House of Commons

Wednesday 25th January 2023 Commons Chamber

Wednesday 25 January 2023

The House met at half-past Eleven o’clock

Prayers

Wednesday 25th January 2023 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Wednesday 25th January 2023 Commons Chamber

The Minister for Women and Equalities was asked—

[Carol Monaghan (Glasgow North West) (SNP)]

1. What steps the Government are taking to tackle (a) gender and (b) racial inequality in the workplace.

[Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)]

13. What steps the Government are taking to tackle (a) gender and (b) racial inequality in the workplace.

[The Minister for Women and Equalities (Kemi Badenoch)]

As part of our strategy to tackle violence against women and girls, we have committed to strengthen the protections against sexual harassment in the workplace. That includes taking forward two legislative measures as part of the Worker Protection (Amendment of Equality Act 2010) Bill, introduced by the hon. Member for Bath (Wera Hobhouse). Furthermore, in our landmark inclusive Britain strategy we committed to publishing guidance on ethnicity pay reporting for employers. That will be published soon and will support employers to identify and tackle unfair pay gaps in their workforces.

[Carol Monaghan]

New data published by the Ministry of Defence earlier this month showed that in the year to September 2022, more women left the armed forces than joined. Given the string of sexual abuse and harassment allegations that we have heard, that data is concerning but hardly surprising. What is the Minister doing to ensure that women are safe in the armed forces and that the pervasive attitude of misogyny in the armed forces is tackled?

[Kemi Badenoch]

The hon. Lady is right to raise that serious issue. My colleagues in the Ministry of Defence take it very seriously and have a strategy and a plan to tackle it. As I mentioned in respect of sexual harassment in the workplace, we have many measures to look into what is going on. We are concerned about women leaving the workplace, and this Government will do everything we can to make sure that women are encouraged to stay and thrive in their workplaces.

[Stuart C. McDonald]

The Scottish Government are encouraging employers to report on ethnicity pay gaps—a policy supported by the Women and Equalities Committee—but the Scottish Government do not have the powers to enforce that policy. Is the Minister willing to have a conversation about the transfer of those powers, so that we can all learn lessons from the results?

[Kemi Badenoch]

We have no plans to devolve equal opportunities policy. Quite a lot of work is being done on ethnicity pay reporting. It should not be made mandatory. It is different from gender pay gap reporting, because it covers more than two separate categories. I am happy to write to the hon. Gentleman with more detail on the work that we are doing, but we will publish guidance for those companies that want to carry out ethnicity pay reporting in due course.

[Mr Speaker]

I call the Chair of the Women and Equalities Committee.

[Caroline Nokes (Romsey and Southampton North) (Con)]

Gendered abuse, harassment and bullying in the workplace is wrong, but it can happen anywhere. Does my right hon. Friend agree that when there is gendered abuse, bullying and intimidation in this Chamber, we should make sure that action is taken to stamp it out?

[Kemi Badenoch]

I completely agree. This is a very serious issue. We are all aware of allegations that have been made against Members in this House. I know that you care very much about this issue, Mr Speaker. This is a place where we have freedom of speech and freedom of expression. We condemn any Member who tries to intimidate, harass or abuse other Members of Parliament when they are simply representing their constituents.

[Rehman Chishti (Gillingham and Rainham) (Con)]

On racial inequality and discrimination, a previous Home Office report looked at hate crime in terms of Islamophobia and antisemitism. The statistics and figures were absolutely appalling, with a high number of incidents. The Government removed the independent adviser on Islamophobia, Qari Asim. He apparently did not have any terms of reference for two years. Given the Government’s commitment to tackle Islamophobia and intolerance, what is their strategy?

[Kemi Badenoch]

The Government have a strategy to tackle anti-Muslim hatred. I recommend that my hon. Friend raises this issue with the Secretary of State for Levelling Up, Housing and Communities, who is responsible for that portfolio as part of the communities strategy.

[Mr Speaker]

I call the Scottish National party spokesperson.

[Kirsten Oswald (East Renfrewshire) (SNP)]

This week, the UK Government rejected outright five recommendations of the Women and Equalities Committee on menopause and the workplace, and they are not committing to any new work in response to the report. The Chair of the Committee, the right hon. Member for Romsey and Southampton North (Caroline Nokes), described the Government’s progress as “glacial” and their response as “complacent”. She pointed out the missed opportunity to protect vast numbers of talented and experienced women from leaving the workforce. Will the Minister change tack? Will she commit finally to acting on menopause and the workplace? If she will not, will she commit to look again at why devolving employment law in Scotland matters so much, so that we can do that work?

[Kemi Badenoch]

I would ask the hon. Lady to read the women’s health strategy, in which she will see that the menopause is a priority area. The Select Committee has made recommendations, which we have considered carefully, but there is no point in the Government having a strategy if they are simply going to accept recommendations from elsewhere that do not conform to it. The best thing for her to do would be to work with the Government and look at the good work we are doing on tackling issues around the menopause.

[Emma Hardy (Kingston upon Hull West and Hessle) (Lab)]

2. If she will hold discussions with her Cabinet colleagues on NHS waiting lists for gynaecological care.

[The Minister for Women (Maria Caulfield)]

Tackling NHS waiting lists, including for gynaecology, is a priority for the Government, which is why we are spending £8 billion on clearing our backlog. For gynae procedures specifically, we have opened 90 surgical hubs, 90 community diagnostic centres and women’s health hubs, which will all help to tackle gynaecology backlogs.

[Emma Hardy]

Some vaginal mesh-injured women have been left waiting four years for mesh removal, and I have already highlighted women’s concerns that the surgeons they go to for mesh removal are trained only in implanting the mesh and not in removing it. These women fear that, once again, they are being used as test subjects. When will mesh-injured women get the redress that was recommended in Baroness Cumberlege’s review, “First Do No Harm”?

[Maria Caulfield]

I thank the hon. Lady for her work in this space. I recognise that while we have set up nine specialist mesh centres to tackle mesh removal and seen a number of women come forward and receive their surgery, there are still a number on the waiting list. I am meeting some of the campaigners on mesh removal next week. We were at the Health and Social Care Committee hearing just a few weeks ago, and I heard some of their concerns then. I recognise that there is still progress to be made in this space.

[Mr Speaker]

We now come to the shadow Minister, Anneliese Dodds.

[Anneliese Dodds (Oxford East) (Lab/Co-op)]

NHS England figures show that in October 2012, 15 women had been waiting over a year for gynaecological treatment. Can the Minister tell the House how many women had been waiting for that long in October last year?

[Maria Caulfield]

As the shadow Minister will know, there is a backlog of procedures in all four devolved nations of the United Kingdom for clinical reasons, rather than political reasons. We have made huge progress in clearing the two-year backlog, with the majority of those patients now having had their treatments. We are on track to meet the target for the 18-month backlog in April, and we will then focus on those who are waiting a year.

[Anneliese Dodds]

I regret that the Minister did not directly answer my question—perhaps it was because she is aware of the appalling scale of the backlog. As of October last year, 38,000 women had been waiting over a year for treatment. That is 2,500 times more than 10 years ago. On top of that, less than half of women are up to date with cervical screening in some areas. Do women suffering in pain now just have to accept long waiting times and low screening rates under the Conservatives?

[Maria Caulfield]

Isn’t it sad that this is turning into a political football, when there are clinical reasons why backlogs have accumulated over the two years? Perhaps the shadow Minister will look at Wales, where Labour has been in charge for 20 years and where the performance is worse than in England.

[Taiwo Owatemi (Coventry North West) (Lab)]

3. What steps the Government are taking to reduce disparities in maternity outcomes for migrant women.

[The Minister for Women (Maria Caulfield)]

The MBRRACE report shows that women from black, Asian and mixed ethnic groups have worse maternity outcomes. That is why NHS England has published the equity and equality guidance for local maternity services, supported by £6.8 million of investment to focus on actions to reduce the disparities.

[Taiwo Owatemi]

Last year, the Government’s maternity taskforce pleaded with the Government to provide better maternity care for migrant women, but eight in 10 refugee and migrant women are still waiting more than 10 weeks to get their first antenatal care. That is compounded by the fact that black women in this country are still four times more likely to die from childbirth. Can the Minister let us know when the taskforce will finish its inquiry and when the Government will start delivering better maternity care for women in this country?

[Maria Caulfield]

I thank the hon. Lady for highlighting the work of the maternity disparities taskforce, which this Government set up. I have been working with its co-chair, Professor Jacqueline Dunkley-Bent, and our next meeting will focus on some of the actions to tackle this issue. From October last year, each local area has produced a local maternity equity and equality action plan, targeting specific communities within the area to try to improve outcomes. I encourage all Members to look at their local action plan, and if they have concerns that it will not meet those needs, they should please come and see me. I am very happy to work with Members on this.

[Mr Tanmanjeet Singh Dhesi (Slough) (Lab)]

4. What steps she is taking to help close the gender pay gap.

[Ellie Reeves (Lewisham West and Penge) (Lab)]

15. What steps she is taking to help close the gender pay gap.

[The Minister for Women and Equalities (Kemi Badenoch)]

It was a Conservative Government who introduced gender pay gap reporting in 2017, to motivate employers to look at their pay data and improve workplace gender equality. To accelerate progress, we are supporting legislation that enhances flexible working, extends redundancy protection for those on maternity leave, introduces carer’s leave and strengthens protections against harassment in the workplace.

[Mr Dhesi]

The gender pay gap for full-time employees was 8.3% in April 2022, which was sadly up from 7.7% the previous year. Worse still, Labour’s analysis has uncovered that the gender pay gap for black African women is an appalling 26% when compared with the average male worker, and the figures for Bangladeshi and Pakistani women are 28% and 31% respectively. Rather than watch as the situation deteriorates, what urgent steps are the Government taking to deal with these dreadful disparities?

[Kemi Badenoch]

I do not recognise any of the hon. Gentleman’s statistics. With all due respect, I have seen all sorts of Labour analysis that misuses and abuses statistics to the point where we honestly cannot take it seriously. If he does have real evidence, I am keen that he sends it for the equality hub to analyse. Those figures do not represent anything we have found across Government.

[Ellie Reeves]

Closing the gender pay gap would add £600 million to the UK’s economy by 2025. Labour has a plan to do this by requiring large firms to publish gender pay gap plans, permitting equal pay comparisons, extending statutory maternity and paternity leave, and strengthening protections for pregnant women. Will the Government finally accept our proposals?

[Kemi Badenoch]

I am afraid that the Government will not accept those proposals. The hon. Lady conflates equal pay and gender pay gap reporting, which are not the same thing. This is an area that has a lot of nuance, and Labour needs to do a little more homework.

[Mr Robin Walker (Worcester) (Con)]

Does my right hon. Friend agree that one of the most effective ways to close the gender pay gap is to support women who are returning to work after pregnancy? Will she therefore use her good offices to encourage cross-Government work to improve the affordability and availability of childcare for new mothers?

[Kemi Badenoch]

Both sides of the House can agree that more support and more work is needed on this issue. Childcare is one of the reasons why women leave the workplace, and we are doing everything we can to support women to have appropriate childcare arrangements.

[Chloe Smith (Norwich North) (Con)]

5. What recent progress she has made in implementing the British Sign Language Act 2022.

[The Parliamentary Under-Secretary of State for Work and Pensions (Mims Davies)]

I thank my right hon. Friend for her important work in delivering the Act. Work continues across Government to ensure that the Departments named in the schedule to the Act are aware of their reporting duty. They will report on their use of BSL in public communications at the end of the first reporting period on 28 June.

[Chloe Smith]

I welcome that update. Will the advisory board be on track ahead of that first statutory reporting date? When will the statutory guidance be commenced? Furthermore, will my hon. Friend commit to the Government’s major public broadcasts being fully accessible?

[Mims Davies]

My right hon. Friend will be pleased to know that the first meeting of the Departments driving the Act is due to take place in mid-February. It is vital that the 20 Departments listed in the schedule deliver the commitments. The advisory board will be the first dual-language board advising His Majesty’s Government, which demonstrates our commitment to the deaf community. It will form the vital guidance on the Act, and it will rightly look at BSL for major public broadcasts, which many of our constituents want to see and have asked for.

[Margaret Ferrier (Rutherglen and Hamilton West) (Ind)]

What discussions has the Minister had with her colleagues in the Government Communication Service about ensuring that BSL interpretation is provided for Government announcements and media events, and about the importance of not relying on written documents as an adjustment for deaf people?

[Mims Davies]

I thank the hon. Lady for her interest. The British Sign Language advisory board is being established to advise the Government on that implementation. Among the people giving advice will be BSL signers, and the majority of the members will be deaf BSL users who have lived experience and want Government communications to be accessible. I am proud that the Department for Work and Pensions has accessible jobcentres, and the same is needed for major Government announcements.

[Catherine West (Hornsey and Wood Green) (Lab)]

6. If she will make an assessment of the implications for her policies of trends in child poverty levels for black, Asian and minority ethnic children.

[The Parliamentary Under-Secretary of State for Work and Pensions (Mims Davies)]

The Government are committed to a sustainable long-term approach to tackling poverty and supporting families on lower incomes. To help people progress, the Department for Work and Pensions provides a range of support for anyone at any age, career stage or background to move forward and be better off. As well as one-to-one support with their work coach, jobseekers can access sector-based work academies, the restart programme and the Work and Health programme.

[Catherine West]

The Jesuits said, “Give me a child until he is seven and I will show you the man.” That means that the impact of what we do in helping children under the age of seven will create a more just future. What urgent action will the Government take to address deep poverty affecting 46% of black, Asian and minority ethnic families? Is there extra funding that can be given to schools and put into our teaching to support children under the age of seven in black, Asian and minority ethnic communities?

[Mims Davies]

I thank the hon. Lady for her question. As an MP who has won an award for focusing on disadvantaged groups, there is no doubt that she has interest in this area. At 70%, the ethnic minority employment rate is at a record high. We know that work is the best route out of poverty, and that mentoring, support and being able to see role models are absolutely key. I commit to continuing to work across Government with those disadvantaged groups to make sure that that focus is rightly on them.

[Mr Speaker]

I call the shadow Minister.

[Yasmin Qureshi (Bolton South East) (Lab)]

My hon. Friend the Member for Hornsey and Wood Green (Catherine West) asked about deep poverty among minority children. I shall repeat the point again: black, Asian and minority ethnic households are twice as likely to be in deep poverty, struggling to afford everyday basics such as food and energy. That is 46% of ethnic minority children living below the breadline. Is the Minister proud of her Government’s record, and will she answer the question that was put by my hon. Friend?

[Mims Davies]

I refer the hon. Lady to my previous answer. We do know that work is the best route out of poverty and the best way to tackle those deep-rooted disadvantages. I recently joined a No.10 roundtable on a mentoring and support pipeline to help understand what is holding people back. No one should be left behind because of their postcode or their background. Mentoring circles at the DWP can make a real difference, particularly to young people who are looking to progress from that deep disadvantage.

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

7. What recent assessment she has made of the implications for her policies of the gender pension gap.

[The Parliamentary Under-Secretary of State for Work and Pensions (Mims Davies)]

The primary causes of the gender pension gap are due to the historical inequality of the labour market. This includes differences in working patterns and earnings for men and women. The Government have taken key steps, such as the introduction of shared parental leave, mandatory gender pay gap reporting, and an effort, as we have heard already today, to tackle the root causes of this problem for women. I know that the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Sevenoaks (Laura Trott) is looking directly at this issue for women as well.

[Patricia Gibson]

It is bad enough that women born in the 1950s were robbed of their pensions, but, more generally, the gender pension gap is significantly larger than the gender pay gap and applies to a significantly large proportion of women in the UK, with retired women more likely to be poorer and more likely to rely on pension credit. That is a problem that persists. Will the Minister urgently address the issue, particularly the injustice suffered by WASPI women, or will her Government just ignore women being poorer in retirement?

[Mims Davies]

I assure the hon. Lady that we will not be doing that. We monitor pension contributions and participation by gender, and publish data regularly through our workplace pension participation and savings trends publication. Key to this matter is our funding of returner programmes, which supports those who have taken time out of the labour market for caring responsibilities. Finally, pension sharing on divorce is an option that can help women if a marriage or civil partnership has broken down. As I have said, this is a focus for us all.

[Cat Smith (Lancaster and Fleetwood) (Lab)]

T1. If she will make a statement on her departmental responsibilities.

[The Minister for Women and Equalities (Kemi Badenoch)]

The Government will publish a draft Bill setting out our approach to banning conversion practices, which will go for pre-legislative scrutiny in this parliamentary Session. We are committed to protecting everyone at risk of those practices from harm and we are clear that the legislation must not affect the ability of parents, teachers or counsellors to have open, exploratory and even challenging conversations with young people.

[Cat Smith]

Has the Minister had sight of the Health and Social Care Committee’s report into the Independent Medicines and Medical Devices Safety Review and, particularly on paragraph 53, what conversations might she be having with Treasury colleagues to support women seeking redress?

[Kemi Badenoch]

I thank the Health and Social Care Committee for its IMMDS follow-up report. Our sympathies remain with all those women affected by sodium valproate. Patient safety is our top priority and we are committed to improving how the system listens to people, which is why I have asked the Patient Safety Commissioner, Dr Henrietta Hughes, to look into redress schemes. I am not committing to any specific next steps today, but the Minister for Women will provide an update in due course.

[Bob Blackman (Harrow East) (Con)]

T5. Does my hon. Friend—[Interruption.] Cheers from the Opposition? That does not happen very often. Does my right hon. Friend agree that, whether they live in Land’s End or John O’Groats, it is important for every citizen to know their rights and for those rights to be implemented on a clear and consistent basis so that no one is discriminated against?

[The Minister for Equalities (Stuart Andrew)]

My hon. Friend is absolutely right. The United Kingdom has some of the strongest equality legislation in the world, and rightly so. We continue to ensure that all those rights are protected. Under the Equality Act 2010, any person who is subject to discrimination can personally take their case to court to seek a remedy.

[Carolyn Harris (Swansea East) (Lab)]

T2. [R] Despite the 11th-hour response to my letter about the hormone replacement therapy repayment certificates, which arrived in my inbox just an hour ago, there still appears to be some ambiguity about what the certificate will cover. In her letter, the Minister says that changes to the drug tariff are being finalised to add “eligible items”, with no indication whether that will cover all HRT products. For the benefit of women across the country and as a matter of urgency, can the Minister please provide a comprehensive list of eligible products?

[The Minister for Women (Maria Caulfield)]

I thank the hon. Lady for her work in this space. I responded to her letter last week as quickly as possible and I am glad she has received the response. I just want to confirm that from April the HRT prepayment certificate will be available to women—at £18.70 for a whole year—saving women hundreds of pounds on HRT prescriptions every year.

[Laura Farris (Newbury) (Con)]

T6. I am pleased that the Government are reinstating protection against third-party harassment in the workplace, but employers are frequently confused when confronted with conflicting views on sex and gender. Can my right hon. Friend confirm that the Equality and Human Rights Commission will be publishing detailed guidance to explain how employers should treat protected beliefs on sex-based rights?

[Kemi Badenoch]

The Government will be supporting the Equality and Human Rights Commission in developing a statutory code on workplace harassment. We will be working closely on that. The Government are also preparing their own practical guidance for employers on preventing sexual harassment in the workplace, which should address the very issues my hon. Friend just raised.

[Clive Efford (Eltham) (Lab)]

T3.   A Citizens Advice report published in the past two weeks shows that 600,000 households were moved to prepayment meters. There are bound to be many vulnerable and disabled people who have been moved on to prepayment meters in that time. Can the Minister say what she has been doing to ensure that that practice ceases and to protect those people in future?

[The Parliamentary Under-Secretary of State for Work and Pensions (Mims Davies)]

I believe that issue is going to be discussed further between the Department for Business, Energy and Industrial Strategy and the Department for Work and Pensions, which provides support. I am very proud to be bringing forward the next stage of the household support fund and the cost of living payments. I urge anybody who is concerned about making payments to contact their energy supplier, to use the benefits calculator on gov.uk and to look at the support for the cost of living from the household support fund through their local authority.

[Nicola Richards (West Bromwich East) (Con)]

The Wagner Group is reported by the UN and others to be committing atrocities, including rape, against women and girls in Ukraine on behalf of its Russian paymasters. Will the Secretary of State raise that with Cabinet colleagues and urge the Government to proscribe the group as a terrorist organisation?

[The Minister of State, Foreign, Commonwealth and Development Office (Anne-Marie Trevelyan)]

The UK condemns Russia’s use of Russian-state proxies such as the Wagner Group in Ukraine and globally. While the mercenaries operating in Ukraine in support of the Russian invasion are present in other conflict settings, including Mali and the Central African Republic, and are continuing to bring us huge challenges, we continue to work with the Ukrainian Government on tackling conflict-related sexual violence, including through UK expertise to support the investigations through the Atrocity Crimes Advisory Group. We will not stop providing that support.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

T4. The average cost of a full-time nursery place for a child under 2 when there is no Government support is about £14,000 a year, and it is much more in London. Can the Minister get her Government to put in the investment needed to fix the broken childcare system so that more mothers can return to work, particularly those who are single parents and struggle to return to work because of the lack of affordable childcare?

[Kemi Badenoch]

This is, as I mentioned earlier, an issue that the Government are working very hard on. I will raise it with my right hon. Friend the Secretary of State for Education, who can write to the hon. Lady and address those concerns more fully.

[Mr Speaker]

Order. Before we come to Prime Minister’s questions, I point out that a British Sign Language interpretation of proceedings is available to watch on parliamentlive.tv.

The Prime Minister was asked—

[Margaret Ferrier (Rutherglen and Hamilton West) (Ind)]

Q1. If he will list his official engagements for Wednesday 25 January.

[The Prime Minister (Rishi Sunak)]

Can I start by wishing everyone a happy Burns night, especially those celebrating in Scotland?

As we prepare to mark Holocaust Memorial Day, I am sure the whole House will join me in paying tribute to the extraordinary courage of Britain’s holocaust survivors, including 94-year-old Arek Hersh, who is here with us today. This Government will legislate to build a holocaust memorial and learning centre next to Parliament so that the testimonies of survivors such as Arek will be heard at the heart of our democracy by every generation to come.

This morning, I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall have further such meetings later today.

[Margaret Ferrier]

Shockingly, one in six women in the UK has experienced economic abuse. This is not just about money, but about restricting access to other resources such as food, housing or work. It is a lesser known aspect of coercive control that affects my constituents, the Prime Minister’s constituents and those of every Member across the House. What plans does the Prime Minister have to review in detail the way that Government Departments and policies can be exploited by abusers, and to ensure that those loopholes can be closed?

[The Prime Minister]

The hon. Lady raises an important point. Let me assure her that the Government are committed to tackling violence against women and girls. That is why we passed the landmark Domestic Abuse Act 2021, introducing new offences such as coercion and coercive control, stalking and others. We will continue to do everything we can to ensure women and girls feel as safe as they deserve and rightly should be.

[Marco Longhi (Dudley North) (Con)]

Q2.   Although I was disappointed that Dudley did not make the final cut in the latest levelling-up funding round, I am of course pleased that we received the £25 million towns deal, the brand new Duncan Edwards leisure facility, and a transport interchange project that has been secured since my election in 2019. But our high street is on its knees, so will the Prime Minister meet me and Dudley Metropolitan Borough Council to discuss our levelling-up bid and how we can ensure success in the next round?

[The Prime Minister]

My hon. Friend is a great advocate for his constituents. I am delighted that, thanks to his efforts, Dudley has received £25 million from the towns fund. I know that there will be disappointment about the levelling-up fund, but all bids, including that made by Dudley Council, can receive feedback to be strengthened for future funding rounds. I would be very happy to meet him to discuss it further.

[Mr Speaker]

We now come to the Leader of the Opposition.

[Keir Starmer (Holborn and St Pancras) (Lab)]

This week, we will remember the 6 million Jews murdered in the holocaust and all those scarred by genocide since as we mark Holocaust Memorial Day. We must all commit, across this House, to defeat prejudice and hatred wherever we may find it. To work for a better future, we must find light in the darkness.

May I also join the Prime Minister in wishing everyone a happy Burns night?

Zara Aleena was walking home from a night out with her friends when she was savagely attacked, assaulted and beaten to death. Zara was a brilliant young woman; a trainee lawyer with a bright future. Her killer is a violent, racist, woman-hating thug, not fit to walk the same streets. But that is precisely the problem: he was free to walk the same streets. The inspectorate report into her case says that opportunities were missed by the probation service that could have prevented this attack and saved her life. Does the Prime Minister accept those findings?

[The Prime Minister]

This was a truly terrible crime. As the chief inspector has found, the failings in this case and others were serious and unacceptable. In both of the cases that are in the public domain, these failures can be traced to failings in the initial risk assessment, and that is why immediate steps are being taken to address the serious issues raised.

[Keir Starmer]

I am glad the Prime Minister accepts those findings. The report also says that staffing vacancies and excessive workloads contributed to those fatal failures. It makes it absolutely clear this was not a one-off. As the report says, these are “systemic issues” in the probation service. They are clearly ministerial responsibilities. Does the Prime Minister accept those findings as well?

[The Prime Minister]

Let me outline for the right hon. and learned Gentleman exactly what steps we are taking, and that is to ensure that mandatory training to improve risk assessments is being put in place. We are mandating checks with the police and children’s services before a probation officer can recommend to the court that a convicted offender be given an electronically monitored sentence, and we are implementing new processes to guarantee the swift recall of offenders. The action we are taking is already making a difference, as we see, for example, in the reduction of the number of electronically monitored curfews being given by the courts.

[Keir Starmer]

It was Barking, Dagenham and Havering that tragically and fatally let Zara down, but across the country, probation services are failing after a botched then reversed privatisation and after a decade of under-investment. It is yet another vital public service on its knees after 13 years of Tory Government. I spoke to Zara’s family this morning. It is hard to convey to this House the agony that they have been through. They say that the Government have blood on their hands over these failings. The Prime Minister has accepted the findings of the report. Does he also accept what Zara’s family say?

[The Prime Minister]

My heart of course goes out to Zara’s family. The right hon. and learned Gentleman mentioned accountability. The probation service has taken action where failings have been found and where that has been appropriate. With regard to the overall service, there is now £155 million a year of extra investment that we are putting in to the probation service so that we can deliver better supervision of offenders. There has also been an increase in the number of senior probation officers, but one of the other things we must remember, if we do want to increase the safety of women and girls on our streets, is that we need tough sentencing, and that is why this Government passed the Police, Crime, Sentencing and Courts Act 2022, which he and his party opposed.

[Keir Starmer]

In the light of the case of Zara, I really do not think the Prime Minister should be boasting about the protection he is putting in place for women. I am not going to take lectures from him about that.

Does the Prime Minister agree that any politician who seeks to avoid the taxes they owe in this country is not fit to be in charge of taxpayer money?

[The Prime Minister]

I am pleased to make my position on this matter completely clear to the House. The issues in question occurred before I was Prime Minister. With regard to the appointment of the Minister without Portfolio, the usual appointments process was followed. No issues were raised with me when he was appointed to his current role. Since I commented on this matter last week, more information has come forward, which is why I have asked the independent adviser to look into the matter. I obviously cannot prejudge the outcome of that, but it is right that we fully investigate this matter and establish all the facts.

[Keir Starmer]

The Prime Minister avoided the question. Anybody watching would think it is fairly obvious that someone who seeks to avoid tax cannot also be in charge of tax, yet for some reason, the Prime Minister cannot bring himself to say that or even acknowledge the question. Last week, the Prime Minister told the House that the chair of the Tory party had addressed his tax affairs “in full” and there was “nothing” to add. This week, after days of public pressure, he now says there are serious questions to answer. What changed?

[The Prime Minister]

I know the right hon. and learned Gentleman reads from prepared sheets, but he should listen to what I actually say. Since I commented on this matter last week, more information, including a statement by the Minister without Portfolio, has entered the public domain, which is why it is right that we do establish the facts. Let me take a step back. Of course, the politically expedient thing to do would have been for me to say that this matter must be resolved by Wednesday at noon, but I believe in proper due process. That is why I appointed an independent adviser and that is why the independent adviser is doing his job. The Opposition cannot have it both ways. The Leader of the Opposition and his party chair, the hon. Member for Oxford East (Anneliese Dodds), both urged me and the Government to appoint an independent adviser, and now he objects to that independent adviser doing their job. It is simple political opportunism and everyone can see through it.

[Keir Starmer]

We all know why the Prime Minister was reluctant to ask his party chair questions about family finances and tax avoidance, but his failure to sack him, when the whole country can see what is going on, shows how hopelessly weak he is—a Prime Minister overseeing chaos, overwhelmed at every turn. He cannot say when ambulances will get to heart attack victims again. He cannot say when the prison system will keep streets safe again. He cannot even deal with tax avoiders in his own Cabinet. Is he starting to wonder if this job is just too big for him?

[The Prime Minister]

The difference between the right hon. and learned Gentleman and me is that I stand by my values and my principles, even when it is difficult. When I disagreed fundamentally with the previous Prime Minister, my right hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson), I resigned from the Government, but for four long years, he sat next to the right hon. Member for Islington North (Jeremy Corbyn) when antisemitism ran rife and his predecessor sided with our opponents. That is what is weak: he has no principles, just petty politics.

[Edward Timpson (Eddisbury) (Con)]

Q4. For our most vulnerable children, school is often their principal place of safety as well as education, but as reported in my review of school exclusions for the Government in 2019, the unacceptable and illegal use of off-rolling is still shutting a worrying number of children out of the classroom, out of learning and out of the protection they need from gangs, violence and domestic abuse. The Department for Education has done some impressive and excellent work to address this terrible practice, but what more can my right hon. Friend do to ensure that we permanently exclude off-rolling from our schools?

[The Prime Minister]

My hon. and learned Friend raises an important issue. The Government are clear that off-rolling is unlawful and unacceptable in any form, and the Department for Education continues to work with Ofsted to tackle it. Where Ofsted finds it, it will always be addressed in the inspection report and it could also lead to a school’s leadership being judged inadequate.

[Mr Speaker]

We come to the SNP leader.

[Stephen Flynn (Aberdeen South) (SNP)]

Let me start by echoing the sentiments of the Prime Minister and the Leader of the Opposition in relation to Holocaust Memorial Day—truly horrific crimes that we must never forget and endeavour to ensure are never repeated.

May I send my heartfelt thoughts, and indeed I hope those of all across the Chamber, to the firefighter who is in a serious condition following the blaze in Edinburgh just a few days ago?

May I ask the Prime what advice he would have for individuals seeking to protect their personal finances? Should they seek out a future chair of the BBC to help secure an £800,000 loan, should they set up a trust in Gibraltar and hope that HMRC simply does not notice, or should they do as others have done and simply apply for non-dom status?

[The Prime Minister]

Let me share in the hon. Gentleman’s expressions of sympathy to the families concerned and to the firefighter who is currently in hospital. I am sorry to hear that, and I wish him a speedy recovery.

I am proud of this Government’s record of supporting the most vulnerable in our society: this winter, helping all families—£900—with their energy bills; raising the national living wage to record levels; and ensuring that our pensioners get the support they need. That is what this Government are doing to ensure financial security in this country.

[Stephen Flynn]

I am not sure what question the Prime Minister thought I asked, but that certainly was not it. Let us be clear about this: this is now a matter of the Prime Minister’s own integrity and accountability. After all, when there were questions about the Home Secretary and concerns about her role in relation to national security, he chose to back her. Now, he is choosing to back the chair of the Tory party, despite a £5 million penalty from HMRC, and of course he is seeking to protect the former Prime Minister despite his cosy financial relationship with the chair of the BBC. Is it little wonder that people in Scotland may well consider the Tory party to be a parcel of rogues?

[The Prime Minister]

What I am standing up for is proper due process. That is why we have an independent adviser. It is right that the independent adviser conducts his investigation. That is how we will ensure accountability, and that is what I will deliver.

[Rob Roberts (Delyn) (Ind)]

Q9. Despite having less than 5% of England’s population, Wales has almost 40 times more people waiting more than two years for NHS treatment—a sad case of “devolve and forget”, unfortunately, which does a disservice to my constituents in Delyn. Will the Prime Minister confirm that the UK Government remain concerned about the healthcare of the people in Wales, and with north Wales health board having been in “special measures” for eight years, can he come up with a way of putting the Welsh Labour Government in it too?

[The Prime Minister]

As the hon. Gentleman highlights, the NHS right across our Union is facing pressure because of some of the challenges of flu and covid in particular causing high bed occupancy this winter. We are focused on delivering on the people’s priorities and bringing down the backlog. We have currently already eliminated waits of over two years and, as the hon. Gentleman says, there is more to go. That is why our investment this week into mental health treatment will ensure that we can ease the pressure further in A&E, and I continue to deliver that across the country.

[Sir Jeffrey M. Donaldson (Lagan Valley) (DUP)]

I echo the comments of the Prime Minister in relation to Holocaust Memorial Day, and as we think of the situation in Ukraine, we also extend our best wishes to President Zelensky on his birthday.

Freedom of religion or belief is important in this country. Isabel Vaughan-Spruce was praying silently outside an abortion clinic in Birmingham when she was arrested and questioned by the police, not about her written or spoken words, but about her thoughts. We value freedom of religion or belief in this country. Will the Prime Minister commit himself to examining the laws of the United Kingdom to ensure that this country remains a beacon for freedom of religion or belief across the world?

[The Prime Minister]

Of course we believe in freedom of religious expression and belief in this country, but we are also balancing that with the rights of women to seek legal and safe abortions. That is currently being discussed in this Parliament. These are always matters of a free vote, and I know that Members will treat them with the sensitivity they deserve.

[Dr Liam Fox (North Somerset) (Con)]

Q11.   Innocent civilians are being murdered in Ukraine on Putin’s orders as we speak, and as we sit in a warmed House of Commons, families are freezing because their electricity has been cut off by Russian forces. Putin believes that Ukraine is more important to him than to the free world, and is moving to a full war footing. Ukrainians must make gains on the battlefield, and the next six months are crucial. They need a full range of weapons—air defence, artillery, longer-range missiles, and tanks—and enough to make a real difference. The UK has shown great leadership on this issue, so may I ask my right hon. Friend to use every means at his disposal, domestic and international, to honour the courage of the people of Ukraine, and to defend the whole world order, because ultimately that is what we are talking about?

[The Prime Minister]

I have made it clear that the UK and our allies must accelerate our efforts to ensure that Ukraine wins this war and secures a lasting peace. Last year the United Kingdom provided £2.3 billion in military aid to Ukraine, the largest package of support of any European nation, and we will at least match that again this year. As my right hon. Friend knows, last week I announced that we would gift many battle tanks as part of the next major package of UK support to Ukraine, and I am pleased that our friends and allies are preparing to follow our lead.

[Dr Rupa Huq (Ealing Central and Acton) (Ind)]

Q3. Mr Speaker, London has it all: prime property, shopping, schools, and even the perfect time zone for money laundering. While there has been movement with Russian oligarchs, it is not just them, and we know that there are relatives of regimes that Members across the House condemn that are running bogus Islamic centres as fronts to stash their dirty cash, among other things. When will the National Crime Agency be adequately financed, so that we can be a world leader in anti-corruption, as we promised in 2016? Or is there a lack of political will to upset the apple cart?

[The Prime Minister]

The hon. Lady should know that we are currently in the process of legislating the Economic Crime and Corporate Transparency Bill, which puts in place many more measures to allow us to tackle some of the issues she raises. It also introduces the economic crime levy, which will provide considerably more funding to tackle economic crime in the UK.

[Jason McCartney (Colne Valley) (Con)]

Q12. The trans-Pennine rail upgrade is under way, which is good news, with stations in Slaithwaite and Marsden getting improvements. Not such good news are the dozens of daily rail service cancellations by TransPennine Express, which are causing absolute misery for my constituents who are trying to get to work, to college, or to visit family and friends. The franchise is up in May. Does the Prime Minister agree that enough is enough, and that if TransPennine Express does not get to grips with this we need to strip it of the franchise and get in somebody who will deliver reliable rail services for my constituents?

[The Prime Minister]

We have been clear that the current service is simply not acceptable. Rail North Partnership is working with the company on a service improvement plan, and my hon. Friend the Minister of State, Department for Transport, (Huw Merriman) is having weekly meetings with them. As my hon. Friend points out, the TransPennine Express contract expires in May, and while there are currently discussions about that new contract, if Ministers conclude that the operator cannot be turned around, other decisions may be made.

[Olivia Blake (Sheffield, Hallam) (Lab)]

Q5. Refugees and campaigners are gathered today outside Parliament to highlight the impact of the hostile environment—from Rwanda, to deaths in the channel and the latest scandal of missing children—on people in the migration and asylum system. Rather than cruel gimmicks such as Rwanda, is not the best way of deterring child crossings, saving lives and breaking the business model of criminal gangs the introduction of safe and legal routes to claim asylum?

[The Prime Minister]

This is about fairness. It is about fairness for those who seek to come here legally, and it is about fairness for those who are here and our ability to integrate and support those we want to. What we will do is break the cycle of criminal gangs who are causing untold misery and leading to deaths in the channel. That is why we will introduce legislation that makes it clear that if you come here illegally, we will be able to detain you and swiftly remove you to a safe third country. That is a reasonable and common-sense approach that the vast majority of the British public support.

[Sir Oliver Heald (North East Hertfordshire) (Con)]

Q13. The Prime Minister will be aware of my concern that mental health patients should not be forced into accident and emergency departments when what they really need is specialist care. Will he say more about the extra money that is being made available for urgent mental health care facilities and what impact he thinks that will have on the treatment of mental health patients and the general situation in A&E departments?

[The Prime Minister]

My right hon. and learned Friend is absolutely right. People in mental health crisis deserve compassionate care in a safe and appropriate setting. Too often, they end up in A&E when they should be receiving specialist treatment elsewhere. This week’s announcement on mental health ambulances, crisis cafés, crisis houses and mental health urgent treatment centres will ensure that patients get the vital help that they need while easing pressures on emergency departments and freeing up staff time. He is absolutely right to highlight the issue. Our announcement will make a major difference.

[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

Q6. This week, as a trustee of the Holocaust Memorial Day Trust, I was honoured to hear from Lia Lesser, a holocaust survivor who came to this country by herself at the age of eight because her parents believed tat the UK was a safe haven for vulnerable children. I also read the Government’s own statistics that say 200 unaccompanied asylum-seeking children were missing from hotels in the UK. Ministers have admitted that they have no idea about the whereabouts of those children. Does the Prime Minister think that the UK is still a safe haven for vulnerable children?

[The Prime Minister]

Over the last few years, the United Kingdom has opened up its hearts and homes to hundreds of thousands of people from Syria, Afghanistan, Ukraine and Hong Kong and provided refuge and sanctuary to many children in that process, but the reports that we have read about are concerning. Local authorities have a statutory duty to protect all children regardless of where they go missing from, and in that situation they work closely with local agencies, including the police, to establish their whereabouts. That is why it is so important that we end the use of hotels for unaccompanied asylum seekers and reduce pressure on the overall system. That is what our plans will do.

[Sir James Duddridge (Rochford and Southend East) (Con)]

Constituents in Southend and Rochford very much welcome the energy bills support scheme, which has helped 99% of households around the United Kingdom with rising fuel prices despite Putin’s barbaric war in Ukraine. Will the Prime Minister assure my constituents and the House that he is committed to continuing to help with the cost of living not only this winter but next winter?

[The Prime Minister]

My hon. Friend is right about the Government’s commitment to support all families with the cost of living: this winter, about £900 of support. Next year, as the energy price guarantee evolves, it will still be there with about £500 of support for families. That comes on top of record increases in the national living wage, worth about £1,600, and supporting our pensioners and the most vulnerable by inflating their benefits and pensions with inflation.

[Clive Efford (Eltham) (Lab)]

Q7. In 2021, the Government enabled Yevgeny Prigozhin, the former chef to Putin and founder of the Wagner Group, to dodge UK sanctions to pursue a case in London against British journalist Eliot Higgins, who had exposed his link to the Wagner Group. Prigozhin believed that silencing Higgins would get his sanctions lifted. The overriding of UK sanctions was approved by the Treasury when the Prime Minister was Chancellor. Prigozhin’s English lawyers wrote that serving notice on Higgins “will require Treasury approval”. What values did the Prime Minister apply when he allowed a Putin warlord to use our courts to try to silence a British journalist and undermine UK sanctions?

[The Prime Minister]

I am proud of our record in leading when it comes to sanctioning those people connected with the Putin regime. I think, at last count, we have sanctioned over 1,000 people and frozen tens of billions of pounds of assets. I am aware of the case the hon. Gentleman has raised, and we are looking at it. There is, as he knows, the Office of Financial Sanctions Implementation, which deals with the licensing situations in these matters, but I am happy to get back to him on the specific case that he raised.

[Nicola Richards (West Bromwich East) (Con)]

May I echo my right hon. Friend’s comments on the importance of Holocaust Memorial Day and welcome his renewed commitment today regarding the holocaust memorial and learning centre? Will he join me in encouraging Members from across the House to sign the Holocaust Educational Trust’s book of commitment, which will be in Parliament today and tomorrow, and pledge to remember the holocaust, fight antisemitism and support the important work of the Holocaust Educational Trust?

[The Prime Minister]

I thank my hon. Friend. As I said earlier, we will legislate to help build the holocaust memorial and learning centre next to Parliament to serve as a powerful reminder of the holocaust, its victims and where prejudice can lead if unchallenged. I also join her in thanking the Holocaust Educational Trust for its fantastic work and in encouraging all Members to sign the book of commitment, as I will be doing later today.

[Andy Slaughter (Hammersmith) (Lab)]

Q8. A week ago my constituent Alireza Akbari was executed by order of the regime in Iran. In the three years preceding and the days following his murder, the UK Government made little effort to protect the life or protest the death of a British national. Tomorrow Mr Akbari’s family and I meet the Foreign Office Minister, Lord Ahmad. They want to hear what help the Government can offer them at the time of their greatest suffering. Today this House wants to hear from the Prime Minister what sanction he will impose on the regime beyond the trifling steps taken so far. First and foremost, will he show some courage, follow the lead of the United States and the European Parliament and proscribe the entire revolutionary guard corps as a terrorist organisation?

[The Prime Minister]

The regime is prolonging the suffering of the family, and it is sadly typical of its disregard for basic human dignity. I spoke about my views on Iran when I was before the Liaison Committee, and Iran must now provide answers about the circumstances of Alireza Akbari’s death and burial. We have actually pressed the Iranian regime formally through their chargé d’affaires in London and the Foreign Ministry in Tehran, and we will continue to do so until the family get the answers they deserve. We have also sanctioned several people connected with the case.

[Sara Britcliffe (Hyndburn) (Con)]

I thank the Prime Minister and the Chancellor for visiting Hyndburn and Haslingden last week to hear about the transformative difference that the levelling-up funding will make. This is a historic investment, with over £40 million secured. Does he agree that we are delivering on exactly what was promised in 2019 to the areas that were most forgotten, such as Hyndburn and Haslingden? Will he visit once works are completed to see the difference himself?

[The Prime Minister]

My hon. Friend is a fantastic champion for her local community, and the results showed when the Chancellor and I were lucky enough to visit her last week. As she and many of the people we spoke to pointed out, this was an area that had been forgotten and neglected for decades, but it is this Government who are putting in the investment, spreading opportunity, making jobs and making sure that people can feel enormously proud of the place they call home.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Q10. Does the Prime Minister realise that most people in my constituency think it is his role to keep our country safe? Is he aware that in all the years I have been in Parliament, I have never heard of a situation where our Army and armed forces are so run down that the Chairman of the Defence Committee and the Secretary of State for Defence both say that our armed forces have been hollowed out and are unfit to put a division into active service? What is he going to do about that?

[The Prime Minister]

The hon. Gentleman seems to forget the fact that we have invested an extra £24 billion in our armed services. That is a record uplift in defence spending and ensures that we are one of the leading spenders on defence in NATO. We will continue to ensure we have one of the best-equipped fighting forces anywhere in the world. As we can see from the recent announcement on tanks, we continue to lead the world when it comes to standing up for not just our safety, but the safety of our allies around the world.

[Sir Mike Penning (Hemel Hempstead) (Con)]

As a former firefighter, I am sure the whole House will pray for the firefighter in Scotland who is today fighting for his life. Our emergency services go one way, into the danger, while we go the other way. Our thoughts and prayers should be with them.

Dacorum Borough Council, the Conservative-led council in my constituency, has done a fantastic job of building new houses, including social housing and council houses. Can the Prime Minister assure me that we will not be pushed into the green belt any more than we already have been and that we can protect the Chilterns in my constituency?

[The Prime Minister]

I join my right hon. Friend in praising his local council for ensuring we build homes in the right places so that our young people can fulfil the dream of home ownership. He is also right to say that this Government will always protect our precious green spaces. The recent changes in our planning reforms will ensure that we can protect the green belt everywhere. His local community and others will benefit from those protections as we keep our local areas beautiful.

[Martyn Day (Linlithgow and East Falkirk) (SNP)]

Q14. UK in a Changing Europe reports that, at the end of 2022, 60% of voters said their cost of living had increased and 38% said that their personal finances had been negatively affected by our not being a member of the European Union. The Office for Budget Responsibility forecasts a 4% reduction in GDP, only two fifths of which has already happened, so surely the Prime Minister will agree with me, the electorate and the experts that Brexit has served only to exacerbate the cost of living and economic challenges facing these islands?

[The Prime Minister]

Russia’s illegal war in Ukraine and the impact it has had on energy supplies has nothing to do with Brexit. What we are doing is ensuring that we can support families with those cost of living pressures. That is why we provided £900 of support this winter for energy bills, and that is why we are increasing the national living wage to record levels. We will continue to stand behind Britain’s families until we can bring inflation back down to where it belongs.

[Virginia Crosbie (Ynys Môn) (Con)]

I know the Prime Minister will share my concern at the news this morning that 730 people may lose their jobs at the 2 Sisters chicken factory in Llangefni, one of the largest employers on Ynys Môn. What support can the Government offer both to my constituents who are affected by this devastating news and to the wider the community at this difficult time?

[The Prime Minister]

I am very sorry to hear about the job losses my hon. Friend raises. My thoughts are with those affected and their families. I know how distressing that will be for them. I am pleased to say that the Department for Work and Pensions has procedures in place to support communities when situations like this arise. We will work very closely with her to do what we are doing everywhere across the country, which is providing good well-paid jobs for everyone, because that is the best way to build a happy and secure life.

[Carolyn Harris (Swansea East) (Lab)]

Q15. Exercise is essential for both physical and mental wellbeing, but with spiralling energy costs many venues, such as the Freedom Leisure centres in my constituency, are struggling to cope. While some sectors will receive extra support, the sport and leisure industry will not. If the Prime Minister agrees with me that the sector is vital to the long-term health of our communities, why are his Government not providing it with the financial support it needs to thrive?

[The Prime Minister]

Of course I agree with the hon. Lady that exercise and leisure centres are important. That is why we provided significant support to them during covid and beyond. With regard to energy prices now, the Chancellor set out the new relief scheme that will run after the current one expires. It provides considerable support to all sorts of organisations up and down the country. I am sure it will benefit many businesses and organisations in her constituency.

[Several hon. Members rose—]

[Mr Speaker]

Order. I understand that the case referred to by the right hon. Member for Lagan Valley (Sir Jeffrey M. Donaldson) is currently before the courts. It is therefore covered by the House’s sub judice resolution and should not be referred to in this House. It is, of course, open to any Member to ask that I waive the resolution in a particular case, but that has not happened in this case and therefore it should not be discussed at all. I will leave it at that.

[Olivia Blake]

On a point of order, Mr Speaker.

[Mr Speaker]

Does it relate to Prime Minister’s questions?

[Olivia Blake]

Yes, Mr Speaker. My apologies: I forgot to refer the House to my declaration in the Register of Members’ Financial Interests on the support that I receive from RAMP—the Refugee, Asylum and Migration Policy project—and my co-chairship of the all-party parliamentary group on migration.

[Mr Speaker]

Thank you.

Wagner Group: Sanctions Regime

Wednesday 25th January 2023 Commons Chamber

12:40

[Mr David Lammy (Tottenham) (Lab)]

(Urgent Question): To ask the Secretary of State for Foreign, Commonwealth and Development Affairs if he will make a statement on reports that the UK Government assisted Wagner Group head Yevgeny Prigozhin in circumventing the UK sanctions regime.

[The Exchequer Secretary to the Treasury (James Cartlidge)]

The war in Ukraine, as we all agree, is a barbaric, illegal incursion into a sovereign nation by another. It has resulted in tens of thousands of deaths, mass displacement and an ongoing humanitarian catastrophe.

We will always stand up for our friends and allies, and we are proud to have led the world’s response, in partnership with our allies, in supporting Ukraine in its fight against Putin’s aggression. We will deliver tanks to roll back any Russian advance, we continue providing aid to help Ukrainians as they defend their homeland, and we have unveiled the most stringent sanctions on any country at any time in our history. We want to use economic sanctions to starve Putin’s war machine and put direct pressure on every individual involved in the decision to go to war and continue to make war on Ukraine.

In response to the question that has been asked today, I should say that it is a long-standing custom that the Government do not comment publicly on individual cases. It would not be appropriate to break that custom, even in a case as serious as this one, in which there is obviously public interest. However, I want to outline the general approach taken to date by the Treasury’s Office of Financial Sanctions Implementation in cases in which persons designated under sanctions seek licences for legal fees, and how that has been followed, and the strong constitutional reasons for that.

Within the sanctions regime broadly, because everyone has a right to legal representation, it is possible for frozen assets to be used to pay for that legal representation. OFSI grants licences to allow sanctioned people to cover their own legal fees, provided that the costs are reasonable. To be absolutely clear, decisions on the issuance of licences for legal fees are largely taken by OFSI officials in line with standard practice. The principles and guidance for assessing these applications are long-standing and have been published for a number of years. Applications are assessed solely on a costs basis.

As the UK is a country with checks and balances, it is right that the relevant court, rather than the Government, should decide the outcome of a case on the substantive merits. However, I can confirm that in the light of recent cases, and related to this question, the Treasury is now considering whether this approach is the right one and whether changes can be made without the Treasury assuming unacceptable legal risk, while ensuring that we adhere to the rule of law. In advance of that, I know that the entire House shares the same goal: to support Ukraine and see all those behind the invasion punished for their complicity. The Government will continue to take a hard line on all those responsible.

[Mr Lammy]

I think the whole House will be shocked at the evasiveness that we have just seen from the Minister, given the seriousness of this case.

For years, the Labour party has been calling for the Government to clean up the London laundromat effectively and stop London homes being used as bitcoins for kleptocrats. For months, the Opposition have stood shoulder to shoulder with the Foreign Office in co-ordinating sanctions against Putin and his inner circle. But yesterday we found out that the Treasury, which was then under the leadership of the current Prime Minister, issued special licences that allowed Yevgeny Prigozhin to circumvent sanctions issued before Putin’s illegal invasion of Ukraine.

The Government appear to have granted a waiver for a warlord that enabled him to launch a legal attack on a British journalist. This is a perfect example of a SLAPP—a strategic lawsuit against public participation, designed to silence critics through financial intimidation.

Prigozhin is one of the most dangerous and notorious members of Putin’s inner circle. The Wagner Group, which he leads, is responsible for appalling atrocities in Ukraine and around the world. If the now Prime Minister’s Treasury had any hand in alleviating pressure on Prigozhin, I am sure every hon. Member would agree that that would be absolutely unconscionable. I ask the Minister to answer these questions for the benefit of the whole House. Did a Minister authorise the granting of a licence or exemption to Prigozhin? When did Ministers become aware of this incident and what actions have they taken? Will the Minister commit today to an independent investigation of this controversy? Will he commit to urgently review the law regarding SLAPP suits so that oligarchs and warmongers cannot bully and harass journalists and critics? When will the Government introduce restrictions on the provision of legal services to Russia, as the European Union already has?

[James Cartlidge]

I am grateful to the right hon. Gentleman: he takes us back to when I stood opposite him in our Ministry of Justice days.

I am not being evasive: I am standing in front of the House of Commons to answer the question. The right hon. Gentleman mentioned the Prime Minister, and he is right that my right hon. Friend was Chancellor of the Exchequer at the time. I shall explain the process. I am not going to comment on the individual case, but without prejudice to it and talking about the general situation that pertains to how OFSI considers such cases, there is a delegated framework whereby decisions on legal fees for persons designated under all the sanctions regimes are routinely taken by senior civil servants. I want to be clear on that. We are not aware of any case of legal fee decisions under any of the sanctions regimes being taken by a Minister. I want to be clear with the House on that.

The point about SLAPPs is really important. I was at the Ministry of Justice when it was a live issue. It was first raised in a Backbench Business Committee debate by my right hon. Friend the Member for Haltemprice and Howden (Mr Davis), in conjunction with the right hon. Member for Birmingham, Hodge Hill (Liam Byrne), and I responded to that debate for the Ministry of Justice. Let me set out what we are doing. We have been clear as a Government that SLAPPs represent a clear abuse of the legal system, as they rely on threatening tactics to silence free speech advocates who act in the public interest. That is why it is often called lawfare. We ran a call for evidence on strategic lawsuits against public participation and libel reform from March to May 2022 in light of reports that Russia and its allies might be funding litigation against free speech in the UK. We published our response to the call for evidence on 20 July 2022, having closely analysed 120 responses from media, legal and civil society professionals, and we are committed to tackling SLAPPs.

I can confirm that targeted anti-SLAPP reforms will include a statutory definition of SLAPPs, an early dismissal process and costs protection for SLAPPs cases. The Government have committed to primary legislation to make those reforms a reality as soon as parliamentary time allows.

[Alicia Kearns (Rutland and Melton) (Con)]

I understand that the decision was made by civil servants. Will my hon. Friend commit to considering whether we need to introduce ministerial oversight and how quickly that should be done? It is gravely concerning that no civil servant thought that this might need political oversight or some sort of political intervention. Will my hon. Friend also consider the proscription of the Wagner Group, which is a state terrorist organisation responsible for war crimes around the world?

Finally, I have been disappointed by the Government’s response to my multiple written questions about the Wagner Group and the new centre it has set up in Serbia—it is an enormous installation. We are seeing heinous activities in the Balkans, especially around the illegal Republika Srpska day that took place. So my asks are introducing ministerial oversight; looking at the Wagner group in Serbia and putting pressure on the Serbian Government; and finally proscribing that organisation.

[James Cartlidge]

My hon. Friend the Chair of the Foreign Affairs Committee speaks with great expertise on these matters. She makes some points that are for other Departments to consider, but I will ensure that they are fed back. On the point about the specific process in relation to OFSI, I will not comment on the individual case, but there is a general point about seeking clarification. I can confirm that we will undertake an internal review to see how such cases are considered in the future, and we will say more on that in due course.

[Mr Speaker]

I call the Scottish National party spokesman.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

Despite the Minister’s gymnastics on this issue, it is clear that there are still serious and systemic links between the UK Government and Russian political elites. In 2021 the operations, tactics and human rights abuses of the Wagner Group were well known, and the EU and the UK imposed sanctions on Yevgeny Prigozhin, as the Wagner Group leader, for that reason. These revelations present a serious and immoral disregard for human rights obligations and due process at the heart of the Minister’s Government, and all this took place on the current Prime Minister’s watch, as he was Chancellor at the time.

Will the Minister tell us what advice, legal or otherwise, prompted the Treasury to make Prigozhin’s activities possible? It is not beyond his capability—legal or otherwise—to tell us who made the decision to override that. What actions will his Government now take to ensure, as a result of these revelations, that the Prime Minister’s promised

“integrity, professionalism and accountability at every level”

will be followed through?

[James Cartlidge]

I think that the hon. Gentleman submitted a similarly worded urgent question this morning, and obviously I respect that point, but there are no gymnastics here; I am merely setting out the position.

The hon. Gentleman asked about legal advice and so on. Within the sanctions regime broadly, because we are a country with the rule of law and everyone has a right to legal representation, it is possible for frozen assets to be used to pay for that legal representation. This is about sanctioned individuals. The Office of Financial Sanctions Implementation grants licences to allow sanctioned people to cover their own legal fees provided that the costs are reasonable. I should make it clear that decisions on the issuance of licences for legal fees are not, and should not be, political, and are largely taken by officials in line with standard practice. As I said a few moments ago, we are not aware of a case relating to legal fees under any of the sanctions regimes in which a Minister took the decision.

[Mr David Davis (Haltemprice and Howden) (Con)]

I welcome the Minister’s assertion that there is to be a review of this approach, but I ask him to make it quick. Even the Treasury’s press release today indicates a level of misunderstanding on the part of the officials, claiming a fundamental or absolute right to legal representation. Of course you have a right to representation if you are defending yourself in court, but there is no fundamental right to use legal representation to destroy someone else and shut down free speech.

[James Cartlidge]

As my right hon. Friend knows, I responded to his Backbench Business debate. He has been incredibly consistent in calling for actions on these points, and I respect that very much. However, I do think that the right to legal representation is a fundamental tenet of our democracy, which can mean—I am not commenting on the specific case—that individuals whom we find distasteful have a right to legal representation. Let us not forget that even at the Nuremberg trials, people who had committed the most heinous crimes in the history of the western world were legally represented.

[Dame Margaret Hodge (Barking) (Lab)]

I have to say that I had never seen such a case of lack of professionalism, lack of integrity and lack of accountability as this one. It absolutely astounded me: I thought it was unbelievable.

Let me say to the Minister that in terms of the way in which such matters are decided, this is not an isolated case. Petr Aven, for instance, has been given a licence, and according to the press it is thought that he will be able to spend up to £600,000 a year on so-called household expenses which include buying and selling Bentley cars and other luxuries. That is just outrageous. By the time the sanctions stop, the resources—the sanctioned assets—will have disappeared.

Let me also say to the Minister that this issue of individual confidentiality does not play here. The Foreign Office publishes a list of the names of the individuals concerned. I therefore think that we have the right to know what went wrong in this particular case, and that the Minister should report to Parliament. I welcome the fact that a review of the OFSI regime is taking place, but that too should be reported to Parliament.

Finally, may I ask the Minister for a commitment that the legal fees general licence will not be rolled over beyond its expiration date of 27 April 2023?

[James Cartlidge]

I have previously answered an urgent question, tabled by the right hon. Lady, on a matter relating to dividends in Russia, and—again—I respect her consistency in respect of a range of points that relate to this issue in one way or another. However, as she knows, I cannot go into the details of the specific case that she has mentioned. There are all kinds of reasons for that, and I think it important that we preserve it. I may be wrong, but I suspect that it would continue under any future Government, because there is very good reason for it. That is why we talk about the sanctions regime in aggregate rather than discussing individual confidential cases.

If we take the overview, we see that this country is doing everything possible. Our position on Ukraine is that we are not directly deploying our armed forces into the theatre, so we have to use every other lever at our disposal, including sanctioning more than 1,200 individuals and 120 entities and freezing assets worth £18 billion. It is a very ambitious sanctions regime, and we should be proud of what we are doing as a country to support Ukraine. We have played a key role in helping it to withstand the Russian invasion, although of course we recognise there is more to do.

[Bob Seely (Isle of Wight) (Con)]

I am not going to talk about any individual case. I know that the Government are doing very good work on the Economic Crime and Corporate Transparency Bill and the Bill of Rights, and—certainly on this side of the House—we all support that and recognise its importance.

I want to talk specifically about the SLAPPs primary legislation and where it will be. If it is to be in the Bill of Rights—as has now been indicated to me—rather than being a separate law, that may limit the scope of what we can do about SLAPPs. It may not cover all the stuff that is needed to cover the SLAPPs and the lawyers who engage in this practice, the SLAPPers. We need separate primary legislation, a SLAPPs Bill like the ten-minute rule Bill that I introduced yesterday. A gold-standard, best-practice SLAPPs Bill has been written for me, which the Government can take on or allow me to introduce. It covers a little bit of privilege, it covers the private investigator market, and it is broad enough to cover all the abusive SLAPP practices that will not be covered in the Bill of Rights. Will the Government please consider this course of action, as the most sensible course to ensure freedom of speech and a free media ?

[James Cartlidge]

My hon. Friend speaks with huge passion about these matters. Only yesterday, as he said, he presented a ten-minute rule Bill relating to this issue. He will appreciate that there are issues relating to parliamentary time, and that this is above my pay grade. I feel very strongly that we have done as much as we can on SLAPPs, but we want to go further, because we need legislation. I said at the end of the Backbench Business debate—my hon. Friend, of course, spoke in it—that I had heard what was said, and that we would now act. The Ministry of Justice took that forward; we had the call for evidence, and we have responded to it. At present, however, our position is, I am afraid, that we will commit ourselves to primary legislation as soon as parliamentary time allows. I cannot say more than that at this moment, but I am aware of how strongly my hon. Friend feels about the issue.

[Sir Chris Bryant (Rhondda) (Lab)]

I am sorry, but this is so complacent, and the Government have been systematically complacent about the issue of sanctioning individuals for the last three years. The Foreign Office was not prepared: it did not have a proper sanctions regime in place. We are sectioning only 20% of the people who have been sanctioned by the United States of America, although I have no idea why. Then we allow people to sidestep sanctioning. What the Minister is saying today is basically endorsing what the Treasury did in relation to this particular case, which gives a green light to those people to do it again and again and again. Alisher Usmanov, for instance, is sidestepping sanctioning by a completely different process.

It is time the Government decided as a whole that we are going to do this, and we are going to do it properly. I actually think that we should listen much more to our Back Benchers, because the whole House is united around this and the Government are too complacent.

[James Cartlidge]

The hon. Gentleman is wrong to say that I am endorsing any particular action. I have made it very clear that I am not commenting on a specific case. What I have said relates to the general regime that pertains, and is without prejudice in respect of any specific case. The hon. Gentleman also said that we were not prepared. He may not be aware of Operation Orbital, but we have been training Ukrainian soldiers since 2015: 22,000 Ukrainian soldiers.

[Sir Chris Bryant]

We are talking about sanctions.

[James Cartlidge]

Well, I am talking about Ukraine, because I think that that is the key issue here. It shows we were preparing for what happened, although, obviously, the situation was unprecedented when Ukraine was invaded. We are clear about the fact that our officials and Departments worked as fast as possible to bring forward an ambitious range of sanctions—which of course happened in March last year when the Prime Minister was Chancellor—and they are having a significant impact on Russia and its economy.

[Harriett Baldwin (West Worcestershire) (Con)]

Although we cannot discuss a specific case, “Wagner Group” is written on the Annunciator and I wanted to add a further question about the regime that we are operating within the Treasury. I urge the Minister to go further than he committed to doing in response to my hon. Friend the Member for Rutland and Melton (Alicia Kearns), the Chair of the Foreign Affairs Committee, because the Wagner Group is clearly such an evil organisation and what it is doing in Ukraine and across north Africa is so evil. Will the Minister today, from the Dispatch Box, ask OFSI officials to have a red flag system whereby anything related to the Wagner Group is flagged up individually to the Minister responsible?

[James Cartlidge]

My hon. Friend speaks with the expertise of her position as Chair of the Treasury Committee, and I hear what she is saying. I have said that the internal review will take place. She is more than welcome to write to me in her capacity as Chair about that, and I will reply in due course.

My hon. Friend makes the point that this question is about the Wagner Group but that we are saying that we are not commenting on the cases of specific individuals. As a Government, we are absolutely clear:

“The Wagner Group is a Russia-based private military company”.

It has organised the recruitment, co-ordination and planned operations of mercenaries participating in military operations in Ukraine. It is responsible for engaging in and providing support for actions that destabilise Ukraine and undermine or threaten the territorial integrity, sovereignty or independence of Ukraine.

That is why the most important question is: what are we doing to support Ukraine? Opposition Members have mentioned the Prime Minister, so let us talk about what he did as Chancellor. He was the one who put in place £2.3 billion of military support for Ukraine, which helped the Ukrainians to defend themselves against Russia so that the fight is still being fought to this day.

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

This is outrageous. The Minister has just confessed to the House that sanctions implementation is out of ministerial control. The result is that a waiver was issued for a warlord to sue an English journalist in an English court.

Let us just be clear about the sanctions indictment that this Government issued on 31 December 2020. We sanctioned Prigozhin because he was operating

“a deniable military capability for the Russian State.”

Ten months later, civil servants under the Minister’s control signed off £3,500 for business-class flights, £320 for luxury accommodation at the Belmond Grand Hotel Europe, £150 for subsistence and more. Let us be clear about what the leaked emails from that conversation show. They show that Prigozhin’s lawyers wanted to sue Eliot Higgins and Bellingcat because

“public rebuttal of the article…is one of the reasons for his sanction designation”.

The Minister signed off money for a warlord to prosecute an English journalist in an English court, to undermine the sanctions regime that he is responsible for. This is outrageous and it has to change now.

[James Cartlidge]

The right hon. Gentleman knows perfectly well that I did not, in any way, confess that Ministers have no control over the sanctions regime. What I stated very clearly is that in respect of OFSI consideration of legal fees under the sanctions regimes, these decisions are routinely taken by senior civil servants under a delegated framework. That is simply a statement of fact. On the claims for travel and other expenses, let us be clear: under the legal expenses derogation, OFSI is only permitted to issue a licence where the costs, including those relating to disbursements, have been deemed to be reasonable. OFSI therefore scrutinises the hourly fees charged by fee earners, the hours incurred and any other associated costs. It is the responsibility of the applicant to demonstrate to OFSI’s satisfaction that this statutory reasonableness test is met. If it is not satisfied, OFSI will not be able to issue a licence.

[Sir John Whittingdale (Maldon) (Con)]

Does my hon. Friend agree that this is just the latest example of a dodgy Russian oligarch or similar using legal action to attempt to shut down legitimate journalism? I strongly welcome what he has said about the Government’s intention to act against SLAPPs, but will he commit to publishing the detail of that legislation as soon as possible? Will he look for a means by which it can be introduced, as my hon. Friend the Member for Isle of Wight (Bob Seely) said, as a stand-alone Bill, which would be preferable? If that is not possible, will he look to use other vehicles, possibly relating to human rights? The media Bill might well provide a vehicle for acting to protect journalism. We need this legislation as fast as possible.

[James Cartlidge]

I absolutely hear what my right hon. Friend is saying. He is another colleague who has spoken consistently on these points. He knows that when I was at the Ministry of Justice we acted quickly to bring forward measures on SLAPPs; first, we had the call for evidence and then we gave our response. He will appreciate that the parliamentary timetable is above my pay grade, but I hear what he says and I will ensure that, in considering the passage of that legislation, the appropriate stakeholders will respond to him. In the meantime, I want to be clear that SLAPPs are something on which we want to see progress.

[Layla Moran (Oxford West and Abingdon) (LD)]

Let us remind ourselves who we are talking about here: the head of the Wagner Group, which is responsible for egregious human rights abuses not just in Ukraine, but in Mali, Sudan and Syria. Absolutely it should be proscribed, and quickly; today is President Zelensky’s birthday and what better gift could we give him? This review is going to take time, so will the Minister assure the House that in the interim a Minister will look at every case until the regime is cleared up? Will the results of this review come to this House so that parliamentarians can scrutinise it? Clearly, the Treasury and the Ministers have not been getting this right, have they?

[James Cartlidge]

I say to the hon. Lady that she has many ways at her disposal to scrutinise the Government: as she knows, we have Treasury questions coming up; there are Foreign, Commonwealth and Development Office questions; we have recently held debates on Russia, including the one on Russia’s strategy; and a number of statutory instruments have been passed in relation to the sanctions regime. I am sure there will be many other opportunities to scrutinise the Government. As I say, we have only recently taken the decision to hold this internal review, but I will say more on it in due course.

[Mr Philip Hollobone (Kettering) (Con)]

I am sure that all my constituents would regard the Wagner Group as an evil organisation, and its activities in Ukraine, the middle east and Africa are abhorrent. I am sure that my constituents would also support its proscription. In the meantime, will the Minister tell my constituents how many Russian individuals and entities have been sanctioned, what is the value of those sanctions, and what is the value of the economic sanctions that have been imposed against Russia?

[James Cartlidge]

I totally agree with my hon. Friend, as we all do, about the nature of the Wagner Group. That is not the point. We do have to have due process, because of the right to legal representation. I believe that, to date, we have sanctioned about 1,200 individuals and 120 entities, and the latest figures show that more than £18 billion of Russian assets have been frozen by our sanctions and that three quarters of foreign companies have reduced operations in Russia. Of course we have no quarrel with the Russian people, although this will have an economic impact. As I said, we are not taking a direct military posture in Ukraine, but we are doing everything else we can, which is why we have to use every tool at our disposal, including a strong economic sanctions package.

[Holly Lynch (Halifax) (Lab)]

The Minister has said that it is officials who would routinely take these types of decision, but I hope he will agree that we cannot ever allow it to become routine for us to allow some of the very worst sanctioned individuals to weaponise British laws to go after British journalists. He said that we are going to have a review

“in the light of recent cases”.

Will he confirm whether he is looking into others?

[James Cartlidge]

Although I cannot comment on individual cases, I absolutely agree with the hon. Lady that we should be looking at lawfare. We will be bringing forward that legislation. I do think we have acted quickly on that, but of course it is a complex area of law that we need to get right. She reinforces the point that many colleagues in all parts of the House want to see that legislation come forward, and I have very much noted it.

[Rehman Chishti (Gillingham and Rainham) (Con)]

As a former Minister for sanctions, I agree with the Minister that the UK had led the world in taking a firm, decisive, co-ordinated sanctions approach with our international partners to bring individuals to account for what is going on in Ukraine. This case highlights an issue relating to the granting of licences for legal fees, so how many such cases are there overall? We have sanctioned more than 1,000 individuals, but how many legal licences has the UK granted overall? We co-ordinate our sanctions approach with the United States and the European Union, so how many licences have they given? In this case, was there any co-ordination input from our counterparts in the US? I agree with the Chair of the Foreign Affairs Committee that things should be referred back to the Minister for decision, rather than having it delegated to an official. What exact date are we looking at for the review?

[James Cartlidge]

My hon. Friend has expertise as a former sanctions Minister. Obviously, I cannot speak for the United States Government but only for ours. I do not have the exact figures, but I will look into it and write to him. To be absolutely clear, I stated a fact when I said that decisions specifically on legal fees under the sanctions regimes are routinely taken by senior civil servants. I said that I was not aware of any case where the Minister had taken a decision. But under our constitution, I am standing here because, ultimately, Ministers are responsible for Department and Government policy. Nevertheless, it is entirely right to make a point about how these things work operationally. As I said, that is correct. It is a delegated framework for decision making.

[Martin Docherty-Hughes (West Dunbartonshire) (SNP)]

It seems that the Wagner Group is yet another example of the litany of disaster that sustains what seems to be Londongrad. On the back of this appalling situation, can the Minister update the House on when the British Government will not only introduce legislation on limited partnerships but bring about the review that he talks about?

[James Cartlidge]

The hon. Gentleman talks about Londongrad; he knows that we are taking extensive measures on economic crime. Let me say to the Members of the Scottish National party who come every time and lecture us on the sanctions regime and so on that the greatest gift we could give to Putin would be for this country to engage in unilateral nuclear disarmament. It is the most extraordinary position to be lectured by the SNP on standing up to Russia, because if we took its advice and adopted its policy, we would undermine NATO and all our efforts to defend ourselves.

[Sir James Duddridge (Rochford and Southend East) (Con)]

Unfortunately, the Government’s response to the Wagner Group has been inadequate, in part because the matter falls between the FCDO and the Treasury. A number of colleagues, including the Chair of the Foreign Affairs Committee, my hon. Friend the Member for Rutland and Melton (Alicia Kearns), have called for that organisation to be proscribed. Others, including me, have done so for different reasons, whether it be Serbia, Africa or another conflict area. Will the Minister bring together the two Departments, and look at proscribing the organisation and at the impact that will have on the efficiency of the sanctions regime?

[James Cartlidge]

My hon. Friend has considerable experience as a Foreign Office Minister. He will be aware of how these things work. I am happy to give that reply. I believe that the decision would be for the Foreign Office, but he is right that we must work across Government, and I will write to him on that point.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

As well as the Wagner Group’s murderous activities in Ukraine, I am aware, as chair of the all-party parliamentary group for Africa, of its activities across that continent. It has mercenaries in Mali, the Central African Republic, the Republic of Mozambique and Libya. It is targeting civilians, actively spreading disinformation and propping up autocratic regimes, all to defend Putin’s footprint and ambitions in the continent. Is the Minister saying that it is acceptable for someone to make money from those evil activities, be sanctioned and then get a licence from the British Government to evade those sanctions in order to defend themselves legally? Regardless of what he is saying, what message does that send to our allies across the world?

[James Cartlidge]

Of course we are not saying that. We are saying that, whether we like it or not, there is a principle under democracy and the rule of law of the right to a defence. Therefore, we have a system in place under the sanctions regime to consider applications for legal fees to be paid from frozen assets. That is a statement of fact on how the system works.

[Anna McMorrin (Cardiff North) (Lab)]

We are continuing to sidestep sanctions. It is disgraceful that the Minister continues to defend that at the Dispatch Box. What message does it send to Ukraine and our allies that our own Treasury is helping one of Putin’s notorious warmongers evade sanctions? If he cannot tell us the number of exemptions and waivers that have been given to individuals, can he find out and commit to come to this House and publish those numbers?

[James Cartlidge]

The message to Ukraine is that this is a country that believes in the rule of law and democracy. That is why we support Ukraine. That is why the Prime Minister was in Ukraine recently, confirming that we will do everything possible to support them. That is why this country has made a greater contribution to support the brave people of Ukraine than any other country, bar the United States.

[Alison Thewliss (Glasgow Central) (SNP)]

I do not know if the Minister has had the chance to read Oliver Bullough’s book “Butler to the World”. There is a copy in the Library if he has not. I recommend it to him because it lays clear Britain’s role in facilitating this kind of lawfare. Oliver Bullough has asked:

“What chance have British journalists got when even our own government is prepared to roll the pitch for oligarchs keen to sue us?”

[James Cartlidge]

I repeat my earlier point about the actions we are taking on SLAPPs. We have already had the call for evidence and we will bring forward primary legislation.

[Andy Slaughter (Hammersmith) (Lab)]

Are the Government serious about tackling the use of SLAPPs? Threats of libel action by the Conservative party chairman over his tax affairs, use of the non-disclosure agreement by the Justice Secretary to silence journalists, and the Home Secretary’s attempt to stop the BBC reporting serious domestic violence by an agent of the security services when she was Attorney General, suggest that they prefer concealment over transparency.

[James Cartlidge]

Yes.

[Clive Efford (Eltham) (Lab)]

The approach the Government are taking, case by case they will not deal with specifics, is just an excuse not to answer questions on specific examples that we raise in this House. I know that the bar is very high, but there can be few of Putin’s allies more notorious than Yevgeny Prigozhin. How can the Minister come to the Dispatch Box and say that the decisions were made by a civil servant? How can there be no red flag on the file of someone of such notoriety to say, “Speak to a Minister”? When are you going to get on and do the job you were put there for?

[James Cartlidge]

The reason that we do not comment on individual cases is well-established. I expect that it would be exactly the same under any other Government. To be clear, the UK sanctions regulations do not exclude payments for any particular legal services from that permission. Excluding such payments can give rise to issues about access to justice. OFSI does not consider it appropriate for HM Treasury to effectively decide whether a case has sufficient merit to be permitted to proceed by deciding whether to issue a licence permitting legal fees to be paid. Such an approach would raise considerable legal concerns.

[Wayne David (Caerphilly) (Lab)]

The Minister has been asked on a number of occasions how many exceptions and waivers there have been over the last two years. The House is united. This is not a party political issue. We just demand that he answer that question. If he cannot do it now, can he provide the House with details in writing?

[James Cartlidge]

I said to the former sanctions Minister, my hon. Friend the Member for Gillingham and Rainham (Rehman Chishti), that I would write to him. I will be happy to share that with other colleagues who have asked what information we are able to publish. I will look into that and write to colleagues who have raised that point.

[Dave Doogan (Angus) (SNP)]

It is very difficult to believe that a regime exists now where civil servants can make this decision, especially in the case of Yevgeny Prigozhin. Anyone with a passing relationship with a newspaper would have realised that enabling that to happen would compromise their Ministers, yet they did not have such discussions. Can the Minister assure us that he will review that? I do not want to hang a civil servant out to dry, but somebody needs to take responsibility for the decision. Does he find it a coincidence that, when one of the worst commercial war criminals went to find access to justice, he turned up in London?

[James Cartlidge]

I have merely stated the fact, and it is the case, that these decisions are routinely taken by senior civil servants. I also said that we are ultimately responsible. We, as Ministers, are accountable to Parliament. That is why we will conduct the internal review.

[Owen Thompson (Midlothian) (SNP)]

I would be grateful if the Minister could outline to us what it is about billionaire Russians such as Yevgeny Prigozhin and others that make this Government feel that they need special licences so much that they are able to dodge sanctions.

[James Cartlidge]

To be clear, we do not make any of these decisions with prejudice to the legal case that the individual is pursuing. They have a right under our law to have legal representation. What we have here is a process for considering applications to use frozen assets to fund legal fees in specific cases.

[Jim Shannon (Strangford) (DUP)]

I recognise that the Minister has responded and tried to address the questions. We recognise that the Government have at least made some efforts to do so. But in this urgent question the House has identified an anomaly concerning the Wagner Group, which, as everyone has said, is responsible for some of the most brutal crimes across the middle east and Africa. The House wants urgency—that is what we are all asking for. Can the Minister indicate the timescale for that to happen? When will the Wagner Group find that the loophole that it has identified can be closed?

[James Cartlidge]

This is not a loophole in relation to the Wagner Group. We are clear on all the issues about the Wagner Group. We have acted against it in so much as it is part of the military effort in Ukraine and we have supported Ukraine as far as we are able to, in supporting that military effort. What we are talking about here is a specific point, which is that there is a right to legal representation, so we have a process in place under the sanctions regime to consider applications to use frozen assets to fund legal fees, but as I have said, we will be reflecting on that and reviewing that process.

[Mr Speaker]

That completes that urgent question. Those who need to leave, please do so before I start the next one.

Energy Bills: Self-disconnection

Wednesday 25th January 2023 Commons Chamber

13:19

[Kenny MacAskill (East Lothian) (Alba)]

(Urgent Question): To ask the Secretary of State to make a statement on the levels of self-disconnection from power sources and on Government support for energy bills.

[The Minister for Energy and Climate (Graham Stuart)]

As I set out to the House on Monday, the Government recognise the importance of protecting customers, including those on prepayment meters. This weekend, the Secretary of State set out a five-point plan on prepayment meters. He wrote to energy suppliers, calling on them to take every step to support consumers in difficulty, particularly those who are at risk of self-disconnection. The Government want to see a much greater effort from suppliers to help consumers in payment difficulties, including offers of additional credit, debt forgiveness or debt advice. As the hon. Member for East Lothian (Kenny MacAskill) will be aware, Ofgem, as the independent regulator, is in a position to direct suppliers in a way that the Government are not.

The Government understand that this is a difficult time for many families. That is why we have put in place unprecedented cost of living support. It is easy to take that for granted, but it is extensive. It includes the £400 discount under the energy bills support scheme, which has been appearing on electricity bills since the October bills arrived this winter, as well as the energy price guarantee, which does not need any form of application process and directly subsidises energy bills for the typical family this winter to the tune of an additional £900, with equivalent support in Northern Ireland. The Government are also committed to supporting those households without a relationship to a domestic energy supplier with a £400 discount under the energy bills support scheme alternative funding, with eligible households able to apply from 27 February.

It is critical that this support reaches consumers, which is why the Government have also urged suppliers to take action on increasing the number of vouchers being redeemed under the Government’s energy bills support scheme and why we have published a list of supplier redemption rates. We want to encourage suppliers to compare themselves with their rivals and look to do as well as the best, showing which ones are meeting their responsibilities and which need to do more.

There are also established industry rules and processes to reduce the risk of self-disconnection. Suppliers are required to have conversations with customers in arrears to set up a suitable debt repayment plan, taking account of their ability to pay. It is vital that these rules are followed. The Secretary of State wrote to Ofgem to ensure that it takes a robust approach to compliance. In response, Ofgem is reviewing supplier practice, and a key area of its review is the suppliers’ approach to self-disconnection.

But this is continuing work. This afternoon I will be meeting energy suppliers, Ofgem, Energy UK and Citizens Advice to ensure that they hear from the Government, the hon. Gentleman and all hon. Members that there is a strong urge in this House to do everything we can to protect everyone this winter, and most of all, the most vulnerable.

[Kenny MacAskill]

A parliamentary answer on Tuesday disclosed that around 66,000 households in Scotland and 660,000 across Britain had self-disconnected from smart meters in the third quarter of last year. Self-disconnection is a euphemism for simply being unable to afford to heat or power your home. It is as pernicious as the term “collateral damage” is in war. Those afflicted by self-disconnection and all its misery are also civilians, but we are at peace, not war. These figures are for a quarter before prices rose and temperatures dropped. They are also only the tip of the iceberg. The numbers are far greater, as these figures do not cover those on legacy prepayment meters, the numbers of which are substantial, with almost 2 million in the UK and 300,000 in Scotland. They apply to those that operated before smart meters were brought in and they will substantially increase the numbers so tragically afflicted.

In an energy-rich country, fuel poverty is an obscenity. Given this heartless cruelty in a cold winter, will the Minister, first, end the forced installation of prepayment meters forthwith? Secondly, will he immediately abolish the perverse higher standing charges and tariffs for prepayment meters? Thirdly, will he as a matter of urgency bring in a social tariff for the poorest and most vulnerable?

[Graham Stuart]

I thank the hon. Gentleman for his questions. He rightly raises the issue of those who are self-disconnecting. I think we can be proud of the fact that the numbers of people who were physically disconnected from power and heat last year were in single figures. The installation of prepayment meters has to be an absolute last resort. We must insist that people do not end up being physically disconnected from an energy supply. It is important to highlight that all suppliers are required to offer emergency credit when the meter runs out. This should give consumers enough time to top up their meters. Traditional meters have an automatic setting that allows for a set amount of emergency credit to be used after the customer is notified that the topped-up credit has been used.

As I have said, we are committed to having the right regime in place. In 2009, there were issues around the additional costs of prepayment meters. Ofgem had responsibility for supervising that at that time, as it does now, and it looked into the issues and brought in a regime to ensure that any costs and charges were commensurate with the actual costs of delivery. To a certain extent that has all been superseded by the energy price cap brought in by this Government, which limits the amount that anyone can charge for their energy.

[Sir James Duddridge (Rochford and Southend East) (Con)]

It is excellent to have such a high-calibre Minister in such a crucial role. At Prime Minister’s questions I raised the issue of the energy bills support scheme, which has helped 99% of my constituents. I am interested in the report that identifies the worst and best performers on prepayment vouchers. The Minister said that he was going to meet some of those people today. Will he name and shame—and praise—people on that list and try to get those right at the bottom at least up to the median level, if not into the top quartile?

[Graham Stuart]

I thank my hon. Friend for his kind words. We are absolutely focused on that, and we all have a role to play in increasing awareness of the vouchers, which are so valuable to people. We want to see more being redeemed, and the numbers are going up consistently. We have published the list of suppliers and we have already brought them together so that they can share best practice. I wanted to publish the list so that it could be seen not only by the House but by the suppliers’ chief executive officers, who I hope will talk to their teams about why they are lower down the list. If all of them, all of us in this House and everyone in the voluntary and other sectors and in local authorities do everything possible to raise awareness, we can lift the number of people who get that help, to which they are entitled.

[Mr Deputy Speaker (Sir Roger Gale)]

I call the Opposition Front-Bench spokesperson.

[Dr Alan Whitehead (Southampton, Test) (Lab)]

One way or another, there are more than 3 million households on prepayment meters. With the rapid rise in prices and the continuing energy crisis, they are now all at risk of unseen disconnection, because they simply cannot afford the huge bills and constant meter top-ups they are facing. Energy companies know this, and they do not want to be saddled with account customers in distress, so we have seen 500,000 warrants obtained, particularly over the last year—18% up on previous numbers—to drive customers in trouble with their accounts into forcibly having prepayment meters installed in their homes, whether they want them or not. Customer disconnection is then not the problem for the energy company or the Government thereafter. For most customers, the energy companies can simply change the supply of smart meters from credit to prepay without a warrant being issued.

What are the Government doing about all this? Polite letters are not enough. Will the Minister now enforce measures to ensure that the energy companies stop issuing warrants and switching smart meters to prepay mode while prices remain high and the energy crisis continues? What are the Government actively doing to seek out and help those who have self-disconnected and are now energy destitute?

The Government have said, and will no doubt say again today, that help is on its way in the form of Government support for energy bills, yet precisely the customers most likely to self-disconnect are getting much less help than they should. As the Minister has said, 30% of the vouchers available to customers on prepayment meters remain unclaimed, for a variety of reasons. And the alternative help scheme devised for those who indirectly pay their bill, whether they live in park homes, communal buildings or district heating schemes, has simply not arrived. It was expected in December and then January, but we now hear it will not be active until the end of February—five months after account customers started to get assistance.

What are the Government doing to ensure that vouchers get through and are claimed by prepay customers, and that barriers to claiming are overcome? Why is the alternative help scheme so consistently delayed? Do the Government just not care about help for those living in park homes and other tenures, or are they incompetent in organising that help in a timely way?

[Graham Stuart]

Those who know the hon. Gentleman will know he is normally better than that. He knows, because we talk about it, just how hard the Department is working to make sure we get these things in place. We are proud that we got the EBSS discount out to an unprecedented 29 million people. I make no apology for prioritising getting the bulk of it out there.

The EBSS alternative funding sounds simple, but it is not. It is a novel scheme with ambitious timescales. It is a complex cohort with a range of different energy arrangements, including off grid, direct to commercial and via intermediaries. [Interruption.] The hon. Member for Newcastle upon Tyne Central (Chi Onwurah) chunters from the Front Bench, but she should recognise the complexity of this challenge.

When we were looking at February delivery for the portal, I challenged it. A few days ago, I met the four pilot local authorities, which are across the devolved nations of Great Britain, to talk about the situation. We must make sure that we sort out all those complexities because, if we do not get it right first time, the pilot authorities say it would delay payments to consumers. My priority is to get funding to people as quickly as possible.

Where people are not already receiving the main EBSS, we have to look after public money by making sure their bank accounts are verified and legitimate, and that they live at the address. Those records are held across Government, local authorities and banks, so a complex case-management system is required. Local authorities need to be able to access the system securely, which requires multi-factor authentication, and some local authorities do not have the ability to implement that quickly. Robust fraud checks are necessary in an application-based system, to which there is no alternative for this group. Each iteration of the application process needs to be tested.

I am confident that we will have the portal up by or on Monday 27 February. We will work with local authorities, upon which we rely, and I thank the four pilot authorities and other local authorities. We need to make sure that their staff are trained, that the complexities are dealt with and that they have a robust system, so that they can swiftly process applications and make sure families get the money they so direly need. I fully accept the point about the need for speed.

[Selaine Saxby (North Devon) (Con)]

This Government have given huge energy bill support to businesses and households this winter. Although I fully understand the complexity of the situation for park homes, what reassurance can my right hon. Friend give to the multiple residents who have contacted me, from Mill on the Mole near South Molton and from Berrynarbor Park near Ilfracombe, that everything possible is being done to get energy payments to them as rapidly as possible? MPs know where their park homes are. If there is anything I can do to deliver this support locally, I would be more than happy to assist.

[Graham Stuart]

My hon. Friend is right that identifying the location of park homes might sound relatively simple, and I hope I have made it clear that there are levels of complexity that have to be dealt with. We are doing everything possible to ensure this is done as quickly as possible. Because of council tax bills, this is the busiest time of year for the local authority staff who deal with this. We must have a system that stands up, is robust and delivers on time.

As might be expected, I pushed back in every way possible to see if we could open the portal in January, but we could not do so without risking the confidence and support of those local authorities. We will make sure that we have it in place and that we deliver it in the right way.

For months, my hon. Friend has rightly made sure that my focus has remained on this issue by reminding me of her constituents and their need for this help.

[Mr Deputy Speaker (Sir Roger Gale)]

I call the SNP spokesperson.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Come April, 8.4 million households will be in fuel poverty—that is almost a third of all households—and talk of capping average bills at £2,500 or £3,000 a year means nothing to people who cannot afford to pay their bill or top up their meter. People on prepayment meters are penalised with higher standing charges, so those who either choose or are forced into not using energy build up debt from these standing charges. Imagine getting into debt despite not using energy.

These people are more likely to have disabilities or suffer ill health. They are more likely to die prematurely and to have mental health issues due to the struggles of daily life. I do not know what their life is like, and I know for a fact that the Government cannot claim to understand what their life is like. We now need a proper social tariff and a further energy bill support package as a priority.

Much more needs to be done to ensure the vouchers are redeemed, rather than the Government just asking the companies to publish data and urging them to do more. The Government need to put in place a temporary ban on the forced installation of prepayment meters. Is it not a disgrace that energy-rich Scotland’s Union dividend is people who are unable to turn on their gas when Scotland is a net exporter of gas?

[Graham Stuart]

The hon. Gentleman said this support has absolutely no meaning, or something close to it. The meaning for those on benefits has been £800 of additional cost of living support, on top of the £400 EBSS support and the £900 of support organised through the Treasury. This is real support. The cheap rhetoric we have heard from the Scottish nationalists might be typical, but even so it is disappointing.

The hon. Gentleman says we need to do more than just urging suppliers to do more and to publish data. There is an application. People have to take up their vouchers, and they have to use them. I am all ears to any contribution he would like to make on how to build that up, because the whole of society—families, community groups, MPs and political parties—has to get the message out to people about these vouchers. I am confident that they are being sent out by the suppliers, so we have to encourage people to cash them in at a time when they need them most. There is always a danger that the people who need it most—we do not have the data—may be the ones least likely to use it. [Interruption.]

The hon. Member for Kilmarnock and Loudoun (Alan Brown) can make cheap points and shout at me from a sedentary position, or he can engage seriously and properly by trying to do everything possible to get a system that makes sure people get the help they deserve. That is what I want. If he thinks there are any practical steps that we should be delivering immediately, he should say so.

We have said that we will look at a social tariff and at how vulnerable people are looked after, but we have to look at it in a considered manner. I am proud of the support that the Government have put in place, and I believe it stands up internationally. We are determined to support people, particularly the most vulnerable, so that they do not suffer at a time of extreme energy stress.

[Mr Philip Hollobone (Kettering) (Con)]

Across the country and in the Kettering constituency, everyone should be benefiting from the energy price guarantee, which saves the average household £900 this winter on their bills. Everyone should be getting the £400 energy bills support scheme in £66 or £67 monthly payments. Those in bands A to D households should receive £150 council tax rebate. What extra are the Government doing for the 8 million lowest income households, most of whom are on universal credit, pensioners and disabled people who are most likely to have need for prepayment meters?

[Graham Stuart]

As my hon. Friend will be aware, there is a series of programmes to support people in those positions, and £800 for all people on benefits in addition to the sums that he has already itemised for the House.

[Jon Trickett (Hemsworth) (Lab)]

The Minister prays in aid the money that is being given to households across the country, and I acknowledge that that is a significant amount of money, but it is not working, is it? One prepayment meter is issued every 10 seconds. Millions of people live in fuel poverty. My constituent, for example, is disabled and trapped in his house. He had a prepayment meter imposed on him, but no voucher. He was left in freezing cold conditions in the run-up to Christmas. That just is not acceptable. I am afraid to say that polite letters from the Secretary of State or cups of tea this afternoon with the Minister will not hack it. Does he agree that it is time that the Government took legal powers to intervene directly in the energy market in order to protect the people of this country?

[Graham Stuart]

That kind of crude socialist intervention in the market would be counterproductive, and it would be typical of measures that come from the Labour party. Its members go in with high talk of helping the weakest and poorest and they come up with policies that have exactly the opposite effect.

[Sara Britcliffe (Hyndburn) (Con)]

I wish to follow on from some of the questions regarding the £400 payment for park homes. Although I understand the complexities of the issue, will the Minister set out how, once this scheme goes live, he will communicate with the residents of park homes so that they do access the portal? Furthermore, will there be an alternative way to access the application process rather than just through an online portal?

[Graham Stuart]

I thank my hon. Friend for her extremely pertinent question. We will be promoting through a whole array of groups and, of course, local authorities are key partners in that. We will be looking for support from colleagues across the House, from local authorities, and from the voluntary sector. We have also been doing a larger-scale public communications exercise than the Department has ever previously engaged with. In answer to her final question: for those who are not easily able to access the Government portal, there will be a telephone support service as well. Again, this will be an application-based system. We will not get to 100%, but I hope that we can work constructively. All ideas are welcome so that we do everything we can to maximise the take-up and make sure that people get the support to which they are entitled.

[Munira Wilson (Twickenham) (LD)]

My constituents living in houseboats and on heat networks have been left out in the cold for months without support or information. This is despite repeated assurances from the Minister about the vital £400 from the energy bills support scheme alternative funding. Applications for that were promised to be opened by the end of January, yet, yesterday, in a private briefing for Members, the Minister revealed that the earliest that the applications would be open is the end of February, with money not coming through until the end of March. Yesterday, he also replied to a written question in writing to a Member of this House that the scheme was still going to open in January. Does the Minister accept that his answers to Members of this House have been misleading and that he has broken promises to off-grid customers? What on earth is he doing to ensure that my constituents and people up and down this country get the support they need in the freezing cold right now?

[Graham Stuart]

I thank the hon. Lady for her question. I think she will find that the letter stated that the Government had announced that the scheme would open in January, which was true—we did announce that we aimed to open it in January. The pilot and engagement with local authorities has shown that we need to delay that to February, so I organised briefings yesterday afternoon to make sure that all Members of the House had heard about that. I am also seeking to notify the House as quickly as possible by writing to Select Committee Chairmen and others to let them know. We are doing everything possible to make sure that we have a robust system in place. I set out that this is a novel system: it is complex and it does rely on local authorities. It was after personally meeting representatives of those pilot local authorities that I came to the decision. I felt that this was the right thing to do to ensure speedy delivery of this support to her houseboat owners among others. It is also worth noting that they have seen support if they come through a commercial supplier of electricity through the energy bill relief scheme, but I want to see them get their £400 as well, and I want a system that works, is effective and is as quick as possible.

[Hilary Benn (Leeds Central) (Lab)]

The Minister appeared to say in answer to an earlier question that no one should be physically disconnected from their energy supply. If I heard that correctly, and if that is indeed the Government’s position, does that extend to people on prepayment meters who cannot connect themselves to their energy supply because they simply do not have the money to top up the meter? If that is the case, I would be interested to hear what further action he will take to prevent that happening in all cases.

[Graham Stuart]

The point about a physical disconnection—I think that there may have been only one in the UK last year—is that it differs from what happens with a prepayment meter. By having a prepayment meter, no matter what pre-existing debts someone may have, as soon as they have money to put credit on, they can recommence their energy supply. Physical disconnection is when a person is literally cut off and then has to re-apply to get their supply back. That is an alternative that I do not want to see. The prepayment system is an absolute last resort for those who run up large energy bills, do not engage with the supplier and show no sign that they will pay. Those people must be able to do something and the installation of a prepayment meter, if absolutely necessary, as a last resort and under warrant if they will not engage in any other way, means that household still has access to energy, so long as they put some credit on. That is a lot better than bailiffs and a total physical cut-off. We can be proud of the fact that we do not have people cut off from their energy supply, although, admittedly, as the right hon. Member says, they have to put money on the meter in order to be able to access it.

[Alison Thewliss (Glasgow Central) (SNP)]

I have had many emails from people who live in Dalmarnock and are served by a communal heating system operated by Switch2, which is not currently under Government regulation. These residents have received a letter informing them that the price per kilowatt hour is going from 11p to 32p, with additional standing charges. Will the Minister tell me what support these people can expect from the Government? At the moment, with the lack of legislation and the lack of eligibility for other schemes, they are left with heating that they cannot afford.

[Graham Stuart]

I thank the hon. Lady for her question. If she will follow that up with some details, I will happily write to her and come back on the specific points she has raised.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

I genuinely appreciated the Minister coming to meet us yesterday to discuss these issues, but he will have seen the shock and disbelief in the room when he made his announcement, not least as he wrote to me just last week to say that the scheme would open in January, and I have been asking him about this since October on behalf of constituents in Sully who are affected. Nearly 1 million people across the country have had no form of support, in lots of different types of building, as he well knows. Can he be absolutely clear: when that portal opens on 27 February, how long will it take for those people to get the payment? Are we talking about a month, two months, or will they have to wait until the summer? What advice can he give them in the interim? Should they allow debt to build up? Should they turn off their heating? What should they actually do, and what should the management companies do, particularly in communal buildings, which potentially owe significant amounts, with residents having not paid their Bills? What is his advice to them?

[Graham Stuart]

The decision was made yesterday and I was able to brief colleagues, including the hon. Gentleman—I thank him for attending the meeting—yesterday afternoon, so I have tried to move as quickly as possible. Of course, until a decision is made, Government policy stays as it is until it is changed, and that explains the letter. I certainly hope that the hon. Member for Twickenham (Munira Wilson) would accept that I was not being disingenuous. We moved to communicate as quickly as possible once the decision had been made.

The payment will go through local authorities. Much as I would love to give a define date, it depends when people apply. We will be encouraging people to apply from 27 February—if that is when the scheme launches—and then local authorities will be carrying out their verification. We will triage that first, to minimise the imposition on local authorities, but they will have to go through a process to get the payment out. That means I cannot give a definitive date, much as I would like to, and much as the hon. Member for Cardiff South and Penarth (Stephen Doughty) is right to suggest that it would benefit people to know when they will get the support to which they are entitled. I hope he understands that, administratively, if I gave a date there would be a risk that I would be back before the House again to explain why, in some cases, it was not delivered. We will do it as quickly as we can but, having talked to the pilot local authorities, they feel that we are taking the most robust approach with the best chance of getting the payment out as quickly as possible.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

For those who are getting support for alternative fuels, what reach does the Minister expect the scheme to have for those whom the Government have identified as relying on alternative fuels, and how long does he expect it will take for the remainder to get their money?

[Graham Stuart]

Following this urgent question, I will seek an answer for those on alternative fuels who are in the majority group; it might be where we are at in our data development, but I have not seen a number on that. If I can access that, I will write to the right hon. Gentleman, and I will seek a way of sharing it with the House. Most people will be paid automatically with a credit to their energy bill, which will be ready at the beginning of February. I suppose that may not appear on the bill until March, but we will have that up and running automatically for those with an energy bill. We hope to use the same portal that is being used for the EBSS £400 alternative fuel payment, and to open it very shortly after the opening of the EBSS alternative portal. When I have further specific dates that I can share, I will do so.

[Mike Amesbury (Weaver Vale) (Lab)]

A number of constituents have got in touch with me from Castle View House, where several flats are sub-metered. They are desperate, and have been for some time, for payments to get through the door. I know that right hon. and hon. Members across the House also have constituents in that situation, many in park homes. I was not at all convinced by the Minister’s answer that the portal will be open on 27 February and the scheme will be in operation. What guarantee is there?

[Graham Stuart]

The hon. Gentleman is quite right to highlight the residents of Castle View House and the park home residents in his constituency, who are waiting and expecting to hear that they will get the support to which they are entitled. I am confident that we will have the scheme open on or by 27 February, and I and my teams will do everything to make sure that happens. We are working through local authorities, so we must ensure that we have all the procedures—some of which I touched on—properly worked through, and that we have local authority staff trained up so that they can then process the payment. I am afraid that is as far as I can go right now. It is a novel system; those working in local authorities on council tax are used to collecting money in rather than putting it out, but we are doing everything we can and I am grateful for the work of local authorities for the commitment they have shown, at a really busy time, in Wales, Scotland and England to try to make sure the payment is delivered.

[Daisy Cooper (St Albans) (LD)]

Up to 170 park home households in Frogmore Home Park, Newlands Park, Highview Park and other areas of my constituency are still waiting for their £400 energy support payment. I first raised the issue of my park homes with the Minister seven months ago, and only last night, by chance, we discovered that the scheme would not be open by the end of this month. There are freezing temperatures this week. We cannot wait another month for the Government to get around to setting up a portal, which will then take much longer to release the funds. I suggested to the Minister last night that he immediately empower local authorities to distribute emergency funds to those households. Will he do that today?

[Graham Stuart]

The hon. Lady has passionately espoused the interests of her constituents over a considerable time, and I share and understand her frustration. She did not find this out yesterday by chance, but in a briefing with me that was arranged for Members right across the House. I am absolutely focused on making sure that the portal opens on or before Monday 27 February, and that we then get the money out to those who are entitled to it, with due protections for public money as well as a focus on delivery for them.

[Hywel Williams (Arfon) (PC)]

Wales has a smaller population than Scotland, yet the number of smart meters disconnected in Wales is consistently higher. In quarter 3 last year it was 75,000 disconnected in Wales, compared with 66,000 in Scotland; in Q2 it was 80,000 compared with 69,000; and in Q1 last year it was 60,000 compared with 50,000. I am indebted to the hon. Member for East Lothian (Kenny MacAskill) for enlightening me on these figures—perhaps the Minister can also enlighten me on why they are like that.

[Graham Stuart]

I am meeting suppliers this afternoon, and I will be pressuring them and continuing to talk to them about ensuring that they do everything possible to support people and provide them with emergency credit, repayment programmes and everything possible to avert their getting in a position where they have to have forcible implementation of prepayment meters, and to look after those who are on them and ensure that they are in a position where they can continue to access their heat and light.

[Anne McLaughlin (Glasgow North East) (SNP)]

Next week I am launching the all-party parliamentary group on prepayment meters, and one of the first things we were looking at is so-called self-disconnection. Given that I wrote to the Secretary of State in September expressing my concerns about this issue and have received zero response; given that the Government have twice tried to block my Pre-Payment Meters (Self-Disconnection) Bill, which seeks to outlaw self-disconnection; and given that I have had no response from BEIS to my debate in this Chamber on more general issues around prepayment meters last December, which was supported across the House, I ask the Secretary of State to commit today to meeting the APPG as a matter of urgency. We have been waiting long enough. The Minister can use terms such as physical disconnection all he likes, but the impact is the same: if people cannot access gas and electricity, they are stuck, and in 2022 somebody on a prepayment meter was disconnected from their energy supply every 10 seconds.

[Graham Stuart]

I pay tribute to the hon. Lady for her focus on and proper championing of this issue. I am not the Secretary of State but, as the Minister for Energy and Climate, I will instruct my office to reach out to hers and try to set up a meeting with the APPG sooner rather than later.

[Holly Lynch (Halifax) (Lab)]

The Minister can be in no doubt about the strength of feeling on this, because we are going to have to go back to our constituents—who, we having shared with them his own words, were expecting the alternative fund at the end of last year and then in December—and disappoint them again with the news that it is not coming in January. He said that local authority capacity issues are part of the delay in rolling out the payment, so what consideration has he given to supporting local authorities with additional resources so that they can roll it out faster? As I shared with him yesterday, a member of police staff has told me that she cannot afford to put her heating on. We need to make sure that people, including dedicated public servants, can stay warm, so how can we get it rolled out?

[Graham Stuart]

I do not think I identified capacity issues as such; it is more about a set of complex issues that need to be resolved and then, having resolved them, providing suitable guidance for local authorities so that they are in a position to make the payment. I did say that it is challenging times for local authorities, because they are also doing council tax, but I am not hearing from them that there is some quick fix. We need people who are already trained to be able to use the systems, and it is through those systems that we will be able to ensure that the payment goes out. We are working with local authorities on the pilots, and I am grateful for their help in shaping the system and the guidance that will go to the other local authorities across the country.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

The Minister must realise that promises of reviews by Ofgem into the activities of energy companies will come far too late for people who are struggling now to pay their bills—indeed, who cannot get anywhere near paying them. I am already waiting for a promised meeting with Ministers about the malpractice of overpayments being routinely kept by energy companies when they are consumers’ money, and direct debits having shot up well above the level at which they should be. The Minister has the power to turn up the heat on Ofgem: will he do it?

[Graham Stuart]

I meet Ofgem regularly—we will be meeting again this afternoon—and those are precisely the kinds of conversations we have. Ofgem is working hard on coming down on the suppliers and it has looked into making sure that suppliers do not build up unjustified credits. I hear what the hon. Gentleman says, but it is Ofgem’s role as the independent regulator to supervise, regulate and ensure that the licence conditions under which suppliers operate are fulfilled. We are doing everything possible to ensure that we hold Ofgem’s feet to the fire while it holds suppliers’ feet to the fire.

[Helen Morgan (North Shropshire) (LD)]

People who live in marinas and on houseboats are sub-metered, and in my constituency, they are often off the gas grid. Not only do they use prepayment cards—so they self-disconnect when they cannot afford energy—but they are being charged a pass-through commercial rate, often with 20% VAT added on. They have not had help with their heating or their electricity, and they are self-disconnecting. Does the Minister accept that offering money in the spring, when those people have already gone through a terrible cold winter, is just too late?

[Graham Stuart]

I share the hon. Lady’s frustration. Obviously we would have liked it to get to them sooner, but I have laid out the reasons why it has not. If their electricity is supplied by a commercial supplier, the energy bill relief scheme has been directly reducing their bills through that supplier. We have put in place legislation to require those Government interventions to be passed on to the end recipient.

[Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)]

The Minister mentioned in his initial reply the energy price guarantee, which has, of course, been extended until March 2024 for gas customers. There has been no further announcement, however, for those who use alternative fuels—oil, liquefied petroleum gas or wood pellets—to heat their homes. Can he give the House assurances that he will put pressure on the Treasury to make an announcement about next winter for households that use alternative fuels?

[Graham Stuart]

I can assure the hon. Gentleman that we will look carefully at the cost pressures across different markets, as we did when we came up with the alternative fuel payment, which was originally £100 before we doubled it to £200. I know that that is making a difference in Northern Ireland, and it will make a difference in rural areas around the UK.

[Jim Shannon (Strangford) (DUP)]

I thank the Government and the Minister very much for all the help that they have been able to give businesses and households—there is much to appreciate, and we need to put that on record.

Just this morning, a number of businesses back home in Newtownards town, which the Minister visited last week, have informed me that they are seeking small business support. They say that they have turned their lights off, that they are supplying thermals for staff to keep warm, and that they cannot afford the current prices. Some have informed me that they face bankruptcy. Would the Minister consider a small business relief fund that could be applied to businesses throughout the United Kingdom of Great Britain and Northern Ireland?

[Graham Stuart]

It was a pleasure to see the hon. Gentleman in his constituency last week; to meet community organisations there, including the Consumer Council, which hosted us; and to learn about the situation for people in Northern Ireland who are struggling with their energy bills. He is right to highlight the fact that businesses and others are struggling. That is why we brought in the EBRS, and why we will have the energy bills discount scheme from April. We will keep that under advisement.

Of course, in Northern Ireland—more than in the rest of the UK—many companies use alternative fuels, and we are, again, working on ensuring that we put support in place as soon as we can. But because of the nature of that, there is no central database, and we have to manage public funds. It sounds simple—if I were in opposition, I would probably shout at the Government to get it done, because it sounds so easy—but it turns out that it is complex. We are working as hard as we can to put those schemes in place a place even though energy is devolved and we should not have any responsibility at all—we have stepped up because we have had to, and we will continue to do so in this particular area. I very much hope to see the institutions restored in Northern Ireland and the Northern Irish people served by the people they elect.

[Patrick Grady (Glasgow North) (SNP)]

There really cannot be any justification for the premium charges that are associated with prepayment meters. The energy companies are getting cash up front from customers before any energy is used. As I said to the Minister on Monday, they must be able to bank that and earn interest on it, as with those who accumulate credit balances and usually pay in arrears. Perhaps he can raise that point with the companies when he meets them this afternoon. Will he let us know what their response is in the letter that he promised me on Monday?

[Graham Stuart]

Ofgem is responsible for regulating that area. As I understand it, Ofgem looked into it in 2009 and made some changes then. It required suppliers to make cost-reflective charges only—charges had to be based genuinely on the additional costs of delivery—but that has, to a certain extent, been obviated by the energy price cap, which has put a tariff limit on what any company can charge. I will make sure that I get a letter to the hon. Gentleman on this topic.

Bills Presented

National Parks (Camping) Bill

Presentation and First Reading (Standing Order No. 57)

Richard Foord presented a Bill to provide for a right to camp in National Parks; and for connected purposes.

Bill read the First time; to be read a Second time on Friday 24 March, and to be printed (Bill 235).

General Election (Public Support) Bill

Presentation and First Reading (Standing Order No. 57)

Richard Burgon presented a Bill to provide for a mechanism for an early general election to be held in certain circumstances, where the public has demonstrated support for such an election; and for connected purposes.

Bill read the First time; to be read a Second time on Friday 17 March, and to be printed (Bill 237).

First-Aid (Mental Health)

1st reading
Wednesday 25th January 2023 Commons Chamber

Motion for leave to bring in a Bill (Standing Order No. 23)

14:05

[Dean Russell (Watford) (Con)]

I beg to move,

That leave be given to bring in a Bill to make mental health first-aid part of first-aid training requirements; and for connected purposes.

This is my second attempt to bring this Bill to the House, and as before, I will speak about the sensitive topics of mental health and suicide, share the scale of public support through the excellent “Where’s Your Head At?” campaign, outline the economic and business benefits, and share why the Bill will bring hope to those who are struggling to cope in times of difficulty. Ultimately, at the heart of the Bill is a simple request: to create parity between mental health and physical health first aid in the workplace.

There is no doubting that the world has changed, not only in post-covid era but through the rise in technology, the relentlessness of social media, and an “always-on” culture. Our working environments are shifting rapidly but we, as humans, have not changed. We still have emotions; we still feel love and loss, happiness and grief, and joy and pain. We have goals and ambitions, and hopes and expectations. Sometimes they can be overwhelming, and at times we can find it hard to express how we feel. When we feel vulnerable, we may find it hard to know who to speak to when times are tough.

In my previous attempt to introduce the Bill, I spoke about the impact of hearing, as a teenager, my sister sob when she heard the news of a friend’s death by suicide. To frame the importance of this Bill, I ask those listening to think for a moment about someone they may have lost in their own lives. What would we all give to hold a loved one’s hand just one more time, to hear them knock at the door just once more, or to have just one more conversation? What would we give to have that loved one here today?

As I have said before, if suicide were a virus, we would be on the hunt for a vaccine. If loneliness were a disease, would we not search for a cure? At the extreme end, we are talking about saving lives with this Bill. The House of Commons Library reports that in 2021 alone, 6,319 deaths by suicide were registered in Great Britain. Although suicide rates have declined over recent decades, and, thankfully, the 20th-century stigma and shame around mental health have shifted, there is always more to do. That is why I am backing “Baton of Hope”, a new charity campaign that is part of a growing movement aspiring to a zero-suicide society. Achieving that will not be easy, and of course we cannot bring back those we have lost, but with early intervention and—through the Bill—the right signposting at the right time, we could prevent the loss of others.

The Bill is not just about preventing suicide, as important as that is. It is also about reflecting the reality of modern society, especially post covid. There is no doubt that mental health issues are on the rise. Stress, depression and anxiety have become the leading cause of lost working days since the 1990s. Let me share some data. The Centre for Mental Health estimates that 10 million more people will need mental health support as a direct result of the pandemic. That growing need was perhaps reflected most strongly this week, when it was announced that £150 million of additional funding for mental health services was going into the system. I was pleased that Watford General Hospital in my constituency received £355,000 for mental health services to support my constituents and those across west Hertfordshire.

According to the British Safety Council and the Health and Safety Executive, nearly 1 million workers who suffer work-related stress, depression or anxiety will lose an average of 18.6 days a year. That is in the context of 17 million days lost due to poor mental health in 2021 and 2022. That brings me to the all-important business benefits of this Bill.

According to a 2022 report by Deloitte on mental health at work, the cost of mental health to UK businesses is a staggering £56 billion a year. According to GoodShape, a business in my constituency that partners with leading organisations to track and improve the wellbeing of staff, 54% of workers who take more than two days of leave due to mental health-related absences will go on to leave their job. The Deloitte report also indicates that the return on investing in staff is good, with £5 back for every £1 spent, so it cannot be argued that the investment is not worthwhile.

A pre-pandemic report indicated that a new thing called presenteeism, where employees are physically at work but not productive, was costing UK employers up to £29 billion a year. Where presenteeism relates to mental health, it can have a more detrimental impact on absences. Ensuring mental health is firmly on the business agenda is not a burden, but an investment that ultimately benefits a business’s bottom line. There is real public support, too, thanks to the work of Natasha Devon and “Where’s Your Head At?”, for which I am proud to be an official ambassador. More than 200,000 people signed a petition supporting the principles behind this Bill way before I joined Parliament.

I have seen the benefits directly myself. In my constituency of Watford, I set an ambition to train 1,000 people in mental health first aid awareness, which I originally anticipated would take about a decade to achieve. Incredibly, we have just reached the 600th person trained by that programme, thanks to the incredible support of Camelot and the Watford and West Herts chamber of commerce. Many more are trained locally through other schemes, too, and that is because there are now many more providers of mental health first aid and mental health first aid awareness training. Some, such as the Mental Health First Aid England group, which helped with some insights for my speech today, offer many other courses, and Departments offer free courses, which are available to many.

I would not seek to limit the options or be too prescriptive, because workplaces are diverse. From offices to hair salons, and from construction sites to supermarkets, each worker is different. Behind every statistic is a person with family and friends. They are our mothers, our brothers, our sisters and our fathers. They are the veterans and the volunteers. That is why I believe the power in this Bill lies in making sure it is flexible enough to work for all. We spend so much time in the workplace, yet we cannot always be ourselves when we are there. It can be hard to show our true face when times are tough, because we aim as always to be professional.

People do not wear bandages to show where they have anxiety and depression. Many learn to hide their pain in fear of damaging their career. Many learn to smile, when really they would like to run a mile to escape the situation they find themselves in. I must be clear that mental health first aiders are not expected to be counsellors or psychologists, but just like physical first aiders, who are not expected to be paramedics or surgeons, this Bill will simply mean that workers have someone to signpost them to the support and help they need when they need it.

Before I conclude, I take this short opportunity to say to anyone listening to this speech who may be having difficulties right now that tough times can pass. Sometimes the mind can be a cruel echo chamber full of unwanted thoughts and hurt. Speaking can be a powerful release valve, reducing the pressure and stress. Please ask for help if you need it. It is not a weakness to ask for help; it is a strength.

To the Minister sitting on the Front Bench, my hon. Friend the Member for Lewes (Maria Caulfield), I say that I truly hope the Government will also have the strength to back this Bill. Yes, I am back for a second time. Unfortunately, I never give up, and I will not give up on this Bill. Even if I did, there are so many more behind me who would want to make it happen. This is not a request that will go away, and I will be back again if needed. This Bill would make a small change with a massive impact. I humbly request that it be given due consideration and passed into law.

Question put and agreed to.

Ordered,

That Dean Russell, Andy Carter, Jonathan Gullis, Jim Shannon, Virginia Crosbie, Dr Neil Hudson, Nick Fletcher, Lia Nici, Siobhan Baillie, Sarah Atherton, David Duguid and Debbie Abrahams present the Bill.

Dean Russell accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 24 February, and to be printed (Bill 236.)

