Victims and Prisoners Bill (Third sitting)
Thursday 22nd June 2023
(1 year, 6 months ago)
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The Chair
We are now sitting in public and proceedings are being broadcast. I call the Government Whip to move a motion to amend the programme order agreed on Tuesday. The purpose of the motion is to enable us to hear from a witness who was unable to give evidence on Tuesday because of technical difficulties.
Ordered,
That the Order of the Committee of 20 June be amended, in paragraph (2), in the Table, in the entry for Thursday 22 June until no later than 1pm, at end insert “; SafeLives”—(Fay Jones.)
Examination of Witnesses
The Right Rev. James Jones and Ken Sutton gave evidence.
The Chair
We will now hear oral evidence from the Right Rev. James Jones, chair of the Hillsborough Independent Panel, and Ken Sutton, who was adviser to the panel. I remind all Members that questions should be limited to matters within the scope of the Bill, and that we must stick to the timings in the programme order that the Committee has agreed to. I welcome our witnesses and invite them to make a brief opening statement.
Rt Rev James Jones: No, thank you very much. I am happy to answer the questions. I welcome the proposal to set up an independent public advocate.
The Chair
Mr Sutton, would you like to say anything?
Ken Sutton: Thank you for the invitation. I headed up the secretariat that supported the Hillsborough Independent Panel and worked with Bishop James Jones in that capacity, as I have done ever since. I hope that my experience can shed some light on the independent public advocate.
Maria Eagle (Garston and Halewood) (Lab)
Q
Rt Rev James Jones: We had to gain the trust of the families, understandably. At the outset, families were not instantly persuaded that the panel, which was set up by the Government, would do what we were charged with doing, which was to access all the documents available from public authorities, analyse those documents with a team of experts, and write an account, so that there would be greater public understanding of what happened on that day. In the end, I think we gained the confidence of the families, and due to their tenacity and the expertise of the various panel members, we were able to shed light on what happened on the day and in the aftermath.
Maria Eagle
Q
Ken Sutton: I think the success of the panel did not come from its powers; as a non-statutory form of inquiry, we did not have any powers. I think the success of the panel was built on the relationship that the panel members and the secretariat established with the Hillsborough families from the start of the work. At the heart of that—I think this is very relevant to today—was the fact that the panel listened to the families. That may sound like a very simple statement, but the experience of the Hillsborough families and others was that they were not listened to. Individual Hillsborough families made the point to the panel, and to me, that they felt listened to for the first time when the panel was established. There is a clue there for the work of the independent public advocate going forward: they should, first and foremost, be listening to the families affected.
Rt Rev James Jones: To add to what Ken has said, Maria, the title of the second report, which was about learning from the families’ experiences, was “The Patronising Disposition of Unaccountable Power”. That is exactly how the families felt that public authorities were treating them over those years.
Maria Eagle
Q
Rt Rev James Jones: Contrary to the Government’s proposal, I believe that there should be a standing independent public advocate. Why? Because in the immediate aftermath of a public tragedy, people are grief-stricken and traumatised. They are unprepared and disorientated, and they no longer feel in control of their life. It is in that immediate moment that they need an advocate—somebody who will represent them to Government and signpost them to the agencies that are available to support them in that moment of trauma.
Maria Eagle
Q
Rt Rev James Jones: I do. I think the independent public advocate should have the right to engage with the families, but the families should also have a right to call upon the IPA if the IPA has not taken that initiative. My view is that the independence of the IPA has to be at the moment of decision. Unless the IPA is free to make the decision about engaging with the family or families, then I think the IPA is just a public advocate, and not an independent public advocate.
Maria Eagle
Q
Rt Rev James Jones: I am afraid I do not. I welcome the Government’s initiative, and I welcome their determination to continue to listen to various parties as they shape this appointment. However, I do not think that that independence is sufficiently guaranteed by the Bill as it stands; I think it can be guaranteed only if it is a standing appointment.
Maria Eagle
Q
Rt Rev James Jones: I do think the IPA has a role, but I think there is a difference between the IPA and the Hillsborough Independent Panel. I will leave it to Ken to differentiate those two things. As to your question about what specific responsibilities the IPA should have, I would list them as follows. First and foremost, the IPA should be able to instruct all implicated agencies to keep, and not to destroy, public records. We should not have to wait until a panel or public inquiry is set up to instruct those agencies to keep all records. Secondly, I think the IPA could call on all implicated agencies to adopt the charter for families bereaved through public tragedy, which in essence calls on those agencies not to put their reputation ahead of the interests of the families of the victims and the survivors.
I think, too, the IPA can advise the Government on the setting up of an appropriate review, be that a public inquiry under the Inquiries Act 2005, an independent panel or a different form of review or commission. I think, too, the IPA is in a good position to advise the Government on the terms of reference for such an inquiry or panel. One problem that I have observed over the years is that terms of reference are often cobbled together at very short notice, at the last minute, and are not adequate to the task.
The IPA could also advise the Government on the sponsoring Department. I draw attention to the infected blood inquiry: the families were very concerned about the fact that the sponsoring Department was the Department of Health, which was implicated in many of the allegations. Indeed, I was asked by the families whether I would petition the Prime Minister to transfer the sponsorship of that inquiry from the Department of Health to the Cabinet Office, which Theresa May, when she was Prime Minister, did, to the satisfaction of the families. The IPA could also have a role in scrutinising whether lessons really have been learned from the inquest or inquiry, so that those lessons can be embedded across Government and prevent future tragedies.
Ken Sutton: It was crucial to the success of the Hillsborough Independent Panel in the task that the bishop has described that it was, and was seen to be, impartial and certainly not merely an advocate for the families. Had that not been the case, we would not have had the success in publishing the documents that were published, because we would not have had the trust of the public authorities in exercising that role. I think it is important to distinguish the role of the panel from the role of an independent public advocate, going forward.
There is one other point that I think is relevant. I had the privilege of consulting the Hillsborough families about the membership of the panel, but I was very conscious that I was doing that 20 years after Hillsborough. If we were talking about a similar disaster now, where an advocate was needed, that is not the conversation that would be relevant to the families at the time of the disaster. The Bill is in some danger of creating a conversation with families that is not the right conversation to have at the moment of bereavement. I worry that the well-intentioned idea of consulting the families about prospective advocates would be more damaging than helpful at that time, and that it is wrongly placed in the process.
That is why I agree with the bishop that the better option would be for the independent public advocate to be appointed in advance, so they can discuss with the families the help that they can bring, and be immediately available for that purpose. That does not rule out there being a panel of advocates; I can well see that the independent public advocate might want to bring in a panel, or advise on other panel members being appropriate. That might be relevant for reasons to do with skills, if there are other panel members, geography, or possibly the multiplicity of incidents, if there is more than one at the same time, which is conceivable in the terrorist context. There is some learning from the Hillsborough Independent Panel, but it is important to distinguish that what the panel did is not what the independent public advocate would be doing.
Maria Eagle
Q
Ken Sutton: Honestly, I do not think it is a matter of powers; I think the independent public advocate will have a voice. The importance for me is the authority of the person in taking forward this work. That person would have the authority, and maybe in legislation could be entitled to express a view on what form of inquiry should go on alongside their work.
If I put myself momentarily in the shoes of South Yorkshire police, I would not have wanted or welcomed the panel being created through an independent public advocate who is there, by definition, for the families. The decision on an inquiry has to be for the Government, but the independent public advocate, having talked with the families in the immediate aftermath, would be well placed to offer advice on the form that that inquiry should take.
The Chair
Could I just interrupt for a moment? We do not have a lot of time and we have quite long answers. Does anybody else want to ask a question? Would you mind if I interrupt, because I want to get other people in? Sir Oliver Heald and then Sarah Champion. Please can we have short answers?
Sir Oliver Heald (North East Hertfordshire) (Con)
Q
Ken Sutton: They are very different roles. It is welcome that the Government recently made it clear that the purpose of the independent public advocate is not to be the legal advocate for the families involved. I think the independent public advocate would have a role in making sure that the inquest or inquiry properly engages the families as participants. I am conscious of your remarks, Chair.
Sarah Champion (Rotherham) (Lab)
Q
Rt Rev James Jones: Could you specify what bit of part 2 you are referring to, in terms of needing more work?
Sarah Champion
No, because it is not in front of me. Do you think that the Bill would get you the independence that you want, and give the families a voice?
Rt Rev James Jones: At the risk of repeating myself, no, I do not. I think independence can be assured only by there being a standing public appointment.
Ken Sutton: I agree.
Janet Daby (Lewisham East) (Lab)
Q
Rt Rev James Jones: Yes, I think that there should be a duty of candour on all public officials. Anybody who accepts public office should bind themselves according to their own conscience to speak with candour and not to dissemble when called upon to give the truth and an account of what has happened. But I do not think that that is part of this Bill.
Janet Daby
It is not, but it could be included, so it is important to get your perspective. Ken?
Ken Sutton: The bishop referred to how the independent public advocate could urge the public authorities not only to adopt the charter, but to live by it. I think the influence of the independent public advocate would be to bring about more candour in the terrible circumstances that we are imagining, beyond what would otherwise be the default. Unfortunately, we have seen many examples where candour has not been apparent in those kinds of circumstances. The IPA could help to hold public authorities to a position of candour.
Siobhan Baillie (Stroud) (Con)
Q
Is it the proposal that a standing IPA would basically step aside once the specific IPA got involved? How do you see it all working in practice? That is what I cannot get my head around.
Ken Sutton: I certainly have not seen them standing completely aside. The independent public advocate would have an authority through that office that would be beneficial going forward.
Siobhan Baillie
It is basically doubling up.
Ken Sutton: But I can see that they might decide that, for a particular tragedy, an advocate with medical experience, let us say, would be appropriate. We were greatly aided on the Hillsborough panel by Dr Bill Kirkup, whose work was decisive to the outcome of the Hillsborough independent panel. I can see circumstances in which that kind of advocate could be brought on board when you know the nature of the so-called incident. But I do not see the independent public advocate washing their hands, as it were, of an incident going forward.
Siobhan Baillie
Bishop?
Rt Rev James Jones: If we look at Hillsborough, we see that it was the immediate aftermath that compounded the tragedy—the role of the emergency service, the police, the media, the coroner. Within 48 hours, a narrative was being shaped over which the bereaved and the survivors had no control whatever.
My concern about not having a standing IPA is that there would inevitably be a process in which the Lord Chancellor would then consult with his team to see whether or not they should set up an IPA. But even in that short space of time, a false narrative can be created. I feel that in that short space of time, too, the families, who are disorientated and traumatised, feel even more bereft.
The Chair
Q
Rt Rev James Jones: Just to say thank you very much for inviting us. We stand ready—we have made this point to the Government—to share out of our own experience information that would help to shape the IPA. The Government have put it on the record that they want to continue to consult, and the families themselves have much to contribute to this proposal.
The Chair
Thank you very much for speaking so clearly to us on a very difficult subject. We are very grateful.
Examination of Witness
Lord Wills gave evidence.
Maria Eagle
Q
Lord Wills: I thank the Committee for inviting me to give evidence today. Let me start with the good bits of the Bill. The Government have endorsed the concept of an independent public advocate and have seen through the promise they made in the 2017 Queen’s Speech. I am grateful for that, and grateful to all the Ministers and officials who contributed.
In my view, however, the Bill is flawed in two main areas. When the Justice Secretary introduced the Bill on Second Reading, he said that
“in order to deliver justice, victims must be treated not as mere spectators of the criminal justice system, but as core participants in it.”—[Official Report, 15 May 2023; Vol. 732, c. 583.]
Exactly right—but that is not what the proposals for the independent public advocate do. They do not give the families effective agency.
As I understand it, the Bill gives the Secretary of State unfettered powers to appoint an independent public advocate or not to do so, and unfettered powers to dismiss an independent public advocate. It also gives the Secretary of State sole right to require the independent public advocate to produce a report. As I understand the Government’s proposals, the independent public advocate will not have the right enjoyed by the independent reviewer of terrorism legislation, for example, to be an independent office that has the right to produce reports on its own initiative. In that way, the Bill does not fulfil the original intention of my Bill, which was to give bereaved families and surviving victims of public disasters effective agency.
Secondly, and crucially, the Bill does not give the independent public advocate the power to convene something like the Hillsborough independent panel, which after two public inquiries and, for the families, decades of campaigning was the first time that full transparency was achieved in finding out why Hillsborough happened, and what happened in the crucial hours and days after, when, as the bishop so rightly said, a false narrative was being created that was enormously distressing for the families, who were already suffering unimaginable grief.
Maria Eagle
Q
Lord Wills: I recognise that, as Ken Sutton said, in the end the Government have to have the final say. My original Bill denied them that. I can see the case for the Government having the ultimate say, but there is a halfway position between that and this Bill as drafted. This Bill could and should fetter the Secretary of State and the Government in such a way that they must, for example, have regard to the wishes of the families, to the public interest, to full transparency and so on. That would be quite a significant fetter on Executive power, and I would like to see it incorporated in this Bill. It would not give the families full agency, but that itself is complicated: there is a question of which families and how you define the families, which is for the detailed drafting of this Bill. It would give the Secretary of State some sort of discretion, but we have to go further than this Bill does in giving the families better agency.
Maria Eagle
Q
Lord Wills: It is important to remember that at the time the Hillsborough independent panel was established, there had already been two public inquiries chaired by distinguished judges, both of which were flawed in different ways and both of which had failed to prevent the false narrative that the bishop referred to—the cover-up by the police, the brutal commentary in some of the popular press—from taking root, causing enormous trauma for the bereaved families. What I was concerned about was making sure that finally, in any kind of panel and if any documents were to be released, the families should have full transparency. There were issues with that to do with data protection regulations. We thought we would get round them by putting the panel in the position of data controllers, so they would have the power to review all the relevant documentation and would then be able to publish their report. As it happened, they did publish a very large number of the documents they reviewed, although not all; a few were redacted. Crucially, I think the fact that the panel had seen everything gave the families confidence that they were getting something very, very close to the full transparency that they had been denied up until that point. That was a crucial lesson.
The other point that might be worth making is that setting up the Hillsborough independent panel, which is now seen as a great success due to the work of the bishop and Ken Sutton—indeed, all the panel—was not easy. Politicians and Ministers often have mixed motives, and while everyone was extremely sympathetic to the families, pretty much the entire Cabinet, for various reasons, was against my efforts to set up the panel in the way that I did. Fortunately, the one member of the Cabinet who did support me was the one who really mattered, and that was the Prime Minister.
Sir Oliver Heald
Q
Lord Wills: Yes, I believe it should be a standing appointment, for the reasons that the bishop set out extremely well. In the turmoil of the aftermath of a big public disaster, it is important that someone is on the ground immediately to support the families. I do believe that, and I think it is a perfectly achievable position to have. A secretariat could be drawn together at short notice—a standing secretariat, as it were. It would be doing work within the civil service, but when a public disaster happened it could be brought to bear to act as a secretariat for the independent public advocate.
I hate to think of what might happen. If you imagine a big terrorist incident, for example, the Government would be in turmoil anyway, and then they would have to find the time and space to go through all the selection processes, find out people’s availability and negotiate terms of reference. In the meantime, the poor families are left without anyone to support them, as they always have been up until now. It rather defeats the object of this whole exercise. So I am in favour of having a standing appointment.
As for who the independent public advocate should be, when I originally drafted my private Member’s Bill I had it in mind that it would almost certainly be a lawyer of some sort, and they would function in a similar but not identical way to the reviewer of terrorism legislation. In other words, they would be a distinguished lawyer with a lot of experience in these sorts of areas. Every public disaster is different and it would be very difficult to find someone who had expert knowledge in every possible area, but the broad parameters would be the same.
The main point would be to be able to guide the families through all the various processes that might be taking place, and above all to secure full transparency about what had happened and produce a report on it. As I say, I had it in mind that it would be a lawyer. They are usually extremely useful in these circumstances— I do not speak as a lawyer—but it is not impossible to imagine that it could be someone else with a similar sort of expertise.
Forgive me: there was another part to your question, but I have forgotten it.
Sir Oliver Heald
Q
Lord Wills: I do agree with that. That is one part of the Bill that is probably sensible. I can understand why it is in there and I can see possible conflicts of interest with professional lawyers, so I do agree.
Janet Daby
Q
Lord Wills: The prevention of a cover-up is essential in the wider interests of our democracy. People are losing faith in our democratic institutions. When they feel that Governments are covering up things that are crucial to them, they lose faith. In my view, that is worrying and dangerous. We have to do everything we can to protect against that, so anything we can do to raise the barriers against those sorts of cover-ups is crucial. That is why I would also support the introduction of a duty of candour.
We have to accept that a cover-up is part of the pathology of a big public disaster. It is human nature. When something happens like Hillsborough, the Manchester Arena bombing or Grenfell Tower, it is a huge story for the nation, and obviously those in power at the time, who feel they might be blamed for it, will feel that they have to cover up in some way. We saw what the police did with Hillsborough: they created a false narrative as part of that cloud of unknowing that they wanted to create, to cover up. What they feared, rightly in the end, was that they would be blamed for it.
That is true of pretty much every public disaster: obviously the details are different, but there is that essential pathology. There is always a risk of cover-up. I hope this Bill, suitably amended, will raise the barriers against that, but it does not mean that we can drop our vigilance against the potential.
Janet Daby
Q
Lord Wills: Again, the Secretary of State has too much unfettered discretion. I am not opposed to them having the ultimate responsibility, but you have identified there a very good example of giving the Secretary of State what, in my view, they should not have.
Sarah Champion
Q
Lord Wills: You have put your finger on the whole problem with the Bill—lots of powers to the Secretary of State and very few for the independent public advocate. There are various details of the Bill where the drafting could be improved.
I return to two main points. In some way, families have to be given effective agency, and that must mean some fettering of the powers on the Secretary of State. I am agnostic about the way to do that, and I have always accepted that my private Member’s Bill was not perfect. I am agnostic about how you fetter the Secretary of State, but something like ensuring that the Secretary of State “has regard to” the wishes of the bereaved and surviving victims would be a good start in making a way forward.
The other point, as I have said, is transparency, which I cannot stress enough. We have to get to the truth as quickly as possible. The Hillsborough Independent Panel did a magnificent job in a very short space of time, when it was inevitably more difficult, because 20 years had elapsed. Therefore, my view is that there has to be a presumption—not a requirement, because there has to be an element of discretion—in the statute in favour of an independent Hillsborough-type panel being set up. The important point is it is not adversarial. Big public inquiries very easily become adversarial; all sides have lawyers that argue and dispute, so that often a fog of dispute comes over these events. The Hillsborough Independent Panel had none of that. It was an impartial search for the truth. There must be a presumption in favour of a similar type of panel in all future public disasters. That should not be an absolute requirement, but there should be a presumption in favour of it.
The Chair
Thank you very much for your evidence, Lord Wills. That concludes this session.
Lord Wills: Thank you.
Examination of Witnesses
Nick Hurd and Tim Suter gave evidence.
The Chair
Our next witnesses are Nick Hurd, the independent adviser to the Prime Minister on Grenfell, and Tim Suter, a solicitor at the Manchester Arena inquiry and the Hillsborough inquest. Welcome, Nick; you are appearing via Zoom. Who wants to lead off the questions? Is it Maria again?
Maria Eagle
Q
Nick Hurd: Thank you for the welcome, Chair, and thank you for the question, Ms Eagle. Every disaster has its own specific context. I will take a minute to clarify my role in Grenfell and how it came about before answering your question.
The specific context of the Grenfell disaster was that, at the time, I was Minister for Policing and the Fire Service. I had some involvement in the co-ordination of the response in the aftermath, which was inadequate. The combination of the disaster and the response resulted in a situation in which there was zero trust—negative trust—between the communities affected and the state in the form of both the local authority, which many blamed for the disaster, and the national Government, which many blamed for the inadequate response to the disaster. I was asked by the then Prime Minister, Theresa May, to play a special role. It might have had some parallels with the role that Tessa Jowell played in a different context, that of 7/7. My role was to build a bridge of communication between the communities affected—the bereaved, survivors and residents close to the tower—and the state, in particular the central Government, who were more involved in the aftermath than they had expected to be. That was the specific context: I was not an independent advocate, but a Minister trying to build bridges of trust and communication.
To answer your question, I think that the central point is the one that Michael Wills made. The central difficulty that I faced was the lack of trust that the community felt and their lack of agency. In the specific context of Grenfell, many felt that they were victims of the state, and they found it difficult to believe that the state had an interest in supporting them or that they had any agency or voice in that process. In hindsight, that was one of the biggest challenges that we faced. I support the emphasis that Michael Wills put on it.
Maria Eagle
Q
Nick Hurd: If set up in the right way and with the right individual, the role could be very valuable in helping families to believe that there is someone on their side, given that of course they do not understand the system—why should they?—and feel that it is not listening to them and is not on their side. In principle, I am supportive.
I would enter a caveat around expectation, however. To the point that I think you were making, sometimes it takes a long time to get to the truth and to justice, which is the word that is used in the Grenfell context; “accountability” is a softer word. That process takes time. In the case of Grenfell, the public inquiry is generally extremely well regarded for the rigour of its processes and how it is led, but it is inevitably going to take quite a long time to get to the point of ultimate truth and accountability. I doubt that there is very much that an independent public advocate can do to speed up the process in the context of formal public inquiries and inquests. I would have a concern about expectation management and about how the thing is set up in a way that the system is required to respond to an independent public advocate.
Maria Eagle
Q
Tim Suter: Thank you for the question, and thank you to the Committee for inviting me along today. Let me just give you some context about my experience. I am a solicitor, and for the last 15 years I have helped those conducting inquests, inquiries and investigations. You referred to the new inquest into the Hillsborough disaster; I was the solicitor to that, and I am the current solicitor to the Manchester Arena inquiry. I also assisted the inquests into the Birmingham pub bombings and the 7/7 inquests. Through those and other investigations, I have had lots of experience and exposure to the difficult issues that those cases have to investigate, but also to the bereavement and anguish that those who are at the heart of those investigations go through. It is clear to me that the role of an IPA is very valuable. To be frank, I think there is some confusion in the Bill about the role that the IPA could and should fulfil, but at its core I fully support the need for an IPA.
As people gave their evidence, I jotted down words that absolutely ring true for me—references to “anguish”, “impotence”, “distrust”, “patronising” and “lack of access to power”. I have experienced all those things. On the flip side, there was talk of “agency”, “voice”, “empathy”, “the truth” and “compassion”. At its heart, that is the purpose of an inquisitorial process such as an inquest or inquiry. If the IPA can help with that in the right way, I think it is absolutely right.
Maria Eagle
Q
Tim Suter: I think the bishop summarised it very well in referring to a standing IPA. In my mind, I have characterised it as a standing office—the office of the IPA—whereby there is almost a chief IPA who is appointed. That would be a process that happens as soon as the Bill receives Royal Assent. It would be properly resourced; or it may not be resourced, but it should be absolutely firm that the resources for the chief IPA to fulfil their job are available. I think they should have the power to appoint IPAs in the light of a particular disaster. They may or may not be involved themselves; it depends on the nature of the disaster.
There are some issues in the Bill as well about the terms of appointment and the resignation of the IPA. I did not really understand why that is there. It needs to be much more forceful and brought almost into line with how the 2005 Act is framed, which is much clearer about the appointment process and the need for that appointment only to be terminated in very particular circumstances.
I have some questions—perhaps points of granularity—about how an IPA is going to advocate on behalf of those under 18. For the Manchester Arena inquiry, many of those affected were under 18. No one should be excluded just because of age from the vital work that an IPA would do. For me, that came across as needing a little bit more work and analysis. There was an intriguing reference to “no immunity” in the Bill as well, which I thought seemed a little out of kilter—perhaps I just do not know the detail. Why does the Bill refer directly to the IPA having no immunity? Then you go through to the process of reporting; as far as I can see, a report is not necessarily laid before Parliament, where it would get the protection of parliamentary privilege. All of felt that it needed to be reviewed with a little bit more scrutiny.
Sir Oliver Heald
Having a standing appointment or an office would mean that you could have speedy action. I was asking the previous witnesses whether they thought the role should be an impartial one, as the Hillsborough panel inquiry was. What sort of skills and qualifications should the person have? Do you agree that that person should not be able to undertake legal activity? For example, at an inquest, they would be an interested party and could be represented, but they would not be doing the representation themselves.
Nick Hurd: Oliver, good to see you. I have not thought it about very deeply.
Sir Oliver Heald
I have just one more question, Chair, which will be very quick. Please go on, Mr Hurd.
Nick Hurd: I am quite attracted to the idea of a standing body because I think it can begin to accumulate knowledge, experience and insight into what is required in these situations. The Government system struggles with that, not least with people moving on. I am attracted in principle to the idea of a standing body and my instinct, like yours, is that the person leading that should not be engaged in legal activity. That would be my instinct as well.
Tim Suter: I find the point about impartiality quite difficult because I think the role of the IPA is, in its very nature, to assist the victims of that disaster. I am not sure you can do that if you are properly going to be impartial. I have a question: they must be independent of Government, but I question whether that is different from the impartiality point. They should be able to really advocate on behalf of the particular victims.
There is also a question about how disaster is always, by its very nature, complex. There will be different types of victim—those who are bereaved, those who have suffered physical harm, those who have suffered mental harm. They will all have different needs from the IPA, which leads you through to the question about perhaps needing a number of IPAs and how that duty of impartiality would work across all of them. That gets quite complex.
As for skills, I would say this, but I think you probably have to have a lawyer. That may be something that everyone has a different view on. In terms of not undertaking legal work, I strongly agree with that. We may get on to it, but I do not think that they should be an interested person in an inquest, because there is a real risk of duplication and confusion. Provided that a bereaved family has access to a lawyer and that lawyer is properly funded so there is equality of arms, they should be the person who is standing up and advocating on behalf of a family in an inquest, not the IPA.
Sir Oliver Heald
Q
Tim Suter: No.
Sir Oliver Heald
Q
Tim Suter: Yes, I think the change was happening before Hillsborough. The 7/7 inquests were actually the process that introduced pen portraits—the memorialisation of the deceased—and the opportunity to say, “This was my loved one, and this was who they were as a person.”
Sir Oliver Heald
Q
Tim Suter: That was Dame Heather Hallett. That actually came from an inquiry into an air crash in Canada, so taking learning internationally is really important. Hillsborough was a journey—it has been a very long journey—where I have had the privilege to take a small part, but yes, it did give a voice to families. It undoubtedly could have done more; any process can always do more. That is why I would support the role of the IPA to be able to report on the experiences of victims in these processes, because I think being able to be held to account for the process you have been involved in has to be of real value. You need to ensure that there is still judicial independence in that process, and not going behind the decisions reached, but I think it is absolutely understanding the experience of those. The Hillsborough inquests were a very important part of that.
The Chair
We have three more people. We have Janet Daby, then Sarah Champion, then Jess Phillips.
Janet Daby
Q
Tim Suter: I do not know all the ins and outs of the legal aid regime. For a public inquiry, section 40 allows the chair to make the provision for lawyers—for legal representation—at public expense. In that sense, there is already the ability to grant funding. For inquests, I absolutely agree that it goes to equality of arms, and that there must be the ability for bereaved families to be properly legally represented. It makes my job harder, sometimes, but that is a thoroughly good thing—that I can be asked, “Why are you advising the chair or the coroner to take this view? Have you taken this into account?” Having that makes it a proper inquisitorial process—a search for the truth—so yes, I agree.
Janet Daby
Q
Nick Hurd: Yes, I do. It came up in the Grenfell context. You will understand that what I call the system tends to try to stay rational in these situations and try to respect their processes and structures, but in my experience in these seismic moments it is better to be decisive, up front and generous and just show that you are on their side with a decisive offer such as that.
Janet Daby
Q
Nick Hurd: I have discussed this with the bishop. I am, again, in favour in principle of the duty of candour.
Janet Daby
Wonderful. Tim?
Tim Suter: The duty of candour obviously makes sense. I would just urge some caution in terms of the process of, the role of, the IPA for getting access to material, if that is a duty that is brought in. I think there is a risk of duplication of effort and added complexity if the IPA is to have the role of gathering and holding material. I think it should have the ability to direct public authorities to retain material, but I do not think it should go further. I think there might also need to be a check in the Bill about the role of FOIA, the Freedom of Information Act, because for the 2005 Act, an inquiry is not a public authority that is subject to FOIA. Here, I think that does not necessarily carry across, so that probably needs to be looked at.
Janet Daby
Q
Tim Suter: I think the organisation should retain it, because there will be materials that are subject to legal professional privilege and materials that are subject or potentially subject to public interest immunity; there will be other confidences attaching to materials. Embarking on a process of redaction of that material by the IPA—when, gosh, you are in the foothills of what is going to be a very long process, I suspect—will take the IPA away from its key job of advocating on behalf of the families to make sure they get access to services. So I would urge caution.
The Chair
I had better go to Jess now, because she has not had a question, and then Sarah.
Jess Phillips
Q
Nick Hurd: I would have genuine concerns about that, fully respecting the need for speed and decisiveness. There need to be systems in place so that not least those affected by the disaster at that moment in time have some confidence in the integrity of the process, because ultimately, the individual who is appointed to that role has a very short window of opportunity to build trust. People will form a view very quickly about whether they are useful, so the recruitment is critical and I would think the system would be well advised to build in processes that increase the chances of trust from early doors.
