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Mr Speaker
We come to questions to the Chancellor of the Exchequer. I call Danny Kruger—not here. We will start with Marco Longhi, who is here.
Oral Answers to Questions
(1 year, 9 months ago)
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Marco Longhi (Dudley North) (Con)
The Chancellor of the Exchequer (Jeremy Hunt)
Mr Speaker, I did check that my Department still exists before coming along today, and you will be pleased to know that the great ship of state that is the Treasury sails serenely on.
In December, I announced the Edinburgh reforms, which take forward the Government’s ambition for the UK to be the world’s most innovative and competitive global financial centre.
Marco Longhi
Can the Chancellor please describe any relationships, or plans for them, to deliver the United Kingdom as a global financial hub, especially given the lack of equivalence with the EU?
Jeremy Hunt
I am very happy to do that for my hon. Friend. The flexibilities that we have since leaving the EU mean that we are able to do the Solvency II reforms, which mean that potentially £100 billion of extra investment will go into UK companies. Indeed, the whole of the Edinburgh reforms give us the opportunity to rethink our regulatory structures so that we do not just remain the world’s second largest exporter of financial services, but go from strength to strength.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
Concerns have been raised that legislation furthering deregulation of the financial sector is paving the way for an economic crash. Revocation of rules on commodity trading is a key concern. What steps has the Chancellor taken to ensure the Financial Services and Markets Bill, when passed, does not cause economic mayhem?
Jeremy Hunt
We have taken enormous trouble in our Edinburgh reforms package to make sure that we learn the lessons of the 2008 financial crash, but I would say to the hon. Member that financial services employ 21,000 people in Scotland. In fact, we called this set of reforms the Edinburgh reforms because they will be good not just for London, but for the whole of the UK.
Steven Bonnar (Coatbridge, Chryston and Bellshill) (SNP)
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
The Chancellor of the Exchequer (Jeremy Hunt)
Busy day for me. With permission, I would like to answer this with question 16.
Leaving the EU has enabled the UK to realise an array of economic opportunities—not just the Solvency II reforms, but 71 trade deals with non-EU countries worth £240 billion to the UK economy in 2021.
Steven Bonnar
I thank the Chancellor for that answer, but analysis by Bloomberg estimates that Brexit is costing the UK £100 billion a year in lost output. The Office for Budget Responsibility forecasts the UK economy will be 4% smaller in the medium term, again due to the impacts of Brexit. The Centre for Economic Performance has warned that Brexit has added almost £6 billion on to UK food bills in the two years to the end of 2021. How much more damage will need to be done before this Government take off the red, white and blue goggles and see the reality that Brexit is an economic drag of disastrous proportions for the countries of the UK?
Jeremy Hunt
And very important, too, if I may say so.
There is a certain irony in the SNP opposing Brexit at the same time as advocating separation for Scotland, which would have a far bigger impact. But as the hon. Member has talked about our economic performance, since we left the single market, our growth has actually been higher than that of France or Germany. There are other things that have happened since then as well, but I do not think it is the doom and gloom that he suggests.
Mr Sheerman
Last week, I was a bit unkind to one of the Treasury team, and can I apologise for that? I shall be very nice this morning.
Does the Chancellor agree with former Home Secretary Amber Rudd? Yesterday, she said that in order to be a Conservative today you have to have a few drinks and then say that Brexit actually works, or if you have really had a few drinks you can admit it does not work. Could we on all Benches admit that we are poorer in this country because of Brexit and do something about it?
Jeremy Hunt
All I would say is that, if Labour really are against Brexit, they should have the courage of their convictions and say they want to re-join the EU. That is the problem: because they do not believe they can make a success of it, they will never be able to run the British economy under it.
Anthony Browne (South Cambridgeshire) (Con)
I welcome the fact that this Government are so committed to making the UK an innovation nation that they have just today set up a whole new Government Department to promote innovation, science and technology. I have about 400 life science companies in my constituency, and there are some reservations about the reform to the research and development tax credit, introduced to try to tackle fraud in the sector. Can my right hon. Friend reassure them that the Government are still committed to supporting research and development companies while tackling fraud?
Jeremy Hunt
My hon. Friend is a formidable advocate for that sector and I do want to give him that reassurance. That is why we protected our R&D budget in the autumn statement at its highest ever level. We are continuing to look at how we can support the R&D small companies sector without allowing that fraud to happen. Thanks to his campaigning and the work of this Conservative Government, last year, we became only the third trillion-dollar tech economy in the whole world.
David Morris (Morecambe and Lunesdale) (Con)
May I thank the Chancellor for awarding Morecambe £50 million for the Eden project? It will transform my whole community. My question is about VAT tapering. When I was David Cameron’s small business tsar—a very long time ago—I came up with a formula for VAT tapering. Would my right hon. Friend like to meet me to talk about that further?
Jeremy Hunt
First, I congratulate my hon. Friend on his extraordinary campaigning for Eden Project North, which is a model for MPs standing up for their constituencies; he deserves huge congratulations on that. I will happily look at his proposals on VAT tapering. We already have the highest VAT threshold in the G7, but anything we can do to help small businesses, this Conservative Government always do.
Catherine West
Ellie Reeves (Lewisham West and Penge) (Lab)
The Financial Secretary to the Treasury (Victoria Atkins)
With permission, Mr Speaker, I should like to answer this question with Question 25; I hope that is correct.
Victoria Atkins
There we go; what is going on with the Order Paper today?
It is right that everyone contributes to sustainable public finances in a fair way. The autumn statement tax reforms mean those with the broadest shoulders contribute the most by ensuring that energy companies pay their fair share, and by making the personal tax system fairer through changes to the income tax additional rate threshold and reforms to dividends and capital gains tax allowances.
Catherine West
Researchers from the London School of Economics and the University of Warwick have found that ending the UK’s antiquated non-dom rules could gain as much as £3 billion a year for the Exchequer. At a time when the Conservative party wishes to put up taxes on working people, will the Minister at least commit to publishing the Government’s own estimate of the cost of the non-dom policy, so that small businesses and big businesses can be on an even playing field?
Victoria Atkins
If I may correct the hon. Member, in fact, individuals on, for example, an average salary of £28,000 will pay £900 less income tax and national insurance in 2027-28 compared with the personal allowance and personal thresholds rising in line with inflation since 2010-11. These are concrete measures we have taken to ensure that the spread of tax burdens is borne by those with the broadest shoulders. On her point about non-doms, of course we keep all tax policies under review, but I again emphasise that our economy needs to be open to people around the world who come to the UK to do business. What is more, they pay UK taxes on their UK incomes, which last year was worth £7.9 billion.
Ellie Reeves
While UK households face the heaviest tax burden since the 1940s, the Tories refuse to scrap non-dom status or end tax breaks for private equity bosses and private schools. Labour would do that and use the money for more doctors, teachers and nurses. Does the Minister agree that, far from being the party of low taxes, the Conservatives are the party of unfair taxes?
Victoria Atkins
Again, I refer the hon. Lady to the autumn statement, in which we attempted to ensure that those with the highest wealth pay their fair share in taxes, including by increasing corporation tax for the most profitable 30% of companies. We have ensured that the small profits rate protects smaller businesses and those that are not the most profitable, so only about 10% will pay the full main rate; that remains the lowest in the G7.
Andrew Bridgen (North West Leicestershire) (Ind)
I welcomed the new measures announced in the autumn statement to tackle tax avoidance. Will the Minister update the House on how those new measures are being implemented?
Victoria Atkins
Very much so. The hon. Member knows, I hope, that I used to prosecute tax fraudsters for a living, so this is a cause close to my heart. In the autumn statement, we announced even more investment in compliance teams to ensure that we are investigating, prosecuting or finding other remedies for those attempting to defraud the taxpayer, because these are crimes committed against the whole of society.
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
Constituents of mine face having their land and livelihoods taken from them by compulsory purchase order to build a reservoir. Compulsory purchase orders may sometimes be necessary, but does my hon. Friend agree that it is not morally right for the state to take the land and then tax as a capital gain the money given in compensation, leaving the landowner with the invidious choice of paying a hefty tax bill, or trying to find a way of rolling over that land money into an overinflated market?
Victoria Atkins
My hon. Friend has raised this with me before orals today and, if she writes to me, I will be happy to look into it further for her.
James Murray
In October 2021, the right hon. Member for Richmond (Yorks) (Rishi Sunak), as Chancellor, welcomed the OECD global agreement on a global minimum corporation tax rate. The then Chancellor’s press release made it clear that
“The aim is for these historic rules to be implemented and effective from 2023.”
Yet now we hear rumours that some senior Conservatives are agitating against the deal being implemented, and we have all seen the Prime Minister’s weakness when facing resistance from his own party. Can the Minister confirm that pillar two of the OECD deal will be in place, as promised, by the end of this year?
Ms Anum Qaisar (Airdrie and Shotts) (SNP)
The Exchequer Secretary to the Treasury (James Cartlidge)
Inflation is our primary challenge, and I can confirm that the Office for Budget Responsibility estimated that the energy price guarantee has reduced the peak in inflation by 2.5 percentage points and that inflation is still nearly two percentage points lower than it otherwise would have been in Q2 this year, when the generosity of the scheme is reduced.
Ms Qaisar
The Government are clawing back from the already pitiful financial assistance offered to businesses. Under the new scheme, businesses will now save only a few pennies for each unit of energy they use. Small businesses in my constituency of Airdrie and Shotts are already struggling to stay afloat under the new scheme. The owner of a small family-run café described to me how they have had to dip into personal savings to meet payments. Will the Minister reconsider the Government’s plans to change the energy support scheme and instead expand support to better meet the needs of small businesses?
James Cartlidge
Of course it is important that we are cognisant of the challenges facing small businesses. The hon. Lady describes our support as “pitiful”. In the current period—the last six months—the available support for businesses with energy bills has been worth up to £18 billion. That is an extraordinary level of support, but we were absolutely transparent that that was not sustainable, that we would review it and that we would then have a less generous scheme but one that was still significant. To underline that, we will still have a scheme worth up to £5.5 billion. That remains a significant intervention and is worth, for example, up to £2,300 for a pub, or up to £400 for a small shop.
Abena Oppong-Asare (Erith and Thamesmead) (Lab)
Many will have heard the appalling stories of the forced installation of prepayment meters, which is precisely why Labour had called for a ban. But there is another scandal: the fact that those using prepayment meters pay more for their energy than those paying by direct debit. Why should those with the least pay the most? Labour will end this—will the Conservatives?
James Cartlidge
I am grateful to the hon. Lady, and I know this will be an important matter for the new Secretary of State for Energy Security and Net Zero. As for the Treasury position and our assistance in this matter, we should remember we have given the greatest support with energy bills to those with the greatest need. In the current financial year, we have given a cost of living payment of £650 for those on benefits, and in the next financial year there will be £900 of support. It is significant and it is comprehensive.
Stewart Hosie (Dundee East) (SNP)
I have a constituent with a number of shops. He has seen his four-weekly energy costs rise from £12,000 last October to £27,000 today. Moving on to lower tariffs, but with the reduced energy support, he will still see that £12,000 every four weeks doubled, to £24,000. What advice would the Minister give to my constituent? How would he find the £140,000 off the bottom line in a business already operating on tight margins?
James Cartlidge
With great respect to the right hon. Gentleman, he was there when I gave the statement about the new scheme. I was clear with him about the fiscal position overall. He is welcome to write to me on that specific case. Obviously, I cannot comment on the detail of that individual case. What I can say is that we continue to put in place up to £5.5 billion of support with the energy bills discount scheme. That is a significant intervention and it remains a universal scheme with targeted support for the most energy and trade-intensive sectors.
Stewart Hosie
Therein lies the problem: this will go to high energy users. The Federation of Small Businesses described the changes as “catastrophic” and
the beginning of the end for tens of thousands of small businesses”,
the British Chambers of Commerce said that
“an 85% drop in the financial envelope of support will fall short for thousands of UK businesses who are seriously struggling”,
and UKHospitality criticised the sudden and sharp drop in support, estimating the move would cost that sector £4.5 billion in the next 12 months. Why does the Minister think they were all wrong and he is right?
James Cartlidge
As I said to the hon. Member for Airdrie and Shotts (Ms Qaisar), we were clear when we created the scheme to support businesses with their energy bills that it had to be time limited because of the generosity of the support—£18 billion over six months. We were absolutely transparent about that. But we have maintained a universal scheme covering businesses, charities and the public sector. Yes, it is less generous, but it remains significant. As I said, he is welcome to write to me with the specific case he raised.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
The Financial Secretary to the Treasury (Victoria Atkins)
The Government are committed to supporting the transition to net zero emission vehicles to help the United Kingdom to meet its net zero obligations. That includes committing £2.5 billion since 2020 to support that transition, to fund targeted vehicle incentives and to fund the roll-out of charging infrastructure.
Gavin Newlands
We know that Scotland has many more public electric vehicle chargers per head of population than England; according to the Department for Transport’s January figures, it has 23% more per head and 73% more rapid chargers per head than England. However, we also know that those of us, like myself, who can charge their cars at home pay 5% VAT as part of our domestic energy bill, while those unable to charge at home—those who live in flats and so on—have to pay 20% VAT on often already significantly more expensive chargers. If the Minister agrees that that acts as a disincentive to switching to EVs, will it be fixed in the upcoming Budget?
Victoria Atkins
I hope the hon. Gentleman reflects on the considerable advantages his constituents gain from being in the United Kingdom, because the Scottish Government receive 25% more funding per person than equivalent UK Government spending in other parts of the United Kingdom. On his challenge about the electric vehicle transition, introducing VAT relief for charging points in public places would impose additional pressures on the public finances, to which VAT makes a significant contribution. Indeed, it is expected to raise £157 billion in 2022-23, helping to fund the key public services we all care about. I welcome his support for the UK Government’s work to reach net zero targets, but I ask him, please, to work with the UK Government to help us to achieve this across the United Kingdom.
Ruth Cadbury (Brentford and Isleworth) (Lab)
The Financial Secretary to the Treasury (Victoria Atkins)
The loan charge was independently reviewed in 2019 by Lord Morse, who considered its impact on individuals affected. The Government recognise the impact and have accepted 19 of the review’s 20 recommendations. His Majesty’s Revenue and Customs puts support for those affected at the core of its work in collecting the loan charge; that includes support from trained advisers in its extra support teams.
Ruth Cadbury
HMRC has acknowledged that there have now been 10 suicides connected to the loan charge. Can the Minister confirm whether loan schemes like those that the charge was set up to stop are still in operation? What are the Government doing to stop further such tragedies?
Victoria Atkins
On the point about the deaths that the hon. Lady understandably raises, we have made referrals to the Independent Office for Police Conduct in relation to those 10 events. The first referral was in March 2019. In the eight concluded investigations, no evidence has been found of misconduct by any HMRC officer, but we are very sensitive to the pressures that people are under, which is precisely why we have the extra support teams in place: teams of trained advisers who can, where appropriate, support taxpayers towards voluntary and community organisations that can help. Of course, people can also ask for help such as time to pay.
Richard Fuller (North East Bedfordshire) (Con)
Whatever the hopes were on the loan charge scheme’s introduction, the process has now gone on for a considerable time, raising questions about its efficacy and drawing HMRC into areas of moral hazard. Will my hon. Friend look at ways in which this HMRC scheme can be drawn to a conclusion?
Victoria Atkins
May I acknowledge my hon. Friend’s work as Economic Secretary and thank him for it? The difficulty is that a large sum of money is still outstanding from these disputes. We have had an independent review of the matter, through which we have been able to reduce the number of people affected, but the issue of outstanding tax remains. I encourage anyone affected by these historic issues to please talk to HMRC so that we can find a resolution for both sides.
Chris Clarkson (Heywood and Middleton) (Con)
The Exchequer Secretary to the Treasury (James Cartlidge)
The Government have taken significant action to help households with rising energy prices. The energy price guarantee caps the unit price that households pay for electricity and gas and will save a typical household in Great Britain approximately £900 this winter, based on forecasts made at the time of the autumn statement. That is in addition to the £400 energy bills support scheme, paid in six instalments from October last year to March this year.
Chris Clarkson
The high price of energy disproportionately affects those who are on the lowest incomes. Will my hon. Friend outline what steps his Department is taking to ensure that those who earn the least are supported?
James Cartlidge
My hon. Friend is a consistent champion for his constituents, particularly for those who are on the lowest incomes. He is quite right: I think we all accept that they will have faced the toughest challenge in the face of the very high cost of living, given the global inflationary pressures. In addition to the £1,300 that a typical household will receive this winter—the £900 energy price guarantee saving and the £400 energy bills support scheme payment—I can confirm that those households will have had £650 in the current financial year, if they are on benefits, and will have £900 next year. That is very significant and comprehensive support.
Andrew Gwynne (Denton and Reddish) (Lab)
Support for households is incredibly important, but in the past half-hour Willow Wood Hospice, which provides hospice services to my constituents, has emailed me to raise the plight of the UK hospice sector, which faces up to a fivefold increase in its energy bills even after the Government’s energy bill relief scheme, which is due to end in March. What more can the Minister do to ensure that Willow Wood Hospice and hospices around the country get the extra support that they need?
James Cartlidge
The hon. Gentleman raises a very important case; I am more than happy for him to me to write to me with the specifics. I obviously cannot comment on individual cases, but what I would say is that when we set up the energy bill relief scheme—the original scheme, which is currently providing up to £18 billion of support not only for businesses, but for hospices, charities and organisations in the public sector—we were very clear that it could not be sustained at that level. It is extremely expensive, although it is very important and generous. In setting it up, we had a number of choices; we chose to maintain a universal scheme. Yes, there is some targeting in energy and trade-intensive sectors, but it is a universal scheme, meaning that hospices continue to benefit.
Dr Kieran Mullan (Crewe and Nantwich) (Con)
The Chancellor of the Exchequer (Jeremy Hunt)
In the next financial year there will be a number of measures to help households with the lowest incomes, including a £900 cost of living payment, a 10.1% increase in benefits in line with inflation, and an increase in the national living wage to £10.42 an hour, which represents an extra £1,600 for someone in full-time work.
Dr Mullan
Notwithstanding the collective amnesia on the Opposition Benches, those of us on the Government Benches remember that when we took office in 2010, roughly £1 in every £4 spent by the Labour Government had been borrowed; nor will we forget being told “There is no money left.” Does my right hon. Friend agree that we are only able to take the steps he has outlined—as well as the steps we took during the pandemic—because of careful management of public finances by successive Governments?
Jeremy Hunt
My hon. Friend is entirely right. It is because we took difficult decisions to reduce the deficit by 80% in the period leading up to the pandemic that we were able to allocate £400 billion of help to families and businesses during the pandemic and £99 billion to families during the energy crisis, which means an average of £3,500 per family this year and next. There is a phrase for that: it is “fixing the roof while the sun is shining”.
Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
A plethora of economic statistics highlight UK inequality and how it affects households. In Ireland, the poorest 5% of the population are 63% richer than their equivalents in the UK. In France, the lowest-earning third earn 20% more than their UK equivalents, while the middle-income third earn 25% more. Low-income households in Germany are 21% richer than those in the UK. No wonder the workers are striking! Why are the Government maintaining a system that keeps workers in the UK poorer than their equivalents in France, Germany and Ireland? Why are they not paying the workers, and why are they not sorting out the strikes?
Jeremy Hunt
That is exactly why we are taking difficult decisions to give this country a high-skill, high-wage economy—measures that the Scottish National party opposed at every step.
Sir David Evennett (Bexleyheath and Crayford) (Con)
Peter Aldous (Waveney) (Con)
Caroline Ansell (Eastbourne) (Con)
The Exchequer Secretary to the Treasury (James Cartlidge)
With your permission, Mr Speaker, I will answer Question 10 with what I believe to be Questions 11 and 20.
James Cartlidge
Thank you, Mr Speaker. It is good when a Treasury Minister gets the numbers right.
I can confirm that the Government are supporting businesses with energy costs during the winter by means of the energy bill relief scheme. The scheme came into effect on 1 October 2022, and will run until 31 March this year. Following the review of the operation of the current scheme, we announced that we would launch a new energy bills discount scheme, which will provide eligible, non-domestic energy users—including eligible hospices—with a discount on their energy bills for a further 12 months from 1 April until 31 March next year.
Sir David Evennett
Businesses in my constituency are grateful for all the support that the Government have given them over the past few very difficult years—they appreciate that—but what steps are the Government taking to protect energy-intensive industries from high energy prices, about which they are concerned?
James Cartlidge
My right hon. Friend is right to highlight not only the generosity of the support but the issues facing specific sectors. The Treasury recognises that some businesses are highly exposed to both energy prices and international competition, which means that they are unable to pass on or absorb these higher costs. Following the review of the operation of the current energy bill relief scheme, we decided to target additional support beyond April this year at the most energy and trade-intensive sectors, which are primarily manufacturing businesses.
Peter Aldous
Metal finishing is a vital component of many strategic industries, including defence, aerospace and energy. Although the process is extremely energy-intensive, businesses such as MP Eastern in Lowestoft do not currently qualify for the additional support that is available, and are therefore losing business to overseas competitors. In order to stop that, strengthen our own supply chain and enhance national security, will my hon. Friend review the support that is available to metal-finishing businesses?
James Cartlidge
My hon. Friend and county colleague is always championing his local businesses in the Chamber—[Interruption.] I am glad that the hon. Member for Na h-Eileanan an Iar (Angus Brendan MacNeil) agrees with me that my hon. Friend is a stalwart champion of his constituency businesses.
We have taken a consistent approach to identifying the most energy and trade-intensive sectors, with all sectors that meet agreed thresholds for energy and trade intensity eligible for ETII support. The firms eligible for the scheme are those operating within sectors that fall above the 80th percentile for energy intensity and the 60th percentile for trade intensity, and those operating within sectors that are eligible for the existing energy-intensive industries compensation exemption scheme. As ever, my hon. Friend is welcome to write to me about the specifics.
Caroline Ansell
St Wilfrid’s Hospice in Eastbourne has just celebrated its 40th anniversary. Some 70% of its running costs are met by the generous public, who love and appreciate all that it does at the end of life, and next month they are literally walking over hot coals in its support. The nature of the setting means that the hospice cannot readily change the thermostat. It has pursued renewables, and the building is efficient. In short, it is doing all it can. After May, its energy costs are predicted to soar by 285%. What support can my hon. Friend outline for St Wilfrid’s, so that energy hikes will not cost therapies, in-patient beds or nursing hours in the community?
James Cartlidge
I pay tribute to St Wilfrid’s Hospice, and to all those who fundraise to support it. My hon. Friend is absolutely right to raise this issue. As I said to the hon. Member for Denton and Reddish (Andrew Gwynne), we could have chosen to have a much more targeted scheme, which we said we would consider, but in fact we have continued with a universal scheme, covering not just businesses but charities and the public sector. That includes hospices. This new scheme will enable hospices locked into contracts signed before recent substantial falls in the wholesale price to manage their costs and provide others with reassurance against the risk of prices rising again.
Barbara Keeley (Worsley and Eccles South) (Lab)
Arts organisations have been hit by rocketing energy bills at the same time as audience footfall remains depressed by the cost of living crisis and the residual effects of the covid pandemic. The current rates of cultural tax reliefs were introduced to help theatres, orchestras, museums and galleries to recover during the pandemic, but some orchestras are now saying they are unlikely to survive if the tapering of that 50% orchestral tax relief goes ahead. Will the Minister and the Chancellor look at this urgently and review the reduction from 31 March of this vital support to arts organisations?
James Cartlidge
If the hon. Lady provides me with the details, I will be more than happy to do that.
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
On Friday I met representatives of the Federation of Small Businesses and of small businesses in my constituency, and the message from them is that they are extremely worried about their future, about their sustainability and about energy costs. One of the points they highlighted was their concern about what will happen to their energy costs after April. Will the Minister look at matching what the Labour party is proposing, which is cutting small business rates to enable small businesses to save up to £5,000 a year, to ensure that they can continue not just for this year but going into the future?
James Cartlidge
I have also met the FSB. The one crucial point I would make is that I understand why businesses are concerned in these very challenging times—I ran a small business myself before entering Parliament—but we have to balance out the costs of these schemes to the Exchequer. We have to run sound public finances, not least because that engenders a platform of stability and confidence, which is in the interest of every single business in this country.
Peter Grant (Glenrothes) (SNP)
I may have missed it, but I do not think the Minister even attempted to answer the question asked by my right hon. Friend the Member for Dundee East (Stewart Hosie) a wee while ago. How can a small retail business possibly be expected to survive if it is facing an increase of more than £100,000 a year on its overheads while at the same time its customers cannot afford to support it because they cannot afford their own electricity bills? Could it possibly be related to the news that BP shareholders are today celebrating the biggest profits in the company’s long history? Does that give the Minister an indication as to where he might look to find the tax revenue to support small businesses and householders?
James Cartlidge
The hon. Gentleman is aware that we have already introduced two new levies: the energy profits levy, which relates to North sea oil and gas; and the electricity generators levy, which relates to the exceptional returns that generators will have received because of the exceptional prices following the invasion of Ukraine. I said to the right hon. Member for Dundee East that he was more than welcome to write to me with the specifics of the case he mentioned, and I look forward to receiving that letter.
Wera Hobhouse (Bath) (LD)
The Exchequer Secretary to the Treasury (James Cartlidge)
The Government are committed to encouraging investment in the UK energy sector. The contracts for difference scheme has been hugely successful in driving the deployment of renewable energy while rapidly reducing costs. It is an established and successful mechanism that provides greater confidence to investors in renewable electricity projects, and to date CFD generators have received almost £6 billion net in price support through the scheme, enabling world-leading renewable deployment and lowering the cost of capital to investors.
Wera Hobhouse
Since 2016, the Government have handed out over £10 billion in oil and gas exploration and extraction subsidies. In contrast, major economies such as the US and the EU are putting together huge investment plans to accelerate the renewable energy transformation, and Britain is lagging behind. Is it not time that the UK phased down subsidies for new oil and gas exploration and invested that money in renewables to accelerate the transition? The Minister knows we are not transitioning fast enough and that we are missing many of our net zero targets.
James Cartlidge
I respect the hon. Lady’s consistency in asking these questions, but I beg to differ when she says we are lagging behind. We have reduced our emissions faster than any other G7 nation. Last year, 40% of our energy came from renewables and just 1.5% came from coal. We have seen huge investment in renewables. Our new Department is called the Department for Energy Security and Net Zero because it is about not just net zero but energy security. On the transition to net zero, we still need to invest in the North sea and our domestic energy sources.
Virginia Crosbie (Ynys Môn) (Con)
I am proud of this Government’s track record on renewable energy, and I welcome today’s announcement that there will be a new Department for Energy Security and Net Zero. Does the Minister agree that nuclear baseload is key if we are to decarbonise the transport and manufacturing sectors and deliver this Government’s net zero 2050 target?
James Cartlidge
I say it again but, if anyone is a champion of the nuclear sector, it is my hon. Friend, who has consistently championed it. She is right that renewables are crucial but that we need baseload energy. Surely, on both sides of the House, if we have learned anything from the past 12 months and what has happened following Putin’s invasion of Ukraine, it is that we need policy not only on renewables but on overall energy security, to which nuclear is crucial.
Chloe Smith (Norwich North) (Con)
The Chief Secretary to the Treasury (John Glen)
Unemployment is at a record low of 3.7%, although we recognise that there are labour shortages due, in part, to a rise in working-age inactivity. Tackling that inactivity and supporting growth remains a priority for the Government, and the Secretary of State for Work and Pensions is working on a thorough review, which will conclude very shortly.
Chloe Smith
I am glad my right hon. Friends have taken up the urgent issue of economic inactivity. Does the Minister agree that support for disability and poor health must be improved to help people to start, to stay and to succeed at work? Will he ensure that spending on Access to Work keeps pace, and will he look at a disability employment endowment fund?
John Glen
Absolutely, I will look at that. The Government have already committed £1.3 billion of funding to help those with health conditions or disabilities to get into work and to thrive. This is a complex area with a number of interlocking factors, at which we are looking very carefully at this moment.
Sarah Green (Chesham and Amersham) (LD)
The Economic Secretary to the Treasury (Andrew Griffith)
We want everyone to have appropriate access to banking services. Decisions on branches are commercial decisions for firms to take, but we have ensured that the regulatory structure treats customers fairly. As well as digital and telephone banking channels, alternative in-person services are available via the Post Office, through industry-driven initiatives and through new shared banking hubs.
Sarah Green
Following a string of local bank branch closures in recent years, news of yet another branch shutting up shop in Amersham on 1 March has caused great concern to my constituents. Some of those affected will struggle to make the journey to the next nearest branch, and they are not confident that the promised alternative provision will meet their needs. Does the Minister agree that the creation of banking hubs should be triggered by the communities that need them? Will he meet me to discuss the need for such a hub in my constituency?
Andrew Griffith
I would be happy to meet the hon. Lady to talk about the challenges her constituents face. In its information pack about the closure, Barclays revealed that only 22 customers use the branch regularly, and that 92% of users are able to fulfil their services through other means.
Andrew Jones (Harrogate and Knaresborough) (Con)
The work to deliver a new banking hub in Knaresborough is progressing so well that we are looking at an opening date in only a few months. Will my hon. Friend come to Knaresborough when the hub is open?
Andrew Griffith
I will be delighted to visit, and I commend the good work done by Link and the access to cash action group.
Bob Blackman (Harrow East) (Con)
The Economic Secretary to the Treasury (Andrew Griffith)
For under-18s, financial education is a key part of building financial capability. The statutory citizenship curriculum provides essential knowledge so that 11 to 16-year-olds are prepared to manage their money well.
Bob Blackman
I thank my hon. Friend for that answer. Cambridge University has demonstrated in its research that it is actually primary school education that is vital to prepare young people for financial education, but at the moment only one in five children has access to this. Will he consider using part of the dormant assets fund, which I believe totals £880 million, to gain access for children to financial education?
Andrew Griffith
My hon. Friend makes an important point about it never being too early to start the important work of financial inclusion. I am convening the financial inclusion policy forum next week, and I look forward to engaging with him on this all-too-important topic.
Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)
The Chief Secretary to the Treasury (John Glen)
The Government recognise that inflation has created a challenging delivery landscape for capital infrastructure projects, including the levelling-up fund. That is why we have made £65 million in delivery support available to successful applicants to ensure that local residents see the benefits of the Government’s investment.
Jonathan Edwards
Thank you for getting me in, Mr Speaker. As the Minister said, there have been significant inflationary costs since many of these projects were announced. The feedback I am getting about many of the capital projects in the Swansea bay area is that the same can be said for the city deals. What discussions are taking place with delivery partners to ensure that sufficient central support is available for projects that are in the pipeline to be completed?
John Glen
There is a constant dialogue at a central and local level to evaluate projects and look at what can be done to maximise delivery in the anticipated timeframe. Obviously, inflation affects the whole economy and every Secretary of State who comes to see me raises the same issue. That is why the Government are so determined to halve inflation and set the conditions for growth.
Mr Pat McFadden (Wolverhampton South East) (Lab)
Following the recent levelling-up round 2 announcements, in which all five bids from Birmingham were refused, as were both bids from the great city of Wolverhampton, but, miraculously, the one from the Prime Minister’s constituency was approved, the Conservative Mayor of the West Midlands Combined Authority, Andy Street, said:
“Fundamentally this episode is just another example as to why Whitehall’s bidding and begging bowl culture is broken”.
What is the Chief Secretary’s response to the Conservative Mayor’s comments?
John Glen
My response is to explain that there is a rigorous process of scoring and evaluating all bids very carefully, as there has been over both rounds. In rounds 1 and 2, 45% was given to constituencies held by Opposition parties and 66% was targeted at category 1 constituencies. I recognise the disappointment some colleagues will feel and, therefore, there is another round. Details of that will be made available in due course.
Mr McFadden
Right now in the United States, job opportunities and investments throughout the country are being driven by the Inflation Reduction Act. The European Union is responding with an incentive package of its own. But the new Energy Secretary describes both those policies as “dangerous”. Does the Chief Secretary agree that the Inflation Reduction Act is dangerous? Or does he think that the UK needs a response that makes sure that we do not lose out on the green transition and that we, too, need a Government who want to see investment and jobs from the green transition in every part of the UK?
John Glen
The Government are totally committed to meeting our net zero obligations. In the comings weeks, as we prepare for the Budget, the Chancellor will be considering these matters in the decisions he brings to the House. Every economy will have a different set of pressures, but we will do everything we can to address the need to find the conditions for growth, deal with inflation and ensure that we set the economy fair for the future.
Kate Hollern (Blackburn) (Lab)
The Chancellor of the Exchequer (Jeremy Hunt)
Ten days ago, I announced the four pillars of our plan to transform productivity and make the UK one of the most prosperous countries in Europe. They all begin with the letter “e”, to help Opposition Members remember them easily: an enterprise economy with low taxation; world-class education and skills; high levels of employment, to reduce our dependence on migration; and growth spread everywhere, from South West Surrey to Leeds to Chorley.
Kate Hollern
Does the Chancellor recognise that it is his responsibility to deliver what people want, which is a fair tax system where everybody plays by the same rules? Will he disclose how many Government Ministers have personally benefited from non-dom tax status over the years, and how many have used overseas offshore trusts to reduce the taxes that they owe Britain?
Jeremy Hunt
I can tell the hon. Lady that, since 2010, no Member of Parliament has been allowed to benefit from non-dom status.
Priti Patel (Witham) (Con)
The Financial Secretary to the Treasury (Victoria Atkins)
I thank my right hon. Friend for her question. The pillar two rules mean that large companies—these are defined as businesses with revenues of €750 million or more—are subject to a top-up tax if the profits that they make are not subject to at least a 15% tax. The reason that the international community is coming together to draw up these rules is precisely to do with the new shape that all our economies are taking, with international businesses spreading out around the world. We are trying to find a way to ensure that those very profitable businesses pay their fair share of tax.
Rachel Reeves (Leeds West) (Lab)
Last week, Shell announced profits of £32 billion, the highest in its 115-year history. Today, BP announced profits of £23 billion, the highest in its history. Meanwhile, in April, energy bills for households will go up by £500. The cost of living crisis is far from over, so will the Government follow our lead and impose a proper windfall tax to keep people’s energy bills down.
Jeremy Hunt
I am glad that the right hon. Lady asked about windfall taxes, because our plans raise more money than she was advocating in the autumn, and they are also balanced and fair. Anything higher will stop investment, increase dependence on Putin and increase energy prices. I am afraid that it is more clean energy with the Conservatives and more expensive bills with Labour.
Rachel Reeves
There we go again: the Government shielding the energy companies and asking ordinary families and businesses to pay more. Shell has spent more on share buybacks than it has invested in renewables. Last year, BP’s dividends and share buybacks were 14 times higher than investment in low carbon energy. The Government are allowing energy companies to make profits that are the windfalls of war, while ordinary families and businesses pay the price. Is it not the case that the Tories cannot solve the cost of living crisis because they are the cost of living crisis?
Jeremy Hunt
No, Mr Speaker. The total tax take from that sector is £80 billion over five years, which is more than the entire cost of funding the police force. The shadow Chancellor can play politics, but we will be responsible because we want lower bills, more investment in transition and more money for public services, such as the police.
Greg Smith (Buckingham) (Con)
The Economic Secretary to the Treasury (Andrew Griffith)
My hon. Friend makes an important point. That is why the Financial Services and Markets Bill rightly improves the accountability of regulators to Parliament. It is about not just the cost of regulation, but the speed and efficiency of it. I read with concern work from TheCityUK suggesting that 90% of industry respondents thought that the speed of authorisations was either “somewhat” or “extremely” detrimental.
Feryal Clark (Enfield North) (Lab)
The Exchequer Secretary to the Treasury (James Cartlidge)
I answered the urgent question on this matter and said that we would consider what more can be done in these types of cases. That work is ongoing, but we will report in due course, when we have more to say.
Kevin Foster (Torbay) (Con)
The Chief Secretary to the Treasury (John Glen)
I take that report and my hon. Friend’s advocacy for the needs of coastal communities seriously, and I look forward to meeting him shortly. Alongside the rural England prosperity fund, the £2.6 billion UK shared prosperity fund gives local leaders in coastal areas the freedom to target local issues, but I look forward to further conversations with him.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
Andrew Griffith
This Government bow to nobody when it comes to cracking down on tax evasion. It is wrong and illegal, and the Government do not support it.
Chloe Smith (Norwich North) (Con)
Jeremy Hunt
I discussed this issue with my right hon. Friend when she was the Secretary of State for Work and Pensions. I would be delighted to engage with her further ahead of the Budget to tap into any sensible ideas she has in this important area.
Carol Monaghan (Glasgow North West) (SNP)
Jeremy Hunt
What I can confirm is that there will be no tax cuts funded by borrowing. I can also confirm that those of us on this side of the House, unlike those on the hon. Member’s side, believe in lower taxes.
Andrew Selous (South West Bedfordshire) (Con)
James Cartlidge
My hon. Friend makes an important point. We have already discussed energy support, but efficiency is also key. Businesses can take advantage of the £315-million industrial energy transformation fund, which supports industrial sites to invest in energy efficiency and decarbonisation projects. There are several important capital allowances that may help businesses to make energy-efficient investments, such as the annual investment allowance, which has been set permanently at £1 million, the structures and buildings allowance, and, until 31 March, the super deduction—
Mrs Emma Lewell-Buck (South Shields) (Lab)
The recent inquiry by the child of the north all-party parliamentary group found that, under this Government, children in the north live in greater poverty, many in destitution, and that that problem is likely to keep growing. Why is it that, when it comes to children, this Government’s mission is always to level down rather than level up?
Jeremy Hunt
I gently say to the hon. Lady that there has been less poverty and inequality under this Government. We demonstrated that in the autumn statement, with a huge package of support—£99 billion—for houses and families up and down the country, targeted at the lowest paid.
James Wild (North West Norfolk) (Con)
Given the serious condition of the Queen Elizabeth Hospital in King’s Lynn, does the Chancellor agree that it would be better value for money to build a new hospital rather than to patch this one up? Will the Treasury back the plan by the Department of Health and Social Care to do just that and include it in the new hospitals programme?
John Glen
As we discussed when we met two weeks ago, it is a top priority for us to resolve the profile of spending for hospitals like that one, in which reinforced autoclaved aerated concrete was used and which need that urgent work. We are working on it quickly, but I do not want to steal the thunder of the Secretary of State for Health and Social Care, who will ultimately make those decisions.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
The Public Accounts Committee has expressed concerns about the difficulties taxpayers face in getting timely responses and action from His Majesty’s Revenue and Customs. My constituent Kirsty Lloyd and her former employer Llion James have missed out on thousands of pounds-worth of statutory maternity pay support, which they feel is because of delays and poor communication with HMRC. Their case has now timed out. Would the Treasury consider extending the time during which a claim can remain active in cases where there is a dispute with HMRC?
Victoria Atkins
Would the right hon. Lady do me the very great honour of writing to me about it, so I can look into the detail for her?
Robin Millar (Aberconwy) (Con)
My hon. Friend the Member for Ynys Môn (Virginia Crosbie) has run a tenacious campaign for a freeport. Can my right hon. Friend confirm that the benefits of such a freeport would be felt across north Wales and comment on the benefits that students in my own constituency might feel when considering a future career in north Wales?
John Glen
My hon. Friend is absolutely right that freeports offer tax relief, simplified customs processes and business rates retention. The evaluation process for the three bids that came in at the end of November is well under way and I hope that conclusions will be made in the very near future.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
As the hon. Member for South West Bedfordshire (Andrew Selous) said, some businesses have bought in energy at a very high rate because of when they sealed their contract. Many of my local pubs and hospitality businesses will go bust in the beginning of the next financial year because their bills are so out of kilter; they say they would have to charge £15 a pint to survive. Even in London—even in Shoreditch—that is just not feasible. What extra support is the Treasury even considering as we approach the financial statement next month?
James Cartlidge
I am grateful to the hon. Lady and, though I do not know the specifics of her cases, she is welcome to write to me. On the hospitality sector and pubs in particular, we have done two key things: we have kept the reduction in rates, increasing it to 75% relief in the following year, and we have renewed our support with energy bills, saving a typical pub up to £2,400.
Harriett Baldwin (West Worcestershire) (Con)
The Treasury Committee recently published a report titled “Fuel Duty: Fiscal forecast fiction”, because we do not think the Chancellor will really be able to raise fuel duty by 12p, as is currently baked into the Office for Budget Responsibility numbers. Will the Chancellor be able to respond to our report before the Budget?
James Cartlidge
It is worth stressing that, when we reduced fuel duty at the last spring Budget by 5p on both petrol and diesel, it was only the second time in the past 20 years that both rates had been cut. Future changes will obviously be determined at the appropriate fiscal event.
Mr Gregory Campbell (East Londonderry) (DUP)
Interest in purchasing electric vehicles has escalated significantly and is expected to escalate further in the next 12 to 18 months. Will the Minister undertake to ensure that greater provision of public-facing EV charging points is rolled out right across the United Kingdom?
Victoria Atkins
I am pleased to be able to announce that, through the more than £2 billion of funding the Government have committed to electric vehicle transitioning, 30,000 public charging devices have been made available with the help of industry. Of course we will look to do even more over the coming years.
Sir Julian Lewis (New Forest East) (Con)
May I appeal to the Treasury team to do everything they can in the forthcoming Budget to prevent people on fixed-rate mortgages from facing financial disaster when the fixed-rate term comes to an end?
Jeremy Hunt
My right hon. Friend is right to raise that issue. That is why I met Martin Lewis and the six big mortgage lenders before Christmas. We are very alive to those concerns and will monitor the situation closely.
Richard Burgon (Leeds East) (Lab)
It would cost around £1 billion to give nurses an inflation-matching pay rise. Scrapping the non-dom tax avoidance scheme used by the super-rich would raise more than £3 billion. Why, then, is the Chancellor putting non-doms before nurses?
John Glen
The Chancellor is not doing that. There is a clear process in place, and we continue constructive dialogue with all professions in dispute with the Government and with their employers. This is obviously a challenging circumstance and we recognise how difficult it is.
Kit Malthouse (North West Hampshire) (Con)
When the Chancellor acceded to the Treasury throne, he appointed a panel of four advisers drawn from the City. Has the panel met, has he added anybody from small business or industry, and where can we find the minutes, please?
Jeremy Hunt
The economic advisory council has met, I believe, three times. I will write to my right hon. Friend with the details of what was discussed.
Turkey and Syria Earthquake
(1 year, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Secretary of State for Foreign, Commonwealth and Development Affairs (James Cleverly)
With permission, Mr Speaker, I will make a statement to the House on the situation in Turkey and Syria.
On Monday morning at 1.17 am UK time, a major earthquake struck south-eastern Turkey and north-western Syria. Measuring 7.8 on the Richter scale, the quake’s impact was felt hundreds of miles away in Lebanon, Cyprus, Greece and Israel. Just nine hours later at 10.24 am London time, a second major earthquake struck the same region, with a magnitude of 7.5 on the Richter scale. The first tremor centred on the Turkish city of Gaziantep, some 150 miles north of the Turkish-Syrian border. The epicentre of the second quake was approximately 80 miles further north.
Earthquakes of this severity have not been seen in that region for 80 years. The effects of the two earthquakes have been devastating. At least 2,291 deaths have already been confirmed by the Turkish authorities, and at least 15,834 people have been reported injured. Those numbers are, I regret to inform the House, highly likely to rise significantly. I know that the House will join me in offering our sincere condolences to the people of Turkey and Syria.
Across the region, which is inhabited by more than 12 million people, more than 6,000 buildings have collapsed. Electricity and gas infrastructure has been severely damaged. Many of the 3.5 million Syrian refugees hosted by Turkey reside in the affected provinces. Turkey’s outstanding disaster relief response capability has been severely tested by the sheer scale of the catastrophe. The Turkish Government have declared a state of emergency, and they are requesting international assistance on a scale that matches the enormity of the situation that they are facing. Turkey will lead the disaster relief response in the areas of Syria where it has a presence.
As of this morning, we know that three British nationals are missing. The Foreign Office’s crisis response hub is working to support the at least 35 British nationals who have been directly affected by the earthquakes. We assess that the likelihood of large-scale British casualties remains low. The Turkish Government have contacted His Majesty’s Government to request support, and we are working closely with our Turkish allies to provide them with the help that they need as swiftly and as effectively as possible.
I have been in direct contact with my Turkish counterpart, and I plan to speak to the UN’s Under-Secretary-General for humanitarian affairs and emergency relief co-ordination this afternoon to discuss future steps. Our 77-strong urban search and rescue team, with four dogs and state-of-the-art equipment, is due to arrive at Gaziantep later today. I have also authorised the deployment of a UK emergency medical assessment team.
In Syria, the UK is in contact with our partners on the ground to establish their need and decide how best to help them. The conflict stability and security fund will provide an uplift to the opposition Syrian civil defence, commonly known as the White Helmets, to support their emergency response operations across north-west Syria. We are also providing support to Syria through the International Medical Corps, Save the Children and, of course, the United Nations agencies.
We will continue to stand by the people of Turkey and Syria. We will deliver aid to those in need, wherever they are, and as we do so, we will work with our allies and partners around the world to ensure the most effective humanitarian response. I undertake to keep the House updated on the situation in Turkey and Syria as it evolves. I commend this statement to the House.
Mr David Lammy (Tottenham) (Lab)
The massive earthquakes that struck southern Turkey and northern Syria on Monday have caused utter devastation: more than 5,000 people are likely killed, tens of thousands injured, and vast numbers of buildings and much infrastructure destroyed. A frantic rescue effort is under way, with courageous first responders combing through rubble to try to find those buried in debris and dust.
The Labour party, along with the whole House, sends our deepest condolences, thoughts and sympathies to all those whose lives have been devastated by this tragedy. It struck at night, when families were sleeping. It struck in winter, with biting winter temperatures and ice and snow hampering relief. And it struck a part of the world that has already known great tragedy and suffering in recent years. Not only have thousands of lives been lost, but it has caused anxiety for all the people of Syria and Turkey, with towns cut off as roads have been split in half. The people of Syria have faced a decade of conflict and violence, and there is simply not the infrastructure to cope with the fall-out from this disaster.
Turkey, of course, is a close ally of the United Kingdom, and there are many close ties of family and friendship between Britain and the people of Syria. My own constituency is home to a thriving Turkish, Kurdish and Syrian community. There are an estimated 500,000 people of Turkish origin living in the United Kingdom. I know the pain and anxiety that they are now feeling. They will want to know that we have in place all that we can to support and help them.
When an international humanitarian emergency arises like this, Britain of course must play its full part, so will the Foreign Secretary set out what additional financial support will be made available to relief efforts in the region, and when are those funds likely to be made available? Will he also set out what discussions he has had with international organisations working on the ground to ensure that that aid is delivered, and whether our sanctions regime for Syria will hamper some of that delivery?
The Foreign Secretary has said that, sadly, he expects the number of British nationals involved to rise. Does the figure take into account the vast number of dual nationals in our country? He has explained the efforts being made by the Foreign, Commonwealth and Development Office to ensure that concerned Turkish and Syrian families in the UK are kept informed. Will there be a constituency hotline to support that?
In December it was reported that the FCDO Syria team had been instructed to cut between £6 million and £8 million from its overall budget. Will the Foreign Secretary confirm whether he intends to pursue that cut in the face of this disaster? As well as updating the House on the immediate response—we are grateful that he has done so today—will he also come back with a long-term plan?
James Cleverly
I thank the right hon. Gentleman for his tone and the points he has made. He is absolutely right, and reflects the mood of the whole House, in saying that we pass on our thoughts not just to those in the affected region but to people here in the UK and further afield whose friends, families and loved ones may have been affected by this terrible situation.
With regard to financial support, as I have said, we have already given an uplift to the Syrian civil defence, the White Helmets. We will assess what other assistance will be needed, in close co-ordination with the United Nations and other non-Government delivery partners on the ground.
The right hon. Gentleman mentions sanctions on Syria. The response will predominantly be led by the Turkish Government in the areas that they control, and through Syrian non-Government agencies and international agencies. I will check that this is the case, but my estimation at the moment is that our ability to support will not be hampered by our sanctions regime.
On the future allocation of funds for Syria and further allocations of official development assistance, we are working through that process, as we do each year. I am not able to give the right hon. Gentleman a complete answer at the moment, but of course we will look at all allocations in response to what we are sadly seeing unfold on the ground. I will, of course, endeavour to keep the House updated.
Alicia Kearns (Rutland and Melton) (Con)
My heart goes out to all those who have lost loved ones, those who are still searching for loved ones, and the British nationals affected. The people of Syria have lived through 12 years of bombardment, chemical weapons, barrel bombs and rape. But how does Assad, who has already decimated healthcare services by double tapping and bombing, respond? Yesterday afternoon he bombed Marea, an area affected by the earthquake, in a truly callous and heinous attack and an opportunistic continuation of his attempts to destroy the moderate opposition. This is truly heinous, and it was something I warned about yesterday afternoon.
First, can the Foreign Secretary confirm what we are doing and what repercussions there will be for Assad for these appalling acts? Secondly, how will we shame Russia and China into reopening the humanitarian corridor that has now been closed for two years? Finally, when we look at the integrated review refresh, where Syria has been notably absent as we tilt towards the Indo-Pacific, will he look at the fact that Syria has turned into a narco state because we have not kept our eyes on it? Those drugs are making their way to Europe, whether we like it or not.
James Cleverly
My hon. Friend is absolutely right to highlight the completely unacceptable bombing of areas in the immediate aftermath of this natural disaster. Sadly, it speaks to a long-standing pattern of behaviour by the Assad regime, which we condemn and have sanctioned. We will continue to bring about sanctions, working with our international friends and partners, to try to prevent such behaviour occurring again. Sadly, she and the House will know that the behaviour of Assad and the Syrian Government, in this as in so many other areas, is completely unacceptable. I assure my hon. Friend that we have not lost interest in this. The situation in Syria and the response of the Assad regime is a topic of conversation that regularly comes up when I speak to interlocutors in the region and beyond.
Chris Law (Dundee West) (SNP)
The earthquakes that hit Turkey and Syria yesterday are truly devastating and have been on all our screens. I have just heard from Sky News that at least 5,000 deaths have been confirmed, and that toll will undoubtedly rise in the coming days. Our thoughts, prayers and sympathies are with all those affected. Footage shows acute and widespread destruction across central and south-eastern Turkey. In Syria, a country still suffering from more than a decade of war, the cost to human life and infrastructure is unthinkable. Reports have emerged of survivors calling out to rescue teams, texting loved ones and sending voice notes to journalists for help. Many of them cannot be saved due to a lack of rescue equipment. This is truly tragic.
The SNP welcomes the FCDO’s decision to send a team of search and rescue specialists, equipment and rescue dogs to Turkey and the co-ordination with the UN in support of those in Syria. The international community must continue to listen to those on the ground—such as the UN, the Red Crescent and the White Helmets—in the coming days and weeks, so that the best possible relief and assistance can be delivered.
A main barrier will be access to Syria in the first place, with only one crossing point on the land border between Turkey and Syria. What are the UK Government doing at UN level to try to open additional crossing points for humanitarian assistance? Additionally, getting aid and humanitarian relief across frontlines and rebel-held areas will require a humanitarian corridor. Can the Minister detail what negotiations are taking place to agree that for affected communities?
Furthermore, Turkey and Syria are in the middle of a brutal cold snap, with many roads and cities already covered in snow and now damaged in the disaster. Is the FCDO organising food supplies, further medical aid and, in particular, cold weather equipment for survivors and affected communities? Finally, given that thousands have been left homeless and lost everything, are the UK Government considering short-term family scheme visas for those survivors with families in the UK to support them?
James Cleverly
I thank the hon. Gentleman for the point he made about the speed of our technical response. The urban search and rescue team that we have dispatched are world-class, and they have world-class equipment. With regard to the humanitarian access routes, I will be speaking to Martin Griffiths at the UN later this afternoon. I know that at both ministerial and official level we will be liaising with our international partners to ensure that we co-ordinate on what Turkey needs for the response. I have already authorised the deployment of a medical assessment team. We will work closely with our international partners to make sure we address the further stages of requirement, and the requirement will evolve over time.
In Syria, we will deploy support by working through organisations such as the Red Crescent and the UN. On what more we can do for those dislocated people, we will co-ordinate with the Turkish authorities and those active in Syria as best we can, and we will make any decisions in due course.
John Howell (Henley) (Con)
Yesterday I was able to contact my opposite number in the Turkish delegation to the Council of Europe. He described the situation in Turkey as “overwhelming”. He has written to us to thank us for all that we have done. Does my right hon. Friend agree that we should do as much as possible to help the Turks in this terrible situation?
James Cleverly
My hon. Friend makes an incredibly important point. The scale of this catastrophe is one that we are unused to. Sadly, this situation is almost unprecedented for the very reasons mentioned: the fact that this part of Turkey and Syria—particularly Syria—has been on the receiving end of a huge amount of violence already; the time of year; and because we are seeing multiple shocks and it is entirely feasible that there may be more. We will, of course, work very closely with our Turkish friends and allies and our international partners in the ongoing assessment of need and our response to that.
Feryal Clark (Enfield North) (Lab)
The human toll of this disaster is immense. I thank the Secretary of State for the speedy dispatch of British search and rescue and medical teams. Like many members of the British Kurdish-Turkish community, my family, after waking up and hearing the news yesterday, were trying to find out whether our relatives in Malatya in Turkey were safe. We are very lucky that the majority of our family are safe. I spent the whole day with Turkish-Kurdish members of the community in the local community centre. Hundreds of people were desperately trying to find out if their loved ones are safe. The Foreign Office has provided a helpline, but only for British citizens stuck in this disaster. Thousands of British people have been impacted, so what support, if any, will be available to British Kurdish people who are trying to find out about family in Turkey? What can he do?
James Cleverly
The hon. Lady makes an important point about how disconcerting this is for those with friends and loved ones in the region. Obviously, the responsibility of the FCDO is to provide support for British nationals overseas—that has to be our priority. If people, whether in the UK, in the region or beyond, are fearful for British nationals who may be caught up in this, our advice is to get in contact with the FCDO. As the hon. Lady said, a team has been set up to respond. I appreciate how disconcerting it is, but we do not have the capacity to extend that support to non-British nationals. However, we are working very closely with the Turkish authorities and organisations on the ground in Syria to try to provide the maximum support that we can for those non-British nationals who, sadly, have been caught up in this terrible situation.
Mark Pritchard (The Wrekin) (Con)
I commend the Foreign Secretary for his speedy response and that of his Ministers and officials. He will know that the tragedy is still unfolding. There have been stories of great courage and survival, but there has also been an opportunity for international co-operation and diplomacy from perhaps unexpected sources, such as the Government of Greece, who sent 21 firefighters and other humanitarian and rescue workers, and the Government of Armenia. Does he agree that this is the time for the region to come together in a common effort to save their fellow human beings?
James Cleverly
My hon. Friend makes an incredibly important point. We are seeing over and again real acts of solidarity with the people of Turkey and Syria who have suffered so much as a result of the earthquakes. I have no doubt that a number of terrible stories will unfold in this awful situation. I also think this is an incredible opportunity for us to demonstrate our shared humanity and our desire to maximise the effort to prevent further loss of life. I commend those countries in the region that have put aside whatever difficulties they may have, to come together and support Turkey and Syria in their time of need.
Alison McGovern (Wirral South) (Lab)
It is hard to imagine a worse place in the world for this disaster to have happened. Gaziantep is only about 100 km from Aleppo in Syria. I know that the Foreign Secretary and all Ministers, like Opposition Members, will be thinking of those refugees who fled the horrors of Aleppo and Idlib, only to be faced with a horrendous natural disaster. Can the Secretary of State think again about the White Helmets? I wholeheartedly welcome what he has said, but that brave organisation has really struggled to maintain its sustainability. I know that he will be sympathetic, and I implore him to look again at funding for the White Helmets and ensuring we do all we can to help.
James Cleverly
I would like to take this opportunity to commend the hon. Lady for her long-standing commitment to that part of the world and the refugees there. We have been a long-standing supporter of the White Helmets, as she will know, and we have given a financial uplift in direct response to this situation. We will look at the longer-term implications of the earthquakes as we assess what our international support will be in future. I cannot give her a hard commitment at this point, but we will look very seriously at the implications of this terrible situation.
Vicky Ford (Chelmsford) (Con)
The situation is truly horrific, and it is good to know that the UK is contributing not just manpower but expertise. We know that, without further help, thousands more people will die. I see that an appeal was launched this morning by Oxfam, the British Red Cross, Christian Aid, Islamic Relief and ActionAid. Will my right hon. Friend join me in encouraging the British people to dig deep into their pockets, because every pound will make a difference?
James Cleverly
My right hon. Friend is absolutely right about the long-standing tradition of generosity, and I have no doubt that the British people will provide a huge amount of philanthropic support to those affected. The UK Government have already made a commitment to fund direct support to people in the relief effort. Our teams of experts will be a force multiplier, working with state-of-the-art equipment and techniques and some of the best urban search and rescue teams in the world. We will have an ongoing assessment of what further needs Turkey and Syria have.
Layla Moran (Oxford West and Abingdon) (LD)
I thank the Secretary of State for coming to the House so that we can express our sorrow and solidarity with the people of Turkey and Syria, and with families up and down this country who are desperately worried about those back home. I welcome the support offered and the potential offer of more, but may I press him on Syria? Organisations on the ground are ill-equipped to hand out the support that is desperately needed. Many of them are also affected by the earthquakes. The Foreign Secretary said that this is exceptional—one in 80 years—so although we are not planning to send personnel and equipment into Syria itself, I urge him to think as creatively as he can to make whatever exceptions he can, so that we do not hurt those who have already been hurt so much.
James Cleverly
As the Development Minister, my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell), said this morning, we are working closely with the United Nations. We will look creatively at what we can do to support it and our partners on the ground to maximise our ability to get humanitarian aid and support to the people who need it most.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
I commend my right hon. Friend for coming so swiftly to the House and for the action that he and the Department have already taken. This would have been a terrible enough set of circumstances on their own, but to be overlaid by a brutal civil war in the same area and a very terrible winter makes it worse beyond almost imagination.
Like many Members of the House, I have many Turkish and Turkish-Cypriot constituents who are very worried about their families and are finding it difficult to get proper information. I know that my right hon. Friend has set up a hotline. I am being contacted, as I am sure are colleagues across the House, so may I suggest that it might be helpful to have a specific MPs’ hotline, so that we can help our constituents to find out as much information as possible and put their worries at ease?
James Cleverly
My right hon. Friend makes an important point. We will, of course, look at the most effective way of providing information. One of the learnings from past consular challenges or acute situations such as this is that having one point of convergence is often most effective. I will not be hide-bound, though, and whether it is people in the UK trying to get information about British nationals or people of Turkish or Syrian heritage trying to get information about non-British nationals, we will look to facilitate that. Obviously, we do not necessarily hold the information for non-British nationals. I will look carefully at what he says about ensuring that parliamentary colleagues have swift and accurate access to information and update the House on that in due course.
Kate Osamor (Edmonton) (Lab/Co-op)
I thank the Minister for his statement, and I want to express my condolences for all those who have lost loved ones. My thoughts especially are with the large Turkish diaspora who call Edmonton their home. Will the Minister commit himself to giving regular updates in the House for those who are worried, and will he update us on what additional aid will be provided once the initial assessment has been done?
James Cleverly
The hon. Lady makes a sad but important point. This situation will evolve, and sadly, it is highly likely to get much worse before it gets better. I will make sure that my office liaises with Mr Speaker about the most effective way to provide timely updates to the House, whether it be via the Dispatch Box or in some other format. I recognise that over the next few days and next week, when the House is not sitting, the Dispatch Box might not be the most effective way of doing so. I also recognise that this situation will be coming to its peak over the next couple of days, and Members, rightly, will expect to have updates, so I will try to find a way of most effectively facilitating that.
Sir Julian Lewis (New Forest East) (Con)
A situation of this sort in a fellow NATO member would seem to be tailor-made for military assistance from us to their civil powers. Do we not have any Royal Navy ships in the area, and are there not Royal Marine contingents that could be put quickly to work, with the agreement of the Turkish authorities?
James Cleverly
I will take the ideas that my right hon. Friend put forward very seriously. The initial assessment of need is very much in urban search and rescue, and the UK, along with a number of NATO and non-NATO partners, is putting forward that capability. I suspect medical assistance will be next, but we will continue liaising very closely with the Turkish Government and the United Nations about what is needed on each side of the border.
Anna McMorrin (Cardiff North) (Lab)
My heart goes out to all those who have suffered and continue to suffer in this dreadful earthquake. The loss of humanitarian aid routes to north-west Syria, which went down from four to one in 2020, has had an immeasurable impact on the effective delivery of aid to the area. It has meant virtually no resources and help for those in what was already a dreadful humanitarian situation and who are now coping with the impacts of this truly awful earthquake. How will the Secretary of State ensure that aid gets to the people who need it?
James Cleverly
The hon. Lady makes a very important point, and it is one that I raised in my last bilateral meeting with Martin Griffiths. As she said, this has had a significant detrimental effect on the international community’s ability to provide humanitarian support to some of the neediest people in the world, particularly in winter and in the light of these earthquakes. I can assure her that when I speak with Martin Griffiths later today, this is one of the topics we will discuss.
Mr Tobias Ellwood (Bournemouth East) (Con)
This is a stark reminder of the importance of resilience and our ability to deal with these acute events if they happen to us or to help others. I welcome the Foreign Secretary’s statement. As he knows, the first 72 hours are critical. Military assistance has been mentioned. We have assets in Cyprus, including rotary systems, that could be put to use. Could we offer those to the Turkish authorities in this critical period?
James Cleverly
We have been in close contact with our Turkish counterparts from very early on in this situation. Obviously, we have a very close military relationship through NATO. Turkey has a large and sophisticated armed forces in its own right. What it has asked us for most is in one of the areas where we provide world-class capability, and that is our urban search and rescue teams. As the situation evolves—as I say, sadly, there is a high likelihood that it will deteriorate—we will listen carefully to what further requirements Turkey has and respond in due course.
Ms Anum Qaisar (Airdrie and Shotts) (SNP)
In just a matter of weeks, the holy month of Ramadan begins, when Muslims fast from dawn to dusk, yet Muslims and others in Syria and Turkey are in the middle of harsh weather conditions, with many roads and cities covered in snow and now damaged by this disaster. Does the FCDO plan to work with international partners to organise the provision of hygiene products, including sanitary products, as we know that natural disasters disproportionately impact women and girls? Will the Foreign Secretary join me in commending charities such as Islamic Relief, which has mobilised teams in both Syria and Turkey and since Monday has already raised over £1 million to help those affected?
James Cleverly
I am happy to pay tribute to Islamic Relief and other charities and non-governmental organisations that are active in the region. The hon. Lady is right that, sadly, whether it be natural disaster, conflict or man-made disaster, women and girls always bear the brunt; it is one of the sad truisms of development and humanitarian relief, so she is right to raise the specific needs of women and girls. I am very proud to say that, throughout my time as a Minister and as Secretary of State, the plight of women and girls has been at the heart of our foreign policy and development policy. We will seek to ensure, whether directly or through partners, that we put forward plans to specifically address the needs of women and girls in these incredibly difficult circumstances.
Dean Russell (Watford) (Con)
I have watched, as everyone across the UK and around the world has, with horror and heartbreak the scenes from the earthquake in Syria and Turkey. Whenever a disaster happens, the UK always steps up, and people are so generous in wanting to help. Could my right hon. Friend confirm what steps people in Watford and across the UK can take to donate so that it reaches the frontline and helps those who are currently suffering the unimaginable?
James Cleverly
We have already discussed Islamic Relief, Red Cross and Red Crescent, and I have no doubt that a number of organisations will be putting forward appeals. We recognise that, for many people in the UK, the economic situation is difficult, but I have no doubt that notwithstanding the domestic circumstances, the British people will do what they always do, which is rise to the occasion and support people around the world who are in even greater need than they are.
Jessica Morden (Newport East) (Lab)
Like the constituents of my hon. Friend the Member for Enfield North (Feryal Clark) and others, members of the Kurdish-Turkish community in Newport are desperately worried about family members and friends, and our hearts go out to them. I reiterate to the Secretary of State the need for clear channels of communication to help us make urgent inquiries for constituents, whether it be drop-ins upstairs or other means, and support in-country for UK citizens and dual nationals, as well as the need for us to do everything we can on a humanitarian level.
James Cleverly
I completely recognise the desire of Members of the House to be kept informed and to be able to provide a service to constituents who, quite understandably, will be very worried about friends and loved ones. I will take that on board, and my team will be making a note of what the hon. Member and other Members of the House have said on this.
Anthony Mangnall (Totnes) (Con)
Having spent a considerable amount of time in Turkey during my lifetime, may I share in the comments that the Foreign Secretary has made and say how much I agree with them? I echo calls for the White Helmets to continue to receive funding in the long term. I met them in October last year, and they said that British funding was absolutely key to their continuing their good work.
On the statement, may I ask how many people the Foreign Secretary is intending to deploy from the medical assessment team? May I also commend all the volunteers who have gone from our rapid response unit in the Foreign Office to help in Turkey at such short notice? Following on from the point made by my hon. Friend the Member for Watford (Dean Russell), may I ask that we signpost where and how the British public can give money and aid to people in Turkey? Lastly, will the reporting mechanisms coming out of Turkey be given in real time, so that Members of Parliament can help constituents to find out about loved ones and how to help most effectively?
James Cleverly
On my hon. Friend’s specific question about the size of the medical response team, I do not have that figure at the moment. It is inevitable that the numbers—both, sadly, of fatalities and injuries, and of British experts that we put in to support—will change over time. Indeed, I strongly suspect that the figures I outlined at the Dispatch Box at the start of the statement are now, sadly, already out of date. I completely take the point that he and others have made about the need for accurate, ongoing and timely information, and I will endeavour to make sure that I provide that to all Members of the House.
Kim Johnson (Liverpool, Riverside) (Lab)
I send my thoughts and condolences to all those who have suffered and lost loved ones in the tragedy in Syria and Turkey. This horrific disaster does not discriminate in its victims, and political obstacles must not be allowed to define who receives our support. Can the Secretary of State explain what he is doing to secure humanitarian corridors to ensure all Syrians receive humanitarian aid, and will he respond to appeals for more heavy lifting equipment and fuel to run those machines?
James Cleverly
The hon. Lady is absolutely right that disasters like this do not discriminate, and neither will we. We will work closely with the United Nations. Obviously, we do not have a relationship with the Assad Government in Syria, but notwithstanding that, we will work with those organisations—whether the White Helmets, the United Nations or others—that are on the ground in Syria. Of course, we will also work closely with the Turkish Government in response to that.
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
My thoughts are with my constituents who are so desperately worried about loved ones. I echo the comments made by Members across the House about the need for that timely and accurate information to help Syrian, Kurdish and Turkish nationals living in the UK who have been affected by this. Can the Secretary of State say what representations the UK is making to drive humanitarian access to Syria from Turkey up the international agenda and open new flows of aid to north-west Syria?
James Cleverly
I will be raising this specific subject with Martin Griffiths when I speak to him later this afternoon. Humanitarian access routes have been constrained over recent years, which has caused more suffering, and it is something we will seek to address.
Hilary Benn (Leeds Central) (Lab)
First, given the immense scale of this terrible tragedy and the reports this morning that people are using their mobile phones while trapped under the rubble as they cry for help, do we have the capacity to send a further search and rescue team, because I think it seems, given the scale, that that would certainly assist? Secondly, does the Foreign Secretary expect the Disasters Emergency Committee to issue an appeal?
James Cleverly
On the right hon. Member’s last point, I will certainly look at that and ask my officials to liaise on raising a specific appeal. What future assistance we give will be very much guided by the requests of the Turkish authorities and the feedback of the initial wave of experts that we have provided.
I realise that I failed to fully answer the question from the hon. Member for Liverpool, Riverside (Kim Johnson) about heavy lifting equipment and the fuel for it. Again, we will listen carefully to the requests from the Turkish authorities about that. One of the reasons our USAR team is so valuable is that we have state-of-the-art search and rescue equipment that co-ordinates closely with other equipment that is easier to get on to the ground for those partners who are physically closer to the incident.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
The Foreign Secretary has been really helpful this afternoon, as has our Front-Bench spokesman and everyone. We are not experts, but when I see these pictures on television and hear the voices of children calling for help, the crisis is now. Can we get people, heavy lifting equipment and the right expertise there now—in planes, getting there now—so we can rescue these little children and their families?
James Cleverly
The hon. Gentleman’s desire to help and help quickly is completely understandable, and I can assure him that it is shared by everyone across the House and across Government. As I say, first thing yesterday morning, I had an exchange of communications with my Turkish counterpart. Our urban search and rescue team were mobilised and convened yesterday, and the assessment is that they will be on the ground and operational by today. This is a very swift response. I recognise, however, that the challenge will be enduring. Of course, the feedback from them about what else we can do, and do quickly, will be incredibly important, and we will do that in close co-ordination with our international friends and partners.
Chris Stephens (Glasgow South West) (SNP)
I thank the Foreign Secretary for his statement. This disaster has been keenly felt by the Kurdish community across these islands, and he will be aware that this region in particular has been the source of conflict between Syrian and Kurdish forces. Could he say a bit more about what the Government are doing to liaise with Kurdish charities and the Kurdish community—I am thinking, for example, of the Kurdish Red Crescent charity—to make sure that the Kurdish population get the support they need and that the aid goes to help the Kurdish people?
James Cleverly
The hon. Member is right: the people of this region have suffered more than enough. Sadly, this natural disaster will amplify the suffering of the man-made disaster that we have seen in that part of Syria and the ripple effect that has had into that part of Turkey. I assure him that we will work with as wide a range of international partners as possible to ensure that no community is in any way disadvantaged in terms of our support. The hon. Member for Liverpool, Riverside said that this tragedy has not discriminated and, as I say, nor will we.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
I echo the words of condolence by the Foreign Secretary—the numbers of those who have died and been injured are immeasurable—and I send my condolences to everyone in that area. Scammers may use social media information to contact individuals in the UK with links to the impacted regions, using their fears for loved ones to request money transfers. What measures are the UK Government considering to ensure that such scams are highlighted and families are protected?
James Cleverly
Sadly—the hon. Lady makes an incredibly important point—there will always be vultures who will seek to make money through the tragedy of others and the concern of their friends and loved ones. My strong advice is the same as we would give in all circumstances, which is to be very suspicious of unsolicited communications. It is far better to go to well-established avenues of support. They are often, in circumstances such as this, the most effective on the ground anyway. We urge people not to let their understandable desire to give support quickly blind them to the fact that there are those who will seek to take advantage of their good will. She is absolutely right to raise the issue.
Jim Shannon (Strangford) (DUP)
I also very much thank the Foreign Secretary for his positive answers and for the obvious Government compassion for those who have suffered much due to the earthquake. I add my thoughts and prayers for all those who have lost loved ones. The earthquake has affected large areas of northern Syria, including the Kurdish region, where many Yazidis are still attempting to recover after the Daesh genocide. Will the UK aid sent to relieve the suffering caused by the earthquake also be sent to minority communities, rather than just to the large population centres? They all need help.
James Cleverly
The hon. Gentleman speaks regularly and with great passion about the need to be conscious of minority groups, especially religious and ethnic minority groups. He is absolutely right to do so. I assure him that I will in turn seek assurances from my officials that our support is reaching everyone that it needs to, and not just those who perhaps have the best pre-established routes for humanitarian support.
Digital Pound
(1 year, 9 months ago)
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The Economic Secretary to the Treasury (Andrew Griffith)
Before I give my statement, may I add my voice to those in the previous statement on the Turkey and Syria earthquake? My heart goes out to all the people affected by that.
With permission, Mr Speaker, I will make a statement about the steps the Government are taking to consider the future role of a potential digital pound. His Majesty’s Treasury is today publishing and laying in Parliament a consultation paper jointly with the Bank of England, “The digital pound: a new form of money for households and businesses?”. This paper aims to open a national conversation about the future of money in the United Kingdom.
The way money is used in the UK is changing, as it is across the world. Cash will remain important, but banknotes, issued by the Bank of England, are being used less frequently by households and businesses. New technologies are allowing for the emergence of new forms of digital money, and new ways and devices to pay for goods and services with it. International developments have the potential to affect the UK domestically and our position as a global leader in finance. Ensuring that public trust in money remains high, and that forms of money and payments meet the evolving needs of individuals and businesses, are fundamental responsibilities of the Government on which Parliament must have its say.
We are determined that the UK should remain at the forefront of innovation in money, payments and financial services. This is part of the Government’s vision for a technologically advanced, sustainable and open financial services sector—a sector that is globally competitive and acts in the interests of communities and citizens, creating jobs, supporting businesses and powering growth across all parts of the UK.
A UK digital pound would be a new form of digital money for use by households and businesses for their everyday payment needs. The digital pound would be a new form of sterling, similar to a digital banknote and issued by the Bank of England. For people and businesses, the experience of using a digital pound would be very similar to using other forms of digital money. For example, it would be accessible online via smartphones and computers, as well as through cards that could be used at point-of-sale terminals.