Economic Crime and Corporate Transparency Bill

Report stage
Wednesday 25th January 2023 Commons Chamber

[2nd Allocated Day]

Further consideration of Bill, as amended in the Public Bill Committee

[Relevant documents: the Eleventh Report of the Treasury Committee of Session 2021-22, Economic crime, HC 145; and the Government Response, Session 2021-22, HC 1261; the oral evidence taken before the Business, Energy and Industrial Strategy Committee on 8 November 2022, on Fraudulent company registrations: Economic Crime and Corporate Transparency Bill , HC 862; the letter from UK Finance to the Chair of the Business, Energy and Industrial Strategy Committee relating to Fraudulent company registrations and the Economic Crime and Corporate Transparency Bill, dated 21 December 2022; and the letter from the Minister for Business, Energy and Corporate Responsibility to the Chair of the Business, Energy and Industrial Strategy Committee relating to the Economic Crime and Corporate Transparency Bill, dated 28 December 2022.]

New Clause 14

Approved regulators: information powers relating to economic crime

“(1) The Legal Services Act 2007 is amended as follows.

(2) After section 111 insert—

“Part 5A: Approved regulators: information powers

111A The Law Society’s information powers relating to economic crime

111A The Law Society’s information powers relating to economic crime

(1) The Law Society may, by notice, require a person falling within subsection (3) to—

(a) provide information, or information of a description, specified in the notice;

(b) produce documents, or documents of a description, specified in the notice.

(2) The Law Society may only exercise the power in subsection (1) in relation to information or documents which the Law Society considers it necessary or expedient to have for the purposes of, or in connection with, the performance of its regulatory functions for purposes relating to the prevention or detection of economic crime.

(3) The persons are—

(a) a solicitor;

(b) an employee of a solicitor;

(c) a body recognised under section 9 of the Administration of Justice Act 1985;

(d) an employee or manager of, or person with an interest in, such a body;

(e) a licensed body;

(f) a manager or employee of a licensed body;

(g) a non-authorised person who has an interest or an indirect interest, or holds a material interest (within the meaning of Part 5 of this Act), in a licensed body;

(h) a person who was, but is no longer, of a description mentioned within any of paragraphs (a) to (g).

(4) A notice under subsection (1)—

(a) may specify the manner and form in which the information is to be provided or document produced;

(b) must specify the period within which the information is to be provided or document produced;

(c) may require the information to be provided, or document to be produced, to the Law Society or to a person specified in the notice.

(5) The Law Society may pay to any person such reasonable costs as may be incurred by that person in connection with the provision of any information, or production of any document, by that person pursuant to a notice under subsection (1).

(6) The Law Society, or a person specified under subsection (4)(c) in a notice, may take copies of or extracts from a document produced pursuant to a notice under subsection (1).

(7) In this section “economic crime” has the meaning given by section 179(1) of the Economic Crime and Corporate Transparency Act 2023.

111B Enforcement of information powers relating to economic crime

(1) If a person refuses or otherwise fails to comply with a notice under section 111A(1), the Law Society may apply to the High Court for an order requiring the person to comply with the notice or with such directions for the like purpose as may be contained in the order.

(2) On an application under subsection (1), the High Court may order a person other than the person to whom the notice was given to provide information or produce documents specified in the notice, if the High Court is satisfied that there is reason to suspect that the information or documents have come into the possession or custody or under the control of that other person.

(3) Section 111A(4) applies in relation to an order under subsection (2) as it applies in relation to a notice under section 111A(1).

(4) An order under this section may direct the Law Society to pay such reasonable costs as may be incurred by a person in connection with the provision of any information, or production of any document, by that person pursuant to the order.

(5) A person may take copies of or extracts from a document produced to them pursuant to an order under this section.

111C Provision of information relating to economic crime by other persons

(1) The Law Society may apply to the High Court for an order requiring a person who does not fall within section 111A(3) to—

(a) provide information, or information of a description, specified in the order, or

(b) produce documents, or documents of a description, specified in the order.

(2) The High Court may make an order under this section only if it is satisfied—

(a) that it is likely that the information or document is in the possession or custody of, or under the control of, the person, and

(b) that it is necessary or expedient for the Law Society to have the information or document for the purposes of, or in connection with, the performance of its regulatory functions for purposes relating to the prevention or detection of economic crime.

(3) Section 111A(4) applies in relation to an order under this section as it applies in relation to a notice under section 111A(1).

(4) An order under this section may direct the Law Society to pay such reasonable costs as may be incurred by a person in connection with the provision of any information, or production of any document, by that person pursuant to the order.

(5) A person may take copies of or extracts from a document produced to them pursuant to an order under this section.

(6) In this section “economic crime” has the meaning given by section 179(1) of the Economic Crime and Corporate Transparency Act 2023.

Other approved regulators: information powers relating to economic crime

111D Order to confer information powers on other approved regulators

(1) The Lord Chancellor may by order amend this Part so as to—

(a) provide for sections 111A to 111C to apply in relation to an approved regulator other than the Law Society as they apply in relation to the Law Society, and

(b) specify the persons to whom notices under section 111A(1) may be given by that approved regulator.

(2) The Lord Chancellor may make an order under this section in relation to an approved regulator only if—

(a) the Board has made a recommendation in accordance with section 111E in relation to that approved regulator, and

(b) the persons specified in the order to whom notices under section 111A(1) may be given by that approved regulator are the same as those persons specified in the recommendation.

111E The Board’s power to recommend orders under section 111D

(1) The Board may recommend to the Lord Chancellor that the Lord Chancellor make an order under section 111D in relation to an approved regulator.

(2) A recommendation must specify the persons to whom the approved regulator should be able to give notices under section 111A(1).

(3) A recommendation may only be made with the consent of the approved regulator.

(4) Before making a recommendation under this section, the Board must publish a draft of the proposed recommendation.

(5) The draft must be accompanied by a notice which states that representations about the proposed recommendation may be made to the Board within a specified period.

(6) Before making the recommendation, the Board must have regard to any representations duly made.”

(3) In section 206 (parliamentary control of orders and regulations), in subsection (4), after paragraph (n) insert—

“(na) section 111D (order to confer information powers on other approved regulators);”.”—(Tom Tugendhat.)

This new clause would allow the Law Society and any other approved regulators specified by the Lord Chancellor to obtain information or documents for exercising their regulatory functions for purposes relating to the prevention and detection of economic crime.

Brought up, and read the First time.

14:16

[The Minister for Security (Tom Tugendhat)]

I beg to move, That the clause be read a Second time.

[Mr Deputy Speaker (Sir Roger Gale)]

With this it will be convenient to discuss the following:

New clause 1—Disclosure of information in the public interest likely to be relevant to the investigation of economic crime—

‘(1) It is a defence to an action based on the disclosure or publication of information for the defendant to show that—

(a) the disclosure or publication complained of was likely to be relevant to the investigation of an economic crime, and

(b) the defendant reasonably believed that the disclosure or publication complained of was likely to be relevant to the investigation of an economic crime.

(2) Subject to subsection (3), in determining whether the defendant has shown the matters mentioned in subsection (1), the court must have regard to all the circumstances of the case.

(3) In determining whether it was reasonable for the defendant to believe that the disclosure or publication complained of was likely to be relevant to the investigation of an economic crime, the court must make such allowance for editorial judgement as it considers appropriate.

(4) For the avoidance of doubt, the defence under this section may be relied upon irrespective of whether the statement complained of is a statement of fact or a statement of opinion.”

New clause 2—Economic crime: power to strike out statement of case for abuse of process—

The court may strike out the whole or part of any statement of case which can be reasonably understood as having the purpose of concealing, or preventing disclosure or publication of, any information likely to be relevant to the investigation of an economic crime.”

New clause 3—Home Office review of the Tier 1 (Investor) visa scheme: publication—

Within a day of the passage of this Act, the Secretary of State must publish in full the findings of the Home Office review of the Tier 1 (Investor) visa scheme which relate to economic crime.”

New clause 4—Offence of failure to prevent fraud, false accounting or money laundering—

‘(1) A relevant commercial organisation (“C”) is guilty of an offence under this section where—

(a) a person (“A”) associated with C commits a fraud, false accounting or an act of money laundering, or aids and abets a fraud, false accounting or act of money laundering, intending—

(i) to confer a business advantage on C, or

(ii) to confer a benefit on a person to whom A provides services on behalf of C, and

(b) fails to prevent the activity set out in paragraph (a).

(2) C does not commit an offence where C can prove that the conduct detailed in subsection (1)(a) was intended to cause harm to C.

(3) It is a defence for C to prove that, at the relevant time, C had in place procedures that were reasonable in all the circumstances and which were designed to prevent persons associated with C from undertaking the conduct detailed in subsection (1)(a).

(4) For the purposes of this section “relevant commercial organisation” means—

(a) for the offence as it relates to false accounting and fraud, “relevant commercial organisations” are defined as—

(i) a body which is incorporated under the law of any part of the United Kingdom and which carries on a business (whether there or elsewhere),

(ii) any other body corporate (wherever incorporated) which carries on a business, or part of a business, in any part of the United Kingdom,

(iii) a partnership which is formed under the law of any part of the United Kingdom and which carries on a business (whether there or elsewhere), or

(iv) any other partnership (wherever formed) which carries on a business, or part of a business, in any part of the United Kingdom, and

(v) for the purposes of this section, a trade or profession is a business;

(b) for the offence as it relates to money laundering, “relevant commercial organisations” are defined as—

(i) credit institutions;

(ii) financial institutions;

(iii) auditors, insolvency practitioners, external accountants and tax advisers;

(iv) independent legal professionals;

(v) trust or company service providers;

(vi) estate agents and letting agents;

(vii) high value dealers;

(viii) casinos;

(ix) art market participants;

(x) cryptoasset exchange providers;

(xi) custodian wallet providers.”

This new clause introduces a new criminal corporate offence for failure to prevent fraud, false accounting and money laundering, by aligning it with other corporate criminal offences.

New clause 5—Identification doctrine—

‘(1) A body corporate commits an offence of fraud, money laundering, false accounting, bribery and tax evasion where the offence is committed with the consent, connivance or neglect of a senior manager.

(2) An individual is a “senior manager” of an entity if the individual—

(a) plays a significant role in—

(i) the making of decisions about how the entity’s relevant activities are to be managed or organised, or

(ii) the managing or organising of the entity’s relevant activities, or

(b) is the Chief Executive or Chief Financial Officer of the body corporate.

(3) A body corporate also commits an offence if, acting within the scope of their authority—

(a) one or more senior managers engage in conduct, whether by act or omission, such that, if it had been the conduct of only one representative, that representative would have been a party to the offence; and

(b) the senior manager who is responsible for the aspect of the organization’s activities that is relevant to the offence — or the senior managers collectively — fail to take all reasonable steps to prevent that offence being committed.”

This new clause reforms the “identification doctrine”, so that a body corporate commits an economic crime offence where the offence is committed with the consent, connivance or neglect of a senior manager or senior managers.

New clause 6—Failure to prevent fraud, false accounting or money laundering: individual liability—

‘(1) A person (“S”) commits an offence if—

(a) at a time when S is a senior manager or corporate officer of a corporate body (“C”), S—

(i) takes, or agrees to the taking of, a decision by or on behalf of the corporate body as to the way in which the business of the corporate body is conducted, and

(ii) fails to take any steps that S could take to prevent such a decision being taken;

(b) at the time of the decision, S is aware of a risk that the implementation of the decision may lead to the commission of an offence of money laundering, fraud, false accounting, bribery or tax evasion; and

(c) the implementation of the decision causes C to commit such an offence.

(2) For the purposes of this section—

(a) an individual is a “senior manager” of a corporate body if the individual plays a significant role in—

(i) the making of decisions about how the entity’s relevant activities are to be managed or organised, or

(ii) the actual managing or organising of the entity’s relevant activities;

(b) “officer”, in relation to a body corporate, means—

(i) a director, manager, associate, secretary or other similar officer, or

(ii) a person purporting to act in any such capacity;

(c) in paragraph (b)(i) “director”, in relation to a body corporate whose affairs are managed by its members, means a member of the body corporate.

(3) A person guilty of an offence under this section is liable—

(a) on summary conviction—

(i) in England and Wales, to imprisonment for a term not exceeding 12 months (or 6 months, if the offence was committed before the commencement of section 154(1) of the Criminal Justice Act 2003) or a fine, or both;

(ii) in Scotland, to imprisonment for a term not exceeding 12 months or a fine not exceeding the statutory maximum, or both;

(iii) in Northern Ireland, to imprisonment for a term not exceeding 6 months or a fine not exceeding the statutory maximum, or both;

(b) on conviction on indictment, to imprisonment for a term not exceeding 7 years or a fine, or both.”

This new clause introduces direct criminal liability for corporate officers who take a decision, or fail to take a decision, that knowingly results in an offence being committed.

New clause 7—Whistleblowing: economic crime—

‘(1) Whistleblowing is defined for the purposes of this section as any disclosure of information suggesting that, in the reasonable opinion of the whistleblower, an economic crime—

(a) has occurred,

(b) is occurring, or

(c) is likely to occur.

(2) The Secretary of State must, within twelve months of the date of Royal Assent to this Act, set up an office to receive reports of whistleblowing as defined in subsection (1) to be known as the Office for Whistleblowers.

(3) The Office for Whistleblowers must—

(a) protect whistleblowers from detriment resulting from their whistleblowing,

(b) ensure that disclosures by whistleblowers are investigated, and

(c) escalate information and evidence of wrongdoing outside of its remit to another appropriate authority.

(4) The objectives of the Office for Whistleblowers are—

(a) to encourage and support whistleblowers to make whistleblowing reports,

(b) to provide an independent, confidential and safe environment for making and receiving whistleblowing information,

(c) to provide information and advice on whistleblowing, and

(d) to act on evidence of detriment to the whistleblower in line with guidance set out by the Secretary of State in regulations.

(5) The Office for Whistleblowers must report annually to Parliament on the exercise of its duties, objectives and functions.”

New clause 21—Civil recovery: costs of proceedings—

After section 313 of the Proceeds of Crime Act 2002 insert—

“313A    Costs orders

(1) This section applies to proceedings brought by an enforcement authority under part 5 of the Proceeds of Crime Act 2002 where the property in respect of which the proceedings have been brought has been obtained through economic crime.

(2) The court may not make an order that any costs of proceedings relating to a case to which this section applies (including appeal proceedings) are payable by an enforcement authority to a respondent or a specified responsible officer in respect of the involvement of the respondent or the officer in those proceedings, unless—

(a) the authority acted unreasonably in making or opposing the application to which the proceedings relate, or in supporting or opposing the making of the order to which the proceedings relate, or

(b) the authority acted dishonestly or improperly in the course of the proceedings.”

This new clause extends the cap on adverse costs introduced by the first Economic Crime Act (Transparency and Enforcement) 2022 for Unexplained Wealth Orders, to all civil recovery orders.

New clause 23—Review of measures to prevent proceeds of economic crime entering the UK economy—

Within six months of the passage of this Act, the Secretary of State must lay before Parliament the report of a review of what further regulatory measures could be taken to prevent the circulation in the UK economy of the proceeds of economic crime controlled by individuals or entities subject to sanctions.”

This new clause creates an obligation for the Secretary of State to report to Parliament on the merits of further regulatory measures for preventing the circulation in the economy of the proceeds of economic crime controlled by individuals or entities subject to sanctions.

New clause 25—Report into effectiveness of Act in addressing economic crime involving sanctioned individuals—

‘(1) The Secretary of State must, within six months of this Act being passed, lay before Parliament a report of a review into the effectiveness of the measures in this Act in addressing economic crime involving designated persons.

(2) The report must consider the case for further legislation to make provision for the seizing of assets of a designated person where there is evidence that the designated person has been involved in economic crime.

(3) In this section, “designated persons” has the meaning given in section 9 of the Sanctions and Anti-Money Laundering Act 2018.”

New clause 27—Compensation for Victims of Economic Crime—

‘(1) The Secretary of State must, no later than 90 days from the date on which this Act comes into force, publish and lay before Parliament a strategy for the potential establishment of a fund for the compensation of victims of economic crime.

(2) The strategy may include provisions on the management and disposal of any assets realised by the government, or any body with law enforcement responsibilities in relation to economic crime, under relevant UK legislation.”

This new clause would require the Secretary of State to prepare and publish a strategy on the potential establishment of a fund to provide compensation to victims of economic crime.

New clause 30—Assets of Iranian officials obtained through economic crime—

Within six months of the passage of this Act, the Secretary of State must lay before Parliament the report of a review of regulatory measures to prevent the circulation in the UK economy of assets of Iranian officials which have been obtained through economic crime.”

New clause 31—Fund for the purposes of tackling economic crime—

In the Companies Act 2006, after Part 29 insert—

Part 29A

Economic Crime

993A Fund for the purposes of tackling economic crime

‘(1) The Secretary of State must by regulations establish a fund for the purposes of tackling economic crime.

(2) The regulations must specify the purposes for which the fund may be used, including funding the activities of law enforcement agencies in tackling economic crime.””

New clause 32—Review of definition of cryptoassets—

Within 18 months of the passage of this Act, the Secretary of State must lay before Parliament the report of a review of the adequacy of the definitions of cryptoassets contained in this Act.”

New clause 33—Economic Crime Committee of Parliament—

‘(1) The Secretary of State must by regulations establish a body to be known as the Economic Crime Committee of Parliament (in this section referred to as “the ECC”).

(2) The ECC will consist of nine members who are to be drawn both from the members of the House of Commons and from the members of the House of Lords.

(3) Each member of the ECC is to be appointed by the House of Parliament from which the member is to be drawn.

(4) The ECC will have the power to meet confidentially.

(5) The ECC may examine or otherwise oversee any regulatory, enforcement or supervision agencies involved in work related, but not limited to—

(a) tax avoidance and evasion by corporations;

(b) illicit finance;

(c) anti-money laundering supervision;

(d) tackling fraud;

(e) kleptocracy and corruption; and

(f) whistleblower protection.”

This new clause would oblige the Secretary of State to establish an Economic Crime Committee of parliament to examine and oversee regulatory, enforcement and supervisory action against economic crime.

New clause 39—Duty to report on economic crime resourcing and performance—

‘(1) The Director General of the National Crime Agency must—

(a) prepare a report on the resourcing and staffing of its work to counter economic crime, and its performance tackling economic crime, and

(b) send it to the Secretary of State as soon as practicable after this section comes into force.

(2) The Director General must prepare and send to the Secretary of State further reports on these topics annually.

(3) Each report must include, in particular—

(a) a report of the total annual budget and number of staff allocated to economic crime for each unit within the National Crime Agency,

(b) a report of the number of investigations, arrests, prosecutions and convictions relating to economic crime for each unit within the National Crime Agency, and

(c) a report of other relevant data including, but not limited to, cases per year broken down by both type and outcome; number of restraint or confiscation orders obtained; and value of assets confiscated.

(4) Reporting under subsection (3) must provide a breakdown between domestic economic crime and international economic crime. Reporting on international economic crime under subsections (3)(b) and (3)(c) must provide a breakdown by the income classification of the countries affected.

(5) The Director General must publish every report under this section—

(a) as soon as practicable after they send it to the Secretary of State, and

(b) in such manner as they consider appropriate.”

Section 6 of the Crime and Courts Act 2006 currently places a duty on the Director General of the National Crime Agency to make arrangements for publishing information about the exercise of NCA functions and other matters relating to the NCA, and publish information in accordance with those arrangements. This new clause inserts a new section that places a specific duty on the Director General to prepare an annual report on the NCA’s resourcing and performance relating to economic crime. The section stipulates the minimum information that the Director General must include in the report.

New clause 40—Report into options for corporate liability for economic crime—

‘(1) The Secretary of State must produce a report on corporate criminal liability for economic crime offences.

(2) The report must consider the merits of different models for corporate liability in respect of economic crime, including but not limited to—

(a) the respondeat superior model; and

(b) the failure to prevent model, insofar as it has not already been introduced by the enactment of this Act.

(3) The report must be laid before Parliament within six months of this Act being passed.

(4) In this section—

“the respondeat superior model” means a model for corporate criminal liability in which an entity is guilty of an offence if an employee or agent commits an economic crime offence—

(a) in the course of their employment or agency, or

(b) with an intent to benefit that entity;

“the failure to prevent model” means a model for corporate criminal liability in which an entity is guilty of an offence if a person associated with that entity commits an economic crime offence, intending—

(a) to confer a business advantage on that entity, or

(b) to confer a benefit on a person or other entity to whom the associated person provides services on behalf of the entity with which it is associated, except that the entity shall not be liable where the conduct was intended to cause harm to that entity,

unless the entity can prove that it had in place such prevention procedures as were reasonable in the circumstances, or that it was reasonable not to have any such procedures in place;

a person is “associated with” an entity if they are a person who performs services for or on behalf of that entity, including in, but not limited to, the capacity of an employee, agent or subsidiary.”

Government amendments 44 to 49, 57 and 58 to 100.

[Tom Tugendhat]

It is a pleasure to see you in your place, Mr Deputy Speaker, and it is the first time I have had the privilege of speaking under your chairmanship on these matters. It is also a pleasure to see so many of the usual faces on this matter. Many of us have gone over these questions in Committee and, actually, in the many years beforehand in various different ways, so it is an enormous privilege to be here. It is particularly a privilege to be speaking after the Minister my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) did such a brilliant job yesterday. I am only picking up where he left off, so I am afraid the second act will not be nearly as compelling as the first.

All those who participated in the Bill Committee gave enormous insights into various different perceptions of how we should be thinking about economic crime and corporate transparency. We have had many interesting debates, and I thank enormously those who have taken part in the various different ways. The fact that we have a two-day debate on Report speaks pretty clearly about the significant size and complexity of this Bill.

Yesterday, we debated parts 1 to 3, which cover Companies House reform and corporate transparency. Today, we turn our attention to parts 4 to 6. The clauses in part 4 create new powers that allow law enforcement to more quickly and easily seize and recover cryptoassets. The creation of the civil forfeiture power for cryptoassets will mitigate the risk posed by those who cannot be criminally prosecuted, but who use their funds to further criminality or for terrorist purposes. This did not prove to be particularly contentious in Committee.

In part 5 of the Bill, we are making it easier for businesses to share information more effectively with each other and with law enforcement to prevent and detect economic crime. We are also creating new exemptions to reduce unnecessary reporting by businesses carrying out transactions on behalf of their customers. We are also giving frontline legal services regulators enhanced enforcement powers to support them as they uphold the economic crime agenda within their regulated community.

I will briefly summarise the amendments we have tabled relating to parts 4, 5 and 6 of the Bill. Many of them address the debate that took place in Committee and will ensure that the Bill works as intended. I should acknowledge that the amendments are perhaps slightly greater in number than we would have liked. The vast majority—amendments 51 and 57 to 100—are minor technical or consequential amendments to ensure that the detail of the cryptoasset measures will work effectively and can be used as soon as possible. That reflects the technical detail of the subject area and the need to make the changes work for each of the jurisdictions of England and Wales, Scotland and Northern Ireland that are covered by the Proceeds of Crime Act 2002.

I now turn to the more substantive Government amendments. New clause 14 allows the Solicitors Regulation Authority to proactively request information from its regulated community for the purpose of monitoring compliance with the economic crime regime. It will enable the SRA to monitor and detect breaches of the rules and legislation related to economic crime, including offences related to money laundering, terrorist financing and sanctions.

Government amendments 44 to 47 to clauses 171 and 172 concern information orders. They seek to clarify the cases in which the information order power can be used and to provide clarity to operational partners about how they should be used. They will ensure that the power can be used only for the criminal intelligence functions of the National Crime Agency, and that when assessing a request for information from a foreign intelligence unit, the NCA must be satisfied that the information would support the FIU’s intelligence function.

[Bob Seely (Isle of Wight) (Con)]

On the SRA, will the Bill address the strategic lawsuits against public participation that we have been discussing for the last couple of days, or does it purely concern money laundering and other offences unrelated to SLAPPs?

[Tom Tugendhat]

The Bill is concerned only with economic crime and corporate transparency, and the regulations will cover only that. Many Ministers, including the Lord Chancellor, have spoken about SLAPPs—I will touch on them later—but the reality is that they require a separate jurisdiction and a separate Bill.

Government amendments 48 and 49 concern information sharing. In Committee, Opposition Members rightly pointed out that our proposed definition of large accountancy firms did not include insolvency practitioners, auditors and tax advisers. I thank them for that. These amendments will rectify that omission by expanding the scope of the indirect information sharing clauses to include those sectors.

In addition to the Government amendments, several other amendments on a broad range of topics will be debated today. As in Committee, I look forward to what I anticipate will be a lively but extremely well-considered debate. The contributions of all hon. Members who participated in earlier debates have helped to shape the Bill into an effective tool to tackle illicit finance and ensure that the UK is a great place to do legitimate business.

I know that there are places where hon. Members would like the Bill to go further and do more. Indeed, I am as keen as many of them to solve some of the outstanding problems that we all wish to address, but we need to ensure that those ambitions are delivered in the most effective way and that we use the appropriate legislative vehicles to ensure that they have the desired outcome. Limiting the scope to just economic crime can, in several cases, create more problems than it solves, and I assure right hon. and hon. Members that I have strenuously tested what can be effectively delivered within the scope of the Bill.

[Dame Margaret Hodge (Barking) (Lab)]

Will the Minister expand on that interesting point? How would any of the amendments on SLAPPs, a duty to prevent or seizing assets limit what could be done in future?

[Tom Tugendhat]

The question is at what stage do we bring a Bill forward—do we wait for it to be perfect or do we bring forward what we can get at a certain point? The right hon. Lady raises some interesting points. She knows my views on SLAPPS; indeed, in a former incarnation, I may have expressed them extremely clearly. She knows that we share views on asset seizures too. I should point out, however, that no common law jurisdiction has successfully solved the question of asset seizures, although many of us have tried and, indeed, some of us are in conversation with others to try to work out ways of doing it—forfeiture and seizure are not quite the same thing.

[Mr Jonathan Djanogly (Huntingdon) (Con)]

Will my right hon. Friend give way?

[Tom Tugendhat]

I will give way; I should have known that I was lining that up.

[Mr Djanogly]

Yes, because my right hon. Friend touched on asset seizures and tempted me. Of course, Canada has enacted an Act of Parliament that provides for freezing orders to be translated into seizing orders at the request of the Attorney General of Canada.

[Tom Tugendhat]

My hon. Friend is absolutely right, but he is also no doubt aware that there is much discussion in the Canadian legal community about whether those orders will be challenged in different ways and how exactly they will work. There is still a serious debate about the nature of translating from forfeiture to seizure.

[Mr Djanogly]

My right hon. Friend is generous in giving way again. All this law is new: our unexplained wealth orders were new, and they have been questioned in the courts, so that is not the question. The question is whether we have the guts to stand up and move on this issue, as the whole western world wants to see.

[Hon. Members]

Hear, hear!

[Tom Tugendhat]

My hon. Friend is absolutely right, but I note that some hon. Members cheering would also cheer the provisions of the European convention on human rights that guarantee the right to private property and many of the areas that cause the difficulties that the UK has and Canada does not.

I do not deny that there is an enormous question for debate here and that many hon. Members would like to move quickly to seizure on many areas, but sadly, that may take a bit longer. One thing on which we all agree is that the UK’s place as a rule-of-law jurisdiction and as a home for justice, not just to ourselves but to many others around the world, is essential to our prosperity and to liberties around the world. It is therefore important to ensure that we correctly transfer from forfeiture to seizure, and recognise the rights and limits that we should respect.

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

I salute the Minister’s leadership on much of this agenda when he was a brilliant Chair of the Foreign Affairs Committee. He will not, however, want to go down in history as the Minister for mañana. In his responses to the hon. Member for Huntingdon (Mr Djanogly), he has said that the timing is not right and we must wait for future Bills. Can he put our minds at rest and give us a sense of when we might expect a Bill to come forward to address the concerns of the hon. Member for Huntingdon?

[Tom Tugendhat]

The right hon. Gentleman is extremely kind about my former work and, typically, slightly less so about my current employ. He can be assured that, no doubt, it will be temporary, as it is for all occupants.

That matter has seized my attention and has been of some interest to me in further discussions in different areas. I will not put a time on it, because it is not my ministerial responsibility; the right hon. Gentleman will know from his time in Government that talking across other Ministers’ briefs does not always help to advance the case. I assure him, however, that it has come up frequently in conversation with an intent to bring something forward. As I said, the Lord Chancellor has spoken about it to highlight that it is an area where various elements of change are necessary, so I look forward to hearing the proposals as they come forward. I certainly do not think that the matter can wait. We have sadly seen SLAPPs used against such inspiring examples as Eliot Higgins and Catherine Belton, who have stood up for justice in this country and around the world.

[Bob Seely]

Will the Minister give way?

[Tom Tugendhat]

I will not, because I am going to close.

Despite all the areas that we could have gone into, and would like to go into at a different time, the Bill is closely focused on economic crime and corporate transparency for the purpose of passing a series of measures that are essential to ensure that we keep our country safe and our economic jurisdictions clean.

[Stephen Kinnock (Aberavon) (Lab)]

We on the Opposition Benches have been clear that the Bill is long overdue. It has been painful to witness London becoming the world’s laundromat for dirty money with the National Crime Agency calculating that £100 billion of illicit finance flows through the UK every single year. Add to that the Government’s abject failure to properly scrutinise the issuing of golden visas to Russian oligarchs—seven now-sanctioned Russians were awarded such visas even after the invasion of Crimea in 2014—and we see a pattern emerging of Ministers failing to treat economic crime with the seriousness it deserves.

This legislation, which is finally wending its way towards the statute book five years after it was promised—and, let us face it, was only brought forward in response to Putin’s invasion—is a step in the right direction that we on these Benches support. However, it still falls short in a number of areas, as I will cover in my remarks.

14:29

[Layla Moran (Oxford West and Abingdon) (LD)]

On golden visas, I think the hon. Member will agree that the response we have had so far is unpalatable. I look forward to speaking to new clause 3, which I hope we will be able to divide on later, so that we can get to the bottom of that.

Does the hon. Member agree that the whole point of sanctions is that they are actually adhered to and that the Government do not in any way allow them and their effect to be diluted? There is the case of current Conservative party treasurer Mohamed Mansour, who owns a company called Unatrac that sells Caterpillar equipment to Russia in contravention, it would seem, of one of the sanctions we have set. Is he aware of that case, and what would he urge the Government to do about it?

[Stephen Kinnock]

I thank the hon. Lady for her intervention. The new clause on golden visas that she mentioned is spot-on, and we are very happy to support it. I am afraid there are a number of examples of the role Russian money is playing in the Conservative party, including the one she mentioned. I do think that that has acted as a constraint on the kind of action the Government could and should have been taking for many years now, and I really hope Ministers will start to wake up to that reality.

The public need to know that the Government and parliamentarians are taking this issue very seriously indeed, and I am proud of the way that Labour Front Benchers—including my hon. Friend the Member for Feltham and Heston (Seema Malhotra), who is alongside me on the Front Bench—and others have sought to work constructively with the Government to improve this legislation. Members of the Bill Committee considered the Government’s proposals in great detail during 19 sittings, covering hundreds of pages of legislation and amendments. Both the quality and the tone of the debates were of the highest standard, reflecting not just the widespread interest in these issues across the House, but the depth of knowledge and expertise in a wide range of areas. In that regard, I must pay tribute to my right hon. Friends the Members for Barking (Dame Margaret Hodge) and for Birmingham, Hodge Hill (Liam Byrne). The Committee benefited greatly from their thoughtful and well-informed contributions, which I have no doubt will be shared more widely in this debate.

It is therefore profoundly disappointing that, in Committee, there was little in the way of movement from the Government, even in areas where they struggled to find fault with our amendments and new clauses. While I welcome the constructive tone that both Ministers brought to our debates in Committee, the disappointing fact remains that every single effort by Opposition parties to strengthen the Bill met with resistance from Ministers, and every Opposition amendment pressed to a vote was defeated. As a result, the Committee stage amounted to little more than a litany of missed opportunities, forcing us to return to these arguments once again in this debate, and no doubt we will have to do so during the Bill’s remaining stages.

That point is illustrated by the first amendment on today’s selection list, Government new clause 14 on information-sharing powers. The new clause seeks to expand access to information relevant to economic crime enforcement efforts, but focuses only on the Law Society and

“any other approved regulators specified by the Lord Chancellor”.

Put simply, local authorities need these powers, too. Tackling economic crime is a huge challenge for councils due to the lack of licence they have to act on their own intelligence about crime in their local areas.

Councils want to play their part in cracking down on illicit wealth as it manifests itself in their areas. For instance, I have heard at first hand from Westminster City Council how it is battling a growing number of shop fronts—so-called American candy stores—on Oxford Street in particular, that are being used to channel illicit finance, but the process for taking meaningful action against these illegal practices is simply too slow, and as a result it is a gift to the criminals. Disappointingly, following opposition from Ministers to amendments we tabled in Committee that sought to expand powers for local authorities to enforce economic crime laws, there are still no specific provisions to enhance the ability of councils to act.

Moving on to the many important amendments tabled by Front and Back Benchers on both sides of the House, my right hon. Friend the Member for Birmingham, Hodge Hill again raises the issue of strategic lawsuits against public participation—or, as they are commonly known, SLAPPs. This has, of course, been a deeply troubling issue for a very long time. SLAPPs are defined as

“a recognisable and pernicious form of litigation which seeks to silence, intimidate, and harass opponents”,

and they

“are designed to silence criticism and investigation conducted in the public interest.”

Those are not my words, but the Government’s own definition. Others refer to this practice as lawfare.

We have in the past seen this practice used by the lawyers of Russian oligarchs against investigative journalists seeking to uncover corruption, but we now know that these tactics have also been used by not one, but two Conservative party chairmen in recent years. In March 2019, I wrote to the right hon. Member for Great Yarmouth (Brandon Lewis) when he was chair of the Conservative party with my concerns regarding the origins of a £1.8 million donation from Ehud Sheleg, who was then the treasurer of the Conservative party, to the Conservative party. I was sent a reply by the right hon. Member threatening to sue me for libel. He might even have got away with it had one of Mr Sheleg’s donations not later been flagged by Barclays bank to the National Crime Agency because, in its view, it originated not from Mr Sheleg’s bank account, but from the bank account of his father-in-law, a former pro-Putin Russian politician. That is lawfare in action.

But there is more—this time from representatives of the current Conservative chair. Members may have heard his name, as he has been in the news quite a bit recently. In July 2022, Dan Neidle, a former head of tax at Clifford Chance who now runs Tax Policy Associates, accused the then Chancellor of the Exchequer of providing unsatisfactory answers about his tax affairs. What happened next? Mr Neidle received a letter from the law firm Osborne Clarke, representing the right hon. Member for Stratford-on-Avon (Nadhim Zahawi), demanding that he withdraw his claims. That was a truly audacious approach and move, one might say, given what we now know about the former Chancellor’s tax returns. The bottom line is that we have a Government who claim to be committed to tackling SLAPPs, while Ministers are actively using the practice to their own benefit. It is little wonder that legislative progress has been somewhat sluggish, and that the speed of action on the part of the Government does not reflect the urgency and gravity of the issue.

New clauses 1 and 2, in the name of my right hon. Friend the Member for Birmingham, Hodge Hill, would provide a much-needed shot in the arm to efforts to resolve the endemic use of SLAPPs in British courtrooms. New clause 21, tabled by my right hon. Friend the Member for Barking with cross-party support, addresses the related issue of costs orders, which clearly form part of the legal architecture that is all too easily exploited by criminals to exert a chilling effect on critics and journalists reporting in the public interest. New clause 7, tabled by the hon. Member for Cheadle (Mary Robinson), would incorporate much-needed protections for whistleblowers into the Bill. All of those Back-Bench amendments have the wholehearted 100% support of the Opposition.

After months of consultation on SLAPPs, the Ministry of Justice published a response, which confirmed that

“the Government intends to pursue legislative reform at the earliest opportunity.”

That was back in July last year. If there has been any meaningful progress since that time, it has not been apparent to me, to my right hon. and hon. Friends or to any other Members who have signed these new clauses, so I ask the Minister: how much longer will it take for the Government to act decisively on this issue?

In new clause 3, as has been mentioned, the hon. Member for Oxford West and Abingdon (Layla Moran) raises the important issue of the tier 1 investor—or golden visa—scheme, which was closed down last year amid much ignominy arising from its extensive use by Russian oligarchs and other kleptocrats. In April last year, I wrote to the then Home Secretary to call for the publication of the Government’s internal review of the scheme without delay. In that letter I said:

“It is simply not enough that the scheme is now closed and a small number of oligarchs sanctioned; politicians and the public alike must be able to understand the findings of the report and learn the lessons.”

Here we are more than nine months later, and that argument still holds true. It is deeply regrettable that the Home Secretary is refusing to publish the report in full.

New clauses 4, 5 and 6 on corporate criminal liability point to another of the Government’s missed opportunities. There is a well-established and proud tradition of groundbreaking UK law on holding company executives to account for misdeeds committed in their names, or in the names of corporations they are responsible for running. A precedent was set by the Bribery Act 2010, which was passed by the last Labour Government. The Government built on that example in the Criminal Finances Act 2017 by introducing new corporate criminal offences related to failures to prevent the facilitation of tax evasion both in the UK and overseas. Extending those “failure to prevent” offences to a wider range of economic crimes is the logical and natural next step. New clause 40 provides a starting point for reforming the law in that area, and would require the Secretary of State to publish a report, setting out the various options by which a new offence might be introduced. New clauses 4 to 6 would go further still, by taking forward specific proposals within the Bill. The Opposition are more than happy to support those measures, and I pay tribute to the right hon. and learned Member for South Swindon (Sir Robert Buckland) and the hon. Member for Bromley and Chislehurst (Sir Robert Neill) for their leadership on this important issue.

Even as we support these reforms, it is important to remind ourselves that new laws will not necessarily be game changers in themselves. These laws, like any others, will be only as useful as the willingness and ability of this or any future Government to enforce them. Legislation without implementation is not worth the paper it is written on—[Interruption.] The Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Thirsk and Malton (Kevin Hollinrake) is nodding, because we heard that from him frequently in Committee.

[John Penrose (Weston-super-Mare) (Con)]

I thank the shadow Minister for giving way—I have an enormous amount of time for an awful lot of what he does and says. I want to challenge him a little on whether these potential changes about the duty to prevent might be more effective and game changing than he is describing, because not only should they reduce the burden of criminality, which is reducing our economic performance and our productivity as a nation, but they could be quite deregulatory. They sweep away a raft of largely ineffective and deeply costly measures, and replace them with something that is simpler and easier to comply with, but more effective at the same time.

[Stephen Kinnock]

The hon. Gentleman speaks with great knowledge on this issue, and he is right that we need a streamlined, simple approach that clearly places responsibility and liability where they need to be. That is smart regulation. Over-complicating regulation is precisely where the lawyers, fixers and those who so often facilitate this illicit activity find their niche, and how they exploit it is their leverage. Let us make this a game-changing Bill, along the lines that he suggests, and let us hope that the Government’s scale of ambition matches his and that of other hon. Members across the Chamber.

As far as the record of this Government goes, the evidence is hardly encouraging, with just 168 prosecutions and five convictions brought against companies by the Serious Fraud Office between 2016 and 2021, and increasing reliance on US-style deferred prosecution agreements that fall well short of providing full accountability for corporate criminal behaviour. I pay tribute to the work of my right hon. Friend the Member for Islington South and Finsbury (Emily Thornberry), who has set out detailed plans to reverse the SFO’s loss of senior staff and expertise, transform the agency’s approach to prosecutions, and allow more of the proceeds of successful cases to be retained by the SFO, as part of a renewed crackdown on corporate malfeasance under the next Labour Government. Labour’s blueprint is there, and Labour Members would be delighted to see the Government adopt it when addressing this issue.

Other new clauses tabled by Back-Bench Members address additional areas that the Government could and should address, but that unfortunately they have not addressed in the Bill. New clause 23, tabled by the hon. Member for Huntingdon (Mr Djanogly) is one example. Its call for a review of the need for further regulations

“to prevent the circulation in the UK economy of the proceeds of economic crime controlled by individuals or entities subject to sanctions”

is welcome, as is new clause 25, tabled by the right hon. Member for Stevenage (Stephen McPartland). If I were to raise any slight criticism, it would be that the new clauses fall a little short of what is needed, but Labour supports them nevertheless. Specifically, both new clauses fail to mention the enormous and central role that is played not just by the UK, but by individual Crown dependencies and overseas territories in enabling—and all too often actively facilitating—global flows of illicit finance, and the ill-gotten assets of kleptocrats and crooks.

14:45

That issue was addressed in yesterday’s debate by the Opposition in new clause 26 on beneficial ownership registries. The fact that we are still dealing with local administrations in overseas territories that are dragging their feet on the introduction of these registers, while the Government look on in apparent admiration of their supposedly sincere efforts, is deeply frustrating. Labour Members will keep pressing the Government to take the action that we all know is necessary and long overdue.

The other point worth making about reporting requirements of the kind envisaged by new clauses 23, 25, 30, 32, and 39 is that they sometimes amount to asking Ministers to mark their own homework. We should not have to rely on the willingness of future Ministers and Secretaries of State to provide an impartial, balanced view of their own record. For that reason, the Opposition’s new clause 33 calls for the establishment of a joint parliamentary committee on economic crime. The Intelligence and Security Committee provides a useful model, with its special powers to review sensitive or otherwise confidential material, and that is worth the serious consideration of Ministers.

Perhaps the most gaping hole in the Bill, at least in its current form, is the total omission of any measures to provide support and redress for victims of economic crime. To say that that is a missed opportunity understates the issue. Given the scale on which such measures are needed, and the overwhelming weight of evidence about the need for new measures, that gap in the Bill is baffling. The Opposition’s new clause 27 represents the first of many steps that the Government ought to take as a matter of urgency to fill those gaps. It calls for a strategy to be published, setting out a range of specific policies to improve access to justice for victims of economic criminals, both in the UK and internationally.

[Liam Byrne]

I am grateful to my hon. Friend for making such a brilliant speech. Among the greatest victims of economic crime right now are the people of Ukraine. One virtue of his own proposal and the amendment tabled by the hon. Member for Huntingdon (Mr Djanogly) is that they propose a shift not just to freezing assets, but to seizing assets and recycling them into the reconstruction of Ukraine. Surely we should legislate for that work now and crack on with it forthwith.

[Stephen Kinnock]

As always, I agree absolutely with my right hon. Friend’s views on the matter. That cannot be beyond the wit of this place or the Government. I know there are legal complications around property and international law, but those are not insuperable. We cannot allow them to be insuperable because, with every day that passes, the people of Ukraine are suffering, and the barbaric acts of Vladimir Putin and his regime are not being held to account in a way that would contribute to the massive reconstruction effort that will be required for Ukraine. It is absolutely right that the person guilty of the crime should pay for the crime and that has to be the fundamental basis of our approach. We need urgency on this in the G20, the G7, and the United Nations. We need Ministers to get a grip of this issue so that we can do justice and deliver for the people of Ukraine, which we must do with great urgency.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kevin Hollinrake)]

New clause 27 is interesting. It is about setting up a fund for compensation of victims of economic crime. We have heard estimates that economic crime costs UK citizens £200 billion to £300 billion a year. How much will this cost and who will pay for it?

[Stephen Kinnock]

The Minister tempts me to write Labour’s manifesto right here at the Dispatch Box. It is an issue of principle: how will we ensure that victims of economic crime are compensated? Clearly, we cannot finalise in the Chamber today the quantum of that amount, but we did raise that in Committee and are open to discussing it with the Government. We hope that they will be open to having that discussion in the fullness of time.

[Kevin Hollinrake]

Will the hon. Member confirm that he is expecting the taxpayer to contribute to the fund? Is that what the new clause would effectively lead to?

[Stephen Kinnock]

No. This is based on a fund that is generated through fines and through accountability for those committing the crimes. It is along the lines of what I said about Ukraine: the people who commit the crime, rather than the victims, should be paying for the crime. How will we address that question now? If the Government think that the current system is absolutely fine and that there is justice and equity in the system, the Minister should come to the Dispatch Box and say that. However, if he thinks that there is a clear, principled and moral argument in favour of ensuring that the people who commit a crime should be made to pay for it, and that that should contribute to the compensation, we can have that conversation.

[Liam Byrne]

Is my hon. Friend scandalised as I am that at the moment only 40% of fines from economic criminals are recycled back into the business of tackling economic crime, whereas in the United States it is 100%?

[Stephen Kinnock]

That is precisely the point. There is an opportunity to generate revenue that could be deployed to address the causes of the problem. It is a win-win. We have criminals. We need to crack down on those criminals. We need to ensure that the agencies are given the resources to do that. It is the criminals who should be paying for that process. That seems logical to me.

[Dame Margaret Hodge]

Further to that point, does my hon. Friend agree, and I hope that the Government agree, that if they were more assertive in pursuing the people who enable economic crime and those who commit economic crime, more fines could be generated, which they could ringfence for a fund to be used in part to compensate victims of crime? It need not be a burden on the taxpayer and it could be a just way of ensuring that the victims of economic crime do not suffer inappropriately.

[Stephen Kinnock]

Again, my right hon. Friend has hit the nail on the head. We need a war chest and that should be built up on the basis of moneys paid by criminals. That war chest should also be looked at and used, where possible, to support the compensation of innocent victims of economic crime. The new clause is a two-pronged attack on the issue. The opportunity is there because the better we get at going after these criminals, the more we will have coming into the war chest.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

I am convinced by my hon. Friend’s argument, but one thing worries me. Having the resources would be good, but having the determination to deliver on the policy is more important. I have had a long-running campaign over the years to improve the efficacy of the Serious Fraud Office. We need a fundamental change in our attitude to how we deliver these policies.

[Stephen Kinnock]

My hon. Friend is absolutely right. As I mentioned earlier, my right hon. Friend the Member for Islington South and Finsbury has set out a clear and detailed blueprint for how we need to boost the institutional capacity, human resources capacity, financial capacity and firepower of the SFO. The blueprint is right there. I very much hope that the Government will look at it and perhaps even adopt it. Of course, if they do not, we will soon have a Labour Government who will.

The Opposition’s new clauses on victims intend to go much further than victims of economic crime in the UK alone. It is our hope—in government, it will be our intention—to work with our allies and partners internationally to provide robust mechanisms for the seizure of proceeds of corruption, kleptocracy and other crimes under international law, and to use such assets to provide funds for the reconstruction and other forms of financial redress to victims—in Ukraine, for instance—of the criminal acts of dictators such as Vladimir Putin.

For months, we have had nothing but warm words from the Government on such proposals. We know that there have been international discussions, including with our G7 partners and our allies in Ukraine, but we need more than warm words and vague promises of jam tomorrow. While Ministers stall on this issue, we are increasingly at risk of being left behind by our allies in the US, Canada and elsewhere, who are already taking the actions that we want to see in the UK. New clause 27 would therefore direct the Secretary of State to publish a strategy for using the proceeds of crime to compensate victims, and to do so within 90 days of the Bill receiving Royal Assent.

We welcome the Bill, but it is a great shame that the Government are failing to take more substantive action in the crucial areas that I mentioned. The Bill is a step in the right direction, but, as it stands, it lacks ambition and is therefore a missed opportunity. I hope that Conservative Members will support our amendments today, so that we can finally begin to clean up our country’s reputation as the go-to destination for dictators, oligarchs, kleptocrats and gangsters, and for their dirty money.

[Sir Robert Buckland (South Swindon) (Con)]

I draw hon. Members’ attention to my entry in the Register of Members’ Financial Interests.

This issue has been a concern of mine not just for months but for many years. Anybody who has even a passing acquaintance with the issue at hand will know that its history is somewhat tortuous. A series of options were set out comprehensively in a Law Commission report published in June last year, which I commend to hon. Members. However, there is much that predates that. Indeed, much that has happened in the last few months in this place—in both Houses—reinforces the thrust of the argument that I seek to advance by way of new clauses 4 to 6, which stand in my name and those of many other right hon. and hon. Members, from all parties in the House, to whom I am extremely grateful.

In 2015, my party’s manifesto rightly committed the Government to make it illegal for companies to fail to put in place measures to prevent economic crime. It would be unfair to say that nothing happened. We had the Criminal Finances Act 2017, which created a new offence of failing to prevent tax evasion. That was a development on the failing to prevent bribery offence contrary to section 7 of the Bribery Act 2010, which opened the door to the development of the principle across a range of criminality in this space.

Subsequent to that, the Ministry of Justice launched a call for evidence in early 2017 on corporate liability reform for economic crime. However, it is right to say that progress on that was exceedingly slow. It was not until November 2020, when I was serving as Secretary of State, that it was agreed across Government that the Law Commission would be given the task of examining the issue and producing a report. It was right to acknowledge at that stage that there were a number of potential models that could be deployed here, and it was important for an independent body such as the Law Commission to look at different jurisdictions, as of course it did. It looked in particular at the United States, Canada and Australia: common law jurisdictions that have long been wrestling with the same challenges that we face. To differing effect, they have brought in and deployed their own particular regimes. More on that slightly later.

What is clear is that there is very much consensus in this place on the need for reform of corporate criminal liability. The Treasury Committee’s report of February last year urged the Government

“to act quickly in bringing forward any legislation flowing from the Law Commission’s review.”

In June, the Foreign Affairs Committee talked about

“reform of outdated and ineffective corporate criminal liability laws”,

and, in October, the Justice Committee spoke in similar terms. Finally, a report from the House of Lords Fraud Act 2006 and Digital Fraud Committee in November said:

“Reform of corporate criminal liability will be essential in order to maximise the impact of the Fraud Act and other legal tools going forward…to hold corporates across all sectors to account and to inspire behaviour change.”

15:00

I am grateful to the hon. Member for Aberavon (Stephen Kinnock) for his kind words about me, and I have read new clause 40. I say gently to the Labour party that we do not need six months for a further discussion of this issue. We have a wealth of documentation, which is spread around me on the Bench, including the Law Commission report—I have it here because I believe in primary sources and I am trying to be faithful to it—which comes to the view that the Government should pursue options to create further offences of failing to prevent. Page 119 states:

“any decision to introduce new ‘failure to prevent’ offences needs to be considered alongside the issue of retention or reform of the identification doctrine.”

That relates to new clause 5, which I will speak to shortly. The report goes on to say:

“If the identification doctrine is retained as at present, the case for new failure to prevent offences, is inevitably more compelling. We therefore consider that ‘failure to prevent’ offences are an option for reform, but note that the evaluation of this option must take place alongside the evaluation of the options for reforming the identification doctrine.”

I will now direct my remarks to my right hon. Friend the Minister for Security. The Government were given that challenge back in June, and I strongly submit that it is vital that they rise to it and deal with the identification doctrine in the Bill. That could deal not just with the offences I mentioned in my proposal, which I have been very specific about, but has wider ramifications for other aspects of criminal liability. It is highly germane to new offences under the online harms Bill that is going through Parliament at the moment.

I have not sought to be overly ambitious in my proposal. I have confined it to offences that can be described under the genus of economic crime. I have tried not to use such terms in legislation, because I readily accept, as the Law Commission said, that the definition of economic crime is somewhat broad—hazy, perhaps—and does not descend to the detail of existing criminal offences, be they offences under the Fraud Act 2006; the offence of false accounting, which is a well-known offence under the Theft Act 1968; or the offence of money laundering, introduced by the Proceeds of Crime Act 2002. I have therefore resisted the temptation to be too vague.

I commend the Government’s economic crime action plan of 2021, which I think I helped sign off. Rightly, the action plan describes economic crime as a

“broad category of activity involving money, finance or assets, the purpose of which is to unlawfully obtain a profit or advantage for the perpetrator or cause loss to others.”

It is important that we put this in context and look at what the action plan is saying. It goes on:

“This poses a threat to the UK’s economy and its institutions and causes serious harm to society and individuals.”

I strongly agree. There is no such thing in this sphere as a victimless crime. We are all the victims of this behaviour, whether we are investors, consumers or taxpayers. Everybody is diminished as a result of such behaviour. It damages and undermines the reputation of our country.

[Liam Byrne]

The right hon. and learned Member is making a brilliant speech, and the proposals he is stewarding are incredibly important. Did he hear the independent reviewer of terrorism legislation’s evidence to the Bill Committee, when he said very clearly that economic crime is a national security issue? That is exactly the argument the Minister for Security made when he was Chair of the Foreign Affairs Committee—[Interruption.] I am told he still makes that argument today. That underlines why the right hon. and learned Member’s proposals are so important, not least because we have become the country of choice for corporate structures set up to launder billions of illegal money.

[Sir Robert Buckland]

I am grateful to the right hon. Gentleman. Jonathan Hall, the independent reviewer of terrorism legislation, was absolutely right. Indeed, his evidence echoed the Government’s own statement in pursuance of the action plan. The action plan says that it covers criminal activity that

“poses a risk to the UK’s prosperity, national security and reputation.”

That is the point. The policy direction the Government have adopted in recent legislation—most notably in legislation to protect industry from takeovers from parts of the world that we regard as a potential threat to this country—increasingly includes economic security as part of the wider national security agenda, and that is absolutely right.

This debate is happening in the context of a world where the old order is changing and giving way to forces that we cannot control and that we should rightly be suspicious about. Therefore, although we want a vigorous, lively, free market economy in this country, we need to be ever more vigilant about ensuring that its boundaries are policed effectively. I will say more about the prosecution of these offences, because it is, shall we say, a vexed question, and there are right hon. and hon. Members here who have direct experience from their work of the evidential challenges that prosecutors face day in, day out.

I do not want the Government to adopt new criminal offences only to find that their use becomes sporadic or ineffective. However, the offences I propose help to further drive a culture of compliance and lawfulness where corporates behave responsibly. There are examples of previous legislation that we can point to that have driven that culture forward positively. I think of the Health and Safety at Work etc. Act 1974, which the Under-Secretary of State has used as an example, and he was absolutely right to do so. As a result of the passage of that legislation, we saw a dramatic drop in the number of industrial accidents. Why? Because employers were enjoined to take the issue damn seriously. If they did not, there would be liability at the end of it.

[Mr Djanogly]

Has my right hon. and learned Friend also considered the Bribery Act, where a similar set of procedures was forced on corporates, with dramatic results?

[Sir Robert Buckland]

My hon. Friend is absolutely right. Of course, he was a Minister in the Ministry of Justice when the Bribery Act was brought into force at the end of the 2005 Parliament, and he has direct experience of this issue. He is absolutely right that the Bribery Act has been of huge value. In fact, under the regime of deferred prosecution agreements that the Government brought in in the early part of the last decade, of the 11 DPAs that have been made by the Serious Fraud Office with corporates, nine were for “failure to prevent offences”—failure to prevent bribery—and just three were for the offence of fraud. That accounts for 90% of the £1.7 billion in revenue that the SFO has brought in through DPAs. It is clear that that has been an important step change in the way we deal with wrongdoing or indeed the threat of wrongdoing.

For people who think this is some sort of academic exercise, I draw their attention to the LIBOR scandal and the forex rate rigging scenario. There was no bringing to account of anyone involved—there was impunity. That is not good for the rule of law or the economic wellbeing of this country.If we want people to invest in the United Kingdom—we do and we have excelled in direct foreign investment over generations—then they need to have the confidence that if there is a problem, there is redress of grievance, accountability and a way of recouping the loss or making sure their investment is safe. That is what I believe the new clauses go to.

We have been careful in the test we wish to apply to the “failure to prevent” offences that form the subject of new clauses 4 and 6. It was tempting to follow the recommendation in the report by the House of Lords’ Fraud Act 2006 and Digital Fraud Committee, chaired by my noble Friend Baroness Morgan of Cotes, to apply the wider test contained within the Criminal Finances Act 2017 relating to failing to prevent tax evasion. That would not require an intention by the corporate or the individual to confer a benefit on the company or a benefit on a person to whom the suspect—the defendant— is providing services on behalf of the company. I have sought not to go that far, but to replicate the Bribery Act test, which is the intention to confer a benefit. It is important that when we seek to draft legislation, we are as mindful as possible of not widening it to an extent that could in many ways create further unfairness. We have an obligation to ensure that balance is maintained.

I have set out three separate offences in the provisions: fraud, money laundering and false accounting. I think fraud and false accounting are probably self-explanatory, but the Government might have a bit of a question about money laundering. They might be thinking about the 2017 money laundering regulations, and regulation 92 in particular, where there is already a corporate offence where, with the consent or connivance of an officer of the company, an offence is committed or an offence is attributable to neglect on their part. What I would say gently to the Minister is that I do not think that cuts it. It still leaves significant evidential and prosecutorial challenges. The Financial Conduct Authority has, I think, used it vanishingly rarely. Therefore, I urge him very strongly to look carefully—I hope he will accept the thrust of my argument, even if he cannot accept the detail of my new clauses today—at bringing forward provision that covers money laundering as well as fraud. That would be my strong exhortation to him today.

[Dame Margaret Hodge]

I want to add to the excellent speech that the right hon. and learned Gentleman is making and to thank him for it. In the Barclays case, there was an attempt to prosecute both Barclays bank and individual directors of Barclays bank. There was an unsuccessful appeal against Mr Justice Jay’s decision, in which the SFO argued that the dual rulings would allow directors to “insulate themselves from liability” and make such alleged offences “impossible to prosecute”. Later, Ms Osofsky, who runs the SFO, said she felt herself completely hamstrung by the directing mind principle. She told parliamentarians in evidence that

“I can go after main street but I can’t go after Wall Street.”

In other words, she could prosecute small companies, but not corporates with layers of control.

[Sir Robert Buckland]

The right hon. Lady leads me to the thrust of my argument on new clause 5, which is the identification doctrine itself. She deals with the precise point of the doctrine. In the Barclays case, Mr Justice Jay at first instance was widely seen as having defined it by a narrow interpretation—I do not criticise the learned trial judge, but many people saw it that way—but the decision was upheld on appeal. With a real-life set of facts, a trial judge made a ruling that had quite important consequences for the law.

15:15

But this issue is not new. The principle was set out in the Tesco Supermarkets Ltd. v. Nattrass case 50 years ago. The directing mind and will principle, which is how it was described in the Tesco case, now needs to be revisited. That is why I have sought, in new clause 5, to look carefully at options 2A and 2B in the Law Commission report. In particular, in the wording of the new clause we have sought to look at other types of liability, most notably the 2007 corporate manslaughter provisions, to ensure that we are faithfully replicating what is already an established principle in statute. I do not seek, through new clause 5, to suggest that there need be a choice for the Government, so that if the Government reform the identification principle the need for “failure to prevent” offences falls away. The two should go hand in hand. Perhaps I depart slightly there from where the Law Commission placed its emphasis in its report.

As the right hon. Member for Barking (Dame Margaret Hodge) says, it is a pretty rum situation when the public prosecutorial authorities of England and Wales are telling us repeatedly that there is a problem with the identification doctrine. Indeed, as she said the current director of the SFO put it in very eloquent American terms. Sir David Green, the former director of the SFO, has said on many occasions that, particularly given the sometimes byzantine structures of very large corporates, he views the concept of directing mind and will as somewhat confusing and very difficult to understand, let alone to present to a jury. I therefore think that the time is now for reform of that identification principle.

There is some concern that a change in the identification doctrine in criminal law could potentially go on to have effects across the piece and create some contradictions with civil law itself. The Law Commission addressed that point. It took that view that changing the basis of criminal liability in those terms would not have extensive consequences for civil law. I will set out why it said that, because it is important and no doubt Government officials will be giving it some consideration.

[John Penrose]

I congratulate my right hon. and learned Friend on making a powerful speech in favour of his new clauses, several of which I have signed. Before he moves on, may I press him on the point about this being a slightly rum affair? I think that was the phrase he just used. It is rum because we have two options set out by the Law Commission—as well as many other analyses—neither of which are being taken into the Bill. There are two good options, and they are being completely ignored. Also, at least one of the two Ministers on the Front Bench has repeatedly—and rightly, in my view and that of many other people—been a dedicated advocate of precisely the ideas my right hon. and learned Friend is putting forward in his new clauses, yet they are still not in the Bill. How much more rum can it get?

[Sir Robert Buckland]

I was going to spare the blushes of the Minister for Security, my right hon. Friend the Member for Tonbridge and Malling (Tom Tugendhat) and the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), but my hon. Friend has said it for me, and he is right. They know that what I am saying does not just have force, but that they agree with it. That will no doubt carry great weight—

[Tom Tugendhat]

Will my right hon. and learned Friend give way?

[Sir Robert Buckland]

Of course.

[Tom Tugendhat]

What I am enormously enjoying in this Session is the way in which Bills are being picked up and put down by different Ministers. When they are on the Front Bench, they do one thing; when they are on the Back Benches, they say another—sadly, that is the nature of our current political system. It is taking a little while, I admit, for many of us to realise quite how long it can take to get things through in government. Those who have been in government for many years are sharing their knowledge very generously.

[Sir Robert Buckland]

Well, my right hon. Friend must speak for himself. I will tell the House a story: I remember when the present Secretary of State for Defence, my right hon. Friend the Member for Wyre and Preston North (Mr Wallace), held the office of Minister for Security, which my right hon. Friend the Member for Tonbridge and Malling now enjoys. We used to have cross-governmental committee meetings—this was during the Government of my right hon. Friend the Member for Maidenhead (Mrs May)—and I remember having a very fierce argument with a very senior permanent secretary at the Treasury about this very issue. I will not name them, because that would be wrong, but they told me that there was concern about the proliferation of criminal offences in this area because somehow it would add more of a regulatory burden to business. I disagreed hotly with that civil servant then, and I disagree hotly now.

The Minister for Security now has a great opportunity. It is a great privilege as a Minister to get on with a job that others would have wished to finish. We have passed the parcel to him, and he can open it and enjoy the gifts within.

[John Penrose]

My right hon. and learned Friend is being very generous with his time. May I say very gently that the anecdote that he told just now and the intervention that the Minister for Security has just made both come under the category of explanations, rather than justifications, for where we now find ourselves? The Bill is here, now. What has been said explains why we are here, but they do not justify why this stuff is not in the Bill.

[Sir Robert Buckland]

Well, I am trying to be the diplomat and the reasonable interlocutor here. My hon. Friend is playing the bad cop with the Minister, and I am trying to play the good cop. I know that the Minister will eventually yield to that persistent approach; I hope that it will be done in a way that is neither oppressive nor unreliable.

[Liam Byrne]

I am incredibly grateful to the right hon. and learned Gentleman for his generosity in giving way. We appear to have an overload of rumness here.

[Stephen Kinnock]

Gallons of rum.

[Liam Byrne]

Yes. It is unusual for unity to break out on both sides of the House and on the Front and Back Benches. Given that ubiquity of unity, what, in the right hon. and learned Gentleman’s analysis, is the problem that is preventing these proposals from becoming the law of the land?

[Sir Robert Buckland]

I think that there are two things: time and capacity. I do not criticise officials. I have never believed in doing so: it is a bad Minister who blames their officials, just as a bad workman blames his tools. Officials have a lot of work to do under immense pressure, and obviously they want to get it right. I want to get it right, too—we all do—but the Bill might be our last chance to do so in this Parliament. My goodness me, if we cannot get it right here, the Government are really going to have to get it right in the other place.

Let me deal further with the identification doctrine. Opposition new clause 40, which is very well worded, alludes to the US concept of respondeat superior. In effect, it is a wrap-all approach to vicarious liability that captures the acts or omissions of even very junior members of a corporate, which can lead to that corporate being liable. In some ways that has proved advantageous to prosecutors in the US: they have been able to identify more junior officials in corporates and, in effect, get them to co-operate with the authorities, which has opened up evidence that might not otherwise have been available.

The Law Commission looked at that approach. It also looked at what I might call the corporate culture approach in Australian Commonwealth law, and at Canadian legislation on the acts and mental states of senior managers. The Law Commission said—rightly, I think—that neither the US approach nor the Australian approach would be right for our jurisdiction.

The wording of my new clause 5 reflects the Law Commission’s recommendations in two ways. First, as the Law Commission’s report sets out, it would allow conduct to be

“attributed to a corporation if a member of its senior management engaged in, consented to or connived in the offence.”

Senior management is defined as

“any person who plays a significant role in the making of decisions about how the whole or a substantial part of the organisation’s activities are to be managed or organised, or the actual managing or organising of the whole or a substantial part of those activities.”

We have taken the Canadian approach.

[Sir Geoffrey Cox (Torridge and West Devon) (Con)]

I draw the House’s attention to my entry in the Register of Members’ Financial Interests.

I am intrigued by and have a great deal of sympathy with my right hon. and learned Friend’s amendments. As he knows, we discussed the issue when we served as Law Officers together. In the light of the Law Commission recommendation from which he has just quoted, I wonder why his new clause 5 includes the

“neglect of a senior manager.”

It seems conceptually a rather odd proposition that a fraud could be committed by neglect. The Law Commission did not go that far. Why has my right hon. and learned Friend included that provision?

[Sir Robert Buckland]

That is a fair question. What I seek is to tease out from the Government the juxtaposition with the money laundering regulations. My right hon. and learned Friend will remember my making mention of regulation 92 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, which uses the word “neglect”. To be frank, I think that there is a problem with that, but it is important for us to tease out from Ministers a way to find a wording that is comprehensive.

[Sir Geoffrey Cox]

I have enormous sympathy with my right hon. and learned Friend, who is doing the House a service by bringing these amendments to its and the Government’s attention. However, is it not reasonable—Opposition new clause 40 has this purpose in mind as well—that there should be quite a detailed consultation within the financial services industry and among any other commercial organisations that might be affected? New clause 5’s use of the word “neglect” creates an extraordinarily broad possibility for the application of the criminal offence.

I know what my right hon. and learned Friend is doing, and I applaud it. However, it seems to me that it is reasonable to require of the Government that they get it right, but, as the right hon. Member for Birmingham, Hodge Hill (Liam Byrne) said, that must not become an excuse simply to say “mañana” and kick this into the long grass.

[Sir Robert Buckland]

I am always grateful to my right hon. and learned Friend; I greatly enjoyed our time working together as Law Officers, and I yield to no one in my respect for him. He is right to make that point. I think I couched my remarks in a way that was faithful to the Law Commission’s options, which say that the Government do not necessarily have to do it all—there is a choice here, potentially. On a wider basis, I think that the identification doctrine needs to be looked at. There could be an opportunity for further refinement, perhaps in the other place, and for provision to be made that refers specifically to the offences that I list in new clause 5.

Let me take my right hon. and learned Friend’s point in the spirit in which he made it, and build on it. New clause 5 includes the specification in Law Commission’s option 2B that an

“organisation’s chief executive officer and chief financial officer would always be considered to be members of its senior management.”

We have sought to be faithful to option 2B.

[Dame Margaret Hodge]

I am sorry to interrupt the right hon. and learned Gentleman’s excellent speech again, but does he share my view that we are past the stage of consultation? There has been a lot of consultation on the issue, from 2015 to 2017 and up until the Law Commission’s proposals in 2022. Choices now have to be made. The opportunity must be grasped to legislate on this issue, on which there is such wide consensus and such strong feelings.

[Sir Robert Buckland]

If not now, when? I entirely agree.

I had not quite finished outlining the Law Commission’s point correctly refuting, or at least addressing, the perception of any problems with a knock-on effect on civil law liability. It sets out the case very well, giving two basic reasons why it does not think that there will be extensive consequences.

First, the Law Commission rightly says that in civil law, vicarious liability or liability for negligence will very often apply to civil disputes between companies and third parties even if the identification doctrine test threshold is not met, so those very important parts of civil liability will not be undermined.

15:30

Secondly, many civil cases in which the identification doctrine is invoked involve matters of liability existing between culpable directors—usually people who have gone—and those now running the company. Culpable directors often try to invoke the doctrine of illegality to try to seek some form of immunity or to resist any liability. That is usually dealt with under the doctrine that if someone has behaved fraudulently they cannot use that as a means of evading liability. That is right. We should not baulk, therefore, at addressing this issue head on.

In new clause 6, I seek to introduce new concepts of “failure to prevent” an individual liability. It is important that we make sure that when corporates are prosecuted it does not become a binary choice. Prosecutors should not seek to focus exclusively on the corporate at the expense of bringing individuals to book. I am afraid we have seen numerous examples in recent years of individuals who have escaped with impunity, rather than being held to account for their wrongdoing. I repeat all the arguments I have made about the international reputation of this jurisdiction, which is so important for our economy. Nothing under the sun is totally new: the language in new clause 6 is taken from section 36 of the Financial Services (Banking Reform) Act 2013, and we have taken the definitions of an “officer” in a corporate from the Online Harms Bill—that Bill keeps popping up in ways that people may not expect.

All these issues are inextricably linked. Let us view this issue not as some arcane question of criminal liability, but as a reputational issue, an economic issue, a security issue and an issue that matters for the future life and health of our society. If we are to make this work, it is essential that we give prosecutors the tools that they need to do the job. I have long been a supporter of the Roskill model, the Serious Fraud Office and the way that it has sought to prosecute crimes, but I am worried that the current structures do not allow us to put the focus on fraud that we need to maintain and enhance. Gone are the days, when I was not even a young barrister but still a law student—I am much younger than perhaps I look—of the big corporate prosecutions in the 1980s that occupied suites of rooms in Chichester Rents. In those days we made a virtue of going after the big boys and girls and making sure that they were brought to book. That seems to have gone out of fashion, and I do not think that is a good thing. Things are slipping through the cracks, whether it be what might be regarded as minor fraud or even major fraud: we are not giving them the seriousness they deserve.

We need to look again at the architecture of the prosecution of fraud. Indeed, Clare Montgomery KC spoke eloquently about this in the media the other day. She is a very experienced and senior prosecutor. I am where she is: after many years of thinking that the SFO was the right model, I am no longer so sure. We need to start a proper and mature debate about the mechanism and framework for prosecution in England and Wales. That is why the idea of a Committee commends itself to me and, I hope, to right hon. and hon. Members. A Joint Committee of both Houses considering this in proper time might produce a mature set of recommendations that could lead to an improvement in the practice of these measures. The House is littered with good intentions. We pass legislation with the best will every year, but we are constantly disappointed when it is not utilised properly. It is our responsibility as legislators to make sure that those who are given the job of carrying out legislation are able to do so in a way that restores our public reputation.

My exhortation is twofold: if the Government cannot accept the amendments, they should bring measures forward in the other place to make sure that the thrust of this reform will happen, and for the Government to work with me and other right hon. and hon. Members to help us improve the way in which we deal with the prosecution of fraud in this jurisdiction.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the SNP spokesperson.

[Alison Thewliss (Glasgow Central) (SNP)]

It is a pleasure to follow the expertise of the right hon. and learned Member for South Swindon (Sir Robert Buckland), who outlined in great detail the significance and importance of the new clauses. Yet again, the House has the opportunity to get it right, and to get it right now, today, rather than at some point or when parliamentary time allows or after consultation or in due course. Why not do it today?

I have heard no arguments from Ministers in Committee, on Second Reading or here this afternoon to excuse why it cannot be done today, now, with the new clauses that have been so diligently and expertly proposed by right hon. and hon. Members. As I said yesterday, these are cross-party new clauses. They are the most widely supported new clauses I have seen, and there is no reason why the Government cannot accept not only the proposals from this side of the House but the diligent work of their own Back Benchers on the new clauses. It makes absolute sense.

I support the Government amendments before us, both the correcting ones and those that allow Scottish Ministers and their responsibilities to be added to the Bill. It is good that they have been brought forward now, although I am slightly wary that that happened at such a late stage and that the problem had been missed. Regardless, I am happy to see them today. I also support the amendments on information sharing between agencies, which make sense.

I am, however, concerned that the Government will not accept the “failure to prevent” amendment. As I said in Committee, when the hon. Member for Thirsk and Malton (Kevin Hollinrake) was a Back Bencher he was very supportive of the “failure to prevent” provisions, right up until 13 October 2022, when he said:

“Of all the measures we have talked about today, this would have the biggest effect in terms of cutting down on economic crime, because lots of our financial organisations are complicit when it suits their interests to be so.”—[Official Report, 13 October 2022; Vol. 720, c. 310.]

There is nothing in the Bill that would change that situation, but the new clause would. As I pointed out in Committee, now he is not just the hon. Member for Thirsk and Malton but the Under-Secretary of State for Business, Energy and Industrial Strategy. He has argued for a “failure to prevent” economic crime offence not just on 13 October last year, but on 7 July 2022, on 1, 22 and 28 February 2022, on 2 December 2021, on 9 November 2021, on 22 September 2021, on 18 May 2021, on 9 November 2020, on 25 February 2020, on 19 July 2019, on 23 April 2019, on 18 December 2018 and on 9 October 2018. Given that the hon. Gentleman has spent his parliamentary career arguing for this, it beggars belief that now he is a Minister with the power to implement it, he is not actually doing so.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

These are very important points. Given their importance, should the Minister not put down his phone and listen to what my hon. Friend is saying?

[Alison Thewliss]

One Minister is on his phone and the other—the hon. Member for Thirsk and Malton—is sitting at the back of the Chamber having a gab. This is not ideal, but perhaps the Minister has already heard what I have to say and does not want to hear it again.

“O, wad some Power the giftie gie us

To see oursels as others see us!”

[Tom Tugendhat]

It is not the first time I have heard this speech.

[Alison Thewliss]

It is not, and it certainly will not be the last. It could be if the Minister accepted the amendments, but he is not going to do that, and he will keep hearing this speech until he does: that is the truth of the matter.

As other Members have said, there is a precedent for a “failure to prevent” measure. It is in the Health and Safety at Work etc. Act 1974 and the Bribery Act 2010, so the concept already exists, and there is no reason why it cannot be applied today. Even if the Government are saying, “We want to extend it to other areas”, that should not limit us today, when the Bill gives us the opportunity.

I also support new clauses 4, 5 and 6. The right hon. and learned Member for South Swindon made an important point about what senior managers have to do, which is also relevant to the Online Safety Bill. I rather like the definition of an offence committed with

“the consent, connivance or neglect of a senior manager.”

All those things contribute to economic crime. This is, if you will, a sin of omission, and we should take the opportunity to tighten up these loopholes. It is one thing to know about something that is happening, it is another thing to look the other way, and it is another thing not to do your job properly and allow that something to happen. This would cover all those eventualities.

New clause 7, in the name of the hon. Member for Cheadle (Mary Robinson) deals with whistleblowing. It is an excellent new clause which would enhance the Bill and offer protection to the very people who flag up these economic crimes. Whenever I think about whistleblowing, I remember a little cartoon that I saw many years ago showing a man sitting at a computer terminal in an office with a sign above his head saying, “Congratulations Frank, whistleblower of the month.” I understand that the cartoonist was Bill Proud. Every time I think about that, I think about the lack of protection offered to whistleblowers, and how much more the Government could be doing to ensure that those who do speak up are protected.

The organisation Protect says that it has offered advice on whistleblowing to 2,500 people a year, and that of those who have contacted it about their experiences, 65% have suffered some kind of detriment as a result of their whistleblowing. There is no incentive for many people to speak out when they see something wrong. They feel that they will lose their job or their promotion and will have to work somewhere else, and also that this might follow them around if they are seeking references for a new job. There is a real problem here, and the Government could, if they wished, deal with it in the Bill: it would make sense for them to do so.

I also support the cost cap suggested in new clause 21. Bill Browder spoke about this issue very powerfully during the Public Bill Committee evidence sessions. The balance is completely skewed to the side of the criminals and away from the Government, and away from the prosecutors and the agencies who want to take on these crimes but simply cannot afford to do so. Bill Browder said:

“What I have learned is that the law enforcement agencies effectively refuse to open criminal cases unless they are 100% sure that they can win without any tough fight on the other side.”––[Official Report, Economic Crime and Corporate Transparency Public Bill Committee, 25 October 2022; c. 65.]

And what we have learned, even just this week, is that the other side can afford anything that allows them to support their case. Indeed, that was made clear in the exchanges on the urgent question on the Wagner Group earlier today. The other side are very well set up financially: they can afford the very best lawyers, while the prosecutors sit there with nothing in their armoury to take on these oligarchs and kleptocrats. That is not acceptable, and a cost cap such as the one suggested in new clause 21 would go some way to addressing it.

Bill Browder has also talked powerfully about the Magnitsky case. He produced a load of evidence about money that been stolen and laundered, being put through various accounts. He had traced all the money, some of which had ended up in the United Kingdom. When he presented the case to prosecutors, to the National Crime Agency and to various other agencies, they all refused to take it on. A crime has been committed, and we know who committed it and where the money ended up, but prosecutors here do nothing about it because it would cost them money that they might never see again. As a result, crimes go unprosecuted in the United Kingdom. It is unacceptable that, by failing to take on new clause 21 and other such measures that would cap costs, the Government are allowing this to continue.

I would support further measures on sanctions. Further to the urgent question, monitoring of sanctions and their effectiveness needs to be a lot tighter. Any sensible sanctions scheme would not have waivers for warlords.

I very much support the new clauses on the proceeds of crime and compensation for victims, for the people of Ukraine and indeed for the people of Iran, as has been suggested by the hon. Member for Oxford West and Abingdon (Layla Moran). Those measures are important. There are schemes such as the financial services compensation scheme, but in many cases that does not fully compensate, or compensate at all, those victims of economic crime. Appropriate compensation should be given, given the real and devastating effect that financial crime can have on our constituents. People who feel that they have been duped will carry that around for a long time, so compensation is important, and there is real need for finance both to fight the war in Ukraine and to rebuild that country thereafter.

15:45

The hon. Lady’s new clause 39 on reporting on economic crime to this House is important, as is the new clause from the official Opposition on having a Committee of this House to deal with economic crime. At the moment, this is spread too far across too many Committees and there is no accountability to one place in the House on all the aspects of economic crime. The Treasury Committee, of which I was a member, produced a good report and other Committees—some Members here are former Chairs of those Committees—have produced excellent reports on these things, but there is no gathering mechanism to put all these different aspects of economic crime in one place and to be accountable for them. Given the scale of economic crime across these islands, a Committee that had that specific job would be important; it would be significant to have somewhere where all that information could be stored. The members of that Committee could also take evidence in private, if that was appropriate, from the agencies involved, if that was not to be done in public.

There is an awful lot more the Government could and should be doing in this Bill. It is an opportunity that should not pass us by. It is Burns night, so I shall finish with a wee bit of Burns that seems topical, given the discussion:

“Far be’t frae me that I aspire

To blame your legislation,

Or say, ye wisdom want, or fire,

To rule this mighty nation.”

There is a lot more the Government could be doing. Let us get this done and get it right this time.

[Mr David Davis (Haltemprice and Howden) (Con)]

I am going to be brief and speak simply to new clauses 1 and 2, which stand in the name of the right hon. Member for Birmingham, Hodge Hill (Liam Byrne), in my name and in the names of a number of other long-standing defenders of justice in Britain. The new clauses, in effect, make SLAPPs near impossible where they are used to protect economic crime. The provisions are far too narrow, by the way, but that is what the Bill demands. I will leave it to him to explain the mechanism, but I want to talk for a couple of minutes about how important this is and how we got to where we are today.

The issue dates back to about 2000, or perhaps a bit earlier, when London had become liberalised and the Putin oligarchs and others, including some Chinese people, were looking for places to hide their ill-gotten gains and behaviour. London was a wonderful target for that. There were vast flows of money in which they could hide the billions they were stealing from the Russian people and others.

At the time, there was pretty slapdash corporate admin—we were talking about that yesterday in respect of Companies House—and, I say this quite brutally, the complete feebleness of the British establishment, by which I mean everybody: both parties; and the agencies tasked with controlling this, the Serious Fraud Office, which has been a waste of space, and the NCA, which has not been good enough. It was created to tackle this but has not been good enough. All those things were happening. I say to the hon. Member for Aberavon (Stephen Kinnock) on the Opposition Front Bench that it goes wider than the Conservative party. It starts with Blair/Brown and goes on to Cameron/ Osborne. All of them made mistakes. The golden visa that the hon. Gentleman talked about was created just as we were rushing into the collapse of western financial capitalism under the previous Government. We were too soft—

[Stephen Kinnock]

The right hon. Gentleman makes a valid point. I agree that the creation of the scheme was under the new Labour Administration, but the point I made in my speech was that a number of those golden visas were given after the Russian invasion of Crimea in 2014. He is right that successive Governments are guilty of naivety and complacency, but there is a point in 2014 when we really needed a different approach.

[Mr Davis]

There is no doubt that the more recent you are, the more salient the case. Frankly, I can remember being ashamed of a British Prime Minister hosting Putin at the Olympics only a few years after Litvinenko was murdered in our country in the most cruel and overt act of state terrorism. Neither Government dealt with that. Cameron’s action was grotesque in the extreme, but neither Government dealt with it. Similarly, both Governments kowtowed to China after Tibet and all the rest of it. That has been done too many times. It is the entire system, not just one Government or another.

London is a fabulously attractive place for the Russians or the Chinese. If you want to be somewhere else than Russia, this is the place to be. We have facilitated that at every turn. Here comes the issue to which SLAPPs relate. We have a legal system that is probably the most brilliant in the world in delivering fair outcomes and good justice, but it is also phenomenally expensive, which means it is one-sided in its operation between an oligarch and an ordinary citizen, journalist or whoever they may be.

In conjunction with that are the things that flow from it, such as the behaviour of solicitors, to some of whom my hon. Friend the Member for Isle of Wight (Bob Seely), who is not in his place, gave a fair old pasting yesterday, but one that was deserved. The private investigators industry, unregulated, undertakes crimes to gather information for use as weapons against other people. Our courts—not uniquely, but outstandingly—allow that information to be used. In each individual case that might be the right decision, but the collective effect of that is to suck criminally based information into our system and therefore engender and help the industry.

All that is why new clause 1 and 2 are vital. That all had the effect of creating a vast, possibly unintentional institutional cover-up for criminal activity: money laundering, fraud and concealment of evil actions abroad. Let us bear in mind that some of the oligarchs we are talking about are murderers. The system murders people. It is evil activity. That is why new clauses 1 and 2 are incredibly important.

What the right hon. Member for Birmingham, Hodge Hill is proposing in new clauses 1 and 2 is a second best option. We already heard the best option in earlier interventions: a freestanding Bill immediately, because this is happening now. There are court cases going on as I stand here in which people are having their lives destroyed by SLAPPs. The next best is to have it in the Bill of Rights, but we know that that is way down the timetable, for all sorts of reasons. We may not see it before the next election, in which case we will have lost two more years.

The new clauses amount to a way of dealing with this criminal—or near criminal—activity in a way that is not susceptible to a finely turned piece of law. I listened with fascination to my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland) on that point. Getting that right is difficult; getting this right is not, because the greatest enemy of evil is a free press. In our country in the last couple of decades we have allowed our free press to become gagged and crippled. If we can take that gag away and remove those bonds, we will suddenly expose all the things that we need to deal with. We will see the weaknesses I talked about—the SFO and the NCA—and put them right, one by one. That is why we should support new clauses 1 and 2. I talked before about the weaknesses of the SFO and the NCA. We will see those weaknesses and we will put them right, one by one. That is why we should support this measure today.

[Dame Margaret Hodge]

I shall be very brief, because I took a lot of time in the House yesterday. I strongly support many of the new clauses being moved by Back Benchers across the Chamber today. If I can just say something about politics, this heartens me and shows that there are ways in which we can work together to pursue the national interest across the political divide. It breathes a bit of confidence and life back into the political process that we have all chosen to join in our careers, so I commend those individual Back Benchers who have put themselves forward and who are speaking today.

The proposals from the hon. Member for Cheadle (Mary Robinson) on strengthening the support for whistleblowing are hugely important. Whistleblowers are an essential part of our armoury in the fight against money laundering and fraud, and we know that, despite all the legal rights, they are not protected. People lose their jobs, their families get destroyed and they are left penniless. Therefore, the establishment of a capability that will do nothing other than protect and promote whistleblowers in the crucial work they do is really important, and I hope that it will be adopted.

The importance of legislating to tackle the abuse of our legal system by oligarchs and others, which the right hon. Member for Haltemprice and Howden (Mr Davis) has just talked about so eloquently, is also really important. I want to be blunt about this and say to those on the Government Front Bench that, if they do not accept this new clause, they will not get a Bill during this Parliament. I bet that is right, so for heaven’s sake let us use this opportunity to get this bit of legislation in. It does not cover everything we would like it to cover, but it will have an impact. It will also give us the experience to see whether we have got the legislation right. I am sure that all the lawyers who helped to draft these new clauses put their best brains into them, but if they have not got them right, we will be able to learn those lessons when we come to extend these measures beyond economic crime.

The right hon. and learned Member for South Swindon (Sir Robert Buckland) made an excellent contribution on the reform of criminal corporate liability, and I want to say something about that. It is not that we want to suddenly bang up a whole load of lawyers, accountants, companies, service providers and all those people who we know are the ones that facilitate or collude with much of the economic crime that takes place. Only the best preventive mechanism that we can think of will force a change of behaviour, and we are not doing that on the back of hope; we are doing it on the back of reality. We know from the Bribery Act 2010 and from the regulations on tax evasion and on health and safety at work that putting this sort of liability on individuals and corporations is the only way to transform behaviour. Last week’s amendment to the Online Safety Bill by the Conservative rebels showed the mood of the House, and I would urge Ministers to think about that. The mood of the House is to use this effective tool to try to transform behaviour in all spheres of life, whether in relation to online harms or to economic crime.

I hope that we will hear from the hon. Member for Huntingdon (Mr Djanogly) soon on the issue of “freeze not seize”. I know he is going to make a number of propositions, and I hope he will not mind if I say something about this. We have been working with an extensive group of lawyers to see whether we can move to a position where we do not just freeze the assets but seize them in order to repurpose them and, particularly in the current context, use them to support the reconstruction of Ukraine. We have finally got a chink in the armour in that regard, but let me say something else first. The lawyers we have talked to work with non-governmental organisations in this field, and the advice they give is always going to be slightly different from the advice that comes from the lawyers working in the Government service. I think we bring a new perspective, and I urge Ministers to listen to what we have to say. The chink is worth examining at this stage, even if we do not go for the further propositions, to show that we mean it when we say that we want to seize this money.

[Tom Tugendhat]

If the right hon. Lady can come up with a way to seize assets and use them for the purposes we have been discussing—notably for the reconstruction of Ukraine, but for other purposes, too—I am all ears. I have had long conversations with the representatives of Governments around the world, and I am yet to hear an idea that works. If she has one, I am happy to hear it.

16:00

[Dame Margaret Hodge]

This is not our idea. It comes from a recent seminar we held with lawyers who support the Royal United Services Institute and Spotlight on Corruption. I will leave it to the hon. Member for Huntingdon to expand on it, but I think it is a very interesting chink that we can exploit, although it is not the total answer.

A draft Bill is being prepared by another group of lawyers, but I do not think we can add it to this Economic Crime and Corporate Transparency Bill. I am sceptical that we will find a chance to introduce the draft Bill in this Parliament, but I assure the Minister that we will pursue it after this Bill has passed. I just hope the Government examine the chink we have identified and run with it.

New clause 21 on cost caps, which stands in my name, is part of the way in which we could better fund the enforcement agencies in their fight against economic crime while also preventing economic criminals from exploiting our legal system. At the moment, we have a “loser pays” law, which has two consequences. First, when our enforcement agencies embark on litigation and lose, there is a massive cost to the public purse. We saw that with the unexplained wealth order against Kazakhstan’s Nazarbayeva family. Subsequent investigative journalism suggested that the family told mistruths to the court, but that has never been rectified. Nevertheless, the costs vary from £1.5 million to £2 million.

The SFO took a similar case against Serco involving prisoners who were—I have forgotten the word.

[Tom Tugendhat]

Tagged.

[Dame Margaret Hodge]

I thank the Minister. I am having a senior moment.

The SFO had clearly prepared the case badly, but there was a discovery point that got the litigation thrown out of court, and a huge sum was claimed in costs. The cost to the public purse is enormous.

[Kit Malthouse (North West Hampshire) (Con)]

I understand the right hon. Lady’s point about the cost to the police and other authorities of failed investigations but, in my experience, much of the problem stems from the division of the spoils in those cases that succeed in securing the proceeds of crime. As she will know, the money is divided between the Treasury, the Home Office and the police.

When I was at City Hall, we tried to cut a better deal in which the police would effectively recover the full cost of a prosecution, and any profit would then be split, so that pursuing such prosecutions would be costless to the police. Tim Godwin was then deputy commissioner of the Metropolitan police, and his view was that the police would then have a strong case to invest even more in this line of investigation, and they would therefore have more success and there would be more money to go around for everyone. It is not necessarily the case that legislation will solve the problem. It is more to do with the deal between the police and the Government.

[Dame Margaret Hodge]

Indeed, and we considered an amendment in yesterday’s debate to address that specific issue, so that any funds arising from a confiscation order, or other such order, could be enjoyed by the enforcement agencies themselves, which would provide an additional incentive. We discussed last week’s Danske Bank settlement of criminal issues in the United States, from which the enforcement agencies received $2 billion. Just imagine the amount of enforcement activity that could be funded from that fee. We are timid in that regard, so I completely concur with the right hon. Gentleman on that.

The other argument in relation to cost caps is that the fear of facing huge costs if one fails in a case provides a disincentive to the enforcement agents to pursue as vigorously as one would like economic crime prosecutions. The Minister has said to me previously that there is no evidence to back that up, but I just do not buy that. A proper analysis of how people in the NCA, the Serious Fraud Office and other agencies think before they decide to pursue a prosecution would very quickly reveal that there is a disincentive. It is for those two reasons that we considered cost caps. The US is our model. Each party bears its own costs, which is much more effective. We heard figures yesterday—I will not repeat them because I have to get on—that the US gets much more money in and it does not cost as much to its enforcement agencies.

Those are the things that I wanted to cover. I hope that, in summing up, the Minister will please give us some concessions. I urge him to reflect on the degree of unanimity across the House and on the very senior figures on his own Back Benches who have chosen to work, in particular, with members of the two all-party groups to reach consensus. We do argue these things out. We come to a view after an extensive debate on a subject; it is never an open and shut case. Back Benchers are in a better position at present than those on the Front Bench, so I ask the Minister to listen to us because we may just be right and it would be good if there was a concession on something.

[Mary Robinson (Cheadle) (Con)]

I rise to speak to new clause 7, which is in my name, and the names of Members across the House. It would require the Secretary of State to set up an office for whistleblowers within 12 months of the Bill receiving Royal Assent, and as chair of the all-party group for whistleblowers, I wish to register my interest.

The office for whistleblowers would be an independent body, which reports to Parliament and would have three main duties: to protect whistleblowers from detriment resulting from their disclosures; to ensure that these disclosures are investigated; and to escalate information and evidence of wrongdoing that is outside its remit to the appropriate authority, including regulators or, if appropriate, the police.

I thank the right hon. Member for Barking (Dame Margaret Hodge), who introduced this new clause at Committee stage and spoke to it robustly and with the knowledge and passion of someone who has been pursuing this for many years.

Despite a complete lack of reference in the Bill, whistleblowers and whistleblowing have a pivotal role in the fight against economic crime. Indeed, when this proposal was debated at Committee, the right hon. Member for Barking referenced her time as Chair of the Public Accounts Committee and noted that all the work that the Committee did on economic crime came from whistleblowers, and yet, in a Bill that seeks to tackle economic crime, whistleblowers are not referenced.

One statistic that has been shared many times when debating this subject in Parliament is that 43% of economic crime is detected and exposed through whistleblowers. However, in his response to the Committee debate, the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) noted that he believed that about 100% of economic crime detection could be attributed to whistleblowing. Once again, that appears to be confirmation that, if we want to know where an economic crime is being committed, it is most likely to be a whistleblower who exposes it.

The objectives of the office I propose in this new clause would be to encourage support and advise whistleblowers, providing a safe place to share information and acting on evidence of detriment to the whistleblower. We simply must protect whistleblowers who speak out, risking retaliation, as we have heard, harassment and losing their job—or, in the case of serious organised crime, possibly a much worse outcome. The office will enhance protections of those who whistleblow, while at the same time incentivising such disclosures by providing a safe space to share information.

There is evidence that an office for whistleblowers does incentivise disclosures. In 2020, the International Bar Association measured countries with whistleblowing legislation against a list of 20 best practices. The UK met just five of the 20. Meanwhile, the United States, where an Office of the Whistleblower sits within the Securities and Exchange Commission, met 16 of the best practices. That office received 12,300 disclosures in 2022, nearly double that of 2020, and, as its chief stated:

“The significant increase in the number of whistleblower tips and awards since the program’s inception shows that the program, with its enhanced confidentiality protections, is effectively incentivizing whistleblowers to make the often difficult decision to come forward with information”.

This is a cross-party, cross-departmental issue. Whistleblowers are to be thanked for, among many things, uncovering waste in our public services, highlighting poor or dangerous medical practices and conduct, and revealing the laundering, funnelling and theft of vast amounts of public and private money. When people steal from the public purse, it is society that suffers and our constituents who pay the price. According to law firm Pinsent Masons, His Majesty’s Revenue and Customs received nearly 14,000 tip-offs regarding misuse of the covid furlough scheme. In just one case, £27.4 million of taxpayer money had been falsely claimed by a fraudster who, despite never having been to the UK, registered four companies in London and claimed furlough for more than 2,700 non-existent employees. Some £26.5 million of public money was recovered as a result, in a case that also reinforces the importance of Companies House reform.

We have heard details of the Danske Bank money laundering scheme in previous debates, so I will not delve into the details again, but in that case we know that criminals took advantage of UK limited liability partnerships. That is why the reforms at Companies House and to limited partnerships are needed. However, once again, it was a whistleblower who brought that $230 billion economic crime to light, halting the stream of illegal Russian money laundering. Without him, it might never have been uncovered and might have continued for years.

That was before Putin’s illegal invasion of Ukraine, but we know that illicit finance helped to fund the war and will continue to fund it, unless it is stopped. I welcome the swift action the Government have taken to tackle the scourge of financial crime, first by passing the Economic Crime (Transparency and Enforcement) Act 2022, then by introducing the Bill we are debating today. However, while the Government have introduced measures that will go far in preventing economic crime, as it stands, neither piece of legislation supports those very people who are key to its detection.

Having spoken to many dozens of whistleblowers over the years, I know that someone who reports wrongdoing can risk jeopardising their reputation, their career, their mental health, their wellbeing and that of their family. It is not a decision made lightly. Whistle-blowers who expose economic crime must balance the risk to themselves in the name of doing what is right. That should not be the case.

16:14

The UK was once a world leader in whistleblowing protections, and we were the first EU country to introduce whistleblowing legislation—the Public Interest Disclosure Act 1998. That was seen as a landmark moment for whistleblowers, with protections for workers in employment tribunals and an expectation that wrongdoing would be addressed. However, as I have previously outlined in this place, PIDA applies in reality only to some employees—not contractors, not trustees and not volunteers—and it does not cover those connected to financial crime who may wish to disclose information. In addition, although workers can bring claims to an employment tribunal, just 4% of whistleblowing claims are successful. With results that low and potential risks so high, how can we expect the public to have confidence in the system? That is why we need to take measures to protect and support whistleblowers, which will in turn encourage people to speak up and report economic crime.

I do not intend to press the new clause to a vote, but I note that the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Thirsk and Malton, intervened on Second Reading to express his wish for whistleblower provisions to be introduced to the Bill. By supporting the new clause, the Government would be doing exactly that, and I hope that they will feel able to do so.

[Layla Moran]

I rise to speak to the Liberal Democrat new clauses tabled in my name, with a particular focus on new clauses 3, 30, 31 and 39. Before I come to those new clauses, I put on the record my support and thanks for the many varied new clauses that we have been discussing, including those tabled by the hon. Member for Cheadle (Mary Robinson), the right hon. Members for Barking (Dame Margaret Hodge) and for Birmingham, Hodge Hill (Liam Byrne), the right hon. and learned Member for South Swindon (Sir Robert Buckland) and many others.

In their breadth and depth, those new clauses reflect my own somewhat conflicted feelings about where we are with the Bill. On the one hand, it is very clear that we are much further on than a year ago, which is surely a good thing. That has come off the back of strong cross-party working, and I echo what the right hon. Member for Barking said earlier about that restoring faith in the democratic process. If only our constituents could see that we do work together and that it results in positive things.

However, it is also fair to say that we still have much to do. I know that those are not just my thoughts, because they have also been expressed by the former Chair of the Foreign Affairs Committee, the right hon. Member for Tonbridge and Malling (Tom Tugendhat), who is now the Minister for Security. Indeed, in a sense, he and others are the great hope—the men on the inside who we hope are going to push much of what we want to see. I hope that they are hearing yet again in this debate, and in the hopefully very brief Third Reading debate later, just how much further we want to go. Notwithstanding that positive movement in the right direction, I am worried that we have started to back-pedal in some areas.

One of those areas is golden visas, which new clause 3 would address. Let us look at them in some detail. Tier 1 investor visas were the “blind eye turned” route straight into the UK that was used and abused by so many of Putin’s cronies, not to mention kleptocrats from other regimes. They were a golden ticket—quite literally—to come to the UK and launder money with barely any scrutiny or transparency. Recognising that, the then Conservative Home Secretary instituted and launched a review, and the promise was that the findings would be published. For a long time, I—and others, I am sure—had been tabling and asking questions of the Home Office to show that we had not forgotten and that the delay was inexcusable.

So imagine my delight when, the week before last, Members saw a written ministerial statement in the name of the Home Secretary entitled “The Tier 1 (Investor) route: Review of operation between 30 June 2008 and 6 April 2015”. My heart leapt for joy. Finally, five years on, were we going to get the answers that we sought to questions such as: to what extent had Putin’s cronies managed to embed themselves into the UK economy or even into the upper echelons of British society, and I include in that politics? How many of the golden visas issued went to Putin’s cronies or their family members? What other countries were these visa holders from? Crucially, where are these people now? How many of them are still in the UK? How many of them have acquired citizenship, and what have the Government done about that?

Given that we waited five years, and given that the Government and successive Ministers had promised from the Dispatch Box that we would get some or all of those answers, we were entitled to a substantive response. When the review was published, my heart sank, because instead of what they had promised, the Government published what they termed a “summary” of the recommendations—not even the actual recommendations themselves, but a summary. Furthermore, the summary frankly told us nothing that we did not already know. It is galling that we still do not know how many people have exploited this system. The statement did not even give us a number or a rough ballpark figure for golden visa holders who had been identified as a risk. The Government admitted that they had identified a “small minority”, but given that 6,000 visa holders were being reviewed—a figure that, by the way, we already knew before the publication of the statement—what is the figure for that small minority? Is it in the tens, hundreds or thousands? I think that anything under 3,000 would still qualify, so what is it?

We know that 10 oligarchs who were sanctioned held golden visas. In March, Liberal Democrat colleagues in the other place found out it was eight—presumably the difference is that we have sanctioned more people since then, so the number of people on the list who are sanctioned increases, and I can understand that, although confirmation would be helpful. That shows the Government can be specific when they want to be, so why can they not be specific on this? The statement does not say very much about how many acquired British citizenship, what nationality they were or what will happen to them now, beyond very broad generalities.

Furthermore, the bit that worries me most is that in the words of the Home Office, this written statement was its “final response”. Following my point of order that you, Madam Deputy Speaker, graciously answered in the House on the day of the statement’s publication, I wrote again to the Home Office to ask, “When are you going to do this? Why have you done this?” It said that was its substantive response, and

“we will not be commenting further”.

I sincerely hope, especially given the comments that the Minister has made in the past, that he will do the House the courtesy of giving us an answer or explanation for what on earth happened here. I seem to remember—it might even have been in the first week after his being appointed, and we were all very excited about that—that he confirmed from the Dispatch Box that the information would be released, and then it was in written statements later that the tone and the words changed. What happened? We deserve to know the answers.

I am afraid to say that from where I sit, the whole thing stinks. It undermines much of the good work we are doing here to try to get transparency. Sunlight is the best disinfectant. After years of the Government saying that they would do this, for them to back-pedal stinks of a cover-up. I am not accusing the Minister of doing that, but I think we can legitimately suggest that it could be perceived that way, and that undermines everything else we are doing. I sincerely hope, should we be allowed to divide on the new clause, that Members will come with us through the Lobby and do what the Government said they would do in the first place.

[Alison Thewliss]

The hon. Lady is making some excellent points about the golden visas. Does she find the lack of curiosity from the Government about these golden visa holders and what they have been up to as remarkable as I do, when compared with some of the difficulties that our constituents have in asking for something as simple as a visitor visa to have their granny come over and visit from Iran?

[Layla Moran]

I thank the hon. Lady for her point, which is well made. The thing is that the Government were curious, and they did this review, which is sitting there. That is clear—the one thing that the written statement confirmed was that a review had been done and recommendations had come from it, but all we got was a summary of the recommendations. What I take from that is that they were curious and they found out, but now they do not want to tell us. What on earth happened? It is not a good look.

To move on from golden visas, we desperately need to see more action in a number of other areas to ensure that we properly tackle economic crime, particularly by kleptocrats. It is right that we focus on Russians, but it is worth saying that the Bill will apply to many other flavours of kleptocrats and bad people. As other hon. Members have said, this could be our last chance for many years to get this right, so we should consider how else it might apply. Last year, for example, Hong Kong Watch highlighted concerns about the dirty money that Hong Kong officials had gained through corruption and that has now been spent by the families of officials in the UK, including on property. I raised those concerns at the time and I will continue to press Ministers on them.

I tabled new clause 30, about Iran, to show how important it is to focus not on a single country, but anywhere there are human rights abuses. Anoosheh Ashoori made the point that

“there are a large number of children and relatives of the regime that, like the Russian oligarchs, like living the high life here and have assets here.”

Why are we not pursuing them? The new clause asks the Government to use existing legislation to do an audit and report back to Parliament. We should apply the Bill to as many places as it can be effective.

All that takes resourcing—a familiar refrain in the House—which is addressed by new clause 31. Frankly, resourcing is a lacuna in this Bill and its predecessor. I was encouraged by the number of amendments on establishing an economic crime fighting fund, which shows that it is clearly the shared will of hon. Members on both sides of the House that we put the resourcing and money behind this legislation to ensure that it is done properly. The Liberal Democrats wholeheartedly share that commitment. I say to the Minister that that money would not be frittered away; it would be an investment, because if we fund the agencies properly, they will start to bring the money back in. We know the exorbitant amount that we think we are losing to economic crime, so any investment in getting some of that money back would surely be good.

In conclusion, I urge Ministers to take note of the willingness of hon. Members on both sides of the House to act, and to take heart from it. There is much more to be done. I hope that the Bill is the next chapter, but not the last, in the House’s fight against economic crime in this country. I sincerely hope that Ministers will continue to work with us in our common aim of bringing about transparency and light to tackle this once and for all, so that we are never again left in this embarrassing position.

[Mr Djanogly]

I rise to speak to new clause 23, in my name and those of the right hon. Member for Barking (Dame Margaret Hodge) and 17 other hon. Members on both sides of the House, for whose support I am grateful. This comprehensive Bill is significant in its scope and its intention to counter fraud, which is wholly welcome, but new clause 23 speaks to its lack of focus on the proceeds of economic crime, which are the proceeds resulting from acts committed in the UK and overseas.

Such proceeds have circulated in the national economy, largely unimpeded, for too long, and a host of existing limitations and issues, such as the lack of proper financing for related law enforcement bodies, which has been much discussed over the last two days, have a compounding negative effect. Unfortunately, those limitations are all too frequently at the expense of and to the detriment of hard-working and honest taxpayers in all our constituencies—not least mine—and those who often stand to benefit are the criminals and those sanctioned for reasons related to foreign affairs. Tackling that issue is the primary motivation behind the new clause.

More broadly, like-minded countries are increasingly focusing on this area, including our fellow parliamentarians in Canada. In June last year, they made technical yet significant changes to their economic sanctions legislation, including the Sergei Magnitsky law regime. Effectively, those changes allow existing sanctions for freezing assets to be converted into orders for the seizure of those assets. Similar measures are being considered by the European Commission, in other European capitals such as Tallinn, and in the United States. Unless our regulatory measures vis-à-vis the proceeds of economic crime are reviewed and strengthened, the UK risks falling behind, which I believe would be both morally and politically unpalatable.

16:30

I also believe that new clause 23 speaks to the wider lack of a much-needed national conversation about such proceeds, where they are held, why they are in the UK and, crucially, what the potential benefits of clamping down on them could be. It would, I suggest, be to the clear benefit of the taxpayer, but also crucially to those elsewhere in need of financial reparations such as in Ukraine, if the proceeds could be seized, repurposed and put to work. I say this recognising that in September it was estimated by the World Bank that at least $349 billion would be needed for Ukraine’s reconstruction, and one can only imagine that the figure is now much more significant.

It is, however, important to recognise that it is not enough for measures to be simply passed into law; their implementation must be backed, supported and seen through. The American authorities have provided a notable example of one such action that I thought would be of interest to the House. In May last year, a $300 million yacht, the property of a sanctioned Russian oligarch, was seized by Fiji at the request of the United States in a joint law enforcement operation. This followed the issuance of a seizure warrant that declared the yacht in question to be subject to forfeiture based on probable cause of violations of US law, including money laundering and conspiracy. In other words, it was not the asset-freezing sanctions themselves that enabled seizure, but rather the active enforcement of the breach of such sanctions.

Such violations and action should not, however, be looked at in isolation. Instead, they should be considered in the wider context of international affairs—namely Russia’s brutal, illegal and ongoing invasion of Ukraine. Co-ordinated through the US Justice Department’s KleptoCapture taskforce, the seizure of the yacht in question sent a blunt message that, in the words of the FBI director, Christopher Wray, those who contribute to the advancement of Russia’s malign activities will be sought and

“brought to justice, regardless of where, or how, they attempt to hide.”

This is a message—a strong message—that cannot be ignored or overlooked.

This yacht seizure was a clear example of the rigorous enforcement of the law, and one that I believe should be emulated here in the UK, with related regulatory measures subsequently strengthened on top. The recent arrest of another oligarch in London on suspicion of money laundering in breach of asset-freezing sanctions was a step in the right direction. The problem in the UK, however, is that the criminality of breaking sanctions attaches to the quantum of the breach, not to the overall value of the amount sanctioned. For example, if a sanctioned oligarch were to be found with a carrier bag full of sanctions-breaching cash, that cash amount is all that is liable for confiscation, not his wider sanctioned wealth.

This was why we attempted to table a cross-party amendment—the so-called chink in the armour amendment, as described by the right hon. Member for Barking. It proposed, in short, that non-disclosure of all assets by a sanctioned individual would itself be a criminal offence, and that the total frozen amount could be subject to seizure as a penalty for such an offence. Of course, this is a much lighter step than providing, as in Canada, for the Attorney General to be given the power to convert freezing orders into seizing orders, and I also tried to table such an amendment, by the way. Unfortunately, these proposals were deemed to be out of scope of the Bill, which is why we are only debating the broader terms of new clause 23.

However, given that this Bill follows on from the Economic Crime (Transparency and Enforcement) Act 2022, which involved fast-tracking sanctions laws in response to the invasion of Ukraine, it does seem slightly ironic to me that updating that sanctions regime falls outside the scope of this follow-on Bill. None the less, I of course accept the House’s ruling on that issue, but I implore the Minister and the Foreign Office who lead on this issue to stop passing the buck between Departments, as we keep seeing, and to listen to the majority of hon. Members across all parties who feel that Russia and Russians as the aggressors must pay for their barbarity and devastation of Ukraine, and not leave it up to British and western taxpayers to foot the Bill for Ukraine’s reconstruction.

New clause 4, which was so powerfully and expertly introduced by my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland), would create an offence of failure to prevent fraud. That important proposal attempts to close a large gap in our existing fraud legislation book. I go back to 2010 when, as shadow Solicitor General I led for the then Conservative Opposition on the Bribery Act, which we also did once we came into government. Working on a cross-party basis, we added into that Act the concept of senior managers of a venture being liable for bribery happening at the coalface, if they could not show that they took all reasonable steps to prevent that bribery from happening. Before that, prosecutors had to prove at each layer of management that those above them, the so called “directing minds”, were guilty of the crime. In practice, that was almost always impossible with larger companies—my right hon. and learned Friend explained this at some length earlier so I will not go into great detail. As he said, that Act focuses the minds of those in management, especially in big companies, so that they think carefully about the processes they have in place, and regularly review such processes. Such an approach also states that inaction is not acceptable, let alone an excuse.

The resulting new bribery law was considered a great success. I recall a discussion about a decade ago with the then SFO director, Sir David Green, who was publicly advocating for the same change to be made for the offence of fraud, and I note the SFO’s current director is saying exactly the same. To put that in context, the main fraud prosecutors in this country have consistently been saying for more than a decade that they need this legislation in order to do their jobs properly, yet here we are some dozen years later, and it still has not happened. I am frankly amazed by that, and I am not quite sure why it has not happened. I heard from my right hon. and learned Friend the history of how the measure was delayed, but I am still not sure why it was delayed. I recall the now Lord Chancellor talking of consulting on this issue back in 2016, so again—why the inaction?

Together with other right hon. and hon. Members I got a letter dated 20 January from Ministers from the Home Office and the Department for Business, Energy and Industrial Strategy saying that they are “carefully assessing options”. Does that imply another dozen years of assessing something that we all know needs to happen? If we are to be serious about combating fraud, we must get on with this. If the Government are not happy with the wording in new clause 4, they should come up with their own wording. Fraud now constitutes just under half of all crime committed in the UK, and we must be doing more to counter it at all levels.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I have now to announce the result of today’s deferred Divisions.

On the draft Environmental Targets (Biodiversity) (England) Regulations 2022, the Ayes were 302 and the Noes were 166, so the Ayes have it.

On the draft Environmental Targets (Woodland and Trees Outside Woodland) (England) Regulations 2022, the Ayes were 302, the Noes were 166, so the Ayes have it.

On the draft Environmental Targets (Water) (England) Regulations 2022, the Ayes were 300, the Noes were 170, so the Ayes have it.

On the draft Environmental Targets (Fine Particulate Matter) (England) Regulations 2022, the Ayes were 301 and the Noes were 170, so the Ayes have it.

On the draft Environmental Targets (Residual Waste) (England) Regulations 2022, the Ayes were 301 and the Noes were 170, so the Ayes have it.

[The Division list is published at the end of today’s debates.]

[Liam Byrne]

It is a pleasure to speak to new clauses 1 and 2 in my name and those of many others, and it is a pleasure to follow so many excellent contributions to the debate. I hope it has become clear that there is a wide and deep cross-party consensus about the need to take this overdue Bill and repower it with not only good laws but proper resourcing so that we can begin to ensure that economic criminals in this country are put under rather more pressure.

A lot is in a name, and the Bill’s name is the Economic Crime and Corporate Transparency Bill. As the hon. Member for Cheadle (Mary Robinson) pointed out, what is crucial to ensuring the corporate transparency we need to police economic crime is information. Much of that information comes from whistleblowers and, crucially, from courageous journalists who are prepared to take tremendous risks and go to tremendous lengths to pursue the truth, publish the truth and hold the guilty to account.

The challenge we have is that we know we cannot police economic crime without such transparency, but that old advice to journalists to follow the money in pursuit of the truth is becoming almost impossible because our courts—English courts, London courts, which were sanctuaries for justice for 1,000 years—are becoming the strike point of choice for oligarchs around the world to intimidate, to cow and to deter journalists from publishing the truth with the threat of sky-high legal costs. My friend the right hon. Member for Haltemprice and Howden (Mr Davis), who is not in his place, and I, together with the hon. Member for Isle of Wight (Bob Seely), have been pushing this argument for almost a year. Yesterday, the hon. Member for Isle of Wight presented to the House a first-class private Member’s Bill, which I was proud to sign. I commend the Minister for the work that he did when he was Chair of the Foreign Affairs Committee on ensuring that the cancer of strategic legal action against public participants is something that we know about and are collectively determined to act on.

Within the sub judice rules and exemptions that govern the debate, I can talk about some of the evidence that we now have on the record. There are now so many cases that it has become clear that there is a playbook for oligarchs. It is a playbook that all of them know and all of them follow. It is a playbook that is now predictable, and it is a playbook that we must draw to a close. We could draw it to a close this afternoon by agreeing to the amendments that we have tabled with cross-party support.

The first step in the playbook is to target the individual. Do not target the company, because companies are strong and individuals are weak. That is exactly why Arron Banks went for Carole Cadwalladr. He did not want to go for The Guardian or the Scott Trust; he wanted to go for an individual journalist. That is exactly why Prigozhin, as we now learn, decided to target Eliot Higgins and not Bellingcat, because of course an individual is always more vulnerable than a corporate organisation. In most of these cases, we see an oligarch taking aim fair and square at an individual and not the corporate organisation behind them to maximise the power of intimidation.

Secondly, having identified the individual, the task is to maximise the intimidation. Let us look at what Tom Burgis had to go through when he was writing his book about the Eurasian Natural Resources Corporation. The bad guys whom he was trying to expose actually went to the lengths of tapping his phone and bugging him. They must have done—that was the only way in which their investigators could turn up to a secret meeting that he was having with former Government officials in a car park. Those are the lengths that these people will go to.

Thirdly, there is the business of exaggerating the claims: taking some aside in a bit of written material and exaggerating it ridiculously to try to multiply legal costs. We saw that in particular with Mr Abramovich in his case against Catherine Belton and HarperCollins. It was a ridiculously exaggerated claim. Of course, the objective for Mr Abramovich was not to win his case. All he sought to do was maximise the legal costs for HarperCollins and Catherine Belton.

We see that now in a case in the Royal Courts of Justice, which I will not name but which I sat through a couple of weeks ago. That case is so thin. It entails an oligarch basically trying to claim that a number of emails that have been sent are in effect tantamount to a publication. Even though he is unable to name and specify the harm that has been done, he is seeking to bring a case for defamation. It is the flimsiest of cases anyone could imagine, yet hundreds of thousands of pounds have now been racked up in legal costs in an attempt to intimidate someone out of telling the truth.

Step four is to co-ordinate with others, which we saw in particular with Mr Abramovich, who decided to round up a number of his old mates to try to bring some kind of collective action—not just in this country, by the way, but in other countries such as Australia. That was a way to double the legal costs and maximise the pain against Catherine Belton and HarperCollins.

Then we have the attempts to rack up costs even though the grounds may be as flimsy as anything. Forensic News, for example, is being sued by Walter Soriano. Forensic News has a total of 12 subscribers in this country, yet Walter Soriano has been allowed to prosecute the case because of those 12 subscribers. Why could he possibly be doing that? Is it, as the right hon. Member for Haltemprice and Howden described, because our legal costs are so high that the pain can be maximised by bringing a case here?

We see the same in the case referred to by my right hon. Friend the Member for Barking (Dame Margaret Hodge) of the former rulers of Kazakhstan, who have brought a SLAPPs case against the Bureau of Investigative Journalism and openDemocracy. That was because openDemocracy had the temerity to expose the $8 billion siphoned off through Jusan Technologies, which is somehow now claiming that its economic interests in the UK have been damaged and therefore it is entitled to bring a case in the Royal Courts of Justice. As a result, openDemocracy and the Bureau of Investigative Journalism are forking out thousands of pounds to defend themselves against this onslaught.

The situation we now have in this country is so appalling that, as we heard in the urgent question this afternoon, we have the spectacle of a Russian warlord being licensed by His Majesty’s Treasury to fly his lawyers to London to polish a case to sue an English journalist in an English court in order to undermine the sanctions this country has imposed on him. That is how ridiculous, corroded and broken our system has become. An exemption was licensed by a servant of the Crown to spend thousands of pounds flying lawyers to service the needs of the head of the Wagner Group in St Petersburg and to refine a lawfare case in an English court.

