Grand Committee

Wednesday 1st March 2023

(1 year, 9 months ago)

Grand Committee
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Wednesday 1 March 2023

Arrangement of Business

Wednesday 1st March 2023

(1 year, 9 months ago)

Grand Committee
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Announcement
16:15
Lord Geddes Portrait The Deputy Chairman of Committees (Lord Geddes) (Con)
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If there is a Division in the Chamber while we are sitting, which I am advised is likely, this Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.

Committee (6th Day)
Relevant document: 23rd Report from the Delegated Powers Committee
16:15
Amendment 160
Moved by
160: After Clause 50, insert the following new Clause—
“Office for Financial Regulatory AccountabilityCreation of an Office for Financial Regulatory Accountability
(1) The Treasury must, as soon as practicable after the end of the period of 12 months beginning with the day on which this Act is passed, by regulations make provision to create a body corporate called the Office for Financial Regulatory Accountability.(2) It is the duty of the Office to examine and report on the performance of the FCA and the PRA.(3) The Office must perform its duty objectively, transparently and impartially.(4) The functions of the Office are to be exercised on behalf of the Crown.(5) Regulations under subsection (1) are subject to the affirmative procedure.”Member’s explanatory statement
This amendment would require the Treasury to create an Office for Financial Regulatory Accountability, with duties to provide independent and impartial analysis to Parliament and the public of the financial regulators’ performance against their statutory objectives and regulatory principles.
Lord Bridges of Headley Portrait Lord Bridges of Headley (Con)
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My Lords, I once again declare my interest as an adviser to and shareholder in Banco Santander. It gives me great pleasure to open today’s proceedings. After several days of debate on this Bill, I get a sense that there is widespread agreement from all sides of the Committee on one point: the measures in this Bill to improve accountability and scrutiny are insufficient and must be strengthened. While the regulators are getting more powers, there is no commensurate increase in their scrutiny and accountability. That comes at a time when many of us were already concerned that that level of scrutiny is too low and the accountability too weak. The breadth of that concern is shown by the fact that there is cross-party support for this amendment. I thank those who put their names to it.

That said, as I have said before, in addressing our concerns we need to proceed with some care. We must get the balance right between accountability and independence and we need to avoid new forms of accountability and scrutiny, politicising the regulatory system and thereby creating uncertainty. With those caveats in mind, we need to do three things, all of which require amendments to this Bill. We need to improve the reporting by the regulators; improve parliamentary scrutiny; and—this is the purpose of these amendments, Amendments 160 to 166, to which I have put my name—improve the quality of scrutiny and accountability by providing independent and impartial assessment and analysis of two things.

First, we need an assessment of the FCA’s and PRA’s overall performance in meeting their statutory objectives and regulatory principles under FSMA 2000. Secondly, we need to provide analysis of the impact assessments for specific pieces of financial regulation so as to determine how those regulations are contributing to meeting the regulators’ objectives, also under FSMA 2000. That can be achieved, as the amendments set out, by creating an office for financial regulatory accountability, a specialist, independent, statutory advisory body, which would work to a charter set by the Government and laid before Parliament. To be clear, this is not a new concept. It has been proposed in various guises by others—and here I am thinking particularly of the noble Baroness, Lady Bowles, as well as the International Regulatory Strategy Group in the City of London and the London Market Group, with which I have worked on this proposal. While I accept full responsibility for any flaws in these amendments, I cannot take credit for the idea.

I shall not waste your Lordships’ time in giving a line-by-line description of each amendment, from Amendment 160 to Amendment 166, which set out the body’s role, its powers and duties and its membership and financing. I think, or rather I hope, that they all speak for themselves—and for that I am thankful for the work of the Delegated Powers and Regulatory Reform Committee, which set out precisely how these kinds of bodies should be set up and whose approach these amendments follow.

I am sure that the amendments could be improved and I would be delighted to discuss with any of your Lordships, on any side of the Committee—in particular, my noble friend the Minister—how we might do so. Rather than regurgitate what the amendments say, instead I shall address questions that may be in the minds of those who may be wary or sceptical of the need for this body.

First, is it not going to duplicate the work of the Treasury Select Committee? No, it will not. As we all know, parliamentary committees are there to hold regulators to account, not to provide the rigorous analysis needed to do so—nor do they have the capacity to do so, as we have discussed previously. Furthermore, few question whether the OBR duplicates the work of parliamentary committees; it provides analysis for Parliament and everyone else to use. The same applies here.

Secondly, will not this body duplicate the work of the cost-benefit analysis panels that the FCA and PRA will now be required to set up? No, it will draw on their work and analyse and interrogate it, but it will also take a wider view. Perhaps more important, this new body will be utterly independent of the regulators, not a body created by them—nor, for that matter, will it duplicate the work of the Regulatory Policy Committee, whose focus is on government departments.

Thirdly, what about cost: can we afford to set up this body? Of course, setting up a new body will carry cost, but I argue that this will be outweighed by its benefit. Let us not forget the enormous contribution that financial services make to our national coffers. They demand, if not deserve, special attention to ensure their regulation meets the objectives that Parliament has set.

Fourthly, will not this simply be a regulator of the regulator? No, as I have said, its role and purpose is one of analysis, to improve and inform scrutiny by and accountability to Parliament and others, period.

Finally, and most important, will this new body undermine the regulators’ independence? I argue—this is crucial—that it will do the reverse. If we have a source of independent analysis of their actions, we can have a debate about that based on fact. It should therefore strengthen the legitimacy of regulators which are fulfilling their objectives and acting in a proportionate and timely manner.

I cannot see any real objection to the overall concept. As I said, I am sure that the amendment can be improved and I look forward to hearing from others how that might be done. Given the wide support that it has, I very much hope that my noble friend the Minister will give it a supportive reply. Many of us want to avoid unnecessary confrontation with the Government on Report, not just on this point but on all the other proposals we have debated that would strengthen accountability and I stand ready to work with her and others to turn this idea into reality. I beg to move.

Lord Tyrie Portrait Lord Tyrie (Non-Afl)
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I am surprised that nobody else is rising to support this; I was hoping that everyone would. I certainly agree with just about everything that the noble Lord, Lord Bridges, said, but then again I agreed with just about everything that the noble Baronesses, Lady Bowles and Lady Noakes, the noble Lord, Lord Forsyth, and others said on 20 February, about all this. We are all agreed because we can all see the same problem. As has been suggested, the Bill confers huge new powers on the regulators, repatriated from the EU, without making any meaningful suggestions to make them more accountable when they exercise those powers. I will support any and all amendments that improve scrutiny and accountability until and unless the Government come forward with a meaningful proposal of their own. I will come to how they might go about that in a moment.

Our first job as a Committee must be to make sure that the Government grasp that we just cannot carry on as we are. I am not sure that Ministers and, in particular, the Treasury have fully grasped how inadequate the existing structure of accountability is. There are four major bodies that should be contributing and all of them, in their various ways, will be defective. There is the NAO, but we cannot rely on VFM studies alone; the Treasury is frequently conflicted in its relationship with both the regulators; nor can we rely on the boards of those bodies. In principle, there should be some rigorous internal challenge—and that achieves a lot in some regulators—but in practice the boards are all too easily captured by the senior executives and there is a massive problem of asymmetric information.

As the noble Lord, Lord Bridges, said, parliamentary Select Committees should be on the case, and frequently they are, but on the current resources available to them it is simply not reasonable to expect them fully to plug the gap, particularly given their range of other responsibilities —at least not in enough detail on a sustained basis to make the difference that I think most of the Committee thinks is necessary.

The clearest evidence that something needs to be done is the performance of the regulators themselves. Among the many criticisms of the financial regulators have been neglect of some of their objectives and duties, a box-ticking culture, excessive and unnecessary regulation stifling innovation—the “confetti before quality” problem—and inadequate ex post scrutiny of existing rules, without which a steady one-way ratchet develops right across the regulatory piece. A slow and legalistic approach is also a frequent complaint.

In defence of the financial regulators, for the most part they are in much better shape since the crash. That shook them to the core—indeed, one of them was split. Both the Bank and the FCA provide much better explanations for their actions and decisions than prior to the crash. No doubt some of the criticisms have been levelled unfairly, but not all of them.

In any case, we are not in a steady state. With new powers conferred by the Bill will come more of what has come to be known as the restless regulator syndrome. As the regulators identify new problems—real, imaginary or media fuelled—the risk must be of further inadequately considered additions to the rulebook. If the Government can be brought to agree that something needs to be done, one or more of at least three routes to forcing greater accountability are available.

First of all, and in principle the most attractive route for the Government, could be to try to pre-empt pressure from Parliament by creating their own much more rigorous scrutiny team at the heart of Whitehall, probably in the Cabinet Office. A body such as that could do some good work, but I am not convinced that it could fend off the vested interests that all too easily cluster around the sponsor departments at the moment and will no doubt cluster around such a group in the Cabinet Office over time.

A second approach has been set up by the noble Lord, Lord Bridges, today. It is the statutory independence of the body he proposes that makes it particularly attractive. Like the OBR, on which I think it is modelled, it has a reasonable chance of fending off those lobby groups. Therefore, I will certainly support his proposal if it is put to a vote.

But by far the most straightforward approach would be for Parliament to plug the accountability gap directly, as colleagues from all sides of the Committee have suggested, by creating its own specialist scrutiny committee. To be effective, a new committee would need support from a small group of specialists in financial regulation, much as the PAC is supported by audit specialists from the NAO, now a much larger group. This body would need only a small group, but it cannot hope to rely on the kind of very ad hoc tiny group, without institutional memory across Parliaments after elections, that Select Committees rely on at the moment.

Furthermore, in my view the committee—the Joint Committee, if some want that—would need to empower the specialists in a number of ways. Among the tools that should be considered are powers to see all people and papers, the authority to embed experienced and specialist staff into the Bank or the FCA where a particular concern has been identified, and the power to attend key decision-making committees to check out the quality of governance in regulators. In theory, all Select Committees have those powers already, but in practice, for various reasons, few use them fully. Those powers were all deployed to good effect by the Parliamentary Commission on Banking Standards without being disruptive to the work of regulators.

My main concern about this whole issue is that the Government will now listen carefully to what we have all said and murmur friendly noises but do nothing. The Minister told the Committee on 20 February that

“it is not for the Government to impose”—[Official Report, 20/2/23; col. GC 394.]

a scrutiny tool on Parliament. I understand where she is coming from but, as she well knows, that is not a strong line. If the Government come forward with a worked-up proposal for a new committee with adequate staff support—that is essential—and commit to supporting a change to Standing Orders to implement that reform, it will happen. If they did so, I for one would reconsider my support for statutory reform of scrutiny, and I think many others would too.

I think the Minister is listening—she certainly is now. I hope that her department and a couple of Treasury Ministers in the Commons listen to her and that she will tell us in a moment that she has been listening carefully and agrees to this amendment or to the lion’s share of what was said on 20 February.

16:30
Lord Hunt of Kings Heath Portrait Lord Hunt of Kings Heath (Lab)
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My Lords, I have added my name to Amendment 160, the principal amendment in the name of the noble Lord, Lord Bridges, to show that there is support for him all round the Committee and to show the Government, too, that at some point the House of Lords is going to make its views known when it comes to voting on the Bill. It would be good to see the Government acknowledge that they are going to have to do something to strengthen the accountability of these arrangements.

My principal concern is about the integrity of Parliament and the more general issue of the accountability of so many of the regulators, public bodies and quangos that we have established, because I see them as an extension of the Executive, in many ways. They do functions which traditionally the Executive may themselves have done. We are talking about financial markets but a recent example of extraordinary behaviour is that of the Arts Council, in its perverse decision to try to destroy opera in this country by the abolition of English National Opera and the withdrawal of a huge grant from Welsh National Opera for touring, when the Arts Council’s mission is ostensibly that it is supposed to be encouraging the touring of such companies.

The Arts Council apparently did that because the then Culture Secretary, Nadine Dorries, said that she wanted more money to go out into the regions for levelling up. That was translated into the destruction of a centre of excellence which had been very committed to inclusivity. At that point, she denied that she had ever wanted ENO to do that, but the Arts Council remains unaccountable to Parliament for that action and Ministers say, “It is nothing to do with us”. We are left in a quagmire as to how to know, in the end, who was accountable for what seems, on the face of it, a crass decision.

My main experience is not in financial services but in the health service, which is awash with regulators, public bodies and quangos. I will name just three: NICE, NHS England and the Care Quality Commission. They have huge influence and power over the affairs of the National Health Service but it is very difficult to say that they are accountable to Parliament at all. If we seek to ask questions about their performance in questions or debates, or meetings with Ministers, we will be told, “That’s nothing to do with Ministers”.

When it comes to financial services, I am therefore at one with the noble Lord, Lord Bridges. It is surely in the interests of the United Kingdom, in any case, that our regulatory arrangements be seen to be of the first order. I agree with him when he talked about the balance. We want the regulators to be seen to be independent, and robustly so, because that adds to their credibility. We clearly want to avoid politicisation, because that would undermine the esteem in which they would be held nationally and internationally. However, we want them to be subject to not just proper scrutiny but accountability. So far, we have heard nothing from the Government to suggest that they understand that, or why the current arrangements will not be sufficient.

As the noble Lord said, this proposal will not duplicate the Treasury Select Committee. His point about the OBR was important, because the OBR has fulfilled an important function, but I do not think anyone has suggested that it has undermined the working of Parliament or any of its Select Committees; indeed, it has enhanced what they can do. I think he was making that point when he said that his amendments will not undermine the regulators’ independence. In many ways, I think they would enhance them. This is not going to cost much money compared to the benefit it would bring and, as he also said, it will not duplicate the work of the FCA and PRA.

There is an overwhelming case for supporting this measure, alongside the previous debate about the need for a much strengthened Select Committee to carry out work inside Parliament, as the noble Lord suggested. I very much hope that the Government will listen to what he has said.

Lord Naseby Portrait Lord Naseby (Con)
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My Lords, I have added my name to this amendment, which in my judgment is absolutely vital. On 8 February, I listened to the chairman of the City of London Corporation’s policy and resources committee; I will quote a couple of points that he made on that evening. He said:

“Faced with increasing global competition”


the UK needs

“a long-term sense of direction, a programme for government, regulators, and industry to act and sustain our global powerhouse status. As a country we need a renewed focus, to adjust our compass, to be the destination that incentivises investment, thrives with talent, and commands the competition. And we need ambition and focus to achieve these goals.”

He finished by saying that we need “the courage to change” in three areas. I will quote two, which are relevant to this amendment:

“Firstly, we need to reduce frictions. That means strengthening UK policy and regulation with an effective and coherent sustainable finance framework. Secondly, we need to nurture innovation. More creativity in the market will inspire better products, which will help attract capital, firms, and customers.”


The City wants confidence in scrutiny and the supervision of the regulator. I hope that my noble friend on the Front Bench will take note of the feelings of the City. I am sure that it would be more than happy to communicate directly with my noble friend and put some flesh on the summary that I have given.

Lord Vaux of Harrowden Portrait Lord Vaux of Harrowden (CB)
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My Lords, I, too, have added my name to the amendments in the name of the noble Lord, Lord Bridges. The noble Lord explained in detail the need for the amendments far better than I can, so I will be brief. I support the noble Lord’s every word but, rather than repeating what has been said, I will comment specifically on how this would complement rather than replace the parliamentary scrutiny that is also required.

We have had a lot of discussion so far in Committee about the need for strengthened parliamentary scrutiny and accountability of the performance of the regulators, with an extraordinary level of agreement on all sides— I hope that the Minister listened to that. I strongly supported the idea of creating a bicameral committee specifically for that purpose, as proposed by the noble Baroness, Lady Noakes. Having an independent office for financial regulatory accountability would greatly assist such a committee in carrying out its work. We heard on a previous day in Committee from the noble Baroness, Lady Bowles, who is probably the expert in such matters, and from others about the enormous volume of work that scrutiny of the financial regulators will involve. That is one reason why we need a parliamentary committee focused solely on this subject. Having available independently prepared and, importantly, non-political analysis of both the performance of the regulators and the regulations themselves would make the work of the parliamentary scrutiny committee, or committees, that much more effective, enabling the focus to be on areas where shortcomings were identified, rather than wading through unmanageable volumes of information trying to find those areas.

I therefore make the point that the Minister should not be tempted to see these amendments as an alternative to the enhancements to parliamentary scrutiny that we have already discussed. Rather, she should understand that they are an important element within the three legs required for effective scrutiny and accountability, which the noble Lord, Lord Bridges, has previously explained as being reporting, independent analysis and parliamentary accountability. All three aspects should be embraced. These amendments cover the second, but please do not think that they would replace the others.

Lord Hill of Oareford Portrait Lord Hill of Oareford (Con)
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My Lords, I will speak briefly but strongly in support of this amendment and, in doing so, state my interest as the lead NED at the Treasury and as an adviser to a number of global and European financial businesses.

It is a pleasure to follow the noble Lord, Lord Vaux, because he made the point that I wanted to start with: we must not think of this as an alternative to parliamentary scrutiny. We all agree that we need much more thorough parliamentary scrutiny; this amendment would help Parliament to do its job. The point that the scrutiny is to be fact-based and analytical is key.

The proposal for the overall framework of scrutiny has an OFRA-sized hole, which this amendment would fill. It is rare to find an amendment where you cannot detect anyone who is going to lose from it, but I can see only an upside for all groups with this amendment. It would be good for the regulators, as we have heard, because it has the potential to detoxify the political debate. It would be good for the Government because it would provide a more stable, long-lasting framework. We need to get this right now because I do not know when next a Bill will come along that will enable us to look at this framework. We have been waiting for a long time, since 2016, so we need to get something that is stable and going to endure. As we have argued, it would be good for Parliament because it would aid its task of scrutiny and it would be good for the financial services sector, which is our most important contributor to tax revenue, because it would provide an analytical basis in which it could have confidence and trust. My noble friend Lord Bridges has presented the Minister with a gift horse and I very much hope that she will not look it in the mouth.

Lord Deben Portrait Lord Deben (Con)
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My Lords, I remind the Committee of my interests, including chairmanship of PIMFA, which represents financial advisers, and at Sancroft we advise a number of financial institutions on sustainability.

I merely want to say that one of the groups of people who will benefit considerably from this are those who are regulated. The fact is that we need to recover confidence in the regulator in two particular areas. The first is what I call the conflicts between regulators, for which there is really no way of unpicking them so that they can work more effectively. That is particularly true among many of the people with whom I deal almost every day.

The second reason why this is so important is that I do not believe that anyone should be unaccountable if they have a public position. I very much agree with the noble Lord opposite who talked about the terrible opera story. I just do not think regulators can do their job properly unless they look over their shoulder to the public as a whole, which is what we are talking about in this bit regarding accountability. As a Minister for 16 years, I know that one’s accountability to Parliament and the public was an essential part of doing the job properly. One had to say to one’s civil servants, “Look, we can’t do that because it really would make people feel that we were behaving in a way that was unacceptable to Parliament or to the public.”

That is the problem for the boards of these regulators, which seems to me to be one of the issues. As my noble friend Lord Bridges suggested, some say that the boards should deal with it. That is not possible unless a board is itself accountable to the public and, in that sense, to Parliament. I do not believe that you can expect the boards to do their job of saying to the regulator, “Look, I’m sorry, you really can’t do that”, or indeed, “You can and should do this”. I am not suggesting that it should always be “Don’t do it”; sometimes it should be “Do it”. Later on, for example, we will discuss the issue that in the City of London the regulator does not insist that a competent person says not only whether, for example, there are gas deposits but whether under the law of Britain those gas deposits will be able to be used, which is just as important. At the moment the regulator does not do that and there is no way of insisting that it should. I therefore strongly support what my noble friend Lord Bridges has said.

Lord Forsyth of Drumlean Portrait Lord Forsyth of Drumlean (Con)
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My Lords, this amendment is absolutely inspired. We had a debate earlier about the merits of parliamentary committees, and it was questioned whether they would have sufficient resource to do the work. I am very taken by what the noble Lord, Lord Tyrie, had to say. At the risk of embarrassing him, he was a very distinguished member of the Treasury Select Committee and did some fantastic work there. He comes from a background in the Civil Service and has experience inside government. Therefore, we should take very seriously what he had to say about the merits of this proposal.

16:45
I have one slight quibble with him. He suggested that this might be an alternative to parliamentary scrutiny. I may have misheard what he said, but I thought he implied that there was some degree of mutual exclusivity between the two—he is shaking his head; as usual, I was not listening carefully enough—whereas I see this as complementary, a point made by my noble friend Lord Hill.
I should declare my interest as chairman of Secure Trust Bank. I am regulated by both the PRA and the FCA. I have to say that, for the last nine years, it has proved to be a very illuminating experience, and every year it becomes less illuminating. I am being very careful about what I say about the regulators. I think it was my noble friend Lord Hill who said that this is an example of an amendment as a result of which no one will lose out. I am not sure that is true. The big four consultants might lose out, because we spend our lives spending vast amounts of money asking them: “What did the regulator mean by that?”
A body of this kind would independently ask the question, “What do you mean by that?”, in such a way that those of us who were regulated might find a bit unwise because the regulators have enormous power: at the stroke of a pen, they can require additional capital requirements for the banks. I have learned over the years that there is only one word that you need to know when dealing with a regulator: it begins with “kow” and ends in “tow”. It is really difficult to get any kind of dialogue that questions the decisions they might make. A recent example is the imposition of the consumer duty. We are all in favour of helping the consumer but working out what you need to do actually to comply with the consumer duty is not as simple a task as one might expect. If we had a body of this kind, it would be able to cut through a lot of that difficulty.
The noble Lord, Lord Hunt, put his finger on it. As far as I am aware, there is no one in this Committee—and I doubt whether there will be anyone in the House when this matter gets debated—who does not see the merits of increasing both parliamentary and independent accountability of what the regulators are doing. As a non-executive director, I take the view that the executive should always listen to the NEDs, so I say to my noble friend the Minister: as the senior NED in the Treasury has just said what a good idea this is, I would listen very carefully indeed to that.
The noble Lord, Lord Hunt, made a really important point when he talked about the NHS. I hope this does not sound too partisan, but I find it quite surprising, in the current crisis in which the NHS is engaged, that it is never the regulators, or even the highly paid officials, who are grilled mercilessly in the media because of a failure of the system; it is always the Ministers. The Ministers are not actually in charge; they set the general policy. In that early period when I first got into Parliament—my noble friend Lord Deben was, of course, grander than me—we tried to move from “the man in Whitehall knows best” and introduced private capital and privatisation. We thought that would end this, but over the years, the regulators have got more and more power and less and less accountability, and that is true in financial services.
I should shut up in a minute, but the one thing I find really quite frightening about this Bill is the huge additional power and responsibility being transferred to the regulators, and the lack of ability to actually see what they are doing, setting a timetable for it and at the same time avoiding the problems of political direction, which would be highly undesirable. This amendment brilliantly establishes this—just as my noble friend Lady Noakes pointed to the success of the security committee and the precedent there, the OBR is a precedent here, although not everyone agrees with the OBR and its forecasts are not always the most accurate, as I am delighted to say is the case now. None the less, it plays a valuable role and provides support to the Treasury Select Committee and the Economic Affairs Committee.
I have one final point about the noble Lord, Lord Tyrie, which I commend to those noble Lords who, like me, like reading evidence given to Select Committees of this House. I refer to the evidence he gave when we did our report on quantitative easing. Of course, this amendment has been proposed by the chairman of the Economic Affairs Committee. In his evidence, the noble Lord, Lord Tyrie, talked about the need to improve accountability and the methods of achieving it. We did not pursue that in our report, because we wanted to focus on the issue of quantitative easing, but it is well worth reading, very prescient and calls for exactly this kind of amendment.
I hope that my noble friend will embrace the amendment, listen to our NEDs and, at Report, prevent us having to table any more amendments by introducing a government amendment that we will joyously agree is exactly what is needed—and I can tell her for certain that she will be the toast of the City of London if she does that.
Lord Lilley Portrait Lord Lilley (Con)
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My Lords, until the noble Lord, Lord Hunt, led me to it, I had not realised the similarity between the Arts Council and the financial regulators in the City of London—but he is absolutely right. Both are manifestations of that growing and alarming phenomenon, the administrative state. These are bodies that set their own rules, mark their own homework, are largely unaccountable, often wayward and certainly unpredictable. The one weakness of this Bill, which in other respects is good, is that it creates even more freedom and power for the regulators to operate without accountability or predictability.

There are two ways in which to deal with this problem, which are compatible and probably both necessary. One is that to which the amendments proposed by the noble Lord, Lord Bridges, make a major contribution: bringing parliamentary accountability to bear. His amendments effectively arm Parliament to carry out that accountability. The other is to try to constrain the behaviour of the regulators within the disciplines of the common law, which is what my amendments here and elsewhere seek to do. I speak particularly to Amendments 169, 171, 173, 174 and 200. The changes in those amendments deal with the Upper Tribunal and the regulators; I shall go on to those which deal with the Financial Ombudsman Service.

At present, firms can take a challenge to a regulator’s decision to the Upper Tribunal. If a challenge is about a regulator’s enforcement decision, the UT decides the matter again on its merits. If the challenge is about a supervisory decision, the UT effectively carries out a judicial review. It may hear fresh evidence, but it merely decides whether or not the regulator’s decision was reasonable and, if it was unreasonable, refers it back to the regulator to take the decision afresh. These amendments would not change that role but, I hope, would constrain the way in which it was carried out.

Amendment 169 would simply give the Upper Tribunal the obligation to give consideration to the predictability and consistency in any case before it and to comply with those objectives when deciding a fresh enforcement decision, and it would empower the Upper Tribunal when making findings on a supervisory decision to help the regulator meet the predictability and consistency objective when reconsidering a case. It would also require the regulator to prove in each case that it had acted predictably and consistently on any issue referred to the Upper Tribunal.

Amendment 169 would also give firms that believed they had acted in good faith within what they knew of the meaning of the regulations laid down by the regulator the right to apply to the Upper Tribunal, if they were found to be in conflict with the regulator, within three days for a declaration of reasonableness. If the Upper Tribunal granted a declaration of reasonableness, the FCA or PRA could not pursue enforcement action against the firm.

There are comparatively few references to the Upper Tribunal. If the Upper Tribunal and the regulators achieve greater predictability and consistency, there are likely to be fewer still in future, which is a good thing. Moreover, those that do take place will themselves create case law, making the meaning of the regulations clearer and more predictable. However, because the volume of cases will be small, the amount of case law that will arise at the level of the Upper Tribunal will be small.

By contrast, a huge number of customers—SMEs and individuals—claim losses that they attribute to breaches of regulatory rules by firms providing financial services, and they do so to the Financial Ombudsman Service. In the most recent quarter, over 43,000 complaints were made to the FOS. At present, consumers, largely small businesses, can take a complaint free of charge to the ombudsman, which can decide whether a financial services company has treated them fairly and reasonably and require the finance company to pay compensation. The costs of the ombudsman service, whose budget for 2023-24 is £240 million, are met by a compulsory levy and some fees payable by financial institutions.

The advantages of this arrangement to the consumer are that there is no fee, there is no risk of having to pay the finance company’s costs if the complaint is not upheld, and the process is generally faster than a court case would be. However, there are disadvantages too: the Financial Ombudsman Service has the power to decide what is fair and reasonable without any obligation to be predictable and consistent before or afterwards, or to explain its reasoning, and it is

“free to make an award different from that which a court applying the law would make”.

Financial institutions that object to the ombudsman’s ruling can in theory appeal to the Upper Tribunal or seek judicial review, but if they did so they would have to prove that the Financial Ombudsman Service’s decision was so unfair or unreasonable that no right-minded person would ever have made a similar decision, so they stand little chance of success and few cases have been brought.

The ensemble of my amendments would respond to those weaknesses in a number of ways. First, earlier amendments would introduce the explicit objective of predictability and consistency, and any challenges to the regulators on those grounds would primarily be considered by the Upper Tribunal. The other amendments in this group would ensure that the internal review bodies within the FCA and PRA that consider enforcement decisions before they are finalised, known as the RDC and the EMDC, were fully independent, and would require them to apply similar tests. That should ensure that most cases would not need to be taken to the Upper Tribunal since concerns would have been addressed before the regulator made a final decision.

Secondly, the amendments would change the role of the ombudsman system into an adjudication system, and that is perhaps the most important element of this group. Instead of being empowered to reach decisions simply on its own subjective view of what was fair and reasonable, the financial adjudication service would be tasked with adjudicating on the basis of the law, including case law as it built up. That is modelled on the adjudication system in the scheme for the construction industry in the Housing Grants, Construction and Regeneration Act 1996. The idea of transferring the lessons there to the financial sector was suggested by Lord Dyson, a former Supreme Court Justice and Master of the Rolls, in a report by the APPG on Fair Business Banking in 2018, which also recommended the formation of the First-tier Tribunal. The adjudication system would remain free to consumer complainants, who would still have the benefits of the obligations on financial businesses to treat them fairly as in the FCA rules and legislation, such as the Consumer Rights Act 2015.

17:00
The third aspect is that the amendments create a new first-tier tribunal to which SMEs or financial businesses that wish to challenge an adjudication by the FAS would be able to go. In 2018 the Treasury Select Committee supported creating such a body, so I have the support of the noble Lord, Lord Tyrie. Rulings of this first-tier tribunal would produce case law, rather like the employment tribunal does, which would clarify what is fair and reasonable in concrete situations. Anyone who brings a case to the FTT and loses would not be liable for the other side’s costs unless they were vexatious litigants. If a financial firm wishes to appeal a decision by the FAS, it would be obliged to meet the complainant’s costs and the other conditions set by the FTT. There will continue to be a cap on the liability that can be awarded by the new financial adjudicator system or the FTT, which I propose should remain at the same level as applies at present to the ombudsman service, namely £350,000. If we introduce this system, a new body of law will ensure that legal certainly arises, particularly when taken in conjunction with the requirements for predictability and consistency already mentioned.
Why does all this matter? Because it will make the whole system more transparent, predictable and consistent without detracting from existing consumer rights. I hope that, over time, it would reduce the number of claims for adjudication from the very high present levels. At present it would mainly affect domestic consumers and financial providers, but it is more than likely that the internet will gradually open up consumer finance internationally, in which case Britain will be best placed to be home to the Google or Amazon of domestic finance in the future, just as we are for wholesale financial transactions, if we have a trusted, common-law based system, which these amendments would effectively introduce.
Viscount Trenchard Portrait Viscount Trenchard (Con)
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My Lords, I declare my interest as a director of two investment companies, as stated in the register.

I too congratulate my noble friend Lord Bridges and his supporters on their most interesting proposal to set up an independent office for financial regulatory accountability. The Bill as drafted does not secure sufficient change in the way the regulators carry out their duties and the speed with which they will work to simplify and improve the rulebook. In particular, I welcome the provision in Amendment 162’s proposed new subsection (2): that the office “must prioritise” analysis of regulations that reduce competition, negatively affect competitiveness and add compliance costs. In other words, the office will be bound to identify regulations such as the myriad anti-competitive and cumbersome regulations adopted by the ESAs in recent years.

I support my noble friend’s amendment and believe it would augment but not replace the work of an FSRC, such as my noble friend Lady Noakes and I proposed in Amendment 86. As such, it would mitigate further the regulators’ lack of accountability to government following the transfer of significant rule-making powers. This is most likely to be a good thing, although alone it does not do enough to improve the deficit in accountability to Parliament.

I would like my noble friend Lord Bridges to tell the Committee whether he envisages the office working alongside a Joint Committee such as the FSRC and whether he would consider amending his Amendment 165 to replace the Treasury Committee of another place with a suitable Joint Committee. I agree entirely with what the noble Lords, Lord Hunt and Lord Vaux, said about the need for a new Joint Committee.

Along with my noble friends Lord Sandhurst and Lord Roborough, I have put my name to Amendments 169 to 174, so eloquently proposed by my noble friend Lord Lilley. In common with my noble friend, I am not a lawyer; I am a banker. I was proud to work in the City of London when I joined Kleinwort Benson as a management trainee in 1973 because, by and large, the City was an honest place and its leading firms were well regarded. We knew the importance of the old maxim, “My word is my bond.” The banks did not maintain vast compliance and legal departments. During my banking career, I have seen the relative size of these departments increase massively as a proportion of total staff. This itself has had a negative effect on the culture of our leading firms, reducing the emphasis on innovation and business development and increasing the number and influence of those employed in compliance and legal, and of the interlocutors with the regulators.

We believed that Brexit would enable us to return to our simpler, less cumbersome, common law-based regulatory system. These proposals will enable this and encourage agility and precision in the drafting of rules. The regulators operated in this way after the Financial Services and Markets Act 1986, and this is how the FSA was empowered to act under FSMA 2000. But by then, the EU acquis on financial services was beginning its period of rapid expansion, so most of the rules since then have actually been made at statutory level by the EU. FSMA 2000 already accepts that judicial review is an inadequate safeguard against unduly harsh decisions by the regulators, and it gives the final say on enforcement decisions to the Upper Tribunal. These proposals would ensure that the regulators act predictably and consistently. They would ensure that they are no longer above the law—now even more important, as a result of their greater rule-making powers.

I believe that the opportunity costs of the current regulatory system are too high. Legitimate financial business, such as providing new products for consumers, is not being done because of regulatory uncertainty. These amendments would ensure that the wording of the rules is more thoughtfully drafted than it was under EU regulation and would reduce compliance costs. The rules would be based on common law methodology. The wording would be applied to facts on the basis of their natural and ordinary meaning. The renamed financial adjudication service would reach decisions not only on its own subjective opinion but on the basis of the growing body of case law deriving from decisions of the new first-tier tribunal.

Does my noble friend the Minister understand just how important it is that the Bill be made a lot more radical in changing the way our regulators operate? As drafted, nothing much will change. There was no point in Brexit if we continue to apply a bureaucratic, overly cautious and cumbersome regulatory system. These proposals would take us down the right road as a significant step to ensuring the City’s future and reversing the recent decline of some of our most important institutions, such as the London Stock Exchange.

Lord Turnbull Portrait Lord Turnbull (CB)
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My Lords, I have not spoken before in this Committee, but as one of the surviving members of the Parliamentary Commission on Banking Standards, I want to address an instance where an amendment directly challenges one of the proposals that was incorporated following the commission’s report. Earlier in proceedings—on day three, I think—the noble Lord, Lord Tyrie, addressed Amendment 46, which introduced the concepts of predictability and consistency. He asked, “Who could possibly object?”, and went so far as to describe them as “motherhood and apple pie”. On examination, these principles, particularly predictability, can be seen to be simply duplicating the existing provisions of administrative law, but also as introducing provisions that could limit the scope of the regulator to address new and previously unforeseen problems.

A similar problem arises with Amendment 174 in this group. How could one possibly object to acting

“reasonably and in good faith”

as a defence against sanction under the senior manager conduct regime, the SMCR—the principal sanction being disqualification from practising? By way of a bit of background, the PCBS spent a great deal of time on structural issues—bank break-up, ring-fencing, capital adequacy, liquidity adequacy and so on—but it also attached a great deal of importance to conduct issues, hence the creation of what was then called the senior person conduct regime and is now the senior manager conduct regime.

Is there evidence that this regime has proved oppressive and needs to be relaxed? Quite the contrary, in my view. There have been very few cases, although it has only been fully in force since 2018. Following the 2008-10 financial crisis, Mr Peter Cummings of HBOS is the only senior person to have been seriously sanctioned. One can debate whether that verdict was fair or unfair, but it is undeniable that it is unfair that he should be the only person sanctioned of the big players in those events. I do not think the case for further easing has been made out; more effective application is needed.

The introduction of a defence of acting

“reasonably and in good faith”

would, in my view, be a serious weakening of the regime. Very few people who made serious errors—which were costly to their customers, their own companies or the economy at large—set out intentionally to do harm. The thinking behind this amendment is that it is unfair to sanction people who claim that they did not intend to do harm, even if their actions were genuinely harmful. The protection of consumers is not achieved if those who mis-sell financial products or take what prove to be excessive risks are immune from regulatory action if they can show that they did not intend to do so.

Once again, these amendments look superficially desirable, but they would weaken the SMCR and could cause a lot of damage. The normal pattern in Committee is that an amendment is proposed and others stand up to support it. I want to do the opposite: I urge the Minister to stand firm in rejecting Amendment 174. In any case, I wonder whether the right way to change the underlying philosophy of regulation and the balance between the regulator, the common law and the courts should be to set out a comprehensive proposal, rather than through the accumulation of a disparate set of amendments in this Bill.

Lord Sandhurst Portrait Lord Sandhurst (Con)
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My Lords, I speak in support of Amendments 169 to 174 and 200. These have been proposed forcefully by my noble friend Lord Lilley and are, I suggest, worthy of acceptance.

I speak from the perspective of a lawyer. First, I suggest that three adjustments are needed to the decision-making and supervision of regulators to drive predictability and consistency in rule-making. Amendment 200 would make the regulators’ enforcement committees more independent in their decision-making. This should reduce the number of firms that bring unnecessary challenges to regulatory decisions in the Upper Tribunal.

Secondly, Amendment 173 gives the existing Financial Regulators Complaints Commissioner power to order the correction of regulators’ errors. Currently, the FRCC can find that regulators have acted unlawfully, but the regulators are free to ignore that finding. In fact, the FCA has ignored the FRCC’s only such finding. So, the overarching oversight of the FRCC is toothless; it will, if our amendment is accepted, have some teeth.

Thirdly, we propose a set of adjustments to the supervision of regulators by our judiciary in the Upper Tribunal and courts. Currently, challenges by financial institutions to supervisory decisions in the Upper Tribunal are rare, and rarely successful. That is because the tribunal is reluctant to interfere with regulatory decision-making and lacks a framework within which to consider regulators’ decisions. Judicial review is even rarer. To succeed, firms have to prove that the decision was not just wrong, but unreasonable.

The problem is that because it is so difficult to overturn a decision, firms rarely go to the Upper Tribunal or seek judicial review, so there is no body of jurisprudence by which financial companies can set their practices consistently. The lack of predictability therefore means that firms have to build compliance programmes based in part on guesswork as to how the regulator may react when applying its rulebook in the future. This is particularly so when considering the vaguely drafted rules known as principles.

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Principles include concepts such as a vague new duty to
“act to deliver good outcomes to retail customers”.
It is hard to argue with some of these principles in the abstract but financial markets are complex. To apply such ideas to specific factual situations without a body of case law can be contentious. It is hard to challenge the assertions of the regulators as to how their rules are to be applied, and I suggest this must have a chilling effect on competition.
A lack of predictability and consistency in the application of rules means that costs are driven up and choice for customers, including consumers, is reduced. These amendments would make three changes to the Upper Tribunal’s jurisdiction. First, Amendment 169 adjusts the duties of the Upper Tribunal to ensure that challenges from firms to regulatory decisions will produce proper case law of value to the industry, and indeed to regulators when looking forward. The regulator would now have to satisfy the tribunal that it has acted predictability and consistently, such that a properly advised firm could alter its conduct in advance to avoid any breach. Such a firm would also then be in a position to build a robust and sensible compliance programme around what regulators actually require—not, as now, what they may require later. Ultimately, that must be the right way forward. Regulators must pay deference to reasonable judgments made by firms in good faith.
Amendment 174 would grant firms a new right of relief from enforcement where the Upper Tribunal concludes that the firm acted reasonably and in good faith. Decisions to that effect would yield valuable case law: predictability would follow. It is not enough that someone acted in good faith; they must have acted reasonably, and to judge that you would look at what the rules say. This would not allow ignorant people to just walk away and say, “I acted in good faith”.
Further, Amendment 171 expands the existing power of the Upper Tribunal to set aside rules made by the FCA for redress to customers. The tribunal may now, under our provisions, set aside any rule of a regulator which it concludes is unlawful. To fully realise the objective of predictability and consistency, changes are needed to how the system handles claims by customers against firms for breach of regulations.
The intention and effect of this group of amendments is to ensure predictability and, with it, fairness for all parties. Consumers must and will be protected. Amendment 172, as we have heard, creates an adjudication scheme in place of the ombudsman scheme. Being adjudication, that would lead to efficient and predictable outcomes. The context is important. I remind the Committee that these amendments would give effect to amendments to which I spoke on 1 February: Amendments 46, 54, 57, 64 and 82. If accepted, they would of course insert a new predictability and consistency objective for the FCA and PRA, and then a duty on those bodies to act in accordance with that objective. Together, they would impose a duty on both bodies to further those objectives when making regulatory rules.
Amendment 85 would oblige the FCA and PRA to apply common-law techniques of interpretation to regulation. They are to be interpreted in the same way as would the courts. That is critical for promoting predictability and consistency: everyone would be speaking the same language.
I remind your Lordships that, first, the ombudsman can at present award as much as £375,000. We do not suggest any diminution of this. Secondly, the Financial Ombudsman Service currently decides a dispute on the basis of what is “fair and reasonable” but is under no obligation to be predictable or consistent, nor to base its reasoning on legal principles. Indeed, the ombudsman is
“free to make an award different from that which a court applying the law would make.”
This results in obscure and unpredictable outcomes. Appeals are difficult because they are by way of judicial review.
Amendment 172, the substantive one, would replace the Financial Ombudsman Service with an adjudication scheme. This is modelled on the hugely successful adjudication system for construction disputes, which has operated for 25 years in that field. A dissatisfied consumer would go first to the financial adjudication scheme and get a swift, lawyer-free adjudication on paper. That process is similar to the ombudsman service: the adjudicator would enjoy the same inquisitorial powers as the ombudsman to ensure a consumer without a lawyer receives due protection against a legally represented firm. In proposed new subsection (4), there is a bias in favour of it being lawyer-free: the process is to start within seven days of the complaint being made to the service and to finish in 56 days; there will be no messing about. The important distinction is that decisions of the FAS would have to follow the law, regulations and the regulators’ rulebooks. It would have to adhere to the decisions of appellate tribunals, including, ultimately, the Upper Tribunal, so any adjudicator would have to apply the rules consistently across the board.
Amendment 170 would grant a consumer who is unhappy with the outcome he received from the adjudication service a new right to bring his case before a First-tier Tribunal for decision for an award of up to the same value: £375,000. However, experience in the construction sector has shown that 90% of parties accept the adjudicator’s decision, so the FTT should not be overwhelmed by its case load.
Under Amendment 172 there is also provision for a financial firm aggrieved by the award to apply for a decision from the FTT, but it could do so only if the FTT, having looked at it, gave permission. In giving permission, the FTT could impose terms. Those could include that the firm pays the consumer’s costs of the appeal and, importantly, that even if it decided the case differently—in other words, less favourably—from the consumer, the consumer would none the less keep the financial award. So, although it may say, “You got this wrong” in some respect, it could award the same amount of money and the consumer would not be worse off. If the consumer declined to defend the appeal, a consumer body could be brought in to put the consumer’s side of the argument. That would produce better precedent.
The firms, generally, should not find such conditions unacceptable, since, for them, what will matter is not simply the financial award but getting a clear precedent for the future. That is important if there are a whole lot of similar claims waiting in the chain behind. If successful, the firm would then benefit from the decision, wherever the point in issue affects other cases in the pipeline and all future business, as it would have a ruling in favour binding on all other customers. Either way, the firm would know where it stands going forward.
By ensuring that the regulators’ rules are applied with consistency, predictability and fairness, the decisions would benefit the financial markets as a whole and, ultimately, consumers. FTTs would operate like employment tribunals. In the last year for which there are figures, 2019-20, almost half the claimants in employment tribunals had no or only pro bono legal representation, yet their decisions are universally accepted as fair and there is no reason to believe that they will not operate in the same way in the financial court.
Finally, through Amendment 169 either party will be entitled to appeal the FTT’s decision to the Upper Tribunal to argue that there has been a straightforward error of law, as with an appeal to the Court of Appeal. Further, Amendment 169 imposes the important duty on the Upper Tribunal, when hearing appeals from the tribunal, to consider whether a firm acted in accord with the new predictability and consistency objective that we seek to introduce and to find in favour of a firm so acting. That is practical implementation.
All adjudication service decisions and FTTs will have to comply with the principles and interpretation laid down by the Upper Tribunal and higher courts. They will always have to give reasons. That is important —if you have to give reasons, you have to think about what you are going to say. Decisions at FTT level will also be reported and available on the web; that is what happens with employment tribunals before they go to the Employment Appeal Tribunal. A later FTT will ordinarily follow a previous FTT decision, unless, of course, it is persuaded that the law set out previously was wrong.
The effect of all this would be that most claimants would go first to the adjudication service, just as if they were going to the ombudsman service. Their treatment should be quicker—no slower than ombudsman service decisions, which often take 18 months. It would not cost the consumer anything—it would be paid for by a levy on the industry, like the ombudsman service—but it would produce consistent decision-making. In the longer run, that should mean fewer disputes and be better for all concerned.
There are a lot of these decisions: 300,000 are resolved every year. Even if their number is halved, they will still be the principal source of regulatory jurisprudence. This would be helpful not only in the retail context but to the market as a whole when considering the meaning of many of the same regulator rules, including the vaguely drafted principles. The case law would be of enormous value in helping firms comply with their obligations. When the Upper Tribunal decides a vertical challenge to regulatory action, it would draw on and have the benefit of the lower tribunal decisions with a breadth of experience, just as the Employment Appeal Tribunal does. Once the system kicks off, it should operate as it does in construction and employment disputes. I suggest that people looking back will ask how we ever did it any other way.
Amendment 173 strengthens the role of the complaints commissioner, who already operates under Section 84 of the FSA 2012. This would clarify the standards to govern senior managers, who would be enabled to see a declaration from the First-tier Tribunal that they acted in good faith and reasonably. I emphasise “reasonably”.
Finally, Amendments 171 and 174 deal with the regulations made and firms’ right to challenge them. Amendment 171 would entitle an authorised person or a firm to apply to the Upper Tribunal, in which a judge would sit with experienced specialists, as in the Employment Appeal Tribunal. The Upper Tribunal would be responsible for dealing with appeals against decisions made by certain lower tribunals and organisations. It would make authoritative decisions, applying the law to the facts. It would be invaluable to lay down a principled approach to achieve consistency, predictability and fairness. Lower tribunals would be obliged to follow its rulings. Amendment 174 would provide protection against charges of misconduct, and I stress that they must have acted “reasonably”, not just in good faith.
Lord Roborough Portrait Lord Roborough (Con)
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My Lords, I declare my interests as a shareholder in an FCA-regulated asset management company, and as having been regulated as an employee for 30 years in financial services, including five years as a senior manager.

I have put my name to my noble friend Lord Lilley’s amendments. While they follow on from the amendments adding the requirement for predictability and consistency that were discussed on day two of Committee, to some extent they also stand alone. I also support my noble friend Lord Bridges’ amendments and indeed any proposal for effective oversight and scrutiny of regulatory performance.

17:30
Previous amendments would ensure accountability to Parliament and the wider world. These amendments would add accountability to how the rules were implemented in relation to those directly impacted by regulatory decisions. The amendments would give courts and tribunals a greater role in financial regulation to help enhance the predictability of how the rules and the even vaguer principles were being enforced, as well as a clearer progression through more junior legal jurisdictions, which in turn should limit the number of cases that make it to the Upper Tribunal and the courts. That would allow the desired outcomes to be delivered at lower cost and with less delay.
The issue I mentioned on day two of Committee was that the application of rules and principles often happens in the shadows, and the actions taken can appear inconsistent with the rules and principles that we in the industry have all followed. In turn, those decisions can cause permanent damage to businesses and careers before any current review process is available. The amendments tabled by my noble friends give the prospect of clear precedent for how rules are interpreted and enforced, with speedy and efficient recourse to clear appeals procedures where necessary.
The noble Baroness, Lady Bowles, mentioned on day two of Committee that the City used to have unlimited liability, causing people to take a little more care and consider whether they were doing harm. The application of rules and principles within the core objectives of the regulator is not that difficult for experienced practitioners, as my noble friend Lord Trenchard mentioned earlier, and is central to the performance on which they are judged. However, the regulators had already introduced policies that were not obviously within their core objectives, such as on environmental factors, diversity and conduct at work, where enforcement and supervisory actions have become unpredictable. The Bill now introduces a secondary objective.
17:32
Sitting suspended for a Division in the House.
18:08
Lord Roborough Portrait Lord Roborough (Con)
- Hansard - - - Excerpts

The Bill introduces secondary objectives unrelated to the core objectives. Should that unlimited liability also be extended to these? Will the regulator be determining acceptable travel policies for business? Which financial markets are priorities for growth and competitiveness? What will be the enforcement process if individuals or companies disregard these? How can the regulated have confidence in the application of these objectives without some kind of body of precedent and rapid appeals process? The regulators themselves will benefit from a clear body of case precedents when making decisions. I urge the Minister to give serious consideration to the importance of rapid and practical accountability of the regulator for its actions to those it regulates, if London is to remain a financial hub where the global community wants to base its investments, businesses and careers.

Lord Eatwell Portrait Lord Eatwell (Lab)
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My Lords, I regret that I was not able to take part at Second Reading as I was working in the United States. I hope I have the indulgence of the Committee to make some comments on this set of amendments. As someone who has chaired a major regulator, I found the representation of the principles and approach to regulation as “vague” a rather chilling remark.

What we have seen with the amendments of the noble Lord, Lilley, and those who have supported them, is an attempt significantly to change the entire philosophy on which the regulatory system has so successfully developed in this country. That philosophy has been based on principles-based regulations. Those principles are not vague, as has been asserted; they are determined by Parliament. The rules have then been developed on the basis of serving an industry which is dynamic and continuously changing, unlike the building industry, many of whose practices have not changed since Tudor England.

The fact that the regulatory system can adapt to a rapidly changing industry has been a source of considerable strength within our regulatory system. If we are to introduce an entirely different legal approach, that has to be argued out. There should be a Green Paper, a White Paper and a proper Bill saying that the regulatory approach in this country is going to be fundamentally changed. That is what I fear: the amendments of the noble Lord, Lord Lilley, would effectively introduce a wedge of change that would fit very uncomfortably with the current structure.

On the other hand, I support the amendments proposed by the noble Lord, Lord Bridges, and particularly commend the remarks of the noble Lords, Lord Hill and Lord Forsyth. They argued that although this new accountability device—this new entity—would deal with, let us say, the technical side of regulatory issues, we still need a parliamentary committee to deal with the political side because regulation is both highly technical and has an essential political core. That is why we need both components. Therefore, I strongly support the amendments of the noble Lord, Lord Bridges, and the views put forward by the noble Lords, Lord Hill and Lord Forsyth, on the need for the dual structure to ensure a proper level of both technical and political accountability.

Lord Tyrie Portrait Lord Tyrie (Non-Afl)
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First, I declare my interest as in the register. I am deeply concerned about this second set of amendments; they could have a profound impact on and consequences for the SMR, the ombudsman’s service and the RDC in particular, and I shall go through each in turn. I strongly agree with what has just been said about the nature of regulation and the risks of moving at such pace to a wholly different approach, bearing in mind for how many decades this system has been in place and has become understood and accepted—at some cost, by the way, and, therefore, changing it is itself something whose costs we need to bear in mind.

On the question of predictability, consistency and unintended consequences, in response to an earlier amendment I cited abuse of cryptocurrency technology, which might be made more difficult for the regulator to adapt to if it has to show that what it has done was predictable on the basis of existing law. That could be spread betting or, to take a topical example of 15 years ago, asset-backed securities. I am extremely nervous about including this without substantial consultation, which should be preceded by a detailed explanation of what is intended. We have not had any of that, and it is certainly not suitable to be put in this Bill.

Although I have not said very much so far on the Bill, I fear I will speak at some length on these three areas, which in my view are crucial to providing fairness and making sure that we are better prepared for the next financial crash that will inevitably come.

As I read Amendment 169, it would create a defence before the Upper Tribunal, and possibly a complete defence if a person could show that they had acted reasonably and in good faith. That might sound quite reasonable in itself—more apple pie—but a defence of reasonableness and good faith would mean that if an individual did not know about a problem, he could not be held responsible for it. That would be goodbye to the SMR, at least, as an effective regulatory tool. It strikes me as likely to reintroduce all the gateways to unacceptable risk and risk taking that the SMR was designed to expunge.