I want to be clear that the Government are legislating to protect access to cash and ensuring that the UK’s cash infrastructure remains sustainable long term. Therefore, as part of the wider landscape of money and payments, the digital pound would sit alongside, and not replace, cash —a digital counterpart to familiar, trusted banknotes and coins, and subject to rigorous standards of privacy and data protection. It would be denominated in sterling, and digital pounds would always have the same value as, and be interchangeable with, the equivalent physical banknote. Unlike cryptoassets and stable coins, the digital pound would be a central bank digital currency; sterling currency issued by the Bank of England, not the private sector.
A digital pound would help to ensure that money issued by the central bank—which is currently available only as cash—remains available and useful in an ever more digital economy. Knowing that there is an ultimate backstop to convert our money—money in our bank or e-money account—into cash or a CBDC at any time is the foundation of confidence in all forms of money, both day to day and in a crisis.
As cash is less and less used, the importance of a digital pound to provide that constant access to Bank of England-issued money could rise. It will safeguard the UK’s monetary sovereignty in a changing global financial system. It could provide a platform for private sector innovation, promoting further choice, competition, efficiency and innovation in payments.
On the basis of our work to date, the Bank of England and HM Treasury judge that it is likely that a digital pound will be needed. It is too early to commit to build the infrastructure for one, but we are convinced that further preparatory work is justified. A future digital pound would be a major piece of national infrastructure, which would take several years to complete. It would need to be safe and secure, and the legal basis for the digital pound would be determined alongside consideration of its design. Its launch would require deep public trust in this new form of money—trust that their money would remain safe, accessible and private.
The journey towards issuing any digital pound, therefore, necessarily involves an open national conversation about the future of our money, in parallel with important detailed technical consideration by experts across UK public authorities, and be informed by evolving market trends. The consultation we have published today will be open for four months. It opens that conversation and seeks to build the foundation of public trust. It sets out our vision of why a digital pound may be needed alongside our vision of how a digital pound could work, should we decide to issue one.
Like a physical banknote, no interest would be paid on the digital pound. Privacy, user control and use of data in line with UK data protection laws are of paramount importance. So I want to reassure the House that our vision for a digital pound would have the same privacy protections as bank accounts, debit cards or cheques. Neither the Government nor the Bank would have access to digital pound users’ personal data, except for law enforcement agencies under limited circumstances, prescribed by Parliament in law and on the same basis as applies to other digital payments. The digital pound would not be anonymous because the ability to identify and verify users is needed to prevent financial crime.
Drawing on the feedback we receive in the consultation, we are committed to move to the next phase of work. That will inform a future decision on whether to progress to building and launching a digital pound. I assure hon. and right hon. Members that a further update to Parliament will be made prior to that. It will also inform our current proposal for its form and function, decisions on which will be taken forward in the next stage. At this exciting time of change in money and payments, this consultation is a vital step in positioning the UK to act decisively, should we choose to introduce a digital pound.
Abena Oppong-Asare (Erith and Thamesmead) (Lab)
I also want to put on record that my thoughts and prayers are with those affected by the earthquake in Turkey and Syria.
Labour welcomes that the Bank of England will be exploring the potential benefits of a central bank digital currency, or CBDC. With the rise of digital payments, and with the European Union, the US and China all exploring the use of CBDCs, we recognise the growing case for a state-backed digital pound to protect the integrity and sovereignty of the Bank of England and the UK’s financial and monetary system.
We fully support the Bank of England’s work on this area, but there are important questions that must be addressed before we decide whether the potential benefits of implementing a new payments infrastructure outweigh the risks. First, how will the Government ensure a digital pound guarantees the privacy of the public? Will people be able to freely access a digital pound from trusted institutions such as the Post Office, and not be forced to pay or hand over their data to tech companies? The take-up of a future digital pound will depend on public trust. People must know that their privacy will be protected.
Secondly, what work are the Government going to do to ensure that the potential CBDC does not accelerate financial exclusion? Millions of people are already cut off from the goods and services they need because of the decline of free access to cash. We need a cast-iron guarantee that the CBDC will not distract from work to promote digital inclusion or undermine protections for cash infrastructure. A digital pound must never replace physical money. We also know that around 5 million people are put off by digital banks. How will the Government ensure that those individuals are included in the Government’s joint consultation with the Bank of England?
The Economic Affairs Committee in the other place and officials at the Bank of England itself have warned that a digital pound could pose a risk to households and companies if they all withdrew money from commercial banks at once to put it into a Government-backed digital pound. What work will the Government be doing to put measures in place to protect against that?
I now turn to some of the inconsistencies between today’s announcement and the Government’s wider approach to cryptocurrencies. As the Bank of England made clear in its statement yesterday, one of the potential benefits of a state-backed digital pound is that it would have intrinsic value and not be volatile, unlike unbacked cryptoassets. That approach is welcome and contrasts with the Conservative Government’s promotion of the crypto wild west. I know that the current Prime Minister likes to see himself as a bit of a Californian tech bro, but in reality this is naive. This out-of-touch Government continue to waste taxpayers’ money and time on an NFT gimmick, and to promote dodgy stablecoins, despite millions of UK consumers’ savings being put at risk by scams and scandals in the crypto sector, and by the collapse in the value of cryptocurrencies.
I hope today’s announcement marks a break with this disastrous approach. The Government should be focusing on returning the economy to growth and dealing with the cost of living crisis, not chasing crypto fantasies. Only Labour has a serious plan for growth. A Labour Government will attract fintech companies to the UK by safely harnessing the potential of new technologies and through our ambition to make Britain the home-grown start-up hub of the world.
Andrew Griffith
It is always a pleasure to hear from the hon. Lady, in what I think was a welcome from His Majesty’s Opposition for the joint consultation between the Treasury and the Bank of England. She rightly raised issues that I assure her are addressed in the consultation, about which we would like to hear. They include how to ensure privacy, which will be embedded in the design. It is important that we come forward with, potentially, a digital pound precisely to avoid this space being colonised solely by, for example, private large tech companies.
I can assure the hon. Lady that this issue will not in any way distract from our important work on financial inclusion. Cash will indeed continue, and no part of the consultation talks about in any way replacing it. Rather, this is about ensuring access to that currency, so that potentially it will no longer be gated behind existing financial institutions; it could be something that new participants make available to citizens without some of the constraints that are sometimes put on the financial services system. The consultation also addresses the risk, which the hon. Lady rightly raised, should everybody withdraw their money all at once to invest in this digital currency.
However, the hon. Lady’s comments were a speech of two halves, and the second half was as wrong as it was unnecessary. This Government have never promoted a crypto wild west. The current Financial Services and Markets Bill contains more measures to protect consumers. The risks that consumers face have always been extremely clear, but when it came to financial promotions, one of the biggest challenges we faced was the Mayor of London and Transport for London, which gained a reputation for accepting particular adverts from the crypto industry.
Harriett Baldwin (West Worcestershire) (Con)
The Treasury Committee has opened an inquiry into crypto, and this morning we had a session at which the chief executives of the major high street banks appeared before us. The real question we wanted to ask them was why they have been paying our constituents so little on their savings since the Bank of England started to increase rates. Is not the logical conclusion of the consultation process that my hon. Friend has opened today that each of us should be able to hold a digital currency account at the Bank of England, and to earn the Bank rate on our holdings and disintermediate the entire banking sector?
Andrew Griffith
I thank my hon. Friend for her, as ever, wise points, as well as her wise chairmanship of the Treasury Committee. It is absolutely imperative that savers get the interest rates that they are entitled to. I commend my colleagues in National Savings and Investments, who have significantly increased the rates offered to savers. Of course, she also raises one potential opportunity, in that, although a digital pound would sit alongside our existing financial services infrastructure, it potentially offers consumers and citizens a different choice, which could involve the ability to hold currency through intermediaries other than the current banks.
Stewart Hosie (Dundee East) (SNP)
When I was in the US with the Treasury Committee some years ago, we were given two choices: either 95% of all crypto was fraud and froth, or 100% of all crypto was fraud and froth. Clearly, a central bank-backed asset is a different beast; but nevertheless, I have three questions. First, what problem is this idea designed to solve? Secondly, what happens if this digital asset becomes volatile? If it stops behaving like a currency and starts to behave like a bond or equity, or debt, or something speculative like a non-fungible token, how will it be regulated? Thirdly, the Minister said the digital pound, in this new form, will always be worth the same as a traditional pound. What if the market determines that that is not true and there is a divergence between the fiat currency value and this new non-fungible, Bank-backed token? Who picks up the tab when people potentially start to lose money?
Andrew Griffith
The right hon. Gentleman runs the risk, if I may say so, of confusing a particular attribute of what is a very large sector. This is not a cryptoasset; the digital pound would not have those speculative attributes. The fact that £10 in digital pounds would be fully exchangeable for £10 in His Majesty’s finest banknotes would prevent that divergence—if it did not, that would present the right hon. Gentleman with a profitable opportunity that he could use to supplement his other activities. He raises other questions, which are rightly the subject of the consultation. I extend the invitation to all parts of the United Kingdom, and we look forward to his constituents and compatriots being able to contribute.
Richard Fuller (North East Bedfordshire) (Con)
If I was the Minister, I do not think I would not be quite as confident in my response to the SNP Opposition spokesman: that a digital pound will not affect the pound in our pocket. However, I broadly welcome the consultation, and I am very pleased that this Minister will be overseeing it. He will be aware that during covid we went through a period of extreme authoritarianism in this country. He will also be aware of some of the risks from central bank digital currencies to individual financial freedoms—he enunciated some of them in his statement. At the end of the consultation, will the Minister therefore also look to draft a financial liberty charter that this House can vote on, to protect the freedoms that we experience with currencies today?
Andrew Griffith
My hon. Friend and, indeed, predecessor highlights one of the potential concerns: one is either instinctively too early or too late in bringing matters to this House. Although this is a long-term project—the consultation makes it clear that a digital pound would not be introduced before the second half of this decade—it is right that we start conversations on precisely the important matters that influence the liberty of every one of us at this moment in time. So while I will eschew his choice of words, I assure him that liberty remains paramount, which is one reason why it is very clear that any digital pound should not replace, but should sit aside, the anonymity that is currently offered by physical cash.
Sir Stephen Timms (East Ham) (Lab)
I welcome the Minister’s statement. Firms setting up to deliver blockchain-based financial services in the UK complain that getting a licence here takes far too long because the Financial Conduct Authority does not have the capacity to process the applications. A number of very successful firms have been forced to leave the UK altogether as a result. What plans does the Minister have, as part of this work, to tackle that particular problem?
Andrew Griffith
The right hon. Gentleman might usefully and productively have a conversation with his own Labour Front Benchers, who only a moment ago were accusing us of moving too fast. The two points show that the financial regulators have in this particular case got the balance about right in their approach to cryptoassets. He will also know that last week we published a proposal for the regulation of cryptoassets more generally. This is not a cryptoasset; this is a digital pound. He makes a point that others have also made to me about the speed with which our financial regulators reach their conclusion. I understand that point. Whatever conclusion they reach, it would be desirable that they do so in a way that is as effective as possible and gives as much certainty as possible. It is one reason why there are powers in the Financial Services and Markets Bill, which he will know is going through the other place at the moment, that will compel the financial regulators to publish more of their operating statistics, so that he and I will be able to see how they discharge their duty to regulate in an effective manner.
Alun Cairns (Vale of Glamorgan) (Con)
Digital currencies in a whole range of formats are part of a fast-moving and dynamic sector of an emerging economy. To date, the regulators have struggled to keep up with the skills and capacity to bring about appropriate and effective regulation of the sector. What plans does my hon. Friend have to develop capacity within the regulators to give confidence in the marketplace that the digital pound, as well as other digital currencies, will have confidence among users?
Andrew Griffith
My right hon. Friend makes an important point. To govern is to choose and we ask our regulators to make choices to prioritise. It is one reason why we are looking at reform of long-standing areas, such as the 40-year-old Consumer Credit Act 1974, to see if we can modernise it and make it more fit for purpose, deliver better customer outcomes, and potentially free up the regulatory environment so they can make choices to focus on the new and emerging threats and opportunities that this domain represents.
Sir Chris Bryant (Rhondda) (Lab)
Further to the question from the Chair of the Treasury Committee, the hon. Member for West Worcestershire (Harriett Baldwin), can the Minister be a bit clearer? Will this be an interest-paying currency, yes or no?
Danny Kruger (Devizes) (Con)
I have two concerns. The first is on privacy, which other Members have mentioned. The proposal is that the Bank of England can become your bank. The Minister says the currency will be private but not anonymous, but the reality is that in certain circumstances it could be neither. It should be possible for authorities to observe the transactions of any citizen if they have cause to do so. Will he confirm that? My second anxiety is on the implications for cash. Will the money used through this new digital mechanism require cash to be withdrawn from circulation in exact proportion? If not, his proposal to print new money will be a sort of cryptocurrency quantitative easing with inflationary implications. If cash will be withdrawn in proportion as the digital pound is issued, we are talking about the end of cash are we not? Progressively, the digital coin will replace the use of cash.
Andrew Griffith
I accept that the Command Paper has just been published, but when my hon. Friend has the opportunity, he will be able to look at the detail of the operation of such a scheme, which will reveal that there will be platform intermediaries. People will not have a bank account directly with the Bank of England, except in very narrow circumstances. I understand the concerns, and it is right that we debate the balance between freedoms and our duty to protect citizens from fraud and other things that this House, from time to time, will decide justify the piercing of that veil of privacy.
I want to reassure my hon. Friend on cash. By design, this proposal will not replace cash. From a monetary policy perspective—although that is something, as with all these questions, that Members may respond to during the consultation—it is envisaged that it certainly will not increase money supply, and the one-for-one nature I talked about earlier is important in that regard. To be clear to my hon. Friend, the arbiter of that decision will be individual citizens making the choice as to how they wish to use their money—how they wish to spend it and how they wish to store it.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)
The crypto and digital assets all-party parliamentary group, which I chair, greatly welcomes the consultation and the progress being made by the Minister. We are hopeful that a digital pound could enable faster payments and lower cost payments to improve inclusion across the UK. The other issue I wish to raise is international interoperability, in particular with colleagues across the Commonwealth. Will the Minister look at what progress can be made in the realm of collaboration with Commonwealth partners?
Andrew Griffith
I thank the hon. Lady for her question and for her work as chair of the crypto and digital assets APPG. I hope it has been a productive number of weeks with the consultation paper on the regulation of cryptoassets and today’s joint consultation paper with the Treasury. The APPG does good work in educating and providing opportunities for Members of this House to engage with this rapidly growing area, which is important to financial inclusion and ensuring that we design in financial inclusion at the start.
The hon. Lady makes a very important point about international interoperability. About 90% of all member countries of the Bank for International Settlements surveyed are looking at doing something similar, so it is right that we engage. We have a strong position of leadership in the financial community, as well as an adherence to the highest quality regulatory standards. That is absolutely in keeping with what we are trying to achieve today.
Anna Firth (Southend West) (Con)
I absolutely welcome the Minister’s statement and the commitment from him and the Government to keep the UK at the forefront of innovation in financial services. I heard his answer to the hon. Member for Rhondda (Sir Chris Bryant) that this will be a zero interest-bearing currency, but surely in the fullness of time we cannot have a situation where banks deposit their money at the Bank of England and get the full 4% base rate, while retail consumers and individuals get zero. If the Minister agrees with that, is this not a way to stop the consumer being ripped off by the big four and getting only 0.83% on their interest, while the banks are getting 4% from the Bank of England?
Andrew Griffith
I thank my hon. Friend for her endorsement of today’s proposals. She should know that I am as concerned as she is about the fair deal for savers in general. As interest rates have increased, it is absolutely appropriate that savers benefit. It is a virtuous activity, and one that we on the Conservative Benches are very keen to support. The issue of central banks paying other banks interest on deposits is complex. There is a matrix of regulatory advantages and disadvantages from the status of being a bank, and I would be very happy to engage with her more to understand that.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
I do hope that one day the Minister will come to the Durness highland games in north-west Sutherland. He will be very welcome, and he will see just how much money is taken out of the cash machine in Durness—by the way, what a battle we had to get it put back when it was removed! If he goes along the north coast to Wick, he will see how much money is donated to the Wick gala: it is gathered in small shrimp nets and buckets. Tapping an iPhone on a shrimp net simply does not work.
My point is obvious: we rely on cash. In my vast and remote constituency, access to cash is a real challenge if people have to travel huge distances. May I have an assurance that when the Treasury looks at safeguarding access to cash, it will take into account the challenges facing constituencies such as mine?
Andrew Griffith
It is indeed my aspiration to visit the hon. Gentleman’s expansive and rural constituency one day. Let me reassure him and the House that this long-term project will in no way take my or my officials’ time and attention away from any of the endeavours that have been put in place to promote access to cash. There are new powers in the Financial Services and Markets Bill, there are obligations on the regulators, and we are working with the banking industry and with Link.
As a Member who represents a rural constituency, albeit somewhat south of the hon. Gentleman’s, I fully understand the importance of access to cash for communities, for people who may be disadvantaged and use cash to budget, and for our increasingly elderly population. That focus remains, and it is not diminished by this longer-term project. As hon. Members, particularly Opposition Members, have highlighted, we have the opportunity to design in financial inclusion and to ensure that no matter who someone banks with, they can benefit from the UK digital pound.
Aaron Bell (Newcastle-under-Lyme) (Con)
I thank the Economic Secretary for his statement and for the consultation. Perhaps it is apt that it is being launched on the day we have a new Department for Science, Innovation and Technology. That shows that this Government are taking the long view, as well as managing the short-term pressures that we are going through.
The Economic Secretary mentioned public trust, which will be crucial. In launching the digital pound, what measures will the Government be willing to take to safeguard people against the risk of scams? As we have seen with cryptocurrencies, with bank cards and with online banking, people are vulnerable to scams when things are new. What measures do the Government envisage to ensure that launching a digital pound does not put people at risk?
Andrew Griffith
My hon. Friend makes two important points. The first is about the long-term nature of this Government, whose focus on delivery extends to the Prime Minister’s organisation of Departments to ensure that they deliver the outcomes that the British people expect.
My hon. Friend also highlights the importance of financial education. I can commit that, as part of the national dialogue on this important issue, we will give thought to how we ensure that we educate our citizens to prevent them from falling prey to the terrible financial scams that people are trying to perpetrate in the financial system today.
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
I declare non-pecuniary interests as chair of the all-party parliamentary group on blockchain and as a vice-chair of the crypto and digital assets all-party parliamentary group. I am glad to see the co-chair, the right hon. Member for East Ham (Sir Stephen Timms), in the Chamber.
The Minister will know that I led the first debate in this House on cryptoasset regulation; I think he was the Minister who responded. Central bank digital currencies played a major part in my speech, so I welcome the opportunity for a consultation. For all the bad press that cryptoassets have—alas, justifiably—received, there exists an undeniable opportunity, as I am sure he will appreciate, for CBDCs to create an accessible, reliable store of value using the principles of distributed ledger technology. Will he elaborate on the aspects of financial inclusion he hopes to bring forward to ensure equal access to the CBDC for the most digitally excluded of our constituents, not just for the crypto bros?
Andrew Griffith
I thank the hon. Member for his contributions to the ongoing debate. I have said that there is an opportunity for us to design in financial inclusion; that is one of the advantages of consulting early and of building a consensus across the House on a subject as important as our nation’s currency. He is quite right that it needs to be accessible and reliable as a store of value; the opportunity for it to sit side by side with cash and with the existing bank and digital payments system should give us the ability to drive financial inclusion outcomes.
Antony Higginbotham (Burnley) (Con)
I welcome the Minister’s statement and the foresight that he and the Treasury are showing in getting the consultation out early. What assessment has the Treasury made of the potential impact on our small and medium-sized enterprises—particularly import and export SMEs, which are big users of foreign currency?
Andrew Griffith
As my hon. Friend knows, one of the points of friction—one of the costs—is the exchange of currency. It has come down greatly over time, but is still often measured in the percentage points. A true central bank-issued digital currency—a digital pound—that could be much more readily converted without the current number of intermediaries could be a real opportunity for small and medium-sized enterprises engaged in that all-important activity to our great nation: exporting our goods and services.
Jim Shannon (Strangford) (DUP)
I thank the Minister for his statement. I and many of my constituents, like those of other hon. Members, are still committed to using cash. How will the Minister ensure he sends a message that today’s announcement does not mean that we are moving to a cashless society? How will he secure access to cash? It is already at risk in rural areas as a result of banks’ continuing withdrawal and centralisation, which is leaving people with no option but to operate digitally even when they feel vulnerable and feel that their finances are at risk.
Andrew Griffith
Today is not about access to cash; it is about the long-term plans for a digital pound. However, the hon. Member makes a very well-understood point. We are legislating in the Financial Services and Markets Bill to ensure that, for the first time in this country since the Celts minted the original currency, communities will have a statutory right of access not just to withdraw cash, but to deposit it, because it is the ability to deposit that drives the desire of retailers and others to take cash. We want cash to continue to circulate in our society, and we are making provision for that in the Bill, which I hope will soon be on the statute book.
Carol Monaghan (Glasgow North West) (SNP)
I have a couple of questions about safeguarding. The Minister said in his statement that the Government will not
“have access to digital pound users’ personal data, except…under limited circumstances”.
Can he give me an assurance that those circumstances will not include Government agencies aggressively targeting vulnerable individuals, for whatever reason?
Several hon. Members have mentioned cash. We know that cash can give people financial independence, particularly if they are in a coercive relationship: not having somebody see every single spending decision they make gives them a slight amount of independence. What safeguards on the digital pound will be put in place to ensure that people still have that protection?
Andrew Griffith
I thank the hon. Member for those points; her point about safeguards against coercive control in particular is well made. This is where something like a digital pound can have utility: unlike existing banking relationships, but like cash, it is not subject to the caprices of a particular commercial entity that may apply its own policies. I commend our payment services industry—the UK is blessed with a strong, healthy and competitive banking sector—but for the safeguards that the hon. Member seeks, the digital pound would be additive to the current situation.
Mr Deputy Speaker (Mr Nigel Evans)
I thank the Minister for his statement and for responding to hon. Members’ questions.
Points of Order
(1 year, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate
Munira Wilson (Twickenham) (LD)
On a point of order, Mr Deputy Speaker. When the Government abandoned their Schools Bill, several schools in my constituency approached me to ask whether the Government still stood by their arbitrary target of seeing all schools join multi-academy trusts by 2030. On 11 January, I tabled a named-day written question putting that to the Department for Education. The response is now three weeks late, although I tabled a follow-up question on 25 January. May I ask you, Mr Deputy Speaker, what more I can do to secure an answer to my question so that maintained schools in my constituency, which are already doing a great deal of work on this issue, can have certainty about whether they need to prepare to join a multi-academy trust?
Mr Deputy Speaker (Mr Nigel Evans)
I thank the hon. Lady for her point of order and for giving me notice of it. She is right: questions should be answered in a timely way, and I hope those on the Treasury Bench have heard what she said and will contact the Department for Education so that that can be properly facilitated. However, she may wish to contact the Procedure Committee, which monitors the performance of Departments in responding to parliamentary questions.
Bill Presented
Social Security (Additional Payments) (No. 2) Bill
Presentation and First Reading (Standing Order No. 57)
Secretary Mel Stride, supported by the Prime Minister, the Chancellor of the Exchequer, Secretary Grant Shapps, Mims Davies and Dr Andrew Murrison presented a Bill to make provision about additional payments to recipients of means-tested benefits, tax credits and disability benefits.
Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 244) with explanatory notes (Bill 244-EN).
Seizure of Russian State Assets and Support for Ukraine
Tuesday 7th February 2023
(1 year, 9 months ago)
Commons ChamberRead Full debate Seizure of Russian State Assets and Support for Ukraine Bill 2022-23 View all Seizure of Russian State Assets and Support for Ukraine Bill 2022-23 Debates Read Hansard Text Watch Debate
A Ten Minute Rule Bill is a First Reading of a Private Members Bill, but with the sponsor permitted to make a ten minute speech outlining the reasons for the proposed legislation.
There is little chance of the Bill proceeding further unless there is unanimous consent for the Bill or the Government elects to support the Bill directly.
For more information see: Ten Minute Bills
This information is provided by Parallel Parliament and does not comprise part of the offical record
Sir Chris Bryant (Rhondda) (Lab)
I beg to move,
That leave be given to bring in a Bill to require the Secretary of State to lay before Parliament proposals for the seizure of Russian state assets to provide support for Ukraine; and for connected purposes.
Maryinka in Donetsk, about 50 miles south-west of Bakhmut, used to have a beautiful, majestic basilica with a golden dome, named for our Lady of Kazan. It used to have a successful tyre factory. It used to have a population of 10,000, whose ancestors were Ukrainian Cossacks, Greeks and exiled Poles. It managed to survive sustained attack by Russian paramilitaries in 2014 and 2015. Today, however, it is a place of icy rubble, shelled-out apartment blocks, burnt trees, waterlogged trenches and machine gun posts, all under constant Russian bombardment. Not a single building remains standing. It has been pulverised, literally reduced to dust—obliterated—and yet, miraculously, Ukrainian defences hold on.
Maryinka is not alone. There is Bucha, and there is Mariupol. In Soledar, the junior and senior schools are reduced to shells. In Bakhmut, every single house along the main arterial road has become a crater. In Dnipro, an apartment block that was once home to 1,700 people has been destroyed. In Irpin, Yana and Serhiy Psariova’s 10th-floor two-bed apartment is a blackened shell, its roof ripped clean off and all its contents incinerated.
Ukraine is truly suffering. Up until 15 January 2023, since the second round of the invasion last year, the Office of the United Nations High Commissioner for Human Rights recorded 18,358 civilian casualties: 7,031 people killed and 11,327 injured, including 177 girls and 221 young boys. The UNHCR reckoned in September last year that 12.3 million people had left Ukraine and 7 million had been displaced internally. I think we all agree that Ukraine must win, but she must also be allowed to rebuild. By some miracle, some reconstruction is already happening—United24, for instance, is trying to raise £17 million to rebuild 18 apartment blocks in Irpin, Borodianka, Hostomel, Buzove and Mila to rehouse 4,237 people, and has raised £15.5 million so far—but this is not even the tip of the tip of the iceberg.
On 9 September 2022, a joint statement from the World Bank, the European Commission and the Government of Ukraine estimated that the current cost of reconstruction and recovery in Ukraine was $349 billion. In December the World Bank’s vice-president, Anna Bjerde, told the Austrian newspaper Die Presse that it was now closer to €500 billion to €600 billion, or $525 billion to $630 billion; and the figure is rising. Ukraine estimates that Russia has caused $1 trillion-worth of damage since the start of the full-scale invasion last February, and that is not even allowing for the costs in Crimea and parts of Donetsk and Luhansk, which were invaded in 2014. It estimates that 150,000 residential buildings, 1,500 schools and 20,000 km of roads have been destroyed.
Someone has to pay, and there are only three options. First, there is Ukraine herself, but her economy is projected to be 25% smaller this year than last. Secondly, there are her allies. The United States has committed tranches of $40 billion and $12.3 billion, and a further amount is coming soon. We in the UK have set aside, I think, £3.4 billion, and so far the European Union has found roughly €50 billion. Individuals have been generous too: German families gave €5.7 billion last year. There are plans for a donors’ conference to take place soon, hosted by the UK, and I hope it will be very successful.
Thirdly, there is Russia’s own debt to Ukraine. Russia is truly a great nation, with a phenomenal history and culture and extraordinary people, but this is a war of aggression, and I hope that individuals—including those at the very top of the army and of the Government—will face justice in the Ukrainian courts or at an international war crimes tribunal. My Bill simply requires the British Government to present plans to seize the assets belonging to the Russian Federation which are already frozen in the UK because of the sanctions we have imposed, and allocate them to Ukraine and the Ukrainian people.
I can, of course, hear objections. What about the international rule of law? Yes, on the whole it is not a good idea for Governments to seize others’ assets. That is the kind of thing we would expect Vladimir Vladimirovich Putin to do. The right to property is fundamental to the rule of law. However, it is never absolute: the law reserves the right to fine and to deprive people of ill-gotten gains in certain circumstances. Moreover, that argument would apply more clearly to the seizure of individuals’ assets—the assets of the Russian oligarchs who obtained their money through their crony relationship with Putin or through criminality—but I am not talking about those; I am talking only about Russian state assets.
So what about sovereign assets, I hear you ask. Are they not normally protected by the concept of sovereign immunity? Yes, but very few countries now consider that to be an absolute immunity, and there have been many exceptions, for instance to meet damages awarded by international courts and arbitral tribunals. The UK’s State Immunity Act 1978 expressly restricts sovereign immunity. I would argue that Russia’s continuing refusal to comply with international human rights law by attacking civilian housing and infrastructure, and its wilful refusal to follow orders of the International Court of Justice and the United Nations General Assembly, are ample grounds for the creation of such an exemption.
What about the possibility of Russia’s seizing UK state assets in retaliation? Well, I very much doubt that we have any state assets in Russia— I certainly hope we do not—and it is time that UK businesses, including Unilever, BP and Infosys, completely withdrew from Russia. What about the possibility of sovereign wealth funds of other countries deciding to divert their assets from the UK for fear that we should seize them, if we were to proceed in this manner in relation to Russia? Well, the only precedent that we are setting here is that if a state invades another self-governing state and thereby wages a war of aggression against it, we shall not just freeze but seize its assets. We would all worry if we thought that another state was contemplating such action, and the very fact of our doing this might well make authoritarian regimes pause before going down such a dangerous route. I would therefore argue that it is good law, not bad law, to take this action.
But here is the main point. This is a political decision, not a legal one. Nearly $350 billion of Russian Central Bank reserves have been frozen by democratic countries around the world, and £26 billion of that is frozen in the United Kingdom. Canada, Italy, the European Union and the United States are all considering action. It is the very least we owe the people of Ukraine. Russia has forfeited its rights to these assets. It owes Ukraine far more than money; it owes it blood.
This Bill has the support of the Chairs of the Defence and Foreign Affairs Committees, a majority of members of the Foreign Affairs Committee, the former leader of the Conservative party, members of the SNP, the Liberals and the Labour party, including the hon. Member for Bermondsey and Old Southwark (Neil Coyle), my hon. Friends the Members for Warwick and Leamington (Matt Western), for Nottingham East (Nadia Whittome), for Sheffield Central (Paul Blomfield) and for Rochdale (Tony Lloyd), the hon. Members for East Worthing and Shoreham (Tim Loughton), for Strangford (Jim Shannon), for Witney (Robert Courts) and for Crawley (Henry Smith), my hon. Friends the Members for Blackley and Broughton (Graham Stringer) and for Wallasey (Dame Angela Eagle) and the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry). Even more importantly, the Ukrainian ambassador has asked me to say that he and his nation support this Bill.
I am not naive. I would love the Government to take up the Bill, give it time and get it on the statute book by the end of this Session, but I know that Governments just do not work like that. They do not like doing that kind of thing. I note, however, that the Security Minister indicated yesterday that the Government were looking at this issue with their allies and that the Defence Secretary has said that if we cannot do this, he wants to know why. I have spoken to the Chancellor and the Justice Secretary about it, and I hope that if the House unanimously agrees that the Bill can proceed today, the Government will hear loud and clear that we think now is the time to act.
I will end with some verses:
“Drop everything and run away
leave your house, your cellar with apricot jam jars
and pink chrysanthemums on the terrace
shoot your dogs, so they don’t suffer
abandon this land, just go
he says: don’t talk nonsense, we throw dirt on coffins daily
he says: everything will be fine, salvation will come soon
he says: the humanitarian aid is on the way.”
My question is: is it?
Mr Deputy Speaker (Mr Nigel Evans)
This would be the time for anyone who wishes to oppose the 10-minute rule Bill to indicate that. I have had no such notification and I see none.
Question put and agreed to.
Ordered,
That Sir Chris Bryant, Sir Iain Duncan Smith, Dame Margaret Hodge, Liam Byrne, Sir Robert Buckland, Alicia Kearns, Layla Moran, Joanna Cherry, Colum Eastwood, Stella Creasy, Chris Grayling and Mr Tobias Ellwood present the Bill.
Sir Chris Bryant accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 24 February, and to be printed (Bill 245).
Seafarers’ Wages Bill [Lords] (Programme) (No. 2)
Ordered,
That the Order of 19 December 2022 (Seafarers’ Wages Bill [Lords]: Programme) be varied as follows:
(1) Paragraphs 4 and 5 of the Order shall be omitted.
(2) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion two hours after the commencement of proceedings on the Motion for this Order.
(3) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion three hours after the commencement of proceedings on the Motion for this Order.—(Mr Richard Holden.)
Seafarers’ Wages Bill [Lords]
(1 year, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
16:10 - The House divided: - Ayes: 215 / Noes: 274 - Question accordingly negatived.
16:24 - The House divided: - Ayes: 210 / Noes: 278 - Question accordingly negatived.
16:36 - The House divided: - Ayes: 213 / Noes: 285 - Question accordingly negatived.
The Parliamentary Under-Secretary of State for Transport (Mr Richard Holden)
I beg to move, That the clause be read a Second time.
Mr Speaker
With this it will be convenient to discuss the following:
New clause 2—Implementation and monitoring—
‘(1) Within six months of this Act being passed, the Secretary of State must publish a report on the implementation of, and monitoring of the effects of, this Act.
(2) The report must include—
(a) an assessment of the impact of this Act on—
(i) roster patterns,
(ii) pensions, and
(iii) wages of seafarers;
(b) a statement as to whether further legislation will be introduced by the Government as a result of the findings of the assessment under paragraph (a);
(c) a strategy for engaging with trade unions for the purposes of monitoring the implementation of this Act, including in reference to conventions of the International Labour Conference;
(d) a strategy for monitoring the establishment of minimum wage corridor agreements with international partners of the United Kingdom, insofar as any such agreement ensures that any non-qualifying seafarer is remunerated for UK work at a rate that is equal to or exceeds the rate that would otherwise be required under this Act;
(e) an assessment of the interaction between this Act and existing international agreements or international maritime law, including reference to any litigation that has arisen as a result of this Act.
(3) The report must be laid before each House of Parliament.’
New clause 4—Directors of companies operating services to which this Act applies: personal liability for non-compliance of operator—
‘(1) A director of a company operating a service to which this Act applies (the “operator”) commits an offence where the operator has committed an offence under—
(a) section 5(1); or
(b) section 6(5)
of this Act.
(2) A person guilty of an offence under subsection (1) is liable—
(a) on conviction on indictment, to a fine, or
(b) on summary conviction, to a fine not exceeding the statutory maximum.
(3) Where a person is guilty of an offence under subsection (1), the court may make a disqualification order against that person if that person is registered as a director of any company registered in the United Kingdom.
(4) The maximum period of disqualification under subsection (3) is 15 years.’
New clause 5—The role of the Maritime and Coastguard Agency—
‘(1) The Secretary of State must prepare a report on the role of the Maritime and Coastguard Agency (MCA) in enforcing the provisions of this Act.
(2) The report in subsection (1) must include assessments of—
(a) the extent to which the MCA has sufficient resources to undertake such enforcement, and
(b) the efficacy of such enforcement.
(3) The Secretary of State must lay this report before both Houses of Parliament before the end of the period of twelve months beginning with the day on which this Act is passed.’
Government amendment 1.
Amendment 30, in clause 1, page 1, line 9, after “Act” insert—
‘“place in the United Kingdom” includes energy installations within the UK Exclusive Economic Zone.’
Amendment 24, in clause 3, page 2, line 5 , leave out “120” and insert “52”
Government amendment 25.
Amendment 31, in clause 4, page 3, line 30, at end insert—
‘(c) pension and other payments to be made that formulate a part of seafarer remuneration in relation to a service to which this Act applies.’
Amendment 32, page 3, line 40, at end insert—
‘(9A) The national minimum wage equivalent must not be adjusted to account for accommodation, food, or other items exempted from being charged to seafarers under international convention.’
Amendment 40, page 3, line 42, leave out from “Kingdom” to end of line and insert
‘, its territorial waters and the UK Continental Shelf.’
This amendment would ensure that the legislation is in line with the existing regulations providing entitlement to the NMW for seafarers working from a UK port to an offshore oil and gas installation on the UK Continental Shelf and returning to a UK port.
Amendment 33, page 3, line 42, leave out “or its territorial waters” and insert
‘, its territorial waters, or within the Renewable Energy Zone as specified by The Renewable Energy Zone (Designation of Area) Order 2004.’
Government amendments 2 to 7.
Government motion to transfer clause 6.
Government amendments 8 to 10.
Government motion to transfer clause 7.
Government amendments 11 to 15.
Amendment 34, in clause 11, page 8, line 9, after “regulations” insert
‘, where the minimum surcharge to be imposed on an operator shall be no less than 300 per cent of the difference between the amount calculated as the national minimum wage equivalence for the operator and the amount in total paid by that operator’
Government amendments 16, 26, 17, 18, 27, 19 and 20.
Amendment 36, in clause 13, page 10, line 15, at end insert—
‘(e) where there is need to provide crew with access to necessary welfare facilities or undertake crew repatriation.’
Government amendment 28.
Amendment 37, in clause 15, page 10, line 30, after “may” insert
‘following consultation with relevant stakeholders’
Government amendment 29.
Amendment 38, in clause 16, page 11, line 11, leave out subsection (3) and insert—
‘(3) A statutory instrument containing (whether alone or with other provision) regulations made by a Minister of the Crown under any of the following provisions may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament—
(a) section 3 (power to request declaration);
(b) section 4 (nature of declaration);
(c) section 7 (imposition of surcharges);
(d) section 9 (refusal of harbour access for failure to pay surcharge).
(3A) Any other statutory instrument containing regulations made by a Minister of the Crown under any provision of this Act is subject to annulment in pursuance of a resolution of either House of Parliament.’
Amendment 41, page 11, line 11, leave out subsection (3) and insert—
‘(3) A statutory instrument containing regulations under this Act may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.’
Government amendments 21 to 23.
Mr Holden
It is a pleasure to report to the House, to move Government new clause 3, to speak to the other amendments and to be able to listen to the important debate we will have on the Bill’s remaining stages. Over the past few months, the Bill has been subject to scrutiny and debate not only in Committee but through the ongoing debate in this House and in the other place. I am pleased that we are moving forwards together towards seeing this important legislation on the statute book and seafarers seeing the benefit of increased wage protection. I will first introduce the new clause and a number of the amendments introduced by the Government.
The first group—amendments 5, 6, 7, 9, 10 and 23 —relates to the powers to request information from harbour authorities to monitor their compliance with their duties under the Bill. New clause 3 provides the Secretary of State with the power to require harbour authorities to provide information for the purpose of establishing whether, or to what extent, they are complying with their duties under the Bill. In practice, this power will be used by the Maritime and Coastguard Agency. Subsection (2) of the new clause provides an indicative list of the sort of information the MCA might require in order to establish whether a harbour authority is complying with its duties, including information about equivalence declarations and surcharges. It will be an offence for a harbour authority to fail to provide the information required in the manner and within the period specified by the Maritime and Coastguard Agency, to provide false or misleading information, or not to inform the Secretary of State within four weeks if the information becomes false or misleading. The penalty for this offence is an unlimited fine in England and Wales and a fine not exceeding level 5 in Scotland and Northern Ireland.
This new clause is necessary following amendments made in Committee that mean that harbour authorities are now under a duty to request declarations, impose surcharges or refuse access to their ports in the circumstances set out in the Bill. It is a criminal offence for a harbour authority to fail to comply with these duties. The new clause will therefore ensure that the Maritime and Coastguard Agency has the necessary information to carry out its enforcement role and to bring prosecutions if necessary, in line with its powers of enforcement of operators in clause 6.
Government amendments 5 and 23 and subsection (3) of new clause 3 all relate to savings for data protection regulation, making it clear that the Bill is not intended to override any existing data protection obligations. Subsection (3) of new clause 3 provides that a requirement to provide information
“does not require a harbour authority to provide information to the extent that doing so would cause the authority to breach the data protection legislation”.
The data protection is defined by amendment 23 as having
“the same meaning as in the Data Protection Act 2018”—
that is, all relevant UK data protection legislation.
Amendment 5 makes it clear that the data protection saving in clause 6(3) applies in relation to the UK’s data protection legislation as well as to the data production laws of other countries or territories. In new clause 3(3) and clause 6(3), the amendments clarify that in determining whether the provision of information would cause a breach of the data protection laws, the requirement imposed by subsection (1) of the clause is to be taken into account. This is to make it clear that the disclosure of information may be authorised when pursuant to a legal obligation.
It is an offence under clause 6(5) of the Bill for an operator to fail to provide information required to the Secretary of State or, in practice, the Maritime and Coastguard Agency. However, at present clause 6 does not specify the time within which this information is to be provided, as several hon. Members pointed out in Committee. Amendments 6 and 7 will therefore make it explicit that the Maritime and Coastguard Agency can specify the period within which the information must be provided, and that it is an offence for the operator to fail to provide the information within that period and in the manner specified. The same applies for requests for information from harbour authorities under new clause 3. These amendments will provide greater clarity for harbour authorities and the Maritime and Coastguard Agency.
Amendments 9 and 10 are linked to new clause 3 in that they extend MCA enforcement powers in consequence of Government amendments made in Committee to impose duties and corresponding criminal offences on harbour authorities. These amendments will extend the powers in clause 7 for inspectors to board ships or enter premises for the purpose of establishing whether harbour authorities are complying with their duties or to verify information provided under new clause 3. These amendments will allow the MCA properly to enforce the duties on harbour authorities and to bring prosecutions where necessary if the duties are not being complied with.
The next group of Government amendments relate to new offences for false and misleading declarations. As currently drafted, an operator commits an offence under clause 5 in two broad circumstances: first, where it provides an equivalence declaration and the service is operated inconsistently with that declaration at the time that it is provided, or from the beginning of the relevant year if that is later; and secondly, where an operator provides a declaration and subsequently starts to operate the service inconsistently with the declaration and fails to notify the harbour authority of that fact within four weeks.
Clause 5 does not currently cover circumstances where a declaration is provided during or after the relevant year, and the service was operated inconsistently with the declaration for a period of that year in the past, such that the declaration is false or misleading at the time it is provided. This is why I have tabled amendments 2 and 3, which create a new criminal offence where an operator provides a declaration that is false and misleading in so far as it concerns the operation of the service before the declaration was provided.
Amendments 4 and 8 are consequential on this new offence and extend the Secretary of State’s enforcement powers to include establishing whether a declaration is false or misleading. In practice, enforcement will be carried out by the Maritime and Coastguard Agency. Amendment 4 extends the purposes for which the Maritime and Coastguard Agency may require an operator to provide information under clause 6 to include establishing whether an equivalence declaration is false or misleading in so far as it concerns the operation of the service before the declaration was provided.
Amendment 8 extends the power in clause 7 to provide that inspections of ships or premises may be carried out for the same purpose. Related to that, amendments 11 to 14 provide that harbour authorities must impose surcharges on an operator if they have reasonable grounds to believe that an equivalence declaration provided by the operator is false or misleading about the time before the declaration was provided. That mirrors the approach taken when an operator provides a declaration and the harbour authority has reasonable grounds to believe that the service is or was being operated inconsistently with that declaration, ensuring that surcharges are imposed in both circumstances.
Taken together, these amendments strengthen the enforcement of the Bill and will mean that operators that seek to pay their seafarers a rate lower than the national minimum wage equivalent cannot avoid the consequences through such dishonest means.
Grahame Morris (Easington) (Lab)
I am grateful to the Minister for these amendments, as the issues to which they relate were raised by Opposition Members in Committee and on Second Reading. What is the position on the fines? Does he remember our discussion about whether level 4 fines are enough of a deterrent? A level 5 fine is unlimited and may be a greater deterrent, although the Secretary of State will still have discretion on whether to apply it.
John McDonnell (Hayes and Harlington) (Lab)
I welcome the introduction of a criminal offence, but I wonder who will be prosecuted and held liable in that instance. Will it be a company director? At what level of the decision-making process will an individual be held liable? I would be happy if the Minister secures wisdom and inspiration over the next few minutes.
Mr Holden
I will address that point later in my speech.
On the point raised by the hon. Member for Easington (Grahame Morris), I agreed in Committee to consider raising the maximum penalty for harbour authorities guilty of failing to comply with their duties under the Bill—I think the right hon. Member for Hayes and Harlington (John McDonnell) was also referring to this—from a level 4 fine to an unlimited fine in England and Wales, or a level 5 fine in Scotland and Northern Ireland. On reflection, I decided to do so. That is why the Government tabled amendments 25, 26, 28 and 29 and subsection (6) of new clause 3.
These amendments will bring the penalties into line with those for service operators that commit an offence under the legislation. As hon. Members will remember, we discussed in Committee the possibility of a harbour authority also being an operator, which would create a discrepancy. We know that the reputational impact clearly did not stop P&O Ferries doing what it did, which is why we have this Bill.
To answer the right hon. Member for Hayes and Harlington, the fines will be levied on the company, and they will be unlimited fines, except in Scotland and Northern Ireland, where level 5 fines are limited by legislation—the devolved Administrations in Scotland and Northern Ireland have not yet changed their legislation, so it will be up to them to mirror these changes. This will send a strong message that harbour authorities must comply with their duties under legislation. I thank the noble Lord Tunnicliffe for his interest in the level of fines when the Bill was considered in the other place.
Amendment 1 adds a regulation-making power to clause 1 to allow the Secretary of State to specify matters that must or must not be taken into account in determining whether provision for the carriage of persons or goods between two places by ship on two or more journeys constitutes a single service. Amendments 21 and 22 provide that this power is subject to the affirmative procedure.
The Bill applies to services for the carriage of persons or goods by ship, with or without vehicles, between a place outside the UK and a place inside the UK. The concept of service is not defined in the Bill, but it will be a question of fact whether ships on the same route are providing the same service, which will need to take account of all the circumstances of the particular case.
By adding a power to specify in regulations the factors that must or must not be taken into account in determining what is a service for the purpose of this Bill, we will be able to clarify the intended meaning of “service” if needed, such as if there is an inconsistency in interpretation across or between different harbour authorities and operators. This provision therefore allows the Department to react, if necessary, to how the definition of “service” is interpreted over time. This will ensure consistency in the application of the Bill, and it is therefore necessary for the effective implementation and delivery of policy objectives. Because the measure will be made through the affirmative procedure, hon. Members will be able to provide a degree of scrutiny.
We recognise this is a broad power with potential to adjust the interpretation of “service,” which is the Bill’s central concept. We plan to use the power only to clarify the intended meaning of “service,” if needed, not to alter the services in scope of the Bill. It is intended that the power will be used only if necessary and only in relation to circumstances that may become apparent once the Bill has been enacted. That being said, we accept that a high level of scrutiny for this power is appropriate. As such, the power will be subject to the affirmative procedure.
Amendment 15 requires the tariff of surcharges to be specified in regulations made by the Secretary of State, as opposed to being specified by the harbour authorities. In other words, the amendment will switch the duty for setting the surcharge tariff from the harbour authorities to the Secretary of State. I thank the noble Baroness Scott of Needham Market for raising the issue in the other place, and the hon. Member for Wythenshawe and Sale East (Mike Kane) tabled a similar amendment that sought to reduce the role of harbour authorities in the compliance process by taking away their duty to set the surcharge rate, giving that role to the Secretary of State.
The surcharge is an important mechanism to deter operators from paying below the national minimum wage equivalent. We still consider that harbour authorities are reasonably placed to set the tariff of surcharges, given their proximity to services, but we have heard the concerns raised by the ports industry and, as promised, went away after Committee to consider it further. Having done so, we tabled amendment 15 to switch the duty for setting the surcharge tariff under the Bill from harbour authorities to the Secretary of State. This will not fundamentally change the compliance process, as ports will still have a role in imposing the surcharge, but they will not set the rate. I hope this alleviates the concerns that some Members expressed in Committee about the role of harbour authorities.
Amendments 16 and 18 to 20 are consequential on amendment 15. Amendment 16 removes the requirement for harbour authorities to publish the tariff of surcharges, as this will now be set in regulations. Amendments 18 to 20 make consequential changes to clause 12 to remove the ability to object to a tariff of surcharges specified by a harbour authority.
Amendment 17 confers a duty on the Secretary of State to make regulations specifying a time limit on objecting to a surcharge under clause 12. I promised in Committee to consider this further, in response to an amendment tabled by the hon. Members for Paisley and Renfrewshire North (Gavin Newlands) and for Glasgow East (David Linden). I had been considering it before Committee because there was a concern that things could drag on and, having considered it, I agree that a time limit on objections will provide greater certainty for harbour authorities by preventing objections from being raised long after a surcharge is imposed. We intend for the draft regulations to be subject to public consultation, and we will work with stakeholders to determine a reasonable length of time in which objections will be required to be made following the imposition of a surcharge.
Amendment 17 states that surcharges may be applied only for the purpose of providing shore-based welfare facilities for seafarers. The objective of this amendment is to ensure that funds collected from surcharges are invested in the welfare of seafarers and cannot be used for the functioning of harbour authorities. A similar amendment was tabled in Committee by the hon. Members for Glasgow East and for Paisley and Renfrewshire North, and it was supported by other Opposition Members, who expressed concern about a conflict of interest where a harbour authority and an operator are owned by a connected company, thereby weakening the surcharge’s financial disincentive. I thank the noble Baroness Scott of Needham Market for raising this conflict of interest in the other place. Although we do not think it is likely in practice that such an operator would seek to avoid paying the national minimum wage equivalent, and would instead continue to pay the surcharge to its connected company, this amendment reduces that theoretical risk. It is also in line with the Bill’s overall intention of improving the welfare of seafarers.
We understand that ports may object to amendment 17, as they might have used surcharge funds to cover the costs of administering the Bill. However, we do not expect surcharges to be paid routinely, so harbour authorities could never have relied on the surcharge to cover the costs of administering the Bill—they are minimal costs that harbour authorities should be able to cover through their harbour duties. This Bill leaves it open as to how the money can be applied to shore-based welfare facilities and so harbour authorities will have some flexibility on that. I hope that hon. Members will see that in tabling these amendments the Government have listened to the concern from across the House and from stakeholders, and that the Bill is better for it.
I will now turn to the amendments tabled by hon. Members of this House. Amendment 24 would require harbour authorities to request equivalence declarations from operators of services that call at their harbour on at least 52 occasions a year, instead of 120. That would mean that services calling at UK ports once a week, on average, would be brought into the scope of the Bill. The measures that may be taken under the Bill can be applied only to a narrow subset of operators with a close connection to the UK: those on a regular scheduled service determined by clear, objective criteria. This represents a focused and proportionate means to address a specific issue and avoids any wider impact on the diversity of shipping that makes use of UK ports. The figure of 120 has been arrived at following thorough consultation and bilateral discussions with industry and others.
Christine Jardine (Edinburgh West) (LD)
I recognise that this measure was based on data carefully collected. However, does the Minister not accept that the figure of once a week would bring into scope an awful lot of shipping with seafarers who do have a close connection to the UK, and that once a week might be a fairer figure?
Mr Holden
I understand what the hon. Lady is saying and I will address that point directly in a moment, after I have gone through the main points of why we are pushing back on this suggestion. The rationale for the high-frequency criterion is to ensure that seafarers affected by the policy are only those with close ties to the UK by virtue of their working on services that regularly call in UK ports. That covers the overwhelming majority of passenger ferries. We have assessed this using Department for Transport data, which has also been backed up by the Chamber of Shipping’s written evidence to the Public Bill Committee. Crucially, this focuses the Bill on the short-sea services, clearly justifying the seafarers’ connections to the UK and therefore a UK-equivalent level of pay protection. Reducing the frequency with which services must call at UK ports before coming into the scope of the Bill’s requirements to include weekly services would dilute the concentration of the Bill in protecting seafarers with the closest ties. It would then bring into scope some deep-sea container services which we do not feel can legitimately be said to have close ties to the UK. Services that might visit many ports in a foreign country, perhaps coming to the UK once a week, would also be included, which gives rise to the question of whether we would be legislating for another country.
Furthermore, the national minimum wage equivalence will apply only in UK waters and therefore would extend to a cargo service dropping off once a week for a matter of hours, with marginal if any impact. The proposal therefore has multiple downsides, and I hope the hon. Lady can understand why we are looking at it in that sphere.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
I hear what the Minister says and understand his point about which services may be collected under the proposal, but surely there is a soft spot between 52 and 120 that we can all agree on?
Mr Holden
Well, 120 is what has been discussed broadly in the past few weeks. Opposition Members have tabled no amendment for any proposal except 52 or 120. That is why we are discussing 120. A once-a-week service could be in the UK’s waters for a matter of hours every week, when the minimum wage equivalence would apply, and it may be calling at multiple foreign ports before it gets here. Obviously, questions of international maritime law start to arise in those circumstances, as do our relationships with other countries, which are looking at this and at where these ships may operate from.
Grahame Morris
We have to agree to disagree on this point. The National Union of Rail, Maritime and Transport Workers has estimated that the 2020 legal extension of the national minimum wage equivalent entitlement to all seafarers on domestic routes and on routes from UK ports to offshore oil and gas installations, which are not included in the scope of the Bill, would benefit a maximum of 13,000 seafarers—I refer to ratings grades—regardless of the number of port calls. So the issue of port calls is fundamental to whether this Bill will be fit for purpose—in other words, whether it will meet the Government’s basic requirement to protect UK seafarers on these short sea routes.
Mr Holden
I will come later to the hon. Gentleman’s point about offshore workers in the energy sector. If the proposal were 52 weeks, we would be including services that were in UK waters for only a matter of a few hours a week. We think that would be a disproportionate measure and it would not address what we are trying to address, which is short-service ferry operations. They are the major point of concern. If we include other services, we move swiftly into international maritime law.
David Linden (Glasgow East) (SNP)
My understanding was that 52 weeks was the original threshold in the Government’s proposals and that that was changed after consultation with industry. The trade unions supported 52 weeks. As that was the Government’s initial proposition and only after the intervention of the British Ports Association did they chose to ignore the trade unions, can the Minister clarify why that was? If there was compelling evidence to make that change, will he place it in the Library of the House?
Mr Holden
My understanding is that the initial consultation was on that broader thing, but the legislation that was introduced was always based on a figure of 120, because after that broad consultation we looked at various issues, including where an operator, perhaps from Holland, visits several European ports and then pops into the UK once a week. The minimum wage equivalence being introduced for those operators would be very minimal and would affect a small number of people. Obviously, where someone was based in Holland, visited several European ports and then popped into the UK occasionally, we would be bringing in real questions of international jurisdiction, particularly under maritime law, as to where those services were being operated from.
John McDonnell
I do not think that just popping in every two or three weeks is just popping in. I have been at this for a while and international law is always thrown against it. Will the Minister publish any legal opinion that he has on that matter, so that we could examine it, across the House, to ensure that it is true?
Mr Holden
I will write to the right hon. Gentleman about that to see whether we can publish anything further. I just say that a full consultation took place, and the details of it have been fully in the public domain. We have arrived at this position having considered all the implications of the proposal. On a major number of issues the Government have moved significantly in this area. I have listened to Members from across the House and in the other place to address their concerns. However, on this specific issue the scope would be widened to operators that really are not UK operators; they are from other countries and would just be popping into UK ports. That would have major international implications, as I am sure he can understand.
Christine Jardine
I appreciate that the Minister is giving up a lot of time on this. However, would most people listening to this debate not feel that vising a port once a week is a regular, substantial amount of presence, and that we would be missing out a substantial number of people?
Mr Holden
I think the hon. Lady is incorrect on this point. We are talking about someone based overseas who visits a UK port once a week for a matter of hours and who may be operating in the territorial waters of another country for the overwhelming majority of their working time. This would be similar to someone employed under a British lorry driver’s licence going over to do deliveries in another country as well. There is this idea that we would suddenly change things for those few hours that people were perhaps at a UK port, but that would be inconsistent with our obligations and it raises real issues associated with our interactions with other port operators, particularly across the North sea, and with our friends and allies in Europe, who are looking at similar legislation. We have been working on that with our European partners. We are already in conversations with the French on this issue and on others. The UK is leading the way on legislation in this area of regular services, but we have to do it in such a way that it also fits with international maritime law. We also need to ensure that we are on the same page as our friends and partners across the continent.
Lia Nici (Great Grimsby) (Con)
To clarify something that my hon. Friend said earlier, is the point of the measure not to avoid a situation where, as we saw with P&O Ferries, a company is effectively making a choice whether to employ British people working in British waters on the acceptable living minimum wage, or to make wholesale redundancies so that it can bring in low-paid workers, and quite often low-paid foreign workers?
Mr Holden
My hon. Friend makes an important point. That is the crux of this legislation. We are trying to address the operators who regularly access UK ports on those short straits routes. What we are not trying to do is pass legislation for people who are perhaps in UK waters for a matter of hours a week, the benefit of which is relatively minimal anyway, because they are in international waters, or in the waters of a foreign country, for the majority of the time. The impact of that would be seen as relatively negligible.
Let me move on from that point. I think I have explained very clearly the UK Government’s position. The implications of the extension to once a week for port calls would place a huge burden, the effects and benefits of which are difficult to ascertain, and appear to be incredibly minimal.
Clearly, the Bill focuses on the short sea services, justifying the seafarers’ connection to the UK and therefore a UK equivalent level of pay protection. To reduce the frequency that services must call at UK ports before coming into scope of the Bill’s requirements to include weekly services would dilute the concentration of the Bill in protecting those seafarers. In any event, the time in our waters spent by seafarers who call only weekly would be so short that it would have very little effect, while hugely widening the scope of the Bill to container services, which may have very little connection to the UK.
New clause 2 would ensure that the Government produce a report on implementation and monitoring within six months of the Bill being passed. The same new clause was introduced in Committee and I am afraid that the Government’s position has not changed. Many of the areas that such a report would cover are out of scope of the narrow focus of the Bill. We have acted quickly and decisively with the Bill to prevent operators of regular services to the UK being able to replace seafarers with those being paid less than an equivalent of the national minimum wage. Furthermore, it would be impossible to measure due to any indirect impact. Six months from a Bill becoming law is far too soon for a report to be of any use. We would still be in the process of developing secondary legislation in order to bring the Bill into full force.
In Committee, we discussed each provision of the new clause in detail, and Baroness Vere also discussed the provisions of a similar amendment at length in the other place. The points that I made in Committee are unchanged, so I will not repeat them, but I will provide an update to the House on various aspects that the report would cover.
Subsections 2 (a) and (b) request the reporting of the impact of the Act on roster patterns, pay, pensions and future plans to legislate in these areas. We do not have plans to legislate more than is necessary, but that does not mean that we are not taking action on areas beyond the matter of minimum pay, which we all know is not the only aspect of seafarers’ welfare that requires attention. As part of the seafarers’ protection nine-point plan, we will launch a new seafarers charter to improve the long-term employment and welfare conditions of seafarers. It includes a wide range of employment protections that is currently covered in the Bill. The Government are committed to delivering a voluntary seafarers charter in the near future. They will act legislatively only where it is proven that it is appropriate to do so. The impact of the charter and the need to provide a legislative basis will be continuously reviewed, and it is not necessary or desirable to constrain ourselves to committing to any action on a strategy on these timescales. The charter will be published very soon. We are working closely with the French Government, who are also developing their own version of the seafarers charter. We are commissioning independent research into roster patterns to ensure that we have a strong evidence base to support policy on this subject. The French Government are also doing their own research, and we are liaising closely with them to share our learning and further build a robust evidence base in this important area.
On subsection 2(d), with regards to a strategy for monitoring the establishment of minimum wage corridors, the Government appreciate the interest in this area and we are working hard to seek agreement on how the UK and our near European neighbours can collaborate on the international stage to improve seafarer welfare. As part of that, we are exploring the creation of minimum wage-equivalent corridors.
I am pleased to say that the French Government deposited a Bill in their National Assembly on Wednesday 1 February. Their Bill aims to ensure that seafarers working on certain cross-channel ferry services between the UK and France will also benefit from pay protections while in specific parts of French territorial waters. We will continue to work together on our respective pieces of legislation to ensure that we maximise the benefit to seafarers. In addition to our work with France, we have begun our engagement with the Crown dependencies.
Grahame Morris
I am grateful to the Minister for giving way. I wish him every success in his bilateral negotiations with the French Government and other seafaring nations. Let me turn to the point made about the litmus test of the success of this Bill. Without placing in the Bill the seafarers charter, which addresses not just minimum wage equivalence but roster patterns and all the other things that allowed rogue employers such as P&O Ferries and Irish Ferries to commit the terrible action that took place almost a year ago, would this Bill prevent such action? I am afraid that the answer is no. It fails the litmus test.
Mr Holden
I do not agree with the hon. Gentleman; I do not think that the Bill fails the litmus test at all. It is clear that what we are trying to do is protect seafarers with major connections to the UK, and that is exactly what the Bill does.
On the personal liability of directors, the existing criminal offences in the Bill will have serious commercial and reputational impacts, particularly now that we have included unlimited fines, so I do not think that the new clause is necessary. Plus, the Insolvency Service is currently undertaking a civil investigation into the P&O situation, which shows that these things can be addressed, as set out in the Company Directors Disqualification Act 1986. I request that the new clause be withdrawn.
On the role of the Maritime and Coastguard Agency, I would like to assure the House that new clause 5 is unnecessary. The Bill does not refer to the MCA by name. That is because it is an executive agency of the Department for Transport and will be covered by the legislation.
In relation to amendment 30, we seek to make energy installations within the UK exclusive economic zone a
“place in the United Kingdom”
for the purposes of the Bill. The key point here is that we understand the concern in this space. Offshore wind farms and the renewable sector are critical to meeting our targets. The Department for Business, Energy and Industrial Strategy regularly reviews the national minimum wage legislation to make sure that it is fit for purpose in the current situation. We hope that that will be covered in that.
Similarly, turning to amendments 31 and 32, we hope that pension entitlements and deductions for food and accommodation will be covered in the seafarers charter, which will be brought forward shortly. Although we support the intention of the amendments, it is right that the detail, particularly on food and accommodation, is set out in secondary legislation, which is where we intended it to be, in order that we get it right for this complex matter. We will hold a public consultation on the draft regulations before the Bill receives Royal Assent.
I believe that I covered the refusal of access exceptions in amendments 36 and 37 extensively in Committee, which made it very clear that we are in a very sensible place on both those issues.
I thank hon. Members for their contributions to this debate. I hope that it is clear from my responses that I have been open to amendments and that the amendments tabled by the Government have also made that clear. I understand that some Members would have liked us to have gone further, but the scope of the Bill has been intentionally tightly drawn to target action on the specific issue of wages for seafarers with close ties to the UK. We introduced this Bill at great pace following the P&O scandal, and it is by keeping the Bill tightly focused that we have been able to take such prompt legislative action. The Government have, however, still been progressing their nine-point plan for seafarers’ protection, and I hope that Members will welcome the progress that we have made, particularly in our co-operation with the French Government on these issues.
The compliance and enforcement mechanisms of the Bill have been carefully designed, and I hope that hon. Members will note the improvements that have been made both on Report and in Committee, which include suggestions from them. The compliance process is a carefully drawn balance between harbour authorities and the MCA on behalf of the Secretary of State. We have been engaging actively with ports and stakeholders and will continue to do so as we develop secondary legislation. We are confident that the combination of surcharges, refusal of access and criminal offences will ensure that operators pay seafarers on services in the scope of the Bill at least the national minimum wage equivalent. I am pleased that the Bill has reached this stage in its passage and look forward to seeing it on the statute book.
Mike Kane (Wythenshawe and Sale East) (Lab)
I rise to speak to new clause 2, which stands in my name and those of my hon. Friends. The new clause would ensure that the Bill contains sufficient checks and balances so that it does what it is intended it does. We support the premise of the Bill and have suggested amendments to strengthen it. We do not want a toothless Bill that is wide open to abuse by bad bosses. The Bill attempts to address the problems of seafarer welfare and is intended to cover services with close ties to the UK that make regular port-to-port international voyages and arrive on our shores throughout the year.
The Bill is not merely about pay; it is also about conditions, pensions and roster patterns. It is the first piece of primary legislation on this subject since the Merchant Shipping Act 1995. Its scope must be broadened and protections put into the Bill. The easiest way to measure the efficacy of the Bill is to require the Government to report on the additional conditions, specifically those relating to the seafarers welfare charter. Regrettably, that charter, which is the Government’s preferred option for setting minimum conditions for rostering, pensions and other aspects of seafarer employment, has been voluntary and progress has stalled. The Minister said that he is co-operating with the French, which is good to hear, but as my hon. Friend the Member for Easington (Grahame Morris) said, the Bill clearly fails the litmus test. We have to move on this issue: the Bill is toothless without the charter, and the Minister should come back to the Dispatch Box and say that he will move on it, or at least give some sort of guarantee of when the charter will come into force.
Grahame Morris
I agree with my hon. Friend, who makes a powerful point. It is not that we are not giving the Minister credit for having moved some way; it is just that this Bill presents an ideal opportunity. It is like having a penalty awarded and then double-tapping the ball, so the referee disallows the goal. We have a great opportunity to move ahead of the French and provide the requisite protections for our seafarers. Has my hon. Friend seen a published version of the charter? I know there have been various iterations. I understand that the RMT has asked to see the latest version. The Minister lays such great store by this voluntary agreement, which we have not even seen yet—at least, I have not seen it.
Mike Kane
No, I have not seen any sign of the charter. I would have thought Conservative Members would want to get one over on the French. As an avid Manchester City fan, I might have to dust down my A to Z in future to find out where I am going, but I have seen plenty of those types of penalty kicks in the past.
These legislation matters, because it is the only way to end the exploitative race to the bottom that many companies depend on. P&O Ferries cut its pay bill by up to 50%, but the majority of the savings will be from the imposition of new rostering periods of up to 17 weeks for crew who are earning less than half the minimum wage. It is vital that the Government consult the unions and that unions are able to feed into the monitoring of the legislation in line with international labour conventions. We saw P&O casually disregard both employment laws and union consultation when it behaved as it did in March 2022. That must not happen again. Bad bosses should know that the Government value the role of trade unions and seek to work with them—not against them—to protect the rights of workers.
New clause 2 would also seek to establish a way of monitoring minimum wage corridor agreements to ensure that any non-qualifying seafarer is paid in accordance with a rate that is equal to that rate. We have a proud maritime tradition in this country and the horror reflected by this House, which was united in its condemnation of P&O, must not be forgotten. We know low-cost carriers have a model based on exploitation and poverty pay, and we cannot let that business model prevail.
I come now to new clause 4, tabled by the hon. Member for Paisley and Renfrewshire North (Gavin Newlands). Labour supports the Bill on the whole but we still find it lacking and insufficiently robust. I am grateful to the Minister for the concessions he has made, as I will point out later in my speech, but without new clause 4 accountability in the Bill is at stake. What provision is there if businesses are found to have failed the test? Is it not right that those responsible should be held to account?
Almost a year to the day since that scandal was inflicted upon almost 800 seafarers, P&O has yet to be sanctioned by this Government. They gave P&O millions of pounds of taxpayers’ money during the pandemic, and in return P&O proceeded effectively to stick two fingers up at the Government, its workers, the unions and our employment laws. There was plenty of wailing and gnashing of teeth from Government Members, but no action. Here we are 11 months later: Peter Hebblethwaite has been promoted into another directorship in the company, and the promised criminal prosecution has not materialised. Surely the Insolvency Service will bring a prosecution? No, and despite asking questions, my colleagues and I across the House have yet to hear a clear answer as to why a prosecution is not in the public interest.
We support new clause 4 because, to recap, at 7 am on 17 March 2022, notices appeared in mess rooms on nine P&O ships telling crew to expect an announcement regarding the future viability of their jobs. Three and a half hours later, 786 UK seafarers were told via a pre-recorded Zoom call that they were being made redundant, without a thought to employment law and with immediate effect. They were then escorted off the ships by handcuff-trained, balaclava-wearing private security guards. On the quaysides in Dover, Hull, Liverpool, Larne and Cairnryan, coaches were arriving, carrying agency crew. Peter Hebblethwaite oversaw this—it happened on his watch—and then bragged in this House to a Select Committee that he would do it again. It is for that reason that we seek to make directors of these companies—these bad bosses—personally responsible through the new clause, which should be accepted. I am grateful, however, that the Minister has moved on having unlimited fines.
Amendment 24 would reduce the number of calls a vessel may make in a 12-month period from 120 to 52. The amendment would therefore significantly increase the number of vessels, and thus the number of seafarers, in scope of the protections of this Bill. The Government’s stated aim in the Bill is to improve pay and protections for seafarers working on services that have a close link to the United Kingdom. The wooliness of the wording a “close link” should be expanded on and tightened up, and that is what amendment 24 would do by reducing the number of visits from 120 per year to one a week, which by any and every measure is a regular visit and a close link.
The Minister said that there has been full consultation on this matter, but it is like the old saying, “You can have a car of any colour you want, so long as it’s black.” The Government have not moved on this issue one iota. If I were to visit a restaurant weekly, I would be a regular, with a close link. I play football once a week, which not only makes me the second-best midfielder playing out of my constituency—the honour of being the best goes to Jill Scott MBE, who owns the BOXX2BOXX café in my patch—but gives me a close link to that team. Why are the Government so keen to undermine their own Bill by implying that doing something once a week is not sufficient to be seen as having a close link?
Robert Courts (Witney) (Con)
I entirely agree with everything the hon. Gentleman is trying to do to increase seafarers’ rights and raise standards. Does he accept that the maritime sector is by its nature complicated, interlinked and international? We ought to be addressing the specific instances that occurred here, because it is technically an international voyage through the short straits, while doing the wider international work in slower time, crucially through the International Maritime Organisation, rather than seeing the unintended consequences that there might be if the Bill were roughly drafted.
Mike Kane
I thank the hon. Gentleman, the former Minister, for all his work in this area. I know that he was extraordinarily committed and was as upset as everyone else in this House—he put in a hard stint as Minister for aviation and maritime. He is right that the sector is complicated, interlinked and international, but that should not stop us doing the right thing. If seafarers are here, they are here. That is why we are pushing for 52 port calls, and we genuinely believe that that is the way to strengthen this legislation, but I thank him for his intervention.
Turning to amendments 39 and 49 that appear in my name and those of my colleagues, it is vital that the terms and conditions collectively bargained for are upheld. There are currently seafarers who are paid more than the equivalent of the national minimum wage, and we would not expect those in receipt of this pay to enter a race to the bottom. Good employers, of which there are some in the sector, are already paying above the UK national minimum wage, and we seek to ensure that pay and conditions for their workers are protected, not dissembled or undermined by provisions contained within the Bill. In addition to maintaining the Bill and the conditions of individual seafarers, these amendments would reassure other countries, such as France, Belgium, and Ireland, with which we are seeking to make bilateral agreements, that we are not undermining them, which would make negotiations easier.
Amendment 40 is designed to shore up previous provisions under regulations, which extended the entitlement to be paid above the national minimum wage to those working in the offshore gas and oil sector bound by the UK continental shelf, which extends 200 miles from the coastline of the UK. This amendment equalises the basic rights of seafarers in the UK offshore energy sector, which we know will be a growth industry of the future. The Government and the offshore wind industry cannot rely on the good will of individual developers to commit to voluntary schemes such as the real living wage.
Failing to support this amendment would highlight not one, but two anomalies within the Bill. First, any seafarer who works out of a UK port to an offshore oil or gas installation and then returns to the UK port will not be entitled to the protections offered by the Bill. As we move towards a just transition and increased reliance on offshore wind, we must ensure that those who work in the energy sector are protected. We must future-proof future industries—it makes no sense to do that retrospectively.
Secondly, any seafarer working from a UK port to an installation on the UK continental shelf and returning to a UK port is already entitled to protection of the national minimum wage, regardless of the flag of the vessel or their nationality. That is entirely as it should be. The Government must act as soon as possible to correct the lack of this protection for all seafarers, regardless of nationality or flag of vessel, working in the UK exclusive economic zone. Let us get it right first time for current offshore oil and gas workers and for future workers in offshore sectors that we know will become increasingly important as we head towards cleaner, greener energy. The exclusion of offshore energy workers from the legislation seems short-sighted.
Importantly, amendment 41 would enable the House to consider and approve regulations that may be made under the powers of the Bill; whether that is opening regulations up to further scrutiny in relation to the definition of work in the UK, regulations related to accommodation charges levied upon them, which could lead to earnings falling below the national minimum wage, or regulations related to surcharges, all should be brought before the House so it can affirm them. It is National Apprenticeship Week. We need to build on the work the Maritime Skills Commission is doing on ratings and cadet training to ensure growth in decent seafarer jobs in this country. Wider employment protections and fair pay agreements are part of that future.
I am grateful, as I said, to the Minister for moving on the harbour surcharges and for clarifying that the surcharges will be used for seafarer welfare. That is really welcome. Ports and seafarers all around the country will be affected by the Bill, so it is vital that the Bill is right. We have worked hard to ensure that the concerns of seafarers are heard, as voiced by their unions, the RMT and Nautilus, who I thank for their energy and expertise on this Bill. We need this Bill to be as robust as possible, and have sought to amend it where possible to ensure that. I thank the staff of the House and Members from across the Chamber for all their hard work on the Bill.
Gavin Newlands
I start, rather unusually, by thanking the Minister, in the same vein as the hon. Member for Wythenshawe and Sale East (Mike Kane), for accepting some of the changes that both we and the Labour party suggested during Committee stage—notably, on setting a national rather than a harbour-specific tariff, setting a deadline for objections to the level of fines to be levied and ensuring that the levy is used for seafarer welfare.