[Layla Moran]

The right hon. Member is making his point powerfully. Does he not agree that they are laughing at us, surely? We impose sanctions, yet this still happens. We are talking about the head of the Wagner Group—a group that is operational in many countries across the world. Are we seriously meant to believe that he had no access to money in any other jurisdiction anywhere else in the world—that he had to access his British pounds in order to instruct lawyers to do exactly as the right hon. Member has described? The whole thing is farcical, is it not?

[Liam Byrne]

The hon. Lady is absolutely right. Here we are, licensing a warlord to draw down funds and move them into the NatWest bank account of a London law firm to prosecute a case that undermines the sanctions we imposed on that warlord in the first place.

Let us briefly go through the timeline of the case because it is so important and illustrative of just how broken the system has become.

[Clive Efford (Eltham) (Lab)]

I commend my right hon. Friend for the work he has done consistently over a long period on this issue. It is important to highlight the scale of the problem in London. Is it not true that there are more SLAPP cases being taken in the London courts than there are in Europe and America put together? Does that not illustrate the scale of the problem and the urgency with which we need to deal with it?

[Liam Byrne]

My hon. Friend is absolutely right. I said earlier that London is now the preferred strike point for oligarchs in intimidating journalists. When the Foreign Policy Centre, whose work I must commend, surveyed investigative journalists, it found that three quarters of them had suffered some kind of legal attack to silence them. The UK legal system accounted for more of those legal actions than the United States and Europe put together. That is how bad this has now become. That is how rotten our system has now become. That is why it is so outrageous that the head of the Wagner Group was given the licences. Let us be clear about this guy. This is someone who has been running mercenary operations in Sudan, Mozambique, Syria, Central African Republic, Libya and Mali—and, of course, his forces have now been redeployed to the theatres in Ukraine.

It was in August 2020 that Eliot Higgins and Bellingcat began running a series of stories that exposed the barbarities of the Wagner Group in Africa, including offences such as the murder of CNN journalists. It took the British Government and the Foreign Office until 31 December 2020 to put sanctions on Prigozhin, even though, by the way, he had been sanctioned much earlier in the Unites States for the quiet sin of running troll farms intervening in the American presidential campaign. None the less, we got around to it at the back end of 2020. In the citation for sanctions, the Foreign, Commonwealth and Development Office wrote that Prigozhin was providing

“a deniable military capability for the Russian state”.

That feels quite a big sin to me, running a deniable military capability for the Russian state. That sounds like a pretty good reason for sanctions. That sounds like a pretty good reason for not offering carve-outs to sanctions to undermine them in British courts.

When Mr Prigozhin found out about the sanctions he was not very happy, so he sought to undermine them by suing Bellingcat, or Eliot Higgins in an English court. He had a choice and in fact a debate: “Do we do it in a Russian court, a Dutch court or an English court?” The conclusion was to go for Eliot Higgins in an English court. To prosecute the case, he had to fly the lawyers out to St Petersburg, so the Treasury licensed £4,788.04 to help make that happen: over £3,500 for business class flights, £320 for accommodation at the Grand Hotel Europe Belmond, £150 for subsistence—that’ll buy a pretty good dinner—£200 for PCR testing and £400 for express visas. That is what servants of the Crown, under the supervision of Ministers of the Crown, signed off.

The discussions went a bit like this. “What are the objectives here, Mr Prigozhin? Well, we think that, rather than seeking damages, what we really need is to get Mr Higgins for defamation because that is how we undermine all those irritating articles” that led to the sanctions against Mr Prigozhin. Literally, we enabled the enablers. We enabled the cash flow of a Russian warlord to prosecute an English journalist in an English court. And that is why we have to act. No one in this House today thinks that this is okay. The Minister for Security does not think that it is okay. All of us here think it has to stop, but if it is to stop, we have to take aim at the original sin: the fact that it is courts in this country that are being used by oligarchs around the world to silence journalists.

Our new clause, which has drawn cross-party support today, is very simple. It would not stop all strategic legal actions against public participants, but it would stop anybody attempting to silence journalists who are trying to reveal economic crimes. It is within scope; I am grateful to the Clerks for their work helping to refine it and make it good. I know that the Minister will say, as he said in Committee, that this is not the right Bill for it, or that it would not solve all the problems, but that is an argument for making the perfect the enemy of the good.

We have heard the Lord Chancellor talking about his ambition to change the law, but we have also heard that he seeks to do so through the Bill of Rights. The dogs in the street know that the Bill of Rights Bill is dead. It is not coming back to this House any time soon, yet today—this week, next week, next month—journalists and indeed ex-Members of this House are in court, having to pay legal bills because we allow oligarchs to abuse our courts. Let us at least make progress now.

I say to the Minister: please do not be the Minister for mañana. Please be the Minister who did not make the perfect the enemy of the good. Please be the Minister who seeks to do what he can with what we have, where we are, today. We could use this Bill to make progress. Why do we not seize that opportunity with both hands?

I am very grateful for the concerted campaign by Members across this House. I will end by saluting the courage, fortitude and determination of so many good journalists in this country. Oliver Bullough, who wrote the brilliant books “Moneyland” and “Butler to the World”, makes an excellent argument in his openDemocracy article today. He says that journalists going into the business of tackling economic crime have an uphill struggle as it is, with a lot of barriers in their way. They have a pretty difficult job, and the knowledge that the British Government are on the side of the bad guys does not make that job any easier. It is time that we put the force of the state and the force of the Crown behind the good guys for once—and that means agreeing to our new clause today.

[Ms Marie Rimmer (St Helens South and Whiston) (Lab)]

It is a great pleasure to follow my right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne). I applaud his commitment and thoroughness in the work that he has done.

I rise to support new clauses 1, 2, 4, 5, 6, 7 and 21. Economic crime is usually committed in the shadows, yet its impact is as clear as day: there are the American candy stores down Oxford Street, there are thousands of empty flats in London and—closer to my home—in Liverpool and Manchester, and we know how dirty money laundered here has financed the Russian invasion of Ukraine.

The crimes that the Bill aims to prevent are so often shrouded in secrecy. The Bill is necessary, as we can all agree, but the Government need to do it right. They need to accommodate sensible amendments—notably those investigated and researched by groups such as the all-party parliamentary group on anti-corruption and responsible tax, which my right hon. Friend the Member for Barking (Dame Margaret Hodge) has led tirelessly. Indeed, the Minister—the hon. Member for Thirsk and Malton (Kevin Hollinrake)—co-signed the manifesto on which many of today’s amendments are based, so I would expect him to support them. I urge him to do so.

New clauses 1 and 2 are crucial to getting a grip on the London laundromat. Journalists are the fourth estate in our society. They investigate and shed light on the secrecy that surrounds economic crime, yet only this week it was reported that journalist Eliot Higgins was hounded by a British law firm that was given permission by the Government to work on behalf of the murderous and barbaric Wagner Group. My right hon. Friend the Member for Birmingham, Hodge Hill has clearly outlined what has come out today and what he has been researching.

Wealthy oligarchs cannot be allowed to use English courts to threaten journalists with huge legal costs. If these wealthy individuals are able to abuse their wealth and power, no light will be shed on the secret world of economic crime.

17:00

New clauses 4 to 6 aim to introduce a corporate offence of failing to prevent economic crime. They are critical to removing the veil of secrecy. Fraud, false accounting, money laundering, bribery and tax evasion are witnessed by finance directors, accountants and chief executives. Whether they are willing participants, trying to keep quiet or, crucially, failing to take action, it must be a crime. Ignorance or neglect cannot be a defence, but it is not only senior management who should be held responsible. If senior management were involved, or knew and did nothing, the corporation must be liable. After all, a business is the people who work for it. Corporations are not faceless bodies. Putting the responsibility on the individual and the corporation will help to create a culture of transparency, which is one of the core purposes of the Bill—to bring economic crime out of the shadows.

New clause 7 covers whistleblowers, possibly the most important issue of all. As I have said, the best way to prevent economic crime is by removing the veil of secrecy. Whistleblowers provide the sunlight to do just that. Economic crime is not committed by faceless organisations, it is committed by people. If the Government introduce the protections for whistleblowers outlined in new clause 7, they will help law enforcement to do its job. Having laws in place to prosecute economic crime will do little unless whistleblowers can alert law enforcement agencies, but it is important to remember that whistleblowers are people and they have families and livelihoods to protect. Far too many lives have been shattered by a failure to protect whistleblowers. If the Government want to remove the veil of secrecy surrounding economic crime, protecting whistleblowers simply must be part of the strategy.

The past year has put a spotlight on the work that my right hon. Friends the Members for Barking and for Birmingham, Hodge Hill, my hon. Friend the Member for Rhondda (Sir Chris Bryant) and many others have done to put a spotlight on economic crime. Russia’s actions towards Ukraine have brought about the political will and urgency to get this Bill passed. The oligarchs, dictators and their supporters have had their money here for decades. The Bill needs to make sure that Britain is not a safe haven for economic crime. The veil of secrecy must be lifted and it must never return. It is not who we are. Britain should be playing no part in propping up their regimes.

I urge the Government to use the good will they have on this Bill and to support the new clauses I have mentioned. They should not waste this opportunity. The new clauses are bipartisan and based on evidence and politics. It is sickening and heartrending to see what is going on in Great Britain, America, China and Russia. Around the world, people are asking, “What is going on? What are politicians doing?” Many of us are ashamed and cannot hold our heads high. I urge the Government to give the public something worth having. The Bill gives us huge opportunities. I know the people on the Government Front Bench, I know where their hearts are, and I ask them to be brave, to use this opportunity to the maximum for today and tomorrow—it can be finalised in the future.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the Minister.

[Hon. Members]

Minister!

[Tom Tugendhat]

My apologies, Madam Deputy Speaker. For some reason I was under the impression that the hon. Member for Aberavon (Stephen Kinnock) would be speaking first.

[Stephen Kinnock]

No, no!

[Tom Tugendhat]

Oh, are you ducking out? Very well.

[Stephen Kinnock]

I will be back for Third Reading.

[Tom Tugendhat]

It is always a joy to hear from the hon. Gentleman.

[Madam Deputy Speaker]

Order. I think I should explain, for the benefit of Hansard, that the shadow Minister will be coming back on Third Reading. It is customary to go straight to the Minister, given that he moved the motion for the lead new clause.

[Tom Tugendhat]

I thought that we were to have the joy and the privilege of hearing from the hon. Member for Aberavon, who can never say too much in this Chamber, or indeed anywhere else—which is lucky, because he very rarely says too little.

It is a huge pleasure to have been here this afternoon. Members in all parts of the House have made extremely powerful points, but I will touch on just a few of them, because many have been covered at length and in detail on numerous other occasions. If Members will forgive me, I will deal straight away with a few of the matters that I think require immediate attention.

I thank my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland) for tabling new clause 6 and for the way in which he has approached the area of corporate criminal liability, in which he and I agree that reform is required. That is why the Government commissioned a review by the Law Commission, which my right hon. and learned Friend cited and which showed a definite need to clamp down on economic crime conducted by commercial organisations. We have been working closely across Government and with prosecutors in carefully considering its recommendations and how improvements can best be made. It is vital that any reform can be used by law enforcement agencies, does not duplicate what already exists and avoids placing unnecessary burdens on legitimate businesses, but we must also operate within the constraints of the Bill.

I share my right hon. and learned Friend’s passion for change. I am immensely grateful for his thoughtful input, and I greatly value my engagement with him, and with other Members, on this issue. I can assure him that the Government intend to address the need for a “failure to prevent” offence in the other place, and I would welcome further discussion with him about the most effective way in which that can be done.

[Sir Robert Buckland]

I am extremely grateful for what my right hon. Friend has said, but may I gently press him on the issues of “failure to prevent”, fraud, money laundering and false accounting offences—I accept that they may well have to be separate—and a further discussion on the identification doctrine? If so, I will not need to press my new clauses to a vote.

[Tom Tugendhat]

My right hon. and learned Friend is certainly more learned than me, and I will certainly be listening to his views. There are a number of areas that I am sure we will be able to discuss, and I am sure we will reach a conclusion that is acceptable to all sides.

[Dame Margaret Hodge]

I am grateful for the assurance that an amendment will be introduced in another place, but may I also have an assurance that it will cover both corporations and individual directors?

[Tom Tugendhat]

The right hon. Lady knows very well that I would find it impossible not to listen to her. I look forward to seeing how we can return to this issue. The Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), will no doubt wish to have a strong input as well, so I shall say no more at this stage.

Let me now touch on the question of whistleblowers, and pay enormous tribute to my hon. Friend the Member for Cheadle (Mary Robinson), who has been a friend of many of us for a number of years since she was first elected and who has championed, consistently and clearly, the need for an office for whistleblowers. She is absolutely right: what the country needs is an office for whistleblowers, and what we need to do is ensure that we have the updates to the legislation that she so correctly highlighted. The establishment of such an office would, however, be a significant undertaking. It would have major financial applications owing to its size, it would require significant staffing, and, as matters stand, it might duplicate the role of regulators without the same level of sector expertise. I know that my hon. Friend had the opportunity to meet my hon. Friend the Under-Secretary of State earlier this week to discuss her new clause and plans for the review, which I understand will be set out soon, I hope that the meeting was constructive.

[Mary Robinson]

I have indeed had a meeting with the Under-Secretary to discuss this. There is a long way to go on it and I am steadfast about setting up the office for whistleblowers. However, the conversations have been constructive, I am grateful to Ministers and I will not be pressing my new clause to a vote.

[Tom Tugendhat]

I am grateful to my hon. Friend for that and to the Under-Secretary for having had those conversations. He knows my support for her interest in this important matter.

Clearly, many amendments have been tabled today. The last point I wish to make before we move on to Third Reading is that the Government listened an awful lot on this Bill. Many of us, including myself and the Under-Secretary, who have been taking it through this place, have been listening extremely carefully, for many reasons. One of those reasons is that we picked this up, as many people do, a long way down its process of drafting and through its progress through this House. No doubt there are areas where all of us could tweak, adjust, test and push, but we think that the Bill offers major progress on the situation where we began; I am delighted that that point was shared across this House. So although there are areas where we could have further discussion—I am sure the other place will have criticisms and comment, and we will have improvements and additions—we feel that this Bill, as it stands, is a vast improvement on where we are. Although there is progress to be made, and there always will be, we believe that the Bill marks a useful point of progress for our country in fighting economic crime.

Question put and agreed to.

New clause 14 accordingly read a Second time, and added to the Bill.

New Clause 3

Home Office review of the Tier 1 (Investor) visa scheme: publication

“Home Office review of the Tier 1 (Investor) visa scheme: publication

Within a day of the passage of this Act, the Secretary of State must publish in full the findings of the Home Office review of the Tier 1 (Investor) visa scheme which relate to economic crime.” —(Layla Moran.)

Brought up, and read the First time.

Question put, That the clause be read a Second time.

17:11

Division 159

Ayes: 220

---

Labour: 158
Scottish National Party: 38
Liberal Democrat: 10
Independent: 6
Plaid Cymru: 3
Social Democratic & Labour Party: 1
Alliance: 1
Green Party: 1
Alba Party: 1

Noes: 290

---

Conservative: 284
Independent: 2
Democratic Unionist Party: 2

New Clause 26

Beneficial owners in overseas territories

‘(1) The Sanctions and Anti-Money Laundering Act 2018 is amended as follows.

(2) In section 51, after subsection (5) insert—

“(5A) The Secretary of State must ensure that the Order in Council under subsection (2) above comes into effect on date no later than 30 June 2023.”’—(Stephen Kinnock.)

This new clause would amend the Sanctions and Anti-Money Laundering Act 2018 to ensure that an Order in Council requiring open registers of beneficial ownership in the British Overseas Territories comes into force no later than 30 June 2023.

Brought up, and read the First time.

Question put, That the clause be read a Second time.

17:27

Division 160

Ayes: 222

---

Labour: 159
Scottish National Party: 39
Liberal Democrat: 10
Independent: 6
Plaid Cymru: 3
Democratic Unionist Party: 2
Social Democratic & Labour Party: 1
Green Party: 1
Alba Party: 1

Noes: 289

---

Conservative: 285
Independent: 2

New Clause 27

Compensation for Victims of Economic Crime

“(1) The Secretary of State must, no later than 90 days from the date on which this Act comes into force, publish and lay before Parliament a strategy for the potential establishment of a fund for the compensation of victims of economic crime.

(2) The strategy may include provisions on the management and disposal of any assets realised by the government, or any body with law enforcement responsibilities in relation to economic crime, under relevant UK legislation.”—(Stephen Kinnock.)

This new clause would require the Secretary of State to prepare and publish a strategy on the potential establishment of a fund to provide compensation to victims of economic crime.

Brought up, and read the First time.

Question put, That the clause be read a Second time.

17:40

Division 161

Ayes: 221

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Labour: 157
Scottish National Party: 39
Liberal Democrat: 9
Independent: 6
Plaid Cymru: 3
Democratic Unionist Party: 2
Social Democratic & Labour Party: 1
Green Party: 1
Alba Party: 1

Noes: 289

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Conservative: 287
Independent: 2

Clause 171

Information orders: money laundering

Amendments made: 44, page 152, leave out lines 20 to 29 and insert—

“(a) a request has been made by a foreign FIU to the National Crime Agency for the provision of the information required to be given under the order,

(b) the National Crime Agency has reasonable grounds to believe that the information would assist the foreign FIU to conduct—

(i) operational analysis of information that is relevant to money laundering or suspected money laundering, or

(ii) strategic analysis identifying trends or patterns in the conduct of money laundering, or systematic deficiencies or vulnerabilities which have been, are being or are likely to be, exploited for the purposes of money laundering,

and that the information is likely to be of substantial value to the foreign FIU in carrying out such analysis,

(ba) the provision of the information by the National Crime Agency to the foreign FIU would be for the purposes of the criminal intelligence function of the National Crime Agency, so far as it relates to money laundering,”.

This amendment modifies the conditions that have to be met before an information order can be granted by a court to provide information to the National Crime Agency in a case where a request for the information has been made by a foreign financial intelligence unit.

Amendment 45, page 152, leave out lines 32 to 34.—(Tom Tugendhat.)

This amendment is consequential on Amendment 44.

Clause 172

Information orders: terrorist financing

Amendments made: 46, page 155, leave out lines 29 to 38 and insert—

“(a) a request has been made by a foreign FIU to the National Crime Agency for the provision of the information required to be given under the order,

(b) the National Crime Agency has reasonable grounds to believe that the information would assist the foreign FIU to conduct—

(i) operational analysis of information that is relevant to terrorist financing or suspected terrorist financing, or

(ii) strategic analysis identifying trends or patterns in the conduct of terrorist financing, or systematic deficiencies or vulnerabilities which have been, are being or are likely to be, exploited for the purposes of terrorist financing,

and that the information is likely to be of substantial value to the foreign FIU in carrying out such analysis,

(ba) the provision of the information by the National Crime Agency to the foreign FIU would be for the purposes of the criminal intelligence function of the National Crime Agency, so far as it relates to terrorist financing,”.

This amendment modifies the conditions that have to be met before an information order can be granted by a court to provide information to the National Crime Agency in a case where a request for the information has been made by a foreign financial intelligence unit.

Amendment 47, page 155, leave out lines 41 to 43.—(Tom Tugendhat.)

This amendment is consequential on Amendment 46.

Clause 175

Indirect disclosure of information: restrictions on civil liability

Amendments made: 48, page 160, line 12, leave out “1(1)(l) or” and insert “1(1)(j) to”.

The amendment extends the categories of business in the regulated sector in relation to which clause 175 applies, to include business in the audit, insolvency and tax sectors.

Amendment 49, page 160, line 13, leave out “accountancy” and insert

“audit, insolvency, accountancy, tax”.—(Tom Tugendhat.)

This amendment is consequential on Amendment 48.

Clause 188

Commencement

Amendments made: 50, page 169, line 4, at end insert—

“(1A) Section (Reports on the implementation and operation of Parts 1 to 3) comes into force at the end of the period of 2 months beginning with the day on which this Act is passed.”

This amendment provides for NC15 to come into force 2 months after royal assent.

Amendment 57, page 169, line 7, at end insert—

“(2A) The following come into force on the day on which this Act is passed—

(a) paragraph 1 of Schedule 7 so far as it inserts section 303Z25 into the Proceeds of Crime Act 2002, and

(b) section 167 so far as it relates to that paragraph.”

This amendment provides for inserted section 303Z25 of the Proceeds of Crime Act 2002 (requirement to prepare codes of practice in relation to powers to search for cryptoasset-related items) to come into force on the day on which this Act is passed.

Amendment 51, page 169, line 8, after “subsection” insert “(1A) or”.

This amendment is consequential on Amendment 50.

Amendment 58, page 169, line 8, after “(2)” insert “or (2A)”.—(Tom Tugendhat.)

This amendment is consequential on Amendment 57.

Schedule 6

Cryptoassets: confiscation orders

Amendments made: 59, page 201, line 39, leave out “sheriff” and insert “relevant court”.

This amendment and Amendments 60 and 61 amend inserted section 131ZB of the Proceeds of Crime Act 2002 (realisation of confiscated cryptoassets) to provide that (as well as the sheriff) the High Court of Justiciary and the Sheriff Appeal Court may make an order under that section requiring confiscated cryptoassets to be realised.

Amendment 60, page 202, line 11, leave out “sheriff of the sheriff’s” and insert “relevant court of its”.

See Amendment 59.

Amendment 61, page 202, line 19, at end insert—

“(7) In this section ‘relevant court’ means—

(a) the court which makes the confiscation order, or

(b) the sheriff court responsible for enforcing the confiscation order under section 211 of the Procedure Act as applied by section 118(1).”

See Amendment 59.

Amendment 62, page 203, line 24, leave out “sheriff” and insert “relevant court”.

This amendment and Amendments 63, 64, 65 and 66 amend inserted section 131AA of the Proceeds of Crime Act 2002 (destruction of seized cryptoassets) to provide that (as well as the sheriff) the High Court of Justiciary and the Sheriff Appeal Court may make an order under that section requiring seized cryptoassets to be destroyed.

Amendment 63, page 203, line 41, leave out “sheriff of the sheriff’s” and insert “relevant court of its”.

See Amendment 62.

Amendment 64, page 203, line 43, leave out “sheriff’s” and insert “relevant court’s”.

See Amendment 62.

Amendment 65, page 204, line 3, leave out “sheriff” and insert “relevant court”.

See Amendment 62.

Amendment 66, page 204, line 12, at end insert—

“(8) In this section ‘relevant court’ means—

(a) the court which makes the confiscation order mentioned in subsection (2)(a), or

(b) the sheriff court responsible for enforcing that confiscation order under section 211 of the Procedure Act as applied by section 118(1).”

See Amendment 62.

Amendment 67, page 204, line 14, leave out “131ZB(3), 131A(3) or 131AA(2)” and insert “131A(3)”.

This amendment is consequential on Amendment 68.

Amendment 68, page 204, line 14, at end insert—

“(1A) After subsection (1) insert—

‘(2A) If the relevant court decides not to make an order under section 131ZB(3) or 131AA(2), the prosecutor may appeal to the Court of Session.’”

This amendment amends section 131C of the Proceeds of Crime Act 2002 (appeals under sections 131A and 131B) to make provision for prosecutors to appeal to the Court of Session against a decision of the relevant court not to make an order under section 131ZB or 131AA of that Act.

Amendment 69, page 204, line 15, leave out sub-paragraph (3) and insert—

“(3) For subsection (2) substitute—

‘(2) If—

(a) a sheriff makes an order under section 131A(3), or

(b) the relevant court makes an order under section 131ZB(3) or 131AA(2),

a person affected by the order may appeal to the Court of Session.’”

This amendment amends section 131C of the Proceeds of Crime Act 2002 (appeals under sections 131A and 131B) to make provision for a person affected by an order made under section 131A, 131ZB or 131AA of that Act to appeal to the Court of Session.

Amendment 70, page 204, line 17, at end insert—

“(4A) After subsection (7) insert—

‘(8) In this section “relevant court”—

(a) in relation to a decision or order made under section 131ZB, has the same meaning as in that section, and

(b) in relation to a decision or order made under section 131AA, has the same meaning as in that section.’”

This amendment is consequential on Amendments 68 and 69.

Amendment 71, page 204, line 32, leave out “the sheriff” and insert “a court”.—(Tom Tugendhat.)

This amendment is consequential on Amendment 62.

Schedule 7

Cryptoassets: civil recovery

Amendments made: 72, page 218, line 25, at end insert—

“(2) A requirement in section 303G(2), 303H(2) or 303I(2), as applied by subsection (1), to carry out a relevant action may be satisfied by the carrying out of that action before this section comes into force.

(3) In subsection (2) ‘relevant action’ means any of the following—

(a) publishing a draft code of practice;

(b) considering any representations made about the draft;

(c) modifying the draft in light of any such representations.

(4) The requirement in section 303G(3), as applied by subsection (1), to consult the Attorney General may be satisfied by consultation carried out before this section comes into force.”

This amendment amends inserted section 303Z25 of the Proceeds of Crime Act 2002 (cryptoassets: codes of practice) to provide that certain preliminary steps in relation to the making of a code of practice under that section (for example, consulting on a draft code of practice) may be carried out before that section comes into force.

Amendment 73, page 220, line 36, at end insert—

“(c) by the Scottish Ministers in connection with their functions under this Part, to an authority exercising equivalent functions in a foreign country, or

(d) by a person under section 375A or 408A (evidence overseas).”

This amendment and Amendments 74, 75, 79 and 80 provide that a “request for assistance” in inserted Chapters 3C to 3F of Part 5 of the Proceeds of Crime Act 2002 (cryptoassets: civil recovery) includes a request made by the Scottish Ministers to an authority exercising equivalent functions in a foreign country or a request made under section 375A or 408A of that Act.

Amendment 74, page 222, line 45, at end insert—

“(c) by the Scottish Ministers in connection with their functions under this Part, to an authority exercising equivalent functions in a foreign country, or

(d) by a person under section 375A or 408A (evidence overseas).”

See Amendment 73.

Amendment 75, page 227, line 17, at end insert—

“(c) by the Scottish Ministers in connection with their functions under this Part, to an authority exercising equivalent functions in a foreign country, or

(d) by a person under section 375A or 408A (evidence overseas).”

See Amendment 73.

Amendment 76, page 229, line 6, leave out from “detained” to “or” in line 7 and insert “under Chapter 3C”.

This amendment provides that cryptoassets detained under any provision of Chapter 3C of Part 5 of the Proceeds of Crime Act 2002 (forfeiture of cryptoassets) (including under section 303Z31 of that Act) are subject to forfeiture under section 303Z41 of that Act.

Amendment 77, page 230, line 20, leave out from “detained” to end of line 21 and insert “under Chapter 3C”.

This amendment is consequential on Amendment 76.

Amendment 78, page 230, line 22, leave out

“in pursuance of the order”

and insert “under Chapter 3C”.

This amendment is consequential on Amendment 76.

Amendment 79, page 246, line 18, at end insert—

“(c) by the Scottish Ministers in connection with their functions under this Part, to an authority exercising equivalent functions in a foreign country, or

(d) by a person under section 375A or 408A (evidence overseas).”

See Amendment 73.

Amendment 80, page 247, line 18, at end insert—

“(c) by the Scottish Ministers in connection with their functions under this Part, to an authority exercising equivalent functions in a foreign country, or

(d) by a person under section 375A or 408A (evidence overseas).”

See Amendment 73.

Amendment 81, page 254, line 41, after “303Z30” insert “, 303Z31”.

This amendment and Amendments 82, 83, 84, 85 and 86 provide that where cryptoassets are detained under section 303Z31 of the Proceeds of Crime Act 2002 (seizure of cryptoassets) or paragraph 10Z7AF of Schedule 1 to the Anti-terrorism, Crime and Security Act 2001 (seizure of terrorist cryptoassets) and are subject to an application for forfeiture, those cryptoassets are not “free property” for the purposes of the Proceeds of Crime Act 2002.

Amendment 82, page 255, line 2, after “10Z7AE” insert “, 10Z7AF”.

See Amendment 81.

Amendment 83, page 255, line 26, after “303Z30” insert “, 303Z31”.

See Amendment 81.

Amendment 84, page 255, line 32, after “10Z7AE” insert “, 10Z7AF”.

See Amendment 81.

Amendment 85, page 256, line 8, after “303Z30” insert “, 303Z31”.

See Amendment 81.

Amendment 86, page 256, line 14, after “10Z7AE” insert “, 10Z7AF”.

See Amendment 81.

Amendment 87, page 258, line 12, at end insert—

“(5A) After section 311 insert—

‘Chapters 3C to 3F: supplementary

311A Financial investigators

(1) This section applies where an accredited financial investigator of a particular description—

(a) applies for an order under section 303Z28, 303Z32, 303Z57 or 303Z58 (further detention of cryptoassets etc),

(b) applies for forfeiture under section 303Z41 or 303Z60 (forfeiture of cryptoassets etc), or

(c) brings an appeal under, or relating to, Chapter 3E or 3F (cryptoassets etc).

(2) Any subsequent step in the application or appeal, or any further application or appeal relating to the same matter, may be taken, made or brought by a different accredited financial investigator of the same description.’”

This amendment contains a consequential amendment to Part 5 of the Proceeds of Crime Act 2002. It inserts new section 311A, which includes provision about accredited financial investigators making certain applications or appeals in relation to Chapters 3C to 3F of that Part.

Amendment 88, page 258, line 13, after “Scottish Ministers)” insert

“—

(a) in paragraph (c), for “271(3) and (4)” substitute “271”, and

(b) ”.

This amendment amends section 312(2) of the Proceeds of Crime Act 2002 (performance of functions of Scottish Ministers by constables in Scotland) to provide that all functions of the Scottish Ministers within section 271 of that Act (agreements about associated and joint property) may not be performed by constables.

Amendment 89, page 258, line 16, at end insert—

“(ra) section 303Z28(5)(b) (further detention of seized cryptoasset-related items);

(rb) section 303Z32(5)(b) (further detention of seized cryptoassets);

(rc) section 303Z34(4) and (5)(b)(i) (release of cryptoassets and cryptoasset-related items);”.

This amendment and Amendments 90 and 91 consequentially amend section 312(2) of the Proceeds of Crime Act 2002 (performance of functions of Scottish Ministers by constables in Scotland) to provide that certain functions of the Scottish Ministers in inserted Chapters 3C to 3F of Part 5 of that Act may not be performed by constables.

Amendment 90, page 258, line 20, at end insert—

“(ua) section 303Z44 (agreements about associated and joint property);

(ub) section 303Z45(10) (associated and joint property: default of agreement);

(uc) section 303Z46(2) (continuation of crypto wallet freezing order pending appeal);

(ud) section 303Z47(1) (sections 303Z41 to 303Z45: appeals);”.

See Amendment 89.

Amendment 91, page 258, line 25, at end insert—

“(y) section 303Z61(1) (appeal against decision under section 303Z60).”

See Amendment 89.

Amendment 92, page 263, line 6, at end insert—

“11A In section 453B of the Proceeds of Crime Act 2002 (certain offences in relation to SFO officers), in subsection (5), after paragraph (g) insert—

‘(ga) section 303Z21 (powers to search for cryptoasset-related items);

(gb) section 303Z26 (powers to seize cryptoasset-related items);

(gc) section 303Z27 (powers to detain cryptoasset-related items;’.” —(Tom Tugendhat.)

This amendment consequentially amends section 453B of the Proceeds of Crime Act 2002 (certain offences in relation to SFO officers) to provide that the offences in that section apply in relation to an SFO officer who is acting in exercise of certain cryptoasset-related powers in inserted Chapter 3C of Part 5 of that Act.

Schedule 8

Cryptoassets: terrorism

Amendments made: 93, page 267, line 19, at end insert—

“(c) by the Scottish Ministers in connection with their functions under this Schedule, to an authority exercising equivalent functions in a foreign country, or

(d) by a person under section 375A or 408A of the Proceeds of Crime Act 2002 (evidence overseas).”

This amendment and Amendments 94, 95, 99 and 100 provide that a “request for assistance” in inserted Parts 4BA to 4BD of Schedule 1 to the Anti-terrorism, Crime and Security Act 2001 (cryptoassets: terrorism) includes a request made by the Scottish Ministers to an authority exercising equivalent functions in a foreign country or a request made under section 375A or 408A of the Proceeds of Crime Act 2002.

Amendment 94, page 270, line 12, at end insert—

“(c) by the Scottish Ministers in connection with their functions under this Schedule, to an authority exercising equivalent functions in a foreign country, or

(d) by a person under section 375A or 408A of the Proceeds of Crime Act 2002 (evidence overseas).”

See Amendment 93.

Amendment 95, page 274, line 33, at end insert—

“(c) by the Scottish Ministers in connection with their functions under this Schedule, to an authority exercising equivalent functions in a foreign country, or

(d) by a person under section 375A or 408A of the Proceeds of Crime Act 2002 (evidence overseas).”

See Amendment 93.

Amendment 96, page 277, line 3, leave out from “detained” to “or” in line 4 and insert “under Part 4BA”.

This amendment provides that cryptoassets detained under any provision of Part 4BA of Schedule 1 to the Anti-terrorism, Crime and Security Act 2001 (seizure and detention of terrorist cryptoassets) (including under paragraph 10Z7AF of that Schedule) are subject to forfeiture under paragraph 10Z7CA of that Schedule.

Amendment 97, page 278, leave out line 4 and insert “under Part 4BA”.

This amendment is consequential on Amendment 96.

Amendment 98, page 278, line 5, leave out “in pursuance of the order” and insert “under Part 4BA”.

This amendment is consequential on Amendment 96.

Amendment 99, page 295, line 20, at end insert—

“(c) by the Scottish Ministers in connection with their functions under this Schedule, to an authority exercising equivalent functions in a foreign country, or

(d) by a person under section 375A or 408A of the Proceeds of Crime Act 2002 (evidence overseas).”

See Amendment 93.

Amendment 100, page 296, line 16, at end insert—

“(c) by the Scottish Ministers in connection with their functions under this Schedule, to an authority exercising equivalent functions in a foreign country, or

(d) by a person under section 375A or 408A of the Proceeds of Crime Act 2002 (evidence overseas).”—(Tom Tugendhat.)

See Amendment 93.

Third Reading

17:52

[Tom Tugendhat]

I beg to move, That the Bill be now read the Third time.

I will briefly thank a few people on my behalf and on behalf of the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake). I must thank my noble friend Lord Callanan, the Minister for Business, Energy and Corporate Responsibility, who continues to do so much to support the Bill and has been a great help. I also thank the Home Office Minister, Lord Sharpe of Epsom, who is a fantastic asset to our Department.

I thank my right hon. Friend the Member for East Hampshire (Damian Hinds) and my hon. Friend the Member for Sutton and Cheam (Paul Scully), who helped so much to prepare the Bill. Furthermore, I thank my hon. Friend the Member for Watford (Dean Russell), who ably shepherded the Bill through its early parliamentary stages, and the Lord Commissioner of His Majesty’s Treasury, my hon. Friend the Member for North Cornwall (Scott Mann), and his team for their excellent assistance, particularly when he courageously stood in and answered on behalf of the Department in a brief moment of surprise—mostly to him. I also thank the Home Secretary and the Secretary of State for Business, Energy and Industrial Strategy for their contributions.

[Sir Robert Neill (Bromley and Chislehurst) (Con)]

I thank the Minister for his positive response to the amendments tabled by my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland) and others in relation to the reform of corporate criminal responsibility. That is welcome. Will he take on board the importance of including in that the reform of the identification principle, which is a major bar to corporate prosecutions? The Justice Committee has called for that more than once in its recent reports, and it is supported by the current and previous Directors of Public Prosecutions and the current and previous Directors of the Serious Fraud Office.

[Tom Tugendhat]

I thank my hon. Friend the Chair of the Justice Committee. As he knows, this is an area of great interest and for further discussion, which we are indeed looking at taking forward.

I finish by saying an enormous thank you to the Bill team, who are in the Box today—Tom Ball and the rest of the clan—who have done a fantastic job on Burns night, of all times. Because it is a time for us to find that we are no longer wee and tim’rous beasties, but are instead going to look for that fair trojan of the human race, the “puddin’-race”—forgive me—I look forward very much to being freed of the Dispatch Box and skipping off to the whisky and the haggis. On that, Mr Deputy Speaker, thank you.

[Mr Deputy Speaker (Mr Nigel Evans)]

Lucky Minister. I call the shadow Minister.

17:55

[Stephen Kinnock]

Like the Minister, I am keen to thank colleagues who have done so much and made so many valued contributions both to this Bill throughout its progress and in the debate today. I would very much like to thank the Bill team for the excellent work they have done, as always supporting us through our work and on many occasions helping to shed light where there was more or less total confusion, so we really appreciate that. I also thank our own staff. My hon. Friend the Member for Feltham and Heston (Seema Malhotra) and I are very fortunate to have wonderful teams supporting us—particularly colleagues such as Joe Bishop, Danny Hathaway and Joe Jervis—who have done so much in our teams to help us to get to this point.

It is worth just casting our minds back to October, when the Prime Minister stood on the steps of Downing Street and stated that he wanted a Government of “integrity, accountability and professionalism”. Well, we are almost 100 days into his tenure, so we are bound to take stock of how that is going, and I think it is fair to say that progress has been somewhat mixed. His Home Secretary has committed multiple breaches of the ministerial code, his chairman has just been exposed for tax avoidance on a massive scale and his claims—

[Mr Deputy Speaker]

Order. Mr Kinnock, you are going really wide of the mark on Third Reading. Please could you focus on the Bill that is having its Third Reading?

[Stephen Kinnock]

Thank you very much, Mr Deputy Speaker. I was just about to make the point that the Home Secretary has talked of learning the lessons from the golden visas issue, but she still has not published the full report. Of course, we have seen many oligarchs getting those visas since the invasion of Crimea, so I would contend that that is directly relevant to the debate we are having today.

That is the key point. It is about striving for integrity, professionalism and accountability. Of course the Bill offers an outstanding opportunity to deliver the change we all want to see. As we have said on many occasions, it is a step in the right direction and we are supporting it on Third Reading, but of course it still does not go far enough on SLAPPs, golden visas, information sharing, corporate transparency, corporate criminal liability, compensating victims or, indeed, structures for enforcement.

That final point is critical. We can have all the laws we want, but if we do not enforce them—whether we are talking about economic crime or anything else—they are pointless. These were points that Bill Browder made forcefully during the evidence that he gave to our Committee and, on cryptocurrency, that the expert Aidan Larkin made in a recent meeting with me. So we need to ensure that the agencies and institutions that should be fighting the illicit finance we all want to combat are given the resources they need, and are given the political support and licence to operate they have to have if they are going to be able to deliver on what we want them to deliver.

In conclusion, the fact is that we have left the back door open and allowed our country to become a kind of fixer for the world’s dictators, kleptocrats and gangsters. We cannot go around the world preaching about the rule of law and transparency until we get our own house in order. We should not have to wait for the next “Panama Papers” or the illegal invasion of another country to force us into taking action. I said at the outset of the debate that the Opposition have approached this Bill in a spirit of constructive engagement. That has not changed and it will not change. However, we have not so far seen from Ministers sufficient openness to input from Opposition Members, or even from many of their own Back Benchers, but we welcome the remarks that the Minister made in his winding-up speech. We look forward to the progress that we wish to see being made in the other place as rapidly as possible. It is not too late, there is still time, and I genuinely hope that the remaining stages of the Bill will see the gaps filled, the loopholes closed, and the opportunities seized.

18:01

[Alison Thewliss]

I thank everybody who has contributed to the Bill. It has been a cross-party and worthwhile effort, and everybody who has been part of it has felt that. I hope the Government do their bit and take that cross-party effort in the spirit in which we meant it. We want to improve the Bill and for it to do everything it can do right now, rather than waiting for some distant point in the future when we come back and say, “We’ve still got these problems and this Bill, which could have addressed them, has not.” We have been there before. We had the Sanctions and Anti-Money Laundering Bill, and other Bills while I have been in this House could have addressed or fixed these problems, yet we are here again today still not fixing all the problems. Who knows when parliamentary time will allow us to pass this way again.

I thank the experts who have given so much evidence to us individually and as parliamentarians in Committee and other places. In particular I thank Helena Wood of the Royal United Services Institute, Duncan Hames of Transparency International, Bill Browder, Oliver Bullough and Graham Barrow, the expert on Companies House. He has had his own health issues but has continued to campaign on Companies House. We wish him well and a speedy recovery, and all the best with his treatment.

I also thank my hon. Friend the Member for Paisley and Renfrewshire North (Gavin Newlands). He came on board with this Bill and was very supportive and helpful throughout its passage, raising the issue of phoenixing, which is of concern to many of our constituents. I encourage the Government to look at how they can fix phoenixing, and ensure that our constituents and companies based in our constituencies do not fall victim to companies that seek to abuse the system in such a way. I give great thanks to the right hon. Member for Barking (Dame Margaret Hodge) who has been such a tremendous champion for all these issues over a long period. Her expertise, her contribution, and the way that she convenes people within this place has been incredibly important for this agenda, and I cannot thank her enough for that work.

I thank the Clerks and the Bill team for all they have done to help support us throughout the passage of the Bill. Putting together all the amendments is not easy, and under pressures of time they have been incredibly helpful in putting them together for us. I also thank Mhairi Love in my own office, and Sarah Callaghan in the SNP research office. Again, they have been incredibly helpful in putting together research on all these areas, and putting up with me when I go down a big rabbit hole of all the things about economic crime that live in my head most of the time. They have been very helpful indeed over the course of things.

I want to make an announcement, Mr Deputy Speaker, before everybody departs—[Interruption.] I am not going to the Government Benches; the Minister is welcome over here any time. I am not sure that his constituents would expect him to be an SNP Member, but any time he feels the need that is fine. As it is Burns Night, there is haggis in the canteen, and I encourage everybody to partake and get their honest, sonsie faces over to the canteen before it goes. I am looking forward to mine. Not related in any way to the Bill, the Ayrshire Fiddlers—not that kind of fiddlers—are in Strangers Bar, and Members should go and see them because they are very good indeed. Crucially for this Bill they are playing the fiddle and they are not on the fiddle, so please go and give them your support.

I finish with some lines from our national bard:

“O, wad some power the giftie gie us

To see oursels as others see us!

It wad frae monie a blunder free us,

An’ foolish notion.”

I ask Ministers to reflect on how others will see the Bill and make amendments to it in the other place to make it befitting of the commitment that we all have to seeing economic crime removed.

[Mr Deputy Speaker (Mr Nigel Evans)]

Happy Burns Night, everyone.

Question put and agreed to.

Bill accordingly read the Third time and passed.

Business without Debate

Wednesday 25th January 2023 Commons Chamber

Delegated Legislation

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Social Security

That the draft Bereavement Benefits (Remedial) Order 2022, which was laid before this House on 13 October 2022, be approved.—(Joy Morrissey.)

[Relevant Documents: Eighth Report of the Joint Committee on Human Rights, Draft Bereavement Benefits (Remedial) Order 2022: Second Report, HC 834]

Question agreed to.

Petitions

Wednesday 25th January 2023 Commons Chamber

18:05

[Mr Peter Bone (Wellingborough) (Con)]

I rise to present a petition, the lead petitioner being Mr Aran Whiting. It is a rather unusual petition in that it supports what North Northamptonshire Council is doing and does not want any change. The easiest way to explain the petition will be to read it. It states:

The humble petition of the residents of Da Vinci Court, Wellingborough, Northamptonshire,

Sheweth,

That the petitioners believe that the care needs of Da Vinci Court residents have not been adequately considered in North Northamptonshire Unitary Council’s Care Provider Services Strategy and that these needs cannot be adequately met by agency staff due to a lack of continuity and stability for service users,

Wherefore your petitioners pray that your honourable House urges the Secretary of State for Health and Social Care to work with North Northamptonshire Unitary Council to consider the concerns of the petitioners and ensure that measures are implemented to protect the quality of care the residents of Da Vinci Court receive.

And your petitioners, as duty bound, will ever pray, &c.

[P002790]

18:07

[Anne McLaughlin (Glasgow North East) (SNP)]

The usual laws of commerce and capitalism are that buy first, pay later costs more and that those who can pay in advance will get a discount. The direct opposite is true for people on prepayment meters. Nearly 67,000 people in Glasgow alone are paying more than I am for their gas and electricity, and in daily standing charges. I object to that because I and other people on higher incomes not only get to pay in arrears and have the comfort of a guaranteed supply of energy, but, somehow, get to pay less. I also object because the vast majority of people on prepayment meters are on them because they have had some financial challenges. They should be helped, not punished.

The petition states:

The petitioners therefore request that the House of Commons urge the Government to ensure that prepayment meter energy customers do not pay more than standard credit or direct debit energy customers.

Following is the full text of the petition:

[The petition of residents of the United Kingdom,

Declares that 4.5 million pre-payment energy customers, who are some of the most vulnerable in society and are more likely to be classed as fuel poor, pay more for their energy than standard credit or direct debit customers; notes that prepayment meter customers will pay, on average, an additional 20p per day in standing charges alone; notes that regional variations in standing charges for prepayment meter customers can see customers in the North of Scotland paying 17.82p per day more than those in London, notes the surge in forced prepayment meter installations and reports that some 3.2 million prepayment meter customers were disconnected from their supply as they ran out of credit, more in 2022 than in the last 10 years combined; recognises the perverse injustice that the poorest and most vulnerable in our society pay more for their energy, and that for many they have no choice in how they pay for their energy.

The petitioners therefore request that the House of Commons urge the Government to ensure that prepayment meter energy customers do not pay more than standard credit or direct debit energy customers.

And the petitioners remain, etc.]

[P002796]

Britishvolt

Wednesday 25th January 2023 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Joy Morrissey.)

18:08

[Ian Lavery (Wansbeck) (Lab)]

On a point of clarification at the outset, it is important that the media and everyone else involved recognise that the Britishvolt site is in the East Bedlington parish of my constituency of Wansbeck, contrary to most media reports.

The rise and fall of Britishvolt and its dream to build a gigafactory in Cambois, in Wansbeck, is an incredibly important story not only of how the Government have once again failed people in the north-east, but of how the wider lack of an industrial strategy, in particular regarding the automotive industry, is putting thousands of jobs at risk and making the creation of high-quality manufacturing jobs—like the ones promised by Britishvolt —nothing but a pipe dream.

Due to its proximity to the old Blyth power station and the local deep sea port, the fact that it is fully plugged into the national grid, with a potential supply of green hydroelectric power from Norway at a competitive price, and its fantastic transport links and planning permission, Cambois is the most attractive and desirable site in the country, if not in Europe, for a gigaplant—those are not my words, but those of many industry experts.

However, the biggest asset is the people of our great region, who once again feel terribly let down by the situation that has been allowed to develop with Britishvolt.

[Jon Trickett (Hemsworth) (Lab)]

I am grateful to my hon. Friend, who is a great champion for his constituency, working people and the north of England. Has he seen the reports today saying that if the north of England were a country, it would be more or less the worst in the whole OECD for investment by the public or private sector? Have we in the north not been let down enough, and particularly those in my hon. Friend’s constituency, who were led up the garden path, by the looks of it, on a promise that will now not be delivered?

[Ian Lavery]

My hon. Friend makes a number of important points. It is correct to state that people in the north have been let down greatly as a result of this Government’s policies. Many people in our constituencies have been let down greatly, and some are even saying they have been left behind.

[Kate Osborne (Jarrow) (Lab)]

I thank my hon. Friend for bringing this debate to the House. Cambois is in the constituency of Wansbeck, not Blyth, as some seem to think. What we are discussing will impact not just Northumberland and Wansbeck but the wider north-east, including my constituents in Jarrow. Does my hon. Friend agree that if the Government want the people of the north-east to believe that levelling up is not just empty rhetoric, they need to deliver not just in more affluent areas, but in places such as the north-east, where we have seen very little—certainly in my constituency, and I believe the same goes for my hon. Friend’s constituency.

[Ian Lavery]

The reality is that the development of this Britishvolt plant would have transformed lives and communities not just in the south-east of Northumberland, in places such as Blyth, Wansbeck and Bedlington, but—my hon. Friend is right—in the likes of Jarrow and farther afield in Sunderland, North Tyneside and the entire region. It was to be the biggest investment in our region since Nissan in the ’70s.

[Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)]

My hon. Friend is being very generous with his time. Does he agree that despite the clear failure of the Government’s UK industrial strategy, they should continue to try to attract investors to support a battery gigafactory in his constituency by establishing a localised supply chain across the north-east? That would in turn support automotive giants, such as Nissan, which he mentioned, that are already investing in electric vehicles. We know that that is vital for EU trade and the drive toward zero-emissions vehicles by 2030.

[Ian Lavery]

Thanks for that intervention. The supply chain is so, so important. Britishvolt suggested at the time that there would be 3,000 jobs created at the site and 5,000 jobs created in the supply chain. That would have been felt throughout the whole of our region in the north-east and probably further afield.

Links with Nissan would be brilliant. We need to take a leaf out of Nissan’s book in the way it has operated in the north-east for so many years. We were hoping to see some sort of link. Nissan is looking towards an on-site gigafactory with Envision AESC, which is in progress as we speak.

[Mary Glindon (North Tyneside) (Lab)]

Does my hon. Friend agree that the Government seem to have forgotten and neglected the area north of Teesside? This great part of our region, whether it is Tyneside, Northumberland or Wearside, always seems to be forgotten. We were forgotten when it came to a freeport, levelling up and now Britishvolt, which, as my hon. Friend says, would have created jobs across the region and given it a brighter future.

[Ian Lavery]

That is very, very well put. People in our region are very much aware that there has been investment in Teesside. I welcome every penny coming into the region, by the way—every single ha’penny of investment we can get—but it has to be further afield than just one particular pocket of the north-east region. As my hon. Friend says, there has been a complete lack of investment in our region and it has been left behind for decades now. That is just not acceptable any more. This is the idea that could have transformed and changed that for a lot of the people we proudly represent. People were excited by the thought they actually had the potential to get a decent job with good wages, terms and conditions.

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Gentleman for bringing this issue forward. He has been really active on this issue and he was active in the Chamber last week during questions, so well done to him.

I am sure the hon. Gentleman will agree that the news of an Australian company’s intention to potentially purchase Britishvolt, which I heard about today when talking to the hon. Member for Hemsworth (Jon Trickett), is truly good news. Does he agree that the Government must invest in British business, manufacturing and engineering? I see our highly skilled aerospace workers constantly fearful for their jobs and managers reluctant to expand. Further, will he join me in asking the Minister for the Government to focus—they must focus—financial investment in our manufacturers throughout all of the United Kingdom of Great Britain and Northern Ireland?

[Ian Lavery]

Yes, of course. I will come on to the nub of the questions the hon. Gentleman raises during my speech—I have only got through two paragraphs up till now.

The Britishvolt site has been kept alive for years. It is not just something somebody has come up with; it is to the credit of the former Labour-run council, which had the foresight to recognise the site’s advantages. It insisted on maintaining the site for industrial use to create thousands of potential jobs in the future, a prophecy that Britishvolt promised to make a reality. We should remember that projects on the scale Britishvolt was proposing do not just appear from thin air. They go through decades of decision making and planning. That was largely done by the Labour group on Wansbeck Council, which made the site so attractive to potential builders over decades.

Britishvolt arrived on the scene in late 2020 and was full of promise and potential. While many of the industry professionals I spoke to, along with others, expressed scepticism about its lack of experience and long-term plans, it continued to exceed expectations and gather support. I recall the chief executive ringing me up before Christmas that year, just out of the blue. He said, “I’m the chief executive of Britishvolt”—I had not heard of it—“and we are bringing 8,000 jobs to your constituency.” They were going to be well-paid, secure jobs—green industrial jobs. I promise you, Mr Deputy Speaker, I could not believe it. It was like all my Christmases had come at once. Since then, I have been heavily involved, only to be devastated by the current position.

As I say, Britishvolt arrived on the scene in late 2020. It impressed people so much that it managed to secure a £100 million grant from the Government’s automotive transformation fund. To many, that seemed to legitimise the company. There were still many people—many, many people, in fact—who doubted it, but they were confounded by glowing reports from the then Business Secretary, the then Chancellor and the then Prime Minister.

At the time, the then Business Secretary, the right hon. Member for Spelthorne (Kwasi Kwarteng), announced:

“I’m delighted to confirm we have now provided Britishvolt with a final grant offer through the Automotive Transformation Fund. The Blyth gigafactory will turbocharge our plans to embed a globally competitive electric vehicle supply chain in the UK and it is fantastic to see how the project is progressing.

The vast site will ensure Britain can fully capture the benefits of the booming global electric vehicle market. The well-paid jobs and growth it will generate for the North East of England will be transformational and are exactly the reason we are investing to make the UK the best place in the world for automotive manufacturing.”

In an interview with national media when the grant had been confirmed, he also claimed:

“It is absolutely what levelling up is all about. In fact, I can’t think of a project that demonstrates levelling up better than this one.”

The then Prime Minister, the right hon. Member for Uxbridge and South Ruislip (Boris Johnson), claimed:

“Britishvolt’s plan to build a new gigafactory in Northumberland is a strong testament to the skilled workers of the North East and the UK’s place at the helm of the global green industrial revolution.

Backed by government and private sector investment, this new battery factory will boost the production of electric vehicles in the UK, whilst levelling up opportunity and bringing thousands of new highly-skilled jobs to communities in our industrial heartlands.”

Last summer, before his departure from office, he gave me further guarantees in this House that support for Britishvolt was in the post and that the Government remained 100% behind the project.

The then Chancellor, who is now the Prime Minister, also took the opportunity to jump on the bandwagon, boasting:

“Once complete, this factory will produce enough batteries for over 300,000 electric vehicles each year…Our #PlanForJobs is working.”

So he claimed. At the time, everybody wanted a piece of Britishvolt, which was hailed as the poster boy of levelling up and as a tribute to the vision of life post Brexit held by this new-look Conservative party.

So where did it all go wrong? What actually happened? Why are we in this situation now? At what point did the Government go cold on Britishvolt, which was hailed only a year ago as the jewel in the crown of their levelling-up plans and vision for Britain? As ever, the Government will be keen to blame the cost of soaring energy bills and the knock-on effects of the illegal invasion of Ukraine, but that does not add up with the story across Europe. The website Sifted is tracking the development of 33 gigafactories across Europe, many of which are due to be up and running imminently. Germany has plans for 12 gigafactories, while the UK has plans for only three, one being the Cambois gigafactory we are discussing, which is now in great peril at best.

The underlying issue with Britishvolt is that as a start-up it had no capital to work with, and a range of issues meant it was not able to attract sufficient investment and meet the milestones that would have unlocked the Government funding that was promised—not a penny was ever received by the company, despite the benefits explained by the Prime Minister, the former Prime Minister and the former Business Secretary.

[Mrs Hodgson]

I do not want to interrupt my hon. Friend’s flow too much, as he is making some excellent points. On the number of gigafactories we need, he mentioned plans for three. I hope the one in his constituency will be saved, but it looks as though we may lose it. We actually need eight gigafactories if we are to meet the 2030 target for zero-emission vehicles. The last thing in the world we should be doing is not saving the plant in his constituency. The Minister shakes her head, but I do not know how we will ever reach that target if we do not save such plants.

[Ian Lavery]

I will come on to that point later in my speech, but my hon. Friend makes a very valid and strong point.

On the issue of competitive energy sources, the UK’s industrial energy pricing is far from competitive and drives investment away, while our green energy infrastructure is nowhere near able to guarantee a supply of energy via the national grid. In December 2022, the UK cost per megawatt-hour was £580, while in Germany it was £225, in Italy £259, in France £238, and in Sweden £206. If we are ever going to reach our targets and support the automotive industry, that disparity must be addressed without any further delay.

That is just a drop in the ocean of the wider strategic issues that have been allowed to develop in the industry. We have hundreds of thousands of workers producing parts for vehicles that will not be required, with no clear plan on how those workers will transition and be reskilled in a rapidly changing industry. That is part of the wider issue of a chronic skills shortage that needs to be addressed by having the proper training available for our young people leaving schools and paying them a proper living wage to do well-paid skilled jobs. We are being rapidly overtaken by European competitors who have support from the European Commission and the member states themselves, and we are also being stymied by the strength of the US and, in particular, China, which has a near dominance in the supply of cells, cathodes and anodes, as well as the base materials for their manufacture.

CATL in Germany has received grant and loans from the state of €750 million, or 22.8% of the total build costs; Northvolt in Sweden has had €505 million, or 17.1%; and in North America General Motors has had $2.5 billion, or 36.2%, Stellantis has had $l billion, or 35.7%, Tesla has had $1.3 billion and Ford has had $884 million—the list is nearly endless. Compare that with Britishvolt, which was promised just £100 million by the Government, and guess what percentage that was of build costs—only 2.3%. That is absolutely disgraceful. Moreover, the £100 million was heavily caveated, to the point where the company never had a penny of Government support. How can this country—how can we, as a manufacturing nation—expect to be competitive while Governments across Europe and beyond are offering real incentives for the manufacture of batteries, far greater than those offered by our Government? We have to pull our socks up. We have to get on to the pitch. We have to start playing the game, for the sake of this nation.

In the autumn, when Britishvolt was facing financial difficulties, it asked for £30 million of the £100 million grant that had been agreed by the Government. The company asked for this to be released early because it had cashflow problems, arguing that the money would help keep it afloat and attract the private investment that it needed to reach the other milestones set by the Government. The Government have repeatedly made the point that they need to act responsibly with taxpayers’ money. I agree with that, and I am sure no one disagrees with it, but it seems to me that £30 million for a company that says the money will allow it to stay in business and create 8,000 jobs in a region that has been held back for so long, keeping it afloat, is a worthwhile investment. That £30 million is a mere drop in the ocean of the money lost so carelessly during the pandemic, which went into the coffers of those with close ties to senior members of the Government, but when it might be spent on benefiting held-back towns in the north-east, it is held under very tight wraps.

By this point, the Government’s attitude towards the company seems to have cooled considerably since the previous January, when they were singing its praises from every rooftop they could find. The pandemic and the Russian invasion of Ukraine have been harsh reminders of the need for national self-reliance, particularly in key strategic industries. Simply assembling the batteries in the UK is not enough; as we enter a new phase of globalisation, we must take control of our own destiny—and of battery manufacturing—if we want our car industry to survive. We still do not have a single fully functioning gigafactory, although, as was mentioned earlier, predictions suggest that we will need anywhere between eight and 10 by 2040.

All this has real consequences at an individual human level. Towns and villages across south-east Northumberland and in the north-east as a whole, including my constituency, have been held back for decades. Once thriving industrial communities, they have had their economic and social fabric swept from under them with nothing to replace it. More than a decade of brutal austerity has hollowed out our public services and civic spaces and left us battling high levels of unemployment, low pay, poverty, crime, and addiction problems. The jobs that were promised to come with the gigafactory had the potential to be the first step in changing the fortunes of our region. The income from the new well-paid local jobs would have supported thousands of families across our communities, and might well have helped to kick-start a new era of manufacturing in industrial work that could have reignited the economy in the towns and villages close by.

There was a good deal of reluctant optimism about announcements of new developments in transport and infrastructure, alongside the announcements about the factory and the possibility of money from the Government’s new towns fund and levelling-up fund, but bit by bit, drip by drip, that has ebbed away. Only last week a bid from Ashington, in my constituency, for levelling-up money to transform the crumbling town centre was rejected, while Richmond, in the Prime Minister’s Yorkshire constituency, received a cosy £19 million. That is pretty offensive to people in held-back communities.

Bedlington in my constituency got about £8 million to build new cycling lanes, although the bid was somewhat ironically designed with getting workers to the new Britishvolt factory in mind. Although every penny given to Bedlington is welcome, many are already questioning whether new cycle lanes are all that levelling up will amount to, given how starved the town has been, like many in my constituency, of crucial infrastructure funding for so long. The levelling-up fund has proved itself to be time-consuming, expensive, divisive and unable to meet the needs of held-back towns in the north-east. The south-east has received nearly twice as much as the north-east from the fund, and none of this touches the sides of the cuts to local councils since 2010 and the introduction of austerity.

The best use of levelling-up money for south-east Northumberland would have been getting behind the Britishvolt gigafactory. The people of Northumberland and the north-east have, sadly, once again been let down by those working far away in the halls of Whitehall and Downing Street. Three Prime Ministers in a matter of weeks and a merry-go-round of Ministers in different positions, based on nothing but blind loyalty, rather than competence and know-how, has been a disaster for any plans the Government may have had to level up my constituency and the region. As usual, we are the ones dealing with the consequences of the internal political drama unfolding in the ranks of the Conservative party.

We need long-term thinking and a proper plan for our broader industrial sector, and we need to overcome the major obstacles our automotive industry is up against, if we are to truly level up, or gauge up, our communities in the north-east, not just a few packets of money—not just the crumbs off the table. It cannot just be that who is best at submitting a bid will get the money and other areas that are sadly lacking will again get left further and further behind—my hon. Friend the Member for Hemsworth (Jon Trickett) talked about that.

This morning, the news broke in the press that Recharge Industries, an Australian-based company, had put in an offer to buy Britishvolt, which is very encouraging, as were other reports in the press this morning that 12 other companies have shown an interest. Let us hope that something can happen, because we cannot have another false dawn. We cannot have another Britishvolt, where we have a project of this magnitude, with the land, the planning and everything else in place, only for the Government to go cold and step back from assisting our regions.

A couple of issues are really interesting. The administrator, Ernst & Young, has a legal obligation to accept the highest offer. It has no legal obligation to accept what might be the best offer for the people in our communities or to say, “I will take that offer because it is going to create tens of thousands or hundreds of jobs.” It has an obligation to seek what is best for the current shareholders. We have to look at that and hope that the administrators bear in mind when making this ultimate decision that this is not only about the shareholders, many of whom will probably not live in our region, or even in this country, and are looking for as much money as possible—the people in our region count and they should not be forgotten. We have to put as much pressure as we can on the administrators.

I am going to ask the Minister a number of quick questions. We have to make sure that the Government step up to the plate on this. I have explained this and I will not repeat myself, but the Government were shouting about Britishvolt from the rooftops one minute and then they were refusing any finances to it the next moment—that is well documented. They said that one of the milestones was private investment, but the company thought that was wrong way around. Those private companies were willing to invest on the basis that the Government would support it morally and financially. If the company had UK Government support, that would hold sway. The British Government basically abdicated responsibility, and jumped off the ship like a rat. That caused investors to be extremely unhappy, and probably put them off in the short and the medium term.

We are where we are with Britishvolt at Cambois. Will the Minister commit to do whatever it takes to get behind whoever acquires the site to build a gigafactory, including offering a proper package of financial support, in line with what other states across Europe offer? I have explained the massive difference in support that European countries get from their Governments. Can the Minister outline the Government’s plans to ensure that the site in Cambois is developed as quickly as possible? There cannot be any more delays. We hope that the Government will get in intense discussions to support any successful bidder for the plant.

Would the Minister tell us why money was not forthcoming to Britishvolt when it requested the £30 million early, which it argues would have gone a long way to reach its milestones and to get the gigafactory developed? Can the Minister clarify what due diligence was done on the company when it decided to offer it a £100-million grant in the first place? Why did the Government eventually go cold on their support? Can the Minister clarify what the Government are doing to reach the target of building eight to 10 gigafactories by 2040? How do they plan to stay competitive with other companies across Europe and globally, given the strategic barriers that I have outlined?

I have spoken for quite some time, but the issue is critical for Members, individuals and families in south-east Northumberland and the wider afield constituencies of my hon. Friends the Members for North Tyneside (Mary Glindon), for Hemsworth and for Washington and Sunderland West (Mrs Hodgson). We feel left behind. We feel that the Government have not supported us, despite the initial euphoria that this was to be the best possible opportunity to transform our area. I say to the Minister that, seriously, we need to get on to that playing field. We need to support the automotive industry. That includes electrical vehicle battery plants. We are way behind if we are to have 80 by 2040. Let’s get cracking. Let’s get the site developed in Cambois. Let’s get the Government support to the preferred bidder and make sure that the bidder wants a gigafactory, not something much less, so we can transform the economy of our great region.

[Mr Deputy Speaker (Mr Nigel Evans)]

Mr Ian Levy has sought permission from the mover of the motion and from the Minister to make a short contribution, and I have been informed.

18:43

[Ian Levy (Blyth Valley) (Con)]

I thank the hon. Member for Wansbeck (Ian Lavery) for allowing me to speak briefly in his debate. I would like to make it clear that Britishvolt is in the hon. Gentleman’s constituency, but its regional office was in Blyth on the other side of the river, as is JDR Cables.

Unlike the hon. Gentleman, I accept that it was right for the Government to set milestones that had to be met in order to receive taxpayers’ money. It is regrettable that Britishvolt could not fulfil its business plan, which would have triggered a staged release of public funds, but giving a business £100 million of taxpayers’ money without conditions would have been completely indefensible, no matter how much we all want the plan to succeed. I want it to succeed, and the hon. Gentleman wants it to succeed, and I do hope that we can work together.

Since my election, I have been a big supporter of the project to build a gigafactory on the Blyth estuary, and despite the disappointing news about Britishvolt I will continue to champion this opportunity. I welcome statements from the Government in recent days that Ministers wish to ensure the best outcome for the site, and I will work closely with the local authority and potential investors to achieve this. Despite articles in the national press this week seeking to run down our area, people in Blyth and Blyth Valley are working hard and will make the most of the opportunities to work in skilled roles. The Blyth area is still a significant centre for the renewables sector, with businesses based in Blyth, JDR Cables’ huge investment in the area next to the Britishvolt site and the excellent work that the offshore catapult is doing on the estuary to support the industry with cutting-edge research and development. The north-east really is at the cutting edge of investment and innovation and the site still offers a massive opportunity to the right developer, as the hon. Gentleman says. We need to work together to do this.

At the site of the old Blyth power station, there is excellent power connectivity with the ability to hook up to the interconnector. This would allow us to draw green renewable energy from Norway. On the estuary, we have the only deep water port in Northumberland. We have easy access to the A1 and the national road networks, as well as good rail connections. Most importantly, there is a strong and willing workforce, and the schools, colleges and skills providers are all raring to get people prepared for the 3,000 jobs on the shop floor that this project will bring, along with another 5,000 jobs in the supply chain. I will work with anyone—the Government, the council, the hon. Gentleman and anyone who believes in what Blyth and the area have to offer—to attract potential investors to the site and make sure that this project goes ahead.

18:47

[The Minister for Industry and Investment Security (Ms Nusrat Ghani)]

Allow me to begin by congratulating the hon. Member for Wansbeck (Ian Lavery) on securing today’s debate. I know that he has been very active in Parliament in raising the profile of this situation, and I could hear from the passion in his speech how concerned he is for the people in the region. I also welcome the comments made by my hon. Friend the Member for Blyth Valley (Ian Levy) about working with us on this. I welcome this opportunity to address a number of the issues raised, and I hope we can agree that the site provides a perfect ecosystem for a factory to be viable. I will address that shortly.

Britishvolt entering administration is regrettable and my thoughts are first and foremost with the company’s employees and their families at this difficult time. The Government are completely committed to building a sustainable future for the automotive industry in the UK, and promoting our EV manufacturing capability is a central pillar of that mission. I will come on to that in a moment. We are determined to see British companies succeed in the EV industry, and as part of our efforts we offered significant support to Britishvolt through the automotive transformation fund, but the Government also have a fundamental responsibility to protect taxpayers’ money and we have to ensure that our investments are not put at risk. I am sure that the hon. Members’ constituents would feel even more let down if that were to happen. The funding for Britishvolt was therefore offered on the condition that key milestones were met. Those milestones were agreed after lots of conversations with officials in the Department and included private sector investment commitments. As my hon. Friend the Member for Blyth Valley perfectly put it, offering public money without conditions would have been indefensible. Unfortunately, the company was unable to meet these conditions and, as a result, no ATF funds were paid out.

The hon. Member for Wansbeck made an important point about due diligence. Full due diligence was completed before a final grant offer letter was awarded to Britishvolt. As a result of that work, the funding was designed so that agreed milestones had to be achieved for the company to draw down any funds but, obviously, those milestones were not achieved.

Throughout the process, we always remained hopeful that Britishvolt would find a suitable investor, and we are deeply disappointed that that has not been possible, but I will move on to what really matters. The hon. Gentleman spent quite a bit of time talking about his constituency and the region, which, as my hon. Friend the Member for Blyth Valley said, is a fantastic place. I assure the hon. Gentleman that securing battery production in the UK is a Government priority. We understand it is the foundation of a successful EV industry, and we remain committed to seeing a gigafactory developed in Blyth. Cambois is widely regarded as one of the best locations in Europe for a gigafactory, as it is a huge site with power connection and planning permission. Of course, the proud manufacturing history of Blyth Valley means it is home to the highly skilled workers that a gigafactory would need to succeed. All the ingredients are there. I am therefore certain the site will continue to attract interest from developers with big ambitions, and I look forward to working with the hon. Member for Wansbeck and my hon. Friend the Member for Blyth Valley as any interest progresses.

We are doing all we can to ensure the best outcome for the site, and we will work closely with Northumberland County Council to achieve this. We are also working hard to support Britishvolt employees and their families. Employees will be able to access a broad range of support, including universal credit and the new jobseeker’s allowance scheme.

Finally, we will continue to work to unlock the region’s enormous potential. The new Northumberland railway line aims to improve journey times and reliability when it opens to passengers. A lot has been said about funding to the region, and we have provided more than £20 million from the towns fund and £11 million from the future high streets fund. The site is such a fantastic place because there is a lot going on, and there is a lot of support to help the community, arts and cinema, alongside the new Energy Central campus.

This builds on Blyth’s energy success story, as it draws on its maritime history to develop the offshore industries of the future—my hon. Friend the Member for Blyth Valley beat me to it. Today, Blyth is home to the Offshore Renewable Energy Catapult’s National Renewable Energy Centre, which provides open access and independent tests and research facilities to drive the development of transformative clean technologies. The clean energy industry will be a critical part of Britain’s green transition, but if we are to deliver a green transition that works for everyone, delivering growth and jobs for all in energy is only part of the picture.

The automotive industry is vital to the UK’s economy, and it is at the core of communities across the country. We must ensure it succeeds in the transition to net zero if we are to deliver not only on our climate goals but on our ambition to level up our country and advance its global standing. If we get it right, we can build an industry fit for the future that delivers security, prosperity and opportunity for places such as Blyth and Wansbeck in the century to come. We will continue to champion the UK as the best place in the world to build automotives as we transition to electric vehicles.

The automotive transformation fund supports the development of an internationally competitive electric vehicle supply chain in the UK, and the Government continue to work through the ATF to unlock private investment for gigafactories, battery materials, supply chains, motors, power, electronics and fuel cell systems. We already work closely with the sector through the joint Government and industry-led Automotive Council to ensure that we can identify and seize the opportunities for growth and competitiveness as they arise.

We regularly meet the automotive companies, both new and of long standing, to discuss a range issues, including future investment. To ensure our automotive industry can thrive by leveraging investment, we are providing Government support for new plants and upgrades, as several Opposition Members mentioned. Companies continue to show confidence in the UK, announcing major investments across the country. [Interruption.] This is good news, guys. Since 2021, we have seen £1 billion from Nissan and Envision to create an EV manufacturing hub in Sunderland, a world-class eco system that will drive growth at every stage of the EV supply chain, from batteries to the finished product. We have also seen £100 million from Stellantis to support electric vehicle production at its site in Ellesmere Port, and Ford commit additional funding to Halewood for its first EV component site in Europe, bringing its total investment to £380 million. These investments show that we have a track record of success, which is why this site with the right firm can be just as successful.

I am proud that we are not just sticking to the tried and tested. If we want to continue to succeed, we have to dare to do things differently. That is why it is so important that the UK is also a world leader in automotive research and development. Through the Advanced Propulsion Centre, Government and industry have committed more than £1.2 billion to accelerate the development and commercialisation of strategically important emerging vehicle technologies to strengthen the UK’s competitive edge in an increasingly competitive world. That is a long-term strategy. The APC estimates that projects we have supported will help to create and safeguard more than 50,000 jobs, saving over 312 million tonnes of CO_2, which is the equivalent of removing the lifetime emissions of more than 12.6 million cars.

What is incredibly exciting is that we are also supporting the Faraday Battery Challenge with an overall budget of £544 million for work to establish the UK as a battery science superpower, so, as I said earlier, all the right ingredients are here. We are investing nearly £80 million through Innovate UK in driving the electric revolution, a programme to accelerate the capability and growth of the electric supply chain for power, electronics, machines and drives in the UK.

Industry recognises the depth and breadth of our innovation economy, which puts eco right at the cutting edge of automotive manufacturing. Just last week, Williams announced that it would be opening a new plant for manufacturing advanced batteries for HGVs in Kidlington. That is exactly the sort of investment that we want to see come to all regions of the UK to build on more than a century of vehicle manufacturing to deliver sustainable growth and jobs for decades to come.

We have the infrastructure and the talent. Together, we can and we will create a globally competitive electric vehicle supply chain in the UK, boosting homegrown EV battery production and levelling up across the country as we accelerate towards a greener future that works for everyone. As my hon. Friend the Member for Blyth Valley said towards the end of his speech, this is a fantastic site. All the ingredients are in play. I cannot comment on speculation in the press, but I can confirm that we will of course take any credible options very seriously. We are very committed to the site and I can assure the hon. Member for Wansbeck that this Government are determined to make that site work for Blyth and for the whole of the United Kingdom.

Question put and agreed to.

18:57

House adjourned.

Deferred Divisions

Wednesday 25th January 2023 Commons Chamber

Division 154

Ayes: 302

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Conservative: 294
Democratic Unionist Party: 6
Independent: 2

Noes: 166

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Labour: 151
Liberal Democrat: 10
Independent: 3
Alliance: 1
Social Democratic & Labour Party: 1
Green Party: 1

Division 155

Ayes: 302

---

Conservative: 294
Democratic Unionist Party: 6
Independent: 2

Noes: 166

---

Labour: 151
Liberal Democrat: 10
Independent: 3
Alliance: 1
Social Democratic & Labour Party: 1
Green Party: 1

Division 156

Ayes: 300

---

Conservative: 292
Democratic Unionist Party: 6
Independent: 2

Noes: 170

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Labour: 151
Liberal Democrat: 10
Independent: 4
Plaid Cymru: 3
Alliance: 1
Social Democratic & Labour Party: 1
Green Party: 1

Division 157

Ayes: 301

---

Conservative: 293
Democratic Unionist Party: 6
Independent: 2

Noes: 170

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Labour: 151
Liberal Democrat: 10
Independent: 4
Plaid Cymru: 3
Alliance: 1
Social Democratic & Labour Party: 1
Green Party: 1

Division 158

Ayes: 301

---

Conservative: 293
Democratic Unionist Party: 6
Independent: 2

Noes: 170

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Labour: 151
Liberal Democrat: 10
Independent: 4
Plaid Cymru: 3
Alliance: 1
Social Democratic & Labour Party: 1
Green Party: 1

Draft Civil Contingencies Act 2004 (Amendment of List of Responders) Order 2023

Wednesday 25th January 2023 General Committees

The Committee consisted of the following Members:

Chair: Derek Twigg

† Anderson, Fleur (Putney) (Lab)

† Brereton, Jack (Stoke-on-Trent South) (Con)

† Gibson, Peter (Darlington) (Con)

† Greenwood, Lilian (Nottingham South) (Lab)

† Hammond, Stephen (Wimbledon) (Con)

† Hardy, Emma (Kingston upon Hull West and Hessle) (Lab)

† Johnson, Dr Caroline (Sleaford and North Hykeham) (Con)

Lavery, Ian (Wansbeck) (Lab)

† Lewer, Andrew (Northampton South) (Con)

† McDonnell, John (Hayes and Harlington) (Lab)

† Marson, Julie (Hertford and Stortford) (Con)

† Mercer, Johnny (Minister for Veterans' Affairs)

† Morris, James (Halesowen and Rowley Regis) (Con)

† Stevenson, John (Carlisle) (Con)

Sultana, Zarah (Coventry South) (Lab)

† Timpson, Edward (Eddisbury) (Con)

Whitley, Mick (Birkenhead) (Lab)

Stella-Maria Gabriel, Committee Clerk

† attended the Committee

Sixth Delegated Legislation Committee

Wednesday 25 January 2023

[Derek Twigg in the Chair]

Draft Civil Contingencies Act 2004 (Amendment of List of Responders) Order 2023

09:25

[The Minister for Veterans’ Affairs (Johnny Mercer)]

I beg to move,

That the Committee has considered the draft Civil Contingencies Act 2004 (Amendment of List of Responders) Order 2023.

It is a pleasure to serve under your chairmanship, Mr Twigg. The order was laid before the House on 6 December. I think we all agree on the importance of improving the UK’s resilience, and the recently published resilience framework illustrates the need for clear roles and responsibilities in order to drive planning activity across the risk lifecycle.

This statutory instrument will provide for exactly that by creating the legal basis for improved co-operation, information sharing and integration between both the Meteorological Office and Coal Authority and the wider list of categorised organisations operating at local level in the United Kingdom. It will deliver those important changes by making both organisations category 2 responders as defined under the Civil Contingencies Act 2004, in turn bolstering the planning activities conducted by local resilience forums in England, a further commitment of the new resilience framework. That will ensure that they are well integrated in wider emergency planning frameworks, able to collaborate in the development of localised risk assessments, and contribute information and expertise to support local resilience forums—otherwise known as LRFs—in planning for and responding to emergencies.

Both organisations hold information and experience that is integral to the process of civil protection, with the Met Office able to support effective management of severe weather risks and the Coal Authority positioned to ensure that due consideration is given to the unique risks presented by our industrial heritage. Approximately 25% of property across the UK is located on a coalfield, and the Coal Authority responds to a wide range of incidents—including but not limited to subsidence, sudden ground collapses, emissions of water or gas, coal tip slips as well as metal mine pollution incidents, with extreme weather often heightening the likelihood of those risks materialising.

The Civil Contingencies Act, also known as the CCA, was introduced in 2004 following a review of emergency planning arrangements as a result of the fuel crisis and severe flooding in 2000, as well as the outbreak of foot and mouth disease in 2001. That Act establishes a framework for civil protection in the UK. It imposes a clear set of roles and responsibilities on those organisations with a role to play in preparing for and responding to emergencies.

Category 1 responders are those organisations that collectively form the core of local emergency preparedness and response. They include emergency services, local authorities, health bodies—including NHS England, foundation trusts and integrated care boards—His Majesty’s Coastguard and Government agencies. Category 1 responders are subject to the full set of statutory civil protection duties, including assessing risks to inform contingency planning, warning and informing the public, and putting in place business continuity arrangements.

Category 2 organisations, which include the Health and Safety Executive and utilities and transport operators, are “co-operating bodies” and, although less likely to be involved in the heart of planning work, are heavily involved in incidents that affect their own sector. Category 2 responders have a statutory duty to co-operate and share relevant information with other category 1 and 2 responders. The Act and regulations made under it create the basis for these organisations to collaborate through LRFs, where all responders can come together to ensure effective multi-agency emergency preparation and response. Regulations made under the CCA also place a duty on responders to help to co-ordinate risk assessment at their local level through the production of the community risk register, which ensures that the LRF members hold a consistent understanding of the hazards and threats across their area.

The CCA is reviewed every five years. The most recent post-implementation review was laid before the house in March 2022 and proposed the categorisation of the Met Office and Coal Authority as one of its key recommendations. The Met Office and Coal Authority perform important functions in preparing for and responding to risks associated with extreme weather events and the coalmining legacy. Recent examples include several heatwaves in 2022, a number of floods in recent weeks and, in the past few days, a sinkhole that has opened up in Caerphilly. The two organisations have significant expertise and technical knowledge in their respective fields and provide critical support, such as severe weather warnings, hazard assessments, training and response planning.

Although the organisations already work closely with local partners, our consultation and engagement with LRFs indicated that without their integration in the legal framework, that work was taking place in an inconsistent or ad hoc way. Categorising the organisations will ensure that they are able to systematically share information and co-operate with local resilience forums across the UK in a more regulated and structured way. Ultimately, that will improve the preparedness of local partnerships to respond to incidents related to coal mining or severe weather and strengthen their ability to protect the public and save lives.

The instrument is being made using powers set out in section 13(1) of the Civil Contingencies Act 2004, which allows a Minister of the Crown to amend the list of categorised responders. It will add the Met Office and the Coal Authority to the list “Category 2 Responders: General” under part 3 of schedule 1 to the Act. Importantly, these amendments do not add significant financial burdens to the Met Office or the Coal Authority, as the organisations are already equipped to perform these additional duties under their current budgets, with a de minimis impact assessment completed in December 2022.

The provisions will be implemented across the UK, and we have consulted officials from the devolved Administrations throughout the process. We have also formally notified each Administration, via ministerial letters, of our intention to lay the instrument, and all devolved Administrations were supportive of the inclusion of these agencies as categorised responders for the whole United Kingdom. I thank each Administration for their engagement and collaboration.

I hope that colleagues will join me in supporting the draft regulations, and I commend them to the Committee.

09:32

[Fleur Anderson (Putney) (Lab)]

It is a pleasure to serve under your chairmanship this morning, Mr Twigg. I am pleased to be speaking to this statutory instrument.

Labour will be supporting the instrument; these two additions to the list of responders—the Coal Authority and the Met Office—are sensible and necessary. However, the legislation gives rise to more questions over the Civil Contingencies Act 2004 and how ready we as a country are for the next major emergency. Two of the questions raised by the legislation are: why is it so late, and why are only two more organisations being added to the list?

The Civil Contingencies Act is an excellent piece of legislation and a Labour invention, introduced in 2004, but it is important to note that the Government at the time recognised that it would need to change and adapt over time. Between 2004 and 2010, the Government attempted to improve and develop it; sadly, since 2010 it has been left to gather dust and deprioritised by successive Conservative Governments. This is only the second SI introduced on the Act in the past 10 years, despite all the threats and dangers that we have faced and the learning from them, including the pandemic. The changes made on those occasions were piecemeal and fairly inconsequential.

It is not just the Opposition saying that. I have been speaking to experts for over a year now and finding out more and more about this interesting and necessary field of government. Those experts include members of the National Preparedness Commission, who are also concerned about the lack of proactive development of civil contingencies policy since 2010.

The Minister highlighted the national resilience framework published by the Government just before Christmas, and there is also the post-implementation review of the Civil Contingencies Act that was carried out last year. Notwithstanding the fact that it was late, why is this just a framework? Why is it not a strategy, as originally promised? Where is the detail and the meat behind it? More to the point, why has it taken a deadly pandemic to force any kind of action or review of the Act? The whole point of civil contingencies is to continually plan ahead, think ahead and deliver ahead, but all the Government seem to do is react when it is too late.

I return to the purpose of the instrument. It is all well and good adding these two further organisations to the list of responders but, going ahead, a more fundamental issue needs to be addressed: communication between all these responders. As the National Preparedness Commission has pointed out in its review of the Act, the mechanism for effectively building relationships between the local resilience forums and the category 2 responders—all responders—that can work in a crisis is very weak. The Minister highlighted the often inconsistent and ad hoc nature of that. In fact, the report says that category 2 responders are seen as second-class citizens, which is eroding the sense of partnership on which resilience depends. Resilience depends entirely on partnerships that spring into action to prepare and deliver in an emergency. We saw that most acutely during the pandemic, with whole sectors brought into the covid-19 response on a scale never seen before.

I advocate a shift in the Government’s thinking towards investing more in improving the relationship between category 1 and category 2 responders, and supporting local resilience forums. We could add as many organisations as we wanted to the list, but if they were not ready and had little or no relationship with category 1 responders, it would all be pointless. On that point of adding more organisations, does the Minister plan to do that? Will we be back again next week and the week after?

The National Preparedness Commission has recommended adding several more organisations to the list, including the Animal and Plant Health Agency, the Food Standards Agency, the internal drainage boards, operators of COMAH and REPPIR sites—under the control of major accident hazards, and the radiation emergency preparedness and public information regulations—the UK oil pipeline system, the Oil and Pipelines Agency, the Crown Estate, and St John Ambulance and other charitable ambulance services. It further recommended that the status of the British Red Cross as an auxiliary to the UK Government, with its particular and valuable capabilities in planning, needs assessment and humanitarian assistance for emergencies, should be recognised in statutory guidance.

Does the Minister intend to bring forward further instruments to add more agencies to that important list? What other reforms are being brought forward following the post-implementation review?

To summarise, we support the draft instrument, but it cannot end here. A lot more work needs to be done in this area, and we need to go further and deeper if we are to get an Act that delivers on its purpose of keeping all British residents and citizens safe. I will be grateful for the Minister’s thoughts on the questions I have asked.

21:37

[Edward Timpson (Eddisbury) (Con)]

It is a pleasure to be able to speak about this important draft statutory instrument. I welcome the extension of the list of responders under the Civil Contingencies Act.

In reading the explanatory notes, which is always a pleasure on these occasions, I noticed that the expansion of the list, to include the Coal Authority as one of named responders, would have no practical effect in Northern Ireland, so that part of the United Kingdom will not be covered. Will my hon. Friend the Minister clarify whether that leaves any potential gaps in the ability of that area of civil contingency to be met in that part of the United Kingdom?

09:38

[Johnny Mercer]

I thank my hon. and learned Friend the Member for Eddisbury and the hon. Member for Putney for their contributions. I hope to answer some of their questions.

I can only apologise for the fact that between 2004 and 2010 everything was absolutely perfect and that since 2010 it has been a total car crash. I have no idea why that might have happened; I am sure it has nothing to do with the change of Government.

Let me answer a couple of questions. The framework sets out the Government’s intention to make fundamental improvements to UK resilience, but the hon. Member for Putney wants a detailed strategy to get into, so I will write to her with that. I will ensure that she understands clearly what that strategy is. That is extremely important.

Why does the draft order include only two additions to the list? There is always a balance in getting organisations into these things: ensuring that those critical to local resilience planning are on the list, without it being too onerous. There can always be arguments about why there are only two additions and why there are not more, but that is where the line has been drawn at the moment.

On the legislation being late, we have an obligation to review every five years, but we may review and amend at any time. It is fair to say that it is important that we allow lessons to be learned from covid. As for adding more organisations—as much as I have enjoyed this morning, I have no plans to come back next week to do the same thing—this is an ongoing process. On the issue of when the situation changes, the Government have demonstrated flexibility with this review by updating the framework and adding the Coal Authority and the Met Office to the list, to ensure that the legislation is appropriate and responds the challenges we face under the Civil Contingencies Act.

My hon. and learned Friend the Member for Eddisbury asked a very good question about Northern Ireland—to which I do not know the answer, I am afraid. I will write to him with the details. The draft order has been agreed across the devolved authorities—it is important to make that clear. Elected representatives in Northern Ireland are happy that this is covered and the same effects are achieved, but to ensure that I get the answer right, I will write to him about the specific levers used in Northern Ireland to achieve the same outcome.

To conclude, the Civil Contingencies Act delivers a strong framework for protection in the UK. Categorising the Met Office and the Coal Authority as responders strengthens that framework further and recognises the integral role of those organisations in national preparedness. I hope that colleagues will join me in supporting the draft order, which I commend to the Committee.

Question put and agreed to.

09:41

Committee rose.

Plant Health and Trade in Animals and Related Products (Amendment) Regulations 2022

Wednesday 25th January 2023 General Committees

The Committee consisted of the following Members:

Chair: Judith Cummins

† Cairns, Alun (Vale of Glamorgan) (Con)

† Cruddas, Jon (Dagenham and Rainham) (Lab)

† Fletcher, Nick (Don Valley) (Con)

† Glindon, Mary (North Tyneside) (Lab)

† Heald, Sir Oliver (North East Hertfordshire) (Con)

† Johnson, Gareth (Dartford) (Con)

† Jones, Fay (Brecon and Radnorshire) (Con)

† Malthouse, Kit (North West Hampshire) (Con)

† Mayhew, Jerome (Broadland) (Con)

Osamor, Kate (Edmonton) (Lab/Co-op)

Osborne, Kate (Jarrow) (Lab)

† Russell-Moyle, Lloyd (Brighton, Kemptown) (Lab/Co-op)

† Spencer, Mark (Minister for Food, Farming and Fisheries)

† Villiers, Theresa (Chipping Barnet) (Con)

Watling, Giles (Clacton) (Con)

† Winter, Beth (Cynon Valley) (Lab)

† Zeichner, Daniel (Cambridge) (Lab)

Chloe Smith, Committee Clerk

† attended the Committee

Seventh Delegated Legislation Committee

Wednesday 25 January 2023

[Judith Cummins in the Chair]

Plant Health and Trade in Animals and Related Products (Amendment) Regulations 2022

14:30

[The Minister for Food, Farming and Fisheries (Mark Spencer)]

I beg to move,

That the Committee has considered the Plant Health and Trade in Animals and Related Products (Amendment) Regulations 2022 (SI 2022, No. 1367).

Ms Cummins, we often use these words, but it is a true pleasure to serve under your chairmanship. Protecting our biosecurity is of paramount importance, and we are correcting some deficiencies that have arisen from our EU exit. This instrument ensures the effective operation of the biosecurity regime in Great Britain by making amendments to the plant health legislation.

It is urgent that we move this legislation now. A recent outbreak of plant disease near the Welsh-English border has highlighted a gap in the legislation, which prevents an authority in one territory of Great Britain from establishing a demarcated area based on the findings of a pest disease in another territory. Additionally, the withdrawal Act powers required to make changes in this instrument were due to sunset on 31 December, so we needed to address the identified deficiency before that date.

I turn to the details of the instrument. First, it ensures that all relevant pests are included in the legislation for the application of demarcated areas. It also allows authorities in Great Britain to co-operate with one another. Authorities are then permitted to take measures in their own territory. Amendments are additionally made to domestic legislation in England, Scotland and Wales to allow notices to be served to establish demarcated areas in those instances. Given the urgency of the instrument, the Scottish and Welsh Government Ministers have formally consented for the amendments to be made on their behalf. The animal health instrument is also corrected to ensure the transfer of functions from the EU Commission to the appropriate authority in Great Britain. I am pleased to say that the devolved Administrations have also given their consent for those regulations to extend across the whole of Great Britain.

To conclude, I emphasise that the regulations ensure that effective biosecurity controls are in operation within Great Britain. They also enable co-ordinated action between the territories within Great Britain to manage any outbreaks of certain pests. I commend the regulations to the Committee.

14:33

[Daniel Zeichner (Cambridge) (Lab)]

It is a pleasure to serve with you in the Chair, Ms Cummins. You will be glad to hear that my comments today will be brief, and we will not be opposing this statutory instrument. That is not only because it is a clean-up measure, essentially—I love the Minister’s language and will remember “It’s a deficiency!” the next time I make a mistake—but because on Monday evening we had a bit of a marathon with some SIs. This one is much simpler.

Today, we debate the amendments made by the Plant Health and Trade in Animals and Related Products (Amendment) Regulations 2022. I read at the top of the page with interest that this statutory instrument has been made in consequence of defects—the “deficiencies” —in a series of SIs. I looked a bit more closely at that first one—2020 1482—which was discussed with the Minister’s predecessor, I think, back in 2020. I looked back to my opening comments then, and my notes said, “Very lengthy. Hundreds of pages—much room for error.” It seems that I was a touch prescient.

However, I make no criticism of those tasked with this complicated work. I would just gently point out to the Government the scale of the challenge if they seek to rush to amend many hundreds of these complicated regulations; there will inevitably be mistakes.

[Sir Oliver Heald (North East Hertfordshire) (Con)]

Does the hon. Gentleman want to pay tribute to the work of the Joint Committee on Statutory Instruments, because it actually spotted this?

[Daniel Zeichner]

Absolutely, and I must say that as I delve through the various papers, I admire the in-depth work of the various Committees, which is so useful, particularly for an Opposition spokesperson, as we come to these discussions. I generally quote them at length, and I commend them for the work that they do.

I turn to the substance. It is welcome that the problems facing devolved authorities when seeking to collaborate in the face of a Great Britain-wide pest outbreak are being addressed. I am grateful to the Horticultural Trades Association, whose advice I sought on this, for confirming that it is necessary and important because the change will allow the demarcated areas to cross boundaries between Administrations, with the competent authorities working as one. That, apparently, was not possible before, preventing authorities from introducing a demarcated area within their own territory if a pest is identified in another, which limited the authority of that unaffected territory implementing necessary prevention measures.

The explanatory notes say that the amendment has been introduced following a

“recent outbreak of a certain pest near the Wales/England border”.

Can the Minister give us any details of that outbreak? Was it the only incident? How significant was it? What happened prior to this amendment if an authority from England, Scotland or Wales needed to extend a demarcated area beyond its territory?

Moving on to a further defect in another regulation, article 4 of the retained commission implementing decision relates to the import of potatoes from two regions of Lebanon. The eagle-eyed Joint Committee on Statutory Instruments referred to the two issues in its “Eighteenth Report of Session 2022–23”. The first relates to changes in labelling requirements so that they are in English, rather than one of the languages of the European Union, which is understandable. The second relates to an omission in the previous SI, which revoked the requirements for inspections to be carried out at one of the intermediate stages. It is clearly sensible to rectify that, but has an assessment been made of the consequences of that defect in the initial SI?

Finally, on the issues relating to the Trade in Animals and Related Products (Amendment and Legislative Functions) Regulations 2022, there is an amendment to correct an omission that will ensure that the appropriate authority has the power

“to change the rules on imports of equine animals from a particular country and the power to establish specific rules if there is a change in the disease situation of the approved country.”

I note that the language in regulation 8(2)(d) changes from “shall be established” to “may be established” in relation to the functions undertaken by the appropriate British authority. Was that a deliberate alteration to limit the obligation of GB authorities to change and implement animal and public health requirements for imports from the EU? [Interruption.] The Minister is shaking his head, but I am sure he will explain.

As we are all aware, health certificate requirements are currently being implemented for exports, but not for imports. That certainly could be interpreted as meaning that any additional checks and requirements on imports might not be carried out, possibly due to a lack of vets and capacity at the borders. If that is the case, we should all be concerned, because animal and plant health matters, and we should insist on the very best biosecurity procedures.

14:37

[Kit Malthouse (North West Hampshire) (Con)]

I have a couple of points of procedure and then some questions, if I may. First, the legislation obviously refers to the amendment of EU regulations, but I have not, I am afraid, been able to get hold of those regulations, so it is quite hard for me to understand the amendments being made. Normally, one would expect such regulations to be available in the room.

Secondly, I do not know whether this is usual, but from reading the legislation over the past couple of days, I see that a section of it is understandably in Welsh. Although it may be appropriate for the legislation to be in that language, I am at a loss to know what it says. Section 6, which is in Welsh, may be a faithful reproduction of section 5, which is in English, but I cannot tell whether that is the case. There may be a Member present who is able to translate it quickly and tell us, but I do not know whether it is usual to vote on legislation that is in a language I do not understand; I have not done that before, as far as I am aware.

Those questions are for you as Chair, Mrs Cummins—

[Alun Cairns (Vale of Glamorgan) (Con)]

Will my right hon. Friend give way?

[Kit Malthouse]

By all means.

[Alun Cairns]

Diolch yn fawr—[Laughter.] I can reassure my right hon. Friend that section 6 is a duplication of the English version.

[Kit Malthouse]

I am grateful for that reassurance. We are fortunate on the Committee in having a native speaker of that fine, although for me incomprehensible, language. If my right hon. Friend had not been here, Members may have found themselves in some difficulty with the legislation.

I have some questions for the Minister. I understand that the intention of these imposed regulations is for Ministers to be able to demarcate an area to allow for disease control. At the moment, in my constituency, I am living in the middle of one of those areas, which is to deal with avian flu—although the demarcation seems to be some road signs and not much else. Owners of chickens have been told to keep them indoors, and that type of thing. What I am unclear about is, while Ministers have the power to introduce those zones, how would they actually give effect to them? Is it a purely ministerial discretion? Is there a bar of disease and infection that needs to be reached? Is it on advice from some body? Similarly, on removal, where is the judgment made and by who? Obviously, it is quite a draconian power in certain circumstances. Having some kind of understanding of how it might be executed would be helpful. I could not find anything in the legislation or the guidance notes that told me that.

I also want to explore the issue about Lebanese potatoes, which seems to be of particular interest. I understand that verticillium wilt is prevalent in the Bekaa valley and is of some concern. But my reading of the legislation is that there is essentially an absolute bar on the import of potatoes from that country, which is currently struggling and for which the agricultural sector is a huge earner.

I had some difficulty understanding that—it may just be me being thick. Could the Minister explain to me what the impact of that is on the seed potato industry from those two regions of Lebanon, or whether it is a general Lebanese exclusion? Other than those points, I am broadly content to support the regulations.

[The Chair]

Thank you for those questions. I can give assurances that the specific regulation is in the Committee Room, but the Clerk is checking. I hope to have an absolute assurance by the time the Minister has finished his concluding remarks.

14:42

[Mark Spencer]

That sounded like a challenge to speak quickly, Ms Cummins. I thank colleagues for their interest in this SI, and for taking the trouble to read it and engage. My right hon. Friend the Member for North West Hampshire raised the question about how those decisions are made. We are blessed in the UK with some of the best scientists in the world, who are able to make an analysis of what the risks are and what the response should be. Of course, Ministers will ultimately decide on the response, but on the back of the advice they receive from those experts.

Action would be something along the lines of stopping the trade in the material that was at risk of spreading the disease. For example, the Opposition asked about the actual disease that has highlighted this challenge; it is actually called phytophthora pluvialis. In English—I think that might be Welsh—it is a fungus that affects trees, mostly pines and Douglas firs. What we would do in those circumstances, and what we have done, is prevent the movement of timber of that nature. We would put restrictions on nurseries and wholesale plant areas, but also on physical timber that was being moved from woodland in a certain area to another. We would prevent the movement of that to stop the disease spreading, so that fungus spores were not allowed to be transported anywhere else.

The hon. Member for Cambridge also made reference to the challenges of ensuring that our borders are safe in the future. That is something that the Government are very much alive to. I spend a lot of time, for example, worrying about the possibility of African swine fever spreading across Europe and reaching our borders. We have protocols in place to try to stop that from happening, which is actually one of the benefits of Brexit. It allows us to put more controls at our borders to try to prevent that from happening and to ensure that Border Force is aware of the challenges that we face. But, of course, we try to balance that with ensuring that trade is as free as possible. Working with our colleagues in Europe, we are able to strike that balance, but it is one that we take seriously.

[Kit Malthouse]

I am grateful to the Minister for giving way. I take his point. Obviously, there has been a phytosanitary boundary around the whole of the island of Ireland for some time now, which has protected it from diseases coming from the continent of Europe, the wider world and indeed the rest of the UK. However, my constituency, for example, is being devastated by ash dieback. We have hundreds of thousands, if not millions, of ash trees that are struggling and will be gone from the landscape quite soon.

While I understand the scientific advice that will be given, that is the same scientific advice, presumably, that resulted in the awful foot and mouth disaster that hit farming a couple of decades ago, which people remember well. Mounds of carcases were burnt on farms. Whether that was the right approach has been debated, even to this day.

Is the Minister able to give an example of a plant or animal disease being controlled by the imposition of one of these zones in the past, and therefore being eradicated from the UK? It strikes me that what we are learning—whether from Dutch elm disease, ash dieback, avian flu, or even tuberculosis, which we are obviously trying to control—is that these techniques are actually not that effective from a disease control point of view. As the Minister said, our most effective defence is at the border, by stopping the stuff coming in in the first place.

[Mark Spencer]

The best example that I can think of within two or three generations would be anthrax. We were able to eradicate that completely from the United Kingdom. However, of course, it is about not just eradication but mitigation, in terms of stopping that spread.

My right hon. Friend mentioned avian influenza. Of course, had we taken no measures and just allowed the disease to run its course, that would have led to the total devastation of the UK poultry sector and enormous damage to the wild bird population. While it sometimes appears that we are not having the positive effect that we would like to deliver, taking no action would lead to catastrophe. I think there are examples of where stepping in, and intervening at that moment does assist and does lead to better outcomes, although it may not feel like that at the time.

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

The right hon. Member for North West Hampshire made a point about the importance of Border Force in preventing diseases coming in over the border, and how that was an important element. Does the Minister share my concern that Border Force itself is under such pressure, in terms of staff shortages and morale, that it has said that those factors are impacting its efficacy in doing the job required?

[Mark Spencer]

There is no evidence that that is the case and that Border Force’s impact is negatively affected, but I recognise the huge challenges in keeping our borders safe. The Government are enormously grateful for the efforts that many people make on a daily basis, 24 hours a day, to keep us safe—not only from animal and plant disease, but from other things that might have far worse consequences.

[Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)]

Given the mention of successful demarcations, I point to the success—albeit limited, and we always have to be vigilant—of the prevention of Dutch elm disease in the city of Brighton and Hove.

We still have the world’s largest elm tree population in Brighton, in the national elm collection, and that is because we have continued to be vigilant on the borders of Brighton and Hove, with the assistance of the Secretary of State, signage and the prevention of the importation of wood products. That is not perfect, but goes along with having to be vigilant about what happens with plant life in the city. However, demarcation of zones helps to provide an additional tool to the armoury for preventing disease. Dutch elm disease has spread across the rest of the UK, but for the past 25 or 30 years we have prevented it from destroying the last remaining national collection of elm trees.

[Mark Spencer]

That is a fantastic, positive story, and I thank the hon. Gentleman for his intervention. In conclusion—

[Kit Malthouse]

Lebanese potatoes?

[Mark Spencer]

Lebanese potatoes, of course. We take such things case by case, and will continue to take that approach. There are some challenges in the seed potato market, not least to the ability of Scottish growers to export to the EU. We will continue to push that agenda as well, to ensure that the Scots can export seed potatoes. Decisions on whether we allow the import of seed potatoes will have to be taken on a case-by-case basis and with a risk analysis of the risk to UK growers. Decisions will be taken by those with the expertise, but we recognise the importance of trade links with Lebanon.

In conclusion, this is an important piece of legislation and it is important that we agree the draft regulations today. They will help to fight disease and to prevent disasters in future. I am grateful for the Committee’s support.

[The Chair]

Before I put the Question, to address the issue raised by the right hon. Member for North West Hampshire I should say that it is not usual practice to have the parent regulation in the room. The copy of the relevant legislation is in the room. However, the Clerk will pick that up with him directly afterwards.

Question put and agreed to.

14:51

Committee rose.

Ministerial Corrections

Wednesday 25th January 2023 Ministerial Corrections

Wednesday 25 January 2023

Education

Wednesday 25th January 2023 Ministerial Corrections

Teacher Recruitment and Retention

The following is an extract from Education Questions on 16 January 2023.

[Beth Winter]

The National Foundation for Educational Research says today that a strategy for improving recruitment and retention should involve

“pay uplifts that are higher than pay growth in the wider labour market for most or all teachers”.

Does the Secretary of State agree? Is it not the case that she cannot address the crisis until she gives teachers and support staff the fully funded, inflation-plus pay rise that they deserve?

[Gillian Keegan]

I thank the hon. Lady for her question. In 2019, we launched the Government’s first ever integrated strategy to recruit and retain more teachers in schools, which had a number of different strands in it, including supporting teachers on the way in, recruiting more, and various routes into teaching. Of course, we have an independent pay review body and this year we accepted all its recommendations in full.

[Official Report, 16 January 2023, Vol. 726, c. 2.]

Letter of correction from the Secretary of State for Education:

An error has been identified in my response to the hon. Member for Cynon Valley (Beth Winter).

The correct response should have been:

[Gillian Keegan]

I thank the hon. Lady for her question. In 2019, we launched the Government’s first ever integrated strategy to recruit and retain more teachers in schools, which had a number of different strands in it, including supporting teachers on the way in, recruiting more, and various routes into teaching. Of course, we have an independent pay review body and this year, for academic year 2022-23, we accepted all its recommendations in full.

Inflation

The following is an extract from Education Questions on 16 January 2023.

[Mr Dhesi]

In addition to having grave concerns about recruiting and retaining teachers, schools in Slough and across our country continue to struggle with their budgets, with a quarter of primary school senior leaders reporting that they have had to cut outings and trips due to budgetary constraints. How will the Government ensure that children do not miss out on these vital opportunities?

[Gillian Keegan]

The autumn statement announced significant additional investment in core schools funding. The core schools budget will increase by £2 billion in 2023-24 and 2024-25. That will be paid into schools’ bank accounts in April, and I am sure they will welcome that additional funding.

[Official Report, 16 January 2023, Vol. 726, c. 16.]

Letter of correction from the Secretary of State for Education:

An error has been identified in my response to the hon. Member for Slough (Mr Dhesi).

The correct response should have been:

[Gillian Keegan]

The autumn statement announced significant additional investment in core schools funding. The core schools budget will increase by £2 billion in 2023-24 and 2024-25. This funding will be allocated to schools from April 2023, and I am sure they will welcome that additional funding.

Electricity and Gas Transmission (Compensation) Bill

Committee stage
Wednesday 25th January 2023 Public Bill Committees

The Committee consisted of the following Members:

Chair: Stewart Hosie

† Afolami, Bim (Hitchin and Harpenden) (Con)

† Cameron, Dr Lisa (East Kilbride, Strathaven and Lesmahagow) (SNP)

Dowd, Peter (Bootle) (Lab)

† Drummond, Mrs Flick (Meon Valley) (Con)

† Evans, Dr Luke (Bosworth) (Con)

Fovargue, Yvonne (Makerfield) (Lab)

† Fox, Dr Liam (North Somerset) (Con)

† Garnier, Mark (Wyre Forest) (Con)

Hendrick, Sir Mark (Preston) (Lab/Co-op)

Howarth, Sir George (Knowsley) (Lab)

† Mayhew, Jerome (Broadland) (Con)

Moore, Damien (Southport) (Con)

† Moore, Robbie (Keighley) (Con)

† Paisley, Ian (North Antrim) (DUP)

† Smith, Nick (Blaenau Gwent) (Lab)

† Stuart, Graham (Minister for Energy and Climate)

† Thomas, Derek (St Ives) (Con)

Laura-Jane Tiley, Committee Clerk

† attended the Committee

Public Bill Committee

Wednesday 25 January 2023

[Stewart Hosie in the Chair]

Electricity and Gas Transmission (Compensation) Bill

Clause 1

Independent mechanism to determine claims for compensation

09:25

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 2, in clause 2, page 2, line 4, leave out “applies” and insert “extends”.

This is a technical amendment replacing the reference to application with a reference to extent.

Amendment 3, in clause 2, page 2, line 5, leave out “on the day on which it is passed” and insert—

“at the end of the period of two months beginning with the day on which it is passed”.

This amendment provides for commencement two months after Royal Assent.

Amendment 4, in clause 2, page 2, line 6, leave out “and Gas”.

This amendment amends the Bill’s short title to reflect its contents.

Clause 2 stand part.

New clause 1—Resolution of compensation disputes in electricity-related land acquisition cases—

“(1) The Secretary of State must draw up proposals for the use of alternative dispute resolution processes in electricity-related land acquisition cases.

(2) An ‘alternative dispute resolution process’ is any process enabling the parties to a dispute to resolve the dispute out of court.

(3) An ‘electricity-related land acquisition case’ is a case where—

(a) an order is made under section 114 of the Planning Act 2008 (orders granting development consent), and

(b) the order authorises the acquisition of land for a purpose connected with the transmission of electricity.

‘Transmission’ in paragraph (b) has the meaning given in section 4(4) of the Electricity Act 1989.

(4) The Secretary of State’s proposals must include proposals for ensuring—

(a) that alternative dispute resolution processes are available for determining the amount of compensation to be paid to landowners in electricity-related land acquisition cases,

(b) that the processes are accessible to landowners without undue difficulty or expense,

(c) that the processes are operated, and determinations reached, in a way that is independent of the parties to the dispute, and

(d) that determinations are enforceable.

(5) The Secretary of State must lay before Parliament a report containing the proposals drawn up under this section.

(6) Before laying the report the Secretary of State must consult such persons as the Secretary of State considers appropriate.”

This new clause is intended to replace clause 1. It focuses the proposals which the Secretary of State must draw up on electricity-related cases rather than gas-related cases. It also contains a number of drafting and clarity-related changes.

Amendment 5, in title, line 1, leave out from beginning to end of line 4 and insert—

“Require proposals to be drawn up for the use of alternative dispute resolution processes to determine the compensation payable to landowners in certain cases where land is acquired for the purposes of electricity transmission.”

This amendment amends the Bill’s long title to reflect its contents.

[Dr Liam Fox (North Somerset) (Con)]

It is a pleasure, Mr Hosie, to have you chair our Committee, which I intend to be brief.

On Second Reading, I set out the cases that form the basis for sponsoring the Bill, and I feel no need to go through them again, except to say that when one of my constituents approached National Grid with a problem that was unresolved and said, “I’m going to take it to my Member of Parliament”, he was told, “Don’t bother. He won’t be able to do anything.” Well, here we are today; and we will see who is able to make changes and who is not. Generally, I find that threatening Members of Parliament, whether directly or indirectly, is an unwise course of action.

Apart from the cases, there was the principle: one of the largest listed utility companies in the world cannot be judge and jury when it comes to compensation issues relating to our constituents. At the weekend, in my constituency I had a new case of potential flooding, which had been warned about by local farmers, who had said that if National Grid did not put in adequate draining for one of the access roads, it would result in flooding on a new estate. Sadly, in the heavy rains we saw in recent weeks, that is exactly what we got. Again, that shows why we need to have this sort of compensation arrangement.

I am grateful to Members on both sides of the House for the cross-party support the Bill has received, and to the Minister and his officials for the amount of work they have done to ensure that we dealt with all the points and issues arising from Second Reading. In particular, I point out a number of issues to the Committee. First, it will now be clear—through the amendments to the Bill—that it relates to all electricity-related, land acquisition cases. That includes compulsory purchase and access agreements, which might not have been clear previously.

Secondly, the tests we set to make the Bill acceptable have all been met: the process will be accessible without undue difficulty or expense; the processes will be operated in a way that is independent of the parties to the dispute, so that one party is not judge and jury, as at present; and determinations will be enforceable. There is no point in having rights in law if they are not enforceable, as we discussed in this room during the passage of what is now the Down Syndrome Act 2022. In other words, the four tests of accessibility, affordability, independence and enforceability are all met in the Bill.

I have a few brief questions to ask the Minister to ensure complete clarity. Will he give an assurance that the Bill will apply to current, ongoing disputes that are not settled at the point of commencement of the Act? We are not asking for retrospection, which is a legal principle that I generally find to be abhorrent, but for cases that are not concluded when the legislation comes into effect. Will the Minister give us an update on the intended timescale for the completion of the Government scheme after the commencement of the Act? In other words, how long will it be before our constituents will see the applicability of the points that I have raised? Finally, does the Bill apply to Scotland, and in what circumstances? Those are my last remaining unresolved—or perhaps unclear—questions.

I am extremely grateful to the Minister and his team for getting clarity, and a Bill that is widely accepted in the House as necessary and in a form that the House can accept.

09:30

[Ian Paisley (North Antrim) (DUP)]

It is a pleasure to serve under your chairmanship, Mr Hosie.

I thank the right hon. Member for North Somerset for introducing and sponsoring the Bill, which has my support. However, I have a question for the Minister about clause 2 and the territorial extent of the Bill; it is probably an obvious question. Like most Bills in the House, whenever devolution was working, the usual clause states that the Act will apply to England, Wales and—on occasion—Scotland. Of course, the words “Northern Ireland” are left out, but with the failure of devolution the Minister does have responsibility.

I hope that the Bill will be reported today, but will the Minister take it away, look at the issue of territorial extent to see whether there is a gap that needs to be filled with regard to compensation claims in Northern Ireland, and ascertain whether that should be applied to and included in the Bill?

[The Minister for Energy and Climate (Graham Stuart)]

It is a pleasure to serve under your chairmanship, Mr Hosie.

I thank my right hon. Friend the Member for North Somerset, and I am sure that Members across the Committee congratulate him. He probably snapped into it pretty easily; not only did he have the great success of the Down Syndrome Act but, as my former boss at the Department for International Trade for some time, seeking to command me was something that came naturally to him. Perhaps I have an overly built-in response, which is of course to try to do whatever he wants.

We have made tremendous progress. I am pleased that the Bill gained the support of Members of the House, passing Second Reading on 25 November last year. On Second Reading, my colleague the Minister for Industry and Investment Security, my hon. Friend the Member for Wealden (Ms Ghani), agreed that the Government would work with my right hon. Friend on the Bill.

The electricity network is fundamental to accelerate our ambitions for net zero and energy security. Since taking on my role and seeing the vast amount of technology we need to deploy, I return again and again to the same point: if we do not get the grid right, whatever we do is affected, whether that is space energy; small modular nuclear reactors; hydrogen and carbon capture, utilisation and storage; or floating offshore wind. Whatever it is, without the grid we will not have a transformation, which we have to do at a most remarkable pace.

The president of the National Grid has said there will be six-and-a-half times more investment in the grid over the next seven years than in the previous 30. That is a massive deployment, supply chain and financing challenge, but it is also a political challenge, because of unprecedented imposition of necessary infrastructure on communities up and down the land. Ensuring that we have a system that is fit for purpose and does not roll communities over—but rolls with communities and their grain—is fundamental. That is why I am so grateful for the Bill. I do not believe it will slow down that tremendously required acceleration of deployment, but it will help to build a system that is better able to listen to the communities we represent and ensure that they feel part of the solution, not just subject to it.

As I said, the network needs to be transformed at an unprecedented scale and pace, and it needs to accommodate an expected doubling in overall electricity demand by 2050, as we electrify sectors including transport, heat and industry. In order to achieve that, we committed in the British energy security strategy to accelerate the timescale for delivering new onshore transmission network infrastructure.

We recognise that in cases where land or land rights have been acquired and a settlement is not agreed between landowners and the transmission owner, challenging that via the upper tribunal can be expensive—a point made strongly by my right hon. Friend the Member for North Somerset. The Bill presents an opportunity to address the issue by ensuring access to alternative dispute resolution processes, which can play such a crucial role in offering a quicker and more affordable route to the resolution of disputes.

We believe that the Bill can support the transformation needed so that we can have clean, secure and resilient energy for the Great British people. Landowners should have access to a clear, fair, affordable and enforceable system for dispute resolution, and I am pleased to say that we have worked closely with my right hon. Friend the Member for North Somerset since Second Reading and support his amendments.

I will now touch on those amendments, which I encourage the Committee to accept. Amendment 1 will remove clause 1, which will be replaced by new clause 1. The new clause focuses the proposals on electricity-related cases rather than gas-related cases. We support that change, as the examples raised by my right hon. Friend have related only to electricity network infrastructure and we are not aware of issues for gas infrastructure. It seems too early to include gas infrastructure definitively. However, the Secretary of State has the option to expand the scope if needed. Hon. Members have raised this issue in previous stages.

The new clause moves from establishing a new mechanism to encouraging the use of alternative dispute resolution processes instead of immediately resorting to the upper tribunal. It means that we can therefore consider existing practices, whether they can be strengthened to meet the aims of the Bill, and whether new processes and mechanisms may be required. The new clause retains the key factors that the proposals must consider, which my right hon. Friend set out: ensuring that decisions are enforceable, and that the process is affordable and accessible. He also mentioned independence, which is another important aspect.