18:15
In considering the merits of this amendment, we need to remind ourselves why the system existed in the beginning. It was created because top bankers claimed ignorance of major risks on the balance sheet after the crash. They hid behind a veil of collective board ignorance. In that, they found a helping hand in the SMR’s predecessor, the approved persons regime, which had degenerated into a box-ticking, back-covering exercise that was far too broad in scope and operated primarily as a gateway to many very high-risk activities. It created the appearance of protection from prudential risk, which sat comfortably in the filing cabinets of firms and regulators, but the reality of none. As each new risk was added to the balance sheet, the responsibility for challenging it had often become perfunctory. While virtually unproven, of course, the foreknowledge of bankers and their lawyers of the twin defences of ignorance and collective responsibility under the old rules almost certainly contributed to unacceptable risk taking. The deterrent effect of possibly being held responsible for the addition of a risk, even a substantial prudential risk, scarcely existed.
The SMR was designed to address those weaknesses head on. As the Parliamentary Commission on Banking Standards’ final report put it, the SMR
“must ensure that the key responsibilities within banks are assigned to specific individuals … The purposes of this change are: first, to encourage greater clarity of responsibilities and improved corporate governance within banks; second, to establish beyond doubt individual responsibility”
to enable the regulator to improve remedies or to take enforcement action. The report continues:
“responsibility that is too thinly diffused can be too readily disowned: a buck that does not stop with an individual stops nowhere.”
So the SMR created a direct line of responsibility for each type of risk at board level. Its explicit purpose was to improve the conduct and performance of directors by encouraging challenge and a sense of ownership of risks at board level. The SMR was targeted at improving governance as well. In designing it, the commission had very much in mind the spectacular shortcomings of the RBS and HBOS boards, the latter of which it had examined in some depth and published a report about.
It is reasonable to ask whether the SMR is doing its job properly. The noble Lord, Lord Turnbull, suggested that it may not be doing it well enough and may not be strong enough. The early assessment of it—there has already been quite a major assessment by the PRA—is favourable, and almost everyone involved in it, on all sides, thinks it should be kept. It has only just been introduced; it has been fully operational only since the beginning of 2019. One indication that it is on the right track is that its core principle, individual responsibility, is being extended throughout the regulation of the financial services industry at home, and it is increasingly being emulated in other jurisdictions, including free-market beacons such as Singapore.
These are only indications of the performance of the SMR, and it is probably capable of improvement. It certainly needs continuous reassessment against its core purposes. Also, the SMR, like all regulatory frameworks, will be subject to attrition, as most rules are, particularly where vested interests are in operation.
Rather than introduce major changes now to the SMR, as would Amendment 169, a better approach is probably to wait a few more years and then subject both the SMR and certification to a thorough independent review and consultation. One thing is clear: Amendment 169 is not merely a tweak but represents a fundamental change, and it may, whether inadvertently or not, drive a coach and horses through a central plank of post-crash reform.
These amendments would have big effects elsewhere as well. Perhaps I could take the example, of the ombudsman service, which looks very concerning. As I understand the amendment—I am happy to be intervened on if I have not got this right—applicants must bring and pay for a case, the decision on any claim will be made public and any decision should create a precedent for all further ombudsman cases. If so, the effect is likely to be to squeeze out small claimants, forcing firms to defend decisions brought by individual claimants on which they might otherwise have settled. They would be concerned that precedents could be created if they do not defend cases, and the precedents would then generate a mounting cost. A further effect would be to favour the well-heeled individual client over those who cannot fight a case.
The heart of the proposal in Amendment 172, as I understand it, is to require the ombudsman service to rely exclusively on case law and precedent. If so, over time it would transform the Financial Ombudsman Service into a court system and would kill it off as we know it. I have not heard much by way of support for such a step. Perhaps a major shake-up of the FOS is needed, but before we deliver that we need to be confident that we have a problem to begin with, and to do that we need to bear in mind the primary purpose of an ombudsman service: to provide cheap and effective redress to the smaller victims of detriment, who do not normally have recourse to the courts. As a result, of course, there will always be an element of rough justice about some cases, and I saw that as a senior independent director of a publicly quoted company—a wealth management business—for many years. I saw a good number of such cases. I also saw such cases as an MP, so I am very aware of the problems created by the ombudsman service and its imperfections.
In addition to giving the small man access to redress, the existence of a reasonably well-functioning service provides at least three other very important benefits. It acts as a deterrent against poor conduct and poor product creation in firms. It greatly encourages quick and informal settlements; I have seen that for myself many times. It creates higher levels of trust among the mass of retail consumers and small businesses. With greater trust comes, in the end, more economic activity and welfare.
Of course, the FOS, as it is called, gets a good going over from time to time, often by consumer groups, and perhaps the practitioners should speak up more and the practitioner panel should be more active in explaining the weaknesses of the FOS. This amendment is not an improvement to the FOS and, in any case, if major reform is to be seriously considered, we need a full consultation, as I said earlier.
There is one area where I half agree with the gravamen of the amendments proposed by the noble Lord, Lord Lilley. Amendment 200 would almost certainly change the character of the Regulatory Decisions Committee, and quite a lot. If the noble Lord thinks that the RDC could benefit from some improvement—I am not sure that he put his case in that way—I would like to make two points. First, I strongly agree with him but, secondly, I am not sure that his amendment is the right way forward to tackle its problems. Let me try to explain those two issues.
As it stands, the RDC is well short of ideal, but it is important to have in mind why we have it. The RDC exists because the reputational effect of it being shown that a firm or an individual is being investigated, or is the subject of a warning notice, can often be terminal for the firm. It exists to try to address the problem that even the very early stages of enforcement by the FCA can empower the regulator to the position of being a judge, jury and executioner. Arbitrary justice is not far away in such circumstances, and that is not good enough. The purpose of the RDC is to separate the investigative and decision-making functions of the FCA. The practical effect of creating it is therefore that, before commencing any enforcement action, the FCA’s enforcement team has to get its case past the RDC. So a second pair of eyes is brought to the case.
The RDC can and does bring investigations to a halt; I have seen that for myself too. The fact that it can do so probably improves the conduct of the enforcers. In particular, the RDC can act as a deterrent against overzealous enforcement and investigation. Of course, enforcers are only human: once they get going on a case and get their teeth into a person or firm, they all too easily conclude, “That person must be guilty”, and they are reluctant to let go. That is why it is particularly important to have a second pair of eyes on the case; there is plenty of evidence to support the view that such misconduct by the enforcement team can take place.
I implied at the beginning that the RDC might be a force for good, but is it good enough as it stands? In my view, we need to do something about it. For a start, the RDC sits down the corridor from the rest of the FCA’s decision-makers. Office geography matters. Even if the whole of the FCA behaves impeccably, firms will always suspect that some whispers have penetrated the Chinese wall that is supposed to separate the RDC from the enforcement division. Confidence in outcomes among firms will be the casualty. In any case, perhaps there are whispers. I have some regulatory experience and have seen a few such whispers taking place.
Quite apart from the Chinese wall problem with the FCA, there is a second problem. The case for re-examining the way it operates has been made all the more pressing by the recent decision of the FCA—I think it was a couple of years ago—which was slipped into an appendix to one of its annual reports, to focus the RDC’s work on complex, large enforcement cases. I suspect that was as an expenditure-saving measure. The losers of this will be smaller firms with simpler cases, which in practice will now be almost entirely at the mercy of the enforcement teams. Perhaps that is where the FCA will look to boost its success rates: smaller firms tend to settle more quickly than the big ones.
I am also particularly concerned that the FCA has—or seems to have—brought to an end the hitherto more or less automatic right to oral representation of most people who would have ended up in front of the RDC, except, it says, in exceptional cases. Again, it is presumably an expenditure-saving measure. But these small firms can no longer put their case if it is considered simple—and the decision on whether it is a simple or complex case is not even in their hands.
In any case, I am concerned that the RDC team will have to rely, as I understand it, on the enforcement team for the legal advice it uses. In such circumstances, is the RDC—the second pair of eyes—fully independent in conducting its business any more? It took me some time to understand the press release that sets out the new operation of the RDC. If noble Lords looked at it, they would conclude that something is quite seriously amiss.
The FCA’s intention in all these changes is to try to reduce the logjam that currently exists at the door of the RDC, but the effect may be just to increase the logjam at the door of the Upper Tribunal, where those supposedly smaller, simpler cases will now be forced to go—and at huge extra expense.
18:30
If I am right that these two problems—the recent reforms of the FCA and the Chinese wall problem—are the RDC’s two main shortcomings, I am pretty sure that the amendment from the noble Lord, Lord Lilley, does not provide an answer. In any case, I cannot tell whether it is intended under his amendment that the RDC would develop into a fully fledged independent court, whose decisions would become subject to conventional court appeal, or whether the RDC is to remain a public body whose decisions are subject to judicial review. I think it is the latter but am not sure. Either way, the amendment as it stands will create a new tribunal-type layer in the FCA—great for lawyers and some firms, mainly larger ones, but not so good for smaller firms that can ill afford access to expensive legal advice, and very bad news for customers who pay for all this one way or another.
On the Parliamentary Commission on Banking Standards, the noble Lord, Lord Turnbull, and I, among others, examined this very issue. We proposed that the RDC’s autonomy should be entrenched in statute, but this proposal might also trigger unintended consequences that could defeat the original purpose of creating the RDC. I will not go into them now but, if I get time between now and Report, I might set them out.
In the meantime, my only remaining question is to ask whether the Minister accepts that the RDC has some concerning shortcomings. If so, it would be much easier for us all. Perhaps the Minister can take this problem away, ask for an independent assessment of the RDC’s performance and then publish the results. If that does not take place, perhaps it could be an early project for the scrutiny body proposed by the noble Lord, Lord Bridges, which could do a thorough report on the job and advise on how to improve the RDC’s performance.
Lord Deben Portrait Lord Deben (Con)
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My Lords, much of what we have just heard would be very much supported by the group of people with whom I work. We do not want to reduce the protection of either group of which we are speaking, particularly small people asking for redress.

The ombudsman service needs reform; there is no doubt about that. We really have to discuss putting some stakes in the ground about not blaming people for things they would never have thought of at that point because we now think of them. I am afraid that my noble friend Lord Lilley’s amendments do not help us in that direction. In other words, all the issues I would want to raise about the ombudsman are not covered by these amendments. Similarly, it is true about the protection of people from the effect of investigation, even when that investigation turns out not to be justified.

I finish by reminding the Committee of the original discussion we had. We need a system that people see to be fair and is shown to work effectively for small as well as big people. I do not think these amendments will help this, but I hope we will be able to have changes. I do not think that you should accept any changes just because you want changes, and I submit that these are the wrong changes.

Baroness Bowles of Berkhamsted Portrait Baroness Bowles of Berkhamsted (LD)
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My Lords, I am speaking later than I would have in the debate, due to the absence of my noble friend Lady Kramer. The Committee will be pleased to know that I shall not try to say everything that I would have said, as well as everything that she would have said.

It is well known from the previous FSMA that I support independent review. I had an earlier amendment to this Bill suggesting the use of the NAO, to which the noble Lord, Lord Bridges, referred. I am pleased to support his amendments, which I have put my name to and which lay out a much more thorough range of new provisions. At this stage, I should probably remind the Committee of my interests in the register, in that I am a director of the London Stock Exchange, as I am going to talk about my regulator.

The UK would not be alone in having independent review of financial regulations as part of its accountability. That was one outcome of the review of the financial crisis in Australia. I have been around this argument many times, and today it has already been eloquently explained by the noble Lord, Lord Bridges, so I pose instead the question: what happens without an independent review? One thing that is certain is that there will be complaints about regulations and, by and large, the regulators will defend their work. Parliament’s committees will try to scrutinise, but that is a public process—or it has been called the political process. They are well adapted to do the kind of inquiry that they do and often get into the nub of the matter. But as we have found out in the Industry and Regulators Committee, it is difficult to get industry to state in public what its issues are with the regulators. As I have pointed out with amendments and speeches on previous days, the Government do not give any legislative status to the parliamentary reports, so there is scrutiny but no consequence, which is not accountability.

Additionally, within intensively supervised frameworks, such as that which exists, probably uniquely, in the financial services sector, there is genuine concern on the industry side about regulators’ retaliation or suspicion if they complain. I acknowledge that the heads of the regulators have said that this would not happen, and would be wrong, but that does not allay concerns or whispers about this most crucial of relationships between industry and its regulators, where every word is guarded. There are also genuine concerns that explanations require public disclosure about investigations or other difficulties that firms may have faced in compliance, which they would rather not put in the public domain—for example, out of commercial confidentiality about future plans and not for reasons of bad behaviour.

Industry will therefore instead bend the ear of government through many of the private channels that it has, whether through the Treasury or at Cabinet level—for example, as it has about international competitiveness. The Government may choose to act, as they have in that instance. Meanwhile, the public channels remain uninformed or unconvinced, because—and I refer again to the experience of the Industry and Regulators Committee—we were given evidence of only operational inefficiency and not of rules that caused any lack of competitiveness. How is public trust to be maintained under these circumstances? How is there to be the legitimacy that has been spoken about? How are reviews to get through the confidentiality concerns in a way that the public trusts?

The Minister has sat tight on review in all the previous debates on this Bill and the previous one, saying that the Government have given themselves powers to satisfy those requirements—powers to ask the regulator to review its rules. I do not object to that, but it hardly has any independence or new eyes. There are powers to seek independent reviews but as we know from experience, because those powers have been around for a while, such reviews have not been used quickly or frequently. They tend to follow a sequence of disasters, as the Gloster review did, and not to be done in any checking or anticipatory way. I understand why that is, because government must keep a certain distance and look for some systemic concern rather than one-off causes, but that distance leaves a gap.

Of course, there are powers to intervene by way of directions, which need to be used with care if the independence of regulators and international respect for them are to be maintained. None of those powers satisfactorily address how there should be checking in a way that permits private submissions but remains free of it looking as if government either is interfering too much and getting too cosy with industry, which is what it will look like if the Government use their powers to intervene as much as might be needed, or never acts until there has been substantial damage, when it really is too late.

I would also be interested if the Minister would inform the Committee of the level of resources and number of personnel that the Treasury is able to put behind its own monitoring, and whether it is free from reliance on industry and consultancy involvement. It is no good if it is just sent back to the same people, who will give the same information as comes in through the private channels anyway. How is that meant to be independent? I hope the Minister will take account of the fact that calls for independent review, as well as enhanced parliamentary scrutiny, come from all sides of the House and need to be addressed. There should be some serious conversations before we get to Report.

I will briefly say a few things about the amendments put forward by the noble Lord, Lord Lilley but I agree entirely with the noble Lord, Lord Tyrie. It would be a dreadful shame if one of the major achievements of this Parliament after the last financial crisis were watered down or, even worse, set aside. I fear that, as has been explained, that could well be the case. When the noble Lord, Lord Lilley, introduced his previous amendments, I said that I am not totally against a libertarian approach—one where you have to take care, and if you get it wrong then you are for the high jump—but that is not what is presented here. This proposal would make it extremely difficult for the regulators. It does not fit with the kind of regulatory system we have, with its underfunded regulators. It is a way to make it easy to set aside what the regulators have done. Given what I just explained about the relationship that firms have with their regulators—one of the reasons why, regrettably, they will shy away from legal action—it will not necessarily overturn that.

I do not agree with the predictability and consistency objective, for the reasons that others have explained: we want agility and change, and have to adapt to circumstance. If something comes to court, surely it could remain that a judge ultimately applies it, but that would be in the light of circumstances and an acknowledgement that circumstances change and regulation necessarily proceeds.

Likewise on a good-faith defence and reasonableness, my take on the senior managers regime is that the whole point is to make individuals be proactive, rather than just coasting along in what has been a comfortable way of life—how things have always been done. It has meant they have to engage their brain, think about it and update in the light of circumstances. Just saying, “There was a set of rules and I complied”, is not meant to be enough; you have to take account of what is going on.

Is there not a conflict here to some extent between people on the one hand talking about wanting principles-led regulations and, on the other, talking about that being vague? There are complaints that there are too many rules, yet it is industry compliance departments that are first off the blocks saying, “Where are the rules? Give us the rules! I want to know where to put my tick”, so I am not sure which section of the market this proposal is supposed to serve.

18:45
It would be an extraordinary change of regulatory approach, as the noble Lord, Lord Eatwell, has said. I welcome the fact that the noble Lord, Lord Lilley, has shown us how to put a Bill within a Bill; that is certainly a ruse I might avail myself of in due course. To be honest, that suits the amendments by the noble Lord, Lord Bridges, very well; we can get them in and make them votable on Report, and I am all for that.
I strongly support the amendments by the noble Lord, Lord Bridges, and I hope the Minister will take note of that. For all the intent—because I am sure there is some good intent behind the amendments by the noble Lord, Lord Lilley—I just do not see that they work. I do not see that something applied to the construction industry, which is pretty static, is at all applicable to an intensively, minutely supervised industry such as financial services—and anyway, we got Grenfell.
Lord Tunnicliffe Portrait Lord Tunnicliffe (Lab)
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My Lords, the most important thing to have come out of this debate, which is now in its fifth or sixth day—frankly, I have lost count—is that the regulatory environment lacks sufficient parliamentary scrutiny; there is enormous consensus about that idea. We have heard several solutions. At least three groups have touched on this issue, and I hope this is the last group to do so. I will go as far as saying that it is an interesting idea. I say that in the sense that I am representing His Majesty’s loyal Opposition, and at the moment we have some concerns about resource consumption, et cetera.

However, if we take all the ideas together, I am convinced that they can be moulded into an important step forward in involving Parliament, and involving sufficient resource to make that involvement effective. We should set about trying to do that. The noble Lord, Lord Turnbull, said this more elegantly than I will, but if you toss a bunch of amendments together and hope that they are internally consistent and capable of execution, you are kidding yourself. I fear that that is where we are at the moment. If we were to vote on all the amendments we have had over the last five days or so, that would not work.

What should happen now—it will be interesting to see whether it does, and I shall do all I can to encourage it—is that cross-party discussions take place, focused on taking the best ideas and putting them together in a way that will work and will have support. This has to be a coalition that is irresistible in the parliamentary process, and that is possible. When you look at that lot over there, this lot here and us, that is a hell of a force for the Government to try to ignore, so I hope we can find ways of bringing us together. I hope the Minister will want to join in that process at some point and will want to see whether we can achieve a consensus with the Government. I strongly advise her today not to close off options. Options have to be open to try to move into this area.

There seems to be a secondary area, which I will loosely call the Lilley area, about legal involvement. I clearly do not understand enough of what this is about; I suspect a lot of people do not. There is confusion and, from what I have heard experts say, it is a dangerous confusion. We should stick to that central issue of parliamentary scrutiny, properly supported to be effective—and the time has come.

Some of us slogged through a Bill, about a year and a half or two years ago—I am losing track of time—where we worked quite hard on this and made very little progress, as we got rid of all the EU rules and then put all the stuff in the hands of the regulators. Many of us felt uncomfortable that there was not more scrutiny, but we did not really come up with a solution. Clearly, we are in a solution-rich environment now; the trick is to bring it together into a solution that will work, and it must be done now. This is the last legislative opportunity, in my view, that we will see for some time, so I hope that cross-party discussions take place and that we can take a real step forward for the industry and for democracy.

Baroness Penn Portrait The Parliamentary Secretary, HM Treasury (Baroness Penn) (Con)
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My Lords, I thank my noble friends Lord Bridges of Headley and Lord Lilley for tabling these amendments, and for their contributions to this discussion.

I will speak first to Amendments 160 to 166, tabled by my noble friend Lord Bridges. The Government agree, and have been clear, that more responsibility for the regulators should be balanced with clear accountability, appropriate democratic input and transparent oversight. The proposed creation of a new regulatory body to oversee the regulators—a so-called regulator of the regulators, although I know that my noble friend set out why he thought that term did not apply—raises further questions about how the accountability structures for the various regulatory bodies would operate. The Government would need to carefully consider how to ensure clear accountability to both government and Parliament under such a model.

The noble Lord, Lord Hunt, talked—it feels a long time ago—about the need for greater clarity on where accountability lies in this system. I am not sure whether it is clear that the addition of a further body to the system would provide greater clarity on where accountability lies.

Lord Bridges of Headley Portrait Lord Bridges of Headley (Con)
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How does the OBR undermine accountability? Surely it just provides independent analysis and assessment, and I see no problem there.

Baroness Penn Portrait Baroness Penn (Con)
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I believe that is sometimes subject to debate. What I was saying to noble Lords is that it raises questions in this area that we need to consider. If I look back to the creation of the OBR, it was in the Conservative manifesto at the 2010 election; indeed, it was set up in shadow form in 2009. It was first established not in statute and operated without statute after 2010. The provisions for its establishment in statute were then brought forward in a Bill, where there was sufficient time to consider those questions.

I am not saying definitively one way or another, but it raises questions that we would need to consider more carefully about who this body is accountable to and the interactions with parliamentary accountability that we have discussed today; the need for clarity on accountability, raised by the noble Lord, Lord Hunt; and, for example, the remarks by the noble Baroness, Lady Bowles, on the role that the body could have in filling the space that allows industry to make private submissions to the new body, rather than public submissions as happened through Select Committees, and how that marries with the provisions in the amendments on the need for this body to operate transparently.

These are questions that are raised in considering how such a body would operate in this landscape. There is the potential that it could duplicate or dilute the roles within the regulatory framework of government and Parliament to scrutinise and hold the regulators to account.

Lord Hunt of Kings Heath Portrait Lord Hunt of Kings Heath (Lab)
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There is a problem in the approach that the Minister is taking. She is suggesting that the body proposed by the noble Lord, Lord Bridges, will add to the accountability structure. I have added my name to the amendment and, as I see it, the body is there to support those who wish to hold the two regulators to account. It is not there to add to the architecture of accountability but to aid Parliament and others to hold them properly to account. There is a distinction.

Baroness Penn Portrait Baroness Penn (Con)
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Whether it is there to aid others in the accountability structure or is an accountability body itself is a further question, but its proposed role raises questions about, for example, how transparently it operates, as the noble Baroness, Lady Bowles, touched on, and other such considerations. I merely said to my noble friend who raised this point that the establishment of the OBR happened in a Bill of its own after a manifesto commitment, and that it had been up and running for some time before it was put into statute. It is not unreasonable to say that considerations need to be made when we think about this issue.

Lord Deben Portrait Lord Deben (Con)
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There are certainly considerations, but surely one of them is that we have an opportunity to make the change in this Bill, and we will not have another opportunity for a very long time. The Minister is proposing that we do not do it, frankly. Therefore, let us do it in this Bill, because it is the one opportunity that we have.

Baroness Penn Portrait Baroness Penn (Con)
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My Lords, I would never want to speculate as to future parliamentary timetables. My noble friend Lord Naseby talked about the importance of listening to those who are impacted by the provisions of the Bill. He spoke about the City, and we have heard various points of view in that respect. I would add consumers into that mix, too. I say to noble Lords that the Government have consulted extensively on the approach we are taking in the Bill, and we have received a number of responses on this specific issue in both future regulatory framework review consultations that took place. Although I absolutely recognise that a small number of respondents were supportive of further consideration of such a body, the vast majority were focused on how existing mechanisms for accountability to Parliament and government and engagement with stakeholders could be strengthened. The Government therefore decided, in response to those consultations, against creating a new body, and focused on ensuring that the mechanisms for Parliament and government to scrutinise the regulators are effective.

Baroness Bowles of Berkhamsted Portrait Baroness Bowles of Berkhamsted (LD)
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Will the Minister clarify what the questions were in the consultation? My recollection was that it was relatively open. Obviously, at that stage, industry was focused on its very important relationship with government—one cannot overestimate the importance of that—and it answered questions saying that it was happy with parliamentary scrutiny, but I have no recollection of there being a suggestion as to whether there should be another body that enabled any kind of regular review. Since that time, industry bodies have said that it would be a good idea, so it seems a bit inconsistent to claim that the consultation cleared the way to say that none was required.

Baroness Penn Portrait Baroness Penn (Con)
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My Lords, I was simply pointing out that this Bill is the result of two rounds of consultation. The Government are criticised for bringing forward proposals without sufficient consultation. I note the noble Baroness’s points but, even in the context of those questions, there were bodies that put forward the kinds of ideas that we are discussing today. However, in the balance of responses to that consultation, they were not the dominant voice or viewpoint from the range of different people who responded to us.

19:00
It is important to recognise the process of consultation that has been undergone in the preparation of the Bill. The noble Baroness is right that this is not a static world and things move on, but we have to undergo consultations before we reach legislation. I would say that is the correct sequencing of our approach in this regard.
After those consultations, we focused our efforts on improving the mechanisms by which Parliament and government can scrutinise the regulators. We have discussed some of them before in this Committee: the notification to the Treasury Select Committee of consultations; the reply to representations by any parliamentary committees; a new power for the Treasury to direct regulators to review rules; a new statutory cost-benefit analysis panel; and a new government power in Clause 37 of this Bill to direct the regulators to publish more information, including on performance, where that is necessary for the scrutiny of their duties.
Lord Forsyth of Drumlean Portrait Lord Forsyth of Drumlean (Con)
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My Lords, in my day, although it may have changed, when the Government issued a consultation document, it was basically to get agreement to what they wanted to do. In the case of the OBR, I remember the then Chancellor, George Osborne, arguing that the OBR was necessary in order that people could see that the Government were being honest and were subject to some kind of scrutiny, and that it would provide independent information that would enable Parliament and others to take a view.

I am trying to put this delicately, but my noble friend’s argument seems to be that the Treasury set out a consultation and reached an agreement so it is in the Bill. But the view that is coming out very clearly is that, for Parliament or anyone else to effectively hold the Treasury and the regulators to account, it is necessary to have an independent source of information. My noble friend is just reading out what we already know is in the Bill, but there is pretty well universal acceptance that that does not actually provide for sufficient accountability. Could she deal with that point? Why on earth would she be against something that would enable more transparency and more effective scrutiny?

Baroness Penn Portrait Baroness Penn (Con)
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I am afraid I am going to have to disagree with my noble friend’s point about consultation. I have spent too long in this Chamber, even in a limited time, being on the receiving end of scrutiny from noble Lords about the lack of consultation. The proposals in the Bill have gone through two rounds of public consultation. My noble friend may not see the value in public consultation, but that is not something that has been fed back to me in my dealings in other policy areas.

Lord Forsyth of Drumlean Portrait Lord Forsyth of Drumlean (Con)
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Forgive me, but I did not say anything of the sort. Of course I can see the value in consultation. What I do not see the value in is consultation that then concludes that the Government should do what they wanted to do in the first place.

Baroness Penn Portrait Baroness Penn (Con)
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That is not what I am saying. One of the things that I was referring to with regard to the powers in the Bill was an amendment tabled in the Commons stages to try to respond to further questions about how we can facilitate accountability. I think I have been clear to all noble Lords in this Committee that that is a question that the Government will continue to consider and to engage with noble Lords on, whether it is about strengthening parliamentary accountability or other measures that help to provide the information and resources that people need to do that work. The Government will continue to reflect on those points.

Baroness Bowles of Berkhamsted Portrait Baroness Bowles of Berkhamsted (LD)
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I am sorry to interrupt, but I find it slightly strange that the Minister is saying the Government will continue to interact with us. All that that interaction has been so far is “No”.

Baroness Penn Portrait Baroness Penn (Con)
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In Committee, we are discussing the different proposals that have come from noble Lords to solve these problems. I am trying to set out where the Government have previously considered these questions and the thinking behind our approach in the Bill, demonstrating that where we have been able to, for example in the introduction of Clause 37, we have made amendments to the Bill further to take into account some of these issues. When it comes to the specific proposals we are talking about, it is right that I set out that this has been considered by the Government, including through public consultation.

Baroness Noakes Portrait Baroness Noakes (Con)
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I was not going to speak on this group in order to have a speedier debate, but I completely failed in that aim, so I think I am allowed to say something now. Can my noble friend explain to what extent these two consultations actually address the issues that have been raised by the amendments of my noble friend Lord Bridges? From memory, neither of the consultations examined the idea of having some kind of independent scrutiny of the regulators; they merely proceeded on the basis of what the Government wanted to do and did not seek to analyse the benefits of an alternative solution.

Baroness Penn Portrait Baroness Penn (Con)
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That is a similar question to that of the noble Baroness, Lady Bowles, and it is probably because I did not answer it satisfactorily that it has come up again. Noble Lords are right that there was not a question on those specific proposals in those consultations. I endeavour to point out, however, that does not prevent the respondents to those consultations, where they believe it to be a good idea, to use them to put forward their support for such an approach. Perhaps I could write to noble Lords specifically on the areas within both those consultations that touched on accountability measures.

Lord Bridges of Headley Portrait Lord Bridges of Headley (Con)
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To be absolutely clear and just to put it on the record, therefore, the proposal in my amendment has not been consulted on? Is that correct?

Baroness Penn Portrait Baroness Penn (Con)
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It would be best to set out in writing for noble Lords the specific areas of the consultation that sought to address the issues we are discussing today. As I have said, in response to those consultations, certain respondents put forward proposals in this area, so it is not right to say that it was not a topic for consultation. However, as my noble friend wants clarity on the record, I think that would be best delivered in writing.

Baroness Bowles of Berkhamsted Portrait Baroness Bowles of Berkhamsted (LD)
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Perhaps I could intervene on this important point. In the first consultation, there were some respondents—I confess, I was one of them—who put forward notions of there being independent scrutiny. There were possibly some other organisations, I do not know, of the kind that come forward with policy ideas. But I suggest that the majority of respondents tended to be from the industry, and it is not usual for industry to invent new ideas in their responses to consultations. I asked some of the industry bodies about this at the time, and that was the response I got. They said that they thought that, as I had led the way, they might want to pick it up in later consultation—but by the time you get to round two, it is much more concentrated on what will be in the Bill and “Do you agree with this?” It does not say “And, by the way, what have we left out that might have been a good idea?” Industry does not spend its time and risk putting in responses about that kind of thing.

I should be very interested to hear the analysis of the type and numbers of people who responded. Frankly, we have to rely on what we are told. Once upon a time, you used to know who had responded and could judge, and if the weight of the responses came from industry, I am not surprised that there was nothing in there. If the weight of the responses from the non-industry part had some good ideas, perhaps the Minister could tell us.

Baroness Penn Portrait Baroness Penn (Con)
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As I have said, I will set out further detail on the consultation process in writing. It is worth just noting that this question was also considered by Parliament through the Treasury Select Committee in its report The Future Framework for Regulation of Financial Services, which said that

“The creation of a new independent body to assess whether regulators were fulfilling their statutory objectives would not remove the responsibility of this Committee to hold the regulators to account, and it would also add a further body to the financial services regulatory regime which we would need to scrutinise.”

Lord Tyrie Portrait Lord Tyrie (Non-Afl)
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Can the Minister explain whether that constitutes opposition? I had a cup of tea with the chairman of the Treasury Select Committee only the day before yesterday to try to establish exactly that. She is fully supportive of the idea—we ought to get that on the record—although I should also say that she had not specifically consulted her committee on it.

The Minister must see that the Government are probably going to lose a vote on this at Report. Would she be prepared to sit down with a group of us to see whether we can work up some sort of proposal that she might be prepared to accept? To make that meeting effective, in the meantime, would she be prepared to ask her officials, on a contingency basis and without any commitment at all on her part, to write down on the back of an envelope—a long envelope, I admit—what it is that might conceivably, in certain circumstances, be acceptable to the Government?

Baroness Penn Portrait Baroness Penn (Con)
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My Lords, I believe that I have already made the offer to noble Lords to meet to discuss the issue of accountability, both parliamentary accountability and the proposals such as those put forward in the amendments today. That still stands. I am afraid that I cannot—

Lord Vaux of Harrowden Portrait Lord Vaux of Harrowden (CB)
- Hansard - - - Excerpts

I apologise for interrupting. The Minister is quite right that she has made that offer. We were grateful for it, but it is of fairly limited use if there is no recognition on the part of the Government that there is a gap here in terms of parliamentary accountability and scrutiny. She has not actually said yet that she recognises that there is a gap. I have to say that she should look around her: it is pretty clear that it is there.

Baroness Penn Portrait Baroness Penn (Con)
- Hansard - - - Excerpts

What I have tried to say to noble Lords is that, in bringing forward the proposals in this Bill, we absolutely recognise that, with the increased responsibilities that go to the regulator, we need to ensure that there is proper accountability and scrutiny. We have put forward the proposals in the Bill to attempt to do that.

19:13
Sitting suspended for a Division in the House.
19:24
Baroness Penn Portrait Baroness Penn (Con)
- Hansard - - - Excerpts

I did not finish the note I was writing to myself to try to draw the debate on my noble friend’s group of amendments to a close for now. In response to the noble Lord, Lord Vaux, I was setting out that the Government believe there needs to be clear and greater accountability for the regulators, given the greater powers they are taking on. We have set out our approach to this in the Bill. When it went through the House of Commons, we demonstrated our openness to finding new and improved ways to strengthen our approach.

Where the Government have considered and consulted on some of the options the Committee is discussing today—or bodies such as the existing Select Committees of this or the other House have considered those options—it is right to draw this Committee’s attention to the feedback we have had in those consultations or through those Select Committee processes. As I have said to noble Lords on numerous occasions, we will listen carefully to the various debates we have had, reflect on what has been discussed and meet and engage with noble Lords, who have clearly expressed their concerns on this matter, to see what further progress can be made.

I turn to my noble friend Lord Lilley’s Amendments 169 to 174. On Amendment 169, I believe I set out the Government’s position on a predictability and consistency objective in earlier debates. While the Government agree that predictability and consistency are important components of an effective regulatory regime, we do not think they are appropriate objectives for the regulators. Similarly, the Government consider that such objectives do not need to be applied to the Upper Tribunal’s decision-making.

Amendment 171 seeks to enable the Upper Tribunal to quash all rules made by the regulators. The Government consider that the regulatory framework, including through enhancements in the Bill, provides multiple opportunities and avenues for challenge and review of the rules, both before and after they are made. For example, Clause 27 introduces a new power for the Treasury to require the regulators to review their rules when it is in the public interest. I also note that the courts already have a role within the existing framework, where necessary, as decisions of the regulators are subject to judicial review.

Amendments 170 and 172 both concern the routes of redress available to consumers. The Financial Ombudsman Service already plays a valuable role in providing consumers with a swift and effective means of resolving disputes with financial services firms.

Amendment 170 would enable those currently eligible to bring claims to the FOS—consumers and most SMEs—to bring actions against firms for breaches of regulator rules in a new financial services chamber within the First-tier Tribunal. These actions could be brought even where the FOS had made a final decision. The FOS and the Business Banking Resolution Service already provide a cost-free alternative to the courts for consumers and 99% of SMEs. Going to court can be expensive for the parties involved and delay redress. It would likely be more expensive for consumers and SMEs to bring civil actions in the First-tier Tribunal than through the existing redress process.

I turn to Amendment 172. Establishing a new body with a different remit would take up resource from industry, government and the regulators and slow down redress for consumers without a clear need for this change. The key difference between the proposed new body and the FOS is that the new body would not be able to consider what was fair and reasonable in all the circumstances of a case when taking a decision. This consideration enables the FOS to take into account wider factors relevant to the case, such as regulator guidance and industry codes of practice at the time. This is in addition to the requirement in FSMA for the FOS to consider relevant law and regulator rules, and it enables it to tailor its decision to the particular circumstances of a case and ensure a fair and reasonable outcome for all parties.

The FOS’s ability to consider issues of fairness and reasonableness beyond a strict application of the law and regulator rules is consistent with its role as an informal alternative to the courts. FOS decisions can be, and have been, judicially reviewed by parties who are not satisfied with the reasons provided by the FOS for the decision.

19:30
With respect to Amendment 173, the Government consider that the current position of the commissioner’s recommendations being non-binding achieves an appropriate balance between ensuring regulatory independence and accountability. Where the regulators do not comply with these recommendations, they must explain their reasons to both the commissioner and the complainant and what steps they are taking to address their concerns. The commissioner also lays an annual report before Parliament which includes its analysis of how the regulators have responded to its recommendations, ensuring that the process is transparent.
On Amendment 174, the Government do not believe that the case has been made to support a change to the threshold under which senior managers may be found liable in their supervision of authorised persons. This would represent a weakening of the existing requirement that the senior manager has failed to take reasonable steps to prevent the contravention by the authorised person occurring.
The proposed amendment also seeks to enable parties that are potentially subject to the misconduct provisions at Sections 66A and 66B of FSMA to avoid liability where they have acted reasonably and in good faith, as determined by the Upper Tribunal, as proposed under Amendment 169. I have already set out the reasons why the Government do not agree with Amendment 169. For the same reasons, the Government do not think this amendment necessary.
Finally, on Amendment 200, the FCA’s Regulatory Decisions Committee and the PRA’s Enforcement Decision Making Committee take contested enforcement decisions on behalf of the FCA and the PRA respectively. To ensure that such decisions are taken independently, both committees already operate separately from the rest of the FCA and the PRA. The Government are satisfied that the existing arrangements provide the degree of independence necessary to ensure that decisions are taken fairly. However, the noble Lord, Lord Tyrie, raised important issues in relation to enforcement decisions and the need for firms to know that these decisions are being taken fairly and objectively. I will carefully consider his remarks on this matter.
To conclude, the noble Lord, Lord Eatwell, set out why the nature of the changes proposed by my noble friend Lord Lilley would need significant consultation and discussion rather than being appropriate as an amendment to the Bill. While I will of course engage with my noble friends and all noble Peers ahead of Report on the issue of regulators’ accountability to this House, we need to reflect on the need for measures to receive sufficient consideration and consultation in order to be added to the Bill. I close by emphasising my offer to noble Lords to continue to engage in and discuss the issues of accountability that we have heard in this Committee session and others.
Baroness Bowles of Berkhamsted Portrait Baroness Bowles of Berkhamsted (LD)
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I think the Minister has just said that she will engage but that the answer is still “no”.

Baroness Penn Portrait Baroness Penn (Con)
- Hansard - - - Excerpts

I have set out why the Government have concerns and that we should have further conversations to explore the issues that have been raised. I believe that is neither a “yes” nor a “no”.

Lord Bridges of Headley Portrait Lord Bridges of Headley (Con)
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My Lords, I will conclude this two and a half hour debate on just the first group and my amendment. I am delighted and thankful to noble Lords on all sides of the House who have supported it. The amendment is mine; the concept belongs to others. I am extremely grateful to my noble friend the Minister for offering to engage. However, I question the word “further”; I have not had any engagement and, so far, all I have heard is three things.

The first is that the Government believe that the measures in the Bill are sufficient. I think there is unanimous support, on both sides of the Committee, that, as far as accountability and scrutiny go, the measures are insufficient and need to be improved. The second is that the Minister is actually against the measures in my amendment today and the third is that they have been consulted on, whereas we have established from the earlier interventions that the specific amendment I propose, with this concept, has not been consulted on and that it was up to others to come up with that. In my view, that is not a consultation.

The Committee has stressed just how important this issue is, not just by the fact that we have been debating it for two and a half hours but because of what my noble friend Lord Hill and others said about the importance of ensuring that our regulators are truly accountable. The noble Lord, Lord Eatwell, made this point extremely well, as does my noble friend Lord Hill in an article in the Financial Times which was published just this afternoon. My noble friend says that

“what regulators decide directly affects our ability to compete and grow”

and that it follows that getting a regulatory framework right

“is central to our national wellbeing”.

He then says that we risk creating

“a new system of unaccountable British regulation”.

I repeat: unaccountable British regulation, and that is despite the measures that my noble friend says are in the Bill to increase accountability and scrutiny. I think we agree that they are completely insufficient.

As the noble Lords, Lord Eatwell and Lord Tyrie, said, this is not a question of just one or another of the little things that we have debated over the last few weeks on the Bill. A package needs to be brought together and it should address three points. One is improving the data that the regulators themselves provide. The second is arming Parliament with independent analysis, and I do not buy for a moment what my noble friend says about it undermining the independence of regulators. It is about arming Parliament and others with independent analysis of what the regulators are up to. The third is improving parliamentary accountability and scrutiny; my noble friend Lord Trenchard and others have made this point, as my noble friend Lady Noakes did in a previous session. These three things hang together.

I am delighted that my noble friend the Minister is willing to meet us, but I very much hope that she comes there with an open mind and a constructive attitude, not just a sense of no. I will obviously not press this amendment to a vote now but I can absolutely assure her that if the outcome of those conversations is not one that meets the challenge at hand, I will have absolutely no hesitation in pressing this to a vote at Report.

Amendment 160 withdrawn.
Amendments 161 to 167 not moved.
Amendment 168
Moved by
168: After Clause 50, insert the following new Clause—
“PRA dutiesReview of capital adequacy requirements risk weights and solvency capital requirements
(1) Within six months of the day on which this Act is passed the PRA must complete a review of the risk weighting and capital requirements applied to loans, guarantees or investment via shares or securities in—(a) group undertakings engaged in existing fossil fuel exploitation and production,(b) group undertakings carrying out new fossil fuel exploration, exploitation and production, and(c) group undertakings otherwise at significant risk from the low carbon transition, including but not limited to those engaged in fossil fuel-based power generation, agriculture, automotive engineering, aviation and heavy industry.(2) In conducting this review, the PRA must have regard to—(a) the full implications of climate change for the risk of investments including physical climate risks, transitional climate risks and climate liability risks,(b) the likelihood of assets becoming wholly or partially stranded before the end of their normal cycle,(c) the impact of climate change and climate change-related disruption on financial stability, and(d) the advice of the Climate Change Committee.(3) The Treasury must lay before Parliament the outcome of this review within one month of its completion.”Member’s explanatory statement
This amendment requires the PRA to complete a review of the risk weighting and capital requirements of banks and insurers in relation to firms engaged in financing fossil fuel exploration, exploitation and production alongside other climate-risk exposed sectors, taking account of the climate risk on those investments and on financial stability, the likelihood of the assets becoming stranded, and the advice of the climate change committee.
Baroness Worthington Portrait Baroness Worthington (CB)
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My Lords, moving on to a different set of topics, Amendment 168 is in my name, and I am grateful to the noble Baronesses, Lady Sheehan and Lady Drake, for lending their support. This is the only amendment in the group which has my name on it but I am broadly supportive of many of the others in it, as they seek to address a broad range of questions relating to how risk is taken into account in financial services regulation, with a specific focus on climate risk, as in my amendment.

Amendment 168 is about the risk weighting of assets for the purposes of capital adequacy requirements, in the case of banks, and solvency capital requirements, in the case of insurers. It is not a terribly prescriptive amendment. It would require the PRA to complete a review of these matters in relation to loans, guarantees or investment in firms engaged in new and existing

“fossil fuel exploration, exploitation and production”

and other sectors which are particularly exposed to low-carbon transition and climate risks

“including but not limited to those engaged in fossil fuel-based power generation, agriculture, automotive engineering, aviation and heavy industry”.

Proposed new subsection (2) sets out a number of matters to which the PRA should have regard, including the different types of climate risk and the risks to both individual stranded assets and wider macroeconomic financial stability. It also requires it to take advice from the Climate Change Committee. I have referred to loans, guarantees and investments in relation to the group undertakings to capture particular climate risks in the wider groups of firms. A loan to a firm engaged in clean technologies is still exposed to financial risk if it is a wholly owned subsidiary of a firm which is significantly exposed to low-carbon transition, or if the firm itself owns firms which are.

To be clear, I am seeing this through the lens of financial risks to firms. I have noted that Sam Woods, the chief executive of the PRA, has said that the organisation should not seek to pursue a climate policy in stealth mode or on the quiet, as a second Government, unless government gives it that duty. He says that the PRA and Bank of England remits are currently to pursue financial stability and accordingly to manage climate risk, which has the potential—I go so far as to say the likelihood—to constitute a huge risk to financial stability. I agree with him, but I do not believe that, for the management of these risks, the tools that the bank has deployed to date are sufficient; in fact, they include methodological issues that are disastrously understating the financial risks.

Before I turn to that issue, I should address one other point. During the passage of the Financial Services Act 2021, an amendment in relation to capital risk requirements was tabled by the noble Lord, Lord Oates. In response, some Peers said that there was no emergency embedded in banks’ balance sheets, as corporate lending in short to medium-term in nature. However, I need to emphasise that significant impairments are possible in both the short and medium-term.

This is not only as a result of more unpredictable and extreme weather—more particularly, it is as a consequence of technological and societal change. Global investment in low-carbon technology has increased by 20% a year in the past five years alone, and has now overtaken global fossil fuel investment. There is a whole economy change under way. It is not about a few companies and discrete sectors that have failed to take into account incremental improvements but about whole sectors exposed to broad-based technological change, increasing the rates of company failure, and the rapid shrinking of some industries, accompanied by the expansion of others. Banks and insurers that have not taken account of such changes face much higher impairments and, given the systemic risks of allowing them to fail, socialised public bailouts. It is right that the PRA should assess that these risks are being adequately managed and that the banks and insurers participate in supporting that review. It is about investing a little now to avoid spending a lot further down the road.

How are these risks being managed? Currently, through the climate biennial exploratory scenario, or CBES. In this exercise, the PRA offers up sample temperature rise scenarios and underlying assumptions of the implications for different assets, and firms plug in their portfolios to get the impairment data out as a result. This all feels safe and precise, but the climate is something that cannot be predicted specifically in those ways with any degree of accuracy. It is about the extent and nature of the risks that must be taken into account. This whole streamlined, reassuring and seemingly precise approach is hopelessly wrong in the face of climate risk.

A paper by the noble Lord, Lord Stern, of this House highlights that the methodologies employed by such climate risk models rest on flawed foundations, with huge error bars and unknown unknowns. Critical methodological problems have led to perverse outcomes, such as the suggestion that a 3 degree temperature rise, global average, offers the optimal balance of benefits and costs. That is more or less what we get from CBES. Where temperature rises are limited to under 2 degrees or rise to more than 3.3 degrees, the drag on company profits is predicted to be at around 10% to 15% on average. I have no idea how any model could reach that conclusion that had any bearing with what is actually happening to our physical climate.

Let us remember that the economy and the financial markets are a wholly owned subsidiary of our natural environment, and we are now in a destabilised climatic environment. This same 3 degree rise, which is the global consensus, involves steep drops in food production, dire water shortages, a sharp increase in urban heat waves, forced migration and mass extinction events. An increasing body of literature sets out why the models do not work. The former chief economist of ING Group in a Policy Exchange publication concludes that central bank scenarios have so far been based on assumptions and models that ignore or downplay crucial evidence of climate risks—notably the rising frequency of extreme weather events and critical triggers, tipping points and interdependencies between the climate, the economy, politics, finance and technology.

That is true for the CBES model. The underlying assumptions in the CBES paper highlight minimal economic impact from inaction on climate change over the next 25 years and a reduction in GDP growth of only 0.12% in 2050—another ludicrously precise number, given all the future uncertainties that lie ahead of us. That is very poorly aligned with the scientific consensus. Other academics have identified dangerous underlying assumptions in the functions that feed into those used by CBES, including that 90% of GDP will be unaffected by climate change because it happens indoors, and using the relationship between temperature and GDP today as a proxy for the impact of global warming over time, ignoring any possibility of cascading climate feedbacks and tipping points.

19:45
Tipping points can be both negative in terms of climate impacts and positive in terms of the rapid adoption of solutions by society and the changes that will bring. Indeed, in the next couple of months we expect to see the publication of major new academic research carried out by the UK Centre for Greening Finance and Investment, which finds that 55% of industry participants agreed that there are sources of climatic financial risk that are not fully represented in the CBES and that could represent a material financial risk over just the next 10 years.
In summary, the existing models are not up to the job. They systematically underestimate costs related to both transition and physical risk, which results in exposing our financial system, and therefore our economy, to risk. The models need to factor in cascading tipping points. There needs to be much more of an immediate short-term focus, including considerations of abrupt changes resulting from technological, social and political trends, including wider economic disruption. Where costs cannot be quantified, they should not be set aside; rather, efforts should be made to understand and account for them, and to be clear about the error bars that are inherent in all this modelling based on historical information.
The Bank of England’s work to date has been welcome but not sufficient. The review proposed by my amendment does not seek to be prescriptive about the Bank’s conclusions; it says only that it should do the work drawing on a wider range of expertise, including from our own Climate Change Committee, and make that work public and open to consultation and input from experts. We in the UK are fortunate that we have many experts on this topic. We should harness them and make our system of modelling the best it can be, while being honest about its limitations.
The UK Government would not be an outlier in considering this matter. The European Parliament has recently tasked the European Banking Authority with assessing by the end of next year whether and how capital reserve requirements should be adjusted to take climate risk into account. A recent CCC report recommended that the Bank of England should examine how capital requirements for banks should be adjusted based on assessed climate risks, and recommended that financial regulators in the UK should collaborate with international counterparts to establish a cost-of-capital observatory for physical risks.
I will gladly provide references to the papers that I have mentioned if that would be helpful. I do not intend to press this amendment today, but I ask the Minister to confirm that she has taken on board the increasing financial sector consensus that the climate biennial exploratory scenarios are in need of reform, and that she will ask the PRA to report publicly on this. With that, I beg to move.
Baroness Boycott Portrait Baroness Boycott (CB)
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My Lords, I shall speak to Amendment 199 tabled by the noble Lord, Lord Randall, who unfortunately is absent today, which is supported by the noble Baroness, Lady Sheehan, the noble Lord, Lord Tunnicliffe, and me.

This amendment would simply extend the same due diligence system that has already been introduced for large companies under Schedule 17 to the Environment Act, which looks at products in terms of deforestation, to UK financial institutions. The purpose of such due diligence is to prevent British banks knowingly financing deals that lead to deforestation worldwide. Sir Ian Cheshire, the former chair of Barclays and head of the Global Resource Initiative task force, has already written to the Minister saying that our regulations should now ensure that financial institutions do not directly or indirectly fund or support deforestation linked to forest commodities.

Between 90% and 99% of all deforestation is driven by agriculture, chiefly to produce soy, beef and palm oil—the big commodities—but on the whole that clearance is completely unnecessary to produce the food we eat. New research from the Stockholm Environment Institute shows that a vast proportion of all deforestation is speculative and does not in fact lead to any agricultural production. Sadly, corruption, fraud and labour abuses are the norm in the global agriculture sector. At least 69% of forest clearance for agricultural purposes between 2013 and 2019 is considered to have been illegal. Our existing regulations are practically an open invitation to banks to launder the proceeds and profits of forest crime.

Evidence from the charity Global Witness shows that, in the five-year period between the Paris COP and our own Glasgow COP, British banks and financiers made deals worth $16.6 billion, with just 20 agribusinesses implicated in these transactions. WWF calculates that the UK financial sector faces up to £200 billion in risk exposure to Brazilian beef and soy supply chains and Indonesian palm oil supply chains alone. This clearly exposes the UK economy as a whole and individual financial institutions to significant material risk. Globally, agribusinesses are expected to lose an average of 7% in value by 2030 due to unpriced nature and climate risk, with some companies losing up to 26% of their value.

Bringing an end to deforestation is one of our most imminent climate targets. At COP 27, the UN high-level working group on net zero made clear that this means an end to the financing of all deforestation. We do not need to do it; we should not do it any more. Fortunately for the Government and the Minister, Schedule 17 to the Environment Act has laid the necessary foundations by reducing the import market in the UK for commodities grown on illegally deforested land from places such as the Amazon. Under that Act, businesses will need to conduct due diligence to ensure that they have no deforestation anywhere in their supply chains. All this amendment would do is ensure that the already available information travels one step further to the banks and finance institutions.

I know that the Minister will reply that this is all in hand because of something called the Taskforce on Nature-related Financial Disclosure, TNFD, but this is yet another voluntary reporting scheme designed to help companies identify how biodiversity loss threatens their profitability. We must wake up to the fact that just identifying it is not the same as reducing it. Indeed, a lack of data is not at all the problem. Satellite technology enables real-time monitoring, and images can be mapped against suppliers’ farms. We have already accepted that such due diligence is made possible by passing the Environment Act.

If charities such as Global Witness can do it, so can the banks. The TNFD is shaping up to be the

“next frontier in corporate greenwashing”

unless we pass an amendment such as this one. Voluntary schemes have already tried and failed to deliver on similar objectives. The Soft Commodities Compact signed by British banks failed, and so has the New York Declaration on Forests. Financial institutions signed up to the Glasgow Financial Alliance for Net Zero, spearheaded by our Government, but they have barely decreased their deforestation investments since signing up to that scheme at COP 26. Many members have in fact increased their exposure to notorious deforesters in that time.

We cannot waste any more time with more voluntary initiatives if we are to meet the 2025 deadline for ending deforestation. We have a plan and a blueprint, with mandatory due diligence at the core. Without this reform to our financial regulations, there may well be no forests left to save and the British public will be left holding the bill for this unnecessary race to the bottom.

Baroness Hayman Portrait Baroness Hayman (CB)
- Hansard - - - Excerpts

My Lords, with this group we return to the issues of how this legislation can support the ambition of the now Prime Minister—then Chancellor—to be the leading net-zero financial centre.

In this group I have Amendments 201 and 235 to 237, and I am grateful for the support of the noble Baronesses, Lady Sheehan, Lady Wheatcroft, Lady Northover, Lady Drake and Lady Altmann, on those amendments. It is not a monstrous regiment; I think it is a rather impressive regiment of women who will put forward amendments in this group. We have already heard from the noble Baroness, Lady Worthington; I very much support her words and the argument just made by the noble Baroness, Lady Boycott.

Investment in deforestation will undermine financial firms’ transition plans and sustainability impact reporting. It needs to be underpinned by real action. Bringing mandatory due diligence into law is supported by the Government’s own expert body, the GRI task force, and the UN Secretary-General at COP 27. It is not sufficient that UK firms stop importing deforestation risk commodities, as the Environment Act requires; UK financial firms must stop funding them too. This amendment would achieve that.