We will obviously not vote against the Bill. It is a better Bill than when it entered Committee, but it still falls short in a number of areas. I understand that the Government by and large, as is the way with most Bills, want to keep the focus of the Bill as narrow as possible and the Opposition tend to want to widen the focus of the Bill to ensure that as many people as possible are protected by it, and to tighten up provisions already set out in the Bill for the very same reason.
The Government’s nine-point plan was set out a number of months ago but, if it is not adrift and approaching the rocks, it is struggling under very low power indeed. But the Minister need not worry; we are here to strengthen the Bill. In that vein, I will speak to amendments 30 to 33 and 36 to 38, and new clauses 4 and 5. I also fully support the amendments and new clauses tabled by those on the Labour Front Bench.
In fact, I will start with Labour new clause 2, which deals with issues relating to the seafarers charter, including roster patterns. Before I do so, I have to ask: where is the seafarers charter? Everyone was hoping and expecting to see it before Report. It is entirely suboptimal, to say the least, that the passage of the Bill will conclude without us having had sight of the charter. I certainly hope the Minister agrees that that is not the position that he would have wanted to be in at the start of the process.
Grahame Morris
That is an important point. The Government are laying so much store by voluntary agreement in the application of the seafarers welfare charter, or the seafarers charter—it has had various names during its transition. The Minister said that there had been consultation and that further consultation was going on, including with the UK Chamber of Shipping. My understanding is that that includes Seatruck and Condor Ferries. They are long-term bad bosses and abusers of seafarer rights, so I hope that they will not have input into the Bill, which could further undermine its provisions.
Gavin Newlands
I thank my Transport Committee colleague. I could not agree more. I will very shortly cover the fact that the agreement is voluntary and that we do not even know what is in it, yet here we are, concluding the remaining stages of the Bill.
As was mentioned on Second Reading and in Committee, roster patterns are every bit as important as the wage issues addressed by the Bill, because a tired and overworked crew is a dangerous crew at sea. We know that crew at P&O Ferries are sometimes being asked to work for 17 weeks straight. That is not just an issue of fairness at work; it is an issue of human and environmental safety. We know the reasons behind the Herald of Free Enterprise tragedy. If seafarers around our shores are working 17 weeks straight with no oversight and no action, sooner or later we will sadly be talking about another tragedy—one that is entirely preventable.
Similarly, on wages and pensions, we know what many seafarers are expected to put up with. The key point of the Bill is to prevent wages from falling below the national minimum wage equivalent, but we hope that will have the additional impact of improving wages and conditions across the board in the industry. As I asked the Minister in Committee:
“What good is a voluntary charter when we have operators such as P&O Ferries, which was content not only to break the law”––[Official Report, Seafarers’ Wages Public Bill Committee, 17 January 2023; c. 69.]
but said that it would do so again? Putting those elements of the charter—which sadly does not exist—on the face of the Bill would at least give the Government firm legal ground in assessing how the legislation has benefited the industry and its employees.
Again, new clause 2 calls for and commits the Government to nothing more than a report from the Secretary of State on the main issues dealt with by the charter. If the Government are serious about a real seafarers charter developed in partnership with trade unions and aimed at protecting exploited workers, they have nothing to fear from accepting the new clause.
While I am on the subject, given the lack of any contrition whatever from P&O Ferries, is it not time that its royal charter was revoked? DP World should derive no benefit from that charter, which it inherited when it bought P&O Ferries. One cannot talk about P&O Ferries without talking about Mr Hebblethwaite, a man who has so far escaped entirely scot-free despite admitting that he broke the law and would do so again. The Government and the Insolvency Service have been signally unable to bring him and/or any other P&O Ferries or DP World executives to account for their actions. New clause 4, which was tabled my hon. Friend the Member for Glasgow East (David Linden) , whose thunder I wish not to steal, would ensure that people such as Hebblethwaite would be liable for their crimes by introducing an offence that is punishable by disqualification as a director.
New clause 5 was tabled following contact from a number of concerned industry representatives that are unclear about the Maritime and Coastguard Agency’s enforcement of harbour authorities. In Committee, the Minister spoke about how clauses 4 and 5 allow the Secretary of State—via the MCA—to request information to ensure compliance. However, no passage in the Bill clarifies the role of the MCA in enforcing harbour authorities to comply. In essence, I would like to hear more from the Minister about the role of the MCA in the enforcement of national minimum wage declarations.
As I have said, we seek to widen the scope of the Bill to ensure that all those who should be protected are protected. Amendments 30 and 33, and Labour amendment 40, which the hon. Member for Wythenshawe and Sale East spoke to, were tabled to ensure that those working in the renewables sector are afforded similar protections to those in the oil and gas sectors and on the regular ferry services that the Minister mentioned. The Minister’s answer in Committee was unsatisfactory in my view and, I am sure, for those who work in the sector. If he will not accept the amendments, will he set out his plans to ensure that those workers do not end up an anomaly?
Grahame Morris
I rise to support the amendments in the names of my hon. Friends the Members for Sheffield, Heeley (Louise Haigh) and for Wythenshawe and Sale East (Mike Kane), in particular new clause 2, which seeks to put the seafarers charter on the face of the Bill; amendment 24 to clause 3, which seeks to reduce the threshold to 52 calls to a UK port; and Opposition amendment 40 to clause 4, which seeks to protect existing seafaring national minimum wage entitlements beyond a 12-mile limit on the UK continental shelf. I am concerned about unintended consequences driving down seafarers’ wages, given that our purpose is to drive them up and protect terms and conditions. I would also like to speak to amendment 41, which proposes making clause 16 subject to the affirmative procedure.
I declare my interest as a member and, indeed, vice-chair of the RMT parliamentary group. I want to give the Minister credit. The Government have moved in several areas of concern that were highlighted on Second Reading, in the other place and in Committee. When the Bill was first published, the trade unions representing both ratings and officers, who were attacked by P&O Ferries and DP World, identified a number of the issues that we have raised, including the level of fines for non-compliance and the use of surcharge revenue to fund seafarer welfare facilities onshore. I am glad that the Minister has acknowledged those concerns and acted on them.
The purpose of the amendments tabled by His Majesty’s Opposition and my friends from the SNP, the hon. Members for Paisley and Renfrewshire North (Gavin Newlands) and for Glasgow East (David Linden), is to strengthen the Bill, not to undermine or devalue it. They aim to make sure that the Bill achieves its purpose.
Government amendment 15 creates a national tariff of surcharges set by the Government rather than tariffs set by individual harbour authorities. In Committee we identified a potential conflict of interest, so I am very pleased to say that the trade unions and the Opposition parties support the amendment.
As I have indicated, sadly the Bill does not go far enough in a number of key areas, including the detention of vessels in port as a punishment for non-compliance, and in the two areas that could cause maximum damage to P&O’s business model. Those two areas relate to the argument that a ship should be designated as within the scope of the Bill for 52 days rather than 120 days, and to the roster patterns, which are covered by the seafarers charter. That is addressed in the Opposition’s new clause 2.
I am thanking the Minister quite a lot, but I have to say that one of his letters to the Committee did not provide the further detail that we had asked for about the Department of Transport’s review of the Equality Act 2010, including the regulations to prevent nationality-based pay discrimination. The Minister is rolling his eyes because that is outside the scope of this Bill, but it was contained in the EU retained law Bill, so I think it is reasonable to seek clarification.
In the time I have, I want to speak in support of Labour’s amendments and, indeed, those tabled by my friends from the SNP, which I believe would greatly improve the Bill and ensure maximum protections for our seafarers. New clause 2 focuses on the seafarers welfare charter, and I hope that the Labour Front Benchers will put it to a vote. I know that the unions, employers and the Government have been discussing a number of versions of the charter since April as part of the much-publicised nine-point plan, which we very much welcome and which is included in the “Maritime 2050” review. It is intended to set minimum standards on wider employment issues that the Bill does not cover. Again, I must mention roster patterns, crewing levels, pension rights, training and taxation, because the additional savings that P&O in particular made were not just down to saving the cost of seafarers’ wages. Most of the financial benefits were from changed roster patterns, pensions and other savings.
Sir John Hayes
I am very grateful to the hon. Gentleman for giving way. It is kind of him to mention the maritime growth study from 2015, which, as he says, called for a comprehensive reappraisal of the matters he describes. It seems to me that the fundamental point is that terms and conditions cannot be separated from wages. If we are going to make maritime careers attractive to people and build them such that they have the status they deserve, we really do have to include terms and conditions in our considerations.
Grahame Morris
That is absolutely spot on. As I have said, the improvements in the amendments and the new clause have the support of the official Opposition and our friends in the SNP, but I believe that our aims for the Bill also command the support of a number of Members of the Government party.
Given the importance of linking wages and terms and conditions, the nine-point plan and the seafarers charter really should be on the face of the Bill. The Minister has been quite consistent in disagreeing with that and instead aims to publish a voluntary seafarer welfare charter. I had rather hoped that it would have been published in advance of these remaining stages, including Third Reading, but perhaps it will be published later this month.
In a letter to the Committee, the Minister wrote:
“The Seafarers’ Charter is being developed with the maritime industry and social partners to enhance the core employment protections available to seafarers.”
For the avoidance of doubt, “social partners” means the trade unions. That is really interesting, and I welcome the fact that the Government have chosen to adopt the language of the European Union in referring to seafarers’ rights. Again, for the avoidance of any doubt, the maritime industry includes P&O Ferries, the Irish Continental Group, which operates Irish Ferries, and DP World. The Government must be honest about the discussions they have had and are having with P&O Ferries about its future viability. The Minister responded to an issue raised in Committee relating to P&O by writing:
“The Department works closely with ports and operators across the Maritime sector to understand the market and any potential sources of disruption. We have not however made any specific assessment of the viability of P&O Ferries’ routes to or from UK ports.”
The unions have not seen a draft of the charter since August, and neither to my knowledge has Stena Line or DFDS, whose collective bargaining agreements with the RMT and the officers’ union Nautilus formed the basis of the original framework agreement. Safe roster patterns and crewing levels based on the agreements with Stena and DFDS were prominent, but sadly have since been diluted or removed. That puts hundreds more UK seafarer jobs under threat from bad bosses who are ruthlessly undercutting responsible employees, and I include P&O and Irish Ferries in that. I urge the House not to forget that Irish Ferries started operating on the Dover-Calais route in June 2021 with one vessel doing a freight-only service. It now operates a freight and passenger service with three Cypriot-flagged vessels on the same route. That is the reality, and progressive operators that provide decent seafarer jobs are being undercut every day. It is so important that this Bill is properly targeted.
Several hon. Members rose—
Mr Deputy Speaker (Sir Roger Gale)
Order. Is the right hon. Member for South Holland and The Deepings (Sir John Hayes) waiting to speak?
Mr Deputy Speaker
In that case, there are three Members waiting to speak. The debate has to end at 4.12 pm. The last speaker spoke for 25 minutes. At that rate, those on the Front Benches will not get a hearing. I call Sir John Hayes.
Sir John Hayes
I will speak briefly, Mr Deputy Speaker. I did notify Mr Speaker in advance that I was likely to contribute to this debate, not least because, having served on the Public Bill Committee, I was anxious to affirm some of the points made there and to endorse the comments made by the hon. Member for Easington (Grahame Morris) about the concessions the Government have made and the exemplary way in which the Minister has handled this consideration. The Government deserve credit for bringing this Bill to the House, following the P&O scandal, and for the continuing dialogue they have enjoyed with those of us who take a particular interest in these affairs.
New clause 2, which the hon. Member for Easington was referring to when I intervened on him, encourages the Government to look more widely at the terms and conditions enjoyed—perhaps I ought to have said “endured”—by many seafarers. The Minister knows that when I was the Minister responsible for these matters, I commissioned a growth study, which recommended that the Government take a more holistic approach to both the recruitment and skilling of those who go to sea on our behalf. We should remember that, although it is not often described as such, this is a kind of public service. Our merchant navy—our seafarers—do an important job that benefits us all, and that job should be recognised in the way that was recommended by that review.
The review also suggested that
“a vision and set of strategic objectives”
be established for our seafarers. A seafarers charter has been mentioned. I simply say to the Minister that this requires a bigger piece of work than the Bill. The Bill is to be welcomed—it does an important job—but there is a good case for a bigger review of these matters, and if I do not support the amendments today, it is because I think they do not go far enough.
One recommendation in the growth study was an interdepartmental ministerial working group on these matters. That is a sensible way forward given that we are not simply speaking of seamen, but of all those ancillary trades, crafts and industries related to the merchant fleet, all of which deserve proper consideration if we are going to revitalise this important part of our economy. What P&O did was not simply the unacceptable face of capitalism; it was a heartless, soulless kind of enterprise that has no place in a civilised nation. It was roundly condemned by Members from across this House, and rightly so, and it has acted as a wake-up call for Government and others as to what we need to do next.
When the Minister sums up, I hope he will commit to a rethink of how we build and maintain an appropriate merchant fleet, and set out a strategy accordingly. Because time permits no more, I will end on this: when people consider becoming seafarers, the conditions that prevail are an important barrier or incentive, and we owe it to all those whom we want to recruit to the industry to build on the Bill and do still more.
Mr Deputy Speaker (Sir Roger Gale)
Order. I have only just been made aware of the fact—I was unaware of this fact—that the right hon. Gentleman was not here at the start of the debate. He has been here long enough to know that, if he is in that position, then he does not tell the Chair that he is waiting to speak.
David Linden
I rise to speak to new clause 4 in my name and that of my hon. Friend the Member for Paisley and Renfrewshire North (Gavin Newlands). I will come on to the substance of the new clause later, but for now I want to offer my support to the Opposition amendments before the House.
My fundamental position on the Bill has not changed. Yes, I think it is a welcome step in the right direction, but it is incredibly unambitious in tackling the scale of the problems unmasked by the exploitative behaviour of P&O Ferries. It remains a source of extreme frustration to me that, when the P&O debacle unfolded, politicians in this place talked a really tough game, yet the legislation put before the House has not met the scale of the challenge. Even worse, the British Government have reneged on their previous commitments and, I would argue, have watered down the Bill. For example, in clause 3, as it stands, the House effectively gives a green light to port-hopping, which is symptomatic of how this whole problem came about, ergo letting the free market exploit existing weaknesses in legislation and regulation. To be blunt, when it passes, this Bill will be a bit of a missed opportunity, and all that remains for us during its remaining stages is to try to ameliorate it.
For the purposes of brevity, I will refer to new clause 4 as the Hebblethwaite amendment. Throughout Second Reading and in Committee, we spoke about the importance of giving this Bill teeth and of tightening things up. If Members speak to seafarers, as I have done to those in my constituency, they will know that one big source of anger is the fact that senior management at P&O Ferries got away scot-free with their utterly disgraceful behaviour. If we are to go as far as passing this Bill, please let us at least make sure that it has the legislative teeth to deal with the some of these complete reprobates, who have patently exploited workers and should not be deemed fit and proper persons to hold directorship roles.
Let us start with Peter Hebblethwaite, the CEO of P&O Ferries, who was paid £325,000 a year before bonuses. This is a man, as others have said, who proudly admitted to a joint Select Committee of this House that he knew the actions he was undertaking as company director were illegal, but he proceeded anyway, and he even had the gall to say that he would do it all over again if he got the chance. I absolutely agree with the RMT general secretary, Mick Lynch, who said:
“Gangster capitalists should not be rewarded for their appalling employment practices; they should be punished with the full force of law.”
However, herein lies the problem, because passing this Bill without my new clause 4 would mean that Mr Hebblethwaite has carte blanche to again behave as he did in March last year. In summary, there must be individual consequences for directors who seek to exploit workers, and the Bill currently lacks a personal liability clause. That is exactly what my new clause would do by enshrining in statute the ability to deal with these gangster capitalists who seek to ride roughshod over seafarers and other workers.
At its most basic level, Hebblethwaite was responsible for the unlawful sacking of almost 800 seafarers, using a pathetic, cowardly, pre-recorded video message. Despite all that, he is already out there promoting himself again; indeed he was rewarded with a promotion at DP World. What kind of a broken, sick system sees almost 800 seafarers summarily sacked—and sacked unlawfully—yet the boss is given a plum promotion for showing ruthlessness and the sheer brass neck to shove two fingers up to Government?
So, the kind of person this legislation would penalise if they fell foul of the Act is one who admitted breaking the law, and one who used handcuff-trained, balaclava-wearing security guards to remove dedicated, unionised seafarers and replace them with non-unionised workers, many of whom are paid a fraction of the UK minimum wage. Even worse, after experienced crew were fired by Hebblethwaite, the UK coastguard repeatedly detained P&O ships for a lack of crew training, including fire safety and lifeboat drills. But still—yes, still—Hebblethwaite is allowed to retain his position as a company director, which makes a mockery of our legislative framework.
Only by adding new clause 4 to the Bill can we finally deal with these gangster capitalists who Government Ministers had tough words for last year. But what will they do this afternoon when the Division bell rings? Will they vote to bring the likes of Hebblethwaite to heal, or, now that the media circus has moved on, will their protestations be exposed as little more than hollow words?
This Bill is underwhelming and many of us are seeking to give it greater teeth to ensure that never again can a company director like Hebblethwaite take such a calculated risk with people’s jobs and livelihoods, knowing fine well that the consequences of doing so result in nothing more than a few uncomfortable column inches. We need to enshrine in statute a strict deterrent which makes personal liability a reality for the Peter Hebblethwaites of this world, because if this whole sorry episode has taught us anything, it is that bad bosses will continue to be bad bosses unless we hit them where it hurts. It is on that basis that I have tabled new clause 4.
John McDonnell
I have been working for 20 years for this legislation and I cannot tell the House how crushingly disappointed I am. I just did a Hansard search of my statements over the years. Way back in May 2003 I had a Westminster Hall debate on the application of the Race Relations Act 1976 to seafarers, and I said then that
“the disparity is that non-UK seafarers will be paid less than half the wage of the others. On some ships, they are paid less than the minimum wage. We have also seen the behaviour of some companies, such as P&O Ferries, where UK seafarers have been dismissed and replaced by Filipinos to reduce wage rates.”—[Official Report, 14 May 2003; Vol. 405, c. 132WH.]
I said, too, that the “moral case” for legislation was “overwhelming” and that we needed to act now because we had the opportunity to act, but we failed. I raised it again in 2004, when I cited the practice with regard to Irish crews who were replaced by seafarers from eastern Europe on exploitative pay and conditions. I raised it in 2005, 2006, 2007 and 2008; I raised it later in 2010 and 2012, urging the Government to implement regulations to outlaw pay discrimination against all seafarers working in UK territorial waters. It just went on: I can quote this on an annual basis.
As has been said, the proposed legislation has been prompted by what happened, so predictably, at P&O last year. It has been said that the litmus test of this legislation is whether it prevents another P&O. It will not. We may be able to do something on the margins of wages with regard to this, but, just as P&O has done, companies will exploit people on rosters, or the number of hours they work, or how much time they have to spend on ship; they will undermine their pensions, introduce accommodation charges, as other employers have done as well, and reduce crew numbers, which, as has been said, puts lives at risk. That is the behaviour of the worst employers in the shipping sector, and we need to legislate to tackle the worst. The only thing that will prevent another P&O is firm legislation against fire and rehire. A consultation is currently taking place, but we should bring forward measures as rapidly as possible.
Mr Holden
I thank all hon. Members for their speeches. I found it a pleasure to work with everybody, particularly in Committee, to try to improve the Bill and get it into its best possible shape. I hope I have been clear in my responses during the debate that, with the Government amendments we have tabled, we have taken on board a lot of the feedback from Members. I understand that some will be disappointed that we did not go further, but I will come on to address a couple of points that were raised.
On amendment 24, the scope is intentionally tightly drawn because seafarers need to have close ties to the UK. The national minimum wage equivalent will be enforced in our territorial waters only. If we were to expand it to include less frequent services, there is a risk of bringing into scope seafarers working on services that we do not feel have legitimate ties to the UK.
The hon. Member for Easington (Grahame Morris) and others raised the issue of wages. We understand that wages are just one of the issues at stake more broadly, but they are important, which is why we are legislating on them today. On his broader concern, we are working on progressing the nine-point plan. I hope Members welcome the progress we have made, in particular on co-operation at international level. The hon. Member for Sheffield, Heeley (Louise Haigh) did say back in March last year that we needed a binding framework to prevent a race to the bottom on international standards. I hope she can see that we are putting in a new international standard, at least at some level, and that we are working with international partners to improve conditions.
I thank the hon. Members for Wythenshawe and Sale East (Mike Kane) and for Paisley and Renfrewshire North (Gavin Newlands) for their comments on unlimited fines and seafarer welfare. I appreciate their views on wanting things to go further. The hon. Member for Glasgow East (David Linden) raised Mr Hebblethwaite, as did other hon. Members. I have to agree with their comments about the man as an individual. However, we hope that the unlimited fines element for the company will make a real difference to the operation of people in this space.
Mr Holden
I do not have enough time to give way, I am afraid. I was very generous earlier on.
The right hon. Member for Hayes and Harlington (John McDonnell) has raised the issue of the seafarers charter regularly. He and the hon. Member for Easington have raised it on a number of occasions. We will bring it forward in the near future. I hope they will see that it will, in quite a lot of ways, go further than I think they fear it might. Going beyond wages, food and accommodation will be covered under secondary legislation that will follow on from the Bill. They both also mentioned the scope of amendment 32.
My right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes) raised broader issues around legislation. In particular, he wanted an update on the maritime growth strategy. I am encouraged by the positive action taken by the industry so far, but I will raise the matters he has raised with the maritime Minister and ask her to write to him.
The hon. Member for Easington raised a number of issues, but went further than other hon. Members on P&O’s royal charter. I will ask the Privy Council Office to write to him. My understanding is that one has not been revoked since the reign of Charles II. We are now in the reign of Charles III, which is quite a long time after that. There was, apparently, a third-party action in an administrative court in 1853, which is slightly more recent. That could possibly be another route, but I will ask the Privy Council Office to write to him with the full details. That is the best place for that to come from—it is stretching my legal knowledge in that particular regard.
We are confident that the combination of surcharges, refusal of access and criminal offences will incentivise operators to pay seafarers on services within the scope of the Bill at least the national minimum wage.
I hope that I have addressed some of the major issues on which hon. Members have pressed me today. On new clause 4, I ask them to consider the impact that making the fines unlimited would have on individual companies and directors, and to think again about what they are asking for. On new clause 2, I put it to them that it really would not be appropriate to have a review within six months, before even the relevant secondary legislation has been made. On amendment 24, I refer them to the extensive comments that I made in my first speech.
I hope that hon. Members will see fit to pass the Bill without further pressing any amendments or new clauses. If they do press their amendments, I hope we can defeat them and see the Bill through to a Third Reading.
Question put and agreed to.
New clause 3 accordingly read a Second time, and added to the Bill.
New Clause 2
Implementation and monitoring
‘(1) Within six months of this Act being passed, the Secretary of State must publish a report on the implementation of, and monitoring of the effects of, this Act.
(2) The report must include—
(a) an assessment of the impact of this Act on—
(i) roster patterns,
(ii) pensions, and
(iii) wages of seafarers;
(b) a statement as to whether further legislation will be introduced by the Government as a result of the findings of the assessment under paragraph (a);
(c) a strategy for engaging with trade unions for the purposes of monitoring the implementation of this Act, including in reference to conventions of the International Labour Conference;
(d) a strategy for monitoring the establishment of minimum wage corridor agreements with international partners of the United Kingdom, insofar as any such agreement ensures that any non-qualifying seafarer is remunerated for UK work at a rate that is equal to or exceeds the rate that would otherwise be required under this Act;
(e) an assessment of the interaction between this Act and existing international agreements or international maritime law, including reference to any litigation that has arisen as a result of this Act.
(3) The report must be laid before each House of Parliament.’ —(Louise Haigh.)
Brought up, and read the First time.
Question put, That the clause be read a Second time.
Mr Holden
I beg to move, That the Bill be now read the Third time.
I was as shocked as everyone else in this House by the actions of P&O Ferries when, without warning, it sacked almost 800 of its workforce to replace them with cheaper labour. Those actions brought to light the urgent need to improve welfare and working conditions, and this legislation is part of the Government’s nine-point plan to address those issues.
The Bill delivers on the Government’s commitment to ensure that employers such as P&O Ferries, and all ferry operators that frequently use UK ports, are incentivised to pay at least the national minimum wage equivalent while their seafarers work in the UK or in our territorial waters. Although there is no silver bullet to address all the outstanding seafarer welfare issues, the Bill is a vital step in the right direction. At the same time, the Government will make progress on the other pillars of the nine-point plan.
We have been working closely with our near European neighbours on how we can collaborate to improve seafarer welfare and explore the creation of minimum wage corridors. We have been working closely with the French Government on improving seafarer pay, welfare and working conditions, and I am pleased to report that the French Government deposited in their National Assembly a Bill that aims to provide a level of pay protection to seafarers working on certain cross-channel services between the UK and France. It will ensure that seafarers working on certain cross-channel services will have pay protections while in specific parts of French territorial waters, mirroring our own UK territorial waters. We will continue to work together on our respective pieces of legislation to maximise their benefit.
In addition, we have begun our engagement with the Crown dependencies, and we will continue to engage with other European neighbours on strengthening co-operation to bolster seafarer welfare. The voluntary seafarers charter is being developed with the maritime industry and social partners to enhance core employment protections. It will be launched soon and will cover a wider range of seafarer employment standards. We are also supporting the French Government as they develop their own seafarers charter.
All this sends a message to every operator: “If you want to serve UK ports on a regular basis, you must meet our standards.” I reiterate the Government’s intention to continue working closely with ports, the shipping sector and unions as the Bill continues its passage through the House of Commons and, crucially, as we develop secondary legislation.
We are grateful to stakeholders for their constructive engagement and continued close working. I thank officials at the Department for Transport for all their work in bringing the Bill to its current stage and for progressing the nine-point plan, and Baroness Vere, who, as Maritime Minister, steered the Bill through the other place. I thank the parliamentary counsel for their work to draft the Bill and its amendments, and I also thank House staff.
I thank all Members from across the House, especially those who took part in the Bill Committee, for their support for and engagement with this important legislation. I am pleased that the Bill has reached this stage, and I look forward to seeing it in statute.
Louise Haigh (Sheffield, Heeley) (Lab)
This House agreed last March that the action taken by P&O Ferries was a national scandal. As the Minister said, 800 British workers were sacked with no notice. It was the reality of a business model that has been allowed to prevail on our seas for far too long—a business model predicated and dependent on exploitation.
As the Minister knows, Labour supports the Bill’s limited provisions, and we welcome the steps that the Government have taken to improve it in Committee. I know that the Minister has been listening and I thank him for the work he has done on strengthening the amendments that we called for in Committee. Amendments 3 to 10 beef up the enforcement and compliance of the provisions, amendment 26 allows for an unlimited fine to be imposed for breaching minimum wage provisions, and amendment 17 deletes the provision allowing operators to retain their revenue after a fine and ensures that it goes towards seafarer welfare. My hon. Friend the Member for Wythenshawe and Sale East (Mike Kane), the shadow Minister, called for all those amendments in Committee, so we are very grateful to the Minister for this progress.
Fundamentally, however, as we have heard throughout this debate, the test for this Bill is whether it will end the exploitative practices that have become commonplace in the ferry sector for too long. Will it bring those responsible for this scandal to justice? In short, will it stop another P&O? Because six months on, it remains nothing short of a scandal that this Dubai-owned company, which received millions in taxpayers’ money during the pandemic, tore up the rights of British workers while its profits soared. And six months on, the chief executive, his board and those who deliberately and consciously broke the law in plain sight have faced no consequences whatsoever. They trampled over the rights of British workers, they came to this Parliament and boasted about it, they said they would do it all over again, and they have faced no consequences.
Whichever way we look at it, the message this sends to rogue employers around the world is simple: they can attack the rights of British workers on our shores with impunity. Every day Peter Hebblethwaite remains in charge of P&O Ferries, other employers who wish to undermine the rights of British workers will find comfort. The truth is that if P&O Ferries or any of its low-cost rivals wanted to act in precisely the same way again, nothing in this legislation would stop them doing so. That is why we regret that amendments were not made to close the loopholes that P&O exploited in the first place. There was a refusal to consult, and a refusal to notify. The Bill does nothing to address those glaring loopholes.
We know that bad bosses will exploit every loophole, so there can be no doubt, no room for manoeuvre, no scope for avoidance—that is why we pushed to close the port-hopping provisions for good. Regrettably, as the Bill stands, operators fall within the scope of the Bill if they call at a UK port only 120 days within a year—this has been debated at length this afternoon—while regular operators who call at UK ports once a week are excluded from the provision. Given that the Minister has rejected the call expressed so clearly across the House, we hope that there will be very close monitoring of the application of the legislation to ensure that the loophole is not exploited as we fear it will be.
Above all, the P&O scandal was supposed to represent a line in the sand for seafarers’ rights. The current situation means that many ferry operators are reliant on the low-cost crewing model that P&O exploited on 17 March. That exploitation is every bit as much about the conditions and rights of those seafarers as it is about pay. It will shock millions across this country to learn of the shameful model that too many ferry companies employ. People are working up to 91 hours a week and are on board for 17 weeks without any entitlement to shore leave. They are not entitled to any pension, and they are not entitled to any sick pay when outside of UK waters. That is precisely why we need a strong, legally binding seafarers charter on the face of the Bill—one that ends the race to the bottom that P&O Ferries has so cynically exploited.
Regrettably, Ministers rejected that amendment. Will the Minister commit to publishing the seafarers welfare charter—he has been asked to do so many times today—which is the Government’s preferred option for setting minimum conditions for rostering, pensions and other aspects of seafarer employment, and explain why progress in agreeing it has stalled since August? Will he further consider making it mandatory for employers to sign it, so that it is truly binding and drives up conditions across the sector?
Sir John Hayes
The hon. Lady and I are wholly agreed on the seafarers charter, but this Bill may not be the best place for it because, as has been suggested in various contributions, it is broader and wider than the scope of the Bill. But I entirely agree that we need it, and we need it quickly.
Louise Haigh
I am grateful for that intervention. I accept that the scope of the Bill is limited, but it was introduced as an opportunity to address the issues that were highlighted so egregiously in the case of P&O Ferries, so it is a major missed opportunity for the Government not to at least have published it alongside the Bill.
In closing, Britain is a proud seafaring nation. That tradition has been the envy of the world. The ongoing exploitation of these workers on these routes—all too often by entities allowed to be flagged elsewhere—is a stain on that tradition. With this Bill, we have moved a small step forward, which we welcome, but regrettably the chance to end that exploitation once and for all has today been missed.
Gavin Newlands
As I said on Report, it remains profoundly disappointing that the seafarers charter is not with us before this Bill concludes. I therefore remain disappointed by the final version of the Bill. I rather fear, as the right hon. Member for Hayes and Harlington (John McDonnell) said on Report, that we will be back here again following another maritime scandal. That said, I genuinely hope that the Government are right in their assertions on various aspects of the Bill, but in my opinion it remains a missed opportunity.
I would like to thank a few folks. I thank the Clerks for their assistance, particularly Anne-Marie Griffiths, who has been a great help to us and, I am sure, other Members on the Back Benches. I also thank Nautilus, the RMT, Eurotunnel, the Law Society of Scotland, the TUC and the STUC for their assistance with briefings. I thank my hon. Friend the Member for Glasgow East (David Linden), who I have suffered greatly—sorry, who has helped me greatly during the Bill’s passage. I thank Labour colleagues on the Bill Committee and, indeed, the Minister, who has listened perhaps more than most Ministers in Bill Committees I have been on. He gave us a number of concessions, despite my misgivings about where we are with the Bill overall.
One person I will not be thanking is Peter Hebblethwaite. He should be in a jail cell, as far as I am concerned. It is disappointing that the Minister could not accept new clause 4. The one small silver lining is that P&O Ferries’ actions, after a summer that saw British Airways, British Gas et al. treat their workers with utter contempt through fire and rehire threats, finally moved the needle enough to force this Government to act to protect workers against rogue employers. Perhaps we will actually see a meaningful attempt to address fire and rehire next.
Question put and agreed to.
Bill accordingly read the Third time and passed, with amendments.
Higher Education (Freedom of Speech) Bill (Programme) (No. 2)
Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That the following provisions shall apply to the Higher Education (Freedom of Speech) Bill for the purpose of supplementing the Order of 12 July 2021 in the last Session of Parliament (Higher Education (Freedom of Speech) Bill: Programme):
Consideration of Lords Amendments
(1) Proceedings on consideration of Lords Amendments shall (so far as not previously concluded) be brought to a conclusion two hours after their commencement.
(2) The Lords Amendments shall be considered in the following order: 10, 1 to 9, 11 and 12.
Subsequent stages
(3) Any further Message from the Lords may be considered forthwith without any Question being put.
(4) The proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.—(Steve Double.)
Question agreed to.
Higher Education (Freedom of Speech) Bill
Tuesday 7th February 2023
(1 year, 9 months ago)
Commons ChamberRead Full debate Higher Education (Freedom of Speech) Act 2023 View all Higher Education (Freedom of Speech) Act 2023 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: Commons Consideration of Lords Amendments as at 7 February 2023 - (7 Feb 2023)
18:23 - The House divided: - Ayes: 283 / Noes: 161 - Question accordingly agreed to.
The Parliamentary Under-Secretary of State for Education (Claire Coutinho)
I beg to move, That this House disagrees with Lords amendment 10.
Mr Deputy Speaker (Sir Roger Gale)
With this it will be convenient to consider Lords amendments 1 to 9, 11 and 12.
Claire Coutinho
Mr Deputy Speaker:
“Freedom is a fragile thing…it must be fought for and defended constantly by each generation”.
Ronald Reagan said those words in 1967. More than 50 years later, our generation is facing our own battle for freedom: the freedom to express our opinions and debate controversial ideas without fear or favour. Ironically, this is happening in our universities, which traditionally have been the very institutions that have challenged prevailing wisdom, from the effects of smoking to the theory of evolution and our understanding of climate change. That is why I am delighted to be here today to discuss the Higher Education (Freedom of Speech) Bill.
First, I thank my predecessors for all their work in taking the Bill through the House last year, and my ministerial colleagues for their efforts in the other place. This is a contentious subject matter, and I know they have spent many hours thoughtfully considering the points that have been raised on all sides throughout the Bill’s passage. I am pleased that, after discussions, noble peers have now agreed that there is an issue to address, as the noble Lord Collins of Highbury acknowledged on Report. I am grateful to peers for their careful consideration of the Bill.
Today, I ask my hon. Friends and hon. Members to consider the amendments made in the other place. I will address each set of amendments individually, beginning with the statutory tort, which provides a means by which individuals can seek redress through the courts if they believe that certain duties in the Bill have been breached. This measure will be critical to stimulating the cultural transformation that we need. I am grateful to Baroness Barran and Earl Howe for leading debate about the tort in the other place. In the end, the other place voted in favour of amendment 10 to remove the clause containing the tort from the Bill.
I assure the House that we heard very clearly the strength of feeling about the tort. Those feelings have rightly set the context for careful deliberation about the Government’s position now. I have spoken at length to leaders and academics in the higher education sector. I stand firm in my belief that the tort is an essential part of the Bill, and I disagree with its removal.
Munira Wilson (Twickenham) (LD)
The Minister will forgive me if she is coming to this point, but as a Liberal I believe passionately in freedom of speech, as I believe does she. The clause to allow statutory tort was removed by a Conservative former Universities Minister in the other place, with cross-party support. Does she agree that, rather than supporting and encouraging free speech, we risk inhibiting it? Cash-strapped student unions may not invite particular speakers for fear of legal proceedings that they would not be able to defend. Does she agree that she is actually working counter to her own values and beliefs?
Claire Coutinho
Having spoken to many academics and people in universities at the moment, I firmly disagree. They are the people who would like that sort of protection. They think it would give them a legal backstop to the duties that we are placing otherwise in the Bill. Let me reassure the hon. Lady that the Government do not want providers being taken to court without good reason and being forced to defend themselves against unmeritorious or vexatious claims. We do not expect that to happen. The tort has always been considered a backstop.
The vast majority of complaints should be resolved through the new, free-to-use Office for Students complaints scheme, or through the Office of the Independent Adjudicator for Higher Education. In practice, we expect its use to be relatively rare, but it is crucial because it will offer complainants an opportunity to bring a case where they feel that their complaint has not been resolved to their satisfaction by the OfS or the OIA. It will be useful on the rare occasions where a provider, for some reason, fails to comply with the recommendations made by the OfS or the OIA.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
The problem with the tort clause is that it also applies to student unions and student associations, which were always free to invite people that they wish to invite along. Conservative clubs only invited Conservative MPs. They did not have free speech in the club per se; they were Conservative-minded and they did not necessarily invite Labour-minded people. But within the student union and the university as a whole, students were free to have clubs and societies that might be Labour clubs, Marxist clubs, further right clubs or whatever mix they wanted. That is enshrined in the Education Act 1994 and the judgment of Baldry v. Feintuck. The danger is that the tort affects those clubs and will have a chilling effect on student unions, which might say that it is easier for those clubs not to exist, and they will therefore fall out of regulation—
Mr Deputy Speaker (Sir Roger Gale)
Order. If the hon. Gentleman wishes to make a speech, he should put his name in. That was not an intervention.
Claire Coutinho
Respectively, I disagree with the hon. Gentleman. I do not think that would be the case. The Government are committed to strengthening the protection for lawful freedom of speech on campus, as set out in our manifesto. If providers fail in their duty to take steps to secure freedom of speech within the law, individuals who have suffered as a result should be able to secure real remedies, including by means of civil proceedings. For all those reasons, our position is that the tort should be reinstated in its original form for further consideration in the other place.
Amendment 3 was tabled in the other place by the noble Lord, Lord Collins of Highbury, and received support from all sides. It will prohibit higher education providers and their constituent colleges from entering into non-disclosure agreements with staff members, students and visiting speakers in relation to complaints of sexual misconduct, abuse or harassment or other forms of bullying or harassment. I believe that Members on both sides of the House will welcome the inclusion of this provision in the Bill. It can never be right to force a victim of sexual misconduct, bullying or harassment to remain silent, denying them the right to talk about what has happened to them even with their family or close friends. This does not come down to politics, in my view; it is about doing what is right.
Claire Coutinho
I will not, as I have to make some progress.
It is impossible to understand the full extent of this practice—by definition, NDAs too often remain hidden from view—but a 2020 BBC investigation found that nearly a third of universities had used NDAs to deal with student complaints. I agree with those in the other place, who proposed and supported the amendment, that we cannot allow this practice to continue.
Many institutions have already signed up to a voluntary pledge rejecting the use of NDAs in such circumstances. That pledge was launched by the previous Minister for Higher and Further Education and now the Secretary of State for Science, Innovation and Technology, my right hon. Friend the Member for Chippenham (Michelle Donelan), together with Can’t Buy My Silence. However, many institutions have not done so, despite strong encouragement from the Government. This amendment builds on the strong foundation of the Government’s work in this area over the last year and brings a legislative means to end this abhorrent practice for good.
It is important to appreciate that this is not a total ban on the use of NDAs. There are some circumstances where an NDA is appropriate—for example, to protect intellectual property or commercially sensitive information —but as I said, using NDAs to silence victims of this type of conduct is entirely wrong. I therefore wholeheartedly support this amendment. Not only is it vital for the welfare and wellbeing of victims, but by enabling them to speak out and provide information to others about their experiences, it will extend protections to students and others on campus.
I will now speak to the group of amendments concerning the definition of freedom of speech. There was much debate in the other place about whether the Bill would benefit from a more expansive definition of freedom of speech, and peers subsequently agreed a number of Government amendments to that effect: amendments 1, 2, 4, 5, 8 and 9.
Amendment 4 amends the provision in new section A1(11) of the Higher Education and Research Act 2017, inserted by the Bill, which previously set out what freedom of speech in the Bill includes. The amendment refers to the freedom
“to impart ideas, opinions or information… by means of speech, writing or images (including in electronic form)”.
That wording is derived from article 10(1) of the European convention on human rights and is also used in the Bill of Rights Bill. There is also a reference to article 10(1) of the ECHR, as incorporated by the Human Rights Act 1998. The drafting is deliberate in reflecting that freedom of speech in the Bill has broader application than freedom of speech in article 10, because students’ unions are not public authorities and are not subject to the ECHR.
The other amendments are consequential on amendment 4. For example, where previously the Bill referred to “ideas or opinions” in certain provisions, to achieve consistency, those references need to be changed to “ideas, beliefs or views”. These consequential amendments do not change the meaning of the original drafting.
There are also minor and technical amendments made by the Government to the Bill. Amendments 6, 7 and 12 clarify that the term “members” in the Bill does not include a person who is a member solely because of having once been a student of a provider or constituent institution. The term “members” is intended to include those who are not technically staff but are closely involved in university life—in particular, members of the governing councils of universities and also retired academics who are emeritus professors.
However, it became apparent from debate in the other place that some universities and colleges treat their students as members for life—for example, the University of Cambridge. As a result, the Government tabled these amendments to clarify that alumni of providers and colleges are not covered by the Bill. It is not our intention that providers and colleges should have duties that extend so widely, even to people who have no current relationship with them other than as ex-students. These amendments do not affect the position where a current student’s freedom of speech is wrongly infringed, in so far as they may still make a complaint about that even after they have left university.
Finally, amendment 11 distinguishes between new functions imposed on the OfS by the Bill. It will amend the power in new section 69A(2) of the Higher Education and Research Act 2017, inserted by the Bill, so that it refers to “how to support” freedom of speech and academic freedom, rather than “the promotion” of these values. The original drafting replicates section 35 of the Higher Education and Research Act 2017 about identifying good practice relating to the promotion of equality of opportunity.
However, that wording might lead to confusion that this power relates to the new duty on providers and colleges to promote the importance of freedom of speech and academic freedom that is in new section A3 of the 2017 Act, inserted by clause 1 of the Bill. I can confirm that it does not. The OfS will have a duty under section 75 of the Higher Education and Research Act to give guidance on how to comply with the duty under section A3. There is no overlap with section 69A(2). Accordingly, section 69A(2) is different, providing the OfS with a general power to disseminate good practice and advice on how to support freedom of speech and academic freedom. The amendment makes that distinction clear.
I hope my words today have provided clarity and reassurance on the amendments made in the other place. Once again, I thank Members of the other place for the time and scrutiny they gave to the Bill. Our opinions on the statutory tort differ, though, as I still firmly believe it is an essential part of the Bill and an integral part of ensuring that freedom of speech is properly protected in our universities.
Matt Western (Warwick and Leamington) (Lab)
Let me start my remarks with the word “otiose”. Occasionally the words that frequent a debate come to symbolise the essence of that issue, and for our debate on Lords amendments to the Higher Education (Freedom of Speech) Bill the word is otiose. It is not a word I had had the privilege of encountering before, but it is a word that will forever be linked to this Bill.
This legislation is now almost worthy of two candles in the making and baking. It is almost two years to the day that the former Education Secretary but five laid the foundations for the debate we are still having on how freedom of speech should be protected on university campuses. I deeply regret that we are still having that debate, not least because every hour of parliamentary time spent debating the Bill and its provisions is an hour not spent debating the real issues faced by students and wider society.
Danny Kruger (Devizes) (Con)
I would be grateful for some clarity from the hon. Member. He says that the whole Bill is otiose, but does he not recognise any challenge to free speech on university campuses in this country?
Matt Western
We are talking about the Lords amendments, and what is otiose is the debate that was had in the Lords specifically about the tort I am about to speak to.
Every time I visit a university campus, I not only talk to vice-chancellors and senior leadership teams or tour a new teaching block, but insist on meeting students. I meet them, often on my own, to hear their concerns—the unvarnished truth of what is happening on our campuses—and, above all, to listen to their priorities. I can categorically say that not once has a student ever told me that the risk to freedom of speech on campus is their most pressing concern. Why would it be when three out of every four students are currently worried about managing financially, one in four has less than £50 a month to live on after rent and bills, and 10% of students are using food banks to get by. These insights and statistics are all gleaned from a recent survey by the National Union of Students.
It is now a sobering 637 days since the Bill was introduced in this House—incidentally, the longest that any Bill sponsored by the Department for Education has taken to progress through the House since 2010—and during that period we have had three Prime Ministers and five Education Secretaries. The higher education brief has been bounced around the portfolios of five different Ministers like a political pinball but without the wizard—so much so that I find myself in the somewhat absurd position of debating a Bill about freedom of speech on campuses and academic freedom with a Minister for children, families and wellbeing.
Sir Desmond Swayne (New Forest West) (Con)
I know that students have all sorts of quite proper concerns about their budgets, but does the hon. Member not acknowledge that there is a tremendous problem with a form of totalitarianism that, instead of encountering opposite views and challenging them, simply tries to silence them? Is he not appalled by the fact that Balliol College—Wesley’s own college—banned the Christian Union, with all the dangers that Christianity might pose to those poor delicate students?
Matt Western
I thank the right hon. Member for his comments, and for the style and energy that he brings to such interventions. The cases the right hon. Gentleman has been talking about are exceptions. Indeed, Office for Students statistics show how few cases there have been. I was making a point about the amount of parliamentary time that has been devoted to this over two years when there are much larger issues at play on our campuses.
Sir John Hayes (South Holland and The Deepings) (Con)
The hon. Gentleman says these are marginal considerations. I do not know whether on the visits he has described—which sound picturesque, as well as being, no doubt, informative—he ever meets members of the University and College Union, because its survey on this matter found that 35% of academics self-censor for fear of the consequences of saying what they really believe.
Matt Western
I talk to members of all university communities of course, as the right hon. Member would expect: I talk to the senior leadership teams, UCU members, Unison members, those who are non-affiliated, and also students. I listen to all points of view across the piece. I am sure that occasionally the right hon. Member did not say what he would have liked to have said in a Cabinet meeting when in power, but that is the nature of how society works and there should be no difference between what happens on campuses and in wider society.
Anyone would think that the Minister’s colleagues have come to the fair conclusion that the Bill is more about political posturing than delivering on students’ priorities. Let me be clear for the record: this Higher Education (Freedom of Speech) Bill and its passage through both Houses is a product of a Government who are out of touch, out of ideas and out of steam. It has been a masterclass in how not to pass legislation.
Lloyd Russell-Moyle
Members opposite say the banning of the Christian union was a disgrace, but is there not a real danger with this Bill that all societies will be banned from campus because the university will not then have to worry about regulating them, so it will exacerbate the problem, not help it?
Matt Western
I thank my hon. Friend for his important intervention. He is absolutely right, and he and many others on our side made that point repeatedly in Committee about the unintended consequences of the Bill, which would have a chilling effect. Those are the thoughts of Lord Willetts and many others in the House of Lords as well, who made it clear that that would be the result, particularly among smaller institutions, that may be less familiar to certain Members across the House, which do not have the resource or capacity to be able to administer these measures.
Ministers are choosing to ignore the widespread condemnation of the tort from Members in this place, Lords, sector representative bodies, students, trade unions and academics. They are seemingly prepared to carry on regardless. As recognised by so many, the tort is a clause primarily in search of a problem, but perhaps that is the point for Ministers. It is otiose; that is to say it serves no practical purpose or result.
Put simply, the objections to the tort raised in the other place are damning. I am well aware that this Government do not value expertise or experts, but, my God, they should. Their predisposition towards certain right-wing think-tanks has cost this country dear, and in terms of legal matters, or indeed the tertiary education landscape, the intellectual heavyweights in the other place, comprised of former vice-chancellors, current chancellors, former Supreme Court justices, ex-Masters of the Rolls and many former Education Secretaries and universities Ministers, have a brain quotient that is certainly higher than two. Their collective experience dwarfs that of the current Education team, and for that matter my own experience. It is for that reason that I take very seriously the warnings and advice given by peers in the other place, and, importantly, not just from one party but from across the House. There is perhaps no other clause in the Bill that provokes such widespread condemnation as clause 4, allowing individuals and groups to sue universities for losses resulting from a university or student union failure to secure their free speech duties.
Speaking of brains, Lord Willetts, a former Minister for higher education, believes that the risk of legal challenges would be terrible for freedom of speech in our universities, as people are likely to keep their heads down, not invite speakers, lie low and stay out of trouble. In other words, the prospect of vexatious litigation will have unintended consequences.
Lord Grabiner, an eminent jurist, went further and feared that the clause could be used by
“well-heeled trouble-makers for whom the costs issue would be of no concern at all.”—[Official Report, House of Lords, 14 November 2022; Vol. 825, c. 709.]
That may all be well and good for well-funded free speech litigators, perhaps with the unlimited support of the Free Speech Union, but for small institutions and higher education providers in particular, it will be crippling. He poses the question we all want the answer to:
“Why would the Government think it appropriate to subject our universities and student unions to any of this legalism?”—[Official Report, House of Lords, 7 December 2022; Vol. 826, c. 210.]
Perhaps the Minister can give us a satisfactory answer today.
Even if we agree with the principle of the statutory tort, it is totally unworkable in its current form. The ex-Master of the Rolls, Lord Etherton, identified two glaring deficiencies in the tort as it stands. First, it is not clear what level of loss or damage is required for a successful claim. Secondly, it is also not clear what category of persons is entitled to make a claim. Lord Etherton concluded that
“it is extremely difficult to see what kind of order a court could make in practice that would deal with the situation that has arisen in relation to the non-securing of freedom of speech.” —[Official Report, House of Lords, 14 November 2022; Vol. 825, c. 706.]
That leaves the tort as both undesirable and unworkable.
As well as being undesirable and unworkable, the tort has the potential to be actively harmful to the promotion of free speech on campus and hence totally counter- productive, as I was saying a moment ago. The Russell Group has reiterated its warning that:
“Managing the potential for litigation would…likely create significant administrative and resource burdens without adding to the enhanced protections for free speech introduced by the new OfS complaints process.”
In other words, we could have the worst of both worlds: no liberalising effect on free speech on campus, but with all the associated costs of legal action.
One student union I heard from recently informed me that there is currently no budget allocated for paying for legal action. Legal advice would need to be paid for out of its reserves. To make matters worse, it claimed that it would also be impossible or difficult to obtain insurance for such legal action. In a sense, therefore, student unions will be doubly bound, being required to build up large enough reserves in preparation for fighting such lawsuits, while also having to engage in expensive legal battles. Using that money will inevitably detract from student welfare budgets, SU facilities and the much-valued nature of campus culture. I return, once again, to the ever-prescient question posed by Lord Grabiner in Committee in the Lords:
“Why would the Government think it appropriate to subject our universities and student unions to any of this legalism?”
Jeremy Corbyn (Islington North) (Ind)
My hon. Friend is making an excellent contribution to this debate. Does he agree that the problem is that this will diminish the campus experience and the quality of university life for many students, and that those who can afford to relocate their activities to expensive private locations outside campus will do exactly that, while the rest will essentially be in fear of legal action and will therefore not be ensuring that there is a challenging intellectual environment on all our campuses and in all our universities, as ought to be the case?
Matt Western
I thank my right hon. Friend for his intervention. He is absolutely right that these sorts of events could go underground, with restricted access, and, because they will be displaced off campus, they will be beyond universities’ jurisdiction.
I could go on and on about the issues with the tort, but lords from across the House of Lords made them absolutely clear. Consistently attacked from numerous angles, from numerous sources and for numerous months, the Bill has taken two years just to get to this stage. It is flawed in so many ways, although that increasingly seems to be the hallmark of this Government. Even the Minister in the Lords, Earl Howe, was prepared to concede on making the tort a remedy of last resort and limiting it to those who have suffered a loss. In what is perhaps the shoddiest part of the Bill’s progress so far, the Minister before us is now asking us to disregard her own counterpart’s suggestions for improvement in the other place, in the light of no new evidence. If it did not have such potentially damaging consequences for students and universities, it would be ludicrous. It is for the reasons I have just outlined that Labour will oppose the inclusion of this undesirable, unworkable and counterproductive tort in the Bill in the interests of students, staff and even freedom of speech itself.
Gareth Bacon (Orpington) (Con)
I rise to support the Bill in general, and specifically to support the Government’s decision to reject Lords amendment 10.
It continues to be a matter of great regret that in a country like ours, it should be necessary to legislate to protect free speech, but we have reached a point where it clearly needs to be done. Freedom of speech is a cornerstone of any democratic society, and in a society like ours it should be a given. Throughout history, philosophers have understood that creativity and progress in a society depend on acts of intellectual rebellion, dissent, disagreement and controversy, no matter how uncomfortable they may be. To a very large degree, freedom of speech matters most when it is controversial, because this is how pre-existing thinking can be challenged and new ideas can develop. In a democratic and free society, discussion, challenge and debate are healthy, and our universities have traditionally been at the forefront of this battle of ideas.
As I stated on Second Reading, university should be a place where ideas are freely exchanged, tested and, yes, criticised. However, in recent years, free speech has increasingly been eroded, particularly on university campuses. I served on the Public Bill Committee and the evidence we took from eminent academics was deeply worrying, so much so that I really do wonder if the hon. Member for Warwick and Leamington (Matt Western) was actually listening. Evidence was given of the chilling effect in universities, where academics feel obliged to self-censor for fear of the consequences of daring to express views that do not accord with an increasingly intolerant monoculture.
One of our witnesses was Dr Arif Ahmed, reader in philosophy at the University of Cambridge. He informed the Committee, as my right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes) said, that a 2017 University and College Union survey found that 35% of academics felt obliged to self-censor. To paraphrase Dr Ahmed, many academics are not speaking their minds or pursuing important research, simply because they fear facing disciplinary action from their university or being ostracised by their peers. As Professor Matthew Goodwin of the University of Kent told the Committee, not only does the issue affect academics, but a quarter of students are self-censoring.
If academic freedom is under threat, so too is freedom of speech. Another of our witnesses was Professor Kathleen Stock; she was still at the University of Sussex at the time, but shortly afterwards she was finally hounded from her job after enduring an entire year of bullying, marginalisation and intimidation. In recent years, there have been repeated accounts of speakers whose views do not correspond with the prevailing monocultural mindset being disinvited from speaking engagements, of reading lists being censored, of publishing contracts being cancelled, of reputations being trashed, and of “safe spaces” being created in which nothing but the prevailing view is permitted to be heard.
The truth is that it is not about protecting delicate sensibilities from offence; it is really about censorship. After all, in a free society people can always protect their own sensibilities if they wish: by not going to the speech, by not watching the film, by not reading the book. Nobody is compelled to engage if they do not wish to do so, but when people are explicitly or indirectly no-platformed, those who take such decisions are not protecting themselves; they are denying others the right to hear those people and challenge what is said. That is exceptionally damaging. If dissent and debate can be silenced at university, they can be silenced elsewhere.
As I outlined at the beginning of my speech, I cannot support Lords amendment 10, which would delete clause 4. Clause 4 is what gives the Bill its teeth. Removing it would reduce much of the Bill to impotence; retaining it is crucial to securing the cultural and behavioural shift needed in our higher education sector. The Minister said:
“I stand firm in my belief that the tort is an essential part of the Bill.”
I entirely agree.
I will conclude by quoting George Orwell:
“If liberty means anything at all it means the right to tell people what they do not want to hear.”
George Orwell’s words remain just as apposite today as when he wrote them nearly eight decades ago. The Bill will protect that liberty, and I fully support it.
Layla Moran
I rise to speak in support of Lords amendment 3. I am frankly delighted that it has received Government support. It will do what I and others across the House have for some time been calling for, which is to ban the use of non-disclosure agreements by universities in cases of sexual harassment, sexual abuse, bullying and other forms of misconduct.
I thank everyone who has worked on the campaign. I thank Lord Collins for tabling the amendment; the right hon. Member for Basingstoke (Dame Maria Miller) and the hon. Member for Birmingham, Yardley (Jess Phillips), who have campaigned with me; and Zelda Perkins and Can’t Buy My Silence for their tireless campaigning over the years. More importantly, I want to thank the young women, particularly Ffion from the University of Oxford and everyone involved in the campaign It Happens Here—those brave survivors who have spoken out about their experiences.
My involvement began as the constituency MP for some of those young women, who first came to me in 2018 with shocking testimony about gagging clauses being included in agreements signed in the wake of an instance of sexual assault. One woman had to sign not an NDA—this is a critical point—but a no-contact agreement that prevented her assaulter from having access to her accommodation, among other safety measures. That agreement, which was meant for her safety, included a clause that prevented her from making any information public about the assault, or indeed about the investigation. It was so poorly explained that she took it to mean that she could not even speak to her GP.
Jeremy Corbyn
The hon. Member is making an excellent point. When the woman raised those issues with the university, how did it possibly defend the idea that it would offer such protection to somebody who had clearly been found molesting other students, harassing them or worse?
Layla Moran
I have since spoken to a number of heads and principals of colleges. Many are not defending such behaviour; they are often coming from a place of wanting to try to protect both students—it is often another student who is involved. It comes from a good place, but the consequence is frankly devastating. That is why Lords amendment 3 is so necessary.
The other element that needs to be improved in most colleges and universities is the complaints process itself, which is deeply flawed. All it does is cause young women —and those who have spoken to me have invariably been young women—to feel retraumatised as a result of the process that they have had to undergo. Because the safety measures were included, this particular young woman felt forced to sign the agreement. She was therefore silenced by a process that was supposed to protect her. Other students have told me similar stories. One said that the gagging clause
“felt like the icing on the cake of a ridiculous system that had let us down. The disciplinary process had failed to sanction a rapist, but was threatening us with sanctions if we talked about it.”
How on earth can that be right?
The pledge launched by the campaign group Can’t Buy My Silence, in conjunction with the Department for Education, was certainly welcome—76 universities have signed it so far, committing themselves to ending the use of NDAs in cases of this kind—but, like other campaigners, I feared that it did not go far enough. It was particularly concerning that there were no sanctions for breaking the pledge, and it was largely dependent on universities’ opting in. Oxford’s It Happens Here—Oxford is the university with which I have been dealing with the most—has noted which Oxbridge colleges have signed it. The Minister may be shocked, as I was, to learn that there are only four, three at Oxford and just one at Cambridge: three out of 44 colleges and one out of 33. Moreover, that is replicated in institutions throughout the country. The take-up of the pledge has been poor, which is why we needed the Government to step in with this legislation. However, I hope other Members agree with me that this should not apply only to universities, because the same thing is happening in workplaces all over the country, including charities and voluntary organisations.
This is, I hope, the start of something much bigger. Last year I tabled a private Member’s Bill which would ban the use of NDAs and confidentiality agreements by any organisation or institution in cases of sexual assault, harassment and bullying. We are looking for a vehicle with which to bring the whole shebang back; the Victims Bill may be one, but we are looking for others. My Bill —which I recommend the Minister to push to other Departments that have not quite got there yet—is modelled on legislation that has already been passed in Prince Edward Island in Canada. A similar Bill is making its way through the Irish Senate, and the Speak Out Act was passed in the United States in November, so we would be very much in line with similar countries.
I am of course pleased that the Government are now supporting this move in the context of universities, but I want to ask the Minister some specific questions. First, does it apply only to legally drafted non-disclosure agreements, or will it also cover no-contact agreements in the confidentiality and gagging clauses? It is worth pointing out that those are already non-binding legally, and would not pass muster if they were brought to court. By what mechanism can we ensure that these things will definitely no longer happen? For survivors, a gagging clause has just as much impact as any legally binding non-disclosure agreement. We know that such clauses have become boilerplate language in no-contact agreements between a survivor and perpetrator, and we must ensure that new legislation clamps down on this extremely harmful practice. Silence cannot be a condition for safety.
I would also like some clarification of the Department’s plans for implementing these measures—and, in particular, the timeline—and of how the legislation will affect existing NDAs that have already been signed by students. Will it be retrospective, or will it apply only to future agreements? The message to universities is clear, but these are specific questions that I am being asked by young women who have already signed these agreements.
The survivors who have spoken to me are being taught that their pain and their voice do not matter, and that the reputation of an institution is more worthy of protection that they are. We should be taking—and are taking—all possible steps, and wasting no time, to stop this happening. We all know that there is a difference between the time when an amendment is passed and the time when it is enacted. I urge the Minister please to pass and enact this quickly.
Finally, please will the Government back my private Member’s Bill? It is a Bill that mimics a Conservative party pledge in, I think, 2017. There is cross-party support for this across the House and it is now time to ban these non-disclosure agreements, not just in universities but in any workplace and, frankly, anywhere.
Miriam Cates (Penistone and Stocksbridge) (Con)
I rise to speak in favour of the Government’s motion to disagree with Lords amendment 10. As has been mentioned by other hon. Members, this Bill has been introduced because freedom of speech and academic freedoms are under threat in our universities. That has been well evidenced during the passage of the Bill and, as has already been mentioned, a recent report shows that 35% of British academics surveyed self-censor, and Office for Students data shows that 193 speaker requests or events at English universities were rejected in 2021, compared with just 53 in 2018. And of course there have been numerous high-profile cases of cancellation, including those of Helen Joyce, of the Israeli ambassador and of my right hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi) when he was Education Secretary. This Bill is clearly very much needed.
Paul Blomfield (Sheffield Central) (Lab)
I rise to oppose the motion to disagree with Lords amendment 10.
There ought to be a basis for cross-party agreement, as there was in the Lords. I sense from many of the contributions so far that there will not be cross-party agreement, and that wiser heads are not prevailing on the Conservative Benches—those wiser heads are being kept below the parapet.
I read the letter that the Minister circulated yesterday, in which she acknowledged that creating a statutory tort
“has been a contentious measure throughout the passage of the Bill”.
That is something of an understatement. She went on to acknowledge that, in what she must recognise was a thoughtful and serious debate in the other place, many peers had
“raised concerns that the measure would subject higher education providers, colleges and students’ unions to costly, time consuming and unmeritorious or vexatious claims”.
But in her letter she just brushed that aside, on the basis that she had spoken to many academics who agreed with her, which is a rather interesting example of cancel culture at work, as she casually disregarded views that do not fit with her own.
We should be clear in this debate that, on both sides of the House, we all strongly believe in freedom of speech within the framework of the law. We should particularly cherish it in our universities, but we should also recognise the difficulties associated with legislating to that end. The right hon. Member for Chippenham (Michelle Donelan), the former universities Minister and, as of today, the new Secretary of State for Science, Innovation and Technology, saw those difficulties for herself when she explained the Bill’s operation at the start of its long life.
The hon. Member for Orpington (Gareth Bacon), who is no longer in his place, said he is concerned that we have reached the point at which this sort of legislation is necessary. How we manage the rights and obligations of free speech has been a live issue of concern for many years, and not simply in relation to universities. That is why Parliament has framed the limits of free speech.
In a previous life, I was responsible for co-drafting the University of Sheffield’s code of practice to ensure compliance with section 43 of the Education (No. 2) Act 1986, and I oversaw its operation in providing a platform for speakers with whom I profoundly disagreed. There is an irony in that, because the Government soon came to regret the way the Act’s provisions were used to secure platforms for those with whom they profoundly disagreed, and they raised those concerns with universities and students’ unions.
Some of the invitations to speakers after the passage of the 1986 Act were made vexatiously by those who were more interested in testing the legislation, or in trying to create embarrassment for a university and its students’ union, than in the issue under discussion. The fact that 36 years on we are debating the same issue is a reflection of the difficulties of making laws in this area, and that is something we should think about carefully when there are good alternatives.
More recently, I served on the Public Bill Committee for the Higher Education and Research Act 2017, and I recall expressing my concerns over aspects of the Government’s proposals for the creation of the Office for Students. I argued with the then Conservative Universities Minister, now Lord Johnson of Marylebone, who made the case for the Office for Students as the way of regulating the sector. So I was interested to read his contribution to the debate in the House of Lords, where he argued that clause 4 was not only unnecessary but would “undermine the regulator”—the regulator that the Conservative Government have put at the centre of the higher education architecture in this country. He powerfully made the case that the OfS can deal with these issues more effectively than civil litigation by imposing
“conditions of registration on any provider that falls short of the enhanced duties created by this Bill.”
He went on to say that those conditions of registration provide a wide range of
regulatory tools…from simply seeking an action plan from a university…through to imposing fines on an institution if it does not deliver”.—[Official Report, House of Lords, 14 November 2022; Vol. 825, c. 716.]
I was also struck by the contribution of another Conservative former Universities Minister, Lord Willetts, who highlighted the role of the Office of the Independent Adjudicator, in addition to the OfS, in providing a “clear process” to which any student can turn with a concern about any potential suppression of freedom of speech. But far more importantly—this point has been made and Ministers would do well to pay regard to it—Lord Willetts argued that the provisions of clause 4
“could have exactly the opposite effect to the one intended.”
He set out two ways in which this might be the case. The first was that
“people who are thinking of…inviting speakers or organising events—
would be—
“inhibited from doing so for fear that they could potentially find themselves caught up in complicated and demanding legal action”.
I have to say that in a different way I saw that chill factor in operation as a result of the 1986 Act.
Secondly, Lord Willetts highlighted the costs of litigation and the uneven resources available to those taking and defending action, pointing out that there is a “real risk” for student unions that would not have the resources to defend themselves against litigation. As he said, student unions
“are an important place in which students with a wide range of political views have their first experience of organising debates, exchanging ideas and disputing.”—[Official Report, House of Lords, 14 November 2022; Vol. 825, c. 713.]
He pointed out that the “threat” of potential litigation that could bankrupt a student union would not serve the interests of freedom of speech in our universities.
So two former Conservative Universities Ministers—the two who have arguably had the most impact on our higher education system over the last 13 years—are both saying that the tort provided by clause 4 is wrong and both back Lords amendment 10. It did not stop there. Lord Pannick argued that effective regulation from the OfS is quicker and cheaper than civil litigation. My good friend Lord Blunkett, who has talked about his experience of being no-platformed as a Secretary of State, made the case that the tort will cause “more confusion” and “difficulty”. Lord Grabiner has been mentioned and, as somebody who should know, he said that High Court judges are less well placed than the regulator to deal with these issues. Lord Macdonald, as a former Director of Public Prosecutions, said that the clause, far from encouraging free speech, will have a “chilling effect”.
The case could not be clearer. Creating the tort would cause confusion, slow down redress, open the terrain to vexatious claims, waste resources, undermine the regulator that this Government have put in place and, above all, create a chill factor that would undermine free speech. We should come together tonight to reject clause 4 and support Lords amendment 10.
Danny Kruger
I rise in support of the Government and am pleased that they have decided to reinstate the clause that includes the tort. I was taken aback by the shadow Minister’s suggestion that such a provision was otiose. He suggested that there are much larger issues that the House should be debating. I think that this is where we see a real difference between our parties. The fact is that we think that few things are more important than the quality of cultural and academic debate in our country, and the context in which young people are educated and brought up. But a spirit of oppressive cultural conformity has taken root across the institutions of the United Kingdom and, worst of all, it has taken root in our universities, where freedom of speech should be protected.
Lloyd Russell-Moyle
I draw the House’s attention to my entry in the Register of Members’ Financial Interests. I receive donations from the University of Sussex to provide services for some of its politics students, and I received donations at my first election from the University and College Union. I am also a trustee at the University of Bradford student union, and we had our trustee board meeting today.
One worry for student unions, such as the one that I sit on in Bradford, is how we would manage this kind of law. Only a few years ago, the Prevent laws caused us real problems in relation to inviting speakers along to the university. I remember once trying to bring in a speaker who had served time in prison. We wanted him to talk to the students about the folly of his ways—the stupidity of radicalisation. The very best person to speak to students who are likely to be radicalised is probably someone who has been radicalised and has come out the other side. The paperwork that had to be completed for this speaker meant that the students from the Islamic society felt that it was just too complicated to do, so they backed off and self-censored.
The problem with the Bill is that all such student societies will self-censor. Students will say, “It is too complicated to invite a speaker in. It is too risky for student unions,” so they will just not be invited. There will be equal speech because there will be no speech. That is the reality of some of these clauses, particularly the tort element because it puts liability not only on trustees like myself—I am big enough and can take it—but on student trustees who are finding their way in the world. To put such liability on them so early on is rather dangerous.
The protections are already there in previous education Acts. We heard about the 1986 Act, as well as the 1994 Act, which requires student clubs to receive equal and fair funding across the board, no matter what their political persuasion. Those Acts have been tested in the courts. The settled situation is that if a Conservative society in a university student union wishes to register and receive money, it must be given the same opportunity to do so as any other society. If a society is prevented from doing so, it is likely to win in the courts under current legislation.
The problem with including a tort that does not require an element of proven financial damage is an ambulance-chasing solicitors charter. That is the reality. Any single grievance that does not have to demonstrate a financial impediment can of course whip up cases. Most student unions, like my own, which broke even just this year—in fact, we had a slight deficit because we are still recovering from covid at the University of Bradford, and student union activities were reduced and are only just coming back to full force—do not have the finances to fight these things, so they will settle.
Lia Nici (Great Grimsby) (Con)
I am somewhat confused, because the Bill is not designed to limit freedom of speech; it is actually there to protect it and to ensure that people are not cancelled—there have been some very high-profile cases of that. It seems to me that the hon. Gentleman and some of his colleagues misunderstand what the Bill is about.
Lloyd Russell-Moyle
I sat on the Bill Committee and heard the evidence. Some, which I supported, talked about the unnecessary nature of the Bill, much said it would be unhelpful, and a lot said it would impose a chilling effect. I have no problem with a requirement for free speech. I have no problem with, for example, allowing the Office for Students to determine these matters. In fact, I would like an appeals process to be part of that, which would strengthen the provision by allowing people to seek resolution. Instead, the evidence we heard on the tort aspect was that it would be chilling. Rather than take the risk, people would not do anything.
We know that that has happened before. Many Acts have been passed in this place that have had a chilling effect, meaning that people do not take action. I want to see vibrant debate in my universities. That has always happened, such as when University of Sussex students in the 1970s blocked the American ambassador from coming on campus until he condemned the war in Vietnam. Those activities are also about free speech; students’ ability to express their heartfelt beliefs and desires must be allowed as well, but such activities would be prevented under the Bill.
That is why I am against the Government’s move to reject the Lords amendment, although I welcome some of the other moves, particularly on non-disclosure agreements, that we put in initially. I wish the Government would come together with us to remove the tort clauses and to provide other appeal processes, so that people can seek proper justice that is not just about financial recompense.
Sir John Hayes
I refer hon. Members to my entry in the Register of Members’ Financial Interests in relation to the University of Bolton.
Learning is, through exploration, the discovery of truths. Of equal importance to the answers learning provides are the questions it poses. For the emergence of understanding is a process, not a moment—a journey, not a destination. Such is the delight of being inspired to know more that it provokes an open-mindedness to all kinds of possibilities.
That is the spirit that speakers across this House have enjoyed and recommended to us, and yet across universities that spirit is being frustrated by the kind of intolerance that, rather than opening minds, aims to close down debate. This Bill must provide a significant shield and a sword to those who are determined that universities remain places where ideas are discussed freely and can be tested through critical analysis.
W. B. Yeats said, “Education is not the filling of a pail, but the lighting of a fire.” We must not quench the fire of learning because we regard some ideas or views as contentious or controversial. Some may alarm. Some may cause offence. Yet without the ability to alarm and to disturb and to shock, there is no ability to inspire and to move and to enthral. They are two sides of the same coin.
The practitioners of intolerant identity politics have successfully cancelled a litany of students and academics who dared to espouse particular understandings of race, gender and sex—understandings, by the way, that are commonly held by our constituents—taken as read by most of the people we represent.
Those without wealth or influence to resist have too often been left at the mercy of the mob. It is a bitter irony that one academic who came forward to give evidence when we discussed the Bill in Committee, Kathleen Stock, was subsequently driven out of her job by a combination of militant students and weak-minded academics who refused to support her. She told us, along with my friend Arif Ahmed, that there is a climate of fear and a culture of silence, as academics self-censor for fear that what they say might leave them at the mercy of university authorities that use all kinds of techniques to silence them. So, this Bill is critical and the tort is critical to its effect.
Sir John Hayes
I happily give way to the hon. Gentleman, who served on the Committee.
Lloyd Russell-Moyle
When we served on the Committee, did we not agree that one thing this Bill lacked was security of tenure for academics—very rare now—which would provide a bulwark against a chilling effect? Is that not something we could seek agreement on?
Sir John Hayes
I agree with the hon. Gentleman on that, but, having declared my interest that I am employed at the University of Bolton, I had better not make too forceful a point about it.
Many more academics we do not know of will have faced similar pressures, in untold everyday stories of students and academics that, whether through fear or otherwise, go unreported or unresolved. That is why it is so important to reject the Lords amendment that would abolish the new statutory tort proposed in the Bill as it was originally drafted. It is disappointing that the academic establishment in the other place made a case against that—disappointing, but unsurprising, because of course these people look after their own. I am very pleased that, as my hon. Friend the Member for Devizes (Danny Kruger) said, the Minister has resisted those calls. She has shown determination, insight and, I must say, a degree of courage in doing so, because it is easy to roll over when the big beasts in the other place roar in defence of the academic establishment.
Jeremy Corbyn
I could not disagree more with the right hon. Member for South Holland and The Deepings (Sir John Hayes)—[Interruption.] It is not the first time—I understand that—and possibly not the last. The effect of the Government’s proposal to disagree with the Lords amendment will be what he spoke about: a diminishing of academic experience and variety of activities in campus life.
