House of Commons

Tuesday 6th June 2023 Commons Chamber

Tuesday 6 June 2023

The House met at half-past Eleven o’clock

Prayers

Tuesday 6th June 2023 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Tuesday 6th June 2023 Commons Chamber

The Secretary of State was asked—

[Mark Pawsey (Rugby) (Con)]

1. What assessment his Department has made of the adequacy of urgent and emergency care provision in towns with significant population growth.

[The Minister for Health and Secondary Care (Will Quince)]

Our recovery plan for urgent and emergency care provides £1 billion of additional funding for NHS capacity, alongside £250 million for capital improvement schemes up and down the country. Local integrated care boards are now responsible for working with their partners to decide how best to use that funding to improve services to meet the health needs of their changing populations, and all integrated care boards will shortly set out their plans for the next five years through a joint forward plan process.

[Mark Pawsey]

Rugby is the largest urban area within Coventry and Warwickshire that does not have its own A&E provision. In the wider region, Kettering, Shrewsbury, Redditch and Burton upon Trent all have similar or smaller populations, each with their own A&E services. Rugby is growing fast, with 12,500 homes being delivered between 2016 and 2031, when the population will exceed 135,000. Will the Minister say at what population level it will be appropriate for local health commissioners to upgrade the A&E provision at the Hospital of St Cross in Rugby?

[Will Quince]

As my hon. Friend knows, the provision of services, including accident and emergency, are a matter for local NHS commissioners and providers. I know that he regularly meets local NHS leaders about this matter and will continue to do so. I am very happy to meet him and, of course, visit. Funding for Coventry and Warwickshire Integrated Care Board has increased to over £1.6 billion this year. My hon. Friend is a huge champion for his constituents; I would be happy to meet and visit.

[John Cryer (Leyton and Wanstead) (Lab)]

The population of my constituency is due to grow rapidly over the next 10 years and beyond. On that basis, can the Minister give a completion date for the new Whipps Cross Hospital, which was announced last week?

[Will Quince]

By 2030, Mr Speaker.

[Mr Speaker]

And obviously we want 24-hour provision in Chorley, which has the fastest-growing population, but let us move on.

[Sarah Green (Chesham and Amersham) (LD)]

2. What assessment he has made of the adequacy of the treatment and care available for young people with complex mental health needs.

[The Secretary of State for Health and Social Care (Steve Barclay)]

We have recruited an extra 4,500 NHS children’s mental health specialists, which is a 40% increase on 2019. That is part of our additional £2.3 billion of investment into mental health services, compared to four years ago.

[Sarah Green]

Earlier this year, I was contacted by a mother who told me how her daughter, who has been both autistic and anorexic, has been receiving treatment since she was 13. Sadly, her condition has significantly deteriorated in that time, and it is her firm belief that closer integration of the different services she was accessing would have resulted in much better outcomes for her daughter. Will the Secretary of State consider a review of mental health services for children and young people, to look at how to better integrate services and ensure continuity of care?

[Steve Barclay]

I am sure the whole House is sorry to hear that her constituent’s condition has deteriorated. The hon. Lady raises a very important point about integration, which is exactly the right approach. The 2022 reforms were about integrating health and social care and empowering commissioners to take a more integrated place-based approach. I am sure her local commissioners will take note of the valid point that she raises.

[Mr Speaker]

I call the shadow Minister for mental health.

[Dr Rosena Allin-Khan (Tooting) (Lab)]

A 14-year old climbing out of hospital windows; a child absconding to a local railway station; a teenager with complex needs brought to A&E, requiring four police officers to spend an entire shift watching them, only for them to abscond the next day. There is a pattern here. At almost every step of the way, children needing mental health services face a perfect storm of delay and treatment in inappropriate settings, fuelled by an under-resourced service with over-stretched staff. In light of the Met’s announcement that they will stop attending emergency mental health calls, is it not time for the Government to get their act together, or simply do the right thing and step aside?

[Steve Barclay]

One can see the way the Government are responding constructively to these issues by looking at the pilots we have been rolling out in Humberside, where police are released within one hour in 80% of section 136 detentions. We intend to roll out that pilot nationally.

The hon. Lady is right on the first part of her challenge, as demand for mental health services is increasing. In fact, there was a 41% increase in new referrals to mental health services in 2021 compared to the previous year. Where she is wrong is on the resourcing. She missed my previous answer that set out how we are committing an extra £2.3 billion of investment into mental health services, compared to four years ago.

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

3. Whether he is taking steps to ensure that notices of decision for care homes do not lapse upon a change of ownership unless standards improve.

[The Minister for Social Care (Helen Whately)]

When a care home is taken over, the Care Quality Commission assesses and re-rates it under its new ownership. Previous notices of decision cannot legally be passed to a new provider, but they do inform the CQC’s approach to an assessment and how soon it takes place. During the time between the takeover and the CQC’s carrying out a new assessment, the legacy rating is shown on the CQC website.

[Taiwo Owatemi]

My constituents Brenda, Gary and Trina lost their parents after they were placed in Melbourne House care home, which the CQC later deemed to be “inadequate”. However, because the notice of decision lapsed on its transfer to the original owner’s family, the home, now known as Earlsdon Lodge, is able to operate as if nothing had happened. Will the Minister meet my constituents and me to explain exactly why that was allowed to happen, and what is being done to prevent it from happening to other families?

[Helen Whately]

I shall be happy to meet the hon. Member to look into that case, because I feel strongly about the importance of ensuring that everyone has access to good, if not outstanding, care in care homes.

[Richard Thomson (Gordon) (SNP)]

4. If he will make an assessment with Cabinet colleagues of the potential impact of increasing the affordability of sun protection products on levels of skin cancer.

[The Parliamentary Under-Secretary of State for Health and Social Care (Neil O’Brien)]

Last month was melanoma month and skin cancer month, and people are increasingly aware of the risks of excessive sun exposure without protection. Through the energy price guarantee and our direct support for vulnerable households, we have provided cost of living help worth, on average, £3,300 per household.

[Richard Thomson]

Since the early 1990s cases of skin cancer have doubled, with nearly 16,000 new cases diagnosed each year leading to 2,300 avoidable deaths annually. If some products were more affordable, more of our constituents might be able to use them and bring those numbers down. Will the ministerial team make representations to their Treasury colleagues about the Sun Protection Products (Value Added Tax) Bill, a private Member’s Bill promoted by my hon. Friend the Member for East Dunbartonshire (Amy Callaghan) which would remove VAT from some sun protection products, so that we can start to make an impact on those appalling figures?

[Neil O’Brien]

As the hon. Gentleman knows, tax matters are for the Treasury, but we are absolutely committed to providing cost of living support. By the end of June the Government will have covered nearly half a typical household’s energy bill since October, so we are providing one of the most generous packages in Europe.

[Mr Speaker]

I call the Scottish National party spokesperson.

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

The last time I asked Ministers whether they would support that Bill I was told that the issue of VAT and skin cancer was a matter for the Treasury, and we have just heard a similar answer. Surely this is a matter for joined-up government. What are Ministers doing—instead of imposing more pressure and costs on the NHS—to persuade their Treasury colleagues to consider more cost-effective cost preventive measures such as making skin protection products more affordable?

[Neil O’Brien]

The hon. Gentleman is campaigning for a reduction in the VAT on suncream, but let me put this into perspective. As I have said, our cost of living support is worth, on average, £3,300 per household. That is help on a huge scale. On cancer we are taking more action across the piece, and more people are being given life-saving checks, referrals and treatment than before.

[Kate Hollern (Blackburn) (Lab)]

5. What steps he is taking to improve cancer waiting times and outcomes.

[Mr Clive Betts (Sheffield South East) (Lab)]

7. What steps he is taking to improve cancer waiting times and outcomes.

[Holly Mumby-Croft (Scunthorpe) (Con)]

16. What progress his Department has made on improving cancer survival rates.

[Mary Glindon (North Tyneside) (Lab)]

19. What steps he is taking to improve cancer waiting times and outcomes.

[The Secretary of State for Health and Social Care (Steve Barclay)]

We are diagnosing and treating patients faster. In March, nearly three in four people were diagnosed or given the all-clear within two weeks—ahead of the 28-day target—and nine in 10 patients start treatment within a month.

[Kate Hollern]

In May last year I wrote to the then Health Secretary and the Prime Minister about the case of a young man in my constituency, Elliott Simpson, who was misdiagnosed with a water wart in a telephone consultation with a GP. When Elliott was finally able to see someone face-to-face, he found that he had late-stage skin cancer. He passed away on 28 April, aged just 27.

Between January and March this year, both the two-week wait target and the 62-day target were missed at East Lancashire Hospitals NHS Trust. Does the Secretary of State accept that delays are costing lives?

[Steve Barclay]

The whole House will be hugely saddened to learn of the passing of Elliott, especially at such a tender age.

The hon. Lady is right to highlight the importance of speedy diagnosis, and I was pleased that we met the faster diagnosis standard in February for the first time and again in March, with three in four patients receiving their diagnosis within two weeks and nine in 10 starting treatment within a month. She is also right to point out that there is still variation between trusts, and we are focusing on that in particular, but it is good that nationally we are hitting the faster diagnosis standard.

[Mr Betts]

When I was diagnosed with multiple myeloma six years ago, my GP gave me two pieces of advice: keep positive and keep active. The other day, I visited the wellbeing centre in my constituency, which is run by Sheffield Hallam University, the Sheffield Teaching Hospitals NHS Foundation Trust and Yorkshire Cancer Research. It is putting on a programme called Active Together to which people who are diagnosed with cancer can be referred by their consultant and have a bespoke programme of treatment involving physical activity, nutrition and psychological support to prepare them for surgery, and a programme after surgery to help them recover. Would the Secretary of State like to come to my constituency to visit this novel and innovative programme to see how it could be rolled out across the country and treat more cancers well in this way?

[Steve Barclay]

The hon. Gentleman raises an interesting and important point. How we better equip patients pre-surgery and post-surgery, how we look at their wellbeing—the keep positive bit and the social prescribing—and how we think about being active are all are hugely important. I would be keen to learn more about the programme that he highlights and for either me or one of the ministerial team to follow up on his offer.

[Holly Mumby-Croft]

In March, the all-party parliamentary group on brain tumours published its report into research funding, which found that only about £15 million of the £40 million pledged has made its way into the hands of the researchers. Can the Secretary of State set out what we can do to fix these challenges in the funding system so that we can get that money into the hands of the researchers and improve those outcomes?

[Steve Barclay]

I welcome the fact that my hon. Friend has raised this point, because the £40 million of funding is available. That money is there, ready to allocate to quality bids. All the bids that have met the National Institute for Health and Care Research standard have been funded, but she is right to say that there is more money available and we stand ready to work with researchers to get that money allocated as soon as those quality bids come in.

[Mary Glindon]

Analysis by Cancer Research UK projects that, by 2040, cancer cases will rise to over half a million new cases a year. Will the Secretary of State confirm when the NHS long-term workforce plan will be published, that it will set out transparent projections for workforce need for the next five, 10 and 15 years, and that it will be fully funded to ensure that there are enough staff to deliver timely diagnosis and treatment for cancer patients?

[Steve Barclay]

The hon. Lady is correct to say that demand for cancer services is increasing. We have seen demand up a fifth recently. That is why, alongside the long-term workforce plan, to which we are committed—the Chancellor set out that commitment in the autumn statement—we are also putting over £5 billion of investment into diagnostic centres, surgical hubs and equipment in order to better provide, alongside the workforce, the skills and equipment we need to treat cancer.

[Mr John Baron (Basildon and Billericay) (Con)]

What assurance can the Secretary of State give that both the letter and the spirit of section 5 of the Health and Care Act 2022 will be embraced to encourage the NHS to improve early diagnosis and therefore cancer survival rates by focusing on outcome measures such as the one-year survival rate, so that we can start catching up with international averages when it comes to survival?

[Steve Barclay]

I pay tribute to my hon. Friend, who has long championed this issue. Indeed, he secured an amendment to the Health and Care Act as part of that campaign. We will be fulfilling our obligation by including an objective on cancer outcomes when we publish the next mandate to NHS England, and I hope he will see that as a welcome step.

[Maggie Throup (Erewash) (Con)]

To improve cancer waiting times and outcomes, and learning from the success of the covid vaccine roll-out where hard-to-reach cohorts were vaccinated in everyday settings such as shopping centres and football stadiums, will my right hon. Friend look at locating more community diagnostic centres away from formal clinical settings in hospitals and taking them out into the community?

[Steve Barclay]

This is an innovative and exciting development, thinking about how we offer services in different ways and bring those services to patients much more locally. The community diagnostic centres are a huge step forward in that, but we should also be looking at our engagement with employers, at how we use more tests at home and at the successes we have had, for example, with some of the screening programmes in order to offer more services closer to patients.

[Sir Chris Bryant (Rhondda) (Lab)]

The figures on diagnosing people with cancer are certainly improving, but what is getting worse, and has got significantly worse in the last three months, is the starting of treatment for people who definitely have cancer. The figures are now the worst on record, with 19,000 people waiting for treatment, and all the evidence suggests that waiting another week adds 10% to the likelihood of death. Can I please urge the Minister not always to give the rosy, good statistics but to face up to the fact that there are real dangers in the statistics, too?

[Steve Barclay]

I know the hon. Gentleman takes a very close interest in this, and we can all see that there is a shared desire to meet the increasing demand. He recognises the progress on diagnostics. Nine in 10 patients are starting treatment within a month, and the all cancer survival index for England is steadily increasing, but I agree that there is much more still to do, which is why we are investing in diagnostic centres, surgical hubs and the long-term workforce plan. I am very happy to continue working with him and other colleagues as we meet this ongoing challenge.

[Virginia Crosbie (Ynys Môn) (Con)]

Does the Minister agree that one of the ways we can improve cancer care and outcomes is by supporting brilliant charities such as Chemocare Bags? Emma Hart and her team do an outstanding job of putting together bags, which include fluffy socks, puzzle books, colouring books, mints and lip salve, for those starting chemotherapy at Ysbyty Gwynedd in Bangor.

[Steve Barclay]

I am very happy to join my hon. Friend in paying tribute to all those who support Chemocare Bags for the fantastic work they do. That sort of support makes a real difference to patients, and the NHS benefits hugely from the work of volunteers, including those at Chemocare Bags.

[Mr Speaker]

I call the shadow Minister.

[Andrew Gwynne (Denton and Reddish) (Lab)]

As my hon. Friend the Member for Rhondda (Sir Chris Bryant) pointed out, the brutal truth is that the Tories have consistently missed England’s cancer treatment target since 2013. Last year, 66,000 cancer patients waited more than two months for their first treatment following an urgent GP referral, and the UK now has the worst cancer survival rate in the G7. Labour will give the NHS the staff, the technology and the reform it needs, and we make no apologies for expecting cancer waiting times and diagnosis targets to be met once again. That is our mission. Why is theirs so unambitious?

[Steve Barclay]

We are making significant progress. The hon. Gentleman specifically mentions GP referrals, and there were more than 11,000 urgent GP referrals for suspected cancer per working day in March 2023, compared with just under 9,500 in March 2019, so we are seeing more patients.

Let me give an indication of how we are innovating on cancer. We have doubled the number of community lung trucks, which means the detection of lung cancer at stages 1 and 2 is up by a third in areas with the highest smoking rates. In the most deprived areas, we are detecting cancer much sooner, and survival rates are, in turn, showing a marked improvement.

[Judith Cummins (Bradford South) (Lab)]

6. What steps he is taking to improve healthcare for women.

[Sarah Owen (Luton North) (Lab)]

14. What steps he is taking to improve healthcare for women.

[The Parliamentary Under-Secretary of State for Health and Social Care (Maria Caulfield)]

This is the first Government to produce a women’s health strategy in England. We are making huge progress on the eight priorities in our first year, from introducing the hormone replacement therapy pre-payment certificate, which is reducing the cost of HRT for women, to the £25 million roll-out of women’s health hubs across the country. We will be announcing our second-year priorities in due course.

[Judith Cummins]

Half of all women over 50 will experience bone fractures due to osteoporosis, and many of these will be serious hip fractures. As many women will die from these fractures as from lung cancer or diabetes. Can the Minister explain why not even one of the 63 key performance indicators set by NHS England for integrated care boards sets a target for fracture prevention?

[Maria Caulfield]

I thank the hon. Lady for her work in this space. She is campaigning hard on this issue. I reassure her that osteoporosis is in the women’s health strategy and is a priority area for us. We are already working to make sure that women’s vitamin D status is known, and to make sure that we fill gaps. NHS England is expanding fracture services for high-risk women with osteoporosis, and it is working to prevent falls. The women’s health ambassador is raising the profile of osteoporosis so that women who are at higher risk can take action to prevent fractures and falls in the first place.

[Sarah Owen]

Women too often struggle with needless pain through standard but invasive procedures, such as hysteroscopies and intrauterine device fittings, offered without any pain relief. Our pain is being misunderstood and ignored. How much unnecessary pain must Ministers see women endure before the Government finally deliver on the pain management promised in the women’s health strategy? And why is this a 10-year ambition instead of a more immediate one?

[Maria Caulfield]

I thank the hon. Lady for her question, and let me also pay tribute to the hon. Member for West Ham (Ms Brown), who has campaigned hard in this space. I met a group of women to discuss painful hysteroscopies just a few weeks ago. This is a priority in the women’s health strategy, as the hon. Member for Luton North (Sarah Owen) said. We are working with the royal college to update its guidelines, because a lot of these issues are associated with women’s consent, the provision of information before these procedures, and women knowing that they can have them under a local or general anaesthetic and can also ask for pain control. This is not working in practice, which is why it is a priority in the women’s health strategy.

[Mr Speaker]

I call the Chair of the Select Committee.

[Steve Brine (Winchester) (Con)]

Women living with HIV of course have the right to healthcare on the same terms as anyone else, except that now they do not when it comes to starting a family. Many people living with HIV are currently excluded from accessing fertility treatment, both by law and by the Government’s microbiological safety guidelines. So will the Government now follow the scientific evidence, particularly on undetectable viral load, and remove what are surely discriminatory restrictions on the basis of HIV status?

[Maria Caulfield]

I thank the Chair of the Health and Social Care Committee for his question, as he raises an important point. Last year, we asked the Advisory Committee on the Safety of Blood, Tissues and Organs to reconsider this specific issue. It set up a working group in June last year to look at it and we expect its recommendations this month. We will take them seriously and address them swiftly once we have its advice.

[Siobhan Baillie (Stroud) (Con)]

So many women’s health issues begin with birth and pregnancy, as health is often dependent on the care and aftercare that women receive. Will my hon. Friend give the House an update on the recruitment of midwives and maternity teams, as Gloucestershire NHS is working so hard on that, in order to fully reopen Stroud Maternity Hospital?

[Maria Caulfield]

I thank my hon. Friend, who does a huge amount of work supporting her local midwives in Stroud. I can give her encouraging news: not only have we spent £190 million on midwifery services, but we are seeing an increased number of midwives coming through midwifery training. Excitingly, we have a nurse conversion course, which takes 18 months, with NHS England paying the tuition fees for nurses to convert to being midwives. We have had 300 in training this year and we are expanding that to 500 in the next academic year. We have encouraging retention rates too, which show that midwives are not only joining the profession, but staying in it.

[Mr Speaker]

I call the shadow Minister.

[Liz Kendall (Leicester West) (Lab)]

There is a particular group of women whose health needs should be highlighted during Carers Week: women who look after an older or disabled relative. The majority of unpaid carers in their 50s and 60s are women. Eight million unpaid carers have seen their own health suffer, with those providing high levels of care twice as likely to have poor health as people without caring responsibilities. So will the Minister finally commit to a cross-Government national carers strategy, including health issues in it, as the last Labour Government did? That is a key demand during this year’s Carers Week.

[Maria Caulfield]

I thank the shadow Minister for her question. My colleague the Minister for Social Care is hosting an event today for carers, and £300 million for carers in the better care fund has also been released. I am a carer for my dad, who thankfully is well and spritely, so I understand the pressures of this. Recently, I met carers from Kinship; often they are grandparents, and older aunts and uncles, who look after young children. Work is going on between us and the Department for Education on how we can better support kinship carers, who do fantastic work in looking after young children. We fully recognise the issue, and the Social Care Minister is not just providing funding, but meeting those carers to see how we can better support them.

[Neil Coyle (Bermondsey and Old Southwark) (Lab)]

8. What steps he is taking to improve the health of patients with arthritis awaiting NHS treatment.

[The Minister for Social Care (Helen Whately)]

NHS England has drawn on the work of Versus Arthritis, including its joint replacement support package, in the resources it provides to support people waiting for hip and knee replacements. Alongside that, we know that what people really want is faster treatment. That is why we are working so hard to cut waiting lists, which is one of the Prime Minister’s five key priorities.

[Neil Coyle]

I am glad that the Minister referenced Versus Arthritis, because it does great work, but it has significant concerns about the waits for treatment for people living with arthritis. While recognising the efforts of hard-working NHS staff, there are more than 800,000 people in England waiting for trauma and orthopaedic treatment, including more than 5,500 Southwark constituents waiting for treatment at Guy’s and St Tommy’s hospitals. Will the Minister meet staff from Versus Arthritis specifically to discuss how to better support people waiting for those treatments?

[Helen Whately]

As the hon. Member said, Versus Arthritis is doing really important work not only supporting people with arthritis while they wait for treatment, but better preparing them for surgery. What is really important, as I said a moment ago, is reducing those waits and the work that we are doing on that. We have already virtually eliminated two-year waits, and 18-month waits have been reduced by more than 90%, which is quite a contrast, we know, to the performance of the Labour-run NHS in Wales. I encourage Versus Arthritis to contribute to our call for evidence on the major conditions strategy where we are looking at what more we can do to support people with, among other things, muscular skeletal conditions.

[Bill Esterson (Sefton Central) (Lab)]

9. Whether he plans to provide funding for a new primary health care facility in East Sefton.

[The Parliamentary Under-Secretary of State for Health and Social Care (Neil O’Brien)]

The Government are providing record levels of capital to the NHS, with more than £24 billion allocated between 2022-23 and 2024-25, over £12 billion of which is allocated to integrated care boards themselves to invest in local priorities, including primary care facilities, of which just under £700 million has been allocated to NHS Cheshire and Merseyside integrated care board.

[Bill Esterson]

The Minister has just reminded us that the allocations are made by Government to integrated care boards. The problem is that, with a board the size of Cheshire and Merseyside, there are very many competing priorities. Sefton Council has secured more than £1 million from developers for a new health centre in East Sefton. The Health Secretary’s recent predecessors, of which there have been many, have agreed with me that a new health centre there is a priority. Will he and his colleagues match the priority accorded to this by their predecessors, match the ambition of my constituents and support the commitment by Sefton Council and award that additional funding, so that my constituents can get that much-needed health centre in East Sefton?

[Neil O’Brien]

The hon. Member has been campaigning doggedly for this for several years, and I am sure that his local ICB will be strongly seized of that and the strong arguments for it. He raised the issue of developer contributions. One thing that we have done in the most recent primary care recovery plan is set further steps to increase investment from developer contributions so that we match new housing with the much-needed infrastructure, such as primary care facilities.

[Gordon Henderson (Sittingbourne and Sheppey) (Con)]

10. What progress his Department has made on increasing the number of available GP appointments.

[The Parliamentary Under-Secretary of State for Health and Social Care (Neil O'Brien)]

We are taking action to increase the workforce in general practice. We have managed to hit our target of recruiting 26,000 extra clinicians a year earlier. In fact, we have 29,000 extra clinicians in GP surgeries as well as nearly 2,000 more doctors. Of course, we will go further: as well as increasing the training of GPs to a record level—up from about 2,600 to 4,000 a year—we are also taking action to improve technology to take the burden of bureaucracy off GPs through our primary care recovery plan.

[Gordon Henderson]

Although I appreciate the Minister’s response, Sittingbourne and Sheppey still has one of the highest patient to GP ratios in the country. Without more GPs, no initiative to increase appointments will succeed. Our local integrated care board is doing its best to bring more doctors to our area. What help can my hon. Friend give to the ICBs so that they can provide my constituents with the GPs they need?

[Neil O’Brien]

My hon. Friend is quite right that we absolutely need to go further. That is why, through the primary care recovery plan, we are taking some of the pressure off general practice, investing £645 million in the new Pharmacy First service, which will free up about 10 million GP appointments a year. That is why we are investing about £60,000 per practice in new IT and modern online systems. None the less, he is totally right: we need those doctors in general practice. We have about 2,000 more now than we did in 2019, but we will go further. We have already increased GP training and we are looking at building on that further.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Can the Minister clarify when Oldham will receive its share of the 6,000 additional GPs that were promised in the Conservative 2019 general election manifesto? Today we are running with fewer GPs, and that is not helpful to anyone.

[Neil O’Brien]

I have already noted that we have increased the number of doctors in general practice by nearly 2,000 since 2019 alone. The number of direct patient-facing staff in general practice is 50% higher in total than in 2019, and that is up right across the country. However, of course we will go further and grow the number of clinicians in general practice, building on what we have already done.

[Matt Warman (Boston and Skegness) (Con)]

The primary care recovery plan includes excellent measures to extend visas for international medical graduates, but can my hon. Friend say whether that extension will be automatic, answering the concerns of the Royal College of General Practitioners, and whether it will be in place for the 1,000 or so graduates coming this June and August?

[Neil O’Brien]

My hon. Friend modestly does not mention his role in advocating for that important reform, which will help to increase the number of highly qualified GPs coming from other countries to work in the NHS. We will ensure that that extension is automatic, so that people have extra time to make sure they get the right placement in general practice.

[Tim Farron (Westmorland and Lonsdale) (LD)]

There was a net loss of 577 full-time equivalent GPs last year. A contributing factor in rural communities was the Government’s decision a few years ago to remove the minimum practice income guarantee, making it unsustainable for small surgeries—and many rural surgeries are necessarily small—to survive. Will the Minister consider whether it is time to reintroduce a strategic small surgeries fund, to allow smaller rural surgeries in communities such as mine to survive and thrive?

[Neil O’Brien]

The funding formula already takes account of rurality. I hear the hon. Gentleman’s argument, but it is worth noting that our GPs are doing more than ever before. In the year to April there were nearly 10% more appointments than before the pandemic, or 20 more appointments in every GP practice per working day. GPs are working incredibly hard, as well as putting in extra staff, and I pay tribute to them for the sheer amount of work they are doing.

[Paul Bristow (Peterborough) (Con)]

The Minister recently joined me at the Thistlemoor medical centre at the heart of my constituency. Led by the inspirational Modha family, the team prioritise making face-to-face appointments available for patients by having amazing admin and support staff who speak a variety of languages. That means that, by the time the patient sees the GP, all the relevant checks have been done and the GP has all the relevant information. How can we better use admin and support staff at GP surgeries so that doctors can maximise their time and operate at the very top of their licences?

[Neil O’Brien]

It was an absolute pleasure to meet the Modha family and see the inspirational work happening in my hon. Friend’s constituency. In our primary care recovery plan we are learning some lessons from that work, particularly about focusing GPs’ time on the jobs only they can do—hence the investment in the extra 29,000 additional roles reimbursement scheme staff, the detailed plan in the primary care recovery plan to improve communication between hospitals and GPs, the cutting back of unnecessary bureaucracy, and the freeing up of resources by simplifying the investment and impact fund and the quality and outcomes framework. It is brilliant to learn from the inspirational work happening in his constituency.

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

Recent research from the Nuffield Trust shows that Brexit—a Brexit supported by both the Government and the Labour party, it has to be said—has worsened the shortage of NHS staff across the UK. Indeed, it has led to more than 4,000 European doctors choosing not to work in the national health services across the UK, due to higher costs, increased bureaucracy and uncertainty over visas. Can the Minister tell me whether that is one of the success stories of Brexit that we keep hearing about?

[Neil O’Brien]

International recruitment is up. In fact, we have 38,000 more doctors and 54,000 more nurses in the NHS than in 2010. In England at least, we are taking every step we can to draw on that international talent and we are using it to grow staffing in the NHS.

[Mr Speaker]

I call the shadow Minister.

[Karin Smyth (Bristol South) (Lab)]

From Sittingbourne via Bristol and Oldham, people are fed up with not being able to speak with a GP when they need to. GPs are warning that rising demand and increased costs may lead to workforce cuts or even closures. They are fed up with the bamboozling of numbers—more of which we have heard this morning—whether on GPs, full-time trainees, locums and now appointments. Whatever the metric, can the Secretary of State or the Minister tell us how many more GPs or GP appointments they think are necessary for people to access the care that they need?

[Neil O’Brien]

We committed in our manifesto to increasing the number and availability of appointments by 50 million. We are well on our way to meeting that target, as I have mentioned—we had 10% more appointments in the year to April than in the year before the pandemic. That is the result of the additional staffing that we are putting in: the extra 29,000 other clinicians and the nearly 2,000 more doctors in general practice. We have made that investment, but the reason why GPs are doing more appointments is not just that we have provided a fifth more funding since 2017 up to 2021; it is also that GP teams are working incredibly hard, and I pay tribute to them for all they are doing.

[Luke Hall (Thornbury and Yate) (Con)]

11. What steps he is taking to provide funding for new hospitals and health centres.

[The Secretary of State for Health and Social Care (Steve Barclay)]

We are investing record sums in the NHS estate, with more than £20 billion in the largest hospital building programme and, in addition, a further £1 billion to put an extra 5,000 bed capacity into NHS trusts, and more than £5 billion as part of our elective recovery plan, including for diagnostic centres and new surgical hubs.

[Luke Hall]

The Secretary of State is aware of the £30 million bid that we have submitted to redevelop Thornbury health centre. That new facility would provide GP appointments, more out-patient services, more mental health support and a proactive frailty hub to keep elderly residents in their homes for longer with the support that they need. Thornbury is a growing town and it desperately needs the new facility. Can the Secretary of State update me on the timescales for the outcome of our bid, and will he meet me to discuss it in more detail?

[Steve Barclay]

I know that is an extremely important scheme. My hon. Friend will know that the costs have risen considerably from when it was first proposed, and it is therefore right that we look at embracing modern methods of construction and at whether a rebuild option is the way forward. I am very happy to meet him to discuss it.

[Mohammad Yasin (Bedford) (Lab)]

The Government have failed to support the East London NHS Foundation Trust’s bid for a new hospital, despite the fact that it has the capital to build the much-needed Bedford health village. We have a mental ill-health epidemic among adults and children. Does the Minister agree that it is reckless to expect my constituents to wait many months and to travel miles to access in-patient mental health services?

[Steve Barclay]

The hon. Gentleman might have missed in the announcement we made a couple of weeks ago that we are building three new mental health hospitals as part of the hospital building programme. That is also a part of our wider support for mental health, including the extra £2.3 billion of funding compared with four years ago.

[Boris Johnson (Uxbridge and South Ruislip) (Con)]

May I thank my right hon. Friend for the rapid progress he is making on the hospital building programme? Can he confirm that he will shortly be announcing a full and final programme of funding so that we can deliver a superb new state-of-the-art hospital in Hillingdon, where, I am proud to say, enabling works are already under way?

[Steve Barclay]

I am delighted to hear that the enabling works are under way. I know that my right hon. Friend has championed both Hillingdon and the new hospital building programme. I am sure that he will welcome the investment of more than £20 billion. I can confirm that Hillingdon will be fully funded. In addition to the enabling works, we are working closely with the trust to incorporate the Hospital 2.0 design into Hillingdon, as we will at Whipps Cross, as part of taking that programme forward.

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

When will the Government announce capital funding for the new hospital in Lancaster: before or after 2030?

[Mr Speaker]

And Chorley, of course.

[Steve Barclay]

Chorley is extremely important, Mr Speaker—I am very sighted on that.

Our commitment is that that is part of the new hospital building programme. We said that it is part of the rolling programme, so it will not be completed by 2030 but we are keen to get work started on it, and that is exactly what we will be discussing with Members of Parliament in the weeks ahead.

[Anthony Mangnall (Totnes) (Con)]

12. When he plans to publish a dental recovery plan.

[The Parliamentary Under-Secretary of State for Health and Social Care (Neil O’Brien)]

Our dental plan will be out shortly. We are already taking steps to reform the contract. We have created more bands for units of dental activity, to better reflect the fair cost of work and to incentivise NHS work. We have introduced a minimum UDA value to sustain practice where it is low, allowing dentists to deliver 110% of their UDAs. As a result, the amount of dental activity being delivered is up by about a fifth on a year ago, but we know that we must go further.

[Anthony Mangnall]

I welcome the Minister’s response and his comments in a recent Westminster Hall debate. It is clear that there is still a problem, and many of us are still asking for the recovery plan to come forward. I am afraid that “soon” is not good enough. Nearly every single one of the NHS dentists in my constituency is either not taking on new patients or leaving the area. “Soon” needs a date. Can we have this plan either immediately or sooner?

[Neil O’Brien]

I was seized by the thoughtful comments that my hon. Friend made in that Westminster Hall debate. We are working on all those ideas, and the plan will be out very shortly.

[Jim Shannon (Strangford) (DUP)]

I thank the Minister for his response. Would he consider encouraging more students to go into dental work by writing off student loans for those who go into NHS dental work for a five-year period—in other words, we get something back if we invest in them?

[Neil O’Brien]

At every stage, we are taking action to get more dentists doing NHS work. There are 6.5% more dentists doing NHS work than in 2010. The hon. Gentleman has an important idea. We are doing other things to retain NHS dentists, such as the important reforms that we made to pensions, which have helped both GPs and NHS dentists.

[Dr Luke Evans (Bosworth) (Con)]

13. What progress he has made on improving hospital facilities.

[The Secretary of State for Health and Social Care (Steve Barclay)]

The Government are providing record investment in NHS hospital facilities to improve staff and patient experiences and provide extra capacity to cut waiting lists, including the more than £20 billion that we announced just under two weeks ago.

[Dr Evans]

I thank the Secretary of State for his serious investment in Leicestershire, with £14 million for the diagnostic centre in Hinckley and now part of that £20 billion going to Leicester Royal Infirmary, Leicester General Hospital and Glenfield Hospital, including for upgrading the car park. But there is one final part. In 2018 we had £7 million allocated to Hinckley for improvements, but due to covid and the community diagnostic centre investment, the business plan has changed to a day case unit. The money is there. Will he remove the red tape and look on this kindly and swiftly?

[Steve Barclay]

My hon. Friend is right to highlight the series of investments that we have made in his local area. On the specific case he raises, he will know that the business case needs regional approval, and that is currently with NHS colleagues, but I am happy to commit to him that once that is received, we will look at it very keenly.

[Andy Slaughter (Hammersmith) (Lab)]

How much of the reduced £20 billion for the 2030 new hospital programme, if any, is secured for Imperial College Healthcare NHS Trust hospitals, and what are the new completion dates for building works to Charing Cross, Hammersmith and St Mary’s hospitals, now that they have been removed from the list of projects to be completed by 2030?

[Steve Barclay]

As I set out in my statement, there are three schemes within the trust proposal. That is part of the rolling new hospital programme. We are keen to get the enabling works started as soon as possible. That includes a decant at Charing Cross to enable floor-by-floor refurbishment to proceed. We also need to discuss with the trust potential sites for St Mary’s. There is a considerable amount of work to be done, but we are keen to get that enabling work done as soon as possible.

[Justin Tomlinson (North Swindon) (Con)]

I warmly welcome the works beginning on the new £26 million A&E facility in Swindon, hot on the heels of the £23 million urgent care and radiotherapy centres. Will the Secretary of State confirm that this is the single largest investment in Swindon healthcare facilities?

[Steve Barclay]

I am very happy to confirm that it is the largest investment in Swindon facilities. My hon. Friend is right to draw the House’s attention to the £26 million investment in A&E and the £23 million investment in radiotherapy. It is a tribute to his championing of the need for those facilities in Swindon that the NHS has responded and this capital funding has been provided.

[Alex Cunningham (Stockton North) (Lab)]

I have seen the wide smiles in the pictures of the Prime Minister, former Health Secretary and other MPs who have been happy to visit North Tees hospital in my constituency, where health inequalities are some of the worst in the country. They know that it is not fit for purpose, so why on earth have the Prime Minister and his Health Secretary turned their backs on the dedicated staff there and rejected their bid to replace our rundown hospital?

[Steve Barclay]

The hon. Gentleman seems to have missed the £12 billion record investment in capital across the NHS, the investment in the NHS app, the investment in tech—

[Alex Cunningham]

That is not North Tees. You cancelled it 13 years ago.

[Steve Barclay]

No, the technology programmes are national programmes that cover everyone, including North Tees. It is slightly odd to suggest that one place alone in the country would be exempt from a national programme; that is simply not the case. We are making record investment, including over £20 billion in the new hospital programme and 160 diagnostic centres and 43 new surgical hubs this year.

[Sarah Owen (Luton North) (Lab)]

T2.   If he will make a statement on his departmental responsibilities.

[The Secretary of State for Health and Social Care (Steve Barclay)]

As Health Secretary, I have been clear that deploying the latest technology and innovation is essential in order to deliver our priorities: to cut waiting lists, improve access to GPs and improve A&E performance. The NHS app is at the heart of this, including the enhancement of patient choice set out in our recent announcement, which is not available to patients in Wales. The Patients Association estimates that by enabling people to select a different hospital in the same region on the app, we can cut their waiting times by as much as three months.

We have been making major improvements behind the scenes, which are already paying off. Today, I can tell the House that between March 2022 and March of this year, there have been 6 million new registrations for the app; repeat prescriptions via the app have increased from 1.6 million a month to 2.5 million a month; and primary care appointments made on the app have increased from 30,000 a month to 250,000, and secondary care appointment from 30,000 a month to 360,000. We continue to work to increase the app’s functionality, including opening more records and test results and enabling more appointments, as part of our commitment to technology.

[Mr Speaker]

I think a statement would be better next time.

[Sarah Owen]

Brain tumours are the biggest killer for people under 40, but we are still waiting for the full £40 million that the Government promised to fund brain tumour research. In March, I raised in the House the heartbreaking experience of my constituents Yasmin and Khuram, whose daughter Amani died from a brain tumour just before her 23rd birthday. Once again, I ask whether the Minister for Health and Secondary Care or the Secretary of State will meet with me and my constituents to hear their calls for the full funding allocation to be given to researchers. That funding would be transformational for the treatment of brain tumours.

[Steve Barclay]

The Minister of State has met with campaigners, and I know he stands ready to have further such meetings. As we touched on earlier, the £40 million is available; obviously, that needs to be allocated to research bids of the necessary quality, and the remaining money is open to researchers to bid for. I hope they will do so.

[Selaine Saxby (North Devon) (Con)]

T3. I thank my right hon. Friend for reconfirming the investment into North Devon District Hospital. Will he meet with me, the hospital trust and my local housing association to ensure that the housing committed to on the Barnstaple site can rapidly commence?

[Steve Barclay]

I am very keen to meet with my hon. Friend. I know this is an extremely important scheme for her constituency, particularly the key worker accommodation, and I look forward to having that discussion with her and the leadership of her trust.

[Mr Speaker]

I call the shadow Secretary of State.

[Wes Streeting (Ilford North) (Lab)]

First, I congratulate the Health Secretary on his recent write-up as the next Leader of the Opposition. According to the i newspaper, his supporters are calling him “Mr Consistent”. Is that because of the consistent rise in waiting lists since he became Health Secretary, the consistently longer waiting times that patients are facing, or the consistent delay to the NHS workforce plan?

[Steve Barclay]

The point of consistency is that we gave a manifesto commitment to have 26,000 additional roles in primary care, and we have delivered that. We made a commitment to the largest ever hospital building programme, and we have announced over £20 billion of investment in it. The Government are standing by their manifesto commitments—that is what we are delivering.

[Wes Streeting]

I am sure that will do it.

I want to turn to the most recent reports about the NHS workforce plan, because apparently not only is that plan delayed, but we now read in the media that it is unfunded. Labour will pay for our workforce plan by abolishing the non-dom tax status. [Interruption.] Conservative Members do not like it, Mr Speaker, but it is the only tax they have been unwilling to put up. We have a plan, and we have said how we will pay for it. How will the Health Secretary fund his plan when it eventually arrives? Will it be cuts to the NHS, more borrowing, or even more broken promises?

[Steve Barclay]

The hon. Gentleman is recycling this question almost as often as he recycles the non-dom funding. As I said at the last Health and Social Care Question Time, it is like the 1p on income tax that the Lib Dems used to promise, which was applied to every scheme going.

We touched on this issue at the last Question Time, and indeed at the one before: we have a commitment to a long-term workforce plan. The Chancellor made that commitment in the autumn statement, but it is a complex piece of work that NHS England is working on. It is important that we get the reforms in that plan right, and that is what we are committed to doing.

[Maggie Throup (Erewash) (Con)]

T4. Just a couple of weeks ago, the Obesity Health Alliance launched its manifesto to tackle the high levels of diet-related ill health and the impact that has on our economy and society. Can my hon. Friend update the House on the progress being made on implementing the measures in section 172 of and schedule 18 to the Health and Care Act 2022 on the advertising of less healthy food and drink?

[The Parliamentary Under-Secretary of State for Health and Social Care (Neil O’Brien)]

We are still committed to reducing the advertising of unhealthy food, including the junk food watershed that will be implemented in 2025. Ahead of that, we are taking action on obesity across the board, including the sugar tax, which has cut the average sugar content of affected drinks by 46%, the calorie labelling that we have on out-of-home food in cafés and restaurants, and the location restrictions on less healthy food that are coming in from October.

[Mr Speaker]

I call the SNP spokesperson.

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

Kidney Research UK has published a report on the health economics of kidney disease, predicting a terrifying rise over the next 10 years. As we know, uncontrolled diabetes is the biggest cause, with Diabetes UK noting that those disproportionately most at risk are those from poverty and from south Asian and black ethnic backgrounds. Reducing health inequalities is therefore key, and it is a key ambition for the Scottish Government. It means tackling poverty in our society. What steps is the Minister’s Department—

[Mr Speaker]

Order. This is topicals.

[Martyn Day]

It is topical because the research was just published yesterday.

[Mr Speaker]

The question cannot go on forever; let us get an answer.

[Neil O’Brien]

I had a useful conversation with the Scottish public health Minister where we discussed many of these issues. We are providing huge cost of living support—some of the most generous in Europe, worth £3,300 a household—and taking action across the piece. Whether it is smoking or obesity, we are tackling the underlying causes of the health inequalities that the hon. Gentleman mentions.

[Sir Edward Leigh (Gainsborough) (Con)]

T8. Under the Human Rights Act, do the Government not have a duty of care to deal with the housing of illegal migrants? How can the Government ensure the health of 2,000 migrants cooped up in the former RAF Scampton? In particular, how will they ensure their health given the fact that the site is riddled with asbestos and contamination from 100 years of RAF usage? I see a case coming to the European Court of Human Rights.

[Steve Barclay]

Clearly, an increase in population in a specific area will have an impact on the health needs there. I recognise the concern that my right hon. Friend raises, and I will ask the Minister for Primary Care and Public Health to follow up with him on this important point. While the NHS is well equipped to deal with short-term pressures, this issue highlights the importance of the Prime Minister’s commitment to stop the boats and the Government’s overall strategy on illegal migration.

[Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)]

T5. As chair of the all-party parliamentary health group, I have been hearing so much about the importance of artificial intelligence innovation in mental health, and I was pleased to launch the AVATAR2 clinical trials in three universities across the UK. Will the Secretary of State commend this progress being made in digital innovation? It deserves scrutiny, but can make much progress.

[Steve Barclay]

I very much welcome it. I am delighted to hear that constructive approach to AI from the hon. Lady. The importance of AI is why we have been funding more than 80 AI lab schemes with more than £130 million. AI has huge potential to help patients. We are seeing that, for example, in stroke patients getting care much quicker. She is right that there are also some regulatory and other issues that we need to address, but we should not miss the opportunities of AI, and she is right to highlight them.

[Anna Firth (Southend West) (Con)]

T9. Last week, not a single dentist across the city of Southend said that they were taking on new NHS patients, which is concerning for my constituents. Can my hon. Friend confirm again what steps he is taking to make sure that my constituents get the NHS dental treatment that they deserve?

[Neil O’Brien]

This is absolutely the top priority I am working on at the moment. I am totally seized of the challenge that my hon. Friend mentions. I have mentioned some of the reforms we are already making, which have increased dental activity by about a fifth in the year to March, but we know that we have to go further and we will do so shortly.

[Nadia Whittome (Nottingham East) (Lab)]

T6. More than one in 10 social care roles are vacant, and the biggest culprit in this recruitment and retention crisis is low pay. According to recent TUC analysis, a £15 an hour minimum wage for care workers would not only tackle staff shortages, but level up places such as the east midlands, introducing an £800 million economic boost. Will the Government introduce that?

[The Minister for Social Care (Helen Whately)]

I want to see the care workforce recognised and rewarded for the work that they do. That is one reason why we gave adult social care a record uplift to its funding of up to £7.5 billion in the autumn statement, for local authorities to fund care providers to pay their workforce in turn. That goes hand in hand with our workforce reforms to develop the skills and career opportunities for the care workforce.

[Sir Christopher Chope (Christchurch) (Con)]

Has my right hon. Friend the Secretary of State read the report “Safe and Effective?” produced in April by a group of senior clinicians, which is very critical of the work of the Medicines and Healthcare products Regulatory Agency? If he has not yet read it, will he do so, please?

[The Parliamentary Under-Secretary of State for Health and Social Care (Maria Caulfield)]

I thank my hon. Friend for his question. I feel that we had a very productive meeting yesterday with the all-party parliamentary group on covid-19 vaccine damage about the vaccines for covid and the issue of the MHRA. He raised a number of important points during that meeting, including that on the MHRA, and I will be responding to him shortly.

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

T7. One of my constituents with complex health needs has struggled to get GP appointments for years now. On one occasion when they could not get an appointment, they had to resort to taking out-of-date medicine. Last week, they phoned every morning at 8 am, before finally getting just a telephone appointment. When will the Government finally fix the crisis in primary care and make sure that everyone gets access to a GP appointment?

[Steve Barclay]

As the Under-Secretary of State for Health and Social Care, my hon. Friend the Member for Harborough, said earlier, through the primary care recovery plan we have specific measures to tackle things such as the pressure at 8 am, particularly on a Monday morning. There is the investment in digital telephony, with call-back features, and online booking, as well as the channel shift to enable pharmacists to do more and to prescribe more, the use of the NHS app and the review of 111. There is a range of initiatives that we are taking to address the increased demand. Ultimately, GPs are seeing more patients—up to 10% more patients—but there is more demand, and that is how we are meeting it.

[Mr Philip Hollobone (Kettering) (Con)]

Kettering General Hospital is aiming to submit its final business case for its £34 million net zero energy centre in December, but has been told that when it does so, it can expect at least a 13-week wait for approval. The Secretary of State has been good enough to see for himself the urgent need for this new power plant. Is there anything he can do to speed up this process?

[Steve Barclay]

I share my hon. Friend’s desire for us to move at pace on the scheme. As he says, I have seen at first hand the importance of the scheme at Kettering, and I stand ready to work constructively with him to expedite that case, because I do not think anyone is in any doubt of the importance of the work at Kettering. It is a huge tribute to him and the way he has championed the case for Kettering that it was such a central part of the new hospital programme announcement.

[Simon Lightwood (Wakefield) (Lab/Co-op)]

In Wakefield, I am pleased to say that our campaign to save our city centre walk-in service has been successful, but every day people are still struggling to get a GP appointment. The latest NHS statistics show that, in April, 12,586 people waited more than 28 days. Quite simply, there are not enough fully qualified GPs. Labour has a workforce plan that is ambitious and costed. Where is the Government’s delayed and fully funded workforce plan?

[Neil O’Brien]

I have already mentioned that we have nearly 2,000 more doctors in primary care than we did in 2019, as well as the early delivery of the 26,000 extra clinicians we have brought into primary care. [Interruption.] The Opposition may not want to hear it, but the truth is that we have increased funding for general practice by about a fifth in real terms. We have more doctors and other clinicians, and GPs are doing 10% more appointments every month. We want to continue to build on that, which is why we have the primary care recovery plan and why we have invested a further £645 million in enabling people to get treatment from their pharmacists, freeing up 10 million more GP appointments. We know we must go further, but we are making progress.

[Aaron Bell (Newcastle-under-Lyme) (Con)]

I know the Minister is very keen to see the numbers of elective waits fall, and they have been falling. My constituents in Newcastle-under-Lyme share that aim. So will he welcome the local hospital trust opening not only a new modular theatre for specialised hand surgery, but a central treatment suite for day patients at the County Hospital in Stafford funded by NHS England’s elective recovery plan, which will help cut waits for planned procedures?

[The Minister for Health and Secondary Care (Will Quince)]

I thank my hon. Friend for his question. He has articulately and eloquently set out the improvements being made at Stafford County Hospital, and he has been a strong champion for those works. This is real, visible, positive change that will benefit both residents and patients in Newcastle-under-Lyme and the surrounding areas.

[Stewart Malcolm McDonald (Glasgow South) (SNP)]

My constituent Brian Murray lost his wife Roberta six years ago, following years of chronic health conditions after an infected blood transfusion. He wants to know: when will the Government enact all of the recommendations regarding compensation from the second report by Sir Brian Langstaff?

[Maria Caulfield]

I thank the hon. Gentleman for his question. We take this issue very seriously, and we have already made interim payments to those infected. The Minister for the Cabinet Office came to the Dispatch Box in April when Brian Langstaff’s review was published, and we are working night and day to respond to those recommendations and get that plan out as soon as possible. We recognise the impact on families, and on those infected and affected.

[Dr Caroline Johnson (Sleaford and North Hykeham) (Con)]

I refer Members to my entry in the Register of Members’ Financial Interests. Today Dr Mike McKean, a respiratory consultant and vice-president of the Royal College of Paediatrics and Child Health, said that vaping is “fast becoming an epidemic” among children. The Royal College of Paediatrics and Child Health said that we should ban disposable cigarettes—e-cigarettes—“without a doubt”. Will the Minister do all he can to prevent children from starting vaping, and will he back my ten-minute rule Bill, which was first introduced in this place in February, to ban disposable e-cigarettes?

[Neil O’Brien]

I pay tribute to my hon. Friend and her leadership on this issue. Many of the ideas that she has been putting forward are already in the plan that we set out to tackle youth vaping, including the creation of the “flying squad”, the ongoing call for evidence on youth vaping, and all the different things we could do to continue to drive it down.

[Stephanie Peacock (Barnsley East) (Lab)]

The non-surgical breast cancer service in South Yorkshire is facing a critical shortage of oncologists. The shortage is so severe that patients are being told to expect months between referral and appointment. What immediate steps are the Government taking to ensure that patients, no matter their postcode, see a specialist as soon as they need to do so?

[Steve Barclay]

As reflected in the fact that we met the faster diagnosis standard in February and March for the first time, we are investing more in our cancer services to meet the recognised increase in demand. That is why more patients are being treated sooner and survival rates are improving. I am happy to look at any variation at a local level because of workforce pressure, but the diagnostic centres and surgical hubs are all part of our response to the increase in cancer demand.

[Jack Brereton (Stoke-on-Trent South) (Con)]

A number of dentists across north Staffordshire are stopping NHS treatment, which is extremely concerning. Some of my constituents have reported that they are being told they will have to pay either £120 a year or £14 a month to stay on the books. Will my hon. Friend look into those serious concerns and meet me to discuss the matter further?

[Neil O’Brien]

I am happy to meet my hon. Friend to discuss those important issues further.

[Daisy Cooper (St Albans) (LD)]

I recently learned that my local integrated care board is not allowed to spend the money it wants to spend on securing the best location for a new GP practice and health centre. The reason is that Treasury rules, which are used by the District Valuer Services, are not keeping up with market rents. Will the Secretary of State speak to his colleagues in the Treasury to fix that, before we face an epidemic of health centres and GPs leaving town and city centres, and moving to ring-road locations away from the populations they serve?

[Steve Barclay]

I am very happy to look at that specific issue and raise it with Treasury colleagues.

Point of Order

Tuesday 6th June 2023 Commons Chamber

12:37

[Sir Christopher Chope (Christchurch) (Con)]

On a point of order, Mr Speaker. You were in the Chair yesterday when the Secretary of State for Levelling Up, Housing and Communities expressed his enthusiasm for the publication of impact assessments for new legislation. The Renters (Reform) Bill is awaiting Second Reading, and there are two impact assessments, neither of which have yet been made available to Members of the House. What can be done to ensure that they are made available before we have Second Reading?

[Mr Speaker]

The good thing is that you have certainly put that on the record. I am sure that those on the Treasury Bench are listening carefully, and will be knocking at your door when you get back. I would expect those impact studies to be made available.

Bill Presented

Pets (Theft and Importation) Bill

Presentation and First Reading (Standing Order No. 57)

Tim Farron, supported by Richard Foord, Ed Davey, Wendy Chamberlain, Sarah Olney, Munira Wilson, Christine Jardine and Wera Hobhouse, presented a Bill to prevent and punish the theft of dogs and to deter the unlawful importation of certain animals into Great Britain; and for connected purposes.

Bill read the First time; to be read a Second time Friday 24 November, and to be printed (Bill 317).

Care Supporters

1st reading
Tuesday 6th June 2023 Commons Chamber

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

12:38

[Dan Carden (Liverpool, Walton) (Lab)]

I beg to move,

That leave be given to bring in a Bill to provide for a right for a user of health and care services to be accompanied by a care supporter; and for connected purposes.

The care of a loved one is not an optional extra; it is an absolutely central part of dignified care. Separation and isolation have a deeply harmful impact on individuals, but particularly on those who are vulnerable. For those who are approaching the end of life, the impact cannot be understated. My Bill seeks to recognise those fundamental points, and put them into law.

Throughout the pandemic, guidance proved consistently inadequate. It applied with levels of uncertainty and variability that led to a postcode lottery as separate settings interpreted it differently. There is a clear lack of recourse when guidance is applied incorrectly as well as a wide power imbalance between service users and care providers. Those problems will not be solved through further tweaks to guidance.

Past practice has shown that older and disabled people, those affected by dementia, stroke and other impairments, and those with a mental or physical disability are some of the most powerless people in our society. They often do not have the ability to challenge decisions made at care homes or in hospitals. In the worst circumstances—these are not uncommon—they cannot defend themselves against abuse, neglect or inhumane conditions.

The devastating impact of all of that affects not only those in receipt of care but their loved ones. Further, poor-quality data on visiting means that we cannot appreciate the true scale of the problem. Data does not capture where visits are allowed only for a short period of time, where young people are disallowed from visiting or where people cannot see parents, husbands or wives directly in their rooms. There is also a principle at stake: do we as a society give the right to state or private institutions—namely, hospitals and care homes—to deny us contact with family and loved ones because they are in receipt of their care, or do we believe that we should keep our right to maintain contact with loved ones regardless of health and care needs? I think it is obvious. I firmly believe that we should make a clear choice of the latter and enshrine that right in law in this House.

There is a dangerous hangover of restrictions from covid and a lack of urgency from the Government to change things. The need for the Bill is therefore as pivotal as it was during the pandemic.

Before I turn to the steps that I have taken to put this measure into law, I pay tribute to the determined efforts of campaigning organisations in this area: in particular, the Rights for Residents campaign group and the Relatives and Residents Association, which have merged to become Care Rights UK, and John’s Campaign. The work of Jenny Morrison, Diane Mayhew, Helen Wildbore, Julia Jones, Nicci Gerrard and Kate Meacock has been inspirational. They are all in the Public Gallery watching our proceedings. I also place on record my appreciation to the hon. Members for Chatham and Aylesford (Tracey Crouch) and for St Albans (Daisy Cooper) and the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts), who have supported the campaign from its origin. Quite simply, I would not be introducing the Bill if it were not for their collective efforts; I thank them all for that.

In November 2021, I tabled an amendment to the Health and Care Bill that aimed to guarantee visiting rights to hospitals and care homes. The amendments were not moved, but I hoped that the Department would take note. Many people across the country spent the winter of 2021 separated from those most important to them. In March 2022, we invited those affected to an event where they could share their experiences with parliamentarians. The testimonies that we heard were harrowing and the collective trauma was palpable. That powerful event left those present united in the view that a legal right was needed to secure the right of care users to nominate an individual to provide support or care in all circumstances.

Many at the event were disappointed by the following inaction from Government. None the less, following it, 60 Members signed a letter to the right hon. Member for Bromsgrove (Sajid Javid), who was at that point Secretary of State for Health and Social Care, pushing for a legal right to be put into law. We were again left disheartened by the Department’s response, which prescribed updated guidance as the solution to any problems. However, we pressed on.

In October last year, in response to our Backbench debate, the Minister for Social Care, the hon. Member for Faversham and Mid Kent (Helen Whately), stated that she did not

“consider the status quo acceptable”—[Official Report, 27 October 2022; Vol. 721, c. 494.]

and that she was “on the case.” Those words, with the promise of action, meant a lot to those affected. Campaign groups waited to see what shape that promised action would take and I trust the Minister for Social Care has been working on the issue. She attended our meeting this morning to meet campaigners. I say to her that we now need to see action.

It is important to remember that the denial of contact has not just taken place in care homes, but in hospitals too—I can account for that from personal experience. Therefore, any legislative response must address both sides of the health and social care system. I hope that those on the Treasury Bench will hear this point. It is not just colleagues in the House but more than 70 organisations across the sector who are pressing for action in this area: Mencap, the Alzheimer’s Society, Mind, Age UK, Care UK, Healthwatch—the list goes on. We have support from all parties across the House. In fact, I have witnessed few other issues on which there has been such universal agreement in the House.

There are only a few months left of this parliamentary Session. We expect the King’s Speech in autumn and a general election next year. It is clear that the time to act is now. Will the Government commit to legislating for a care supporter in the next King’s Speech? Will all major parties commit to putting this legal right into their manifestos? We have a Bill ready to be implemented. I thank Tom Gillie from Matrix Chambers and Carolin Ott from Leigh Day for their hugely valuable work on the draft legislation. Let me quickly outline how the Bill would operate in practice.

The Bill would place a duty on health and care providers to allow a service user to be accompanied by a care supporter. A care supporter is defined as a person nominated as such by the service user. Importantly, the right would attach to the service user, and only following their clear and informed consent. The Bill places a duty on providers to allow unrestricted in-person support from at least one essential care supporter, nominated by the service user. The Bill also provides safeguards for those exceptional circumstances in which the duty on providers would not apply. The Bill provides alternatives if the care supporter’s face-to-face access is entirely excluded. The provider would then have to take reasonable steps to facilitate contact by other means. Finally, the Bill would also provide means for appeal and proper enforcement, two measures that are currently almost impossible for those trying to maintain contact with their loved ones in care settings. As always, I stand ready to work with the Government on any steps that can be taken to make the Bill as effective as possible.

No one in this House was left untouched by the trauma of the coronavirus pandemic. We can all agree on the principle that whether it is the state, a privately run care home or a hospital, it does not have the right to separate us from our family and loved ones. We must now take the opportunity to learn from that trauma and bring in legislation.

Question put and agreed to.

Ordered,

That Dan Carden, Tracey Crouch, Daisy Cooper, Liz Saville Roberts, Marsha De Cordova, Caroline Lucas, Alicia Kearns, Hilary Benn, Maria Eagle, John Nicolson, Dame Caroline Dinenage and Steve Brine present the Bill.

Dan Carden accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 24 November, and to be printed (Bill 318).

Committee on Standards

Tuesday 6th June 2023 Commons Chamber

Motion made, and Question put forthwith (Standing Order No. 149(14)),

That this House:—

(1) approves the Ninth Report of the Committee on Standards, HC 1276;

(2) endorses the recommendation in paragraph 40; and

(3) accordingly suspends Margaret Ferrier from the service of the House for a period of 30 days, beginning on Wednesday 7 June 2023.—(Fay Jones.)

12:49

00:00

Division 245

Ayes: 185

---

Labour: 127
Conservative: 28
Scottish National Party: 14
Liberal Democrat: 9
Plaid Cymru: 3
Independent: 2
Alliance: 1
Green Party: 1

Noes: 40

---

Conservative: 32
Democratic Unionist Party: 2
Alba Party: 2
The Reclaim Party: 1

British Nationality (Regularisation of Past Practice) Bill (Allocation of Time)

Ordered,

That the following provisions shall apply to the proceedings on the British Nationality (Regularisation of Past Practice) Bill—

Timetable

(1)(a) Proceedings on Second Reading and in Committee of the whole House, any proceedings on Consideration and proceedings on Third Reading shall be taken at today’s sitting in accordance with this Order.

(b) Proceedings on Second Reading shall (so far as not previously concluded) be brought to a conclusion three hours after the commencement of proceedings on the Motion for this Order.

(c) Proceedings in Committee of the whole House, any proceedings on Consideration and proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion five hours after the commencement of proceedings on the Motion for this Order.

Timing of proceedings and Questions to be put

(2) When the Bill has been read a second time:

(a) it shall, despite Standing Order No. 63 (Committal of bills not subject to a programme order), stand committed to a Committee of the whole House without any Question being put;

(b) the Speaker shall leave the chair whether or not notice of an Instruction has been given.

(3)(a) On the conclusion of proceedings in Committee of the whole House, the Chair shall report the Bill to the House without putting any Question.

(b) If the Bill is reported with amendments, the House shall proceed to consider the Bill as amended without any Question being put.

(4) For the purpose of bringing any proceedings to a conclusion in accordance with paragraph (1), the Chair or Speaker shall forthwith put the following Questions in the same order as they would fall to be put if this Order did not apply:

(a) any Question already proposed from the chair;

(b) any Question necessary to bring to a decision a Question so proposed;

(c) the Question on any amendment moved or Motion made by a Minister of the Crown;

(d) the Question on any amendment, new Clause or new Schedule selected by the Chair or Speaker for separate decision;

(e) any other Question necessary for the disposal of the business to be concluded; and shall not put any other Questions, other than the Question on any motion described in paragraph (15)(a) of this Order.

(5) On a Motion so made for a new Clause or a new Schedule, the Chair or Speaker shall put only the Question that the Clause or Schedule be added to the Bill.

(6) If two or more Questions would fall to be put under paragraph (4)(c) on successive amendments moved or Motions made by a Minister of the Crown, the Chair or Speaker shall instead put a single Question in relation to those amendments or Motions.

(7) If two or more Questions would fall to be put under paragraph (4)(e) in relation to successive provisions of the Bill, the Chair shall instead put a single Question in relation to those provisions, except that the Question shall be put separately on any Clause of or Schedule to the Bill which a Minister of the Crown has signified an intention to leave out.

Consideration of Lords Amendments

(8)(a) Any Lords Amendments to the Bill may be considered forthwith without any Question being put; and any proceedings interrupted for that purpose shall be suspended accordingly.

(b) Proceedings on consideration of Lords Amendments shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement; and any proceedings suspended under sub-paragraph (a) shall thereupon be resumed.

(9) Paragraphs (2) to (7) of Standing Order No. 83F (Programme orders: conclusion of proceedings on consideration of Lords amendments) apply for the purposes of bringing any proceedings to a conclusion in accordance with paragraph (8) of this Order.

Subsequent stages

(10)(a) Any further Message from the Lords on the Bill may be considered forthwith without any Question being put; and any proceedings interrupted for that purpose shall be suspended accordingly.

(b) Proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement; and any proceedings suspended under sub-paragraph (a) shall thereupon be resumed.

(11) Paragraphs (2) to (5) of Standing Order No. 83G (Programme orders: conclusion of proceedings on further messages from the Lords) apply for the purposes of bringing any proceedings to a conclusion in accordance with paragraph (10) of this Order.

Reasons Committee

(12) Paragraphs (2) to (6) of Standing Order No. 83H (Programme orders: reasons committee) apply in relation to any committee to be appointed to draw up reasons after proceedings have been brought to a conclusion in accordance with this Order.

Miscellaneous

(13) Standing Order No. 15(1) (Exempted business) shall apply to proceedings on the Bill.

(14) Standing Order No. 82 (Business Committee) shall not apply in relation to any proceedings to which this Order applies.

(15)(a) No Motion shall be made, except by a Minister of the Crown, to alter the order in which any proceedings on the Bill are taken, to recommit the Bill or to vary or supplement the provisions of this

(b) No notice shall be required of such a Motion.

(c) Such a Motion may be considered forthwith without any Question being put; and any proceedings interrupted for that purpose shall be suspended accordingly.

(d) The Question on such a Motion shall be put forthwith; and any proceedings suspended under sub-paragraph (c) shall thereupon be resumed.

(e) Standing Order No. 15(1) (Exempted business) shall apply to proceedings on such a Motion.

(16)(a) No dilatory Motion shall be made in relation to proceedings to which this Order applies except by a Minister of the Crown.

(b) The Question on any such Motion shall be put forthwith.

(17)(a) The start of any debate under Standing Order No. 24 (Emergency debates) to be held on a day on which the Bill has been set down to be taken as an Order of the Day shall be postponed until the conclusion of any proceedings on that day to which this Order applies.

(b) Standing Order No. 15(1) (Exempted business) shall apply to proceedings in respect of such a debate.

(18) Proceedings to which this Order applies shall not be interrupted under any Standing Order relating to the sittings of the House.

(19)(a) Any private business which has been set down for consideration at a time falling after the commencement of proceedings on this Order or on the Bill on a day on which the Bill has been set down to be taken as an Order of the Day shall, instead of being considered as provided by Standing Orders or by any Order of the House, be considered at the conclusion of the proceedings on the Bill on that day.

(b) Standing Order No. 15(1) (Exempted business) shall apply to the private business so far as necessary for the purpose of securing that the business may be considered for a period of three hours.—(Fay Jones.)

British Nationality (Regularisation of Past Practice) Bill

2nd reading
Tuesday 6th June 2023 Commons Chamber

Second Reading

13:02

[The Minister for Immigration (Robert Jenrick)]

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

The Bill seeks to address a technical legal issue identified by the Home Office with a long-standing policy that operated from 1983 until the early 2000s under successive Governments of both parties, relating to the criteria for determining whether European economic area nationals living in the UK during that period were “settled”.

The concept of settlement is important. The British Nationality Act 1981 defines it as being ordinarily resident in the UK and without restriction on the period for which one may remain, and it is also referred to as “free from immigration time restrictions”. As many Members will know, the Act introduced changes for acquisition of citizenship, shifting from a “birth on soil” approach to a requirement for at least one parent to be British or settled in the UK at the time of the birth. Thus the issue of whether or not an individual is settled has a knock-on effect on the citizenship of any children born to that individual in the United Kingdom.

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

I thoroughly welcome the Bill. I have a constituent who falls into this category. She had to prove her nationality, although, having lived here for 33 years—this is the only country she ever knew, and English is the only language she has ever spoken—she did not even know that she was not British until she had to apply for a passport. She was estranged from her mother, and therefore found herself having to have very painful conversations with a family member to prove that she was what she had always thought she was. Does the Minister agree that the Bill will sort out issues of that kind?

[Robert Jenrick]

I strongly agree with the hon. Lady. The Home Office would argue that her constituent has always been British and should be considered so, but there has been a degree of legal doubt following the recent case, so it was right that we brought forward this legislation at the earliest opportunity and that it is retrospective, so that all constituents who have been concerned can know that, clearly in law, they are and have always been British citizens.

[Theresa Villiers (Chipping Barnet) (Con)]

I warmly welcome this piece of legislation. I have a constituent whose son falls into this category and it was frankly alarming for him to be told that his citizenship was in jeopardy. It is really good that the Government have acted so swiftly and I urge everyone in the House to support this legislation. I hope that we will see it on the statute book as soon as possible.

[Robert Jenrick]

I am grateful to my right hon. Friend. She has raised the case to which she referred with me to represent her constituent. As she says, being a citizen of this country is an important and special status, and nobody should be in doubt about whether that is truly legally sound. The Bill puts that beyond doubt, and I am pleased that we have been able to do this expeditiously. I am grateful for her support and, I suspect, that of Members on both sides of the House today.

During the period from 1 January 1983 to 1 October 2000, individuals lawfully exercising a free movement right in England, Scotland, Wales or Northern Ireland—for example, as workers—were considered by the Home Office to be free from immigration time restrictions. Consequently, they were treated as settled for nationality purposes and any children born to them during that period were regarded as British citizens. This interpretation was supported by Home Office policy documents and guidance.

However, as I have just referenced, recent litigation, while not directly challenging that historical approach, has exposed a legal technicality suggesting that it was not correct and that EEA nationals in exercise of a free movement right were not in fact settled, as their residence should always have been deemed subject to immigration time restrictions. This has understandably led to concerns about the citizenship status of individuals born in the UK in the relevant period to parents exercising a free movement right who had always thought themselves to be British and been treated as such by successive Governments. Given the passage of time and the volumes of people potentially affected, the House will appreciate that this uncertainty is not something that we wish to countenance.

[Mr Gregory Campbell (East Londonderry) (DUP)]

Hopefully the Bill will proceed with support from both sides. On a directly related matter, the Minister will be aware that there are thousands of citizens across the United Kingdom, many of them in Northern Ireland, who were born a few miles across the border in the Irish Republic after 1948 but who are currently not allowed to get a British passport. Technically, even though they reside in the UK, have lived in the UK for decades, are taxpayers in the UK and vote in the UK, they cannot get a British passport without naturalising at a cost of £1,300. They have the support of the Northern Ireland Affairs Committee of this House and they have cross-community support in Northern Ireland. Once the passage of this Bill has concluded, will the Minister undertake to look again at this matter, revise it, and hopefully come forward with a proposition that will alleviate the problem?

[Robert Jenrick]

I am grateful to the hon. Gentleman. This is an issue that I am aware of and I would be happy to have a further conversation with him and to give it further thought. We want a fair system whereby British citizenship is available to all those who are naturalised and who have lived here for sustained periods, and a system that is as accessible as possible.

To continue the point I was making, legislating quickly and proactively to provide reassurance is the right thing to do. The Bill will operate by confirming in law the previous policy position. This will protect the nationality rights of people born in the UK to parents who were considered settled on the basis of exercising a free movement right and those who registered or naturalised as British citizens based on that policy. The Bill also clarifies when EEA nationals could be considered settled on the basis of exercising an equivalent right in Jersey, Guernsey or the Isle of Man, which are part of the United Kingdom for nationality purposes. It is right that this approach is adopted in those locations to ensure that no one loses out on a citizenship right to which they have a reasonable expectation of being entitled, based on published policy and operational practice.

[Jim Shannon (Strangford) (DUP)]

Like my hon. Friend the Member for East Londonderry (Mr Campbell), I fully support and welcome the Bill.

I am not sure whether the Minister is aware that, last week, a former leader of Sinn Féin said that, when Unionists talk to Sinn Féin about a united Ireland, it would be Sinn Féin and the Republic of Ireland that would be handing out British passports. I am very proud to have a British passport and the benefits it brings, so will the Minister put it clearly on the record today that people born in the United Kingdom of Great Britain and Northern Ireland will have a British passport; that it will be the Minister, the Government and the Department that will be handing out those passports; and that Sinn Féin and the Republic of Ireland Government will never hand out a British passport to any citizen, and nor should they?

[Robert Jenrick]

The hon. Gentleman makes an important point, and he is right to make that point. I will restate it for him, if that would be helpful.

I want to be clear that the Bill is not about creating new British citizens. These are people who have always considered themselves to be British, and whom successive Governments have also considered as such. They may have lived here, worked here, had children here and organised their lives based on policy published under both Conservative and Labour Governments confirming that they are British. It is essential that we provide them with legal certainty as to their citizenship status as soon as possible, so they can continue their lives in our country with the same rights and entitlements they have always enjoyed.

I think we can all agree that this short but important Bill seeks to do the right thing by putting the citizenship status of affected individuals beyond doubt, and I urge all colleagues on both sides of the House to support its quick passage.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the shadow Minister.

13:12

[Stephen Kinnock (Aberavon) (Lab)]

I thank the Minister for that introduction and overview of the Bill. It is not often that I find myself in full agreement with him but, in this case, I am very pleased to say that we are on the same page. I am used to sparring with him—verbally, of course—on a range of topics on which we have not always seen eye to eye, but the Opposition welcome the Bill and the Government’s commitment to its expedited passage.

This is a narrow piece of legislation that addresses a specific issue. Its purpose is not to implement any changes in legal entitlements to British citizenship but, rather, to codify in primary legislation what has been the established position of successive Governments of both parties. As such, we have not seen any reason to table amendments and we are happy to work with the Government to facilitate the Bill’s swift passage and implementation.

The Bill covers individuals born in the UK to parents from EU countries between 1983 and 2000. It codifies their right to citizenship, in line with successive Governments’ understanding of the British Nationality Act 1981. Many of these people will have held a British passport for many years. However, recent litigation in the Roehrig case raised potential problems for those applying for a passport for the first time. The explanatory notes suggest that only a small number of first-time applications have been made, which the Home Office placed on hold in October 2022, as a result of the Roehrig case. The Government’s position is that the Passport Office will be able to move forward with those applications once this Bill takes effect. Beyond that, the total number of people who may be covered by this legislation remains unclear. According to the equality impact assessment:

“no official figures exist to highlight the scale of the cohort impacted. However, we have combined data from two sources to reach the conclusion that there were in the region of 167,000 children born to EEA mothers between 1983 and 2000”.

So I want to ask the Minister a few questions. I totally understand if he cannot answer all of them now, but it would be useful for the House to have some clarification. I reiterate that we are ready to support the Government in moving this Bill through Parliament as quickly as possible. My questions are primarily on issues of implementation, on which further detail of the Government’s plans would be helpful to the House. Given the substantial gaps in the official data available, does the Home Office have any plans to work with the Office for National Statistics to carry out further research on the number of people who may be affected, particularly in terms of first-time applicants for a British passport?

Secondly, the explanatory notes state that once the Bill is enacted, the Home Office will be in a position to resume the processing of passport applications placed on hold in October last year. Will the Minister confirm that that means the Passport Office will restart the decision-making process immediately upon the Bill’s entry into force? Thirdly, what steps does the Home Office plan to take to ensure that the individuals affected are provided with access to advice and support on their rights and, where relevant, on what action they may need to take to obtain confirmation of their citizenship status and whether and how they may need to apply for a passport? Fourthly, for those who have already applied for their passport and others who may wish to do so, will the Minister confirm whether there will be any expedited procedures to process such applications without any further delays? Finally, will he clarify the Government’s position on any fees that may be payable and whether there are any plans to waive fees for the applicants in question? I feel that in the coming months Members from both sides of the House may well come across some of those issues in their constituencies, and I am sure everyone would find it helpful to have that information on those points. As I say, the Opposition support this Bill and are happy to facilitate its rapid passage through Parliament.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the Scottish National party spokesperson.

13:17

[Alison Thewliss (Glasgow Central) (SNP)]

I, too, do not seek to detain the House for long on this Bill. It is a rare day indeed when I agree with something that the Immigration Minister is bringing forward—let us get that point down and hope we never return to it again. [Laughter.]

The SNP welcomes the Bill for the clarity it will bring, particularly given the confusion that has been caused by different approaches taken by the Home Office on the question of what “settled” means in the context of free movement. I am reassured by the briefing that we received from the Project for the Registration of Children as British Citizens, the3million, the Immigration Law Practitioners Association and Amnesty International, which also welcomes the Bill. The way in which the Home Office has consulted with them on it is welcome and something the Home Office ought to be doing more often. The briefing states:

“We are grateful to the Home Office for consulting with us immediately prior to this Bill’s introduction. Nonetheless, the history of this matter provides a further example of our concerns that British citizenship, and British nationality law from which the right to citizenship is derived, has been badly mistreated by successive Governments over a period of some decades. This is but one stark example.”

So before the Government get too much into slapping themselves on the back for this Bill, they should be cognisant of the fact that many issues associated with citizenship remain, many of which we will see in our surgeries, as local MPs.

I do not seek to reiterate what others have said, but I am concerned at the lack of official statistics identified in the equality impact assessment. It mentions 167,000 children born to EEA mothers between 1983 and 2000, but there are an unknown number of grandchildren also in this cohort. So what further work are the Government doing both to identify these people to let them know what their rights are and what they should do, and to make sure that Home Office and Passport Office officials who are making the decisions are also very clear about the situation. The lack of clarity over this has been a real problem. It should be the case that everybody, when applying for their first passport, knows that they are doing so properly and have the right to do so to avoid any confusion. There is nothing worse than people applying for passports and then there being an unexpected delay in the process. We are coming into that season where we will get those kinds of inquiries.

I understand from the Library briefing that the Home Office had stopped issuing first-time British passports to people affected by this, so it would be useful to hear from the Minister exactly how many people are in this paused group and what will be happening now to ensure that they get their passports. I expect that there has been some delay involved as a result of that passport being paused—people will not have been able to travel or do the things that they wanted to do and they will want to know when they will get those passports once the process restarts. It would be useful to have a picture of exactly how many people are affected, and I am sure that the Passport Office will have those figures.

I also note that the equality impact assessment references “The Windrush Lessons Learned Review” of Wendy Williams. This uncertainty around status speaks to some of the difficulties caused for the Windrush generation, but as the UK Government have ditched some of their commitments on upholding the principles from the review, can we be assured that the confusion that has led up to this point will not be recreated in a new EEA Windrush? People who have the right to be here, who have settled status, and who have the right to apply for a British passport should face no further impediment or confusion in applying for their passport.

In closing, there is a lot more that the Government need to do to improve the processes around citizenship and applying for passports and to make sure that there is a clearer, simpler, cheaper and more effective route to citizenship in the UK. I am certain that an independent Scotland will seek to make that route much clearer, much simpler and better so that people have the right to be here and can fully participate as Scottish citizens in an independent Scotland, and I look forward to that day.

13:21

[Robert Jenrick]

I am grateful to the hon. Members for Aberavon (Stephen Kinnock) and for Glasgow Central (Alison Thewliss) for their support for the Bill. Hopefully, this spirit of unity will be contagious for other legislation shortly to return to the House.

Let me reply to the specific and valid questions. First, on statistics, I will not repeat the numbers that the hon. Gentleman raised. Those are the best assessment that the Home Office currently has. We do not have a plan to ask the ONS, or any other body, to do further, deeper research. We do not feel that that is necessary, primarily because, by virtue of this piece of legislation, the rights of those British citizens will be confirmed. It will be retrospective, so those individuals should not need to do anything now, other than the small category of individuals whose passport applications were paused. We will need people at the Home Office and the Passport Office to process those applications as soon as possible.

The hon. Lady asked how many applications had been paused. As of 26 May, 95 passport applications were on hold. We are in communication with those affected to keep them updated. Once the legislation passes, it will be beyond doubt that they are British citizens in law and have always been so and we will be able to proceed with their passport applications. I will ask the Passport Office to process their applications expeditiously, so that any inconvenience they may have been put through can be resolved as quickly as possible. There will not be a need for them to pay any additional fee beyond what they have already paid, which will be the normal fee for a British citizen renewing their passport or applying for a first-time passport.

[Alison Thewliss]

When I have experienced casework delays with the Department for Work and Pensions, a consolatory payment is sometimes offered to people where there have been extensive delays. Given that only 95 people are involved, would that be appropriate in this case?

[Robert Jenrick]

We have not considered that, and I do not think it is necessary. We are of course sorry that those individuals have been inconvenienced; that was never the Home Office’s intention, either today or in the past. This litigation was unexpected and we have set out to remedy it as quickly as possible. I hope the hon. Lady will appreciate that we have brought forward this legislation quickly and, as she rightly noted, we have tried to consult relevant stakeholders so that there are good communications prior to its introduction.

The hon. Lady also mentioned Windrush; that is a very serious situation, but is a quite a different situation from the one we find ourselves in here. In this legislation we are reflecting a position that has existed in policy and guidance for several decades. We have responded quickly to implement the legal change necessary, following the court case heard in October last year, to provide that certainty. As I said in my opening remarks, we are not creating any new British citizens here, but recognising the citizenship of that cohort in law whom we had always believed existed and reflected in policy.

We remain absolutely committed, of course, to righting the wrongs of Windrush, whether through the Windrush compensation fund or more broadly, as she referred to, through ensuring that the Home Office makes good on its commitments to the Wendy Williams review. That is something we take very seriously.

In terms of any other impacts upon the individuals concerned here, there should be none. Once we have processed the remaining passport applications, those British citizens can and should continue with their lives as previously. We will ensure that Home Office staff, Passport Office personnel and any relevant stakeholders are properly trained so that, should people come forward with concerns in the weeks, months or years ahead as a result of this case, we can reassure them that, once this has been settled in law, they are and have always been British citizens.

I hope that responds to all the points made. With that, I shall conclude my remarks.

Question put and agreed to.

Bill accordingly read a Second time.

British Nationality (Regularisation of Past Practice) Bill

Committee of the whole House
Tuesday 6th June 2023 Commons Chamber

Considered in Committee (Order, this day)

[Dame Rosie Winterton in the Chair]

[The First Deputy Chairman of Ways and Means (Dame Rosie Winterton)]

I remind hon. Members that in Committee they should not address the Chair as Deputy Speaker. Please use our names. Madam Chair, Chair, Madam Chairman or Mr Chairman are also acceptable.

Clause 1

Immigration restrictions to be disregarded in certain cases

Question proposed, That the clause stand part of the Bill.

[The First Deputy Chairman]

With this it will be convenient to consider clause 2 stand part.

13:27

[Robert Jenrick]

Given the short nature of the Bill, I will not delay the Committee unduly, but I want to explain briefly the nature of the clauses.

Clause 1 amends the British Nationality Act 1981 to confirm that an individual exercising a free movement right in the UK in the relevant period was not subject to restrictions on the period for which they could remain. The aim of this clause is to provide legal certainty on the citizenship status of individuals born in the relevant period to a parent who was considered settled on the basis of living in the United Kingdom and exercising a free movement right here, or those who registered or naturalised based on that policy.

The clause does not create new British citizens where there would previously have been no reasonable expectation, on the basis of published policy and operational practice, of being British. It does not change anything for people who have always been considered British; rather, it simply confirms in law the position they have always been in. The clause does not necessitate that they make a separate application to become British and is not related to the UK’s departure from the European Union. This issue has arisen separately and has been highlighted by the recent domestic legislation.

13:33

For England, Scotland, Wales and Northern Ireland, the remedial period is 1 January 1983 to 1 October 2000. That is the period between the British Nationality Act 1981 coming into force and the introduction by regulations of the requirement for European economic area nationals to have indefinite leave to be regarded as free from immigration time restrictions. During the remedial period, an EEA national was treated as settled in the UK if they were living here and exercising a free movement right. Clause 1 confirms that position.

The remedial periods specified in clause 1 are different in the Bailiwick of Jersey, the Bailiwick of Guernsey and the Isle of Man. Those jurisdictions fall within the territorial extent of the BNA and people born there are automatically British citizens. However, the Crown dependencies have their own legal systems and there are variations in the times at which they treated EU citizens as free of immigration restrictions. Clause 1 reflects those differences to ensure that someone who had a reasonable expectation of being British under previous published policy or operational practice keeps the citizenship to which they thought they were entitled.

Clause 1(2) also specifies that the measures introduced by subsection (1) are to be treated as always having had effect. I understand that that approach is somewhat unusual, as it is usually right and proper that the consequences of past events can be understood in the context of the law as it stood at the time, not what it may become in the future, but the case for retrospection in this situation is clear.

Were the measures set out in clause 1 prospective only, it would mean that affected individuals would become British citizens only after the date when the measure came into force. That could have wide-ranging consequences for their ability to live, work and study in the UK, and may inadvertently leave individuals liable to repay benefits or healthcare costs to which they would not technically have been entitled at the time if they were not then, in law, a British citizen. It would also have knock-on effects for the children or family members of those affected individuals who became British citizens by virtue of their status.

It is clear, therefore, that in order to restore such individuals to the position that they and the Home Office have always considered them to be in, and to ensure that they suffer no adverse consequence through no fault of their own, the measures set out in clause 1 must be retrospective.

In conclusion, long-standing Government policy will now, by virtue of the Bill, be confirmed in law, thereby protecting the nationality status of people born in the UK to parents who were considered settled on the basis of exercising a free movement right, and those who registered or naturalised as British citizens based on that policy. That is clearly the right thing to do for the countless UK-born people who have long considered themselves to be British. For those reasons, I commend the clauses to the Committee.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clause 2 ordered to stand part of the Bill.

The Deputy Speaker resumed the Chair.

Bill reported, without amendment.

Bill, not amended, considered.

Third Reading

13:34

[Robert Jenrick]

I beg to move, That the Bill be now read the Third time.

If only all Home Office Bills were as smooth as this one. It is a pleasure to speak on Third Reading and to use this opportunity to thank my officials at the Home Office for the good work they have done in producing this Bill in quick time, which provides the legal certainty that a significant number of people in this country—our fellow citizens—deserve. It is absolutely right that we put their citizenship status beyond doubt as quickly as possible, so that they are in no way disadvantaged and can continue their lives with the same rights and entitlements they have always enjoyed.

I thank all those who have prioritised the passage of the Bill through the House, including the House authorities and the Bill team. I particularly thank representatives from the Project for the Registration of Children as British Citizens, the Immigration Law Practitioners’ Association and the3million, which have worked collaboratively and fruitfully with Government officials as the Bill has been developed.

I also thank the hon. Member for Aberavon (Stephen Kinnock) and the hon. Member for Glasgow Central (Alison Thewliss) for their support, which is appreciated, and Members on both sides of the House who came today to represent cases that had arisen in their constituencies. They can now report to their constituents, as we all can, that this important matter is being resolved. For the reasons I have set out, I urge all Members to support the Bill in its passage to the other place.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the shadow Minister.

13:34

[Stephen Kinnock]

I echo everything that the Minister has just said and add our thanks to his officials and all the key organisations that have played a role in shaping the Bill. I also want to say to the Minister that this is very much a one-off—this sort of outbreak of violent agreement is a bug, not a feature. As I have said, we on the Labour Benches are very happy to support the rapid facilitation of the Bill through Parliament.

[Madam Deputy Speaker]

I call the SNP spokesperson.

13:34

[Alison Thewliss]

I thank the Minister. This will perhaps be a lesson to him to bring forward Bills that he has consulted on and that are less contentious than those he usually brings to the House. I would also like to make him an offer: now that he has the whole afternoon free, I have 145 outstanding immigration cases that I would be happy to discuss with him.

Question put and agreed to.

Bill accordingly read the Third time and passed.

Business without Debate

Tuesday 6th June 2023 Commons Chamber

Delegated Legislation (committees)

Ordered,

That the Measure passed by the General Synod of the Church of England, entitled Diocesan Stipends Funds (Amendment) Measure (HC 1413), a copy of which was laid before this House on 24 May, be referred to a Delegated Legislation Committee.— (Steve Double.)

Business of the House

Ordered,

That notices of Amendments, new Clauses and new Schedules to be moved in Committee in respect of the Electronic Trade Documents Bill [Lords] may be accepted by the Clerks at the Table before it has been read a second time.—(Steve Double.)

Public Accounts

Ordered,

That James Cartlidge be discharged from the Committee of Public Accounts and Gareth Davies be added.—(Mr Marcus Jones, on behalf of the Committee of Selection.)

Errol Graham: DWP and Safeguarding Adults Board Inquiry

Tuesday 6th June 2023 Commons Chamber

13:40

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I start by thanking Mr Speaker and his office for granting me this very important Adjournment debate in relation to Errol Graham, and in particular the safeguarding review by Nottingham City safeguarding adults board that was published a couple of weeks ago.

It was June 2018 when bailiffs came to Errol Graham’s flat to evict him and discovered that he was dead. Errol was penniless—he had no gas, no electricity and no water. His only food was two out-of-date cans of fish. At his 2019 inquest, the coroner confirmed that Errol had weighed four and a half stone when he died, and that the cause of death was starvation. He was 57 years old.

Errol suffered from severe mental ill health. He had been in receipt of employment and support allowance and housing benefit since 2014, until he missed a fitness for work assessment in 2017. He did not respond to the Department for Work and Pensions when it tried to contact him by phone and in person, and eight months later his ESA and housing benefit payments were halted, in accordance with DWP policy.

The coroner’s report fell short of issuing a section 28 prevention of future deaths notice to the DWP over Errol’s death, as the DWP witness at the time stated that a safeguarding policy review was underway by the Department. However, in July 2020 the coroner had to write to the DWP again, as it had failed to supply her with the new safeguarding policy. It is a bit moot whether there has actually been a revised safeguarding policy. Certainly, information from the House of Commons Library suggests that there have just been tweaks around the edges. There has been no new safeguarding policy, and as we will see as I proceed, the impacts have been felt elsewhere.

Just before recess, Nottingham City safeguarding adults board published an independent review of what it described as the “shocking and disturbing” events that led to Mr Graham’s tragic and lonely death. In that report, the board concluded that multiple failings by the DWP, Mr Graham’s GP practice and his social landlord meant that chances to save him were missed. Moreover, the Department for Work and Pensions also failed to share the severity of Mr Graham’s illness with other agencies, including his landlord at Nottingham City Homes. Knowing Mr Graham’s illness, the DWP failed to contact his GP for potential reasons as to why he was not engaging with the Department. Significantly, it has now emerged that the Department failed to disclose information from Errol’s 2014 work capability assessment to that independent safeguarding review. A communiqué from Nottingham City Council on 17 May stated that the independent chair of Nottingham City safeguarding adults board, Lesley Hutchinson, had said:

“We can confirm that the 2014 documents were not provided”

by the DWP

“for consideration by the review author.”

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Lady for bringing forward this debate. She has compassion and a heart for people who are in trouble, and we commend her for that. She often brings forward things that we all add our support to. Each day in our offices we witness people who have fallen foul of the DWP: those with extreme health difficulties, people who are desperate, people at their lowest—that is just the way they have had it. Does she feel that the DWP needs to be aware of those who need help, and that DWP staff need to be trained accordingly so that they can spot those who are in trouble? It is sometimes a knack, but I believe that is important.