Tim Suter: I agree wholeheartedly with that. I wrote down four words: speed, trust, confidence and independence.
Jess Phillips
Q
Tim Suter: Absolutely. In saying that a lawyer can do it, I completely agree with you. That is actually something I have seen improve remarkably through the course of the cases that I have been involved in—to the extent that for the Manchester Arena inquiry, there was something called the NHS resilience hub and it was fantastic. It was able to guide, support and assist the bereaved and victims. On the need for victim support and people who have specialist skills, I absolutely agree there is a role for that within the IPA.
Sarah Champion
Q
Tim Suter: Sorry, I used my shorthand for the Inquiries Act 2005: section 1—matter of public concern, set up inquiry.
Sarah Champion
Q
Tim Suter: I only looked at it quickly, but I just thought that it is almost saying that the IPA, through another support agency, can give you the voice of that child, or that person who is under 18, but it is not representing. I do not know where representing features in terms of the IPA.
Sarah Champion
Q
Tim Suter: I would like the IPA to be able to directly represent, subject to parental consent, someone who is under 18. It is just as important for those under 18, if they want to, to have that agency through the IPA. I think there is a real risk it gets lost.
On the Manchester Arena inquiry, we had a number of people under 18 giving evidence and they expressed the impact of the bombing on them so well, so clearly and so powerfully, and there is a real risk of creating a lacuna.
Sarah Champion
Q
Tim Suter: I just think that there is a risk that they will not be able to access services in the same way and I think we all realise that those under 18 may have a need for very specialist services. So, just making sure that it is absolutely crystal clear that the IPA can help those victims under 18 to access the services that are more specialist is going to be important.
The Chair
If there are no further questions, that concludes this evidence session. Thank you very much, gentlemen.
Examination of Witnesses
Ruth Davison and Ellen Miller gave evidence.
The Chair
We will now hear evidence from Ruth Davison, chief executive of Refuge, and from Ellen Miller, interim CEO of SafeLives. Ms Miller, thank you very much for coming; I know there was a problem on Tuesday, so thank you for coming in person.
Jess Phillips
Q
First and foremost I suppose, could you could give a brief assessment of whether you think what is currently in the Bill will make a big difference to the victims that you support—victims of domestic violence and, in lots of cases, sexual violence?
Ruth Davison: Speaking as Refuge, we are obviously the largest provider of specialist services to women who are experiencing gender-based violence, particularly domestic abuse. We absolutely support the intention of this Bill and its founding principles: to give greater voice and power to victims. Unfortunately, however, as it stands, my best description of it is a missed opportunity. Without any funding attached, we do not see any opportunity for the transformational change that these women desperately, desperately need.
To give you some sense of scale, still one in four women in this country will experience domestic abuse in their lifetime. It is one of the most heinous and prolific crimes that we have in this country, yet when we are calling for full funding of community-based services, which is only estimated at £238 million a year by the Women’s Aid Federation, we are not seeing any traction on that.
So, while it is great that there is a duty to collaborate and it is very positive that statutory bodies come together and look holistically at the needs of victims, without a corresponding duty to fund, I am afraid we do not think it will make any difference to the women we are supporting, the vast majority of whom do not report to the police anyway, because confidence in the police and criminal justice system is so low and retraumatisation is so high, as you try to work through that process, that they are not really included in the scope, even though they are covered by the technical definition.
Jess Phillips
Q
Ruth Davison: Absolutely. I understand that the victims code focuses on criminal justice practitioners, but I would absolutely enshrine not just four overarching principles but the specifics of the code in the law. We met some survivors, here, two days ago. One of the panel asked them whether they knew what the code was. Only one woman in that room knew what the code was, never mind knew how to uphold and access her rights. They absolutely need to be listed in the Bill and they need to be legally enforceable as a last resort.
Jess Phillips
Q
Ruth Davison: Absolutely, I do. Victims who are experiencing domestic abuse, through no fault of their own, are suddenly having to navigate housing, the family courts and social services, as well as the criminal justice and policing system. There is no tied-up approach and yet we know that so much trauma and so much post-separation abuse is perpetrated in the family courts at the moment.
Jess Phillips
Q
Ellen Miller: Thank you; I am real! It is a shame the link does not reach as far as Blackpool, but never mind.
I will focus in on two things. We would much rather have this Bill than not. There are two things I would focus on. The first is duties. The second is teeth.
I spent 20 years in local government. I would liken putting in a duty to collaborate to when somebody puts in a planning application, send an email to the Environment Agency and, three months later, it sends one back saying, “No, we haven’t got any record of protected newts.” Any duty that you can effectively discharge by email, you might as well not bother putting in. That is what we have at the moment. If I may politely do so, I would suggest that, instead, we look at a duty to listen—to listen to survivors and hear what their lives are like, and to see them as real people.
Secondly, we should look at a duty to acknowledge the level of need. You have heard about the joint strategic needs assessment. That exists in so many other fields of the social sector and social change work; why can we not have that for victims and survivors of domestic abuse?
Thirdly, there is the duty to act. When I say that, I do not just mean the duty to act on people who come to the police force at a moment of crisis, which is the majority of people for whom there is funding at the moment. We have to have that, but at the moment the system we have is a bit like having an NHS that is just A&E. We are never going to solve the systemic issues around domestic abuse unless we have a duty to not just immediately protect, but to prevent and ensure recovery, and to allow people to have the lives they should have the right to.
I would put those duties in the Bill, if you want to take my advice on it.
Jess Phillips
Oh, I will.
Ellen Miller: The other area is teeth. I have worked in the field of victims for a long time. I have seen so many atrocious things that are not in line with the victims code of practice. The code of practice is great, if only it happened. A screen when you go into court that is 4 foot high—that is not protecting a witness. Giving them a fold-out leaflet in English—that is not telling somebody what their rights are. This just does not happen. Please, let’s have some teeth. Let’s have some accountability around this. Let’s recognise the rights that should be there.
Jess Phillips
Q
Ellen Miller: Absolutely, and that is why I really wanted to come down, apart from the duties point. There was a history; there was initially funding for the equivalent of A&E-type stuff. In order to make that credible, the IDVA role was set up. In the past, the IDVA has been associated very much with only doing those really high-risk cases.
Let us deconstruct what an IDVA is. An IDVA is somebody who has gone through a 12-day training programme. This is not a master’s degree or an impossible bar; it is a really basic level of minimum threshold that you should get to. Everybody who works in domestic abuse should have the right to that level of training. We expect it in the care sector—we expect care workers to know how to safely manage cases, to report safeguarding, and to understand the dynamics of power and control within the care setting. We expect that in care. We should expect that in domestic abuse.
To us, the biggest provider of IDVAs, it is a programme of knowledge—a starting point. It does not give you cultural competence, which you have if you are a “by and for” organisation. It does not give you in-depth knowledge around things like non-fatal strangulation, honour-based violence and so on. It is your basic core concepts. It gives a bit more power and respect to individuals who do not have parity with the police officer, the psychiatrist and the social worker—it gives them a status. I wish it was not the case that you need a badge to be respected and listened to, but on the other hand it gives the credibility of a level of basic knowledge. To me, it is about a set of learning, so it is therefore useful, but it is only a starting point.
Ruth Davison: I would build on that, and echo what the Domestic Abuse Commissioner said to the Committee on Tuesday, which is to look at and value all the community outreach roles. When we are in the context of an absolute drought of funding, there is a potential unintended consequence of elevating the IDVA and ISVA roles over and above other roles that are equally skilled and vital—as Ellen said, particularly those roles that focus on cultural competencies and serve the “by and for” community. There is a real concern from us as a sector that we could unintentionally, by elevating one role, make it even harder to access funding for those culturally specific roles in the “by and for” services, which are already six times less likely to receive statutory funding.
Siobhan Baillie
Q
Ellen Miller: I would look at enforcement through the inspection and reporting regime. First, we must ensure that there is a Victims’ Commissioner and a Domestic Abuse Commissioner, and that they have the right to be very public and open. Ruth will have done this, and we have done this: when you have data and look at the differences in the level of funding, it is absolutely shocking and it is not reported. Some things that, for example, the victims grant gets spent on are just jaw-dropping. There is not that level of accountability. Accountability comes through inspections, the roles of the independent commissioners and reporting—and the right to properly kick-off in a way that will actually lead to something. There needs to be the equivalent health and care ombudsman: a proper complaints process.
Ruth Davison: I agree with what Ellen is saying. It comes back to putting the four overarching principles into the Bill. We have already seen reports saying, “That won’t go far enough. It won’t lead to the cultural change that is so necessary if victims are actually to be able to access those rights—not for those rights to just exist on a piece of paper that they may or may not be able to read even if they receive it, but to be acting throughout the whole process.”
Missing from the Bill as a whole is a recognition of how far there is to go in terms of tackling culture. The fundamental understanding of domestic abuse and of many of the crimes that are faced by women in this country is missing. We are calling for mandatory training for police forces, which would lead to the kind of enforcement and teeth that Ellen is talking about.
Sarah Champion
Q
Ruth Davison: No, it is not enough. You were there at the event, so you heard women saying, “What is this?” If they do not know what it is, it is not being upheld at the moment. We do not think that reasonable steps to raise awareness and make people aware of the code is adequate. Making it enforceable gives it teeth. I feel like I am repeating what Ellen is saying, but we need to go further.
These are women who are in a period of crisis in their lives. They may be being forced to flee their home with their children in the middle of the night, leaving friends, family, pets, and toys behind. They are dealing with all these institutions through no fault of their own. Those institutions need to have very clear and holistic approaches to their support. That is what is done on the frontline of community-based services, whether or not they enter the criminal justice system, report to the police and have their case dismissed due to lack of evidence, or endure the re-traumatisation of testifying again and again in the family court or in the legal case. Recognising that holistic support is essential, and embedding that in the Bill through the victims code being enforceable feels like a critical part of it, alongside the funding I am calling for.
Sarah Champion
Q
Ruth Davison: If they do, I do not think they are communicating it—so, no. I still think we find absolutely shocking responses from frontline policing, and at the moment obviously the level of police-perpetrated domestic abuse and sexual offences coming to light is only deterring people further from reporting to the police. The first place that many of them come—the frontline—is the national domestic abuse helpline or their local frontline community service, not the police. That needs to change, because police need to understand the dynamics of domestic abuse. I often say that if I spotted a suspicious package on the bus on my way here and I phoned it in, no one would say, “But what are you wearing and why were you on that bus on your own at that time of the day? Had you been drinking?” People would say, “Tell us where the package is,” and they would deal with the package, not start to interrogate me as if I were the criminal.
Far too many victims are unfortunately still receiving victim-blaming language and feeling as if they are criminalised themselves when they come forward. That is even before you get to the points made very well by Southall Black Sisters on Tuesday about the absolutely desperate need for a firewall to separate statutory services from immigration services, because women thinking they could be criminalised or lose their right to stay in this country is another massive deterrent to them feeling safe to come forward.
Ellen Miller: Can I add to that? There should also be a firewall to separate independent support for victims from the statutory organisations that have so often let down these individuals. That is why people are not going to the police. People are worried that their children will be taken away from them. They are worried about getting the father of their child in huge amounts of trouble. They are worried about what it might mean to them—they may not speak English in a particularly strong way, but have had it explained and know their rights. They may feel they do not have any chance of having their rights realised. Independence really matters, and that is something that is absolutely not universal in the support for victims. It is very hard, in some places, to get independent support. We see that in care: we have the independent health advocate, which is again written into the Care Act, but we do not have that provision for survivors of domestic abuse. That is a legislative issue.
Sarah Champion
Q
Ruth Davison: Maybe this comes back to understanding the dynamics of domestic abuse. An abuser will isolate you, gaslight you, tell you no one will believe you and cut off your routes to support. Something we hear time and again from survivors who come to us—survivors who phone the helpline and come to community-based services—is the unbelievable relief of someone believing you, having some empathy, listening to you and treating you like a human being. Obviously, there is then all the practical guidance that the independent advocates are able to give, but not having anywhere to speak and being silenced through these processes that are highly traumatic is dangerous for women, dangerous for their mental health, dangerous for their children and dangerous for their recoveries. Having a safe space in counselling as well as with your independent advocate in a community-based service is absolutely critical. That should not be automatically accessible by the police—who we know unfortunately have a whole habit of using that against you and looking into your past, rather than the past and motivations of the perpetrator. A firewall is absolutely essential if we to start to see confidence rebuild.
Ellen Miller: There is something about what this crime is, as well. Intimate violence does the most awful, traumatic things to your brain, and it gives you the hugest impacts that will stay with you for a lifetime. I myself have survived sexual violence—35 years ago, briefly, in an attack. That stays with me forever. The gap between that happening then and going forward to a case and prosecution—what that did to me. I have worked with survivors of sexual and domestic abuse and violence. How can we leave people—women, mothers, fathers—without someone to help them sort that out? They have been severely damaged by what has happened to them, and it feels to me callous and appalling that we then have ISVAs who have to say, “Well, I know you really, really need support, but the choice is you can have support or you can have justice.” That is just not okay.
Siobhan Baillie
Q
The Chair
Very short answer.
Ruth Davison: The default should be non-disclosure, but a judge decision, yes—not an outright ban. Hopefully that was quick enough.
Janet Daby
Q
The Chair
Very quick answer.
Ruth Davison: Very briefly, at the moment women who have no recourse to public funds are completely locked out of any provision. We would like to see that change, and that has been costed by Imkaan. We would also like to see that there is more funding and more support for the “by and for” services, which is where our slight concern around definitions of IDVA and ISVA would come in—
The Chair
Order. Thank you very much for taking the trouble to come in person. I know you have come a long way, but it is a lot better when people come in person. Thank you so much.
Ordered, That further consideration be now adjourned. —(Fay Jones.)
Digital Markets, Competition and Consumers Bill (Seventh sitting)
Thursday 22nd June 2023
(1 year, 6 months ago)
Public Bill CommitteesRead Full debate Digital Markets, Competition and Consumers Act 2024 View all Digital Markets, Competition and Consumers Act 2024 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 22 June 2023 - (22 Jun 2023)
The Chair
Before we begin, I have a few reminders: please switch electronic devices to silent, no food or drinks apart from the water provided, and please send speaking notes to hansardnotes@parliament.uk.
Clause 44
Power to make pro-competition interventions
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Government amendment 12.
Clauses 45 to 54 stand part.
The Parliamentary Under-Secretary of State for Science, Innovation and Technology (Paul Scully)
To create self-sustaining and dynamic competition in UK digital markets, we must address the sources of SMS—strategic market status— firms’ substantial and entrenched power in digital markets. Clause 44 gives the digital markets unit the power to address competition problems in digital markets through pro-competition interventions, which the DMU can make where factors relating to a digital activity undertaken by a SMS firm prevent, restrict or distort competition in that digital activity. That is known as an adverse effect on competition. The concept is already used for market investigations under the Competition and Markets Authority’s existing markets regime. Government amendment 12 is a technical amendment relating to PCI investigations.
Turning to clauses 45 to 54, PCIs are fundamental to the new digital markets regime. They will address the root causes of market power that can lead to one or two large firms dominating, to the detriment of consumers and businesses in the UK. Clause 45 empowers the DMU to open a PCI investigation into suspected competition problems related to designated digital activities.
Clause 46 describes the process relating to PCI investigations. Under clause 47, the DMU will be required to carry out a public consultation on a proposed PCI decision before concluding its investigation and giving notice of final PCI decisions. Clause 48 provides the procedure for the DMU to give notice of its decision when concluding a PCI investigation. When the DMU decides to make a PCI, it must do so within four months of the PCI decision.
Pro-competition orders, set out in clause 49, are the means by which the DMU can require a firm to take, or refrain from taking, specific actions. That includes orders on a trial basis. They are vital in converting the DMU’s PCI decision, from clause 48, into an operationable remedy.
To effectively address the sources of competition problems in digital markets, PCIs should be iterative and targeted, so the DMU will be able to replace pro-competition orders. That is provided for in clause 50, which will allow the DMU to initially apply lighter touch remedies and then assess their effectiveness before introducing stronger measures if necessary.
Clause 51 gives the DMU the power to revoke a pro-competition order where it deems it inappropriate to vary the order through replacement, or where the order has addressed the competition problem and is no longer required. That ensures that PCIs remain effective and proportionate and can respond to changes in the market.
Clause 52 provides that before making or revoking a pro-competition order, the DMU must carry out a public consultation. The DMU will be under both a general and specific duty to monitor and review pro-competition orders provided for in clause 53.
Finally, SMS firms should be able to offer commitments to the DMU to propose a solution to a competition problem. That supports a participative approach to regulation, which is set out in clause 54.
Alex Davies-Jones (Pontypridd) (Lab)
We will of course look properly at the issue of consumer protections later in the Bill, and my hon. Friend the Member for Feltham and Heston has a number of contributions to add on that topic.
Clause 44 is important in putting consumer rights at the heart of the Bill, as it enables the CMA to remedy competition problems by making direct interventions. In contrast to conduct requirements, PCIs are interventions by the CMA to remedy an adverse effect on competition by addressing the root causes of an undertaking’s entrenched market power. The CMA will need to take into account the benefits that UK users may get from the factors having an adverse effect on competition.
We note that there is no defined list of PCI remedies, but that they may include behavioural and structural remedies. Will the Minister update us on his assessment of the value of adding a list of potential remedies to the Bill? Some companies we have spoken to feel that that would be helpful to understand just how these interventions will work in practice. However, we believe that the PCI is an exceptionally useful tool and a big advantage over the EU Digital Markets Act, as it will be able to go further than the conduct requirements and address the root causes of entrenched market power.
As it stands, the Bill outlines that the CMA may make a PCI where it considers that a factor or combination of factors relating to a relevant digital activity is having an adverse effect on competition, also known as the AEC test. The AEC test is in line with the legal test in the existing market investigation regime; by contrast, the digital markets taskforce recommended an AECC test—an adverse effect on competition or consumers test—enabling the CMA to address consumer harm without always needing to show that competition has been undermined. Similar to a supplementary duty to have regard for the interests of citizens, that would give the DMU broader scope to intervene beyond its traditional focus on competition. Can the Minister outline exactly why the AEC test was chosen over the AECC test?
Labour supports the intention behind Government amendment 12, which confirms that the CMA will be able to begin a PCI investigation into a designated firm, even when it has previously made a decision not to do so. We see that as integral to the CMA’s powers, and we will support the amendment.
We see clause 45 as fleshing out the legal powers that the CMA will need to draw on in the event of a formal investigation. We welcome clarification that the CMA will form its initial view of the competition problem on the basis of available evidence, such as that arising from complaints submitted by third parties, from the CMA’s market studies or from referrals of information from other regulators. Labour has heard from some tech companies that although pro-competition interventions are viewed as a major advantage of the UK’s regime, companies are concerned about the broader effects they could have on markets, and urge for thorough consultation and for a graduated approach to the potential severity of the intervention. I am therefore keen to hear the Minister’s thoughts about this issue, as it is important for all concerned that we get some clarity.
Clause 46 is an important clause for designated undertakings that may find themselves subject to a PCI investigation. We welcome provisions that ensure the CMA will be under a duty to publish a summary of the PCI notice as soon as it is able to do so. The Minister will not be surprised that we are keen to understand more about that and what it will look like in practice. Where exactly will the summary be published? Will it be made available to others who wish to view it? We welcome subsection (2), because it is important that the CMA has the power to update a PCI investigation notice when it needs to do so. That is outlined in subsection (3), which is an important point to note.
Lastly, clause 46(4) places a duty on the CMA to publish a notice of investigation as soon as practicable. Again, can the Minister confirm whether that will be public? There is a theme in my questions to the Minister about the public transparency of such documents. Naturally, we understand that some information will obviously need to be redacted, but there is plenty of value in improving transparency.
We welcome the principles in clause 47, which we have long called for, because the regime will be effective only if consultation is truly at its heart. However, we have concerns about how the conduct requirements and PCIs will run alongside one another. In the Bill’s current drafting, it is unclear by what metrics the CMA will determine whether a CR or PCI is appropriate, and it will have discretion to choose. We could very well find ourselves in a position whereby the CMA will generally implement a CR first and see whether it is having an impact, before beginning a PCI investigation. If the CMA chooses to focus on CRs initially, it could allow SMS firms to maintain much of their entrenched market power before taking action. To improve the effectiveness of the regime, one potential option that has been raised with us is for the CMA to be required to consider whether a PCI investigation and PCI remedy may be more effective early on, or complementary to a CR, when constructing a CR. I would be grateful if the Minister could give us some thoughts on that and explain whether he will be able to instruct the CMA on which one would be best to carry out first.
Other issues that have been raised with us relate to clarity on a number of points, and I hope the Minister can provide that clarity. First, can PCIs be introduced only after conduct requirements have been imposed, rather than the alternative that is alongside them? Secondly, what is the exact purpose of the revocation process? Does it mean that PCIs cannot be adapted while they are in effect, as indicated in the Government’s consultation process, and that the CMA would have to restart the process—meaning there would be an investigation, a consultation, a decision and then an order—before introducing a new PCI? It feels like that could cause delay and uncertainty in the regime, which could ultimately impact its effectiveness. I look forward to hearing the Minister’s thoughts on those specific points.
Labour sees clause 48 as fairly standard in outlining the procedure for concluding a PCI investigation. It is important that the process is outlined on the face of the Bill, and we welcome confirmation of the length and period of investigation, and of the period in which the CMA has to consult and issue a pro-competition order where required. Those are important timeframes, which Labour supports.
We note clause 48(7), which states:
“As soon as reasonably practicable after giving a notice under subsection (1) or (6), the CMA must publish a copy of the notice.”
Again, that is a key point that I want to prod the Minister on. What is his assessment of
“as soon as reasonably practicable”?
What will that be and who will the CMA be publishing the statement for?
We welcome clause 49, which outlines the way in which pro-competition orders will work in practice. In relation to clause 50, I would be grateful if the Minister could confirm whether the replacement of a PCI as outlined in the clause will require revocation, as set out in clause 51, and a fresh process involving an investigation, consultation, decision and order? Alternatively, will the process be to revise an existing PCI and will that be sped up? We do not want any delay in that happening. That is the point I am trying to make, so will the Minister elaborate on what evidence is needed to justify a revocation of that kind?
I hope the Minister will respond to my points. We support the broad intentions of the remaining clauses in this group and are therefore happy to support their full inclusion in the Bill.
The Chair
Order. I am a bear of little brain. If somebody does not stand, I do not know that they want to speak.
Seema Malhotra
I just wanted to make a general point in relation to the DMU’s powers, because they are wider and there is a question about mechanisms to address the scrutiny and accountability of DMU decisions. We support the PCI framework and the flexibility, but on the way in which decisions can be made about PCI notices, the changes to allow greater flexibility and changes to orders made, there is the potential for a lot more flexibility, but there is the balance of certainty and scrutiny. Can the Minister address how there will be greater opportunity for scrutiny, transparency and accountability over the DMU’s use of the greater powers?
Paul Scully
I will try to cover as many of those points as I can. On the difference between AEC and AECC and adverse effects on consumers and competition, that is effectively built into the regime, anyway. The DMU’s objective is to promote competition for the benefit of consumers, and that must shape the design of all its regulatory interventions, including for PCIs. Under the current drafting, the DMU is able to address the detrimental effects of a competition problem on consumers. The issue is terminology rather than anything else.
The hon. Lady asked about how PCIs will be published. They can be introduced after CR and can be published alongside them, because speed is important, which it is important to highlight. She also asked about where PCIs will be published, which I can summarise. A PCI notice launches an investigation and a summary of that will be published, with the firm having had the full notice.
Seema Malhotra
Will the Minister confirm how soon that will happen? There is a four-month timeline after that full consultation and then the pro-competition orders or alternatives. In terms of the public—
Paul Scully
That is a fair point. The best I can say is as soon as is practicable. I talked about the fact that speed is important, but it really depends on the complexity of the case and what needs to be in the summary, how quickly it will take to summarise and so on. There is a drive to get on with this as quickly as possible. The theme throughout the entire framework of the Bill is that detriment happens at speed in digital markets and we have to crack on and get those PCIs in place should they be required.
The decision notices for PCIs will go to the firm first. The full document will be published and an order will be introduced. A summary will be published. Should the PCI be replaced, an order revoked or should there be an acceptance of varying commitments on a PCI, the full document will be published.
The CMA can consult on an order as part of the earlier PCI decision, so the four months may not be necessary. Those timetables are there as a maximum, depending on the complexities.
Seema Malhotra
I would like to pick up on the point about pro-competition orders and the consultation. Clause 49(4) states:
“The provision that may be made in reliance on subsection (3) includes provision requiring an undertaking to act differently in respect of different users or customers (and such provision may be by reference to a description of users or customers, to absolute numbers of users or customers, or to a proportion of the undertaking’s total number of users or customers).”
That appears both broad and specific. Interested parties may want clarity, so is it expected that that detail will be discussed and consulted on?
Paul Scully
The way that consultation is done depends. If there is something starkly obvious to everyone, it may be that only minimal consultation is needed. If it is more technical, it will need to be more in depth, which is why we are not being prescriptive from the centre. It is up to the DMU to consider this.
The hon. Lady also asked about a list of PCIs and potential PCIs. It is very much for the DMU to address the recourse to a designated firm’s market dominance. Examples of PCIs that could be introduced include choice remedies that will allow users to make an active choice in the digital services that they use. PCIs could, for example, compel a designated firm to present users with different options for their preferred web browser, and we heard evidence on that from Gener8. Instead of defaulting to a particular browser, PCIs could include interoperability remedies that will enable users to use goods and services from different providers as opposed to being locked into one provider. For example, the DMU might require users of different instant messaging services to be able to communicate with one another.
The DMU could introduce data portability remedies, which would make it easier for users to switch providers. Such remedies could, for example, require a designated firm to make it possible for its users to download and export data to a new phone with a different operating system. PCIs could include data access remedies, which would level the playing field by requiring designated firms to share their data with competitors, which could include the data that large search engines have on users’ search history. Separation remedies would require designated firms to run different aspects of their businesses independently, so that dominant firms cannot use market power in one part of the business to gain power in another, which might involve requiring data stores for different services to be separated. It could require the firm to sell off a part of its business altogether.
Those are examples, but that was not a prescriptive or exhaustive list of PCIs. They are very much up to the DMU to frame depending on the technology and the market dominance that they are trying to remedy.
Seema Malhotra
I seek your guidance, Mr Hollobone. I was just wondering about process. I had one last question for the Minister; I thought that he was continuing his speech, but he has finished it.
Seema Malhotra
I seek clarification from the Minister on clause 51(8), which reads:
“The fact that a pro-competition order ceases to have effect does not affect the exercise of any functions in relation to a breach or possible breach of that order.”
I assume that is referring to historical breaches, but I seek clarification on that because it is not in the wording of the clause.
Paul Scully
Yes, that is the case.
Question put and agreed to.
Clause 44 accordingly ordered to stand part of the Bill.
Clause 45
Power to begin a PCI investigation etc
Amendment made: 12, in clause 45, page 25, line 18, at end insert—
“(3) The CMA may begin a PCI investigation in relation to a designated undertaking even if it has previously made a decision not to make a PCI in respect of that undertaking.”—(Paul Scully.)
This amendment confirms that the CMA can begin a PCI investigation in relation to a designated undertaking even if it has previously made a decision not to make a PCI in respect of that undertaking.
Clause 45, as amended, ordered to stand part of the Bill.
Clauses 46 to 54 ordered to stand part of the Bill.
Clause 55
Duty to report possible mergers etc
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Clauses 56 to 59 stand part.
That schedule 2 be the Second schedule to the Bill.
Clauses 60 to 66 stand part.
Paul Scully
These clauses comprise chapter 5, “Mergers”, and schedule 2 provides further detail needed for chapter 5 to function smoothly.
Clause 55 establishes a requirement for SMS firms to report possible mergers involving them that have the potential to harm competition in the UK to the CMA before they can be completed. Unlike most merger regimes, at the moment there is no obligation in the UK to notify mergers to the CMA, but firms may choose to voluntarily notify the CMA of a merger in order to receive a binding decision from the CMA on it. In digital markets, this is a very different thing, because of the speed with which it can happen and the entrenchment of power, which we have discussed at length. That is why it is important that the CMA has the opportunity to review potentially harmful mergers involving SMS firms before it is too late. This light-touch reporting requirement is designed to focus on only those possible SMS firm mergers with the potential to give rise to competition concerns.
The mergers will need to be reported only if three conditions are met, such as when the SMS firms will obtain qualifying status through holding shares or voting rights in a target firm that is a UK-connected body corporate. I will set out further detail on the former when I explain clause 56. The latter means any body corporate that carries on activities in the UK or supplies goods or services to the UK, or which has a subsidiary that does so. The consideration provided by the SMS firm for the holding of shares or voting rights must also be at least £25 million. Similar conditions will also apply for the reporting of possible mergers involving an SMS firm participating in a joint venture. When an SMS firm is part of a larger corporate group, the requirement to report will instead apply to all the bodies corporate that make up the group. In those situations, the question will generally be whether the group as a whole will meet the conditions I have set out. When I say “an SMS firm” in debates on this chapter in part 1 of the Bill, it means an SMS firm or any larger corporate group it is part of.