We have heard well-informed contributions from the hon. Member for Oxford West and Abingdon (Layla Moran) and my hon. Friends the Members for Brighton, Kemptown (Lloyd Russell-Moyle) and for Sheffield Central (Paul Blomfield), all of whom have direct experience of what goes on in their local universities and other universities. The fear of legal action will cause a chilling effect on societies, organisations and part of the student union when inviting speakers. That is surely a bad thing.
Is it not the principle of going to university that a person—usually a young person—gains the experience of a wider academic, intellectual environment? As the hon. Member for Penistone and Stocksbridge (Miriam Cates) pointed out, there have been many controversial debates on university campuses over a very long time. I do not have a university degree—I did not graduate—so I do not know what that experience is like, but I do visit many universities and speak at them often, and I find that the challenging debate changes over the years.
In the ’70s, raising the issue of climate change was seen as wacky—it was way out there; something that people would not even think about—but gradually, over the next decade or so, the idea that what we were doing to the environment was seriously damaging to life on this planet gained traction, more debate happened, and so on. Those speakers were probably deeply controversial at the time. Now, it is the other way around.
Jeremy Corbyn
I will come to the hon. Lady in a second. Now, the climate change deniers are seen as controversial in the same way. Although I have a view of my own, I am quite happy to listen to both sides, and I think that students should and must have that right and experience.
Jeremy Corbyn
I think the hon. Member for Great Grimsby (Lia Nici) asked first. I am a bit worried about this debate getting too excited. I know that you want to bring it to a conclusion very soon, Madam Deputy Speaker, so I will be brief.
Lia Nici
I have experience in universities, having been in education for 22 years and taught for three different universities. On the right hon. Gentleman’s example of climate change in the 1970s, is the difference not that the people who were debating it were not cancelled as people are being today?
Jeremy Corbyn
I am pretty sure there were people who tried to cancel them at the time. I was not at university and I cannot make any further comment on that.
My plea is simple. We have heard today from Members who have a lot of sensible and direct experience. The issues raised by the hon. Member for Sheffield Central are very important, including that of freedom of speech and the limits placed on it. At what point do we allow a fascist, a Nazi, to speak? At what point do we allow a holocaust denier to speak? Those issues are best dealt with by codes of practice, rather than by threats of legal action. Surely codes of practice in colleges and universities, and discussion and debate, bring about a better resolution than enabling those who can afford it to take legal action.
Student unions that are frightened and nervous about any action that might be taken against them simply go down the road of caution and reduce, limit and inhibit the student experience. Surely we want our young people to be brought up listening to and developing challenging ideas, and being inventive and creative. Surely that is what education should be about, not the straitjacket of being told what to think, what to say and what to know. It has to be that approach—[Interruption.] The right hon. Member for South Holland and The Deepings is waving his arms around. I am concerned.
Sir John Hayes
We think that, too. That is the very purpose of the Bill—to open minds, to open debate, to have free speech. We believe in what the right hon. Gentleman is articulating, so perhaps he should vote with us tonight.
Jeremy Corbyn
I am sorry to disappoint the right hon. Gentleman, but I cannot vote with him tonight because I think the Bill will have the opposite effect. I wish it were the other way around, but it is not. We should recognise that the Lords amendment is a good one. It would make the academic experience better, not worse, and it would be a good idea if, for once, we supported it.
Claire Coutinho
I thank all Members for their contributions and particularly eloquent representations. They have shown how important it is to the wellbeing of our society that we can agree to disagree, that we can debate controversial and unpopular ideas, and that we recognise that the only way to change people’s minds is to win arguments, not to silence them.
I have listened to the concerns about the tort. Those who speak about a chilling effect speak as if there is not already a chilling effect on campus. That is why we think it is such a vital legal backstop. The hon. Member for Warwick and Leamington (Matt Western) made the astonishing if not surprising claim that the Bill is not needed at all. He may wish to speak to his party colleague the noble Lord Collins of Highbury, who has said that, through the dialogue and discussions that he has had as the deputy Leader of the Opposition in the other place, he accepts the need for the Bill. I suggest that the hon. Gentleman has those discussions himself.
Matt Western
I am sure that Hansard will have recorded that when I used the word “otiose”, I was talking about the tort.
Claire Coutinho
I think there was some significant questioning of the Bill, and I suggest that the hon. Gentleman goes to speak to Lord Collins of Highbury in the other place. I commend the Government’s position to the House.
Question put, That this House disagrees with Lords amendment 10.
Business without Debate
18:40 - The House divided: - Ayes: 283 / Noes: 35 - Question accordingly agreed to.
Madam Deputy Speaker (Dame Rosie Winterton)
With the leave of the House, we will take motions 8 and 9 on social security together.
Motion made, and Question put forthwith (Standing Order No. 118(6)),
Social Security
That the draft Social Security (Contributions) (Rates, Limits and Thresholds Amendments and National Insurance Funds Payments) Regulations 2023, which were laid before this House on 16 January, be approved.
That the draft Tax Credits, Child Benefit and Guardian’s Allowance Up-rating Regulations 2023, which were laid before this House on 16 January, be approved.—(Stuart Anderson.)
Question agreed to.
Motion made, and Question put forthwith (Standing Order No. 118(6)),
Electricity
That the draft Nuclear Regulated Asset Base Model (Revenue Collection) Regulations 2023, which were laid before this House on 15 December 2022, be approved.—(Stuart Anderson.)
Asylum Seekers: Bournemouth West
(1 year, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Conor Burns (Bournemouth West) (Con)
It is approaching 13 years since I stood in this spot, where Lady Thatcher delivered her maiden speech, to deliver my first speech in the House of Commons. On that occasion, I spoke of something of profound local interest and great national importance: the situation around student visitor visas. I was delighted to have the support of my neighbour, my hon. Friend the Member for Poole (Sir Robert Syms), on that occasion, and I am glad to see him in his place again today.
I would like to commit what I am about to say to the memory of a remarkable young man called Tom Roberts, who was brutally slain on the streets of my Bournemouth West constituency by a knife on Saturday 12 March last year. I will have a little more to say about Tom and the circumstances of his death a little later on.
I have been conducting a parliamentary survey in my Bournemouth West constituency in recent months. The strength of feeling of my constituents on the situation regarding those seeking asylum and awaiting a decision on their asylum status is incredibly profound. Often when we talk about asylum in the debates we have, we focus too much on the process and not enough on the principles. We have a proud track record in the United Kingdom of offering genuine refuge to those who are fleeing in fear of their lives, but the reality is, Madam Deputy Speaker, that if you are fleeing in fear of your life from a war zone or a humanitarian disaster, you would claim asylum in the first safe country you reach. You would not pass through multiple safe countries to get to the United Kingdom.
We must absolutely acknowledge that it is not those coming here seeking asylum and looking for a better life who are at fault. These people are being exploited by evil traffickers who are taking their life savings from them in the hope of offering them a better life. The way in which they are being exploited is cruel and vindictive.
The situation in my Bournemouth West constituency and across the Bournemouth, Christchurch and Poole Council local authority area is unsustainable. There are currently, as of yesterday, some 666 asylum seekers across the conurbation. Four hotels in my constituency are full, and have been full for quite some time, of those waiting for their decision to be made. The pressure that puts on the local council tax payer and local residents, and on the council to deliver services, is profound.
I want, for a moment, to focus on the number of children who are within that number of 666 people waiting for a determination. As of January this year, the BCP area had 56 unaccompanied asylum-seeking children in care, or 10.7% of the total number of children in care—massively higher than both the national and regional averages. We have 16 unaccompanied asylum-seeking children of school age, with eight in local schools and three in schools outside the area. One my real concerns, and I would be grateful if the Minister could address this point, is the decision to send these people to my constituency and our local authority area when the Ofsted inspection of the local authority’s children’s services found that overall the service provided by BCP Council is inadequate. Its judgment states:
“The impact of leaders on social work practice with children and families—inadequate; the experiences and progress of children who need help and protection—inadequate; the experiences and progress of children in care and care leavers—requires improvement; overall effectiveness—inadequate.”
The Ofsted report goes on to state:
“Thresholds for interventions are not applied consistently, and the oversight of managers is too variable in quality. Multiple changes of social workers and managers in some teams also contribute greatly to the lack of focus and urgency for many children. There are still serious and widespread weaknesses in the quality of children's services that leave vulnerable children at risk of harm. Specialist services aside, the core business of reducing the risks to children in need of help and protection is yet to have a consistent and effective impact.”
Point 37 of the report identifies that
“Unaccompanied asylum-seeking children have mixed experiences. Mostly, once they are clearly the responsibility of the local authority, they are helped with somewhere to stay, interpreters, tracing their families and legal support. For a small number, a debate about their age and entitlement leads to delay in them securing suitable accommodation and support.”
The experience across the four hotels in my constituency over the past 12 months is that up to 10% of placements, having said that they are adults, present themselves on arrival to staff, state that they are under 18 and therefore claim to be unaccompanied asylum-seeking children. That means that the local authority has a legal duty to place them in care and they cannot remain in the asylum hotels. I submit to the Minister that the financial pressure that that places on BCP Council, and therefore on my constituents, is just not acceptable. To place those individuals in a local authority area in which children’s services are deemed inadequate is, I contend to the House, actually irresponsible.
We need to return to fundamental first principles. If someone has a right to be here, they will be supported and looked after and funds will be allocated.
Conor Burns
If someone does not have the right to be here, they should not be here. That is why I welcome the Prime Minister’s express commitment in his five-point plan to dealing with the situation more generally.
I said that I would return to Tom Roberts and the circumstances around his death. I want to use this opportunity to apologise to the family of Tom Roberts. They, and he, were profoundly let down by multi-agency failures. The man who is now serving a life sentence for the murder of Tom on Old Christchurch Road last year should not have been in the United Kingdom. Subsequent to his stabbing of Tom, it emerged that he had been found guilty of two murders in another country. Norway had denied his claim of asylum.
It subsequently emerged that although the man had told the authorities that he was 14 when he arrived, he was in fact 18. Dental records and reports suggested that he was an adult. He was placed with children at Glenmoor and Winton, a local secondary school in my constituency. His foster carer reported to social services that he was regularly carrying knives and was engaged in street fighting for money. The police were also made aware, yet he was allowed to go on and stab young Tom to death—a man who wanted to give his life in service to this country in our armed forces.
We let Tom down. There was multi-agency failure. I would like the Minister to use this evening’s debate as an opportunity to recommit the Government to making sure that we adequately test people who say they are children, and that we work out whether they are or not before we let them loose on the streets of our country. I hope that the Minister will feel able on the Government’s behalf to join me in saying sorry to Tom’s family for how his young life, with all his future opportunities and everything he could have given our country, was snuffed out in its prime when he was slain.
Sir Robert Syms (Poole) (Con)
My right hon. Friend is making a powerful case on behalf of his constituents and mine. There are some very real issues here and I am proud to be sitting next to him on these Benches.
Conor Burns
I am very grateful to my hon. Friend. We all come to this House to do right by those in whose name we serve, but I am highlighting tonight how I think we failed. There are very serious lessons to be learned by local authorities, social services, the police, Border Force and so on.
I am incredibly proud of our country’s record of offering hospitality and welcome to those in need. I would not want my remarks tonight to be in any way misinterpreted as meaning that I want us to walk away from that generosity of spirit—that offer of hope and opportunity to those who are genuinely in need. However, we cannot escape the fact that too many people are exploiting that good will to come here as economic migrants.
Our constituents are demanding that the Government take action. Ministers on the Treasury Bench, led by the Prime Minister, have confirmed the Government’s absolute determination to reduce and then eliminate the small boat crossings. Too often, constituents in Bournemouth West look at hotels that have hitherto supported the vibrant tourism economy on which much of our local area across Bournemouth and Poole relies. They see that area filled with people who are without hope, and who, I have to say, are waiting for more than a year for their claims to be processed—and that is before we even acknowledge the additional burdens that this places on my parliamentary team, who receive dozens of requests every day for updates on claimants’ status.
We must not be treated like mugs in this country, and I hope that the Minister will now reiterate the Government’s driving commitment to getting a grip of this situation.
The Minister for Immigration (Robert Jenrick)
I am grateful to my right hon. Friend the Member for Bournemouth West (Conor Burns) for securing the debate and for speaking so powerfully on behalf of his constituents. First and foremost, I want to pay tribute to Thomas Roberts, a young man with a bright future ahead of him whose life was cut short, and to extend my sympathies and those of the Government to his family and friends for their profound loss. This was an horrific crime which has robbed a young man of his future and caused intolerable suffering to his loved ones.
In any such case, justice must be delivered and the perpetrator punished. I welcome the life sentence that has been handed down by the Crown court, and I can assure my right hon. Friend that Mr Abdulrahimzai will be considered for deportation so that removal coincides with the end of his custodial sentence. As my right hon. Friend said, that individual abused the generosity of our country, and exploited our asylum and immigration system with terrible consequences. However, when a crime as abhorrent as this occurs, we must also confront the difficult questions posed by the case and ensure that our systems and processes are as effective and robust as they can be. That is what my right hon. Friend and his constituents would expect and what the broader British public would expect, and I can also assure my right hon. Friend, and indeed all Members, that the Government recognise the need for this case to be comprehensively examined. I have already asked the Home Office to conduct an investigation of the circumstances surrounding it.
While I completely understand the desire for immediate answers, I hope that my right hon. Friend will understand if I refrain from going too far into the detail while that investigation is ongoing, but I can provide some immediate reflections on the circumstances surrounding the case. All asylum claimants should be subject to robust mandatory security checks against their claimed identity, including criminality checks on UK databases. This happens when we intercept individuals such as those who arrive on small boats at Western Jet Foil in Kent and are subject to checks at the Manston centre. However, we need to strengthen ties with international partners to make vital intelligence- sharing more seamless, for instance through the sharing of criminal conviction data. Individuals attempting to cheat our immigration system using multiple names—or aliases—and ages must face decisive action. It is unacceptable that we place foster carers, schools and others who support individuals in intolerable and dangerous positions because we do not have access to sufficient data.
Another issue on which we should reflect, which my right hon. Friend rightly raised, is the need for robust age assessment measures. The age of a person arriving in the UK is normally established from the documents with which they have travelled, but that has proved challenging because so many arrivals who claim to be children do not have any definitive documentary evidence to support their age claims. Under the current process, when an individual claims to be a child without documentary evidence, and when there is reason to doubt their claimed age, immigration officers are required to make an initial age assessment to determine whether the individual should be treated as a child or an adult. If doubt remains about whether the claimant is an adult or a child, they are referred to a local authority, such as that of my right hon. Friend, for further consideration of their age and treated as a child for immigration purposes until that further assessment has been completed. Clearly this case illustrates why we need a more consistent and robust approach.
Given the difficult task of accurately assessing someone’s age and the serious risks when we fail to do so, the Home Secretary and I are considering introducing scientific age assessment methods at the earliest opportunity. This is being done in fellow western democracies such as Norway, Denmark and Sweden. It is essential to widen the evidence available to decision makers and improve the accuracy of their decisions. It will also act as a deterrent to those who flagrantly abuse the system and put others at risk by posing as children. The report from the Age Estimation Science Advisory Committee was published by the Home Office on 10 January, and we will now consider the recommendations. We will bring forward proposals at the earliest opportunity.
Turning to the wider issue of hotel accommodation in my right hon. Friend’s constituency, we currently accommodate around 650 supported asylum seekers in Bournemouth, mostly in temporary hotel accommodation. There are 10 supported asylum seekers in longer-term dispersal accommodation, and there are no bridging hotels currently housing unaccompanied asylum-seeking children. Let me perfectly clear that I share my right hon. Friend’s deep frustration, and I acknowledge the impact that this is having on his local community and on the business community in his constituency. It is a vibrant and beautiful tourist destination that wants to make use of its hotels for better purposes.
By national standards, those numbers are low. There are more than 150 local authorities that support larger populations of dispersed asylum seekers and 50 local authorities with larger overall total supported asylum seekers. Taking account of the overall population in Bournemouth, supported asylum seekers account for 0.16% of the local population. There are more than 110 local authorities that have a higher concentration of supported asylum seekers. This is not to diminish the burdens; it is merely to contextualise them and to show the scale of the challenge that now confronts us, to which we as a Government must find answers.
We need to ensure that there is proper engagement with the local community when we stand up this new accommodation, and I have made that point on numerous occasions. We must ensure that the Home Office now implements better procedures to let local authorities, and indeed Members of Parliament, know in good time that we intend to take up this form of accommodation. My officials are now running regular engagement sessions with local authorities to try to improve this process. We take steps to try to minimise the impact of any hotels on the local community. Our service providers have a model to ensure that many on-site facilities and amenities, such as recreation, food and laundry, are provided and that specialist support and security guards are provided 24 hours a day, seven days a week.
None the less, it is absolutely right that my right hon. Friend has raised this on behalf of his constituents. I hope he has seen, in the statement that the Prime Minister set out in December and in subsequent ones that the Home Secretary and I have made, that we are absolutely clear that the mission of this Government in this respect is to end the use of these hotels and to return them to local communities and businesses for their rightful purpose. They are not right for local communities. They are expensive and a waste of money for the taxpayer.
We have committed to clear the backlog of legacy outstanding initial decisions in the asylum system by the end of 2023. To this end, we are doubling the number of asylum caseworkers this year and streamlining and modernising the end-to-end decision-making process. This should ensure that claims can be dealt with quickly, whether because the individual has a high chance of being granted asylum or because they have a very low chance of it, including those from safe countries such as Albania who can be removed forthwith. We will reduce the number of asylum seekers in contingency accommodation as a result. I am pleased to say that that work is not only under way but is already bearing fruit. The legacy backlog is falling as a result of the work now undertaken.
We are also trying to increase the supply of dispersal accommodation, which is a cheaper, less visible and more appropriate way to house these individuals, by working with local authorities across the country to ensure a fair and equitable spread. We are also looking at a small number of larger accommodation sites, the purpose of which will be to ensure that there is decent, but never luxurious, and good value-for-money accommodation, of the kind the public would expect. I hope we will be able to set out more on that in due course.
In the long term, as my right hon. Friend rightly said, the enduring solution to this problem is not procuring more hotels or more sites such as dispersal accommodation but stopping the illegal small boat crossings. It is for that reason that the Prime Minister has made this one of the five priorities by which he wishes this Government to be judged, and it is why the Home Secretary and I are firmly focused on implementing the reforms needed to grip this problem once and for all.
In the coming weeks, we will bring forward new legislation to restore deterrence and to stop the small boats crossing the channel, which I know will have the support of my right hon. Friend the Member for Bournemouth West. It will be based on the simple principle that people who come here illegally should have no right to remain here, and that we will fulfil our historic duty as a country to support those genuinely fleeing persecution and human rights abuses around the world, not by enabling people to abuse our system and jump the queue but by working with those in greatest need to pursue targeted resettlement schemes of the kind we have recently done so well as a country with respect to Ukraine, Afghanistan, Syria and Hong Kong.
We have presented a comprehensive plan for tackling illegal migration and stopping the boats, with deterrence suffused throughout our approach. A critical element of that is the Rwanda plan, which my right hon. Friend has always supported and which we hope to implement at the earliest opportunity. Putting that plan into action is a first-order priority for this Government.
I finish by repeating my thanks to my right hon. Friend for securing this debate. He is right to raise these issues, and I hope I have given some reassurance about how seriously the Government take them. On the case he highlighted, of a life tragically cut short, my thoughts are with the victim’s loved ones. Protecting the public is the Home Office’s No. 1 priority, and this Government will do all we can to deliver it.
We are, as my right hon. Friend said, a big-hearted country that seeks to protect genuine asylum seekers and offer them a new life in this country, but we will clamp down with the full force of the law on those who choose to abuse our generosity. We will build a new asylum and immigration system that secures our borders and delivers our obligations in a way that the British public would expect.
Question put and agreed to.
DRAFT AUTHORITY TO CARRY SCHEME AND CIVIL PENALTIES REGULATIONS 2023
(1 year, 9 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for the Home Department (Miss Sarah Dines)
I beg to move,
That the Committee has considered the draft Authority to Carry Scheme and Civil Penalties Regulations 2023.
It is a pleasure to serve under your chairmanship, Sir Robert.
The purpose of the regulations, laid under sections 23(2) and 24(7) of the Counter-Terrorism and Security Act 2015, is to give effect to the Authority to Carry Scheme 2023, otherwise known as “the 2023 scheme”; to make consequential amendments to the Authority to Carry Scheme (Civil Penalties) Regulations 2015 and to revoke the Authority to Carry Scheme and Civil Penalties Regulations 2021.
Once given effect, the 2023 scheme will, in turn, revoke and replace the Authority to Carry Scheme 2021. Authority to carry is, in effect, the UK’s “No Fly” scheme. It is operated to prevent individuals, including known terrorists, serious criminals and those subject to sanctions, from being able to travel to and from the UK.
The scheme is operated by the National Border Targeting Centre, which processes information about individuals - both passengers and crew - intending to travel to or from the UK. Where an individual is identified who is in a class of person described in the scheme, the carrier may be refused authority to carry the individual to or from the UK.
The 2023 scheme applies to aircraft, ships and trains that have been required by law to provide passenger and crew information before departure. It applies on all international routes including journeys within the Common Travel Area where advance passenger and crew information is received from a carrier.
The Authority to Carry Scheme continues to be extremely successful. Since its introduction in March 2015, the National Border Targeting Centre has refused carriers authority to carry more than 11,200 individuals seeking to travel to the UK. That is a daily occurrence. This has included around 270 individuals excluded from the UK; about 4,500 individuals previously deported from the UK; over 5,500 individuals using invalid documents; over 720 individuals seeking to use revoked or cancelled entry clearances or visas; and some 23 individuals who have been refused leave to enter prior to their departure to the UK. These are all individuals who would otherwise have arrived in the UK and been refused leave to enter by Border Force officers.
The primary reason we are introducing the 2023 Scheme is to account for the introduction of electronic travel authorisations - a key component of universal permission to travel. Universal permission to travel will require all individuals to have a valid permission before travelling to the UK. There will be some individuals who apply for an electronic travel authorisation but whose application is refused. Others may be granted an ETA that is subsequently cancelled, for example if it is established a false declaration was made about their previous good conduct. It is important that those individuals are prevented from travelling to the United Kingdom. Through the inclusion of those classes of individuals in the 2023 scheme we can ensure they are prevented from travelling to the UK.
We are also taking the opportunity to make additional amendments to existing classes of individual in the 2021 scheme to include namely: individuals who were subject to deportation proceedings but left the UK before those proceedings concluded; individuals who have been or would be refused entry clearance or a visa under the immigration rules—not only on non-conducive grounds as in the 2021 scheme; individuals who are using an invalid travel document that was not issued to them, or is otherwise not valid for international travel—that will include documents being misused but not reported, or not yet reported, lost or stolen and so called “fantasy documents” not issued by a recognised national or international authority; and as an additional class, individuals whose indefinite leave to enter or remain has been revoked under section 76 of the Nationality, Immigration and Asylum Act 2002.
It is important to note that the Crown Dependencies are aligning with the UK by introducing their own ETA schemes and collectively we will recognise each other’s schemes. Therefore, authority to carry refusals may be issued to carriers operating to the UK where an individual’s ETA has been, or would be, refused or has been issued and subsequently cancelled under any of the ETA schemes of the Crown Dependencies.
The additions to the 2023 scheme that I have outlined will ensure the authority to carry policy continues to operate effectively and will reflect the wider development of the UK’s border security measures through the advent of the universal permission to travel, and, particularly, the introduction of the ETA for non-visa nationals.
Like the previous Authority to Carry Schemes, the proposed 2023 scheme will be an important element of our multi-layered approach to border security, alongside universal permission to travel, the visa regime, the ETA and our checks at the border.
The Government are committed to ensuring the continued safety and security of the UK border. This new Authority to Carry Scheme is central to that effort. I commend the regulations to the Committee.
Holly Lynch (Halifax) (Lab)
It is a pleasure to serve under you, Sir Robert. I thank the Minister for her opening remarks.
As the Minister has outlined, the draft statutory instrument would implement the Authority to Carry Scheme 2023, which, as the hon. Lady said, replaces the 2021 scheme. As highlighted by the explanatory notes, the 2023 scheme would extend the range of individuals who carriers may be refused authority to carry to include people refused an ETA and people travelling on a document that is not valid for international travel, or a document of which the person is not the rightful owner.
Additionally, the SI would amend the Authority to Carry Scheme (Civil Penalties) Regulations 2015 to remove the sunset clause. As of yet, I do not believe we know when the ETA scheme will be introduced, or details as to who exactly will be required to have an ETA or how much it will cost to secure. Those are significant outstanding questions when we consider how the regulations will work.
The Opposition certainly do not oppose the measures, which are very much part of the package of terrorism laws sadly necessary to help keep people safe. There is a need to have safeguards on the exit from, entry to or return to the UK of individuals who pose a terrorism-related threat. We recognise that those checks assist hard-working UK border officials and other operational partners in their vital work by streamlining much of that electronic process.
In 2021, a Home Office Minister stated that since its introduction, the scheme had refused carriers the authority to carry individuals seeking to travel to the UK on more than 8,200 occasions. I listened carefully to the figures that the Minister cited, and I would be interested to know how many people the scheme has refused authority to carry in the past 12 months. It would be useful if the Minister could update the Committee to give us a sense of those numbers, although I appreciate that the topic is not part of her usual brief.
I am also mindful that the scheme carries a maximum penalty of £50,000. I would be interested to know how many times breaches of the scheme by carriers have been identified, leading to a penalty being imposed, and the value of those fines. That would be an indication of the seriousness of those breaches.
I had a local case in 2021 of an individual who had committed serious and violent sexual offences who was deported to Pakistan. Once there, he was able to change his name and come right back again. We absolutely cannot afford to let such mistakes happen, and I hope that the enhanced measures we are discussing cannot be cheated in such a basic way.
Other than the queries I have outlined, the Opposition very much welcome the regulations, which mitigate the risk posed by those who, sadly and dangerously, seek to do us harm. We will not seek to divide the Committee on the measure.
Patrick Grady (Glasgow North) (SNP)
It is a pleasure to serve under your chairmanship, Sir Robert.
I do not think anyone is disputing the need for sensible border security and counter-terrorism provisions. Obviously, they already exist in the preceding regulations, and of course the SNP understand the need to update them to reflect the technological developments to which the Minister referred. Concerns arise when there is a risk of ministerial overreach or the acquisition of powers that stretch beyond the intention of the original primary legislation.
There are particular concerns that some of the provisions we are discussing may become a vehicle for enforcing a hostile immigration environment by stealth or, indeed, quite blatantly rather than acting purely as the counter-terrorism provisions which the Minister outlined. That includes the extension of the regulations governing no-fly orders to individuals who have been or would be refused entry clearance on a visa under the immigration rules. That means the relevant definition then suddenly becomes very wide. I can think of constituents who have acquired visas quite legitimately. What happens if they have to return home or to their country of origin for family reasons when their visas start to expire and they are in the process of applying for a new one? Will such individuals be stopped at the border and sent back until they can regularise their paperwork? If so, where is the capacity in the Home Office to sort out such regularisation? We all have countless examples of people who cannot get their paperwork processed in time. That is particularly true among the academic community, which represents a significant proportion of the Glasgow North constituency as well as in other parts of Scotland.
I seek a key assurance that the proposed rules will not prevent any individual from claiming asylum on presentation at the UK border, whether that is an airport, seaport or the channel tunnel terminals. That is very important. I hope that the Minister, unlike many of her colleagues who seem to refuse to answer the question, will confirm that the ability to claim asylum is a human right. I hope she will confirm that there is no such thing as an illegal asylum seeker. If the provisions in the SI are used to enforce the Government’s hostile environment and their intention to stop people coming here and seeking refuge, we should be concerned. I will be very interested to hear the Minister’s response to that.
Miss Sarah Dines
I am grateful for the points that have been raised by hon. Members.
In response to the questions from the hon. Member for Halifax on behalf of the Opposition, the ETA scheme will be introduced later this year. The price of it, which will be announced soon, will be similar to other schemes such as those operated in the USA and the EU. I appreciate that issues have been raised by Members about the imposition of penalties. As I said, civil penalties of up to £50,000 will be imposed on carriers who breach the requirements of the scheme. We appreciate that that is large penalty, particularly at a time when the travel industry is facing global economic pressures. We recognise that, and I can reassure Members that we will not increase the maximum penalty amount. Although the regulations set out that a financial penalty may be applied, we have a dedicated team in Border Force who engage with carriers to resolve issues about timelines and the quality of data submissions to the Government’s border systems, which may result in non-compliance with the scheme.
Our approach is one of collaborative working, but where a breach of the scheme occurs, it is only right and proper that we should penalise that carrier. In seven years of operating the Authority to Carry Schemes only 23 penalties totalling £352, 500 have been imposed. There have been one or two occasions when the penalty was £50,000.
The numbers of those apprehended have been consistent. As I said earlier, since 2015, more than 11,200 individuals have been prevented from travelling. In 2021-22, 1,197 individuals were stopped; in 2022-23, that number was 1,700. In the year 2016-17, the number was 1,702. It is clear that those figures are pretty consistent.
The hon. Member for Glasgow North, who spoke on behalf of the SNP, suggested that the scheme could be part of a hostile immigration environment. He fundamentally misunderstands the nature of the scheme. It is not designed to enable the blatant disregard of people’s rights, nor is it part of the means to create a hostile environment. People will not be stopped at the border in the UK, rather they will not be allowed to be carried if they are those whom we know should not be coming to the UK. The scheme does not affect the classic asylum claims.
The Government are committed to ensure the continued safety and security of our UK border. The authority to carry is an integral part of that policy, and has been since 2015. Consistency of support from the official Opposition is gratefully received, and such consistency from all the opposition would be gratefully received if offered.
The Authority to Carry Scheme is essentially the UK’s “no fly” scheme, and is similar to those operated across the world. It is designed to ensure that the citizens of the UK are safe. It is intended to prevent certain individuals from travelling to the UK when necessary in the public interest. It is operated by the National Border Targeting Centre, the multi-agency operational hub within Border Force. It is an important part of our border security arrangements, which prevents individuals who are known terrorists, serious criminals and those subject sanctions from being able to travel to the UK. I do not apologise for it or accept in any way the suggestion that the scheme is part of fostering a hostile immigration environment. It is about keeping our citizens safe.
I thank all hon. Members for their participation. The adoption of the regulations and giving effect to the Authority to Carry Scheme 2023 will underpin the operation of a critical element of our future border and immigration system, namely, universal permission to travel. It will build on the successful operation of the existing policy, which prevents individuals from travelling to or from the UK, and will maintain and develop that important part of our security arrangements.
Question put and agreed to.
Procurement Bill [ Lords ] (Fifth sitting)
Tuesday 7th February 2023
(1 year, 9 months ago)
Public Bill CommitteesRead Full debate Procurement Act 2023 View all Procurement Act 2023 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 7 February 2023 - (7 Feb 2023)
The Committee divided: - Ayes: 5 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 4 / Noes: 8 - Question accordingly negatived.
The Chair
I remind the Committee that Hansard colleagues will be grateful if you could send your speaking notes to hansardnotes@parliament.uk. Please switch all electronic devices to silent. Tea and coffee are not allowed to be consumed during sittings.
Florence Eshalomi (Vauxhall) (Lab/Co-op)
I beg to move amendment 13, in clause 41, page 28, line 27, at beginning insert “Subject to subsection (4A),”.
This is a paving amendment for Amendment 14, which would prevent the award of direct contracts to excludable suppliers when the supplier was excluded as a threat to national security.
The Chair
With this it will be convenient to discuss amendment 14, in clause 41, page 28, line 38, at end insert—
“(4A) If the supplier is an excludable supplier by virtue of the discretionary exclusion ground in paragraph 14 of Schedule 7 (threat to national security), the contracting authority may not award the contract to that supplier.”
This amendment would prevent the award of direct contracts to excludable suppliers when the supplier was excluded as a threat to national security.
Florence Eshalomi
It is a pleasure to serve under your chairship again, Mr Efford.
Amendments 13 and 14 reiterate our amendments 15 to 19 to clause 29, which we debated last week. We think that competitive and due process should be followed as much as possible, and that the bypasses enabled by clause 41 should be used as little as possible. Although we understand why direct awards might be needed, we believe that they must be used with caution.
One element of the clause that we find troublesome is the provision on excludable suppliers and the public interest test. The rationale for direct awards can be related to defence, as under paragraph 18 of schedule 5, and the matters listed in the “overriding public interest” test in clause 41(5) are serious. We understand why the Government may look to bypass many of those grounds should the issues be serious enough, but we do not believe that it should ever be the case that threats to national security are awarded contracts, in particular under direct awards.
Previously in Committee, we attempted to move national security concerns from discretionary to mandatory grounds. We feel that the necessary amendment would require us to go beyond the public interest test for excluded suppliers and exclude suppliers with national security concerns across the board. The fact is, as we go further up the food chain of security sensitivity, the risk to our country from exposing our supply chain to national security threats becomes more severe.
To take the public interest test on constructing, maintaining or operating critical national infrastructure, we understand that that is of the utmost importance for the country, but we should not expose our network to security threats if the need for such a test is so great. The risk of doing so is catastrophic. It could mean malign surveillance in vital infrastructure undermining our entire security system and the fundamental safety of the state. In such cases, there must be a clear instruction for contracting authorities to look for alternative provisions that do not put the state at risk.
We feel that our amendments address such proportionality concerns. They would ensure that we never turn to national security threats for procurement, preventing the threat that those could cause to critical infrastructure. The Minister will say that we need flexibility in the system and that decision makers can assess the threat where necessary, but the reality is that we cannot expect procurement officers to be national security experts and to spot every threat that could be present with a supplier with national security concerns.
It is worth bearing in mind that, in high-pressure situations when wrong decisions can have hugely damaging unintended consequences, proper and strong legal checks and balances are critical, even at urgent times. Again, we may want to remember what happened during the covid pandemic. The National Audit Office investigation into Government procurement during covid-19 found:
“General guidance issued by the Crown Commercial Service recommends that awarding bodies publish basic information about the award of all contracts within 90 days of the award being made. Of the 1,644 contracts awarded across government up to the end of July 2020 with a contract value above £25,000, 55% had not had their details published by 10 November and 25% were published on Contracts Finder within the 90-day target.”
The result was that £10 billion-worth of PPE was written off, with auditors rebuking the Department of Health and Social Care for its management of taxpayers’ money during the pandemic. The Government are now locked in legal battles with the companies that failed to deliver on their contractual obligations. In the first quarter of 2022-23, the Government are still disputing 176 contracts worth nearly £3 billion. It is fair that even in an emergency we must abide by solid procurement principles if we are to avoid unintended consequences that put public finances and our national security at risk.
I think it is fair to say that we cannot be so arrogant as to assume that this would not be done inadvertently. During her speech on Second Reading, which I have alluded to already, the hon. Member for Rutland and Melton (Alicia Kearns) highlighted several issues that point to the need for tightening up in this area. She said:
“At the moment I have local authorities from around the country writing to me saying, ‘Alicia Kearns, can you please give me advice on whether or not we as the local council should procure from this company?’ That cannot be the way we do this. We must ensure local government is not the entry point for hostile states.”
She added:
“Finally, on supply chains, public authorities need to be able to investigate, and we must ensure that this goes high enough up the chain. Canadian Solar is looking to build a solar plant in my constituency. It sounds lovely—'Canadian Solar? What a great company’—but when we actually look into it, it is GCL-Poly, a Chinese-owned, Chinese-run company that is complicit in Uyghur genocide. We must ensure that the burden to investigate is properly addressed.”—[Official Report, 9 January 2023; Vol. 725, c. 363.]
I do not want to say that all these companies are necessarily a national security threat and need to be addressed by the Bill, but the points made by the hon. Member for Rutland and Melton and others show how easy it is for suppliers that may be of concern to the state to slip through the cracks. All these things concern us, and they should concern the Minister. With such risks present, I do not think there can ever be a proportional use of a national security threat in direct award procurement.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
My hon. Friend is making very good points. We have the Committees on Arms Export Controls, which scrutinise not just Government sales but commercial sales abroad. Is there not a case for a similar Committee, or for the existing Committees to have a wider scope, to look at imports that might be national security threats? Would that not be a way to shine some light on this?
Florence Eshalomi
I thank my hon. Friend for that point, and I hope that the Minister responds to it. It shows the many different angles from which, inadvertently, we could see national security threats coming into the country. We must make sure that we avoid that. We need to look at the issue of national security threats when we are directly awarding procurements.
There is very little in the clause in legal terms preventing the use of national security threats in direct awards; as my hon. Friend highlights, there is no guarantee that they will not be used. Our amendments 13 and 14 would prevent threats from entering the system via direct awards. I hope that the Minister will support them.
The Parliamentary Secretary, Cabinet Office (Alex Burghart)
It is a pleasure to serve under your chairmanship again, Mr Efford, as we enter the third day in Committee. We are making good progress through the Bill, and we hope to make even better progress today.
Amendments 13 and 14, tabled by the hon. Member for Vauxhall, seek to prevent contracts from being directly awarded to suppliers that pose a risk to national security. As we have discussed, national security is of the utmost importance, which is why we have chosen to strengthen the protections in our rules by introducing a new discretionary exclusion ground for suppliers that pose a risk. As I have already explained, the provision has to be discretionary, because there will be situations where a supplier poses a threat in one context but not in another.
The amendment envisions circumstances where a direct award justification applies, meaning a competitive award is not feasible. That would include where there are no other suitable suppliers, or where there is an extreme and unavoidable urgency. It is in precisely those situations that it is vital for contracting authorities to retain an element of discretion in the national security exclusion ground; that element of discretion does not in any way lessen the obligation on authorities to consider whether exclusion is appropriate for the particular contract given the risk posed by the supplier.
Those considerations will of course be informed by the publication of guidance produced in partnership with national technical authorities such as the Centre for the Protection of National Infrastructure and the National Cyber Security Centre. I have complete confidence that contracting authorities will use the discretion appropriately. I respectfully ask that the amendment be withdrawn.
Question put, That the amendment be made.
Kirsty Blackman (Aberdeen North) (SNP)
I beg to move amendment 103, in clause 41, page 29, line 10, at end insert—
“(5A) Where a direct award justification applies, before making a direct award to a supplier a contracting authority must satisfy itself that no preferential treatment has been conferred on the supplier by virtue of any recommendation made by a Member of the House of Commons or the House of Lords.”
The Chair
With this it will be convenient to discuss the following:
Amendment 104, in clause 44, page 30, line 23, at end insert—
“(c) any connections between the supplier and any—
(i) registered political party,
(ii) Ministers of the Crown, or
(iii) Members of the House of Commons or House of Lords
where such connections are of a nature likely to be relevant to the direct award of the contract.”
Amendment 111, in clause 44, page 30, line 25, at end insert—
“(4) Any Minister, peer or senior civil servant involved in recommending a supplier for a contract under section 41 or 43 must make a public declaration to the Cabinet Office of any private interest in that supplier within 5 working days.”
This amendment would implement the recommendation of the National Audit Office that any contracts awarded under emergency provisions or direct awards should include transparency declarations.
Kirsty Blackman
These amendments arise mostly, although not entirely, as a result of what happened with PPE during covid. I would be less inclined to move the amendments if the Government had shown any contrition about the situation we find ourselves in. They tend to stand up and say, “Well, we needed to procure things in a rush, so we have no regrets about the situation.” It would be much better for them to stand up and say, “We needed to procure in a rush, but lots of mistakes were made along the way and therefore we believe that we need to do better next time.” A full investigation would also be helpful.
The situation we find ourselves in is this: a significant amount of PPE, of significant value, was unusable; the VIP lane has been considered unlawful; and those who made recommendations—one person, certainly, who made a recommendation—have personally benefited from Government contracts that were awarded. In the light of that situation, it is incredibly important that the procurement rules we set up ensure that such a situation cannot happen again—that there is both a requirement for the people making direct awards to satisfy themselves that no preferential treatment has been given on the basis that the person has been recommended by a Member of the House of Commons or the House of Lords, and that, should there be any connections between the supplier and a registered political party, Ministers of the Crown or Members of the House of Commons or House of Lords, that information is laid out in the transparency notice.
That is not asking too much. We all have a register of interests that we are supposed to keep up to date—the ministerial one slightly less often, or very much less often, than that for MPs. Asking for a higher level of transparency, when we know that those links occur, is not asking too much.
The Conservatives have a tendency to point to the fact that, “Well, we have people in the House of Lords who have come from business, therefore of course they will continue to have business interests.” I am not suggesting that they should not—that is absolutely fine—but we should be transparent about it and we should know if a contract has been granted to somebody who will benefit as a Member of the House of Lords. Is the supplier, or the person receiving the procurement contract—the beneficial owner—a peer or a Member of the House of Commons? Are they linked, in some way, to a political party?
We know from Sky’s investigation that a number of Members of Parliament receive money from companies. That is registered, but there is no requirement in the Bill, as it stands, for it to be noted; there is no requirement, when the contract is being given, for that which is open and registered already. Members of Parliament have to register if they receive a certain amount of money from a company, so it should follow that, if the company is being given a procurement contract, it is registered as part of the transparency notice. That should be noted up front.
That is not asking too much, particularly in relation to amendment 104, which is specifically about transparency notices and ensuring that that stuff is clear. It should not be too much work for anyone doing the transparency notice. Absolutely, it will create a little bit of extra work, but all they will need to do is cross-reference the registered interests, and then put that in the transparency notice so that we are all aware of the links.
Lloyd Russell-Moyle
The hon. Lady is raising some important points about how mistakes were made during the covid period. It is important to note, however, that those same mistakes were not made in Labour-controlled Wales or SNP-controlled Scotland, where transparency seemed to be much higher and fast-track schemes were not implemented. Is there a case for greater light to be shone in this place, where the rot seems to have truly set in?
Kirsty Blackman
I absolutely agree. In fact, that adds to the case that we should be willing for there to be an investigation. It shows that, actually, we can do it right and in such a way that individuals do not benefit from that.
David Duguid (Banff and Buchan) (Con)
I thank the hon. Member for giving way. I look forward to her supporting Scottish Conservative calls for transparency on certain procurements—of ferries and suchlike—by the Scottish Government.
The hon. Member said that it should not be too much to ask. I have heard that argument many times about making amendments, not just to this Bill but to others. She said herself that the registers of Members’ and Ministers’ interests already exist. Does she not feel that making “shouldn’t be too much to ask” amendments to any Bill risks diluting its effect?
Kirsty Blackman
I do not think that that is the case. We should not have such an issue that we need journalists, such as those at Sky, to shine a light and make those links. There should be a requirement for that transparency to be in place. Although we have the registers of Members’ and Ministers’ interests, they stand alone and are separate from the procurement contracts. If we end up in situations where people are benefiting significantly, having that in the transparency notice is important.
Florence Eshalomi
The hon. Member makes a valid point. Does she agree with my concern that only the other week the Paymaster General said that Ministers’ interests will be updated, but not until May, whereas we as Members have to update our entry in the Register of Members’ Financial Interests within 28 days? Why the delay?
Kirsty Blackman
I absolutely agree. The former Chancellor and chairman of the Conservative party, the right hon. Member for Stratford-on-Avon (Nadhim Zahawi), did not update his list of ministerial interests for a significant period after he was put into his role. In fact, some of the most egregious issues did not come to light properly until he updated the list of ministerial interests in January, some three months after he became the party chairman.
I agree that the lack of transparency is a significant issue, and I was disappointed in the Government responses. They do not seem keen to move on the register of ministerial interests being updated more regularly. Surely, given the amount of Executive power in this place and the post-Brexit creep towards increasing the amount of ministerial or Executive power—taking power away from Members—it is even more important for ministerial interests to be registered.
Lloyd Russell-Moyle
Does the hon. Member agree that the proposal would be in the interests of a governing party that is facing so many scandals—from Baroness Mone to the Randox lobbying affair—that have almost brought down Prime Ministers? It would help to protect the Conservative party from some “bad apples”, as Conservatives might put it.
Kirsty Blackman
I agree and would add to that: how many former treasurers of the Conservative party who have given significant amounts to the party have just happened to end up in the House of Lords? Who knows how that has happened? We know that there are people in this House and in the other place with significant business interests, and the amendment is not a criticism of that; it is not a negative thing, but it is about ensuring transparency.
Chris Evans (Islwyn) (Lab/Co-op)
The nub of the issue is that people have been appointed to the House of Lords and, in a particular case—I do not want to mention the name—they are not then taking an active part in proceedings in the other place. We could mention a number of peers who have hardly spoken since they were appointed, or not spoken at all. Rather than using that position to serve the Executive of this country, they have used it to lobby for contracts from the Government. That needs to be stamped out. Does the hon. Member agree that it is now time to look at how we appoint people to the Lords, and perhaps remove appointment to the Lords from the honours system altogether?
Kirsty Blackman
I absolutely agree. Each former Prime Minister is able to put forward whoever they want to the House of Lords, so we end up in this situation of having 850 peers and counting. The numbers are increasing drastically because the Government keep putting in more people to balance the politics in that place.
On the amendment, it is important for the Government to be willing to consider how best to improve transparency. So far, they have shown no willingness to improve transparency or to accept that there have been issues and that mistakes have been made. We need to change the system.
The UK has fallen in Transparency International’s corruption index, which has nothing to do with the Financial Action Task Force one. The FATF index is about corruption when it comes to money laundering, but Transparency International’s is about corruption in the public sector. It looks specifically at such issues as breaches of the ministerial code—in particular, ones that have not been investigated—and the scandals we have seen and continue to see.
The Prime Minister cannot keep sacking people who breach the code; we need to change the system so that they never get to that position in the first place—so that they can never commit the egregious breaches of trust we have seen and can never profit as individuals as a result of their position in this place or the other place. If the rules and systems are changed—which they clearly need to be—the Prime Minister will not need to sack people, because they will never be able to breach the rules and will never be able to profit as individuals simply as a result of their links to this place.
I will push amendments 103 and 104 to a vote when we come to that point and am happy to support amendment 111, tabled by the Labour Front-Bench team.
Florence Eshalomi
We fully support amendments 103 and 104, tabled by the hon. Member for Aberdeen North, which consider how we embed transparency into the system of direct awards. The two amendments highlight why we need additional layers of scrutiny to address glaring areas of conflict of interest in respect of Members of both the Commons and the Lords. It is vital to have additional checks in place.
Throughout the proceedings on the Bill the Minister has talked about the principle of impartiality, and said that the Bill will make VIP lanes, such as those we have seen, illegal and that it is all going to be fine. But that is just not the case. We need only to look at the pandemic to see why we desperately need to make sure that our procurement system is more agile and more transparent. The Tory VIP lane exposed a weakness in the system.
We must remember that we are talking about taxpayers’ money. We are at a time when so many people are feeling real difficulty in their choices and are seeing their household incomes reduce. Council and social housing tenants dread their rents going up. A number of councils have already highlighted how they are going to increase their council tax, including a borough in south London that is proposing to increase council tax by 15%.
Taxpayers’ money was wasted on contracts that were not fit for purpose and wasted as profits for unqualified providers. Worryingly, the Government have written off £10 billion of public funds that were spent on PPE that was either unusable, overpriced or undelivered, and it is worth bearing in mind that we are still spending £700,000 of taxpayers’ money a day on storing unused gloves, goggles and gowns. That money could pay for spaces in after-school clubs. It could pay for 19,000 full-time nursery places. It is public money.
The Bill does not pass the Mone or Paterson test; that waste could still be allowed to happen, over and over again. Handing more power to Ministers in respect of direct awards is not the way we want to go. We support the two amendments, because it is important that we empower local authorities to be able to ask the necessary questions when it comes to conflicts of interest. The current procurement system is not working, and we need to include new checks.
The amendments could be further strengthened by placing the onus on individual Ministers, civil servants and special advisers to make the necessary declarations but, as we have seen, when the onus is on them, they still do not make those declarations. Essentially, they have to be dragged kicking and screaming. We are in a situation in which we will not see the declarations of Ministers’ financial interests updated until May, if we are lucky. Anything could happen before May.
I draw the Committee’s attention to amendment 111, which we think further addresses the aims of amendments 103 and 104. We have an opportunity to learn from past mistakes and to tighten the freedom of Ministers to award direct contracts. It is about hardwiring transparency into our system. That should be a good thing and something we should all support. Instead, it seems the Minister wants to continue to have a back door and a VIP entrance. We must be clear that the Bill offers us a chance to clear that up.
The facts and figures speak for themselves. Some £3.4 billion of taxpayers’ money, in the form of contracts, went to Conservative donors and friends. A former Conservative Minister lobbied for Randox, which then provided 750,000 defective tests that had to be recalled, all while he was being paid £100,000 on top of his salary. Globus (Shetland), a business that has donated £400,000 to the Conservative Party since 2016, received £94 million-worth of PPE contracts.
Millions of people struggled during covid-19. The Government did some good things—including the furlough scheme to help people not to lose their jobs and the support for businesses—but a large group of people missed out on any money, including the 3 million people who form ExcludedUK. For those people who paid their taxes, submitted their returns and did not receive any money to have seen contracts dished out to friends, when those contracts were not even viable, was a slap in the face. When millions of people struggled during covid-19, it was not fair for them to have seen friends and donors of the Tory party prosper. As it stands, the Bill would continue to allow that to happen.
Our amendment 111 takes an important step, with amendments 103 and 104, towards addressing the situation, by asking Ministers to act, ensure genuine transparency in the system and restore trust in public money. This is about trust in the system. A number of members of the public do not trust our system; this is about restoring some of that trust and ensuring that, after years of waste and mismanagement, we do not find ourselves in this situation again.
Our amendment is based on a proposal by the independent National Audit Office and would mandate that:
“Any Minister, peer or senior civil servant involved in recommending a supplier for a contract under section 41 or 43 must make a public declaration to the Cabinet Office of any private interest”.
I hope we all agree that that is a straightforward, pragmatic proposal. It is not about layers of bureaucracy for business; it is about layers of additional scrutiny on Ministers to help to give the public confidence that another PPE Medpro scandal will be stopped and that we will not see a situation in which handfuls of millions of pounds of public money are redundantly spent on equipment that we cannot use.
The three amendments would outlaw VIP lanes once and for all, ensuring that we stop corruption. They would introduce a timeframe for transparency around declarations so that we can have information about conflicts of interests, instead of it being drip fed through the media or journalists. They would ensure that these scandals are not allowed to build up gradually over months and continue the erosion of trust. I hope the Minister agrees that Members of Parliament and the Government should have nothing to hide. If there is nothing to hide, they should support these reasonable amendments, which will help us to clean up our procurement system.
Alex Burghart
Conflict of interest in direct award contracts is clearly an extremely important topic. Amendment 103 would require a contracting authority to satisfy itself, before making a direct award, that no preferential treatment has been conferred on the supplier by virtue of any recommendation made by a Member of this House or the House of Lords. We understand—indeed, we agree with—the intent behind the amendment, but the Bill already covers such a scenario via robust requirements for contracting authorities to ensure equal treatment and address conflicts of interest. The bottom line is that if a conflict of interest puts a supplier at an unfair advantage, they must be treated as an excluded supplier and cannot be given a direct award.
Amendments 104 and 111 relate to the highlighting of political connections to political parties, Ministers of the Crown, Members of the House of Commons or House of Lords, or senior civil servants. As Members will have already heard, the Bill includes significantly greater transparency around direct awards than we have had in the past, via the new transparency notice in clause 44 and elsewhere. The conflicts provisions have been strengthened against the current procurement rules. A key change is the requirement in clause 82(5), which I will address in a future sitting, for contracting authorities to confirm that a conflicts assessment has been prepared, reviewed and revised as necessary when publishing a relevant procurement notice, which will include the transparency notice for direct awards.
The assessment must include details of any actual or potential conflict of interest identified in the procurement, and steps must be taken to mitigate such conflicts. That would include any political party affiliations the supplier has to any person acting for or on behalf of a contracting authority, and to anyone who influences a decision in relation to a covered procurement. In addition, in accordance with clause 84(4), if a contracting authority is aware that there may be even the appearance of a conflict, it must address that.
Kirsty Blackman
I thank the Minister for his response. I would like to press the amendment to a vote.
Question put, That the amendment be made.
The Chair
With this it will be convenient to discuss that schedule 5 be the Fifth schedule to the Bill.
Alex Burghart
Clause 41 permits a contracting authority to award a contract without first running a full competitive procedure when a justification in schedule 5 is met. The World Trade Organisation agreement on Government procurement contains grounds for limited tendering, on which the justifications are based. They will be familiar to those who use the current regime, and include justifications such as intellectual property, exclusive rights or technical reasons that mean that only a single supplier can deliver the contract.
Direct award may also be permitted where practicalities in the market make competition unfeasible—for instance, when buying commodities such as oil, where demand dictates the price, or when the contracting authority can obtain advantageous terms due to insolvency. There are also defence-specific provisions, and a new ground for light-touch contracts—for example, in adult and children’s social care—which allow for direct award due to “user choice” where the beneficiary of the contract or their carer has a legal right under other legislation to choose the supplier.
Overall, the Bill is clearly designed to support fair and open competition in order to secure the best outcome for the public interest. However, sometimes competition is not possible. For example, a supplier may own intellectual property rights that mean that only it can supply a particular good. Alternatively, competition may not be possible for technical reasons when the application of a particular legislative regime means that a contract can be awarded only to one specific provider. For example, the Children and Families Act 2014 may require special educational needs provision to be delivered by a particular supplier; or extreme and unavoidable urgency, such as the procurement of short-term recovery services following an unexpected flood, may render competition unviable. In such cases, limited exceptions to the requirement for competition are justified to ensure the effective and prompt delivery of critical services.
In respect of cases in which a contracting authority relies on one of the specified grounds, the Bill introduces a requirement for a transparency notice other than the very specific user choice exemption. That important new safeguard brings welcome transparency and accountability, and facilitates pre-contractual challenges if anyone fears foul play. Additionally, before publishing a transparency notice, the contracting authority must undertake a conflicts assessment in accordance with clause 82.
Florence Eshalomi
As the Minister outlined, these clauses relate to the provision of direct awards. Sadly, their abuse under the Government has done untold damage to the public interest, as I highlighted earlier. The current system does not work, and it is disappointing that the Government have failed to take this opportunity to learn from those mistakes. The Minister just said that competition is sometimes not possible, but taxpayers’ money must be treated with respect, not handed out in backroom deals or as a passport to profiteering.
I highlighted the case of PPE Medpro, but it is just the tip of the iceberg of the scandals we have seen unfolding over the past few years. We know that the companies that got into the VIP lane were 10 times more likely to win a contract, and that they did not go through the so-called eight-stage process of due diligence, as Ministers have now admitted. We also know that businesses that had the expertise to procure PPE and ventilators were not awarded contracts. That is worrying.
It is also worrying that no company was referred to the VIP lane by a politician of any party other than the Conservative party. It did not have to be that way. There could have been more transparency and faith in the system. At that time, Governments across the world were dealing with the covid emergency without wasting billions of pounds of taxpayers’ money and relying on backroom deals.
According to the watchdog, the Welsh Labour Government managed to prevent health and care bodies from running out of PPE. It said:
“In contrast to the position described by the…National Audit Office in England, we saw no evidence of a priority being given to potential suppliers depending on who referred them.”
The Welsh Government were able to create an open and transparent PPE supply chain—why were we not able to do that in England? The question that the Committee needs to ask is how we act to prevent a repeat of the waste that we saw during the pandemic.
This is about faith in politics. At a time when people are questioning politicians and Ministers, we have to restore that faith. This Bill gives us an opportunity to fix that. It is disappointing that the Minister has dismissed some of that and has failed to engage properly on the issue of VIP lanes. I hope he will respond constructively to ensure we fix the current system, which is not working.
Question put and agreed to.
Clause 41 accordingly ordered to stand part of the Bill.
Schedule 5 agreed to.
Clause 42
Direct award to protect life, etc
Florence Eshalomi
I beg to move amendment 108, in clause 42, page 29, line 29, at end insert—
“(5) Subject to subsection (6), regulations made under section (1) may remain in force for no longer than three months.
(6) A Minister of the Crown may by regulations provide for the continuation in force of regulations made under subsection (1) for a period of no longer than a further three months.
(7) A Minister of the Crown may exercise the power in subsection (6) more than once in respect of the same regulations made under subsection (1).”
This amendment would restrict the time in force of regulations allowing direct award of contracts to protect life or public order to no more than three months, but provide a power to extend their time in force, by three months at a time, by further regulations (which would be subject to approval by Parliament under clause 118(7)).
Florence Eshalomi
Clause 42 permits a Minister of the Crown to award a contract during an event that is deemed to be a threat to life, health, or public order or safety. The explanatory notes state:
“The purpose of this clause is to ensure procurements during an emergency event (like the Covid-19 pandemic) can be conducted as quickly and transparently as possible, even if the circumstances leading to the event are foreseeable (which may rule out the extreme urgency justification for direct award contained in Schedule 5).”
We all understand that emergency powers were needed during covid-19, and we do not oppose the sort of power that is in the Bill to keep the country as safe as possible in the event of another pandemic or a major emergency. As alluded to in the explanatory notes, the power builds upon the extreme urgency justification in schedule 5, and covers the gaps where events cannot be covered under that schedule. During the covid-19 pandemic we saw that removing the scrutiny of the non-direct procurement procedure can bring major problems. It is worth reiterating the figures that are clear for all of us to see: almost £10 billion of public money went towards PPE that was written off. In answer to a written question in November, the Government confirmed that they are paying £770,000 a day—the figure that I quoted earlier—to store PPE in places such as China. Think what we could all do with such an amount of money in our respective constituencies.
We should not treat procurement during the pandemic as a model of good practice; we should look at learning from those mistakes. As the Bill is introduced, we should not let those patterns continue and just conduct current practices in the same way. It is critical that the use of these powers should not be the norm. Competitive awards must be the default under the direct procurement system, and these powers should be exercised only in the most severe circumstances. Therefore, we have questions about the meaning of subsection (2) and the limits of what is deemed necessary.
The explanatory notes say:
“Subsection (2) provides a definition of what would be deemed “necessary” (i.e. to protect life or public safety). This intentionally limits the discretion afforded to the Minister in subsection (1). Additionally any regulations made under this section would need to be compliant with the United Kingdom’s international obligations, which will in practice ensure that the interpretation of ‘necessary’ is not too broad.”
What does that mean in practice, though? What international obligations would govern how broadly the clause should be applied? On a cursory reading,
“necessary to … protect human, animal or plant life or health”
could be as trivial as tackling the scourge of cats getting stuck up trees. I am sure that, as the explanatory notes say, the interpretation of “necessary” should not be too broad. I hope that the Minister can outline the Government’s explanation and give hon. Members some guidance, to help to put our minds at ease for Report stage.
I question, too, whether the clause is limited to tackling novel or temporarily sensitive issues, or whether it could be used to apply to problems we face constantly and are well known. We all understand that situations may arise in which we may need these powers—in response to a national emergency or a disease such as covid. However, we would be sceptical about their use for something such as a standard winter flu, where surges and needs can be predicted and procured for well in advance. We note that the higher bars are put into place to protect against misuse, and they may tackle some of the problems we have already touched on. For example, regulations must be made via clause 118 affirmative procedures and must be agreed by Parliament. Although these raised bars are welcome, our experiences from covid-19 show us that we can and should go further to ensure that these powers are not abused. In particular, the temporal measures involved in this clause can be beefed up. That is essentially what amendments 103, 104 and 108 would do. Amendment 108 would add a sunset clause to the powers under clause 42 and ensure that every three months Parliament had to approve the use of these powers.
Subsection (4) states:
“A Minister of the Crown must—
(a) keep regulations made under subsection (1) under review, and
(b) if the Minister considers that direct award under section 41 is no longer necessary, revoke the regulations.”
We saw during the pandemic how emergency powers were in place for far longer than some deemed necessary, and prevented extra layers of scrutiny of direct awards. As I have already highlighted, that had consequences in terms of taxpayers’ money, which is still being spent on PPE that is not needed. As the explanatory notes explain, procurement may need to be carried out quickly in an emergency; but after three months, we should be far more aware of the problems we face. Although emergencies may stay unpredictable, the knowledge available to Parliament and to decision makers at the start of an emergency will be significantly less than what we will know later. Parliament should have a say when more knowledge is available about that emergency. It should have a say on whether the powers are still necessary and proportionate to the emergency. The answers can change, so it is right that the House has the ability to respond. In addition, the further we go into an emergency, the more aware we are of the needs of our services to tackle the problems presented and the more confident we can be in carrying out our procurement.
Alex Burghart
Amendment 108 seeks to include a sunset clause on the face of the Bill in relation to any regulations made under clause 42, plus a prohibition on multiple uses of this power.
The fact that the regulations are subject to the made affirmative procedure gives the House a great deal of power. If the House does not wish to accept open-ended regulations, it will not have to. The scope of clause 42 is already suitably confined and restricted to prevent any abuse. The power can be used only in extremely rare scenarios. The regulations will have to be tailored to respond to the situation and their duration kept to the minimum. Further, any regulations made will have to be in compliance with our international agreements, which in practice will help ensure the scope is not too broad.
Any regulations made under this clause must be kept under review, and if the Minister considers that direct award is no longer necessary, the regulations must be revoked. For the avoidance of doubt, the use of the made affirmative procedure means that if regulations are not approved by Parliament, they will lapse after 28 days. Any regulations would likely be time limited through a sunset provision or subject to parliamentary review after a duration deemed appropriate in the context of the emergency event. If they were not, it would be open to Parliament not to approve them. We cannot see that Parliament will be satisfied with open-ended regulations permitting the procurement of goods or services beyond what is necessary to protect life in an extreme emergency event. As such, we respectfully suggest that the amendment is not required.
Clause 42 introduces a new power for a Minister of the Crown via statutory instrument to allow contracting authorities to award contracts directly within specific parameters. The power is crafted deliberately narrowly so that regulations can be made only where it is considered necessary to protect human, animal or plant life or health, or to protect public order or safety. The “extreme urgency” ground in regulation 32 of the public contracts regulations reflected in schedule 5 will be suitable for nearly all situations. But in rare cases, this may need to be overridden via Government direction to rapidly procure what is necessary for the protection of life.
The first Boardman review of covid-19 procurement suggested giving relevant Ministers the power to designate situations as a “crisis”, provided certain criteria were met, naturally with appropriate safeguards. The clause looks to implement these recommendations and aid emergency contracting. The current ground relies on individual contracting authority assessments and cannot be used if the need for urgency is caused by the authority itself or is foreseen. Regulations made in these circumstances would allow contracting authorities to procure with confidence, quickly and within specific parameters to deliver the essential goods or services.
In the extremely rare event that regulations under clause 42 are needed, there are already significant safeguards in the Bill. As I mentioned, the making of any secondary legislation will be subject to the scrutiny of the made affirmative procedure. The regulations will come into force immediately but will require approval from both Houses within 28 days. Without this approval, the regulations will cease to have effect. There is no limit on the regulations’ duration, allowing them to be tailored to the situation. Parliamentary scrutiny will ensure that the scope of the regulations is appropriate.
The obligation to publish a transparency notice prior to awarding a direct award contract remains even when relying on any such regulations. These new mandated notices demonstrate our intent—seen throughout the Bill—to drive further transparency into the procurement regime. We hope that clause 42 will never need to be used, but if direct awards are necessary to protect life or public safety in an ongoing emergency situation, the mechanism under the clause will significantly improve the situation by allowing contracting authorities to procure in confined circumstances, speeding up decisions and ensuring consistency across the public sector. I respectfully ask that the hon. Member for Vauxhall withdraw her amendment, and I recommend that the clause stand part of the Bill.
Question put, That the amendment be made.
Alex Burghart
Sometimes, competitive tendering procedures do not go to plan. Clause 43 allows the contracting authority to switch from a competitive procedure to direct award where no suitable tenders are submitted and it becomes clear competition is not possible. There are only limited circumstances to determine that a tender is unsuitable, which are detailed in subsection (2)—for example, where the price is abnormally low, as we discussed the other day, if there is evidence of corruption or collusion, or if a procedural requirement has been materially breached in a manner that may put the tender at an unfair advantage.
Florence Eshalomi
The clause relates to the switching of contracts under very limited circumstances. The use of the clause is not ideal, but we understand that it may be necessary in certain circumstances. We therefore do not object to the clause.
Question put and agreed to.
Clause 43 accordingly ordered to stand part of the Bill.
Clause 44
Transparency notices
Amendment proposed: 104, in clause 44, page 30, line 23, at end insert—
“(c) any connections between the supplier and any—
(i) registered political party,
(ii) Ministers of the Crown, or
(iii) Members of the House of Commons or House of Lords
where such connections are of a nature likely to be relevant to the direct award of the contract.”—(Kirsty Blackman.)
Question put, That the amendment be made.
Alex Burghart
Our approach in the Bill is clear: transparency is not optional. Clause 44 introduces a mandated requirement to publish a transparency notice when a direct award ground is going to be used. That goes further than the current voluntary notice. Direct award should, of course, be the exception and will be allowed only on the basis of specific and limited grounds set out in legislation. When direct award is relied on, the obligation will mean visibility, further demonstrating our drive to ensure transparency in public procurement.
Florence Eshalomi
As the Minister outlined, the clause covers transparency notices. Although we welcome the limited measures that the Bill takes to move towards transparency—for example, by obligating authorities to issue a transparency notice before awarding a contract—those are small baby steps that barely scratch the surface of what is required. Transparency should be a must; it is not a “nice to have”. It is about restoring public trust and it ultimately saves money. Lack of transparency in the procurement system reduces competition and increases costs, leaving the taxpayer to shoulder the burden. The adoption of open and transparent contracting makes good financial sense and will help to lead to a more competitive procurement system, ultimately, as I mentioned, saving on costs.
Transparency needs to be extended to Ministers. I have spoken at length about what we saw during the pandemic and the lack of transparency. Amendment 111 would go a long way to truly ensuring that Ministers, Lords and civil servants take transparency seriously.
Alex Burghart
The hon. Lady will have heard me say that we are mandating transparency like never before, and that all her concerns are already dealt with in the Bill.
Question put and agreed to.
Clause 44 accordingly ordered to stand part of the Bill.
Clause 45
Frameworks
Question proposed, That the clause stand part of the Bill.
Alex Burghart
This considerable group covers award under frameworks. Clause 45 sets out that a framework is a public contract designed for the future award of contracts to a supplier or suppliers. Frameworks are not the answer for every purchasing need, but they have their place and can result in significant savings, both financially and in time. As a framework is a public contract, it must be awarded in accordance with the procedures set out in the Bill. Once a framework is awarded, subsection (1) allows contracting authorities to award future public contracts in accordance with the framework.
Subsection (3) states that contracts can be awarded under a framework only following a competitive selection process, unless subsection (4) applies. Subsection (4) sets out the circumstances in which a framework can provide for the award of contracts directly to suppliers who are party to the framework, without any further competition. These are where the framework is with only one supplier, or if the framework sets out the core terms of the future contract and an objective mechanism for supplier selection.
Subsection (5) requires that each framework must state the goods, works or services that can be procured under it, the mechanism for defining the price, the estimated value of the business that will be procured through the framework, and the process to award further contracts. Subsection (5) also requires that the framework must state the duration of the framework, the contracting authorities that are able to use the framework, and whether the framework is an open framework. Currently, all frameworks lock suppliers out for their duration as there is no mechanism to open them up, and we are changing that under the Bill.
The provisions ensure that all frameworks will contain basic information about the scope and estimated value of the framework to clearly set out the parameters in which the framework can be used, and to avoid frameworks being used in a manner that unduly or unfairly closes off markets to competition.
Subsection (6) prohibits the award of a contract under a framework to an excluded supplier. Subsection (7) allows for fees to be charged under a framework when a supplier is awarded a contract under a framework. Subsection (8) means that a framework may not be used to award a concession contract, nor may a framework be used to set up another framework. Subsection (9) disapplies certain parts of clause 45 to frameworks that are light-touch contracts.
Clause 46 sets out the process by which contracts can be awarded under a framework through a competitive selection process. Subsection (1) allows for a competitive selection process to include conditions that suppliers have to satisfy to participate. Subsection (3) prohibits conditions that require the submission of annual audited accounts by suppliers who are not already required by law to have their annual accounts audited. It also ensures that alternative evidence can be used when assessing the supplier’s financial capability and that insurances need to be in place only at the point of contract award. That is a major win for small and medium-sized enterprises, removing a substantial barrier that has often held them back from entering into procurement.
Florence Eshalomi
Clauses 45 to 49 cover the framework arrangements that are in place and widely used across the public sector, helping to provide efficiency savings in procurement contracts. We feel it is important that there are powers in the Bill to allow for their existence, but we have concerns about the nature of the frameworks. We should make sure that we include strong terms to prevent any detrimental effects that they can have on procurement.
A big problem with the frameworks is that they can lock out suppliers and prevent the breakthrough of innovative and efficient suppliers in our system. That is outlined and emphasised in the Government’s impact assessment:
“The use of frameworks is established in the public sector, however stakeholders raised concerns around lengthy frameworks essentially locking suppliers out of a market for a number of years, without the opportunity to re-bid. This is particularly of concern for SMEs who may benefit from a place on a framework to assist business growth and gain experience in delivering contracts for the public sector.”
The Minister touched on some of that, but the Bill should look to reduce those concerns.
We also have concerns about some of the changes in language in relation to the term limit, which the Minister outlined. Currently, most frameworks have a term limit of four years. It is good to see that carried through in the Bill, even if there is an increase to eight years for defence, security and utilities. However, there seems to be a change to the contracts, whereby some of the terms can be extended. In the Public Contracts Regulations 2015, the time limit exception states:
“The term of a framework agreement shall not exceed 4 years, save in exceptional cases duly justified, in particular by the subject-matter of the framework agreement.”
However, clause 47 states:
“Subsection (1) does not apply if the contracting authority considers the nature of the goods, services or works to be supplied under contracts awarded in accordance with the framework means that a longer term is required…If a contracting authority relies on subsection (2) in awarding a framework with a term exceeding four or eight years, the contracting authority must set out its reasons in the tender or transparency notice for the framework.”
I would be grateful if the Minister confirmed what the difference is between those two terms. Will the clause make it easier or harder for contracts to be extended? If it makes it easier, as he suggested, will he tell us the justification behind the change? As we mentioned, there have been concerns about locking out suppliers through the frameworks, so we should be cautious about why the Government would seek to weaken provisions that prevent locking out. Clarity from the Minister on that point would be helpful.
I welcome the Minister’s comments on the new open frameworks procedure in clause 49, which has the potential to reduce time limits by unburdening contracting authorities from running the tender for a framework from scratch, but will he outline how often he would expect a typical framework to reopen? The legislation sets out a maximum of three years in the first instance, and then five years in the second. However, the explanatory notes state:
“This allows for the open framework to be re-opened on a more frequent basis—for example, annually”.
Again, the Minister touched on some of that, but does he expect the reopening of frameworks on an annual basis, and will there be any incentives in the system to encourage annual reopening?
Alex Burghart
As the hon. Lady heard me say, the great new initiative in the Bill—open frameworks—means that we will not see companies being shut out for long periods of time, which is good. We have seen SMEs being locked out from accessing public sector markets for up to four years at a time, so we have introduced the new open framework and the utilities dynamic market tools to bring down the barriers. I think we can all agree that that is much to the good.
The hon. Lady will also have heard me say that if a contracting authority is to go for a longer term than the four and eight-year maximum, it must be because of the goods, services or works that it will supply. Contracting authorities have to be clear and open about that, but we would expect them to do so only where there are specific reasons—for example, where it will take longer than eight years to recoup investment under the framework, or where contracts have a long lead time and therefore cannot be awarded within the requisite time period. Contracting authorities must have a rationale for that, and they have to be open. We think that the clauses cover that.
The hon. Lady will have seen that the maximum term provisions in clause 47 do not apply to open frameworks, which have a maximum duration of eight years. However, clause 49 requires open frameworks to be reopened for new suppliers to join at regular intervals—first, within the first three years of the framework, and not less than every five years thereafter.
Question put and agreed to.
Clause 45 accordingly ordered to stand part of the Bill.
Clauses 46 to 49 ordered to stand part of the Bill.
Clause 50
Contract award notices and assessment summaries
Question proposed, That the clause stand part of the Bill.
Alex Burghart
Clause 50 requires contracting authorities to publish a contract award notice before entering into a public contract. The notice will publish details about the outcome of the procurement process, alert the market to the fact that a contract is about to be signed and start the standstill period where it applies, which is a mandated or voluntary pause before the contracting authority can sign the contract. I will explain that further under clause 51.
Prior to the publication of a contract award notice issued under a competitive procurement, contracting authorities will be required to provide each supplier whose bid was assessed against the award criteria with an assessment summary containing information about the outcome of the assessment for the supplier’s own tender, to enable suppliers to understand why they did or did not win the contract. Unsuccessful suppliers will also be provided with a copy of the winning supplier’s assessment summary so that they can also see how their tender compared to the winning bid.
Clause 50 does not apply to contracts awarded under a defence and security framework, or to direct awards where the justification is that the contract is a user choice contract.
Florence Eshalomi
This is a simple clause relating to contract award notices and assessment summaries. We welcome these provisions and see it as a good step forward for suppliers and for transparency that each supplier that is not disregarded receives information about why their bid failed and why another bid was successful. That will help suppliers to improve their bids and to understand what a contracting authority desires.
