Draft Pensions Dashboards (Amendment) Regulations 2023
(1 year, 5 months ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Laura Trott)
I beg to move,
That the Committee has considered the draft Pensions Dashboards (Amendment) Regulations 2023.
It is a pleasure to serve under your chairmanship, Mr Robertson.
The draft regulations were laid before the House on 18 June. I am pleased to introduce this statutory instrument, which removes the staging profile from the Pensions Dashboards Regulations 2022 and introduces a single connection deadline of 31 October 2026 for relevant occupational pension schemes to connect to the pensions dashboards.
The successful introduction of automatic enrolment more than a decade ago, combined with a trend towards people working multiple jobs in their lifetime, has seen a substantial increase in pension pots. Research published by the Pensions Policy Institute estimates that there were 8 million deferred pots in 2020 and that, without intervention, that number is likely to rise to 27 million by 2035. Pensions dashboards will help hard-working savers to locate pension pots that they have accumulated over time, reconnecting them with lost and forgotten pots, supporting better planning for retirement. People will be able to deal with their various pensions, including their state pension, securely in one place online.
There can be no doubt that pensions dashboards have the potential to change the pensions landscape, but delivering dashboards for widespread use efficiently and securely is a complex undertaking. We anticipate that, once all schemes in scope of the draft regulations are connected, the pension records of more than 71 million memberships from relevant occupational pension schemes and providers of Financial Conduct Authority-regulated entities will be accessible to people at the touch of a button at a time of their choosing.
The reason for the draft regulations is that, at the end of last year, the pensions dashboards programme, which is responsible for delivering the digital architecture that underpins pensions dashboards, informed the Department for Work and Pensions that more time was required to complete the build of the digital architecture. The PDP faced several key issues: the technical solution had not been sufficiently tested and there was still work to do to finalise the necessary supporting documentation and to get the necessary systems in place to support industry with the connection process. It was concluded that more time was needed to deliver dashboards successfully and that a reset of the programme was required.
In my written statement in March 2023, I announced the delay and set out that the pensions dashboards programme would be reset to get it back on the path for successful delivery. Following the announcement, my Department engaged with a broad cross-section of industry and gave assurance that it would legislate at the earliest possible opportunity to provide certainty to schemes.
Since then, we have been examining several challenges facing the pensions dashboards programme. The decision to pause, review and reset the programme is providing the time to ensure complete delivery of the ecosystem and supporting documentation before industry begins to connect. So far, the reset has assessed the digital architecture and no fundamental issues have been identified. That has provided reassurance to Government to move forward with amending the regulations.
The staging profile in schedule 2 to the 2022 regulations set out the order in which different types of schemes, categorised by size and type, would connect to pensions dashboards. The 2022 regulations, however, did not provide the flexibility necessary to deliver a programme of this magnitude: a digital undertaking that will enable users to search more than 3,000 schemes to find their pensions. The draft instrument curtails the period of uncertainty for the pensions industry. As the staging profile in the 2022 regulations required the first schemes to connect at the end of August 2023, the amendment regulations were laid to avoid any perception that schemes are in breach through no fault of their own.
The draft instrument uses powers in the Pensions Act 2004 to amend the 2022 regulations to compel all schemes in scope to connect to dashboards by 31 October 2026. At the same time as providing more flexibility than is available in the 2022 regulations, retaining the broad framework of a phased approach will continue to help manage the flow of connections and maximise the coverage as early as possible. Government will work with key partners and the pensions industry on a connection timetable to be published in guidance.
We expect that the connection timetable in guidance will continue to prioritise large schemes with the greatest number of members for the first connections. It is also important to note that the dashboards’ available point—the point at which dashboards will be available for widespread public use—could happen before the October 2026 connection deadline in the regulations. The connection timetable set out in guidance will require scheme trustees or managers to have regard to the guidance; not doing so would be a breach of the regulations.
While the instrument amends the requirements on trustees or managers by the removal of schedule 2, there are no other material changes to the 2022 regulations. The amendment regulations will facilitate a collaborative approach to connection that delivers on our commitment to introduce pension dashboards.
I am satisfied that the draft regulations are compatible with the European convention on human rights. Pension dashboards have the potential to transform retirement planning forever, and the regulations are another step in the right direction.
Matt Rodda (Reading East) (Lab)
It is a pleasure to serve under your chairmanship, Mr Robertson. I also thank the Minister for updating the Committee on this important matter. The Opposition support the dashboard. It is an important initiative that should offer a great deal of benefits to pension savers and the pensions industry.
However, I have noted the Minister’s remarks today, the explanatory note, the considerable delays that she has described to us, the cost overruns and the reliance on guidance—all of which is somewhat concerning. I hope that the Minister will address some questions.
Before I ask the Minister some direct questions, however, I will mention some of the valid points about the delays raised by key members of the pensions industry. Tom Selby, the head of retirement policy at AJ Bell, for example, described the delays as “hugely disappointing”. Others have described the whole dashboards project as one that has been
“beset by difficulties and delays from the get go.”
I hope the Minister will address those concerns and reassure me and colleagues across the House on the future progress of this important project.
I realise that the Minster has not been leading the project in its entirety herself; it has been a project supervised by several Ministers. I hope she will be able to update us on how she feels the delays will affect savers, how they will affect the wider pensions industry, which is a very important part of the financial services industry, and what measures she plans to use to ensure compliance.
The Minister talked about the reliance on guidance and the way that it will work, as opposed to the Government’s previous mandatory approach. Will she reassure us that she is confident about hitting the October 2026 deadline, because we have already seen significant slippage? This is a really important programme that means that pension savers can look at and understand their savings and plan for the future. That is very important at a time when there is a considerable body of evidence showing that people are not saving enough for their pensions, and that they may not know where their pension pots are. I hope the Minister can reassure me on those points.
David Linden (Glasgow East) (SNP)
It is a pleasure to serve under your chairmanship, Mr Robertson. I thank the Minister for her continued collegiate approach to this issue. As others have said, it is disappointing that we have had the delay, but there is no point in crying over spilled milk. What we need to do is ensure that we get it right.
The Work and Pensions Committee has been undertaking an inquiry into the plan for jobs and the thorny issue of why the over-55s have not come back to the workplace, and it strikes me that the pension dashboards will really important when people are making informed decisions about what they do in the latter part of their career. We all want to see it, but we want to see it delivered in such a way as is efficient and not besieged by technical problems.
The hon. Member for Reading East made reference to some of the stakeholders that have expressed concern. I will draw the Minister’s attention to the remarks of Dr Yvonne Braun of the Association of British Insurers, who said:
“Our members have indicated they’re willing and able to continue to comply with a voluntary timetable, although it would have been our preference that these remained a regulatory requirement to prevent a last-minute rush of firms connecting to the system. We ask that Government keeps this under review and considers making the staggered dates a regulatory requirement again if it should become clear that the wider industry is not taking the same approach.”
I think the Minister should bear that in mind.
While talking about this subject, it would be remiss of me not to say that pension dashboards work only if more and more people are opted in to pensions. The Minister knows fine well my views on auto-enrolment and how I would like it to go further. It would be churlish of me not to commend the hon. Member for Stoke-on-Trent North (Jonathan Gullis) on his private Member’s Bill, which goes some way to widening it. I think that we all look forward to a time when pension dashboards are in place, and most importantly people are making informed choices in terms of retirement.