The reporting process should take a maximum of 10 working days. Once a report has been submitted, the CMA will have up to five working days to determine whether the report is sufficient and must therefore be accepted. Following acceptance, the CMA will have a further five working days to review the information in the report before the possible merger can be completed. If the CMA identifies a reported merger as potentially problematic, it can use its powers under the general merger regime to investigate the merger as it would any other type of merger.
Clause 56 defines qualifying status. Under the merger regime, control over a target firm or joint venture vehicle must be acquired or increased for a merger to take place. That is for the CMA to determine on a case-by-case basis. One of the ways control can be exercised is through a shareholding or through voting rights. In order to capture acquisitions of control over target firms based on shares or voting rights, clause 56 provides that SMS firms will acquire qualifying status in a target firm when the percentage of the shares or voting rights they hold in the firm crosses any of the thresholds in subsection (1)—that is, when the percentage moves from less than 15% to 15% or more; from 25% or less to more than 25%; or from 50% or less to more than 50%. These thresholds have been chosen specifically to capture circumstances in which different levels of control recognised under the merger regime are likely to be acquired by an SMS firm.
Clause 57 sets out what is meant by the “value of consideration”, which is necessary to determine whether a possible merger meets the £25 million threshold for reporting set out in clause 55. Clause 58 places several requirements on the CMA with regard to the notice it is required to make, setting out the parameters of the report that SMS firms will be required to provide to the CMA about a possible merger. The clause requires the CMA—to pre-empt a possible question—to publish online a notice setting out what information must be included in a report and what form a report must take. We decided, in subsection (2), to limit what the CMA may require in the report to only that information considered necessary to decide whether to initiate a merger investigation or make a hold separate order under the general merger regime while an investigation is ongoing.
Clause 59 sets out further detail of when and how reporting requirements will apply. Schedule 2 provides further detail as to when interests like shareholdings and rights, such as voting rights, are treated as held in a target firm or joint venture vehicle for the purposes of the duty to report a possible merger in clause 55. Clause 60 places time limits and procedural requirements on the CMA once it has received a report. Clause 61 makes it clear that a reportable event must not take place until the reporting requirements set out in the chapter are met. Clause 62 clarifies when a possible merger is considered as taking place for the purposes of the reporting requirements. Clause 63 permits SMS firms to authorise third parties to act on their behalf—specifically, to give a report to the CMA about a possible merger and to receive the notice of acceptance or rejection from the CMA. In general, those third parties are likely to be legal representatives.
Clause 64 sets out the review process for non-penalty decisions made by the CMA in connection with the chapter. We will talk about appeals and the wider area later on, but if a person is aggrieved by the decision made by the CMA in connection with a reporting requirement that is not a penalty decision, they can apply to the Competition Appeal Tribunal for a review of that decision. The Competition Appeal Tribunal will apply the same principles as would be applied by a court on an application for judicial review. A full merits appeal process will apply to penalty decisions made by the CMA in connection with this chapter, as it does to penalty decisions under the wider merger regime.
Clause 65 provides the Secretary of State with powers to make regulations in relation to the duty to report. It also sets out which procedure-specific regulations are subject to that. It is appropriate that the Secretary of State has the power to make regulations on the duty to report. Operational experience may reveal that the criteria needs to be changed for the reporting process to continue to function effectively. Clause 66 places a duty on the CMA to monitor and enforce the merger reporting requirements. It goes no further than requiring the CMA to consider exercising its investigative and enforcement powers where it is aware of a basis for doing so.
Alex Davies-Jones
I am grateful to the Minister for outlining chapter 5 and we welcome the provisions. None of us want to see potential loopholes or designated undertakings being able to avoid their responsibilities thanks to a merger, so we see clause 55 and many of the clauses that follow in this chapter as being eminently important. More specifically, the clause sets out the circumstances in which designated undertakings or, where designated undertakings are part of a group, group members—see clause 114—will have a duty to report a possible merger involving a reportable event to the CMA before it takes place.
We welcome the clarification that there will be two categories. The first is concerned with designated undertakings or groups reaching certain percentage thresholds of the shares or voting rights held in certain bodies corporate with links to the United Kingdom. The second is concerned with designated undertakings or group members forming certain joint venture vehicles that are intended or expected to have links to the United Kingdom. We recognise the role of a minimum value requirement, which will also apply in relation to the consideration provided for the relevant shares or voting rights, or in relation to the formation of the joint venture vehicle.
We see the clause as important in clarifying where the line will be drawn for possible mergers in relation to this regime, and agree with the drafting, which sets the value of the merger as being at least £25 million. We feel that is a fair value, so we support the clause and have not sought to amend it at this stage. The same can be said for clauses 56 to 59. As we know, one of the strategic recommendations of the Digital Competition Expert Panel’s Furman report suggested that legislation adapting the merger control rules—so that the CMA could more effectively challenge mergers that could be detrimental to consumer welfare—was required. So we see clause 56, which sets out the circumstances in which a designated undertaking or group will have qualifying status in relation to a UK-connected body corporate or joint venture vehicle, as being vital to ensuring that mergers are covered by this legislation more widely.
Paul Scully
Regarding the hon. Member’s questions about the Secretary of State having the powers to amend things, I cannot give her an example but it very much goes back to what I was saying in a previous debate, namely that digital markets change really quickly and it is just so that the Secretary of State has the power to amend things quickly and so that the reporting criteria may develop and evolve over a period of time, so that they can remain relevant in the long term.
Clearly, we have safeguards in the process there, so the Secretary of State will need to consult the CMA. This is not just an isolated decision-making process; the CMA has expertise in this area, but it will be for the Secretary of State to focus on the decision. The CMA will be able to provide the expert advice, ensuring that amendments can correctly reflect the changing landscape, and Parliament will clearly need to approve any amendment.
Regarding the notice that the hon. Member was talking about, again it is appropriate for the CMA to set out by notice what a report must contain. The CMA has considerable expertise in the assessment of mergers, so it is well-placed to decide what information it needs to make an assessment. So, the approach that we are suggesting here is consistent with the wider merger regime, whereby the CMA sets out what information should be included in a voluntary merger notification.
Question put and agreed to.
Clause 55 accordingly ordered to stand part of the Bill.
Clauses 56 to 59 ordered to stand part of the Bill.
Schedule 2 agreed to.
Clauses 60 to 66 ordered to stand part of the Bill.
Clause 67
Power to require information
Question proposed, That the clause stand part of the Bill.
Paul Scully
Clearly the DMU needs to have access to the correct information to ensure its work is evidence-based. Clause 67 allows the DMU to request information it needs to either exercise, or decide whether to exercise, any of its digital markets functions. That includes information in any form, such as data, internal documents and forecasts. The clause also includes new powers to investigate the outputs of algorithms by requiring SMS firms to generate information and to carry out tests and demonstrations of technical processes.
Clause 68 allows the DMU to require that an SMS firm names a senior manager to be responsible for ensuring that the firm complies with a specific information request. The DMU will be able to impose a penalty on the named senior manager where they have failed, without reasonable excuse, to prevent the SMS firm from failing to comply with the request for information. Personal liability will help to embed a culture of compliance within strategic market status firms.
Alex Davies-Jones
Clause 67 is an important starting point as it gives the CMA powers to require the provision of information from designated undertakings and any other person believed to hold material needed for it to operate the regime. That includes any information in any form, which might include data, correspondence, forecasts and estimates.
We welcome the clarity that the CMA will be able to specify the format in which the information must be provided. That is a very important point that we feel will be critical to ensuring timely responses from designated undertakings. We have seen the dangers of what can happen when we allow these big firms to overwhelm with the provision of data in complex formats and in incredible quantities in legal proceedings around online safety, and we do not want to see the same negative consequences here.
We welcome subsection (4), which, importantly, includes provisions that will enable the CMA to compel evidence collection by requiring a person to collect and retain information that it may not otherwise collect and retain. In addition, subsection (7) specifies that the CMA can require the recipient of an information notice to give the CMA information, either in physical or electronic form, which is located outside the UK. That is an important point worth touching on.
We know that these SMS firms have a global reach. We do not want to be in a position whereby the CMA cannot access information just because it is held overseas. This is a sensible and crucial clause to ensure the CMA has the appropriate teeth and power to act when it needs to.
We are also pleased to see clause 68 included in the Bill, which references a point that Labour have repeatedly called for in other legislation. Without these provisions and the ability to name an individual, big companies will typically not take their responsibilities seriously. We therefore welcome confirmation that a penalty may be imposed on a named senior manager of a designated undertaking that fails to comply with an information notice—a point we will address later, when we discuss clause 85.
Ultimately, we feel that the provisions are in line with other regulated sectors, principally financial services, where regulation imposes specific duties on directors and senior management of financial institutions, and those responsible individuals face repercussions if they do not comply.
I feel we have lots to learn here from looking to other regulated industries. For example, in financial services regulation, the Financial Conduct Authority uses a range of personal accountability regimes, including the senior managers and certification regime, which is an overarching framework for all staff in financial services industries. The regime aims to
“encourage a culture of staff at all levels taking personal responsibility for their actions and make sure firms and staff clearly understand and can demonstrate where responsibility lies”.
If only we could have that approach to other legislation on online safety. We therefore support clause 68—we see it as standard—and have not sought to amend it at this stage.
Question put and agreed to.
Clause 67 accordingly ordered to stand part of the Bill.
Clause 68 ordered to stand part of the Bill.
Clause 69
Power of access
Paul Scully
I beg to move amendment 13, in clause 69, page 39, line 18, after “access” insert “business”.
This amendment limits the power of the CMA to require access to premises so that it may be used only in relation to business premises.
Paul Scully
Government amendments 13 to 24 remove possible ambiguities about the scope of the power of access, and of a firm’s duty to co-operate with a skilled person, so that they are aligned with similar Digital Markets Unit information-gathering tools. Clause 69 allows the DMU to require firm-led tests or demonstrations under the DMU’s supervision. That backstop power of access will be available when a strategic market status firm fails to comply with an information notice or with the duty to assist a skilled person. Clause 77 introduces a power for the DMU to appoint a skilled person to produce a report on an aspect of an SMS firm, or a firm subject to an SMS assessment. There will be a duty on the firm to co-operate with the skilled person, including by giving them access to their premises.
These essential clauses ensure that the DMU has the right powers, but it is important to ensure that those powers are proportionate and appropriately constrained. Government amendments 13 and 16 limit the DMU’s power of access to business premises, rather than allowing access to all premises. That ensures that the power cannot be interpreted as allowing access to domestic premises and maintains consistency with the restrictions on the DMU’s powers of entry. Government amendments 17 to 20 and 22 are consequential.
Neil Coyle (Bermondsey and Old Southwark) (Lab)
The Minister will have heard the witnesses last week, including witnesses from trading standards. Will the amendments in this grouping be replicated to address the concerns of trading standards and ensure equivalence across the regulatory powers?
Paul Scully
We listened to the evidence and considered that, and we will reflect on that in our further consideration of the Bill. It was interesting to hear the evidence last week.
Neil Coyle
Is the Minister suggesting that the equivalent powers to access information, which were specifically addressed last week by trading standards representatives, will be covered by this legislation?
Paul Scully
I am saying that the amendments that we are discussing in this grouping are specifically about domestic and business premises. I am just keeping to the narrow scope of the amendments. As for the wider evidence that we heard last week, we will clearly reflect on that and work out any other parts of the legislation; I was being really specific about what these amendments do.
Government amendment 21 limits a firm’s duty to give access to a skilled person, so that it is access to business premises only, to ensure consistency with other DMU and wider CMA investigatory powers. Government amendment 14 to clause 69 limits the power of the DMU to access persons to a power to access individuals, and Government amendment 23 limits the firm’s duty to assist a skilled person to a duty to assist a skilled individual. Those changes clarify the scope of the power and the duty, as a person includes a legal person, such as a company. The clauses already specify that the DMU or skilled person can require access to a designated firm’s premises, equipment, services and information. Limiting access to individuals—or natural persons—is a more accurate reflection of the policy intention of the clauses.
Finally, Government amendments 15 and 24 clarify that the DMU may access individuals or business premises only in the UK, and similarly that a firm’s duty to assist a skilled person by giving them access applies only to individuals and business premises in the UK. The DMU’s powers of entry allow entry to domestic premises only under a warrant, under clause 73. Its interview and entry powers may also be exercised only in respect of individuals and premises in the UK. Government amendments 13 to 24 will preserve those important limits on the DMU’s powers and ensure consistency across the DMU’s information-gathering toolkit.
Neil Coyle
I am hoping for clarity. I think there were attempts to get information to the Minister when I intervened before. Last week, trading standards specifically asked for the powers that are being discussed in these amendments. I appreciate that this grouping is for a different regulatory body, but does the Minister aim to set up equivalence for regulatory bodies, or is the new body to have greater powers than an existing body with a similar purpose?
Paul Scully
I am trying to remain specific, rather than widening the discussion to other regulatory issues, because the provisions must be specific to the matter that we are discussing; I think I am correct in saying that. Effectively, this grouping tries to narrow down the enforcement powers; it clarifies that they relate to business premises, and apply within the UK, rather than extraterritorially. That is why I hope that hon. Members will support these Government amendments.
Alex Davies-Jones
The Opposition believe that clause 69 is crucial to the Government’s policy objective of empowering the Competition and Markets Authority, and ensuring that it can enforce its regime and proactively address the root causes of competition issues in digital markets.
The clause builds on clause 68 and gives the CMA the power to require a designated undertaking to obtain, generate, collect or retain specified information or to conduct a specified demonstration or test of a business system or process under the supervision of the CMA. Specifically, the power can be exercised when the designated undertaking has failed to comply with a previous request for information under an information notice or to provide sufficient assistance to a skilled person. We welcome those provisions. We also welcome the clarity provided by the clause about when the CMA can use the powers, which is when companies have failed to comply with other requirements. None of us wants the CMA to take an overly heavy-handed approach, but it must be compelled and empowered to act where necessary.
We understand that the powers in subsections (2) and (3) will be used rarely, but it is important that they be in the Bill. They are also an important step in ensuring that big strategic market status firms, which for too long have gone unregulated, cannot bypass the regime by concealing information or operating systems. It is vital that the Government do not give in here, so I urge the Minister to ensure that they do not. I imagine that there is heavy pressure from firms that will be captured by the provisions, but the Government must not cave in or weaken this regime; I hope the Minister can reassure us that they will not. That being said, we welcome the clause and have not sought to amend it at this stage.
Government amendments 13 and 14 clarify that the CMA’s access rights will be used only in relation to business premises. We see that as appropriate. Government amendments 15 to 23 are technical changes that we are happy to support. Government amendment 24 is an important clarification that limits duties to inside the UK, which again is a sensible inclusion that Labour supports.
Mr Hollobone, would you like me to discuss clause 70, or finish there?
Paul Scully
To answer the one easier question that the hon. Lady asked, I can assure her that we will not weaken the provisions.
Amendment 13 agreed to.
Amendments made: 14, in clause 69, page 39, line 18, leave out “persons” and insert “individuals”.
This amendment limits the power of the CMA to require access to persons so that it may be used only in relation to persons who are individuals.
Amendment 15, in clause 69, page 39, line 33, at end insert—
“(5) The powers conferred by this section are not exercisable in relation to premises, equipment or individuals outside the United Kingdom.
(6) But the powers conferred by this section are exercisable in relation to information and services whether stored or provided within or outside the United Kingdom.”
This amendment limits the power of the CMA to require access to premises, equipment or individuals so that it may not be used to require access to premises, equipment or individuals outside the United Kingdom.
Amendment 16, in clause 69, page 39, line 33, at end insert—
“(7) In this Chapter, ‘business premises’ means premises (or any part of premises) not used as a dwelling.”—(Paul Scully.)
This amendment is consequential on Amendment 13 and moves the definition of “business premises” from clause 72 to clause 69.
Question proposed, That the clause, as amended, stand part of the Bill.
Paul Scully
Clause 69 is a backstop power enabling the Digital Markets Unit to supervise firm-led tests and demonstrations, either at a firm’s premises or remotely. It will be available only in limited cases in which an SMS firm has not complied with an information notice or a duty to assist a skilled person. It provides an efficient way for the DMU to get the information that it needs without placing an undue burden on firms.
Clause 70 allows the DMU to require an interview with any individual in the UK with information relevant to a digital markets investigation. That will enable the DMU to gather vital evidence that is held by individuals with relevant knowledge, rather than in digital or physical forms. Clause 71 protects individuals who are compelled to give testimony under clause 70 from self-incrimination. It limits the circumstances in which the DMU can use an individual’s interview statement as evidence against them in a criminal prosecution. Clause 72 allows the DMU to enter business premises without a warrant for the purposes of a breach investigation. It ensures that the DMU can collect information that is being withheld by an SMS firm that is accessible only on the premises. Without that power, there would be greater risk that a firm could destroy or interfere with material relevant to an investigation.
Clause 73 allows the DMU to enter business and domestic premises for the purposes of a breach investigation, after obtaining a warrant from the High Court, Court of Session or Competition Appeal Tribunal. The DMU must also establish that a firm has failed to comply with previous information requests, or that no other powers would secure the necessary evidence, and establish reasonable suspicion that the information is relevant to the investigation. Clause 74 contains supplementary requirements for how the DMU must exercise its power to enter premises under a warrant. It also clarifies the extraterritorial scope of that power. The DMU will not be able to enter premises outside the United Kingdom under clause 73, but it can access information regardless of where it is physically stored.
Clause 75 allows the DMU to take copies of, or extracts from, information and sift it off site when exercising its power to enter either business or domestic premises under a warrant, if it is unsure whether the information falls within the scope of the investigation. Clause 76 ensures that the DMU follows established judicial procedures when applying for a warrant to enter premises. It requires the DMU to follow the rules of the High Court, Court of Session or Competition Appeal Tribunal; that provides vital checks and balances.
These clauses are largely modelled on the CMA’s existing information-gathering powers, and they will be subject to the same robust safeguards. They also give the DMU new powers to scrutinise the output of algorithms in clause 69, and enhanced powers in clause 73 to access information that is stored on remote servers but accessible over the internet. It is important to recognise that without those powers, the DMU’s interventions would not be well evidenced or enforceable.
Alex Davies-Jones
I was champing at the bit to talk about these clauses. However, I will keep my comments brief because much of Labour’s thoughts align with our thoughts on previous clauses.
Clause 70 gives the CMA the power to require any individual to attend an interview and answer questions for the purposes of a digital markets investigation. That is consistent with the amendments to section 26A of the Competition Act 1998. We welcome those, so it is only right that the powers appear in this legislation, too. These are basic powers and the clause is fairly procedural. The CMA must have the power to give notice to any individual with information relevant to a digital markets investigation, requiring them to answer relevant questions at a place or in a manner specified in the notice. That is fundamental for an empowered regulator. We support the approach, so we have not sought to amend the clause at this stage. We also support the intentions of clause 71, and we believe that the approach is fair and reasonable. The clause is important for clarity. We welcome its inclusion in the Bill and we have not sought to amend it at this stage.
Turning to clause 72, it is right and proper that the CMA must have reasonable grounds to suspect that information relevant to the breach investigation can be accessed from or on the premises. We support that common- sense approach. The provisions are in line with those for other regimes, and will be important in ensuring that if the CMA is required take action for the purposes of a breach investigation, it can do so in a timely and effective manner. We support the clause and have not sought to amend it.
We also support the intentions of clause 73, which gives the CMA the power to enter business and domestic premises under a warrant, without notice and using reasonable force, for the purposes of a breach investigation. Again, the CMA has powers of entry under a warrant through sections 28 and 28A of the Competition Act 1998. It will come as no surprise, given that we support provisions for the CMA to act without a warrant, that we agree that it should be able to act with one. We value the clarification that the CMA must prove that there are reasonable grounds to act. If it has to, it can call on individuals who have expertise that is not available in the CMA but is required if the terms of the warrant are to be fully carried out. That will allow the CMA to act rapidly, which, given the level of these breaches, is vital. We therefore support this clause standing part of the Bill.
Clause 74 sets out the supplementary requirements to the CMA’s power to enter premises under a warrant. We welcome the transparency afforded by subsection (1), and the clarification that although the CMA cannot enter premises outside the United Kingdom, as outlined in subsection (6), it can access information regardless of where it is physically stored. That is an important point, given the nature of SMS firms and their global holdings. For those reasons, Labour is happy to support the clause standing part of the Bill.
Clause 75 makes necessary amendments to a range of sections of the Criminal and Justice and Police Act 2001 to enable the CMA to seize information and take copies of, or extracts from, information when exercising its power under clause 73 to enter business and domestic premises with a warrant. It is a practical clause that aligns with the CMA’s power to seize documents from business premises under section 28 of the Competition Act 1998. We therefore believe that the clause should stand part of the Bill.
Clause 76 requires the CMA to follow the rules of the High Court, the Court of Session or the CAT when making an application. We see it as a natural consequential clause and will therefore support it.
Seema Malhotra
May I make one additional comment? We received evidence from trading standards about their access to information that could be stored online in order for them to undertake some of their responsibilities. Has any consideration been given to whether the search powers that the CMA will be given could be extended to trading standards, which sometimes undertake very similar areas of work?
Paul Scully
I note that if there were a word cloud of comments from the hon. Member for Pontypridd, “We are not amending at this stage” would be quite high up. Duly noted.
On the matter raised by the hon. Member for Feltham and Heston, I will write to her with more detail, because I think we are talking about two different regimes across two different Departments. I do not want to pre-empt what my hon. Friend the Member for Thirsk and Malton may do with trading standards. These provisions relate specifically to CMA powers, which is why I am remaining in that narrow tramline. I will write to the hon. Member for Feltham and Heston about the wider trading standards regime.
Question put and agreed to.
Clause 69, as amended, accordingly ordered to stand part of the Bill.
Clauses 70 and 71 ordered to stand part of the Bill.
Clause 72
Power to enter business premises without a warrant
Amendments made: 17, in clause 72, page 40, line 31, after “premises” insert “(see section 69(7))”.
This amendment is consequential on Amendment 16.
Amendment 18, in clause 72, page 41, leave out lines 40 and 41.—(Paul Scully.)
This amendment is consequential on Amendment 16.
Clause 72, as amended, ordered to stand part of the Bill.
Clause 73
Power to enter premises under a warrant
Amendments made: 19, in clause 73, page 43, leave out line 22.
This amendment is consequential on Amendment 16.
Amendment 20, in clause 73, page 43, line 33, after “business premises” insert “(see section 69(7))”.—(Paul Scully.)
This amendment is consequential on Amendment 16.
Clause 73, as amended, ordered to stand part of the Bill.
Clauses 74 to 76 ordered to stand part of the Bill.
Clause 77
Reports by skilled persons
Amendments made: 21, in clause 77, page 47, line 3, after “such” insert “business”.
This amendment limits the duty to assist a skilled person by giving access to premises so that it applies only in relation to business premises.
Amendment 22, in clause 77, page 47, line 3, after “premises” insert “(see section 69(7))”.
This amendment is consequential on Amendment 16.
Amendment 23, in clause 77, page 47, line 4, leave out “persons” and insert “individuals”.
This amendment limits the duty to assist a skilled person by giving access to persons so that it applies only in relation to persons who are individuals.
Amendment 24, in clause 77, page 47, line 5, at end insert—
“(13) The duty in section 77(12) does not include a duty to give access to premises, equipment or individuals outside the United Kingdom.
(14) But the duty in section 77(12) does include a duty to give access to information and services whether stored or provided within or outside the United Kingdom.”—(Paul Scully.)
This amendment limits the duty to assist a skilled person by giving access to premises, equipment or individuals so that it does not include a duty to give access to premises, equipment or individuals outside the United Kingdom.
Question proposed, That the clause, as amended, stand part of the Bill.
Paul Scully
Clauses 77 to 80 introduce the final elements to support the DMU’s investigatory powers.
Clause 77 will give the DMU the power to authorise a skilled person to provide a report to it in relation to an SMS firm, or firm subject to an SMS investigation, on a matter relevant to the operation of the regime. That is needed to give the DMU access to expert reports to enable it to interpret technical information gathered when carrying out its digital markets functions.
Clause 78 will impose a legal duty on certain people to preserve evidence that is relevant to a digital markets investigation or to a compliance report in relation to an SMS firm. That duty will also apply when the DMU is providing investigative assistance to an overseas regulator. That will ensure that no party may destroy, conceal or falsify any relevant evidence without reasonable excuse.
Seema Malhotra
It is a pleasure to speak to this group of clauses on behalf of my hon. Friend the Member for Pontypridd, who is speaking in another debate.
We support clause 77, which will give the CMA the power to require a skilled person, which could be a legal or other person, to provide a report to it on a matter relevant to the operation of the regime. That is in line with other regimes of that nature, and we therefore support its inclusion.
The clarity afforded by subsection (1), which sets out that the CMA can use this power in
“exercising, or deciding whether to exercise, any of its digital markets functions”,
is welcome. It is also right that the CMA can exercise the power only in relation to a designated undertaking or an undertaking subject to an SMS investigation.
In order to ensure no unnecessary delay, subsections (2) and (3), which will give the CMA the power to appoint a skilled person to provide a report and give notice of the appointment and other relevant matters to the undertaking in question, while also specifying the form of a report, are an important inclusion. That aligns well with subsection (12), which imposes a duty on the designated undertaking or undertaking subject to an SMS investigation, and any person connected to those undertakings, to assist the skilled person in any way reasonably required to prepare the report.
One hopes that designated undertakings would co-operate in such instances, but it is welcome and helpful to have their obligations outlined as they are in clause 77. Clarity on the consequences of failing to comply, in the form of penalties or other enforcement provisions, is also an important and positive step. Labour has therefore not sought to amend the clause at this stage; we believe it should stand part of the Bill, as drafted.
As with any regulatory regime, the CMA should of course preserve relevant evidence. Clause 78 is integral, because it places a legal duty to preserve evidence that is relevant to a digital markets investigation, a compliance report by a designated undertaking, and evidence where the CMA is providing investigative assistance to an overseas regulator. The Bill also confirms that where the CMA has made a formal request for information, there are penalties for non-compliance, or for falsifying, concealing or destroying information.
Labour supports the purpose of clause 78, which is to preserve evidence before and after the CMA has made a formal request. We believe that it is consistent with the existing duty to preserve evidence under section 201(4) of the Enterprise Act 2002 on cartel offence investigations. We note, however, that the duties within this clause do not apply
“where the person has a reasonable excuse to do so.”
I—and, I am sure, others—would welcome clarification from the Minister on that point. We support the intentions of the clause and have therefore not sought to amend it at this stage, but I would appreciate further clarity on the definition and how it will work in practice.
Clause 79 is helpful because it specifies that the CMA cannot require any information subject to legal and professional privilege, or, in Scotland, confidentiality of communications. That is an important point to make and is in line with similar regimes. We support the clarity outlined in subsection (2), which specifies that the limitation applies to producing, taking possession of, and taking copies of or extracts from a privileged communication. I do not need to elaborate much further here. Labour considers this to be a fairly standard procedure and we therefore support clause 79 stand part.
Finally, clause 80 gives the CMA the power to publish a notice of any decision to use its investigatory powers under the digital markets regime to assist an investigation by the regulator in another jurisdiction. The notice may include the regulator that the CMA is assisting, the undertaking that is the subject of investigation, and the matter for which the undertaking is under investigation. Labour welcomes the transparency measures here.
My question is about why that approach has not been afforded to the CMA’s domestic work on digital markets. If the CMA is able to support overseas regulators in ways that might identify the undertaking, I am unclear as to why the CMA is not compelled in the same way for issues that might arise in the UK. I am interested to hear the Minister’s thoughts on that point, because it is an important one for companies likely to be captured in the SMS definition and for challenger firms that might one day find themselves subject to these regulations, too.
Paul Scully
I thank the hon. Lady. I will probably write to her with examples of where that measure might come in. As I have said, it does not come in if there is an exemption for people with a reasonable excuse. I am not fleet enough of foot to come up with a good example for her at the moment, but I will certainly write to her.
On the domestic situation for the DMU, I will, again, probably write to the hon. Lady, but my interpretation is that it is easier to deal with the potential for defamation and so on when someone has full control of the case in one jurisdiction. If we are working across jurisdictions internationally it is more complex, so the protections need to be there.
Question put and agreed to.
Clause 77, as amended, ordered to stand part of the Bill.
Clauses 78 to 80 ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Mike Wood.)
Energy Bill [ Lords ] (Fourteenth sitting)
Thursday 22nd June 2023
(1 year, 6 months ago)
Public Bill CommitteesRead Full debate Energy Act 2023 View all Energy Act 2023 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 22 June 2023 - (22 Jun 2023)
The Committee divided: - Ayes: 5 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 4 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 8 - Question accordingly negatived.
The Chair
I remind the Committee that with this we are considering:
Clauses 271 to 273 stand part.
New clause 52—Principal objectives of Secretary of State and GEMA—
“(1) Section 4AA of the Gas Act 1986 (principal objective and general duties of Secretary of State and GEMA) is amended as set out in subsections (2) and (3).