We have spoken a lot about SMEs, and I think they will welcome the clause, because they often struggle to navigate the market and they may feel that the cost of failed bids is part of the reason. We await information on what will come from clause 93, but we will discuss that when we get to it. We are happy to support this clause.
Question put and agreed to.
Clause 50 accordingly ordered to stand part of the Bill.
Clause 51
Standstill periods on the award of contracts
Question proposed, That the clause stand part of the Bill.
Alex Burghart
Clause 51 covers the standstill period, which is a minimum eight-working-day pause following publication of the contract award notice before the contracting authority can enter into the contract. It gives unsuccessful suppliers, in particular, the opportunity to understand the feedback provided and raise legal challenges to the procurement process prior to the contract being signed, where they believe the procurement has been conducted unlawfully.
A claim notified during the standstill period triggers an automatic suspension of the procurement under clause 99, which preserves the potential for the challenging supplier to obtain the contract and protects the contracting authority from entering into an unlawful public contract. That mitigates the risk of a contracting authority paying twice—that is, paying the price of the contract plus compensation for a losing bidder with a successful claim—as after contract signature, the contracting authority is subject to post-contractual remedies under clause 101. That includes damages and the possibility of the contract being set aside—being declared void by the court.
If the standstill period passes without legal challenge, the contracting authority avoids the risk of a set aside claim under clause 101. A standstill period is not mandatory in all cases. Subsection (3) lists the types of contract where the contracting authority can elect to apply a standstill on a voluntary basis. Contracting authorities complying with a voluntary standstill period, which is also envisaged for contract modifications under clause 75, will receive the same protections as that obtained for a mandatory standstill.
Florence Eshalomi
Clause 51 is almost identical to similar provisions in the Public Contracts Regulations. As the Minister outlined, the standstill period will be welcomed and beneficial. The Opposition feel that the clause is necessary and that there is nothing controversial in it.
Question put and agreed to.
Clause 51 accordingly ordered to stand part of the Bill.
Clause 52
Key performance indicators
Chris Evans
I beg to move amendment 4, in clause 52, page 35, line 23, leave out “£5 million” and insert “£2 million”.
This amendment would reinstate the threshold for the setting and publication of key performance indicators for major projects at £2m.
The Chair
With this it will be convenient to discuss the following:
Government amendments 75, 78 and 80.
Clause stand part.
Chris Evans
I outlined the importance of transparency and accountability in a previous debate on procurement. Our amendment 4 is an attempt to strengthen that further and to reinstate at £2 million the threshold for publishing contracts in major projects. I noted previously that the financial threshold was raised in the other place and that the Minister could not explain why £5 million was decided on. If the Bill is an attempt to make procurement more transparent, we have failed at the first hurdle.
On Second Reading, my right hon. Friend the Member for Ashton-under-Lyne (Angela Rayner), the deputy leader of the Labour party, said:
“Being granted taxpayers’ money is a privilege.”—[Official Report, 9 January 2023; Vol. 725, c. 353.]
I remind Government Members that their long-departed leader, Lady Thatcher, once said that it is not the Government’s money, but taxpayers’ money, and that every penny should be accounted for. I am looking at the Minister and hoping that I got that quote absolutely right—I am sure he will correct me if I did not. I believe that is true no matter the sum of money. Every pound represents the work of hard-working people across the country, and we—particularly those of us who serve on the Public Accounts Committee—should be mindful of that.
That is why contracts awarded at £2 million should have the same scrutiny as those worth more. Figures such as £2 million are often bandied about—we hear the value of transfers in sport—but that is still a considerable amount of money. If we are truly committed to reducing waste in procurement, we need more transparency throughout. Introducing key performance indicators at a lower threshold would signal to businesses that the UK requires value for money, and efficiency, from every procurement contract.
While I appreciate that the Government have stated that the changes to the threshold are to reduce any administration requirements, and to address concerns raised by the Local Government Association, the lack of transparency around how the threshold was decided has made me understandably cautious. Transparency and value for money must be priorities when spending taxpayers’ money. Increasing the number of contracts that are scrutinised by requiring key performance indicators would allow for transparency at all stages of a contract’s lifecycle and hold businesses to account on issues of social value.
When we are in the midst of a climate crisis, it is necessary to ensure that suppliers are actively working towards the UK’s net zero commitments. When industries across the country are facing a skills gap, it is necessary to ensure that businesses are committed to apprenticeships and training new generations. And while the country continues to face a cost of living crisis, it is necessary to ensure that jobs across the supply chain are protected.
Alex Burghart
There are few rarer treats than hearing an Opposition Member quote Baroness Thatcher. I am sure the hon. Gentleman will have reflected on, and enjoyed, the fact that she also said, “The problem with socialism is that you quickly run out of other people’s money.”
However, the hon. Member’s probing amendment is fair enough, and it is important that we discuss this issue. Hon. Members will recall that the Bill as introduced had a threshold of £2 million for the publication of KPIs on public contracts, but that the threshold was increased to £5 million in the House of Lords as part of a package of measures designed to reduce the administrative burden placed on contracting authorities, while still providing increased transparency in respect of larger public procurements.
The current financial threshold balances the need for transparency on KPIs with the costs and burdens of implementing the rules at a lower spend value. To reassure the hon. Gentleman, £5 million, which we have now fixed on, aligns with the thresholds that are used by central Government in the playbook for procurement. It is generally seen as the point where things become more complex. We thrashed out the number based on a lot of engagement with industry, and it was felt that that was an appropriate threshold to ensure that we were not including a lot of contracts with lower complexity.
Turning to amendments 75, 78 and 80, there are a number of places in the Bill where we apply financial thresholds that trigger obligations on a contracting authority. The Delegated Powers and Regulatory Reform Committee recommended that the affirmative procedure for secondary legislation should be applied for a number of those, and we made those amendments in the other place. That ensures greater scrutiny where there is a change in transparency requirements. We also indicated in our response to the DPRRC that we considered that the justifications for that applied equally to the amendment of the financial threshold for the setting and publication of key performance indicators. Amendments 75, 78 and 80 achieve this.
Clause 52 describes a requirement for contracting authorities to
“publish at least three key performance indicators”
for public contracts worth more than £5 million. That is a new requirement and it will ensure that we have visibility of how well individual suppliers are delivering in the public sector.
The clause is intended to bring transparency to the management of significant public sector contracts, allowing citizens and others to see how suppliers are performing. It should also ensure that companies that repeatedly fail to deliver do not win additional business—something that is not possible under the present procurement rules. The requirement does not apply if the contracting authority considers that KPIs are not an appropriate measure of contract performance in a given case. The example we give is of a contract for the one-off supply of goods. That is a one-time action and cannot be measured over time or by varying metrics.
The clause does not apply to the establishment of framework contracts—but it will apply to contracts awarded through the framework—utilities contracts awarded by a private utility company, concession contracts or light-touch contracts. A power is given for an appropriate authority to amend the financial threshold above which KPIs must be published. We have tabled an amendment to make the power to change the threshold subject to the affirmative procedure, so that if this Government or future Governments wish to adjust the threshold, they can easily do so, provided that they have Parliament’s consent.
The overall picture is enhanced by the spend data reporting obligation in clause 70. I respectfully request that amendment 4 be withdrawn.
Chris Evans
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 52 ordered to stand part of the Bill.
Clause 53
Contract details notices and publication of contracts
Chris Evans
I beg to move amendment 26, in clause 53, page 36, line 9, leave out “£5 million” and insert “£2 million”.
This amendment would reinstate the threshold for publishing the contracts in major projects at £2m.
As noted in the explanatory statement, the amendment would reinstate the threshold for publishing the contracts in major projects at £2 million. As I have pointed out, the Government seem to have chosen £5 million as an arbitrary figure. I will not repeat the points I have already made. We do not want to place an undue burden on small and medium-sized enterprises to have to employ costly legal advice to redact sensitive company information. However, I believe that, with sums of more than £2 million, it is completely reasonable to expect transparency.
Trust in Government spending is important to overall trust in Government, especially when they are spending sums of public money in the millions. It is not unreasonable for the public to expect transparency about where their money is being spent, and that the information is readily available and easily accessible. Although I understand the need not to make the process too arduous for smaller businesses, the proper balance must be found.
Alex Burghart
The revised threshold of £5 million seeks to ensure that a disproportionate administrative burden is not placed on contracting authorities and, as I have said, it reflects what we have in the playbook. The figure came out of a large amount of engagement with industry. There was recognition that it is around the £5 million threshold that we see additional complexity in contracts. That is why we think that the current financial threshold balances the need for transparency in these important matters with the costs and burdens of implementing the rules at a lower spend value.
It is important to stress, however, that contracting authorities will still be bound by a transparency obligation to publish contract detail notices for contracts above the agreement on Government procurement thresholds, which will contain information on which supplier has won the contract and other information about the contract award. I respectfully request that the hon. Gentleman withdraws his amendment.
Chris Evans
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Alex Burghart
Clause 53 requires contracting authorities that enter into a public contract to publish a contract details notice. This is a significant extension of transparency, which will allow interested parties to see details of public sector contracts. The contract must be published within 90 days of the contract being entered into or, in the case of a light-touch contract, within 180 days. The contract details notice will contain information on the goods and services procured, the value of the successful tender and the procurement method used.
The Welsh Government and the Northern Ireland Executive have decided to include a derogation from publication of a contract, which is their right.
Chris Evans
Clause 53 sets out the need for the publication of contract details for all contracts over £5 million. According to the Government’s own figures, one in every three pounds of public money—some £300 billion a year—is spent on public procurement. Ultimately, the taxpayer deserves to know that money from the public purse is being well spent.
I know from my time on the Public Accounts Committee—sooner or later, we will start doing PAC bingo, as every time I stand up I seem to mention how long I was on that Committee. I was there for five years. I promise that I am not going to speak for five years, Mr Efford—
Chris Evans
Fidel Castro was the master—I think 18 hours was his minimum. If you want me to do that, Mr Efford, I can. With lunch coming up, I think I would be the most popular member of the Committee.
I know from my time on the Public Accounts Committee that transparency leads to improved Government spending. There should be no place to hide poor contract decisions or, in the worst cases, possible cronyism. Unfortunately, there have been several scandals relating to procurement and Government spending. We have already heard this morning about the questions surrounding the procurement of PPE during the pandemic, which led, unfortunately, to the huge sum of £10 billion of public funds being spent on unusable, overpriced and even undelivered PPE.
At a time when so many families are struggling with the cost of living crisis, we cannot allow the public to feel that their hard-earned tax money is not being spent properly, and we all must work to restore public trust in Government procurement. The Government’s own “transparency ambition” document outlines a concerning failure to provide transparency in our procurement system. These reforms are long overdue and I am pleased that we are able to talk about them today. I think we can all agree that it is important that we increase trust in Government, and one of the key ways we can do that is through transparency. Labour would go further in government than the present Conservative Government. We would introduce a Ukraine-style publicly accessible dashboard of Government contracts tracking delivery and performance.
I am pleased that the Government have made some commitments to increasing transparency on large projects. The reforms—particularly the introduction of a number of new procurement notices covering the entire procurement lifecycle from planning through to contract expiry—are a welcome step forward. However, there are a few areas where we need clarity on implementation.
For example, at clause 53(2), the Bill states:
“A ‘contract details notice’ means a notice setting out—
(a) that the contracting authority has entered into a contract, and
(b) any other information specified in regulations under section 93.”
The Minister said on Second Reading that the Government
“will deliver world-leading standards of transparency in public procurement”—[Official Report, 9 January 2023; Vol. 725, c. 343.]
and that there is a
“statutory obligation on the Government to deliver a single digital platform to host this data.”—[Official Report, 9 January 2023; Vol. 725, c. 348.]
However, it is unclear what a contract details notice will look like in practice, and how much detail will be required—in other words, how much transparency will actually be provided. It seems strange that there is no outline of how much data will be provided and what form it will take. I worry that will allow for only the very basic details of public contracts to be provided. Could the Minister explain his understanding of what transparency notices will look like and what information they will be required to contain?
A concern raised by the Local Government Association is that the clause risks contradicting other pieces of legislation, which, in turn, risks the ability to achieve one single digital platform for procurement. The LGA has suggested that the Transport Act 1985, the Service Subsidy Agreements (Tendering) (England) Regulations 2002 and the best value transparency code may have an impact on the implementation of the Bill. Could the Minister tell us whether that has been resolved, or what plans the Government have to ensure that other legislation does not interfere with the implementation of the single digital platform?
Overall, I welcome the goals of the clause, but I feel that it requires closer attention to ensure that it is properly implemented.
11 am
Alex Burghart
I am happy to play bingo with the hon. Gentleman any time. One particular game that we might play is to call “Bingo!” every time the Ukrainian digital platform is mentioned, because it has been mentioned several times. And well might it be mentioned, because it is a model of good practice. The hon. Gentleman will have heard me say on several occasions that we were grateful to the Ukrainian Government for coming and advising us on the creation of our own digital platform, which he will also have heard me mention. That platform will be the harbour of transparency, enabling suppliers, contracting authorities, central Government, voters and the press to see what is going on and to hold people to account. It will be a great asset.
The precise details of what needs to be published are not fit to be put in the Bill and the requirements may change over time. However, we will set those details out in due course, and what will drive our considerations when we do so is the ability to hold suppliers and contracting authorities to account.
Question put and agreed to.
Clause 53 accordingly ordered to stand part of the Bill.
Clause 54
Time limits
Alex Burghart
I beg to move amendment 34, in clause 54, page 37, line 14, at end insert— “The contract— (a) being awarded is a utilities contract, or (b) is being awarded by a contracting authority that is not a central government authority, and is subject to a negotiated tendering period No minimum period The contract— (a) being awarded is a utilities contract, or (b) is being awarded by a contracting authority that is not a central government authority, and tenders may be submitted only by pre-selected suppliers 10 days”
This amendment would set different minimum tendering periods where tenders may only be submitted by pre-selected suppliers (depending on whether the contracting authority and suppliers agree on a tendering period or not).
The Chair
With this it will be convenient to discuss the following:
Government amendments 35 and 36.
Clause stand part.
Alex Burghart
Government amendments 34 to 36 are technical amendments to allow shorter time periods to be set by utilities and contracting authorities that are not classed as central Government authorities, which will be defined in regulations made under the Bill, for procurements where there has been a prior selection round.
Following completion of that prior selection round, utilities and non-central Government authorities will invite identified suppliers to submit their tenders. The amendments will mean that they can negotiate a suitable time limit with all suppliers or, in the absence of agreement, a minimum of 10 days will apply. This flexibility exists in the current regime and, in common with all minimum time limits in the clause, is GPA-compliant. It was not included in the Bill previously because certain trade agreements did not permit such flexibility. However, following very positive progress in negotiations, we are now confident that we can make the change.
We know from our engagement with industry groups that utilities and sub-central bodies such as local authorities are hugely supportive of the change, because they will benefit from reduced timeframes and faster procurements. This will ultimately result in quicker delivery to the public of goods and services from those entities, benefiting us all.
Clause 54 as a whole deals with time limits during competitive procurements. It is important that suppliers are allowed adequate time during the awarding of public contracts, for example to prepare and submit tenders or requests to participate in a procurement.
The clause sets out minimum time periods that must be met in different circumstances, in line with the requirements of the GPA. These are minimum time limits. Consequently, contracting authorities are also directed to wider considerations for setting time periods, such as the nature and complexity of the contract, the need for site visits, and avoiding unnecessary delays.
Florence Eshalomi
These amendments set out the minimum timescales that apply when a contract is only between authorities and pre-selected suppliers. As these suppliers are verified to be compliant with the conditions of participation, it is logical that they would need less time to prepare a bid and would not be caught off guard by the 10-day minimum period, or the negotiated tendering period if one can be agreed. I thank the Minister for his explanation about why this is necessary, which was helpful. However, I also share the desire to reduce some of the unnecessary bureaucracy on both the authorities and the companies involved.
We do not seek to oppose these amendments. However, in relation to clause 54 there are considerable concerns about the minimum time limits that contracting authorities must abide by within certain circumstances. It is right to strike the balance between bureaucratic obligations on contracting authorities and the need for suppliers to have sufficient notice to compile a tender. As we have already outlined, this is really important for SMEs, which may sometimes lack the necessary staff or may require greater time to consider the consequences of bidding for contracts and to assess the ability of their company to do so.
We must also bear in mind the article 11 time periods of the World Trade Organisation’s general procurement agreement, which sets out minimum deadlines in line with the deadlines in the Bill. That is a step forward. We recognise that the Government’s hands are somewhat tied on this issue, but we should not wish to breach any international agreements. We therefore feel that the current amounts strike the right balance between bureaucracy and providing everyone with a fair chance to bid, so we do not intend to oppose them. As I have highlighted, we welcome the provisions in clause 15, which also interact with this part of the Bill. Trading off time limits in this part of the Bill for a pre-engagement notice is a sensible choice that benefits everyone, and we are happy to support the second part of this provision in the clause.
Amendment 34 agreed to.
Amendments made: 35, in clause 54, page 37, line 35, at end insert—
“‘central government authority’ has the meaning given in paragraph 5 of Schedule 1 (threshold amounts);
‘negotiated tendering period’ means a tendering period agreed between a contracting authority and pre-selected suppliers in circumstances where tenders may be submitted only by those pre-selected suppliers;”.
This amendment would define terms used in Amendment 34.
Amendment 36, in clause 54, page 38, line 2, at end insert—
“‘pre-selected supplier’ means a supplier that—
(a) has been assessed as satisfying conditions of participation before being invited to submit a tender as part of a competitive tendering procedure, or
(b) in the case of a contract that is being awarded by reference to suppliers’ membership of a dynamic market, is a member of that market;”.—(Alex Burghart.)
This amendment would define a term used in Amendment 34.
Clause 54, as amended, ordered to stand part of the Bill.
Clause 55
Procurement termination notices
Question proposed, That the clause stand part of the Bill.
Alex Burghart
Clause 55 requires contracting authorities, except private utilities, to publish a procurement termination notice as soon as reasonably practicable after making a decision to terminate a procurement. Each time a tender or transparency notice, which initiates a procurement, is published it creates a data record of the lifetime of that procurement and any resulting contract. Failure to confirm that a procurement has been terminated will result in the suppliers not being aware of a cancellation and in permanently incomplete data records and inaccurate records on our central platform, because the number of ongoing procurements will incorrectly include terminated procurements, which is unhelpful for anyone monitoring and using that data. A procurement termination notice is required to ensure that the data record and the full story of the procurement are concluded.
Florence Eshalomi
I thank the Minister for outlining that. The clause is simple. It ensures that when a tender or transparency notice is published, there must be a notice if the contracting authority does not award the contract. The clause is necessary, and we are happy for it to stand part of the Bill.
Question put and agreed to.
Clause 55 accordingly ordered to stand part of the Bill.
Clause 56
Technical specifications
Alex Burghart
I beg to move amendment 37, in clause 56, page 38, line 24, at end insert—
“(za) the standard adopts an internationally-recognised equivalent, or”.
This amendment would allow procurement documents to refer to a UK standard if the standard adopts an internationally-recognised equivalent.
Alex Burghart
The Committee will be delighted to hear that Government amendments 37 to 41 to clause 56, which concerns technical specifications, are very technical amendments. They will help to ensure that the Bill’s requirements in relation to standards, certification and accreditation are clear and fully align with how standards work in practice and the Government’s policies in those areas.
We are committed to openness and international trade, so contracting authorities must use international standards, or international standards that the British Standards Institution has adopted via a British standard, before using specific UK standards. We need to ensure that standards are appropriate, and we have strengthened the onus on the supplier to demonstrate that when claiming that it possesses an equivalent to standards requested by contracting authorities. In addition, the amendments make clear that contracting authorities can request evidence to verify that a standard has been met. That may include conformity assessments from certification bodies accredited by organisations such as the United Kingdom Accreditation Service, or UKAS.
Florence Eshalomi
The amendments help to clarify some of the technical provisions relating to the presentation and meeting of United Kingdom standards, as referred to in subsection (5). The Minister said that they are technical amendments. It is fine that we have technical provisions that have reached this stage without amendment, but we will be happy to hear clarification from the Minister this morning. We do not intend to oppose the amendments.
Amendment 37 agreed to.
Amendments made: 38, in clause 56, page 38, line 26, leave out paragraph (b).
This amendment is consequential on equivalent provision being made by the new subsections inserted by Amendment 39.
Amendment 39, in clause 56, page 38, line 29, at end insert—
“(3A) If the procurement documents refer to a United Kingdom standard, they must provide that tenders, proposals or applications that the contracting authority considers satisfy an equivalent standard from another state, territory or organisation of states or territories will be treated as having satisfied the United Kingdom standard.
(3B) In considering whether a standard is equivalent to a United Kingdom standard for the purposes of subsection (3A), a contracting authority may have regard to the authority’s purpose in referring to the standard.
(3C) A contracting authority may require certification, or other evidence, for the purpose of satisfying itself that a standard is satisfied or equivalent.”
This amendment would clarify how a contracting authority is to assess whether tenders, proposals or applications satisfy equivalent standards to United Kingdom standards (including that it may require evidence).
Amendment 40, in clause 56, page 38, line 36, leave out “such matters” and insert
“the matters mentioned in subsection (4)”.—(Alex Burghart.)
This amendment would clarify that the requirement in subsection (5) only applies where the matters mentioned in subsection (4) are referred to in the procurement documents.
Florence Eshalomi
I beg to move amendment 8, in clause 56, page 38, line 38, at end insert—
“(5A) For all procurement which is intended for use by natural persons, whether the general public or staff of the contracting authority, the technical specifications in the procurement documents must, except in duly justified cases, be drawn up so as to take into account accessibility criteria for disabled persons or design for all users.”
This amendment would reproduce on the face of the Bill requirements for accessibility criteria for disabled persons which are included in the Public Contacts Regulations 2015, which this Bill will replace.
Amendment 8, in the name of my hon. Friend and neighbour the Member for Battersea (Marsha De Cordova), addresses the fact that the Bill overwrites requirements that ensure publicly procured goods and services are accessible to everyone and has no clauses specifically relating to accessibility for disabled people or replacing the current regulatory framework for accessibility. Accessibility is included only in clause 94, with regard to electronic communication and in the recommendation. While the reference to accessibility in clause 94(2), which states that any electronic communications utilised as part of the public procurement exercise must be
“accessible to people with disabilities”,
is a welcome addition, it does not address concerns to ensure that public funds are used to drive improved outcomes for disabled people. The Bill does not include any reference to the need for public procurement exercises to take account of accessibility.
Amendment 8 would create a new provision in the Bill to ensure that publicly procured goods and services meet a minimum standard of accessibility. Currently, regulation 42 of the Public Contracts Regulations 2015 states that the specifications for procurement must be
“drawn up so as to take into account accessibility criteria for disabled persons or design for all users.”
The amendment would simply reproduce that existing requirement in the Bill, ensuring that the current regulatory framework for accessibility is maintained.
Legal experts do not believe that the public sector equality duty under the Equality Act 2010 is sufficient. That is recognised by the current system, which incorporates both the public sector equality duty and regulation 42 of the Public Contracts Regulations to ensure that goods and services are accessible to everyone. Even with regulation 42, contracting authorities continually fail to consider their obligations and procure inaccessible products. Accessibility for disabled people must be maintained at the heart of any new public procurement legislation.
In early 2020, the then Prime Minister wrote to every Government Department calling on his Cabinet to increase opportunities and improve access to services for disabled people. From publicly procured ticketing machines to online consultation software, the Bill offers a great opportunity to meet that expectation and ensure that Government services are accessible to all. I hope the Minister will agree that this amendment would help to ensure we do not go backwards on disability rights in procurement.
Alex Burghart
Amendment 8, tabled by the hon. Member for Battersea, with whom I had the pleasure of serving on the Work and Pensions Committee a few years ago, seeks to ensure that in procurements where the end product is intended to be used by people, the technical specifications account for the needs of people with disabilities. I very much want to reassure the Committee that the UK already has legal obligations that dictate how technical specifications are drawn up in these circumstances, with disability accessibility and even broader considerations covered by the public sector equality duty under section 149 of the Equality Act 2010.
The existing procurement regulations are derived from EU procurement directives, which were designed to be applied to member states where domestic laws do not adequately provide for accessibility requirements, as the Equality Act does. When applied to procurement, the Equality Act requirements are more pervasive than regulation 42 of the Public Contract Regulations 2015, and there is no need unnecessarily to replicate EU provisions when our domestic law is fit for purpose. Indeed, the Equality Act goes further than regulation 42, covering other protected characteristics and applying to the whole commercial lifecycle more broadly than just technical specifications.
Although we do not think this amendment is necessary, the Government remain committed to ensuring public procurement drives better outcomes for people with disabilities, and I recognise that implementation is currently patchy. We welcome engagement with charities and organisations supporting people with disabilities, to help ensure that disability accessibility is improved and effectively considered by contracting authorities in public procurement. As a consequence, I respectfully request that this amendment be withdrawn.
Florence Eshalomi
I understand the Minister’s concern and his admission that the Government will consult those disability charities, but does he agree with me that, as it stands, there are currently no requirements for goods and services to meet that standard of accessibility?
Alex Burghart
The hon. Lady will have heard me say that the legal duty that exists within Equality Act 2010 goes further than the EU procurement rules that we are getting rid of. It goes further than the EU procurement directives, so there is no loss of obligation in the creation of the Bill.
I am very happy to meet the hon. Member for Battersea, who is an expert in these issues, in order to reassure her. As far as we are concerned, the Equality Act 2010 goes further than the EU procurement directives, so this amendment is not necessary.
Question put, That the amendment be made.
Alex Burghart
Clause 56 sets technical specifications that contain the required characteristics of the goods, services or works that a supplier has to provide. They are included within procurement documents to present suppliers with a full description of the contracting authority’s needs, to enable suppliers to propose a solution to meet those needs via a tender response.
In line with the broader goal of a simpler regulatory framework and increased flexibility to design efficient, commercial and market-focused competition, the Bill does not dictate how technical specifications are to be drawn up by contracting authorities, or mandate what exactly should be included.
As such, clause 56 simply requires contracting authorities to refer to performance or functional requirements over descriptive characteristics, to focus on the desired outcomes of a contract rather than being overly prescriptive on the method by which this is achieved. Clause 56 also prevents contracting authorities from referring to things like specific trademarks or producers—in essence prohibiting an arbitrary favouring of national or specific products—to avoid narrowing the competitive pool.
Contracting authorities must also use international standards where they exist, or national standards allowing for equivalents. This provision, required by the UK and other parties to the World Trade Organisation’s Government procurement agreement is helpful, as the UK advocates for high standards in the supply of goods and services and was a founding member of standards organisations, such as the International Organisation for Standardisation and the International Electrotechnical Commission.
Question put and agreed to.
Clause 56, as amended, accordingly ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned.—(Julie Marson.)
Procurement Bill [ Lords ] (Sixth sitting)
Tuesday 7th February 2023
(1 year, 9 months ago)
Public Bill CommitteesRead Full debate Procurement Act 2023 View all Procurement Act 2023 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 7 February 2023 - (7 Feb 2023)
The Committee divided: - Ayes: 5 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 8 / Noes: 4 - Question accordingly agreed to.
The Committee divided: - Ayes: 5 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 8 - Question accordingly negatived.
Florence Eshalomi (Vauxhall) (Lab/Co-op)
I beg to move amendment 23, in clause 57, page 39, line 22, after “mandatory” insert “or discretionary”.
This amendment would make a supplier or an associated person on the debarment list for a discretionary ground an excluded supplier.
The Chair
With this it will be convenient to discuss the following:
Amendment 24, in clause 57, page 39, line 29, leave out subsection (b).
This amendment is consequential on Amendment 23.
Clause stand part.
Clause 58 stand part.
Florence Eshalomi
It is a pleasure to serve under your chairship, Mr Mundell. Amendments 23 and 24 would ensure that everyone on the debarment list is excluded from the procurement system, except for under the provisions relating to the public interest test in clause 41.
On Thursday I listened to the Minister explain “exclusions”, “exclusionary” and the debarment list. We had hoped that the Minister would give a more substantive explanation, given the issues that we highlighted, but we remain concerned. I will not go over the debate, but I was not satisfied to hear that a contracting authority will have discretion to award, say, a paperclip contract, as the Minister said, to a company identified as a national security risk. I have my paperclips here, if the Minister would like one. I want to ask a question that most people in this country will have. Why we are giving public money to a supplier who is identified as being a threat? With all due respect to procurement officers, we cannot expect there not to be blurred lines. Something that seems innocuous might actually be an open door, not spotted by a procurement officer or even our own security experts.
I am sure we all heard last week about the issue of the spy balloon, and how that created alarm in the USA. In the end, military action was required to shoot it down. A US defence officer has revealed that other suspected spy balloons flew over the US during the Trump Administration. That shows that real threats can pop up anytime and anywhere, and they can take multiple forms. Amendments 23 and 24 reflect some of the dissatisfaction I have outlined. As the Bill stands, a supplier put on the debarment list on schedule 7 grounds would be classed as an “excludable supplier”, meaning the contracting authority could still, at its discretion, award them a contract. I understand from the Minister’s comments, and from conversations with stakeholders, why there needs to be discretion with regard to excludable grounds, but I do not believe that such discretion should extend to suppliers on the debarment list.
The Government have outlined the debarment list is reserved for the most serious cases of misconduct. On 4 August 2022, the then Minister Lord True wrote a letter to the now Minister Baroness Neville-Rolfe, in which he said:
“I should start by explaining 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.
It is also important to clarify that meeting a ground for exclusion is not sufficient on its own to justify the addition of a supplier to the debarment list. In addition to considering whether an exclusion ground applies, the Minister must also consider whether the circumstances that led to the application of the exclusion ground are likely to occur again. Only if the circumstances are considered likely to occur again may the supplier be added to the debarment list. This ensures that exclusion is not a punishment for past behaviour but a forward-looking measure based on the risk posed by the supplier.”
In the words of Lord True, suppliers on the list represent a significant risk to the public. It was therefore pleasing to hear the Minister say on Tuesday:
“Suppliers on the debarment list face exclusion across the public sector at all levels. That is a significant step forward in our approach to supplier misconduct.”––[Official Report, Procurement Bill Public Bill Committee, 31 January 2023; c. 63.]
I think most people would welcome the fact that suppliers on the list are automatically excluded. However, under the Bill, the contracting authority will still be able to exclude suppliers on the list on discretionary exclusion grounds. When a supplier represents such a risk that they are one of the few to be on the debarment list, why should they still be allowed access to public contracts? We do not want suppliers who commit egregious breaches near public contracts.
I refer back to the Minister’s example of a paperclip contract. Does he believe that a supplier who has been found guilty of environmental misconduct, has frequently breached contracts and performed poorly, is a national threat, or committed a breach that is grounds for discretionary exclusion, although the Government decided not to put them on the debarment list, should have access to public contracts? Will the public want their money to be spent that way, and handed to that supplier? Every supplier on the debarment list is surely one that the Minister believes should not be near our procurements. Again, we come to the question: why allow this discretion? Our amendment would ensure that those on the debarment list were excluded from all public contracts without question. I urge the Minister to think carefully about that, and to consider whether he can support the amendment.
I turn briefly to clause 58. Although every excluded or excludable supplier must be given the opportunity to prove that they are now a reputable supplier, it is important to remember that procurement rules are there to ensure that public money is spent efficiently and on delivering the public services we need. When it comes to deciding whether a supplier comes under the definitions set out in clause 57, has the Minister considered taking the US-style approach of weighing the reputational and delivery risk to the contracting authority of allowing the supplier to take the contract? There will be disadvantages and advantages to both approaches, but I would be interested to learn whether that was explored, and why the Government adopted the approach taken in the Bill.
The Parliamentary Secretary, Cabinet Office (Alex Burghart)
It is a pleasure to serve under your chairmanship once again, Mr Mundell. Amendments 23 and 24 would require contracting authorities to treat any supplier on the debarment list as being subject to mandatory exclusion, even when it is on the list because a discretionary exclusion ground applies. The concept of “excluded supplier” is by nature a blunt instrument. An excluded supplier faces exclusion from every public contract for five years unless and until a contracting authority is satisfied that the risk of the issues re-occurring has been addressed. For that reason, a supplier is an excluded supplier only when one of the grounds reserved for the most serious forms of misconduct apply—the mandatory grounds.
It is clearly right that when a Minister of the Crown places a supplier on the debarment list because a mandatory exclusion ground applies, and the issues are likely to occur again, authorities awarding contracts should treat that supplier as an excluded supplier. The inclusion of discretionary exclusion grounds in schedule 7 reflects the fact that, for offences where a range of misconduct could be involved, it might be appropriate to take into account factors such as the nature of the contract being tendered or the level of harm caused before deciding to exclude a supplier.
None the less, the Government believe that it should be possible to include a supplier that has fallen foul of a discretionary exclusion ground on the debarment list. This involves contracting authorities having to do their own due diligence on the suppliers’ misconduct and self-cleaning measures. However, given that discretionary exclusion grounds are potentially less serious, a contracting authority should retain some discretion with regard to that supplier, once they are on the list.
Clause 57 sets out the meaning of the terms “excluded supplier” and “excludable supplier”. The Bill provides elsewhere that contracting authorities are either obliged or permitted to consider whether suppliers should be excluded or excludable at various points in a procurement. In most cases, excluded suppliers must be prevented from participating in a procurement or being awarded a contract, while excludable suppliers may be excluded at the discretion of the contracting authority.
Excluded suppliers are defined in subsection (1) as those to whom a contracting authority considers that
“a mandatory exclusion ground applies”,
as set out in schedule 6. The contracting authority must also consider that
“the circumstances giving rise to the application of the exclusion ground are likely to occur again,”
or that the supplier is
“on the debarment list by virtue of a mandatory exclusion ground.”
Excludable suppliers are defined in subsection (2) as those to whom a contracting authority considers that
“a discretionary exclusion ground applies”
as set out in schedule 7. The contracting authority must also consider that
“the circumstances giving rise to the application of the exclusion ground are likely to occur again,”
or that the supplier is
“on the debarment list by virtue of a discretionary exclusion ground.”
In both cases, the supplier is excluded or excludable if they are on the debarment list. Private utilities can treat mandatory exclusion grounds as discretionary; that is set out in subsection (3).
Clause 58 sets out how contracting authorities should assess the risk of the re-occurrence of the circumstances that gave rise to the application of an exclusion ground to a supplier. Contracting authorities may have regard to the range of factors set out in subsection (1) when evaluating that risk. Subsection (2) imposes a duty on the contracting authorities applying the exclusions regime to give suppliers an opportunity to submit evidence to show that the circumstances are not likely to recur—that is, that they have “self-cleaned”. Suppliers are also entitled to make the case that they are not subject to a ground for exclusion, and to make representations more generally.
The self-cleaning evidence must be sufficient to satisfy the contracting authority that the circumstances that gave rise to potential exclusion are not likely to occur again. Importantly, subsection (3) stipulates that contracting authorities must not make disproportionate requests for information or remedial evidence. That protects suppliers by ensuring that contracting authorities focus on the most important aspects of self-cleaning relevant to the particular circumstances.
The hon. Member for Vauxhall understandably takes us back to the issue of discretionary versus mandatory exclusions, which we debated the other day. One thing we need to bear in mind—perhaps with regard to more rarefied objects than paperclips—is that there may be circumstances in which particular substances or items can be procured only from certain suppliers. That may be essential for the operation of certain processes or the response to certain emergency situations.
Florence Eshalomi
As I said, I understand why the Minister says that there should be some discretion, and that it should lie with the contracting authority. However, does he agree that such discretion should not stretch to the point at which an organisation is on the debarment list, and there is an issue of national security?
Alex Burghart
There is absolutely the issue of national security. However, it is important that we retain an element of flexibility, so that in extremis, if there is only one provider of an essential good, the public authorities that need it still have access to it, even if there are concerns about other activities performed by a certain company. Although I completely understand the hon. Lady’s desire to prevent companies whose practices we disagree with from unduly benefiting from the public purse, we have to retain a degree of flexibility so that, in extremis, public authorities can get what they need.
Question put, That the amendment be made.
Alex Burghart
Schedule 6 sets out the mandatory grounds for exclusion. They consist of criminal offences and other misconduct serious enough to merit exclusion if the circumstances in question are likely to reoccur.
Florence Eshalomi
As the Minister highlighted, the schedule covers the grounds on which a supplier can be excluded, with some general provisions on how the suppliers are treated. I have touched on our concerns about excluded suppliers and excludable systems, and we will say more about that when we come to schedule 7. However, we believe that the scope of schedule 6 could be widened to cover issues of national security, to ensure that suppliers who are a risk to national security are not included in our supply chain, even when contracting authorities want paperclips. We support the increase in the scope of the schedule, so that it excludes suppliers who have committed serious offences, and who represent a concern to the authorities in the delivery of services. We are pleased to support the schedule.
Question put and agreed to.
Schedule 6 accordingly agreed to.
Schedule 7
Discretionary exclusion grounds
Alex Burghart
I beg to move amendment 87, in page 110, line 33, schedule 7, leave out paragraph 15.
This amendment would leave out the discretionary exclusion ground relating to forced organ harvesting.
Amendment 87 removes an amendment made to schedule 7 in the other place. It created a discretionary exclusion ground for suppliers with connections to forced organ harvesting, which is, of course, an utterly abhorrent practice. However, serious unethical behaviour particular to a certain industry is already covered by the ground of professional misconduct. The Bill is not the appropriate place to address the issue.
Every exclusion ground, whether mandatory or discretionary, must be considered for each and every supplier for each procurement. I am sure the Committee can appreciate how burdensome that would be when there are thousands of contracts every year. We want to make public procurement simpler and less burdensome for suppliers, particularly those that are small and medium-sized enterprises, and to drive value for money for the public. Adding additional exclusion grounds costs contracting authorities time and money. It is therefore crucial that we limit exclusion grounds to those that pose a major risk to public procurement. No supplier to the UK public sector has been involved in forced organ harvesting, as far as I am aware.
I am, however, pleased to say that the Government have already taken significant steps to make it explicit that the overseas organ trade, or complicity in it, will not be tolerated. Under the Health and Care Act 2022, it is already an offence to travel outside the UK to purchase an organ. That is why I believe that the amendment is necessary to overturn a well-meaning but, in practice, very challenging change to the Bill.
Florence Eshalomi
As the Minister highlighted, amendment 87 would sadly overturn Lords amendment 91, made on Report, in relation to forced organ harvesting. I agree with the Minister that there can be no doubt that organ harvesting is an abhorrent practice, but we should be careful when saying that this measure would just result in additional bureaucracy and time in contracts and procurement.
The practice of forced organ harvesting involves the removal of organs from a living prisoner, which results in their death or near death. It is something that none of us should stand by and watch. Linking this back to taxpayers’ money, no taxpayer would expect a single penny of their public money to go to a company explicitly linked to this practice. Tragically, there is evidence that forced organ harvesting may not be a particularly niche issue.
The Minister highlighted that the measure, although well intended, would add more time and another layer of bureaucracy. I want to go back to the debates in the other place, and some of the powerful words from Lord Alton of Liverpool and Lord Hunt of Kings Heath, who moved the amendment that led to our discussion today. Both made moving and compelling arguments for the inclusion of the measure against forced organ harvesting, providing examples of evidence that the practice is taking place on an extremely depressing scale in China.
The excellent speeches made by Lord Alton and Lord Hunt have been backed up by the Office of the UN High Commissioner for Human Rights, which stated that serious human rights violations have been committed in the Xinjiang Uyghur Autonomous Region,
“in the context of the Government’s application of counter-terrorism and counter-‘extremism’ strategies. The implementation of these strategies, and associated policies in XUAR has led to interlocking patterns of severe and undue restrictions on a wide range of human rights. These patterns of restrictions are characterized by a discriminatory component, as the underlying acts often directly or indirectly affect Uyghur and other predominantly Muslim communities.”
The OHCHR also stated that the treatment of persons held in the system of so-called vocational education and training centres—VETC facilities—is,
“of equal concern. Allegations of patterns of torture or ill-treatment, including forced medical treatment and adverse conditions of detention, are credible, as are allegations of individual incidents of sexual and gender-based violence. While the available information at this stage does not allow OHCHR to draw firm conclusions regarding the exact extent of such abuses, it is clear that the highly securitised and discriminatory nature of the VETC facilities, coupled with limited access to effective remedies or oversight by the authorities, provide fertile ground for such violations to take place on a broad scale.”
That is damning. It shows there is evidence of this already happening. In an April 2022 paper published in the American Journal of Transplantation, Matthew P. Robertson and Jacob Lavee stated:
“We find evidence in 71 of these reports, spread nationwide, that brain death could not have properly been declared. In these cases, the removal of the heart during organ procurement must have been the proximate cause of the donor’s death. Because these organ donors could only have been prisoners, our findings strongly suggest that physicians in the People’s Republic of China have participated in executions by organ removal.”
As a country, we must stand steadfast against these practices and ensure that any supplier with ties to forced organ harvesting is not allowed anywhere near our procurement system. I do not think taxpayers would expect anything less. No one wants to be linked to these horrific practices.
I fully understand and appreciate that the Minister may have covered these and other concerns in his remarks, but we may want to consider that there is no doubt this practice is an exclusion ground. In Committee in the Lords, the Minister, Baroness Neville-Rolfe, said it was almost certain that it would be covered by paragraph 12, but I think we have to ask ourselves, how many times have we heard that something is almost certain, only for it not to be covered when the Bill passes? We cannot and should not take chances on this issue. It is a fundamental and critical issue of human rights. If the Committee is to do its job, we cannot support the attempts to remove forced organ harvesting as a discretionary exclusion ground. For those powerful and valid reasons, I will not be supporting the amendment.
Kirsty Blackman (Aberdeen North) (SNP)
It is tempting to think that forced organ harvesting is so far removed from anything that we consider human, or a normal occurrence, that it does not happen—but it does. As the shadow Minister laid out, the issue was discussed in significant detail in the other place. We know it occurs.
The Minister has given some level of assurance that other parts of the Bill cover this practice. Could he be explicit that he does not believe that any supplier involved in forced organ harvesting would be eligible to receive a public contract through the procurement framework set out in the Bill? If he can give that explicit assurance that he believes the practice is covered elsewhere in the Bill, and that provisions elsewhere in the Bill adequately do the job of this provision, I would be happy not to oppose the amendment. That assurance from the Minister would give us a measure of reassurance and comfort that the Bill covers everything that he intends and expects.
Alex Burghart
We are assured that the absolutely abhorrent practice of forced organ harvesting would qualify as serious unethical behaviour. Consequently, that would mean that, in the Bill, it would be covered by the grounds of professional misconduct. Within the Bill, we have that provision; outwith the Bill, we have the Health and Social Care Act, to which I referred in my remarks. I hope that no one will take away anything other than the fact that the Government are strongly opposed to this practice and to the people who conduct this practice and that we wish public procurement to have no part in it.
Question put, That the amendment be made.
Florence Eshalomi
I beg to move amendment 106, in schedule 7, page 111, line 4, at end insert—
“Failure to consider sanctions regime
16 A discretionary exclusion ground applies to a supplier if a decision-maker determines that the supplier or a connected person has failed to adhere to sanctions imposed by the United Kingdom.”
This amendment would add a discretionary exclusion ground based on the failure to adhere to UK sanctions regimes.
Amendment 106 would add a discretionary ground to give contracting authorities the power to disregard tenders from suppliers who do not comply with the UK sanctions scheme. The amendment takes inspiration from the international reaction to Putin’s illegal and barbaric invasion of Ukraine. We know that many companies did the right thing in response to that invasion and swiftly pulled out from Russia. They withdrew funding, marketing and development, and they all took a stand not to finance Putin’s actions against the people of Ukraine. Sadly, however, some did not.
For example, research from Yale has identified the status of more than 1,000 companies in Russia, rating them from A to F on what presence they still have in the country. I will not go into specific cases, but it noticeable that companies rated D—defined as “continuing substantive business”—have been awarded lucrative public contracts since the invasion of Ukraine.
Alex Burghart
The amendment would introduce a new discretionary exclusion ground in relation to sanctions violations. The Government of course expect all businesses to comply with their obligations under the UK sanctions regime.
In 2016, the Office of Financial Sanctions Implementation was established to ensure that sanctions are properly understood, implemented and enforced. A range of tools are available to encourage compliance, including monetary penalties. However, we do not consider that sanctions violations pose a sufficient risk to public procurement to justify a ground for exclusion.
I am not aware of any evidence that public contracts have been awarded to suppliers that have violated sanctions. It is important that the exclusions regime focuses on the most pertinent risks, because each additional exclusion ground will increase burdens on contracting authorities and suppliers. That is why we have taken a targeted, risk-based approach, informed by extensive consultation across the public sector and with those who are most impacted by the exclusions regime, such as small and medium-sized enterprises. I respectfully request that the amendment be withdrawn.
Question put, That the amendment be made.
Florence Eshalomi
I beg to move amendment 112, in schedule 7, page 111, line 4, at end insert—
“Labour law infringements
15A (1) Subject to paragraph (2), a discretionary exclusion ground applies to a supplier if a contracting authority determines that a supplier, within the three years leading to the date of tender—
(a) has been found by an employment tribunal or court to have significantly breached the rights of an employee or worker engaged or formerly engaged by it,
(b) has admitted that it significantly breached the rights of an employee or worker engaged or formerly engaged by it, or
(c) has made a payment to an employee or worker engaged or formerly engaged by it in respect of a significant breach by it of the employee or worker’s rights,
and the contracting authority may treat the supplier as an excluded supplier in relation to the award of the public contract.
(2) Where a contracting authority determines that a supplier fulfils one or more of sub-paragraphs (1)(a), (b) or (c), the contracting authority must determine that the supplier is not an excluded supplier in relation to the award of the public contract if the contracting authority is satisfied that the supplier has provided convincing evidence to the effect that measures taken by the supplier are sufficient to demonstrate that it is in the public interest and in the interest of the contracting authority that the supplier should not be excluded from the procurement procedure.
(3) The evidence referred to in sub-paragraph (2) must include proof that the supplier has—
(a) paid or undertaken to pay without delay compensation in respect of any damage caused by the breach of rights,
(b) clarified the facts and circumstances in a comprehensive manner by actively and without delay collaborating with any relevant employment tribunal or court process and the parties thereto, and
(c) taken concrete technical, organisational and personnel measures appropriate to prevent further breaches of rights of a similar kind.
(4) Any such measures taken by the supplier must be evaluated taking into account the gravity and particular circumstances of the breach or breaches of rights.
(5) Where the contracting authority considers such measures to be insufficient, the contracting authority must give the supplier a statement of the reasons for that decision.
(6) ‘Rights’ in paragraphs (1) to (4) means any entitlement or benefit of an employee or worker engaged or formerly engaged by the supplier or of a trade union of which he or she is a member deriving from common law (including contract and tort) or statute, or protected by the international obligations of the United Kingdom referred to in Article 399 of the Trade and Cooperation Agreement (within the meaning of section 37 of the European Union (Future Relationship) Act 2020).”
This amendment is intended to give contracting authorities the discretion to exclude suppliers who have significantly breached the rights of staff in the last three years unless they have “self-cleansed”.
We hope that amendment 112 will be a step toward recognising that being granted public money via a public contract is a privilege, and that in return for this privilege suppliers should be upholding high standards in the workplace. The Bill provides us with an opportunity to drive up standards and ensure public procurement is used as a means to promote decent work throughout the supply chain and to reward businesses that treat their workers right, so we can raise standards right across the economy. We must all back the workers and employers who are creating Britain’s wealth. We must use procurement as an opportunity to raise the bar for all on working conditions. We believe this is a strong amendment. It seeks to include good work and the promotion of quality employment as a strategic priority.
Alex Burghart
Amendment 112 would introduce a new discretionary ground for exclusion in relation to labour law infringements. There are already robust grounds for exclusion for the most egregious violations of the rights of workers. These are based on the serious labour offences within the purview of the director of labour market enforcement. Compared with the mandatory grounds in existing legislation—the Public Contracts Regulations 2015—they represent an expansion in the scope of the grounds on which suppliers can be excluded from procurements for labour violations, with new grounds including failure to pay the national minimum wage and offences relating to employment agencies.
It is right that exclusion is reserved for the most serious circumstances or behaviour that could, if not addressed, raise a sufficient risk to contracting authorities or the public as to make the supplier unfit to bid for public contracts. Nevertheless, where the treatment of workers and the protection of their rights is relevant to the contract being procured, contracting authorities are entitled to set conditions of participation in these areas and to evaluate treatment of workers as part of the award criteria in assessing tenders. This may be the case, for example, for the procurement of contracts for labour-intensive services. I respectfully urge the hon. Member to withdraw the amendment.
Question put, That the amendment be made.
Alex Burghart
I beg to move amendment 88, in schedule 7, page 111, line 44, at end insert—
“‘event’ means a conviction, decision, ruling, failure or other event by virtue of which a discretionary exclusion ground would apply to a supplier;”
This amendment would insert a definition of “event” for the purposes of paragraph 16 of Schedule 7.
The Chair
With this it will be convenient to discuss that schedule 7 be the Seventh schedule to the Bill.
Alex Burghart
Amendment 88 is a technical amendment that inserts a definition of “event” for the purpose of the five-year look-back period in schedule 7. It mirrors the same definition already included in schedule 6, but refers to an event by virtue of which a discretionary exclusion ground applies to a supplier.
Schedule 7 sets out the discretionary grounds for exclusion. Discretionary grounds involve a range of circumstances, some of which are potentially less serious and might not merit exclusion. It might depend on the circumstances relating to the exclusion ground, the type of contract being procured such as its urgency or criticality, or facts specific to the procurement—the number of bidders, for example.
Similar to the mandatory exclusion grounds, the discretionary grounds are subject to a five-year, look-back period, as set out in paragraph 16, whereby only convictions or other events that the decision maker was aware of within the past five years count when assessing whether grounds apply. Again, that is subject to a transitional regime to avoid the unfair retrospective effect of new exclusion grounds for events that would not have given rise to exclusion prior to the coming into force of the Bill.
The discretionary grounds generally apply to misconduct or circumstances involving either the supplier or a connected person of the supplier. Connected persons are defined in paragraph 44 of schedule 6, as I explained earlier. As with schedule 6, I hope that we have achieved our objective of making the exclusion grounds both clearer and more consistent.
Florence Eshalomi
As the Minister outlined, the amendment seeks to define the events, with reference to the relevant paragraph of the schedule on determining temporal cut-off points for events that may make a supplier excludable. We believe that it is a tidying-up amendment to ensure that the event is defined in the schedule, so we do not wish to oppose it.
More widely, there are some faults with the schedule and its implementation, but the Opposition view it as a step forward in procurement versus the Public Contracts Regulations 2015. We recognise the importance of clauses on matters such as labour markets and environmental misconduct, but the appropriateness of the scope of schedule 7 will depend on how stringent the rules on excludable suppliers are applied by contracting authorities. We should consider that when assessing how well the terms of the schedule will work in a few years’ time.
I would be grateful if the Minister explained why different timescales have been used in different parts of the Bill, as set out in paragraph 16. How were the decisions made for different grounds? We do not seek further amendments to the schedule, which we are happy to support.
Alex Burghart
I thank the hon. Lady for her comments and support of the schedule. She asked about the look-back periods in paragraph 16 and why they differ—perhaps she could intervene to clarify her question.
Florence Eshalomi
I asked about the different timescales outlined in paragraph 16. I would like a better understanding of how those decisions were reached.
Alex Burghart
I am embarrassed to say that my memory is failing me, but I will let the hon. Lady know later in the afternoon.
Florence Eshalomi
Thank you.
Amendment 88 agreed to.
Schedule 7, as amended, agreed to.
Clause 58 ordered to stand part of the Bill.
Clause 59
Notification of exclusion of supplier
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Clauses 60 and 61 stand part.
Government amendments 42 to 44.
Clause 62 stand part.
Government amendments 45 to 47.
Clauses 63 and 64 stand part.
Government amendment 76.
Government new clause 9—Debarment decisions: interim relief.
Government new clause 10—Debarment proceedings and closed material procedure.
Government new clause 15—Debarment decisions: appeals (No. 2).
Alex Burghart
We move on to a monster grouping. The clauses, which concern the debarment list, are important, ground-breaking provisions that will support contracting authorities to reject bids from suppliers that pose the most serious risk.
Clause 59 requires contracting authorities to notify either a UK, Welsh or Northern Irish Minister—depending on the status of the contracting authority—whenever action is taken under the exclusions regime against a supplier or subcontractor. Subsection (1) sets out the relevant actions, which include exclusion from a procurement, rejection of a tender, rejection of an application to join a dynamic market or removal from a dynamic market, or the replacement of an associated person or intended subcontractor.
The obligation to notify a relevant appropriate authority is in subsection (2), and must be made within 30 days of the relevant action. Subsection (3) sets out the information that must be in the notification. There is also an obligation in subsections (4) and (5) to notify within 30 days where a challenge is brought under part 9 of the Bill against a contracting authority with regard to any exclusion, and also on conclusion of any such proceedings.
Florence Eshalomi
This group of amendments and new clauses pertains to the debarment regime and a new interim relief scheme that suppliers can use when they wish a decision to be put on the debarment list. We support the addition of a debarment list to the Bill. It is right that suppliers that represent a significant risk to contracting authorities and the public are identified. Clearly, this is a strong step and represents a higher bar than simply excluding a supplier from a procurement tender process.
That high-bar intention for the list has been made clear by the Government and in the Minister’s remarks. I refer back to the letter of the then Minister Lord True to Minister Baroness Neville-Rolfe:
“I should start by explaining 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.”
Ministers must also consider whether the circumstances that led to the application of the exclusion ground are likely to occur again. However, the Government might have changed their mind since then. Will the Minister confirm whether that is still the intention in that case?
Clarity is needed. The need for clarity highlights a potential flaw in the existing clauses: there is still some ambiguity about what the bar actually is to be placed on the debarment list. As drafted, any supplier deemed to be an excluded or excludable supplier can, in theory, be added to the list. It is also possible that no suppliers, even those with egregious cases, are added to the list.
The only other issue that I will raise is that of the threshold. Will there be additional guidance for suppliers and contracting authorities? The list can involve severe reputational and financial damage, so it is right to have safeguards. We will support the measure if the Minister can outline the additional safeguards.
Alex Burghart
The hon. Lady is right that Lord True wrote to a Member of the House of Lords about this, and we do not believe that the Government’s position has changed since then. I am afraid I cannot remember her second point—if she is happy to intervene on me, that will refresh my memory.
Alex Burghart
I look forward to receiving the hon. Lady’s letter.
Question put and agreed to.
Clause 59 accordingly ordered to stand part of the Bill.
Clauses 60 and 61 ordered to stand part of the Bill.
Clause 62
Debarment list
Amendments made: 42, in clause 62, page 43, line 30, leave out from “section” to end of line 39 and insert
“and, as part of that entry, must—
(a) state the exclusion ground to which the entry relates, and whether it is a mandatory exclusion ground or a discretionary exclusion ground, and
(b) indicate the date on which the Minister expects the supplier to cease to be an excluded or excludable supplier by virtue of the stated exclusion ground (and, accordingly, expects the entry to be removed from the list).
(4) A list kept for the purposes of this section is the ‘debarment list’.”
This amendment would make it clearer that each entry will relate to one exclusion ground and, as such, could be challenged individually.
Amendment 43, in clause 62, page 43, line 44, at end insert—
“(5A) The Minister may not enter a supplier’s name on the debarment list before the end of the period of eight working days beginning with the day on which the Minister gives notice to the supplier in accordance with subsection (5) (the ‘debarment standstill period’).
(5B) The Minister may not enter a supplier’s name on the debarment list if—
(a) during the debarment standstill period—
(i) proceedings under section (Debarment decisions: interim relief)(1) (interim relief) are commenced, and
(ii) the Minister is notified of that fact, and
(b) the proceedings have not been determined, discontinued or otherwise disposed of.”
This amendment would ensure that an application for interim relief under the new clause inserted by NC9 would suspend the Minister’s decision to add a supplier’s name to the debarment list.
Amendment 44, in clause 62, page 44, line 1, leave out from “review” to end of line 5 and insert—
“(b) may remove an entry from the debarment list at any time, and
(c) may revise a date indicated under subsection (3)(b).
(7) If a Minister of the Crown voluntarily removes an entry from the debarment list in connection with proceedings under section 64 (debarment decisions: appeals), a Minister of the Crown may reinstate the entry only after the proceedings have been determined, discontinued or otherwise disposed of.
(7A) A Minister of the Crown must remove an entry from the debarment list if the Minister is satisfied that the supplier is not an excluded or excludable supplier by virtue of the ground stated in the entry.”—(Alex Burghart.)
This amendment would restrict modifications that could be made to the debarment list, provide for the Minister to voluntarily suspend a decision to add an entry to the debarment list in connection with proceedings, and clarify that the Minister must remove an entry where a particular ground no longer applies.
Clause 62, as amended, ordered to stand part of the Bill.
Clause 63
Debarment list: application for removal
Amendments made: 45, in clause 63, page 44, line 16, leave out from “for” to end of line 17 and insert—
“(a) the removal of an entry in respect of the supplier from the debarment list, or
(b) the revision of the date indicated as part of such an entry under section 62(3)(b).”
This amendment would ensure that a supplier can apply to change the date indicating when it will cease to be an excluded or excludable supplier.
Amendment 46, in clause 63, page 44, line 21, leave out from “since” to “, or” and insert
“the entry was made or, where relevant, revised”.
This amendment would allow for the fact that a supplier may make different applications in respect of the same or different entries.
Amendment 47, in clause 63, page 44, line 23, after “subsection (1)” insert
“in relation to the entry or, where relevant, revision”.—(Alex Burghart.)
This amendment is consequential on Amendment 45.
Clause 63, as amended, ordered to stand part of the Bill.
Clause 64 disagreed to.
Clause 65
Timeline for removal of suppliers
Question proposed, That the clause stand part of the Bill.
Alex Burghart
Clause 65, which was added to the Bill in the other place, requires the Government to publish a timetable for the removal of Government surveillance equipment where there is evidence that a provider has been involved in modern slavery, genocide or crimes against humanity. That would require the Government to undertake a review of evidence that existing surveillance suppliers or subcontractors have been involved in those matters. Given the size and complexity of technology supply chains, any review of that nature would be costly and resource-intensive; it would need to cover hundreds, if not thousands, of companies.
The measure is intended to target Chinese suppliers, but it is not guaranteed to lead to action against them. The evidence surrounding the complicity of surveillance suppliers in the oppression of Uyghurs in Xinjiang is highly contested, and it would likely be difficult to show that any supplier had been involved in the matters set out in the clause. Although it is unclear what precisely is meant by “established evidence” that a provider has been “involved” in the specified abuses, proving that those suppliers knowingly provided technology for use in human rights abuses would be especially difficult. Even if there were sufficient evidence to do so, the cost and disruption of removing such surveillance equipment from across the entire Government estate would be significant. For that reason, public procurement policy has tended to focus on preventing unfit suppliers from participating in future procurements, rather than requiring the termination of existing contracts.
However, the Government are deeply concerned by both the accusations of modern slavery and the national security implications posed by such equipment, and they are taking action. In November, they announced that all Government Departments will be expected to remove such equipment from sensitive sites and to avoid procuring it in the future. We are also strengthening our powers in the Bill by introducing an exclusion ground for suppliers considered to pose a threat to the national security of the United Kingdom. Combined with the new powers for a centralised debarment list, that will mean that where the risk is sufficiently serious, Ministers can act quickly to ensure suppliers that threaten national security face exclusion from all contracts across the public sector.
I believe that we have taken decisive action in this area, both in the written ministerial statement and in the Bill. However, we are mindful of the concerns raised in both Houses, and we will continue to reflect carefully on those views as we move forward with the legislation and its implementation.
Florence Eshalomi
I thank the Minister for his closing remarks on that and the need to address some of the concerns. The clauses mandate the eventual removal of physical technology or surveillance equipment from the Government’s procurement system supply chain, where there is substantiated evidence of modern slavery, genocide or crimes against humanity.
Kirsty Blackman
Throughout the discussion of Hikvision and other companies in relation to human rights abuses, genocide and crimes against humanity, the Minister has missed the point. The shadow Minister has absolutely got the point.
For a start, the US has already blacklisted Hikvision. If the US believes that there is enough evidence to do that, and the Scottish Government are getting rid of the Hikvision cameras we have in Scotland, I do not see why the UK Government are unable to act in that regard. Two other jurisdictions have found enough evidence to debar Hikvision from providing cameras involved in our public life, yet the UK Government feel that there is still not enough evidence. They are somehow suggesting that perhaps the situation is over-egged, but it appears that the Foreign Affairs Committee does not think the situation is an over-exaggeration, and that it thinks that there is actually a risk and danger.
This is not just about the threat to our national security, although that is obviously incredibly important, and the Labour Front Benchers have been clear about national security throughout our discussion of the Bill. This is also about supporting a company that is committing human rights abuses. It does not matter whether a company is committing them here or elsewhere; the reality is that through public procurement, we are funding a company using facial recognition in mosques and committing atrocities against Uyghur Muslims in the Xinjiang region. How is that okay just because it is not causing any problems here?
Even if the company were not causing any threat to national security, this is about the direction of travel. On modern slavery, for example, the Government are pretty clear that no matter where that is happening, we do not want to be entangled with suppliers involved in modern slavery and enslaving people. We should not want to be involved with, and companies and suppliers should not be giving public money to, the people committing these crimes. Just because this is not modern slavery, it does not mean that they are not creating significant problems and putting people in severe danger as part of the extreme regimes that they are working for.
I do not see the justification in allowing public money to be given to any of these organisations. As I said last week, it is not as though this is a high bar; it is a low bar. We are saying that modern slavery and genocide are crimes against humanity. Those are pretty much the most serious things we can think of. Any organisation involved in those should not get public money, whether or not it is a threat to national security.
I am slightly pleased that the Government and the Minister seem a bit more willing to look at the possibilities regarding Hikvision. I appreciate that removing it from secure and sensitive sites, particularly, is a priority for the Government—they have agreed that they will do that—but that is not enough; we should not fund these organisations at all. Asking the UK Government to make a move in that regard in order to remove this technology and ensure that Hikvision does not get any more of our money is incredibly important, and not too much to ask.
I stress again the point made by the hon. Member for Vauxhall: the clause does not ask for immediate removal. It gives the Government six months to publish a timeline for removal—it is not giving them six months to remove the stuff, but to produce a timeline. They are not being asked for something entirely unreasonable. There are other camera providers and technologies out there that could be used instead to provide safety and security for places that we want to be safe and secure, without our supporting a company propping up a regime that is profiling and committing crimes against humans just because they happen to be Muslim. That is completely unacceptable, no matter where in the world it is doing that. Whether or not this is being done in the UK, the Government should take action on that.
I will therefore strenuously resist any attempt to remove clause 65 from the Bill. I used this phrase earlier, but it should not be too much to ask for the Government to take action on this issue. I am pleased that the Minister seems to have moved his language slightly since our previous debate, but it is not good enough and we are not there yet. We need a firm commitment from the Government to remove this technology that is causing so much harm to the lives of so many and to remove the support for the people causing such harm.
Alex Burghart
I thank hon. Members for their remarks. As I said, we think that the clause as drafted would be unworkable. On what the hon. Members for Vauxhall and for Aberdeen North said, we are moving to a new debarment regime, and I am not able to prejudge who will be covered by that regime. Suppliers will be considered for addition to the debarment list based on a rigorous and fair prioritisation policy. That policy is under development, and it is too early to say which suppliers will or will not be added to the debarment list.
We should remember that the new regime will give broader exclusion powers to authorities that have primary responsibility for applying the exclusions regime. The sorts of crimes we have touched on this afternoon, such as organ harvesting, modern slavery and the like, are very serious crimes against people and humanity, and no doubt that will have a bearing on future judgments. I appreciate where the amendment in the Lords came from, but we do not think the clause is workable. As a Government, however, we continue to consider the issue carefully.
Question put, That the clause stand part of the Bill.
Alex Burghart
I beg to move amendment 50, in clause 66, page 45, line 30, at end insert—
“(5A) The implied term does not prevent a contracting authority—
(a) requiring the use of a particular system in relation to electronic invoices;
(b) in the case of a defence authority (as defined in section 7(5)), requiring the use of a system that requires the payment of fees by the supplier.”
This amendment would ensure that a contracting authority can require the use of a particular system in relation to electronic invoices, and that a contracting authority that is a defence authority can require that the system is one that requires the payment of fees by the supplier.
Alex Burghart
Before I discuss Government amendment 50, I will take this opportunity to go back to the question that the hon. Member for Vauxhall asked me about timescales for exclusion. Generally, the look-back is five years, but for some offences, we have transitional provisions to avoid creating retrospective offences in the early years of implementation. I am happy to write to her with a more detailed explanation if that will be useful.
Amendment 50 will ensure that the clause, which governs electronic invoicing, does not inadvertently prevent contracting authorities from requiring suppliers to submit electronic invoices via invoice processing systems. Invoice processing systems are used by many contracting authorities and we want to make it clear that their use is permitted under the clause.
The amendment will also ensure that defence authorities are allowed to charge suppliers for using such systems. For security reasons, the Ministry of Defence does not permit suppliers to have direct access to their internal system to submit invoices and track payments in relation to its contracts. Suppliers are thus required to use and register with a third-party system in order to carry out invoicing and payments with the MOD. They are charged a fee for use of that system. Amendments 51 and 52, and 61 to 64 are all related to that, and we will return to them later in Committee.
More broadly, the clause applies a term to every public contract to ensure that invoice processing is done electronically. That is essential for swifter payments to suppliers, proper audit trails and increased visibility on public contract spend. It retains the principles of the existing regime with regard to e-invoicing. Nothing in a contract may restrict or override the implied term.
Florence Eshalomi
I thank the Minister for introducing the amendment. As he highlighted, the clause mandates contracting authorities to accept non-disputed electronic invoices as an implied term in every contract. The amendment provides clarity that contracting authorities can require the use of a particular system for electronic invoicing, with extra provisions relating to defence contracts. We think that neither the original clause nor the amendment are disagreeable, and they are not controversial. We support their addition to the Bill.
Amendment 50 agreed to.
Clause 66, as amended, ordered to stand part of the Bill.
Clause 67
Implied payment terms in public contracts
Florence Eshalomi
I beg to move amendment 110, in clause 67, page 46, line 32, at end insert—
“(10A) Within six months of the passage of this Act, the Secretary of State must prepare, publish and lay before Parliament a report on the effectiveness of this section in ensuring prompt payment of small and medium-sized enterprises.
(10B) Not later than 6 months after the report has been laid before Parliament, a Minister of the Crown must make a motion in the House of Commons in relation to the report.”
This amendment would require the Government to report to Parliament on the effectiveness of this section in ensuring prompt payment of SMEs.
The amendment would add provisions to mandate that, within six months of passing this Act, the Government produce and publish a report on the effectiveness of implied payment terms in public contracts in ensuring the prompt payment of small and medium-sized enterprises.
One of the problems we see in procurement is the failure to promptly pay suppliers down the supply chain. Many of those suppliers are small and medium-sized enterprises, which require prompt payments to pay wages and bills, and, in some cases, to keep their company going. Failure to pay SMEs the money that they are owed can lead to serious repercussions.
The Government talk about improving the chances of SMEs when it comes to procurement, but for far too long, this has just been a lot of talk and no action. The statistics for SMEs and procurement are truly shocking. Analysis by the Spend Network found that big corporations still win the lion’s share—more than 90%—of contracts worth £30 billion a year that are deemed to be suitable for bids from smaller businesses.
Research from the British Chambers of Commerce and Tussell found that just over one in every five pounds, or 21%, spent by the Government on public sector procurement in 2021 was awarded to SMEs. They also found that SMEs now receive a relatively smaller amount of reported direct Government procurement spending than they did five years ago.
As a proportion of the overall procurement budget, direct spend with SMEs by local government bodies was the highest at 38%. NHS bodies across England spent 22% of their procurement budget with SMEs, while central Government was significantly lower than the average, awarding only 11% of contracts to SMEs.
We have touched on the issue of subcontractors and why they should be paid on time by those contracting out their services, whether that is a contracting authority, a prime supplier or a supplier three or four rungs down the supply chain. We are pleased to see terms to protect the 30-day payment standard between contracting authorities and prime suppliers, but, as the Bill stands, we have concerns about its ability to properly protect subcontractors down the supply chain.
On Second Reading, the Paymaster General said:
“On the prime, that is easy: 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 the chain. It is the first time that such a measure has been incorporated. It really will be for primes to be held to account. I say to hon. Members of this House that if partners to a contract are not being paid without good cause, it will call into doubt the contract with the prime supplier, so it will be very much in the interest of the prime supplier to deliver. Every effort the Government have made to improve the payment terms through the supply chains has so far been adhered to pretty well by industry. Across Government, we have seen a significant improvement in payments out to industry, and we are expecting a ripple-down effect as a result of the Bill.”—[Official Report, 9 January 2023; Vol. 725, c. 347.]
Although we recognise what the Paymaster General was saying, we are left with some concerns, especially for the SMEs that are waiting for that vital payment. I do not think we can expect these terms to ripple down the supply chain, and it may take a while for a ripple-up effect to take place if a subcontractor down the line misses payments to another subcontractor in the supply chain, which could be serious. The Government say that that would reflect badly on the prime contractor, but what methods will the Minister use to track this? How will he be able to tell whether it is effective?
Our amendment would add a requirement to assess the effectiveness of the Government’s claims about the ripple-down effect within six months of the Bill passing. As the Paymaster General highlighted on Second Reading,
“This is the first time that such a measure has been incorporated.”—[Official Report, 9 January 2023; Vol. 725, c. 347.]
Surely the Minister owes it to suppliers across the supply chain to check whether this method is effective. This should not be an arduous report to comply with, but it could provide a crucial stress test for the new system and feed into tweaks that go even further to ensure that all suppliers are paid on time. I hope that the Minister will agree with us about bringing SMEs into the procurement system and that those SMEs need to be paid in a timely manner. I urge him to support our amendment.
Alex Burghart
Amendment 110 would require Ministers to report to Parliament within six months of the Bill’s passage, detailing how effective the implied payment terms in clause 67 have been in ensuring prompt payment of small and medium-sized enterprises. The new regime will not come into force immediately on passage of the Bill; secondary legislation will be needed prior to the go-live, as will the comprehensive programme of learning and development and the digital platform to support the increased transparency obligations. I am afraid, therefore, that the time period in the amendment is impractical.
In addition, there is already a requirement for contracting authorities to publish payment information, set out in clause 68 on payments compliance notices, which requires reports to be published on the speed of invoice payments one month after the end of each successive six-month period. Those reports will enable interested parties, including taxpayers and suppliers, to see for themselves how prompt payment performance has changed as a result of the new regime without the need for additional reporting. The reports will address payments to all suppliers of a contracting authority, rather than just SMEs, and will be publicly available for all to inspect. I therefore respectfully request that the amendment be withdrawn.
Question put, That the amendment be made.
Alex Burghart
I beg to move amendment 51, in clause 67, page 46, line 33, at end insert—
“(za) ‘electronic invoice’ and ‘required electronic form’ have the meanings given in section 66(3);”
This amendment would clarify that “electronic invoice” and “required electronic form” in clause 67(8) have the same meanings as in clause 66(3).
Alex Burghart
Amendments 51 and 52 are technical amendments. Amendment 51 clarifies that clauses 67 and 66 mean the same thing when they refer to “electronic invoice” and “required electronic form”. Amendment 52, similar to amendment 50, ensures that contracting authorities can require the use of a particular system in relation to the processing of electronic invoices.
Florence Eshalomi
The two amendments are uncontroversial and clarify points covering the terms of use. We will not oppose them.
Amendment 51 agreed to.
Amendment made: 52, in clause 67, page 46, line 36, after “address” insert
“, or through an electronic invoicing system,”.—(Alex Burghart.)
This amendment would clarify that a reference to a contracting authority receiving an invoice for the purposes of clause 67 includes receiving an electronic invoice through a system specified in the contract.
Question proposed, That the clause, as amended, stand part of the Bill.
Alex Burghart
Briefly, clause 67 will set the standard by which all contracting authorities will be expected to pay their suppliers. The clause will imply 30-day terms into public contracts. Any attempts to override those payment terms will be without effect, unless the arrangements are to pay quicker than 30 days. Ministers may, by regulations, vary the number of days, provided that the number of days to pay suppliers does not exceed 30 days. SMEs will benefit from 30-day payment terms on a much broader range of public sector contracts, including those previously covered by public utilities and defence. The clause does not apply to concession contracts, utilities contracts awarded by a private utility or contracts awarded by a school.
Question put and agreed to.
Clause 67, as amended, accordingly ordered to stand part of the Bill.
Clause 68
Payments compliance notices
Alex Burghart
I beg to move amendment 53, in clause 68, page 47, line 18, at end insert “, or
(d) in relation to a concession contract.”
This amendment would exempt contracting authorities from the requirement to publish a payments compliance notice in relation to a concession contract.
Alex Burghart
Amendment 53 will exempt concession contracts, and payments made under them, from the scope of payments compliance notices. This minor technical amendment aligns with the scope of clause 67 on implied payment terms in public contracts, from which concession contracts are excluded, and brings consistency across the payment clauses. It will also save contracting authorities from additional bureaucracy, as they will no longer have to produce a payments compliance notice where concessions are the only payments they are making.