[Debbie Abrahams]

The hon. Gentleman is absolutely right. In fact, he was in the Chamber back in February 2020 when we had the previous debate and described some of these events. Three years on, nothing has changed. He is absolutely right: not only would it be nice, but it is a requirement. The DWP has a safeguarding requirement and a responsibility to ensure that the claimants who come to its attention are adequately protected.

[Lilian Greenwood (Nottingham South) (Lab)]

I congratulate my hon. Friend on securing today’s debate, which obviously highlights the sad death of my constituent Errol Graham. The purpose of a safeguarding adults review is not to hold an individual or organisation to account, but it is about agencies learning lessons to improve future practice. If tragedies such as Errol’s death are to be prevented in future, which I am sure is what we all want, surely all agencies must share the relevant information with the board. Does she share my concern—I know she does—that in failing to share that 2014 assessment, the DWP did not assist the local authority in its really important duty in that respect?

[Debbie Abrahams]

My hon. Friend is absolutely right. That is the purpose of this Adjournment debate. The situation has gone on for too long, with information not shared and information lost—I will come to that later on. There have been concerns about how the Department has acted to safeguard not just individual claimants but the information it has on claimants, so that it can learn those lessons and improve its practices.

This information from the 2014 work capability assessment—do not forget, Errol died in 2018—expressed in the clearest language that he would not be fit to work “indefinitely”. That was the language of the assessor. It was not him saying that he was not fit to work; it was the language on that 2014 work capability assessment, which was not presented either to the safeguarding review or to the High Court judge. It also was not presented at the coroner’s inquest. The presenting of that report to the organisations that should have had it when making assessments of the circumstances of Errol’s death has been carefully avoided. This is serious stuff. I know that the Minister is relatively new in the role, but I want to know why that 2014 work capability assessment was not provided specifically to the recent safeguarding review board. I will go back to the other instances in a moment.

My hon. Friend is absolutely right about to Errol. Errol was her constituent, and I have had long-standing contact with Mr Graham’s daughter-in-law, Alison Burton. She has said that the Department’s behaviour raises “serious questions” about its honesty and transparency, given the Department’s knowledge of Errol’s significant mental distress and its failure to disclose it to the safeguarding review. That can be taken in conjunction with the Department’s failure to provide peer review reports into the deaths of claimants to the independent reviewers of the work capability assessment, Professor Harrington and Dr Litchfield. Members will be aware that there was a statutory requirement to undertake independent reviews of the work capability assessment. There were two separate assessors; one was Professor Harrington, and the other was Professor Litchfield. None of the peer reviews—there have been a number of different names for what happens when the Department investigates the deaths of claimants—or serious case reviews and so on were provided to the independent reviewers.

The response I got when I asked various urgent questions on this issue a few years ago was, “Well, they did not ask for them.” Then—this is all on the record; I was going over it last night when I was writing this speech— in response to the urgent question that I secured on this issue, the answer was, “Well, they were lost. We no longer have these reports, so we cannot provide them.” It is clear to see why there is a crisis in confidence in the Department and why there is a lack of trust from not just families, but claimants themselves.

This issue needs to be seen in the context of the recent action by the Equality and Human Rights Commission, which 14 months ago issued a section 23 notice to the Department over its concerns about the evidence that the Department is discriminating against disabled claimants. For 14 months, there has been nothing—nothing—from the Department, and there has been nothing from this Government. Surely as a Government they would see that the equality laws that have been set for everyone should also apply to them, but, no, 14 months on, there has been nothing. I will let people draw their own conclusion on what drives that, but if we say that the first duty of any Government is to keep their citizens safe, I think we would all agree that the DWP is clearly failing as far as disabled claimants are concerned.

In a 21st-century civilised society, the circumstances that led to Errol’s death should shock us all, but Errol’s death, unfortunately, is just one of many, and there is a pattern here. In addition to the lack of safeguarding provisions that led to Errol’s death—even though, as I say, there was an awareness from 2014 of his severe condition—many social security claimants have been found fit to work and have then died. For example, a freedom of information application in 2019 showed that 274 claimants a month—a month—who had been found fit for work subsequently died within six months, which is a much higher mortality rate than for the population as a whole.

The true scale and causes of these deaths are simply unknown. In an answer to a written question I submitted last year, it was revealed that between 2019—so since the inquest into Errol’s death—and June 2022, 140 more claimants and 39 serious harms were being investigated by the DWP, but that is only what the Department says it is investigating. The National Audit Office, in its review in 2020, said that it is probably a much, much higher figure.

Errol’s story is an example of the Department’s failure to safeguard claimants, and subsequently to avoid any form of scrutiny or accountability. Any Government who were confident in their policies would be open to scrutiny, but there is a pattern of avoidance by the Department, including the refusal to provide various reports and data to the Work and Pensions Committee, on which I sit. I have asked this in the past, but I am going to give the Minister and the Government one more opportunity: will the Government convene an independent inquiry into the scale and causes of the deaths of social security claimants? The Minister is welcome to intervene on me, but if he wants to include that in his response to the debate, that would be absolutely fine.

The seven Nolan principles of public life apply to us all—Ministers and MPs. Two of them are openness and transparency, but unfortunately, those principles are absent from the Minister’s Department. In an area such as social security, this could not be more important. We need a paradigm shift in our social security system from one that demonises to one that is supportive and enabling. Disappointingly, I see a re-emergence of the vile shirker-scrounger narrative from 10 years ago, and a focus on working-age sick and disabled people and social security claimants.

I do not know whether there is anybody from The Daily Telegraph in the Gallery, but I have to point out that I saw its shameful editorial last week. Not only was it ignorant in some of the assertions made, but it has what I see as absolutely disgraceful rhetoric in trying to vilify social security claimants. Just like our NHS, our social security system should be there for any one of us in our time of need, providing dignity and security for all.

In 2020, I read from a list of people who we knew had died. At the time, I said:

“The death of any person as a result of Government policy is nothing less than a scandal… For too long, the Department has failed to address the effects of its policies. It must now act. Enough is enough.”—[Official Report, 24 February 2020; Vol. 672, c. 155.]

Three years later, 140 more families are grieving. When will the Government sort this out?

13:54

[Lilian Greenwood (Nottingham South) (Lab)]

I thank my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) for all her work on this issue, and for the support that she has offered to Errol Graham’s family. Errol’s death was shocking and disturbing. We cannot change what happened, but we can and must learn the lessons. I am sure that all Members of the House have experience of supporting constituents who are facing work capability assessments, and know the anxiety that such reviews can induce.

I was not intending to speak today, but reading the safeguarding adults board review again prompted me to want to share this. At his inquest, a letter written by Errol was read out. His family believe that he had intended to take it along to the work capability assessment. We do not know that; the letter is undated and it was never sent, but I think it gives an insight into how he felt, and I hope the House will indulge me if I share it now—it is relatively short.

“Dear Sir/Madam,

I’ve had to put in writing how I feel as I find it hard to express myself. I wish I could feel and function normally like anyone else, but I find this very hard. I can’t say I have a typical day because some are good, not many, clouded by very bad days. I get up as late as I can so that the day doesn’t seem too long. On a good day I open my curtains, but mostly they stay shut. I find it hard to leave the house on bad days. I don’t want to see anyone or talk to anyone. It’s not nice living this way. I’m afraid to put my heating on and sit with a quilt around me to keep me warm. I dread any mail coming, frightened of what it might be because I don’t have the means to pay, and this is very distressing. Most days I go to bed hungry, and I feel I’m not even surviving how I should be. Little things that people brush off are big things to me.

I have come on my own today because I have been unable to share how I feel with anyone because I don’t think they would understand. It has made me ill to come here today. It is a big ordeal for me. My nerves are terrible and coping with this lifestyle wears me out. Sometimes I can’t stand to even hear the washing machine and I wish I knew why. Being locked away in my flat I feel I don’t have to face anyone. At the same time, it drives me insane. I think I feel more secure on my own with my own company, but wish it wasn’t like that. I’m not a drinker and have never been so don’t think that I’m here to abuse the system. Please judge me fairly. I am a good person but overshadowed by depression. All I want in life is to live normally. That would be the answer to my prayers. Thank you to all for taking the time to read this letter, I really appreciate it. I don’t know how I’ll cope when I see you all. I hope I will be OK.”

I appreciate that the DWP did not know that that was how Errol felt, and neither did his social landlord or his GP. The coroner concluded that none of them were individually responsible for his death. However, the DWP was aware that Errol had a mental ill health condition.

In his response, will the Minister set out the steps that he is taking now to ensure that other claimants, both those currently supported by the DWP and those who might need support in the future, get the support that they need, and do not have their benefits cut off as a result of their poor mental health and inability to engage with the outside world and the agencies that should be there to support them? Errol’s case is utterly heartbreaking. We cannot change what happened, but we must learn the lessons for others and prevent future deaths of that sort.

13:59

[The Minister for Disabled People, Health and Work (Tom Pursglove)]

I congratulate the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) on securing this important debate. It is, of course, always tragic when a person dies having been in receipt of benefits, and my sincere condolences remain with Mr Graham’s family. I assure you, Madam Deputy Speaker, that where there is an allegation that the DWP’s actions may have in any way contributed to this outcome, we take it very seriously.

To begin with, I want to set in context the nature of the recommendations made by Nottingham City safeguarding adults board. Five recommendations were made, with three specific to Nottingham City Homes, one applying to all agencies—with an emphasis placed on Nottingham City Homes—and one specifically aimed at the DWP, working jointly with Nottingham City safeguarding adults board. I confirm to the House that the Department for Work and Pensions has accepted that recommendation, and my officials will work constructively and collaboratively with the safeguarding board on that. We will approach taking that recommendation forward in good faith and with proper dialogue.

I also want to give some background on the case in question. Mr Graham was a claimant in receipt of employment and support allowance until his claim was closed in October 2017 following non-attendance at a work capability assessment. In the interim, he had not responded to calls, text messages or two home visits by the Department. Mr Graham had ceased to engage with his family, healthcare and other statutory agencies over a number of years, and was found deceased in his flat in or around June 2018. An inquest into Mr Graham’s death was held in June 2019.

Since July 2020, my Department has co-operated fully and openly with Nottingham City safeguarding adults board on this very sad case. I am pleased to see that its report notes the “significant changes” that the DWP has made in its support of vulnerable claimants since 2019.

The board wrote to the Department in July 2021 confirming that it would be carrying out a safeguarding adults review into the death of Errol Graham. For the avoidance of doubt, it might be helpful to quote exactly how the board explained the scope of the review from its own terms of reference. It said:

“The scope period for the review is from June 2017—the date EG’s benefit review process began—until 20.06.2018, the date EG unfortunately died. However, if agencies have information of relevance to the ToR before that date…it would be helpful if they briefly summarised that as well”.

The Department complied with the board’s request, providing it with detailed information in scope of the review as well as briefly summarising information from before 2017, as we were asked to do.

[Debbie Abrahams]

The Minister may be coming on to this—I hope he is. Will he ensure that he responds to my point about why the details of the 2014 work capability assessment were not made available to the review?

[Tom Pursglove]

If I may, I will make a little progress on this point. I am aware that a journalist has claimed that officials hid information from the board, but that is simply not true. They had no reason to do so. As explained, the board had the information that it requested. The board’s published report includes a wording change stating that agencies were asked to “provide additional information” and not “briefly summarise” as in previous versions. That slight wording change could have led to the wrong impression that the DWP was asked to provide every single form and document relating to Mr Graham’s benefit claim—even those outside the scope of the review. I believe that may have contributed to claims that information was hidden.

It is important to note that we know that the board extensively reviewed the findings of the 2021 judicial review proceedings in which a former Secretary of State for Work and Pensions successfully defended a claim in the High Court, challenging some of the decisions made in this case. That judgment referred to the content of a previous work capability assessment of Mr Graham’s. The safeguarding board clearly understood from that, and the other information provided, what officials had discovered about Mr Graham’s state of mind. It is difficult to see what the DWP would have gained by hiding it when the board had stated its review of the findings. Officials continue to engage with the Nottingham City safeguarding adults board and we welcome having further conversations with it if needed.

It is important to understand the role of safeguarding adult boards in the context of Mr Graham’s case. National guidance on safeguarding adults boards states:

“The purpose of a SAR is not to hold any individual or organisation to account, because there are other processes and regulatory bodies available for that purpose; they are about learning lessons for the future”.

Those other processes include the coronial process, where coroners investigate unnatural deaths and where the cause of death is unknown. Nottingham City safeguarding adults board’s role was to look at how agencies worked together to support Mr Graham and what lessons it could learn from his tragic death, not to re-examine the court’s previous judgment or the coroner’s conclusions. My Department’s key obligation is to ensure that claimants receive the correct benefit entitlement at the right time. While we do not have a statutory duty of care or safeguarding duty, that does not mean that we do not care. We often need to consider a customer’s particular circumstances to provide the right service or ensure appropriate support. We can help direct our claimants to the most appropriate body to meet their needs.

[Debbie Abrahams]

Why, then, did the witness speaking on behalf of the Department at the 2019 inquest make the point that a new safeguarding policy was being developed by the Department, if the Government do not have a safeguarding policy requirement?

[Tom Pursglove]

What I will do is set out the actions the Department is taking to ensure that our safeguarding obligations are upheld and that we support claimants in an appropriate way that is responsive to their needs and circumstances. The concrete actions the Department has taken to improve matters relating to this issue in recent years reflect previous learning.

I would also like to deal specifically with the point the hon. Lady made about holding a public inquiry. I am not in a position today to be able to commit to that. Clearly, attempted suicides and suicides are very complex issues. Where there is an allegation that the Department’s actions may have contributed to that outcome, we take it very seriously. There already exists a wide, independent and transparent system for investigating such issues. Causes of death are determined by a doctor or coroner. Where a coroner identifies a risk of other deaths occurring in similar circumstances, they will issue a prevention of future deaths report to highlight that. The independent case examiner investigates serious complaints relating to the DWP. They report to the complainant and publish case studies of findings in the ICE annual report. The parliamentary and health service ombudsman also looks at serious cases and publishes reports on its website. For those reasons it is not our intention to set up an independent inquiry, but there are steps we have taken as a Department to improve matters in relation to safeguarding and I just want to set those out for the House, because they have already been implemented to support vulnerable customers. The initiatives were also highlighted, as I say, in Nottingham City safeguarding adults board report as changes the Department has implemented to improve services, and that point was acknowledged.

First, we have introduced more than 30 advanced customer support senior leaders to support colleagues when dealing with customers who may be vulnerable or at-risk. Central to the role of those senior leaders is the work they take forward with external partners and organisations, creating relationships to support citizens and providing the critical link into external agencies’ escalation routes and enabling cross-agency case collaboration. The Department also conducts internal process reviews, which form a core part of the Department’s overall approach to learning and help inform improvement activities across all DWP product lines. Internal process reviews can make recommendations to help the Department to improve its processes, policies or quality of service. We commission them in response to a range of claimant circumstances or events, which include, but are not limited to, suicides, suicide attempts and self-harm. Not all internal process reviews conducted after a death relate to suicide. Therefore, those classified as relating to a death should not automatically be read as suicide cases. Furthermore, the fact that an internal process review is being carried out does not mean that the DWP has been found culpable in the circumstances or events leading to a claimant’s death or a serious incident.

Similarly, the serious harm that prompts an internal process review investigation may relate to self-harm or a suicide attempt, or may also refer to other events that are considered to merit investigation. We have also broadened the range of circumstances where an internal process review is carried out, to increase our learning from cases where outcomes have been poor for claimants.

The Department has also set up the serious case panel, which meets quarterly to consider themes and issues that have arisen across DWP service lines, in order to agree changes and improvements. The panel has commissioned and implemented several changes since it was introduced. They include changes made to visiting vulnerable customers, where they have ceased to engage with the Department. Following two unsuccessful visits where concerns about the customer remain, the claim will no longer automatically be closed. Instead, the case will be escalated to an advanced customer support senior leader, who will liaise with relevant external agencies to assure the customer’s safety.

The Department has also made changes to guidance on administering large payments to customers who may face challenges receiving or handling such payments. The panel has also prioritised the delivery of mental health awareness training to customer-facing colleagues. The training will build colleague capability and confidence in supporting customers with mental health conditions. Going forward, I am keen to engage with stakeholders, including from mental health charities and other organisations, to continue to make improvements to our services for our customers. I recently met Rethink, a mental health charity that was representing the families of some benefit claimants who have passed away. It is my intention to organise a future meeting with a representative member of the families, in partnership with Rethink.

I want to address a specific point that the hon. Lady has raised a number of times in this House about the Equality and Human Rights Commission in relation to the ongoing section 23 agreement discussions. We continue to engage with that in good faith, but we must act in accordance with our legal obligations. The negotiations provided for under the Equality Act 2006 have been expressly confidential. Therefore, I cannot give a running update on the contents of the discussions. There are legal provisions under section 6 of the Equality Act that prevent disclosure of further details. Discussions are subject to general law principles. Parts of the discussions are also subject to legal privilege.

[Debbie Abrahams]

I have two brief points. First, if we have had all the updates on safeguarding, why have 140 more people died in the intervening period? The Minister seems to be saying, “Everything is fine, we’ve done this,” but still, the Department is investigating 140 people, and we do not know the true figure. Secondly, there is nothing in the 2006 Act that says that the Department has to take 14 months to reach an agreement on how to improve the services and not discriminate against disabled people. There is nothing—I have gone through it.

[Tom Pursglove]

I do not accept the hon. Lady’s initial point. I take these matters incredibly seriously. I am engaging thoroughly with stakeholders around these issues. She will recognise my approach to meeting Rethink and bereaved family members to discuss these issues and to work out what more we can do to improve these processes and in an open, transparent and constructive way. That is how I approach my responsibilities, and that will continue to be the case. These structures have been put in place, as the safeguarding board recognises, which are considerable improvements in recent times. Of course, we must always keep under review the appropriateness of these structures. We must make sure that learning from specific cases is captured. Processes and the way in which we go about our activities as a Department must be responsive to the issues raised through those formal structures.

On the section 23 discussions that are ongoing, the hon. Lady will recognise that this is a matter not just for the DWP. The discussions are going on between two parties, and both sides need to act in good faith in reaching conclusions. It is right that we do that in response to the commission from the EHRC, and in a way that is compatible with the requirements under the Equality Act. That is what we will continue to do. As I have said before, when I have a substantive update that I am able to provide to the House, I will do that. I have made that undertaking, which I reiterate today. It would be inappropriate for the Department to discuss the contents of what may or may not be included within an agreement, or the contents of any information that may be published in future, while confidential discussions are ongoing.

My Department strives to be a learning organisation, continually seeking to better understand the experiences of our customers and any challenges that they may face in their interactions with us. We are committed to using that learning to develop our systems and processes and to make improvements to the experience of our customers. In fact, that underpins all the work we are doing through our White Paper reforms, to ensure that people have a better experience of the journey within the benefits system and that we provide benefits that are more flexible.

[Lilian Greenwood]

I have listened with interest to what the Minister has said. As a result of the changes that the Department has made, is he confident that no one else will face the same position Errol faced because he disengaged? Nobody denies that he was not engaging with his GP, housing provider or the DWP, but the tragic fact is that he starved to death as a result of that failure to engage. The Minister described the new layer that is now in place if there are two failed safeguarding visits, but is he confident that someone whose mental ill health prevents them from engaging, as is set out so clearly and poignantly in the letter, would not face the same position of having their benefits withdrawn and, as a result, having nothing to eat, in a freezing cold home, with no utilities connected?

[Tom Pursglove]

It is impossible not to be incredibly moved and concerned by what happened to Errol Graham. Both Ministers and officials in the Department are absolutely determined that the learning that comes out of this case, which is reflected in the recommendation that has been made by the safeguarding adults board, must be acted upon. We must continue to consistently ensure that where issues that require improvement are highlighted, we take steps in reality, in terms of our processes, to make sure that that follows on.

It is significant that there are now checks that ensure people’s cases are not suspended or terminated when we have not heard back from them, and that we have senior customer service leaders who work on a cross-agency basis to ensure that people are properly supported. They were the right steps to take and they have been informed by cases like this. It is right that we continue to constantly monitor and understand our claimants’ circumstances and needs, and that we improve the journey through the benefits system more generally, wherever there is an opportunity to do that.

That is why I am passionate about the reforms that were announced through the White Paper, including matching expert assessors with particular conditions, monitoring fluctuating conditions more effectively and ensuring that people have the smoothest possible journey in their experience and interaction with the DWP. The hon. Lady has my commitment that we will continue to learn. We will undertake to make sure that all our processes are fit for purpose and kept under review, and to make changes when they are required.

That is the constructive spirit in which I am approaching our conversations with Rethink, for example, which has an insight into mental health conditions, so that we can understand what more we can do to ensure our processes are responsive to those with mental health conditions. I know Rethink participated in some engagement with my officials only yesterday.

[Debbie Abrahams]

My final point is that Rethink is calling for an independent public inquiry into the death. Will the Minister be supporting that campaign by Rethink?

[Tom Pursglove]

The position relating to a public inquiry is the position that I set out earlier, but within our existing processes and the transparency applying to them, I am keen to hear from Rethink and other charities what more they think we can do, or which parts of those processes they think could be improved. I approach those conversations very much in that spirit.

Ultimately, our measures will ensure that we provide benefits for, in particular, our most vulnerable customers in a more flexible and compassionate manner, and that their interactions with us constitute a positive experience. We will continue to drive forward change within the Department on the basis of what we have learnt. I appreciate the opportunity I have had this afternoon to describe some of the work that the Department is doing, “on the ground floor”, to ensure that our systems are as responsive as possible, and that all learning is captured and acted upon.

Question put and agreed to.

14:20

House adjourned.

Draft Animal By-Products, Pet Passport and Animal Health (Fees) (England) (Amendment) Regulations 2023

Tuesday 6th June 2023 General Committees

The Committee consisted of the following Members:

Chair: Sir Robert Syms

† Abrahams, Debbie (Oldham East and Saddleworth) (Lab)

† Churchill, Jo (Vice-Chamberlain of His Majesty's Household)

† Crosbie, Virginia (Ynys Môn) (Con)

† David, Wayne (Caerphilly) (Lab)

† Glindon, Mary (North Tyneside) (Lab)

† Hamilton, Mrs Paulette (Birmingham, Erdington) (Lab)

† Harrison, Trudy (Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs)

† Hollern, Kate (Blackburn) (Lab)

† Jones, Mr David (Clwyd West) (Con)

† Kruger, Danny (Devizes) (Con)

† McCartney, Jason (Colne Valley) (Con)

† Mayhew, Jerome (Broadland) (Con)

† Skidmore, Chris (Kingswood) (Con)

† Sobel, Alex (Leeds North West) (Lab/Co-op)

Throup, Maggie (Erewash) (Con)

Turner, Karl (Kingston upon Hull East) (Lab)

† Vara, Shailesh (North West Cambridgeshire) (Con)

Huw Yardley, Committee Clerk

† attended the Committee

First Delegated Legislation Committee

Tuesday 6 June 2023

[Sir Robert Syms in the Chair]

Draft Animal By-Products, Pet Passport and Animal Health (Fees) (England) (Amendment) Regulations 2023

14:30

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Trudy Harrison)]

I beg to move,

That the Committee has consider the draft Animal By-Products, Pet Passport and Animal Health (Fees) (England) (Amendment) Regulations 2023.

The draft regulations, which were laid before the House on 18 April, will make amendments to the Animal Health (Miscellaneous Fees) (England) Regulations 2018 and the Animal By-Products and Pet Passports Fees (England) Regulations 2018 to ensure that there is no under-recovery or over-recovery of costs. The amendments do not contain any changes to policy—only the fees that the Animal and Plant Health Agency can collect on behalf of the Secretary of State.

The fees are designed to fund APHA’s frontline statutory animal health services for safeguarding animal health and supporting our domestic and international trade, which are: consignments inspection and licensing of facilities involved in the trade of livestock semen, eggs and embryos; inspection and licensing of facilities involved in the handling of animal by-products not destined for human consumption; inspection of live animals and certain high-risk products arriving from third countries at our border control posts; surveillance of commercial poultry flocks and licensing of private laboratories carrying out tests under our national salmonella control programme; and registration and approval of premises intended to export breeding poultry from Great Britain. The proposed amendments also include the removal of the fees regime for pet passports, as pet passports are no longer issued in Great Britain.

Following public consultation, new fees for those services were last introduced in 2018, with a commitment to businesses that fees would be reviewed biennially. The agency’s focus of effort and resources on EU exit work and covid meant that the reviews were halted and consequently the fees have not been refreshed. As a result, full cost recovery is not being achieved and the schemes are operating at a deficit of between £0.4 million and £0.5 million per year. That shortfall is being funded by the public purse.

New fee schedules to deliver full cost recovery have now been developed. No additional margins or profits have been included, and my counterparts in His Majesty’s Treasury have approved the approach taken. The average increase in fees to achieve full cost recovery would be 51%. Given the substantive cost increases for some fees, we are proposing to continue the approach agreed in the 2018 regulations and apply phased increases over two years, with 50% of the fee uplift delivered in July 2023 and full cost recovery delivered from July 2024.

The exception to that is border control post services and some other small-value activities, where we are proposing to increase fees and achieve full cost recovery from July this year. The uplift in border control post fees from 2023 will help us to avoid operational conflicts with changes that may follow the review of the new borders and boundaries fees process. Delaying the uplift further would only increase the gulf between cost and recovery, and the impact of the changes would be even greater because of the impact of compounding factors such as inflation.

APHA has continued to engage with business users and associations on service performance and fees following the 2018 revision, and those businesses are aware of the proposed new fee schedules. We are not aware of any negative responses to the fee changes, and engagement inquiries have been focused solely on service performance. The statutory instrument applies to England only. The Scottish and Welsh Governments are following a similar approach and have introduced corresponding legislation. I commend the draft regulations to the Committee.

14:30

[Alex Sobel (Leeds North West) (Lab/Co-op)]

I thank the Minister for outlining the need for the changes. This is a wide-ranging SI, increasing the fees charged by the Animal and Plant Health Agency for a range of services, from bovine semen control to salmonella control programmes. While His Majesty’s Opposition support the enforcement of our agreed regulatory framework, I worry about steep and speedy increases in associated costs. The SI provides for an average median uplift in fees of 41% for services related to animal by-products, 53% for services related to salmonella controls, 21% for services related to poultry health and 65% for services related to breeding controls.

The explanatory memorandum notes that, due to a lack of uprating in recent years and the need to ensure cost recovery, the increases to fees are much higher than inflationary rises. While we accept that the increases will be phased over two years, can the Minister understand that those are not the only additional costs that many businesses will face? Given that the current rate of inflation is over 8% and some key agricultural inputs have increased by over 100% in the last 18 months, is she convinced that this is the right time for such stark increases in costs?

The explanatory memorandum also notes that regular reviews of the 2018 fees were put on hold due to “reviewed agency prioritisation” in the light of Brexit preparations and the covid pandemic, hence the need for a significant increase now. It states that the responsible body

“had already engaged with key stakeholders for the businesses affected and are planning to re-engage”,

but no further information is offered. What form did the previous engagement take? What was the general response? When will the next round of engagement commence and what will it look like?

Will the Minister inform us when the next fees review will be undertaken, and can she give an assurance that we will not see a repeat of the issues that seem to have been encountered this time around? Our agri-businesses are struggling, and additional unexpected costs will not help. I worry that capacity issues at the Department for Environment, Food and Rural Affairs, unquestionably due to challenges post Brexit and post the pandemic, are hitting our sector at the wrong time. We would appreciate an update on how many more SIs on issues pertaining to the sector are delayed and when we should expect them. I look forward to her response.

14:30

[Trudy Harrison]

I understand that any cost to business at this time is difficult, but I reiterate the need to do this now. Leaving it any later would clearly add further costs to the public purse. The fees have not been uplifted for five years—four years for ABP—so the gap between costs and income have been a burden to taxpayers. The longer fees are left unchanged, the more the gap will increase.

As I said, APHA is spreading the increase over two years. That is absolutely in response to the overall 51% increase. The instrument will maintain the alignment of animal health inspection fees with UK Government policy to recover the full costs of official checks. That is essential, and will become more expensive if we do not manage the work that APHA does effectively arising from commercial activities.

As I outlined, the draft regulations ensure that UK Government policy for full cost recovery for our animal health services is maintained and that the costs of providing those services are met solely by the businesses using the services. In answer to the hon. Gentleman’s question about when they will next be reviewed, we will endeavour to get back to the trajectory of reviewing biennially—that is, every two years. I fully commend the draft regulations to the Committee.

Question put and agreed to.

14:30

Committee rose.

Energy Bill [ Lords ] (Fourth sitting)

Committee stage
Tuesday 6th June 2023 Public Bill Committees

The Committee consisted of the following Members:

Chairs: Dr Rupa Huq, † James Gray, Mr Virendra Sharma, Caroline Nokes

† Afolami, Bim (Hitchin and Harpenden) (Con)

† Blake, Olivia (Sheffield, Hallam) (Lab)

† Bowie, Andrew (Parliamentary Under-Secretary of State for Energy Security and Net Zero)

† Britcliffe, Sara (Hyndburn) (Con)

Brown, Alan (Kilmarnock and Loudoun) (SNP)

† Clarkson, Chris (Heywood and Middleton) (Con)

† Fletcher, Katherine (South Ribble) (Con)

Gideon, Jo (Stoke-on-Trent Central) (Con)

Jenkinson, Mark (Workington) (Con)

† Levy, Ian (Blyth Valley) (Con)

† McCarthy, Kerry (Bristol East) (Lab)

† Morrissey, Joy (Beaconsfield) (Con)

† Nichols, Charlotte (Warrington North) (Lab)

† Owatemi, Taiwo (Coventry North West) (Lab)

† Shelbrooke, Alec (Elmet and Rothwell) (Con)

† Western, Andrew (Stretford and Urmston) (Lab)

† Whitehead, Dr Alan (Southampton, Test) (Lab)

Sarah Thatcher, Chris Watson, Committee Clerks

† attended the Committee

Public Bill Committee

Tuesday 6 June 2023

(Morning)

[James Gray in the Chair]

Energy Bill [Lords]

09:25

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

On a point of order, Mr Gray. Before we proceed with the impressive first group of amendments and new clauses, may I use your offices to inquire about other new clauses that it was indicated to me, in a meeting with the Minister just before we started proceedings, would be tabled at an early date? Two sets of new clauses have appeared on the amendment paper, but another two, pertaining to Great British Nuclear and assistance for energy-intensive industries, have not yet been tabled, although we are now well into our deliberations on the Bill. Have you had any indication that they are about to be tabled, and if so could you share that information?

[The Chair]

I am most grateful to the hon. Gentleman for that point of order and for giving me advance notice of it, which gave me the opportunity to discuss the matter —unofficially of course—with officials. They tell me that both new clauses will be tabled imminently—one today, I think, and one very shortly. I hope that satisfies him.

Clause 56

Chapter 1: interpretation

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Andrew Bowie)]

I beg to move amendment 23, in clause 56, page 50, line 15, at end insert—

“‘carbon dioxide transport and storage counterparty’ has the meaning given by section 59(3);

‘carbon dioxide transport and storage revenue support contract’ has the meaning given by section section 59(2);”.

This amendment and Amendment 28 substitute new labels for existing labels and are consequential on NC29 and NC31.

[The Chair]

With this it will be convenient to discuss the following:

Government amendments 25, 24 and 26 to 28.

Clause stand part.

Government amendments 29 to 35.

Clause 57 stand part.

Government amendments 36 to 54.

Amendment 111, in clause 61, page 55, line 6, leave out subsection (8).

Whether or not a producer is an eligible low carbon hydrogen producer should be determined solely by the revenue support regulations, which should reference, among other things, the Low Carbon Hydrogen Standard. If the producer meets the objective criteria to be set out in the regulations, it should not be open to the Secretary of State to determine that that producer will not contribute to a reduction in emissions.

Government amendment 55.

Amendment 112, in clause 62, page 55, line 28, leave out subsection (4).

Whether or not a producer is an eligible low carbon hydrogen producer should be determined solely by the revenue support regulations, which should reference, among other things, the Low Carbon Hydrogen Standard. If the producer meets the objective criteria to be set out in the regulations, it should not be open to the Secretary of State to determine that that producer will not contribute to a reduction in emissions.

Government amendments 56 to 58, 60 and 70 to 74.

Government new clause 29—Designation of hydrogen transport counterparty.

Government new clause 30—Direction to offer to contract with eligible hydrogen transport provider.

Government new clause 31—Designation of hydrogen storage counterparty.

Government new clause 32—Direction to offer to contract with eligible hydrogen storage provider.

[Andrew Bowie]

I confirm to the hon. Member for Southampton, Test that the new clause on energy-intensive industries will be tabled tomorrow, and the new clause on Great British Nuclear will be tabled early next week. It is a delight to return to the Committee and to serve under your chairmanship again, Mr Gray.

The amendments that I will outline are consequential on the amendments made to introduce hydrogen transport and hydrogen storage business models. Hydrogen business models are required to encourage investment in, and the development of, hydrogen transport and storage infra-structure, alongside the existing provisions in clauses 61 and 62 for hydrogen production business models. The development of hydrogen transport and storage infrastructure, such as pipelines and salt caverns, represents the next critical step in the growth of the hydrogen economy.

Government amendment 23 makes it clear that existing references in clause 59 to transport and storage relate to the transport and storage of carbon dioxide and not to hydrogen. New clauses are to be added to make specific provision for hydrogen transport and storage. Government amendments 28, 29, 36, 38, 40, 42 to 52, 60 and 73 are consequential on Government amendment 23. The amendments substitute new definitions for existing definitions to distinguish carbon dioxide transport and storage from hydrogen transport and storage. Clause 56 provides the meanings and definitions of various terms used in chapter 1.

Government amendment 30 supports the establishment and operation of revenue support contracts as part of the hydrogen transport and hydrogen storage business models. That amendment, alongside other amendments to chapter 1 of part 2 of the Bill, provide the Secretary of State with the power to make regulations to enable hydrogen transport and storage revenue support contracts to be put in place. Those revenue support contracts, as part of the business models, will remove market barriers, most notably high up-front costs and uncertain financial investment returns. The overcoming of those barriers should encourage investment in, and the development of, hydrogen transport and storage infrastructure.

Clause 57 provides the Secretary of State with a power to make regulations about revenue support contracts, which will be known as revenue support regulations. A number of provisions throughout the chapter set out matters that regulations made under the overarching power in clause 57(1) may cover. Revenue support regulations are intended to underpin relevant business model schemes and to help to ensure that revenue support contracts are allocated and managed effectively, and that stable funding flows are in place.

Government amendment 53 seeks to clarify that contracts can be offered only to eligible low-carbon hydrogen producers and that, after the point of contract signature, it is for the contracts to stand on their own two feet and to set the parameters of the ongoing support that they provide. That approach is similar to that of the contracts for difference for renewables, in respect of which it has worked to great success. The amendment ultimately helps to ensure that projects and their investors are absolutely clear on the terms of their support and should help to inspire significant confidence in the new regime. Government amendments 26, 32, 33, 54 and 55 are consequential on Government amendment 53.

Government amendment 56 seeks to clarify that contracts can be offered only to eligible carbon capture entities and that, after the point of contract signature, it is for the contracts to stand on their own two feet and to set the parameters of the ongoing support that they provide. That approach is similar to that of the contracts for difference for renewables, in respect of which, again, it has worked to great success. The amendment ultimately helps to ensure that projects and their investors are absolutely clear on the terms of their support and should help to inspire significant confidence in the new regime. Government amendments 25, 34, 35, 57 and 58 are consequential on Government amendment 56.

Government new clause 29 will enable the designation of a counterparty to administer hydrogen transport revenue support contracts. The delivery of the hydrogen transport revenue support contracts is intended to be via private law contracts between eligible hydrogen transport providers and a hydrogen transport counterparty. The counterparty, which is the subject of the new clause, will manage the contracts and act as a conduit for funding.

The proper functioning of a revenue support counter-party is fundamental to the stability of the revenue support contracts. As the counterparty will be responsible for managing large amount of funds to meet its payment obligations, it is essential for the Secretary of State to exercise a degree of control over how it operates. Government new clause 29 allows the Secretary of State to designate a consenting person to be a counterparty for hydrogen transport revenue support contracts.

Government new clause 30 confers powers on the Secretary of State to issue a direction to a hydrogen transport counterparty. The counterparty will offer a contract to a hydrogen transport provider with a proposed project that the Government wish to support. That will enable a hydrogen transport provider to receive revenue support, which will help to remove market barriers associated with its infrastructure project. In turn, this should see the deployment of hydrogen transport infrastructure in the UK, thereby further supporting the hydrogen economy.

Government new clause 30 will ensure that revenue support regulations can make further provision about a direction, such as the terms that may or must be specified in said direction. Those regulations must include the meaning of “eligible” in relation to hydrogen transport providers with whom the counterparty may enter into a contract. Additionally, the powers are expected to be exercised in relation to successful projects that apply for revenue support under the hydrogen transport business models.

Government new clause 31 will enable the designation of a counterparty to administer hydrogen storage revenue support contracts. The delivery of the hydrogen storage revenue support contracts is intended to be via private law contracts between eligible hydrogen storage providers and a hydrogen storage counterparty. The counterparty, which is the subject of the new clause, will manage the contracts and act as a conduit for funding.

The proper functioning of a revenue support counterparty is fundamental to the stability of the revenue support contracts. As the counterparty will be responsible for managing large amount of funds to meet its payment obligations, it is essential for the Secretary of State to exercise a degree of control over how it operates. Government new clause 31 allows the Secretary of State to designate a consenting person to be a counterparty for hydrogen storage revenue support contracts.

Government new clause 32 confers powers on the Secretary of State to issue a direction to a hydrogen storage counterparty. The counterparty will offer a contract to a hydrogen storage provider with a proposed project that Government wish to support. That will enable a hydrogen storage provider to receive revenue support, which will help to remove market barriers associated with its infrastructure project. In turn, this should see the deployment of hydrogen storage infra-structure in the UK, thereby further supporting our growing hydrogen economy.

Government new clause 32 will ensure that revenue support regulations can make further provision about a direction, such as the terms that may or must be specified in said direction. The regulations must include the meaning of “eligible” in relation to hydrogen storage providers with whom the counterparty may enter into a contract. Additionally, the powers are expected to be exercised in relation to successful projects that apply for revenue support under the hydrogen storage business models.

I commend to the Committee the Government amendments, Government new clauses 29 to 32 and clauses 56 and 57.

[Dr Whitehead]

Most of the provisions in this group deal with the establishment and terms of a hydrogen counterparty. The establishment of the counterparty is clearly important in the raising and distribution of the hydrogen levy, which we will discuss later. The raising of the levy goes through the counterparty—that is, the counterparty will be responsible for raising the demands of the levy upon whoever is liable to pay it. The counterparty has a substantial role in holding those amounts and distributing them to those who are developing, in this instance, hydrogen production. Of course, that is why it is called the hydrogen production counterparty.

It is a method similar to that adopted by the Low Carbon Contracts Company for arranging to levy charges on, in that instance, the electricity suppliers, and then distributing that to those in receipt of that levy. Those in receipt will primarily get money coming to them through the counterparty by means of the difference between the strike price for what it has been decided to levy on and the reference price—the general price for electricity after the strike price has been agreed. We do not yet have an indication of what the strike price for hydrogen production will be, but we have in front of us the experience of the likely reference price for electricity, which is likely to pertain over the years when the hydrogen levy will be administered by the hydrogen contracts counterparty.

The experience of the Low Carbon Contracts Company is that it is not always the case that money simply comes in and is then disbursed, because on occasions, and indeed on recent occasions, the LCCC has found itself in the position where the reference price and the strike price have inverted—that is, the organisations responsible for paying into the LCCC no longer get a payout from the LCCC because the relationship between the strike price and the reference price is positive. In this instance, then, the LCCC is actually accumulating amounts that it would normally not put into its funds because it would return them straight to the people who have contracted for a difference between the strike price and the reference price but at that point have an obligation to pay into, rather than expect to collect out of, those funds.

There has been some issue with the LCCC in terms of what happens to the money that goes into its funds but is not distributed out. Does that money accumulate in the funds of the LCCC perpetually? Or is it redistributed? If it is redistributed, to whom is it redistributed and on what terms? I do not see any provision for that sort of arrangement to take place, or, indeed, for it to take place in a secure way in the particular interests of consumers—we will talk about the interests of consumers later—in the Bill or in the Government amendments we have debated this morning.

It is important that as soon as the counterparty is in place, the full set of contingent and possible arrangements for the operation of that counterparty are clearly set out. Depending on how electricity prices change over the next few years, the hydrogen production counterparty may well, at a fairly early stage, be in the same sort of position of accumulating additional funds that the LCCC has been in recently. It is therefore important that there are clear provisions, preferably spelled out in the Bill, as to what the counterparty does under those circumstances. Have the Minister and his Department thought about that eventuality? If they have, how does the Minister envisage the hydrogen production counterparty operating under those circumstances? Why has he decided not to put anything in the Bill that gives us greater guidance as to how the counterparty will function?

[Andrew Bowie]

Let me clarify for the hon. Gentleman that later this morning we will come to clause 67, which specifically enables regulations to make provision for amounts to be paid to levied market participants by the relevant counterparty or hydrogen levy administrator. That includes the pass-through of payments received by the relevant counterparty under revenue support contracts, such as payments made by a hydrogen producer to a hydrogen production counterparty. I hope that answers the hon. Gentleman’s questions in more detail. We will return to this matter later this morning.

Amendment 23 agreed to.

Amendments made: 25, in clause 56, page 50, line 21, for “63(3)” substitute “64(4)”.

This amendment is consequential on Amendment 58.

Amendment 24, in clause 56, page 50, line 21, at end insert—

“‘eligible hydrogen storage provider’ is to be interpreted in accordance with section (Direction to offer to contract with eligible hydrogen storage provider)(4);

‘eligible hydrogen transport provider’ is to be interpreted in accordance with section (Direction to offer to contract with eligible hydrogen transport provider)(4)”.

This amendment adds definitions to the list in clause 56 in consequence of NC29 and NC31.

Amendment 26, in clause 56, page 50, line 23, for “61(3)” substitute “62(4)”.

This amendment is consequential on Amendment 55.

Amendment 27, in clause 56, page 50, line 36, at end insert—

“‘hydrogen storage counterparty’ has the meaning given by section (Designation of hydrogen storage counterparty)(3);

‘hydrogen storage provider’ has the meaning given by section (Designation of hydrogen storage counterparty)(7);

‘hydrogen storage revenue support contract’ has the meaning given by section (Designation of hydrogen storage counterparty)(2);

‘hydrogen transport counterparty’ has the meaning given by section (Designation of hydrogen transport counterparty)(3);

‘hydrogen transport provider’ has the meaning given by section (Designation of hydrogen transport counterparty)(7);

‘hydrogen transport revenue support contract’ has the meaning given by section (Designation of hydrogen transport counterparty)(2);”.

This amendment is supplementary to NC29 and NC31.

Amendment 28, in clause 56, page 51, leave out lines 3 to 6.—(Andrew Bowie.)

See the explanatory note relating to Amendment 23.

Clause 56, as amended, ordered to stand part of the Bill.

Clause 57

Revenue support contracts

Amendments made: 29, in clause 57, page 51, line 16, after “a” insert “carbon dioxide”.

This amendment is consequential on Amendment 23.

Amendment 30, in clause 57, page 51, line 16, at end insert—

“( ) a hydrogen transport revenue support contract (see section (Designation of hydrogen transport counterparty)(2)),

( ) a hydrogen storage revenue support contract see section ((Designation of hydrogen storage counterparty)(2)),”.—(Andrew Bowie.)

This amendment adds hydrogen transport revenue support contracts (see NC29) and hydrogen storage revenue support contracts (see NC31) to the definition of “revenue support contract”.

Amendment 31, in clause 57, page 52, line 5, after “60(3),” insert

“(Direction to offer to contract with eligible hydrogen transport provider)(2) or (4), (Direction to offer to contract with eligible hydrogen storage provider)(2) or (4),”.

This amendment provides for regulations under the specified powers to be subject to affirmative procedure.

Amendment 32, in clause 57, page 52, line 5, leave out “61(3)”.

This amendment is consequential on Amendment 53.

Amendment 33, in clause 57, page 52, line 6, after “62(2)” insert “or (4)”.

This amendment is consequential on Amendment 53.

Amendment 34, in clause 57, page 52, line 6, leave out “63(3)”.

This amendment is consequential on Amendment 56.

Amendment 35, in clause 57, page 52, line 6, after “64(2)” insert “or (4)”.—(Andrew Bowie.)

This amendment is consequential on Amendment 56.

Clause 57, as amended, ordered to stand part of the Bill.

Clause 58

Duties of revenue support counterparty

Amendments made: 36, in clause 58, page 53, line 2, after “a” insert “carbon dioxide”.

This amendment is consequential on Amendment 23.

Amendment 37, in clause 58, page 53, line 3, after “counterparty,” insert

“hydrogen transport counterparty, hydrogen storage counterparty,”.

This amendment and Amendment 39 make provision for ensuring that hydrogen transport counterparties and hydrogen storage counterparties can meet their liabilities under revenue support contracts.

Amendment 38, in clause 58, page 53, line 4, after “any” insert “carbon dioxide”.

This amendment is consequential on Amendment 23.

Amendment 39, in clause 58, page 53, line 5, after second “contract,” insert

“hydrogen transport revenue support contract, hydrogen storage revenue support contract,”.

See the explanatory statement for Amendment 23.

Amendment 40, in clause 58, page 53, line 8, after “a” insert “carbon dioxide”.

This amendment is consequential on Amendment 23.

Amendment 41, in clause 58, page 53, line 8, at end insert—

“(aa) a hydrogen transport counterparty (see section (Designation of hydrogen transport counterparty)(3));

(ab) a hydrogen storage counterparty (see section (Designation of hydrogen storage counterparty)(3));”—(Andrew Bowie.)

This amendment adds hydrogen transport counterparties and hydrogen storage counterparties to the definition of “revenue support counterparty”.

Question proposed, That the clause, as amended, stand part of the Bill.

09:44

[Andrew Bowie]

Clause 58 sets out the duties of a revenue support counterparty and the Secretary of State’s ability to exert control over the activities of a revenue support counterparty, given that its role is critical to the effectiveness of a revenue support contract. It includes, for example, a duty for a counterparty to act in accordance with revenue support regulations and a power for the Secretary of State to specify in regulations things that a counterparty must, can, or cannot do.

The proper functioning of a revenue support counterparty is fundamental to the stability of the revenue support contracts. The counterparty will be responsible for managing large amounts of funds to meet its payment obligations under a contract. It is therefore important for the Secretary of State to exercise a degree of control over how it operates. I therefore commend clause 58 to the Committee.

[Dr Whitehead]

The clause does indeed provide for a number of duties of the revenue support counterparty. I particularly note the requirement that it

“must exercise the functions”

conferred on it

“by virtue of this Chapter so as to ensure that it can meet its liabilities under any revenue support contract to which it is a party.”

In order to do that, as the Minister has said, the counterparty must be buoyantly funded—shall we say—both in terms of the money coming in and out and the money to enable it to perform its functions.

What regulation is there on the counterparty to ensure that it is carrying out its obligations with its funding, in such a way that there is not too much in the bank, and not too little in the bank to meet its liabilities? As the Minister has said, we will later debate on how that works in with the possible restitution of funds from the counterparty at particular junctures. Is the Minister satisfied that the regulation of the counterparty is sufficient to ensure that it actually operates in that economical way, as far as the use and disbursal of its funds is concerned?

[Andrew Bowie]

I thank the hon. Member for his question. Again, it is a very pertinent, sensible and serious question, and one on which I am happy to give more clarity. The Government anticipate that the LCCC, which is the existing counterparty for contracts for difference, will be the counterparty for the hydrogen production, industrial carbon capture and waste industrial carbon capture business models—subject to successful completion of administrative and legislative arrangements, obviously.

The LCCC already has experience in similar types of contract management from its role as counterparty to contracts for difference; it is already established in that respect. The LCCC is also anticipated to be the counterparty for the carbon dioxide transport and storage revenue support contracts—again, subject to successful completion of administrative and legislative arrangements.

To address the specific point, in taking the decision to proceed with LCCC as the counterparty, the Secretary of State considered, among other things, its ability to deliver the required functions, and its experience and track record in contract management. Those considerations would be made on any future decisions, which would also be subject to normal principles of public decision making.

The envisaged greenhouse gas removals business model would also require a counterparty to manage the contracts, and the Department for Energy Security and Net Zero is currently assessing options as to the most appropriate organisation to perform that function.

Question put and agreed to.

Clause 58, as amended, accordingly ordered to stand part of the Bill.

Clause 59

Designation of transport and storage counterparty

Amendments made: 42, in clause 59, page 53, line 14, after “for” insert “carbon dioxide”.

This amendment is consequential on Amendment 23.

Amendment 43, in clause 59, page 53, line 15, leave out “‘transport” and insert “‘carbon dioxide transport”.

This amendment is consequential on Amendment 23.

Amendment 44, in clause 59, page 53, line 17, after “a” insert “carbon dioxide”.

This amendment is consequential on Amendment 23.

Amendment 45, in clause 59, page 53, line 19, after “a” insert “carbon dioxide”.

This amendment is consequential on Amendment 23.

Amendment 46, in clause 59, page 53, line 22, leave out “‘transport” and insert “‘carbon dioxide transport”.

This amendment is consequential on Amendment 23.

Amendment 47, in clause 59, page 53, line 28, after “a” insert “carbon dioxide”.

This amendment is consequential on Amendment 23.

Amendment 48, in clause 59, page 53, line 30, after “a” insert “carbon dioxide”.

This amendment is consequential on Amendment 23.

Amendment 49, in clause 59, page 53, line 32, after “a” insert “carbon dioxide”.

This amendment is consequential on Amendment 23.

Amendment 50, in clause 59, page 53, line 36, after “any” insert “carbon dioxide”.

This amendment is consequential on Amendment 23.

Amendment 51, in clause 59, page 53, line 38, after first “a” insert “carbon dioxide”.—(Andrew Bowie.)

This amendment is consequential on Amendment 23.

Question proposed, That the clause, as amended, stand part of the Bill.

[The Chair]

With this it will be convenient to consider clause 60 stand part.

[Andrew Bowie]

Initial licensed carbon dioxide transport and storage companies are expected to be supported by a revenue support agreement, which is a contractual arrangement to be entered into by a counterparty. The clause will enable the Secretary of State to designate a consenting person to be a counterparty for carbon dioxide transport and storage revenue support contracts. A counterparty will be responsible for managing the contracts and making payments to the contract holders, as well as collecting any necessary payments from contract holders, as set out in the contracts.

Clause 60 confers a power on the Secretary of State to issue a direction to a carbon dioxide transport and storage counterparty to offer to contract with an eligible person. It also ensures that revenue support regulations can make further provision about a direction—for example, the terms that may or must be specified in a direction. I commend the clauses to the Committee.

[Dr Whitehead]

The clause designates a transport and storage counterparty to perform a similar function to that of the hydrogen production counterparty or, indeed, to that of the LCCC. In the case of the hydrogen production counterparty, the Government’s intention is to roll the function in with the LCCC, so that the LCCC has an expanded role. I am not quite so clear about the Government’s intention for the carbon dioxide transport and storage counterparty. Is it the Government’s intention that that counterparty will also be rolled into the LCCC? If so, does the Minister not think that that will be a rather giant organisation responsible for different streams of funding in different ways? In such circumstances, are the Government satisfied that the streams could be sufficiently separate from each other to ensure the efficient running of all the different strands that will increasingly come under, in effect, one counterparty company?

[Andrew Bowie]

The hon. Gentleman is right to point out the inherent risks in the model. However, it is incumbent on the Secretary of State, the Department, the Government and indeed Parliament to assess and to keep watch continually on the arrangements to ensure that they are fit for purpose as we proceed and develop our hydrogen industry to the extent that we want to in future. The LCCC already does similar types of contract management in its existing role as the counterparty to the contracts for difference, so I do not envisage that as being as big a challenge as the hon. Gentleman sets out, but I accept the inherent risks, in particular in what we will be doing under the Bill, which is something completely new. Of course it is right for Parliament to have a role in scrutinising the Government to ensure that the model that we establish keeps pace and is fit for what we seek to do in future.

Question put and agreed to.

Clause 59, as amended, accordingly ordered to stand part of the Bill.

Clause 60

Direction to offer to contract

Amendment made: 52, in clause 60, page 54, line 3, after “a” insert “carbon dioxide”.—(Andrew Bowie.)

This amendment is consequential on Amendment 23.

Clause 60, as amended, ordered to stand part of the Bill.

Clause 61

Designation of hydrogen production counterparty

Amendments made: 53, in clause 61, page 54, line 18, leave out from second “contract” to “was” in line 22 and insert—

“to which a hydrogen production counterparty is a party and which”.

This amendment modifies the definition of “hydrogen production revenue support contract”.

Amendment 54, in clause 61, page 54, line 25, leave out subsection (3).—(Andrew Bowie.)

This amendment is consequential on Amendment 53.

[Andrew Bowie]

I beg to move amendment 3, in clause 61, page 55, line 8, after “on)” insert “in the United Kingdom”.

This amendment and Amendment 4 provide that activities by virtue of which a person qualifies as a “low carbon hydrogen producer” must be carried on in the United Kingdom (including the specified offshore areas).

[The Chair]

With this it will be convenient to discuss the following:

Government amendment 4.

Clause 61 stand part.

Clause 62 stand part.

[Andrew Bowie]

Government amendments 3 and 4 relate to the territorial application of chapter 1 of part 2 of the Bill. As drafted, the existing provisions do not expressly set out the territorial application of provisions establishing the framework for hydrogen production revenue support contracts and counterparty. Government amendment 3 makes it absolutely clear that a “low carbon hydrogen producer” must carry out activities in the UK, in line with Government intentions for the hydrogen production business model to be applied on a UK-wide basis.

Government amendment 4 operates in conjunction with amendment 3, and relates to the territorial application of chapter 1 of part 2 of the Bill. As drafted, these provisions do not expressly cover hydrogen production activities carried out in offshore areas. Although the low-carbon hydrogen industry is nascent, the Government are aware of the potential for low-carbon hydrogen production to be located offshore, for example, co-located with offshore wind farms.

Government amendment 4, therefore, makes it clear that a low-carbon hydrogen producer must carry out activities in the United Kingdom, which is to be defined in subsection (9) as including activities in, above or below: (a) the territorial sea adjacent to the United Kingdom; and (b) waters in a renewable energy zone, within the meaning of chapter 2 of part 2 of the Energy Act 2004.

Turning to clause 61, the delivery mechanism for the hydrogen production business model is intended to be private law contracts. Those contracts are intended to be between eligible low-carbon hydrogen producers and a hydrogen production counterparty. The clause will enable the Secretary of State to designate a consenting person to be a counterparty for hydrogen production revenue support contracts. A counterparty will be responsible for managing the contracts and making payments to the contract holders, as well as collecting any necessary payments from contract holders, as set out in the contracts.

Clause 62 confers a power on the Secretary of State to issue a direction to a hydrogen production counterparty to offer to contract with an eligible low-carbon hydrogen producer. It also ensures that revenue support regulations can make further provision about a direction, for example the terms that may or must be specified in a direction. Clause 62 also requires regulations to make provision for determining the meaning of “eligible” in relation to a low-carbon hydrogen producer. The powers under clause 62 are expected to be first exercised in relation to the successful projects coming through the ongoing electrolytic hydrogen allocation round and carbon capture, usage and storage cluster sequencing process. In future, the expectation is that hydrogen production revenue support contracts will be awarded by way of a more competitive allocation process. Provisions to achieve that are also provided for in the Bill.

[Dr Whitehead]

The Minister kindly wrote to me a little while ago about the questions raised in this Committee about the UK seabed, which is the subject of Government amendment 4. I was grateful that he wrote to me so quickly after that debate, but his letter did not entirely set my mind at rest about the problem we raised on that occasion, which is also pertinent to hydrogen production.

As the Minister stated, it is entirely possible and feasible that hydrogen production could take place at sea, either on energy islands, converted rigs or specific platforms set up for that purpose, in conjunction with offshore wind farms. A number of those wind farms and installations will be well beyond the limits of the territorial sea adjacent to the United Kingdom.

My question in the previous debate that prompted the Minister’s letter to me was: what is the jurisdiction in relation to what is in the UK economic zone up to 200 miles, but beyond the 12-mile territorial sea adjacent to the United Kingdom? In his letter, the Minister effectively repeated the idea that the territorial sea adjacent to the United Kingdom was indeed the 12-mile zone. Does the Minister have any further clarification this morning about the relationship of the two different zones, and how they interact in terms of effective jurisdiction for these activities?

[Andrew Bowie]

I do indeed have an answer for the hon. Gentleman. As the hon. Gentleman and I have set out in Committee and in the letter, the territorial sea adjacent to the United Kingdom is the sea that extends 12 nautical miles from the low-water line along the coast, as defined in section 1 of the Territorial Sea Act 1987. However, the renewable energy zone extends from the boundary of the territorial sea to an area within the UK’s exclusive economic zone.

10:00

The co-ordinates of the renewable energy zone are set out already in the Exclusive Economic Zone Order 2013. The renewable energy zone was established by section 84 of the Energy Act 2004 for the purposes of energy production activities. Hydrogen production may be co-located with offshore renewable installations. It is therefore appropriate for the territorial scope of the provisions to be consistent with the provisions of part 2 of the 2004 Act. I hope that that clarifies the pertinent question asked by the hon. Gentleman.

Amendment 3 agreed to.

Amendment made: 4, in clause 61, page 55, line 12, at end insert—

“(9) In subsection (8) the reference to carrying on activities in the United Kingdom includes carrying on activities in, above or below—

(a) the territorial sea adjacent to the United Kingdom;

(b) waters in a Renewable Energy Zone (within the meaning of Chapter 2 of Part 2 of the Energy Act 2004).”—(Andrew Bowie.)

See the explanatory statement relating to Amendment 3.

Clause 61, as amended, ordered to stand part of the Bill.

Clause 62

Direction to offer to contract

Amendment made: 55, in clause 62, page 55, line 28, leave out subsection (4) and insert—

“(4) Revenue support regulations must make provision for determining the meaning of “eligible” in relation to a low carbon hydrogen producer.”—(Andrew Bowie.)

This amendment is consequential on Amendment 53.

Clause 62, as amended, ordered to stand part of the Bill.

Clause 63

Designation of carbon capture counterparty

[Andrew Bowie]

I beg to move amendment 7, in clause 63, page 55, line 33, after “be” insert “(a)”.

This amendment is supplementary to Amendment 9.

[The Chair]

With this it will be convenient to discuss the following:

Government amendments 8, 9, 5 and 10.

Amendment 84, in clause 63, page 56, line 26, leave out

“that has been produced by commercial or industrial activities”.

This amendment seeks to ensure that Direct Air Capture technologies and other engineered greenhouse gas removals are not excluded from these measures so that we leave open the option to include these technologies in revenue support contracts in the future.

Government amendment 6.

Clause stand part.

Clause 64 stand part.

Government amendment 11.

[Andrew Bowie]

Government amendment 5 relates to the territorial application of chapter 1 of part 2 of the Bill. As drafted, the provisions do not expressly set out the territorial application of provisions establishing the framework for carbon capture revenue support contracts for counterparties. Amendment 5 therefore makes it clear that a carbon capture entity must carry out activities in the UK in line with Government intentions to support the deployment of CCUS across the UK.

Government amendment 6 relates to the territorial application of chapter 1 of part 2 of the Bill and works in conjunction with amendment 5. As drafted, the provisions do not expressly cover carbon capture activities carried out in offshore areas. While the carbon capture industry is nascent, the Government are aware of the potential for carbon capture activities to be located offshore. Amendment 6 makes it clear that a carbon capture entity must carry out activities in the United Kingdom, to be defined in the subsection that it will insert—clause 63(9)—as including

“activities in, above or below”.

Greenhouse gas removal technologies will have an important role to play in reaching net zero to mitigate the impact of residual emissions from hard-to-abate sectors, and the Government have been very clear on their intention to capitalise on the economic benefits from that emerging sector. Government amendment 9 will enable the Government to assign the most appropriate counterparty to oversee contractual support to GGR developers over the coming decades as the technologies and their corresponding regulation evolve. That avoids the risk that the resignation of a single counterparty negatively impacts other carbon capture and business models choosing to remain with their originally designated counterparty. The amendment forms part of our broader approach to uphold our commitments and scale up engineered GGRs to deliver new export opportunities, unlocking high-quality green jobs across the UK.

Alongside other measures in the Bill, Government amendment 10 seeks to clarify the language used in the title section of the Bill to reflect that multiple forms of carbon capture, including greenhouse gas removals, can be enabled under the legislation. The amendment forms part of our broader approach to uphold our commitments and scale up engineered GGRs to deliver new export opportunities, unlocking high-quality green jobs across the UK. Government amendments 7 and 8 are consequential on amendment 10 and enable the appointment of a counterparty for any of the types of carbon capture revenue support contract.

Turning to clause 63, the delivery mechanism for the industrial carbon capture business models is intended to be private law contracts. The contracts are intended to be between eligible carbon capture entities and a carbon capture counterparty. Direct air carbon capture and storage—DACCS—is another form of carbon capture intended to fall under clause 63. The Government are minded to develop a GGR business model covering DACCS based on a revenue support contract model. The legislation is needed to ensure that we can facilitate a contractual arrangement to be entered into by a counterparty.

The clause will enable the Secretary of State to designate a consenting person as a counterparty for carbon capture revenue support contracts or for any one or more descriptions of carbon capture revenue support contract. A counterparty will be responsible for managing the contracts and for making payments to the contract holders, as well as for collecting any necessary payments from contract holders, as set out in the contracts.

Clause 64 will confer a power on the Secretary of State to issue a direction to a carbon capture counterparty to offer to contract with an eligible carbon capture entity. It will ensure that revenue support regulations can make further provision about a direction, such as the terms that may be specified in it. Clause 64 also requires regulations to make provision for determining the meaning of “eligible” in relation to a carbon capture entity

The powers under clause 64 are expected to be first exercised in relation to the successful projects coming through the ongoing CCUS cluster sequencing process. The current expectation is that, in future, industrial carbon capture business model revenue support contracts will be awarded by way of a more competitive allocation process, enabled by provisions that are also in the Bill.

I therefore beg to move that Government amendments 5, 6, 7, 8, 9, 10 and 11 be made and that clauses 63 and 64 stand part of the Bill.

[The Chair]

Order. I am sorry for nit-picking, but technically the Minister is only moving Government amendment 7. The other amendments will be moved once we get to the appropriate point.

[Andrew Bowie]

My apologies, Mr Gray.

[The Chair]

I am just being small-minded, really. I call Dr Whitehead.

[Dr Whitehead]

Amendment 84 is included in this group, I believe?

[The Chair]

It is, yes. We are debating it, but it is not being moved just now.

[Dr Whitehead]

I presume that I will, notionally, be invited to debate it at the appropriate point.

[The Chair]

You are invited to debate it now. This group is being debated whole. The point on which I was bringing the Minister up is simply that he is not moving all the Government amendments now; he is moving amendment 7 now, and can move the others when we get to the relevant part of the Bill. You are, of course, absolutely entitled to debate all the new clauses and amendments in this group.

[Dr Whitehead]

Thank you, Mr Gray.

Opposition amendment 84 would amend the definition of “carbon capture entity” in clause 63(8). We tabled it because we considered that definition insufficient to encapsulate what is now increasingly likely to be at least part of carbon capture and storage activity: DACCS, which involves carbon that has been captured from the air, or indeed from the sea. The DACCS process is up and running in the UK on an experimental basis and will undoubtedly become quite a substantial element of carbon capture in future, so we thought it important that direct air capture technologies should be included within the definition of “carbon capture entity”.

I thought we might have a bit of discussion about that point this morning, but I observe that, subsequent to our tabling amendment 84, the Government have tabled amendment 10, which results in similar wording. My first point is a positive one: well done to the Government on that. My second, slightly less positive point is, “Why couldn’t you have done that in the first place?”

My third point is one for the record: it may be that the Government and the Opposition’s thoughts were running along entirely parallel lines at precisely the same moment. Alternatively, it may be that the Government looked at our amendment and thought, “Oh, we haven’t done that—maybe we ought to, but of course we can’t accept an Opposition amendment, so we’ll have to use our own.” It might have been nice for the Government to say, “You’re absolutely right, so we’ll accept your amendment,” but I am fairly graciously saying that I am pleased that they have managed to table amendment 10. On that basis, it does not seem necessary to proceed with our amendment 84 this morning. We can rest satisfied that we maybe played a small part in the general progress of the Bill through the House.

[Andrew Bowie]

All I would say to the hon. Gentleman is that, of course, imitation is the most sincere form of flattery. While I do not deny that the Government and the Opposition were thinking along the same lines at exactly the same time, and therefore came to the same conclusion, I am glad that he is not going to press amendment 84 to a vote, and that he accepts that the definition in our amendment covers the definition of direct air capture and carbon storage. We share the view that greenhouse gas removal technologies will be essential to reach net zero, and I am glad that, as has so far been the case with most of the Bill, there is broad cross-party agreement about where we are headed, and definitions required to get there.

[The Chair]

The cliché that sprang to mind was, “Great minds think alike,” although I would not necessarily add the second part, which is, “though fools seldom differ.”

Amendment 7 agreed to.

Amendments made: 8, clause 63, page 55, line 33, at end insert—

“(b) a counterparty for any one or more descriptions of carbon capture revenue support contract.”

This amendment enables the Minister to designate a person to be a counterparty for particular descriptions of carbon capture revenue support contracts.

Amendment 56, clause 63, page 55, line 34, leave out from second “contract” to “was” in line 1 on page 56 and insert

“to which a carbon capture counterparty is a party and which”.

This amendment modifies the definition of “carbon capture revenue support contract”.

Amendment 57, clause 63, page 56, line 4, leave out subsection (3).

This amendment is consequential on Amendment 56.

Amendment 9, clause 63, page 56, line 10, leave out from “may” to end of line 17 and insert—

“(a) exercise the power under paragraph (a) of subsection (1) so that more than one designation has effect under that paragraph;

(b) exercise the power under paragraph (b) of that subsection so that more than one designation has effect in respect of any description of carbon capture revenue support contract.”

This amendment removes limitations on the Minister’s ability to designate more than one counterparty for carbon capture revenue support contracts, and supplements Amendment 8 by confirming that there may be, at the same time, more than one counterparty for a particular description of carbon capture revenue support contract.

Amendment 5, clause 63, page 56, line 25, after “on)” insert “in the United Kingdom”

This amendment and Amendment 6 provide that activities by virtue of which a person qualifies as a “carbon capture entity” must be carried on in the United Kingdom (including the specified offshore areas).

Amendment 10, clause 63, page 56, line 25, leave out from “on)” to end of line 27 and insert

“, with a view to the storage of carbon dioxide, activities of capturing carbon dioxide (or any substance consisting primarily of carbon dioxide) that—

(i) has been produced by commercial or industrial activities,

(ii) is in the atmosphere, or

(iii) has dissolved in sea water.”

This amendment widens the definition of “carbon capture entity” to bring within it capturing carbon dioxide from the atmosphere or from sea water.

Amendment 6, clause 63, page 56, line 29, at end insert—

“(9) In subsection (8) the reference to carrying on activities in the United Kingdom includes carrying on activities in, above or below—

(a) the territorial sea adjacent to the United Kingdom;

(b) waters in a Gas Importation and Storage Zone (within the meaning given by section 1 of the Energy Act 2008).”—(Andrew Bowie.)

See the explanatory statement relating to Amendment 5.

Clause 63, as amended, ordered to stand part of the Bill.

Clause 64

Direction to offer to contract

Amendment made: 58, clause 64, page 57, line 5, leave out subsection (4) and insert—

“(4) Revenue support regulations must make provision for determining the meaning of “eligible” in relation to a carbon capture entity.”—(Andrew Bowie.)

This amendment is consequential on Amendment 56.

Clause 64, as amended, ordered to stand part of the Bill.

Clause 65

Appointment of hydrogen levy administrator

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss the following:

Government amendments 12 and 59.

Amendment 117, clause 66, page 58, line 26, leave out from “regulations,” to end of line 27 and insert

“including but not limited to—”

This amendment seeks to define relevant market participants on a wider basis than purely gas suppliers, electricity suppliers and gas shippers.

Clause 66 stand part.

Government amendments 61 to 69.

Clauses 67 and 68 stand part.

[Andrew Bowie]

This group concerns clauses 65 to 68, regarding the hydrogen levy. Let me turn first to clause 66 and Government amendments 12 and 59.

Government amendment 12 will overturn the amendment to the levy provisions made on Report in the other place. The amendment would have ensured that the funding for the hydrogen production business model could be provided through the Consolidated Fund. However, the financial assistance power in part 2 already enables Exchequer funding of low-carbon hydrogen production. Indeed, I remind members of the Committee that the hydrogen production business model will initially be funded through the Exchequer.

The Lords amendment would also restrict where a hydrogen levy could be placed, thereby removing the option to levy gas and electricity suppliers and providing that a levy could be placed only on gas shippers. Investor confidence and developer confidence are critical to realising the potential benefits of the UK hydrogen economy, which could support more than 12,000 jobs and unlock up to £11 billion in private investment by 2030.

CCUS-enabled hydrogen projects are also expected to play a key role in the Government’s plans to deploy CCUS in four industrial clusters by 2030. Other countries are investing heavily in hydrogen and CCUS, and it is important that we do not miss this opportunity to deliver high-quality jobs and growth.

Government amendment 59 will expand the existing levy provisions to allow the Secretary of State to make regulations to establish a levy to fund hydrogen transport and hydrogen storage revenue support contracts, and associated costs, in addition to the hydrogen production business model.

The Government have not reached a decision on how the hydrogen transport and storage business models will be funded, but the powers in the Bill enable both Exchequer and levy funding options. That approach will ensure that there are robust, reliable options available to fund the business models. That will help to support investor and developer confidence in the future of the UK’s hydrogen infrastructure, encouraging private investment, which is critical to kick-starting and growing the hydrogen economy.

10:15

I shall now speak more generally to clause 66. I reassure the Committee that the Government will continue to prioritise the protection of consumers. We have paid almost half of the average household’s energy bill since the introduction of the energy price guarantee, as well as supporting businesses through the energy bill relief scheme and now the energy bills discount scheme. I also reassure members of the Committee that the Government are listening carefully to concerns raised across the House both here and, indeed, on Second Reading.

Government amendments 61 to 69 are all consequential on Government amendment 59. Clause 67 enables regulations to make provision for payments to be made back to levied market participants. For example, as the hydrogen economy matures, it is possible that the market price of hydrogen will exceed the agreed strike price. In that scenario, hydrogen producers receiving support through the hydrogen production business model would make payments to the hydrogen production counterparty. Using clause 67, the Secretary of State can make regulations that enable those payments to be passed through from the counterparty to the levied market participants. That can help provide for fair and efficient payment and reconciliation arrangements.

Clause 68 enables revenue support regulations to make provisions specifying the functions and duties of a hydrogen levy administrator. It also enables regulations to make provision for the Secretary of State to direct the levy administrator. That will help to ensure the effective operation of the levy by enabling regulations to set out functions of a levy administrator. The clause is critical to investor and developer confidence in the hydrogen levy.

Finally, clause 65 makes provision for the Secretary of State to make regulations appointing a person as a hydrogen levy administrator. I beg to move that Government amendments 12 and 59 be made and that clauses 65, 66, 67 and 68 stand part of the Bill.

[The Chair]

Technically speaking, the Minister need only move that clause 65 stand part of the Bill. That is the first debate in the group.

[Dr Whitehead]

We have two concerns about this group. One relates to Government amendment 12, and the other to amendment 117, which we seek to advance. Amendment 117 simply seeks to widen the definition of relevant market participants beyond purely gas suppliers, electricity suppliers and gas shippers. There are other relevant market participants that might actually come under the definition, and we feel that the current wording in the Bill, which effectively says that only the market participants set out here can be included, is overly restrictive. We suggest in our amendment that the words should state that those participants—gas suppliers, electricity suppliers and gas shippers—should be included, but that the definition should not be limited to them. We have therefore added the words

“including but not limited to—”

to the definition in the Bill. I would be grateful for the Minister’s response to the amendment, whether we move it formally or not. Some reassurance on the limitations perceived to be there at the moment would be helpful.

I will turn to the main issue in this part of the Bill. As the Minister states, Government amendment 12 seeks to overturn what passed in the other place, which is that their lordships felt that the idea of pursuing a hydrogen levy by means of a levy on customers, essentially, was not a good one. I would go rather further than that: I think it is an absolutely suicidal one.

Their lordships considered an amendment to the Bill at that point, which made it clear that there would be a limitation on who could be the levy payers as far as the hydrogen production levy is concerned, and that that limitation should be the Consolidated Fund or gas shippers. Arguably, gas shippers would have an effect on customers’ bills in the future, and the Consolidated Fund has an effect on taxation levels, but not on bills as such.

Where we had got to when the Bill came to this House is that a consolidated part of the Bill was actually a restriction on who could be levied as far as the hydrogen levy is concerned. I, for one, thought that was a very wise restriction to place in the Bill, and I know from their statements, particularly on Second Reading, that a number of members of this Committee also thought at the time that that was a pretty wise move.

That is why I am really disappointed this morning to see that the Government are seeking to overturn the restriction that was placed on levy raising in the other place. I am not the only person, of course, who is worried about this issue, as far as levy payers are concerned. I refer, for example, to the MailOnline on 4 June, which stated:

“Grant Shapps is poised to ditch a plan to add around £120 to Brits’ energy bills to fund the transition to hydrogen.”

The article continued:

“The Net Zero Secretary is understood to be ‘not at all convinced’ that the levy should go ahead, after fierce criticism from Tories.”

Of course, it is MailOnline, so it does not say that there has been fierce criticism from the Labour party as well, but there you are. The article went on to say:

“The government has been accused of heaping more pain on struggling consumers with the proposals for a charge to fund the fledgling industry.”

Obviously, I have got to know the Minister quite well while we have been considering the Bill, and indeed beforehand, and we have a very good relationship. I, for one, would not like to see him being hung out to dry by his Secretary of State on this issue. Whether it is a wise thing for the Minister and his career to advance this amendment right at this minute is something that we will leave for others to judge.

However, the substantive point I want to make is this: just what will be the effect of a levy payment, in the way that this amendment suggests, on the development of hydrogen itself? The Government have quite rightly targeted 10 GW of hydrogen production by 2030 and they have put in place in the Bill arrangements for a system similar to that for offshore wind, with strike prices, reference prices and so on being involved in the process of levying whoever it is that will be levied.

Determining what the strike price is likely to be will be difficult. The Government have indicated—well, the then Department for Business, Energy and Industrial Strategy gave an indication in November 2022—that they would assume a strike price of about £100 per MWh for hydrogen production. Once that is established, it is important to look at what the difference is likely to be with the prevailing electricity price, since they are contracts for difference. With electricity prices as they are at the moment, the difference between the £100 strike price and the electricity price might be fairly small, but if we assume a more reasonable difference—what the selling price of hydrogen will be in the market at that point and based on gas as a comparator—we can come to something like £55 per MWh, which is the prevailing gas price and a premium on carbon pricing within gas. The difference between the £100 per MWh strike price and the likely reference price of £55 gives us a gap of £45, which would be the financial support for the 10 GW of hydrogen production by 2030 that would be fundable through a hydrogen levy. What that gap actually means is that some £53 billion over a 10-year period would be required.

That funding would not be flat because the hydrogen levy would be levied on a rising amount of production over the period. Initially the cost of the gap would be reasonably low, starting at about £700 million per annum between 2025 and 2030, but by 2030 it would be about £3.5 billion per year and then would continue through the period of 15-year contracts. The support that will be necessary—£3.5 billion per year by 2030—can then be translated into what it is likely to cost the bill payer per year as a proportion of that cost. If we divide the number of paid units by the amount per year by 2030, the cost on bills is likely to be in the region of £118 to £120 per year. That is a levy that dwarfs all previous levies.

The total amount of green levies, which are not being paid at the moment because the Government are covering them during the energy crisis—and not a much longer period, I suspect—is about £165 in total. So what is being proposed here this morning is a plan that will add two thirds to those levies over the period running up to 2030. Other levies are proposed in the Bill, and we have agreed to a number of others that are coming down the road—well, I say we agreed to them, but I unsuccessfully attempted to obstruct them. For example, the nuclear regulated asset base will come in as a levy, and there will be further levies under the Government’s—and, indeed, the Opposition’s—plan to quadruple offshore wind and, if we have our way, double onshore wind by 2030. If we continue trying to add levies for everything to customer bills, they will increase hugely by 2030, not because the prices of electricity or gas have gone up or because Mr Putin has invaded anywhere else, but because of conscious policy design and the way the Government set up the levy system.

10:30

I appreciate that trying to establish exactly what the costs will be is an art rather than a science, but I do not think that the putative cost of £120 more or less is likely to be that far out. The central point is that the fundamentally broken system of funding renewable and low-carbon energy by way of direct levies on customers will be further broken, further brought into disrepute and further of concern to customers in the future.

Hydrogen does not fit into exactly the same category as some other levies. One of my concerns about the nuclear RAB is that customers are being asked to pay for it before a nuclear plant is in production. That levy will be added to their bills before a single kilowatt of power has been produced by a new power station. Consequently, they may say to themselves, “We are taking on the risk of this. There should be ways of spreading the risk other than adding it to our bills.” For hydrogen, customers may say, “How is this coming to us? Is it coming to us in the same way as offshore wind?” Levying offshore wind will eventually lead to lower bills for customers, because of the maturity of the wind that the levy has enabled, so there is a sort of customer benefit at the end. At the moment, the extent to which hydrogen will be used for customers—certainly, domestic customers—is not clear. Indeed, the Government have deferred the decision about the role that hydrogen will play in domestic heating until 2026.

It is absolutely right that we move at least at the pace that the Government have set as their ambition for putting in place hydrogen, and particularly green hydrogen —10 GW by 2030—but there is much less clarity about what it will be used for. There are clear uses for hydrogen in decarbonising heavy industry, steel and various other heavy industrial products. Clearly, there are substantial uses for it in transport logistics and energy storage, but Members will see that all those uses do not bear on domestic customer arrangements in any clear way. Therefore, customers may well ask why they are paying £118 on their bills for something that is not going to impinge on those bills very much at all.

We will discuss the industrial turbocharger plans later on. I was reflecting that the Government now name everything “turbocharger”, “super” or “great” something or other. The turbocharger is essentially a plan for ensuring that industry is substantially exempted from the effects of various levies and those levies are more greatly placed on domestic customers. Later on, when we discuss the turbocharger, we will ask whether the Government intend to introduce the levy and, by the way, increase its severity by taking it off industrial users and concentrating it all on domestic users. If the Government do that, the £118 will be considerably increased for domestic customers. The Government currently appear to be getting cold feet about that and customers have not just got cold feet but are increasingly likely to revolt against it. As the Onward think-tank, which has done quite a lot of work on the matter, has suggested, there are other ways of funding a hydrogen levy to cover the sort of sums I have suggested but which do not entail putting that additional levy on customers. As the Bill stands, those other ways could be advanced, but not the question of a further customer levy.

I might kindly advise the Minister to think very carefully. Unfortunately, he cannot do that in the lunch break, because we may take a decision on the matter before then—unless I speak for even longer.

[The Chair]

We do not want to go there.

[Dr Whitehead]

I agree, Mr Gray. It is not a good idea, and I will bring my remarks to a close.

My kind advice is that the Minister should think very carefully before proceeding with the amendment. We have a good Bill overall, which has been strengthened by the decision made in the other place and it sits well with the Bill as it stands. Why can we not just leave it like that? Let us continue to discuss the Bill on the basis that we can all agree on that structure for the future. I fear the Minister may not take that advice. If he does not, we will certainly try and force a Division to make sure that that advice is well taken. The way to do that is simply to vote against the Government’s amendment.

[The Chair]

Yes, that is right.

[Dr Whitehead]

If the Minister does pursue this, that is what we would propose. I would just add, finally, that I think there is considerable support for that in this Committee. The right hon. Member for Elmet and Rothwell—

[The Chair]

Who will speak for himself in a moment, I think.

[Dr Whitehead]

He said:

“We have to take the public with us on this—we cannot keep adding to people’s bills to try to make things work.”—[Official Report, 9 May 2023; Vol. 732, c. 276.]

That was well said, and I hope that that view will be reflected in the decisions taken by this Committee this morning.

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

I thank the hon. Member for Southampton, Test for what was almost a warm-up act to introduce me to the stage. I agreed with every word: we do have to take the public with us, and a movement is building in the country against net zero and an increase in bills. There are many issues, as he has outlined.

I have good news and bad news for you, Mr Gray: I have quite a lot to say, but the hon. Member has covered a few of those things by setting out the financial implications, using some well-researched material that is available to the Committee, so I shall leave some of that aside.

One problem is that it is a little bit of lazy economics to come along with a new area of energy generation—renewable generation—and just say, “Well, we’ll add another tax to do it.” I hope to set out some alternative ways of doing it. There are some considerable potential uses of hydrogen, which I will come on to describe. If we take them in turn, they could suggest areas where the focus could be changed.

My hon. Friend the Minister is a dear friend of mine, and I will try to be gentle with him. He commented that the Bill will enable funding streams that are not yet decided. However, I say to him in all good heart that conversations in the background have opened with the comment, “Well, if we don’t do this, how are we going to pay for it?” That would suggest that decisions have already been made about the levy coming into place. I find that exceptionally disappointing, within the brief that the Minister has been given, because I do not want to see him hung out to dry.

Where I think the Minister has a very valid argument is in what he said about discussions taking place in the background. I have been led to believe that the Government are trying to work on alternatives for Report; I hope very much that that is true. The hon. Member for Southampton, Test quoted my comments on Second Reading; he will have noticed that my comments were not unique, as many colleagues on the Government Benches had similar concerns. I think that it is the view of the House, overall, that there are concerns about Government amendment 12. There is therefore an imperative on the Government to come along and find a way to make hydrogen work without a direct taxation on people’s bills.

Here is the reality. I have some figures and comments from the Library. Costs to consumers due to Government policy are known as policy costs. They consist of the renewables obligation paid on electricity bills to support large-scale renewables; the feed-in tariff paid on electricity bills to support small-scale renewables; contracts for difference paid on electricity to support low-carbon generation; the energy company obligation paid on both electricity and gas to support household energy efficiency; the warm home discount paid on both to provide a discount to vulnerable households; assistance for areas with high electricity distribution costs paid on electricity; and the green gas levy, which funds the green gas support scheme, paid on gas bills.

Based on the Q2 2023 price cap, the breakdown of annual costs annually is as follows: the renewables obligation is £80.26; the feed-in tariff is £18.70; the energy company obligation is £43.87; the warm home discount is £20.60; assistance for areas with high electricity distribution costs is £1.45; and the green gas levy is 45p. That shows that a significant number of green levies are already applied to people’s bills.

10:45

When we had the rapid increase in bills, the experience of everybody in this room and their constituents was probably quite unique. Like many politicians, I have spent decades knocking on people’s front doors, and we all know that there will be an argument about policy—it could be about when we did not put pensions up by the consumer prices index and in line with earnings, because of the anomaly during the pandemic around the decision we take every year. That can start a political debate on the doorstep: “It’s outrageous. You said you were going to do this, and you haven’t.” That is politics.

However, what happened in the early months of 2022 was something I had never seen before. Door after door, there was fear—absolute fear—from people about how they were going to pay for their energy. I was always supportive of the energy price cap, which was an important move that helped to alleviate things, but back in the first half of last year, there was much comment about how much levies were adding to energy bills to supplement green policies. Some said, “We must drop them,” but the Government made the comment, correctly, that contracts are in place and that that was not an easy thing to do. The idea that we could add another levy to energy bills is a mistake, and we will not take the public with us.

What we are doing on this Committee today, and what we are doing over the next few sittings—I am proud to be on this Committee, because this is a revolutionary Bill—has a lot of cross-party support, as Opposition Members have said, because we all recognise that this is such an important topic that will affect this country’s energy production, net zero targets, and how we move forward for decades. We should therefore be able, when the House is roughly speaking as one, to take the public with us, but every now and then little parts of the Bill can become exceptionally explosive—excuse the pun—in relation to bringing people with us.

[Katherine Fletcher (South Ribble) (Con)]

My right hon. Friend is making a powerful case around what many of us hear on the doorstep. Does he agree that being able to define exactly what any levy would be for is a really important part of explaining something when people are fearful of their energy bills? Some have concerns about the hydrogen levy: “What hydrogen is it? Is it green hydrogen produced by wind? Is it blue hydrogen produced from carbon fossil-fuel sources with associated carbon capture and storage?” Blue hydrogen still contains some contaminants. Does he believe that “hydrogen” has been defined enough to allow us to explain things to the general public?

[Alec Shelbrooke]

My hon. Friend touches on an important point, drawing on comments made by the shadow Minister, the hon. Member for Southampton, Test. We are being asked to add a levy before we know how it will be used or what type of hydrogen it will generate. I do not think that people like signing open cheques without the way forward being defined.

I want to develop the argument for why hydrogen is an important step and to look at its applications in the automotive industry. The reason I say that is purely—

[The Chair]

Order. I am reluctant to interrupt the right hon. Gentleman, whose speeches I always greatly enjoy, but he is now launching us into a Second Reading-type debate on the benefits of hydrogen. We are discussing a very specific series of amendments, so perhaps he will return to the group under discussion.

[Alec Shelbrooke]

I am grateful, Mr Gray. What I am seeking to do is set out alternatives that can be used instead of putting the hydrogen levy in place.

[The Chair]

Order. We are discussing a Bill. It is possible to discuss the Bill itself or the amendments proposed to it; it is not possible to discuss things that are not in the Bill, even if the right hon. Gentleman thinks that they might be a good idea. Will he therefore please discuss either the Bill or the Government or other amendments in this group? He may not discuss things that are not in the Bill.

[Alec Shelbrooke]

I take your advice, Mr Gray. One tries to push one’s luck, but I take your comments on board.

To summarise the comments I was going to make, which can wait until subsequent stages, there are several alternatives within the energy market that can be used to achieve some of the things we are hoping to achieve with the blunt tool of yet another tax on energy. Hydrogen will play an important part in the energy progress that we make going forward. These things will need capital funding to help set them up, similar to many things that were done when the North sea was first exploited. Government subsidies and underwriting helped to get that under way.

These are important areas. We must not be blind to the fact that the public are losing faith in the climate agenda overall. There are many reasons why that may be happening. It may well be just algorithms on social media that draw certain people together, but we cannot be blind to the fact that there is a growing movement against net zero. There is a growing movement in this House to talk about having a referendum on whether we want to achieve net zero. Some colleagues are now pushing that forward.

We have to act carefully and diplomatically, and show people that there are huge advantages to be had from this technology and this energy going forward. The Government raise a lot of revenue off energy production, as the hon. Member for Southampton, Test and I have outlined. I therefore feel that Government amendment 12 would be a mistake. However, the Minister has indicated that work is taking place in the background, and I have had indications that amendments may be brought in on Report. If the amendment is pushed to a Division today, I shall not vote against it, but I shall abstain.

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

It is a pleasure to follow the right hon. Member for Elmet and Rothwell. I know that this is not really a declaration of interest, but my mother, Baroness Blake, was actually the person who moved the amendment in the other place. It is interesting that mother and daughter are both working on this Bill in different ways.

[The Chair]

A record?

[Olivia Blake]

Possibly a record. Who knows?

I rise to defend the amendments made in the Lords and to speak against Government amendment 12, predominantly because of the aims of the Bill that the Secretary of State outlined when it was brought forward. Those aims were about security, but also about tackling fuel poverty. The facts about fuel poverty in the UK at the moment are very telling. I will cite the End Fuel Poverty Coalition’s numbers: 1,000 people died in 2022 as a result of living in cold, damp homes, unable to heat them because of costs. We also know that 7 million people in the UK last winter were living in fuel poverty. Taken together, those are staggering numbers, and it is important that they are at the forefront of our minds when we discuss the levy.

It is telling that there seem to be unified voices against the policy. The figure of £118 that the shadow Minister mentioned came from Onward, which is a Conservative think-tank. The discussion is also about who has the broadest shoulders to help with the changes that desperately need to be made to our energy system. I completely agree with the shadow Minister that the Bill gives the public all the risk and potentially none of the benefits.

There are 37 independently published reports that set out that they do not believe that the UK will move fully to hydrogen for home heating. Obviously there are massive benefits for steel—Sheffield is the city of steel—that could be unlocked through hydrogen, and there are many benefits for industry, but it seems wrong for Government amendment 12 to remove the protections given in the other place to the levy to prevent that cost from falling so dramatically on households. As the right hon. Member for Elmet and Rothwell set out, it is really important that we bring the public with us.

Government amendment 12 is almost a wrecking motion for net zero, because the opposition to this will be huge. I ask the Minister to think hard about whether the Government want to champion such a burden on households when it is not clear whether the benefit will ever fall on households. We do not yet know the questions about hydrogen, let alone the answers, or what the benefits to home heating will be, if that is the path we go down as a nation when there are many alternatives growing at speed, as we have discussed. I think the Government’s amendment is very challenging. I urge them to think again for the benefit of all those who struggle to pay their energy bills now and for those who may struggle in future if the levy comes in.

[Kerry McCarthy (Bristol East) (Lab)]

I want to add to what has been said on both sides of the Committee Room today about how unwise it is for the Government to go down this path. I do not agree with what the right hon. Member for Elmet and Rothwell said about how we should not conflate public feeling about net zero with public concern about energy bills; the green transition and the move towards renewables will bring in cheaper energy and enhance our energy security, so I do not accept his arguments. However, if I were to argue that point with him, you would quite rightly say that I was broadening the debate beyond the parameters of the Bill, Mr Gray, so I will save my remarks for this afternoon’s Westminster Hall debate on the Government’s approach to net zero.