I have also added my name to Amendment 233, in the name of the noble Baroness, Lady Wheatcroft, on sustainability disclosure requirements. I will leave it to her to explain the amendment in detail but, fundamentally, there is little dispute over the importance of sustainable disclosure requirements, but equally little progress being made, and the legal basis for those requirements is unsure. Those issues would be addressed by this amendment, and I support it.

I turn to my Amendments 201 and 237, which relate to fiduciary duties and would require the Secretary of State for Work and Pensions and the FCA to publish guidance—to which occupational pension schemes and FCA-regulated firms must have regard—considering the long-term consequences of decisions and the impacts of their investments on society, climate and nature. This reflects duties applicable to companies under the Companies Act, but those provisions apply to financial services companies only in relation to their shareholders, not their clients, and they do not apply to pension funds at all. I very much welcome the work to date of the DWP and FCA on fiduciary duty. However, research by the Principles for Responsible Investment, a UN-founded body with 3,000 signatories and $100 trillion in assets, found that investor understanding of their duties was discouraging them from pursuing—or even considering—positive sustainability impacts, and recommended further guidance from the UK Government and regulators. Similarly, a study by the UK Sustainable Investment and Finance Association reported that

“We continue to see a common lack of understanding within financial services on the extent to which ESG”—


Environmental Social and Governance—

“factors form part of investors’ fiduciary duties. This area needs urgent clarification for finance to reach net-zero.”

UKSIF also recommended that guidance that both risks and impacts should be considered a core component of fiduciary duties.

My amendments do not overturn existing fiduciary responsibility. They would merely result in guidance on how impacts and long-term matters are considered when acting in investors’ financial interests. They are not prescriptive about the content of the guidance, which would not be legally binding. The Government have made much of their desire for more productive investment by the financial sector, but confusion about fiduciary duty has been raised as a key barrier. This amendment could help to end that confusion.

Amendment 235 on green taxonomy relates to commitments dating back to 2019 and reiterated in October 2021 to at least match the ambition of the key objectives in the EU’s sustainable finance action plans. They follow through on the commitments made for the Treasury to publish the taxonomy and for the FCA and government departments to make the necessary changes to implement it.

I must say that the Government’s approach to taxonomy is somewhat confusing. The Green Technical Advisory Group—or GTAG—was established in June 2021 and delivered advice to the Treasury in October 2022. The Minister reconfirmed a commitment to the taxonomy in the House of Lords in November. However, this was followed in December 2022 by a Statement seeming to back away from producing a green taxonomy, describing it as a “complex, technical exercise”. Although the noble Baroness, Lady Penn, stated in Committee on 30 January:

“The Government are committed to implementing a green taxonomy as part of their sustainable finance agenda”—[Official Report, 30/1/23; col. GC 170.],


I fear that what the Government have in mind is a voluntary model, which would be fragmented and incomplete, rather than robust and comprehensive. I should be grateful for clarity and reassurance from the Minister.

The delay is frustrating for the many parts of the industry that have directly and indirectly assisted the development of a green taxonomy. More than a dozen other jurisdictions have brought forward their own green taxonomies, seemingly without insuperable difficulties. The Government need to restate a clear timeline for implementation. The Skidmore review agreed, and proposed a “transition taxonomy”. This amendment makes provision for that.

20:00
A GTAG report only last week said:
“With the US and EU—the two biggest markets that UK investors currently deploy capital into—raising the stakes with a massive green subsidy and pro-green business regulatory push, the UK will need to significantly raise its own game to attract capital seeking net zero opportunities and secure its role as the world’s leading net zero financial centre … With the race to secure green investment on—and more than 30 taxonomies in development globally—the time to act is now.”
I hope the Minister will agree.
Finally, my Amendment 236 on net-zero transition plans requires the FCA, the PRA and Ministers to make rules and regulations requiring production of net-zero plans by the end of 2023. Transition plans were announced by the then Chancellor at COP 26. The now PM set out the UK’s
“responsibility to lead the way”.
A new transition plan task force was established and reported in November last year. However, there has again been silence from the Government. As with the taxonomy and SDR, there was no reference to transition plans in the Edinburgh reforms announcement.
The key constituents of the transition plan are set out in proposed new subsection (4) in the amendment and closely follow the recommendations of the task force. It is especially important that companies bring forward transition plans before they list on UK markets, as that is their chief opportunity to raise capital to expand their business. Both the Climate Change Committee and the Skidmore review also set out the case for transition plans and called for them to be made mandatory.
All these amendments are modest and proportionate. With clarity on fiduciary duty, a functioning taxonomy, sustainable finance disclosures and transition plans, the UK has the opportunity to meet the ambitions set out at COP 26, and I hope the Minister will be able to respond positively.
Baroness Wheatcroft Portrait Baroness Wheatcroft (CB)
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My Lords, this group of amendments has already been spoken to by several eloquent speakers. I support the amendments in this group, but I shall speak particularly to Amendments 233 and 235 to 237, to which I put my name. The common thread in them is encouraging financial institutions to be serious about their intention of helping the country meet its net-zero target. If the Government are serious about that target, they will surely see the merit in these amendments.

Financial institutions may understand that the long-term health of countries, their economies and their businesses requires a focus on net zero, but short-term considerations such as this year’s profit all too often influence their decisions. Hence, in 2021, the 44 largest members of the Net-Zero Banking Alliance, a group that includes Barclays, HSBC, Lloyds, Nationwide and NatWest, provided $143.6 billion in lending and underwriting for the 75 companies doing the most to expand oil and gas. Principles sometimes come too expensive for these institutions to follow. If those organisations are to be discouraged from such behaviour, in their own long-term interests as well as ours, it will be by forcing them to make firm environmental commitments and to publicly report on them.

It seems that the Government have shared this view. According to a report in the Financial Times last May:

“Ministers made a last-minute decision to withdraw plans to force big UK companies and asset managers to disclose their environmental impact”.


They decided to drop that from the Queen’s Speech at the last moment. The sustainability disclosure requirements were apparently seen as being at odds with the Government’s deregulatory strategy. There is plenty of deregulation rhetoric around at the moment, but those of us who were in the Chamber yesterday for the agonising discussion of the Retained EU Law (Revocation and Reform) Bill might feel that the strategy was far from evident.

These amendments are intended to provide help to the Government as they seek to implement their net-zero strategy. Amendment 233 would do for financial organisations what the Government have been planning for business generally. It would require the financial regulators—the FCA and the PRA—and Ministers to make regulations by the end of this year requiring sustainability disclosures for listed firms, fund managers, personal pension providers, banks, insurers and pension schemes.

In addressing this amendment, perhaps the Minister will confirm that this complies with the Government’s thinking in the wake of COP 26, when the transition plan task force was set to work to look at how large companies and financial firms should be required to report on how they are managing the transition to net zero. If the Minister accepts that, will she explain why this Bill should not contain this amendment?

Amendment 236 further details requirements. Amendment 237 complements Amendment 201. It refers to pension schemes and requires trustees to have regard to the long-term effects of their investment decisions. Pensions are all about the long term, so they should have regard to the long-term effects of their decisions, not the short-term effect on the bottom line for the fund manager who is interested in his bonus that year. A little legislation to help them on their way to doing the right thing seems a good idea.

The aim of Amendment 235 in the name of the noble Baroness, Lady Hayman, is, essentially, to provide that help to institutions in making these crucial decisions. A green taxonomy—long discussed—needs measurable criteria and this amendment would require the Treasury to provide a framework for that. As the Minister said, the Government are—apparently—committed to implementing the green taxonomy. This amendment, like the others in the group, seeks only to encourage the Government to demonstrate their commitment with the sense of urgency that is now required.

Baroness Meacher Portrait Baroness Meacher (CB)
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My Lords, I wish to speak extremely briefly to support my noble friend Lady Boycott—I am sorry, I did not see the noble Baroness, Lady Sheehan.

Baroness Sheehan Portrait Baroness Sheehan (LD)
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My Lords, it is a pleasure to follow the noble Baroness, Lady Wheatcroft. I am sorry that I kept bobbing up and down while she was speaking.

This is an essential group of amendments, several of which I have added my name to. They are important because billions to trillions of pounds will be invested over the near to medium term into an economy that is transforming with increasing rapidity into a low-carbon one. It is clear that climate risk is financial risk: returns on investments and the ability to pay back loans are exposed to the risks of rising temperatures, as evidenced by recent catastrophic climatic events, and action taken by policymakers to transition to a low-carbon economy, such as the US Inflation Reduction Act.

Businesses, big and small alike, are poised to pull the start trigger on investments but are held back in the UK by lack of clarity about the Government’s intentions. The Government have made the right noises but not followed through, leaving doubt and uncertainty in their wake. The situation is urgent. The US Inflation Reduction Act is a game-changer, and the EU will follow suit. Green investment is the future. Our businesses know that but are hesitating to commit, waiting for a clear signal from the Government that they are 100% behind the green revolution. Currently, the messages are rather mixed. 

For the sake of the debate’s flow, I will address the amendments to which I have added my name before addressing my Amendment 232. I start with Amendment 168, in the name of the noble Baroness, Lady Worthington. Climate risk is not specifically factored into either the regulatory capital risk requirements for banks or the solvency requirements for insurers. I support Amendment 168 and have added my name to it. I have pursued the theme of stranded assets for several years. I am concerned that the taxpayer is not left to pick up the cost, for example, of decommissioning oil and gas platforms in the North Sea abandoned after profits have been creamed off. How much better it would be if the Government clearly laid out a framework, via their regulator, that the risks in financing fossil fuel exploration, exploitation and production, as well as other climate risk-exposed sectors, must be taken into account prior to investment decisions being made.

I move on swiftly to Amendment 199 on deforestation. After fossil fuels, deforestation is—as the noble Baroness, Lady Boycott, pointed out—the second-largest contributor to global warming. It is responsible for 12% of all global greenhouse gas emissions. Scientists tell us that, to stand any chance of limiting global temperature rise to 1.5 degrees centigrade, commodity-driven deforestation must be ended by 2025.

What happens to rainforests matters to us all. In fact, although thousands of miles away, the UK has a large deforestation footprint. It is for this reason that, in July 2021, I and noble Peers from across the House tabled amendments on the issue to the Environment Bill, now the Environment Act 2021. I was pleased to see the noble Baroness, Lady Meacher, poised to add her contribution to this. I commend the Government for the action that they have already taken on this issue. Schedule 17 to the Environment Act was the first time that forest risk commodities have been addressed in legislation.

As already mentioned by the noble Baroness, Lady Boycott, Sir Ian Cheshire, the former chair of Barclays and head of the Government’s own Global Resource Initiative task force, tells us in an open letter dated 23 January and addressed to the Minister, the noble Baroness, Lady Penn; Andrew Griffith, the Economic Secretary to the Treasury; and all Members of the House of Lords:

“Under forthcoming secondary regulations, large companies will be required to establish a due diligence system to assess and mitigate the risk of importing commodities grown on illegally deforested land, reporting annually on their progress”.


When the Minister comes to reply, can she tell us when we may expect to see these regulations?

Sir Ian goes on to say that

“while this is an important step, regulating supply chains alone is not enough”.

It is therefore recommended that

“the Government should make it illegal for financial institutions to invest in or lend to supply chain companies that are unable to demonstrate forest risk commodities have been produced in compliance with ‘local laws’ (i.e. legally)”.

20:15
This amendment, which I strongly support, sets out to fill the gaps identified by Sir Ian Cheshire. He makes a compelling case that it is surely far better to require banks to conduct due diligence on their lending and interventions at the start of the process when the initial finance is provided. It occurs to me that Sir Ian’s letter is addressed to all Peers. I wonder whether it would be appropriate for the Minister to make arrangements to place that letter in the Library, where it can be viewed by all noble Lords.
Amendment 201 was ably and knowledgably introduced by the noble Baroness, Lady Hayman. I am going to add very little except to say that I have added my name to it and support it for the reasons laid out in the remarks at the start of my contribution.
Amendment 236 on the net zero transition plans, in the names of the noble Baronesses, Lady Hayman and Lady Wheatcroft, would require the FCA and PRA and Ministers as appropriate to make rules and regulations on net zero transition plans in relation to the sectors that fall under their jurisdiction. That is long overdue, and I hope the Minister will address the issue of when we will finally have sight of them. Businesses need them urgently, as highlighted in the Skidmore review, Mission Zero, so that they have the confidence that a level playing field brings.
I am hearing noises off. Should I stop or continue?
Baroness Penn Portrait Baroness Penn (Con)
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You should finish.

Baroness Sheehan Portrait Baroness Sheehan (LD)
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Thank you. I come to Amendment 232 in my name on green savings bonds. My reason for tabling this amendment is to draw attention to the success of the National Savings and Investments green savings bonds, which are an important part of the green finance landscape. Really it is a pat on the back for the Government—much-needed, maybe —so the Minister should view this as an opportunity for the Government to congratulate themselves. For me, it is an opportunity to ask them what more they can do to raise awareness of these bonds and promote them more aggressively. After all, the Climate Change Committee identified public engagement and behaviour change as major elements in the success of measures to keep the planet in a fit state for future generations, but many people complain that knowing what to do for the best is confusing. These bonds represent a safe way of putting their money to work for the benefit of all our futures.

Here is the background. The NS&I’s new green savings bonds became available from 22 October 2021, introduced by the then Chancellor, Rishi Sunak. They pay a fixed rate of interest over a three-year fixed term, and the current rate is 4.2%. The minimum deposit is £100 and the maximum is £100,000 per person. NS&I’s savings accounts are long-standing, recognisable and safe. They are hugely popular with UK savers, not least because investments are totally safe, being 100% backed by the Treasury. There is not the usual limit of £85,000 that there is with providers covered by the Financial Services Compensation Scheme. Many savers want to make green and ethical investment choices. Work by the Cambridge Institute for Sustainability Leadership found that the median saver would prefer a sustainable fund, even if they have to sacrifice up to 2.5% returns.

Money saved with NS&I’s green savings bonds is used to fund six types of green projects: making transport cleaner; switching to renewable energy; improving energy efficiency; pollution prevention and control; protecting living and natural resources; and adapting to climate change. These projects are publicised and clearly audited for climate and nature benefits. Another benefit is that raising funds through NS&I can actually give greater financial stability than raising funds on the financial markets. During the meltdown in borrowing costs following the botched “fiscal event” in September last year, investors in NS&I did not dump their bonds because they could not do so; there was no panic in NS&I’s offices in Blackpool, Glasgow, Birkenhead and Durham—please note, none in the south-east—because the bonds are not transferable. Further, when a larger amount of a Government’s debt is held by their citizens, it is less prone to volatility. There is lots to like about the products. There are few cash-based green savings products in the market, especially ones with such a high level of transparency about their use of proceeds.

My amendment is intended to put in the public domain at regular intervals the contribution made by the NS&I’s green bonds and the like towards UK green financing and the consequent reduction in targeted greenhouse gas emissions. It is worded in such a way as not to make proposals over the amount of government borrowing or how they should raise taxes, only to seek information on how the Government are raising funds for green investment. It would be helpful if the Minister could say how much has been raised through the Government’s green bonds to date, how much is forecast to be raised annually in future and what the Government’s ambition is for their future, including in relation to the promotion of these products.

Committee adjourned at 8.21 pm.

House of Lords

Wednesday 1st March 2023

(1 year, 9 months ago)

Lords Chamber
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Wednesday 1 March 2023
15:00
Prayers—read by the Lord Bishop of Oxford.

Oaths and Affirmations

Wednesday 1st March 2023

(1 year, 9 months ago)

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15:06
Lord Goldsmith took the oath.

Eating Disorder Services: Men

Wednesday 1st March 2023

(1 year, 9 months ago)

Lords Chamber
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Question
15:08
Asked by
Baroness Parminter Portrait Baroness Parminter
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To ask His Majesty’s Government what steps they are taking to improve men’s access to eating disorder services.

Lord Evans of Rainow Portrait Lord Evans of Rainow (Con)
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My Lords, we are committed to ensuring that everyone with an eating disorder has access to timely treatment based on clinical need. Under the NHS long-term plan 2023-24, we will invest almost £1 billion extra in community mental health care for adults with severe mental illness, including eating disorders. Since 2016, investment in children’s and young people’s community eating disorder services has risen every year, with an extra £35 million per year from 2021-22.

Baroness Parminter Portrait Baroness Parminter (LD)
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As the cricketer Freddie Flintoff showed, anyone can get an eating disorder, but there is very little information about the inequalities in access to community-based treatment and treatment outcomes. Can the Minister say when the national clinical audit which was promised this year by NHS England will take place, so that we can get the proper data that we need and give everyone the service and support they need?

Lord Evans of Rainow Portrait Lord Evans of Rainow (Con)
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The noble Baroness raises a very good point and gives a well-known example. Sadly, many men suffer from this disease, and there are community groups that help men with mental health issues, including Men’s Sheds. When I was serving in another place, I always made a point of seeing the Men’s Sheds in my constituency and they did an outstanding job in so many places. I cannot give a direct answer to her Question, but I have asked for a specific time when I can answer it in full and, once I have that, I will reply.

Baroness Bull Portrait Baroness Bull (CB)
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My Lords, the Minister will be aware that the NHS recommends that adult males require, on average, around 2,500 kilocalories a day. Can he therefore explain why the calorie labelling regulations that came into force last year require qualifying businesses to display prominently a statement that adults need around 2,000 kilocalories a day?

Lord Evans of Rainow Portrait Lord Evans of Rainow (Con)
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The noble Baroness raises a very good point. Sadly, not all manufacturers have gone along with that last legislation to make it crystal clear, notwithstanding the alcohol industry. Many other industries really need to step up to the plate to make sure it is crystal clear what the calorific intake should be per day.

Baroness Chisholm of Owlpen Portrait Baroness Chisholm of Owlpen (Non-Afl)
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My Lords, I thank the noble Baroness, Lady Parminter, for bringing forward this important Question. We know that boys and men are very unwilling to come forward when there is a problem. What is being done to make schools aware of this problem, and to make teachers aware of how to notice boys who may have a problem with an eating disorder?

Lord Evans of Rainow Portrait Lord Evans of Rainow (Con)
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I thank my noble friend for that very good point. Eating disorders are serious, life-threatening conditions which can affect people of any age, gender, ethnicity or background. People with eating disorders can face stigma, which can stop them reaching out for help and reaching their true potential. We have committed to offer all state schools and colleges a grant to train a senior mental health lead by 2025, enabling them to introduce effective, whole-school approaches to mental health and well-being. This is backed by £10 million in 2022-23. More than 8,000 schools and colleges, including half of state-funded secondary schools, have taken up the offer so far.

Lord Hunt of Kings Heath Portrait Lord Hunt of Kings Heath (Lab)
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My Lords, the noble Baroness, Lady Chisholm, suggested that men may be reluctant to see their doctor or seek advice on some health issues, which has been very well researched. One of the puzzles is why the Government seem to have set their face against establishing a men’s health strategy, given that health outcomes for men can be so poor in so many parts of the country. Will the Minister’s department give this further consideration and come forward with proposals to establish such a strategy?

Lord Evans of Rainow Portrait Lord Evans of Rainow (Con)
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The noble Lord raises a very good point, which I agree with. I will take his excellent question back to the department and come back to him on it. In terms of this Question, a significant number of young people affected are females and a relatively small part are young men, but the whole strategy will encompass all men and women.

Baroness Manzoor Portrait Baroness Manzoor (Con)
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My Lords, as the Minister has just said, around 70% of those affected by eating disorders are girls and women. However, there has also been an increase among young boys and men. Can my noble friend say what relationship boys and men have with their body image and what perception they have of it, in light of their physical and mental health? What specific resources will be dedicated to this issue?

Lord Evans of Rainow Portrait Lord Evans of Rainow (Con)
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That is another excellent question. Poor body image can affect anyone at any point in their lives. The pressure to achieve an idealised body image has wide-ranging consequences for mental and physical well-being. The growth of social and digital media has increased exposure to images of beauty which are unrealistic and, in some cases, untenable. Body image is recognised as a risk factor for mental health problems and is more commonly identified as a key risk factor for eating disorders and unhealthy eating behaviours. Members with teenage children in their families will know how much time they spend on their mobile devices.

Lord McDonald of Salford Portrait Lord McDonald of Salford (CB)
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My Lords, the Minister did not answer my noble friend Lady Bull’s question. Calorie labelling talks about a daily intake of 2,000 calories, which is the amount recommended for a woman. For a man, it is 2,500 calories per day. Why is this the case? Will the Minister undertake to change this and make it accurate?

Lord Evans of Rainow Portrait Lord Evans of Rainow (Con)
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The noble Lord raises a very good point. I apologise to the noble Baroness; I cannot give a specific answer as to why it is 2,000 calories rather than 2,500, but I will ask and come back to her.

Lord Allan of Hallam Portrait Lord Allan of Hallam (LD)
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My Lords, my noble friend’s Question brought back a memory from my teenage years of being told by a nurse that she would say that I had anorexia but that could not be the case because I was a boy. Fortunately, our understanding has moved on since then and we now recognise that eating disorders can affect everyone, irrespective of gender or age. Does the Minister agree that public health services have a vital role to play in broadening that understanding among the general population? What resources will the Government provide to them for that essential educational work?

Lord Evans of Rainow Portrait Lord Evans of Rainow (Con)
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The noble Lord raises a very good point. When he and I were young boys, there was not the internet. He shows that this issue did occur before the internet. Under the NHS long-term plan for 2023-24, we will invest almost £1 billion extra funding in community mental health care for adults with severe mental illness, including dietary issues.

Lord Brooke of Alverthorpe Portrait Lord Brooke of Alverthorpe (Lab)
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Is the Minister aware from his previous experience that there are 12-step recovery programmes available for both overeaters and undereaters? Is he aware that there is an all-party parliamentary group advocating and pressing for these to be extended over a wider area? This is particularly because they are free. If so, would he be prepared to meet the group and talk about what such programmes have to offer?

Lord Evans of Rainow Portrait Lord Evans of Rainow (Con)
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I am most grateful to the noble Lord for that very kind invitation. I would be delighted to attend the APPG.

Baroness Cumberlege Portrait Baroness Cumberlege (Con)
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Does my noble friend agree that community pharmacies are able to provide men, and indeed women, with advice on healthy lifestyles, including on diet? Will he urge the Government to introduce in England a properly financed “pharmacy first” service, as in Scotland, which we know works well, so that services such as those provided in Scotland can be provided in England by all pharmacies so that people can have access to them?

Lord Evans of Rainow Portrait Lord Evans of Rainow (Con)
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I thank my noble friend for that excellent question. There are over 11,000 community pharmacies in England. All provide advice on healthy living; that is already part of their terms of service. People know and trust their local pharmacies, but people do not always know just what pharmacies are able to do and how skilled pharmacists are in diagnosing minor illnesses. Specifically on “pharmacy first”, we want to go further. We are exploring what more pharmacies could do, learning from the “pharmacy first” approach in Scotland, including enabling the supply of some prescription-only medicines without a prescription.

Baroness McIntosh of Hudnall Portrait Baroness McIntosh of Hudnall (Lab)
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My Lords, the focus of the Question, and of some of the Minister’s answers, has understandably been on young people; admittedly, eating disorders frequently start in early years but they are lifelong disorders. They can go away and then flare up again when adverse life events cause them to do so. Following on from my noble friend Lord Brooke’s question, can the Minister say what particular kinds of therapy the Government are planning to invest in—he spoke earlier about investment—and what research they have done into the efficacy of different therapies at different points in people’s lives?

Lord Evans of Rainow Portrait Lord Evans of Rainow (Con)
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I am most grateful to the noble Baroness for that excellent question. I do not want to mislead the House that this is all about young people. She is right: disorders start in early life but continue through adult life. The Government are taking steps to expand the number of practitioners who can deliver evidence-based psychological interventions intended to treat those with an eating disorder. This includes expanding the number of individual trainees and qualified practitioners who are competent to deliver cognitive behavioural therapy for eating disorders, as well as the Maudsley model of anorexia nervosa therapy in adults.

Prisoners: Imprisonment for Public Protection

Wednesday 1st March 2023

(1 year, 9 months ago)

Lords Chamber
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Question
15:18
Asked by
Lord Moylan Portrait Lord Moylan
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To ask His Majesty’s Government what progress they have made in developing a new action plan for prisoners serving an indeterminate Imprisonment for Public Protection (IPP) sentence.

Lord Bellamy Portrait The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Bellamy) (Con)
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My Lords, the Government committed to reviewing and refreshing the IPP action plan in line with the recommendation of the Justice Select Committee’s IPP report. HM Prison and Probation Service is currently finalising what the action plan should prioritise, the governance needed to oversee its delivery, and how progress will be tracked. The revised action plan will be published by 31 March 2023.

Lord Moylan Portrait Lord Moylan (Con)
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My Lords, the recall of prisoners on licence is crucial to this. Last year was the first year in which the number of prisoners in jail increased since the sentence was abolished in 2012, because of recall. In late 2021, the Government produced figures that appeared to show that, because of recall, the number of prisoners in 2025 would have risen by 2,600. Do the Government still stand by those projections?

Lord Bellamy Portrait Lord Bellamy (Con)
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My Lords, broadly speaking, in terms of order of magnitude, the projections remain the same. However, it is important to note that those figures to which my noble friend refers do not include the re-release of previously recalled prisoners. In the latest available published statistics for the latest available year, there were 214 IPP prisoners on their first release; 458 prisoners who had previously been recalled but were then re-released; and 622 recalls. I am not sure that I would accept the premise that the prison population is increasing.

Lord Blunkett Portrait Lord Blunkett (Lab)
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My Lords, I commend the noble Lord, Lord Moylan, for his tenacity in relation to the action plan. One simple way of helping to reduce numbers and to free those on licence from what is quite often seen as a tyrannical regime would be to implement the small amendment agreed in this House to the Police, Crime, Sentencing and Courts Bill—now Act—for automatic referral at 10 years on licence. That is not currently being implemented. I would be grateful if the Minister would go back and take a look, with the probation service, at why it is not.

Lord Bellamy Portrait Lord Bellamy (Con)
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My Lords, as far as I am aware, that provision should be implemented. If it is not, that is a matter that I shall investigate and revert to your Lordships.

Lord Brown of Eaton-under-Heywood Portrait Lord Brown of Eaton-under-Heywood (CB)
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Recognising the need for public protection, my question relates to the IPP prisoners who are now detained for 10, 12 or 14 years beyond their tariff terms—that is, beyond the punishment they deserve for their offending—because they cannot prove to the Parole Board that they can be released without any risk of reoffending. It is a proof which the noble Lord, Lord Clarke of Nottingham, when he abolished this sentence in 2012, described as “almost impossible”. Do the Government think that is just? If so, will they continue to think it just, however many years may pass—after 15, 20 or 25 years—or do they recognise that there will come a point when it is unjust? If so, when?

Lord Bellamy Portrait Lord Bellamy (Con)
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In response to the noble and learned Lord, I can say that we started with 6,000 offenders in this category. We now have 1,400 who have never been released. That is because the Parole Board considers them to be a risk to public protection—they have been reviewed, in many cases several times, and that is why they are still there. A further 1,500 have been released, but they have been recalled for various reasons—but they are eligible now for re-release.

Lord Clarke of Nottingham Portrait Lord Clarke of Nottingham (Con)
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My Lords, it is well over 10 years now since I abolished indeterminate sentences with full cross-party support, including the vocal support of the noble Lord, Lord Blunkett, the Home Secretary who introduced them, because we both agreed that they were being used on a scale, and in a way, that had never been intended or contemplated by Parliament. We never imagined that over 10 years later we would find that over 1,000 people were still serving these sentences, many of them way beyond any minimum sentence that the judge may have recommended when imposing it.

Following on from the last question, I made the mistake of assuming that the Parole Board would steadily release all such prisoners when the time was right, but I also made the mistake of putting the burden of proof on the prisoner to prove that there was no danger. That has failed and there is no point in still defending it. The Government have already rejected resentencing of all the offenders involved. Can the Minister assure me that the plan that is about to be produced will bring an end to the indeterminate, timeless detention of people for whatever crime, some of them quite minor, and replace it with a wholly new sentencing method if indeed some of these people would be a danger if released?

Lord Bellamy Portrait Lord Bellamy (Con)
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My Lords, the Government are well aware of the difficulties of the situation. Our approach to the present problem is that we cannot contemplate the automatic release of many of those prisoners that a resentencing exercise would involve. What we can do is better prepare them for release, especially with regard to mental health problems, and better look after them “in the community” when they are released, so that they are not available for recall. In that way, the Government hope that these figures will be substantially reduced.

Lord Ponsonby of Shulbrede Portrait Lord Ponsonby of Shulbrede (Lab)
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My Lords, I too pay tribute to the noble Lord, Lord Moylan, for his tenacity on this issue, but the reality is that this group of prisoners is becoming ever more difficult to deal with. They have higher rates of mental health problems, self-harming and suicide, and higher recall rates. That is the reality of what the Prison Service is dealing with. Can the Minister assure the House that there will be specialist training for probation officers to deal with those prisoners, and for mental health workers to understand them, to try to reduce the recall rates when they are released?

Lord Bellamy Portrait Lord Bellamy (Con)
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My Lords, I can give that assurance. The problem is acute; it gets more difficult as time passes. The need for specialised training and proper attention to these matters is growing. The action plan will include a special supervisory board with specific responsibility for IPP prisoners, with a view to tackling this very difficult problem.

Lord Marks of Henley-on-Thames Portrait Lord Marks of Henley-on-Thames (LD)
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My Lords, in concert with all who have spoken, I suggest that the continued detention of so many IPP prisoners beyond their tariffs shames the criminal justice system. We have been around this course so many times, but do not the Government now appreciate that their lack of progress on this betrays a complete inconsistency? On the one hand, they agree that the abolition of IPP sentences under LASPO should have happened because continued preventive detention for prisoners who had served their time could not be justified, yet on the other they maintain and defend such a system in failing to release almost 3,000 of those prisoners—including those who have been released once—who were sentenced before LASPO but 10 years after those sentences were abolished.

Lord Bellamy Portrait Lord Bellamy (Con)
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My Lords, the then Government decided that the abolition of the IPP sentence should not be retrospective. The existing IPP action plan has had a certain degree of success, and the revised IPP action plan will, we hope, fully address the problem.

Baroness Williams of Trafford Portrait Baroness Williams of Trafford (Con)
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My Lords, it is the turn of the Labour Benches.

Lord Morris of Aberavon Portrait Lord Morris of Aberavon (Lab)
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My Lords, to simplify the situation and make it abundantly clear: are the numbers rising or lowering in each category?

Lord Bellamy Portrait Lord Bellamy (Con)
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My Lords, I am not sure I entirely understood the noble and learned Lord’s question.

Lord Morris of Aberavon Portrait Lord Morris of Aberavon (Lab)
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My Lords, what I want to know is whether the numbers of these prisoners are rising or lowering in each category.

Lord Bellamy Portrait Lord Bellamy (Con)
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They are currently, in broad terms, about the same. We have 1,400 who have never been released; we have 1,500, roughly speaking, on licence; we are releasing, including rereleases, about 600 a year; and recalls are running at slightly less than that.

Homeless People and Rough Sleeping

Wednesday 1st March 2023

(1 year, 9 months ago)

Lords Chamber
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Question
15:29
Asked by
Lord Bird Portrait Lord Bird
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To ask His Majesty’s Government what steps they are taking to prevent homeless people who are living in hostels or supported homes in England from being pushed back on to the streets; and what progress they have made with their target to end rough sleeping by 2024.

Baroness Bloomfield of Hinton Waldrist Portrait Baroness Bloomfield of Hinton Waldrist (Con)
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Yesterday, the annual rough sleeping snapshot statistics were published, which showed a rise in the number of people sleeping rough on a single night. However, the long-term trends show the considerable progress we have made: rough sleeping levels remain 35% lower than at their peak in 2017. But we are not complacent. This Government remain steadfastly committed to ending rough sleeping. We are delivering 6,000 move-on homes through the rough sleeping accommodation programme, and our strategy, published in September last year, outlined how we will invest £2 billion over the next three years.

Lord Bird Portrait Lord Bird (CB)
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I thank the Minister for that Answer. My problem is with the extension of homelessness that has taken place—a 34% increase in the number of people facing no-fault evictions, which is the Section 21 that we need to address. We have 125,000 children in temporary accommodation and 100,000 households in temporary accommodation. These are the kinds of figures that are going to drive the Government’s plan for 2024 into the long grass, and I would like to know how they are going to address the increase in homelessness among people who have never, ever come anywhere near it and will end up rough sleeping.

Baroness Bloomfield of Hinton Waldrist Portrait Baroness Bloomfield of Hinton Waldrist (Con)
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The noble Lord makes some very good points, and there are a number of very complex issues that contribute to the rise in homelessness, particularly in the private rented sector. We shall be legislating on private rented sector reform, and that does remain a top priority for this Government. We will bring forward legislation within this Parliament. On 16 June last year, we published our White Paper, A Fairer Private Rented Sector, which sets out our plan fundamentally to reform the sector and level out housing quality. The Government are committed to banning the Section 21 no-fault evictions to protect tenants and will introduce the renters’ reform Bill in this Parliament.

Lord Greenhalgh Portrait Lord Greenhalgh (Con)
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My Lords, the point that we want to establish is that, as the noble Lord, Lord Bird, knows, rooflessness is very different from homelessness. These latest statistics are very concerning indeed, although the overall trend being 35% down is positive. What I really want to know is whether the Minister knows how many have been sleeping rough a second night, which is obviously even more concerning. Have we made progress in that regard?

Baroness Bloomfield of Hinton Waldrist Portrait Baroness Bloomfield of Hinton Waldrist (Con)
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The annual snapshot that we take in autumn is our official and most robust measure of rough sleeping on a single night. It is independently verified. I do not have the numbers for those who are out for a second night. But we know that the longer a person stays on the street, the more difficult it becomes to rebuild a life off it. As set out in the cross-government rough sleeping strategy, Ending Rough Sleeping for Good, we will have ended rough sleeping when it is prevented wherever possible and, where it does occur, is rare, brief and non-recurrent. We do have the No Second Night Out initiative, which pays for 14,000 beds and 3,000 support staff this year, with services ranging from emergency interventions to focus on preventions and a more sustained off-the-street accommodation offer with support.

Baroness Armstrong of Hill Top Portrait Baroness Armstrong of Hill Top (Lab)
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My Lords, this remains a real issue, and the Minister, I am afraid, is being rather complacent. We know that what has happened since 2010 is that there have been unprecedented levels of rough sleeping. We managed, in the early part of the 1997 Government, to reduce rough sleeping almost to nonexistence. We know how to do it. The Government know how to do it, but it is not happening. We now have the additional crisis that so many of the charities that are there to help those who are in most difficulty are going under, and their finances are stretched. The Government have got to do something—just what are they going to do?

Baroness Bloomfield of Hinton Waldrist Portrait Baroness Bloomfield of Hinton Waldrist (Con)
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We are absolutely not complacent, as I said in my initial Answer. In fact, between October and December, when the snapshot was taken, our management accounts show that homelessness reduced by 27%—although I acknowledge that that is partly as a result of seasonal variations, which happen every year. The Homelessness Reduction Act 2018 was the most ambitious reform to homelessness legislation in decades. Since it came into force in 2018, over half a million households have been prevented from becoming homeless or have been supported into settled accommodation. As a demonstration of our determination not to be complacent, we have put £2 billion into the fund to help reduce homelessness. The noble Baroness is entirely wrong to use 2010 as a comparator, because that is when the statistics were started on this basis. She might like to know that we are almost up to the level of highest number of households in temporary accommodation, which was in 2004.

Baroness Grender Portrait Baroness Grender (LD)
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My Lords, does the Minister agree that the one silver lining of the awful tragedy of the Covid pandemic was the Everyone In project, led by the noble Baroness, Lady Casey? But the chance to keep every homeless person in was then, frankly, squandered. Will the Minister agree to look into that wasted opportunity—the extraordinary waste of the chance at that particular moment? Will she come back to the House and explain why the Government have wasted that one critical moment when everyone was in, which could have been used to hit that specific target in the Conservative manifesto? That is clearly not going to be reached, as evidenced by the statistics yesterday.

Baroness Bloomfield of Hinton Waldrist Portrait Baroness Bloomfield of Hinton Waldrist (Con)
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I think we can all agree that the statistics yesterday were deeply disappointing. That is certainly a reflection of the cost of living, with a number of people being evicted from rental accommodation having fallen behind in arrears. However, there is much that we are doing to help: we have the rough sleeping initiative, Housing First, the Night Shelter Transformation fund, supported housing, and we are funding local authorities to provide assisted housing. We are doing a number of different things, which are all wrapped up in a £2 billion package, and, having spoken to the banks, I can assure the noble Baroness that we are all fighting the same war and that we still stick to our manifesto pledge to get rid of homelessness.

Lord Young of Cookham Portrait Lord Young of Cookham (Con)
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My Lords, I raise a subject that I have raised several times before: namely, the 200 year-old Vagrancy Act, which refers to “rogues and vagabonds” living in stables and coach houses. Everyone agrees that this Act has nothing to do with helping rough sleeping. On the contrary, by diverting rough sleepers down the criminal justice route, it isolates them from the support which my noble friend has said is available. Two years ago, the Government said that they would repeal the Vagrancy Act. Can my noble friend give a date for when that will happen?

Baroness Bloomfield of Hinton Waldrist Portrait Baroness Bloomfield of Hinton Waldrist (Con)
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The Government does agree that the Vacancy Act is antiquated and not fit for purpose, and therefore we have committed to repealing it. We made that commitment during the passage of the Police, Crime, Sentencing and Courts Act. Our commitment to repealing it has always been dependent on introducing modern replacement legislation to ensure that police and other agencies continue to have the powers that they need to keep communities safe and protect vulnerable individuals. As usual, I cannot give specific date when we will bring the legislation in; all I can say, as usual, is that we will bring forward suitable replacement legislation in a future legislative vehicle.

Baroness Finlay of Llandaff Portrait Baroness Finlay of Llandaff (CB)
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My Lords, do the Government recognise that the cuts in funding for support to homeless people now mean that, since the 2010 level, 12,000 more people needing psychological support are in long-term homelessness, which is often due to adverse childhood experiences and their subsequent turning to alcohol, and that alcohol is now the cause of almost one in 10 of the deaths among the homeless? Without addressing those underlying psychological causes, the problems behind the homelessness of many people will never be addressed.

Baroness Bloomfield of Hinton Waldrist Portrait Baroness Bloomfield of Hinton Waldrist (Con)
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I can assure the noble Baroness that the homelessness strategy crosses all departments, including the Home Office, the Department for Work and Pensions, the Ministry of Justice, the Department of Health and Social Care, the Department for Education and the Ministry of Defence. My briefing from the DWP on this very point states that the local housing allowance policy is kept under regular review, we monitor average rents and a significant support package for renters was announced in the autumn Budget. We are doing everything we can to provide household support in order to help people navigate through this very difficult time.

Water Companies: Water Pollution

Wednesday 1st March 2023

(1 year, 9 months ago)

Lords Chamber
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Question
15:39
Asked by
Lord Bishop of St Albans Portrait The Lord Bishop of St Albans
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To ask His Majesty’s Government what recent discussions they have had with water companies regarding water pollution.

Lord Benyon Portrait The Minister of State, Department for Environment, Food and Rural Affairs (Lord Benyon) (Con)
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My Lords, the current environmental performance of water companies is unacceptable. In December 2022, the Water Minister and the Secretary of State met with CEOs of lagging water companies—as identified by Ofwat’s recent assessment—to outline the Government’s expectations that performance must improve significantly. Furthermore, in January, my colleague Rebecca Pow met with the CEO of South West Water. She will be meeting the CEOs of all lagging companies individually every six months and she expects to see significant progress. Most recently, I also met CEOs of water companies with Minister Pow to highlight the importance of addressing water pollution and reaching their net-zero goals.

Lord Bishop of St Albans Portrait The Lord Bishop of St Albans
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My Lords, the water companies are themselves responsible for monitoring the quality of water. They are awarding themselves top marks and bonuses when they are clearly failing, as the Minister has acknowledged. When will the responsibility for monitoring water quality be taken away from these companies and given to the Environment Agency? When will there be serious sanctions against those running these companies for their repeated failures?

Lord Benyon Portrait Lord Benyon (Con)
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In 2013, we only knew about 5% of the storm overflow points where sewage was going into our rivers. We now know about 90% because we instructed the water companies to provide that information. By the end of this year, we will know about 100%. The Environment Agency is the guardian of water quality and it takes forward prosecutions. The Government have said that they will increase the fines available as, at the moment, there is a cap on them, which we think should be higher. The Environment Agency is already able to launch criminal prosecutions against CEOs. Ofwat has the power to impose a fine of up to 10% of a company’s annual turnover and all fines are taken from the water company’s profits and not from customers.

Lord Watson of Wyre Forest Portrait Lord Watson of Wyre Forest (Lab)
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My Lords, we consume twice as much water per capita as we did 50 years ago. There is an increasing frequency in sewage discharges as a result of extreme weather events, all of which require institutional investment. Do the Government not have the choice either to reduce profiteering in the sector in favour of this investment or to ask the taxpayer to subsidise this infrastructure?

Lord Benyon Portrait Lord Benyon (Con)
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We are asking water companies to spend a lot more—£56 billion. In this period alone, they are putting an extra £7 billion into investment in infrastructure. Water companies make a profit of about 3%. This is not dramatic, compared with what some other companies make, but we watch it very carefully through the instructions we give to Ofwat. We want to make sure that customers are getting a good deal but, more importantly, that there is investment going into infrastructure.

Lord Cromwell Portrait Lord Cromwell (CB)
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I wonder if the Minister is aware that, in two weeks, the Industry and Regulators Committee of this House will be producing its own report into governance and regulation in the water and sewage industry. This will clearly be of interest to many in this House. Can the Minister confirm that putting right the sort of problems we are talking about is going to take decades, not years? Can he also confirm that the money for it will not be public money, but that the companies themselves will raise money in the City, take on debt and possibly put up water bills?

Lord Benyon Portrait Lord Benyon (Con)
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At a time of concern about household expenditure, it is important that we balance water bills. It is always a balancing act. We want to make sure that, with an average bill at just above £1 a day to provide all the water a household needs and to have all the sewage taken away, water companies can invest in the necessary infrastructure. Most importantly, during the next decade or two, we must eliminate rainwater getting into sewage. This is the challenge. At the moment, we have water coming off roofs and going into Victorian or Edwardian sewers. Many of them have been updated and improved, but billions of pounds still need to be spent to tackle this recurring problem.

Lord Cormack Portrait Lord Cormack (Con)
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My Lords, I have raised before in this House the River Wye, which is one of the most glorious rivers in our country. We know why it is polluted; my noble friend the Minister has mentioned this from the Front Bench before. Can he give me some idea of when that river will flow clean again so that we can be proud of it, as our forebears were?

Lord Benyon Portrait Lord Benyon (Con)
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I am not an aquatic scientist but I can tell my noble friend that the problem in the Wye is principally due to phosphates coming from the poultry industry, which has boomed in that area and for which no adequate planning provision was made to prevent the leakage of effluent. The Environment Agency and other parts of Defra are making sure that we are correcting that. I hope that we will prevent what is happening, which is an absolute tragedy. For large parts of the year, large sections of one of the great rivers of this country are nearly ecologically dead. We want to reverse that.

Baroness Bakewell of Hardington Mandeville Portrait Baroness Bakewell of Hardington Mandeville (LD)
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My Lords, there has been considerable media interest in the pollution of bathing waters, inland rivers and waterways as a result of the release of sewage overflows. Nearly every week, the Minister is called here to answer questions on this issue. Given that warmer weather is approaching, can he say how the Government will protect the health of the children and adults who will be exposed to this fetid and polluted water?

Lord Benyon Portrait Lord Benyon (Con)
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We rightly beat ourselves up about this but it is worth stating that our bathing waters are in their best state ever. Last year, 93% of them were classified as “good” or “excellent”. The number of serious sewage incidents has fallen from 500 a year in the 1990s to 62 in 2021, although that number is still 62 too many. What is called wild swimming—what my mother used to call swimming—is becoming a great national sport and activity. We want to connect more people with nature; that is a wonderful way of doing it. Making sure that our rivers are clean is vital.

Baroness Hayman of Ullock Portrait Baroness Hayman of Ullock (Lab)
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My Lords, I feel like a stuck record on this issue; goodness only knows what the Minister feels like. He keeps assuring us that the Government are doing a lot of work here so why does he think that, week after week, month after month, he has to come to the Dispatch Box to answer the same question?

Lord Benyon Portrait Lord Benyon (Con)
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I refer the noble Baroness to the answers that I gave on 7 September, 25 October, 2 November, 14 November, 24 November, 30 January and 22 February, as well as to my 60 Written Answers. I think that we are all of the same mind: we want to resolve this problem. We are seeing massive enforcement activity taking place and a complete change to our farming system, which will weaponise soil as a great tool in preventing the pollution of our waterways. We are also seeing a variety of other activities, such as the riparian planting of woodland along rivers. Things are getting, and will continue to get, better but I like to fill the noble Baroness with joy by coming back and repeating this every week.

Baroness Davidson of Lundin Links Portrait Baroness Davidson of Lundin Links (Con)
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My Lords, water pollution is not confined to England. According to Scottish Water, more than 10,000 spill events typically happen north of the border each year; that is nearly 30 a day. Similar to other water companies, Scottish Water attributes many of those spills to flooding and more frequent rain due to climate change. Scotland’s environmental protection body, SEPA, works with the Environment Agency on cross-border issues across the Solent, the Tweed and in coastal waters but can the Minister ensure that he and his department are ever mindful to co-operate at a government level as well as at an agency level on cleaning up, planning and infrastructure upgrades? We all know that this issue does not stop at any border; neither does the effluent.

Lord Benyon Portrait Lord Benyon (Con)
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My noble friend is absolutely right: nature does not recognise borders. There is an arrangement whereby the Scots administer the Tweed, which is a border river, and the English Government administer the Esk, which is also a border river. However, we must ensure that our policies on the environment are aligned, that water companies, whether they are in Scotland or England, are abiding by the rules, and that we are of a similar mind in bearing down on this problem.

Lord Boateng Portrait Lord Boateng (Lab)
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My Lords, the water companies and their directors are making considerable profits. When was the last CEO or director of any water company prosecuted, fined or jailed for the grievous breaches that are occurring? If they have not been, why have they not been?

Lord Benyon Portrait Lord Benyon (Con)
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Part of me wants to answer that question by saying, “our rivers are in a better state under this system of administration of our waters”. However, I really want to say that we have given ourselves the powers now to do precisely what the noble Lord is asking for. We can have criminal sanctions, we can fine considerably more than we could previously, and we can drive up standards through our directions to Ofwat, through what we are providing with the extra enforcement that we are giving to the Environment Agency and through many other areas. It is not for me to say who should be criminally sanctioned or when. That is for the courts, and we have given them the powers to do that.

Radio Equipment (Amendment) (Northern Ireland) Regulations 2023

Wednesday 1st March 2023

(1 year, 9 months ago)

Lords Chamber
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Motion to Approve
15:51
Moved by
Lord Evans of Rainow Portrait Lord Evans of Rainow
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That the draft Regulations laid before the House on 17 January be approved.

Relevant document: 27th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 27 February.

Motion agreed.

Code of Practice for the Forensic Science Regulator

Wednesday 1st March 2023

(1 year, 9 months ago)

Lords Chamber
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Motion to Approve
15:51
Moved by
Lord Sharpe of Epsom Portrait Lord Sharpe of Epsom
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That the draft Code of Practice laid before the House on 26 January be approved. Considered in Grand Committee on 27 February.

Motion agreed.

Non-Domestic Rating (Rates Retention: Miscellaneous Amendments) Regulations 2023

Wednesday 1st March 2023

(1 year, 9 months ago)

Lords Chamber
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Motion to Approve
15:51
Moved by
Earl of Courtown Portrait The Earl of Courtown
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That the draft Regulations laid before the House on 9 February be approved. Considered in Grand Committee on 27 February.

Motion agreed.
Report (1st Day)
Relevant documents: 20th Report from the Delegated Powers Committee, 5th Report from the Joint Committee on Human Rights
15:52
Clause 1: Obtaining or disclosing protected information
Amendment 1
Moved by
1: Clause 1, page 1, line 9, after “or” insert “having regard to other matters known to them”
Member's explanatory statement
This amendment clarifies the meaning of “ought reasonably to know”.
Lord Sharpe of Epsom Portrait The Parliamentary Under-Secretary of State, Home Office (Lord Sharpe of Epsom) (Con)
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My Lords, before I speak to the amendments in this group, I would like to talk about some of the reasons why we are introducing them. Some of our amendments have been brought forward to reassure noble Lords and others that the offence will not capture the genuine work of journalists. We have listened to the concerns raised by the media sector and noble Lords in the House, and some of these amendments are a direct response to them.

The Government have heard from media stakeholders who believe that they could no longer hold the Government to account and that these clauses could inhibit the publication of articles critical of the UK’s defence or security response. I want to address those concerns directly. The Government are committed to defending our freedoms—values which define us and make us who we are. Few are more fundamental to that than freedom of the press. There is no intention to stifle or censor the media’s ability to expose or shine a light on issues. That is the proper role and function of the media and why the UK is such a strong advocate of media freedom globally.

Before we get into the details of individual provisions, I remind the House that these provisions replace the existing law in the Official Secrets Act 1911. We have been provided with a number of examples of journalistic reporting that have been cited as part of the case that more must be done to protect journalists in this Bill. Even were the Government to accept that any of these examples could hypothetically be caught by any of the offences, the same would be true of the existing laws. Accordingly, great comfort should be taken from the fact that no prosecutions of journalists have taken place under the espionage laws to date. I want to confirm again, on the record, that the focus of the Bill is on protecting the UK from threats from foreign states and those acting against UK interests, not interfering with the free press.

I begin with the amendments focusing on “ought reasonably to know”. The phrase was said to be unclear, with concerns raised that it could be interpreted as imputed knowledge, thereby catching those who engaged in specified conduct unwittingly—who did not know but are told that they should have known. I would like to strongly emphasise that this is not the Government’s intention and we do not consider that the current formulation would be interpreted by the courts in this way. However, we have considered the concerns raised on this issue, particularly the useful contributions in Committee from the noble and learned Lord, Lord Hope, and the noble Lord, Lord Marks. We agree that it would be helpful to clarify the meaning. These amendments therefore clarify that the prosecution must look at what matters were known to the individual at the time in determining whether that individual ought reasonably to have known something.

I now turn to amendments which all relate to the offence of materially assisting a foreign intelligence service. The amendments that the Government have put forward update the offence provided for in Clause 3(2). These amendments are similar to the ones put forward in Committee by the noble Lord, Lord Marks. The effect of these amendments is that the wording

“it is reasonably possible may”

in both Clauses 3(2)(a) and (b) would be replaced with “is likely to”, which in this context we see as meaning a real possibility. In order to ensure consistency across the clause, Amendment 13 also updates the relevant wording in Clause 3(3).

The Government have tabled amendments in response to a point raised in Committee by the noble Lord, Lord Pannick. These would add protections for lawyers, ensuring that any genuine legal activity will not be captured under the Clause 3 offence in the Bill. I beg to move.

Lord Marks of Henley-on-Thames Portrait Lord Marks of Henley-on-Thames (LD)
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My Lords, I thank the Minister for the helpful explanation of the many government amendments in this group. I thank him and the Government also for the considerable movement they have made in response to criticisms made by me and many others at Second Reading and in Committee of the breadth of the offences under Part 1. We are very grateful to the Government for the comprehensive way in which they have listened to our criticisms and moved towards positions that we have taken.

In particular, the troublesome phrase “ought reasonably to know” has been clarified by the qualification that what a defendant ought reasonably to have known falls to be judged having regard to other facts known to that defendant. Furthermore, in Clause 3, as the Minister explained,

“conduct that it is reasonably possible may materially assist a foreign intelligence service”

becomes conduct that “is likely to” materially assist a foreign intelligence service.

I welcome the new strengthened review provisions introduced by the new clause proposed in Amendment 85, in place of the old Clause 56. These and other concessions in the amendments moved by the Government allay many of our concerns.

However, there is one area left untouched that we say is still completely wrong: the failure to tighten up the definition of the

“interests of the United Kingdom”.

That is the subject of our Amendments 2 and 3, and the corresponding amendments wherever the phrase

“safety or interests of the United Kingdom”

appears. I note the word “or”: the interests of the United Kingdom alone are enough to qualify. It is principally in support of those amendments that I speak now.

We are concerned about the interests of journalists, and that is the title of this group. I do not accept what the Minister said when he suggested that it was permissible to rely on the fact that journalists have not in the past been prosecuted under security legislation. That may as a matter of fact be true, but it is neither safe nor good legislative practice to rely on it without tightening up the legislation so as to prevent such prosecutions succeeding.