Clause 68 will require contracting authorities to publish a payments compliance notice—specified information detailing how quickly they have paid suppliers—every six months. We are strengthening payment legislation to ensure that the public sector is held to account on its own performance. We are aligning how the public and private sectors report on their payment performance, and we will report against the same set of metrics. By creating a central repository of Government payment information, we will increase transparency of public sector payment performance and make external scrutiny of that performance easier. The clause does not apply to private utilities, contracts awarded by schools or Northern Ireland contracting authorities.
Florence Eshalomi
The amendment will exclude concession contracts from the provisions of the clause. Given that the nature of these contracts is to give the right to exploit a developed resource, it makes sense to exclude them from this part of the Bill. We will not be voting against the amendment and we welcome the provisions in clause 68. Contracting authorities should report on their compliance with the 30-day payment term. As we have touched on previously, sunlight is the best disinfectant, and the clause shines a light on whether contracting authorities are complying with payment terms.
As I highlighted in the debate on clause 67, however, I have concerns as to whether this will lead to a ripple-down effect, although benefits may arise from suppliers feeling some level of scrutiny when they are responsible for paying subcontractors, many of which, as I mentioned, will be SMEs—the same SMEs that are currently struggling in the procurement system. I have touched on the value of those contracts and the fact that the big corporations continue to win the lion’s share of them, as shown by research from the British Chambers of Commerce. That research also found that direct spend is still quite a small proportion of the overall procurement budget.
I am disappointed that the Government did not see the sense of our amendment 110. I hope that will take action to ensure that suppliers are acting in the spirit of the clause.
Alex Burghart
We intend to issue guidance separately to contracting authorities, setting out how to include spot checks on the payment performance of supply chain members through terms and conditions. We do not think that needs to be done in legislation; it can be addressed through guidance. Furthermore, contracting authorities are often better placed to use civil remedies and can have a significant influence over suppliers, so they should hold suppliers to account and ensure that payment terms are passed down the supply chain to subcontractors, enforcing such terms through contractual remedies if necessary.
Amendment 53 agreed to.
Clause 68, as amended, ordered to stand part of the Bill.
Clause 69
Information about payments under public contracts
Question proposed, That the clause stand part of the Bill.
Alex Burghart
Clause 69 requires contracting authorities to publish specified information about any payment of more than £30,000 made by the authority under a public contract. That information must be published before the end of the period of 30 days beginning with the last day of the quarter in which the payment was made. The financial threshold and time limit for publication may be amended by regulations.
The clause does not apply to public contracts awarded by private utilities or schools, or to concession contracts. Its purpose is to bring transparency to the expenditure of public money, and to allow interested parties to ascertain the value that was specified in the tender, the value of the contract at the point of award, and how the contract spend is progressing. The Northern Ireland Executive have decided to include a derogation from this publication obligation.
Florence Eshalomi
As the Minister outlined, the clause relates to the publication of information on payments of over £30,000 by contracting authorities. Its impact will be heavily affected by the ultimate state of the online system, as specified in clause 93. It is frustrating that many aspects of the Bill are to be set out in secondary legislation: we will not know whether this is a sensible and proportionate measure until we know how the online system promised by the Government will work. However, we believe that this is an important provision of the Bill, and as such we do not intend to oppose it.
Question put and agreed to.
Clause 69 accordingly ordered to stand part of the Bill.
Clause 70
Assessment of contract performance
Question proposed, That the clause stand part of the Bill.
Alex Burghart
Clause 70 has two main functions. First, it requires contracting authorities that have set key performance indicators in their public contracts under clause 52 to assess performance against each KPI, and to publish the results at least once every 12 months. The exact nature of the information required in each case will be set out in regulations made under clause 90. The purpose of this provision is to bring greater transparency to the performance and management of public contracts.
Secondly, the clause requires contracting authorities to publish a notification in certain circumstances relating to breach of contract or poor performance by a supplier. The circumstances are equivalent to those that constitute the discretionary exclusion ground for breach of contract and poor performance in paragraph 13 of schedule 7. The purpose of the provision is to provide verifiable information for contracting authorities on suppliers that meet the exclusion ground for breach of contract or poor performance. Clause 70 does not apply to private utilities, and the subsections relating to poor performance do not apply to light-touch contracts.
Florence Eshalomi
As the Minister outlined, the clause relates to key performance indicators and lays out how they will be assessed in the system. Subsection (2) mandates an annual assessment of the key performance indicators and the publication of information in this area. Again, this subsection makes reference to clause 93 in terms of how information relating to the key performance indicators is to be published. It might be useful to consider what information should be part of that system.
There could be merit in having an obligation to publish information on performance workflows and the relationships between contracting authorities and suppliers. The obligation could mean that contracting public bodies must publish the following on a six-monthly basis in respect of service contracts: operational performance against contracts; changes to staff terms and conditions; financial performance and payments made to contractors; costs of client contract management; any financial penalties or service credits; and details of meetings between decision makers. They could also publish the contracts within three months of them being let.
Subsection (5) relates to information that must be published within 30 days where a contracting authority believes a supplier has breached a contract to the point of termination or remedy. It also covers instances where suppliers provide an unsatisfactory service following a proper opportunity to improve performance. The powers are important to ensure that the process is properly followed when a supplier is not delivering for the public. It is right for the supplier involved and for the public that the information is published. We therefore support the inclusion of the clause in the Bill.
Question put and agreed to.
Clause 70 accordingly ordered to stand part of the Bill.
Clause 71
Sub-contracting: directions
Question proposed, That the clause stand part of the Bill.
Alex Burghart
Clause 71 covers subcontracting, which is an important part of the delivery of public contracts. It enables businesses to use specialist suppliers to increase their overall effectiveness and efficiency. It also encourages SMEs to participate in public sector procurement, which helps to encourage innovation and deliver value for money for the public. The clause applies when a contracting authority either requires or permits a supplier to subcontract, and also where that subcontractor has been relied on to pass conditions of participation. In such circumstances, a contracting authority may direct a supplier to enter into a legally binding agreement with the proposed subcontractor, failing which the contracting authority can refuse to enter into the public contract, require an alternative subcontractor, or terminate the contract if already commenced.
Clause 72 will ensure that the 30-day payment terms set out in clause 67 will apply throughout the public sector supply chain, regardless of whether they are written into the contract. That will ensure that businesses in the supply chain that substantially contribute to the performance of a public contract benefit from the prompt payment and the liquidity benefits it brings. Unlike the equivalent provisions in the Public Contracts Regulations 2015, clause 72 includes defence and public utility contracts, benefiting SMEs in the supply chain across a much broader range of public sector contracts. Those rules do not apply to utilities contracts awarded by a private utility, concession contracts and contracts awarded by a school.
Florence Eshalomi
Clauses 71 and 72 relate to the treatment of subcontractors in the system. We welcome the clauses as a step forward in the attempt to ensure the prompt payment of subcontractors. The Bill makes a slight alteration from the current system by making a 30-day payment an automatic term for subcontractors rather than requiring the contracting authority to include an obligation on its suppliers to flow down. We have spoken at great length about the issue of subcontractors being paid on time, and the fact that many smaller businesses rely on prompt payment. We do not see any issue with the clauses, which we are happy to support.
Question put and agreed to.
Clause 71 accordingly ordered to stand part of the Bill.
Clause 72 ordered to stand part of the Bill.
Clause 73
Modifying a public contract
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
That schedule 8 be the Eighth schedule to the Bill.
Government amendment 54.
Clauses 74 and 75 stand part.
Government amendments 55 to 58.
Clause 76 stand part.
Alex Burghart
I will take a deep breath. Clause 73 sets out when a contracting authority may modify a public contract or when a contract, as a result of a modification, will become a public contract—that is to say, a convertible contract. It provides that a contract may be modified in one of the following circumstances: where the modification falls within one of the grounds permitted under schedule 8; where the modification itself is not a “substantial modification”; or where the modification itself is below a threshold that makes it de minimis in effect. Certain contracts, such as below-threshold contracts and light-touch contracts, are exempt from the constraints on modifications.
A “substantial” modification in this context is one that increases or decreases the duration of the contract by more than 10%, or materially changes the supply of the deliverables under the contract, or makes the contract materially more economically beneficial to the supplier.
Clause 73(4) clearly defines what constitutes a “below-threshold modification”. Those low-value modifications, to be properly considered as such, must not materially change the contract in either value or scope. A cap is placed on successive modifications permitted under this ground, as the aggregated value of below-threshold modifications made during the lifetime of a contract should be less than the Government procurement agreement threshold amount for the type of contract. Overall, these provisions give contracting authorities more usable grounds to make modifications that are not sufficiently material to justify requiring contracting authorities to run a new competition.
Schedule 8 sets out seven grounds, in addition to the two provided in clause 73, on which contract modifications are permitted. Four of those grounds are based on policy retained from existing legislation, as consultation established that contracting authorities wished to retain those commonly relied on “safe harbours”. Those four grounds are where the modification is provided for in the contract; where the modification has arisen due to unforeseeable circumstances; where the modification is for additional goods, services or works in specific limited circumstances; and where the modification is to effect a transfer of the contract following a corporate restructuring. I would like to be clear that that concise ground on corporate restructuring is intended to cover all the circumstances, such as insolvency, detailed in the Public Contracts Regulations 2015.
We have also introduced three new grounds, to provide for greater flexibility that stakeholders have indicated is needed, and to give greater legal certainty to contracting authorities than the existing grounds currently afford. The new ground of
“Urgency and the protection of life, etc”
will enable contracting authorities to act swiftly and efficiently in extraordinary circumstances and modify existing contracts to adapt to those urgent requirements.
The new ground permitting modifications on materialisation of a known risk will give contracting authorities legal certainty that they can modify contracts to adapt to a risk that, although identified as such at the outset, could not be addressed in the initial contract document in clear and unequivocal terms. The risk must have materialised through no fault of the contracting authority or supplier and must have been identified in the tender or transparency notice.
For example, if, due to quickly emerging cyber-threats, a requirement for a new software system to hold personal information needs to be adapted in order for it to operate safely and adequately protect that information, the contracting authority can adjust the requirement accordingly, provided that the risk of the new cyber-threat was identified up front in the required notices.
Florence Eshalomi
I thank the Minister for the points he has outlined. Amendment 54 is largely uncontroversial, removing an unnecessary provision from clause 74.
Amendments 55 to 58, taken together, would reduce the burdens on contracting authorities to publish contract modifications, requiring them to do so only where they are required to under clause 74, which does not cover changes that only change the value or length of the contract to a relatively small degree. Without the amendments, even minuscule contract amendments would be required to be published. Although these measures cover the larger contracts affected by the Bill—in particular, those valued over £5 million—it would be a disproportionate burden on contracting authorities to be required to publish every change to a contract. We understand the rationale for the amendments and we do not intend to oppose them.
On clauses 73 to 76 more widely, we understand that it is necessary, on occasion, to alter public contracts. It is important that the circumstances are justified, and we are pleased to see schedule 8 set out proportionate reasons to modify contracts. However, it is important to ensure that contracts are drawn up in a way that does not open this part of the Bill up to abuse.
As noted in paragraph 1 of schedule 8, modifications can be made if they are agreed in the contract and do not
“change the overall nature of the contract.”
However, there must not be a free-for-all. Contracting authorities must draw up contracts that provide the right flexibility for change. We should not expect service levels to vary massively because contracts are written in a way that would allow modification under this part of the Bill. For example, our engagement with stakeholders has revealed concerns that modifications are seen as an alternative to remedy and clawback, and that expensive legal fees put authorities off using clawback clauses, with those authorities instead opting to renegotiate terms with suppliers. That should not be the case.
We do not believe the best way to tackle that is necessarily through the Bill, but it is an important point. In an answer to a parliamentary question dated 20 December 2022, the Government admitted that money was wasted and that only £18 million had been clawed back from PPE contracts. That was only highlighted after the National Audit Office revealed that the Government had effectively written off quite a lot of that money, and auditors had rebuked the Department of Health and Social Care for its management of taxpayers’ cash during the pandemic.
It is a shame that the Government are still locked in legal battles with companies that failed to deliver on their contractual obligations. The public expect their money to be clawed back when contracts are broken, but if even the Government find it difficult to claw back money from contracts, it is little wonder that smaller contracting authorities apparently rely on contract alterations to seek remedy. The result is that suppliers that have not delivered for the public keep winning contracts to deliver services.
I understand why people may look at a supplier and say, “This supplier has failed to deliver services to an acceptable standard. Why are they still delivering our services? Why has this supplier not had this contract taken off them? Why have we not got our money back?” They are all valid questions. I hope that the Minister will outline his understanding of the use of contract modification as a substitute for clawbacks, and what steps he is taking to ensure we get our money back from suppliers.
We feel it is right that contract changes are published. Clauses 74 and 76 allow for the publication of a notice of change and, for larger contracts, publication of the changes and the altered contract. Those measures are proportional to the provisions of clause 53, relating to publication when a contract starts.
Clause 74 refers to the terms of clause 93. We agree with the introduction of a new online programme, but it is disappointing that we do not have the detail of what will be expected as part of that system. We should not leave future Governments with their hands tied, unable to go beyond what we can achieve today, but we do think that the Government could show some base level of ambition and outline the basic level of transparency that we think the system should allow. I hope the Minister will touch, even just briefly, on how the system will work and what information will be expected under clause 74, via the provisions of clause 93.
Alex Burghart
To the hon. Lady’s first point, we all accept that, in exceptional circumstances, contracting authorities may have to move very quickly to procure essential goods, services and works with minimal delay. Launching a new procurement procedure can take time. When time is of the essence and when a supplier has proven in-contract its ability to deliver to time, cost and the expected standard, it makes sense to take the modification route. To be clear, these are areas where the urgency and protection-of-life grounds must exist in the first place.
With the new transparency rules in clauses 74 and 76, taxpayers will be able to see exactly where we propose to spend their money, including where there is additional expenditure through use of modification grounds. The transparency rules will require contract change notices to be published in circumstances where the urgency ground is used and, where such modifications are made to contracts over the £5 million threshold, the modifications themselves will need to be published.
On the hon. Member for Vauxhall’s general point about what happened during the pandemic, she will have heard me say on a number of occasions that the Department of Health and Social Care, despite the circumstances in which it was working, had robust contracts in place. That means it is capable now, where it was given defective goods, to enter mediation. If that proves insufficient, it will be able to enter into litigation. The whole purpose of the exercise in which we are currently engaged—at length—is to ensure that we have better procurement processes in this country. That is what the Bill is going to deliver.
Question put and agreed to.
Clause 73 accordingly ordered to stand part of the Bill.
Schedule 8 agreed to.
Clause 74
Contract change notices
Amendment made: 54, in clause 74, page 51, line 5, leave out paragraph (c).—(Alex Burghart.)
This amendment would remove unnecessary provision, as light touch contracts are excluded from the whole clause under subsection (6)(b).
Clause 74, as amended, ordered to stand part of the Bill.
Clause 75 ordered to stand part of the Bill.
Clause 76
Publication of modifications
Amendments made: 55, in clause 76, page 51, line 40, after “modification” insert “—
(a) in respect of which the contracting authority is required to publish a contract change notice under section 74, and”.
This amendment would limit the requirement to publish a copy of a contract as modified or a modification to those modifications in respect of which the contracting authority was required to publish a contract change notice.
Amendment 56, in clause 76, page 51, line 43, leave out paragraphs (a) to (c).
This amendment is consequential on Amendment 55.
Amendment 57, in clause 76, page 52, line 3, leave out
“or a transferred Northern Ireland authority”.
This amendment is consequential on Amendment 55.
Amendment 58, in clause 76, page 52, line 7, leave out
“or a transferred Northern Ireland procurement arrangement”.—(Alex Burghart.)
This amendment is consequential on Amendment 55.
Clause 76, as amended, ordered to stand part of the Bill.
Clause 77
Implied right to terminate public contracts
Question proposed, That the clause stand part of the Bill.
Alex Burghart
Clause 77 sets out that it is an implied term of public contracts that a contracting authority can terminate a contract if one of a number of termination grounds apply. These are where a contracting authority considers that the contract was awarded or modified in breach of the Bill and regulations made under it, where a supplier has become an excluded or excludable supplier, or where a subcontractor is an excluded or excludable supplier.
These last two grounds considerably expand the implied right to terminate on exclusion grounds and are a good example of how we are tightening the rules on poor suppliers. Contracting authorities must still give suppliers that subcontract to an excluded or excludable supplier the opportunity to cease their arrangements. Contracting authorities must also communicate any intention to terminate the contract on these grounds before proceeding to terminate.
Clause 78 requires contracting authorities to obtain approval from a Minister before terminating a contract in reliance on the discretionary exclusion ground for suppliers that pose a threat to national security. Subsection (1) states that this requirement applies when contracting authorities are seeking to rely on the implied termination right in clause 77 where a supplier or subcontractor is excludable in respect of the national security exclusion ground. Subsection (2) says that this requirement applies to all contracting authorities other than a Minister, a Department or a corporate officer of the House of Commons or House of Lords.
The clause is essential to ensure that contract terminations on the basis of national security are not made without ministerial consideration of the risk posed by the supplier and the impact of the decision. The requirement to seek ministerial approval will allow for the views of those tasked with protecting national security, including the security services, to be taken into account.
Clause 79 sets out the mandatory transparency requirement that all contracting authorities must publish a contract termination notice on termination of all public contracts, with the exception of private utilities contracts and user choice contracts that have been directly awarded. It specifies the time period by which it must be published, which is 30 days after a public contract has terminated. It also sets out that contract termination notices will contain information that will be specified in the regulations made under clause 93.
Clause 79(3) makes it clear that a reference to termination includes: discharge, expiry, termination by a party, rescission, or set aside by court order, whether or not under part 9 remedies. That list does not exclude other references to termination, and a contract termination notice should be issued at the conclusion of a contract, however that contract has ended.
Florence Eshalomi
Clauses 77 to 79 relate to provisions that allow for the termination of contracts in specific circumstances. The implied circumstances include the contract being awarded or modified in a material way in opposition to this Bill, or a supplier becoming an excluded or excludable supplier. They also provide for termination when a supplier is subcontracting all or part of the contract to an excluded or excludable supplier.
The Opposition understand and support the need for these provisions, but we have some concerns about the meaning of the clauses. When a contractor becomes an excluded supplier, will the contract be terminated automatically? It would seem strange that, although a contract cannot be awarded to a supplier under those terms, an excluded supplier is not automatically stripped of a contract when they become excluded.
Some of the provisions included under the excluded schedule are extremely severe. They include human trafficking offences, slavery offences, corporate homicide and even terrorism. We must make it clear that, when suppliers are convicted of such crimes, they must not provide contracts for public services. I hope we all agree on that. Does the clause allow for contracts with excluded suppliers to be automatically terminated, or is that at the discretion of the contracting authority? That is a really important point, and I hope the Minister will be able to clarify it. The public would not expect a supplier that has been convicted of terrorism to still be carrying out public contracts, even if the contracting authority decides it is right.
We also have concerns about how discretionary exclusion grounds are treated in this part of the Bill. As I have previously said, we want consistency in the Bill on when these grounds are applied. We do not believe that it makes sense for a company to have its contract terminated by one contracting authority for, say, environmental misconduct, but in the same breath keep a similar contract with similar risk with another contracting authority based simply on the decision of the authority. A lot of that is inconsistent and confusing, which has been highlighted, and it means suppliers that fall foul of discretionary exclusion grounds to the degree that a contract can be stripped from them may still be providing services to the public in other areas. The Minister has highlighted the need for discretion, which we understand, but surely there should be some level of consistency.
I also raise the inconsistency between national security in clause 78 and how the Minister laid it out previously. We do not wish to vote against clause 78, and we believe that it is the right way to carry out public procurement when considering national security. As the name suggests, national security is a national issue. However, during the Minister’s remarks on our amendments 15 to 19, he said:
“Amendments 15 to 19 seek to make exclusion on national security grounds mandatory, rather than discretionary. Any risk to national security should of course be taken very seriously indeed, but it is right that we leave some scope for nuance and flexibility in the application of the exclusion ground. Suppliers may pose a risk in some contexts, but not in others.”
The Minister went on to say:
“It is important to note that contracting authorities must consider all exclusion grounds, mandatory and discretionary, against every supplier in each procurement.”
He also said:
“There would be a balance of risks. Not all security threats are proven. Of course, it is up to the authority to assess the concerns”.––[Official Report, Procurement Public Bill Committee, 2 February 2023; c. 113.]
Based on what the Minister said in response to our amendments, there is some inconsistency in this approach. We need verification to identify a national security threat on a national scale and to disregard a contract on that basis, but to say that awarding or terminating a contract for a national security threat is at the discretion of authorities is a little contradictory.
For example, let us take what happens when a contracting authority identifies a threat. If the authority decides not to terminate the contract regardless, the contract is awarded with no follow-up from the Government and no check that it is a threat. If the authority decides to terminate the contract, it needs to go through a check with the Minister and confirm whether it is a threat. We think that is the right course of action, but why should the decision effectively be taken at different levels? Surely there should be an obligation to check with the Government regardless of whether the contract is terminated or not. At the very least, the Government can advise on the decision not to terminate the contract based on the threat.
As I and those who submitted evidence have highlighted, we can see procurement departments in many organisations being overstretched. We cannot expect those very same contracting authorities we want to come forward to bid for public contracts to act as MI5 or national security experts.
The Chair
I call the Minister, mindful that there will be a vote in the House at 4.12 pm.
Alex Burghart
I will try to contain my remarks to the next few minutes. Before I get to the specifics, I should for the sake of posterity record that, by working so hard today, hon. Members have reached the end of the selection list. Had more groupings been available, they would no doubt have wished to go further—[Interruption.] Cries of “More, more!” were heard from the Opposition Benches.
I will return to some of our previous conversations. As I said earlier to the hon. Member for Vauxhall, there will be times when a supplier may have made errors and got itself into trouble. It may be the case that there are times when a company has suppliers over which there are national security concerns, but they supply goods that cannot be found anywhere else and do not in themselves present a risk to national security. That is the role of the difference. The Division bell is ringing, but I am happy to pick up on this when we meet again on Thursday.
Question put and agreed to.
Clause 77 accordingly ordered to stand part of the Bill.
Clauses 78 and 79 ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Julie Marson.)
Westminster Hall
(1 year, 9 months ago)
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Saving for Later Life
(1 year, 9 months ago)
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Sir Stephen Timms (East Ham) (Lab)
I beg to move,
That this House has considered the matter of saving for later life.
It is a great pleasure to serve under your chairmanship, Mr Hosie. The debate arises from the recent report by the Work and Pensions Committee and the responses from the Government, the Financial Conduct Authority and the Money and Pensions Service. I am grateful to the Backbench Business Committee for allowing us to have this debate.
Auto-enrolment has been a big success, reversing the decline in workplace pension saving. By the end of last November, over 10.8 million workers had been automatically enrolled and over 2.1 million employers had met their obligations. Our report highlights two big challenges: first, people are not saving enough for an adequate income in retirement; and, secondly, there are people outside the scope of auto-enrolment, due to low pay or self-employment, who would nevertheless benefit from saving in a pension. I will set out those two problems.
The first is retirement income adequacy. Auto-enrolment requires employers to enrol eligible workers aged between 22 and state pension age and earning above £10,000 a year into a workplace pension, and, unless they opt out, to make minimum contributions on a band of qualifying earnings. Employees have to contribute at least 5% of qualifying earnings, including 1% in tax relief, and employers must contribute 3%, so the statutory minimum contribution is 8%. Thanks to auto-enrolment, 86% of eligible workers were saving in a pension in 2020—about twice as much as the proportion was in 2012. The problem is that some who used to have no pension savings now have inadequate pension savings, and they do not know that that is the case.
The Pensions Policy Institute claims that only 39% of households are on track for an adequate pension, according to the Pensions Commission definition. The Pensions and Lifetime Savings Association says that nearly 20% of households at the moment are heading for poverty in retirement. The problem is worse for people in their 40s or and above who have no defined benefit pensions and have not had time to build up an auto-enrolment pension either. The crisis of under-saving will crystallise when they retire, when it will be too late to do anything about it. One of the Minister’s predecessors, Sir Steve Webb, describes it as a “slow-motion car crash” that requires action now.
In our report we asked the Government to consult on a plan to deal with the issue and report back to us by March this year. In their response, the Government recognised the problem:
“Current statutory contributions of 8% on a band of earnings are unlikely to give all individuals the retirement to which they aspire”.
However, they said that now was not the “right time to consult” and that instead they would provide “further information and guidance”. Many witnesses, including the then Pensions Minister, the hon. Member for Hexham (Guy Opperman), told us that that would not work. He told us that
“the lessons of automatic enrolment are that default is the only way to get big interventions”,
and he was absolutely right.
The Government now need to make the case for higher contributions. As things stand, people do not know that they are not saving enough. We need a plan to raise minimum contributions, perhaps with mechanisms such as Save More Tomorrow, where people commit in advance to contributing more as their pay rises in future. The Association of British Insurers argues that contributions should go up from 8% today to 12% by the early 2030s, as in the successful Australian system.
Mr Gregory Campbell (East Londonderry) (DUP)
I commend the right hon. Member on this timely debate. He talked about timing. Does he agree that while successive Governments commendably maintained the triple lock on state pension contributions and entitlements, it will come under increasing pressure in the coming years? The timeliness of the debate in resolving that is, or should be, apparent to everyone.
Sir Stephen Timms
The hon. Gentleman is right. The Government have usually—not always—applied the triple lock correctly, but it is absolutely vital that people build their own pension savings on top of that. Otherwise, a lot of people will get a very nasty shock when they reach retirement, and at that point it will be too late to do anything about it.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
Understanding someone’s private pension is quite complex, particularly if they have had more than one job and been in several schemes. Does the right hon. Member agree the work that the Department for Work and Pensions is doing to deliver a dashboard with industry will allow people to access all that information?
Sir Stephen Timms
That is very important. We are expecting quite significant progress on the dashboard this year. The Select Committee will, I hope, be taking evidence about that in a session quite soon. That will be an important step, when it finally becomes available.
We recognised in our report that with the cost of living crisis now is not the right time to increase everybody’s pension contributions, but the ground needs to be prepared for increases in future. To quote the Financial Inclusion Commission, we need a “light bulb moment” to alert employers and the public to the gravity of the current under-saving problem. We need to start building a new consensus on what an adequate retirement income is and what is needed to deliver it.
Jim Shannon (Strangford) (DUP)
I commend the right hon. Member on bringing this forward. It is not just about the workers of today; we must start earlier. I know he has probably commented on that, but there have been numerous surveys. One, undertaken by Deloitte, states that younger people do not have a sound understanding of things such as ISAs, saving pots or pension pots. We must also note that some teenagers as young as 14 have jobs, so they should be knowledgeable about pensions and savings. Does he agree that consideration should be given to incorporating these matters into learning for life and work modules in schools across the UK nationally? Start it early, because that is when we build for the future.
Sir Stephen Timms
The hon. Gentleman makes an important point. It is helpful for people at school to develop an understanding of financial matters. Even a fairly brief exposure to these matters at school can be really helpful in forming an understanding that serves people well throughout their future working lives.
In their response to our call for work to start building this consensus, the Government said they had a range of metrics for adequacy, but that misses the point. Will Ministers work with others to identify what an adequate retirement income is, and will they then start laying the ground for sufficient saving to deliver it? The Department’s own analysis in 2017 was that 12 million people were under-saving—that is about 38% of the working-age population. Some 1.5 million were substantially under-saving. The Minister’s predecessor, the hon. Member for Hexham, told us that the number of under-savers was “up for debate” but “clearly substantial”. He said the Government would carry out further analysis and keep the Committee informed. When will the Department produce new estimates of the extent of under-saving? When will it publish its research on the pension saving issues for people with low incomes?
The 2017 auto-enrolment review recommended first lowering the minimum age at which a worker must be auto-enrolled from 22 to 18. Secondly, it recommended
“removing the lower limit of the qualifying earnings band”—
which is £6,240 at the moment—so that contributions are paid on the whole of somebody’s earnings. We heard there was “almost universal support” for thus helping people poorly served by the current system—in particular, low-paid or part-time workers—and we recommended doing so. In response, the Government restated their commitment to implementing the 2017 review in the mid-2020s, saying:
“We aim to bring forward legislation at a suitable opportunity and when parliamentary time allows.”
Well, the mid-2020s are approaching rapidly. We need legislation this year if that is to be achieved, and I would welcome any encouragement that the Minister can give us about the prospects for that.
A second big problem is tackling exclusion from auto-enrolment. As I have said, auto-enrolment has reversed the decline in the number of employees saving in a pension. By contrast, there has been a big fall in self-employed pension savings, from about 48% in the 1990s to 16% now. We have known about that for some time; indeed, the Department’s response to the 2017 auto-enrolment review said that it was
“a significant and complex strategic problem”,
which is a fair comment.
A lot of people giving evidence to our inquiry argued for mirroring auto-enrolment, using the tax or national insurance system to auto-enrol self-employed people. It is very disappointing that the Government have no plans to do either of those things. Instead, they say that they favour prompts and nudges through accountancy, plus opportunities from the Making Tax Digital programme, but none of that will be enough. Can the Minister tell us when the Department plans to report back on those efforts? I am afraid they are doomed to fail.
A key part of our report focused on the gig economy. The 2021 Uber case suggested to some people that auto-enrolment might be opened up to all workers, but there are big enforcement challenges. Uber gave us compelling evidence and told us about its auto-enrolment model for drivers, which it had invited competitors to join. None of them has done so yet. The Government say that many gig economy workers are already eligible for auto-enrolment, including fixed-term contract, zero-hours and agency workers. The Pensions Regulator ought to be securing employer compliance, but it told us about a “significant evidential burden”. It told us that employers routinely challenge it at every stage and that the guidance issued by the Department for Business, Energy and Industrial Strategy last July did not help.
Uber and the GMB trade union called on the Government to legislate for better enforcement, with a new body for that purpose. We repeated the recommendation that we made in two previous reports for an employment Bill to address these issues. We have no idea why that Bill has not been forthcoming. In their response, the Government referred to their backing for five private Members’ Bills on a range of employment issues. Those are all no doubt helpful, but none of them helps with delivering auto-enrolment in the gig economy. We called for the Department to work with the Pensions Regulator to estimate, first, how many people in the gig economy should be workers for auto-enrolment purposes and therefore should be auto-enrolled, and, secondly, what resources or powers the Pensions Regulator needs to make sure that employers comply with their obligations, which they are most certainly not doing at the moment. I hope the Minister will be able to tell us something about what the Government will do to stop people working in the gig economy missing out on their entitlement.
The third important gap was referred to in evidence to us from a number of bodies, including Age UK, which told us the gender pensions gaps remains a serious problem. It reflects differences in labour market participation and hits women at retirement, when there is very little they can do about it. Nobody in government produces any data on the gender pensions gap, so the Prospect trade union produced a definition. It suggested the definition should be the percentage difference in average gross pension income for men and women receiving the state pension, and it currently estimates the gap to be 37.9%. There has been very little progress in reducing that since Prospect started reporting five years ago.
Margaret Ferrier
Last year, I carried a private Member’s Bill through the House to Royal Assent. That legislation addressed sex-based inequality and guaranteed minimum pensions, which is just a small aspect of the pensions pay gap. Does the right hon. Member agree that because women are likely to earn less than men, and therefore their pension contributions will be lower, further and widespread work is required?
Sir Stephen Timms
Yes, I think the hon. Member is quite right. It is not just that women’s earnings are lower and therefore their pension contributions are lower; a lot of women earn below the current auto-enrolment earnings threshold, so they do not save anything at all. NOW: Pensions says that of the 14.6 million employed women in the UK, 17% do not meet the automatic enrolment criteria, compared with 8% of male employees. That is a big part of the problem as well and, as the hon. Member said, it is very much tied up with lower earnings.
I warmly welcome the announcement that the Department is working across Government to develop a coherent framework for assessing this gap and to find a definition to enable the measurement of progress to reduce it. Will the Minister tell us when she expects that work to be complete? In her helpful letter to the Work and Pensions Committee, which was published yesterday, she said that she was looking at
“regular reporting on the gender pension gap….to better highlight the issue publicly.”
When does she expect “regular reporting” to begin? When she says “regular reporting”, does she envisage that happening annually?
Auto-enrolment has been a big success in increasing the number of workers saving in a pension, but there is a lot more to do for the pension system to deliver adequate retirement incomes. The Department agrees with the Committee on the problems that need to be addressed; now we need to get a move on and address them. After the 2017 review—some six years ago—the Department said that its focus was
“for individuals to keep saving and to save more after minimum contributions reach 8 per cent in 2019”
and
“to ensure that younger people, part-time workers and the self-employed can achieve more security in later life.”
Momentum has now stalled. The Department has not even progressed the recommendations of that review. In winding up, will the Minister make a start by telling us when the Government intend to make progress on those recommendations?
Nigel Mills (Amber Valley) (Con)
It is a pleasure to serve under your chairmanship, Mr Hosie. I congratulate the Chair of the Select Committee, the right hon. Member for East Ham (Sir Stephen Timms), on securing the debate. As a member of the Backbench Business Committee, I thank him for applying for time for us to have a debate on this important topic.
Pension debates are bit like buses: we have had none for ages, and now we have had three in the last four sitting days, so we can certainly explore the topic thoroughly. By some fluke, we have ended up with all the key planks of pensions status being considered over the last few days. We looked at the age at which people should get their state pension and, last night, we looked at increasing pensions to keep them in line with inflation, which is key plank. If we are going to have a model where the state pension should be enough to keep people out of poverty in retirement, and after that is up to people to save for the kind of living that they want, we need to ensure the minimum floor is in the right place. We should welcome the fact the Government did that last night.
However, that leaves our whole pension-saving approach relying on how much people and their employers save for their own retirement. It is almost impossible to avoid the conclusion that people are simply not saving enough. The vast majority of people who work now are not saving enough, and the younger they are the more likely they are not to be saving enough.
The situation is stark. Around 28% of employees are still in defined benefit schemes, mainly in the public sector. Some 87% of those get an employer contribution of over 12% of their pay. However, for the 51% of people in defined contribution schemes, that number falls to 9%, so 91% of people in defined contribution schemes are not getting an employer contribution that is anything like the level that they used to have, or the level that we get.
The situation for the self-employed, as the Chair of the Select Committee set out, is even worse, as only 16% of self-employed people are saving anything like a material amount in a pension. Despite the incredible growth in the employed having a pension, that number for the self-employed is down from 48% 20 years ago, so they are going in the wrong direction. I suspect that is mostly because there is now a lot more self-employment in the gig economy. We can argue whether they are really self-employed, but they are the ones without any pension provision at all. There is clearly a huge problem, and we need to find a way to solve it.
Auto-enrolment was a tremendous start, getting people who were not saving anything to at least save something. The problem, of course, is that they are not saving anything like enough, and they probably do not even know that. The reason why auto-enrolment was chosen and was such a great success was that it did not require any engagement from the individual. In some ways, engagement is a bad thing, because if they do not know that this money is being taken from them and put in a pension scheme, they will not opt out.
We are trying to build a model that requires engagement to boost savings levels on a model where success was based on not having very much engagement. That is a real problem that we must wrestle with carefully. We do not want people to start opting out, but we do want them to realise that they are not going to have much quality of life in retirement if they do not do something materially different.
That brings us to two initiatives. The first is the dashboard and the second is access to guidance. There is a general consensus that the dashboard will be great, and that it will move us forward by enabling people to understand how much they have got in savings. It would be helpful if the Minister could give an update on when people will have live access that enables them to see at least the majority of the pensions they have saved for in their life. I think we would all accept that it is better to have it later than to have something that is rubbish, but let us not have perfection delay it too far. There probably will be some pensions schemes that will not be able to meet any kind of realistic starting date soon, but they will have so few savers in them that there will not be a problem for the vast majority. I hope that some time next year, people will have live access so that they can find out how much pension saving they have.
Having spent years working out the mechanics and how to make the system safe, what we really need to fix is what people will see when they go on the pensions dashboards. Will the Minister set out the process and her vision for it? People need a clear statement of what they have already saved and some objective, fair and consistent comparison with what they need to have saved, what other people have saved by that time and what they are on track to achieve. Otherwise, they will just see a large-looking pot of money. For someone with no other savings, having 20 grand in their pension might look like they are rich and everything is going to be fine.
Jim Shannon
I want to pick up on the point about national insurance contributions, and ladies who thought they were on a pension scheme that would reward them when they reached pension age. As an elected representative, I have had a number of constituents come forward over the past few years to tell me that, as they were part-time workers, their national insurance stamps were paid only for a certain period of time. That means that when they reach pension age, their pension is not there for them, although their understanding was that they would have a pension. Does the hon. Gentleman agree that for ladies of the generation now coming to pension age who will not have a pension because they have not paid their national insurance contributions to their full entitlement, the Government should make people more aware so that they can take steps early?
Nigel Mills
Yes, the hon. Gentleman is right that we need people to understand if they have gaps in their state pension record. That can be found relatively straightforwardly on the state pension system. The dashboard will need to show the state pension entitlement. I urge ladies who might be in that situation to check, because they ought to have got credits while they were receiving child benefit. They might not have been working, but they had other caring responsibilities. It is always worth checking whether they have entitlements of which they may not be aware, and which the system has not picked up.
Back to my theme on the dashboard: for the dashboard to have the impact we want—for people to change their saving behaviour—the information needs to be there. It needs to say, “Yes, you have saved this amount, but most people by your age have saved this amount. If you want to have £10 grand of extra income in retirement over your state pension, you are not on track to do that, and you need to increase your saving.” We need to find a way to give people a context for their savings information. Otherwise, we will have a meaningless number that might not drive behaviour. It might even perversely make people think they are better off than they are.
It is important to understand what the Government and the regulators will allow to be shown and want to be shown. We must ensure that the data is objective, fair, accurate and preferably consistent, because we do not want people to get slightly different pension target across six schemes; they should be told the same information so they can make an accurate comparison.
The second area is the thorny issue of access to guidance and when people should have it. The Work and Pensions Committee has argued with the Government and the regulator about that for a few years. I hope the noises coming out of the Government about trying to get people who are not in economic activity back into work, and about wanting to do more than a midlife MOT or a financial review, mean that they are moving our way now, but the take-up of Pension Wise has been far lower than everybody wanted it to be. The Minister at the time said that Pension Wise take-up should be the norm. I am not sure how 8% or 14% take-up could be described as the norm; I would have thought that the norm would be just below half, or something. Perhaps the Minister can tell us what she thinks the norm is in that context.
There is no room for doubt: even with the stronger nudge that the Money and Pensions Service is trialling, Pension Wise will not get anywhere near that take-up. It is absolutely right that people should have access to that service when they are about to do something with their pension pot. It is a decision that they will not be able to change for the rest of their life, and if they get it wrong, it could be disastrous. Equally, given that we have so much unused take-up, can we not find a way of getting people to access the scheme earlier, soon after their 50s? That would allow them to get a proper review for half an hour or an hour and have all these things explained to them, so they can see what their situation is while they still have a chance to change it, rather than when it is too late? I am old enough to remember “Bullseye”—at the end of the show they used to say, “Here’s what you could have won.” Having a pension review at the age of 65 and a half that says, “Here’s what you could have had if you had saved a bit more,” is not all that helpful to people, so they should get that intervention earlier.
I was a little disappointed by the Government’s response to the Work and Pensions Committee. They said they did not want to go forward with a trial of auto-enrolling people into a Pension Wise appointment shortly after their 50th birthday. I understand that some pension schemes are willing to put their members forward in some sensible, random way so we can find out whether that works. All we are asking the Government to do is to allow MaPS and regulators to commission one of those trials so that we can see whether enrolling people into an appointment in their early 50s gets positive feedback and changes their behaviour. If it does not work, fine—we will have to find some other way—but it looks to be a low-cost way of seeing whether an intervention might work. It would use capacity that is already there and is not being taken up, and it would be a powerful way forward.
I hope that the Minister will be a bit more supportive than her predecessor. If we want to work out how to give people some kind of nudge, hint or push at an age when they can make a change, that is the best idea out there. If the Government are looking for ideas to get people in that age bracket to come back into work, because they have not saved enough for retirement but they think they have, a half-hour or hour session with an expert who can explain what they really need and what they have really got may be the best way of doing it. The online midlife MOT that the Government have produced contains some very useful information—I am not saying it is a bad thing—but it will not change behaviour. It is not an intervention that will really make a difference.
Margaret Ferrier
The Social Market Foundation found that just 25% of people from ethnic minority backgrounds have a workplace pension, and research found that they are more likely to be sceptical about private pensions. Does the hon. Gentleman agree that the Government should do more to educate and reach those groups so they can make sure of their post-retirement financial security?
Nigel Mills
The hon. Lady is absolutely right. It is important to explain to people not just from that background, but from all backgrounds, that pensions are a good thing, safe and a good way of saving for retirement. People just do not understand pensions, and they are quite cynical and sceptical about the idea that their money will be there. The more we can do to reassure them, the better.
I have two more quick points to make. We have wrestled for years with the conflict for younger people: should they save for a deposit to get on the housing ladder, or should they save for a pension? The pension industry screams if it is suggested that the former is possibly a good idea. There have been various ideas about how to link the two, but we have not yet made any progress on which one to go for. A key determinant of someone’s financial health in retirement is whether they own a house. If they do, they do not have housing costs to pay and they have an asset that they may be able to downsize to boost their pension pot, so getting young people on the housing ladder earlier is good for their retirement just as saving for a pension is good for their retirement.
Gareth Davies (Grantham and Stamford) (Con)
Is my hon. Friend aware of the KiwiSaver scheme in New Zealand? It combines the two aspirations—to save for a pension in later life and to get on the housing ladder—in that someone can divert a portion of their pension saving pot towards a deposit for a house. Is that something that the UK Government should consider?
Nigel Mills
There are various ideas out there, and people could use that sort of scheme. They could take a loan out of their pension scheme to get their deposit, and pay it back. We could allow people to be auto-enrolled and have their employer contributions go into their help to buy ISA. There are various ways to try to achieve the aim, but we need to pick one and bring it forward. We have not made the progress that perhaps we should. To be honest, I can see no way of getting more money into young people’s savings to achieve a deposit other than allowing the use of some kind of employer support that is currently going into their pension, because in reality, young people will not have the scope to save much more for themselves. We have already tried to give them the taxpayer top-up through the help to buy ISA. Where else is new money coming from to improve this situation if not from money that is going into their retirement saving?
David Linden (Glasgow East) (SNP)
I am grateful to the hon. Member for giving way and to the hon. Member for Grantham and Stamford (Gareth Davies), who intervened before me and talked about the KiwiSaver scheme. I think that that is very interesting, but it strikes me, when considering this topic, that this is a discussion that we have within our little bubble on work and pensions but it is perhaps not something that has been explored in Government—for example, in the Treasury and the Department for Levelling Up, Housing and Communities. Does the hon. Member for Amber Valley (Nigel Mills) agree that there has to be a slightly wider, cross-Government approach if we are seriously to explore the issue?
Nigel Mills
I agree. This is a complicated area and it clearly does cross into being a Treasury responsibility; it has to, as it involves quite a lot of pensions issues. But this is a question of coming up with a consensus around a plan for how we achieve the aim. There needs to be a long-term, stable solution. The Treasury did—it must be seven or eight years ago—move to the help to buy ISA and add the taxpayer top-up to it, and that is, in effect, an equivalent to what people get in a pension scheme. There does not have to be a completely closed door, but this is a matter of bringing these things to fruition.
I welcome the announcements made by my hon. Friend the Minister last week at the Pensions and Lifetime Savings Association about the value for money of pension schemes. I have banged on about this for a few years. It is regrettable that the auto-enrolment market is generally still about saying, “We’re going to be really cheap for employers and really easy for you to comply with,” rather than, “Here’s a great pension that you can put your staff in. It will be a really powerful motivation and retention tool, and they will get a really good pension at the end of it.” Now that the market is mature, we need to try to move it away from being cheap and easy to being high quality, with decent returns and a decent service to members. If the Minister is going to make some progress on that, I will greatly welcome it, because having people in the best possible schemes with the best returns, rather than in the cheapest and easiest ones, will actually boost their retirement income.
It is also extremely welcome that the Minister is looking at how we can roll out CDC—collective defined contribution—schemes to many more people. Not having them necessarily being employer-led, and allowing them to be decumulation only, is a really powerful thing for retirement, especially now that we are in a different world. If interest rates stay where they are and people can get a much better annuity—I think the rates are now more like 6% a year rather than 4%—that dramatically changes the assumptions that we have seen for the last 15 or 20 years. Those schemes could become much more attractive and much better for people even than we thought they would be when we introduced the Royal Mail one. The landscape has changed, and the more we can make some progress on these key things, the more chance there is to make a real difference. I hope the Government will make some progress on these matters.
Kevin Foster (Torbay) (Con)
It is a genuine pleasure to serve under your chairmanship, Mr Hosie. I congratulate my friend—he genuinely is my friend—the right hon. Member for East Ham (Sir Stephen Timms) on securing the debate, along with the work that the Select Committee has done on this topic under his guidance.
For many people, my constituency of Torbay is the place they want to retire to, as many have already done. Its attractiveness as a tourism resort applies equally for those who want a change of lifestyle and to live amongst its natural beauty and enjoy the many activities that are on offer, which they previously had to put to one side to pursue a career. Given its attractiveness to retirees, Torbay is known for having a population mix that tends to be older than average. As I sometimes reflect on in debates about health and social care, in one of my wards, about 9% of the population is aged over 85. In an area where there is a one in 10 chance of meeting someone aged 86 or older, there are some unique challenges around the provision of public services. For example, at a local supermarket there might be a parent and child parking space, but nowhere to leave a scooter.
The focus of the debate is not those who are already retired, but how the dream of enjoying a comfortable retirement—hopefully in Torbay—can be maintained for those in their 20s, 30s and 40s; and how to ensure that they know how to save, what they need to save and what lifestyle their current level of retirement savings will allow them to enjoy. I welcome the Select Committee’s report and its focus not only on how to further develop auto-enrolment, but on some of the trickier situations around encouraging longer-term savings patterns where someone is self-employed or working in the gig economy.
Before I go too much further, it is worth noting the success of auto-enrolment in that endeavour. That one move has transformed saving for later life in the UK for millions of workers. The proportion of eligible workers saving in a pension rose from 44% in 2012 to 86% in 2020. As has been touched on, participation has remained high at 89% for 40 to 49-year-olds—my own age group—and, encouragingly, at 85% for 22 to 29-year-olds. The latter group is crucial, because small amounts that are put aside early can lead to a strong position for retirement in decades to come, not least with the additional employer contributions.
The financial impact has been significant, with an estimated additional £33 billion in real terms saved into workplace pensions in 2021, compared with 2012. It is also worth noting that with the forthcoming increase in the national living wage to £10.42, more people will go over the earnings threshold and therefore start auto-enrolment, with the savings it brings. Despite that major progress, however, it is clear that many are either still not part of a pension scheme or not saving enough to meet their eventual retirement plans.
The right hon. Member for East Ham rightly highlighted that it is worth people having a clear view of what is adequate so that they can think in their 20s and 30s about what they will need to support themselves in their late 70s and 70s. I think we all realise that there will be a difference in that figure across the UK, particularly if housing costs still need to be met. Someone living in central London will be in a different position from someone in Torbay or Glasgow who owns their property and therefore only has to account for the general lifestyle they want. Of course, if they own their property, they will still have to maintain it. The idea that housing is free when we reach retirement is often disproved when a property that has been owned for 20 or 30 years suddenly needs a new roof or a heating system upgrade. People can be capital-rich on paper because of their property, but they can find their finances quite stressed when they have to meet large repair bills.
There is a particular issue with how we encourage those who do not have a specific employer. That is relevant for many performing roles in Torbay’s tourism sector, and I was pleased that the Select Committee focused on it. The Government are right to say in their response that there is not a single solution for such a diverse part of the workforce. As was often mentioned during covid, self-employment includes everyone from those who are just starting out on their own in a small business, often on a relatively low income, to those in magic circle law firms earning significant sums. However, our focus will always be on those who may struggle in retirement, not on high-flying lawyers who are likely to be only too aware of their pension and saving options—probably their tax options as well—in planning for their retirement.
I agree that we need targeted messages that reach people when they consider their finances, or that we should proactively seek to put information about their retirement in front of them regularly. For example, how can we support self-employed people who work seasonally across the hospitality sector? When do they look at their finances? I share some of the thoughts of my hon. Friend the Member for Amber Valley (Nigel Mills), however. We do not want to have a counterproductive impact by advising people that money will be coming out of their wages each month and having them decide, “Actually, I’ll take the money instead.” In the earlier stages—the first couple of years—the entitlement they have built up will not look particularly impressive, but if it were continued, it would become a worthwhile pot. We do not want a counterproductive outcome overall, but it is certainly something that can be worked on, and we have seen the progress that has been made so far.
Although the Select Committee report was welcome overall, I have some concerns about the suggestion that national insurance payments could become a quasi-auto-enrolment position for the self-employed. There is a real difference between a person saving specifically for their own retirement, to fulfil the dreams or plans they have, and paying tax to fund public services and benefits, as they are required to do under the law. I appreciate that the state pension is linked to making national insurance contributions, but that has always been on the basis of years, rather than “You will build up x amount of contributions, and that will produce y pension.” It is not a pot that people have and that they can access. I can see the idea that when people pay NI they are arguably making contributions towards a state pension, but that is slightly different from them building up their own pension pot, which would be theirs in name as well.
Nigel Mills
To clarify, the idea was that because the self-employed pay a lower national insurance rate than those who are employed, we could effectively say to people, “Either you can put that into your own pension pot and top it up, or you can pay national insurance at the same level as somebody who is employed and not get any benefit from it.” It was a way of trying to replicate the auto-enrolment position, where a person puts in money themselves and gets money from somebody else and the taxpayer. It was the only real solution we could find in terms of people getting more bang for their buck.
Kevin Foster
I can certainly see where the logic came from—that someone who was self-employed would be paying similar levels of national insurance as someone who was employed. For me, though, it is a mix: when a person makes NI payments, that is based on years, and it is a fairly simple calculation, as opposed to a specific amount going into a pot that is then theirs. For me, the proposal raises that particular concern but, again, I appreciate my hon. Friend’s point: we all have the goal of ensuring that the self-employed, and predominantly the self-employed who are on lower earnings, have a reasonable pot for their retirement.
It is welcome to see the Minister in her place, and it would be interesting to hear her thoughts on a couple of points when she sums up. First, what work is being done to analyse the roles in the economy where there is most likely to be under-saving and to reach out to those people? As I have touched on, the self-employed are a very wide group: some will be all too aware of their options for retirement, but others may be on low incomes and struggling, or just facing the day-to-day pressures of running a business. They do not necessarily want to spend lots of time looking up pension rules and positions, as a large company might do. Secondly, therefore, what opportunities have been explored for working with sector groups at a more local level—such as chambers of commerce, business groups or the destination management groups that are common in the tourism industry—to see how they could be used to reach out to some of those who are unlikely to want to spend a lot of time reading through guidance on how to set up a pension?
Finally, what support would be offered for sectors to look at developing their own bespoke pension funds for self-employed workers and those in the gig economy? It was touching to hear from the right hon. Member for East Ham about things such as what Uber is doing for taxi drivers. Sometimes competitors will not necessarily rush to sign up to something that is run by another company, but what is being looked at that would give firms and organisations in particular sectors that want to do the right thing the opportunity to do so?
Many who will holiday in Torbay this summer will dream about one day retiring there, and we will sometimes see a retired couple who have been married many years sitting on the Babbacombe downs next to a young couple having their first break together, who will be part of a similar scene in decades to come. Helping people fulfil their dreams is the core of this debate, and that is what must drive us in ensuring that saving for later life becomes part of everyone’s working life.
Duncan Baker (North Norfolk) (Con)
It is a pleasure to serve under your chairmanship, Mr Hosie. I congratulate the right hon. Member for East Ham (Sir Stephen Timms) on securing the debate. As the Member of Parliament for North Norfolk, I might be expected to speak in a pensions debate. I have said many times in the main Chamber that I represent the constituency with the oldest demographic in the entire country, with 33.4% of my constituents being over the age of 65. However, I am not actually going to talk about that cohort of people, because they have already retired. I am going to talk about an issue that has not been covered much today: giving people—mainly lower-paid people—useful guidance and advice before they retire.
There is a fundamental problem facing society and policyholders: most people tend to glaze over when they hear the word “pensions”. That became clear to me when I was a finance director of a medium-sized company that employed many people, so I can speak with a bit of authority about this. I found that auto-enrolment was a phenomenal success, as has been said many times. The reason is quite simple: we largely reduced the burden of instigating saving and took out the scare factor. Nevertheless, running that company’s pension scheme showed me first hand that if people can put off engaging with their pensions, they certainly will. That becomes a real problem.
The DWP published new research last week on savers’ engagement with their pensions. It said:
“Attitudes to pensions were characterised by detachment, fear, and complacency, which acted as barriers to engagement.”
I suspect that anybody who has been closely involved with pensions will not be surprised by that finding. There is a real problem. I am not talking about people who are well paid, but about the vast majority of the country. For people who are lower paid—perhaps working on a shop floor or in a supermarket—engaging with their pension and their retirement is a long way down their priority list. The reason is that people simply do not understand them, and we know that people often fear what they do not understand.
The Government should strain every sinew to ensure that good paths are put in front of people, rather than expecting savers to direct themselves to those paths for help and advice. There is help, but I suspect that if we asked the average person on the street, hardly anyone would know what the Pension Wise service is. Would they know that it is a Government-backed service that offers free, impartial guidance to over-50s? I doubt it. Would they know that someone can advise them about the options for their pension pot? Probably not. We should be promoting that service far more.
With that in mind, I was disappointed that the Government had a negative response to the recent auto-appointment proposal for Pension Wise appointments, as recommended by the Work and Pensions Committee. Pension Wise is popular and has had a positive impact on the relatively small proportion of savers who use it. User feedback is excellent and much better than policymakers might have reasonably hoped for prior to its introduction.
More importantly, Pension Wise has been proven to leave users better equipped to make pension decisions. That encompasses everything we have talked about. In his excellent speech, the right hon. Member for East Ham said that people are simply recognising that they do not have enough savings in the first place. We ought to ensure that we leave users better equipped to make pension decisions, with the additional benefit of raising awareness of the risks posed, for instance, by scammers. That alone seems like a reason to conduct a trial.
In recent research, the Financial Conduct Authority estimated that a quarter of consumers would consider accessing their pension savings earlier than they had planned due to the current cost of living pressures. We really need to get people to Pension Wise before scammers get to them and before the point where they make pension decisions based on a partial or even incorrect understanding of the consequences. That is the reason why Pension Wise was created; it is a key part of understanding pension freedoms. Indeed, its usefulness to savers presumably explains why the Government decided in 2015 to lower the age threshold for Pension Wise advice from 55 to 50.
Given the phenomenal success of auto-enrolment, about which we all agree, let us pursue auto-appointment to help give the right advice. To sum up, we should repeat that success; we should do what we did with auto-enrolment with auto-appointments, so that people realise there is friendly, decent, professional advice out there. That could take away the reticence, and perhaps sometimes fear, about taking financial advice about retirement. It can be done; we have seen it with auto-enrolment—let us repeat that success with auto-appointments.
David Linden (Glasgow East) (SNP)
It is a great pleasure, as ever, to see you in the Chair, Mr Hosie. I absolutely agree with the hon. Member for North Norfolk (Duncan Baker) on that last point, which I will come to in my remarks. I also congratulate the Chair of the Work and Pensions Committee, the right hon. Member for East Ham (Sir Stephen Timms), on securing this important debate. We have had very good contributions from the hon. Members for Amber Valley (Nigel Mills), for Torbay (Kevin Foster) and for North Norfolk, some of which I will touch on.
I am always struck that people can talk to me comfortably about the tragedy of poverty and its numerous consequences, but when pensioner poverty comes up they start to feel uneasy, perhaps justifiably. The truth is that many of us do not want to admit that the idea of older people struggling with simple things such as paying their bills and affording their weekly food shop is a bit too far from them. For many, it is an accepted fact that what awaits them in the golden years of retirement is a life of comfort, leisure and looking after grandchildren. But for far too many pensioners in these islands, the inadequacy of the state pension, which is one of the lowest in Europe, means that they have to turn to food banks and avoid turning on their radiators in the winter. It is an uncomfortable thought—the idea of one’s 80 or 90-year-old grandmother counting the pennies and sitting, anxiously, worrying about how to pay her bills. Sadly, for far too many, including in my own constituency—and, I am sure, in Dundee East, Mr Hosie—that is the stark reality of Tory Britain.
Saving for later life can be a complex and unfamiliar task, and it is further complicated by an arduous system and often impenetrable jargon, as Members have touched on. From speaking anecdotally to Members of this House, I know that as soon as pensions are mentioned, eyes glaze over and people turn off. It can seem easier to focus on today’s finances, particularly with the rising cost of living and heightened inflation, but that is simply to kick the can down the road. Today’s debate is therefore a welcome opportunity to take stock of the current pensions landscape and to assess how we are helping—if indeed we are helping—people to save for later life.
Let me start, as many others have, with automatic enrolment. Although it has undoubtedly been a success so far, it can and should go further. Saving the minimum through automatic enrolment will simply not provide many with an adequate living standard. That comes as a shock to many when retirement is just around the corner, at which point it is often too late to do much about it. My position, and indeed that of the SNP, is that the eligibility criteria for auto-enrolment should be widened and the age of eligibility moved from 22 to 16. Let me explain why it should be 16 and not 18, which appears to be the wider consensus in this House.
This issue is personal for me. This is National Apprenticeship Week, and I left school at 16 and started working as an apprentice, as tens of thousands of young people do, perhaps setting off on a lifelong career in local government. For that reason, and indeed many others, I believe it would be right and proper for auto-enrolment to be rolled out to those who enter the labour market at 16. That would bring it in line with taxation policy and give people the best opportunity to save for their future. I also want auto-enrolment to be rolled out from the first pound rather than an arbitrary threshold of £10,000. I will explain later why that ties in with the gender pensions gap, which is a real problem.
I concur with the Committee’s report regarding the recommendations of the 2017 auto-enrolment review, and I hope that we soon see more progress on those. The recommendations would hugely improve the saving ability of those who are typically short-changed by the pensions system—I am thinking specifically of part-time workers, women, self-employed people and workers in the gig economy. In this morning’s debate there has been a good focus on self-employment. As the Committee’s report clarifies, a much smaller proportion of self-employed people, as opposed to employees, now contribute to a pension. That proportion has increasingly declined since the mid-1990s and now sits at just 16%, compared with 88% of workers eligible for auto-enrolment. I therefore support the report’s recommendations on that issue, including trialling ways to default self-employed people into pension saving and considering how to promote it to them. I note from the Minister’s letter, which a number of us received, that the Government are making an effort to do that, but I press the Minister ever so slightly to give us a timescale.
Let me turn to the gig economy and the future of work. As we inevitably become more reliant on the gig economy, it is vital that auto-enrolment applies to everyone and that employers do not shirk their responsibilities to staff. It is worth noting that that recommendation has been made in not one but two previous reports by the Committee. I repeat that the British Government must do more to bring forward an employment Bill as soon as possible. We have been waiting for this elusive employment Bill for what feels like an eternity. If the Government can find time for the Strikes (Minimum Service Levels) Bill, they should be able to bring forward an employment Bill that improves workers’ rights—something we were promised would be part of the post-Brexit sunlit uplands. Although an employment Bill would offer many possibilities for enshrining better terms, conditions and employment protections, it would also increase the legal protection available to people in low-paid work and the gig economy, ensuring that they have a fair opportunity to save for their pension. Surely we can all agree on a cross-party basis about that.
I turn now to the injustice of the gender pensions gap and to the need for a clear and official measure of what that gap actually is. Again, I welcome what the Minister said in her letter about trying to get to that definition. We rightly talk a lot in this place about the gender pensions gap, but we cannot work constructively towards ending the inherent gender-based discrimination that is baked so deeply into our economic structures if we do not have a definition of it.
Although eligibility to auto-enrolment doubtless contributes to the gap, so too does the motherhood penalty. To put the gender divide in context, we know that the average pension pot for a woman aged 65 is one fifth of that for a 65-year-old man, and that, on average over a 20-year period, women receive £29,000 less by way of a state pension than men. What is even more depressing is that, without urgent intervention, that deficit is predicted to continue, closing only by a meagre 3% by 2060. Therefore, extending the coverage of automatic enrolment further by reducing the earnings threshold to a lower level—ideally, as I say, to the first pound—would bring hundreds of thousands of people, and most importantly women, into pension saving. We should be proud that, in recent years, we have made enormous strides in bringing about equality, but we need to be honest that that progress is not reflected in pensions policy.
I turn now to the question of advice, which is where the hon. Member for North Norfolk finished his speech. Obviously, it is hugely important that people save enough for retirement, but it also matters greatly that people receive impartial and fair advice about their pension in good time. The Money and Pensions Service estimates that 22 million people do not know enough to plan for their retirement, which is an incredibly alarming figure. That leads me to reflect on a conversation that I had with my mother over Christmas, when she was talking about her pension. She had no idea about things such as Pension Wise, so clearly she is one of those 22 million people. That dim assessment was also reflected in new research from the Department of Work and Pensions, which was released only last week. It found:
“Attitudes to pensions were characterised by detachment, fear and complacency, which acted as barriers to engagement.”
We would all want people to feel more confident and secure about their pension savings. I certainly want to ensure that I am doing everything I can to make sure that people fully understand the decisions they make and, more importantly, that they can make them with conviction. There are good organisations out there, such as the Just Group, which are clear that the best option for achieving those aims is Pension Wise, the Government-backed and impartial guidance service delivered by MaPS.
I have spoken to the Minister over the course of the last month about the importance of Pension Wise and how disappointing it is that take-up remains relatively low, despite satisfaction with the service being so high. The hon. Member for North Norfolk spoke about how high satisfaction is with that service; it is up there at 90%, which is quite remarkable.
In Scotland, separate analysis from MaPS shows that the number of appointments that people made with it fell by 13% in a year, while the total number of pensions accessed across the UK rose by 18%. That concerns me enormously, because people are drawing down their pensions and making decisions about their pensions in a way that is not particularly well informed and that could even be financially disadvantageous to them.
The Work and Pensions Committee has recommended that there should be an auto-appointment trial for Pension Wise and I again join others in urging the Minister to consider that suggestion. In addition, I also ask what her Department is doing to increase the take-up of Pension Wise, because I am not necessarily sure that things such as the “stronger nudge” are working. If she is in a position to agree to meet me and the Just Group to discuss the issue, I would be grateful if she could confirm that during her speech.
Although Members from different parties may disagree about the adequacy of the pensions system, we must be clear that a situation in which any pensioner is experiencing poverty is unacceptable. According to the latest figures from the Joseph Rowntree Foundation, roughly 1.7 million pensioners in these islands are currently living in poverty. Age UK has said that the priority for many pensioners is dealing with the rising cost of living and surviving day to day. They are focused now on the challenges of health, money and their responsibilities, as well as how to cope with limited resources.
It cannot be right that after working for their entire lives, raising families and contributing to the society that my generation benefits from, so many pensioners are now worried and anxious about money. It is not right that the UK devotes a smaller percentage of its GDP to state pensions and pensioner benefits than most other advanced economies. It is also not right that the UK, despite being one of the wealthiest countries in the world, has one of the lowest state pensions in Europe.
From Barrowfield to Baillieston, pensioners in my constituency are clear to me on the doorstep that they feel that the British Government do not value them and that pensioners are, at best, an afterthought and a group that the Tories merely pay lip service to.
On just about every measure, this London Government have a disastrous record on supporting pensioners, whether that is the injustice shown to the 1950s women, the frozen pensions for UK citizens living abroad, the breaking of the pensions triple lock, the underpayment of state pensions, the gender pensions gap or the low uptake of pension credit. The list goes on and on.
Westminster has proven time and again that it will not deliver fairness or prosperity for pensioners in Scotland and that without radical change our senior citizens face a retirement of poverty, not prosperity. So long as Scotland is still tied to this Westminster system that we do not consent to, we will continue to get pensions policies that make our people poorer. That is why I fervently believe that the only way to ensure dignity and fairness in retirement for my constituents is with Scottish independence. For many of my elderly constituents sitting in their freezing homes this morning, perversely in an energy-rich country, that conclusion—that we need Scottish independence—is one that they are rapidly also reaching.
Matt Rodda (Reading East) (Lab)
It is a pleasure to serve under your chairmanship, Mr Hosie, and I commend my right hon. Friend the Member for East Ham (Sir Stephen Timms) and the other members of the Work and Pensions Committee for their excellent work and their report.
People who work hard and save all their lives deserve to expect a decent income in retirement. It is vital that the Government support pension saving as well as providing a decent state pension, and I hope that the debate will be a starting point as we discuss some of those issues. First, however, I want to put the debate in context.
We are living through difficult and challenging times with families and pensioners facing a cost of living crisis the like of which has not been seen for 40 years. Food prices are up, fuel prices are up and the cost of living is rising dramatically. That is having an enormous impact on households across the country, and there is, as has been mentioned, a real risk that some people might either stop saving for a pension or dip into their pension savings early and unsustainably, simply because they cannot afford the cost of living.
To make matters worse, the wider economic context is, to say the least, extremely challenging. Last week, the International Monetary Fund reported that the UK faces the worst economic outlook of any major economy. After 12 years of economic mismanagement by the Government, we seem to be stuck in a persistent period of low growth and high inflation. As a result of that mismanagement, the Government are trying to cut public spending. They have reduced spending on the state pension by failing to increase pensions in line with inflation until April, which means that pensioners, for some months, have been trying to keep up with the huge increase in the cost of living. They have been let down by the Government in attempting to do that.
Saving for a pension takes time and regular contributions, and, as we have seen, there is an issue of pensions adequacy. I note that the Committee’s report found that many savers did not realise that they were not on track for the retirement they had envisaged. This, sadly, is a tragedy waiting to happen. I hope the Minister will address that, and I encourage her to focus on it because Ministers must do more to avoid a terrible problem in future and to show they are taking the issue seriously. Sadly, I am not convinced that the point was adequately addressed in the Government response to the report, and I hope the Minister will find time to discuss it more properly.
Saving for the future remains sustainable only if pensions are kept safe, and increased pensions freedoms, which were introduced in 2015, gave many hundreds of thousands of people choice as to how to invest their savings. However, the Government need to do more to help them, including providing better advice, as we heard earlier, and helping to tackle fraud, such as pension scams. I am afraid that the evidence so far is that Ministers, unfortunately, are failing on both counts. As we heard earlier, not enough people are accessing free, impartial advice, and it seems as though those with the largest pension pots might be somewhat more likely to seek such advice, rather than those in greatest need.
On fraud, there are also deeply worrying indications of Government failure. In 2022, there was a 75% increase in online searches for scam help and a large increase in searches for pension scams. In 2018, the Financial Conduct Authority published data showing that hundreds of people had been scammed out of their pensions, losing on average the enormous total of £82,000 per person. Research by the Money Advice Service suggests that there could be as many as eight scam calls every second, and Citizens Advice found that 8.4 million consumers had been offered unsolicited pensions advice between 2015 and 2016.
On a similar note, we need to ensure that the regulator and the ombudsman are given the tools they need to take swift and effective action in cases of mis-selling or unethical behaviour, and the serious ongoing problems with the British Steel pension scheme show the need to improve regulation. Much of the damage in that case could—and indeed should—have been avoided if tougher action had been taken at the time. I am glad to say, however, that steps can be taken. The law was changed in 2020 to ban cold calling from UK numbers, thanks to Labour pressure. The Government should act on our calls to take further steps, such as banning fraudulent online advertisements, which remain an option for scammers.
Let me move on to speak more about the structures to help people save. As was mentioned earlier, auto-enrolment, which was created by the previous Labour Government, has become an undisputed success. We must maintain the ambitions of the previous Labour Government and do more to ensure that everyone benefits, including, as colleagues mentioned earlier, women, low-paid people and minority groups. I remind the Minister that the Government promised to look at expanding auto-enrolment by the mid-2020s. I hope she will address that point when she responds.
There is, as the hon. Member for Amber Valley (Nigel Mills) and others have mentioned, scope for other innovations. I urge the Government to think more creatively about new ways of encouraging saving—for example, by considering pensions sidecars and other ways to address the wider challenge of encouraging saving, which we have heard so much about today.
I am aware that time is limited, so I will finish by urging the Minister to do more. There is scope for pensions to contribute to protecting the future of the planet. I welcome the work of the shadow Chancellor, my right hon. Friend the Member for Leeds West (Rachel Reeves), and her plans to support green start-up companies’ links with pension funds. I look forward to the Minister’s response.
The Parliamentary Under-Secretary of State for Work and Pensions (Laura Trott)
It is a pleasure to serve under your chairmanship, Mr Hosie. I thank the Work and Pensions Committee for its report and the important role that it plays in scrutinising the work of the Department. I also extend my thanks to the Chair of the Select Committee, the right hon. Member for East Ham (Sir Stephen Timms), for securing this debate. We have had thoughtful contributions from everyone here.
The Committee’s report rightly raises key areas for reflection in our ongoing story of pension saving. The pensions landscape has undergone substantial change in recent years with the new state pension, increased pension saving through automatic enrolment, and increased choice through pensions freedoms, backed up with free, impartial guidance. We have laid a solid foundation to enable people to take responsibility and plan more effectively for the retirement that they want.
We have had numerous pension successes, with the most notable mentioned by everyone here today: the successful delivery of automatic enrolment, which has got 10.8 million more people into saving for retirement. However, the way that people save has undergone a significant shift in recent decades by shifting the retirement outcomes responsibility on to individuals rather than employers. That has thrown up policy challenges, which we have discussed today and were rightly considered in the Committee’s report.
I turn now to the future of automatic enrolment. Last year was the 10th anniversary of AE, which was introduced under a Conservative Government. AE facilitated a dramatic shift in workplace pension savings, with 86% of eligible employees in the private sector now participating in a workplace pension. The Government are committed to building on the success of AE by implementing the outcomes of the 2017 review, as endorsed by the Committee. I am pleased that there is a widespread consensus on that.
We will reduce the age at which people are auto-enrolled from 21 to 18, as well as removing the lower earnings limit. I heard what the hon. Member for Glasgow East (David Linden) said about lowering the age to 16—he tells a powerful story—and we will keep that under review. The 2017 recommendations will change the landscape for the better. They will enable people to save for longer and begin their savings journey from the first pound of their earnings. That will give younger people and people in part-time jobs, particularly women, the opportunity to be brought into the world of pension savings for the first time. I know the Committee is keen for me to set out a timeline. I, too, am keen to set out a timeline, and as soon as I have collective agreement I will come back to the Committee and the House to announce that.
In its recommendations the Committee also asked the Government to look at measures to close the gender pensions gap, which is something we can all agree on. My Department regularly monitors the contribution and participation rates by gender and regularly publishes the data in our workplace pension participation and savings trends publications. As discussed, I want to take that one step further and begin monitoring and reporting on the issue regularly. Although many factors create inequality in pension outcomes, most notably the gender pay gap, I have started working with key stakeholders and colleagues across Government to create a framework to understand the challenge and also to produce a definition of the gender pensions gap.
Agreeing a definition, as discussed by many Members today, is a crucial first step. That will allow us to agree a suitable metric to monitor progress and begin reporting on the issue. Again, I need collective agreement before I can say more, but I will come back to the Committee when I have a timeline for that.
Sir Stephen Timms
I welcome what the Minister has just said. Does she envisage annual reporting? Is that the sort of frequency she has in mind for monitoring the size of the gender pensions gap?
Laura Trott
I think annual reporting would make sense, but this is something that we need to look into further. I will come back to the right hon. Gentleman and his Committee.
The hon. Member for Glasgow East spoke about the gender pensions gap. We have seen progress in women’s participation, particularly in automatic enrolment, where they are now slightly ahead of men, but I agree that we need to see further work on the issue. I intend to drive that forward.
I turn to measures for the self-employed. When I started this role, I found it striking how low pension savings were among the self-employed. As the right hon. Member for East Ham is aware, the success of AE is down to the employer enrolling the member, which is clearly something that the self-employed do not have. Nest Insight has recently published the results of its trials on behavioural messaging and savings mechanisms on financial digital platforms and money management apps, to test the role of tech-based nudges and the value of flexible savings.
My intention is to make retirement savings easier for the self-employed. To do that, I want to better understand the touchpoints through which the self-employed engage with the Government, which will be the most effective at encouraging them to save into a pension pot. So far, the most obvious point is the tax system. We have begun work with the UK trade body for business software developers to help us better understand the software market and explore the opportunities, both current and new, to support self-employed people to save for their retirement. This includes scoping the feasibility of building and testing retirement savings solutions with incompatible software used by the self-employed to manage their money.
We are also keen to explore and test hybrid saving vehicles that combine accessible and illiquid savings, which could preserve some control for individuals in managing their short-term finances alongside saving for retirement. The next stage of trialling will also build on the evidence from the work with HMRC to test the capacity of nudges to pension guidance systems installed within the existing assessment system, with a view to encouraging the self-employed to start saving. The Government have no intention to make automatic deductions for the self-employed via the making tax digital system, and we agree with my hon. Friend the Member for Torbay (Kevin Foster) that although we welcome all ideas for boosting self-employed pension savings, we do not think that mixing them with the national insurance system is workable.
