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Kim Johnson (Liverpool, Riverside) (Lab)
The Secretary of State for Defence (Grant Shapps)
All export licence applications are assessed on a case-by-case basis against the strategic export licence criteria. This Government will not use any export licences to any destination where applications are not consistent with the criteria.
Kim Johnson
I thank the Secretary of State for that answer, but since the horrendous Hamas attacks on 7 October, 12,000 innocent Palestinian civilians have been killed; and two thirds were women and children. The UN Secretary-General has described Gaza as a “graveyard of children”. Today an Israeli airstrike on a United Nations Relief and Works Agency school has killed 12 people. The Indonesian hospital in Gaza is currently surrounded by Israeli Defence Forces tanks. Can the Minister confirm whether arms sold by the UK have been used in violations of international humanitarian law, and will he explain why arms sales to Israel have not yet been suspended?
Grant Shapps
The hon. Lady is right to describe as terrorism the horrendous and heinous attacks by Hamas, without which this would not have started. We call on all parties—the Israelis included—to ensure that they act within international humanitarian law. It will interest her to know that our defence exports to Israel are relatively small—just £42 million last year—and, as I mentioned in my initial answer, they go through a very strict criteria before anything is exported.
Neil O’Brien (Harborough) (Con)
The Secretary of State for Defence (Grant Shapps)
We are working with partners across the wider region, urging all sides to de-escalate tension, facilitate the supply of humanitarian aid, and tackle all forms of extremism.
Neil O’Brien
We are all absolutely heartbroken—[Interruption.]
Mr Speaker
Order. Members must sit down again once another Member is speaking. We cannot have two Members on their feet at the same time.
Neil O’Brien
We are all heartbroken by what is happening in the middle east. As Israel works to root out Hamas terrorists, will my right hon. Friend work to ensure that aid gets to civilians and that Israel works in a way that is compatible with international law? As the Government work to get hostages freed, will they also work for increasingly long humanitarian pauses that can build towards a just and lasting peace?
Grant Shapps
My hon. Friend is right about trying to do everything we can in the region. That is why I sent a Royal Navy task group to try to de-escalate tensions, including RFA Lyme Bay and RFA Argus. Those facilities, along with others, are doing everything they can to help lower the tensions and certainly act as deterrents, and to ensure that we can get aid into the region. He will be interested to hear that we have had 51 tonnes of aid delivered so far, and there will be another flight later this month.
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
There are thousands of orphans and displaced families amid an ongoing humanitarian catastrophe. What are the Government doing to ensure that unrestricted aid is reaching all the people who desperately need it, and, importantly, to ensure that Israel lifts the siege conditions?
Grant Shapps
As the hon. Lady will know, we are in favour of seeing pauses in the action. Some people, I know, call for a ceasefire, but I would point out that there was a ceasefire on 6 October; the problem is that it was broken by Hamas, who wrought this carnage on the middle east. We are doing everything possible to help get that aid in. With the Royal Navy taskforce, infantry, and other personnel in the region, we now have an uplift of about 600 personnel in the wider region, who are all helping to ensure that we get the aid in and across the border once we have got it to the region itself.
Mr Tobias Ellwood (Bournemouth East) (Con)
I welcome the Defence Secretary to his place. Behind Hamas, sits Iran; behind Iran, sits Russia; and, increasingly, behind Russia sits China. That is the geopolitical backdrop that will define the next decade, with growing authoritarianism impacting on our security and our economy. Is it now time to increase the defence budget to 3%?
Grant Shapps
My right hon. Friend will know that we have indeed pledged to increase defence spending to 2.5%, as economic conditions allow. This year, it will probably be around 2.4%, so we are making good progress. Prior to getting this role, I talked about my own desire to see higher defence spending, because we are living in a much less certain world, with many more variables. He is right to point out Iran’s action, with Hezbollah in Lebanon, Syrian militias in Iraq, and Houthis in Yemen very much driving the situation.
Andrew Gwynne (Denton and Reddish) (Lab)
The reality is that neither the long-term security of Israel nor justice for the Palestinians will be found through bombs and bullets. As an international community, we need to be doing all we can to move to an enduring cessation of the violence, but while we are doing that, can the Secretary of State say how the UK armed forces will be utilising their capacity to help those getting aid into Gaza to get much bigger quantities in than is happening at the moment?
Grant Shapps
The hon. Gentleman is absolutely right about the UK’s desire to do that, and I have talked about how we have deployed a large increase in personnel in the region to work with various Governments. I have personally spoken to most of the middle eastern Governments, and on those calls the first thing they have done is welcome our deterrent and the fact that we have brought such a large amount of aid—now £30 million—to help the Palestinians. It is not just the hostages themselves who are being held hostage; the population of Gaza are being held hostage by Hamas, and therefore the solution is to deal with Hamas themselves.
John Healey (Wentworth and Dearne) (Lab)
After nearly three months, it is very good to finally welcome the Defence Secretary to the Dispatch Box for the first time. He reflects the deep concern about the humanitarian catastrophe in Gaza and the risks of wider escalation. Labour totally condemns Hamas terrorism. We back Israel’s right to defend itself, but require it to meet its duties under international law and lift the siege conditions, and we want to see the breaks in fighting extended to get much more aid in and the hostages out. We back the military deployments to the region to support wider security, but with attacks against US personnel rising, what action is the Defence Secretary taking to increase protection for UK personnel in the middle east?
Grant Shapps
First, Mr Speaker, it is good to be at the Dispatch Box opposite the right hon. Gentleman. I thank him, as well as yourself and others, for their condolences when I was not able to attend the first Defence questions.
In terms of protecting our own personnel, I have asked the Chief of the Defence Staff to review their position. I made reference to the additional personnel who have moved to the region, but did not mention that several have been moved to Tel Aviv, Beirut and Jordan, all with the aim of protecting both British military personnel and British citizens in the region. We keep that matter under constant review.
John Healey
Would the Defence Secretary agree that over the past decade, there has been an international failure to pursue a Palestinian peace settlement and tackle the Hamas threat? Middle east escalation risks were not mentioned in the Government’s defence Command Paper update, nor were Hamas or Palestine. With threats increasing, is the Defence Secretary pursuing that defence plan in full, including further deep cuts to the British Army?
Grant Shapps
The right hon. Gentleman is right to say that nobody, including the Israelis, saw what Hamas were about to do coming. That points to the need for much greater surveillance, but also—much wider than that—the need to pursue the two-state solution, which is official British policy and is something that the world must do as this conflict, we hope, comes to an end.
The answer to the right hon. Gentleman’s question about being able to deploy British troops and, indeed, assets is that when I asked the question, the answer came back immediately: “Yes, we can do it, and there is more that we could do should we need to.” I am satisfied that we cut our cloth in order to react to events around the world, which of course came on top of what we are doing in Kosovo and elsewhere. We will certainly make sure that we maintain the resources to carry out those important missions.
Chris Elmore (Ogmore) (Lab)
Helen Morgan (North Shropshire) (LD)
The Minister for Defence Procurement (James Cartlidge)
Currently, 96.5% of the service family accommodation meets or exceeds the Government’s decent homes standard; only those properties should be allocated to service families. The Government continue to invest significant sums to improve the quality of UK service family accommodation. The Defence Infrastructure Organisation received an investment of £400 million over this financial year and the next as part of the defence Command Paper refresh, meaning that the forecast £380.2 million for this year is more than double last year’s investment in maintenance and improvements.
Chris Elmore
The Minister will be aware that this time last year, almost 5,000 homes of armed forces personnel were affected by black mould and damp, which obviously included many properties that had children in them. A year on, too many of our service personnel and their families still have this problem. No matter whether it is one house or 5,000 houses, can the Minister set out how he is going to tackle this problem quickly? Our armed forces personnel and their families deserve better than what they have been getting to date.
James Cartlidge
The hon. Gentleman asks an excellent question. We are aware that what happened last winter was not good enough. Too many homes were affected, particularly by damp and mould. That is why we have prioritised getting the investment in, and it has more than doubled in the current financial year. I am pleased to confirm to him that last week I set out our winter plan. It shows that 4,000 homes in the defence estate would benefit from significant work on damp and mould, which is about 60% of the total number that require that work.
Helen Morgan
A constituent of mine who lives in Clive barracks at Tern Hill in Shropshire has reported that he lives in rat-infested accommodation, sometimes with two to six soldiers living in the same room. As a result, shipping containers have been placed in the grounds—about 40 at the end of August—and kitted out like budget hotel accommodation for those soldiers to live in. Can the Minister provide any reassurance that these servicemen will be provided with somewhere appropriate to live in the near future?
James Cartlidge
I am obviously sorry to hear about that case. I would ask the hon. Member to write to me with the details, and I will look into it with the DIO. The key thing is that, wherever we are talking about—whichever specific barracks or base—if we are going to get on with the works, we need the money there, and we have got that. We have put in place the extra £400 million, and as I set out in the winter plan, thousands of forces personnel will now benefit from that work.
Mr Mark Francois (Rayleigh and Wickford) (Con)
The DIO is not fit for purpose, and the Future Defence Infrastructure Services accommodation contract has been a disaster, including completely unacceptable delays in issuing and checking gas and electricity safety certificates. No private landlord would get away with this without being sued. The Secretary of State had a good run out at the Defence Committee last week, and said he was potentially looking at radical reforms in this area. Can I urge the Minister and his boss to do precisely that to honour our service personnel and their families in a way they are not being honoured at present?
James Cartlidge
I am very grateful to my right hon. Friend. He knows that I share his passion for seeing genuine step change improvements in our accommodation. That is why we have announced the spending that we have. On the performance of the contractors, which the DIO ultimately oversees, one of the important aspects of the winter plan is a significant increase in staff manning the telephone service, so that we see better service to personnel. We expect the average waiting time for one of those calls to go from seven minutes to 29 seconds. It will be very important to service personnel that, when they make those calls, they get answered in good time.
Dame Caroline Dinenage (Gosport) (Con)
The Minister may be aware that earlier this year one of the accommodation blocks in HMS Collingwood in my Gosport constituency was shut down all together because it just simply was not fit for human habitation. There are also some issues with the accommodation blocks in HMS Sultan. Could I invite the Minister to come to Gosport to have a look at some of the accommodation on offer for our service personnel? It is simply not good enough, and they deserve better.