Amendment 2 simply replaces “applies” with “extends” in clause 2(1), which deals with territorial extent. It is a minor technical amendment to reflect more appropriate terminology. Amendment 3 changes commencement to two months after Royal Assent to bring the Bill in line with standard commencement procedure for primary legislation. Amendment 4 removes gas from the Bill’s short title in clause 2, in line with the focus on electricity transmission infrastructure that I have already discussed. Finally, amendment 5 edits the Bill’s long title to reflect its contents in new clause 1. New clause 1 should be added to the Bill, and clause 2, as amended, should stand part of the Bill.

My right hon. Friend raised some questions. He rightly said that retrospective law is typically abhorrent, but asked whether current disputes could be resolved through whatever proposals come forward. We would certainly want current ongoing disputes to be covered once proposals are implemented, but, of course, we do not yet know what those proposals are. Our intention is to establish an alternative dispute resolution taskforce—very grandly named—which will be responsible for putting forward proposals, and we will have to see what ideas are generated by that taskforce. If a dispute is still unresolved by the time that any proposals are implemented, such cases should be able to use any alternative dispute resolution options that result from the Bill, if they are appropriate. If the dispute, of course, is resolved before the proposals are implemented, any options resulting from the Bill will not be required.

[Dr Fox]

Will my right hon. Friend tell us give us a timescale for the setting up of the taskforce?

[Graham Stuart]

As I have said, we will establish an alternative dispute resolution taskforce to develop the proposals. We will ensure that there is independent and balanced representation among members—for example, by including landowner representatives alongside electricity network operators. As I am sure this Committee will be pleased to hear, we will also look to engage closely with my right hon. Friend to ensure that he is happy with the make-up of the taskforce. By establishing that taskforce, we can ensure that the right expertise and balance of views is available to consider carefully the processes and options that will work best for landowners and electricity network operators.

We expect to establish the taskforce in 2023. I would like to see it sooner rather than later, and have already asked—for my purposes, which I may or may not make public—for a timeline for that process. Having come so far, I hope my right hon. Friend can trust in me to ensure that we move this forward with suitable rapidity, but if he lacks that trust I think he can trust his own use of the mechanisms of this House to ensure that the Government are kept honest and move in an expedited way to set up this taskforce.

One of the first tasks of the group will be setting a scope, a work plan and a timeframe. My right hon. Friend asked whether the Bill applies to Scotland, and in which circumstances. The Bill does extend to Scotland, but as currently drafted it applies strictly to cases where a development consent order has been granted for electricity transmission infrastructure under the Planning Act 2008. The development consent order process does not apply in Scotland, except under limited circumstances that do not relate to electricity transmission. While electricity transmission is reserved, dispute resolution and other things are devolved, so in Scotland, there would be an interplay between the various responsibilities of the different Governments. It will be the role of the taskforce to develop the full scope of the proposals.

The hon. Member for North Antrim asked about the Bill’s application in Northern Ireland. As he said, energy transmission is devolved in Northern Ireland, as is energy generally, and notwithstanding the failure so far to convene the Executive in Northern Ireland, the devolution settlement stays in place. We only step in reluctantly, when there is no other choice; we have successfully done so, and I am pleased to see people in Northern Ireland receiving their energy bills support scheme payments and their alternative fuel payments this week, either directly into their bank accounts or through voucher provision.

My Department did a lot of work to ensure we could serve the people of Northern Ireland, because we could not leave them without that support this winter, but that is not an indication that I or the Government have any appetite to fulfil a function that is properly devolved in Northern Ireland. We respect that, and we want to see those institutions restored as soon as possible, because people in Northern Ireland deserve to have the people they elect delivering the things that have rightly been devolved for them to deliver for the good of people in Northern Ireland. I recognise that we would swiftly move from people welcoming the Minister stepping into a gap to them asking, “What’s your status? How are you making these rules for us?” That is why we really want to see the restitution of people in Northern Ireland determining what happens there.

[Ian Paisley]

rose—

[Graham Stuart]

I am going to close; I have probably been overly provocative and overly long on Northern Ireland. Suffice it to say that the Bill does not apply there, but I will give way to the hon. Gentleman.

[Ian Paisley]

I appreciate the Minister’s point of view, but on a practical level, if at some point there is not a devolved Government operating in Northern Ireland, will the Minister extend the Bill so that compensation payments can be properly covered? The Minister has the right to do so; he represents the Government of the United Kingdom.

[Graham Stuart]

I am a Minister in the Government of the United Kingdom, and we have devolution and have devolved certain bits away. I might be part of the Government of the United Kingdom, but I cannot go in and take over the function of local planning from democratically elected local authorities, because they have that function, not me. I take the hon. Gentleman’s point, but it would be for others to decide.

I am straying into Northern Irish politics, which I am told is a difficult thing to do unless one is deeply well informed, so I will stop there. I have talked enough about it already, so I will back off swiftly. The main point is that the Government support the Bill, which will ensure access to alternative dispute resolution for landowners when land is acquired by transmission owners. I therefore look forward to working with my right hon. Friend the Member for North Somerset to support the passage of the Bill.

I thank you, Mr Hosie, for your excellent chairmanship, and my civil servants for their hard work. They have not only been working with my right hon. Friend the Member for North Somerset; as we know, so much of the work is done by his office, so it is through the work of my officials and my right hon. Friend’s office, as well as the occasional appearance by the two of us, that we have been able to make such progress.

[Dr Fox]

I am grateful to my right hon. Friend the Minister for clarifying those points. We all accept the need to upgrade the electricity transmission network, and those Members who have not yet seen what the new electricity pylons look like are welcome to come down to the south-west and see for themselves. I find them incredibly visibly intrusive up close, although not un-aesthetically pleasing in themselves; how much one objects to them really depends on how close one is to them.

The point is that those pylons will be rolled out across the country. One of the roles we have in Parliament is not just to deal with issues when they reach crisis level, but to anticipate them. It is therefore important to bring in this legislation before the matter becomes an issue for most Members of Parliament, even if they do not yet understand the scale of the problem they are likely to face. It is a bizarre aspect of democratic politics that MPs get much more credit for solving a problem than for preventing one, but we try to live with that.

09:45

As all of us on the Committee agree, and as we agreed on Second Reading, that it is essential that Parliament rebalances the David and Goliath struggles that individuals face against large utilities, corporations and conglomerates in favour of the smaller party. It is quite unacceptable that the only means of achieving compensation or justice in a dispute with a very large company is if one is rich enough to go to court. That is where the importance of the Bill lies: it is about empowerment, and one of the most important roles of Parliament is empowering our constituents against those who would seek to bully them because of their advantage of size or money. To go back to my very first point, we get occasions when there are those who say, “Don’t bother going to your Member of Parliament, because they can’t do anything about it.” The wonderful thing about democracy is that we can, and today we will.

Question put and negatived.

Clause 1 accordingly disagreed to.

Clause 2

Extent, commencement and short title

Amendments made: 2, in clause 2, page 2, line 4, leave out “applies” and insert “extends”.

This is a technical amendment replacing the reference to application with a reference to extent.

Amendment 3, in clause 2, page 2, line 5, leave out

“on the day on which it is passed”

and insert

“at the end of the period of two months beginning with the day on which it is passed”.

This amendment provides for commencement two months after Royal Assent.

Amendment 4, in clause 2, page 2, line 6, leave out “and Gas”.—(Dr Fox.)

This amendment amends the Bill’s short title to reflect its contents.

Clause 2, as amended, ordered to stand part of the Bill.

New Clause 1

Resolution of compensation disputes in electricity-related land acquisition cases

“(1) The Secretary of State must draw up proposals for the use of alternative dispute resolution processes in electricity-related land acquisition cases.

(2) An ‘alternative dispute resolution process’ is any process enabling the parties to a dispute to resolve the dispute out of court.

(3) An ‘electricity-related land acquisition case’ is a case where—

(a) an order is made under section 114 of the Planning Act 2008 (orders granting development consent), and

(b) the order authorises the acquisition of land for a purpose connected with the transmission of electricity.

‘Transmission’ in paragraph (b) has the meaning given in section 4(4) of the Electricity Act 1989.

(4) The Secretary of State’s proposals must include proposals for ensuring—

(a) that alternative dispute resolution processes are available for determining the amount of compensation to be paid to landowners in electricity-related land acquisition cases,

(b) that the processes are accessible to landowners without undue difficulty or expense,

(c) that the processes are operated, and determinations reached, in a way that is independent of the parties to the dispute, and

(d) that determinations are enforceable.

(5) The Secretary of State must lay before Parliament a report containing the proposals drawn up under this section.

(6) Before laying the report the Secretary of State must consult such persons as the Secretary of State considers appropriate.”—(Dr Fox.)

This new clause is intended to replace clause 1. It focuses the proposals which the Secretary of State must draw up on electricity-related cases rather than gas-related cases. It also contains a number of drafting and clarity-related changes.

Brought up, read the First and Second time, and added to the Bill.

Title

Amendment made: 5, in title, line 1, leave out from beginning to end of line 4 and insert

“Require proposals to be drawn up for the use of alternative dispute resolution processes to determine the compensation payable to landowners in certain cases where land is acquired for the purposes of electricity transmission.”—(Dr Fox.)

This amendment amends the Bill’s long title to reflect its contents.

Bill, as amended, to be reported.

09:47

Committee rose.

Hunting Trophies (Import Prohibition) Bill

Committee stage
Wednesday 25th January 2023 Public Bill Committees

The Committee consisted of the following Members:

Chair: Sir Mark Hendrick

† Chamberlain, Wendy (North East Fife) (LD)

† Dowd, Peter (Bootle) (Lab)

† Drummond, Mrs Flick (Meon Valley) (Con)

† Firth, Anna (Southend West) (Con)

† Foster, Kevin (Torbay) (Con)

† Gibson, Peter (Darlington) (Con)

† Harrison, Trudy (Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs)

Higginbotham, Antony (Burnley) (Con)

† Knight, Sir Greg (East Yorkshire) (Con)

Latham, Mrs Pauline (Mid Derbyshire) (Con)

† McCarthy, Kerry (Bristol East) (Lab)

† Maskell, Rachael (York Central) (Lab/Co-op)

† Rodda, Matt (Reading East) (Lab)

† Smith, Henry (Crawley) (Con)

† Spellar, John (Warley) (Lab)

† Stevenson, Jane (Wolverhampton North East) (Con)

† Wilson, Sammy (East Antrim) (DUP)

Anne-Marie Griffiths, Committee Clerk

† attended the Committee

Public Bill Committee

Wednesday 25 January 2023

[Sir Mark Hendrick in the Chair]

Hunting Trophies (Import Prohibition) Bill

13:30

[The Chair]

Before we begin, I have a few preliminary reminders for the Committee. Please switch electronic devices to silent. No food or drink is permitted during sittings of the Committee, except the water provided on the tables. Hansard colleagues would be grateful if Members could email their speaking notes to hansardnotes@ parliament.uk. My selection and grouping list for today’s sitting is available online and in the room. No amendments have been tabled to the Bill. We will have a single debate on all the clauses.

Clause 1

Import prohibition

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss clauses 2 to 4 stand part.

[Henry Smith (Crawley) (Con)]

It is an honour to serve under your chairmanship, Sir Mark. I am grateful for the support of hon. and right hon. Members from across the House who are serving on the Committee.

The Bill proposes to ban British hunters from bringing home the bodies and body parts of endangered species that they have killed. It has the support of the Government and all parties across the House. Outside of Parliament, such a ban enjoys the support of 86% of voters, and that has been reflected in the supportive media coverage. The UK’s leading wildlife and animal welfare charities have given the Bill their backing, as have some of the world’s leading conservationists and public figures, and African leaders.

The Department for Environment, Food and Rural Affairs held an extensive public consultation. More than 44,000 people and entities took part, including representatives of African communities and scientists. Some nine out of 10 of the submissions received by the Government supported the action we are discussing.

[John Spellar (Warley) (Lab)]

On that long list of support, including, most significantly, from the Government, can the hon. Member tell us what assurance he has had from the Government that they will help facilitate the Bill’s passage through not only the Commons but the other place, so that it becomes law in this Session?

[Henry Smith]

I am grateful for the right hon. Member’s intervention, and I pay tribute to all the work he does. I know he is passionate about this issue. I have been grateful for the support and advice given to me by the Government Whips. I am never complacent, but I have a significant degree of confidence that the Bill has the support to go through not only this place, but the other place.

[Jane Stevenson (Wolverhampton North East) (Con)]

I share the concern that we must get this important Bill through in this Session, but does my hon. Friend agree that the Government should be congratulated on having such a strong record on enhancing animal welfare and rights? They supported my ban on glue traps last year, and they have acted strongly on many other animal welfare issues.

[Henry Smith]

I am grateful for my hon. Friend’s intervention, and I commend her for successfully securing the prohibition on glue traps last year. That is a significant win for animal welfare. Again, there is a long list of Bills that have become law and others that will shortly be put on the statute book by this Government on animal welfare issues.

In answer to the points made by the right hon. Member for Warley and my hon. Friend the Member for Wolverhampton North East, this House can help the passage of the Bill. I hope that its Report stage and Third Reading will be scheduled for Friday 17 March. If that is the case, attendance by Members on that date to ensure that the Bill has support if there are any Divisions would be a great help in ensuring that it passes its Commons stages and has plenty of time to go through the other place during this Session.

[Sir Greg Knight (East Yorkshire) (Con)]

I note that clause 4(2) states:

“Sections 1 and 2 come into force on such day as the Secretary of State may by regulations appoint.”

Has my hon. Friend received any assurances from the Government that they will not unduly delay those parts of the Bill coming into force? If he is not able to answer that question, perhaps the Minister could do so when she addresses the Committee.

[Henry Smith]

My right hon. Friend raises a very important point. I do not have a date, because obviously we do not yet know when the Bill will receive Royal Assent, but it is my understanding and belief that the Government are committed to this legislation and want it to come into force at the earliest opportunity. I echo my right hon. Friend’s remarks, and seek similar reassurances from the Minister when she responds at the end of the debate.

A recent opinion poll shows that almost 70% of South Africans believe that trophy hunting should be banned altogether. However, we are not here to ban trophy hunting, even though we may wish we could, because that is not our purpose or remit; the territorial extent of the legislation is Great Britain.

[Matt Rodda (Reading East) (Lab)]

I am grateful to the hon. Gentleman for giving way, and I offer him my support for his work on this matter. I also pass on the good wishes of my constituents, many of whom have been deeply concerned about this issue for some time. I have had a great deal of correspondence about it, and they appreciate the work that the hon. Gentleman is doing.

Regarding the territorial extent of the Bill, this legislation obviously affects the UK. Perhaps the hon. Gentleman could update the Committee on any discussions he has had with the Government about their plans for training Border Force staff in this area, and what additional equipment those staff will have to enable them to scan for this material, should some hunters quite wrongly try to bring it into the UK.

[Henry Smith]

I am grateful to the hon. Gentleman for his support. He is absolutely right; I think we have all been very much heartened by the support of our constituents, who have encouraged us to ensure that this legislation gets on to the statute book. I am grateful to the voluntary organisations that have for many years campaigned on this issue, raised awareness and ensured that we here in Parliament respond to their requests.

The hon. Gentleman raises a very important point about enforcement. We can pass all sorts of legislation in this place, and that is fine, but unless that legislation is enacted, as my right hon. Friend the Member for East Yorkshire mentioned, and then enforced, it has little effect. I am sure that the Minister will have heard that point, and I will certainly pursue it. It is important that Border Force customs officials are aware of how people who wish to abuse or circumvent the ban might do so, and how to spot that.

[Kevin Foster (Torbay) (Con)]

I congratulate my hon. Friend on the work he has done on the Bill. Will he reflect on the fact that Border Force already enforces a range of obligations—for example, looking to prevent the import of banned items into the UK under the convention on international trade in endangered species—and an extension to include ensuring that illegal hunting trophies do not enter Great Britain is something that they should easily be able to build into their work?

[Henry Smith]

My hon. Friend raises an important point: UK border and customs officials enforce very professionally the laws that exist right now, identifying where people might be seeking to bring illegal items into the country. Of course, I encourage the Home Office to ensure that when the Bill makes it into law, as I hope it does, that is clearly understood by the officials securing our border.

[Rachael Maskell (York Central) (Lab/Co-op)]

My constituents, too, are passionate about seeing this Bill on the statute book, and much more besides. Will the hon. Gentleman clarify what assurances he has had from the Government, at a time when the Northern Ireland protocol is being hotly debated, that there will be no leakage regarding the Bill, and that they will ensure that there can be no imports into the UK of these so-called trophies?

[Henry Smith]

I very much appreciate the support for the Bill from the people of York, Crawley and elsewhere in the country. I wish the Bill’s extent was the whole United Kingdom, but because of the Northern Ireland protocol, that is not possible at the moment. I will address that point later when I discuss the detail of the relevant clauses. The hon. Lady makes a very important point: we do not want what are technically trophies—I call them body parts—hunted from endangered species to come through some sort of back door in Northern Ireland. I will talk a bit more about that in a few moments.

We can send a very strong message to the world and show international leadership in the face of a global extinction crisis. We can stop British people killing the world’s most endangered species for entertainment and symbols that some people sadly think represent an achievement they can be proud of.

[Kerry McCarthy (Bristol East) (Lab)]

The Bill is obviously about preventing the import of trophies into this country, but the hon. Gentleman just spoke about showing leadership. A Danish company called Limpopo & Diana Hunting Tours is promoting hunting trips in Bedfordshire—on the Woburn estate, I think. People pay up to £25,000 to shoot stags. Clearly, people from other countries come to this country for trophy hunting, so I hope the Bill influences other countries to follow suit.

[Henry Smith]

I am grateful for that intervention. I paid tribute to the hon. Lady last night in a different animal welfare debate in the main Chamber, and I am happy to repeat my appreciation for all the work she does to highlight animal welfare issues in Parliament. She has a strong record on that. I was not aware of the very sorry example that she mentions. The Bill is about preventing the import of trophies hunted from endangered species, but I very much support her wider point. Personally, I find it abhorrent that people should be flying into this country to shoot stags, but that is beyond the scope of the Bill.

[Mrs Flick Drummond (Meon Valley) (Con)]

This point is in a very similar vein to that made by the hon. Member for Bristol East. The explanatory notes state:

“Trophies from captive-bred animals are currently subject to less strict controls than wild animals. An Import permit is not required for trophies from captive-bred animals of Annex A and six Annex B species.”

That is what we are looking at. Will my hon. Friend the Member for Crawley confirm that the trade in trophies from captive-bred animals will also be covered by the Bill?

[Henry Smith]

Yes. I am grateful to my hon. Friend for that important clarification. She is referring to so-called canned hunting experiences, whereby, appallingly, endangered species are bred purely to be in an enclosure to be shot for some sort of entertainment by trophy hunters. The Bill covers that—it covers all endangered species listed in CITES annexes A and B. The sorry and sad circumstances in which an animal is killed for a trophy—whether they are out in the bush or the tundra, in the case of polar bears, or in an enclosure—do not matter.

13:44

In the eyes of the vast majority of right-minded people, trophy hunting is barbaric. There is simply no reasonable or plausible excuse for it. The science proves that it is cruel. Most animals shot by trophy hunters do not die clean, quick deaths. They die slowly and painfully. Many are lost by hunters, as animals crawl into the bush after being hit in a desperate bid to avoid death.

The Bill makes an important contribution to tackling the conservation crisis before us, as species hunted for trophies are among those that have suffered the most dramatic declines. Big cats such as lions and leopards have seen their numbers fall by 90% in the last half century, and Africa’s two elephant species have just been declared endangered and critically endangered on the International Union for Conservation of Nature red list. Hippopotamus numbers have fallen significantly over the past decade and there are now only around 30,000 zebras left.

I pick those species for particular mention for a reason: those five animals, classed as endangered by CITES, are the African species that British trophy hunters most like to shoot. However, they are not the only endangered or threatened animals killed by British hunters for souvenirs. Others include cheetahs, which have vanished from 98% of their range and of which an estimated 6,500 remain; the black rhino, which is classed as critically endangered on the red list and of which just 3,000 are left in the wild; and polar bears, which I mention as, further to the point made by my hon. Friend the Member for Meon Valley, the Bill covers all endangered species regardless of where they are in the world. There are believed to be only some 26,000 polar bears left in the wild. Over the past half century, twice that number have been shot for their skins and for so-called sport.

The extinction emergency before us is the result of many problems, including habitat destruction from human expansion, habitat degradation caused by climate change, persecution and poaching, but trophy hunting is making the struggle for survival even more difficult. One of the threats facing species, which is virtually unique to trophy hunting, is the problem of artificial selection. Trophy hunters seek out and kill the biggest animals. They do that because they want the most impressive trophies to put on display, and because it helps them win prizes and enter the records books of hunting groups such as Safari Club International.

Scientists have found that lions have lost 15% of their gene pool over the past century. They say that killing just 5% of the best males that are left may be enough to push the species past the point of no return. Elephant tusks are getting smaller, and there are many more tuskless adult elephants than before. That means that elephants are more likely to die each year as drought becomes more frequent. Elephants are finding it harder to search for water that may lie under dry riverbeds.

Humanity has a duty to do everything it can to tackle these challenges. Trophy hunting is one thing that we can do something about now. The problems of feeding a growing African population are complex; trophy hunting, however, is simply unnecessary and unconscionable. It does not feed hungry people, it does not clothe or provide fuel for people living in subsistence economies, and it is not an act of self-defence. Trophy hunting is the leisure activity of a tiny and mindless minority. It is completely alien to African and Inuit cultures and traditions, and, unlike photo safaris and other forms of nature tourism, it brings a pittance into local communities and generates next to no revenue for wildlife conservation.

I am pleased to say that we are not alone. The Australians, the French and even some American states have all brought in varying degrees of trophy hunting bans. The Dutch have introduced sweeping prohibitions, the Belgian Parliament has voted unanimously to implement identical restrictions, and, in the last few weeks, the Government of Finland have announced plans for a ban on hunting trophies from outside the European Union. We are on the right side of history, we are on the right side of public opinion, and we are on the right side of the people of Africa and elsewhere, where trophy hunters are robbing people of their—and our—natural heritage. We are on the side of the world’s wildlife, which is in crisis. We must act now, before it is too late.

I therefore hope that the Committee will give its strong support to the Bill. I urge colleagues in both Houses to see that it passes all stages before the end of the Session, further to the point made by the right hon. Member for Warley. I hope that when it comes to the secondary legislation stage, the Government will ensure that the scope of the Bill includes not just species listed in the wildlife trade regulations, annexes A and B, but those classed as “near threatened” and above on the IUCN red list. That is key to ensuring that the Bill accomplishes the aim of both the Government and the public by introducing the toughest ban on hunting trophies in the world.

I will briefly run through the four clauses and what they are designed to do. Clause 1 prohibits the import of hunting trophies into Great Britain. Subsection (1) prohibits the import of hunting trophies where they are from animals of certain species, as set out in clause 2. The prohibition applies to animals that are hunted after the clause comes into force and being brought into Great Britain by or on behalf of the hunter.

Subsection (2) defines “hunting trophy”. The definition is consistent with the internationally agreed definition used in the UK’s current controls. There are no exemptions to the import ban, which would see import permits for hunting trophies meeting the conditions as set out in subsections (1) and (2). Items that are not hunting trophies according to those conditions will continue to be covered by the UK’s current controls. Subsection (3) disapplies the current controls on the import of hunting trophies under the UK wildlife trade regulations for items in the scope of this prohibition. Subsection (4) defines the wildlife trade regulations, which are retained law implementing CITES.

Clause 2 sets out the species in scope of the import prohibition. Subsection (1)(a) applies the import prohibition to all animal species listed in annexes A and B to the wildlife trade regulations, with exemptions made by the Secretary of State through regulations. Subsection (1)(b) applies the import prohibition to other animal species, as can be specified in regulations. The rest of the clause gives more information about those regulations. Subsection (2) sets out standard technical provisions about what the regulations are able to do to make different provision for different purposes, or make consequential, incidental, supplementary, transitional, transitory or saving provision.

Subsection (3) sets out that those regulations are to be made by statutory instrument. Subsection (4) sets out that the first regulations made under subsection (1)(b) —in effect, the first listing of additional species—are subject to the affirmative procedure. That ensures wider parliamentary scrutiny. Subsection (5) sets out that further regulations will be subject to the negative procedure. That is in line with how annexes to the wildlife trade regulations are updated—when new species are added to the CITES appendices in order to regulate their international trade, for example.

Clause 3 sets out how a provision on imports to Great Britain will work in relation to Northern Ireland, taking into account the unfettered access principles in the UK Internal Market Act 2020. Subsection (1) makes it clear that the movement of trophies from Northern Ireland to Great Britain will be covered by the ban, and subsection (2) makes it clear that the same sanctions under the Customs and Excise Management Act 1979 will apply. Subsection (3) exempts qualifying Northern Ireland goods from the import prohibition as defined in subsection (4), with reference to the European Union (Withdrawal) Act 2018, in line with the UK Internal Market Act 2020. Qualifying goods currently include Northern Ireland “processed products” and goods that are

“present in Northern Ireland and are not subject to any customs supervision, restriction or control which does not arise from the goods being taken out of the territory of Northern Ireland or the European Union.”

Part 2 of the definition of “qualifying goods” includes hunting trophies from all annex A species and from six annex B species that have been issued a UK import permit to be lawfully imported into Northern Ireland. The qualifying trophies would result in a CITES permit to be moved from Northern Ireland to Great Britain.

Finally, clause 4(1) sets out the territorial extent of the Bill. Subsections (2), (3) and (5) set out when and how the provisions of the Bill come into force, and subsection (4) provides powers for the Secretary of State to make transitional or saving provisions in regulations that commence provisions in the Bill. Subsection (6) provides that the short title of the Bill will be the Hunting Trophies (Import Prohibition) Act 2023 once it receives Royal Assent.

I commend the Bill to the Committee.

[Sammy Wilson (East Antrim) (DUP)]

I welcome the Bill and congratulate the hon. Member for Crawley on getting it to this stage. I hope the Government will support it to ensure its full passage through both the House of Commons and the upper Chamber.

I want to start by saying some things about the necessity of the Bill. First, public opinion is clearly in favour of it. Some 86% of those surveyed believe there should be an immediate import ban, and that cannot be ignored.

Secondly, in the countries where these animals are often hunted, there is now a growing consensus among politicians, the population, academic researchers and environmentalists that the trade is not good for their country and not good for the animals, especially those under threat—it does not even contribute economically in the way that many of those who support this trade and activities claim that it does.

Thirdly, it is clear from the figures that have already been quoted—I will not go through them all again—that many of the animals are being hunted close to extinction.

[Peter Dowd (Bootle) (Lab)]

I congratulate the hon. Member for Crawley on his Bill and my right hon. Friend the Member for Warley, who has been working on the issue for a long time. I completely support what the right hon. Member for East Antrim says, but on the question of potential extinction, does he agree that it would be better if organisations such as Safari Club International were honest about their position—that they just like shooting and killing things? They appear to be dressing that up as a sort of conservation effort on their part, with the killing of the animals bizarrely irrelevant to that aim.

[Sammy Wilson]

The hon. Member is right. There is no evidence that such activity has led to the conservation and protection of animals. In fact, as a result of trophy hunting, elephant numbers are now in a critical situation. Lions are often hunted after they have been bred in captivity, so there are no longer even enough out in the wild, and the numbers are down to about 200,000. Leopards have fallen from 700,000 in the 1960s—in 1961, I think—to 50,000 today, so there is no evidence there of conservation. It is the same with hippos—the hippopotamus population is down by 20%.

The idea that hunting animals somehow helps with conservation is just not proven by the facts—yet despite that, and despite the clear threat, we find that, given the number of trophies coming into the United Kingdom, the trade has not declined but increased substantially: from 17 per year in 1981 to 300 in the year before the pandemic. There does not even appear to be any restraint on those who carry out these activities, despite the fact that fewer animals are available.

Fourthly, I do not think that there is even an economic case. It is significant that countries such as Tanzania, which are banning the practice, are getting far more money per hectare from nature tourism than they would have from the hunting of animals. The figure that has been given is $14 per hectare, as opposed to 20 cents per hectare for when tourism was centred on hunting wild animals. The case is unassailable.

14:00

I have two concerns about the Bill, one of which is totally outside the control of our Government. I have read the comments made by the hunters—I do not want to go through some of them, but we all received the briefing. Some people hunt for pure pleasure. One comment was: “We sat and had a few beers, then went out and shot monkeys.” Another was: “It’s lovely to hear the smack of the bullet hitting the animal.” I do not know whether banning the importation of trophies will ever stop such people from going hunting; the only difference will be that they cannot bring the heads or parts of the body home. This might be beyond the remit of the Bill or the discussion today, but we need to look at how to offer economic alternatives to countries that still allow people to make a holiday out of killing animals. That, however, is outside the scope of the Bill.

I have another concern about the Bill itself. As has been alluded to, it refers only to Great Britain; it cannot refer to Northern Ireland because of the Northern Ireland protocol and the fact that Northern Ireland remains under EU law. If the EU allows the importation of trophies, they have to be allowed into Northern Ireland. Many of those who go trophy hunting probably do not have homes in Northern Ireland or places to display trophies there, but I am still concerned. I do not even know whether many people in Northern Ireland engage in trophy hunting and bringing trophies home, but I have some fears that it could become a depository for some such items.

Furthermore, despite the assurances given by the hon. Member for Crawley about isolation or the ability to ensure that Northern Ireland does not become a conduit for such trophies, clause 3 makes it clear that trophies cannot be imported from Great Britain into Northern Ireland—I believe there is the ability to stop that—and that they cannot be removed from Northern Ireland to Great Britain. Here is the problem, however: I do not want to see any more restrictions on trade between Northern Ireland and Great Britain, but there is a free flow of goods from Northern Ireland to GB. There are no checks, and should not be, on any internal trade, but while Northern Ireland remains under the protocol and while the Bill cannot apply to trophies being brought into Northern Ireland through the EU, there is always the danger of it being used as a back door.

The obvious answer is for the Government to deal with the issue in the current negotiations, so that the law that applies to the rest of the United Kingdom will apply fully to Northern Ireland and laws we do not want to apply to the United Kingdom do not apply to Northern Ireland either. It is important that that issue is addressed—this is another incentive. I know that you will stop me if I deviate from the Bill too far with this issue, Sir Mark, but it is yet another example of the position we have remained in, as a result of the inadequate negotiations on Brexit, impinging on the rest of the United Kingdom. Sometimes people think that this is only a Northern Ireland issue. It is not; the loophole regarding what happens in Northern Ireland can influence, affect and sometimes make less effective the laws that we want to apply to the whole country.

I hope that the Minister will address the question of what can be done. While the protocol is in place, that will be difficult, but I hope that thought will be given to the issue, because we do not want to become the channel through which an illegal trade can continue.

[Kerry McCarthy]

The right hon. Gentleman makes an interesting point, and I look forward to hearing what the Minister has to say on it. The right hon. Gentleman is quite right that the Bill could mean that Northern Ireland acts a back door. Another way of tackling the issue is to persuade EU countries to implement bans. Finland has passed a law that will, from June, ban the import of hunting trophies of endangered species. Does he agree that we need to encourage other EU countries to go down the same path?

[Sammy Wilson]

Yes, I do. There is an international battle to be had here. If we really believe that hunting is endangering animals, then we should encourage nations across the world to act—and not only nations in Africa; do not forget that there are 30 countries across the world where endangered animals are hunted almost to extinction. We need to persuade those countries that there is an alternative to this trade. We also need to persuade countries that allow trophies in, and therefore encourage the trade, of the view encapsulated in the Bill, so that there is a whole approach to the issue. I would be more than happy if, instead of Northern Ireland having to comply with EU law, the EU decided it would comply with UK law. That would be a gain for us. I have no doubt that the UK population shares its opposition to hunting trophies with the populations of many other countries.

I give my full endorsement to the Bill, and congratulate the hon. Member for Crawley on pushing it to this point. I would like to hear from the Minister about how the loophole that will exist until the protocol is dealt with can be handled.

[Sir Greg Knight]

It is a pleasure to see you in the Chair, Sir Mark. I want the Bill to proceed, so I will be brief. I congratulate the my hon. Friend the Member for Crawley on bringing it forward. Some 11 years ago, I backed a new wildlife protection campaign launched in this House by the Royal Society for the Prevention of Cruelty to Animals. The theme was: stamping out the international trade in endangered and vulnerable species. I was shown a selection of items that the authorities had seized. Among them were some elephant tusks, which were under police guard because of their value. That was not what shocked me most. I was handed a trinket—not a carving or a sculpture, but a stuffed tiger cub, slaughtered at 10 days of age and mounted on a plinth. It was killed solely to be a decoration on someone’s mantelpiece. The baby cub trophy was seized in a police raid in the UK. I was horrified and repulsed by that, as I am now by the knowledge that there are people out there who think it is quite acceptable to slaughter an endangered animal for a trophy, or for decorative purposes.

Over a decade later, we are still debating the problem. It has taken too long to get here. I wholeheartedly support my hon. Friend in bringing forward this important measure. Trophy hunting of endangered species is sickening, barbaric and totally unacceptable.

The biggest threat to any private Member’s Bill is the clock. It is all too easy to run out of time, so I conclude by saying “Well done” to my hon. Friend. The right hon. Member for East Antrim said that we may need to do more. He is right, but this is a good start. Let us get on with it.

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Trudy Harrison)]

It really is a pleasure to serve under your chairmanship, Sir Mark.

As other right hon. and hon. Members have done, I thank my hon. Friend the Member for Crawley for doing such a sterling job in bringing the Bill before us and for his work on conservation and animal welfare more generally. I also thank all right hon. and hon. members of the Committee.

There have been queries about how the Government will support the Bill. As the Minister dealing with the Bill, I will work with my colleague in the other place, Lord Benyon, and I will speak to all Members across the House to ensure that the Bill has the support that it needs. I pay tribute to officials across DEFRA who have supported my hon. Friend the Member for Crawley, me and previous Ministers in making progress with it.

[Kerry McCarthy]

As has been mentioned, we have had quite a bit of lobbying by people who are involved in talking to the Government about this issue. At one point, basically, they said that the majority of what was said by Members on Second Reading was factually incorrect. Will the Minister confirm that she, with her officials, has carefully considered the evidence, that she has looked at whether their arguments are valid and that she has come to the conclusion, as we all have, that the Bill is the right thing to do?

[Trudy Harrison]

I thank the hon. Member for the opportunity to do exactly that. As the new Minister taking up this responsibility, I have had detailed conversations with Members and my officials, who have done a diligent and highly professional job of assessing all the evidence, supporting me and my hon. Friend the Member for Crawley in making progress with the Bill.

We are taking decisive action to respond to the British public’s concerns about trophy hunting abroad. We are acting to protect some of the world’s most iconic animals, including lions, rhinos, elephants and polar bears.

[John Spellar]

I welcome the Government’s support for the Bill. As mentioned by a fellow ex-Deputy Chief Whip, the right hon. Member for East Yorkshire, the most crucial thing is to ensure sufficient time for it. In the event of unreasonable obstruction, will the Minister consider a Government carry-over motion for the Bill?

[Trudy Harrison]

I very much appreciate the advice of the experienced right hon. Member. All I can say at this stage is that I look forward to a speedy Third Reading. I very much hope that Members across the House will support the progress that the Bill needs to make to secure Royal Assent.

[Peter Dowd]

May I pick up on the point made by my hon. Friend the Member for Bristol East? I have had information today that came from Dilys Roe, a member of the UK Government Darwin unit, and Professor Amy Dickman of Oxford University, who describe the figure that 86% of the public would like the Bill to become law as “cherry-picked data” and write that Survation

“found that only around 40% of Britons surveyed would want a trophy hunting ban if it caused harm to people or wildlife.”

I find it remarkable that we are getting that kind of information when, as far as I can see, the evidence is contrary to that. It really is important—I hope the Minister agrees—to put paid to some of the points being made, which are claims of misinformation that in themselves appear to be misinformation.

[Trudy Harrison]

I will not be drawn into a conversation about that particular piece of information. Suffice it to say that in my comments, I hope to address some of the points that Members have raised today.

One of those points was about whether the Bill would apply to captive-bred or so-called canned animals, and I can confirm, as my hon. Friend the Member for Crawley did, that it will. It will be one of the toughest import bans, covering thousands of species of conservation concern and not allowing any exemptions. The ban will help to strengthen animal protection and support long-term conservation outcomes.

14:15

Our aim is to ensure that imports of hunting trophies to Great Britain are not putting additional pressure on already threatened species. I will address the points made by the right hon. Member for East Antrim about Northern Ireland later in my remarks. It is a clear signal of our commitment to conservation, in line with our wider commitment to halt and reverse biodiversity loss.

Around 1 million animal and plant species are threatened with extinction, many within decades, and the abundance, diversity and connectivity of species are declining faster than at any time in human history. From 2011 to 2020, the UK recorded 731 imports of hunting trophies under CITES. That included so-called trophies from elephants, hippos, lions, leopards and brown and black bears. Imports came from South Africa, Zimbabwe, Mozambique, Tanzania, Canada, Zambia, Namibia, Russia, the US, Botswana and a small number of others. Over 85% of the 44,000 responses to our consultation were in favour of further action. Opinion polling has shown similar levels of support for a ban among the British public.

The right hon. Member for East Antrim asked what else we are doing internationally. We have a range of programmes aimed at conserving and restoring biodiversity, contributing to poverty reduction in developing countries and supporting local communities. Those include £90 million for the Darwin initiative and Darwin Plus, to address biodiversity challenges and support local communities; £30 million for action on illegal wildlife trade; and the £100 million biodiverse landscapes fund, to work across six landscapes to protect and restore critical terrestrial ecosystems. We are working internationally to address the concerns about biodiversity and restoring nature.

[Rachael Maskell]

I am concerned that the trophies that these bloodthirsty hunters bring into the UK will be in the form of money, not body parts, because they will sell their kill to other traders across the world. What consideration has the Minister given to introducing a moratorium on people being able to make proceeds out of their kill?

[Trudy Harrison]

I share those concerns. I am having detailed discussions with international counterparts in subsequent months. I am afraid that I cannot provide any further detail on that specific point, but I agree with the premise of what needs to be achieved internationally to truly make a difference and conserve endangered species. An awful lot was achieved at the recent COP15, which my right hon. Friend the Secretary of State attended, including a commitment to protect 30% of land and sea and a whole host of other targets and goals to preserve nature and biodiversity.

Clause 1 makes provision for the import prohibition and also defines a hunting trophy for the purposes of the ban. This prohibition, without exemptions, goes much further than our current licensing system in clamping down on these imports. We are sending a clear message, addressing the public’s concerns and delivering our manifesto commitment. The ban will make sure that there is no possibility at all that imports to Great Britain could be putting the conservation of species abroad at risk. A ban is also practical to implement, avoiding ambiguity about what cases might or might not be covered.

The definition of a hunting trophy is drafted to maintain the effect of the current definition that is used for CITES controls. It will cover all items from trophy hunting. That approach means that we will not inadvertently have knock-on effects on other forms of trade under CITES that are not products from trophy hunting. Changing that definition could cause confusion about what is and is not covered, and disrupt other imports by businesses or individuals for other purposes, such as commercial trade in items.

Moving to clause 2, the Government committed to ban imports of trophies from endangered animals, and that is exactly what the Bill delivers. The clause ensures that our approach will be comprehensive, properly clamping down on imports of trophies from endangered animals. By cross-referencing annexes A and B of the wildlife trade regulations, which implement appendices 1 and 2 of CITES, the Bill covers all animal species that are internationally agreed to be threatened or potentially threatened by international trade, including imports of hunting trophies. Thousands of species are covered by those annexes, and covering all those animals even though not all are trophy-hunted means that our policy is as clear and practical as possible. It is a clear and straightforward approach: there will be no imports of trophies from any annex A or B species. That is what the public expect, and it is what the Bill will deliver.

The Bill also includes, in clause 2(1), a power to add further species to the scope of the ban to make sure that nothing is missed and that trophy hunting pressure does not shift to target other endangered animals. On Second Reading, the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Taunton Deane (Rebecca Pow), made it clear that we will be using that power to list additional species of conservation concern that are targeted for trophies, such as African buffalo and reindeer. We will be looking at species with a conservation status of “near threatened” or worse according to the IUCN red list, and will publish that list of species for Members’ consideration before we table the instrument to list them. We will be able to act swiftly to list any more species in future if those species’ conservation status worsens, or if we see evidence of trophy hunting becoming a problem in such cases.

Clause 3 sets out how a ban on imports to Great Britain will work, and how it will deal with movements from Northern Ireland. As I know the right hon. Member for East Antrim understands, by virtue of the Northern Ireland protocol, current CITES controls on hunting trophies contained within EU legislation will remain in force, effectively maintaining the status quo. The hon. Member for York Central mentioned a concern about trophy hunters avoiding the ban by moving banned trophies through Northern Ireland, but there is no back door through which trophies can enter Great Britain.

Clause 4 deals with the extent and commencement of the Bill, and sets out its short title.

[Matt Rodda]

I have a further question in relation to Northern Ireland. Could the Minister explain to the Committee what discussions, if any, she has had with the Government of the Irish Republic about this matter? Clearly, there is a lot of cross-border trade that, as my hon. Friend the Member for York Central mentioned, could inadvertently find its way into Great Britain.

[Trudy Harrison]

As the hon. Member will realise, I am a relatively new Minister in this particular post; it is officials who have dealt with the devolved Administrations, consulting on how we can best ensure that the Bill meets both our legal aims and, importantly, our policy aims. This is a reserved matter, and I thank officials in the devolved Administrations—in Wales and Scotland in particular—for their engagement with DEFRA.

[Rachael Maskell]

Obviously, there is concern about the increase in this trade that we may see in parts of the United Kingdom. I have two questions for the Minister. First, how will she monitor the effectiveness of this legislation, and is it her intention to report regularly to the House on its impact? Secondly, is passing the animals abroad Bill still on the Government’s agenda, and if so, will the Minister look at the tourism industry that is promoting this trade and seek to introduce a ban on UK companies promoting hunting? Again, that could influence the effectiveness of this Bill.

[Trudy Harrison]

On monitoring and publishing how effective the ban is, there will be a great deal of interest among both the public and Members across the House in whether the ban has been successful. That will be important in encouraging other countries to follow suit. We will be as transparent as we possibly can be.

On the effectiveness of the ban, there was a question earlier about whether Border Force would require extra equipment to undertake its work. That is not anticipated at this stage. Border Force is well versed and experienced in dealing with imports. We expect to have the skills available at ports and airports to undertake that work.

[Sir Greg Knight]

Before the Minister concludes, for the benefit of the Committee, will she address the point that I made earlier about the coming into force of clauses 1 and 2? Can she give some hope that that will be done speedily, please?

[Trudy Harrison]

I certainly can provide assurance that I will work with my counterparts in the Lords and with the Whips Offices to ensure that we do everything we can to get the Bill through all stages in both Houses and to secure Royal Assent.

We are taking decisive action on animal welfare, and I know that colleagues have great interest in that agenda. We set out an ambitious programme of legislative and non-legislative animal welfare reforms in our action plan for animal welfare, which was published in May 2021. We are delivering on those commitments in this parliamentary Session—I am pleased that the Shark Fins Bill, which we support, has now been introduced in the other place, having completed its passage through this House. We are making good progress in this area.

I reiterate the Government’s full support for this important Bill as it makes its way through Parliament, thanks to my hon. Friend the Member for Crawley and the other right hon. and hon. Members in Committee. They have done an excellent job diligently, dedicated to the benefit of conservation abroad.

[Henry Smith]

Let me conclude by expressing my sincere thanks to right hon. and hon. members of the Committee for their supportive remarks. Remarkably, I agree with everything that was raised. I also thank those Members who are not present, but spoke on Second Reading, for their support. I express my gratitude to the Clerks in the Bill Office for all the technical and logistical support that they have offered me; to the team in the Department for Environment, Food and Rural Affairs for their support to me; and to the Government Whips Office.

Sadly, in October 2021, our dear late colleague Sir David Amess was murdered. This is an issue that he campaigned on in the last week of his life, and I dedicate this Committee sitting to his memory and fine legacy. [Hon. Members: “Hear, hear.”]

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clauses 2 to 4 ordered to stand part of the Bill.

Bill to be reported, without amendment.

14:29

Committee rose.

Westminster Hall

Wednesday 25th January 2023 Westminster Hall

Wednesday 25 January 2023

[Esther McVey in the Chair]

Public Procurement Processes

Wednesday 25th January 2023 Westminster Hall

09:30

[Mick Whitley (Birkenhead) (Lab)]

I beg to move,

That this House has considered reform of public procurement processes.

It is a great privilege to serve under your chairmanship, Ms McVey, and I am grateful to Members for participating in this important debate.

The House is considering the Procurement Bill, and I stress that I and my party fully appreciate the need for legislation on the issue. That is why Labour did not oppose the passage of the Government’s Bill on Second Reading. Indeed, I had entertained the hope that the sentiment expressed in the Green Paper that preceded the Bill that social value

“is critical to ensuring the social, economic and environmental benefits are delivered”

would find a place in the Bill itself.

I do not believe that addressing the needs of our communities across the country by embedding a requirement for a measure of social value to be integral to every contract awarded is either unreasonable or beyond our powers. After all, we are talking about public contracts that account for £1 in every £3 of taxpayers’ money spent, totalling £300 billion of public funds every year. That spending should bring direct benefits to the people of this country, not primarily to the corporations that win most contracts, and still less to those in tax havens who utilise loopholes in the law to siphon taxpayers’ money into offshore accounts. However, the Bill does not match the scale or scope of reform to public procurement procedures required to ensure that it addresses the needs of the British people following the UK’s exit from the EU. Nor does it provide guarantees that the danger of corruption will be permanently removed from the process of awarding contracts.

My objective in today’s debate is to highlight the Bill’s shortcomings and to propose ways in which we could achieve a change in legislation that resulted in a public procurement legislative framework that could radically improve our public services, boost our local economies and deliver real benefits and hope for the future to the people of so many of our left-behind towns, such as Birkenhead, the constituency I am privileged to represent. Moreover, through root-and-branch reform of the process, we could ensure that the strides we need to take towards our net zero target were quicker and longer.

Let me begin with an issue close to my heart. The Mersey ferries are an iconic and world-famous symbol of Merseyside. After years of transporting tourists and commuters alike across the river, they need renewing. The Mayor of the Liverpool city region, Steve Rotheram, won a grant for one to be replaced and the other refurbished. That is to be warmly welcomed, and I am as grateful as Steve was for the opportunity to retain and refresh such an important and historic transport system, but what happened next goes to the heart of the public procurement process. Unfortunately, it is not addressed by the Bill.

Birkenhead is a shipbuilding town and home to the world-famous Cammell Laird shipyard. In any rational world, it would make perfect sense to build and refurbish the ferries in the shipyard that sits on the river they will be sailing on. Sadly, neither the existing procurement rules nor those proposed in the Bill provide us with the means to ensure that such a rational decision is the one that gets made. The reason for that is simple: there is no provision for vital issues such as the impact on social value, the local economy and the supply chain to be taken into account in the awarding of contracts. Quite the reverse: under the Public Contracts Regulations 2015, the primary consideration in accepting a bid has to be

“getting the right supplier and best tender in accordance with sound commercial practice.”

That so-called sound commercial practice tied the hands of the Mayor of the Liverpool city region regarding the tendering process for the Mersey ferries. The Mayor, the trade unions, Cammell Laird and I, as the local MP, worked hard to find solutions, and eventually a joint venture was agreed between a Dutch shipbuilding firm and Cammell Laird, but under the existing rules the allocation of the work—the amount of work that could be awarded to each site—could not be agreed or decided by the Mayor, despite him being the contracting authority.

[Hywel Williams (Arfon) (PC)]

I am glad the hon. Gentleman is making that point about participation. The Senedd in Cardiff is introducing a Welsh procurement policy under the Social Partnership and Public Procurement (Wales) Bill, which is part of the agenda to involve trade unions and others when delivering public projects with certain objectives. I think he shares that aim, but does he share my concern that the Government’s recent attacks on trade unions and the right to strike could undermine that approach of introducing a broader range of people into the process of public procurement?

[Mick Whitley]

Public procurement is for all, not just the Government or privateers. This is all about social value.

The fact that a vital local employer in Birkenhead, a deprived constituency, was at the mercy of a Dutch company is a very good reason why the public procurement process needs to be reformed. Social value is not an empty phrase. Cammell Laird is the largest employer in my constituency. Birkenhead has an above-average number of benefit claimants, who struggle to survive, so work flowing into Cammell Laird is vital to turn despair and poverty into hope and prosperity, yet the opportunity to create such work was hindered by the legal restrictions surrounding the existing procurement process. That problem is not addressed by the Procurement Bill, because it excludes social value—a key measure of the overall value of any contract.

Value for money has come to mean the cheapest bid, not the best bid. As a result, Cammell Laird and the workers in my constituency suffered a blow. The bulk of the work of the ferries contracts goes through a Dutch company, which I have been told will be keeping its costs low and its profits high by outsourcing work on Mersey Ferries to Romania. That is a glaring example of how public money has not served the public good. I am pleased for the workers of Belfast and Devon that Harland & Wolff and BMT were included in a winning Team Resolute bid, but there is no guarantee of the amount of work they will get as a result of the contract.

[Kirsty Blackman (Aberdeen North) (SNP)]

On that point, is the hon. Gentleman concerned about the climate change impact—the carbon impact—of getting stuff and people from further away, the social issues that that causes, and the effect on the people who live locally?

[Mick Whitley]

The hon. Lady makes a good point, which I will cover a bit later.

Team Resolute is led by a Spanish ship company called Navantia, which is guaranteed to get at least 40% of the work, worth about £640 million. Ministers have confirmed that there is no limit on the jobs it can create in Spain. As for Navantia being part of a UK consortium, it is true that the bid includes Navantia UK, but here’s the rub: Navantia UK was created only in May last year as a subsidiary of the Spanish firm. It has no trading history, and its two directors live in Spain.

At the very heart of the problem lies the fact that a social value calculation is not included in the public procurement process. My call on the Government is simple: make it a compulsory component—make its inclusion in the consideration of all bids compulsory.

[Peter Dowd (Bootle) (Lab)]

Is my hon. Friend aware that in the other House, Members expressed concern that the Procurement Bill falls short of the Green Paper, in that there is no exact definition of key procurement principles, there are no specific requirements on climate objectives and, as he just said, there is no real emphasis on social value elements?

[Mick Whitley]

I thank my hon. Friend for that intervention; I am just about to cover that point.

Only by including a social value calculation can we ensure that every contract is transparent, and that its impact on local communities, job creation, the standard of jobs and the local economy is taken into account and plays a key part in shaping the final decision. Its absence from the Bill is even more surprising given the noise the Cabinet Office made in response to the consultation on the original Green Paper, “Transforming Public Procurement”. The Cabinet Office wrote last December that social value

“can play a big role in contributing to the Government’s levelling-up goals.”

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

Social value is not restricted to these shores. The hon. Gentleman will be aware that China has a very prescriptive regime, particularly in relation to people in Xinjiang province. In this country, Hikvision produces CCTV equipment for councils. Does he agree that the Government need to be much more careful about allowing such companies into the UK market?

[Mick Whitley]

Yes, I do agree with the right hon. Gentleman.

In December 2020, the Cabinet Office published a social value model that said there should be a requirement on Government Departments to evaluate social value when awarding contracts, and not, as previously, just to consider it. Yet when it came to publishing the Procurement Bill, there were no explicit references to social value, so Labour MPs and peers have raised it as something that should be integral to the Bill and the public procurement process.

Another problem with the Procurement Bill as it stands is that it contains no provisions to ensure that bad employers are prevented from winning contracts. Far too many bad employers exist and far too many of them profit from public procurement contracts. A decent Procurement Bill can address that with construction projects nationally and by legislating to tie local government contracts to a clear and fair employment charter of the kind that already exists in the Liverpool city region.

Contracting authorities should be obliged to build into every contract that involves even a penny of public money a cast-iron guarantee that fair employment practices and the right to trade union recognition will be respected. There are other aspects of public procurement, such as strict conditions regarding the need to meet our climate targets and helping to regenerate our country through a green industrial revolution, but I wish to finish on a very important principle that must be embedded into the reform of public procurement: a watertight mechanism to put an end to cronyism.

The Bill hands more powers to Ministers without any meaningful safeguards to ensure that decisions will not be determined by favouritism at best and cronyism at worst. This is not an abstract issue: it is, sadly, a real problem that has led to major scandals. While the country was rocked by the curse of covid, a VIP lane was opened to enrich friends of Conservative Ministers and donors to their party coffers. Taxpayers’ money was doled out without any proper scrutiny. As a result, orders of personal protective equipment were handed out to companies that had no track record of producing or providing medical equipment. More than half the £1.7 billion paid by the Government to politically connected VIP companies to supply PPE in the pandemic was spent on equipment that has not been used, according to new figures.

[Tim Farron (Westmorland and Lonsdale) (LD)]

The hon. Member is making a really important speech. He talked about NHS procurement, and social value must surely include saving lives. I chair the all-party parliamentary group for radiotherapy and last week we met oncologists, radiotherapists and cancer-centre managers. They say that one reason why we are not saving as many cancer patients’ lives as equivalent countries around the world is that we do not have a centralised procurement system for linear accelerators. As a result, we are 120 machines down on where we should be, and hundreds of machines are more than 10 years old. Does he agree that the Minister ought to consider central procurement, so that every part of the country has the up-to-date machinery to save lives through radiotherapy?

[Mick Whitley]

The hon. Gentleman makes a good point. The Government must be aware that the supply chains are too long. Instead of offshoring, they need to inshore.

Public money has been wasted on an industrial scale, and the ability of Ministers to throw taxpayers’ money away is now being codified in the Procurement Bill. Conservative peers voted down an amendment to ban the use of VIP lanes in the awarding of contracts. Together, my Labour colleagues and I will do our level best to change that and get the VIP lanes closed for good. The High Court has agreed with us and ruled the VIP lanes illegal.

[Peter Dowd]

I am sorry to interrupt my hon. Friend in mid flow. He has dealt with some specifics, but one of my concerns is that there does not appear to be any real assessment of how the measures in the Procurement Bill will fulfil its principles. For example, the Government want to launch new measures to promote jobs and new skills, but how many, and what sort of skills? They want to encourage economic prosperity and growth—God knows, we need it—but there is no indication of how. They want to tackle climate change and level up, but there are no indicators and no metrics at all to assess that. Does he agree that we need not just words but facts and assessment to back this up?

[Mick Whitley]

Yes, and the Minister should address that question in his response.

In summary, we cannot continue with a system under which one in six procurement contracts over a five-year period was found by the Fair Tax Foundation to have been awarded to companies with connections to tax havens. We cannot continue with VIP lanes. We need a system that is accountable and transparent and made watertight against cronyism; that places social value, local economies and fair employment practices at its heart; that enables the Government to recoup money from those who fail to deliver; that gives real opportunity to small, medium and social enterprises to win; and that recognises that outsourcing has been a complete failure and the time for a return to insourcing is overdue. Without extensive amendment, the Procurement Bill does none of those things.

[Esther McVey (in the Chair)]

I remind Members that they should bob if they wish to be called to speak. We will go to the Front Benchers no later than 10.33 am, mindful of the fact that Mick Whitley will need time to wind up the debate.

09:45

[Jon Trickett (Hemsworth) (Lab)]

I am pleased to speak under your chairpersonship, Ms McVey.

I congratulate my hon. Friend the Member for Birkenhead (Mick Whitley), who has made a great contribution to the debate. I agree with him that the procurement of services and goods during the pandemic was a disgrace. It is hard to avoid the word “racketeering” when we consider what happened. There was a time when suppliers would meet on the golf course—perhaps at the 19th hole, as they used to say—to rig the prices for providing services to local councils, and there was debate about whether that took place in freemasons’ lodges and elsewhere; now, it seems that they just pick up the phone to a Tory Minister or MP and it gives them access to the VIP lane.

One pound in every £3 of public spending goes on procurement, and possibly more. It is around £300 billion, which is an astonishing amount of money. The OECD, the European Commission and the United Nations have all said that procurement carries the biggest risk of corruption or fraud in modern states. Of the £12 billion that was spent on PPE, £4 billion was spent on contracts that failed to meet the NHS standards—a third was spent on supplies that were not fit for purpose. Some £10.5 billion-worth of contracts was awarded without any fair or open competition in a seven-month period at the height of the pandemic. We understand that there was a national crisis and huge pressure on the NHS, but notwithstanding that, something went badly wrong; everybody must agree with that.

[Peter Dowd]

It is interesting that a Government publication said:

“Value to the taxpayer should lie at the heart of our procurement decisions.”

Does my hon. Friend believe that there was value for the taxpayer in that particular process?

[Jon Trickett]

My hon. Friend is absolutely right to ask that question. No convincing answer has been provided as to whether value for money was achieved. In fact, it is as plain as the nose on your face that there was no value for money, and I will come to that in a second.

In recent decades, there has been a presumption in favour of outsourcing. That was never the case before. Britain used to be proud of its public service and of the high standards of ethics in the civil service and in politics. It is hard to share that pride these days. The presumption in favour of outsourcing contracts and obtaining services from the private sector has gone through the leadership of all the political parties, and it is time it stopped.

There are seven separate reasons why one should be cautious about that presumption. I hasten to say, though, that there will always be a case for some procurement from the private sector—for instance, police motorbikes will not be nationalised in the immediate future, so one can see that there is a case there—but the presumption should end. Let me briefly refer to the seven issues that it is important to consider.

First, the Government Procurement Service is not as professional as it needs to be. It is possible to get a university degree these days in good procurement practice. That is a necessity to ensure value for money for every penny spent, but the service is under-resourced and not as professional as it needs to be. That is not to criticise the civil servants who do a difficult job in difficult circumstances, but they are in danger of being flooded by the provision of contracts.

I worked in the private sector, as a plumber in the building industry. We were monitored by the main developers to make sure that we provided value for money. Quite often, I confess, we would see whether we could get extras built in on top of the money in the original contract. It was for the quantity surveyors who worked for the developers and builders to make sure that we did not get away with anything. Can we honestly say that every single line in every contract is monitored in the same way as in the private sector? I do not think we can. The reason is because staff are under-resourced, and we are under-resourced because we are outsourcing as an ideological decision rather than anything else.

Here is my second point. More often than not, there is no public comparator. When I was the leader of Leeds City Council, I would ensure that if something was going out to the private sector, there would be a public sector bid made by the council, which would not have a slice on top for profitability. I would then see whether the private sector could compete with the public sector bid. That is one thing that might be done, but there are no public sector comparators under the present neoliberal economic settlement, which we regard with despair, to be honest. Therefore, there is no guarantee that a cartel or group of racketeers is not fixing prices between them to rip off the taxpayer. We cannot be clear about whether that is happening, although without a proper procurement service, I am sure that it is.

My third point is this. No evidence has been produced anywhere in the world that outsourcing is cheaper than insourcing. It has been looked at by the Public Accounts Committee and various bodies throughout the world. What is striking is that larger global companies are now insourcing. They were outsourcing, buying in accountancy and legal services and so on. That is stopping. Why are they insourcing? Because it is cheaper and more effective, and delivers better value for money. Yet here we are with a Government that seem hellbent on outsourcing, for ideological reasons rather than to protect the public purse.

My fourth point is that the private sector puts in prices, but the first thing it does when it wins the contract is to drive down the pay and conditions of the staff employed. Wherever one looks, that is the case. I have experience of that in my constituency. We had a service for cleaning a school a few years ago. The first thing the company did was to cut wages and try to get rid of some of the staff. The staff went on strike, which went on a long time, and the school was filthy. That contract was frankly a disgrace. We all know that that happens everywhere. We see wages falling as a share of GDP. What is the process behind that happening? There are a number of processes, but one is outsourcing, driving down wages in order to increase profits.

My fifth point is this. A service provided in the public sector is motivated by the single ethos of public service. It tries to provide a service to the public without a mind to delivering profits and dividends to shareholders. There are two contesting ethoses—if that is the correct plural—in play. One is serving and enhancing shareholder value as a private sector provider; the other is public service. Well, I know what I want for the staff who treat me, my family or my constituents. I want people who are motivated by one thing only: providing the highest possible quality service. That is what motivated people. The three women I just talked about, who were cleaners and went on strike, were treated in a really shabby way. Their greatest concern was the kids left in the school. The toilets were not being cleaned. They would talk to me regularly about their guilty consciences at being unable to provide the service. They were interested in only one thing: providing a service to those children.

[Kirsty Blackman]

On the point about wages, does the hon. Member share my concern that, although we have control of public sector wages, the Conservatives are not keen on negotiating fair pay settlements? That means that public sector wages are actually being reduced and done down, compared with where they should be.

[Jon Trickett]

I totally agree with the hon. Member. We are seeing a fragmentation of the labour market and the driving down of people’s incomes—particularly of manual workers and others—and I resent it, on behalf of those people. It is not right for the country; after all, if wages are in long-term decline, the economy itself will be in long-term decline as well.

My sixth and penultimate point is about pay and pay ratios. What happens in the public sector—although we would have to say, if we were living in a purely ethical economic environment, that certain public servants are probably paid more than they ought to be—is that pay ratios accelerate the minute a service is outsourced, to the point where we see people earning massive multiples of what the lowest paid in the same service receive. That is not congenial to providing a public-oriented service, which is what we would want to see. Pay ratios in the public sector are accountable through Parliament to the public in a way that they are not once they have been privatised. Indeed, once a service has been privatised—outsourced—it is no longer subject to all the constraints that the public sector has to operate under. Indeed, one further point to make is that if I want to understand why a public sector service in my constituency or the country is deteriorating, I can submit a freedom of information request or ask questions in Parliament. The minute that service has been privatised, we cannot do that, so it is not accountable.

My final point is about the impact on the local and national economy. If we do not control procurement in a proper way, we are unable to direct it to local providers of services in a way that we would expect to be able to do with taxpayers’ money. That has an impact, too, on the local economy.

For all those reasons, this is an important debate, and I am glad that it was raised by my hon. Friend the Member for Birkenhead. It is beyond the legislation that is before us. We need an ideological shift; we need a presumption in favour of the public sector, not the private sector, and I hope that I have contributed in a small way to making an argument for that.

09:58

[Jim Shannon (Strangford) (DUP)]

It is a real pleasure to serve under your chairmanship, Ms McVey. I thank the hon. Member for Birkenhead (Mick Whitley) for introducing the debate. I often come to support him in his debates in Westminster Hall, and I am here today to do the same, because he raises important issues and I want to add my support. It is also a pleasure to follow the contribution of the hon. Member for Hemsworth (Jon Trickett), which also was full of detailed evidence and content.

The hon. Member for Birkenhead referred to the Procurement Bill, which is currently going through Parliament. It applies to the devolved institutions, including Northern Ireland; however, we maintain our own legal framework for Northern Ireland, so that might give us a bit more input in the process as we go forward. It is no secret that I am a Brexiteer like yourself, Ms McVey, and I am proud to be a Brexiteer. I have always been positive about the opportunities provided to us by leaving the EU, notably our chance to secure British contracts with British companies to secure jobs for our people—for my constituents and the constituents of everybody here. It is great to be here to discuss how we can encourage that through the procurement process. I particularly look forward to the Minister’s response. I am fairly sure that we are on the same page. That being the case, I will ask my question only at the end of my contribution. I am keen to get the Minister’s response.

It is always important that we take the correct steps for our economy in terms of where we produce our products and where we procure them from. Some say that we have made mistakes in the past—it would be unfair to say that we have not, especially throughout the pandemic—but the principle behind the Bill gives us an opportunity to change that. A classic example from Northern Ireland, which I have referred to, goes back to March 2022, when leading UK bus manufacturer, Wrightbus, announced its second international zero-emission bus deal in a fortnight, under which it will ship dozens of clean buses to Europe. That is really good news.

Wrightbus has signed a deal with the German bus operator Regionalverkehr Köln GmbH, or RVK as it is better known—that is easier for me to say than to try and speak German—to supply up to up to 60 Kite Hydroliner single-decker buses over the next two years. All of those buses will be fully built at the Wrightbus factory in Ballymena, north Antrim, supporting green jobs and the wider Northern Ireland economy. While that is a welcome step, I can remember a time—of course, my lifetime is maybe a bit more than others—when London buses were ordered from Egypt, despite the UK containing the world-renowned manufacturer Wrightbus. I congratulate my hon. Friend the Member for North Antrim (Ian Paisley), and thank him for his energy and commitment in pursuing Wrightbus deals, not just in the United Kingdom but across the whole world. His pushing for that company as its MP has certainly paid dividends.

Thankfully, the procurement of London buses was brought home and the superior manufacturing that takes place in Ballymena is securing additional projects, but my point is that we need a legislative change to ensure that contracts within the UK are weighted, with procurement taking into account the impact on the local economy. While we have to remain competitive, every Government contract must consider our own manufacturers; we are indebted to them, and should be focusing on them, outsourcing only when there are exceptional reasons for doing so. That includes British companies that operate outside the United Kingdom.

In addition, I recall from a debate I spoke in some time ago that it had been highlighted by the House of Lords that the NHS sourced materials made by the forced labour of Christians, Tibetans, Uyghurs and Falun Gong practitioners in Xinjiang, China, and the Government took steps to deal with that. That has also become an issue in international procurement: making sure that the materials we rely on are not made or processed by those subject to human rights violations such as forced labour, child labour, unsafe working conditions or illegal wages. Those human rights violations have become increasingly apparent in the apparel sector—clothes, handbags, accessories and so on—where young children are being trafficked into child labour and forced to produce affordable clothes. Those clothes will attract millions of people internationally, but the price—the human rights price, the physical price, the emotional price—is just too high.

Our national procurement policy statement will ultimately ask public authorities to consider benefits for the public, such as the creation of new jobs, improving diversity, and ensuring integrity and value for money. I put great stress on integrity, and I think it is important that we focus on that as well. Many think that we must procure internationally to be successful and diverse; however, I suggest that there are numerous opportunities in our own back yard that we can take advantage of. We should be focusing on those and supporting them, not to the detriment of elsewhere in the world, but certainly to the advantage of our own manufacturers.

I have mentioned the importance of defence and cyber-security procurement for the United Kingdom. Contractors such as GKN Aerospace, or Thales in the constituency of my hon. Friend the Member for Belfast East (Gavin Robinson), have the capacity to build our own products to the highest standard, and should be made aware of more procurement opportunities.

[Peter Dowd]

One definition of contract monitoring is the process of tracking the performance and status of contracts, to ensure that the obligations within them are being fulfilled as intended; it is not just about the purchase of a contract, but the monitoring. Does the hon. Gentleman agree that in the current climate, given the massive cuts that local government has endured over the past 13 years, it is being denuded of its ability to monitor some of those contracts, and that that issue has to be addressed as well?

[Jim Shannon]

I thank the hon. Gentleman for his intervention, which was succinctly put. I am sure that the Minister is taking notes, and I hope that he will reply to his request.

It is right that we oversee and ensure that local government, wherever it may be, has the same opportunity and is not precluded by financial or other restrictions. In Northern Ireland, we are fortunate to have some of the best cyber-security companies in the whole of the United Kingdom. There are some in south-east England that perhaps might be able to match them, but we have been at the fore in cyber-security, and that includes the two companies that I referred to. Thales, for instance, is at the fore in supporting the NLAWs—next generation light anti-tank weapons—being provided to Ukraine. Again, our cyber-security is excellent. Does the Minister agree that Northern Ireland must be included in the Procurement Bill? Its inclusion will bring significant benefits for the country and Northern Ireland businesses, as well as our great Union, which we are here to protect and promote.

To conclude, many would say that it is time that the Bill is put into law so that we can repeal the current EU-based procurement regulations and make our own. It is time to do that. After the UK’s exit from the EU, we should have the scope to create new home-grown procedures, select suppliers and award contracts. That will also allow for the advancement of smaller businesses. My constituency has many small businesses; it has some large ones as well, but there are a larger number, percentage-wise, of smaller businesses. They are the backbone of my constituency of Strangford and of the economy. I look forward to learning about the opportunities for us to do all that we can to ensure that this great nation, the United Kingdom of Great Britain and Northern Ireland, progresses together in the way that it should.

10:06

[Kirsty Blackman (Aberdeen North) (SNP)]

Thank you for chairing this meeting so admirably this morning, Ms McVey. I congratulate the hon. Member for Birkenhead (Mick Whitley) on securing the debate. I also thank all those who have spoken for having such easy-to-pronounce constituency names. I very much appreciate that none of them is a mouthful; that has worked out very well for me this morning.

I want to talk about a number of things that we are concerned about in the Procurement Bill, and that we are concerned about more generally in how public procurement works. Public procurement is devolved in Scotland; we are able to set our own procurement rules and legislation. None the less, the Bill impacts Scotland. Also, while we are part of this place and while we are part of this United Kingdom, for however short a period of time that may be, we very much want to improve the situation and ensure the utmost levels of fairness and transparency in the public procurement regime, whether or not we continue to be involved in it.

[Hywel Williams]

Of course, Scotland can chart its own course on this matter. Does the hon. Lady share my surprise that the Welsh Government have consented to the UK Government’s legislating on their behalf?

[Kirsty Blackman]

I absolutely do. It is disappointing, especially given some of the excellent things that are happening in Wales, particularly around the work of the Future Generations Commissioner and how that is embedded in what the Welsh Government do. To hand that over to Westminster seems a real dereliction of duty, and I am concerned that that is the direction that has been chosen.

The biggest concern that we have about the Procurement Bill is its significant impact on Scotland in relation to devolution and the implementation of trade deals, including the Australia and New Zealand trade deals. We agree that trade deals are reserved. Obviously, we want to be independent, and we will be signing our own trade deals then, but while they are reserved, we agree that that is what the devolution settlement looks like. However, the implementation of trade deals in Scotland touches on devolved areas. We should be able to implement the procurement rules that come out of trade deals ourselves. The Procurement Bill will allow UK Ministers to implement, through secondary legislation, procurement practices in Scotland, as well as in the rest of the UK. That should be the responsibility of the Scottish Parliament and Scottish Ministers, and the UK Government should put that in the Bill rather than reserving that additional power.

[Peter Dowd]

Does the hon. Lady agree that the Bill is taking back control to Westminster, not to the places that actually need it?

[Kirsty Blackman]

I absolutely agree. It is a further power grab, just like the United Kingdom Internal Market Act 2020. We have an agreed settlement that was put to a referendum in the first place. We have the Scotland Act 1998, which gives the Scottish Parliament its powers. This is within those powers. It is our responsibility—a responsibility that our parliamentarians in Scotland were elected to carry out—and that the UK Government are trying to take that back means that people in Scotland are not getting what they voted for. They voted for politicians in order to direct this, but their politicians are unable to do so because the UK Parliament is trying to take back control.

Turning to the issues that have been raised today, I will touch first on the EU principles that have been written into the Procurement Bill, which concern transparency, equal treatment, non-discrimination and proportionality. We agree that we should remain as closely aligned with the EU as possible in this regard, and that keeping those principles is absolutely the right thing to do.

[Jon Trickett]

I wonder whether the hon. Lady agrees with those learned commentators who said that EU rules actually preclude the use of procurement to achieve social objectives, and that that was an argument for Brexit rather than for remaining in the European Union.

[Kirsty Blackman]

I think a number of other states have done procurement in a more flexible way even though they are in the European Union. It is not necessarily the case that the way the UK did procurement prior to Brexit is the only way to do procurement within the EU, as a number of states manage to do it very differently. We all have to work within the global procurement agreement. That is part of the World Trade Organisation, which sets rules that, similarly, the EU procurement rules abide by. I am not aware that anybody has suggested that we should step outside that global procurement framework; whether or not they support Brexit, people are still keen to remain part of that.

On transparency and the comments by the hon. Member for Hemsworth (Jon Trickett) about the kind of ideological shift that is required, I agree that this is ideology. We can do procurement in a number of different ways—we can focus on external companies in the private sector, or we can reframe that and focus on the public sector. We can think about the best way to do it. On the basis that they are trying their very best to defund it, I have concerns about the current UK Government’s willingness to use the public sector, which seems completely ideologically opposed to what they would be keen to achieve. However, I agree that we should go further in that direction, on the basis that we can better implement and embed fair working practices because we have much more control over the terms and conditions of people who are directly employed by local authorities or other public sector bodies and we can be more sure they are employed in a fair way.

The right hon. Member for Orkney and Shetland (Mr Carmichael) mentioned Hikvision, which is involved in the Chinese Government’s detention camps and what is happening with the Uyghur Muslims through its facial recognition technology. Some 61% of UK public authorities use Hikvision cameras. That is not a small number. In Scotland, we have committed to getting rid of Hikvision cameras and ending our work with Hikvision, and the US has blacklisted it. The UK Government still have not chosen to do that, so I would very much welcome a commitment from the Minister that they will look at Hikvision specifically and consider what actions they can take to ensure that they are not supporting a company that is committing human rights abuses. It seems to me that the Procurement Bill fails to take into account some of those abuses, despite pushes by the Lords to make that happen.

Again, climate change issues are not embedded in the Procurement Bill. It does not take into account the climate change targets in Scotland, for example. Every Government should be focused on the impact that every single thing that they do will have on the climate, and on future generations as a result of the climate change it will cause. The UK Government should be leading by example by having that thread running through everything thing they do, but they refuse to. There is no point in just talking about climate change; we need to make sure that we are focusing on it in every single thing that we do. The UK Government are failing to put actions in place; they are only using words.

I am aware that I am short on time, so let me briefly mention the Supplier Development Programme in Scotland, an amazing organisation that was set up to ensure that local companies are linked with public sector procurers. It works incredibly well, so I just wanted to plug it briefly. I thank the hon. Member for Birkenhead for bringing forward the debate, and I thank all those who have made contributions.

10:15

[Florence Eshalomi (Vauxhall) (Lab/Co-op)]

It is a pleasure to serve under your chairship, Ms McVey. I pay tribute to my hon. Friend the Member for Birkenhead (Mick Whitley), who not only managed to sit through Second Reading of the Procurement Bill, but clearly came out thinking he wanted more. Who can blame him? He spoke passionately about the importance of the wider social and economic considerations. He also highlighted the need for procurement to help promote British businesses and invest in places such as his constituency.

I also thank other Members, who have spoken with a lot of knowledge on this issue. On the face of it, it can seem quite dry and clunky, but it is important, as all Members have highlighted. My hon. Friend the Member for Hemsworth (Jon Trickett) mentioned that almost £300 billion is spent on procurement, yet the OECD has highlighted concerns about fraud or corruption in many areas. It is important that we look at which companies are getting contracts and ensure that enough procurement officers are reviewing them. How about we insource instead of outsource, and work with local councils to get those contracts? I am pleased that many local authorities, including mine in Lambeth, are looking at insourcing.

It is always a pleasure to see the hon. Member for Strangford (Jim Shannon) in these debates. He spoke with a lot of passion about some of the things happening in Northern Ireland. As a former London Assembly member and chair of its transport committee, I know that Wrightbus is doing fantastic work to produce buses that are going up and down London. Last year, the Mayor of London went to County Antrim to visit the Wrightbus depot and look at more buses coming on to London streets. That is why it is important to invest in local UK businesses that help the whole of the UK.

The hon. Member for Aberdeen North (Kirsty Blackman) highlighted the glaring omission that we are seeing from this Government. Climate change must be front and centre of everything that we do. Yesterday, my hon. Friend the Member for Hemsworth and I had the honour of meeting some fantastic young people who had come to see my hon. Friend the Member for Nottingham East (Nadia Whittome) about the Climate Education Bill. It is so important that we teach our young people, who are so passionate about the climate emergency, yet we are seeing an omission here.

[Hywel Williams]

The hon. Lady will recall that I mentioned the Social Partnership and Public Procurement (Wales) Bill, which is focused on achieving some socially responsible outcomes. Does she share my concern that the aims of that Bill might be in conflict with the Government’s current legislation, which is—as far as I can see—much more concerned with process?

[Florence Eshalomi]

I thank the hon. Gentleman for raising that important point. As my hon. Friend the Member for Bootle (Peter Dowd) highlighted, key issues were raised in the other place that now seem to have disappeared from the Bill. That is one of those many areas, and I will come on to it later.

We have heard that procurement makes up around a third of public spending. If it is done right, procurement can have such a transformative impact on our whole economy. My hon. Friend the Member for Birkenhead highlighted that social value should not just be an empty phrase. Social Enterprise UK found that between 2010 and 2020, the UK may have missed out on £700 billion-worth of economic, social and environmental opportunities. We are missing out on so much. That is a staggering amount of money. It is crucial that we address some of the problems in the Procurement Bill as it passes through the House.

As I mentioned on Second Reading, Labour supports the introduction of the Bill and recognises the genuine steps forward that it takes. That is why we want to work constructively with the Government to produce a Bill that is fit not just for today, but for the next Government and the Government after that. The Minister has heard my concerns about the Bill a number of times—we have sat through urgent questions and Second Reading—and we will be spending the new few weeks in Committee, which I am sure he is looking forward to, but I want to raise some of the problems that we see with it. I hope that he will think carefully before tomorrow’s deadline for tabling amendments and look at how he can make genuine improvements to the Bill. I am sure that he has had the chance to look at the amendment paper and that none of our concerns are novel to him, so I hope that he will be able to provide full and frank answers to the House on the issues that I raise.

First, I have deep concerns about the workings of the excluded, excludable and debarment systems in the Bill. My hon. Friend the Member for Hemsworth highlighted the practice of companies winning contracts and then doing down staff wages. The right hon. Member for Orkney and Shetland (Mr Carmichael) highlighted the CCTV cameras that councils are sourcing from Hikvision and the fact that we should be worried about some of the companies we are seeking contracts for. Labour is clear that we do not want to see those who act improperly, who abuse their workers or who are a threat to this country being awarded public contracts.

We therefore welcome the purpose of the powers in the Bill, but we can see loopholes in the system, which must be closed while the Bill is before the House. It is concerning that references to excludable contracts seem to give the contracting authorities discretion about whether to disregard a tender. Can the Minister please explain why excludable suppliers are not automatically disregarded in the same way as excluded suppliers?

While I understand that there may be some need for flexibility on discretion grounds, there is no mechanism in the Bill to decide where that flexibility should stand. That is extremely troubling given that grounds as serious as national security can be discretionary—that is outrageous. Can the Minister assure us that companies that are considered national threats will be excluded from contracts under the Bill? Will he ensure that contracting authorities will never be able to bypass this judgment and not disregard such suppliers during the process?

A similar problem exists with the debarment list. In his letter to Baroness Neville-Rolfe on 4 August, the Minister in the other place, Lord True, wrote that

“the debarment list is intended to focus on the most serious cases of supplier misconduct, where suppliers may pose a significant risk to contracting authorities or the public. It is not the case that every supplier which meets a ground for exclusion will be considered for inclusion on the debarment list. Rather, there will be a prioritisation policy which governs how cases are selected for investigation. It is likely that only a small number of cases will be considered each year.”

However, the Bill outlines no such qualification for ascension to the debarment list. As it is currently drafted, the only firm qualifications beyond the Minister’s wishes are mandatory and discretionary grounds for exclusion. Given the merry-go-round of Ministers we have seen over the past year, does the Minister not believe that it is right to put a mechanism in the Bill to provide clarity about the scope of the debarment list?

Will the Minister confirm that the Government’s intention for the debarment list is as Lord True laid out in his letter to Baroness Neville-Rolfe? If only the most serious cases of misconduct go on the debarment list, how can it be fair that those put on the list for discretionary reasons are still treated as excludable suppliers? If the Minister believes that a supplier poses a significant risk to the public, that supplier must be disregarded automatically from the process as an excluded supplier.

I have a further concern about the 30-day payment period down the supply chain. On Second Reading, the Paymaster General said that

“we will be paying the prime contractor within the 30-day period. People in the supply chain will be aware of the contract under which they are supplying to the prime, and we expect that 30-day payment to trickle all the way down”.—[Official Report, 9 January 2023; Vol. 725, c. 347.]

Many small and medium-sized enterprises in all our constituencies rely on prompt payment to keep afloat; they cannot rely on expectations of a trickle-down effect. The Minister may say that it will call into doubt the contract of the prime supplier, but how long will this take?

[Jon Trickett]

My hon. Friend is making a strong speech, although I wish her good luck if she is trying to persuade this ideologically driven Government to change their course. She may recall that three Prime Ministers ago—not so long ago in weeks or months, but some time ago in politics—the then Prime Minister advocated Brexit on two grounds: state aid to industry and procurement. Does my hon. Friend think the Government’s procurement policies are doing anything to level up the country socially, economically or otherwise?

[Florence Eshalomi]

I thank my hon. Friend for highlighting that. I think again of the example of Scotland, where procurement issues are being decided at the whim of Ministers. If anything, that is not levelling up; it is levelling down. We need a Procurement Bill that highlights and recognises small and medium-sized businesses, which often do fantastic work, ensure that their staff have good terms and conditions, and recognise trade unions. They should be given a fair chance at bidding for Government contracts paid for by public money, as my hon. Friend highlighted earlier.

Given how long colleagues on both sides of the House have to wait for responses from the Government, what steps will the Minister take to ensure that instances of late payment reported to the Government are dealt with promptly? In many cases, that could be the difference for an SME that stops it going under and having to hand redundancy notices to its staff. Does the Minister agree that putting strong enforcement down the supply chain in the Bill is the best way to guarantee that no supplier goes without the vital funds that it needs?

The Minister has heard many concerns this morning and I hope he will respond to all our pressing questions. Of course, I will be picking up many of these issues again in Committee.

10:27

[The Parliamentary Secretary, Cabinet Office (Alex Burghart)]

It is a pleasure to serve under your chairwomanship for the first time, Ms McVey.

I congratulate the hon. Member for Birkenhead (Mick Whitley) on securing the debate. As the Opposition spokesperson, the hon. Member for Vauxhall (Florence Eshalomi), has already said, it is nice to have the opportunity to debate the issues with the hon. Gentleman again. I am looking forward to the next three weeks in Committee, discussing the Procurement Bill with colleagues from all parties, and to the Report stage that will follow. It is right that we debate these issues thoroughly. The Bill is a landmark piece of legislation that the Government believe will bring real benefits to public authorities, public services and ultimately to the taxpayer. These are things to celebrate.

The hon. Member for Birkenhead’s constituents voted, like mine, to leave the European Union in 2016, and the Bill is one of the landmark pieces of legislation that enables us to take advantage of freedoms that we simply did not have when we were in the EU. The response to the public consultation on the Bill showed the strength of feeling among public authorities and suppliers for change. I am pleased to say that we have developed a sophisticated piece of legislation that is rising up to meet the asks of us made by those who responded to the consultation.

We have about £300 billion of public procurement in this country. That represents a huge amount of taxpayers’ money—public money—that we think can be spent better for people at all levels. We see a chance to reduce paperwork, streamline processes, improve opportunities for SMEs, which I know is close to the hon. Member for Birkenhead’s heart and is close to mine because it is the backbone of the economy in my part of the world, and to introduce new ways of viewing procurement.

As Members will have heard me say on Second Reading, it is a shift from MEAT to MAT—from the most economically advantageous tender to the most advantageous tender. That gives public authorities a freer hand to make an assessment about whether procurement decisions will create jobs in their area, benefit the environment or create any other forms of social good that are not purely economically measured. We think this is a major step forward, and I hope he agrees.

I am afraid I cannot speak in detail about the ferry contract in the hon. Gentleman’s area, but the work we are doing on the Procurement Bill is intended to make it easier for procuring authorities to make decisions that are not based purely on money. It will enable them to look at local need and things such as jobs.

Shipbuilding is covered by our World Trade Organisation commitments, so we would struggle to confine shipbuilding contracts to British-only suppliers unless we left the WTO. That would, of course, deprive British companies of the opportunity to take advantage of the procurement agreements within that framework, which are worth about £1.2 trillion. I cannot comment on the exact specifics of the hon. Gentleman’s case in Merseyside, but there are limits to what we can do within the WTO.

[Mick Whitley]

I think it was three Prime Ministers ago when the Prime Minister came to Birkenhead and announced the 50-year plan for shipping. The Ministry of Defence awarded a contract to build fleet supply boats, and colleagues from Northern Ireland and Devon won it, but as soon as they did that there was a debate in the House about what kind of company Navantia was. It was registered in the UK earlier this year and its two directors come from Spain, and the majority of the work on the fleet supply boats will get done in Cadiz. That is public money; that is what we are talking about. We are talking about levelling up the left-behind towns, but that has been totally ignored.

[Alex Burghart]

If the hon. Gentleman is talking about fleet solid support ships, they are built to a British design. There is a huge amount of construction in Belfast and Appledore—the final assembly is completed in Belfast—bringing shipbuilding back to Northern Ireland. This is an enormous opportunity for levelling up and bringing jobs into exactly the sort of shipyards around the country that I am sure the hon. Gentleman wants to see benefit, so I do not quite recognise all the allegations he has made.

[Peter Dowd]

Will the Minister give way?

[Alex Burghart]

I am happy to give way to my old adversary from Bootle.

[Peter Dowd]

One of the issues that I am trying to tease out is that even when we were in the European Union—I know this, the Minister knows this, and so does everybody in this Chamber—those countries had an imaginative approach to public procurement, and we did not. Even under those rules, we had a less imaginative approach. Even under the provisions that the Government are bringing forward, they cannot move away from the anal retention and enable us to take a much more imaginative approach to procurement. What in the Bill is more imaginative and will enable us to do what we want and we were promised when we were coming out of Europe?

[Alex Burghart]

I blush to quote the hon. Gentleman back at him, but there is a lot less of the form of retention that he describes in this Bill than he would have found in the existing European rules. As he heard me say to the hon. Member for Birkenhead, the system is moving from MEAT to MAT. This is a broader understanding of what public authorities can choose to do when they procure goods and services, and that is a really good thing.

The hon. Members for Bootle (Peter Dowd) and for Birkenhead talked about buying British. This Bill will help, but we start from a strong position: between 2016 and 2019, 98% of contracts given out by public authorities in the UK went to British firms. In the Bill, we are making it easier for small and medium-sized enterprises, the majority of which are likely to be in the vicinity of public body procuring, to access contracts from public authorities. We are making it much more likely that there will be more jobs and more opportunities for growing businesses. That is very exciting and one of the most appealing things about the Bill. My noble Friend Baroness Neville-Rolfe wrote a good piece for The Times showing how we are removing barriers to engagement for SMEs in a meaningful way. She has vast experience in business and was able to shine a light on that.

Let me turn to the hon. Member for Hemsworth (Jon Trickett), who talked about insourcing and outsourcing, and the need for an ideological shift. I hope he will not mind me reminding the House that he entered the Commons in 1996 and supported one of the great outsourcing Governments—that of Tony Blair and Gordon Brown. It is so interesting to see the hon. Gentleman’s ideological shift since that time.

I gently remind the hon. Gentleman that public authorities absolutely have the freedom to insource if they think that is the best thing to do. The important thing is that they have the choice, and I hope he would not want to deprive local authorities and local councils of that choice. Maybe he would.

[Florence Eshalomi]

On that particular point, does the Minister recognise the issue highlighted by my hon. Friend the Member for Hemsworth (Jon Trickett), which is that a number of our local councils and public bodies have seen their funding cut over the past 13 years? The procurement teams that would be looking at bringing contracts back in house have shrunk, and a number of councils face difficult decisions—do they fund social workers or fund procurement officers? It is not as simple as saying councils have the freedom to insource.

[Alex Burghart]

I hesitate to remind the hon. Lady why funding for local authorities was reduced, but it had something to do with the behaviour of the Labour Government up to 2010. We all remember the letter that Labour’s Chief Secretary to the Treasury, the right hon. Member for Birmingham, Hodge Hill (Liam Byrne), left for his Lib Dem successor.

The fact of the matter is that we have highly capable local authorities across the country that manage public contracts very well and which have worked with us in the construction of the Bill to ensure they have a legal framework that helps them make the decisions they want. I have no desire at all to talk them down. I have seen their capabilities up close, and I know that they are looking forward to taking advantage of the powers they will get from the Bill.

I would also very, very gently say this to the hon. Member for Hemsworth. I know that this is political knockabout, but the statements he made about PPE procurement could have been taken to insinuate that Ministers made the awarding decisions. That is absolutely not the case. Those decisions—

[Jon Trickett]

Says you.

[Alex Burghart]

The hon. Gentleman heckles me with a smile on his face, but the fact is that those decisions were made by highly capable and competent civil servants whose decisions have been upheld in court. It is wrong to suggest that they were in any way corrupt when they were trying to serve the country at a time of utter crisis in order to get, as every Member of the House wanted, as much PPE as possible when the NHS needed it most. I have listened on a number of occasions to Opposition Members speaking in such a way that suggests that Ministers handed out the contracts. That is not the case, and it would be much better for the public discourse if Opposition Members did not suggest to members of the public that that had been so.

Let me move on to the remarks made by the hon. Member for Strangford (Jim Shannon). It has been a pleasure to be able to work on the Bill with people in Northern Ireland, and the Bill is stronger as a result. We look forward to businesses of all sizes in England and Northern Ireland, and in Wales, benefiting from the new procurement legislation.

The hon. Member for Arfon (Hywel Williams) chastised the Welsh Government for allowing Westminster to legislate for them. Me and my officials have had the most productive working with the Welsh Government and these mischaracterisations imply that this is Westminster telling Wales what to do. This has been a partnership between Westminster and Cardiff and between Westminster and Belfast. It is a wonderful example of nations working together.

[Hywel Williams]

The Minister will know better than I that the Welsh Government are yet to recommend that the Senedd grants consent to the Procurement Bill due to two outstanding issues. The first is the presence of concurrent, rather than concurrent-plus powers. Concurrent- plus powers mean that both legislatures give their consent. The second is the lack of commencement powers for Welsh Ministers. Will the Minister give me an update on any progress on those two points?

[Alex Burghart]

The hon. Gentleman will get a final answer in Committee, but I can tell him that we have had nothing but productive and courteous conversations with our counterparts. I believe that we are going to end up in a mutually beneficial place, which is great news for people in Wales, England and Northern Ireland. The hon. Gentleman can join us in Committee if he wishes to hear the final read out on that. I look forward to seeing him there.

The hon. Member for Strangford is right: Northern Ireland must be included in these important opportunities. We are sad that our colleagues in Scotland have, unlike counterparts in Wales and Northern Ireland, not chosen to be part of the Procurement Bill. They are entitled to make that decision, but it is a shame. It adds a layer of complexity within the British Isles that need not be there, but c’est la vie.

The hon. Member for Aberdeen North (Kirsty Blackman) asked about trade deals and implementation. Trade deals are a reserved area. It is important that they are able to be implemented because otherwise we might find that the UK was in breach of an international agreement and that would be wrong. Yesterday, we made an amendment following discussions with the Scottish Government to narrow powers in this area and we will continue to work closely with them on implementation and, likewise, I look forward to discussing it with her in Committee; I do believe it will be her in Committee.

[Kirsty Blackman]

It will indeed.

[Alex Burghart]

Hooray.

[Kirsty Blackman]

I thank the Minister. I have not seen that amendment, so I will have a good look at it. I appreciate that he has taken some action.

[Alex Burghart]

Super. I look forward to debating that further in the weeks ahead.

The Opposition spokesperson, the hon. Member for Vauxhall, rightly highlighted that debarment is a crucial area of the Bill. In the past few days, we have tabled new amendments on debarment, which strengthen the regime. I am not going to go into all the details now because there is ample opportunity in the days ahead, but she is right to draw attention to it. On subcontractors and 30-day payments, there are implied payment terms within the Bill. Even if it is not a subcontract, the SME can demand this and raise it. Again, we could go into further details, but we have thought through the point she raised.

In conclusion, this is a great opportunity. We have come a long way from the starting point that we found ourselves in when we were in the EU. We are starting to make British procurement rules that will benefit British taxpayers, British employees, British public authorities and British suppliers. That is a good thing for all of us.

[Esther McVey (in the Chair)]

I call Mick Whitley to wind up.

10:44

[Mick Whitley]

Thank you, Ms McVey. I thank Members for their thoughtful and varied contributions. I let the Minister know that I will soon be joining colleagues to scrutinise the Procurement Bill in Committee. Today’s discussions have given me much to reflect on.

I am particularly grateful to the shadow Minister, my hon. Friend the Member for Vauxhall (Florence Eshalomi), for the passion and clarity with which she spoke today. I have already paid tribute to Labour peers and friends in the House for their hard work in fighting to amend the Bill for the better. It is welcome to hear the shadow Minister restate our party’s commitment to ensure that public money is put back into the pockets of working people and communities, such as Birkenhead, through our five-point national procurement plan.

I thank the Minister for attending and hope he recognises what has been said here today. In the short time available to us, my hon. Friends and I have attempted to highlight the real-world implications of the decisions being made in this place. I hope that the Government will seek to work constructively with colleagues from across the House in building a progressive procurement regime that helps to lay the foundations of a fairer, greener and more prosperous Britain.

Question put and agreed to.

Resolved,

That this House has considered reform of public procurement processes.

10:46

Sitting suspended.

Cryptocurrency Regulation

Wednesday 25th January 2023 Westminster Hall

09:30

[Esther McVey (in the Chair)]

I will call Dr Lisa Cameron to move the motion and then call the Minister to respond. As is the convention in 30-minute debates, there will not be an opportunity for the Member in charge to wind up,.

[Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)]

I beg to move,

That this House has considered regulation of cryptocurrency.

It is a pleasure to serve under your chairship today, Ms McVey. As Chair of the crypto and digital assets all-party parliamentary group, I am delighted to be able to raise this important sector of innovation. I thank the Minister for taking the time to respond today.

This is not the first time that cryptoassets have been debated in the House of Commons. Over the last 12 months, there has rightly been increased interest in the growth of the sector from the media and from colleagues in all parties across this House and the House of Lords. I am pleased by the increased interest, particularly in the work that we have been doing to bring ourselves up to speed with the sector. We have found that millions of people in the United Kingdom already own some form of cryptocurrency, yet there has not been as much discussion about it as was needed, particularly in terms of regulation.

Regulators around the world are now racing to develop their own frameworks for crypto. Recently, the European Union developed its markets in cryptoassets regulation—MiCA—and I look forward to hearing more about that with the all-party parliamentary group in the months to come. Whether people voted for Brexit and agree with it or not, it is where we are, and the UK has an opportunity to create its own bespoke regulatory framework for cryptocurrency.

Recent events, such as the collapse of the crypto exchange FTX, have focused minds and highlighted the importance of ensuring that consumer protection is at the heart of everything that we do. My own journey into this space started when a constituent said to me, “Who do I contact in Parliament? I have been following a scam online linked with cryptocurrency.” When I looked into what was happening at that point, there was no all-party parliamentary group on the subject and I was not sure where to direct my constituent, so, leading on from constituents’ concerns, we set one up. It is vital, given what has happened this year, that regulation and a framework are taken forward at pace.

The UK already has a rich legacy and strong track record as a leader in financial services and fintech, so there is huge potential here for economic growth, jobs and skills from the sector. As the mum of a 14-year-old who is choosing her subjects at school, I have been looking at reports on jobs for the future. She thought that, given our family’s history in medicine and pharmacy and so on, I would encourage her to become a doctor, but I said, “Coding is the way ahead for you.” She was shocked by that. Young people are already doing a lot of this in school—it comes very naturally to younger generations.

I have researched the subject and think that the jobs of the future will be placed firmly in science, technology, engineering and maths activity, and in the finance sector, too. In future, digital, health and tech will be across all sectors, and I am enthused by that. It would be good if the Minister and Cabinet colleagues identified the centres of excellence at college and university levels so that young people know where to go, and where the gaps are. That would ensure that we level up opportunities right across the United Kingdom for people who want to have a future in development and innovation in the sector.

We already have some fantastic examples of innovative companies in the UK, not just in London but in Scotland and elsewhere, creating jobs and development opportunities. In terms of international practice, I had the privilege to speak with Alex Bornyakov, Ukraine’s Deputy Minister of Digital Transformation, who told me that cryptocurrency had been essential to Ukraine’s ability to respond to the Russian invasion. It is right that we place consumer protection, regulation and robust regulatory frameworks at the heart of everything that we do, but we should also look to the sector’s potential to solve some of the issues that countries will face and some of the difficulties across the world just now.

It has been almost a year since the Government set out their landmark vision to make the UK a global hub for crypto investment. The Minister will be aware that I have been very supportive of the Government’s vision, and I am keen to work constructively with him to ensure that it becomes a reality. The Government’s announcement is welcome for business, because good actors want regulation. I was not sure about that when I started looking into the sector with the all-party parliamentary group. From media and things I had read, I thought it was very much a wild west, where people did not want structure or regulatory frameworks; but there are many good actors who do want those things, and investors need regulatory frameworks to take forward their work in the sector with confidence. Business certainty supports a fair and transparent market. There must never be a race to the bottom in the UK, and I urge the Government to take forward the regulatory framework at pace, because we need to protect consumers first and foremost in all that we do. Regulatory clarity and business certainty are at the core of that work.

Over the past year members of the all-party parliamentary group have very much been educating ourselves, and I include myself in that. One has to do a lot of reading about the sector to understand acronyms and so on. We spent a lot of time even understanding that, when people spoke about fiat, they were speaking not about a type of car but about money. We have upskilled ourselves, which is a great first step. When I spoke with Members of the Swiss Parliament, they said that they had been on a similar journey; upskilling across their chambers meant that they could engage much more effectively on “what works” legislation.

Over the past year, industry has raised with me a number of barriers, which I will set out to help the Minister and support the work he is taking forward. First, significant delays are still being reported by business operators seeking registration with the Financial Conduct Authority. Will the Minister update us on progress in that area, and on the number of firms that have been granted licences in the UK since the creation of the licensing regime for crypto firms?

We have also heard real frustration about lack of communication. Some companies are not certain about what is required of them; they are being left for months on end with no response to tell them whether anything further is needed, whether their application is in process, or whether they need to take additional steps. I have met with the FCA on a few occasions and learned of their CryptoSprint event last year, which brought together industry and regulators to look at a number of areas, including how to protect consumers and markets while supporting innovation. I felt that that was a real step in the right direction, but could more be done to take this work forward?

Will the Minister update the House on the average FCA processing times for crypto registrations? I fully understand if he is unable to do so today, but it would be helpful if he wrote to me with that information. The FCA reassured me that it was employing more people to work in its department dealing with this specific sector, given the public interest in and engagement with cryptocurrency. It needs that expertise and wants to move forward at a greater pace.

It would also be helpful to know what more the FCA has planned to foster sustained and meaningful engagement with the sector. I have spoken to businesses that have such a bond with the UK—businesses that have been here and that want to set up here, and whose representatives have been to university here and feel that the UK is the place to be. Regrettably, because of the delays and lack of engagement, some have gone to Paris, while others have gone to Zug in Switzerland and elsewhere. That is a great shame if they are good actors and want to support the United Kingdom economy.

The all-party parliamentary group is undertaking an inquiry. We have heard about opportunities for the sector from businesses and regulators, and from those in overseas territories. I have noticed the importance of engagement between Government, regulators and the sector to ensure that the policy developed is practical and fit for purpose. Members of Parliament in Switzerland told us about the value of thinking about the different pillars of the sector—not just finance but research, university development and innovation hubs—and about bringing them all together with companies, regulators and Government to ensure that there are opportunities and a robust framework.

When we talk about the future of cryptocurrency regulation and what it might look like, it is imperative that everybody works together in the same direction to get it right. That has to be the case for consumer protection, which is the reason I became interested in this area in the first place and is at the core of everything that we are trying to do. At times, there has appeared to be a disconnect between the Government’s vision and some of the statements made by the banking industry and so on. How is the Minister pulling that together so that everyone is moving ahead in tandem? Yes, concerns are being raised and addressed as we go, but we need to ensure that people are moving in the same direction, rather than pulling in different directions away from the vision of the UK cryptocurrency hub set out so meaningfully by the Prime Minister.

We need a proportionate approach to regulation that balances risk and ensures high levels of consumer protection, but does not unnecessarily restrict growth or innovation for our future. That should be built on a strong evidence base to ensure that sound decisions are made. I recently heard from a number of economic crime experts at Elliptic, Chainalysis and the Royal United Services Institute; they indicated to our inquiry that crypto-related crime still accounts for quite a small percentage of overall crypto transactions, and that economic crime remains a challenge for financial services as a whole. Cryptocurrency is a part of that, but the focus is not just on that sector.

I have written to the FCA and the Bank of England to get further information. In recent statements, the incoming chair of the FCA has said that crypto platforms are “deliberately evasive”, facilitate money laundering on a large scale and create “massively untoward risk”. The Governor of the Bank of England said that cryptocurrencies are the new frontline in criminal scams and have created an

“opportunity for the downright criminal”.

Of course, these issues must be addressed, but that has to be balanced with the evidence to ensure proportionality. That is why it is even more important that Government regulators and industry come together to move things forward in a way that is meaningful and that everyone can agree on.

Another potential barrier is the recent announcements by leading banks to limit or block cryptocurrency transactions. I have written to them to tease out a little more information. Nationwide, Starling Bank, Santander and Virgin Money are among a number of banks that have announced limits and restrictions on transactions. Starling Bank has claimed that crypto exchanges are

“high risk, and heavily used for criminal purposes”,

which is a real concern. Other banks, such as Revolut and Monzo, are said to be open to crypto and largely positive towards cryptocurrency transactions. Again, the divergence of views within the sector should be grounded in evidence and be addressed in a way that protects consumers and puts them at the heart of what we do.

On the timeline for the Government’s plans, I have been speaking with many members of other Parliaments and businesses that operate internationally, because this is an international issue and hopefully there will be guidance internationally that we can come together on. If we want to harness the UK’s position at the forefront of this industry, we need to move at pace while ensuring that the work we do is robust.

I reassure the Minister that the all-party parliamentary group will continue to advocate for the UK cryptocurrency hub set out in the vision, and work in conjunction with his office. We will be extremely pleased if he updates the House on timescales for the year ahead and how he sees this playing out, so that we can continue to work constructively to support everything he is doing to protect consumers, while harnessing the innovation of cryptocurrency for the future in the United Kingdom.

11:12

[The Economic Secretary to the Treasury (Andrew Griffith)]

It is a pleasure to serve under your chairmanship, Ms McVey. I congratulate the hon. Member for East Kilbride, Strathaven and Lesmahagow (Dr Cameron) on securing this debate on crypto regulation, which follows the first debate on cryptoassets, led by her fellow party member the hon. Member for West Dunbartonshire (Martin Docherty-Hughes) in September last year. The hon. Lady is absolutely right that this is an important sector for innovation, and I commend her and the crypto and digital assets all-party parliamentary group for their work to upskill Members of this House in this important emerging area.

My goal is simple: we want the UK to be the home of an open, well regulated and technologically advanced sector. As the hon. Lady said, recent events have highlighted some vulnerabilities in the cryptoassets sector, but it is a big sector. We have seen how FTX’s collapse has impacted some consumers, but as with any emerging technology—and this technology is at an emerging stage for all its myriad potential uses—there will be risk. We understand the importance of risk in the system and that, regrettably, that brings failures as much as success and opportunity. That is part of the process of change itself.

The hon. Lady talked about how cryptocurrencies could be an area of Brexit opportunity, and because we have taken back control of our rulebook, this House—importantly—has the opportunity as well as the obligation to bring forward regulations. In that context, she talked about being the mum of a 14-year-old, all the potential jobs and the advice that she would give. Clearly, this is a world that has captured the imagination of young people. Anything we can do to get our young people to equip themselves with more STEM skills is very positive.

The hon. Lady also talked about the positive benefits in a sector in which, owing to its nature as a nascent and emerging sector, people are not always clear about its use cases. She made a powerful point about the use case in Ukraine and allowing that financial system to continue to work. Government policy is that we will introduce timely, sensible and balanced regulation to allow the safe use of the technology and allow participants in the sector to understand with certainty the environment in which they operate.

On the potential economy, the hon. Lady might be familiar with the work done by PricewaterhouseCoopers that estimates that blockchain technology, which underlies what is often referred to as crypto, could boost the UK economy by £57 billion by 2030. That is a sizeable opportunity and we are keen for the UK to seize its fair share. She talked about other jurisdictions that have introduced regulation, and it is right that we learn from them and use the opportunity to perfect our own regulation, but obviously we must ensure that we capture—if that is the right word—a fair share of the opportunities.

The fintech sector is a great success story for both the City of London and the wider UK economy, and last year the UK attracted more fintech investment than the next 13 European countries combined, so we have a real lead. Natural extensions of that sector are crypto firms and cryptoassets—people working with blockchain. It is important, therefore, that the regulations we introduce facilitate that.

The hon. Lady rightly raised the role of our regulators and their speed and agility. I will write to her, but will share now the figures that I have. I understand from the Financial Conduct Authority that 41 such firms are registered in the UK. Obviously, the FCA has its own regulations around that—the hurdles that firms have to clear—and I am interested in general, as we seek to have an agile and proportionate financial regulatory system, in our regulators moving at the right pace.

There are measures in the Financial Services and Markets Bill more generally to encourage the regulators—indeed, to compel them—to be more transparent about their key operating statistics, such as those in respect of speed. I think the hon. Lady talked about the number of authorisations and the average processing time for authorisations, which I hear about widely across the financial services sector and know is a focus for the FCA. It is important that it is: we cannot have a financial system that is competitive internationally if it has a slow latency and if it does not operate at speed. I share the hon. Lady’s concern, and if there are any additional measures I can obtain, I will of course write to her.

The hon. Lady talked about the importance of engagement between Ministers and the sector. I want to assure her that during my relatively short time in this role I have held a desire for broad and deep engagement. This is a really big sector. She might be interested to know that rather than having a standing council, as it were—Governments sometimes set up a group of 12 anointed figures and all the engagement is there—I want to be much more agile and to engage with a much broader range of people. My undertaking is to have six roundtables with the sector, but with a variety of sector participants, during calendar year 2023. That will build on the three roundtables that I have already held with the sector in the first few months since my appointment. That is a real commitment; this area rewards a lot of time being spent on it.

I assure the hon. Lady, members of the all-party group and industry bodies that I want to take an evidence-based and proportionate approach to regulation. That is something to which we all aspire. It is not helpful in any domain for people to make sweeping statements without offering facts and proof.

I hope I have addressed most of the hon. Lady’s points. There is one final point on which I wish to offer clarity: where we go from here. I do not have the precise date, but I assure the hon. Lady that the Government will very soon come forward with our consultation paper on the regulatory approach to cryptoassets. That will be a matter of weeks, not months, but I do not have the precise date. I urge people to get ready to respond to that paper. We will engage on the back of it, because it is of course just the next step in the process. The purpose of the consultation is that we have proportionate regulation, that we do it right and that it is practitioner led.

Of course, the flipside is that consultative processes sometimes makes things take a little longer than one might wish in a fast-moving domain. In order to get the balance right, I urge those with views to be ready to advocate them. They should be assured that they have a Minister and a Government who are keen to see the sector grow and to harness the benefits for the United Kingdom and the hon. Lady’s constituents. I would be delighted to return to update this place frequently on the progress of this exciting new sector.

Question put and agreed to.

11:22

Sitting suspended.

Steel Industry: Contribution to the UK Economy

Wednesday 25th January 2023 Westminster Hall

[Mark Pritchard in the Chair]

10:24

[Jessica Morden (Newport East) (Lab)]

I beg to move,

That this House has considered the contribution of the steel industry to the UK economy.

It is a pleasure to serve under your chairmanship, Mr Pritchard, and to lead today’s debate. My hon. Friend the Member for Aberavon (Stephen Kinnock), a Welsh Labour colleague, secured the debate and was due to lead it, but he has been waylaid by his Front-Bench duties on the Economic Crime and Corporate Transparency Bill. He is an excellent chair of the all-party parliamentary group for steel and metal related industries. He represents the UK’s biggest steelworks—in Port Talbot—and I know that he will take a keen interest in today’s debate and wishes that he was here. Before I begin, I declare an interest: I am a member of the Community and GMB trade unions, both of which represent steelworkers in my constituency so ably, as does Unite. I refer Members to my declaration in the Register of Members’ Financial Interests.

I am incredibly proud to represent a steel constituency; for well over a century, the industry has been at the heart of the communities that I serve, and of constituencies represented by Members present. It is good to see interest from Members on both sides of the House. The contribution of the steel industry to the UK economy is the title of the debate, but the immense contribution of this vital strategic industry is, in a sense, undebatable. Our steel sector employs 34,500 people directly in the UK and supports a further 43,000 in supply chains. Steel salaries are 45% higher than the UK national average and 59% higher than the regional median in Wales, Yorkshire and Humberside. It goes without saying, then, that the steel industry should be at the heart of any levelling-up agenda worth the paper it is written on.

The workforce is a winning combination of highly skilled, experienced workers who have honed their expertise over decades of dedicated work, and a healthy influx of younger steelworkers eager to work in an industry that is at the cutting edge of innovation. Even in the face of the considerable challenges that the industry faces, which I will talk about today, steel still has enormous pulling power for young workers who are looking to build up skills that will last them a lifetime. That is clear to see at Tata’s Llanwern steelworks in my constituency, where the average age of the workforce has fallen from 53 to 32 in recent years. There is a new generation of workers who, like so many before them, are hugely proud to be steelworkers. We must look after them.

Directly and through supply chains, the steel sector adds £5.5 billion to UK GDP and makes a £2.4 billion direct contribution to the UK’s balance of trade. It underpins our entire manufacturing base, and steel is an essential material for the construction, energy, aerospace, defence, engineering and packaging sectors. Some 96% of Network Rail’s steel is sourced from British Steel in Scunthorpe; 250,000 tonnes of steel from Celsa in Cardiff will support the building of Hinkley C nuclear power station; and Liberty Steel produces critical parts for aircraft engines and wind turbine gears. Nearly all 1p, 2p, 5p and 10p coins originate from steel made at Tata in Port Talbot, and Tata Llanwern produces world-class automotive steel for the likes of Jaguar Land Rover and BMW.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

My hon. Friend is making an excellent speech. She rightly mentions the Celsa plant in my constituency and the critical role that steel plays in so many of our industries and in manufacturing. Does she share my frustration that we seem to have been going round the houses for the last 10 years, particularly on the critical issue of competitive energy pricing? We have seen something like 12 steel Ministers during that time. That is not to disparage the current Minister, whom I like immensely on a personal level, but we need consistency and action on the critical issue of energy prices.

[Jessica Morden]

I thank my hon. Friend, who is a champion for steel in his constituency, where Celsa is based. I wholeheartedly agree that we have been going on about energy prices for so long—it is a theme that I will come to later in my speech—and I thank him for his contribution.

[Mark Tami (Alyn and Deeside) (Lab)]

First, I apologise for being a minute late. My hon. Friend’s last point is crucial. All these pots of money that are available are obviously welcome, but for Shotton and the whole steel industry, we need a long-term plan with long-term investment. There is a lot of talk about companies investing, but they will invest only if they can see a future, and if all we are doing all the time is just buying a bit of time here and there, until steel drops out of the news again, that is not a plan. We really need a long-term plan.

[Jessica Morden]

I thank my right hon. Friend for that intervention. Yet again, I agree wholeheartedly with him. He is a fantastic advocate for Shotton, and he is exactly right: we need a long-term plan for steel.

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

I am grateful to the hon. Lady for giving way; she is being very generous with her time. She made the very important point a few moments ago that steel is at the heart of many of our growth industries. Does she agree that a growth industry for the future is green energy, and that whether we are talking about floating offshore wind or other forms of marine renewables, steel will be at the heart of them? To that end, does she welcome the agreement struck between RWE and Tata to explore the use of Welsh steel in the nascent floating offshore wind industry? Does she also agree that we need Government to be part of the discussion of how we support the growth of new green industries and ensure that British-made steel is at the heart of them?

[Jessica Morden]

I thank the right hon. Member for that intervention. I wholeheartedly agree; I am agreeing with all the interventions! He anticipates my next point, because I was about to say that steel will be integral part of the UK’s journey to reach net zero. Without a thriving steel industry, there can be no transition to a low-carbon economy that supports a range of industries, from automotive to nuclear and renewables, which he mentioned.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

I am very grateful to the hon. Lady for giving way; she is being very kind in taking interventions. There have been suggestions that a closed-loop cycle could be created in south Wales, whereby floating offshore wind is used not only for electricity but to make green hydrogen for heavy industry in the area, including, of course, steel production. Contracts for difference could be used to support such a relationship. Will she join me in asking the Minister to clarify how the contracts for difference scheme could be adjusted, so that it supports renewable energy hubs that use multiple technologies, and to assess how such projects could be linked? The important words there are “multiple technologies”.

[Jessica Morden]

I thank the right hon. Member for that very important intervention. She gave an example, as did the right hon. Member for Preseli Pembrokeshire (Stephen Crabb), of how we can use our steel in these projects, and I hope that the Minister will refer directly to that point when she responds to the debate.

These interventions prove that we simply cannot decarbonise the economy without decarbonising steel. As Tata has highlighted, almost every aspect of the UK’s decarbonisation plan is steel-intensive, with 10 million tonnes of steel being required over the coming years for offshore wind, solar, nuclear, hydrogen, and carbon capture and utilisation storage projects. The “Britain, we need our steel” campaign was launched by the Community trade union and union partners in 2020. It is not just a slogan; it is a statement of fact.

Today’s debate comes in the context of the recent worrying news from Liberty Steel, which has announced that it will idle its steel plants in my constituency and at the Tredegar site in the constituency of my hon. Friend the Member for Blaenau Gwent (Nick Smith). The primary production plant in the constituency of my hon. Friend the Member for Rotherham (Sarah Champion), who is also an excellent advocate for steel in her area, and the Performance Steel supplier in the constituency of the hon. Member for West Bromwich East (Nicola Richards), are among the other sites affected.

In a written response to me last week, the Secretary of State for Wales mentioned that he had spoken to Cabinet colleagues about the situation at Liberty and what it means for the workforce, and said that the Government stood ready to provide support. Any updates on that written response that the Minister can provide would of course be welcome to us and, more importantly, all those working at the plants, who are worried about the future. We must not underestimate the uncertainty that they will feel following the news about Liberty.

Of course Liberty has its specific issues, and the Community union is seeking answers from the company about how the latest announcement squares with previous commitments to invest in the business and ramp up production in Newport, Tredegar and elsewhere. It is clear, however, that there is a wider context, and that Liberty’s announcement again demonstrates the precarious outlook for the steel industry more widely. Indeed, the company specifically cited energy costs as a factor in the decision that it made this month.

The same is true for British Steel in Scunthorpe, which is paying nearly £1 million a day for electricity, the cost of electricity having risen tenfold since 2021. There is still real uncertainty about the situation of British Steel, and I am sure that the hon. Member for Scunthorpe (Holly Mumby-Croft), who is here, will speak about that shortly. I hope that the Minister can provide updates. It is imperative that talks between the company and the Government continue, and reach a successful outcome that ensures that steelmaking at Scunthorpe continues and decarbonises.

As Community has highlighted, the cost of Government inaction, in terms of job losses, employment support, and the loss of a vital strategic foundation site, is incalculable. The sky-high energy costs facing the steel sector are by no means a new issue, as my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) said. It is one that I and other Members representing steelmaking constituencies have raised with 12 different steel Ministers since 2010, including six in the last three years alone. It is difficult to establish a long-term relationship when our steel Ministers change so often. I also like the Minister personally, but I make that point.