At the heart of the issue is what the shadow Minister, my hon. Friend the Member for Southampton, Test, said: consumers want to know how this will come to us. I share the concerns—my hon. Friend listed the other green levies in legislation, but the difference is that we can see a benefit from investment in such fields—but the hydrogen levy will mostly be to the benefit of energy-intensive, hard-to-decarbonise industries, and consumers will rightly feel that they are paying for something from which they will not receive the benefit.

We know that there is huge concern. The right hon. Member for Elmet and Rothwell said that there is fear in people’s eyes about how they will meet their energy bills. There is—I have seen that concern. In my public communications about how energy bills were predicted to rise, I was very worried about making constituents even more scared. It was a balance: I wanted to warn people about what is to come, but given the stress that they were under, I felt that it was important not to be alarmist. It is a difficult position to hold. As has been said, it could put about £118 on bills. Documents from the Department state that after 2030, the impact on consumer bills will ramp up even further:

“Once introduced, we expect its impacts will ramp up as we look to deliver our 2030 hydrogen ambitions to improve energy security.”

This is a deeply regressive move.

I do feel a bit of sympathy for the Minister, because he has to defend to the hilt something on which, given the reaction on Second Reading, he will end up having to U-turn. He will get all the flak, and his boss will get all the credit for having listened to people and changed his mind.

Somebody mentioned the think-tank Onward, which has contributed a piece to “ConservativeHome”. Onward has also said:

“The Government is walking into a trap with the hydrogen levy. It would be a mistake that risks stalling the development of a British hydrogen economy. It would also be unfair to ask households that won’t benefit from hydrogen directly to pay for it. The Government should think again. And the Treasury should get off the fence and back the role hydrogen can play in the economy.”

Clearly this is not an anti-hydrogen move. It is about ensuring that the people who will benefit bear the majority of the cost.

10:59

The shadow Minister, my hon. Friend the Member for Southampton, Test, has quoted a little of what the right hon. Member for Elmet and Rothwell said on Second Reading, but let me give the quote in more detail. The right hon. Member said that

“the cost we pass on to the public must be minimised. I hope the Minister”—

that is, the Secretary of State—

“will take note of the points about the hydrogen levy before Committee stage. It is misguided and it is in the wrong place. We have to take the public with us on this—we cannot keep adding to people’s bills to try to make things work. I hope the Minister will take that point away.”—[Official Report, 9 May 2023; Vol. 732, c. 276.]

The problem is that the Secretary of State has taken it away but not quite given it enough consideration at this stage, and the poor junior Minister present today is in an invidious position.

The former Business Secretary, the right hon. Member for North East Somerset (Mr Rees-Mogg), said that he tried to block the levies when he was the Minister in charge of the Bill under the former Prime Minister. He said:

“Let’s not beat around the bush, these levies are taxes and tax is already too high…Energy is already expensive enough…The Government should try to help people get cheaper energy, not more expensive energy. There is no justification for further levies on bills.”

The hon. Member for Yeovil (Mr Fysh) argued that

“it is inherently inflationary to put lots of new taxes on things.”

The hon. Member for Northampton South (Andrew Lewer) said that

“just as it looks like bills will maybe start to come down—that will put them up again”.

The hon. Member for South Thanet (Craig Mackinlay) said that this was a

“socialist energy agenda…more reminiscent of the 1950s Soviet Union that we used to laugh at”.

Actually, I do not think that there is anything socialist about such a regressive move. I take the underlying point that we should not make such provisions, but I think it was slightly unfair to suggest that the move was coming from the left.

Finally, Lord Lilley, who sits on the Lords Environment and Climate Change Committee, argued:

“Hydrogen is a non-starter as a replacement for domestic gas”

and that

“to make households pay for something they will never receive is a double insult. It’s absurd to make people pay for something that is never going to happen.”

I think he is what these days we would politely call a climate sceptic, rather than a climate change denier, so I would not endorse his broader approach, but those quotes sum up the position that the Minister is in. There is a lot of unhappiness on this issue. There is not support among the public or in the House, even among Government Members. I hope that he can give some indication that he will at least think about this, even if he cannot agree with us and is forced to vote in the wrong way today.

[Andrew Bowie]

I will start by speaking to amendment 117. I assure the hon. Member for Southampton, Test that the Government carefully considered the possible levy payers listed in the Bill when it was introduced in the other place. Levies on electricity and gas suppliers have been successfully used to support the deployment of low-carbon electricity and to increase the proportion of green gas in the gas grid. Those funding mechanisms are well understood by the private sector and can help to bolster investor confidence in the viability of funding for hydrogen.

Gas shippers were included as another possible option for the levy design, which allows for a greater range of options for a future levy design while appropriately narrowing the scope. The amendment in the other place was also intended to enable Exchequer funding of the hydrogen business model, but the powers in the Bill already provide for that arrangement. The hydrogen production business model will initially be Exchequer-funded. That aspect of the amendment would therefore introduce redundant provisions to the Bill.

Let me turn briefly to the thoughtful and serious comments made by the shadow Minister, the hon. Member for Southampton, Test, as well as my right hon. Friend the Member for Elmet and Rothwell and the hon. Members for Sheffield, Hallam and for Bristol East. I thank the hon. Member for Southampton, Test for bringing to the Committee’s attention the fact that the Government do care about and recognise the huge pressure that has been put on everyone in this country as a result of Vladimir Putin’s invasion of Ukraine, and the highly fluctuating gas markets and huge increase in energy bills that we have seen as a consequence. I thank him for reminding the Committee that this Government stepped up late last year to pay half of everybody’s energy bills—that is £1,500 per person. We consider very much the impact of any policy decision, any action taken by the Government and any action taken by forces outwith our control on people’s energy bills, particularly this year, when people across the country have been paying record amounts.

I recognise the experience that my right hon. Friend the Member for Elmet and Rothwell spoke so powerfully about; when knocking on people’s doors earlier last year, there was a genuine fear about the impact that the rise in energy bills would have on individual circumstances. That fear was not confined to those people who were sadly already worried—it was across the piece. We have got to pay close attention to that and bear it in mind when we reach any decision in Government that may affect those bills even further.

I say to all the Members who have expressed an opinion today, and to all those engaged in the debate outside this place, that the design of the hydrogen production levy is ongoing, and discussions as to what form that levy will take—or whether it will exist—continue. Those discussions will take into account all relevant considerations, including the affordability of energy bills, which I hope I have made clear the Government take incredibly seriously. We will continue to have discussions and consult on the future design of the said levy as we move forward.

Question put and agreed to.

Clause 65 accordingly ordered to stand part of the Bill.

Clause 66

Obligations of relevant market participants

Amendment proposed: 12, in clause 66, page 57, line 25, leave out “the Consolidated Fund or gas shippers” and insert “relevant market participants (see subsection (8))”.—(Andrew Bowie.)

This amendment reverses the amendment to clause 66 made at Report stage in the Lords, so that a levy may be imposed on gas suppliers or electricity suppliers as well as on gas shippers.

Question put, That the amendment be made.

Division 1

Ayes: 7

---

Conservative: 7

Noes: 5

---

Labour: 5

Amendment 12 agreed to.

Amendments made: 59, in clause 66, page 57, line 27, at end insert—

“(za) a hydrogen transport counterparty to make payments under a hydrogen transport revenue support contract or in respect of liabilities incurred in connection with hydrogen transport revenue support contracts;

(zb) a hydrogen storage counterparty to make payments under a hydrogen storage revenue support contract or in respect of liabilities incurred in connection with hydrogen storage revenue support contracts;”.

This amendment enables regulations to require levy payments to be made to fund hydrogen transport revenue support contracts and hydrogen storage revenue support contracts.

Amendment 60, in clause 66, page 57, line 31, after second “a” insert “carbon dioxide”.—(Andrew Bowie.)

This amendment is consequential on Amendment 23.

Clause 66, as amended, ordered to stand part of the Bill.

Clause 67

Payments to relevant market participants

Amendments made: 61, in clause 67, page 58, line 38, leave out “hydrogen production” and insert “relevant”.

This amendment and Amendments 62, 63, 64, 65, 66, 67, 68 and 69 are consequential on NC29 and NC31.

Amendment 62, in clause 67, page 59, line 6, leave out “hydrogen production” and insert “relevant”.

See the explanatory statement for Amendment 61.

Amendment 63, in clause 67, page 59, line 7, leave out “hydrogen production” and insert “relevant”.

See the explanatory statement for Amendment 61.

Amendment 64, in clause 67, page 59, line 10, leave out “hydrogen production” and insert “relevant”.

See the explanatory statement for Amendment 61.

Amendment 65, in clause 67, page 59, line 13, leave out “hydrogen production” and insert “relevant”.

See the explanatory statement for Amendment 61.

Amendment 66, in clause 67, page 59, line 16, leave out “hydrogen production” and insert “relevant”.

See the explanatory statement for Amendment 61.

Amendment 67, in clause 67, page 59, line 18, leave out “hydrogen production” and insert “relevant”.

See the explanatory statement for Amendment 61.

Amendment 68, in clause 67, page 59, line 25, leave out “hydrogen production” and insert “relevant”.

See the explanatory statement for Amendment 61.

Amendment 69, in clause 67, page 59, line 28, at end insert—

“(4) In this section ‘relevant counterparty’ means any of the following—

(a) a hydrogen transport counterparty;

(b) a hydrogen storage counterparty;

(c) a hydrogen production counterparty.”—(Andrew Bowie.)

See the explanatory statement for Amendment 61.

Clause 67, as amended, ordered to stand part of the Bill.

Clause 68 ordered to stand part of the Bill.

Clause 69

Power to appoint allocation bodies

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss the following:

Clause 70 stand part.

Clauses 71 to 76 stand part.

11:15

[Andrew Bowie]

Clauses 69 to 76 concern the allocation of contracts. Clause 69 enables the Secretary of State to appoint one or more persons to act as allocation bodies. They will be responsible for administering competitive allocation processes for hydrogen production and carbon capture revenue support contracts. While initially, to support an emerging market, business model contracts are expected to be awarded bilaterally, it is the ambition of this Government to transition to more competitive allocation processes for hydrogen production and carbon capture revenue support contracts. For the hydrogen production business model, our ambition is to move to price-based competitive allocation from 2025, as soon as legislation and market conditions allow.

Clause 70 gives the Secretary of State the power to issue and revise standard terms of hydrogen production revenue support contracts and carbon capture revenue support contracts. The power also enables the Secretary of State to designate particular standard terms as terms that may not be modified under clause 74.

Clause 71 sets out how an allocation body can notify a hydrogen production or carbon capture counterparty of an allocation decision and enables the design of the allocation process to change over time. Clause 72 builds on clause 71, enabling the Secretary of State to make regulations setting out how hydrogen production and carbon capture revenue support contracts are to be allocated as part of a more competitive process. That includes allowing the Secretary of State to make regulations conferring a power on the Secretary of State to set the rules of allocation in an allocation framework. The expectation is that an allocation framework will be produced and published for allocation rounds and will act as a rulebook for how allocation rounds will operate.

Clause 73 sets out how a hydrogen production or carbon capture counterparty must act upon a notification from an allocation body under clause 71. Any offer to contract is required to be on the standard terms, or on the standard terms as modified in accordance with the procedure provided for in clause 74. This clause enables further regulations to be made that may include setting out the time in which the offer must be made or what happens if the eligible person does not enter into a contract as a result of the offer.

Clause 74 enables a hydrogen production or carbon capture counterparty to agree modifications to the standard terms with low-carbon hydrogen producers or carbon capture entities. These adjustments may be required because it is not possible for the standard terms to anticipate every technology or project-specific issue. Clause 75 clarifies that regulations made using powers in clauses 71 to 74 may include, for example, requirements for how allocation is to be determined competitively, as well as procedures that should be followed and consideration of specified matters and the opinions of specified persons when making any determinations under the regulations. For example, the clause could enable a counterparty to determine whether an applicant has provided sufficient information and evidence that a modification of standard terms is both minor and necessary.

Clause 76 makes clear that a gas system planner licence may include conditions aimed at facilitating or ensuring the effective performance by the independent system operator and planner of any hydrogen production allocation body functions. It also provides that where the Gas and Electricity Markets Authority proposes to add, remove or alter such a condition that relates to Northern Ireland, GEMA must notify the Department for the Economy in Northern Ireland. With those explanations, I beg to move that clauses 69 to 76—

[The Chair]

Just 69 will do.

[Andrew Bowie]

Just 69—that clause 69 stand part of the Bill.

[The Chair]

For clarity, I group various things together in one group when it is convenient to discuss them together. The Minister moves only the first clause in that group. Therefore, in this case the Minister moves only clause 69.

[Dr Whitehead]

These are all riveting clauses, which seem to be pretty well put together. We have nothing to say about them, other than that we trust they will be part of the Bill.

Question put and agreed to.

Clause 69 accordingly ordered to stand part of the Bill.

Clause 70 ordered to stand part of the Bill.

Clauses 71 to 76 ordered to stand part of the Bill.

Clause 77

Further provision about designations

Amendments made: 70, in clause 77, page 66, line 35, after “59,” insert “(Designation of hydrogen transport counterparty), (Designation of hydrogen storage counterparty),”.

This amendment together with Amendments 71, 72 and 74 make supplemental provision about designations under NC29 and NC31.

Amendment 71, in clause 77, page 67, line 3, after “59,” insert “(Designation of hydrogen transport counterparty), (Designation of hydrogen storage counterparty),”.

See the explanatory statement for Amendment 70.

Amendment 72, in clause 77, page 67, line 9, after “59(1),” insert “(Designation of hydrogen transport counterparty)(1), (Designation of hydrogen storage counterparty)(1),”

See the explanatory statement for Amendment 70.

Amendment 73, in clause 77, page 67, line 12, after “a” insert “carbon dioxide”.

This amendment is consequential on Amendment 23.

Amendment 74, in clause 77, page 67, line 12, after “counterparty,” insert “hydrogen transport counterparty, hydrogen storage counterparty,”.—(Andrew Bowie.)

See the explanatory statement for Amendment 70.

Question proposed, That the clause, as amended, stand part of the Bill.

[Andrew Bowie]

Clause 77 enables the Secretary of State to revoke a counterparty designation by notice. A designation will also cease to have effect if the counterparty withdraws consent to the designation by giving not less than three months’ notice in writing to the Secretary of State. Subsection (4) enables the Secretary of State to make provision in regulations enabling a person who has ceased to be a revenue support counterparty to continue to be treated as such a counterparty, including provision about the circumstances in which, and the period for which, such a person may be so treated. I recommend that clause 77 stand part of the Bill.

Question put and agreed to.

Clause 77, as amended, accordingly ordered to stand part of the Bill.

Clause 78

Application of sums held by a revenue support counterparty

[Dr Whitehead]

I beg to move amendment 86, in clause 78, page 67, line 31, at end insert—

“(4A) Revenue support regulations may make provisions for the return of sums held by a revenue support counterparty that have been secured from gas shippers over and above necessary reserve levels to energy supply customers.”

This amendment would guarantee that, where shippers have above what is in reserve provision, the difference would be restored directly to customers from the shippers (in contrast to the way the LCCC works with retailers/customers now).

The amendment follows on from the discussion that we had earlier in Committee about the role of the hydrogen production counterparty in administering the sums that may come its way. We have already had some discussion about the counterparty, which will potentially be enormous in terms of its likely new duties both in hydrogen production and in carbon capture and storage. The counterparty will have a very large amount of money coming in and out, and possibly staying in its reserves and being allocated for the purposes of what the counterparty is being set up for—to develop hydrogen production in this instance, but also carbon capture and storage development.

What is the position at the moment with the LCCC, which, as we have agreed, is likely to be the designated body for the counterparty for various things? The position at the moment is that there is no position on what the LCCC does with sums over and above what is necessary for it to hold in reserve or as contingency for the pay-out of sums to hydrogen production bodies, which is an important omission, because there is no specific guidance or legislative certainty. In practice, the LCCC hands over money greater than its reserves where it has accumulated additional sums of money because of the periodic inversions of strike price and reference price—hence there is money coming into it, rather than being paid out of the LCCC. It does pay those sums out, but there is no certainty as to where they go. Indeed, there is no certainty that anything should be paid out. At the moment, it would be quite possible for the LCCC to say, “We need more reserves, so we’re not paying any money out,” or it could pay that money back to industry or to certain parts of industry. I understand that the LCCC pays out that money to energy suppliers, but, again, there is no certainty that even the money paid out by the LCCC to those energy suppliers ever reaches the customer.

For surpluses over and above what is necessary for reserves and operational costs of the LCCC—the counterparty—if the principle is that the customer pays the levy, which we sincerely hope it is not, but if it is, should there be surpluses within that levy, the customer should get the money back one way or another. Similarly, if the Consolidated Fund is the source of a levy, the Consolidated Fund should get that money back one way or another. It should not be used for other purposes or sit in a bank account somewhere. It should be actively used, either for restitution of customer bills or for further use via the Consolidated Fund for the future.

The amendment would ensure that the revenue support regulations provide for the return of sums held by a revenue support counterparty, which have been secured over and above necessary reserve levels, to energy supply customers. It makes a very specific directional instruction, as it were, in the Bill, about what the destination of those funds should be over and above the reserves for the counterparty. I think that is a useful addition to the Bill and a useful clarification of what levy money for the future we are contemplating entrusting this very large body with.

It is a clear instruction as to what that body should do. It is a clear instruction from the Committee of what it wants to ensure happens when the Bill becomes an Act of Parliament. That is why we have tabled this amendment. I think the Minister will agree that the situation at the moment with the LCCC is a little shadowy, although it works okay in practice. That allows us to be much clearer for the future about not only how these things will work in practice but how they should be directed in principle.

[Andrew Bowie]

I thank the hon. Member for his amendment. I probably would not use the same language and describe the LCCC as a shadowy organisation, but I understand the spirit in which he makes those comments. The Opposition are absolutely right to focus on ensuring that the Bill can make provision for fair and efficient payment and reconciliation arrangements. However, I would like to reassure the Opposition and anybody else following our proceedings today that the existing provisions in the Bill already enable regulations to provide for such arrangements.

As previously discussed, clause 67 explicitly enables regulators to make provision for the amount to be paid to levied market participants by a relevant counterparty or hydrogen levy administrator—in this case the not-shadowy LCCC. That includes the pass-through of payments received by a relevant counterparty under revenue support contracts, such as payments made by a hydrogen producer to a hydrogen production counterparty. We would expect that in such instances the levied market participants would pass these payments on to their customers.

However, to provide extra assurance on this matter, subsection (3) of clause 67 also enables the Secretary of State to make regulations requiring that the customers of levied market participants benefit in accordance with those regulations. I hope this provides the hon. Member for Southampton, Test with the assurance he requires to withdraw his amendment.

[Dr Whitehead]

I think it is incumbent on me to ask the Minister a question. Yes, the Minister will have the power to make regulations, but will he commit himself to making those regulations should the Bill pass? As he knows, making regulations is something Ministers may do, but they can sometimes sit on their hands and not make them. It is important to be clear on that.

[Andrew Bowie]

I am suggesting that the Secretary of State make regulations. I am not quite the Secretary of State, but maybe one day. The Government are committed to working to ensure that the design of the levy enables fair and efficient payment and reconciliation arrangements. Work on the detailed design of the levy, including decisions related to calculation, is ongoing. We will consult on the detailed design of the levy before laying the regulations that introduce it.

[Dr Whitehead]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 78 ordered to stand part of the Bill.

11:25

The Chair adjourned the Committee without Question put (Standing Order No. 88).

Adjourned till this day at Two o’clock.

Energy Bill [ Lords ] (Fifth sitting)

Committee stage
Tuesday 6th June 2023 Public Bill Committees

The Committee consisted of the following Members:

Chairs: Dr Rupa Huq, † James Gray, Mr Virendra Sharma, Caroline Nokes

† Afolami, Bim (Hitchin and Harpenden) (Con)

† Blake, Olivia (Sheffield, Hallam) (Lab)

† Bowie, Andrew (Parliamentary Under-Secretary of State for Energy Security and Net Zero)

† Britcliffe, Sara (Hyndburn) (Con)

Brown, Alan (Kilmarnock and Loudoun) (SNP)

† Clarkson, Chris (Heywood and Middleton) (Con)

Fletcher, Katherine (South Ribble) (Con)

Gideon, Jo (Stoke-on-Trent Central) (Con)

Jenkinson, Mark (Workington) (Con)

† Levy, Ian (Blyth Valley) (Con)

† McCarthy, Kerry (Bristol East) (Lab)

† Morrissey, Joy (Beaconsfield) (Con)

Nichols, Charlotte (Warrington North) (Lab)

† Owatemi, Taiwo (Coventry North West) (Lab)

† Shelbrooke, Alec (Elmet and Rothwell) (Con)

† Western, Andrew (Stretford and Urmston) (Lab)

† Whitehead, Dr Alan (Southampton, Test) (Lab)

Sarah Thatcher, Chris Watson, Committee Clerks

† attended the Committee

Public Bill Committee

Tuesday 6 June 2023

(Afternoon)

[James Gray in the Chair]

Energy Bill [Lords]

Clause 79

Information and advice

14:00

Question proposed, That the clause stand part of the Bill.

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Andrew Bowie)]

The clause enables revenue support regulations to allow for the provision and publication of information and the giving of advice. For revenue support contracts to function effectively, flows of information and advice may be needed among—but not limited to—the Secretary of State, a revenue support counterparty, an allocation body, a hydrogen levy administrator and any other person or description of persons specified in the regulations. The regulations will help ensure that information and advice required for the functioning of the business model schemes is provided to the bodies requiring it at appropriate points. The clause also enables revenue support regulations to make provision governing the use and protection of such information to ensure it is handled in an appropriate manner.

[The Chair]

Dr Whitehead, do you wish to speak to the clause?

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

indicated dissent.

Question put and agreed to.

Clause 79 accordingly ordered to stand part of the Bill.

Clause 80

Enforcement

Question proposed, That the clause stand part of the Bill.

[Andrew Bowie]

Thank you, Mr Gray. I was unable to finish my mint imperial; I was rather hoping that the Opposition might have something to say on the previous clause.

The clause enables regulations to make provision for the Gas and Electricity Markets Authority and the Northern Ireland Authority for Utility Regulation to enforce hydrogen levy requirements imposed on relevant GB and Northern Ireland market participants respectively. It will allow the regulators to, for example, issue orders to secure compliance, impose financial penalties and, where other enforcement measures are insufficient, consider possible licence revocation. It is critical that the levy is supported by a suite of enforcement measures. This will help reduce the risk of defaults on levy payments and help ensure that the levy administrator can collect the moneys required to fund the hydrogen business models.

The clause also provides the Secretary of State with the power to make provision in regulations for the Gas and Electricity Markets Authority to enforce requirements that may be imposed on the independent system operator and planner as a hydrogen production allocation body. That may include requirements that relate to Northern Ireland. The clause helps ensure a consistent regulatory regime for the independent system operator and planner.

[Dr Whitehead]

I am sorry, Mr Gray, but I am going to have to leave the Minister with a mint imperial in his mouth as I do not have anything to say on this clause either.

Question put and agreed to.

Clause 80 accordingly ordered to stand part of the Bill.

Clause 81

Consultation

Question proposed, That the clause stand part of the Bill.

[Andrew Bowie]

Mint imperial completed. The clause requires the Secretary of State to consult the Department for the Economy in Northern Ireland and Scottish and Welsh Ministers before making revenue support regulations where the matter being consulted on is within the legislative competence of the relevant devolved legislature. In addition, the Secretary of State must consult other persons as they consider appropriate. This provides an opportunity for those directly affected by the regulations and those with special expertise to express their views on their design. The clause also requires the Secretary of State to consult those persons he considers it appropriate to consult before publishing standard terms under clause 70.

Question put and agreed to.

Clause 81 accordingly ordered to stand part of the Bill.

Clauses 82 and 83 ordered to stand part of the Bill.

Clause 84

Shadow directors, etc

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss clauses 85 to 87 stand part.

[Andrew Bowie]

I will keep this brief. Clause 84 makes it clear that in exercising their functions under chapter 1 in relation to a revenue support counterparty, neither the Secretary of State nor an allocation body are to be deemed to be managing or controlling a counterparty in a way that would class them as, for example, “shadow directors”.

Clause 86 caters for a scenario where the independent system operator and planner—also known as the ISOP—is appointed as the hydrogen production allocation body. The clause will allow the Secretary of State to modify the electricity system operator and gas system planner licences expected to be held by the ISOP, as well as related documents, for the purposes of facilitating or ensuring the effective performance of hydrogen production allocation and related functions.

Question put and agreed to.

Clause 84 accordingly ordered to stand part of the Bill.

Clauses 85 to 87 ordered to stand part of the Bill.

Clause 88

Financing of costs of decommissioning etc

[Dr Whitehead]

I beg to move amendment 88, in clause 88, page 79, line 4, at end insert—

“(9A) Guidance by virtue of this section shall have regard to the circumstances under which a prospectively decommissioned carbon capture and storage facility came to be established and what relation that point of establishment had with provisions under part 4 of the Petroleum Act 1998.”

This amendment seeks to clarify the position of decommissioned oil and gas plants that are not fully decommissioned before they are transitioned to a carbon capture usage and storage plant, and where financial responsibility then lies at the end of the CCUS lifecycle when it is due to be decommissioned. This amendment says that the Secretary of State must have regard for this complexity and assess where the responsibility lies.

We now come to chapter 2 of part 2 of the Bill, which deals mainly with decommissioning of carbon storage installations. That is likely to be of concern rather later in the day than currently, but it is important to get it right from the outset. Many carbon capture and storage installations will not have been set up just for the purpose of carbon capture and storage; they will have been recommissioned from a previously decommissioned oil and gas facility, or one that was not entirely decommissioned but put to use as a repository for carbon dioxide, usually offshore. As we go through that sequence, there will be many circumstances where what we had in place previously with respect to North sea oil and gas decommissioning, and the responsibilities of the company that has been producing oil or gas in a particular field as it moves to decommissioning, may become a little blurred.

Abandonment of offshore installations is covered by part IV of the Petroleum Act 1998. There is a lot in there about the circumstances under which those who operate offshore oil and gas facilities have a legacy duty to decommission the well from which they have been producing. They have responsibilities in that respect. They have to decommission the well to proper standards, ensuring that it is properly capped and that the plant has gone from the production platform. The platform itself may be towed away and scrapped in a Norwegian yard somewhere. The cycle is therefore complete as far as that oil and gas decommissioning is concerned.

One increasingly apparent issue is that we no longer want that to happen completely if we are to have successful carbon capture and storage facilities, under the North sea in particular. We want to see to what extent we can take those installations and turn them to another purpose—carbon capture and storage. They are adaptable for such purposes, and we will certainly use a lot of transferred facilities. I imagine that we will produce little in the way of brand-new carbon capture and storage facilities, but for some infrastructure—pipelines and so on. The pattern for carbon capture and storage has already largely been laid down by what we do in the North sea now.

One task for the future will be unrolling some of the decommissioning activity, which is a big business now, with a lot going on. One concern is that if the decommissioning of infrastructure continues at the pace it is going at the moment, when we come to concentrate our production in the North sea into smaller fields that have already been discovered but not yet exploited, we might well find that a lot of the infrastructure for the larger fields that we have decommissioned will have to be recreated all over again to allow the economic exploitation of the smaller fields, which are effectively in existing fields that have had the infrastructure stripped from them already.

That is one reason why we should not continue the decommissioning regime exactly as it is. The second reason, which is as or more important, is the extent of the infrastructure as a whole. I emphasise that this is a question not just of capping off oil wellheads and leaving the field alone when it is exhausted, but of trying to keep the infrastructure in place to allow for the transportation, landing and all the rest of the carbon capture activity to take place within the framework that was there before.

At the very end of the decommissioning process—for example, once a carbon capture and storage institution created from a depleted field is full, which I appreciate is quite a long way off—we will have to have a decommissioning programme in reverse. The question then arises: what sort of legacy duty will arise for those people who used the field in other circumstances, if it has been extended for carbon capture purposes and must then be decommissioned? Is there a joint legacy duty between the previous oil and gas users and the current carbon capture and storage users, or do the carbon capture and storage users take over completely the legacy duty for the previous field as far as decommissioning is concerned? Is there some kind of shared responsibility?

The amendment seeks to instruct guidance on such matters to have regard to those kinds of circumstances. I will read its exact wording:

“Guidance by virtue of this section”—

that is, clause 88, on decommissioning—

“shall have regard to the circumstances under which a prospectively decommissioned carbon capture and storage facility came to be established and what relation that point of establishment had with provisions under part 4 of the Petroleum Act”.

The amendment would link the carbon capture and storage activity straight back to the Petroleum Act, so that there is a continuous skein of commissioning, use and decommissioning, with the responsibilities that go with all that.

14:16

It is important that, one way or another, we ensure that that happens, so that at the end of the carbon capture and storage story we do not leave a legacy of confusion, where no one really knows who is responsible for what. Indeed, some of the people who might have taken on the repositories for carbon storage might well be discouraged from doing so in the first place because they are unclear about what their decommissioning responsibilities will be in the long term. It is a question of thinking not just about something in the very distant future, but about how we get it right now, so that the future is fairly secure for those people undertaking carbon capture and storage activities.

I would like to hear from the Minister whether he thinks what the Government have in mind covers those points, or whether there are things that can make that happen that, despite my best endeavours to read all the subsections and various bits of the Bill, I have not got to. Personally, I think the safest way to proceed would be to adopt an amendment like this one, so that we are clear about what we are doing on carbon capture and storage in future.

[Andrew Bowie]

Amendment 88, tabled by the Opposition spokesperson, seeks to expand the scope of guidance on the decommissioning fund. He has explained why he is presenting this amendment, and we should acknowledge his point about the complexities where a former oil and gas installation is repurposed for carbon storage purposes. It is important to get the question of who is responsible for decommissioning right.

The Petroleum Act 1998 is the principal legislation governing decommissioning offshore and the decommissioning of offshore carbon capture, usage and storage infrastructure, and provides a framework for the decommissioning of offshore pipelines and installations. However, it is not necessary to rely solely upon the guidance we are setting out in the Bill to deal with the situation in the North sea, because of what I have just set out: the existing law in the 1998 Act, combined with amendments to sections 30 and 30B of the Energy Act 2008 provided for by clauses 91 and 92 of this Bill. We believe that those already provide the necessary safeguards, because under part 4 of the Petroleum Act, the Government can call upon the previous owner of an asset to fulfil the decommissioning obligation if the current owner is unable to do so. That creates a chain of liability throughout the asset’s life, which would extend into carbon capture, usage and storage if an asset is reused. Previous oil and gas owners therefore continue to be liable for decommissioning a repurposed asset, unless the Secretary of State has designated the asset as eligible for change of use relief and other qualifying requirements are met.

The conditions to qualify for change of use relief are set out in sections 30A and 30B of the Energy Act 2008. In turn, it is proposed that sections 30A and 30B be updated by clauses 91 and 92 of the Bill. The amendments made by clauses 91 and 92 mean that, to qualify for the relief, the previous oil and gas owner would need to pay a top-up amount into the decommissioning fund to reflect the decommissioning liability that that previous owner is being relieved of. In addition, a decommissioning notice under section 29 of the Petroleum Act 1998 must have been served on other persons, such as the CCUS operator who will ultimately have to decommission the carbon storage installation at the end of its life.

The Government do not rule out the possibility of guidance providing additional explanation and detail on that and other matters pertaining to it, but we do not believe that it needs to be stated in the legislation, for the reasons that I have given. I therefore humbly ask the hon. Member for Southampton, Test to consider withdrawing his amendment.

[Dr Whitehead]

The Minister has set out admirably the sub-controls and clarifications that can be provided by texts outside part IV of the 1998 Act, but with respect, those address circumstances in which the operator of a carbon capture and storage facility cannot meet their liabilities and obligations. In those circumstances, as the Minister says quite correctly, the previous owners will have some liability to step into the breach. By and large, as the new owners of carbon capture and storage facilities invest in them, they will not want to have liability, unless they go bust—that is effectively what the Minister is saying—and they presumably do not intend to go bust during the life of the carbon capture and storage plant. If their only lifetime guarantee from the repurposed body is that someone will come to their aid if they go bust, that is not really sufficient to establish the chain throughout the whole process. That is essentially what we are seeking through our amendment.

I appreciate that the Minister thinks that that can be done outside the Petroleum Act, but I would like an assurance that he has taken my point on board. When additional guidance is supplied, it should address the whole cycle, ensuring a good outcome for everybody, rather than a distressed outcome for certain people. If the Minister can give that assurance, I will be happy withdraw the amendment.

[Andrew Bowie]

As I said, additional guidance will be forthcoming. We do not believe it necessary, in this Bill, to legislate for what we are discussing. These are serious points, and in speaking to clauses 88 and 89, I will go into more detail about subsequent support for decommissioning, who is responsible, and so on. I hope that that is acceptable for the hon. Gentleman and that he feels able to withdraw his amendment.

[Dr Whitehead]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss clauses 89 to 93 stand part.

[Andrew Bowie]

Clause 88 gives the Secretary of State the power to make regulations on the provision of security for the decommissioning costs of CCUS transport and storage networks. That includes enabling the Secretary of State to make regulations requiring CO₂ transport and storage companies to establish decommissioning funds for each of their storage sites and associated transport networks. We must ensure that CCUS is prepared for decommissioning in an appropriate way to mitigate any long-term impact on our environment. Clause 89 sets out supplementary provision, including regulations made under clause 88, relating to the financing of the decommission of CCUS assets.

The Petroleum Act 1998 is, as I have set out, the principal legislation governing the decommissioning of offshore oil and gas. In addition, section 30 of the Energy Act 2008 allows for the decommissioning of carbon storage installations. Clause 90 makes several amendments to section 30 of the 2008 Act by clarifying how the part IV decommissioning regime applies in a CCUS context.

Industry has identified certain barriers to the repurposing of certain CCUS structures, which the Bill will address. Specifically, under the 1998 Act, the Government can reach back to current and previous owners of an installation or pipeline to carry out the decommissioning of that asset. That will create a chain of liability through the asset’s life, and may act as a barrier to repurposing. Owners of oil and gas assets may consider the relative uncertainty of CCUS decommissioning liabilities too great a risk to carry.

Clause 92 mirrors the effects of clause 91 but relates to change of use relief for pipelines, rather than for installations. Clause 93 builds on the previous clauses 91 and 92, relating to change of use relief. Clause 93 inserts a new section 30C into the Energy Act 2008. It enables the Secretary of State to make regulations about obtaining and sharing information, for the purposes of the Secretary of State’s functions regarding change of use relief. Clause 93 also makes an amendment to section 105 of the 2008 Act, consequential to the amendments in clauses 91 and 92. On that basis, I ask that clause 88 stand part of the Bill.

Question put and agreed to.

Clause 88 accordingly ordered to stand part of the Bill.

Clauses 89 to 93 ordered to stand part of the Bill.

Clause 94

Designation of strategy and policy statement

[The Chair]

With this it will be convenient clauses 95 to 97 stand part.

[Andrew Bowie]

This group of clauses deals with designating a carbon capture, usage and storage strategy and policy statement. Although day-to-day regulatory decisions will be made independently by the economic regulator, policy direction for carbon capture and storage will continue to be directed by the Government. Clause 94 provides that the Secretary of State may designate a strategy and policy statement for CCUS, which the economic regulator must have regard to in carrying out its functions. Such a statement would set out the strategic priorities for CCUS policy, the particular outcomes to be achieved as a result of the implementation of that policy, and the roles and responsibilities of persons who are involved in implementing that policy or who have other functions affected by it.

Providing for a strategy and policy statement to be designated is consistent with the approach in other economically regulated sectors, including the energy sector. Given that there is potential for a CCUS strategy and policy statement and an energy strategy and policy statement to overlap in certain areas, in preparing a CCUS strategy and policy statement the Secretary of State must take account of any energy strategy and policy statement that has been designated.

Clause 95 requires the economic regulator to have regard to the strategic priorities set out in a CCUS strategy and policy statement and to carry out its CCUS-related functions in a way that aims to achieve the policy outcomes set out in the statement. In carrying out its functions in the manner best calculated to achieve the policy outcomes, the economic regulator remains subject to the application of the principal objectives in clause 1 of the Bill. As defined in this clause, in carrying out certain functions—those related to the determination of disputes and to competition—the economic regulator should not be required to take account of a CCUS strategy and policy statement. Nor do the duties set out in relation to a CCUS strategy and policy statement affect or override any other legal obligation or duty upon Secretary of State or the economic regulator under this Bill or any other Act. If the economic regulator considers that a policy outcome contained in the strategy and policy statement is not realistically achievable, it must inform the Secretary of State.

Clause 96 establishes timeframes and circumstances for reviewing a CCUS strategy and policy statement. The process of setting policy direction should not occur more often than once a Parliament. That reduces the risks associated with frequent change to policy priorities, and ensures a stable and predictable regulatory landscape for investors. However, there should be scope to review outside that timeframe if, for example, a general election has taken place outside this cycle, in order to ensure the strategy and policy statement reflects the priorities of the Government of the day. A review may result in a new statement, revisions to the existing statement or the conclusion that the existing statement remains relevant and appropriate. This is consistent with the approach in any other regulated sector and with the reviewing of an energy strategy and policy statement, as set out in the Energy Act 2013.

Clause 97 sets out the procedure the Secretary of State must follow before a CCUS strategy and policy statement can be designated. This process provides for consultation and parliamentary approval of a CCUS strategy and policy statement. The procedure set out in this clause follows the procedure for designating a strategic policy statement under part 5 of the 2013 Act. Therefore, I ask that clause 94 stand part of the Bill.

14:29

[Dr Whitehead]

I have no particular objections—indeed, I strongly support the strategy and policy statement and everything that goes with it as far as the CCUS is concerned. As the Minister has pointed out, this does not cut across any other strategy and policy statement; conversely it should be guided by other strategy and policy statements where appropriate. Later, we will debate the extent to which the regulator, Ofgem, may have a strategy and policy statement of its own that gives it a carbon reduction net zero imperative in its operations. I assume that under those circumstances this particular strategy and policy statement would be subject to that strategy and policy statement as far as its operation is concerned. Will the Minister confirm that?

[Andrew Bowie]

I am happy to confirm that. The economic regulator, Ofgem, would be required to take into account the strategic priorities set out in any CCUS strategy and policy statement when carrying out its CCUS-related functions. Clause 40, which we have already debated, requires Ofgem to publish a document as soon as is reasonably practicable after a strategy and policy statement has been designated, setting out the strategy it intends to adopt to further the delivery of the policy in the statement and how that will be implemented. I am very happy to confirm that that would be the case.

Question put and agreed to.

Clause 94 accordingly ordered to stand part of the Bill.

Clauses 95 to 97 ordered to stand part of the Bill.

Clause 98

Specified provisions in carbon dioxide storage licences

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss clauses 99 to 101 stand part.

[Andrew Bowie]

Clause 98 will allow the Oil and Gas Authority, whose business name is now the North Sea Transition Authority, to consider a proposed change of control of a holder of a carbon storage licence before it takes place to ensure that the governance, technical and financial capability of such a licensee remains appropriate. At present, the NSTA issues licences to give the right to store carbon dioxide in offshore geological formations; prior to issuing the licences, the NSTA satisfies itself that the prospective licensee company and any parent company are fit to hold the licence and will meet the obligations.

At times during the life of a licence, the ownership and control of a licensee may pass to a new parent company or person. An undesirable change of control could undermine investor confidence in the commercial environment, making the UK continental shelf a less attractive place for investment. Currently, the NSTA is able to take remedial action regarding a change of control of licence holder only after such a change has occurred. This is seen by both the NSTA and the wider industry as being inefficient and of limited effectiveness in preventing harms to the wider industry, the Government and the economy. The existing remedy is also time-consuming, typically taking a year or more, during which a potentially undesirable owner of a licensee could harm investor confidence in the commercial environment.

A requirement will therefore be introduced through schedule 1 to the Storage of Carbon Dioxide (Licensing etc.) Regulations 2010 for current and future licensees to apply in writing to the NSTA for consent to a change of control at least three months before the planned date of the change. Following receipt of an application, the NSTA may give unconditional or conditional consent, or indeed refuse consent to the proposal. Conditions imposed may be financial, relate to the timing of the change of control, and relate to the performance of activities permitted by the licence. In the case of conditional consent or refusal, the NSTA must give the licensee the opportunity to make representations and it must consider those representations. The measure will also allow the NSTA to revoke a licence where its prior consent has not been obtained for a change of control. The NSTA will therefore be able to regulate the suitability of carbon storage licensees in a more robust and timely manner.

Clause 98 also sets out how provisions inserted into a carbon storage licence by schedule 6 may be altered or deleted. Clause 99 clarifies that where a carbon storage licence is revoked, the NSTA also has the power to revoke the permit. Without this clause, an undesirable investor might argue that they are able to continue to operate under the permit, and investor confidence in the commercial environment will be harmed.

Where the NSTA is the licensing authority under section 18 of the Energy Act 2008, it also approves and issues storage permits. The granting of a licence allows the licensee to carry out various activities in the licensed area; to carry out storage of carbon dioxide or to establish and maintain installations for the purpose, a storage permit must also be issued. Clause 98 will create a requirement for carbon storage permit holders to seek consent from the NSTA at least three months before a change of control is due to occur. Where that procedure has not been followed and a change of control has occurred without its prior consent, the NSTA will be able to revoke carbon storage permits.

Together, clauses 98 and 99 will ensure that the new approach will apply for both licences and permits, as is intended. This will ensure that the basin continues to attract investment while protecting the taxpayer from funding liabilities not met by potential undesirable investors.

Clause 100 inserts a new subsection into section 23 of the Energy Act 2008, ensuring that a licensee does not commit an offence due to a failure to obtain the prior consent of the NSTA in relation to a change of control. Section 23 covers offences relating to carbon storage licences, including setting out that a licence holder commits an offence if

“a thing is done for which the licence specifies that the prior consent of the licensing authority or any other person is required, without that consent first having been obtained”.

Section 23 was designed to address situations where the action of seeking consent from the NSTA and the “thing” being done is within the licensee’s full control. Applying section 23 to a change of control of licensee would be inappropriate, because often a licence holder cannot prevent such a change of control or have any control over the timing of such a transaction. For example, section 23 could be applied to those who have control over the company, such as directors or high office holders. However, in relation to a change of control event, a director may have no control over such a transaction taking place, and it may be the case that they had no way to prevent the change of control or influence the timing. This clause will amend the existing legislation by clarifying that section 23(1)(a) or (1)(b) will not apply in respect of a change of control of licensee. Without that clarification, directors or high office holders of a carbon storage licence holder could be fined up to £50,000 and/or jailed for up to two years for failing to obtain the consent of the NSTA prior to a change of control occurring.

Clause 101 will allow the NSTA to request that a relevant company or person provide it with any information it may require in exercising its functions in relation to a change or potential change of control of a licensee. Currently, the authority does not have information-gathering powers to assist it in considering a change of control in respect of a carbon storage licensee. In some instances, the authority is therefore limited in conducting proper due diligence to determine whether a change of control of a licensee is undesirable.

The information will help the NSTA to consider the financial and technical capability, operational and commercial plans, and governance and fitness of the licensee in relation to its proposed controlling entity. That will provide the authority with the necessary information to appropriately consider an application for consent, or when considering whether to revoke a licence where a change of control has occurred without consent.

Information that would be protected from disclosure or production in legal proceedings on grounds of legal professional privilege or, in Scotland, confidentiality of communications is not included under this clause.

[Dr Whitehead]

I congratulate the Minister on his speed-reading abilities this afternoon, which help the progress of the Committee considerably. I do not object to the clause, but we ought to be clear about the nomenclature used in it. The Minister invoked the name of the North Sea Transition Authority on a number of occasions in connection with carbon capture and storage provision. Of course, the North Sea Transition Authority is just the North Sea Transition Authority in name. It is not the North Sea Transition Authority in law; it is the Oil and Gas Authority in law.

Indeed, it has a whole lot of responsibilities specified by the Energy Act 2016, which include, among other things, overseeing the maximum economic extraction of oil and gas in the North sea. One might say that the provision of carbon capture and storage and maximum economic extraction of oil and gas in the North sea do not necessarily fit well together. Indeed, this is a debate we will come to later in our consideration of the Bill, but we need to be clear that as things stand, the supervision, licences and so on that are set out in this clause appear to rely on a slightly inappropriate authority. That does not necessarily mean that it is not going to work okay, but it does mean that it would be a good idea to have the actual name of the North Sea Transition Authority in law, as well as in characterisation.

After all, let us say that someone called Andrew Bowie decided that he wished to be known as Ziggy Stardust in future. Provided he could get people to agree that he really was Ziggy Stardust, that would be fine, except under circumstances where the law came to be applied. Mr Ziggy Stardust would find that under those circumstances, he had to refer to himself as Andrew Bowie. That is where we are with this transition authority at the moment. It is intention rather than fact, and it concerns me that we are writing into the Bill a number of references to the Oil and Gas Authority as if it were the North Sea Transition Authority, when the North Sea Transition Authority is an authority in name only. As I say, this is not something that one goes to the wall on—we do not oppose the clause—but I think it would be a good idea if the Government at least took some steps towards regularising the legal name and the daily name of the Oil and Gas Authority, so that its future purpose fits its legal position. Obviously, this is a bit of a precursor to a debate we will have later.

[Andrew Bowie]

I will not be drawn on whether or not a certain individual will be changing their name, and what position that would give them legally. However, I get the hon. Gentleman’s point regarding the legal entity that is the Oil and Gas Authority and the references we are making to the North Sea Transition Authority in the Bill, and indeed in other pieces of legislation. I agree with him: there should be some clarification to that effect. I will have to go away and explore exactly what work would have to be done, presumably through legislation—primary or secondary—to effect a legal name change from the OGA to the NSTA, but I think it would help us all if that were undertaken. I will explore how exactly that would take place and the work that would have to be done.

In terms of whether an organisation that was set up following the oil price crash in 2014-15 with the explicit aim of supporting the oil and gas industry and maximising economic recovery can work, and can have within its purview licences being issued for carbon capture, usage and storage, I disagree: I think that they are perfect bedfellows. One complements the other; in fact, the skills and requirements of the companies involved in oil and gas extraction are very much involved in the operation, or potential operation, of CCUS and other connected technologies. Therefore, I think that the OGA, the NSTA—call it what you will—is the perfect authority that should hold the power to issue those licences and have regulatory control over that industry as we move forward.

Question put and agreed to.

Clause 98 accordingly ordered to stand part of the Bill.

Clauses 99 to 101 ordered to stand part of the Bill.

Clause 102

Access to infrastructure

Question proposed, That the clause stand part of the Bill.

[Andrew Bowie]

Regulations are in place governing access to carbon dioxide transport and storage infrastructure. The regulations set detailed requirements on how user access to transport and storage networks should be managed, including any disputes arising. This clause enables the Secretary of State to make new regulations regarding access to carbon dioxide transport and storage infrastructure that may amend, revoke or replace the existing regulations, which were implemented using the powers in section 2(2) of the European Communities Act 1972. Regulations made under this power may confer functions on any person, and may make provision regarding enforcement in relation to access rights. In relation to enforcement, regulations may create criminal offences or impose civil penalties, and may confer jurisdiction on a court or tribunal. Where regulations impose a civil penalty, they must also provide for a right of appeal against the imposition of the penalty. I commend clause 102 to the Committee.

Question put and agreed to.

Clause 102 accordingly ordered to stand part of the Bill.

Clause 103

Financial assistance

14:45

[Andrew Bowie]

I beg to move amendment 21, in clause 103, page 97, line 19, leave out

“, out of money provided by Parliament,”.

This amendment leaves out words that are not considered necessary. Leaving out the words also ensures consistency with the approach taken by clause 134 in relation to the power under that clause to provide financial assistance.

[The Chair]

With this it will be convenient to consider clause stand part.

[Andrew Bowie]

Government amendment 21 amends the financial assistance power in clause 103 by removing the words

“out of money provided by Parliament”.

Those words are not considered necessary, and their removal ensures a consistent approach with the power to provide financial assistance under clause 134.

Clause 103 enables the Secretary of State to incur expenditure and provide financial assistance for the purpose of encouraging, supporting or facilitating activities for carbon capture, transport and storage, the production of low carbon hydrogen, and the transport and storage of hydrogen. This will enable the Government to deliver on their commitment of £20 billion investment in CCUS and support the establishment and subsequent expansion of the first two industrial clusters by the middle of this decade, and a further two CCUS clusters by 2030. Government support for CCUS will incentivise private investment, economically benefit our industrial heartlands and support in the region of 50,000 jobs by 2030.

It will also help enable the Government to deliver on their ambition for up to 10 GW of new low-carbon hydrogen production capacity by 2030, subject to value for money and affordability. That has the potential to unlock up to 12,000 jobs and £9 billion of private investment and could play a critical role in the UK’s commitment to net zero by 2050. It could be supported by the development of hydrogen transport and storage infrastructure, which represents the critical next step in the growth of the hydrogen economy to meet our levelling- up ambition. I commend Government amendment 21 and clause 103 to the Committee.

[Dr Whitehead]

I am a bit puzzled. Government amendment 21 takes the words

“out of money provided by Parliament”

out of clause 103(1). It would then read: “The Secretary of State may provide financial assistance to any person for the purpose of encouraging” and so on. Those purposes are the transportation and storage of carbon dioxide, carbon dioxide capture facilities, low carbon hydrogen production and so on—all the things we have been talking about. The implication of taking those words out is that the Secretary of State may, from other money, provide this assistance. So it will come from somewhere else.

I would have thought that it is not particularly superfluous to actually set out where the money is coming from, which is Parliament, as it should be. It may be that in the Minister’s zeal to simplify the Bill, which it certainly needs, he has gone a bridge too far with the amendment. That may allow a construction to be placed on the Bill that might not be what he intended, or what I would intend, but could be read into the Bill in the future.

I do not know where the Minister might get money from if not from Parliament—certainly not in the sums necessary to provide this kind of assistance—but we could conceivably say that the Minister might get the money from, for example, a large overseas donor. It is important that we specify where the money is coming from, and “provided by Parliament” does that. I do not think it is superfluous. We do not want to go to the wall and divide on the amendment, but I have some questions about it, and I think the Minister ought to have some questions in his mind as well.

[Andrew Bowie]

I thank the hon. Gentleman for his questions. The reason why we no longer consider the wording necessary is because, subject to parliamentary agreement of the Bill’s provisions, clause 103 will provide for expenditure from the public purse on carbon capture, carbon dioxide transportation and storage, low-carbon hydrogen production, and hydrogen transport and storage. It is not necessary to specify that such expenditure will come from moneys provided by Parliament, so it is simply a case of simplifying the Bill. Financial assistance may be provided through grants, loans, guarantees or indemnities, or by provision of insurance, and it may be provided subject to conditions provided under a contract, but we feel that the wording in the Bill is superfluous, given that such assistance will be agreed, through the Bill, by Parliament in the first instance.

Amendment 21 agreed to.

Clause 103, as amended, ordered to stand part of the Bill.

Clause 104

Low-carbon heat schemes

[Dr Whitehead]

I beg to move amendment 89, in clause 104, page 98, line 35, at end insert

“which must include provision for—

(a) a ban on the installation of unabated gas boilers in new properties from March 2025; and

(b) a ban on the sale and installation of unabated gas boilers in all properties after March 2035.”

This amendment would mean that any scheme the Secretary of State wanted to bring in would have to be based on the above timescales for banning the use of gas boilers by 2025/2035.

We now come to a new part of the Bill, which concerns new technology. The chapter that we are discussing concerns low-carbon heat schemes, and the clause allows the Secretary of State, by regulation, to make

“provision for the establishment and operation of one or more low-carbon heat schemes.”

The clause also talks about targets and so on in relation to low-carbon heat schemes.

We think it might be a good idea—not that this is our policy—for the targets to which the clause refers to be specified in terms of what the Government have determined as their targets on the sale and installation of unabated gas boilers between March 2025 and March 2035. After all, those targets are in the public domain. The Government have stated them in the future homes strategy, the future homes standard and the energy security strategy. The Government have stated the targets in two forms: one is a ban on the installation of unabated gas boilers in new properties from March 2025, and the other is a ban on the sale and installation of unabated gas boilers in all properties after March 2035.

As things stand, those targets, which the Government have explicitly stated and which we would certainly go along with—we might want them to be a little more advanced, but we think they are about right—do not have any force. They are just aspirations. We think that putting them on the face of the Bill—after all, they are already Government policy—would not be hard for the Government to accept, but would enhance the validity and scope of those targets by ensuring that they are in the part of the Bill on low-carbon heat schemes, so that we can see everything together. It is a very modest and friendly suggestion, which I am sure the Government will have no problem adopting.

[Andrew Bowie]

As ever, I thank the hon. Gentleman for his well-thought-out remarks. The amendment would require that, in order to introduce a low-carbon heat scheme such as the planned clean heat market mechanism, the Government would also have to legislate for a ban on the installation of gas boilers in new build and existing properties respectively.

Committee members will know that the Government are introducing a future homes standard in 2025, which will require that new properties be equipped with low-carbon heating and high levels of energy efficiency from the outset, avoiding the need for future retrofitting. In addition, the Government have set out clearly the intention to phase out the installation of new natural gas boilers from 2035 in existing properties. There is therefore no disagreement that fossil fuel heating appliances have no long-term role. The recent volatility in global natural gas markets only makes that logic more apparent—on that, I think we are all in agreement.

However, the Government are firmly of the view that it would not be appropriate or helpful to make the ability to make regulations to launch a low-carbon heat scheme conditional on an entirely separate legislative measure such as an appliance ban, as the amendment proposes. Creating such a dependency would risk delaying or even forestalling the introduction of the planned clean heat market mechanism scheme altogether. Perversely, that would have the effect of constraining the development of the very markets and supply chains whose growth would be a prerequisite of phasing out natural gas boilers. I therefore respectfully and humbly urge the hon. Member to withdraw his amendment.

[Dr Whitehead]

I hear what the Minister has said. I am a little sorry that the Government cannot place their own policy in the Bill, but I hear that they will make plans to take that into account, and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Dr Whitehead]

I beg to move amendment 90, in clause 104, page 98, line 35, at end insert—

“(1A) In making provision for the establishment of one or more schemes under subsection (1), the Secretary of State must produce a plan for low carbon heating in homes in which it is uneconomic or impractical to install heat pumps.”

This amendment ensures that, when the Secretary of State is making a low carbon heat scheme, they have to provide a plan for low carbon heating in homes in which it is uneconomic/unfeasible to have a heat pump (large, rural, off-grid homes etc).

[The Chair]

With this it will be convenient to discuss the following:

Clause stand part.

Clause 105 stand part.

[Dr Whitehead]

The amendment concerns a different aspect of clause 104. When the Secretary of State establishes one or more low-carbon heat schemes under subsection (1), they must produce a plan for low-carbon heating in homes in which it is uneconomic or impractical to install heat pumps.

There is considerable debate about exactly how efficacious heat pumps are. Some people consider that about 40% of heat pumps will not work very well or at all in certain kinds of housing, particularly poorly insulated homes, rural off-grid homes and some very large homes where quite a lot of additional work has to be done to facilitate the flow of central heating around the home. The heat pump itself may simply be unable to keep up with the inefficiency of the home in question, particularly in very large homes. Therefore, the heat pump is slaving away all hours of the day and night but never quite gets to the required room temperature.

One solution would be to retrofit all UK properties in such a way as to make them all very energy efficient. Therefore, heat pumps would pretty much work anywhere, but that is not the case at the moment. Other people say that there is a very small area within which heat pumps do not work, and there is also a debate about the size of heat pumps put in. Under certain circumstances, hybrid heat pumps can be installed where a boiler is working in conjunction with the heat pump so that the run-up is relative to the use of the two devices, rather than the heat pump trying to slave away all by itself.

There are all sorts of issues in the current debate about the extent to which heat pumps can or cannot do the entire job. Within that debate, whatever the final assessment of the points at which heat pumps really do not work, we know that, under some circumstances, some heat pumps do not, and pretty likely never will, work. For those properties, it is therefore important that, rather than leaving them as they are, they have other low-carbon plans available so that we do not decarbonise most heat in properties throughout the country but leave behind a residual that does its own thing with its current heating arrangements and the carbon implications.

15:00

We must have low-carbon solutions across the board for heating in the UK, with much of that covered by heat pumps, some of that perhaps covered by district heating schemes and some of that perhaps covered by tank-based biogas feeding into an off-grid system. All those—not just heat pumps—are low carbon, but in different ways. The amendment suggests that the Secretary of State should produce a plan for that purpose so that when we address the decarbonisation of heating, which really is the continuing elephant in the room as far as decarbonisation is concerned, we have a comprehensive plan rather than one that may not apply to some people and we are not quite sure when things apply.

I emphasise that the amendment is not anti-heat pump or suggesting that we go down a path that does not entail the installation of very large numbers of heat pumps. It is about recognising the reality of certain circumstances in which heat pumps do not work well and having a plan for them so that we have a comprehensive arrangement for the future.

[Andrew Bowie]

I thank the hon. Gentleman for his comments on his amendment. The Government have been clear that a range of low-carbon technologies will be needed to play a role in decarbonising heating and reducing the nearly 50% of UK fossil fuel gas demand that heating represents. District and communal heat networks with low-carbon heat sources have an important role to play in all future heating scenarios, as do heat pumps. Work is ongoing with industry, regulators and others to assess the feasibility, costs and benefits of converting parts of gas networks to supply 100% hydrogen, for example, for heating. Other technologies such as solid biomass and liquid biofuels, as well as direct electric heating where appropriate, may also play a supporting role.

Although the proportion of UK buildings technically suitable for heating with a heat pump is very high—indeed, an estimated 90% of UK homes are technically capable of being heated by heat pumps—there is a small proportion of buildings for which a heat pump would not be an appropriate solution. The Government are working to develop strategic and policy options for all these technologies and for different building types. That work includes: trials and research and development to build towards strategic decisions on the role of hydrogen for heat in 2026; work on heat network zoning; and the forthcoming biomass strategy, which will assess the amount of sustainable biomass feedstocks available in the UK, including for biofuels, and the most strategic uses of those across the economy. It also includes action such as the green heat networks fund to scale up key markets where that is of strategic importance in all scenarios.

The clean heat market mechanism provided for by this measure is another key part of our policy action. Ultimately, it will be for the market—and consumers and building owners—to determine the best solutions and combinations of technologies within the performance standards and market signals that it is the role of His Majesty’s Government to provide. Through establishing a strategic approach to developing that policy framework while building up key supply chains, the Government’s “Powering Up Britain” plans have set us on track for net zero. Another plan seeking somehow to prescribe the right solution for every property is not what is needed right now. I therefore respectfully urge the hon. Member for Southampton, Test to withdraw the amendment.

Together with clauses 105 to 113 in this chapter, clause 104 provides for the establishment of a low-carbon heat scheme to encourage the installation of low-carbon heating appliances, such as electric heat pumps. As nearly half the UK’s fossil fuel gas consumption each year is used to heat buildings, it is important that we accelerate the transition to clean, efficient alternatives, thereby bolstering our energy security.

The Government back the dynamism of industry to meet the needs of British consumers, which is why we are taking a market-based approach that puts industry at the heart of leading a transformation of the UK heating market, while keeping consumers in the driving seat with choice. Through the planned low-carbon heat scheme—the clean heat market mechanism—we will provide the UK’s world-leading heating appliance industry with a policy framework that provides the confidence and incentive to invest in low-carbon appliances. That will make heat pumps a more attractive and simpler choice for growing numbers of British households.

Similar to other such market-based mechanisms, such as the UK emissions trading scheme, this provision enables targets to be set so that companies can act to develop the market. That will allow them to build up key supply chains with the confidence that all actors in the market are facing the same incentives and policy conditions. Together with wider policy action, the clean heat market mechanism will help to create the conditions for rapid innovation and investment in the sector. That will support the creation of new products and services that work for British consumers and building owners, and help to encourage companies to find efficiencies in time and cost as this and other markets grow.

In addition to providing the overarching regulation-making power, the clause also establishes a set of relevant low-carbon heating appliances to which such a scheme could apply. The subsequent enacting regulations for a scheme will then determine whether that scheme will apply to all the appliances in the clause or just a subset of them. As has been recognised by respondents to the first policy consultation on the proposals, a low-carbon heat scheme as provided for in this measure has the potential to kick-start a transformation of the heating market in the United Kingdom. That will mean that by the end of this decade, it is easier for millions of households to slash their energy consumption by making their next heating appliance an ultra-efficient electric heat pump.

The purpose of clause 105 is to require regulations that establish a low-carbon heat scheme to make certain provisions as to the scope of the new scheme. It also allows regulations to make further provisions in relation to how a scheme will apply to parties that are in scope. In particular, it requires the regulations to set out the scheme participants to whom targets will apply, the types of low-carbon heating appliance that will qualify towards meeting those targets, and the period or periods of time for which targets will be set.

Relatedly, clause 105 also enables the scheme regulations to specify circumstances in which credit for activities carried out outside a given period may be allowed to qualify in that period. That would, for instance, allow for an approach taken in several comparable trading schemes, where a degree of credit carry-over and target carry-over from one period to another is sometimes allowed, which is sometimes referred to respectively as “banking and borrowing”. This and similar scheme design features could help to maximise the opportunity for scheme participants to successfully meet the scheme standards and build the heat pump market. That, of course, is a core aim of His Majesty’s Government.

[Dr Whitehead]

I do not think I have anything further to say. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clauses 104 and 105 ordered to stand part of the Bill.

[The Chair]

Does the Whip wish to move the dilatory motion?

[Dr Whitehead]

We do not particularly want to adjourn.

Motion made, and Question put, That further consideration be now adjourned.—(Joy Morrissey)

Division 2

Ayes: 7

---

Conservative: 7

Noes: 5

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Labour: 5

15:09

Adjourned till Thursday 8 June at half-past Eleven o’clock.

Written evidence reported to the House

EB13 Northern Gas Networks

EB14 Hydrogen UK

EB15 MCS Charitable foundation

EB16 Against Whitby Hydrogen Village group

EB17 The Wildlife Trusts

EB18 City of London Corporation

EB19 Dr Muir Freer, researcher, The University of Manchester

Westminster Hall

Tuesday 6th June 2023 Westminster Hall

Tuesday 6 June 2023

[Mrs Pauline Latham in the Chair]

Afghan Women and Girls

Tuesday 6th June 2023 Westminster Hall

[Relevant documents: Oral evidence taken before the International Development Committee on 31 January and 21 February 2023, on Situation for women and girls in Afghanistan, HC 1087, and written evidence to the International Development Committee, on Situation for women and girls in Afghanistan, reported to the House on 21 March 2023, HC 1087.]

16:30

[Wendy Chamberlain (North East Fife) (LD)]

I beg to move,

That this House has considered support for Afghan women and girls.

It is a pleasure to serve under your chairmanship this morning, Mrs Latham.

“We are deeply concerned about the apparent perpetration in Afghanistan of gender persecution—a systematic and grave human rights violation and a crime against humanity.”

Those are the words of the UN special rapporteur on the situation of human rights in Afghanistan, Richard Bennett, and the chair of the UN working group on discrimination against women and girls at the end of a visit to Afghanistan last month. Because of the gravity and extent of the issues that we are debating today, I hope Members will allow me to spend a short time outlining the events of the last 22 months in Afghanistan.

In August 2021, Kabul fell to the Taliban; within two weeks the UK had withdrawn from the country, ending a 20-year presence. There was a promise that women would not suffer under the Taliban’s regime. That was viewed with suspicion, which has proven to be correct. In March 2022, girls in Afghanistan were barred from attending secondary school—they have not returned. Shortly thereafter women were barred from travelling more than 48 miles without a male guardian, and that requirement in May 2022 was extended to any time a woman leaves her home. Despite that rule, men and women could not mix and were banned from dining out together or attending public spaces such as parks at the same time. That de facto ban is now formalised in all public recreation spaces.

In December last year there were a series of assaults on the ability of Afghan women to work. They may not attend university, teach or work with non-governmental organisations. They may not undertake any public office. The Ministry of Women’s Affairs has been disbanded and replaced by the Ministry for the Propagation of Virtue and the Prevention of Vice. Women are required to wear a full body veil. Women and the men who are suspected of opposing the Taliban are harassed, kept in arbitrary detention, tortured and killed. I am sure that we have all received correspondence in our role as MPs that confirms those facts. Such a crime against humanity is so big and so appalling that it is tempting to look away. Those of us here today know that we cannot and that the Government must not.

On a basic level, millions of people are in dire need in Afghanistan. According to the World Food Programme, nearly 25 million Afghans are living in poverty, and the UN estimates that two thirds of the Afghan population will need humanitarian assistance this year. To put it another way, in evidence to the all-party parliamentary group on Afghan women and girls, which I co-chair, a representative from Save the Children told us that only 3% of families can currently meet all their basic needs, including food and shelter.

It is true that Afghanistan was facing difficulties prior to the fall of Kabul and the return of the Taliban. Economic conditions were deteriorating and droughts were increasing poverty and food insecurity. There are serious questions over the approach taken in relation to UK aid, but I know that the International Development Committee is doing excellent work examining that, so I will not consider it in detail today. What is irrefutable is that the economy and the provision of the most basic services have declined significantly in the past two years.

Expelling half of working-age adults from the workplace inevitably damages an economy, with businesses closed because of lack of staff, lack of customers, or both. It becomes a self-perpetuating cycle, and an expensive one. The World Economic Forum has found that the bans on women working will cause a loss of $600 million to GDP in the short term, while restrictions could lead to a further $1.5 billion loss of output by the end of next year. Meanwhile, a lack of aid, limited by many countries in the wake of the Taliban’s violent seizure of power and the exclusion of women from public life restricts access to public services, including, critically, healthcare. That is simply a perfect storm for many women. Following decades of fighting, many households are headed by women, who make up the majority of NGO workers. Those families are hit hardest by the Taliban’s edicts. The evidence from networks of Afghan women heard by the APPG is that women and children are commonly seen in groups begging. They face extreme poverty. Children are being sold, and child marriage is rising. This is in no way abstract.

When the APPG has heard from organisations that have been able to resume some kind of service, usually in nutrition or health, that resumption has taken place only region by region when exemptions from the edict banning women from working with NGOs have been agreed. The exemptions are obviously not secure, and are at constant risk of being revoked by the Taliban.

I accept that none of that is straightforward, particularly when the outcome is a decision not to provide fundamental assistance, but evidence from NGOs on the ground is clear: the women who need the most assistance are less likely to be reached by all-male teams. In any case, accepting the restriction would set a precedent and suggest that the Taliban’s rules were being accepted.

I am sure the Minister is concerned about the operation of NGOs on the ground in Afghanistan and about the need to try to prevent the humanitarian disaster we see unfolding. I hope he will use his time in the Chamber today to update Members on conversations the Government are having with NGOs and the approach the Government will take to the provision of aid to regional actors.

Will the Minister update Members on the breadth of NGOs with which the Government are engaging? This is a constant theme for the APPG and one to which I shall return, but it appears that only limited interests are being listened to by the Government. We need to ensure that we hear a wider range of voices, and that those voices are amplified and listened to. For example, a lesser-known organisation that has given evidence to the APPG is the Aseel phone app, which provides a digital platform that gives humanitarian aid directly through connected citizens, rather than incurring the bureaucracy and overheads of larger organisations. How can we here support such innovation by those who are in the country?

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

The point the hon. Lady has made about the potential of technologies as ways to send money directly to citizens who are suffering under the tyranny of organisations such as the Taliban is significant for the UK Government. Obviously, we need to ensure that the security is tight, but technology offers a non-traditional way to get support directly to people who would otherwise suffer.

[Wendy Chamberlain]

I thank the right hon. Member, who is my APPG co-chair, for that intervention, and yes, I agree entirely. The Aseel app is innovative in that it allows people out of or within the country to send money to buy food and other essential goods and services that are provided by people in-country. That money is not just aid or a handout; it is providing work in the Afghan economy.

On the subject of NGOs and aid spending, I urge the Minister to use this opportunity to pledge a reversal of the spending cuts in Afghanistan. This is simply the worst time to withdraw funds. Not only is every pound desperately needed, but for each pound spent two more are now required to achieve the same impact, owing to the expense involved in operating safely in Afghanistan.

If the Minister is unable to make such a pledge today, I hope that he will return to his colleagues with the message not only that more funding, not less, is needed, but that spending must at least return to three-year cycles to allow for forward planning. Reducing funding allocations to a limited annual basis might have been understandable as a temporary measure at the height of the pandemic, but those days have passed. Meanwhile, the Independent Commission for Aid Impact is clear that there will be both operational and reputational impacts for the UK aid programme if the one-year cycle is maintained.

A specific way in which Afghan women and girls need support is through education. Secondary school girls have been kept at home and away from learning for more than a year, with no hope of a return in sight. Those girls might have reached their adolescence, but they are children, and their future is being stolen from them. Research by Save the Children has found that 25% of care givers believe that the teenage girls in their care are chronically depressed. No matter what political situation unfolds in Afghanistan in five, 10 or 15 years, there are millions of girls who arguably will always struggle to support and advocate for themselves, and to know their worth, as a result of the trauma and the restrictions under which they currently exist.

[Munira Wilson (Twickenham) (LD)]

I thank my hon. Friend for securing this really important debate. On her point about depression and mental health, she might have seen a powerful report on the BBC last night from Yogita Limaye, who reported on the epidemic of mental health and suicide among women and girls. Indeed, the son of one woman stuck in Afghanistan—the son happens to be my constituent—said to me that his mother said to him, “Please pray for me to die in peace before the Taliban do anything to me.” That is amplified everywhere. Does my hon. Friend agree that one important step the UK Government could take, particularly for women and girls, is to provide some sort of bespoke, safe and legal route for them to come to this country?

[Wendy Chamberlain]

I thank my hon. Friend for highlighting the report last night. I recently attended Glasgow Afghan United in the constituency of the hon. Member for Glasgow North (Patrick Grady), and I spoke to a woman there who is currently pregnant, but her toddler is back in Afghanistan. I do not know how someone deals with that, to be honest, from a mental health perspective, so yes. I know that the Minister responding today is not from the Home Office, but given that the Government have made some commitments under their Illegal Migration Bill to look at safe and legal routes, I am certainly sure that all of us speaking here believe that safe and legal routes for Afghan women and girls are a priority, and certainly should be.

A return to formal education is the long-term goal. If the Government can provide any update on their strategy in that regard, it would be most welcome. In the meantime, as the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts)—hopefully that was okay—said, we know that the internet is a fantastic resource for education and technology, for reading, learning languages, maths and science.

[Vicky Ford (Chelmsford) (Con)]

I thank the hon. Member for raising this really important topic. I apologise, as I cannot stay long. On the subject of education, a point made to me by a number of Afghan women when I was at the UN Commission on the Status of Women conference is that it is utterly shocking that girls are banned from leaving their homes and going to school in Afghanistan, but, in the meantime, senior members of the Taliban take their own daughters and send them out of the country to schools in other countries. Does she agree that one of the things the international community could do is try to tighten up the sanctions against those family members to prevent that?

[Wendy Chamberlain]

I thank the right hon. Member for that powerful intervention. Yes—is it not always interesting how repressive regimes, particularly when they are repressive in relation to women and girls, take a different approach when it comes to their own children and families? We need to call out that hypocrisy, and I am grateful to her for doing so.

I will turn again to the technology aspect of education. The APPG learned in evidence from women in Afghanistan that electricity and internet blackouts are making access to education more and more difficult. The suggested solution is the distribution of wi-fi dongles that connect to third-country satellites but, as someone recently pointed out to me, the UK, USA and NATO cannot have spent the best part of two decades carrying out an operation in a country without putting infrastructure for communications in place. I am keen to explore how we can utilise what is already there. We need to find a way to spread that access to those who need it. An alternative is the design and funding of education spread through radio or offline applications. Again, I hope that the Government are engaging with all such initiatives. While women and girls are prevented from accessing education, we need to do everything we can to help them to do so in a safe way.

For older girls and, indeed, for women, access to international universities is vital to continue their education and ensure that they are best placed to help in the eventual rebuilding of their home country. There are Members—I see some here—who attended the recent showing of the Alex Crawford Sky News documentary, which highlighted the fact that Afghanistan is a society; women provide healthcare to women, and men to men. If women are prevented from attending university in order to train to become doctors, we can absolutely see what the outcomes will be for women from a healthcare perspective.

Some universities in the UK are already offering scholarships to Afghan women, and I would be grateful for an update from the Minister on any support that the Government might be able to provide to universities in that regard. I know that visas, even for education, have been incredibly problematic. Indeed, I wrote to the Home Office about that recently, asking for the ban on accompanying family members to be waived, given the status of many Afghan women as sole caregivers for their children and the restrictions I outlined earlier. I appreciate those problems are not technically part of the Minister’s portfolio, but we need to strive to make the current system workable. It clearly is not, with so few successful applicants. However, as my hon. Friend the Member for Twickenham (Munira Wilson) highlighted, we also need to expand visa routes for all vulnerable women who need to escape to safety.

[Munira Wilson]

My hon. Friend is being generous with her time. On visas and the criteria, given the challenges that women face in accessing education, patently the requirement to learn English needs to be waived, as does that of travelling to Pakistan to get biometrics. My hon. Friend is well aware of a case I have raised on the Floor of the House four times of five British children who are stuck in Kabul and whom I have been trying to get out for 18 months. They have British passports and four of them are girls, so they cannot go to school. The Minister for Immigration is willing to look at the case. Their Afghan mother cannot get a visa to come here and the latest is that she has been told she has to go to Pakistan to get biometric tests. She cannot travel to Pakistan without a chaperone, so I am being asked how she can get to the UK without a chaperone. That is the latest hurdle. I implore the Minister to take this message back to the Home Office: we need a sensible approach to visas for women and girls.

[Wendy Chamberlain]

I have heard my hon. Friend’s impassioned plea for that family. What does it say that we cannot support British children to leave Afghanistan and what does that mean for those in the country more widely? It is clear that we need to take a sensible approach. We cannot use the Taliban’s restrictions as an excuse for not doing what we should for our citizens and those who are vulnerable.

[Afzal Khan (Manchester, Gorton) (Lab)]

I thank the hon. Member for giving way and for securing this important debate. I have a similar issue. My constituent, who was a former office manager for the British Council in Afghanistan, is eligible for the resettlement scheme, alongside three other members of his family. However, his 22-year-old son and 19-year-old daughter are not because they are over 18. Considering the Taliban’s restrictions on women and the danger a young lone woman in Afghanistan would be in, does the hon. Member agree that the Foreign Office must ensure that young women are not abandoned to fend for themselves in a country where they have no rights or freedoms?

[Wendy Chamberlain]

I thank the hon. Member for bringing that case to light. There is no doubt: right from the outset of the fall of Kabul, our failure properly to support our British Council colleagues working in country was quite shameful. We need to do more. They are people who should come under existing routes. We talk about needing new routes, but the existing ones are woefully inadequate and are not doing what they were designed to do—indeed, what we were all assured they would do when we were told about them on the Floor of the House.

In relation to visas, I want to focus the Minister’s attention on one issue and I hope he can update us on this today: the ability of women, as referred to by my hon. Friend the Member for Twickenham, to reach third-party countries—I am concerned that could be used as an excuse not to do what we should be doing—and their support and safety in those countries before visas are approved. I had an email from a former female judge who is now stuck in Pakistan. Women have very specific limited mobility. They cannot just leave their homes and head to the border. Pakistan is not necessarily a safe country for vulnerable women to be spending time without family and resources. We have to acknowledge that. I am no expert on what the solution might be, but there are many at the Government’s disposal in the region and in security. The UK must be a safe haven for Afghan women and any visa route must be designed with those women and their specific needs in mind.

I have touched on the very real issues where the UK Government can and should provide support: aid, education, healthcare, infrastructure and safe passage. As I conclude, I want to turn to the Government’s strategic priorities in Afghanistan. This year has seen the publication of the UK women, peace and security national action plan and the international women and girls strategy. It is not clear how they apply to the Government’s actions in Afghanistan. The Minister will know that strategic objectives for his Department under the action plan are to increase women’s participation, leadership and representation in decision making; to prevent gender-based violence; to support the needs of women and girls in crises, and ensure that they can participate and lead in responses; to increase the accountability of security and justice actors to women and girls; and to ensure they respond to the need of women and girls as part of their approach to transnational threats.

[Liz Saville Roberts]

The hon. Lady is being generous with her time. One thing completely within the Government’s power is the steps they take with the integration of Afghan refugees to the United Kingdom. My office has been working with a young woman called Mah through Urdd Gobaith Cymru, which is much engaged with the integration of Afghan refugees at its centre in Cardiff, which has been recognised as an exemplar.

Surely we should look to prepare women and girls for the possibility of going back to Afghanistan, and ensure that they have every opportunity through education and skills gaining. We should also recognise the way that dynamics work in Afghan families in the UK. I hope to work with Mah to set up a toolkit to support women and girls as they arrive in the UK from Afghanistan, but I sincerely believe that this is something the Government should be leading on, showing what they can do within their powers in the United Kingdom.

[Wendy Chamberlain]

We have to remember these people come to the UK fleeing conflict in Afghanistan. Many of them, if the situation changes in Afghanistan, want to go back to help and support. I think about the judges that the hon. and learned Member for Edinburgh South West (Joanna Cherry) works to support, and about those who are former MPs or have worked for NGOs. These are women who care passionately about their country and want to return to make it better, when and if they can, and we should look to do anything we can do to help them maintain that while they are here in the UK.

The women and girls strategy sets out the principles by which the Minister’s Department will be governed: standing up and speaking out for women’s and girls’ rights and freedoms; emboldening and amplifying the work of diverse grassroots women’s organisations and movements; targeting investment towards the key life stages for women and girls; acting for and with women and girls impacted by crises and shocks; and strengthening the political, economic and social systems that protect and empower women.

Those are all excellent ideals and I am sure that everyone here, regardless of party, can get behind them, but I want to ask the Minister what they actually mean for women and girls in Afghanistan. What can I tell the networks of Afghan women who give evidence to our APPG about what the Government’s concrete plans are? I will be quite honest, Minister: they are not feeling very positive about the UK and its role in relation to Afghanistan. How are the Government standing up and speaking for their rights and freedoms? How are the Government working with the whole spectrum of women’s organisations? How are the Government supporting Afghan women’s leadership? How are the Government investing in women and girls? How are the Government preventing gender-based violence, which is institutionalised across Afghanistan?

I will give the Minister a simple starting point, as I conclude. Will he today join the UN in naming the atrocities in Afghanistan for what they are—a gender apartheid? Every point here is vital; everything needs addressing by the Government. Frankly, it should not need me and this debate for the Government to hear the voices of Afghan women. The APPG has heard from women with a wide variety of perspectives and experience, yet the Government have so far declined actively to engage. Let me state that more clearly. These women are here—the secretariat of the APPG is here today—and they are experts who want to share their expertise, but the Government seem to block them from the rooms where the decisions about them are being made. Engaging with a small number of stakeholders is not good enough, and it is not representative.

It is not often that politicians want to make themselves obsolete, but in this case I really do. I urge the Government to make my role as an intermediary obsolete, and to engage directly with all the Afghan women and regional experts who are at their disposal. They may be silenced in their home country; that cannot persist here.

[Several hon. Members rose—]

[Mrs Pauline Latham (in the Chair)]

Order. I remind Members that they should bob if they wish to be called. We have limited time; I intend to begin calling the Front-Bench spokesmen at approximately 10.28 am, so we have just over half an hour. When Members are called, would they temper their speeches to a short time?

09:54

[Alison Thewliss (Glasgow Central) (SNP)]

I thank the hon. Member for North East Fife (Wendy Chamberlain) and the Backbench Business Committee for granting this important debate.

Women and girls in Afghanistan are being forcibly disappeared from public life by the Taliban. That much is absolutely clear. It is deliberate and it is tragic. I want to reflect briefly on the commitments that the UK Government made to women and girls in Afghanistan. They built women and girls up, they gave them access to education, and then they brutally took that away when Afghanistan fell and have left them in that situation.

I remember very clearly the phone calls that I got from many constituents who had family in Afghanistan in August 2021. My office was inundated by calls from desperate families who were terrified for their relatives. I am fairly sure that most of them are still stuck in Afghanistan, or perhaps in Pakistan or somewhere else; they have not got to the UK. There were, I believe, over 80 cases, but I am aware of only a couple who managed to get family to safety in the UK.

A lot of that has to do with the petty and small bureaucracy of the Home Office, because disproportionately it was husbands who were here and had wives or families in Afghanistan that they could not get over because of earnings thresholds. They had made applications or they were waiting to earn enough to bring their family over, but they could not bring them over, because that paperwork was not in place.

The very nature of the immigration system makes people unsafe. Many of my constituents who were in touch had applications that were in process but could not be completed after the UK pulled out, because the families could not get to Islamabad to complete the paperwork. I had a constituent who waited a further six months, with the Taliban knocking on his wife’s door, for UK Visas and Immigration to get round to processing her appeal and issuing documents, despite chasing by my office. I had a constituent whose elderly mother was on her own in Kabul and being asked to complete a tuberculosis test to come over.

Others had English language tests as a barrier. I had a case of a husband and father whose children and wife in Afghanistan were refused access to the Baron hotel because he could not be there to vouch for them. As far as I know, they are there. There are now many families stuck in Pakistan. The Independent reported in April that about 1,000 families, including 500 children, are stuck in limbo in Pakistan. They could be here with their families, but because of that petty bureaucracy, they are not.

I ask the Minister for further clarification on what has happened to expressions of interest in the Afghan citizens resettlement scheme, because I know of one made back in August 2022. In the letter that I got from Lord Murray in April, the Home Office said that it was unable to provide a timescale but would notify the constituent of the outcome as soon as possible. I am not aware of any progress on that. How many people’s cases are still pending in that scheme, and when will they be able to get to safety in the UK and come to their family? Ideally, we would want the Taliban gone. Ideally, we would want women to have a safe and prosperous life with their children in Afghanistan, and a future. That future has been stolen from them. In the meantime, we need safe and legal routes so that they can come to safety here.

[Several hon. Members rose—]

[Mrs Pauline Latham (in the Chair)]

Order. I wish to apologise. I seem to have caused consternation. We were told that Patrick Grady was the SNP spokesman—it was checked by the Clerks, and that is what they were told—so we will swap round and Patrick Grady will wind up for the SNP.

09:58

[Sarah Green (Chesham and Amersham) (LD)]

It is a pleasure to serve under your chairmanship, Mrs Latham. May I begin by thanking my hon. Friend the Member for North East Fife (Wendy Chamberlain) not just for securing today’s debate, but for her excellent speech? Few of us could forget the heart-wrenching scenes almost two years ago. I was a newly elected MP at the time, and my office, like most others, was inundated with pleas from desperate constituents seeking to get loved ones and former colleagues out. What was particularly striking was how many made specific mention of their fears for female relatives. They were terrified of what the return of the Taliban would mean for women and girls.

History, as we know, does not move in a straight line. Over the past two years, women and girls in Afghanistan have seen their rights rolled back and hard-won freedoms lost. We also know that women and girls in Afghanistan are fighting back. With acts ranging from peaceful protest to posting on social media, Afghan women have resisted. It is important that we take this opportunity to acknowledge their extraordinary courage and bravery in risking not only their physical safety but, in many cases, their lives. It is also important to show that we have not forgotten their plight and to shine a spotlight on their current circumstances.

Shortly after the last British soldiers departed Afghanistan, the Prime Minister at the time pledged to set up a bespoke resettlement scheme focused on the most vulnerable, particularly women and children. Despite the Afghan citizens resettlement scheme having three referral pathways, there is no specific route to apply to, making it virtually impossible for most Afghan women and children to get on to the scheme. I hope the Minister will address that today. How do women and girls access the referral pathways? Surely, establishing safe and legal routes is the answer.

10:00

[Jim Shannon (Strangford) (DUP)]

First of all, I welcome you to your new position, Mrs Latham. Usually you are contributing to Westminster Hall debates, but today you are making sure that we are contributing in the right way. I wish you well in your new role.

I thank the hon. Member for North East Fife (Wendy Chamberlain) for securing the debate. I am happy to add my comments in support of what she said. She does much in this Parliament to protect and promote the needs of Afghan women and girls. I declare an interest as chair of the APPG for international freedom of religion or belief.

I am sure that every Member shares the horror we have all felt since the fall of Kabul nearly two years ago. In that time, the rights of women in Afghanistan have been drastically reduced. As hon. Members have mentioned, women have been barred from governmental jobs, there have been travel restrictions and bans on education, a strict dress code has been introduced, and women have been prevented from working for NGOs. How discriminatory that is! It means that women cannot even earn money or use their skills to contribute to society. It is really quite annoying.

The repressive and barbaric policies have resulted in 80% of schoolgirls being out of education, a 25% reduction in the number of women working and a loss of $1 billion to Afghanistan’s GDP. However, I will focus on the double vulnerability of women and girls from religious minority groups in Afghanistan, and address some of the UK policies that—I say this with great respect—are failing to protect women from such communities.

The last two years have seen many of Afghanistan’s religious minorities decimated, with large exoduses from Christian, Hindu and Sikh communities. The remnants of those communities have been forced to live in hiding across Afghanistan, either remaining completely hidden or hiding any religious practices or symbols that are core to their faith. The introduction of an extreme interpretation of sharia law has had a significant effect on women from many religious minorities. The compulsory use of the burqa robs those women of their identity, leaving many of them choosing to remain indoors rather than adopt the new dress code. A change in law has also nullified Christian marriages, opening up women to allegations of adultery, which now carries a punishment of death by stoning. Their marriages are not recognised, so they have a double vulnerability.

Out of all Afghanistan’s religious minorities, the Hazara community has been at the forefront of attacks and restrictions on women and girls. Not only has the group been affected by Taliban oppression, but it has been targeted by Islamic State’s Khorasan province, with no protection whatsoever from the security forces. Many of us will be aware of the suicide bombing of the Kaaj educational centre in Kabul on 30 September, which killed 54 girls as they sat exams. That is only one of nearly a dozen attacks on Hazara schools in the last two years. Since the Taliban gained control, there has been an increase in sexual violence targeted at women across Afghanistan. For those from a Hazara background, that has been particularly acute.

[Mr Gregory Campbell (East Londonderry) (DUP)]

My hon. Friend raises an important point about freedom of expression in Afghanistan. Does he agree that when politicians in western countries express empathy or demand support for communities that suffer under oppressive regimes, they are often accused of wanting to westernise nations? It is important to say that we are expressing support for the Afghan people to decide their future, and for women and girls within their community to decide the best way forward for them.

[Jim Shannon]

My hon. Friend always makes wise interventions. He is right: we are not trying to westernise Afghanistan. It is about people being able to choose their religious belief. I would protect anyone in this world who has a different religious belief.

The Hazara inquiry found evidence that sexual violence and forced marriage had been used as a tool to deny those communities a future by targeting women. The honour system is prevalent and victims’ lives are at risk. Ninety-seven per cent of Afghans live in poverty, two thirds of the population need humanitarian assistance, and 20 million people face acute hunger. At a meeting of the UN Security Council in December, concerns were expressed that groups were being excluded from humanitarian aid because they were Christians, Sikhs or different religions. Aid must reach all Afghans, including women, minorities and other vulnerable groups. Against that backdrop, the UN reported in March that it was forced to cut food rations in Afghanistan due to a shortage of funding from the international community.

I conclude with three questions for the Minister. First, the Foreign, Commonwealth and Development Office budget for Afghanistan is due to be cut by 53%. What assessment has the FCDO made of the impact of those cuts, specifically on women and religious minorities receiving aid on the ground? In particular, I would like to hear about the impact on Christians, Hindus, Sikhs and other small groups.

My second question concerns the Afghan citizens resettlement scheme. Other hon. Members have referred to the scheme, and I have a case that I wish to take up with the Minister, if he has time. They ACRS has three pathways. The third is for those who have been identified as belonging to a particularly vulnerable group, including women and members of religious minority groups. The scheme launched with the aim of resettling 20,000 people in five years. An expression of interest could only be made seven months after the scheme formally opened. In the short time that the scheme was open, some 11,400 expressions of interest were submitted under pathway 3. The vast majority of those who expressed an interest are still awaiting news or updates, even as their lives are in danger.

Up to now, the pathway has been open only to British Council and GardaWorld contractors, and Chevening alumni. I have the utmost respect for the Minister and he knows that, but I and many other Members are frustrated by the lack of clarity and urgency on this scheme. I say that with great respect and honesty. There is not one of us here who does not have a case that we need sorting out, not because we think we are better than anyone else but because those people are on the frontline.

When I was in Pakistan in February-time, I met a man with a wife and four children who had fled Afghanistan and was living in Islamabad. He is in the scheme. I gave the documents to the Immigration Minister. He worked for the British Army—if ever there was a case!—but we cannot get him out. Why is that happening? Will the Minister tell me how many have been resettled under pathway 3, and let us know when the scheme will start providing protection for the women and religious minorities it was created for? That is our purpose for being here. Let us get answers.

10:07

[Joanna Cherry (Edinburgh South West) (SNP)]

I welcome you to your place, Mrs Latham, and congratulate the hon. Member for North East Fife (Wendy Chamberlain) on securing this important debate.