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
There is a new Defence Secretary, but it is the same old story in service accommodation, with reports of broken boilers, black mould, leaky roofs and painfully long waits for repairs. Last Christmas, one service family told me that they went without a working boiler for three weeks and were forced to live in a hotel over Christmas and new year. Can the Minister assure me that no one who serves our country in uniform will go without heating, or be forced out of their home this winter because of the dire state of their military accommodation?
James Cartlidge
I am grateful to the hon. Member, and I repeat the point: we recognise that performance was not good enough last winter, which is why the Secretary of State made it an absolute priority to get the extra investment in. Having done that, I am pleased to say that the winter plan does include boiler and heating upgrades for about 1,500 homes.
John Mc Nally (Falkirk) (SNP)
The Minister for Armed Forces (James Heappey)
Defence Ministers have close relationships with our US colleagues and discuss such issues on a case-by-case basis.
John Mc Nally
I thank the Minister for his answer. It is fast approaching the sixth anniversary of Captain Dean Sprouting being killed, in a road traffic accident in 2018 while on operational duties, by US servicemen. The US guardsmen did not adhere to any standard operation procedures or health and safety regulations, driving unsuitable and poorly maintained vehicles on an unnecessary journey. Captain Sprouting’s death was both avoidable and preventable, and it would not have occurred had the US servicemen involved adhered to the regulations. Despite the continuous efforts of his widow, Linda, for the Ministry of Defence to highlight the complicated jurisdictional procedures involved in blue-on-blue incidents, Linda and her boys continue to suffer the consequences on a daily basis. What I would like to ask the Minister is: given that the Defence Minister in the Lords—
Mr Speaker
Order. I think the Minister must have got the gist by now and be able to answer with something. [Interruption.] Just to help the hon. Member for Falkirk (John Mc Nally), I have to try to get through a list of what are meant to be questions. I gave him a long time to ask a question, and it was not forthcoming. If I do not do this, I will not get through the other people who wish to ask questions.
James Heappey
The hon. Gentleman raises a very complicated case and the widow, to whom I send my condolences, is obviously keen to see the matter resolved. I suggest that the hon. Gentleman and I meet to discuss the issue in appropriate detail.
Mr Speaker
I am happy to look at an Adjournment debate, if that helps, but we have to have short questions to get other people in.
Patricia Gibson (North Ayrshire and Arran) (SNP)
Selaine Saxby (North Devon) (Con)
The Minister for Defence People, Veterans and Service Families (Dr Andrew Murrison)
The Ministry of Defence delivers a range of services to veterans and their families, including the administration and payment of armed forces pensions and compensation, and tailored advice and assistance through the Veterans Welfare Service, Defence Transition Services and integrated personal commissioning for veterans.
Patricia Gibson
When veterans and their families are compensated for the detrimental impact their service has had on their lives, that is unjustly classed as income when applying for means-tested benefits, rendering veterans and their families ineligible for welfare support under UK Government control, the most significant of which is pension credit. As a result, thousands of veterans miss out on almost £6,000 every year. Will the Minister pledge his support for the Royal British Legion’s Credit their Service campaign? And will he work with the Department for Work and Pensions and his other Cabinet colleagues to ensure that compensation awarded to veterans is disregarded when applying for means-tested benefits?
Dr Murrison
Of course the MOD works with the DWP on a range of issues. Compensation is set in the full knowledge of how it will be dealt with under the benefits system in the UK. By most measures, the armed forces compensation scheme and the war pension scheme are felt to be sound and appropriate for awarding significant amounts of money to those who have served our country and who, unfortunately, have been disadvantaged as a result.
Selaine Saxby
Will my right hon. Friend join me in thanking The Veterans Charity in North Devon for their Poppies to Paddington operation, which saw 231 wreaths from the Great Western Railway region reach Paddington for Remembrance Day, and for their incredible work to help support our wonderful veterans across the UK?
Dr Murrison
I absolutely will, and I add my congratulations to my hon. Friend’s in thanking The Veterans Charity in North Devon. I also congratulate her on the extraordinary support she gives to our veterans in her constituency and elsewhere, particularly as we come out of the season of remembrance, which I know you were heavily involved with too, Mr Speaker. It is important to reflect on those who give so much in the service of our country.
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
Over the past year, the number of veterans claiming universal credit has increased by 31.6%, which is nearly a third. Does the Minister recognise that the King’s Speech failed to help veterans in receipt of universal credit to cope with the increased cost of living caused by his Government’s economic failure? And does he further recognise that some of the long-term sick who his party has been attacking in the media over the last few days are veterans with physical and mental health challenges? What advice has he given his colleagues about the Conservative party rhetoric, and about lending their full support to our veterans and all those who have served?
Dr Murrison
The hon. Gentleman will know that universal credit is an in-work benefit. Within the system, there are allowances that we offer to our veterans that can be improved. As he knows, that is why we have instituted the quinquennial review and the independent review of veterans’ welfare services, which we will be responding to shortly.
Neale Hanvey (Kirkcaldy and Cowdenbeath) (Alba)
The Minister for Defence Procurement (James Cartlidge)
The Ministry of Defence co-ordinates a range of interdependent programmes to support, maintain and renew the nuclear deterrent. The expected cost of the combined defence nuclear enterprise will be set out at supplementary estimates in February.
Neale Hanvey
The estimated costs of Trident’s renewal stand at the moment at £31 billion, with a further £10 billion earmarked for contingency. We know that containment of nuclear material is a problem for the Ministry of Defence, and we also know from recent reports that a Vanguard-class submarine nearly had a collision over the weekend. Our party put in a freedom of information request asking about transportation of nuclear material through Scotland, and that was rebuffed. The UK Government may be content to play second fiddle to the US on weapons of mass destruction, but can the Secretary of State explain the lack of transparency on WMD movement in Scotland, and justify Scotland’s being kept in the dark? Is it not time to abandon this costly and dangerous bomb and get it out of Scotland for good?
Mr Speaker
Order. Let us help each other to get through the list, please.
James Cartlidge
I profoundly disagree about this being the time to abandon the deterrent. I could not think of a worse time. The policy of the hon. Gentleman’s party is not just to abandon the deterrent but to withdraw from NATO. I could not think of a more reckless policy to undertake in the face of Russian aggression. We support the deterrent and we will continue to invest in it.
Sir Julian Lewis (New Forest East) (Con)
Does the Minister share my relief that both main parties in the House of Commons support the retention and renewal of the nuclear deterrent? Did he also share my relief that, in July 2016 when the vote was held on whether to renew the nuclear deterrent, there was a massive majority of 355 in favour of doing that? That sends a message to the Scottish nationalists about how unrepresentative their views are.
James Cartlidge
I am extremely grateful to my right hon. Friend for that remark. I was delighted that those on the Labour Front Bench showed their agreement by nodding when I gave my previous answer. I am delighted that there is consensus. I think we all agree that, particularly at this time, the country needs the security of a deterrent to deter what would be the most aggressive threats to our nation’s freedom.
Maria Eagle (Garston and Halewood) (Lab)
May I confirm again that Labour’s support for our nuclear deterrent, which we maintain on behalf of our NATO allies, is total? However, following reports in newspapers about a malfunctioning depth gauge on a Vanguard submarine at sea, can the Minister explain what steps he has taken to ensure that such an incident never happens again?
James Cartlidge
First, I am delighted to hear confirmation of Labour’s total support for the deterrent. That sends a very powerful message to our adversaries about our national endeavour to support the deterrent and its renewal. On the specific story that the hon. Lady mentions, she will not be surprised to hear that we do not comment on operational matters in respect of our submarines.
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
This one will break the convention.
Let me also welcome the Secretary of State to their position. The nuclear enterprise has an uncapped budget, and, after the demise of HS2, is the largest single public procurement project on these islands. For those of us on the SNP Benches at least, that is money spent on a weapons system that is designed never to be used, which not only bleeds money from the conventional MOD budget but sucks it from hospitals, schools and social care. On a day when the preview of the autumn statement in the Financial Times reads,
“Stagnation nation: governing the UK when ‘there is no money’”,
can the Minister advise the House what steps his Department is taking to ensure that there are no further cuts to conventional forces or elsewhere because of the uncapped, runaway Trident budget?
James Cartlidge
The hon. Gentleman talks about budget and cost. I can be open about the figure that matters: 80 million. That is the combined death toll in the first and second world wars. We have not had a third world war and we are profoundly lucky, and I put it to the House that it is not a coincidence.
Martin Docherty-Hughes
We know from the official history of the submarine service by Peter Hennessy and James Jinks that, during the transition to Vanguard, contingencies were made in Whitehall for the possible alteration of the continuous at-sea deterrent to take account of the complete breakdown of one or more hulls. This involved diving a Polaris submarine into Loch Long to remain there on a quick reaction alert. Can the Minister advise the House on what discussions his Department is having on the contingencies that we now see arising from an almost 40-year-old Vanguard fleet?
James Cartlidge
The hon. Gentleman, too, will not be surprised to hear that we will not comment on that, other than to say that we have had a continuous at-sea deterrent since 1969. We should all be proud of that, and I am delighted to see that Members on both sides of the House who support our Union also support the nuclear deterrent.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
Janet Daby (Lewisham East) (Lab)
The Secretary of State for Defence (Grant Shapps)
Defence assets continue to be ready to supply humanitarian support to the region. As the hon. Gentleman knows, the delivery of aid is impeded by the many challenges around Gaza, but so far we have airlifted 51 tonnes of aid to the country.
Mr Dhesi
As I have said previously, I want to see an end to the violence in the middle east, although I acknowledge that neither Israel nor Hamas agreed to an immediate ceasefire. While negotiations to deliver an enduring peace are ongoing, we must urgently accelerate the delivery of aid via the RAF to alleviate human suffering on the ground. Can the Secretary of State explain why, within two weeks of the earthquake in Turkey and Syria, nearly 100 tonnes of aid was delivered there, yet since the Israel-Hamas war broke out more than a month ago, only 50 tonnes has been delivered by the RAF?