16:00
As I pointed out in Committee, the interests of the United Kingdom are effectively synonymous with the interests of the Government of the day—not in a party-political sense, granted, but in the sense of how the Government perceive the national interest. As the Minister and others pointed out in Committee, that derives from the well-known case of Chandler v the Director of Public Prosecutions in 1964, which defined the phrase as meaning
“the objects of state policy determined by the Crown on the advice of Ministers”,
and it is a commonplace to suggest that the perception of the interests of the state differ between Ministers, between Governments and between political parties.
We argue that it is not the purpose of a national security Bill simply to protect the general policy objectives of the Government of the day. The proper function of a Bill about national security is the protection of the security and defence interests of the United Kingdom. It was pointed out by some, in response to our amendments in Committee, that security needs to encompass economic security, and I accept that. Therefore, we have added to our amendments in Committee, which merely used the words “security” or “defence interests” to qualify them in every case, making it clear that the security or defence interests of the United Kingdom may include the interests of the United Kingdom in its economic security.
However, without a narrower definition of the interests of the UK, the Bill contains a worrying restriction on investigative journalism and campaigning where conduct that could be taken to breach Clauses 1 to 5 might be contrary to government policy, and such policy might, as the Bill is drawn, have nothing to do with security but could embrace, for example, environmental protection, energy policy, safety standards, food standards, water quality, international competition in trade, immigration—the list could be endless. As the Bill is structured at the moment, disclosing any restricted information which came into a journalist’s or campaigner’s hands for a purpose that is contrary to government policy in any policy area could constitute an offence under Clause 1, provided that the foreign power condition were met. The problem is worse because, under the Bill as drawn, any friendly Government are to qualify as a foreign power, with the sole exception of Ireland. We believe that these offences should be restricted to cases where national security, to include economic security or the defence interests of the United Kingdom, is threatened.
That is the case for our amendments. I turn briefly to the other amendments in this group. Amendment 18 is in the name of the noble Lord, Lord Black of Brentwood. It relates to the Clause 3(2) offence of assisting a foreign intelligence service and would establish a defence where the conduct was
“with a view to publication of material by a recognised news publisher.”
We would support that amendment but, as we will explain on the next group dealing with the public interest defence, we believe it does not go far enough.
Amendment 72, in the name of the noble Baroness, Lady Jones of Moulsecoomb, and the noble Lord, Lord Pannick, would amend the foreign power condition to limit its application to conduct carried out for purposes of journalism to those cases where the conduct in question was instigated by or under the direction and control of a foreign power. We would support that amendment also.
Amendment 79B, in the name of the noble Lord, Lord Coaker, calls for a report on the impact of offences under Clauses 1 to 5 and the Official Secrets Act 1989, as amended under Schedule 17 to the Bill, on the operation of NGOs and journalists. We would welcome such a report, but I do stress that it does nothing to cure the remaining problems that are inherent in the Bill as it stands.
Lord Black of Brentwood Portrait Lord Black of Brentwood (Con)
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My Lords, I will speak to Amendment 18 in my name, supported by the noble Baroness, Lady Stowell, the noble Lords, Lord Stevenson and Lord Faulks, and to a number of government amendments that touch on the same issue. I declare my interest as deputy chairman of the Telegraph Media Group, which is a member of the News Media Association, and as director of the Regulatory Funding Company. I also note my other interests in the register.

One of the leitmotifs that ran through discussions on this Bill in the other place, and through Second Reading and Committee here, has been its impact on independent journalism, particularly investigative reporting, as the noble Lord has just said. I do not need to rehearse all those arguments on this subject, which have been well covered and widely reported. Indeed, it has attracted attention and criticism from international media freedom groups deeply concerned about the global impact of this legislation.

The crux of the argument is really very simple and arises mainly from the wide definitions of offences in Clause 3, which potentially criminalise aspects of investigative reporting. That in turn—this is the major worry—produces a powerful chilling effect on investigative reporting by responsible journalists. I appreciate that there are government amendments, which I am going to come to, but as it stands an offence punishable with heavy criminal sanctions and sentences is committed if someone

“knows, or ought reasonably to know, that it is reasonably possible their conduct may materially assist a foreign intelligence service”.

That would cover a wide range of reporting, whether about sexual assaults on board a nuclear submarine, Chinese influence in the UK, bullying by intelligence officers, an innocent photograph of a nuclear power station or huge investigations such as the Panama Papers.

The problem is that, when journalists start investigating a story, they cannot possibly know where it will lead and whether their reports might

“materially assist a foreign intelligence service”.

They should not be criminalised for what they ought to have known, even if what they actually did know at the time is taken into account. It is too nebulous and such a low bar that much reporting could be caught. Editors and reporters would far too often be forced to stop an important public interest investigation because of the fear of breaking the law and individuals facing prison sentences.

As I said in Committee, I have never believed that the new offences in this Bill would be used regularly to imprison journalists, and I do not believe that is what the Government intend. But the risk, the uncertainty, the lack of clarity in the law and the chilling effect are there. As a result, the damage to the public interest is there.

To echo the noble Lord, Lord Marks, the Government to their great credit have listened to concerns set out so clearly in Committee by colleagues across the House in the debate on the amendment tabled by the noble Baroness, Lady Jones, and others. The Security Minster Tom Tugendhat has underlined his own strong personal commitment to media freedom. He, my noble friend the Minister and their officials have been extremely helpful and constructive in discussions with colleagues here and with the media industry to try to resolve these issues.

Government amendments tabled for Report to Clause 31 are an improvement on the Bill and I support them. They go some way to ameliorating the difficulties by changing “reasonably possible may” to “is likely to”, which brings helpful clarity. But I believe that, without a very clear signal from the Government that the purpose of their amendments is to ensure that public interest journalism is outside the scope of their Bill, on their own, they do not go far enough.

The reason for this is that lack of clarity in the criminal law is always the enemy of investigative reporting. Uncertainty as to whether something will end up in a lengthy jail sentence for a reporter of editor is anathema to media freedom. Here we have—even with the government amendments—lack of clarity and uncertainty, and a chilling effect from the wording that judges journalists for what they ought to have known.

Relying on the courts to interpret vague legislation is not good enough when it comes to media freedom, because we have all seen where that ends. There must be no ambiguity which would force the prosecuting authorities and courts to have to second guess the intentions of Government or which would allow a future Government not committed to freedom of expression to use the same prosecuting authorities and courts to suppress scrutiny of their actions.

Consider this not unusual scenario. It happens not infrequently that an investigation by a newspaper relating to a matter of national security looks as if it may end up criticising or embarrassing the Government or intelligence services. During the course of such a wholly legitimate investigation in the public interest, the editor of a newspaper receives a call from someone who says, “Publish this and you’ll be assisting a foreign intelligence service”. The editor and reporter have no way of knowing whether that is true or is just an attempt to stop an investigation. In such circumstances, the risk of prosecution because they “ought reasonably” to have known that they were assisting a hostile power will deter them from publication. Simply put, if you do not know what constitutes “conduct” amounting to a criminal offence, you are unlikely to pursue a story touching on national security issues. Even with the government amendments, that still therefore leaves a profound chilling effect.

I understand that the Home Office and the security services need “conduct” to be drawn sufficiently broadly in Clause 3 to protect the public in a wide range of circumstances—something we all want—but that is why, at the same time, it must be made unequivocally clear that genuine journalistic activity is not within the ambit of prosecution.

The purpose of my amendment is therefore to provide clarity and certainty by ensuring that those working on articles or investigations for publication by recognised news publishers—a term already defined by government in both this Bill and the Online Safety Bill—have a defence to rely on if they are threatened with prosecution for conduct that they must necessarily engage in during the course of their work. This simply codifies in the Bill the Government’s stated intention in regard to journalism, and is a straightforward, practical amendment to deal with the problems that have been identified throughout the passage of this legislation.

I have consistently said that I wholeheartedly support this Bill. National security is the primary task of government and one which this House takes incredibly seriously. However, all legislation of this sort is a balance between competing rights and responsibilities. Noble Lords will know that, 80 years ago, President Roosevelt set out his four freedoms. The fourth was freedom from fear, which is what this Bill is all about. We should not be fearful of the terrorist, the bullet or the bomb, or of a cyberattack, and this Bill rightly strengthens the armoury available to the state to deliver that. However, Roosevelt’s first freedom was freedom of expression—the source of all other liberty. He recognised, as so many after him, that a balance needs to be struck. This amendment seeks to do that by ensuring that this vital Bill protects the public interest that springs from investigative reporting at the same time as it protects the security of the public. In doing so, it would send a powerful signal to the rest of the world about the commitment of our Parliament to free speech—a global responsibility that we must take very seriously.

Baroness Jones of Moulsecoomb Portrait Baroness Jones of Moulsecoomb (GP)
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My Lords, it is a pleasure to follow the noble Lord, Lord Black. I read up on him and it says online that he is a passionate defender of press and media freedom, and free speech. I think we might be coming at these things from different directions, but on these things we agree. I declare an interest as the mother of a journalist. I care very deeply about this issue of press freedom; it is a ditch I will die in—which looks likely, perhaps, today.

The Minister said he has heard from the media. I have heard from the media as well, and it has been quite interesting hearing what journalists have to say about this particular Bill. For example, only today, the Sun journalist Mr Harry Cole texted me to highlight stories that he broke that could have criminalised him. That is quite a useful example. One of the stories was, of course, Matt Hancock in his office with his then girlfriend—perhaps not a matter of great state concern, but at the same time it showed a carelessness on behalf on members of the Government for laws that they had brought in.

The government amendments in this group are proof that your Lordships’ House can force the Government to recognise errors in their legislation—of which, of course, there are always a lot. As I said at Second Reading and in Committee, the offences in the Bill are simply too broadly drawn; they risk ensnaring far too many innocent actions, turning them into serious criminal offences. I am glad the Government have now conceded that point, including a recognition that current drafting risks harming journalists alongside numerous other legitimate actors, such as charities and non-governmental organisations.

However, while the Government’s proposed amendments will tighten the offence, they still do not sufficiently protect innocent people from falling foul of these laws. That is why I have tabled Amendment 72, which would protect journalists unless they did something on the orders of a foreign power. This strikes a much better balance. It does not grant a total exemption, which would allow actual spies to claim they were journalists, just as it would not allow the Government to brand actual journalists as spies.

I like Amendment 18. It is not as good as my Amendment 72, but it has slightly more elegance. I strongly support it and hope that the noble Lord will press it to a vote. I do not want to take any glory for him but, if he chooses not to because he trusts the Government’s assurances, I would feel compelled to put his amendment to the vote myself.

I have been in a lot of legal briefings recently on several Bills, and all of them included phrases from the Government like, “Oh, you’ve got to trust us on this”, “Really, we assure you”, and “You can trust us”. Quite honestly, who trusts the Government any more? I bet millions of people do not—I certainly do not. I want something in the Bill that actually protects journalists.

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Much of my political life has been about protecting civil liberties for everyone—even people I do not agree with, and people outside on the street sometimes. Journalism is a key plank of any free society and, if we allow legislation that risks having a chilling effect on journalists doing their jobs and holding the Government to account, we are not doing our job here and the Government are not doing theirs. I strongly promote Amendment 18 and support the Lib Dem amendments. I would love to move my Amendment 72, but it is tougher and your Lordships might find it harder to accept than Amendment 18.
Baroness Stowell of Beeston Portrait Baroness Stowell of Beeston (Con)
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My Lords, I will add a few remarks to what has already been said in the debate. My noble friend Lord Black comprehensively and powerfully set out the case for his amendment, which I support and have added my name to.

I emphasise that, like everyone else, I think, I support the Bill. It may be of interest to noble Lords to know that I signed the Official Secrets Act when I was just 18 years old, on my first day as a junior secretary in the Ministry of Defence. I knew very little about the world that I had entered, but it was impressed upon me from the start that I would be in possession of information that could endanger lives. I learned from an early age about protecting any information that could be weaponised against the UK or our citizens.

I also learned that part of what makes us such a powerful and important nation is our freedoms, especially our free press. I learned that it is critical that we do not do anything that risks journalists not being able legitimately to expose serious failings or wrongdoing by government or public servants, especially when those government failings themselves could threaten the lives and well-being of British citizens.

In Committee, we heard some powerful examples that could be at risk of being exposed in the future, for the reasons that were set out. That is why I believe it is essential that we do not legislate to protect our national security in a way that could stop journalists doing their legitimate job, however inconvenient to Ministers or public servants the results of this sometimes are. Journalists should not be threatened with prison for exposing the truth about ineptitude, incompetence or corruption within government, whoever is in power.

I echo what my noble friend Lord Black and the noble Lord, Lord Marks, said about the commitment of my noble friend the Minister, his ministerial colleagues and officials across Whitehall, who have given time and effort in trying to find a way forward. As the Minister laid out, the Government have come a long way towards addressing the concerns expressed during debates in Committee. Like others, I support all of the amendments that my noble friend tabled on behalf of the Government.

However, as my noble friend Lord Black explained, we need to go a little further and provide greater clarity than the Government’s amendments if we are to avoid a chilling effect on journalism, which could so undermine the public interest. That said, I fear that my noble friend the Minister may be unwilling to accept our amendment. That troubles me, because a Bill on national security and how a new offence could apply to journalism is not one on which I would like to see the House divided.

I can see why the Government might be struggling with the amendment or to come up with something else that provides the clarity that we need. As unthinkable and unlikely as it may be, I suspect that there is a fear within Whitehall that a journalist working for a recognised news publisher could collude with a foreign state seeking to do us harm and use this as a defence to get away with it.

I say to the noble Baroness, Lady Jones, that I want to listen to what my noble friend the Minister says at the end of the debate. It is important that we give him the opportunity to speak very clearly about this. I remind my noble friend that his words at the Dispatch Box are incredibly powerful in legal terms if they are made deliberately with the purpose of ensuring that there is complete clarity and no ambiguity when it comes to the intention of legislation.

If he will not accept this amendment, I want him to be very clear about the explicit limits of this offence. Can he put beyond any doubt that no journalist doing a legitimate job of exposing wrongdoing and failure by the state will be caught by this future Act of Parliament —if that is what it becomes—if they are not working on behalf of a foreign Government or agency? As I said, I want to listen to him, and I urge the noble Baroness, Lady Jones, my noble friend Lord Black and the rest of the House to do the same, because that is what I will do.

Lord Faulks Portrait Lord Faulks (Non-Afl)
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My Lords, I declare my interest as the chairman of the Independent Press Standards Organisation. I have also added my name to Amendment 18. I have very little to add to what has already been said by those who have spoken in the debate. The noble Baroness, Lady Stowell, has given a very good summary of the ruling of Pepper v Hart, although there first has to be ambiguity for the Minister’s words to have particular effect. None the less, I entirely agree with her that we will listen with great interest, as indeed will the media in general, to what the Minister has to say, to see whether he can give the assurance that is genuinely needed.

All I will add to what noble Lords have said already is that public interest journalism is genuinely under threat. It is very expensive to undertake, and editors can easily be deterred by the possibility of a wild goose chase. It would be an additional impediment to their encouraging proper journalism if they felt that one of their journalists or their publication was in some danger of finding themselves contravening the provisions of this very important Bill, which I also support in all respects. That is why this is a very significant group of amendments. As the noble Lord, Lord Black, said, citing Roosevelt, freedom of expression is fundamental. The press and the recognised publishers reflected in this amendment represent a very significant part of that freedom, and I hope that, in the Minister’s response to this group of amendments, we will get the reassurance that is so badly needed.

Lord Purvis of Tweed Portrait Lord Purvis of Tweed (LD)
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My Lords, I have added my name in support of my noble friend’s amendments seeking further clarity on

“the interests of the United Kingdom”.

I remind the House of the very significant penalties that are associated with these offences. Since this is my first opportunity on Report, after speaking in Committee, I thank the Minister and his team for listening, and not just listening but acting, engaging with us on these Benches and bringing forward amendments that we believe will make the Bill fundamentally better. Ministers have been true to their word in acting, and I appreciate that. The way the Minister and his officials have conducted themselves is to be commended, and I put that on the record so that it is perfectly clear.

The area that is outstanding, however, as my noble friend indicated, is that we still retain a concern that simply referring to “interests” and relying purely on the judgment within the 1964 Chandler case is insufficiently wide. As I stated in Committee, I am in a significant minority in not being a lawyer but, from reading the judgment in Chandler, which I remind the House also related to nuclear and defence policy, the only reference the Government have given to highlight what the case law definition would be of

“the interests of the United Kingdom”

is a defence and security interest. That is the only reference to the only case the Government have referred to. Therefore, it is not a significant leap to simply state in the Bill that this legislation is linked to security and defence interests. Without that, as my noble friend indicated, there is a concern that any government policy of the day that is not associated with defence interests, but is nevertheless activity that is directed by a foreign power, could be covered within this. Therefore, we still believe that there is a case for that to be defined.

I hope the Minister will respond to that point and say whether the Government are open to having further clarification of how “interests” are going to be defined, rather than just relying on that individual case. The reason I believe that that will now be necessary is because of one of the welcome concessions by the Government, which is to have an independent reviewer. We will come to government Amendment 85 later, but there will be a reviewer of this part of the legislation. For that reviewer to do their job properly—and we have noted reviewers and former reviewers in the House today—clarity on the Government’s intent regarding these interests will be important for the reviewer to look at the proper functioning of the legislation. I hope there will not be a grey area where there needs to be clarity, as the noble Lord, Lord Faulks, indicated.

My second point is that I welcome the Government seeking to narrow the area of information known to someone who is likely to fall foul of this legislation. Journalism is incredibly important. Unlike the noble Baroness, Lady Jones, I do not have friends at the Telegraph or the Sun to message me—we on these Benches do not often receive friendly messages from those journals—but I defer to her contacts with the Sun. Of course, she raises an important point in the context of what we debated last week in Grand Committee, the situation in Iran. We know that not only, as the noble Lord, Lord Faulks, indicated, is free, fair, impartial and independent journalism under threat around the world, but journalism is under threat in this country. There are countries that are persecuting journalists for operating within this country; therefore, the strongest defences for journalism are important. We believe very strongly that my noble friend’s Amendment 79, on a public interest defence, will provide a very sound defence for journalists carrying out their activities.

I have a question for the noble Lord, Lord Black. My understanding of the way that his Amendment 18 is written is that it would also cover whistleblowers. We have made the case for there to be protection for whistleblowers but, as I read his amendment, the defence is for a person who is not necessarily a journalist, but the intent is that the action will be for

“publication of material by a recognised news publisher”.

As I read it, Amendment 18 is therefore not limited to journalists. There may be unintended consequences that we may consider positive but the Government may not. I do not know whether the noble Lord, Lord Black, will an opportunity to respond, so I ask the Minister whether his interpretation of Amendment 18 is that it could include whistleblowers. The main result may be to protect those who have a public interest defence in operating within all these parts. We will debate this in the next group on Amendment 79. I hope that will be our opportunity to draw the ditch—if not die in it—fight our case and divide the House on ensuring that there is a defence for journalists and a proper public interest defence for those carrying out legitimate activities not to be captured by this Bill.

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Lord Ponsonby of Shulbrede Portrait Lord Ponsonby of Shulbrede (Lab)
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My Lords, I shall be very brief. I thank the Minister for his explanation of the Government’s amendments. We recognise that they have come a long way since Committee. The amendments in this group seek to address the unintended consequences of offences for journalists and NGOs. Concerns have been raised throughout the Bill that the legitimate activities of journalists, such as the possession of leaked information, could lead to their prosecution. The main focus of today’s debate is Amendment 18 from the noble Lord, Lord Black. It aims to give a specific offence, whereas our Amendment 79B calls for an assessment of the impact of this group.

Given the significant concessions made by the Government, I will not divide the House on Amendment 79B and we will abstain on Amendments 18 and 72 if they are moved to a vote. However, I understand the point made by the noble Baroness, Lady Stowell, when she said that she would listen to the Minister, deliberate and see what will be done. I do not know whether the noble Baroness, Lady Jones, will press Amendment 18 to a vote even if the noble Lord, Lord Black, chooses not to. Either way, the Labour Party will abstain on those votes.

Lord Sharpe of Epsom Portrait Lord Sharpe of Epsom (Con)
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My Lords, I thank noble Lords who have spoken in this debate for their very warm words. The strength of opinion highlights how important journalistic freedom is, and the Government take it extremely seriously. Whistleblowing will be dealt with in the next group, so if the noble Lord, Lord Purvis, allows, I will not deal with it in my response.

I am very grateful to my noble friend Lord Black for his amendment and for his general comments in support of this Bill. As I have said, we have listened to concerns raised by the media sector and noble Lords. The Government’s amendments are a direct response to them. I will endeavour to provide the clarity that my noble friend Lady Stowell asked for.

On my noble friend Lord Black’s amendment, the Government cannot accept a defence linked to the definition of a recognised news publisher. Rather than taking activity out of scope, the defence would act as a way for foreign powers, particularly those seeking to cause the UK harm, to avoid prosecution under this clause and engage in harmful espionage activity. If a journalist is deliberately colluding with a foreign intelligence service in relation to their UK-related activities, such as by revealing intelligence capabilities that could be exploited by that intelligence service, it is absolutely right that they should face criminal sanction.

I acknowledge that the amendment seeks to provide a targeted protection for journalists by referencing “a recognised news publisher”. The Government have serious concerns that any individuals working under the cover of journalism in foreign media organisations operating in the UK would be able to abuse this provision. Even if hostile state actors did not currently use journalistic cover to engage in espionage, having a defence such as this would almost certainly encourage them to do so. This defence would apply even if the conduct in question was probably against the public interest. This is simply not acceptable; it would give foreign states a back door to commit espionage. Accordingly, the Government cannot accept this amendment and I ask my noble friend not to move it.

However, I want to reassure the media sector that publication of an article that was critical of the UK Government, and which might incidentally be capable of assisting a foreign intelligence service, would not fall within the scope of this offence; nor would the handling of materials in the course of genuine journalistic activities, nor likely the other offences in this Bill. For an offence to be committed under Clause 3, an individual would need to engage in conduct intending

“to materially assist a foreign intelligence service”,

or know, or should have known given the information they had at the time, that it was likely that such conduct would do so.

The Government may profoundly disagree with the conclusions of some journalists, but we will not hide behind the criminal law to suppress genuine competing views and it is almost inconceivable that genuine journalism will be caught within the threshold for criminal activity. My noble friend raised some specific examples and there are many—for example, those relating Snatch Land Rovers a few years ago—but the Government do not consider that the publication of an article that was critical of the UK Government, and which incidentally might be capable of assisting a foreign intelligence service, would fall within the scope of this offence. I think it is worth repeating that.

Many of the examples that have been provided in various articles are stories which relate to terrorism. No journalist has been prosecuted for an offence under terrorism legislation. Even where examples are relevant to state threats activity, no journalist has been prosecuted for an offence under the Official Secrets Act. This Bill will be no different and the Government do not accept the view that it criminalises the activity described in the media.

The test of material assistance is key. To be “material”, the assistance to the foreign intelligence service must be important, considerable or in a significant way. As with all criminal offences, it is the specific circumstances of the case that will be important and will be a matter for the prosecuting authorities, but we would expect prosecutions to involve those with known links to foreign intelligence services, including evidence of a relationship, tasking or payment. Absent these links, the Government struggle to envisage even the most provocative piece of journalism meeting the threshold for the offence.

The noble Lord, Lord Purvis of Tweed, noted the Statement made last week on Iran International, and many noble Lords will have read it; it highlighted the potentially lethal operations of the Islamic Revolutionary Guard Corps taking place in the UK. Far from criminalising the important work of journalists, this offence is intended to protect Iran International, and others who live and work here, from such direct attacks on our people and values.

I turn to amendments tabled by the noble Lord, Lord Marks, with regards to security or defence interests under Clauses 1, 3, 4, 8, 12 and 14. These amendments seek to narrow the definition of “interests of the UK” to ensure a focus on the protection of national security and defence interests, alongside economic security interests. Similar amendments were tabled in Committee, so I will reiterate the concerns the Government continue to have with these changes, as they remain relevant. Narrowing the interest element to cover only security or defence interests significantly moves away from the “safety or interests of the UK” test that already exists and is understood within current espionage legislation. I am afraid these amendments move away from the status quo by creating a test with an unduly narrow focus on national security. While the noble Lord importantly made specific reference to interests pertaining to the UK in its economic security, these amendments continue to not include other critical UK interests relating to public health or, for example, the preservation of our democracy.

The noble Lord, Lord Marks, referred to the case of Chandler v DPP, as did his colleague the noble Lord, Lord Purvis. “Safety or interests of the UK” has been considered by the courts to mean the objects of state policy, determined by the Crown, on the advice of Ministers. We expect this interpretation to carry forward to the new legislation and there are safeguards in place to prevent the Government using this legislation inappropriately—for example, by deciding that somebody is acting against government policy but where there is no national security impact.

Each offence under this legislation includes a test that must be met in order for the offences to be committed. For example, for a person to commit a Clause 1 offence, they must obtain or disclose information that is protected for a purpose

“that they know, or ought reasonably to know, is prejudicial to the safety or interests of the United Kingdom”

and the activity must be conducted for, on behalf of or with the intention to benefit a foreign power. This limits the type of conduct capable of being caught under this offence, and in particular the foreign power condition ensures that there is a state link. Designing the offence in this way clearly focuses the offence on harmful state threats activity.

I now turn to Amendment 72, tabled by the noble Baroness, Lady Jones of Moulsecoomb, and signed by the noble Lord, Lord Pannick. The most concerning consequence of this amendment is that where a state threats actor, acting under a proxy, has been engaged in harmful activity, which was an offence under the Bill, they would not commit an offence even if it could be shown that they were receiving specific funding in relation to that activity from a foreign power. The House will note the references to “state threats”, “foreign powers” and “national security”. Much as the amorous adventures of Matt Hancock may be of interest, clearly none of those falls in the scope of this offence.

It is no secret that those with hostile intent try to hide their activities through genuine means, and through this amendment there is a real risk that they could operate through proxies in order to make it more difficult to be prosecuted. It is therefore clear to see that narrowing the scope of the foreign power condition will have a damaging impact across the Bill. The Government considers this amendment would create unnecessary loopholes for state actors to exploit.

I would like to remind the House that the Government amended Clause 31(2)(c) in the other place to put it beyond doubt that there needs to be a clear link between the conduct and any assistance or funding from a foreign power for the condition to be met. It is the Government’s view that this puts the focus on the foreign power, ensuring that financial or other assistance from the foreign power is caught only when it is provided to enable the person to carry out the conduct, not when it is just any financial or other assistance.

I would also like to make it clear that Clause 31(2)(d), which concerns activity carried out in collaboration with, or with the agreement of, a foreign power, requires the foreign power to be actively involved in that collaboration or agreement; it does not cover cases where a person’s activities align with state objectives. The Government therefore ask the noble Baroness, Lady Jones, not to press her amendment.

To conclude, as all speakers have noted, the Government have moved a very long way in ensuring that journalistic freedoms are not being unduly encroached in this Bill, so I hope noble Lords will accept our amendments and withdraw or not press theirs.

Lord Black of Brentwood Portrait Lord Black of Brentwood (Con)
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Before my noble friend sits down, I will offer one point of clarification. I will of course respond to the chair when called to do so after the next group, but I want to say that I am very grateful for the assurances he has given about the scope and intent of the Bill with regard to responsible reporting. My noble friend has made clear that Parliament’s intent in passing the Bill is not to interfere with the free press or investigative journalism and, on that basis, I will be withdrawing my amendment.

Amendment 1 agreed.
Amendments 2 and 3 not moved.
Amendment 4
Moved by
4: Clause 1, page 1, line 13, at end insert—
“(1A) Section (Public interest defence) applies to any offence under this section.”Member’s explanatory statement
This amendment, and others in Lord Marks’ name, are connected to Lord Marks’ amendment after Clause 38 (Public interest defence) to apply a public interest defence to the offences under Clauses 1 to 5 of the Bill and to offences under Section 5(6) of the Official Secrets Act 1989.
Lord Marks of Henley-on-Thames Portrait Lord Marks of Henley-on-Thames (LD)
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My Lords, this group concerns the public interest defence which is contained in Amendment 79 in my name, and the names of the noble Lord, Lord Pannick, and the noble and learned Lord, Lord Garnier, to whom I am very grateful for their help, counsel and support. I am not sure that the noble Lord, Lord Pannick, has made it here so far because he is in court, but I expect him shortly, although he may not speak.

Our amendment would introduce a public interest defence to offences under Clauses 1 to 5 of the Bill, together with the amended Official Secrets Act defence, amended by Schedule 17 at paragraph 5. The group also contains associated amendments, together with Amendments 18A and 79A, tabled by the noble Lords, Lord Coaker and Lord Ponsonby.

Although, as discussed in the last group, the Government have made a number of welcome concessions since Committee in tightening up the offences set out in the Bill, there has been no concession on a public interest defence. That is despite the repeated strong calls in the press and elsewhere, from many quarters, for such a defence; and despite the fact that such a defence is available in our Five Eyes partners and that the Law Commission recommended one here in 2000, and so did the Joint Committee on Human Rights. Each expressed the view that the lack of such a defence risked our being in breach of Article 10 of the European Convention on Human Rights.

While the Government may not have moved, we have. Amendment 79 is significantly changed from the amendment I tabled in Committee, in large part to meet the reservations expressed on my amendment in that debate. First, the burden of proof has been changed. The amendment in Committee would have imposed the burden of proof on the prosecution to disprove the offence once it was raised, and to do so to the criminal standard of beyond reasonable doubt. Some noble Lords thought that this imposed on the Crown a burden that would be too difficult to discharge in a security-sensitive context. While I am doubtful that that is the case, I accept the point, and I also accept the difficulties of proving a negative. So our amendment now imposes the burden on the defence to prove its case on the balance of probabilities—the civil standard that is usually applied in these cases.

16:45
Also significantly, the element of subjectivity in our amendment has been replaced by overall objectivity. It would be for the jury to decide not what the defendant reasonably believed—which was our position in Committee —but whether their conduct was in fact carried out in the public interest, having regard to the factors proposed new subsection (3) in our amendment, which is based on the Public Interest Disclosure Act 1998. Those factors have been altered to respond in particular to the point made in Committee by the noble Baroness, Lady Manningham-Buller, that it is important that whistleblowers within the security services and elsewhere go through recognised channels where available, rather than making public disclosure at the outset. That is why proposed new subsection (3)(f) now reads:
“Whether such conduct was in the public interest is determined by having regard to … the availability of any other effective authorised procedures for achieving the purpose of the alleged conduct and whether any such procedures were exercised, and if any such procedures were not exercised, the reasons why they were not so exercised”.
The amendment has also been extended to cover the amended offence under the Official Secrets Act 1989, which is to be significantly broadened by Schedule 17 to the Bill, so that the offence of disclosing information obtained by espionage now extends instead to a breach of any of Clauses 1 to 4 of this Bill, which include obtaining or disclosing protected information, the trade secrets offences, assisting a foreign intelligence service—even a friendly one—and the prohibited places offences.
Since this amendment has been tabled, I have received no criticism at all of its drafting. I have received no criticism at all of the factors we have listed in proposed new subsection (3). Importantly, I have received no criticism of our proposal that this defence should be available to all, not just to investigative journalists or campaigners. That accords with the recommendation of the Law Commission in 2000, which also recommended a universal defence. We believe that is right because, although it is a very important part of a public interest defence that it should protect journalists and investigative reporting—and indeed campaigning and political campaigning—nevertheless, it is important for ordinary citizens, too. Certainly, we maintain the position mentioned by the noble Lord, Lord Black, in the last group that there is a very severe chilling effect for journalists and campaigners of introducing these very serious offences, with very long potential prison sentences—life for Clause 1 offences and 14 years for the other offences in Clauses 1 to 4. That is a matter of real concern.
But this is also about exposing wrongdoing. It is to protect not just whistleblowers who see wrongdoing from within organisations but ordinary members of the public who become aware of it by whatever means. They, too, would be deterred from taking action to expose that wrongdoing if they thought that by so doing they would be criminalised under the Bill without an opportunity to mount a defence.
This amendment covers cases such as that of Clive Ponting, who exposed the truth about the sinking of the “Belgrano” in 1982. I also mention the Matrix Churchill case in 1992 and the cover-up of sanctions-busting, though that is it not on exactly the same ground because that prosecution collapsed when a government Minister, Alan Clark, came up with the truth that the Government had connived repeatedly at the breach of sanctions against the sale of arms to Iran. Nevertheless, the Government had previously given an untruthful account of the breaches of sanctions, and that untruthful account could have been, and ought to have been, exposed well before any prosecution of the directors of Matrix Churchill.
The idea that we can rely legitimately upon juries to give perverse verdicts, such as they gave in the Ponting case, to correct injustice, is a travesty of the rule of law. How can we, in conscience, pass a law that criminalises behaviour without an available public interest defence, then expect judges to direct juries that there is no defence in law, and then rely on those juries, in breach of their oath, to give a true verdict according to the evidence—and that is of course according to the law as directed—to acquit anyway? That is not just unsatisfactory, as it has been described in debates on this Bill; it is entirely unacceptable.
Nor is it any answer that these prosecutions require the Attorney-General’s consent. There are many failed prosecutions that have been authorised by Attorney-Generals. There is a matter of principle that, in our system, a defendant is entitled to a decision by a jury. They should not have to rely on a decision that authorises his or her prosecution. Although I entirely accept that law officers may be expected to make their decisions in an impartial way, their decisions are not the same as decisions made by juries on full consideration of a public interest defence.
We have completely understood the concerns of those who are worried about the safety of intelligence service officers, those concerns having been eloquently expressed in Committee by the noble Baroness, Lady Manningham-Buller. However, I suggest that the deployment of a public interest defence at a trial, many months after the conduct concerned, is unlikely to increase the risks faced by the intelligence services, which we all want to minimise, so completely and significantly as to put us off introducing this defence.
I will say a word or two only about the two Labour amendments. Amendment 18A from the noble Lord, Lord Coaker, calls for a consultation and the publication of a report on that consultation. However, it relates only to the offence under Clause 3(2) of assisting a foreign intelligence service. There is nothing on disclosing information, the extremely broad trade secrets offences or the prohibited places offences. The time now is passed for a limited review. The facts are out there, and it is time to introduce the defence now, at the point when these security offences are being so significantly extended by this Bill, particularly in the change in the definition of foreign power to encompass all Governments that are not our own, except for the Irish Government.
I am told that Labour will not whip to vote in favour of our amendment. If that is right, and if I have not persuaded it to do so, that is a great shame, and represents a departure from the position taken by many distinguished Labour figures in the past. It is a shame that Labour has not stuck with the decision taken in the House of Commons by Kevan Jones MP, who supported a public interest defence in similar terms to those which we now propose. It is not only Labour. I remind the House that Ted Heath was vociferous in his support of a public interest defence to security cases many decades ago.
The proposal from the noble Lord, Lord Ponsonby, for a statutory commissioner for the investigation of complaints by whistleblowers represents a helpful step, but it does nothing to provide a defence to investigative journalists, campaigners or others who expose wrongdoing but do not fall into the categories of whistleblowers who would be assisted by that amendment. We need far more, and we need it in this Bill. I beg to move.
Baroness Manningham-Buller Portrait Baroness Manningham-Buller (CB)
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My Lords, before we get on to the substance of the Bill, perhaps I might just correct something that the noble Lord, Lord Marks, said that I said in Committee. I did not speak for the protection of the lives of intelligence officers, such as I once was. I was speaking of concern for the lives of human sources who give us intelligence at the risk of their lives and those of their families. That was the concern I highlighted. There was no worry about my own safety; I was talking about those sources.

Lord Garnier Portrait Lord Garnier (Con)
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After that intervention, the noble Lord, Lord Marks, had better watch out for his safety.

I begin by thanking the noble Lord, Lord Marks, one of the co-signatories of Amendment 79, for explaining the arguments behind it with such clarity and so dispassionately. I appreciate that he, along with many others, has invested a lot of time and thought in it, and I am somewhat of a latecomer to this particular party.

I have put my name to this amendment, along with those of the noble Lords, Lord Marks and Lord Pannick, not because I think the Government will accept it without question—clearly they will not—but because the question of whether such a defence should be available has long since arrived, and it is certainly possible to say that it is almost too late for us to start debating it now.

The noble Lord, Lord Marks, said that the Labour Party’s stance and its inability to whip its members to support this amendment in the Lobby was a shame. I am afraid that I will be the subject of shamefulness as far as the noble Lord, Lord Marks, is concerned, because I will not push this to a Division, and if others do, I am afraid that I will not join them. However, the reason why I think this debate is important is that, as I said before, it has not been had before, and certainly not in relatively recent memory. That may seem illogical but let me do my best to explain.

I realise that, in matters of national security, no Government, of either of the main parties, and certainly not a coalition Government, will cut and paste an amendment emanating from outside the Government. I can see that the noble Lord, Lord Evans of Weardale, and the noble Baroness, Lady Manningham-Buller, are in their places. I know from my time as a law officer, who had from time to time to consider matters to do with the Official Secrets Act, that the security services, as well as the lawyers who work for them, do not initiate prosecutions under the Act unless there is both a clear public interest in a particular prosecution and sufficient evidence to warrant it. It is my experience and clear recollection that they were all strict adherents to the rule of law in general and the provisions of any relevant statutes in particular, and wanted them applied lawfully and dispassionately in every case. In every case I dealt with I had their support and they had mine in ensuring that things proceeded with propriety and that no shortcuts were taken.

I therefore follow the previous debate on the first group and come to this amendment with a high degree of realism and more than academic or theoretical interest, albeit in a spirit of inquiry, to see where the Government’s thinking is on the matter. Clearly, anything that looks as though it may make the lives of those who want to damage our national interests less difficult, or make prosecutions in the right cases more difficult, must be considered with care, and will, at least initially, be likely to alarm those charged with the day-to-day care of our security. However, I hope that the arguments in favour of this amendment have been heard and that, once they have been digested, the Government will take some time to respond as fully and as openly as they can. My purpose today is to provoke that discussion, not to embarrass the Government. Nor is this group of amendments an opportunity to debate Clause 31 and the foreign power conditions, although Clause 31(3) and (6) clearly need careful attention. As I said at the outset, my intention is to raise the public interest issue firmly in Parliament.

17:00
At the moment, breaches of the Official Secrets Act are, to all intents and purposes, absolute offences, as will be future breaches of the Bill when it is enacted. The defendant’s intention or purpose behind the breach is largely irrelevant, save perhaps as to penalty. Once the defendant’s disclosure of the information has been established under the Official Secrets Act and under the elements relevant to this Bill, it is more or less the end of the question of criminal liability: as often as not, the jury is more or less directed by the trial judge to convict. In most cases, of course, that is how it should be, because traitors disclosing information that undermines national security need to be deterred, or caught and imprisoned. Their activities can lead to the death, or endanger the safety, of our own agents or security and military personnel and HUMINT, as the noble Baroness, Lady Manningham-Buller, clarified a moment ago.
There have not been a great many prosecutions under the Official Secrets Act. When they happen, they are clearly newsworthy. The case of the employee of the British embassy in Berlin is the latest example of the just disposal of a prosecution under the OSA. The proposed public interest defence in our amendment would have been of no help to that defendant. He was paid by the Russians to disclose information which he knew he had no business disclosing. His plea in mitigation that he was an alcoholic depressive cut no ice with the judge. I doubt that any right-minded person would think that his 13-year sentence was a moment too long.
In a very few cases—of which the Berlin embassy case would not be one—the jury’s view of where justice lies makes a nonsense of the law. Some defendants, despite the judge’s clear direction on the law, benefit from what are, in reality, perverse acquittals. The noble Lord, Lord Marks, touched on this. In law, and on the evidence, the defendant is guilty, albeit that the information was disclosed for non-venal reasons. It must be assumed that some juries see the prosecution as unjust, oppressive or unnecessary, or think that the defendant disclosed information that ought to have been in the public domain, or that it demonstrated that the Government were dissembling to the public. Again, I realise the terms of Clause 31, but it seems to me that that is not enough to dispose of these arguments.
As the noble Lord, Lord Marks, mentioned, perhaps the “Belgrano” case is one example of a perverse verdict. It is at least arguable that the defendant in that case did not harm national security by disclosing that the Argentinian warship that was sunk was heading in one direction, when it had been announced that she was heading in another, more threatening one. He might have been able to satisfy the factors set out—
Lord West of Spithead Portrait Lord West of Spithead (Lab)
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Perhaps I might intervene. Ships alter course and go in all sorts of directions. There is a general trend, of course, and the general trend of the “Belgrano” and her group was towards a sudden pincer that would have attacked our force. That was why she was sunk—quite correctly. It was the right decision. In the context of this amendment, I would not want that to be confused.

Lord Garnier Portrait Lord Garnier (Con)
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I would not describe the noble Lord as a young man in a hurry although, had he waited just a second or two, he would have discovered that he and I might be in closer agreement than he might otherwise have imagined. But there we are. Let us ignore for the moment the direction in which the ship was going, understand that it was sunk and understand that Ponting disclosed that it was going in a particular direction when the Government had announced it was going in another. That is the end of that little anecdote. I am grateful to the noble Lord for his intervention. In my view, the short point is that it was an enemy ship that was generally threatening our ships. We were at war with Argentina. Argentinian warships were at risk of being sunk if they came within range of British Armed Forces. I do not have any particular sympathy for the Argentinian ship—albeit of course that it led to the most appalling loss of life for many Argentinian sailors.

However, it is not satisfactory for juries faced with a case where they think that a conviction on the evidence before them is unjust to be forced to bring in a perverse verdict in breach of the judge’s clear direction on the law and how it applied to the facts of the case. I suggest that this amendment is conservative with a small “c” and not a traitor’s “get out of jail free” card. The burden of proof is on the defendant to demonstrate that the disclosure was in the public interest and that the factors set out in proposed new subsection (3) are met. It would not allow for someone to disclose national security information because they thought that their view of the world was more attractive than that of the Government or the security services, or out of greed; nor would it allow for a Snowden or a Wikileaks scenario where vast swathes of information were dumped into the public domain.

If, for example, there was a better way of dealing with the sensitive information—noble Lords should look at proposed new subsection (3)(f)—the defendant would be hard pushed to persuade the jury that public disclosure was in the public interest. In my view, the proposed amendment accepts reality and prevents juries bringing in perverse verdicts in order to achieve informal or dishonest justice. A law that is not respected or is avoided by perversity, perhaps following some intellectually dishonest advocacy, is not worth having. In an era of electronic media, when information gets out pretty much immediately across the world in vast quantities, it may be better to inhibit desperados and attention seekers by getting them to think about what they will need to prove to found their public interest defence.

It seems to me that we can either carry on pretending that perverse verdicts do not happen—and swiftly change the subject when they do—or face up to reality and legislate sensibly for a really very unradical public interest defence that will neither bring down the state nor damage respect for the rule of law.

Lord West of Spithead Portrait Lord West of Spithead (Lab)
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My Lords, although I sympathise with Amendment 79, which seeks to protect those who act genuinely in the public interest, I do not support it, for a number of reasons.

First, although I accept that, in its comprehensive 2020 review relating to the protection of official data, the Law Commission recommended that a public interest defence be introduced, that was in relation only to the Official Secrets Act 1989. Its recommendation did not suggest that such a defence should be incorporated into the rest of the Official Secrets Act regime, which is what in effect this Bill seeks to replace.

Secondly, in any event, the risks of introducing such a defence need to be carefully considered and balanced against the benefits of potential alternative approaches. This includes the creation of an independent commissioner to receive and investigate complaints of serious wrongdoing, which the Law Commission also recommended.

Thirdly, any introduction of a public interest defence needs to form part of a wholesale reform of the Official Secrets Act 1989, which this Bill does not seek to do. As I said at Second Reading, the ISC was disappointed to see that the Government were not reforming that Act. I will not repeat what I said then, other than to say that it is a very significant missed opportunity. That is particularly so because the Government have accepted the need to change the OSA for years, and this Bill represented a clear legislative route to do it.

Lastly, this amendment is very broadly drafted. It would introduce a public interest defence into a range of offences that do not require one, such as the offence of assisting a foreign intelligence service. For those reasons, I cannot support it.

Baroness Jones of Moulsecoomb Portrait Baroness Jones of Moulsecoomb (GP)
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My Lords, I recognise the Government’s argument that these spying offences need to be broad enough to capture the wide range of illicit activities that foreign powers may undertake to harm the UK. However, if that is so, equally broad defences are needed to protect innocent people who may become ensnared in the broad definition of the offences. Amendment 79 in the name of the noble Lord, Lord Marks, is absolutely vital; it must be in the Bill.

I want to respond to the Minister’s comments in our debate on the previous group. I heard his reassurances about journalistic freedom, which I am sure were very sincere, but promises can be broken. Ministers move on. Governments move on. Commitments can be forgotten. I just do not think that, if it is not in the Bill, it can be held to be the law.

Lord Evans of Weardale Portrait Lord Evans of Weardale (CB)
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My Lords, I acknowledge the changes that have been made to Amendment 79 since it was introduced in Committee, but I still do not feel that it would be appropriate and right for us to accept it. The noble Lord, Lord West, has pointed out a number of the reasons why, but I emphasise that we are being invited to introduce a public interest defence for what is, straightforwardly, espionage on behalf of a foreign service. I do not believe that we need to provide a public interest defence when an individual obtains and provides protected information on behalf of a foreign power while recognising that this is prejudicial to the safety of the United Kingdom.

I also recognise that the amendment extends to the Official Secrets Act 1989 but, again in support of the noble Lord, Lord West, I say that, if we are to change that, we must do so in a careful and deliberate fashion and bring forward legislation to do so. The 1989 Act does not deal with espionage on behalf of a foreign intelligence service. It is drawn up for different purposes. Therefore, it is separate from the issues that we are considering regarding the Bill. More broadly, it remains extremely dangerous to encourage or to lead individuals to believe that there is a public interest defence to the disclosure of highly sensitive information. Any one individual is unlikely to be able to make an accurate assessment themselves of whether their declaration and their disclosure is damaging to national security. That must be considered carefully, and it is not something for an individual official, however senior, to take on themselves. Therefore, any legislation and any amendment that might encourage them to do so is misguided.

Also, once a disclosure has been made, it cannot be withdrawn. Even though there may be benefit in prosecuting an individual for having done it, that does not stop the damage that has already been done. Therefore, we must have care not to lead people into believing they will be able to defend themselves having already made a disclosure, because the damage will have occurred.

Finally, on the question of evidencing damage, I recognise that the change in the burden of proof is a significant change to the amendment. Nevertheless, we are then faced with a situation where a person who has been accused of this offence will be trying to argue that they did not cause damage. In so doing, they are likely to adduce more evidence and more contextual material which might itself be damaging. It is not clear that this makes it easier in terms of the evidence or that it makes the prospect of prosecuting people for harmful activity any easier. For these reasons, I do not support this amendment. I hope that the House agrees.

Lord Purvis of Tweed Portrait Lord Purvis of Tweed (LD)
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I have a question on a point of clarification. I understand the point that the noble Lord makes regarding those offences which may be at the direction of a foreign power, as in espionage. However, the Bill contains offences that are not necessarily at the direction of a foreign power. His point would mean that my noble friend’s amendment would offer no public interest defence for those offences in this Bill which are not under the direction of a foreign power—as in, not espionage offences.

Lord Evans of Weardale Portrait Lord Evans of Weardale (CB)
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If I am being invited to comment on whether I would support a different amendment, I say that might well be the case. However, I do not support the amendment that is before us.

Lord Ponsonby of Shulbrede Portrait Lord Ponsonby of Shulbrede (Lab)
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My Lords, throughout the passage of the Bill, concerns have been raised that legitimate acts in the public interest could lead to prosecution under the Bill. The Government have insisted that a public interest defence could legalise instances of espionage or sabotage. The noble Lord, Lord Marks, has said that he will press his amendment to establish a public interest defence. While we in the Labour Party support this in principle, we believe that the amendment is too broad and that it could in effect legalise espionage. We believe that there need to be appropriate safeguards built into any future legislation.

Further to this, we believe that the amendment of the noble Lord, Lord Marks, fails to implement the Law Commission’s recommendations; that was a point made by my noble friend Lord West. I will instead press Amendment 18A, in the name of my noble friend Lord Coaker, to a vote; that is for a consultation on the introduction of a public interest offence, which we believe can establish some mechanism for addressing the concerns of the House. We believe that the amendment is a tighter and more focused approach than the alternative of the noble Lord, Lord Marks. To address wider concerns on whistleblowing, we have also tabled Amendment 79A to establish an independent statutory commissioner, although we will not press it to a vote in due course.

17:15
I think that the position of the Labour Party was perhaps best summed up by the noble Lord, Lord Evans, when he spoke just now. It is clearly not for any individual to be in a position to decide on the wider security aspects of any potential activity; that could have extremely damaging implications, and to claim a public interest defence may be inappropriate. There need to be appropriate safeguards, and there needs to be a more targeted approach. We believe that our Amendment 18A, establishing a mechanism for addressing the concerns expressed by the House, would be the best way forward.
Lord Murray of Blidworth Portrait The Parliamentary Under-Secretary of State, Home Office (Lord Murray of Blidworth) (Con)
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My Lords, this group of amendments covers the introduction of a public interest defence—a PID. This topic has been debated at length throughout the passage of the Bill. As the House will hear, the Government agree with the criticisms of Amendment 79, just elucidated so clearly by the noble Lord, Lord Ponsonby.

I thank all noble Lords for their remarks during this debate, especially the degree of involvement we have had in the development of the Bill generally, as noted by the noble Lord, Lord Purvis, on the last group. However, it is right to say that the amendment does not address the issues that arise, and the Government therefore cannot accept it. As I set out during the debate in Committee, the offences in the Bill target harmful activity from foreign states, not whistleblowing or public interest journalism. Our view, therefore, is that a public interest defence is not only unnecessary but risks significantly undermining the utility of the provisions in the Bill.

The Government’s principal position is that a public interest defence in relation to espionage is not appropriate. While we note the changes made to the amendment, this does not change the Government’s view on the matter. Notably, the risk with a public interest defence is that, at the point that the defence comes into play, the harm will already have been done. Seeking to rebut any form of public interest defence in criminal proceedings risks only compounding the damage. This, of course, is a point already eloquently made by the noble Lord, Lord Evans.

Furthermore, the proposed public interest defence for onward disclosures of information obtained via the espionage offences in the Bill, as has been proposed here, is inherently damaging to the national interest. I also entirely agree in this regard with the noble Lord, Lord Evans. To permit onward disclosures of this information under any circumstances would significantly undermine the weight we are affording to these offences.

The questions posed about the Law Commission’s recommendations relate to the Official Secrets Act 1989 which is not, as we discussed in Committee, the topic of reform in this legislation. We have heard strong views and concerns raised about the 1989 Act in our public consultation, and we need to take time to give proper consideration to those concerns. Therefore, we are not reforming the Official Secrets Act 1989 in this Bill.

It is clear to us that reform is complex and engages a wide range of interests. It is only right that proper due consideration should be given to the concerns that stakeholders have raised in the consultation. Furthermore, we need to prioritise delivery of our wider package of measures to tackle state threats and ensure that our law enforcement and intelligence partners have the tools that they need to keep us safe from those seeking to do us harm. We do not want the complexity of Official Secrets Act 1989 reform to distract from this. To that end, I agree with what the noble Lords, Lord West and Lord Evans, said.

I turn to the points raised in the previous group by the noble Lord, Lord Purvis, in relation to whistleblowers. We say that there are sufficient safeguards for whistle- blowers in the espionage offences. For the offence of obtaining or disclosing protected information, that activity has to be for a purpose prejudicial to the safety or interests of the United Kingdom. If an individual uses appropriate whistleblowing routes, their conduct would not meet this requirement—a point powerfully made by the noble Baroness, Lady Manningham-Buller, when these amendments were being considered in Committee.

For the offence of obtaining or disclosing trade secrets, the activity has to be unauthorised. Using appropriate whistleblowing routes would not meet the requirement for unauthorised activity. Moreover, there is a damage element to the offence in Clause 2(2)(b). For the offence of assisting a foreign intelligence service, the person has to know or reasonably ought to know that their conduct may assist a foreign intelligence service in carrying out UK activities or intend their conduct to do so. This is very different from reporting something to an appropriate regulatory body as a whistleblower.

It is not the case that there is a reliance upon juries in the place of a whistleblowing defence, as the noble Lord, Lord Marks, appeared to contend. The role of a jury, when advised by the judge, is to determine whether the defendant is guilty or not guilty based on the evidence presented during the trial. This takes up many of the points raised by my noble and learned friend Lord Garnier in his speech a moment ago. This is an integral tenet of our justice system and applies in 1989 Act cases. This does not mean that the Official Secrets Act 1989 legislation is deficient. There is, of course, no statutory public interest defence in the 1989 Act, and therefore it is already clear in the law that juries should not acquit a defendant on the basis that they consider that the public interest in making a disclosure outweighs the damage caused by the disclosure. The Government are clear that we do not consider the introduction of a public interest defence in the Official Secrets Act 1989 to be appropriate. It is not the safest or most appropriate way for an individual to raise a concern of wrongdoing and have it rectified. It is already possible to make disclosures of information that are not damaging without breaching the 1989 Act.