One final plea to the Minister would be, once again, to look at things such as the Stronger Nudge to Pension Wise to ensure that people make decisions about retirement and later-life savings with as broad a picture as possible, and do not take decisions that will be, in the short term, financially disadvantageous.
Laura Trott
As ever, I am grateful for the constructive approach taken by all parties. To address some of the issues that were raised, as I said in my speech, using guidance will allow for extra flexibility. Under these regulations, the regulator will ensure that schemes have regard to the guidance. That is really important and a key part of what we are trying to do. If for whatever reason the schemes breach that significantly, we may have to come back and revisit it, but I do not anticipate that that will happen. The Pensions Regulator will keep that under review, but it is significant that the ABI said that it will comply anyway. From conversations that I have had with the industry, that is absolutely the intent, but as I said the regulator is on hand and will issue guidance to ensure compliance.
I am confident about the October 2026 deadline. Everything that we are trying to do is about putting that confidence in place and ensuring that we have a programme that is overseen by a joint delivery board from the DWP and by the Money and Pensions Service, that we have regular interactions, and that it is keeping to time and to the outline. That is part of what the reset programme is trying to do. Total costs have decreased during the standard assessment period. Transitional costs for industry have increased to reflect that some schemes may face additional costs ahead of the proposed changes, but that does not offset the overall decrease in total costs over the 10-year period, and the dashboards programme has run slightly under budget to date. From a cost-to-industry perspective, the overall benefits far outweigh the costs, and from a scheme perspective I am confident that it is keeping to its outline budget, although we will continue to keep that under review.
On the AE extension, I will not miss an opportunity to praise my hon. Friend the Member for Stoke-on-Trent North (Jonathan Gullis), who has done a fantastic job. Hopefully his Bill will go quickly through the other place, and I promise to get the consultation on the regulations out as quickly as I can, to ensure that we get it moving through. We need to evaluate the impact of Stronger Nudge so far, and then base any next steps on that.
I think that that covers everything, but Members are welcome to intervene if not. I commend the draft regulations to the Committee.
Question put and agreed to.
Draft African Development Fund (Multilateral Debt Relief Initiative) (Amendment) Order 2023
Draft African Development Bank (Sixteenth Replenishment of the African Development Fund) Order 2023
(1 year, 5 months ago)
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The Minister of State, Foreign, Commonwealth and Development Office (Mr Andrew Mitchell)
I beg to move,
That the Committee has considered the draft African Development Fund (Multilateral Debt Relief Initiative) (Amendment) Order 2023.
The Chair
With this it will be convenient to consider the draft African Development Bank (Sixteenth Replenishment of the African Development Fund) Order 2023.
Mr Mitchell
I believe that this is the first time we have served together in a Committee such as this, Mr Vickers, and it is an enormous pleasure. The Opposition spokesman, the hon. Member for Birmingham, Edgbaston, and I have served together on many occasions; it is a pleasure to see her in her seat as well.
The orders, which were laid before the House on 23 and 22 May, will permit the British Government to make financial contributions to the African Development Fund up to the stated values for the purpose of core replenishment of the fund and contribution to the multilateral debt relief initiative. The African Development Fund—ADF for short—is an arm of the African Development Bank Group, which is the largest development finance institution focused solely on Africa.
As the Committee will be aware, the bank is a major source of funding for economic, social and institutional development across the continent, providing concessional loans and grants to the 37 poorest and most vulnerable countries in Africa. It is 60% owned by African countries, 80% staffed by nationals of African countries, and highly trusted across the region. It promotes green and inclusive growth and supports development in five focus areas, from infrastructure to industrialisation, food supplies and quality of life.
The bank is an important partner for UK international development. By spreading opportunities in African countries, it helps make the UK more secure and more prosperous. That is why we have purchased additional shares to increase our shareholding in the bank from 1.7% to 1.8%. We are also providing the bank with guarantees to release $3 billion of additional climate finance across the continent. At the bank’s recent annual meeting in Sharm El Sheikh in Egypt, I launched projects in Senegal and Egypt, which are the first to be supported by the guarantees.
I turn now to the African Development Bank (Sixteenth Replenishment of the African Development Fund) Order 2023. The ADF is replenished by donors every three years. The 16th round of replenishment negotiations took place last year, with pledges made in December. The British Government pledged to provide £650 million to the ADF over three years, including £450 million to the core budget. The order allows for the provision of the core funding by the United Kingdom.
Forty per cent of our core pledge will be used to tackle climate change. We also pledged a further £200 million to the climate action window, which will be used entirely to help countries to adapt to climate change. Overall, that will represent a slight increase on our previous contribution and will make us the largest contributor to the 16th replenishment. That reflects our assessment that the ADF represents excellent value for money for British taxpayers.
For example, the African Development Fund is ranked second in the Centre for Global Development’s quality of official development assistance report. The total value of the 16th replenishment is $8.9 billion—up from $7.4 billion for the previous round. That is an act of global solidarity with the poorest African countries to help cushion them from a series of crises, including a food crisis driven by the impact of Russia’s illegal war and a climate crisis that is unleashing increasingly frequent and severe extreme weather on African countries, alongside the challenges of recovery from the pandemic.
The ADF works to respond to such crises with urgency and in a way that is tailored towards the needs of different communities. For example, to respond to the food crisis, the bank approved a $1.5 billion emergency food production facility last year, which supported 20 million African smallholders and farmers by providing them with certified seeds and access to fertilisers. This supported the production of 38 million tonnes of food and helped to avert a looming food crisis on the continent.
The UK Government used the replenishment negotiations to secure commitments from the bank that will advance a number of our development priorities. The bank made commitments to support African countries to develop long-term strategies to tackle climate change, empower women, strengthen food security, tackle fragility, improve debt management and mobilise private sector investment.
The 16th replenishment is expected to deliver new or improved electricity connections for more than 19 million people, advances in agriculture for more than 24 million people, new or improved access to water sanitation for more than 32 million people, access to transport for over 14 million people and it is also expected to create 2.4 million new jobs, including more than 1 million new jobs for women.
We also welcome the agreement by the bank’s governors in May to make changes to the ADF articles of agreement that will enable it to borrow from capital markets. The UK has been supportive of the bank taking this step for several years, which could release $25 billion of additional financing for ADF countries over the next 15 years. That is very much in the spirt of the Bridgetown initiative.
I turn now to the draft African Development Fund (Multilateral Debt Relief Initiative) (Amendment) Order 2023, which permits the British Government to provide an additional £56 million between 2023 and 2035 to support the ADF’s participation in the multilateral debt relief initiative, or MRDI. The UK Government played a leading role in establishing the MDRI in 2005 through their G8 presidency. The initiative enabled the African Development Bank and the World Bank to cancel debts owed by some of the poorest countries by committing donors to compensate them for losses. This order will enable the current Government to continue to make good on that commitment.
To conclude, the African Development Bank Group is one of our closest and most important partners. The financial contributions covered by the two orders are an important part of this country’s commitment to the poorest people in Africa. The orders will deliver UK international development and foreign policy objectives in some of the world’s poorest countries and bring opportunity to tens of millions of people. That is not just in their interests. It is also in the UK’s national interest, because greater opportunities in African countries reduce customers for people traffickers while creating more customers for UK exporters.