(2) In subsection (1A)(a), for ‘the reduction of gas-supply emissions of targeted greenhouse gases’ substitute ‘the Secretary of State’s compliance with the duties in sections 1 and 4(1)(b) of the Climate Change Act 2008 (net zero target for 2050 and five-year carbon budgets)’.
(3) In subsection (5B), omit the definitions of ‘emissions’, ‘gas-supply emissions’ and ‘targeted greenhouse gases’.
(4) Section 3A of the Electricity Act 1989 (principal objective and general duties of Secretary of State and GEMA) is amended as set out in subsections (5) and (6).
(5) In subsection (1A)(a), for ‘the reduction of electricity-supply emissions of targeted greenhouse gases’ substitute ‘the Secretary of State’s compliance with the duties in sections 1 and 4(1)(b) of the Climate Change Act 2008 (net zero target for 2050 and five-year carbon budgets)’.
(6) In subsection (5B), omit the definitions of ‘emissions’, ‘electricity-supply emissions’ and ‘targeted greenhouse gases’.”
This new clause is intended to replace clause 271. The intention is for it to appear at the start of Part 6. It is equivalent in substance to clause 271 but includes some drafting changes and consequential amendments.
Alan Brown (Kilmarnock and Loudoun) (SNP)
It is a pleasure to serve under your chairmanship, Mr Gray. I want to make quite a few comments on the clauses, but I hope we are more than halfway through the debate, given how long we spent on it on Tuesday. You were not here then, Mr Gray, but the Labour Front Benchers shared their contributions, which is a luxury that I do not have as the only SNP Front Bencher. I warn the Committee to buckle up for what is now going to be an Alan monologue for a wee while, so be prepared!
First, I want to make some comments about Tuesday’s discussion of the merits of clause 270, which was inserted by the Lords. I am sorry that the hon. Member for South Ribble is not in her place; I would rather be saying this with her directly opposite—
Alec Shelbrooke (Elmet and Rothwell) (Con)
Will the hon. Gentleman give way?
Alan Brown
Shortly; I will make the point first. On Labour and the SNP being against opening coal mines, the hon. Member for South Ribble said:
“This is one of the most jaw-dropping moments I have ever had in my parliamentary career. The Scottish National party and the Labour party are arguing against domestic jobs, our proud coalmining heritage and energy security for this country. Is that not flabbergasting?”––[Official Report, Energy Public Bill Committee, 20 June 2023; c. 356.]
That was a week in which the former Prime Minister resigned and was proven by the Privileges Committee—with a Tory majority—to be a serial liar, and in which Parliament voted to effectively sanction what would have been a 90-day suspension. I find that a bit more jaw-dropping than ourselves and Labour opposing new coal mines.
Alec Shelbrooke
To help the hon. Gentleman, I merely say that my hon. Friend the Member for South Ribble is unfortunately detained in the Chamber because a huge bomb factory was found in her constituency this morning and she needs to raise that on the Floor of the House. I know that my hon. Friend will be here later.
Alan Brown
I thank the right hon. Gentleman for that clarification. I was not casting any aspersions about the hon. Member not being here; I was just saying that it was unfortunate when I am addressing her comments. I note how important that issue in her constituency is and hope it gets resolved.
On coalmining heritage—I do not think I need to point this out, but I will anyway, as an obvious history lesson—the coalmines were shut down as a result of Maggie Thatcher putting her anti-union ideology ahead of the coalmining industry. At that time she was more than happy to import coal from the likes of Poland and bring it in from overseas while shutting the coalmines here. That is a fact.
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Andrew Bowie)
indicated dissent.
Mark Jenkinson (Workington) (Con)
Does the hon. Member agree with the former Labour leader of one of the Aberdeen councils, Barney Crockett, that Labour’s energy policy will wreak more harm on industrial communities than anything that Margaret Thatcher ever did?
The Chair
Order. Before we allow ourselves to get into what might be an amusing, if controversial, area, I remind the Committee that we are dealing specifically with clause 270, which prohibits new coalmines in the six months after the Bill is passed. Perhaps we could restrict ourselves to that, rather than getting into more exciting rabbit holes.
Alan Brown
Excitement is sometimes quite tempting, Mr Gray, but I will try my best. I am trying to draw together the history of the coalmines and the issue of whether we should go forward with more. On the intervention, it is not usually for me to agree with Barney Crockett, but Labour’s energy policy is certainly all over the place.
We are debating opening new coalmines, but the reality is that there are now not too many people, even of working age, who have actually worked in coalmines—that is how long ago they were shut down—so there is not even a skillset out there that would be able to operate much of the mines. I realise that technology has moved on—the proposed mine at Whitehaven will use modern technology—but skilled labour will still be hard to get and the Government’s immigration policies will prohibit skilled miners coming from elsewhere.
Labour and the SNP are against coalmines, but we need to look at the wider context and consider the comments of the right hon. Member for Kingswood (Chris Skidmore), who was commissioned by the Tory Government to undertake a net zero review. His report was supported and commended by Members on both sides of the House, who agreed with its recommendations. Before the decision on the Whitehaven mine, he said:
“Opening a new coal mine in the UK would send the wrong signal across the world. We are international leaders when it comes to tackling climate change. To act differently, having pledged the ending of coal, would be to surrender that leadership.”
After the decision to grant planning permission for the coalmine, the right hon. Gentleman stated that if the recommendations in his report, such as on net zero tests, were part of the process, the coalmine would have been refused. He added:
“I obviously personally believe the coal mine decision is a mistake.”
A senior Tory parliamentarian is saying the same things as us. He is against the opening of new coalmines, and by default therefore supports clause 270. On international leadership, he effectively said that by opening new coalmines, the UK can no longer claim to be world leading on climate change.
I understand the importance of the jobs that go along with coalmines. My constituency needs new jobs, but we cannot use the phrase “local jobs” to justify bad decisions. Prioritising jobs above everything else leads to a race to the bottom. We could create jobs by chopping down all the trees in the UK and burning them, but that is a ludicrous proposition, so we cannot use new jobs as a justification.
If we want to talk about jaw-dropping comments, I was surprised to find that the hon. Member for South Ribble was a Parliamentary Private Secretary to the COP26 President, the right hon. Member for Reading West (Sir Alok Sharma), so it is worth while to look at what he said about the proposals for opening new coalmines. He said:
“Over the past three years the UK has sought to persuade other nations to consign coal to history, because we are fighting to limit global warming to 1.5C and coal is the most polluting energy source…A decision to open a new coalmine would send completely the wrong message and be an own goal. This proposed new mine will have no impact on reducing energy bills or ensuring our energy security.”
Our comments were deemed jaw-dropping, but I assume that those of the COP26 President, who led the worldwide negotiations on emissions reduction, and those of the chair of the net zero review should not be regarded as jaw-dropping and should be respected.
Alec Shelbrooke
The hon. Gentleman said the proposals will not improve our energy security, but will he comment on what will happen to the steel industry if we are not able to produce the electricity needed to move to arc furnaces in the timeframe outlined by the clause? As I said at the end of the previous sitting, we keep identifying areas that will be powered by electricity, but we do not seem to have the ability to catch up with that. On energy security, will he comment on what will happen if we are unable to generate the electricity that the steel industry needs?
Alan Brown
I am happy to comment on energy security, but I remind the right hon. Gentleman that those were not my words but the words of the former COP26 President. He said that the proposed new mine will not deliver energy security. I am sure that, like me, the right hon. Gentleman respects the President of COP26 and believes that he did a good job.
This argument about supplying coke and coal to the steel industry has already been debunked: 85% of the coal from the new coalmine will go abroad, so it will not provide energy security by supporting the steel industry in the UK. That is a bogus argument.
Mark Jenkinson
The hon. Gentleman says that that point has been debunked, but I actually debunked the debunking in the previous sitting. I am sure he heard those comments. On the issue of 85% being for export, that all depends on whether we want a UK steel industry and whether we want to grow it. Does he agree that we should be growing the UK steel industry and using 100% of that coal here?
Alan Brown
I want to debunk the hon. Gentleman’s debunking of the debunking. Let me come to the comments of the chair of the Climate Change Committee, Lord Deben, who the last time I checked is a Tory and was a Tory Minister.
The Chair
Order. This has become a bit chatty. I think perhaps we should restore a bit of order.
Alan Brown
This is an important point. The chair of the Climate Change Committee condemned the opening of the new coalmine and said that opening it would mean the UK emitting 400,000 tonnes of additional carbon dioxide into the atmosphere. He also pointed out that 85% of the coal will be exported because it is high in sulphur and therefore not suitable for the UK steel industry. A former chief executive of British Steel, Ron Deelen, said:
“This is a completely unnecessary step for the British steel industry”.
Alec Shelbrooke
The hon. Gentleman is being exceptionally generous with his time. He said that exporting 85% of the coal does not add to our energy security, but does he accept that if we have energy at home and do not have to import it, that is energy security by definition?
Alan Brown
I agree, which is why I want to see more renewables deployed. That is why I keep arguing for pumped-storage hydro, but the Government have fought that. It would give us storage and additional security and resilience. Obviously, I want the UK to become a net exporter of energy overall—that is the ideal place to get to—but renewables and storage are the answer.
Plenty of other senior Tory voices are saying that we should not open coalmines, so I do not see why the SNP and Labour should not be on the side of science and of such otherwise-respected senior Tory parliamentarians. It is also ludicrous that we are still effectively banning onshore wind in England but the Government will not accept a ban on opening up new coalmines and burning fossil fuels. When we talk about trying to lead the world on energy change, that is rank hypocrisy.
I realise the reality is that the transition will use some carbon fossil fuels. We need to understand that. That is why I believe in a just transition and have tabled a new clause that asks the UK Government to follow the lead of the Scottish Government by setting up a just transition commission. I have also tabled a new clause about net zero impact assessments. That in itself should underline Government policy and make the decision-making process transparent, so that we fully understand the impacts of policy decisions on net zero.
The Minister said it was important we ensure that industries that rely on coal can rely on domestic sources of coal, but that is a vacuous comment, because any coal mined in the UK goes on the open market and to whoever pays the most money for it. Having a new UK coalmine does not mean that that coalmine will automatically supply UK-based steel makers.
Bim Afolami (Hitchin and Harpenden) (Con)
Would the hon. Gentleman accept that any new piece of energy infrastructure or production from the North sea, or indeed on the land in the UK, can be subject to whatever licence terms the licence issuer, which is the Government, decides? Would he therefore accept that, if the licences have specific restrictions, what he says may not necessarily be true?
Alan Brown
I cannot disagree with that premise—that could happen—but it is interesting that an ardent free marketeer is advocating for special conditions to be put on licences such that oil, gas or coal could be sold only in the UK. I think the hon. Gentleman knows as well as I do that international companies would be loth to accept a licence on that premise. We would be better off nationalising the industry than putting conditions such as those on licences, but in theory the hon. Gentleman is right: we could make that a condition of the licence.
To return to Tuesday’s debate, for me it seemed that there were mixed messages about the possible burning of coal for electricity generation. The right hon. Member for Elmet and Rothwell stated:
“I believe that we cannot just disregard the opening of coalmines, because this is about where we generate all this electricity from. If we cannot generate that electricity, we need back-up plans, including these mines.”––[Official Report, Energy Public Bill Committee, 20 June 2023; c. 376.]
Could the right hon. Member tell me how many new coal mines he envisages opening for the burning of electricity?
Alec Shelbrooke
I do not know, but what I do know is physics. The physics says that we have to maintain a baseload. If we are unable to maintain that baseload, other options may have to be looked at, as Germany has done.
Alan Brown
The whole point is that coal is not being used to support baseload. Even if we believe in the concept of electricity baseload, it is not coal that is doing that. Coal is being used as a back up to the back up for when peak demand is hit, so that argument is wrong. Coal is not used for baseload.
The hon. Member for Workington stated:
“We are far too parochial on the subject of net zero and emissions.”
He seemed to be saying that if we do not do it, somebody else will, which is not showing international leadership. He went on to say:
“if we can export to Germany or somewhere else where people make large quantities of steel using coking coal, that is a reduction in total global emissions that we should champion.”––[Official Report, Energy Public Bill Committee, 20 June 2023; c. 373.]
The hon. Member has still not explained how the UK shipping coal to Germany is going to reduce global emissions—I still do not see how that follows—but I do share his concern that a lot of emission reductions have come from that offshoring manufacturing and industry. That is something we have to stop, so I fully agree with him on that, but opening a coalmine to export coal to Germany is not the way to re-shore industry.
Mark Jenkinson
The hon. Member is being incredibly generous with his time. On the point on how shipping coal from the UK to Germany lowers emissions, if that happens instead of coal being shipped from the US, Russia or somewhere further afield, then the shipping emissions are greatly reduced. As my right hon. Friend the Member for Elmet and Rothwell points out, it is also much cleaner coal to start with.
Alan Brown
I understand the point that Government Members are trying to make but, at the end of the day, if we are shipping coal to Germany, we are still increasing UK shipping emissions. We are increasing emissions from the UK to about 400,000 tonnes of CO2. In the global context, there is no saying whether those coal emissions are getting displaced if the coal is going to Germany, so we cannot guarantee a reduction in global emissions. We would be putting more coal on the market, which is coal somebody else will snap up elsewhere. The likelihood is that we would actually increase emissions.
I should have said in my opening remarks that I represent a former coalmining area, so I recognise the devastation caused by pit closures. My area recovered some jobs through open-cast coalmining, but even that industry collapsed a few years ago, leaving us with devastating blights on the landscape and huge craters that needed filling. Unfortunately, again, there was no help from the UK Government when we needed it. I understand the legacy of coalmining and I want support for these areas, but opening new coalmines is not the way to do it.
We cannot turn back the clock. What we need to do is create jobs for the future. We need green-based jobs in coalmining areas such as mine, using geothermal energy and making use of the closed mines. Let us make them an asset for the future, providing clean energy and reducing energy bills at a local level.
The Committee will be pleased that I am bringing my monologue to an end. I hope that my comments are going to convince the Government and Conservative Committee members that there is no need for new coalmines going forward. I would be delighted to hear the Minister, in his summing up, say that he is not going to move against clause 270, but is going to retain it and listen to those of us who want it.
Clause 271 is to be replaced by new clause 52. I welcome the Government’s change on that and their making reaching net zero a statutory duty of Ofgem. Will the Minister tell us whether new clause 52 and Ofgem’s new statutory duties will make it much easier for Ofgem to allow anticipatory investment? That has been one of the issues, so we want to make sure that it can do that and do that forward plan-ahead, rather than building more constraints into the grid while upgrading it at the same time.
Turning to clauses 272 and 273, it seems like for ages Energy Ministers have stated their support for the principle of the Local Electricity Bill—community electricity generation and the sale of electricity locally—but they have always said that the Bill was not the right solution to facilitate that. The original drafters and MPs who have tried to bring forward private Members’ Bills have changed the Bill to try to address the concerns of Ministers, but that still was not enough.
The cross-party group of peers who drafted clauses 272 and 273 to mimic the effect of the Local Electricity Bill again tried to address the Government’s concerns. I fail to understand why the Government are still against the two clauses. It is worth pointing out that 323 MPs overall, including 128 Tory MPs—let alone myriad local authorities, environmental groups and individuals—have supported the Bill. The feet-dragging makes no sense. I commend the hon. Member for Bristol East for pointing out that the Minister himself was a signatory to the Local Electricity Bill. I wonder what about a ministerial car made him change his mind about supporting it.
Alan Brown
Not of one down here!
Community energy schemes have seen almost no growth for six years, despite renewables clearly being cheaper than ever. Of course, that is tied in with the removal of feed-in tariffs, which were very successful in delivering the likes of small-scale hydro across the highlands, for example.
The Government are pressing ahead with voting to remove clauses 272 and 273. What are their proposals for facilitating community energy generation and providing the certainty of price that groups and companies need to be able to move forward? The Minister must be aware that the smart energy guarantee does not deliver at present and, as I say, there has been no growth in community energy schemes in six years.
At the moment, community energy schemes account for just 0.5% of the UK’s electricity. According to the Environmental Audit Committee, that could increase twentyfold in 10 years, so something like 10% of energy by community generation could be achieved in 10 years if the right conditions are put in place. Even if that is overstated and the reality is only 5%, that would still represent a huge shift in generation and would provide local grids with stability and resilience. That would be much better value than the new £35 billion Sizewell C nuclear station.
If we consider nuclear, price certainty is not a new concept. It underpins the contract for difference auction rates, and it is what is provided for Hinkley Point C. A great example of the potential scope for community energy generation is a study being undertaken in my constituency by the Newmilns Regeneration Association, which is investigating the installation of solar panels on the brownfield site of the former Vesuvius factory. The aim is to sell electricity to local industry, reducing its bills and helping it to be sustainable, and for Newmilns to be a net zero town going forward. The national regulatory authorities believe that the Local Electricity Bill, or the alternative in the form of clauses 272 and 273, needs to be in place to facilitate trading of the electricity that would be generated. That is why I fully support the clauses’ retention in the Bill.
Clause 272 would provide guaranteed income for electricity for small-scale renewable energy generators, and clause 273 would enable community schemes registered under the clause 272 guarantee to sell the electricity they generate locally. The Committee Clerks circulated additional written evidence today, in which professors from the University of Manchester say there should be no fear about clauses 272 and 273, because they will not unduly affect the prices that suppliers have to pay for electricity; at worst, the effect will be marginal. They also recommend that the Government retain the clauses. I really hope that they do.
Andrew Western (Stretford and Urmston) (Lab)
It is a pleasure to serve under your chairmanship again, Mr Gray. After a fairly lively start to the morning, I want to focus predominantly on the matter about which we are all largely in agreement: the addition of new clause 52 to replace clause 271.
I will briefly address clauses 270, 272 and 273, which we have debated at length. I do not wish to add anything particularly new; I will just reiterate colleagues’ comments about the clauses’ importance. The Minister and the hon. Member for Hyndburn previously supported clause 270, so I am bewildered by their shift, given that, as we have heard, building a new coalmine will not make a material difference to the British people’s energy prices, yet it certainly grates against our broader net zero ambitions.
It is a real shame that the Government intend to strike clauses 272 and 273 from the Bill, not least because all we seek is surety for smaller generators that their investment is worthwhile. The other day, my hon. Friend the Member for Southampton, Test gave the example of a hydro turbine that costs in excess of £1 million. It is incredibly difficult for a small-scale producer to make that investment without a guarantee, which the clauses would provide, that it will see a return in the form of a guaranteed purchase by energy suppliers. None the less, although we have not heard in detail why the Government are opposed to the clauses, we are where we are.
As I said, I want to focus most of my comments on new clause 52. I am a little surprised that the Government feel the need to rework clause 271, but we should none the less take the concession for what it is. New clause 52 is incredibly welcome, as it will legally require Ofgem to ensure that its decisions assist the Government’s drive to deliver net zero by 2050. Reaching net zero is, of course, one of the most urgent and challenging tasks that we face as a nation, and it is right that we pull every lever at our disposal to achieve it. I am pleased that the Government have conceded that the new clause is a necessary step, given that they previously stated that Ofgem’s existing decarbonisation objective was sufficient. That objective was set in 2010, it is limited to targeting greenhouse gases only, and it has no specific timescale attached to it.
The move to update Ofgem’s duties so that it has a statutory requirement to support the UK in reaching our net zero emissions targets has huge backing from every part of the energy industry, as well as from consumer campaigners and climate activists. It was recommended by the Skidmore review and by the Climate Change Committee earlier this year. Crucially, it has the support of Ofgem itself. Ofgem’s CEO, Jonathan Brearley, said that the net zero duty is
“the best option, not only from a climate perspective, but to ensure a secure, low-cost energy future.”
Ofgem’s support is most welcome, and the new duty makes its responsibility for ending our reliance on fossil fuels crystal clear. Making net zero one of its core duties will empower Ofgem to deliver the long-term investment in our electricity network and grid that the National Infrastructure Commission has said is critical to achieving the large-scale shift to renewable energy and low-carbon transport and heating that we need. Indeed, there seems to be a broad consensus in the industry that the lack of a clear duty that specifically refers to our net zero targets is a key reason for the historical underinvestment in the grid. This overdue duty can play a key role in reversing that trend and putting an end to a situation in which the absence of investment in the grid has made it very difficult for new renewable infrastructure to be connected to it.
Placing this duty on a national regulator that was created to serve consumers is, in effect, a statutory recognition that the needs of consumers and the planet are very much aligned. The long-term investment that will help us to achieve net zero will also mean sustainable, cheaper forms of energy for consumers and an end to the volatility in the market that has caused such misery to millions of households across the country in recent years. I therefore fully support new clause 52, and I pay tribute to everybody, across parties, who was involved in bringing it to this stage.
Andrew Bowie
It is a pleasure to see you back in the Chair and to serve under your chairmanship, Mr Gray.
Andrew Bowie
Well, I hope it will remain a pleasure—I am sure it will. Here we are on day eight, sitting 15 of the Committee. There has been a comprehensive debate on the clauses, and I thank all Members on both sides and from all three parties represented for their full contributions. I will respond to some of the points that were made.
The hon. Member for Stretford and Urmston just referred to the Ofgem net zero duty. I am delighted that the Committee has welcomed the Government’s commitment on the duty and our new clause, and I pay tribute again to Members across the House and in the other place for their constructive dialogue on the issue. I confirm to the hon. Member for Kilmarnock and Loudoun that the measure will allow for anticipatory investment. I have engaged with industry and others, and they are confident that that is the case and welcome this step.
Community energy projects can have real benefits for the communities in which they are based, which is why so many Members supported the private Member’s Bill on the issue. However, the Government and I do not believe that every consumer should have to bear the cost of such projects. That does not seem a fair way to fund them.
Kerry McCarthy (Bristol East) (Lab)
Will the Minister explain why he does not think that consumers should bear the cost of community energy projects but does think that they should bear the cost of new hydrogen, through the hydrogen levy? That seems rather inconsistent.
Andrew Bowie
As the hon. Lady knows, we are listening and acting on the concerns raised by many in this place and the other place, including on Second Reading in the Commons, when issues regarding the hydrogen levy were raised. I am sure that we will have much more to say on that when the Bill comes back to the Floor of the House.
I am also not convinced that the Lords amendments tackle the real issues faced by community energy groups: high start-up costs and lack of expertise. I have had positive engagement with Members on that. The Government are therefore considering other options that could tackle such issues in a fairer and more proportionate way ahead of Report stage. I hope that members of the Committee and those who are following our proceedings with interest are reassured by those comments.
The hon. Member for Kilmarnock and Loudoun spoke at length, as did other Members—I hope to cover most contributions in my response—about coal. The hon. Gentleman specifically mentioned exporting coal to Germany. It is rather ironic that the only reason that Germany is importing coal is its nonsensical position on nuclear and new nuclear power—a position that is shared by the Scottish Government in Edinburgh. The hon. Gentleman might want to take that away and consider it.
The hon. Gentleman also mentioned that he disagreed with the comment by my hon. Friend the Member for South Ribble that the debate in Committee the other day was one of the “most jaw-dropping” moments of her political career, given the events of the week. I concur with the hon. Gentleman that that was a bit surprising, given that this was the week that a former leader of Aberdeen Labour claimed that Labour’s energy policies were the “final straw”—this is a Labour councillor saying this—and that
“Margaret Thatcher never delivered a more brutal put down of an industry than that delivered by Keir Starmer in Edinburgh.”
In the same week, a Green Minister in the Scottish Parliament faced a vote of no confidence, the Whip was withdrawn from a former SNP Minister, and a person of interest in an ongoing police investigation professed their innocence but could not do the same for another person of interest, to whom she is married. The last week was quite an exciting week for politics—I agree.
Our reliance on coal is rapidly diminishing, but there is still a need for it in industries such as steel and cement, so now is not the right time to make these licensing changes. I thank colleagues, including my hon. Friend the Member for South Ribble, for highlighting the role that these industries play in our constituencies, where they provide jobs and contribute to the economy.
Alan Brown
On coalmines, what does the Minister think about the suggestion from the hon. Member for Hitchin and Harpenden that any new licences could be supplied on the condition that the coal be sold only on the domestic market?
Andrew Bowie
I would not like to shut down any of the ideas put forward by my hon. Friend the Member for Hitchin and Harpenden; the Government will consider all suggestions for the future licensing of coalmines. I do not want to go down a rabbit hole and make commitments on matters for which I may not be responsible in future.
I found the comments by my right hon. Friend the Member for Elmet and Rothwell fascinating, as I do all his comments. I was particularly interested in his intervention on the hon. Member for Southampton, Test regarding the situation in Germany, which I also referenced.
A number of Opposition Members mentioned the coalmine in Cumbria. The decision by the Secretary of State for Levelling Up, Housing and Communities followed a comprehensive planning inquiry, which heard from 40 witnesses, and considered matters including the demand for coking coal and its suitability, climate change, and impact on the local economy. The full reasons for the Secretary of State’s decision are set out in a published letter, which should be read in its entirety, but he concluded that
“there is currently a UK and European market for the coal,”
and that
“it is highly likely that a global demand would remain”.
Alongside that, the UK is working to support the decarbonisation of steel and other industries that still rely on coke and coal through our £315 million industrial energy transformation fund, which helps businesses with high energy use to cut their energy bills and carbon emissions by investing in energy efficiency and low-carbon technologies.
For those reasons, I do not agree with the hon. Members for Bristol East, for Southampton, Test, and for Sheffield, Hallam. A complete ban is not appropriate, and risks our having to meet future demand for the industries that I mentioned from our own resources. The hon. Member for Sheffield, Hallam—I am sorry that she is not here today—mentioned the Government’s commitment to COP26. As I said in my opening remarks, coal’s share of our electricity supply has already declined significantly in recent years; it has gone from providing almost 40% of our electricity in 2012 to less than 2% in 2021. I do not agree with professions from Opposition Members that we are surrendering our lead on climate issues to the Biden Administration in the USA. It is not for me to question the decisions of that Administration, or to say whether they are for good or ill, but they have just approved a drilling licence in the Arctic circle, so I suggest that our lead on these issues remains extant.
Alan Brown
Remember, we are talking about comments from not just Opposition Members; comments about us losing our international lead were made by the right hon. Member for Kingswood, who did a net zero review; the COP26 President, the right hon. Member for Reading West; and the chair of the Climate Change Committee. That is three senior Tories who are saying that the UK is losing its international lead.
Andrew Bowie
I recognise that. I speak with my right hon. and hon. Friends on thisissue and others, and I understand the concerns, including those of Committee members. However,I reassure all right hon. and hon. Members that phasing out unabated coal power generation within timeframes that keep 1.5°C within reach remains a key UK Government priority, and the Government are leading on that. That builds on our COP26 energy transition legacy, which included securing agreement to accelerate efforts
“towards the phasedown of unabated coal power”
in the Glasgow climate pact, our co-leadership of the Powering Past Coal Alliance, and launching an international just transition declaration at the Glasgow summit. I would be very surprised if we did not return to some of these issues on Report, but I hope that the Committee will carefully consider my remarks.
Alan Brown
I had not expected to be given that privilege, Mr Gray. I remain unconvinced by the Minister’s arguments, and I refer him again to the fact that comments about the UK losing its international leadership have come from senior members of his party. He really should reflect on that, instead of arguing that opening new coalmines is the way forward.
Question put, That the clause stand part of the Bill.
Dr Alan Whitehead (Southampton, Test) (Lab)
On a point of order, Mr Gray. May I ask for clarification of the voting process on clause 271 and Government new clause 52? As I am sure all Committee members are aware, new clause 52 will effectively replace clause 271, with the consent of each side. However, although we will be voting on clause 271 stand part today, we will not be voting on new clause 52 until the end of the Committee’s business. We could therefore conceivably end up with clause 271 being dropped but not replaced by new clause 52. Is it within procedure to retain clause 271 but assume that new clause 52 will replace it in due course, or are there other ways of doing it?
The Chair
The hon. Gentleman makes an interesting point, but he is of course not correct.
The Chair
Well, I am answering the question in that case. The answer is that I will put the Question on clause 271 now and, depending on what the majority decides, it will either remain in the Bill or be removed. At the end of consideration, we will come to new clause 52. If there is a majority for it, it will be added to the Bill. If there is not, it will not. The two are not conditional on each other; they are entirely separate.
Clause 271
GEMA general duties relating to climate change
Question put, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Government amendment 20.
That schedule 7 be the Seventh schedule to the Bill.
Clause 133 stand part.
That schedule 8 be the Seventh schedule to the Bill.
Clauses 134 and 135 stand part.
Government amendment 19.
Andrew Bowie
I now return to part 4 of the Bill, which relates to the independent system operator and planner, or ISOP.
Clause 132 introduces schedule 7. The purpose of the schedule is to empower the Secretary of State to make transfer schemes to create the ISOP and give it the capacity to carry out its functions. As discussed already, the ISOP will be founded on the existing capabilities and functions of National Grid Electricity System Operator and, where appropriate, National Grid Gas. That will require several transactions between Government, National Grid plc and other relevant parties, because the property that the ISOP requires is not currently owned by a single entity. The transfers could include matters such as personnel, IT systems, physical assets, methodologies, models, data, and other resources and inputs used by the existing entities in performing their functions.