However, the Government have heard and understand the concerns that the Bill could inadvertently capture genuine journalistic activity, as we discussed in the previous group. Even if the Government were to accept that these offences risk criminalising such genuine activity, a public interest defence would not be an appropriate way to address this. This sentiment was echoed by the noble Lord, Lord Carlile, during the debate on the public interest defence in Committee, for which I am grateful. Indeed, a public interest defence would create loopholes that hostile actors would use to commit espionage against the United Kingdom.

As the noble Lord, Lord Evans, was quite correct in saying, the difficulty for whistleblowers is that they have an imperfect picture of the available information. It is not for the whistleblower to determine the extent of potential damage caused by the disclosure in the public interest.

The question of damage was raised in the debate. It was suggested that a damage requirement should be added to these offences. The Government’s position is that this would significantly undermine their utility. The type of activity described in the offences is inherently damaging. For example, in Clause 1, if an individual discloses protected information to a foreign power or otherwise on their behalf or for their benefit with a purpose

“prejudicial to the safety or interests of the United Kingdom”,

this is inherently damaging. Including a damage requirement would mean that we may need to prove the damage caused by disclosure in court. This, of course, would risk compounding that damage further. If we could not prove that damage in court, for example, because the risk of compounding the damage was too great, a person could freely provide protected information to a foreign power with the intention to prejudice the United Kingdom.

I already noted the potential risks and loopholes that could be created and exploited. This is not a defence in relation to Clause 3(2). The Government have extensively considered the arguments for and against a public interest defence but have concluded that the risk this could cause to the United Kingdom and the fact that this would undermine the purposes of the Bill mean that such a defence is not appropriate. Therefore, there is no need for an assessment and formal consultation on the inclusion of such a defence as tabled by the noble Lord, Lord Coaker, at Amendment 18A and the Government do not accept that amendment. As the noble Lord, Lord Purvis, noted, there have been significant changes to the oversight provisions in the Bill. It is correct that this amendment should be viewed in light of those changes in position by the Government.

Instead, we say that the focus should be on ensuring that the drafting of the requirements and offences in the Bill is sufficiently tightly drawn to ensure that genuine activity, including by journalists, is not in scope. This is why the Government have responded by tabling amendments to the provisions in Part 1, as stated a moment ago by my noble friend Lord Sharpe. This includes clarifying the phrase “ought reasonably to know” and the amendments to Clause 3. For these reasons, the Government cannot accept the tabled amendments.

I move now to Amendment 79A, which proposes the establishment of a new office for the national security whistleblower. I am grateful for the indication from the noble Lord, Lord Ponsonby, that he will not be pushing the matter to a vote but let me outline the government position in relation to that. This proposal differs from that debated in Committee in this House. The Government’s view remains that such a role is not required in relation to these offences. As I set out in Committee,

“The Government are committed to ensuring that our whistle- blowing framework is robust, and I confirm that the business department intends to carry out the promised review of the existing framework, and that further details will be set out in due course in relation to that.”—[Official Report, 18/1/23; col. 1913.]


We have just debated how the Bill targets hostile activities for and on behalf of foreign powers. I have been explicit that this legislation is not targeting the genuine work of journalists. By extension, it is therefore clear that the Bill does not target genuine whistleblowing. Consequently, a whistleblowing office in relation to this Bill misunderstands the aims of the legislation. Again, I refer the House to the Committee stage, when I and the noble Baroness, Lady Manningham-Buller, set out the options available where an individual has a genuine need to raise a concern and I shall not repeat those here. The Government are committed to ensuring that these channels are safe, effective and accessible. For these reasons, we cannot accept the tabled amendments. I am grateful to all noble Lords for their contributions.

17:30
Lord Marks of Henley-on-Thames Portrait Lord Marks of Henley-on-Thames (LD)
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My Lords, I am very grateful to the Minister for his response to these amendments, but it has disclosed a very sharp distinction between those of us who believe that a public interest defence can do no harm and a great deal of good, and those who do not. We regard as a complete mischaracterisation of the public interest offence the suggestion that it is likely to encourage or enable espionage or other disclosures that would be damaging to the national interest. By way of contrast, we see the presence in this Bill of a proposed series of absolute offences—as discussed by the noble and learned Lord, Lord Garnier—where there is no defence for journalists, no defence for campaigners acting innocently, no let-out for whistleblowers and no protection for members of the public. We are concerned by a system that relies on perverse acquittals rather than acquittals according to law. Therefore, I beg to test the opinion of the House.

17:31

Division 1

Ayes: 79

Noes: 226

17:42
Amendments 5 and 6 not moved.
Clause 2: Obtaining or disclosing trade secrets
Amendment 7
Moved by
7: Clause 2, page 2, line 17, after “or” insert “having regard to other matters known to them”
Member's explanatory statement
This amendment clarifies the meaning of “ought reasonably to know”.
Amendment 7 agreed.
Amendment 8 not moved.
Clause 3: Assisting a foreign intelligence service
Amendments 9 to 11
Moved by
9: Clause 3, page 3, line 25, leave out “it is reasonably possible may” and insert “is likely to”
Member's explanatory statement
This amendment changes the test for when a person commits an offence under Clause 3(2).
10: Clause 3, page 3, line 27, after “or” insert “having regard to other matters known to them”
Member's explanatory statement
This amendment clarifies the meaning of “ought reasonably to know”.
11: Clause 3, page 3, line 27, leave out “it is reasonably possible their conduct may” and insert “their conduct is likely to”
Member's explanatory statement
This amendment changes the test for when a person commits an offence under Clause 3.
Amendments 9 to 11 agreed.
Amendment 12 not moved.
Amendment 13
Moved by
13: Clause 3, page 3, line 30, after “may” insert “be likely to”
Member's explanatory statement
This amendment is consequential on Lord Sharpe’s amendments to Clause 3, page 3, line 25 and his second amendment to Clause 3, page 3, line 27.
Amendment 13 agreed.
Amendments 14 and 15 not moved.
Amendments 16 and 17
Moved by
16: Clause 3, page 4, line 13, at end insert—
“(ba) as a lawyer carrying on a legal activity, or”Member's explanatory statement
This amendment creates a defence to the offence in Clause 3 for lawyers carrying on legal activities.
17: Clause 3, page 4, line 14, after “with” insert “, or in relation to UK-related activities carried out in accordance with,”
Member's explanatory statement
This amendment clarifies that the defence in subsection (7)(c) applies where a person assists a foreign intelligence service carrying out UK-related activities in accordance with an agreement with the UK.
Amendments 16 and 17 agreed.
Amendment 18
Moved by
18: Clause 3, page 4, line 21, at end insert—
“(8A) In proceedings for an offence under subsection (2) it is a defence to show that the person engaged in the conduct in question was acting with a view to publication of material by a recognised news publisher as defined in Schedule 15.”
Baroness Jones of Moulsecoomb Portrait Baroness Jones of Moulsecoomb (GP)
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My Lords, I would like to test the opinion of the House.

17:44

Division 2

Ayes: 82

Noes: 212

17:57
Amendment 18A
Moved by
18A: Clause 3, page 4, line 24, at end insert—
“(9A) Within six months of this Act being passed, the Secretary of State must consult, and publish a report of that consultation, on proposals for a public interest defence in relation to an offence under subsection (2).”Member's explanatory statement
This amendment requires the government to formally consult on the introduction of a public interest defence for offences committed under Clause 3(2).
Lord Ponsonby of Shulbrede Portrait Lord Ponsonby of Shulbrede (Lab)
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My Lords, I wish to test the opinion of the House.

17:57

Division 3

Ayes: 155

Noes: 209

18:08
Amendment 19
Moved by
19: Clause 3, page 4, line 33, at end insert—
““lawyer” has the meaning given by paragraph 5(3) of Schedule 15;“legal activity” has the meaning given by paragraph 5(4) of Schedule 15;”Member’s explanatory statement
This amendment defines terms used in Lord Sharpe’s amendment to Clause 3, page 4, line 13.
Amendment 19 agreed.
Clause 4: Entering etc a prohibited place for a purpose prejudicial to the UK
Amendment 20
Moved by
20: Clause 4, page 5, line 4, after “or” insert “having regard to other matters known to them”
Member’s explanatory statement
This amendment clarifies the meaning of “ought reasonably to know”.
Amendment 20 agreed.
Amendments 21 to 23 not moved.
Clause 5: Unauthorised entry etc to a prohibited place
Amendment 24
Moved by
24: Clause 5, page 5, line 29, after “or” insert “having regard to other matters known to them”
Member’s explanatory statement
This amendment clarifies the meaning of “ought reasonably to know”.
Amendment 24 agreed.
Amendment 25 not moved.
Clause 7: Meaning of “prohibited place”
Amendment 26
Moved by
26: Clause 7, page 6, line 39, leave out “or the Sovereign Base Areas of Akrotiri and Dhekelia”
Member’s explanatory statement
Clause 97 (amended by the Government) adequately reflects the context and importance of Sovereign Base Areas to UK national security and defence, and allows for Orders in Council, with appropriate modifications, to extend Part 1 to the Cyprus SBAs. This is consistent with other UK legislation to date.
Lord Carlile of Berriew Portrait Lord Carlile of Berriew (CB)
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My Lords, we move from the rather contentious issues of the last two groups to a little bit of sunshine, for this group is all about Cyprus. It is slightly technical, but the point of principle is easily stated, so I will deal with the technicalities first—but not before I have stated that I am very fortunate to have as companions on this amendment my noble friend Lord Anderson of Ipswich and the noble Lord, Lord Wallace of Saltaire.

Clause 97 of the Bill has been helpfully amended by the Government. It deals with the extent of applicability of the provisions of the Bill outside the United Kingdom. Subsection (2) states:

“His Majesty may by Order in Council provide for any provision of this Act other than section 22 to extend (with or without modifications) to the Sovereign Base Areas of Akrotiri and Dhekelia”.


That seems pretty straightforward, so it would appear from that that there is a proper procedure—an Order in Council which could be modified and which would bring into the Bill those sovereign base areas of Akrotiri and Dhekelia. On the other hand, if one turns to Clause 7, which is headed “Meaning of “prohibited place””, the definition of a “prohibited place” means Crown land in the United Kingdom, or the sovereign base areas of Akrotiri and Dhekelia, which are used for UK defence and other purposes. It seems to me, and to those of us who have put our names to this amendment, to be nothing more than a mistake.

Originally Akrotiri and Dhekelia, the sovereign base areas, were included in the Bill; the Government very sensibly changed their mind by amending the original Clause 97, but they failed to remove the part of Clause 7 that includes Akrotiri and Dhekelia. As the signatories of these amendments, we simply wish to apply some consistency to the Bill and remove those sovereign base areas, understanding, of course, that there is every potential in appropriate circumstances—and I can imagine circumstances which could be appropriate— for the extent of the Bill, apart from Clause 22, to be extended to those sovereign base areas.

I should say to your Lordships that this is not a declaration of an interest—it is the opposite, because I made the coffee myself. I had the pleasure of a visit from Andreas Kakouris, the High Commissioner of Cyprus—a very able, interesting and delightful person, and a very modest and diffident person on these issues, along with a very senior and able member of his staff. I know that other Members of your Lordships’ House have been approached by the High Commission, and so have the Government; one of the reasons why the High Commissioner came to see me, and other members of your Lordships’ House and the other place, was that he had the impression that the very simple point he was trying to make had not been fully understood by the Government.

I will remind your Lordships that Cyprus has a very new President, Nikos Christodoulides; he has formed his Government and his Cabinet members are there to see—Members can look them up on the internet if I am boring them. Not a small number of them, I am delighted to say, have legal qualifications obtained in the United Kingdom, and therefore one can safely assume that they are able at least to see both sides of some problems—but they do not see one side of this problem. The new President and his predecessor have already formed significantly close relations with the United Kingdom Government, and at a diplomatic level the High Commissioner emphasised to me the pleasure he had gained from the quality of the relations that he, his previous Government and his new Government had been able to make with the United Kingdom Government—and particularly with the Foreign, Commonwealth and Development Office.

But they are understandably sensitive to the sovereign base areas being put in Clause 7 of this Bill in a way that makes them feel like some outer province of the United Kingdom, which they are not. They are, as all your Lordships will know, in the European Union, they are very west-leaning and they understand the problems that there are. There are problems in relation to economic issues in Cyprus, including the nature of investors and so on, and they are very sensitive to that. But they do not understand why they have to be treated in a way that is insulting not to the Government, because they are people who do not feel insults and just want the right thing to be done, but to the population of Cyprus. Apparently, the Cyprus Government have received significant representations to that effect.

18:15
So I would invite the Minister who replies to this debate to see that this is a very simple point. It would do absolutely no harm to take out the words that we have complained of in the amendments, it would improve relations with Cyprus—already very close—and it would apply something that we always strive for in this House, though not always in another place, which is consistency of wording in the statute. I beg to move.
Lord Anderson of Ipswich Portrait Lord Anderson of Ipswich (CB)
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My Lords, I declare my connection with the Government of Cyprus, as detailed in the register, and, like my noble friend Lord Carlile, I have spoken to the High Commissioner about this. Clause 97, as the noble Lord, Lord Carlile, has said, is a sufficient and constitutionally appropriate way to apply legislation of this Parliament to the SBAs. In light of that power, like my noble friend I have difficulty in understanding why it continues to be thought necessary for Clause 7, by its definition of “prohibited place”, to apply Clauses 4, 5 and 6 to the SBAs directly.

The noble Lord, Lord Carlile, has said nearly everything, so I will make just two points, addressing what I have seen to be arguments that the Government have sought to make in respect of these clauses. Firstly, there is said to be a partial precedent in Section 10 of the Official Secrets Act 1911—well, what may have been appropriate at the height of empire is surely not appropriate now. Secondly, it is said that these clauses are evidently not intended to apply in the SBAs, as may be seen from the fact that the police powers in Clauses 5 and 6 are vested only in UK officers; yet the phrase “prohibited place” in each of those clauses is clearly defined as including the SBAs. The impression given by those clauses is that powers in the military areas, and indeed in adjacent areas lived in and farmed by local people, are vested in British constables.

That impression may not respond to realities on the ground, but it is certainly unfortunate, and I hope the Minister will do what he can to dispel it, hopefully by accepting these amendments.

Lord Wallace of Saltaire Portrait Lord Wallace of Saltaire (LD)
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My Lords, my name is also on these amendments, and I have also spoken with the High Commission; my noble friend Lord Purvis has spoken to both the Minister on the Front Bench and to the noble Lord, Lord Ahmad, in the Foreign Office. If I have an interest to declare, it is that 25 years ago I worked on the Cyprus conflict and discovered a fair amount about the complexities of Cypriot politics—and they are no less complex today than they were then.

I will make a number of domestic comparisons. This is in my experience very much a Home Office Bill; it does not appear to take into account diplomatic niceties or the sensitivities of other states. We have some bitter experience in this country of sensitivities about sovereignty and the attempts by other states to exert legislative authority over this country, in relation to the EU. We are still being told that the European Court of Justice has imperial ambitions, and that we had to regain our sovereignty because it was trying to legislate for us, about our country.

Beyond that, of course, we have US bases in this country. I am very familiar with RAF Menwith Hill, which is close to where I live in Yorkshire, and I know a fair amount about RAF Mildenhall. The Minister will remember that when it appeared that the wife of a US serviceman at RAF Mildenhall was trying to evade British law by claiming diplomatic immunity and then going to the United States, there was a campaign of outrage in the Daily Mail, the Daily Telegraph and others over this incursion into British sovereignty.

I remind the Minister that the agreements between the UK and the United States over US bases in this country are extremely discreet: the details have not been published; they are renewed every 10 years without parliamentary debate; and the two countries negotiate quietly about the conditions under which they operate. They do not involve Congress legislating with reference to these extraterritorial bases in the United Kingdom. Indeed, if Congress were to legislate with reference to RAF Mildenhall, RAF Menwith Hill and other bases, I am sure that the Daily Mail, the Daily Telegraph and others would be outraged on our behalf at this apparent imperial incursion into British sovereignty.

I am conscious that Cypriot domestic opinion has as many elements, from the right to the left, as we have in this country. Of course, it would be a populist, nationalistic, mischievous campaign to provoke a public outrage in Cyprus about this apparent incursion into Cypriot sovereignty, but we in Britain now have some hard-won and bitter experience of how easy it is for populist and mischievous politicians to cause nationalistic outrage.

These references are not necessary. Clause 97 is enough. I hope that the Minister will take advice and consider that the Government should withdraw the references to the sovereign base areas in these other clauses. I repeat: Clause 97 is enough. The good will of the Government of Cyprus, and of the public in Cyprus, is important to this country, and we should not offend them.

Lord Murray of Blidworth Portrait Lord Murray of Blidworth (Con)
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My Lords, this group covers a variety of related topics. The House has heard only about the amendments pertaining to the sovereign base areas, but I will address the other amendments advanced by the Government. The group covers amendments to the meaning of “government department” and changes to Schedule 2 to the Bill, and it deals with the amendments on the sovereign base areas, which I will come to in a second.

I start with a query raised by the noble Lord, Lord Purvis, in Committee. The question at the time was whether the reference to “government department” in the meaning of “Crown interest” in Clause 7 may include the departments of the devolved Administrations. It is the Government’s intention that any reference to “government department” within Part 1 of the Bill, including those falling under “Crown interest”, applies only to government departments of the United Kingdom. This means that we are not seeking to extend the meaning of “government department” to the devolved Administrations. I hope that this goes some way to settling the noble Lord’s concerns.

The Government have also made a number of changes to Schedule 2 to the Bill. In Committee, they made an amendment so that the Bill makes explicit provision that a Schedule 2 production order can be made to a judge without the subject being given notice of the application in advance. Currently, sub-paragraph (d) of condition 5 of the search and seizure powers at paragraphs 9 and 25 of Schedule 2 outlines that this condition may be met if the service of notice of an application for a production order may seriously prejudice an investigation. Without further change, this condition is no longer operationally effective because a warrant for search and seizure would not be granted in instances where the use of a production order more generally, which had been given without notice to a judge, would prejudice an investigation.

This group of amendments therefore closes the gap by bringing condition 5 closer to the equivalent provisions of Schedule 5 to the Terrorism Act 2000, which sets out that the use of a production order would not be appropriate because an investigation may be seriously prejudiced unless a constable can secure immediate access to the material. It is important to stress that it has always been the Government’s position that the use of production orders should be considered in the first instance, resorting to a warrant where such an order is not appropriate to the investigation.

Finally, government Amendment 60 simply makes it clear that Acts of Adjournal made in relation to the production order powers in part 2 of Schedule 2 would be made by the High Court of Justiciary in Scotland. This is already the case within the current drafting, and we seek only to make this clear. Government Amendments 55 and 59 simply add the offences under Schedules 3 and 4—which were added to the Bill in Committee in the Commons—to the list of offences for which the powers of entry, search and seizure in Schedule 2 are not available.

I now turn to the amendments tabled by the noble Lords, Lord Anderson of Ipswich, Lord Carlile of Berriew and Lord Wallace of Saltaire. These amendments seek to remove references to the sovereign base areas from the prohibited places provisions in Clauses 7 and 8 of the Bill. The sovereign base areas are critical for UK defence and include a unique governance structure among the overseas territories given that the administrator, who is also the commander of British Forces Cyprus, has all the executive and legislative authority of the Government of the UK overseas territory.

Lord Wallace of Saltaire Portrait Lord Wallace of Saltaire (LD)
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Is the Minister classifying the sovereign base areas as having the same relationship with Britain as overseas territories? I was not aware that the SBAs were formally overseas territories.

Lord Murray of Blidworth Portrait Lord Murray of Blidworth (Con)
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Clearly, the SBAs are a special structure, as set out in the 1960 treaty. As I say, they have a unique governance structure which I have already described. The unique context of the SBAs is precisely why we are including the option to extend the legislation to the SBAs in their entirety.

The thought behind these amendments is that the power in Clause 97 to extend the legislation to the SBAs is sufficient on its own. I understand the thinking behind this. However, these references are quite distinct and achieve different aims. References to the SBAs in Clauses 7 and 8 ensure that harmful activity taking place in respect of prohibited places will be prosecutable under UK law, in UK courts, only where it constitutes an offence under Clause 4. It is important to stress that the offence under Clause 5 cannot be committed in the SBAs, as this clause does not apply outside the United Kingdom. Similarly, the police powers under Clause 6 are conferred only on constables under UK law, and as such cannot be used in the SBAs. This inclusion of the SBAs maintains the status quo, given provisions of the Official Secrets Act 1911, which already cover prohibited places in the SBAs as part of His Majesty’s dominions.

Clause 97, however, creates a power to extend any provision in Part 1 of the National Security Bill, with or without modification, to the SBAs. Should the power be used, the provisions will then form part of SBA law, and this would allow harmful activity to be prosecuted in SBA courts. Removing references in Clauses 7 and 8 to the SBAs would mean that those sites were no longer protected under UK law. That would reduce the protections currently afforded to them under the Official Secrets Act 1911, which will of course be repealed through this Bill. Furthermore, it is critical that these protections are afforded under UK law given that there is no guarantee that an Order in Council would be made so as to extend this part of the Bill to SBA law, leaving those sites potentially without any legislative protection. To reiterate the point I made in Committee—

Lord Wallace of Saltaire Portrait Lord Wallace of Saltaire (LD)
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My Lords, an Order in Council can be made by His Majesty’s Government. I do not understand when the Minister says that there is no guarantee that such an Order in Council could be made. I hope he is not suggesting that the Government might forget to do so.

18:30
Lord Murray of Blidworth Portrait Lord Murray of Blidworth (Con)
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The point, as the noble Lord will appreciate, is that the Bill should endeavour not to leave any potential vacancies which would potentially deprive the SBAs of applicability to this very important statutory provision. I reiterate the point I made in Committee that the Government consider that any references in the Bill to the sovereign base areas will not in any way undermine the provisions of the 1960 treaty, concerning the establishment of the Republic of Cyprus, between the United Kingdom, Greece, Turkey and Cyprus.

To address the point raised by the noble Lord, Lord Wallace, I can confirm that the Foreign, Commonwealth and Development Office and the SBAs were consulted extensively throughout the Bill’s development and agree on its conclusion. I therefore disagree with the noble Lord that relying solely on Clause 97 would cause no harm.

I hope this explains the need to maintain the references in Clauses 7 and 8 and why the Government cannot accept the tabled amendments.

Lord Anderson of Ipswich Portrait Lord Anderson of Ipswich (CB)
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The Minister has given us an explanation and I accept that the reference to a constable is to a United Kingdom constable, but Clause 6 gives the constable the power to clear people out of prohibited places. Why is it necessary for United Kingdom law to apply? Why is it not enough that this power should exist under the Order in Council applicable to the SBA? Since only the United Kingdom constable is covered in Clause 6, how can it possibly be necessary to define “prohibited place” for the purposes of Clause 6 as including places outside the United Kingdom? I just do not understand it.

Lord Murray of Blidworth Portrait Lord Murray of Blidworth (Con)
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The Government take the view that it is necessary to have the matter protected in UK law in addition to SBA law, and that, I am afraid, is the answer.

Lord Purvis of Tweed Portrait Lord Purvis of Tweed (LD)
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The Minister was careful when he said that the SBAs and the FCDO were consulted by the Home Office on bringing forward this decision. I would assume that one department would consult another in its own Government with regards to a Bill—I think we can take it as read that the Home Office should have consulted the FCDO. The point that the noble Lord, Lord Carlile, made was that there was no consultation with the Government of Cyprus, which is embedded in the principles of the establishment treaty in 1960. That is why there is a problem with it.

With regards to the further point from the noble Lord, Lord Anderson, if it is only a UK constable, and only within UK domestic law, who enforces it within the SBA area? Who enforces it within the adjacent area to the SBAs, given that the measures are much wider than simply activities here in the UK? Who enforces it there?

Lord Murray of Blidworth Portrait Lord Murray of Blidworth (Con)
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As I hope I have already made clear, it is only Clause 4 that applies. Clause 6 does not apply in this context.

Lord Carlile of Berriew Portrait Lord Carlile of Berriew (CB)
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My Lords, I am afraid I am very puzzled as a result of the Minister’s reply.

First, I think he was suggesting that the Government of Cyprus had been fully consulted. If he was suggesting that, all I can say is that that is the opposite of what I was told, and what the noble Lords, Lord Purvis, Lord Wallace and Lord Anderson, and everybody else who has been spoken to has been told. Secondly, why did the Government change Clause 97? Clause 97 provides for the powers earlier in the Bill to be operated within the SBA following an Order in Council. Are the Government saying that the justice provisions in the SBA are inadequate in some way? I can tell your Lordships that those of us who live around the legal profession know an awful lot of people who go and do cases and even sit as judges in those places, and that is not what they have found on the whole.

I would suggest that the Minister’s reply was insensitive—if I can be forgiven for using that word—and injudicious, and I invite the Government to consider it between now and the coming into law of this Bill. I am not going to press this to a Division tonight; I am not going to ask for the opinion of the House. But I feel a strong sense of dissatisfaction at the explanation, such as it is, that has been given. I beg leave to withdraw the amendment.

Amendment 26 withdrawn.
Amendments 27 to 29 not moved.
Amendments 30 and 31
Moved by
30: Clause 7, page 8, line 1, after “a” insert “United Kingdom”
Member's explanatory statement
This amendment clarifies that “Crown interest” includes interests belonging to a government department of the United Kingdom only.
31: Clause 7, page 8, line 2, after “a” insert “United Kingdom”
Member's explanatory statement
This amendment clarifies that “Crown interest” includes interests held in trust for His Majesty for the purposes of a government department of the United Kingdom only.
Amendments 30 and 31 agreed.
Clause 8: Power to designate additional sites as prohibited places
Amendments 32 to 34 not moved.
Clause 11: Powers of police in relation to a cordoned area
Amendments 35 and 36
Moved by
35: Clause 11, page 10, line 21, leave out “prove” and insert “show”
Member's explanatory statement
This amendment reduces the burden of proof on the defendant from a legal burden to an evidential burden.
36: Clause 11, page 10, line 21, at end insert—
“(5A) A person is taken to have shown a matter mentioned in subsection (5) if—(a) sufficient evidence of the matter is adduced to raise an issue with respect to it, and(b) the contrary is not proved beyond reasonable doubt.”Member's explanatory statement
This amendment clarifies how the burden of proof may be satisfied in relation to the defence in subsection (5).
Amendments 35 and 36 agreed.
Clause 12: Sabotage
Amendment 37
Moved by
37: Clause 12, page 10, line 33, after “or” insert “having regard to other matters known to them”
Member's explanatory statement
This amendment clarifies the meaning of “ought reasonably to know”.
Amendment 37 agreed.
Amendments 38 and 39 not moved.
Clause 13: Foreign interference: general
Amendment 40
Moved by
40: Clause 13, page 12, line 11, leave out subsection (8)
Member's explanatory statement
This amendment removes an amendment to the Online Safety Bill which makes an offence under Clause 13 a priority offence.
Lord Sharpe of Epsom Portrait Lord Sharpe of Epsom (Con)
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My Lords, Amendments 40, 41 and 50 relate to the offence of foreign interference.

Amendment 40 makes a procedural and technical tweak to address changes to the timetables of this Bill and the Online Safety Bill. The addition of foreign interference to the list of priority offences in Schedule 7 to the Online Safety Bill is government policy, which has been agreed at every stage of this Bill since its introduction. Designating foreign interference as a priority offence under the Online Safety Bill would disrupt state-backed disinformation targeted at the UK through the duties imposed on platforms by the relevant provisions in the Online Safety Bill.

However, now that the National Security Bill has overtaken the Online Safety Bill in its parliamentary passage, we must address the procedural challenges posed by this change to respective timetables. Government Amendment 40 will remove the reference to the Online Safety Bill from Clause 13(8) of the National Security Bill. The Government will then seek to add the offence of foreign interference to Schedule 7 to the Online Safety Bill via an amendment to that Bill. The effect of this amendment will be exactly the same as the current approach; it is simply the change in timetabling that means this amendment is necessary.

Government Amendment 41 clarifies the scope of the foreign interference effect contained within Clause 14(1)(a) to ensure it is not misinterpreted. Foreign interference includes interference with rights and freedoms that are protected under domestic law, such as freedom of speech. We know that foreign states have sought to intimidate or threaten diaspora communities with punishment to prevent them engaging in lawful protest activities. We want such activity taking place in the UK to be covered by the offence of foreign interference. Government Amendment 41 simply changes the wording in the offence to “in the United Kingdom” as opposed to

“as it has effect under the law of the United Kingdom”.

This will ensure that it is not misinterpreted to have a broader effect than we intend. It does not change our policy or affect the operational utility of the offence.

Amendment 50 is minor and does not introduce new policy. It simply reinforces the Government’s intention behind what is originally meant by “political decisions”.

Some concerns have been raised that references to proceedings in Parliament in both the offence of foreign interference and the foreign influence registration scheme risk creating unhelpful ambiguity about the prohibition on impeaching or questioning proceedings in Parliament contained in Article 9 of the Bill of Rights. The Government’s position is that such references did not and could not displace provisions in the Bill of Rights and were not intended to do so. However, we have amended the provisions to ensure there can be no suggestion of interference with privilege.

To address these concerns, government Amendment 48 removes references to proceedings of the UK Parliament and devolved legislatures from the definition of “political processes”. A key element of foreign interference is the infiltration of our democracy, including the institutions and processes which uphold our democracy. The other amendments we have tabled therefore seek to ensure that the offence still protects against such interference.

Amendment 49 adds to the definition of “political processes” a reference to

“the activities of an informal group consisting of or including members of”

the relevant legislatures of the United Kingdom. The policy intention remains the same—to capture foreign interference in Parliament targeted at the heart of our democracy—but we are achieving it in a slightly different way. I will briefly explain how we will do this.

The majority of what we wish to capture in relation to interference with Parliament will be covered by the effect in Clause 14(1)(b)—the limb relating to public functions—as MPs and other officials within Parliament will be exercising their public functions. It is right that we seek to criminalise activity where, for example, somebody is acting for a foreign power and threatens violence to affect how a person exercises their public functions.

However, with this amendment we ensure that we also capture activity that is part of our democratic processes but which does not have official status within Parliament. We have therefore added reference to informal groups, which will include APPGs, to the definition of “political processes”. Foreign powers seeking to interfere in political processes through those who do not have public functions—for example, an external secretariat—will continue to be caught by the offence.

I turn briefly to government Amendments 42 and 44, which give effect to the new approach I have outlined, with Amendment 44 relating to the “legal processes” limb. They give effect to the new approach such that those interference effects apply otherwise than in the exercise of public functions. Government Amendments 43 and 47 are consequential amendments following from the change in definitions.

Taken as a whole, the amendments do not introduce new policy but simply reinforce the existing policy on the interference from foreign states that this offence is designed to protect against. I therefore ask noble Lords to support the inclusion of these amendments and beg to move.

Lord Carlile of Berriew Portrait Lord Carlile of Berriew (CB)
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My Lords, I will speak to Amendment 51, which stands in my name and those of the noble Lord, Lord Wallace of Saltaire, the noble Baroness, Lady Hayter of Kentish Town, and my noble friend Lord Evans of Weardale.

This is about transparency. When the electors go to an election, obviously they consider the policies that are placed before them. They also consider the personalities that are placed before them, because they are voting for an individual to carry out the important and valuable role of their Member of Parliament. They also should be entitled to enough transparency to judge the ethical matrix in which each political party operates, as represented by the individuals who stand as candidates. This moderate and temperate Amendment 51 is an attempt to improve the knowledge that voters have about the ethical matrix of the political parties that stand behind the candidates they are able to vote for and have to choose from.

We know that there are problems about the ethical matrix of political parties. Sometimes it is not their fault, because outside forces, hostile actors from foreign countries, make interventions into elections—for example, via the internet—in an attempt to slant the vote in one direction or another. However, there is also a serious risk—I accuse no party of impropriety in this respect, at least for the purposes of this contribution to your Lordships’ debate—that foreign actors, foreign powers, may seek to influence an election, for example by making substantial donations to that party’s election fighting fund which enable it to fight the election at an advantage compared with other parties.

I will not go back to my days as a very happy Liberal and then Liberal Democrat MP and talk about the disadvantage we always started from because we had less money than the other parties. However, we were always worried, in those days at least—I am sure it is still the same today—by contributions that might have come from foreign powers and that would give an even greater advantage, concealed from the electorate, to those political parties.

So what this amendment seeks to do is protect us from the likes of Putin’s cronies, who might, one way or another, find their way to dinners, contribution events and even meeting people in this great building. We seek to establish a register. In effect, each political party would have to create a policy statement which meant that they were obliged to disclose at least the outline of contributions made by a foreign power—we are not talking about rich foreigners or wealthy businesspeople but about a foreign power which has a political reason for trying to influence the result of an election, either made directly or through an intermediary.

18:45
By this modest amendment, a UK-registered political party would have to provide the Electoral Commission with an annual statement of risk management that would identify how risks relating to donations from a foreign power, directly or indirectly, had been managed and what measures had been put in place by the party to that effect. I cannot understand why any political party for one moment would want to object to this. I can imagine that every political party would say, “Well, it makes a level playing field and gives our voters the opportunity to understand the background—if there is any ugly background—in British politics that might influence an election”.
So I invite your Lordships—I am minded at the moment to test the opinion of the House on this matter in due course—to consider this with great care and to come up with some pretty good reasons if there are real objections to this and explain what they are based on broad and objective criteria, not on anything that could be suspected of being self-interest.
Baroness Hayter of Kentish Town Portrait Baroness Hayter of Kentish Town (Lab)
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My Lords, one of the reasons for supporting the amendment, to which I have added my name, as the noble Lord, Lord Carlile, said, is the Government’s recent change which allows long-term expats to continue to be on the UK electoral register and therefore to be permitted donors to UK political parties. This means that someone living —for the sake of this argument—for 40 years in, say, Russia, to take the example just given, can be on the electoral roll here. A British subject, living for 40 years in Russia, can now be on the electoral roll here, with no checks or questions asked, and that person can then donate money to a British political party—no names, no pack drill, and importantly, of course, no checks whatever on the source of the money they are able to donate to a British political party.

PPERA—the Political Parties, Elections and Referendums Act, as most of us know—requires parties to check only that the donors are “permissible”; no checks are needed on the source of their funds. They are not even required to carry out enhanced due diligence on donors operating in high-risk countries which are listed in the money laundering and terrorist financing regulations 2022. There are no obligations on political parties to do the due diligence that we would expect of anyone else handling money from any of the countries on that list.

Incidentally, that is very, very different from those of us—well, all of us in this House—who are PEPs under the AML rules. Indeed, at this moment in the Moses Room the financial services Bill is being discussed, which is trying to reduce the extraordinary number of hoops that we and our children all have to go through in our banking activities because of our presence here. However, Russian-based UK citizens, who long ago gave up paying taxes of any sort here, can donate money, without any question as to its provenance, to a UK political party, surely influencing our democracy way beyond some of the other minor activities that this Bill seeks to make transparent—an issue we will return to later.

Amendment 51, tabled by the noble Lord, Lord Carlile, would capture any possibility that the money could come from a foreign power. As the amendment states, it would include donations made through an intermediary. We on this side would certainly like to know the source of donations made from outside the UK to a political party, whether in government or opposition, or to a party with no elected Members.

The noble Lord, Lord Sharpe, has been very helpful on this Bill. To our surprise, in Committee, he claimed that our existing electoral law has

“a stringent regime of controls on political donations to ensure that only those with a legitimate interest in UK elections”—[Official Report, 21/12/22; col. 1166.]

can donate. I question that in respect of someone who has been out of the country for that long, does not use any of our services and does not pay our taxes. Even more, do we check the legitimate interests of those long gone who can put in money from another source?

I trust that the Government have now looked again at what was a rather complacent reply and that they share our interest in revealing full details, including instigating proper checks. I hope that they will therefore accept Amendment 51. As the Minister knows, it has the full support of the Electoral Commission. I hope that he would welcome a duty on political parties to check the true source of donations and assess the risk of accepting money from overseas, particularly from those on the list of the AML regulations. Rather along the lines of “know your customer” which the banks have to do, there should also be a “know your donor”. This should be a culture in all our political parties. It would mean assessing the risk that donors might pose, especially those from overseas countries. There would be an enhanced due diligence on new donors and proper recording of such checks.

I received a letter from the Minister today which I think has not yet been shared with the House. It says that it is in the national interest to have greater openness about the influence on British politics by foreign powers. We agree. Amendment 51 would ensure that all overseas donations were openly made and disclosed.

Lord West of Spithead Portrait Lord West of Spithead (Lab)
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My Lords, I support Amendment 51, which would help increase the transparency and accountability of our political system. The ISC’s Russia report of 2020 recognised that the UK had clearly welcomed Russian money, including in the political sphere.

The Government have previously assured the House that the protections within the electoral financing laws are “sufficient”. However, as other noble Lords suggested in Committee, there are clear differences between the requirement on companies to undertake due diligence when receiving foreign money and that on political parties, which have no such duties. This would help close the gap.

I note that the amendment requires a political party to publish a policy statement within three months of the passing of the Bill. The Secretary of State also has three months to produce the accompanying guidance. It may be advisable for the Secretary of State to publish the guidance before political parties are required to produce their policy statements. I simply raise that as a practical point. It does not affect my support for the amendment.

As regards the government amendments, it is not clear why they seek to exclude parliamentary proceedings from the definition of political processes, thereby moving them outwith the scope of any new foreign interference offence. I appreciate that the Government have said that it is to clarify that the Bill does not intend to interfere with parliamentary privilege, but I do not see that the answer is to remove the concept entirely.

To commit the foreign interference offence, one needs to conduct “prohibited conduct” which has an “interference effect”. “Prohibited conduct” includes a variety of unacceptable behaviours—from a criminal offence to threatening to damage someone’s reputation or causing financial loss. Surely, it is critical to prevent any foreign interference in parliamentary proceedings which involves a person conducting such unacceptable behaviour. Perhaps the Minister could explain how including parliamentary proceedings in the foreign interference offence would undermine parliamentary privilege, given the need for the prohibited conduct of the offence to apply. Even if the amendment is warranted, could the Minister explain why the Government have not replaced it with wording similar to that in Clause 70, as amended. This refers to interference with

“a Member of either House of Parliament, the Northern Ireland Assembly, the Scottish Parliament”

rather than “parliamentary proceedings”, which would ensure that no gap was created.

Lord Wallace of Saltaire Portrait Lord Wallace of Saltaire (LD)
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My Lords, the all-Peers letter which the Minister sent to us on 28 February states clearly and strongly that what we need is in this Bill is

“transparency on which foreign powers are influencing our politics”,

which it states

“is vital to defending our democracy”.

This reasonable amendment fills one of the loopholes left in the Bill. We are all concerned about the integrity of our elections. We are conscious that foreign donations are part of what can undermine that integrity.

The Minister may have had drawn to his attention a letter in yesterday’s Financial Times which points out that the new proposals for a football regulator include among its duties the need to ensure stronger due diligence and checks on the sources of wealth of those who wish to buy or own football clubs. It is anomalous, to say the least, that we should have stronger checks on people who wish to buy British football clubs than on people who wish to give sometimes very large sums of money to British political parties. I remind the Minister that the question of Arron Banks’s very large donation to the Vote Leave campaign is still being litigated in the British courts. We still have no assurance as to the origins of that donation, since he has refused to give one.

I support what the noble Baroness, Lady Hayter, has said, by reminding the Minister that there are now 100,000 British citizens living in the United Arab Emirates—some of whom already donate to British political parties. It would be quite easy for some of those to become intermediaries for the sovereign powers concerned. Other wealthy British expatriates live in Thailand, Singapore or Hong Kong. Their business depends heavily on the Chinese economy and state.

It is entirely desirable, reasonable and appropriate to ensure that British political parties play their part in mitigating the risks of foreign interference in British elections by being required to show that they are conducting careful risk management in accepting donations from overseas. There have been a number of instances in recent years of which we are all aware. Some of them were touched on in the ISC report on Russia. It is clear that such management has not been in place. It ought to be. I hope that the Government will accept this amendment as a means of filling this loophole.

Lord Evans of Weardale Portrait Lord Evans of Weardale (CB)
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My Lords, I declare an interest as the chair of the Committee on Standards in Public Life. In 2021, my committee reviewed the regulation of electoral finance. I have to tell the Minister that “stringent” was not what we concluded as to the rigour of the arrangements in place. We felt that there were a number of loopholes which could quite easily be remedied. We made recommendations to that effect. Regrettably, the Government decided that they did not wish to accept any of those recommendations; therefore, the loopholes are still there.

I have added my name to Amendment 51 because it is a modest step in the right direction. The rules that apply to the financial services industry and, as appears likely, are shortly to apply to the football industry are considerably stronger than those that apply to our elections. A modest step in this direction would not provide a high level of assurance that money from illicit sources of various sorts might not reach the electoral process, but at least it is a step in the right direction.

It is important that we should take that step because we know that the electoral system in this country and in other western democracies has been under attack. It is vital to maintain public confidence in the electoral system; it is still pretty good. The Electoral Commission publishes regular research on attitudes towards the electoral system. At the moment, we are in a reasonably good place, but it is very important for the health of our democracy that we retain that public support. This is a small step in that direction. I have been scratching my head to work out why, as the noble Lord, Lord Carlile, said, any political party would not support this for the integrity of our electoral system. It is not massively bureaucratic or intrusive. I look forward to hearing the Minister’s reply.

19:00
Lord Coaker Portrait Lord Coaker (Lab)
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My Lords, I rise briefly to say that we very much support Amendment 51 in the name of the noble Lord, Lord Carlile; were he to push it to a vote, we would certainly support him in that Division.

I do not want to repeat much of what has been said by my noble friend Lady Hayter and the noble Lords, Lord Carlile, Lord Wallace, Lord Evans and Lord West. However, I think that the noble Lord, Lord Evans, was right to say that, although this is a modest amendment, its consequences are quite serious. There is no doubt that people are concerned about some of the issues that they have read about in the papers around foreign interference in elections and the funding of political parties. One of the things that we often debate in this House is confidence in our democracy and democratic system, including the threats to them and the erosion of that confidence. Sometimes, these may be small steps but they are important ones that can contribute in our trying to do all we can to protect our democracy. People are worried about foreign interference in elections and the integrity of our democratic system.

It is right to point out, as the noble Lord, Lord Evans, did, that, through this Bill, we are requiring significant steps to be taken by businesses, organisations, industry, financial services and all sorts of other bodies to ensure that they conform to certain regulations that protect our national security. It would be right for them to ask, “Why is there one rule for us but another for political parties?” It is quite right that this amendment is supported; I hope that the noble Lord, Lord Carlile, will seek to test the opinion of the House and that his amendment is supported by the majority of Members, because it is an important step in protecting the integrity of our democracy in the way that noble Lords, particularly my noble friend Lady Hayter on the Labour Benches, pointed out.

Having said that, I want to ask one practical question with respect to many of the amendments that the Government have brought forward, which, by and large, we support. I want to deal with Amendment 49, the explanatory statement for which says:

“This amendment adds to the definition of ‘political processes’ the activities of groups such as all party parliamentary groups.”


I understand the bit about all-party groups but the implication there is in “such as”. Are the Government saying that the amendment is relevant to other groups? If so, can the Minister explain that to us?

With that, as I say, I very much support Amendment 51 in the name of the noble Lord, Lord Carlile, because it is very important.

Lord Sharpe of Epsom Portrait Lord Sharpe of Epsom (Con)
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My Lords, I thank all noble Lords who have spoken on this group.

I will start, if I may, by addressing the question from the noble Lord, Lord West, by repeating something that I said in my opening speech; I think it goes some way to answering him. The majority of what we wish to capture in relation to interference with Parliament will be covered by the effect in Clause 14(1)(b)—the limb relating to public functions—as MPs and other officials in Parliament will be exercising their public functions. It is right that we seek to criminalise activity where, for example, somebody is acting for a foreign power and threatens violence to affect how a person exercises their public functions. I hope that answers his question.

In answer to the question from the noble Lord, Lord Coaker, about Amendment 49, let me say that he is completely right. The reference to

“the activities of an informal group”

in this amendment is, as I think noble Lords know, designed to capture interference activities in APPGs by foreign powers. We are seeking to capture interference whether or however any person participates in the activities of these informal groups. We expect that to cover MPs and people external to Parliament and government who participate in the actions of such groups, but we also envisage informal groups to include things such as “friends of” groups. The use of the term “acting in that capacity” ensures that we do not capture things such as parliamentary book clubs but instead focus on those caught, such as the 1922 Committee, although they could also be covered by the public functions limb of the test. I hope that clears this up.

I know that Amendment 51 is a duplicate of a previous amendment, now tabled by the noble Lord, Lord Carlile. The Government do not believe that this amendment is necessary, I am afraid. I was going to quote myself and say again that UK electoral law already sets out a stringent regime of controls, but I am slightly more reluctant to do so after hearing the comments from the noble Lord, Lord Evans. However, we believe that our regime ensures that only those with a genuine interest in UK elections can make political donations and that political donations are transparent.

I will go into more detail on this point, if I may, because I believe that the noble Lord’s ethical matrix is already in existence. It is already an offence to attempt to evade the rules on donations by concealing information, giving false information or knowingly being involved in an arrangement to facilitate the making of an impermissible donation. This provides a safeguard against impermissible donations via the back door. Political parties must already report all donations over a certain value to the Electoral Commission; these are then published online for public scrutiny. Political parties are by law required to undertake reasonable steps to verify whether a donor is permissible and obtain their relevant details for the reporting requirements. Donations that do not meet the permissibility tests or are unidentifiable must be reported and returned to the Electoral Commission, which also produces guidance outlining how the recipient of a donation can undertake these checks.

As I say, UK electoral law already sets out a regime of donation and spending controls to safeguard the integrity of our democratic processes, so only those with a genuine interest in UK electoral events can make political donations; they include UK-registered electors, UK-registered companies, trade unions and other UK-based entities, as well as otherwise eligible donors such as Irish citizens who meet prescribed conditions and can donate to parties in Northern Ireland. Parties and other campaigners are prohibited from accepting donations that are not from a permissible or identifiable donor. The failure to return such a donation either to the donor or, as I just described, to the Electoral Commission within 30 days of receipt is an offence; any such donations must also be reported to the Electoral Commission. The Elections Act 2022 introduced a restriction on ineligible foreign third-party campaigning above a £700 de minimis threshold.

The transparency of electoral funding is obviously a key cornerstone of the UK’s electoral system. All political parties recognise that third-party campaigners and candidates must record their election spending and report it to the Electoral Commission or their local returning officer; that information is publicly available. For transparency, all donations to political parties and campaigners must be recorded and certain donations must be reported to the Electoral Commission; as I said, these include donations from impermissible donors and donations from the same permissible source that amount to over £7,500 in one calendar year. To ensure transparency, donation reports are published online by the commission for public scrutiny.

To register as an overseas elector, a British citizen has to present ID. However, it is a long-standing principle first introduced by the Committee on Standards in Public Life in 1998 that, if you are eligible to vote for a party in an election, you are also eligible to donate to that party. We believe that overseas electors are important participants in our democracy, but it is only right that they should be able to spend in UK elections in the same way as other UK citizens registered on the electoral roll.

I think that this is a reasonably comprehensive set of rules. There may be some debate as to whether it qualifies as a stringent regime but the fact is that donations to political parties from foreign powers, whether they are made directly or through an intermediary, are illegal. Political parties already have a legal duty to check that all donations they are offered are permissible.

In closing, I very much thank noble Lords for engaging so constructively in this debate. I ask the noble Lord, Lord Carlile, not to press his amendment in this group and ask noble Lords to support the Government’s amendments.

Lord Wallace of Saltaire Portrait Lord Wallace of Saltaire (LD)
- Hansard - - - Excerpts

Before the Minister sits down, I just want to check one thing with him. He said that overseas electors will have to present ID. I was involved in the passage of the now Elections Act, which does indeed provide stronger, more limited ways in which correct ID has to be presented by people voting in person in British elections. However, I do not recall extra requirements around the presentation of ID for people who are resident overseas and wish to vote.

Lord Sharpe of Epsom Portrait Lord Sharpe of Epsom (Con)
- Hansard - - - Excerpts

I think that I made it reasonably clear that to register as an elector overseas, you must present ID.

Amendment 40 agreed.
Clause 14: Foreign interference: meaning of “interference effect”
Amendments 41 to 44
Moved by
41: Clause 14, page 12, line 23, leave out “as it has effect under the law of” and insert “in”
Member's explanatory statement
This amendment clarifies the scope of subsection (1)(a).
42: Clause 14, page 12, line 27, after “person” insert “(other than in the exercise of a public function)”
Member's explanatory statement
This amendment restricts Clause 14(1)(d) to participation in political processes otherwise than in the exercise of public functions. The exercise of public functions is caught by Clause 14(1)(b).
43: Clause 14, page 12, line 27, after “in” insert “relevant”
Member's explanatory statement
This amendment reflects the changes to the definition of political processes by Lord Sharpe’s amendments to clause 14, page 12, line 36 and clause 14, page 13, line 1.
44: Clause 14, page 12, line 29, after “person” insert “(other than in the exercise of a public function)”
Member's explanatory statement
This amendment restricts Clause 14(1)(e) to participation in legal proceedings otherwise than in the exercise of public functions. The exercise of public functions is caught by Clause 14(1)(b).
Amendments 41 to 44 agreed.
Amendments 45 and 46 not moved.
Amendments 47 to 50
Moved by
47: Clause 14, page 12, line 34, after “(1)(d)” insert ““relevant”
Member's explanatory statement
This amendment is consequential on Lord Sharpe’s amendment to Clause 14, page 12, line 27.
48: Clause 14, page 12, line 36, leave out paragraph (b)
Member's explanatory statement
This amendment removes from the definition of “political processes” proceedings in the UK Parliament, Scottish Parliament, Northern Ireland Assembly and Senedd Cymru.
49: Clause 14, page 13, line 1, at end insert—
“(e) the activities of an informal group consisting of or including members of—(i) one or both of Houses of Parliament,(ii) the Northern Ireland Assembly,(iii) the Scottish Parliament, or(iv) Senedd Cymru,(acting in that capacity).”Member's explanatory statement
This amendment adds to the definition of “political processes” the activities of groups such as all party parliamentary groups.
50: Clause 14, page 13, line 3, leave out “the government of the United Kingdom” and insert “a Minister of the Crown (within the meaning of the Ministers of the Crown Act 1975), a United Kingdom government department”
Member's explanatory statement
This amendment clarifies that the definition of “political decisions” includes decisions taken by a Minister of the Crown or a government department.
Amendments 47 to 50 agreed.
Amendment 51
Moved by
51: After Clause 16, insert the following new Clause—
“Foreign interference in elections: duties on political parties(1) A UK-registered political party must, within three months of the passing of this Act, publish a policy statement to ensure the identification of donations from a foreign power (whether made directly or through an intermediary), and must keep that policy updated in accordance with guidance issued under subsection (2). (2) Within three months of the passing of this Act the Secretary of State must publish guidance on the provisions of this section.(3) A UK-registered political party must provide the Electoral Commission with an annual statement of risk management that identifies how risks relating to donations from a foreign power (whether made directly or through an intermediary) have been managed, and what measures have been put in place by the party to such effect.(4) In this section, “UK-registered political party” means a political party registered under Part 2 of the Political Parties, Elections and Referendums Act 2000.”
Lord Carlile of Berriew Portrait Lord Carlile of Berriew (CB)
- Hansard - - - Excerpts

My Lords, I am very grateful to all those who have contributed to this debate. It is notable that around the House, apart from the Government Front Bench, everyone has spoken in favour of this amendment and nobody from the Conservative Party chapel, as it were, has spoken against it.

I was particularly taken by the metaphor from the noble Baroness, Lady Hayter, about knowing your donor—KYD. It is analogous with KYC—knowing your client—which, as she said, is universally applied by businesses these days when they receive funding from abroad.

The Minister is trying to be as helpful as he can. However, can I say kindly to him that he has missed the point of this amendment? Amendment 51 seeks to place an overarching responsibility on political parties to say how they will deal with direct or indirect foreign donations if they are offered to them. That makes it much easier for a candidate or a party official to say, “Sorry, we can’t take that because it’s in our statement of principle as to what we do”. Even though this is a relatively modest step, it would enhance the transparency of an honourable political process. We have lost some ground, compared with some other European countries in particular—not just western European countries but some central European countries too—in the transparency that we offer in elections. People are uncomfortable about it and the media are hounding on it.

With that in mind, and despite the blandishments of the Minister, I wish to test the opinion of the House. I beg to move.