I commend the two orders to the Committee.
Preet Kaur Gill (Birmingham, Edgbaston) (Lab/Co-op)
I am grateful to the Minister for outlining the African Development Fund orders. We will not oppose them. I welcome the support they show for tackling poverty and food insecurity, creating new jobs and opportunities to meet the demands of Africa’s young and fast-growing population, and tackling the climate crisis.
Since 2019, Africa has been hammered by the converging crises of the pandemic, the climate crisis, debt, inflation and conflict. An estimated 55 million people on the continent have been pushed into extreme poverty since the onset of the pandemic. In 2021, nearly half a billion people in total were living on less than $1.90 a day. In that context, it is essential that we do what we can to prevent the current crisis from derailing long-term development gains.
Our financial support via the African Development Bank, with its significant financial clout, strong regional identity and deep knowledge, is one excellent means of doing that. Not only has Publish What You Fund ranked the African Development Bank’s sovereign lending as No.1 in transparency out of 50 global development institutions but the bank is also well aligned with the UK’s objectives and was green in its 2020 review.
While public-private infrastructure finance volumes in sub-Saharan Africa have stagnated over the past decade, the African Development Bank has punched above its weight, far outspending other multilateral development banks in support for infrastructure partnerships with the private sector in recent years and giving donors more bang for their buck. During the new funding cycle, the African Development Bank will focus on two strategic priorities: governance, capacity building and sustainable debt management in recipient countries; and developing sustainable, climate-resilient and quality infrastructure. As we heard from the Minister, it will also focus on empowering women and girls as a condition for achieving inclusive and sustainable development. Through those investments, the total replenishment will help to connect 20 million people to electricity, benefit 24 million people through agricultural improvements, provide access to water and sanitation for 32 million people and improve transport infrastructure for 15 million people.
The bank’s work over the next three years will complement long-standing investments in regional growth and infrastructure, offer a sustainable alternative to non-concessional Chinese lending and make headway on the long road to economic recovery from the pandemic and the worsening food security crisis, all of which are priorities that we support.
In that context, I must express some disappointment that we are again seeing a significant cut to UK financial support in this area; it is down nearly £200 million. The African Development Bank has done great work in the closely linked areas of climate adaptation and food insecurity in recent years. It has prioritised high-impact investments in water resource management and climate-smart agriculture, while also holding true to a model that puts countries in the driver’s seat of their own destinies. Will the Minister say whether we should take these funding cuts as proof of the former International Environment Minister’s comments on Friday? Do we have a Prime Minister who is “simply uninterested”, is it true that
“efforts on a wide range of domestic environmental issues have simply ground to a standstill”
and are the Government
“absent from key international fora”?
They are breaking their promises on international climate finance, hoping to leave a tab for the next Government to pick up.
The African Development Bank estimates that the continent needs $7 billion to $15 billion a year in adaptation finance to meet this accelerating challenge, yet ICF, international engagement and domestic commitments were conspicuous in their absence in Government announcements at the Paris summit. Can the Minister explain whether the Government remain committed to delivering the £11.6 billion in international climate finance that they promised in 2019? How and when will that be delivered? Will the Minister explain why the Prime Minister was absent from the summit while more than 100 world leaders were in attendance at a time when, by his own admission, there is growing anger at the international community’s failure to help the most vulnerable countries adapt to a climate crisis that they did not create?
Will the Minister say something specific about the absence of an announcement on the remaining half a billion special drawing rights that the United Kingdom promised but is yet to deliver? As he may well know, the African Development Bank has proposed an innovative new vehicle for the SDRs to be lent as hybrid capital. That would mean that every 100 million of SDRs recycled to the African Development Bank will be multiplied to increase loans to vulnerable African countries by up to 400 million. In effect, the African Development Bank proposes to leverage SDRs as capital to mobilise more lending funds so the SDRs are never spent; rather, they will be held as capital in the bank’s SDR account at the International Monetary Fund. Has the Minister looked at that proposal, and will he comment on it? Why has the delivery of the 100 billion SDRs promised at the G7 in Carbis Bay in 2021 been so achingly slow?
Finally, the previous replenishment round included an element of performance-based funding dependent on positive results reported at the mid-term review. Will he clarify how much was disbursed or held back at that point, and what support has the UK provided to the bank to recruit sufficient staff in key areas, such as environmental and social safeguards and fragile and conflict-affected states, in recent years? What efforts, if any, have the Government made to encourage closer working, better information flows and better-informed oversight between the bank and Government country teams?
On the sovereign debt crisis in many African countries, I must start by noting the incredibly positive news that, three years after its default, Zambia has finally agreed a deal for debt restructuring with straight creditors, including China. The £5 billion deal will provide crucial fiscal space for its Government to serve its people, 16% of whom live on less than a $1.90 a day, although billions owed to private lenders still needs to be tackled.
The situation is an ongoing illustration of the importance of the multilateral debt relief initiative agreed at the Gleneagles G8 summit 19 years ago. That was an outstanding example of what British leadership on the world stage can achieve and one of the proudest legacies of the last Labour Government. It has since had a transformative impact on many poor countries, freeing up their Governments to invest billions of pounds in public goods, such as health systems, climate action and education, that would have otherwise been spent servicing unsustainable debts. Will the Minister tell us how much debt the UK support has enabled the African Development Bank to cancel over the recent accounting period? What expectations does he have in relation to the orders? We welcome our latest contribution to the African Development Fund’s portion of the multilateral debt relief initiative, and will not divide the Committee on the order.
Many of the development gains that we have made in Africa in recent decades are currently at risk of reverse. We can, however, choose to forge a way to a more positive future with the expertise, influence and financial muscle of institutions such as the African Development Bank. For Labour, the power of co-operation is unmistakeable. We can choose to turn to each other when confronted with global crises, rather than turning inwards. We can choose to modernise our approach to international development. Learning from each other, we can and must address the world’s greatest challenges together.
Fiona Bruce (Congleton) (Con)
The Minister has described some excellent initiatives towards which the funds will be applied. I do not want him to think anything other than that I fully support the proposed measures, but there is a great deal of money being provided, which is, if I recall, UK taxpayer funds. Will the Minister clarify how the effective use and impact of those funds will be scrutinised and assessed, and by whom? What reports can we expect to receive and what will the processes be so that the public can have confidence that assessment and scrutiny will take place?
Mr Khalid Mahmood (Birmingham, Perry Barr) (Lab)
It is a pleasure to serve under your chairmanship, Mr Vickers. I concur with everything that my hon. Friend the Member for Birmingham, Edgbaston said. To follow on from the point that the hon. Member for Congleton has just made, it says in the explanatory note that:
“An impact assessment has not been produced for this instrument as no impact on the private or voluntary sectors is foreseen.”
I find that incredible.
There is a huge amount of money going in—although not as much as we wanted—and we want to see the good work that is being done. As the Minister said, it will have a huge effect, creating over 2.4 million jobs, and that will have an impact. Food security for the region will have a huge impact. Security for the electricity work that has been done, and many of the other points that the Minister mentioned, will have an impact. We should take account of that. Will the Minister look to see if an impact report could be produced, saying what difference the money we are putting in will make?