Grant Shapps
I can. The difference is a war zone. When I said that we had delivered “to the country”, I meant, of course, to Egypt. From there we have to get the aid across the Rafah crossing, which, for all the reasons of complexity, is not always open or available. There are many restrictions to getting that aid in, but I am working very hard on that. The problem is not a lack of resource; we have put in £30 million, more than doubling the existing £27 million, and I can assure the hon. Gentleman that there are further flights leaving later this month.
Janet Daby
For more than a month we have witnessed a distressing humanitarian disaster unfolding in Gaza. It is welcome that the RAF is flying UK humanitarian aid to the region, but so far we have seen only three RAF flights. When will the Government increase the number of flights and the amount of aid given to Palestinians, who have suffered so much and who deserve, at the very least, the basic essentials to try to survive?
Grant Shapps
The issue is not getting the aid to the region; we could fly more aircraft. The issue is getting the aid into Gaza itself, and in that regard we have the problem of Hamas, a terrorist organisation not in the least bit interested in looking after the citizens of Gaza, and, of course, the problem of the Rafah crossing, which is opened and closed on a fairly arbitrary basis. However, I can assure the hon. Lady that we are working very hard with all the different bodies and Governments in the region to get more of that aid in as quickly as possible. The capacity constraint is not flying it to the region.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
The Minister for Armed Forces (James Heappey)
Some 13,000 eligible persons and their families are now in the UK under the ARAP scheme. We are determined to deliver on our commitments, with many hundreds more arrivals in the UK planned before the end of the year.
Dr Huq
In the light of Pakistan’s brutal crackdown on undocumented and temporary visa-bearing Afghan refugees and its forcible deportation of those people back to Afghanistan, can the Minister confirm the security of those eligible for the Afghan citizens resettlement and ARAP schemes in Pakistan, including many whose claims have been unprocessed for two years? Can he expedite those claims to stop people being thrown back into the clutches of the Taliban?
James Heappey
May I gently encourage Members on both sides of the House to change their tone when describing the Government of Pakistan in relation to these matters? We would not have brought out thousands of people had it not been for the support of the Government of Pakistan, and we continue to enjoy their support and co-operation in our efforts to bring out many thousands more. As the hon. Lady well knows, because it has been well covered in the media, the Government of Pakistan have sought to accelerate the deportation of those whom they consider to be there illegally, but our excellent team in the high commission in Islamabad are working day and night with the Government of Pakistan to ensure that that does not happen to those who are in Pakistan under ARAP and ACRS. We are moving at our best pace to bring people back, with the full co-operation of the Government of Pakistan.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
The Secretary of State for Defence (Grant Shapps)
We continue to support Ukraine—we provided £2.3 billion of military support in the last year—and will go on doing so, because Putin must not win in Ukraine.
Sir Bernard Jenkin
I thank my right hon. Friend for that answer and for the consistency of support the British Government have shown and the way they have led our NATO allies in support of the Ukrainians right from the start. How are we going to maintain that lead in the face of another war in the middle east, a certain amount of disarray in the Congress and indeed some visible wavering among our European allies?
Grant Shapps
My right hon. Friend is right that the UK has led, and we must continue to do so. I have visited Ukraine twice this year, I hosted a Ukrainian family for a year in my own home, and the Government have set up the British-led international fund for Ukraine, which is on its way to delivering, I think, nearly £800 million of support. We have also been first with tanks, with ammunition, with long-range missiles and with permissions, and we intend to be first with this war going forward.
Derek Twigg (Halton) (Lab)
It is vital that we continue to give military aid to Ukraine and to show our steadfast support and leadership in Europe. Has the Secretary of State had a chance, since he came into office, to meet with representatives of the defence industry to talk about how we maintain that level of military aid to Ukraine and, if he has had such a meeting, what was the outcome?
Grant Shapps
Yes, on several occasions, including in Kyiv and, more recently, last Thursday at the MOD, where I met with large, medium and small defence companies to discuss exactly that issue. There are a whole range of measures in place to increase the amount of arms, particularly arms replenishment, that can come through via UK companies. Having supported Ukraine from the beginning, we must support them all the way through to the end, and we intend to do so.
Andrew Jones (Harrogate and Knaresborough) (Con)
David Duguid (Banff and Buchan) (Con)
The Minister for Defence People, Veterans and Service Families (Dr Andrew Murrison)
In June 2023, the Ministry of Defence published the Haythornthwaite review of armed forces incentivisation. Multiple teams are being stood up across Defence to implement all 67 recommendations, working to establish a reward and incentivisation architecture that will attract and retain skills. Meanwhile, I am delighted to say that the Army has just been named the UK’s No. 1 employer of apprentices for the third consecutive year.
Andrew Jones
I am aware that the MOD is the biggest single employer of apprentices, with more than 15,000 soldiers currently on the programme, and I have seen the excellent training and development that takes place at the Army Foundation College, which, as my right hon. Friend knows, is located in Harrogate. Does he agree that the apprenticeship scheme is not only bringing in future talent, but ensuring that those individuals have the skills for the remainder of their lives?
Dr Murrison
My hon. Friend is absolutely right, and I enjoyed my relatively recent visit to Harrogate. More than 95% of all non-commissioned recruits across the armed forces are offered apprenticeships mapped to their training. As he rightly says, that benefits not only Defence but the individual and the wider economy.
David Duguid
Given that the defence of our United Kingdom is reserved and education and skills are devolved, what discussions is my right hon. Friend having with the devolved Administrations to ensure that the skills needed by our British armed forces are being developed across our whole United Kingdom?
Dr Murrison
The Ministry of Defence actively engages with the devolved Administrations to align education, skills and development, and will continue to do so, using the UK-wide pan-Defence skills framework, which ensures that the armed forces skills requirements are met across the country and contribute to the wider economy that we share.
Jim Shannon (Strangford) (DUP)
I thank the Minister for that response. Beyond the Battlefield, an independent charity in my constituency, does incredible work with veterans who are homeless, giving them accommodation and some skills. I have extended an invitation to the Minister to come to Northern Ireland to visit Beyond the Battlefield, so I will extend that again. I think he will be impressed—I know I am—and he will see that what we do in Northern Ireland can be done elsewhere in the United Kingdom.
Dr Murrison
It is always a joy to visit Strangford—one of the most beautiful places in these islands, if I may say so. I am grateful for the hon. Gentleman’s invitation; I have it at the front of my mind and when I am in Northern Ireland I will ensure that I visit.
Rob Butler (Aylesbury) (Con)
The Minister for Defence People, Veterans and Service Families (Dr Andrew Murrison)
We remain committed to maintaining the overall size of the armed forces and recognise the importance of recruitment to achieve that. We are responding to immediate challenges with a programme aimed at increasing the breath of potential candidates and driving efficiencies in recruitment. Meanwhile, the services continue to meet all their operational commitments, keeping the country and its interests safe.
Rob Butler
Since my election, I have met many new recruits during visits with the armed forces parliamentary scheme, and I have always been incredibly impressed by their sense of duty, their commitment to serve their country and their recognition of the great careers that lie before them, but we know that there are still shortages in recruitment. How can my right hon. Friend ensure that all parts of the armed forces recruit the right number of people, with the right mix of skills and experience to keep our nation safe in these increasingly dangerous times?
Dr Murrison
My hon. Friend is absolutely right that recruitment to the armed forces is mixed—some of it is good, some of it less good—across the western world. We are struggling to recruit people into our armed forces, and we must redouble our efforts. That is why we have had the Haythornthwaite review and the tri-service recruitment model, which I am convinced will plug the gaps that we have in skills and overall numbers.
Sarah Dyke (Somerton and Frome) (LD)
The Minister for Defence People, Veterans and Service Families (Dr Andrew Murrison)
There is no evidence—[Interruption.]
Mr Speaker
Order. Look, I do not need Members making signals to me on taking questions—it is quite obvious that I go from the Government side to the Opposition side.
Dr Murrison
There is no evidence that the operational MOD Guard Service employment contract has had a material bearing on workflow, recruitment and retention. However, it is not possible to conduct an accurate assessment of the impact that OMEC has had on applications from staff seeking promotion, because of the way applications are filed. That said, the MOD Guard Service is encouraged by the volume of applications received for vacancies through fair and open competition, no doubt encouraged by the fact that OMEC terms and conditions of service remain highly favourable when compared with private sector security companies.
Sarah Dyke
I thank the Minister for his response but, respectfully, I do not find it sufficient. My constituent has provided more than a decade’s service within the Ministry of Defence Guard Service. He reports that he and his contemporaries are disincentivised to apply for promotion, because it would mean switching to the new OMEC contracts from their legacy contracts and an extra six hours’ work a week. Many are leaving. Will the Minister promise to investigate this issue thoroughly?
Dr Murrison
I am grateful to the hon. Lady. The new way of working was passed through the trade union consultation process, of course, and in terms of pay, pension, leave and sickness benefits and working hours, the MOD Guard Service performs well, as I have said, against private security companies. That is why we appear to be recruiting and retaining well.
Richard Graham (Gloucester) (Con)
The Minister for Armed Forces (James Heappey)
The tempo of our engagements and operations in the Indo-Pacific grows all the time on land, sea and air. We are also strengthening regional resilience among our partners to uphold freedom of navigation, deter security threats and build support for international law throughout the Indo-Pacific.
Richard Graham
I agree that relationships with several south-east Asian states have reached new highs as a result of partnerships in areas such as space and cyber as well as air and maritime capabilities. Does my right hon. Friend agree that we should do more to ensure that the United Nations convention on the law of the sea is maintained in the South China sea, working closely with our partners in the region?
James Heappey
My hon. Friend hides his light under a bushel, because as a trade envoy in the region he will have had much to do with the improved relationships we enjoy there. Furthermore, HMS Spey transited the Straits of Malacca only this weekend, demonstrating the UK’s and the Royal Navy’s commitment to upholding freedom of navigation in the South China sea and around.
Mrs Emma Lewell-Buck (South Shields) (Lab)
Does the Minister believe the appointment of Lord Cameron as Foreign Secretary strengthens or weakens the Prime Minister’s stance that China poses an “epoch-defining challenge” to global security?
