan as Secretary of State, on the India agreement, having a deadline to work towards was vital; now with Kemi Badenoch as Secretary of State, deadlines are not helpful. Which is it? I would be grateful to know what the Minister thinks is a realistic time for us to see something taken forward with Mexico.
The final issue I wish to raise, which has been raised a number of times, is human rights. Since I have been covering trade in this House, the Government have always said that trade is not at the expense of human rights—that we have tried and tried and will continue to try to get a trade and human rights policy and real clarity as to what role human rights will play. If the noble Viscount, Lord Waverley, is correct that this has been downgraded, and if the noble Baroness, Lady Coussins, is correct that dialogues are not even taking place, that is an unwelcome sign. I very much hope that the Minister can give us a positive response, and that when it comes to critical areas of trade with this region, human rights and relationships with civil society in the region will be at the core. We will not be able to see trade grow in a sustainable way unless people are involved in that process as well.
Lord Collins of Highbury (Lab)
My Lords, I thank the noble Baroness, Lady Hooper, for securing this debate and for her enduring commitment to the peoples of Latin America. As the noble Baroness, Lady Coussins, said, our values, human rights and the protection of human rights must be central to our relationship with the region; they are not secondary. Also, if we focus on cultural, educational and other links and, as the noble Lord, Lord Purvis, said, sustain those civil society relationships, that will help improve trade; such protections will make it more sustainable and secure. Of course, growth in central America since the early 1990s has primarily been driven by the growth of the labour market, the rate of which is projected to decrease severely, mainly because of the issues the noble Baroness, Lady Hooper, highlighted. The global challenges we face as a country are certainly faced by all the countries in central America. In order to sustain growth, productivity and capital will need to increase, and we need to know how the uncertainty of this happening impacts the UK’s consideration of future trade with the region. Can the Minister be more explicit about what role UK Export Finance will play in ensuring that capital investment maintains this growth?
As the noble Baroness, Lady Hooper, said during her introduction, we have not debated central America for some time, but we did have an excellent report from the International Relations and Defence Committee on Latin America, the coalition and how we support the Pacific area. We focused a lot on trade and the various opportunities, and I think it was reflected in this debate that there are lots of opportunities we have not been focusing on. Like other noble Lords, I want to ask the Minister about the priorities we now set. Of course, we are going to be re-examining the integrated review regarding our diplomatic efforts, because diplomacy, as the noble Lord said, is an important ingredient of sustaining and introducing trade. I would like to hear from the Minister about that.
Trade between the UK and central America is heavily concentrated on food for import and drink for export. Are the Government’s plans for trade with this region focused on further boosting that sector; or, as the noble Baroness, Lady Hooper, said, on refocusing on some of the new opportunities, particularly technological ones? Certainly, the e-commerce side of things could be expanded.
As the noble Earl, Lord Dundee, reminded us, there are large country-by-country discrepancies in the market size of UK trade in central America. The largest export market, Panama, is over twice the size of second placed Costa Rica. In terms of imports, the Costa Rica market is about three and a half times the size of the second placed Honduras. What plans do the Government have to increase imports, and particularly exports, where current markets are significantly smaller? How do we address the discrepancies the noble Earl talked about?
Of course, there are differences between the EU-central America agreement and the current UK-central America agreement. I heard what the noble Lord, Lord Purvis, said, but would be keen to hear from the Minister whether there are any plans to negotiate.
The other area we addressed when looking at the International Relations Committee’s report on Latin America was the potential impact of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership—I will not use the initials, because I always trip over them. What assessment has the department made of the impact of our decision to join any future trade negotiations with central America?
Talking about the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the DIT’s report on the latest round of talks in October confirmed that negotiations covered
“market access on trade in goods, services and investment, financial services, Government procurement, temporary entry of businesspersons and legal and institutional issues.”
The DIT says that “good progress” has been made, with talks
“set to continue during the rest of the year.”
Have there been further talks since those in Sydney in October? If so, have any different topics come out? The Government previously said that they hoped to conclude these talks by the end of 2022. Assuming that we would know by now if that was still the case, do they have a revised expectation of when the talks will conclude? As with other trade agreements, the advantages of joining the CPTPP will have to be assessed once we see the terms of the offer.
Noble Lords also mentioned Mexico and the continuity agreement which came into force in June 2021. Mention has been made of Kemi Badenoch saying:
“Round two of the UK-Mexico trade negotiations took place from 31 October to 11 November 2022”.
She said that discussions had “remained positive” and reflected the UK and Mexico’s
“shared ambition to negotiate a comprehensive agreement which is better suited for the 21st century and one which strengthens our trading relationship”.—[Official Report, Commons, 28/11/22; col. 26WS.]