Over recent years, Opposition Members will have lost track of the number of times we have had to highlight the energy cost disparity, which remains a blight on the competitiveness of UK steel producers compared with their continental counterparts, particularly those in France and Germany. Indeed, UK Steel research shows that British steel producers paid twice as much for electricity last year as German counterparts, hitting competitiveness.

The UK Government’s response to this over the years can be described as piecemeal at best. The energy bills discount scheme announced by the Treasury earlier this month confirmed that there would be at least a continuation of energy price support for businesses until April 2024, removing fears of a March cliff edge—an uncertainty that the Government allowed to fester through the tail end of last year.

However, it is important to note that the support for energy-intensive industries outlined by the Exchequer Secretary to the Treasury falls far short of that provided by competitor countries. That is the point. For example, the German Government have guaranteed their steel industry an electricity price of €130 per MWh for 2023. In contrast, the Treasury’s announcement on non-domestic energy support earlier this month provides our steel industry with a discount only to electricity prices higher than £185 per MWh. That means that UK steelmakers will stump up an estimated 63% more than their German counterparts for electricity.

UK Steel has rightly been critical of what the UK Treasury has on offer, saying that its

“reforms significantly narrow the help that Government will provide”,

and that Ministers are

“betting on a calm and stable 2023 energy market, in a climate of unstable global markets, with the scheme no longer protecting against extremely volatile prices.”

For a decade, British steelmakers have continually been asked to compete with one hand tied behind their back. That is why Labour’s £1 billion contingency fund to help energy-intensive industries, such as steel, deal with energy costs is crucial. It goes far further than this Government’s proposals and is vital.

The £800 million toward energy costs that the Minister mentioned in previous meetings is not all for the steel sector. In any case, it is not a new package of support. It relates to a package introduced under the coalition Government between 2013 and 2015, which was pushed largely by the Liberal Democrat-operated Department for Business, Innovation and Skills. In any case, the support referenced is significant less than the £1 billion contingency fund that Labour has suggested.

We need a Government who will support the industry in a move towards decarbonisation. We have read the reports of the £600 million that the Government have pledged, or are reported to have pledged, to Tata and British Steel this week to help with lower-emissions technology. I trust that we will get more details on this from the Minister later. I hope the negotiations continue and progress with urgency, and that any plan to decarbonise will be fully consulted on and agreed with the unions to ensure a just transition for the workforce. However, it is important to note that the support arrived significantly later than the support for other European countries did, and is significant lower. For example, the German Government have already spent €8.5 billion towards greening their domestic steel industry, and the French Government have spent €2.2 billion. British Steel Scunthorpe’s multi-union chair, Paul McBean, put it well in his recent interview with The Yorkshire Post, saying:

“We are the only country being told to go green and (with) no help.”

I look forward to the Minister’s response on that point about the adequacy of what is on offer.

It is clear that the steel sector is committed to the transition to net zero, but needs a long-term policy framework to make that a reality without penalising steelmakers with gargantuan carbon prices in the interim years. As things stand, rising carbon costs are eating into any available capital that steel companies may have to invest in decarbonisation. That is completely counterproductive, and we need the Minister to act on it. That is a key point.

The Government have spoken about a roughly £1.5 billion package of support schemes for the industry. However, it is important to note that those schemes are spread across many industries, so £1.5 billion does not translate into very much direct capital support for the steel sector. In particular, the £1 billion carbon capture, utilisation and storage infrastructure fund is not money provided to steel companies to support CCUS on site, but investment in pipelines and storage that may at some point be used by steel companies—it is far from a certainty. For example, Welsh steel plants will not be using that infrastructure even if they opt for carbon capture, as it is all for the North sea. Let us not forget the £250 million clean steel fund promised by the Government led by the right hon. Member for Maidenhead (Mrs May), which disappeared without trace.

Labour’s proposed £3 billion green steel fund represents a potential way forward—not a sticking-plaster emergency bail-out, but a plan to work with industry, investing alongside it over the next 10 years. If this Government will not take action, we will.

I also urge the Minister to look at proposals for a carbon border adjustment mechanism. The costs of the UK’s emissions trading system have spiralled over the past two years. Compliance costs for the sector reached £120 million last year, which is equivalent to 60% of the average annual capital investment of the sector, and are set to get much worse. A carbon border adjustment mechanism would create a level playing field by applying carbon prices at the border equivalent to those faced by domestic producers, ensuring that imported steel does not have a price advantage. The Community union has highlighted that such a mechanism would also support the decarbonisation of steel production, as it would allow steelmakers to produce low-emission steel without being out-competed by high-emission, lower-cost imported steel.

[Stephen Doughty]

I thank my hon. Friend for her generosity in giving way again. I should also put on record my membership of the GMB, and past interests involving the GMB and Community.

On the subject of that transition to green steel, my hon. Friend will know that the Celsa plant uses an electric arc furnace—it is producing green steel from scrap. Does she agree that if we are switching to scrap-made steel, we need to ensure not only that there are adequate supplies of scrap in the UK, but that we do not suddenly all start producing the same product? Celsa predominantly produces rebar; we also need the flats, the sections, and all the other products that the UK currently provides so excellently.

[Jessica Morden]

My hon. Friend makes an excellent point—I cannot top it, really. I hope the Minister has heard it.

Procurement policies also need to be updated. For every 1,000 tonnes of steel produced in the UK, 4.2 direct jobs are created, with a further 6.6 jobs created in the supply chain. It is understandable, then, that Make UK found that 68% of the UK public think that public infrastructure projects should prioritise the use of UK-made steel wherever possible, yet the Government have a pretty poor track record in this area. The most recent example was last month’s announcement that a £1.6 billion contract for steel for three fleet solid support vehicles was awarded to a Spanish consortium. That is just one case, but there have been too many missed opportunities for the steel industry. We cannot let that carry on.

As I mentioned earlier, green infrastructure projects will need literally millions of tonnes of steel by the end of the decade. The UK Government’s own steel public procurement pipeline data, released last June, states that offshore wind projects alone will require some 5.3 million tonnes of steel within five years. We need the Government to commit now to maximising the procurement of British steel for all those upcoming projects, a move that Make UK estimates could boost the UK economy by as much as £4 billion and support 11,000 British jobs in steel companies and their supply chains. As the Community union’s general secretary Roy Rickhuss has rightly said,

“The green energy revolution presents a huge opportunity to build a robust British supply chain based on the supply of top-quality domestic steel.”

The events of the past two years tell us that Britain cannot rely on fragile global supply networks for strategic goods, and that if we want to go green, it is nonsensical to transport steel from the other side of the world.

On that point, I welcome that the Government themselves have acknowledged that, in the area of energy supply, the country has

“drifted into dependence on foreign sources”.

We agree, and I echo Roy Rickhuss by calling on Ministers to not make the same mistake when it comes to steel, a sector of such vital strategic importance to our sovereign capability and our national security. Alun Davies, a stalwart of Community in south Wales, puts it succinctly:

“There is a clear choice facing this Government—either they back our workforce and our industries or they choose to offshore thousands of good jobs to other countries.”

[Mark Tami]

The industry really is at a cliff edge. I have said that in meetings. That is not crying wolf; this is not a made-up situation. It really is at the 11th hour. Unless we really step up to the mark and invest, will we lose not only the industry but the confidence of the supply chain and the customers, who will start questioning whether some of these plants will be around this time next year. Something has to change now.

[Jessica Morden]

My right hon. Friend is exactly right: the steel industry is at a particularly precarious point and the purpose of this debate is to highlight to the Minister the need to act quickly.

On procurement, it is high time that the UK Government started setting more ambitious targets for the use of UK steel in public projects and for all initiatives and schemes supported by public funds. Ultimately, they must devise policies to deliver those projects and grow the economy. Other countries have shown that they are not afraid to support their manufacturing sectors in the green transition. For example, in the USA, the Biden Administration’s Inflation Reduction Act uses the tax system to reward American manufacturers that invest in and use American manufacturing supply chains.

If this Government will not take action, the next Labour Government will. I am pleased that my party is committed to asking every public body to give more contracts to British firms, big and small. We will use stretching social, environmental and labour clauses in contract design to raise standards, and we will spend and make more in Britain. We are committing to making, buying and selling more in Britain. We will lead a culture change in Government, putting the growth of local industries and economies first and reviewing the pipeline for all major infrastructure projects to explore how to increase the materials made in Britain. We will also upskill workers to get the jobs for the future. That is the kind of vision that industries such as steel and our country need.

It is worth flagging up the continued risk of melted and poured Russian steel entering the UK via third countries. Although the UK has banned finished-steel imports from Russia and placed a 35% tariff on semi-finished steel from Russia, loopholes in the sanctions means that Russian steel that is re-rolled in the EU or Turkey and exported into the UK is reclassified as EU or Turkish-origin material, circumventing the ban and the tariff. That means UK consumers, including public projects, are unwittingly importing and using Russian steel. It is wrong as a point of principle and it has damaging consequences for the UK market. I echo UK Steel’s call for the Government to tackle that by applying sanctions on all steel that is melted and poured in Russia, regardless of whether it has been re-rolled in a third country.

At the Dispatch Box earlier in the month, the Prime Minister told the hon. Member for Scunthorpe that the Government

“remain committed to a thriving UK steel industry.”—[Official Report, 11 January 2023; Vol. 725, c. 557.]

Steel workers and steel communities throughout the country will understandably have taken that with a heavy pinch of salt. For our steel industry, the past decade has been characterised by neglect and a lack of vision for the future. The loss of skilled jobs at the SSI plant in Redcar and the Orb works in my constituency of Newport East were tragic cases in point. Orb was the last steel plant in the UK producing electrical steel, and it needed investment of about £50 million to be saved. The Government did not listen and did not let it be saved, and the opportunity was lost. That is heartbreaking. The next decade must be different, not just for our steel industry but for our energy security and a greener economy, both of which are utterly dependent on a healthy steel sector.

We need answers today. I hope the Minister will update us on her engagement with Tata, British Steel, Liberty Steel and Celsa Steel. I hope she will acknowledge that the current level of support for UK steelmakers in respect of energy costs and decarbonisation is not enough, and I hope the Government will commit to doing much more. The era of warm words has bitten the dust and the time for meaningful strategic action has come. Just like levelling up, the industrial strategy part of the Department for Business, Energy and Industrial Strategy’s title should not just be a handy buzz phrase; it should be a central, defining mission of the Government.

Instead of sticking plasters, we need a long-term plan. If the Conservative party is not up to the challenge, Labour stands ready to fill the gap and ensure that the steel industry has the bright future it needs and deserves.

[Several hon. Members rose—]

[Mark Pritchard (in the Chair)]

I will not set a firm time limit at the moment, but we have quite a few speakers. Speeches of around five minutes would fit perfectly to allow all the Front Benchers to have their full 10 minutes.

14:54

[Holly Mumby-Croft (Scunthorpe) (Con)]

It is a pleasure to serve under your chairmanship, Mr Pritchard. I thank the hon. Member for Newport East (Jessica Morden) for securing the debate. I know from our work together on the APPG for steel and metal related industries that we agree on many things and have the interests of the steel industry jointly at heart. I also thank my hon. Friend the Minister for the level of focus that the steel industry is receiving at the moment. I am heartened by that and want to put my thanks on the record.

Steel is something that I never tire of mentioning in Parliament. My home town of Scunthorpe has one of the biggest steelworks in the country. I care about the local jobs because I understand the impact that it would have on our local community and on individuals and families were those jobs to be lost, but we can never say enough times the impact that it would also have on us as a nation and our position in the world were we ever to lose our ability to make our own steel.

Not only does the steelworks provide thousands of jobs that pay roughly 45% more than the average job in Yorkshire and Humberside, but its impact ripples throughout our entire local economy, supporting an ecosystem of businesses that sustain countless livelihoods. I have been told that it supports 20,000 jobs in our area, and I believe that to be the case. People who work in the steelworks in Scunthorpe are people I went to school with. They are people whose children went to school with my daughter. They are my neighbours. They are members of my family—my granddad made his living and raised his family through his work at the steelworks. It is a source of great pride to him and to many people in Scunthorpe and the surrounding area that the work our town has put in has helped to build this country.

We heard figures from the hon. Member for Newport East on the value of the output of steelmakers here in Britain, but it is almost impossible to truly quantify the impact that steel has throughout the wider economy and every sector and, just as importantly, the loss we would face were we not able to produce our own steel.

[Jack Brereton (Stoke-on-Trent South) (Con)]

I congratulate the hon. Member for Newport East (Jessica Morden) on securing this debate, which is very important for not just steel but ceramics. Refractory ceramics are vital for the steelmaking industry, and particularly energy-intensive industries such as steel and ceramics need additional support to transition and invest in energy efficiency measures. Does my hon. Friend agree that we need additional support from the Government that is easier to access so that these industries can invest in energy efficiency measures?

[Holly Mumby-Croft]

My hon. Friend is absolutely right. He and I have worked together on many of the issues that affect energy-intensive industries. Ceramics play a crucial role in the steel industry, lining the blast furnaces that we use to make steel and, of course, we like to have a cup of tea in a ceramic mug as well.

I cannot say enough times how important it is that we never, ever become the only country in the G20 that is not able to make its own steel. That would leave us at the mercy of steel producers around the world, who would be in full knowledge that we were not able to make our own steel, with the prices and challenges that would come with that. I hope the Minister agrees that steel truly is a vital strategic industry. Nobody can go a single day in their lives, from the moment they get up to the moment they go to bed, without needing to use steel.

A dependable supply of high-quality steel—that is a crucial point: in this country we make some of the finest steel money can buy anywhere in the world—will underpin our every endeavour as we tackle the problems of the 21st century and the issues that we grapple with in this place. It is vital for everything from growth to defence, and Russia’s invasion of Ukraine has served only to highlight the challenges and the importance of that. I truly believe that the public have a fantastic understanding of how important this is and instinctively know it is crucial that we are always able to make our own steel.

I have seen the support in recent years, including the £800 million of energy support and the two occasions when the Government took the brave step of extending the steel safeguards. That was a challenging time for us, so I congratulate the Government on doing that, because it was really important. Had we not done that, I am not sure we would be here now having this conversation—it was absolutely right. In Scunthorpe, we remember how the Government paid workers’ wages in 2019 and into early 2020 when the buy-out happened.

We have all seen the press reports about British Steel and Tata negotiating with the Government. I know that is a live negotiation and we cannot talk about it, but I will do everything I can, as I know other Members will, to help and assist all parties involved to reach a good outcome and secure the future of steelmaking in Scunthorpe. My own view is that, should a deal be reached, we must look at this as a pivotal moment. We must get a deal done and then the next day wake up and start straight away with the steps we need to take to allow steel to thrive into the future. We must immediately start discussions at pace about carbon border adjustments, so that we do not find ourselves falling behind the EU. We must look at the emissions trading scheme and the perverse incentive that it is possible to create whereby we can see loss-making production—carbon-producing production—incentivised by a scheme initially designed to prevent excess carbon production. We must also address all the issues relating to energy costs.

I urge the Government to go as far and as fast as they can on those issues, and to do everything they can to give the industry confidence that ours really is the Government that will put in place the measures that will secure the future of the steel industry. I believe they are, and I urge the Government to give the steel industry that confidence.

15:01

[Sarah Champion (Rotherham) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Pritchard—for the first time, I think. It is a pleasure to speak in this debate secured by my hon. Friend the Member for Newport East (Jessica Morden), who outlined the broader picture so well. I speak today as a member of Unite.

As others have said, the UK steel industry makes a vast contribution to our economy. It employs 34,500 people directly in the UK and supports a further 43,000 in supply chains. The industry makes a £2.4 billion direct contribution to UK GDP, and the supply chains it supports add another £3.1 billion each year. It offers skilled, well-paid employment, with a median salary that is almost 60% higher than the average in Yorkshire. But it is an industry that continues to be chronically undervalued by the Government, its needs neglected and its concerns ignored. That has consequences.

One hundred and eighty five of my constituents were recently told that their jobs would likely go as part of 440 redundancies across Liberty Steel’s UK businesses. Just before Christmas, in a speech I have made countless times, I warned that unless the Government acted on the underlying issues that face the industry, steel production in the UK would wither. For years, steel MPs from all parties have called on successive Business Ministers to listen to the industry, value its contribution to the economy and help to create an environment in which it can thrive. Our pleas have fallen on deaf ears, and our constituents are losing their jobs as a consequence.

Rotherham is a steel town. The industry is at the core of our identity and local economy. The job losses will affect not only the 185 workers and their families but businesses up and down Liberty’s supply chain and throughout our local economy. Many businesses move to Rotherham specifically because of our steel industry, including those on the advanced manufacturing park. The job losses will have a catastrophic impact on our town and communities.

Liberty has cited soaring energy costs as a major factor behind its decision, and the fact that its announcement came only days after the Government announced the scaling back of support for businesses struggling with high energy costs should surprise no one. If the Government are serious about delivering economic growth, they cannot stand idly by while industries that should be at the heart of our growth are pushed to the brink.

Our energy markets have placed British steelmakers at a profound disadvantage for decades. British steel manufacturers have been left struggling to compete due to the Government’s failure to act to address energy costs that for years have been vastly greater than those of our European competitors.

In its 2021 report, “Liberty Steel and the Future of the UK Steel Industry”, the BEIS Committee argued that:

“If additional support is not forthcoming, high electricity prices will continue to have a pernicious effect on the UK steel industry, resulting in long-term decline and future crises.”

Well, here we are. The Minister, as a member of that Committee at the time, will no doubt recall that the report went on to recommend:

“At a minimum, the price disparity should be brought down to within £1/MWh of the total cost faced by key competitors in France and Germany”.

I could not agree with the Minister more. But since that report, the only thing that has changed is her job title.

The Government have taken no meaningful action to address the crippling pressure on the industry. It is not only the cost of energy that continues to burden British steel producers: the industry has been prevented from investing in its future due to punitive business rates that penalise capital investment. Yet again, nothing has been done to reform a system that continually hamstrings our domestic steel industry.

Most damningly, public procurement procedures continue to fail to prioritise steel from British manufacturers. What was the point of Brexit if not to better support our own industries? That simple step, entirely within the Government’s control, could go a long way to stabilising the industry and laying the groundwork for future growth.

I believe that at the heart of the Government’s failure on steel has been a fundamental misunderstanding of our industry. It is not some relic of an industrial past but a dynamic, world-leading industry, vital to both Britain’s economic future and its security, that has been ignored, to the Government’s eternal shame.

The Government must now engage proactively with Liberty and the trade unions to work to limit job losses, and they must ensure that a comprehensive support package is in place for the affected workers. If the Government fail to act—and act with urgency—the redundancies announced in my constituency will sadly not be the last.

15:06

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

When I came to this debate I was not planning to make a contribution—I was planning just to make an intervention about green industries and the role that British Steel can play in them—but having listened to some of the contributions I would like to make two broad points, one looking backwards and one looking forwards.

My backward looking point is in response to the remarks made by the hon. Member for Newport East (Jessica Morden). She made a very good speech and I agreed with a lot of the important points she made, but I want to challenge the Opposition narrative that over the last 12 years the UK Government have pursued a deliberate policy of neglect of the steel industry.

I had the privilege of serving as a Minister in 2012, and it was not just Liberal Democrats fighting for steel at that time: many Conservative Ministers were fighting for the steel industry. I was in the Wales Office, putting together working groups and roundtables of energy-intensive industries, meeting officials at BEIS’s predecessor Department and looking at the energy costs of intensive energy users. There was a big focus on the needs of steel, particularly from us in the Wales Office because steel is so important to the Welsh economy and to our identity. Some of the contributions made by Members from other parts of the UK testify to that point in relation to their own communities.

There was a focus on steel in the early years of the coalition Government, and I believe that has continued until the present day. I do not remember a time when Ministers were sitting on their hands when it came to discussions about steel. I remember, during my short stint at the Department for Work and Pensions, being lobbied by Tata to sort out its pension problems and offload its obligations to British Steel pension holders.

It is almost like we have bounced from crisis to crisis in terms of discussing steel, but at no point did I honestly detect that the Government were asleep at the wheel. There have been a succession of different BEIS Ministers, Chancellors and Prime Ministers, but steel has always been a subject that has been able to attract attention from the top of Government, including from the Prime Minister’s office.

The hon. Member for Newport East made an important point, which I kind of agree with, about overall industrial policy. Going back even further to when Labour was in Government, we have not been good enough as a nation at protecting domestic supply chains and local content, and that point extends to the steel industry.

[Jessica Morden]

There may have been discussions about steel but there was very little by way of action. Will the right hon. Member acknowledge the huge disparity between what we pay for our energy and the way that other European countries help? There has been no action to address that.

[Stephen Crabb]

I accept that point. I remember bringing representatives of Celsa Steel from the constituency of the hon. Member for Cardiff South and Penarth (Stephen Doughty) to meet various Ministers at different points during that period of government. Celsa was incredibly open about opening its books and showing costs to Ministers. The point that Celsa made, when we put in place the support scheme for energy-intensive users, was about the disparity with competitor countries. That is a valid point that the Government should address. We are in an intensely competitive steel-production environment.

I come back to my point. Some Opposition Members hope to be in Government in a couple of years’ time as Ministers. They will have a string of companies knocking on their doors continuously asking for support and help. The trade-offs they will need to make, with regard to responsibility to taxpayers and the public finances, will be difficult. Difficult decisions need to be made. In the case of steel, at times the global challenges have felt so big that the amount of support being sought was almost unlimited. Ministers need to make difficult decisions, but I accept the point made by the hon. Member for Newport East that we need to look at the disparity with international competitors.

[Holly Mumby-Croft]

My right hon. Friend is making an interesting speech. He reflected on previous Governments’ approach to steel. He knows, as we all do, that under the last Labour Government steel jobs and steel production halved. The point he makes about fairness is an important one, and I thank him for making it.

[Stephen Crabb]

I thank my hon. Friend for that contribution. My other argument is about looking forward. I reiterate my remarks about the importance of new green technologies and green industries for the UK economy in the years and decades ahead. British steel has a crucial role to play in that, but that will not happen by accident; it will require deliberate choices on the part of Ministers. We will not capture the full economic value of these new industries by accident. To ensure that we maximise local domestic content and supply chains will require a plan and deliberate choices by Ministers. To that end, I want to talk about the bid by Port Talbot, one of the UK’s most important steelmaking communities.

There is a joint bid by Port Talbot and Milford Haven in my constituency for a freeport—a Celtic freeport that will be used as a platform to help launch a new industry of floating offshore wind. We hope that Welsh Steel will play a key part in the supply chain. I do not expect the Minister to comment on a live bidding process, but I wanted to put that on record. If the hon. Member for Aberavon (Stephen Kinnock) were here, I know he would make the same point. That is a very exciting freeport proposal, with real projects and economics behind it, and I hope the Government will look favourably on it.

15:13

[Jim Shannon]

It is a pleasure to speak in this debate. I commend the hon. Member for Newport East (Jessica Morden) for setting the scene so well. I do not have a steel factory in my constituency, or an industry that it is dependent on help from Government, but I do have a strong construction sector that depends on the British steel that comes from the factories in the areas others have spoken about, so it is important for me to put on the record why I support what the hon. Members for Newport East and for Scunthorpe (Holly Mumby-Croft) and others said in their introductions, and what others will say.

I remember the last Westminster Hall debate on steel. The hon. Member for Newport East spoke then as well, and I think the hon. Member for Aberavon (Stephen Kinnock) led the debate. We can see that he is in the main Chamber—his name is up there on the screen—and he cannot be in two places at one time, although I venture sometimes to try. The only reason he is not here is that he has obligations in the main Chamber; otherwise, he would be here.

I have listened with great interest to the contributions of Members today, and I agree with much of what has been said. I have long been outspoken about the need for us to bring manufacturing home to purpose-built, modern, green factories that give local people jobs and produce the renowned high-quality steel for which we are famed. I absolutely support what the hon. Member for Newport East and others have said.

You will know, Mr Pritchard, because your knowledge of the issue is every bit as good as mine, that a major issue for my constituents—many will be able to say it with me—is the Northern Ireland protocol. Why do I mention that now? Let me explain. Some of the Members here will be aware—I suspect that you are one of them, Mr Pritchard—that last August His Majesty’s Revenue and Customs informed steel producers of a 25% tariff on some GB steel imports into Northern Ireland. The steel sector is important to me, and it seems that we are being penalised more than anybody else. The tariff is directly related to the Northern Ireland protocol—it is one of the issues apparent between the UK Government and the EU, to which Northern Ireland has no representation—and the rule changes in relation to steel imports. Some of those steel imports reasons relate to Russia’s invasion of Ukraine; we understand that.

There are big factors that are impacting UK steel, and Northern Ireland in particular, as expert Sam Lowe has outlined. As has been reported:

“Essentially, steel from Great Britain had been able to enter Northern Ireland without a tariff because it was covered by a tariff rate quota (TRQ) for UK exports to the EU. A TRQ allows a certain amount of a product to enter a customs territory without a tariff being paid, but once a set limit is reached tariffs apply.”

So we in Northern Ireland are being penalised to the tune of 25% for our British steel—our own steel—in our own country. The report continues:

“However, when sanctions were applied to Russia EU businesses could no longer buy steel from there. So at that time the EU scrapped country-specific TRQs for the UK and others in favour of one TRQ for Ukraine and another TRQ covering all ‘other countries’.”

The Northern Ireland protocol means that Northern Ireland continues to follow EU customs rules, and therefore suffers disadvantage, pain and cost factors. It is hard to comprehend. The tariff-free limit for supplies from Great Britain to Northern Ireland is set to be reached quickly. The UK previously had access to its own country-specific quota, which it could rely on to accommodate steel moving from Great Britain to Northern Ireland, but now such movements will be covered by the “other countries” quota, which could fill up much more quickly, given that the entire world has access to it.

What does that mean in practice? It means a 25% tariff on British steel moving from Great Britain to Northern Ireland. It means that, while European manufacturers can supply the UK with no tariff, the same does not apply to businesses in my constituency of Strangford. We want to use British steel from Newport, Scunthorpe and elsewhere, as we have in the past. It means that the local steel supplier just two minutes from my office in Newtownards is wondering how, with a 25% tariff increase, he can continue to be involved with construction industry clients that are already teetering on the edge of bankruptcy because of increased prices. It means that my steel importers—my British steel importers—cannot supply the suppliers of other Members in this Chamber. It means that all right hon. and hon. Members should stand and join with me in actively opposing the Northern Ireland protocol, not as a Northern Ireland problem but as a UK problem that affects their local economies and mine. I support the steel industry wholeheartedly, and I ask that every Member in this Chamber recognises my position as the Member for Strangford and does the same for Northern Ireland against this insidious protocol.

[Mark Pritchard (in the Chair)]

Before I call the Front-Bench spokespeople, who will have 10 minutes each, I am afraid that I will have to set a time limit of four minutes for our final three speakers.

15:18

[Dame Nia Griffith (Llanelli) (Lab)]

The steel industry—or tin-plate industry, as we call it—is vital to my constituency of Llanelli, where we take the steel from Port Talbot and make it into a range of products that subsequently become tins for food or cans for aerosols. I congratulate my hon. Friend the Member for Newport East (Jessica Morden) on securing the debate, which comes at a crucial time for the steel industry.

In the interests of saving time, I will not repeat the excellent points that my hon. Friend made on the energy issue. Energy costs are not just an immediate challenge. Now is very much decision time for the future of the steel industry. The US Inflation Reduction Act and President Biden’s determination to tackle climate change have undoubtedly accelerated global interest in decarbonisation, which poses huge challenges for the steel industry. Our steelmaking capacity is ageing, and now is crunch time for steel manufacturers, which must decide where they will invest for the future—whether it will be the UK or elsewhere.

We know that blast furnaces cannot simply be replaced by electric arc furnaces. Yes, they have a role, and could clearly be run on electricity generated from renewable sources, but the real challenge is to decarbonise the blast furnace process of making steel from iron ore. That requires huge investment in research and innovation to develop the technologies of the future. The UK Government need to make the conditions right for companies to choose the UK. We need a clear vision from the UK Government, and determination to ensure that the UK gets ahead of the game and develops the technologies. We have to be prepared to take the risk in order to reap the gains. If the UK can lead the way, we will have not only a flourishing steel industry, but the opportunity to export our steel and our technologies.

We need a clear industrial strategy, from research and innovation through development to establishing production; as well as confidence that there will be a level playing field on issues such as energy costs and confidence, and a commitment to use UK-produced steel in public procurement. The only way we will attract companies to invest in the steel industry of the future is with a proper strategy. The alternative is the demise of our industry. If we are overtaken by countries producing cleaner, cheaper steel, we will be left behind. It is not just the steel industry that needs certainty; all the associated industries need to know whether to invest.

The horrors that have unfolded in Ukraine have reminded us just how important it is that we have our own steel industry—for our security of supply and to support a range of other industries, including defence. The situation has made us refocus on the importance of our own sovereign defence capability and the need to have the materials and the skilled workforce to be able to scale up production if necessary. There is strong cross-party support for sanctions against Putin’s Russia, but as my hon. Friend the Member for Newport East explained, there are loopholes. I understand that the Government may have plans to close the loopholes, but I would be grateful if the Minister confirmed this and indicated when we can expect it to happen.

We need a level playing field when it comes to UK steel having to compete against imports. When there are distortions in the marketplace, with steel arriving at our ports from countries that give massive state subsidies to the steel industry, taking action should be well within World Trade Organisation rules, and is essential to protect our steel industry against unfair competition—all the more so given that both the US and EU protect their steel industries in this way. Without such protection, we risk losing production and workers facing redundancy, and ultimately a lack of future investment in the industry.

Despite that, in both summer 2021 and summer 2022, the UK Government made very last-minute decisions about the extension of the existing steel safeguards. This does nothing to reassure the industry. If we want future investment in the UK steel industry, companies need to know that there is strong political will to protect the industry, and that they can rely on the UK Government to protect them from being undermined by artificially cheap imports. I understand that the Department for International Trade is looking to reform the way the Trade Remedies Authority works. We need a system that really works for the industry—that can respond speedily, carry out investigations and act to protect our industry. The UK Government would do well to look at some of UK Steel’s suggestions to achieve this.

First, we need clear Government policy on how we deal with countries such as China and Russia. Secondly, given that in March 2022 we needed additional legislation to give the Secretary of State call-in powers, consideration needs to be given to how those powers could be part of the system so that the Secretary of State can use them in an initial investigation. Thirdly, reform of the way in which the economic interest test works is needed—

[Mark Pritchard (in the Chair)]

Order. I call Tim Farron.

15:23

[Tim Farron (Westmorland and Lonsdale) (LD)]

It is an honour to serve under your chairmanship, Mr Pritchard. I congratulate the hon. Member for Newport East (Jessica Morden) and all those who have contributed in this important debate.

I will focus on the role of steel in making Britain a sustainable economy. Steel plays a massively significant role in our ability to extend the railways, to ensure we have the green technology to build zero-carbon homes, and to make best use of the natural resources in this country—wind and particularly hydro power, which I will talk about in a moment. But while it is vital to the greening of our economy, we cannot ignore the fact that steel produced with coal is a major contributor to climate change. The steel industry contributes 5% of the EU’s carbon emissions and 7% of global carbon emissions, equivalent to the entire aviation industry. To cut to the chase, the good news is that the amount of steel produced using coal is now down to 70% and that produced by renewable means, in particular using electric arc furnaces, is up to 30% and rising. Increasingly, customers for steel are demanding that it be produced in green and renewable ways: for example, Volvo is now committed to building 100% of its trucks in a fossil-free environment.

I make these remarks because of my engagement with a great controversy in my county of Cumbria, where the Government recently gave the green light to the first coalmine for 30 years, ostensibly to support the steel industry. It is clear that 83% of the coal produced by West Cumbria Mining will be exported and not support the UK steel industry. Both Tata and British Steel have been clear that they have no plans to make use of that coal. British Steel has been clear that it is the wrong sort of coal with the wrong sulphur content, so it will be next to no use whatever to the production of steel.

Numerous people, including the hon. Member for Newport East, have mentioned the Government’s recent comments about the green switch and supporting Tata with £600 million to help move towards electric furnaces. Perhaps we will hear more detail from the Minister. Tata says that it will cost £3 billion. We also know that Salzgitter in Germany, which produces about as much steel as the entire British steel industry produces in a year, will be completely fossil-free within 10 years, so my fear is that we are not being ambitious enough.

Steel is utterly vital. I think about my constituency, where we need a passing loop on the Lakes line to dual the capacity of the railway line that takes people to Britain’s second busiest and biggest visitor destination after London. We desperately need zero-carbon affordable homes, and we need steel for that, too. We need to make more use of wind, and although the British Isles have a higher tidal range than any other country on planet Earth apart from Canada, we are using next to none of it, and steel is vital to the wind turbine and the wave turbine. The barrage is another way in which we could make use of tidal and wave power.

Steel is vital to our green economy. As Britain decarbonises with new infrastructure based on steel, let us make sure that we also decarbonise the processes we use to make that steel.

15:26

[Christina Rees (Neath) (Ind)]

It is always a pleasure to serve under your chairmanship, Mr Pritchard. I am grateful to my hon. Friend the Member for Newport East (Jessica Morden) for so eloquently leading on this very important debate. I speak today as a member of the Unite and GMB trade unions.

Steel is a foundational sector across the UK, never more so than in Neath Port Talbot county borough. On such strong foundations, economies and supply chains are created. Port Talbot steelworks reaches all the surrounding communities. Thousands of Neath constituents have worked there, or know someone who works there or in its supply chain, as my father did. To say it has been a difficult few years for the steelworkers in Neath Port Talbot would be an understatement. Competing in the global market, the absence of anti-dumping tariffs, the lifting of lesser duty rates and rising UK energy prices have conspired to create uncertainty and fear.

Over 2,000 local jobs have been lost since 2014. Steel and the steel industry are vital to Wales and its economy. The idea that the steel sector does not have a future is unthinkable, but our steelworkers are as robust as the steel they make. They have so far bounced back from every adversity, but the situation is about to get much worse. Of the top 10 economies in the world, the UK’s is the only one with a declining steel industry. The UK Government should immediately sit down with Tata Steel and other businesses to do a deal on green steel for the sake of the future of our workforce.

The steel sector is a crucial aspect of the partnership between the public and private sectors. The UK Government should look to set indicative targets for the amount of domestically produced steel that we put into Government-funded projects. That would enable us to make, buy and sell more steel in this country. My hon. Friend the Member for Aberavon (Stephen Kinnock), who is chair of the all-party parliamentary group for steel and metal related industries, of which I am a vice chair, cannot be with us today because he has duties in the main Chamber, but he has spoken in Westminster Hall many times about the importance of the steel sector to the UK, to his constituency and to Wales.

Floating offshore wind has the potential to transform the economy and jobs market in my hon. Friend’s Aberavon constituency and across south Wales, but it will happen only if floating offshore wind substructures and other components are manufactured and assembled locally. The public know we need a Britain that can stand more firmly on its own two feet, and they recognise the need for foundational industries to thrive if Britain is to prosper. Indeed, in one recent poll, 80% of those surveyed declared steel to be a strategically important industry that we must maintain in the UK. That is why the Labour party’s green prosperity plan will marry the quest for sustainable growth and jobs on which people can raise a family with the need for resilience. Net zero should be seen not as a hindrance, but as an opportunity for growth and prosperity. Labour’s proposed green steel renewal fund will secure the future of the steel industry for my hon. Friend’s constituents and mine, who live in Neath and work at Tata Steel. By greening our steel processing, Labour will ensure that our steelmakers can compete in a world in which global steel demand is on the rise. Britain needs its steel as a foundation of the modern manufacturing renaissance that Labour will deliver.

Time is running out for the future of our steel industry. I know that the Minister, who is a very magnanimous person, is working around the clock to familiarise herself with her new brief. I am grateful that she has already met the members of the all-party group for steel and metal-related industries, and I hope that she will stay a while in her new role. I urge her, however, to impress on the Treasury the importance of investing in decarbonisation of the UK steel industry, and particularly Tata Steel in Port Talbot. Without serious UK Government investment now, I fear that Tata Steel in Port Talbot is on the cliff edge.

[Mark Pritchard (in the Chair)]

Thank you to all our speakers for being on time; that allows each Front-Bench spokesperson to have 10 minutes.

15:30

[Marion Fellows (Motherwell and Wishaw) (SNP)]

I am extremely grateful to have this opportunity to speak, Mr Pritchard, and I thank the hon. Member for Newport East (Jessica Morden) and all the other Members who have spoken.

I do not want to be too downbeat or to go back too far, but ever since I came into this place in 2015, we have been in a steel crisis. In my constituency, we have Dalzell works, which does not produce steel; there is no steel production as such in Scotland. However, we use the steel produced mainly in Scunthorpe and roll it to a very high standard. The Scottish Government managed to save that mill in 2016. However, in all the time that I have been here, I have talked to a succession of Ministers—I welcome the new Minister, and I apologise for not meeting her this morning—and nothing has fundamentally changed. We have had steel charters, which Ministers signed —we all signed the steel charter—and we have talked about how the UK must produce its own steel, or otherwise we would be in grave danger. We are the only member of the G7, the G20 or whoever that might not produce steel in the future. That is not the way forward in the 21st century.

I was very proud when the Scottish Government stepped in and managed the deal that saved Dalzell works. In a constituency such as mine, which has a proud tradition of steelmaking, that was really important, not just because it is an iconic industry, but for the future. A lot of the work that is done in Dalzell ends up on wind turbines. Scottish renewables, as far as the Scottish Government are concerned, are one of the ways forward for Scotland to thrive as an independent country.

We are in the very lucky position of having lots of wind power, although we have had attempts to block the renewables industry. We wanted a carbon capture and storage unit and to reduce the price of steel by reducing the price of energy. We want to move things forward, so the Scottish Government actually have a plan. That has always been missing in the UK. I appreciate that the Minister wants to help in the latest crisis, as have all her predecessors. That is what has happened: they have helped in each succeeding crisis but we just keep stumbling from crisis to crisis, kicking the can down the road without actually implementing a proper, forward-looking strategy that would take the entire UK steel industry forward.

We have talked a lot about the value of steel, but we should also look at the supply chain and all the other industries and all the other parts of the economy that benefit from having a really good steel industry. For example, when the Scottish Government put out tenders for offshore wind, applicants for the ScotWind leasing, which took place recently, were required to submit a supply chain development strategy that set out the level and location of supply chain impacts throughout the lifetime of products. That goes back to what I talked about—signing the steel charter. We now have the ridiculous situation where in the UK, High Speed 2 suppliers and contractors were not mandated to use UK steel. That is basic stuff: it would not happen anywhere else, and it is really important that it should not happen here.

I do not want to take up too much time, but I want to plead with the Minister to look at energy costs, which is another huge issue faced by energy-intensive industries such as steel, as well as ceramics. I recognise most of the Members present from my long-standing membership of the APPG for steel and metal-related industries. For the whole time I have been in this place, all of those Members —the hon. Member for Aberavon (Stephen Kinnock) has also been mentioned—have been fighting to save either their local plant or the industry in general. We have seen huge increases in tariffs from the US and cheap Chinese steel flooding into the country, so again, I go back to the major point I want to make: could the Minister please give us an indication of the way forward, with a steel plan for the next few years? We should be looking 20 years ahead, not stumbling from crisis to crisis.

I am not shy about saying that the Scottish Government look at things, consult and try, using their limited powers, to do stuff that helps Scottish industry—in this case, steel. We need the same commitment from the UK Government; we need something like mandated use of UK steel in projects across the UK, because without that, we are leaving the business open. Brexit has had an awful effect on steel as well, because we can no longer access markets in Europe in the same way. We cannot go back to the drawing board, because there has not been a drawing board on which a steel strategy has been written. Can I please have some sort of assurance that the UK Government will look at energy prices, among other things, and create a proper industrial strategy that includes steel, making sure that the UK is still a steel producer in five years’ time?

15:37

[Bill Esterson (Sefton Central) (Lab)]

As always, Mr Pritchard, it is a pleasure to see you in the Chair. My hon. Friend the Member for Newport East (Jessica Morden) has set out a fantastically well-crafted case for the UK steel industry. The sense of the whole debate has been about the strategically important role that steel has to play in the UK—it is probably fair to say that everybody who has spoken has accepted that point, and indeed made that point. I dare say that in a few minutes’ time, the Minister will do so as well.

The economic and national security value of steel made in the UK is incredibly important. We have seen in recent times why it is so important that we have strong domestic supply chains in our core industries—that has been underlined by Putin’s invasion—and steel is at the forefront of the issue. Throughout the debate, a number of Members have made the case that it is dangerous to rely on imports, as well as for the importance of demonstrating confidence in the steel industry and a long-term commitment to it, the key role it has in the transition to low carbon, and its importance to regional economic success, jobs and communities.

My hon. Friend the Member for Rotherham (Sarah Champion) rightly spoke about the 185 workers whose jobs are at risk in her constituency alone, out of 440 redundancies at Liberty. Can we honestly see a future for this country where steel for civil aircraft made by Boeing and Airbus is not being produced by Liberty Steel? This issue is strategically important for our domestic supply chains, and Liberty is producing that steel for incredibly important customers. The impact on the workers, the families and the communities is a point that my hon. Friend made extremely strongly.

My hon. Friend the Member for Llanelli (Dame Nia Griffith) reminded us about the last-minute U-turn—it was so late that I think it was a last-second U-turn—on tariffs last summer. I am afraid that that U-turn is typical of what we have seen over 13 years of this Government when it comes to the steel industry. It is typical of their approach to many other aspects of the economy as well.

That is not the only late response we have seen. We saw it with SSI and the blast furnace in Redcar, which at that time was one of the leading examples of carbon capture, utilisation and storage in the steel industry anywhere in the world. The Government did not intervene, and by the time Ministers became increasingly involved, talking to the steel industry and unions in 2016, it was too late.

I know that the Minister has met the steel unions, but I hope she will impress on her boss, the Business Secretary, the importance of talking to the trade unions in the steel industry. As this is a strategically important industry, there should be interest at Cabinet level, as well as at the Minister of State level. I hope I am right in thinking that she is the Minister of State; otherwise, I have just promoted her.

[The Minister for Industry and Investment Security (Ms Nusrat Ghani)]

Well, you have just demoted me.

[Bill Esterson]

The Minister says from a sedentary position that I am making out that her role is not important enough. I am not doing that at all—I think it is a very important role. It is important that steel Ministers have longevity in the role, but it is also important that there is a strategic role at Cabinet level. That was the point I was making; it was certainly not my intention to undermine the Minister. I hope she will take back to the Secretary of State the points made in writing by the trade unions.

Returning to the Government’s late response, I hope it is not as a result of the announcements at Liberty that we are suddenly seeing press reports of hundreds of millions of pounds potentially being available. I know that the Minister will not be able to confirm that today, because of ongoing negotiations. But I do hope that the press reports come to fruition. When she was Prime Minister, the right hon. Member for Maidenhead (Mrs May) promised £250 million for a green steel fund, but that did not happen. I am afraid that our memory of what Government have previously promised the steel industry is still strong.

I gently say to Government Back Benchers that what sounds like blaming the last Labour Government for 13 years of Conservative policy does not wash with people. The figures show that steel industry production in this country has declined by half since the global financial crisis. Thirteen of those 15 years have been under a Conservative or coalition Government. We have fallen from 17th to 25th in the world for steel production since this Government came to office. Of course, this is at a time when China and India have dramatically increased their steel production and every other steel-producing nation has experienced decline—it is just that the decline has been higher in this country over the past 13 years. As Members have pointed out, of the top 10 steel-producing countries, we are the only country currently in decline. We have to address that. We can and should go through the history, as long as we learn from it. As long as we apply the lessons from history, we will be in the right place.

My hon. Friend the Member for Neath (Christina Rees) made a heartfelt contribution about the value to communities of the steel industry, using her own family history to make the point about how vital it is to the Welsh economy. Indeed, she was one of the Members who made the point about this country being the only one of the top 10 steel-producing nations where the industry is in decline. The question is: what are we going to do about it? We have to address the challenge of our energy prices. The prediction for this year’s energy prices is that in Germany, steel-producing companies will pay £107 per kWh for electricity and in this country it will be £174. This cannot continue. The Government must take action on the emissions trading scheme. Members have explained the significant cost to the industry—£120 million amounts to 60% of capital investment in the steel industry. These are the challenges the Government must take on in a strategic way, not by using yet another sticking-plaster approach to a problem in the economy.

The Government can and must do more on procurement. Environmental, social and labour clauses are at the heart of Labour’s plan for procurement. It is beyond belief that this country is the only major country that would even dream of giving a contract for warships to an overseas company. There is no guarantee that the Spanish consortium awarded that £1.6 billion contract will use UK-made steel in producing those fleet solid support ships. Other countries take a more strategic approach. The United States has the Inflation Reduction Act, with strong commitments to the transition to low-carbon steel production at its heart. Such a commitment has also been made by other countries whose investments are years ahead of what is going on in this country, including Canada, Spain, Belgium and Germany. They are committed to low-carbon steel production.

[Jim Shannon]

The hon. Gentleman mentioned the contract for warships. In Belfast, Harland and Wolff has benefited from that, but the disadvantage is that if it wants to buy British steel and bring it over to the Northern Ireland, it will be 25% more expensive. Again, that is a conflict of the Northern Ireland Protocol Bill.

[Bill Esterson]

The hon. Gentleman is absolutely right that we need to sort out the Northern Ireland protocol. That is a slightly longer and wider debate, but it is an important point for him to raise as a Northern Ireland MP.

I want to remind the Minister about the problem with Russian steel, which my hon. Friend the Member for Newport East mentioned. It cannot be right that melted and poured Russian steel can be diverted via a third country and then imported into this country. Sanctions have to apply to all Russian-produced steel. We have had the Government announcements, media reports and lots of talk over the past 13 years from 12 Ministers. What we need is a proper strategic approach. Labour is putting forward an industrial strategy and plans for a green steel fund of £3 billion. That is the kind of strategic long-term commitment that will deliver the confidence and certainty to the industry that is needed. We have a plan. We have proposed a billion-pound fund for energy-intensive industries and it could help right now. The Government can adopt our plan if they want to. It is there in writing in the public domain. They can adopt that plan or come up with their own, but it has to be at a strategic level—no more sticking plasters. We need a strategic long-term answer for the future of this vital strategic industry.

15:48

[The Minister for Industry and Investment Security (Ms Nusrat Ghani)]

It is a pleasure to serve under your chairmanship, Mr Pritchard. I congratulate the hon. Member for Newport East (Jessica Morden) on securing the debate and raising the incredibly important issue of the contribution that the steel industry makes to the UK economy. We seem to be spending a lot of time with each other, and I want to put on the record that, while we are from different political parties, we are all aligned on doing what we can for the sector.

I am slightly anxious that everyone keeps pointing out that I am the 12th or 13th Minister—I am not sure if that is the kiss of death or not. As well as getting through my speech, I want to respond to all the contributions because I know how important that is for all the MPs who need to go home to their constituencies this weekend and explain what they have done on behalf of the steel sector.

I thank the hon. Member for Rotherham (Sarah Champion)—life comes at you fast when your own Select Committee report is read out to you in a debate. I thank the hon. Member for Neath (Christina Rees) for setting out the importance of the steel sector to the Welsh economy; the hon. Member for Cardiff South and Penarth (Stephen Doughty), whose points I will respond to very shortly; and the hon. Members for Llanelli (Dame Nia Griffith), for Westmorland and Lonsdale (Tim Farron) and for Strangford (Jim Shannon). I will cover the Northern Ireland protocol briefly, if time allows.

Of course, I thank the Chair of the Welsh Affairs Committee, my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb). Freeports were in my Maritime 2050 plan—launched when I was previously maritime Minister—which is backed by the Associated British Ports. I am not sure what more I can say, other than I do love freeports and ABP is a pretty good organisation; hopefully, that is enough said.

I thank my hon. Friend the Member for Scunthorpe (Holly Mumby-Croft)—our lady of steel—to whom I am indebted for the support she provides when I constantly ask for bits of information to ensure that my Department is absolutely on the right path in delivering for the steel sector. I also thank the hon. Member for Motherwell and Wishaw (Marion Fellows). I will try my very best to get to the points she raised as well.

As we know, steel contributed £3.8 billion to the UK economy in 2021. It is crucial to many downstream sectors, such as construction, automotive and our green energy revolution, all of which sit in BEIS. I take care of automotive, aviation, maritime and construction, so it is critical to the rest of my brief. The industry provides a critical foundation that underpins our manufacturing, energy and infrastructure sectors, with a proud history forged in our United Kingdom.

In 2021, the steel sector supported 39,000 well-paid jobs in steel production and a further 59,000 jobs across the UK economy. Although my hon. Friend the Member for Scunthorpe does not get political on steel, I thought she landed a good point in saying that jobs and production halved under Labour. However, we are trying to be collective in our support of the steel sector, so I will not dwell on that too much. We know that for many constituencies, steel is the lifeblood of the local economy and a real source of local pride. I pay particular tribute to the hard-working steel workers who have contributed much to our steel industry over the years.

However, as we have heard today, we have to recognise that there are global pressures. The sector is under stress everywhere. This is not just a UK issue; there are global challenges exacerbated by global overcapacity and the need to decarbonise. The hon. Member for Cardiff South and Penarth asked about the oversupply issue. Through the global forum on steel excess capacity, the G20 and other interested nations agreed important policy principles and recommendations to tackle the unfair subsidies that we believe are the cause of overcapacity, and we continue to work together to find solutions to this challenge.

We are disappointed that not all major steelmaking economies are taking part in these discussions, and I call on all players to come back to the table—in particular China, which represents more than half of all steelmaking capacity in the world. There are also great opportunities in how we can use steel as we transition to a zero-emission economy and help our other great industries to transition as well.

Challenges are particularly acute at the moment. Unfortunately, over the past couple of weeks we have learned of the potential redundancies being made at Liberty Steel, including in the constituency of the hon. Member for Newport East. Obviously, these are commercial decisions, and I am working incredibly hard with these businesses and the Department for Work and Pensions to ensure we are doing what we can to support every worker and give them the support they need. We spend most of our time working on that, to ensure they have opportunities to be trained up and get the support they need. There are a lot of challenges that the Government are facing, but it is not just us in the UK.

I want to cover some of the support that the Government have provided, which is substantial and has been in place for some time. More than £800 million has been made available to the steel sector alone since 2013. There has always been a discrepancy between the price of energy here and in Germany, which is quoted quite often, but £800 million is a substantial amount of support. We have created new, competitive funds, with more than £1.5 billion made available. The lead Member for this debate, the hon. Member for Newport East, reported that that funding covers not just steel, but a number of other industries, but I am keen to ensure that the steel sector gets the support it needs. I promised the hon. Lady that I would go through the funds so that she would be able to share that information back home in her constituency.

The hon. Lady mentioned the CCUS infrastructure fund. Each site is at a different stage when it comes to decarbonising, but that is £1 billion. There is funding of £240 million through the net zero hydrogen fund, which I know is important to many Members present; £55 million through the industrial fuel switching fund; £20 million through the Industrial Decarbonisation Research and Innovation Centre, which provides capital funding to projects that support fuel switching to hydrogen on industrial sites; £289 million through the industrial energy transformation fund to help businesses with high energy use, including steel; and £66 million as part of the industrial strategy challenge fund. Those budgets are in place to help the steel sector in the long term. They are not short-term sticking plasters, but substantial amounts of money.

[Sarah Champion]

I recognise and am grateful for all the support the Government have given and will give to steel, but those are like little Lego bricks. There is not the joined-up strategy that we need to have confidence in our industry. Will the Minister please come forward with a proper national plan to save this vital sector?

[Ms Ghani]

We need to put in place all the budgets that are available. I will quickly touch on procurement, which gives confidence in what we are hoping to do in the long-term for the sector; it does put together a plan.

As I said when I was at the APPG earlier, since I have been in post I have been focused on the issues that we are facing right now—with Liberty, for example. I cannot comment on the negotiations because they are live. I said to the APPG that, once we have got over that moment, I hope to sit down, do a refresh and look at everything we can provide the sector in the long term. What is happening in the United States is a game-changer, so we can try to push back on some of the challenges we have had on procurement previously. We can try to see what more we can do.

I am anxious that I have only four minutes left. On the £18 billion of energy relief, Gareth Stace, director general of UK Steel, said that the energy bills discount scheme provides

“important certainty and stability for steel producers’ production costs”.

We have legislated for the full range of tools allowed under the WTO rules so that the UK can tackle the threat of unfair trading practices and injuries.

Furthermore, in financial year 2020-21, the Government procured UK-produced steel worth £268 million for major UK projects—an increase of £160 million on the previous year. When I was the High Speed 2 Minister, before I realised I might get the steel brief, I always used to bang on to HS2 about not procuring more British steel. I hope to go back and reflect on procurement again, especially because it was in the BEIS Committee report—I want to say that before the hon. Member for Rotherham pushes that and reminds me of what I committed to.

About 8.4 million tonnes of steel is required for infrastructure projects in the UK, including 5.5 million tonnes for contracts for difference, which are not always considered public procurement, so there is huge scope for more procurement to take place in the UK. I will try to address that too.

There has been a huge level of engagement. The hon. Member for Sefton Central (Bill Esterson) said that it should be at Secretary of State level, but I have been meeting with the unions. I have kept every appointment that has been asked of me.

[Bill Esterson]

It should be both.

[Ms Ghani]

It is both. The Secretary of State regularly meets the senior members of all the organisations that try to speak to us about steel.

[Bill Esterson]

You haven’t met the unions.

[Ms Ghani]

I was with the unions yesterday and in front of the APPG today.

I am going to run out of time, so I will quickly touch on the carbon border adjustment mechanism. We are aware of the risk of carbon leakage, which a number of Members highlighted, and we have been monitoring the EU CBAM proposal with interest. As I said to the APPG this morning, once the consultation is out, it is absolutely vital that we put in the best submission. I have agreed to come back to the APPG to ensure we do that constructively.

Public procurement is a key focus of mine. I am trying to get over the negotiations at the moment, and I will reflect on what more we can do with procurement. We are looking at the BEIS steel procurement taskforce, and we will also reflect on what is happening in the United States.

On trade, Members know my positions on countries such as China and Russia, as double sanctionees. I know how important it is to ensure we are resilient in the UK. We work very closely with the Department for International Trade to put together the best packages for trade. I absolutely understand the points made about Russia. We are doing everything we can to ensure that that steel is not arriving here, but I will go back and see whether we can push back any further. I will do everything I can to ensure that happens.

My hon. Friend the Member for Scunthorpe was keen to reflect on the steel safeguards. We have agreed an extensive solution to the US section 232 tariffs to significantly increase US market access for UK firms.

I am anxious that I am going to run out of time, so I will respond to Members in writing. I reiterate my commitment to the sector and to appearing in front of the APPG as soon as possible to ensure we are putting together a good package and are able to lobby No. 10 and No. 11 collectively.

[Mark Pritchard (in the Chair)]

I call Jessica Morden to wind up. You have 20 seconds.

15:10

[Jessica Morden]

I thank all Members for coming along. We have agreed that this is a critical time for steel. I welcome the new steel Minister to her role. I welcome the talks; I think they are a step in the right direction. I also support Community’s call for steel companies to reconsider any plans for restructuring while those talks are ongoing and before we know what future support there might be. I say to the Minister that we need more data on procurement, so perhaps she can provide that—

[Mark Pritchard (in the Chair)]

Order.

Motion lapsed (Standing Order No. 10(6)).

Silsden and Steeton Bridge

Wednesday 25th January 2023 Westminster Hall

16:00

[Mark Pritchard (in the Chair)]

I call Robbie Moore to move the motion, and then I will call the Minister to respond. As hon. Members know, there is no opportunity for the mover of the motion to wind up in a 30-minute debate.

[Robbie Moore (Keighley) (Con)]

I beg to move,

That this House has considered construction of a Silsden and Steeton bridge.

It is a pleasure to serve under your chairmanship, Mr Pritchard. I am delighted to have secured my own personal time in the House of Commons to raise an important local issue: my campaign to get the Silsden to Steeton pedestrian bridge built over the busy A629 dual carriageway.

Before I get into the detail, it is important to outline why this campaign is so important. Silsden is a town with a population of around 8,000, including myself; perhaps I should declare that as an interest, because I would like to benefit from this bridge. Silsden is connected to Steeton—a slightly smaller settlement—by the A6034, otherwise known as Keighley Road, which then goes on to become Station Road. It is a distance of less than 1,000 metres.

Steeton has a busy and well-utilised railway station, with direct links to Skipton, Bradford and Leeds. Many of my constituents living in Silsden benefit from that station, but getting there is a treacherous journey on foot. What separates the two settlements is a very busy dual carriageway. The A629 is a busy trunk road going east to west between Skipton and Keighley, and beyond. It takes a huge amount of heavy traffic every day and into the night.

On the junction between the busy dual carriageway and the two roads connecting Silsden and Steeton is a two-lane roundabout. There is no ideal crossing point for a pedestrian to get across the roundabout and the busy dual carriageway from Silsden to Steeton. For a resident living in Silsden with children, or a young person who is wanting to walk from Silsden to Steeton, the connection to get to the roundabout is not easy in itself. The pavements are very narrow on either side of the road.

If a person is walking from Silsden in the direction of Steeton, once they get to the bridge that goes over the Aire river, the pavement disappears on one side and they have to cross over to the other side. They then have to make their way up to the busy roundabout and take their life into their hands to cross it before making their way on to Steeton. That is just not good enough. We must get a pedestrian bridge built as a matter of urgency, because many people use the crossing.

What action has been taken to date? Kris Hopkins, who was the previous Conservative MP for Keighley, first lobbied on the issue. He got a petition going that was signed by many residents living in Silsden and Steeton who had to use the crossing on a day-to-day basis. As the MP for Keighley, and Ilkley at the time, he was successful in securing £700,000 from our Conversative Government for a feasibility study, which was awarded to the West Yorkshire Combined Authority. In turn, it instructed Bradford Council to undertake a feasibility study and build a business case so more funds could be drawn down to get the pedestrian bridge built.

That money was awarded way back in late 2016, and it took until 2020 for the Labour-run Bradford Council and the Labour-run West Yorkshire Combined Authority to even get the feasibility study done. Almost four years! What on earth were they doing in that period to build a business case? It was only after I lobbied, after getting elected in 2019, that Bradford Council and West Yorkshire Combined Authority produced this feasibility study, and—surprise, surprise—what do we think it said? We need a bridge to cross this busy dual carriageway. Unbelievable! They spent £700,000 on determining that, but we could all have said that it needed to be done.

The feasibility study said that it was going to cost £3.6 million to construct the bridge—a hefty sum. Of course, detail is important, and I appreciate that it can take some time to build up the feasibility and business cases to draw down funds. But, looking at the figures, it would seem that West Yorkshire Combined Authority, a Labour-run administration controlled by a Labour Mayor, and the Labour administration at Bradford Council could not even get their figures right. In 2020, they told us, and my constituents, that it was going to cost £3.6 million to build the bridge. In June 2021, they then told us it was going to cost £5.5 million, and then—surprise, surprise—we get to August 2022 and the figure has gone up dramatically to £10.3 million.

All we want is a pedestrian bridge across a dual carriageway, and they are now telling us that it is going to cost £10.3 million. That is an increase of £6.7 million since the first figure of £3.6 million from the feasibility study that took them almost four years to do. What on earth have they been doing during the last four years, and what on earth was the previous Labour MP doing to get any traction on this project? Nothing!

I can only assume that those figures have been exaggerated to try to kick the project into the long grass because they are not interested in building the bridge. Well, let me tell you, Mr Pritchard: I absolutely am. Since I have been elected as the Conservative MP, we have been successful in securing the funds to deliver this project. Those funds have been awarded by this Conservative Government to West Yorkshire Combined Authority via an £830 million fund that is ringfenced for transport and infrastructure-related projects.

The money is there; we have secured that, and now it moves on to deliverability. Back in 2022, when the announcement was made that we had been successful and secured the money, what did Labour-run Bradford Council and Labour-run West Yorkshire Combined Authority tell us? “Oh well, it is going to take until 2026 for this bridge to be built.” I cannot get my head around how much time it takes to get a project off the ground. All we want is a safe crossing so that my constituents can get from Silsden to Steeton without having to take their lives into their hands by crossing a busy dual carriageway.

The incompetence at the council is unbelievable. Look at how long it takes to get major infrastructure projects off the ground. The Queensferry crossing, connecting Edinburgh to Fife, took six years to build, yet the council are saying that a pedestrian bridge is going to take another four years to get off the ground. That is simply not good enough. The feedback that I am getting is that the ground conditions are complex—well, let’s get it sorted out and do our research so that we can get the bridge built. I know that planning issues can be complex. Compulsory purchase powers may need to be implemented because I assume that land take will be required, as the council will not own all of the land. Let us get this project going.

I will continue to bang the drum for driving economic growth and ensuring that we have a safe crossing for my constituents, but we must get the council and West Yorkshire Combined Authority moving because I am getting impatient and I will not stop banging the drum on this issue for my constituents. All we want is a safe pedestrian crossing over a busy dual carriageway. I want to crack on and get it built now, so that a parent living in Silsden does not have to drive their child almost 1 km to drop them off at the station in Steeton or take their life into their hands when crossing the dual carriageway. I am getting fed up with the sluggish approach of our council and of West Yorkshire Combined Authority. As I say, let us get this bridge built.

Will the Minister use all his efforts to put pressure on the Labour West Yorkshire Mayor, who is dragging her feet on this issue, and on Labour-run Bradford Council, to get this project delivered with urgency? Will he write to those two organisations to put pressure on them to get the bridge built? Will he come to see me and meet some of my residents in Silsden and Steeton, so that we can get this project off the ground? All we want to do is get the bridge built.

16:10

[The Parliamentary Under-Secretary of State for Transport (Mr Richard Holden)]

It is a pleasure to serve under your chairmanship, Mr Pritchard, and it is always important to hear from my hon. Friend the Member for Keighley (Robbie Moore). Although I am from the other side of the Pennines, I went to school just up the road from him, so I am aware of the issues that he raises. Being an Ermysted’s old boy, I have friends from the neck of the woods that he mentions, in Silsden and Steeton, and I know how important the road crossing is for him and his constituents.

I thank him for securing the debate and for building on the work of his predecessor but one, Kris Hopkins, who started this campaign. It is astonishing that it is now longer than six years since the project started. I am sure that by working together, we can reach a situation where this is not a bridge too far for Bradford Council and the West Yorkshire Combined Authority, and get it delivered for local people.

It is a pleasure to address some of the points that my hon. Friend raised. Putting in place transport infrastructure that supports local communities is a key priority for my Department not just for West Yorkshire, but for the entire north of England and the whole country. That cannot be done without local authorities, which we need on the ground to deliver schemes.

My hon. Friend will recognise the strong investment that the Government have made in transport in the north. That has been reinforced through our flagship city region sustainable transport settlement. That will provide about £6 billion to the largest city regions in England to transform their local transport networks over the next few years.

CRSTS represents an unprecedented investment in West Yorkshire’s transport, and it will play a key role in supporting growth and productivity, levelling up and decarbonisation. The settlement will see West Yorkshire specifically receive £830 million from central Government funding for investment in public transport infrastructure and many important projects. Hon. Members, such as my hon. Friend the Member for Keighley, can be very proud of the role that they have played in helping to ensure that West Yorkshire gets the money for those local schemes.

As part of that £830 million, £9.5 million is provided for the construction of the Silsden and Steeton bridge. Additionally, the Department for Transport provided £700,000 to support the business case for the development. How on earth it took four years, I do not know. It feels to me that there was a clear hiatus between the tenure of Mr Hopkins as the local MP and that of my hon. Friend, who now represents Keighley and Ilkley, when things did not get done because they were not being pushed for for local people. I know from speaking here and in the House that my hon. Friend is a cut above in fighting for his constituents, wherever they are in his patch.

The £830 million commitment through CRSTS is also expected to be supplemented by mayoral combined authorities with a local contribution of 15% to 20%. As well as providing investment for the construction of the bridge, CRSTS gives West Yorkshire’s metro Mayor huge autonomy and flexibility in investing in wider local transport priorities for the region, and it is her decision what to prioritise. Personally, I cannot understand why a relatively small project, which is unlikely to have a broader impact, is not being prioritised, especially when it has been campaigned for for so long not just by my hon. Friend the Member for Keighley, but by his predecessor’s predecessor. The investments include large transit systems, massive improvements in Bradford city centre and all sorts of other things, but crucially, they also include the important link for his constituents in Steeton and Silsden.

The Government fully appreciate the critical role that our city regions play in driving growth and long-term prosperity, and connectivity is vital to that. It is our ambition that every region has at least one globally competitive city at its heart. The CRSTS programme, which is the latest part of this Government’s significant track record in investment in West Yorkshire, will begin to realise that ambition by investing in transport networks and opening up areas in the region for more employment, education, leisure and housing. My hon. Friend has consistently campaigned for such interventions as a local MP on the ground and through his work in Parliament.

We believe that better transport connectivity helps all our regions to fulfil their potential. Alongside CRSTS, the Government are providing £70 million for West Yorkshire’s bus service improvement plan, which is being used locally to introduce the excellent and very welcome £2 fare cap. That is central Government money for which hon. Members, such as my hon. Friend, have campaigned. We have provided £173 million to a large public transport scheme in Leeds, improving transport for residents and workers. Many of my hon. Friend’s constituents will commute to work in those places, and that is why the regional funding is so important.

The Government have funded important local schemes, including through the transforming cities fund. We are really trying to help to drive up local transport and active travel. We have also helped West Yorkshire to establish a £1 billion transport fund, which is a 20-year commitment for the city region and will help create 20,000 more jobs.

Taken together, all those initiatives will deliver significant improvements to bus services in the region, including safer and more accessible bus stops, better highways and improved journey times. The £830 million is merely the latest in a series of investments in West Yorkshire and the region, which shows our long-term commitment. When we provide such funding, we hand the reins to local people, councils and combined authorities. It is right that those local councils, such as Bradford Council, and combined authorities are held to account for what they deliver with that money for local people. That is why I think today’s debate is so important.

Across the north more broadly, the Government have been investing very substantially: around £33 billion has been invested in transport since 2010, and around a tenth of that will come from the CRSTS funding. There have been projects across Yorkshire and the Humber, and the integrated rail plan is providing £100 million to look at the best way to take HS2 trains into West Yorkshire. Furthermore, over £239 million is being distributed to local authorities across the north that are not receiving the CRSTS funding that West Yorkshire is receiving, in order to support pothole repairs and local transport measures in 2022 and 2023.

Through greater investment in local areas, we can grow the economy, create good jobs and spread opportunity everywhere. The new funding will help to do that, and— this is important for towns such as those in my hon. Friend’s area—it will help to reflect that real local pride. That is part of what he said: he wants to see those things delivered for local people to create pride in their towns, especially when they have fought for so long and so hard for some of these things.

With the Government providing significant funding for places to fulfil their ambitions, I look forward to seeing this being delivered, and it is all about delivery. The responsibility lies with West Yorkshire Combined Authority and the city region’s metro Mayor, Tracy Brabin. West Yorkshire was at the forefront of our drive to create mayoral combined authorities and we recognise the strategic importance of joining up transport connectivity, which is why we put it at the front of the queue. Now it is up to Tracy Brabin to deliver.

Through a series of devolution deals, we have provided more transport powers—we want to provide more—and more funding to support mayoral combined authorities, but we have to see them delivering. The best way for them to do that is to push forward schemes such as the one in my hon. Friend’s constituency. We understand that there are the skills and the capacity in local government; that is why they have been asking for these powers and why we have given the powers to them. Now they need to deliver.

Central Government supports local government’s capacity and capability in a huge number of ways, including through the resourcing grant for the combined authority of £7 million, which is huge money. It is there to help and to deliver projects such as the one that my hon. Friend has been fighting for.

I agree with my hon. Friend that the construction of this bridge is very important for local people, and I am excited and proud that the Department has been able to support it through funding. I take this opportunity to commend the combined authority for part of its track record on some of these projects, which they have pushed forward. However, we want to see all these schemes being delivered—not just some that have been handpicked—as quickly as possible, so that as many people as possible can benefit from them.

My Department will work closely with West Yorkshire Combined Authority on the progress of its whole settlement to realise positive outcomes for people living in Steeton and Silsden, as well as for people living in the wider West Yorkshire area, and to understand whether the local authority can take up any of the opportunities perhaps to accelerate the schemes as they go ahead to construction.

As my hon. Friend requested, I will ask my officials to raise this issue in their regular meetings with the combined authority, and I will write to him about that. The Department will monitor each MCA’s progress throughout their settlement period to ensure that ambitious plans are matched by successful delivery, so he can rest assured that we will continue to monitor this work. However, the responsibility for delivery and deployment ultimately sits with the local authority in Bradford. That is why it is so important that these issues continue to be raised.

I look forward to seeing the City of Bradford Metropolitan District Council deliver promptly on the investment that my Department has made in this scheme, and I am grateful to my hon. Friend for raising it. I will also be delighted to come up and visit him, because I think that we all need to put our shoulders to the wheel, just to give this scheme a bit of a nudge in the right direction.

I hope that I have been clear about the level of support that the Department has been providing to West Yorkshire, the importance we attach to the bridge between Steeton and Silsden, and, importantly, the broader connectivity investment that we are providing for my hon. Friend’s area and the region. The sluggishness of the local authorities in this case stands in stark contrast to the sterling work of my hon. Friend, who is always at the forefront of championing his constituents. I look forward to continuing to work with him and the local authorities to get this project delivered, to get the area thriving, and to make this happen sooner rather than later.

Question put and agreed to.

16:23

Sitting suspended.

Violence against Women and Girls: Plymouth

Wednesday 25th January 2023 Westminster Hall

16:29

[Sir Gary Streeter (South West Devon) (Con)]

I beg to move,

That this House has considered the matter of violence against women and girls in Plymouth.

It is a pleasure to see you in the Chair, Mr Pritchard. 2021 was a tough year for the city of Plymouth. In August, a young man tragically took the lives of five people in Keyham, killing two women and a little girl, before turning the gun on himself. In November, 18-year-old Bobbi-Anne McLeod was abducted from a bus stop in Leigham and found several days later, close to a beach in my constituency, having been brutally murdered by a man. These horrific incidents compounded the sense of fear and concern among female residents of Plymouth, which was shared by many across the country after the murder of Sarah Everard by a police officer in London, earlier in 2021.

As a result, it became clear that something needed to be done to tackle violence against women and girls in Plymouth, if the city was to feel safer and be safer. And so began a cross-party piece of work, which resulted in a groundbreaking report containing 15 recommendations. Recommendation No. 5 states that Plymouth should share its learning:

“Plymouth will share its story as widely as possible so others can learn from the experiences of people in the city and the work of the Commission. The Commission will call on local MPs to host a debate in Westminster on male violence against women and girls in Plymouth.”

That is why we are here today: to share the work of the Plymouth commission on violence against women and girls, and the ongoing work across the city to embed real change and make women and girls safer in our city.

The hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) sends his apologies. He cannot be with us due to a long-standing commitment, but his work following the Keyham murders was exceptional. I am also expecting my right hon. Friend the Member for Plymouth, Moor View (Johnny Mercer) to pop in later in the debate. His ministerial duties mean that he cannot say anything, but he is very supportive of the action we are taking today. We are all in this together. I also pay tribute to the leader of Plymouth City Council and the leader of the Plymouth Labour group for collaborating so closely on this project. They appointed a rising star of the council chamber, Councillor Rebecca Smith, to head up the commission. Months later, that appointment has proved to be well judged.

The first step on the commission journey was to host a question and answer event with groups already working on the issues of violence against women and girls in Plymouth, ranging from the police and the council to organisations such as Trevi and First Light, which work with survivors of domestic abuse and sexual violence. It was important to start by more clearly sharing the existing work being done across the city. The online event was attended by over 120 people and gave a clear sense of the sort of questions that women wanted answers to, but also provided some of the topics that the commission would need to address—for example, the importance of working with young people to help to shift the culture of everyday sexism and misogyny that so many experience.

A group of experts from across the country were invited to join the commission to investigate the current situation in the city and make recommendations on how the city should tackle violence against women and girls. The commission was chaired by Councillor Rebecca Smith, with former chief prosecutor Nazir Afzal OBE serving as an independent adviser. Just over 12 months ago, the commission met for the first time and set about gathering evidence to report on how Plymouth was tackling violence against women and girls, and to recommend what might be done to enhance existing work. The result was the “Male Violence Against Women and Girls Report”, with its 15 recommendations, which was published in May 2022 and is available online.

We believe that the commission and its report and recommendations are the first of their kind in the country. The commission heard over 40 hours of oral evidence, conducted a citywide survey completed by over 1,300 people, and received written evidence from a large number of sources. From the start of the work, it became clear that the elephant in the room is the fact that the violence against women and girls acronym, VAWG, unintentionally leaves out any mention of the perpetrators. The commission therefore deliberately referred to male violence against women and girls throughout its report, to make that point. Although it is important to acknowledge that not all sexual violence, domestic abuse or stalking is male on female, it clear from the data that the vast majority is. In 2019-20, 69.3% of domestic abuse victims in the city were female and 74.4% of suspects were male. Thus, the commission sought to keep this tragic reality central to its work and recommendations.

The report and recommendations focused on four key areas: the need for cultural change around language and behaviour; the need for better access to support for women and girls who are victims of male violence; the need to help women and girls across the city to feel safer by creating safe places and spaces; and the recognition that, in order to deliver the recommendations, the whole community needs to be involved. Let me deal briefly with each area in turn, beginning with cultural change.

How do we change our deeply entrenched culture, which is riddled with inappropriate male attitudes to women and girls? In particular, how do we do so when the internet has made access to degrading images of women a free-for-all, and on social media so-called influencers such as Andrew Tate, as well as men belonging to the incel mindset, continue to pour out their bile and disrespect on women and girls? A challenge indeed. But just because we are unlikely to solve the problem completely does not mean we should not try to make a real difference right here, right now. As the commission chair, Councillor Rebecca Smith, said, a key to success is the fact that the conversation has already started.

By shining a light on male violence against women and girls through the work of the commission, Plymouth has been able to highlight the issues that need to be fixed—those that are behind the closed doors of homes across the city, common in workplaces and social spaces, evident across internet usage, and too often commonplace among our young people. Honest conversations have begun, and need to continue, as the city explores what a world without male violence against women and girls looks like, and the steps needed to achieve it. An early example is the NSPCC’s series of five films, launched in December last year, that show an intergenerational approach to preventing violence against women and girls. Another example has been the start of a local group called M.A.N. Culture, which is described as a network to challenge lad culture and promote positive attitudes among men towards women and girls.

Cultural norms can be challenged and changed. When I was first elected 30 years ago, who would have thought that we would call each other out for having a couple of drinks in the pub and trying to drive home? Drink-driving was not seen as particularly wrong in those days, but public opinion turned, legislation followed, and once acceptable behaviour became all but obsolete. That is just one example that cultural shift is possible; and on male attitudes towards women and girls, the journey has begun.

The report’s second area of focus was better support. It recommended that

“Women and girls in Plymouth are supported and empowered to report violence and abuse”,

that they should

“get the support they need, at the right time and in the right place”

and that they should not have to share their story twice. Since 2018, Plymouth has been proactively addressing violence against women and girls through the city’s domestic abuse and sexual violence partnership. The city has been implementing Home Office guidelines: putting the victim at the centre of service delivery; having a clear focus on perpetrators in order to keep victims safe; taking a strategic and systemic approach to commissioning domestic abuse services; providing locally led services; raising awareness of issues; and involving, engaging and empowering communities to design and deliver solutions to prevent violence against women and girls.

Work was already being done across the city before the commission was set up. However, since the commission’s report, work to deliver the recommendations has accelerated. The Safer Plymouth partnership, supported by the domestic abuse and sexual violence partnership board, is providing the overall leadership and direction for the citywide deliver of the commission’s recommendations, and a new strategic lead has recently been appointed, bringing to the role 20 years of experience in the sector.

Since the launch of the VAWG report in May 2022, a programme of work has been set in train across the city. Moonstone is the name of the local police force’s new stand-alone domestic abuse team, which brings together expertise and focus on cases of domestic abuse. Gemstone is the name of the sexual offences team based in the city. Early indications are that this new focus is bringing about more effective pre-charge advice, improved outcomes, improved timeliness and improved responses to victims. It is significant that tackling violence against women and girls is a priority for our excellent Devon and Cornwall police and crime commissioner, Alison Hernandez.

As one of 15 areas to attract Department for Levelling Up, Housing and Communities and national lottery funding to deliver the changing futures programme, the city has been able to use the project to support the commission’s recommendations. Charities working with abuse victims have co-designed the violence against women and girls charter mark and helped to shape last November’s VAWG conference, both of which were recommended in the commission’s report but were enhanced by the approach of bringing in lived experience. The city’s specialist domestic abuse service is in the process of being re-procured—a timely activity, enabling the new service to be shaped to meet the commission’s recommendations. Much good work is under way following the commission’s report.

Thirdly, creating safe places and spaces also featured heavily in the commission’s list of recommendations. Although meeting the recommendations is obviously challenging, not least because one woman’s feeling of safety is not necessarily matched by her neighbour’s, it has been important to take action and do whatever is possible to ensure the streets of Plymouth feel safer. Funding has been secured to deliver help points at key locations for the night-time economy—essentially lamp posts with a camera installed in them. If someone feels unsafe for whatever reason, they can push the button and get connected to the CCTV team who can support them or provide help.

A night bus service has also been funded and is running each weekend over the winter to help those enjoying the night-time economy to get home safely. A mobile CCTV van providing a high visibility deterrent to tackle all forms of antisocial behaviour has been positioned to support the safety, both perceived and actual, of women and girls. It is great to see my hon. Friend the Member for Plymouth, Moor View joining us; he is very engaged with the whole situation.

The dynamic response project has been developed to make tactical and visible environmental improvements across the city, using referrals from the police or local councillors on behalf of residents to improve feelings of safety in hotspots. These might be simple changes such as trimming back trees to improve the lighting in dark walkways or improving the appearance of areas that have become rundown. The city is testing a single point of entry for children who require assessment, support and treatment for harmful sexual behaviour. All those measures are part of the work being done to ensure the city feels and is safer.

Finally, there is the recognition that this is an issue for us all—the whole community. Continuing to talk about and take action on violence against women and girls is crucial if Plymouth is to see the change it seeks. As a result, the city has set up a new VAWG communications working group to co-ordinate a citywide programme of activities, campaigns and events, including an annual conference, with the inaugural event held last November attracting over 200 attendees from businesses and organisations.

In addition, conversations are taking place with over 50 organisations across the city that have already signed a pledge to tackle VAWG, and to develop a violence against women and girls charter mark scheme and champions network by November 2023. As with any set of recommendations, setting up the framework for delivery is essential, and the new strategic lead is working with the domestic abuse and sexual violence partnership board to refresh the plan for the next 12 months to include the commission’s recommendations.

By setting out the work that has been done in the city since the publication of the commission’s report last year, I wanted to highlight how possible it is to tackle violence against women and girls across a city like Plymouth. Obviously, we have years of committed work ahead of us to see the cultural change we want and an end to violence against women and girls, but in Plymouth we have made a positive start. We cannot pretend it will be easy to set aside centuries of ingrained male attitudes and behaviour, but if we are to build a safer, better world for all women and children, it is essential that we commit to that task.

I will conclude by asking the Minister a few questions. I am sure she will set out how the Government have worked hard, which they have, to play their part in tackling violence against women and girls in recent years. Much of the work being done and facilitated in Plymouth has been impacted directly by Government policy and through funding made available for the work. For that we are grateful, which leads me nicely to my requests.

Additional central funding for frontline interventions would make a world of difference to our cause. Is the Minister aware that current Home Office funding is inaccessible to the majority of small local VAWG organisations in Devon and Cornwall because of the conditions attached? Could she kindly re-examine and consider that?

I have spoken about the ambition to see more work on prevention and systemic cultural change impacting all generations, and additional funding and focus are necessary to include work to change the behaviour and attitudes of men and boys. That would greatly help the city to deliver this vital work. I think we all agree that it is not all about funding; we also need to hear a clear and consistent voice on the issues from those people and institutions qualified to speak about the deeper causes of such attitudes and behaviour. I welcome the recent amendments to the Online Safety Bill that will ensure that we protect children from inappropriate sexual material online, because that is a key part of tackling violence against women and girls through culture change and education.

The commission launched its report at an event last summer attended by my hon. Friend the Member for Louth and Horncastle (Victoria Atkins), then a Home Office Minister, who gave a keynote speech that was extremely well received. All three city MPs were in attendance. We would like to invite the Minister, my hon. Friend the Member for Derbyshire Dales (Miss Dines), to visit Plymouth and see for herself the excellent work that we are undertaking. I congratulate the commission on its work and report, and look forward to supporting its leadership on this vital issue over the years ahead.

[Mark Pritchard (in the Chair)]

I do not wish to set a formal time limit, but speeches of around six minutes would allow everybody to have their full say.

16:46

[Alex Davies-Jones (Pontypridd) (Lab)]

It is, as ever, a privilege to serve under your chairmanship, Mr Pritchard. It is important for me to speak in a debate about an issue that impacts communities across the UK. It is not isolated to Plymouth or Pontypridd but impacts us all. It is a pleasure to follow the hon. Member for South West Devon (Sir Gary Streeter), and I congratulate him on securing this important and timely debate. Having spoken to my hon. Friend the Member for Plymouth, Sutton and Devonport (Luke Pollard), I know that violence against women and girls is a very active issue in Plymouth specifically, so it is important that we have time to debate the issue in detail.

I will keep my comments brief and fairly general, in the knowledge that much of what I say sadly applies, as I have said, to cities, towns and communities throughout the country and across the world, and is not limited to Plymouth. We all know that violence against women and girls can take many different forms, which can include, but are certainly not limited to, physical aggression, coercive control or harassment. In recent years, we have been reminded of the stark realities of what it is like to be a young woman in modern Britain. The stats speak for themselves: in 2019, the number of female homicide victims in England and Wales reached its highest levels since 2006—up 10% on the previous year.

But violence against women and girls is not just about murders or homicides; there are many more issues at play that have led us to the point where male violence against women and girls—as the hon. Member for South West Devon said, let us call it what it is—is too often treated as a societal issue that is a given rather than one that can actively be prevented. For example, there are significant issues with our criminal justice system, which has historically failed women and girls, as the Government have known for many years. I need only point colleagues to the brilliant Baroness Kennedy, who forensically examined the issue of discrimination in her incredible series of books “Eve Was Framed” and “Eve Was Shamed”.

Of course, many of the real problems around violence that women and girls experience every day on our streets, at home, online, at work and even in our schools never even make it to the police—let alone the court system. As the chair of the all-party parliamentary group on perpetrators of domestic abuse, it is clear to me that we need a long-term, whole-system response to ending violence against women that needs to provide justice and protection to survivors, deliver effective prevention, and tackle the societal attitudes, inequality and discrimination that underpin the abuse faced by women and girls.

That brings me to what I consider one of the most significant issues that underpins violence against women and girls more generally: misogyny. Colleagues may be aware that last week I had an Adjournment debate on the worrying rise of misogyny that many teachers are reporting among pupils in our schools. I think we all recognise that much of the misogyny is not new; perhaps there is scope for a separate debate on the history of sexism and misogyny, but that is certainly a matter for many other days.

Colleagues across the House have already made reference to, and must acknowledge, the role that social media plays in spreading misogyny online for all to see. I echo the comments of the hon. Member for South West Devon about the prominent so-called influencer Andrew Tate. I have made my position on him very clear in previous comments. Having done so, I have now received a barrage of misogynistic, aggressive and sexist messages across a variety of platforms, but that will not deter me. In my role as shadow Minister for the Department for Digital, Culture, Media and Sport, we have recently concluded the Third Reading of the Online Safety Bill, which is a very important piece of legislation. Sadly, I, like the End Violence Against Women Coalition and Glitch the charity, believe that in its current form the Bill will fail to properly protect women and girls online. The systems and business models of many platforms often actively promote such controversial content, which gains significant views and therefore boosts their advertising revenue, but when it comes to keeping people safe now and in future generations, there must be a balance.

Something that I found particularly stark—I am sure this is the case in Plymouth and across the country—is the sheer number of young people I speak to when visiting schools in my constituency who aspire to be like those social media influencers. It is for that reason that we should not underestimate their influence on young people. As we know, the links between misogyny and more traditional forms of violence against women and girls are all too easy to see.

Ultimately, the Government have work to do to reassure young people, their parents, teachers and other trusted professionals that they are taking the issue seriously. While I proudly sat on the Domestic Abuse Public Bill Committee alongside the shadow Minister, my hon. Friend the Member for Birmingham, Yardley (Jess Phillips), it feels as though that piece of legislation is failing to capture the broad range of harms, both obvious and more discreet, that are specific to women and girls. Part of the Government’s approach must be to consider the power and influence that the online sphere can have on the victims’ ability to seek help and in preventing perpetrators from being exposed to damaging material online, or directly fed it through dangerous algorithms. I would welcome the Minister’s thoughts on that point. I hope she will feed back my comments to her colleagues in other Departments. Only with a cross-departmental approach will we truly go some way to tackle violence against women and girls at its root.

16:51

[Kevin Foster (Torbay) (Con)]

It is a pleasure to serve under your chairmanship, Mr Pritchard. I congratulate my longstanding friend, my hon. Friend the Member for South West Devon (Sir Gary Streeter), on securing this debate.

The abduction and murder of Bobbi-Anne McLeod in November 2021 brought the issue of violence against women and girls into focus in Plymouth and across Devon and Cornwall. No one can fail to be impacted by hearing about a woman who simply left home to catch a bus and was subjected to such savagery. That followed an incident only a few months earlier when a man driven by the poisonous ideology of the incel movement shot dead five people in Keyham.

Both incidents brought fear to the streets. They brought to the fore our need to tackle male violence against women and girls, not just in the city of my birth but across our country. I grew up in Plymouth. I was born in Freedom Fields hospital and I attended Hele’s School, first meeting a then councillor and newly selected parliamentary candidate, my hon. Friend, back in March 1992. It was painful to see my home town going through what happened in 2021. But for a short distance, it could have been my own family, who live there, who were affected by one of those incidents.

As a then Home Office Minister, I welcomed the way the city came together to console the bereaved, support the community and resolve to make a difference. It was particularly welcome to see the political unity in that work, which included the city council, the police and crime commissioner and the local Members of Parliament, irrespective of their political party.

As has been said, these issues are not unique to Plymouth. The poison that is the incel movement is infecting too many a mind on social media, and too many women in Torbay have a story of harassment or violence that they could share. That is why it was particularly welcome to see the work of the Plymouth violence against women and girls commission, ably and effectively chaired by Councillor Rebecca Smith, who is well known to many MPs across Devon as a champion of her community in Plymstock and for her work in tackling the issue. The commission produced a report following a process of listening to those affected by violence. Its conclusions represent a welcome list of actions that can be taken to tackle the challenge and make a difference to it. It will therefore particularly interesting to hear the Minister’s thoughts on them, and how they will be embedded as part of the long-term approach, especially the recommendations about a peninsula-wide domestic violence perpetrator strategy.

It is also important to reflect on the approach taken across Devon and Cornwall, which will affect outcomes in Plymouth. Our excellent local police and crime commissioner and Torbay resident, Alison Hernandez, had made tackling violence, including serious violence against women and girls, one of her four priorities in her policing plan. The £4 million serious violence prevention programme, which is part of that, is welcome, as is the investment in victim and perpetrator programmes.

I note that the investment package that the Home Office has provided as part of the £1.1 million safer streets package for Torquay includes a specific element for tackling violence against women and girls by making our town centre safer. That also works alongside community groups, such as Torbay Street Pastors, which specifically work to provide a safe place on the harbourside where people can go in the evenings to wait for a taxi or be picked up by parents, or if they are under the influence and just need somewhere to sit safely.

It is welcome to see some of the progress that has happened, such as the provision of independent sexual violence advisers and independent domestic violence advisers to support victims through the criminal justice system. All too often, offenders and perpetrators rely on the fact that people will not want to go through the whole process, so they can continue their pattern of offending, creating new victims. The events that prompted attention to the issue in Plymouth, along with Devon and Cornwall more widely, were tragic. They showed the outcomes that can happen when poisonous attitudes, such as those of incels, are able to spread and infect minds. Yet they also show the best of how a city and a community can come together and react to such horror by looking to support each other and vowing to make a difference for the future. The people of Plymouth are doing that, and they deserve all our support as they take the work forward.

16:56

[Jim Shannon (Strangford) (DUP)]

I thank the hon. Member for South West Devon (Sir Gary Streeter)—the Member for Plymouth during the 1990s—for setting the scene so well and for leading the debate. It seems that all too often we hear stories in the news about violent, sexual or domestic attacks on women and girls. First of all, we are all here to support the hon. Gentleman. I know that I do not represent Plymouth, but I represent an area in Strangford, Northern Ireland that has, I am sorry to say, the worst levels of attacks on women and girls in all of the United Kingdom—they are horrendous. With great pain, I want to add my support on this issue.

I am of a generation—I suspect you are as well, Mr Pritchard, as well as the hon. Member for South West Devon. You are probably a couple of years younger than me, but I suspect not by very much. We were a generation that had the utmost respect for women. I am from a generation that would open a door for a lady, stand and let her pass by. I am from a generation that would give up a seat for a lady or girl. I am of a generation that respected ladies—that is just me, but I suspect there are many others from my generation who are the same. Social media, as the hon. Member for Pontypridd (Alex Davies-Jones) mentioned, has destroyed the attitude of some young people towards girls and ladies. I find it quite horrendous.

I understand the debate is centred around violence against women and girls in Plymouth, but I want to give the Northern Irish experience where it has proven to be extreme. In 2021, Northern Ireland was named the most dangerous place for women in Europe. Only Romania matches our grim toll across the whole of Europe of 0.43 killings per 100,000 inhabitants, which is three times that of England and Wales. Women and girls in Northern Ireland are disproportionately affected by violence, abuse and intimidation. From April 2021 to March 2022 in Northern Ireland, women made up 78% of all victims of sexual crimes—my goodness, these stats are terrible—68% of domestic abuse, 64% of harassment and 95% of stalking crimes. I know the shadow Minister, the hon. Member for Birmingham, Yardley (Jess Phillips), will speak, and she will know the stats. It is no joy for me to stand here and say that.

Most notably and very recently, we have heard of the news of the murder of Natalie McNally. I give my sincere sympathies to the family for all they are going through. She was a 32-year-old woman from Lurgan who was 15 weeks pregnant with a baby boy. She was stabbed multiple times, losing her life and that of her unborn baby too, sadly, and still nobody has been charged with the murder. There are countless reports of women being abused, assaulted and murdered, and the volume of stories is just unheard of. I deal in my office with cases of domestic abuse every week—society seems to reflect that unfortunately—and we have to deal with cases of verbal and physical abuse as well. The hon. Member for South West Devon and the initiative he is taking in Plymouth are something to stand by.

I understand that organisations and charities in Plymouth have embarked on 16 days of activism to raise awareness of and prevent violence against women and girls, and that a new men’s group aims to ensure that boys and men play their part, too. How much do we need that work in society today, not just in Plymouth but everywhere? Such steps are crucial and they must be taken to give women a voice and reassure them that there is protection for them out there.

There has been a significant rise in the number of cases involving violence against women in the last few years. Historically, that has been because men feel—wrongly—that they can get away with these things, as women are not encouraged to report them. Everyone in this House, including those who are in Westminster Hall today, is here to speak up for women—for ladies—and for girls, and to make it very clear that there are not enough arrests or convictions. The figures are severely lacking.

I conclude by thanking the hon. Member for South West Devon for leading this very important and timely debate. I will take note of the initiative in Plymouth for us back home; it might be something that we can do with as well. I have hope that we, as policymakers in this place, can play our part to raise awareness of these crimes and do more to ensure that women and girls feel comfortable and reassured about coming forward. That is what I am about; I think that is what everybody here is about.

17:00

[Rachel Maclean (Redditch) (Con)]

It is a great honour to follow the hon. Member for Strangford (Jim Shannon).

I thank my hon. Friend the Member for South West Devon (Sir Gary Streeter) for securing the debate, which allows me to give my very strong opinions on this topic on behalf of my constituents in Redditch, as well—of course—to express my sympathy for the victims of the horrendous events in Plymouth. I served as a Minister in the Home Office shortly afterwards and it impacted many of us deeply to see the situation unfolding in Plymouth.

However, what is a real credit to the spirit of Plymouth is the way the city has come together and responded through the practical measures of the commission that my hon. Friend mentioned. Those practical measures are extremely encouraging and a great example for the rest of us across the rest of the country to follow to tackle this pervasive, absolutely pernicious and—sadly—endemic issue.

I would just like to ask the Home Office Minister who is in the Chamber today to respond to a few points. The Home Office has done an extremely good job in responding to the strategy to end violence against women and girls, but I think that we would all be interested to learn a bit more about some of the ongoing work, including how she is pushing it forward and how we can see the measures rolled out to protect more women and girls.

The first issue that I want to highlight is the importance of prevention. Of course we all know the emotional and psychological impacts of crimes of violence against women and girls on the victims. However, there is also the economic impact. Home Office statistics have set out that the costs of violence against women and girls are in the region of £66 billion for the whole economy, although those are quite old figures. I am sure that the Minister knows of more recent ones. It is absolutely vital that we tackle the issue for the sake of our entire economy.

Will the Minister update us on the work that she is leading on prevention? Specifically, I mean the domestic abuse prevention orders and the domestic abuse prevention notices; the electronic tagging, the provisions for which were introduced in the Domestic Abuse Act 2021; the ongoing work on the register of perpetrators to ensure that we monitor and track perpetrators and keep women and girls safe; and any work that she is doing on the mixed picture on stalking prevention orders. We know that some areas are fantastic at rolling these orders out; others are not so good. Many stalkers are being missed and are slipping through the cracks, so we really need to ramp up this work and use these powers to keep these people monitored and keep their victims safe.

Secondly, there is the incel phenomenon. May I bring the House’s attention to the very good work of Laura Bates, who has sone extensive research on that topic? It is a relatively new subject—I say “new”, but I mean in terms of our understanding it and making policy about it. What should the policy response be? Is it right to look at it through the terrorism lens? Should we have a bespoke response? Of course, we know that it is proliferating online. The Online Safety Bill introduces a number of measures to strengthen the response of the online platforms, but is the Minister concerned about the phenomenon and, if she is, what more can she do from a policy perspective so that we really understand why these young men are being radicalised in this way and committing such horrendous acts?

Thirdly, we have done a fantastic job in the Home Office of kicking off the Enough public information campaign, which I know is having an impact across the country. Will the Minister update us on it? Does she plan to roll it out more widely? Does she plan to repeat it? Does she plan to roll out the campaign across the transport network, because we know a lot of crimes of violence against women and girls occur on buses and trains? Can she update us on the Home Office’s work on prevention and what works? We all want to prevent these crimes taking place.

We need to understand the psychology of perpetrators, who are mostly men, although some women commit such crimes. We know there are interventions that work and, thankfully, prevent lives being lost and trauma inflicted on women and girls. We need to understand that. If the interventions work, we need to roll them out widely, so that every area knows what to introduce and what is right for their area.

My hon. Friend the Member for South West Devon set out some good interventions that are clearly working in his area, but we need to gather that data so that every single local authority has no excuse but to come to the Home Office and ask for funding if needed. That funding should be available so that local authorities can roll it out and know that it will make a difference.

Finally, will the Minister update us on the strategic policing requirement, which was a commitment that we in the Home Office made on the back of the Policing, Crime, Sentencing and Courts Act 2022? A lot of work has gone on in the Home Office, and it is important to bring together strategic law enforcement at a national level, so that police forces are working and know what to do, so that we can tackle this and keep more women and girls safe.

17:06

[Paul Bristow (Peterborough) (Con)]

It is a pleasure to serve under your chairmanship, Mr Pritchard. I congratulate my hon. Friend the Member for South West Devon (Sir Gary Streeter) on securing this important debate. The other person I would like to thank is Eva Woods, the youth MP for Peterborough. I thank her for briefing me fully on this issue and contributing to my speech.

As has been said by other hon. Members, violence against women and girls is not just limited to Plymouth, but it is inspiring to hear of the good work that is going on in Devon and Plymouth. It is inspiring me to think about what I can do in my city of Peterborough, working with Eva and others. Unfortunately, violence against women and girls is widespread across the country, and Peterborough is not immune.

Sexual harassment in schools and colleges was pointed out in the 2022 UK Youth Parliament elections as the top concern of Peterborough’s young people. Eva received the testimonies of women and girls in the constituency’s schools who, on a daily basis, received sexualised comments and contacts intended to humiliate, intimidate and control. Across the UK, controlling women through such behaviour is rife, and it is visible in Peterborough. One of the biggest employers of young people is the service industry, a sector in which an enormous proportion of the female staff report intimidation by customers and even employers.

In public spaces, including Central Park in my constituency, women and girls report feeling unwelcome and unsafe as soon as darkness falls. It is saddening that incident figures from the police do not always correspond to the levels of threat that constituents have reported directly to Eva. Frequently, victims do not even feel supported to report their experiences, through fear of seeing no consequences to their aggressor, or simply thinking that their experience of violence is so minor that it is not worth police time. We need an emergency response to sexual harassment in schools and places of education. It should be the duty of every Member to make clear that a culture of violence, intimidation and control of women is not tolerated in their constituencies.

The example of Plymouth has inspired me to do something similar in my city. In fact, I already have two councillors in mind, and I texted them during the debate to see whether they would get involved and chair a similar commission to the one in Plymouth. I know that those councillors, working with me and our youth MP, can make a real difference in a place such as Peterborough.

17:09

[Jess Phillips (Birmingham, Yardley) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Pritchard. I know we are quite tight for time. I want to show massive respect to the hon. Member for South West Devon (Sir Gary Streeter) and all those who he represented who are working collaboratively in Plymouth. He said that doing that was one of the commission’s recommendations. I have to say, given the kind of reports that get written, it is a delight to hear in this building of a recommendation actually being fulfilled. It was good to hear that this place needed to be involved.

There are many brilliant organisations in Plymouth, but I want to pay specific tribute to one that I mention very regularly when I talk about violence against women and girls general: Trevi House, which is one of only two places in the entire country where women can go with their children into substance misuse rehabilitation. I cannot express how important it is that that exists. Indeed, it is to our country’s shame that there are really only two, or possibly three, places in the country where that is available, because it is hugely important to preventing what the hon. Member for Redditch (Rachel Maclean) talked about. I know that the right hon. Member for Plymouth, Moor View (Johnny Mercer) and his wife are heavily involved with Trevi; Plymouth should be really proud of that jewel in the crown.

That said, in recent years we have obviously seen some devastating cases of violence. Others have talked about the heartbreaking murder of Bobbi-Anne, whose family described her as

“a beautiful girl who lit up our lives”

and whose death meant that their

“lives will never be the same”.

The inquest into the deaths of Stephen Washington, Kate Shepherd, Maxine Davison, Lee Martyn and three-year-old Sophie Martyn continues as we speak, so it would not be right to go into that too much. However, incel ideology—which was mentioned by my hon. Friend the Member for Pontypridd (Alex Davies-Jones) and others, including the hon. Member for South West Devon, who made a very strong and actually progressive case in that area—was undoubtedly involved in that particular case.

It is absolutely lovely to hear the fervour and the care that Plymouth has taken, but I am afraid to say that it will only ever be able to go so far on its own merit while it, like everywhere else in the country, relies on the infrastructure built for victims of violence—[Interruption.]

[Mark Pritchard (in the Chair)]

Order. There is a Division in the House, so I am suspending the sitting. There may be more than one vote. For the first vote we will suspend for a maximum of 15 minutes and then for 10 minutes thereafter, but I will continue once the mover of the motion and the two Front Benchers are here, so hon. Members should please be as quick as possible.

17:12

Sitting suspended for Divisions in the House.

17:49

On resuming—

[Jess Phillips]

As I was saying, Plymouth, like other places in the country, relies on the national infrastructure.

I wish to ask the Government a few questions. Last year, the Government committed to making violence against women and girls a national policing priority, as the hon. Member for Redditch said, yet here we are, nine months later, and it has been reported that nothing has happened. Will the Government confirm that nine months after Ministers announced it, they have not yet made prioritising violence against women and girls a strategic policing requirement?

I could talk about what has happened in the past nine months, but I do not even need to stretch to then—I will just go back over the past few weeks. Yesterday, we heard that a man with a history of violence was able to sexually assault and murder law graduate Zara Aleena after mistakes were made by probation staff. The chief inspector of probation, Justin Russell, found that McSweeney had been wrongly assessed as medium risk by staff who were under “mounting pressure”. Mr Russell claimed:

“In this particular case we found a very heavily overloaded senior probation officer supervising a probation officer who had 50% more workload than they should have had.”

I could go on. This week, the latest domestic abuse stats from the Crown Prosecution Service show a crisis once more, I am afraid to say. From 2022, prosecutions are down 9.6%, while convictions are down 9%. Convictions in the latest quarter were just 9,587; in the same quarter in 2019, there were 12,467 convictions. That is a 23% fall. In 2019, there were 16,257 completed prosecutions; today, that figure is 12,672. That is down 22%. Those disgracefully low statistics demonstrate the Government’s failure to act, meaning that victims are kept in danger and perpetrators are left in our communities, in our homes and on our streets.

I am sure we will all have seen the media reports about the police over the past few weeks. The Met alone is investigating 1,000 domestic or sexual abuse claims involving 800 of its officers. Last year, the Centre for Women’s Justice super-complaint against the Met found significant inconsistencies in how cases of domestic abuse perpetrated by police were dealt with. The Home Office is responsible for the police. That is where the buck stops. Why are police officers accused of rape or domestic abuse not immediately suspended, as Labour is urging for? The public are astounded that this is not the case already.

Where is the promised domestic homicide sentencing review of the deaths of women, like the women killed in Plymouth? We are a year in the waiting. Where is the harms report from the family court review? Again, we are more than two years in the waiting. Where is the perpetrator strategy? Charge rates for rape have dropped to a shameful 1.5%—a drop of two thirds over the past seven years. Where is the action?

Plymouth has shown grit and joined-up thinking. I would like to see the same from this place.

17:54

[The Parliamentary Under-Secretary of State for the Home Department (Miss Sarah Dines)]

It is a pleasure to serve under your chairmanship, Mr Pritchard.

I thank my hon. Friend the Member for South West Devon (Sir Gary Streeter) for bringing forward this debate on such an important issue, for highlighting the work of the Plymouth Violence Against Women and Girls Commission and for sharing the learning of the commission, to which I pay tribute for its work. I also thank those who made considerable journeys to come here, such as Councillor Rebecca Smith and Eva Woods, who has come from Peterborough. Much work is done on a community level, and that is very much how this issue will move forward.

Work in this sphere starts at the community and is also led at a national level. There is personal responsibility, too. It is only with all the sectors working together that fundamental change will be achieved. It is not just from the centre down; the things that work work with the community and individuals grappling those issues. I pay tribute to those locally elected people and those working very hard in Plymouth, as well as the Members who have always worked very hard in this place.

I reiterate at the outset how important tackling violence against women and girls is to me and to this Government. Indeed, the Prime Minister made that clear in his new year speech this month. We need a change of culture, and that is what this Government are doing. Successive Governments have failed to grip the issue, and I am pleased that this Government are gripping it.

The David Carrick case has underscored yet again why this work is critical. It is a horrific set of circumstances. It is tragic and dreadful, but I welcome the opportunity to use it to move forward. I echo the Home Secretary’s words of tribute to victims for their extraordinary strength and courage in coming forward. We must not only deal with perpetrators but encourage victims and survivors to come forward—with an onus on the perpetrators, but listening to the victims. For the victims to have suffered as they did at the hands of a police officer is almost unthinkable, and my thoughts are with them.

I express my deepest sympathies to the family and friends of Bobbi-Anne McLeod, whose life was so tragically cut short. What happened has understandably shocked us all, but particularly those in the community of Plymouth. It is shocking to the core. Whether in Plymouth or anywhere else around the country, we must use every tool at our disposal to ensure that law-abiding people can feel safe both inside and outside the home. That is a major priority for me and the Government as a whole.

Several Members raised the Keyham shooting. The inquest into those tragic events began just last week, so it is inappropriate for me to say anything other than that my thoughts and deepest sympathies remain with everyone involved in that matter.

I pay tribute to my hon. Friend the Member for South West Devon for bringing forward the debate and to all those people who have worked alongside him on this quite lengthy journey. It is a good cross-party piece of work, and change in society works only if it is from the grassroots up. It is encouraging to see cross-party work at that level. The words that resonated with me were:

“We are all in this together.”

Those were well-thought words, and I thank him for them.

The Trevi organisation and First Light were also mentioned. In my previous job, I had dealings with Trevi, and I travelled down to visit the area. I have always been immensely impressed with the organisation. It is just the sort of organisation that needs support. The hon. Member for Birmingham, Yardley (Jess Phillips), speaking for the Opposition, also rightly raised it. I pay tribute to it for its work.

My hon. Friend the Member for South West Devon was absolutely right that we need cultural change. These issues are deeply rooted in our society. We also need better support. The recommendations of the commission rang very true. The work of the Safer Plymouth Partnership, Moonstone and Operation Gemstone are all important, and I pay tribute to them for their work. It is an issue for us all—that is quite right. The violence against women and girls strategy and the domestic abuse work are fundamental, and I am pleased that more than 50 organisations around the city are delivering work on the issue.

My hon. Friend asked about additional funding and concerns that small groups are finding it difficult to access funds. That is exactly why the Home Office, with a lot of careful thought, is providing for consortia applications, so that those with expertise can assist those with lesser expertise to move in the right direction to secure funding. We need cultural change, as the comments of my hon. Friend the Member for Redditch (Rachel Maclean) reflected.

In relation to understanding why these things happen, the Home Office has undertaken a lot of research. In relation to the amount of research generally that is engaged, I am genuinely flabbergasted at the effort, expense and thought that has gone into policy making in the Department. I know that my hon. Friend the Member for Redditch has witnessed that.

As my hon. Friend the Member for South West Devon said, we need to be a clear voice talking to the deeper causes of what happened. The Online Safety Bill will be amended in the Lords to reflect even greater concerns than when it first appeared before the House of Commons Chamber. The amendment will further strengthen it. It is a seminal piece of legislation and I am proud that it is this Government that is bringing it through. I do not accept the narrative that it is in any way inadequate. Legislation in this place rightly evolves and moves forward. That is why we have the House of Lords and the amendment process.

I thank the hon. Member for Pontypridd (Alex Davies-Jones) for her contribution. She mentioned physical violence and coercive control, and that is at the heart of her work as chair of the APPG on perpetrators of domestic abuse. The Government are rightly shifting their focus to perpetrators, and a lot of money is being spent by the police as well as with stakeholders to ensure that work bears fruit. Historically, there has been an emphasis on the victim. We know that from offences such as rape and all forms of violence against women and girls, and against men. We want to shift the focus from victims to perpetrators. We must change societal attitudes and stop misogyny. I agree with her on that, but I do think that the Online Safety Bill is groundbreaking and will be improved.

This Government introduced the Domestic Abuse Act 2021, which the hon. Lady mentioned. I do not accept that it has failed to catch online harms. There will be a focus on using industry to assist in this policy area.

My hon. Friend the Member for Torbay (Kevin Foster) made a valuable contribution. The death of Bobbi-Anne McLeod was fundamental in bringing about local change. I am grateful for my hon. Friend’s interventions; he mentioned the local police and crime commissioner, Alison Hernandez, and the work that she does. The work done in the south-west on Operation Soteria has been groundbreaking. All these things come together. There will be a moment when there will be change and I think Plymouth is fundamental to that change.

The hon. Member for Strangford (Jim Shannon) reminded us of the dreadful situation in a part of our country and a part of the Union, Northern Ireland, and the very sad case of the lady who was attacked when pregnant, resulting in her death and the death of her unborn child. That is tragic. That is why we need a strong process in relation to violence against women and girls.

I do not need to go back to the great work that my hon. Friend the Member for Redditch did when she was in the job that I now have. She raised some important questions and wanted answers to them. In relation to the register, we are looking at the options. In relation to the specialist orders—the domestic abuse protection orders—we are continuing to work very hard in policy development. I have witnessed that for myself. We are finalising pilot sites, so there is progress in this policy area.

In relation to prevention, my hon. Friend is bang on—to use a colloquialism. The new statutory guidance on relationships, sex and health education is being changed and improved, and my personal view is that there needs to be better training and better education. If we want to change things, we have to get people while they are young, thinking about life and growing up, so I would like to see more work in that space. That is being done with the guidance to be taught in schools.

On transport champions, which several Members mentioned, I recently had the opportunity to speak to the British Transport police. We have appointed transport champions, who have given a set of recommendations that the Government are considering.

[Jess Phillips]

As the hon. Member for Redditch (Rachel Maclean) asked, what is happening with the strategic policing requirement? I note that the Minister has not answered that question, which both I and the hon. Member for Redditch asked.

[Miss Dines]

That is being actively worked on. Violence against women and girls will be added in due course, and if I have anything to do with it, it will be sooner rather than later. It was on my list of questions to get to.

I want to try to mention everyone, because everyone who has contributed to the debate has worked hard in the subject area and I want to acknowledge them all. When there is cross-party work, things really work.

Why do young men become radicalised? I suggest that one of the items in that complex picture is the platform that the internet has given young men to express their feelings without having to go out to meet people. There are lots of psychological reasons for that, and research is being commissioned.

I mentioned the strategic policing requirement, in respect of which a lot of work is being done. The police have to be part of this story, so I am pleased with the work of Maggie Blyth in progressing us forward. My hon. Friend the Member for Peterborough (Paul Bristow), and Eva Woods as the Member of Youth Parliament for Peterborough, are very much an illustration of how this work can multiply across the whole nation. The Government can do their best to steer changes and pass laws, but fundamental change comes from individuals and communities. I am proud of the work that my hon. Friend is doing in Peterborough.

The Opposition spokesperson, the hon. Member for Birmingham, Yardley, has worked very hard on this issue. She rightly talked about the work of Trevi House and said that it is lovely to hear what Plymouth is doing, and I could not agree more. Statistics for convictions are simply not good enough. Successive Governments have had difficulties, and I support the work of the deputy Prime Minister and the Home Secretary to create movement in this policy area. The increase in police officers is a start, but we need the whole culture to change.

I would say much more if I had time, but let me say that the Government do not lack any commitment on this issue. We are committed to tackling violence against women and girls—and boys—which is why we published the cross-Government strategy on tackling violence against women and girls in 2021. It must not be forgotten that £230 million is being spent on the tackling domestic abuse plan, which we published last year. That is groundbreaking, and more than any previous Government have spent. We have made significant progress in pushing out a variety of ways to spend that money. Just one example is the “Enough” communications campaign. It was groundbreaking: almost half a million people engaged with it. It shows a need for change, and that change will happen.

To sum up, much work is being done in Plymouth. The Government are supporting that work by awarding significant amounts of money to the Devon and Cornwall police and crime commissioner. Through the police uplift programme, Devon and Cornwall police have an additional 313 officers. The University of Plymouth has been awarded £670,000 for direct work to make the streets safe. There are now local CCTV vans. There is local educational provision and training, and there is the “safe spaces Plymouth” initiative. I could say much more if I had time. In general, the Government and I are committed. I thank every person who contributed to the debate.

18:07

[Sir Gary Streeter]

I thank the Minister for her response and thank everyone who contributed to the debate. It is worth sharing that when the three local Members of Parliament had a briefing—which was done individually by Zoom—on the killing of Bobbi-Anne McLeod, after 15 minutes I had to ask the police officers to stop. I just could not take any more. Maybe it is because I am a grandfather of two beautiful girls; I do not know, but that is what we are talking about here. We are talking about a beautiful young life, snatched away by someone who was influenced by the internet.

There is no politics in this: we are all in this together. I am so pleased that Plymouth has put in place the commissioner and is leading the way. I hope that other parts of the country will follow. I will say one thing to the hon. Member for Strangford (Jim Shannon), who we are so fond of. He said that perhaps attitudes 30 or 40 years ago among our generation—we are the same age, more or less—were different. I am not sure about that. We are the Jimmy Savile generation. We are the Rolf Harris generation. So much was hidden. At least now it is out in the open, but we still have to deal with it. We have a long journey ahead, so we just have to commit ourselves to this task.

Question put and agreed to.

Resolved,

That this House has considered the matter of violence against women and girls in Plymouth.

18:08

Sitting adjourned.

Written Statements

Wednesday 25th January 2023 Written Statements

Wednesday 25 January 2023

Covid-19: 2023 Vaccination Programme

Wednesday 25th January 2023 Written Statements

[The Parliamentary Under-Secretary of State for Health and Social Care (Maria Caulfield)]

Since the first covid-19 vaccine was authorised for use in the UK in December 2020, the aim of the covid-19 vaccination programme has been, and continues to be, the reduction of severe disease—hospitalisation and mortality—across the population, while protecting the NHS.

The independent Joint Committee on Vaccination And Immunisation (JCVI) has provided interim advice on the 2023 covid-19 vaccination programme for planning purposes.

The JCVI’s interim advice is that:

In autumn 2023, persons at higher risk of severe covid-19 would be offered a booster vaccine dose in preparation for winter 2023-24;

in addition, for a smaller group of persons (such as persons of older age and those who are immunosuppressed) an extra booster vaccine dose may be offered in spring 2023;

emergency surge vaccine responses may be required should a novel variant of concern emerge with clinically significant biological differences compared to the omicron variant.

The JCVI has also provided advice on the ongoing offer of initial covid-19 vaccination—primary course—and 2021 booster dose offers—third dose. As the transition continues away from a pandemic emergency response towards pandemic recovery, the JCVI considers that the risk of severe covid-19 continues to be disproportionately greater in those from older age groups, residents in care homes for older adults and for persons with certain underlying health conditions.

The JCVI’s advice is that:

The 2021 booster offer (third dose) for persons aged 16 to 49 years who are not in a clinical risk group should end in alignment with the close of the autumn 2022 vaccination campaign;

otherwise healthy persons aged 5 to 49 years, who develop a new health condition in 2023 that places them in a clinical risk group would be offered primary vaccination and/or a booster vaccine during the next seasonal vaccination campaign, as appropriate. Vaccination outside these campaign periods would be subject to individual clinical judgement;

primary course (initial doses) of covid-19 vaccination should move, over the course of 2023, towards a more targeted offer during vaccination campaigns to protect those persons at higher risk of severe covid-19; this would include:

residents in a care home for older adults and staff working in care homes for older adults

frontline health and social care workers

all adults aged 50 years and over

persons aged 5 to 49 years in a clinical risk group

persons aged 12 to 49 years who are household contacts of people with immunosuppression

persons aged 16 to 49 years who are carers

research should be considered to inform the optimal timing of booster vaccinations to protect against severe covid-19 (hospitalisations and death) for groups who are at different levels of clinical risk.

His Majesty’s Government have accepted the JCVI’s advice. In England, the 2021 booster offer—third dose—for persons aged 16 to 49 years who are not in a clinical risk group will end in alignment with the close of the autumn 2022 campaign in England on 12 February 2023. The JCVI’s advice to target the initial vaccination—primary course— offer to those at higher risk from covid-19 has been accepted by HMG subject to further consideration of timings.