Mr Mitchell
I am extremely grateful to the Committee for its comments, and I will try to respond. The hon. Member for Birmingham, Edgbaston set out an analysis of the crisis that has struck Africa and the reasons for it. Across the Committee there will be complete agreement with her analysis, which was correct. She rightly pointed out that following a period from 1990 to 2020, under all three major parties, there was tremendous progress under British leadership particularly in the eradication of the extremes of poverty. There has probably been no period in human history when so much poverty alleviation has taken place so successfully. Of course, a lot of it was due to progress made in China and India. As she said, since 2020 those advances have been under threat due to the covid epidemic, the appalling aggression of Russia in Ukraine and the effect that that has had on inflation, standards of living and food flowing into Africa—in particular, to places of great shortage. We would all agree with that analysis.
The hon. Member for Birmingham, Edgbaston then made the point about Publish What You Fund and the high accolade that it has given to the work of the African Development Bank, which is, in part, the answer to the question of my near neighbour, the hon. Member for Birmingham, Perry Barr. There is a clearly a strong Birmingham-Sutton Coldfield element to this debate. The clear benefits were set out by Publish What You Fund.
On the level of funding, the ODA budget is immensely constrained. The hon. Member for Birmingham, Edgbaston and I both know that the budget could be spent many times over—and spent extremely well. The replenishment was for £650 million; we would have liked to have spent more, but we have to balance it with other funding. We have spent £1 billion supporting the global fund, which is outstandingly good expenditure. We settled on £650 million in this case, which is a little up from last time, when the figure was £633 million. I assure her that the money will be very well spent.
The hon. Lady referred to the letter written last week by my former colleague in the Foreign Office, Lord Goldsmith. Of course, I will not be drawn on any of that, except to say that those of us who know the Prime Minister well know that he is incredibly interested in the science and activity around climate change, and is very committed to that agenda. The hon. Lady asked about the Prime Minister’s attendance at the summit. It is true that he was not able to attend; he sent me instead, and I hope the Committee will accept that. I could only be a very poor reflection of him, but I did my best at the summit, and Britain was able to lead on the climate-resilient debt clauses, which will make such a difference to countries caught up in tragedy or crisis. Say disaster or covid struck the Government of Ghana, and that they really needed liquidity in order to help their people, and then had to pay off the capital and interest of loans. The climate-resilience debt clauses mean that they would get a two-year break to help them cope with the crisis. That is added on to the end of the loan. That is being done now by UK Export Finance, and it was the big British contribution to the summit; I think it will be powerful.
The hon. Lady asked me about SDR. We are engaged with the Treasury in a serious discussion on whether we can do more on SDRs. She is right in saying that the African Development Bank is a good potential vehicle for that. All I can say to her is that discussions are ongoing. Our colleagues in the Treasury are being very helpful, and we hope that the matter will move forward, though I point out that at the spring meetings of the IMF and the World Bank, my right hon. Friend the Chancellor of the Exchequer announced that Britain would use $5.3 billion of SDR through the two particularly important pro-poor IMF funds. That was the British announcement.
The hon. Lady asked me about accountability, and my hon. Friend the Member for Congleton raised the same point. The accountability of the African Development Bank is absolutely excellent. Our performance tranche was fully disbursed at the mid-term review. We do not have a performance tranche for this replenishment, but that reflects our experience, which is that the other controls are absolutely adequate to ensure value for money for the British taxpayer. The hon. Member for Birmingham, Edgbaston, will recall that—quite apart from our having officials who are based in Abidjan at the headquarters of the bank, and who regularly visit experts on all these matters—I am the British governor of the African Development Bank, and I can tell her and my hon. Friend the Member for Congleton that I keep a sharp eye on the interests of British taxpayers in this matter.
Finally, the hon. Member for Birmingham, Edgbaston mentioned the deal done on Zambian debt. I completely agree with what she said. Zambia has had to wait far too long for relief from those debts. Finally, the Chinese were persuaded to join in the international settlement. I had a WhatsApp message from the President of Zambia at the end of last week, thanking Britain so much for our engagement and assistance in the negotiations, which, as I say, went on for far too long. The African Development Fund is a vital source of finance and hope for the poorest and most vulnerable countries and people in Africa. I hope and trust that the Committee will support the orders.
Question put and agreed to.
Draft African Development Bank (Sixteenth Replenishment of the African Development Fund) Order 2023
Resolved,
That the Committee has considered the draft African Development Bank (Sixteenth Replenishment of the African Development Fund) Order 2023.—(Mr. Mitchell.)
Draft Electricity and Gas (Energy Company Obligation) Order 2023
(1 year, 5 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Andrew Bowie)
I beg to move,
That the Committee has considered the draft Electricity and Gas (Energy Company Obligation) Order 2023.
It is a pleasure to serve under your chairmanship this afternoon, Mr Dowd. The draft order was laid before the House on 24 May.
Since the energy company obligation scheme was introduced in 2013, it has ensured that about 2.4 million predominantly low-income households have received much-needed support to improve the energy efficiency of their home, with more than £19 billion-worth of savings for households over the lifetime of the measures installed. The Government committed, in the growth plan 2022 and the energy security plan, to placing a new obligation on energy suppliers to deliver vital energy efficiency upgrades, helping hundreds of thousands more households to take action to reduce their energy bills by making their homes cheaper to heat.
The draft order will deliver on those commitments by introducing a new energy company obligation, the Great British insulation scheme, to run until March 2026. Alongside that, it will introduce small additions to the existing ECO4 scheme, providing heating support for certain households that are not currently eligible for these measures.
I turn to the detail of the order. It will establish the Great British insulation scheme in law as a complement to the existing energy company obligation scheme, ECO4, in Great Britain. Its main provisions are an additional energy company obligation to run from 2023 to 2026, boosting previously planned energy efficiency investments by another £1 billion across this period; a focus on the rapid installation of the most cost-effective single insulation measures; and the extension of support through the ECO schemes to a much wider group of households living in the least energy-efficient homes in the lower council tax bands, which are also now challenged by higher energy bills.
The Great British insulation scheme will boost further the support already available through ECO4 that targets low-income and vulnerable households—those most at risk of being in fuel poverty. Energy suppliers must deliver at least 20% of the new help available through the scheme to those households. That low-income group will include those on means-tested benefits, as well as households in the least energy-efficient social housing. Fuel-poor homes in the private rented sector will benefit, too. That builds on the provisions of existing regulations.
Working alongside the low-income minimum, the scheme’s flexible eligibility provisions will offer additional routes to reach those who are on low incomes or in other ways vulnerable, such as through ill health, but where households may not be in receipt of benefits. The flexible eligibility provisions will enable local authorities, energy suppliers, Citizens Advice and the NHS to work together to help those most vulnerable to the effects of living in a cold home.
As with previous ECO schemes, the obligation will be set based on annual bill savings. That incentivises energy suppliers to target those homes where the savings from energy-efficient measures will be greatest; they will also be installing the measures that will have the greatest impact. The scoring approach for this will mirror the approach used for ECO4, minimising complexity and any bureaucracy for industry. Installation quality will be governed and assured under TrustMark’s compliance and certification framework. The quality of installations, alongside a whole assessment of the property, will continue to rely on independent industry standards: PAS—publicly available specification—2030 and PAS 2035.
The draft order will also add to the circumstances in which some heating measures, in particular solar PV and electric heating, can be available for households in the existing ECO4 scheme.