James Heappey
It greatly strengthens the Prime Minister’s position.
Chris Loder (West Dorset) (Con)
The Minister for Defence Procurement (James Cartlidge)
Helicopters form an important part of our integrated operating concept. Through past and current investment in rotary capability, the UK industrial base remains well placed to support existing and future helicopter platforms. Positive progress is being made towards the next stage of the competition with the three downselected suppliers: Airbus Helicopters UK, Leonardo Helicopters UK and Lockheed Martin UK.
Chris Loder
Can my hon. Friend confirm that the invitation to negotiate for the medium-sized helicopter will indeed be issued by the end of December?
James Cartlidge
I am grateful to my hon. Friend. We are keen to get on with this, and that is certainly our intention. At the moment, we are in the process of securing final cross-Government approval. As I said, that is our aim, but I cannot absolutely guarantee it.
Mr Rob Roberts (Delyn) (Ind)
The Minister for Defence Procurement (James Cartlidge)
The most recent estimate shows that MOD investment supports more than 200,000 jobs in industries across the UK, and continued investment in defence along with the changes we continue to make as part of our defence and security industrial strategy are contributing to further economic growth and prosperity across the Union.
Mr Roberts
I thank the Minister for his answer. As a Member from north-east Wales, I am interested in how we promote defence spending in all regions of the United Kingdom, meaning that there is some balance, with defence jobs and investment not concentrated in the same part of England every time. What can the Minister do to assure my constituents in Delyn that they will have as much opportunity as those in places such as the south-west of England?
James Cartlidge
My hon. Friend makes an excellent point. Obviously, we strongly want to see defence expenditure benefiting every part of the Union. I can confirm expenditure with industry in Wales amounting to about £744 million. Just to reassure him and show him how importantly we regard Wales, the week before last I heard I held my small and medium-sized enterprise forum in Cardiff at Space Forge, a brilliant Welsh SME that we are supporting with half a million pounds of funding to develop in-space manufacturing of semiconductors. That is a strong example of how we are supporting Welsh SMEs in the defence sector.
Richard Foord (Tiverton and Honiton) (LD)
The Minister for Armed Forces (James Heappey)
I thank the hon. Gentleman for raising the work of the slightly less glamorous part of the Royal Air Force that does long-distance surveillance missions. They are an important part of the UK’s defence strategy and our ability to monitor and observe what our adversaries are doing. Their work over the past year above the north Atlantic and the high north, the Baltic, the Black sea, the eastern Mediterranean and across the middle east has been central to defence operations. The team at RAF Waddington and at Lossiemouth should be congratulated.
Richard Foord
We understand that UK surveillance assets such as Rivet Joint are providing surveillance support to Israel. I appreciate that, for reasons of operational security, the Minister cannot comment on the operational specifics of this activity, but will he rule out the possibility that these platforms are being used to support target acquisition?
James Heappey
While I was grateful to the hon. Gentleman for his initial question, he also gives me an opportunity to make an important clarification. Rivet Joint is not flying in support of Israel; it is flying to observe the risk of escalation in the region, to inform decision making in the UK MOD, and for nothing else.
James Gray (North Wiltshire) (Con)
Is my right hon. Friend concerned about the volcanic activity in Iceland at the moment? The P-8 regularly uses Keflavik airport near Reykjavik. Could that be interrupted by the threatened volcanic activity?
James Heappey
To the relief of people everywhere hoping for a Christmas getaway, I am told that this particular volcanic ash is not the same as that of last time and thus does not pose such a threat to aviation. However, we are, of course, monitoring it carefully and have contingencies.
Jonathan Gullis (Stoke-on-Trent North) (Con)
The Secretary of State for Defence (Grant Shapps)
My first months as Defence Secretary have strengthened my long-held belief that we need to strengthen our national defence as the world grows ever-more dangerous. With the challenges in Ukraine, the middle east and the Indo-Pacific, these are more contested times than any since the cold war. The servicemen and women of our armed forces are our greatest asset. As has been mentioned, as we ask them to do extraordinarily difficult things around the world and they do deserve comfort back home. That is why I have put service accommodation at the forefront of my mission.
Jonathan Gullis
I thank the Secretary of State for his answer. Will he add his thanks to volunteers such as Trevor Simcock, Mal Mullet and Chris Smith, who work with the Commonwealth War Graves Commission locally in Stoke-on-Trent North, Kidsgrove and Talke? Ahead of the Armistice Weekend, I was proud to join them at Burslem cemetery with my daughter Amelia to clean the headstones of 130 of our brave and fallen heroes. Will he add his thanks and come to visit those great volunteers?
Grant Shapps
I am delighted to add my thanks to my hon. Friend’s brilliant volunteers. It is an opportunity to mention from the Dispatch Box the many thousands of people who turned out across the country on Remembrance Weekend to commemorate and remember those who bravely gave of themselves so that we can be here in freedom today.
John Healey (Wentworth and Dearne) (Lab)
The Defence Secretary said recently that, despite middle east tensions, we must not forget about Ukraine. I welcome that statement, but the UK’s leadership on support for Ukraine is flagging, so will Wednesday’s autumn statement, as a minimum, confirm the commitment to match this year’s £2.3 billion in military aid funding for next year?
Grant Shapps
I do not know when the right hon. Gentleman was last able to visit Kyiv himself, but when he does go, he will discover that the attitude there is that no country in the world has been more forward-leaning and progressive in its support, and that remains the same today as it was before this conflict began. We have trained 52,000 Ukrainian troops since 2014. Our support is not for today or tomorrow or the short term; it is forever.
Henry Smith (Crawley) (Con)
Grant Shapps
It is essential that we maintain our position, to be able to assist ourselves and the United States, in Diego Garcia.
Alistair Strathern (Mid Bedfordshire) (Lab)
The Minister for Defence Procurement (James Cartlidge)
I commend the hon. Gentleman for raising this important matter for his constituency, and I am pleased to work with him on what we offer his service personnel. I have said that last winter was not good enough, but this year we are ramping up massively. We have at times withheld profit from contractors where they have not performed, but what I want to see from them above all is delivery. We have put in place the £400 million and I now want to see that delivered as improvements to houses, including work being done on boilers and on damp and mould. Thousands of homes will be supported this winter and hopefully we will be in a far better position.
Andrew Jones (Harrogate and Knaresborough) (Con)
Grant Shapps
My hon. Friend is absolutely right about that. The way that we can start along that path is that Hamas could release the 242 innocent civilians that they are holding hostage, which includes some Brits. That would open the door to starting to be able to get a resolution. That is what they should do, but sadly, I doubt that they are about to.
Andrew Gwynne (Denton and Reddish) (Lab)
James Cartlidge
On all the key metrics there has been a significant improvement since the hon. Gentleman’s party was in office. If you were to ask, Mr Speaker, what the key test was for a procurement system, I would say it is wartime. Of course we are not ourselves directly at war, but in supporting Ukraine, we have seen excellence in procurement, particularly at Defence Equipment and Support, getting equipment—
Robert Courts (Witney) (Con)
May I take this opportunity to formally welcome the Secretary of State to his position? I am grateful for his comments on military accommodation being a priority for him. The Select Committee is undertaking an inquiry into that as well. One of the issues that has come up is the absence of a military uniformed accommodation officer who is responsible for continually inspecting accommodation and then liaising with the contractors to ensure that the repairs take place. Is that something my hon. Friend the Minister will consider?
James Cartlidge
I strongly congratulate my hon. Friend on becoming Chair of the Defence Committee and I look forward to working with him. I know that, predating his appointment, he had a strong interest in accommodation, and I enjoyed visiting his constituency to look at the accommodation for Brize Norton. I will consider his point and write to him.
Kirsten Oswald (East Renfrewshire) (SNP)
Grant Shapps
I want to make it absolutely clear that I think everyone working within the civil service as part of the Ministry of Defence and, indeed, working in the UK armed forces should feel able to be represented and be a part of it. I want to challenge the hon. Lady’s figures: the numbers I have for female representation between last year and this year are 10.4%, rising to 11.5%—it has actually gone up, not down—and civilian representation at SCS level stands at 45%. None the less, I accept the overall point that we need to see a far more balanced armed forces in the future.
Sarah Atherton (Wrexham) (Con)
Two years ago, the Defence Select Committee undertook an inquiry into the experiences of women in the armed forces. While progress has been made, the culture within defence remains unacceptable. We now understand that 60 female senior civil servants at the MOD have made allegations of sexual assault, harassment and abuse. Would my right hon. Friend like to comment?
The Minister for Defence People, Veterans and Service Families (Dr Andrew Murrison)
I am very grateful to my hon. Friend for her question, and I reiterate once again my thanks for all the hard work she has done on behalf of women in defence. She is quite right: it is unacceptable. Today, the permanent secretary has written to the Department with an action plan on how to deal with the specific issue my hon. Friend has raised, in particular asking our non-executive directors to conduct a review, so that we can ensure that what we are doing stands up to muster against the norms in other large organisations.
John Spellar (Warley) (Lab)
James Cartlidge
The right hon. Gentleman talks about the fleet solid support ships being built in foreign yards. I can assure him that recently, I had the great pleasure of visiting Harland & Wolff at its Appledore yard in north Devon. That is in the UK, and it is where a significant part of the FSS contract will be made.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
Rock Barracks in my constituency is home to the excellent 23 Parachute Regiment. I know the Government have invested a lot of money in new accommodation, but people are being let down. We know that Pinnacle is the problem, but it also worries me that people feel they cannot approach their MP directly because of retaliation if they make a complaint. I encourage the Minister to come and visit so that we can fix this problem properly.
James Cartlidge
I am alarmed to hear that. It is a pleasure to take a question from my right hon. Friend, who is my constituency neighbour; it is not far for me to travel, and I would be delighted to do so.
Helen Morgan (North Shropshire) (LD)
James Cartlidge
The hon. Lady asks a very good question. To be clear, the figure of 4,000 homes with damp and mould is for this winter: we have put in place £400 million of additional spending. Of course, as we move into next year, we will look at what further work can be undertaken so that we can deal with all the other properties.