Women are particularly at risk in Afghanistan, as a consequence of their sex and the overwhelmingly misogynistic and brutal society that the Taliban are imposing on the people of Afghanistan. Hon. Members may be aware that I have been working with the former judge Marzia Babakarkhail, who came to the United Kingdom in 2008 after two attempts on her life by the Taliban. Marzia has organised the campaign for the United Kingdom to assist female judges and prosecutors in danger from the Taliban. She has daily contact with these women and has the weight of the world on her shoulders. Day in, day out, she gets messages and calls from women who fear that they will be murdered by the Taliban. At least one already has been. Marzia has taken on a huge burden and the emotion laid on to her daily would be too much to bear for most of us. She has been a tower of strength, but she, too, is deeply affected. I take this opportunity to pay tribute to her.

The United Kingdom encouraged women in Afghanistan to take up the roles of judges and prosecutors as part of our project to support the creation of a democracy governed by the rule of law. We encouraged these women to be part of a nation-building project that has now put them in the most severe danger. I am ashamed that the United Kingdom has abandoned them.

Early on, with the assistance of philanthropists, including JK Rowling, Baroness Helena Kennedy managed to get some of those women out. They are starting new lives in the west, but dozens have been left behind. Reuters journalists Emma Batha and Orooj Hakimi recently chronicled their plight in detail in an article published on 3 May. If the United Kingdom were prepared to offer more humanitarian visas, we could offer hope to those women. I have been campaigning for that for a long time, and have raised the issue repeatedly in Parliament. Last summer, I met Foreign Office officials, who felt that a case could be made for those women, but I fear that the Home Office is standing in the way of progress.

Last month, I presented a petition requesting that the House of Commons urge the Government to immediately help evacuate and settle female judges, prosecutors and their families from Afghanistan by providing emergency visas. It mirrored an online petition signed by more than 56,000 people. It was signed by the dean of the Faculty of Advocates—effectively the chair of the Scottish Bar—my friend Roddy Dunlop KC, reflecting the solidarity of people in the legal profession across the United Kingdom in respect of the plight of our colleagues in Afghanistan. The petition asked for urgent action, and the following day I met the Prime Minister to urge him to take action to save those women. He seemed favourably disposed to my arguments for a special humanitarian visa, and so did the Minister for Immigration when I raised the matter in the Chamber two weeks ago, but we now need a sense of urgency.

At least one of those women has already been murdered. Although some have managed to escape and slowly rebuild their lives abroad, many are still trapped in Afghanistan, and the criminals and terrorists they prosecuted and sentenced have been freed from prison and are actively hunting them down. Taliban fighters have raided their former homes looking for them, and many are in hiding, living in constant fear. Those women, whom the west encouraged to enter professions such as the law and lead a new civic Afghanistan, are at risk due to their former position in civic life and doubly so because of their sex. As the hon. Member for North East Fife (Wendy Chamberlain) said, they cannot travel unaccompanied, which makes it more difficult for them to hide and flee.

The UK should have acted long ago to help those women, and it is a disgrace that we have not. What we have done so far is not nearly enough; urgent action is needed. I realise that the Minister is not a Home Office Minister, but nevertheless my question for him is this: when will the United Kingdom Government introduce a humanitarian visa scheme for the women of whom I speak? Please will he ask his Home Office colleagues to put a timescale on it? I understand that there are logistical difficulties in getting those women out of the country, but Germany has a scheme that I urge the British Government to look at. Something must be done without further delay; otherwise, the blood of those women and their children will be on our hands.

[Several hon. Members rose—]

[Mrs Pauline Latham (in the Chair)]

Order. Although some of the Members not on the list who wish to speak were late, I will call them if they are very brief.

10:13

[Sir Julian Lewis (New Forest East) (Con)]

That is extremely kind of you, Mrs Latham.

I wish to make a single point, which I urge the Minister to take away. After the invasion of Ukraine, the Home Office set up a special unit on the parliamentary estate in Portcullis House staffed by knowledgeable and sympathetic Home Office civil servants, and it was possible for MPs to engage directly with them in support of particular cases of outstanding humanitarian worth. Why should we not reinstate that hub, which would make it easy for those of us who know of cases exactly like those just described by the hon. and learned Member for Edinburgh South West (Joanna Cherry) to feed them into the system, and would mean that there is no chance of them being delayed or ignored, and that there could be no prevarication? When we engage with the relevant officials directly, as we did over Ukraine, we get results. Why should we not help those people in Afghanistan, to whom we have a particular obligation, given that we were prepared to do that for those from Ukraine, towards whom we had fewer obligations but understandable sympathy?

10:14

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I congratulate you on your new position, Mrs Latham, and it is a pleasure to serve under your chairmanship. I apologise for being late; I had not intended to speak, but I think my intervention would have tried your patience by being a little lengthy. I will also be very brief.

I congratulate the hon. Member for North East Fife (Wendy Chamberlain), who does a fantastic job as chair of the APPG for Afghan women and girls. It is a pleasure to be a member of that group. To follow on from the contribution of the hon. and learned Member for Edinburgh South West (Joanna Cherry), Marzia Babakarkhail is one of my caseworkers. As was explained, she fled Afghanistan as a former judge after the Taliban tried to assassinate her twice. She knows and has experience of what the Taliban are capable of, and how they do target women and girls, particularly in positions of authority. She knows the consequences of that.

As the hon. and learned Member explained, Marzia Babakarkhail is in daily contact with people who fear for her lives. The seriousness of the situation cannot be underestimated. It is not some dystopian novel, like Margaret Atwood’s “The Handmaid’s Tale”; it is real life for women and girls in Afghanistan now. As we sit here, this is what they are going through day in, day out.

The hon. Member for Strangford (Jim Shannon) secured an excellent debate in January, where we looked at the different Afghan resettlement schemes that are available. As he eloquently described, just a handful of Afghan refugees have been admitted into this country under pathway 3. After all the promises that were made back in August 2021, the Government’s response is absolutely shameful. I have a letter from the Minister who responded on that day, which basically dismisses the Afghan women judges. It says:

“The Government cannot...offer a home to all Afghan judges, all female Afghan judges or all Afghan judges.”

The tone of that letter was absolutely incredible. The lives of 66 Afghan female judges are under threat as we speak. The Government are not prepared to do anything about it. I am afraid that it is up to us to come to our own conclusion as to why that is.

[Mrs Pauline Latham (in the Chair)]

I call Patrick Grady—the upgraded spokesman.

10:17

[Patrick Grady (Glasgow North) (SNP)]

I must apologise to the Chamber; the confusion is entirely mine. You had the correct information, Mrs Latham, as did my hon. Friend the Member for Glasgow Central (Alison Thewliss). I had not correctly read our Whips bulletin, which is something I am not proud of given some of the roles I have had in this House in the past. It is a pleasure to serve under your chairmanship, Mrs Latham. As the hon. Member for Strangford (Jim Shannon) said, we might have expected to see you contributing to this debate, so it is great that you are able to chair it.

I warmly congratulate the hon. Member for North East Fife (Wendy Chamberlain) on securing the debate, and on her very collegiate approach to the issue. It was a huge privilege to attend the screening that she and the all-party parliamentary group organised of “Women at War: Afghanistan”, where we heard directly from women who have come here seeking refuge and safety. In the documentary we witnessed the testimony of those who remain in Afghanistan.

I join in the tributes to Alex Crawford for her commitment and dedication to bringing those women’s stories to a global audience. The stories were powerful and moving, and they demand a response. The speed and the scale of the regression and oppression of women’s rights in Afghanistan since the Taliban seized power almost beggars belief. Almost overnight women were excluded from the public sphere, and as months and now years have gone by, those exclusions have become harsher and even more restrictive. UNESCO estimates that around 80% of school-age Afghan girls—nearly 2.5 million—are now out of school. As we heard at the film screening, the true number may be even higher.

However, as we also heard at the film screening and as the right hon. Member for Chelmsford (Vicky Ford) mentioned in her intervention, it is not uncommon for daughters of Taliban figures, particularly those in senior and leadership positions, to be sent beyond Afghanistan’s borders so that they can be educated. What that demonstrates is not just astonishing hypocrisy but also just how thin the alleged ideology and religious conviction of the Taliban is, because the Taliban’s actions are not about enforcing particular religious convictions but about enforcing an ideology of power and subservience that has no real grounding in the teachings of Islam or any other major world religion.

[Joanna Cherry]

I am grateful to my hon. Friend for giving way; he is making a very powerful speech. Does he agree that the point he has just made shows that this issue is not about religion but about structural misogyny and discrimination against women on the grounds of their sex?

[Patrick Grady]

Yes. My hon. and learned Friend is absolutely right; indeed, I think that point has been made by all the speakers here in Westminster Hall this morning.

However, in the documentary and in the testimonies to the APPG, we also heard about the inspirational women, and men, who are risking everything to continue to provide education, skills and training to others, out of sight of the Taliban. It is often said that educating girls is one of the key interventions that can unlock sustainable and long-term routes out of poverty. But as we have already heard, the United Nations Development Programme estimates that nearly 85% of Afghans are living in poverty, and the Taliban’s actions to exclude women from many sectors of employment has caused, as Members said earlier, a significant reduction in Afghanistan’s gross domestic product.

If we want to see the value of education, we only need to look at Hillhead High School in Glasgow North. The school’s Feminism Club, facilitated by modern studies teacher Miss Thomson, wrote to me recently to express their solidarity with the women of Afghanistan and their outrage at the oppression that those women face and the denial of their basic human rights. In their letter to me, the club said:

“The Taliban’s regime is hurting everyone in the country, but disproportionately it is women who are suffering…to ban them from work is to force women to be at the mercy of men…to ban girls and women from education is to deny them their dreams of a life of their own…a lack of access to healthcare will see women suffer immensely.”

Of course those sentiments echo the conclusions that have been reached by many international bodies and observers, many of which have already been quoted in today’s debate. My constituents went on to say:

“The United Kingdom is an influential voice in the world forum. We would like to ask you what the UK Government are doing to advocate for the rights of Afghan women and ask you to raise this as an issue at Prime Minister’s questions.”

As Members know, the chance to raise issues at PMQs is never guaranteed, although both the hon. Member for Twickenham (Munira Wilson) and my hon. and learned Friend the Member for Edinburgh South West (Joanna Cherry) have been able to raise the cases that they spoke about today at Prime Minister’s questions. I pay particular tribute to my hon. and learned Friend for the work that she has done to highlight the situation of female judges and prosecutors in Afghanistan. I also pay tribute to the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) for her work on this issue. I also join both my hon. and learned Friend and my hon. Friend the Member for Glasgow Central in paying tribute to Marzia Babakarkhail for the incredible work that she has done, which involves placing herself at risk in order to support others.

However, what I can do and indeed will do in Westminster Hall today is ask the Minister present, who speaks for the whole of the UK Government, what his Government are doing to advocate for the rights of women and girls in Afghanistan. I hope that when he next meets the Prime Minister, he will let him know that the Feminism Club at Hillhead High School demands action.

Of course, it is difficult to act when the resources available to the Government have been depleted because of the decision to reduce the aid budget drastically, so the Minister urgently needs to clarify whether the Independent Commission for Aid Impact is correct in its understanding that UK humanitarian assistance to Afghanistan in 2023-24 will be £100 million, which is less than half of what was provided in the previous financial year. The hon. Member for North East Fife was quite right about the need for long-term budgeting and stability. Even if the aid budget is being reduced, which many of us oppose, there should at least be a planning horizon that people can work with. Of course there are very practical issues about disbursing funding. Nevertheless, the United Nations has appealed for $4.6 billion to meet humanitarian need in Afghanistan, but it has only received pledges of around 9% of that sum.

However, even where the UK could effectively channel resources, it seems incapable of doing so. Many women in Afghanistan are desperate to access safe and legal routes that would allow them to seek safety and refuge here in the UK, but the Afghan Citizens Resettlement Scheme, or ACRS, has been an abject failure, with pitifully low numbers of people coming through it. We only have to listen again to the speeches from my hon. Friend the Member for Glasgow Central, the hon. Members for Twickenham and for Strangford (Jim Shannon), and the right hon. Member for New Forest East (Sir Julian Lewis)—indeed, the speeches of practically everybody who has spoken today—to know that. As the hon. Member for Strangford said, almost all of us have probably had a constituency case or have a constituent who has a relative stuck in Afghanistan who wants to come here.

However, the UK Government’s position is that Afghans who arrive here through irregular routes should be criminalised and deported to Rwanda. That is the Government’s position: Afghan women and girls, no matter their background or struggles, if they arrive here in a small boat or on the back of a lorry, are not welcome and should be deported. I wonder whether the Minister has the guts to get up and say that out loud.

The Government’s position is to criminalise women and girls from Afghanistan who come here using irregular routes, and that they are not welcome. That is the language the Home Secretary uses, but whenever I hear UK Ministers denigrate and belittle refugees and asylum seekers, I think of my friends and constituents, Abdul and Khalida Bostani, and their seven children. Abdul arrived in the UK on the back of a lorry, fleeing the Taliban, 20 years ago. Today’s Tory Government would criminalise and deport him for that, denying his family the life they have made, his role as a councillor on Glasgow City Council, and the work of Glasgow Afghan United, which the hon. Member for North East Fife spoke about. That organisation works to build tolerance and understanding among different communities in the city, and runs the inspiring women’s empowerment programme, which the hon. Lady also spoke about and had the privilege of visiting. Glasgow is a city that welcomes refugees, and as the pupils of Hillhead High School have shown, it is a city that stands in solidarity with the women and girls of Afghanistan.

There is no quick and easy solution to the crisis in Afghanistan, but that does not mean that there is no possible solution or response. The UK Government should be using their influence at the United Nations and elsewhere to hold the Taliban regime to account and to call out their egregious breaches of human rights and women’s rights. The UK Government should contribute to multilateral funds that are providing humanitarian relief and assistance to where it is most needed, and they need properly to invest in safe and legal routes that would allow people fleeing Afghanistan to seek safety in the UK, particularly if they have family or community connections, or have previously served UK Government or business outposts in Afghanistan.

As today’s debate has shown, there is a cross-party consensus that action is needed, and that the Government can do better. We speak with the voices of our constituents and on behalf of those who have given testimony that we have heard directly from Afghanistan at events such as those organised by the APPG. We need more than words from the Minister. We need action.

10:27

[Preet Kaur Gill (Birmingham, Edgbaston) (Lab/Co-op)]

It is a pleasure to serve under your chairship, Mrs Latham, and I congratulate you on chairing your first debate in Westminster Hall. This is an important debate on UK support for Afghan women and girls, and I thank Members from across the House for their contributions. In particular, I thank the chair of the all-party parliamentary group on Afghan women and girls, the hon. Member for North East Fife (Wendy Chamberlain), for securing the debate.

It is almost a year to the day since I visited Afghanistan following the fall of Kabul to the Taliban the previous summer. At that time, Labour urged the Government to set out a comprehensive strategy for their engagement with Afghanistan to alleviate the assault on human rights and the humanitarian crisis that has left tens of millions of people relying on aid to survive. As we have heard from colleagues in all parts of the House, UK policy since 2021 has remained piecemeal, unco-ordinated and inadequate to lift the Afghan people out of protracted crisis, nor has it had influence with respect to the wilful destruction of the basic rights and freedoms of Afghan women, which we all hold dear.

When I visited Kabul, I was deeply privileged to witness the incredible aid work that Britain funds, and to meet a number of women who were at the sharp end of the crisis. I will never forget the time I spent on the wards of a hospital in Kabul. Every bed was occupied, with rows of children suffering from malnutrition. I watched health workers, funded by our country, helping safely to deliver babies into the arms of their mothers.

It was painfully clear how important women are to Afghans’ prospects of surviving the humanitarian crisis and to rebuilding a decent future—not just as future doctors and teachers educated in Afghanistan’s universities, but as aid workers who help others to access everything from food parcels to maternity care. However, since then, the Taliban’s edicts effectively to banish women from public life have risked killing that future—a future we have a common interest in realising because 20 years of progress for women and girls is being erased. There are severe restrictions on women’s freedom of movement, their right to education and the right to work. As well as the ban on female university students, which is being enforced by armed guards, secondary schools for girls remain closed in so many provinces.

Women have been prevented from entering parks and gyms, among other public places, and women hold no Cabinet posts in the de facto Administration. The Ministry of Women’s Affairs was quickly abolished. Decades of progress on gender equality and women’s rights have been wiped out in mere months. Women civil society activists, journalists and human rights defenders have faced harassment and detention. Non-governmental organisations and now even the United Nations have been subjected to the same draconian restrictions. A decent future is impossible for Afghanistan while half of its population remains locked up at home. It is little wonder that many aid agencies have been forced to halt humanitarian activities. Around 25 million Afghans are living in poverty, with households spending over 90% of their income on food. To restrict humanitarian aid and women’s right to work at this time is absolutely devastating.

A January 2023 poll found that women could no longer access services from one in five of the 87 Afghan NGOs surveyed. Nearly 60% of organisations reported that their operations had been partially suspended in February. The stark reality is that until those decisions are reversed, many thousands of lives will be lost as a direct result of the Taliban’s edicts. What recent conversations has the Minister had with international partners about engagement with Taliban officials to reverse those edicts? Can he update us on why countries such as Japan have been able to re-establish some operations in their embassies? Has the Minister advocated for the UN to use its negotiating position with the Taliban to stand up for organisations that employ Afghan women? Later this month the UN Security Council will debate concerns about women and girls. What representations will the Government make to that debate?

The women I met in Afghanistan last year had a very simple message for the United Kingdom: do not forget us. That plea has to ring louder today than it did then. Those women have been out on the streets courageously fighting for their basic rights. We have all seen the footage of women with placards fiercely staring down men armed with AK47s. Those women are formidable and Britain and its allies should stand with them, yet I echo concerns raised by Members today who fear that the Government are turning their back.

The announcement of a 53% reduction in aid for Afghanistan and Pakistan this financial year is of grave concern. We now have the figure for Afghanistan itself from the Independent Commission for Aid Impact and it looks to be a 65% cut—£186 million down this financial year. Will the Minister confirm whether that is correct? Meanwhile, this weekend we have seen reports that the Government’s plan for asylum could hit £6 billion over the next two years, with much of that funded out of the development budget. That is almost half of Afghanistan’s entire GDP. Let us allow that to sink in. The Government’s basic failure to process asylum claims, including those of thousands of Afghans, means that they are now cutting support from the single greatest humanitarian crisis, which people are fleeing.

The Prime Minister had the cheek to claim yesterday that his plan is working. The reality is that 20 months after Afghan families were airlifted to the United Kingdom, 8,000 are still in temporary hotels and the total backlog has risen to 137,000. The failure to process cases has meant that asylum accommodation costs have ballooned. Britain is spending four times per head what it did when Labour came to office, yet Ministers continue to write a blank cheque to the Home Secretary, who seems capable only of making things worse. As the Minister of State, Foreign, Commonwealth and Development Office, the right hon. Member for Sutton Coldfield (Mr Mitchell) put it in December, official development assistance spending has been “out of control”. He is right.

Last year our Government managed to spend twice as much on refugee hosting as Poland, where 8 million Ukrainians fled last year and where 1.5 million are still living. The Minister knows that in March, the World Food Programme in Afghanistan was forced to reduce the ration provided to malnourished households to 50% of people’s basic nutritional needs, down from the 75% ration that it was providing before that. Households are already spending 90% of their incomes on food. In the absence of a longer-term strategy and knowing how the humanitarian crisis is disproportionately impacting women, can he tell us what the UK support to the World Food Programme will be this year? The Minister of State is not in his place, but I wrote to him about the pressure put on the ODA budget by the asylum system in March. It is now June and I have still not received a response. Will the Minister who is in his place assure me that a response will be expedited urgently?

Last year the Government promised that they would directly support women’s rights as part of the civil society component of the United Kingdom’s Afghanistan conflict, stability and security fund programme. Since then the CSSF has been scrapped in the integrated review refresh to be replaced by a new, smaller fund about which we have received very little information. As ICAI revealed just a fortnight ago, the FCDO no longer has any direct programming with women’s organisations in the country. For what reasons have the Government decided to completely withdraw direct funding from women’s programmes in Afghanistan? Has the Afghanistan CSSF programme been completely or partially scrapped? Will it or its replacement retain a civil society component through which Afghan women’s rights are supported, or has that gone, too?

We recognise the policy challenges that the Government now face with regard to Afghanistan. The security situation remains a significant concern, and the restrictions on women’s basic freedoms are an obstruction to the country’s very future. Progress from here will be slow; however, the ongoing failure of the international community to engage with the de facto authorities and find a way through the current impasse cannot continue. We must recognise that humanitarian aid, while essential, is a sticking plaster, and no substitute for basic public services and a functioning economy. The Government must lead efforts to co-ordinate a global strategy that supports Afghan civil society, respects human rights and sets a road map to allow basic structures and public services to function. The alternative is a permanent crisis, a people perpetually reliant on aid, rising extremism, women subjugated, more instability and refugees spilling across borders.

Something simply has to change, so what discussions is the Minister having with partners about setting a unified international strategy of diplomatic engagement with the de facto authorities? What is the UK doing in the meantime to help, in country, the 1.3 million Afghans who have fled across the border to Pakistan? What consideration has he given to scaling up support to multilateral initiatives, such as the window for host communities and refugees programme and the global concessional financing facility, to support developing countries that are hosting a high number of refugees? Does he accept that the lack of international diplomatic representation in Afghanistan is increasingly problematic?

Where Britain was once a leader, we are currently bystanders, yet I believe that a path through the crisis is possible. Across the country, brave Afghans are making clear their widespread opposition to the Taliban’s edicts. Women are standing up to the Taliban in the streets. In solidarity, male students and professors have walked out of universities. Even within the Taliban leadership, reports suggest that many officials oppose the ban. In government, Labour would do things differently. The United Kingdom was the only country in the G7 to destroy its world-leading development Department in the middle of the pandemic, cut lifesaving aid programmes with days’ notice and tarnish its international reputation as a trusted development partner. It is investment in long-term development that turns the tide on the challenges that we face, so our approach to international development will actively centre women and girls to fight for their futures and a fairer world.

We will fix the Home Office meltdown with our comprehensive plan to tackle channel crossings, reform resettlement routes, break up the criminal people-smuggling gangs and address the root causes of humanitarian crises and poverty. In partnership with allies, a Labour Government would develop a strategy of pragmatic diplomatic and development engagement with the de facto authorities to help to restore Afghanistan’s economy, uphold women’s rights and save lives. We understand that the recognition and protection of gender equality is both a human rights obligation and essential to achieve peace, justice and sustainable development in Afghanistan.

Tomorrow, I will meet a group of 20 Afghan women, many of whom have escaped the Taliban and are now living in the United Kingdom. Brought together by Zehra Zaidi, they are calling for a global summit for Afghan women and girls. They include former Ministers, judges, journalists, diplomats, women’s rights defenders, chief executive officers, scientists and scholars—incredible women whom any nation should be proud to have produced and to see fulfil their full potential. As the shadow Minister for International Development, I want to be able to look those women in the eye and say, hand on heart, that Britain did not give up on them and those like them in their hour of need. That work begins by standing up for women’s place in society and playing our full part to forge a way out of despair.

[Mrs Pauline Latham (in the Chair)]

I remind the Minister that I will allow Wendy Chamberlain two minutes to wind up at the end.

10:36

[The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (David Rutley)]

It is a pleasure to serve with you in the Chair, Mrs Latham. It is good to see you there—congratulations—and I will follow your instructions to the letter. I congratulate the hon. Member for North East Fife (Wendy Chamberlain) on securing the debate. I pay tribute to her commitment to Afghan women and girls, including as the co-chair, I understand, of the all-party group. I am also grateful for the many thoughtful contributions from hon. Members present. As Members know, the Minister for Development and Africa, my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell), would normally reply to such a debate, but he is in Cabinet now, and it is my honour to reply in his place.

I will try to address many of the points that have been made, but I will start by saying that between 2001 and 2021, secondary school enrolment in Afghanistan rose from 12% to almost 55% across all parts of the education system. An additional 8 million children, including 3.6 million girls, were receiving an education as a result of progress made over those two decades. By 2021, basic health services had reached 85% of the population, and the number of people with access to clean water and sanitation had doubled. Life expectancy had risen by eight years. Maternal mortality had nearly halved, and infant mortality had decreased faster than in any low-income country. Those are significant achievements.

In short, the UK and our allies, working with the Afghan Government, have given millions of Afghan women and girls access to health and education, and a path to a brighter future. Successive UK Governments invested heavily in Afghanistan and targeted that support towards women and girls, because we all wanted Afghanistan to succeed and prosper, and because, as we note in our international women and girls strategy, we know that gender equality embeds greater freedom, prosperity and security for all. Others have made that point very clearly, but I think the Development Minister, my right hon. Friend the Member for Sutton Coldfield, said it all when he said:

“If we want to change the world, we can do so by educating girls. That is the first and foremost way of achieving it, and the Government are absolutely behind that agenda.”—[Official Report, 14 March 2023; Vol. 729, c. 677.]

In February, the UN special rapporteur, Richard Bennett, reported that further Taliban restrictions deepened existing, flagrant violations of women’s human rights, and, in his words, “may amount to gender persecution”. We continue to support that work, and we look to organisations such as the International Criminal Court to judge whether the actions of the Taliban amount to gender apartheid, a point made by the hon. Member for North East Fife. Taliban decrees limiting women’s rights to education, work and freedom of movement have taken a terrible toll on the lives, hopes and dreams of millions of Afghans. The UN estimates that excluding Afghan women from work costs the country up to $1 billion a year, or roughly 5% of GDP. That seriously undermines Afghanistan’s capacity to recover and its future prospects.

In the face of these attacks, Afghan women and girls continue to demonstrate incredible perseverance, courage and bravery, which has been highlighted by all contributors today. Many continue to take to the streets to call peacefully for their rights and the right to education for their daughters. The actions of the Taliban have been rightly condemned by the entire international community, and senior Islamic scholars from countries as diverse as Saudi Arabia and Indonesia have dismissed the Taliban’s claims to be acting in line with Islam.

[Jim Shannon]

One of the things we all referred to was the NGOs and the fantastic humanitarian work they do. For many ladies and girls, that is where they find their employment. Has the Minister been able to have any discussions with the NGOs on not taking away the jobs, but taking away the humanitarian aid that filters across the whole of Afghanistan? There is a bigger picture here, to which the Taliban unfortunately have a blindness. Has the Minister been able to use his influence or the Government’s influence to ensure that what they do can be looked upon differently?

[David Rutley]

I thank the hon. Member for his important points. He also made important points about freedom of religion or belief, which he and I support very strongly. I was grateful for those.

In terms of engaging with NGOs, there are pathways to bring food and engage women and girls in that process with a limited number of NGOs, including the Red Cross and Red Crescent. We are doing everything we can to work within those pathways to do that, but this is far from ideal. We are not happy with the situation, and we want to find other ways, but at least there are some limited pathways.

While we are talking about the humanitarian situation, it is worth emphasising that more than 28 million Afghans—over half the population—are estimated to be in humanitarian need, with around 17.2 million suffering acute food insecurity. We are working very hard to find ways to get food to those individuals and support them. The UK remains one of the most generous donors to Afghanistan; since April 2021, we have spent over £530 million. Points have been made about the official development assistance budget. It is well known that our aim—the Government’s aim—is to return to 0.7% when the fiscal conditions allow.

The crisis has been exacerbated by the Taliban’s bans on women working for the UN and for NGOs. The UN described the ban on its staff as “unlawful” and it has been unanimously condemned by the UN Security Council. Those bans prevent humanitarian development aid from reaching Afghans, particularly women and girls, and threaten lives in communities dependent on that support, as highlighted by the hon. Member for Strangford (Jim Shannon). The UK Government continue to provide support despite the bans, and we are working with allies and countries in the region to put pressure on the Taliban to reverse them. The goal for the aid we provide is to ensure that 50% of those reached are women and girls. We achieved that in 2021-22 and are on track to do so again in the last financial year, despite the bans that we have all called out.

Afghanistan is the only country in the world to ban women from secondary and higher education. It is a genuinely extraordinary step. As a parent of four children—two young men and two young women—it is clear to me, along with millions of others in this country, that that is unfair, economically and socially ignorant and completely self-defeating. We know from our consultations with Afghan women, including those in Afghanistan, that educating their sons and daughters is their No. 1 priority. It is key to lifting families out of entrenched poverty and insecure, low-skilled labour.

We support education provision in Afghanistan through our financial contributions to NGOs, UN partners and the World Bank, the Asian Development Bank, Education Cannot Wait and the Global Partnership for Education. We will continue to use every diplomatic and development lever at our disposal to restore girls’ rights to education. We are working with close allies, regional powers and through the UN to press the Taliban to allow girls back into classrooms. In December, we used the Bali international conference on Afghan women’s education to urge regional partners to speak on behalf of Afghan women and girls.

Important points were made by the hon. Member for North East Fife about the breadth of engagement with NGOs. We have had a range of consultations with Afghan women over the past year, both those in Afghanistan and here in the UK. We engage with NGOs in regular meetings with the British and Irish Agencies Afghanistan Group and we organise consultations with local organisations as well on specific thematic issues, such as education, health and livelihoods. We will continue to take forward that engagement. We also allocated £17 million to support regional countries, including Iran, Pakistan and Tajikistan, in 2021-22. That aid supports those countries to be better prepared for an increase in population movement from Afghanistan and to deliver services to refugees and asylum seekers.

Important points were made about what we can do to help encourage girls to study at home. We support access to education for girls at primary level through community-based education, which reaches adolescent girls close to their homes. Some of the partners that provide community-based education are testing innovative approaches to reach girls through technology, as mentioned by several hon. Members today. However, we have some concerns around access to electricity and the internet, which make it difficult to scale technology-based solutions.

There was a call to impose sanctions on members of the Taliban who send their daughters to schools overseas. I understand those concerns. We believe it is important to continue to engage with the more moderate members of the Taliban to persuade them to call on the Emir to reverse the edict banning girls’ education. That is the primary focus in that work.

Points have been made on how we can support particular cases. I am with the FCDO, not the Home Office, and it would not be appropriate for us to comment on individual cases. However, we are working hard to encourage and support people to come into the United Kingdom. To date, 24,500 people have been brought to safety, and since April 2021 more than 9,000 people have been granted settled status under pathway 1 of ACRS. Since 2022, the first people have arrived in the UK through pathway 2 of ACRS, and, in the first stage of pathway 3, the Government are considering eligible or at-risk British Council contractors, GardaWorld contractors and Chevening alumni for resettlement.

[Sir Julian Lewis]

I am very grateful to the Minister, who is a very decent man and I am sure very sympathetic to the plight of the Afghan women. Will he please take the message back to the Home Office that if it wants to claim credit, rightfully, for those schemes, it needs to create the machinery to enable right hon. and hon. Members to engage with its officials in the way that we did when we successfully engaged over Ukraine? We need that hub back. Please will he raise that point with his Home Office counterparts?

[David Rutley]

I noted the point that my right hon. Friend made in his short but important contribution, which he has just reiterated. I will take that away and follow it up with the Home Office.

I want to highlight the important work that we should carry on doing to get the Taliban to change course.

[Joanna Cherry]

I realise that the Minister is not a Home Office Minister, but I feel like I am banging my head against a brick wall in relation to the humanitarian visa. Will he undertake to at least speak to his Home Office counterparts about that? As I said, I met the Prime Minister, who seemed amenable to the idea, but time is of the essence.

[David Rutley]

Understood. I apologise for not responding to that point earlier. I will follow up on that. There are already pathways set out. I understand that there are frustrations with the pace of the response in some of them, but we are moving forward with them.

I will conclude in order to give the hon. Member for North East Fife enough time to make her concluding remarks. The Taliban need to end their discrimination against and repression of women and girls. They must allow them back into schools and universities, and lift the restrictions on employment for women. Educated and empowered women in Afghanistan will contribute to economic development, peace and stability across the country. It is clear that without that the country will never achieve longer-term stability or prosperity.

10:52

[Wendy Chamberlain]

I am very grateful to you for your chairship, Mrs Latham.

Sixteen MPs have been in this Chamber either contributing to the debate or chairing it, and if the Taliban had their way more than half of us would not have been here, nor would the two female civil servants and two female members of House staff. We need to think in stark terms about what has happened to women and girls in Afghanistan. That is why it is important that we resist the Taliban narrative, and even more important that we listen to women and girls.

I am hugely grateful to everybody who contributed to the debate. We speak passionately because we care, and we care because this is a matter of life and death for many of the people we have engaged with, and we feel a degree of responsibility to them.

There are clearly key things that we want the Government to consider, and I am grateful to the Minister for committing to several of them. I hope he will take away the APPG’s request that the Minister of State, who is the International Development Minister, meet our group—not just the MPs but, importantly, the experts we engage with. That is a very important message for him to take back.

It is clear that the existing schemes are not doing what we want them to do. I echo the comments of the right hon. Member for New Forest East (Sir Julian Lewis): we should do something similar to what we did for Ukraine. Politics is all about making difficult decisions. There is never a right or a wrong answer; there is usually just a less wrong answer, and sometimes not making a decision sends a message. I agree with the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) that choosing not to do for Afghanistan what we did for Ukraine sends a message. I have had people ask me directly to my face: “What does this say? Why are we different?” I suspect we know why the Government are not doing that.

The Government are focused on small boats, and it is clear that there is no political consensus about that in this Chamber. They have talked about the reduction in the number of Albanians, but we know that, from the start of this year, the highest proportion of people coming in small boats are from Afghanistan. We know exactly why that is: the existing schemes do not work, and promises were made to people in Afghanistan who supported us and delivered the 20 years of progress that the Minister spoke about. We must do more; we cannot forget women and girls in Afghanistan.

Question put and agreed to.

Resolved,

That this House has considered support for Afghan women and girls.

10:56

Sitting suspended.

Isle of Wight: Island Designation Status and Landscape Protection

Tuesday 6th June 2023 Westminster Hall

11:00

[Mrs Pauline Latham (in the Chair)]

I will call Bob Seely to move the motion, and I will then call the Minister to respond. As is the convention for 30-minute debates, there will not be an opportunity for the Member in charge to wind up.

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

I beg to move,

That this House has considered Isle of Wight island designation status and landscape protection.

It is a pleasure to serve under your chairmanship, Mrs Latham.

Islands have a unique place in the identity of the British Isles. We are a collection of islands, and some are bigger than others. Our islands are marked out by their sense of history, their sense of community and the uniqueness of their geography, their wildlife and, in some cases, their geology. For my constituency of the Isle of Wight, I will make the case for a specific island designation. I do not propose to have a national park on the Island, but a new designation in UK landscape protection, which I believe should be introduced not just for the Isle of Wight. It would be of considerable benefit to other islands in the UK, and it certainly could be seen as a UK-wide designation, because many Scottish islands may wish to take part. So too might Anglesey and the Scilly Isles, so it would stretch across Scotland, Wales and England.

My plan for an island designation for the Isle of Wight is supported by the Isle of Wight Council and our area of outstanding natural beauty partnership. It would effectively put into law a landscape designation given to us by our UNESCO biosphere status, even if that was initially a shadow designation on the way to becoming something more legally binding in the UK—as we know, the UNESCO biosphere is not legally binding. I know the Minister has heard my argument very recently, and I am looking forward to seeing her on the 13th. I officially invite her to the Isle of Wight, so that she can see with her own eyes some of the points that I am trying to make about the physical unity of the Island. I would be most grateful if she did so, and I look forward to seeing her on the Island very soon.

In support of my argument, I will explain why the Island has an exceptionally rare diversity of animal life, marine habitat and geology, and why I feel it should have been much more valued over the years for its uniqueness and value to the UK than it has been by policy makers. Let me kick off my argument by saying that the Isle of Wight is pretty much geographically unique. In the words of our AONB, it is a microcosm of the whole of England. The east resembles Kent and Sussex, with its thick hedges, copses and woods. The stone walls and small sandy bays in the south, around the undercliff, feel rather like Cornwall. Where I live in the south-west, the windswept chalk downs that roll to the sea resemble parts of Dorset, and the creeks of Yarmouth, Newtown and Wootton in the north of the Island resemble those in Devon.

To pull all that into terms that geographers might recognise—I apologise for repeating what I said in a recent debate, but I want to get this on the record, because it shows the variety of habitats in the Island—we have a broad mix of new woodland; maritime cliff and slope, including our unique chines; soft sandstone, which has been moulded and shaped by waters and rivers as they flow to the sea; low calcareous grassland; our coastal and flood plain; our grazing marsh; lowland meadows; reedbeds; and lowland dry acidic grassland. We have fens on the island, as well as saline lagoons and mudflats. We have coastal sand dunes, coastal vegetative shingle and the lowland heathland. Beautiful chalk downs, with their rare flowers, insects, adders and lovely things like that, provide the Island’s spine, which runs from Bembridge in the east, past me in Mottistone and Brighstone, and all the way down to the Needles in the west.

All that is in one compact island, which is 30 miles from east to west, and 15 miles from north to south—from Cowes at the top to beautiful St Catherine’s down at the bottom. It is one of the most diverse areas of England and one of the three most diverse areas in the south-east of England, along with the New Forest and Surrey heaths, and I would respectfully argue that our variety of wildlife and habitat diversity is greater than in both of those two places—not that I wish to be critical of them, because they are unique and fantastic as well. Our English landscape in miniature, and our range of habitats, means that we continue to be home to species that are unique to the Island or, perhaps more importantly for the UK as a whole, are not flourishing on the mainland but are either less threatened or better off on the Island. We do not have grey squirrels, although one once got on a ferry and the ferry had to be stopped. We do not have escaped mink or escaped deer, but we do have red squirrels, dormice and water voles. I thank Helen Butler of the Isle of Wight Red Squirrel Trust for the important work that she does.

We have some of the UK’s rarest bats; I thank our wonderful Isle of Wight Natural History and Archaeological Society for listing all 17 bat species. We have some unique and highly rare ones, such as the greater horseshoe bat, Bechstein’s bat and the grey long-eared bat. Mammals aside, I asked Natural England for a list of rare species of insects and flora and fauna. It came back with 28 species, which include early gentian, field cow-wheat and wood calamint. On rare insects, the Island is the sole British location for the Glanville fritillary butterfly as well as the reddish buff moth. I thank Jim Baldwin for his excellent work in cataloguing the many moths that we have on the Island—not an easy job, but somebody has to do it.

For our birds, the Solent is a Ramsar-designated site, and we have wetlands of international importance of both sides of the Solent. I hope that the Minister will be interested to note that, on the Island specifically—in Brading, Newtown and Western Yar—marshes and estuaries are highly important for migrating birds. We have five that are rare or threatened, including terns, teals and a variety of plover. Brading marshes is a site of special scientific interest, a special area of conservation, a Ramsar-designated wetland and a RSPB nature reserve—it is not in the AONB. Forestry England and the Roy Dennis Wildlife Foundation reintroduced sea eagles in England on the Isle of Wight, and I thank Steve Egerton-Read, Forestry England’s project officer for the sea eagles, for showing me around Barding marshes, I think about a year ago, when we spotted—I think—a female sea eagle perched on a tree looking for breakfast. Buzzards, once rare, are relatively plentiful, and we have a healthy population of adders.

As regards our marine environment, the area surrounding the Isle of Wight is protected by maritime conservation zones, special protection zones and special areas of conservation. Again, I asked Natural England for a list of species that I should be aware of. It said that there are 26 species around the Island that are nationally scarce or globally vulnerable. We are a relative haven for many different types of species, whether on land or on sea. That is an important part of an island designation for me, because it would include the marine environment, human environment and landscape environment—a bit like a UNESCO biosphere but in UK law.

I shall not list all the very rare marine species, because I am respectful of people’s time, but they include native oysters, both our varieties of native seahorses—the short-snouted and the long-snouted—varieties of jellyfish, rays and other species. We also have seagrass meadows in Osborne bay, Yarmouth and Bouldnor. Indeed, those seagrass meadows are being used to transplant seagrass to the other side of the Solent—into the Beaulieu river—so the relative strength of our natural world is being used to support others. We also might be doing a project to reintroduce UK crayfish back into the Isle of Wight, because the UK population of indigenous crayfish has been decimated by the American crayfish, which, like the grey squirrel, was imported and proved to be far more aggressive and predatory.

Geologically, along the south-west of the Island, we have a near complete exposure of cretaceous coast. We have this stuff called wealden rock. It is orange and it produces dinosaur bones. In most of the UK, it flows and undulates well underneath the surface, but it sticks up in the south-west of the Island over an area of about 11 miles, and there is a little patch in Sandown in the east as well. The sea and tides gently wash away that coastline, and that is why we have the richest dinosaur finds in Europe. I mentioned a family dinosaur last time—I will not go there again, because we do not have time. The undercliff, a breathtakingly beautiful part of the Island on the south side, is the most geologically unstable part of Europe.

What does all that mean? I am not just listing this because I want island designation for my constituency—everyone could say something similar about their constituencies, although clearly the Island is unique and special. I am making the point that our variety, diversity and depth of habitats and our different types of wildlife, flora, fauna, insects, and marine and animal life are pretty much unique in the UK.

The Island should have had a special and unique role in this country’s protected landscapes, but it has not. Our landscape and natural world has been celebrated by many different types of artist over the years. J.B. Priestley, one of the great 20th century authors, who lived on the Island, said the Island should be Britain’s first national park. Sadly, we missed that boat. I am not arguing for that; I am arguing for an island designation. Even before Priestley—he wrote “An Inspector Calls” when he was living in the village next to me—our Island’s uniqueness was celebrated by Alfred, Lord Tennyson, and by Keats, who wrote in Endymion:

“A thing of beauty is a joy for ever”,

allegedly about Shanklin chine—one of our wonderful geological chines. Britain’s greatest artist J.M.W. Turner sketched and painted on the Island. Algernon Swinburne, another great Victorian poet, lived in Bonchurch. Indeed, the Freshwater and Bonchurch sets of the 19th century were heavily influential in the UK. Julia Margaret Cameron pioneered early portrait photography on the Island in Freshwater. In 1850, the daughter of William Makepeace Thackeray said:

“Is there no one who is commonplace here? Is everybody either a poet, or a genius, or a painter”?

I am tempted to say, “Yes.”

The Island has one of the most painted coastlines in Britain, along with north Yorkshire and Cornwall. We have not done enough with our artistic and cultural heritage. Sadly, we have forgotten far too much of it since world war two—that is another story.

We have a single Island-wide designation: the UNESCO biosphere, which was awarded to us in 2019, and I thank everyone involved in that, including Joel Bateman, Richard Grogan and many others, but it comes with no legal standing in the UK. The problem is that instead of being treated as a single whole, we had some guy from the Ministry turn up in the mid-1960s and parcel the Island out into five blotches of AONB. I found that incredibly frustrating because people can go to considerably larger AONBs on the mainland, for example, driving through bits of the Cotswolds, and some of it is pretty flat and quite ordinary and boring, but it is part of a greater whole. It is included because it is part of a greater whole and there is a greater beauty around it.

I find it bizarre because if anywhere should be treated as a single whole in the UK, it is a relatively small island, even if it has lots of different types of habitat. It is a single whole with many habitats within it, all of which feed and function off one another. The Isle of Wight has been parcelled as 52% AONB, which is almost entirely focused on lowland heathland. The extraordinary Brading Marshes and the dryland around them were not included in the AONB, and many other parts of the west and the south were not included and are now under development pressure.

We are a relative refuge for wildlife, but we are also more vulnerable than parts of the mainland because we are finite and not that large. As Natural England notes, finite landscape is being damaged at pace. Its report says:

“Urban development is spreading, with waste disposal sites, extensive holiday and industrial developments and caravan parks blurring the edge of settlements.”

In the past 50 years, we have lost some species. The extent to which rural landscapes have been disturbed on the Island by urban development has increased by nearly 30%. That figure was applicable until 2007, and it is worse now. Some of our rivers have been badly modified and damaged.

Even when we are protected by the AONB, we have seen that sometimes that is not enough. There is something I am working on that I will mention because I want the Minister to be aware of it and I have written to the Secretary of State about it. Under section 191 of the Town and Country Planning Act 1990, there are time limits on the enforcement of planning conditions that prevent planning authorities from taking action on historical breaches of planning. Even if that breach is minor, immunity can then be granted from planning conditions as a whole, which then permits development that should not take place.

On the Isle of Wight, we have one pretty awful development that exemplifies this problem: Chine Farm. A minor breach of condition years ago involving camping in a field not specified by planning conditions has now been leveraged to permit the siting of static caravans all year round. That is in a site of special scientific interest on a heritage coastline in an AONB. I have written to the Secretary of State on numerous occasions about closing this damaging loophole, which affects me and others.

The purpose of the Island park designation would be to cover the entirety of the Island. It would treat the Island as a single whole. It would unite maritime and landscape protection in one designation, and common sense suggests that on an island this is the sort of unified approach that we should be taking not only to landscape management but to supporting farmers. If all my farmers on the Island could, for example, have Farming in Protected Landscapes funding, they would be able to do things like planting more hedgerows and planting copses, to join up our natural realm into a single whole. We would have these natural corridors, whether hedgerows or copses. In fact, I saw some of those being planted last weekend, at the Isle of Wight sheepdog trials. It was great to see that, and I thank Ian Wheeler very much for his work.

An island park would assume a basic standard, when it came to planning and housing, akin to that of an AONB. If the Minister is asking what an island designation should consist of, the basic building block is AONB throughout—unless there is an exception for development. That is the first point. The second point is better, more traditional standards in planning and beautifying, which is an important part of our planning and housing ideas anyway, of our towns and villages, to respect the traditional building methods, whether they involve traditional Isle of Wight stone, which is pretty much unique to the Island—we see it a little bit in west Dorset—or patterned red brick, as seen in Newport.

That means that large-scale housing development, completely inappropriate for islands, would be banned in favour of small-scale development in existing communities. Pleading an exceptional circumstance, which I hope we have negotiated with the Department for Levelling Up, Housing and Communities, would allow the Island to focus overwhelmingly on finding homes for our local population and not have to fit into arbitrary targets, which take absolutely no account of the fact that the Isle of Wight is separated by sea and is an island.

An island park designation would also serve as branding. There are 56 food producers on the Island. It would help them to brand their products better, and it would help with tourism if people saw that they were going somewhere that valued nature and had an extraordinarily rich natural world.

How would this come about? The Glover review recommended

“a wider range of…systems of landscape protection”.

I hoped that that was going to mean primary legislation. Might it mean primary legislation? If not, a second option would be to amend the Isle of Wight County Council Act 1971—if I came high up in the private Member’s Bill ballot, would that be an option? A third option would be to extend the AONB, but that is incredibly time-consuming; it takes, seemingly, years—up to five to 10 years. Therefore I am wondering whether there is another way of looking at this by getting some kind of shadow designation, so that if the Government introduced further environmental Bills and Acts in future, island parks, akin to an AONB and meaning higher standards—with opt-outs for job creation, because that is really important on islands—would be something that could appeal, not only to the Isle of Wight but, potentially, to the Isles of Scilly, to the Western Isles of Scotland and to Anglesey. This is potentially a really attractive idea.

To sum up, the Isle of Wight is unique. I do not think it has been valued enough in the last 50 to 60 years. We should have been a national park—we are not—but our natural habitat is unique. The variety of our habitat is unique. The wildlife that we help to protect and that finds a refuge from the mainland of the UK is relatively unique. Our tourism could really do with the sense of the Island being an island park—that is not a national park; it is a different designation. I think that if we could work towards that, it would be of huge benefit. I do not want to see the Island becoming overdeveloped in the coming decades, because that will ruin what is unique and special about it, certainly for as long as we are separated by sea from the mainland.

I will leave the Minister with a final thought. The Government are committing to designating 30% of land as protected. I know that we have our patchwork of protections, but a single, encompassing whole would, I think, enable the Government to meet their targets. In the Island’s case, it is absolutely deserved, because of our contribution to the natural world through our different habitats and our geology. Therefore I look forward to the Minister coming down to the Island very soon to talk with me further about this and I look forward to discussing it with her when we meet on 13 June.

11:19

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Trudy Harrison)]

It is a real pleasure to serve under your chairmanship, Mrs Latham. It is always a pleasure to hear from my hon. Friend the Member for Isle of Wight (Bob Seely), as he speaks with such adoration, pride and passion but, most importantly, a deep understanding and knowledge of his constituency of the Isle of Wight.

Once again, he has powerfully and effectively set out his case for an island designation. We are looking very closely at that in the Department for Environment, Food and Rural Affairs and we will discuss it in far more detail when we meet in about a week. My hon. Friend makes it impossible to do anything other than accept his kind invitation to visit the Isle of Wight. I will endeavour to go during the summer recess to visit some projects. I would like to meet Helen Butler in particular; my hon. Friend referenced her work in preserving the red squirrel colony on the Island.

Let me set out some reasons why the Isle of Wight is so special. We have already heard incredible insights about the species, but I also reinforce that we have 41 sites of special scientific interest. We have a national nature reserve at Newtown Harbour that is managed by the National Trust, eight local nature reserves covering over 1 sq km and around half of the Isle of Wight’s coastline of approximately 45 sq km is defined as a heritage coast at Tennyson and Hamstead. In addition, all of the waters around the Isle of Wight are designated under a network of marine protected areas, covering 331 sq km and including three special areas of conservation: south Wight maritime, Solent maritime, and Solent and Isle of Wight lagoons. There are three special protection areas at the Solent and Southampton water, also recognised as Ramsar sites. There are also three marine conservation zones: Bembridge, Yarmouth to Cowes, and the Needles. They represent just some of the unique features of that wonderful place. I look forward to visiting it, especially after a good conversation with officials about the proposals that are the crux of this debate.

I am happy to confirm that we have a meeting to discuss the proposals in more detail and we will be able to understand the landscape and the coastal areas in particular. All of England’s landscapes are important, but our 44 national parks and areas of outstanding natural beauty are the most iconic and beautiful places. Covering almost a quarter of England, they contain over half of the SSSIs in England, around 542,000 hectares. Many of our most threatened species live there, such as the red squirrel—which has a stronghold on the Isle of Wight—the curlew and the water vole. Protected landscapes represent our shared heritage and national identity, and are also home to our most special rural communities and businesses. I am biased because I live in the English Lake district and know from first-hand understanding, having always lived in Cumbria, just how important protected landscapes are. They are one of the reasons that I am so supportive of the farming in protected landscapes fund, which we are extending and which is open to farmers in areas of outstanding natural beauty and national parks.

Our current and future protected landscapes can play an important role in recovering nature and, by doing so, contribute more to our commitment to protect at least 30% of land by 2030. We absolutely expect them to do so. Over 262 pages, our environmental improvement plan, published on 31 January this year, sets out 10 goals of legal targets on how we will improve our soil quality, air and water quality; how we will increase tree canopy cover; and increase the size of habits for our vital species in order to achieve the apex target of halting nature’s decline and increasing nature’s abundance after 2030.

We are developing a new outcomes framework and strength and management plans for protected landscapes. One of the most important additions we are making off the back of the Environment Act 2021, however, is the local nature recovery strategies, which will be rolled out soon across all upper-tier local authorities. I recommend that my hon. Friend engages with the LNRS team, and I am very happy to make that introduction. The LNRS will be the critical linchpin for connecting landowners, farmers, environmental non-governmental organisations, charities, people working with nature, organisations across the island and local authorities and reinforcing how we will achieve the apex target of halting nature’s decline. What better place to achieve that than on the Isle of Wight?

We are continuing to make great progress in taking forward an ambitious new protected landscape programme, which was announced in 2021. A couple of the success stories from that are the Yorkshire wolds and the Cheshire sandstone ridge, which are being considered for designation as areas of outstanding natural beauty, along with extensions to the Surrey hills and the Chiltern AONBs. Natural England is fully committed at the moment with its current list of designations, but that is not to say that we will not consider new designations. I cannot imagine a more powerful argument than the one my hon. Friend the Member for Isle of Wight set out. I will work closely with him to advise on the process, and give any hints and tips that may perhaps help him and his island residents.

I understand the challenge of overdevelopment. My hon. Friend the Member for Isle of Wight set out some poignant cases, and I look forward to working with the local nature recovery strategy teams, Natural England and his local authority to see what we can do. I, too, value the contribution that small developers can bring to the island, by helping to achieve the priorities that my hon. Friend set out around the designation of an island park or AONB across the island, as well as building homes for local people. Of course, those are also priorities for this Government. The right homes, in the right places, with the right sense of place, are so important; it is important that we have beautiful homes that are sustainable and that feel like homes that belong on the Isle of Wight. My hon. Friend set out his argument about the 56 food producers, and the importance of the visitor economy for the island, as effectively as always.

We will use the all-England strategic landscape mapping tool, published in October 2022, to identify those landscapes and improve nature and access. That is a personal priority for me, and it is also my responsibility in DEFRA to improve people’s access to nature. That is why we have the commitment that everybody, wherever they live, will be able to access a green or blue space within 15 minutes. It is why we are increasing access to walking and cycling, and working with Active Travel England and the Department for Transport.

We will identify further conservation needs across England, including any remaining places that may be suitable for future designations. We will take into account all the information that my hon. Friend the Member for Isle of Wight brings to our meeting in the next couple of weeks. I assure him that we will consider the proposal for potential new approaches, alongside other priorities, through the all-England strategic landscape mapping tool, as we drive forward action, most importantly, to deliver on our environmental improvement plan. We have goals for a growing and resilient network of land, water and sea that is richer in plants and wildlife, and enhances the beauty of the natural environment. Ultimately, we set out to leave this place in a better state than we inherited it.

I look forward to the meeting on 13 June, where we will discuss all the options, especially the role of local nature recovery strategies—and in particular, those on the Isle of Wight. We will discuss how we ensure that the valued landscape and coast of the Isle of Wight is safeguarded, as well as my future plans to visit my hon. Friend the Member for Isle of Wight on the island this summer.

Question put and agreed to.

11:29

Sitting suspended.

Children's Access to Books

Tuesday 6th June 2023 Westminster Hall

[Sir Christopher Chope in the Chair]

14:29

[Alexander Stafford (Rother Valley) (Con)]

I beg to move,

That this House has considered the matter of improving children’s access to books.

It is an honour to serve under your chairmanship, Sir Christopher. It is undeniable that books should form part of our children’s holistic education curriculum. What is less clear, but no less true, is the impact of literacy and reading rates on their personal life, their education and their future career. There is no better skill to give our children than a love of reading, and there is no easier way to do so than by ensuring good access to books.

Members will be aware that I recently secured a similar debate that sought to promote school libraries, which are an excellent way to improve children’s access to books. To capture the benefit of literacy that reading gives to children, we must have a comprehensive strategy that includes making sure that books are accessible to every child at every stage of their education.

Books play a vital role in our cultural heritage. It might seem trivial to an outsider, but it seems particularly British to me that there was a national outcry against retrospectively modernising Roald Dahl’s children’s classics. These stories and books bring home the respect and love we have for our books of all varieties.

Books not only have value as a cross-generational medium or because of nostalgic personal value, but because we all know, deep down, that reading is good. It is a simple fact that reading for pleasure bestows unlimited returns for a child’s education, their future vocation and their life in general. The best way to give our children the success and opportunities that come with reading is to cut away the barriers that obstruct them from accessing books.

As those present at my previous debate will remember, Yorkshire and Humber, which includes Rother Valley, has the unfortunate accolade of being the worst area in the UK for children’s book ownership, with nearly 10% of children, primarily from lower-income households, reporting that they do not own a single book. It would not be unreasonable to think that children with books at home are slightly more likely to enjoy reading and perhaps have marginally higher reading skill than their peers who do not have books at home, but the size of the gap is far larger than could possibly be imagined. The gap is perhaps most starkly characterised by the statistic that children with books at home are twice as likely to say they enjoy reading as those who do not, and are six times more likely to read at above the level expected for their age.

We also might not take account of the impact of these statistics on the rest of children’s lives. Literacy has a stark, direct impact not only on education but on standards of living, job prospects and even life expectancy. For example, those with a lower literacy rate earn roughly 7% less than those with an average literacy rate, and 75% of women with a low literacy rate have never received a promotion. Perhaps the most shocking statistic is that the disparity in life expectancy can be up to 20 years, depending on the literacy rate in the area in which a child was born.

Sadly, it may soon be too late for some. Low rates of book ownership, combined with a global pandemic that disrupted education, means that some children may never be able to develop a love of reading. This is clear from official statistics. For example, key stage 1 SATs results for English literacy fell from 76% to 59% between 2019 and 2022.

[Matt Rodda (Reading East) (Lab)]

The hon. Gentleman is making an excellent speech highlighting the vital importance of literacy and the importance of children having books at home. Does he agree that those statistics indicate and support the need for a much greater catch-up programme for children in school?

[Alexander Stafford]

I have been clear that more must be done, at all levels, to make sure that literacy rates catch up. Of course, access to books is one answer, but we should also introduce measures so that those children who do not have access to books can catch up. Nevertheless, without books at home, at school or at a library, children will always struggle to catch up, so we must deal with the root causes

[Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)]

): I congratulate my hon. Friend on securing this debate. He is right to highlight the importance of phonics and literature in learning. On the issue of books, it is often the case that young people now engage with their education through digital means. I wondered whether he would address that point when he makes suggestions to the Minister about how we and schools can support young people to engage with literature and the written word through what will be the medium of the future—computers and digital forms of communication.

[Alexander Stafford]

My hon. Friend is quite right; in fact, I devote a large chunk of my speech yet to come to e-books and audiobooks, and how to use TikTok and other digital means to engage with people. I am sure he will look forward to enjoying that part of the speech immeasurably.

[Dean Russell (Watford) (Con)]

Before my hon. Friend moves on to e-books, as one of probably the few MPs who has written children’s books, I just wanted to make a contribution, first to congratulate him on securing this very important debate but also to make the point that books, in and of themselves, are collaborative, not only for the author in writing them—I worked with my daughter to come up with my storyline—but for that moment of an evening with your child, to spend time to read a book to them. Books are important not just within schools but also for such family moments. There is a really powerful point to be made about the use of storytelling and creativity. Whether it is through a physical book, via an e-book or even by listening to an audiobook, the important part is the parent-child time, to collaborate together and think of new and creative ways to express one’s own emotions and one’s own story.

[Alexander Stafford]

I could not agree more with my hon. Friend; reading is incredibly important. Personally, I enjoy reading with my two daughters immeasurably. As a young child, I was read to by my father and other family members, and such reading creates the stories and images that set you up for later life. I will address that as well later in my speech. We have a long way to go, my friend, so we will continue and go back to my point about the pandemic unfortunately holding—

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

Will the hon. Gentleman give way?

[Alexander Stafford]

But before we do that, I will happily give way again.

[Patricia Gibson]

I just want to make a quick intervention on the point about reading together. I was an English teacher for 23 years, so I can say that children and young people are never too old to love being read to; they love it when they are read aloud to, no matter what age they are.

[Alexander Stafford]

I thank the hon. Lady for that intervention. Reading aloud is not just a pleasure for the people who listen to the story but for those who read the story. After all, we are all politicians here and we love hearing the sound of our voices. Indeed, I am telling a story today; we are doing storytelling for the future.

Before I continue, I wonder whether there are any more interventions. No? Then, I will happily continue to discuss the pandemic, but first I will comment on the point made by my hon. Friend the Member for Watford (Dean Russell). I congratulate him on writing a children’s book—unfortunately I have yet to receive a copy, but I look forward to receiving one tout suite and I thank him very much for that.

I return to the effect that the pandemic has had on literacy rates. What is most concerning is the effect on the 10% of children who spent the pandemic at home without books. When they returned to school, they would have been further behind their peers who had books at home. Children on free school meals are not only much less likely to own books but are much less likely to enjoy reading with their friends—a statistic that has doubled over the pandemic, as children spent long periods without access to books or other reading material due to schools being closed.

As I mentioned in the previous debate that I secured, which focused on the importance of improving access to libraries, something that has been recently reinforced to me is the data that shows that 30% of parents were borrowing more books from libraries than ever before. Clearly, that is paying dividends in my area, with the announcement of a new library in Thurcroft. However, accessing books can be made easier, making it more likely that people will do that than only going to a library.

In my local area, Labour-run Rotherham council has spent millions of pounds on building a new central library, but we are still paying upwards of £5 million a year in rent for Riverside House, the council offices and library, which opened just 10 years ago, few of my constituents in Rother Valley will ever visit it and fewer still will want to borrow a book from the catalogue, which is in dire need of updating. Spending just a fraction of the money that the Labour-run council has spent on putting books into the hands of the children of Rother Valley would be a far more efficient way to improve those children’s lives.

Rotherham, as we know, has the second lowest reading attainment levels for key stage 2, something that the data shows us can easily be solved by helping children to access books more easily. That is where Rotherham council should be spending money instead. Luckily, there are easy solutions to these issues, both locally and nationally. One of this Government’s greatest legacies will be investment in areas that have been left behind for many years. In some cases, levelling up can mean direct investment and change to infrastructure, as we are pleased to see in Rother Valley with the Dinnington high street project and Maltby skills academy. However, providing books is undoubtably one of the simplest and most cost-efficient ways of improving the lives of 1.2 million children up and down the United Kingdom, giving them the best possible start to their lives and careers.

As was mentioned in the interventions, something that is becoming clearer is the fact that we must embrace technology in our pursuit of improving access to books. Across human history, the first true literacy revolution was the invention of scrolls and paper, allowing quicker, lighter and more accessible reading and writing away from the stone tablets of old. The second innovation was the printing press, bringing books and literacy to the people, as William Caxton did only a few hundred yards from where we sit today.

Many of us have lived through a similarly important revolution in the development of e-books and audiobooks, reinventing the way we read and get information. These new technologies will be game-changers for our children’s access to books and for how they read. E-books, which can be as simple a concept as a PDF saved on a phone or on any number of e-readers, allow for quick and free access to books, which was unattainable outside of a library just a few years ago. Not only can a phone or e-reader hold thousands of titles, it is nearly always cheaper than its printed counterparts, often for the simple reason of having next to no unit cost, meaning that they are far more accessible for younger readers in less well-off households. Indeed, many of the classic books that we may want our children to enjoy like we did are available online for free through sites like Project Gutenberg, which boasts over 70,000 e-books free to download, with titles from Marcus Aurelius to Sun Tzu—anything a child would want to read.

For children, there are other advantages to reading technology. A trial programme points to a huge uplift in reading enjoyment across the board when reading on screens. That is backed up by an increase in pupils’ reading outside school. Not only do children enjoy reading electronic devices, they enjoy it so much that they do it in their own time. It may be better for their development and preparedness for their careers, with jobs these days often involving reading text from a screen rather than a piece of paper.

Audiobooks should share the stage, given their proven results, encouraging those who might otherwise not read to do so. In the first instance, audiobooks have huge reach among younger readers. A 2022 survey tells us that 40% of those aged between 12 and 15 are regular users of audiobooks, whereas only 24% of those aged above 55 responded in the same way. What is more, audiobooks bridge disparities that we usually see in reading and writing among children. For example, the National Literacy Trust reports that listening is the only form in which boys have higher levels of engagement and enjoyment than girls. Audiobooks are an invaluable way of making books and the benefits that come with reading more accessible to those who might normally miss out.

Given that these new ways encourage reading and make books even easier than ever to access, how should we support them? As I mentioned, Yorkshire has the lowest rate of children’s book ownership, but given the ubiquity of smartphone and computer ownership and the availability of e-books and audiobooks, the answer is right there. We touched on some of the charitable endeavours in this area, and I am pleased to report that many other excellent charities are helping to spread e-book ownership, including from public libraries.

Increasing access to books means making them as accessible as possible. For more than 350,000 children with some form of learning difficulty, reading may present more of a challenge. How can reading for pleasure even be considered if reading is a constant struggle for these children? I have talked about how e-books and audiobooks greatly increase reading enjoyment, but that is especially true when looking at the impact on children with dyslexia or any other educational support needs, as well as those who simply struggle with reading. One in 10 children have some form of dyslexia. That should not be overlooked as an area that needs focus. Like other areas in life, technology can provide easy ways for many to overcome hurdles. In this case, e-books can be more beneficial than printed books, such as by being able to quickly change font or sizes or access the dictionary to find out the meaning of new or difficult words—a real step forward in helping those most in need of encouragement. The British Dyslexia Association has many excellent suggestions on how to help children with dyslexia to read and write, and agrees that e-books and other such technology are clear game changers for children with dyslexia.

As well as technology, another central suggestion is paired reading, which we have already talked about. A child and their parent reading together for 10 minutes a day is a perfect example. Unfortunately, when looking at the bigger picture, if 10% of children in my area do not own a book, and 10% of those children have dyslexia, that means that 1% of children—nearly 135,000 children across the UK—simply do not have the resources to overcome their learning difficulties, blighting their career and life prospects.

Over the course of this debate and the last, I have had a particular focus on younger children, such as those in primary school. That may be because of my own personal bias with my two daughters, Persephone and Charlotte. Unfortunately, however, it seems to me that the same is true of our education system, which focuses literacy education on younger children at the expense of older children. Over 75% of children aged between five and eight say that they enjoy reading, but sadly that number trends downwards over the next years of education, with only 45% of 14 to 16-year-olds saying the same. That means that somewhere in our schools children lose their passion for reading. Secondary school—for some, the last years of formal education—can be an invaluable time to fall in love with reading before life’s other worries take over. We must do more to encourage our teenagers to read and enjoy reading.

The point could be made that because so many forms of entertainment are instantly available to our children—and to teenagers in particular—we should do more to make books relevant and accessible. Here, again, we can look to technology to solve those issues. As I have mentioned, with e-books and audiobooks, children can have thousands of stories in their pocket, but how do we actually get them to open the e-books and read them? The rise of social media phenomena, such as bookstagram and BookTok, have undoubtedly led to more teenagers reading, with some books’ dustjackets now proudly marketing themselves as being TikTok favourites.

Social media platforms provide a social aspect to books, allowing users to give and receive recommendations from peers with similar interests, as well as connecting with those who have a passion for a genre or a series of books. The BookTok hashtag has over 143 billion views worldwide, with some of the most watched videos highlighting, for example, books by black British authors or what to put on a summer reading list. Those videos and social groups are reconnecting teenagers to books, albeit in a very different way from previous generations. It is engagement that should be encouraged, and helps to make books and reading as accessible as possible to teenagers. Whatever other concerns may plague social media, this is undoubtedly a force to be reckoned with in the battle for teenage literacy.

Now that I have outlined the importance of better access and accessibility to books, how should we look to achieve that access for our children? The best way to manage it would be through a British book strategy, with the ultimate goal that every child should have many books of their own to cherish and enjoy at their leisure. That would work hand in hand with the overall education strategy, and complement both the Government’s education White Paper from last year and the Prime Minister’s numeracy campaign. I believe this debate will go some way towards outlining what might be contained in that strategy, and I make the following points to the Minister.

First, we must examine seriously the ways in which technology can help children gain access to books, rather than looking at technology as somehow at odds with reading. I have extolled the virtue and benefits of e-books and audiobooks, given their lower cost and the universal access technology capable of reading or listening to them. They must be front and centre of any book strategy. There are, of course, other ways in which technology can improve access to books that I have not had time to discuss, such as apps for public libraries or technological support for the teaching of phonics.

Secondly—and perhaps a related point—we must work to ensure that reading is not seen as a struggle or challenge for those children who find it more difficult than others. With the right processes, even those with the most severe learning disabilities can be shown the joy to be found in reading for pleasure and so reap the same benefits as those without such difficulties.

Finally, we cannot forget to continue to stress the importance of reading as children grow up. Perhaps, given the proven rewards, reading or library time should be a continued presence in our children’s timetable throughout their educational career, regardless of what they are studying, to prevent the terrible decline in reading enjoyment that we are currently seeing. Perhaps encouraging reading-friendly social media may help to give books relevance to our digital society, and help in removing the barriers between teenagers and reading. That is especially true for those leaving formal education as they turn 16.

In conclusion, the Government’s excellent schools White Paper promises to

“do more to ensure every child can access cornerstone literacy and…give them the tools to lead a happy, fulfilled and successful life.”

Better access to books is the simplest and best way to manage that. The only tools children need are the books themselves. We know that high literacy and more reading ensure longer, happier and more fulfilled lives, and there is no better way to achieve those things than to put a book in the hands of every child. Next year, World Book Day will be on 7 March, a date by which I hope every child will have a book of their own to celebrate it with—a book to love and to share with their friends and family.

[Sir Christopher Chope (in the Chair)]

I call Matt Rodda.

[Matt Rodda]

Sorry, Sir Christopher—I just wanted to intervene on colleagues, not make a speech.

[Sir Christopher Chope (in the Chair)]

In that case, I call Jim Shannon.

14:50

[Jim Shannon (Strangford) (DUP)]

Thank you very much, Sir Christopher. It is a real pleasure to speak in the debate. I thank the hon. Member for Rother Valley (Alexander Stafford), who put the case very well, with enthusiasm, energy and passion. It is well seen that he has a deep interest in the subject matter. I am now a grandfather, with six grandchildren, and I very much recognise the interest they have in books. The hon. Gentleman referred to his two children, and that is part of his interest in books. Whenever children—in my case, grandchildren—come along, that deep interest in books is reinvigorated by their passion and hunger for books, and I see that through my children.

Teaching children to read paves the way for their future. It is an essential skill for education, employment and advancing oneself in this world. It is disheartening that not all children have the same opportunities to access books. Poverty has played a significant role in that. Poverty levels in Northern Ireland, for example, are some of the highest in the United Kingdom, so it is good to be here to discuss what we can do to give children equal opportunities. I know that the Minister has a deep passion and interest for this subject matter, and I am sure he will respond to our questions and requests in a very positive fashion, as he always does.

The cost of living and the issues with poverty have meant that so many families are suffering financially. In some cases, they cannot afford to put a meal on the table—that is a fact of life that I see in my constituency office every week—never mind purchase books, which is far down the line for many people. A study has shown that 20% of parents are buying fewer books for their children. That figure increases to 36% among those who are struggling financially because of rising costs. Some 30% of parents have been encouraging children to borrow books from schools and libraries if they cannot afford to purchase brand-new. The hon. Member for Rother Valley referred to his new library, I think, which has been used quite significantly. In Northern Ireland specifically, more than one in five children are in poverty, and officials have stated that the new figures are increasing. That is very concerning.

One of my constituents—it is always good to give examples, and I always do so when I come to any debate—is a reading recovery specialist and a P1 teacher. She told me that she can tell within the first week which children have been read to and which have not. It tells in their ability to concentrate, understand and engage. We must ensure that that is not a matter of poverty or access to books. If that recovery specialist and P1 teacher can tell me that, it is quite clear that interacting with those children makes it clear what needs to be done.

The Royal National Institute of Blind People has been in touch with me ahead of this debate and it has a wonderful scheme that I want to highlight and to ask the Minister a question about. More than 41,000 children and young people in the UK are supported by local authority vision impairment specialist education services, and around 50% of young people with vision impairment have additional special educational needs or disabilities—the Minister has always been responsive to questions we have asked him about those with disabilities.

The RNIB has introduced a new service, Bookshare, which opens the world of reading and education for learners with a print-related disability, including those with a vision impairment or dyslexia. The Bookshare service is currently used in only around one in three schools and needs Government backing to be more widely used. What discussions has the Minister had with the RNIB about its new initiative, Bookshare? With only one in three schools taking part in the scheme, it is clear that we could utilise better the partnership between the RNIB and the Government to make sure that we reach out to the other two thirds of schools, which are perhaps not aware, or not able to take advantage, of the scheme.

In the UK, about two children in every 1,000 have a visual impairment, and a further 10% are dyslexic. Bookshare currently provides 103 titles and partners with 1,100 publishers, including well-known names such as Taylor & Francis, Springer Nature, HarperCollins and Penguin Random House. I encourage the Minister, genuinely, respectfully and as forcefully as I can, to raise awareness of Bookshare and to initiate the scheme across the whole UK.

I wish to digress slightly, because it is important that I put this on record. Members in this Chamber, and indeed many people outside, will know that I am a Dolly Parton fan—it is not a secret. I think that we are all Dolly Parton fans, Sir Christopher—even you, I suspect. [Interruption.] Well, perhaps not. It would not be fair to discuss access to books without raising Dolly Parton’s Imagination Library. I remember that, on the day I submitted an early-day motion on Dolly Parton, the hon. Member for Brentford and Isleworth (Ruth Cadbury) said to me, “You do know that I can access that Dolly Parton Imagination Library in my constituency, and my constituents are doing that.” I did not know about that until she told me.

The point is that the Imagination Library is dedicated to inspiring a love of reading by gifting books free of charge to children from birth to age five. I remember when I did an interview with Sky News one night. We were discussing something else, but this issue was raised. The presenter told me that her children accessed Dolly Parton’s Imagination Library as well. It is surprising how many people access that library right across our great nation.

Thanks to funding shared by Dolly Parton and local community partners in the United States, Canada, this great United Kingdom of Great Britain and Northern Ireland, Australia and the Republic of Ireland, there are 2.4 million children registered and 204 million books have been gifted. That is a phenomenal way to encourage children to read. Furthermore, in the US, one in 10 children has been in receipt of a book from the Dolly Parton Imagination Library. She is a good lady with a massive voice. That is why I love her songs, which all relate to life and growing up, and you can quickly recognise that—I do anyway. I will not go through the examples, because there are too many, but her songs become part of people’s lives as they grow up, which is why I like her so much. The work that she and her Imagination Library do reaches across our great world, showing her to be the philanthropist that she is and showing, too, all the good work that she does for the children.

To conclude, we should be rightly proud of our access to libraries, but, for rural communities, the loss of the library vans—I remember them well—is now showing in our education system. I understand that there is not and never will be—at least not in the foreseeable future—an endless amount of funding, but the early years are essential, as was mentioned earlier in relation to PI education. We must make sure that those early years are covered and that books are available. I ask the Minister to invest in our future by investing in our children and increasing the access to early years reading. I suspect not only that we could form a partnership with the RNIB and its Bookshare, but that Dolly Parton would be happy to form a partnership with us as well.

14:59

[Priti Patel (Witham) (Con)]

It is a pleasure to serve under your chairmanship, Sir Christopher. I am really thrilled to be here for what is such an important debate—it is also a really lovely debate in its tone and content—for obvious reasons. Children are our future, and we have to think about how we put them on the right trajectory in their journey in life. Reading is crucial to that.

I commend my hon. Friend the Member for Rother Valley (Alexander Stafford) for securing the debate, but also for his advocacy of access to books. He has been consistent on this, and he is a big voice in this area. If I may say so, it is really nice to follow the hon. Member for Strangford (Jim Shannon), who made me smile with his references to Dolly Parton’s Imagination Library. Frankly, she is an incredible woman when it comes to philanthropy. She has articulated her world view through her lyrics, but she has also put that into practice in investing in children, which is absolutely crucial.

We can never overlook the investment required in early years, in particular, to give children the best start in life. With that, improving literacy among children and young people is absolutely crucial to ensuring—this is a statement of the obvious—that we have highly educated and highly skilled people in our economy and a functional society. We need to have people who learn from reading, who have inquisitive minds and who hunger for an understanding of good literature and good books, but who also know how to express themselves, and literacy and reading are central to that.

As I was reminded this morning, when I attended a memorial service for a very dear friend, the late Lord Young, the children and young people in our schools today are the entrepreneurs, business leaders, public servants, investors and inventors of the future. If we are not spending the time sorting out our structures and institutions—our schools and everything else—and getting right all the things we need to do at this stage, we are going to lose out on their potential, when we should be unleashing their potential and investing in their talent.

For me as a Member of Parliament—the Member of Parliament for Witham—literacy and improving access to books have been my focus for my schools. Having been elected in 2010, I visited all my schools—we all do and we learn so much, particularly in the early days of being a Member of Parliament—and the thing that surprised me the most was that the level of literacy was below the national average. To be quite frank, every Government can say, “We’ve boosted the money. We’ve done x. We’ve done y,” and all the rest of it, but when I came in in 2010 and heard, for example, about the Building Schools for the Future programme and all the previous investment in schools, it was really quite stark and quite shocking to hear about the number of children in my schools that this issue affected. A lot of this correlated with indices of deprivation, which we have to focus on as well—we have to correct things where we have deprivation and look at how we can do more to turn around outcomes for children.

There were certain schools in certain parts of my constituency where literacy was lagging behind in quite a shocking way. At that time, approximately one in six 11-year-olds was leaving school without the required level of reading. So I worked with local schools and particularly headteachers, and I have previously mentioned one, now former, headteacher to the Minister—a very inspirational lady, Mrs Bass, who was the headteacher at Powers Hall Academy. I set up something called “Get Witham Reading”, which was a literacy scheme to promote reading and, obviously, make it fun. This was all about not only reading in schools, but guests coming into schools. When I say guests, I mean the local mayor and local councillors, who were building bridges within local communities. People came in from the local community to be read to, but also to read to children. Since 2012, this has been up and running every year. It encourages a day of reading activities, and it is actually a good deal of fun.

It is fair to say that I can be a complete pain to many publishers, because I am quite demanding of them. When I run “Get Witham Reading”, I like to give books to schools and I even donate personally to the pupils. I have done that pretty successfully in recent years, and I am hoping to donate over 1,000 books this summer to children in my constituency. There are publishers that will be written to very shortly, and my begging letters will be asking them to do much more, because I think there is an onus on publishers of children’s books. The range of authors, including my hon. Friend the Member for Watford (Dean Russell), is really important, because different genres and styles of reading and literacy are just so important to children of all ages.

I have fabulous stories about the way Powers Hall Academy encourages reading activities. It runs reading activities throughout the day, and one of its former caretakers builds things for it. When we had a Harry Potter theme, he built a train; when we had an aviation theme, he built an aeroplane and put it in the playground so that the children had the experience of boarding a plane—they made their own boarding passes and currency. One year, the theme was the Titanic, and the children made lunch for the school guests based on one of the menus on the Titanic. That is exactly how to bring reading to life through great stories and history. Ministers and Prime Ministers have supported that event in the past. The Minister will be joining me next month when we host “Get Witham Reading”—I promise we will make it fun.

These events encourage characterisation. Children use their imagination to bring a character to life—we have had plenty of Harry Potters and characters from “Charlie and the Chocolate Factory”—and staff, teachers and parents join in. One of the biggest lessons I have learned in my time as a Member of Parliament is that parents have an important role in getting children reading at home. We should encourage parents by making them part of the events in schools, and then they can take the books away and read them to their children. We should encourage the presence of more books at home, because many of the households had no books at home.

“Get Witham Reading” is all about encouraging local children and young people to enjoy reading. It gets them away from their consoles—despite the fact that technology is important—and into books. I have a confession to make: in my teenage years, I probably read more Smash Hits and New Musical Express than I did books. Nevertheless, reading has to continue. That means that we need initiatives to support more books going to schools, and we have to encourage the ownership of books. Young people, in particular, like to own books, and we have to make it easy for them. Of course, donating books is one aspect of that. As I said, I have put in a plea to publishers and authors, and they have an open invitation to “Get Witham Reading”. If any of them wishes to come or donate their books, they are welcome to contact me.

There is a marked contrast between the situation back in 2010 and now. Back then, national literacy standards had fallen in comparison with our international competitors, and the Government and Ministers resolved to do a great deal about that. In 2006, we were ranked 16th in the world in the Programme for International Student Assessment, but by 2009 we had fallen to something like 23rd. Bear in mind that this country gave the world Shakespeare, the Brontës, Shelley and Tolkien. If we are not featured in those league tables, what does that say about us?

I pay tribute to the Minister and all Governments over the past decade; their focus and rigour since 2010 has helped to raise standards. In particular, I pay tribute to the Minister for his steadfast commitment. He has written to me over many years about this issue. I have badgered him, and he has supported my initiatives. He has been very open to working with schools and giving teachers confidence, and I have seen the progress that has been made. We should not forget the impact of the pupil premium, particularly in areas of deprivation. It has enabled my schools to focus additional investment on tackling lower literacy standards among pupils from lower-income households. We are now ranked fourth among participating countries in the progress in international reading literacy study, which is incredible.

My message is that we can never stand still. The Government, the Minister and others have worked incredibly hard over the past decade, but the Government can do only so much. We have heard about great philanthropists and organisations doing so much more. Partners are working with educational trusts to get books into schools. We have heard that our libraries can be slightly more welcoming. In Essex, we have worked very hard to keep our libraries open—I pay tribute to the county council—because they play an important role in supporting literacy. This is not just about the summer reading challenge, which is coming soon. We need reading challenges every single day. We need to set the bar high, and I wonder whether we can do more to tie together the summer reading challenge and the holiday activities and food programme holistically.

In conclusion, we cannot stand still. Generations of children should always feel the benefits of literacy, books and reading. We are a fantastic country when it comes to literacy and our authors, and that is the start of children’s journey in life. They can become the entrepreneurs and innovators of the future if they have access to books, and that is something we will support.

15:10

[Justin Tomlinson (North Swindon) (Con)]

It is a pleasure to serve under your chairmanship, Sir Christopher, and to follow some excellent speeches. I pay particular tribute to my hon. Friend the Member for Rother Valley (Alexander Stafford), who is incredibly passionate about and experienced in this important area. Through the various debates and campaigns that he has led, he has made a tangible difference.

We could not have asked for a more receptive audience than the Minister, who is passionate about the importance of this issue. This should be one of those easy debates in which we all agree and come away with lots of positive things. Indeed, we are in esteemed company, because my hon. Friend the Member for Watford (Dean Russell) has written fantastic children’s books. They are definitely favourites on my daughter’s bookshelf and she often chooses them, so I have had the pleasure of reading them on a number of occasions.

Literacy has the power to shape young people’s lives. Through reading, children can improve their knowledge, build confidence and concentration, and inspire their imagination. As the father of two young daughters, I have seen that at first hand. Only last night, I was at a parents evening for my eldest daughter, and the majority of our conversation was about the importance of literacy in building those core aspects. As parents we all want the best for our children, and there is no better way to equip them for future opportunities than by helping them to be confident, articulate and literate. That opens so many doors and opportunities for whatever career path they choose in future.

I have been active on this issue for my entire time in politics, both as a councillor before coming to Parliament—I was also part of the 2010 generation—and during my time in Parliament. I was proud to chair the all-party group for libraries, information and knowledge, and I was the lead member for libraries on Swindon Borough Council, which included delivering the award-winning new Central Library. I have recently joined the all-party group on literacy, and I host the annual summer reading challenge in Parliament every year, which does so much to inspire the next generation of young people to take up reading, particularly during the summer holidays. Colleagues across the House regularly turn up to be photographed and help to promote that locally, which is hugely appreciated.

My constituency has the headquarters of WHSmith, which is one of the biggest sellers of books in this country. Its chief executive Carl Cowling is passionate about and supports huge numbers of national and local initiatives, particularly through the National Literacy Trust, to help to create additional opportunities. My constituency also has a wonderful independent bookshop, Bert’s Books, which achieved international fame in a recent social media post: someone innocently posted a picture of “How to Kill Your Family” and Prince Harry’s book “Spare” in the window. That bookshop has bucked the trend and is kept thriving by excellent customer service, a great social media presence, wonderful events for families and people of all ages, and wonderful layout and design. I have seen that with my family: it provides that excitement for children to engage in reading. Finally, the head office of the School Library Association, led by its wonderful chief executive Alison Tarrant, is also in my constituency.

I wish to raise four key points. The first is about school libraries, which I should be less keen to discuss because my first experience of libraries was as a school librarian, and sadly I was sacked. I like to think that my career has improved since then. It is worrying that only a third of primary schools have a dedicated member of staff for school libraries. On average, a library is staffed for less than two hours per day, and two thirds of primary schools do not have a dedicated budget. Ultimately, that comes down to the choices of leadership teams and headteachers, and it is very much a postcode lottery—I have seen that on those visits, and we should do everything we can about it. I commend the School Library Association, which does its best to champion the cause, share best practice and deliver opportunities to make the money go that little bit further. It is telling that those schools with the best libraries have the best engagement—it may seem obvious, but it is not a given. It should be.

Secondly, I want to highlight the importance of engaging volunteers. Many years ago, when the then schools Minister David Laws visited a school in a challenging area in my constituency, the headteacher was extremely excited to tell us about an initiative in which she had linked up with the ladies of the Penhill Lunch Club. On a Wednesday lunchtime she offered them a free Sunday roast, which cost roughly a £1 per head out of the pupil premium budget. Those ladies would then sit and do one-to-one reading with the students who were furthest behind. Pupils who arrived at that primary school were on average 18 months behind, but by the time they finished their education they had caught up with the expected average. That was due in no small part to those volunteers coming in and investing the one-to-one time that was not always a given at home. We should do all we can to encourage schools to utilise members of our community who have time on their hands and are willing to help out.

I also commend all the volunteers who support events such as the literacy hubs that my office hosts each year in conjunction with the National Literacy Trust: they offer those extra opportunities that are not a given in the family home. I would also like to thank Celia of Imagination Childcare. Beyond her work at an outstanding nursery in my constituency, she puts on sessions for parents that are interactive, that are social and that encourage families not only to read together, but to think about the books: they will pause to do some work around what they have read so far and what they think will come next. That really catches the imagination of that next generation. I commend Celia for all she has done and all the families who have benefited.

My third point is about public libraries. Councils have faced challenges for many generations around funding and changing habits. One thing that has worked successfully in Swindon is that the majority of community libraries have switched ownership to parish councils, which have more flexibility in their budgets. That has allowed opening hours to expand and has created a greater emphasis on community events to increase footfall and engagement beyond the community. They utilise volunteers to deliver books to those who cannot easily get to the library. We have seen a renaissance in usage and book issuing in those libraries. My good friend Michelle Dutton did not follow my path as a failed school librarian: she became a professional librarian. She is passionate about emphasising the importance of matching opening hours to those of busy families, particularly in the evenings or weekends, linking them around events to give families a reason to go there.

My final point is about having an emphasis on new parents. Through the National Literacy Trust, book packs are handed out by health visitors. That is really important, but we should build on it to emphasise what we all understand, so that all parents know that supporting their children to benefit from the enjoyment of reading genuinely opens the door to future career opportunities.

15:18

[Sir Gavin Williamson (South Staffordshire) (Con)]

It is a pleasure to serve under your chairmanship, Sir Christopher. I congratulate my hon. Friend the Member for Rother Valley (Alexander Stafford) on securing the debate. As has been touched on, it is great that there is so much consensus and understanding among Members about the importance of promoting reading and the availability of books.

I echo the comments that have been made about my right hon. Friend the Minister, whose work promoting and ensuring the highest quality of teaching of reading, and the establishment and embedding of phonics within teaching in our schools, has been so vital. I cannot remember how many years he has been a Minister, but he is knocking up more than 10. During that time, he will have had an impact on children’s lives and their ability to read to the highest level. He has made a real difference to the lives of hundreds of thousands of children.

I will make a few short points, conscious as I am that the Minister and the shadow Minister want to speak. Twenty per cent of parents are buying fewer books today than they did just a few years ago. We are seeing real challenges. As other Members have touched on, it is vital that children have books in their home. Having books available in the home encourages the innate curiosity that every child has to pick up a book and explore it. A new world is opened up to them as they go through its pages.

[Dean Russell]

May I thank hon. Members for the kind mentions of my books during this debate? On the point about opening up new worlds, we have not yet spoken today about the role of comic books. I am a big sci-fi, comic book and graphic novel fan. At the weekend, I popped into Lewis B Comics & Collectables in Watford—not for a visit, but to see what it had on offer. Does my right hon. Friend agree that we must not be snobby about the types of books that will get kids—and adults—to read? Graphic novels and comic books have a really important role to play.

[Sir Gavin Williamson]

I certainly agree. Getting a child reading anything is an incredibly important start. It fires their imagination, whether it is a comic book or one of the books of my hon. Friend, who is going to pass me a list of all the titles to read out later so we can give them a plug—they are available at all great local bookstores, and probably on Amazon as well. It is about inspiring children. Opening a book opens different worlds. Getting children to lose themselves in the imagination and excitement of a book is one of the most precious gifts we can give.

The sad reality is that children in some of the poorest homes have the least access to books. That is of great concern to all Members in this House. What more can we do to make sure that those homes do not lack books? I pay tribute to BookTrust and its amazing Bookstart scheme.

One area of concern is families where mum and dad cannot read. How do we help those children, at the very earliest stages of life, to discover the joy of books? It has been said to me many times that even if mum and dad cannot read, if they just go through the books, explain the pictures, point things out and tell the story, even if they are making it up with the aid of the pictures, that is an important part of the child’s learning. Perhaps we should look at how health visitors can encourage parents who cannot read to understand the importance and value of doing that with their children. It is critical to get books into the home and have that early intervention, because we all know that if children are able to read and to discover the joy of books, it gives them the best opportunities later in life.

Children face real challenges. Of parents surveyed by the National Literacy Trust, 41% said that there was no quiet space for their children to read at home, and 92% thought that it was important for children to have access to a good library. In South Staffordshire, we are very lucky to have a broad spread of libraries. Whether they are in Great Wyrley, Cheslyn Hay, Brewood, Kinver, Perton, Codsall or Wombourne, people can easily access a local community library. I would like to take the opportunity to thank the many volunteers who go into libraries to ensure that service is available, along with the professional services provided by librarians. Many community libraries, such as those at Brewood, Kinver, Great Wyrley and Cheslyn Hay, are manned entirely by volunteers. Visitors get not only a book, but a cup of coffee, which is a welcome added service. Such libraries rely on volunteers to keep them open and provide that vital service to so many.

Some 73% of pupils who have access to a library attain higher literacy scores than those who do not, which shows the importance of libraries in our communities. Comments have already been made about the importance of having library facilities in schools, but we also want to ensure that there is somewhere warm, comforting and enjoyable for young people, and people of all ages, to go in their community in the evening and at the weekend. For example, Perton Library has done an amazing job of bringing the written word to life, as well as encouraging people through science fairs and a spring watch project. It has brought in partners, including archaeological societies and environmental groups, providing broader-based learning alongside learning from books.