Many Members mentioned the gig economy, and we are continuing to work with the Pensions Regulator and BEIS on this complex issue. As the right hon. Member for East Ham outlined, the Department’s view is that many gig economy workers are already eligible for automatic enrolment, including those on fixed-term or zero-hours contracts and agency workers. I heard what he said about the guidance produced by BEIS, and I will feed that back to that Department.
Sir Stephen Timms
I am grateful to the Minister for giving way again. I hope she is right and the legal position is as she said, but delivering enforcement clearly is not happening at the moment. Does she recognise that the Pensions Regulator needs more powers in order to do the job that she is saying it should be doing already?
Laura Trott
I understand and respect the right hon. Gentleman’s concerns, and I will be having further meetings with the Pensions Regulator about this issue. I look forward to discussing the outcomes of those when I appear in front of his Committee.
Nigel Mills
Would the Minister consider setting a target for the number of self-employed people who are regularly saving into a pension scheme by a certain date? I think the rate is currently around 16%. If we could get that up to the 48% it was at 20 years ago, that would be a dramatic improvement and would show whether the efforts to encourage people to save are working. Does she accept that targets are the only way to really drive change?
Laura Trott
I think what we need to do is set out a plan. I accept that when we look at the various mechanisms that I have outlined today, we should outline the impact that we think they should have. I commit to go away and have a look at that.
My hon. Friend the Member for Torbay asked what the Department is doing to develop sectoral pension schemes and whether they can be made available for gig economy employers. Collective defined contribution schemes have the potential to transform the UK pensions landscape. He will know that we introduced legislation to allow them for single employers last year, and we are currently consulting on multi-employers. They are really exciting and could be a way forward in this space.
I am conscious of time; I will obviously write to hon. Members to cover anything I do not get to. The Work and Pensions Committee is right to raise concerns about ensuring pensions adequacy. The shift from the promise of retirement income through defined benefit to defined contribution places responsibility on the saver to ensure they have the outcome they want, but I do not think there is widespread understanding of that among the general public. Personal circumstances obviously dictate what individuals consider an adequate level for retirement savings. It is my role as the Pensions Minister to enable people to save adequately, as well as to ensure pension-maximising returns on their savings. The key to that is empowering savers to take control of their financial future. The introduction of simple annual statements, the midlife MOT and the pensions dashboard will make pensions more understandable to the saver and empower them to take control of their retirement outcomes.
My hon. Friend the Member for Amber Valley (Nigel Mills) was entirely right that the pensions dashboard will be crucial to that. We expect to see on the dashboard an understanding of what current savings will lead to as retirement income. What he said about comparing that to what others have was really interesting, and I will take that away.
Gareth Davies
There has been a lot of discussion today about the adequacy of the amount saved, but no discussion of what the investments are made in. The UK has one of the lowest levels of investment in illiquid assets—private equity, venture capital and infrastructure. What does the Minister think we need to do to encourage a greater diversity of investment so that our pensioners have greater returns?
Laura Trott
My hon. Friend makes a typically excellent point. He is right that we have a lower investment in illiquids than many of our European counterparts. We are at 7%, and they are at 15% or 16%. Last week, I announced a change in regulations, which I believe will come to the House in around March. It will mean that the performance charges can be passed on for the first time, which will hopefully take away a barrier to investment in those types of asset. It is of course for the pension trustees to make investments in the best interest of pension savers, but it is important that we do not put any barriers in the way of that. My hon. Friends the Members for Grantham and Stamford (Gareth Davies) and for Amber Valley are right that we need to focus on returns. If we are going to deal with adequacy, we need to ensure that investments in pension schemes return the maximum amount that they can for savers. Illiquids are part of the story in making that happen.
Matt Rodda
I was lucky to enjoy a very interesting visit to a solar farm with the Minister’s predecessor, the hon. Member for Hexham (Guy Opperman). One of the issues there—this relates to the point made by the hon. Member for Grantham and Stamford (Gareth Davies)—is that the obstacles to pension funds investing in illiquids are quite considerable. Does the Minister agree that there is an issue with work across Government on that matter? The delays in that case were to do with electricity connectivity to the site, and there may be other similar delays that are holding pension funds back from investing in illiquids in the UK.
Laura Trott
If there is a specific issue with that, I am of course happy to talk to the hon. Gentleman about that separately.
I want to give the right hon. Member for East Ham time at the end to sum up, so I will try to get through the rest of my speech quite quickly. On the generation X issue, we have an issue with the people who fell into the gap between the mid-1990s and 2010, when auto-enrolment was introduced. I praise the work of the Work and Pensions Committee, but I hope the right hon. Gentleman and the hon. Member for Reading East (Matt Rodda) would accept that not enough was done between 1997 and 2010. I cannot wave a magic wand and make that right, but I can raise awareness through pension dashboards and help boost returns through value for money, as discussed. In addition, the state pension has been boosted significantly under this Government.
I thank the Committee for all its work on the stronger nudge. It is important to recognise, as my hon. Friends the Members for Amber Valley and for North Norfolk (Duncan Baker), and the hon. Member for Glasgow East (David Linden), have done, that Pension Wise is consistently given very high feedback. About 47% of pots in 2021-22 were accessed for the first time with Pension Wise guidance. It is important to look at the amounts. If the pot is very small, say £100, it is potentially less valuable to have a Pension Wise appointment, than it would be for a pot of multiple thousands. I note that 73% of pots larger than £100,000 were accessed using Pension Wise guidance. It is important to look at that graduation.
Matt Rodda
I thank the Minister for giving way again. Does she agree that it is important for people with very modest pension pots to get access to high-quality advice? They are financially vulnerable in some cases. There have been instances of people approaching retirement taking their pension early, when that is not necessarily in their best long-term interests.
Laura Trott
It is absolutely the case that people who want or need guidance should get it. As I was coming to, we are seeing a positive impact with stronger nudge, which we should continue to evaluate. I am conscious of time, so I will wrap up. It is vital that we put pension savers at the heart of everything we do. I am grateful for the comprehensive and thoughtful discussion today, which I look forward to continuing in future.
Sir Stephen Timms
It has been a useful debate, and I express my thanks to the Backbench Business Committee for scheduling it. There is no dispute that we need people to save more towards their pensions—that was accepted by the Minister in her speech—but we do need to get a move on in making it happen. We are certainly not demanding that minimum auto-enrolment contributions ought to be raised now, but they will have to be raised, and the Government should draw up and publish a plan for when that will happen, and build a consensus around it.
The Minister said she could not wave a magic wand. Nobody is asking her to wave a magic wand, but we are asking her to get a move on and bring forward the plan, so that people know what will happen in two, five or 10 years. The longer we delay, the larger the numbers will be of people who suffer a terrible shock when they reach retirement, start drawing their retirement income and discover that it is way below what they expected and what they need.
I am pleased to hear the Minister confirm that the Government are committed to implementing the recommendations of the 2017 review. I assume she means by the mid-2020s, as has repeatedly been said. We look forward to hearing soon how that will be achieved. I also welcome what she said about monitoring the gender pensions gap. I welcome the prospect of annual Government reporting on that subject. I hope she is able to secure the cross-Government agreement she needs to deliver that.
The hon. Members for Amber Valley (Nigel Mills), for North Norfolk (Duncan Baker) and for Glasgow East (David Linden) all talked about the case for at least trying out automatic enrolment into an appointment with Pension Wise. As we have heard, it is an excellent service. The feedback from people who use it is good, but take-up remains lamentably low.
When the pension freedoms were introduced in the middle of the previous decade, the talk was of a guidance guarantee. That is what we were told was going to be provided—a guarantee. What came of that was the Pension Wise service, which is taken up by a very small proportion of people. It is a good service, but taken up by a small proportion. We need more effort to be made to promote that. The Committee has repeatedly said that it is worth trying out automatic enrolment into a Pension Wise appointment for people who reach that stage.
My final point relates to the comment by the hon. Member for Amber Valley. He referred to the scheme suggested in the Committee’s report for auto-enrolment of self-employed people. The proposition would be to increase national insurance contributions for self-employed people that would allow them to direct their additional payment into a pension, alongside a matching contribution from themselves. That would replicate the attractions of auto-enrolment for self-employed people. The Minister rejected that proposition, but we need to do something. We simply cannot carry on with five sixths of self-employed people not saving for retirement. We think that proposition is well worth pursuing, and I hope the Minister will take another look at it.
Question put and agreed to.
Resolved,
That this House has considered the matter of saving for later life.
Bolton High Street Redevelopment
(1 year, 9 months ago)
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Yasmin Qureshi (Bolton South East) (Lab)
I beg to move,
That this House has considered Government support for the proposed redevelopment of Bolton’s High Street.
It is a pleasure to serve under your chairmanship, Mr Davies. I hope that while short, this is not an insignificant debate on the future of the town I am proud to represent.
Bolton South East is the 38th most deprived constituency in the United Kingdom. To say we need Government investment in our town would be an understatement. I invite anyone here to go to the town centre—I have invited the Secretary of State to do so and extend the same invitation to the Minister here today—to see first-hand the deprivation and lack of opportunity. That is the reality and I do not say that lightly. This is not about talking down Bolton or even criticising the council, the Government or the people. It is about getting a fair deal for my town to support good jobs and good businesses and make it a great place to live, work and shop. That is not the reality and frankly, we are not getting a fair deal from the Government. Instead, the reality is boarded-up shop fronts, derelict properties and more rental signs than we could possibly imagine.
Bolton used to have many fabulous independent shops and traders, and the high street was genuinely a great place to spend time. However, economic pressures and the changing world have meant that, naturally, many of those businesses have taken a hit. It is not just independent businesses that find it tough; even large chains are taking drastic action that is hitting our town. We just recently learned that Marks & Spencer—an anchor business and a major high street employer—is to shut its doors for good. Not only will that mean a redundancy process and staff livelihoods put at risk, but another major business has left our town centre because it is no longer a viable place to do business. That follows a range of other huge stores, such as Argos, HMV and Debenhams, which have left vacancies in our high street. Put simply, that can make the high street a miserable place to walk down at times. We need to see change and we need support for that to happen.
The council’s plan, while not perfect, could have been the start of a real regeneration, bringing together the Government, the council, businesses and more with a view to making Bolton one of the best places to socialise or start a business. Party politics aside, surely the levelling-up fund and mission must be about addressing regional imbalances and providing Government support to areas that need it the most. That is the manifesto pledge the Prime Minister and the entire party stood on. Can the Minister therefore outline exactly what levelling up means, both as the individual responsible for setting the policy and as regards her Government’s wider agenda?
I am also perplexed about the funding arrangement, to be frank. As I noted at the start of this speech, Bolton’s levels of deprivation are stark. Our unemployment levels are almost double those of the region and the national average. Almost 50% of children live in poverty. We have a housing crisis, and as a borough we are in economic decline according to all recent data. Ours was once a strong manufacturing industry, and we have huge brownfield mills that now sit empty and derelict. There is so much potential for not just the high street but the whole town, and levelling-up support could provide the impetus we need.
In the first round of levelling up, Bolton’s bid was successful, but its second was unsuccessful. That was because it was apparently submitted late by the Conservative council that runs Bolton. We then made another bid. With those facts in mind, can the Minister outline to me the wider formula behind the levelling-up award? I would like to know, as would many in my constituency, why exactly Bolton was not eligible for the bid to redevelop its high street.
Bolton’s industrial history runs deep in our town. Spinning mills developed into a booming cotton industry, which grew to dominate Bolton’s local economy. Naturally, that has since subsided as our economy developed and time passed, but the remnants remain. In and around out town centre we have large former mills that stand empty and unused. In my view, these pose the best opportunity to create mixed-use properties: homes for young families; a place for businesses to start and grow; and an urban park to create social spaces in a very limited area. I appreciate that this is slightly leftfield and specific, but what consideration has the Minister’s Department given to the opportunities to support the council, businesses and individuals to retrofit those buildings for mixed use?
Turning now to wider regeneration, I will discuss the role of the cultural and night-life economies. Our fantastic Octagon Theatre is a recipient of Arts Council funding, and does a great job. It is a living-wage employer, it produces great shows and it has become a mainstay in our town centre. However, a recent report revealed that the nearby Oldham Coliseum will close its doors after a 100% cut to its funding. Two constituencies in London have 20 projects funded to the tune of £10 million. Apparently, in the whole of Bolton, the largest town in the United Kingdom, there is only one eligible venue worthy of funding. What is more, in the remaining 24 constituencies of Greater Manchester, outside of the city, there are just 21 funded projects. In summary, that is less than one project per constituency, and yet just two London constituencies received 20 grants.
There is no levelling up if it is not practiced at every level. There appears to be an inequity perpetrated here that runs contrary to the levelling-up agenda. Can the Minister outline what steps her Department is taking to push forward a plan for levelling up across all levels of Government, each Department and arms-length bodies, as well as encouraging other sectors?
I am acutely aware of the role the night-time economy plays in Bolton’s local ecosystem, providing jobs, increasing revenue and adding to our local culture. It is particularly important for students and young people in Bolton, as the town is home to a university and various colleges. I recently met with the night-time adviser for Greater Manchester Combined Authority, Sacha Lord, to discuss how we can introduce a best-practice model of nightlife in Bolton.
For our night-time economy to flourish we need to make it safe for customers to enjoy a night out and socialise without fear of harm to themselves or their friends. Bolton’s pilot safety haven scheme will go a long way towards setting the standards for this when it is launched in two months. It will give people a place to rest, sober up, charge their phone, and access paramedics or mental health support, if they are experiencing an anxiety attack or a depressive episode. It is a preventive measure that means that people do not have to go to A&E, saving the police and paramedics money, therefore providing economic as well as human benefits.
This vibrant night-time economy plays a great part in regeneration, and there are numerous examples in other Greater Manchester boroughs. Altrincham, in Greater Manchester, went from being rated one of the worst high streets in Britain to being one of most desirable places to eat, drink and socialise; Radcliffe Market, not far from us, is becoming the centrepiece of the town there; and Prestwich Village is a vibrant spot to socialise. In Bolton, we need to modernise our night-time economy, so that independent businesses and bars, such as Northern Monkey in my constituency, can grow and support the growth of our high street.
We have an annual food festival, which is now the largest in the United Kingdom, and our town is home to the European Ironman. However, as these are annual events, they are not enough. We need further assistance to develop our town centre and high street. What consideration has the Minister’s Department given to the role of night-time venues, bars, clubs and pubs in the regeneration of the high street, not only in Bolton but throughout Britain? Has the Minister had conversations with her counterparts in the Department for Business, Energy and Industrial Strategy about that?
I appreciate that I have given the Minister much to ponder and reflect upon. I will wrap up shortly, but I must reiterate the grave situation facing Bolton’s high street. We needed that levelling-up funding, which was to build a conference hotel and other facilities. It was a lifeline for our town. Over the last 13 years, since 2010, we have had £250 million in cuts to our council, which have affected the people of Bolton. That £19-million fund would have been a lifeline for our town, yet some of the richest boroughs and constituencies in the country, such as the Prime Minister’s constituency, were given £20 million from the levelling-up fund, leaving us to wonder what levelling up means in the Government’s eyes.
It is interesting that the last two Conservative party general election launches have been in Bolton, and promises were made. However, I am sorry to say that none of the promises made to my constituents have been kept, and people in my constituency are living with the repercussions.
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Dehenna Davison)
It is a great pleasure to serve under your chairmanship, Mr Davies, I think for the first time since I became a Minister. I thank the hon. Member for Bolton South East (Yasmin Qureshi) for securing this important debate. As elected Members, we show real passion for wanting our communities and our areas to be the best they can possibly be, and debates such this one are important in raising both the successes and some of the challenges that our local areas face. I am grateful to her for articulating powerfully the case for further investment in Bolton’s high street and in the town’s wider economy.
As the hon. Lady highlighted, Bolton has many strengths and assets, whether historical architecture or dynamic businesses based in the town centre and surrounding district centres of Farnworth, Little Lever, Westhoughton and Horwich. The town also hosts the famous Ironman UK race and the Bolton food and drink festival. She invited me to go and visit her constituency; I would love to take her up on that, although probably not to do the Ironman, as I am not sure I am fit enough. She mentioned the Northern Monkey bar, which sounds a little bit more up my street, so maybe we could tie that in.
While her constituency has many strengths, the hon. Lady is right to say that Bolton town centre is facing significant challenges. I think we can agree that those challenges have only been accelerated by the covid pandemic, through changing retail demand, more shoppers moving online and, as she highlighted, the loss of anchor stores, including Debenhams and Marks & Spencer. She also noted that her constituency is among the most deprived places in England. According to the index of multiple deprivation, Bolton is the 17th lowest rated local authority for crime, 44th for income and 42nd for employment. The Government recognise that towns such as Bolton are having to adapt quickly to the post-pandemic world and the rising cost of living, which is why in recent years we have sought to breathe life into such communities with a series of transformational funds that are specifically designed to spur growth, job creation and renewal in the places where that is most needed.
Through local growth and levelling-up funding, we have invested over £180 million in Bolton’s economy since 2014. As the hon. Lady knows, that included £20 million in her constituency from the first round of the levelling-up fund, which is creating a new highly advanced vocational and professional training facility, the Bolton College of Medical Sciences. That will mean that roughly 3,000 students a year, including 1,000 apprentices, will receive high-quality tuition and learn skills that will stay with them for the rest of their lives. It will also contribute to the tackling of local health inequalities.
The hon. Lady asked what levelling up means to me and how I define it. It is straightforward, which makes it much more difficult. It is straightforward in the sense that levelling up is about ensuring that any young person, wherever they grow up in the UK, has access to the same fantastic opportunities—that is the simple version. The more complicated answer is that that means there is a need for intergovernmental emphasis; to ensure equal access to opportunity, we must look at healthcare, as we have touched on in relation to the college; transport; job opportunities; the potential for growth; and of course education. She asked what the Government, and our Department specifically, are doing. There are a number of things, some of which I will come on to, but the most specific and relevant is the creation of an inter-ministerial group on levelling up, chaired by our Secretary of State, to look at what every Department is doing to ensure that levelling up is being prioritised in their activity. That is just one thing, but there are plenty more, as I will touch on with regard to devolution.
Bolton town centre is also benefiting from £22.8 million in investment from our towns fund. I am grateful to the hon. Lady for all her work on the town board to oversee that vital work, which includes projects such as the redevelopment of Bolton Central Library, Museum and Archive, which will improve the leisure and learning offer for local people; the improvements to Bolton’s historic market, as she mentioned, which will maintain a much-loved community asset and drive footfall in the town centre, which is crucial; and the innovative new Wellsprings business hub for the creative and digital sector, which will provide real opportunities for local businesses and entrepreneurs. That is backed by £6.3 million of Government funding, which will create a greener, more connected town centre through the planting of trees and shrubs, improvements to public spaces, and new cycle routes and walkways—a real game changer not just for the high street but for the town’s economy as a whole.
As the hon. Lady mentioned, everyone involved in Bolton’s application for round 2 of the levelling-up fund will have been disappointed by the result. I know that she was one of the biggest backers of the Bolton town centre north regeneration project, and my hon. Friend the Member for Bolton West (Chris Green) also threw his full support behind the De Havilland Way corridor scheme, which is a priority project for the region. There was an overwhelming response to the second round of the fund—over 500 bids, totalling well over £8 billion. In contrast, in the first round we received 300 bids, which was still oversubscribed, in the context of having just £2.1 billion to allocate. The hon. Lady will understand that we knew that a lot of places would be disappointed. At this stage, it would not be appropriate to comment on specific applications, but I know that officials in my Department and in the Department for Transport are currently feeding back on unsuccessful bids. Full written feedback will come imminently, and I hope that that will help explain the rationale behind the decision and help with improvements to the bid for any future funding rounds.
The hon. Lady asked how applications were judged. As in the first round, funding was targeted in areas most in need according to the index of priority places, which takes into account the need to address issues such as under-regeneration, low productivity and poor connectivity. Each bid was assessed by officials from the Department for Levelling Up, Housing and Communities against the published assessment criteria, and officials then came up with a shortlist based on the highest scores against those criteria. To ensure that there was a fair spread of bids across the UK, funding decisions were then made by Ministers, based on the assessment score but also taking into account factors such as geographic spread and past investments. A place’s relative need is also baked into the process. In this round, 66% of investment went to category 1 places.
The second round has predominantly gone to areas in Great Britain that have not received funding before through the levelling-up fund, in order to ensure that investment reaches as many places as possible across rounds 1 and 2. I want to emphasise a point that we definitely should not lose sight of: there will be a further round of the levelling-up fund. More details on that will be announced shortly.
It is worth stressing, too, that the levelling-up fund is by no means the only investment from my Department in the region. More than £13 million from our future high streets fund has been spent on improving the nearby Farnworth town centre. As part of our £1 billion investment in Greater Manchester through the city region sustainable transport settlement, we are improving bus services between Bolton and Wigan for a faster and more frequent service that residents can rely on. All of that is accompanied by better cycling and walking routes in both Bolton and Farnworth town centres.
We are therefore doing a lot of investment, but despite those many investments and the progress that we are seeing together, no one can deny that Bolton will still need significant support over the coming weeks and months as we seek to build a brighter and more prosperous future for the town. Crucial to that mission is recognising that Government investment alone, however great, can only go so far. We also need significant reform to the way in which we support people and places in the long term, recognising that the current system of funding local councils needs improvement.
That is exactly why we are pressing ahead with the Levelling-up and Regeneration Bill to revolutionise how Government, the private sector and charities fund and invest in communities. The Bill also liberates councils to hold high street rental auctions so that landlords are encouraged to put empty buildings to good use. It makes the temporary freedoms around al fresco dining permanent, so that we can create more buzzing, vibrant high streets. It makes it much easier for councils such as Bolton’s to issue compulsory purchase orders so that they can repurpose boarded-up shops and derelict sites. All those changes are accompanied by a series of common-sense reforms that mean that no council has to pay over the odds in “hope value” to landowners when they issue compulsory purchase orders. That is a small change but it will deliver big savings for the public purse.
The hon. Member for Bolton South East asked what cross-departmental work is happening around levelling up. One of the best areas where we can demonstrate that is the devolution agenda. Empowering local leaders through our White Paper devolution commitments and regenerating towns such as Bolton are fundamental to our levelling-up plans in the north-west. I am really pleased to see that our negotiations on a new, deeper devolution deal with Greater Manchester, focused on delivering new transport, skills, housing and fiscal powers, are progressing well. Indeed, the reforms to the bus network are a direct result of that deal. We want to go even further, delivering a London-style integrated transport system to further enhance the Bee Network and deliver an accessible and integrated multimodal transport system that better connects residents and businesses in Bolton with the Greater Manchester region.
This is not just about businesses and the economy; we also want the trailblazer deal to provide the combined authority with the ability to drive housing supply and improve the quality of existing stock. The hon. Lady may have seen that, in his recent speech to the Convention of the North, my right hon. Friend the Secretary of State announced £30 million across Greater Manchester and the west midlands, to support improvements to social housing. In the same speech, the Secretary of State made it clear that crime and antisocial behaviour were more likely to flourish in communities that have suffered neglect and underinvestment. That view is clearly backed by public opinion. At the end of 2021, More in Common and Public First polled more than 4,000 people and found that, for much of the public, tackling antisocial behaviour is the prerequisite to levelling up. To quote one of their survey respondents in Oldham, a town less than an hour’s drive from the hon. Lady’s constituency:
“What’s the point in making the area look nice if it’s just going to end up getting vandalised in a couple of months”?
That, in a nutshell, is the problem.
That is why we will shortly publish a comprehensive action plan on antisocial behaviour, one that means stronger enforcement, tougher penalties for those who damage public property and, of course, more activities to help keep young people out of trouble. That will be accompanied by a renewed effort to tackle public drug taking, while making our streets safer overall, to prevent the intimidation and harassment of women and girls—something on which the hon. Lady has been a passionate campaigner. On the point about women’s safety, nightclubs and the use of spiking, which I know is a huge concern for people right across the House, we are crystal clear that anyone found committing such an appalling crime will face the full force of the law. On its own, the crime can carry a sentence of up to 10 years in prison. The Government have worked closely with the police and the Crown Prosecution Service to look at existing legislation, concluding that there is no gap in the law that a new spiking offence would fill, but we can all agree there is more to do around raising awareness of spiking and how to report it.
That is why the Government will undertake a targeted consultation on amending statutory licensing guidance, which could include specific reference to spiking—a definition of it, how to recognise it and how to report it to the police. It is worth noting, too, that in April last year, the Government reclassified so-called date rape drugs—including GHB and GBL—which historically have been associated with drink spiking. That measure, and funding through the safety of women at night fund and the safer streets fund, is supporting local initiatives to help to prevent this heinous crime. Our report on the prevalence and nature of spiking, as well as the action we are taking to tackle it, is due to be published by the end of April.
We do not want to talk about nightlife only in terms of the dangers and fears, because for many of us having decent nightlife in our town centres is one of the things that makes life so joyful. The hon. Lady spoke about support for night-time venues, particularly pubs. I am waiting for an invite to Northern Monkey, which sounds like a class venue. I am looking forward to visiting it.
Throughout covid, we ensured that additional measures were put in place specifically to help hospitality businesses, which was crucial because they faced the brunt of covid. There are still additional measures on business rates to try to support those venues, but if the hon. Lady has suggestions about what more could be done, I would appreciate her feeding those back to us.
I hope that my speech has shown the depth and breadth of our commitment to levelling up in Bolton—in infrastructure, public services, regenerating boarded-up shops on the high street, and tackling crime and antisocial behaviour. In response to the hon. Lady’s broader points about properly supporting and funding local government with its own capital programmes that generate real economic and social value, I have set out our ambitions with respect to devolution and our Levelling-up and Regeneration Bill for empowering local authorities and ensuring that councils and local leaders have the tools, resources and funding they need to regenerate, invest in their high streets and level up communities.
Yasmin Qureshi
The Minister talks about the fact that local authorities must have the powers and abilities to do that, but she will recognise that over the past 12 years, Bolton Council has had £250 million of cuts. That does not allow it to do the things it wants to do. Specifically, what additional resources are we going to get to enable us to do that?
Dehenna Davison
The hon. Lady will know that the local government finance settlement has been issued for the coming year, and investment in Bolton is receiving quite a substantial increase, although that is only part of the picture. I have touched on devolution, whereby Greater Manchester Combined Authority has received a swathe of public investment, as well as additional funds and powers, to tackle some of the core issues that Bolton and Greater Manchester face.
Under our new trailblazer devolution deal, we are looking at moving that even further, giving the combined authority the powers it needs to deliver, and with that additional investment. Obviously, I cannot provide too many more details at the moment, but I urge the hon. Lady to watch this space. I hope she will be pleased with the package that we put forward as part of the trailblazer deal.
Broadly, I have outlined our vision for Bolton, and indeed places across the UK that have been overlooked and where there has been under-investment for far too long. As levelling-up Minister, I am fully committed to working with the hon. Lady and Members from all parts of the House to make that vision a reality.
Question put and agreed to.
Cammell Laird Workers Imprisoned in 1984
(1 year, 9 months ago)
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Gareth Thomas (Harrow West) (Lab/Co-op)
I beg to move,
That this House has considered the potential merits of a public inquiry into Cammell Laird workers imprisoned in 1984.
I declare at the outset that I am a member of the GMB trade union. I note the unfortunate absence of my hon. Friend the Member for Birkenhead (Mick Whitley), who has campaigned on this topic consistently since his election to the House, and whose brother was one of the 37. He had hoped to take part in this debate, but unfortunately he has tested positive for covid and therefore cannot be here.
In October 1984, 37 trade unionists who had fought to stop the closure of the Cammell Laird shipyard in Birkenhead ended their occupation of a gas rig in the shipyard and were promptly arrested and locked up in Walton jail, Merseyside’s maximum security prison. Their supposed crime was to have been found in breach of a contempt of court hearing following an earlier judicial hearing; as they had been sacked, they were guilty of trespassing.
No other industrial action resulted in so many men being sent to prison. The prison sentence of 30 days was grossly unfair. By the time they were released, the 37 had been sacked. They lost redundancy pay, and those entitled to pension payments lost those too. Officials from GMB believe that one of the men may have lost out on £120,000 or more.
The men were locked up alongside murderers and criminals. They were blacklisted and struggled to find work afterwards. In a democracy, belonging to a trade union and taking industrial action should not lead to the risk of imprisonment. Trade unionists in 1984—and indeed those of us who are trade unionists now—are not above the law, but the Cammell Laird 37 were part of an official national dispute, and they enabled essential maintenance to take place on the destroyer being built at the time. They had impressive records of employment service and were clearly patriotic. The decision to imprison them was completely disproportionate.
There have been many attempts to highlight the injustice of what happened to the 37. They and their families, supported by their trade union, GMB, have campaigned for almost 40 years for this injustice to be made right.
Margaret Greenwood (Wirral West) (Lab)
I congratulate my hon. Friend on securing this debate, and I apologise for not being able to stay for all of it. As he said, my hon. Friend the Member for Birkenhead (Mick Whitley) has campaigned tirelessly on this issue. He tabled an early-day motion in 2021, in which he highlighted, among other things, the immense suffering and economic hardship that the imprisoned workers endured as a result of their month-long detention, and the blacklisting and loss of redundancy and pension rights that followed that imprisonment. Does my hon. Friend agree that any public inquiry should fully take into account such practices?
Gareth Thomas
My hon. Friend is absolutely right. She and my hon. Friend the Member for Birkenhead are two of the many MPs who have already raised the case of the 37.
Strikingly, in response to one of the questions tabled by my hon. Friend the Member for Birkenhead in 2021, the then Justice Minister, the right hon. Member for Croydon South (Chris Philp), argued that if there were concerns about the imprisonment of the 37, the case should be referred to the Criminal Cases Review Commission. The problem with that answer is that the men were sent to prison for contempt of court—a civil matter. As I understand it, under sections 9 to 12B of the Criminal Appeal Act 1995, which lists the type of cases the Criminal Cases Review Commission has the power to review, there is no mention of decisions of the High Court to commit someone to prison for contempt of court.
Either a public inquiry is needed to review the treatment of the 37—that is the purpose of this debate—or the case should be reviewed by the Criminal Cases Review Commission, with all the investigative powers it has at its disposal. If so, the law will need to be changed to bring contempt cases resulting in prison within scope, because the Cammell Laird 37 will have little chance of justice until one or other of those options happens.
Jim Shannon (Strangford) (DUP)
I commend the hon. Gentleman for securing this debate and, with the hon. Member for Birkenhead (Mick Whitley), who is absent, for his fight for justice. Does he agree that these miscarriages of justice, which we can simply look at historically, are for those men and their families life-changing and altering? For them to understand that the lessons learned from their story can result in legislative changes can provide closure for families that went through it and provide protection for other families in future.
Gareth Thomas
I very much agree with that point; I am grateful to the hon. Gentleman for his support for the case that others and I will make.
In the latter part of 1984, across Britain’s industrial heartlands at the time, huge numbers of jobs in nationalised industries, including steel and coal, were axed by Margaret Thatcher’s Government, with a casual disregard for what would come next for those made redundant and their devastated communities. In shipbuilding alone, a hugely important source of jobs across the UK at the time, British Shipbuilders went from employing 62,000 workers in 1982 to just 5,000 five years later.
It is clear, from papers released by the National Archives and from Margaret Thatcher’s private papers, that Ministers were determined to privatise the building of warships, reduce the number of shipbuilding yards and sell off the remainder of the yards. Those records confirm a central belief of the 37 when they went on strike, that Ministers wanted to close Cammell Laird. They confirm that Norman Tebbit, then Secretary of State, and Norman Lamont, then Minister of State in the Department for Trade and Industry, wanted to close Cammell Laird, potentially as early as the end of the year, when the two ships then being built were expected to be completed.
We know that, because what emerges from these relatively recently declassified records of the time, is how Cammell Laird’s future became the centrepiece of a fierce Whitehall battle between the majority of Margaret Thatcher’s Cabinet, hellbent on privatisation at any cost, and a far smaller group worried about the future of Merseyside if Cammell Laird closed. At the time, Cammell Laird was one of Britain’s most important shipyards. In existence for more than 150 years, it was a byword for engineering and shipbuilding skill of the highest order.
Warships built at Cammell Laird, such as Ark Royal, helped to protect our shores during two world wars, while other ships built there delivered huge wealth from across the globe to Britain’s shores. The 37 had helped build ships crucial to our efforts to win back the Falklands and later to take on Saddam Hussein. Short of active military service, there surely are not many more patriotic things one can do for one’s country than help build the means to defend it.
Word began to leak out in the spring and early summer of 1984 that Cammell Laird might be at risk of closure. Ministers at the time in the House of Commons denied that any major shipyard closures were being contemplated.
“I know of no such proposal.”—[Official Report, 27 June 1984; Vol. 62, c. 1095.]
So said Norman Lamont, then Minister of State at the Department for Trade and Industry. That was not quite the full picture. The Ministry of Defence had tendered for contracts to build two Type 42 destroyers in late 1983. Cammell Laird’s bid had met the quality threshold and apparently offered the best price. Over the course of nine months, from April 1984 to January 1985, Norman Tebbit successfully persuaded Margaret Thatcher and the rest of her Cabinet to delay Cammell Laird being awarded a contract to build at least one of the planned new Royal Navy destroyers.
The then Secretary of State for Defence, Michael Heseltine, recognising the profound economic and social consequences for Merseyside if Cammell Laird were to close, wanted to place orders for one, possibly two, Royal Navy Type 22 frigates with Cammell Laird, which would have secured the yard’s immediate future, and prevented even more job losses. The records released by the National Archives and the Margaret Thatcher Foundation detail how Norman Tebbit and the Department for Trade and Industry strongly objected, arguing, according to papers at the time now in the National Archives:
“If Cammell Laird did remain open, overcapacity would remain in shipbuilding with gratuitous risk to the successful privatisation.”
Commitments had been made that Cammell Laird would be able to bid and would have “a strong case” for building Type 22 frigates, as far as back as December 1982, by the then Secretary of State for Defence, John Nott, in this House. In April 1984, Michael Heseltine, then Secretary of State for Defence, underlined the significance of that commitment, and the impact on Merseyside if that commitment were not honoured and Cammell Laird closed. He particularly underlined the fact that Cammell Laird had won the MOD’s tendering process.
When British Shipbuilders published accounts in July 1984 for the previous year, it noted that Cammell Laird’s warship-building operations were still profitable, making some £3.22 million in surplus. None the less, Norman Tebbit, Margaret Thatcher and a series of Cabinet allies eventually forced the re-tender of the contracts to build these warships, delaying for almost a year the award of a warship-building contract to Cammell Laird. The papers also reveal how Norman Tebbit wanted to spin the decision, to put the blame and responsibility for the closure of Cammell Laird first on the British Shipbuilders Board and crucially, too, on the workforce, whose growing concern about their future they comment on—although they describe that as union militancy and worsening industrial relations.
Andrew Western (Stretford and Urmston) (Lab)
I thank my hon. Friend and congratulate him on securing this important debate. He is making an important contribution around the thrust of Government direction in policy terms in relation to shipyards at this point of time. Does he agree with me that the systematic reduction of the workforce at Cammell Laird from 5,500 in 1977 down to 3,300 in October 1983 and a reduction of another 1,000 in the 12 months thereafter—taking into account the period following the dispute—points to that attempt to undermine British shipbuilding? Is that not why we need this inquiry? Given the fact that, sadly, several of those who were arrested have passed away in the years in between, does that not add to the urgency of the inquiry at this stage?
Gareth Thomas
I absolutely agree with my hon. Friend that there is an urgency to this case. I welcome his support for the points that I am trying to make.
Dawn Butler (Brent Central) (Lab)
My hon. Friend is explaining powerfully that justice delayed is justice denied. We have members of the Cammell Laird 37 with us today in the Public Gallery. Is it not important for anyone watching or listening today that we have justice? It is about time. All the documents should be made public as soon as possible.
Gareth Thomas
I am very grateful to my hon. Friend for her support for this debate. I absolutely agree with her concluding point, which I want to come on to in a little bit.
On balance, it is difficult not to conclude from the papers I have read that a significant group of Ministers in 1984 were so determined to drive through the complete privatisation of British shipbuilders, regardless of the wider economic and social consequences, that they decided that to achieve this, Cammell Laird had to close, and that any employee or union resistance had to be resolutely confronted.
Sir George Howarth (Knowsley) (Lab)
When I was an engineering apprentice in the late 1960s in Liverpool, it was abundantly clear to anyone working in engineering that Cammell Laird was important not only for the reasons stated by my hon. Friend, but also for training engineers, who then went off into other areas of the industry. The case that he is making and the evidence he has referred to are important. He has highlighted two options on how to proceed, but if those are not feasible, would something similar to the Hillsborough inquiry carried out by Bishop James Jones, where all the evidence could be properly reviewed and perhaps point in a different direction, be a potential third option? Perhaps the Minister might consider that in his response.
Gareth Thomas
I am grateful for that intervention by my right hon. Friend, who knows the yard, its environs and its significance much better than I do. His point about a potential third option is very important. Crucially, and as I will come on to, it requires such a third option for full access to the various papers that are still available that relate to the closure.
I turn to the court action in 1984. Not knowing any of the Whitehall battle that was going on, the workforce at Cammell Laird had seen their numbers reducing steadily—the point that my hon. Friend the Member for Stretford and Urmston (Andrew Western) made—through various waves of redundancies, so not surprisingly they took the decision to go on strike from the end of June 1984. Fearing that British Shipbuilders might move the two ships that the yard was working on, so that they could be completed at other yards, several men occupied the gas rig from June 1984.
The only court record that I could find shows that those occupying the rig and picketing the destroyer that was being built were sacked on 23 August 1984. Just days later, in early September 1984, British Shipbuilders was able to begin court action to accuse the men of trespassing and to require them to leave the rig and stop their peaceful picket.
I gently suggest that it is challenging to believe that the sackings and the court action were not directly related. The men, believing—rightly, we now know—that stopping their occupation would make it easier for the yard to close, refused to leave the gas rig, as required by the injunction. British Shipbuilders then went back to court and it appears that the company successfully asked Mr Justice Glidewell on 13 September 1984 to order that the men be arrested and sent to prison for contempt of court, because they had ignored his earlier court order.
The 37 men only got any sort of legal representation, and only then from the Official Solicitor, when the case was appealed at the High Court on 10 October 1984, but the prison instruction was confirmed. The key judges seem to have made little effort to understand the position of the 37. Justice Glidewell, in insisting on prison if the occupation did not end, made a point of suggesting that national security was somehow at risk. There was no one present to challenge that narrative: the men could not turn up without ending their action; and they certainly did not have the expensive lawyers that British Shipbuilders would have been able to call on to put their case.
Lord Lawton, who was the senior judge when the case went to the High Court, had been a member of Oswald Mosley’s British Union of Fascists, had visited Hitler in the 1930s and had been selected to run for Parliament. He does not seem to have considered whether a 30-day prison sentence was proportionate. Given that the occupation of the yard had ended when water supplies ran out and that the men had already been in prison for 10 days by the time that he considered their case, it is even more extraordinary that they were required to complete their full sentence.
There were other contempt cases at the time in other industries, but none of them resulted in prison for those involved who were found in contempt, even where, as with the Cammell Laird 37, they did not co-operate with the judicial authorities. Most striking of all is the case of Arthur Scargill and the executive of the National Union of Mineworkers in the 1984-85 miners’ strike. They, too, were found in contempt of court, yet never went to prison.
There are many instances of unions being fined during this period. However, despite considerable work by the House of Commons Library, to whose researchers I am very grateful, I can find no record of any other group of striking workers being sent to prison for contempt, or indeed any other large group of workers who were sent to prison at all because of a national dispute, except the Shrewsbury 24, whose convictions were rightly overturned recently by the Criminal Cases Review Commission.
So why were the Cammell Laird 37 imprisoned and treated so badly? They had no legal representation of their own; they could not afford the barristers and solicitors who were necessary for them to have a chance of avoiding jail; the Official Solicitor took up their case at appeal, but by then it was too late; and a further appeal to the House of Lords could have happened, but did not.
So who were the 37? Billy Albertina, Eddie Albertina, Francis Albertina, Jimmy Albertina, John Albertina, Jimmy Barton, Christopher Bilsborough, John Brady, Michael Byrne, Thomas Cassidy, Thomas Culshaw, John Dooley, Lol Duffy, Colin Early, Nicholas Fenian, Joe Flynn, Andrew Frazer, Barry Golding, Paul Hennessey, Edward Kenny, Paul Little, Eddie Marnell, Jimmy McCarthy, Anthony McGarry, Philip McKeown, Michael Mooney, Aiden Morley, Sam Morley, Alan Prior, Francis Roach, Stephen Smith, Christopher Thompson, Tommy Webb, Tommy Wilson, Chris Whitley, George Whittaker, and John Wright.
They were, of course, painted as militants, a line that the right does rather like to use a lot. The politics and tactics of the 37 may not have been to everyone’s taste, but their pride in the job they did and their respect for the role that the ships they were building were set to play were never mentioned in court, or in much of the media coverage at the time. Even while they were picketing the destroyer, they were allowing other workers on to carry out essential maintenance, with the leaders of the Cammell Laird 37 intervening to stop others from occupying or going on to the destroyer.
These were working-class men—hard-working, some very skilled. They were not schooled in the law or in high politics, but there is surely something very honest in wanting to defend your community, and, as I understand it, the Cammell Laird yard was certainly fundamental to the economic and social fabric of the Wirral and wider Merseyside community. The men did not stop the eventual closure of the yard, but their actions in helping to publicise what the loss of the yard would mean certainly delayed its closure. Eventually, one of the contracts to build the Type 42 destroyer was finally given to Cammell Laird, saving many jobs for a while longer.
Very few people want to go on strike—a truth that very few Conservatives have been willing to acknowledge down the years—but it is a fundamental right that should be protected. Of course, what links the case of the Cammell Laird 37 to today is that the Conservative party is still trying to criminalise those who want to push for better jobs, a decent living and dignity in their employment. The desperate Strikes (Minimum Service Levels) Bill that Ministers are pushing in an attempt to divert attention from a miserable record of economic mismanagement mirrors the efforts of Ministers back in 1984 to try to avoid public responsibility for the consequences of axing huge numbers of jobs across our industrial heartlands.
The Cammell Laird 37 were brave men. They faced the full wrath of the judicial, media and political opinion of the time; they had the chance to say sorry in court for occupying the yard—in legal language, to purge their contempt—but that would have been apologising for fighting to stop the yard’s closure and save their community. Not one of the 37 did so, even when the mother of some of the men died. Others in the group encouraged those men to say sorry, so that they could leave prison to grieve and say longer goodbyes, but they would not: they were determined to stay, side by side with the others. They made a point of going back to prison after the funeral to show their support and solidarity. They went in together, and they came out together.
The 37 have campaigned with, and through, the GMB to try to find out the full picture as to why they were sent to prison, with a film, a book, and rallies and meetings across the country down the years. They have searched for all sorts of records and made numerous freedom of information requests. Police records from the time, Walton jail records, and full records of the involvement of the official solicitor or Attorney General do not appear to be publicly available; what we can, I think, definitively say is that throughout 1984, decisions about the future of Cammell Laird were being taken at the very highest level of Government. The possible role of government —in its widest sense—in the decisions that led to those men being imprisoned and losing so much should be explored by those whose powers allow full and complete access to any remaining records. The proportionality of sending the men to prison at all, and of keeping them there once the occupation had ended, also merits review.
In the end, this is about 37 men who were sent to prison when no other comparable national dispute, at the time or since, saw a similar outcome. As such, I hope the House will be sympathetic to the case for a public inquiry, a Hillsborough-style inquiry or, indeed, a review by the Criminal Cases Review Commission.
Ian Byrne (Liverpool, West Derby) (Lab)
It is an honour to serve under your chairship, Sir Christopher, and I thank my hon. Friend the Member for Harrow West (Gareth Thomas) for securing this important debate. I declare that I am a proud member of the GMB trade union.
I will start by paying tribute to the 37 Cammell Laird workers and their families—a number of them are here in Parliament today—and all the campaigners who have been fighting for justice for so long. I also pay tribute to my hon. Friend the Member for Birkenhead (Mick Whitley), who I know wanted to be here today, for his tireless campaigning over decades.
I fully back the campaign to secure truth and justice for the 37 Cammell Laird workers who were imprisoned in Walton jail in 1984. Those 37 workers and their families have now suffered the further injustice of almost 40 years in which truth and justice has been denied to them by the state. Sadly, many have passed away in that time. The workers were deliberately targeted to try to break the industrial action they were partaking in to save the shipyard and hundreds of jobs. As part of the state’s attempt to demoralise the workers taking strike action across the country at the same time, we saw the same modus operandi at Shrewsbury and Orgreave, with the state using brutal tactics to break industrial disputes. It then implemented a cover-up to deny the victims the justice they deserve. It is only thanks to the remarkable efforts of campaigners like those in the Chamber today, as well as the likes of Eileen Turnbull and all those involved with the Shrewsbury 24, that that fight for justice was eventually won last year. But those from Cammell Laird and Orgreave are still denied that justice today.
The industrial action at Cammell Laird happened against a backdrop of rapid de-industrialisation by the Thatcher Government. There was a decimation of jobs across Merseyside, where between 1978 and 1981 34,000 manufacturing jobs were lost. I grew up in Liverpool at that time, and it was an absolutely devastating period that we still have not fully recovered from. Remember that the Thatcher Government were contemplating the managed decline of my great city at the same time.
Cammell Laird was a national asset that the Government were preparing for privatisation by halving the workforce. In 1984, 1,000 more planned redundancies were announced and the strike and occupation took place in response. The targeting of trade union members at Cammell Laird was truly despicable and culminated in an injunction seeking to remove strikers occupying the rig, enforced by the police. Then there was the arrest and month’s imprisonment of 37 workers at Walton jail—a category A prison in which they all suffered greatly.
The 37 trade unionists were tried and convicted in their absence. They were denied the opportunity to defend themselves in court and a fair opportunity to clear their names. Once released, the Cammell Laird 37 never worked at the shipyard again. They were blacklisted and they lost their redundancy and pension rights. For standing up for the future of their communities, they were punished by the state, with the effects lasting a lifetime.
I want to read a testimony of Allen Small, who is a good friend. He says,
“In 1984 I was a 19-year-old apprentice at Cammell Laird. Myself and one other apprentice Dave Griffiths refused to cross the picket line and we joined the strike. Dave and I were sacked for refusing to attend work. I struggled for many years to find work. I applied for many jobs and welding courses but was always unsuccessful. Eventually I retrained as an electrician and found work in shop fitting and on building sites in London”—
away from the north west. He continues:
“Unfortunately Dave passed away 10 years ago.”
That shows the devastating impact of standing up for your community and fighting for a trade union.
Truth and justice are still being denied almost 40 years later. In 2014 the European Parliament ruled that the British Government had no basis for the convictions and should apologise and remunerate the 37 pickets. The Government have done nothing to this day. Appallingly, no records that relate to the policing of the dispute, British Shipbuilders’ handling of industrial relations or the Government’s response have been published. That is despite the European Parliament Committee on Petitions calling on the UK Government almost a decade ago to release all relevant papers and information to allow justice for the Laird strikers.
As someone who was at Hillsborough in 1989 and now chairs the all-party parliamentary group on public accountability, I have lived and seen the scale of cover-ups by the British state. It is a shameful history that we have—from the nuclear test veterans to the contaminated blood scandal, from the Birmingham Six to Hillsborough. There are many, many more I could talk about for hours. If we continually have a state and establishment that act with impunity and evade responsibility and accountability for their actions and the consequences of those actions, how do we ensure such injustices will never again be perpetrated?
That is why a Hillsborough law would be so important in ensuring that justice is not an abstract concept for the working class in this country who have been wronged by the state. We should all expect to have that in a functioning, fair and democratic society. That is why the fight to end the injustice seen by the Cammell Laird 37 is so important for the people involved and the country at large. Justice should not be a pipe dream, but a reality.
I close by asking the Minister this. Where is the Government’s apology and acknowledgement that there was no basis for the convictions? Will the Minister agree to a public inquiry with the power to compel disclosure? Anything else is an abdication of leadership and decency by this Government. The campaigners and the people who suffered deserve nothing less.
Ian Lavery (Wansbeck) (Lab)
It is a pleasure to serve under your chairmanship as ever, Sir Christopher. I congratulate my hon. Friend the Member for Harrow West (Gareth Thomas) for bringing this debate to the Chamber this afternoon. I will declare an interest: I am a proud trade unionist—always have been, always will be.
In 1984-85, I was a striking miner. A lot of the things that have already been said resonate with me, my friends, my family and our communities. This is simple; it is about justice for ordinary people. It is important that people are seen to get justice from the state. They need answers. Who was behind this? Who was behind the instructions that ensured that 37 hard-working people were put in jail for contempt of court? It is ludicrous, man! It is unreal to think that could happen to ordinary people who were fighting for employment. That was the charge: fighting for employment. They wanted to keep their jobs, they wanted to put food on the table, they wanted to clothe their kids. Those are not crimes, yet they were put in jail because they fought for that, for heaven’s sake.
It is not acceptable. It is not acceptable no matter which way we look at the situation. It was a severe miscarriage of justice. They were incarcerated for trying to secure the future of their families and their communities. They had not committed a crime and they were put in prison with murderers, armed robbers and rapists just because they wanted to maintain employment.
Of course, it was all about privatisation—the industrial cancer of working people—wasn’t it? They were trying to maintain their standard of living and sustain their economies. There is a lot to be answered. The potential merits of a public inquiry into the imprisonment of Cammell Laird workers? Of course there is potential for an inquiry because many people would not believe that this sort of thing would happen in a free and democratic —or so-called free and democratic—nation such as the UK.
The Shrewsbury 24 have already been mentioned twice by colleagues. It was the first ever national building workers’ strike in 1972. Again, pickets were jailed. In fact, one of them died shortly afterwards as a consequence of being imprisoned. They fought. My hon. Friend the Member for Liverpool, West Derby (Ian Byrne) mentioned Eileen Turnbull. She and her campaign team campaigned vigorously to get these convictions quashed. You know what? Forty-seven years later, it actually happened. On 23 March 2021, the court quashed the convictions against the Shrewsbury pickets. I urge the campaigners and everyone concerned to learn from what has happened in the past. Never give in, because you are on the side of the angels; never give in, because you are right. That needs sorting as quickly as we can. There needs to be a demand for justice.
The consequences of being put in prison for something to do with retaining employment are never getting a job again and being blacklisted. If someone is put in prison, people look at them as if they are something else. I could not imagine ever being in prison. I was in a police cell a number of times during the miners’ strike. That was bad enough. To be locked away from their families and from the people they were seeking to support in the first place is so degrading that I could not begin to think what it might be like.
Margaret Thatcher’s fingerprints are all over this. They were all over the papers during the miners’ strike and it was the same time. As my hon. Friend the Member for Harrow West mentioned, Margaret Thatcher’s name and fingerprints are all over the situation with these 37 lads from Cammell Laird. They need to find out whether that is the case; they need to find out who made the decision. Who deliberately targeted these ordinary people? It happens in the Chamber every other day now. If someone dares to question the Government, they are a militant. If someone is fighting for their job, if they are fighting for wages, terms and conditions, and if they are fighting for health and safety, they are a militant. That is strictly not true—and by the way, I wish there were more militants. I will be perfectly honest. I wish there were. This is the way that ordinary people are being tret.
I believe that people being sent to prison for contempt of court is absolutely unreal and that needs to be looked at. There needs to be some sort of public inquiry, as has been suggested. It has been mentioned that the Hillsborough disaster inquiry took a long time. The Orgreave Truth and Justice Campaign is still campaigning for an inquiry into the policing of the miners’ strike. It has done a fantastic job. I pay credit to the GMB union, by the way, for the campaigning and support it has given to the 37 individuals. It is about time we realised that being in a trade union and standing up for your rights is not a crime. It is about time we realised that being in a trade union and standing up for your community and what is right is not a crime and people should not be castigated for it in any way, shape or form. That is the sad situation we have had with the Cammell Laird 37. It is a serious miscarriage of justice and I strongly urge the Government to think about a potential public inquiry into what happened all those years ago. It is a scar on the lives of the 37, their families and their communities. Sort it out!
Justin Madders (Ellesmere Port and Neston) (Lab)
It is a pleasure to see you in the Chair, Sir Christopher. I pay tribute to my hon. Friend the Member for Harrow West (Gareth Thomas) for securing this debate and for an excellent and forensic introduction to why this is such an important issue and why justice needs to be done. I refer to my entry in the Register of Members’ Financial Interests and my membership of the GMB trade union. I also add my tribute to all the others that have been made to my hon. Friend the Member for Birkenhead (Mick Whitley) for his tireless work campaigning on what is clearly a very important issue to him personally. I know he would have been here if he were able. But this issue should be important to anyone who cares about justice, truth and accountability. We have to ask ourselves a fundamental question: how did an industrial dispute end up with the arrests and imprisonment of 37 men? Let us not forget that, in its origins, this was a civil dispute—the criminal courts did not need to get involved—and it was no different to thousands of other disputes that have happened over many decades in the history of this country.
The men who were arrested were not told why. Is that not a basic tenet of our law? Who even did the arresting? The official position is that the police and bailiffs were involved in the eviction, but some have said that it was members of the SAS or the SBS—the Special Air Service or Special Boat Service—who were engaged. I do not know how accurate that is, but it is an important question, and if there is a grain of truth in it, it points to a much deeper level of Government involvement than has so far been admitted. That is an important reason why we need to look at the issue in more detail.
As we have heard already, the Thatcher Government were intent on placing Liverpool into a state of managed decline. I do not think that was a secret to the people living on Merseyside at the time; they certainly felt the effects of it every single day. We know that one of the papers released under the 30-year rule showed how Sir Geoffrey Howe urged the Prime Minister not to spend any public money in Merseyside, because he described it as “stony ground”.
We do not need reminding of how the decade was characterised by the Government’s war against trade unions, driven by an ideological determination to weaken workers’ rights to organise collectively and to take industrial action. As my hon. Friend the Member for Harrow West very clearly set out, the decision to re-tender the contract after it had already been awarded to Cammell Laird was clearly part of that political attack and managed decline strategy.
Frankly, we should not be left to speculate and have questions left up in the air. We need full transparency. I think if the Government have been interfering in industrial disputes to the extent of getting the special forces involved or re-tendering contracts that have already been awarded, that is something that we all ought to be concerned about, wherever we come from on the political spectrum. It certainly would not be out of keeping with the Government approach at the time.
We have also heard that the men did not receive any redundancy payments. I believe they were told by the management that they were deemed to have dismissed themselves—complete legal nonsense. It was a nonsense in 1984 and it is a nonsense now, but, importantly, it means that the men were denied their redundancy payments, which lawfully they should have been entitled to.
We also have to raise the question of judicial impartiality. Since the Taff Vale case, the courts have had a reputation of being pretty unsympathetic to the ability of working people to organise collectively. Lord Justice Lawton, at the opening of the appeal, said that
“you cannot really expect any leniency to be shown unless and until each and every one of these men signs a piece of paper apologising for what happened, and expresses some regret”.
I think it is pretty clear that any idea of judicial impartiality was thrown out of the window that day.
How can anyone expect a fair hearing if they are told they should apologise before the case has even started? Why was it necessary to rub salt into the wounds of the eviction by adding 30-day prison sentences to the charges? A legal assessment of the strike commented that imprisonment is usually avoided because it inflames industrial disputes rather than terminates them. It is clear to me that putting those 37 men in prison was a clear statement of intent—one that strikes me as calculated, excessively punitive and almost certainly political in its origin. As my hon. Friend the Member for Harrow West stated, imprisonment was not the normal punishment in disputes of this nature. There have been hundreds of similar disputes over many decades where imprisonment was not sought, so why was it insisted upon on this occasion? Given that, it is little wonder that the European Parliament’s Committee on Petitions ruled in 2014 that the response to the occupation was disproportionate, and that the Government should release all documentation relating to the dispute and apologise to the men. I know the Government generally do not like things that come out of Europe, but they should listen to that ruling. I believe that when Labour is in office, we will honour it.
The stock response that we will hear from the Minister to our request for an inquiry is that this is not a matter for the Ministry of Justice, but I believe it is a question of justice. It is also a question of accountability and transparency. If the Ministry of Justice is not responsible for dealing with this matter, will the Minister please tell us where the campaigners and the hon. Members who have been fighting for this cause for so long should take their request?
Those men, who were thrown in prison and then blacklisted for taking industrial action, have not received any form of justice whatever in nearly 40 years. At the very least, they deserve an explanation from the Government, and the questions that we have asked today should be answered properly. Those in power really ought to know by now that the people of Merseyside do not rest until justice is done and the truth is uncovered.
Richard Burgon (Leeds East) (Lab)
It is a pleasure to serve under your chairship, Sir Christopher. I congratulate my hon. Friend the Member for Harrow West (Gareth Thomas) on opening the debate in the way he did, giving all the details of this enduring injustice and outlining what needs to be done to set it right.
I want to start by talking about a day in Parliament I will never forget. In March 2021, I arranged a meeting so that MPs and Lords could come together to listen to trade union activists who had been spied on by undercover police officers and blacklisted. We had an unexpected guest on that Zoom call. I had sent an email inviting every Member of the House of Commons and the House of Lords. I watched what we might call the usual suspects—some of them are in here—sign into the meeting, and then we were very surprised when Norman Tebbit joined our Zoom call. He was full and frank in his disclosure. He said that when he was Secretary of State for Employment for Margaret Thatcher, he received intelligence and information on trade unionists. He said that he even knew when and where trade union activists, deemed to be on the hard left, were going on holiday. He was there not to deny it; he was there to say, “Yes, we did it, and we were right to do it.” I mention that because it gives an insight into the political atmosphere at that time in the 1980s and a window into the ideology and psychology of the Ministers in Thatcher’s Cabinet.
The truth is that the injustice faced by the Cammell Laird workers all comes down to the fact that in the 1980s trade unionists were viewed, appallingly, as the enemy within—people who did not deserve justice, who were a barrier to privatisation and the neoliberal economic dream that Thatcher wanted to push through Britain. We need to understand that they were, at worst, collateral damage for some powerful forces at that time. My hon. Friend the Member for Harrow West read the names of the 37 Cammell Laird workers; that is something that everybody in a position of power should listen to and reflect upon. Those 37 people were put in prison for taking action as trade unionists to defend jobs and the community. Those decent people were treated like dirt and thrown into a maximum security prison alongside very dangerous criminals—how appalling.
Their maltreatment and punishment did not end then, as we have heard. They were blacklisted. They did not get their redundancy payments and it was harder for them to get jobs. How many lives were detrimentally affected by that brutal mistreatment of 37 decent working people and their families? It is a source of shame. Anybody, regardless of political party, who believes in democracy and civil liberties should know that that injustice needs to be resolved soon.
I was proud when our shadow Secretary of State for Justice committed in the 2019 manifesto to releasing all the papers on the 37 Cammell Laird shipyard workers, as well as the Shrewsbury 24 pickets, and promised to introduce a public accountability Bill. I am proud as a Labour MP that our Labour party still holds dear those important policies. I congratulate the GMB on supporting the ongoing campaign for justice. As we have heard before, justice delayed is justice denied.
Of course there needs to be a public inquiry. The imprisonment of the 37 Cammell Laird shipyard workers was an abuse of state power. When such an abuse occurs in this country we cannot cover it up and pretend it did not happen. We cannot try and explain it away. We need the disinfectant of full disclosure and the light of truth shining upon it so that apologies can be made, compensation can be given and justice can be done. It is an outrage that the GMB still has to run the campaign now. It is an outrage that the surviving workers who were imprisoned have to come to Parliament today to watch this debate. I hope this debate can get the page turned and secure justice for those workers.
The Government have an opportunity to turn the corner. They should release all the papers related to the Cammell Laird 37. The Government should apologise and remunerate the pickets. It is important that the Minister is given the opportunity today to do simple things. I invite him to agree with the European Parliament’s Petitions Committee that the Cammell Laird 37’s basic human rights have been contravened, and to commit to review the files on the dispute that have not been published, including any files held by police authorities or security services.
I invite the Minister to agree, on the public record, that the jailing of striking workers was an abuse of state power against decent, hard-working people and their families and the trade union movement, arising from the fact that trade unionists at the time, and perhaps in the minds of some still politically active today, were seen as fair game for injustice to be visited upon them. They were seen not as the fabric of our country creating the wealth and keeping our public services going, but as the enemy within. Once we have a Government that believe a group of working people and their trade unions are the enemy within, it justifies all sorts—surveillance, blacklisting, and treating people really badly.
We need to see real change. The Minister has a good opportunity today to make a difference, say what is necessary and get the ball rolling on what the surviving 37 imprisoned workers, the GMB and hon. Members have called for—an apology. Let us get the ball rolling on a public inquiry, because the truth is that, without one, justice will never be done. If we cannot achieve that, we must ask ourselves big questions about where we are as a society.
Chris Stephens (Glasgow South West) (SNP)
It is a pleasure to see you in the Chair, Sir Christopher. On behalf of my SNP colleagues, and indeed my constituents, I extend solidarity from Clydeside to Merseyside on this issue, because I do support a public inquiry for the Cammell Laird 37.
I will start with some of the historical background and parallels between Clydeside and Merseyside, because they are interesting, and there is a point where they diverge, which I think sums up where we are. Many people in the Glasgow South West constituency worked in the Upper Clyde Shipbuilders in the early 1970s. They were proud of their work, and the term, “Clyde-built” defined their international reputation for quality.
In June 1971, Upper Clyde Shipbuilders went into receivership. It was described as being loss making, even though the yards had a full order book with a profit being forecast for 1972. The move to receivership was political, not economic. The Heath Government had announced a policy that refused further state support for what they called lame duck industries. That refusal led to a crisis of confidence among UCS creditors, which resulted in severe cash-flow problems for the company, and it was then forced to enter liquidation.
None of that needed to happen, and the trade unions and shipyard workers knew it. Under the leadership of Jimmy Reid and Jimmy Airlie, they decided to conduct the now-famous UCS work-in to complete the orders already in place. They were joined on marches by 80,000 people, and the world watched on with wonder at the demonstration of popular support for the workers of Scotland. The then-Conservative Government in 1972 had to relent to the demands of the workers, and restructured the yards around two companies.
So, what is the relevance of the UCS experience to today’s debate on Cammell Laird? Well, the first part of each experience is similar: shipyard workers were concerned about the possible closures of their yards and consequent mass unemployment with few alternatives for future livelihoods; politically motivated decisions were made to proceed with closure; and the workforce responded with industrial action, including occupation.
Sadly, that is where the stories of each begin to seriously diverge, because Margaret Thatcher was even more ruthless than Ted Heath. She had few qualms about unleashing the powers of the state, and its appendages, to undermine the human rights of workers. The use of the police to break the miners’ strike the same year as the Cammell Laird action showed a consistency of contempt for ordinary working people—“Throw them on the scrapheap; they are no longer needed by the Government!”
Some would argue—it is unfortunate that we do not have a Conservative Back Bench Member to perhaps articulate this position, but maybe they are on strike; I do not know—that the planned closure of Cammell Laird was legitimate, and that it was a political decision by a democratically elected Government. However, that is why I do not think that we should discuss the decision to close; I think we need to concentrate on the means used to implement Government decisions.
Today’s debate is not simply about political decision making regarding industrial closures; it is about the treatment of workers and the denial of their human rights, and especially about the subsequent cover-ups by those in authority, then and now. It is about the campaign to secure justice for the 37 Cammell Laird workers who were jailed after taking part in an official industrial dispute.
I welcome and endorse the position of the Labour party that, if it was to win the next election, it would
“release documents held by government relating to the Cammell Laird prosecutions and carry out a review into the jailing of striking workers.”
However, the issue is about not just the integrity of political parties and Governments but the credibility of the United Kingdom itself, which has long claimed to be a beacon of human rights. Well, as far as workers’ rights are concerned, that beacon dimmed in 1984, and, in other debates, as I have seen in the past few weeks, we may discuss whether it is dimming even still.
Through the snippets of information currently available to us, we believe that key shop stewards were victimised during the redundancy process. Apparently, Michael Heseltine boasted about that by referring to a
“step change in attitude and motivation arising within the new balance of the workforce following selective compulsory redundancies”.
Having continued their occupation of two new vessels, 37 workers were ordered to abandon that occupation to attend a court hearing and were then threatened with contempt of court. That was a novel form of attempted strike-breaking by the state, escalating into the notorious imprisonment of those 37 men. The climax of it all for the 37 was their subsequent blacklisting and financial hardship. Those are not the hallmarks of some beacon of workers’ rights and industrial harmony. They look much more like what we see in oppressive regimes: the use of false imprisonment of dissenters and other human rights violations, which we would all condemn in other countries as being part of a brutal abuse of power. We have seen the abuse of power closer to home, as in Northern Ireland, and have had the courage to investigate it. We must do that for the Cammell Laird 37.
It was good that in April 2017, the then Justice Minister Phillip Lee agreed to look into the case if re-elected in the forthcoming June election, but we are still waiting. Perhaps the Minister here today can tell us what actions the Government have taken since April 2017 to look into this specific case. Almost no records that relate to the policing of the dispute, British Shipbuilders’ handling of industrial relations or the Government’s response have been published, and it is now time for that to happen.
Following subject access and Freedom of Information Act requests, we have heard claims from numerous Departments that they do not hold unpublished papers. We heard the cop-out in 2010 from the Metropolitan police, who refused a subject access request from one of the striking workers and responded by saying that the Met
“neither confirms nor denies that it holds the information you requested.”
Internationally, we have heard the opinion of the European Parliament’s Committee on Petitions, as other hon. Members have said, and it is worth my quoting, in closing, the statement in the petition to the European Parliament:
“There have been consistent attempts since 1984 to obtain information, answers and justice…regarding the contravention of basic human rights of the people involved under established European and international laws, Treaties and conventions. Yet…their stated rights of respect for the principle of liberty, democracy, respect for human rights and fundamental freedoms and the rule of law under Art. 6 of the Treaty of the European Union…have been denied.”
That beacon of human rights is only barely flickering, and the world sees it. Let us have that justice for the Cammell Laird 37.
Alex Cunningham (Stockton North) (Lab)
It is a pleasure to serve under your chairmanship, Sir Christopher. I, too, congratulate my hon. Friend the Member for Harrow West (Gareth Thomas) on securing this debate and bringing further attention to this historic injustice to the Cammell Laird workers, some of whom sadly are no longer with us. I also pay tribute to the GMB union, which has provided continuous support to the workers so that they and their families can finally achieve recognition of that injustice, and for their suffering and hardship. It is good to recognise that three of the men—Eddie Marnell, Billy Albertina and Sam Morley—are joining us this afternoon in this Chamber.
The Cammell Laird shipyard in Birkenhead has a proud history. The site has played a strategic role in British shipbuilding for 200 years. Importantly, it has proved pivotal in supporting the Wirral community, sustaining vital jobs and creating a lifeline for the local economy. I remember well the 1970s and ’80s, when I was a young newspaper reporter and spent a lot of my time reporting on shipbuilding, on both Teesside and Clydeside. I know that shipyard workers are proud and loyal workers, and they are pleased to have their role in society. But as we have heard, in September 1984, Cammell Laird Ltd, through the High Court, conducted legal proceedings that would mark the history of this impressive hub of industry in Merseyside in a way that surely no one could have desired. It followed the decision by Cammell Laird to implement masses of job cuts, and a decision by the workers and their trade union to fight for their future. From July of that year through to September, the dispute escalated from picket lines to the occupation of a rig under construction and a blockage preventing access to HMS Edinburgh, which was under construction at the time.
The company then sought an injunction, which in turn led to the 37 people occupying the area being arrested for contempt of court between 1 and 3 October and imprisoned in the then category A Walton prison. History tells the story of injustice and the horrendous impact that it has, not just on those imprisoned but on the whole community. Those workers were fighting principally to make a difference, to protect jobs and the area in which they lived, but they paid a terrible price. They were faced with a month-long detention in prison, followed by blacklisting and the loss of redundancy, pension rights and their livelihoods. They have since spoken of the feeling among the workers that the dispute could have been resolved, but that the authorities were in no mood to negotiate. My hon. Friend the Member for Liverpool, West Derby (Ian Byrne) spoke of the decimation of manufacturing jobs in Liverpool at the time—a loss from which the city is yet to fully recover. More importantly, he spoke of the fact that these men were never allowed the right to defend themselves.
Eddie Marnell, one of the persons present today, is a former shipyard worker and one of the 37 men who spent those 28 days in prison after being arrested at Cammell Laird. He has campaigned heavily for the release of documents about the case. He believes the workers were used by Thatcher’s Government as a warning to the miners and any other organisation that posed a challenge. I understand that some of the documents have been released, but others remain secret to this day.
Those 37 men were fearful that the end of Cammell Laird was imminent, taking Birkenhead’s economic and social health with it. This case of injustice is not isolated. Too often, we have seen successive Governments sweep issues under the rug and hope to avoid culpability. As my hon. Friend the Member for Wansbeck (Ian Lavery) said, this is simple. It is about justice for ordinary people who were incarcerated despite not breaking the law, and locked away from their families. Recognition of that injustice by the Government would be an uncomplicated action towards bringing solace to these workers and their families for all the misfortune they have suffered. More generally, as has been said, we cannot ignore the comparison between the 1980s and what we are seeing today. After 13 years of Tory Administrations, workers are once again seeing their rights disregarded. Contempt for workers now is not dissimilar to what it was then.
We know the Government have form for deterring workers from exercising industrial action. In the ’80s, we saw the Tory Government introduce successive laws restricting industrial action. A matter of weeks ago, this Tory Government introduced legislation once again set on doing the utmost to quash strike action by threatening people with the sack. The Government apparently believe in the right to strike, but the shoddy legislation they have introduced—the Strikes (Minimum Service Levels) Bill—is yet another attack on working people’s freedoms. Labour strongly opposes this Bill on principle. It is simply unworkable. We voted against it on Second Reading and we will repeal it in Government.
The past few months have seen the greatest strike disruption in decades, with rail workers, ambulance workers and nurses taking unprecedented industrial action. Yesterday saw both NHS nurses and ambulance staff striking simultaneously for the first time. Unlike this Government, Labour is proud of the trade union movement’s historic achievements in giving people a voice at work through collective action. Standing up for workers is in our history and in our future. A Labour Government will champion these rights and transform people’s lives for the better.
On the matter under discussion, can the Minister say what appetite the Government have for looking again at the Cammell Laird injustice to recognise it for what it was? Do the Government accept that those 37 people had their lives ruined by the heavy-handed use of the law, and that it was unfair and unjust?
There appears to be some confusion over the routes to having these matters looked into again. I pay tribute to my hon. Friend the Member for Birkenhead (Mick Whitley), who submitted a parliamentary question on the merits of looking again at what happened to the 37 Cammell Laird workers. In response to that question, the former Justice Minister, the right hon. Member for Croydon South (Chris Philp), said:
“The appropriate route to challenge a conviction and/or sentence is by way of appeal.
Anyone who has been convicted of a criminal offence in England, Wales or Northern Ireland can apply to the Criminal Cases Review Commission, which can review and investigate possible miscarriages of justice. Where there is a real possibility that the conviction or sentence will not be upheld, the Commission can refer the case to the appropriate court.”
The Minister present will know, as I do, that these workers were jailed for contempt of court. Can he confirm whether the legal route described by the former Minister would apply in this case? If not, does he have sympathy with the request of my hon. Friend the Member for Harrow West that a change in the law be sought, allowing issues associated with contempt to be subject to the same rules and therefore applicable to the work of the Criminal Cases Review Commission?
To be clear, a Labour Government will always stand up for the rule of law and challenge injustice wherever we find it. Labour would release documents held by Government relating to the Cammell Laird prosecutions and carry out a review into the jailing of the striking workers. Sadly, our history is littered with injustices, with the lives of hard-working people ruined as a result. As such, I would very much welcome the Minister’s acknowledgement that what happened four decades ago was wrong, and that, rather than develop new ways to foster conflict between employers and workers, we should see them work together for everybody’s advantage.
The Minister of State, Ministry of Justice (Edward Argar)
Thank you very much, Sir Christopher—I think you are the only Member of this House in the Chamber today who was also a Member back in 1984.
I congratulate the hon. Member for Harrow West (Gareth Thomas) on securing this important debate. He and I have exchanged views across the Dispatch Box in this Chamber on a number of issues in the past, when I have been in different roles, and I have always sought to be constructive; I will endeavour to be so again in responding to him and other hon. Members today.
I also recognise, as other hon. Members have done, the campaigning work of the hon. Member for Birkenhead (Mick Whitley). I know he would have wished to be here, but following his covid test, he is not able to be. I hope he is okay, and if he has any symptoms, I hope he recovers very quickly and is back with us soon—tabling questions to me on this matter, I suspect, or raising the issue in the Chamber. I wish him a speedy recovery.
As we have heard, in 1984 37 workers were involved in an occupation of the Cammell Laird shipyard at Birkenhead in a bid to stop compulsory redundancies. I recognise the huge value of the work undertaken by those working in shipbuilding and the huge pride that was, and continues to be, felt by people in shipbuilding and a whole range of important industrial sectors. A number of hon. Members have highlighted that, and it is important that we put it on the record.