I am informed that all four parts of the UK intend to accept the JCVI’s advice on the same basis.

I will update the House when further advice is received from the JCVI on the covid-19 vaccination programmes recommended for 2023, including confirmation of whether a spring booster programme is advised.

[HCWS518]

DLUHC: Foundations for Growth

Wednesday 25th January 2023 Written Statements

[The Secretary of State for Levelling Up, Housing and Communities (Michael Gove)]

One of the Prime Minister’s top priorities is growing the economy, spreading opportunity right across the country. Levelling up is central to that mission. Today I am delighted to update the House on further progress being made to deliver the right foundations for growth through increased innovation, strong local leadership, and pride in place for communities.

First, on investment zones. This country has no shortage of growth industries, whether in advanced manufacturing, renewable industries or life sciences. And we have no shortage of world-class universities. But where we have underperformed is leveraging the success of these industries and research to support growth across the whole country. That is my guiding mission for investment zones. We will shortly begin a process to identify where zones will be located, guided by three principles. First, that Government cannot create clusters, but it can create the conditions for them to succeed. Secondly, success requires fiscal support, but also a wider range of interventions, whether land assembly, housing, transport, or skills, to tackle the specific barriers each cluster faces to growth. And thirdly, that can only happen in partnership with strong local leadership over the long-term.

Secondly, on nationally significant infrastructure projects. Working with BEIS, DEFRA, DFT and HMT we are modernising the approach to major projects and we will shortly publish an action plan setting out reforms to the nationally significant infrastructure projects regime that will streamline and speed up the consenting process. These important reforms will boost investor confidence in major infrastructure and help Government to improve energy security, achieve net zero and deliver the transport connectivity, water and waste management facilities this country needs.

Thirdly, on backing local leadership to regenerate their local areas. I am today announcing that I will shortly lay before Parliament secondary legislation setting up two new mayoral development corporations in Tees valley. These will drive a major regeneration of Hartlepool and Middlesbrough town centres and attract businesses and people back to these centres, making them vibrant, safe, and pleasant places in which to live and work. We are also in talks with both Greater Manchester and the West Midlands to strengthen the hands of both Mayors. We are exploring options to devolve more power, including in areas such as housing, to these combined authorities. Further details will be set out in the trailblazer devolution deals that will be published in due course. Alongside this, as part of our national reforms to ensure that all homes are free from the types of poor conditions and hazards that led to the tragic death of Awaab Ishak, I am today announcing £30 million to support the Mayors of Greater Manchester and the West Midlands combined authorities to support improvements in the quality of social housing in their areas.

Fourthly, as we take steps to devolve more power to local leaders we are also backing this with clear accountability. We announced in the levelling up White Paper that we would establish a new Office for Local Government (Oflog), which will empower citizens to hold local leaders to account, while supporting local leaders to innovate and drive self-improvement. I am pleased to announce that I have appointed Lord (Amyas) Morse to the position of interim chair of the Office for Local Government. Lord Morse brings to the role a wealth of experience in public sector service delivery and performance, and will provide independent advice, support and challenge to Oflog’s strategic vision, functions and delivery. My Department will shortly recruit for a new chief executive for this important body.

Fifthly, to level up truly we must also ensure that people feel safe in their communities. We know that this is a real priority for our communities who want strong, practical action to tackle crime and anti-social behaviour. Graffiti, vandalism, disorder and evidence of drug use makes daily life a misery. Indeed, for many, tackling this blight is a prerequisite to levelling up. This requires a multifaceted response. Working with the Home Office, the Department for Education and the Ministry of Justice, we will shortly announce plans that will deliver for communities, giving them the confidence that the places they love can and will be protected and enhanced.

[HCWS519]

Grand Committee

Wednesday 25th January 2023 Grand Committee

Wednesday 25 January 2023

16:15

Arrangement of Business

Wednesday 25th January 2023 Grand Committee

Announcement

16:15

[The Deputy Chairman of Committees (Baroness Fookes) (Con)]

My Lords, if there is a Division in the Chamber, the Committee will adjourn for 10 minutes.

Financial Services and Markets Bill

Committee stage
Wednesday 25th January 2023 Grand Committee

Committee (1st Day)

Relevant document: 23rd Report from the Delegated Powers Committee

16:15

Clause 1: Revocation of retained EU law relating to financial services and markets

Amendment 1

Moved by

[Lord Sharkey]

1: Clause 1, page 1, line 6, leave out subsection (1) and insert—
“(1) The Treasury may by regulations revoke any legislation referred to in Schedule 1 provided that—(a) the regulators have drafted and, where necessary, consulted on rules that are ready to be enforced, where it is appropriate, to replace the legislation, and(b) any such revocation or replacement which represents a significant divergence from current rules or practice has had the opportunity to be scrutinised by the relevant Parliamentary select committee and the views and recommendations of that committee or those committees have been taken into account.”Member’s explanatory statement
This is a probing amendment to allow debate on possible means of Parliamentary scrutiny of the changes generated by the implementation of Clause 1 and Schedule 1.

[Lord Sharkey (LD)]

My Lords, the purpose of the amendment is to allow debate on the possible means of parliamentary scrutiny of the many legislative changes that will be brought about by the implementation of Clause 1 and Schedule 1.

The question of meaningful parliamentary scrutiny was frequently mentioned in all parts of the House at Second Reading. There seemed to be consensus that there is nothing in the Bill that would enable proper scrutiny of the changes proposed by the Bill. The whole wider question of parliamentary scrutiny was debated at length in the Chamber on 12 January. That debate was on the report from the DPRRC called Democracy Denied? and the report from the SLSC called Government by Diktat. The titles of the reports accurately represent their urgent concerns.

The debate was led by the noble Lords, Lord Blencathra and Lord Hodgson of Astley Abbotts, the respective chairmen of the Select Committees. There were 35 speakers, 34 of whom were sympathetic to the notion that our system of dealing with delegation is defective and does not provide effective scrutiny. Regrettably, there is plenty of evidence that that is the case, and much of it is presented vividly in those two reports. There is also plenty of evidence to support the view that Governments try, when they can, to bypass real parliamentary scrutiny, and plenty of evidence that the balance of power between Parliament and the Executive has been shifting in favour of the Executive.

I noted at Second Reading, as did the noble Lord, Lord Hodgson, that the Bill seems likely to generate more than 250 pieces of secondary legislation or binding rules. That might seem like a lot, but, in reality, it is just a very small and very important subset of the estimated 4,000 pieces of legislation to be revoked, amended or substituted in the Retained EU Law (Revocation and Reform) Bill, and it may be more than that if the National Archives find any more down the back of their sofa, in addition to the 1,300 which the Government have already overlooked. The scales of 250 to the retained EU law Bill’s 4,000 plus may be very different, but the underlying problem is exactly the same: how can parliamentary scrutiny be effectively and proportionately applied to those proposed legislative changes?

As things stand, the Bill provides that some of the proposed changes will be subject to the negative procedure and some to the affirmative procedure; for others, it is not clear whether they will be subject to any procedure at all. In practice, that amounts to no parliamentary scrutiny at all. The negative SI procedure is not scrutiny of any kind, nor is the affirmative procedure. If SIs cannot be amended and are not voted down, they are not scrutiny. In reality, our SI procedures are legislative theatre. Our recent debates and comments at Second Reading have shown a strong feeling across the House that, as a means of scrutiny, our current SI procedures are simply not fit for purpose. It does not help to have the Government insisting, as I am certain the Minister will, that they do in fact provide meaningful scrutiny. I am equally certain that she will not provide us with any evidence that that is the case.

The amendment suggests a way of achieving a modest amount of parliamentary scrutiny over the regulation-making powers in the Bill. The first part of the amendment simply places in the Bill the exact text of an important commitment made by the Treasury in paragraph 16 of its memorandum to the DPRRC. It says that, as a condition of the Treasury’s power to revoke, the regulators must

“have drafted and, where necessary, consulted on rules that are ready to be enforced, where it is appropriate, to replace the legislation”,

and so on. I am not certain of the force of a Treasury commitment made in a memorandum to a parliamentary committee, and that is one reason why I think it should be in the Bill: to put beyond doubt that the commitment is legally binding.

However, there is another reason for inserting the memorandum text: that is, to be able to ask the Government what the tests are for “necessary” and for “appropriate”, who decides, and how, whether the tests have been satisfied, and how much of this will be transparent. Without such detail, the commitment may be completely meaningless. I would be grateful if the Minister could address those points when she replies.

The second part of the amendment says that before the Treasury can, by regulation, revoke any legislation in Schedule 1:

“any such revocation or replacement which represents a significant divergence from current rules or practice has had the opportunity to be scrutinised by the relevant Parliamentary select committee and the views and recommendations of that committee or those committees have been taken into account.”

That is a rather broad-stroke first attempt at triage and at inserting a scrutiny mechanism. It is intended to identify a subset of changes that represent significant alterations in policy or practice and to provide the opportunity for the relevant committees to scrutinise these if they choose and to require the Treasury to take into account any views or recommendations expressed by the committees. The word “significant” is obviously key. We will need some specified tests for significance or perhaps leave it to the discretion of the relevant committees to decide for themselves. The amendment is not prescriptive about what form any committee scrutiny might take; that seems best left to the committees themselves.

I am sure that debate will generate improvements on Report or entirely different and better methods of ensuring that Parliament can play a meaningful scrutiny role with respect to the provisions in the Bill and perhaps make a contribution to addressing the similar but numerically much larger problem presented by the Retained EU Law (Revocation and Reform) Bill.

I conclude as I did at Second Reading by saying that the structure of our financial services regime is far too important to be left to the Treasury and the regulators alone. Real parliamentary scrutiny is vital, but it is entirely absent from the Bill. I look forward to hearing the contributions of other noble Lords. I beg to move.

[Baroness Noakes (Con)]

My Lords, as this is the first day of Committee, I declare my interests as recorded in the register, in particular that I hold shares in listed financial services companies. I will not comment on the government amendments in this group; I am taking those on trust.

I share the desire of the noble Lord, Lord Sharkey, for Parliament to be involved in the new rules that will replace retained EU law, but this is part of the larger issue of how there will be parliamentary accountability of the regulators. A number of us have tabled amendments of slightly different varieties on how to achieve that in the Bill. I for one will not contribute to that issue in this debate, because it is better saved until the various mechanisms that some of us have proposed are debated later in Committee.

I have two amendments in this group: Amendments 244 and 245. At Second Reading I acknowledged that the replacement of retained EU law on financial services would take some time, but I felt that the process needed the discipline of a hard stop along the lines of the Retained EU Law (Revocation and Reform) Bill. I have not copied that Bill, with its deadline of the end of this year, but I have instead proposed one three years later: that is, on 31 December 2026.

That will doubtless disappoint some hardliners among my Brexiteer colleagues, but I see that as a pragmatic compromise between getting the issue fixed and letting the regulators do a proper job in turning EU rules into something that works for the UK or indeed, whenever possible, removing the rules entirely.

I am not convinced that, left to themselves, the FCA and the PRA will prioritise the task of dealing with the full corpus of retained EU law, especially once the first batch of relatively easy issues has been dealt with. A deadline is a simple device in order to incentivise them to get on with it or risk losing the related law entirely.

If my noble friend resists the notion of a statutory deadline, even though it is government policy for retained EU law generally, perhaps she will explain what sticks and carrots the Treasury has at its disposal to get the job done within a reasonable timeframe. I do not think it reasonable to have this large body of EU law left in limbo for any considerable period of time.

[Viscount Trenchard (Con)]

My Lords, I share the views of the noble Lord, Lord Sharkey, to a large extent, but I agree with my noble friend Lady Noakes that the question of parliamentary scrutiny is better dealt with when we come to that part of the Bill to which her amendments are tabled.

I declare my interest as a director of two investment companies, as stated in the register. On the whole, I welcome the Government’s amendments in this group and look forward to hearing my noble friend the Minister explain them. Insofar as they increase the powers of the regulators, I welcome the improved clarity and transparency, but we need to improve the method of scrutiny and degree of regulators’ accountability to Parliament, as I have said.

I support my noble friend Lady Noakes in her Amendments 244 and 245. While the task of reviewing, revoking and replacing retained EU financial services law is monumental, it is important that there be a time limit to this process. Ideally, it should be completed this year, because more than four years have passed since the passage of the withdrawal Act and more than two years since the end of the transition period. We have not acted as fast as we should perhaps have done in moving to exploit the opportunities available to make bold moves away from the cumbersome, expensive and anti-competitive regulatory regime that has progressively constrained the competitiveness of the City of London and its innate ability to innovate. There has been some inbuilt resistance to making any changes, and I am glad that this Bill takes some significant steps in that direction.

I would have preferred the Bill to be more radical and to require that certain EU regulations automatically be repealed without replacement, such as the whole regime around the alternative investment fund managers directive and its subordinate legislation. That directive was opposed by the whole City establishment and has served merely to divert new and innovative fund managers wishing to launch new products for professional investors away from the City to other jurisdictions. However, too little work has yet been done, and I think that my noble friend’s suggested latest revocation date of 2026 is a reasonable compromise. I look forward to discussing that later, and I hope the Government will accept my noble friend’s two amendments.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I want to lend some support to the noble Lord, Lord Sharkey, for raising the issue of parliamentary scrutiny in relation to this clause and Schedule 1. Clause 1 and Schedule 1 are an extraordinary exercise in executive powers through regulations and the regulators. In a later debate some days down the line, we are coming on to that issue, but it is appropriate that we start this debate with a reminder to the Minister that the issue of parliamentary scrutiny is very important.

I just want to reflect on what the noble Lord, Lord Sharkey, said about regulations. The Minister will no doubt pray in aid the fact that Parliament has processes for dealing with regulations. In your Lordships’ House, praying against a negative SI leads to an affirmative debate, unlike in the other place, and we debate it in full—but to what end? I have tabled a Motion today in the Chamber relating to an affirmative Motion on a completely different issue, data use in the NHS. I have no doubt that we will have a very good debate, but the Government will just plough on without having to take account of any debate that has taken place.

16:30

We know we have a problem with SIs because the Parliament Act 1911 did not embrace secondary legislation—partly because secondary legislation was not used very much at all then—which means we have an absolute veto that, because it is absolute, we use very rarely indeed. A few years ago now, when the noble Baroness, Lady Meacher, developed the concept of a Motion that said the SI on working family tax credits could not come in for some months, until the Government had taken some action—and which your Lordships passed—the Government took great umbrage, although that was not strictly a veto. Indeed, I remember that the then Chancellor threatened the House of Lords with abolition because of its temerity in voting through the Motion from the noble Baroness.

The ultimate point here is that in the Bill there is a plethora of regulations that we will be asked to agree to in order to give Ministers essentially executive power and, at the end of the day, all we as a Chamber can do is raise questions but accept that the Government will always get their way. In that sense, the noble Lord, Lord Sharkey, has done us a great service in opening our debates on such an important issue.

[Baroness Altmann (Con)]

My Lords, I too congratulate the noble Lord, Lord Sharkey, on his amendment. I agree with his explanation of why parliamentary scrutiny is so important and his interesting explanation of the choice of words he has used in his amendment. I accept that later on, as my noble friend Lady Noakes said, we will debate parliamentary scrutiny once again, but in my view it is absolutely vital that we in this House recognise the dangers coming at us from various legislation that is taking away Parliament’s future ability to oversee and scrutinise important legislation.

I also understand what my noble friend Lord Trenchard said about the importance of allowing competition. However, we must not lose sight of the fact that what is sometimes called regulation may of course be inconvenient for the financial services providers and hamper the ability for innovation and free-for-alls to try different things, but it is also relevant to think of regulation as consumer protection. These are rules that will stop financial services companies taking advantage of consumers.

Asymmetry of information in financial matters is obviously something we are all too aware of, but just doing away with regulation, rushing to get rid of all the EU regulations without proper scrutiny and saying that the Financial Conduct Authority must work to a deadline, otherwise it will drag its heels, misses the point. If there is a forced deadline that precludes scrutiny and consideration of what these regulatory changes will mean for the general public or even more informed investors, without considering those risks, one has to ask whether it is resourced enough to do that. If not, which most of us would probably suggest is the case, what other elements of its duties will not be attended to while it is rushing to perform this job to an artificial deadline? It is a massive task—I respect that.

We need to take seriously the thrust of the remarks by the noble Lord, Lord Sharkey. I also look forward to hearing my noble friend’s remarks about the Government’s own amendments.

[Lord Naseby (Con)]

My Lords, I was one of the 34 who took part in the debate on secondary legislation, and I previously had the privilege of being on the Public Accounts Committee for some 12 years.

The debate on those two reports was an absolute watershed. Here is a golden opportunity to ensure that this Bill, which is so fundamental to the growth of our country, particularly the City of London, at a particular time can be pioneering. I am sorry to load that on to my noble friend; at any other time it might not be loaded on to her.

The key elements are there: secondary legislation basically means that those of us here in Parliament, in both Houses, have an opportunity to debate any changes made to a Bill. If I had to take issue with the noble Lord, Lord Sharkey, it is that he has in his amendment, at proposed new paragraph (b), the word “significant”. One company’s “significant” might be insignificant to another, and vice versa, so I do not think that is quite the right word to use.

We will go through this Bill in detail. Others have made their points, but for me—I did previous work with two quoted companies and a friendly society in the role of chairman—this is an opportunity. We must recognise that growth for our country is fundamental. That fundamentality is, to a fair degree, influenced by the Bill before us.

[Baroness Bowles of Berkhamsted (LD)]

My Lords, for the purposes of Committee I declare my interests in the register, in particular as a non-executive director of the London Stock Exchange.

I will comment only briefly in this debate because, as others have said, it touches on some issues that run throughout the Bill. This is a matter of great importance: how we transpose the legislation and get the benefits of that transposition into UK law. If we have the flexibility, we ought to be able to use it, but financial services are our largest-earning industry, and I believe it is right that Parliament has to be able to keep track of what is going on and why when there are changes, and, as has already been pointed out, to have its attention drawn to significant changes.

If this amendment comes round again on Report, I would also like to see in it a report on the resulting change to the regulatory perimeter. Quite a lot of change is already going on and it is not necessarily something that we have had our eye on. Some of this change will be entirely at the behest of the regulators rather than in the hands of government. We will come across this later. It was always clear with EU legislation—maybe irritatingly so, in some instances—that the regulator “shall” do something, which did not give it any room for manoeuvre if it thought something did not need to be done. It looks like we will give our regulators the bits of wriggle room and the flexibility that we want, but it is wholly right that there should a report back to draw to the attention of our House and those who scrutinise this the intended difference in the regulatory perimeter, among other things, so that we can watch it and see how it goes.

I will return to the regulatory perimeter in many ways, because one of the problems is that once something is inside that perimeter, a whole truckload of things that were not really necessary might come along. AIFMD might be a good example of that. It is a whole load of extra reporting: where has it gone, what has happened to it, and has it done anything?

At the same time, if bad things are going on, you want there to be some kind of powers of intervention. It should not be a whole caboodle, with lots of rules and regulations and reporting on one hand but nothing on the other. We need to be able to do the things that are in the middle and bridge that gap. Given the way the edges of what is or is not a financial service are getting more and more blurred, what with the big tech industries and so on as well as the more nimble fintechs, we need that ability to ensure that where there is harm there is a route for action, without it having to mean that the whole kitchen sink of reporting is thrown at it across the board.

[Lord Davies of Brixton (Lab)]

My Lords, I thank the noble Baroness, Lady Noakes, for pointing out that the process here differs from that in the retained EU law Bill. Could the Minister in her response set out more clearly the differences between the process here and the process in the other Bill, and the reasons for the differences?

[Lord Thomas of Cwmgiedd (CB)]

My Lords, I have just one brief point. I agree with the comments so far made that this may not be the appropriate place to deal with the whole problem of delegation, because this deals with revocation, although the amendment sensibly deals with what is inevitable, which is the replacement. It seems to me that parliamentary scrutiny is essential. We need to come back to this time and time again.

It is essential because, unlike the position of a Minister or that of a Government, we have, first, the issue of the accountability of regulators and, secondly, we do not want to politicise regulators. That is Parliament’s job. Therefore, we have to scrutinise this whole area, where we are moving financial services to regulators and away from being dealt with largely through a political process in the European Union. We are hoping to make great improvements, but the one thing we are losing is the input of the political process. One cannot pretend that the direction of financial services policy is not a political question as well as a regulatory question. Politics should be for this House and, although I hate to use this word, we should not taint the regulators with politics.

[Baroness Kramer (LD)]

My Lords, I must agree with every word that the noble and learned Lord, Lord Thomas, has just said. I thank my colleague and noble friend Lord Sharkey for putting this amendment where it is, because the fundamental constitutional issue that underpins this Bill is probably one of the most crucial that we will address, not just in the next days of debate but, frankly, as a Parliament. I think that if the public had any sense of the authority that is now, in a sense, being passed to regulators without accountability—and to some extent to the Treasury without accountability—frankly, they would look at us and say to Parliament, “That is a dereliction of duty. We expect you to be responsible”.

This is not just a political process but part of a fundamental democratic process. As others, including the noble Lord, Lord Naseby, have said, what could be more fundamental than framing an industry that not only determines so much of our national economy but, when it goes badly wrong, can completely undermine that whole economy. I very much support the amendment brought by my noble friend. I know that it was tabled to trigger discussion and I look forward to the further debate that we will have later.

16:45

However, I want to narrow in on one point that I simply do not understand; others may have a much better understanding than I do. I want to draw the Minister’s attention to her Amendment 28, which would, basically,

“authorise the making of subordinate legislation by the Treasury”—

I assume for the purposes of transition. I cannot work out exactly how extensive this power is. The explanatory statement says that it would

“include the power to confer new regulation-making powers on the Treasury”,

but, of course, the word “legislation” is in the amendment itself. Is this a permanent power for the Treasury, or does the Minister anticipate that this will be used just during a very brief transitional period? Does “subordinate legislation” mean that these are statutory instruments and, if so, are they negative or affirmative? What decides which of those they are? I am trying to get a sense of the scope of the power that is being transferred to the Treasury, and I do not think that the explanatory statement serves to expose that. I would like the Minister to give us a complete understanding of exactly what we are being asked to sign up to.

[Lord Tunnicliffe (Lab)]

My Lords, I too thank the noble Lord, Lord Sharkey, for tabling his amendment and provoking this discussion. It is interesting to find such a wide consensus on the general direction. I support the general direction which has emerged in the debate, but I question whether this is the right solution.

Nobody could be more sensitive to the meaningless process of the scrutiny of affirmative SIs; I have done hundreds over the years. It is a very nice little club. It is usually me and the Minister—and, I have to admit, the Liberals often provide the third person in the room, as it were. It is ridiculous at that level. There is a great attraction in saying that the House should consider secondary legislation as a whole and produce some solutions, but the problem is that that would take for ever.

We have a particular issue with secondary legislation in this Bill. As those of us who ploughed our way through the last financial services Bill will remember, there is a big chunk of EU legislation which, whether we like it or not, went through the democratic process in Brussels and was then put into UK law. That has been, effectively, removed and in this Bill we are creating the processes to substitute it. We are pretty well agreed that substituting 500,000 pieces of law—whatever the figure is; I do not know—through primary legislation is impossible, and that it has to be done by secondary legislation. However, because that intermediate level of legislation is so important, we must, for the purposes of financial services regulation, have a better scrutiny process than we do at the moment.

As the noble Baroness, Lady Noakes, pointed out, she, a number of other noble Lords and I have tabled a lot of amendments and we will have a good discussion. I see myself working with others, both in this Room and further afield, to see whether we can produce a consensual set of amendments to improve scrutiny in this area. In the meantime, I hope the Minister will listen to this debate and those that will follow and see whether the Government can come up with their own proposals to address this problem of scrutiny. Whether we like it or not, it is unfortunate that when the amendments we pass in this House get to the other end, they get chopped. If we can achieve some sort of consensus with the Government, that would be the best way through. If we cannot, I think we have to send something pretty powerful back to the other place, saying that this scrutiny process must be improved.

As an aside, I think it was yesterday when my colleagues at the other end said they had done an SI. I asked, “How long did you take?”, and of course the answer was, “Under 10 minutes”. Their level of scrutiny is worse than ours. At least we make useful points—not that anybody really listens to them.

I am pretty agnostic about the amendments in the name of the noble Baroness, Lady Noakes. My experience of deadlines is that they are real only in retrospect: you know of a deadline for real only when you have passed it. If you motor up to an impossible deadline—which is what these amendments may produce—you introduce a law to change it. I can see the benign nature of her intent but not what good it would do, in practice, somehow to punish an organisation that has missed a deadline by saying, “You won’t be able to make the rules, but we have to make the rules because we need the rules,” and so on. I am not going to get carried away about it, but I am not that seized of it.

The Minister will no doubt give us an appropriate assurance about her bucketful of amendments—that they are technical, minor and all that sort of thing—and I will listen. One is left wondering how many amendments will emerge from down the side of the sofa between now and Report, and even perhaps thereafter, because it seems there has been a failure to find all these amendments by the due date for the original procedures in the Commons. It is unfortunate that so many were missed that they have to be introduced now, but we will have no opposition to them.

[The Parliamentary Secretary, HM Treasury (Baroness Penn) (Con)]

My Lords, I will speak first to Amendments 1, 244 and 245, before turning to the government amendments in this group.

With respect to Amendment 1, the Government are seeking the agreement of Parliament to repeal all retained EU law in financial services so that the UK can move to a comprehensive FSMA model of regulation, whereby the independent regulators make rules in line with their statutory objectives as set by Parliament and in accordance with the procedures that Parliament has put in place.

As the noble Lord, Lord Sharkey, noted, it is not the Government’s intention to commence the repeal of retained EU law in financial services without ensuring appropriate replacement through UK law. That commitment was made by the Economic Secretary to the Treasury, including to the Treasury Select Committee and, as the noble Lord noted, in our memo to the DPRRC. His Majesty’s Treasury will commence a revocation only once appropriate secondary legislation and rules are in place.

Parliament will therefore play a key role in scrutinising any replacement secondary legislation. Where the Treasury replaces retained EU law through the powers in the Bill, this will almost always be subject to the affirmative procedure, with some limited exceptions specified in the Bill.

I recognise the wider debate in the House of Lords about secondary legislation and its scrutiny. I will resist the invitation from my noble friend Lord Naseby for this Bill to be the place where we address that wider debate. I point out to noble Lords that, in its report on the Bill, although the DPRRC did not bring to the attention of the House the delegated powers related to retained EU law, it did report on one specific issue regarding hybrid instruments, which I will respond to shortly. The committee commended the Treasury for

“a thorough and helpful delegated powers memorandum.”

That is not to say that the question of parliamentary scrutiny of the provisions in the Bill and the regulations that will be made under it is not important. I know that we will return to it many times during this Committee.

The Government have made efforts to set out how the framework provided by the Bill will work in practice. As part of the Edinburgh reforms, the Government published their approach in a document entitled Building a Smarter Financial Services Framework for the UK, which makes it clear that they will carefully sequence the repeal to avoid unnecessary disruption, and there will be no gaps in regulation. The Government have also recently published three illustrative statutory instruments under the powers in the Bill to facilitate scrutiny of the powers under which they will be made in Parliament.

It is also worth noting, as the noble and learned Lord, Lord Thomas of Cwmgiedd did, that large parts of retained EU law will be replaced by the regulators through their rules. The regulators have the tools and expertise to make rules at pace, in line with their statutory objectives, within a model of appropriate parliamentary scrutiny and oversight. Clause 36 of the Bill supports Parliament in that scrutiny and oversight, requiring the PRA and the FCA to notify the Treasury Select Committee when they consult on rules and to respond to any representations made by that Committee. That is a specific element of the provisions to which we will return at a later stage in Committee.

Ahead of considering the Bill, the Treasury Committee itself considered the appropriate model for parliamentary scrutiny of regulatory rules, concluding that effective scrutiny of regulatory proposals should be carried out through a targeted approach, with Parliament scrutinising proposals in more detail where there is a public interest in its doing so. The Government consider that the provisions of the Bill are consistent with the recommendations of the Treasury Committee.

I turn now to Amendments 244 and 245 tabled by my noble friend Lady Noakes. I can assure her that the Government intend to act at pace to complete the repeal and replacement of retained EU law, but we must also act in a way that allows everyone to adapt to the new model. That will often require the regulators to make replacement rules, which must be done in line with the appropriate procedures for consultation and engagement, as noble Lords have pointed out. As my noble friend Lady Altmann pointed out, there is a balance to be struck between the pace at which we undertake that work and the proper processes for consultation and scrutiny that that will need to be subject to.

[Baroness Kramer (LD)]

I am sorry to interrupt, but perhaps the Minister could clarify something we discussed before. What she describes puts Parliament in the position of a consultee, which I do not believe is the appropriate role for a democratically elected Parliament. Can she confirm that that is exactly what she is saying?

[Baroness Penn (Con)]

No, that is not what I am saying; I am saying that we will have procedures in place to allow Parliament to scrutinise legislation. We will also have procedures in place to ensure that, as part of that, relevant parliamentary committees can be notified of work by the regulators. That is just one aspect of how Parliament will conduct its role in the scrutiny of financial services, legislation and regulation. While the notification of consultations is one aspect, there are many others, such as the procedures for secondary legislation, the other procedures that Select Committees have to scrutinise the regulators’ work, the procedures for the provision of annual reports laid before Parliament, and others. So Parliament will be notified of consultations, but that does not imply that the Government view Parliament simply as a consultee in the process.

[Lord Tyrie (Non-Afl)]

The Minister has said that the use of Treasury powers under this Clause will normally be subject to affirmative resolution by Parliament. In the Minister’s experience—she could offer her personal view if she feels unable to offer a government view—does she think that that scrutiny is usually relatively effective or ineffective?

[Baroness Penn (Con)]

My Lords, standing here at this Dispatch Box, I would offer only a government view. I view it as entirely appropriate for the model we have set out today. I acknowledged the wider debate being had within the House of Lords on different mechanisms of scrutiny and lawmaking. As I have noted, the approach we have taken in this Bill has not been drawn to the House’s attention by the Delegated Powers and Regulatory Reform Committee.

In the model of financial services regulation that we seek to put in place, a large number of the rule-making powers flow to the regulators. We are delegating that further to the independent regulators that have the expertise to make rules in this area. This is the right model for the UK. We have consulted on it carefully and extensively, and we received broad support in that consultation. It reflects the careful approach we have taken and the choice we have made as to the model for the regulation of our financial services.

17:00

I turn to my noble friend’s Amendments 244 and 245 and seek to reassure her that we intend to work at pace, but also recognise that there is a balance to be struck with the need for proper consultation, engagement and scrutiny of replacement rules. The key thing here for the Government is to think about the priority we give to undertaking what is a large piece of work. As I said, the Government have set out which measures they attach priority to and which they will seek to address first in their forward look. That means we will be able to deliver changes where the benefit can be greatest, while also making sure we have the time to conduct the process properly.

[Baroness Noakes (Con)]

I was interested in what my noble friend said about a forward look. Can she explain a little more what this forward look is and where one might find it?

[Baroness Penn (Con)]

In short, the approach is set out in Building a Smarter Financial Services Framework for the UK, which was published alongside the Edinburgh reforms. A number of those reforms set out where our priorities are. They set out where we have already done consultations and will be ready to move forward with new secondary legislation or regulator rules. They set out where we are starting consultations or calls for evidence in a number of areas where we seek to make changes. They also give a forward look at some of those other areas where we seek to make changes but have not yet published our consultation or call for evidence.

[Baroness Noakes (Con)]

Does that represent a comprehensive analysis of what the Government expect to happen to all the retained EU law covered by the powers in this Bill?

[Baroness Penn (Con)]

No, it does not. This comes back to the point about prioritisation. It represents the Government’s initial prioritisation of the measures where they think that making amendments or using the powers under this Bill to repeal the retained EU law and put in place regulator rules under our new model would have the biggest or most important effect. There will be subsequent work to do after what is set out in that vision, but in sequencing it is important that we direct our efforts and resources to measures that will make the most difference.

My noble friend asked how the regulators and the Government can be incentivised to complete the replacement of EU law in a timely way. We are working closely with the regulators to co-ordinate the programme to deliver the rules and legislation that will be necessary to enact the repeal of retained EU law. Where necessary, the Treasury could use the power under Clause 28 of this Bill, which sets requirements on the regulators to make rules in specific areas of regulation. So there would be that option within the powers in the Bill.

The noble Lord, Lord Davies of Brixton, asked about the difference in approach in this Bill from that in the Retained EU Law (Revocation and Reform) Bill. Unlike the approach taken in that Bill, this Bill repeals retained EU law in financial services, as set out in Schedule 1. The Government will continue to repeal and replace the contents of Schedule 1 until we have an established a comprehensive FSMA model of regulation. It will take time for regulators to make, and for industry to adapt to, technical and less important rules, as well as delivering major reforms. The Treasury developed a bespoke approach to financial services, given the existing role of the regulations to preserve that and bring the regulatory regime into line with the FSMA model.

I hope I have addressed the points about the desire to complete this work in a timely way, the need to balance that with resources for regulators and, indeed, industry to adapt to this change, and the importance that the Government place on therefore prioritising the work so that those reforms that have the biggest impact will take place earliest.

I turn to the government amendments in this group, Amendments 20, 28, 29, 242 and 243, which are all in my name. The Treasury undertook an extensive exercise to identify retained EU law relating to financial services to be repealed by this Bill, listed in Schedule 1. Late last year, the National Archives identified additional pieces of retained EU law across the statute book, some of which relate to financial services. The Government have also, through their own work, become aware of a small number of additional pieces. Amendments 2 to 20 make changes to Schedule 1 as a result of this. Government Amendments 2 to 16 and 18 add a number of statutory instruments, and Amendments 19 and 20 place three provisions in FSMA into Schedule 1 to be repealed. Amendment 17 removes one statutory instrument from the schedule, which was included in error, due to containing a small amount of retained EU law alongside largely domestic legislation.

I reassure the noble Lord, Lord Tunnicliffe, that every effort has been made to identify all legislation that should be repealed though this process. If he looks at the balance of what we have identified and what is in these amendments, it was a comprehensive job. None the less, to be as transparent as possible, when we find further measures that would be provided for under this Bill, we have sought to include them by way of amendment.

Amendment 28 clarifies the legislative effect of Clause 3, ensuring that the Government have the necessary tools to create a comprehensive FSMA model of regulation. It does so by clarifying that the Treasury can use the powers in Clauses 3 and 4 to create powers to make further regulations. Under the FSMA model, the Government are responsible for setting the regulatory perimeter via secondary legislation. There may be times in future when, for example, the Treasury will need the ability to update key definitions that sit within legislation restated under Clause 4, to clarify what sits within the UK’s regulatory perimeter.

Amendment 29 makes a technical fix to the explanation requirement in Clause 6, requiring the Bank of England to explain how updates to its rules are compatible with its new regulatory principles, introduced by Clause 45.

[Baroness Kramer (LD)]

May I ask again for a bit more clarification, which I specifically asked for on Amendment 28? Is the Minister saying that this is a power for the Treasury to amend primary legislation outside the Bill through secondary legislation designed to enhance the powers of the regulators? Is that what this is? I tried reading the letter but it did not get me any further.

[Baroness Penn (Con)]

My understanding is that Amendment 28 contains powers to provide for amending secondary legislation, not primary legislation. I will seek a fuller explanation and I suggest that we briefly degroup that amendment, if we reach it today, to provide that explanation for the noble Baroness, so that she has further clarity. I do not think I will provide it for her at this point.

[Lord Tyrie (Non-Afl)]

That would be very helpful. Before the Minister leaves Amendment 28, can she say whether she discussed with officials whether to add a sunset clause to what otherwise will be a very open and extensive power in the hands of the Treasury?

[Baroness Penn (Con)]

No, that discussion was not had. The powers are constrained in that they relate to the provisions in place to transition away from and replace retained EU law, rather than going beyond that.

Amendments 242 and 243, put together, enable provisions subject to the negative procedure under an Act other than this Bill to be included in affirmative regulations made under the Bill. This is a procedural change with well-established precedent. Where any element of a statutory instrument is subject to the affirmative procedure, the combined instrument would also be subject to the affirmative procedure, so there will be no reduction in parliamentary scrutiny.

To conclude, the Bill will repeal retained EU law to establish a model of regulation based on FSMA. It will do so in a way that prioritises growth while moving in a sequenced and measured way, and through scrutiny, engagement and consultation. At this stage, I hope the noble Lord, Lord Sharkey, will feel able to withdraw his amendment and that other noble Lords will not move theirs when they are reached. Subject to providing that extra clarification to the noble Baroness, Lady Kramer, I intend to move the government amendments when they are reached.

[Lord Sharkey (LD)]

I thank all noble Lords who have spoken. I did ask the Minister about the Treasury’s assertion, or guarantee, that it will have replacements where necessary for the stuff that gets repealed, and about the tests for what is “necessary” and what is “appropriate”, how they will be applied and how transparently. I would be grateful if the Minister could write to tell me the answer to my question.

If we are to rely on SIs as a means of scrutiny of the measures in the Bill, that is the practical equivalent of having Parliament largely bypassed in this discussion. We need two fundamental mechanisms for effective parliamentary scrutiny: an effective means of triage and an effective means of revision. I am sure we will return to those issues either later in Committee or on Report. In the meantime, I beg leave to withdraw the amendment.

Amendment 1 withdrawn.

Clause 1 agreed.

Schedule 1: Revocation of retained EU law relating to financial services

Amendments 2 to 20

Moved by

[Baroness Penn]

2: Schedule 1, page 94, line 12, at end insert—
“Official Listing of Securities (Change of Competent Authority) Regulations 1991 (S.I. 1991/2000)”Member’s explanatory statement
This amendment and the Minister’s other amendments to Schedule 1 (except for the amendment at page 100, lines 45 and 46) would add various instruments containing retained EU law relating to financial services to the list of subordinate legislation to be revoked in Part 2 of Schedule 1 to the Bill.

3: Schedule 1, page 94, line 16, at end insert—
“Official Listing of Securities (Change of Competent Authority) Regulations 2000 (S.I. 2000/968)Financial Markets and Insolvency (Settlement Finality) (Revocation) Regulations 2001 (S.I. 2001/1349)”Member’s explanatory statement
See explanatory statement for the amendment at page 94, line 12.

4: Schedule 1, page 94, line 18, at end insert—
“Financial Services and Markets Act 2000 (Communications by Auditors) Regulations 2001 (S.I. 2001/2587) Public Offers of Securities (Exemptions) Regulations 2001 (S.I. 2001/ 2955)Financial Services and Markets Act 2000 (Official Listing of Securities) Regulations 2001 (S.I. 2001/2956)Financial Services and Markets Act 2000 (Official Listing of Securities) (Transitional Provisions) Order 2001 (S.I. 2001/2957)”Member’s explanatory statement
See explanatory statement for the amendment at page 94, line 12.

5: Schedule 1, page 94, line 20, at end insert—
“Electronic Commerce Directive (Financial Services and Markets) (Amendment) Regulations (S.I. 2002/2015)”Member’s explanatory statement
See explanatory statement for the amendment at page 94, line 12.

6: Schedule 1, page 95, line 1, at end insert—
“Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2007 (S.I. 2007/ 126)Financial Services and Markets Act 2000 (Markets in Financial Instruments) (Amendment No. 2) Regulations 2007 (S.I. 2007/2160)Financial Services and Markets Act 2000 (Motor Insurance) Regulations 2007 (S.I. 2007/2403)”Member’s explanatory statement
See explanatory statement for the amendment at page 94, line 12.

7: Schedule 1, page 95, line 2, at end insert—
“Financial Services and Markets Act 2000 (Reinsurance Directive) Order 2007 (S.I. 2007/3254)Financial Services and Markets Act 2000 (Reinsurance Directive) Regulations 2007 (S.I. 2007/3255)”Member’s explanatory statement
See explanatory statement for the amendment at page 94, line 12.

8: Schedule 1, page 95, line 20, at end insert—
“Takeover Code (Concert Parties) Regulations 2008 (S.I. 2008/3073)”Member’s explanatory statement
See explanatory statement for the amendment at page 94, line 12.

9: Schedule 1, page 95, line 23, at end insert—
“Financial Services and Markets Act 2000 (Amendment) Regulations 2009 (S.I. 2009/2461)”Member’s explanatory statement
See explanatory statement for the amendment at page 94, line 12.

10: Schedule 1, page 95, line 26, at end insert—
“Financial Services and Markets Act 2000 (Market Abuse) Regulations 2009 (S.I. 2009/3128)”Member’s explanatory statement
See explanatory statement for the amendment at page 94, line 12.

11: Schedule 1, page 96, line 11, at end insert—
“Prospectus Regulations 2013 (S.I. 2013/1125)”Member’s explanatory statement
See explanatory statement for the amendment at page 94, line 12.

12: Schedule 1, page 96, line 42, at end insert—
“Payments to Governments and Miscellaneous Provisions Regulations 2014 (S.I. 2014/3293)” Member’s explanatory statement
See explanatory statement for the amendment at page 94, line 12.

13: Schedule 1, page 96, line 47, at end insert—
“Banking Act 2009 (Restriction of Special Bail-in Provision, etc.) Order 2014 (S.I. 2014/3350)”Member’s explanatory statement
See explanatory statement for the amendment at page 94, line 12.

14: Schedule 1, page 97, line 21, at end insert—
“Financial Services and Markets Act 2000 (Qualifying EU Provisions) (Amendment) Order 2016 (S.I. 2016/936)Financial Services and Markets (Disclosure of Information to the European Securities and Markets Authority etc. and Other Provisions) Regulations 2016 (S.I. 2016/1095)Companies Act 2006 (Distributions of Insurance Companies) Regulations 2016 (S.I. 2016/1194)”Member’s explanatory statement
See explanatory statement for the amendment at page 94, line 12.

15: Schedule 1, page 98, line 13, at end insert—
“Banks and Building Societies (Priorities on Insolvency) Order 2018 (S.I. 2018/1244)”Member’s explanatory statement
See explanatory statement for the amendment at page 94, line 12.

16: Schedule 1, page 100, line 21, at end insert—
“Financial Services and Markets Act 2000 (Central Counterparties, Investment Exchanges, Prospectus and Benchmarks) (Amendment) Regulations 2020 (S.I. 2020/117)”Member’s explanatory statement
See explanatory statement for the amendment at page 94, line 12.

17: Schedule 1, page 100, leave out lines 45 and 46
Member’s explanatory statement
This amendment would remove from the list of instruments to be revoked under Part 2 of Schedule 1 the Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716) which predominantly comprise domestic regulation.

18: Schedule 1, page 101, line 9, at end insert—
“Financial Services and Markets Act 2000 (Qualifying Provisions)(Amendment) Order 2022 (S.I. 2022/1252)”Member’s explanatory statement
See explanatory statement for the amendment at page 94, line 12.

19: Schedule 1, page 103, line 3, at end insert—
“(za) section 55J(7A) to (7C);(zb) section 55KA;”Member’s explanatory statement
This amendment would add sections 55J(7A) to (7C) and 55KA of the Financial Services and Markets Act 2000 to the list of legislation to be revoked in Part 4 of Schedule 1 to the Bill. The provisions implemented in part the Solvency 2 Directive and concern powers of the Prudential Regulation Authority to cancel permission of certain undertakings.

20: Schedule 1, page 103, line 9, at end insert—
“(fa) section 367(3)(za);”Member’s explanatory statement
This amendment would add section 367(3)(za) of the Financial Services and Markets Act 2000 to the list of legislation to be revoked in Part 4 of Schedule 1 to the Bill. The provisions implemented in part the Solvency 2 Directive and concern winding-up petitions where the Prudential Regulation Authority has cancelled permission of certain undertakings.

Amendments 2 to 20 agreed.

Schedule 1, as amended, agreed.

Clause 2 agreed.

17:15

Schedule 2: Transitional amendments

Amendment 21

Moved by

[Baroness Worthington]

21: Schedule 2, page 124, line 12, leave out paragraph 45
Member’s explanatory statement
These amendments maintain the duty for FCA to set position limits on commodity derivatives and over the counter equivalents, and the associated powers to request information and intervene, whilst onshoring the power to set limits which are appropriate for the UK.

[Baroness Worthington (CB)]

My Lords, I am very pleased to speak to this group of amendments this afternoon, having sadly been unable to make Second Reading. I declare my interest as a co-chair of Peers for the Planet. I also declare my relative ignorance of this topic, as I am not steeped in the details of financial services. I very much approach this issue from a layperson’s perspective, guided by common sense. Much of my efforts here are to apply parliamentary scrutiny to this very complex issue and to seek reassurances from the Minister.

As we debated in the previous group, it is vital that we have proper scrutiny of proposed changes to laws and regulations governing financial markets. Potentially poorly regulated markets could have significant negative real-world consequences, as we have seen in the past. Complexity is now endemic in this sector and can catch regulators, and indeed parliamentarians and Ministers, out. Derivative markets are particularly complex and require especially careful scrutiny.

My Amendments 21 to 25 and 41 concern the proposed future regulation of trading in commodities and their derivatives. Many noble Lords will be aware of this, but to give some background, derivatives are used in the financial markets and the wider economy to hedge exposure to commodity prices in the future. However, this opens up the opportunity to speculate and seek profit from volatility. Roughly two-thirds of commodity trading relates to commodities in the energy and food markets. Therefore, unchecked speculation and poor regulation in these markets can have very real-world consequences. Some types of commodity derivative investment are of course socially desirable. For example, soft commodity or energy producers seeking to insure themselves against future risks arising from such things as weather and an unstable climate are making a necessary hedge to keep products economic. However, there are dangerous aspects of this as they relate to food and energy, which affect people’s lives and the affordability of living.

Momentum-based trading strategies can exacerbate steep price rises and the cornering of markets, by which I mean taking large positions that are disproportionate to your genuine participation in the market, which could force unnatural or artificial scarcity into the market and raise prices. More generally, increasing volumes of capital being tied up in future derivatives removes money from the real economy today, where it could be delivering much greater real-world impacts.

There is overwhelming evidence that unchecked speculation produces price bubbles. I do not intend to go into this in detail, but in relation to oil, a 2021 piece in Resources Policy looked back at a whole host of research dating back to 2009 in highly cited journals. So firm is the consensus that there is now a whole body of techniques dedicated to measuring and modelling bubbles. We are well past the point of discussion of whether there is a risk; it is now about how we manage it and its impacts.

The co-author of last October’s UN Conference on Trade and Development—UNCTAD—trade review said that a ratio of around 70% real hedging and 30% speculation might be seen as “healthy”. However, he added that what we see in the market today indicates that the ratio has been reversed: 70% speculation and 30% real hedging. The same report warned of a policy-induced global recession. The report said that insufficient attention has been paid to the “betting frenzies” on future markets in the current crisis and called on Governments to tighten rules on speculation. However, with this legislation we seem to be doing the opposite.

EU legislation on commodity derivatives was introduced, and it was not simply pointless bureaucracy. There was clear evidence in the run-up to and during the financial crash of 2008 that food and energy prices were being driven upwards not by shortages but by fevered speculation, so action was taken. Investment banks were seen to be profiting by around $16 billion a year from commodity trading. Thanks to these new approaches, we have seen that profit-making fall by around three-quarters, according to analysis from the research firm Coalition. So there was a reason for the EU regulations that we are seeking to modify as we translate to post-Brexit financial regulation.

The general point is that we should be seeking to allow the socially beneficial, but not allowing bubbles to be created in this market. We should not be making it easier to do that but keeping a careful eye and tracking trends, while requiring clear data and better disclosure. You could argue that the EU perhaps overreached or did not get it exactly right, and that we should seek to take our own approach, but I have some questions about the Government’s proposals in the Bill.

It appears to me, and I seek reassurance from the Minister on this, that Schedule 2 is handing the power of setting appropriate position limits and controls—and the maximum position any firm can take on trading on a commodity—to financial exchanges, or certainly taking the power to do so. But are those exchanges not incentivised commercially to maximise liquidity and volumes of trade, so does this not create something of a conflict if they are also setting their own limits?

These new arrangements would see the FCA retaining backstop powers to give directions, but only in certain fairly narrowly defined circumstances. It can request information and intervene, but the drafting suggests that the exchanges would be free to set their own limits. Is this the case and, if so, how does the Minister expect them to handle this potential conflict between their commercial interests and a more cautious approach to the prevention of harmful speculative bubbles?

There is also the question of what will be regulated in future. The current rules cover both over-the-counter trades and exchange trades but, as I understand it, this new approach is about simply deciding not to continue to seek oversight of over-the-counter trades. From what I have been able to read, this seems to be based on the fact that those consulted said it was too difficult to do. That does not seem a good enough reason to remove the oversight of OTC trades and focus simply on exchange trades.

There is also the point about exchanges having less oversight of systemic risks building up in the global market. Whereas the FCA engages via the IOSCO, the International Organization of Securities Commissions, and the FSB—

17:22

Sitting suspended for a Division in the House.

17:33

[Baroness Worthington (CB)]

I shall seek to remember where I was in my speech. I was talking about international co-ordination and how the FCA currently is part of a global network of regulators, and therefore has a more effective chance of spotting systemic risks building up in the global markets, and that the exchanges would not be plugged in at the same level of international co-operation and co-ordination. The FSB warned, in the aftermath of Russia’s invasion of Ukraine, that

“prices have swung wildly, with liquidity temporarily evaporating in some commodity derivatives market segments and a number of traders coming under strain”.

So I ask the Minister: in these uncertain times, how certain are we that UK exchanges can be patched into that wider market scrutiny and regulatory infrastructure, which the regulator currently has the power to do?

The powers retained by the FCA are limited to intervening on operational objectives and, most relevantly here, consumer protection and integrity, but I am concerned that that definition of consumer may be rather too narrow. It could refer, as it does in Section 1 of the 2000 Act, to the investor, rather than the man or woman on the street. I worry that “integrity” could simply refer to soundness, stability, orderliness and lack of crime. I would welcome the Minister’s view on how this maps on to the existing grounds for regulation that are to be revoked, which are much broader and relate to preventing market abuse and market distortion and try to ensure that there is no artificial inflation of commodity prices.

My concern is that we can have a sound and orderly market which works very well for investors but inflates prices for consumers and businesses and adds extra costs on to essential commodities. I believe the FCA should retain the power to intervene in these cases, and that the definition of grounds for intervention should be as broad as it is currently.

I mentioned the over-the-counter derivatives no longer being covered in regulation. I was rather worried to read in the Treasury’s consultation on wholesale markets that:

“The objective of including them as part of the regime was to prevent market participants from circumventing regulatory requirements that are applicable to exchange traded commodity derivatives by dealing in lookalike OTC contracts. However, in practice, identification of these contracts has proven difficult, and they have only been reported in a very small number of instances.”


Therefore, the Treasury concluded that

“the inclusion of these contracts and uncertainty about the scope of this requirement imposes increased legal risk and potential compliance costs for firms.”

To me, that sounds as though something important is proving difficult and, rather than seeking to solve it, make it easier and provide clearer guidance, we have decided to drop it altogether.

The consultation goes on to say:

“to ensure market integrity, the government proposes that the FCA and trading venues should continue to take account of relevant OTC contracts when monitoring markets.”

But amendments to Regulations 27 and 28 take away the power from the FCA to do this and to request information on these contracts. That is my reading of it, but I look forward to reassurance or clarification from the Minister. If the FCA is not able to monitor these transactions, how can we oversee them? Would it not be more desirable to have the FCA retain the powers it has?

I am grateful for the support of the noble Baroness, Lady Bennett of Manor Castle, for my amendments. Essentially, they seek to unhook the legislation from the EU but continue to require the FCA to maintain the same powers to set position limits and to intervene as widely as possible to ensure proper consumer protection and maintain international co-ordination, which is so essential in these markets.

Amendment 41 requires the FCA to make rules requiring listed companies to publish the revenue and earnings attributable to trading commodity derivatives and economically equivalent over-the-counter contracts. I think this is important because I have personal experience—and there is plenty of anecdotal evidence—of firms that are operating very significant trading activities but hiding their profits in their financial statements and in other parts of their accounts, because to disclose quite how much was being made from trading would bring a lot of questions about the nature of those companies. I am specifically talking about energy companies, which have very significant trading activities and are not, at the moment, required to disclose in their accounts the level of profit they are making from those activities.

This is important because it materially affects the ability of financial services to assess the health of these companies. If we are not seeing the extent to which they are engaged in these derivative-trading activities and we are unable to see where the profits are being made, how can we make fair and open assessments about the nature, success and propriety of their business? It is important that we give ourselves the transparency to see exactly how much of this is happening and the degree to which it is altering the balance sheets of companies in these sectors, which are so essential to maintaining our standard of living and, in the case of energy and food companies, have such a material impact on our environment and global climate.

I am sorry that that was a very long speech, but I look forward to hearing the Minister’s responses and to continuing the debate.

[Baroness Noakes (Con)]

My Lords, I will speak to the amendments from the noble Baroness, Lady Worthington. I do not support them, because I think that what the Government are trying to do in this Bill is moving in the right direction.

We have to remember that derivatives are basically a success story. It is a huge financial activity. The total value of derivative trading is sometimes estimated to be a multiple of global GDP. Of course, commodity trading is only a relatively small part of that, but it is important because the advantages of trading allow effective risk management, price discovery and market efficiency. Those are the sorts of things that actually help consumers, at the end of the day, so we must be very wary of trying to interfere in what is fundamentally a successful part of our financial infrastructure.

Of course, speculation is involved in derivatives, there is risk for some counterparties—and sometimes systemic risk—in derivatives, and sometimes they are extremely complicated as individual instruments, even to understand. But they are part of and underpin something that works well for markets overall. We should intervene in that only if absolutely necessary.

My own view is that the changes in the Bill probably do not go far enough to take the dead hand of EU prescriptive regulation away, but they are a solid move in the right direction. As the noble Baroness, Lady Worthington, pointed out, they replace a mandatory regime with a permissive one that allows the rules to be designed for the particular markets. In particular, the changes in Schedule 2 will allow the FCA to transfer responsibility for setting position limits to trading venues, if indeed position limits are needed. For some time now, the FCA has not been enforcing excesses on position limits in respect of the majority of contracts, and the world has not come to an end.

I think Amendments 21 and 22 are a step backwards in trying to preserve a mandatory EU regime. So too is trying to drag over-the-counter derivatives into that regime, because—as the noble Baroness pointed out—it has been found that they are extremely difficult to identify. Their removal from the regime was almost universally supported in the consultation that the Government carried out on changes to the derivatives regime.

Amendment 41 from the noble Baroness, Lady Worthington, is about putting additional information in annual reports and accounts. There are already obligations on companies to report things that are material to an understanding of the financial position of those companies. They are required to describe their trading model and the operating segments that are relevant to them, but they are not required to identify income streams from particular instruments that they operate. There is a good reason for that. Annual reports are already very long, complicated and difficult to understand, and the noble Baroness is asking for information that in very many cases will be wholly irrelevant to an understanding of the financial position or operations of the companies that involve some trading. For many, it is embedded in their marketing activities for the products they engage in. I do not support any of the amendments put forward by the noble Baroness.

[Baroness Bowles of Berkhamsted (LD)]

My Lords, I congratulate the noble Baroness, Lady Worthington, on venturing into commodities. I remember many happy hours—I call them that—when I was chair of ECON, discussing commodities with the chair of the CFTC, Gary Gensler, in particular, and the chairs of the agriculture committees in the Senate, which deal with a lot of the derivatives. It is an impossible task to get a grip on everything, but that does not mean you should not try to get a grasp of things that might go wrong.

17:44

I share some of the concerns about the way this is being implemented. I am less concerned about exchanges doing the position limits: they have the trading and the information, and they can act more quickly, as long as there is a sound framework against which they make those decisions. The problem with commodities is that there are some with freely flowing markets and lots of participants, so they will not very easily corner the market. Then there are some with very few traders, and it is very difficult, and some where there are even fewer and it gets extremely complicated. Steps have to be taken, especially in times of upheaval, as we have just seen with the war in Ukraine, when you get demand for sensitive metals, for example.

My concern is that part 4 of Schedule 2 says:

“The FCA may by rules require relevant persons to establish and apply … position limits”.

There is no compulsion for anything whatsoever. That goes back to the point I made when we debated my noble friend Lord Sharkey’s amendment. This means that this policy and the scope of the regulatory perimeter is to be entirely determined by the Financial Conduct Authority. It does not say that we will have rules about what might be dangerous concentrations, cornerings and so on in the market; it says that it is up to the regulator to analyse and work out the rules for when it will intervene when certain things happen. It might sometimes decide that it is not possible to intervene and it will let things be, but it is the business of government to set the regulatory perimeter. That is what I am always being told. I would quite like it if it was a bit more flexible, but that is what we are told.

Then we come to the things the FCA has to take into consideration. The noble Baroness, Lady Worthington, has something in looking at the nested way in which we read through the different strategic and operational objectives and so on. I used to think that the integrity objective was strong, and governed behaviour and all kinds of things. Then you keep wandering through and discover that it has been redefined; in the end, it is only if the market is regulated. I do not think it is regulated when it is a “may”, so maybe nothing applies. Setting it back to where it was with the adjustments made by the noble Baroness, Lady Worthington, at least would mean that we would know what is regulated.

Schedule 2 says that, in making rules,

“the FCA must have regard to its competitiveness and growth objective in section 1EB of the Act”,

but it will obviously have to have regard to all its objectives. Why oh why are we singling out the competitiveness and growth objective when here, the fundamentals are humanitarian, not competition and growth? I cannot see anything in the objectives, and their nesting in the various principles that have to be followed, about sustainability or humanitarian issues. This means that, if the FCA does take any action, it has been directed to pay attention to the competitiveness and growth objective. It might set it aside, but it has been given some kind of priority when dealing with issues that do not even properly seem to be covered in what it is supposed to do.

There are various amendments later that try to set that straight, but it is now right at the top of the tree to say something about sustainability. In particular, we have to balance the competitiveness and growth objective with a reference to sustainability, otherwise the whole commodities set-up comes tumbling down and is saying, “We don’t care”. So I think that the formulation here from the noble Baroness, Lady Worthington, is safer for now. If it went to a vote I would support it, but I really hope that the Government will make some other amendments or adjustments to ensure that we have properly considered, and definitely got within the regulatory perimeter, the humanitarian, social and very basic issues that affect the everyday lives of everybody.

It is not a matter of looking at whether there might be public interest. This Parliament knows that the public interest is in the lives of people—the heating in their homes, the food they eat, the materials that make the things in which they live, the vehicles in which they travel and the electric cars they hope to buy. All these things come down to commodities, and therefore we need to pay a lot more attention here. I hope that, by the time the Bill finishes its passage, we have made changes.

[Baroness Kramer (LD)]

My Lords, I will speak very briefly to the amendments tabled by the noble Baroness, Lady Worthington, because my noble friend Lady Bowles has set out the position very well.

I am concerned that we see, in parts of this new legislation, a very libertarian view of how financial markets should be structured. Even libertarians will say to me, “Look, it all works in the long run, but in the short run there are an awful lot of victims and collateral damage”. Because of that, we are asking the Government to go back and relook at the changes they are proposing. The developing world, including some of the poorest people, will suffer from the volatility of many commodity prices. Particularly where that volatility is artificially created, it seems to me that we ought to expect the regulators to play a disciplined and effective role.

While I must admit that most of this legislation is beyond my comprehension—the markets are extremely complex—I am rather concerned that regulators, whom the Minister herself has said have great expertise, knowledge and understanding, should not be in a position to apply those to ensure that there is no market abuse. I will leave it at that, because all that has been far better said by others.

My Amendment 27 in this group amends the Minister’s Amendment 26. It is another probing amendment, because I am not quite sure exactly what the Minister’s amendment says. My noble friend Lord Sharkey and I were both very involved in the Financial Services Act 2012, which set in place the framework for regulation of behaviour by central counterparties. That was after the 2007-08 crash, which was, as much as anything, a severe liquidity crisis. The chaotic nature of the derivatives market meant that no particular financial institution knew whether the financial institution with which it would normally do business was about to collapse, because, in turn, it had complex derivative products with yet another financial institution that was about to go under.

I am very supportive of the decision that was made, obviously at a global level, to channel virtually all financial derivatives, particularly the standard ones, through central counterparties. The largest of those central counterparties was of course the London Clearing House. I think we all recognise that, in doing that, a great deal of risk cumulated at the central counterparty. That is mitigated by the central counterparties themselves by requiring collateral.

However, to give the Committee a sense of the size of this market, I was looking at a typical number for outstanding financial derivatives on any one day. It is approximately $600 trillion, so it is vast, and a good part of that is now run through central counterparties. The problem is that there is not enough quality collateral in the whole wide world to meet margin calls from the various central counterparties, even after they have gone through a compression or netting process, which of course was led by London. Part of the reason that London is so dominant in this arena is that it has such a large market share.

The way in which the sort of fiction works—that collateral sits in place to cover risk—is that low-quality collateral can be used in these cases through a mechanism of discounting it for its embedded risk. Frankly, there is a point at which you can discount junk as much as you like but that does not turn it into high quality. It might do so on paper or by calculation, but it does not in reality, so there is always a weakness and high risk at the central counterparties.

In that 2012 legislation, we were attempting to put in place a resolution mechanism for the moment when central counterparties went sour. It is easy to put a resolution mechanism in place when a single member fails, because the other members of the central counterparty bloc are usually in a position and have sufficient financial strength to step in, and there are requirements under that resolution waterfall to be able to do so. But when the problem is at a systemic level, the waterfall does you no good at all. Most of the amendments here are meant to strengthen the waterfall, but the reality is that when there is a systemic problem, the waterfall collapses in a matter of seconds—and the ultimate backstop is, basically, the taxpayer. With the numbers that I am talking about, your Lordships can see that the exposure for the taxpayer is very significant.

All central counterparties across the globe, no matter where they are located and what rules they sit under, tend to have exactly the same membership. So if one CCP goes, you can pretty much count on all the rest of them going. In that environment, I am trying to understand the changes that the Minister is bringing forward under Amendment 26. I had understood that it was the Treasury that gave equivalence status to third-party central counterparties—I could be wrong because I am so out of date—if advised by the relevant regulator, which in this case would be the Bank of England. If I understand Amendment 26 correctly, it effectively extends the equivalence recognition to EU CCPs from one year to three years and six months. That is in primary legislation and we can make the decision whether we think that is appropriate.

I am rather troubled by proposed new paragraph (4), to be inserted by proposed new sub-paragraph (3) in Amendment 26, which says:

“The period determined by the Bank of England in a particular case”


under the rule I just described

“may be varied by the making of a subsequent determination.”

Can the Minister help me understand what on earth that means? Does it mean that equivalence can be extended by a decision of the Bank of England, say from three and a half years to 10 years? Does it mean only that the Bank of England could shorten the period of equivalence recognition and that it is limited by the three years and six months? I can see no way that there is any mechanism at all for scrutiny around this issue, even though it can represent a very serious chain of risk.

I just need some help to try to understand what power is being given to the Bank of England. It is a little like the previous question on the earlier amendment. What exactly is this power? What does it enable the Bank of England to do? What kind of scrutiny is there? Is there a sunset clause to it? How open-ended is this? I am just trying to understand those implications, so I would be very grateful if I could have the Minister’s help in doing that.

18:00

[Lord Tunnicliffe (Lab)]

My Lords, I will not make a long speech on this group, largely because I do not have the knowledge or skills to do it. What I am seized of is that financial crises come relatively often, about a generation apart. It seems that those who suffer in a financial crisis then set about putting in controls to try to make markets more stable. Clearly, markets are intrinsically not stable; they need rules to be stable.

One has a sense in some of the debate about the Bill that somehow the crisis of 2008-09 did not happen, and anyway it will not happen like that again. I share the little bit of concern about the central counterparties. We had debates on it about four or five years ago, and I could not see how we were protected against a systemic collapse. Every time you make a set of rules, you create some other areas of potential crisis.

I did not come here with a particular mandate on this subject, but in the debate so far it seems to have been argued that regulators need to have the ability to step into a situation and set some rules that might help limit the damage in a crisis. We will await the Government’s argument and I will read Hansard with particular care to come to a conclusion, but so far a very good case for retaining the power to the regulators has been made.

[Baroness Penn (Con)]

My Lords, I will begin by speaking to government Amendments 26 and 191 to 195 in my name, and Amendment 27, tabled by the noble Baroness, Lady Kramer. As she described very well in her contribution, CCPs are a type of market infrastructure and play a vital role in promoting financial stability in markets.

Government Amendment 26 will allow the Bank of England to extend a firm’s run-off period to the temporary recognition regime from a maximum period of one year to a maximum period of three years and six months. This will ensure that overseas central counterparties, or CCPs, within that run-off can continue to offer services to UK firms during that period.

While the UK was an EU member, access to overseas CCPs for UK firms was determined centrally by the EU. Following the UK’s exit, the Government put in place a new process to tailor access to the UK market, together with a temporary recognition regime, or TRR. The TRR allows UK firms to continue to use overseas CCPs while the Treasury and the Bank of England make equivalence and recognition decisions in respect of those CCPs. Once made, these equivalence and recognition decisions will provide the basis for long-term UK market access for overseas CCPs.

The TRR was accompanied by a year-long run-off regime, intended to ensure that CCPs that leave the TRR before it expires, without gaining recognition, can slowly and safely unwind transactions with UK members before exiting the UK market. Remaining within the TRR requires CCPs to take a number of steps, including submitting an application for recognition to the Bank of England by 30 June 2022. While the majority of CCPs in the TRR did this, a small number did not apply for recognition by that deadline and have consequently entered the run-off regime. UK firms therefore stand to lose access to these CCPs at the end of June 2023 under the current arrangements.

Amendment 26 will allow the Bank of England to extend a firm’s run-off period to the temporary recognition regime from a maximum period of one year to a maximum period of three years and six months. This extension is appropriate as the Government understand that some of the CCPs in the run-off may wish to apply for recognition in future. A temporary loss of access for UK firms to these CCPs would be highly disruptive. The extension therefore provides time for CCPs in the run-off regime who wish to apply for recognition to do so and ensures that the relevant CCPs can continue to offer services to firms during that period. It also ensures that, where necessary, UK firms can wind down their exposure to CCPs, leaving the run-off state in a safe and controlled manner.

Amendment 27 from the noble Baroness, Lady Kramer, seeks to remove proposed new sub-paragraph (3), which makes it clear that the Bank of England can vary any decisions it has already made on the length of the run-off period for a particular firm. I understand that this is a probing amendment to understand how that works. However, the Bank already provides dates by which these firms must exit the run-off, in line with the existing one-year limit set in legislation. This amendment extends the limit set in legislation and then gives the Bank the power to vary those dates under it. It is important for the Bank to set the exact date on which a particular CCP will exit the run-off in order to carefully manage the process for the reasons the noble Baroness points out. The run-off period for a firm cannot be more than the three years and six months specified in this legislation.

The Bank can specify a period shorter than this for a particular CCP. This does not affect the equivalence process as described by the noble Baroness. Equivalence is a separate process managed by the Treasury where the Treasury determines that an overseas jurisdiction is equivalent to the UK’s regime based on an assessment of the jurisdiction and its regulatory regime. Amendment 26 therefore allows the Bank to set specific dates for when CCPs will exit the run-off, with a maximum period set in legislation, which the Bank is currently responsible.

Briefly, Amendments 191 to 195 to Schedule 11, which introduces a special resolution regime for CCPs, are technical amendments which will ensure that Schedule 11 functions as intended and reflects the original policy intent, by correcting drafting and clarifying the scope of certain provisions.

On Amendments 21 to 25 and 41, tabled by the noble Baroness, Lady Worthington, the Government believe that effective commodities markets regulation is key to ensure that market speculation does not lead to economic harm. This is a lesson we all learned from the food crisis in the 2000s, and the Government remain committed to the G20 agreement that sought to address that.

However, the current regime, which we have inherited from the EU, is overly complicated and poorly designed. The application of limits to close to a thousand different types of commodity derivative contracts is far too broad. It captures many instruments that are not subject to high levels of volatility or speculation, and therefore unnecessarily undermines trading and liquidity in some contracts. Since the UK left the EU, the EU has significantly reduced the scope of its regime to only a handful of contracts—just 18—and no other major jurisdiction applies position limits as widely as the current UK regime.

To ensure that the regime is calibrated correctly, the Bill makes trading venues responsible for setting position limits. As some in the Committee have noted, they are well placed to ensure limits apply only to contracts that are subject to high volatility. However, the Bill empowers the FCA to put in place a framework for how trading venues should apply position limits and position management controls. As part of this, the FCA will continue to require trading venues to set position limits on contracts which pose a clear threat to market integrity. The FCA has confirmed that agricultural and physically settled contracts, among other highly traded contracts, will continue to be subject to position limits, in line with the UK’s G20 commitments, and therefore consistent with international standards.

The FCA will also retain its ability to intervene directly to set position limits if it believes it is necessary. However, Amendments 21 to 25 would require the FCA to instead continue setting position limits on all commodities that are traded on a venue or economically equivalent over-the-counter traded derivatives. This would place unnecessary restrictions on investors, to the detriment of all market participants, and would place the UK at a disadvantage compared to other international financial centres, such as the EU and the US, which apply restrictions to contracts that genuinely pose a risk of volatility. It would change existing market practice that has been shown to work effectively.

I will address more directly a number of the points that the noble Baroness, Lady Worthington, raised. On how to manage the “conflict of interest”, as she put it, for trading venues, as I said, under the measure in the Bill the FCA will establish a framework that will govern the way venues set and apply limits. The FCA will also have powers to intervene and require venues to set limits on specific contracts that pose a risk to market integrity.

On the FCA’s information-gathering powers, in particular in relation to over-the-counter trading, the FCA will have more powers to request information from any participants about contracts it is considering applying limits to. This includes, but is not limited to, over-the-counter contracts. I assure the noble Baroness that over-the-counter contracts will remain in scope as the FCA will have the ability to set limits. This means that over-the-counter traded agricultural products will remain in scope.

The noble Baroness also asked how, given that the FCA often participates in international fora, exchanges will be plugged into them. Market participants, including exchanges, are often invited to participate in round tables organised by international bodies, such as IOSCO, to discuss specific regulatory issues. They can also respond directly to consultations.

I hope that provides some reassurance to the noble Baroness on some of the specific questions that she raised.

[Lord Sikka (Lab)]

I thank the Minister. Unless she is going to in a moment, she did not specifically refer to Amendment 41. What it proposes is very reasonable, for two reasons. First, the information that the noble Baroness, Lady Worthington, requests is costless. It is readily available within the organisations. Secondly, if we go back to the last crash, one of the complaints about Bear Stearns was that it made almost 100% of its income from risky speculation, but the breakdown of that income was not available. Therefore, the creditors and other stakeholders were unable to make an assessment of the likely continuation of that income or the risks attached. This kind of disclosure gives us insights into the risks and enables market punters to make their own predictions about future cash flows and riskiness, and it is all costless. Therefore, it is hard to see what objections there can be to this disclosure.

18:15

[Baroness Bowles of Berkhamsted (LD)]

If I may drag the Minister back to where she was just finishing off, in her response to me and the noble Baroness, Lady Worthington, she said that the UK would continue to observe its G20 commitments, which I do not doubt, and that various agricultural products and so on would definitely still be within scope. However, it says here in legislation that the FCA “may”. It does not say, “Apart from the fact that we are observing G20, and agriculture is still in”—it just says “may”. Where does it say in primary legislation that there will be guidance—or whatever the appropriate word is—as to how these things will be dealt with by the exchanges in the circumstances that give rise to concern? Otherwise, looking at our legislation—at least, our primary legislation —I see that we would not have that certainty, and it is proper that we have it.

[Baroness Penn (Con)]

It might be wise for me to write to the noble Baroness to address that specific point. Under the overall framework for the regulators, they need to make their rules in a way that is consistent with international standards, to which the noble Baroness referred. That would be the additional way in which one would have that reassurance, but it is worth writing to set out the point for her with more clarity.

The noble Baronesses, Lady Bowles and Lady Worthington, talked about whether the FCA, in acting to advance its objectives, would have sufficient grounds to intervene in these markets. The Treasury is confident that it would, and an example of humanitarian grounds for intervention was given. We are confident that the FCA could intervene on humanitarian grounds, acting in line with its objectives, but perhaps I will also write to the Committee to expand on that further.

The noble Lord, Lord Sikka, somewhat pre-empted me: I was just about to turn to Amendment 41. I am afraid that the Government will disagree with the noble Lord and the noble Baroness. Arguments were advanced by my noble friend on this point. Amendment 41 would require all listed companies to disclose how much revenue they make from trading commodity derivatives. However, listed companies are already required to publish comprehensive information about their operations and finances as part of their annual reports. The Government view that as sufficient.

It may be worth turning to the questions asked by the noble Baroness, Lady Kramer, on government Amendment 28, if the Committee is happy for them to be addressed here. Does the power in Clause 3 allow the Treasury to amend primary legislation to give us or the regulator new powers? The power in Clauses 3 and 4 to modify legislation, including to create new powers for the Treasury or regulators, is limited to retained EU law, as set out in Schedule 1. Clause 3 powers cannot amend primary legislation.

The powers in Clause 4 can be used to move provisions from retained EU law into primary legislation. The power in Amendment 28 applies where the Treasury is making transitional amendments to retained EU law or restating it. It is designed to allow, for example, the Treasury to give itself a power to update a definition or threshold in legislation. This mirrors delegated powers for the European Commission in retained EU law. While it would be possible to deliver the same outcome by reuse of the powers in Clauses 3 and 4, the Government consider it more appropriate to create a specific power to allow for such updates to be made, where they consider it appropriate. When creating such powers, His Majesty’s Treasury will have the ability to specify the procedure for any statutory instruments made using the new power. The Treasury will follow the same approach to determining the appropriate procedure as it has in the Bill. Where the Treasury exercises the power to create further powers, the instrument doing that will be subject to the procedure specified in Clause 3(9), which, in the vast majority of cases, will be the affirmative power.

[Baroness Kramer (LD)]

The Minister has been very helpful, but I will ask the question that I think the noble Lord, Lord Tyrie, would ask if he were still in his place: is there any kind of sunset clause on this?

[Baroness Penn (Con)]

There is no sunset clause on this power, just as there is no sunset clause on the powers in Clauses 3 and 4, so it is consistent with the approach we have taken with those other powers.

I thank the Committee for allowing me to address those points in this group. With that and the further information I shall deliver to the Committee on some of the questions from the noble Baroness, Lady Worthington, I hope that she will withdraw her Amendment 21 at this stage and will not move her other amendments.

[Baroness Worthington (CB)]

My Lords, I am genuinely grateful to the Minister for her response, which was very helpful and contained information about which I was not aware—I thank her for that. I will read Hansard in great detail. In her letter, can she explain a little more about those 18 contracts that will be covered and the retained powers? I would find that very interesting, although I am sure I can also google it.

I will now sum up. I am very grateful to the noble Baronesses, Lady Bowles and Lady Kramer, for their contributions. Returning to the statements by the noble Baroness, Lady Noakes, I am sure it is seen as a great success that we have this $600 trillion market in stuff that exists in the future, which is hugely complex and can crash the global economy. Some people will have benefited hugely from it; I have no doubt that some of those people may be in this Room. The point is that there is someone paying at the other end of that profit, and often it is the people at the very end of the chain who are trying to buy food in supermarkets or heat their homes. If a bubble in that market is definitely benefiting some—even maybe benefiting the Government, if they are receiving revenues from it—it comes at a cost, so we should be very mindful of the need to regulate that market. There is evidence after evidence of these bubbles forming because, quite frankly, the incentives to make cheap money are huge. Compared with the real economy, where you actually have to do things, build things, sell things and employ people, the desire to make money fast is overwhelming, and I do not want the UK to become the home of ever more exotic derivatives that allow us to make money the quick and easy way. Let us make banking and the financial markets boring again by getting them back to basics: using money to further society’s aims. If we cannot do that individually, we should do it collectively. I do not want to get on my soapbox, but the fact that we are exiting Europe makes that more difficult, so even more scrutiny needs to be applied now that we are setting our own rules.

I am grateful for the responses. I will end by saying that I had the pleasure of meeting a gentleman who worked in a bank that was more than 500 years old. I asked him about its ESG policies, and he listed them. They started with, “We will make no profit at all from soft commodities”, then went on to the usual checklist about arms and whatever else. I asked him where that came from, and he said, “Oh, we can’t remember”. Because it was such an old-fashioned concept—that we should take a moral position that we will not engage in profiteering from soft commodities—it sort of lapsed into the history of time.

Banking was moral once. I am not saying it is immoral now, but it is incredibly complicated. The incentives to make money in ever more novel ways are always there. Even the noble Baroness, Lady Noakes, alluded to the fact that systemic risks exist. They have existed in my lifetime and I am sure they will come again.

I am glad that we are here to do this scrutiny and very glad of the Minister’s offer to write. I hope that we will revisit some of these questions, and I will end on Amendment 41. I have personal experience of how energy companies are loath to disclose how much of their profits rest on trading. If that is the case, the markets should care about it and disclosure is the most obvious step to address it. With that, I beg leave to withdraw.

Amendment 21 withdrawn.

Amendments 22 to 25 not moved.

Amendment 26

Moved by

[Baroness Penn]

26: Schedule 2, page 126, line 39, at end insert—
“PART 4AAMENDMENTS TO THE CENTRAL COUNTERPARTIES (AMENDMENT, ETC., AND TRANSITIONAL PROVISION) (EU EXIT) REGULATIONS 201850A (1) Regulation 19B of the Central Counterparties (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2018 (S.I. 2018/1184) is amended as follows.(2) In paragraph (2) for “one year” substitute “3 years and 6 months”.(3) After paragraph (3) insert—“(4) The period determined by the Bank of England in a particular case under paragraph (2) (whenever determined) may be varied by the making of a subsequent determination.””Member’s explanatory statement
This amendment would allow the Bank of England to extend the period during which third country central counterparties that have fallen out of the temporary recognition regime following IP completion day can continue to offer services to firms in the United Kingdom, from a maximum period of one year to a maximum period of 3 years and 6 months.

[Baroness Penn (Con)]

I beg to move.

Amendment 27 (to Amendment 26) not moved.

Amendment 26 agreed.

Schedule 2, as amended, agreed.

Clause 3: Power to make further transitional amendments

Amendment 28

Moved by

[Baroness Penn]

28: Clause 3, page 3, line 15, at end insert—
“(aa) authorise the making of subordinate legislation by the Treasury;”Member’s explanatory statement
This amendment would ensure that the powers in clauses 3 and 4 of the Bill to make transitional amendments or saving provision in relation to the retained EU law listed in Schedule 1 for revocation, also include the power to confer new regulation-making powers on the Treasury.

Amendment 28 agreed.

Clause 3, as amended, agreed.

Clauses 4 and 5 agreed.

Clause 6: Restatement in rules: exemption from consultation requirements etc

Amendment 29

Moved by

[Baroness Penn]

29: Clause 6, page 6, line 39, at end insert “, and
“(ii) the Bank’s duties under section 30D(1)(a) of that Act;”Member’s explanatory statement
This amendment would ensure that when the Bank of England makes material changes to rules where consultation exemptions apply under clause 6, the Bank must publish a statement explaining how the rules are compatible with the Bank’s duties relating to the regulatory principles inserted by clause 45 of the Bill. (The words after “with” in line 38 become sub-paragraph (i)).

Amendment 29 agreed.

Clause 6, as amended, agreed.

Clause 7 agreed.

Clause 8: Designated activities

Amendment 30

Moved by

[Baroness Noakes]

30: Clause 8, page 8, line 4, at beginning insert “If the condition specified in subsection (1A) is met,”
Member’s explanatory statement
This amendment, and another, would ensure that the designation of activities did not go beyond the FCA’s operational objectives (consumer, integrity and competition).

[Baroness Noakes (Con)]

My Lords, in moving Amendment 30 I will also speak to Amendments 31 and 34 in this group. Amendments 30 and 31 would amend Clause 8 and Amendment 34 would amend Schedule 3. They all concern a new power in the Bill to designate activities that the FCA will regulate.

The power to designate activities in Clause 8 is a very wide one. I have no problem in principle with the designation of activities, as there have been too many instances in the past where activities went unchecked and where the FCA’s inaction was blamed on lack of powers. But it is not necessary to regulate absolutely everything in the financial services sector, and new Section 71K(3) of FSMA allows practically anything to do with finance to be regulated.

My Amendments 30 and 31 are modest, in that they say the power to designate activities can be used only if the Treasury thinks it necessary for the purposes of the FCA meeting its operational objectives. These operational objectives are consumer protection, enhancing the integrity of the financial system and promoting effective competition in the interests of consumers. That should not be a high bar, but it is important that when the Treasury brings forward designated activity regulations, it demonstrates that the activity is needed for these objectives and that it would not result in mission creep for the FCA.

I illustrate this with my Amendment 34, which would remove paragraph 4 from new Schedule 6B to FSMA which is introduced by this Bill’s Schedule 3. I am not at all clear why the Government have included Schedule 3, given that the unconstrained new power to designate activities expressly says that nothing in the schedule limits the power. I can conclude only that new Schedule 6B to FSMA contains the FCA’s wish list of areas that it wants to regulate.

My amendment, which deletes new paragraph 4, concerns short selling. I strongly believe that this should not become a designated activity, or should do so only if there is clear evidence that it is needed for one of the FCA’s objectives. Of the three objectives, I imagine that the only one that would be engaged is the market integrity objective, and I am not aware of any evidence that the regulation of short selling is necessary from a market integrity perspective. What enhancement of market integrity would be achieved? Is it actually necessary?

18:30

The FCA has not carried out regulatory activity in relation to short selling since the financial crisis. It requires some disclosures to be made, but only because it was required to do so by the EU. The FCA itself has said:

“Our focus is on maintaining open markets that operate with integrity. We note that an ability to short sell can contribute to this, including by supporting effective price formation, enhancing liquidity and enabling risk management.”

The Treasury’s own consultation in December 2022 made much the same point. Short selling is a healthy feature of functioning markets.

Yet the Treasury’s consultation document is clearly looking for reasons to create a full-blown regulatory regime once the EU-derived short selling regulations are withdrawn. In my view, this is the wrong direction of travel. Regulation should be evidence based and not precautionary. Regulation inevitably imposes costs, and costs are ultimately borne by consumers. The message that the Bill sends on short selling is the wrong one. I beg to move.

[Viscount Trenchard (Con)]

My Lords, I support all the amendments in this group introduced by my noble friend Lady Noakes, to many of which I have added my name. I do not need to repeat the arguments so powerfully put by my noble friend. Clause 8 amends FSMA 2000 through new Section 71K to create a designated activities regime, which allows certain activities related to financial markets to be regulated within a framework that is separate to the existing FSMA regime for authorised persons, while still being compatible with a comprehensive FSMA model. The intended purpose of the designated activities regime seems to be to enable the Government to perpetuate the various retained EU law regimes without adequate parliamentary scrutiny, particularly given earlier comments on the inadequate way in which we scrutinise SIs.

New Schedule 6B is an indicative list of designated activities. This regime may at first be used to replace the retained EU law being revoked under the Bill, but there is no apparent limitation to the Treasury extending it in future to new or different activities. The designated activities regime is almost completely unconstrained in scope and effect. As such, it could be used to ban all kinds of products and classes of provider, and/or to establish parallel licensing requirements for particular activities, for both authorised and unregulated firms. The Explanatory Notes to the Bill state:

“Initially, the government expects most designated activities to be activities which are currently regulated through retained EU law”,


suggesting that new designated activities may be introduced.

The market will be keen to ensure a level playing field for regulated activities among FCA-authorised, dual-authorised and unregulated firms. Can my noble friend the Minister confirm that FSMA 2000’s new Section 71N means that rule-making in relation to designated activities will be the sole competency of the FCA? Currently, the PRA and the Bank of England share regulatory responsibility with the FCA for a number of technical standards relating to the entering into of OTC derivatives, for instance. Additionally, if the requirements are set out in the FCA handbook for authorised firms and in separate instruments for unauthorised firms, there may be a risk of divergence and inconsistency.

I have tabled Amendment 35 as a probing amendment, on removing the admission of securities to listing on a stock exchange from the lists of designated activities. First, I would question whether listing should be a regulated activity at all, because many listings happen without an issue of new shares or other securities and may, for example, be undertaken by companies wishing to show that they are good corporate citizens that want their corporate information to be available to the public in the same way it is for other listed companies. This was certainly a major consideration when many major Japanese companies such as Toshiba, Fujitsu and Honda listed their shares on the London Stock Exchange in the 1980s and 1990s. They subsequently undertook capital-raising exercises involving the issuance of securities, but those were separate exercises. I see no reason why unregulated firms may not act as sponsors for stock exchange listings, and therefore would question why the arrangement of listings should be a regulated activity.

Do the Government intend as a matter of urgency to act on the recommendations in the listings review undertaken by my noble friend Lord Hill of Oareford? Does the Treasury intend to undertake a fundamental review of the prospectus regime, as recommended by the review? Does my noble friend agree with the recommendation that prospectus requirements should be changed so that, in future, admission to a regulated market and offers to the public are treated separately? Could she tell the Committee whether she thinks that the empowerment of the FCA through the designated activities regime will make stock exchange listings more expensive and cumbersome than they have become during the past 14 years, or less? In that time, as my noble friend Lord Hill pointed out, the number of companies listed on the London Stock Exchange has declined by 40%. I look forward to hearing the Minister’s comments.

[Lord Stevenson of Balmacara (Lab)]

My Lords, I shall speak to Amendment 32 in name, which is part of this group, although it points in a slightly different direction from the speeches we have just heard. I declare an interest, as I was chair of StepChange, the debt charity, in the period 2010 to 2014, although I have no current connection with it.

This is a probing amendment aimed at ensuring that a particularly egregious form of high-cost credit, log-book loans, issued under the bills of sale legislation dating from Victorian times, is afforded the customer protection measures rightly offered to consumers who use other forms of credit. In that sense, it needs an extension of the power discussed in this clause. To be clear, I would much prefer it if the Bills of Sales Acts of 1878 and 1882, and their related legislation, could be repealed. One way or another, I hope that some speedy action can be taken to resolve this issue. Such efforts appear to have stalled, despite a lot of work nearly a decade ago by the Treasury and the Law Commission.

Over the past few years, the Government and the FCA have been largely successful at clearing up the high-cost credit market. It is true that they had to be pushed to get started, and many noble Lords present may recall this House playing a significant part in focusing attention on payday loans, for example. But there are still issues to be addressed. The consumer duty is also a valuable step forward, and I hope that it will be a great success. At the same time, the introduction of statutory backing for the debt respite—the breathing-space regulations—and the forthcoming statutory debt repayment plan will offer immediate and effective help to the many hundreds of thousands of people who face unmanageable debts each year. The Government have done well in this area, and I commend them.

However, the current credit squeeze and cost of living crisis are going to exacerbate this situation. Indeed, if past history is a guide, logbook loans may well become as prevalent as they were in in 2014, when 52,000 bills of sale were registered in one year at the High Court. As I said, logbook loans are issued under bills of sale, which are governed by two Victorian statutes that I have already mentioned: the Bills of Sale Act 1878 had immediately to be amended, so there is also the Bills of Sale Act (1878) Amendment Act 1882. Basically, they allow individuals to use goods they already own as security for loans while retaining possession of the goods. This legislation is archaic and, in the words of the Law Commission,

“wholly unsuited to the 21st century.”

It went on to say that

“it causes detriment to all those who use it, including logbook lenders, logbook borrowers, business borrowers and third party purchasers.”

Nobody, it seems, has a good word to say for them.

This is all set out in a substantial Law Commission Report commissioned by HM Treasury in 2016. In that report, the Law Commission went on to point out the following. Most people who take out logbook loans are borrowers who already have difficulty in securing other forms of credit. Its research revealed that the term is usually six months to three years, while the interest rates ranged from 60% to 443% APR but were usually in the range of 120% to 187%—high-cost credit indeed.

There are complaints that some lenders use the threat of repossession of the goods to demand unreasonable and unaffordable extra payments, even when the loan is substantially repaid—something which is not permitted in, for example, hire purchase agreements. However, logbook loans lie outwith modern consumer protection legislation. It is true that the Financial Ombudsman Service may provide redress after the event, but the FOS is not able to prevent repossessions. There is no protection afforded to private purchasers who buy goods subject to a bill of sale, even if they act in good faith. Those who buy a second-hand car without knowing it is subject to a car-book loan face an unpalatable choice: pay off somebody else’s loan or lose the car.

The 1882 bills of sale legislation requires all bills of sale to be completed on a complex standard form and registered with the High Court, which uses a paper-based record system. Failure to comply with any of the documentation requirements carries substantial sanctions, not least being that the lender loses any rights over the goods or money owed to them. Those sanctions clearly would be out of scope if current consumer protection standards applied, but—

18:42

Sitting suspended for a Division in the House.

18:52

[Lord Stevenson of Balmacara (Lab)]

As usual, I have forgotten where I was in my perorations, so the Committee might get a few words that it has heard already, which can be ignored. I think I was talking about the requirement in the 1882 legislation that all bills of sale have to be completed on a particularly complex standard form, and then registered with the High Court, which, of course, uses a paper-based record system. The sanctions for failing to comply with any of its documental requirements would be out of scope if current consumer protections applied, and lenders are understandably loath to amend them.

It costs about £45 to register a bill of sale with the High Court, and another £50 to search it. That does not happen very often, because you cannot search by vehicle registration number or any other useful form; it is just a simple list of all the registered cases.

I think most people would agree that the Law Commission makes the case very well for the repeal of the Victorian bills of sale legislation. What is so disappointing about all this is that, originally, the Treasury seemed to share that view. In a Ministerial Statement in February 2017, the Government accepted

“the overarching thrust of the recommendations”,—[Official Report, Commons, 7/2/17; col. 6WS.]

albeit warning that they would not proceed until they had further reflected on some of them. The reflection took the form of a limited consultation with stakeholders, which received 25 responses, after which the Treasury decided not to take forward the draft Law Commission Bill. The principal reason given was that several of the 25 respondents felt that some of the consumer protection proposals in the draft Bill prepared by the Law Commission did not go far enough. It is almost difficult to believe that.

That remains the position. I have tried to keep the pressure on: I took over the Law Commission Bill as a Private Member’s Bill. I got 10th place in the ballot one year, but then lost the Bill because of a snap election called by, I think, Mrs May—I forget now who was Prime Minister. However, I have had meetings; in 2019 I was kindly joined by the noble Lord, Lord Young of Cookham, and the then Economic Secretary to the Treasury, John Glen, but to no avail. In his last letter to me, he accepted that there was consumer detriment taking place but, as numbers of logbook loans were falling, he said he believed

“that the rationale of the Government’s decision not to proceed with legislative reform in this area still stands”.

John Glen is now promoted and in the Cabinet, and I am where I am. However, I respectfully disagreed with him then and still do today. Only a few months ago, I was written to out of the blue—they must have got my name from the news about the Bill when it was first introduced—by people who had been scammed, aided by logbook loan legislation. An elderly couple had put all their hard-earned savings into a motor home, which they wanted to use for their retirement. Just when they had completed the purchase and the renovations, spending almost as much again as they had on buying the vehicle, they discovered that it had mysteriously acquired an outstanding logbook loan, and they lost the vehicle and their capital. This is the sort of thing that happens.

I look forward to the Minister’s response today, and I remain willing to attend further meetings if she thinks that might help move this issue forward. I know from discussions with StepChange that consumer detriment is still happening in this area. I agree with the FCA, which I spoke to earlier in the week, that the credit squeeze, inflation and the energy cost crisis is going to make the return of logbook loans—and, indeed, many other forms of high-cost credit—as inevitable as it is undesirable. If accepted, my amendment would give the FCA the tools it needs to assist the many people affected by this egregious legislation—albeit I still believe that the right solution is for the Government to commit now to repeal the Victorian legislation as soon as reasonably practicable.

[Lord Naseby (Con)]

My Lords, I am not going to repeat what my noble friends Lady Noakes and Lord Trenchard have said, but I certainly think that His Majesty’s Government—I am a very loyal member of the governing party—need to recognise that this is a once-in-a-lifetime opportunity in this Bill. Therefore, for me, the driving force should be to ensure that in doing what we are doing—I accept that it is important to mention designated activities—we should be driven by the need for growth for our economy, good competition and innovation. Those things are so key to the future of this country, the City and the whole of the financial services area that we need to be a little bit careful. I think that my noble friend Lady Noakes’ proposal is a perfectly valid one. The Government can have another look at it, but I do not think that it is necessary.

[Baroness Bowles of Berkhamsted (LD)]

My Lords, I have some questions which arise from what the noble Baroness, Lady Noakes, said. If we want to go back to before the EU had the single market in financial services, we need to know how it worked with short selling. Unfortunately, I do not know how it all worked in the UK back then. When we started to do, or were forced into doing, the short selling regulation, I was told repeatedly from all sides in the UK that we did not need it but that naked short selling was banned. A lot of the concern was about short selling when you had not actually located where you would be able to get the share from for delivery. After the regulation was done, you had to know where you were going to get it, and it was a little firmer. However, I was assured that the wording was more or less the same as was applied, so how did we apply it? We did not have a designated activity regime.

There may be lots of little snippets around in financial services where you just need a simple rule like that—that you cannot do naked short selling but covered short selling is fine—without having lots of regulation, reporting and things around it. How are we going to do this? Would we do a designation just for a one-line piece of information? This is a genuine question, because absurdities begin when you have to invoke something that then requires complex rules. As soon as you go beyond the simple principle of no naked short selling, it will become a much bigger thing, as the European regulation did. There are other drivers for that, and it may be that more than just not doing naked short selling is necessary. My question is, within this designated activities regime, how do you do just one simple, little thing?

19:00

[Baroness Kramer (LD)]

My Lords, I fear that if we were to follow the amendment from the noble Viscount, Lord Trenchard, we would indeed permit naked short selling. Like most people, I have no problem with short selling in highly liquid markets.

[Viscount Trenchard (Con)]

I am a little surprised that the noble Baroness is taking my name in vain here. My amendment is not about short selling; it is about listing.

[Baroness Kramer (LD)]

I apologise; it was the noble Baroness, Lady Noakes. I have attacked the wrong conspirator, as it were. I say to her that my concern, from listening to various people argue for changes in the rules that govern short selling, is that that is exactly what they have in mind, the argument being that if we allow short selling then illiquid markets will suddenly become much more liquid because many more players will be attracted into that particular end of the market. There is a great deal of risk at play, so I am quite nervous about making that kind of change. We always assume that the investors who would engage in these products would be highly sophisticated and understand fully the risks they are involved in, but the practical reality that we see in everyday life is that many people get involved who, frankly, have insufficient understanding and find themselves very much at risk.

It is for a similar reason that I say to the noble Viscount —I think accurately this time—on ending regulatory criteria for listing, that the listing issue is quite complex. I was one of the people who agreed with the IoD—I do not agree with the IoD all that often—on the changes that the London Stock Exchange made to enable a secondary listing for Aramco. It did not end up with the business, but the IoD was very concerned that the LSE compromised its approach to corporate governance to get that listing, which would obviously have been a highly profitable activity. That issue made the IoD very irate. It described it as

“an opportunistic attempt at boosting short-term primary issuance which ignores the longer-term implications for the overall UK corporate governance regime.”

This is actually quite a contentious area, so removing it completely from the regulatory sphere strikes me as rather dangerous.

I will bring my comments to a halt, except to say to the noble Lord, Lord Stevenson, and to the Government that the noble Lord should not have to fight such a difficult battle to try to deal with such a potential abuse. I wonder whether the Minister might, on a very personal basis, take up the cudgels here, because Ministers sometimes are in a position to get the relevant action that has been sitting many pages back on the back burner. I remember the battles we had to get rid of payday lenders. In the end, the noble Lord, Lord Sassoon, working very closely with all parts of the House on a very personal basis, was able to bring in the legislation that brought an end to that kind of abuse of consumers. The Minister has a very good precedent in the noble Lord, Lord Sassoon, and his capacity to use financial services legislation to deal with an aberration that puts people at risk.

[Lord Tunnicliffe (Lab)]

I am not persuaded by the amendments in this group, apart from the one from my noble friend Lord Stevenson. Obviously, I shall listen to the debate and check Hansard before we come to Report. My noble friend’s amendment may not be the right way to address this problem, but, in all honesty, it has been five and a half years since this issue was spotted. There has been a perfectly good Law Commission report, as I understand it, which makes a very strong case. It is no good saying that we will cover this elsewhere, or that it has to be integrated. There is a solution to this problem, and it is important that the solution happens in this Bill. I strongly commend to the Minister that she “does a Sassoon” and comes up with an acceptable compromise so that an end is put to what I would call almost an evil practice.

[Baroness Penn (Con)]

My Lords, I shall briefly address government Amendment 33 in this group before I turn to the other amendments.

Government Amendment 33 fixes a minor drafting error in Clause 8, which introduces the designated activities regime, or DAR. Subsection (2)(a) of new Section 71P of FSMA states that contravention of a DAR rule does not constitute an offence except as provided under regulations made under Section 71R. These provisions allow the Treasury, when designating an activity, to apply existing criminal offences within FSMA to that activity. This amendment inserts a cross-reference to new Section 71Q, as it too makes provision for DAR regulations to apply existing criminal offences in FSMA.

Amendments 30 and 31 together seek to prevent the Treasury designating, and therefore bringing into regulation through the DAR, any activity unless the regulation of that activity is necessary for the FCA to further its operational objectives. I assure my noble friend that the FCA will be required to make rules relating to designated activities in a way which, as far as is reasonably possible, furthers one or more of its operational objectives. Simply put, the FCA will not be able to make rules about a designated activity unless doing so is in line with its objectives under FSMA. This approach is modelled on the way activities are currently regulated under FSMA, whereby the Government determine the regulatory perimeter by specifying which activities are regulated, and the regulators then make rules to advance their objectives.

Amendments 34 and 35 seek to remove short selling and the admission of securities to trading from the list of activities in Schedule 3. That schedule inserts new Schedule 6B into FSMA; Schedule 6B is designed to give noble Lords a sense of the types of activity that Treasury may designate under the DAR. However, my noble friend is absolutely right that this is an indicative list and does not mean that Treasury will designate that activity in future, or that it will do so in the way described in the schedule. Should the Treasury decide to designate short selling or the admission of securities to trading in future, it will be through a statutory instrument subject to the affirmative procedure, so that Parliament can fully consider and debate the implications.

I should say to my noble friend that the list included in Schedule 6B is not an FCA wish list: it is a set of activities currently regulated through retained EU law that may be appropriate for the designated activity regime. I should also be clear to my noble friend and to the Committee that the Government believe that there should be a regulatory regime for short selling in the UK.

My noble friend set out that short selling can play a role in the healthy functioning of financial markets. It provides essential liquidity to markets, helps to ensure that investors pay the right price when investing in shares, and allows investors to manage risks in their portfolios. However, there can also be risks associated with short selling. For this reason, all major financial services jurisdictions, including the UK, have some form of short selling regime. Noble Lords will know that the losses that short sellers can incur if prices increase rather than fall have no upper bound, making it riskier than a traditional investment. In exceptional periods, markets can be dysfunctional, and there is a risk that short selling can exacerbate volatility and undermine market integrity.

The UK intends to regulate in this area, and, as the noble Baroness, Lady Bowles, notes, the UK has a history of regulating short selling which predates the introduction of the EU’s short selling regulation. Parliament legislated to give the FSA specific powers over short selling in 2010 and, prior to that, the FSA took action to address instances of short selling in the financial crisis. The powers in the Bill will allow the Government to put in place a proportionate and appropriate short selling regime that is tailored to the needs of UK markets, companies and investors. The Treasury has issued a call for evidence to support this work, which will close in March.

To answer the question asked by the noble Baroness, Lady Bowles, on how you do just one simple thing, the DAR has been designed to be flexible and proportionate and would allow the Treasury to do something very targeted if appropriate. It removes the need to introduce a Bill every time something small but important arises, and it removes the need as potentially an alternative form of regulation for it to make a regulated activities order and for it to be regulated under that regime with the associated regulations of the authorised persons that come along with it rather than just the activity itself.

On regulation for companies listing on a stock market, the Government are in the process of a fundamental overhaul of the prospectus regime. There is clear scope to make this simpler and more effective and enhance the competitiveness of UK capital markets. I reassure my noble friend Lord Trenchard that the Government have committed to deliver the outcomes of the UK Listing Review from the noble Lord, Lord Hill. We published an illustrative statutory instrument in December showing how the Government plan to use the DAR to put in place a simpler, more agile and more effective listing regime. I therefore reassure my noble friend that the Government are fully committed to improving the attractiveness of UK markets, and that the powers in the Bill will be used to deliver on that objective.

My noble friend also asked whether the FCA is the only regulator able to make rules under the DAR. I can confirm that it is the only regulator that would have powers under this regime.

Amendment 32 from the noble Lord, Lord Stevenson, seeks to enable the DAR to regulate currently unregulated credit agreements secured by bills of sale. As the noble Lord set out for the Committee, the Bills of Sale Acts allow borrowers to use goods which they already own as security for a loan, while retaining possession of those goods. Today, they are most commonly used for logbook loans. Logbook loans are a type of high-cost credit regulated by the FCA in which a consumer uses their car as security, while allowing the consumer to keep using their vehicle. However, bills of sale are also used for other unregulated secured lending, such as businesses which wish to borrow against their assets, such as machinery.

I understand that the noble Lord would like to see the framework for these products modernised, and we have discussed this during the passage of previous Financial Services Acts, although his work on it predates that. He has suggested that the DAR might be the way to achieve this.

As the noble Lord noted, the Government previously considered repealing the Bills of Sales Acts and replacing them with a new goods mortgages Act. While there was support for this approach by many stakeholders, others raised significant concerns about the degree of consumer protection afforded by the proposed regime. The Government were also concerned that a modernised and streamlined regime could lead to more consumers using goods that they already owned as security for a loan, which is inherently a higher-risk form of borrowing.

19:15

Given the concerns raised in the consultation and the shrinking size of the market, the Government decided not to take forward the goods mortgages Bill. However, the Government are committed to a modern and well-functioning consumer credit market. That is why, in December 2022, the Government published a consultation on reform of the Consumer Credit Act, which asks stakeholders for input on the strategic direction of reform. The consultation also asks questions about how the consumer credit regulatory environment could be changed to ensure optimal performance of the regulation surrounding customer communications, consumer protections and sanctions for firms that do not adhere to regulatory standards. That work is ongoing; I reassure the noble Lord that the Treasury will carefully consider any representations received from stakeholders in response to that consultation regarding this important issue.

I should emphasise that, as the noble Lord will know, logbook loans are a declining market, with the number of bills of sale registered at the High Court falling from 52,000, as he noted, to 3,758 in 2020. Since then, it has shrunk further: last year, just 1,275 bills of sale were registered. None the less, we recognise the noble Lord’s concerns about bills of sale. If it is desirable to him, perhaps we could meet to discuss whether the reforms to the Consumer Credit Act represent a good way forward in addressing this issue. We might put our thinking caps on about whether any other avenues would be better suited. Although I really should emphasise that I cannot say whether I will achieve my noble friend Lord Sassoon’s levels of delivery in this area, I am more than willing to sit down and try.

That draws my remarks to a close. I hope that my noble friend will feel able to withdraw her amendment and that other noble Lords will not move theirs when they are reached.

[Baroness Noakes (Con)]

My Lords, I thank my noble friend the Minister for her comprehensive reply to this short debate. I also thank all noble Lords who have taken part in it.

For my amendments, one was in relation to whether the Treasury’s power to designate activities should be constrained in any way. I understand that the FCA will of course be able to make rules only in accordance with its own objectives. I was trying to put an earlier hurdle in: that the Treasury should go in that direction only if it has had evidence that there was need in relation to the FCA’s objectives. I regret that the Minister indicated that she did not want to go down that route, so I will have to think carefully about that.

I was disappointed though perhaps not surprised on short selling, because there is a kind of prevailing view that if something moves in financial services, it ought to be regulated somehow. I can see that if it was regulated in the EU, it will end up being regulated again and some of the advantages of us having left the EU will simply not be realised because there is a mindset, in particular in the Treasury, which never wanted to leave the EU, that what happened in that era of our membership has to be preserved if at all possible. That is, as I say, disappointing to me.

When the noble Lord, Lord Stevenson of Balmacara, got up, I thought, “It’s déjà vu all over again”, because I too remember our debates on earlier financial services legislation. However, I believe that he has a good point and I was particularly glad to hear my noble friend offer a small possibility that some progress might be made. I think the whole Committee would be happy if that could be achieved, because it clearly does not seem like a happy state of affairs. With that, I beg leave to withdraw my amendment.

Amendment 30 withdrawn.

Amendments 31 and 32 not moved.

Amendment 33

Moved by

[Baroness Penn]

33: Clause 8, page 10, line 31, after “provided” insert “by designated activity regulations under section 71Q or”
Member’s explanatory statement
This amendment would insert a cross-reference to section 71Q to ensure that the exception in section 71P(2)(a) of the Financial Services and Markets Act 2000 as inserted by clause 8 of the Bill (on liability in connection with designated activities) also refers to designated activity regulations under section 71Q.

Amendment 33 agreed.

Clause 8, as amended, agreed.

Schedule 3: New Schedule 6B to FSMA 2000

Amendments 34 and 35 not moved.

Schedule 3 agreed.

Clauses 9 to 11 agreed.

19:20

Sitting suspended for a Division in the House.

19:30

Clause 12: Treasury directions to Bank of England: restrictions

Amendment 36

Moved by

[Baroness Noakes]

36: Clause 12, page 19, line 25, at end insert—
“(4) Omit subsections (3), (6) and (7).” Member’s explanatory statement
This amendment probes why the power to make recommendations to and obtain information from “bankers” remains relevant.

[Baroness Noakes (Con)]

My Lords, Amendment 36 would delete some subsections from Section 4 of the Bank of England Act 1946, the only nationalisation legislation that made any sense. Indeed, it was surprising that the Bank of England existed outside the public sector for as long as it did—the best part of 250 years. Section 4(3) says:

“The Bank, if they think it necessary in the public interest, may request information from and make recommendations to bankers, and may, if so authorised by the Treasury, issue directions to any banker for the purpose of securing that effect is given to any such request or recommendation”.


Subsection (6) says that a banker is any banking undertaking that the Treasury declares to be a banker for the purpose of Section 4. That is quite a sweeping power in relation to all kinds of banks: retail banks, commercial banks, investment banks and so on.

This is a probing amendment to find out why on earth this power is still on the statute book, given that we have a highly defined system of prudential regulation laid out in extensive detail in FSMA. In addition, the various Bank of England Acts deal with the Bank’s other functions. Collectively, the legislation gives extensive powers to the PRA, the Monetary Policy Committee, the Financial Policy Committee and the Bank of England itself. There is no deficit in powers related to bankers, as anyone operating in the financial services sector will attest.

Why does Section 4 retain these powers? How often have they been used? When was the last time they were used? If my noble friend cannot make a case for these powers still being needed—if they were ever needed—I invite her to agree to their removal from the 1946 Act. I beg to move.

[Baroness Penn (Con)]

My Lords, my noble friend has just described what Amendment 36 probes and the power it is seeking to look at, so I will not repeat that. What I will say is that the power is designed to be used only when it is necessary to do so in the public interest, such as in an unexpected or emergency scenario.

The Government looked at some of my noble friend’s questions. We are not aware that the Bank has ever used this power, but it could be useful in some scenarios—for example, for the Bank to require certain actions from troubled firms during a period of financial crisis. As we saw in 2007-08, such crises can develop quickly and create novel policy challenges that may not be anticipated in advance. As such, the Government consider the power to be a useful potential backstop. Any changes to this power would require careful consideration and consultation before acting.

I have been brief, but I hope that I have answered my noble friend’s questions, at least in part, and that she feels able to withdraw her amendment.

[Baroness Noakes (Con)]

My Lords, I rather thought I would get that answer—that the power has never been used—because I certainly could not recall any situation when it could have been used. My noble friend the Minister has put up a good case for keeping something that has been there since 1946—which is rather a long time—and has never been used but might be needed in an emergency, notwithstanding that, certainly for the last 20 years, we have been legislating on financial services and banks in extenso and there exists a range of powers that any intelligent person involved in this area thought that the Bank or the PRA would ever need to use. I think the case for removing these powers is unanswerable. I hope that my noble friend the Minister might think a little more about that between now and Report. It would be a good thing for the Government to bring forward something that would clean up our statute book. I beg leave to withdraw.

Amendment 36 withdrawn.

Clause 12 agreed.

Clause 13 agreed.

Schedule 4 agreed.

Clauses 14 to 17 agreed.

Clause 18: Critical third parties: designation and powers

Amendment 37

Moved by

[Baroness Noakes]

37: Clause 18, page 29, leave out lines 34 to 36 and insert—
“(3) In complying with the duty in subsection (1) the relevant regulators must ensure that any information or other requirements imposed on a critical third party minimise, so far as is reasonably practicable, the burden placed on the critical third party.”Member’s explanatory statement
This amendment shifts the emphasis from burdens on regulators to burdens on third parties.

[Baroness Noakes (Con)]

My Lords, I understand regulators’ desire to have more insight into the risks that critical third parties present to the provision of financial services. The regulators have been fretting about the provision of cloud services for some time—not always with good cause, because cloud providers offer some significant benefits to financial services firms in a range of areas. The PRA and the FCA have already increased their focus on critical third party suppliers by way of operational resilience requirements on regulated firms, and they already have the ability to get information via the regulated firms.

I was not hugely surprised to find a regulatory power grab regarding critical third parties in this Bill, but I was genuinely shocked to find 10 whole pages of legislation giving the regulators huge powers over critical third parties: the power to make rules, a power of direction, information powers, censure and disciplinary powers, and so on. This is typical regulatory gold-plating of the kind that I hoped we had left behind when we exited the EU. The Treasury ought to be on the alert against this kind of thing, rather than being complicit in it.

The regulators will have to exercise real care when they use these new powers. It would be a very bad outcome if some—for example, the cloud providers or the major ICT providers—decided to exit the UK financial services market because of heavy-handed regulation. If that happened it would likely increase the concentration risk within the financial services sector, as well as reducing competition in the provider market.

My Amendment 37 is in fact extremely modest. TheCityUK has called for one of the regulators to be in the lead for any critical third party, so that the likelihood of duplicative requirements and other burdens between the regulators involved would be minimised. TheCityUK is not comforted by the co-ordinating duty in the new Section 312U of FSMA because just about everybody who has been involved in financial services has been on the receiving end of unco-ordinated regulator action, despite the existence of co-ordinating duties already in FSMA. Those duties have not been a resounding success, and I may return to the idea of a lead regulator on Report.

For today, my Amendment 37 would delete subsection (3) of new Section 312U and replace it with a more third-party friendly version. Subsection (3) says that the duty to co-ordinate

“applies only to the extent that compliance with the duty does not impose a burden on the relevant regulators that is disproportionate to the benefits of compliance.”

This is typical of regulation, in particular financial services regulation. It sees things through the prism of the regulators, not the persons impacted by the regulation. My amendment would replace this with a requirement to minimise the burden placed on critical third parties so far as is reasonably practicable.

I do not regard this rebalancing of the new rules as a radical proposition in the context of the radical new powers that are being taken. The impact on third parties really does need to be taken into account, and it is curiously absent from the 10 pages of the Bill dedicated to the new powers over critical third parties. The need for rebalancing of the new regulatory provisions ought to go wider than the duty to co-ordinate, and I should probably have drafted something broader to consider in our Committee today. My purpose is to probe how the Government see the new provisions impacting on third-party suppliers, not just on the regulators, and whether they even acknowledge that they might have created something of a monster in these new rules. I beg to move.

[Baroness Kramer (LD)]

My Lords, I shall speak only very briefly, because I have a great deal of sympathy with the proposition that the noble Baroness, Lady Noakes, puts before us. The resistance in the industry to rules is not to the principle of the rules but to the way in which they operate, and the cumbersome methodologies—the dotting of every i three times and crossing of every t four times—that drives people completely insane. It has undermined respect for both the regulator and its effectiveness. The noble Baroness, Lady Noakes, said she had something broader in mind, and she will find amendments coming forward later, particularly in the name of my noble friend Lady Bowles, focusing on the issue of efficiency. I think that is something we would all like to see.

There are those who would like to see less regulation per se, and those like me who are very cautious about having less regulation. Obviously, less regulation may release animal spirits and innovation, as the noble Lord, Lord Naseby, pointed out earlier; in fact, he did not talk about animal spirits, but he talked about innovation. The downside is that light-touch regulation could leave you with a financial crisis, an awful lot of victims and, potentially, an undermined economy. It is very asymmetric. But efficiency ought to be built into the very heart of this, and regulation ought to be designed to put a minimum operational burden on the various parties affected. If we can adopt that somewhere as a principle in the Bill, it would be exceedingly useful.

[Baroness Penn (Con)]

I thank my noble friend Lady Noakes for her amendment. It is a good opportunity to talk about the Government’s proposals for mitigating the systemic risk posed by critical third parties in the finance sector, such as cloud service providers. The Government agree with the spirit of what my noble friend and the noble Baroness, Lady Kramer, have said.

The critical third parties regime has been designed with the aim of minimising the burden placed on these parties, while mitigating the systemic risks that could be posed by the use of these services. Rather than bringing, for example, a whole cloud services provider into the financial regulators’ remit, the regime instead gives the regulators powers over only the services that a critical third party provides to the financial services sector. I believe that that approach contrasts with the EU approach known as DORA, which I thought was the name of my parents’ dog. DORA bears similarities to the UK’s approach, but I am told that it is less proportionate than our regime, which targets only the services provided to the finance sector and not whole firms.

Proportionality and resource-effectiveness are therefore built into the design of the regime. I draw all noble Lords’ attention to the obligations that the regulators already operate under, including those resulting from FSMA, and the Bank of England Act 1998. In addition to public law obligations to act reasonably and proportionally, the regulators must also have regard to their regulatory principles. These include the principle that burdens or restrictions imposed on a person should be proportionate to their expected benefits. As the noble Baroness, Lady Kramer, indicated, we will come back to this question of proportionality and effectiveness as we go through our debates in Committee.

19:45

In addition to this, the obligations in Clauses 138I and 138J of FSMA require the PRA or FCA to consult on proposed rules, meaning that third-party service providers, including those that might be designated as “critical” under this regime, will have an opportunity, through public consultation, to comment on and help to shape the requirements and expectations they will be subject to.

I hope that this goes some way to reassuring my noble friend that, in the wider regime, the intention of her proposed amendment has already been fulfilled through existing public law obligations and requirements in FSMA and the Bank of England Act 1998 around proportionality. I also pointed to the example that, in our design of the regime, we took the opportunity to make it more targeted than, for example, the EU regime. I hope that she will therefore withdraw her amendment now, although I feel we may return to it on Report.

[Baroness Noakes (Con)]

My noble friend correctly anticipates how I intend to conclude my remarks. We will return to this in Committee because, as she noted, I and other noble Lords have tabled amendments on proportionality. Although proportionality is in the legislation as a regulatory principle, there are considerable concerns among those who are regulated that proportionality does not mean much to regulators—or that it never seems to actually bite.