Like other noble Lords, I ask: what is the timeframe for this? When can we expect stronger and better progress?
I echo my opening remarks about how we ensure that human rights and other relationships are central to those discussions. As the noble Baroness, Lady Coussins, highlighted, there are human rights issues, with one of the biggest being media freedom and how journalists have been attacked or disappeared. I know that it is not necessarily within the Minister’s remit to talk about these issues, but it is very important that when we are trying to offer preferential arrangements, we do not ignore our values in those discussions. I hope the Minister will be able to respond on that important point.
The Minister of State, Department for International Trade (Lord Johnson of Lainston) (Con)
My Lords, I am extremely pleased to conclude this short debate highlighting the Government’s work to improve trade and investment relations with central American countries. I am grateful for the comments made by the noble Lord, Lord Purvis, about the number of Secretaries of State that he has been engaged with. I think I am not just the fifth Investment Minister, but the sixth as well in the last few months; I hope that position will last a little bit longer. I sense a great sense of urgency about the opportunities that present themselves, and I am very aware of this. In the light of declaring interests, I refer noble Lords to my register of interests, though I do not believe there are any specific interests that cause conflict in this debate today.
I thank my noble friend Lady Hooper for tabling this debate and putting the spotlight on this unique region, and for her dedication to developing our relations with the region and the wider Latin America. As the Prime Minister’s trade envoy to Panama, Costa Rica and the Dominican Republic, she has done huge work—and I have heard this discussed today—not just in terms of trade but in advancing our quest to grow greater cultural ties and more work for civil society. I thank her profusely for that and I will come on a little bit later to talk about some of the specific work that she has been doing. I would also like to be part of her royal party if ever the occasion so arises.
I should point out that, for the purposes of this debate, when I talk about central America, I am referring to Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama and the Dominican Republic, and as a result of the DIT’s operations and our trade envoys’ portfolios, but I am very happy to have a broader debate. It is extremely important—and I am going to cover Mexico and Brazil in my closing remarks—but, yes, we should talk about Latin America, the whole of Latin America, from Mexico down to the southern tip of Argentina. The opportunities there for this country are significant, and the DIT is very well aware of that.
Central America is home to just over 62 million people, with a combined GDP of $918 billion. This represents a sizeable opportunity for UK businesses, as we have discussed, and increasing numbers of British firms are realising this potential. The UK’s trading relationship with central America was worth around £2 billion last year. I have heard your Lordships’ views on how we can forecast further the expectations for our trade with central America and I am happy to revert back to noble Lords on that, but the long and the short of it is that we expect it to grow significantly.
UK firms also do quite well in central America: businesses operating in fields from pharmaceuticals to food and drink have accomplished significant exporting and investment achievements across the region. I was about to go on to talk about recent great successes, but the question I am being asked is: what are we doing particularly to help promote exports to central America and, to some extent, investment from there into the United Kingdom?
The fact is that the Department for International Trade, which I have the privilege of serving in, is totally committed to improving the UK’s relationship with these vibrant markets, and we work hard to enable our firms to access them. We have over 150 people in LATAC, under the excellent leadership of Jonathan Knott—I think my noble friend Lady Anelay mentioned that she had recently met the deputy HMTC and was very impressed, I am grateful for that and will make sure that this is passed on. We have 16 people in central America and 25 people in Mexico, and our international markets teams based across Latin America and the Caribbean are the first point of contact for UK businesses looking to engage with trade opportunities in the region. They are also available to support businesses where DIT may not have a physical footprint—not every country has DIT coverage, and I am sure that noble Lords are aware that we have to differentiate the markets, as has been discussed—but they are then covered by other countries. We have developed a network of relationships with local chambers of commerce and other partners to help UK businesses. On top of that, we have nearly 400 international trade advisers based in the UK.
There was a discussion from the noble Lord, Lord Mountevans, about the analysis of markets and the opportunities that we can present through that analysis; I would be very grateful to see more of that. I have not seen the report that the noble Lord was discussing, but as a Minister for Investment I would be extremely keen to see that work if he could share that with us.
There was a discussion about the involvement of ambassadors and the diplomatic element involved in promoting our trade. I am very pleased to say that, as I am sure my colleagues will know themselves, the ambassadorial teams in the FCDO are more focused now on trade than they have ever been. At every embassy I have been to, I have been struck—as I am sure the noble Lord, Lord Mountevans, was as a previous Lord Mayor—by the extraordinary level of support that we get. I very much hope that, if any of your Lordships do play a role as trade envoys or visit any of these countries anywhere in the world, you will call upon the ambassadors; they are literally our trade ambassadors as much as they are our diplomatic ambassadors.