Before I conclude, I will touch on a few brief additional matters. The importance of having a library in every single school needs heavier emphasis. The Minister and I probably agree that there is a certain nervousness about ringfencing budgets because of the problems that that can cause. However, with his longevity of service he well knows that there are many ways in which schools can be gently persuaded, either through guidance or through working with Ofsted, of the importance of having a library. We need to place a heavy emphasis on the importance of having a library in all schools, not just secondary schools: we want the passion and enjoyment of reading books to come at primary school age.

There must be a real emphasis on local authorities, although I appreciate that is not within the Minister’s remit. Closing a library may seem an easy choice, but it is always the wrong choice. I ask the Minister to ensure, in the robust, vigorous and authoritative way he does so well, that his fellow Ministers in the Department for Culture, Media and Sport, which I believe leads on libraries, and in the Department for Levelling Up, Housing and Communities make it clear to local authorities that libraries must be protected. Libraries deliver so much to every single child, as well as to people of all ages. For people in later life who may not have the reading skills that we would wish them to have got at an earlier stage, community libraries are so vital in enabling access to great and brilliant literature.

15:28

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

I begin, as others have, by thanking the hon. Member for Rother Valley (Alexander Stafford) for bringing forward this debate. I stand to speak as a former English teacher of 23 years, an avid reader and somebody whose life story has been shaped and transformed by the power of reading.

Through a difficult childhood, books were my solace and comfort, and I do not think it is overstating the case to say that books were my life support. No matter what was going on around me as a child, while I was growing up, books gave me an escape, without which I really do not know what would have become of me. Every child should have that escape, comfort and access to building literacy, which cannot be just about what happens in a classroom. The ability to read the words on a page is one thing, but it is another thing entirely to understand how language works, how meaning is created and how language can be used to persuade and manipulate. That can be taught, but ultimately it is inherently linked to someone’s experience of reading and the written word; that is the true meaning of literacy and we should want it for all our citizens.

I have discussed this subject with Members from across the House and I confess that I have never understood why folk in England, and MPs in this House from England, do not trumpet more loudly their wonderful literary heritage and canon, as it is hugely impressive; I do not understand why they do not make much more of Dickens, Trollope, Shakespeare and Collins, because I certainly would if I were in their shoes. As an English teacher, I always made sure that every class, from the first year to the sixth year, regardless of ability level, had the opportunity to enjoy a Shakespeare play—I persuaded them that it was an opportunity and they really did not have any choice. I understand that Shakespeare plays were written to be performed, but they are also extremely important in terms of the written word.

I grew up in a home without books, as too many children still do, as we have heard. However, I was lucky, because I was the youngest of eight children and I was often able to top up the three books I was permitted to check out of the local library at a time, as I was able to use the library tickets of all my older siblings. I could also use my primary school library, in which I took such an interest that my primary 7 teacher used to consult me about what books he should buy with the library school budget allocation.

Many other children are not so lucky as I was. It almost goes without saying that children who do not have access to books, are not exposed to them and are not provided with the opportunity and encouragement to cultivate the habit of reading will not reach their academic potential. The evidence on that is stark and unequivocal: reading improves outcomes for children across the board. As a former English teacher, I know that when the new S1—secondary 1—intake arrives, the first piece of short writing we ask them to do immediately tells us which children read and which do not. That is immediately apparent in their level and sophistication of expression, and it is very clear to see. There is no downside to encouraging and supporting children to read—unless we count the numerous rows I got into at primary and secondary school for hiding in the changing rooms during PE so that I could finish the chapter of whatever book I happened to be reading.

Many Members have talked today about the importance of supporting literacy in the very young, which is self-evidently the case. In Scotland, our Scottish Book Trust delivers two universal book gifting programmes funded by the Scottish Government, Bookbug and the “Read, Write, Count” initiative, which supports families in playing, reading and learning with their young children. It helps to instil an early love of reading. Through that programme, all children in Scotland receive six free bags of high-quality books between birth and the age of eight, with 16 books across the six bags, and an additional two books gifted to expectant parents in the baby box. It is thought that Scotland has the largest universal book gifting offer in the world. Given my lifelong relationship with books, I am deeply proud of that and the transformative potential it provides for children. However, across the UK as a whole, 19% of five to eight-year-olds do not own a single book, according to the National Literacy Trust. That is deeply sad.

In Scotland, millions of pounds have been provided to support our libraries through the Scottish library fund and other such schemes. I wish there was more funding—I genuinely do—but what is important is the commitment and recognition of the value of access to books and promoting reading. That has been established as an important principle. We can build further on that, and we certainly should. I also appreciate the comment from the hon. Member for Strangford (Jim Shannon) about Dolly Parton, which we all applaud.

Cultivating the habit of reading is important. Over the years, people have come up with various ways to do that, but I am quite old-fashioned. I do not think we need to rely on children dressing up as their favourite character and such, although I know they take great pleasure from that. If they want to, that is fine; it does not hurt anybody, but a love of reading need not require such dramatic pursuits. Ultimately, it is learned through appreciating the calm, quiet and powerful joy that is found in the gentle unfolding of an exciting narrative captured between the covers of a book, or on a Kindle, or even—as Members have said—through an audiobook, in a way that cannot be replicated through the passive, although enjoyable, activity of watching a film.

As has been said, our public libraries are a real prize in our communities. Aside from the opportunities they provide for social interaction, warm spaces and digital inclusion, which are extremely important, public libraries are integral to our quest to raise attainment. In order to close or narrow the attainment gap, one important thing we need to do is provide access to books for not just children, but their parents. We need to bring parents with us on that journey to narrow the attainment gap. Some of them may have grown up with no access to books, and may not have cultivated or discovered the powerful joy that reading for pure pleasure can bring.

We need to create a wider culture of reading. If we want parents to read to and with their children—as I say, my 23 years as an English teacher tell me that even at the age of 17 or 18, young people love being read to—we need to get parents reading. We need reading as an enjoyable pastime to become normalised in households. Very often, it is not, and we cannot tackle that issue properly or seriously without access to public libraries. In many households, it is now unusual for the TV or the music to be switched off, and for people to sit and spend an hour either reading in the same room or reading the same book together. It is frankly uncommon—I will put it no stronger than that, but it is less common than it ought to be. The role of teachers and school libraries is of course vital, but public libraries allow children and parents to actively and literally discover and explore the pleasure of books together.

Access to books matters, but instilling a love of reading also matters. As an English teacher, I often found that children were very happy to respond to the encouragement to read, and to read independently. However, around the age of 14 or so, the cultivation of a reading habit seemed to plateau or fall away altogether. There are a number of things that schools, teachers and English departments can do to tackle that, which I do not have time to tackle now, but we need to support and encourage children, and model to them the fact that reading is a joyful way to spend our time. It can be an escape, a solace and, importantly, a companion to us throughout our entire lives.

We should continue to ensure that there are the best, most accessible and richest opportunities to read, but we need to take parents with us. We need to reach out to the parents we have not yet taken with us. In a digital age, reading and literacy has never been more important. Coincidentally, the digital age is also a very important tool to support reading and get our communities between the covers of a book.

15:40

[Stephen Morgan (Portsmouth South) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Christopher. I thank the hon. Member for Rother Valley (Alexander Stafford) for bringing forward this important debate. Books are the cornerstone of our education system and how we learn, so it is a pleasure to speak on how we can improve access to books, close the literacy gap and ensure that every child has the opportunity to thrive.

I would like to open my remarks by paying tribute to all English teachers, librarians and literacy charities across the country, from Dolly Parton’s Imagination Library to the Pompey Pirates in my constituency. Behind school libraries and bookshelves is the hard work by teachers, teaching assistants, librarians, parents and volunteers to support child development and literacy attainment. The hon. Member made some helpful points on the value of reading, owning books and the importance of storytelling. I echo the remarks about his advocacy for reading. We have heard a number of interventions and speeches on investing in catch-up, the variety of forms books can take, the value of reading to children, and the importance of independent bookshops and libraries in our communities. I thank all Members for their good-spirited contributions to the debate.

As we heard, books are fundamental to a child’s journey in learning how to read and write, but they do not serve that purpose alone. Books open the door to our entire education system: to a world of learning from geography, history, English, physics, maths, music and beyond. Books enrich all aspects of our lives. They educate us, motivate us and inspire us. They open new worlds of exploration and imagination.

For many of us, it is hard to imagine a world without books. It is hard to imagine how we would function without the ability to read or write. Unfortunately, the National Literacy Trust has found that one in four children are still leaving primary school unable to read at their expected level. It also found that one in six adults in England have literacy levels below level 1, considered to be very poor literacy skills. It has been shown that lower literacy can go on to impact every aspect of an individual’s life, with negative impacts on personal relationships, wellbeing and further education, as well as a greater risk of unemployment or being in low-paid work. It is a skill as crucial as understanding road signs or price labels, dosage instructions on medicine, filling out a form or making sense of a bus or train timetable.

Unfortunately, in the past decade, it has become increasingly difficult to access books. Britain has faced the closure of almost 800 public libraries since 2010, a decade that saw local authority finances slashed. We know that in schools when budgets get tight, library resources are often among the first to get cut. Recent research by Penguin Books UK shows that one in eight schools in England do not have a library or dedicated reading space. That jumps to one in four schools in the most deprived communities in our country. Teachers up and down the country are using their own money to buy books. The problem is even bigger in primary schools, where one in seven state primary schools do not have a dedicated library or library space. That translates to 750,000 children in the UK who do not have access to books to read through a school library at a crucial age when children need to learn to read, a point made by the hon. Member for North Swindon (Justin Tomlinson).

It is no wonder that schools are being forced to make difficult choices when their real-terms funding still remains below 2010 levels. Yet again, it is the most vulnerable who are paying the price for this Government’s decisions. While better-off families may be able to provide home-purchased books, those from poorer backgrounds do not have the same luxury. One in three parents who are struggling financially because of the cost of living crisis have said that they are buying fewer books for their children as a result. Experiences of financial strain have a direct impact on literacy, with families not being able to afford books and having less time and energy to spend on reading. Two in five disadvantaged children leave primary school unable to read at the expected level.

The Government claim that literacy is a priority. Their levelling-up White Paper

“set a new national mission to ensure that 90% of children leaving primary school in England are reaching the expected standard in reading, writing, and maths by 2030.”

Yet the share of pupils leaving primary school meeting literacy and numeracy benchmarks fell from 65% in 2019 to 59% in 2020. The Government’s target is a far cry from reality. Children are moving backwards in their achievements, and the attainment gap is growing.

The problem is compounded by crisis in the recruitment and retention of teachers and the lack of budget available for specialist school librarians. Last year, more teachers left our schools than joined initial teacher training courses. The Government fell 16% short of their target for English teachers, and this year, the National Foundation for Educational Research predicts that the Government will fall 30% short of their targets.

[Matt Rodda]

My hon. Friend is making an excellent point. A headteacher in my constituency, which may be typical of many parts of the south-east of England, recently told me that she had one applicant for a job. Unfortunately, that is the level of difficulty that our schools face. I am grateful to my hon. Friend for making that point, and I look forward to the Minister’s response and to hearing more about how the Government will tackle this severe recruitment and retention crisis.

[Stephen Morgan]

My hon. Friend is a tireless champion for schools in his constituency, and we absolutely have a teacher recruitment and retention crisis in our country. We need to look very boldly at some of the solutions to address that crisis.

The first step to addressing the problem is to ensure that children are taught how to read and write properly. That fundamental skill must be given the attention it deserves, which means schools having the necessary resources to do so, with children being taught by experts, not by overstretched teachers covering for their colleagues. That is why Labour has committed to ensuring that every pupil is taught by specialist teachers in each subject, including English. We will do that by recruiting thousands of new teachers across the country, making sure that schools are not understaffed, that English classes are not being taught by cover staff or other subject specialists, and that teachers are not burned out by doing multiple people’s jobs. Once in our schools, we will also support teachers with an entitlement to ongoing training.

We want every young person to have the opportunity to succeed academically and in life. As has been outlined today, central to that is developing their reading and writing skills, which open the door to our education system and to a world of further learning. Their ability to read and write is a bridge to the ability to explore, create, innovate, imagine and thrive.

As we have heard, all children deserve to have their lives enriched by books, for their health, for their future and their future life chances, and for their enjoyment. The importance of access to books to literacy levels is simply too great to be met with empty targets and empty rhetoric. In his response, I therefore hope that the Minister will outline what his Department is doing to improve children’s access to books, to decrease the number of children leaving primary school without the required standard of literacy, to recruit its target number of English teachers, and to retain the brilliant English teachers already in the profession.

I look forward to hearing the Minister’s remarks, and I restate my thanks to all Members who have contributed to this debate.

15:49

[The Minister for Schools (Nick Gibb)]

It is a pleasure to serve under your chairmanship yet again, Sir Christopher. The subject of the debate is of enormous importance, and I pay tribute to my hon. Friend the Member for Rother Valley (Alexander Stafford) for securing it, for the way in which he introduced it, and for his work as an active champion for literacy in his constituency.

I totally agree with the hon. Members for Strangford (Jim Shannon) and for North Ayrshire and Arran (Patricia Gibson) about the importance of children of all ages being read to, instilling in them a love of reading and improving their vocabularies. I look forward to visiting the constituency of my right hon. Friend the Member for Witham (Priti Patel) later this year to see “Get Witham Reading”. I pay tribute to her passion in ensuring that children in her constituency read well and have access to books. I also pay tribute to my hon. Friend the Member for North Swindon (Justin Tomlinson) for his commitment to high-quality education in his constituency, about which we talk regularly—not just general education, but reading in particular.

My hon. Friend the Member for Rother Valley says that we should improve children’s access to books. I wholeheartedly agree. That is why we have strengthened the national curriculum to focus on developing reading, and putting phonics at its heart, to ensure that children can read. Reading is the principal way to acquire knowledge, and the national curriculum encourages pupils to develop the habit of reading widely and often, both for pleasure and for information, and to develop a love of reading.

The texts that young people read play a significant part in their wider development, broadening their horizons and introducing new ideas and perspectives. As a child, I loved C.S. Lewis, C.S. Forester, E. Nesbit and L.P. Hartley, and today, I am ploughing my way through the 97 books that have won a Pulitzer since the introduction of the fiction prize in 1919. Charities such as World Book Day and the National Literacy Trust work tirelessly to raise the profile of reading for pleasure in our country, and for that I thank them and recognise their enormous contribution.

The Government are committed to continue raising reading standards. We place great focus on ensuring that early reading is taught well from the very beginning of a child’s time at school. Following that focus, and the commitment of hundreds of thousands of teachers up and down the country, England came fourth of 43 countries that tested children of the same age in the 2021 progress in international reading literacy study. The results were published only last month, and I am grateful to all the primary schoolteachers and teaching assistants whose commitment to reading and embracing the phonics approach introduced by the Government made that possible. Indeed, the strongest predictor of PIRLS performance was the year 1 phonics screening checkmark, with higher marks predicting higher scores. England’s average PIRLS score of 558 was significantly above the international median of 520 and the European median of 524, and significantly higher than all other participants testing at the same age, with the exception of Singapore, Hong Kong and Russia. There were very high PIRLS scores in Northern Ireland, and I pay tribute to teachers there for their achievement in the study.

That success in PIRLS follows the Government’s greater focus on reading in the primary curriculum, with a particular focus on phonics. It also follows reforms such as the English Hubs programme, the introduction of a phonics screening check in 2012, the reading framework, and the leading literacy national professional qualifications for teachers. My hon. Friend the Member for Rother Valley mentioned the importance of children having books at home, and the correlation between book ownership and educational success. In the 2021 PIRLS, overall performance was strongly associated with the number of books that pupils had in their homes. The average score of pupils in England with fewer than 10 books in their home was 507 points, compared with an average score of 591 points—down from 598 in 2016—for those with more than 200 books at home.

The English hubs programme is designed to spread best practice in how schools teach their pupils to read. So far, it has supported 1,600 schools intensively, with a focus on supporting children who are making the slowest progress in reading, many of whom come from disadvantaged backgrounds. That includes schools in Rother Valley, which are supported by two of our English hubs: Learners First and St Wilfrid’s. Between them, those two hubs have supported more than 100 other schools in the area. Schools supported intensively as partner schools by English hubs outperform non-partner schools by about seven percentage points when comparing the change in the year 1 phonics screening check. We have also introduced the reading framework, which is guidance for schools that was first published in 2021. Over 90% of schools have read the framework, which provides guidance to schools about how to improve the teaching of reading.

My hon. Friend also raised his concerns about provision for children with special educational needs and disabilities, particularly children who have chronic fatigue syndrome or Addison’s disease and who suffer from migraines. The next reading framework will include guidance on supporting children who are struggling to read, including those with special educational needs, and we regularly speak to experts, including SEND specialists, specialist schools and English hubs, about the way in which the Department can support teachers to ensure that children with dyslexia and other learning difficulties can progress well in their reading and meet the expectations by the time they leave primary school.

[Patricia Gibson]

Will the Minister give way?

[Nick Gibb]

If the hon. Lady will forgive me, I will not, because there are only four minutes left in the debate.

The hon. Member for Strangford raised the important issue of children with visual impairment, and I will ask my officials to engage with the RNIB about the most effective way of harnessing the power of digital media to improve literacy, including through the use of audio books.

The Department also recognises the vital importance of the teaching profession and is committed to offering the very best professional development. As part of our long-term education recovery plan, we announced £184 million of funding to deliver 150,000 fully funded training scholarships for national professional qualifications by the end of 2024. To incentivise small schools to participate, the targeted support fund provides an additional grant for every teacher who participates in the national professional qualifications in the next year. We also have a national professional qualification for leading literacy, which was launched in October last year, to train existing teachers to become literacy experts who will drive up standards in the teaching of reading in their schools and improve outcomes for every child.

The Government believe that all pupils deserve to be taught a knowledge-rich curriculum that promotes extensive reading both in and out of school. The national curriculum promotes reading for pleasure, and evidence shows that that is more important for children’s educational development than, for example, their parents’ level of education. I agree with my right hon. Friend the Member for South Staffordshire (Sir Gavin Williamson) about the importance of libraries in increasing children’s access to books and promoting reading for pleasure, whether in schools or through public libraries.

Libraries are particularly important in ensuring children have access to books during the current difficulties surrounding the cost of living. A national literacy survey conducted in December last year, to which my hon. Friend the Member for Rother Valley referred, reported that nearly 30% of parents stated they were borrowing more children’s books from libraries and that a quarter said they were asking their children to borrow more books from school libraries. Of course, it is for individual schools to decide how best to provide and maintain a library service, which is something to which my right hon. Friend the Member for South Staffordshire alluded. I enjoyed working with him at the Department for Education for a few years; we worked very well together, and I pay tribute to him for his time at the Department for Education. Many headteachers recognise the important role that school libraries can play in improving literacy by ensuring that suitable library facilities are provided.

There are several schemes that look to improve reading for pleasure and children’s access to books in school and public libraries. First, the Reading Agency’s summer reading challenge, to which hon. Members referred, is the biggest reading-for-pleasure programme for primary school-aged children. Each year the challenge motivates over 700,000 children of all abilities to read for enjoyment over the summer holidays. I also highlight the National Literacy Trust’s primary school library alliance partnership, which aims to bring partners together to transform 1,000 primary school libraries by 2025, providing them with books, training and support. Partners include World of Stories, the Marcus Rashford Book Club and “Raise a Reader” Oxfordshire. The partnership reported in November last year—a year after launch—that it had worked with over 330 schools and reached over 120,000 children across the country.

The Department is committed to improving literacy for all pupils, because unless children learn to read, they cannot read to learn. Reading is an essential foundation of success in all subjects, and we are determined to drive progress still further in the years ahead.

15:59

[Alexander Stafford]

I thank everyone who took part in this important debate. There is clearly cross-party consensus on the importance of access to books, not just at school but in the home, whether that is being gifted books by libraries or charitable organisations—the Dollywood Foundation was mentioned by the hon. Member for Strangford (Jim Shannon)—or reading with parents, guardians and community groups.

Motion lapsed (Standing Order No. 10(6)).

Immigration Rules: Offshore Workers

Tuesday 6th June 2023 Westminster Hall

16:00

[Kenny MacAskill (East Lothian) (Alba)]

I beg to move,

That this House has considered the matter of immigration rules affecting offshore workers.

It is a pleasure to serve under your chairmanship, Sir Christopher. The “Saudi Arabia of wind” was how the right hon. Member for Uxbridge and South Ruislip (Boris Johnson) described the potential of the offshore wind sector—perhaps one of his few boasts with which I agreed. One new offshore wind farm alone, Berwick Bank in the Firth of Forth, off my constituency in East Lothian, would provide enough electricity to power more households than Scotland possesses. In energy-rich Scotland, however, folk find themselves fuel poor. That, though, is a separate debate.

The opportunities of offshore wind are much more than simply lower power costs for our people. They must encompass work for individuals and communities, especially where old industries are gone or are being scaled down. It should be a renewable energy revolution, creating new types of work and jobs for young people, as well as retraining those in sectors such as fossil fuels, where a transition is as necessary for our planet as it is for our country. A just transition has been promised, and that must be more than just a glib phrase.

There are almost 50,000 offshore oil and gas workers in the UK. As their work ceases—as it will, with only the pace of it subject to debate—there is a duty to provide for them. They have given so much in recent years, often in very trying and dangerous circumstances. Of course, it is not just in offshore wind that other opportunities will now arise; there may be opportunities in carbon capture and storage or hydrogen. There are skills gaps now and no doubt there will be in future years. It is right that there should be an immigration and visa system to provide for them. Our economy and our environment demand no less.

This debate is therefore not anti-immigration. Instead, it is anti-worker exploitation. Exploitative employers must not be allowed to undermine UK employment laws and import low-paid migrant labour as a matter of course, and on terms and conditions unacceptable on the UK mainland or even in the oil and gas sector. That would be an abuse of desperate people, and a shameful sell-out of the rights of our own workers.

It is not alarmist to warn of the dangers. We have already seen the hollowing out of the UK merchant marine sector over recent years: 85% of seafarers in the UK shipping industry are non-UK nationals. More recently, we have seen the abomination of the P&O scandal—a disgrace acknowledged by this Government. This is not “stop the boats”, but save the Scottish and UK seafarers, and those classified in that category. It has already been happening in the offshore sector.

Next to the Berwick Bank offshore wind field in the Firth of Forth lies the Neart na Gaoithe field. Compounding the insult of turbines not being constructed locally was the injury to UK and Scottish seafarers who were laid off and replaced by cheap south Asian labour. Many had moved to work there from oil and gas, as a constituent of mine did, seeing it as an opportunity to be closer to home.

There is a grave risk that what happened in Neart na Gaoithe will be replicated elsewhere. UK seafarers and other offshore wind sector workers are being supplanted by foreign labour. I do not mean essential skills that can only be obtained on a global basis and are required for development and operation. Instead, it is foreign labour, exploited and working for rates of pay and under terms and conditions that would be unacceptable on the UK mainland or in the oil and gas sector.

The Neart na Gaoithe debacle came about as a result of the extension of the offshore workers exemption, which was initially the subject matter of the debate. That loophole has thankfully since ended, though too late to provide any satisfaction for those who lost their jobs. It is interesting to note, though, that RenewableUK wrote to the then immigration Minister, the hon. Member for Torbay (Kevin Foster), in August 2021 suggesting ending the waiver for migrant labour in the sector. It also stated that UK workers were losing out on contracts to construct

“UK offshore wind farms to workers from as far afield as Asia, where regulations are less robust, thus creating an unlevel playing field for British firms.”

The letter went on to narrate how UK jobs were lost as a result of a subcontractor.

That shows that immigration restrictions are not damaging to the interests of responsible UK employers or indeed any other nation’s responsible employers; they are damaging only to unscrupulous ones from anywhere. That warning was sadly ignored. A refusal to disclose the number of jobs in construction and maintenance of offshore wind farms filled by migrant labour under the initial concession compounded that problem.

Now, the 2017 offshore wind workers immigration rules concession has been replaced with the Immigration (Offshore Worker Notification and Exemption from Control (Amendment)) Regulations 2023. The regulations, though, leave a gap. It is one thing that foreign seafarers simply passing through UK waters are not covered—that is understandable and quite appropriate. However, the definition of foreign seafarers

“passing through UK waters from non-UK waters to a place in the UK or vice versa”

leaves open the opportunity for exploitation in the sector. Will the Minister undertake to address that loophole?

Moreover, as well as the numbers employed in the sector growing, the nature of the work will also develop and change. New technology such as floating offshore wind turbines allow for expansion far beyond the limits of territorial waters. Ships and support vessels will be operating further out at sea and, rather than them being serviced from onshore ports, there will be flotels, offshore living platforms and ships moored nearby for workers to live and work on. The expansion beyond UK territorial waters—the 12-mile limit that applies from the coastal shore—will also bring issues that need addressed. The issue is less serious within territorial waters, though significant risks still apply. Let me explain.

Even with the ending of the offshore workers extension, it is not difficult for employers to recruit cheaper foreign labour—it is already happening with foreign labour in the UK on visas living onshore when not working offshore. Most worrying is the potential exploitation in the sector outwith territorial waters, where many of the new wind farms will be located: beyond the 12-mile limit, yet still within the 100-mile UK exclusive economic zone. Some working there will be seafarers. Others, though, will have other skills but may operate on ships or vessels for the sector. As things currently stand, they may find themselves classified in law as seafarers or considered to be operating under international maritime laws.

We already know that issues exist with health and safety legislation as the recent Valaris 121 tragedy confirmed. When a ship or platform is not attached to a turbine, it is not UK health and safety laws that apply but international maritime law. That absurdity has seen the loss of a UK seafarer’s life in an accident only 100 miles from Aberdeen under the jurisdiction of Liberia: a country on the west coast of Africa. That is not just wrong—it is perverse. Hopefully, though, coming discussions will address that.

However, as with health and safety legislation, so with employment legislation, whereby the national minimum wage does not apply for those operating outwith territorial waters yet still doing so within the UK’s exclusive economic zone. Of course, some responsible employers even apply the living wage across their supply chain, although monitoring and enforcement of it can be problematic. Surely, though, employment legislation that applies in the UK should extend to this sector? After all, steps were rightly taken to extend such protections to the oil and gas sector when it first took off.

As well as ensuring that existing UK workers’ rights are protected in the new sector, there needs to be action so that immigration laws apply to the sector. Recently published Government guidance to immigration staff on incoming labour to the UK only refers to “continental shelf workers”. As with the health and safety situation, there is a failure to provide for the new offshore wind sector. The definition of a continental shelf worker comes from the Petroleum Act 1998 and relates to those operating in the oil and gas sector. To be fair, when that legislation was written, the technology for offshore wind, let alone for floating offshore wind, had not even been thought about. As a result, there is no guidance that applies for immigration officials when labour is recruited for the offshore wind sector. That appears to be an oversight, even if there is an understandable reason for the failure.

However, it must be noted that section 87 of the Energy Act 2004 applies civil law to renewable energy installations. That specifically includes those outwith the 12-mile territorial limit and within the exclusive economic zone. No doubt that was done to protect the interests of the corporations involved in the offshore sector. They need to be able to litigate for damages, to enforce contracts, and to preserve their proprietorial and economic rights. I accept that recourse to UK courts and the imposition of UK laws is sensible and required. The rule of law is fundamental for commerce and trade. But the rule of law is equally necessary in civil society and for our citizens as much as for our corporations. Extending coverage of existing laws and providing recourse to courts should therefore apply to workers’ rights and safety, just as it does for economic development and corporate profits. Rights applied in the oil and gas sector must be replicated in the offshore wind sector, and agreements between trade unions and employers should similarly apply.

The danger is that in order to maximise profits unscrupulous employers will seek to import foreign labour, who will work under terms and conditions that we as a country would not tolerate, either on our land or in the oil and gas sector. Those working on ships or based in flotels or other vessels in the exclusive economic zone will be denied those rights. As things stand, employers will not even have to go through the relatively minor hoops and hurdles that apply for migrants working within the territorial limit.

As I said at the outset, this speech is not anti-immigration; Scotland requires new people. This speech is anti-exploitation of workers, protecting those entitled to a just transition and others who are simply seeking a start in the natural bounty that is off our shores. Also, though, it is about protecting workers from abroad who are so desperate for work that they are prepared to accept terms and conditions of employment that we already consider unacceptable on our land and in other sectors.

We must ensure that what happened in Neart na Gaoithe or with P&O, which was even worse, is not repeated. This issue is about the protection of workers in our growing offshore wind sector, whether they are from this country or from abroad but working here. There is ample opportunity to do both, because even after providing employment for all the current oil and gas workers, as well as creating new jobs for others of all ages, there will still be a need to bring in migrants to work. However, that should happen where skills are missing or labour is just not to be found. It should be about economic necessity, not the circumvention of hard-won and vital individual and collective rights. Equally, as we have heard from RenewableUK, this is about protecting responsible employers from those who are unscrupulous. The rights and laws that we have onshore, which have also operated in the oil and gas sector, must be extended to the offshore sector within and without territorial waters.

Will the Minister ensure that UK immigration rules applying to the offshore sector secure the protection of UK workers by basing this on specific need where skills shortages have been identified? Moreover, will he ensure that they are temporary regulations, and subject to regular oversight and transparency? Finally, will he require employers of migrant labour to adhere to the UK employment laws and the national minimum wage that we expect to be enforced on the UK mainland, on our islands, and in our oil and gas sector?

[Karl Turner (Kingston upon Hull East) (Lab)]

rose—

[Sir Christopher Chope (in the Chair)]

Before I call the hon. Gentleman, I need to know that both the mover of the motion and the Minister are happy that he should make a short speech. Is that the case?

[Kenny MacAskill]

indicated assent.

[The Minister for Crime, Policing and Fire (Chris Philp)]

indicated assent.

[Sir Christopher Chope (in the Chair)]

Thank you. I call Karl Turner.

16:15

[Karl Turner (Kingston upon Hull East) (Lab)]

Thank you very much, Sir Christopher. I thank the hon. Member for East Lothian (Kenny MacAskill) not just for allowing me the opportunity to speak briefly, but for securing this incredibly important debate.

The hon. Gentleman mentioned the scandal of P&O Ferries sacking 800 British seafarers a little over a year ago. The anniversary of that terrible event in British maritime history and industrial relations was on 17 March. That was the 12-month anniversary of 800 people being sacked and thrown on the scrapheap over a Zoom call. It was utterly deplorable. I am afraid that the Seafarers’ Wages Act 2023 that the Government brought forward with a view to sorting out that travesty simply does not cut the mustard. The reality is that there is still a legislative lacuna and the Act that was brought forward to sort it out simply does not do the trick.

I mention the P&O issue because it is incredibly relevant to this. It is clear that we need a smarter immigration system, and we desperately need Government investment to retrain offshore workers. We also need investment from the private sector in the maritime industry, but the Government have to help. They have to put their hands in their pocket and put up some moneys to retrain people and skill them up to work in the offshore sector. Regrettably, they have not done that.

I have lost count of the number of times I have spoken with Immigration Ministers over recent years and they have assured me—privately, very often—that they intend to address the issue of continually extending the regulations to, in effect, allow foreign workers to come into this country, work in the offshore sector and, frankly, work for an awful lot less than they would be expected to earn if they were British seafarers.

I ask the Minister: what do we need? By the way, I thank him for allowing me to contribute briefly to the debate. What we need is sectoral collective bargaining in the offshore wind sector. That would prevent the undercutting of pay and conditions in this growing industry. There are huge opportunities for people who go to school in the constituency of the hon. Member for East Lothian and, indeed, in mine. Kids could look forward to prosperous, good careers working in the offshore sector, but we need such a collective bargaining agreement to make that happen.

By the way, I have been involved in this stuff for many years now, and any suggestion that this would be challenged and is impossible because the UN convention on the law of the sea would prevent such a collective bargaining agreement is just utter nonsense. That is simply not right. If the Minister is about to be briefed by civil servants saying, “Well, there’s a problem with that, because the UN convention on the law of the sea prevents such collective bargaining agreements”, that is simply not right. There is nothing in international law or, indeed, domestic law that says that that would be an issue. I pray that the Government get a grip on the situation. They should not continually extend the regulations to allow offshore workers to come in and do these jobs. I do not think that it is a problem—

[Sir Christopher Chope (in the Chair)]

Order. The hon. Gentleman is eating into valuable time. He is probably right that we should allow the Minister to respond to this debate now.

[Karl Turner]

I am very grateful to you, Sir Christopher. Very briefly, the Government need to do much more to address this issue. It has continued for long enough. They need to get a grip.

16:20

[The Minister for Crime, Policing and Fire (Chris Philp)]

It is a pleasure, as always, to serve under your chairmanship, Sir Christopher. I add my congratulations to the hon. Member for East Lothian (Kenny MacAskill) on successfully securing this afternoon’s debate.

I shall start by saying that I appear in place of the Minister for Immigration, my right hon. Friend the Member for Newark (Robert Jenrick), who, unfortunately, cannot be here this afternoon. He takes a close interest in this debate and will, I know, be reading it afterwards. Having that in mind, I hope that Members will forgive me if there are occasions when my detailed knowledge is not as acute as that of my right hon. Friend.

Let me address one or two of the points that the hon. Member for East Lothian made at the start of his speech about the United Kingdom’s aspirations around renewable energy and the progress that we have made in that area. Members will be aware that, back in 2012—just 11 years ago—43% of this country’s electricity generation was from coal-fired power stations, the most polluting form of power generation. Last year, it was just 1.5%, which is a fantastic reduction. If other countries emulated our example, things would be a lot better.

Last year, 48.5% of our electricity generation came from zero-carbon sources. In the first quarter of 2023, wind energy generated 32% of our electricity. It was the largest single contributor to electricity generation. All of us can be very proud of the enormous progress made by the United Kingdom in generating non-polluting forms of electricity, which means that we do not have to import gas or oil from sometimes unreliable countries. I am sure that the hon. Gentleman will join me in welcoming the phenomenal progress made by the United Kingdom.

Let me turn now to the topic of the debate, which is the immigration rules affecting offshore workers. I will be completely clear with Members that the immigration rules applying to those people working in our territorial waters are precisely the same now as those applying to people working on land. We made that expressly clear through section 43 of the Nationality and Borders Act 2022, which, I am glad to say, came into force in April—in my previous incarnation, I was the Minister for that Bill. Section 43 of the Act makes it absolutely clear that foreign nationals working in our territorial waters need our permission to do so—they need a visa in exactly the same way as foreign nationals working on our land do. That has been made absolutely clear now in legislation.

As the hon. Gentleman alluded to, there have in the past been particular exemptions for offshore wind farm workers. I know that he has been an extremely eloquent and I might even say persistent advocate on that point, and, as he said in his speech, that exemption was discontinued relatively recently. His representations over a period of months, or probably even years, have contributed to the thinking on that topic.

On the matter of skilled worker visas, which apply both on land and in our territorial waters, there are some fairly clear rules around salary thresholds, English language requirements and the level of skill that a worker must have. The Government are advised on that, of course, by the Migration Advisory Committee. It is fair to say that the immigration figures that came out a week or two ago were higher than the Government wished in a number of categories, including skilled workers. The Government’s policy is to try to ensure that jobs are filled first by United Kingdom residents. We have plenty of people here who are economically inactive—many are claiming benefits—and we would like to see them employed first in our economy, whether onshore or offshore. I assure hon. Members that we want more UK resident workers to fill vacancies, as opposed to immigration filling them, whether onshore or offshore. On that point, the hon. Member for East Lothian and His Majesty’s Government are as one. Of course, those rules—the salary thresholds and so on—are kept continuously under consideration.

I will first address the point about territorial waters, and then I will talk about the exclusive economic zone. Often, the people in those waters are transiting, working in those waters or stopping off at a UK port in the course of making a passage from one place to another, so the rules governing people in transiting ships of different kinds necessarily need more latitude than those we apply to people working on terra firma. That is why there is a little more latitude in those cases, but it is not without limitation, and we do not want it to be abused. If there are points of detail that need fine-tuning, the Minister for Immigration, my right hon. Friend the Member for Newark, is always willing to engage in dialogue to ensure the rules are not in any way being misused. I am not aware of any evidence that they are, but if the hon. Member for East Lothian has any points about the details of that, I am sure my right hon. Friend the Member for Newark will be happy to enter into dialogue about that.

The exclusive economic zone is the area of sea outside territorial waters—more than 12 miles from the high water mark, but less than 100 miles from the coast. International law confers upon it particular economic rights in relation to what is found under the sea—for example, oil in the North sea—but it does not confer a power of sovereignty over what happens on the surface. That therefore severely limits—indeed, largely excludes—our ability to impose economic or labour market regulation on activity in the exclusive economic zone outside territorial waters.

A point was made about sectoral collective bargaining. I suspect that falls under the policy ambit of another Department—probably the Department for Business and Trade—so I do not wish to trespass on its territory, save to say that, regardless of the technicalities in international law, the Government are not generally huge fans of imposing collective bargaining on particular bits of industry. We much prefer individual employers to offer terms that are attractive to their employees. Of course, workforces are free to unionise if they wish to do so, but imposing sectoral collective bargaining is reminiscent of the 1970s. I am not sure the Government would wish to go in that direction, but I note the comments of the hon. Member for Kingston upon Hull East (Karl Turner) in that regard.

I hope I have addressed the points that have been raised. I congratulate the hon. Member for East Lothian once again, not just on securing this debate, but on his representations on ending the exemption in relation to offshore windfarm working. They have been not only listened to but acted upon.

Question put and agreed to.

Net Zero: 2050 Target

Tuesday 6th June 2023 Westminster Hall

11:01

[Kwasi Kwarteng (Spelthorne) (Con)]

I beg to move,

That this House has considered Government policy on reaching Net Zero by 2050.

It is always good to see you in the Chair, Sir Christopher. This is the second time in about seven years that I have been able to introduce a Back-Bench debate, so I am very grateful for the opportunity.

I am pleased to be able to say that the net zero agenda—the energy transition—enjoys wider support across the House than practically any other area of policy. Yes, there are sceptics on both sides of the House, but it is extraordinary how widely shared the ambitions for net zero and decarbonisation are. I am grateful to organisations in my constituency and to my constituents. I thank Talking Tree, whose climate emergency centre has promoted decarbonisation in my constituency, and my constituent Hettie Quirke, who has raised these issues with me in constituency surgeries and provided me with my inspiration, or certainly my motivation, for requesting the debate.

This is a matter of great interest to me personally. I was fortunate to be appointed Energy Minister, the post that my right hon. Friend the Minister now ably fills, in July 2019, only a few weeks after we as a Government had passed the net zero Bill and enshrined the 2050 net zero target in law. That target was not simply plucked out of thin air. It is based on a scientific assessment of what we need to do as a global community to keep average temperature increases on this planet below 1.5° compared with 1990.

[Caroline Lucas (Brighton, Pavilion) (Green)]

Does the right hon. Gentleman recognise that at the time when the net zero by 2050 target was agreed, so was the principle of common but differentiated responsibilities? That means that countries such as the UK that can go further and faster must do that, so we should be looking at something much closer to real zero as soon as possible after 2030, not net zero by 2050.

[Kwasi Kwarteng]

As the hon. Lady well knows, she and I have very different views on this. I think that the Government have to carry the population with them, and it was interesting to hear what the unions were saying about oil and gas earlier this week. I would like to be able to press a button and say that we can get to absolute zero by 2030, but I do not think that is possible given the technological constraints and the financial and fiscal pressures. I do not think it is attainable, which is why I am happy to push the target of net zero by 2050.

I want to talk about our ability to reach that target. The hon. Lady is right that we could and should always try to do more, but we are constrained not only by technology but by fiscal necessities and, I might add, by what is going on in the rest of the world. The UK represents only 1% of global GDP, but we are an example and a leader, and we have to be able persuade partners across the G7 and the G20 and particularly in the developing world. As she will appreciate, that is not always easy.

[Jim Shannon (Strangford) (DUP)]

First, I commend the right hon. Gentleman for raising an important subject that we will all have to acknowledge and be involved with. It is clear that to achieve this ambitious goal, we will need more dedicated funding—I hate to say that, but it is the truth. The establishment of the net zero innovation portfolio is a good indication of the Government’s priority, but does he agree that enhanced funding must follow, and must be distributed to all regions, including to Northern Ireland, Scotland and Wales through Barnett consequentials?

[Kwasi Kwarteng]

I commend the hon. Gentleman for making that point, because he knows better than anybody how important Northern Ireland is to the transition. There are some great hydrogen businesses there, in particular. As Secretary of State for Business, Energy and Industrial Strategy I was privileged to visit Queen’s University Belfast, a world-leading academic institution in its focus on new technologies—not only energy technologies but cyber-security technologies and others. I am pleased that he has contributed so ably to this debate, as he always does.

I want to set out a few areas in which we have had successes, and then point out others where we have perhaps found the terrain heavier going and where there have been greater challenges. As I look at British energy policy, I see that some things are going very well and others could be improved.

First, as was mentioned in the previous debate, the biggest success in the net-zero space since I have been in the House has been power generation, including electricity and the grid. Even as late as 2012, 40% of electricity, such as the lights and everything we see around us, was derived essentially from burning coal, using a 19th century technology. Today, that figure is 1.5%. Across 11 years, we have essentially taken coal off the generating grid, which is a huge achievement. Many of us in this room will remember how important coal has been to the political and economic debate in this country. As we were growing up, there was never a day when we did not read about coal strikes, or industry-related issues around coal.

[Richard Foord (Tiverton and Honiton) (LD)]

Will the right hon. Gentleman give way?

[Kwasi Kwarteng]

I warn other Members that I will have to make progress, but I am happy to take this intervention.

[Richard Foord]

I am very grateful to the right hon. Member. On the point about comparing today with 2012, the UK’s draughty houses make up 14% of the UK’s carbon emissions. In 2012, we were insulating 2.3 million houses every year, whereas now we are insulating fewer than 100,000. Does the right hon. Member accept that the Government would have saved taxpayers millions of pounds on the energy price guarantee if they had only kept insulating homes at the rate they were in 2015?

[Kwasi Kwarteng]

Of course, that would have been at great cost, and it would have been brought forward. I do not know what the effect of Putin’s invasion of Ukraine or the sudden spike in gas prices at the end of 2021 would have been in that instance. The hon. Gentleman is right to notice that. If he permits me—I know Members are always enthusiastic to jump in—the insulation of homes and the decarbonisation of domestic heating are issues I will address squarely later in my speech.

Decarbonising power generation has been a relative success. Offshore wind installation has been hugely successful. The target of 50 GW by 2030 is hugely ambitious. The fact that we have already installed 13 GW or thereabouts is hugely significant. No other country, apart from China, has our capacity in offshore wind. As the hon. Member for Tiverton and Honiton (Richard Foord) observed, there are areas where we could do a lot better.

It has been very difficult to land a scheme than can effectively decarbonise domestic heating. Some 90% of the roughly 30 million homes in the United Kingdom rely on burning fossil fuels for heating: broadly 85% gas, and 5% oil. For that reason, it was always obvious to me that one of the quickest and easiest ways we can decarbonise domestic heating is through research and driving hydrogen. Hydrogen can be a substitute for natural gas. We obviously need to do that in a safe way—[Interruption.] I will give way one more time, but I need to finish the speech.

[Mr Jonathan Lord (Woking) (Con)]

I am grateful to my right hon. Friend for giving way. Will he also touch on nuclear? That is an area where we have not made as much progress over recent years as we could or should have done. It is effectively carbon efficient, as well.

[Kwasi Kwarteng]

My hon. Friend will remember my three years as a Minister in the Department for Business, Energy and Industrial Strategy. I was always a passionate advocate for nuclear, because one of the first things I was made aware of was that we need a balanced power generation system with lots of different technologies. In energy, there is no silver bullet, as I am sure my hon. Friend appreciates. We have to rely on a range of technologies in order to provide resilience to the system. Three metrics of any energy system are the “SAS” of security, affordability and sustainability. Those are the three watchwords I recall when I consider this important subject.

As far as I am concerned, and certainly as far as the Government are concerned, unless they have changed their policy in the past few months—this was the case when I was in government—nuclear has to be part of the answer. There is a debate to be had as to what sort of nuclear we need, be it small modular reactors or the large-scale approach. Our view until recently has been that we need a mix of both. I believe that is still the Government’s position, but the Minister can answer on that.

I wish to touch broadly on a couple of areas where, supportive as I am of the Government, they need to be wary and deliberate in their approach. Taxes have been increased, with the windfall taxes and the electricity generator levy, or whatever one wants to call them. I fully understand the political need for them, but we should not be discouraging investment in key technologies. The Government should examine the capital allowance regime and ensure there is more incentive to invest in decarbonisation technologies, not less.

One issue that has bedevilled our power generation system is the grid. I cannot see any colleagues from Norfolk and the east coast, but one issue that they have relates to the connectors, the landing stations and the substations for electricity generated by offshore wind in the North sea. We need to see how we can more intelligently and efficiently create an offshore network that can land this electricity in one point. I would like more Government engagement on that; it has been considerable but the point is important.

I realise that I am running out of time, because others wish to take part in the debate, but I wish to mention buildings, which were touched on by the hon. Member for Tiverton and Honiton. This has been the most difficult nut to crack in the whole decarbonisation space, as we see when we look at various other sectors. I have mentioned the power generation sector, where we have decreased considerably our dependence on fossil fuels, gas burning and coal burning. In the transport sector, electric vehicles have really taken off in the UK. We need more take-up of them, but the transport sector is an area where there has been success. I saw my first EV in Israel 10 years ago, in 2013, at a time when we had zero EVs. As late as 2016 we had very few, and there has now been quite an impressive take-up. If we go down that route, we can imagine a world where we have decarbonised transport to a considerable extent. However, this area of domestic heating and how we decarbonise our housing stock has proved the most challenging.

There are two issues with our domestic housing stock. First, the buildings themselves are not very energy-efficient; we have the oldest housing stock in Europe. Secondly, as I have said, 90% of those houses are rely on the burning of fossil fuels. So there are two criteria on which we are not doing very well. First, as the hon. Member for Tiverton and Honiton said, we have to make sure that we can retrofit and improve the housing stock. Secondly, we have to be smart about how we heat those homes once they have been improved and what the power sources will be. As I have said, there is a big challenge there.

Given the huge reliance on natural gas in our system domestically, hydrogen has to be part of the answer, as we see when we look at where the Germans are. They have a huge dependence on natural gas for industrial purposes, and Putin’s invasion of Ukraine set the cat among the pigeons. German Ministers, including Energy Ministers, and other politicians are focused on how to substitute other forms of power for the gas they imported from Russia. They have ruled out nuclear power and focused on liquefied natural gas and, particularly, on hydrogen, which is a source of energy that the Government could look at again in order to accelerate its deployment.

Briefly, I want to mention what the United States is doing. Since I started at BEIS, one of the biggest changes has been the introduction of the US Inflation Reduction Act. Industrial players in the sector say there is a huge pull to the United States because of the subsidies and support it is giving to green technologies, in a naked and unembarrassed way. As energy Minister, Secretary of State for BEIS and, briefly, Chancellor, I was very keen that we had something to say on this, because it is not just a huge challenge to us but to the European industrial base. Having been in his position, I know that the Minister will not be able to talk about Treasury affairs, but I would be interested to hear the Department’s thinking on the US IRA development.

This is an introductory debate about a subject I am very passionate about, as are many Members here, but finally I want to thank the House and the many varied organisations that have sent me great notes and briefings, which show me that this is one of the most important issues any Government will face in the next 20 or 30 years. I have brought this debate, other MPs will secure further debates before the end of this Parliament, and I am convinced we will revisit the subject in the next Parliament. Many issues that we debate are of largely ephemeral interest, but this matter will affect our children and generations to come, so I am honoured to be able to introduce this short debate today. It is not the first, but one of the very many debates we will have, and should have, about this crucial issue.

[Sir Christopher Chope (in the Chair)]

Before I call Barry Gardiner, I remind hon. Members that we have the wind-up speeches at 5.10 pm at the latest, so each contribution should be a maximum of five minutes.

16:47

[Barry Gardiner (Brent North) (Lab)]

Sir Christopher, under your guidance, I will try to speak swiftly. I congratulate the right hon. Member for Spelthorne (Kwasi Kwarteng) on introducing the debate; I welcome much that he said. We are debating the Government policy on reaching net zero by 2050, but perhaps it would be more appropriate to think about the Government’s barriers to reaching net zero by 2050, because the truth is that we are not on a path to net zero.

Not all is bad. Under the Climate Change Act 2008 and the Environment Act 2021, the UK created a strong legal framework for achieving net zero emissions by 2050. We, on both sides of the House, should be proud of that. However, legal promises alone cannot stand. They must be accompanied by consequential and transformational political action. The question is not what we have committed ourselves to, but how we are implementing the steps that are required to get there.

The Government know that. The 2021 net zero strategy clearly outlines the fact that achieving net zero

“will require the transformation of every sector of the global economy.”

In the 2023 environmental principles policy statement, the Government commit themselves to

“a system that places environmental considerations at the heart of policymaking across government.”

Again, I welcome the language, but the net zero growth plan does not follow that vision. Instead, it sets out a vision for a market led and technology driven net zero transition. A technology centred, market led approach is Government-speak for a voluntarist business-as-usual approach. This is too important to get wrong.

Rooting our net zero approach in technological developments blinkers us to the essential unity of the twin crises of climate and the environment and ignores the very nature-based solutions that the UK Government have rightly championed internationally. It shows a fundamental incoherence in the Government’s philosophical approach. We will neither achieve our environmental goals nor reap the benefits of the economic opportunities of the 21st century if we leave it to the market to lead. The Climate Change Committee has pointed out that while currently more than 31,000 people across the UK are employed in offshore wind alone, that is set to rise to 97,000 by 2030. This is a huge opportunity.

I welcome some of the investment that the Government have committed to achieving net zero, with £30 billion of public investment for a green industrial revolution, £36 billion of funding for improvements in energy efficiency, £20 billion for carbon capture and storage and a billion for low-carbon technologies. The Government appear to remain perfectly convinced that their approach will catalyse around—they say—£100 billion of private investment in developing those new industries and new carbon technologies, such as offshore wind and carbon capture and storage. That is a combined total of £187 billion.

By contrast, the Climate Change Committee has made it clear that we need between £300 billion and £430 billion of investment to achieve our goals. More importantly, it is clear that a strategic programme is required to reform the regulatory frameworks and to remove those barriers to the planning and construction of renewable energy infrastructure. It is not just about money; it is about the whole regulatory framework. The 2022 Climate Change Committee report points out that that has not been done; there is no adequate policy framework for catalysing the large-scale transformations necessary to achieve the established net zero targets by 2050. It is concerned that there does not seem to be any urgency on the part of the Government to do so.

I welcome the independent review conducted by the right hon. Member for Kingswood (Chris Skidmore). He recognised the barriers that remain in place. His review said that the Government should take immediate action, and it recommended 25 short-term policies that the Government should achieve by 2025. The review called those policies “25 by 2025”. The idea was both to remove barriers that prevented business and industries from supporting the net zero ambition and to provide an immediate signal of intent to the private sector that the Government were serious about delivering their net zero target.

We were disappointed on the Environmental Audit Committee when the Secretary of State for Energy Security and Net Zero, the right hon. Member for Welwyn Hatfield (Grant Shapps), responded to questions in our most recent hearing. When asked about wood pellet biomass at the Drax power station—a technology that emits 18% more carbon than coal, yet still remains a critical part of the Government’s net zero agenda—the Secretary of State said that he hoped he might be able to say more in a future session. Well, we all hope that, because we have been eagerly awaiting the Government’s biomass strategy, which was due to be published last year and has still not made it into the public domain. His response on hydrogen, supposedly a key part in the Government’s plan, was equally disappointing. The Secretary of State—

[Sir Christopher Chope (in the Chair)]

Order. We have limited time and the hon. Gentleman has now gone over his time limit. I call Virginia Crosbie.

16:53

[Virginia Crosbie (Ynys Môn) (Con)]

It is an absolute pleasure to serve under your chairmanship, Sir Christopher, and I thank my right hon. Friend the Member for Spelthorne (Kwasi Kwarteng) for calling this important debate. A McKinsey report has stated that the global net zero transition could be worth a trillion pounds to the UK and support just under half a million UK jobs by 2030. It has been described as the economic opportunity of the 21st century. It is recognised that the fastest and most reliable way for the UK to achieve net zero and energy security is to pursue a programme of new nuclear build.

I entered the House in 2019 to represent the constituents of Ynys Môn. They have lived with nuclear power at Wylfa since the 1960s. I stood on a mandate to do everything I could to bring new nuclear to Wylfa. The majority of my constituents support nuclear. They know it is clean, they know it is safe and they know it brings jobs. But Wylfa is being decommissioned, as other nuclear plants have been across the UK. Despite 30 years of promises and the good will of local people, it has yet to be replaced.

Anglesey is known as “energy island”. We have wind, wave, solar, tidal and hydrogen—and, hopefully, new nuclear if I have anything to do with it. Geographically, Wylfa is probably the best new nuclear site in the UK, if not Europe. My constituents in the surrounding area, including Cemlyn, Tregele, Cemaes and Amlwch, and right across Anglesey, desperately need the employment it would offer and give the site that all-important social licence.

I have seen many steps on the way to new nuclear at Wylfa: the British energy security strategy, which specifically mentions Wylfa; the launch of the £120 million future nuclear enabling fund at Wylfa by my right hon. Friend the Member for Spelthorne (Kwasi Kwarteng), who is sitting beside me; and the Nuclear Energy (Financing) Bill. However, we have yet to see the spades in the ground that the people of Ynys Môn and the UK need.

Building nuclear plants takes years. Just going through development consent takes years. In the building of Hinkley C and Sizewell C, we are developing a new generation of nuclear skills that we will lose if there is nothing for them to move on to. We need a plan for how and when we will roll out the Government’s goal of a one gigawatt nuclear reactor going to financial investment decision in this Parliament and two going to financial investment decisions in the next Parliament. We currently produce 3.9 GW of energy from nuclear. That is forecast to decline to 3.2 GW by 2030, with all but one of our nuclear power stations going off line in the next decade.

As chair of the all-party parliamentary group on small nuclear reactors, I welcome the SMR competition announced by the Chancellor in the spring Budget. I am looking forward to the launch of Great British Nuclear and it is brilliant news that for the first time we have a nuclear Minister. Other countries are taking bold and ambitious steps on investment and action in the move to net zero. Without a similar response, we risk losing out on new opportunities and potential economic gains. We have shown that as a Government we can move at speed when we face a crisis. In the Minister’s summing up, I want to hear—given that we are just 27 years away from 2050, we are in a crisis—the Government’s plan to grasp the opportunity and to build new nuclear at Wylfa. Diolch yn fawr.

16:57

[Caroline Lucas (Brighton, Pavilion) (Green)]

It is a pleasure to serve under your chairship, Sir Christopher. I welcome this debate on Government policy on reaching net zero by 2050 and I congratulate the right hon. Member for Spelthorne (Kwasi Kwarteng) on securing it.

I would like to start by setting out the context for the debate. Ministers are very fond of pointing out that the UK’s emissions have almost halved since 1990. However, when we are, in the words of the UN Secretary General,

“on a highway to climate hell with our foot on the accelerator,”

relying on past progress is not enough. Secondly, that figure ignores emissions from imports, focusing only on emissions from the things we produce domestically. Frankly, if we outsource most of our manufacturing, it is not surprising that our emissions go down. We have just outsourced them to countries like China. But we cannot outsource that responsibility and we must not. If we take a consumption-based approach, the UK has only actually reduced its emissions by 23% since 1990. That is equivalent to an average cumulative reduction of just 0.7% a year. That is hardly transformational.

In the short time I have, I want to focus on what is at the heart of the climate crisis, which is our seemingly insatiable addiction to fossil fuels. Frankly, it does not matter how many good things we do or how many renewables we bring on line if, at the same time, we continue to pump yet more filthy oil and gas, and continue to license more oil and gas fields, as the Government plan to do. Let me just make three quick points.

First, new oil and gas will not bring down bills. The right hon. Member for Spelthorne himself noted in February last year:

“The situation we are facing is a price issue, not a security of supply issue…Additional UK production won’t materially affect the wholesale market price.”

Well, I could not agree with him more. He gets to the nub of the issue: we have an energy affordability crisis, not an energy supply crisis. Fossil fuels are not only heating our shared and only home, but are so expensive that they have plunged millions of UK households into fuel poverty, all while oil and gas companies have raked in obscene, record-breaking profits. Our dependence on oil and gas is the very reason for high energy bills. It is somewhat perverse, therefore, that anyone would suggest that they can also be the solution.

We know by now that the way to bring down energy bills is to unleash truly abundant renewables, alongside storage and batteries, and to properly insulate homes to keep them warm over the winter months. It really is not that complicated. It should shock us all that energy bills are now a staggering £9.8 billion higher than they would have been had Government Ministers not “cut the green crap” a decade ago.

Secondly, new licences will not improve energy security, contrary to Ministers’ claims, because it is not our oil and gas—it is owned by private companies, who sell it on global markets to the highest bidder. In fact, the UK’s gas exports increased following Russia’s illegal invasion of Ukraine in response to high European demand. Even if it did belong to us, the majority of fossil fuel projects in the pipeline are for oil, not gas, and we already export around 80% of the oil that we extract because it is not the type used in UK refineries.

That is before we even talk about the fact that despite disingenuous protestations, no one is talking about turning off the taps tomorrow. We are saying that there should be no new licences for projects, which would not come online for many years to come. I refer the right hon. Member for Spelthorne to Lord Deben, the chair of the CCC, who has said how much he supports the policy position of no new licensing of oil and gas. He is a prominent member of the right hon. Member’s own party.

Finally, let us put to bed the idea that, somehow, producing oil and gas domestically is better for our planet. It is commonly asserted that the oil and gas extracted from the North sea than has lower emissions than imports. Although that is certainly the case for liquefied natural gas, imports of which have undoubtedly increased in the last year, it is not the case for Norwegian oil and gas, where the majority of our imports typically come from. In fact, the UK’s production is two-and-a-half times more polluting than Norway’s because the UK uses practices such as flaring and venting, which have been banned in Norway since the 1970s.

Furthermore, the Government maintain that new extraction is entirely in line with delivering net zero, but that is only because they have washed their hands of emissions produced when the oil and gas are burned—otherwise known as scope 3 emissions. Surely those have to be taken into account if we are truly to understand the impact of fossil fuels produced in the UK. The Climate Change Committee has been clear that extra oil and gas extracted in the UK will

“support a larger…market overall.”

When the International Energy Agency and so many other experts say loudly and clearly that it is simply not compatible with our climate change objectives to be pursuing new oil and gas, we simply should not do it.

17:02

[Selaine Saxby (North Devon) (Con)]

It is a privilege to serve with you in the Chair, Sir Christopher. Many thanks to my right hon. Friend the Member for Spelthorne (Kwasi Kwarteng)—it is a pleasure to be back discussing floating offshore wind with him. As chair of the all-party parliamentary group for the Celtic sea, both he and the Minister have spoken to me at length on this issue.

I fully support the UK Government’s commitment to ensuring that floating offshore wind makes up 5 GW of energy by 2030, but everyone will recall that the Celtic wind blows the other way to the wind in the North sea, which is why it is vital that this project goes ahead. The recent administrative strike price in the allocation round for contracts for difference did not, unfortunately, take into account the unprecedented global economic pressures that have led to costs rising by 20%.

An already challenging picture in the Celtic sea has been exacerbated by delays in leasing rounds for projects by the Crown Estate, as well as the lengthy amount of time that key strategic ports have had to wait for the Government to announce the much welcomed floating offshore wind manufacturing investment scheme, which is essential to the funding to deliver port infrastructure. I fear that, at this pace, we will miss the opportunities of flow in the Celtic sea by 2030, and potentially deter much needed international investment into the Celtic sea.

I agree with my right hon. Friend on buildings, but I have a particular concern as a very rural MP. Some decisions around rurality and how we change our housing need to be looked at differently. That is why I supported the ten-minute rule Bill of my right hon. Friend the Member for Camborne and Redruth (George Eustice) on hydrotreated vegetable oil as an alternative for oil fired, which is used in 25% of off-grid properties.

I would like to come to biomass. I declare an interest as chair of the all-party parliamentary group for the wood panel industry, which is not the stuff on the walls but basically kitchens and the like. I thank the Minister for his engagement on this matter. In my mind, burning wood for energy is a short-sighted and environmentally damaging endeavour. Wood is too valuable a resource to simply burn, given it is the best way to sequester carbon and avoids the use of environmentally damaging materials in the economy. Wood-dependent industries are struggling to get the wood supply they need. Addressing that should be a focus of policymakers. We need to change direction.

We cannot rely on bioenergy with carbon capture and storage for energy security under net zero scenarios. We are fooling ourselves if we think that we can. Proponents argue that BECCS will help to contribute to energy security, but that is inaccurate. BECCS comes with an energy penalty, as it requires energy to power the CCS unit and to provide power to the grid. Because of that, BECCS can either maximise power generation or CO₂ capture. It cannot do both. Given that it was previously reported by the Financial Times that the regulator had appointed a Drax consultant, Black and Veatch, to carry out an assurance audit into the company, I hope that the formal investigation recently announced by Ofgem will be carried out independently, thoroughly and transparently. It should not be a desk-based inquiry, as has been the case before. As we look to these new technologies, it is vital that they really are sustainable and that we are on the right road towards net zero.

We have not touched much on transport. As an active travel champion, I am concerned that tomorrow’s National Audit Office report will again show that we are not meeting the goals to achieve our active travel measures and that we need to do more to decarbonise every different element of our society. The transition to net zero is a multifaceted mission that needs a robust and well-calculated response, with each part fully calculating its energy contribution and all its carbon costs, including transportation. Those need to be properly analysed along with their financial contributions in generating the energy that we fundamentally rely on. The new Exeter University EC simulator, which I visited last week, may well be a step towards independent analysis of different projects as we continue the challenging but vital work of moving towards net zero.

17:06

[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

It is a pleasure to serve with you in the Chair, Sir Christopher. I admire the chutzpah of the right hon. Member for Spelthorne (Kwasi Kwarteng) in bringing forward the debate. Not only did he make questionable decisions as Secretary of State for Business, Energy and Industrial Strategy with regard to Scotland’s net zero ambitions, but he was then responsible—along with the previous Prime Minister—for crashing the economy and making net zero far more expensive for this Government, as well as everyone else, due to the soaring cost of borrowing for capital investment.

The right hon. Member spoke about nuclear energy; we really need to move away from the nuclear obsession. Hinkley will now cost £33 billion and it is years late. Sizewell C, which will invariably cost upwards of £40 billion, is located on a site subject to coastal erosion and climate change sea rises. SMRs are not the answer, either. There is no approved design, they have an estimated cost of £2 billion each and Rolls-Royce is hoping for an initial order of up to 15. That is £30 billion of commitment better spent on energy-efficiency measures, storage and the electrification of heating. Nuclear is also inflexible and not a good accompaniment for intermittent renewables. Yet further investment in storage is therefore required.

The right hon. Member described pumped-storage hydro as a Scottish technology. The First Minister recently wrote to the Prime Minister urging him to agree a cap and floor mechanism that will get Coire Glas, the Cruachan extension and other pumped-storage hydro schemes up and running. They cost a fraction of what nuclear does and need only the revenue mechanism to release private capital investment.

Contracts for difference have been a success in delivering the deployment of renewables. However, in the Tories’ typical penny-wise, pound-foolish attitude, their lowest cost obsession has seen a major failure to develop UK supply chains properly. It is Tory procurement processes that have prevented Scotland from properly becoming the Saudi Arabia of wind. It is crystal-clear that a coherent industrial strategy is required. That said, I am pretty sure that we had one, and we all know what happened to it lately. The failure to invest—[Interruption.]

[Sir Christopher Chope (in the Chair)]

Does the right hon. Member for Spelthorne (Kwasi Kwarteng) seek to intervene?

[Kwasi Kwarteng]

I would be happy to do so.

[Gavin Newlands]

I would be delighted to give way.

[Kwasi Kwarteng]

Of course, the hon. Member is quite right that I, with the then Chancellor, suppressed the industrial strategy, but what we have done—[Interruption.] Thank you very much—I thought we had stringent rules about phones and calls and that sort of thing, but it seems to me that every time I speak, someone has got their phone on.

Anyway, we have got an innovation strategy and an energy security strategy. We have tons and tons of strategy, and that more than fills the gap of what was a woolly and ill-defined industrial strategy.

[Gavin Newlands]

I thank the former Secretary of State and Chancellor for his intervention, but I profoundly disagree with his take on this. I will go on to talk about this at the end of my speech, but the strategies he mentions do not have much in them. If we look under the bonnet, there is nothing there. For him to say that those strategies more than make up for the loss of the industrial strategy is for the birds, to be quite honest.

The failure to invest in upgrading the transmission system between England and Scotland has resulted in nearly £5 billion-worth of constraint payments—money that could and should have been invested in grid upgrades. Developers in Scottish waters are now having to connect to the grid in the north-east of England, bypassing Scotland altogether. That said, it is one way to avoid the utterly ridiculous and outrageous additional grid charges that penalise developers in Scotland. The right hon. Member was also in post for the further betrayal of Acorn CCS, which is the most advanced project and the one with most delivery certainty, but it is still waiting for Government support. That belies the Tory commitment to net zero.

My hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown) and I have visited several businesses and projects in the highlands, Orkney and Aberdeen that are hugely important to reaching our net zero targets. Storegga, of the Acorn Scottish cluster, was one, and another was the hugely impressive European Marine Energy Centre in Orkney—the real energy island in the UK.

Not content with providing innovators the platform with which to test tidal energy, EMEC has come up with solutions to add value to the energy produced, including an electrolyser complemented by storage batteries producing green hydrogen, which in turn is to power other projects such as a combined heat and power unit at Kirkwall airport and a hydrogen fuel cell at Kirkwall harbour to provide clean shore power to ships tied up there. I say “is to”, because delivery of the hydrogen is an issue. Apparently, due to Maritime and Coastguard Agency regulations, the hydrogen can only be delivered if there is no freight and fewer than 25 passengers on the ferry. Those regulations seriously curtail EMEC’s good efforts.

Come to think of it, where is the Government’s coherent strategy on delivering hydrogen, full stop? They talk hydrogen up often enough, but those who are producing it struggle to deliver it. You could not make it up, Sir Christopher. It is obvious that tidal stream needs a bigger ringfence than it currently has. As is often the case, we lead on innovation, research and development in this country but, just at the point where a new sector needs public sector investment to ensure that we retain that lead and the supply chain benefits that flow from it, the UK once again prevaricates and allows someone else to reap the economic benefits.

To conclude, there is a big risk that allocation round 5 will be a complete failure, like last year’s Spanish auction, with strike rates now too low due to inflation and rising costs, as mentioned previously. Again, the Government—more specifically, the Treasury—are tone-deaf, as they are in their attitude to the Inflation Reduction Act in the United States, which is causing investors to rebalance their portfolios across the Atlantic. The Government are now taking credit for work undertaken by the Scottish Government; whether it is tree planting or zero-emission buses, they have subsumed the Scottish targets into UK targets to hide their own failures. No doubt active travel will be next.

The Tories’ record on net zero is a litany of failure; when we look under the bonnet, there is no mechanism nor the required investment for delivery. Scotland is doing so much more, but with one arm tied behind its back. As in so many other areas, Westminster is holding Scotland back.

17:12

[Kerry McCarthy (Bristol East) (Lab)]

It is a pleasure to see you in the Chair, Sir Christopher.

I congratulate the right hon. Member for Spelthorne (Kwasi Kwarteng) on securing this debate. I am pleased to see that he is still pursuing an interest in net zero. I agree with some of what he said, but there were some points I would have liked him to cover. For example, when he talked about the grid, as the hon. Member for Paisley and Renfrewshire North (Gavin Newlands) has just said, the biggest problem is not the question where the pylons go in east Anglia, but the lack of grid connectivity, which is a massive obstacle to economic growth. That is something we need to solve as we move towards greater use of electricity in our industrial sector.

Three former Business Secretaries, from the Lib Dems, Conservatives and Labour, have all come together today to bemoan the lack of an industrial strategy, so I do not agree with the right hon. Member for Spelthorne on that. He talked about retrofitting homes, which is obviously important, but it would help if we stopped building homes that do not meet energy performance certificate C standard. We are compounding the problem, having built more than 1 million homes since the zero carbon homes pledge was dropped that do not meet that standard.

The right hon. Member for Spelthorne mentioned green levies and incentives for decarbonisation. It would have been interesting to hear his thoughts on the hydrogen levy. We were in the Energy Bill Committee earlier today and it must be said that, based on Second Reading of that Bill, there is a lot of unhappiness on both sides of the House. We will oppose the hydrogen levy on bills, and I would welcome his support on that, because I do not think we should be putting the burden on consumers when it is mostly industry that will benefit.

[Kwasi Kwarteng]

Just to clarify, is Labour opposing the hydrogen levy on bills, or its removal?

[Kerry McCarthy]

The House of Lords voted against the hydrogen levy

on bills on the basis that it is a regressive measure and we should not be adding to the burden on consumers. We support that position; the Government think that it should go on bills, where it is the industry that benefits. There have been reports that the Secretary of State is due to U-turn on that position very soon, so the right hon. Member might want to be ahead of the curve and jump the right way before the Secretary of State does.

[Kwasi Kwarteng]

I am sure that the Secretary of State does not need my encouragement, or otherwise, to come to the right decision.

[Kerry McCarthy]

I am sure that the right hon. Member would be a very persuasive voice.

The Government’s commitment to a net zero target is to be welcomed, but a target for a date set far into the future—2050—is pretty meaningless unless it is backed up by a comprehensive road map as to how we are going to get there. We know that the majority of that journey needs to be done in the very early years, with just the hard-to-decarbonise sectors following at the end, so we need to know how much ground we are going to cover and when. The Government were taken to court on this issue last year, with the High Court ruling that they had provided insufficient detail. There was a big hype about “green day” at the end of March; eventually, the Government decided that it was not quite green enough and changed its name to something else, but what we got was a plan that—even in terms of our 2030 nationally determined contribution—only sets out how we would deliver 92% of that. We are still way off track.

Net zero is not a slogan or a mere box-ticking exercise: it is a whole paradigm shift that we must instigate, as a country and as a global community. Scientists are warning that we are likely to breach the 1.5° threshold in the next four years. We are running out of time, and we need to do everything as fast as we can. There has been a lot of negativity in recent days about net zero, with people pushing back against Labour’s announcement that we would not support any new oil and gas licences. Again, people have been repeating that old trope that it is too expensive to reach net zero, when we know that renewables are far cheaper now.

The Government do not seem to grasp that this is a huge challenge for the country, but as has been said, it is also an enormous opportunity. The right hon. Member for Kingswood (Chris Skidmore), who authored the recent net zero review, said that it is

“the economic opportunity of the decade—if not the century”

to create a new economy. As the right hon. Member for Spelthorne mentioned, President Biden has not only recognised that opportunity, but seized it with the Inflation Reduction Act, and the EU has responded with its green deal industrial plan. The Chancellor has said that he will come up with a response in the autumn, which is at least better than the response from the Energy Secretary, who tells us that the UK is already decades ahead of the USA. The Minister has said that the rest of the world is “playing catch-up” with us. We do have 22% of the world’s offshore wind installations, as I suspect the Minister will tell us, but we have only 2% of global wind industry jobs—that is just one example. A country such as Denmark, which recognises the export opportunities, has over eight times as many jobs as the UK for the equivalent wind energy capacity.

Businesses I meet now are describing the Inflation Reduction Act as a game changer, and are warning that they will transfer investments to the US. There have been occasional success stories—the news that Jaguar Land Rover is set to establish a gigafactory in the south-west, in Bridgwater, is very welcome—but that comes with a sense of relief that that company has made that announcement, rather than real confidence that there is a coherent industrial strategy that will deliver the 10 gigafactories that the Faraday Institution predicts we need. I would dispute the Minister’s suggestion that we are decades ahead: we need to have a coherent industrial strategy, a response to the Inflation Reduction Act sooner rather than later, and a revised net zero strategy that shows that we really are on course to meet that goal.

17:19

[The Minister for Energy Security and Net Zero (Graham Stuart)]

It is a great pleasure to serve under your chairmanship, Sir Christopher, and to listen to this excellent and important debate. I begin by congratulating my right hon. Friend the Member for Spelthorne (Kwasi Kwarteng) on securing it. Of course, I come to this debate with some trepidation, as I am facing someone who did my job previously and then, unlike me—yet, anyway—went on to be Secretary of State at what was then the Department for Business, Energy and Industrial Strategy. He made immense progress on our path to net zero and energy security

I would not normally be rude, but I hope that the hon. Member for Paisley and Renfrewshire North (Gavin Newlands) can perhaps move on, as we debate more often, from a rather adolescent approach to one that more genuinely engages with the substance. His was not a particularly brilliant contribution to this debate in comparison with those made by other Members, which I thought actually had some substance.

My right hon. Friend the Member for Spelthorne oversaw the publication of the landmark, world-leading net zero strategy. The independent Climate Change Committee described it as

“an ambitious and comprehensive strategy that marks a significant step forward for UK climate policy”

and as

“the world’s most comprehensive plan to reach net zero”.

It is worth highlighting a couple of points. When we came to power in 2010, just 7% of this country’s electricity came from renewables; now it is well over 40%. The issue of insulation and the number of houses being insulated was also raised. I do not know why the Liberal Democrat member who raised it, the hon. Member for Tiverton and Honiton (Richard Foord), is no longer here for the winding-up speeches, but anyway—he raised it before leaving the Chamber. It is worth noting that in 2010 the figure was just 14% and by the end of this year I expect that 50% of homes will have reached energy performance certificate level C or above, which is a huge—indeed, transformative—change, albeit one that needs to go much further and faster.

My right hon. Friend the Member for Spelthorne oversaw COP26, which was the biggest summit that this country has ever hosted. It brought together 120 world leaders and over 38,000 key figures from Governments, civil society, businesses, youth and more, in order to tackle the urgent challenge of climate change. It is also worth noting that we have met all our carbon budgets to date and that we are the first major economy to legislate for net zero—done under this Government. So this country is more on track than almost any other country and certainly more than any major economy on earth. That is the context that people could be forgiven for not realising was in fact the case from the rather adolescent contribution of the Scottish National party spokesman. I will leave to one side any comments that the chairman of the Climate Change Committee has made about the Scottish Government’s performance in meeting their climate targets, because doing otherwise would be to descend to the level that the SNP spokesman stayed at throughout his speech.

[Barry Gardiner]

When the Minister says that this country is “more on track”, does that mean that we are “on track” or that we are just closer to being “on track” than anybody else?

[Graham Stuart]

That is an excellent question—we have exceeded every carbon budget to date. We not only have the net zero strategy but we had the net zero plan on 30 March, setting out how we will do it. Of course that stretches through to 2037. Not every aspect of the way in which we will fulfil that aim has been set out to date—people would not expect them to be 14 years before that date—but we are on track. What we have to do is make sure we stay on track. I would not try to represent to the House today anything other than the fact that it is an extremely challenging business to ensure that we continue on track. That is what we are working on flat-out.

My right hon. Friend the Member for Spelthorne oversaw the publication of the British energy security strategy, which raised greatly the ambition set out in the net zero strategy, and since those documents came out the Government have continued to progress. In March, we published the Powering Up Britain package, which demonstrates that we are on track to reach net zero, and in the net zero growth plan we are bolstering delivery. That plan responds to the expert recommendations made in Mission Zero, the independent review of net zero, to which there has been reference in the debate, which explored how we can achieve net zero in the most pro-growth, pro-business way.

Our net zero ambition needs strong public and private partnership, and we are forging these links in a number of ways. Government policy and funding commitments are already leading to real outcomes, and we are leading the world in so many ways, not just on offshore wind.

The Government are committed to accelerating renewable electricity deployment. The Powering Up Britain package sets out our delivery plans for meeting those ambitions. It includes important announcements on a range of technologies, including up to £160 million of new funding to kick-start our investment in port infrastructure to deliver on our floating offshore wind ambitions, which were referred to earlier, and a new solar taskforce to drive deployment of that important technology as we seek to increase that fivefold by 2035. We launched the taskforce on 25 May, getting key players from Government, industry, regulatory organisations and other relevant organisations round the table to drive forward the actions required to deliver that ambition of deploying 70 GW of domestic and industrial rooftop and ground-mounted solar by 2035, all while cutting installation costs, boosting British skills and jobs, and improving grid access to support a solar power revolution.

[Barry Gardiner]

The Minister rightly refers to the need to improve our electricity supply from solar. Has he looked at the interconnection that is proposed from Morocco to come in at the Hinkley juncture? Are he and the Department now considering a contract for difference, which would enable that contract to go ahead?

[Graham Stuart]

I thank the hon. Gentleman for his question. We are looking at the Xlinks project. We have set up a team to look at it with no further commitment other than to make an assessment. It will be reporting to me shortly on that. We will look at the outline business case going forward. We are looking at it; I do not want to go further—positively or negatively—than saying that.

[Gavin Newlands]

I realise it is a stretch for the Minister to try to portray himself as the adult in the room with his contribution, but he mentioned good access. Will he therefore tell us what will happen with the grid constraints across the border, even in Orkney where all the energy it produces cannot actually be fed into the grid? When will that be resolved?

[Graham Stuart]

I thank the hon. Member for that question. It is a good question because the grid constraints, transmission and local connection are the biggest barriers standing in the way of decarbonising our electricity system by 2035. That is why the networks commissioner was asked to investigate that and will be reporting to us this month. That is why the Prime Minister appointed for the first time a Minister for Nuclear and Networks, my hon. Friend the Member for West Aberdeenshire and Kincardine (Andrew Bowie), who is working on that. The hon. Member for Paisley and Renfrewshire North is absolutely right to point out that the transformation we have seen in renewables, the change in our generation system and the requirement to grow our electricity capacity going forward puts enormous strain on that and creates not only supply chain, financing and deployment challenges in that space, but political ones because of the infrastructure impact on communities. A lot of work is going on in that space, and I am working closely with Scottish Government colleagues and other colleagues to try to ensure that we work in the most coherent manner possible.

We have heard mention in the debate of the need to improve the energy performance of homes across the country. Notwithstanding the transformation we have brought about—it is not enough—that is why we have established a new energy efficiency taskforce to drive forward improvements. That is why we are spending £12.6 billion over this Parliament and up to 2028 to support and provide long-term funding and certainty, supporting the growth of supply chains and ensuring that we can scale up delivery over time. Only yesterday I visited Octopus Energy’s centre, looking at how that company is trying to design heat pumps to be cheaper to install and more efficient, so they can drive the cost down and speed up the time it takes to install them, thus making the decarbonisation of heat in homes, which is a thorny and challenging subject, more realistic and deliverable.

The delivery of net zero relies on strong business action. That is why we brought together senior business and finance leaders into a new strategic net zero council co-chaired, alongside myself, by Co-op Group CEO Shirine Khoury-Haq. It includes Carl Ennis, CEO of Siemens; Ian Stuart, UK CEO of HSBC; Chris Hulatt, the co-founder of Octopus Investments, and others from UK business. The full membership reflects the cross-cutting nature of our net zero challenge. The next meeting is planned to be held in No. 10. We are mapping all the various business and sectoral organisations focused on net zero, looking to ensure that we have the most coherent architecture and that we can develop road maps for each sector, so that we can take the cross-cutting nature of Government in other policies and put it into something that people in particular sectors can more easily adjust to and adapt and that investors can invest in. The green jobs delivery group was formed after the publication of the net zero strategy and followed work by my right hon. Friend—

17:30

Motion lapsed, and sitting adjourned without Question put (Standing Order No. 10(14)).

Written Statements

Tuesday 6th June 2023 Written Statements

Tuesday 6 June 2023

Unleashing Rural Opportunity

Tuesday 6th June 2023 Written Statements

[The Secretary of State for Environment, Food and Rural Affairs (Dr Thérèse Coffey)]

Growing the economy is one of our Government’s five priorities. Growing the rural economy is key to that, and to continuing to make our countryside a vibrant and thriving place where people want to live and work. The countryside is rich in human and natural potential, with strong communities and entrepreneurial businesses. Recent experience during the pandemic has shown beyond doubt that rural communities and businesses are adaptable, resilient, and full of energy and drive. We recognise, though, that rural communities can face challenges, including those connected with sparsity and distance from key facilities. We want to go further in unleashing the inherent potential that exists and supporting people living and working in the countryside to have a prosperous, sustainable future.

That is why we are launching “Unleashing Rural Opportunity”, in which we set out four broad priorities that are key to rural communities being able to thrive; set out new initiatives; and consider what we are already delivering to make this happen. The Prime Minister also chaired a discussion on delivering for rural areas at Cabinet this morning.

Connectivity: We will continue to deliver gigabit broadband and mobile coverage in rural areas and increase access to public transport. New measures announced today include providing £7 million to test new ways of bringing together satellite, wireless and fixed line internet connectivity in remote areas across the UK. This will help support farmers and tourism businesses in those areas to access lightning-fast, reliable connectivity for the first time, and will help rural businesses in trial areas to make the most of new technologies. We are also today announcing the appointment of my hon. Friend the Member for Barrow and Furness (Simon Fell) as our rural connectivity champion, to drive innovation and investment in advanced wireless technologies in rural areas across the UK.

Growing the rural economy: We will support rural areas so they can prosper, in line with the Prime Minister’s key priorities for the country as a whole. Today we are announcing new measures to help them do so, including consulting on changes to permitted development rights to support rural diversification. This will look at whether there should be changes to the current rules in England, cutting red tape to make the planning process more straightforward for farmers so they can more easily improve their redundant agricultural buildings, helping to make their businesses more productive.

Homes and energy: We will facilitate the building of more homes for local people to buy where local communities want them and we will provide secure and resilient energy supplies. New measures announced today for England include funding of £2.5 million for a network of rural housing enablers to boost the supply of new, affordable housing by identifying development opportunities, supporting site owners and community representatives to navigate the planning system, and engaging with local communities to help shape developments. We are also providing local authorities with new powers to manage the impact of holiday lets on local communities—recognising their contribution to the tourism sector—and we will consult on making it easier for farmers to change their redundant agricultural buildings into family homes.

Communities: We want rural communities to continue to be places where people want to enjoy living. We will improve access to high-quality health care and take further action to tackle rural crime. New measures include the imminent publication of a dental plan for England that will help improve provision in rural areas. We will also put in place legislation this summer to increase fly-tipping and litter penalties, and intend to ringfence those penalties to tackle this blight on the countryside. We are also supporting the National Police Chiefs’ Council to establish a new National Rural Crime Unit to support police forces across Great Britain in their response to rural crimes. In addition to additional funding from the Home Office, DEFRA will fund a post within the National Rural Crime Unit to tackle fly-tipping across Great Britain.

“Unleashing Rural Opportunity” complements our annual rural report, to be published later this year. It will be published on gov.uk today and a copy will be laid in the Libraries of both Houses.

[HCWS825]

Electronic Travel Authorisation

Tuesday 6th June 2023 Written Statements

[The Minister for Immigration (Robert Jenrick)]

The Government’s No. 1 priority is keeping the UK safe. In order to further strengthen our border security, the Government are launching an electronic travel authorisation (ETA) scheme in October 2023.

The ETA scheme will be implemented in a phased manner, on a nationality basis, by the end of 2024. Qatar, Bahrain, Jordan, Kuwait, Oman, United Arab Emirates and Saudi Arabia will be the first countries to benefit from the ETA scheme. The Home Office will provide further details about which country will be next to benefit from the ETA scheme in due course.

However, today I am announcing that the Home Office intends to charge £10 for an ETA application during the initial roll-out period. This fee level is competitive with that of equivalent systems run by other countries, and will ensure that the Department’s costs in delivering the scheme are effectively covered across a range of volume scenarios.

In order to support the charging of this initial £10 fee, I am today laying an amendment to the Immigration and Nationality (Fees) Order 2016 to introduce the necessary enabling provisions, including a maximum chargeable fee. I will then lay regulations before Parliament in the autumn to amend the Immigration and Nationality (Fees) Regulations 2018 so that the initial fee of £10 will be established from October 2023.

The Home Office will review the fee charged for ETA applications in advance of further roll-out of the scheme across 2024, including to the EU and other non-visa national countries. Details on any further planned updates to the fee level following the initial roll-out period will be communicated in due course.

[HCWS821]

Chinese "Overseas Police Service Stations"

Tuesday 6th June 2023 Written Statements

[The Minister for Security (Tom Tugendhat)]

Last November, I committed to update the House on the response to media reporting of unofficial Chinese “police service stations.” The Minister for Crime, Policing and Fire reiterated this commitment in April.

Reports by the non-governmental organisation Safeguard Defenders claimed that there were three Chinese “police service stations” in the UK—in Croydon, Glasgow and Hendon. Further allegations have been made about an additional site in Belfast.

These reports alleged that, while these “police service stations” are officially set up in countries across the world to conduct administrative tasks to support Chinese nationals residing abroad, they are also used to monitor and harass diaspora communities and, in some cases, to coerce people to return to China outside of legitimate channels.

The police have visited each of the locations identified by Safeguard Defenders, and carefully looked into these allegations to consider whether any laws have been broken and whether any further action should be taken. I can confirm that they have not, to date, identified any evidence of illegal activity on behalf of the Chinese state across these sites. We assess that police and public scrutiny have had a suppressive impact on any administrative functions that these sites may have had.

However, these “police service stations” were established without our permission and their presence, regardless of whatever low-level administrative activity they were performing, will have worried and intimidated those who have left China and sought safety and freedom here in the UK. This is unacceptable.

The Chinese authorities regularly criticise others for what they see as interference in their internal affairs, yet they felt able to open unattributed sites without consulting the UK Government. It is alleged that this was a pattern repeated around the world.

The Foreign, Commonwealth and Development Office has told the Chinese embassy that any functions related to such “police service stations” in the UK are unacceptable and that they must not operate in any form. The Chinese embassy has subsequently responded that all such stations have closed permanently. Any further allegations will be swiftly investigated, in line with UK law.

I hope that this clarifies what we know about these alleged “police service stations” and the action that we have taken. The 2023 Integrated Review Refresh makes it clear that we want to engage and partner with China on key issues where it is in our national interest to do so. However, the UK will always put national security first.

Let me be clear: any attempt by any foreign power to intimidate, harass or harm individuals or communities in the UK will not be tolerated. This is an insidious threat to our democracy and fundamental human rights. That is why I asked the Defending Democracy Taskforce to review the UK’s approach to trans-national repression to ensure that we have a robust and joined-up response across Government and law enforcement. Understanding and combating this kind of interference is a key pillar of our taskforce’s efforts.

The National Security Bill, now in its final stages, represents the biggest overhaul of state threats legislation in a generation, and will drastically improve our tools to deal with the full range of state threat activity, regardless of where it originates. The Bill contains provisions that will leave those seeking to coerce, including through threats of violence, for, or with the intention to benefit, a foreign state liable to prosecution in a way that they currently are not. Those convicted could face up to 14 years in prison. I urge Parliament to quickly pass the Bill so that its powers can be used to clamp down on foreign interference and trans-national repression.

I look forward to working closely with this House to further protect our democracy.

[HCWS822]

Northern Ireland Update

Tuesday 6th June 2023 Written Statements

[The Secretary of State for Northern Ireland (Chris Heaton-Harris)]

Section 9 of the Northern Ireland (Executive Formation) Act 2019 (“the NIEF Act”) places me under a legal duty to ensure that the recommendations in paragraphs 85 and 86 of the 2018 report of the Committee on the Elimination of Discrimination Against Women (“the CEDAW report”) are implemented in full.

I have today laid regulations in Parliament to implement the CEDAW recommendation to

“make age-appropriate, comprehensive and scientifically accurate education on sexual and reproductive health and rights, a compulsory component of curriculum for adolescents, covering prevention of early pregnancy and access to abortion in Northern Ireland, and monitor its implementation”.

The regulations will mirror the approach taken in England with regard to education about the prevention of early pregnancy and access to abortion. This is provided for in regulation 2(2).

It has always been my preference that, as a devolved matter, the Department of Education in Northern Ireland updates the curriculum. However, nearly four years have passed since the NIEF Act, and adolescents in Northern Ireland are still not receiving comprehensive and scientifically accurate education on sexual and reproductive health and rights.

Today, I am therefore laying regulations that:

Amend the Education (Northern Ireland) Order 2006, and the Education (Curriculum Minimum Content) Order (Northern Ireland) 2007 for adolescents, to make age-appropriate, comprehensive and scientifically accurate education on sexual and reproductive health and rights, covering prevention of early pregnancy and access to abortion, a compulsory component of curriculum for adolescents.

Place a duty on the Department of Education to issue guidance, by 1 January 2024, on the content and delivery of the education required to be provided.

Place a duty on the board of governors and principal of every grant-aided school to have regard to this guidance.

Place a duty on the Department of Education to publish a report by 1 September 2026 on the implementation of education on sexual and reproductive health and rights in grant-aided schools, and lay the report before the Assembly.

I recognise the sensitivity of this topic and that some parents may wish to teach their child about sex education themselves, or make alternative arrangements for sex education to be provided in line with their religious or other beliefs. In recognition of this, the regulations also place a duty on the Department of Education to introduce a mechanism to ensure that a pupil may be withdrawn from education on sexual and reproductive health and rights, or elements of that education, at the request of a parent. This follows the approach taken in England and Scotland.

Consultation with parents on relationship and sexuality education is already common practice in Northern Ireland and we expect the Department of Education to ensure schools afford parents the opportunity to review relevant materials.

I wish to be clear that educating adolescents on issues such as contraception, and access to abortion in Northern Ireland, should be done in a factual way that does not advocate, or oppose, a particular view on the moral and ethical considerations of abortion or contraception.

While the changes to the curriculum will come into effect from 1 July 2023, there will be a period of implementation and a need for meaningful engagement with teachers, parents and young people. To allow for this, the regulations place a duty on the Department of Education to issue guidance on the content and delivery of the required education by 1 January 2024.