I am grateful for the information on my noble friend’s parents’ dog, and I have learned something about the EU that I did not know before—although I do not generally need to learn things about the EU. We will also return to the important issue of efficiency. I have added my name to at least one of the amendments on efficiency in the name of the noble Baroness, Lady Bowles.

The weight of this regulatory package that has been put together looks scary to those who may potentially be drawn within it, and there are concerns among those who wish to use the services of cloud providers in particular—but also some of the other ICT providers —that the UK regulators will scare off things that are important to them.

I will read carefully in Hansard what my noble friend has said, but I feel that we will probably need to return to one or more specific aspects of this on Report, as well as explore further the issues of proportionality and efficiency in Committee. However, for today, I beg leave to withdraw my amendment.

Amendment 37 withdrawn.

Clause 18 agreed.

Clauses 19 and 20 agreed.

Schedule 5 agreed.

Clause 21 agreed.

Schedule 6 agreed.

Clauses 22 and 23 agreed.

Committee adjourned at 7.49 pm.

House of Lords

Wednesday 25th January 2023 Lords Chamber

Wednesday 25 January 2023

15:00

Prayers—read by the Lord Bishop of Durham.

Local Councils: 2023-24 Budgets

Wednesday 25th January 2023 Lords Chamber

Question

15:06

Asked by

[Baroness Taylor of Stevenage]

To ask His Majesty’s Government, given the impact of current levels of inflation on budget planning for local councils for 2023–24, what support they are providing to councils in setting balanced budgets and ensuring that local services are delivered.

[The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Scott of Bybrook) (Con)]

We recognise that councils are facing pressures, which is why, taking 2023 and 2024 together, we have increased the funding available to local government in England in real terms. The provisional local government finance settlement for 2023-24 makes available up to £59.5 billion for local government in England—an increase of up to £5 billion, or 9%, in cash terms on 2022-23—and includes a £2 billion additional grant fund for social care. We consulted on these proposals until 16 January, and will consider the responses prior to publishing the final settlement in early February.

[Baroness Taylor of Stevenage (Lab)]

My Lords, I thank the Minister for her Answer. Those standing as councillors do not do so to cut services for their residents. The Local Government Association estimates a gap in funding of £3.2 billion this year, rising to £5.2 billion next year. Across the country, local councillors are taking awful decisions on closing libraries, swimming pools, children’s centres, domestic abuse services, nurseries, transport services for disabled children and more. Even Tory Hertfordshire says that it has exhausted all options for service cuts. Do His Majesty’s Government recognise that cutting local services puts pressure on other public services? Why has the fair funding review for local government ground to a halt?

[Baroness Scott of Bybrook (Con)]

My Lords, as I said, we recognise that councils are facing pressures but the 9% announced in the Autumn Statement is, in real terms, an increase in funding. Local government is having to meet pressures in the same way as every resident in this country is under pressure. As I said in answer to a question yesterday, we will look further at funding issues for local government in future—probably not in this Parliament but in the next.

[Lord Laming (CB)]

My Lords, the Minister will know that, in the decade from 2011, there was an estimated 22% real-terms reduction in local authorities’ purchasing power, despite that being a decade of considerable increase in demand for services. Does the Minister accept that it will be some years before local government will get back to the spending power that it had in 2011?

[Baroness Scott of Bybrook (Con)]

My Lords, local authorities across this country are doing some very creative things to make their money go further. They are working closely with others in their local areas to deliver the services that their residents deserve. I think that this will go on. Through the levelling-up Bill that has come here, we will see different ways in which local government can join together to make itself far more financially viable.

[Lord Young of Cookham (Con)]

My Lords, allowing local authority expenditure to increase by 9.2% in cash terms seems reasonable to me against the background of the current economic challenges. However, if, pursuant to my noble friend the Minister’s reply, a local authority thinks that that is wrong for its area, it is free to spend more if it can persuade the local electorate to vote for that in a referendum. Is that not a more democratic way of approaching local government finance than the crude rate-capping that we had before?

[Baroness Scott of Bybrook (Con)]

I absolutely agree with my noble friend, not only on that point but that councils can look to a referendum. It is important that, if they look for a referendum, they say what they are going to spend the money on so that local people have a choice.

[Baroness Andrews (Lab)]

My Lords, is the Minister aware that, in the first few months of last year, 2.2 million hours of adult social care were lost? This year, we have half a million people waiting for a care assessment, a care package or to have some care sorted out. Does she agree that adult social care and the community basis for adult social care should be a priority in the Budget? The Health Secretary believed this when he was chair of the Health and Social Care Committee in the Commons. Will she remind him of his promise to increase funding and will she engage with her Treasury officials and her Ministers to make that happen?

[Baroness Scott of Bybrook (Con)]

My Lords, adult social care has been an issue to be solved for not just this Government but many Governments before them. The Government are putting more money into adult social care. They put £2 billion more into local authority funding this year for it, and we will continue to look for better ways of delivering adult social care, working with the NHS as well.

[Baroness Thornhill (LD)]

My Lords, according to LGA evidence, without further government intervention 74% of council areas are at risk of losing their local swimming pool or reducing leisure services due to rising fuel costs, and that is this year. Can the Minister explain why the Government’s energy bills discount scheme includes museums and libraries, which is very welcome, but surprisingly excludes public leisure facilities? Can she please check whether the Government were aware of this evidence when they drew up the recent scheme? Will they seriously reconsider classifying pools and leisure centres as energy intensive, as they surely are?

[Baroness Scott of Bybrook (Con)]

My Lords, the energy bill relief scheme this winter provides a discount on energy for councils whose bills have been significantly inflated. This scheme was to run until 2023, and in January the Government announced that the energy bills discount scheme would run for a further year, until March 2024. But the noble Baroness opposite is right; I have already asked that question, and when I get an answer, I will come back to her.

[Baroness Buscombe (Con)]

My Lords, on average, how much of all local authority expenditure is spent on public sector pensions?

[Baroness Scott of Bybrook (Con)]

I am very sorry that I cannot give my noble friend that answer from the Dispatch Box. I will look into it and come back to her.

[Lord Sahota (Lab)]

My Lords, councils up and down the country had to reduce just about every service to make ends meet. Because of the Government’s cuts for the last 13 years, many councils are on the edge of a financial cliff and have even considered a Section 114 notice. Can the Minister tell me when this nightmare will end for our local communities?

[Baroness Scott of Bybrook (Con)]

My Lords, there are also some councils doing extremely well in keeping services running. We continue to monitor the sector’s finances and stand ready to speak to any council and support it if it has concerns about its ability to manage its finances or faces pressures that it has not planned for. We are working with local authorities to do that so that they do not get to the point of an S114.

[Lord Shipley (LD)]

My Lords, when will the review of business rates take place?

[Baroness Scott of Bybrook (Con)]

I do not have a date for that.

[Lord Watts (Lab)]

My Lords, can the Minister tell the House what inflation figure was used when the local government settlement was made?

[Baroness Scott of Bybrook (Con)]

I cannot tell the noble Lord what inflation figure was used, but I think that 9% is a very reasonable figure in the economic situation that we are in at the moment, due to many things, such as Covid and the Ukrainian war.

[Lord Brooke of Alverthorpe (Lab)]

Does the Minister agree that one of our problems is that the current council tax structure is well past its sell-by date and needs changing? In those circumstances, and building on the noble Lord’s suggestion about a referendum, would they permit a council to run a referendum for a restructuring of its council tax?

[Baroness Scott of Bybrook (Con)]

I do not think that there is anything in the rules that allows them to do that. As I said yesterday, we are looking at updating the local government finance system. It has been an issue to get right for a long time, under many different Governments. We have said that we will continue to look at it, carry out a review—particularly on relative needs and resources—and reset the cumulative business rates growth as well.

[The Lord Bishop of Durham]

My Lords, can I take the Minister back to social care? Yesterday, the archbishops’ report on re-imagining care was published. It suggested that we need a major rethink on how the whole care system works, not just with local authorities—though it notes that not enough is being put in. The noble Baroness, Lady Andrews, has welcomed the report and produced a fantastic report on this with her committee. Might this be an opportunity to completely rethink how we do social care in the future?

[Baroness Scott of Bybrook (Con)]

My Lords, as I have said, successive Governments have looked at the issue of social care. With an ageing population, it is something that we have to do; we have to change the way we deliver social care and the way it is funded. This Government are looking at this, and will continue to do so until we have a solution.

Police and Crime Commissioners: Accountability Arrangements

Wednesday 25th January 2023 Lords Chamber

Question

15:16

Asked by

[Lord Bach]

To ask His Majesty’s Government whether they have any plans to change the accountability arrangements for Police and Crime Commissioners.

[The Parliamentary Under-Secretary of State, Home Office (Lord Sharpe of Epsom) (Con)]

My Lords, the Government undertook a two-part review of police and crime commissioners, to strengthen their accountability and expand their role. Delivering these recommendations will sharpen their transparency and accountability and ensure they have the necessary tools and levers to be strong local leaders in the fight against crime and anti-social behaviour. PCCs continue to be directly held to account by the public at the ballot box.

[Lord Bach (Lab)]

My Lords, I thank the Minister for his Answer and for his written reply I received this morning on the vexed question of whether the accountability of police and crime commissioners includes, by law, the need to inform the police and crime panel of senior appointments so that the panel can interview and form a view, even when the senior appointment is interim. The Government’s view is that an interim senior appointment is in exactly the same position as a full appointment for these purposes. So I ask the Minister: is he aware that, in my county of Leicestershire, there have been six—yes, six—chief executive appointments in 19 months, four of them interim? The interim chief financial officer has been in place for 14 months. Not one of the interim appointees has been before the police and crime panel. Does this not show a complete contempt for accountability?

[Lord Sharpe of Epsom (Con)]

My Lords, the noble Lord is completely right. Paragraph 7 of Schedule 1 to the Police Reform and Social Responsibility Act provides that any reference to the chief executive or chief finance officer of a PCC, in any legislation,

“includes a reference to a person acting as chief executive, or chief finance officer”.

In other words, there is no distinction, in our view, between acting or permanent appointments. My officials have spoken with the chair of the Leicestershire police and crime panel; it is the department’s understanding that representations have been made by the Leicestershire panel to the PCC insisting that formal notice of the interim CEO appointment be given to the panel as soon as possible, to enable the proper scrutiny to take place.

[Lord Lexden (Con)]

My Lords, a disgraced policeman, Mike Veale, has featured quite often in Oral Questions in your Lordships’ House. A few years ago he deliberately smeared the reputation of Sir Edward Heath. Asked recently why this notorious man’s gross misconduct hearing, announced in 2021, has been indefinitely postponed, the PCC for Cleveland said:

“It is complicated, it is interwoven with other things and there is an order of things that I cannot supercede.”


How can this impenetrable goobledegook possibly be reconciled with proper public accountability? When a member of the public asked the same question last August, he was told that a review was taking place. After two attempts to find out about the progress of the review, he was told just yesterday that “Once information about a hearing is published, we will notify you.” How can these curt, dismissive comments possibly be acceptable? Why has the Home Office done nothing to make this PCC properly accountable?

[Lord Sharpe of Epsom (Con)]

My Lords, I have to say—and it will not please my noble friend—that the misconduct hearing of Mike Veale, who is, as noted, the former chief constable of Cleveland, is a matter for the Cleveland police and crime commissioner, and the management of the hearing itself is the responsibility of the independent, legally qualified chair appointed to it. It would be inappropriate to comment further while those proceedings are ongoing. As to why this has lasted longer than the normal 100 days of an officer being provided with a notice, it can be extended when the legally qualified chair considers it is in the interest of justice to do so, and I believe that is the case here.

[Lord Ponsonby of Shulbrede (Lab)]

My Lords, on 21 December in response to an earlier question by the noble Lord, Lord Lexden, the noble Lord, Lord Sharpe, described the situation as very concerning. That was in respect of the issue which the noble Lord, Lord Lexden, has just reminded the House about. Since then in the press it has become evident that the Leicestershire PCC has paid out £56,000 in compensation after an ethics group claimed it had been dismissed unfairly, so does the Minister believe that recall legislation should be considered for PCCs?

[Lord Sharpe of Epsom (Con)]

My Lords, the potential benefits and disbenefits of a recall mechanism were considered by the two-part review that I referenced in my Answer. It was decided that that would be to create a whole new body of bureaucracy and unnecessarily expensive. Ultimately, the public have the right of the ballot box, if you will, to determine the outcome of the PCC.

[Lord German (LD)]

My Lords, given the concern there has been about the vetting of candidates for the police forces and the uneven procedure of granting face- to-face interview after assessment for candidates, does the Minister believe that there is now a need for a tighter role and concern for making sure that the best practice in the appointment of police officers is now part of this scheme which rests either with police and crime commissioners or the central Minister concerned?

[Lord Sharpe of Epsom (Con)]

As the noble Lord will be aware, after referencing a number of conversations that have been had in the House over the past few days, all of those things are happening with regard to vetting, police officer recruitment and so on.

[Lord Cormack (Con)]

My Lords, will my noble friend not accept that our noble friend Lord Lexden has made an extremely important point and made it very well indeed? The Minister in response really gives the impression of an incompetent and impotent Home Office. We really must have a proper inquiry into this man Veale, and he must be properly dealt with expeditiously.

[Lord Sharpe of Epsom (Con)]

I think I thank my noble friend for that. I am afraid I rather impotently have to go back to the comment I made earlier: it would be inappropriate to comment further while these proceedings are ongoing. However, of course I understand, and I accept that my noble friend Lord Lexden has made an extremely valid point and continues to do so.

[Lord Mackenzie of Framwellgate (Non-Afl)]

My Lords, as I recall, the original reason for setting up police and crime commissioners was to create more accountability, because the police and crime commissioner would be more visible in the community and very well-known. In fact, the opposite has been proved true because the turnout at votes shows apathy and ignorance. Then there is the question of the cost of setting up the offices of police and crime commissioners and their deputies and the salaries and everything else that goes with it. Can the Minister tell the House what this has added to the policing bill annually?

[Lord Sharpe of Epsom (Con)]

I am afraid I cannot answer that specific question, but I can and will say that the public profile of PCCs means they are scrutinised in a way that anonymous police authorities were not. I think the fact that we have this conversation on a relatively regular basis is proof of that. Ultimately, PCCs are directly elected by the communities they serve, and the public will have their say in due course. The noble Lord raised a point on turnout. In 2021, the turnout figure was 33.9%, a 6.5% increase from 2016 and a significant increase on 2012.

[Lord Hayward (Con)]

My Lords, on 21 December, in answer to the noble Lord, Lord Ponsonby, my noble friend was willing to describe the current circumstances as “disturbing”—this was previously indicated. We have now seen a further month and four days pass, so could my noble friend please indicate when “disturbing” becomes “unacceptable”?

[Lord Sharpe of Epsom (Con)]

My Lords, they are disturbing; they are concerning; they are all of those things. I cannot say they are unacceptable at the moment because, unfortunately, the responsibility for this particular misconduct hearing lies with the Cleveland police and crime commissioner.

[Baroness Jones of Moulsecoomb (GP)]

My Lords, the Minister was quite dismissive about police authorities, but I have some experience of them. They were in fact not anonymous; they were mostly councillors, who were elected directly by their constituents and known extremely well, and they actually did talk to people. PCCs do not; they are quite remote, and the Minister has also pointed out that they are held to account at the ballot box every four years. I can quote an example in Dorset where the PCC and the local MP have generated a lot of public dismay about their relationship, and yet the voters cannot do anything about it until next year, can they?

[Lord Sharpe of Epsom (Con)]

My Lords, I would have thought that councillors are also elected once every four years as a rule, so I am not sure what the difference is there. The fact is that police authorities were anonymous, notwithstanding the noble Baroness’s evident fame on the police authority where she was. I would also say that, through part 2 of the review, we are undertaking a fundamental assessment of the whole panel system, and there is a considerable degree of transparency that has been introduced into the way the police and crime commissioners communicate with their constituents.

[Lord Grocott (Lab)]

I make it eight questions that the Minister has fielded so far today, all of them pretty hostile to what he has had to say, including a number from his own side. These include those of two Members, the noble Lords, Lord Bach and Lord Lexden, who have persistently raised the issue that I will not repeat, which seems to have general support from the House. Can I give him some friendly advice? Unless he sorts out some of these questions from the noble Lords, Lord Lexden and Lord Bach, he is going to go on and on having to suffer this pain on a relentless basis.

[Lord Sharpe of Epsom (Con)]

I reassure the noble Lord that I actually enjoy it enormously, but I am going to have to go back to my earlier comment that it would be inappropriate to comment further while the proceedings are ongoing. The noble Lord knows that I will continue to say that until the proceedings are no longer ongoing.

PPE Expenditure

Wednesday 25th January 2023 Lords Chamber

Question

15:27

Asked by

[Lord Harris of Haringey]

To ask His Majesty’s Government what is their latest estimate of expenditure incurred in purchasing faulty personal protective equipment (PPE) during the COVID-19 pandemic; how much had been recovered by 31 December 2022; and how much they forecast to recover by 31 December 2023.

[The Parliamentary Under-Secretary of State, Department of Health and Social Care (Lord Markham) (Con)]

The department’s Annual Report and Accounts 2020-21 confirm that 817 million items of PPE worth £673 million were not fit for any use. By December 2022, the department had reduced the number of contested PPE contracts from 176 to 60, with an associated recovery of value for the taxpayer of around £1 billion. Given commercial sensitivities, we cannot comment on our forecast for further recovery.

[Lord Harris of Haringey (Lab)]

My Lords, I am grateful to the Minister for that reply, but when I look at the National Audit Office report it produces some slightly different figures from those that he has given. It says that his department had identified 3.6 billion PPE items that were not suitable for use, at a cost of £2.9 billion. The point I want the Minister to comment on is that 53% of those suppliers who came through the VIP route provided materials which were not fit for use. Does that raise any questions about the procurement processes operated during the pandemic?

[Lord Markham (Con)]

I thank the noble Lord. Given the recent press, I want to start by setting out the position of Cignpost, the private sector Covid testing company in which, as many noble Lords will be aware, I own a stake. To be clear, Cignpost did not bid for any government PPE contracts and has only private sector clients. None the less, upon taking up the role as an unpaid Minister of Health, I resigned my directorships, made an undertaking to sell my stake, and in conjunction with the Permanent Secretary, ensured that I was not engaged in any areas where there could be perceived to be a conflict—I just wanted to make that clear.

Turning to the question, I was giving the most up-to-date figures. The £1 billion reflects the money that we have continued to recover. Right now, the only amount that has been written off is the £600-odd million that I have mentioned, and we are continuing to pursue the other amounts. When we close the accounts, we will have an update on where that will go. On the VIP lane, I think we accept that, given our time again, we would conduct that in a different way. I will check but I do not recognise those figures as to the level of faults.

[Lord Allan of Hallam (LD)]

My Lords, as well as the financial cost of failures in the PPE procurement process, does the Minister agree that it is important to remember the human cost paid by care workers who became ill when looking after vulnerable and elderly people without adequate PPE? Does he understand how frustrated care workers must now feel to see this level of wastage when their services are crying out for more investment? We could buy a lot of care packages for “£600-odd million”.

[Lord Markham (Con)]

In the circumstances at the time, I think we were all worried that we were going to run out of PPE. If the noble Lord remembers, it was the Wild West out there in terms of trying to purchase it, with planes gazumped literally on the runway and flying to other countries. That is why we stepped in. We bought to a worst-case projection, because we knew we could not afford for PPE to run out in our social care homes or our hospitals. We ended up buying 20% too much as a result, and that is what we are dealing with now. However, only 3% of everything that we bought ended up being faulty, which I think people will agree was a pretty good result.

[Lord Forsyth of Drumlean (Con)]

My Lords, will the Minister indicate how much we are paying for storage of PPE? Are the press reports that we paying for the storage of PPE on a substantial scale in China correct?

[Lord Markham (Con)]

Right now, less than 1% of stock is held in China—to answer that question directly. In terms of cost, we are currently paying about £700,000 per day, which is why we are writing off the stock and effectively disposing of it. We have tried to donate as much of it as possible to people who want it, but we have to bite the bullet on the rest and say, “You know what? It’s no longer required so we are disposing of it as rapidly as possible.” We are bringing down those costs; we will be saving £200 million a year through that rapid disposal.

[Baroness Finlay of Llandaff (CB)]

How many health and social care staff are now off long-term sick with long Covid? What correlation has there been between long Covid and their perception that they did not have adequate PPE for the job to be done?

[Lord Markham (Con)]

I will write to the noble Baroness with the statistics. I can be clear that the endeavours undertaken to buy the PPE were to make sure that we did not run out. Again, there is quite a bit of hindsight going on in saying, “Ah, we bought too much of it”, when at the time everyone was scrambling to say, “You need to buy more.” That was the result of the situation, and to try to apply hindsight now is quite wrong. They did a pretty good job regarding the amount that they bought; they got 97% of it right, which I think we would agree is a pretty good result.

[Lord Whitty (Lab)]

My Lords, the reference to hindsight is misplaced. The Minister accurately described the shambles and panic that happened at the beginning of the pandemic, but there had been several reports in the 10 years before it that indicated that one measure the Government could take for any pandemic was to have standby contracts whereby there were arrangements with companies to provide PPE and laboratory facilities. That was recommended by, among others, your Lordships’ own Science and Technology Committee. Do such contracts now exist so that, were another virus to hit us, we should not go through the same shambles and corruption that we did on that occasion?

[Lord Markham (Con)]

Absolutely. As ever, we want to learn the lessons. That is why we have set up the Covid inquiry. Yes, supply arrangements are in place. At the same time, as per the answer to the previous question, holding high levels of stock does not make sense. It is cheaper in this case to dispose of it while making sure that the supply lines are in place so that we can rapidly respond to any future event.

[Baroness Walmsley (LD)]

My Lords, I understand from the Minister that it is the department that paid the cost of this useless material, and for its storage. How many doctors, nurses and ambulance staff could be given a decent pay rise if that money had been given to the NHS?

[Lord Markham (Con)]

Again, I would take issue with the words “useless material”. It was bought based on a projection of how the pandemic could progress and what would be required. The fact that it did not progress that far was thanks a lot to the work we did in being the quickest country to vaccinate in the world. So, we did not need that level of PPE; that was a good thing. We bought for a worst-case scenario and, thank goodness, we did not require it because of the action we took to get on top of it all. Now, we are dealing with the surpluses bought for that worst-case scenario and quickly disposing of them.

[Baroness McIntosh of Pickering (Con)]

My Lords, can my noble friend tell us the amount of this stuff in UK warehouses, and how much that costs daily?

[Lord Markham (Con)]

As I mentioned before, the daily cost is roughly £700,000.

[Baroness Merron (Lab)]

My Lords, the National Audit Office found that during the pandemic one in 10 suppliers processed through the VIP lane were awarded contracts. This compared to less than one in 100 suppliers going through the ordinary lane. In view of this, could the Minister share with the House what particular qualities were required of suppliers to merit VIP status? Following up on his answer to my noble friend Lord Harris, in the event of a future emergency, was the Minister ruling out having a VIP lane?

[Lord Markham (Con)]

I think we all agree that, at the time, some mechanism was needed to sift the thousands upon thousands of offers of goodwill to help with PPE. A decision was made to take recommendations —the so-called VIP lane—and I think we all accept now that was not the right decision. Going forward, a different sifting mechanism would be set up in place of that. Now, of course, we have supply chains set up to do this, so we hope that occasion will not arise in future.

[Lord Lexden (Con)]

My Lords, my noble friend was right, was he not, to remind us of the context in which those decisions were taken three years ago? There was an overwhelming sense of crisis, to which the Government had to respond with extreme rapidity.

[Lord Markham (Con)]

Absolutely. I remember well, as I am sure do others, watching the news about planes being diverted to other countries and it being asked how come they were not coming to the UK and what the department was doing to get on top of it. I am sure there was criticism from this House—it was before my time—asking what we were doing as a Government to get a grip of it. Well, we did get a grip of it; we did buy the PPE and it did not run out. Yes, we ended up buying too much of it because, thankfully, the pandemic did not turn out to be as bad as we thought it would. I think we did a sensible thing at the time, and now we are going after all those people who did not keep to their supply agreements, and we are recovering the funds. By and large, with the benefit of hindsight, I think we did a fairly decent job—not perfect but pretty good.

[Lord Patel (CB)]

How long will we continue paying £700,000 a day to the Chinese?

[Lord Markham (Con)]

As I said, less than 1% of the stock is being held by the Chinese. Most of the money being spent on storage costs is in the UK. Notwithstanding that, we clearly want to get rid of it as quickly as possible. As soon as I came in, I said, “Let’s bite the bullet, write it off, get on with it and dispose of it.” That is absolutely what we are doing. We are accelerating that to the maximum extent. Those accelerations have already saved £200 million this year.

Schools: Transgender Guidance

Wednesday 25th January 2023 Lords Chamber

Question

15:38

Asked by

[Lord Farmer]

To ask His Majesty’s Government when they intend to publish their official transgender guidance for schools.

[The Parliamentary Under-Secretary of State, Department for Education (Baroness Barran) (Con)]

My Lords, we recognise that issues relating to sex and gender can be complex and sensitive for schools to navigate. That is why we are developing guidance to support schools in relation to transgender pupils. It is important that we are able to consider a wide range of views to get this guidance right, so we have committed to holding a public consultation on the draft guidance prior to publication.

[Lord Farmer (Con)]

My Lords, I thank my noble friend for that Answer, but schools need this guidance now. There is much confusion in schools, children are suffering, and teachers and headteachers are struggling. Also, the experience of NHS gender dysphoria services points towards future class actions, brought by former pupils. Some of those who want to detransition fully will be unable to do so. Will the Minister assure this House, and headteachers and their staff, that this guidance will be definitive enough to protect schools legally?

[Baroness Barran (Con)]

The guidance to support schools in relation to transgender pupils will set out schools’ legal duties and aim to provide clear information to support their consideration of how to respond to transgender issues. However, the guidance will not create new laws or be able to pre-empt the decision of a court on any specific case that might be brought.

[Lord Cashman (Lab)]

My Lords, discrimination is on the rise, and I welcome this Question because it is clear that we have to do something. A YouGov poll commissioned by Gallup and published today indicates that one in five LGBT people has been coerced or face conversion out of their sexual orientation and gender identity. From this, coupled with the staggering rise in hate crime against trans people, it is clear that we need action. No one should feel isolated at school, feel that they do not belong, or feel that their families or parents do not belong. Therefore, does the Minister acknowledge that we need inclusive relationship and sex education, especially for those misrepresented, stereotyped and marginalised groups? Will she ensure that any strategy is both evidence-based and based on the needs of pupils, including trans pupils, and their families?

[Baroness Barran (Con)]

The noble Lord obviously brings extensive experience and wisdom in these areas. As he is aware, the Government will publish a draft Bill to ban conversion practices, and we are committed to protecting all who are at risk of harm from them. On listening to the voices of all pupils, including trans pupils, I stress that the Government are committed to a very full and open consultation so that the guidance we produce reflects the views of all those affected.

[Baroness Fox of Buckley (Non-Afl)]

My Lords, puberty is a difficult time, especially for young women. For example, a dread of sexualised stereotypes can lead to anxiety about the body, sometimes expressed as dressing as a tomboy and sometimes pathologised as anorexia. Therefore, can the Minister ensure that schools do not automatically affirm the fashionable gender dysphoria as a catch-all solution, which is particularly difficult for young lesbians? Can she assure teachers who do not endorse social transitioning associated with gender ideology that their employment and reputation will be protected from false allegations of transphobic bigotry?

[Baroness Barran (Con)]

The noble Baroness raises important points, but she paints a picture that I do not fully recognise. The vast majority of schools realise that these are incredibly sensitive issues for staff, pupils and pupils’ parents, and do their absolute utmost to keep that level of trust with all in their care and for whom they are responsible.

[Baroness Burt of Solihull (LD)]

My Lords, as the Minister says, this is clearly a sensitive and complex issue, and schools are clamouring to know what to do. All kinds of stories abound about “woke policies” and “political correctness gone mad”, but the Cass review said that “doing nothing” for a child in distress is not a “neutral act”. Pending guidelines arriving, will the Minister agree that all school policies should be as sensitive and inclusive as possible?

[Baroness Barran (Con)]

We absolutely want our policies to be sensitive, and we need them to be practical, clear and trusted. The noble Baroness quoted one element of Dr Cass’s report, but I did not hear her also say—forgive me if I missed it—that any decisions about social transition are not neutral either.

[Baroness Meyer (Con)]

My Lords, is not imposing the use of preferred pronouns on teachers and pupils an attack on freedom of speech?

[Baroness Barran (Con)]

As I say, I do not think it is helpful to generalise and talk about imposition of pronouns. We will address these issues in our guidance, and will draw on the widest range of views to inform it.

[Baroness Chapman of Darlington (Lab)]

My Lords, I think most people agree that guidance is needed for schools, and they will welcome the Minister’s comments that this must be done with sensitivity and respect to all pupils, including, of course, trans pupils. But does she acknowledge that the lack of certainty over the timing of this is furthering anxiety and concern and that, notwithstanding what she has correctly said about consultation, the sooner we can get this guidance published and out to schools the better?

[Baroness Barran (Con)]

I agree, and I hope I did not give a sense of foot-dragging on the part of the department. What I wanted to share with the House was a sense of how important we see this guidance being and how seriously we are taking it.

[Baroness Foster of Oxton (Con)]

My Lords, there is evidence that children as young as seven are being asked whether they are male, female, bisexual and trans in schools. Parents appear to have no say in these matters. Does my noble friend agree that this cannot continue? This is now, in my view, bordering on child abuse. Will she look into this matter with the utmost urgency and report back to this House as soon as possible?

[Baroness Barran (Con)]

If my noble friend or any Member of this House has specific examples, it would be really helpful for them to share these with the department so that we are able to respond. Certainly, if one looks at the data on, for example, children who have been referred to the NHS GIDS clinic, it shows that there are very, very few children as young as seven. I appreciate there are a number of other issues involved, but the more we can have practical examples, the more we are able to respond effectively.

[Baroness Falkner of Margravine (CB)]

My Lords, I need to declare an interest as chairwoman of the Equality and Human Rights Commission. I completely endorse the department’s intention to consult widely on this; it is important that it does so. The Minister will also be aware that this matter has been tasked to her department since 2021, and parents, who are incredibly anxious, as well as children affected, really need her department to come to a speedy resolution. It cannot be right to let it stay out there in the ether, year after year.

[Baroness Barran (Con)]

By my calculations, it has been only a year and a bit since 2021. More seriously, I say that one of the important elements in our considerations is the work that Dr Cass is doing in her review. Her interim report did not touch on the implications of these issues in relation to education, but we want to draw on important resources such as her work.

[Lord Sandhurst (Con)]

My Lords, on 5 July last year, the Minister wrote to me saying:

“We are in absolute agreement over the principle that parents should know what their children are being taught, especially in relation to sensitive topics”.


That is an important matter and, in subsequent correspondence and meetings, I was told that a letter would be sent to all schools instructing them to show parents who asked for it the material from which their children were being taught, and not to assert commercial confidentiality or copyright issues. To date—unless it has happened today—no such letter has been written. When will it be sent?

[Baroness Barran (Con)]

I recognise my noble friend’s concerns on this point. The department remains absolutely committed to sending the letter. He will appreciate that, with various ministerial changes, we have to get sign-off from the current ministerial team. There is no block to the letter going, and it will be sent shortly.

[Baroness Hoey (Non-Afl)]

Can the Minister tell us who exactly is being consulted?

[Baroness Barran (Con)]

This will be an open, public consultation in the normal way.

Russia (Sanctions) (EU Exit) (Amendment) (No. 17) Regulations 2022

Wednesday 25th January 2023 Lords Chamber

Motion to Approve

15:50

Moved by

[Lord Ahmad of Wimbledon]

That the Regulations laid before the House on 15 December 2022 be approved.

Relevant document: 25th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 23 January.

Motion agreed.

Local Government (Structural Changes) (Supplementary Provision and Amendment) Order 2023

Wednesday 25th January 2023 Lords Chamber

Motion to Approve

15:50

Moved by

[Baroness Scott of Bybrook]

That the draft Order laid before the House on 12 December 2022 be approved. Considered in Grand Committee on 23 January.

Motion agreed.

Environmental Targets (Residual Waste) (England) Regulations 2022

Wednesday 25th January 2023 Lords Chamber

Environmental Targets (Woodland and Trees Outside Woodland) (England) Regulations 2022

Environmental Targets (Marine Protected Areas) Regulations 2022

Motions to Approve

15:51

Moved by

[Lord Benyon]

That the draft Regulations laid before the House on 19 and 20 December 2022 be approved.

Relevant document: 25th Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instruments). Considered in Grand Committee on 24 January.

Motions agreed.

Ecology Bill [HL]

Report stage
Wednesday 25th January 2023 Lords Chamber

Report

15:51

Report received.

Genetic Technology (Precision Breeding) Bill

Report stage
Wednesday 25th January 2023 Lords Chamber

Report

Relevant documents: 19th Report from the Delegated Powers Committee and 8th Report from the Constitution Committee

15:52

Clause 1: Precision bred organism

Amendment 1

Moved by

[Baroness Bennett of Manor Castle]

1: Clause 1, page 1, line 4, leave out “or a precision bred animal”
Member's explanatory statement
This amendment is intended to remove animals from the scope of the Bill.

[Baroness Bennett of Manor Castle (GP)]

My Lords, in moving Amendment 1, I will speak also to Amendment 2 in my name and briefly comment on the other amendments in this group.

Many Peers will no doubt have received overnight the joint briefing on the Bill from Friends of the Earth England, Wales and Northern Ireland; the Landworkers’ Alliance; the Consortium for Labelling for the Environment, Animal Welfare, and Regenerative Farming —known as CLEAR; the Soil Association; GM Freeze; Organic Farmers and Growers; and the Organic Research Centre. The tone of that briefing reflects what I hear from academics and campaigners: they feel let down by your Lordships’ House. In Committee, we had a detailed, informed and productive debate on the contents of this Bill and the science behind it, and I single out the noble Lord, Lord Winston, for his rich and expert contributions and many amendments. Then they saw the list of amendments for Report, before I had tabled the amendments in my name, and it seemed as though all that debate and all the issues raised in Committee—not satisfactorily answered by the Government—had dissolved into a puff of smoke, or perhaps a puff of gene-edited pollen.

Many Members of your Lordships’ House attended a very informative online briefing on Friday and heard from an academic expert, Dr Michael Antoniou from King’s College London, about his concerns, and I think most noble Lords were copied into the subsequent detailed written exchanges that continued that debate. With that in mind, since Hansard does not yet allow footnotes in speeches, I put on the record two articles that I urge every noble Lord and civil servant who will be involved in this Bill and subsequent regulations to read and ponder: in Nature, on 12 January 2022, “Mutation bias reflects natural selection in Arabidopsis thaliana”; and, in Elementa: Science of the Anthropocene in March 2021, “Differentiated impacts of human interventions on nature: Scaling the conversation on regulation of gene technologies”.

In short, the first is a substantial debunking of the claim that the mutations occurring in nature are random. This is a subject of continuing scientific debate and a claim relied on heavily by the supporters of the Bill, but it is increasingly evidently incorrect. The second makes the point that even if you were to concede that similar detrimental changes take place through natural means, they are not transmitted around the world at the scale of our globalised industrial agricultural systems, which can spread mistakes before they are recognised. Your Lordships will note the date of those articles. The understanding of genetics and particularly epigenetics is changing fast and the Bill is stuck in the understandings of the 20th century.

All the amendments I have tabled, with one exception, offer a final chance: different routes by which your Lordships’ House could take a pause and allow reflection for the science and the understanding to catch up. I think it is telling that in the last few weeks I have had three major groups of scientists from different fields reach out to me to ask for advice on how they can get through to the Government—in the words of one, “to get the Government to understand our issues”.

There is further evidence for that and I will comment further in the next group on government Amendments 3, 5, 6, 9 and 10. These are amendments to foundational elements of the Bill. This is not mere tidying up—crossing the “t”s and the odd dotting of the “i”s. It is reminiscent of the mess we encountered in Committee on the Procurement Bill and the now gutted and apparently defunct Schools Bill. But here we are at the final stage, the last detailed consideration of the Bill, and the Government are still trying to play around with what it is actually all about.

As I said, my amendments—apart from Amendment 12, which is somewhat different—focus on giving us the chance to go slower, to pause, to look at this somewhat differently. In Committee and in the other place, there was much debate about whether animals should be included in the Bill—to draw a parallel, something that, as far as I am aware, is not even being considered in the yet to be settled debate on gene editing in the European Union. It is an issue of great interest to farmers, growers and food manufacturers in the UK—those who are still managing to export there even after Brexit. Noble Lords will see from the briefings that organic growers and farmers in the UK are very concerned about the Bill.

Amendment 27 in the names of the noble Baronesses, Lady Hayman and Lady Parminter, and the noble Lord, Lord Winston—and its associated amendments that make up the rest of this group—sets out a very fast timetable of 2026 for farm animals and 2028 for other animals. The best I can say about it is that it is better than nothing. Should it be put to a vote I will support it, but that is still a very short timetable in view of the time it takes for science to get from the lab bench to the peer-reviewed publication, let alone the time it takes to then reach government understanding.

Amendment 1 excludes animals and Amendment 2 in my name would exclude animals and plants not used for food production. We are told again and again by the Government that they want this Bill for food security—they want to be able to produce food—even though it looks a lot like a Bill designed for and by the multinational-dominated biotech sector. But if it is for food, why allow companion animals—or, indeed, as the noble Lord, Lord Winston, said in Committee, and the Minister admitted, the gene editing of great apes, the species whose closeness to us has been highlighted only this week by research showing we have an embedded understanding of their gestural language?

So, what I have done with my Amendments 1 and 2 is offer the House a final chance to deliver the changes to the Bill that many were expecting. It is not my intention at this point to call a vote on either, unless the House should signal that it does want to reflect, pause and at least proceed more slowly on a major change in our relationship with the natural world—in the natural world—as human animals in an immensely complex system that has developed over hundreds of millions of years.

16:00

I have a final thought on the damage we have done in the past century or so. Instead of relying on and working with natural systems—what we now call agroecology—when crop yields have fallen, we have thrown NPK fertiliser at the fields, produced often at massive carbon cost and with huge environmental impacts. When a field has pests or diseases, we have thrown a pesticide at it, a poison. “It’s safe”, they say—until it is shown that that pesticide is not; the most recent, of course, being neonicotinoid pesticides, whose use the Government have again just approved, despite weekly new reports of their dangers. That reductionist, silver-bullet approach to managing our world has got us where we are today, with the world’s soils in a parlous state, the planet’s capacity of geochemical flows exceeded, biodiversity in a state of collapse and public health exceedingly poor even, or especially, in the wealthiest nations.

HL Mencken said something along the lines of, “Every complex problem has a solution which is simple, direct, plausible and wrong”. We really have to stop reaching for the wrong solutions, which is what this Bill does. My Amendments 1 and 2 at least slow down that outreach. I beg to move Amendment 1.

[Baroness Hayman of Ullock (Lab)]

My Lords, I shall introduce my amendments in this group, Amendments 11, 27, 29 and 30. I thank the noble Baroness, Lady Parminter, and my noble friend Lord Winston for their support. I declare my interest as laid out in the register as president of the Rare Breeds Survival Trust.

During our Committee debate, the Minister stated that the Government’s intention was to take a step-by-step approach, particularly around the introduction of animals, and that the Bill had the ability to do so. Our concern is that we have heard no clarification as to how this will actually work. By what means do the Government intend to introduce provisions related to distinct species, rather than the “relevant animals” as a class, under the Bill as currently drafted? Despite the Minister’s assurances, we still have no guarantee that this step-by-step approach will actually happen.

My Amendment 11 would set this expectation on the face of the Bill. Combined with my Amendments 27, 29 and 30, the effect would be to prevent a precision-bred animal being released until it had met the date condition provided by my new clause, which would follow Clause 47. This proposes that, for farm animals, the date is no earlier than 1 January 2026, and for other animals, no earlier than 1 January 2028. Also scientific evidence must support this extension: if it does not, the date could be put back further. I just say to the noble Baroness, Lady Bennett, that this is not an automatic introduction at that date; it is just putting the step-by-step approach on the face of the Bill.

The reason I have tabled these amendments is that, whether we agree that animals should be included or not, clear concerns were expressed during our Committee debates as to when they should be included, how quickly they should be included, and whether all animals should be included at the same time. We believe there is insufficient detail in the Bill regarding concrete provisions around timeframes: many of them are vague and noncommittal. Much of the preparation that we believe is necessary for a regulatory framework for animals has not yet been properly carried out.

When this issue was debated in Committee, the noble Lord the Minister said:

“All I can do is assure noble Lords that nothing will happen before we are in the right position to do it … The priority will be to try to do this for farmed animals first, and we want to make sure that we are operating a step-by-step approach. If we put it in the Bill, it may be too prescriptive, because we are in a fast-moving area of science, and it may constrain the ability of the scientific community to progress this if we do it in the wrong way.”—[Official Report, 12/12/22; col.503.]


We listened to the Minister’s words and, in order not to tie the Government’s hands or constrain the scientific community if there is clear evidence, for example, of a scientific breakthrough in tackling bird flu, the amendment allows for flexibility. An accelerated timetable should come in only if scientific opinion supported this. So we have not set these dates in stone in either direction.

I hope the Minister can see that we are taking a constructive approach to trying to put step-by-step on the face of the Bill. However, if he is not prepared to accept our amendments, I intend to seek the opinion of the House.

[Lord Krebs (CB)]

I thank the noble Baroness, Lady Parminter, for her courtesy in giving way. I will make only two brief comments. The first addresses the point that the noble Baroness, Lady Bennett of Manor Castle, raised, particularly the reference to the workshop that I helped to organise last Friday, where we had a number of experts giving us their take on the science. It is very often—in fact, usually—the case that scientists do not absolutely agree on everything; that is just the way that science is. When you go as a scientist to a conference, you do not expect everybody to say, “Fantastic, your research is absolutely superb”. People criticise it and challenge you and say, “Why are you doing that in this way and not some other way?” But there is sometimes a centre of gravity of opinion. Science goes through different phases. There may be no agreed position and gradually over time it is possible that a position consolidates in a particular way.

I think it is fair to say that Dr Michael Antoniou, to whom the noble Baroness, Lady Bennett, referred, is probably not in the centre of gravity of current opinion on the safety issues and other technical aspects of gene editing. So while I absolutely applaud the noble Baroness’s point which raised the diversity of opinions in the scientific community, I do not think your Lordships should be too swayed by a particular individual’s point of view, because I do not think it is the centre of gravity of scientific opinion.

My second, very brief point concerns timescales and is related to the amendment in the name of the noble Baroness, Lady Hayman of Ullock. One can see this in two ways, as her introduction to her amendments implied. You could see it as putting the brakes on—do not rush too quickly before you are sure—as the noble Baroness, Lady Bennett, would wish us to do. On the other hand, towards the end of her speech, the noble Baroness, Lady Hayman, said, “We don’t want to hold things back”. On the one hand we do not want to rush, and on the other hand we do not want to have the brakes applied too sharply.

I am trying to anchor that in a bit of reality. As far as I am aware—I was told this at the meeting last Friday by Professor Bruce Whitelaw, director of the Roslin Institute in Edinburgh, which is the UK’s leading centre for this sort of technology in animals—in the US, the Food and Drug Administration is already reviewing a licence application for gene-edited pigs. The animal genetics company, Genus, in collaboration with the University of Missouri, has developed a pig that is totally resistant to the virus that causes porcine reproductive and respiratory syndrome—PRRS for short. So the question in assessing the amendment proposed by the noble Baroness, Lady Hayman of Ullock, is, would that amendment hold up the commercialisation of this pig, if the FDA and the relevant bodies in the UK approved it?

Given that it would improve pig welfare, because PRRS is not a pleasant disease, and save the pig industry a very large amount of money—an estimated $2.5 billion a year in Europe and the US alone—do we want accidentally to place a barrier on that kind of development through timescale limits? I do not land on one side or the other; I just think it is useful to have a real-life example of what is going on. My question to the noble Baroness, Lady Hayman of Ullock, is this: if this PRRS-resistant pig came to market before 2026, would that count as an example of where the 2026 hurdle should be removed, because it is ready to go, or would she want to keep it in place? The question on the other side is whether it will realistically go from FDA approval to commercialisation in about three years. I am not trying to land on one side or the other, just to anchor this in a specific example which may help us think through our response to the proposed amendments.

[Baroness Hayman of Ullock (Lab)]

Just to come back on that, proposed new subsection (4) in my amendment says:

“The Secretary of State may, by regulations, amend the dates listed in subsection (2)”—


the dates I read out—

“if the requirement under subsection (3)”,

which is the evidence condition the noble Lord is talking about,

“is met before the dates”.

There is flexibility in the amendment to bring those dates forward if that scientific evidence is there.

[Baroness McIntosh of Pickering (Con)]

My Lords, I will intervene briefly on a point of information. I do not think the noble Lord, Lord Krebs, has helped his cause, although he is very knowledgeable in this area and I pay tribute to him in that regard, in mentioning that a particular academic is not deemed to be at the centre of gravity on these issues. Who are we to judge? This is a fast-moving and complicated field. We are leaving what has been a highly regulated area, where our farm products have moved very freely between here and the European Union; if we go down this path of very light regulation in the Bill, how do we know that the EU will accept our food products? I shall listen very carefully to my noble friend’s response, in particular to the amendments from the Opposition Front Bench.

I feel that there is an uneasiness and lack of understanding among the public about this, which I share. I am in awe of the Roslin Institute in Edinburgh; it is my alma mater, although I studied law rather than science or veterinary science. I realise that cloning is different, but the very fact that we do not seem to be going down that path, which was first brought up with Dolly the sheep, raises issues. I am very uneasy about moving to light-touch regulation when the science is not at one on this issue.

[Lord Krebs (CB)]

If I could just interrupt the noble Baroness, I think it is wrong to bring up Dolly the sheep in this conversation, because this has nothing to do with cloning. It is a completely different technology.

While I am on my feet, I will respond to her point about how we know where the centre of gravity of scientific opinion is, who is to judge it and whether it will change. I appreciate her kind words about me; I am a scientist but I am no expert in genetics or gene editing. However, I know from my general experience of a lifetime as a scientific researcher that, when there is a centre of gravity of opinion, there are always outliers. Sometimes those outliers turn out to be right and there are transformations, but I have seen no evidence at this stage that the outliers are right and the centre of gravity is about to shift. That is all I want to say.

[Baroness McIntosh of Pickering (Con)]

I have nearly finished my remarks. I have some sympathy with the amendments from the Front Bench opposite and would like to hear a very good reason why my noble friend may be minded not to support them.

[Lord Winston (Lab)]

My Lords, I remind my noble friend Lord Krebs—and I call him my friend because I have huge respect for him as a scientist, a Peer and a contributor to the House—that one of the great outliers was Dr Oppenheimer at the time of the Manhattan Project, who afterwards recognised what had been released as a result of that. We know very well that every single piece of technology that humans have ever produced has a downside we do not expect, and do not recognise and predict at the time. I would argue that this is one of those examples of a technology, which we have a duty, as a House in Parliament, to examine extremely carefully. I am not sure we have done that yet, and I am not sure how we can do it very well.

16:15

One of the problems with the Bill was that I was told that a number of my amendments were not within its scope because it was about the release of the organisms but not the science, and so many of those arguments went before they were even tabled. That is a real problem. In my view, we are embarking on a massive experiment which could have global repercussions—I put it at that serious level. When we start to introduce animals with a particular lack of diversity, or even with diversity, or different species in different areas, we have no proper data to analyse to make certain that we are not doing things that may be harmful to the planet, the environment or human health, or harmful to microorganisms and viruses, or perhaps even promote viruses.

It seems to me the Bill has been produced for one main reason: the notion that we would take back control from the European Union—this was originally part of the legislation which was prevented for us going forward. It seems to me that the Bill has been fairly rapidly produced to take back control. But in taking back control, we may actually lose control, because we might affect the environment in ways that are not certain, and I put that to you with all modesty. I do not know the answer to it.

I pay my respects to the Minister; he has listened very carefully, and clearly recognises his duty to working out how we deal with this Bill. One of the questions that comes up is the very thing that the noble Lord, Lord Krebs, has mentioned, which is the notion of the centre of the argument. I do not accept at all that the Roslin Institute, or the evidence we heard last Friday from the John Innes Centre, represent scientific opinion. I think it was extremely narrow and, unlike the noble Lord, Lord Krebs, I was deeply unconvinced by the arguments I heard.

I must pay tribute to Michael Antoniou, who has just been mentioned; he is a senior gene therapist at King’s College Hospital, and is extremely worried by the Bill. He knows more about modifying genes than many of the people who have been talking about it. He was also at that meeting and, like me, was very concerned about what he heard. A series of letters were written to various people, including to Bruce Whitelaw, and we have not had satisfactory answers to the questions we raised. This is something that we need to understand, because this is an extremely complex process.

One issue raised in the arguments is that the genes of plants and animals—plants in particular—are so complex that we cannot understand them, that they mutate all the time, and that all sorts of doubt occurs with plants; we hear this again and again. If there is so much uncertainty, this is a very good reason to do more research before we promote the experiment into real life. Unlike some of my colleagues, I argue that, although my noble friend Baroness Hayman is going to introduce an amendment which will try to delay the implementation with animals, in many ways the modification of plants is more dangerous. If something is so complex, we need to understand that complexity a bit better than we do at the moment. Plants propagate in a way that animals do not; you cannot corral plants as you can most animals. That represents a very serious issue: they propagate through birds, insects and the wind, and in all sorts of ways that we do not have sufficient means of controlling. I am very concerned about that.

Let us come down to the complexity of this matter. It is very clear from what we heard about genes from our so-called experts—I do not mean to be in any way rude to them because these are matters of opinion—is that it is not true that there are genes for the expression of a particular aspect of the genome. Genes vary depending on what happens around them. They are influenced by other genes. So if one carries out a modification just by editing a genome, that does not necessarily prevent all sorts of other genes changing the way in which they express afterwards. That is one of the big problems in nature.

Epigenetics was mentioned by, I think, my noble friend Lady Hayman. We are understanding more and more about it. Let me explain what it is. Epigenetics is, essentially, the response of genes to environmental influence. Genes are not just there based in stone but depend on the changes in the environment as regards how they express. We now know that they can be inheritable and that we can sometimes change that inheritance. However, the full understanding of epigenetics —certainly in human biology, which has been studied far more than it has in most farm animals—is very far from being clear. It is no question that we have known that epigenetics has been an issue in plants since the 1700s, from the time of Linnaeus, who was the first person to understand how plants modify their shape, flowers and leaves in all sorts of ways in response to the environment. That process is, in fact, heritable. That interesting point suggests that we still have not grasped fully exactly what is happening with the genome or how it might be changed. We therefore must understand that gene function is extremely complicated.

The interaction of genes is also complicated, and when we start to meddle with things we do not necessarily find what we expect, and sometimes they are markedly different. Although gene therapy has been carried out since as early as about 1990, we are limited in how we can do it in humans because we do not know the outcome. Gene therapy uses techniques such as CRISPR, the current method. Changes to genes during development also change. One issue here is that this technology is far from precise. We must understand that it is imprecise.

During the discussions on the Bill, a couple of matters that we have not gone into have worried me and affect all the amendments today. One issue is ethics. We have talked a little about the ethics of our responsibility to animal health, but we have not considered ethics on a wider basis regarding the protection of human life—making sure that we protect the environment to be certain that we do things that are not damaging, and at the present time we do not know.

We are faced with one of the greatest problems that have arisen as a result of technology, and that is climate change. That started with the Industrial Revolution, but we are only now beginning to understand it. We still debate how far humans have been involved in that problem. That is one of the downsides we must face.

One of the issues as regards ethics is if we start to change diversity. I should mention that last Wednesday, when the noble Lord, Lord Benyon, at the Dispatch Box rightly pointed out the importance of diversity, his answers to questions on avian flu and wild birds were admirable because he mentioned the need to be cautious. He said repeatedly how important it was for the Government to follow the science. That is the problem here because the science will vary, depending on who one is dealing with. I am just one person, but I have been trying to modify genes in animal models for at least 40 years, a long time. I have therefore seen how unpredictable these sorts of activities remain, even now.

I do not want to go on at great length, but one of the things that also concerns me with regard to the delay is how the criticism we made to the scientists—we said, “We need more data”; they said “Well, we can’t do the data, as it’s too complex to get the data”—is not true. Of course, nowadays, we do all sorts of computing and have other ways of getting massive data. This is an area where that data is essential. One of the amendments we tried to put down in Committee suggested that we look at the genomics, look at the whole function of other aspects of the genome and the phenotype—that is, the visible appearance of an organism —and have those things computed in. Of course, at the present time, we do not have the data. As far as I can see, in this Bill, there is no mandatory requirement for that data to be made available. The question of whether it should be secret is in a different amendment; we will probably come on to it. I would argue that we are standing on a cliff. The problem here is a key one.

I end with just one point. The Minister, the noble Lord, Lord Benyon, referred to that what we are trying to do is simply imitate nature—I am paraphrasing, of course, but noble Lords understand that I mean we are trying to use natural processes. However, we are not. We cannot do that because one of the differences is that there is evolution in nature. Evolution takes time. It takes decades, even hundreds or thousands of years. Homo sapiens has evolved over at least 100,000 years, probably a bit longer. The real issue here is that, during evolution, the genes have a chance to respond to their environment. Our human qualities now represent a response to our environment; that has changed, of course, so we have gradually changed with it. What we are doing here with gene editing is changing suddenly and sharply. That is not evolution; it is in fact a forced change in the genome. This is risky and certainly something that has not been looked at in terms of general populations of animals and plants in enough detail for us to be confident that we will not do damage.

I say to all of us in this House, because I really feel it, that I certainly support the amendments we have heard about so far. I do not think that they are ideal but they are perhaps the best we can achieve in the time available to us. We must understand that, when we vote, we have a grave responsibility to understand that we could do great harm. The question then is this: what is the good of what we are doing? We are not going to change the feeding of the world’s population with genetically modified crops; actually, that could have been done already had we had the sense to look at how to protect cereals, for example, so many of which are destroyed during storage for all sorts of reasons. One of our responsibilities is to look at how and why these measures are needed. Unfortunately, at the moment, there is a risk that this could be something that is of commercial value for a time but is not necessary for human, planetary, animal or plant value.

[Baroness Parminter (LD)]

My Lords, I hope the Minister will see that these amendments in the name of the noble Baroness, Lady Hayman of Ullock, are helpful because they give expression to what he said in Committee: that the Government will move forward on a step-by-step basis.

Why do I think that is important? First, again in Committee, the Minister made it absolutely clear that there were no institutions or research bodies—nobody—making a claim that they wanted to do any form of gene editing on anything other than farm animals, and that the only reason why animals beyond farm animals were in the Bill was, to quote the Minister, to “future-proof the Bill”. That is fine, but let us give expression to that future-proofing by ensuring that there is a degree of phasing.

Secondly—this is the point that the noble Baroness, Lady McIntosh, touched on—the consultation that the Government did on the statutory instrument in advance of this Bill indicated that there was no support from either consumers or retailers for the sale of animal products into the market. The public appetite is therefore limited. Those of you in this Chamber who are strong proponents of gene editing could very well argue that this phasing amendment would allow time to bring the public along with us.

The third argument, as I think the noble Baroness, Lady Bennett, mentioned, is that while Europe is looking at gene editing, it is not looking at animals at all, and it is a major trading partner. The Welsh have opposed this legislation and, if my timing is correct, the Scottish are voting at this very moment to turn it down as well. Therefore, key partners of ours are moving at a slower pace than ours and therefore there is a strong argument for moving at a measured pace.

However, the strongest argument, which I think will find favour with the noble Lord, Lord Krebs, and others, is for doing this based on the evidence of the science. Yes, we need a proportionate regulatory framework, but we must ensure that we are learning the lessons at every stage and monitoring the adverse effects. We will come to an amendment about this later. Then, going forward, animal welfare is guaranteed, and public benefits are maintained. An argument that allows this in a phased way is the right regulatory approach. If the noble Baroness takes this to a vote, she will have the support of these Benches.

16:30

[Lord Trees (CB)]

My Lords, I will make one or two points, particularly with respect to the comments made by the noble Lord, Lord Winston.

Regarding imprecision, conventional breeding is totally imprecise. Mankind has been breeding animals for thousands of years, just looking grossly at the phenotype, the way animals look and so on. Recent research on pigs has shown that if you breed two pigs —a boar and a sow—and do whole-genome on sequencing on all their progeny, there will be at least 100 mutations in the DNA of each of those progenies which are not represented in either parent. Every time we breed every animal now, on every farm, in every house, in every stable, we have a very imprecise system which is constantly throwing up genetic variation.

Applying this more precise breeding will be done under very controlled conditions in research establishments which will be thoroughly looking at the changes in the genomes of the animals long before they are released. Remember that when we market animals for breeding, we control the breeding. We have had assurances that mechanisms such as gene drive will not be included in this legislation. Every precision-bred animal that is genetically edited and put on the market will be bred by humans controlling that breeding.

Lastly, regarding ethics, there are counter-ethics, and the bus has already left the station on this. The noble Lord, Lord Krebs, mentioned the work on PRRS. There is some very encouraging work coming through which indicates that we may be able to create poultry with a degree of resistance to avian influenza. An Israeli research group has published information on being able to produce only female chicks from layer breeder flocks, thus preventing the unnecessary destruction of half the chicks born for laying purposes because they are male. When we have the potential to reduce the burden of disease in animals which are under our control, is it ethical not to take up that opportunity?

[Lord Roborough (Con)]

My Lords, I declare an interest as a dairy farmer and as an investor in a number of agriculture-related businesses around the world. I also declare negligible scientific credentials, unlike many noble Lords who have spoken.

However, I believe that it is essential that farmed animals are included in the Bill without undue delay, and I am very much against any amendment which delays or removes these animals. I have previously mentioned in this House that I could raise the output of my herd by 23% were all my cows blessed with the same genetics as my best cow. As noble Lords have already mentioned, there are disease benefits. Another example is the Roslin Institute’s engagement in gene editing of salmon, which improves resistance to infectious pancreatic necrosis viruses. These are meaningful benefits and I agree that they also improve animal welfare.

I would also add that I do not entirely recognise the world that was described by the noble Baroness, Lady Bennett, earlier. Agricultural productivity continues to increase globally, powered largely by ongoing plant and animal selective breeding. I believe that we have an obligation to unleash this technology of precision breeding to further increase production globally and support a growing global population.

[Lord Winston (Lab)]

Before the noble Lord sits down, I wonder if he might be kind enough to comment on this, seeing as he wanted to breed his best cow with all the other cows to reduce genetic diversity. Can he tell me what happens if a virus comes along to which that herd is susceptible? What do you do then? That is the problem.

[Lord Roborough (Con)]

As a non-scientist, I am not sure that I have a good answer to that. I would rely on the vets.

[Lord Taylor of Holbeach (Con)]

I think my noble friend is quite right: we will depend on increasing productivity and will be able to do that only by breeding. The whole point of the Bill is selective breeding; actually, it is precision breeding. The noble Lord may well have this nightmare that we are releasing something ghastly into the world; I do not believe that is true at all. It is done because of objectives in the breeding programme, which is precise. This is just the sort of thing that I do—and I declare my interest as a horticulturalist, as the House well knows—when we are breeding bulbs and daffodils. But this is more serious; this is not about domestic gardening but is about feeding the world and making it possible for the diversity that exists in gene stock to be harnessed for greater productivity.

[Lord Winston (Lab)]

I do not want to argue with the noble Lord about this too much but, actually, I have to say that there is good evidence. For example, with gene editing and the operation called i-GONAD where you can change embryos, most of those animals look perfectly normal and would pass without their gene being changed, but it turns out, of course, that they do not actually fulfil the requirements that you eventually have for the gene. That is one of the problems. That is a serious issue because you change other genes; not as a result of editing them, but by having those other genes edited. That is a big problem.

[Lord Curry of Kirkharle (CB)]

My Lords, I will briefly respond to the noble Lord, Lord Winston, on that point. It is a fair question, which we do need to respond to: what happens if we narrow the gene pool and expose animals to genetic risk? There has been evidence in the past that by narrowing the gene pool in dairy cows, we have had lameness problems; there has been an issue in other species. That is because we have not properly understood; indeed, random breeding, as the noble Lord, Lord Trees, has said, has resulted in that kind of action. Through better understanding of the genes, and through ensuring that we retain as wide a gene pool as possible from which to choose, but being selective and more careful and intelligent about the use of those genes, we should avoid that consequence.

[The Minister of State, Department for Environment, Food and Rural Affairs (Lord Benyon) (Con)]

My Lords, I start by reminding noble Lords of my entry in the register. This has been a fascinating opener for this afternoon’s proceedings. I know that this is an area of great importance to this House. I want to take account of the concerns raised in the debate and more clearly show our intention on this issue. Perhaps I should start by saying that, having been in, then out and now back in Defra over about a decade or more—and not being a scientist—I absolutely do take the point made by the noble Lord, Lord Krebs. I try never to use the words that the noble Lord, Lord Winston, attributed to me, which was that I was following the science. The science is imprecise, and what we have to do as policy- makers is take a view, listen to reputable people who advise us and organisations both here and around the world, and hope we get it right.

I shall say just two things at this stage of the proceedings on what my involvement in the Bill is not about. First, to tackle what the noble Baroness, Lady Bennett of Manor Castle, said—that this is somehow to satisfy the demands of the global agricultural corporations—no, it is not that. As far as I know, we have had no lobbying from any of those organisations, and this is about something else which I shall come to. Secondly, it is not about taking back control. For me, it is about looking at crops that I see frying in heatwaves that we never had when I was younger. It is about talking to farmers who have Belgian Blue cattle that can give birth to calves only by Caesarean section because they have been bred through traditional breeding methods in a way that makes natural calving impossible. It is about correcting some of those aberrations that have existed, as well pointed out by the noble Lord, Lord Trees. We can tie ourselves down with negativity about this, but the opportunities for this legislation, what it offers for animal welfare and for tackling issues such as climate change, are immense.

On the amendment to remove animals from the Bill completely, as was highlighted in Committee and in today’s debate, I say that it is vital that animals remain part of the Bill. We focused on farmed animals in debate because there is already research in the UK and abroad showing the exciting potential of precision breeding to help tackle some of the most pressing challenges to our food system, the environment and animal welfare. These challenges are significant, and while these technologies are not a silver bullet, they can work alongside other approaches to help us to improve animal health and welfare, enhance the sustainability of farming, and strengthen food security and resilience. It is vital that we create an enabling regulatory environment to translate the research that we have already highlighted in debates into practical, tangible benefits.

It is equally vital that these technologies are used responsibly. That is why we have included specific measures in the Bill to safeguard animal welfare. These go beyond what is required for traditional breeding and under current GMO requirements. We therefore do not see this legislation as a route to lowering welfare standards. Instead, we see it as a real opportunity to improve animal welfare and our food system.

The debate about outliers was fascinating. As a policymaker, I quite like challenging Defra scientists and those who advise us by pushing an outlying piece of science, something that may not even be peer-reviewed. It is one of my criticisms of the scientific lobby that, to get peer-reviewed papers, you have to be in the centre. In this case, I have looked at the broad range of views in the scientific community. I entirely endorse the sentiments put forward by the noble Lord, Lord Krebs. However, I understand concerns raised in the debate about the use of precision-breeding technologies in certain groups of animals, such as companion animals, and I recognise and agree with noble Lords on the importance of building confidence in the regulatory system.

There is a case for prioritising where there is the greatest research interest and where there are greatest potential benefits for animal welfare in our food system. That is why I want to make a commitment on the Floor of this House that we will adopt a phased approach to commencing the measures in the Bill in relation to animals. In other words, we will commence the measures in the Bill for only a select group of animal species in the first instance before commencing them in relation to other species. For example, in the first phase it is likely to be animals typically used in agriculture or aquaculture.

As indicated during Committee, we intend to use the commencement powers within the Bill to achieve that. These powers allow us to bring the provisions in the Bill into force in relation to a specific list of species or group of animals; for example, we can apply the provisions to cattle by stating the species name as Bos taurus—domestic cows. That means that until the relevant commencement regulations applicable to them are made, some species or groups of animals, such as companion animals, will not be affected by changes in the Bill. Likewise, GMO rules would continue to apply to them if they are produced using precision-breeding technology. Taking this approach allows us to limit the practical effect of the Bill for a time, while retaining the flexibility and durability needed to capture the potential benefits in other species in the future.

16:45

I question the point raised by my noble friend Lady McIntosh that there seems to be great opposition to this. Of course, it depends on the question asked, but we know that public levels of understanding are low, and that public sentiment is more in favour particularly if the use is associated with a benefit. For example, FSA research last year found that 54% of people think it would be acceptable to use the precision breeding of plants in food production, while just 16% say that it would be unacceptable. A BEIS survey from 2019 found that 63% of participants supported the use of precision breeding for disease-resistant crops, 65% for crops resistant to adverse weather, and a similar number for an increase in health benefits in fruit and veg. I know that we are talking about animals, but it is worth pointing out that there is public acceptance of much of what we are talking about.

As I said, the priority for the first phase would be animal species that are typically used in agriculture and aquaculture. We would like to gather and consider further evidence and continue our engagement with key experts before we define the full list of species we intend to introduce first.

If it helps the noble Baroness, Lady Hayman, I think that this answers her point: if the Bill passes, plant commencement regulations would come forward in 2024, but I do not foresee, unless science moves at a particularly rapid rate, that plants would be ready for market for four to five years from Royal Assent. I suspect animals to be two to three years after that, so significantly beyond—if I got it right—the date that she mentioned. I do not want to restrict this or future Governments; I do not want to restrict the benefits that could accrue from this technology if suddenly, as the noble Lord, Lord Krebs, mentioned, a particular area of work could be brought forward that would be of huge benefit.

Before the measures in the Bill are introduced to other species, such as companion animals, we will gather and consider further evidence. We will include monitoring of research and commercial developments, and consideration of animal welfare assessments in such species. The research we are undertaking with Scotland’s Rural College is the first step but, again, this will involve engagement with key stakeholders and experts. I entirely endorse the point made by the noble Lord, Lord Trees, about PRRS—that has to be in our minds when we are talking about this.

I could listen to the noble Lord, Lord Winston, for ever; apart from his having the most mellifluous voice, he is a fantastic communicator—I have watched him on television—but I question his belief that Britain is somehow an outlier. We are aligning with many international partners—for example, the US, Canada, Japan, Argentina and Australia. The EU, as he knows, is also intending to introduce a more proportionate regulatory framework, and we follow that with interest. I hope that he sees that we are part of a wider group of countries that are gently moving forward in a way that accepts high levels of regulation, but also the benefits that this technology could accrue.

[The Duke of Montrose (Con)]

It is encouraging to think that the Minister would pick one genus of defined animal such as Bos taurus, but how long would it remain the only race being investigated? Moreover, they are only about half of the cattle beasts; there are also all the beasts descended from Bos indicus that occupy tropical areas.

[Lord Benyon (Con)]

I understand the point that my noble friend is making. I cited Bos taurus as perhaps the greatest priority in our minds, but I have also mentioned the benefits that would accrue if we could tackle conditions such as PRRS in pigs. He is right that there are other genuses across farm animal species that we must consider.

As I said, we also intend to produce guidance on the animal marketing authorisation process outlined in the Bill. That will include guidance on the evidence that regulations will require to be submitted alongside the animal welfare declaration by the breeder and, if necessary, more specific guidance relevant to particular species. Through that consideration of evidence and clear guidance, we will ensure that the regulatory system works effectively for different species of animals. I hope that the Government’s intended approach, our commitment to phase the introduction of animals under this legislation and the words that I have said from this Dispatch Box are clear and reassuring for noble Lords. I ask noble Lords to consider not pressing their amendments.

[Baroness Bennett of Manor Castle (GP)]

My Lords, I thank the Minister for his answer. I thank everyone who has participated in, as he said, this fascinating, detailed and high-quality debate.

I will start with the small bombshell that the Minister that just dropped. We appear to have had a new outline for the way in which the Bill is to be implemented presented to us at the final stage of Report on the Floor of the House—and, as the noble Duke, the Duke of Montrose, pointed out, with some very unclear elements where we suddenly appear to be covering half the cattle but not the other half. I question whether this is the way in which we should be making legislation.

I want to raise a point on something the Minister said which has not been raised before: why is aquaculture here? As the noble Lord, Lord Winston, said, the reality of land animals is that at least you can keep control of them and muster them fairly well. If we include aquaculture in the early stages, we have to realise that once you release something into the sea, as we know from farmed salmon, there will of course be escapes. We have not had a chance to debate all the things the Minister just said.

I want to go back to first principles. I return to the immensely powerful and important speech by the noble Lord, Lord Winston. As he said, he has 40 years’ experience of working with genes. He is your Lordships’ House’s absolute expert. The noble Lord said that we are embarking on a massive experiment with potential global repercussions, but we do not understand what we are doing. Before I go further, I want to put those words to the Minister. My understanding is that the precautionary principle is part of government policy. How does this Bill fit with that principle?

[Lord Benyon (Con)]

Let me address some of the points that the noble Baroness has made. The Government have always said that our priority for the rollout of this technology will be plants, then animals. I have added to that the reassurance, in frequent meetings that I have held with noble Lords before today, that we can phase that part of it as well. So I do not consider that to be a bombshell.

ACRE, the body that advises the Government on releases into the environment, has recommended that precision-bred organisms pose no greater risk than their traditionally-bred counterparts. Its advice is supported by the Royal Society, the Royal Society of Biology and the Roslin Institute. As for food and feed, consumer safety will be ensured through a case-by-case assessment by the FSA to ensure that products are safe for consumption.

So I hope the noble Baroness feels that his is not a bombshell, that clear processes are involved and that we have been, in every way, precautionary about how we do this. I put it to her that surely it is being precautionary to tackle some of the problems we face. The greatest challenge ever for humanity is to adapt to climate change and to produce food in a way that a modern society, a civilised society, wants—to make sure we address issues such as animal welfare. That is the opportunity of this Bill.

[Baroness Bennett of Manor Castle (GP)]

I thank the Minister for his answer. I will pick up that point about animal welfare, and indeed pick up the points made by the noble Lord, Lord Krebs, about pigs in the US that have been gene-engineered—or, rather, gene-disrupted— to make them resistant to porcine reproductive and respiratory syndrome.

This is a case of knocking out one gene in these pigs. We know that any given strain of a virus mutates at a rapid rate—we only need to look at Covid-19. Where we have pigs held in the kind of crowded, dangerous conditions in which we know pigs are held in the US, the virus will mutate very quickly. We have been through this many times. We had it with resistance to pesticides: we got rid of a single disease with one gene and then, of course, it goes. This is the way that biology works, as the noble Lord, Lord Winston, said. We hold those pigs in the kind of crowded, dangerous conditions where PRRS is a concern. Let us remember that this genetic change is only against that one disease. When swine flu arrives, there is nothing in those pigs that will protect them against it, or prevent it becoming a zoonosis and crossing the species barrier into humans. Yet we continue those farming practices.

I pick up the point from the Minister and the noble Lord, Lord Taylor of Holbeach, who said that this is the only way we will feed the world and the only way to get more production. That is what we were saying in the 20th century. The discussion on Friday that I referred is only a preprint, but it reflects the direction of the new biology. The noble Lord, Lord Krebs, said that there is a centre of gravity, but we also know there are tipping points. The new biology acknowledges that a wheat plant and every other complex organism is a holobiont; it operates as a complex of what we think of as the plant, bacteria and fungi that work together. The preprint showed that when a wheat crop is dealing with drought, the epigenetic changes—the kind of changes that the noble Lord, Lord Winston, was talking about, where the plant adapts to circumstances and has its genes expressed in different ways—were happening overwhelmingly in the bacteria and fungi. It is not the genetics of the wheat plant at all. I do not accept that this is the way to feed the world, without tackling the issues of poverty, inequality, food waste and feeding perfectly good food to animals. We need good management of soils and crop diversity—that is how we feed the world.

I feel a sense of despair at this point; I have no alternative but to withdraw my amendment with great reluctance. I really hope that your Lordships’ House has listened, particularly to the speech by the noble Lord, Lord Winston, and that the Government listen to this as we go forward from here.

Amendment 1 withdrawn.

Amendment 2 not moved.

Amendment 3

Moved by

[Lord Benyon]

3: Clause 1, page 1, line 11, leave out from “genome” to end of line 14 and insert “that results from the application of modern biotechnology could have resulted from traditional processes, whether or not in conjunction with selection techniques, alone,”
Member’s explanatory statement
This amendment would limit the test in Clause 1(2)(c) to features of a precision bred organism’s genome that result from the application of modern biotechnology and would require them to be capable of resulting just from traditional processes (whether or not in conjunction with selection techniques).

[Lord Benyon (Con)]

My Lords, I will begin by speaking to the amendments tabled by the noble Lord, Lord Krebs, whom I thank for his amendments and his ongoing support for the Bill. I will come on to the government amendments in due course.

The noble Lord’s amendment highlights some of the challenges in maximising the potential of plant and animal genomes using traditional breeding methods. The crucial issue is whether the types of genetic features under discussion could, in principle, occur in the genome of the organism by traditional processes. In other places in the Bill, where we intended to refer to outcomes that

“could reasonably be expected to result”

from a process, rather than outcomes that could in principle so result, we have expressly said so. This means that it is unnecessary to add further descriptions to the word “could” in Clause 1. Consequently, the existing wording—“could” have resulted from traditional breeding —already achieves the Government’s intended ambition, without the need for further descriptors in the definition. I believe that it achieves the outcome that the noble Lord wants it to.

17:00

Turning to Amendment 7, I understand that the noble Lord tabled it to ensure that fragments of exogenous DNA, such as those that may remain behind after precision editing, do not affect the phenotype of the organism in order for that organism to qualify as precision-bred. I am grateful to the noble Lord for his amendment. However, we have tabled a set of government amendments that would prevent from remaining in the organism any exogenous DNA that was outside the range that can be seen in the existing gene pool. This would ensure that precision-bred organisms contain only changes produced through modern biotechnology that already exist in the genome or could arise through traditional processes. I hope the government amendments that I will now turn to will provide some assurance to the noble Lord and enable him not to press his amendments.

Amendments 3, 5, 6, 8 and 10 aim to clarify which kinds of genetic features are permissible in a precision-bred organism, and the techniques by which they may be introduced. The amendments in this group achieve this by removing references to “natural transformation” in relation to the criteria that determine whether an organism may be considered precision-bred. They also focus the test for a precision-bred organism on the features that result from the application of modern biotechnology, while ensuring that artificial modification techniques that are considered to produce a GMO cannot result in the production of a precision-bred organism.

One of the ways that genomes can be altered naturally is through the process of “natural transformation”—a term that includes the transfer of genetic material from bacteria and viruses to plants and animals through natural infections. It is included in the GMO legislation in a list of techniques that do not constitute artificial modification and so do not result in GMOs. We have included it in the Bill to be clear that natural processes can introduce exogenous DNA into plants and animals and to show how this has been taken into account in defining a precision-bred organism.

Our intention is to strictly limit the type of features that can be present in precision-bred organisms as a result of the application of modern biotechnology. This is done specifically by ruling out some of the changes that occur through natural transformation. This is because natural transformation can introduce longer stretches of functional, exogenous DNA into an organism. An inserted DNA sequence of this type would not be similar to a DNA sequence already present in the organism, or to a sequence that could arise through variation within its gene pool, and, as such, it should not result in a precision-bred organism.

If these kinds of changes are made through the use of modern biotechnology, the resulting organism should be considered a GMO. This is consistent with the advice from the Advisory Committee on Releases to the Environment—ACRE—which says that, for the risk to be considered equivalent to traditionally bred organisms, the genetic change must also be consistent with the type of features that could occur through the use of traditional breeding processes. These are listed in Clause 1(7) of the Bill.

I recognise that the approach we have used to achieve this has caused confusion about which genetic features will be permissible in precision-bred organisms, and has raised concerns that the current text could be misinterpreted. The amendment from the noble Lord, Lord Krebs, which would restrict permissible genetic features with similarity to natural transformation, is designed to better describe these criteria, and I am grateful to the noble Lord for his help and advice in making sure that this clause sets out the desired regulatory test more effectively.

The solution we have reached, with our scientific advisors in ACRE, meets the same aim and, ultimately, achieves the same outcome as the noble Lord, Lord Krebs, intended through his amendment to Clause 1(6). The government amendment removes the term “natural transformation” from the Bill entirely. It takes out Clauses 1(2)(c)(ii) and 1(6). This achieves the desired effect, because the types of features capable of resulting from natural transformation which are acceptable in precision-bred organisms are already captured by the features resulting from the list of traditional processes in Clause 1(7). The kinds of features capable of resulting from natural transformation that are not acceptable would not be covered by this list.

For example, if any DNA remains in the genome of an animal as a consequence of gene editing, it must be similar to the kinds of genetic features that occur in the existing gene pool of the animal, for example as a result of spontaneous mutation. The same would apply to plants. Many plants already contain genetic features that are similar to the short pieces of DNA that are transferred into them as a result of a technique of modern biotechnology called cisgenesis. Again, in these cases, the plant would be classed as a precision-bred organism.

I would like to assure noble Lords that precision-bred organisms will contain only features resulting from the application of modern biotechnology that are similar to those that exist in the gene pool already, or which could arise through the use of traditional processes. In line with advice from ACRE, these features that result from the application of modern biotechnology would not pose a greater risk than those resulting from traditional breeding.

After removing reference to natural transformation from the Bill, the test of whether a plant or animal is classed as a precision-bred organism depends on whether its genetic features that were produced by modern biotechnology are stable and could have resulted from traditional processes. As this test focuses on genetic features that were produced by modern biotechnology, we are also requiring that the organism’s genome does not contain any feature that results from the application of any artificial modification technique other than modern biotechnology. This ensures that organisms containing genetic features produced through the kinds of genetic modification techniques that cannot constitute precision breeding—in other words, what we would consider classic GMOs—cannot be classed as precision-bred organisms under this Bill.

Through this amendment, we are maintaining our intention for precision-bred organisms to contain only changes that could also have arisen in the gene pool through natural variation or through the kinds of directed breeding programmes already in use today. I am confident that the changes we have introduced are more effective in delivering the scientific approach we have committed to when defining a precision-bred organism.

I will speak quickly to Amendment 9, which the Government have tabled. This amendment is a technical amendment that ensures that subsection (8) reflects the language around the definition of “artificially modified” inserted into Part 6 of the Environmental Protection Act 1990 by the Genetically Modified Organisms (Deliberate Release) Regulations 2002, which is expressed in relation to genes or other genetic material rather than organisms. It would make no substantial change to the Bill.

I hope noble Lords are confident about accepting these amendments.

[Lord Krebs (CB)]

My Lords, I thank the noble Lord, Lord Benyon, and his officials for the very productive conversations that we have had and thank the Government for tabling amendments that, as he just explained, meet the essential request of my Amendments 4 and 7 in this group. I do not think that there is further debate to be had about the purpose of my amendments, but I thought that I might spend a few minutes, if noble Lords do not mind, explaining what I was talking about with a couple of simple examples. Although he gave a very correct and detailed response, I could see the eyes of one or two of your Lordships beginning to glaze over. I will therefore try to give an illustration.

The logic of my Amendment 4 was that the Bill says —and the noble Lord, Lord Benyon, has just repeated—that a precision-bred organism could have been produced by traditional breeding. My amendment says that while this is true in principle, in practice it may be very difficult to achieve these changes by traditional breeding. The Government’s amendment, in slightly different words, acknowledges that point. I will illustrate why I tabled my amendment with two examples.

Noble Lords will know that cystic fibrosis is an incurable and often fatal disease caused by a single gene mutation. That gene is extremely bad for you, yet one in 25 of us carries that gene, which is extraordinary. After 10,000 generations or more of human evolution since Homo sapiens first emerged, why is that gene still around? If it is so disadvantageous—indeed, fatal—why has it not disappeared? The answer is very simple: traditional breeding—what we do—and natural selection over 10,000 generations has been unable to remove that gene because it is recessive. In other words, most of us who carry the gene—we do not know which ones of us do—show no manifestation of it. If two carriers have children then, statistically speaking, one-quarter of those children will manifest the disease but the others will not. That is the law of Mendelian genetics. Although, in theory, selection and traditional breeding could eliminate the cystic fibrosis gene, the fact is that it does not. But precision breeding could, if we applied it to that example.

My other illustration is on linkage. Genes that live together also travel together, which means that they are passed down through the generations as joined-up twins. One example might be hair colour and eye colour. In general, blond hair and blue eyes go together and brown hair and brown eyes go together, although not always, because those genes for hair colour and eye colour are linked together on the same chromosome but not incredibly closely linked. If they were absolute neighbours, it would be very hard, in the normal process of the reshuffling of chromosomes that occurs during traditional breeding, to separate them. Yet, with precision breeding, you could separate them at a stroke using molecular scissors.

That is what the amendment is about, and I believe that the Government’s amendment has addressed those points with slightly different wording from mine. When I asked Defra officials whether they agreed with the logic of my amendments, they said, “Yes, but our lawyers don’t like your wording.” I defer to the Defra lawyers and accept that they have come up with an alternative form of wording.

Briefly, I move on to my Amendment 7 which, as explained by the noble Lord, Lord Benyon, is about whether having any small fragments of exogenous DNA—probably bacterial DNA—left over after gene editing is a bad thing. The first thing that I need to say to noble Lords in case they are not aware of it is that there is nothing wrong with exogenous DNA. None of us would be alive today were it not for our exogenous DNA. In fact, no multicellular organism on the planet would be alive today were it not for their exogenous DNA. The reason is that, in every cell of our body, there are tiny little organelles called mitochondria, which started life as bacteria. They are not our own DNA; they got into multicellular organisms long before we appeared on the planet 1.5 billion years ago and have been accepted by the host—and, in fact, used by the host to generate energy. The energy that fuels your body and keeps you going is created, second by second in every cell of your body, by these little inclusions that are controlled by exogenous DNA.

17:15

Nevertheless quite rightly—echoing the points made earlier by the noble Lord, Lord Winston—we should be very cautious about exogenous DNA that arises from gene editing. The Government had phrasing in the original wording of the Bill that said that this DNA should not code for a protein, which is the normal way that DNA exerts its influence on the body. I said in Committee that DNA can exert its influence on the appearance and functioning of the body in ways other than coding for a protein, so let us take into account a broader definition. Any feature of the organism could have arisen by traditional breeding, to quote the Minister’s words a few minutes ago. I think that meets the purpose of both my amendments, so I do not intend to take things any further.

However, when I asked Jonathan Jones at the Sainsbury Laboratory and Wendy Harwood at the John Innes Centre whether they agreed with my analysis, they said “Yes, John, but the government amendments introduce a new term which could be a hostage to fortune”. That term is “modern biotechnology”. What is modern? I want noble Lords to cast their minds back to the 1990s. When mobile phones first appeared, the ultimate in modernity was to have this thing the size of a house brick in your hand, and with your head bent over because of the strain of holding it you could make a phone call if you were lucky. That was modern technology in the 1990s; just as transgenics was a modern technology in the 1990s, now we consider it a bit old-fashioned. We all have smartphones and think transgenics has been superseded by gene editing. Is it a hostage to fortune to talk about “modern biotechnology” if we roll the clock forward 10 or 20 years and people say, “Gene editing? God, that’s old hat—we’ve got a much more modern system”? Will the Bill still be fit for purpose? I am interested in the Minister’s response to that.

There was another potential hostage to fortune which I think the Minister has dealt with, namely the phrase “artificial modification technique”. As Jonathan Jones and Wendy Harwood pointed out to me, selective breeding by human beings since the dawn of agriculture 10,000 years ago is an artificial technique. It would not have happened naturally; it happened because of the intervention of man. I think that the Minister addressed that on the previous amendment by defining what he meant by artificial technique, but I hope when he comes to respond he will define what he means by “modern biotechnology”.

[Baroness Bennett of Manor Castle (GP)]

My Lords, having spoken a great deal on the last group, I will be extremely brief now. What we have is the Government still trying to define what the Bill is about at this incredibly late stage. We have been through Committee, Report and the other stages in the other place and here, and here we are still trying to find the wording. Neither the science nor the law is stable enough for this to become an Act and we have just seen a very useful demonstration in this short debate of how this is very likely to be a field day for lawyers, so the lawyers in your Lordships’ House can get ready.

[Lord Benyon (Con)]

My Lords, I thank both noble Lords for their contributions to this debate. I particularly thank the noble Lord, Lord Krebs, for his continuing help in trying to get this right. I hope the eyes of not too many noble Lords glazed over. I had to get on the record, about what is undoubtedly a very technical piece of legislation, what we were seeking to do by the changes that we were putting in.

The noble Lord makes a very good point about “modern biotechnology” as a term. I am at great pains not to throw in new definitions that could one day come back to bite us, but “modern technology” is widely recognised to cover a specific set of technologies for regulatory purposes. In particular, it is used in the UN’s Cartagena Protocol on Biosafety. The definition of modern biotechnology can be updated—to be probably even more modern technology—subject to the affirmative procedure under powers in the Bill if required.

I hope that the government amendments, which aim to clarify which kinds of genetic features are permissible in a precision-bred organism and the techniques by which they may be introduced, will provide assurance to the noble Lord not to press his amendments. I hope that noble Lords are confident in accepting these government amendments.

Amendment 3 agreed.

Amendment 4 not moved.

Amendments 5 and 6

Moved by

[Lord Benyon]

5: Clause 1, page 1, line 14, at end insert “and
(d) its genome does not contain any feature that results from the application of any artificial modification technique other than modern biotechnology.”Member’s explanatory statement
This amendment would introduce a new requirement to ensure that the genome of a precision bred organism could not contain features that result from artificial modification techniques that are not modern biotechnology within the meaning of the Bill.

6: Clause 1, page 2, line 3, leave out subsection (6)
Member’s explanatory statement
This amendment would omit Clause 1(6), which defines “natural transformation”. It is consequential on the Minister’s first amendment to Clause 1 which would remove Clause 1(2)(c)(ii).

Amendments 5 and 6 agreed.

Amendment 7 not moved.

Amendments 8 to 10

Moved by

[Lord Benyon]

8: Clause 1, page 2, line 25, at end insert—
“(7A) An “artificial modification technique” means any technique by which genes or other genetic material can be artificially modified within the meaning of Part 6 of the Environmental Protection Act 1990 (as it has effect from time to time).”Member’s explanatory statement
This amendment would define artificial modification techniques in line with Part 6 of the Environmental Protection Act 1990 (which deals with genetically modified organisms).

9: Clause 1, page 2, line 26, leave out “an organism is” and insert “genes or other genetic material are”
Member’s explanatory statement
This amendment is a technical amendment so that subsection (8) reflects the language of the definition of “artificially modified” in the Genetically Modified Organisms (Deliberate Release) Regulations 2002, which is expressed in relation to genes or other genetic material, rather than the organisms. It would not make a substantive change.

10: Clause 1, page 2, line 35, at end insert—
“(10) An organism to which subsection (11) applies does not fail to be precision bred merely because it does not meet the condition in subsection (2)(d).(11) This subsection applies to an organism which, for the purposes of Part 6 of the Environmental Protection Act 1990, is to be taken not to be a genetically modified organism by virtue of—(a) paragraph (3) of the regulation referred to in subsection (8)(a), or(b) regulations under subsection (4C) of section 106 of that Act.”Member’s explanatory statement
This amendment would ensure that an organism will not fail to be a precision bred organism by reason only of the new test introduced by the Minister’s second amendment to Clause 1 if it is to be taken not to be a genetically modified organism by virtue of the provisions referred to in subsection (11)(a) and (b).

Amendments 8 to 10 agreed.

Clause 3: Restrictions on release of precision bred organism in England

Amendment 11

Moved by

[Baroness Hayman of Ullock]

11: Clause 3, page 3, line 24, after “unless” insert “, in relation to a precision bred animal, the date condition in section (Entry into force of provisions relating to animals) has been met, and unless”
Member’s explanatory statement
This amendment would prevent a precision bred animal from being released unless the date condition in a later Clause in the name of Baroness Hayman of Ullock has been met. Taken collectively, these amendments would ensure a phasing in of the animal provisions in the Bill.

[Baroness Hayman of Ullock (Lab)]

I thank the Minister for his response to my amendment and I am pleased that he reaffirmed the Government’s ambition to phase in different species. The problem is that it is not actually in the Bill, so there is no guarantee that it will happen. I would also like to come back to him on this: the amendment is not designed to restrict. If scientific evidence supports this application, it will not restrict it. I thought I had made that clear. Also, if the Minister believes that the introduction of animals is likely to be later than the date in my amendment, I really do not understand the reluctance to accept this and have it in the Bill. On that note, I would like to test the opinion of the House on my Amendment 11.

17:22

Division 1

Ayes: 192

---

Labour: 114
Liberal Democrat: 57
Crossbench: 14
Independent: 4
Green Party: 2
Plaid Cymru: 1

Noes: 206

---

Conservative: 180
Crossbench: 19
Independent: 4
Democratic Unionist Party: 1
Labour: 1

17:35

Amendment 12

Moved by

[Baroness Bennett of Manor Castle]

12: Clause 3, page 3, line 30, at end insert—
“(iv) the details of the gene editing event, and the record of the whole genome sequence of the qualifying organism, are recorded in a publicly available register established by regulations,”

[Baroness Bennett of Manor Castle (GP)]

My Lords, in moving Amendment 12, I will speak also to Amendment 13 in my name. This is an adaptation and development of the work done by the noble Lord, Lord Winston, in Committee—he is not currently in his place; I hope he will be back in a second—when he put forward the idea of a register. This is my attempt to write that register into the Bill, to establish full transparency and traceability around gene editing.

The drafting is my own, although I thank the Table Office for its help. I will not claim that this is the perfect way to set this in the legislation, but in this legislation it absolutely should be, for the sake of transparency and traceability. We are giving commercial companies the right to mess around with the basis of life on earth. Showing their working and allowing the knowledge to be available to others is a small price to pay.

The noble Lord, Lord Krebs, and I had a detailed debate in Committee about whether it is possible to identify gene-edited organisms; some aspects of that debate remain in dispute, but we heard on Friday’s call that, should the nature of the gene-editing event be recorded, as Amendment 12 calls for, there is absolutely no doubt that any gene-edited organism can be identified.

This amendment goes further in calling for the record of the whole-genome sequence of the qualifying organism to be recorded. For the House’s information, I think it is worth going a little further into that, and into an explanation of why the regulations should be covered by the affirmative procedure.

Whole-genome sequencing can accurately identify the full spectrum of unintended mutations at both off-target and on-target editing sites, including the inadvertent insertion of foreign DNA. Given what we heard from the Minister in the last group, I am not sure how we can be sure than an organism is legal if we do not have this. Multiple-reference genomes derived from the whole-genome sequencing of major crop plants are available already in the public domain. That has yielded important information about the unintended effects of gene editing on the genome. For example, in a study on gene-edited rice using CRISPR-Cas, whole-genome sequencing was used to investigate unintended mutations arising from several aspects of the gene-editing procedure. The procedure, which taken as a whole includes tissue culture and Agrobacterium-mediated cell transformation, resulted in several times more unintended mutations than were found in rice propagated through natural pollination. If you do not do the whole-genome sequencing, you simply cannot know that to be the case.

We are sometimes told that this is too complicated, difficult and expensive. We have been talking about how fast this field is moving, and one recent innovation is what is known as long-read DNA sequencing. Unlike many things in this area, its meaning is pretty clear-cut from its self-description. It provides a continuous sequence that reads up to 1.5 million DNA base units and would provide unequivocal understanding of the placement of long stretches of repeat sequences, which some of the older methods that break up the DNA strand do not do so easily. Several companies offer a long-read genome sequencing service, making this technology readily available.

I did not write this into the Bill, and it is another reason why I put in the affirmative procedure, but this register could also include requirements for molecular compositional profiling methods: gene expression-profiling transcriptomics, protein-profiling proteomics and small biochemical molecule-profiling metabolomics—let us call them “omics”. These are now used by thousands of research groups around the world to gain a more comprehensive and deeper insight, not just into the genome but into how an organism functions. It is crucial to understanding the health and disease implications of the genome to see how that genome plays out in the proteins in the cells.

A 2016 research paper published in the extremely prestigious journal Nature used a multi-omics approach to demonstrate that a glyphosate-tolerant GM maize was not substantially equivalent to its non-GM relative. The large-scale protein and metabolite alterations that were detected were unintended consequences of the GM transformation process, with potential downstream health consequences for the consumer in terms of the introduction of toxins and allergens.

I see that the noble Lord, Lord Winston, is here and I refer Members of your Lordships’ House to his speech in this area and our discussion in Committee. To know what is going on is scientifically and practically essential. That is why I have tabled these amendments. I do not intend to move to a vote, but this is a matter that the Government should commit to. It is interesting that in our discussion on Friday with all the experts one of them said to me, “Yes, there is a public register. At least that’s how it’s going to work”. I do not know whether the Minister can explain this, but my understanding is that there is nothing in the legislation that provides for a public register. If I am wrong, I am happy to be corrected. However, these people are proponents of the Bill and this procedure, and they believe that there will be a public register. If that is what the experts are trusting in and want to be able to use—it is a public resource—and if it is not already there, the Government certainly should introduce it. I beg to move.

[Lord Krebs (CB)]

I thank the noble Baroness, Lady Bennett, for introducing the amendment because it gives me a chance to say two things quickly. One, which she alluded to, is our discussion in Committee about detectability by analytical methods. I asked Wendy Harwood from the John Innes Centre to give me an exact form of words about that, which I shall repeat with her permission. It confirms, in a way, what the noble Baroness has just been saying. Wendy Harwood said:

“If you had details of the exact edit made, then you could detect”


the PBO by polymerase chain reaction,

“followed by sequencing of the PCR product. If you were just presented with a plant, and no audit trail and asked whether it was genome edited, you could not determine whether it was or not.”

One therefore needs an audit trail in order to be able to tell. She continued:

“If exactly the same change had been made by precision breeding as had been made by traditional breeding, and you tested by looking for that precise change, then you would not be able to tell which was which. Again an audit trail would be required. You might however have a case where both PB and traditional breeding had made changes to the same gene, giving the same trait, but these changes were not identical at the DNA level, in this case you could tell the difference.”


That emphasises that if one is serious about knowing which products on the shelves are produced by PB, there needs to be an audit trail.

On whether whole-genome sequencing is of value, one angle is that so much mutation in the genome is going on all the time that it is hard to know what one’s reference material would be. The Royal Society produced in its evidence to the Defra consultation a calculation that in a hectare of wheat there would be at least one mutation for every base pair in the wheat genome. There are 10 billion base pairs in a wheat genome. In a one-hectare field of wheat, there would be a mutation somewhere in every one of those base pairs. So the difficulty with using whole-genome sequencing is what one makes of the information one gets. There will be huge variation and one does not quite know what the value of the information is.

[Baroness Bennett of Manor Castle (GP)]

I think we have agreement that some parts of the genome are functionally relevant and have a particular functional significance. We perhaps have points of disagreement about how relatively protected some of those may be from natural mutations. There are lots of mutations that happen naturally in areas that may be beneficial to the plant but only in certain parts of the genome and with certain sorts of functional effects. The parts of the genome that are particularly crucial to the function of the organism are the structural, basic ones, where there are far fewer natural effects. If you read the complete list of the genome, you are going to look at certain bits to see which changes are significant, which ones may be deleterious and which ones are less significant. Does the noble Lord agree?

17:45

[Lord Krebs (CB)]

Obviously, I agree that the different parts of the genome serve different functions. As the noble Baroness said in Committee, when we were students, we learned about junk DNA. However, it is not junk DNA; it can play an important part in regulating the expression of other genes. I take the point.

[Lord Winston (Lab)]

I love the idea of the noble Lord’s field of wheat waving gently in the breeze and the sunlight, but does he not agree that certain genes in those wheat seeds are rather well conserved and, in fact, do not change? Indeed, certain genes are protected from mutation. Therefore, there is nothing to prevent us looking at analysis to see the frequency of certain mutations within the genome; perhaps we need to be doing that. The data there could be very useful in all sorts of ways.

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, this group of amendments deals with technical scientific issues and moving whole or parts of clauses from the negative procedure to the affirmative. Your Lordships will know that I am not a scientist so I shall, I hope, avoid digging a hole for myself or getting caught in the crossfire.

Amendment 12, in the name of the noble Baroness, Lady Bennett of Manor Castle, would require the details of genome sequencing to be recorded in a publicly available register. If the processes outlined in this Bill are to be carried forward successfully, it will be necessary for farmers, producers and the public especially to have confidence in the process. Ensuring that there is transparency and visibility through a publicly available register can only help this process. The DPRRC was strongly in favour of such a register in its report of 2 December.

Amendment 13, also from the noble Baroness, Lady Bennett, seeks to make the whole regulation in Clause 3 affirmative. Currently, the Bill is silent on whether Clause 3 is affirmative or negative. I suspect that, as it currently stands, Clause 4(6) applies to the whole of the section headed “Release”.

I am grateful to the Minister for his amendments in this group. At Second Reading and in Committee, concerns were raised at the number of negative procedures in the Bill. The Minister has tabled government Amendments 14 and 15 to Clause 4, which would qualify the section on marketing and keep subsection (1)(b) as negative while the rest of this clause will be moved to the affirmative procedure. This is welcome and gives the opportunity for debate on the notification requirements if necessary. Perhaps the Minister can clarify in his response whether Clauses 3 and 4 are covered by his Amendments 14 and 15. If not, can he say what process is applied for Clause 3? I am sorry; I may have misunderstood what this is all about.

Amendment 16, to Clause 6(4), moves regulations on the precision bred confirmation from negative to affirmative. We welcome the Minister’s movement on this point. This is a sensible way forward and, again, gives the opportunity for further debate.

Government Amendments 24 and 25 are somewhat confusing. Amendment 24 indicates that the regulations under Clause 18(1) are to be affirmative, and Amendment 25 deletes “this section” and inserts “subsection (6)”. I think this means that Clause 18(1) is affirmative while the rest of the clause is negative, as Clause 18(7) has not been amended. I would be grateful for the Minister’s clarification. It is important for when we come to debate these things later to know whether it is affirmative or negative. Although these are technical amendments, they are very important and provide transparency in the Bill, which is to be welcomed.

[Baroness Hayman of Ullock (Lab)]

My Lords, the noble Baroness, Lady Bennett, has tabled two amendments. Amendment 12 concerns the publicly available register. Clearly, transparency and information for the public will be important if we are to carry people with us, so we need to look at how we develop registers and information to reassure people and to give them the information that they need to have confidence in the legislation.

In Committee, my noble friend Lord Winston and the noble Baroness, Lady Parminter, drew attention to the parallel piece of legislation, the Human Fertilisation and Embryology Act, in which there is a requirement for the surrender of ongoing records containing the information about the impacts, both the positive and the adverse outcomes, on individuals used under the terms of that Act. The noble Lord, Lord Krebs, read out an opinion which emphasised the importance of an audit trail, so there is a general feeling in this House that information and a public register are important.

Amendment 13 is also in the name of the noble Baroness, Lady Bennett. I thank the Delegated Powers and Regulatory Reform Committee for its report on the Bill, which was very helpful. I reassure the Minister, who knows that we support the Bill, that what concerns us is that so much is left to an unknown number of SIs over an unspecified timescale. If the regulations in Clause 3 are under the affirmative procedure, Parliament will rightly have a formal role in improving the finer details of the release and marketing notices, crucially ensuring that we have proper political consensus on this. As the noble Baroness, Lady Bakewell, said, the Government have moved a number of clauses from the negative to the affirmative procedure. I will not go into all the detail, as she covered everything that I was going to ask about on this, since some of it is not crystal clear. We know that the Government can see that there is merit in moving from the negative to affirmative. Can the Minister clarify why not this clause as well if that is not the case, as this is important?

[Lord Benyon (Con)]

My Lords, I thank the noble Baroness, Lady Bennett, for her Amendment 12, which would require details of the specific gene editing event and the whole-genome sequence of a qualifying precision-bred organism to be made publicly available for its release into the environment. The noble Baroness’s Amendment 13 to Clause 3 would require that regulations made under this clause to establish a public register containing this information are subject to the affirmative procedure.

It is not our intention to require breeders to include sequence data as part of their release or marketing notices. I have discussed this previously following an amendment tabled by the noble Lord, Lord Winston, in Committee. We have since had a very useful meeting with the noble Lord and our scientific advisors, ACRE, to explore why whole- genome sequencing information has limited value in most cases, and the noble Lord has not retabled his amendment on Report.

This type of information has limited value because there is a significant degree of genetic variation between individual plants and animals within a species, which is more or less the point that the noble Lord, Lord Krebs, was making. This amount of background noise means that the value in requiring whole-genome sequences is limited in terms of addressing regulatory questions; for example, questions about the precision-bred status of a plant or animal. Additionally, the release notice that researchers are required to submit to Defra will be in line with the requirements of the Genetically Modified Organisms (Deliberate Release) (Amendment) (England) Regulations 2022, which were agreed by the affirmative procedure.

Our intention is that information provided in release notices will be published on the precision breeding register and will include the relevant and necessary information about the precision-bred organism in it. We also intend to require developers to confirm that the organisms that they intend to release in research trials meet the criteria in the Bill. The technical details of this notice will be prescribed by regulations, prepared with input from the advisory committee appointed to advise the Secretary of State on the regulatory status of these organisms and, in accordance with the amendments to Clause 4 that I have tabled, our intention is that such regulations will be scrutinised using the affirmative procedure before they are made.

I hope that this reassures noble Lords and that the noble Baroness, Lady Bennett, is persuaded to withdraw this amendment and not move her additional amendment to Clause 3, which would specify the parliamentary procedure for the delegated power that her substantive amendment would insert.

I always pay particular attention to points raised on secondary legislation by the noble Baroness, Lady Bakewell. As a member of the Secondary Legislation Scrutiny Committee, she is very good at holding me to account on these. I did not quite understand her point about Clause 3 because there are no regulations in Clause 3 and therefore no requirement for it to be affirmative or negative.

We remain of the belief that the matters to be set out in the regulations under the powers in Clauses 4(3) and 6(2) are administrative in nature. However, the Government acknowledge that these provisions are of significant public interest. We have heard this previously in the House and the Delegated Powers and Regulatory Reform Committee has raised this as well. We have considered these matters closely and have decided to change the procedure from negative to affirmative for both powers. These changes will increase the scrutiny when these powers are used to prescribe the information which must be provided to the Secretary of State by a person who wishes to release or market a precision-bred organism. I hope that noble Lords feel that I was serious in Committee when I said that I had listened to them. I hope that they feel that this improves the Bill. Regulations under Clause 4(1)(b) would be administrative in nature, not of significant public interest, and will remain subject to the negative procedure. I hope that this reassures noble Lords.

Amendments 24 and 25 will increase the level of scrutiny when powers are used to prescribe information that must be included in the precision breeding register. The Government acknowledge that these provisions are of significant public interest. We accept noble Lords’ concerns about the level of scrutiny for such provisions. Therefore, we will change the parliamentary procedure from negative to affirmative for the power in Clause 18(1). Regulations under Clause 18(6) regarding the keeping of the register, which is an administrative matter and, again, not of significant public interest, will remain under the negative procedure.

[Lord Winston (Lab)]

My Lords, I thank the Minister for what he has just said, but can he answer this question about whole-genome sequencing?

When we first started genome sequencing, it was laborious, expensive, time-consuming, and so on. It is now a pretty rapid process and can be done without huge expense. Does the Minister not agree that one of the reasons for doing this is not just marketing—because of course there are different issues there, which is how we are addressing this—but the advantage of getting more knowledge about what we are doing? The advantage there would be seeing where things are moving within the organisms that we are trying to edit. That is important as a research tool because, ultimately, we are doing something that—admittedly—we do not fully understand, and this would greatly increase knowledge. Does he feel that this is a relevant point?

[Lord Benyon (Con)]

It is entirely a relevant point, and was much on our minds when we debated some months ago a research measure in secondary legislation to allow the development of plant precision editing but not for it to be taken forward to market. The noble Lord is absolutely right that this is fast-moving and that we therefore need to be clear about how we regulate: that we are regulating a research process and a process to take products to market. Ministers will have to be clear about the intention of the organisation taking that forward. I hope, through the changes that we made, that there will be greater parliamentary scrutiny, that people with real knowledge, particularly in this place, will be able to scrutinise that, and that the Secretary of State of the day will have the best available information about what is being taken forward and why—whether it is just for research. The point made by the noble Lord about the value of research of products that will never go to market, that it is just to understand a particular aspect of genomic sequencing, is crucial.

18:00

[Baroness Bennett of Manor Castle (GP)]

My Lords, I thank the Minister for his answer, and everyone who contributed to this debate. Once again, the noble Lord, Lord Winston, gave us the expert nailing of the issues. I thank particularly the noble Baronesses, Lady Bakewell of Hardington Mandeville and Lady Hayman of Ullock, for stressing the importance of transparency, both for scientific and public confidence reasons.

The Minister went over some of the same ground that the noble Lord, Lord Krebs, and I circulated back and forth on in terms of saying “Oh, there are lots of mutations” is not a reason not to do whole-genome sequencing. What we see are the mutations that are of greater importance in particular areas of the genome, et cetera, so the claim that “Oh, there are lots of mutations, so it doesn’t matter” does not scientifically stack up.

We are in a situation of regulations. The Minister said that the regulations will specify that the release notices contain “relevant and necessary” information. I think it is already clear that the detail of what “relevant and necessary” actually means is going to be crucial. We all know the problem with regulation and the way in which we are given it on a take it or leave it basis. Again, I feel great reluctance: I feel that we really should have whole-genome sequencing, and indeed broader omics testing. But I see no option at the present moment but to withdraw the amendment, with great reluctance.

Amendment 12 withdrawn.

Amendment 13 not moved.

Clause 4: Release of precision bred organism: notification requirements

Amendments 14 and 15

Moved by

[Lord Benyon]

14: Clause 4, page 4, line 24, leave out “this section” and insert “subsection (1)(b)”
Member's explanatory statement
This amendment is consequential on the Minister’s next amendment to Clause 4.

15: Clause 4, page 4, line 24, at end insert—
“(7) Regulations under subsection (3) are subject to the affirmative procedure.”Member's explanatory statement
This amendment would provide for regulations under Clause 4(3) to be subject to the affirmative procedure.

Amendments 14 and 15 agreed.

Clause 6: Application for precision bred confirmation

Amendment 16

Moved by

[Lord Benyon]

16: Clause 6, page 5, line 31, leave out “negative” and insert “affirmative”
Member's explanatory statement
This amendment would provide for regulations under Clause 6(2) to be subject to the affirmative procedure.

Amendment 16 agreed.

Clause 11: Application for precision bred animal marketing authorisation

Amendment 17

Moved by

[Lord Benyon]

17: Clause 11, page 8, line 24, at end insert—
“(9A) Regulations under subsection (5) are subject to the affirmative procedure.”Member's explanatory statement
This amendment would provide for regulations under Clause 11(5) to be subject to the affirmative procedure.

[Lord Benyon (Con)]

My Lords, I thank the noble Baroness, Lady Jones of Whitchurch, for her amendments, to which the noble Baroness, Lady Bakewell of Hardington Mandeville, and—in the case of the first of the amendments—the noble Lord, Lord Cameron of Dillington, have added their names.

The amendments require the animal welfare advisory body, when assessing precision-bred animal marketing authorisation applications, to also consider and report on the notifier’s history of compliance with relevant provisions of the Human Fertilisation and Embryology Act 1990, the Animal Welfare Act 2006 and other legislation it deems relevant. However, the purpose of the animal welfare declaration process is not to vet notifiers themselves, but to assess their applications for marketing authorisations. The role of the welfare advisory body is to use its scientific expertise to evaluate the notifier’s animal welfare declaration. It would not be an appropriate body to assess compliance history.

We expect notifiers, as with any other keepers of animals, to ensure they are in full compliance with all applicable animal welfare laws. The Animal Welfare Act, as mentioned in the noble Baroness’s amendment, will continue to apply to all vertebrate animals subject to precision breeding. Under the Act, it is already an offence either to cause any captive animal unnecessary suffering or to fail to provide for the welfare needs of the animal. Persons found to have committed certain serious offences under the Animal Welfare Act may be disqualified from keeping animals. Such persons would therefore be unable to keep animals that have been precision-bred.

Similarly, other animal welfare legislation provides for appropriate sanctions for non-compliance. For example, notifiers may also be licence holders for research under the Animals (Scientific Procedures) Act, known as ASPA. It is in the interest of such notifiers to ensure that any research involving animals carried out in the UK complies with the requirements of the ASPA licences relating to that research; these licences may be revoked or suspended if their conditions are not complied with.

Furthermore, the Bill provides powers under Clause 15 for regulations to enable the Secretary of State to suspend or revoke a precision-bred animal marketing authorisation if new information about the health or welfare of the animal or, crucially, its qualifying progeny comes to light, or if the notifier fails to comply with a legal requirement to report information about a relevant animal’s health and welfare under Clause 14. Regulations will describe the procedures to be followed when a marketing authorisation is suspended or revoked, and the consequences of such suspension or revocation.

Amendment 21 reflects ones put forward during previous stages, in this House and the other place. We intend to explore these matters further as we develop the technical details underpinning the animal welfare declaration process. The Government agree that safeguarding animal welfare is crucial, and I acknowledge the high level of interest in this topic. That is why, as I mentioned previously, we have commissioned an external research project to gather the evidence required to develop the health and welfare assessment that underpins the declaration process. This will enable us to set out, in regulations and guidance, the information that a notifier must provide to support their declaration that the health and welfare of a precision-bred vertebrate animal is not expected to be adversely affected.

Furthermore, Clause 13 already ensures that the Secretary of State will need to be satisfied with the animal welfare declaration before issuing a marketing authorisation. That is why we do not consider the amendment to be necessary. In addition, as I mentioned before, the power in Clause 25 allows us to set out in regulations what constitutes an adverse effect on health or welfare. This includes any parameters needed for assessing that and could include consideration of any known health and welfare issues in selectively bred animals.

Finally, the welfare declaration and the welfare advisory body’s assessment will be based on the principle that relevant precision-bred animals will need to be kept in conditions which satisfy existing requirements in the Animal Welfare Act 2006 and, where relevant, the Welfare of Farmed Animals (England) Regulations 2007. I fully understand the noble Baroness’s concerns. None the less, existing animal welfare legislation is in place and the Bill is intended to work alongside that to enable responsible innovation.

I will now address Amendments 17, 18 and 26 in my name. It is essential that the animal welfare protections under this Bill command strong public and stakeholder confidence. To that end, we have listened carefully to the points raised by the Opposition and stakeholders about the need for strong animal welfare protections. We understand that noble Lords feel that there should be more opportunity for parliamentary oversight of these vital elements of the legislation. Consequently, we are tabling these amendments so that regulations made under the powers in Clauses 11(5) and 22(3) will need to be debated and actively approved by both Houses of Parliament through the affirmative resolution procedure before they come into effect.

Amendment 17 relates to Clause 11(5). The amendment provides an increased opportunity for parliamentary scrutiny when powers are used to lay out the form and content of the animal welfare declaration and accompanying documents, and the information that must accompany the declaration.

Regulations under Clause 11(9) regarding provisions for an application for a precision-bred marketing authorisation to be made by a person other than the notifier are a technical and administrative matter and not of significant public interest. They will therefore remain subject to negative procedure.

Amendment 26 relates to Clause 22(3). This amendment will provide Parliament with an increased opportunity to scrutinise and debate the body which is to be designated as the animal welfare advisory body, while retaining the flexibility the Bill provides on how the advisory body can be established. We expect there to be strong public interest in the requirements set out in the animal welfare declarations, and we want to come to Parliament with a robust set of proposals informed by expert advice. Indeed, that is why we have already commissioned in Scotland’s Rural College to run an independent research project to set criteria for the animal welfare assessment and the evidence that will be required to accompany it.

The research will involve experts from the Animal Welfare Committee and a wide range of organisations with expertise in animal welfare, genetics and industry practice. This is a growing, innovative sector, and the regulatory system that oversees it is likely to need to evolve over time. Establishing the regulations in secondary legislation subject to the affirmative procedure will allow the Government to ensure that the regulatory system continues to achieve its goals in the long run, while maintaining proportionate parliamentary oversight of its design and future development. I hope noble Lords will be content to accept these amendments.

[Baroness Jones of Whitchurch (Lab)]

My Lords, I should first declare an interest through my involvement at Rothamsted, as in the register. I have tabled Amendments 19, 20 and 21 in this group. They all focus on the welfare advisory body in protecting animal welfare. I am grateful to the noble Baroness, Lady Bakewell, and the noble Lord, Lord Cameron, for their support.

Amendments 19 and 20 would require the welfare advisory body to look beyond the information provided by applicants to ensure that they have a consistent record of meeting animal welfare standards, as set out in previous legislation. Amendment 21 would require the welfare advisory body or the Secretary of State to consider wider health and welfare issues before granting a marketing authorisation. These factors, set out in the new clause, include the direct and indirect effects on the health of the animal or its offspring, whether there might be pain or suffering arising from increased yields or faster growth, and whether the precision-bred traits may result in the animal being kept in worse conditions. These amendments reflect the widespread concern raised in Committee about the consequences for animal welfare of extending precision-breeding techniques from plants to animals, and they also express the concerns of many animal welfare organisations, including the RSPCA and Compassion in World Farming, as well as the report from the Nuffield Council on Bioethics.

As we discussed before, British farming and traditional breeding techniques have not always had a great record on considering animal welfare. Without going back over all the arguments raised in Committee, I will say that there remains a fundamental concern that the genetic editing of animals will be used for the wrong purpose. Once we understand that there could be benefits from improved disease resistance in animals, we need better guarantees that this will not result in animals being kept in more crowded, stressful conditions, which in turn could result in the spread of new and emerging pathogens. Similarly, we need better guarantees that precision-breeding techniques will not be used to speed up selective breeding for fast growth, high yields and large litters, when they have historically caused a great deal of suffering to farm animals, despite the animal welfare legislation already in place.

All these concerns are raised against the backdrop that so much of the detail in this Bill is left to secondary legislation, so we do not know how its provisions will work in practice. I hope the Minister will understand why we are trying to spell out in more detail the specific animal welfare protections in this Bill. I shall make a further point: this is specifically about animal welfare. It is not a criticism of the whole Bill. It is about the specifics and our widespread concern about wanting to get animal welfare protections right.

18:15

In his response in Committee, the Minister talked about getting the right balance of information between the welfare advisory body and the notifier requesting the marketing authorisation, but we do not believe that what is set out in the Bill is the right balance. It does not allow the welfare advisory body to make the wider checks on the past record of the notifier that our amendment would allow, and the Minister had just said that he does not think that it is the role of the welfare advisory body to do that vetting. We argue very much that it is its role.

The Minister also argued that it is important to balance innovation with animal welfare. He argued this in Committee. He said that setting out parameters in more detail in the Bill could limit the implementation of more detailed measures that will follow—but this is precisely our concern. Moving from genetic plants to genetic animals is a huge ethical and environmental step, and it is right that the protections are spelled out in the Bill, where Parliament can have some control.