A successful trading relationship is a win-win. AstraZeneca is a great example—not only is it exporting to the region, but it has also opened new offices in Costa Rica, representing an investment of $8 million into that country, which will create many jobs in the market. Rapiscan, another great example, provides security scanners for several airports in the region and has recently won a contract in the new Palmerola airport in Honduras. Diageo is a great example of the expansion in Panama, and I was very interested to hear about Buddi, the tagging system for prisoners and also the call system for pensioners; I am sure that many Members of this House will have call to use its services at some point—although, hopefully, the pensioner elderly alarm system rather than the prison tagging system. I know for a fact that we have supported Buddi in the DIT significantly in expanding its sales.
We work with companies of all sizes. I think there was a mention of what we do with SMEs. We are not just helping the multinationals; we really are helping the SMEs. We published a refreshed export strategy in November 2021 which is designed to focus on the barriers faced by SMEs. This is a 12-point plan to support exporters. It includes supporting business to trade with central America in the UK through our innovative Export Academy, a network of over 400 export champions across the country, giving businesses knowledge and confidence to enter new markets thanks to on the ground exports, as well as our “Made in the UK, Sold to the World” marketing campaign. This is very important. SMEs are vital for us.
I have heard a number of comments about culture and the need to encourage people to export in general. I hear that, as does the DIT, and we work hard on that through our various campaigns, but particularly through export champions, who provide invaluable help from one businessperson to another. UKEF, which came up a number of times in this debate, has 24 export finance managers, known as EFMs, based across the UK. These are regional representatives of UKEF, who can act as a local point of contact for exporters and businesses with export potential.
We have dedicated in-market support for buyers in central America. Our LATAC international market team export support service is the region’s universal entry point for UK businesses. Once companies express interest, our teams on the ground can help explain how to enter the markets, highlight potential distributors, partners and customers, and, where feasible, provide direct introductions to help UK firms win and expand their business in the region. This is important. We have a number of people on the ground, and in the UK, who are paid by the taxpayer to help support our businesses to export to central America. I am always keen to hear further advice and suggestions from any Member of this House on how we can do more and how we can do better, but the support is there; it is extremely welcome and the feedback is very good. I am not sure whether or not they can all speak Spanish, but all those I have met do, so I will confirm their language skills to the noble Baroness, Lady Coussins.
I will say a few more words on UKEF. The Government are determined to ensure that no viable UK export fails for lack of finance or insurance. My department’s partners in UK Export Finance are focused on making sure that nothing prevents British businesses accessing global markets, and central America is no exception. In advance of this debate I met the acting CEO and was hugely impressed with the team—some of them have been there for an incredibly long time—and the indication he gave to me was that, at some point in the relatively near future, the new CEO would be announced, although that is not confirmed. What is important is that we have a risk appetite of up to £4 billion in some of these markets, so clearly it is incredibly important.
We are discovering ever more varied ways of supporting businesses. For instance, last August—this is important, and it was mentioned today—we signed an MoU with CABEI, the Central American Bank for Economic Integration, which is the leading regional development bank in central America. This allows UKEF to support business in all CABEI member countries and to work together to identify joint financing opportunities.
The question of why we have not joined CABEI has been raised. I think my noble friend raised that point. It was a decision taken last year by the Foreign Secretary. However, this does not stop the UK working with CABEI. We have a number of positive engagements ongoing with the bank which I cannot comment publicly on, but we are working very closely with companies in order to joint finance with CABEI in the partnership with UKEF. I take a personal interest in this, so I will come back to your Lordships at a later date, and I will do what I can to support this.
As I have already mentioned, we are fortunate to have my noble friend Lady Hooper as the Prime Minister’s trade envoy for Costa Rica, Panama and the Dominican Republic. Her excellent work has succeeded in increasing the profiles of British businesses in central American markets through a programme of visits and engagements, and I thank her for that.
It is important to note other things we are doing. My noble friend works alongside two other trade envoys who champion the wider Latin America region. The Minister for Americas and the Caribbean, Minister Rutley, has invited the UK’s trade envoys to Latin America to discuss their recent visits to the region—tomorrow morning, I believe. He will meet my noble friend Lady Hooper, Mark Menzies and Marco Longhi. No doubt he will reflect on his own visits to Colombia, Panama and the Dominican Republic last month during that meeting. I was very interested to hear the comments on the Dominican Republic and its free zones, and the enormous quantity of mozzarella it imports from us.
I commend noble Lords on their engagement with Canning House, the UK’s leading forum on all cross-cutting Latin American issues, and congratulate the noble Lord, Lord Mountevans, on his work leading that organisation.