We estimate that as a direct result of the boost provided by the Great British insulation scheme, about 376,000 measures will be installed in around an additional 315,000 homes. That is expected to save households on average £300 to £400 per year.
To help to insulate as many homes as possible before next winter, the draft order will permit measures installed since 30 March to count towards the suppliers’ obligation target. This provision was signalled to energy suppliers in the Government response to their earlier consultation on scheme design; the response was published on that date. The Government consultation was conducted towards the end of 2022. The scheme design encapsulated in the draft order takes forward the main provisions set out in the consultation. The majority of consultation responses supported the proposals, including as central features the extension of energy efficiency help to the wider household group and a focus on the most cost-effective single insulation measures.
The Government are therefore proceeding with the main proposals, with some key changes considering the responses received and the final impact assessment. We have expanded the eligible council tax bands in Wales from bands A to C to bands A to E, better aligning with the proportion of eligible households in England and Scotland. We are requiring all measures to be installed with the PAS 2035 requirements, given the complexity of defining low-risk measures that could use any alternative standards. We have not implemented the proposal consulted on that suppliers must provide evidence that low-income households cannot meet the ECO4 scheme minimum requirements, to simplify administration.
We have ensured that households supported under the Great British insulation scheme will not be excluded from receiving future help under the ECO4 scheme where the eligibility criteria for that scheme are met. We will uplift scores on measures delivered to low-income rural off-grid households in Scotland and Wales, given the additional challenges that those households are likely to face. Equivalent households in England will be supported via the home upgrade grant. Recognising the value of innovation, those innovative products offering the greatest improvements and delivered to the low-income group will be eligible for both at 25% and 45% uplifts, subject to a cap.
The Great British insulation scheme will continue building on the successful ECO approach that has delivered energy efficiency measures to millions of households for the past decade. The scheme will extend help to hundreds of thousands more households previously ineligible for Government energy efficiency support. It will build momentum towards the Government’s ambition to reduce total UK energy demand by 15% from 2021 levels by 2030, and it is estimated that it will save more than 5 million tonnes of CO2 emissions from the lifetime of the measures installed. It will empower thousands more people to insulate their homes, protecting the pounds in their pocket and supporting jobs across the country. I commend the draft order to the Committee.
Dr Alan Whitehead (Southampton, Test) (Lab)
The draft order is, in general, an unexceptionable statutory instrument, as the Minister says. Essentially, it will extend what was provided for in ECO4 to a further group of people who would otherwise not be eligible for assistance under that scheme. The explanatory memorandum indicates that the extent of the total obligation—taking ECO4, ECO4+ and ECO4A together—will be increased from about £1 billion to £1.3 billion or £1.4 billion overall.
If I may reprise a debate that the Minister and I had in the recent Energy Bill proceedings, what we call something and what it legally is appear to be two different things to the Government these days. For the benefit of the Committee, my understanding is that ECO4+, ECO4A and the Great British insulation scheme are the same thing; they are just different names for one scheme. For the purposes of our discussion, I will call it ECO4A, the middle of the three definitions, which will reasonably clarify what we are talking about.
As I understand it, ECO4A extends the eligibility of a number of people for ECO in its present manifestation: a scheme that is running from now until 2026 and is, or has been, targeted at more vulnerable customers, particularly people receiving particular benefits. ECO4+ will continue with a general approach of targeting disadvantaged customers, but on a much wider scale than was previously the case. However, ECO4A will not change ECO’s rules on the eligibility of properties: a wider canvas of customers, but the same canvas of properties, will be eligible. That is where some of the big problems with ECO4 have manifested themselves so far.
There is certainly a general feeling in industry and elsewhere that ECO4 is beginning to fail. I understand that that is for two particular reasons. First, whether a property qualifies for assistance under either ECO4 or ECO4A is based on whether the measures can make a difference of two bands to the property. Most properties cannot achieve that very easily. A lot of work has gone into searching for properties and particularly for people who qualify for ECO4, but it has been found that the people qualify and the properties do not. Some 90% of found searches are proving impossible to proceed with under ECO. The high rate of aborted programmes adds an enormous cost to the companies that are seeking searches for people who can qualify for ECO4.
The second issue is the very substantial difference in the cost of materials, given interest rate increases and inflation, and the ability of the programmes to stay within the ECO cost parameters for the schemes. For example, loft insulation has proved 430% more expensive than the ECO4 and ECO4A methodology assumed. Cavity wall insulation is 372% more expensive, and external wall insulation is 147% more expensive. Companies are just not able to do the amount of work for the amount of money that the ECO4 costings assume. An obliged company is therefore not able easily to meet the obligation targets in the way the methodology for ECO4 assumes. The delivery of ECO4, in comparison with that of previous ECO iterations, is very seriously behind schedule.
What dismays me is that none of those problems has been recognised in the methodology for ECO4A. Indeed, as we can see from the draft order, that methodology is pretty substantially the same as that for ECO4, with the exception of one or two things about off-grid customers and various other matters.
My question to the Minister, at the end of all that, is what consideration he has given to changing the methodology for ECO4A so that it does not fall into the traps that ECO4 has already started to fall into. Perhaps ECO4 could be brought back into any new methodology, because the two schemes run in parallel up to 2026, and we could solve a number of the problems in implementation over the period.
I think I may know the answer. Informal sources tell me that a further SI might be on its way in the not-too-distant future and will seek to correct a number of those methodological problems as ECO4 goes forward. Is that the case? If something is indeed coming to correct the methodological problems, will the solutions apply to both ECO4 and ECO4A, bearing in mind that that has not happened today? If the answer to both those questions is yes, I will be fairly pleased. If the answer is, “I am not sure: maybe,” I think we need to look at that further.
Finally, if the Minister is looking at methodological issues, might he consider whether the issue of the eligibility of the number of homes—as opposed to people—for ECO4A could be substantially ameliorated with a methodology that puts the focus of ECO4A, and by implication ECO4, on reducing energy costs in homes, rather than heating costs only? A number of measures that seem evident to most of us are not actually allowed under the ECO4 methodology as a result of the distinction between heating and energy costs. For example, where a home needs to upgrade light fittings and wiring so that it can switch to LED lighting, that makes an enormous difference to energy costs, but it is not eligible under ECO4 because it is only about heating costs in-home. Perhaps when the Minister tables his new SI—if indeed he is going to—he will think about that, because it would be helpful in taking the progress of ECO4 and ECO4A in a positive direction.
Other than our disappointment in the lack of a new methodology to mend both ECO4 and ECO4A, the official Opposition have no objections to the draft order, because we need to make progress with energy efficiency as quickly as possible.
Alan Brown (Kilmarnock and Loudoun) (SNP)
It is a pleasure to serve under your chairmanship, Mr Dowd.
I welcome the draft order. The more money we can invest in energy efficiency, the better. How could I not be drawn in by a scheme that includes “Great British” as part of its title? It is so alluring. [Laughter.] But I do welcome the investment.
I have just a few questions for the Minister. Page 4 of the impact assessment states that, overall, the UK Government have a target to reduce energy consumption by 15% by 2030, compared with a 2021 baseline. How much will the draft order and these proposals for the installation of energy efficiency measures contribute to that 15% reduction target? What is the overall plan to get that 15% reduction by 2030?