Sir Edward Leigh (Gainsborough) (Con)
Will the Minister confirm that the Ministry would never put serving personnel at risk by putting an open camp for illegal migrants in a serving base, and therefore any undertaking about that is worthless—that the most we will get at RAF Catterick is a closed detention centre?
The Minister for Armed Forces (James Heappey)
I am well aware of my right hon. Friend’s concerns. I am happy to meet him and discuss them further.
Mr Kevan Jones (North Durham) (Lab)
James Cartlidge
The right hon. Gentleman is very knowledgeable on these matters, and I am more than happy for him to write to me about them. The Ajax contract is a firm price contract, and I am very pleased to say that we are getting very positive feedback from the Household Cavalry about that platform’s capability, its sensors and its cannon. I do not know the answer to the right hon. Gentleman’s specific question about payments to subcontractors, so he is more than welcome to write to me.
Jack Lopresti (Filton and Bradley Stoke) (Con)
Will my hon. Friend meet me to discuss a British company, Christy Aerospace and Technology, which has the capability to dramatically reduce the time it takes to train Ukrainian pilots on F-16s, and does he agree that we need to do everything we can to accelerate the rate at which we can get those pilots trained?
James Cartlidge
It is always a pleasure to meet my hon. Friend.
James Cartlidge
It is always a pleasure to meet my hon. Friend. He has been an absolute champion on the Ukraine issue, and I would be delighted to meet him to see what more we can do.
Ronnie Cowan (Inverclyde) (SNP)
Dr Murrison
I am disturbed to hear that the hon. Gentleman’s constituent has not received his medal, because they have been minted and distributed. If he would like to write to me with the details, I will chase it up.
Mark Logan (Bolton North East) (Con)
Local mosques in Bolton are collecting donations, yet there seem to be major problems in getting those donations and aid into Gaza. What discussions is the Department having with the Foreign, Commonwealth and Development Office and the Israeli Government about ensuring that those donations get to those most in need? Not doing so will only escalate the conflict.
Grant Shapps
As I have described, it is a complex position on the ground to get the aid all the way through, but I am happy to either meet or take details from my hon. Friend to ensure that those donations get where they are intended.
Tony Lloyd (Rochdale) (Lab)
Defence Ministers will be aware that the situation in Kosovo is deteriorating dramatically. Can the Secretary of State give us an assurance that the current international military presence there is sufficient to counter any threat from Belgrade?
Grant Shapps
When the Supreme Allied Commander Europe asked us for additional support for the Kosovo-Serbian border, the answer was immediately yes, that weekend, and we have a battalion there now, which is doing a great job. That has contributed to a lessening of tensions, and we are keeping a close eye on it in our conversations, to ensure that we do not see the situation erupt.
Dr Matthew Offord (Hendon) (Con)
This weekend we witnessed the third attack in a year on a commercial vessel in international waters. The cargo ship Galaxy Leader has been described by the Israeli Government as British owned and Japanese operated. What actions will the Minister take to prevent such acts of terrorism on British vessels?
James Heappey
We are very aware of the incident that my hon. Friend describes. The US navy has a presence in the Red sea, and the Royal Navy always keeps under review options to deploy there too.
Matt Rodda (Reading East) (Lab)
Gurkha soldiers who retired before 1997 receive a lower pension than other British soldiers. Will the Minister update the House on the current negotiations between the UK and the Government of Nepal to solve that difficult issue?
Dr Murrison
I am grateful to the hon. Gentleman, and I am seeing a bilateral committee with veterans and the Nepalese ambassador on Wednesday. This is an ongoing process. The hon. Gentleman will be aware that pension schemes are extremely complicated, and in many cases the Gurkha pension scheme and offer to transfer subsequently represents good value for many of our brave Gurkha veterans. I am certainly in discussion with the interested parties. I am afraid that I cannot offer any promises at all, but nevertheless discussions are ongoing.
Simon Jupp (East Devon) (Con)
The great south-west region is home to cutting-edge defence companies such as Supacat, which makes military vehicles for our armed forces. The Jackal 3 is an incredible vehicle that is being put to good use in Ukraine. What steps is my hon. Friend taking to ensure that more defence jobs come to the south-west?
James Cartlidge
It is brilliant to see south-west colleagues standing up for the defence sector in their constituencies, and my hon. Friend is right about Supacat—it is a brilliant platform. In February 2023 Supacat was awarded a £90 million contract by the MOD for 70 high-mobility truck vehicles, to be delivered by the end of the financial year, securing 100 jobs in the UK. Supacat already has two other direct contracts with the MOD for the Jackal military enhancement programme, which is valued at a total of £4.5 million.
Sir Chris Bryant (Rhondda) (Lab)
We must ensure that Putin does not win. We must co-operate and help with the reconstruction of Ukraine. Is it not time that we started seizing Russian state assets to help pay for the reconstruction of Ukraine?
Grant Shapps
A long time ago, when the war started, I was Transport Secretary. We seized quite a lot of yachts and aircraft, which have still not been released, to ensure that they did not benefit from their closeness to Putin. The hon. Gentleman is right that over time we must keep cranking up the different ways by which we ensure that money is not flowing to that regime, and we will continue to keep that under review.
Holly Mumby-Croft (Scunthorpe) (Con)
I believe that the ability to make virgin steel is crucial to the UK’s defence capabilities. Does my right hon. Friend the Secretary of State agree?
James Cartlidge
My hon. Friend makes an excellent point. She has been a long-running champion of the steel sector and its importance to her constituents. Of course, we want a smooth transition between blast furnace and electronic arc steel making technology. Steel remains incredibly important to the defence sector. Take the Type 26: almost 50% of that is British steel. That is 1,400 tonnes per ship. That underlines why it is so important that, in constituencies such as my hon. Friend’s, we continue to support the steel sector.
Dave Doogan (Angus) (SNP)
The Secretary of State and his predecessors rightly called out the wanton and unlawful destruction of civilian infrastructure in Ukraine—homes, hospitals and schools. Why can they not show equal uproar at what is happening to civilians in Gaza?
Grant Shapps
There is a principle in international law that a country can defend itself. Ukraine was attacked for absolutely no reason whatsoever. While we call on Israel, both privately and publicly, to protect civilians in whatever way it can, Hamas are using civilians as human shields, and deliberately using the infrastructure on top of them to hide behind. I would have thought that the hon. Gentleman could see the difference.
Sir Julian Lewis (New Forest East) (Con)
Does the Secretary of State agree that it is vital that his counterparts in the US Administration realise that if Putin does not lose in Ukraine, the peace and security of the whole of Europe is called into question, so it is in their short and medium-term interests to make sure that Putin is seen to fail?
Grant Shapps
My right hon. Friend is characteristically correct about this, but I would widen that point: we are talking about the security of not just Europe, but the Indo-Pacific, and indeed the entire world. Putin must not win.
Levelling Up
(5 months, 3 weeks ago)
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The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Jacob Young)
With permission, Mr Speaker, I would like to make a statement on levelling up. This Government are committed to levelling up and creating opportunities across all regions and nations of the UK. Last year, we set out our 12 levelling-up missions in the levelling-up White Paper, all principally aimed at tackling regional inequality, because we believe that people’s opportunities should be the same wherever they live, be it in a city or town, on an island, or in a rural or coastal community. I am proud to say that since 2019 this Conservative Government have committed over £13 billion of local growth funding to levelling up. Through the levelling-up fund, the town deal, the UK shared prosperity fund, the future high streets fund and much more, we are regenerating town centres and high streets, improving local transport, funding heritage assets and boosting productivity, jobs and living standards.
Our recently announced long-term plan for towns is providing long-term investment for 55 towns, and the money is to be spent on local people’s priorities. We have launched our investment zone programme: 12 investment zones across the UK will grow key industries of the future and increase jobs. That includes west Yorkshire’s investment zone, announced earlier today, which will focus on life sciences.
We have also made excellent progress on freeports. All freeports in England are now open for business, and we have announced a further four in Wales and Scotland. As levelling-up Minister, I have been lucky enough to see at first hand how we are using this transformative funding to unlock the potential of local economies and improve the everyday life of people across the UK. We recognise the good that this funding can do, so we have embarked on an ambitious plan to simplify the funding landscape for local authorities, led by my right hon. Friend the Secretary of State.
Our simplification plan describes how this Government will deliver our levelling-up White Paper’s commitment to streamlining funds in three phases of reform. First, there will be an immediate simplification of existing funds. Secondly, we will establish a funding simplification doctrine, by which central Government will abide. Finally, we will implement further reforms at the next spending review. We have already delivered much of the first phase. For instance, we have given local authorities greater freedom to adjust their town deal, future high street and levelling-up fund projects. We have also invited 10 local authorities to become part of the fund simplification pathfinder pilot, which will give them greater flexibility to move money between different funds. By increasing local flexibility, we will reduce bureaucracy and inefficiency within the delivery process.
The second phase of our funding simplification plan will see the Government launch a new funding simplification doctrine, which will change how central Government give funding to local authorities. It is clear that funding competitions can drive value for money and help identify the best projects for certain programmes, so we will continue to deploy competitions where they make sense, but we also recognise that bidding into multiple competitions, especially in parallel, can place a dispro- portionate burden on local authorities. The new Government doctrine will therefore ensure that we consider fully the impact on local authorities when designing new funds. Finally, we have committed to further reforms at the next spending review, including giving our trailblazer mayoral combined authorities in Greater Manchester and the west midlands single Department-style, multi-year settlements.
Of course, our work to give local authorities the right levers to spend funding efficiently is only one part of the picture; of equal importance is the funding itself. As I mentioned earlier, since 2019 we have made more than £13 billion available to local places. As part of that, across rounds 1 and 2 of the levelling-up fund we committed £3.8 billion to 216 projects across the country. We have listened to feedback from the first two rounds of the fund, and my right hon. Friend the Secretary of State announced in July that we would take a new approach to round 3. As a result, we decided not to run another competition for this round. Instead, we have drawn on the impressive pool of bids that we were not initially able to fund through round 2.