Schedule 7 sets out a set of principles, procedures and expectations in relation to the transfer scheme that will help provide clarity to affected parties. For example, it outlines that the Government are required to consult the transferor or transferors when the transfer scheme power is expected to be used. Not all the detail of the scheme can be determined in advance, so the Bill also includes a small number of time-limited powers to make regulations, which include regulations to provide further details to all parties, including third parties, on procedures for agreeing and paying compensation.
Government amendment 19 makes a minor procedural amendment to clause 275, to include the Treasury in the list of persons that can make regulations under the Bill. Amendment 20 clarifies that, because regulations under paragraph 9 of schedule 7 deal with financial matters, they can only be annulled in the House of Commons.
Clause 133 introduces schedule 8, which relates to pensions. As part of the transfer of functions, some employees will transfer into the ISOP. The purpose of the schedule is to allow the Secretary of State to separate the pension arrangements of the ISOP and to provide scope for various forms of reorganisation that may be appropriate in the light of the transfer. That includes making provision for the responsibility for the affected employees’ qualifying pension schemes and protecting the value of their benefits during the transfer. In exercising powers, the Secretary of State must ensure that the arrangements made for each employee’s pension provision is, in all material respects, at least as good immediately after any transfer-related changes are made as they were before that point.
Clause 134 grants the Secretary of State the power to provide financial assistance to the ISOP—that is, to draw on the financial resources available to Government in the kind of circumstances when the existing electricity system operator and gas system operator would have relied on the financial strength of their corporate group to raise capital sums. The Secretary of State will have the power to set conditions on the financial assistance provided, which may include conditions about repayment with or without interests or other return. In the highly unlikely situation that the ISOP faces financial difficulty, the power would also allow the Secretary of State to step in and avoid any disruption to the electricity and gas sectors.
Finally, clause 135 removes the barriers, in section 7 of the Electricity Act 1989 and section 7B of the Gas Act 1986, to payments raised in one sector being used to benefit consumers in the other. It also introduces a provision, in each Act, to expand licence holders’ statutory duties and require them to have regard to the interests of consumers of the other energy sector where directed by their licence. The removal of such barriers is fundamental, because it will enable the ISOP to co-ordinate and ensure strategic planning across the energy sector more effectively.
Dr Whitehead
We come to a part of the Bill that we should have discussed a couple of weeks ago: clauses 132 to 139. When we discussed the rest of the business relating to the ISOP, these debates were moved by the Government towards the end of the consideration of later clauses in the Bill. At the time, I thought that was because there was some blockbusting new clause that the Government were thinking of introducing, which was not quite down the slipway at that point. I thought it would appear when we considered the clauses today.
I was disappointed to see that nothing has appeared. There are two Government amendments that were there previously, and nothing in the way of new clauses. I assume the reason for discussing the provisions now—although the Minister may have an interesting explanation up his sleeve—may well be because Ofgem has just produced a consultation—[Interruption.] No, the Minister is shaking his head. In any event, had the Minister consulted with Ofgem about whether it was going to produce a consultation on transfers and various other things, then he would have found that they have produced a consultation, “Funding the transition to a Future System Operator”, which was published today. The Minister will understand that not a great deal of time has elapsed since the publication of that consultation.
That consultation is very relevant to the provisions we are discussing. If the Minister did think the consultation would be published in time, it would have been helpful of him to bring that to the Committee’s attention. Apparently, however, there are different reasons for discussing these provisions later in the Committee cycle than planned.
A headline in Utility Week said the full costs of the transition to a future system operator could come to about £392 million. I read that headline but I am too mean to go behind the paywall of Utility Week to read the rest of the article. I sought out the Ofgem consultation instead and got the full picture. The consultation indicates that this level of cost for the transition is accurate. In clauses 132 to 139, provision is given for the bringing together of the various agencies’ present responsibilities for what would be the new independent system operator. That extends beyond just taking the National Grid ESO away from National Grid and putting it into ISOP. It involves other agencies—the Minister is absolutely right.
In this instance, however, the prime issue of the transition is of course the ESO itself. At the moment and for a long time, the ESO has had a relationship with National Grid involving separation by Chinese walls. It was, in effect, owned by National Grid and so was part of the National Grid family of companies, but over the recent period, since the ESO was set up, its operation has been separated from that of National Grid. Previously, we have discussed the extent to which the Chinese walls were strong enough for what ESO was doing in relationship to what National Grid might be doing—for example, potential conflict on interconnectors, with National Grid owning at least part of an interconnector while ESO was planning for interconnectors overall.
The fact that the separation will take place and that the business of the ESO will be transferred fully into the ISOP is important. That will complete the process of setting up the ISOP properly, so that it can operate fully independently from day one—in Committee, we have expressed strong interest in ensuring that. However, with the Ofgem consultation, the issue of compensation for those transfers arises to some extent. According to the consultation, part of the transfer arrangements relates to transferring personnel across and part to what assets and so on will be transferred. What is not entirely clear in the consultation is also alluded to in the provisions in the group, in particular schedule 7.
Paragraph 8 of schedule 7, headed “Compensation”, appears to start talking about compensation in general terms for, as it were, the loss to National Grid of its ownership of the ESO, as well as of the various things relating to the transfer of assets and individuals. Compensation would be couched in two parts: literally, which desks and pot plants are going over to the ISOP, with personnel and various other things, and what the compensation for that is, presumably; and compensation for the fact that the ESO was part of the National Grid corporate family and no longer will be.
I am not clear whether the provision on compensation encompasses that consideration. If so, what might that consideration be? Do the Government have a figure in mind for compensating National Grid for its losing ESO to the ISOP? Is that facilitated through these clauses or a separate arrangement to be arrived at? In other words, do the clauses deal just with compensation relating to bodies, pot plants and desks, or with compensation more widely?
Dr Whitehead
Good.
As I was saying, this is potentially important, because the clauses in this part of the Bill relate to the Secretary of State’s ability to provide the ISOP with finance. Will the ISOP undertake the job of providing the compensation due under the clause—presumably it would be provided with money by the Government to do that—or will the Government deal with that separately before the ISOP is set up?
There is also an important point about compensation for the loss of the ESO to the ISOP. It would seem inappropriate for the ISOP to pay compensation to National Grid, given its removal from National Grid in the first place. I therefore assume that other mechanisms will be in place to provide that compensation. If that compensation is paid, there are provisions in the Bill allowing for such payments to be recovered by companies involved in the process in the course of their activities. [Interruption.] I will pause for a moment while the Minister consults his Whip.
Dr Whitehead
This is something I specifically want the Minister to say something about. It is important that we get it right.
Assuming that compensation is given for the loss of the ESO and the companies concerned can recover that, do the Government intend for the ISOP to have a part in the mechanism whereby costs are recovered through standing charges on bills? As the Minister knows, standing charges are substantially made up of a combination of charges for TNUoS and DUoS—transmission network use of system and distribution use of system—and a balancing charge, and, as he and other hon. Members will know, standing charges are increasing substantially as a proportion of our electricity bills. They are now about 25% of our energy bills.
It looks as if the compensation, if it can be recovered by somebody—I assume it could be recovered one way or another by National Grid in its network charges, or by the ISOP in what it eventually contributes to the standing charge—will eventually work its way into the standing charge, and hence on to customers’ bills. That makes it important to understand what the Government have in mind about what compensation should be paid to National Grid for the loss of ESO and its transfer to the ISOP.
It may be that there has been a nice agreement that no one will pay anyone compensation, and National Grid will just hand over ESO to the ISOP. I suspect that is not the case, but I have not seen anywhere—and it is not explicit in the consultation—what the level of compensation might be, who will pay it, how it might be transferred to bills and standing charges, if necessary, and how the process overall might work. It would be helpful if the Minister could give us an understanding of all that. It would certainly enable us to better judge schedule 7, as it relates to the process of how those transfers take place and what their consequences are.
Andrew Bowie
On the question of why we have returned to these clauses, I am sorry that I was unable to turn up today with a blockbuster moment for the Committee. I know they were all expecting it and waiting with bated breath. Unfortunately, it is a simple matter of procedure. We temporarily skipped over the remaining clauses in part 4 to ensure that the necessary Ways and Means motion could be agreed by the House. I am pleased to confirm that the resolution was obtained on Tuesday, allowing us—I was expecting a “Hear, hear!”—to continue with clauses 132 to 139.
The Ways and Means resolution was necessary as a result of provisions that confer power on the Treasury to make regulations setting out the way taxes have effect in connection with a transfer of assets from one body to another. It was impossible to proceed with debate on the clauses until the motion was passed by the House. That has now been done, so we can proceed.
On the consultation that was published this morning, I cannot mandate when Ofgem publishes its consultations, so unfortunately that was not a consideration. However, we note that the Ofgem consultation launched today, and I will of course consider it in detail. I am happy to provide hon. Members with more detail in writing should they wish.
The hon. Member for Southampton, Test spoke about transfers. The Bill provides multiple steps for agreement on the value of compensation: first, simple agreement between parties—in this case the Secretary of State, National Grid and the owners of National Gas—secondly, in a situation of non-agreement, the joint appointment of an independent valuer to assess the value of the assets to be transferred; or, thirdly, as a fall-back option, the appointment of an independent valuer by the Secretary of State on behalf of both parties. The framework of considerations to be made by the independent valuer will be set out in regulations to be made under the Bill.
The entire process is an ongoing commercial transaction, so the Government are limited in the extent of the information they can provide at this point, although I recognise the importance of the hon. Gentleman’s questions. I will respond specifically to his point about the standing charge and his worry that that could have an effect on bills. We do not expect costs to rise at all as a result of the establishment of the ISOP. The ISOP will be funded by Government, and its ongoing operations will continue to be supported by funding from the network balancing charges at a level determined through a price-control mechanism, much like the current gas and electricity system operators are. However, we expect the ISOP to enable a long-term reduction in costs compared with the status quo.
Dr Whitehead
I think the Minister just said that he expects compensation to be included in network charges, which means that in the end it will go on standing charges for customers. There will be an effect on customers’ bills.
Andrew Bowie
I reiterate that we are not expecting any increase in customers’ bills as a result of the creation of the ISOP. There will be no increase. We expect the ISOP to enable a long-term reduction in costs, so its creation will have the opposite effect on customers’ bills. Future network decisions will be built on the expert and impartial advice of the truly whole-system body that many in the industry and outside it have been calling for for some time.
Dr Whitehead
I appreciate that the Minister cannot tell me—presumably because of an ongoing discussion relating to commercial companies—what the compensation for National Grid is likely to be. However, I assume that, in stating that he cannot tell me, he has confirmed that that will be part of the transfer arrangements. I was trying to distinguish between the compensation for pot plants and desks, and compensation for the loss of the ESO by National Grid.
That leads us to an unsatisfactory position in which we do not know how much the compensation will be. Presumably, we have to take it on trust that the Government will be fairly rigorous about ensuring that the compensation is proportionate to the actual loss, but I am not sure how it will be determined. Sorry, Mr Gray, this is a long intervention.
The Chair
No, it is a speech. The Minister finished, and therefore the hon. Member is making a speech.
Dr Whitehead
Good, I can go on forever then. I was trying to make my remarks as brief as possible in order to accommodate the Minister’s previous comments, so I will just round them off.
We do not know the detail of the procedure for determining compensation, we do not know even what ballpark figure the Government have in mind for compensation to National Grid for the loss of the ESO, we do not know what strategies the Government might adopt in their negotiations on what the compensation might consist of, and we do not know whether there is any process of arbitration if National Grid, for example, thinks that the compensation it receives is not the right amount, or what mechanisms—perhaps under the Bill—would enable the final amount to be determined to the satisfaction of all sides.
We do know that some compensation may find its way on to network charges, one way or another. Therefore, it is important for the economy and the effectiveness of network charges that we at least have a ballpark figure for the sort of compensation that might be considered. If the Government are minded to provide huge amounts of money in compensation to National Grid, that might have an inflationary effect on network charges; if they have a more robust view of what the compensation should look like, that would have a lesser effect on charges. Either way, as I think the Minister will agree, we are in a position of some fog.
As the Bill makes progress we legislate for all this to happen, we still do not have a clear handle on what those procedures will look like or the money that might be involved. I do not know whether the Minister will respond to this speech, but I think that he should be able at least to write to us about the procedure and the arrangements. Ideally, that would include further and better particulars on the range of compensation, while not giving away anything commercially sensitive. Alternatively, he could take His Majesty’s loyal Opposition into a position of trust and get around a table with us to talk these things through, so that, between us, we are clear about how they might proceed.
Andrew Bowie
Let me briefly answer those points. As I have set out, this is an ongoing commercial discussion between parties. The Bill provides multiple steps for agreement on the value of compensation, which has yet to be determined, and I do not think that it would be good governance to insert a ballpark figure into the Bill. I cannot underline enough that the creation of the ESO will not have any adverse effect on consumers’ bills. In fact, as a result of it, we will see bills reduce in time. I am happy to write to the hon. Gentleman with more information.
Question put and agreed to.
Clause 132 accordingly ordered to stand part of the Bill.
Schedule 7
Independent System Operator and Planner: transfers
Amendment made: 20, in schedule 7, page 282, line 7, at end insert—
“(3A) A statutory instrument containing regulations under this paragraph is subject to annulment in pursuance of a resolution of the House of Commons.”—(Andrew Bowie.)
This amendment provides for a statutory instrument containing regulations made by the Treasury under paragraph 9 of Schedule 7 to be subject to annulment in pursuance of a resolution of the House of Commons.
Schedule 7, as amended, agreed to.
Clause 133 ordered to stand part of the Bill.
Schedule 8 agreed to.
Clauses 134 and 135 ordered to stand part of the Bill.
Clause 136
Principal objective and general duties of Secretary of State and GEMA under Part 4
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Clause 137 stand part.
That schedule 9 be the Ninth schedule to the Bill.
Clause 138 stand part.
Government amendment 18.
Clause 139 stand part.
Andrew Bowie
Clause 136 ensures that when carrying out various functions in relation to the ISOP under the Bill, the Secretary of State and Ofgem must have regard to their principal objective and general duties as defined in the Electricity Act 1989 and the Gas Act 1986. The principal objective of the Secretary of State and Ofgem can be characterised as protecting the interests of existing and future electricity and gas consumers. General duties include promoting effective competition in the energy sector, having regard to security of supply and securing a healthy energy market.
It is relatively common to extend the application of those principles where a new Act gives new, freestanding functions to the Secretary of State or Ofgem. The clause states that the Secretary of State must have regard to the principal objective and general duties when carrying out new functions relating to designation under clause 120 or when making an order that an existing transmission licence becomes the ISOP’s electricity system operator licence.
Clause 137 introduces schedule 9, which contains necessary consequential amendments to the Gas Act and Electricity Act to enable the ISOP and its licensable activities to be integrated into the existing framework of the energy system regulated by Ofgem.
Clause 138 contains provisions on the interpretation of terms used in part 4 of the Bill. I draw hon. Members’ attention in particular to subsection (3), which is intended to make it clear that whenever part 4 includes a proposition about the ISOP’s functions, that is to be understood as applying to any and all of the ISOP’s functions, whether provided by the Bill, by other legislation, or as functions ancillary to them.
Clause 139 concerns the limited regulation-making powers in part 4. Government amendment 18 is consequential on Government amendment 20, which we have already discussed. It ensures that regulations made by the Treasury under schedule 7(9) are not subject to the negative procedure. As these are financial regulations, the intention is for them to be laid before the House of Commons only and approved by the House of Commons alone.
Dr Whitehead
These measures are essentially consequential on those we have already discussed. I have no particular comment to make on them other than to say hooray; I am happy to let them go through undiscussed.
Question put and agreed to.
Clause 136 accordingly ordered to stand part of the Bill.
Clause 137 ordered to stand part of the Bill.
Schedule 9 agreed to.
Clause 138 ordered to stand part of the Bill.
Clause 139
Regulations under Part 4
Amendment made: 18, in clause 139, page 122, line 32, at end insert—
“(2) Subsection (1) does not apply to regulations under paragraph 9 of Schedule 7.”
This amendment excludes regulations made by the Treasury under paragraph 9 of Schedule 7 from the provision about negative procedure in Parliament made by clause 139. This is consequential on Amendment 20.—(Andrew Bowie.)
Clause 139, as amended, agreed to.
New Clause 8
Key definitions
“(1) This section applies for the purposes of this Chapter.
(2) ‘Carbon storage licence’ means a licence granted, or having effect as if granted, by the OGA under section 18(1) of the Energy Act 2008 (and references to a ‘licensee’ are to a person who holds such a licence).
(3) ‘Exploration operator’, in relation to a carbon storage licence, means a person who is responsible for organising or supervising—
(a) the carrying on of exploration, within the area within which activities are authorised under the licence, with a view to, or in connection with, the carrying on of activities within section 17(2)(a) or (b) of the Energy Act 2008, or
(b) the establishment or maintenance in a controlled place (as defined in section 17 of the Energy Act 2008) of an installation for the purposes of such exploration.
(4) ‘Carbon storage information’ means information acquired or created by or on behalf of a licensee in the course of carrying out activities under the licensee’s carbon storage licence.
(5) ‘Carbon storage samples’ means samples of substances acquired by or on behalf of a licensee in the course of carrying out activities under the licensee’s carbon storage licence.
(6) ‘Sanctionable requirement’ means a requirement imposed on a person by or under a provision of this Chapter which, by virtue of the provision, is sanctionable in accordance with this Chapter.—(Andrew Bowie.)
NC8 to NC28 and NS1 and NS2 make provision about carbon storage information and samples, and the powers of the OGA, corresponding to the provision made by Chapters 3, 5 and 6 of Part 2 of the Energy Act 2016 in respect of offshore petroleum. They are intended to form new Chapter 4A in Part 2. This new clause defines key terms for the purposes of the intended new Chapter.
Brought up, and read the First time.
The Chair
With this it will be convenient to discuss the following:
Government new clause 9—Retention of information and samples.
Government new clause 10—Preparation and agreement of information and samples plans.
Government new clause 11—Information and samples plans: supplementary.
Government new clause 12—Information and samples coordinators.
Government new clause 13—Power of OGA to require information and samples.
Government new clause 14—Prohibition on disclosure of information or samples by OGA.
Government new clause 15—Power of Secretary of State to require information and samples.
Government new clause 16—Power of OGA to give sanction notices.
Government new clause 17—Enforcement notices.
Government new clause 18—Financial penalty notices.
Government new clause 19—Revocation notices.
Government new clause 20—Operator removal notices.
Government new clause 21—Duty of OGA to give sanction warning notices.
Government new clause 22—Publication of details of sanctions.
Government new clause 23—Subsequent sanction notices.
Government new clause 24—Withdrawal of sanction notices.
Government new clause 25—Sanctions: information powers.
Government new clause 26—Appeals in connection with Chapter.
Government new clause 27—Procedure for enforcement decisions.
Government new clause 28—Interpretation of Chapter.
Government new schedule 1—Permitted disclosures of material obtained by OGA.
Government new schedule 2—Carbon storage information and samples: appeals.
Andrew Bowie
New clause 8 provides the key definitions for the purposes of this new chapter, enabling the effective understanding of all carbon storage information and samples provisions. The powers provided by this chapter specifically support the Oil and Gas Authority, the business name of which is the North Sea Transition Authority, in its role as a regulator of carbon storage.
New clause 9 provides the Secretary of State with the power to make regulations on the retention of information and samples acquired by carbon storage licensees acting under the authority of the NSTA. The provisions will align carbon storage information requirements with existing petroleum licensing provisions, as established in the Energy Act 2016.
The specific type of information and samples that licensees will be required to retain will be set out in regulations. That will be alongside the form and manner in which they are to be retained, the period of retention and the events that trigger the commencement of such requirements. The various exploration, appraisal and monitoring activities that will be carried out on and under the seabed by carbon storage licence holders will yield important information, supporting the NSTA to carry out its regulatory functions.
New clauses 10 and 11 establish requirements for the preparation and agreement of information and samples plans. These are agreements between the NSTA and a carbon storage licence holder that set out what should happen to carbon storage information and samples held by the licence holder before the occurrence of certain carbon storage licence events. Provisions involving information and samples plans were introduced for petroleum licences in the Energy Act 2016. We therefore expect them to provide the same benefits for carbon storage licence events.
New clause 12 establishes provisions for the designation of information and samples co-ordinators, which will monitor compliance with obligations imposed under the new chapter, uphold the requirements of any information and samples plans, and help to protect against the risks of data loss during a licence event. Information and samples co-ordinators are expected to prove a valuable aid in respect of data reporting compliance. That is evident in the instrumental role they currently play in relation to petroleum licensees under the Energy Act 2016.
New clause 13 establishes powers for the NSTA to obtain information and samples collected through carbon storage activities to support its regulatory functions. This includes information and samples held by persons in accordance with regulations made under new clauses 9 and 10.
New clause 14 prohibits the NSTA from disclosing any information and samples it holds in accordance with the powers in this chapter, subject to the provisions of new schedule 1 and the power of the Secretary of State to obtain information from the NSTA in new clause 15. This will provide carbon storage licensees with the reassurance that any information and samples provided to the NSTA in support of their regulatory functions will not be allowed to be disclosed, except in specified circumstances.
New schedule 1 sets out the circumstances in which, to whom, and for what purposes the NSTA can disclose information. This includes providing for disclosure in accordance with regulations made by the Secretary of State that may permit protected material to be published, or made available to the public, after a specified period. The public disclosure of this information after a suitable period of confidentiality will support effective regulation by the NSTA.
New clause 15 provides powers to the Secretary of State to require information and samples held by, or on behalf of, the NSTA. It will align powers for carbon storage information and samples with the equivalent powers established for petroleum information and samples under the Energy Act 2016. This power will be used to enable the Secretary of State to carry out statutory functions, to monitor the performance of the NSTA, or to provide information for the purposes of parliamentary proceedings. Carbon storage licences return to the Government once storage sites have been closed for a designated period, and the Government are liable for any potential future leakage.
I turn now to new clauses 16 to 25. New clause 16 provides the NSTA with powers to issue sanction notices to persons who fail to comply with the requirements imposed on them under this chapter of the Bill. Such sanction notices can be in the form of an enforcement, a financial penalty, a revocation or operator removal notices. New clauses 17 to 20 make the necessary provisions for each of those types of notice. Importantly, new clause 21 places a requirement on the NSTA to issue a sanction warning notice ahead of any sanction notice that it proposes to issue under the powers established in new clause 16.
New clause 22 establishes that the NSTA may publish details of any sanction notices issued under new clause 16, including details of any sanction notice that is cancelled or withdrawn. New clause 22 also provides that the NSTA may not publish information that it considers to be commercially sensitive, not in the public interest or otherwise inappropriate to publish. New clause 23 places a restriction on the NSTA issuing more than one sanction notice in respect of the same contravention. New clause 24 provides the NSTA with the power to withdraw any sanction notices issued. Finally, new clause 25 enables the NSTA to require specified documents or information to support an investigation into whether a sanction notice ought to be provided under new clause 16.
New clause 26 introduces new schedule 2 to the Bill. Alongside new schedule 22, new clause 26 provides for an appeal to be made to the first-tier tribunal against any decision made by the NSTA. This is in relation to the NSTA exercising its new power to require carbon storage information samples. As I am sure Committee members will agree, the right of appeal for licence holders is a necessary and important part of conferring new regulatory powers on the NSTA.
New clause 27 will require the NSTA to determine and publish the procedure it proposes to follow in its decision making when issuing a sanction notice under new clause 16, which ensures public transparency in how the NSTA will enforce the sanctionable requirements and provides clarity for licence holders in respect of the NSTA’s procedures.
Finally, new clause 28 provides definitions to aid the interpretation of the provisions relating to carbon storage information samples detailed in this chapter. The definitions cross-reference the relevant existing legislation where appropriate.
Dr Whitehead
This group consists primarily of new clauses that the Government introduced. A substantial number of new clauses relate to the very sensible business of securing samples and various other things that can be of use in the regulation of the process and quality control, and in various other things relating to carbon capture and storage activity. So far, so good. These are certainly sensible clauses that establish arrangements for disputes and various other things, such as sanctions for when samples are not properly provided and so on—all good stuff.
However, there is an important point about the collection and retention of samples, as set out in the factsheet, which was subsequently published, that the Minister kindly provided me with when he said he intended to produce these new clauses. By the way, the factsheet refers to the NSTA, but the legislation refers to the OGA—again, maybe that is something we can discuss later. The Government say:
“We are legislating to provide the NSTA with appropriate powers to require carbon storage licensees to retain and report information and samples gathered as part of activities associated with the geological storage of carbon dioxide, and to enable the NSTA to publicly disclose this information after a suitable confidentiality period.”
I understand and appreciate the need for a suitable confidentiality period, but it is really important that the samples and data collections are available publicly for the greater benefit of the sector as a whole, in terms of its future development of carbon capture and storage. Government new clause 14 has a fairly fierce title: “Prohibition on disclosure of information or samples by OGA”. It effectively prohibits disclosure except under slightly unclear circumstances set out in new schedule 1, which states that the material may nevertheless be published and put into the public domain, but there is no real definition of how that may be done.
Andrew Bowie
As ever, I do not have all the information the hon. Gentleman is asking for at my fingertips, but I am happy to write to him with more detail on exactly how we will proceed.
On information samples being stored, and how they are publicly disclosed, as in the petroleum industry, the reporting of information to the North Sea Transition Authority will allow it to be securely stored in the NSTA controlled online data systems, such as the national data repository, or as open data in the NSTA data centre, which are both accessible via any internet browser.
Information in the national data repository becomes publicly accessible, online, upon disclosure. All information in the NSTA open data centre is disclosed information and is publicly accessible online. Reported samples are held by the British Geological Survey on behalf of NSTA. Disclosed geological samples are physically accessible by the public at the British Geological Survey geological sample storage facility in Nottinghamshire.
The hon. Gentleman asks why we are not fully changing the name of the OGA to the NSTA. We understand that the name change is important. We are considering legislative options for amending the statutory name of the Oil and Gas Authority. However, as was outlined in the other place, if we legislatively changed the OGA’s name to the NSTA, we would need to address all the instances in which the OGA is mentioned in primary and secondary legislation, and any partial name change could undermine or change the North Sea Transition Authority’s statutory functions, powers and objectives. I promise that I will write to the hon. Gentleman will more information on the other points he raised.
Question put and agreed to.
New clause 8 accordingly read a Second time, and added to the Bill.
New Clause 9
Retention of information and samples
“(1) Regulations made by the Secretary of State may require—
(a) specified licensees to retain specified carbon storage information;
(b) specified licensees to retain specified carbon storage samples.
(2) ‘Specified’ means specified, or of a description specified, in regulations under this section.
(3) Regulations under this section may include provision about—
(a) the form or manner in which information or samples are to be retained;
(b) the period for which information or samples are to be retained;
(c) the event that triggers the commencement of that period.
(4) Regulations under this section may provide for requirements imposed by the regulations to continue following a termination of rights under the licensee’s carbon storage licence (whether by transfer, surrender, expiry or revocation and whether in relation to all or only part of the licence).
(5) Regulations under this section may not impose requirements which have effect in relation to particular carbon storage information or particular carbon storage samples at any time when an information and samples plan dealing with the information or samples has effect.
(6) Requirements imposed by regulations under this section are sanctionable in accordance with this Chapter.
(7) Before making regulations under this section, the Secretary of State must consult each licensing authority that may under section 18(1) of the Energy Act 2008 grant a licence in respect of the carrying on, in a place to which the regulations would apply, of activities within section 17(2) of that Act.
(8) Regulations under this section are subject to the negative procedure.”—(Andrew Bowie.)
This new clause, which is intended to form part of new Chapter 4A in Part 2 (see the explanatory statement for NC8), enables the Secretary of State to make regulations about the retention of information acquired or created, or samples acquired, by or on behalf of the holder of a carbon storage licence.
Brought up, read the First and Second time, and added to the Bill.
New Clause 10
Preparation and agreement of information and samples plans
“(1) The responsible person must prepare an information and samples plan in connection with any of the following (each ‘a licence event’)—
(a) where a licensee is a company, a change in control of the company within the meaning of paragraph 6 of Schedule 1 to the Carbon Dioxide (Licensing etc.) Regulations 2010 (S.I. 2010/2221) (inserted by Schedule 6 to this Act);
(b) a change in the identity of—
(i) the exploration operator under a carbon storage licence, or
(ii) where a storage permit has been granted under a carbon storage licence, the operator in relation to the storage permit (within the meaning of regulation 1(3) of the Carbon Dioxide (Licensing etc.) Regulations 2010);
(c) a transfer of rights under a carbon storage licence, whether in relation to all or part of the area in respect of which the licence was granted;
(d) a surrender of rights under a carbon storage licence in relation to all of the area in respect of which the licence was granted, or in relation to so much of that area in respect of which the licence continues to have effect;
(e) the expiry of a carbon storage licence;
(f) the termination of a carbon storage licence;
(g) the revocation of a storage permit.
(2) ‘Responsible person’, in relation to a licence event, means the person who is or was, or the persons who are or were, the licensee in respect of the relevant licence immediately before the licence event.