19:12

Division 4

Ayes: 209

Noes: 170

19:24
Clause 17: Obtaining etc material benefits from a foreign intelligence service
Amendments 52 to 54
Moved by
52: Clause 17, page 15, line 18, after first “or” insert “having regard to other matters known to them”
Member's explanatory statement
This amendment clarifies the meaning of “ought reasonably to know”.
53: Clause 17, page 15, line 26, after “or” insert “having regard to other matters known to them”
Member's explanatory statement
This amendment clarifies the meaning of “ought reasonably to know”.
54: Clause 17, page 16, line 30, at end insert—
““Crown employment” ;”Member's explanatory statement
This amendment incorporates into Clause 17 a definition of “Crown employment” (by reference to Clause 3).
Amendments 52 to 54 agreed.
Schedule 2: Powers of entry, search and seizure
Amendments 55 to 63
Moved by
55: Schedule 2, page 71, line 15, at end insert—
“(v) Schedule 3 (disclosure orders);(vi) Schedule 4 (customer information orders);”Member's explanatory statement
This amendment adds offences under Schedules 3 and 4 to the list of offences to which the powers in Part 1 of Schedule 2 do not apply.
56: Schedule 2, page 75, leave out line 36 and insert “produce the material”
Member's explanatory statement
This amendment adjusts the test for the grant of a warrant under paragraph 9, to align with paragraph 12 of Schedule 5 to the Terrorism Act 2000.
57: Schedule 2, page 75, line 37, leave out from beginning to “it” in line 38
Member's explanatory statement
This amendment adjusts the test for the grant of a warrant under paragraph 9, to align with paragraph 12 of Schedule 5 to the Terrorism Act 2000.
58: Schedule 2, page 75, line 40, leave out paragraphs (c) and (d) and insert—
“(c) the investigation may be seriously prejudiced unless a constable can secure immediate access to the material.”Member's explanatory statement
This amendment adjusts the test for the grant of a warrant under paragraph 9, to align with paragraph 12 of Schedule 5 to the Terrorism Act 2000.
59: Schedule 2, page 81, line 3, at end insert—
“(v) Schedule 3 (disclosure orders);(vi) Schedule 4 (customer information orders);”Member's explanatory statement
This amendment adds offences under Schedules 3 and 4 to the list of offences to which the powers in Part 2 of Schedule 2 do not apply.
60: Schedule 2, page 83, line 38, leave out “Provision may be made” and insert “Without prejudice to section 305 of the Criminal Procedure (Scotland) Act 1995, provision may be made by the High Court of Justiciary”
Member's explanatory statement
This amendment clarifies that an Act of Adjournal made under paragraph 24(1) of Schedule 2 would be made by the High Court of Justiciary and would be without prejudice to the general power in section 305 of the Criminal Procedure (Scotland) Act 1995.
61: Schedule 2, page 84, leave out line 38 and insert “produce the material”
Member's explanatory statement
This amendment adjusts the test for the grant of a warrant under paragraph 25, to align with paragraph 29 of Schedule 5 to the Terrorism Act 2000.
62: Schedule 2, page 84, line 39, leave out from beginning to “it” in line 40
Member's explanatory statement
This amendment adjusts the test for the grant of a warrant under paragraph 25, to align with paragraph 29 of Schedule 5 to the Terrorism Act 2000.
63: Schedule 2, page 85, line 1, leave out paragraphs (c) and (d) and insert—
“(c) the investigation may be seriously prejudiced unless a constable can secure immediate access to the material.”Member's explanatory statement
This amendment adjusts the test for the grant of a warrant under paragraph 25, to align with paragraph 29 of Schedule 5 to the Terrorism Act 2000.
Amendments 55 to 63 agreed.
Schedule 6: Detention under section 27
Amendment 64
Moved by
64: Schedule 6, page 124, line 5, at end insert “or, in Northern Ireland, Article 53(1) of the Police and Criminal Evidence (Northern Ireland) Order 1989 (S.I. 1989/1341 (N.I.12))”
Member's explanatory statement
This amendment adds a reference to Northern Ireland legislation to a defined term.
Amendment 64 agreed.
Clause 30: Offences under Part 2 of the Serious Crime Act 2007
Amendment 65
Moved by
65: Clause 30, page 22, line 30, at end insert “when carried out in support of and with the authority of the Security Service, the Secret Intelligence Service or GCHQ”
Member's explanatory statement
The purpose of this amendment is to clarify that any immunity from prosecution conferred by this Clause does not extend to the activities of the Armed Forces in general, but only to those activities carried out in support of the Intelligence Agencies.
Lord Beith Portrait Lord Beith (LD)
- Hansard - - - Excerpts

My Lords, the amendment to which I will speak was designed to limit the scope of the immunity which the Bill originally proposed to activities in support of the intelligence services, rather than extend it right across the Armed Forces. However, we now have a change, which I will come to in more detail; we are no longer discussing an immunity, thank goodness, but a statutory defence.

Intelligence gathering is difficult, and in the world of intelligence it is quite difficult to avoid breaking the law sometimes. When you are dealing with a hostile state or terrorist organisation, trying to get information from it which it does not want you to have can be quite complicated. There are ways of dealing with the issue, such as a public interest decision by prosecutors not to press a charge, or the expectation that such a charge would not be pressed. That needed to be backed up by authorisation at the highest political level for action which could be politically embarrassing or worse. No such authorisation should be given to torture, rendition to torture or other serious international crimes.

In the Bill, the Government presented us with a blanket immunity, precluding prosecution and unsupported by any specific ministerial authorisation, with no exclusion of torture or other egregious offences. So I strongly supported the suggestion made by my noble friend Lord Purvis, which has now been adopted by the Government, to strike out Clause 30 and replace it with a statutory defence based on the existing domestic provision. That is government Amendment 66 in this group. It is a lot better than the original Clause 30, but still raises some of the same questions.

First, will there be any change to the system of ministerial authorisation at Secretary of State level for activity which might be covered by this clause? That ministerial authorisation is a very important part of the system and its absence would be very damaging. Clearly a general immunity dispenses entirely with any need for it; I was extremely worried about that consequence. Some of the decisions which have to be taken are quite political in character; if an agency were discovered doing something contrary to the law of another country, as well as to our own, very serious political embarrassment could result. So it is in many ways a political decision, and there should be a process by which it can be made.

Secondly, why are we using the National Security Bill to confer a statutory defence not just on intelligence activity, but on any action which is

“the proper exercise of a function of the armed forces”?

In other words, we are creating a new defence for actions on the battlefield, or in a counter-insurgency operation, in areas in which international law is potentially involved. This has very significant consequences for those who break it.

When I first examined the original clause, it seemed to me that the Government were trying to embrace, within an immunity, those members of the Armed Forces who were engaged in intelligence work alongside the three civilian agencies. This would include military intelligence, both uniformed and civilian personnel—now, of course, I think that more fully recognises that the fourth pillar of UK intelligence operations, the military intelligence itself, is brought within the purview of the Intelligence and Security Committee. But I expected that the Government were trying to cover other Armed Forces personnel deployed to assist the intelligence agencies, which they do in a variety of ways. My Amendment 65 was designed to limit the coverage to those groups. But it appears, from the more explicit drafting of the Government’s new clause, that they intend the statutory defence to apply to any proper exercise of the functions of the Armed Forces. I find it surprising that we should attempt so fundamental a change in the law governing the Armed Forces on a tail-wind from a piece of national security legislation.

19:30
I was also attracted by the amendment proposed by the noble Lord, Lord West, to insert “and proportionate” into this definition. I can think of actions which an intelligence agency or the military in a military situation might consider a proper exercise of their function, but which, on reflection, might be considered so disproportionate that the argument of necessity falls away—we cannot get the information that we need unless we do X, but X has such drastic consequences that we should not attempt to get the information in that way at all. You apply the same principle to a battlefield situation: it is a proper function of the military to try to win the battle or deal with an insurgent, but there may be circumstances in which the proper exercise of the function is not proportionate to what is involved.
I return to the breadth of the Government’s proposed new clause. Will the Minister explain how it interacts with international humanitarian law and the law on war crimes? Are we going to have cases taken in international courts because the clauses seem to remove a domestic remedy? I do not feel that the wider military aspect of the clause has been adequately examined and, in proposing this amendment, I seek a fuller explanation. I beg to move.
Lord West of Spithead Portrait Lord West of Spithead (Lab)
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My Lords, I speak in relation to Clause 30 and the different amendments being proposed, including the government amendment that seeks to insert a new clause to replace Clause 30 and the amendments that I have tabled on behalf of the Intelligence and Security Committee of Parliament, which seek to amend the government amendment.

Our efforts have been on the basis that everybody in both Houses is working to ensure that our men and women in the intelligence agencies, often working in extreme danger to tight timelines, are provided with appropriate protections. This does not mean an exemption from the safeguards in place regarding behaviour. I should say at the outset that, as noble Lords will understand, I will not comment on behalf of the ISC in relation to the applicability of the clause to the Armed Forces, since that falls outside the ISC’s remit. The ISC has focused on scrutiny of the clauses that relate to the intelligence community.

To our mind, the original version of Clause 30 provided a rare exemption from liability for the intelligence community when working abroad and is completely unacceptable. Not surprisingly, it received fierce criticism from across both Houses. Concerns included that there is already a reasonableness defence under Section 50 of the Serious Crime Act 2007 and that the agencies can already seek immunity from liability for activity undertaken abroad under Section 7 of the Intelligence Services Act 1994. The ISC was concerned about the lack of a proportionality requirement, the absence of an oversight mechanism, the breadth of the immunity provided and the potential damage to the reputation of the intelligence community.

In the Commons, the Bill Committee recognised that there might be classified information underpinning the Government’s rationale for the clause that could not be disclosed to it, and the Government therefore committed to provide the ISC with that evidence. The ISC considered that classified evidence, and I outlined the committee’s conclusion at Second Reading. The ISC found that Clause 30 potentially identified a legitimate problem since, despite the existing legislative protection, there might still be a risk of criminal liability for junior members of the intelligence community, even when they acted appropriately, and that this could potentially have an operational impact.

While the ISC therefore sympathised with the aim of the clause, it was firmly of the view that Clause 30, as written, was not appropriate. While the existing mechanism to avoid liability may not be entirely comprehensive, there was simply no justification for incorporating a broad automatic exemption with such limited accountability. At Second Reading, I noted that the ISC had been given an assurance that the Government were developing an alternative approach to meet its concerns.

Before I turn to the ISC’s view on the detail of the amendment that the Government have now tabled, I want to touch on the Home Office’s handling of this matter. Following the constructive session with the intelligence community on Clause 30 ahead of Second Reading in the Lords, where the committee provided a series of recommendations to improve the clause, the ISC’s chair wrote to the Security Minister requesting that the Government provide the ISC with a draft of the amendment in advance of it being formally tabled, with sufficient time for it to scrutinise it and make any further recommendations. This was with the intention of ensuring that the amendment was appropriate to the problem and would therefore not attract the same fierce criticism from this House as the original Clause 30. Our intention was to help. Indeed, we are working, as I have said, on the basis that everyone in both Houses is working to ensure that our men and women, who often work in extreme danger to tight deadlines, are provided with the appropriate protections while incorporating the required safeguards and maintaining a sufficient level of accountability and oversight.

However, the ISC received no response from the Security Minister or any other Home Office official for almost five weeks. The draft amendment was finally received on 21 February, but was then immediately tabled on 22 February, despite the committee being scheduled to discuss it with the intelligence community on 23 February. This left the ISC with no time to consider the amendment. The Government clearly tabled it as a fait accompli, with little regard for appropriate parliamentary engagement. This is in spite of the Government’s commitment in Committee to continuing to work with the experts in this House, and those in other places, to reach a consensus on Clause 30.

At Second Reading, I referred to the catalogue of problems relating more broadly to the handling of this Bill which have seriously undermined effective parliamentary scrutiny. I emphasised then that the Bill, which is about our national security, is too important to be handled in such a chaotic manner, yet the Government seem to continue to ignore these concerns. The Home Office’s failure to engage is disgraceful—and I say this with some sadness, having been a Home Office Minister for some three years.

The ISC is the only organisation which can scrutinise the classified evidence underpinning the rationale for Clause 30 on behalf of Parliament and the public. The Government need to stop treating the ISC and wider Parliament like the enemy. Effective parliamentary scrutiny must be taken seriously by the Government. We should be working together, constructively, to ensure that the Bill is as effective as possible and in the best interests of the country; having talked with the Minister, I think that is now beginning to happen. However, I take this opportunity to put on record that the Home Office’s complete failure to abide by its commitments made in this House to engage with the ISC is in contrast to the efforts of the intelligence community, with whom the ISC has continued to have constructive discussions on Clause 30 and the rest of the Bill.

I turn to the detail of the clause. In the ISC’s view, this amendment is certainly an improvement when compared with previous versions. It has changed the automatic exemption to a more limited defence using similar wording to the defence in Section 13 of the Bribery Act. Rather than an automatic carve-out from liability, this will require the facts of any case to be put forward and considered properly in a court. The amendment also introduces a level of accountability. The head of each intelligence service is required to ensure that their service has in place arrangements designed to ensure that the relevant activities are necessary for the proper exercise of their functions. These arrangements must also be to the Secretary of State’s satisfaction, which introduces a level of ministerial accountability.

Nevertheless, we are not quite there yet. The ISC still has concerns and questions that need to be answered. First, there is a glaring omission of any requirement of proportionality in the new defence. As the amendment is currently drafted, for the agencies to use this defence they need to demonstrate only that their activity was necessary; it is not explicit that their activity needs to be proportionate. There is therefore no need for the nature and likely consequences of any activity to be reasonable. In short, it appears that the intelligence community could avoid liability even where an act was entirely disproportionate or unreasonable.

I note that this defence is based on the intelligence community’s defence to bribery offences in Section 13 of the Bribery Act 2010. However, the bribery offence is rather less serious than those being considered here. This clause provides a defence to assisting or encouraging any offence overseas, however serious. There is therefore a much stronger case for a proportionality requirement to be explicitly set out in this defence.

I have therefore tabled two amendments on behalf of the ISC to subsections (2) and (3) of the proposed new clause inserted by the government amendment explicitly to incorporate a proportionality requirement. The Government may seek to argue that this introduces greater uncertainty or that the criminal law does not generally put proportionality into legislation. However, these are not sufficient reasons for completely omitting a concept of reasonableness from a defence to assisting serious offences overseas. There must be an appropriate level of accountability.

The Government may also argue that this addition is unnecessary as proportionality is already implied in the defence, specifically within the words

“proper exercise of any function”

of an intelligence service. If that is the case, the Minister needs to state this explicitly from the Dispatch Box to ensure that the courts take this into consideration.

While the ISC has sought to amend only the government amendment to address the proportionality question, as that is the most serious, it also has a number of other questions that should be answered. In particular, it is not clear whether this new defence is connected to the internal arrangements that must be established by the head of each intelligence service to ensure that activity undertaken by their service is necessary. Specifically, can an activity which is necessary but does not comply with these internal oversight arrangements be considered as falling within the proper exercise of an intelligence service’s function?

Given that the purpose of requiring these arrangements is to ensure that there is a layer of senior official accountability, it is vital that all activity undertaken by the intelligence community complies with these internal safeguards. Where an act does not comply with these arrangements, it should fall outside the definition of “proper exercise” of the intelligence community’s functions, automatically preventing the intelligence community using this defence. If this is the case, the Minister should say so explicitly from the Dispatch Box.

The third point the Minister might wish to assure the House on is precisely what those arrangements are. They are not defined in the defence and are therefore too vague. For this uncertain wording to be acceptable, the Minister must set out what the arrangements include and what principles are incorporated within them. Do they, for example, incorporate the principles of necessity and proportionality throughout? Do they simply include general internal risk management procedures within the agencies, or do they also incorporate specific policies such as the Principles, which relate to the detention of and the passing of intelligence relating to detainees, for example? Again, the Minister needs to confirm this explicitly from the Dispatch Box.

A further important question is the extent to which this defence has an impact on existing legislative provisions for oversight. In Committee in the Lords, in response to questions from the noble Lord, Lord Carlile, the Minister said that Clause 30 as originally drafted would mean that, in some cases, authorisation by the Secretary of State will no longer be a requirement. I want to pause on the significance of those words. Despite previous assurances that Clause 30 would not have any impact on ministerial accountability or oversight of the intelligence community, the Government admitted in this House that the ministerial authorisation for encouraging or assisting offences overseas, for example Section 7 warrants under the Intelligence Services Act 1994, would sometimes no longer be required. That is astonishing and I am sure that many in this House find it extremely concerning. It shows that the Government were willing fundamentally to undermine existing ministerial accountability and oversight, which is already set out in statute and provides a vital check on the significant powers wielded by our intelligence community.

We do not expect our intelligence community to be acting inappropriately. On the contrary, it shows how justified Parliament’s concerns were in relation to this clause and how important it is to resolve them. It also demonstrates the need for clarity as to exactly how the new defence will have an impact on existing accountability legislative measures before we approve it. I would therefore welcome the Minister’s confirmation that, unlike the previous exemption, this new defence will not lead to fewer ministerial authorisations sought by the intelligence community or less daily oversight from Ministers and/or judicial commissioners of intelligence community activity.

These four issues are those which the ISC is most concerned about. We have also noted that, as drafted, the burden of proof falls on the prosecution rather than the defence, which makes it more favourable to the intelligence community than the defence in Section 13 of the Bribery Act. However, there are many fine legal minds here who I am sure will know a lot about this, and I bow to their experience on that subject.

In conclusion, the government amendments to Clause 30 recognise that the defence is significantly better than the exemption that was previously provided, so we are more pleased with it. It will help to protect the junior members of our intelligence community, who work tirelessly to protect our country. We cannot let the Government’s poor handling of the Bill affect our consideration of the substantive issues. As the clause stands, the ISC has three concerns on which it requires assurances from the Minister today. We have already notified the Home Office as to what they are, so I trust that the noble Lord has come equipped to speak on those three points.

To recap, they are, first, that the proper exercise of a function of an intelligence service already incorporates proportionality; an act could not be within the proper exercise if it is not proportionate. Secondly, what is the meaning of the arrangements that the heads of each intelligence service are expected to establish? What do they consist of and what principles do they incorporate? Third, we require assurance that proper exercise is connected to the internal oversight arrangements that each intelligence service head must ensure exists, so that an act could not be considered within the proper exercise of a function if it does not comply with the oversight arrangements.

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If the Minister can provide sufficient assurance today from the Dispatch Box—I have to say that I have already discussed this with the Minister and he has been very flexible—I will be content that this defence finds the right balance, providing the necessary protection to our intelligence officers while also incorporating the required safeguards and maintaining a sufficient level of accountability and oversight. If that is the case, and that is made clear from the Dispatch Box, I will not press my amendments.
Lord Anderson of Ipswich Portrait Lord Anderson of Ipswich (CB)
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My Lords, I will speak to Amendment 68 on the supplementary sheet in my name and that of the noble Lord, Lord Carlile. The immunity that preceded this Clause 30 may have been doomed from the moment the noble Baroness, Lady Manningham-Buller, began her speech in Committee by saying that

“it seems to me that it is wrong in principle for members of the security and intelligence services to have immunity from the law”.—[Official Report, 11/1/23; col. 1452.]

She was right. That was just one reminder of how fortunate we are in the calibre and integrity of our intelligence chiefs, including those who have found their way into your Lordships’ House.

We now have a further statutory defence which would bite on encouragement or assistance of foreign crimes, which, although unreasonable and thus outside the scope of the existing Section 50 defence, is none the less considered necessary for the proper exercise of a function of an intelligence service or the armed services. A defence is, as has been said, in any view more acceptable than an immunity. But the likely marginal gain of this one seems limited, and its purpose is obscured.

So I ask the Minister in this new context to deal with the issue which, as we have just heard, the ISC did not look at. Why is this defence so broad in its application to the Armed Forces? The Minister indicated in Committee that the immunity was

“confined very much to the intelligence support by the Armed Forces”.—[Official Report, 11/1/23; col. 1458.]

We all know that the Armed Forces sometimes deploy in support of intelligence work overseas by the agencies. We also know that the Intelligence Corps has its own abilities for the gathering and analysis of intelligence. That is captured by my amendment, though perhaps not by that of the noble Lord, Lord Beith.

What justification is there for extending this new defence to activities of the Armed Forces that are not intelligence related? Exceptions to the rule of law should be tightly controlled. Why should service personnel be exempt from the same law that applies to the rest of us outside the special circumstances of intelligence? From the debate in Committee, I understood those were the only circumstances thought relevant. I hope the Minster will be able either to explain this or to accept my amendment to his amendment. In the light of what we have just heard from the noble Lord, Lord West, the Minister also has a great deal of explaining to do in relation to the important points that he raised.

I would like to make two comments on Amendment 67, in the name of the noble Lord, Lord West. I have two reservations about it. Necessary and proportionate is the test, and I would have thought that conduct that is necessary and proportionate is also reasonable, and therefore would benefit in any event from the Section 50 defence. I just wonder how much this really adds.

Secondly—I defer to more experienced criminal lawyers than me, of whom there are at least two in the House—the concept of proportionality could be quite a complicated one to explain to a jury. I am not sure I can think of any other criminal offence in which that concept exists. Proportionality in law, as I recall, is a four-part test, explained by the Supreme Court in the Bank Mellat case. That might rather complicate the route to a verdict. However, those are technical points.

The objections raised by the noble Lord, Lord West, are very serious. It is in the interests of the agencies to co-operate to the very fullest extent with the ISC. It is in the interests of all the rest of us, and I am quite sure it is in the interest of the Home Office as well. It is very distressing to hear that that did not happen in this case. So, in view of the serious points that the noble Lord made, and despite my rather lukewarm feelings about his amendment, I shall listen very carefully to what the Minister has to say in response. I sense that perhaps this is a discussion that will need to continue.

Lord Carlile of Berriew Portrait Lord Carlile of Berriew (CB)
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My Lords, I rise briefly, I hope, to say that, first, I agree with everything that my noble friend just said and will not repeat it. Secondly, I regard Amendment 66 to be a considerable improvement on what we were faced with before we started the Bill. Indeed, it is not a provision that provides immunity, it is evidence-based, it has a strong public interest element, but it is not perfect. One of the complaints I have received—only anecdotally but from authoritative sources—is a lack of understanding, among fairly senior public servants, of why the Secretary of State no longer carries any responsibility for the sort of decisions referred to in Amendment 66. The requirement in its subsection (5) that the Defence Council must ensure that the Armed Forces must have various arrangements in place is welcome as far as it goes, by why are Secretaries of State being eased out of any level of responsibility for decisions of this kind? I am not sure there is total confidence, among the kind of officials I have referred to, in the Defence Council to be as definable a source of responsibility as the Secretary of State.

Lord Purvis of Tweed Portrait Lord Purvis of Tweed (LD)
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My Lords, I understand that our order of business has been changed today. The Government Whip did not consult our Front Bench and, for those of us who had engagements during the dinner-break business, I think it is a discourtesy not to have at least consulted the Front Benches of other parties about changing the order of business.

That said, I welcome the government’s amendments. The noble Lord, Lord Anderson, is absolutely right. The noble Baroness, Lady Manningham-Buller, had indicated her hope that there would be government amendment in this area, and I thank the Minister for listening during Committee and for bringing forward these amendments. In Committee, I went to some lengths to outline what domestic procedures are in this area. The noble Baroness, Lady Manningham-Buller, asked something I thought was rather threatening: if she could have a quiet word with me outside the Chamber during the hour for other business we had then. I am glad to say now that I will accept that and bring the Minister with me, because there may be an element of consensus on a more sensible way of dealing with concerns raised about immunity for, potentially, very serious crimes committed overseas.

I am grateful that the domestic practices will now be considered similar to extraterritorial processes, acknowledging that there have been distinct differences. My questions, to some extent, are linked with those raised by the noble Lord, Lord West, on how this will be operated. In Committee, I highlighted the Government’s Consolidated Guidance to Intelligence Officers and Service Personnel on the Detention and Interviewing of Detainees Overseas, and on the Passing and Receipt of Intelligence Relating to Detainees. I referenced the Ministry of Defence joint doctrine publications, and I highlighted the Security Service guidelines that had been released in a trial, and we now know more about them. There are a number of existing sets of guidance for the Cabinet Office, from the MoD and within the security services themselves on how, as the amendment states,

“arrangements designed to ensure that acts of a member of the service to which a provision of Schedule 4 applies are necessary”.

I would be grateful if the Minister could outline how guidance will be put together that will be for both domestic activities and now those in regard to defence under this part, whether that will be made public, and how it will interact with MoD guidance to address the similar concerns of my noble friend Lord Beith and the noble Lord, Lord West.

We know what MoD joint doctrine says regarding detainees overseas, but we do not know the principles that will apply to these new areas. Therefore, we need clarification on what they will be. I welcome the Government’s move. There needs to be further illustration of how it will be operable, and I hope the Minister will be able to provide that and give an indication of when guidance will be put together and will be published.

Lord Coaker Portrait Lord Coaker (Lab)
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My Lords, this is a really important debate. Government Amendment 66 is a considerable improvement on what we had before, with respect to Clause 30. We have heard from noble Lords about their belief in that and their pleasure that we now see Amendment 66 before us. As my noble friend Lord West—I will come back to him—the noble Lords, Lord Anderson and Lord Carlile, and others have mentioned, there are still questions that the Government need to answer. I very much look forward to the Minister’s response, particularly to my noble friend Lord West, who very effectively laid out the fact that although the ISC welcomes the new clause proposed by Amendment 66, there are still some important questions for the Government. It is extremely important that the Government put their answers on the record, so they are there as testimony of what the Government expect of how the new Clause 30—as it will be—will operate.

The point made by the noble Lord, Lord Anderson, about the inclusion of the Armed Forces in this deserves a proper answer from the Minister. It is good to see the Armed Forces Minister here to have heard the noble Lord.

My noble friend Lord West laid before us how we got here, the relationship between the Home Office and the ISC, and the lack of a speedy response to some of the requests, which have led to some of the difficulties we have seen. If people had attended the committee, spoken to the committee and discussed with the committee —even if some of those discussions may have been difficult—some of these problems would have been resolved. Yet we have debate in the other place, debate here, and now it is only on Report that we get to a position where we seem to be on the verge of achieving what we all want.

I go back to a point I find quite astonishing, referring to the Intelligence and Security Committee’s annual report. My noble friend Lord West pointed to the lack of Home Office response. I lay this before each and every one of you: when do noble Lords think was the last time the Prime Minister went along? Do not answer that—there is no need to shout out. It is quite astonishing to read in the annual report that, despite repeated requests, no Prime Minister has been to the Intelligence and Security Committee since 2014. That is absolutely disgraceful. The committee was set up by this Parliament to oversee intelligence and security matters and to receive intelligence at a level we cannot be briefed on—quite rightly—and, despite repeated requests, the Prime Minister has not gone. How can a Prime Minister not go to the committee set up by Parliament to discuss matters of intelligence? I find it incredible.

A few weeks ago, I asked the noble Lord, Lord Sharpe, why this has not happened. The Government say, “The Prime Minister has been very busy over the last few weeks”, and he has been; he has been not just to Belfast but to numerous other places, including Parliament, to meet various groups. Why has it not been possible to meet the Intelligence and Security Committee? This is incredibly serious.

Lord Beith Portrait Lord Beith (LD)
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I put it to the noble Lord that this is not a formality. The point of the Prime Minister meeting the committee is that it can draw attention to failings or problems that it cannot publicly disclose. The only route by which those failings or problems can be brought to account is by direct contact with the Prime Minister.

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Lord Coaker Portrait Lord Coaker (Lab)
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I could not agree more with the noble Lord, and that is why it is so incredible that no Prime Minister has discussed that with the committee since 2014. I say this in relation to my noble friend Lord West’s points about the failure of discussion and people’s failure to involve the committee at an early stage. Had that been done, we would have avoided much of the debate and controversy over Clause 30 or, now, government Amendment 66. My noble friend Lord West mentioned this on behalf of the committee, and I mentioned and highlighted yet again the failure of the Prime Minister to meet it since 2014, which is simply and utterly unacceptable. Something needs to be done about it, and the Prime Minister needs to hear this—I know that the Minister will take this forward.

This is a really serious matter. I could not believe it when I read it, and I do not believe that many noble Lords here would either, as the noble Lord, Lord Beith, reminded us. According to the report, this was a regular occurrence:

“Since its establishment in 1994, and for 20 years thereafter, the Committee met annually with the Prime Minister to discuss its work”.


But, despite repeated requests for suitable dates, we are yet to receive a response. This is unacceptable, and it is why we get the sort of situation that we had with Clause 30.

Notwithstanding that, I thank the noble Lord the Minister and the Armed Forces Minister for their engagement in bringing forward Amendment 66, which is a considerable improvement on what went before. I note the change from automatic exemption to the reasonableness defence. No doubt the Minister can address the issues and questions that my noble friend Lord West raised on proportionality and other areas. It is important that the point of the noble Lord, Lord Anderson, is also addressed. With that, we welcome Amendment 66, but we also look forward to the reassurances that my noble friend Lord West seeks on behalf of the Intelligence and Security Committee.

Lord Sharpe of Epsom Portrait Lord Sharpe of Epsom (Con)
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My Lords, I thank all noble Lords who spoke in this debate on Clause 30, the Serious Crime Act 2007 amendment. Before getting into the detail, I very much thank the noble Lords, Lord Beith, Lord West, Lord Ponsonby and Lord Purvis, and the noble Baroness, Lady D’Souza, for their amendments tabled in advance of today’s proceedings. I also thank the noble Lords, Lord Anderson and Lord Carlile, who have consistently shared their time and expertise with me and my team, across a range of national security matters.

I also extend my gratitude to the Intelligence and Security Committee, which recently took the time to write to the Home Office on this measure and cast a keen and critical eye, with officials, over the Government’s amendment tabled for today. I carefully noted the comments of the noble Lord, Lord West, as did my right honourable friend the Security Minister, who sat on the steps when he made them. I will obviously make sure that we reflect on that internally. I say to the noble Lord, Lord Coaker, that my noble friend the Leader of the House heard his comments, and I am sure he will reflect them back to the Prime Minister, but I am not responsible for the Prime Minister’s diary, so I cannot go further than that at this point. However, we will return to this subject in group 12, when the ISC MoU will be debated.

The Government’s shift in approach on the SCA amendment reflects our maintained commitment to ensuring that individuals working for UKIC and the Armed Forces are protected when conducting their proper activities in service to this country. The Government’s amendment replaces Clause 30 with a new clause that provides a defence for acts that are offences under Part 2 of the SCA by virtue of the extraterritorial provisions in Schedule 4. This defence would apply to those carrying out the functions of UKIC and the Armed Forces in supporting activities overseas; that is, it will be a defence for a person to show that their act was necessary for the proper exercise of a function of an intelligence service or the Armed Forces. I will shortly go into more detail on the Armed Forces, at the behest of my noble friend from the Ministry of Defence, so please bear with me.

As noble Lords will be aware, the current reasonableness defence in Section 50 of the SCA would cover encouraging or assisting crimes domestically. We believe that it is right that this new defence is limited to where UKIC and the Armed Forces are supporting activity overseas. The territorial applicability of this measure is identical to that of the original clause. This is because the acute issue caused by the SCA offences, and therefore justification for this amendment as presented to the ISC, relates to support to key international partners’ activity overseas.

The defence provides UKIC and the Armed Forces with more reassurance than the current reasonableness defence, in that the defence is based around the proper exercise of the functions of UKIC and the Armed Forces, rather than the more subjective requirement of proving “reasonableness”. We must remember that the tasks we ask these individuals to undertake, and the operational arrangements we have with our international partners, are ever more complex.

We still do not think it is appropriate that a potentially junior member of the agency or Armed Forces should be faced with the legal burden of proving that their activities were reasonable. Instead, the new defence imposes an evidential burden of proof on the individual to raise the defence. Once the defence has been raised, the legal burden would be on the prosecution to disprove it. It must be remembered that this amendment does not change the position for an individual who acts outside of those proper functions; they would remain liable for any wrongful acts. I believe that this strikes the right balance of providing appropriate protection while also having a clear route by which there can be proper legal consideration of any potential wrongdoing.

Noble Lords will now see an explicit responsibility on the heads of agencies and the Defence Council to ensure that their respective organisations have in place arrangements designed to ensure that acts of a member of their service that would otherwise be an offence under the SCA by virtue of Schedule 4 are necessary for the proper exercise of their functions. To be clear, that means that an act could not be considered within the “proper” exercise of a function of an intelligence service if it does not comply with the “arrangements” set by the relevant heads or the Defence Council.

In addition, the Government propose that there is ministerial responsibility for these arrangements; that is, the relevant Secretary of State must consider that the arrangements put in place by the heads of agencies and the Defence Council are satisfactory. Nothing in this proposed defence will change the current compliance and oversight arrangements, such as the Fulford principles and Overseas Security and Justice Assistance guidance, which is monitored by the Investigatory Powers Commissioner’s Office—

Lord Beith Portrait Lord Beith (LD)
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On that point, there is a world of difference between the necessary task of a Minister satisfying himself that adequate arrangements exist within an agency—indeed, such arrangements have existed for years—and the Secretary of State being made aware of a potential action and required to approve of it, or prevent it from happening, once he has considered the major political implications it might have. If the system does not extend to that role in relation to individual actions, it will be severely deficient.

Lord Sharpe of Epsom Portrait Lord Sharpe of Epsom (Con)
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I will turn to ministerial responsibility if the noble Lord will bear with me. In fact, I am going to do it now. The Government propose that there is ministerial responsibility for these arrangements; that is, the relevant Secretary of State must consider that the arrangements put in place by the heads of agencies and the Defence Council are satisfactory. I have already said this, but there is more to say on the subject. Nothing in this proposed defence will change the current compliance and oversight arrangements, such as the Fulford principles and Overseas Security and Justice Assistance guidance, which is monitored by the Investigatory Powers Commissioner’s Office—IPCO—via regular inspections and regular scrutiny by the ISC. I will return to this in a second.

I now turn directly to the amendments tabled by the noble Lords, Lord Beith, Lord Anderson and Lord Carlile, which, in short, seek to do two related things: to restrict the activities covered by the defence for the MoD to those which are related to intelligence activities, and—in the case of the amendment of the noble Lord, Lord Beith—to restrict the defence to apply to the MoD only where it acts for UKIC.

I will now speak on behalf of the MoD and my noble friend Lady Goldie, who has sat through this debate. With reference to the Armed Forces, the amendment will enable more effective co-operation with our international partners. It will address operational challenges and remove the personal risk that trusted and dedicated individuals face for carrying out their proper official duties, whether as serving members of our Armed Forces or as intelligence officers within our UK intelligence community.

The amendment is principally concerned with addressing risks arising within an intelligence-sharing context, a primary activity of UKIC. What is perhaps less understood is the criticality of intelligence activity from an Armed Forces perspective, with intelligence sharing often forming a necessary part of wider co-operation with our allies. I assure noble Lords that the amendment is about clarifying the law and removing liabilities which sit onerously with individuals going about their lawful and legitimate duties.

The UK is committed to the rule of law and we would never collaborate or share information with a foreign partner with the intention of supporting unlawful activity overseas, but the SCA amendment does not change that. All aspects of the activities of our Armed Forces will continue to be bound by the relevant law of England and Wales and of international law. There will be no change to the UK’s international legal obligations, including under the UN Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment and on assisting an unlawful act under Article 16 of the International Law Commission’s Responsibility of States for Internationally Wrongful Acts.

This defence will apply only where activity is necessary for the proper exercise of a function of the Armed Forces, and any individual found to be working outside the proper functions of the Armed Forces will remain liable for those actions. Actions not in compliance with the MoD’s robust internal policies and processes, again such as the Fulford principles and the OSJA Guidance, which are designed to ensure that MoD officers do not knowingly support unlawful activity, would not be in the proper exercise of a function of the Armed Forces.

I turn to the amendment tabled by the noble Lord, Lord Anderson. My noble friend Lady Goldie thanks him for the opportunity to discuss this with him. I understand that, because of a technical omission, he may not move his amendment tonight, but my noble friend Lady Goldie has—

Lord Anderson of Ipswich Portrait Lord Anderson of Ipswich (CB)
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As a point of correction, the omission has been remedied and the amendment is on the supplementary sheet.

Lord Sharpe of Epsom Portrait Lord Sharpe of Epsom (Con)
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My noble friend Lady Goldie has not been able to discuss that with our right honourable friend the Secretary of State for Defence, who is currently abroad, but she undertakes to do that and to engage with him on his return.

I turn to the amendment in the name of the noble Lord, Lord West. I am grateful for his contribution at Second Reading, where he confirmed that the ISC recognised that the government amendment identified a legitimate problem. This proposed amendment seeks to insert proportionality into the defence we are proposing in Clause 30. The objective of proposed new Section 50A is to provide clarity on how an individual working for UKIC or the Armed Forces can defend against a case in which they face personal criminal liability for the SCA offences.

For the reasons outlined previously, the Government consider that the existing reasonableness defence in Section 50 of the SCA does not achieve this, given we would be asking a jury to consider what is reasonable in the complex operational circumstances in which our intelligence agencies and Armed Forces work with our international partners to protect the United Kingdom. The Government consider that inserting a proportionality requirement would have the same effect, in that it reduces the clarity of the defence, which not only does not achieve the objective of providing greater certainty to those who are carrying out vital work to protect us all but complicates a defence which is currently based on the functions of the organisations concerned. On that basis, we think that explicit reference is best left out of the defence, and we therefore cannot accept this amendment.

However, to be clear, considerations of proportionality are a crucial component of operational planning and delivery, and core to many of the legal frameworks with which UKIC and the Armed Forces are required to comply. Any joint working with a partner must be in accordance with domestic and international law, including relevant principles of reasonableness, necessity and proportionality. Where the intelligence services or Armed Forces do not apply proportionality consistently with their legal or policy obligations, that would not be a proper exercise of their functions. To be completely clear, a person’s lack of compliance with their legal and policy obligations could be considered by the prosecution and would impact the availability of the defence —that includes proportionality.

Arrangements in place ensure that UKIC and the Armed Forces apply rigorous safeguards, standards and internal processes for determining that activity is lawful and properly exercised. The arrangements include the following: operational decisions are recorded, taken at appropriate seniority and made with the benefit of advice from specialist legal advisers to ensure compliance with domestic and international law; all personnel receive mandatory training on their legal obligations; policy documents set out specific requirements for different activities, including what authorisations are required and how to decide whether activity is necessary, reasonable and proportionate. Compliance with these requirements ensure that acts are within the proper exercise of the functions of the organisation concerned.

Some of these policies have been published, such as the Fulford principles, where the passing and receipt of intelligence relates to detainees, the compliance of which is assessed by the Investigatory Powers Commissioner’s Office, as I have already noted. Arrangements can also go beyond pure legal considerations, with ethics counsellors in post to discuss the difficult decisions we sometimes take when balancing risk.

To go back to Secretaries of State, they are accountable for the work of the intelligence services and the Armed Forces in Parliament. A central part of their obligations will remain authorising the required operational activity at the appropriate time.

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The noble Lord, Lord Purvis, asked about publishing guidance. The Government have no plans to publish specific arrangements, but relevant published policy documents are already available, such as the Fulford principles and the OSJA Guidance. In addition, UKIC’s activities are scrutinised by the Intelligence and Security Committee, and challenge can be brought to the UK intelligence community or the Armed Forces on their activities—for example, through judicial review, a civil damages claim or a complaint to the Investigatory Powers Tribunal in relation to the use of intrusive powers. We will continue to work with UKIC to consider how we can be forward-leaning in showing appropriate partners how we consider risks internally while protecting operational security.
Lord Purvis of Tweed Portrait Lord Purvis of Tweed (LD)
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The Minister knows that, in Committee, I quoted quite a lot from the OSJA human rights guidance, which I have before me. It also addresses the fundamental point of my noble friend Lord Beith. Both the security service guidelines—which are not published, but about which we know because of judicial processes—which categorise the means by which authorisations have to be secured, and the OSJA Guidance outline the risk assessments that officers must go through. They conclude that, if there is high risk, ministerial approval is necessary. The Government’s amendments do not state categorically that authorisations and ministerial approvals will be necessary for breaches of the SCA offences. Can the Minister confirm that it will be the case that, if there are breaches of the SCA which are forecast through risk assessments and during the processes, ministerial authorisations will have to be provided?

Lord Sharpe of Epsom Portrait Lord Sharpe of Epsom (Con)
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My Lords, I cannot confirm that from the Dispatch Box, but I will write to the noble Lord with the appropriate clarification. I do not actually have a copy of the OSJA Guidance in front of me, but I appreciate the points he is making.

I return to the third concern raised by the noble Lord, Lord West. I can confirm that, where a member of the intelligence services or the Armed Forces conducted activity that did not comply with the arrangements—namely, the rigorous safeguards, standards and internal processes that I described earlier—this breach of the arrangements could be scrutinised by the proper oversight mechanisms; for example, an error would be reported to IPCO for a breach of the Fulford principles. It could be considered by the prosecution and would impact the availability of the defence. I also assure the noble Lord that the introduction of this new defence, in and of itself, will not lead to fewer ministerial authorisations sought by the intelligence services or to less daily oversight from Ministers and/or judicial commissioners over intelligence activity. I know that he asked me for an explicit reassurance on that point.

I conclude by saying that, for the reasons I have outlined, the Government cannot support the amendments tabled by noble Lords against Clause 30, and therefore ask noble Lords not to press their amendments. I also ask the House to support the new SCA defence amendment tabled by the Government.

Lord Anderson of Ipswich Portrait Lord Anderson of Ipswich (CB)
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The Minister has been helpful, but I hope he can be more specific. When does he think the encouragement or assistance of an overseas crime, conduct which is penalised by the Serious Crime Act 2007, might be necessary for the proper exercise of a function of the Armed Forces, other than in the intelligence context? For my part, I am quite prepared to accept that it may be necessary in the intelligence context; what I have not heard from the Minister is any suggestion of any other context in which it might be necessary, yet he asks me to withdraw my amendment, which would limit the application of the defence to the intelligence context. It may be that his answer will be in what I think he said about the noble Baroness, Lady Goldie, needing further time to consult ministerial colleagues, but if I am to withdraw my amendment, and those discussions have not yet taken place, what assurance can he give as to possibly bringing back the issue at Third Reading?

Lord Sharpe of Epsom Portrait Lord Sharpe of Epsom (Con)
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My Lords, I go back to what I said to the noble Lord in previous debates on this subject: the activity is restricted to intelligence activity, and as such I believe that the amendment is eminently sensible. However, we cannot accept this current amendment, but the Government will take a very careful look at this apparent gap and will consider the best way to close it.

Lord Beith Portrait Lord Beith (LD)
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My Lords, that was a very interesting final remark from the Minister. I hope it will prove to have some substance, otherwise we are left with legislation that I do not think can be interpreted in the way the Minister describes it. I am quite puzzled, but he has shown willing, so I hope he pursues it. I express my gratitude, particularly to the Minister for the Armed Forces for the care she has applied to this matter—we had a very detailed discussion with her and her officials—and to the Minister who is answering this debate, particularly for the amendment that gets rid of the awful Clause 30 and gives us something that is certainly a significant improvement in its place.

I still have perhaps three areas of particular anxiety in addition to the definitional point that the noble Lord, Lord Anderson, raised about “in support of intelligence”. One is the very fact that we are changing the law about what happens on a battlefield and what happens in a counterinsurgency, apart from the context of the discussion about the use of our Armed Forces in the non-intelligence world. This does not seem to be a good way to legislate. There would have been people involved in and engaged with the legislation if that is what it had been generally about, if it had been applying to the Armed Forces, but that is a rather unsatisfactory feature and not one that we can change at this stage.

I found what the noble Lord, Lord West, said about what happened between the ISC and the Home Office profoundly worrying. It really was disgraceful. I trust the accuracy of what he said and I am sure it can all be correctly documented, but that really is no way to deal with intelligence. Accountability for intelligence in the democratic context has always been quite difficult. The ISC has been developed over decades to provide a good mechanism to deal with that. When it is treated in that manner, it really is very serious and I hope the Minister has recognised that and is determined to go back to the office and really make a noise about this. It is just not acceptable and should not be acceptable to either House of Parliament.

My final worry, which I think can be resolved without statutory means but certainly remains, is the ambiguity about whether Secretaries of State will authorise significant measures that could fall within the scope of the new clause. In my view, it is an essential part of the system that agencies have the backing of a senior Minister when they engage in particularly difficult tasks, and that senior Ministers know what they are doing and are aware of what is being undertaken. If there is a political or legal risk, then Ministers should be aware of it. It is one thing to have a very good internal system—and I believe the agencies have good internal systems now—but quite another to be sure that, at the highest political level, there is both knowledge and authorisation. Frankly, if I were the head of an agency, which I have never been, my instinct would be to try to set up such a system, because otherwise the agency will always get the blame, even when the Secretary of State should have taken responsibility and might even have come to a different conclusion. I think that, over time, we need to make sure that Secretaries of State are sufficiently closely associated, otherwise they drift apart and agencies live in a world of their own. That is not how it should operate. But that, as I say, could be resolved without further legislation if there is determination to resolve it. On that basis, I beg leave to withdraw the amendment.

Amendment 65 withdrawn.
Amendment 66
Moved by
66: Leave out Clause 30 and insert the following new Clause—Offences under Part 2 of the Serious Crime Act 2007(1)Part 2 of the Serious Crime Act 2007 (encouraging or assisting crime) is amended as follows.(2)After section 50 insert—50AExtra-territorial offences: defence for intelligence services and armed forces(1)This section applies where a person is charged with an offence under this Part by reason of a provision of Schedule 4 (extra-territorial jurisdiction).(2)It is a defence for the person to show that their act was necessary for—(a)the proper exercise of a function of an intelligence service, or(b)the proper exercise of a function of the armed forces.(3)A person is taken to have shown that their act was so necessary if—(a)sufficient evidence of that fact is adduced to raise an issue with respect to it, and(b)the contrary is not proved beyond reasonable doubt.(4)The head of each intelligence service must ensure that the service has in place arrangements designed to ensure that acts of a member of the service to which a provision of Schedule 4 applies are necessary for the proper exercise of a function of the service.(5)The Defence Council must ensure that the armed forces have in place arrangements designed to ensure that acts of—(a)a member of the armed forces, or(b)a civilian subject to service discipline when working in support of a member of the armed forces,to which a provision of Schedule 4 applies are necessary for the proper exercise of a function of the armed forces.(6)The arrangements which must be in place by virtue of subsection (4) or (5) must be arrangements which the Secretary of State considers to be satisfactory.(7)In this section—“armed forces” means His Majesty’s forces (within the meaning of the Armed Forces Act 2006);“civilian subject to service discipline” has the same meaning as in the Armed Forces Act 2006;“GCHQ” has the meaning given by section 3(3) of the Intelligence Services Act 1994;“head” means—(a)in relation to the Security Service, the Director General of the Security Service,(b)in relation to the Secret Intelligence Service, the Chief of the Secret Intelligence Service, and(c)in relation to GCHQ, the Director of GCHQ;“intelligence service” means the Security Service, the Secret Intelligence Service or GCHQ.(3)For the heading before section 50 substitute “Defences”.
The arrangements which must be in place by virtue of subsection (4) or (5) must be arrangements which the Secretary of State considers to be satisfactory.””Member’s explanatory statement
This amendment replaces Clause 30 with a new Clause which provides a defence for extra-territorial offences under Part 2 of the Serious Crime Act 2007.
Lord Sharpe of Epsom Portrait Lord Sharpe of Epsom (Con)
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I beg to move.

Amendment 67 (to Amendment 66)

Tabled by
67: In inserted section 50A(2), after “necessary” insert “and proportionate”
Member’s explanatory statement
This amendment seeks to incorporate a proportionality requirement into the overarching defence.
Lord West of Spithead Portrait Lord West of Spithead (Lab)
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My Lords, I think our concerns have been assuaged by what the Minister said at the Dispatch Box and I think we should be pleased that we have done something that is going to be very useful for our intelligence services in the future. This is a very difficult, complex area. I have been involved in intelligence not as long as the noble Baroness, Lady Manningham-Buller, but probably for about 40 years and it is a very difficult area. It is always dancing on pinheads, I am afraid, but I think we have achieved something here, so I am delighted. I shall not move my amendment.

Amendment 67 (to Amendment 66) not moved.
Amendment 68 (to Amendment 66)
Tabled by
68: In inserted section 50A(2)(b), leave out “a” and insert “an intelligence-related”
Member's explanatory statement
This amendment would restrict the application to the armed forces of the new defence to charges under Part 2 of the Serious Crime Act by limiting it to the exercise of intelligence-related functions.
Lord Anderson of Ipswich Portrait Lord Anderson of Ipswich (CB)
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Given the Minister’s undertaking, I shall not move the amendment.

Amendment 68 (to Amendment 66) not moved.
Amendment 69 (to Amendment 66) not moved.
Amendment 66 agreed.
Amendment 70 not moved.
Clause 31: The foreign power condition
Amendment 71
Moved by
71: Clause 31, page 23, line 7, after “or” insert “having regard to other matters known to them”
Member’s explanatory statement
This amendment clarifies the meaning of “ought reasonably to know”.
Amendment 71 agreed.
Amendment 72 not moved.
Clause 32: Meaning of “foreign power”
Amendment 73
Moved by
73: Clause 32, page 23, line 31, at beginning insert “Subject to subsection (1A),”
Member’s explanatory statement
This amendment is connected to the amendment to page 23, line 40 in the name of Lord Marks of Henley-on-Thames.
Lord Wallace of Saltaire Portrait Lord Wallace of Saltaire (LD)
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My Lords, this amendment comes with Amendment 75, which is the substantive amendment. I suppose I should declare a certain underlying prejudice as I start: more than 30 years ago, when I was in charge of research at Chatham House, the international affairs think tank, when we worked with departments across Whitehall on foreign policy issues, we found that the Home Office was the most resistant to the idea that foreign interests had to be taken into account. I have a vivid memory of a conference at Chatham House convened on behalf of the Metropolitan Police with police from the Netherlands, Belgium, France, Spain and elsewhere, at which a number of Home Office civil servants stood in a corner of the room during lunch rather than talk to foreigners. I am sure, 30 years later, that the Home Office is far better than that, but I think there is a problem of how the Bill, as it becomes an Act, looks to our closest friends and allies.

The aim of the Bill is to guard against foreign interference in British politics and British life by hostile foreign powers—above all, by China, Russia and Iran, but also other non-democratic states that want to undermine open societies and democratic government. Yet the definition of “foreign power” does not discriminate in any way between the more than 190 foreign powers with which the UK maintains political, economic and social relations, except for Ireland as a special case. I understand that there have been critical comments from within the US Administration and several European Governments. Yesterday, the German party foundations were speaking to my noble friend Lord Purvis about their worries about being caught by the new red tape which this threatens to impose on them.

20:30
I have heard Ministers say that it is important in passing Bills to give signals to those whom they will affect. Well, this Bill sends a signal to our friends and allies that we think they are potentially hostile and untrustworthy. Offence will be given, obstacles will be erected and bureaucratic procedures will be created. Yet the intensity of our political, economic and social relations with friendly states is of a qualitatively different order from those with hostile states, in particular pariah states such as Iran.
Many of us have spent a great deal of our professional and political lives engaged closely with foreign Governments and political parties with which we are aligned. I should here mention Amendment 74, to which the noble Baroness, Lady Hayter, will no doubt speak. Those of us who belong to international party federations or who have spent our professional lives dealing with international policy will find ourselves very rapidly caught up in this. During my career, I got to know a number of Republican senators on the United States Senate Committee on Foreign Relations at conferences and other places, as well as senior officials at the State Department and elsewhere—and, yes, occasionally the people I met were in the CIA.
That is the sort of thing that one has to do when working in think tanks trying to understand international relations, and not just non-partisan think tanks such as Chatham House; some of the well-funded right-wing think tanks that have grown in the last few years have very close links with their comparators in Washington and with senior Republicans. This would mean red tape for all of them, from a Government who are not in favour of adding red tape. Of course we talk about things; we engage in second-track diplomacy and try to influence each other.
In those contexts, one wants to consider whether some of our friendly states—those with which we have the closest interactions—should be excluded. That is what this amendment does. We have chosen to put down the member states of NATO because that is a clear category of close allies. We recognise that it does not include Australia and New Zealand, for example, and the Secretary of State might well like to designate Japan. However, the purpose of this amendment is to give the Government an opportunity to say that we do not regard as hostile all foreign powers or intimate conversations about politics and attempts to influence—and perhaps on occasion to direct—each other.
I have another vivid memory of a meeting at Chatham House when the second President Bush was about to take office. John Bolton and a number of others came to Chatham House and told us what we must do on behalf of the British Government in terms of following whatever the US Administration gave us. It was a pretty blatant attempt to direct what we did—no doubt we should have reported it to the Government at the time, instead of which we simply boiled internally.
I hope the Minister will assure us that the way in which contacts with the American, Dutch, Danish, Swedish and other Governments are treated will be of a qualitatively different order. I hope he will say that we need to change that part of the Bill. On a previous occasion when I criticised some of what this Government have done in the last few years, the Minister responded, “Yes, but now this is a different Government”. Happily, it is. We now have a Prime Minister who understands diplomacy and understands that we gain more by treating our neighbours as friendly Governments. I congratulate him on the achievement that he has just managed to negotiate. In that case, we need a different approach in this Bill as well. This amendment is a way of pushing us in that different direction, towards the foreign powers that are our closest friends, allies and neighbours. I beg to move.
Baroness Hayter of Kentish Town Portrait Baroness Hayter of Kentish Town (Lab)
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My Lords, I will speak to Amendment 74 in my name. It deals with the definition of “foreign powers”, which clearly is a key part of the overall Bill.