I will touch on two other areas that came up. The first is education. We know that Governments across the region are investing heavily in education. We are supporting UK firms with expertise in English language tuition to seize these opportunities; for example, Pearson is working in Costa Rica with local government to develop a programme, “English for Employability”, helping students achieve the necessary skills to become more employable.
The second is clean growth, raised by the noble Earl, Lord Dundee. Countries in central America are acutely aware of the risk posed by climate change and are developing plans to have greener economies. The UK has the potential to become the partner of choice in central America for activity relating to clean growth and, alongside this, we are doing an enormous amount of work on infrastructure, particularly related to clean water supply. In May, the UK signed a memorandum of understanding with Panama on sustainable growth, looking at areas such as marine pollution, energy transition and water management. I thank my noble friend Lady Hooper again for her involvement in getting the MoU signed, in her capacity as the PM’s trade envoy.
I also mention something that I think the noble Lord, Lord Mountevans, would like to be involved in: the annual Latin America and the Caribbean UK roadshow, which will be returning in March 2023. The teams will be visiting London, Belfast and Bristol to share the commercial opportunities for UK businesses across the region, including in central America and the Dominican Republic. Going back to my point about how we get more companies to export, I ask your Lordships to act as champions, to sing from the rooftops the opportunities that we have as exporters to this region.
We successfully secured trade agreements for central American countries through our continuity programme, which was discussed during the debate, the UK-central America association agreement. We have also signed the CARIFORUM economic partnership agreement, which includes the Dominican Republic. Both provide important continuity and certainty for businesses by maintaining the UK’s access to preferential tariffs and facilitating access to businesses from the region in the UK. I am pleased that the FCDO will host the first central American association council, inviting Ministers to the UK, and that DIT will host the first ministerial joint council, under the CARIFORUM economic partnership agreement. A huge amount is being done in these international fora.
There are two more countries to focus on. Mexico was raised by the noble Baroness, Lady Coussins. We are now in round two of our FTAs. It is very important that we do not rush to a false conclusion. My esteemed Secretary of State, Kemi Badenoch, has already said very clearly that we do not need to set artificial deadlines. As far as I am aware, the entire firing of the negotiating team has had no effect on our plans to come to a conclusion over the next few years. That is a reasonable timeframe in which to conclude this FTA. It was mentioned that in Brazil the political environment allows us to have new discussions with the Government. I am pleased to say that we will be. Officials will engage with Lula’s new team once they are appointed, to understand the new Government’s position on an ETP.
I will finish by talking about the challenges in the region. This is not a region that is completely straightforward. On human rights, I stress that we have not downgraded the Government’s commitment at all. We are clear that more trade does not have to come at the expense of human rights, and we continue regularly to address, support and engage, through support for projects and local partners, public diplomacy and diplomatic dialogue, on a broad range of human rights topics, bilaterally and in the multilateral fora. However, we do not necessarily believe that FTAs and trade agreements are the best mechanisms for aligning our values on human rights. We have been assiduous in working to ensure that individuals whom we believe are particularly culpable have had sanctions taken out against them.
Regarding corruption, the UK takes very seriously allegations of corruption. My noble friend Lady Anelay spoke about businesses finding it difficult to compete in local markets where there is a high degree of corruption. This is often the case in many emerging markets, but we have worked extremely hard; in this instance, to sanction two Venezuelans under the global anti-corruption sanctions regime. We work closely with local Governments to reduce levels of corruption and UKEF complies strictly with anti-bribery and corruption policy.
I will come to a conclusion. As I have set out today, central America is a region bursting with potential. As George Canning famously proclaimed, let us call in the New World,
“to redress the balance of the Old”.
The Government are doing all they can to take their trading relationship with the region to new heights. In turn, this work will enable British companies to share their expertise, enjoy the opportunity presented by these markets, and provide lasting economic and social benefits.
Viscount Waverley (CB)
Before the Minister sits down, he made the point that taxpayers’ money is used to compile assessments. It is not for the want of trying over the years. Will the Minister request the Secretary of State to finally release the trade commissioners’ annual reports, which should be public information and would help assess exactly where and what the opportunities are? I have been trying for years to have this achieved, with absolutely zero results.
Lord Johnson of Lainston (Con)
I thank the noble Viscount for that request. The Department for International Trade produces a plethora of reports—
Lord Johnson of Lainston (Con)
The trade commissioners contribute to the statistics that we provide as a department. If he has time, I would be perfectly happy to sit down with the noble Viscount and go through the statistics that we produce. If we can find a way to provide more valuable insights, I am sure that we will be delighted to do so.