[HCWS824]

Identity and Language (Northern Ireland) Act 2022: Implementation

Tuesday 6th June 2023 Written Statements

[The Minister of State, Northern Ireland Office (Mr Steve Baker)]

During the passage of the Identity and Language (Northern Ireland) Act 2022, the Government committed to provide updates to Parliament on the implementation of the Act every six months from commencement. I am pleased to share the first such update today.

The Act received Royal Assent on 6 December 2022, upon which part 3 of the Act came into force. Since the passage of the Act, the Government have worked closely with the relevant Northern Ireland Departments on its implementation.

On 22 May, the Government made the Identity and Language (Northern Ireland) Act 2022 (Commencement) Regulations 2023. This brought into force the provision of the Act for the purposes of establishing the Office of Identity and Cultural Expression, the Irish Language Commissioner and the Commissioner for the Ulster Scots and the Ulster British Tradition. This also brought into force the concurrent powers and powers of direction of the Secretary of State in relation to the Act.

In the Government’s view, the Act provides a framework for all of Northern Ireland’s identities, languages and cultures to be accommodated, protected and respected. This includes those who define themselves as “other” and those who form Northern Ireland’s ethnic and newcomer communities, consistent with the vision set out in New Decade, New Approach.

For these reasons, the Government remain committed to seeing the implementation of these New Decade, New Approach undertakings and will continue to work closely with Northern Ireland Departments on these matters. The Government will also continue to keep Parliament updated, in line with the assurances that we have made.

[HCWS823]

House of Lords

Tuesday 6th June 2023 Lords Chamber

Tuesday 6 June 2023

14:30

Prayers—read by the Lord Bishop of Coventry.

Death of a Member: Lord Morris of Aberavon

Tuesday 6th June 2023 Lords Chamber

Announcement

14:36

[The Lord Speaker (Lord McFall of Alcluith)]

My Lords, I regret to inform the House of the death of the noble and learned Lord, Lord Morris of Aberavon, on 5 June. On behalf of the House, I extend our condolences to the noble and learned Lord’s family and friends.

Baby-changing Facilities

Tuesday 6th June 2023 Lords Chamber

Question

14:36

Asked by

[Lord Kirkhope of Harrogate]

To ask His Majesty’s Government whether they plan to oblige cafés, restaurants and other businesses serving food and drink to provide adequate baby-changing facilities.

[The Minister of State, Department for Business and Trade (The Earl of Minto) (Con)]

Although building regulations already require consideration to be given to baby-changing facilities at the design stage of non-dwellings, we need to also consider the impact that further obligations would have. Most hospitality businesses are SMEs, which may not have the resources, or indeed the space, to install suitable facilities.

[Lord Kirkhope of Harrogate (Con)]

I much appreciate those remarks from my noble friend. However, as many parents and guardians of infants find it inconvenient, if not embarrassing, when in restaurants and other outlets serving food and drink where adequate baby-changing facilities are not available, will the Government now consider amending Section 20 of the Local Government (Miscellaneous Provisions) Act 1976 to add a requirement for such facilities, wherever practicable, to those already covering the provision and maintenance of toilet facilities?

[The Earl of Minto (Con)]

My Lords, I think we can all agree that the principle of free access to baby-changing facilities in as many different hospitality situations as we can reach is desirable. Under the existing building regulations there is already a requirement for new non- residential properties to consider this, as well as for buildings which are undergoing substantial reconstruction.

[Lord Leong (Lab)]

My Lords, as most mothers and fathers will tell you, taking an infant out, especially to eating places, is a real chore—you have to pack nappies, a changing mat and wipes, among other things. Having to find a place to change nappies is another chore. They should not be forced to do this in unsuitable places. Most child-friendly restaurants and cafés already have baby-changing facilities. This makes good business sense, contributing to a healthy “bottom” line, as parents will look at these eateries positively. There have been suggestions from many people that cafés, pubs and restaurants should be required to provide baby-changing facilities by law so that parents can have peace of mind. Will the Government look at this again?

[The Earl of Minto (Con)]

I thank the noble Lord for his comments—in all respects. My noble friend made a very good point about how this needs to be practicable. There are a lot of existing hospitality venues where it is not practical to provide additional services, either from a financial point of view or, more importantly, from a space point of view. However, the principle holds good that, whenever the opportunity arises with anything new or anything that is being rebuilt, consideration should be, and indeed is, required under the building regulations improvements.

[Baroness O'Loan (CB)]

My Lords, in considering the situation of parents who wish to change babies in hospitality venues, will the Minister also consider parents who need to change children with disabilities, and older people with disabilities, who need more extensive facilities?

[The Earl of Minto (Con)]

My Lords, that is again a very good point. There is a requirement at the moment to separate disabled toilet facilities from baby-changing facilities, and I think that is probably the right thing to do. This morning, I met the chief executive of the British Beer and Pub Association, and she said that her members take every opportunity to put in baby-changing facilities for precisely the reasons that the noble Lord mentioned earlier: from a marketing point of view, it is absolutely the right thing to do, because you win more customers and more money.

[Lord Shinkwin (Con)]

My Lords, my noble friend the Minister helpfully makes a point about the separation between baby-changing facilities and accessible toilets. Does he accept that that depends on whether the building itself is accessible to someone like myself, a wheelchair user? Could he write to me to tell me how long he thinks I should have to wait, as a wheelchair user, before I can by law access licensed premises, given that the Government are refusing to use the Licensing Act, as recommended by a committee of this House, to enforce access on licensed premises?

[The Earl of Minto (Con)]

My Lords, my noble friend makes a very good point. One of the challenges is that a lot of pubs are in historic buildings and are listed. Therefore, it is extremely difficult to get through the planning laws so that doorways and steps can be taken out to give free access. I say again that every opportunity is taken to provide disabled access.

[Baroness Burt of Solihull (LD)]

My Lords, fathers change babies too, and yet baby-changing facilities are often situated in ladies toilets. Does the Minister think that we should have an inclusive place where fathers and mothers can change children—and in a nice environment, rather than some of those that some mothers have to bear up with?

[The Earl of Minto (Con)]

My Lords, again, that is a very good point. The issue is predominantly driven by space and, to some extent, finance and running costs. The Welsh Government did a very interesting study a few years back, in 2019-20, where they estimated that it costs between £2,500 and £5,000 to put in baby-changing facilities. We all know that the majority of small hospitality businesses are SMEs, and that sort of cost, let alone the ongoing cost of maintenance, cleaning, refuse collection and that sort of thing, at times makes it restrictive.

[Lord West of Spithead (Lab)]

My Lords, one of the joys is that these babies are being born into a free and wonderful country. Some 79 years ago today, 7,500 ships —the bulk of them British—landed the American, Canadian and British armies in Europe, at Normandy. Does the Minister agree that that helped lead to the destruction of the vile Nazi state? It is well worth commemorating that. Would it not be a good idea to have some more ships?

[The Earl of Minto (Con)]

Although that is not entirely within my brief, I entirely agree.

[Lord Hannan of Kingsclere (Con)]

My Lords, I wonder whether the Normandy landings would have been so successful had they all been obliged to have baby-changing facilities on every vessel. This idea of state regulation for baby changing takes the nanny state to a literal level. Can my noble friend the Minister confirm that, in the other place, the Government were elected on a manifesto promising minimal regulation, and that providers of services have every incentive to offer their customers the best deal they can afford without needing to be told what to do with the full coercive power of state law?

[The Earl of Minto (Con)]

My Lords, I entirely agree. In fact, my role is about regulation and reducing the amount of it. We should all agree that, by reducing regulation, business becomes easier and more productive, everybody’s salaries improve and there are increased job opportunities.

[Lord Sahota (Lab)]

My Lords, I declare an interest: my wife runs a leased café in Telford. When I am not in your Lordships’ House, I help her out. I totally agree with baby-changing facilities but there should also be a public convenience because, since the severe cuts to public authority budgets in 2010, we have been short of public conveniences up and down the country. I know this for a fact because people come running into my wife’s café looking for a public convenience. There should be one funded by the local authority. I hope that the Minister agrees with me.

[The Earl of Minto (Con)]

My Lords, I do. Most shopping centres now provide not only a full range of toilet facilities but baby-changing facilities too; that is absolutely right and proper. The planning law is operating correctly. On levelling up, £30 million has been set aside for precisely what the noble Lord wants. I am sure that we will continue to move towards a more available service.

European Court of Human Rights: Rule 39

Tuesday 6th June 2023 Lords Chamber

Question

14:47

Asked by

[Baroness Chakrabarti]

To ask His Majesty’s Government what assessment they have made of the benefits of the jurisdiction of the European Court of Human Rights, provided by Rule 39 of the Rules of Court, to grant interim measures where there is imminent risk of irreparable harm to a claimant in an ongoing application.

[Baroness Chakrabarti (Lab)]

In memory of my late noble and learned friend Lord Morris, I beg leave to ask the Question standing in my name on the Order Paper.

[The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Bellamy) (Con)]

My Lords, if I may, I associate myself with the tribute to the late Lord Morris.

The Government recognise that interim measures can be an important mechanism for securing individuals’ convention rights in exceptional circumstances. Nevertheless, the Government want the interim measures process to achieve a better balance between transparency, fairness and the proper administration of justice. Ministers, including the Prime Minister, have had constructive discussions with the Strasbourg court about reform. The court’s regular internal review of procedures began to look at the interim measures procedures in November 2022.

[Baroness Chakrabarti (Lab)]

As always, I am grateful to the Minister for his Answer. Does he agree with me that the current group of interim measures against the Russian Federation precluding the execution of prisoners of war is very important, and that, notwithstanding Russia’s current status outside the Council of Europe, anyone who thinks about ignoring those interim measures should think again? In the spirit of reciprocity, notwithstanding the discussions about process, will the Minister also think again about legislating to allow British Ministers to ignore interim measures from the Court of Human Rights?

[Lord Bellamy (Con)]

My Lords, if I may take the last question first, that issue will be explored in more detail in Committee when we get to Clause 53 of the Illegal Migration Bill. I remind the House that the Rule 39 power is a very important power, particularly in relation to the circumstances affecting Russia. However, it raises at least five quite difficult legal questions. First, what is the basis of the legal power? Secondly, what is the procedure with which the power is exercised? Thirdly, what is the competence, in the civil sense of the term, of the single judge? Fourthly, what is the effect in domestic law of such an order? Fifthly, what constitutes a breach of the order? None the less, the Government’s focus is on constructive and helpful discussions with the Strasbourg court on improving the process.

[Viscount Hailsham (Con)]

My Lords, does my noble and learned friend agree that in principle, an interim order should be made only after a hearing at which both parties are present and can make their case? If, in exceptional cases, an interim order is made on an ex parte basis, does he agree that the return date should be a swift one and that both parties should then be able to make their representations to the judge?

[Lord Bellamy (Con)]

My Lords, I agree in principle with the comments made by my noble friend.

[Baroness Ludford (LD)]

My Lords, the Government play fast and loose with the European Convention on Human Rights and the Human Rights Act. This has not inhibited them in invoking Article 8 of the ECHR—the right to private and family life—in their application for judicial review against the Covid inquiry. Article 8, as well as judicial review, has been demonised by successive Tory Governments—I seem to recall something about a cat, from Theresa May when she was Home Secretary. Will the Government make it a hat-trick of hypocrisy by seeking interim measures under Rule 39 from the Strasbourg court if they do not get satisfaction domestically over that Covid inquiry JR?

[Lord Bellamy (Con)]

With respect to the noble Baroness, that question does not arise. The Government have no intention of going to Strasbourg on that issue. Article 8 is a very important part of the convention, which is also part of domestic law through the Human Rights Act. The subject of today’s question is the Rule 39 power, which is quite a difficult question.

[Lord Anderson of Swansea (Lab)]

My Lords, with his usual reasonableness, the Minister appears to accept that such emergency and interim measures are not uncommon in international legal matters. He confirmed that the difference this time is that a group of right-wing people, led by the Home Secretary, take issue with one decision by a judge seeking to protect the human rights of other individuals.

[Lord Bellamy (Con)]

My Lords, interim measures play a very important part in the international jurisdiction. I respectfully point out that as far as I know, the process by which the Strasbourg court grants interim measures is different from that of the International Court of Justice, the Inter-American Court of Human Rights and the African Court on Human and Peoples’ Rights, all of which provide for a proper hearing, a return date, and reasoned judgments—which are sadly lacking at the moment in the Strasbourg process in some cases.

[Lord Wolfson of Tredegar (Con)]

My Lords, the Minister is quite right to point out that there are important jurisdictional questions regarding the Rule 39 injunctions. However, focusing on the process, is it not a real problem that these orders are made by an unnamed judge? The state has little opportunity to make representations either before or after the order is made. As my noble friend Lord Hailsham said, the return date can be a long time in the future. The process surely needs reform. Does the Minister therefore agree that the Government are right to be engaging with the Strasbourg court to improve the processes of that court?

[Lord Bellamy (Con)]

My Lords, I entirely agree with my noble friend Lord Wolfson, particularly where the interim measures order, in the circumstances that he relates, overrides three reasoned judgments by the domestic court at first instance, the Court of Appeal and the Supreme Court. None the less, the Prime Minister is fully engaged and discussed this very question in Reykjavík recently with the president of the Strasbourg court.

[Baroness Kennedy of The Shaws (Lab)]

My Lords, I have asked the Minister about the difficulty that we lose credibility if we do not engage with the use of this particular interim measure order. It has been so useful, for example in relation to Russia, because interim measures have already got in under the wire and now, of course, Russia has been expelled from the Council of Europe. Does the Minister agree that, eventually, when people are brought before the International Criminal Court, the fact that Russia has failed to abide by those interim measures will be evidence of their culpability in war crimes?

[Lord Bellamy (Con)]

My Lords, I have already agreed on Russia. I emphasise that the Government’s approach to this is to engage very closely, respectfully and constructively with the Strasbourg authorities and the court’s working party, which is considering this very question.

[Lord Anderson of Ipswich (CB)]

My Lords, does the Minister agree that interpretation of a treaty is informed not just by the court that is set up to adjudicate on it, but by state practice? The member Governments of the Council of Europe, including our own, have repeatedly confirmed the binding nature of interim measures under Rule 39—in the Committee of Ministers, and in the Izmir and Brighton declarations. Is the Minister proud of the United Kingdom’s record of compliance with interim measures, particularly in comparison to some founding members of the European Union?

[Lord Bellamy (Con)]

On the latter point, I do not presume to cast any kind of judgment on or make any comparison between the United Kingdom and other contracting states. On the general point about acceptance in practice of the position of interim measures under the convention, there are two legal views.

[Lord Browne of Ladyton (Lab)]

My Lords, the context of this Question requires consideration of more than one case. Between 2020 and 2022, of the 161 applications for interim measures against the UK Government, only 12 were granted by the European Court of Human Rights. Secondly, the Minister’s responses thus far indicate that the Government no longer stand by Clause 24 of the Bill of Rights Bill, which, if enacted, requires courts to ignore interim measures. Until now, we have been told that that is an expression of the Government’s manifesto commitment to reform the Human Rights Act.

[Lord Bellamy (Con)]

My Lords, on the first aspect, if I may speak on behalf of the United Kingdom and all Governments, the Government have a commendable record on interim measures. I fully agree that you cannot judge the underlying legal and practical questions by just one case. On the issue of the Bill of Rights Bill, I think the focus should now be on Clause 53 of the Illegal Migration Bill, which I am sure we will discuss in great detail in Committee.

[Lord Faulks (Non-Afl)]

My Lords, it is most important that we maintain a good relationship with the European Court of Human Rights. The context of this Question follows the decision of the judges in this jurisdiction about the flights to Rwanda. An anonymous judge then gave a ruling that, on the face of it, was not entirely compliant with natural justice. However, is it not right to say that the Home Secretary entirely accepted that ruling? There was no question of ignoring it. The Government have proceeded by trying to improve the process in a way that is more satisfactory and complies with most people’s notions of how interim relief ought to be obtained.

[Lord Bellamy (Con)]

My Lords, I respectfully agree with the comments of the noble Lord, Lord Faulks.

Scottish Government: Expenditure

Tuesday 6th June 2023 Lords Chamber

Question

14:59

Asked by

[Lord Foulkes of Cumnock]

To ask His Majesty’s Government whether they intend to take further action on expenditure by the Scottish Government in relation to reserved matters.

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Scotland Office (Lord Offord of Garvel) (Con)]

My Lords, as the Prime Minister has made clear, we will continue to work constructively with the Scottish Government in tackling all the shared challenges that we face. However, in light of the recent Supreme Court ruling, I am concerned at the decision to appoint a Minister for Independence. The Secretary of State for Scotland’s view is that taxpayers’ money could be spent more wisely on delivery for the people of Scotland and on devolved services.

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords, since it is absolutely clear that the Minister agrees with me, and I think with this whole House, that the Scottish Government should not be spending UK taxpayers’ money on reserved areas, is it not quite outrageous that they are spending £100,000 on a so-called Minister for Independence to go around the country in a party-political campaign to break up Britain? Even worse, there are 20 United Kingdom civil servants supporting him. Since there is only one body that can do anything about it—that is the UK Government, the Minister and his Secretary of State—when is he going to take some action?

[Lord Offord of Garvel (Con)]

I thank the noble Lord for his tenacity on this subject, because I have now been in post for 18 months and this is the sixth Question I have answered for the noble Lord, Lord Foulkes, on pretty much the same theme. It is a good theme: what do the UK Government do when they believe that the Scottish Government stray from devolved into reserved matters? We made some progress the last time we spoke in this Chamber; the previous Deputy First Minister, John Swinney, confirmed that he had taken away the £20 million that was going to be spent on the referendum on independence. But then, last week, we had the new head of the Scottish Civil Service, JP Marks, defending the appointment of the Minister for Independence, so we have sort of gone up a ladder and down a snake.

The issue here is that devolution, as devised by the noble Lord’s party, was conceived to be a construct in which the UK and Scottish Governments would work together in unity. It was not envisaged that we would have a situation in which the Scottish Government would seek every opportunity to find division and diversion away from Westminster, and therefore there are no practical levers or mechanics built into the devolution architecture for the UK Government to directly intervene in devolved matters, except through the courts. We already had the ruling in the Supreme Court. The UK Government’s position is to continue to ask the Scottish Government to focus on the real priorities of the people of Scotland and stop this obsession with independence.

[Lord Howell of Guildford (Con)]

My Lords, I acknowledge the death of Lord Morris KG, who was a remarkable Member of this House. Could it be that we are getting to the time when there is a need to revisit the demarcations as laid down in the devolution legislation? There seem to be constant disputes going on, particularly in the area of trade treaties, as well as foreign policy generally and memoranda of understanding, as to what is and is not reserved in rapidly changing industrial and economic circumstances. Can my noble friend consider that?

[Lord Offord of Garvel (Con)]

I thank my noble friend for that question. In the Scotland Act, the devolution settlement is actually very simple. You can put it on one piece of A4; on the left you have devolved matters, and on the right reserved matters. The issue here is that since we have come out of the EU, in effect we have had to create a single market for the UK. The SNP loves the EU; it wants to be in a single market with 27 or 28 states, and agrees that there should be no divergence within that system. Post devolution, we now have a scenario in which we have four assemblies making laws in the UK but we want to keep the UK together. So now they are promoting a whole series of legislative moves that create divergence, which the people of Scotland do not want, especially in trade, not least as 60% of Scotland’s trade is with the rest of the United Kingdom and does not recognise borders.

[Lord Bruce of Bennachie (LD)]

My Lords, the Scottish Government have squandered hundreds of millions of pounds on mismanaged projects. They had a £2 billion underspend last year, have squeezed local government savagely and have made Scotland the highest-taxed area of the United Kingdom. Is it not clear that the current Scottish Parliament has neither the will nor the capacity to hold its Executive to account, and does not a wider consideration therefore need to be taken into account?

[A noble Lord]

Yes.

[Lord Offord of Garvel (Con)]

I thank my noble friend for his helpful contribution there.

The reality is that Scotland is the best-funded part of the United Kingdom; for every £100 spent in England, £125 is spent in Scotland. That is not a subsidy; it is an equalisation payment, because the whole idea of the UK is that you get the same services whether you live in Streatham or Stornoway. It costs a lot more to deliver them in Stornoway than in Streatham, so we have to pay more for that. There has been no austerity put on the Scottish Government by the UK Government; in the last six years, Scottish spending on public services has gone up by 8%, against 6% for the UK, so that is not austerity. If the Scottish Government decide to choose to increase their welfare spend by 15% and their education spend only by 3%, that is a choice for the Scottish Government and they should be held to account at the ballot box.

[Lord McAvoy (Lab)]

My Lords, does the Minister not understand what is happening here? The SNP Government are spending public money on issues they do not have a legal mandate for. Why is this Government, a unionist Government, not using their powers to put a stop to public money being used to divide our country? Action is required now.

[Lord Offord of Garvel (Con)]

The Scottish Government will argue that every area of legislation they are putting forward is within the devolution settlement. We sometimes disagree with that, and where we disagree with it vehemently, as we did on GRR, we invoke Section 35. That was the first time in 237 Bills that received Royal Assent and was not done lightly; that was done in a case where they strayed across the line and were making legislation for Scotland that had a negative impact on England. We will continue to monitor this. Fergus Ewing, who is part of SNP royalty, would blame the Bute House agreement with the Green Party—which he describes as wine bar revolutionaries—for putting forward “progressive” legislation designed to diverge from the UK, and that is what we must put an end to.

[Lord Forsyth of Drumlean (Con)]

My Lords, does my noble friend think it reasonable that the Scottish Government, who cannot run ferry services to the Western Isles, where the roads are full of holes and the health service and education are in crisis, should have an office in Beijing? Why on earth should my taxes support an office in Beijing for the Scottish Government?

[Lord Offord of Garvel (Con)]

Again, this is an issue of there being no SNP representative in this House. It is a bit like playing “Hamlet” without the prince; there is nobody here to put the Scottish Government’s case. They would say that under the devolution settlement they are allowed to promote Scotland overseas, in particular in relation to trade, and that they have eight embassies that they are using to promote trade across the UK. It came to our attention that it was not entirely the case that it was only in trade matters, and the Foreign Secretary has taken steps to pull that back into line.

[Baroness Smith of Basildon (Lab)]

My Lords, the questions asked by my noble friends Lord Foulkes and Lord McAvoy related specifically to the Minister for Independence. There are two issues here. One is the cost, particularly in times of constrained public finances, and what budget the money comes from. There is also a practical point. The Minister has spoken previously in this House about the independence of the Civil Service. Concerns have been raised in regular discussions between the Cabinet Secretary and the Scottish Government’s Permanent Secretary. Is the Minister aware of whether such concerns continue to be raised? If so, how does the Cabinet Office ensure that individual civil servants are not put in an invidious position regarding supporting political campaigns?

[Lord Offord of Garvel (Con)]

The response to that question given by the head of the Civil Service in Scotland, JP Marks, was that he is entirely impartial and is there to do the bidding of the party in power, elected at the ballot box. It is in the manifesto of the SNP that it wants to break up the United Kingdom and hold an independence referendum, even though only a third of Scots want that. It has been in power for 15 years and has not been able to move it forward from a third, which means that the project has effectively failed and which is why we say: please get back to the day job of running the country more efficiently.

[Baroness Bennett of Manor Castle (GP)]

My Lords, I am happy to put the case for the progressive force of the Greens in the Scottish Parliament in your Lordships’ House. The Minister mentioned the deposit return scheme. I am sure he would want to take this opportunity to correct a misstatement by the Secretary of State for Scotland on BBC Scotland’s “Sunday Show”, which suggested that the glass recycled under the scheme was going to be crushed into aggregates. The head of Circularity Scotland has said that threatened £10 million of investment, when the figures are that on launching the scheme 90% of the glass is to be reused, and 95% as the scheme goes ahead. Do the Government understand those facts and are they dealing with their consideration of this case on those facts?

[Lord Offord of Garvel (Con)]

The chief executive of Circularity Scotland said that the Scotland DRS could work very well without glass. We recommend that we all work together to put in a unitary scheme, reminding ourselves that we still have one United Kingdom.

Kosovo and the Western Balkans Region

Tuesday 6th June 2023 Lords Chamber

Question

15:09

Asked by

[Baroness Helic]

To ask His Majesty’s Government what assessment they have made of the recent unrest in northern Kosovo; and what steps they are taking to support stability, democracy and human rights in (1) Kosovo, and (2) the Western Balkans region.

[The Minister of State, Foreign, Commonwealth and Development Office (Lord Ahmad of Wimbledon) (Con)]

My Lords, we are working closely with international partners to de-escalate the situation in northern Kosovo and encourage a return to dialogue. The noble and gallant Lord, Lord Peach, visited Kosovo on 30 May and met political leaders, the commander of NATO’s KFOR mission and other key actors. The Government use a number of diplomatic, programme and other tools to encourage and support crucial rule of law and human rights reforms across the western Balkans.

[Baroness Helic (Con)]

I thank my noble friend for his update and pay tribute to NATO soldiers, including our own. The incident which resulted in 30 NATO peace- keepers being injured appears to have been a co-ordinated attack supported and inspired by Belgrade, yet both the United States and the EU seem to have chosen to ignore Belgrade’s hand in this flare-up and have imposed, and threatened to impose, sanctions on Kosovo. It remains unclear what our Government’s position is on this matter. I would be grateful if my noble friend could clarify it.

I would also welcome a swift increase in the number of NATO troops in Kosovo. However, I am deeply concerned that right now in Bosnia-Herzegovina, where the threat of Kremlin-backed secession is real, our ability to deter any such act is wholly inadequate. What consideration has been given to increasing our contribution to NATO HQ in Sarajevo or to Operation Althea?

[Lord Ahmad of Wimbledon (Con)]

My Lords, I believe I speak for the whole House when I join my noble friend in paying tribute to the incredible work done across the world by both NATO troops and those deployed through key missions. The situation in Kosovo is of course very alarming, although the latest report I have is that it is calmer. There is direct engagement by our key partners; we are working closely with the EU and the United States in this respect. Their representatives are on the ground speaking to both sides. We have also called for a four-step de-escalation.

Both sides have a role to play. Kosovo should perhaps now enable its mayors to work from locations outside municipal offices until such time as these issues can be resolved. Importantly, Serbia needs to reverse its decision to raise the level of readiness of its armed forces. The read-across to Bosnia-Herzegovina is very clear. Of course, I know that my noble friend engages consistently and extensively in that area. The UK fully supports EUFOR and KFOR in Kosovo; my right honourable friend the Minister for Armed Forces recently announced our continuing commitment to KFOR in Kosovo.

[Baroness Coussins (CB)]

My Lords, one recommendation from the inquiry into the western Balkans by the International Relations Committee was that the UK should actively help to preserve the large amount of evidence held by EULEX on conflict-related sexual violence in Kosovo. Witnesses suggested that it would be better safeguarded by the UN, or its loss would feed the continuing culture of impunity. Can the Minister say what has happened to safeguard this evidence and, in the current circumstances, what is being done to prevent further conflict crimes of sexual violence?

[Lord Ahmad of Wimbledon (Con)]

My Lords, as the Prime Minister’s Special Representative on Preventing Sexual Violence in Conflict, I assure the noble Baroness that we have taken these measures seriously. Some of the initiatives that we have taken, such as the introduction of the Murad code, do exactly that—protecting and sustaining the testimonies of those who suffer the most extreme violations to allow for successful prosecutions to take place. I myself have visited Kosovo twice, once in 2018—indeed, with my noble friend Lady Helic—and, subsequently, in 2019. We are engaging on the ground. The current situation is calm, but we want to ensure that there are no violations, and none that lead to the kind of crimes that we have seen in the past.

[Lord Anderson of Swansea (Lab)]

Does the Minister agree that the present brokerage is riding two horses simultaneously? On the one hand, he is trying to move closer to the European Union; on the other, he is following the traditional Serbian warmth in relations with Moscow. Does he see any hand of Moscow in the current disturbances?

[Lord Ahmad of Wimbledon (Con)]

My Lords, one thing is very clear in Kosovo and, as my noble friend said, in Bosnia-Herzegovina. When you visit on the ground, as I did last year in Sarajevo, you can feel and see the growing assertiveness of Russian influence in these key areas, which is very much in evidence. While we call for Russia to respect the sovereignty of these key nations, it is evident that those leading some of the Serb causes, such as Mr Dodik in the so-called Republika Srpska, are becoming ever more assertive. That is why the United Kingdom took steps to sanction such individuals.

[Lord Purvis of Tweed (LD)]

My Lords, the replenishment of KFOR is regrettably necessary, and I welcome the fact that the UK has announced that it is going to replenish the 80 personnel there. I commend the Minister on his commitment to peacekeeping forces, as demonstrated just before Recess at the event where he, I and the noble Lord, Lord Hannay, met peacekeepers of the UK contributions. Just two years ago, the contribution from the UK was over 400 personnel but, according to the UN Association, the UK is now 50th in the world for our contribution to global peacekeeping forces. Will he please tell his colleagues in the MoD that now is the time to increase the number of UK personnel able to be deployed for peacekeeping forces around the world?

[Lord Ahmad of Wimbledon (Con)]

My Lords, we take considered decisions on the deployment of UK forces for international missions in terms of our support for both NATO and the United Nations. I am proud of the fact that we have consistently been strong supporters of troop-contributing countries in the UN system—we are one of the largest contributors. We have troops who serve through various UN mandates as well. We look at the particular mandate to see what is required. The other thing to note is the strong technical and training support that the MoD and UK troops provide to many nations across the world, which is very much valued.

[Lord Peach (CB)]

My Lords, I declare my interest as the Prime Minister’s special envoy to the western Balkans. I very much support the Minister. As a frequent visitor to the region, I assure noble Lords that the United Kingdom’s role there is appreciated; we just do not always advertise it on Twitter.

We should thank our allies in NATO for keeping the peace for over 20 years. The quality of our contribution remains important. It is critical now to stop the violence and to de-escalate. We continue to support normalisation between Kosovo and Serbia, which takes many forms, and again we call for the Kosovo Serbs to be readmitted into security structures, particularly the police.

We must break the cycle of violence in the Balkans. We need to be alert, as a noble Lord has said, to the risk posed by Russia, exploiting the region as a second front through warfare by other means.

[Lord Ahmad of Wimbledon (Con)]

My Lords, there is little that I can add to the words of the noble and gallant Lord apart from thanking him for the incredible role that he plays on the ground. I believe that he has made four visits in the recent past to Kosovo. I agree with him that the United Kingdom has stood side by side with Kosovo as it seeks to find its place in the international world, and we continue to campaign for its global recognition as an independent nation. However, I also agree that we must ensure that what happened in the past is not repeated.

[Lord Collins of Highbury (Lab)]

My Lords, I welcome the FCDO’s role with France, Germany and Italy last week in their joint statement. The Minister referred to the EU-facilitated dialogue to normalise relationships. Can he tell us a bit more about how the UK is directly involved in supporting that dialogue? How closely are we working to ensure that it achieves its objective?

[Lord Ahmad of Wimbledon (Con)]

My Lords, I assure the noble Lord that the current engagement is live; it has been taking place yesterday and today, and I will update the House on certain outcomes. We are working closely with both our US and EU partners in this respect, and recently my right honourable friend the Prime Minister attended the meeting of the EPC, where there was engagement on this important issue.

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords, does the Minister agree that the recent decision by the Committee of Ministers of the Council of Europe to accept the recommendation of the Parliamentary Assembly that Kosovo should join the Council of Europe is a step forward to developing Kosovo as a free, independent and democratic country?

[Lord Ahmad of Wimbledon (Con)]

My Lords, I can confirm that His Majesty’s Government fully support that decision.

[The Earl of Sandwich (CB)]

My Lords, following on from the question from the noble Lord, Lord Collins, does the Minister not think that the election issue is the critical one? If we still have any influence outside the EU, we should bring the two Prime Ministers together to discuss those elections and make sure they happen.

[Lord Ahmad of Wimbledon (Con)]

My Lords, I assure the noble Earl that our influence with our EU partners and other partners, across Europe and beyond, is substantial. Recently, my right honourable friend the Prime Minister and I engaged directly at the Council of Europe meeting. I was also at a recent meeting of the EU with Indo-Pacific nations, where we discussed co-ordination and strategy. Equally, I agree with the noble Earl on this issue; we are using our convening powers with key partners to ensure that both sides meet. We need inclusive elections. The conditionalities being set by the Kosovan Serbs are in some cases unrealistic, but inclusive elections are needed so that all people of Kosovo, irrespective of their background, culture or community, can be represented effectively.

Supported Housing (Regulatory Oversight) Bill

Order of Commitment discharged
Tuesday 6th June 2023 Lords Chamber

Order of Commitment

15:20

Moved by

[Lord Best]

That the order of commitment be discharged.

[Lord Best (CB)]

My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Unless, therefore, any noble Lord objects, I beg to move that the order of commitment be discharged.

Motion agreed.

Retained EU Law (Revocation and Reform) Bill

Consideration of Commons amendments
Tuesday 6th June 2023 Lords Chamber

Commons Amendments and Reasons

15:21

Motion A

Moved by

[Lord Callanan]

That this House do agree with the Commons in their Amendment 1A.

1A: Leave out subsections (1B) to (1D)

[The Parliamentary Under-Secretary of State, Department for Energy Security and Net Zero (Lord Callanan) (Con)]

My Lords, in moving Motion A, I will also speak to the other Motions in this group. It feels very recent that we had Third Reading on the Bill, as the other place has returned it remarkably quickly.

Motion A covers this House’s Amendment 1. The original amendment was to require a Joint Committee to consider the revocation list and to arrange debates in both Houses with respect to anything that represented a change to the law before the legislation on it could be revoked. I thank the noble Lords who sponsored this amendment for not pushing it again today.

Motions B and B1 cover the Commons disagreement to Lords Amendment 6. I sympathise with the amendment proposed by the noble Lord, Lord Anderson, in lieu of Amendment 6 on its intent to help establish legal clarity. Indeed, one of the main purposes of the Bill is to simplify the statute book. However, in my view, such an amendment is not necessary. The amendment seeks to clarify that the new clause “Retained EU law dashboard and report”, inserted by Lords Amendment 16, will include those rights, powers and liabilities referred to in Section 4 of the European Union (Withdrawal) Act 2018. I am happy to reassure the noble Lord, Lord Anderson, today that the Government intend to ensure that rights, powers, and liabilities referred to in Section 4 of the 2018 Act will be included in future dashboard updates and accompanying reporting. The Government will include those rights, powers and liabilities that they have explicitly codified or intend to codify, as well as those they have decided not to codify because they are no longer fit for purpose. I hope that this provides the necessary clarity around which matters, originally retained under Section 4 of the 2018 Act, will be codified into domestic law. I thank the noble Lord for his valuable and collegiate engagement on this matter. I hope that this commitment provides him with the reassurance he is looking for and that he therefore will not press his Motion.

Turning to the Motion to amend the drafting of what was Amendment 16, I know that many noble Lords have strong views on Amendment 16 and the Motions concerning it. The other place inserted further measures to strengthen the reporting requirements and to ensure that the Government inform Parliament of their progress on using the powers in the Bill and their forthcoming plans on a more frequent basis. The Motion in my name therefore simply tidies that drafting and, on that basis, I hope that the House is able to support it.

Finally, I call on the House to reject the amendment proposed by the noble Lord, Lord Anderson. The Government recognise the significant role that Parliament has played in scrutinising instruments and are committed to ensuring the appropriate scrutiny under the delegated powers in the Bill, including any instruments made under the powers to revoke or replace. This amendment would impose a novel and untested scrutiny procedure on regulations proposed to be made using the powers to revoke or replace. This novel approach is, in our view, simply unnecessary.

The Government will ensure that any significant retained EU law reforms will receive the appropriate level of scrutiny by the relevant legislatures and are subject to all the usual processes for consultation and impact assessment. However, it is important that we ensure that the limited amount of parliamentary time available is used appropriately and effectively.

The existing sifting procedures in the Bill have been purposely drafted as a safeguarding measure for these powers and already contain adequate scrutiny. They allow for additional scrutiny for the exercise of the power to revoke or replace, while retaining the flexibility of using the negative procedure where there are good reasons to do so—for example, in repealing redundant rules that no longer have any purpose on the UK statute book.

In addition, in certain situations, notably the use of subsection (3), the affirmative procedure continues to be required. The existing procedure will give the UK Parliament the opportunity to take an active role in the development of this legislation. It is a tried and tested method of parliamentary scrutiny which, in my view, delivers good results for everyone and draws on the experience of our parliamentary committees. We will, of course, respect the judgment of the sifting committees relevant to the Bill, in the same way as we did for the EU withdrawal Act. Therefore, I do not consider the proposed amendments to be necessary. I hope this provides the House with sufficient reassurance on this matter.

[Lord Anderson of Ipswich (CB)]

My Lords, I will speak to Motions B1 and E1 in my name in this group. Having heard the Minister, I can be brief on Motion B1, which concerns a sometimes-neglected part of the Bill. Clause 3 is headed “Revocation of retained EU rights, powers, liabilities etc”. That clause is unaffected by the Government’s concession on the sunset and continues to provide for all directly affected provisions of EU law—whether they are found in the treaty, in directives, or in international agreements—to be revoked at the end of the year. My concern in tabling this amendment has been to know precisely what is being revoked and what will be proposed by way of replacement.

To that end, Motion B1, which builds on the helpful amendment originally proposed by the noble Baroness, Lady Noakes, seeks a guarantee that the directly affected provisions will be fully included in dashboard updates, as they have not been to date, and that the Government will give us clear warning in advance of those which they intend to carry over into our law and those which they may have decided not to carry over.

Unpicking provisions so deeply embedded in our law will not be a simple business. I declare an interest as a lawyer who sometimes needs to advise in this area. Such a commitment will be helpful to anyone who needs to understand what our law provides and how it is intended to be changed. I am grateful to the Minister and the Bill team for their constructive engagement on this issue, and for the clear commitments that he has just offered. In the circumstances, I am confident that I do not need to trouble the House with a Division on this issue.

Motion E1 is of a constitutional nature and concerns what, to some of us, has always been the most troubling feature of the Bill. It is nothing to do with the dashboard, direct effect or even the end-of-year sunset. It is rather the delegated superpower, headed “Powers to revoke or replace”, which currently appears as Clause 14. I remind the House of its most remarkable feature, subsection (3), which states:

“A relevant national authority may by regulations revoke any secondary retained EU law and make such alternative provision as the relevant national authority considers appropriate”.


That power will last until June 2026, which even we in the ivory tower of these Benches understand is some time after the next general election. It allows the Government to make regulations that Parliament cannot amend or, in practice, block, even when those regulations have quite different objectives from the laws that they replace, as the Bill makes clear.

15:30

I say “laws” because the measures whose replacement is authorised by this clause are no ordinary regulations concerned only with matters of detail. They include major instruments of policy, often arrived at by codecision between the Parliament and Council of the European Union—the equivalent in our system of primary legislation. They take the form of regulations only because of Section 2(2) of the European Communities Act, which was itself a prime target of Brexit, ironically, because it stripped sovereignty from our Parliament. The seriousness of what is proposed—permission to amend by statutory instrument numerous laws, in many fields, with the quality of primary legislation—is no doubt why, today, organisations from the RSPB to the TUC and the Law Society have come out in favour of this amendment.

The amendment contains an exceptional power, as the Minister said, but it is designed for exceptional circumstances. A Commons sifting committee would have the power to identify proposed regulations that are particularly deserving of parliamentary attention—perhaps because they are so substantially different from what went before, or because consultation or an impact assessment is lacking. Both Houses of Parliament could then agree on amendments—not an unprecedented power but one modelled on Section 27 of the Civil Contingencies Act 2004. This power would not be a precedent for the routine amendment of statutory instruments, any more than the Civil Contingencies Act has proved to be. Both these laws are in the same wholly exceptional category because both confer the power to make regulations on subjects that would normally be appropriate only for primary legislation—emergency powers in one case, and the unique circumstances of our departure from the EU in the other.

The precursor to this amendment, tabled by the noble and learned Lord, Lord Hope of Craighead, and signed by me and the noble Lords, Lord McLoughlin and Lord Hamilton of Epsom, was carried by a majority of 64. It did not meet with favour in the Commons, although there were some interesting speeches from the Conservative Benches there. We have listened and come up with something more modest. Its scope is limited to the one clause I have identified—not three clauses, as previously—and the sifting committee will be of the Commons only, not a Joint Committee. There is ample reason, I suggest, to ask the Commons to think again about what we meant when we took back control and whether the Commons is really willing to write itself out of the script, as the Bill would allow.

I only wish that this speech could have been made by the noble and learned Lord, Lord Judge. It would have been half as long, twice as amusing and four times as persuasive. So I end by recalling that, at the last Queen’s Speech, the noble and learned Lord asked, on his favourite subject of delegated powers,

“what is the point of us being here if, when we identify a serious constitutional problem, we never do anything about it except talk?”—[Official Report, 12/5/22; col. 130.]

It is time to act, and I propose to do so by testing the opinion of the House.

[Viscount Hailsham (Con)]

My Lords, I will very briefly support what the noble Lord, Lord Anderson, said. I agree with all of his detailed arguments, which were extraordinarily well put.

I will focus on two general points. First, in principle, I am very much in favour of increasing the control of Parliament over the legislative powers exercised by the Government. That is increasingly the case because Governments of all stripes are increasingly using secondary legislation to make very substantial changes to our laws. I want to see much greater parliamentary control.

Secondly, and differently, this issue goes to the amending power included in subsection (3) of the proposed new clause—I am very much in favour of that. For the many years I have been in Parliament, I have been deeply troubled by our inability to amend secondary legislation. What is being proposed by the noble Lord, Lord Anderson, is a mechanism; it may be rather a tricky one to use, but I hope it will be a precedent. It is one that I strongly support, because it is important for this House and the House of Commons to be able to amend statutory instruments. So if the noble Lord moves his amendment to a Division, I shall support it.

[Baroness Butler-Sloss (CB)]

My Lords, I too strongly support what the noble Lord, Lord Anderson, and the noble Viscount, Lord Hailsham, said. I cannot resist telling the House that I am chairman of the Ecclesiastical Committee, and some years ago the most reverend Primate the Archbishop of Canterbury was discussing a measure that was coming through our hands before going to Parliament, which had a clause that would allow the General Synod to make almost any changes to any law in England. We pointed out gently that it would not get through Parliament. Dear, oh dear, what are we talking about today? I would not have been quite as gung-ho about what could not happen in Parliament if I had come across this Bill and, I have to say, the Illegal Migration Bill.

The point that the noble and learned Lord, Lord Judge, was making about delegated powers—I remember that speech very well—is one that I am delighted the noble Lord, Lord Anderson, has taken up. The noble and learned Lord, Lord Judge, was saying that there will come a point when we will actually vote against secondary legislation—and maybe the time is just beginning to come. If we end up with having no power in Parliament, in either House, to decide whether laws that are different from those we have can be argued in either Chamber, what is the point of us being here? Consequently, I do feel that the House should support the noble Lord, Lord Anderson.

[Baroness Ludford (LD)]

My Lords, I thank the noble Lord, Lord Anderson, for the work he has done on Motion B1 with the listing of powers, rights and liabilities. I note that he will not press his amendment because he has got it to the point of getting a pledge from the Government.

Perhaps I might ask the Minister what the timescale is for putting these on the dashboard, because they are not currently on the dashboard. The last time they were searchable on the dashboard, only 28 rights, powers and liabilities were listed. They did not include, for instance, Article 157 of the Treaty on the Functioning of the European Union, which, as all noble Lords know, concerns the right to equal pay for equal work; it goes further than the Equality Act 2010 and is an absolutely crucial instrument for equal pay. They also did not include Article 6.2 of the habitats directive, which imposes an obligation to take appropriate steps to avoid the deterioration of habitats. Those are two examples of key rights and powers that need to be on the dashboard, and there must be many more. Can the Minister tell us how many he thinks will be listed and by when?

[Lord Lisvane (CB)]

My Lords, I am delighted to support Motion E1 in the name of my noble friend Lord Anderson of Ipswich. At a time when there is increasing concern about the balance between Parliament and the Executive, I was rather surprised that the elected House rejected the idea of a Joint Committee to sift proposals, which might well be of disadvantage to their constituents. I was also surprised—perhaps “saddened” might be the better word—that the Government saw fit to take that view of the amendment in the Commons. This Motion, as my noble friend outlined, returns to the charge, but provides a Commons-only Select Committee—a sifting committee—rather than a Joint Committee.

There has been much talk about amendable SIs. It may be part of the Government’s case, or be seen by the Government as strengthening their case, to portray them as a whole new category of legislative procedure, where SIs become like mini-Bills, with all the complications that would ensue.

Much as I appreciate the noble Viscount’s wish that these would be broad, sunlit uplands, I do not think that this is the case in this instance. As far as I am aware, there are only two examples of statute providing for amendable SIs, via Section 1(2) of the Census Act 1920 and Section 27(3) of the Civil Contingencies Act 2004. SIs under either of those Acts are truly amendable because, if an amendment is approved, it becomes immediately effective.

What this Motion proposes is a little different; it is much closer to the super-affirmative procedure applied to legislative reform and regulatory reform orders, which does not seem to have frightened the horses in either House. There is a difference, yes, because in that super-affirmative procedure it is a matter of discretion as to whether the Minister accepts the advice of the sifting committee as to amendments that might be made. Commons Standing Orders 141 and 142 provide for that difference of opinion between the Minister and the sifting committee. The Motion before your Lordships would remove that ministerial discretion—but I find it hard to see how allowing the two Houses to take the decision would be such a dreadful thing, unless of course the Government see it as infringing upon the prerogative of the Executive, which would confirm the worst fears of many.

Whatever one’s views on the issue, it is very important to keep a sense of proportion. I cannot imagine the heavy weaponry that is implied by some in this Motion being deployed at all often. The Government, if they had any sense, would want to reach agreement with a sifting committee rather than seeking the adversarial outcome of a vote on the Floor of the House. In any event, what would be so wrong about accepting the view of an all-party committee which had identified in a government proposal hazards for business, the environment, civil liberties or any of the other fields in which Parliament is supposed to be the guardian of our citizens’ interests?

The Minister criticised the proposal on the basis that it was novel and untested. If one is going to improve the effectiveness of Parliament, there will from time to time be procedures that are novel. If it were not the case, we would be living the rest of our lives encased in a sort of parliamentary aspic. He also said that it was untested. In a parliamentary environment, you cannot have a novel procedure unless it is untested so, with great respect to the Minister, I would dismiss that criticism.

I conclude with a short look ahead, as the noble Lord, Lord Anderson, invited your Lordships to do, to the further stages that might ensue. There is an urban myth to the effect that two exchanges is the limit. I had some involvement with the Corporate Manslaughter and Corporate Homicide Bill in 2007, and on that occasion there were seven exchanges between the two Houses. Other Bills have demonstrated more than two exchanges on a number of occasions. On something that raises an issue of constitutional principle—and I borrow the description of the noble Lord, Lord Anderson, in speaking to his Motion—it would be right if the Commons were invited on several occasions to consider whether it had got this right after all.

[Lord Hamilton of Epsom (Con)]

I congratulate the noble Lord, Lord Anderson, as did the noble Baroness, Lady Ludford, on the work that he has put into this. As he knows, I supported the original amendment and put my name to it, and I congratulate him on all the work that he has done since. I totally sympathise with all the sentiments that everybody has expressed. It is most regrettable—and I say this as somebody who campaigned to leave the EU—that we took the very undemocratically imposed EU law given to both Houses of Parliament, which we could neither amend nor reject, and now we are replacing that by giving that power to the Executive through statutory instruments under the negative procedure, which means that we cannot amend them or do anything about them at all. I do not think that that was what people voted for when they voted to leave the EU; I think that they wanted to restore parliamentary sovereignty, and this does not do it.

Having said all that, we are a revising Chamber; we asked the Commons to think again; they have thought again. It is a matter of regret to me that I have not even persuaded my leave colleagues in this House to support the amendment, let alone in the other place, and I do not think it is our job to play endless ping-pong. The House of Commons is elected; it has spoken, and I think we should go along with what it says.

15:45

[Baroness Jones of Moulsecoomb (GP)]

My Lords, I strongly support this Motion and I disagree with the noble Lord who has just spoken, because it is our job not to let things through that are actually dangerous or damaging for our constitution and for the British people. I think the Bill has a huge number of flaws. I know the Minister to be an honourable man and I am sure he believes what he is saying, but the point is that he cannot tell us that this Motion is not necessary and he cannot say he gives us all the reassurance: how do we know he is going to be in post within a few weeks?

And of course, then we have the next Government. One of the things that staggers me about the Bill is just how much power the current Government are giving into the hands of the next Government, which could of course be a Labour Government. Surely, when the next Government come into power, those opposite will bitterly resent the powers they have put into the Bill. Personally, I think it is a dereliction of MPs’ duties as legislators to allow this to happen, so I thoroughly support the Motion in the name of the noble Lord, Lord Anderson. I think we have to be very responsible here and say, no, we will not let this pass.

[Lord Cormack (Con)]

My Lords, “Do not take to yourself powers that you would not wish your opponents to have” is the substance of the noble Baroness’s speech, and I agree with that. I greatly admired the speech made by my noble friend Lord Hamilton at Second Reading. I admired his courage in putting his name to the amendment and I totally respect his view that one has to consider and judge how long ping-pong should go on. So, there is no disagreement between us on this issue, even though we were on opposite sides in the Brexit argument.

But I come down very strongly in favour of the points made by the noble Lord, Lord Lisvane, who, remember, is a very distinguished former clerk of the House of Commons and understands these procedural matters perhaps more than any of us. The noble Lord, Lord Anderson, called in aid the noble and learned Lord, Lord Judge, and we do indeed all miss his presence today and wish him a speedy return to full health and to vigorous debating in this Chamber. He has, perhaps above all of us, talked of the danger of Parliament becoming the creature of the Executive. That is to turn our constitution on its head, and it is something that none of us should be complicit in.

We do have a duty in this House, if we think the other place has got it wrong, to say, “Please reconsider”, and it is not in any way an aggressive use of our limited powers if we think their rethink, which did not take very long, has not been adequate. Therefore, I believe it would be entirely consistent with our relationship with the other place, and with our duty to Parliament, of which we are the second House, to say to our friends and neighbours along the Corridor, “We think you have got this wrong: you are giving power to the Executive which no Executive, be it Labour or Conservative, should have”. I do not want them to have it if they come into government, and I do not think it is right that we should have it. For those reasons, I shall support the noble Lord, Lord Anderson.

[Lord Jackson of Peterborough (Con)]

My Lords, I oppose the Motion in the name of the noble Lord, Lord Anderson of Ipswich. For what it is worth, I support the new iteration of Amendment 16, to which I put my name on Report, in Motion D.

I very much respect the noble Lord, Lord Lisvane, and indeed my noble friend Lord Cormack, but I think we are missing the bigger picture here. We are effectively asking the other place to invalidate a Bill, for reasons I will develop shortly, which it passed by 53 votes when the will of that House was last tested. As I have said before in this House, I think there is a danger of legislative overreach—of assuming powers and of imposing responsibilities and obligations on the elected House, fettering its discretion and, by so doing, interfering in its rights and obligations. Notwithstanding what my noble friend Lord Cormack said, yes, it is our duty and responsibility to ask the other place to think again, but we have already done that. It has thought again and debated the issue. I have to agree with my noble friend the Minister. He is far too polite to describe the approach outlined by the noble Lord as it truly is: extremely radical. He described it as a “novel” approach.

Let us think about what this Motion would mean in practice. If we are in the business of improving governance by scrutiny and oversight, unless we vote for a fatal Motion to kill the Bill—which is very unlikely, because the Opposition Front Bench would not support such a move—surely the logical corollary is that we want to improve it. The perverse application of the noble Lord’s amendment would result in quite the opposite. The opportunities to revoke and, importantly, to reform the caucus of EU retained legislation would be slowed. There would be a process of delay and obfuscation, and it would not be effective government. In fact, it would be a betrayal of the responsibilities and duties we have as the upper House in scrutiny and oversight. Indeed, even above that, the Motion would invalidate the very raison d’être of the Bill, which has to exist. The noble Lord’s amendment is too rigid. It is instructive, and it would assume the powers of Ministers. In some respects, it would make this House itself part of the Executive in a way that Amendment 16 did not, which was much more permissive, declaratory and flexible in seeking to get to the same objectives.

For those reasons of legislative overreach, inadequate scrutiny and oversight, and delay and obfuscation if we were to go down the path of this Motion, I respectfully ask your Lordships’ House to reject it and support the Government.

[Lord Inglewood (Non-Afl)]

My Lords, having sat quietly listening to the debate, which has focused on all kinds of minutiae over the past few weeks, I cannot help but conclude, taking an overview, that if we look at the history of Parliament we see that for hundreds of years it has had a tense relationship with the Executive. Over that period, it has developed a framework within which, in the interests of the British people as a whole, the Executive exercise their powers. We have had civil wars over it; people have died in that cause. Now we are being asked, it seems to me, to put that process into reverse. We are being asked that Parliament should move in the opposite direction and return to a system of governance where the Executive have ever more increasing control over everyone’s lives. I do not think that is the way we in this Parliament should respond to those kinds of circumstances, and it is my personal view that to do so is craven.

[Baroness Altmann (Con)]

My Lords, from my perspective, the way in which the noble Lord, Lord Anderson, moved and explained his Motion was extraordinarily powerful. My summation is that this is an existential issue—we are way down a slippery slope. I respect the views of the elected Chamber. Had we been subject to a general election or a referendum which asked the British people whether they wanted control given to an Executive, consisting of a number of Ministers, or to each of their elected Members of Parliament equally, and the British people had supported the idea that we become an elected dictatorship of some kind, that would be a different matter. However, I do not believe that that has been put to the British people. I believe that the constitutional safeguards which this House represents, and which are there to protect ordinary citizens, need to be better safeguarded. I will therefore support Motion B1.

[Viscount Stansgate (Lab)]

My Lords, I was not intending to speak so I shall be brief. This House is not elected—we know that—but that is not to say that it does not have a role, which it does. We heard a speech just a moment ago suggesting that ping-pong, the stage in which we are at the moment, is a game that should have just one exchange and leave it at that. There is no urgency about the time that it might take to ask the elected Chamber to think again. I am in favour of allowing the other place to think again. When you consider the wider history—we have just had reference made to it, quite rightly—we are going to allow a Bill of such magnitude to go through, shifting the balance of power between the Executive and the legislature in such a way, that people later on will look back and wonder why on earth the House did not express some degree of steadfastness in its view that the Government should think again. I shall vote for the amendment for that reason.

[Lord Fox (LD)]

My Lords, this has been a fascinating debate, and I will not prolong it much. On Motion B1, the noble Lord, Lord Anderson, and indeed the noble and learned Lord, Lord Hope, who is unable to be here today, deserve, as they have already received, great congratulations. The Minister also should be commended on his flexibility in assuring and reassuring us that we will get the information we need. I hope the Minister can either talk to my noble friend’s question as to the timing and mechanics of keeping the dashboard up to date or give us a detailed letter at some point to let us know how that would happen; that would be helpful.

The substantive debate is around Motion E1. Again, the noble Lord, Lord Anderson, outlined with great detail and clarity the mechanics of how his amendment would work. He made it very clear that the debate in the Commons on the previous amendment has been taken on board very thoroughly in the formulation of this further amendment.

The noble Lord, Lord Jackson, used the word “invalidate” twice, but if he looks at this amendment again he will find that it does not invalidate anything around the purpose and intent of the Bill. What it would do is bring Parliament back into the frame, which is what the majority of your Lordships have been talking about today. That is important. Clause 15 takes very wide powers to revoke and replace retained EU regulation, and as the noble Lord, Lord Anderson, said, the level of this regulation is not normal bits-and-pieces regulation but is essentially primary law. It is not appropriate for statutory instruments to be used to not just change but completely replace primary law without a substantial role for Parliament.

The Minister talked about parliamentary scrutiny being at an appropriate level. It is clear that your Lordships have set out that we do not consider the current level to be appropriate, which is why this amendment is very important. The Government see it as a slippery slope, and will use that argument, but clearly, the exceptional nature of this situation means that it is not so.

16:00

Through this debate, I have come genuinely to respect the consistency and thoroughness of the view of the noble Lord, Lord Hamilton. He has been absolutely right about where the power should be in this argument. He talked about endless ping-pong, and I respectfully suggest that we are not proposing that; we are proposing one more ping and one more pong, and that is what we are debating now. That is why I side very much with the argument of the noble Lords, Lord Lisvane, and Lord Cormack, and others, and that is why we on these Benches will be supporting the amendment.

[Baroness Chapman of Darlington (Lab)]

My Lords, I want to speak briefly to Motion E1 and to start by thanking the noble Lord, Lord Anderson, for his work on this amendment and throughout consideration of the Bill. Noble Lords will be aware that the amendment differs from the one we debated in Committee and on Report. They will also know that, since the Bill was first published, we have been concerned that it gives Ministers far too much power without reference to Parliament. Clause 15 was especially difficult for parliamentarians to accept, given the extraordinarily wide-ranging powers to rewrite regulations which, in effect, could have similar power to primary legislation. This point was made by the noble Lord, Lord Anderson, but it is worth repeating.

Motion E1 allows for a committee to consider regulations when they are rewritten by Ministers and, where necessary, to refer them to the House for consideration. This is a more modest suggestion than that proposed and agreed by this House at Report. As we have heard, a not dissimilar process was used for the Civil Contingencies Act 2004 and, as the noble Lord, Lord Lisvane, informed us, the Census Act.

Our view is that this approach is proportionate, not obstructive of the Government’s intentions and should be acceptable to them. We are concerned that the Commons has so far continued to push back on parliamentary scrutiny and views the procedure proposed by this House as inappropriate, but we hope that the newly constructed amendment proposed by the noble Lord, Lord Anderson, will be welcomed by the Government and the other place.

The Commons has expressed a view, but we are returning to it a compromise. We on these Benches consider it to be the appropriate, reasonable and responsible thing to do. Following the question of the noble Lord, Lord Jackson, about whether we are imposing ourselves on the other place, I note that it adjourned a couple of hours ago and seems to have adequate time in its schedule to consider a rather modest suggestion from this House.

[Lord Callanan (Con)]

My Lords, once again, we have had a full, worthy debate on the Bill. I will keep my response brief, as many of these points are well worn and we have largely covered them in opening the debate.

I say to the House that this is not just an ordinary legislative amendment; it is about the procedures of Parliament. It is not even about the procedures of this House; it is about the procedures of the other place. The amendment seeks for this House to say to the House of Commons, “We think that you should set up by legislation an entirely untested and novel way of conducting your scrutiny of secondary legislation”, when the House of Commons has already said it does not wish to do that and does not think it appropriate. It is entirely inappropriate for us to do that when we have already heard the answer once.

The Bill is vital, and now that we have taken back control of our statute book, it is essential to update and modernise by amending, repealing or replacing those rules and regulations that are no longer fit or were never fit for the UK. This will allow us to create a new pro-growth, high-standards regulatory framework to give businesses the confidence to innovate, invest and create jobs. It will provide legal certainty and clarity across the statute book, ensuring we have consistent rules of interpretation across the UK body of law.

Let me mention briefly some of the points raised in the debate. On Motions B and B1, I thank the noble Lord, Lord Anderson, for his speech. I hope that the House will move forward with Motion B.

Let me reply briefly to the question from the noble Baroness, Lady Ludford, on the timescale for this work. We will add Section 4 rights to the dashboard as identified at least as frequently as every six months, as per the reporting requirement clause that is already in the Bill.

With regards to Motion E1, as I have already said, the Government listened to the views of this House on a number of issues in the Bill. We have already modified the schedule massively to take account of the many concerns that were addressed. I have to say, I consider it an unfair characterisation that the Government have ignored this House—far from it. It is much to the contrary.

On the Motion itself, I can only stress to the House that we believe this proposed novel scrutiny procedure to be unnecessary. The House of Commons has said that it also believes it to be unnecessary. With the reporting requirements already in the Bill and the proven sifting committee procedure that we have already agreed, Parliament will have strong provisions to scrutinise any legislation that is brought forward under this Bill. In the Government’s view, the appropriate balance between the need for scrutiny and the need for reform has been struck. I therefore hope that noble Lords will not push forward this amendment.

Motion A agreed.

Motion B1 not moved.

Motion B

Moved by

[Lord Callanan]

That this House do not insist on its Amendment 6, to which the Commons have disagreed for their Reason 6A.

6A: Because the retention of anything which is retained EU law by virtue of section 4 of the European Union (Withdrawal) Act 2018 would be inconsistent with the abolition of the principle of supremacy of EU law.

Motion B agreed.

Motion C

Moved by

[Lord Callanan]

That this House do not insist on its Amendment 15, to which the Commons have disagreed for their Reason 15A.

15A: Because the Commons do not consider the Lords Amendment necessary in order to maintain environmental protection or food standards.

[Lord Callanan (Con)]

My Lords, in moving Motion C, I will also speak to Motion C1, both of which relate to Lords Amendment 15.

We have had myriad discussions on environmental protections during the passage of the REUL Bill. I can only stress once again that the Government have no intention of lowering environmental standards, nor of breaching their international obligations. This not only makes the restrictions that this amendment places on the usage of the reforming powers with regard to the environment unnecessary; it also risks delaying or even preventing reform where it would be beneficial to do so. Indeed, as drafted, this amendment may in fact also make it more difficult for departments to ensure that the policy effect of environmental regulations can be maintained at the end of the year through exercising the restatement power. By doing so, it could actively undermine the purpose that it seeks to achieve.

As I and Ministers in the other place have set out previously, the Government are fully committed to upholding environmental standards. Defra has already reformed retained EU law in a number of key areas through flagship legislation, such as the Fisheries Act 2020 and the Agriculture Act 2020. In addition, since leaving the EU, the Government have also passed the landmark Environment Act 2021 and published strategies including the Environmental Improvement Plan 2023. Any changes to legislation will need to support these ambitions as well as be consistent with our international obligations. Furthermore, Defra has in many areas already reformed its retained EU law to streamline and update it without diminishing—in fact, strengthening in some cases—our levels of environmental protection.

We are very clear that this sets a direction of travel on environmental regulation that makes this amendment unnecessary and, as I said, the amendment may make it more difficult to reach the ambition on environmental protections that I am sure is shared widely across the House. I therefore ask the House to support Motion C and the noble Lord, Lord Krebs, to withdraw his Motion C1.

Motion C1 (as an amendment to Motion C)

Moved by

[Lord Krebs]

At end insert “, and do propose Amendment 15B in lieu—

15B: After Clause 16, insert the following new Clause—
“Environmental protection (1) Regulations may not be made by a relevant national authority under section 12, 13, 15 or 16 unless the relevant national authority is satisfied that the regulations do not— (a) reduce the level of environmental protection arising from the retained EU law to which the provision relates; (b) conflict with any relevant international environmental agreements to which the United Kingdom is party. (2) Prior to making any provision to which this section applies, the relevant national authority must— (a) seek advice from persons who are independent of the authority and have relevant expertise, and (b) publish a report setting out— (i) how the provision does not reduce the level of environmental protection in accordance with subsection (1), and (ii) how the authority has taken into account the advice from the persons referred to in paragraph (a) of this subsection. (3) In this section “relevant international environmental agreements” includes but is not limited to— (a) the UNECE Convention on access to information, public participation in decision-making and access to justice in environmental matters (Aarhus, 25 June 1998); (b) the Council of Europe’s Convention on the Conservation of European Wildlife and Natural Habitats (Bern, 1979); (c) the UN Convention on Biological Diversity (Rio, 1992); (d) the Convention on the Conservation of Migratory Species of Wild Animals (Bonn, 1979); (e) the Convention for the Protection of the Marine Environment of the North-East Atlantic (OSPAR, 1992); (f) the Convention on Wetlands of International Importance especially as Waterfowl Habitat (Ramsar, 1971).””

[Lord Krebs (CB)]

My Lords, my proposed new clause represents a simplified and shortened version of the amendment passed by your Lordships’ House on Report on 15 May. Before I explain the simplification, I want to thank the noble Baroness, Lady Neville-Rolfe, and officials from the Bill team for their helpful discussion—although I am disappointed that we did not manage to reach a compromise, which I had hoped we would be able to do.

I will briefly recap the purpose of the amendment and explain the differences between my new proposal and the previous version. The core purpose remains the same: to ensure that any changes to EU laws do not dilute environmental protection or contravene relevant international environmental agreements, to ensure that expert advice is sought and to ensure transparency by requiring the publication of an explanation of how any changes do not reduce environmental protection and how expert advice supports this assertion.

The principles embodied in the amendment—non-regression, expert advice and transparency—are so non-controversial that I am at a loss to understand why the Government find them unacceptable. The new amendment differs from the version on Report in three principal ways. First, it leaves out food standards and is concerned exclusively with environmental protection. I would have preferred to leave food in, but the chair of the Food Standards Agency said it was unnecessary, and I defer to her advice. Secondly, the requirement to consult experts is less prescriptive than in the earlier version and is modelled on the wording in Sections 112(7) and 4(1) of the Environment Act 2021. Thirdly, acknowledging a point made on Report by the noble Lord, Lord Benyon, the new version of the amendment recognises that the list of international environmental agreements is not exhaustive; they are simply examples.

What are the Government’s arguments against the amendments? On Report the noble Lord, Lord Benyon, for whom I have the highest regard, said that my amendment was “burdensome” and “unnecessary”. As my noble friend Lord Kerr of Kinlochard pointed out to me, it is difficult for the amendment to be both at once. If it is unnecessary because it happens anyway, it cannot be burdensome. If it is imposing an extra burden on Ministers by introducing further steps required before changing the law, that may well be a good and necessary thing.

In explaining in the other place why the amendment should be rejected, the Solicitor-General said:

“Ministers have made it clear repeatedly at every stage of this Bill’s passage in both Houses that we will not lower environmental protections or standards”.—[Official Report, Commons, 24/5/23; col. 328.]


The Minister made essentially the same point a few moments ago. The question for me is whether the assertions that Ministers have made are matched by the reality. If they are not, surely there is a case for securing an extra layer of guarantee in the Bill.

What does the Government’s own statutory watchdog, the Office for Environmental Protection, say about current environmental standards? Are the Government living up to their promises? The 2023 statutory report from the Office for Environmental Protection, Progress in Improving the Natural Environment in England, 2021/2022, makes for grim reading. It says:

“We have little good news to report … We assessed 32 trends across the breadth of the natural environment; nine trends were improving, eleven were static, and eight were deteriorating … We assessed 23 environmental targets and found none where Government’s progress was demonstrably on track … Overall, we do not think the current pace and scale of action will deliver the changes necessary to improve the environment in England significantly, as required by the Environment Act 2021”.


It is no use saying, “We already have an Environment Act, and therefore the amendment is unnecessary”, because the Government’s own watchdog is saying that action is not matching the rhetoric. We are not on track to meet the targets in the Environment Act. While I have the highest confidence in the noble Lord, Lord Benyon, as an Environment Minister and in his commitment to the environment, the OEP’s report shows that, more widely, the Government are failing miserably to protect our environment.

Furthermore, this is about the longer term. As was said in a previous debate, even if present Ministers may be committed to not diluting environmental standards, how do we know what future Administrations might decide to do? In its briefing for this debate, the Law Society said:

“It is imperative that business and the public can be certain that following the revocation of the EU laws, environmental protections and standards are upheld. Uncertainty is not only detrimental to the UK’s transition to net zero but also this country’s status as an attractive place to do business. Unless these standards are protected in law, we are concerned that future administrations could roll back on our commitments, thus creating uncertainty”.


In my view, there is thus an indisputable case to add a clause that would help to ensure that future changes to retained EU law do not further harm our already badly damaged natural environment. I will listen carefully to the Minister’s reply but, at the moment, my intention is to test the opinion of the House. I beg to move.

16:15

[Baroness Jones of Moulsecoomb (GP)]

I support Motion C1. It is interesting, because all the constitutional arguments we heard earlier apply equally to this Motion. It gives Ministers the powers to delete or rewrite thousands of laws almost without any parliamentary scrutiny.

There is a vast ecosystem of about 1,600 environmental laws that are threatened by this Bill. These laws protect humans, animals and the broader environment. The Minister stood up and—forgive me for using this word —boasted about the Government’s credentials on environmental issues. I am sorry to inform him that, among the environmental lobby within the UK and worldwide, this Government have zero credibility on environmental issues. I am very happy to list them if necessary.

I accept that some of these laws are probably defunct or could be improved; that would be acceptable. What would be unacceptable is for the Government to weaken or delete laws that we need and that protect us and our environment. Although this is a constitutional issue, it is also about life. Forgive me if I am a bit emotional about this, but this is about the health of people and the planet. Without the planet, we do not exist. If we do not support our bees, we do not exist. If we do not think about our food standards, we will cease to exist. So it is incredibly important that this Motion is agreed to. We have to say to the Commons that it has got this dreadfully wrong.

[Lord Hamilton of Epsom (Con)]

My Lords, on Report I had a bit of a spat with the noble Lord, Lord Krebs, on this issue. It strikes me that it would be very odd if the Government wanted to put the health of their citizens at risk by not adopting these measures, so I am sure that they will. On top of that, not adhering to high food standards would completely undermine our exports to other countries. I do not quite see the point of this amendment and I will certainly vote against it.

[Lord Fox (LD)]

My Lords, the debate on this amendment has been somewhat shorter. It would be easier to support the amendment from the noble Lord, Lord Krebs, were it not for the very explicit reference to regulatory burden. It is very clear in the Bill as it is now that the regulatory burden cannot increase. It is not clear how it is measured, whether as a particular regulation, a range of regulations or an entire statute book of regulations. But, in total, financial costs cannot go up; administrative inconvenience cannot go up; obstacles to trade or innovation cannot go up; obstacles to efficiency, productivity or profitability cannot go up; and a sanction that affects the carrying out of a lawful activity cannot go up.

It is in that context—the context of the Bill—that those of us who have heard the very reassuring words of the noble Lord, Lord Benyon, whom we all respect in this House, are caused to be suspicious. When the Government kick back so hard and so thoroughly on what I think the noble Lord, Lord Krebs, very rightly characterised as a modest amendment, we become more suspicious yet. The very fact that the Government are resisting this amendment is the reason we need it.

[Lord Deben (Con)]

My Lords, I wonder whether we could reflect on the House of Commons Select Committee’s report on the state of things at the moment in Defra. One of my worries is whether the Government are in a position, frankly, to understand just where we are on this. After all, it turns out from that very powerful Select Committee report that Defra actually transacted 14 million transactions manually because its systems do not actually cover what needs to be done. In those circumstances, I am not sure that any of us can be sure that the Government can assess where they are on these matters, because of the difficulties which they have with not funding satisfactorily the department which is supposed to deal with this, or any of its agencies such as the Environment Agency and Natural England. In those circumstances, I very much hope that the Minister will be kind enough to help me on this, in his usual charming way—

[Noble Lords]

Oh!

[Lord Deben (Con)]

I say that to try to make sure it continues to be a good-natured debate. There is no doubt that many people who are not antagonistic to the Government do not want to rely on the excellence of the present Minister, but want to make sure that future Ministers do this job as he, I am sure, would hope to do it himself. Therefore, the question here is: given that we have doubts about the efficacy of the department most responsible for it—not because of our own concerns but because of the House of Commons Select Committee—and given that he will surely want other Ministers to follow him in the attitudes which he has displayed, would it not be more sensible to put this into the law, as indeed the Law Society itself has suggested? I think I am right in saying that every exterior independent body, including the Government’s own watchdog on this matter, agrees. I remind the House of my own interests, as declared in the register of interests: not only the things I do outside but also my chairmanship of the Climate Change Committee. I just feel that the world would be more assured that the kind of attitudes which we have heard from the noble Lord, Lord Benyon, for example, will be the attitudes enforced in the future. That is all we are asking, and I do not quite understand why that is unreasonable.

[Baroness Lawlor (Con)]

My Lords, I listened with great interest throughout Committee to the noble Lord, Lord Krebs, and his very reasonable and constructive proposals for protecting our environment. But it is time to move on to UK law, which is more transparent and will save the taxpayer the cost of having to pay for a dual system of EU and UK law. Yes, we are already committed by international obligation to our international treaties, but it is ironic that many of the problems which we hear considered have arisen under this dual system of arrangements. I am afraid that I will not support the noble Lord’s amendment. I hope the Government will get on with it, and we will move to restoring UK law over this vital environmental sector so we can all have the protections we need for the environment and hold the Government to account.

[Baroness Hayman of Ullock (Lab)]

I thank the noble Lord, Lord Krebs, for bringing this amendment forward and assure him of our full support. We heard from him that, in response to comments made by Ministers on Report, the amendment has been altered to focus on enshrining a legal commitment to maintain existing levels of environmental protection, and that he has taken into account much of what was said during that debate.

One of the things that we debated is how much of the Bill has significant implications for environmental law and for many regulations of significant public interest protecting our natural environment and many aspects of our health so, as the noble Lord, Lord Krebs, said in his introduction, and others have said, it has been pretty disconcerting to hear the Government describe commitments to maintain existing levels of environmental protection as burdensome. I find that quite shocking. We know that there is wide-ranging support for an environmental non-regression principle. Amendment 15 would give legal substance to what Ministers have been saying they want to achieve. In fact, in his introduction, the Minister said that the Government are committed to maintaining high environmental standards; the noble Lord, Lord Benyon, said that; and the Minister in the other place, Trudy Harrison, said that. However, as a matter of law, just because somebody says something provides no assurances or protections and, however welcome it is, it cannot bind the hands of any future Ministers, as the noble Lord, Lord Deben, has just said.

The noble Baroness, Lady Jones, mentioned concerns that some regulations that we need may well be lost. I want very briefly to give an example, which is the intention to remove some items relating to the national air pollution control programme—the NAPCP. Removing the obligation to draw up and implement the programme strips away any clear duty on the Government to show how they will reduce emissions in line with their legally binding emissions targets. The Government say that by repealing this item they can better focus on what will help clear the air, such as delivering on the targets set in the Environment Act. In this debate, the Government repeatedly cite the existence of the Environment Act as the reason why such amendments are not necessary, and no doubt the Minister will repeat that shortly. However, if we look at Regulation 10 of the National Emissions Ceilings Regulations 2018 and the associated implementing decision, we see that the Government are clearly required to consult the public as part of the process of preparing and revising the NAPCP. This is in stark contrast with the approach they took with the revised environmental improvement plan earlier this year where there was no public consultation, very limited stakeholder engagement and limited transparency over which stakeholders were contacted—yet the Minister in his introduction held the EIP up as something to which we should aspire. Given that there is currently no provision in the Environment Act to require any public consultation in relation to future revisions of the EIP, how will the Government ensure that the public do not lose their ability to contribute and to have their say?

I also want to look at some of the powers in the Environment Act and how they are constructed. For example, it includes a non-regression commitment in respect of one piece of REUL, the habitats regulations. This empowers the Secretary of State to make regulations to amend part of the habitats regulations

“only if satisfied that the regulations do not reduce the level of environmental protection provided by the Habitats Regulations”.

So I consider it relevant in today’s debate to look at why the Government opted to include this non-regression safeguard in law.

16:30

During the passage of the Environment Act, the Minister, at that time the noble Lord, Lord Goldsmith, explained that

“the clause includes a number of safeguards that are designed to retain our existing protections”,

recognising the importance of underpinning commitments in law. He went on:

“Ministers will have to be satisfied and explain to Parliament that any change would not reduce our existing environmental protections, and Parliament will have a vote on any use of the powers”.

He also explained that consultation on any proposals would be comprehensive and that there would be

“a full impact assessment of any regulations made under the powers, when bringing them forward”.—[Official Report, 12/7/21; cols. 1620-21.]

If the Government were committed to such a safeguard in the Environment Act, which was brought in only in 2021, why are they so against making a similar non-regression commitment on maintaining existing levels of environmental protection in law in this Bill?

As the noble Lord, Lord Krebs, said, this is very uncontroversial. I await the Minister’s response with interest, but if the noble Lord, Lord Krebs, wishes to test the opinion of the House, he will have our strong support.

[Lord Callanan (Con)]

My Lords, I can keep my response brief. I have lost track of the number of times during the passage of the Bill that we have had this debate. We had it in Committee, on Report and we are having it now—and of course it was repeated in the House of Commons. The House of Commons has heard the assurances of the Government. I suspect that nothing else I can say will change most Members’ minds but, for the benefit of the noble Lord, Lord Krebs, I will repeat the arguments again.

The noble Lord’s Motion proposes to insert additional measures into the Bill on environmental protections. I appreciate the sentiment, and we recognise the importance of maintaining our environmental standards, but the Government do not believe this amendment to be necessary. The UK is a world leader in environmental protection, despite what the noble Baroness, Lady Jones, wants to tell us, and we will continue to uphold our environmental protections. Furthermore, in a debate in the other place, the House of Commons rejected essentially a similar amendment by a majority of 77.

We are committed to our environmental protections. Nothing in this Bill changes that commitment. As I referenced in my opening speech, we have substantive concerns that this amendment, in the way that it is worded, would actually make it more difficult to uphold those environmental commitments. I hope that, if the Motion is moved to a vote, the House will reject it.

[Lord Krebs (CB)]

I thank all noble Lords who have taken part in this short debate, and I thank the Minister for his response. I will not speak for very long but I want to make three specific comments in response to particular points that have been made.

The noble Lord, Lord Hamilton, referred to food standards. I remind noble Lords that this version of the amendment does not include food, so the noble Lord can relax in his seat and not worry about food.

The noble Baroness, Lady Lawlor, seemed to imply that the amendment would somehow fossilise existing regulations in relation to the environment. It is not about fossilising existing regulations; it is about allowing change and improvement as long as they do not dilute environmental protection and as long as they are made in consultation with, and on the advice of, experts, and that that advice is published. This is not trying to freeze things in 2023 at all. I hope that provides reassurance.

As a final point, in response to the Minister, who repeated the oft-quoted mantra that the UK is “world-leading” in environmental protection, I remind him of what I read out less than half an hour ago from the Government’s own watchdog. It makes grim reading. We are failing on all the targets that the OEP looked at. We are not world-leading; we are struggling. This simple and modest amendment aims to put further legal protections around what the Government claim they are doing anyway; it is simple, modest and straight- forward.

I would not like to be the one going home to explain to my children and grandchildren that I stood up and voted against protecting our environment. I hope that other noble Lords feel the same—that those who have children or grandchildren and are thinking of the future would want to protect the environment on their behalf. Therefore, I wish to ask the House to agree to Motion C1.

16:34

Division 1

Ayes: 244

---

Labour: 118
Liberal Democrat: 61
Crossbench: 52
Independent: 5
Conservative: 4
Green Party: 2
Bishops: 1
Plaid Cymru: 1

Noes: 190

---

Conservative: 172
Independent: 6
Crossbench: 6
Democratic Unionist Party: 4
Labour: 1
Ulster Unionist Party: 1

16:46

Motion D

Moved by

[Lord Callanan]

That this House do disagree with the Commons in their Amendment 16A, do agree with the Commons in their Amendment 16B, and do propose Amendment 16C as an amendment to Lords Amendment 16 in lieu of Commons Amendment 16A—

16A: In subsection (2)(c), at end insert “including specifying in a list such provisions of retained EU law as is intended to be revoked or reformed”

16B: Leave out paragraphs (3)(b) to (3)(d) and insert—
“(b) each subsequent period of 6 months, subject to subsection (3A). (3A) The last reporting period ends with 23 June 2026.”

16C: After subsection (2) insert—
“(2A) The plans that must be set out under subsection (2)(c) must include a list of the provisions of retained EU law which His Majesty’s Government intends to revoke or reform.”

Motion D agreed.

Motion E

Moved by

[Lord Callanan]

That this House do not insist on its Amendment 42, to which the Commons have disagreed for their Reason 42A.

42A: Because the Commons consider the scrutiny procedure imposed by the Lords Amendment to be inappropriate.

Motion E1 (as an amendment to Motion E)

Moved by

[Lord Anderson of Ipswich]

At end insert “, and do propose Amendment 42B in lieu—

42B: After Clause 15, insert the following new Clause—
“Parliamentary scrutiny (1) A Minister of the Crown may not make regulations under section 15 unless— (a) a document containing a proposal for those regulations has been laid before each House of Parliament, (b) the document has been referred to, and considered by, a Committee of the House of Commons (‘the Committee’), and (c) a period of at least 30 days has elapsed after that referral, not including any period during which Parliament is dissolved or prorogued or either House is adjourned for more than four days. (2) If the Committee determines that special attention should be drawn to the regulations in question, a Minister of the Crown must arrange for the instrument to be debated on the floor of each House and voted on before the period in subsection (1)(c) elapses. (3) If any amendments to the regulations, whether or not proposed by the Committee, are agreed by both Houses of Parliament, the regulations must be made in the form so amended.(4) If one House agrees amendments to the regulations under subsection (3), the regulations may not be made until the other House has debated and voted on a motion to agree or disagree with those amendments.””

[Lord Anderson of Ipswich (CB)]

My Lords, it has all been said. This is a Motion on parliamentary scrutiny. I beg to move Motion E1.

16:46

Division 2

Ayes: 257

---

Labour: 117
Crossbench: 59
Liberal Democrat: 59
Conservative: 12
Independent: 6
Green Party: 2
Bishops: 1
Plaid Cymru: 1

Noes: 182

---

Conservative: 167
Independent: 6
Democratic Unionist Party: 4
Crossbench: 3
Labour: 1
Ulster Unionist Party: 1

Financial Services and Markets Bill

Report stage
Tuesday 6th June 2023 Lords Chamber

Report (1st Day)

Relevant documents: 23rd Report from the Delegated Powers Committee

17:00

Clause 1: Revocation of retained EU law relating to financial services and markets

Amendment 1

Moved by

[Lord Sharkey]

1: Clause 1, page 1, line 6, leave out subsection (1) and insert—
“(1) A Minister of the Crown may by regulation revoke or replace any legislation referred to in Schedule 1 provided that—(a) a document containing a proposal for those regulations has been laid before each House of Parliament,(b) the document has been referred to a Joint Committee of both Houses, and(c) a period of at least 40 days has elapsed after that referral, not including any period during which Parliament is dissolved or prorogued or either House is adjourned for more than four days.(2) If the Joint Committee, after considering any regulations laid under this paragraph, finds that—(a) the regulations represent a substantial change to the preceding retained EU law, or(b) the Government have not carried out sufficient public consultation lasting at least six weeks before laying the draft before Parliament, a Minister of the Crown must arrange for the instrument to be debated on the floor of each House and voted on before the period in sub-paragraph (1)(c) elapses.(3) If any amendments to the regulations, whether or not proposed by the Joint Committee, are agreed by both Houses of Parliament the regulations must be made in the form so amended.(4) If one House agrees amendments to the regulations under sub-paragraph (3) the Minister may not make the relevant statutory instrument until the other House has debated and voted on a motion to agree or disagree with those amendments.”

[Lord Sharkey (LD)]

My Lords, I shall speak first to Amendment 1 and then to Amendments 116 and 117. The Bill gives the Ministers and regulators power to shape our financial services regimes, but it does not allow for any meaningful parliamentary scrutiny of the changes that Ministers and regulators may introduce into law. This is another very clear example of what the noble Lords, Lord Hodgson of Astley Abbotts and Lord Blencathra, and their committees, warned about—the significant and continuing shift of power from Parliament to the Executive. The DPRRC report says in its introduction:

“We have concluded that it is now a matter of urgency that Parliament should take stock and consider how the balance of power can be re-set”.


It goes on to highlight the problem of what it calls

“Legislative sub-delegation of power: where ministers can confer powers on themselves or other bodies”,

which is precisely what this Bill is about. The report, called Democracy Denied?, goes on to say:

“we conclude that conferring legislative sub-delegation of power is potentially a more egregious erosion of democratic accountability than a simple delegation to a minister”.

The Minister is aware of these concerns. In our previous discussions, she has noted, by way of compensation no doubt, that there will be opportunities for Parliament to be consulted and for post-hoc accountability reviews. Neither of those things, desirable though they may well be, is a substitute for meaningful legislative scrutiny. This scrutiny is what Amendment 1 proposes to introduce, and I am very grateful to the noble Lords, Lord Hodgson of Astley Abbotts and Lord Lisvane, and the noble and learned Lord, Lord Thomas of Cwmgiedd, for adding their names to the amendment.

The amendment is based on the Amendment 76 of the noble and learned Lord, Lord Hope, to the REUL Bill, which your Lordships agreed to on 17 May by 231 votes to 167. This amendment was discussed at ping-pong in the Commons 10 days ago, and was rejected by the Government on three grounds. The first was that the Government do not accept the principle that Parliament should be able to amend statutory instruments. The second was that the scrutiny proposed would take up too much parliamentary time. The third is the really rather astonishing and disappointing view of the reach and capability of our Joint Committees. I shall not comment on that last point, except to say that it is obviously mistaken, as many of us here could attest.

The objection against taking up too much parliamentary time seems pretty odd, as scrutiny is obviously the essence of our role. In any case, that objection may, if one is charitable, have some force in the case of the monster that is the REUL Bill, but surely has none in the case of this much shorter and more coherent Bill.

As for the Government’s not accepting the principle that Parliament should be able to amend statutory instruments, that surely needs qualification. We have heard that qualification discussed in the preceding business. There are two examples of Acts of Parliament containing provisions for the statutory instruments that they generate to be amended—the Census Act 1920 and the Civil Contingencies Act 2004. Both those Acts allow for SIs to be amendable in the way that our Amendment 1 proposes, only by agreement of both Houses. There are no free-standing or wide-ranging powers.

The Government seem to be sticking to this rather confected set of objections to parliamentary scrutiny. Noble Lords who were here for the preceding ping-pong on the REUL amendments from the noble Lord, Lord Anderson, will have heard the repeated resistance to parliamentary scrutiny. That is despite the SLSC’s calling for the REUL Bill to contain

“an enhanced scrutiny mechanism that enables Parliament to decide that an instrument makes changes of such policy significance that the usual ‘take it or leave it’ procedures—even if affirmative—relating to statutory instruments should not apply but that a further option should be available, namely a procedure by which the Houses can either amend, or recommend amendments to, the instrument”.

The Bill before us is essentially a financial services carve-out from the REUL Bill and it suffers from the same lack of effective scrutiny provisions. What was necessary for parliamentary scrutiny of the REUL Bill is also necessary for this. Our Amendment 1 responds to the SLSC’s call. It brings in a sifting process. It allows a Joint Committee discretion over what constitutes substantial change to preceding retained EU law. It requires a debate on the Floor of each House if the Joint Committee makes a finding of substantial change or that there has been insufficient public consultation. It also allows SIs generated by the Bill to be amended if, and only if, both Houses agree. This is not a prescription for frequent and casual intervention but a narrowly drawn means of altering SIs on those rare occasions when both Houses find the case compelling.

The amendment returns a measure of meaningful parliamentary scrutiny to the Bill. It allows careful parliamentary scrutiny of proposed changes to our critically important financial services regime. Without it, there would be none; Ministers and regulators would decide, and Parliament would be bypassed yet again.

I turn to Amendments 116 and 117. These amendments, taken together, would allow either House to insist on an enhanced form of scrutiny for SIs it deemed likely to benefit from more detailed examination and debate, as well as from recommendations for revision. The usual SI procedures, as we all know, do not allow this and do not constitute parliamentary scrutiny in any meaningful sense: we cannot amend and we do not reject. The super-affirmative procedure set out in Amendment 117 would allow a measure of real, detailed scrutiny, a means of hearing evidence and a means of making recommendations to Ministers. It would not allow the amendment of SIs: that power remains exclusively with the Minister.

Identical amendments were debated in Committee. The noble Baroness, Lady Noakes, who is not in her place, added her name to the amendments and spoke in support; so did the noble Viscount, Lord Trenchard, and the noble and learned Lord, Lord Thomas of Cwmgiedd. The noble Lord, Lord Tunnicliffe, also not in his place, commented:

“If a piece of legislation is proposed and supported by the noble Lord, Lord Sharkey, the noble Baroness, Lady Noakes, and the noble Viscount, Lord Trenchard, you have to think that it is pretty wide-ranging—in fact, close to impossible”.—[Official Report, 23/3/23; col. GC 329.]


I think he meant that as a compliment, but it is not entirely clear.

The super-affirmative procedure is appropriate here because, for example, Clause 3 allows for very significant policy changes to be made that could be significant in the context of the restatement of EU law, as the noble Baroness, Lady Noakes, noted in the debate. The Minister thinks that the super-affirmative procedure is unnecessary and promises instead that

“the Government will seek to undertake a combination of formal consultation and informal engagement appropriate to the changes being made”.—[Official Report, 23/3/23; col. GC 331.]

That is not even a real commitment, with the phrase “will seek to undertake”, and it is certainly nothing close to meaningful parliamentary scrutiny. We need the super-affirmative procedure, and I commend these amendments to the House. I beg to move Amendment 1.

[Viscount Trenchard (Con)]

My Lords, I declare my interests as a director of two investment companies as stated in the register. I listened with interest to the noble Lord, Lord Sharkey, in bringing forward his Amendment 1 and other amendments. I feel strongly, as he has suggested, that what has been agreed for the REUL Bill should also be acceptable for this Bill. Indeed, one of my later amendments makes the same point. As he said, the Bill is in some sense a carve-out from the REUL Bill dealing exclusively with financial services. As for his other amendments, I will not repeat the arguments I made in Committee, but I look forward to hearing whether the Minister can give any greater assurance to the House today than she did at that time.

[Lord Hamilton of Epsom (Con)]

My Lords, I support Amendment 1. My noble friend Lord Hodgson of Astley Abbotts does not seem to be with us, but I have collaborated with him over the retained EU law Bill, and I know his views are that Parliament has been collectively losing control of its agenda and that parliamentary sovereignty has been undermined. He has been chairman of the Secondary Legislation Scrutiny Committee, and he notices that more and more business goes through both Houses under statutory instruments. That is not really what we should be going along with in either House, and it is disappointing that the other House does not seem to worry too much about the fact that it is losing its sovereignty and its power to control legislation. That seems to be a fact we have to deal with.