However, I first need to talk about this part of the Bill in relation to FIRS, which we will cover next week—or maybe the week after, or the week after that, given the rate at which we are going; I hope not. I need to do that because the definition of a foreign power in Clause 32 determines who will be covered by the scheme we will come to later. In doing so, I make it clear that I greatly welcome the changes to FIRS contained in the government amendments, which again we will come to later, as they take account of the arguments made in Committee.

However, there is an anomaly that remains which particularly worries me. Many external political parties, including those from friendly states—not only NATO, as the noble Lord, Lord Wallace, mentioned, but New Zealand and Australia—will find themselves subject to registration and reporting requirements on issues completely unrelated to Government policy, let alone security issues. This is the National Security Bill we are discussing, not a lobbying Bill. These states will be caught on issues that have nothing to do with government policy or security.

Clause 32(1)(e) defines a foreign power as a political party whose members form the Government. At the moment, that would mean, for example, the Democrats in America, the Labour Party in New Zealand and Australia, and En Marche!—or whatever it is now called—in France. The Minister will know better than I do which of the Conservatives’ close associates are also in Government in various countries and therefore would be caught by this. The definition in Clause 32 covers the whole Bill, which might be appropriate for some parts of the Bill but certainly not for Part 3. The registration and reporting of activities in Part 3 has an enormous number of requirements—if we leave this definition to cover that—for political parties on non-security issues.

Assuming the Minister’s amendments go through, perhaps most worrying is the new Clause 70(3)(d), which means that FIRS covers any communication by a relevant overseas party—one whose members form the Government—which could affect, or is about,

“the proceedings of a UK registered political party”.

Stop and think about that. This will cover a political party in a friendly country having to register its activities in this country. The Minister will immediately pop up and say, “No, not if they do it directly—only if they do it through a third party”, but that is what happens, as we do these things through third parties. For us, it means if a fellow member of a sister party that is in Government—I do not know if the Conservatives call their friendly parties “sister parties”, but we always use the phrase—uses a consultancy, for example, or a PR firm, to ask us to support the change in the venue for the next Party of European Socialists Congress, or our work on the environment or an equality manifesto, the publication of something in a newspaper, an ad about a disaster or anything completely internal to our party-to-party relationships; but if is done by an intermediary, it becomes reportable to the Government, not of our political persuasion at the moment, of course, and published.

I doubt that is what the Government want because this is not about transparency now. We are into Big Brother land. I ask the Minister whether, if members of a party in Government, not the Government itself, contact any of us—if you look at Schedule 14 it could be not only us but, for example, councillors, even candidates, mayors via a conference organiser or a public affairs adviser—about any issue, such as a free trade agreement or a completely non-government issue such as an upcoming internal seminar being run between parties, where we tend to use intermediaries such as conference organisers, and they want to invite a party member as a speaker, it would have to be reported because it is via an intermediary. That is how I have read it and it is what he said when we had a very helpful meeting: if you use an intermediary, it is reportable.

Similarly, if party staffers from the party in Government organise a stall or a workshop at a party conference, and do so via a conference organising company, they are paying these intermediaries; therefore, they are acting under their direction. Those were the very helpful words the Minister gave me. They are therefore doing it on the order of the sister party in that other country. They are being directed by that party; the party is paying them to contact us to appear in a seminar or whatever it is. Is that reportable, and is there a criminal penalty if they fail to do it?

If they use an intermediary, who could be an interpreter or a translator, and they pay for that expertise, and they are again directing that party as to what they should do, would that be reportable—not just reportable, but reportable, for us as the Labour Party, to a Conservative Secretary of State, and a lot of this published? Non-governing parties are not covered, so the French socialists can come over and do what they like with us, and that is fine because they are not in Government, but it applies if we start holding seminars which the German Social Democrats, for example, set up using an intermediary such as a conference facilitating company.

For the Minister’s own party, some of their sister parties would also be covered by this when they go to Birmingham, or wherever the Conservatives have their party conference. I doubt very much that, at the beginning, it was the intention of the Government for their definition of foreign influence to get down to this level.

Over the weekend, or perhaps on Monday, some of us were sent very helpfully all the draft regulations and the forms that have to be filled in with people’s private mobile numbers and all sorts of details about what is going to happen, the dates of it, its purpose, the desired outcome, the individuals involved, contact details, the contact for the intermediary, and the invitations and which MPs they are going to. For possibly one meeting on the fringe of a party conference, or a TV interview, or the drafting of an article done by a party via an intermediary, all this would need to be reported.

I am not asking Ministers tonight to redraft this. I am asking—and I think there may be some willingness to do it—for the Government to look hard at whether it is really the intention that FIRS should include this party-to-party relationship, or party-to-politician relationship, where it is done via a third party. I hope that we can get some satisfactory answers or an undertaking that we could perhaps meet, and, if necessary, that some further tweaking might happen to this part of the Bill.

20:45
Lord Marks of Henley-on-Thames Portrait Lord Marks of Henley-on-Thames (LD)
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My Lords, I completely support what has been said by my noble friend Lord Wallace of Saltaire in moving our Amendment 75, in respect of the exclusion of NATO members from the definition of foreign power, for all the reasons he gave and that I gave in Committee.

Put shortly, we cannot see any valid reason for treating NATO members as foreign powers on the same basis as Russia, China, Iran and North Korea. We are tied to our NATO allies by a treaty which imposes binding mutual obligations of defence and support. I have considerable understanding for the concern and disappointment expressed in public and in the press by representatives of some friendly nations of that unflattering equivalence of treatment. Those feelings mentioned by my noble friend Lord Wallace are not helpful to British foreign policy or diplomacy.

I also cannot see why the Government would not regard it as positively helpful to have the power to add friendly nations to a list of countries that will not be regarded as foreign powers for the purposes of this legislation. It may be that the Government will conclude in due course, even if not now, that the inclusion of all friendly countries as foreign powers may be profoundly unhelpful to our national position. To have the power, if that transpires, to exclude countries from the definition by regulation, may be regarded then as thoroughly convenient. Why will the Government not accept the flexibility that this part of the amendment offers?

As to the exclusion of governing political parties from the definition of foreign powers, this was an amendment we moved in Committee and which we supported then, and support now, for many of the reasons mentioned by the noble Baroness, Lady Hayter, in support of Amendment 74. We see no basis for categorising all political parties that form any part of a foreign Government as foreign powers, as proposed in Clause 32(1)(e). It is unrealistic, it makes no sense and it is wrong in principle.

As the noble Baroness pointed out, this is the definition of foreign powers that governs the application of FIRS, as well as Part 1 and other parts of the Bill. It could cause all kinds of difficulties where there are coalition Governments, often without UK-style collective responsibility. It is also the case that political parties are themselves diffuse in their views and often divided. To equate all governing parties with the foreign powers in whose Government they take a part—often a small part—is, we say, profoundly misguided. Perhaps the Minister could explain how the Government justify treating even small coalition parties as the Governments of which they form a part?

Lord Balfe Portrait Lord Balfe (Con)
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My Lords, I think that this part of the Bill was drawn up by someone who had not travelled very widely. It really just does not make sense.

I speak particularly to Clause 32. I do not exactly spend all my time, but I do spend a good bit of it, talking to embassies in London, largely from European Union countries that I have known for some time. I also go to Brussels very regularly because I still have interests there. I meet many people from other parties and groups—for a time I was a member of the Belgian Christian Democrat party—and I wonder where this lands. Of course, in some countries—Belgium is one—you will always have a coalition; it moves around, but it is always there.

There are also many other groups—for instance, the Kangaroo Group in Strasbourg covers all of the European Union and exists to pull down barriers to trade. I am a member of that group still because it has a foreign membership category. What are we supposed to do? Incidentally, the Kangaroo Group was set up by Basil de Ferranti, a British Conservative—though it is now a long time since he has been with us. This is a bit of a mess.

I want to deal in particular with Germany, which has a long tradition of political foundations. It has the Konrad-Adenauer-Stiftung, which I do lectures for from time to time; I will be doing one later this month. It has the Friedrich-Ebert-Stiftung, which is the socialist, or social democrat, one. It has the Friedrich-Naumann-Stiftung, which is, if I remember rightly, the one from the liberal party, and it has the Heinrich-Böll-Stiftung from the Greens. They all engage in trying to hold international conferences and gatherings to put across their policies, and they also invite people like me, who are reasonably well known in Germany, to go and give lectures and talks to members of their Stiftung. Part of the reason for that is to educate their own citizens in overseas political practice; it is not all one-way. I think we have missed something out here.

The Minister will say that it will not mean this and it will not mean that, but other people have looked at this Bill and at the explanations. In particular, the German foundations have concluded, reading this draft law on entities acting on behalf of a foreign power—under the law, Germany is a foreign power; that is the definition —that, if they are to get money from their Stiftung to do any work in Britain, the Stiftung will have to satisfy the German Government that it is legitimate to accept and apply for that money.

According to the German lawyers, Clause 31(2)(c), which says that any work carried out

“with financial or other assistance provided by a foreign power for that purpose, or … in collaboration with, or with the agreement of, a foreign power”,

means that the Stiftungen will fall under the scope of the registration scheme. In other words, if the Stiftungen are to be able to operate and satisfy their funders, they will have to satisfy them about this clause in our legislation. This means that a German Stiftung—a political foundation—that receives German taxpayers’ money, or for that matter a cultural institute, Chamber of Commerce or any London-based NGO or think tank that receives money from Germany, is an agent of a foreign power and has to register, according to the definition, every single interaction with UK politicians or high-ranking officials within 28 days. They have described this as making their lives “impossible”. I say to the Minister that it is not what we say the law means; it is what it means to a lawyer, and in this case what it means to a German lawyer.

I cannot agree that the concept of “foreign principle” has been removed. It has been removed and replaced with “foreign power”, but this does not cover what is needed. The fact of the matter is that, in the Minister’s letter, he very carefully said:

“Foreign opposition parties are not classed as foreign powers (for example the French Socialist party).”


That is not the German interpretation of our law. The Minister can shrug his shoulders, but the sensible way forward would be to accept an amendment such as the one put down by the noble Lord, Lord Wallace, which makes it quite clear that these countries are not foreign powers for the purpose of this legislation. I invite the Minister to think carefully and come back at Third Reading with a much better definition. This general, catch-all “foreign powers” covers all of NATO but also, as has been mentioned, Australia, New Zealand and Canada. Where are we going? Please could the Minister think it out a bit better and clarify it, possibly along the lines of the amendment, but certainly so that the people we deal with every day, who are cheerfully telling me about the attitude of the British Government to the reconstruction of Ukraine—which is not quite what the British Government are saying but is what the diplomats are picking up—can continue to brief us and keep us on top of things?

Viscount Stansgate Portrait Viscount Stansgate (Lab)
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My Lords, I want to speak briefly to ask the Minister a question. I support what has been said by my noble friend Lady Hayter and the noble Lords, Lord Wallace and Lord Marks, but is Clause 32(1)(e) not possibly a case of government overreach? When it is listed that a political party involved in a Government of a friendly power should be included in the Bill in this way, does it imply that every member of that political party would be covered by this provision? Are we talking about the headquarters of a political party or the membership? That would involve so many people, I wonder whether the Government really mean to do that and, if so, whether they realise what an incredible extension and overreach that might represent.

Lord Ponsonby of Shulbrede Portrait Lord Ponsonby of Shulbrede (Lab)
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My Lords, this has been a more wide-ranging debate than I was anticipating. The definition of a foreign power is an important issue. It was covered by the Minister in Committee, and I look forward to him expanding on what he said and particularly to address the points made by my noble friend Lady Hayter in her Amendment 74. I think I will leave it there because we have other business to deal with, and I look forward to the Minister’s response.

Lord Sharpe of Epsom Portrait Lord Sharpe of Epsom (Con)
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My Lords, I thank all noble Lords who have spoken in this debate, and I will do my best to clarify all the points and answer all the questions that have been raised. First, I turn to government Amendment 76, which addresses concerns raised in Committee and in the report by the Joint Committee on Human Rights on the drafting of the third limb of the foreign power threat activity provision. This provision is a key part of the Bill which ensures that police have the powers they need in supporting investigations into state threats offences. The concerns raised were that support or assistance unrelated to the harmful conduct covered by foreign power threat activity under Clause 33(3) risked being caught under Clause 33(1)(c). That is not the Government’s intention, and this amendment puts it beyond doubt that the support or assistance must be in relation to the conduct covered by Clause 33(1)(a) rather than unrelated activity. I hope that addresses the concerns helpfully put forward by noble Lords in Committee and that this amendment is welcomed.

This group also includes Amendment 74 tabled by the noble Baroness, Lady Hayter of Kentish Town, and it relates to the meaning of a “foreign power”. The amendment seeks to remove

“a political party which is a governing political party of a foreign government”

from the definition. I would very much like to thank the noble Baroness for the constructive engagement we have had on this issue. I know her principal concern is with the effect of this clause on the foreign influence registration scheme, which of course we will be debating next week.

The foreign power condition applies right across the Bill and is crucial in order that the new offences in it, such as espionage, theft of trade secrets and sabotage, work effectively. Removing it here would remove it from those other offences too. The Government’s position, as the noble Baroness is aware, is that the inclusion of governing political parties addresses situations where there is a dominant political party, or parties, within a country, to such extent that it may be difficult to disentangle whether harmful activities have been carried out on the direction of the ruling party or the Government.

21:00
We must be careful not to create any gaps in our legislation which state actors could exploit. We are all aware that states seeking to exert their influence on the United Kingdom or to harm it will do so through a number of vectors. While it is arguably the case that a person acting for a governing political party could be considered to be acting directly for a foreign power, the Government’s view is that this will not always be the case, and taking this approach would increase the challenges of prosecuting state threats activity. That is why it is so important to keep a political party—which is a governing political party of a foreign Government—within the definition of foreign power, otherwise we may not capture all behaviour we are concerned about.
In the context of FIRS, which, as the House will know, the Government are proposing to scale back significantly in response to concerns raised by this House, registration will be required only where an individual or entity—I stress this, as it is important—is directed by a foreign power to influence elections, government decisions, proceedings of political parties and members of the UK legislatures.
I think the noble Baroness has received the letter I sent her today which sought to reassure her that the circumstances where parliamentarians will have to disclose their work with foreign political parties are likely to be narrow: only where a foreign power—including a foreign ruling party—is directing the parliamentarian to influence others.
Lord Wallace of Saltaire Portrait Lord Wallace of Saltaire (LD)
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My Lords, may I ask a question of clarification? I understand much more clearly what the noble Lord is saying: governing political parties are in effect acting as intermediaries for the state. However, certainly in the international relations which I have been engaged in over the last 40 years, many think tanks in other states also operate as intermediaries in that respect. In particular the Washington think tanks, which are very close to the Government, act as intermediaries, but foreign-funded ones in other democratic and non-democratic capitals often also do so. Should that not be included in the Bill for the same rationale that he has just given us on dominant political parties?

Lord Sharpe of Epsom Portrait Lord Sharpe of Epsom (Con)
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My Lords, ruling parties are the foreign power. As I have tried to be clear and have stressed twice now, registration will be required only where an individual or entity is directed by a foreign power—that is the condition. Therefore, if a think tank was being directed by a foreign power, the answer would be yes. If it was not, the answer would be no.

Baroness Hayter of Kentish Town Portrait Baroness Hayter of Kentish Town (Lab)
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My Lords, does the Minister accept that an intermediary could be a conference-arranging organisation? If he is coming to that, I would be grateful.

Lord Sharpe of Epsom Portrait Lord Sharpe of Epsom (Con)
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I noted the noble Baroness’s questions about intermediaries, and I promise that I will address that.

I know that we have had some debate about what it means to be directed by a foreign power. I want to reassure all noble Lords that this is a high bar. The natural meaning of “direction” is an order or instruction to act. It is possible that such direction could be delivered in the language of a request but only where there is a power relationship between the person and the foreign power which adds an element of control or expectation to the request: for example, through a contract, payment, coercion or the promise of future compensation or favourable treatment. It is not enough for a foreign power to fund an activity, so generic requests, joint collaboration or simply an alignment of views, absent the power relationship, will not meet the test for direction.

I will quote directly from the letter I sent to the noble Baroness, Lady Hayter—I apologise for not sharing it more broadly with the House but I was cleared to send it only this morning:

“In terms of what activity would be registrable, we consider that where a parliamentarian is to be directed by a foreign governing party, for example, being paid or on the promise of favourable treatment, to influence Government Ministers or fellow parliamentarians, this would require disclosure under FIRS.”


I will come back to my quote in a second. I digress briefly into the subject raised by my noble friend Lord Balfe and his quick canter through the Stiftungen of Germany. We are in touch with the German Government on this issue and are grateful for their constructive engagement. We do not consider that, for example, the Konrad-Adenauer-Stiftung would constitute a foreign power under Clause 32 of the Bill. A person acting under the direction of such an institution would not be in scope of the foreign influence registration scheme. We will have another opportunity to debate these issues next Tuesday. Konrad Adenauer should be reassured that it is not covered.

I want to be clear that there is no requirement for the activity to cease, only for it to be transparent. In these circumstances, there is a strong national interest in greater openness on the influence of British politics by foreign powers. It should be clear not only to the Government, but to parliamentarians and to the public, where this influence is being brought to bear. FIRS seeks to address the gap, providing us all with more information about the scale and nature of foreign political influence in the UK.

I will answer the question from the noble Baroness, Lady Hayter, directly. In the example she described, the intermediary would have to register, if directed by a foreign power. The noble Baroness herself, or a foreign power, would not.

Baroness Hayter of Kentish Town Portrait Baroness Hayter of Kentish Town (Lab)
- Hansard - - - Excerpts

This is at the heart of it. If the German SPD engaged somebody to set up a stall at our party conference, they would be directed, be paying and have a contract for it. This would then have to be registered. I have seen the draft regulations which the Minister kindly sent me. They would have to disclose which MPs they had invited to the event and all of that. As the Minister has just said, as soon as the intermediary—the conference arrangements organisation—is paid by an outside political party to organise this, according to the form that I have been sent, we would have to fill in our names. We may not be the ones registering, but it would be wholly disclosable. It has nothing to do with the Government nor with national security. It is a party-to-party issue. It is simply because they have used an intermediary—a conference arrangements organisation or interpretation.

I think it is clear and that we agree on this. I am not asking that we should be able to bring it back at Third Reading, but I am asking the Minister to leave a little chink of light. Having thought about it, in consultation with his colleagues, the Government might be willing to look at whether this is really what they want to achieve.

Lord Sharpe of Epsom Portrait Lord Sharpe of Epsom (Con)
- Hansard - - - Excerpts

I thank the noble Baroness for her comments. I am more than happy to continue engagement on this subject.

The final amendment in this group, concerning the definition of a foreign power, was initially tabled in Committee and has been retabled by the noble Lords, Lord Marks and Lord Wallace. It seeks to exclude members of NATO and other nations, via regulations, from the definition of a foreign power. I want to put it on record that we do not consider all foreign powers to be hostile. When this amendment was initially tabled, I put forth that the National Security Bill focuses on the harmful conduct undertaken by a person and not the foreign power they seek to benefit. I continue to believe that this is the right approach.

The Government do not seek to create gaps in the legislation which could allow states to act through proxies and thus undermine what the Bill seeks to do—to take necessary and appropriate action against harmful activity. Again, no doubt to groans, I will bring your Lordships’ attention to the case of Daniel Houghton. He is the dual British-Dutch national who attempted to sell sensitive information to the Dutch intelligence service in 2010. If this amendment were to be accepted, and NATO states excluded from the definition of a foreign power, cases such as Daniel Houghton’s would not be captured by the offences and measures in the Bill. This would not be an appropriate outcome which could undermine the Bill. I believe that the Dutch came to us on this particular occasion and I commend them for it. I ask again that these amendments tabled by noble Lords be withdrawn.

Viscount Stansgate Portrait Viscount Stansgate (Lab)
- Hansard - - - Excerpts

I do not want to detain the House. I asked whether the definition of a political party in Clause 32(1)(e) means all members of it or not.

Lord Sharpe of Epsom Portrait Lord Sharpe of Epsom (Con)
- Hansard - - - Excerpts

I thought that I answered this when I talked about direction by a foreign power. If members of a political party are directed by a foreign power, they would be covered.

Lord Purvis of Tweed Portrait Lord Purvis of Tweed (LD)
- Hansard - - - Excerpts

I am grateful to the Minister for his clear explanation. There remains a slight degree of uncertainty. Presumably the Government will issue guidance to be put in place before the scheme is operational. We raised this at our meeting with him.

I wonder whether, in advance of us considering FIRS next week, we could have more information about what the draft guidance will look like as part of the engagement that the Minister has committed to, which is welcome. We have seen some elements of the draft regulations and heard some explanations from the Government but, if he could expand on what the draft guidance might be, that would provide some reassurance to the Stiftungen and other organisations that are hurriedly trying to find out where they fit in this area around what a foreign power will be and the interaction with either intermediaries or those who are funded by them. It is hard to outline that in the Bill but, if the Minister could provide that information in advance of next week, it would inform us very well.

Lord Balfe Portrait Lord Balfe (Con)
- Hansard - - - Excerpts

My Lords, before the Minister comes back, could either he or a representative of the Government talk to the German ambassador and clear up this difficulty because the Germans are quite convinced that they are caught by this? It would be good if he could come back here and say, “I’ve spoken to the German ambassador or the First Secretary and we have agreed this”. Otherwise, the confusion will carry on.

Lord Sharpe of Epsom Portrait Lord Sharpe of Epsom (Con)
- Hansard - - - Excerpts

My Lords, in answer to the question from the noble Lord, Lord Purvis, I cannot make any promises but I will certainly try. In answer to my noble friend Lord Balfe’s question, as I said in my initial answer to him, we have engaged extensively with the German Government.

Lord Wallace of Saltaire Portrait Lord Wallace of Saltaire (LD)
- Hansard - - - Excerpts

My Lords, I am not convinced by the Minister’s argument. That he has to go back to the single case of Daniel Houghton shows the weakness of the ground on which he stands. We recall that case, which involved a Dutch-British dual national who was uncovered by our allies, the Dutch, with whom, of course, we have a close intelligence relationship as well as a number of other things; it was therefore resolved. No such things have happened with a hostile foreign power. If we have to go back to that case, it simply shows that there is not very much evidence on which the Government can make this argument.

Many of us who know that this is an important Bill and wish it well are concerned about the unnecessary offence given to friendly Governments. The Minister has not assured us that all our friendly Governments have been consulted and are happy with this Bill. I hope that, in informal conversations between now and Third Reading, he—or at least one of his Foreign Office Ministers who actually talks to other Foreign Ministers—will be able to assure us that we will not treat all foreign powers or contact with them on a similar basis.

On that basis, I will not divide the House but I remark that I am unsatisfied with the Minister’s response. I beg leave to withdraw the amendment.

Amendment 73 withdrawn.
Amendments 74 and 75 not moved.
Clause 33: Foreign power threat activity and involvement in that activity
Amendment 76
Moved by
76: Clause 33, page 24, line 29, leave out from “to” to end of line 30 and insert “a person (“P”), where the person who engages in the conduct—
(i) knows or believes P to be involved in, and(ii) engages in the conduct for the purpose of giving support or assistance to,”Member's explanatory statement
This amendment clarifies that conduct is only within Clause 33(1)(c) if it is for the purpose of giving support or assistance to conduct within 33(1)(a).
Amendment 76 agreed.
Clause 34: Interpretation
Amendment 77
Moved by
77: Clause 34, page 25, line 30, at end insert—
““information” includes information about tactics, techniques and procedures;”Member's explanatory statement
This amendment adds a definition of "information" for the purposes of Part 1 of the Bill.
Amendment 77 agreed.
Clause 37: Consents to prosecutions
Amendment 78
Moved by
78: Clause 37, page 27, line 26, at end insert—
“(e) Schedule 3 (disclosure orders);(f) Schedule 4 (customer information orders).”Member's explanatory statement
This amendment excepts offences under Schedules 3 and 4 from the requirement to obtain the consent of the Attorney General or Advocate General to proceedings for an offence under Part 1.
Amendment 78 agreed.
Amendments 79 to 79B not moved.
Clause 56: Reviews of operation of this Part
Amendment 80
Moved by
80: Leave out Clause 56 and insert the following new Clause—
“Reviews of Parts 1, 2, 4 and 5(1) The operation of Parts 1, 2, 4 and 5 of this Act must be reviewed by a person, or people, appointed by the Secretary of State.(2) The operation of Part 4 must be reviewed by the person appointed by the Secretary of State under section 36(1) of the Terrorism Act 2006 (review of terrorism legislation).(3) The operation of Parts 1, 2 and 5 must be reviewed by either—(a) the person appointed by the Secretary of State under section 36(1) of that Act, or(b) a different person appointed by the Secretary of State. (4) Reviews under this section must be carried out in respect of—(a) the 12-month period beginning with the day on which any section in this Part comes into force, and(b) each subsequent 12-month period.(5) Each review under subsection (1) must be completed as soon as reasonably practicable after the period to which it relates.(6) The person or people mentioned in subsections (2) and (3) must send to the Secretary of State a report on the outcome of each review carried out under subsection (1) as soon as reasonably practicable after completion of the review.(7) On receiving a report under subsection (6), the Secretary of State must lay a copy of it before each House of Parliament.(8) Section 36(6) of the Terrorism Act 2006 has effect as if the references to “expenses” and “allowances” in that subsection included “expenses” and “allowances” in connection with the discharge by the person or people of functions under this section.”Member's explanatory statement
This amendment would provide for the regular review of the operation of Parts 1, 4, and 5 of the Act as well as of Part 2.
Lord Ponsonby of Shulbrede Portrait Lord Ponsonby of Shulbrede (Lab)
- Hansard - - - Excerpts

My Lords, I will be brief. Amendment 80

“would provide for the regular review of the operation of Parts 1, 4, and 5 of the Act as well as of Part 2.”

Also in this group are government Amendments 81, 85 and 86. Of course, we welcome that the Government have engaged on the issue of oversight and introduced significant concessions. However, the purpose of Amendment 80 in the name of my noble friend Lord Coaker is to go further. On that basis, I beg to move.

21:15
Lord Purvis of Tweed Portrait Lord Purvis of Tweed (LD)
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My Lords, I am not sure whether the noble Lord will seek to test the opinion of the House—he is nodding from a sedentary position. If he does, we will support him. However, that is not to disregard that the Government have listened and responded positively to the points made in Committee on the need for independent oversight.

Therefore, I will support what the Government say, with just with one question regarding oversight and their intention. We have two former independent reviewers in the House at the moment. I am not sure what normal practice is, but the Government’s amendment, regarding the independent reviewer providing a report to the Secretary of State and the Secretary of State then laying that before Parliament, gives no indication of a timeframe for laying the report before Parliament after it has been received from the independent reviewer. Given the earlier comments from the noble Lord, Lord Coaker, regarding Governments not providing information to Parliament in a timely manner, could this unfortunately be a wee loophole in the independent reviewing? It seems that the amendment gives Ministers complete discretion on when they may present reports to Parliament. Therefore, reports could be received from an independent reviewer but not presented to Parliament for a considerable period or at all.

I hope that is not the case and that this can be clarified by the Minister, but it is an omission within the Government’s amendment, which is otherwise welcome. As I say, the Government have moved, but I hope that the Minister can respond on the areas of omission.

Lord Anderson of Ipswich Portrait Lord Anderson of Ipswich (CB)
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The noble Lord, Lord Purvis, hits on a sore point for independent reviewers past and present. At the instigation of my noble friend Lord Carlile, the Australians copied the job of independent reviewer—I think they call him or her the independent national security legislation monitor, which is even more indigestible. In doing so, they provided in their statute that reports be laid before Parliament within, I think, 15 sitting days of receipt by the Minister, an excellent discipline which I rather wish this amendment had followed.

I do not wish to seem ungracious. The independent review of powers, whose exercise is attended by secrecy, is a token of good faith on the part of government. It has proved its worth since the 1970s in this country in the context of counterterrorism law. I never doubted the good faith of the Government where this Bill is concerned. This amendment will make that good faith evident to others. It will help to dampen down the conspiracy theories that are so prevalent in this area and allow us to keep pace with Australia—and shortly, I hope, Ireland—in providing for independent oversight of almost the full range of national security laws.

However, gratitude has its limits. On first inspection, the amendment tabled by the noble Lord, Lord Coaker, looks even better, so if he divides the House, I shall vote for it.

Lord Murray of Blidworth Portrait Lord Murray of Blidworth (Con)
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My Lords, I thank noble Lords for those contributions. There has been plenty of discussion throughout the passage of this Bill about the need for oversight of the state threats provisions in the Bill. The Government have welcomed this debate and agree on the need for the Bill to go further in this regard. The new provisions proposed by the Government do just that. I am very grateful for the remarks made by the noble Lords, Lord Ponsonby and Lord Purvis, on the Government’s movements in that regard.

I will not spend too long on this group but will set out briefly the provisions and how we expect the government provisions to work in practice. The amendments made by the Government create a single reviewer of state threats legislation to oversee the operation of the measures in Parts 1 and 2 of the Bill. This means that the reviewer will oversee not just the STPIM regime but the criminal offences and the exercise of police powers to ensure that their use is appropriate and proportionate.

The Government are also bringing oversight of the provisions of the state threats port stops power—Schedule 3 to the Counter-Terrorism and Border Security Act 2019—within the remit of the new reviewer, meaning that all dedicated state threats legislation will be considered as part of a single reviewer’s role.

The Government have heard the argument that this role should in practice be carried out by the Independent Reviewer of Terrorism Legislation and can see the potential benefits this could bring. However, the Government are also conscious that the role will be of public interest and will therefore run an open competition for it, rather than appointing someone directly. Given the synergy between the roles, the Government will align the appointment cycle of this post with that of the terrorism reviewer. This will allow the role-holders to work closely together, but also provide the option of having one individual fill both roles, should that be beneficial.

I thank the noble Lord, Lord Coaker, for his proposed amendment on this topic, which would achieve the same effect but also add Parts 4 and 5 to the remit of the reviewer. As mentioned in previous debates on this topic, an explicit commitment to oversight of Part 4 in the Bill is unnecessary, given it is already in the remit of the Independent Reviewer of Terrorism Legislation. I therefore suggest that there is nothing lacking from the present proposal. The provisions in Part 5 are supplementary to the rest of the Bill. The reviewer will be able to look at how Parts 1 and 2 operate in terms of commencement, regulation-making powers and territorial extent without the need explicitly to mention Part 5 in the powers for the reviewer. For those reasons, the Government cannot accept Amendment 80 as tabled by Labour, and hope that colleagues across the House will welcome the government amendments.

Lord Purvis of Tweed Portrait Lord Purvis of Tweed (LD)
- Hansard - - - Excerpts

Before the Minister sits down, I wonder if he might be able to address my point—which I remind him is the only point that I made?

Lord Murray of Blidworth Portrait Lord Murray of Blidworth (Con)
- Hansard - - - Excerpts

I certainly addressed the point which he generously made praising the Government for our amendments. The point that he raised in relation to the Labour amendment, on the basis that there is no timeframe in the present amendments, is not valid in the Government’s submission, because the Labour amendment itself does not contain any binding requirement on the laying of reports. In our submission, that would remove a level of flexibility. In the area of national security, it is important not to hedge about these kinds of provisions with time requirements. For those reasons, we do not believe that the amendment is necessary. I hope that answers the noble Lord’s question.

Lord Purvis of Tweed Portrait Lord Purvis of Tweed (LD)
- Hansard - - - Excerpts

I know that this is Report and we do not have to and fro, but I was making the point that it was an omission in the Government’s amendment. It is utterly open-ended as to whether the Secretary of State will lay the report from the independent reviewer before Parliament. I was seeking clarification from the Minister that that would not be the case.

Lord Ponsonby of Shulbrede Portrait Lord Ponsonby of Shulbrede (Lab)
- View Speech - Hansard - - - Excerpts

My Lords, it was me who moved Amendment 80, which is the first amendment in this group. I thank the noble Lords, Lord Purvis and Lord Anderson, for supporting it. Regarding Part 5, which is covered by my amendment, the Minister described it as supplementary. Well, it may be supplementary, but it is very consequential, because it provides that the Government can make any consequential provision that is a result of this Act, and that consequential amendment can apply both within and outside the UK. It is very significant, even though the Minister may describe it as supplementary.

For that reason, and to provide a more comprehensive view of the Act, as it will be in due course, I wish to test the opinion of the House on Amendment 80.

21:24

Division 5

Ayes: 73

Noes: 141

21:34
Amendment 81
Moved by
81: Leave out Clause 56.
Member's explanatory statement
This amendment is consequential on Lord Sharpe’s new Clause (Reviews: general). The new Clause provides for reviews of Part 2 and other provisions by the independent reviewer appointed under the new Clause, superseding clause 56.
Amendment 81 agreed.
Schedule 12: Fingerprints and samples
Amendments 82 to 84
Moved by
82: Schedule 12, page 175, line 15, at end insert “or, in Northern Ireland, Article 53(1) of the Police and Criminal Evidence (Northern Ireland) Order 1989 (S.I. 1989/1341 (N.I.12))”
Member's explanatory statement
This amendment adds a reference to Northern Ireland legislation to a defined term.
83: Schedule 12, page 175, line 17, at end insert “or, in Northern Ireland, Article 53(1) of the Police and Criminal Evidence (Northern Ireland) Order 1989 (S.I. 1989/1341 (N.I.12))”
Member's explanatory statement
This amendment adds a reference to Northern Ireland legislation to a defined term.
84: Schedule 12, page 176, line 28, at end insert “or, in Northern Ireland, Part 6 of the Police and Criminal Evidence (Northern Ireland) Order 1989 (S.I. 1989/1341 (N.I.12)) (see Article 53(1) and (3) of that Order)”
Member's explanatory statement
This amendment adds a reference to Northern Ireland legislation to a defined term.
Amendments 82 to 84 agreed.
Amendments 85 and 86
Moved by
85: After Clause 63, insert the following new Clause—
“Reviews: general(1) The Secretary of State must appoint a person (the “independent reviewer”) to review the operation of—(a) Part 1, except section (Offences under Part 2 of the Serious Crime Act 2007);(b) Part 2;(c) Schedule 3 to the Counter-Terrorism and Border Security Act 2019, except the functions of the Investigatory Powers Commissioner under Part 1 of that Schedule.(2) The independent reviewer—(a) must carry out a review of the operation of those provisions for each calendar year (an “annual review”), and(b) may carry out such other reviews of the operation of any of those provisions as they consider appropriate.(3) An annual review must be completed as soon as reasonably practicable after the calendar year to which it relates.(4) The independent reviewer must, by 31 January in each calendar year, inform the Secretary of State what (if any) reviews under subsection (2)(b) they intend to carry out in that year.(5) The independent reviewer must send to the Secretary of State a report on the outcome of each review carried out under this section as soon as reasonably practicable after completion of the review.(6) On receiving a report under this section, the Secretary of State must lay before Parliament—(a) the report (but not any material removed under subsection (7)), and(b) a statement as to whether any material has been removed under that subsection.(7) The Secretary of State may, after consulting the independent reviewer, remove from the report any material whose publication the Secretary of State thinks would be contrary to the public interest, or prejudicial to— (a) national security,(b) the prevention or detection of crime,(c) the economic well-being of the United Kingdom, or(d) the continued discharge of the functions of any public authority whose activities include activities that are subject to review by the independent reviewer.(8) “Public authority” means a public authority within the meaning of section 6 of the Human Rights Act 1998, other than a court or tribunal.(9) The Secretary of State may pay to the independent reviewer—(a) expenses incurred in carrying out the functions of the reviewer under this section, and(b) such allowances as the Secretary of State determines.”Member's explanatory statement
This new Clause provides for independent review of Parts 1 and 2 of the Bill, and Schedule 3 to the Counter-Terrorism and Border Security Act 2019. It is intended that this new Clause, together with new Clause “Reviews of detention under Part 1” will form a new Part of the Bill after Part 2.
86: After Clause 63, insert the following new Clause—
“Reviews of detention under Part 1(1) An annual review under section (Reviews: general)(2)(a) must in particular consider compliance with the relevant requirements in relation to persons detained under section 27 by virtue of a warrant of further detention under Part 6 of Schedule 6.(2) The relevant requirements are requirements imposed—(a) by or under Parts 1 to 5, and paragraph 45, of Schedule 6;(b) by any relevant code of practice under section 66 of the Police and Criminal Evidence Act 1984 or Article 65 of the Police and Criminal Evidence (Northern Ireland) Order 1989 (S.I. 1989/1341 (N.I. 12)).(3) The independent reviewer must ensure that a review is carried out into any case where—(a) a person is detained under section 27 by virtue of a warrant of further detention under Part 6 of Schedule 6, and(b) the period specified in that warrant is further extended under paragraph 44 of that Schedule to a time that is more than 14 days after the person’s arrest under section 27.(4) A review under subsection (3) may be carried out by the independent reviewer or by another person.(5) The independent reviewer must ensure that a report on the outcome of a review under subsection (3) is sent to the Secretary of State as soon as reasonably practicable after completion of the review.(6) Section (Reviews: general) (6) to (8) applies to a report of a review under subsection (3).(7) The expenses mentioned in section (Reviews: general)(9) include any expenses incurred by the independent reviewer in ensuring that another person carries out, and reports on, a review under subsection (3).(8) “Independent reviewer” has the same meaning as in section (Reviews: general).”Member's explanatory statement
This new Clause makes provision about independent reviews of the powers of detention in Part 1 of the Bill.
Amendments 85 and 86 agreed.
Consideration on Report adjourned.

Official Controls (Northern Ireland) Regulations 2023

Wednesday 1st March 2023

(1 year, 9 months ago)

Lords Chamber
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Motion to Annul
21:35
Moved by
Lord Dodds of Duncairn Portrait Lord Dodds of Duncairn
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That an Humble Address be presented to His Majesty praying that the Official Controls (Northern Ireland) Regulations 2023 (SI 2023/17), made on 11 January and laid before the House on 12 January, be annulled because (1) they are injurious to the integrity of the United Kingdom’s Internal Market given that the Protocol on Ireland/Northern Ireland has not been replaced by new arrangements, (2) they thereby violate the New Decade, New Approach agreement, by giving effect to a customs and sanitary and phytosanitary border that divides the UK and treats Northern Ireland like a foreign country, (3) they seek to protect the integrity of a legal regime resulting from the imposition of laws in 300 different areas by a polity of which Northern Ireland is not a part and in which it has no representation, (4) they protect the integrity of a legal regime that undermines the 1998 Belfast Agreement, as amended by the St Andrews Agreement, which affords the people of Northern Ireland the right “to pursue democratically national and political aspirations”, given that the people of Northern Ireland can no longer stand for election to pursue democratically national and political aspirations in relation to the said 300 areas of law.

Relevant document: 26th Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)

Lord Dodds of Duncairn Portrait Lord Dodds of Duncairn (DUP)
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My Lords, I am glad to be able to rise, eventually, tonight to move the Motion standing in my name on the Order Paper. I want to place on record my gratitude to the Minister for the discussions that we have had about these regulations, and for the time he has given to me to discuss these matters and his availability. They may appear to be technical in nature but they have enormous political and constitutional ramifications. This is an extremely important matter, and I know the Minister is aware of the sensitivities around all this. That may be one of the reasons why the regulations are being brought forward only now.

I have tabled this Motion in order to ensure that we have a debate and to have some scrutiny on the significant development of the Irish Sea border. This arises under the provisions of the European Union (Withdrawal) Act 2018 and the Northern Ireland protocol. It would be fairly strange indeed if such a measure were to pass without debate either in your Lordships’ House or in the other place. Given the time that has now elapsed since the tabling of the SI, I am not sure it will be debated in the other place at all, and so this the only opportunity to raise these matters in Parliament—and it is a matter of extreme importance.

The regulations allow the Secretary of State to do anything he or she

“considers appropriate … in connection with the construction of facilities”

in relation to official border control posts, despite this being a devolved matter. It is another example, in the long line of examples that we have had recently of the Government intervening in the devolved settlement when it suits them. There are many other matters, as your Lordships will realise, that are of importance in Northern Ireland on which, even when there is an agreed position among political parties, the Government will say that they are not going to intervene because it is a devolved matter—even with the Assembly not sitting. However, on other occasions they decide to step in. It is hardly an argument for the necessity of restoring the Assembly, I have to say. It would appear that, even if the Executive were to be restored, the powers taken by the Secretary of State would remain, so there would be a co-authority: the power of the Minister in Northern Ireland and the power of the Secretary of State. I would be grateful if the Minister could clarify whether, in the circumstances of the Assembly’s restoration and the Executive’s reformation, the powers would revert to the Northern Ireland Executive alone.

The regulations also allow the Secretary of State to direct the competent authority in Northern Ireland

“to recruit and employ … staff to implement Article 64 of the Official Controls Regulation”,

which applies because of the Northern Ireland protocol. The Secretary of State in a Westminster department can direct the likes of Belfast City Council, the Health and Safety Executive or whomever to employ staff in Northern Ireland. In making such directions, will there be accompanying resources to fund and sustain them for as long as they are in place? Undoubtedly, this will put considerable extra burdens on those bodies.

The Explanatory Memorandum states:

“These powers will be necessary to implement either a negotiated solution with the European Union, or to implement the Northern Ireland Protocol Bill”.


Well, the Explanatory Memorandum did not last long as far as the latter point is concerned. The regulations are brought forward under Section 8C of the European Union (Withdrawal) Act 2018, as amended by the European Union (Withdrawal Agreement) Act 2020. That section gives power only to make regulations as appropriate in relation to the current protocol on Ireland/Northern Ireland in the withdrawal agreement. The basis for these regulations is the legal implementation of the current protocol, yet that is not mentioned at all in the Explanatory Memorandum. Why was that left out?

That brings me to the heart of the true significance of this legislation. In making his presentation on his new deal in the other place on Monday, the Prime Minister was challenged on how to square his assertion that the published framework document removes the border down the Irish Sea with the commitment in these regulations to build border control posts. The Prime Minister responded that

“the border posts are there to deal with checks in the red lane. That was something that was always envisaged. It is something that we always said that we would do. It is right that people should not be able to try to smuggle goods into the Republic of Ireland via Northern Ireland. That is why those posts, those inspection facilities, are there. The investment in them is to make sure that we can do those checks properly, as we assured the European Union that we would do. Part of having a functioning green lane is having enforcement of the red lane.”—[Official Report, Commons, 27/2/23; col. 589.]

I quoted that in full because the words are significant, and I will come on to deal with them later. I surmise that this line has been given to the Minister replying to this debate, but I very much hope it has not because, with respect, it misses the point, for reasons that I will set out.

As a matter of general principle, we should, as a sovereign country, proceed on the basis that, if we want to protect the integrity of our single market, that is our responsibility and we should foot the bill for that. If another country wants to protect the integrity of its single market, that is its responsibility and it should foot the bill for that. I do not believe that there is an example anywhere in the world of a country building border control posts for the purposes of protecting the single market of another country. I suppose a country might seek to justify spending its taxpayers’ money to build border control posts to protect the integrity of the single market of another country if this also protected the integrity of its own single market. But in relation to Northern Ireland, far from doing that, the provision of these border control posts actually disrupts the UK single market for goods and replaces it with a Great Britain single market for goods and an all-Ireland single market for goods.

Another question arises if we are building border control posts to protect just the EU single market: why is it necessary that they be built in each one of Northern Ireland’s ports, when you could just as easily build one away from the ports altogether, as suggested by many hauliers with experience of these matters? That is what happens elsewhere. The plan, for instance, for goods coming in via Liverpool and Holyhead is for them to be sent to a single inland border control at Warrington, not at the ports.

21:45
The construction of border control posts at each of our ports in Northern Ireland is being done because the controls cover not just goods being moved from Great Britain into the EU via the Irish Republic, as some of the spin would suggest and as the Prime Minister laboured in his remarks on Monday; they are being constructed because companies wishing to trade with Northern Ireland from Great Britain must still fulfil European Union requirements, including a level of checks. Great Britain is still treated as a third country as far as Northern Ireland is concerned under the new arrangements, and the Irish Sea border has not been removed.
The impression from the new deal is that it creates a situation with green lanes and red lanes, and that the red lanes are solely for goods going to the Republic of Ireland. But when you study the detail, it is clear that not only goods going to the Republic of Ireland will be subject to border control checks. Businesspeople have pointed out to me that of course we live in a free market economy, and, in this context, it is not possible to know what will happen to goods after one transaction in a single market: they may remain in the single market; they may be sold to someone outside Northern Ireland. Hauliers say that, often, around 80% of the goods they carry from Great Britain to Northern Ireland will stay in Northern Ireland, but 20% will end up in the Republic. In many cases, they have no way of knowing; this means that they are not eligible for the trusted trader scheme to use the so-called green channel, and that they will be subject to full red-lane checks, as if trading with a foreign country. That is why, contrary to what the Prime Minister told us, the border remains in place for taking goods to Northern Ireland that end up staying in Northern Ireland.
Moreover, the European Union questions and answers on the framework document make it clear that, if the EU does believe that the trusted trader scheme meets its expectations, it can revert to insisting on full border checks for everything, as if trading with a foreign country, thereby removing the green lane altogether. The new deal keeps the reality of the Irish Sea border completely in place. It will mitigate its effect—not remove it—through a reduction in bureaucracy, but only for companies which can declare for certain that none of their goods will go over the border. So border control posts are necessary, not just for goods destined for the Irish Republic but for all goods where there is any uncertainty about their end destination, such where one cannot be absolutely sure they will not end up in the Republic. That is not free trade within the United Kingdom.
Let us look at the green lane now being suggested. The European Union questions and answers on the Windsor Framework are very clear that green-lane goods are still subject to customs. That clearly demonstrates the ongoing reality of the border down the Irish Sea. The document says:
“Goods moved by trusted traders in Northern Ireland will be subject to dramatically simplified”—
but still existing—
“customs declarations … including a … number of data (21 data elements instead of more than 80 data elements normally required for a standard customs declaration).”
The paperwork may be simplified, but it is still customs paperwork; it still entails costs and declarations that we are leaving one jurisdiction for another—and this is for trade within the United Kingdom. There is no customs paperwork for moving goods between Wales, Scotland or England, because there is no customs border between Wales, Scotland or England. There was no customs paperwork for moving goods between Wales, England Scotland and Northern Ireland before 1 January 2021.
Moreover, if you qualify for the trusted trader scheme and are green-laned, you are still potentially subject to checks. Again, the European Union questions and answers on this matter, which are far more informative than anything the UK Government have published thus far, state:
“From 1 October 2023, the … rate of identity checks will be … 10% of all consignments of retail goods.”
That includes goods moving in the green lane from one part of the United Kingdom to another. So it is very clear that the purpose of the border control posts is not just to provide red-lane checks for goods moving to the Republic of Ireland but to cement the reality of a customs border between Great Britain and Northern Ireland, so that trading with Northern Ireland becomes more like trading with a foreign country.
If you are green-laned, you will still be subject to customs paperwork and checks. If you cannot be green-laned because some of your goods might go to the Republic, then you will be red-laned. If the EU loses faith in the trusted trader scheme, you will be red-laned. It is the European Union, not the Northern Ireland Assembly or the UK Parliament, that decides. The impact of these border controls will not be to give effect, primarily, to a border control for the Northern Ireland-Irish Republic border at a distance; it will also be to give effect to a border between Great Britain and Northern Ireland for trade. The undergirding reality here is the endurance of an Irish Sea border, and the border control posts mandated by these regulations are necessary to give effect to it: that is why we oppose these regulations.
There may be a temptation to look the other way and say, “Well, this is only Northern Ireland”, but let us not kid ourselves about the future of the United Kingdom as a whole. If the Government make it clear they are happy to accommodate a border down the Irish Sea so that Northern Ireland can remain in the EU for these purposes, it makes it very difficult to argue against accommodating a border between England and Scotland. This is an important moment in the history of these islands and the Government, noble Lords and all elected representatives in Northern Ireland need to think very carefully about the massive implications flowing from how we respond to these matters at this time. I genuinely hope that the Minister will be able to provide reassurances that go some way to assuaging people’s concerns in this area. However, given what we know is actually in the regulations before us, and the justification for them, I fear that I will be disappointed. However, we will be listening intently, and I think that all who believe in our union back home will be listening intently as well.
Lord Bruce of Bennachie Portrait Lord Bruce of Bennachie (LD)
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My Lords, in many ways this Motion, as the noble Lord will acknowledge, has been somewhat overtaken by events, but he is commenting on the events. It was clear from the outset that Boris Johnson’s oven-ready deal was anything but; we know that now. The claim that there would be no restrictions or paperwork on goods between Great Britain and Northern Ireland has never been true, as the Government’s website clearly showed on the day that Boris Johnson made his preposterous speech during the 2019 election.

I say to the noble Lord that I understand the way unionists see the friction he has outlined, the limitations on movements and transactions, as undermining their sense of identity. I understand that, but I do not understand why the DUP was so adamant in its determination to secure Brexit, when the EU had actually created an umbrella that allowed freedom of movement all ways. To leave the EU and expect there to be no paperwork, which is what I think the DUP wants, was never achievable. I have said that on a number of occasions in debates on this House: it was always possible, right from the outset, to secure reduced friction—the noble Lord has acknowledged that the agreement has done that—and the idea of green and red channels was in the frame from the beginning; it has been discussed for several years.

What was not on offer was trust and good will. What we were subjected to was just cheap, xenophobic rhetoric. Ursula von der Leyen’s relationship with “Dear Rishi” shows how the atmosphere has changed, and a change in the atmosphere is somewhat crucial. I welcome that. I am pleased that the way is now open to secure the UK’s associate membership of Horizon and to begin to explore, I hope, how the trade and co-operation agreement can also be renegotiated, in a similar way, to smooth the way for reduced friction for trade between the rest of the UK and the EU. It was, after all, astonishing and revealing that the Government were boasting yesterday of the privileged position of Northern Ireland as being in both the UK and the EU single markets, something that many people in the rest of the UK wish they had on offer.

It is undeniable that the protocol came about from a mess of the UK’s—specifically, Boris Johnson’s—own making. The ideology that has seized this Conservative Government has caused them to inflict more damage in more ways and in a shorter time than probably any Government in history. That said, I ask the DUP to consider carefully what it does next. The noble Lord, Lord Dodds, has been open in his criticism but careful not to say what he will do next.

All politics is surely about compromise; I would say that Irish politics is especially so. You can claim that playing hardball got us here, but I would refute that. Playing hardball stalled progress and engagement. There is a clear indication that the protocol Bill, far from pressurising a deal, stood in the way of it, and its abandonment is a victory for common sense. Whatever its reservations about the agreement, I suggest that the DUP should admit, privately if not publicly, that it is far better than it would have expected, even if it is not happy with it. The Prime Minister has said that it cannot be renegotiated, though there may be room for clarification here and there. I believe that the majority of people in Northern Ireland, although they may care little for the detail, will welcome an end to the deadlock that has plagued them.

I also suggest to the DUP that, over time, when this agreement is implemented, businesses with interests in Northern Ireland and the public of Northern Ireland will see that the removal of uncertainty creates economic space and a better climate. If that goes ahead and is demonstrated, the DUP will be exposed as people who opposed that improvement in circumstances in the Province. It may find that there is a price to pay.

On the restoration of the Assembly and the Executive, I have contested that there has never been a justification for the DUP withdrawal, any more than there was for the Sinn Féin withdrawal on a previous occasion. Two wrongs do not make a right. The people of Northern Ireland have voted and the DUP did not win. It is entitled to stand up vigorously for its supporters, and it does, but it is not democracy to deny the majority of citizens the right to be represented and to see government tackle the manifold challenges we all face. The protocol and certainly this new agreement pale into insignificance compared with the challenges that most people face in their everyday lives.

It has also been pointed out that one of the safeguards in this deal is the Stormont brake, but that requires the existence of an Assembly and Executive. I am hearing rather mixed messages about what different parties think about it, but I believe it was put in precisely for the benefit of the concerns that the DUP had expressed. If it is not very happy with it, maybe the easiest thing to do is remove it.