(3) ‘Relevant licence’, in relation to a licence event, means the carbon storage licence in respect of which the licence event occurs.
(4) ‘Information and samples plan’, in relation to a licence event, means a plan dealing with what is to happen, following the event, to—
(a) carbon storage information held by the responsible person before the event, and
(b) carbon storage samples held by that person before the event.
(5) The responsible person must agree the information and samples plan with the OGA—
(a) in the case of a licence event mentioned in subsection (1)(a), (b), (c), (d) or (e), before the licence event takes place, or
(b) in the case of a licence event mentioned in subsection (1)(f) or (g), within a reasonable period after the termination of the carbon storage licence or revocation of the storage permit.
(6) An information and samples plan has effect once it is agreed with the OGA.
(7) If an information and samples plan is not agreed with the OGA as mentioned in subsection (5)(a) or (b), the OGA—
(a) may itself prepare an information and samples plan in connection with the licence event, and
(b) may require the responsible person to provide it with such information as the OGA may require to enable it to do so.
(8) The OGA must inform the responsible person of the terms of any information and samples plan it prepares in connection with a licence event.
(9) Where the OGA—
(a) prepares an information and samples plan in connection with a licence event, and
(b) informs the responsible person of the terms of the plan,
the plan has effect as if it had been prepared by the responsible person and agreed with the OGA.
(10) Where an information and samples plan has effect in connection with a licence event, the responsible person must comply with the plan.
(11) The requirements imposed by subsection (5) and (10), or under subsection (7)(b), are sanctionable in accordance with this Chapter.”—(Andrew Bowie.)
This new clause, which is intended to form part of new Chapter 4A in Part 2 (see the explanatory statement for NC8), makes provision about the preparation and agreement of plans dealing with what is to happen to carbon storage information and samples following certain events.
Brought up, read the First and Second time, and added to the Bill.
New Clause 11
Information and samples plans: supplementary
“(1) Where an information and samples plan has effect in relation to a licence event, the OGA and the responsible person may agree changes to the plan.
(2) Once changes are agreed, the plan has effect subject to those changes.
(3) Where—
(a) two or more persons are the responsible person in relation to a licence event, and
(b) those persons include a company that has, since the licence event, been dissolved,
the reference to the responsible person in subsection (1) does not include that company.
(4) An information and samples plan, in relation to a licence event, may provide as appropriate for—
(a) the retention, by the responsible person, of any carbon storage information or carbon storage samples held by or on behalf of that person before the licence event,
(b) the transfer of any such information or samples to a new licensee, or
(c) appropriate storage of such information or samples.
(5) Where an information and samples plan makes provision under subsection (4) for a person, other than the responsible person, to hold information or samples in accordance with the plan—
(a) the plan may, with the consent of that other person, impose requirements on that person in connection with the information and samples, and
(b) any such requirements are sanctionable in accordance with this Chapter.
(6) An information and samples plan prepared by the OGA under section (Preparation and agreement of information and samples plans) may not include provision under subsection (4)(b) for the transfer of information or samples to another person without the consent of the responsible person.
(7) An information and samples plan may provide for the storage of information or samples as mentioned in subsection (4)(c) to be the responsibility of the OGA.
(8) Where a transfer of rights under a carbon storage licence relates to only part of the area in relation to which the licence was granted, the information and samples plan prepared in connection with the transfer is to relate to all carbon storage information and carbon storage samples held by the responsible person before the licence event, and not only information and samples in respect of that part of the area.
(9) In this section, ‘licence event’ and ‘responsible person’ have the same meaning as in section (Preparation and agreement of information and samples plans).”—(Andrew Bowie.)
This new clause, which is intended to form part of new Chapter 4A in Part 2 (see the explanatory statement for NC8), makes provision supplementing the provision about information and samples plans made by NC10.
Brought up, read the First and Second time, and added to the Bill.
New Clause 12
Information and samples coordinators
“(1) A person within subsection (2) (a ‘relevant person’) must—
(a) appoint an individual to act as an information and samples coordinator, and
(b) notify the OGA of that individual’s name and contact details.
(2) The following persons are within this subsection—
(a) a licensee, and
(b) an exploration operator under a carbon storage licence.
(3) The information and samples coordinator is to be responsible for monitoring the relevant person’s compliance with its obligations under this Chapter.
(4) A relevant person must comply with subsection (1) within a reasonable period after—
(a) the date on which this section comes into force, if the person is a relevant person on that date, or
(b) becoming a relevant person, in any other case.
(5) The relevant person must notify the OGA of any change in the identity or contact details of the information and samples coordinator within a reasonable period of the change taking place.
(6) The requirements imposed by this section are sanctionable in accordance with this Chapter.”—(Andrew Bowie.)
This new clause, which is intended to form part of new Chapter 4A in Part 2 (see the explanatory statement for NC8), makes provision requiring licensees and exploration operators to appoint an individual (an information and samples coordinator) to be responsible for monitoring their compliance with obligations imposed by or under the intended new Chapter.
Brought up, read the First and Second time, and added to the Bill.
New Clause 13
Power of OGA to require information and samples
“(1) The OGA may by notice in writing, for the purpose of carrying out any of its functions under Chapter 3 of Part 1 of the Energy Act 2008 (storage of carbon dioxide), require—
(a) a licensee to provide it with any carbon storage information, or a portion of any carbon storage sample, held by or on behalf of the licensee;
(b) a person who holds information or samples in accordance with an information and samples plan to provide it with any such information or a portion of any such sample.
(2) The notice must specify—
(a) the form or manner in which the information or the portion of a sample must be provided;
(b) the time at which, or period within which, the information or the portion of a sample must be provided.
(3) Information requested under subsection (1) may not include items subject to legal privilege.
(4) Requirements imposed by a notice under this section are sanctionable in accordance with this Chapter.
(5) Where a person provides information or a portion of a sample to the OGA in accordance with a notice under this section, any requirements imposed on the person in respect of that information or sample by regulations under section (Retention of information and samples) are unaffected.”—(Andrew Bowie.)
This new clause, which is intended to form part of new Chapter 4A in Part 2 (see the explanatory statement for NC8), makes provision about the power of the OGA to require licensees and certain other persons to provide it with any carbon storage information or samples they hold (or that are held on their behalf).
Brought up, read the First and Second time, and added to the Bill.
New Clause 14
Prohibition on disclosure of information or samples by OGA
“(1) Protected material must not be disclosed—
(a) by the OGA, or
(b) by a subsequent holder,
except in accordance with section (Power of Secretary of State to require information and samples) or Schedule (Permitted disclosures of material obtained by OGA).
(2) In this section and in Schedule (Permitted disclosures of material obtained by OGA)—
‘protected material’ means information or samples which have been obtained by the OGA under section (Power of OGA to require information and samples) or (Sanctions: information powers);
‘subsequent holder’, in relation to protected material, means a person holding protected material who has received it directly or indirectly from the OGA by virtue of a disclosure, or disclosures, in accordance with Schedule (Permitted disclosures of material obtained by OGA).
(3) References to disclosing protected material include references to making the protected material available to other persons (where the protected material includes samples).”—(Andrew Bowie.)
This new clause, which is intended to form part of new Chapter 4A in Part 2 (see the explanatory statement for NC8), makes provision prohibiting the disclosure by the OGA of information and samples obtained under NC13 except in accordance with NS1 or with a requirement imposed by the Secretary of State under NC15.
Brought up, read the First and Second time, and added to the Bill.
New Clause 15
Power of Secretary of State to require information and samples
“(1) The Secretary of State may require the OGA to provide the Secretary of State with such information or samples held by or on behalf of the OGA as the Secretary of State may require for the purpose of—
(a) carrying out any function conferred by or under any Act,
(b) monitoring the OGA’s performance of its functions, or
(c) any Parliamentary proceedings.
(2) The Secretary of State may use information or samples acquired under subsection (1) (‘acquired material’) only for the purpose for which it is provided.
(3) Acquired material must not be disclosed—
(a) by the Secretary of State, or
(b) by a subsequent holder,
except in accordance with this section.
(4) For the purposes of subsection (3)(b), ‘subsequent holder’, in relation to acquired material, means a person who receives acquired material directly or indirectly from the Secretary of State by virtue of a disclosure, or disclosures, in accordance with this section.
(5) Subsection (3) does not prohibit the Secretary of State from disclosing acquired material so far as necessary for the purpose for which it was provided.
(6) Subsection (3) does not prohibit a disclosure of acquired material if—
(a) the disclosure is required by virtue of an obligation imposed by or under any Act, or
(b) the OGA consents to the disclosure and, where the acquired material in question was provided to the OGA by or on behalf of another person, confirms that that person also consents to the disclosure.
(7) References in this section to disclosing acquired material include references to making the acquired material available to other persons (where the acquired material includes samples).”—(Andrew Bowie.)
This new clause, which is intended to form part of new Chapter 4A in Part 2 (see the explanatory statement for NC8), makes provision, corresponding to the provision made by section 11 of the Energy Act 2016, about the power of the Secretary of State to require the provision of carbon storage information or samples held by or on behalf of the OGA.
Brought up, read the First and Second time, and added to the Bill.
New Clause 16
Power of OGA to give sanction notices
“(1) If the OGA considers that a person has failed to comply with a sanctionable requirement imposed on the person, it may give the person a sanction notice in respect of that failure.
(2) If the OGA considers that there has a been a failure to comply with a sanctionable requirement imposed jointly on two or more persons, it may give a sanction notice in respect of that failure—
(a) to one only of those persons (subject to section (Revocation notices)(2)),
(b) jointly to two or more of them, or
(c) jointly to all of them,
but it may not give separate sanction notices to each of them in respect of the failure.
(3) In this Chapter ‘sanction notice’ means—
(a) an enforcement notice (see section (Enforcement notices)),
(b) a financial penalty notice (see section (Financial penalty notices)),
(c) a revocation notice (see section (Revocation notices)), or
(d) an operator removal notice (see section (Operator removal notices)).
(4) Sanction notices, other than enforcement notices, may be given in respect of a failure to comply with a sanctionable requirement even if, at the time the notice is given, the failure to comply has already been remedied.
(5) Where the OGA gives a sanction notice to a person in respect of a particular failure to comply with a sanctionable requirement—
(a) it may, at the same time, give another type of sanction notice to the person in respect of that failure to comply;
(b) it may give subsequent sanction notices in respect of that failure only in accordance with section (Subsequent sanction notices) (subsequent sanction notices).
(6) The OGA’s power to give sanction notices under this section is subject to section (Duty of OGA to give sanction warning notices) (duty of OGA to give sanction warning notices).
(7) Where the OGA gives a sanction notice to a licensee in respect of a failure to comply with a sanctionable requirement—
(a) the matter is to be dealt with in accordance with this Chapter, and
(b) any requirement under the licensee’s carbon storage licence to deal with the matter in a certain way (including by arbitration) does not apply in respect of that failure to comply.”—(Andrew Bowie.)
This new clause, which is intended to form part of new Chapter 4A in Part 2 (see the explanatory statement for NC8), makes provision about the power of the OGA to give sanction notices to persons who have failed to comply with requirements imposed on them by or under the intended new Chapter.
Brought up, read the First and Second time, and added to the Bill.
New Clause 17
Enforcement notices
“(1) An enforcement notice is a notice which—
(a) specifies the sanctionable requirement in question,
(b) gives details of the failure to comply with the requirement, and
(c) informs the person or persons to whom the notice is given that the person or persons must comply with—
(i) the sanctionable requirement, and
(ii) any directions included in the notice as mentioned in subsection (2),
before the end of the period specified in the notice.
(2) The notice may include directions as to the measures to be taken for the purposes of compliance with the sanctionable requirement.
(3) Requirements imposed by directions included in an enforcement notice as mentioned in subsection (2) are sanctionable in accordance with this Chapter.”—(Andrew Bowie.)
This new clause, which is intended to form part of new Chapter 4A in Part 2 (see the explanatory statement for NC8), makes provision about enforcement notices (notices requiring a person to take measures for the purposes of complying with a requirement imposed by or under the new Chapter), which may be given by the OGA under NC16.
Brought up, read the First and Second time, and added to the Bill.
New Clause 18
Financial penalty notices
“(1) A financial penalty notice is a notice which—
(a) specifies the sanctionable requirement in question,
(b) gives details of the failure to comply with the requirement, and
(c) informs the person or persons to whom the notice is given that the person or persons must—
(i) comply with the sanctionable requirement before the end of a period specified in the notice, where it is appropriate to require such compliance and the failure to comply with the requirement has not already been remedied at the time the notice is given, and
(ii) pay the OGA a financial penalty of the amount specified in the notice before the end of a period specified in the notice.
(2) The period specified under subsection (1)(c)(ii) must not end earlier than the end of the period of 28 days beginning with the day on which the financial penalty notice is given.
(3) The financial penalty payable under a financial penalty notice in respect of a failure to comply with a sanctionable requirement (whether payable by one person, or jointly by two or more persons) must not exceed £1 million.
(4) If a financial penalty notice is given jointly to two or more persons, those persons are jointly and severally liable to pay the financial penalty under it.
(5) A financial penalty payable under a financial penalty notice is to be recoverable as a civil debt if it is not paid before the end of the period specified under subsection (1)(c)(ii).
(6) The OGA must—
(a) issue guidance as to the matters to which it will have regard when determining the amount of the financial penalty to be imposed by a financial penalty notice, and
(b) have regard to the guidance when determining the amount of the penalty in any particular case.
(7) The OGA may from time to time review guidance issued under subsection (6)(a) and, if it considers appropriate, revise it.
(8) Before issuing or revising guidance under this section, the OGA must consult such persons as it considers appropriate.
(9) The OGA must—
(a) lay any guidance issued under this section, and any revision of it, before each House of Parliament;
(b) publish any guidance issued under this section, and any revision of it, in such manner as the OGA considers appropriate.
(10) The Secretary of State may by regulations subject to the affirmative procedure amend subsection (3) to change the amount specified to an amount not exceeding £5 million.
(11) Money received by the OGA under a financial penalty notice must be paid into the Consolidated Fund.”—(Andrew Bowie.)
This new clause, which is intended to form part of new Chapter 4A in Part 2 (see the explanatory statement for NC8), makes provision about financial penalty notices (notices requiring a person to pay a financial penalty for failure to comply with a requirement imposed by or under the intended new Chapter), which may be given by the OGA under NC16.
Brought up, read the First and Second time, and added to the Bill.
New Clause 19
Revocation notices
“(1) A revocation notice may be given only in respect of a failure to comply with a sanctionable requirement imposed on a licensee in that capacity.
(2) Where two or more persons are the licensee in respect of a carbon storage licence, the revocation notice must be given jointly to all of those persons.
(3) A revocation notice is a notice which—
(a) specifies the sanctionable requirement in question,
(b) gives details of the failure to comply with the requirement,
(c) informs the person or persons to whom the notice is given that—
(i) where no storage permit has been granted under the carbon storage licence, the licence is to be terminated, or
(ii) where a storage permit has been granted under the carbon storage licence, the permit is to be revoked,
on the date specified in the notice (‘the revocation date’).
(4) The revocation date must not be earlier than the end of the period of 28 days beginning with the day on which the revocation notice is given.
(5) A revocation notice may not be given in circumstances where the carbon storage licence to be terminated, or the storage permit to be revoked, in accordance with the notice is one which, on the date the notice is given, the OGA would not have the power to grant.
(6) Where a carbon storage licence is terminated in accordance with a revocation notice—
(a) the rights granted to the licensee by the licence cease on the revocation date;
(b) the revocation does not affect any obligation or liability imposed on or incurred by the licensee under the terms and conditions of the licence;
(c) the terms and conditions of the licence apply as if the licence had been terminated in accordance with those terms and conditions, subject to section (Power of OGA to give sanction notices)(7)(b).
(7) Where a storage permit is revoked in accordance with a revocation notice—
(a) the authorisation granted by the storage permit ceases on the revocation date;
(b) the revocation does not affect any obligation or liability imposed or incurred under the terms and conditions of the storage permit;
(c) the terms and conditions of the carbon storage licence apply as if the storage permit had been revoked in accordance with those terms and conditions, subject to section (Power of OGA to give sanction notices)(7)(b).” —(Andrew Bowie.)
This new clause, which is intended to form part of new Chapter 4A in Part 2 (see the explanatory statement for NC8), makes provision about revocation notices (notices terminating a carbon storage licence, or a storage permit, where a licensee has failed to comply with a requirement imposed by or under the intended new Chapter), which may be given by the OGA under NC16.
Brought up, read the First and Second time, and added to the Bill.
New Clause 20
Operator removal notices
“(1) An operator removal notice may be given only in respect of a failure to comply with a sanctionable requirement imposed on an exploration operator under a carbon storage licence in that capacity.
(2) An operator removal notice is a notice which—
(a) specifies the sanctionable requirement,
(b) gives details of the failure to comply with the requirement, and
(c) informs the exploration operator to whom it is given that, with effect from a date specified in the notice (‘the removal date’), the licensee under whose carbon storage licence the exploration operator operates (‘the relevant licensee’) is to be required to remove the exploration operator (see subsection (4)).
(3) The OGA must—
(a) give a copy of the operator removal notice to the relevant licensee, and
(b) require the relevant licensee to remove the exploration operator with effect from the removal date.
(4) Where a licensee is required to remove an exploration operator from a specified date, the licensee must ensure that, with effect from that date, the exploration operator does not exercise any function of organising or supervising any of the activities referred to in paragraphs (a) and (b) of section (Key definitions)(3).
(5) The removal date must not be earlier than the end of the period of 28 days beginning with the day on which the operator removal notice is given.
(6) An operator removal notice may not be given in circumstances where the carbon storage licence under which the exploration operator operates is one which, on the date the notice is given, the OGA would not have the power to grant.
(7) A requirement imposed on a licensee under subsection (3)(b) is sanctionable in accordance with this Chapter.” —(Andrew Bowie.)
This new clause, which is intended to form part of new Chapter 4A in Part 2 (see the explanatory statement for NC8), makes provision about operator removal notices (notices requiring a licensee to remove an exploration operator who has failed to comply with a requirement imposed by or under the intended new Chapter), which may be given by the OGA under NC16.
Brought up, read the First and Second time, and added to the Bill.
New Clause 21
Duty of OGA to give sanction warning notices
“(1) This section applies where the OGA proposes to give a sanction notice in respect of a failure to comply with a sanctionable requirement.
(2) The OGA must give a sanction warning notice in respect of the sanctionable requirement to—
(a) the person or persons to whom it proposes to give a sanction notice, and
(b) where it proposes to give an operator removal notice, the relevant licensee (see section (Operator removal notices)(2)(c)).
(3) A sanction warning notice, in respect of a sanctionable requirement, is a notice which—
(a) specifies the sanctionable requirement,
(b) informs the person or persons to whom it is given that the OGA proposes to give a sanction notice in respect of a failure to comply with the requirement,
(c) gives details of the failure to comply with the sanctionable requirement, and
(d) informs the person or persons to whom it is given that the person or persons may, within the period specified in the notice (‘the representations period’), make representations to the OGA in relation to the matters dealt with in the notice.
(4) The representations period must be such period as the OGA considers appropriate in the circumstances.
(5) Subsections (6) and (7) apply where the OGA gives a sanction warning notice to a person or persons in respect of a sanctionable requirement.
(6) The OGA must not give a sanction notice to the person or persons in respect of a failure to comply with the requirement until after the end of the representations period specified in the sanction warning notice.
(7) Having regard to representations made during the representations period specified in the sanction warning notice, the OGA may decide—
(a) to give the person or persons a sanction notice in respect of the failure to comply with the requirement detailed in the sanction warning notice under subsection (3)(c),
(b) to give the person or persons a sanction notice in respect of a failure to comply with the requirement which differs from the failure detailed in the sanction warning notice under subsection (3)(c), or
(c) not to give the person or persons a sanction notice in respect of a failure to comply with the requirement.” —(Andrew Bowie.)
This new clause, which is intended to form part of new Chapter 4A in Part 2 (see the explanatory statement for NC8), makes provision about the duty of the OGA to give a sanction warning notice where it proposes to give a sanction notice under NC16.
Brought up, read the First and Second time, and added to the Bill.
New Clause 22
Publication of details of sanctions
“(1) The OGA may publish details of any sanction notice given in accordance with this Chapter.
(2) But the OGA may not publish anything that, in its opinion—
(a) is commercially sensitive,
(b) is not in the public interest to publish, or
(c) is otherwise not appropriate for publication.
(3) If, after details of a sanction notice are published by the OGA, the sanction notice is—
(a) cancelled on appeal, or
(b) withdrawn under section (Withdrawal of sanction notices),
the OGA must publish details of the cancellation or withdrawal.” —(Andrew Bowie.)
This new clause, which is intended to form part of new Chapter 4A in Part 2 (see the explanatory statement for NC8), makes provision about the publication by the OGA of details of sanctions notices given under NC16.
Brought up, read the First and Second time, and added to the Bill.
New Clause 23
Subsequent sanction notices
“(1) This section applies where the OGA gives a sanction notice in respect of a particular failure to comply with a sanctionable requirement (whether the notice is given alone or at the same time as another type of sanction notice).
(2) If the sanction notice given is a revocation notice or an operator removal notice, no further sanction notices may be given in respect of the failure to comply.
(3) If the sanction notice given is a financial penalty notice which does not require compliance with the sanctionable requirement, no further sanction notices may be given in respect of the failure to comply.
(4) Subsection (5) applies if the sanction notice given is—
(a) an enforcement notice, or
(b) a financial penalty notice which requires compliance with the sanctionable requirement.
(5) No further sanction notices may be given in respect of the failure to comply before the end of the period specified under section (Enforcement notices)(1)(c) or (Financial penalty notices)(1)(c)(i), as the case may be (period for compliance with sanctionable requirement).”—(Andrew Bowie.)
This new clause, which is intended to form part of new Chapter 4A in Part 2 (see the explanatory statement for NC8), makes provision restricting the power of the OGA under NC16 to give more than one sanction notice in respect of the same failure.
Brought up, read the First and Second time, and added to the Bill.
New Clause 24
Withdrawal of sanction notices
“(1) The OGA may, at any time after giving a sanction notice, withdraw the sanction notice.
(2) If a sanction notice is withdrawn by the OGA—
(a) the notice ceases to have effect, and
(b) the OGA must notify the following persons of the withdrawal of the notice—
(i) the person or persons to whom the notice was given;
(ii) in the case of an operator removal notice, the licensee under whose carbon storage licence the exploration operator operates.”—(Andrew Bowie.)
This new clause, which is intended to form part of new Chapter 4A in Part 2 (see the explanatory statement for NC8), makes provision about the withdrawal of sanction notices given by the OGA under NC16.
Brought up, read the First and Second time, and added to the Bill.
New Clause 25
Sanctions: information powers
“(1) This section applies for the purposes of an investigation which—
(a) concerns whether a person has failed to comply with a sanctionable requirement, and
(b) is carried out by the OGA for the purpose of enabling it to decide whether to give the person a sanction notice, or on what terms a sanction notice should be given to the person.
(2) The OGA may by notice in writing, for the purposes of that investigation, require the person to provide specified documents or other information.
(3) ‘Specified’ means specified, or of a description specified, in a notice under this section.
(4) A requirement under subsection (2) applies only to the extent—
(a) that the documents requested are documents in the person’s possession or control, or
(b) that the information requested is information in the person’s possession or control.
(5) A requirement imposed by a notice under subsection (2) is sanctionable in accordance with this Chapter.
(6) The documents or information requested—
(a) may include documents or information held in any form (including in electronic form);
(b) may include documents or information that may be regarded as commercially sensitive;
(c) may not include items that are subject to legal privilege.
(7) The notice must specify—
(a) to whom the information is to be provided;
(b) where it is to be provided;
(c) when it is to be provided;
(d) the form and manner in which it is to be provided.”—(Andrew Bowie.)
This new clause, which is intended to form part of new Chapter 4A in Part 2 (see the explanatory statement for NC8), makes provision about the power of the OGA to require the provision of information for the purposes of an investigation carried out to enable it to decide whether to give a person a sanction notice under NC16.
Brought up, read the First and Second time, and added to the Bill.
New Clause 26
Appeals in connection with Chapter
“In Schedule (Carbon storage information and samples: appeals)—
(a) Part 1 contains provision about appeals against decisions by the OGA relating to the preparation of an information and samples plan and appeals against the giving of a notice under section (Power of OGA to require information and samples), and
(b) Part 2 contains provision about appeals against the imposition of sanction notices and appeals against the giving of a notice under section (Sanctions: information powers).”—(Andrew Bowie.)
This new clause introduces NS2, which contains provision about appeals in connection with the new Chapter intended to be formed by NC8 to NC28 (see the explanatory statement for NC8).
Brought up, read the First and Second time, and added to the Bill.
New Clause 27
Procedure for enforcement decisions
“(1) The OGA—
(a) must determine the procedure that it proposes to follow in relation to enforcement decisions, and
(b) must issue a statement of its proposals.
(2) The procedure mentioned in subsection (1)(a) must be designed to secure, among other things, that an enforcement decision is taken—
(a) by a person falling within subsection (3), or
(b) by two or more persons, each of whom falls within subsection (3).
(3) A person falls within this subsection if the person was not directly involved in establishing the evidence on which the enforcement decision is based.
(4) The statement mentioned in subsection (1)(b) must be published in whatever way appears to the OGA to be best calculated to bring the statement to the attention of the public.
(5) When the OGA takes an enforcement decision, the OGA must follow its stated procedure.
(6) If the OGA changes its procedure in a material way, it must publish a revised statement.
(7) A failure of the OGA in a particular case to follow its procedure as set out in the latest published statement does not affect the validity of an enforcement decision taken in that case.
(8) But subsection (7) does not prevent the Tribunal from taking into account any such failure in considering an appeal under paragraph 4 or 5 of Schedule (Carbon storage information and samples: appeals) in relation to a sanction notice.
(9) In this section, ‘enforcement decision’ means—
(a) a decision to give a sanction notice in respect of a failure to comply with a sanctionable requirement, or
(b) a decision as to the details of the sanction to be imposed by the notice.”—(Andrew Bowie.)
This new clause, which is intended to form part of new Chapter 4A in Part 2 (see the explanatory statement for NC8), makes provision about the procedure for the taking of decisions by the OGA in relation to the giving of sanction notices under NC16.
Brought up, read the First and Second time, and added to the Bill.
New Clause 28
Interpretation of Chapter
“In this Chapter—
‘information and samples plan’ has the meaning given in section (Preparation and agreement of information and samples plans);
‘items subject to legal privilege’ —
(a) in England and Wales, has the same meaning as in the Police and Criminal Evidence Act 1984 (see section 10 of that Act);
(b) in Scotland, has the meaning given by section 412 of the Proceeds of Crime Act 2002;
(c) in Northern Ireland, has the same meaning as in the Police and Criminal Evidence (Northern Ireland) Order 1989 (S.I. 1989/1341 (NI 12));
‘OGA’ means the Oil and Gas Authority;
‘protected material’ has the meaning given in section (Prohibition on disclosure of information or samples obtained by OGA);
‘sanction notice’ has the meaning given in section (Power of OGA to give sanction notices);
‘storage permit’ has the same meaning as in the Storage of Carbon Dioxide (Licensing etc) Regulations 2010 (S.I. 2010/2221) (see regulation 1(3) of those Regulations);
‘subsequent holder’ has the meaning given in section (Prohibition on disclosure of information or samples obtained by OGA);
‘Tribunal’ means the First-tier tribunal.”—(Andrew Bowie.)
This new clause makes provision about the interpretation of the new Chapter intended to be formed by NC8 to NC28 (including NS1 and NS2): see the explanatory statement for NC8.
Brought up, read the First and Second time, and added to the Bill.
New Clause 29
Designation of hydrogen transport counterparty
“(1) The Secretary of State may by notice given to a person designate the person to be a counterparty for hydrogen transport revenue support contracts.
(2) A ‘hydrogen transport revenue support contract’ is a contract to which a hydrogen transport counterparty is a party and which was entered into by a hydrogen transport counterparty in pursuance of a direction given to it under section (Direction to offer to contract with eligible hydrogen transport provider)(1).
(3) A person designated under subsection (1) is referred to in this Chapter as a ‘hydrogen transport counterparty’.
(4) A designation may be made only with the consent of the person designated (except where that person is the Secretary of State).
(5) The Secretary of State may exercise the power of designation so that more than one designation has effect under subsection (1), but only if the Secretary of State considers it necessary for the purposes of ensuring that—
(a) liabilities under a hydrogen transport revenue support contract are met,
(b) arrangements entered into for purposes connected to a hydrogen transport revenue support contract continue to operate, or
(c) directions given to a hydrogen transport counterparty continue to have effect.
(6) As soon as reasonably practicable after a designation ceases to have effect, the Secretary of State must make one or more transfer schemes under section 82 to ensure the transfer of all rights and liabilities under any hydrogen transport revenue support contract to which the person who has ceased to be a hydrogen transport counterparty was a party.
(7) In this Chapter ‘hydrogen transport provider’ means a person who carries on (or is to carry on) in the United Kingdom activities of transporting hydrogen.
(8) In subsection (7) 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);
(c) waters in a Gas Importation and Storage Zone (within the meaning given by section 1 of the Energy Act 2008).