The impact assessment also states that more than 100,000 additional homes will be helped to meet the target of being upgraded to achieve an energy performance certificate rating of band C. That is welcome, but to put it in context, it will still leave another 14 million or so homes to upgrade to EPC band C. What is the long-term target for getting those other 14 million homes upgraded to EPC band C, which is critical? That is the scale of the task that lies ahead.
The impact assessment further mentions a 20% uplift allowed for tackling rural properties in Scotland and Wales. What is the derivation of that 20% uplift? How realistic is the uplift as an allowance enabling rural homes in Scotland and Wales to fall under the scheme?
The whole thrust of the scheme seems to be based on cavity wall insulation as the main measure. Is that the right strategy overall, or does it mean that we are not tackling enough homes with other measures that could lift people out of fuel poverty? That is also critical. It is not just about reducing energy usage; it is about lifting people out of fuel poverty.
Further to the comments made by the hon. Member for Southampton, Test, I also want to highlight that the Government need to look at the roll-out of ECO4+, because it is quite clear that energy companies are saying that they are not getting the number of target properties to keep the scheme operational.
Andrew Bowie
I thank both my counterparts. Obviously they have not spent enough time locked in a Committee Room over the past six weeks, so they wanted to come back for some more today. It is a pleasure to be back with them both this afternoon.
Improving the energy efficiency of our homes is the best long-term solution to reduce energy bills and therefore to tackle fuel poverty. That is why the Government have set a new and ambitious target to reduce final energy demand from buildings and industry by 15% by 2030, and are committed to ensuring that homes are warmer and cheaper to heat by investing £12 billion in Help to Heat schemes such as the home upgrade grant and the social housing decarbonisation fund. The Government remain committed to helping low-income and vulnerable households to reduce their fuel bills and heat their homes. The Great British insulation scheme will be a crucial element of that help over this winter and for years to come.
The hon. Member for Kilmarnock and Loudoun asked why a smaller number of all properties are projected to be insulated and why we are not focusing on solid wall insulation. The scheme will focus on the most cost-effective insulation measures to ensure that as many households as possible can receive support. Solid wall insulation remains eligible for the scheme, but as it is a high-cost measure, it is more likely to require a consumer contribution.
The Government are absolutely determined to reach our energy efficiency ambitions by 2030. We need to balance the ambition of the scheme with the impact of consumer bills and the ability for existing supply chains to deliver measures quickly. This Government are taking action now, led by the energy efficiency taskforce, and building on what has already been achieved through more efficient use of energy in the UK.
Let me address the points raised by the hon. Member for Southampton, Test. Why is the number of homes estimated to be upgraded through the insulation scheme lower than was originally estimated? Compared with the modelling undertaken for the consultation stage impact assessment, the final modelling has incorporated higher-measure cost assumptions. These updated cost assumptions were informed by independent surveys of installers and have been the primary factor in causing the estimated number of homes treated through the scheme to fall.
I accept the hon. Gentleman’s statement that ECO4A, ECO4+ and the GBIS are the same scheme. He asked whether a minimum of two standard assessment procedure band improvements would be required, which might create problems for the insulation scheme. The GB insulation scheme has no minimum improvement requirement; it will target the most cost-effective single measures to make the biggest difference to the most energy-inefficient properties.
Should we support fully those who are on the lowest incomes and are the most vulnerable? We want to extend support to a broader pool of households who are currently ineligible for support through existing schemes but are also likely to be struggling to pay higher energy bills. At least 20% of the obligation will focus on low- income households, targeting those on means-tested benefits, living in the least efficient social housing or referred by a participating local authority or energy supplier and considered to be on a low income or vulnerable. The remainder will be open to households in the lower council tax bands: A to D in England and A to E in Scotland and Wales, equivalent to EPC rating D to G.
Has a comparative assessment been made of the cost assumptions for the ECO4 scheme and of those set out in the Great British insulation scheme consultation? We are monitoring ECO4 delivery against the current cost assumptions and will consider changes if necessary. However, changing the cost assumptions may require either a change to the overall energy bill reduction target, the estimated funding scheme policy details or a combination of all three. Such changes would require public consultation, and possibly regulatory change.
Dr Whitehead
I think the Minister has just indicated, in his very last sentence, that another SI may be on its way. If so, what is the timescale?
Andrew Bowie
I would not want to commit either to another SI being on its way or to a timescale for that happening. However, as the hon. Gentleman has just heard me say, any changes would require possible regulatory change. He can take from that what he will.
I thank the hon. Members for Southampton, Test and for Kilmarnock and Loudoun for their contributions and for the points that they made, and I thank everybody else for turning up today. I recognise that there is agreement that the scheme should continue at this time, providing critical support to a greater pool of households challenged by higher energy bills. Once again, I commend the draft order to the Committee.
Question put and agreed to.
Draft Business and Planning Act 2020 (Pavement Licences) (Coronavirus) (Amendment) Regulations 2023
(1 year, 5 months ago)
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The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Dehenna Davison)
I beg to move,
That the Committee has considered the draft Business and Planning Act 2020 (Pavement Licences) (Coronavirus) (Amendment) Regulations 2023.
It is a pleasure to serve under your chairmanship, Mr Hosie, for what I think is the first time since I took on this role. The draft regulations were laid before the House on Wednesday 7 June 2023, under section 23(6) of the Business and Planning Act 2020, for approval by resolution of each House. If approved and made, they will extend the temporary pavement licence provisions for a further 12 months, to 30 September 2024. They will come into effect on the day after they are made.
The temporary pavement licence provisions created a faster, cheaper and more streamlined consenting regime for the placement of removable furniture, including tables and chairs, on pavements outside premises such as cafés, bars, restaurants and pubs—great local institutions, I think we can all agree. Such businesses have found it easier to offer al fresco dining with outside seating—and with the weather we have been having of late, I think we all appreciate that. The decline of high streets is a well-worn tale that negatively impacts local economies. Therefore, I am sure that hon. Members will welcome this extra support for businesses, especially as we seek ways to transform town centres into vibrant places to live, work and visit.
Now is not the time to switch off our support to the hospitality sector, which was one of the hardest hit by covid-19. The end of the pandemic was not the end of the impact of the pandemic, with inflationary pressures persisting to this day. It is therefore crucial that we extend these provisions for 12 months to give businesses certainty and to avoid unnecessary confusion while we seek to make the provisions permanent through the Levelling-up and Regeneration Bill.
I will briefly remind hon. Members of what led to us this important debate. Part VIIA of the Highways Act 1980 sets out a permanent local authority licensing regime for the placement of furniture such as tables and chairs on the highway. The process involves a legal minimum of 28 days for consultation, which is problematic because many local authorities take much longer to determine applications. There is also no statutory cap on the fee that a local authority may charge.
Therefore, with effect from 22 July 2020, temporary pavement licence provisions were introduced under the Business and Planning Act 2020 to support the hospitality sector in response to the covid pandemic. The draft regulations use enabling powers in the Business and Planning Act 2020, which allow the Secretary of State to extend the temporary provisions, subject to parliamentary approval, if they consider it reasonable to do so to mitigate the effect of coronavirus.
I will turn briefly to the details of the draft regulations. Their sole purpose is to change the four references to the expiry date of the temporary pavement licence provisions in the legislation from 30 September 2023 to 30 September 2024. They do not change any other part of the temporary pavement licence provisions, so the process for applying for a licence during the extended period will not change.