I have repeated this very often, but unlike most people in your Lordships’ House, I campaigned to leave the EU. I often wonder what would have happened if the people who were really concerned about the fact that we were getting all this legislation from the EU—inevitably, I accept—which we could neither amend nor reject knew that we would substitute it with stuff in respect of which the Executive are given all the power that had previously lain in Brussels. If we had campaigned in the country and told people that that was what was going to happen, I am not at all certain that the referendum would have been won by the leave campaign.

It strikes me as very odd that when we talk about taking back control, it seems to exclude Parliament. It does not seem to have a desire—particularly the other place—to actually take back control of legislation, which is what I think we should be doing. It is time we brought this to a halt. I do not have any great optimism that that is going to happen, but I would be more than happy to support the noble Lord’s amendment if he presses it to a Division.

[Lord Lisvane (CB)]

My Lords, I am a signatory to this amendment, although some quirk of technology has meant that my name does not appear on the Marshalled List today. I am delighted to join other noble Lords whose names are on the amendment. This is déjà vu all over again, as they say, because this amendment is very similar to one proposed to the retained EU law Bill by the noble and learned Lord, Lord Hope of Craighead, which was approved by this House, sent to the Commons, sent back to us and returned in a slightly different form in the Motion moved by the noble Lord, Lord Anderson of Ipswich, and agreed today.

Perhaps I may very briefly recall what I said on that Motion, because it applies equally to this amendment. This would not set up an entirely new category of amendable SIs which form a new legislative family, as it were. To suggest that it does as a reason for opposing the amendment is to be frighted with false fire, to borrow Hamlet’s phrase. There are two statutes, as referred to by the noble Lord, Lord Sharkey, that have the power to amend SIs where the amendments are immediately effective. In my view, this is much more like the super-affirmative procedure, which is set out in some detail in the proposal contained in Amendment 117. The difference is that Ministers would not have the discretion to refuse the amendment which is suggested. It does not seem to me outrageous that Ministers should be subject to the will of Parliament, especially if a proposal might seriously disadvantage businesses or individuals. I commend the amendment to your Lordships.

17:15

[Lord Naseby (Con)]

My Lords, I would just like to refer back to the fact that from 1992 to 1997, I had the privilege in the other place of being Chairman of Ways and Means and Deputy Speaker. At that time, I received considerable briefing from the Officers of the House and other senior parliamentarians, and the procedure we have in Amendments 116 and 117 is, in my judgment, entirely appropriate in instances where a Bill of what I might refer to as super-national importance is going through. I cannot think of any Bill at this stage in a Parliament that is more important than this one. We have the whole of the City of London in favour of the principle of the Bill. That is absolutely fundamental to the success and growth of our nation, and to have the financial sector behind it, alongside His Majesty’s Government, seems to me entirely appropriate. Here, we have a situation that may occur—I hope it does not. However, if it is felt strongly by parliamentarians that something that His Majesty’s Government and Ministers are bringing forward should go through the super-affirmative procedure, that is to be welcomed and recognised. If it does—and I assume it would go through—all that does is strengthen the Government of the day, which is why I very much support this amendment.

[Lord Thomas of Cwmgiedd (CB)]

My Lords, I had the privilege of adding my name to this amendment because it seems to me, as has just been said, that this is such an important Bill for our nations. It also has this distinguishing feature. Regulation of financial services and matters of this kind is extremely complicated; it is very easy to get them wrong. Why do the Government not feel that they need the expertise of this House, which was so evident during the Grand Committee hearing on aspects of financial services? That completely defeats my understanding of the way in which we should have good government.

[Baroness Altmann (Con)]

My Lords, I add my support to the amendment so excellently moved by the noble Lord, Lord Sharkey, and I thank my noble friends Lord Hamilton and Lord Naseby, who have spoken about the dangers that are entailed if we do not introduce measures such as this amendment into the Bill. There is a risk of executive power-grab. I am not at all saying that that is the intention, but the possibility of that would be opened and surely, as we have just argued in the previous legislative discussion, it is so important that we ensure that Parliament has control, not a few Ministers. That is what I hoped we were going to do when we were revising the laws that had been adopted from the EU.

[Baroness Kramer (LD)]

My Lords, I can add very little to the extraordinary speeches we just heard, many of them quite brief but absolutely targeted and to the point. I simply want to add just two more issues that perhaps have been mentioned but not stressed.

The first is that a carve-out of financial services from the REUL Bill is not the carve-out of some minor area of insignificant interest. Financial services are in effect our largest and most significant industry at this point in time in the UK and will be for many years in the future, and indeed the products that come from financial services are the lifeblood of our economy, both for businesses and for ordinary people. Therefore, scrutiny of decisions that are made within this arena surely has to be a central and significant responsibility of Parliament.

I say to the Minister, who always prays in aid consultation, both formal and informal, in the process of making change, when did consultation replace scrutiny in the mind of this Government? Parliament is not a consultee but the body that is democratically elected to make the key legislative decisions about the future of our country. Its relegation to the role of a consultee, which in effect happens and which this legislation would in some ways counter, is, I believe, completely unacceptable to most people when they have the opportunity to face up to it and think through this issue. Therefore, we on these Benches are very much in support of these amendments, and if necessary we will go through the Lobbies if the Minister is unable to accept at least a significant one of them.

[Baroness Chapman of Darlington (Lab)]

My Lords, before I address the amendments, I want to acknowledge the work of my noble friend Lord Tunnicliffe, who had been leading for these Benches on this Bill until very recently, and thank him for his hard work and generosity in the way he has handed over custody of the Bill to me and my noble friend Lord Livermore. We are very grateful to my noble friend for everything he did, and he continues to advise and support—as noble Lords who know him can well imagine.

However, we are on Report, and this is the stage where we cut to the chase and pick our battles. I have been leading on the retained EU law Bill and am very familiar with the arguments raised in this debate, but we are treating this Bill slightly differently to the retained EU law Bill because our concerns on that Bill revolved around the lack of certainty created by the Government’s approach. There was no definitive list of the terms of retained EU law that would be revoked at the end of the year, and the absence of that list meant limited scope for meaningful engagement, scrutiny or consultation. That was our fundamental objection to that Bill.

The process set out in this Bill is different, with most of the retained law listed in the legislation and to be repealed and revoked only once replaced by regulations that are UK-specific. Fundamentally, we think that changing the process outlined in the Bill at this stage in a manner that the sector has not asked for—it is very different to the engagement that we had on the retained EU law Bill, where there was strong demand from various sectors for change—would introduce uncertainty.

The Lords were right to ask the Government to think again on the retained EU law Bill, but amendments to one Bill do not automatically work for another and, in any event— as I know from having worked on the retained EU law Bill—the version of the amendment we are considering today has already been convincingly overturned by the elected House and we have had to come back with another. As we need to pick our battles and to prioritise at this stage in our proceedings, we on these Benches will not be participating should the issue be put to a Division today.

[The Parliamentary Secretary, HM Treasury (Baroness Penn) (Con)]

My Lords, before turning to the amendments at hand, I add my thanks to those of the noble Baroness, Lady Chapman, for the contribution of the noble Lord, Lord Tunnicliffe, to this Bill and the Labour Front Bench on Treasury matters. The noble Baroness referred to the noble Lord’s generosity; I have definitely found that to be the case. He has always had a very constructive approach and approached his work with kindness and wisdom, which is a great combination to bring to this House.

The amendments before us from the noble Lord, Lord Sharkey, Amendments 1, 116 and 117, would introduce new parliamentary procedures when exercising the powers in the Bill. As noble Lords have noted, very similar amendments were proposed to the retained EU law Bill, passed and then reversed by the Commons. We have just had a debate this afternoon on a modified version of those amendments, to which I listened very carefully, although I am not as expert in the passage of that Bill as some other noble Lords in the Chamber.

Many of the arguments covered in that debate also apply here, so I do not intend to repeat them at length. I want to focus on some specific considerations in relation to this Bill, which, as the noble Baroness, Lady Chapman, noted, takes a different approach to repealing retained EU law for financial services. That is because it enables the Government to deliver fundamental structural reform to the way in which the financial services sector is regulated.

The Government are not asking for a blank cheque to rewrite EU law. This Bill repeals EU law and creates the necessary powers for it to be replaced in line with the UK’s existing Financial Services and Markets Act 2000—FSMA—model of regulation, which we are also enhancing through this Bill to ensure strong accountability and transparency. A list of retained EU law to be repealed in Schedule 1 was included in the Bill from its introduction in July 2022 to enable scrutiny of this proposal.

Going forward, our independent regulators will generally set the detailed provisions in their rulebooks instead of firms being required to follow EU law. The Bill includes a number of provisions to enable Parliament to scrutinise the regulators; the Government have brought forward amendments to go further on this, as we will discuss later on Report.

Amendments 1, 116 and 117 would introduce rare parliamentary procedures, including the super-affirmative procedure, and create a process to enable Parliament to amend SIs. As I said in Committee, those procedures are not justified by the limited role that secondary legislation will have in enabling the regulators to take up their new responsibilities. The Government have worked hard to ensure that every power in the Bill is appropriately scoped and justified. As I noted in Committee, the DPRRC praised the Treasury for a

“thorough and helpful delegated powers memorandum”.

It did not recommend any changes to the procedures governing the repeal of EU law or any other power in this Bill.

The powers over retained EU law are governed by a set of purposes that draw on the regulators’ statutory objectives. They are limited in scope and can be used only to modify or restate retained EU law relating to financial services or markets, as captured by Schedule 1. However, of course, the Government understand noble Lords’ interest in how they intend to use the powers in this Bill and are committed to being as open and collaborative as possible when delivering these reforms.

The Government have consulted extensively on their approach to retained EU law relating to financial services and there is a broad consensus in the sector behind the Government’s plans. As part of the Edinburgh reforms, the Government published a document, Building a Smarter Financial Services Framework for the UK, which describes the Government’s approach, including how they expect to exercise some of the powers in this Bill. It also sets out the key areas of retained EU law that are priorities for reform. Alongside this publication, the Government published three illustrative statutory instruments using the powers in this Bill to facilitate scrutiny.

When replacing retained EU law, the Government expect that there will be a combination of formal consultation, including on draft statutory instruments, and informal engagement in cases where there is a material impact or policy change, such as where activities that are currently taking place in the UK would no longer be subject to a broadly equivalent level of regulation. The Government will continue to be proportionate and consultative during this process, just as we have been up to this point.

Through the retained EU law Bill, the Government have also committed to providing regular updates to Parliament on progress in repealing and reforming retained EU law. I am happy to confirm that these reports will also cover the financial services retained EU law listed in Schedule 1 to this Bill.

I hope that I have satisfied noble Lords that the Government are committed to an open, transparent and consultative approach to implementing the reforms enabled by this Bill. I ask the noble Lord, Lord Sharkey, to withdraw his Amendment 1.

[Lord Sharkey (LD)]

I thank all those who have spoken in this brief debate—some more warmly than others, perhaps. In my initial speech, I forgot to be especially nice about Denis, the noble Lord, Lord Tunnicliffe; I regret that. I am of course disappointed by both his absence and the response of his successors. I repeat: when it comes to the need for real parliamentary scrutiny, the contents of this Bill are quite as important as the contents of the REUL Bill. That seems to me to be the essence of the matter. All the other arguments about the need to focus and get on with it on Report seem mechanistic; indeed, they are close to being excuses, in some ways.

The essential problem is that Parliament will be unable to scrutinise revocation and replacement, as it is set out in this Bill. I accept that it is not likely that we will revolutionise the way we treat these things as a result of this intervention, but perseverance is the only way of making any progress towards making certain that Parliament recovers its ability to scrutinise properly and does not continue to lose that ability. Although on some occasions—this is one of them—the outcome may be unsatisfactory in the short term, I am convinced that, over time and with enough persistence, we can find a way to do what the DPRRC recommended, which is restoring the balance between Parliament and the Executive. Having said all that, I beg leave to withdraw my amendment.

Amendment 1 withdrawn.

17:30

Schedule 2: Transitional amendments

Amendment 2

Moved by

[Lord Harlech]

2: Schedule 2, page 128, line 38, at end insert—
“(5) Paragraph (6) applies where—(a) a central counterparty (A) was taken to be recognised pursuant to Article 25 of the EMIR regulation in accordance with regulation 19A(3), and(b) A ceased to be taken to be so recognised by virtue of the relevant period in the case of A having expired before the commencement day.(6) The Bank of England— (a) may determine that the relevant period in the case of A is (in spite of its expiry) to be treated, as from the making of the determination, as not having expired, and(b) may accordingly exercise its power under this regulation to vary the relevant period on or after the commencement day.(7) In paragraphs (5) and (6) “the commencement day” means the day on which Part 5 of Schedule 2 to the Financial Services and Markets Act 2023 comes into force.(8) Paragraphs (5) to (7) expire at the end of 31 December 2025 (but without affecting any variation of a relevant period made under this regulation by virtue of paragraph (6)(b) before that time).”Member’s explanatory statement
This amendment would enable the Bank of England to restore a third country CCP to the run-off regime in cases where the regime has ended in the case of that CCP before the coming into force of the amendment made by paragraph 51 of Schedule 2 to the Bill.

[Lord Harlech (Con)]

My Lords, I beg to move government Amendment 2 and will also speak to the other amendments in this group. These are a set of minor amendments that the Government have tabled to ensure that all provisions of the Bill and the Financial Services and Markets Act 2000 operate effectively and fully achieve their intended policy effect.

Turning first to Amendments 2 and 118, central counterparties, or CCPs, are a type of financial market infrastructure and are crucial to global financial stability. Following the UK’s exit from the EU, the Treasury established a temporary recognition regime to enable eligible non-UK CCPs to continue providing important clearing services to UK firms while equivalence and recognition decisions were ongoing. To allow CCPs exiting the temporary recognition regime without recognition time to wind-down exposures to UK firms, a run-off regime was also established. The length of the run-off is determined by the Bank of England for each CCP, with a current maximum period of one year. As a result of provisions in this Bill tabled in Committee, the Bank of England will have the ability to extend the maximum run-off period for CCPs from one year to three years and six months. This would allow overseas CCPs currently due to exit the run-off regime at the end of June 2023 further time to apply for recognition if desired, and to remain able to offer services to UK firms during that period.

Amendments 2 and 118 seek to facilitate continuity of services under the run-off regime in the event that Royal Assent of this Bill occurs very close to or after 30 June. Amendment 118 provides that the Bill provision that gives the Bank the power to extend the run-off period comes into force on Royal Assent. This will allow the Bank of England to extend the run-off for those CCPs that wish to continue providing services to UK firms but need more time to apply for recognition, as was set out in Committee. However, if Royal Assent is secured after relevant CCPs have exited the run-off, government Amendment 2 will give the Bank of England the ability to reinsert a CCP into the run-off regime by determining that a CCP’s run-off is to be treated as not having expired. This will allow the Bank of England to extend the length of a CCP’s run-off period even in cases where a CCP has already exited the run-off. This will avoid any potential disruption that could otherwise arise if CCPs exited the run-off period before the Committee stage amendment had come into force.

Amendments 3, 16, 17, 21, 22, 34, 53 and 54 ensure that the references to the regulators’ objectives in the Bill and the Financial Services and Markets Act 2000 include the new competitiveness and growth secondary objectives for the PRA and the FCA, and the Bank of England’s new secondary innovation objective.

Turning to Amendments 5 and 6, Schedule 5 to the Bill makes amendments to FSMA to ensure that the regulatory gateway for financial promotions legislated for in this Bill can be implemented and operated. One way that it does this is by applying other relevant parts of FSMA to ensure that the FCA can oversee the gateway effectively. Amendment 5 aligns the wording between a provision introduced by Schedule 5 and a similar existing provision within FSMA. These provisions relate to the issuance of notices to vary permissions or to impose requirements. The amendment will ensure that the regulator is required to provide notice when they propose to vary a permission in all cases, and to avoid any potential duplicatory requirements to provide notices. Amendment 5 replaces the relevant provisions in Schedule 5 and in FSMA with a single new provision. This will help to ensure that these similar provisions are interpreted consistently and achieve the intended policy effect. Amendment 6 is consequential on Amendment 5.

Amendment 49 ensures that the CBA panel’s statutory remit includes cost-benefit analyses for rules for critical third parties, and that it is therefore able to provide advice to the Bank in relation to this. Amendment 86 corrects a drafting error, ensuring that Schedule 11, regarding the central counterparties resolution regime, functions as intended. It provides clarity over the Treasury’s power to lay regulations restricting the making of partial property transfers. Amendments 87, 88 and 89 make technical corrections and clarifications to the insurer insolvency provisions in Schedule 12 to the Bill. Amendment 89 provides a clarification to make clearer the amount of FSCS top-up compensation that policyholders will be eligible to receive following a write-down order, meeting the stated policy intent. Amendment 87 clarifies that a liability is, to the extent of its reduction by a write-down order, to be treated as extinguished unless and until revived by the variation or revocation of the order. This helps to ensure that the intent of the provisions is achieved by increasing legal certainty about the treatment of written-down liabilities.

All these amendments seek to ensure that the provisions in this Bill achieve the policy intent and minimise potential disruption to the UK financial services sector. Therefore, I beg to move Amendment 2 and intend to move the remaining amendments when they are reached.

[Baroness Kramer (LD)]

My Lords, I will make very few comments on this group of amendments. I accept that they are technical. I find some of them distasteful, particularly those that enhance the scope of the competitiveness and economic growth agendas. I fear very much that the underlying concept and construct will lead us back in the direction of the kind of risk taking that created the crisis that we went through so badly in 2008 and 2009. However, given that our attempts to turn around those objectives have not won support from other parts of the House, there is no sensible reason for me to object to these more technical amendments, other than to say that it is a sad day and that many of us will be revisiting this, if we live long enough, when we hit the next financial crisis.

[Lord Eatwell (Lab)]

My Lords, I will make two points on these technical amendments. As the Minister said, central counterparties are fundamental institutions in maintaining the stability of financial markets. This measure, to continue the role of overseas-based central counterparties, is enormously sensible. But there is an issue that has not been addressed. What if the overseas central counterparties decide not to provide services to UK firms—if they decide, following the UK exit from the European Union, that they will withdraw from providing such a service? What provision has His Majesty’s Government made for providing those services in those circumstances?

Secondly, I echo the point that the noble Baroness, Lady Kramer, made about the competitiveness and economic growth objective that is being incorporated as a subsidiary objective. As a subsidiary objective, it is unobjectionable. What is striking in the government amendments that we will debate is the way in which it is continuously privileged, such that it no longer remains subsidiary; extra reports and consideration will now be required, all focused on one objective. This is a serious mistake, because the statutory objectives of the regulatory authorities will change with circumstance over time. Writing into law that one objective should be privileged is a significant error. The primary and secondary objectives make sense, but overegging the position of a subsidiary objective is a mistake.

My main point at this time is to ask the Minister what measures provide central counterparty provision in those areas where overseas central counterparties decide not to act for UK firms.

[Lord Harlech (Con)]

My Lords, I am grateful for both contributions to this short debate. The noble Lord, Lord Eatwell, brought up the competitiveness issue, which is something we will come on to at a later stage in the proceedings on the Bill. In answer to his point about overseas CCPs, that would be a commercial decision for that institution to make. However, the idea of the run-off regime is to provide time for UK firms to wind down their operations and make alternative arrangements.

Amendment 2 agreed.

Clause 6: Restatement in rules: exemption from consultation requirements etc

Amendment 3

Moved by

[Lord Harlech]

3: Clause 6, page 6, line 29, after “section 1B(1)” insert “, (4A)”
Member’s explanatory statement
This amendment would ensure that Clause 6(10)(a) of the Bill includes a reference to the duty relating to the competitiveness and growth objective, as inserted into section 1B of the Financial Services and Markets Act 2000 by Clause 24.

Amendment 3 agreed.

Amendment 3A

Moved by

[Viscount Trenchard]

3A: After Clause 6, insert the following new Clause—
“Report on retained EU law
(1) Within six months of the passing of this Act and every six months thereafter the Treasury must prepare a report containing, for each of the items of retained EU law listed in Schedule 1, whether it has been revoked and, if not, when it is expected that it will be revoked.(2) The report must be laid before each House of Parliament.(3) This section ceases to have effect after a report showing that all the items of retained EU law listed in Schedule 1 have been revoked.”Member’s explanatory statement
This amendment requires a progress report on the revocation of EU law covered by the Bill.

[Viscount Trenchard (Con)]

My Lords, Amendment 3A requires the Treasury to report every six months on the progress it is making in its challenging task of revoking, improving or retaining each of the items of retained EU law listed in Schedule 1 to the Bill.

This amendment and my other amendment in this group were originally tabled by my noble friend Lady Noakes, who is not in her place today. She is providing support to her husband, who is to undergo an operation this week, and she is unable to participate in our Report debates. Noble Lords on all sides of the House will miss her wise counsel and informed contributions to the Bill and to other Bills before your Lordships’ House. I am sure all will join me in sending our very best wishes to my noble friend’s husband for a successful procedure and a full recovery, and we look forward to welcoming her renewed participation in our work when she is able to resume her attendance.

In Grand Committee my noble friend moved an amendment that would, on 31 December 2026, have activated an automatic revocation of the legislation listed in Schedule 1 in order to incentivise the Treasury and the regulators to get on with the job. This would have been more consistent with the scheme of the retained EU law Bill as it was then drafted. Needless to say, my noble friend the Minister rejected the sunset clause and, during that debate, we learned that, while the Government have identified some priority areas, they have absolutely no plan or timetable for completing the task.

Noble Lords will be aware that my noble friend Lord Callanan indicated the Government’s support for my noble friend Lady Noakes’s recent amendment to the REUL Bill, which was adopted by your Lordships’ House at Third Reading. This requires reports on progress and future plans for retained EU law, until the Bill’s powers expire—at which point anything left remains on the statute book as assimilated law. The amendment also requires the Government to keep the retained EU law dashboard to be updated until 2026. These requirements seem to cover financial services legislation, so we shall have visibility of the status of that legislation and the Government’s plans until the last report under the retained EU law Bill, the report to 23 June 2026. In addition, there will be no obligation to update the dashboard after that date.

17:45

Since the Government have been reasonably clear that they do not intend to finish the task of the revocation and reform of financial services legislation by any particular date, it seems likely that the task will not be complete by June 2026. Accordingly, Parliament will get no comprehensive account of what has happened to the legislation listed in Schedule 1.

My noble friend Lord Callanan confirmed the Government’s commitment to continue to take advantage of our regulatory freedom to identify further opportunities for reform. He restated their commitment to reduce the burdens on business to unlock the economic growth that will flow from that. I am not advocating and would not support a regulatory race to the bottom, because I believe that the secret of the City’s past success has been London’s reputation for good and proportionate regulation, the rule of law, high standards, and efficient and transparent markets. It is essential that our regulators continue to move to protect the market’s reputation when it is necessary to do so.

However, the regulatory burden placed on financial firms in recent years has continued to grow inexorably. This has undoubtedly dissuaded many international firms from setting up shop in London and from listing their shares on the London Stock Exchange, as so clearly shown by the listings review undertaken by my noble friend Lord Hill of Oareford. As my noble friend Lady Noakes said in moving her Amendment 1 at Third Reading of the REUL Bill, it is important that the Government show more transparency about the progress they are making in dealing with retained EU law. I ask my noble friend the Minister to confirm that this applies as much to retained financial EU law as to all other retained EU law dealt with by the REUL Bill.

This Bill also represents a once-in-a-generation opportunity to achieve significant regulatory reform. Does my noble friend the Minister not agree that this amendment, in its effect, places a similar obligation on the Treasury in respect of financial services law to that which the Government have accepted in the case of other retained EU law? This amendment provides for slightly different information to that in the REUL Bill; it focuses on each of the items listed in Schedule 1 and asks for information on whether each has been revoked and, if not, when it is expected to be. This should not be onerous information to produce either before June 2026, when in any event it should be available by virtue of the requirement in the retained EU law Bill, or thereafter.

Does my noble friend not agree that the adoption of my amendment would strengthen the effective accountability of the Government and the regulators to Parliament, and would improve Parliament’s ability to oversee how well the Treasury is doing in carrying out its commitment to sensible and proportionate reform? It would also oversee how well the regulators are doing in applying their new competitiveness and growth objectives, as they remove many pieces of EU legislation that damage and work against the interests of our financial services industry.

I turn now to Amendment 3B, again originally tabled by my noble friend Lady Noakes. She tabled a similar Amendment 31 in Committee which sought to ensure that the FCA's designation of activities did not go beyond its operational objectives. The Minister reassured my noble friend that

“the FCA will be required to make rules relating to designated activities in a way which, as far as is reasonably possible, furthers one or more of its operational objectives. Simply put, the FCA will not be able to make rules about a designated activity unless doing so is in line with its objectives under FSMA.” [Official Report, 25/1/23; col. GC 99]

However, it seems to me that this may not require the FCA to make rules under the DAR in a way which furthers the new competitiveness and growth objective, for this is, unfortunately, only a secondary objective.

As other noble Lords have noted throughout the debates on this Bill, the culture and behaviour of the FCA suggests that there is a danger that it will find it easy to subjugate the need to have regard to the competitiveness objective, in order to reduce divergence from the EU regime whenever possible. It is not just the content of much EU regulation which has damaged the UK's competitive position; it is the codified nature and prescriptive style of the regulation. So, as my noble friend had intended to do, I have tabled Amendment 3B, which at least requires the Treasury to consult those affected by new regulations under the DAR unless the Treasury, using its own judgment, believes that designation of an activity is so urgent that it is impossible to carry out appropriate consultation. As my noble friend Lady Noakes said in Committee,

“it is important that when the Treasury brings forward designated activity regulations, it demonstrates that the activity is needed for these objectives and that it would not result in mission creep for the FCA”. [Official Report, 25/1/23; col. GC 92]

She explained that she was worried that the indicated designation of short selling would result in disproportionately cumbersome rules.

There is a belief held by some within both regulators and the Treasury that if something moves in financial markets, it ought to be regulated somehow. However, I cannot see the logic in regulating professional trades in short positions but not in long positions, because the risks are the same. If all risk in markets is to be eliminated, the City would assume the stability of the graveyard. I fear that if something was regulated in the EU, it will end up being regulated again, and some of the upside of our having left the EU will simply not be realised because there is believed to be a mindset, in particular in the Treasury, that what happened during the period of our EU membership has to be preserved if at all possible. We still have a leading position as one of the two leading global financial markets and we should ensure that we have the right regulatory regime for our markets, to aid innovation and competition, as well as maintain the best possible standards, for which we are highly regarded. As we diverge where we need to, the EU authorities may think we have adopted new rules which they should also follow, and may take their lead from us.

Besides, there is now every prospect that the EU-UK Forum, established pursuant to the agreement of the MoU on financial services co-operation, finally published on 19 May, will soon be operative. I note that the Government look forward to holding the first meeting of the forum as soon as possible, but it is depressing to read on the government website that the MoU itself is still subject to the internal processes of the European Union.

I had tabled Amendment 35 in Committee to remove the admission of securities to listing on a stock exchange from the list of designated activities. As I said then, there is

“no reason why unregulated firms may not act as sponsors for stock exchange listings”

and I

“therefore would question why the arrangement of listings should be a regulated activity”. [Official Report, 25/1/23; col. GC 93]

Further, as the UK Listing Review shows, the London Stock Exchange has tumbled down the list of global rankings in terms of the number of new admissions, market capitalisation and turnover volume in recent years. The standing and influence of the LSE has been greatly damaged by the loss of its ability to make its own listing rules and apply them. Does the Minister really believe that subjecting listings to the FCA will do anything to restore the lost position of the LSE?

My noble friend the Minister sought to reassure me in Committee, noting that

“the Government are in the process of a fundamental overhaul of the prospectus regime”.

She acknowledged that they are

“committed to deliver the outcomes of the UK Listing Review from the noble Lord, Lord Hill”.

She argued that

“the Government plan to use the DAR to put in place a simpler, more agile and more effective listing regime”. [Official Report, 25/1/23; col. GC 100]

However, does she not acknowledge that there is great scepticism among practitioners that regulation by the FCA is likely to improve the attractiveness and position of the LSE? Does she not agree that the consultation which my amendment would require would at least ensure that further consideration by those affected would be undertaken before any decision which might well have a further negative impact on the LSE?

I greatly regret the decision of SoftBank to list Arm only in New York rather than pursue a dual listing, which should have been the desired course for what is essentially a British company. We cannot afford to miss other similar opportunities for London. The number of companies listed in London has declined by 40% over the last 14 years. I doubt that putting the FCA in charge of listings will reverse that regrettable decline. I apologise for taking so much of your Lordships’ time, but all of this is very important. I beg to move.

[Baroness Lawlor (Con)]

My Lords, I support Amendment 3A of my noble friend Lord Trenchard. It is important to keep track of retained, revoked or modified EU law for this important sector. Businesses must know where they stand. Unlike the initial intention behind the REUL Bill to revoke all retained secondary legislation identified on the dashboard—some 4,000 or so laws before the Government changed course— financial regulation will be under the Treasury, and will not necessarily be revoked or retained. It may be modified; it may be revoked; it may be retained, but it will be for the Treasury and the regulators to decide.

I approach the amendment, as I did in Committee, in the hope that the Treasury will move rapidly to restore UK law for the sector, which has helped this very important sector to lead in the world over 200 years, rivalled only, as my noble friend Lord Trenchard said, by New York. But since leaving the EU, the UK has been burdened by the complications and costs of dealing with two different legal systems, something I have touched on in the REUL discussions. That is the code-based EU law and its precautionary approach, and common law which is, for want of a better word, an enabling law, under the jurisdiction of and tested by UK courts, and capable of being both precise and nimble to accommodate our entrepreneurs.

In Committee, there were amendments to encourage greater openness by the Treasury and the regulators. My concern is that Treasury thinking is in danger of slipping into the EU approach to legal thinking: that code-based precautionary approach, on which my noble friend Lord Trenchard has touched. Not only does that approach lack transparency, but it is not necessarily clear how it will be operated by the regulators. It is unequal to the fast-moving, innovative markets in the UK, and it is at odds with the competitiveness objective in this Bill. As a result, not only may businesses suffer from a lack of clarity about where they stand and how a regulation will be enforced, but they may feel it best to avoid an activity that could grow their business, increase trade and benefit consumers and indeed the wider economy.

18:00

It is indeed this economy and its people who bear the cost of that dual system on which my noble friend Lord Trenchard touched, the danger being that the lack of competitiveness might stymie the economy. The reporting requirement is important to encourage further reform and transparency. It will enable a determined effort to be made to move rapidly. It matters that we have greater certainty about where things have got to and what still remains to do. Many do not have ready access to legal help to navigate their way through the retained EU law book and the more complex system for the financial sector, so I hope that my noble friend the Minister will look kindly on and support this amendment. It will make for fairness so businesses are clear about the rules, and it would be a means to the prosperity of the whole economy that we need to encourage. In my view we need to move back more rapidly and thoroughly to our common-law system, and I urge the Minister and the Treasury to be equally as receptive to the obligation to report regularly as her colleagues on the Business team.

[Baroness Kramer (LD)]

My Lords, I will be very brief. I have no objection to either of these amendments, although for very different reasons from the previous two speakers. On the first, which is about the report on retained EU law, it seems sensible to have a proper and lasting reporting requirement to Parliament, although I point out to those who are very worried about additional burdens that the report itself generates a huge amount of effort, energy and paperwork, so I doubt it goes very far in reducing any burden on anybody.

I am more interested in the second amendment tabled by the noble Viscount, Lord Trenchard, Amendment 3B, because it embeds the principle of accountability to Parliament and the wider world and states that, where changes are made in regulation, other than in situations of genuine urgency—I underscore “genuine” because we have seen that flex a great deal, with things said to be very urgent that seem to have no urgency whatever attached to them—the Treasury should carry out consultations.

I say to both previous speakers that if they speak to the industry they will find that the struggles that the financial sector has been facing in the UK—the decline in listings, virtually the complete loss of the European swaps market, our gradual exclusion from a significant range of activities that are international and certainly pan-European and fintech outsourcing extensively into Europe—are post-Brexit consequences. Frankly, I do not think that amendments such as this, in the hope that there will be much lighter-touch regulation, which is what common law really means, are going to remedy that problem. We built our reputation on quality and consistency and, like it or not, those are quite demanding standards that light-touch standards do not achieve.

[Baroness Chapman of Darlington (Lab)]

My Lords, we are grateful to the noble Viscount, Lord Trenchard, for bringing these amendments forward and we ask him to pass on our very best wishes to the noble Baroness, Lady Noakes, and her husband. I am sure she will be impressed by the way he introduced her ideas this afternoon. I feel somewhat that we are intruding on a bit of a family squabble on the Government Benches with this group in that, in the retained EU law Bill, the amendment that she brought forward was as a consequence of her deeply felt disappointment—shared by the noble Baroness, Lady Lawlor, if I remember her speech at the time, and others—at the Government’s change of approach to that Bill. The change of approach was one that we had been calling for and very much welcomed, and we did not feel on that Bill and we do not feel on this Bill that there is an awful lot to be gained by these amendments. There is not a huge amount to be lost either, particularly with Amendment 3A. We are interested in what the Government have to say about them, but they are not amendments that we take a particularly firm view on either way because we think they are designed with a rather different purpose in mind, which is to hold the Government’s feet to the fire.

[Baroness Penn (Con)]

My Lords, I join noble Lords in wishing my noble friend Lady Noakes and her husband well, and I look forward to her return to this House. As my noble friend Lord Trenchard noted, she worked with our noble friend Lord Callanan on amendments to the retained EU law Bill to introduce similar reporting standards to those in Amendment 3A. I can confirm that the reporting requirements in the retained EU law Bill already apply to the retained EU law repealed through Schedule 1 to this Bill, so the reports that the Government prepare under that obligation will include the Treasury’s progress in repealing retained EU law in Schedule 1.

I reassure my noble friends that through the Bill the Government are asking Parliament to repeal all legislation in this area, and we expect to commence it fully. The revocation is subject to commencement, and each individual piece of legislation listed in the Bill will cease to have effect only once the Treasury makes an SI commencing the repeal. As I noted in Committee, this is being taken forward in a carefully phased and prioritised way to deal with retained EU law, splitting it into tranches and prioritising areas that will provide the most concrete benefits to the UK. The implementation will take place over a number of years, which means that we are prioritising those areas with the greatest potential benefits of reform. We have demonstrated intent and action in this area. We have conducted a number of reviews into parts of retained EU law, including the Solvency II review, the wholesale market review and the UK listings review by my noble friend Lord Hill of Oareford, which my noble friend Lord Trenchard referred to in his Amendment 3B. The whole- sale markets review reform in Schedule 2 demonstrates the Government’s pace and ambition for reforming retained EU law, and that is very much the case.

I turn to Amendment 3B. Of course the Government must think carefully before choosing to replace EU law, and understand the impact of any replacement. The Government have consulted extensively on their approach to retained EU law relating to financial services, and there is broad consensus in the sector behind the Government’s plans, as I have already noted. However, I do not believe that an explicit mandatory statutory obligation to consult impacted parties is required. The powers in the Bill to designate activities under the designated activities regime are closely modelled on the secondary powers which already exist in FiSMA, especially the power to specify regulated activities. This existing power does not have an explicit statutory obligation to consult. I think the Government have already demonstrated that they will always consult when appropriate and will always approach regulating a new activity carefully. We can see this in the Government’s consultation on the regulation of funeral plans in 2019, and in draft legislation related to “buy now, pay later” published in February.

My noble friend Lord Trenchard referred to the listings review and implementing its results but, again, the Government have already consulted extensively. They launched a consultation in July 2021 that ran until September this year, and the proposals on listing reforms received broad support across the industry. The Government have already published a draft statutory instrument to illustrate how the new powers in the Bill could be used to bring forward a new regime in this area, so I believe that the Government have already demonstrated that they will consult properly when using the regulated activities order power. Therefore further amendments in this area are not necessary, so I hope my noble friend is able to withdraw Amendment 3A and will not move Amendment 3B.

[Viscount Trenchard (Con)]

My Lords, I thank all noble Lords who have taken part in this debate. In particular, I thank my noble friend Lady Lawlor for her support, and I entirely agree with what she said about the need to move back to our former common law-based approach. The noble Baroness, Lady Kramer, suggested that this would mean not just common law but going back to a simple, light-touch regulatory system. I am advocating going back not to a light-touch regulatory system but to a system based on common-law principles which also maintains the high standards for which the City is renowned across the world. Such a system is pursued also in the United States, Australia and many other countries with which we are doing more and more in financial services, including many CPTPP countries.

I am nevertheless grateful for the noble Baroness’s support, at least on Amendment 3B. I was not sure about the noble Baroness, Lady Chapman, but she was at least interested in both amendments and, I think, supported the need for increased accountability to Parliament.

I speak to the financial services industry and know many people in it. I have some outside interests, which I have declared, which involve me in it. I simply do not agree that all participants in the industry blame Brexit for the difficulties it faces. Rather, there are large parts of the financial services industry—in banking, insurance and asset management—which are waiting for us to reap the benefit of the upside of being free to develop our own regulatory regime. We have suffered the downside, which we knew would happen; we believe that reaping the benefits of the upside will be necessary to ensure that London can maintain its leading position. I very much hope that we can rely on the support of the parties opposite, as well as my noble friends, in seeking to ensure that that happens.

I am to some extent reassured by my noble friend the Minister’s words and her response to these amendments. She went further than I have heard her go before in saying that it is the Government’s intention to repeal all the EU retained law in—I think—Schedule 1, and that she has prioritised some areas. However, there are other areas that she has not prioritised. One of the those is the alternative investment fund managers directive and all its associated legislation, which was opposed universally by practitioners and—at the time—by the Treasury as well as by the regulators. Nevertheless, it was foisted on us by the EU for political reasons. I am very disappointed that few people in the Treasury seem to recognise how many small investment management companies have gone out of business or not succeeded in introducing new products because of the cost and burden of complying with this regulation. This is why, later in the Bill—I will not speak to it today —I have again brought back my amendment dealing with that issue. It is just one example of bits of EU legislation that, six years after the Brexit vote, I believe this Bill should deal with immediately.

I thank my noble friend for her partial reassurance and, in the circumstances, I am happy to withdraw my amendment.

Amendment 3A withdrawn.

18:15

Clause 8: Designated activities

Amendment 3B not moved.

Amendment 4

Moved by

[Baroness Penn]

4: After Clause 20, insert the following new Clause—
“Sustainability disclosure requirementsSustainability disclosure requirements
(1) FSMA 2000 is amended as follows.(2) After section 416 insert—“Sustainability disclosure requirements416A SDR policy statement(1) The Treasury may prepare an SDR policy statement.(2) An “SDR policy statement” is a statement of the policies of His Majesty’s Government concerning disclosure requirements in connection with matters relating to sustainability.(3) In preparing an SDR policy statement, the Treasury must consult the regulators.(4) The Treasury must publish any SDR policy statement in such manner as they consider appropriate.(5) The Treasury—(a) must keep any SDR policy statement under review;(b) may prepare a revised statement (and subsections (3) and (4) apply in relation to any revised statement);(c) may withdraw any SDR policy statement.(6) The Treasury may request a regulator to provide them with a report on any matter that the Treasury require in connection with the preparation of an SDR policy statement.(7) A request for a report under subsection (6)—(a) must be made in writing, and(b) may require a regulator to send the report to the Treasury within such reasonable period as may be specified in the request (or such other period as may be agreed).(8) A regulator must comply with a request under subsection (6).(9) Nothing in section 348, or in regulations made under section 349, is to be taken as preventing or restricting the ability of a regulator to disclose information to the Treasury for the purposes of this section.(10) Subsection (9) does not apply in relation to information provided to a regulator by a regulatory authority outside the United Kingdom.416B FCA and PRA rules etc(1) When making rules or issuing guidance in connection with disclosure concerning matters relating to sustainability, a regulator must have regard to any SDR policy statement (within the meaning of section 416A) that the Treasury have published and not withdrawn.(2) For the purposes of this section, matters relating to sustainability include matters relating to—(a) the environment, including climate change,(b) social, community and human rights issues,(c) tackling corruption and bribery, and(d) governance, so far as relevant to matters within paragraphs (a) to (c).”(3) In Schedule 1ZA (the Financial Conduct Authority), in paragraph 11 (annual report), in sub-paragraph (1)—(a) after paragraph (ha) insert—“(hc) how it has satisfied the requirement in section 138EA(2) so far as regarding disclosure requirements in connection with matters relating to sustainability;”; (b) after paragraph (ia) insert—“(ib) how it has satisfied the requirement in section 416B to have regard to any SDR policy statement of the Treasury published and not withdrawn under section 416A (sustainability disclosure requirements: policy statement);”.(4) In Schedule 1ZB (the Prudential Regulation Authority), in paragraph 19 (annual report), in sub-paragraph (1)—(a) after paragraph (e) insert—“(ea) how it has satisfied the requirement in section 138EA(2) so far as regarding disclosure requirements in connection with matters relating to sustainability;”;(b) after paragraph (fa) insert—“(fb) how it has satisfied the requirement in section 416B to have regard to any SDR policy statement of the Treasury under section 416A (sustainability disclosure requirements: policy statement), and”.”Member’s explanatory statement
This amendment would support the regulation of disclosure requirements relating to sustainability by requiring the FCA and the PRA to a.) comply with a request by the Treasury to provide a report in order to inform a policy statement by the Treasury on such requirements and b.) have regard to such a policy statement when making rules or issuing guidance about such requirements.

[Baroness Penn (Con)]

My Lords, the UK is a leading jurisdiction for sustainable finance, and the Government are proud of that record and determined to maintain and further that position. Since Committee stage, London has been ranked as the leading global green finance centre for the fourth consecutive time. Government effort, including on sustainability disclosure and reporting, has played a vital role.

The Government’s success in green finance has been down also to the responsiveness and technical capability of our independent regulators, who have collaborated to drive forward our policy on sustainability disclosures. The Government’s approach was established in the 2021 paper, Greening Finance: A Roadmap to Sustainable Investing, where we set out the foundations of sustainability disclosure requirements—or SDR—which build on our world-leading implementation of the recommendations of the Task Force on Climate-related Financial Disclosures, or TCFD. This includes taking forward an approach across the economy to implementing international standards, enabling firms to plan for the transition and ensuring that this information flows to investors and financial consumers. Credible, usable information is a core component of green finance that will allow us to reach our goals on sustainability. When this information is available, market participants can use it to take sustainability into account when making investment decisions. Our plan for SDR is central to delivering this.

In Committee, some noble Lords raised concerns about the Government’s ongoing commitment to implementing these important reforms, the legal basis for implementing them, and the timelines for doing so. I am therefore pleased to be able to update noble Lords on a number of substantive developments since then.

Significantly, the Government published an updated green finance strategy on 30 March. This set out next steps across core elements of SDR. The Government will consult on extending the transition planning requirements—a core component of SDR—to the largest private companies once the Transition Plan Taskforce has completed its work later this year. The Government will also set up a framework to assess the suitability of the IFRS International Sustainability Standards Board’s standards for adoption in the UK. The Government remain committed to delivering a usable and useful UK green taxonomy and expect to consult on this in autumn 2023. They are also committed to setting out further detail on SDR implementation and the timeline for it this summer to reflect the rapid development of international standards.

Alongside this, the Financial Conduct Authority continues to take forward SDR for authorised persons, including consumer-facing disclosure requirements, under its existing objectives and rulemaking powers, which are sufficiently broad for the purpose. The FCA intends to issue its policy statement on SDR and investment labels in the third quarter of this year.

However, the Government recognise that SDR policy has strong links to wider environmental policy and that they therefore have an important role to play in shaping SDR. That should be recognised in legislation. Parliament must be able effectively to scrutinise the actions of government and the regulators in this area.

Amendment 4 will therefore require the FCA and the PRA to have regard to any policy statement made by the Treasury on SDR when they make rules in connection to sustainability disclosures. The amendment obliges the regulators to consider the Government’s wider policy goals when bringing forward SDR rules, while still maintaining their independence.

Regulators will also be required to report on how they have satisfied the requirement to have regard to any such policy statement on an annual basis. This will support Parliament in scrutinising the regulator’s actions on SDRs. This ongoing reporting will support transparent, structured co-operation between the regulators, government and Parliament to achieve the UK’s objectives in this space.

We will be debating a number of other sustainable finance issues today, and disclosures are at the heart of some of the matters that they raise. The amendment is therefore an important measure in that context as well as in its own right. I beg to move.

[Baroness Wheatcroft (CB)]

My Lords, I thank the Minister for her introduction of Amendment 4 and her willingness to engage with Peers on the topic of sustainable disclosure requirements. However, while a government amendment on this important topic is welcome, what we have heard is yet more delay. A cynic might judge the amendment to have a whiff of green- washing about it. It does not do enough and does not do what is required. The amendment seeks to give regulators and Ministers the necessary powers to bring forward rules and regulations on SDRs in fulfilment of commitments that they made in 2019, 2021 and again in the green finance strategy in March this year.

Amendment 114 is an effort to be helpful because, despite making commitments for five years, the Government still do not have the powers to make sustainable disclosure requirements happen. Amendment 4 does not confer those powers. The noble Baroness, Lady Ritchie of Downpatrick, submitted a Parliamentary Question on this issue on 14 November last year, and the Government’s response was that:

“The FCA has extensive powers to … impose some of the Sustainability Disclosure Requirements”.


The noble Baroness also asked about the powers available to the Department for Work and Pensions, which would legislate for sustainability reporting by occupational pension schemes. An extensive search of the powers held by the DWP in relation to public reporting and sustainable reporting has found none that is suitable.

Amendment 4 gives the Treasury the power to issue a policy statement on SDRs and to require the regulators to report against it, but it is not an obligation—the Treasury “may” prepare an SDR policy statement. As the Minister admitted in her response last year to the noble Baroness, Lady Ritchie, the FCA does not have the powers to actually implement SDRs. It seems that we are looking at a Whitehall paper trail that keeps everyone occupied but with no meaningful legislation.

I am in favour of easing unnecessary burdens on business. However, repeatedly indicating—as they have for five years—that the Government are planning to legislate but not actually doing it creates a burden in itself for business. Should it invest in data, in systems or in strategy? After so many reassurances but so little progress, and more reassurances today, no one really seems to know the answer.

I noted with interest that the Minister’s letter to Peers ahead of tabling this amendment said that

“the Financial Conduct Authority is taking forward Sustainable Disclosure Requirements (including consumer facing requirements) under its existing objectives and rulemaking powers which are sufficiently broad for the purpose”.

I would like to understand the misalignment between that statement and the earlier Answer to the Question from the noble Baroness, Lady Ritchie. Is it because there has been a change of heart and the Treasury has discovered that the powers exist after all? I would be grateful if the Minister could clarify that. Or has the Treasury limited its proposals from its original ones so, while it did not have the powers for the original proposal, it does for the new, limited proposals? Or—and it would be deeply disappointing if this were the case—is the reference in the Minister’s letter to the FCA to “taking forward” SDRs intended to mean that the FCA would be merely progressing the work but not actually implementing it? Again, I would be grateful for clarification. The FCA consultation on SDRs closed on 25 January. We are promised a policy statement in the third quarter but, without statutory powers, that would be pointless.

I hope the Minister will be able to answer those questions and now, if we are able to accept the amendment, I hope she will be able to go a little further. While the amendment sets the right tone, it does not do what is needed. It embraces the idea of SDRs but does not make them a reality. The same governmental reluctance to take real action lies behind my Amendment 7, concerning vote reporting. If investors are to make serious decisions on ensuring that their savings are put to work in a sustainable way, it is essential that they be able to see how those who manage the money choose to vote on corporate issues. That is a crucial part of being an engaged investor. The FCA itself acknowledges that. Earlier this year, its vote reporting group stated:

“Improving transparency of how asset managers vote on behalf of their clients will mean investors can better hold them to account on their stewardship”.


We would all want that, but currently it is not possible for investors always to learn how their investments are being voted. Yes, there is now an FCA requirement under the shareholder rights directive that fund managers and insurers produce an annual report on how they have voted, but it is only that they must comply or explain; and even then, the requirement is only that they should report on significant votes. The FCA gives no guidelines as to what should be deemed significant, and what one investor feels is significant may not concur with what a fund manager deems so.

The fund manager is required to report only at group level, so, in terms of the individual funds in which investors and pension funds might be invested, how their votes have been voted in the individual funds cannot be seen; it is only possible to see across the group, which is effectively meaningless for many people who want to find out how their money is being used. A report is required to be made only annually—a hopeless timescale in an industry that moves as fast as this one. Nor is there any standard form for vote reporting. It is not a lot to ask in a digital age. The SEC in the US certainly demands it.

For all those reasons, the current situation does not serve investors as well as it should. Amendment 7 would require FCA-regulated investment managers and insurers to provide clients and those investing with them with voting information that they requested in a standard format and within 30 days. In Committee the amendment on this topic included pension funds in the requirement to report but, mindful of the DWP review of pension fund reporting, the current amendment is much narrower and does not prejudge the review. However, in the meantime it should help pension funds to monitor the way their investments are being voted. It is true that the FCA vote reporting group has yet to reach conclusions, but there is no reason to wait for that. Parliament has the power to put demands on the FCA, and this is a case where it should.

The Government accept the need for good stewardship by investors, and transparency on voting aids that. It is important, indeed crucial, for good corporate governance that decisions taken on behalf of investors should be clear and easily ascertainable. Making voting records available speedily in a machine-readable way would be a service to investors that, thanks to digital innovation, should be easy and relatively cheap to implement. Why would the Government resist that? I beg to move.

[Baroness Hayman (CB)]

My Lords, I declare my interest as chair of Peers for the Planet and apologise for the fact that I may need to speak a little longer than I normally would on Report. This is a very diverse group of amendments on different subjects, some of which are quite technical, but I can be brief in relation to Amendments 4, 7 and 114, which the noble Baroness, Lady Wheatcroft, has just so ably described. I appreciate that the Minister has done what she said she would on SDRs and tried to make some progress, but I fear there is still a legislative gap there—a gap that we could, on this Bill, usefully fill for her. I support what the noble Baroness has said and look forward to the debate on Amendment 91, on forest risk commodities, to which I equally give my support.

18:30

I will focus my comments on the three cross-party amendments in this group, which are in my name. I start by speaking to Amendments 93 and 113 on investment duties, specifically relating to fiduciary duty. They have a parallel with Amendment 114, in that they seek to be constructive by giving the Government the powers they need to advance their own stated policy agenda. These amendments provide powers to the FCA in relation to fund managers and personal pension schemes and to the Secretary of State for DWP in relation to occupational pension schemes, respectively, to issue guidance about consideration of the long-term consequences of investment decisions, the impacts of risk and the impacts of investments on society and the environment. The amendments work alongside each other. I will focus my remarks on Amendment 113 and allow colleagues to provide more insights on Amendment 93 in due course. I am extremely grateful for the support of the noble Baronesses, Lady Altmann, Lady Drake, Lady Sheehan and Lady Wheatcroft.

Both the Principles for Responsible Investment, a UN-funded body with more than 3,000 signatories and more than £80 trillion in assets, and the UK Sustainable Investment and Finance Association, a body with more than 300 members and £19 trillion in assets, have identified a common lack of understanding within financial services on investors’ fiduciary duties, and have called for guidance. The Government’s green finance strategy, published in March, recognised this. It said that

“trustees would like further information and clarity on their fiduciary duty in the context of the transition to net zero”

and commits to measures to clarify this. My amendment seeks to support that clarification.

The strategy also included announcements of a working group of the Financial Markets Law Committee, a body chaired by the noble and learned Lord, Lord Thomas of Cwmgiedd, and separate government-convened round tables to look at what further action is needed. The Government are right to recognise that this is an issue on which pension fund trustees actively want further information and clarity. I have been extremely grateful to the noble and learned Lord and to members of the FMLC for their engagement on the text of this amendment and helpful input on the subject. However, the wording of the amendment is of course my own.

Given the Government’s agreement that there is a demand from pension fund trustees and the actions under way to look at what action is needed, my amendment simply seeks to give the Government and regulators the tools to finish the job. I should make it clear, for the avoidance of doubt—I know that there are noble Lords who are pension fund trustees and are concerned on this issue—that this amendment does not seek to undermine anyone’s duties to their clients. It puts the duty to act in savers’ best interests in the Bill. It limits the topics on which the Secretary of State can issue guidance and makes it explicit that pension fund scheme trustees must manage financial risks, as well as environmental and social impacts.

At the moment, neither the DWP nor the Pensions Regulator can issue guidance with statutory weight on this topic. The Government are limited to non-statutory guidance, which is purely voluntary and often not widely followed. I cite as an example the Pensions Regulator’s 2021 survey of defined contribution schemes, which found that more than 80% did not allocate any time or resources to managing climate risk, despite guidance encouraging them to do so since 2016. My amendment is designed to address this issue by giving the Government the power to issue statutory guidance that pension schemes must have regard to, but are not required to follow if they identify good reasons for divergence.

The DWP does not currently have powers to issue such guidance. This strikes a balance between support on the one hand and freedom to innovate on the other. Although work on the issue is ongoing, given the Government’s recognition that action in this area is urgent, it makes absolute sense to take the powers they need now rather than wait for a future relevant Bill, which could be two, three, four or five years away.

I think that the noble Baroness, Lady Drake, will speak more on Amendment 93 about the importance of guidance issued by the FCA. I simply note two things. First, where guidance is issued for occupational pension schemes, corresponding guidance should be made available for personal pension schemes. Otherwise we face regulatory arbitrage, whereby firms on one side of the fence are subject to different expectations from organisations that happen to be on the other. Secondly, a symmetry of duties is desirable. If pension schemes are to have guidance about factoring in the long-term effects of decisions, and both the risks and impacts of their investments, it is important for their agents—the fund managers—to have corresponding guidance on how to serve their clients. Companies already have such a duty to their shareholders under Section 172 of the Companies Act 2006. It would do no harm, and could offer a great deal of help, for investment intermediaries to have similar guidance. I hope that the Minister will be able to respond positively to these amendments.

Finally, I turn to my Amendment 15. All the amendments in this group go with the grain of stated government policy, and nowhere is this clearer than in relation to Amendment 15. It would add nature to the new regulatory principle on net-zero emissions, and require the PRA and the FCA to consider the need to contribute towards commitments made to address both climate change and biodiversity loss. It would give legislative effect to clear government policy. I thank the noble Baroness, Lady Sheehan, the noble Lord, Lord Vaux of Harrowden, and the noble Earl, Lord Caithness, for their support.

It is with some reluctance that I am not pursuing my Committee stage amendment introducing a climate and nature secondary objective to the Bill. It was made very clear by the Government in Committee that no progress could be made on this, but I hope that we can take action in relation to the regulatory principle, as Amendment 15 so patently follows stated government policy. Indeed, I considered not using any of my own words in this speech and simply reading out a list of the Government’s consistently repeated commitments on policy in this area. Alas, some linking paragraphs were required, but much of this speech is a reminder of what has been promised—and what must be delivered to make good those promises.

Financial regulators and financial sector actors are empowered to act on both the economic benefits of nature and the costs and risks of not doing so. In the Government’s words,

“we want our world-leading financial services sector to drive every step of the global transition”.

In recent years there has been a growing recognition that nature is a critical part of this transition. The risks and opportunities this presents led to Her Majesty’s Treasury commissioning Professor Sir Partha Dasgupta of Cambridge University to undertake an independent review on the economics of biodiversity

“and to identify actions that will simultaneously enhance biodiversity and deliver economic prosperity”.

This resulted in the Dasgupta review of 2021, which clearly articulates the extent to which economic growth has come alongside massive environmental degradation, and that a failure to make transformational change towards a path of sustainable growth is actually undermining our prosperity, now and for the future.

The Government responded to the findings of the Dasgupta review, acknowledging that:

“Delivering a nature positive future requires integrating the natural environment—and its goods and services on which we all rely—into our economic and financial decision-making, and the institutions and systems that underpin and drive those decisions”.

I am tempted to say “I rest my case”, but I will continue.

At the end of 2022, on the international stage the UK agreed the Kunming-Montreal Global Biodiversity Framework at COP 15. Its two targets seek to embed biodiversity within fiscal and financial flows. Just a few months later, the Government published their updated green finance strategy, which continues to bolster their commitment towards conserving and enhancing nature. It stated:

“The global transition to a resilient, nature-positive, net zero economy will see trillions of pounds reallocated and invested into new technologies, services and infrastructure. There are huge opportunities for the UK’s financial and professional services industry in this transition”.

I recognise that various initiatives are under way, such as the work of the Taskforce on Nature-related Financial Disclosures, which will undoubtedly make a contribution over time, but relying on voluntary action and market forces will not produce a transformation at the pace and scale required. What is needed is a systemic approach and it is essential that we use the opportunity of the Bill, which deals with the regulatory architecture of the financial services sector, to provide an enabling regulatory environment which can help turn government commitments into clear legal signals.

This is not just my view; it is shared by Professor Dasgupta, who has written to the Chancellor in support of this amendment. He has also issued a statement saying that

“the government recognised the urgent need to integrate nature into economic and financial decision-making and related institutions. The Financial Services and Markets Bill … presents an opportunity to make progress on this commitment. I urge the Government to support the proposed amendment to place a responsibility on financial regulators to consider nature alongside net zero when carrying out their functions. We need to empower those in charge of regulating our financial system to support the sector, to arrive at a nature positive destination”.

I am enormously grateful to Professor Dasgupta for his contribution, both in his report and to our discussion today.

In the ministerial foreword to the green finance strategy document this year, Jeremy Hunt, Grant Shapps and Thérèse Coffey—the Chancellor, the Secretary of State for DESNZ and the Secretary of State for Defra—were crystal clear:

“Our ability to exploit the opportunities of this new Green Industrial Revolution will depend on our readiness to finance it”.

It will depend on our readiness and the regulatory framework that allows them to do so. Too often this Government will the end but not the means, and their aspirations are not turned into actions. I hope that the Minister will, even at this late stage, be able to accept the amendment. If not, when the time comes, I will certainly seek the opinion of the House.

[Baroness Boycott (CB)]

My Lords, I declare my interests and will speak to Amendment 91, which is in my name. I also express my absolute support for the other amendments, particularly Amendment 15, which was so brilliantly introduced by the noble Baroness, Lady Hayman, and accompanied by the quotes from Professor Dasgupta. It underlines everything that this group is trying to achieve.

I very much thank the noble Lord, Lord Randall of Uxbridge, and the noble Baronesses, Lady Chapman of Darlington and Lady Sheehan, for their support on Amendment 91. This amendment specifically introduces due diligence obligations for UK financial institutions to prevent the financing of illegal deforestation. Research I found last week stated that February 2023 had the highest rate of deforestation of the Amazon ever recorded, despite the conferences and the world’s agreement. Clearly, this is out of control and needs much more tough regulation. That is what this amendment seeks to introduce.

18:45

The Government list halting deforestation as a “top priority” in their net-zero strategy, but the scale of finance continuing to flow from British banks and investors to the companies actively destroying the world’s tropical forests shows that in practice the Government do not prioritise this issue. Much as was said by the noble Baroness, Lady Hayman, we are talking a good talk but in practice we are not walking a good walk.

Over 90% of tropical deforestation is driven by agriculture. Research commissioned by the FCDO shows that at least 69% of forest clearance for agricultural purposes is illegal. Despite this exceptional level of risk, that sector continues to hide behind weak voluntary pledges, hoping that the public and the Government will not notice that they are the main characters in this crisis.

In many ways, this amendment is extremely modest. It merely asks that financial actors carry out simple checks to ensure that the companies they finance are not routinely engaged in breaking the law through illegal deforestation. It is taken straight from the recommendation made by the Government’s own expert body, the Global Resource Initiative taskforce. It has been updated for Report to take into account the views of the Minister, which we were grateful for, and the financial sector, so that the specific procedural requirements placed on financial actors would be brought forward through secondary legislation. This leaves the Government with the flexibility to design a regime that works to genuinely minimise the risk of financing deforestation but does not lead to unnecessary de-risking because of incomplete information.

The Minister presented several arguments against this requirement in Committee, including that there is insufficient data on how to conduct due diligence because there are no

“equivalent disclosure requirements to those that will be set out under the Environment Act 2021 in jurisdictions across the globe”.—[Official Report, 7/3/23; col. GC 110.]

My noble friend also proposed that we must wait for a new framework, under development by the Taskforce on Nature-related Financial Disclosures, which is a very long time coming. Both arguments are incorrect.

The European Union’s new deforestation-free product regulation has introduced a much tougher regime than the one we set under Schedule 17 to the Environment Act. Traders wishing to place products on the single market must now ensure that their products are both deforestation free and produced in accordance with local law. That regulation requires traceability to the geolocation where a commodity was grown. This level of supply-chain monitoring is eminently practical, and such information will soon be readily available.

Moreover, triggered by that regulation, the EU has begun an analysis of the role of the European financial institutions in financing global deforestation. This process gives the European Commission the power to propose new regulations for the financial sector. It has been supported by civil society and progressive financial institutions, with over €177 billion now under management in this way.

I do not wish to indulge this line of argument too much, because there is, even without this new EU regulation, already more than enough data for financial institutions to carry out their due diligence. It is just the incentive that is missing. For this reason, I do not agree with the Minister that we must wait for the framework being produced by the Taskforce on Nature-related Financial Disclosures before we ask banks to take action. More data would be useful, but there is no reasonable excuse for not using the data already freely available from the clients, in combination with open-source information such as satellite data, grievances from local communities and adverse media coverage. We are talking about illegal activity here.

I am grateful for the Minister’s engagement on this amendment, but I am yet to hear a compelling argument about why any information a company would share in its TNFD reporting would result in a change in financing patterns. Right now, financial institutions routinely choose to ignore high-profile exposés about illegal deforestation practised by their top clients. Put simply, the TNFD will not stop UK finance from flowing to those offenders. A lack of information is not the problem; the problem is the lack of a mandatory due diligence duty requiring that the information be put to use.

This amendment is a logical next step to Schedule 17 to the Environment Act 2021, which, if secondary regulations are ever brought forward after over a year of delay, will ban the import of certain goods produced on illegally deforested land. This amendment would allow us to future-proof UK financial regulation so it delivers a liveable planet and a workable food system, with all the attendant benefits for global economic stability. Inaction allows these deforesting companies to continue turning a profit by undermining the basis for future prosperity. It goes absolutely in the face of everything in the Dasgupta review. I look forward to the Minister’s response, and will be testing the opinion of the House on this.

[Baroness Drake (Lab)]

My Lords, I declare my interests as trustee of DB and master trusts. I will speak to Amendment 93. Government Amendment 4 is welcome because it recognises the necessary direction of travel on disclosure requirements on sustainability, but the problem is that it is not sufficient. It gives the Treasury the power to issue a policy statement on SDRs and to require the regulators to report against this, but the FCA does not have the powers to actually implement SDRs. As Amendment 93 proposes, there is a need to give the FCA the power to publish guidance on how asset managers must consider the long-term consequences of any decision; consider the impact of climate, nature and society on their investments; consider the impact of their investments on climate and nature; and publicly report on their considerations.

It is interesting that the explanatory statement accompanying the published government amendment states that it supports

“the regulation of disclosure requirements relating to sustainability”

by requiring the FCA not only to have regard to Treasury policy but to inform a policy statement by the Treasury. It is difficult to see how the FCA could optimally inform Treasury policy if it does not set guidance on expected content and open reporting by asset managers on the impact of their investment decision-making.

Confusion among fiduciaries about the extent of their duty to consider such impacts is not limited to occupational pension schemes; it runs across the length of the investment chain. The FCA has broad powers to issue guidance under Section 139A of the Financial Services and Markets Act 2000, but there is still an ambiguity. Amendment 93 gives the FCA the explicit power to issue guidance on the disclosure of considerations of sustainability impacts as a core part of the investment managers’ duties. This is not inconsistent with the existing duty on trustees, in Regulation 2 of the occupational pensions investment regulations, to report on how they have complied with the Section 35 duties of the Pensions Act 1995.

The proposed FCA guidance is not legally binding: regulated firms would be free to diverge from it, but there is an expectation that they would need to explain why they have done so. There is a need to apply the guidance to contract-based personal pension schemes as well, to avoid the risk of regulatory arbitrage between a weaker FCA regime and a more robust TPR disclosure regime.

The concept of fiduciary duty borne by those responsible for the best interests of pension scheme members is evolving, and, as we heard, the Government’s updated green finance strategy of 2023 includes a commitment to review pension trustees’ fiduciary duties and stewardship activities. That trustees must act in the best interests of scheme members must not be a principle in doubt or, indeed, overridden. The key issue is what “acting in savers’ best interests” means in law for fiduciaries, and the extent to which it includes stewardship and ESG engagement. If fiduciaries ignore the impacts of investment strategies on society, climate and nature, or vice versa, those major externalities will eventually impact them at a later date.

In seeking more productive investment by the finance sector, the Government should acknowledge that pension funds are not the only decision-maker or the beginning and end of the problem; asset managers have an equally key role to play in managing impacts and considering the long-term consequences. Amending FCA regulation powers to guide open reporting on these matters will encourage investment away from environmentally and socially damaging activities, and towards supporting efficient transition to net zero, nature protection and healthy societies, in a way that is in the savers’ best interests and that supports the successful transition of the wider economy.

Guidance from regulators is required along the length of the investment chains as risks become more acute. Pension schemes contract with fund managers to manage assets. If schemes are expected to consider the sustainability of their investments, they need fund managers to support them by undertaking that activity too. Trustees’ ability to discharge their ESG and stewardship responsibilities to greatest effect has a dependency on how regulators expect asset managers to discharge their duties. Expectations placed on pension funds and asset managers are a complement to, not a substitute for, government policies on efficient transition to a sustainable economic future. Government regulations that perversely drive greenwashing or green asset bubble risk are equally unsustainable.

The Government want to see more productive investment by the financial sector, but mandating how citizens’ private assets are invested would displace trustee fiduciary duty with state control of private assets, inviting litigation and risking impacting public attitudes to private saving. But, in giving the FCA power to guide the content and require open reporting on sustainability, Amendment 93 can assist confidence in aligning members’ best interests with increasing productive investment. I commend it to the House.

[Lord Naseby (Con)]

My Lords, I welcome Amendment 4. Having listened to my noble friend on the Front Bench in Committee and subsequently, I know that she played a major role in this absolutely vital amendment coming forward.

The noble Baroness, Lady Wheatcroft, was quite right. Let us reflect on two key areas where we desperately need the SDR policy statement. First, in terms of the energy market, is the national grid. Today, all sorts of decisions have to be made by the energy market, whether on nuclear, solar or whatever else. People in that market want to know at what point the national grid will be in a position to be connected to them—that is absolutely key to sustainability.

Secondly, in my judgment, the public in general are confused and have no understanding of what they should do about making their contribution to net zero with the condition of their property. Some of us had a good briefing on that situation from the building society movement today. We must address this. But the principle is here, and I thank my noble friend on the Front Bench for how it has come forward.

I declare an interest as a trustee of the Parliamentary Contributory Pension Fund. Noble colleagues will not be members of it unless they have been in the other place or are ministerial colleagues. Nevertheless, I can assure anybody who knows anything about that particular area that, in my judgment, our fund—given the care and attention paid by its chairman and the members in terms of the time put in freely and the trouble that is taken to ensure that we listen to asset managers, question asset management and challenge the advisers we have—is aware of government policy, whatever it may be. Yes, we welcome guidance and particular in- depth information. But—and this is a very big “but” in capital letters—our primary duty is to the membership and the beneficiaries, and we must never forget that. We are not there to take risks, unless we really have to take them, and we debate these issues.

All I will say in relation to the forestry dimension is that I do not welcome that particular one more than any other. I want concrete material that is of benefit to those who are the beneficiaries. With that, I do not think that I need to say any more.

19:00

[Lord Davies of Brixton (Lab)]

My Lords, I support the amendments in this group, particularly Amendment 93. It is always a pleasure to follow my noble friend Baroness Drake, who has said it all. I will join on the back of her comments to say that I strongly support the approach she has taken.

I also support Amendment 113 from the noble Baroness, Lady Hayman. I respect the extent to which some concerns have been taken into account to make it clear that the interests of the members are paramount in the amendment—that is crucial. On the idea that pension funds should have a more active role in growing our economy, obviously its time has come. It is not new—people have been making suggestions about it; I have been involved in it in the past—but there now seems to be a confluence of views that something must be done. However, it has to be done in a way that respects the fiduciary duty to put the interests of members front and centre in the decisions that are taken. I take a fairly broad view of what constitutes members’ interests, but it is the members and their trustees acting on their behalf who have to take that decision, rather than bodies which do not have the direct results inflicted on them if they get it wrong.

It is important to stress that any ideas have to be practical and effective. I have some doubt as to whether the problem we face is about the supply of money; rather, it is about how the money will be used. Putting these proposals forward without having the other side of the bargain improved will be a problem. It is also important to stress that there are very different types of schemes, and they all have different investment needs. Again, whatever guidance is given has to respect the particular types of schemes.

I have one concern, which I would like the Minister to address, about the phrase “have regard to” in relation to guidance. It appears in the government amendment and in Amendment 113 put forward and supported by my noble colleagues. The problem with the “have regard to” is that it is a legal lottery. It is very difficult to know in advance what exactly it means, so it would be very helpful to me, and I hope the House, if the Minister could say something about that. Is it, as is sometimes suggested, like the accounting requirement—you comply or explain—or do you have to, in some way or another, follow the requirements as they are set out? What does “have regard to” mean in this legislation? It would be good to have clarification during the progress of the Bill, because the phrase appears several times.

[Baroness Altmann (Con)]

My Lords, I congratulate my noble friend the Minister on her Amendment 4. I am sure that it is very well-intentioned, and it meets some of the concerns that were clearly expressed in Committee. I welcome the update that will be coming from her on the green taxonomy; I believe that there will be a consultation on that. There is also the new green finance strategy, which has been published. They are all welcome.

Amendment 4 is welcome, but, as the noble Baroness, Lady Hayman, explained, although it will ensure that the Treasury produces guidance or requirements for sustainable investing by pension schemes and others, it would appear that the FCA and the PRA may not have the powers to issue that guidance. So, once the Treasury has produced its recommendations, we will still need to legislate. Can my noble friend the Minister confirm that that is the case, and that we will need further legislation if we want to implement the impacts of Amendment 4 through to pension schemes?

I have added my name to Amendments 93 and 113 in the name of the noble Baroness, Lady Hayman. Amendment 93 deals with the investment duties of pension providers and investment managers, and Amendment 113 deals with the investment duties of occupational pension trustees and managers. Clearly, if we are to make progress in line with the Government’s laudable objectives—and I congratulate them on all the work they have been doing, including some of their world-leading work on trying to ensure that pension schemes invest more in line with green objectives and sustainable investments for the long term—the amendments will ensure that the FCA and the PRA can make those rules. The amendments are very reasonably drafted; the FCA and the PRA may make these rules, but they do not require them at this stage to do so. The trustees and investment managers must then have regard to the rules, but, as the noble Baroness explained, they can explain why they are not going to implement the rules. However, at least we can set up a system where the trillions of pounds of long-term investment money in pension schemes can assuredly do more to protect the planet and provide investment opportunities that will help with social objectives for this country.

I do not have a problem with the concept of government directing pension schemes to invest a certain proportion of their assets, if necessary, in green, sustainable and socially desirable projects, including infrastructure, forestation, nature preservation and so on. At least 25% of all pension schemes—we are talking about hundreds of billions of pounds—has come from the taxpayer in the first place in the form of tax relief. Given that 25% of everyone’s pension is tax free, that is money that was spent by taxpayers. Given the budget circumstances that the country faces, and as taxpayers would otherwise be funding these projects outside pension schemes, I do not think that it is impossible to justify the idea that, should the private sector not be forthcoming with its investments in these vital elements for future growth and for a sustainable future for us all, the Government might themselves decide to require it.

These amendments will at least pave the way to ensure that there is more chance of these huge amounts of money, which are put aside for millions of people’s retirement income later in life, being invested in a way that will benefit them and the economy, as well as ensuring that there is much more and better protection for the planet, which I know that the Government wish to achieve. So I support Amendments 93 and 113, and I have added my name to Amendment 114, so excellently explained by the noble Baroness, Lady Wheatcroft, again facilitating rules that it will be necessary for schemes to follow, should the Government desire that—which is the indication that I have had from my noble friend the Minister and which is implied in the Government’s Amendment 4.

[Baroness Meacher (CB)]

My Lords, I shall speak to Amendment 91—this is a somewhat variegated group. The amendment was very ably introduced by the noble Baroness, Lady Boycott, and I am privileged to be asked to speak to it—it has widespread support across the political parties and within the public, as well as from key figures such as Sir Ian Cheshire and financial institutions representing no less than £1.18 trillion in assets under management and advice.

The UK is in the invidious position of being a leading financier of global deforestation and linked human rights abuses. This country provided an estimated $16.6 billion to businesses implicated in deforestation over five years to 2020. How many of us have money in pension funds contributing to the £300 billion of UK pension fund money supporting high deforestation risk companies and financial institutions? The Government claim that the answer to this problem—if you like—is the Taskforce on Nature-Related Financial Disclosures. However, the Government’s own expert Global Resource Initiative task force has already explicitly rejected the TNFD’s disclosure-based model as a solution. It has told the Government that new due diligence laws are needed to stop UK finance flowing to deforestation —and that is precisely what this amendment does.

I am aware of the noble Lord, Lord Field’s rather wonderful Cool Earth charity, which finances indigenous tribes in the great forests to retain the trees and live within them. Amendment 91 is vital to prevent all Cool Earth’s good work being undermined by UK financial institutions investing in high deforestation risk companies. The UK led the Glasgow leaders’ declaration on forests and land use at COP 26, making a commitment to halt and reverse deforestation and land degradation by 2030, including by realigning financial flows. This amendment begins to meet that commitment; surely, this should not be neglected. My only regret is that the amendment allows for a 24-month delay before due diligence obligations come into force to allow the sector to prepare—and, of course, I understand that sectors need to prepare. But this issue has been debated in Parliament for some months. I wonder how far the sector has reached in its preparations and whether it would support a reduced delay. How does such a delay fit with the view of experts that commodity-driven deforestation must end by 2025 at the latest to limit global warming to 1.5 degrees centigrade? A 24-month delay takes us right into 2025. I understand that agricultural expansion drives more than 90% of tropical deforestation. Again, the amendment is business friendly and widely supported, and I hope that the Government will support it and accept it.

[Lord Vaux of Harrowden (CB)]

My Lords, I have added my name to Amendment 15, tabbed by the noble Baroness, Lady Hayman. It aims to ensure that the conservation and enhancement of the natural environment are included in the regulatory principles of the regulators. Like the noble Baroness, I would have preferred another secondary—what is the word?

[Baroness Northover (LD)]

Objective.

19:15

[Lord Vaux of Harrowden (CB)]

Yes, objective, thank you. But we are where we are.

The noble Baroness has already explained this with her usual skill, so I shall not repeat what she has said. However, I am sure that I am not alone in experiencing a feeling of déjà vu in even having a debate on this subject. The noble Baroness, Lady Hayman, has given similar excellent speeches on multiple occasions now— I am really quite amazed by her patience. All this amendment tries to do is ensure that government policy is embedded in the activities of the regulators, yet we seem to have the same debate on so many Bills. Each time, generally, the Government give way—and rightly so. I think that the most recent occasion might have been on the UK Infrastructure Bank Act. Frankly, if it makes sense to accept this for that bank, how much more sense does it make to accept it in respect of the entire financial services industry? Surely, it is time that all Bills to which the impacts of environmental change and risk are relevant should include these clauses by default. It really should not be up to this House to ensure that the Government apply their own policies. So I hope that the Minister will follow the multiple precedents and accept Amendment 15.

The Minister introduced Amendment 4 on SDRs, which is extremely welcome, but it is only a “may prepare” clause, not an obligation, and there is no timeframe included. Frankly, it could have gone an awful lot further.

I add my support to Amendment 91, which seeks to introduce a new due diligence requirement for regulated persons to ensure that the forest risk activities that they wish to finance or otherwise support are in compliance with local laws. I am sure that the Minister will refer to creating undue burdens on regulated persons, which seems to be the usual argument in these things—but the amendment leaves the level of required due diligence for the Government to decide and regulate, so I am not going to be terribly impressed by that argument. To put it simply, our financial services industry should not be financing illegal deforestation activities.

I also strongly support Amendments 93 and 113, which seek to ensure that the impacts on climate, nature and society are properly considered by occupational pension scheme trustees, and that the FCA may publish guidance in that respect. Noble Lords with much more experience in this area than myself have spoken to that at length. Pension funds are by their nature long-term investments and systemic in size, so it is especially important that these issues of sustainability are considered fully by pension schemes. I hope, perhaps forlornly, that the Minister will look favourably on these amendments, but particularly on Amendment 15, which seems self-evident to me.

[Baroness Northover (LD)]

There have been a number of powerful contributions in this group. I add my voice as a signatory to Amendment 114. My noble friend Lady Sheehan will speak to others in this group, which we also support from these Benches.

The noble Baroness, Lady Wheatcroft, very ably made the case for Amendment 114, which seeks to give the powers to Ministers and regulators to legislate for sustainability disclosure requirements along the whole length of the investment chain. As she indicated, although we obviously welcome the fact that the Minister has brought forward Amendment 4, this simply does not match up to what needs to be done and what the Government, as others have said, say that they wish to do. We know that some change is already being driven—for example by the disclosures that are now required under the task force on climate-related disclosures. We know that the International Sustainability Standards Board continues its important work, with the involvement of Mark Carney, and we hope that the Government will adopt its recommendations—they are currently equivocal about that.

We urgently need the guardrails that Chris Skidmore recommended were required to reach net zero by 2050. The Government have made repeated commitments, as we have heard, to legislate for sustainability disclosure requirements and in these other areas to which noble Lords have referred. Amendment 114 and all the others help to deliver what the Government say that they wish to do. The noble Baroness, Lady Hayman, beautifully outlined how the other amendments also help to deliver for the Government on what they say that they wish to do. Therefore, I support this amendment and the others.

[Baroness Young of Old Scone (Lab)]

My Lords, I support Amendment 15 in the name of the noble Baroness, Lady Hayman, who introduced it very powerfully. I want to talk to the House about the real relationship between nature conservation and climate change and the need to bring those together in the regulatory process. Nature restoration is essential for our reaching of net zero—we cannot do net zero without restoring nature; I think that is globally accepted now—but nature restoration is important to economic prosperity in several other ways. More than half of global GDP is considered moderately or highly dependent on natural assets and half the world’s population is completely dependent on biodiversity for their livelihoods. That means that biodiversity is as important as climate change.

Biodiversity is also highly material in assessing risk, including financial and economic risk, and it is pretty clear that if biodiversity is going down the tubes, so is the economy and, indeed, so are we. So, it is a bit of a no-brainer, in my view, that financial services regulators should have, as a regulatory principle, net zero and nature recovery together: the two are absolutely indissolubly linked. I hope the Minister will not say that the provisions that are in the Bill for net zero will act as a proxy for biodiversity restoration. It does not work that way: net zero is a necessary condition but not a sufficient condition for biodiversity recovery.

The noble Baroness, Lady Hayman, threatened the House with simply reading out all the commitments that have already been made that are encapsulated in her Amendment 15. I want to add another one that no one has mentioned so far. The Environmental Audit Committee, in its report on biodiversity in June 2021, highlighted the fact that, although some progress had been made in transforming the financial system to reflect the pressures of climate change, the whole accompanying handshake with biodiversity was way down the line and much slower and needed to accelerate. It called on the Government to play a part in creating a narrative that there is a lot of international commitment to biodiversity recovery linked with climate change that we are going to have to respond to in this country, because we have signed up to it globally, and that it is therefore important to get the financial services industry and its regulation up to speed soon in order to cope with that global pressure. The noble Baroness’s Amendment 15 would do that and, more importantly, it would secure this through a legislative approach and not be overly reliant on voluntary action.

Without delaying the House any longer, I also support Amendment 91 on deforestation. I will not repeat what the noble Baroness, Lady Boycott, said, but it was the bee’s knees. I end with a note of distress at the comments made by the noble Lords, Lord Davies and Lord Naseby, about pension scheme investments and investors and pension committees and pension advisers’ responsibility and duty to pensioners. I declare an interest, having set up the Environment Agency pension scheme some 25 years ago to be, at that stage, the only really green pension scheme and now probably the foremost green pension scheme in the world.

Let us not be in any doubt: there is not a dichotomy about responsibility to pensioners and taking action on climate change and biodiversity. They are absolutely one and the same thing. If climate change and biodiversity decline continue, there will be irreparable harm to the economics that pensioners and pension schemes depend on. Let us not be in any doubt about that: pension scheme trustees and their advisers—and I hope, if the Minister will accept Amendment 15, their regulators—have a responsibility towards climate change and biodiversity recovery, because it is absolutely in the economic interests of their beneficiaries.

[Baroness Bennett of Manor Castle (GP)]

My Lords, I rise very briefly to express Green support for the non- government amendments in this group and acknowledge the way in which the weakness of the government amendment has already been acknowledged. Noble Lords will note that the explicitly environmental amendments, from Amendment 15 onwards, do not have a Green name on them. I am delighted about that because there was not space for one, because the amendments have cross-party support from right across the House, which really shows how far we have come in these debates.

I shall make four brief points, because I am very aware of the time. They are building on the points just made by the noble Baroness, Lady Young, and reflecting on an article published last week in Nature, which demonstrated that in seven of eight key measures, including climate, biodiversity and water, we are outside the safe and just operating space of this planet. We are absolutely at crisis point and I pick up the point made by the noble Baroness, Lady Hayman, that we cannot afford to wait. We cannot wait for the next Bill, the Bill after that and the Bill after that. I very much agree with the point just made by the noble Lord, Lord Vaux, that the country should not have to wait for the House of Lords to insert these things into Bills; they should be there in government Bills as a matter of absolute, basic course.

I have a particular point about Amendments 93 and 113, which strengthen the fiduciary duty of pension funds to ensure investors consider the impact of their investments on environment and society. The case has already been made that there is no finance on a dead planet and there are no pensions on a dead planet, but the society element also deserves to be noted. We have had a huge amount of discussion of the problem of the large number of people of apparently working age who are not engaged in our labour force at the moment, and the public health crisis that is associated with that. It is the kind of thing that Green councillors have been going on about, as members of governing boards of pension funds for years: such things as tobacco and the kinds of food products that are being supported are all issues that have an impact on pension returns.

On deforestation, the noble Baronesses, Lady Meacher and Lady Boycott, among others, have already made points about this, but there is £300 billion of UK pension money in high deforestation risk companies and financial institutions—that is a figure from Make My Money Matter. Again, there is a point about risk. The financial sector in the UK faces up to £200 billion of risk in Brazilian beef and soya and Indonesian palm oil supplies alone.

Finally, there is another risk in terms of our international reputation. We are of course enthusiastic signatories of the global biodiversity framework, which promises, under target 14, that the UK will align

“all relevant public and private activities, [fiscal] and financial flows with the goals and targets of this framework”.

How could the Government not be accepting all the amendments in this group?

[The Earl of Caithness (Con)]

My Lords, I have my name to Amendment 15, so ably introduced by the noble Baroness, Lady Hayman. I thank her for her very clear exposition of it and I thank the noble Baroness, Lady Young, for her little additions just to fill in some of the other parts of this important subject. I thank the Minister for her time yesterday when I came to discuss this amendment with her: it makes a lot of difference that a Minister is so receptive to a discussion, even though we did not part any closer than when I walked through the door.

I congratulate the Government on their world-leading position on green finance. That is a nice position to be in, but we need to work very hard on that if we are to retain it.

19:30

To me, it is absolutely logical that nature should be added into the Bill in the way proposed in Amendment 15. As has been said, nature underpins the whole financial system. Without nature, it is not going to work—and it has suffered because we have not given nature the economic value and attention it needs. Nature restoration is crucial to reaching net zero.

We can talk about climate change and net zero, but we must not believe that solutions to climate change always benefit nature—they do not. I give your Lordships the example of biomass and what was set out as a very good idea by Drax to move on to biomass. It has now been proven that it is not working as well as we had all hoped and that there has been degradation of nature. One can take the view that it does not affect the UK, because all the timber is imported, but it is causing a loss overseas. That links very well to Amendment 91 in the name of the noble Baroness, Lady Boycott, which I support.

Most of what I wanted to say has already been said, so there is no need to repeat it. It is strange how often we hear the Government make all sorts of encouraging statements, but when it comes to putting them in the Bill they are reluctant to do so. There is an old adage: if it is not on the face of the Bill, it will not be implemented in the proper way. That is why Amendment 15 is important.

[Lord Randall of Uxbridge (Con)]

My Lords, I strongly support Amendment 15, so ably introduced and supported by others. I will speak principally to Amendment 91, to which I added my name. I tabled a similar amendment in Committee, but unfortunately ill health prevented me speaking then. I was grateful to the noble Baroness, Lady Boycott, for taking over the reins then and I am very happy to support her now.

I support the Government’s amendment in as far as it goes. As we have heard, the Government have made a lot of strides in this area through public finance commitments. Only last month the Prime Minister met with the President of Brazil, pledging £80 million to the Amazon Fund to help stop deforestation. There is more money coming through; at least £3 billion of our international climate finance is devoted to nature protection and restoration.

The question we must ask ourselves is: are we turning a blind eye to the private finance undoing all this good? Preventing private finance doing harm is just as important as the aid we provide. As we have heard, the Government have endorsed this conclusion by pioneering the Glasgow declaration on forests and land use, which includes a commitment to:

“Facilitate the alignment of financial flows with international goals to reverse forest loss and degradation”.


Now is the very time to make good on this pledge and get our own house in order.

This is a sensible proposal rooted in Schedule 17 to the Environment Act and limited to illegal deforestation for that very reason. The amendment itself has been publicly endorsed, as we have heard, by Sir Ian Cheshire, as well as financial institutions representing more than £1 trillion in assets under management and advice, including Rathbone Greenbank Investments, Federated Hermes Ltd and the Local Government Pension Scheme Central Ltd—so it is not just the usual suspects.

At the G7 last month, the UK committed to take steps to redirect finance away from activities causing biodiversity loss “without delay”. I am very grateful to the Minister. As we heard from my noble friend Lord Caithness, she has bent over backwards to try to help and is committed to this. She has not quite convinced me that the Government should not accept this sensible amendment. I hope that it will be accepted and that the Government will follow through here. As I have got older, I may have got mellower but I have got more impatient. I am fed up with hearing every time that it will be in the next Bill.

[Baroness Sheehan (LD)]

My Lords, I rise on behalf of our Benches in support of these amendments. In doing so, I declare my interest as a director of Peers for the Planet.

Before I move on to the bulk of the amendments in this group, I will address government Amendment 4. I agree with noble Lords across the House who have welcomed it but feel that it is deflective and a little weak. The policy statements required from the Treasury may be followed by the regulators, but it just does not go far enough. It certainly does not fulfil the spirit of Amendment 114 on SDRs, spoken to so ably by the noble Baroness, Lady Wheatcroft.

In the briefings I have received on this Bill to make provision about the regulation of financial services and markets, it struck me that the phrase “systemic risk” appears frequently. According to the Systemic Risk Centre, part of the London School of Economics and Political Science:

“Systemic risk refers to the risk of a breakdown of an entire system rather than simply the failure of individual parts. In a financial context, it captures the risk of a cascading failure in the financial sector, caused by interlinkages within the financial system, resulting in a severe economic downturn”.


I think we all recognise that scenario.

Therefore, the amendments in this group all aim to strengthen the Government’s hand either by aiming for better governance in financial services and markets or by pre-empting disastrous practices as financial services and markets transform and orientate towards a future that encompasses our net-zero ambitions. Deep change of this nature is a risky undertaking for the sector that the Government can act to mitigate. Indeed, the Government can act to enforce their own policy statements, as so many noble Lords across the Chamber have already mentioned.

I will briefly address the amendments to which I have added my name. Amendment 7 addresses an essential element of openness and transparency and would require the FCA to make rules to mandate fund managers and insurers to give information to clients and beneficiaries on the exercise of all voting rights on their behalf by appointed investment managers. The noble Baroness, Lady Wheatcroft, in whose name the amendment appears, has already given us chapter and verse on why this would be a sensible move by the Government. Currently, it is difficult for underlying fund managers and insurers to access information about how voting rights in investee companies are being exercised on their behalf in a consistent and comparable format. I will give just two examples and, I hope, not repeat too much of what the noble Baroness, Lady Wheatcroft, has already said. This is very important.

Reporting is currently voluntary and contained in a single dense report across the whole of the fund manager or insurer’s operations. That is problematic, because in practice it means that pension funds will find it difficult or impossible to identify whether their pension fund is invested in that share. They cannot get at the information they need. That is one shortcoming; the other is that the reporting is non-standardised. Many investment managers disclose votes in a non-standardised way in long PDF reports—sometimes up to 10,000 pages—which makes it extremely difficult for pension funds to extract the data they need out of it.

The aim of Amendment 7 is to rectify these shortcomings and others that have already been mentioned, and requires the FCA to make rules requiring information on the exercise of voting rights to be disclosed on request and in a standard format. The US Securities and Exchange Commission has a regularly updated standard reporting template which managers must follow. The FCA should achieve parity with the USA on voter reporting and enable consistent and comprehensive vote disclosure. Voting at AGMs is a key tool in ensuring good corporate governance, good long-term investor returns and good economic outcomes more broadly, and is key to government realising its policy ambitions, not least its net-zero ambitions. Indeed, HMT has publicly acknowledged that good voting and good vote reporting are crucial to meeting net zero. Finally, as the Aldersgate Group identifies in its 2022 report, it is critical that financial institutions engage with systemic risks via stewardship—such as exercising voting rights—rather than managing portfolios by divesting from high-carbon assets.