Today, I am delighted to confirm the allocations of the levelling-up fund’s third and final round. We are investing £1 billion in 55 projects across England, Scotland and Wales. Copies of the successful allocations have been made available in the Vote Office. The sheer number of high-quality bids is testament to the enthusiasm for levelling up across our country and the hard work of so many hon. Members in supporting their local areas to develop strong plans for renewal. From Chorley, Mr Speaker, to Elgin, and from Doncaster to Rhyl, these local infrastructure projects will restore pride in place and improve everyday life for local people.
We have targeted funding at the places most in need, as identified through our levelling-up needs metrics. We have also ensured a fair geographic spread across Great Britain, including £122 million across six projects in Scotland and £111 million across seven projects in Wales. That means that across all three rounds we have invested more than £1 billion in Scotland, Wales and Northern Ireland, exceeding our original funding commitments. It also means that across all three rounds of the fund, the north-east and the north-west will have received more per capita than any other region in England. They are followed closely by the east midlands and by Yorkshire and the Humber.
Our round 3 investments double down on two of our key levelling-up missions—pride in place and improving transport—but we also recognise the key role that culture plays in levelling up. We invested £1 billion on projects with a cultural component in rounds 1 and 2, and as part of this round we are setting aside a further £100 million for culture projects to be announced in due course.
We want to get delivery happening quickly. We will work closely with local authorities to confirm that their projects remain viable, and we will provide ongoing support to ensure that local places are able to deliver. We are committed to giving local areas the funding and power they need to deliver transformative change within their communities. We have committed more than £13 billion of local growth funding for communities the length and breadth of our country. We have invested in pride in place and reversed decades of decline. We are taking long-term decisions for a brighter future for our country. I commend this statement to the House.
Justin Madders (Ellesmere Port and Neston) (Lab)
I thank the Minister for advance sight of his statement. I start by congratulating all those areas that have been successful in their bids—including Chorley, Mr Speaker. Commiserations to all those areas that have missed out once again, although the truth is that even the areas that have won will find that this money is a drop in the ocean, compared with the £15 billion cut from local government funding since 2010. Only six weeks ago there were reports that councils face a £3.5 billion shortfall in their budgets for this year alone. How does today’s announcement help them face that existential threat?
At least the Government appear to have finally accepted that local authorities were forced to spend disproportionate sums in previous rounds to get bids prepared, although we appear to have lurched from one extreme to the other: this time, councils have not been involved in any dialogue on the bids and were possibly not even aware that their bids were being considered. Will the Minister tell us what discussions have taken place with local authorities before decisions were made? Given that the proposals are approaching being a couple of years old, what assurances will he give us that they still reflect local priorities?
The Government’s methodology notes say the Department capped bids for regeneration projects outside priority areas by local authority and region. Did any projects that met the Department’s threshold not get funded for that reason, and which ones were they?
Please do tell us what on earth is meant by a “funding simplification doctrine”—is it an elaborate way of saying sorry? Does it apply to all Government spending decisions, or just to this Department because it has so patently failed to get a grip on spending that it has to have its own doctrine? Is it being done to address the concerns of the National Audit Office and the Public Accounts Committee that billions of pounds are being wasted because the Department has engaged in a programme without any understanding of its impact? As the IPPR North said, levelling up has been a
“litany of missed deadlines, moving goalposts and dysfunction”
although, to be fair, it could have been talking about any Government project when it said that.
Does the Minister accept that the new approach announced today means that the concerns levelled against the Department are, in fact, valid? With this latest iteration, how does the Minister expect anyone to keep up with what this Government want when they flit around so much? The Prime Minister announced five new priorities this morning. Were the projects selected in line with those priorities, or will they all be changed again to reflect this week’s prime ministerial thinkin
Of course, where does this leave the hundreds of projects that still have not been successful? There was no mention of any future rounds in the statement; in fact, I think the Minister said that this was the final round of bidding, so where does that leave all the places that have been unsuccessful so far? What is the plan to address those communities that are crumbling and those high streets that are emptying? Is this the end of any hope of levelling up for them?
Even in those areas that have attracted funding, we know that these crumbs from the table are not enough to reverse 13 years of neglect. Streets that were once bursting with pride are shutting down, rents are rising, mortgages are soaring, and insecurity is still baked into the workplace. Tackling those things would be genuine levelling up, and Labour believes in giving those communities the power, resources and flexibility to tackle such issues in the way they think best. That is a true way of allowing people to take back control.
The statement offers no path ahead to deal with those issues; it just rearranges the deckchairs of what has gone before. We have been left with a failed experiment—an illusion that lasted as long as the press release. It has not gone unnoticed that the number of Conservative MPs standing down at the next election has gone past 50. They know that after 14 years of stagnation, they do not have a record to defend. They are not levelling up; they are giving up.
Jacob Young
The hon. Gentleman misjudged the mood of the House. He talks about local government finances. Last year, we gave local authorities an uplift of more than £5 billion. He asks whether any projects were axed by the methodology that we used—no, they were not. As I say, we set out the methodology online, and I will ensure that there is a copy in the House of Commons Library.
The hon. Gentleman asked what conversations there were with local authorities ahead of any announcement. We have area teams on the ground in all local authority areas, which confirmed with councils that projects were still a priority. They also confirmed with councils whether projects could still be delivered by the deadline. No projects were identified through those conversations that did not qualify this time around.
Further to that, the hon. Gentleman asked about funding simplification and why we are embarking on that. He mentioned the NAO’s concerns. Some of its concerns are legitimate, but we looked at its report and many of the figures dated from March. We have spent £1.5 billion on local places since March. We announced the funding simplification plan in July, in response to the commitment we made in the levelling-up White Paper to simplify the funding landscape.
Finally, the hon. Gentleman described £13 billion of levelling-up funding as “crumbs”. That says it all about the Labour party. It does not recognise the value of anything. We are investing £13 billion in local priorities, and Labour describes that as crumbs. I leave it to the House to determine what it thinks of that.
Anthony Mangnall (Totnes) (Con)
I am well accustomed in this place to rejection, and after rounds 1 and 2 of the levelling-up fund, it was disappointing not to see Brixham and Paignton recognised. However, I am delighted today to see that Brixham harbour and the EPIC centre in Torbay business park have been recognised with £20 million of support, which will make a huge difference. Can the Minister reassure me that that money will come in good time and good order, so that we have the ability to deliver as quickly as possible in our coastal communities?
Jacob Young
Absolutely. We are delighted to be funding high-tech fish and chips in Brixham. This announcement comes on top of additional funding pots that we have been able to give Torbay, including the levelling-up partnership, on which I am working well with my hon. Friends the Members for Totnes (Anthony Mangnall) and for Torbay (Kevin Foster). The funding will come in due course and we will work with local authorities to ensure that they can still deliver the projects on time and to plan.
Peter Grant (Glenrothes) (SNP)
Some Members may have an advantage on me in that they have seen the details of the allocation, which I have been handed just this second, so I will give a completely constituency-neutral response to the Minister’s statement.
However hard the Tories try to hide the truth, the fact is that these days, the word most people will apply before Britain is “broken”. Most people support genuine levelling up—who could argue with it?—but when the Prime Minister’s constituency got more than the whole of Glasgow last time around, and when most people think their high streets are getting worse rather than better, we have to ask what the real agenda is.
Will the Minister confirm how much of the money he boasts has been committed since 2019 has actually been spent? How does it compare to the overspend on HS2, for example?
The Scottish Government have decades of experience—Scottish Governments of various political persuasions, by the way—in successfully allocating EU funding, for example, in true partnership with local authorities. What discussions did the UK Government have with the Scottish Government, given their statutory role in culture and transport, and their role in pride in place, before he made today’s announcement? What discussions did they have with the Convention of Scottish Local Authorities to get a consensus view on what Scottish local authorities need? Or is this decision just being made by somebody in a ministerial office in Whitehall who is as out of touch with Scotland today as they will be out of office next year?
Jacob Young
The hon. Gentleman describes being out of touch with Scotland; he also mentions Glasgow. I should tell him that Glasgow has received £15 million in this round, so I suggest that it is he who is out of touch with Scotland. The Government have a responsibility to all people, businesses and communities across the whole United Kingdom across all three rounds of the funds. As I mentioned in my statement, we have invested £1 billion of levelling-up funding in local authorities in Scotland, Wales and Northern Ireland. The hon. Gentleman should consider his argument: it seems somewhat bizarre that he is frustrated at the funding that we are spending in Scotland. He should focus on what the cash is delivering, rather than on who is delivering it.
Jane Stevenson (Wolverhampton North East) (Con)
I am thrilled that the Department for Levelling Up, Housing and Communities has funded the green innovation corridor in my constituency. The Government have invested tens on tens of millions of pounds in Wolverhampton, which was desperately needed. However, speed of delivery is an issue. Will the Minister meet me to discuss how the council can be encouraged to deliver the projects quickly?
Jacob Young
I commit to meeting my hon. Friend to discuss that matter. She is a fantastic champion for her constituents in Wolverhampton, which is a key place where we are seeing levelling up in action, including the relocation of DLUHC’s offices to Wolverhampton. I am pleased that we have been able to fund my hon. Friend’s project in this round, and I am delighted to be working with her on it.
Mr Clive Betts (Sheffield South East) (Lab)
The Minister has said a lot about inputs, but what is important, in the end, is outputs and the changes that are made. Will the Minister say which indicators have shown a reduction in inequality between the south-east and the north since this funding began, and in particular whether the productivity gap has reduced at all?
Finally, I am surprised there is no mention of the trailblazer projects in Manchester and Birmingham and their roll-out to the other mayoral combined authorities. I understand that they will be rolled out but with reduced powers for the rest of the combined authorities. Will the Minister tell us exactly what the situation is? Please do not ask us to wait for Wednesday’s statement. I read about it in the Financial Times on Saturday, and if the Financial Times can be told on Saturday, I am sure this House can be told today.
Jacob Young
I am very grateful to the Chair of the Select Committee. As I said in my statement, across all three rounds of the fund, the north-east and the north-west have received more per capita than any other region in England. He asked about the specifics on productivity improvements and so on, and I will write to him and his Committee about that. Regarding the trailblazer deals, I have not read the piece in the Financial Times, but I will do so as soon as the statement is finished. I would encourage him to wait until Wednesday.