Subject to the regulations being approved and made, businesses will be able to apply for a licence under the process set out in the pavement licence provisions in the Business and Planning Act 2020 for the extended period until 30 September 2024. The regulations do not automatically extend licences that have already been granted under the current provisions. Therefore, businesses will need to apply for a new licence if they wish to have one in place during the extended period.
Local authorities are encouraged by guidance to take a pragmatic approach in applying the relevant provisions, so that it is as convenient as possible for businesses to apply for a licence during the extended period. As the process for applying for a licence will remain unchanged, I will only briefly outline those steps. Licence applications are subject to a seven-day public consultation period starting the day after the application is made. A further seven-day determination period then follows, during which a local authority is expected to either grant a licence or reject the application.
If a local authority does not determine the application before the end of the determination period, the licence will automatically be deemed to have been granted in the form in which the application was made. A business can then place the proposed removable furniture, such as tables and chairs, within the area set out in the application for the proposed purposes.
Licence application fees will be set locally but capped at a maximum of £100. Those fees are unchanged from the licence application fees under the current temporary provisions in the Business and Planning Act 2020.
Shailesh Vara (North West Cambridgeshire) (Con)
I welcome the provisions put forward by the Minister. On fees, I urge her to ensure that local authorities do not get excited and start to see this as another way of earning revenue. I hope that, if there is pressure from local authorities to increase the fee from £100, the Minister and her officials will clamp down hard. Many of these businesses are still recovering from the pandemic, and the last thing they want is increased fees.
Dehenna Davison
I am grateful to my right hon. Friend. In developing the provisions, we have engaged extensively with the Local Government Association and a range of local authorities, and we have paid attention to the costs and resourcing for the applications. The rationale behind the extension of the temporary arrangement is to try to make it cheaper and easier for businesses to operate outside—that is our top priority in extending the provisions.
All licences will be subject to a national no-obstruction condition and a smoke-free seating condition, as well as any local conditions set by local authorities. It is important to note that the grant of a pavement licence covers only the placing of removable furniture on the highway. It does not negate the need to obtain approvals under other regulatory frameworks, such as alcohol licensing.
Once a licence is granted or deemed to be granted, the applicant will also benefit from deemed planning permission to use the highway land for anything done pursuant to the licence while the licence is valid. That could include using furniture to sell or serve food or drink supplied from a premises.
The draft regulations will enable food and drink hospitality businesses to continue to obtain a licence to place furniture on the highway outside their premises quickly and cheaply. I firmly believe that the regulations will provide essential economic support for many food and drink businesses. If the regulations are passed, we will publish an updated version of the pavement licence guidance for local authorities and businesses so that they are aware of the continued support on offer.
I must stress—it has to get serious sometimes—that if the draft regulations are not introduced, there is a real risk that the steps that food and drink hospitality businesses have taken to recover from the economic impact of the pandemic will be undermined. We are seeking to make this measure permanent through the Levelling-up and Regeneration Bill, and a failure to extend it would result in an unnecessary gap in service and a return to the process under the Highways Act 1980, which would be confusing and costly for businesses and local authorities alike.
I am sure that many of us have enjoyed al fresco dining at pubs, cafés and restaurants and can see the positive impact that it has had on customers and the vibrance of our brilliant high streets. Since introducing a simplified route to obtain a temporary pavement licence, we have heard many examples of local businesses being able to increase their outdoor capacity quickly and at low cost. I am sure that we can all think of examples in our own constituencies.
Nick Smith (Blaenau Gwent) (Lab)
Draft regulation 2 states:
“These Regulations extend to England and Wales.”
But the explanatory memorandum states:
“The territorial application of this instrument…is England.”
Will the practical introduction of the statutory instrument in Wales be left to the Welsh Government, or will the measure now be stopped in Wales?
Dehenna Davison
For fear of misleading the Committee, I will follow up on that point in writing immediately following this sitting, so that I can set it out firmly and clearly and based on the regulations more widely. I apologise for not having an answer immediately to hand.
I want to express my gratitude to local authorities for the huge effort they have made in this matter. Their hard work has enabled businesses to thrive, while building vibrant high streets, and it has led to the success of these measures.
The draft regulations will allow al fresco dining and drinking to remain a reality for businesses and provide much-needed continuity and certainty for another year while we seek to make these measures permanent through the Levelling-up and Regeneration Bill. I commend the draft regulations to the Committee.
Sarah Owen (Luton North) (Lab)
It is a pleasure to see you in the Chair, Mr Hosie. For me, it feels a little like groundhog day. This time last year I spoke on legislation to extend pavement licensing from 2022 to 2023, although in front of a different Minister—some might argue a lesser Minister. I hope for answers and some progress today.
We are yet again working on the basis of extending this legislation for just another year. We support this statutory instrument, but I lament the fact that the Government continue to think in the short term. They tinker around the edges of policy to make it stretch further, rather than put the work into long-term strategies to support high street businesses.
We all know from our local communities that businesses have not fully recovered from the pandemic; they have not had a chance. The Government’s mismanagement of the economy has sent fuel and food prices soaring, inflated interest rates and made mortgages, including for business properties, increasingly unaffordable. We do not plan to oppose the regulations, but there are improvements that the Minister could make, and I would be grateful to have her response on some of them.
There continue to be widespread job vacancies in hospitality—an industry that has traditionally relied on overseas workers and is now struggling to fill gaps. If media reports over the weekend are to be believed, Conservative Members are pressing for even stricter limitations on visas for foreign workers. Will the Minister please share with us whether any assessment has been done of the impact of those plans on the hospitality sector? How many more vacancies does she think it can sustain before closures become inevitable?
Small and medium-sized enterprises are still struggling with an outdated and punitive business rates system, while online giants grow fatter by avoiding paying their fair share of taxes. The lack of Government action on bringing in a digital sales tax is pushing more bricks-and-mortar businesses into bankruptcy as they struggle to compete. We will continue to fight that battle in our debates over the Non-Domestic Rating Bill, which is being examined thoroughly in the other place.
Enabling hospitality venues to operate outdoors for longer will certainly help boost custom, particularly in the summer months—although perhaps not this morning. Sector representatives, including UKHospitality, have emphasised the economic benefits to non-urban areas, which have previously not facilitated outdoor dining and are eager for this to be a permanent change in how hospitality businesses can operate. Will the Minister please tell us how much the extension to pavement licensing will offset the damage caused by covid and the Government’s economic mismanagement? Has any assessment been made of that at all? Ultimately, what is the point of these piecemeal bits of legislation, such as extending pavement licensing year after year, if there are fewer businesses and workers on the high street because the wholesale changes that are needed have not been made? However, that is what we have in front of us.
In previous years, charities advocating for people with sight loss have berated the Government for pushing through this well-meaning legislation without adequately consulting them. There are obvious dangers for people with sight loss, and often corresponding hearing loss, when the pavements they are familiar with become occupied and hazards arise. A-boards are a familiar problem that disabled groups are sick of having to raise again and again. I note that, once again, there is no impact assessment for the regulations.
Shailesh Vara
The hon. Lady said in opening that she welcomes the proposals, and she is now raising a legitimate concern relating to those who are partially sighted or not sighted at all. What would be her solution to that issue?