(9) In subsection (7) ‘transporting hydrogen’ includes transporting a compound, of which hydrogen is an element, which revenue support regulations specify as a qualifying compound for the purposes of this section.”—(Andrew Bowie.)
This new clause and NC30, NC31 and NC32 (which are intended to be inserted after clause 60) enable the Secretary of State to designate a counterparty and direct it to offer to contract with hydrogen transport providers or (as the case may be) with hydrogen storage providers.
Brought up, read the First and Second time, and added to the Bill.
New Clause 30
Direction to offer to contract with eligible hydrogen transport provider
“(1) The Secretary of State may, in accordance with any provision made by revenue support regulations, direct a hydrogen transport counterparty to offer to contract with an eligible hydrogen transport provider specified in the direction, on terms specified in the direction.
(2) Revenue support regulations may make further provision about a direction under this section and in particular about—
(a) the circumstances in which a direction may or must be given;
(b) the terms that may or must be specified in a direction.
(3) Provision falling within subsection (2) may include provision for calculations or determinations to be made under the regulations, including by such persons, in accordance with such procedure and by reference to such matters and to the opinion of such persons, as may be specified in the regulations.
(4) Revenue support regulations must make provision for determining the meaning of ‘eligible’ in relation to a hydrogen transport provider.”—(Andrew Bowie.)
See the explanatory statement for NC29.
Brought up, read the First and Second time, and added to the Bill.
New Clause 31
Designation of hydrogen storage counterparty
“(1) The Secretary of State may by notice given to a person designate the person to be a counterparty for hydrogen storage revenue support contracts.
(2) A ‘hydrogen storage revenue support contract’ is a contract to which a hydrogen storage counterparty is a party and which was entered into by a hydrogen storage counterparty in pursuance of a direction given to it under section (Direction to offer to contract with eligible hydrogen storage provider)(1).
(3) A person designated under subsection (1) is referred to in this Chapter as a ‘hydrogen storage counterparty’.
(4) A designation may be made only with the consent of the person designated (except where that person is the Secretary of State).
(5) The Secretary of State may exercise the power of designation so that more than one designation has effect under subsection (1), but only if the Secretary of State considers it necessary for the purposes of ensuring that—
(a) liabilities under a hydrogen storage revenue support contract are met,
(b) arrangements entered into for purposes connected to a hydrogen storage revenue support contract continue to operate, or
(c) directions given to a hydrogen storage counterparty continue to have effect.
(6) As soon as reasonably practicable after a designation ceases to have effect, the Secretary of State must make one or more transfer schemes under section 82 to ensure the transfer of all rights and liabilities under any hydrogen storage revenue support contract to which the person who has ceased to be a hydrogen storage counterparty was a party.
(7) In this Chapter ‘hydrogen storage provider’ means a person who carries on (or is to carry on) in the United Kingdom activities of storing hydrogen.
(8) In subsection (7) 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);
(c) waters in a Gas Importation and Storage Zone (within the meaning given by section 1 of the Energy Act 2008).
(9) In subsection (7) ‘storing hydrogen’ includes storing a compound, of which hydrogen is an element, which revenue support regulations specify as a qualifying compound for the purposes of this section.’—(Andrew Bowie.)
See the explanatory statement for NC29.
Brought up, read the First and Second time, and added to the Bill.
New Clause 32
Direction to offer to contract with eligible hydrogen storage provider
“(1) The Secretary of State may, in accordance with any provision made by revenue support regulations, direct a hydrogen storage counterparty to offer to contract with an eligible hydrogen storage provider specified in the direction, on terms specified in the direction.
(2) Revenue support regulations may make further provision about a direction under this section and in particular about—
(a) the circumstances in which a direction may or must be given;
(b) the terms that may or must be specified in a direction.
(3) Provision falling within subsection (2) may include provision for calculations or determinations to be made under the regulations, including by such persons, in accordance with such procedure and by reference to such matters and to the opinion of such persons, as may be specified in the regulations.
(4) Revenue support regulations must make provision for determining the meaning of ‘eligible’ in relation to a hydrogen storage provider.”—(Andrew Bowie.)
See the explanatory statement for NC29.
Brought up, read the First and Second time, and added to the Bill.
New Clause 52
Principal objectives of Secretary of State and GEMA
“(1) Section 4AA of the Gas Act 1986 (principal objective and general duties of Secretary of State and GEMA) is amended as set out in subsections (2) and (3).
(2) In subsection (1A)(a), for ‘the reduction of gas-supply emissions of targeted greenhouse gases’ substitute ‘the Secretary of State’s compliance with the duties in sections 1 and 4(1)(b) of the Climate Change Act 2008 (net zero target for 2050 and five-year carbon budgets)’.
(3) In subsection (5B), omit the definitions of ‘emissions’, ‘gas-supply emissions’ and ‘targeted greenhouse gases’.
(4) Section 3A of the Electricity Act 1989 (principal objective and general duties of Secretary of State and GEMA) is amended as set out in subsections (5) and (6).
(5) In subsection (1A)(a), for ‘the reduction of electricity-supply emissions of targeted greenhouse gases’ substitute ‘the Secretary of State’s compliance with the duties in sections 1 and 4(1)(b) of the Climate Change Act 2008 (net zero target for 2050 and five-year carbon budgets)’.
(6) In subsection (5B), omit the definitions of ‘emissions’, ‘electricity-supply emissions’ and ‘targeted greenhouse gases’.”—(Andrew Bowie.)
This new clause is intended to replace clause 271. The intention is for it to appear at the start of Part 6. It is equivalent in substance to clause 271 but includes some drafting changes and consequential amendments.
Brought up, read the First and Second time, and added to the Bill.
Ordered, That further consideration be now adjourned. —(Joy Morrissey.)
Digital Markets, Competition and Consumers Bill (Eighth sitting)
Thursday 22nd June 2023
(1 year, 6 months ago)
Public Bill CommitteesRead Full debate Digital Markets, Competition and Consumers Act 2024 View all Digital Markets, Competition and Consumers Act 2024 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 22 June 2023 - (22 Jun 2023)
The Parliamentary Under-Secretary of State for Science, Innovation and Technology (Paul Scully)
I beg to move amendment 25, clause 81, page 49, line 15, at end insert—
“(d) a requirement in a direction under section 87 of EA 2002 (delegated power of directions) given by virtue of a pro-competition order (see section 49(1)).”
This amendment makes a requirement in a direction under section 87 of the Enterprise Act 2002 given by virtue of a pro-competition order a related requirement for the purposes of this clause.
The Chair
With this it will be convenient to discuss the following:
Clause stand part.
Clause 82 stand part.
Paul Scully
Government amendment 25 seeks to correct the list of “related requirements” in clause 81 to include pro-competition order directions. The Competition and Markets Authority has the power to impose directions on a firm with strategic market status to take specific action to come into regulatory compliance with a PCO, under section 87 of the Enterprise Act 2002.
As currently drafted, a nominated officer would not be responsible for a direction issued in relation to a PCO because this is not listed as a “related requirement”. The amendment will clarify that nominated officers will be responsible for directions issued in relation to a PCO to which they are assigned by the SMS firm, and that compliance reports in clause 82 will have to cover these directions. The amendment will ensure that the digital markets unit is able to monitor whether an undertaking is complying with directions issued in relation to a PCO. I hope that the Committee will accept the amendment.
Clauses 81 places requirements on SMS firms to assign appropriate senior managers as “nominated officers” to monitor compliance with specific regulatory requirements. That will help to facilitate co-operation between SMS firms and the DMU and ensure that information included in compliance reports is accurate and complete, and that reports are submitted to the DMU in a timely manner. SMS firms will be required to assign nominated officers in respect of each conduct requirement, pro-competition order or commitment made in lieu of a pro-competition order. A nominated officer appointed in relation to a conduct requirement will be automatically responsible for overseeing compliance with any subsequent orders that are imposed by the DMU in relation to that conduct requirement.
Clause 82 place requirements on SMS firms to submit compliance reports to the DMU. A compliance reporting obligation can be imposed by the DMU in relation to conduct requirements and PCOs, and can be extended to cover additional requirements related to those requirements, such as an enforcement order in relation to a conduct requirement. Compliance reports can also be imposed when a firm has had a binding commitment accepted by the DMU, in lieu of the DMU imposing a pro-competition order. A compliance report will include details of how the firm has complied and will continue to comply with the regulatory requirement and any related requirements. Reports will also set out the extent to which the nominated officer assigned to the particular regulatory requirement considers that the firm has complied with that requirement. Information in compliance reports will be essential to the DMU’s assessment of whether an SMS firm is complying with the regime, and will enable the DMU to take swift where it identifies risk of non-compliance.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
It is a pleasure to speak to the amendment and clauses on behalf of my hon. Friend the Member for Pontypridd, and I will be brief. Government amendment makes a requirement in a direction under section 87 of the Enterprise Act, given by virtue of a pro-competition order a related requirement for the purposes of clause 82.
Labour supports clause 81, which requires a designated undertaking to assign an appropriate senior manager to the role of “nominated officer” when the CMA imposes a digital markets requirement, for the purpose of monitoring the undertaking’s compliance with that requirement. We strongly believe this level of personal liability is required for big tech firms, which have dominated for too long, to listen and engage fully with this regime. We welcome clarity such as that in subsection (2), which sets out the tasks of the nominated officer and requires them to carry out those tasks in relation to
“digital markets requirements and all related requirements”.
It makes sense that if a nominated officer is assigned to a conduct requirement, they are automatically assigned to any subsequent enforcement orders made in connection to it. We therefore support clause 81 and have not sought to amend it at this stage.
Government amendment 25 makes a change to the Enterprise Act to bring the provisions in line with the current Bill. We support its inclusion. It is vital that existing legislation is brought in line if this regime is going to work to its full effect.
Labour sees compliance reports and the formal duties outlined in clause 82, which ultimately require designated undertakings to provide the CMA with reports setting out how they are complying with requirements imposed upon them, as a natural step in the implementation of this regime. For transparency, accountability and fairness all round it is right that the CMA has a duty to notify a designated undertaking of any compliance reporting requirements and will specify in the notice when reports should be submitted, what information they should contain and what form they should take. Labour has long called for those powers, and we have also argued that they should be flexible, so we are pleased to see provisions that allow the CMA to alter the reporting requirements on a designated undertaking by giving the undertaking a further notice.
Specifically interesting to see in the Bill are the provisions around subsection (5), which permit the CMA to require a designated undertaking to publish a compliance report or a summary of that report. Will the Minister confirm the form and the location that he feels would be suitable for such reports to be published?
We recognise that the provisions in clause 82 allow for the version the designated undertaking is required to publish to be different from the version provided in private to the CMA under subsection (1). For example, some information may be redacted for confidentiality purposes. It is still unclear, though, exactly where the report will be published, so it would be helpful to have the Minister’s response on that point.
Paul Scully
The CMA could ask for a public version to be published on its website. It will be reported to the firm in full, but the majority of the publication in all such things will be online.
Amendment 25 agreed to.
Clause 81, as amended, ordered to stand part of the Bill.
Clause 82 ordered to stand part of the Bill.
Clause 83
Penalties for failure to comply with competition requirements
Paul Scully
I beg to move amendment 26, in clause 83, page 50, line 11, leave out “a designated” and insert “an”.
This amendment, together with Amendments 27, 28, 29, 30, 31, 32 and 33 confirms that a penalty can be imposed on an undertaking that has ceased to be a designated undertaking in respect of things done (or not done) while the undertaking was a designated undertaking.
Paul Scully
Government amendment 26 seeks to clarify that the CMA can impose a penalty on a former SMS firm that no longer has strategic market status in relation to conduct that occurred before the designation ended or in relation to breaches of obligations that exist after the designation ends. With that aim, the amendment, together with its related amendments, replace the wording “a designated undertaking” with “an undertaking” in clauses 83 and 86. That ensures the change relates to penalties for failure to comply with competition requirements, as well as any penalties for failure to comply with investigative requirements. I hope the Committee will support the amendments.
Seema Malhotra
I thank the Minister for his remarks. We certainly support these Government amendments, and I will reserve the rest of my comments for the clause stand part debate.
Amendment 26 agreed to.
Amendments made: 27, in clause 83, page 50, line 23, leave out “a designated” and insert “an”.
See the explanatory statement for Amendment 26.
Amendment 28, in clause 83, page 50, line 24, leave out “designated”.
See the explanatory statement for Amendment 26.
Amendment 29, in clause 83, page 50, line 26, leave out “a designated” and insert “an”.
See the explanatory statement for Amendment 26.
Amendment 30, in clause 83, page 50, line 28, leave out “designated”. —(Paul Scully.)
See the explanatory statement for Amendment 26.
Question proposed, That the clause stand part of the Bill.
Paul Scully
Clause 83 allows the DMU to impose penalties on SMS firms where it is satisfied that the firm breached a regulatory requirement without reasonable excuse. Clause 84 sets the maximum penalties that the DMU can impose under clause 83. Substantial financial penalties are necessary to deter and tackle non-compliance, especially given the size of the firms in scope and the significant advantages that such firms could accrue from breaching the regime. Where an SMS firm has failed to comply with a conduct requirement or a merger reporting requirement, the DMU will be able to fine the firm by up to 10% of its worldwide turnover.
For other types of breaches, such as breaches of remedies, the DMU can impose a penalty of up to 5% of a firm’s daily worldwide turnover for each day of continue non-compliance, in addition to fixed penalties of up to 10% of worldwide turnover. That is needed, because remedies represent specific actions that an SMS firm should carry out once an investigation has found an issue. Breaches should be addressed promptly, and punished accordingly if they are not. The DMU will have the discretion to choose whether to impose a fixed penalty, a daily rate or a combination of both, depending on the breach, and it will be expected to take a proportionate approach when imposing penalties. The penalty levels will help prevent SMS firms from absorbing financial penalties as a cost of doing business.
Clause 85 sets out that the DMU can impose penalties on firms or individuals where they have, without reasonable excuse, failed to comply with an investigatory power or a compliance reporting obligation, or provided false or misleading information to the DMU or another person while knowing that the information would be given to the DMU to be used in connection with any of its functions. In certain circumstances, the DMU will be able to impose financial penalties on senior managers assigned to an information request that has not been complied with, nominated officers assigned to a regulatory requirement for which a compliance reporting requirement has not been complied with, and individuals who have obstructed an officer of the DMU while entering premises under the powers set out in chapter 6 of the Bill. Having senior liability for the provision of information will help to ensure that a culture of compliance is embedded in SMS firms.
Clause 86 sets the maximum fixed and daily-rate penalties that the DMU can impose under clause 85. For firms, the DMU can impose a fixed penalty of up to 1% of a firm’s worldwide turnover, a daily penalty of up to 5% of a firm’s daily turnover for each day that non-compliance continues, or a combination of both. For individuals, the DMU can impose fixed penalties of up to £30,000, daily penalties of up to £15,000 each day, or a combination of both. The clause also grants the Secretary of State the power to amend the maximum penalties.
Clause 87 sets out the procedural requirements that the DMU must follow when issuing a penalty notice. It also sets out provisions relating to the payment and recovery of penalties. The clause applies sections 112, 113 and 115 of the Enterprise Act 2002 to penalties imposed by the DMU under clauses 83 and 85. Those sections cover procedural requirements when issuing a penalty, the payment of a penalty and interest by instalments, and the procedure for recovering a penalty that has not been paid. Clause 87 also states that challenges to merger-related penalty decisions made under clauses 83(4) and 85 should be brought under the existing merger review provisions set out in section 114 of the Enterprise Act.
Clause 88 sets out how the DMU will calculate the daily rates and turnover for the purpose of imposing a monetary penalty, so that there is clarity about the period of time that daily penalties will cover and when they will cease to accumulate. The ability to change how turnover is to be calculated is crucial to ensuring that the machine is flexible and can be updated in the future to reflect changes.
Seema Malhotra
It is a pleasure to speak to this group of amendments on behalf of my hon. Friend the Member for Pontypridd, who is still in the debate in the Chamber. As we know, the clause sets out that the CMA can impose monetary penalties on a designated undertaking where it is satisfied that the undertaking has breached a regulatory requirement, including for merger reporting and commitments, without reasonable excuse.
The clause’s wording affords substantial flexibility. Indeed, the provisions are in place only when the designated undertaking has failed to comply “without reasonable excuse”. None of us wants designated firms to be able to block action with excuses, so it would be helpful to hear how the Minister would quantify a reasonable excuse. That said, the Opposition welcome the clause, which is central to the regime. The ability to impose a penalty where appropriate is an important power that we hope will go some way towards encouraging companies to work with the regulator. For those reasons, we will not oppose it.
I turn to amendments 26 to 33, some of which we have already debated. It is helpful that we have made those amendments to ensure that a penalty can be imposed on an undertaking that was once designated and therefore captured by the regime but now no longer to subject to it. That will assist in capturing historical offences of failure to comply and goes to the heart of the importance of compliance.
Clause 84 outlines the maximum penalties that the CMA can impose. As we know, the CMA can impose penalties of up to 10% of worldwide turnover and, in the case of breaches of orders or commitments, of up to 5% of daily worldwide turnover for each day that a breach continues. Subsections (2) and (3) state that the CMA will, in most situations, have the discretion to choose whether to impose a fixed penalty, a daily-rate penalty or both. However, where an undertaking breaches a conduct requirement as opposed to an enforcement order or breaches any requirements under chapter 5 on mergers, the CMA will be able to impose only a fixed penalty.
The Opposition welcome these provisions. They afford the CMA flexibility and discretion, and we believe that financial penalties are an important power for any regulator to be able to impose. We therefore support the clause and do not seek to amend it. As with other formal liabilities, Labour believes that the CMA absolutely should be able to impose penalties on designated undertakings or individuals within them for failing to comply with certain investigative requirements. The powers are important to the regime and we welcome their inclusion.
In addition, clarity on exactly what will constitute, or be defined as failure to comply, is also helpful. We know that actions such as providing false or misleading information in the course of an investigation, or in relation to compliance reporting, will fall under this definition. That is a sensible approach, which we support.
Furthermore, clause 85(2) clearly sets out the circumstances in which the CMA can impose civil sanctions against either a named senior manager assigned to an information request or a nominated officer with relation to a compliance report. We feel that that personal duty is crucial to the success of the regime, as we hope that it will act as a deterrent, as companies will want to avoid personal duties, and that such a level of personal liability is crucial for SMS firms to take the CMA’s powers and regulatory regime seriously. We therefore support clause 85 and its intentions and believe it should stand part of the Bill.
Clause 86 establishes the maximum fixed and daily rate penalties that the CMA can impose under clause 85 on undertakings and individuals. As outlined in clause 86(3), under the provisions, the CMA may impose a fixed penalty on an undertaking of up to 1% of the undertaking’s worldwide turnover, or a daily penalty of up to 5% of the undertaking’s daily worldwide turnover for each day of non-compliance, or both. Similarly, subsection (6) sets out that the CMA may impose a fixed penalty on an individual of up to £30,000, or a daily penalty of £15,000, or both. We welcome that clarity on the face of the Bill. Labour has been clear for some time now that financial penalties are vital for compliance, and that the CMA must have the statutory footing to be able to impose them in the most severe cases of non-compliance.
We further note clause 86(7) to (9), setting out that the Secretary of State has the power to amend the maximum amounts of penalty that can be imposed on an individual. Naturally, that is a point that I must press the Minister on: in what circumstances does he imagine that the Secretary of State would make such changes? It is an interesting power to ascribe to one individual, therefore we welcome subsection (8), which states that the Secretary of State must consult the CMA and such other persons as the Secretary of State considers appropriate before making the regulations. We therefore support clause 86 and believe it should stand part of the Bill unamended. Labour sees clause 86 as fairly procedural, setting out which sections of the Enterprise Act 2002 apply for penalties imposed under clause 83 or clause 85 of the Bill.
I will keep my comments on clause 87 brief as we see it as clarification rather than contentious, in particular given that we agree with the Government’s approach more broadly on enforcement and appeals. My one plea to the Minister is that he and his colleagues in the Department do not bow down to likely pressure from big SMS firms.
We appreciate that in recent months we have faced headlines about some tech companies threatening to withdraw from the UK if provisions on online safety become—as they see it—too cumbersome. However, when it comes to regulating the online space more widely, whether in our digital markets or through safety provisions, we know that companies have remained unregulated for too long, and that that is having a massive impact on consumers. That applies to all of us in Committee and the hundreds of thousands of constituents across the country we represent. That said, we support clause 87 and have not sought to amend it.
Clause 88, too, we see as fairly standard, in that it sets out exactly how the CMA will calculate daily rates and turnover for the purpose of imposing a monetary penalty. This clause clarifies that daily penalties will accumulate until the person complies with the requirement—for example that the requested information is provided—or, where the penalty is incurred in relation to an overseas investigation, when the overseas regulator no longer requires assistance.
Labour further welcomes the fact that clause 88 will give the CMA the discretion to determine an earlier date for the amount payable in order to prevent that amount from accumulating. We of course hope that application of the provisions will rarely be required, but they are welcome additions to have on the face of the Bill.
Lastly, we note that clause 88(2) to (4) gives the Secretary of State the power to specify how turnover is calculated in secondary legislation. Again, I would welcome some clarity on this point. I wonder whether the Minister can further clarify in exactly what circumstances he envisions these powers will be required and, if he can confirm whether, when the Secretary of State has to draw upon those powers, what action will be taken to ensure the secondary legislation required is not subject to further delay? That point aside, we understand the need for clause 88 and welcome its inclusion in the Bill.
Clause 89 is important in that it places a statutory duty on the CMA to prepare and publish a statement of policy in relation to the exercise of powers to impose a penalty under clauses 83 and 85. In doing so, the statement must include considerations around whether a penalty should be imposed, as well as details of the nature and amount of any such penalty. We welcome the provisions in subsection (3) that confirm that the CMA may revise its statement of policy and, where it does so, must publish the revised statement.
We also feel that the requirement of the CMA to consult the Secretary of State before publishing a statement is an important step. However, Labour feels some clarity is needed here to establish exactly when and where that statement will be published. Will the Minister confirm the timelines for when the CMA will be required to publish the statements? It is important that there is no delay; any specific timelines will be gratefully received. Following those assurances from the Minister, I am sure we will be happy to support the clause standing part of the Bill.
Lastly, we see clause 90 as a standard clarification that ensures that where a person has been found guilty of a criminal offence committed under clauses 91, 92 or 93, which we will soon debate, they will not be required to pay a civil penalty for that same offence. It is also right that where a person has paid a civil penalty for an act of the kind referenced under clause 85, they cannot be criminally convicted for that same offence. We also welcome the clarity that the clause does not prevent criminal or civil proceedings from being started where, respectively, a penalty has been imposed but not paid or someone has been charged but not convicted.
Again, we hope that these clauses will never have to be enforced in reality, but they are important additions and Labour support them, given the importance of ensuring the CMA has the teeth to implement this regulatory regime in full.
Paul Scully
The hon. Lady mentioned “without reasonable excuse”. The onus is on SMS firms to prove that they have an excuse for committing a breach. That approach reflects the bespoke targeted nature of the regime, which means that firms should be fully aware of whether they are compliant. That same threshold is used in the competition regime already for breaches of specific directions and commitments; other prohibitions in the competition regime are more high level than any other obligations within the digital markets regime, making it harder for firms to assess their own compliance and therefore requiring a different legal threshold.
On updating penalty limits, and the Secretary of State’s power to do so, it is important that the new regulatory regime is agile, flexible and can be adapted to changing circumstances. The power is the same as is already used under the Enterprise Act 2002, which ensures consistency across the legislation and will ensure that the power remains an effective enforcement mechanism in the future. The Secretary of State must consult the DMU and other persons before making changes to the penalty levels. Importantly, proposed changes will be subject to the affirmative procedure and will need to be approved in Parliament. Another hon. Member asked about where the policy will be published; again, that will be online and in full. Clearly, that will be as soon as is practicable, because we want to keep the pace of the policy as fast as possible, in order to keep up to date with any detriment to especially challenging tech, and obviously to consumers as a consequence.
The hon. Member for Feltham and Heston asked about the power to update turnover and how that might be calculated. It is really important that in this area the regulatory regime remains agile and flexible, and granting the Secretary of State the power to specify how turnover is calculated in secondary legislation will allow any future changes in accounting principles, for example, to be taken into account to ensure that these calculations remain relevant. Again, that power is the same as that already used under section 94A of the Enterprise Act 2002, ensuring consistency across the two pieces of legislation.
Question put and agreed to.
Clause 83, as amended, accordingly ordered to stand part of the Bill.
Clauses 84 and 85 ordered to stand part of the Bill.
Clause 86
Amount of penalties under section 85
Amendments made: 31, in clause 86, page 52, line 29, leave out “a designated” and insert “an”.
See the explanatory statement for Amendment 26.
Amendment 32, in clause 86, page 52, line 31, leave out “designated”.
See the explanatory statement for Amendment 26.
Amendment 33, in clause 86, page 52, line 33, leave out “designated”.—(Paul Scully.)
See the explanatory statement for Amendment 26.
Clause 86, as amended, ordered to stand part of the Bill.
Clauses 87 to 90 ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Mike Wood.)
Victims and Prisoners Bill (Fourth sitting)
Thursday 22nd June 2023
(1 year, 6 months ago)
Public Bill CommitteesRead Full debate Victims and Prisoners Act 2024 View all Victims and Prisoners Act 2024 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 22 June 2023 - (22 Jun 2023)
The Chair
We are now sitting in public again, and the proceedings are being broadcast. We now hear oral evidence from Jenni Hicks, a Hillsborough justice campaigner. Good afternoon, and thank you for coming. Do you want to say anything briefly at the start or do you just want to take questions?
Jenni Hicks: I have got something to say. Would you like to hear a little bit about my story?
The Chair
Q
Jenni Hicks: About my journey, I should say.
On 15 April 1989, my then husband Trevor and I, along with our daughters Sarah, who was 19 years old, and Vicki, who was 15 years old, drove from our home in north London to the Hillsborough football stadium in Sheffield to watch our team, Liverpool, play Nottingham Forest in the FA cup semi-final. We were all Liverpool season ticket holders and had been allocated four tickets for the semi-final at Hillsborough.
Trevor and I drove home from Sheffield that night with an empty back seat in our car, having had to leave Sarah and Vicki in body bags on a dirty gymnasium floor at the Hillsborough football stadium. After identifying Sarah and Vicki, we were told that they were no longer our property; they were now the property of the coroner of South Yorkshire. We were questioned by two police officers for over an hour about our movements that day since we had left home that morning—mainly about how much alcohol we had had to drink. Trevor was asked to make a statement, which was later used at the Taylor inquiry. No solicitor was present when we were being interviewed. It felt more like an interrogation than an interview.
That night in Sheffield, we were treated like criminals by the police, who did not show an ounce of compassion. What followed is the reason I support the urgent need to appoint an independent public advocate panel. The lies, corruption and dirty tricks campaign began immediately, informing the press, media and anyone who would listen—hideous, nauseating lies about the Liverpool fans’ misbehaviour. I will not repeat those now disproven hideous lies here, as that would give them some kind of credence and publicity, which is what South Yorkshire police had intended.
It took 26 years for the Liverpool fans to be exonerated; however, the mud from those lies and that corruption still sticks in certain quarters of society to this very day. It took what seemed like a lifetime of banging our heads against brick walls and climbing seemingly unsurmountable barriers before—following the 20th anniversary of Hillsborough, and thanks to the courage of the then PM Gordon Brown and the foresight of Lord Michael Wills, my unsung hero—the process of setting up the Hillsborough Independent Panel began.
With the release of previously withheld documentation, enabling families to finally find the truth about the causation of their loved ones’ deaths, a second inquest found that all 96 at the time—children, women and men—had been unlawfully killed; a 97th victim was added later. This is why we need an independent public advocate, with a public advocate panel based on the format of the Hillsborough Independent Panel. That’s me up to now. I have written down some other points, so that I do not forget anything. If you bear with me, I can read them out and then you can ask me questions if you like. Is that okay?
The Chair
I am afraid we only have half an hour. Why don’t we just take questions—then perhaps you can add some points. Is that all right?
Jenni Hicks: Well, there’s something important that I would like to say. I won’t read the whole thing; I will just jump about a little bit.
It took me and the other bereaved Hillsborough families 23 years of campaigning to finally hear from the Hillsborough Independent Panel in 2012 the truth about how our loved ones had died. It then took another four painful years to finally have, in 2016, the correct inquest verdicts that all 96 victims had been unlawfully killed, which I am sure you know is gross negligence manslaughter to a criminal standard. Importantly, the 96 innocent children, women and men—the Liverpool fans who had been cruelly blamed for causing the disaster—were also exonerated at the inquest of any blame whatsoever.
Here we are 26 years later to hear that truth. That can’t happen again. It mustn’t. Other families must not suffer what the Hillsborough families suffered. I mean, 26 years is over a quarter of a century of your life, just to have the truth and the correct inquest verdict. That cannot be allowed to happen. This is why I wholly support an independent public advocate—I keep stressing “independent” because the clue is in the title—and an independent public advocate team. In my opinion, it must be set up in the same way as the Hillsborough Independent Panel was. All the documents should be available to the independent public advocate and his team or her team right from the very start. People should not have to wait 23 years to have documentation of the truth. That is a summary of what I am saying in these notes.