Steve Double (St Austell and Newquay) (Con)
The Mid Cornwall Metro is a levelling-up infrastructure project to upgrade railway connectivity across Cornwall. It will bring huge benefits both economically and socially. I was pleased to hear the Minister say that the Government are keen to get on with delivering the project. I ask him to use his offices to work with the Department for Transport, the Treasury and Cornwall Council to get the final business case over the line and the funding released, so that we can get on with the project.
Jacob Young
Absolutely. There are few greater champions for Cornwall in this House than my hon. Friend, and I shall work with him to ensure that the business case is signed off as soon as possible and that we are able to see levelling up in Cornwall. I am delighted that I will be visiting Cornwall in the very near future to sign a devolution deal.
Mr Kevan Jones (North Durham) (Lab)
I am not sure whether the Minister lives in some parallel universe, but he came to the Dispatch Box today to talk about the simplification of the process—a process that both he and the Secretary of State have been implementing—as though it is nothing to do with them.
County Durham had one successful bid in the first round, which happened to be in Bishop Auckland—surprise, surprise—the constituency of the former levelling-up Minister. In round 2, Durham County Council was asked to put in bids and spent hundreds of thousands of pounds of taxpayers’ money doing so. Once the bids were in, it was told that they would not be considered because it had had a successful one in round 1. Will the Minister compensate Durham County Council for the money it has wasted, not through its own inefficiency but because he seems to chip, chop and change the rules when he likes?
Jacob Young
The right hon. Member talks about the processes that are owned by my Department. As I said, we are embarking on this ambitious funding simplification agenda purely on the basis of some of the points that he has raised. Local authorities, Members of this House and the Select Committee were concerned about the number of competitions that were involved in various Government funds. We are addressing that through our funding simplification doctrine.
The right hon. Gentleman talks about Durham. I simply say to him that the international territorial level region for the Tees Valley in Durham has received eight projects across the rounds of the levelling-up fund. That equates to £128 per capita in the region, which is one of the highest amounts. I would ask him to welcome that.
Chris Green (Bolton West) (Con)
Bolton is opening its new £40 million Institute of Medical Sciences, which followed an earlier £50 million levelling-up fund investment. Will my hon. Friend confirm that the latest £20 million of funding for Bolton town centre, for which I am very grateful, is not the end of his commitment to the people of Bolton?
Jacob Young
It could not be the end of the levelling-up commitment in Bolton, because of the efforts of my hon. Friend, who works so hard for his constituents. I am delighted that Bolton is receiving money in this round, and I will work with him to ensure that levelling up continues in his part of the world.
Richard Foord (Tiverton and Honiton) (LD)
In his statement, the Minister referred to Scotland, Wales, Northern Ireland, the north-east, the north-west, the east midlands, and Yorkshire and the Humber. There was no mention of the south-west. How can this Conservative Government claim that they want to level up communities when Conservative-run Devon County Council cannot even level up the potholes?
Jacob Young
I am delighted to confirm for the hon. Member that the south-west region has received 20 projects across the rounds of the levelling-up fund to a total value of £409 million. That works out at about £71 per capita. I thank the hon. Member.
Dame Caroline Dinenage (Gosport) (Con)
May I warmly welcome the announcement of over £18 million to regenerate Gosport’s historic waterfront? It will drive jobs, attract visitors and drum up a huge amount of economic prosperity for the area, which has such a rich cultural heritage but has been overlooked for so long. This excellent bid was, of course, submitted under the previous Conservative-led administration. The council has since changed hands and it will be for the Liberal Democrat leadership to deliver on it. This is a Lib Dem leadership that has already paid back £1.3 million of brownfield land release funding to the Government because it was unable to spend it. What message does the Minister have for the council to ensure that the money is spent in a timely way to level up Gosport and drive prosperity for the region?
Jacob Young
I am delighted that Gosport was able to receive funding in this round. The funding in Gosport must be spent on the project priorities. The council is unable to reallocate that funding to some other random Lib Dem project that it has in mind; it has to deliver on the priorities that my hon. Friend mentioned. There is an adjustment process that local authorities can work on with my Department to ensure that challenges around inflation, for example, can be met. However, the project aims must still be met, and I shall work with my hon. Friend and her local authority to ensure that they are.
Tony Lloyd (Rochdale) (Lab)
Can the Minister confirm that Rochdale received no funding in this round, in either path? Can he also explain to my constituents why, even if we had a successful bid, which we would have welcomed, it would have been dwarfed by the cuts made to health, education and, of course, our local authority? Those are the things, ultimately, that are destroying the quality of life in my constituency.
Jacob Young
I would not accept the hon. Member’s synopsis. As I said earlier, we gave councils an uplift of £5 billion last year to meet priorities in their area. I cannot answer the hon. Member’s question today on Rochdale, but I shall write to him as soon as this statement is over.
David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)
I particularly welcome the £4.1 million for the Chambers Institute in Peebles, the £6.8 million for walks and cycleways in Clydesdale and the £13.8 million for transport in Dumfries and Galloway, but I pay particular tribute to the trustees of the Annan Harbour Action Group for its compelling bid, which secured £11.9 million to regenerate Annan Harbour. These are all essentially rural projects. Does my hon. Friend agree that rural areas across the United Kingdom must be at the core of levelling up?
Jacob Young
There is no greater champion for levelling up in rural areas than my right hon. Friend. I am delighted that we have been able to give Dumfries and Galloway a chunk of money in this round, and I am sure that he will work to ensure that his local authorities put it to good use. I am delighted to be working with him on doing just that.
Sir Chris Bryant (Rhondda) (Lab)
I confess that I am very disappointed by today’s announcement, because we have been trying to get some money for the Rhondda tunnel, which would be an enormous enhancement to the top end of the Rhondda Fawr. Successive Government Ministers have told me personally that we should apply under round 2, and then told the local authority that it could not apply under round two. I was then told personally that we should apply under round 3, and now it turns out that there is no such thing as a round 3, so we never had an opportunity to make a bid at all—of any kind whatsoever. I am hopeful that the Minister will now say that the Government are not closing the door on the Rhondda tunnel, and that there will be another chance for us to make an application to the Government for the £20 million that we need for one of the poorest areas in the country.
Jacob Young
I understand the hon. Member’s concerns. To be absolutely clear, I have not made any such commitments to him. Levelling up is an agenda that the Government are focused on; this is not the end of the road for levelling up, and I would be delighted to come to Rhondda, not least because Rhondda received money through round 1 of the levelling-up fund—a total of £3.6 million.
Philip Davies (Shipley) (Con)
The Minister knows full well how much Bingley has been neglected and let down by Labour-run Bradford Council, largely because I keep telling him about it. Bingley needs regeneration, and it particularly needs a new swimming pool, so can he tell me what the Government will do to help Bingley receive the swimming pool and the regeneration that it desperately needs? I am afraid that the people of Bingley cannot trust Bradford Council to deliver those for them.
Jacob Young
I understand the plight of the people of Bingley because, as my hon. Friend says, he raises it with me at every possible opportunity. I will work with him to see what funding streams are available to tackle the mess left behind by Labour-run Bradford Council, and to fund Bingley swimming pool.
Sammy Wilson (East Antrim) (DUP)
People in Northern Ireland will be angry tonight that not one penny of a fund that the Minister describes as creating opportunities across all regions and nations of the UK, and aimed at tackling regional inequality, is allocated to Northern Ireland. He gives the flimsy excuse that it is because the Northern Ireland Executive are not up and running. The Northern Ireland Executive did not have any input into the previous rounds, and would not have had any into this round. Of course, they would not even have needed to seek new allocations, because no new applications were needed. Is this not a case of blatant, pathetic, transparent economic blackmail to try to get the Assembly up and running again, without addressing the reasons why it fell, and of pouring the money into key Conservative marginal constituencies to bolster party support?
Jacob Young
I share the right hon. Gentleman’s frustration that we have been unable to fund projects in Northern Ireland this time around. As I indicated to him, that is because of a lack of an Executive in Northern Ireland. I assure him that we have set aside what Northern Ireland’s allocation would have been in this round, and I commit to working with him and his colleagues to ensure that Northern Ireland receives the full benefit of levelling up.
Mrs Heather Wheeler (South Derbyshire) (Con)
I thank my hon. Friend for his statement. I have lost my voice cheering for the £1.1 million for Swadlincote town. This is the first time in 50 years that Government money has been put into regenerating that area, which is the heart of South Derbyshire, and I thank him very much indeed. I have had a word with the chief executive of the new Labour council, and I will sit on the board that ensures we have spades in the ground. I thank the Minister very much.
Jacob Young
I am delighted to be able to give my hon. Friend’s constituency the funding this time around. She is an extremely efficient champion for the people of Derbyshire, and I am delighted that we have been able to fund the project.
Andrew Gwynne (Denton and Reddish) (Lab)
I can be one of this Government’s sharpest critics, often justifiably, but today I thank the Minister and his predecessor, the hon. Member for Bishop Auckland (Dehenna Davison), whom I harassed relentlessly since the round two bid for Denton was rejected. I am so pleased that today “Destination Denton”, the project that we put forward, will receive nearly £17 million. Given that I am the constituency Member of Parliament, and was involved in putting the bid together, what assurances can the Minister give me that I will be involved in ensuring that the project comes to fruition?
Jacob Young
I am grateful to the hon. Gentleman for his kind words. We expect local authorities to work with their Members of Parliament, who are key community stakeholders, in delivering the bids. A project adjustment request process is available to local authorities if projects need to be adjusted because of changes in inflation and so on; a key thing that I asked for is that Members of Parliament be consulted in that process, and I will ensure that the hon. Gentleman is consulted at all turns.
Richard Graham (Gloucester) (Con)
I congratulate the new Minister on the energy and purpose that he has brought to the vital task of levelling up the country, and particularly small cities and large towns, which were largely overlooked by the Labour Government during 13 years of focus on metropolitan cities. The £11 million award to the Greyfriars and Eastgate project in Gloucester will deliver a new shopping centre, indoor market and much more besides, as well as put a roof for the first time in 60 years on the beautiful 13th-century Greyfriars friary. That will make a huge difference, alongside the King’s Quarter projects that have already been funded by the local council and the Government. Does the Minister agree that if the shadow levelling-up Minister, the hon. Member for Ellesmere Port and Neston (Justin Madders), wants to see an example of giving up in this country, he is welcome to visit the car park bought by a previous Labour administration for £11 million and later sold for £1? That is why Gloucester, like the rest of the country, needs to keep regeneration in the right hands.