Sarah Owen
This hugely important issue has been raised time and again. One of the solutions is to have an equality impact assessment and to put it before Members today so we can actually take those decisions. There should also be a proper consultation. Last year, I was promised a consultation with the sight loss groups and charities, but we have not seen one. That solution is staring us in the face.
Shailesh Vara
The hon. Lady says that part of the solution is to seek an impact assessment, but what practical solution does she propose? An impact assessment would be a get-out clause to allow her to make the criticism but not provide an alternative solution—[Interruption.] I am simply asking. She raises a fair point, but what is her practical solution? She approves of this measure but seeks to criticise it in relation to access for those who are disabled. [Interruption.] This is not a laughing matter.
Sarah Owen
None of us is laughing about this, but one of us is ignoring the problem that those groups are raising. We all agree that there is a serious problem with A-boards and pavement licensing: the lack of consultation and information about the impact. The right hon. Member asked me what my solution would be, and I would want to see what impact the regulations have on people, particularly those who are disabled. Right now, we are not being given that information, so we are having to take this decision without the information in front of us. I would be able to make a much more informed decision if I had the information, but, surprisingly, for now, I am not in government.
Alun Cairns (Vale of Glamorgan) (Con)
Maybe the hon. Lady could help us by telling us why the Welsh Government have not pursued an impact assessment, because Labour is in government in Wales.
Sarah Owen
I think what I will do is check whether the Welsh Government have actually done this. I will be urging them to do the same, and I ask the right hon. Member to put the same pressure on Ministers in this Government.
Can the Minister assure me that greater care was taken this year to listen to stakeholder concerns and to make improvements accordingly? I think that that is something we all want to see. We all recognise that there are serious issues—particularly for people who are blind, partially sighted or disabled—when it comes to the use of A-boards and obstructions on our pavements. We are being asked to make a decision on the draft regulations without any information on whether a detailed consultation took place last year, as was promised, and on the equality impact assessment. That is the point of equality impact assessments: so that we can take knowledgeable, understanding decisions in this place. They are not a get-out clause; they are so that we know the true impact of the legislation on which we are voting.
On the unintended negative implications of the draft regulations, we have spoken before about the growing pressure on councils to provide more services with less funding, and local government is another sector suffering from staff vacancies. Extending pavement licensing will bring a benefit to the consumers using these businesses, as well as to the business owners themselves. However, we must also consider the burdens piled on councils in the administration of reviewing pavement licensing, monitoring adherence to these policies, maintaining and cleaning the areas involved, and other responsibilities. My hon. Friend the Member for Nottingham North (Alex Norris) effectively raised this issue in Committee during deliberations on the Levelling-up and Regeneration Bill last year, when he reminded the Minister that pavements and highways are public assets and that the public should get a share of the profits garnered by businesses, which take those profits into their private domain. I note that the Minister expressed her gratitude for the work that local authorities have done, particularly during covid, to keep businesses afloat, but can she provide me with an update on whether further consideration has been given to the proposal to allow councils to have more of a share of the financial rewards gained by businesses, which would allow precious revenue to be spent on residents when resources are so scarce?
As I said, we will not oppose the licensing extension, because something is better than nothing and any gesture of support for the businesses that make our high streets, town centres and tourism hubs so vibrant is most welcome. However, the glaring truth behind the smaller debates that have been had on the draft regulations is that, ultimately, these measures are another policy solution typical of this Government: they are a short-term sticking-plaster policy that hopes to tide us over before the election of a new Government who will really tackle the financial mess. This is the sort of strategy that will define this Prime Minister’s era. Businesses will not forget the trauma they went through during the pandemic, but if they were lucky enough to survive that and still exist today, they certainly will not forget the chaos since then.
The cost of living crisis has meant that every pound must be stretched further. Families are struggling to put food on the table at home, and we can be certain that they are limiting their spending on eating out even more. Measures such as this statutory instrument will provide a vital opportunity for businesses to reach customers outdoors, but until customers have more money in their pockets to enjoy what is on offer, the Government are just throwing scraps to a fragile, diminishing industry.
Dehenna Davison
There was me thinking that we had agreement and that it was going to be nice, chilled session today. On the first core point about the Government’s support for high streets, I need to put on the record some of the incredible support the Government put in place throughout the pandemic, and before and since. Let us talk about additional support on business rates, the furlough scheme, the future high streets fund, the towns fund, the levelling-up fund, the high street rental auctions that are coming into play soon to help with vacant units, the high streets taskforce, the roll-out of high-speed broadband—
Ms Marie Rimmer (St Helens South and Whiston) (Lab)
Would the Minister speak a little slower? I am profoundly deaf, and I am struggling to hear and make out what she is saying.
The Chair
That is all right, but it is entirely for the Minister to determine how she wishes to speak.
Dehenna Davison
I apologise for rambling, but I am so excited about the support that the Government have put in place for our high streets that I wanted to rattle off the list to reassure the Opposition that support for our high streets, and ensuring that they thrive into the future, are incredibly important. That is not to mention our devolution agenda, which providing more support, more funding and more local powers for local people to take control of their destinies—a Conservative approach to levelling up our high streets.
On the cost to businesses, which has been raised from the introduction of these provisions, we used the new burdens doctrine to ensure that councils would not be penalised for the monitoring, evaluation and enforcement of the measures. That is why the Government have reimbursed councils for the first year of the provisions. The sum came to just under £5 million, and that will continue as the measures are extended.
On the idea of taking a slice of business takings under these measures to pump back into local government, that seems to me exactly the opposite of what we should do when trying to support our incredible hospitality businesses. That is not something that the Government will support.
An important point was raised around accessibility, which we are taking incredibly seriously. We introduced the measures in response to a really difficult time for the hospitality industry. We received a number of representations from institutions such as the Royal National Institute of Blind People and the Guide Dogs for the Blind Association. Following the first year of the measures, we took those fully on board and introduced newer guidance. We consulted with the Disabled Persons Transport Advisory Committee, the RNIB and Guide Dogs so that the most up-to-date guidance ensured that local authorities knew their obligations, ensuring that the pavement licensing regime is fit for purpose, in terms of both supporting businesses to trade outside and people who have accessibility issues.
Sarah Owen
I thank the Minister for those points, but could we please have an assurance that when we are, inevitably, here again next year, we will have an equality impact assessment so that we can see the results of the consultation and what those charities and organisations are calling for?
Dehenna Davison
We will not be here next year, because the Levelling-up and Regeneration Bill will get Royal Assent to make the measures permanent.
Nick Smith
Paragraph 10 of the explanatory memorandum says:
“No formal consultation has taken place on this measure.”
The Minister said that there had been consultation in an earlier year with Guide Dogs and the RNIB. What did the RNIB ask the Government to do, and what have the Government done to support those organisations to help people to get around these obstacles on our pavements?
Dehenna Davison
I will certainly provide some more specific detail on that point, but the core point was ensuring that we update the guidance for local authorities, which we have done. As I said in my opening remarks, we will update the guidance further this year for the extension of the provisions.
Nick Smith
I am glad of that, but that is not what I asked, which was about what the RNIB asked for and what the Government then did.
Dehenna Davison
As I said, I will follow up on that specific point in writing. I do not want the fact that we have disagreements to take away from the fact that we agree on the extension of the measures and on supporting our hospitality industry in rolling out al fresco dining and other great things that we are all benefiting from in Britain. That is why I commend the draft regulations to the Committee.
Question put and agreed to.