The other point I made in these documents—as you say, I do not have time to read it all out now—is the fact that as it stands at the moment, the Government’s suggestions for an independent public advocate just would not work. It would just not be independent, because it is too dependent on the Minister. It seems that the supposedly independent public advocate will be answerable to the Secretary of State, which does not sound like independence to me.
Sarah Champion (Rotherham) (Lab)
Q
Jenni Hicks: Well, if they are an independent public advocate, they should be like the Hillsborough Independent Panel were; they did not have to answer to anybody. They looked in, saw the documentation, and then reported on what they saw. They were not answerable to anybody, I don’t think. Is that correct, Maria?
The Chair
We are very grateful to you—this is a very moving testimony and you have had the most appalling experience—but we cannot have a general conversation; we have to have set questions. Can I now ask Maria Miller to ask her questions?
Jenni Hicks: Yes, sorry about that.
The Chair
That’s all right—we quite understand.
Jenni Hicks: I am an amateur at this, I am afraid.
Maria Eagle
It is fine. I have been called some names in my time—usually Angela.
Maria Eagle
Q
Jenni Hicks: That is why I automatically asked Maria. I do apologise.
Maria Eagle
I am just making it clear that I do know the witness.
Jenni Hicks: Maria is the only person that I know here.
Maria Eagle
Q
Jenni Hicks: I am hoping that an independent public advocate and their team would be able to have sight of the documentation that is needed to get to the truth. There has got to be transparency. We did not have that transparency until 2012—it took 23 years for us to have transparency about how our loved ones died. That is the difference that I am hoping it would make. That is such an important part.
Obviously, the independent public advocate would be able to guide people towards help in other ways, but for a major public disaster like the Hillsborough disaster, which was surrounded by a lot of lies and corruption, just to have transparency about the truth of what really happened was vital. We would never have known the truth without that. That is what was so good about the Hillsborough Independent Panel: it operated through transparency and sight of the documentation that it needed to come to its conclusions.
Maria Eagle
Q
Jenni Hicks: Yes.
Maria Eagle
Q
Jenni Hicks: It was horrendous. It was cruel. We were put through such an inhumane process. Not only had we lost our loved ones—in my case, my two daughters—but we did not have the truth about how they died. It was surrounded by lies.
I was there on the day. We were there as a family, and my ex-husband was there on the pitch with the girls, so we knew that the propaganda was lies. We were up against organisations like the police and the Government—like I said in my statement, those were huge, huge obstacles at the time—but we still carried on fighting, because we knew in our hearts what the truth was. Finally, 23 years later, we did have that truth, but it was a long, hard and gruelling process. It is not something that I would want anybody else ever, ever to have to go through.
It is bad enough to find yourself as part of a disaster and to be bereaved by a disaster. Then, when you cannot even get to the truth about what happened—or you know the truth and you know that lies are being put out there—it is not good. Nobody should ever, ever have to be put through that process again. I would like it to be a legacy for the 97 people who died that nobody else has to suffer like the Hillsborough families did.
Maria Eagle
Q
Jenni Hicks: No.
Maria Eagle
Q
Jenni Hicks: Yes. We felt on our own with this huge fight to find out what had really happened, or in our case—because we were at the match and knew what had happened—it was to find the evidence of the truth. We basically knew the truth but we could not get hold of the evidence; nobody could. It was not until the Hillsborough Independent Panel that we had that evidence, finally, and we finally—as I say, four years after HIP—had the correct inquest verdicts. The first inquest put a 3.15 cut-off in, so a lot of the vital evidence after 3.15 pm could not be heard. There was absolutely nothing we could do about it. It is very, very frustrating.
Maria Eagle
Q
Jenni Hicks: Yes, that is vitally important. That is why I am supporting it. That is why I am here today speaking about it—because I think it is vitally important that we have this facility, but that we have it correctly and they do keep their independence. When you are caught up in disasters, particularly if there is propaganda surrounding it, you need to be able to trust—you would need trust in a public advocate in a team. By having to report to a Minister, you are thinking, “Well, who is in charge of this? Is it the public advocate or is it the Minister?” I do not think that would go down very well.
Rob Butler (Aylesbury) (Con)
Q
Jenni Hicks: Thank you, but it was not just me. It was me and the rest of the families, and the whole city of Liverpool, which suffered a huge injustice that day.
Rob Butler
Q
Jenni Hicks: I actually think this is the point in having an independent advocates panel. I think we need to have experts on that panel, as the Hillsborough Independent Panel did, such as an archivist and a researcher—perhaps even a historian, certainly a trauma expert and perhaps even a forensic pathologist. We were given incorrect evidence about the pathology and everything, so you need people who are experts in their field, in my opinion, as part of the independent panel.
Rob Butler
Q
Jenni Hicks: Yes, I think that is really important. I have some bullet points here, and that is what I have got down here—even a lawyer who knows, but certainly people with the skills needed.
Rob Butler
Q
Jenni Hicks: That is a huge question. I think that as long as the Hillsborough families were happy, it would work. Yes, they are going to support families, but there also has to be an independence when you are looking for the truth, from both sides; that is how it worked with the Hillsborough independent panel. As long as the families felt that the advocate and the teams were independent and there was not anybody on the panel they particularly had an objection to, I think it would work.
Rob Butler
Q
Jenni Hicks: Yes. Transparency is so, so important.
Rob Butler
Q
Jenni Hicks: If we had had the transparency, it would have prevented having to wait 23 years for the truth. They could also have pointed us in the right direction and they could perhaps have helped with people who needed support in other ways—counselling, perhaps, or whatever support they needed. That is why you have experts on the team who could help with the various issues that come up. But for me the most important part is to have the transparency.
As Hillsborough families we did not have a level playing field of funding, either. As Maria rightly said, when we went into the first inquest in 1990, we had a junior barrister who the families had all clubbed up to pay for: I think we all paid £3,500 each, 40-odd of the families, but all we could afford was a junior barrister. He was up against 12 top QCs with all their teams of lawyers. You can imagine.
We had this junior barrister and he did very well, considering. He ended up having to speak about every fan—not just the people who died, but everything that had happened with Liverpool supporters. He had a huge, huge job on his hands. We were told by the QC that we could either have him, the Rolls-Royce, or have the clapped-out Mini, which was the junior. That was Tim King, who we had. He did his best, but there certainly was not a level playing field of funding for families. As Maria quite rightly said, too, it did become very adversarial, considering it was an inquest.
Sarah Champion
Two quick questions from me. First of all, can I just say thank you so much for coming and sharing your experiences? I am so deeply sorry for what you and so many others have gone through.
Jenni Hicks: Thank you for having me.
Sarah Champion
Q
Jenni Hicks: How soon can you do it?
Sarah Champion
One of the examples that we heard from earlier witnesses was that they have a series of people who are on stand-by, so they could literally come in immediately.
Jenni Hicks: I didn’t realise that.
Sarah Champion
Q
Jenni Hicks: Yes. I think it has got to be immediately.
Sarah Champion
Q
Jenni Hicks: Because, certainly in our case, there was a huge cover-up. The longer you wait, the longer the cover-up stands, so it has to be immediately. Also, it is in the immediate aftermath that the victims’ families need the support anyhow, so it has to be as soon as. In fact, I think there should be somebody in place or on stand-by.
Sarah Champion
Q
Jenni Hicks: Oh yes, and to have the correct cause of death on the death certificate.
Sarah Champion
Q
Jenni Hicks: I have four death certificates for Sarah and Victoria. The first two said, “Sarah Louise Hicks. Cause of death: accidental death”, and the same for Victoria, who was 15. Twenty-three years later, we had the death certificates reissued and they said, “Sarah Louise Hicks; unlawfully killed” and “Victoria Jane Hicks; unlawfully killed.” That is very important—extremely important. I agree with the family from South Shields.
Sir Oliver Heald (North East Hertfordshire) (Con)
Q
Jenni Hicks: Certainly, because we finally had the evidence of what had really happened and the second inquest got to see that evidence where, in the first inquest, because of the 3.15 cut-off, how the victims died and how long they lived afterwards was not put to the jury, because the jury did not ever get to see that evidence. It was deemed at the first inquest that everybody who died had received their injuries before 3.15, which was blatantly untrue. That is why I am saying the transparency of and having that documentation and evidence, if you want to get the right inquest verdict, is imperative.
Sir Oliver Heald
Q
Jenni Hicks: Certainly. One of the major things at the second inquest was when we did our pen portraits of our loved ones. That was a pivotal moment for everybody in the inquest. We had an opportunity to talk about the person who had died. They were not just a number; they were a person. When you are involved in a huge disaster where numerous people died, you do become part of just that number. Like I said there, I would like the independent public advocate to be a legacy for the 97, but, at the second inquest, it was broken down into individuals. I learned a lot myself just listening to the other families’ pen portraits about their loved ones. That is very important. I am pleased that the inquests are going that way now.
Sir Oliver Heald
Q
Jenni Hicks: Thank you. All the families are saying it—the city as well.
Anna McMorrin (Cardiff North) (Lab)
Q
Jenni Hicks: That is huge—there has to be a duty of candour. I do not just mean a duty of candour where you—how can I put this without being offensive to anybody?
Anna McMorrin
Don’t worry about that.
Jenni Hicks: Where you do not lie, but you do not tell the truth. I am talking about telling the proper truth, because often you do not actually lie, but you do not tell the truth. If it is a duty of candour, it has to be a proper duty of candour, and there should be consequences if you do not tell the truth.
When I spoke to the last Committee, we had Paul Greaney KC here and he said, “Apparently, there is some sort of duty of candour at the moment, but there is only a £2,000 fine.” To big organisations, that is just pocket change. It should be something a little stronger than just a £2,000 fine if you do not tell the truth. That and transparency are the two really important things.
The Chair
Thank you very much, Mrs Hicks. We salute your courage. Thank you for coming.
Examination of Witness
Kimia Zabihyan gave evidence.
The Chair
We will now hear from Kimia Zabihyan of Grenfell Next of Kin. I think we are having some technical problems with Dr Stuart Murray, so we have just one witness for this quarter of an hour session.
Maria Eagle
Q
Kimia Zabihyan: Actually, I started off on the ground as a volunteer. There were many, many people who came to the area affected by the tower. I have my roots in that borough and I grew up there, so it touched me very deeply, but the thing that struck me the most was seeing pictures of the missing people. Many of them looked like people who were familiar to me, because they looked like my family members. It really felt very personal, because 85% of the people who died in the tragedy were black and brown people. I felt that it was really important to make sure that there was advocacy for that, particularly given that most of the people who died were recent migrants.
It is very different from the Hillsborough experience and many other experiences—the Marchioness, for instance. This was the first national tragedy that predominantly affected black and brown people, and it became very obvious that the system responding to the moment was entirely white. That created dissonance, and it felt as though there was room to advocate for those people, because the majority of them did not have roots in this country; they were recent migrants.
Immediately, we were told, “Don’t talk about race. Let’s just deny that whole part of it, because it will turn off public sympathy.” These were the things that I was experiencing and seeing as someone from that background and that heritage who is very blessed with the advantage and privilege of a good education, life experience and work experience. It felt really important to play a role, so that was really what brought me there and kept me there. I am still there after six years.
Maria Eagle
Q
Kimia Zabihyan: That is a really big question. Actually, it is not just those few years; we are still in exactly the same place. We are still stuck in the same place because we do not have an independent public advocate and there is no recognised role for it, really, even though I am called an advocate by all the systems and I engage with all the systems. Ultimately, it has been one of choice, and in a way you are trapped by it, because you know that if you step away, there is nothing in its place. There is nothing to take that place.
With those families who have lost immediate family members, several things happen. In the first instance, it will be a disaster by its very nature, because it is not expected. There is chaos—absolute chaos. The people who know pretty quickly that their family—their child, mother, father, husband or wife—is missing are in shock. What happens is that immediately there is a separation; they become invisible, because they are sort of protected by the police—quite rightly—and the victim support units etcetera, so they are literally invisible on the scene.
We had survivors on the scene and we had systems engaging with survivors, but we did not have anything in place for the actual bereaved—nothing. None of the policies addressed their needs and their specific characteristics, which in this case were essentially rooted in their otherness, if you like. Their otherness became even more othered, and they became even more marginalised. The system responded with policies for the tragedy, but it was very much through one particular prism, which was through only the survivor prism. To this day, we still do not have any policies that actually address the specifics of the next of kin of the deceased, because there was never that public advocacy role.
Maria Eagle
Q
Kimia Zabihyan: No, not at all. I am passionate about the fact that there needs to be a public advocacy role, to the point where I have basically been doing it pro bono for six years, because I cannot believe that we do not have such a thing in place. Coming back to some of the questions you were asking Jenni Hicks earlier, it is really important to have that whole system set up, because disasters do not make appointments—they happen. You need to have a system and structure in place that can just be instigated as part of a resilience plan or disaster response. It needs to be extremely diverse, and it needs to have people who are awkward and definitely on the side of the victims.
Maria Eagle
Q
Kimia Zabihyan: It is very difficult, because what does independence really mean? You can call a person independent, but actually they are really not that independent. The pool of people you need to be looking at are people who have a huge amount of integrity and a footprint in speaking truth to power. If a person has that sort of credibility, it does not matter who they are reporting to.
The disadvantage of their being completely separate from our democratic system is that essentially they are toothless, so this independent person just becomes another report that is given to the Minister. It does not have any weight; it does not have any power. It needs to be someone who has the power to make policy interventions and decisions, at ministerial level—appointed by the PM even, not Ministers.
With Grenfell, we had a conveyor belt of Ministers. We had three name changes and six Ministers. The Department started off as the Department for Communities and Local Government, then it became the Ministry of Housing, Communities and Local Government, and then the Department for Levelling Up, Housing and Communities, and Ministers do not really mean anything, because they come and go. It has to be at Prime Minister level.
More importantly, “independent” can mean different things to different people. It was interesting watching the covid inquiry the other day, when Sir Oliver Letwin talked a little about that. It is about having people in the room who ask the awkward questions and are able to make a difference. We do not want someone else who just writes another report that goes nowhere. That is why it can take 30-something years.
We need to do that for our democracy and for our efficiency. You would be amazed at how much money has been wasted in the Grenfell response and recovery—ridiculous amounts of money—because the whole system is so inefficient.
Maria Eagle
Q
Kimia Zabihyan: To give you an example, very early on, when it became apparent that the majority of the people who had died were ethnic minorities in this country, because this is London and it happened in London—Grenfell will not be the last time this happens—the system did not know how to respond to that. The next of kin tended to live abroad, so we had to locate them and arrange for visas and what have you to bring them to the UK for the processes of identification, DNA tests and that sort of thing.
At the time, we were very lucky, because Amber Rudd came down and got it very quickly. She absolutely got it very quickly. The one thing that happened really promptly was that she allowed for that; she made sure that we had processes to identify the next of kin, get them on a plane and make sure they had visas—or even, sometimes, just to get them on a plane and issue the visa as soon as they arrived at the airport. People were coming from conflict zones, places where there might not be an embassy or places where they would not even be allowed past the first security gate. We had people from Afghanistan, Iraq, Sudan and all sorts of places that were quite awkward.
The assumption that the system makes is a sort of myopic, white middle-class assumption about who victims are and therefore what the responses should be. The IPA or the panel has to be really quite progressive, sophisticated and understanding, and it has to have the experience that the world does not really function like that any more.
That was an example of something that worked—just doing something very practical—but only Amber Rudd had the power to do that, because she was the Home Secretary. We are now at a stage where we are trying to execute things that respond to the need of the next of kin, but time passes and the system moves at a different pace—it is on a different timeline. Six years for those in the system is, “Oh, we’ve sorted everything; we’re at the six-year mark,” whereas for the people who are affected, the six-year mark does not mean anything, because they are still at ground zero trying to get policies or attention for issues that speak to their particular characteristic.
If we have a panel or an independent advocate who can speak to Ministers and make policies that address the specificity of the victims, that will serve not only the victims, but our democracy. It will also save a ton of money.
Janet Daby (Lewisham East) (Lab)
Q
Kimia Zabihyan: I have, but I can only speak of my own experiences. The majority of my experience has been with the immediate family members, and they were the ones who defined what is a disaster, or a national disaster. It is the sort of tombstone imperative: once you get a certain number of fatalities, it is a thing. That was made very clear to me by someone very senior in the Royal Borough of Kensington and Chelsea, who said, “You do realise that if less than 10 people had died in the tower, we wouldn’t even be obliged to rehouse everybody.” They would have just gone on the housing list. They might have got lots of points, but they would have had to wait on the housing list for appropriate accommodation. It is because of the number of fatalities that the thing becomes a thing, yet they are denied that power, or respect.
The Chair
Order. I am sorry, but we have to stick to the programme motion, according to the rules of the House. I am given no flexibility. We have to end your evidence there, but we are very grateful.
Kimia Zabihyan: You are more than welcome. I am always available to anybody who would like to have any kind of conversation, because I think what you are doing is really important. Everyone has a contribution to make, but Grenfell is the last disaster that presented specific challenges, and we are very frustrated that there is no learning from it.
The Chair
Our next witness is Sophie Cartwright KC, a solicitor at Deans Court Chambers.
Janet Daby
Q
Sophie Cartwright: Good afternoon. Just for clarification, I am not a solicitor; I am a barrister.
On legal aid, specifically in respect of the IPA it is slightly different because they are not to provide legal activity, but absolutely there should be non-means-tested legal aid available for victims of major incidents. That to some extent cures part of the issue around ensuring that there is access to the necessary advice and support for victims of major incidents, which, as the genesis of the IPA was, is a landscape that is daunting, confusing and overwhelming. Allowing non-means-tested legal aid so that victims can get access to appropriate advice through solicitors and latterly barristers, if necessary, is essential to address the concerns that led to the proposal for the IPA.
Janet Daby
Q
Sophie Cartwright: I think there is a slight confusion at the moment about what is set out in the Bill, particularly in clause 27 on the functions of an IPA. What is slightly confusing is that the IPA has been given the role of an independent public advocate, but it is not meant to be an advocate in the classical sense of being an advocate that provides legal activity, because that is precluded under clause 27(6). Essentially, therefore, the IPA is not intended to be an advocate in the legal sense of the word.
When one looks at the function envisaged in clause 27, it is to
“provide such support to victims…as the advocate considers appropriate”.
To that extent, I think there is still some confusion about what the purpose of the IPA is intended to be—whether it is just to provide support in the immediate aftermath, or whether it is to be a signposting service. There is a slight disconnect, because what is proposed is that the Secretary of State will appoint IPAs after major incidents occur, which will inevitably create delay. You will almost have a vacuum when a major incident occurs, because you do not have an IPA in place to give that support.
There will then be a whole process of liaison with the Secretary of State to appoint an IPA, so there is likely to be a recruitment, with a number of people putting themselves forward to be that IPA, which will inevitably cause delay. If the IPA is to have that clear role of offering support in the immediate aftermath of a major incident, they really need to be in place already so that they can provide the support as envisaged. If there is then to be a negotiation with the Secretary of State about the appointment, the terms of the appointment, the remuneration and what their functions can be, the IPA will inevitably get bogged down in delays, meaning that it is not providing what it is intended to provide in the immediate aftermath of these major incidents.
Janet Daby
Q
Sophie Cartwright: If there is a commitment that there needs to be an IPA, and if there is to be such a person or individual, then in my view it should be a function that is in place and appointed, with someone already in post, whether or not it is full time. It is envisaged that part of the role of the IPA, if they are individually appointed, is that they have a report-writing function and capture the views of victims. That necessarily allows the work of an IPA to be taken more slowly, in order to capture the victims’ experience and to learn lessons from major incidents that can bring about lasting and meaningful change.
I know that as part of this process you are speaking to a number of victims of major incidents. I think every victim and family experience will capture learning or things that could be done to make the process better for them. There is a lot that victims of major incidents have said about the intrusion of the press, and about not knowing where they need to go. If the IPA’s role is full time, that can allow them, when they are not dealing with the quick-time, immediate aftermath of these devastating major incidents, to be putting in place the system for capturing the victim experience, to feed into report-writing, and to ensure that there are recommendations and that lasting change occurs in respect of how to make the victim experience better and the structure and systems that are in place.
Rob Butler
Q
Sophie Cartwright: Yes.
Rob Butler
I am not sure whether you heard the evidence from previous witnesses, but Jenni Hicks of the Hillsborough campaign in particular was talking about a panel of support, with people who have different skills and different experiences. What do you think are the roles that are most important to the function of a successful IPA?
Sophie Cartwright: Certainly the IPA should have a trauma focus. Plainly, there should be a knowledge and experience that involves an understanding of the impact of trauma, so almost supporting from a resilience point of view with accessing necessary support through psychological services. In our experience of the Manchester Arena, we were absolutely blessed with the work of the resilience hub, which had a team of psychotherapists and psychologists who were providing that trauma focus. Essentially, the work of that body should not make things worse and should have a trauma focus to it.
I would definitely say that if there is to be a panel, it needs to be people with the right skillset, so that in their dealings with victims and obviously with victims’ families, they are not making things worse. They would definitely need a background that involves a psychological, therapy-type role, so they have that understanding. Also, if there is to be that practical support, it has to have the necessary skillset.
Clause 28 also envisages that IPAs will be asked to be properly interested persons at inquests. There needs to be clarity as to the purpose of the IPA, because that certainly suggests that there will be a form of providing advice. In terms of functions, clause 27 also talks about assisting with investigations by public authorities and assistance with the inquest and inquiry. Those are very much almost legal roles. The IPA should not in any way be a substitute for the access of families and victims to their own independent legal advice and representation.
Rob Butler
Q
Sophie Cartwright: Part of the function of the IPA is said to be a signposting role, but if it is not in place in the immediate aftermath and then there is this delay in putting it in place, I cannot quite see what the function is, if it is not to replace the role of legal representation, which it is not intended to do.
If it is not in place to deal with the immediate aftermath, for support and signposting, I do not see what its functions really are in terms of challenging public authorities, unless it is going to be a role that is linked to the changes on the duty of candour, which is being massively championed on the back of the work of Bishop James Jones, and that sort of role for challenging public authorities.
It is about clarity on what the function of the IPA is intended to be. At the moment, I do not see, practically, as the role is envisaged through the Bill, that it is going to be meaningful or what the IPA is intended to achieve by way of support and signposting for victims of major incidents, if it is not in place and ready to go. That is the concern, particularly when under clause 25 there have to be terms of appointments and then agreement, which is inevitably going to have delays. To what extent, then, is it really discharging what was intended to be its signposting and supportive role, if it is not there at the get-go of a major incident?
Maria Eagle
Q
Sophie Cartwright: Yes, that certainly seems to me to be a measurable and proportionate role for an IPA. It should be something that exists so that, when incidents happen, families know that the body exists and know where to go, rather than thinking, “Who is the IPA? Who has been appointed, and who will it be?” and the experience being dependent on who that IPA is.
If it is a body that exists, where families know that they can go as part of that search for the truth or to seek advice, I absolutely see that as more what was intended when the IPA was initially proposed. Certainly, the genesis of the IPA was very much the experience of Hillsborough. There has been a lot of discussion around it having a role holding core public authorities to account. I do not necessarily know how practically that would work when there is an inquest and a coroner is discharging their investigatory duty or—if there were to be an inquiry—how a chairman would discharge their role as the chairman. There has to be some thought around that to ensure that it does not trespass within the investigatory roles and the statutory functions of other investigators post major incidents.
The original concern was that public authorities had not shown candour in their approach to investigations, so that may be a function of the IPA. Certainly, when the IPA role was first announced in March by Mr Raab, a lot of the support seemed to be around saying, “This should be a role for the IPA around Hillsborough’s duty of candour.” I really cannot comment more broadly on that, but that was what was intended originally when the IPA was first proposed, which would fit with the evidence that you heard this morning. I apologise that I have not had access to that evidence in advance of speaking to you today.
Maria Eagle
Q
Sophie Cartwright: If the IPA had existed then as a place where the families could go for help, then certainly. The IPA could have a function to assist with that immediate intrusion that can occur to families. A lot of the families and witnesses that gave evidence to the inquiry talked about the massive intrusion on them by the press after the major incidents. If the IPA had a role to hear families’ concerns around press intrusion, and it liaised with editors and the like to stop that form of intrusion before lawyers were in place, I can definitely see that being an avenue to go down.
There was also a lot of concern from a number of family members about the blue light-type agencies, which immediately afterwards were putting out their own media and documentaries about events. I know that for a lot of the families the content of that material caused real concern. Again, the IPA could be somewhere they could go to speak about that and raise concerns, and the IPA could then be enabled to speak to the relevant representatives of those public authorities to ventilate the families’ concerns about that material, as well as to help explain the process to them.
After the Manchester Arena bombing, a lot of good work was done by the coroners and family liaison officers involved. I think having another place where victims could go to seek support in the immediate aftermath would be good. Anything that allows victims an avenue to try and understand what is happening is definitely for the good.
Janet Daby
Q
Sophie Cartwright: If it remains as intended at the moment, that is not really clear, because obviously the terms of appointment will depend on the agreement with the Secretary of State. If there is to be a report-writing function that captures the victim’s views, it is going to be a longer-term thing. It certainly seems to be a role that is envisaged as running alongside an inquest and inquiry process, which is why it is quite difficult if it is a number of appointments of different IPAs rather than a full-time position of the office of the independent public advocate, with a head IPA that can appoint individuals as and when necessary.
Again, if it is envisaged as a role in the immediate aftermath for signposting and support until victims have their own lawyers, who then can very much discharge the roles and functions of an IPA, it might just be a shorter-term thing. But if it is intended to also capture the victim experience and have a report-writing role, that is a much longer-term thing. We need to consider the functions of the IPA and whether it is intended to be a full-time appointment. As it is currently drafted, it is intended to be multiple IPAs that apply for the role of the IPA and are then appointed with terms of reference. That is a very different thing, and it potentially has a longer shelf life.
Janet Daby
Q
Sophie Cartwright: It envisages significant numbers by reference to death or serious injury. It seems that the function of the IPA is around those incidents where there is death, but as drafted the Bill also covers a major incident where there is not death—where you would envisage an inquest or inquiry process—but serious injury. If it is intended just to cover major incidents, there is no definition of “significant”, but I know the guidance gives a comparable definition by reference to the Manchester Arena incident, Grenfell and Hillsborough. I think there is vagueness around significant numbers of deaths or serious injuries, but as drafted it would also capture major incidents where there is just injury.
The other thing I want to flag is that at the moment it is intended to cover only major incidents that occur in England and Wales. Again, there might potentially be a disconnect if you are excluding the IPA from having a role. One can well imagine the Tunisia inquest that occurred, which was to assist victims of a daunting, confusing and overwhelming process. As it is currently drafted, it seems almost to exclude major incident types where large numbers of British nationals get caught up in incidents overseas. I cannot see, on the face of it, why it would exclude major incidents where a large number of British nationals are caught up overseas. I wanted to flag that as a potential area where there may be a real role for the IPA: if there are large numbers of victims caught up in major incidents overseas.
The Minister of State, Ministry of Justice (Edward Argar)
Q
You alluded earlier to the interaction between an IPA, as envisaged in the Bill, and other judicial or investigatory processes, whether they were inquests or other public bodies performing their work in the aftermath of a major incident. There have been a number of calls for the IPA to be a data controller, so that it can access data. We heard this morning from another lawyer, Tim Suter, who argued that that would not be the best approach and that individual public bodies should remain the data controllers, but with the IPA being able to view or access the data in that way. Do you have any reflections on that point? Once a statutory public inquiry is set up, how would the interaction between the IPA and the inquiry work best? On the data controller point, I can see arguments from various perspectives, and I am interested in your reflections.
Sophie Cartwright: Clause 30 deals with some data aspects. It goes back to having clarity as to the intended purpose of the IPA. If it is to discharge the role as per the evidence you heard this morning from the original proponent of the IPA role, it is for the IPA to have a data controller-type role in terms of seeking material and records. That could, though, be fraught with complete complexities that will then bog down the IPA role.
If it is envisaged at the moment that it will just be that supportive role, and interacting, it can become quite complicated, particularly if the IPA is not intended to have a role that involves legal activity. To that extent, anything around data controlling and making requests for records and properly retaining and looking after them is definitely more in the water of legal activity.
As the Bill is currently drafted, I think it would become an absolute nightmare if you were requesting the IPA to have the data controller function and require documents and records. Anything that involves requests for documents and controlling, retaining and storing them definitely has to have a legal activity-type oversight, so I can well understand why Mr Suter gave evidence today to the effect that the public authorities should remain the data controller.
It goes back to having a clear clarity of purpose as to what the IPA is. If it is intended that the IPA will have a candour role and make requests for documentation, it is inevitable that data protection and GDPR issues will have to be properly looked at and considered, because that is a very complex landscape. At the moment, that would not in any way come near what is intended in clause 30 on the data-control aspect of the IPA’s role.
The Chair
If there are no further questions, I thank you very much for your testimony. We are very grateful.
Ordered, That further consideration be now adjourned.—(Fay Jones.)