The noble Lord, Lord Dodds, referred to the Scottish border, which is of some concern to me—I cross it very regularly. In reality, Brexit has created a problem for the DUP—although by campaigning for Brexit it somewhat brought that on itself—but it has also created a problem for Scottish nationalists. Their ambition was an independent Scotland somehow rejoining Europe, which we all know would be long drawn out, difficult and on unknown terms and would inevitably lead to a hard border between Scotland and the rest of the UK. All these things suggest that the way forward for the UK is to recognise that this first step is the beginning of an improvement in relations with the EU and sets the potential for us to rebuild practical relations—Brexit excepted—that enable the minimum friction, not just between Great Britain and Northern Ireland but between the United Kingdom and the European Union, and uncertainty to be removed and businesses to flourish.

While I understand the reason for this Motion, the DUP should reflect very carefully. If it remains recalcitrant, the danger for it is that the rules in Northern Ireland may have to change, and the mood may change too. The DUP may be very confident of its base, but it should remember and respect that it is not a majority. There are no majorities in Northern Ireland. The only way that Northern Ireland will progress is if people are prepared to accept compromise. The DUP has made its tough stand; now is the time to recognise that compromise needs to be secured.

Lord Lexden Portrait Lord Lexden (Con)
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My Lords, that was an interesting speech on the Windsor Framework, but I did not hear any comments on the very serious specific issues that were raised by the noble Lord, Lord Dodds? Have the Liberal Democrats nothing to say about those extremely serious points?

22:00
Lord Bruce of Bennachie Portrait Lord Bruce of Bennachie (LD)
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I acknowledged that there were points of issue and clarification; I understand them. My point, however, is that an agreement has been reached which encapsulates some of those concerns. The choice is whether we accept the agreement or whether we use those grievances to reject it and consequently leave Northern Ireland in a double limbo, denied democracy in terms of a Government and an Assembly and continuing to have the uncertainty of a non-achievable protocol. I am giving some credit, for heaven’s sake, to this Government, who have taken a common-sense approach to try to secure something which many people did not think would be achievable—I personally always thought it was and we could have done it a lot earlier. I think they are whistling in the wind if they think that raising those objections is going to change the basis of what has been agreed by any fundamental and significant amount. I think I have acknowledged that, and I am suggesting we face political reality.

Baroness Hoey Portrait Baroness Hoey (Non-Afl)
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My Lords, I support the noble Lord, Lord Dodds of Duncairn, and thank him for giving us this real opportunity, which we have not yet had, to discuss what came out earlier in the week from the Prime Minister and the EU. I say right away that it is very interesting to hear from so many people, not just here but everywhere, how awful things were and how they were not working, including in the framework document itself, where every single item starts with an attack on the protocol. It is very interesting because some of us have been saying that for a very long time and got quite a lot of pushback from Ministers and others, who kept saying, “Oh, no, nothing can ever change; the protocol has to stay.” I say gently to the noble Lord who has just spoken that his party in Northern Ireland, which I think has a very strong relationship with the Alliance Party, went down to Dublin with Sinn Féin during the Covid regulations to call for the rigorous implementation of the protocol. I may have missed it over the last few days, but maybe the Alliance Party has now decided to apologise for the nonsense of calling for rigorous implementation of something which has now been accepted by everyone to have been wrong and did not work.

I have sympathy for the Minister, the noble Lord, Lord Benyon. I know there will be lots of things coming up tonight that will not really be his direct responsibility, but I think he will understand that those of us from Northern Ireland feel that we have to take every opportunity to make sure that our grievances and our strongly held views, particularly on the issue of sovereignty, are raised at every opportunity. I agree with everything said by the noble Lord, Lord Dodds, and I will not go over the specific issues on some of the pitfalls of these green and red lanes. It is sufficient to say that it was disappointing that our Prime Minister so vigorously implied that now it was all sorted; the green lanes had made a great difference, and there were going to be no checks—I think he actually used the words “no checks”.

I have spent a bit of time reading—I hope, like other noble Lords—what the EU said just after the framework document was published. I have to say, it is very different in every single aspect. You look at what the Prime Minister said, you then compare it to what the European Union is saying, and it is very different indeed.

I am afraid that this means that once again there is an over-positivity coming through from the Government, and I understand that—they want to show that they have made real changes. The reality, as the noble Lord, Lord Dodds, has pointed out is that they have not made real changes, and as each hour and each day passes, and the detail of what has been agreed is examined and scrutinised, we find more and more that it does not live up to reality.

I look forward very much—I think it will be around now or perhaps later this evening—to the first legal opinion. There will be many legal opinions over the next week or two, and it is right that the Prime Minister has said that there is time for people to study this, but the first legal opinion will come out tonight on the legality—particularly relating to the Act of Union, but on other aspects too. We are going to see some very strong legal opinions that will show that the Prime Minister has overplayed this very much.

I want to say one further thing on the green lanes, because it is important. If a trader in Bristol trades with Birmingham, and then decides the next day to trade with Belfast—part of the same United Kingdom—they must be able to trade in exactly the same way. That is not going to happen: the green lanes are going to require around 30 documents to be filled in, and then the checks that will happen will depend very much on what is in the load. If it were a genuine green lane, we would not need a green lane; we would simply be sending goods as we do to any other part of the United Kingdom.

The noble Lord, Lord Dodds, has gone into that in detail, and I hope that people have the opportunity to listen to some of those people who are engaged in sending lorries back and forward, what they have to go through and how this will not make very much difference. Indeed, what it will do is cause a huge divergence of trade, something that was very important to the internal market within Great Britain and Northern Ireland.

I want to mention a couple of things and I ask the Minister that, if he cannot answer them, perhaps he will pass them on to someone who can. I know that the Northern Ireland Office may be finding it difficult to deal with all the questions that are going in because they do not necessarily have the answers, but somebody must have this answer because somebody has agreed and signed this agreement. For example, we now understand that Northern Ireland consumers who are buying products online, which many people do, will be able to do so only if the seller is prepared to fill in customs declarations. I ask the Minister if this is right.

If a new car exported for sale by a Northern Ireland dealer will have to be made to EU standards, not UK ones, that does not seem to me like “no Irish sea border”. At the moment the regulations and standards might well be similar, but eventually there will be divergence. There is absolutely no point to us having left the European Union if we do not take advantage of the fact that we can diverge and do things differently, and live up to the standards of our own country. So could the Minister confirm whether this is correct?

Now for something that is perhaps more in his line of understanding: we understand that the GB-Northern Ireland seed potato ban—the Minister looks more interested when I talk about seed potatoes—is not totally reversed. They will be able to be traded from grower to grower, but direct-to-consumer and retail packs are still excluded. So people who I know who grow small amounts and get their seeds from Great Britain will still not be able to have that without all the bureaucracy and paperwork that already exists. I have asked about that, and I know the noble Lord, Lord Caine, who is here, has been very kind in seeing if he can find an answer to it.

Something that matters a lot to people in Northern Ireland are their pets. We have been told by Rishi Sunak, the Prime Minister, that—great—everybody can take their pets, but they might need a little document. In fact, what the EU says is that people will be able to travel with their pets from GB to Northern Ireland—is it not good of the EU to let us do that?—with only a simple pet document needed and a declaration by the owner that the pet will not go into the EU; that is into the Republic of Ireland. How is that going to work? Is it not absolutely amazing that our own country is saying that you can take your pet to Wales or Scotland but you cannot take it to Northern Ireland without all this bureaucracy and hassle?

One of my favourite ones, which I have brought up before—again, I had hoped that this declaration might actually have the answer—and which also matters to people, although it is not a huge issue, is the question of duty-free. Since we left the European Union, duty-free has been restored to Great Britain, but it has not, of course, been restored to Northern Ireland. So, if you fly from Belfast to somewhere in the EU, you would expect to get duty-free, as you could if you flew from Birmingham, Manchester, Glasgow or Cardiff. But you cannot, because we are still in the EU single market. Then you might say, “Great, so I’ll be able to get from Belfast to London, or Belfast to Birmingham”, as you can from Dublin to London. “Oh, no”, says the Treasury, “you can’t do that either”. Nothing in this document will say whether that has now been changed. We cannot just be left in this kind of limbo situation where we are allowed to do something when it suits the European Union but are not allowed when it does not suit it. So that is another question: what is the situation with duty-free?

I am not going to mention state aid. For anyone that is interested in that, if they look at the detail, they will see that the state aid issue has not been sorted—and neither has the VAT issue. There is a huge number of things that have not been sorted in any way to make things better.

Some of your Lordships may know Brendan O’Neill; I am going to give him a bit of publicity. He wrote a most brilliant article in something called Spiked, which I am not sure is regular reading for your Lordships. He wrote in a very amusing but serious way about what the framework document is doing. He talks a lot about the body language between the Prime Minister and the President of the European Commission and the fact that they obviously really like each other and get on well. He said:

“Behind the niceties, what we had here was the prime minister of a supposedly free nation expressing child-like glee that a foreign oligarchy had granted him permission to enact certain policies within his own borders.”


He then goes through all the things that the Prime Minister was welcoming. For example, he has welcomed the fact that, in our own country, we are now going to be allowed to have medicines travelling properly throughout the United Kingdom.

I end by saying that I am sorry that, although everyone who is here does care about Northern Ireland, there are obviously a lot of noble Lords and Members of the other place who are interested in Northern Ireland only when something terrible has happened or when something like this is causing problems for the Government. I ask your Lordships to read the document the European Union has come out with. I am afraid that it shows that our Prime Minister has overegged the pudding—I think that is the right expression—and, by doing so, he has actually treated Northern Ireland people as if they are just that little bit stupid and that they will not understand it.

I got that feeling a bit from the noble Lord, Lord Bruce —I am sorry to be seeming to attack him again, but his attitude was one of how terrible it is of the DUP to be even thinking it might not be go back into government. But it is very clear that, if the DUP does go back into the Northern Ireland Executive, it is going to have to implement this protocol. Call it what you like, but the basis of the protocol is still there and the fundamental issue of sovereignty is still there. This issue has not been solved, and this framework document—to which I refuse to give the name it has been given by the Prime Minister—will not solve the issue. I appeal genuinely to all noble Lords to read the EU document and then compare it to what our Prime Minister has said.

22:15
Lord Moylan Portrait Lord Moylan (Con)
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My Lords, I express great sympathy with the Motion standing in the name of the noble Lord, Lord Dodds of Duncairn. I hope to do so briefly, and I will be assisted in that by the fact that, unlike other noble Lords, I am not going to talk about the Windsor Framework—which, after all, has appeared only in the last two days, while this statutory instrument has been on the table for several weeks. I am not, in fact, really going to talk about Ireland or Northern Ireland; I am going to talk briefly about the United Kingdom. I like my noble friend the Minister and I respect him for the work he does for the Government and the country at large, so he will understand that, as other speakers have said, these remarks are not intended to refer to him in any personal way at all.

It is objectively a humiliation for the Government to send up a Minister of the Crown to this House to ask permission to take powers to erect border infrastructure between one part of our country and another. It is a humiliation that is unprecedented, as far as I am aware, in any other country. I cannot think of another country that would accept it for the convenience of a foreign power. It is a humiliation that is unprecedented in our history as a United Kingdom, certainly since 1801. It is a humiliation that would astonish even the generation of politicians who, in the 1960s and 1970s, argued so strongly that we should enter the European Union, the Common Market, or whatever name it was known by at the time. It is an illustration of the constitutional havoc that our 50 years’ wrong-headed membership of the European Union has wreaked upon this country. I ask my noble friend, who has a strong and long-standing connection with Berkshire, if he would accept and advocate that the people of Berkshire might be surrounded by border infrastructure separating them from the rest of the country, and how he would expect them to feel and react if that were asked of them.

This instrument has been on the table since long before the Windsor Framework came to light on Monday. When that came to light, and the very positive words of our Prime Minister were uttered about how the border would become effectively invisible or painless—I am not quoting him, but his words were to that effect—I wrote to my noble friend and asked if I could assume that he would be withdrawing this instrument and deferring it because the situation had changed, according to the Prime Minister, in a very dramatic way. I do not accuse the Minister of rudeness in not replying to me because Ministers never reply to Conservative Back-Benchers on queries like that. I did not expect a reply, it might be said, but I put it to him now that he has the opportunity to defer this. He has an opportunity to stand at the Dispatch Box and say: “We can put this to one side for a moment; we need to look at the implications of the Windsor Framework before we press ahead with this”.

These powers do nothing to the credit of the United Kingdom. They do nothing to the credit of our national pride and self-belief. They do nothing to help the people of this country in working together as one united realm.

Lord Hannan of Kingsclere Portrait Lord Hannan of Kingsclere (Con)
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My Lords, I find it rather odd that no one has responded to the opening point from the noble Lord, Lord Dodds of Duncairn, about the propriety of transferring these powers from elected legislatures to Ministers. I say I find it odd because I have sat here, as have a number of your Lordships, night after night, during the passage of the Northern Ireland Protocol Bill and the retained EU law Bill, listening to Peer after Peer from the Opposition Benches howling about Henry VIII powers and the absolute constitutional monstrosity of transferring powers from Parliament to unelected Ministers. Great, I thought, joy shall be in heaven more over one sinner that repenteth than over 99 just men that have no need for repentance—how wonderful that there is now this great interest in parliamentary sovereignty. You might almost say that Brexit is already working, and that people who had previously shown no great concern for the supremacy of our legislature now care about it very much. I think I may have been premature in saying that.

Here we have exactly such an example—you may say that it is dubious constitutional propriety but you cannot say that this one is okay and all the others were wrong—and yet I look on empty Opposition Benches and hear not a single voice raised to complain about executive overreach. Perhaps we have a little bit further to go before we can say that it has worked.

Lord Morrow Portrait Lord Morrow (DUP)
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My Lords, I thought by now that this House would be acutely aware of how Northern Ireland is governed, but obviously it is not. We have heard comments here tonight that allude to majoritarianism. Northern Ireland is not governed that way, nor has it been. As a matter of fact, from the time I came of voting age Northern Ireland has not been governed that way.

Sinn Féin pulled down the Northern Ireland Assembly for a period of three years. I have been in this House since 2006—I know I do not look that age but I am—and I have never ever heard a single word from the Benches opposite in condemnation of what Sinn Féin had done.

Lord Morrow Portrait Lord Morrow (DUP)
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Hold on; I did not hear it —and I certainly did not hear it from the Liberal Benches.

We need to get this into our heads. What will happen if you leave one large section of the community behind, as has been advocated here tonight and was advocated from the same Benches in an earlier debate when it was said that if we do not get on with it, Dublin is waiting and will take you over—another threat? It is time that this House, and in particular the Opposition Benches, acted like adults. Do your Lordships not read any history at all? Do you not understand that we had 3,500 people slaughtered on our streets? Does it not dawn upon your souls that we do not need or want to go back to that? Please: we do not govern by majority.

There is this idea of introducing a new voting system and leaving unionists behind—they are naughty boys and girls over there, so we will leave them behind. What happens when it turns round the other way? The noble Lord, Lord Bruce, is a very intelligent man, but he needs to start looking at reality. When you leave one community behind in Northern Ireland, it is a recipe for disaster. It will not work. Just because Sinn Féin has got a few extra seats and the unionists—who we represent the majority of—have not, people think that this is the time to move on. That is a recipe for disaster. Anyone who pushes down that road will live to regret it, and will see that it just does not work, even though it is the other way round. I hope the noble Lord takes cognisance of that.

Many pieces of secondary legislation are introduced without so much as a murmur from the public. It is striking that these proposals resulted in 18 submissions being made to the Secondary Legislation Scrutiny Committee, which published them. Together they amounted to a 48-page document. I am sure that all Members opposite and elsewhere have read them. Most of these submissions are from hauliers, expressing deep-seated concerns about the building of border control posts to service a border within the United Kingdom—a point adequately made by the previous speaker.

A number of submissions from beyond the hauliers made the important point that the purpose of these border control posts was to uphold the integrity of the different legal regime that pertains to Northern Ireland. This is because we are now subject to laws in some 300 areas which are different from those pertaining to the rest of the United Kingdom. I have never heard the Lib Dems refer to that, but maybe I missed it too. Moreover, these laws are the result not of devolution, but of an imposition on us by a polity of which we are not part and on which we have absolutely no representation. These border control posts therefore constitute the border of our disfranchisement; we have been disfranchised. I hope that Members will take note. It is their purpose to protect and uphold the legal consequences of our disfranchisement.

It is quite extraordinary that we should be considering such provisions today, less than two months from the anniversary of the signing of the Belfast agreement, which has now been in existence for almost 25 years. It has had its hiccups and its difficult days, but what novel agreement does not? In signing that agreement, the state parties—the United Kingdom and the Republic of Ireland—committed themselves to upholding the rights of the people of Northern Ireland to pursue their democratic, national and political aspirations at the level at which those rights were enjoyed at that time. In 1998, the people of Northern Ireland could stand for election to make all the laws to which they were subject, or they could vote for fellow citizens to represent them. Those rights were upheld until 1 January 2021, when the state parties turned their back on that obligation, approving a dramatic erosion of our democratic rights. Today, the law shouts out that the people of England, Wales and Scotland are worthy of the right to make all the laws to which they are subject, just as it shouts out that the people of Northern Ireland are worthy of the right to make only some of the laws to which they are subject. It is the job of these regulations to hold the integrity of the legal regime resulting from our humiliation.

In the last couple of days, we have heard about the Stormont brake which, it is suggested, will fix the democratic deficit. Doubts have already been expressed about whether it will ever be possible to use the brake, or even to find it. This all misses the point. Citizenship of the United Kingdom is about citizenship of a parliamentary democracy wherein we can stand for election and make all the laws to which we are subject, or can elect fellow citizens to undertake this task for us. If we have concern about a Bill, we can contact our legislator and ask for a meeting. They can represent our concern in Parliament in the making of the law, by tabling amendments and making the case for the rest of the Parliament to change what they believe is necessary.

22:30
In short, citizenship in the UK is about being part of a process wherein the laws to which you are ultimately subject are made. The Stormont brake seems to be about something entirely different. It appears intent on cementing in our second-class citizenship, disinheriting us from the right to be involved in making the law to which we are subject in some areas. It appears to say, “You will continue to be subject to laws made for you by a polity of which you are not a part and by a legislator of which you are not a member, and you will have to make do with the opportunity after the law has been made for you to say that you do not like it”. That is not the British political tradition. I sincerely hope that I have misunderstood this brake or that there is something else in the Windsor Framework that addresses the democratic deficit, for the brake does not. If there is not, the purpose of these regulations will be merely to protect the integrity of a legal regime predicated on our disfranchisement.
As noble Lords reflect on the implications of these border control posts, which not only divide the UK but are implicated in the disfranchisement of part of the UK, I commend to their attention a submission made to the Secondary Legislation Scrutiny Committee. It should cause everyone pause for thought. One submission was made by Jack Steele, an 18 year-old who is still in school and whom I have had the privilege of meeting. I will read part of his submission:
“For the last 25 years, my parents and grandparents have enjoyed the right to ‘pursue democratically political and national aspirations’. This right, enshrined in the Good Friday Agreement, bequeathed the citizens of Northern Ireland the right to elect someone on their behalf to legislate and to stand for election themselves, and legislate. My generation, the teenagers and students, the new voters, have had this fundamentally important right, stolen from us. We are devoid of any ability to impact nor influence in the EU’s foreign legislature. This is unacceptable. The purpose of the Good Friday Agreement was to bring about peace, balance and a cessation of hostilities. The importance of maintaining this was absolutely paramount to prevent the scourge of terrorism from once again sparking violence and holding democracy to ransom. As a young person, I have not experienced this violent extremism.
As we approach the 25th anniversary of the Good Friday Agreement, we ought to be mindful that it was intended to stop the hostilities of the day, but also to ensure the proceeding generations would enjoy democratic rights. Article 2 (1) of the Northern Ireland Protocol, outlines a UK Government commitment to ensure the protection of Northern Irish citizen rights and to prevent the erosion of said rights. I fail to understand therefore, why the UK Government are now seeking to implement regulations that would solidify a legal system that is eroding those precious citizen rights, as guaranteed by the ‘right to pursue democratically national and political aspirations’ in the ‘Rights, Safeguards and Equalities’ section of the Good Friday Agreement.
I understand that these regulations are not directly responsible for the degradation of Northern Ireland’s democracy and citizen rights. However, the regulations are complacent in the perpetual perversion of Northern Ireland’s position, democratic institutions and citizen rights. I find it outrageous that these regulations deem the erosion of my rights as a young person. From my perspective as a young person, these regulations serve as a cog in the oppressive legal machine which is currently steamrolling Northern Irish democracy and citizen rights. This is a grotesque mutilation of democracy, and for me as person, an 18-year-old first time voter to be, this is utterly horrifying to watch the erosion of my rights.
As I have mentioned, I would like to see the importance of my rights restored to an equal footing with that of other members of the United Kingdom. I would like to see the rights which my parents enjoyed for 25 years, delegated to me. I would like to see the continuity of peace and civility rather than violence and disorder. I would like to see the restoration of democracy in Northern Ireland.
I am young and I have a life to live. It’s my desire to see Northern Ireland work and to make a difference. However, I cannot make a difference as the right to elect people to legislate or stand for election myself, has been stripped from my generation.
It is for that reason that I implore the Committee to take my comments into account as a young person, and with the interests of Northern Irish democracy, citizens and the Good Friday Agreement at Heart, that the Committee would also recommend the Lords to oppose this legislation and acknowledge its dangerous potential to protect the continued desecration and degradation of my citizen rights as a young voter.”
So said Jack Steele, an 18 year-old.
Lord Bew Portrait Lord Bew (CB)
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My Lords, I rise to challenge some of the terms of this Motion for an Humble Address with considerable reluctance, because many of the arguments that have been advanced by the noble Lord, Lord Dodds, and the noble Baroness, Lady Hoey, and many of the things said tonight by the noble Lord, Lord Hannan, I still think are totally pertinent, reasonable arguments. I certainly have no question in my mind that the DUP strategy has been effective in withdrawing from Parliament. It was a legitimate strategy to achieve an outcome. The outcome is the White Paper which, though nobody would realise it from anything that has been said tonight, is the most unionist document produced by a British Government since the Ireland Act produced by the Labour Government of 1949. I just remark on that. Nobody who listened to this discussion so far would realise that.

I absolutely take the point made by the noble Lord, Lord Hannan. The other side is quite right to say that this House is very random about Henry VIII powers, essentially according to fashion. For fashionable reasons, it gets very worked up one day about Henry VIII powers but, on another day, if the Henry VIII power falls on the head of the unfortunate DUP, too bad. I absolutely accept that this is a double standard, and there are many other double standards, but let us cut to the quick. I remember the “way forward” document, signed by Peter Robinson, a former leader of the DUP, as far back as 1987, dealing with the Anglo-Irish Agreement of 1985, which was a far sharper dilution of the equal citizenship of the people of Northern Ireland and was far more radical than anything in the current proposals. It was far sharper. That is a simple reality check.

However, for the unionist parties looking at the problem created for them, there is a key sentence in that report—that it can make no sense for the junior partner in a union to be permanently estranged from the larger partner. That is much more important than any of the details, even about seed potatoes. By the way, I am sure that there will be challenge and counterchallenge, and that there will be challenge against what some hauliers have said. I am certain that we are about to enter a debate.

I am pleased by the Act of Union and slightly surprised because, in another life, I wrote the Oxford history of Ireland, which is a 600-page reflection on the Act of Union. I did not know that people were so fascinated by these terms. I did not know that there was such intense feeling and so much understanding from lawyers in Northern Ireland. I did not know any of that. I wish that it had existed when that book came out, as I would be far richer today. I now discover that the world is full of experts on the Act of Union. I am slightly astounded for a variety of reasons; actually, I do not think that is a serious problem.

Regarding diversion of trade, one of the second tests and one of the things that our own figures show is that there has not been a significant diversion of trade as a function of the protocol, even up to now. Presumably there will be even less of that. It is a simple issue. Statistically, there is no argument about diversion of trade. There are many other problems and massive problems about an Irish Sea border. It is a rhetorical phrase, by the way; none of the lawyers really knows what an Irish Sea border is or what a sea border is. Michel Barnier in the EU always insisted that there was none. The phrase has quite correctly entered common use because of the vast range of pettifogging restrictions that have been implemented in the last few years, a large number of which have now gone, so the content of that phrase itself has been seriously diluted, at least.

The most important consideration I have—it goes to the heart of it, because there are many points to be made tonight—is the point that these are unique arrangements. I am not aware that the history of Ireland and its relationship to this country is not entirely unique. To say that these are unique arrangements—“I haven’t heard about anything else like this in the rest of the world”—is frankly not a case against these arrangements. It may be that at the end we decide that they are not worth while and so on, but the fact that they are unique is not in any sense an argument.

Again, to talk about a section of the business class is totally right; as the noble Lord, Lord Dodds, has said, some hauliers have expressed their doubts about how this works. That is entirely correct. It is also entirely correct to say that the Government think that they have good replies in that respect, and this is how the debate will unfold. But the real point is this: you cannot take out one section. If we are going to talk about business classes, they were overwhelmingly in favour of this agreement. Nobody really disputes that. So if the opinion of the business classes matters, then the totality of the business classes and their opinion must also be something that people have to take into account.

But the biggest problem I have with the noble Lord, Lord Dodds, is Part 4 of this Humble Address. I do regret to advance this argument, but I think that it is fundamental to everything that has gone on. He says that what we are asked to do here is to undermine the 1998 Belfast agreement. What has actually happened in Parliament here since the appearance of the May withdrawal agreement—which does not even mention the Northern Ireland Assembly; that is how far we have moved, by the way, to a brake, et cetera—is a dramatic change over a period of years to try to restore the democratic rights of the people of Northern Ireland. There is really no doubt about that huge shift in British thinking. What has powered it is a feeling, first announced on 12 March 2019 by the then Brexit Secretary, that in the view of the Government—it was the first time this was said—they have the right to resile from provisions in the May withdrawal agreement in the light of the prior agreement, the Good Friday agreement, and that the prior agreement counted. That is the beginning of the debate in which the Good Friday agreement, the Assembly, and the democratic deficit have been at the heart of the way that British government thinking has moved.

The Government have now moved very radically to address the problems of the democratic deficit, and they have argued very strongly that their whole thinking behind the production of this new agreement is based on fidelity to the Good Friday agreement. In the May agreement, following the negotiation, frankly and to our great embarrassment—and this is the real embarrassment to us as a nation—we were being laughed at by government officials for the weakness of the negotiation and the fact that we allowed them, as stated by one of them in cold print, to take control and ownership of the Good Friday agreement. It is a joint agreement, but the greater responsibilities in that agreement fall on the government with sovereign powers, which is the United Kingdom Government. Therefore, for a government to do that is the real humiliation.

We have tried to pull back from that, and there is steady progress in the thinking of the UK Government in the period since that statement by the Brexit Secretary on 12 March 2019. It is always on the same lines; the Government said, more and more, that the Good Friday agreement must be respected. This also means, of course, not just that there is an east-west dimension, which was entirely forgotten about in the May withdrawal agreement; it also means that the Government, under Article 1, Paragraph 5, have a commitment to address the long-term alienation of either community and to actually respect the aspirations of the unionist community.

For a similar reason, the noble Lord, Lord Caine, quite rightly introduced an Irish language Act, to address the aspirations and long-term sentiments of the nationalist community, in this House a few weeks ago. The Government are pursuing the same policy with respect to the alienation of the unionist community and this document is the final proof of their efforts to deal with that, but there can be no final resolution to the alienation of the unionist community which in turn alienates the nationalist community.

22:45
The commitment is to equality of esteem. The very arguments that have been advanced in favour of saying to the European Union, “We have to do something in the light of the Good Friday agreement to address the alienation of the unionist community” and the various substantial changes, going well beyond what was expected in Northern Ireland, which have been brought about the White Paper are an attempt to deal with that alienation, but if you go to the point where you say, “We can have a hard border on the island”—and that is the logic of saying no tincture of European law can be accepted in Northern Ireland; the logic must mean a hard border—it must mean that the views of the nationalist community about the right to the single market and of the Irish Government about the protection of the single market on the island of Ireland should be disregarded. That is the logic, and you must be honest in saying so.
Boris Johnson never promised that. When he talked about the protocol and introduced the Bill, he said it was to fix the protocol, not to nix it. It was never advertised as nixing it. That was quite right because to do so would undermine the entire basis of the Government’s approach. The Good Friday agreement requires substantial action to meet the alienation of the unionist community, but it is also perfectly clear under that same article that action which went so far as to destroy—
Baroness Hoey Portrait Baroness Hoey (Non-Afl)
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The noble Lord talks, as many people do, about a hard border. Could he quickly define a hard border and then say why it is not possible, given the small amount of trade that goes across it, as we know, for this border to be not at the frontier but inside the Republic of Ireland?

Lord Bew Portrait Lord Bew (CB)
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The noble Baroness has a point. It fits with something which I think is widely misunderstood in this House. The Financial Times, which I believe is regularly read on European matters by those in this House who are pro-Europe, had a report at the beginning of December which said that as a result of this Bill the European Union is pointing out to the Irish Government that it might indeed be the case that as a result of the Bill they will have to consider these checks, which, by the way, were considered by the Irish Government in the early phase of these discussions.

There is another very important point, which is that we have signed two international agreements. I might protest about what happened in the negotiations, but it has happened and there is now no possibility of getting nationalist Northern Ireland to accept any form of checks at the border within the island of Ireland. You can say that is emotional, you can say it is carrying it too far, but lots of things that the unionist community believes are emotional and possibly carried too far. That is just where we are. There needs to be equality of esteem for both communities. We cannot escape that. The Government’s whole case for the past two years has been based on that principle and on trying to level up for the unionist community. They have achieved considerable success with this Bill. These provisions which the Minister has to defend tonight were always advertised as being technically necessary as part of these changes. There is nothing new or surprising about them. The Government’s whole case has been based on a particular line of argument. It has now reached a terminus. We are now in a new place. There is no possibility of carrying on the argument about equality of esteem or neglect of unionists’ interests. There are things that might be done or added or whatever but, in substance, we have reached a logical moment of terminus. This has changed everything. There is no point in just talking in general terms about “I’m unhappy” or “my identity.” We now have to achieve a balance of both identities. That is the heart of my problem with point (4) of this Motion: it does not actually challenge the Good Friday agreement.

Baroness Hoey Portrait Baroness Hoey (Non-Afl)
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It is important, and I understand what the noble Lord is saying about the feeling there would be—although I am talking about not at the frontier but inside—but does he not accept that there is exactly the same fear and feeling about Northern Ireland people who feel British and pro-union having a border imposed on them in their country? Why does the noble Lord feel that the border at the other frontier is so much more difficult and important than having one within our own country?

Lord Bew Portrait Lord Bew (CB)
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Because as a matter of fact it actually is, and the noble Baroness knows that.

We talk about sovereignty for the people of Northern Ireland. Two years from now there will be a vote in an Assembly on these arrangements. The Assembly will have the right to consider all these matters. There will be no issue of sovereignty then, and we will know what the people of Northern Ireland think. I guarantee that you will not get a majority in the Assembly for any systematic series of checks along the internal border of Ireland—that is just not going to happen—nor will you get the unionist community to accept the protocol as was. It is always a matter of balance. It is very simple.

Many things have been said about sovereignty tonight. Suppose we meet two years from now, and the Assembly has voted and accepted this arrangement, as I think most people believe is extremely likely. All these arguments about sovereignty—“I’ve never heard anything like this”, “It’s outrageous”, “It’s imposed”—would disappear. That vote is coming. To those who are so alarmed about imposition, I say that that vote is coming.

Lord Dodds of Duncairn Portrait Lord Dodds of Duncairn (DUP)
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I am very grateful to the noble Lord. I have the deepest respect for his opinions on these matters, and he knows that. But on the issue of the vote in the Northern Ireland Assembly, would he accept that that vote, uniquely, would be by majority? The Government changed the rules of the Assembly, in breach of the Belfast agreement, which we are all supposed to protect—the Minister may shake his head, but it is true. The reality is that we vote in Northern Ireland on important issues by cross-community vote: the majority of unionists, the majority of nationalists and an overall majority. So when he says that there will be the consent of the Assembly, it is effectively a rigged vote. It is not a vote based on the Belfast agreement. It is not a cross-community vote. It has been deliberately engineered to ensure that unionists will not have the right to say no. That is the only vote of any significance in the Northern Ireland Assembly that is not cross-community or capable of being turned into a cross-community vote. That was deliberately changed, in breach of the Belfast agreement, not in defence of it.

Lord Bew Portrait Lord Bew (CB)
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I thank the noble Lord for that intervention as it will allow me to conclude—to the relief of the House—very quickly. He is right about the nature of the vote but wrong about the context. In the first place, under the Government of Ireland Act and the Good Friday agreement, trade is a reserved matter. It was a decision of this Parliament, and the beginning of the change from the May agreement—Johnson’s agreement at least mentioned the Northern Ireland Assembly, which was not mentioned a few months earlier. It is part of the long struggle to deal with significant parts of the democratic deficit. I take the noble Lord’s point completely. You could argue that it would be better if it was a different style of vote.

However, in this new White Paper we have the announcement of a new Stormont brake, where the voting system is exactly what the noble Lord wants. Suddenly we discover that we have a voting system for a petition of concern. It is exactly what has been asked for, but it is still not good enough. There is a point at which one really has to respond to the seriousness of the moment.

Lord McCrea of Magherafelt and Cookstown Portrait Lord McCrea of Magherafelt and Cookstown (DUP)
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My Lords, I know it may dismay some Members that noble Lords from Northern Ireland want to speak on the future of our country. We were expecting this debate not to be at this time but earlier on. However, seemingly the usual channels decided to put it off so that other Members could get home and would not be inconvenienced.

I support everything that my noble friend Lord Dodds of Duncairn said in his introduction to this debate. What we are witnessing, through the powers that are being given here, is a Defra Secretary of State being given the powers to order permanent border control posts. That is undermining the authority and power of the Northern Ireland Assembly, because this is its responsibility.

Even though they believe this will undermine the union, the decision tonight will force the Ministers in the Northern Ireland Assembly to acquiesce—even though they disagree with it. That is not an appropriate way to go forward.

I have sat in numerous debates in this House when the Benches opposite were absolutely packed with noble Lords expressing absolute horror that the Government would dare to ever think of introducing Henry VIII powers. Yet the Opposition Benches are empty tonight because it is to do with Northern Ireland. There has been much talk of the exercise of powers that my noble friend mentioned; they are also the responsibility of the Northern Ireland Assembly, but whenever it suits the Government, they will take it and exercise it here. They say it is because the Assembly is not meeting. The Assembly is not meeting at this present moment, and there is agreement across all the major parties in Northern Ireland for reorganisation of health, but that did not come here, because they have full powers. They say that the health service is in such a crisis that we need this reorganisation now. Well, why has it not been brought here when they are able to do it on other occasions? It suits them: they believe by not doing it, even though there is a crisis in the health service in Northern Ireland, that will force the DUP back in because there is constant pressure.

Tonight, we had it once again. At the beginning of the week, the noble Lord, Lord Alderdice, told us that if we did not accept the agreement between the European Union and the Prime Minister that was coming—even though he did know at that time what it really was; it was not called the Windsor Framework at that time—unionists should “just remember this”. He was looking across at us and said: “It is not going to be rule from Westminster; it will be joint authority with Dublin.” That was the threat that came from the Lib Dems at the beginning of the week, and now we have a threat today from the noble Lord, Lord Bruce, just to add to it. If that did not make us sit up—we have been told a number of things—we will “pay a price at the ballot box”. With the greatest of respect to the noble Lord, Lord Bruce, and the noble Members of this House, the Democratic Unionist Party is always happy to go to the ballot box; that is where we get the authority for our stand and the support. We have been written off so many times. As the Democratic Unionist Party in this House, we have been told what the people of Northern Ireland want and what unionist people want. Yet many of the people who say that have seldom, if ever, been to the Province, but they know what they people of Ulster are thinking; they know what unionist family is thinking. The noble Lord, Lord Bruce, said, “If you don’t accept what you are given now, we’ll change the Assembly rules”—that was tonight, that was him. We are being to do what we are told: “Sit in the corner and do what you are told, or else. This is what you’ll get, and you’ll have to suck it up.” So much for the Belfast agreement.

The Belfast agreement is premised on cross-community support. Members across the Benches, in every debate about Northern Ireland, said that the Belfast agreement is sacrosanct and the greatest treaty in the world, and nothing—but nothing—must be done to undermine it. But, when it does not suit the Benches opposite, or even some Members on the Benches around us, they tell us that they will change the rules.

23:00
Majority rule has gone from Northern Ireland. Whenever unionists were the majority, they were told, “No, you can’t have it”. But now it is suggested, “If you don’t take what we give you, sit in the corner and eat humble pie, you will have majority rule”. What does that mean? It means that the Alliance Party, Sinn Féin and the SDLP is the rule—but, in actual fact, they are all shades of republican or nationalist. Therefore, let us be honest that, on practically every vote, whenever it came down to it—whether it was British or nationalist/republican—the Alliance Party, the sister party of the Lib Dems, voted with Sinn Féin. So we know exactly what this is all about. Those three parties demanded the rigorous implementation of the previous protocol. Now they say that this new one must be rigorously implemented. Since the protocol came in, we were told that it could not be changed. Yet the Prime Minister said:
“The Stormont brake has been introduced by fundamentally rewriting the treaty”.—[Official Report, Commons, 27/2/23; col. 574.]
We were told that it could not be rewritten: it had to be rigorously implemented. But, of course, what the Prime Minister and Europe say about the brake is different. The European Commission described the Stormont brake not as the noble Lord, Lord Bew, did but as an “emergency mechanism” that could be used
“in the most exceptional circumstances, as a last resort”.
It is to be used not often but just as a last resort in the “most exceptional circumstances”.
I and my colleagues will study, and are studying, this very carefully, line by line. The noble Lord, Lord Bew, said that there are now a lot of experts on the Acts of Union that he never knew about: the Windsor Framework has only just come out and, believe it or not, the country is full of experts about what it means. But the truth is that many of them have never read it—or they have read the headlines about what it means in the Times, Express or Guardian. But you have to read it: you must put what our Government say and what Europe says down together, and you will find a divergence of view between those two documents.
Therefore, we will take our time, because there is a difference between us and many other Members of this House. My day is nearly done. I have passed the threescore years and 10, and I thank God that I have lived them as a part of the United Kingdom. That is being threatened. But I want to pass on to my children and grandchildren the privilege and honour that have been given to me as a free citizen, with all of the rest of the United Kingdom.
Baroness Hayman of Ullock Portrait Baroness Hayman of Ullock (Lab)
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My Lords, I am grateful to the noble Lord, Lord Dodds, for facilitating this debate. Even though we do not support fatal Motions, it is important that this debate has taken place, as he said.

I will be brief; it is very late, and I do not think that there is any need to go back and repeat the concerns and arguments which have been very clearly laid out by noble Lords this evening. As the noble Lord, Lord Dodds, said, it is important to have a debate on this instrument, which was introduced, according to the Explanatory Notes, to implement either a negotiated outcome with the EU or the system envisaged under the Northern Ireland Protocol Bill. As we have heard this evening, that outcome has now been negotiated in the form of the Windsor Framework, which we have welcomed.

We believe that the agreement of a green lane, which is designed to ease the movement of goods between GB and Northern Ireland and to support the functioning of a UK internal market, will be the subject of much discussion and debate as we go forward with the framework—it has received a lot of debate and discussion tonight. There has been a lot of talk about the paperwork and checks that will come in. I read the submissions to the Secondary Legislation Scrutiny Committee, and road hauliers were mentioned by noble Lords in the debate, so I know it is important that any checks or paperwork are not onerous, and that trade can continue as smoothly as possible under the circumstances.

We also understand that the noble Lord, Lord Dodds, and his party need the time and space to fully analyse the agreement and the accompanying legal text—that is only right. We are glad that the Government have committed to providing any supplementary evidence that they may request.

The Government have also said that, if the Executive are restored, Ministers will negotiate whether and how this power can be handed back to the Northern Ireland department. Can the Minister give any more information about what assurances or commitments Defra would seek in those negotiations? We know that Northern Ireland businesses want the protocol to work and for disruption to be minimised, so there must be sufficient capacity for checks to be carried out so that they do not become too onerous.

We do not oppose the measure, but the fact that the Government have deemed it necessary is regrettable. I believe that compromise and respect would create a better situation. This is a very complex issue, and I say again that I am grateful to the noble Lord, Lord Dodds, for bringing us the time to debate it. I will listen to the Minister’s response with great interest.

Lord Benyon Portrait The Minister of State, Department for Environment, Food and Rural Affairs (Lord Benyon) (Con)
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My Lords, I begin by sending the whole House’s best wishes to DCI John Caldwell and his family, following the despicable attack that took place last week. As the Prime Minister set out on Monday, there is no place for such attacks in Northern Ireland or anywhere in the United Kingdom.

I thank noble Lords for their contribution to the debate, and, in particular, the noble Lord, Lord Dodds, for introducing it; I have huge respect for him and his colleagues. I will start and finish my response to the debate on the basis of years spent in Northern Ireland in my early 20s, where I saw some of the terrible things that the noble Lord, Lord Morrow, spoke about—and I have heard others speak in similar ways. I understand, perhaps more than many, the levels of compromise which have been required of him and his colleagues to get to where we are today, and the levels of leadership in the communities they represent, which the rest of us in these islands will never be called on to show. They have demonstrated quite remarkable levels of compromise and leadership, and I fully respect them for doing that.

The instrument which the Motion seeks to annul, the Official Controls (Northern Ireland) Regulations 2023, was laid on 12 January this year. In direct response to the noble Baroness, Lady Hayman, and the noble Lord, Lord Dodds, I assure the House that, if the Assembly is restored, the implementation of these measures will become the responsibility of the Executive and be delivered through the Department of Agriculture, Environment and Rural Affairs in Northern Ireland. Their purpose is to grant the Secretary of State concurrent powers: first, to allow Defra to construct facilities for the purposes of performing official controls, with the primary purpose of controlling goods travelling via Northern Ireland into the European Union; and secondly, to enable Defra to direct the competent authority, DAERA—the Department of Agriculture, Environment and Rural Affairs—to hire suitably qualified staff to perform these controls.

The Windsor Framework announced by the Government this week establishes a new way forward for Northern Ireland, making substantial changes to the protocol. It addresses the full range of issues it caused, safeguarding both economic and democratic principles in Northern Ireland. It was always this Government’s preference to secure a negotiated outcome, and this agreement, we hope, delivers for all communities in Northern Ireland. I entirely respect the points made by the noble Lord, and his and his party’s wish to really study this: we must be patient with them.

Benefits from the agreement are significant and wide-ranging and I shall provide noble Lords, briefly, with a couple of examples. We have scrapped all unnecessary red tape for internal UK trade into Northern Ireland. We have also permanently guaranteed unfettered access for Northern Ireland goods to the whole UK market, maintaining the integrity and smooth functioning of the UK internal market. The only controls that remain are for a very limited subset of goods, such as endangered species. We have secured an expansion of the green lane for UK food retailers. Supermarkets, wholesalers, hospitality and catering companies, and those providing food to public services, such as schools and hospitals, will be able to use the green lane. We have removed the requirement for costly health certificates for individual food products; and the requirement for up to 100% physical checks is replaced with a purely risk-based and intelligence-led arrangement.

We have also successfully negotiated significant changes on plants. Previously banned seed potatoes and other commercially important plants described by the EU as “high risk”, such as British oak trees, will now be able to move between GB and NI. Overall, the Windsor Framework delivers for businesses, consumers and all people and communities in Northern Ireland and Great Britain.

I now turn from the benefits of the Windsor Framework to this specific SI. As we have explained previously, this legislation was required in all scenarios. I pick up the point made by my noble friend Lord Moylan: SPS checks into Northern Ireland have happened for decades. The whole island of Ireland has been an epidemiological area for these purposes for several decades. The SPS inspection facilities that we are talking about in this SI will ensure that goods destined for the European Union travelling via Northern Ireland are subject to EU checks and controls. These will mainly be goods travelling directly to the Republic of Ireland from Northern Ireland ports. They are necessary checks, as the former DUP Minister for Agriculture, Edwin Poots, acknowledged. They will ensure that checks on live animals are performed safely and with due regard to animal and staff welfare, something that is not possible at the moment with the temporary arrangements that have been put in place. This is a long-standing commitment to protect against disease, given that the island of Ireland is a single epidemiological unit, pre-dating Brexit. They ensure that Irish trucks are not using Northern Ireland ports as a backdoor into the EU without red-lane checks. So, as we said in the Bill and have always maintained, we will need to have the appropriate facilities to carry out red-lane checks.

Lord Moylan Portrait Lord Moylan (Con)
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I want to ask something just for the sake of clarification. My understanding is that the checks that have been carried out for many years relate to livestock and that most people understand SPS checks, which may technically include livestock, as checks on food, seeds, plants and so forth. While I fully accept that there have always been checks on livestock, for good reason, and that they are uncontroversial—I do not think anyone is asking that they be abolished—it slightly overeggs the position to suggest that there have always been SPS checks in the broader sense in which that term has come to be used in the course of the debate following the referendum vote in 2016. However, I am happy to be corrected.

23:15
Lord Benyon Portrait Lord Benyon (Con)
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I am happy to talk to the noble Lord after this and clarify that point. Time is moving on.

I was talking about an important safeguard for Northern Ireland businesses. It means that they and they alone benefit from being part of the UK’s internal market. Irish businesses are not part of this and should not benefit from the green lane. Indeed, the implementation of the Windsor Framework can give Northern Irish businesses a competitive advantage over those in the south. We will encourage Irish firms to relocate jobs and investment into Northern Ireland.

The improvement of these facilities is also an important part of providing safe conditions for staff and animal welfare. The present contingency facilities were constructed at speed to allow controls to be delivered when we left the EU. Improving the facilities will ensure that consignments, including for live animal movements, move quickly through ports and on to final destinations, which could include Northern Irish farms. These arrangements are needed for Northern Ireland—its businesses and its reputation for high health status and high-quality agriculture and food production.

I turn to questions of timing and procedure for the introduction of this legislation, as raised by noble Lords. This legislation is time critical. As I set out, the conditions of the current facilities are of concern for both animal and staff welfare reasons. We want to ensure that, as above, the benefits of the new green lane are felt only by internal UK trade and that Irish traders are subject to full EU law checks and controls, as we have always said.

On process, although a public consultation was not required for this legislation as it relates to the implementation of an existing commitment and introduces no new policy, my officials and ministerial colleagues have engaged with industry and businesses extensively over the last two years and will continue to do so. Defra hosts a weekly forum attended by, on average, 150 businesses and organisations across Northern Ireland and Great Britain’s food supply chain, where people can raise issues, hear information and share their views. We have engaged with Northern Irish businesses, for which the integrity and reputation of their goods, from farm to fork, is critical to their success and viability. A useful example is milk; 30% of Northern Ireland’s milk is processed in the Republic, and milk and milk products were worth over £126 million in gross added value to Northern Ireland in 2020.

On the implications of this legislation for the devolution settlement, I reaffirm that the Government recognise that the delivery of these facilities is a devolved responsibility. In the absence of a Northern Ireland Executive and Assembly, it falls to the UK Government to be able to take that work forward.

I hope I have reassured noble Lords on the scope and aim of this statutory instrument. We have had a long, wide-ranging debate, but this is specifically about SPS measures that we need to put in place regardless of the changes, welcome though they may be, that have been announced in the last few days. I hope that, as the benefits we will draw from the historic Windsor Framework become apparent, we will put in place this week measures to ensure that we have proper sanitary and phytosanitary facilities in four ports in Northern Ireland. That is what the statutory instrument seeks to do. I hope I have persuaded the noble Lord, Lord Dodds, not to press his fatal Motion.

Lord Dodds of Duncairn Portrait Lord Dodds of Duncairn (DUP)
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My Lords, I am grateful to the Minister for what he has said and I thank all noble Lords who have taken part in this debate. It is usual to say it has been a wide-ranging debate, and we can certainly agree on that if not much else at times.

I do not want to go back over some of the elements of this debate, but I want to say something in response to the noble Lord, Lord Bew. He ended on a note of challenge to us, saying that we have got what we wanted but are still not happy. I want to make a point, and it is worth putting on the record. He says that we demand a cross-community vote, whether or not we accept the protocol. That is a legitimate request because it is in keeping with the Belfast agreement. That has been changed and I have outlined the reasons why it is unacceptable. He then said that we have got a cross-community vote in relation to the Stormont brake and are still not happy. But the majority vote that has been granted to the Assembly in 2024 puts an end to the current protocol and instigates a period of negotiation for something new. The cross-community vote under the Stormont brake does not veto the law. It does not give the right to the Assembly to change anything, and that is the fundamental difference.

The devil is in the detail. We have heard the grand statements. We heard tonight that SPS checks have always happened between Great Britain and Northern Ireland, but the noble Lord, Lord Moylan, is exactly right on the facts of that matter. It is easy to make wide-ranging statements and claim wonderful progress when you do not actually look at the details. People are saying that we now have free access between Great Britain to Northern Ireland for all goods coming through border control posts, but as I have pointed out—and nobody has challenged this—even for goods coming from Great Britain to Northern Ireland in the green channel, customs forms will have to be filled in. That is an Irish Sea border. Where else between any country or region of the United Kingdom does anyone have to fill in a customs form to transfer goods, and be subject to checks and to giving all the data and information to the European Union? Where else does anyone have to put goods that nobody can certify for definite will go into the Irish Republic down into the red lane, where the full checks of an international customs barrier are implemented?

We need to get real about this. No one need lecture me about entering and making agreements. I was part of the leadership of the Democratic Unionist Party that sat down and entered government with Sinn Féin, and shared power for years with it on a more stable basis than the Ulster Unionists did previously, when they had the majority. These are people who went out to murder our kith and kin, and who targeted my family visiting a hospital and tried to murder me. My noble friend Lord McCrea’s house was riddled with bullets. We sat down and shared power with them. They still eulogise these terrorists and murderers; they still praise and elevate them. The Minister is right to raise the matter of DCI Caldwell, and we have already expressed our sympathy and wish him well. Sinn Féin stand today and condemn that murder and say it is terrible, but the very same Ministers and leaders of Sinn Féin will stand up and eulogise and praise the murderers of police officers in front of their children—today.

We are still willing to enter government and to move forward with the people of Northern Ireland. Nobody need lecture us about being unreasonable. We agreed the New Decade, New Approach agreement. We agreed the various agreements down through the years. There is no one who should point the figure. At St Andrews, Ian Paisley made that historic agreement with Martin McGuinness. People have this idea that it is no to everything.

We will insist on our rights as British citizens. All we demand is equal citizenship. People talk about not wanting to create a hard border on the island of Ireland. We do not want a hard border. We have never sought a hard border on the island of Ireland. But we will not accept a hard border between Northern Ireland and the rest of the United Kingdom. What do we mean by a hard border? What was it defined as by Sinn Féin and nationalist leaders, and by Leo Varadkar? As anything that changed—even a camera was not acceptable. How ridiculous. But for Northern Ireland there is the full panoply of border control posts, and officials jointly responsible to the EU and the UK, sharing data—all the things that are relevant to a third country. Britain is now designated for customs and trade purposes as a third country as far as Northern Ireland is concerned.

These things matter and that is why we are sitting tonight debating these issues—I wish that we could have debated them earlier and we would all be long home, but sadly that was out of our control. However, when we do debate these matters, we feel very strongly about what has been imposed. We will look in detail at all the issues that have been brought forward in this new deal. I hesitate to call it the Windsor agreement because the King was dragged into this whole affair needlessly and wrongly in a somewhat counterproductive, crass attempt to sell it to unionists—the Government should have known better and thought much more about that, as well as the overegging and overselling of it.

We will look at these issues in detail, but what we have seen thus far makes us question some of the propaganda and the claims that have been made. Be honest about it, tell us exactly what is going to happen regarding the equal citizenship of the people of Northern Ireland; do not claim that we are equal citizens and then put in place barriers between our citizenship—between Northern Ireland and the rest of the United Kingdom. We are prepared to make sacrifices to move Northern Ireland forward, but we will not sacrifice our equal citizenship within the United Kingdom.

None Portrait Noble Lords
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The Motion!

Lord Dodds of Duncairn Portrait Lord Dodds of Duncairn (DUP)
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My Lords, just to keep the House waiting a bit longer, the Minister has addressed some of the points; not many other Members necessarily have—I wonder why. I want to thank in particular the noble Lord, Lord Moylan, who on his birthday has taken time out to come and speak in this debate. There are wider issues that we will be coming to very soon, and we will test the House on many of them in a short time, but in succeeding in raising these issues, highlighting them, and having a debate on them, it is important that we concentrate on the wider issues that are now before us and return to them in greater detail. I beg leave to withdraw the Motion.

Motion withdrawn.
House adjourned at 11.27 pm.