Amendment 15, which adds nature to the new regulatory principle on net-zero emissions, is in the name of the noble Baroness, Lady Hayman, and was spoken to ably by her. We have only to gaze and wonder at the efficiency of bees and other pollinators in their role in providing us with good food. Various estimates have put a figure verging on £1 billion to pollinators’ contribution to the UK economy in terms of worth of crops they produce. However, if one inputs human labour in their stead, we know that their value is far greater than that.

The Government’s own green finance strategy, published just a few weeks ago, stated:

“Nature sustains economies and livelihoods, and protecting and restoring nature is inseparable from addressing climate change”,


which completely echoes what the noble Baroness, Lady Young of Old Scone, said. The funny thing is that those are the Government’s own words, so why do the Government balk at this amendment? In their response to the seminal Dasgupta review, The Economics of Biodiversity, which has already been mentioned, the Government committed to delivering a nature-positive future by reversing nature loss, and to

“leave the environment in a better state than we found it”.

This amendment is urgently needed. Current investments are working against nature and driving nature’s depletion. We have heard these figures before but they are worth reiterating. In 2019, financial institutions provided $2.6 trillion in loans and underwriting services to sectors identified as primary drivers of biodiversity loss and ecosystem disruption. Globally, Governments spend $500 billion per year that is potentially harmful to biodiversity.

Nature loss can be massively detrimental to investments and must be considered in assessing risks. I will give a couple of examples. First, shareholders lost billions when the European pharmaceutical company Bayer lost near 40% of its market capitalisation in less than a year after acquiring an agrochemical company accused of adversely affecting honeybee populations. Secondly, company shares in the Canadian gold-mining company Infinito Gold fell 50% when in 2012 the Costa Rican Government denied permission to develop a mine due to potential impacts on forests and endangered species.

In conclusion, we need investment in nature restoration to be commensurate with investment in net zero—here I disagree a little with what the noble Earl, Lord Caithness, said. In having similar amounts and similar resources deployed on net zero and climate change, we are able to protect our natural capital, which we must do if we are to meet our net-zero targets. Nature and climate change are two sides of the same coin. I hope that when the time comes, noble Lords will give this worthy amendment their full support, as we will from these Benches.

19:45

I have added my name to Amendment 91. The noble Baroness, Lady Boycott, moved it so comprehensively that I need to say very little other than to add my support to it. I will just say that the Treasury’s Greening Finance road map claims that financial actors should factor climate change into “every investment decision”. However, this is currently not the case when it comes to deforestation.

I will cite one example. In June 2022 Global Witness, a relatively small NGO, published an analysis showing that HSBC and Barclays have continued to provide billions to Brazilian meat giant JBS in spite of widespread and credible allegations of the company’s involvement in illegal deforestation, land grabs and human rights abuses. The UK financial sector faces up to £200 billion in risk exposure to Brazilian beef and soy, and Indonesian palm oil supply chains alone, according to the WWF. There I echo the words of the noble Baroness, Lady Bennett. It is shocking that financial institutions are not required to conduct any due diligence to find out whether their dealings are leading to illegal deforestation, even when their clients have been implicated in many public cases before.

Due diligence is not that hard to carry out. Sources are not limited to what is available in the public domain. Financial institutions can request supplementary data from their existing and potential clients to inform their due diligence. For example, they can ask the extent to which a supply chain is fully traceable, how many deforestation incidents that client detects per year, and whether they can demonstrate if they obtained the consent of indigenous peoples to operate on protected lands, among many other such questions. There are so many tools available to companies these days.

[The Lord Privy Seal (Lord True) (Con)]

This has been a 13-minute speech on Report—

[Baroness Sheehan (LD)]

I am just about to conclude.

Global Witness, for example, recently launched a “Brazil Big Beef Watch” Twitter bot to show how simple and effective supply-chain traceability can be. Therefore, due diligence requirements are not an onerous ask and are long overdue. It is deplorable that indigenous people are on the front line in defending against deforestation. Some 40 people per week are killed in the process. This must stop. I think I speak for our Benches when I say that should the noble Baroness, Lady Boycott, seek the opinion of the House on her amendment—we hope that she will—we will give it our wholehearted support.

Amendments 93 and 113 on fiduciary duty have been covered extensively by the noble Baronesses, Lady Hayman and Lady Drake, and by other noble Lords across the House, so I need say very little other than that we are in full support of them.

[Lord Livermore (Lab)]

My Lords, this has been a fascinating if somewhat disheartening debate, and I have learned much listening to the contributions from noble Lords on all sides of the House.

We welcome the tabling of government Amendment 4, which brings forward new provisions relating to sustainability disclosure requirements, but we agree with the views expressed across the House, particularly as set out by the noble Baroness, Lady Hayman, arguing that the Bill simply does not go far enough in supporting the country’s green ambitions.

We support many of the amendments in principle but particularly Amendment 15 in the name of the noble Baroness, Lady Hayman, and Amendment 91 in the name of the noble Baroness, Lady Boycott, the latter having been signed by my noble friend Lady Chapman.

The financial services sector touches many more aspects of our lives then we may sometimes realise, with firms’ investment decisions having a direct impact on virtually all sectors of the economy. This activity can, and often does, do much that is good. For example, if we are to secure the green jobs of the future, businesses will need investment. But, as we see in some cases, such as investment activity that leads to deforestation, there can be severe negative environmental impacts. In a recent poll cited by Global Witness, 77% of UK savers said they would be unhappy to discover that their pension was funding deforestation and habitat loss, with 14 million people estimated to switch pension provider if they made such a discovery. However, as Amendment 7 highlights, there is currently no way for the public, nor indeed the Government, to tell if their money is invested in that way, and therefore no way for consumers to exercise choice. That surely cannot be right.

Amendment 91 would implement recommendations from the Government’s own Global Resource Initiative taskforce in relation to deforestation, a practice which causes significant harm to global climate ambitions, as well as to indigenous peoples who are evicted from their ancestral homes. We are told by the Government that they are serious about achieving net zero and protecting nature, yet, at present, the net-zero regulatory principle still fails to mention nature, which is what Amendment 15 would correct. Indeed, nature is not even mentioned in the Bill. As the WWF rightly points out, by excluding nature from this key financial services legislation, the UK will fail to secure opportunities that could make the UK a leading green finance centre, while exposing the country to nature-related risks.

We should also give serious weight to the intervention of Professor Sir Partha Dasgupta, who led the Government’s review of the economics of biodiversity, when he urges the Government to support the amendment. He says:

“We need to empower those in charge of regulating our financial system to support the sector to arrive at a nature-positive destination by recognising the value of natural capital and the significant social and economic benefits restoring nature presents”.


We are losing nature at an alarming rate, and these issues are only going to become more urgent. We have missed opportunities to act in the past, and we cannot continue to make the same mistakes. We therefore urge the Government to think again on these important areas, but if they are not willing to do so, we will support the noble Baronesses, Lady Hayman and Lady Boycott, should they choose to push their amendments to a vote.

[Baroness Penn (Con)]

My Lords, let me first take Amendment 15, from the noble Baroness, Lady Hayman. I reassure noble Lords that the regulators already consider issues related to sustainability, and specifically nature, as part of their work under their existing objectives. For example, the Government and the regulators are active participants in the work of the Taskforce on Nature-related Financial Disclosure, which we have heard about, which helps organisations to report and act on evolving nature-related risks; and the Bank of England is a key member of the Network for Greening the Financial System, which recently launched a task force on nature-related risks.

The noble Baroness listed the work that is happening and the various commitments, and I interpret that to mean that the lack of the reference to nature in the framework does not equal a lack of action by either the Government or the regulators. I understand the desire of noble Lords to see that reflected in the framework in the Bill. However, further work needs to take place to better understand the interaction between nature targets and the work of the financial services regulators when including it in regulation, and the conclusions of that work are not yet clear. Moreover, equivalent targets to those in the Environment Act for England and Wales in 2021 do not yet exist in the other devolved Administrations, so we remain of the view that it would not be appropriate to place a requirement within the FSMA regulatory principles without the clarity I spoke about, or to impose requirements that link to targets that do not yet exist; so unfortunately, the Government are unable to support the amendment.

Turning to Amendment 91 in the name of the noble Baroness, Lady Boycott, the Government are committed to working with UK financial institutions to further tackle deforestation-linked finance. As set out in the updated green finance strategy, we will begin this work with a series of government-convened round tables this year, and I am keen to work with noble Lords on this process.

As we discussed in Committee, the amendment we are considering today would involve imposing requirements on all regulated financial services firms, obliging them to undertake due diligence on practically all their client firms and their clients’ supply chains. In practice, this would amount to UK banks being required to check most of the world’s major companies and their supply chains for links to illegal deforestation, and stopping any finance to them until those companies can provide the data needed to do so. This is while the rest of the world’s banks carry on financing this activity with no global standard on deforestation in place.

Global due diligence is not something that can be legislated for by Parliament and the UK financial sector alone. In fact, trying to do so may make this problem harder to solve. Imposing this data requirement on UK financial firms alone where such data is lacking globally could lead to one of two things: firms trying to satisfy the requirement but failing due to a lack of data, leading to misreporting and misallocations of capital; or keeping that business outside the UK, with no chance of securing the type of environmental change we want and that is the aim of the amendment.

The Government therefore want to find a workable solution, and we are pursuing a number of different lines of action to do so, in addition to the commitment we made to work with UK financial institutions in the green finance strategy. First, we are directly addressing deforestation in situ by our partnerships approach. The Government launched the forest and climate leaders’ partnership at COP 27, and also fund the partnership for forests, which has channelled more than £1 billion of private investment into forests and sustainable land use, and brought more than 4 million hectares of critical landscapes under sustainable land use.

Secondly, the Government are working to address due diligence for illegal deforestation using the Environment Act. The most relevant UK businesses that use forest-risk commodities or products derived from them will be required to ensure those products are produced in compliance with relevant local laws. Thirdly, the Government are supporting the development of a coherent international approach on disclosure and management of nature-related risks and impact.

Since our debate in Committee, the Taskforce on Nature-related Financial Disclosure has published its latest draft framework. This now includes recommended metrics and associated governance strategies for businesses to understand and mitigate deforestation in areas of direct or indirect operational control. We committed in the green finance strategy to explore how the final TNFD framework should be incorporated into UK policy and legislative architecture, and we will start this work later this year, once the final framework is published.

I personally made the case to the International Sustainability Standards Board, while at COP 15 in Montreal, that such standards should be considered for integration into its work. If that happens, global standards are genuinely within reach. I acknowledge that TNFD or any subsequent global standards do not prohibit the financing of deforestation in itself but, as a disclosure framework, it is the bedrock for action, both by incentivising firms to take action on the risks that they identify and allowing the Government to consider taking further regulatory action after the establishment of such a disclosure framework. I hope, therefore, that I have explained why the Government cannot accept the amendments, but have also demonstrated that effective action is under way to address noble Lords’ concerns in these areas.

Turning to Amendments 93 and 113, also from the noble Baroness, Lady Hayman, in the updated green finance strategy, the Government have already recognised that decisions about investing in the context of systemic risks such as climate change and biodiversity loss are complicated, in particular for pension funds. The Law Commission’s 2014 report suggested that fiduciary duties mean that non-financial factors can be considered as part of investment decisions if trustees have good reasons to think their members share their concerns and if such decisions do not involve a risk of significant financial detriment to the fund.

However, the Government recognise that trustees would like further information and clarity on their fiduciary duties in the context of the transition to net zero, and that is why we are taking steps to ensure that such clarity is forthcoming. Later this year, DWP will examine how closely its stewardship guidance is being followed, including whether incorrect interpretations of fiduciary duties are playing a role in this area. The financial markets and law committee, which includes representatives from both DWP and the Treasury, is working to consider issues around fiduciary duties and sustainability and whether further action or clarity is needed.

20:00

The Government and regulators will hold a series of round tables with interested stakeholders to gather further information on what can be done to clarify fiduciary duties. This extensive programme of work will make clear to the Government and regulators whether and where further action may be required to ensure that trustees fully understand how they can take the transition to net zero into account while meeting their fiduciary and trustee duties. The Government are confident that they have appropriate vires to act on the outcomes of this extensive programme of work; at this time, we see no reason to take additional powers.

I turn to Amendment 7 from the noble Baroness, Lady Wheatcroft. We recognise that transparency is crucial to effective stewardship and corporate governance by pension funds. We also acknowledge the argument that the existing voting disclosure framework is not working as well as it could. That is why, in November, the FCA convened the independently chaired Vote Reporting Group, following the recommendations made by the Taskforce on Pension Scheme Voting Implementation to develop a standardised and decision-useful framework for voting disclosure.

That group is due to publish its first output soon. The Government believe that it would be more appropriate to wait for the group’s output before requiring the FCA to produce further rules and regulation. When reviewing the group’s output, the Government will carefully consider whether its recommendations go far enough to address existing issues of transparency, and what further action may be appropriate. We therefore believe that this amendment is premature.

Turning to Amendment 114, also from the noble Baroness, Lady Wheatcroft, I am grateful to noble Lords for highlighting the importance of the Government’s own sustainability disclosure requirements framework in fulfilling our goals for green finance in the UK. This is something we can all agree on. It is worth clarifying a number of points in relation to the regulators’ powers in this area. The noble Baroness is right that, previously, the Government have said that we need to bring forward primary legislation to implement SDR. The relevant departments and regulators would then set out sector-specific requirements through their usual rule-making powers.

Since then, the Government have considered this position further. We do not consider there to be any limitations on the implementation of SDR, as was set out in the green finance strategy. We have therefore adapted our approach in the light of that. To be absolutely clear, the FCA has sufficient powers for authorised financial services firms and listed companies to take forward SDR; indeed, it is already doing so, building on the work of the TCFD.

My noble friend Lady Altmann and others asked how the policy statement applies to pension schemes; there is also the question of how SDR can be applied to pension funds. The policy statement in the Government’s amendment applies only to the PRA. The FCA will be required to have regard to the Treasury policy statement; it will therefore apply to FCA-regulated pension schemes, such as personal pension schemes. DWP is responsible for occupational pension schemes and has the powers to take forward SDR in the areas set out in our green finance strategy. The Government can therefore directly ensure that their priorities are addressed in SDR requirements for occupational pension funds.

The noble Lord, Lord Davies, asked what “have regard” means in the context of the Government’s amendment. I can answer that. The “have regard” approach obliges the regulators to consider the Government’s policy goals in their rule-making and increases scrutiny of their efforts to do so while respecting the regulators’ independence, in line with the overall framework for financial regulation in the UK. In this respect, the aim of the amendment and the “have regard” approach is to ensure that the Government’s ambition and policy in relation to SDR are properly considered by the regulators when making rules. I hope that, when it comes to the powers to implement SDR, I can reassure noble Lords that, having reviewed this issue in the context of the policy commitments we made in our green finance strategy, we are assured that we have the powers we need to take this forward.

I want to end on the point about commitments versus action. This is an area where there is not just government commitment but government action. We were the first country to implement TCFD reporting across the economy. Not only that: we used our G7 presidency to get other countries to commit to doing so too. We have pushed for this to become an international standard. We expect that to come out this month. We have set out how we will assess that for adoption in the UK. Transition plans are already a requirement for FCA-regulated firms, and we have set out our commitment to taking that further for large companies in the real economy later this year. The FCA already has its consultation on SDR and labelling out, so action is already under way. Again, this demonstrates that the regulators have the powers they need to take forward policy in this area.

I will not detain the House any further. I beg to move government Amendment 4.

Amendment 4 agreed.

Schedule 5: Financial promotion: related amendments

Amendments 5 and 6

Moved by

[Baroness Penn]

5: Schedule 5, page 137, line 32, leave out sub-paragraphs (3) to (5) and insert—
“(3) For subsection (4) substitute—“(4) If either regulator—(a) proposes to vary a Part 4A permission or to impose or vary a requirement,(b) varies a Part 4A permission, or imposes or varies a requirement, with immediate effect,(c) proposes to vary a permission under section 55NA, or(d) varies permission under section 55NA with immediate effect,it must give A written notice.””Member’s explanatory statement
This amendment would align the wording of new section 55Y(4A), being inserted by paragraph 10 of Schedule 5 to the Bill, with section 55Y(4) of the Financial Services and Markets Act 2000, by replacing both those provisions with a new section 55Y(4) which clarifies in a single subsection the circumstances in which a written notice must be given to a person.

6: Schedule 5, page 138, line 8, leave out paragraph 13
Member’s explanatory statement
This amendment is consequential on the amendment at page 137, line 32.

Amendments 5 and 6 agreed.

Amendment 7 not moved.

Amendment 8

Moved by

[Lord Tyrie]

8: After Clause 23, insert the following new Clause—
“Regulatory Decisions Committee
(1) The FCA must establish and maintain a committee to be known as the Regulatory Decisions Committee (the RDC). (2) The purpose of the RDC will be to take contested enforcement decisions on behalf of the FCA.(3) The RDC must, in its decision-making function, be operationally independent of the FCA.(4) The chair of the RDC must be nominated by the Chancellor of the Exchequer, and such nomination only has effect if confirmed by the Treasury Select Committee in the House of Commons.(5) All other members of the RDC must be nominated by the FCA Board, and such nominations only have effect if approved by the chair.(6) Members’ appointment must be for a fixed term to be determined by the FCA, with such term to be no more than five years.(7) Members of the RDC may be appointed for up to two terms.(8) The FCA Board may remove a member of the RDC, but only in the event of that member's misconduct or incapacity.(9) All members of the RDC including its chairman and deputy chairs, must be operationally independent.(10) For the purpose of subsection (9), a person is not operationally independent if they are an employee of the FCA or any other UK financial regulator.(11) Other than those for purely administrative purposes, all interactions between the FCA and members of the RDC relating to any specific potential enforcement actions must be minuted and disclosed to any person potentially subject to that action.(12) The FCA must make available to the RDC sufficient resources, including legal advisers and support staff, to enable it to perform its function of determining fairly and expeditiously the matters which it is required to consider.(13) Such staff may be employees of the FCA but must be operationally independent of FCA staff involved in conducting investigations and presenting cases to the RDC.(14) The Chair of the RDC must, at least once per year, deliver a report to the FCA, His Majesty’s Treasury, and the Treasury Select Committee in the House of Commons. Such report must address at least—(a) the extent to which the RDC was able, in the period under review, to determine fairly and expeditiously the matters which it was required to consider,(b) the resourcing of the RDC, and the extent to which the resources available to it have been sufficient to enable it to perform its functions, and(c) the independence of the RDC, and in particular any circumstances or events where any impression of partiality, bias or undue access by the FCA to the RDC may have arisen.”

[Lord Tyrie (Non-Afl)]

I declare my interest as a consultant to DLA Piper, which helped me with drafting the amendment.

The need to provide the RDC with statutory autonomy was a recommendation of the Parliamentary Commission on Banking Standards, which I chaired in 2013. The purpose of my amendment is to give the FCA’s internal watchdog, the Regulatory Decisions Committee, greater independence by putting it on a statutory footing. I set out why this is necessary in Committee so I will not repeat all those arguments now but, in a nutshell, the benefit will be greater fairness for firms and individuals; it can be accomplished without compromising high-quality enforcement.

The case for this is pretty straightforward. The RDC was created to act as a check on what would otherwise be the FCA’s almost untrammelled power of enforcement. The RDC is the FCA’s in-house watchdog —a second pair of eyes—which can stop an enforcement action. In theory, firms could go to the Upper Tribunal, the equivalent of the High Court, but that is very costly and the fact that its proceedings are in public creates huge reputational risk for a firm or individual going there. For many of them, that can be terminal. So, the RDC is often the only practical safeguard they have against overly zealous enforcement by the FCA.

The problem for the RDC is that it does not have enough statutory authority to do the job as well as it should. At the moment, the RDC’s operational independence is wafer-thin. For a start, the RDC is subordinate to the FCA board. The board can and does decide what type of cases the RDC looks at, what resources are available to it and what procedures it should follow. The RDC also sits down the corridor from the enforcement team in the FCA. So it is small wonder that firms think it is much less than fully independent.

The price of the perception that the RDC is not fully independent is not just a sense of unfairness among some in the regulated community; it also carries a significant economic cost. It acts as a deterrent to activity and investment to many who do not want to take a risk of being on the wrong side of the enforcers. It is for these reasons, among others, that the Parliamentary Banking Commission, which I chaired, concluded that the RDC should be provided with statutory autonomy for its operations.

No doubt the Minister will have been briefed by the FCA, via her Treasury officials, that all these changes that I have set out are unnecessary—but they are necessary. The dangers that come with lack of independence have recently been vividly illustrated by the FCA board’s decision significantly to limit the scope of the RDC’s activities. There was very little public discussion. As of 2021, it no longer supervises the FCA’s decisions relating to a firm’s licensing, authorisations—the specific activities permitted under its licence—or an individual’s approval: that is, whether people are suitable for senior appointments under the senior managers’ regime. It also leaves firms and individuals unable to make oral representations in front of the RDC for many decisions that are crucial to their future. For many cases, those oral representations have now been closed down under the 2021 reforms.

So the narrowing of the remit will matter a lot, particularly for smaller firms. What is more, it will drive a coach and horses through the RDC’s already fragile independence and certainly through the perception of it. The fact that such a change could have been pushed through by the FCA board, after a consultation exercise which did not even support it, illustrates the need for much greater accountability and much better explanations from the regulator. Something was already needed in 2013 when we looked at this, to boost the RDC’s operational independence, but this 2021 reform shows that it is even more badly needed now. The modest amendment on the Marshalled List will entrench the RDC’s independence in statute. It will give the RDC the jurisdiction to challenge—publicly, if necessary —FCA board decisions that are relevant to its work, and it will create a direct statutory line of accountability to Parliament for everything it does.

Since 2013, I have scarcely heard any arguments against the banking commission’s proposal and, since I raised these issues in early March, I have been flooded with support from all sides of the financial services industry, and from a number of Peers and several former senior regulators. Two former Cabinet Secretaries have contacted me to tell me they strongly support it, as has the right reverend Primate the Archbishop of Canterbury. This is quite a large collection of varied support for a relatively small but sensible measure. They have done this, I think, because it has clear upsides, and neither they nor I can think of any downsides. It does not even carry an Exchequer cost.

I very much hope that the Minister will not be the last opponent standing when she stands up, but, if she is unpersuaded, I very much hope that she will at least agree to a consultation taking place on whether something should be done to boost the RDC’s independence, with an open mind on what should be needed. In that conciliatory frame of mind, I beg to move.

[Baroness Kramer (LD)]

My Lords, I had the privilege of adding my name to this amendment, and of serving with the noble Lord, Lord Tyrie, in his pre-Lordship days, when he chaired the Parliamentary Commission on Banking Standards. Like virtually everyone else who was on that committee and had spent two years taking evidence across the full range of issues that underpinned the crisis of 2008 and 2009, we were very surprised that the Government did not seize upon the recommendations for a body such as the RDC to have the kind of statutory independence that is described in this amendment. The amendment is extremely well drafted, as anybody reading it can recognise. It is not one of those where people say that the idea is good but there is a problem with the language. In this instance, there is not.

I have always thought that the regulator benefits as much as anybody else from oversight and challenge by an independent body with the requisite expertise. I also have the privilege of sitting in the Economic Affairs Committee. We have had discussions in the context of the independence of the Bank of England, but this has far broader implications. The problems of groupthink are becoming extraordinarily evident. Creating independence in a body such as the RDC is a mechanism for breaking down some of that groupthink. It is not because people are bad, incompetent or inadequate, but because, if there is not a process of challenge with sufficient gusto, groupthink begins to take hold. There begins to be a measure of complacency, people become less inclined to challenge and that benefits none of us.

I see no downside to the Government accepting this amendment. I hope that they take it extremely seriously and recognise that the quality of the language is here, meaning that they can run with this amendment as it sits, and that the regulator will benefit, the industry will benefit and individuals will benefit. There are very few occasions when one can look at a measure and say that this is true on all those fronts.

20:15

[Lord Forsyth of Drumlean (Con)]

My Lords, it is late, so I will not repeat the arguments which have been made by the noble Lord, Lord Tyrie, and the noble Baroness, Lady Kramer. The amendment seems to be a very sensible measure, and if my noble friend cannot accept it, the noble Lord suggested a compromise of at least consulting on this. However, I am not sure that many people would say that this was not a sensible proposal. The amendment has certainly been very carefully drafted. We are on Report, and I have some sympathy with my noble friend on the Front Bench being faced with this, but it merits very serious consideration and would be very much welcomed in the City.

[Lord Eatwell (Lab)]

My Lords, I apologise for missing the introduction from the noble Lord, Lord Tyrie; I was caught out by the Whips’ rearrangement of business. Fortunately, I read his pamphlet on this matter, so I have a good idea what he said.

[Lord Harlech (Con)]

My Lords, I am afraid that the noble Lord, Lord Eatwell, was not here for the opening comments from the noble Lord, Lord Tyrie.

[Lord Eatwell (Lab)]

I am probably the only Member of this House who has been a member of the Regulatory Decisions Committee and I might have some observations to make.

[Noble Lords]

Hear, hear!

[Lord Harlech (Con)]

Clearly, the House wants to hear the noble Lord’s remarks, so please continue.

[Lord Eatwell (Lab)]

If the Whips had not rearranged the business so peremptorily, one would not have been caught out.

[Lord Harlech (Con)]

The business has not been rearranged; the Order Paper says,

“at a convenient time after 7.30pm”.

[Lord Eatwell (Lab)]

My Lords, as a founding member of the Regulatory Decisions Committee of the Financial Services Authority who served from 2001 to 2006, I reflect on the fact that at that time the FSA took extraordinary care in preparing the documentation that was submitted to the RDC. This clearly had an effect on the way in which the RDC prepared itself. This is an important element in ensuring that our regulatory system is not only fair but seen to be fair. Having read with care the pamphlet from the noble Lord, Lord Tyrie, I support the arguments that he made there, which I am sure he recently repeated in the House.

[Baroness Altmann (Con)]

My Lords, I support all the work that the noble Lord, Lord Tyrie, has put into this amendment. He has worked for so many years and has so much knowledge on this subject. If my noble friend cannot accept the amendment today, I urge her to come back at Third Reading if possible, perhaps with the Government’s own proposals for at least a consultation, which would be a reasonable compromise. There is a strength of feeling on this issue.

As the noble Lord said, the FCA has already been clipping the RDC’s wings. We can see dangers and that there is huge support for proper independence on a statutory basis. We do not want the City to become an oligopoly; we need to protect some of these smaller firms for healthy competition. What is the Government’s objection to this proposal?

[Baroness Chapman of Darlington (Lab)]

My Lords, we commend the noble Lord, Lord Tyrie, on his amendment and on using it to raise important questions. We understand that concerns have been raised about the perceived watering down of the RDC’s role within the FCA. While we know that the Government respect the operational independence of the FCA, we hope that the Minister is able to say something about the regulator’s recent decisions on the RDC, which are causing substantial concern.

The FCA believes that the current balance of responsibilities is correct and that the recent reforms were necessary to ensure quicker decision-making. However, it would help if the Minister could outline what steps, if any, the Treasury might take in future, should it come to the view, if it has not today, that the system is not quite working in the way that it should.

[Baroness Penn (Con)]

My Lords, I am also grateful to the noble Lord, Lord Tyrie, for raising this important issue through Amendment 8. The Regulatory Decisions Committee, or RDC, takes contested enforcement decisions on behalf of the FCA where the FCA has not been able to settle a case with the relevant firm. The Government recognise that the RDC performs a critical function within the regulatory framework. FSMA requires that decision-makers are independent, and the design of the RDC reflects this.

It is important that the RDC makes decisions fairly and transparently. To ensure this, the members of the RDC are wholly independent of the FCA’s executive. The RDC also has its own team of support staff and legal advisers. This structure ensures that FCA personnel involved in the investigation of the enforcement case are not involved in supporting the RDC in its final decision-making.

As noble Lords noted, the FCA has recently made a number of operational changes to transfer decision-making responsibilities in certain cases from the RDC to the FCA executive, which will increase the speed of decision-making. However, decisions in contested enforcement cases continue to be made by the RDC.

In addition, should a firm or senior manager disagree with the final enforcement decision taken against them by the RDC, they generally have the right to refer the case to the Upper Tribunal. Where decisions fall to FCA executives, the relevant parties retain the right to make representations in writing. The FCA will also consider taking oral representations in exceptional circumstances, when not doing so would be detrimental to the fairness of decision-making. As set out above, the decisions made by FCA executives can also be referred to the Upper Tribunal should a firm disagree with them.

Any proposed legislative changes to the structure of the FCA’s supervision and enforcement framework should be subject to appropriate public consultation. As we have discussed previously during the passage of the Bill, the Government sought views from stakeholders on the operation of the future regulatory framework through a review. However, we concluded during that review that the case had not been made for changes to the FCA’s enforcement and supervision functions given that these responsibilities were not increasing as a result of the UK’s departure from the EU, unlike the significant increase in its rule-making responsibilities, which was the focus of the review and the subsequent enhancements made by the Bill.

Nevertheless, I am grateful to the noble Lord for bringing the importance of the FCA’s supervisory and enforcement framework to the Government’s attention. The Government do not see the need for legislative change in this area at this time. However, we support the noble Lord’s aim to ensure greater independent scrutiny of and accountability within the regulatory framework. The Economic Secretary and I will look at this issue further, outside the passage of this Bill, to ensure that the FCA’s supervisory and enforcement framework remains appropriate as it takes on new powers. We will continue to listen to the views of the noble Lord and other stakeholders as we do so.

I have also raised the issue with the FCA, and will pass on the response with further detail on the decisions and changes made to the operation of the RDC to this House. Therefore, I hope, for the reasons I have set out, that at this stage the noble Lord is content to withdraw his amendment and continue this conversation further outside the passage of the Bill.

[Lord Tyrie (Non-Afl)]

I would be grateful for an opportunity to respond to a few of the points made there. Before I say anything more, I should say I have discussed this amendment on a couple of occasions with the Minister. If she does not mind my saying so, she makes a first-rate fist of doing an impossible job. I also hope she does not mind my saying that from time to time—and this was one of them—I had the impression that people in other places are pulling a number of the strings. That does give me cause for concern.

I will just make a few brief points. The Government have set great store by the Edinburgh reforms. They are designed to bolster business confidence and investment, and make sure that regulation and the threat of enforcement do not end up damaging the UK’s pre-eminence in financial services, among other things. But if the Edinburgh reforms mean anything, they must mean that measures such as this—which would give businesses, particularly smaller businesses, greater confidence that they would be protected from arbitrary enforcement—should be seriously considered. I regret that they are being dismissed somewhat peremptorily.

The Minister said that oral representation is still possible before the RDC. I will not read out the FCA’s response to the consultation, to which I referred earlier, in full, but if she were to go back and look at it, she will see that it has been effectively closed down for all but exceptional cases. It is that opportunity to have a private conversation with the RDC that is so greatly valued—I see the noble Lord who served on the RDC is agreeing—on both sides: on the RDC side and by firms. The RDC dose a very difficult job and does it very well, but it needs more empowerment. I regret that the Government are getting in the way of that.

My last substantive point takes us right back to where we started. Frankly, we have not heard a substantive argument against this proposal from the Front Bench just now, for the simple reason, I think, that there are not any. We have heard the suggestion that firms can still go to the Upper Tribunal, but there was no response to the points made that the Upper Tribunal is not a practical option for a very large proportion of the regulated community, both on grounds of cost and on reputational risk grounds, because it is held in public. I find the arguments adduced for not doing it to be frankly incomprehensible.

The only real opponent of this left is the FCA itself. I would like to end just by drawing one conclusion from that point. It is very concerning that, when a regulator has a vested interest in an issue such as this, it can succeed in knocking down a sensible proposal with scarcely any explanation, and can persuade the Treasury that it should be knocked down and that the advice of that regulator should be taken without challenge. At that point, we are into a self-reinforcing spiral of ever more powerful regulation. That is exactly why, in so many different ways, Members on all sides of the House have come to the conclusion that we must have better accountability of the regulators, particularly the financial regulators, if we are to carry on handing them more powers, as is intended in the Bill.

Having said all that, seeing as I do not have the troops just now, I will withdraw my amendment.

Amendment 8 withdrawn.

20:28

Consideration on Report adjourned until not before 9.10 pm.

Covid-19 Inquiry: Judicial Review

Tuesday 6th June 2023 Lords Chamber

Statement

20:28

[The Deputy Speaker (Baroness Bull) (CB)]

My Lords, the Statement on which we are about to take questions concerns matters which are currently before the courts. The Speaker granted a waiver of the sub judice rule in the House of Commons yesterday to allow these matters to be raised on the grounds of their national importance. The Lord Speaker has also agreed to waive this House’s sub judice resolution, both during proceedings this evening and on an ongoing basis.

The following Statement was made in the House of Commons on Monday 5 June.

“I am grateful for permission to make a Statement on the Government’s decision to seek a judicial review on a specific point of law relating to the public inquiry on the Covid pandemic. The whole House will recognise that, on any issue that is before the courts, a Minister needs to act and speak with extreme sensitivity. We fully respect the difficult role that judges need to perform, and I appreciate that the conventions of this place are designed to ensure that we do not make their role—the sober and detailed consideration of facts of law by those qualified to do that—any harder. I am sure that the House will respect the fact that, for those reasons, it would be inappropriate for me to debate the fine details of this case.

Notwithstanding that, we felt that there was very real public interest in the broader issue of why the Government would take the unusual step of asking for a judicial review on a point of technical difference between the Government and an inquiry that the Government have established. That being the case, we felt, as ever, that the matter should be raised in this House.

The Government fully support the vital work of the inquiry, which seeks to establish the facts, and the lessons to be learned from the response to the pandemic. It is right that the inquiry on Covid-19 be comprehensive and rigorous. It is being chaired by Baroness Hallett, an eminent former Court of Appeal judge. In this dispute, the guidance of the courts is sought on a narrow and technical point of law. It does not touch on the Government’s confidence in the inquiry. Nor does it in any way affect the Government’s intention to continue full co-operation with the inquiry. To date, the Cabinet Office alone has submitted 55,000 documents to the inquiry. We will continue to provide any and all Covid-related materials requested.

We are grateful for the work being undertaken by the inquiry chair and her team. The pandemic was one of the most difficult times for our country in living memory—so many people lost so much. The inquiry’s task is challenging. It must have the support of us all in conducting its work, and in bringing forward its conclusions in a timely way. The core point of principle that is raised is whether there are limits to the power of the inquiry to compel information and documents to be produced.

Specifically, the question raised by the compulsory notice under the Inquiries Act 2005 that was served on the Cabinet Office is whether the inquiry has the power to compel production of documents and messages that are unambiguously irrelevant to the inquiry’s work, including personal communications and matters unconnected to the Government’s handling of Covid. The notice received is bound to include a range of material of that nature. It covered a two-year period and a range of documents, including WhatsApp messages relating to my right honourable friend the Member for Uxbridge and South Ruislip, Boris Johnson, and a former special adviser.

I reiterate that all material that is relevant to the inquiry’s work has been and will be provided to the inquiry; likewise, material about which there might be real questions about its relevance to that work. There is no question but that all internal discussions on Covid, in any form, requested by the inquiry will be made transparently available to it. What has been redacted, and so not provided in response to the notice, is material that the Cabinet Office considers to be clearly and unambiguously irrelevant to that work. That material includes, for example, communications about purely personal matters and about other aspects of the Government’s policy and work which have nothing to do with Covid. It is that material, and that material alone, that is subject to judicial review. Honourable Members wanting to see more detail of our concerns may be interested in our letter to the inquiry, sent last Thursday, which is available on the Government’s website and a copy of which I will deposit in the House of Commons Library.

As in any such dispute, there are two sides to this debate. Baroness Hallett, as I have said, is a highly respected senior judge and inquiry chair in whom the Government have great confidence. The inquiry has made relevant statements regarding the Government’s position on its website, to which I draw the House’s intention. The inquiry will no doubt be making further statements. Above all, as I understand it, the inquiry believes that it should be for the inquiry alone to judge the relevance of the material requested. We respect that position and, as I have indicated, the Cabinet Office has provided material about which there might be a dispute.

Where we differ with the inquiry is only in relation to material that is considered to be clearly and unambiguously irrelevant, and that is considered to be so after careful checking. This is a genuine and sincere difference of opinion on which we are seeking the guidance of the courts. I do, however, want to assure the House that the Government have explored with the inquiry ways to bridge the gap between those sincerely held but differing views, and we will continue to do so. We appreciate the patience and good will shown by the inquiry as we have sought to identify a mutually acceptable solution.

We have also sought to assure the inquiry on the nature of the redactions of non-relevant material from the information requested in the Section 21 notice and how those would operate. The process deployed to ascertain and redact unambiguously irrelevant material from that information is as follows. Witnesses are required to identify any material that may contain potentially irrelevant information to the inquiry, with guidance from the counsel team supporting them. That is then reviewed by the counsel team, who identify any material that is unambiguously irrelevant. The counsel team discusses it with the witness in case there is any context or detail of which they may not be aware. The review by the counsel team includes the assessment of a King’s Counsel instructed by the Cabinet Office. No decision to redact material as unambiguously irrelevant has been or will be taken by a witness acting alone.

These redactions will all be kept under review such that if the scope of the chair’s inquiry changes, she will be able to receive the material that becomes potentially relevant. I would like to reiterate that this is a matter of legal principle that will have an impact on this Government and all future Governments. This is absolutely not related to one individual’s personal information.

In conclusion, I would like to again issue my thanks to the inquiry chair and her team for the important work they are undertaking. The Government have only embarked on this course after serious consideration. It is with regret that we felt the judicial review had to be brought forward. We are very aware that it is sometimes in the nature of government that difficult decisions have to be taken, knowing that in the short term they may of course be criticised or misinterpreted, but which we believe are important for the country in the longer term. Whereas it is entirely right that any material in any way related to Covid is available to the inquiry, we believe there is value to challenge and debate inside government being unclouded by the knowledge that other discussions could be disclosed regardless of their relevance to any future inquiry. As such, we believe this request for guidance is necessary.

Finally, I would like to make it absolutely clear to all those directly affected and bereaved by Covid that the Government will do absolutely nothing that we believe impedes the vital work of the inquiry, to give them the answers they deserve and that the country needs to ensure that we learn the lessons of Covid. I commend the Statement to the House.”

20:29

[Baroness Smith of Basildon (Lab)]

My Lords, before I start, I will just emphasise the point made by the noble Lord that it is unusual when business says

“at a convenient time after 7.30 pm”

to be starting closer to 8.30 pm. I wondered whether the Government were trying to delay it because the Minister did not want to answer questions.

Where I suspect the Government and I would agree is that Ministers, politicians and officials need private time and space to explore and discuss issues as they develop policy, but that is not what the Government’s legal action in this Statement is about. There were basically two reasons why the Government launched this inquiry into the handling of the Covid pandemic. The first was to learn lessons from what was done well, what went wrong and what changes could be made for us to be better prepared and to better respond to such events in future. For there to be trust in government for any similar event in future, we must ensure we are able to respond effectively.

Secondly, the inquiry was about trust, responsibility and accountability. Many questions have been raised since; for example, about preparedness beforehand, the supply and purchase of PPE and the disputes the Government had about scientific advice, and the view from the Government was that an independent, judge-led inquiry was the most appropriate way forward. To this end, the Government chose a highly regarded former judge, the noble and learned Baroness, Lady Hallett. I am giving some background on this because in your Lordships’ House we do not now benefit from hearing a Minister read a Statement out, so it is somewhat awkward for those listening to know what is going on. Normally, I would just have questions, but I think it is important to set on record some of the scene, which should be the Government’s job.

The Government chose a highly respected former judge, the noble and learned Baroness, Lady Hallett, but what appears to be the case—I would be grateful for the Minister’s comments on this—is that the terms of reference for that inquiry and the timescale in which it was to be expedited were not fully formed and there is now a dispute between the Government and the inquiry. We now have a rather embarrassing position where the Government are seeking a judicial review to, in their own words, test

“the core point of principle”

of who decides whether there are limits on information that an inquiry can request. The Government’s argument is that this applies only to documents that are “unambiguously irrelevant” and that this is a test case. It has been admitted by a Minister that the Government expect to lose the case but, apparently, even then, it is important to test the point of principle in the court with the taxpayer footing in Bill.

I have a number of questions for the Minister. What discussions were there between the Government and government representatives and the inquiry prior to the application for judicial review? In other words, was there any attempt to resolve this more sensibly? Can she confirm that the inquiry is being conducted under the Inquiries Act 2005? Is she confident that a judicial review is compliant with the entirety of that legislation? If so, on what grounds are the Government seeking judicial review? If, as the Government have previously confirmed, there are well over 20 million documents that could be relevant yet so far only 55,000 have been provided to the inquiry, have they made any assessment, should they be successful in the case, of the timescale for assessing those documents—whether or not the Government consider they are relevant to the inquiry—and what are the criteria for those documents being assessed as relevant? Was that ever discussed prior to the judicial review with the noble and learned Baroness, Lady Hallett?

I think the important question is whether it is true that the Government have told the former Prime Minister, Boris Johnson, that if he rocks the boat on this inquiry, they will stop paying his legal costs. The Minister huffs and puffs at me, but this has been raised in the press—it has been discussed quite openly—and I think it would be helpful in your Lordships’ House to get an accurate assessment of whether that has been the case or has been discussed, and whether there has been any discussion at government level of that kind of tit-for-tat approach.

As regards the type of documents and information requested, can the Minister say how many of those communications were by WhatsApp? The reason I raise that is that we have discussed this WhatsApp issue before, and there are real concerns that Ministers have been far too casual about communications through private messages and social media platforms, mixing up what is appropriate government business with what is just gossip and chit-chat. I can understand that Ministers may be concerned about the public reaction to the banality of some of those messages, as the Hancock exposé revealed, but the Minister has to understand that this just fuels suspicion that this judicial review is more about protecting reputations than learning the lessons of what happened during the pandemic.

I hope the Minister understands that there are real fears that, by their action, the Government could undermine the very purpose of the inquiry. If it is felt that information has been withheld or suppressed, then one of the key objectives—public trust—will have been undermined, with damaging consequences not just for our politics but for confidence in any measures that may be required if and when we face another major public health event. Other countries have already reported on their investigations; all these delays mean there is a danger that by the time these issues are resolved, it will be too late for lessons to be learned.

So many who have lost loved ones or are still living with the consequences of Covid deserve to know the truth. They also deserve to be reassured that we understand where the Government’s successes were, where the failures were, and that lessons have been learned. I hope the Minister will be able to give some answers today to reassure the House that that is the Government’s ambition too, because that aim is being undermined by this legal action.

[Lord Allan of Hallam (LD)]

My Lords, what a dog’s breakfast this is when a Government who spend so much time complaining about other people using judicial reviews stand before us trying to justify their decision to use the same legal process to prevent an inquiry that they set up having access to communications sent by members of that very same Government on matters of significant public interest.

The Government’s case appears to be that full disclosure would be unfair because their communications are all over the place, mixing business and pleasure with God knows what in a soup of uncontrolled WhatsApping, as the noble Baroness, Lady Smith of Basildon, has already flagged. Yet this is a problem entirely of their own making. While the pandemic was not something that anyone could have foreseen, it was entirely predictable that the way this Government have been working would lead to problems. If this were not happening with the Covid inquiry, we would have arrived here sooner or later with some other investigation into government decision-making where disclosure of Ministers’ messages was necessary.

Does the Minister accept that this situation could have been avoided if her Government had shown more discipline in managing government communications from the outset? Does she agree that it was not inevitable that we would end up in this mess—that this could have been avoided through having clear rules such as using different devices for home and work communications, as is common in many other sectors? Can she indicate whether all Ministers are now following improved protocols so that we will not repeatedly fall into this same situation, as there are surely other areas of government policy that will be challenged either in the courts or through future public inquiries?

I am sure that all of us find it hard to keep track of which communications channels we use for which purposes, and it can of course be convenient to mix them up, but the business of government is special and communications about decisions by government that affect millions of people have a particular importance. This importance means that Ministers of the Crown and those working for them should be held to a higher standard, and they have more resources available than most of us to help them meet those high standards.

The fact that this court case is happening is not—however much the Government protest—a way of protecting all Governments from overreach, as not all Governments would have allowed decisions to be made in the way that this one has done. Concerns about this Government acting as a chumocracy, mixing public business with the private interests of their friends and supporters, run much more widely than the supply of PPE during the pandemic.

The public interest is not now served by the Government throwing up legal barriers to those we have tasked with investigating, thoroughly and impartially, how decisions were made on matters of massive public interest. The Minister has a job to do and she has been sent here to defend her Government’s latest actions, but I hope that she will at least acknowledge that this is not a bolt from the blue but an inevitable consequence of how her colleagues have been working for far too long.

[The Minister of State, Cabinet Office (Baroness Neville-Rolfe) (Con)]

I start by agreeing with the noble Baroness, Lady Smith of Basildon, that it is difficult to answer questions when we have not had the benefit of the Statement. It was a long Statement in the other place.

[Baroness Smith of Basildon (Lab)]

The Minister misunderstands. It is difficult to ask the questions, but it should be easy for her to answer them.

[Baroness Neville-Rolfe (Con)]

It is helpful to set things out, and I thank her for trying to do that.

I want to respond to the point about our intentions. The noble Baroness described the inquiry and how it was set up. The Government wholeheartedly support and endorse this important inquiry as it seeks to establish the facts and lessons to be learned from the response to the pandemic. I agree that the noble and learned Baroness, Lady Hallett, the very distinguished, eminent former Court of Appeal judge who is chairing the inquiry, brings invaluable experience, and we are very grateful to her and the team.

As noble Lords know, the Cabinet Office is challenging the Section 21 notice issued by the chair, fundamentally as a matter of principle. We are protecting the proper conduct of government for the longer term. Indeed, we remain hopeful and willing to agree the best way forward with the inquiry.

The noble Baroness asked about discussions between the Government and the inquiry prior to the application for review. We have been working for months and making documents available. That has been done by the special team for the inquiry in the Cabinet Office. Attempts have been made to agree and, as the noble Baroness said, we are conducting the inquiry under the 2005 Act. The grounds of our review have been set out clearly in a statement of case and grounds. That has been made available and is on GOV.UK so that people can understand what our case is about.

Obviously it is with regret that we felt that judicial review had to be brought. I assure the House that it has been done in relation to unambiguously irrelevant material—I cannot emphasise that more—and as a matter of principle. The Government are not trying to suppress anything. We are happy to provide any potentially relevant material that the inquiry requests, but not unambiguously irrelevant material, which is an unwarranted intrusion into other aspects of the Government’s work. That explains the need for what is, in a sense, a narrow and technical judicial review. It does not touch at all on the Government’s confidence in the inquiry.

The noble Lord, Lord Allan, asked about the JR and felt that people would not understand why we were doing it. The truth is that the Government embarked on this course only after very serious consideration. It is with regret that we had to bring the judicial review forward. We are very aware—I am very aware of this—that it is sometimes in the nature of government that difficult decisions have to be taken, knowing that in the short term there may be criticism, but we believe it is important for the country in the longer term to ensure exactly the arrangements for disclosure. However, I cannot emphasise more strongly that if information relates to Covid then it will be made available to the inquiry.

It is true that there is a lot of documentation, along with WhatsApps, calendars and so on, to be gone through. That is why the Cabinet Office and other departments are doing everything they can to make information available to the inquiry in a usable and sensible form. I emphasise that, on the whole, relations with the inquiry have been harmonious and co-operative. What the inquiry does and decides is a matter for it, but we have done our very best to continue with that and make sure that things run smoothly.

As the noble Lord, Lord Allan, said, some inquiries in other countries have already concluded. He probably mentioned Sweden, which I think had a less wide-ranging inquiry. There is much wishing here for the inquiry to be very wide-ranging and to look at all the different issues. That is why the noble and learned Baroness, Lady Hallett, has set out the procedure for the inquiry in the way that she has, with modules looking at different things. We are assisting her. All government Ministers—those being supported by the Government—are co-operating with the inquiry.

20:45

[Baroness Chakrabarti (Lab)]

My Lords, on the anniversary of D-day, I remind noble Lords that during the pandemic this country alone lost twice as many civilians as we lost during World War II. Therefore it was quite right that the Government decided, like many other countries, to hold some kind of independent inquiry into the handling of something that was difficult for everyone—no question about that. I hope the Minister knows my respect for her; she knows that we share a characteristic of being former civil servants. I declare a further interest in being a former inquiry member, having served on Lord Leveson’s inquiry, so I hope I have a number of insights into this kind of process.

I am concerned that sometimes Governments hold inquiries, important though they are, to kick important issues into the long grass. If I am not right about that, I am sure that a lot of people in the country share a potential cynicism about the inquiries held. I think the noble Lord, Lord Allan, suggested that it is like saying, “We don’t believe in legal aid or in judicial review, but we believe in judicial inquiries whenever there is a political crisis”. I have concerns about that.

In particular, however, I ask the Minister: how is it ethically or publicly appropriate to constitute your own independent judicial inquiry into a matter of such public concern and not to trust the judge—a Member of this House—to decide what is relevant and not relevant, and what is sensitive and not sensitive? If there are things that are sensitive, how is it not appropriate to put in the disclosure with suggested redactions and leave it, for goodness’ sake, to the noble and learned Baroness, Lady Hallett, rather than to judicially review the government’s own instituted inquiry? Further, and finally, how is it appropriate to use the leverage of withdrawing legal funding from witnesses as a means of deciding that those witnesses—whoever they are, whether I like them or not and whether I agree with them or not—should not co-operate with the inquiry of the noble and learned Baroness, Lady Hallett, for fear of having legal support withdrawn?

[Baroness Neville-Rolfe (Con)]

Perhaps I could pick up that last point, which the noble Lord, Lord Allan, also raised—

[Baroness Smith of Basildon (Lab)]

It was me.

[Baroness Neville-Rolfe (Con)]

My apologies. There is a well-established precedent, as we all know—I think it goes across many Administrations—that former Ministers are supported with legal representation after they leave office. The cost of that is met from government funds and for good reasons, I think, for when those of us who serve as Ministers are doing so. When the former Prime Minister, Boris Johnson, decided to recuse from being supported by government legal services a letter was sent to him, explaining that it was possible for him to have his legal advice—if this is what was being referred to—paid for, subject to the normal rules of value for money, as the Permanent Secretary has to sign off that money is properly spent. I think it is a non-issue and that he is now drawing on his own solicitors, Peters & Peters, for advice.

The noble Baroness, Lady Chakrabarti, explained that we all agree that we have empowered a very eminent judge. I think she was making the point that it is up to the judge to decide what is relevant and what is not. We agree that the framework of the inquiry is for her to decide, but there is this narrow point about unambiguously irrelevant documents and messages. Some of those are WhatsApps, as has been mentioned. Since the Act was passed, WhatsApps have become a much more common form of communication. You can imagine that in the bundles there is a combination of personal communication and matters that are completely unconnected to the Government’s handling of Covid.

I want to make it clear—the Paymaster-General made it completely clear in the other place—that documents relating to Covid and potentially relevant material will be made available to the inquiry. It is a broad-ranging inquiry. We owe it to the people who lost their lives and those whose relatives lost their lives to find out what happened. The inquiry has to be of a very wide-ranging nature. However, in some of those documents and notebooks, there is material which is completely unconnected to the Covid inquiry.

We have therefore asked a judge to use the process of judicial review—those noble Lords who have been involved in the courts will know this is quite a common process—to rule on this technical point. We hope to have a hearing on this by the end of June so that things will be clear. In the meantime, we are continuing to submit material every day to the inquiry and to work with it.

[Lord Faulks (Non-Afl)]

My Lords, I apologise for missing the first 30 seconds of the observations of the noble Baroness, Lady Smith. Some of us were standing by and did not expect business to proceed quite as quickly as it did. I think some others may be in the same position.

The optics of this are not particularly good. I can understand the observations made by the noble Baroness, Lady Smith, and the noble Lord, Lord Allan. Clearly, individuals involved in this inquiry should not be able to hide behind process and conceal anything which may be relevant to the inquiry. I of course share with others the confidence in the noble and learned Baroness, Lady Hallett, as an entirely suitable chair with a very important role to fulfil.

I find some reassurance in the Statement in the description of the process, which has been undergone and will continue, in deciding what should or should not be disclosed. It says:

“Witnesses are required to identify any material that may contain potentially irrelevant information … with guidance from the counsel team supporting them. That is then reviewed by the counsel team, who identify any material that is unambiguously irrelevant. The counsel team discusses it with the witness in case there is any context or detail of which they may not be aware. The review … team includes … a King’s Counsel … No decision to redact material as unambiguously irrelevant has been or will be taken by a witness acting alone”.


There is an important role for the lawyers, rather than the witnesses, in deciding on relevance, although that is a continuous process. This is perfectly familiar to those like me who have been involved in disclosure and judicial review generally. It seems that there is a matter of importance in deciding what should and should not be disclosed, not just for the purposes of this inquiry but for inquiries in the future which may involve different Governments on different issues.

However, I ask the Minister whether it is possible to reach some kind of compromise on this, so that in the process described, which should be able to identify matters which are relevant or unambiguously irrelevant, there should be some circle of confidence involving the inquiry and its chair’s lawyers to enable her, her team and the government lawyers to ascertain what is truly relevant while not wasting a lot of time on things that are irrelevant and without forcing some judge to make a rather difficult decision on where the parameters lie.

[Baroness Neville-Rolfe (Con)]

I thank my noble friend for his wise advice and the background. We miss him on the Front Bench, and it is good that he has come to talk to us today. As evidence of his point, materials are carefully considered. One of the issues under debate was the Sarah Everard processes. In this case, a message that appeared unconnected to Covid was initially redacted, but it was then identified as potentially relevant as part of the additional counsel review, which the noble Lord referred to, so the Cabinet Office then provided it to the inquiry proactively. A process is going on, and a large team is working away at this. All along, our legal team in the Cabinet Office looking after the inquiry has tried to agree on sensible arrangements. We have entered a JR, but we remain hopeful and willing to agree the best way forward with the inquiry, if that is possible.

[Baroness Brinton (LD)]

My Lords, one of the strengths of a judge-led public inquiry is that it is able to look at everything, including the emerging wider context and competing pressures facing those who have to come to some very difficult decisions. Inquiries such as the Leveson inquiry, that on Hillsborough and, more recently, IICSA have all had confidential information and have had to decide what to redact. I was peripherally involved in the latter of those as a witness, and it was somewhat nerve-racking to hand over personal information, but I was utterly confident that the decisions would be made in the interests of the inquiry.

As the health spokesperson on the Front Bench during Covid and just before it first struck in January and February 2020, I note that there are a large number of issues, including the Government disbanding the pandemic preparedness group to leave more space for Brexit. NERVTAG and SAGE minutes between January and February changed very quickly, and it is illuminating to read them. But it was concerning to read that the Prime Minister missed the first five COBRA dates, and there were reports that he was not working on weekends during that early period. In addition to those reasons, some of what the inquiry needs to look at includes why the UK did not follow the World Health Organization guidance on testing and protection from the start, and why the UK Government sent PPE to China just at the point that the experts were saying that our health people needed it. We had health staff in bin bags because we did not have any PPE in this country.

For all these reasons, I ask the Minister whether she believes that the inquiry really needs to see the detail of that correspondence. It may look irrelevant from the outside, but, in terms of emerging contexts and competing decisions, it becomes vital to what happened and whether people lived or died.

[Baroness Neville-Rolfe (Con)]

The Government set up the inquiry for exactly the sorts of reasons that the noble Baroness outlined. These questions need to be answered. As I said, the Government are making available all relevant information—anything related to Covid or decisions about it is being made available. The judicial review is on a narrow technical point about unambiguously irrelevant items, and I assure the noble Baroness that the Government seek to ensure that the inquiry and its chair have all the information and access to witnesses that they need, to ensure that the very important questions that the chair is asking are answered. That is why we are having an inquiry. Of course, we want it to get on, and we look forward to learning the lessons as soon as possible.

[Lord Wallace of Saltaire (LD)]

My Lords, does the Minister recognise that this is a particular example of the confusions and contradictions into which the Government have now slipped, in terms of our constitutional conventions and of maintaining public confidence in constitutional government? After all, we are being asked to accept that what the Cabinet Office decides is or is not relevant to the inquiry should be accepted, rather than what a judge who is heading the inquiry considers.

According to recent public surveys, public trust in government is now lower than it has been in my lifetime; this is not a decision that would help to restore public trust. I spent the last 24 hours leading a very interesting new Constitution Unit publication on the executive prerogative. This is, after all, an issue of executive dominance, or acceptance that the rule of law is dominant. We have had a number of arguments in this House over the last two years about executive dominance versus parliamentary scrutiny. We have also had a parallel argument about the rule of law, the role of the courts and the influence of lefty lawyers—as is so often said in the right-wing media—and of the damage that excessive judicial review was doing to decent executive government. Now, we have the Government reversing and wanting to use judicial review, which they have been arguing about limiting for a good time, so that they can defend themselves against their own inquiry.

Does the Minister not agree that, after we come out of this, this Government or the next Government need to have a very thorough examination of the relationship between our courts, the rule of law and the Executive, and between the Executive and Parliament, to determine how they will restore wider public confidence in the balance between the institutions which hold our Government together?

[Baroness Neville-Rolfe (Con)]

I am grateful to the noble Lord for his thoughtful comments. Issues about the Executive and Parliament are ones that we debate. We have set up a very broad inquiry to learn the lessons and do the right things for the future. The Cabinet Office and other departments—because other departments are also party to the inquiry—have followed procedures that have worked well on a series of other inquiries. What we have found here is that there has been an issue about some unambiguously irrelevant information. That is not going to stop us making available all relevant material in relation to Covid. I think that people have just mistaken our intentions, but I am sure that it will be quickly resolved—obviously, that is my hope.

[Baroness Chakrabarti (Lab)]

So as not to mistake the Minister’s intentions, why not make the application not for judicial review but to the noble and learned Baroness, Lady Hallett, herself, by submitting with full disclosure with a submission that certain parts of it be redacted? That is what a Government do when they have trust in the judicial chair of their own inquiry, so why not do that?

[Baroness Neville-Rolfe (Con)]

As I hinted, we have been in discussion for some time, and we have tried to make progress. We have taken the view, on advice from our own King’s Counsel, that it is appropriate to seek a judicial review—so that we can get guidance on this narrow and technical point of law, particularly in the new era of communications—and that that is the sensible thing to do.

I failed to respond to an earlier question about the use of digital communications. I should repeat that this is something we debated. I made a Statement in March issuing the new guidance on the use of non-corporate communication channels, which distinguishes between things that must be recorded for posterity, and the disciplines that we as Ministers have to enter into, and the ephemera with which is not appropriate to clog up the record book. Obviously, it is early days, but I hope that that will help with these issues in the future. I also look forward to the clarity of this judicial review, into which we have entered with good faith and the expectation that it is proper, whatever might have been said by some others.

[Baroness Smith of Basildon (Lab)]

My Lords, the Minister has addressed a number of issues tonight but, looking back, I am not sure that she answered many of the questions that I asked at the beginning. I shall check Hansard. To press her on one point, she was clear that the inquiry was under the Inquiries Act 2005 and all parts were being complied with. I asked her about the judicial review, and she did not really respond to that. She may not have time to reply now, and she may not know the answer, given her previous answers, but I would ask her to look at Section 21 of that Act, which says that the person who chairs an inquiry can require a person giving evidence to

“produce any other thing in his custody or under his control”.

There is quite a bit in that section about the duty to comply with any request as

“determined by the chairman of the inquiry”,

which would imply that the Government may not be fulfilling all requirements under that section of the Act. I would be grateful if the Minister could look at that and write to me.

[Baroness Neville-Rolfe (Con)]

I can certainly look at it. The document that I mentioned, which is on the internet, starts off by going through exactly those paragraphs of Section 21 and picking up the points that the noble Baroness has made and explaining why. Interpretation is at the heart of the judicial review. As the noble and learned Baroness, Lady Hallett, helpfully made clear this morning when she made some comments in opening a phase of her inquiry, we should leave that to the court, and find out how that works out. But I am very familiar with Section 21.

21:06

Sitting suspended.

Financial Services and Markets Bill

Report stage
Tuesday 6th June 2023 Lords Chamber

Report (1st Day) (Continued)

21:10

Clause 24: Competitiveness and growth objective

Amendment 8A

Moved by

[Viscount Trenchard]

8A: Clause 24, page 38, line 23, leave out “aligning with” and insert “having regard to”
Member’s explanatory statement
This amendment, and the amendment to Clause 24, page 39, line 2, in the name of Viscount Trenchard, amends the role of international standards in relation to the growth and competitiveness objective.

[Viscount Trenchard (Con)]

My Lords, Amendments 8A and 8B were originally tabled by my noble friend Lady Noakes. In moving Amendment 8A, I remind your Lordships of the interesting debate on this matter in Committee on 1 February. I repeat that we are, in many fields, especially financial services, a leader in the formulation of international standards and best practice. The FCA says on its website:

“We contribute to and implement international standards, and supervise and enforce rules based on them in the UK”.


I believe that the UK’s influence in IOSCO, the recognised standard setter for securities regulation, has been enhanced now that we sit at the table in our own right, rather than as a member state of the EU. The same is surely true with regard to our influence within the International Association of Insurance Supervisors.

I support the new competitiveness and growth objective—although I think it should have been of equal importance with the regulators’ primary and operational objectives—but I continue to believe that it is rather curiously drafted. I am still not sure what the Government mean by

“aligning with relevant international standards”.

First, the word “relevant” is very subjective. We all know that there is often a lack of consistency as to what different people consider relevant. I already worry that the competitiveness and growth objective will be subjugated to the primary objectives, depending on which standards the regulators may choose to exempt them from the need to have regard to.

Secondly, surely the amendment is drafted in a way that gives too much weight to policies developed outside the UK, which are claimed by some to be international standards. Does my noble friend want to see a position where the PRA, for example, can ignore the secondary objective on the grounds that it is following international standards, where those standards are not core to the primary objective? International standards are a highly subjective concept and it is not at all desirable for the UK to have to adhere to everything that claims to be an international standard. The competitiveness and growth objective is already circumscribed by its status as a secondary objective. Using the PRA as an example, this means that it has only to,

“so far as reasonably possible, act in a way which … advances the competitiveness and growth objective”.

If the PRA considers that adherence to certain international standards is necessary, they are already covered by its primary objective. However, if an international standard is not necessary for the primary objective, why should such an international standard crowd out the competitiveness and growth objective?

21:15

Besides, it is not easy to define what is an international standard. As my noble friend said in Committee, the Basel capital standards have not always been followed universally—most notably by the United States, which pursued its own course for a considerable period. International standards are not matters of international law. Their implementation is always a matter of judgment for the home regulators, and therefore needs to be considered in the judgments they make on their primary objective.

My noble friend the Minister’s response on this matter in Committee was, I fear, a little disappointing, although she acknowledged that nuances of the UK market mean that the international standard is not appropriate. She added that it may be best for UK markets to go beyond the international standard. It is quite possible that I missed it, but I do not think my noble friend acknowledged that it is a largely subjective consideration as to what is relevant, and it is certainly subjective and lacking in clarity as to what international standards are.

I ask my noble friend whether she can at least bring back a definition for Third Reading if she does not consider that my amendment offers a reasonable solution, for “having regard to” is a lot less onerous than requiring “alignment with”. I beg to move.

[Baroness Bowles of Berkhamsted (LD)]

My Lords, I have two amendments in this group. Amendment 9 is similar to one I tabled in Committee and is intended to focus the secondary objective on the advancement of the UK economy through fair and efficient operation of financial markets.

It still concerns me that the Government’s wording can be interpreted as more about general profitability of financial services, rather than the positive nature of their operation on the economy. We got into a bit of a tangle about this in Committee when the Minister focused on how financial services made money out of clients. I hope the Minister can now appreciate the nuance and at least confirm that the primary intention of the secondary objective is benefit to the economy that is served by financial services, and not maximum income generation from financial services to the extent that it is of detriment to the economy.

A great deal of attention has gone into asking what regulatory issues have risked competitiveness. A key example is how the London market lost out in new insurance products when the regulator was too slow. Criticism has been levied about delays in SMCR approval of new staff. My Amendment 115 concerns an alarming example of harm to the economy and proposes a solution through a specific legislative amendment. It aims to fix a competitiveness and investment issue with listed closed-ended investment funds. As such, I declare my interests as both a director of the London Stock Exchange plc and a director of Valloop Holdings Ltd, which has potential interest in such listings.

For the last 14 months, a dire situation has been seriously affecting the UK economy and should have been resolved but has not. It has its origins in a face-value interpretation of an EU regulation that is part of the MiFID family, relating to how ongoing charges should be presented in collective investment schemes that invest in other funds and a desire to create a consistent cost disclosure framework in a somewhat inconsistent EU framework.

As part of reviewing what should be included in cost redisclosures, the FCA asked the Investment Association —the principal trade body for the asset management industry in the UK—to provide new guidance. That guidance now requires that when a fund holds shares in listed closed-ended investment funds—also known as investment trusts—it should aggregate with the investing fund’s own charges all the underlying running costs that are incurred within the investment trust, including the listing and corporate costs, in the same way as it would were it to hold units in an unlisted open-ended fund. The IA took this line because the investment trust is regarded as a collective investment undertaking, and the EU regulation refers to collective investment undertakings.

At first sight, the cost disclosure might look reasonable, but it ignores the nature of investment trusts, which have publicly traded shares with a price set by the market: an investment trust is essentially like any other publicly traded company from an investment perspective. If a fund invests in the ordinary shares of a listed commercial company, the internal costs of that commercial company do not have to be shown in aggregated charges. For both listed commercial companies and listed investment trust companies, everyday running costs are disclosed in accounts, reflected in profit and ultimately in the share price, which embodies investors’ assessment of the company, including its underlying costs. However, the IA guidance instead equates investment trusts with open-ended funds, requiring internal running costs incurred at the investee investment trust level to be aggregated as a cost, setting aside the fact that, unlike with units of open-ended funds, investors have already factored such changes into the price that they are prepared to pay for the shares of the investment. Thus, for example, directors’ fees of an investment trust aggregate as an ongoing charge of the investing fund; the directors’ fees of a commercial company that is similarly invested in do not have to be aggregated. Likewise, various other corporate costs receive dissimilar treatment.

Therefore, that is an unfairness, but why does it matter beyond being anti-competitive, as if that is not enough? It matters because those corporate costs being in effect almost duplicated and put under the headline of “ongoing charges” suddenly elevated the ongoing charges of the fund investing into the investment trust, sometimes to levels where they hit cost ceilings put in place by various pension funds and other collective investment funds, or simply made fund managers cringe when the headline of accumulated charges suddenly looked more expensive and people started to think that they were doing something wrong. Hence, there became a disincentive to invest in investment trusts to avoid these unexpected changes, questions about them or hitting cost ceilings. A great deal of investment choice follows the headline and not deeper analysis, which separates and explains the varying nature of costs.

To make the point again, an ordinary listed commercial company, such as SEGRO plc, which invests in property, might now be deemed investable while the exact same property investments with the exact same costs, held for example by the investment trust Tritax Big Box fund, might be deemed not investable because one does not have to have its corporate costs regarded as ongoing charges and the other does.

I do not think it is a coincidence that, since the new guidance, there has been no real asset IPO and just a couple of small equity IPOs of investment trusts. At a stroke, something that has at times been regarded as a jewel in the London funding ecosystem—an expanding sector of listed funds investing into long term illiquid alternative assets such as renewable energy and other infrastructure—has been abandoned.

I just gave an example of two companies investing in property, with no intention to impugn either, but there are some sectors of the economy where using an investment trust to raise funds is the only route to capital—notably for new and innovative business in the environmental and social sectors: businesses such as HydrogenOne, which is leading investment into UK’s alternative energy, directly linked with our net-zero commitments.

It is also the case that investment trust exposures are typically more diversified and real than exposures via commercial corporates, which investors appreciate but now cannot access as they have been dropped from portfolios. This is a real loss to the UK economy that has been going on for 14 months. We have all read the news about companies switching listing from London for valuation reasons—and that is another story—but here it is not switching, it is simply regulatory asphyxiation.

Both the FCA and the Investment Association know and understand the problem. The IA thinks it should be fixed and has publicly written about it to the FCA. On the face of it, given that inherited EU legislation is the mix, I think it is more up to government and the FCA to fix it than the IA, even though it came up with the guidance. In any event, you go up the power chain to fix a disaster. It is also worth noting that there is no actual legislative EU definition of collective investment undertaking, only ESMA guidance, from which the FCA could distance itself, if only for this specific purpose.

The Government have been informed of this issue and, while dreaming up ways to help more investment in the productive economy is important for the Chancellor, all he has to do here is stop this extinction event. It is not about undermining transparency; it is about understanding what is and is not like-for-like. There are those who have been getting around it in some EU countries by saying that for cost disclosure purposes, an investment trust is a company not a fund, but investment trusts are not mainstream in EU countries; they use other channels for investment, so the issue is not really pursued.

The UK situation now is that we have essentially just clarified our law using definitions originating in soon-to-be-discarded PRHPs and non-legislative EU guidance, front-running a wider-reaching FCA review and achieving nothing but harm. My amendment shows one way to fix it by amending the regulation so that all listed companies are treated the same for the assessment of accumulated ongoing charges. Investment trusts would then not be discriminated against by being improperly lumped together with open-ended funds whose value is not set through share price, nor by having a cost label attached, compared with competing commercial companies or funds in other countries, and the UK businesses reliant on the investment trust route could again raise the capital they need.

21:30

I would dearly like the Government just to do this now or suggest that the FCA gives immediate interim guidance. It is an emergency. It should not need months and months of consultation. It is going back to what worked for years. Quick fixes are one of the things that Brexit is meant for but, instead, we are ruining ourselves for want of flexibility and action. If we cannot do regulatory repairs like this quickly, I do not see any point in a competitiveness objective. This issue shows a monumental lack of awareness from the Government and the FCA about the sharp end in the real economy. A dire problem has been left festering.

[Baroness Bennett of Manor Castle (GP)]

My Lords, I rise to speak to Amendments 10 and 112 in my name; I gratefully acknowledge the support of the noble Lord, Lord Sikka. This is a bit of a diverse group, but Amendment 10 in particular heads in a similar direction to Amendment 9 in the name of the noble Baroness, Lady Bowles of Berkhamsted—a direction that seeks to lead towards a financial sector that meets the needs of the real economy rather than swallowing up the scarce human and capital resources that could be used to far better effect than creating complex financial instruments that, when they go down, threaten to take the rest of us with them.

Had it not been for events between Committee and Report, I might have chosen to sign the noble Baroness’s amendment instead of tabling my Amendment 10, which states that Clause 24—the growth and competitiveness clause to which the noble Viscount, Lord Trenchard, referred—should not be deleted from the Bill. It mirrors exactly the amendment tabled in Committee by the noble Lord, Lord Sikka, signed then by myself. However, in the light of events, I thought it really important that we tackle the “growth at any cost” foundation that underlies Clause 24: “Growth is infinite; let’s chase as much growth as we can”—which is, of course, the ideology of the cancer cell.

In Committee, the noble Lord, Lord Sikka, said:

“The secondary objectives of growth and competitiveness cannot be reconciled with the main role of ensuring financial stability and consumer protection”.—[Official Report, 1/2/23; col. GC 242.]


This is a position that we both hold. However, it was clear in Committee that there was no support from the Front Benches, and the issue might have been allowed to lapse. But then there were events that highlighted the many dangers of chasing growth in the financial sector. After several weekends of financial panic, emergency meetings and sudden bank rescues, parts of the real economy—in particular, the digital sector—were left highly uncertain of their financing. I am referring, of course, to the collapse and rescue of Silicon Valley Bank, Credit Suisse and Signature Bank, the first and last of those being mid-sized US banks and the middle one being a former European banking colossus.

These US events came after President Trump watered down the Wall Street Reform and Consumer Protection Act, better known as the Dodd-Frank Act, in 2018, reducing the supervisory oversight of banks with assets between $50 billion and $250 billion; the noble Viscount, Lord Trenchard, referred to this watering down in his introduction to this group. However, just because someone else is doing the wrong thing and reducing controls and protections, it does not mean that we should chase after and try to compete with them. As David Enrich from the New York Times put it, this was a

“crisis that has revealed the extent to which the banking industry and other opponents of government oversight have chipped away at the robust regulatory protections that were erected after the 2008 financial meltdown”.

What happened is that competitiveness had been advanced while security was lost and risk increased. A great many people had sleepless weekends as a result of that.

What has also become clear since Committee is how Credit Suisse clients withdrew nearly $69 billion from the bank in the first quarter of this year before its fire sale rescue by UBS in March. Of course, Credit Suisse had been hit by the insolvency of Greensill Capital—something that is rather close to home in your Lordships’ House—and the collapse of family office of Archegos Capital Management, which caused huge trading losses. However, the end came very quickly.

Clearly, in the digital age which SVB helped to fund, financial events can occur at a speed that was unimaginable even in 2007-08. I wonder whether, when wrapping up, any of the Front Benches are prepared to say that they believe that regulators today are truly prepared for the world in which they operate, a world that also faces the risks of other substantial shocks, as we have seen highlighted today with the Russian attack on the Kakhovka dam, geopolitical risks and, of course, environmental risks, since as we speak, Canada is essentially ablaze. That will undoubtably have enormous impacts on the insurance sector.

The IMF’s Global Financial Stability Report from April reflects on the challenges posed by the interaction between tighter monetary and financial conditions, and the build-up of vulnerabilities since the global financial crash. It says that:

“The emergence of stress in financial markets complicates the task of central banks at a time when inflationary pressures are proving to be more persistent than anticipated”—


a statement which is particularly true within the UK. There are stresses from the shadow banking sector, the effect of geopolitical tensions on financial fragmentation, the risk of potential capital flow reversals, disruption of cross-border payments, impacts on bank funding costs, profitability and credit provision, and more limited opportunities for international risk diversification. The IMF concludes that there is a need to “Strengthen financial oversight”. This is all referring to events since we were in Committee. That is my case for Amendment 10.

My Amendment 112 is much more modest and addresses in a different way a point that I raised in Committee. I discussed the growing body of literature around too much finance, but in this amendment I am not asking the Government to agree with me on that; I am asking for them to prepare a report to consider the ideal size of the financial sector. What is the Goldilocks range for a financial sector, where we can afford the risks and supply the human resources and it serves the needs of the real economy?

As the House has heard before, I approach this question in the light of the Sheffield Political Economy Research Institute’s study from 2018, which found that the UK had lost £4.5 trillion over two decades because of its oversized financial sector—£67,500 per person. To bring this right up to the present day, in a study published last week, the global hiring website Climatebase has posted more than 46,000 jobs from over 1,500 organisations in the past two years. Of these, data science and analytics were the hardest to fill, taking an average of nearly four months to fill posts compared with three months for engineering roles.

This brings me back to Amendment 10, which would delete Clause 24. I did not have a chance to speak in Committee, but I suggest that Clause 24 as it stands is internally contradictory. It gives the FCA the duty of facilitating the international competitiveness and medium to long-term growth of the economy of the UK,

“including in particular the financial services sector”.

This clause talks of growing the economy of the UK and growing the financial sector. I posit that those two objectives are mutually contradictory. I refer to a Bank for International Settlements working paper from 2018, Why Does Financial Sector Growth Crowd Out Real Economic Growth? It is actually impossible to promote growth both in the real economy and in the financial sector. It comes back to—probably the easiest part of this to understand—the need to think about human resources. We all know the labour shortages and skills shortages that so many sectors of the UK economy are suffering, and we know that many skills are going into the financial sector when they could be going into other areas.

Tomorrow, your Lordships’ House will debate the report of our Science and Technology Committee titled “Science and Technology Superpower”: More Than a Slogan? I am not asking any Front-Benchers or the Government to agree with the claims that I am making here; what Amendment 112 asks for is a report to look at the evidence, so that the Government and the country can make considered judgments about what size financial sector we both need and can afford.

[Lord Eatwell (Lab)]

My Lords, I will address the amendments proposed by the noble Viscount, Lord Trenchard. In some way, they are part of the whole privileging of the competitiveness objective, but I do not want to talk about that. I will talk specifically about his concern about aligning with international standards.

I suggest that the success of the development of international financial markets since the 1970s has been predicated entirely on the development of an international regulatory system. It was first stimulated by the Herstatt Bank crisis in the summer of 1974, which led to the establishment of the Basel committee on settlement risk. Since then, we have developed a whole international financial infrastructure of regulation—the Basel committees, IOSCO and, most importantly today, the Financial Stability Board. That, by the way, was a British idea that has greatly aided the stabilising of international financial markets.

These committees, as the noble Viscount, Lord Trenchard, pointed out, are not part of any form of international law or treaty. They are what is known in the trade as “soft law”. They are laws that countries agree it is in their mutual benefit to align with, and failing to align is against the benefit of individual countries as well as of the system as a whole. It has been the judgment of His Majesty’s Government that it is in the best interests of the United Kingdom to align with international standards.

But there are other international standards with which we align. Take the Paris-based Financial Action Task Force. Would the noble Viscount, Lord Trenchard, suggest that we do not align with the international anti-money laundering police? It is essential that we agree to align with this framework of international financial regulation, which we have been such an important element in creating.

[Viscount Trenchard (Con)]

My Lords, I am grateful to the noble Lord for giving way, but I want to correct him for criticising me for opposing all international standards. The ones he has chosen to mention are not ones that I objected to specifically. I was just saying that in general international standards are not defined.

[Lord Eatwell (Lab)]

I suggest to the noble Viscount that, in fact, the whole corpus of international soft law on finance is generally known in the trade as the international standards, and those who work in the regulatory community would immediately relate to the proposals of those particular institutions. As the noble Lord pointed out, occasionally Basel standards have not been followed. This is true in the United States, where only international competitive banks follow Basel committee standards. The US has learned painful lessons over the last year or so with the collapse of Silicon Valley Bank and others that did not follow Basel standards. The relaxation of standards was one of the elements that led to that particular collapse. Alignment with international standards and the institutions which—I say again—Britain has done so much to help develop is an important part of the maintenance of financial stability in this country.

[Lord Davies of Brixton (Lab)]

My Lords, I will make an argument that the idea that greater competition is a public benefit is simply wrong, if you think it is inevitable. Now, I spoke about this at length in Grand Committee a couple of weeks ago, and the Minister had the benefit of my views on the matter at the time, so I am not going to repeat them at length; one or two other Members present did as well.

21:45

The idea that a bigger financial sector will benefit the economy is, to me, a non-sequitur. There is a limit to the advantage that we get from the financial sector, and my view is that we are beyond that limit at the moment. It is certainly an issue which needs to be considered, rather than the assumption that we have to get a bigger and more competitive financial sector.

I also support the deletion of Clause 24 and will speak in support of the mover of the proposition. I should say that my noble friend Lord Sikka would very much have liked to have been present, but pressing family circumstances meant that he was unable to be with us. He was strongly of the view—and I agree with him—that giving the FCA this competition objective is fundamentally wrong. To be brief, the two crucial problems are that it promotes regulatory capture—the phenomenon where the people who are meant to be regulated come to dominate the thought and practice of the regulator—and that it inevitably leads to the weakening of consumer protections. However much you may wish that it was not the case and however much you want to say that it will not happen, experience tells us that that will be the result.

Financial regulation ultimately requires robust rules, made in the long-term public interest. The public interest does not always align with the immediate interests of financial institutions. Tasking oversight bodies with promoting the industry they regulate fundamentally compromises their work. It is just the way the system works, and however much you may wish that the world was different, experience over many years demonstrates that that is the inevitable result of tasking the regulator with the job of promoting what they are meant to be regulating.

[Lord Livermore (Lab)]

My Lords, we do not support this group of amendments. We strongly support the inclusion in this Bill of the new secondary objective for the regulators on international competitiveness and economic growth. Its position as secondary in the hierarchy of regulators’ objectives is of course key. As a secondary objective, economic growth and international competitiveness will remain subordinate to the regulators’ primary objectives of preserving financial stability and protecting consumers. The UK’s reputation and success as a leading international financial centre depend on high standards of regulation, and a stable and independent regulatory regime. These high regulatory standards are a key strength of the UK system and its global competitiveness, so we would not support any moves towards a regulatory race to the bottom. That would negatively impact international confidence in the UK, making the UK less attractive to international businesses and investment.

The UK’s financial services industry plays a vital role in boosting economic growth and delivering skilled jobs in every part of the UK. Almost 2.5 million people are employed in financial services, with two-thirds of those jobs based outside London, and the sector contributes more than £170 billion a year to GDP—8.3% of all economic output.

The City of London is one of only two global financial capitals and is at the very heart of the international monetary system. This is an enviable position, and it is vital that we support the sector across the UK to retain this competitiveness on the world stage post Brexit so that the UK can continue to be one of the world’s premier global financial centres. It is therefore crucial that the UK’s regulatory framework plays its part in supporting this positive contribution to the UK economy and society. To do this, it must enhance competitiveness and support the industry in trading with the world, including in new markets. It must attract investment into the UK and promote innovation and consumer choice.

A secondary growth and international competitiveness objective is a simple and internationally proven way to achieve this, helping to ensure that the UK remains a leading global financial centre by empowering regulators to make the UK a better place to do business and ensuring a more attractive market for international providers and consumers of financial services. The UK is, of course, in competition with other international financial centres, and many of them, including Australia, Hong Kong, Japan, Malaysia, Singapore, the United States and the European Union, have introduced a similar objective, which they balance against financial stability and consumer protection.

In future groups we will come to topics such as investment in high-growth firms, but it is precisely by having this secondary objective on competitiveness and growth that we will create an ecosystem that supports investment in new technologies, provides much-needed economic growth and secures new jobs.

[The Parliamentary Secretary, HM Treasury (Baroness Penn) (Con)]

My Lords, the new secondary growth and competitiveness objectives in the Bill will ensure that the regulators can act to facilitate medium to long-term growth and competitiveness for the first time, but a focus on competitiveness and long-term growth is not new. When the UK was part of the European Union and financial services legislation was negotiated in Brussels, UK Ministers went to great efforts to ensure that EU regulations appropriately considered the impact that regulation could have on economic growth and on the competitiveness of our financial services sector.

Now that we have left the EU, and as the regulators take on responsibility for setting new rules as we repeal retained EU law, it is right that their objectives reflect the financial services sector’s critical role in supporting the wider economy. We must ensure that growth and competitiveness can continue to be properly considered within a robust regulatory framework. As the noble Lord opposite said, a secondary competitiveness objective strikes the right balance. It ensures that the regulators have due regard to growth and competitiveness while maintaining their primary focus on their existing objectives. That is why the Government strongly reject Amendment 10, tabled by the noble Baroness, Lady Bennett of Manor Castle, which seeks to remove the secondary objectives from the Bill.

Turning to Amendment 9 from the noble Baroness, Lady Bowles of Berkhamsted, the Government agree that the UK financial services sector is not just an industry in its own right but an engine of growth for the wider economy. The current drafting of the Bill seeks to reflect that but also recognises that the scope of the regulators’ responsibilities relates to the markets they regulate—the financial services sector—so it is growth of the wider economy and of the financial services sector, but not at the expense of the wider economy. I hope I can reassure her on that point.

On Amendment 115, also from the noble Baroness, Lady Bowles, as noble Lords know, the Bill repeals retained EU law in financial services, including the MiFID framework. Detailed firm-facing requirements, such as those that this amendment seeks to amend, are likely to become the responsibility of the FCA. As such, it will be for the FCA to determine whether such rules are appropriate. When doing so, the FCA will have to consider whether rules are in line with its statutory objectives, including the new secondary growth and competitiveness objective.

Parliament will be able to scrutinise any rules that the regulators make, including pressing them on the effectiveness of their rules, and how they deliver against their objectives. Industry will also be able to make representations to the regulators where they feel that their rules are not having their intended effect or are placing disproportionate burdens on firms. I hope the noble Baroness is therefore reassured that the appropriate mechanisms are in place for considering the issues that she has raised via that amendment.

[Baroness Bowles of Berkhamsted (LD)]

I understand that there are and will be mechanisms in place, but the point that I was trying to make—and the reason that I expounded at length on how we got into this mess—is that it is urgent action that is necessary. This is not something that waits for this great wheel of change that we are bringing in through this Bill to come along. This is something that should be on people’s desks tomorrow; it should have been on people’s desks a year ago. There will not be ongoing investments trusts if it is not fixed now.

[Baroness Penn (Con)]

I understand the case that the noble Baroness makes, but it is not for an amendment to this Bill but for regulator rules to address the issue that she raises.

I turn to Amendments 8A and 9A from my noble friend Lord Trenchard, which seek to remove the requirement for the FCA and the PRA to align with relevant international standards when facilitating the new secondary objectives and instead have regard to these standards. As we have heard, international standards are set by standard setting bodies, such as the Basel Committee on Banking Supervision. These standards are typically endorsed at political level through international fora such as the G7 and G20 but, given the need to enable implementation across multiple jurisdictions, they may not be specifically calibrated to the law or market of individual members. It is then for national Governments and regulators to decide how best to implement these standards in their jurisdictions. This includes considering which international standards are pertinent to the regulatory activity being undertaken and are therefore relevant.

Since we left the EU, the regulators have been generally responsible for making the judgment on how best to align with relevant standards when making detailed rules that apply to firms. This approach was taken in the Financial Services Act 2021, in relation to the UK’s approach to the implementation of Basel standards for bank regulation and the FCA’s implementation of the UK’s investment firms prudential regime. It was also reflected in the overarching approach set out in the two consultations as part of the future regulatory framework review.

Part of the regulators’ judgment involves considering how best to advance their statutory objectives. Following this Bill, this will include the new secondary competitiveness and growth objectives. The current drafting therefore provides sufficient flexibility for the regulators to tailor international standards appropriately to UK markets to facilitate growth and international competitiveness, while demonstrating the Government’s ongoing commitment for the UK to remain a global leader in promoting high international standards—which, as we have heard, the UK has often played a key part in developing. The Government consider that this drafting helps maintain the UK’s reputation as a global financial centre.

I turn finally to Amendment 112 from the noble Baroness, Lady Bennett. The Government consider the financial services sector to be of vital importance to the UK economy. The latest figures from industry reveal that financial and related professional services employ approximately 2.5 million people across the UK, with around two-thirds of those jobs being outside London. Together, these jobs account for an estimated 12% of the UK’s economy.

The financial services sector also makes a significant tax contribution, which amounted to more than £75 billion in 2019-20—more than a tenth of total UK tax receipts—and helps fund vital public services. It is not for the Government to determine the optimum size of the UK financial services sector, but in many of the areas that the noble Baroness calls for reporting on, the information would be largely duplicative of work already published by the Government, public sector bodies or other industry groups.

For example, the State of the Sector report, which was co-authored by the City of London Corporation and first published last year, covers talent, innovation, the wider financial services ecosystem, and international developments and comparisons. The Government will publish a second iteration of the report later this year. The Financial Stability Report—

[Baroness Bennett of Manor Castle (GP)]

The Minister said that was a City of London report, but then said it was a government report. Surely the City of London Corporation is not an independent source on the financial sector—it is the financial sector.

22:00

[Baroness Penn (Con)]

It is a joint report from the City of London and the Government that provides analysis of a number of the areas that the noble Baroness covers in her amendment.

I was just moving on to the Financial Stability Report, which is published twice a year by the Bank of England’s Financial Policy Committee, setting out the committee’s latest view on the stability of the UK financial system and what the committee is doing to remove or reduce any risks to it and make recommendations to relevant bodies to address systemic risks.

I hope that noble Lords will agree, although I am sure that not all do, that a well-regulated and internationally competitive financial services sector is a public good for the UK and something that we should continue to support. I therefore hope that my noble friend Lord Trenchard will withdraw his amendment and that other noble Lords will not move theirs when they are reached.

[Viscount Trenchard (Con)]

My Lords, I thank all noble Lords who have taken part in this short debate. The noble Baroness, Lady Bowles of Berkhamsted, talked about the senior managers and certification regime. Does she know that the Japanese banks have given up sending senior directors to London because they cannot get authorised, so they have to promote people who are already in London? All three main megabanks are now doing that because they are so exasperated with the difficulty of getting their senior officers approved by the FCA.

I entirely agree with what the noble Baroness said about the problem of the uneven playing field between listed companies and listed investment trusts. That is an urgent problem that needs to be addressed now. The FCA, with its current culture, is just not responsive to that type of situation. Everybody is aware of that, and it is why some of us are pushing so hard for a more determined effort to change things. I think that if the competitiveness and growth objective had been given equal status with the stability objectives and the other consumer protection objectives, we might have got somewhere nearer that, but I know that not all noble Lords agree.

The noble Baroness, Lady Bennett of Manor Castle, and the noble Lord, Lord Davies of Brixton, supported Amendment 10 to leave out the competitiveness objective and Amendment 112 to reduce the size of the financial services sector. If you leave out the competitiveness objective, you will not have much of a financial services sector, so we would not need both amendments.

The noble Lord, Lord Eatwell, always speaks with great authority. We served together on the original Joint Committee on Financial Services and Markets under the excellent chairmanship of the noble Lord, Lord Burns, in 1999, and it was hugely successful. I take the noble Lord’s point, but I still do not think that we should be bound to align to an international standard just because it is a Basel committee standard; we should have to have regard to it. I say to the noble Lord, Lord Livermore, that some of the other jurisdictions that he mentioned do not subordinate their competitiveness objective to the main stability objectives.

I am grateful for my noble friend’s reassurance and beg leave to withdraw my amendment.

Amendment 8A withdrawn.

Amendments 9 to 10 not moved.

House adjourned at 10.05 pm.