In Committee, the Minister referred to Clause 11, which requires applicants to make a declaration that they do not expect the health or welfare of an animal to be adversely affected. Well, in the words of a well- known quote, “They would say that, wouldn’t they?” The Minister also referred to Clause 14, which provides for further information to be required on animal health and welfare, but the clause states only that regulations may be made. There is no guarantee that they will be produced or what the additional information will be. The Minister also said that the Bill is intended to work alongside existing animal welfare legislation, but as it stands it does not empower the welfare advisory committee to cross-reference the notifier’s compliance with those regulations. In fact, the whole emphasis of Clause 12 is for the welfare advisory committee simply to scrutinise the information provided by the notifier rather than make any wider checks.

The Minister also sought to reassure us that the Government have an ambitious reform agenda for animal welfare, but I remind him that we are still awaiting legislation on many of the reforms promised in the manifesto.

So we believe that these amendments are proportionate and necessary. As the Bill stands, there is too much left to chance. There is nothing to ensure that the welfare advisory committee will be proactive and inquiring. In fact, the Minister, in his call for balance, does not want it to be too proactive in case it holds things up. There is far too much left to future regulation that may or may not happen. All these amendments do is ensure that the welfare advisory committee looks at the background of applicants to check that they are complying with existing animal welfare legislation and give the committee greater powers to investigate the impact of precision-bred techniques on the consequent pain, suffering and lasting harm to animals and the conditions in which they are kept.

We believe these additional protections will have broad public support, as well as being in the interests of the animals involved. We welcome the fact that the Minister has set up this external body to give further advice. That does not go against the amendments that we have tabled. It may be that there are further regulations that need to come after this Bill goes through. That is fine, but it does not militate against our amendments at this time. I therefore give notice that, depending on the Minister’s response, I may be minded to test the opinion of the House.

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, I thank the Minister for tabling Amendments 17, 18 and 26. The Government have responded well to the concerns expressed in Committee about the number of negative procedures on some critical issues. Amendments 17 and 18 relate to Clause 11, “Application for precision bred animal marketing authorisation”, which is a key element of the Bill. Regulations under subsection (5) are moved to affirmative, and only subsection (9), which deals with regulations for precision-bred animal marketing authorisations for a relevant animal, are negative and reserved to the Secretary of State. While it would have been preferable for all that clause to be affirmative, we are pleased with this movement, as the change allows more debate on these issues in future.

I turn now to Amendments 19 and 20 in the name of the noble Baroness, Lady Jones of Whitchurch, to which I have added my name—she introduced them fully, as always. The Government have been trying for a long time to introduce gene editing of plants and animals. Changing the name of this process to “precision engineering” has somewhat helped their case. At the heart of previous and current objections which have been raised over time against precision engineering is animal welfare.

Whenever a man, woman or child is to undergo a surgical or medical procedure, numerous forms have to be completed, and a consent form signed; in the case of a child, a parent or guardian signs. Animals undergoing genetic change have no such individual guardian, and they certainly cannot speak for themselves. It is therefore necessary for those of us in this Chamber to ensure that safeguards and trust are in place which will be robust. This trust is placed in the welfare advisory body. The noble Lord, Lord Winston, referred to ethics in his comments on the first group of amendments, and the issue runs all through the Bill. The process is that the notifier applies to the Secretary of State for an authorisation in relation to an animal, and the Secretary of State then refers the application to the welfare advisory body, which in turn provides a report for the Secretary of State. Amendment 19 requires the welfare advisory body to ensure that the notifier has a record which provides the necessary reassurance that animal welfare will not be compromised in any way. Precision engineering can take place, but not at the expense of the animal’s suffering. Amendment 20 is consequential on Amendment 19.

The noble Baroness, Lady Jones of Whitchurch, has also spoken to her Amendment 21, which proposes a new clause. This lists some additional factors which the welfare advisory body or the Secretary of State must consider before granting a marketing authorisation. The Minister has said that he does not feel that this is necessary, but such is the interest in the Bill and the consequences which flow from it that we believe a belt-and-braces approach is necessary.

We on these Benches do not wish to interrupt the passage of the Bill, but we support all efforts to ensure that animal safety and welfare are protected. This is not the stage of the Bill at which to relate cases of experimentation on animals which have gone horribly wrong and ended with considerable suffering to the animals concerned. Animal welfare is our prime concern, and I look forward to the Minister’s response, but if the noble Baroness, Lady Jones, is not satisfied with it and decides to divide the House, we will support her.

[Lord Cameron of Dillington (CB)]

My Lords, for the purposes of Report, I declare my interests: I am still involved in a family farming enterprise growing crops and rearing livestock, I chair the board of the UK Centre of Ecology & Hydrology, and I am president of the Royal Association of British Dairy Farmers.

As the House knows, I am a very strong supporter of the Bill and everything it stands for. It is only to strengthen the Bill that I have added my name to Amendment 19 tabled by the noble Baronesses, Lady Jones and Lady Bakewell, because here again we touch on the same weakness in the Bill that I referred to at earlier stages—notably, the oversight of the ongoing welfare of animals and their ensuing progeny affected by these processes. As I said at Second Reading:

“To my mind, however, there is too much responsibility, certainly in the latter stages of the proposed development process, for the notifiers themselves to keep the welfare advisory body informed. It appears that the notifiers are in the driving seat.”—[Official Report, 21/11/22; col. 1218.]


These notifiers will be the ones who have probably invested millions of pounds, and almost certainly years of man-hours and academic endeavour in the process, and will therefore be very strongly motivated to ensure that the results give them some sort of positive return. I am not saying that they will necessarily falsify the evidence, although that may not be beyond the realm of possibility, but they will surely be sorely tempted to slant the results—if only for the sake of their commitment to what they see as the greater good. For instance, one person’s definition of bovine, ovine or avian distress might be another person’s idea of, say, satisfactory close family living. Therefore, it is essential that the welfare advisory body has the duty to audit and check up on these notifiers.

I know that the Government—any Government—have a priority to repel all boarders when it comes to amendments to their legislation, but I cannot see how or why they would want to tell the public that their new welfare advisory body would not have an obligation to check up on and satisfy itself that the notifier is conforming to the codes of practice set out in existing legislation. I am sure that the Government will tell us that this is not necessary—in fact, they have already done so—that there are other bodies involved, and that the notifiers already have an obligation. However, unless the welfare advisory body has a specific duty to check on and audit the notifier, it is quite possible that such persons or bodies could slip through the Met. Oh! That is not necessarily a Freudian slip—I mean “the net”, of course, but after last week’s revelations about rogue policemen I expect you can see how my mind is working. The welfare advisory body needs a specific duty spelled out in the legislation to ensure that there are no rogue notifiers.

I hope that the Government will see fit to accept this amendment, or undertake to discuss a positively worded government replacement amendment to be introduced at Third Reading, either for Amendment 19, to which I put my name, or Amendment 21, or indeed Amendment 22 in the next grouping. There has to be some give here on their part to persuade me, and I would like to think to persuade the House, that a vote on this matter of animal welfare is not necessary.

[Lord Jopling (Con)]

My Lords, during the proceedings on the Bill—I spoke at Second Reading—it has been clear that some people, both inside and outside the House, do not want anything to do with genetics in terms of food production, and think that its application is anathema. I understand that and I do not blame them in the least, although I do not agree with it, but I have been looking at Amendment 21 in the name of the noble Baroness, Lady Jones of Whitchurch, and I ask her whether she thinks that the provision in proposed new subsection (3)(b) might well give an opportunity for one of those people. Its wording is about progeny being

“likely to experience … lasting harm”

resulting from “faster growth” If you take that to its logical conclusion and encourage faster growth in an animal used in the meat trade, it is fairly clear that the animal will become suitable for slaughter at an earlier stage than if it had not had the influence of genetics. If you create faster growth by the application of genetics that ends up with the animal having a shorter life, is that not lasting harm? Some people could argue that, and I ask the noble Baroness if she would like to comment on that question.

[Baroness Jones of Whitchurch (Lab)]

I am not sure if this is the right moment to speak, but, in answer to the noble Lord’s specific question, the amendment is saying only that the welfare advisory body should take that into account. If there were other overriding reasons why we would want to have faster growth, for example, then that would be a balanced decision that it would make. However, if the faster growth were indeed leading to more pain, we hope it would take that into account. That is what the animal welfare role ought to be about. In Committee we heard lots of examples of new breeding techniques causing considerable pain, but I hope we are moving away from that now and can have a more generous attitude towards both conventional breeding and, potentially, the genetic breeding of animals where it does not have that effect. So it is all about the balance, and this is just one factor that the welfare advisory body will take into account.

18:30

[Baroness Rock (Con)]

My Lords, I declare my interests as a tenant farmer and as chairman of the Rock review into England’s agricultural tenancies.

The Government’s procedural amendments will increase parliamentary oversight of the design and future development of the animal welfare provisions. The Government recognise that there is a need to safeguard animal welfare, and that is why we need a step-by-step approach by bringing legislation into effect for precision-bred plants first and then for animals. Research in farmed animals is already leading to the development of animals that have increased resistance to some devastating diseases that, as farmers, we all see, and it thereby enhances the health and welfare of animals.

[Baroness Hayman of Ullock (Lab)]

My Lords, I welcome the government amendments that move the regulations to the affirmative procedure; they are extremely welcome.

I thank my noble friend Lady Jones of Whitchurch for her thorough introduction to her Amendments 19 to 21. I am sure noble Lords will remember that in Committee I tabled a number of amendments relating to the welfare advisory body, so we are very pleased to see my noble friend Lady Jones tabling similar amendments today. I spoke at length on this issue in Committee, my noble friend has introduced her concerns and we have heard from across the House, so I shall be brief.

Amendment 19 makes it clear that, in addition to considering information submitted by the notifier, the welfare advisory body should satisfy itself that the notifier has a record of acting in a manner that is consistent with research and animal welfare requirements across other Acts of Parliament. That really should be part of the body’s role. We do not want any confusion or different decision-making across different bodies.

I may have this recollection wrong, but I thought that in an earlier meeting a flow chart was mentioned showing how different animal welfare bodies, in Defra and the Home Office, would interact. I had been hoping to receive a copy of that to get some clarification about precedence and how this was all going to work together. It may have gone into my spam folder and I may have missed it, but if the Minister could check on that, that would be very helpful.

Currently, the Bill states that the welfare advisory body has to determine whether in the animal welfare declaration the notifier has paid regard to the risks to an animal. One of my concerns has always been that it is the notifier who is driving the process and is in the driving seat, rather than the welfare advisory body, which is why we were all very concerned about more checks and balances. We know the Bill says that the notifier has to take reasonable steps to assess those risks, but we do not believe that is a strong enough protection for animals in the Bill.

My noble friend’s amendment would mean that the welfare advisory body had to assess the impact on animals where a precision-bred trait was developed, with the aim, as she said, of achieving fast growth, high yields or other increases in productivity. As we have heard, we have seen that too often in traditional breeding methods, so we need to bring in these protections. We have heard many examples of traditional selective breeding producing animals that were highly efficient but this was often at the expense of animal welfare, and we need to ensure that that is not an unfortunate consequence of the Bill. The RSPCA and Compassion in World Farming have raised serious concerns about the lack of safeguards in the Bill to prevent that happening. In addition, the Nuffield Council on Bioethics has drawn our attention to the fact that many of the effects of selective breeding have been unintended.

We agree with our noble friend that it is reasonable that welfare impacts should be assessed here. Without the amendment, it is not clear exactly how that would be part of that process with the advisory body, particularly in relation to other bodies that already exist. So we strongly support my noble friend and believe that her amendments should be in the Bill.

[Lord Benyon (Con)]

My Lords, I am grateful for another useful debate. I assure the noble Baroness that we sent her a copy of my flow chart, so it must have ended up in her spam folder. I hope none of my other correspondence to her will be rejected into the ether. It sets out in five clear steps the process of taking something through to authorisation.

I say to the noble Lord, Lord Cameron, that I am not one of those people who repel all boarders when it comes to amendments; we have actually moved considerably on the scrutiny of the Bill, and we want to ensure that there is as much agreement as possible. I concede that we might have a problem on Amendment 19, but I will come on to that.

I repeat that the welfare declaration and the welfare advisory body’s assessment will be based on the principle that precision-bred relevant animals will need to be kept in conditions that satisfy existing requirements in the Animal Welfare Act 2006 and, where relevant, the Welfare of Farmed Animals (England) Regulations 2007. So existing animal welfare legislation is in place, and the Bill is intended to work alongside it to enable responsible innovation.

An accusation was made, although I cannot remember who by, that this was an enabling Bill and was somehow a forest of Henry VIII clauses. I reject that. It is not a skeleton Bill. We have set out our substantive policy proposals in the Bill and have included appropriate delegated powers to supplement those provisions. Delegated powers serve a valuable purpose and it is always important to assess them in context. Simply counting up the number of powers in a given Bill is not necessarily always meaningful, but I hope we have shifted the balance in terms of those that are affirmative and those that are negative.

There has been talk of belt and braces. I think you can overdo caution in these circumstances, and you can clog up the system. I really feel it would be difficult to accept Amendment 19 as it would pre-empt the Scottish royal college research project. The Bill already outlines a regulatory framework to safeguard animal welfare that goes beyond existing requirements in traditional breeding.

I hope that my words, and the government amendments to increase the degree of parliamentary scrutiny on the animal welfare provisions in the Bill, provide noble Lords with sufficient reassurance not to press their amendments.

Amendment 17 agreed.

Amendment 18

Moved by

[Lord Benyon]

18: Clause 11, page 8, line 25, leave out “this section” and insert “subsection (9)”
Member's explanatory statement
This amendment is consequential on the Minister’s previous amendment to Clause 11.

Amendment 18 agreed.

Clause 12: Report by welfare advisory body

Amendments 19 and 20 not moved.

Amendment 21

Moved by

[Baroness Jones of Whitchurch]

21: After Clause 12, insert the following new Clause—
“Additional factors to be considered in relation to a precision bred animal marketing authorisation(1) When producing a report under section 12, the welfare advisory body may choose to consider the factors listed in subsection (3).(2) In the event that a report of the welfare advisory body does not consider the factors listed in subsection (3), the Secretary of State must do so prior to making a decision under section 13(1) regarding the issuing of a precision bred animal marketing authorisation.(3) The additional factors to be considered in relation to a precision bred animal marketing authorisation are—(a) whether the precision bred traits will have a direct or indirect adverse effect on the health or welfare of the relevant animal or its qualifying progeny,(b) whether the relevant animal or its qualifying progeny are likely to experience pain, suffering or lasting harm arising from or connected with precision bred traits that aim to produce increased yields, faster growth or any other increase in productivity, and(c) whether the precision bred traits may facilitate the keeping of the relevant animal or its qualifying progeny in conditions that are likely to have an adverse effect on animal health or welfare.”Member's explanatory statement
This new Clause would introduce a small number of additional animal welfare factors to be considered by the welfare advisory body or Secretary of State prior to the granting of a precision bred animal marketing authorisation.

[Baroness Jones of Whitchurch (Lab)]

My Lords, I want to pursue Amendment 21. I thank all noble Lords who have spoken and I have listened very carefully to what the Minister has said. My amendments are fundamental to animal welfare issues and, as a number of noble Lords have said, they already have huge public support externally—not only in this House.

I still feel that we are being asked to take far too much on trust. The Minister said that it is not a skeleton Bill and he tried to reassure us on that. I would say on the animal welfare protections it is skeleton and it is sketchy, for the very good reasons that he has outlined in the past, which is that the Government have not decided what they want to do about animal welfare legislation going forward. So, we are being asked to take a great deal on trust. That is why we feel there need to be some minimum protections built into the Bill.

My Amendment 21 is not comprehensive, and I do not pretend it is, but it is the beginning of some basic protections on animal welfare, which in the absence of any other legislation we feel is absolutely necessary. I am very grateful to the noble Lord, Lord Cameron, and my noble friend Lady Hayman, who both made the correct point that at the moment the notifier is in the driving seat on all this. They are providing the information, and they have considerable vested interests in providing a selective range of information to the animal welfare body. There is not an external role for audit and check on the information they provide. We would not get this with any other regulator. Any other regulator the Government set up would be expected to have a wide-ranging role, not just to accept the information they were given. I think the logic of what we are proposing is common sense and it fundamentally addresses animal welfare legislation. I therefore beg to move.

18:14

Division 2

Ayes: 173

---

Labour: 99
Liberal Democrat: 55
Crossbench: 12
Independent: 4
Green Party: 2
Plaid Cymru: 1

Noes: 193

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Conservative: 174
Crossbench: 10
Democratic Unionist Party: 4
Independent: 3
Labour: 1

18:54

Clause 14: Precision bred animal marketing authorisations: reporting obligations

Amendment 22

Moved by

[Baroness Parminter]

22: Leave out Clause 14 and insert the following new Clause—
“Precision bred animal marketing authorisations: reporting obligations(1) Before issuing a precision bred marketing authorisation for the first time, the Secretary of State must establish a monitoring system for the reporting of potential adverse effects on the health or welfare of such animals or their progeny which must enable—(a) the voluntary reporting to the Secretary of State by keepers of animals, animal health and veterinary professionals, or others, of adverse effects,(b) the mandatory reporting to the Secretary of State by the marketing authorisation holder of adverse effects, and(c) relevant information to be available to support future research.(2) Regulations under subsection (1) may—(a) define what is meant by adverse effects on health and welfare,(b) prescribe information to be required from the notifier for reporting adverse effects to the Secretary of State,(c) make provision for requiring the recipient of marketing authorisation to take prescribed steps, in connection with supplying such an animal to another person, to secure that prescribed information about the subsequent health and welfare of that animal or its progeny, is provided by, or can be collected from that other person, and(d) determine the period after marketing authorisation that such reporting of adverse effects on the health and welfare of animals or their progeny of a given precision bred technique is to be required.(3) Regulations under this section are subject to the affirmative procedure.”Member’s explanatory statement
This amendment requires that, before precision bred animals are marketed, there be mechanisms established for reporting possible adverse effects on the animals’ health and welfare or that of their progeny. Regulations shall define adverse effects, details of the information required, and the time period over which it is required for any given precision breeding technique and application.

[Baroness Parminter (LD)]

My Lords, Amendments 22 and 23 are in my name and that of the noble Lord, Lord Trees. My name is at the head, but they are really joint amendments, and we grateful for the support of the noble Baroness, Lady Hayman, on the Labour Front Bench and my noble friend Lady Bakewell of Hardington Mandeville from the Liberal Democrats. The aim of the amendments is to ensure that a very clear monitoring system is set up in advance of when gene-edited animals are marketed. This is to ensure that the lessons can be learned about any adverse, or indeed positive, effects on animal welfare so that, throughout the process, we can make those learnings available to others so that animals can benefit in the future.

The provisions in Clause 14, which we are proposing this amendment as a replacement for, say that the Government “may” do this—but this is a fundamental issue about whether or not we are ensuring that a proper surveillance and monitoring system is in place right from the beginning. We would certainly concede that it is appropriate that the regulations to implement such a provision were in secondary legislation, but that is not what Clause 14 says: it basically says that the principle of undertaking a monitoring system is only a “may”, not a “must”. As was referred to earlier this evening, in comparable legislation—the Human Fertilisation and Embryology Act—the principle of having a surveillance and monitoring system in the Act and the regulations for how to deliver it are in secondary legislation. This seems to be a reasonable position.

The Minister talked on a number of occasions this evening about the research project with a Scottish university on how these regulations might work in practice. If you have the provisions on how they will be delivered in secondary legislation, that seems to be appropriate. But our amendment would put in the Bill a provision that the Government will introduce a surveillance and monitoring system and that the information will be recorded and available to inform decisions in the future to guarantee animal welfare— which is a common theme that we have covered this evening.

I am grateful to the Minister and the Bill team for their meetings with me, the noble Lord, Lord Trees, and others on this matter between Committee and Report. I do not wish to put words into the Minister’s mouth, but I can guess what he will say in response to our amendment, given the email that the noble Lord, Lord Trees, and I received from the Bill team on 13 January. The objections were that what was in the Bill was proportionate and what we were asking for was not a proportionate form of regulation. The exact words were that our amendment

“could be seen as being too burdensome a requirement for industry and would remove our ability to scale back reporting requirements in the future if we have a scientific basis for doing so”.

To be clear, our amendment is about putting in the Bill a requirement that there is scientific monitoring; we are not saying that the regulations need to go in the Bill. But the Bill team basically says that making it effectively something that the Government must do— putting it in the Bill—is too “burdensome” a requirement for industry. That does not seem a proportionate approach to a regulatory process, where you are balancing the rightful requirements of people going into this new industry against public benefit and animal welfare. This gets the scales wrong.

This is compounded when the email goes on to say:

“Introducing a requirement on the face of the bill to require and publish data from clinical outcomes from research would also curtail our flexibility and could lead to issues with commercial sensitivity”.


Again, it is not beyond the wit of man for Governments to produce regulations in secondary legislation that ensure that legitimate issues of commercial sensitivity are handled—but that should not preclude the duty on companies to supply that information so that lessons can be learned for the benefit of both animal welfare and public confidence, which is an issue that I think the noble Lord, Lord Trees, will address in some detail.

So I look forward to what other noble Lords will say and how the Minister will respond to both our amendments. I reserve our position on moving to a vote. But we think that this is a really important way of doing what the Government say they want to do: move ahead with this in a step-by-step way, while ensuring that the evidence is retained from the relevant companies and available to inform future research.

19:00

[Lord Trees (CB)]

I am grateful for the excellent introduction of the noble Baroness, Lady Parminter, which carries my name and those of two other noble Baronesses. I am also very grateful to the Minister for our meetings. As he and others in the House will be aware, I strongly support the Bill, and I commend the Government on including animals in it. Alongside existing animal welfare legislation, the new breeding technologies promise great benefits to animal health and welfare by reducing the burden of disease, thereby maintaining food production with potentially fewer animals, and reducing land use, the use of drugs and chemicals, the carbon dioxide footprint and greenhouse gas emissions.

I will expand on the productivity issue. Productivity goes both ways: you improve productivity by producing the same amount from fewer animals. Reducing the disease burden will enable us to produce the same amount with fewer animals, with concomitant advantages.

I thank the Minister for the amendments he introduced earlier. Although I have great enthusiasm for the modern technologies and for this Bill, which will facilitate the uptake of those technologies, this enthusiasm—and I note that in Committee the noble Baroness, Lady Hayman, referred to mine as “gung-ho”, which I take as a compliment—is not shared by everyone. If we want these technologies to be applied and the benefits to be realised, it is going to be essential to take the public with us and ensure public confidence so that they take them up and accept them. This amendment, as the noble Baroness, Lady Parminter, has elegantly said, basically makes it mandatory in the Bill that there shall be a reporting process for potential adverse effects post marketing. So it differs in that respect from Clause 14, but much of the rest of our amendment is copied from Clause 14.

What we are suggesting is also a two-tier reporting system. The first tier is a voluntary system, proposed for individuals such as farmers, keepers of animals, veterinary surgeons and animal health professionals. But for the commercial bodies that hold a marketing authorisation, there should be a mandatory requirement to collect data about the possible adverse effects on PB animals’ health and welfare and to submit that data at periodic intervals.

I will make a number of key points on the amendments. First, they mirror precisely current regulations with regard to possible adverse effects of drugs marketed for veterinary use, and indeed for human use, both of which have voluntary as well as mandatory reporting systems in place.

Secondly, we submit—and I reinforce the points the noble Baroness, Lady Parminter, made—that we do not feel that what we are asking is disproportionate, in that only the commercial sellers of these animals, the people making money, have the legal obligation to collect adverse effects reports and notify of them. But there is a provision for others to do so voluntarily, which could be a sort of check that the notifiers are not ignoring potential problems.

Thirdly, surely it is in the interests of the developers of a new product to safeguard the reputation of that product by seeking and surveying and monitoring the possible outcomes of the development when used in the real world.

Fourthly, the definition of an adverse effect can be made in regulations, and indeed that is already provided for in Clause 25. But I suggest it should refer to issues over and above the expected health issues that might affect any conventionally bred animals but might reasonably be associated with a particular breeding technology. But this requirement can be time-limited under regulation for any given precision-breeding method.

Fifthly, this can be quite a light-touch system. For example, the reporting of adverse effects of veterinary medicines requires an online pro forma which can be sent in digitally to the Veterinary Medicines Directorate, which assesses it. That directorate, of course, already exists. The marketing authorisation holders could also submit their reports in the first place to something like the VMD, which could triage them and then pass them to the Secretary of State for consideration by the animal welfare advisory body, which is already set up —we are not asking for new bodies to be set up.

Sixthly, and perhaps most importantly, the public acceptance of precision-bred animals is hugely important if the Bill is ultimately to be of value, and I submit that it will be a considerable reassurance for the public to know that the sale and commercial breeding of precision-bred animals will be monitored for unforeseen negative effects post-marketing to complement the pre-marketing reporting requirements under Clause 12.

Seventhly, such post-marketing monitoring will also provide both the animal welfare advisory body and the marketeers with essential feedback on the robustness, validity and safety of their pre-marketing assessments. That would be important to inform them and help them develop, if necessary, better systems.

Eighthly and finally, the Minister has assured us that the use in animals will be phased in. Surely, if one is phasing in, one would want to monitor what was happening to the first group in the real world when it is being sold and used by farmers. Only then, by collecting that information, could you be assured, at the end of whatever length of time that phase is, that it is safe and appropriate to proceed to subsequent phases. I would argue that phasing in automatically suggests that one needs to be monitoring what is happening in that first phase, which will involve thousands of animals but will be a real-world experiment to prove or disprove the safety of the system. I do not expect there to be major problems, but it will give assurance to the public. On these collective grounds, I support Amendments 22 and 23.

[Baroness Hayman of Ullock (Lab)]

My Lords, I thank the noble Baroness, Lady Parminter, for her thorough introduction to her two amendments, to which I am very pleased to have added my name. We strongly support what she is trying to achieve. We believe that there does need to be a reporting process for the adverse effects on the health and welfare of animals and, of course, their progeny. The noble Baroness, Lady Parminter, talked about the importance of evidence being retained to inform future research, as did the noble Lord, Lord Trees. This is also about public benefit; we discussed public benefit a lot in Committee, and it does need to be central to the Bill.

As the noble Baroness also said, we need to understand any lessons that can be learned. The noble Lord, Lord Trees, put it very clearly and succinctly when he talked about “robust” feedback. When we look at the first tranche of animals, we need to have the confidence that the industry is acting appropriately, that the outcomes are what we would hope to see and that we can catch anything that perhaps is not what we hoped for.

The noble Lord, Lord Trees, talked, importantly, about public confidence, as did the noble Baroness, Lady Parminter. If we are to carry the public with us, the future monitoring of animal health and welfare, consequences and outcomes is really important. Understanding adverse events is therefore terribly important. The noble Lord talked about drug introductions in the veterinary field, and we should have the same principles here, I believe, if we are to carry the public with us.

It does not seem to me that this amendment is disproportionate in any way. Instead, it would bring in some really important checks and balances and underpin what the Government are trying to achieve. I urge the Minister to consider very carefully what noble Lords have said. If the noble Baroness wishes to test the opinion of the House, she will have our support.

[Lord Cameron of Dillington (CB)]

My Lords, I repeat, again, that I am a very strong supporter of this Bill and everything it stands for. However, again, as I have said at every stage and indeed a moment ago on the previous grouping, the one weakness of the Bill is around animal welfare. Anyone reading the Hansard of the passage of this Bill through the Commons will note that it was the greatest concern of MPs too, but they failed to make even a dent in the Government’s protective carapace on this issue.

In Committee, many noble Lords from all sides of the House—myself included—put down amendments to try to minimise the possibility of any genetic change being proposed or implemented that could result in the future suffering or discomfort of, or distress to, animals or their progeny involved in the process. However, none of these amendments was put to the vote. We now have a well-thought-out amendment—or two—which precisely covers the worries that we all had and attempts to avoid them. The Government should think seriously before they reject them.

[Lord Benyon (Con)]

I thank noble Lords for their engagement on this important issue. I am grateful for the meetings that I have had with noble Lords from across the House on this and for them taking the time to share their thoughts with me and with the House on this occasion. I have found it constructive and enlightening.

We recognise that there is a need to safeguard animal welfare in the new regulatory regime; we are all united on this. That is why we are taking a step-by-step approach with regulatory changes for plants first, followed by animals. The measures in this Bill in relation to precision-bred animals will come into force, as I said before, only when safeguards for animal welfare are in place. This will include a monitoring and reporting system for the precision-bred animals once they are placed on the market.

The Bill will give us the ability to place a time-limited and proportionate duty on breeders and developers to monitor for significant health and welfare outcomes in animals that could be linked to their new traits and to report such outcomes to Defra. This monitoring and reporting system will be informed by research that we intend to carry out—which I have already spoken about—to help us identify the specific outcomes that must be reported, as well as appropriate timeframes and numbers of generations that must be monitored for each species or type of animal.

We believe that the powers in the Bill are sufficient to enable us to put this monitoring system in place. Clause 14 sets out that regulations may require the notifier, or any other person specified, to provide information to the Secretary of State about the welfare of the relevant animal and its qualifying progeny. The regulations may set requirements on the information that must be collected, and they allow the Secretary of State to apply reporting requirements in a bespoke manner. This flexibility is essential to ensure that any obligations placed on businesses are proportionate to risk—this is the key point that I hope I may be successful in getting across.

19:15

For example, proposed subsection (1)(c) of the alternative clause proposed by the noble Baroness, Lady Parminter, and the noble Lord, Lord Trees, would require the Secretary of State to mandate developers to share additional information for the benefit of other developers and researchers. It may be difficult to reconcile these requirements with the right of businesses to keep commercially sensitive information out of the public domain. I understand that there is a difference of opinion here, but I am led to believe, by people who understand the legal parameters within which we operate, that this really is important.

Clause 18 already provides adequate powers to share relevant information about marketing authorisations as required, while making sure that sensitive information is suitably protected. These powers will work alongside the powers under Clause 15, which enable the Secretary of State to make regulations setting out the circumstances in which an animal marketing authorisation should be suspended or revoked, such as on health and welfare grounds.

I turn now to Amendment 23, for which I thank the noble Baronesses, Lady Parminter, Lady Hayman of Ullock and Lady Bakewell of Hardington Mandeville, and the noble Lord, Lord Trees. This amendment would allow regulations under Clause 18 to require records of clinical outcomes, and any adverse effects and outcomes, of precision-bred animals and their qualifying progeny to be published on the register of precision-bred organisms. I think that this is there in the Bill—Clause 18(1)(j) already allows for regulations to prescribe additional matters relating to this Act to be included on the register.

I just reiterate that, before applying for a precision-bred animal marketing authorisation, the notifier will need to carry out an assessment of whether the health and welfare of a precision-bred vertebrate animal and its qualifying progeny are expected to be adversely affected by any trait resulting from a feature of the animal’s genome that results from precision breeding. This part of the application is not intended to be a tick-box exercise but, rather, a substantive assessment of risks to animal health and welfare that may result from the precision-bred trait. It will require a substantive assessment backed by a submission of data to show how a range of relevant criteria have been assessed.

I hope that, in the light of these points, I can persuade the noble Baroness and the noble Lord to consider not pressing their amendments.

[Baroness Parminter (LD)]

I thank the Minister for that reply. Sadly, it is quite clear, in the almost immortal words of the noble Lord, Lord Cameron, this evening, that we have not yet managed to make a dent in the Government’s protective carapace on this Bill—it is a great phrase—which is a disappointment, as a number of other amendments earlier in the evening led up to this amendment.

I do not want to spend much time. I just want to make two points to the Minister. He did not answer the fundamental question that Clause 14 says only that regulations “may” make provision. There is absolutely nothing to stop a future Government—and I do not wish to impugn the Minister’s character or motives—not doing anything at all. It is not about the regulations in future; they do not need to introduce a surveillance monitoring system in the future because all that is in the Bill is that regulations “may” make provision. If it was regulations “must” make provision, that might have made a difference, but the Minster was not prepared to concede that.

Secondly, we have a difference of opinion on the issue of commercial sensitivity. I referred to other legislation in comparable fields of human research where this issue has been overcome, and the noble Lord, Lord Trees, outlined other legislation in the veterinary field where this commercial sensitivity issue has been addressed with wording in legislation to that effect.

So I am not content with what the Minister has said. I have seen where we have been heading this evening, but I think it is a matter of principle. For those of us who feel strongly about this, this was a solid amendment seeking to do a good job to help this Bill from both sides of the House, and I wish to press it to a vote.

19:20

Division 3

Ayes: 161

---

Labour: 87
Liberal Democrat: 55
Crossbench: 14
Green Party: 2
Independent: 2
Plaid Cymru: 1

Noes: 176

---

Conservative: 162
Crossbench: 5
Democratic Unionist Party: 4
Independent: 3
Labour: 1

19:33

Clause 18: Precision breeding register

Amendment 23 not moved.

Amendments 24 and 25

Moved by

[Lord Benyon]

24: Clause 18, page 13, line 16, at end insert—
“(6A) Regulations under subsection (1) are subject to the affirmative procedure.”Member’s explanatory statement
This amendment would provide for regulations under Clause 18(1) to be subject to the affirmative procedure.

25: Clause 18, page 13, line 17, leave out “this section” and insert “subsection (6)”
Member’s explanatory statement
This amendment is consequential on the Minister’s previous amendment to Clause 18.

Amendments 24 and 25 agreed.

Clause 22: Advisory bodies

Amendment 26

Moved by

[Lord Benyon]

26: Clause 22, page 15, line 27, leave out “negative” and insert “affirmative”
Member’s explanatory statement
This amendment would provide for regulations under Clause 22(3) to be subject to the affirmative procedure.

Amendment 26 agreed.

Amendment 27 not moved.

Clause 48: Short title and commencement

Amendment 28

Moved by

[Baroness Bennett of Manor Castle]

28: Clause 48, page 30, line 22, leave out subsections (2) to (5) and insert—
“(2) This section comes into force on the day on which this Act is passed.(3) The rest of this Act comes into force on such day as regulations may appoint.(4) Regulations under this section may not be made until the Secretary of State has laid a Priority Setting Partnership Report before both Houses of Parliament.(5) The Priority Setting Partnership Report shall be drafted by a Priority Setting Partnership established and funded by the Secretary of State, and include a response from the Secretary of State.(6) The Priority Setting Partnership shall—(a) identify evidence uncertainties in relation to precision breeding which cannot be answered by existing research,(b) produce a list of research priorities in relation to precision breeding, and(c) make comments on this Act in relation to issues identified in respect of paragraphs (a) and (b).(7) The Priority Setting Partnership shall have a membership comprising—(a) scientists and academics with expertise in the field of genetics, agriculture, and ecology,(b) lay members of the public,(c) representatives of animal welfare organisations, and(d) other interested parties.”Member’s explanatory statement
This amendment would require a report to be published identifying gaps in scientific evidence relating to precision breeding before the Act can come into force.

[Baroness Bennett of Manor Castle (GP)]

My Lords, I am aware of the time but I have attempted, through this amendment, to find a creative new way of tackling some of the issues that have come up in the Bill. The noble Baroness, Lady McIntosh, said quite some time ago, early on, that we have to reassure the public. The noble Lord, Lord Trees, said in the last debate that it is essential to take the public with us. The Minister said that it is essential to build confidence. This amendment seeks a positive way forward. For anyone still worrying about their dinner break, I am not intending to put this to a vote, for the avoidance of doubt, but I want to suggest a way forward for what has clearly been a very difficult Bill with a lot of issues that remain of great concern in your Lordships’ House and more broadly.

On the first group, I spoke about the number of people whom I know are watching the debate at this very moment and feeling very disappointed about what has happened—or rather, not happened. I also refer back to what I said at the start about the scientists who were coming to me saying, “How do we get our knowledge through to the Government? We feel we are just not being heard”, and these are experts in a range of different fields. This is a creative suggestion. I might have included the word “consultation” but, as we have heard in debates on various amendments today, the Government did consult the public and stakeholders and then entirely ignored what they said. It might be said with some justice that what result you will get depends on how you ask the question. Indeed, I think the Minister at some stage referred to a survey saying, “If we can get drought-proof wheat with gene editing, should we go ahead with it?” If you phrase the question that way, you will get a positive result; however, that is not listening to the academic—a proponent of the technology—who said to me this week, “You cannot drought-proof wheat with one genetic change. That is a fact.”

What I am suggesting here is a process of deliberative democracy. This is something that has really taken hold in government departments—not, that I know of, in Defra, but in others—and indeed across the world. Some of the classic examples of deliberative democracy are in Ireland, on equal marriage and on abortion, where the public, when allowed a chance to deliberate and carefully consider the issues, showed themselves to be significantly in front of the politicians. We have seen climate assemblies in the UK— that may have been under Defra; I am not sure what department they were under. We have seen a very effective climate assembly in France. Lots of local government organisations have been having climate assemblies. It is a way of getting people together and getting themselves informed, both the general public and stakeholders.

I borrowed the term “priority setting partnerships” from an organisation called the James Lind Alliance; I did not ask first. I have spoken to people who have been involved in this process, and it is of particular relevance here because it has been used in a significant number of cases to look at how to set priorities and make decisions about ways forward in healthcare. It brings together clinicians, patients and carers in those healthcare settings. My Amendment 28 is a commencement amendment, but I am not going to push it on that basis. My constructive suggestion to the Minister is that, to find a way forward among many of the issues that have really not been resolved in your Lordships’ House, and have not been resolved among scientists, the Government should seek a deliberative process looking at how the regulations are constructed for the Bill. That process could actually get public involvement and engagement, because I guarantee him that there will be a great deal of public concern and public anger about where we have got to today, and public resistance to the products.

That issue is particularly going to arise around whether gene-edited products will be labelled. I could very easily have tabled amendments on this; lots of people asked me to. We debated it extensively in Committee, but I could not see a different way forward and I did not simply want to revisit the Committee debate. However, if we are going to talk to the public about labelling and about what is happening to their food, we know how deep the public’s concern is about food safety, the nature of their food and the way it is produced. I do not need to list all the scandals and the concerns, including genuine health concerns, that have arisen in recent years. This is an area of public concern, so I am suggesting that on regulations, issues such as labelling and many of the things that remain unresolved, the Government should bring together scientists, government officials, experts and the public and seek a way forward that works.

While I remain gravely concerned, for all the reasons I have set out previously about the Bill and what it could unleash, I think there is a very significant chance that this will go nowhere, both because of the legal tangles and the public resistance. If the Government want to find a constructive way forward, I have set out here a way in which they could co-create a model with the public and the experts. That is my genuinely constructive suggestion, and I beg to move.

[The Deputy Speaker (Baroness Morris of Bolton) (Con)]

My Lords, if Amendment 28 is agreed to, I cannot call Amendments 29 and 30 for reasons of pre-emption.

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, I rise to speak briefly to Amendment 28 in the name of the noble Baroness, Lady Bennett of Manor Castle, who has spoken at length on why she feels it is necessary to delay the implementation of the Bill. The Bill sets in train a considerable step towards precision engineering and a move away from traditional practices. Great care is needed to ensure that all unintended consequences are avoided. The extra protections that the noble Baroness proposes are therefore necessary and I look forward to the Minister’s response and reassurance on this matter.

[Baroness Hayman of Ullock (Lab)]

My Lords, I thank the noble Baroness, Lady Bennett of Manor Castle, for her thorough introduction to her amendment. I completely understand why she is bringing it forward. There are areas of the Bill around implementation, oversight and the step-by-step process that we have discussed time and time again that people are still concerned about. The requirement of the amendment for a report to be published that identifies any gaps in scientific evidence is an interesting one. It will be good to hear the Minister’s thoughts on this.

[Lord Benyon (Con)]

My Lords, I thank the noble Baroness, Lady Bennett, for this amendment. I am keen to have a much wider conversation with people. My learning curve has been incredibly steep as I have gone through this—the noble Baroness, Lady Hayman, is nodding as well. It is an area of science which is not understood by an awful lot of people. While I have sought to bring in as many safeguards as possible, there is a continuing job to do for all sorts of parties, not just the Government, to explain the benefits of this technology and the safeguards that the Government are introducing. However, I do not think that a priority setting partnership should be established in or under this Bill.

The Bill places science at its core. ACRE advised that precision-bred organisms pose no greater risk than traditionally-bred counterparts. As I said earlier, its advice is supported by the Royal Society, the Royal Society of Biology, the Roslin Institute and a wealth of peer-reviewed literature. The Royal Society stated that

“these are no more likely to pose a risk to human health or the environment than non-editing derived mutations, which occur spontaneously in each new generation”.

In earlier debates, I have sought to make it clear that if we inserted regulatory measures or language into the Bill that somehow elevated this technology beyond where it is, we risk misleading the public and we have to be really careful about that.

ACRE’s expertise in precision-breeding technologies is considerable, having first advised on them in 2013. We used this as a basis for our intervention in a pivotal European Court of Justice case in 2018 and for our consultation on genetic technologies in 2021.

The Secretary of State will be required to make decisions based on the advice of expert committees. As part of its current role as adviser on genetically modified organisms, ACRE will also advise the Secretary of State on whether an organism is precision bred. A comprehensive understanding of the underlying science is essential for this process and ACRE members have a wealth of experience in the regulation of genetic technologies. Moreover, this Bill will sit alongside existing legislation that deals with human, animal, and environmental health.

I understand the noble Baroness’s reservations. However, where we have identified evidence is incomplete, we have taken steps to address this. The regulations under the Bill will not come forward until the relevant measures are in place, and Parliament will have the opportunity to further scrutinise them.

19:45

As I have already mentioned, we have commissioned Scotland’s Rural College to gather the evidence required to develop the health and welfare assessment underpinning the animal welfare declaration. The research will involve experts from the Animal Welfare Committee and a wide range of organisations with expertise in animal welfare, genetics and industry practice.

The Advisory Committee on Novel Foods and Processes is providing advice to the Food Standards Agency for the development of a regulatory framework to provide assurances on consumer safety for precision-bred organisms to be used for food and feed. The committee has a long history of providing independent scientific advice to the Food Standards Agency on matters relating to the safety of food products, including GMOs and precision-bred organisms. Furthermore, we have been continuously engaging with national and international stakeholders and regulators to develop the best regulatory regime for precision-bred organisms.

Noble Lords can be certain that Defra will ensure that the provisions of this Bill are effective and reflect scientific progress. We will continue to be aligned with the wider governmental priorities, making farming greener and more productive while helping to grow the economy, create jobs and improve food security. I give the noble Baroness the assurance that I will be open to any suggestions that will provide a forum or fora for a wider conversation with the public. It is the job of agencies of government, such as the FSA, to continue in a vital social science role to inform people about the quality of the food they eat, where it comes from, and what is involved in its production.

I thank the noble Baroness for her detailed consideration of this topic, but I hope I have convinced her that this amendment is not needed. I hope that she is reassured and is able to withdraw it.

[Baroness Bennett of Manor Castle (GP)]

I thank the Minister for his answer. I will certainly look to take up his offer in the final section of his response. I also thank the noble Baronesses, Lady Bakewell of Hardington Mandeville and Lady Hayman of Ullock, for acknowledging the reasons why I brought forward the amendment and the continuing issues around the Bill, that, I think, the Minister also acknowledged to some degree.

I make one comment on the Minister’s reliance on ACRE, which has an extremely narrow scientific focus that lacks the sociological and ecological approaches that would give the Government a much broader view. The noble Lord, Lord Krebs, and I were playing with metaphors around centres of gravity and shifting balance. ACRE reflects one part of the scientific community and views, but not perhaps the more, dare I say, modern and newer forms of biology, which are not represented in its membership.

However, we are where we are, and I feel the next debates pressing in on us. We have had a good debate today. I do not think we have got to where we need to go, but I do not think we are finished on this issue by any means. In the meantime, I beg leave to withdraw my amendment.

Amendment 28 withdrawn.

Amendments 29 and 30 not moved.

Health and Social Care Information Centre (Transfer of Functions, Abolition and Transitional Provisions) Regulations 2023

Wednesday 25th January 2023 Lords Chamber

Motion to Approve

19:49

Moved by

[Lord Markham]

That the draft Regulations laid before the House on 15 December 2022 be approved.

Relevant document: 25th Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument).

[The Parliamentary Under-Secretary of State, Department of Health and Social Care (Lord Markham) (Con)]

My Lords, to make sure that all noble Lords have the right version of this SI, I draw attention to the correction slip amending two points:

“Page 3, regulation 5(3)(a): omit ‘annual’; and Page 22 … paragraph 63(a): ‘…paragraph (b);’ should read ‘…paragraph (a);’.”


These regulations are intended to transfer the statutory functions of the Health and Social Care Information Centre, which operates as NHS Digital, to NHS England, and to abolish NHS Digital. This will create a central authority responsible for all elements of digital technology, data and transformation for the NHS, which was a key recommendation of the review by Laura Wade-Gery into how we can improve the digital transformation of the NHS. The recommendations were accepted by the Government in November 2021; we announced that we would merge NHS Digital into NHS England as soon as legislation allowed.

I know that noble Lords had concerns about this transfer during the passage of the Health and Care Bill last year, which we have sought to address. I will also seek to address the points raised by the report of the Secondary Legislation Scrutiny Committee, which are echoed in the regret amendment tabled by the noble Lord, Lord Hunt.

First, I reassure this House that the transfer will not weaken the existing protections of people’s data and that the protection of data remains a priority for NHS England, which at senior levels takes these new responsibilities very seriously. All statutory functions of NHS Digital relating to the protection of data are being transferred, including the rules and safeguards required by law. This has been a guiding principle. NHS England will be subject to the same rules on collecting and disseminating data as are applied to NHS Digital.

NHS England can establish an information system only when directed by the Secretary of State or in response to a request from another body. All directions and requests that NHS England complies with must be published, so there is full transparency on what is being collected and for what purposes, and a clear upfront control. It cannot exceed the requirements of the direction or request. It must also publish its procedures for receiving and considering requests to establish information systems and for requests to access data. NHS England will report annually on how effectively it has discharged its transferred data functions, seeking independent advice to inform this report and consulting with the National Data Guardian for their views.

Concerns were raised during the passage of the Bill that we would lose the excellent practice that NHS Digital has followed in protecting people’s data and the crucial separation between those responsible for collecting and de-identifying data and those in NHS England analysing it. We therefore committed to place further requirements on NHS England, alongside the transfer of statutory functions, to ensure it would be a safe haven for data via statutory guidance. This is a new requirement.

This statutory guidance sets out measures that we expect NHS England to protect confidential information. There was some disquiet that the guidance did not seem to go far enough and that we had not added new duties to the regulations. This was not considered necessary; this is a straightforward transfer of functions under a legal framework which goes back to 2012 and has stood the test of time. That framework includes duties under the 2012 Act to have regard to various matters such as the need to respect people and promote the privacy of service users.

Additionally, we will issue statutory guidance, and I will come on to its contents in a moment. NHS England must have regard to this guidance; that means that it would have to demonstrate that it had justification for any decision not to follow it. Case law has shown that clear and cogent reasons would be needed to depart from guidance which is subject to a statutory duty to have regard. However, we have added strength here, as there is also a new power of direction, introduced in the Health and Care Act 2022, which could be used in cases of non-compliance with the guidance—namely, in Section 13ZC of the NHS Act 2006. Together, these mechanisms create a strong, binding commitment on NHS England to maintain the highest levels of data protection and safeguards.

NHSE is a long-established public authority which is experienced in processing personal data, including that of patients and employees. It does so in accordance with a robust legal framework which includes UK GPDR and the Data Protection Act. The lawful and proper treatment of personal data by NHS England is extremely important to maintain the confidence of service users and employees, and NHS England is well versed in processing personal data lawfully and correctly. It is aware of the importance of seeking independent advice and will be able to do so where necessary, including on the recommendation of staff transferring from NHS Digital. NHS England will also be able to approach the Information Commissioner’s Office as the independent regulatory body if it needs an independent view on particular matters.

I also reassure noble Lords that this statutory guidance covers all confidential information as defined in Section 263(2) of the 2012 Act. Therefore, it covers all data identifying an individual and all data identifying an individual which is subsequently identified or pseudonymised where an organisation, including NHS England, holds both the de-identified data and other data which would enable reidentification.

The guidance requires NHS England to obtain independent expert advice on its data access processes and procedures and, where appropriate, on individual decisions around data access. This will enable these experts to provide advice and assurance for both external and internal requests for access to data for purposes other than direct care. NHS England will be required to secure this independent advice or have a very good reason for not doing so. It is not optional or a case of doing so only when convenient.

Central to this should be a data advisory group, comprising appropriate experts and lay members, including one or more members with expertise in social care. This last point is not currently spelled out by the draft guidance, which we will amend. It would be appropriate for some internal representation to support this group to add expert knowledge and insight, such as the organisation’s Caldicott Guardian and data protection officer. However, the majority of members should be independent advisers. Minutes of the data advisory group meetings should also be published.

I know that some noble Lords have been concerned that NHS England will receive data which is still identifiable and which NHS Digital would previously have de-identified before sharing. The statutory guidance requires that the organisation will de-identify data before its internal analysis and use—the same role which NHS Digital undertook previously will be done internally, by a team separate from those who need to use the data. It explicitly states that responsibilities and accountabilities for using the data should be organisationally separate from the functions providing assurance and advice on this, such as information governance and Caldicott Guardian functions, to ensure that there are no conflicts of interest.

NHS England must ensure that there is the right governance for considering internal requests to access data, based on the same principles of risk-based assessment as for external requests for data, and drawing on the same independent scrutiny and advice. Furthermore, the Secretary of State will issue a direction in relation to NHS England’s internal use of data, which will be published. This will make clear the legal responsibility for NHS England to de-identify data before analysis, so that an individual cannot be directly identified either from the data to be accessed or analysed from the results of the analysis carried out. The guidance also calls for NHS England to develop a register of internal data uses mirroring that which currently exists for external data uses.

In response to the concerns of the Secondary Legislation Scrutiny Committee, although we are moving at pace, we are doing so because we are keen to see the benefits of creating a single statutory body responsible for data and digital technology for the NHS delivered quickly. The statutory guidance has been neither rushed nor piecemeal in development. The guidance has been in development for a number of months; a version was shared with some noble Lords and stakeholders before Christmas, and we have been discussing it with stakeholders—including the National Data Guardian, the Information Commissioner’s Office, NHS Digital and NHS England—revising it to reflect their comments and strengthening the requirements on internal use of data, which was a predominant concern.

We have now published the second draft, which we have drawn to the attention of noble Lords. This was also shared with the Secondary Legislation Scrutiny Committee and the British Medical Association and other professional organisations, to seek their feedback. I am sorry that we did not share the guidance before with the BMA.

20:00

Since the merger of NHS Digital with NHS England was announced in November 2021, the BMA has not raised any concerns with the department, and, as noble Lords will realise, NHS Digital liaises with the medical profession in relation to specific projects involving data of which it may be the controller.

It is not essential that the guidance is agreed for 1 February, provided it is finalised within a reasonable time following the transfer, as there will be a period while existing arrangements continue while NHS Digital and NHS England integrate. We have some time to make sure we get it right while still aiming to publish the guidance reasonably close to the transfer date. I would note also that we have been discussing the expectations that the statutory guidance will sit with NHS England for some time, to ensure that as far as possible, from day one, the organisation is able to adhere to the guidance, which builds on the good practice of NHS Digital.

I can reassure noble Lords this change will not diminish existing safeguards or standards of governance of patient data. I would also highlight that NHS England, as the body very much responsible for the running of the NHS in England, is used to dealing with sensitive and confidential information, and meeting the highest standards of governance. We will, of course, keep this transition and the statutory guidance under review, and I am happy to commit to making public the findings of our review.

I trust I have provided reassurance that this statutory instrument, with accompanying statutory guidance, keeps in place the many safeguards which ensure people’s data is safe and makes new statutory requirements. I commend these regulations to the House.

Amendment to the Motion

Moved by

[Lord Hunt of Kings Heath]

At end insert “but that this House regrets that (1) the consultation on the statutory guidance that will direct NHS England’s handling of the medical data under these Regulations is being conducted in a rushed and piecemeal manner, and (2) the results of that consultation are not available alongside the Regulations to reassure the House that patient data will be used properly”

[Lord Hunt of Kings Heath (Lab)]

My Lords, let me say at once that I support the digital transformation of the NHS and the use of information to enhance patient outcomes. I want to see the NHS move faster in a digital world, but it is essential that there are safeguards in place to protect the integrity and confidentiality of patient data. I say that as I look back into the history of NHS data, where we confronted a number of occasions when this did not happen. That is why this is such an important debate. I am grateful to the Minister for the assurances he has already given in his opening speech, and through him I thank his officials for the way in which they have been prepared to engage with us over the past few months, which has been very helpful.

I remain of the view that it was a mistake to bring NHS Digital, or the Health and Social Care Information Centre as it was formerly known, into NHS England, and feel that there are some inevitable tensions and conflicts in so doing. I think the review that led to this overlooked the issue of the integrity of patient information and public confidence when it suggested that the two functions should be brought together. That was legislated for; here we are now, examining some of the details.

The noble Lord has already referred to the Select Committee’s disappointment about the way in which it considered this had been done in a rushed and piecemeal manner. I have no doubt the House will want to take account of the Minister’s response. It is a pity that the full statutory guidance is not available as we debate these regulations. I think, as a matter of principle, it would have been much more sensible if that had occurred.

The core issue is that in the passage of the Bill, and a number of noble Lords who are here took part in that debate, the Government gave assurances that governance arrangements would protect NHS England from marking its own homework, with independent oversight of governance decisions under the new arrangements. The noble Lord, Lord Kamall, the then Minister, said that

“I can assure your Lordships that the proposed transfer of functions from NHS Digital to NHS England would not in any way weaken the safeguards. Indeed, when I spoke to the person responsible in the department, who the noble Lords met, he was very clear that in fact we want to strengthen the safeguards and take them further.”—[Official Report, 5/4/22; cols. 2005-06.]

Having said that, when one comes to look at the arrangements, there are still some questions and doubts that we would like to put forward tonight. I pay tribute to medConfidential, which has raised questions on how some types of data will be handled under the new regime and whether, in pursuit of efficiencies, NHS England’s handling of the data will be less transparent and subject to fewer checks and balances. I think that expresses the issue and the potential tension in a nutshell.

This was reinforced by the comments of the National Data Guardian, to whom I pay tribute for her strong involvement in these matters. In December, Dr Nicola Byrne expressed concern that, in the statutory instrument before us, there is no recognition of the need to have independent oversight. She noted that provisions to obtain independent advice from specialists and experts to advise on and scrutinise NHS England’s exercise of its data functions, which were originally included in a previous draft of the SI, had been removed. She reminded the Government that the commitments to putting the current, non-statutory provisions safeguards regarding oversight into regulations had been made by officials to the House of Commons Science and Technology Committee. I understand from the briefing we received last night that the advice received by the Minister’s officials was that it is not possible, due to the nature of the statutory instrument and the original primary legislation. It is, though, a pity.

In relation to the membership of the Data Advisory Group, the National Data Guardian referred to the arguments put forward by the department for having NHS England representatives on the group present in their capacity as senior individuals with responsibility for data access. I think they are not full members, but they will be present. The department’s argument is that that will support more efficient discussions regarding applications for data access. I can see that, clearly, officials may need to make presentations. I think it is a bit of grey area when they are members, albeit not full members, of the actual group. The National Data Guardian reiterated that moving from a completely independent group to a hybrid model could affect public trust, particularly when advice is given and decisions are made on the internal uses of data.

We need to be clear why NHS Digital had an entirely independent oversight group. It was for very good reasons; it was put in place following the 2014 Partridge review which was conducted due to concerns about the way that patient data had been shared with insurance companies. There was a huge furore at the time. It was interesting that one of the resulting proposals after Partridge was the disbanding of an oversight group which involved staff members for a new independent oversight group. A public consultation in 2015 found support for this change. This is now being reversed. My fear is that something may go wrong with patient data and the department will come back and say, “Actually, we should make this an independent function”.

We have dealt with the issue of timing, and tonight the Minister has given an assurance that the outcome of the internal review into how well the transfer has gone will be made public—that will be very welcome. I will go just one step further and say that I hope the Minister may be prepared to brief parliamentarians on this at the same time.

The noble Lord also answered a question about social care that was asked in our briefing. I think he said there would be a person from a social care field on the group, which is definitely welcome. I suggest that discussions take place with the Local Government Association and the Association of Directors of Adult Social Services to make sure that they are fully involved and supportive of this happening.

So I remain of the view, as I have made clear, that it has been a mistake to bring NHS Digital into the NHS executive. Whatever the structure, one has to build in rigorous safeguards. The key here is the integrity and confidentiality of patient data. It is pretty clear that if the NHS is to be at all sustainable, it has to embrace the digital revolution and it has a long way to go. So I am right behind the Minister in what I know he is personally seeking to do. It is just that if anything that goes wrong with patient confidentiality, the whole thing can fall down. That is why this is so important. I very much look to the noble Lord and NHS England officials to ensure that we recognise that the integrity of personal patient information is important. I beg to move.

[Baroness Brinton (LD)]

My Lords, I echo the thanks of the noble Lord, Lord Hunt of Kings Heath, for the helpful and detailed discussions that the Minister, his predecessors and officials have had with the small group of us who have been worried about this issue, even before the Health and Care Bill started its passage through your Lordships’ House. Although some of us were more expert than others, and I was definitely not one of the expert members of the group, I care greatly about the digital revolution and ensuring that patient data is kept confidential.

The noble Lord, Lord Hunt, said that he supports improving and transforming data in the NHS. That cannot come soon enough. I have said before in this House, and it is still true probably a decade on from when I first said it here, that for my monthly blood tests I have to print out, photocopy and send copies to my hospital consultant because the hospital that I go to and the hospital that processes my blood tests do not use the same data system. That is ridiculous. It needs to change.

It is a real problem, as the noble Lord, Lord Hunt, set out, that the consultation and draft statutory guidance have been rushed through. I want to set that in the same context as that to which he referred, about perhaps going at a slightly slower pace while wanting the revolution to start. That might have been helpful. Omitting organisations such as the BMA from seeing the original statutory guidance raises the question: who else has not seen it? The question is almost impossible to answer. However, the detail of how this is going to work in practice inside the NHS will be the business of all clinical and administrative staff at all levels. It is vital that it works.

The Minister will know that I have repeatedly raised concerns about patient data and how people were not consulted in the two previous patient data and care.data communications. Both had to be held back because there has been outrage from the public that they were not given the chance to understand how their data would be used. Earlier this week, the Mirror reported that Matt Hancock had talked about handing over private patient medical records and the Covid test results of millions of UK residents to US data company Palantir fairly early on in the pandemic. It had offered to hold its data in its Foundry system, clean it and send it back to the NHS. I spoke about this in the Procurement Bill because I am concerned about how data can be kept truly confidential. Regarding the GP data for planning and research, the NHS has already published its federated data platform details, which is called by the Mirror the Palantir procurement prospectus. Perhaps I may ask the Minister, as an example of transparency for the new NHS England digital processes set out, whether organisations such as Palantir that are handling data records will absolutely not be permitted to use that data—even anonymised or deidentified—outside the purposes of the NHS, other than for agreed research being used in what my noble friend Lord Clement-Jones would say, if he were able to be in his place today, was a safe haven, thereby ensuring that that patient data remains completely confidential. The Minister knows, because I have said it before, that the problem is that in the past it has been possible to identify patient data when it was pseudonymised. I want confirmation that deidentifying really means that individuals cannot be tracked down and, most importantly, that the data will not be used elsewhere or sold on.

20:15

I thank the Minister for his assurance so far that no patient’s data will be held and passed on beyond the NHS, but I am not sure that I have clarity about the new federated data platform. I echo the concerns of the noble Lord, Lord Hunt, about the loss of NHS Digital’s separate oversight group. That has worked well. I hear from our private discussions and from what the noble Lord said at the Dispatch Box that a mechanism is in place with an oversight committee, but it is still within NHS England. Can the Minister confirm that the first annual report that comes to your Lordships’ House will address how well this is working in practice? We need specifically to look at this issue because all noble Lords who have been involved in discussions with officials have raised this point.

I am grateful for the Minister’s speech at the Dispatch Box and it is good to hear that there will be no mission creep, and that it has to be the Secretary of State who will agree or not agree to instruct NHS England should there be any change to the data being collected.

Finally, I return to the timing and the speed. This feels very much like a rerun of the closure of Public Health England and the creation of the UKHSA when a Covid surge was still going on; officials in the department and NHS staff were working at full tilt and had to change the way in which they worked in order to cope with the UKHSA as a new body. Can the Minister reassure us that that will not be the same when NHS Digital moves into NHS England? My fear is that the pressure on the NHS at the moment means that the situation could be similar to the pressure that the UKHSA has faced over the past year in trying to create a new organisation and new structures at a time of immense pressure.

[Baroness Finlay of Llandaff (CB)]

My Lords, I am grateful to the noble Lord, Lord Hunt of Kings Heath, for having put this amendment before us. I am not going to repeat the important points made by other noble Lords who have spoken but I have a few questions for the Minister. I should declare that I am a member of the BMA’s ethics committee and I am slightly concerned—if I heard the Minister right—that there has not been a comment back from the BMA, because there have been concerns about the potential monetisation of NHS data.

There were a lot of discussions within NHS Digital at the time of the passage of the legislation about pharma companies possibly having early access to some data and negotiating discounted prices as a result, particularly for expensive medication and early access. Can the Minister tell us how much discount has been achieved by some of those arrangements, whether those discounts have applied across the whole United Kingdom or whether they have been only of specific benefit within NHS England? As health is a devolved issue, we now have a problem particularly between Wales and England, where there is effectively a porous health border and many people are going from Wales to England for parts of their treatment cycles. That means that data moves across the border. So my next question is: what has happened in discussions with NHS Wales and what is being done to ensure compatibility for data transfer?

My next question relates to our experience last year when an NHS trust had its systems hacked and the whole system went down. How will the security of the new, larger holding of data be ensured? Obviously, if you have a lot of data held together, there are benefits but also risks. How are those risks being looked for and, as much as possible, mitigated against?

The other issue, again in relation to Wales, is somewhat historical but I have not been able to track down exactly what happened to some data. The Health and Social Care Information Centre merged with Connecting for Health in the 2012 Act. At that time, the data side was a UK-wide database. I wonder what happened to the data that was being held for Wales; whether NHS Digital still holds any data relevant to Wales; what discussions have been had with Wales over the transfer of relevant data; and what arrangements are being made for the future transfer of patient data—again, to allow the transfer of data while, importantly, preserving patient confidentiality. Of course, one of the problems when data is transferred between organisations is that there is a potential risk in terms of confidentiality and a possible leak.

My last question for the Minister is quite simple: why were these regulations not laid earlier? As I understand it, the processes are now well under way—indeed, they are almost complete in terms of the staff, the merger and so on. It would have been helpful for everyone to have been able to have sight of these regulations, as well as all the supporting documentation, earlier.

[Lord Allan of Hallam (LD)]

My Lords, I am grateful to the noble Lord, Lord Hunt, for ensuring that we have an opportunity to debate this statutory instrument. I am also grateful to the Minister for both his initial response to the amendment and the time that he and his officials have spent responding to queries from me and my noble friends Lady Brinton and Lord Clement-Jones.

I revealed in yesterday’s debate how I started my tech career in the Avon Family Health Services Authority. From there, I moved to the FHS Computer Unit and worked on national NHS IT, so this reorganisation has a special interest for me. The subsequent path of the system that I worked with, which was called the Exeter system because the developer hub was in Exeter, is illustrative of the constant reorganisation of NHS IT, of which the latest example is in front of us today; I note in passing that early versions of the Exeter system were written in a language called MUMPS, like the disease but in capital letters, proving that geeks do have a sense of humour. The FHSCU was incorporated into something called the NHS Information Authority, which was then split between the National Programme for IT—NPfIT—and the Health and Social Care Information Centre. NPfIT was later rebadged as Connecting for Health, while the Health and Social Care Information Centre found its way, via a couple more name changes, into NHS Digital; this was referred to by the noble Baroness, Lady Finlay of Llandaff.

It can feel like the architects of these reorganisations have drawn inspiration from peristalsis, the process that moves food through the body by contracting and expanding the gut. The belief seems to be that we can make progress with NHS IT by pulling everything to the centre then pushing it out again to the edges in a cycle of rinse and repeat. I fully expect us to be back here in a few years’ time being told that we have lost focus by pulling everything into NHS England and that we need to create some kind of new stand-alone agency. We might call that new body the Unified Trust Operational Process Information Agency, or UTOPIA for short—there is some free branding advice for the Government.

The serious point here is that, in spite of—or perhaps because of—these reorganisations, the NHS still has information systems that fall well short of what is possible and desirable. There are many excellent people who work in NHS IT, and there are examples of great systems being developed, but we cannot say that there is consistent excellence, which is what the service needs and deserves, as noble Lords have said. I sincerely hope that we might get it right in the public interest this time, but experience suggests that we should remain cautious and test thoroughly what we are being offered.

An early test for this new structure will be the mega contract that has just been opened up for bids to provide a federated data platform, to which my noble friend Lady Brinton referred and which looks like it will cost the taxpayer at least £500 million; that is the number on the face of the contract, and God knows what else will need be spent by trusts on ancillary services. We will be asking searching questions of the Minister at all stages of the development of this project, as some elements are already triggering the spidey-sense of those of us who have seen too many big NHS IT projects go south—by which I do not mean going to Exeter but further than that.

As well as the structural questions about whether this reorganisation will achieve its core purpose of improving IT support for health and social care, there are concerns about what it will mean for the treatment of personal data. The noble Lord, Lord Hunt, and my noble friend Lady Brinton have done a thorough job in describing those concerns so I will not repeat their arguments in detail. However, I want to reinforce their emphasis on the importance of independent oversight. I have worked in technology organisations and have huge admiration for the way in which software engineers, researchers and data scientists tackle problems using data, but their deep focus on addressing problems is not always accompanied by the same level of interest in documenting and getting approvals for all of their uses of data. This is not usually because they are doing anything wrong but because they are in a hurry to explore a task that we have given them. Given this tendency, it is essential that we put in place good governance systems that do not get in the way of necessary uses of data but ensure both that these are properly considered and that any risks are surfaced and mitigated.

As other noble Lords have argued, the IGARD system, which worked for NHS Digital, has broad support. We need something equivalent in this new structure. I ask for the Minister also to consider additional forms of transparency that will help people have confidence that data is being used appropriately. The overriding principle here is that you do not want people to feel surprised that particular kinds of data are being collected or used for particular purposes. A healthy discipline that will help avoid surprises is to ensure that the data schema and software code are made public, as this allows third parties to see for themselves what is going on inside the black box. This is not about publishing all the data held in the databases, which needs to be managed separately; it is about showing the kinds of data that sit in different systems and informing us what the systems are doing with them.

There is a common trope that Governments like to trot out to reassure the public and show that something is safe: putting in place a triple lock. This is part of the Government’s rhetoric around the Online Safety Bill, for example. I invite the Minister tonight to commit to a quadruple lock in this case, given the importance and sensitivity of health and social care data. Lock 1 is the commitment to meeting fully all the data protection standards that are already in place for NHS Digital and in the general data protection regulation. Lock 2 is to ensure there is a truly independent body assessing and authorising requests to use data. Lock 3 is the publication of data schema so that we can see the full extent of what is being held, and where. Lock 4 is the publication of code that will allow people to check that what was authorised is what has actually happened.

I hope that this reorganisation will both lead to positive technology outcomes and avoid negative data outcomes. The NHS needs success in these areas more than ever. I also hope that the Minister will agree that our scepticism on these Benches is healthy and makes it more, not less, likely that we will see those outcomes. Onward to UTOPIA.

[Baroness Merron (Lab)]

My Lords, I thank the Minister for introducing these regulations and for the assurances he has given your Lordships’ House. I also express my appreciation to my noble friend Lord Hunt for what, as other noble Lords have said, was an extremely detailed and helpful examination of the challenges that these regulations present. I hope that the Minister will take his amendment and this debate in the spirit which I know is intended.

I share the view of all noble Lords who have spoken this evening that digital transformation of the NHS is a good thing; on that we are agreed. We all support the use of information to make things better for patients. However, this is about getting it right, and I hope that the debate this evening has contributed greatly to that. It is about confidence. As the noble Lord, Lord Allan, just said, people should not be surprised. They should also not find themselves compromised, uncertain or in any way undermined by the use or misuse of data. That is the challenge before us.

20:30

As the noble Lord acknowledged, during the passage of the Health and Social Care Act 2022 there was concern that, in bringing NHS data and delivery functions together, some of the existing safeguards might be somewhat threatened. As other noble Lords have said clearly to the Minister, I say as clearly as possible that, while the department plans to make the transfer on 1 February—a mere few days away—essential statutory guidance is not yet available except in draft form and the latest version was made available only a few days ago. As the noble Baroness, Lady Brinton, rightly said, it would have been extremely wise to have included all the necessary stakeholders in preparing that draft guidance. I hope that the Minister has sensed the will to get this right, not just in the Chamber but outside it. It is extremely disappointing that this does not appear to have been followed through.

In the Government’s own Explanatory Notes about these regulations, there is recognition that

“leadership of digital transformation has been disjointed”,

and that

“the fragmentation of national bodies… made it hard to achieve”

an integrated and accessible digital health system. I am sure that this view was informed by the Laura Wade-Gery review, which was published in 2021. The Government set out their stall, but there was a responsibility on them to ensure that this could be seen through.

The department says that NHS Digital staff and assets will transfer to NHS England before going through the wider change programme to create a new NHS England, and that this will ensure that the necessary talent and expertise of NHS Digital is maintained. How long does the Minister anticipate that the change programme will take? Can he give assurances that talent and expertise will be retained?

New duties on NHS England will include a requirement for the body to report on how effectively it discharges its relevant data functions, as well as there being a new duty on the Secretary of State to issue guidance to NHS England about the exercise of those functions. When is that guidance likely to be published and what expertise has been drawn on to generate it? Can the Minister assure noble Lords that the acceleration of the merger—originally planned for April 2023 but brought forward—will not adversely affect IT continuity or staff preparedness? Can he outline what level of communication current NHS Digital staff have received about the merger and whether this process has been impacted by the acceleration?

A whole range of very searching and helpful questions have been put to the Minister, so I will not repeat them but endorse them; they get to the heart of what we are talking about here. However, there are a few points that I want to pick up on, with one or two new questions. We have talked about whether NHS England is marking its own homework. I was somewhat perplexed by the comments of the department, which told the Secondary Legislation Scrutiny Committee that it believes that previous ministerial commitments to the House are being met, including saying that NHS England is not marking its own homework because the chief delivery officer will oversee the NHS England transformation directorate. I hope that the Minister can help me to make sense of why that is not marking one’s own homework.

I have a few further questions about the National Data Guardian’s views on the changes made by these regulations and how the department has responded. Approvals for data use are currently reviewed by the independent group advising on the release of data, which the Minister’s predecessor rightly lauded for the detail that it makes available, as a demonstration of the integrity of the process. Integrity is so important. Will all advice-giving meetings continue to have published minutes, as they do now? Can the Minister confirmed that this independent group will advise on all data projects?

Several noble Lords referred to NHS England’s federated data platform. Perhaps the Minister can help me here. The tender says that the first instance will cost, as we know, half a billion pounds—that is for the first and largest of the four parts. However, the 42 ICSs and potentially every trust and GP will need some compatible environment to use the tools that NHS England is procuring. Is this model incentivising every ICS and trust to buy its own installation of the national platforms so that it can use tools from the marketplace under its own governance and control without being managed nationally, or is a different approach being taken?

I have one last question: after the regulation moves the powers to NHS England, will the new arrangements allow a patient to log into the NHS app and see whether data about them has been accessed? There are, as I am sure the Minister has heard, many questions. I hope that he and his team will take them in the spirit in which they are intended, because this debate and the contributions today are all about getting it right for the NHS and for patients.

[Lord Markham (Con)]

I thank noble Lords for their contributions and agree that we are all trying to achieve the same thing: to ensure the digital benefits come from this system and maybe—who knows?—create a UTOPIA, but also, vitally, maintain confidence. I take all these comments in the helpful spirit in which they are intended, and I hope that noble Lords will like my replies. At the same time, anything that I do not properly cover now—I suspect there will be some things I am not able to cover—I will, as ever, follow up on in detail in writing. Such is the importance of this that I am happy to meet again as well. The various meetings that we have had have been very productive, so I will make sure that those written answers come out quickly. I invite noble Lords to please come back if they feel there are some bits that still need further clarification. I will definitely set that up quickly and ensure that the officials are there as well. I have had various bits of feedback from the officials—I have tried to be engaged all the way through this. As the noble Baroness, Lady Merron, said, we have tried to get this right. I accept that we have not always done it perfectly, but I hope noble Lords can see that the good will is there.

On the specific questions asked by the noble Lord, Lord Hunt, I agree not only to publish the review but, happily, to brief Parliament on that. On the idea of including the LGA in the composition, I am very happy to do that. Regarding the points made by the noble Baroness, Lady Brinton, on the ability to use Palantir outside of the agreed research, the intent is absolutely that it can be used only for the agreed purposes and it cannot be used or sold elsewhere without suitable agreement. Again, the annual report will address how well it is working in practice.

I hope that the merger will not be like the PHE closure. I think they have been working on the new timing, in terms of February, since October, when it was announced, and have been working with the staff on that timing. I know that the plans that I have seen have taken into account the ability or need to retain people, which is obviously crucial to this, as we know that you need additional skills in this space and the importance of retaining them.

On the questions asked by the noble Baroness, Lady Finlay, my understanding regarding Wales—and I will make sure that this is followed up properly in writing—is that it has consented to the transfer arrangements in this. Generally, NHS England will continue to play the same role it has currently; that has been agreed. I entirely take and accept her point about the hacking risk, that the more attractive you make the data pool, for want of a better word, obviously the more essential it is to make sure that security and protections are in place.

As ever, I enjoyed the points made by the noble Lord, Lord Allan. He was talking about UTOPIA. He mentioned the geeks, and I am sure he is aware that that word came out of the Second World War, when they were looking for general engineering and electrical knowledge in their recruitment of soldiers, so that is one for him. Going forward, those extra forms of transparency and the quadruple lock all sound very sensible to me. I had a quick note from my team, saying that they also thought that it sounded sensible. Again, I think that we will probably need to put some detail around that, but I thank the noble Lord for those suggestions. Let us try to make sure that we work with those.

I absolutely take all the points made by the noble Baroness, Lady Merron, again, in the spirit in which they are intended. I do not think that I have a good answer to the “marking their own homework” point, to be fair. I hope that the noble Baroness knows me well enough to know that I will never try to argue that black is white from where we are. I think that is, quite rightly, the concern that all noble Lords have raised tonight, and it is obviously these protections, such as the quadruple lock and the other things that we need to put in place, that we need to make sure are there.

On the kind of things mentioned, the advice and the minutes from the meetings and the advice given by the independent groups—absolutely. I spent a bit of time today on how we would involve the ICSs, and my understanding—again, I freely admit my understanding is probably at GCSE level right now, so I need to do a bit more work on this—is that a lot of this is around the data standards that the ICSs are starting to deploy to make sure that the formatting of the data is correct so that everything can be kept in this common data warehouse. That is something that they are working on already, in terms of establishing those standards. A number of trusts have worked towards that, accepting that it cannot be completely finalised until we know who is going to win the tender for it.

20:45

I have tried to answer most of the concerns. I will follow up in detail by writing. If we feel that there is anything that is still not secure enough, I am very happy to call a meeting so that we can go through it all. I thank noble Lords for their comments and for the spirit of the debate tonight. I again thank the noble Lord, Lord Hunt, for ensuring that we managed to cover those points, because we can all see the benefits of a common platform and the digital ability—the ability not to have to print out and fax or email your results—that could come. My letter bag is very full of loads of those sorts of cases, so we can all see the benefits, but at the same time maintaining public confidence is key. There is nothing that can ensure that a great utopian opportunity is a defeat snatched from the jaws of victory if the public do not have confidence in it. With that, I commend the Motion to the House.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I am very grateful to the Minister and other noble Lords who have spoken in this debate. I should say that I am particularly grateful to the noble Baroness, Lady Brinton, as she and I have been working on this for quite some time, along with the noble Lord, Lord Clement-Jones, who unfortunately could not be here tonight.

I very much take the substantive point. If you look at care.data, essentially the people running it were very careless in terms of the confidentiality of patient information. That set back the whole programme for a number of years, and that is the lesson that we need to remember. The noble Baroness, Lady Finlay, raised some very important points, including about Wales, on which the Minister has responded in terms of the agreement that has been reached with the Welsh Assembly Government, but her point about the security of local NHS data is very relevant to the way we are going forward.

On the issue of commercial companies, 20 years ago, I took through the legislation to allow the NHS or the Department of Health to agree with commercial companies a very legitimate use of patient information. We had in mind the research institutes and pharmaceutical companies, because we have such a rich information source in the NHS, and we wanted to do that to encourage new medicines and speed up their introduction to NHS patients. The problem is that as it has proceeded there has been a lack of transparency, and this wretched commercial incompetence has undermined confidence in what is happening. It is perfectly legitimate to seek to use this information, provided patient confidentiality is preserved, for the enhancement of our knowledge and understanding and future treatments. Clearly that is in everyone’s best interests.

On UTOPIA, mentioned by the noble Lord, Lord Allan, I could not help thinking of “Utopia, Limited”, the Gilbert and Sullivan opera. The alternative title is “The Flowers of Progress”. He went through the list: Avon FHSA, the Exeter system, NHS AI Lab, Connecting for Health. Such happy memories. The point that he raises is that the NHS and the Department of Health have a constant need and desire to restructure. We know this is displacement activity. Even now one hears that NHS England wants to reduce the number of regions and you think, “For goodness’ sake! Can you not understand that it’s completely hopeless thinking a restructure will have any impact whatever on the task in hand?”

This is the substantive point: we know that we are going to be back here debating an SI at some point which will take NHS Digital out of NHS England and establish a separate body. No one will take a bet on it, because we know it is going to happen, and I am afraid that this instability really detracts from the core purpose of what we are seeking to do. My noble friend Lady Merron raised some very pertinent points about the information, the lack of final guidance, the impact on staff and the big question about patients knowing whether their information is being used, which I believe from the advice I have received is possible. I hope that, as the work gets taken forward, this will be taken very seriously by NHS England. The Government will find that patients will have much greater confidence if they get that information, and that most of us will be absolutely supportive of why that information has been used.

Finally, I thank the Minister for his constructive response and the parliamentary briefing that he has offered on the 12-month review; I also think the information about Wales has been very helpful indeed. Having said that, we wish him and his officials the very best in taking this work forward, and I beg leave to withdraw my amendment.

Amendment to the Motion withdrawn.

Motion agreed.

Environmental Targets (Biodiversity) (England) Regulations 2022

Wednesday 25th January 2023 Lords Chamber

Motion to Approve

20:51

Moved by

[Lord Harlech]

That the draft Regulations laid before the House on 19 December 2022 be approved.

Relevant document: 25th Report by the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument).

[Lord Harlech (Con)]

My Lords, I declare my farming and land management interests—some of that land is SSSI, as I have set out in the register.

Biodiversity globally is in decline, and in England species abundance has fallen by 52% since 1970. According to the State of Nature partnership’s 2019 report, 13% of species assessed in England are threatened with extinction within Great Britain. We know we need to take determined action to ensure that we halt the decline of nature and leave the environment in a better state than we found it.

I am grateful to the noble Baroness, Lady Young of Old Scone, whose amendment gave rise to this debate. It raises concern about the lack of a statutory target on improving the condition of terrestrial and freshwater protected sites; we feel that this is already addressed through our species abundance targets. The species abundance targets to halt decline by 2030 and then reverse that decline by 2042 are ambitious, world-leading targets which will drive wide-ranging actions to deliver nature recovery, including action on protected sites which are vital wildlife havens.

There may be other biodiversity targets that warrant consideration; however, we chose species abundance as a good proxy for the health of the wider ecosystem. Our indicator to track progress includes over 1,000 representative species for which we have robust data; between them, these species depend on the majority of habitats found in England.

The noble Baroness is right that many of our protected sites are in a poor condition and are subject to many pressures and threats, including climate change and water and air pollution. But we are committed to addressing this challenge. Our 25-year environment plan set the goal to restore 75% of our 1 million hectares of terrestrial and freshwater protected sites to favourable condition. We have a robust programme of work in place, led by Natural England, which includes providing £2.9 million per year to assess all protected sites, implementing protected-site strategies, introducing the Environment Act 2021, and rolling out the new ELM schemes which will provide the bulk of the funding needed. These regulations implement the requirements of the Environment Act to set a target that will halt the decline in species abundance by 2030, and have at least one additional long-term target relating to biodiversity.

There is no single way to measure the health of our biodiversity, so we have proposed a number of targets that address the status of species and habitats. Our three-pillar approach to restoring and improving our biodiversity involves: first, restoring and creating habitat that is bigger, better and more joined up; secondly, tackling pressures on species and their habitats, such as addressing pollution and improving water quality; and, thirdly, taking further targeted action for specific threatened species. The regulations therefore set targets for species abundance, species extinction risk, and habitat restoration and creation. Taken together, our actions to meet these targets will result in the broad improvement in the state of nature that is needed. Our overall suite of Environment Act targets, including those on water and air quality, will put nature at the centre of all government policy-making for generations to come.

I turn to the details of the instrument. It sets out our target to halt the decline in species abundance by 2030 and then reverse that decline by 2042. We have changed that target in response to public consultation and feedback from the OEP. We recognise concerns that the target as previously phrased could have allowed for nature to be in worse condition than it is today, which was not our intent. The instrument therefore requires the Government to ensure that, by 2042, species abundance is greater than it was in 2022 and at least 10% greater than it was in 2030. Species abundance is a good proxy for the health of the wider ecosystem. The indicator that will be used to track progress includes over 1,000 representative species for which we have robust data. These species are listed in a schedule to the instrument and include the water vole, the marsh fritillary and the red-tailed bumble bee.

We know that action to achieve the species abundance targets will require the restoration and creation of wider habitats and ecosystems. We also know that we need that habitat to be bigger, in better condition and more joined up, which is why through this instrument we are setting a target to require the Government to restore or create in excess of 500,000 hectares of a range of wildlife-rich habitat outside of existing protected sites by 2042. We have defined wildlife-rich habitats as those priority habitats set out under the Natural Environment and Rural Communities Act 2006, as well as those habitats listed in a schedule to this instrument. We will measure progress towards that target by compiling a record of actions that have been or are being undertaken to restore or create wildlife-rich habitat.

As well as taking action for widespread species, we need to prevent the loss of our rarest or fastest-declining species. We also need to make sure that those which are currently at a lesser risk of extinction do not further decline. That requires bespoke actions, as some of our most threatened species will not be reached solely by the broad-stroke approaches that are central to achieving the species abundance targets. The instrument requires the Government to reduce the risk of species extinction by 2042 compared to 2022, as measured by the red list index for England. That index includes data covering over 8,000 taxa, including hedgehogs and red squirrels.

I emphasise that the measures in the regulations are crucial for us to halt and reverse the decline in nature. I hope that all noble Lords will support these measures and their objectives. We will be setting out our approach to meeting the targets in our revised environment improvement plan, which will be published by 31 January 2023. I beg to move.

Amendment to the Motion

Moved by

[Baroness Young of Old Scone]

At end insert “but that this House regrets that the Regulations fail to set a target for terrestrial protected sites condition; notes that this contrasts with the Environmental Targets (Marine Protected Areas) Regulations 2022 target for Marine Protected Areas condition; notes that around 40 per cent of England’s terrestrial protected sites remain in unfavourable condition and this has not changed significantly since publication of the 25 Year Environment Plan target to reach 75 per cent in favourable condition; further notes that the United Kingdom committed in December 2022 to a new Global Biodiversity Framework including the target to ensure that by 2030 at least 30 per cent of the overall terrestrial and marine areas are effectively conserved and managed and to report periodically on that target; and therefore calls on His Majesty’s Government to bring forward a new target which addresses the condition of terrestrial protected areas in England”.

[Baroness Young of Old Scone (Lab)]

My Lords, I declare my interest as chair of the Woodland Trust and president and vice-president of a range of conservation organisations as listed in the register. When I tabled this regret amendment, I did not realise I would be scheduled in the death slot at the end of the day, and I apologise to the Minister for keeping him up.

I thank the Minister for laying out these regulations. I feel a sense of déjà vu with some of them because the history of creating targets for biodiversity is a rather chequered one. I hope the House will forgive me if I dwell on some of the history. When I first came into the environment movement 30 years ago, I was told very firmly that to save biodiversity we had to pay attention to three things: first, the abundance of individual species and the extent of their distribution; secondly, habitat creation in the wider countryside; and thirdly, very definitely, a network of protected special sites and the condition of those sites. We have got some way in these targets towards the first two, and I will comment briefly on them, but I am afraid we have nothing on the third. The targets put forward by the Government fail to tackle all these three issues, and they need to be put together.

21:00

The targets were roundly booed by between 92% and 99% of all the respondents to the consultation, when they were asked whether they would be a good measure of biodiversity changes and on the grounds that they lacked ambition. The UK, as the Minister has already said, is one of the world’s most nature-depleted countries. We are at the bottom of the league table among G7 countries, as measured by the Biodiversity Intactness Index. We have a bit of a car crash on our hands and a big turnaround needs to be delivered, and we need effective targets to drive progress.

The first requirement I had dinned into me 30 years ago was about species, but the species extinction risk target to reduce the risk by 2042 compared with 2022 is a bit limp. It has been said, although the Government have denied it, that this could be met by simply improving the status of one species from critically endangered to endangered, which does not sound like 20 years’ worth of achievement to me; perhaps the Minister could say whether it does to him. Can he reassure the House that there is a commitment to a statistically significant or even a major reduction in extinction risk, not just any reduction however minor, which the current wording might encourage people to believe? Some 13% of species in England are threatened by extinction, and many of the rest are in serious decline. They are on the brink and must be brought back from it urgently. The importance of toughening up this target has been thrown into sharp focus by the recently agreed COP 15 global goals that agree that, by 2050, extinction rates and risk of all species will be reduced tenfold. That sounds more like it in my book. We signed up to this COP 15 agreement—indeed, we did a lot to lead it—only a month ago. The ink is barely dry on the agreement, yet the Government are putting forward an England target for 2042 that would not enable us to be on track to meet that global agreement for 2050. We are going to look very foolish to other countries, especially the ones we cajoled to sign up. Can the Minister say how he is going to resolve this, and make sure our international reputation is not in tatters?

On the second point—increased habitats in the wider countryside—the target proposed by the Government is for the restoration or creation of in excess of 500,000 hectares of wildlife-rich habitat by 2042, as the Minister said. However, that is a lot less than the target of three-quarters of a million hectares that was supported by a large majority of experts and the public during the consultation period. It is also not a very good metric. A better one, which would cover quantity, quality and connectivity of habitats, is under development by Defra following the 25-year environment plan, but it is more than five years since the plan was published. Can the Minister promise that this more satisfactory indicator that is still under development will be finalised very shortly, not in 2024 as is promised? Will he commit to using the metric to set a better binding target for habitats as soon as it is available?

The biggest flaw in the biodiversity targets that we are considering tonight is the complete absence of the third thing I was told was important 30 years ago. There is no target at all for the condition of terrestrial protected sites—sites of special scientific interest. SSSIs, as has been said many times before, are the jewels in the crown of our wildlife resources. They are designated for the importance of the species they support. They are the bedrock of our biodiversity conservation and will be vital for reversing declines in the abundance or even the survival of many species. Overreliance on the abundance target underplays the value of habitat restoration, the primary place for which, at first, is in the protected sites.

Over the past 30 years, mostly as a result of the EU birds and habitats directive, we have not seen SSSIs completely trashed to a great extent any more; it has become comparatively uncommon and is mostly done by government-financed infrastructure schemes—but we will put that aside for the moment. But many SSSIs are in pretty poor condition, impacted by a lack of management, inappropriate land use and modern agriculture. The percentage of SSSIs in favourable condition has remained steadfastly below 40% for many years.

For a brief period in the 1990s and early 2000s—when, by sheer chance, I happened to be chairman of English Nature, the predecessor of Natural England—there was a glimmer of progress, which was not led by me but finagled by Defra and English Nature’s great staff. In 2000, Defra’s public service agreement for SSSIs was set at 95% of them being in favourable condition by 2010—that was ambition. That was a real target. Defra and English Nature had a six-year rolling programme that was well thought through and resourced to make this happen. By 2003, 58% of SSSIs were in favourable condition, and, the following year, 62% were—real sustained improvement was possible. But, alas, as the years went past, resources were cut, the focus moved away and SSSIs declined in quality from then until now. More recently, in the 25-year environment plan, government committed to 75% of SSSIs being in favourable condition—so we are still not as good 95%, but 75% might just pass. But the improvements necessary to deliver that have not been driven, and the long-term targets that we are debating today are totally silent on the condition of protected sites.

The Secondary Legislation Scrutiny Committee’s recent report on these statutory instruments notes that the Government failed to comment on why a target is not possible. That raises an excellent question, so I ask the Minister: why is such a target missing? The Office for Environmental Protection’s recent report on progress with the 25-year environment plan points out that its objectives are not being achieved across the board and calls for “challenging apex targets”—that is a bit jargony—for all goals in the forthcoming environmental improvement plan, which would include protected sites. I look forward to that on 31 January. So it is pretty clear that everyone thinks that the absence of a condition target, or indeed any target, for protected sites is a bad thing. In fact, you have to ask a more basic question: what is good about protecting protected sites if they are simply allowed to decline?

But, again, the implications of this omission have become worse as a result of COP 15. Only three weeks ago, we signed up to a commitment to ensure that, by 2030, at least 30% of areas of degraded terrestrial ecosystems are under effective restoration and that, by 2030, at least 30% of the land is protected and effectively managed—this is the 30x30 commitment that the Government busted a gut to support in Montreal. Back home, we are miles away from either 30% commitment, and, unless we adopt a binding target for protected sites’ condition to drive their recovery, we will look globally foolish or duplicitous, as well as letting those sites go down the drain. The slogan is, “Think global, act local”; we did the global diplomacy on this one, so now let us get the England action into focus with a target—hopefully an ambitious one. If the Minister would like, we can tell him how we made progress 20 years ago.

I hope that the Minister can commit to bringing forward as soon as possible a new target for the condition of terrestrial protected sites—our precious SSSIs. Let us not forget that the crisis of biodiversity decline is as existential as the climate change crisis. Every extinction foreshadows our own. We need to do better than this. I beg to move.

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, it is a pleasure to be taking part in this debate, and I thank the noble Baroness, Lady Young of Old Scone, for her introduction to her amendment.

The environmental target on biodiversity is extremely important. The Secondary Legislation Scrutiny Committee, of which I am member, reviewed these instruments on 17 January. The committee has commented fully on each of the targets and on the overarching legislation under which they hang. The consultation that Defra conducted from 16 March to 27 June last year received 181,000 responses, and Defra seemed surprised at the number.

As the consultation response document indicates, there was an overwhelming number of responses from campaigns, organisations and petitions. There were also 660 individual responses. Given the number of campaign responses, it is surprising that Defra gave the huge number of responses as the reason for not being able to meet the deadline of 31 October 2022 to set the environmental targets, as required by the Environment Act, especially since there was only minimal, if any, alteration to the targets after considering the consultation responses.

In terms of biodiversity, the Secondary Legislation Scrutiny Committee found that between 91% and 99% of respondents disagreed with the proposed targets, feeling they indicated a lack of ambition. Concern has been expressed as to how the red list indicator will be interpreted. A very small change in one species from “critically endangered” to “endangered” could be interpreted as meeting the target. This would clearly be nonsense. The Government said in their response to the Secondary Legislation Scrutiny Committee’s concern about the absence of a favourable condition target that they do not feel a more ambitious target is necessary. Can the Minister say why?

Wildlife and Countryside Link and Greener UK had three criteria for a successful biodiversity target package. First, there should be high ambition, which sadly is not the case with these targets. Secondly, it should be comprehensive, which again is not the case. Thirdly, it should include sites of special scientific interest, which are totally absent from the targets. We are lucky in England that we have a large number of SSSIs over a very wide range of habitats, from lowland peat moors to uplands, coastal waters and woodlands. Some are managed extremely effectively, but others are in a very sad state and in need of radical attention in order to increase the species they should be supporting.

The UK’s agreement to the Convention on Biological Diversity post-2020 framework strengthens the case for a protected sites target to:

“Ensure that by 2030 at least 30 per cent of areas of degraded terrestrial, inland water, and coastal and marine ecosystems are under effective restoration”.


Defra’s target to

“ensure that species abundance in 2042 is greater than in 2022, and at least 10% greater than 2030”

could be met by restoring 1% of the moth, 3% of the butterfly and 5% of the bird abundance lost since 1970. This in itself would not be an accurate indicator that biodiversity is healthy or resilient.

I have confidence in the Minister and in his passion to deliver against these targets, but I regret that I have no such confidence in Defra as a whole. Defra was unable to publish the environmental targets by 31 October; these were delayed until 16 December. Defra was overwhelmed by the number of consultation responses. It is due to publish the environmental improvement plan by the end of January, which is next Tuesday. Defra has the largest number of all pieces of legislation due to be reviewed under the Retained EU Law (Revocation and Reform) Bill. Further, according to the green business paper for today, Defra has 22 of the 34 questions not answered after 10 working days—with one going back to November.

21:15

I am left, therefore, with the overwhelming impression that Defra is currently underresourced. Unless something is done to rectify this, it will not get anywhere near dealing with the retained EU law items that have to be dealt with by December this year, never mind delivering its environmental targets.

Could this be the underlying cause of the unambitious environmental targets? Regardless, it is necessary to halt the decline in biodiversity now and quickly. How is public confidence to be restored in the country’s ability to delivery on the 25-year environment plan, which promised so much but so far has not lived up to the expectation that it set? Something concrete must be done—and done soon.

[Baroness Jones of Whitchurch (Lab)]

My Lords, my noble friend made a powerful speech setting out why the targets in this SI are inadequate. It follows on from the concerns we raised in the amendment to the Motion on water on Monday and in Grand Committee yesterday.

The fact is that these targets are not the huge strategic targets that we were expecting from the Environment Act. Instead, they have been cherry-picked to comply with the legislation, so that the box can be ticked without worrying the department unduly. As a result, we have weak and unambitious targets, which will underpin the environmental improvement plans due at the end of the month, and the department will continue to coast along without clear drive and focus.

I refer noble Lords again to the excellent report from the OEP published last week, to which my noble friend also referred, which was a stocktake of the Government’s progress on improving the environment. It raised significant concerns, making reference to persistent trends of environmental decline; adverse trends becoming difficult to arrest; and risks of environmental impacts becoming irreversible. It also made the important point that the Government have far too many targets—some voluntary, others statutory—and that it is not at all clear how these targets work together to achieve the overarching goals and objectives. I do not think that the OEP had had sight of these new targets when its report was written, but I am guessing that its concerns will not have been allayed by these statutory targets that we are now considering.

Once again, I am also grateful for the excellent work of the Secondary Legislation Scrutiny Committee and the submissions from Greener UK and Wildlife and Countryside Link. They raise considerable concerns about how the targets will be measured and the consequences of unforeseen distortions of data. For example, as has been said, they question whether the use of the red list indicator fluctuations is a credible way to measure extinction risk, which should look across a wide range of species rather than one or two outliers. I ask the Minister: was authoritative scientific advice requested before this statistical model was proposed? Were the Government advised on the best way to set the baseline, so that we could be assured that real progress was being made right across the board?

On species abundance, we already have a target set in the Environment Act to halt the decline of species abundance by 2030. There was a logic in all the debates around this target that a halt in the decline of biodiversity would then be followed quickly by increases in biodiversity as the graph started to go up again. But this expectation is not reflected in the new targets before us today. Instead, we have a huge gap between 2030, when the decline will halt, and 2042, when we might see some measurable progress upwards, according to these proposals. This seems to water down the original, hard-fought deadline of 2030, as we now have to wait 14 more years for signs of progress. Then the target will be met—as we have heard—if, by an insignificant amount, the 2042 level is better than the baseline 2022 level.

Given the current rate of decline, with 41% of species in decline since 1970, this is a ridiculously unambitious target. Can the Minister provide some reassurance that 2030 will see the species decline go properly into reverse and by 2042 a significant, measurable improvement will be achieved?

Finally, my noble friend has made a compelling case for an ambitious target to improve terrestrial protected sites. We know that protected sites have a crucial role to play in delivering the Government’s stated objective of creating 30% of land for nature by 2030, but so far the rate is only 3%. The SSSIs have a particular role to play in protecting our ancient woodland, hay meadows, peat bogs, chalk streams and moorland. How have we allowed them to get in such poor condition that only 40% meet an acceptable standard?

These sites are key to driving nature’s recovery. Can the Minister explain why, after 13 years of Conservative government, the SSSIs have been left to languish in such a poor state? Can he assure us that this latest round of target setting will be more effective than those that have gone before, when we have not been able even to protect our most sensitive and highly prized sites? I look forward to his response.

[Baroness Jones of Moulsecoomb (GP)]

My Lords, I declare an interest as a rabid Green who thinks that these are not just limp targets; they are utterly inadequate. It strikes me that Defra is not doing its homework with scientists. It is not listening to the science; it is not keeping up.

I thank the noble Baroness, Lady Young, for tabling this amendment and I have really enjoyed the speeches. I am not going to go on for very long, but I would like to mention the whole issue of zoonotic disease. I am quite concerned that at the moment we have caged animals in the UK for all sorts of reasons; they are mainly hens. Such practices can pose a serious risk to human health as well as to animal welfare and biodiversity. Unnatural crowding, poor hygiene, stress, injuries and low genetic diversity are ideal for the creation and spread of novel pathogens, as we have already seen in the past few years. I am curious as to whether the Government are working on this issue or if it is just not part of their thinking at their moment.

I also mention that international zoonotic diseases are particularly prevalent in fur farming and although we have banned such practices in the UK, we still allow imports. Are the Government considering a ban on imported furs?

[Baroness Smith of Basildon (Lab)]

My Lords, this has been a really interesting debate. I cannot help noticing the gender balance of speakers who have shown an interest in the environment this evening, so I forgive the Minister if he is slightly terrified by us all standing here tonight.

We owe a debt of gratitude to the noble Baroness, Lady Young of Old Scone, for bringing this forward tonight because it has given us the opportunity, even at this hour—and it is not late for your Lordships’ House; I was here later last night—to look at some really serious issues and see whether there is anything the Minister can do, other than answering the questions posed to him, to take this back, as the noble Baroness asked, and come back with something more ambitious that will do the job that we seek it to do. Her speech showed her experience and knowledge of the issues and that is what this House is best known for. It is where our strength lies but it is a strength only if we take notice of what is said by those who know more than us at the Dispatch Boxes.

My first reaction to this SI was one of disappointment, which I think is a similar comment to the one made by the noble Baroness, Lady Jones of Whitchurch. This was an opportunity, across the suite of the SIs we are seeing, although we are discussing just one tonight, to set targets that match the scale of the challenge. The Minister was clear at the beginning about the scale of the challenge we are facing. But there was an opportunity to set targets that were ambitious but which with commitment would be achievable. The Government’s own reports outline the scale of the challenge, but it is not clear, certainly from today’s SI, that the sense of urgency and the ambition that are needed are actually there.

I want to raise three issues. A lot of the issues have already been aired and I feel that the Minister has a long list of responses to make. First—and I am glad to say this when the noble Baroness, Lady Bakewell of Hardington Mandeville, is here—I thank the Secondary Legislation Scrutiny Committee for its work. I also thank all those who provided briefings, including Wildlife and Countryside Link and Greener UK. On the Secondary Legislation Scrutiny Committee, one piece of advice I give to MPs, which was given to me when I was first an MP, is to look at the reports from this committee, because they are excellent at getting under the issues of how things could have been done better if there is an issue. Interestingly, it was one of the very few occasions when I have seen one of these reports quoted extensively in a House of Commons debate on this issue: the committee is a credit to the whole House.

I start by emphasising the points made by my noble friend Lady Young on the reasons for her amendment today. It is clearly a serious omission not to have a target for the condition of terrestrial protected sites. SSSIs are recognised by Defra as important to the future programme of protection. Its own report says:

“To halt nature’s decline by 2030 we know we will need to take action to restore our protected sites, which are vital wildlife havens.”


These areas are pretty much the foundations of site-based conservation: there are 4,000 sites in England over 4,000 square miles, yet where are we and what are we doing about it? The 25-year environment plan committed, as my noble friend Lady Young said, to ensuring that 75% of SSSIs were in favourable condition. That has not been met. Not only has it not been met, the figure, as has been made clear in the debates, is stuck at around 40%.

This SI was a prime opportunity for the Government. It is a missed goal. It was an opportunity to show that we care about this, we want to do something about it and we are going to be ambitious. I do not understand why there is no target in here. I hope the noble Lord, Lord Harlech, will enlighten us this evening as to why there is no target, because that is the crux of why we are here this evening. My noble friend Lady Young has provided an opportunity for the Government to explain why, or to withdraw and come back with other targets, so we can understand and make some progress. I think the best thing to do, as she says, would be to take it back to the department to act on this.

My second point is about the 2030 species abundance target, regulation 12 in this SI. It outlines how the Government are going to measure whether the decline in biodiversity has been halved by 2030. We have heard already that it will be determined by comparing the relative species abundance index for 2029—anybody watching tonight is probably dozing off at that snappy expression—and 2030. The target to be met is for the 2030 figure to be

“the same as, or higher than,”

the 2029 figure. That seems to me pretty unambitious. It is a low bar to be comparing two consecutive years, rather than using an earlier baseline.

We know that biodiversity is steadily falling, year on year. It has been noted in the Commons already—by the Minister, incidentally—that the index has declined by around 2% a year, yet the Government think it is an ambitious target to ask if it has stayed the same. I have to say, that is really not good enough. It would be helpful to know whether Defra has an estimate of the likely index in 2029 and how that compares to where we were when Ministers made the commitment in 2021.

On a more general point about targets in the regulations, the noble Baroness, Lady Bakewell of Hardington Mandeville, touched on the issue of consultation. We have heard from several speakers tonight that about 90% of those consulted thought the targets were not ambitious enough.

When I look up a definition of “consultation”, it normally means you listen, you take on board what has been said and you do something to respond to it. Are the Government just going to plough ahead, regardless of what is in the consultation? It is probably wasting public money having consultations in the first place. I remember as a Minister, the first question I would ask when we were consulted was, “Are we going to change our minds on anything?” If I was told, “Well, the policy is settled, Minister”, then why are you going to have that consultation? The Government need to take that back and think about the terms they use and if they are serious.

21:30

I have just a couple of further points. During the considerations we had here on the Environment Bill, which the noble Baronesses, Lady Jones and Lady Hayman, will remember well, the House opted not to press amendments—at that time, they were on issues such as the condition of peat bogs and chalk streams—on the basis that they would be dealt with in future targets. Those amendments were not pressed because we had assurances from the Minister. Is he able to confirm tonight—or he may want to write to us on this point—that because we were persuaded and trusted in Ministers’ commitments at the time that these issues would be dealt with in later future targets, all those areas, in which we did not vote on our amendments, will be explicitly addressed when the Government publish their first review, as he has mentioned, by the end of the month.

On the interim targets, does the Minister think that they are sufficiently ambitious? More importantly, if they show either that they are being met very easily, or they are not being met, is there some flexibility to adjust them at that point? That seems to be the ideal time to increase the ambition and address the points that my noble friend Lady Young made.

It is disappointing. The noble Lord will have heard that there is good will on this side to make this work. It is a serious issue; we recognise the problems, as the Government do, but it comes down to the political will and commitment to do something about it.

I hope the Government will take note of my final point. It is a comment by the chair of the Office for Environmental Protection, Dame Glenys Stacey, who said:

“Our assessment shows that the current pace and scale of action will not deliver the changes necessary to significantly improve the environment in England”.

I think that indicates that the regulatory foresight is not good enough. If the Government can go some way to addressing the questions that have been raised tonight, it might help provide some reassurance, but ultimately this is not good enough and it has to be better.

[Lord Harlech (Con)]

I thank all noble Baronesses for their valuable contributions tonight. This is a very important subject, regardless of the time or the fact that this is an SI as opposed to a piece of legislation. The environment and environmental targets are one of the reasons why I joined this place, so this is a subject that is very important to me. As a Government, we put the requirement to set targets into the Environment Act in 2021, but at the same time it is important that they are deliverable and realistic, while also raising our ambition to tackle the issues faced by the natural world. I absolutely agree that it is the job of this House to question those targets and that ambition, and it is our job to set out how they will be met.

The targets were developed to be complementary. They will ensure that action is being taken to improve wider ecosystems in England. Meeting them will require improvements across our protected sites network in line with the 25-year environment plan goal to restore 75% of 1 million hectares of terrestrial and freshwater protected sites by 2042.

As well as action across central government, we will need to work with local authorities, businesses, land managers and environmental NGOs to ensure that we do not just halt biodiversity decline but actually turn it around and restore nature.

As I said to preface this, it is important that we set targets and that noble Lords challenge them, but we also need to see wider societal and cultural change. It needs to become unacceptable for people to throw litter out of car windows or leave rubbish on the beach. Meeting this challenge will take everyone changing their mindset and behaviour. I will try to answer the questions put tonight. I hope noble Lords will forgive me if I do not cover them all; I will endeavour to write to noble Lords so I ask them to pick me up on that.

We believe these targets represent one of the most robust environmental programmes in any country. The final suite of targets is stretching, and to deliver them we will require shared endeavour across all of government and society. We considered the evidence carefully. In some cases, it is not technically or practically possible to go further at this time; in others, higher targets would involve significant restrictions on and costs for businesses and people’s lives which we do not think would be right to impose at this time—but that is not to say that they are not constantly under review.

The Environment Act requires the Government to report regularly on the process. As new technologies and methodologies evolve, we will be able to show more ambition and increase the targets. The Government have committed to halting and reversing decline, and the UK has been leading international efforts in developing an ambitious and transformative framework under the global targets of the Convention on Biological Diversity. We have addressed concerns with the previous phrasing to ensure that we leave the environment in a better state than it is in now.

We have also considered calls to increase our ambition further, but we do not believe that those calls to increase the targets have been met by the evidence base we have seen. Modelling for species abundance targets was developed alongside external partners, with guidance from Defra and Natural England. These targets are already challenging, so it is important that we set them at an achievable level.

On measuring the targets and comparing the 2042 target with the 2022 target, the index value is linked to a smooth value which takes into account fluctuations in data from year to year, making underlying trends easier to detect. The calculation of the index values in the smoothing process is peer-reviewed and well established. The methodology applied to this indicator follows that used in the England biodiversity indicators, so we are confident that using this will enable us to report on the target. The 2042 target will be assessed based on an increase in the smooth index value.

We believe that the suite of targets we are proposing is appropriate at this time, but the Act allows additional long-term targets to be set in future. There were quite a few concerns over whether this is it. It is not: we will monitor and continue to improve and push the targets, but we have to establish that baseline. The natural environment is complex, so we see target setting as an iterative process, built on over time, as our evidence base and understanding develop. We want to use the targets meaningfully to drive the environmental outcomes that we need to see.

I was asked why we have focused on abundance rather than other species indicators, such as distribution. We believe that species abundance is a good proxy for the health of the wider ecosystem. The indicator that we will use to track progress includes over 1,000 representative species, for which we have robust data. Between them, these species depend on the majority of habitats found in England. Action to achieve the species abundance target will necessarily require the creation and restoration of wider habitats and ecosystems. Indicators of abundance, in comparison with others such as distribution, are the most sensitive to change. This sensitivity will be useful in demonstrating whether policy action is leading to improvements.

I turn now to the 2022 red list index for England and assessing how that will change towards 2042. The index used the best available evidence at the time of the laying of this SI to set out a baseline for 2042. For the purposes of legal certainty, the SI needs to refer to a fixed baseline and not a baseline index value which will be calculated in the future. To ensure that we are measuring the target as accurately as possible, we will consider new data and information as appropriate, in conjunction with the relevant independent experts.

On the subject of ensuring that environmental regulations are protected, I can say that, in reviewing retained EU law, Defra’s aim is to ensure that environmental law is fit for purpose and able to drive improved environmental outcomes, while ensuring that regulators can deliver efficiently. This will ensure that the UK regulatory framework is appropriate and tailored to the UK. The Government have clear environmental and climate goals, demonstrated by the 25-year environment plan and the net-zero strategy, and any changes to environmental regulation will need to support those goals.

Several Peers mentioned the missing of targets, including laying the instrument by 31 October, and it is important to address that. As was mentioned, in March 2022, the Government launched their consultation on targets relating to the Environment Act 2021. It included 800 pages of evidence that were published following three years of developing the scientific and economic evidence. The consultation closed on 27 June. We received over 180,000 responses which needed to be analysed and carefully considered. In light of the volume of material and the significant public response, we indicated that we would not be able to publish targets by 31 October. The Secretary of State for Environment, Food and Rural Affairs reassured the House and all interested parties that we would continue to work at pace to lay draft statutory instruments as soon as practicable.

I turn now to the criticism from the OEP. The Government are looking at alternative systems of land use; I was very proud to serve alongside the noble Baroness, Lady Young of Old Scone, on the Lords Select Committee on land use. I would like to think that I heard a lot of the arguments over land sharing and land sparing. Land is a finite resource and we are asking it to do more—to provide more in terms of food, but also restore nature and energy. We are constantly looking at that, and it is very encouraging that Defra has made positive sounds about a land-use framework to balance all the competing asks on land. Our new environmental land management schemes will encourage farmers to maximise the use of highly productive agricultural land, while freeing up less productive land for things like planting trees and creating wildlife habitat.

In addition, the introductions of technological innovations, such as vertical farming, through our £270 million farming innovation programme, will allow us to free up space for nature while maintaining agricultural output. We will publish more details of this in our land-use framework later in 2023.

Several Peers raised the issue of sites of special scientific interest—SSSIs. We feel that what we are introducing through these species abundance targets will help to nurture SSSIs. We know that to halt nature decline by 2030 we need to take action to restore these protected sites, which are valuable wildlife havens. We are committed to delivering our 25-year environment plan and for our 1 million hectares of terrestrial and fresh water protected sites to be in a favourable condition by 2042. Natural England is increasing proactive work on SSSIs and has developed a much-improved monitoring system to gain a better understanding of the action required. Natural England is using this information at local and national levels, working closely with landowners and managers to put in place the changes, on and off site, that are required to improve site condition.

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We have listened to the consultation views and have actively sought to include previously underrepresented species within the target indicators where there is available data of sufficient quality. Since the publication of the consultation, we have increased the representativeness of our indicator to 124 additional species, including previously unrepresented groups such as freshwater and estuarine fish. This will also be kept under constant review.

I turn to the convention on biological diversity and the COP 16 CBD targets. Our targets to halt the decline in species are consistent with the global goal of increasing the abundance of native wild species to healthy and resilient levels by 2050. Our habitats target will be a key component of our domestic implementation of the CBD framework with respect to ecosystem restoration. This is in addition to our commitment to deliver on our 25-year environment plan favourable condition by 2042 and a commitment to 30 by 30 on land. Our ambitious species extinction risk target specifically addresses the risk of loss of species in England and, as such, contributes to the CBD target of halting human-induced extinction of known globally threatened species—those species in England that are globally threatened.

On meeting domestic commitments under the coming Montreal global biodiversity framework, the delivery of domestic commitments is legally binding. The 2030 species targets and our 30 by 30 commitment will be supported by significant investment from public and private sources that recognises the scale of the challenge. This includes over £750 million for woodland and peatland restoration through the Nature for Climate fund, and current and future agri-environment schemes. The Government have also set a new target to mobilise at least £500 million in private finance to support nature’s recovery every year by 2027 in England, rising to more than £1 billion by 2030.

I recognise that I have not answered everyone’s questions, but I am being told that I am testing the patience of the House, so I will endeavour to write to noble Lords and put letters in the Library. I hope that I have given at least an overview of the suite of targets.

[Baroness Young of Old Scone (Lab)]

My Lords, where do you start, where do you start? I thank the Minister for his response and thank other noble Lords who have spoken in this debate. There was an interesting point from the noble Baroness, Lady Bakewell, who is no longer in her place, that she worries that Defra is struggling with volume. We are all worried that Defra is struggling with the volume of things coming at it. We are struggling with the volume of things coming at us, and it must be 10 times worse for the department.

The noble Baroness, Lady Smith of Basildon, made a very valid point about the expertise of this House. There is an issue in that Defra does not capitalise on expertise. There is quite a lot of inventing stuff from the start when, in fact, there are a whole load of old fogies like us out there—including former Defra civil servants, ex-NGO folk and business folk—who have gone through many of these issues umpteen times before and could have valuable input into Defra’s considerations. That has been particularly so with the ELM scheme. I do not know how many million times I have sat down and helped develop new land-management schemes under agricultural subsidy, and I am just one small cog in a big set of wheels that could be at Defra’s disposal; that is a bit off the point but is nevertheless important.

I want to pick up one or two things that the Minister said. At the heart of my concern about there being no target for protected sites is a worry about the point he made that halting species decline will need site improvement. My view is that, if there must be a focus on improving the condition of protected sites to halt species decline, why not have a number on it while we are at it and measure site improvement? First, you will be looking at sites anyway; and, secondly, not all protected sites will be picked up by the array of species in the “species abundant” set. A number of SSSIs are designated for weird and wonderful small organisms that are nevertheless incredibly important and threatened but simply will not be picked up by the array that is there. I remember fighting nobly for the SPA in the Bristol Channel, which is designated for some teeny little worm that lives in mobile sandbanks. Try telling that to the folks who were trying to build the Severn barrage—but it was important, and we won.

I am happy about the idea that optimising land use will produce a bigger range and extent of habitats, but I do not think that really helps with the protected sites. For me, the important thing about protected sites is that they are specifically designated for a set of species and there is a specific set of management conditions that can produce improvement. We have to focus on that. I was a bit gobsmacked, if that is the technical term in your Lordships’ House, that the Minister seemed to say that some things that need to happen cannot happen because they would mean restrictions on and costs for people’s businesses and lives. That is the whole point of protected sites. They are protected regardless because they are that important. They are only a small proportion of the land surface but they are protected so that they are above the rest of the land that can be managed for multiple uses. Biodiversity must be the primary purpose.

We have legally binding targets, which are what we wanted in the Environment Act. Now that they have emerged, we are not that thrilled with them. I worry a bit. Yesterday, we spoke in the Moses Room about the woodland target because the tree cover target has been reduced to make it more achievable. The idea that, if we cannot achieve something, we should pull it down and make it more achievable worries me stiff. I also worry that we may have a tiger by the tail in that inventing the Office for Environmental Protection has meant that there is now a huge focus on anything that is statutorily required by the office’s processes. I worry that this will distort priorities and that the total focus is on avoiding the OEP taking cases against Defra; that would be a real shame at the very beginning of this new regulator.

I recognise the Minister’s personal commitment. However, I just want to say that in 2042 I shall be 94, but I will be around to remind people of how well we have done on these targets. What is more, I shall be around every year from now until then to remind people of what needs to happen. I hope that I will be encouraged by the environmental improvement plan next week and that we will see some of the informal, non-statutory targets covering protected sites. If we do not, I shall be cast down, because the statutory targets do not. I beg leave to withdraw my amendment.

Amendment to the Motion withdrawn.

Motion agreed.

House adjourned at 9.55 pm.