The 37 were sentenced to 30 days’ imprisonment for contempt of court after refusing to comply with a judge’s orders to leave the partially built gas rig, as we have also heard. I do not propose to recount all the circumstances—the hon. Member for Harrow West set them out very clearly, as did a number of other Members, particularly the hon. Member for Liverpool, West Derby (Ian Byrne). He gave a passionate and moving speech, not only showing the depths of his feelings on the issue, but highlighting through individual examples the impact that it has had.
Hon. Members often listen to each other carefully in this place—all the time, I hope—but it is perhaps a little rarer for hon. Members to learn something, or to hear a speech that causes them to reflect further. The speech made by the hon. Member for Harrow West achieved that, and I pay tribute to him for it; it was genuinely interesting and thoughtful. The hon. Member for Wansbeck (Ian Lavery) is always passionate. I hope not to damage his political career by saying that I have huge respect for him, but he knows of what he speaks, and he speaks with not only knowledge but experience. Again, it may damage his political career if I say that I do not believe I have ever called him a militant—he may wish I had—but none the less, in the spirit of this debate, let me say that he makes his points fairly and passionately.
The hon. Member for Ellesmere Port and Neston (Justin Madders) had the dubious privilege of being my shadow for almost three years. He and I debated a number of issues in the context of health. He always does his research, and speaks with moderation but also with a clear view of these matters; I pay tribute to him. I was going to say the hon. Member for Leeds East (Richard Burgon) shadowed me in a previous role, but he was actually far more elevated—he was shadowing the Lord Chancellor. While we do not often share the same political perspective, I could never—and I do not think anyone could ever—doubt the sincerity with which he holds and propounds the views and positions he does on behalf of his constituents.
The 37 were imprisoned for 30 days in HMP Walton. It is important to highlight that they were imprisoned for contempt. They were subsequently dismissed from their jobs and lost the right to redundancy and their pensions. As hon. Members will know, sentencing in that case, as in others, is a matter for our judiciary; we cannot comment on the decisions made by the judiciary in that respect.
Before turning to the details, I will say a little about contempt. If a party, when summoned to appear, admits the contempt and complies with the instructions regarding the contempt, often no further action will be taken. But if not, upon proof of the contempt the court has to impose penalties. That is a matter for the independent judge. I understand that in this case the official solicitor put forward various arguments against the duration and nature of the penalty. That independent judge rejected those arguments.
I highlight at the outset that I recognise that this is an incredibly difficult case for all those concerned, and for the local community at the time more broadly, with far-reaching and long-lasting impacts. There are understandably strong feelings about the case. I may not always agree with everything it propounds, but I highlight the work that the GMB—at the time, the General, Municipal, Boilermakers and Allied Trades Union—has done, and the tenacity with which it has pursued the matter. I am not unsympathetic to the case, and in particular to the impact it has had on individuals. I recognise that due to the passage of time a number of those individuals have sadly passed away in the intervening years.
I also take this opportunity to highlight that this Government do recognise the ability to strike as an important part of industrial relations in the UK, rightly protected by law. We understand and recognise that an element of disruption is a key part of that. I do not think that is in anyway incompatible with the necessary legislation currently going through Parliament in respect of minimum service levels.
I should also state that the hon. Member for Glasgow South West (Chris Stephens) sat on a Bill Committee with me looking at some of these issues back in 2015-16, when we were first elected to this place. As I said then, I recognise the important role that trade unions play in our economy and society.
Chris Stephens
The Minister refers to the new Bill. If that Bill had applied to the Cammell Laird 37, they would have been dismissed with no right to a tribunal. Does the Minister seriously think that is fair? That is what the new Bill says.
Edward Argar
The new Bill refers to very specific areas of service in specific sectors, subject to further delegated legislation where such minimum service levels could be required. I do not think the parallel he draws is directly analogous.
It is important to note that the world has changed since the 1980s. Back then, unions tended to protect their members through collective action and did not rely on the courts to the same extent that they do today. Individual employment rights were less common than they are now. Since the 1980s, the industrial relations landscape has significantly changed, with a greater emphasis on individual rights. Nowadays, when they are recruiting, employers cannot discriminate on the grounds of trade union membership or activity. Similarly, an employer cannot dismiss a worker for being a member of, or active in, a trade union. Workers benefit from legal protections when taking lawful industrial action.
Today, blacklisting is, rightly, completely unacceptable and has no place in modern employment relations. Any individual or trade union who believes they have been a victim of this practice can enforce their rights under the regulations, through an employment tribunal or the county court. The Employment Relations Act 1999 (Blacklists) Regulations 2010 are further reinforced by powers in the Data Protection Act 2018 protecting the use of personal data, including information on trade union membership and sensitive personal data. The Information Commissioner’s Office regulates the use of personal data and investigates breaches of the Data Protection Act. It has the power to take enforcement action, including searching premises, issuing enforcement notices and imposing fines for serious breaches. Anyone with evidence of offences in that area should present it to the Information Commissioner’s office.
The specific question posed by this debate relates to the potential merit of holding a public inquiry into the Cammell Laird workers imprisoned in 1984. As I have alluded to in reference to the hon. Member for Harrow West, I do recognise that this is an issue of abiding parliamentary interest, and the number of hon. Members in the Chamber today reflects that. Although debates in this Chamber are often about important subjects, it is not always as well populated with hon. Members.
Public inquiries are independent investigations into matters of significant public concern. They can be established by the Government and led by an independent chair. They are usually asked to establish the facts surrounding a particular serious issue and consider the lessons to be learned from what has happened, as well as to make recommendations intended to help correct the deficiencies for the future. For example, an inquiry might be established to determine the cause of a major disaster or accident.
When the Government determine that a matter is sufficiently serious to meet the bar to warrant an inquiry, there are number of options for the form that might take, including the establishment of an inquiry under the Inquiries Act 2005. As the right hon. Member for Knowsley highlighted, that is not the only option in this space. Unfortunately, by the vagaries of how debates are allocated, although the Ministry of Justice owns the Inquiries Act 2005 and Inquiry Rules 2006, Justice Ministers do not have any power to decide whether to set up such an inquiry. That would fall to the Department with the policy or operational responsibility for the issue under consideration. Therefore, as a Justice Minister, I have no power to agree to the request for a public inquiry. However, industrial relations and how they were historically dealt with, although not a matter for the Ministry of Justice, do fall under other Government Departments. Although I cannot comment on the merits of an inquiry in this instance, other Departments would have an interest. I will turn to that in a moment.
Document disclosure is a vital part of an inquiry, as the hon. Member for Glasgow South West highlighted. As the Government have previously set out, this Department has conducted extensive searches of its records and those in the court and prison systems. I understand that nothing has been found in relation to the Cammell Laird strike action or the strikers themselves. Other Departments—the Cabinet Office, Home Office and the Department for Business, Energy and Industrial Strategy, as it was until a few hours ago today—have likewise confirmed that they do not believe they hold potentially relevant material.
This is an area of legal complexity. In the spirit of constructiveness, I want to try to address some of the points raised by the hon. Member for Harrow West and the shadow Minister about previous answers on this and explore other routes that might be available—notwithstanding that I cannot opine on the merits of a public inquiry.
Sir George Howarth
The Minister referred to the fact that I said there was a potential third option. Would he be willing to consider an independent panel, along the lines of the Hillsborough Independent Panel? My view, like those of my hon. Friends and others, is that there should be a public inquiry, but if that is not possible for legal reasons, there is that option to explore.
Edward Argar
I am grateful to the right hon. Gentleman for suggesting a potential third way. Again, that would not fall within the powers of the Ministry of Justice. I suspect it is the sort of thing that may fall under the remit of the Cabinet Office—that is one of the four jobs I held in brief succession last summer, so I still remember some of that.
I hope I can give the hon. Member for Harrow West a constructive response.
Dawn Butler
I just want some clarification. Is the Minister saying categorically that there are no documents in any Department relating to Cammell Laird that are not in the public domain?
Edward Argar
I repeat to the hon. Lady what I said—I will be quick, because I want to give the hon. Member for Harrow West time to wind up—which is that I understand that my Department has previously conducted extensive searches of our records within the court and criminal system, and nothing was found. I also stated that other Departments—the Cabinet Office, the Home Office and BEIS, as was—have likewise confirmed that they do not hold any. I limit my remarks to that and to repeating what I said, not because I necessarily disagree but because I want to confine myself to what I know I can say in this Chamber with knowledge. I do not want to risk misleading the House in any way.
The hon. Member for Harrow West asked about options. This is a legally complex area, and the answer that was previously given suggested the CCRC. I understand that there is no bespoke redress scheme for civil claims arising from committals for contempt of court. Claims for compensation may be explored through the normal civil court process. There are various courses of action. I know that the 37 did not appeal to the House of Lords, but I believe that, were there permission, it would be possible for them to consider an appeal to the Supreme Court. I am reticent to suggest that those may be the solutions. In the spirit of a constructive response, I say to the hon. Gentleman that if he writes to me, I will ask my officials to look into those legal routes in greater detail to try to get a bit of clarity, especially given the written parliamentary answer that he referred to. I hope that might slightly help to move things forward.
I want to give the hon. Gentleman some time to wind up. In summary, although I am extremely sympathetic to the case and to the individuals and communities affected, industrial relations and how they have historically been dealt with are not a matter for the Ministry of Justice. It would therefore be inappropriate for me to comment on the potential merits of an inquiry in this instance. As I say, if he writes to me, I hope I might be able to be constructive in responding.
Gareth Thomas
I am grateful, Sir Christopher, for the opportunity to make a short winding-up speech. I am very grateful to hon. Members who have attended the debate, including my hon. Friends the Member for Liverpool, West Derby (Ian Byrne), for Wansbeck (Ian Lavery), for Ellesmere Port and Neston (Justin Madders) and for Leeds East (Richard Burgon), my right hon. Friend the Member for Knowsley (Sir George Howarth), my hon. Friends the Members for Stretford and Urmston (Andrew Western), for Brent Central (Dawn Butler) and for Wirral West (Margaret Greenwood), the hon. Member for Strangford (Jim Shannon) and my hon. Friend the Member for Wirral South (Alison McGovern). I am grateful for their support and knowledge.
I am also grateful for the Front-Bench speeches. The hon. Member for Glasgow South West (Chris Stephens) was clear in his support for the release of documents. I am particularly grateful to my hon. Friend the Member for Stockton North (Alex Cunningham) for reiterating our party’s commitment to review this issue in Government and ensure the release of all documents.
I am grateful to the Minister for offering to look at two possible legal remedies. I will certainly write to him. I welcome his acknowledgement of the impact that imprisonment had on the 37.
I take the opportunity again to praise the GMB union for its tenacity in supporting the 37—in particular, Eddie Marnell and the others who have continued to campaign consistently on this. This is the only remaining case of trade unionists being sent to prison. It was wrong then, it is wrong now and we need some sort of inquiry to put it right.
Question put and agreed to.
Resolved,
That this House has considered the potential merits of a public inquiry into Cammell Laird workers imprisoned in 1984.
Children's Mental Health Services: Lincolnshire
(1 year, 9 months ago)
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Gareth Davies (Grantham and Stamford) (Con)
I beg to move,
That this House has considered children’s mental health services in Lincolnshire.
As a parent, I know how strong and how special the bond that connects us to our children is. We give our time, our energy, resources and a hell of a lot of sleep without a second thought to nurture, guide and raise them. It is a love that knows no limit, and we all want our children to have the best opportunities in life and for those opportunities to be just as limitless. That is why I can only imagine the distress and heartache felt by some families in Lincolnshire and across the country when a child is suffering from mental ill health.
As parents, we feel a deep sense of responsibility and a duty to get help for our children whenever it is needed, and we will do anything we can to get it, so it is vital for families to know that they have access to a network of support and to professionals dedicated to providing the best help and treatment available. Over the last decade, our country has made great strides in recognising the importance of mental health, placing it in parity with physical health both in law and in practice. There has also been a notable cultural shift, with more and more young people reaching out and seeking support with their mental health.
To be fair, Government have recognised and actively encouraged this change. Since 2015, the mental health investment standard has mandated that mental health spending at least match any overall increase in NHS funding. The Government also commissioned the independent mental health taskforce, accepted its recommendations in full and put an extra £1 billion towards introducing the first ever mental health waiting time standard, committing to providing 70,000 more children with mental health care and guaranteeing access to a 24/7 community-based crisis response. That has had an impact and it is a vast improvement on what has gone before, but those national numbers will mean very little if they do not translate into positive experiences where help is most needed.
In Lincolnshire, children and young people have access to a broad range of support. Lincolnshire has a strategy centred around care at home. While hospital care is lifesaving for those in most need, the majority of children with mental health problems can and should be seen in a familiar and comfortable setting at home. That is why I welcome Lincolnshire’s early help strategy. The mental health, learning disability and autism alliance, which includes NHS leaders, Lincolnshire County Council and district councils, and the police and crime commissioner, has developed the plan to promote early intervention and support. That ultimately means that more children are provided with help before their illness requires hospital support, and Lincolnshire has far fewer in-patient stays than the regional and national averages.
I want to use the rest of my time today to speak directly, in this Children’s Mental Health Week, as a voice for a number of my constituents who have reached out and contacted me over the past year to share their experiences and highlight particular issues that we face in the county of Lincolnshire. On early intervention, the earlier mental health issues are reported, the stronger the chance of recovery. There are two ways in particular in which we need to focus more attention to achieve these early interventions.
The first is through schools. School is where many children feel most comfortable, familiar and safe. As such, school is exactly where children are not only supported, but can be taught how to better look after their own mental health and recognise when classmates are struggling. The Department for Education has, therefore, rightly committed to providing mental health training to a lead member of staff in all eligible schools and colleges by 2025. Lincolnshire County Council has rightly commissioned four mental health support teams in various educational settings in Lincoln, Gainsborough, Boston and Skegness. Obviously, my constituency is missing from that list. I hope that Grantham, Bourne or Stamford will be included in the months and years ahead.
The second area of focus for early intervention is about training for medical professionals. Although some training is available, some of my constituents feel that it should be mandatory for all medical staff on paediatric wards, in A&E, for GPs and for GP nurses, so that issues can be identified earlier and faster. I am interested to learn the Minister’s views on that point, because it has been raised a number of times.
There is another big issue that I would like to highlight. Although we have some excellent people involved in mental health services in Lincolnshire, there are frankly not enough of them. We have to recognise that we struggle to recruit specialist staff to operate mental health services in Lincolnshire, because of the rural nature of our county. It also means that attracting specialists, such as psychiatrists, from more populated towns and cities is difficult. I know the Government are fully aware of the issue but, without more specialist staff, local providers find it difficult to expand services and provide a more immediate response to the children who are in most need.
That staffing issue creates a need for local providers to make occasional use of agency cover. Not only is that expensive, but it brings a significant churn of personnel into the system, when children and families need a consistent and familiar touch point they can get to know and who can get to know them. Another main workforce concern is that, after covid, a significantly higher number of people need help. It is estimated that across the UK, 1.5 million children might need new or additional mental health support as a result of the pandemic. Before the pandemic, one in nine children in the UK suffered with their mental health. That figure was high enough, but it has since risen to one in six children. With more children to treat, Lincolnshire needs more specialist staff to go alongside the clear increases in monetary investment.
My final point is about the important third area of after-hours care. In Lincolnshire, we have a crisis and enhanced treatment team. It is targeted at helping children, through assessments and home treatment, aiming to avoid the need for hospital admission. The full extent of that in-person service is available from 8.45 in the morning to 7 pm. As we know from many cases, the greatest need is during the night. For that, there is a telephone number for parents to call for advice, and they might be referred to an A&E department, if it is deemed necessary.
Although that is, of course, welcome, some families have not been aware of the out-of-hours service and have presented to A&E, sometimes without calling the crisis team, only to struggle to find any specific mental health support at the hospital when they arrive. Locally, I know that those responsible are aware of that, and improvements are on the way. For example, a new mental health liaison post has been appointed and will start soon to offer routine face-to-face support at A&E. Going forward, there is a review of the entire crisis model. Plans are currently being explored, including for a child and young person crisis assessment centre. I will definitely follow that closely.
Providing for our children is the driving force in parents’ lives. We love, care for and protect them as best we can with whatever means we have. I hope that, in some small way, my speech today has helped highlight the challenges that children’s mental health services in Lincolnshire face. Some are similar to those faced by other areas across the country; some are perhaps more unique to us in our county. I thank all who work so hard to deliver mental health services in Lincolnshire. I pay particular tribute and send my thanks to the families who have shared their stories with me—they know who they are. I look forward to the Minister’s response.
The Parliamentary Under-Secretary of State for Health and Social Care (Maria Caulfield)
It is a pleasure to serve under your chairmanship, Sir Christopher. I thank my hon. Friend the Member for Grantham and Stamford (Gareth Davies) for securing this debate and for the way he continues to champion children’s mental health services. I recently discussed many of the issues with him and some of his constituents. The experience that they brought to me has helped to influence the work we are doing. I reassure my hon. Friend that there is a huge focus on improving children’s mental health services, both nationally in terms of funding and, as he indicated, in terms of staffing. In his local area, much of the work will be in the major conditions strategy, which includes mental health, and also in our suicide prevention strategy—[Interruption.]
Sir Christopher Chope (in the Chair)
Order. There is a Division in the House, so the sitting is suspended. If there is one vote, it will be for 15 minutes; if there are two votes, it will be for 25; and if there are three votes, as expected, it will be for 35 minutes. I look forward to seeing Members back here then.
Sir Christopher Chope (in the Chair)
The Minister will now resume her speech.
Maria Caulfield
Thank you, Sir Christopher, for allowing me to continue what I was setting out to my hon. Friend the Member for Grantham and Stamford, who has been campaigning so eloquently on the issue of children’s mental health, particularly from a constituency point of view. He is quite correct that we are investing record levels of funding into children’s mental health services. We are trying to recruit as many staff as possible to expand those services, which are being extended to support children’s mental health. I will touch on how that is happening, both at a local level in Lincolnshire and nationally across England.
Lincolnshire’s children and young people’s mental health services have always been rated as outstanding by the Care Quality Commission. Pre-pandemic, the average wait for child and adolescent mental health services assessments was 4.4 weeks, and the Healthy Minds Lincolnshire early-intervention service helped to reduce referrals to child and adolescent mental health services by 5%. Lincolnshire has always had an excellent track record in delivering services and supporting young people in particular with their mental health, compared with the figures nationally. I know that is not necessarily much consolation for those parents and children waiting for services, but Lincolnshire mental health services have traditionally been very good.
However, the pandemic has had an impact, as it has across the country. In Lincolnshire, referrals to CAMHS have increased by 15.7%; nationally, the increase was 35%. Although Lincolnshire has not had the same increase in the number of referrals as other parts of the country, it has still had a significant increase. Lincolnshire has had 15% more clinical contacts than the national average, and 92% of children who sought an emergency telephone response received one within four hours as a result. We can see, then, the scale of the pressures that services are facing. Lincolnshire has performed relatively well compared with most other parts of the country but is experiencing challenges. That was very much the point that my hon. Friend made: his constituents are now struggling with waiting times, the sheer scale of the number of referrals is putting pressure on the service, and although a lot of work is going on to improve things, his constituents are feeling the pressures on the service.
The loss of workers in this field is particularly high in my hon. Friend’s area, as it is in other parts of the country. I assure him that we are recruiting more staff, but it takes time to train them up and get them providing services at a local level. Lincolnshire does not have a children’s and young persons’ in-patient unit, and I have heard from his constituents about the impact of that and the difficulty of a child being placed out of area. We fully recognise that and want to work with his local team on it. His local integrated care board is standing up to the challenge—it has increased funding to CAMHS by £1.2 million in this financial year to help to reduce waiting times, which has had a positive impact—but the workforce is probably the single biggest issue in terms of trying to improve services further.
By September of last year, 67% of children and young people who were assessed for CAMHS were assessed within six weeks. If early-intervention and emotional services are included, 72.5% of young people who were assessed were assessed within four weeks, with the national average being 68%. The big concern for Lincolnshire is the length of time that children are waiting for support and the workforce capacity to change that, so I am committed to working with my hon. Friend’s ICB to see how we can address that concern.
My hon. Friend touched on the out-of-hours service. Such services are available throughout the country—there are 24/7 helplines available—but he is quite right that many people do not know how to access those services, and that applies in respect of emergency services as well. We hear from ambulance trusts throughout the country that very often ambulances have to attend to someone with a mental health crisis, and they are not always able to access a 24/7 service. It is not because it is not there but because sometimes it just not clear how it can be accessed. There is, then, a lot of work to do.
Let me reassure my hon. Friend about what we are doing from a national perspective; this will be replicated in Lincolnshire. We are on course to deliver 399 mental health support teams in schools and colleges, and we already have 287 of them in place. They are making a significant difference to children and teachers. They are able to support children who have mental health concerns, mental illnesses or conditions at an earlier stage and get young children into the system much more quickly, before they reach a crisis point, to get them the help and support they need. They also take the pressure off teachers, who until now have done a significant amount of the heavy lifting when it comes to children’s mental health.
We are providing £79 million to boost capacity in children’s mental health services and to help 22,500 more children and young people to access those services. Also, we are specifically expanding access to services that address eating disorders. The funding has increased significantly to try to match our level of ambition, with £53 million of support in 2021-22, which will rise to £54 million in the forthcoming financial year. All that work sits on top of record levels of investment in NHS mental health services in England and the unlocking of support for an extra 345,000 children and young people.
I recognise from the points that my hon. Friend made that where we are making a difference that is great, but for the children and parents who are waiting it is still very difficult. Although Lincolnshire is probably performing better than most parts of England, it is facing some significant pressures with workforce capacity and the lack of an in-patient facility, which also puts pressure on community services.
The Government hope to reform the Mental Health Act 1983 fairly soon. That will support mental health services and make them much more community and crisis team-led, rather than letting people get into crisis and their needing much more extensive services. We have recently announced our major conditions strategy, which includes mental health, and we will also publish our national suicide prevention strategy, in which we will focus on children and young people in particular, because we recognise that significant work needs to be done for them.
It is also about ensuring that we have the workforce capacity in place. The Chancellor and his team will specifically include mental health in the workforce strategy, which is being worked on. We know that when we expand community services to get people seen much more quickly and avoid crisis situations, we will absolutely need the workforce at a community level to meet the demand.
I hope I have been able to reassure my hon. Friend. The Government recognise that there are challenges, particularly with things such as out-of-hours support and rapid access into services. I thank my hon. Friend for the work he is doing by constantly raising the situations his constituents face, because it does make a difference. It means that we are able to assess whether we are making progress in supporting not only children and young people in particular but everyone who wants to improve their mental health or has a mental illness and is in need of support.
Our ambition is that children and young people, wherever they are from in England, whatever their background and whatever their mental health condition, will be able to get the support that they need in a timely manner. I know that my hon. Friend will be holding our feet to the fire to make sure that that happens, particularly in Lincolnshire.
Question put and agreed to.
Sir Christopher Chope (in the Chair)
Because the Minister responding to the next debate is not present, I have to suspend the sitting until 5.7 pm. We will then have one hour in which to debate the next motion.
Levelling-up Fund Round 2: Bidding Process
(1 year, 9 months ago)
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Sir Christopher Chope (in the Chair)
I said the sitting was suspended until 5.7 pm because we did not have the Minister with us. We now have the Minister and all the players in the next debate. I propose that we start now and allow it to continue until 6.7 pm, because that allows for the injury time left over from the previous debate.
Anne McLaughlin (Glasgow North East) (SNP)
I beg to move,
That this House has considered the Levelling Up Fund round 2 bidding process.
It is a pleasure to serve under your chairmanship, Sir Christopher. Round two of levelling up: what on earth was that all about? [Laughter.] Is that an intervention already?
It seems like a lifetime ago that Boris Johnson stood on the steps of 10 Downing Street promising that he was going to level up the UK with money to areas that had been left behind, ravaged by successive Tory Governments—those might not have been his exact words—and bearing the brunt of each and every austerity measure, where the poor pay for the excesses of the rich, as per usual. Two Prime Ministers later and we have just had the announcement of the second phase of the levelling-up fund.
Glasgow submitted seven bids to the second round, many of which would have helped to redevelop some of the most deprived communities in Scotland. Officers and councillors spent months preparing the bids to give our communities the best possible chance of securing funding, and the latest estimates are that around £500,000-worth of officer time went into them. That is why I have secured this debate. It was a complete waste of effort and a complete waste of the energy, skills and knowledge that Glasgow City Council professionals and councillors alike poured into the bids. I pay tribute to them for the incredible work they did; however, as I said, it was a complete waste of their time and a shameful waste of half a million pounds that my local authority simply cannot afford.
It was waste, but not because they were not successful. I accept that if funding is going to be provided in that way—I do not agree with it and will come to that—there are no guarantees. The reason why it was a waste of time and money is that it was not possible for them to be successful as the Government changed the rules at the eleventh hour. My understanding is that Ministers intervened at the last minute to say that if a local authority had been awarded funding of any amount in the first round, no bids could be awarded funding in this round. That sudden and inexplicable shifting of the goal posts ruled all of Glasgow’s bids ineligible for funding.
Chris Stephens (Glasgow South West) (SNP)
Is my hon. Friend seriously telling the Chamber that local authorities had spent hours and months preparing a bid and that at the last minute the scorings were changed by ministerial interference because a local authority may have had funding in round one and was then automatically disqualified in round two? That is a scandal.
Anne McLaughlin
It is a scandal. That is exactly what I am saying because that is exactly what we were told and the explanation the council was given. At a time when local authorities are feeling the financial strain more than ever, it was just wrong and, frankly, cruel.
For Glasgow City Council, funded by the Scottish Government—a Government who, unlike this one, have to live within their immediate means and, unlike this one, have to provide a balanced budget—the financial flexibility simply is not there. Glasgow City Council also has other financial pressures, unique to the city, in that when the SNP was elected it finally settled the previous Labour council’s decade-long equal pay dispute with mainly female employees. That was absolutely the right thing to do and I am extremely proud of my SNP councillor colleagues for that, but it was a massive bill that Glasgow will be paying for years to come.
The council was already in an extremely tight financial position because the Scottish Government are in a tight financial position, and that position was even tighter because it is paying the price for the previous council’s 10-year battle with women workers. The council was doing the best it could with the resources it had. Let me say to everyone here that Glasgow City Council’s work is regularly replicated around the UK because it runs some inspirational programmes despite financial constraints. However, given those additional constraints, it was even more galling to see the UK Government wave the carrot of levelling-up funding in front of our noses, only to snatch it away at the last minute.
I said that I do not agree with the way the funding is awarded. Forcing councils to compete against one another is a terrible way to distribute finance that should, by rights, just be given to local authorities to address local problems. Of course, the possibility of securing much-needed investment could not be turned down, so the work was done, and the bids were submitted in good faith.
Glasgow had some fantastic bids. We know this, not because we have seen them—although we have—but because our council officers were told as much by UK civil servants. Until the night before the announcement, the discussions were about which of them were most likely to be successful. I would like the Minister to explain to us exactly what happened in the 24 hours leading up to the final decisions being made.
My own constituency’s bid was for the regeneration of Saracen, Stonyhurst and Allander Streets in Possilpark, creating an urban park and building on the excellent work of the community-led business improvement district. To me, that is the epitome of levelling up—working with communities to build economic prosperity and resilience in areas of deprivation to support and develop what these communities have already started themselves. It is about supporting their empowerment. Instead, Possilpark has been discarded. The people of Possilpark deserve better.
The bid for Easterhouse, another area of Glasgow with historical and generational inequality, was for an incredible project that would have redeveloped the local shopping centre and public realm, not only linking the college and social enterprise hub but improving active travel routes and access to and the promotion of the wonderful Seven Lochs wetland park. It would have been a much-needed boost to the area, which was, statistically, the worst impacted by covid in the whole of Scotland. Again, Easterhouse and the people of Easterhouse were discarded. Again, I say that the people of Easterhouse deserve so much better.
Alun Cairns (Vale of Glamorgan) (Con)
In view of the fact that economic development is generally a devolved function, why do the Scottish Government not fund such an important project?
Anne McLaughlin
Can I have a little longer to explain this to the right hon. Gentleman? The Scottish Government have a fixed budget. It is fixed by his Government. They decide how much they can spend. As I said earlier, they have to live within their immediate means. If we look at Possilpark, money has been—[Interruption.] The right hon. Gentleman does not seem to be listening to my answer, so why ask the question in the first place? Money does go in from the Scottish Government. If he is suggesting that Scotland is not eligible for this levelling-up funding, that is a different question. Maybe the Minister will confirm that we are eligible for it, because it is our taxpayers’ money as well.
Alun Cairns
I congratulate the hon. Lady on securing this important debate and I hope to have the opportunity to make the case for my constituency a bit later. To respond to her specific points, does the Scottish Government not have tax-varying powers? This is quite obviously an exciting project but, by the sound of what the hon. Lady is saying, it is not sufficiently important for the Scottish Government to fund it in Glasgow.
Anne McLaughlin
That is utter nonsense. I am not going to repeat what the right hon. Gentleman just said. Lots of funding is going into both areas. That is our taxpayers’ money as well. Why should the Scottish Government increase taxes—they cannot do it in year—when we have already sent the taxes down here? We are supposed to get some of them back; we are supposed to get more of them back than we have been. Incidentally—this is turning into a response to the right hon. Gentleman, although I am not sure he is listening—the people of Scotland voted overwhelmingly to stay in Europe. If we had stayed in Europe, almost double what was available in the levelling-up fund would be available to the whole of the UK. I think he needs to think about what he is saying; I think he is well aware of what he is saying and the implications.
Then we look at who got the funding. While my constituency and other Glasgow constituencies got nothing, the Prime Minister’s wealthy constituency was awarded £19 million. It simply exposes the lie of levelling up for what it is—just another way for the Conservatives to funnel public money to their own pet projects. The idea of spreading the funding evenly around the UK is somehow a fair way to do it is total nonsense. To properly address inequality and deprivation, we have to do more than just throw a few pounds at communities every once in a while. We need to pump money and support into the places that need it, and we need to do it again and again. That takes a level of courage and conviction that the Westminster Government simply are not showing.
That got me thinking that perhaps we are not all on the same page and that the Government have no desire to address underlying inequality and deprivation. I wondered why, and I can only conclude that the UK Government blame the people and communities living with serious levels of deprivation for that deprivation. Do the Government have an ideological belief that it is somehow the fault of the people in those communities, and that they should just leave them to it? I do not know what other conclusion can be reached.
Let me be clear where we in the SNP stand: the systemic problems at the heart of too many of our communities, including Possilpark and Easterhouse, stem from the contraction of people’s incomes and the erosion of the social safety net after 13 years of Tory austerity. The Tory Government are to blame, not the people themselves.
The leader of Glasgow City Council, Susan Aitken, wrote to the Secretary of State for Levelling Up, Housing and Communities to set out just how bad a deal it has been for Glasgow as a whole. She pointed out that only 3.7% of the funding allocated to Scotland was received by Glasgow, but that if that had been based on population size, it should have been three times as much. Councillor Aitken goes on to say that, had the allocation been based on the proportion of people living in deprivation, it would have been an eye-watering 15 times as much. That was the criterion for EU funding, which the levelling-up fund was supposed to replace when we were dragged out of Europe against our will—as I said.
I will end by asking four questions. The Minister should bear in mind that the officers and councillors of Glasgow City Council, Glasgow MPs and MSPs and, most importantly, the people of Glasgow are all waiting for the answers. First, why were we and others told to submit bids and then told that we were not eligible, because we had had a small amount of funding in round 1? Secondly, what is the thinking that says divvy it up equally, despite the fact that people and communities do not live equal lives? Thirdly, will there be a round 3 and, if so, how can we be sure that there is a point to committing the time and money it will take to bid for it? Finally, will the UK Government reimburse Glasgow City Council the estimated £500,000 cost of submitting bids that it could not possibly win, or are the people of Glasgow expected to pay for that themselves?
Giles Watling (Clacton) (Con)
It is an honour to serve under your chairmanship, Sir Christopher. I am grateful to the hon. Member for Glasgow North East (Anne McLaughlin) for securing the debate.
I support the general notion of levelling up and am pleased that Clacton has won its most recent bid. It is set to receive £20 million, and my hon. Friend the Minister is well aware of how grateful I am. However, it has to be said that it is richly deserved, given the years of headlines we have seen about the decline of coastal towns. In short, we are too often overlooked. Furthermore, in my constituency is the most deprived ward anywhere in the UK—not a thing to be proud of, and something that must be addressed.
That levelling-up money very much chimes with my long-standing push in this place that it is unfair for the east of England to be treated in an homogeneous way. Yes, the home counties are rich, but not all their constituent parts are. Clacton has some areas of deprivation that easily exceed those anywhere else in the nation. We need to sort that out, so there is much further work to do and further bids that need winning.
From an infrastructure point of view, the district of Tendring is divided physically. My hon. Friend the Member for Harwich and North Essex (Sir Bernard Jenkin) and I—in Clacton—share the peninsular on which Tendring sits, but regular travel from his constituency to mine is difficult, to say the least. All roads lead to Colchester and not across the area. We have a new freeport coming at Harwich, with all its accompanying benefits, which is great news, but we need access from Clacton urgently. They need us and we need them.
The Essex County Council transport bid for levelling-up funding failed, as did the Tendring District Council high street funding bid. Improving Clacton town centre with the £20 million is a fantastic start, and we are grateful, but there is so much further to go. Transport infrastructure for Tendring has to be the long-term strategic goal.
If we see continued coastal decline in places such as Clacton, which is in one of our new, shiny freeport areas, the whole freeport agenda might well be seen as a busted flush. I am very happy to invite my hon. Friend the Minister to Clacton to see how poorly connected my town is to one of our new and much-anticipated economic engines. I would be happy to drive her around and show her exactly how the land lies. Further funding here will mean the difference between hitherto unimagined regeneration and an historic flop.
Finally, while this is not a Department for Transport debate, may I quietly mention the work at the Haughley and Ely railway junctions? The Department for Transport will likely be scouting around for significant savings, and as chairman of the great eastern main line taskforce, I am unaware of a project in the nation that would deliver so much for such relatively little. I would urge my hon. Friend the Minister to talk to colleagues in the Department for Transport about how levelling-up bids could bolster capital plans that are now stuck in the mud in my area.
Several hon. Members rose—
Sir Christopher Chope (in the Chair)
Before I call Mike Amesbury, let me say that we have six hon. Members seeking to participate in this debate, and we have half an hour before the wind-ups, which will start at quarter to 6. I will not impose a time limit, but I hope Members will bear that in mind.
Mike Amesbury (Weaver Vale) (Lab)
It is a pleasure to serve under your chairmanship, Sir Christopher. I want to congratulate the hon. Member for Glasgow North East (Anne McLaughlin) on securing such a timely debate. Many communities in great need have lost out in both rounds of levelling-up funding. I note that the hon. Member for Clacton (Giles Watling) has been successful and I congratulate him and his community on that.
The Government expect places that receive funding to be grateful for a partial refund on money that has been systematically stripped out of their communities, decimating local services, whether that is children’s services for the most disadvantaged or adult services and social care, not to mention grounds and environmental maintenance. Those are just some of the key services that councils provide.
Nearly £500 million has been cut from Cheshire West and Chester Council’s budget over the last 13 years, while hard-pressed residents are expected to pick up the bill through astronomical council tax rises—in modern terminology this is known as core spending power. The Government have failed on levelling up, and they have even given up the pretence of trying. Look at Richmond and the award there, then look at Knowsley. That is a prime example of that.
At the core of this failure is the fundamentally flawed system and an unfair “Hunger Games” bidding process, which I know my hon. Friend the Member for Nottingham North (Alex Norris), our Front-Bench spokesman, will refer to. Many local authorities have had to go through this process. The Local Government Association—in which I should declare an interest as a vice-president—has estimated that each bid costs an average of £30,000, successful or not.
The system is not measured according to need, as it should be, but is seemingly influenced by political patronage at times. In my constituency, a very good and comprehensive bid was put forward by Cheshire West and Chester Council for funding for a new Winnington bridge travel corridor and brownfield development of 1,500 houses. The bridge is a key piece of infrastructure that serves industry, businesses and local people in not just my constituency but neighbouring Tatton. The council simply does not have the money to fund such an infrastructure project, and there does not seem to be any other Department for Transport scheme that would do the job. If levelling up were to mean anything, surely that bid would have been successful. The Government talk about “brownbelt first”, but 1,500 houses that would be good to go if the infrastructure was in place have now essentially been rejected.
If we truly want to power up communities, decisions need to be made closer to the communities that they would serve, and more powers need to be given to councils on funding. Devolve that funding to councils. Even the likes of Andy Street, from the Government’s side, has labelled this system of levelling up as a “broken begging bowl culture”. I wholeheartedly agree.
Today, the Conservative Government are once again busy with their own internal chaos; delivering for people and for communities is beyond their radar. I know that variety is the spice of life and we all love a bit of a surprise, but my God, this is on an industrial scale! I did not even know what Minister would turn up today. I am pleased that the Minister is here, by the way, and I will have a number of questions to ask her. But in the meantime, the whole House is seemingly in chaos and it leaves the country adrift. I think we are on our 12th Housing Minister, for example, at the moment.
Before I conclude, I have a number of short questions for the Minister. When will I and Cheshire West and Chester have feedback about the round 2 bid? Where did it go wrong? I am confused about that. What alternative route is available not only to fund the bridge, but to open up the opportunity to build the 1,500 houses? The funding is there for that, by the way; it is not a call on Government. But it is not for the bridge. What are the timescales for round 3? Will the Minister meet me to explore alternative funding routes?
I will conclude by saying that if we are truly to take control, we genuinely need fiscal devolution to our councils. That is exactly what is needed, so that they can make the spending decisions. And you know what? Sometimes they will make mistakes as well, but I would rather that that happened in our communities than came from Westminster and Whitehall. This is a flawed system.
Kevin Foster (Torbay) (Con)
It is a pleasure to serve under your chairmanship, Sir Christopher, and I congratulate the hon. Member for Glasgow North East (Anne McLaughlin) on securing the debate.
Over recent years, Torbay has succeeded in many bids, with a significant level of investment provided by the Government since 2015. That includes the Paignton future high streets fund, where we got £13.4 million, and the Torquay town deal, worth £21.9 million. Prior to 2015, it was normally news when Torbay made the list for a funding announcement, as we were often overlooked; now, it is news when we do not. That shows the turnaround in how our bay is regarded, but it does not dampen the sense of disappointment that, for the second time, our bids to the levelling-up fund have failed, despite Torbay being one of the areas where demographics would suggest that levelling up would be aimed.
For background, two bids were submitted in relation to Torbay. The first was the “Fish and Chips” bid, as it was termed, looking to support the expansion of Brixham fish market, which last year saw record sales of more than £60 million, and our cutting-edge photonics sector. The fishing element alone could have allowed for an additional £20 million of catch to be processed through the market each year, creating a forecast 160 new year-round jobs and putting more than £38.5 million into the local economy. The second bid, submitted in partnership with our neighbours in Devon, was for the south Devon cycleway, which would have provided a safe travel network on the most used commuter routes through Teignbridge and Torbay, as well as providing travel choices to Newton Abbot rail station and the upcoming Edginswell rail station. Both those bids failed, the fish market project for the second time.
I accept that there are some questions that we need to consider locally about our approach for the 3rd round, so it would be helpful for the feedback on those bids to be as clear as possible. Is the fish market project one that the Government would fund under levelling up? If not, then, no matter what my thoughts may be on it personally, we can at least reconsider our approach and not waste effort on a third bid. I would also be interested to hear what impact the failure to deliver other Government-funded projects by the coalition of Lib Dems and Independents running Torbay Council may have had on the success or otherwise of our bids. An example is the land release fund, where, after about four years, the £3 million offered has not actually seen a house built. Then we come on to the various delays in their getting major projects under the town deal and Paignton future high streets fund under way. I appreciate that demanding funding on the one hand and then not spending it on the other is hardly a persuasive approach, so it would be helpful to know what impact that had on our success or otherwise in relation to the bids and what considerations there will be, going forward.
It is welcome to see the Minister in her place, and it will be interesting to hear her thoughts on a couple of specific points. First, the obvious query is how candid the feedback will be on our bids? Will it be clear whether a bid is simply not what the Government are looking for under levelling-up funding, and will they then be firm in suggesting that we look at something else? Secondly, what is the impact of the delivery, or not, of other Government-funded capital projects by local authorities on levelling-up funding bids? I accept that the feedback may be good and bad.
The debate has been a welcome opportunity to set out my thoughts on the recent bidding process and its results in Torbay. There is no shying away from the fact that Torbay has challenges, but it also has great potential. The levelling-up agenda should be about unlocking that potential, and that is why my hon. Friend the Member for Totnes (Anthony Mangnall) and I are so keen that Torbay is successful in the next round of bids for levelling-up funding and that the feedback is as clear as possible so that we can put up a bid that does our bay justice.
Jon Trickett (Hemsworth) (Lab)
Thank you for your guidance, Sir Christopher, and for your generosity in giving us an extra seven minutes. I am grateful to the hon. Member for Glasgow North East (Anne McLaughlin) for initiating this important debate.
I object to the whole process: the Government created the divisions in our society that the levelling-up programme is meant to repair. Those divisions are so deep, and the cuts so vast, particularly in more deprived areas, that the proposed programme is simply a competition among areas of deprivation for crumbs off the Government’s table. It is not acceptable that the Government have set out the programme as they have. If they really want to deal with levelling up—clearly, they do not—they need to change the entire market-led, “Government stand back” approach and make serious interventions.
I represent a community that is among the most deprived—if we are not careful, we will be into a “Four Yorkshiremen” sketch, as we share details of deprivation. We do not want to get into that, and it is not right that that is how the Government have structured the competition for funding. The average weekly wage in my area is £495; in London it is £728—each worker on average pay earns £12,0000 a year more in London. In terms of NVQ level 4, we are at 22%, whereas in the Prime Minister’s constituency it is twice as many people. In terms of professional and managerial jobs, we have half as many as in London, and since 2010, weekly earnings have increased by only 6% in my area, as opposed to 22% in London. Areas such as mine have been devastated by successive Tory Governments, starting with the closure of the collieries without a proper industrial strategy. So by any criteria those areas should be gaining access to additional funding if the Government are serious about dealing with deprivation.
Notwithstanding my objections, we put together a bid for South Kirkby, one of the poorest areas of my constituency. It was put together with a private sector firm that is quite the most remarkable company I have seen. It was built from nothing. Adrian and Lee are behind it, and they realised that there is big money in the industry of rock and roll. They are producing a series of activities, and the company is unique in Europe—there are only two such companies in the world. We put a bid together with them. The average pay on the campus they have set up is more than £40,000, whereas average pay in the village is £18,000.
We all recognised that we needed to build a bridge between the deprivation in South Kirkby and the immensely successful private sector development at the top of the hill. They have raised £50 million of investment. We then put in a bid for £20 million, which would have levered in a further £30 million—that could have had a dramatic effect, and it was private-sector led. Apart from the whole process being a disgrace, I feel so annoyed because a Government Minister—of course under a previous Prime Minister, if Members can remember back to last June—told the House that we were getting our £20 million. Work had been done, and further work had been carried out not simply by the council but by other officers and by the firm I referred to—it is called Backstage Academy—on the basis of a promise made to this House. What happened, Minister?
People in our area know that I am not allowed to say that the Ministers were liars, and I would not dream of saying that, but they are saying that I should say that we were cheated of that money and the opportunities and life chances that we might have had. Those people have grown up in villages that were left devastated all that time ago with the closure of the pits.
Anne McLaughlin
Does the hon. Member agree that it is not the individual who makes the promise who is supposed to keep it, but whoever inherits that position? They are not speaking in a personal capacity; they are speaking in a ministerial capacity.
Jon Trickett
I totally agree. The Prime Minister changed and the politics of the country changed, and they suddenly saw an opportunity to dip their hands into a bag of funds that a previous Prime Minister had created and to use those for their own political purposes. It is a disgrace.
We are dealing with the poorest people in the country. Is the Minister aware that women in my constituency are now dying younger than ever before? I think the average is 66 years of healthy life. They are dying before men, which is very unusual, and that number is declining. We need something to be done as a matter of urgency. Will the Minister at least send us a courtesy letter—we have not had one—as to why we were betrayed in the way we were?
Alun Cairns (Vale of Glamorgan) (Con)
It is a privilege to serve under your chairmanship, Sir Christopher, and I congratulate the hon. Member for Glasgow North East (Anne McLaughlin) on securing this debate. I am extremely disappointed that Barry Making Waves—a proposal for a marina in Barry—was not successful. Although disappointed, I remain determined to ensure that it is successful in the next round of funding.
I will defend the policy, because when I was Secretary of State for Wales I had a part in shaping the objectives of the successor to European funding. I did that with parts of the country in mind that had been ignored for far too long, and that includes eastern parts of Wales and my constituency. The policy’s objective is right, in that it seeks to support those communities that have been left behind. The policy’s outcome may need further explanation to clarify and highlight why some communities have been successful or not.
Having investigated, spoken to colleagues and worked with my Labour-led local authority to clarify why Barry Making Waves was not successful, it is clear that officials will have scored each individual project. Clearly, my project was not successful, although other neighbouring projects were, so when it is suggested that there is a party political motive in supporting individual projects, that does not stack up credibly.
Alun Cairns
I will give way in a moment.
That does not stack up credibly, because my seat, and others I can point to, would have been successful on those grounds, and that would also give rise to a judicial review. So it is obvious that these applications would have been scored according to the policy’s objectives, and officials would have dealt with them individually, rather than according to the party political motive that has been suggested.
The question I will pursue in my contribution is how we can learn the lessons from not having been successful in this round—like the schemes that were unsuccessful in round 1 but successful in round 2. My authority did not bid in round 1 and was unsuccessful in round 2, but it certainly plans to submit an amended scheme in round 3. I want to develop this argument a little further, but I will give way to the hon. Member for Glasgow North East (Anne McLaughlin) , as she was very kind and generous in giving way to me.
Anne McLaughlin
With all that the right hon. Gentleman has just said, how does he explain the fact that Glasgow City Council officers were told that their bids were good and were scoring well, that they should expect to get some of them and that it was just a question of how many, but then, at the last minute, Ministers intervened—if this is not party political, I don’t know what it is—and said they were changing the goalposts? Anybody who got funding in round 1—we had had funding for one project—was no longer eligible, which wasted £500,000 of officer time. If that is not political intervention, how does the right hon. Gentleman explain it?
Alun Cairns
I will wait for the Minister to respond on that, but if the hon. Lady’s local authority had sufficient grounds to suggest party political interference, a judicial review would clearly find in its favour, and the Minister would have to explain the issue. The alternative is that the hon. Lady is seeking to make party political points but is not prepared to follow them through. I am just as disappointed as she is, but I am determined to learn the lessons in order to ensure that my project—amended and strengthened—succeeds in the next round, in the same way that those that failed in round 1 succeeded in round 2.
In reality, projects in Labour-run Cardiff—in Cardiff South and Penarth and in Cardiff Bay—received £50 million from the scheme, in addition to the £2.5 billion that has been spent in recent years. I want to understand why those projects qualified and not the project in Barry—a community that has been left behind for many years by the Welsh Labour Government—when the policy’s whole purpose and motive is to ensure that communities that have been left behind by various Governments can be successful. Similarly, in the neighbouring authority of Bridgend, a project to rebuild the Grand Pavilion will play a part in attracting further visitors to the area. However, that project does not have the same economic strength as the marina in Barry, which would have attracted at least £50 million of private development.
Will the Minister make officials available to go through the bids line by line, detail by detail, so that we can learn from why we have not been successful—I say that in the most positive way—and why other communities have been? On the face of it, they did not appear to have such strong applications, given what they will have received under wasted European-aided projects in recent years.
Since 1999, Wales has received close to £5 billion in European aid investment. Despite that, under the leadership and stewardship of the Welsh Government, to whom economic development is entirely devolved, Wales’s relative gross value added has fallen back significantly, and Wales has become the poorest part of the United Kingdom. That is why I am determined that the levelling-up fund, or the precursor to what will become the shared prosperity fund, will ensure that we have a much more business-focused, wealth-creating, economically regenerating package of projects, rather than some of the European-aided projects administered and led by the Welsh Government, which are now laughed at.
I remain disappointed, but I am absolutely determined that the Barry Making Waves project will succeed in round 3 with the Minister’s help.
Alison Thewliss (Glasgow Central) (SNP)
I thank my hon. Friend the Member for Glasgow North East (Anne McLaughlin) for securing the debate.
Back on 29 July, during a Conservative hustings in Tunbridge Wells, the now Prime Minister said:
“I managed to start changing the funding formulas to make sure areas like this are getting the funding they deserved. We inherited a bunch of formulas from Labour that shoved all the funding into deprived urban areas and that needed to be undone. I started the work of undoing that.”
What a cracking job he appears to have done.
I stand here extremely disappointed that the two bids from my constituency were not successful—although I am not here to be part of a greetin meeting—because the odds were stacked against us by the UK Government and the way in which they allocated the fund. They set up a competition based on pitting areas against one another instead collaborating. They chose small projects where they can go and cut a ribbon, rather than those based on strategic planning and what communities actually need—that grassroots approach that is central to successful levelling up. Indeed, if the Union is such a great success, why does it need so much levelling up? That is another question for the Government.
The first bid in my constituency that I want to talk about concerns the People’s Palace and Winter Gardens, which celebrated the 125th anniversary of its opening on 22 January. At the time of its opening, the Earl of Rosebery declared it would be
“open to the people for ever and ever.”
The Victorians were very ambitious, but they had not figured out how to maintain a glasshouse in Glasgow 125 years into the future, so part of our bid was around the significance of the People’s Palace to the city of Glasgow. It is part of the history and heritage of our city and is tied into further heritage efforts, leading down from Glasgow’s historic cathedral, along the High Street and the Saltmarket to Glasgow Green, a place where people would gather to protest, as they still do today.
That bid, however, was not successful, and I seek an explanation from the Government as to why they value Glasgow’s heritage and future so little. The People’s Palace is special: it is a place where people can gather for music and community events, and my constituents had memorial benches in the glasshouse at the rear, but they cannot now go and sit on them to remember their loved ones. I want the People’s Palace to have a future—125 years into the future, at least.
However, as my hon. Friend the Member for Glasgow North East set out, without the money from this bid, Glasgow City Council does not have the necessary funds. The Scottish Government are tight for funds as well. This money was supposed to be additional; it was supposed to replace European money that we have lost out on. According to analysis by the Scottish Government, we are getting 60% less money from these funds than we would have done from European funding. It is just not fair. Everything has been stacked against us from the start. There is less money for these projects than we would have got were we still members of the European Union. That is the Brexit dividend that Glasgow is facing.
The other project was for transport, which, again, the city of Glasgow is entitled to bid for. In the late 1960s, the city fathers decided to drive a motorway through the city centre, demolishing things. At the time of its opening, protesters stood with banners saying, “This scar will never heal.” Glasgow’s transport bid sought to heal that scar from the late 1960s by greening the city centre and ensuring that there were accessible, green, active travel routes through the city—part of the legacy of COP26 in Glasgow.
Again, I cannot understand why the Government think that project is not worthy of support. It would knit the city centre back together. It would be such a change from the road projects of times past to have a more people-centred project for our city. We had no explanation as to why that was rejected. As my hon. Friend the Member for Glasgow North East said, we were told, as was Glasgow City Council, that these bids had a very good chance of being accepted. Then, we found that the rules had been changed late in the day and that money had been spent by the council on these projects that we will never get back. That is £500,000 that the council could ill afford to lose, but it gambled on this project because it thought it was worth doing.
The other project I would like to mention is not in my constituency, so I will be very quick. I am the chair of Clyde Gateway—I draw Members’ attention to my entry in the Register of Members’ Financial Interests—which is a project to tackle the post-industrial legacy of that part of Scotland by dealing with historic chromium contamination in Shawfield. It had the full support of the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier). I can think of few better projects than one that would remove contamination from the ground, allowing for development to go ahead and new jobs to be created in the east end of Glasgow and into South Lanarkshire.
The Minister has many questions she needs to answer, but why does she think that none of those projects is worthy of support?
Rachael Maskell (York Central) (Lab/Co-op)
I am not here to defend the bid from City of York Council—the Lib Dem-Green council could have put its focus on real levelling-up projects—although I would be interested to hear the Minister’s justification as to why it did not receive funding. We have other projects into which we could put that money to really level up York, but I am here to critique the process itself. It is evident to all that this is about justifying funnelling funds into pet projects in particular seats and granting a few other funding bids to justify that.
I want to focus on how we can really level up. I follow the work of Professor Philip McCann, the chair of urban and regional economics at Alliance Manchester Business School, and it would be worth while for the Minister to read some of his work. He talks about economic growth and how it can be achieved—not through pet projects and a piecemeal approach, but by ensuring that we have a strategy to drive forward economies and to see the regeneration that places like York desperately need. Indeed, that is happening elsewhere in Europe—take Germany, where that regional focus is well understood.
I draw the Minister’s attention to evidence given to the Levelling-Up and Regeneration Bill Committee by Professor Dame Ottoline Leyser of UKRI, who stressed the importance of growing the cluster economy, as did Andy Street and Tracy Brabin. These people are leading their regional economies, and recognise how to bring about advantages for it—how to bring together partnerships between universities, businesses, wider stakeholders, and communities. Focusing on pet projects does not achieve that. It may achieve a photo on an election leaflet, but will not make the economic switch that is so desperately needed in many communities like mine. Gordon Brown’s recent paper on constitutional reform set out that we need to move not only resourcing but decision making into local communities, so that we can spring forward with an economy that will work for everyone.
We have a rail cluster in York, with 5,500 highly skilled jobs. We have the York Institute for Safe Autonomy, and investment in leading companies is coming into our city. Why the Government are dithering over another project, the headquarters of Great British Railways, is beyond me. Those headquarters would show the country how we could grow an economic cluster. We could use levelling-up money strategically to grow it further, creating high-quality jobs for my constituents, and jobs across the region.
I point the Minister to the BioYorkshire project, which is creating 3,000 green collar jobs. That will be a green new deal for Yorkshire. There will be regional hubs in rural and coastal areas. It will make such a difference, not only for my city but for the whole region. It is levelling up that starts at the core and then builds out. That, academics say, is exactly how to build an economy for the future, how to spend taxpayers’ money wisely, and how to ensure that growth builds momentum; it is not a matter of having piecemeal projects. That is the kind of strategic approach that a Labour Government would bring in, because we understand how important it is to invest in the future and to grow out our economy. In my city, we are building the biosciences and focusing on rail, which are economies for the future, as well as creating clusters around culture and heritage. We see levelling up as an opportunity for the future, but it must be done in a strategic way, not piecemeal, as this Government have done.
Chris Stephens (Glasgow South West) (SNP)
It is a pleasure to see you in the Chair, Sir Christopher. I will depart from my prepared text, because the allegations made by my hon. Friends the Members for Glasgow North East (Anne McLaughlin), and for Glasgow Central (Alison Thewliss), are so serious that they require an immediate answer from the Minister, when she responds. Local authority officials spend a great deal of time preparing bids, only to be advised at the last minute that because money had been given in a previous round, they were knocked out of the competition. I want the Minister to confirm that was the case. If it was, it is scandalous, and there are grounds for looking at the process legally, as was said. It is astonishing that local authorities have been put in this position. If local authorities were told at the start that a bid was ineligible if the authority received funding in round 1, they would not bother applying for round 2. Or was this a last-minute decision?
Chris Stephens
I am conscious of time; I apologise to the right hon. Gentleman. [Interruption.] He has had more than one bite at the cherry.
This is so serious. Local authorities would not have applied in round 2 if they had been told that because they got something in round 1, they would not be successful. The Minister needs to tell us when local authorities were advised of that.
There are also questions about scoring. We would think that there would be scores, and that any local authority, whether successful or not, could say to the Department for Levelling Up, Housing and Communities, “Can we see our scores, please? Can you tell us where we went wrong, and why we were unsuccessful, so that if we apply in the next round, we can put that right?”. When will local authorities be told their scores? Or is it the case, as my hon. Friends allege, that local authorities were told in the week leading up to the announcement that they would be successful, and then were suddenly told that they would not be? There is something not quite right about the process; something smells here.
Can the Minister tell us how many local authorities were advised that they would get something, and then did not? I have heard that Glasgow officials were told that their bids were excellent—in fact, that they were even told, “Tell us which ones you are prioritising out of the seven.” I hope that the answer was Linthouse, but I do not know whether Glasgow officials suggested it. They were then advised that they were not getting money. That is absolutely scandalous, and it is no wonder that Members from across the House are suspicious about the whole process and the lack of transparency that seems to envelop it, given what appears to be a last-minute change by Ministers.
Knowing who made the decision is critical to this debate. Who said that if a local authority was successful in round 1, it would not get money in round 2? As a principle, that is absolutely wrong. The hon. Member for Clacton (Giles Watling) made the reasonable point that there are areas in the country that are deprived, and I do not see any reason for deciding that because money was allocated to a local authority in round 1, it should be ineligible for round 2. He made a number of points about deprived areas needing a succession of funds, and he argued that position rather well on behalf of his constituency and his local authority. There is no reason at all why a local authority should not qualify in both rounds, so something is not quite right here.
I hope the Minister will answer those questions, because people listen to statements from the current Prime Minister—we have had a number of them over the past year. His comments about taking money away from deprived areas are amplified by the allegations that have been made this afternoon. People now think that the scheme is some sort of pork barrel exercise aimed at returning as many Conservative MPs as possible in the next election. I will leave it there; I hope that the Minister will respond to my points.
Alex Norris (Nottingham North) (Lab/Co-op)
It is a pleasure to serve with you in the Chair, Sir Christopher, and to speak in this debate on behalf of the Opposition. I congratulate the hon. Member for Glasgow North East (Anne McLaughlin) on securing the debate, and on the very powerful case she made. I will cover the point about wasted time that she and other colleagues made, as well as other important points that were raised.
As usual, my hon. Friend the Member for Weaver Vale (Mike Amesbury) stole one of my important lines; the point made by the Conservative Mayor of the West Midlands, Andy Street, is the place to start:
“this episode is just another example as to why Whitehall’s bidding and begging bowl culture is broken”.
Perhaps Ministers do not want to take it from us Labour Members, but there is clearly the same feeling even within the Conservatives’ ranks. That view must be right, because over a year on from the White Paper, what have the Government got to show for this policy? There have been bodged bidding processes; millions were wasted in “Hunger Games” style bidding processes; bids have been eaten up by inflation; not a single levelling-up director has been appointed; and there have been broken promises on development funding. That is before we get to the fact that regional inequalities are widening, bus services are being lost up and down the country, train cancellations are at a record high, and people cannot get to see their GP or into hospital. Nothing works in this country.
Round 2 of the levelling-up fund would not have solved all those problems, but it would have been a great place to start steadying the ship; however, it has been a calamity. What possible system could exclude Hemsworth, for which my hon. Friend the Member for Hemsworth (Jon Trickett) made the case, but include the Prime Minister’s constituency? As the hon. Member for Glasgow Central (Alison Thewliss) said, how could that not set the Prime Minister’s words echoing around our heads—words that he meant, but that he said when he thought we were not listening? How can that not be what we take away from this process?
I agree with a lot of what the hon. Member for Clacton (Giles Watling) said about coastal communities, and hope that we get a better opportunity to discuss the issue at length. We are pleased for those communities that have been successful. Local government has lost £15 billion since 2010, so communities up and down the country are desperate for investment, but we have to be honest: set against that £15 billion loss, this round 2 gives back £2.1 billion. The Government have nicked a tenner from our wallets and expect us to be grateful for getting not even £2 back, but even those areas that have won individually are losers too. For example, it is brilliant that Norfolk County Council has secured £24 million to improve transport in King’s Lynn. We want that to happen. However, we need to take into account the money that Norfolk has lost from cuts to the local authority budget in the last four years alone—back to the time of the Prime Minister who promised levelling up, the right hon. Member for Uxbridge and South Ruislip (Boris Johnson). Even if we include that £24 million, Norfolk is £146 million worse off in real terms. With levelling up, even those who win are actually losers.
The analysis of why levelling up has failed, is failing and sadly will fail has been around for a while. Subsequent revelations about how the bids were handled only add to the insult. We now know that many local authorities that submitted bids, including mine, never stood a chance of winning, because Ministers later excluded them from selection.
So much went into those bids. We have heard about the financial impact of the internal work in local authorities. There were huge efforts there. There were also huge efforts to engage with our local communities on what they needed, and hope was built up that they might get something back. They never had a chance. It was cruel to put them through that. Any answer from the Minister today ought to start with an apology, and a commitment —as the right hon. Member for Vale of Glamorgan (Alun Cairns) and the hon. Member for Torbay (Kevin Foster) said— to real, meaningful feedback, so that we know how things might be different in the future.
It does not have to be this way. My hon. Friend the Member for York Central (Rachael Maskell) made that point very well. She and I spent a lot of time on the Levelling-Up and Regeneration Bill. What we put into that Bill will go into our future manifesto, which we will put to the country. We could scrap the beauty parades, the bidding processes, the deals, and the scoring out of sight. Instead, we could have a sustained generational transfer of power and resources out of Whitehall into our local communities, targeted at need and for impact. Without strings attached, we would get resources to those who know best: local people.
The Government have had their chance. We have seen multiple rounds of bidding. It has been over a year since the White Paper. We could ascribe any meaning, value or motivation to what they have done; I am not interested in that. What I know is that they cannot and will not do what they set out to do. It is time that they stepped aside for those who will.
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Dehenna Davison)
It is a pleasure to serve under your chairmanship, Sir Christopher. I congratulate the hon. Member for Glasgow North East (Anne McLaughlin) on securing this debate. The issue matters to every single Member of the House, whether or not they are present today.
Levelling up is about how we rewire the economic geography of the whole country, and how we create growth and opportunities in areas that have been starved of both those things by successive Governments for years. That is what levelling up is all about. I found it personally offensive when the hon. Member for Glasgow North East suggested that this Government believe that those living in deprived areas are effectively there though their own choices and actions. That is absolutely not the case. I grew up in a deprived area. I lived through that and witnessed it, and I know exactly what it is about. I find it personally offensive for her to suggest that is what this Government are about, when we have put levelling up at the core of our policy and agenda.
Anne McLaughlin
I am sorry to have offended the Minister personally, but I am very surprised to hear her say that she does not recognise that this is ideological, or that people in these deprived communities are being blamed. She needs to spend more time sitting in the main Chamber and listening to the language that her colleagues use. They absolutely do blame the most vulnerable people for the situation that they are living in, and the evidence is that the Government are not doing anywhere near enough to help them. The evidence is right in front of us.
Dehenna Davison
To say it is ideological is absolute nonsense. I will not be taking further interventions on that point, because I do not think we will find agreement in the Chamber today.
The levelling-up fund is one of the centrepiece interventions that the Government have put in place to try to tackle levelling up, and to breathe new life into some of the areas that really need it. I say “one of” deliberately, because it is set against the backdrop of a whole range of other interventions, some of which I will come on to later. I know that Members across the House, in conjunction with their local councils and other local stakeholders, have put an awful lot of time and effort into submitting bids to the levelling-up fund. I express my personal thanks to every council officer who put their time and energy into it. I know it is a tough process, and I am grateful to them for that time.
It matters to me as the levelling-up Minister, and I hope it matters to the hon. Members present, that the decision-making process is a sound one that is free from political interference and undue influence. I am glad to have the opportunity to outline how the decision-making process has worked. I assure Members that even if the bid was not successful, their efforts by absolutely no means were wasted.
In the short time I have left, the obvious place to start is with the actual process itself. I know local leaders and hon. Members have seen with their own eyes the impact that the first round of levelling-up funding has had so far, with 105 bids receiving £1.7 billion to drive regeneration and growth in overlooked areas. That impact is the reason we received such an overwhelming response to the second round, with over 500 bids received, totalling almost £9 billion. To put that into perspective, that compares with about 300 bids received in the first round.
Given the large discrepancy between the value of bids received and the amount available to allocate, sadly we were never going to be able to fund projects in every area. That being said, the fund has a clear and transparent process for determining how bids are selected. Each bid is assessed by Government officials, both in my Department and in the Department for Transport, against published assessment criteria, with the highest-scoring bids being shortlisted.
To ensure that there is a fair spread of bids across the UK, funding decisions were made by Ministers based on the assessment score and by applying wider considerations, such as geographic spread and previous investments. All of that was part of the technical notes we published along the way. The relative need of a place is also baked into the process. In this round, 66% of investment went to category 1 places—that figure was actually higher in round 1. The second round will be funding areas in Great Britain that have not received funding before to ensure that investment reaches as many places as possible across rounds 1 and 2.
As we did for round 1 of the fund, we published an explanatory note after the announcement with details of our assessment and the decision-making process. It was published on gov.uk, and it made crystal clear that Ministers did not add or remove bids from the funded list. For completeness, I will cover both the assessment and the decision-making processes described in the explanatory note. Each application was assessed impartially by officials against four criteria in Great Britain and three criteria in Northern Ireland. These were the economic case and if it was worth the cost; deliverability and if it could really be done and delivered; the strategic fit, how it would further levelling up in the area and if it would be in the interests of the community; and characteristics of place, or how much the place needs that type of investment—that was a consideration purely for Great Britain.
Officials then provided shortlisting advice to Ministers, who agreed the approach in line with the published guidance. More specifically, they agreed that the Great Britain and Northern Ireland shortlists should comprise bids that scored the highest overall and those that scored at least average or higher across strategic fit, value for money and deliverability, with a minimum value for money score. They also agreed cut-off scores for both shortlists. I recognise that it is an incredibly time-consuming process, and I appreciate the frustrations of Members who backed bids that were not shortlisted. Although it does not change the outcome on this occasion, full feedback will be coming, and I will try to touch on that more if I have a little time left.
During the final stage of the assessment and decision-making process, Ministers from my Department, the Department for Transport and His Majesty’s Treasury met to agree the final list of successful bidders. Again, we noted that the value of even the shortlisted bids was far in excess of the £2.1 billion available and, unfortunately, difficult decisions would therefore be needed. To achieve that, Ministers took the following sequential decisions. They took account of which local authorities had received funding in the first round, noting that that would help to maximise the geographic spread of investment across rounds 1 and 2, in line with the two wider considerations originally published in the fund’s prospectus. These were
“taking into account other investment in a local area”
and
“ensuring a fair spread of approved projects”.
Dehenna Davison
I do not have time, I am afraid. Each local authority was then capped at one successful bid in round 2—the highest scoring—noting that that would help to focus resources for delivery in a challenging economic environment. At that point, the highest-scoring projects remaining in Scotland and Wales were funded to ensure a fair spread of projects in Scotland and Wales until the minimum public commitments of 9% and 5% respectively over the first and second rounds were met. The highest-scoring projects remaining in Great Britain were funded until funding any more projects would have exhausted the funding available for Great Britain.
At that stage, there were two international territorial-level regions of Great Britain that had not received any funding in the second round, despite having bids on the shortlist. Again, prioritising the additional considerations of ensuring a fair spread of approved projects and so on, those two were brought into play, with Ministers agreeing to deselect a handful of the lowest-scoring bids across the north-west, London and Wales. Those were the regions and nations that significantly exceeded their guided allocation, taking into account historical regional investment from 2017-2022. As a result, and following a further quality assurance by officials at that stage, 101 bids were successful in Great Britain and 10 were successful in Northern Ireland. To reiterate, Ministers approved the selection of bids without adding or removing any individual bids from the funded list. The process was led by officials, aided by Ministers, to try to achieve the aims that were set out in the original prospectus to ensure a good geographic spread.
Dehenna Davison
I do not have time, I am afraid.
That brings me on to a point that we absolutely cannot lose sight of in these discussions: there will be a third round of the levelling-up fund. We will be announcing details of that incredibly soon.
Dehenna Davison
I am afraid I cannot commit to a date yet, but we are working at pace to ensure that we draw up a fund that works and is quickly deliverable to ensure that we can get spades in the ground and get some of these projects delivered.
I do not have very long, but I will try to cover off some of the other points that have been made if I can. Feedback was raised by a number of hon. and right hon. Members, including my right hon. Friend the Member for Vale of Glamorgan (Alun Cairns), the hon. Member for Glasgow South West (Chris Stephens), my hon. Friend the Member for Torbay (Kevin Foster) and the hon. Member for Glasgow North East (Anne McLaughlin). Feedback will be coming soon; we are aiming to get it out in writing initially. We want to ensure that the feedback is detailed enough to be of use, so we do not want to rush it. I have missed a lot of points, so I apologise. I will follow up a lot of those in writing, but I am very pushed for time at the moment.
Anne McLaughlin
We do not really need feedback. The Minister has just given us the feedback. The feedback is: the Minister has come in at the last minute and said, “If you have had round 1 funding, you are not getting round 2 funding.” I just want her to answer my question: is she going to cover the £500,000 that Glasgow City Council has had to pay to do this when there was absolutely zero point? Where is that money supposed to come from? I do not think it should come from the people of Glasgow.
Dehenna Davison
Capacity funding was made available to local authorities in Scotland to help draw up bids. That is relevant to the point the hon. Lady is making.
Anne McLaughlin
We did not get it.
Question put,
That this House has considered the Levelling Up Fund round 2 bidding process.
The Chair’s opinion as to the decision of the Question was challenged.
Question not decided (Standing Order No. 10(13)).
Written Statements
(1 year, 9 months ago)
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Computer Misuse Act 1990: Review
(1 year, 9 months ago)
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The Minister for Security (Tom Tugendhat)
The Government are reviewing the Computer Misuse Act 1990 (CMA/the Act) and this statement provides an update on the progress of the review.
It is essential that the UK has the right legislative framework to allow us to tackle the harms posed to our citizens, businesses and Government services online. As part of this, we initiated a review of the CMA, and following a call for information on the CMA, we have been considering the proposals made in response. A number of proposals were put forward, both for changes to the Act itself, and for additional powers to allow law enforcement agencies to more effectively tackle the offences covered by the Act.
We will issue a formal consultation today to seek views on a number of proposals made during the consultation, including:
Considering the development of a new power to allow law enforcement agencies to take control of domains and internet protocol (IP) addresses where these are being used by criminals to support a wide range of criminality, including fraud and CMA offences.
Developing a power to require the preservation of computer data, ahead of its seizure, to prevent it being deleted where it may be needed for an investigation. While requests from law enforcement agencies for preservation are generally met, the UK does not have an explicit power to require such preservation, and having such a power would make the legal position clear.
Considering whether a power to take action against a person possessing or using data obtained by another person through a CMA offence, such as through accessing a computer system to obtain personal data, would be of benefit, subject to appropriate safeguards being in place. Currently, the CMA covers unauthorised access to computer, but the unauthorised taking or copying of data is not covered by the Theft Act so it is difficult to take action in these cases.
In addition, a number of other issues were raised during the call for information, relating to the levels of sentencing, statutory defences to the CMA offences, improvements to the ability to report vulnerabilities, and whether the UK has sufficient legislation to cover extra-territorial threats. As part of our work to improve the cybersecurity of the UK, we will work with a wide range of stakeholders with a policy interest in these areas, to ensure that any proposals that we take forward will deliver enhanced protection of the UK in cyberspace.
A copy of this consultation will be placed in the Libraries of both Houses and published on gov.uk.
[HCWS546]
Government Department Reorganisation
(1 year, 9 months ago)
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The Prime Minister (Rishi Sunak)
To ensure the whole of Government are geared up to deliver for the British people, with the approval of His Majesty the King, I have today created four new Departments.
The changes will ensure the right skills and teams are focused on my five priorities: to halve inflation, grow the economy, reduce debt, cut waiting lists and stop the boats.
A new Department for Energy Security and Net Zero has been tasked with securing our long-term energy supply, bringing down bills and halving inflation. The move recognises the significant impact rising prices have had on households across the country as a result of Putin’s illegal war in Ukraine, and the need to secure more energy from domestic nuclear and renewable sources as we seize the opportunities of net zero.
A dedicated Department for Science, Innovation and Technology will drive the innovation that will deliver improved public services, create new and better-paid jobs and grow the economy. Having a single Department focused on turning scientific and technical innovations into practical, appliable solutions to the challenges we face will help make sure the UK is the most innovative economy in the world.
A combined Department for Business and Trade will support growth by backing British businesses at home and abroad, promoting investment and championing free trade.
A re-focused Department for Culture, Media and Sport will recognise the importance of these industries to our economy and build on the UK’s position as a global leader in the creative arts.
Finally, and as part of these changes, responsibility for national security and investment policy, and the associated teams, will move from what was the Department for Business, Energy and Industrial Strategy to sit under the Chancellor of the Duchy of Lancaster in the Cabinet Office.
These machinery of Government changes will be included in main estimates 2023-24 in order to reallocate the relevant budgetary provision and other spending authority. The accounting officers in the transferring Departments will continue to have formal responsibility for the transferred functions up until the point at which the supply estimate and related legislation is approved. Ahead of this time responsibilities will be agreed in the usual way through the exchange of accounting officer letters.
An explanatory note providing detail on each of these changes has been placed in the Library of both Houses and published on gov.uk.
[HCWS547]