Jacob Young
Gloucester could not have a better champion than my hon. Friend; he is a fantastic champion for it. When I took on this job, one of my first conversations was with him about the urgent need for levelling-up funding in Gloucester. I am delighted that we have been able to fund his project this time around. As he said, it is important that we keep Gloucester in Conservative hands.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
My goodness, what a con this is. Earlier this year, we heard from the National Audit Office that of the £9.5 billion allocated in the first round, only £1 billion had been spent. Perhaps the Minister can say how much has been spent now. Is this not much like any other Tory slogan—meaningless in reality? Once again, there is nothing for Ross, Skye and Lochaber. We heard from the right hon. Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell) about the importance of rural areas, but there is nothing for the Portree harbour bid, which would have made such a difference.
I invite the Secretary of State and his ministerial team to my constituency. We will drive around and look at all the sites of the projects that were funded by the European Union—roads, bridges, harbours, sports facilities. That money would have come if we had stayed in the European Union, as Scotland voted to do. We are missing out on €750 billion that the EU was investing in regeneration, and once again we are getting nothing—zip—from this Tory Government.
Jacob Young
The right hon. Gentleman is wrong. I shall write to him following the statement on exactly how much UK shared prosperity funding his area has received, and I hope that when I do, he will come back to the Chamber to update the House on the facts of the matter. He asked how much money has been spent since the National Audit Office released the figures in March: £1.5 billion has been spent since then, but I would be delighted to come up and visit the humble crofter’s constituency.
Sir Edward Leigh (Gainsborough) (Con)
Pardon me for having an unfashionable Thatcherite point of view, but much better than Government, taxpayer-funded levelling up is private sector levelling up. Although I thank the Secretary of State for having released some money for Gainsborough, £300 million of private sector levelling up, namely for RAF Scampton, is at risk in my constituency. Will the Minister meet me after the court case to ensure that, whatever its result, we get on with levelling up? For instance, the roof of the officers’ mess alone will cost half a million pounds. The roofs of the hangars are decaying. The site will not be viable unless private sector investment is unleashed and the Home Office gets on with it.
Jacob Young
I would be delighted to meet my right hon. Friend, but one of the key ways to unlock private investment in the Greater Lincolnshire area is to progress with the devolution deal. I shall be delighted to meet him to discuss that further.
Grahame Morris (Easington) (Lab)
What consideration has the Minister given to the formation of development corporations to deliver specific projects? As he may be aware, I represent a Durham constituency that includes one of the poorest communities in the country. There has been a failure to leverage investment into the county, most notably in round 2 but also in round 3, and to resolve some very serious structural problems. I can identify lots of problems in the ABC streets in Easington, and the numbered streets in Horden and Peterlee town centre. We had two very successful development corporations. May I remind the Minister that Durham is run by a coalition of Conservatives, Lib Dems and independents that is failing to deliver?
Jacob Young
I hear the hon. Gentleman’s plea for more development corporations. We are obviously on an ambitious journey with the north-east to devolve further through the new mayoral North East Combined Authority. That will be a key way to help ensure levelling up in his part of the world.
Kevin Foster (Torbay) (Con)
It was welcome to hear the news about Torbay today—taking the total regeneration funding available up to £100 million, which will hopefully be matched by a similar amount coming in from the private sector. We are of course in the process of negotiating the levelling-up partnership, and some of the schemes in that are now being dealt with via the levelling-up fund. What implications are there for the levelling-up partnership and will there be an opportunity to re-look at other schemes that can now form part of it?
Jacob Young
I am grateful to my hon. Friend for highlighting just how much levelling-up investment Torbay is getting under this Conservative Government. We are working with the local authority, as he knows, on the levelling-up partnership, and with local Members of Parliament and key stakeholders. Projects have been addressed by this funding today, but we will look at other projects to fund through the levelling-up partnership.
Chris Elmore (Ogmore) (Lab)
It is deeply frustrating to hear the Minister say that round 3 was done by reviewing round 2 projects, which meant the Pencoed level crossing in my constituency was rejected again. That means my constituency has received zero levelling-up funding. There is a wider concern in local authorities across the UK that level 2 rounds, which may not start until the next financial year, will not have continuation of funding into 2026, because the Minister has said that this will potentially all end in 2025. Will he confirm that any project that starts next year from round 2 funding will be funded fully for completion of projects, even if it goes beyond the Minister’s confirmed funding for 2025?
Jacob Young
I will write to the hon. Gentleman on the specifics of his question. Without reading my notes, my understanding is that round 2 has to be spent by the end of March 2025, but I shall write to him to confirm after this session.
James Morris (Halesowen and Rowley Regis) (Con)
I welcome the Minister’s statement, and in particular the £20 million that is announced for Halesowen town centre. Halesowen has recovered well from the pandemic, not least because of the work of the local business improvement district. This further investment will be a secure investment in the future of Halesowen, and I very much welcome it today.
Jacob Young
I am delighted that Halesowen is receiving funding in this round of the levelling-up fund. My hon. Friend is a fantastic champion for his constituents in Halesowen and I look forward to working with him to ensure that the project is delivered as quickly as possible.
Stephen Farry (North Down) (Alliance)
Northern Ireland is missing out on this. It would be nice if we had a devolved Executive working with the Department, but that has not been the case in the past anyway, even whenever the Executive was sitting, so the Minister’s rationale simply does not stack up. Can he confirm that the money for Northern Ireland, which has been denied today, will be ringfenced, and what sort of timescale he envisages—including without a restored Executive—for spending that? Will there be a fresh round 3 in Northern Ireland, or will it too be a continuation of round 2?
Jacob Young
I do not believe it is accurate to say that Northern Ireland is not benefiting. As I have already outlined, we have spent £120 million across the levelling-up fund in Northern Ireland, and we will continue to work with Northern Ireland communities on the delivery of those projects. With regards to the hon. Gentleman’s other questions, I will be happy to write to him after this session but, as I say, the £30 million that would have been spent in this round has been set aside for levelling up in Northern Ireland.
Nick Fletcher (Don Valley) (Con)
I welcome the £18 million for Mexborough and Moorends in my home city of Doncaster, but it does mean that Edlington in my constituency has missed out again. My constituents are missing a leisure centre, a decent shopping high street and decent quality housing. This needs to be addressed, because unfortunately we have had decades and decades of neglect from the socialist Labour council, which I know is playing party politics. Will the Minister and the Secretary of State, who on his visit promised he would help fund this, meet me to find out what we can do for my constituents in Edlington? It is not fair that they have not at least got a leisure centre.
Jacob Young
I think both you, Madam Deputy Speaker, and my hon. Friend know how amazing a community Doncaster is. We want to do what we can to help level up in Doncaster, which is why we have been delighted to fund bids there in this round. I appreciate my hon. Friend’s concern that Edlington is not getting its swimming pool, and I shall meet him at the earliest possible opportunity to look at different ways that we could fund a pool in Edlington. I know that he is a fantastic champion for constituents in that community, and I will continue to work with him to do what we can to level up there.
Alex Sobel (Leeds North West) (Lab/Co-op)
I was here 10 months ago after the conclusion of round 2; none of Leeds—a city of 800,000 people in eight constituencies—was successful. Today, one bid was successful. What about the six constituencies in Leeds that have not received levelling-up money? We have five bids from round 2 that are on the table, and councillors and council officers have worked hard on them. What is their status? Is there going to be another round? Where can we go to deliver that project, including transport and employment land in my constituency, which would deliver thousands of jobs?
Jacob Young
As the hon. Member mentioned, we are funding Leeds in this round for the “Heart of Holbeck” scheme, with almost £16 million of funding. As I said in my statement, Leeds is also the beneficiary of a new investment zone announced earlier today. This Government have continued to focus on levelling up, and I will work with him to ensure that the benefits of that can be felt in Leeds and across West Yorkshire.
Bob Seely (Isle of Wight) (Con)
I am delighted that the Isle of Wight’s bid has been accepted, and I am grateful to the Minister for pushing it through. Our cycle group—CYCLEWight—has raised with me the condition of current cycle routes on the Island. As well as this funding delivering new routes—especially the west Wight cycle route, which is incredibly important—when we are reconfirming the bid, will we be able to tweak elements of it so that we can spend some of that money on improving and repairing the existing cycle routes, namely Sandown to Newport?
Jacob Young
I apologise to my hon. Friend that I am not able to give him that assurance today. We have an adjustment process where we work with local authorities to ensure that the projects that they have received funding for can still be delivered. If that is not the case, we will work with them to see what can be delivered through the bid. I am happy to work with my hon. Friend to do just that.
Jason McCartney (Colne Valley) (Con)
It is a really positive day for my beautiful part of West Yorkshire: £16.6 million for Huddersfield open market regeneration; and £48 million for the Penistone line rail upgrade, with stations in Honley and Brockholes in my constituency—and it continues through the patches of my hon. Friends the Members for Dewsbury (Mark Eastwood) and Penistone and Stocksbridge (Miriam Cates). Also today we have had the announcement of the West Yorkshire investment zone, which is anchored around the national health innovation campus at the University of Huddersfield. Will the Minister ensure that his excellent officials continue to work with the really hard-working officers at Kirklees Council, led by David Shepherd, to ensure that those transformative projects are delivered on time to the benefit of my communities?
Jacob Young
I am really pleased to hear a positive voice for West Yorkshire in this House and to see some of the investment that we are making in my hon. Friend’s community. I know how important the Penistone to Stocksbridge line upgrade was to him and to my hon. Friend the Member for Dewsbury (Mark Eastwood), and I am delighted that we have been able to fund it through this round. I will of course work with him to ensure that its benefits are felt right across West Yorkshire and that it is implemented as soon as possible.
Sarah Dyke (Somerton and Frome) (LD)
I thank the Minister for his statement. I am disappointed that that levelling-up fund bid submitted by Somerset Council for the much-needed regeneration works in the rural market towns of Frome and Wincanton has not been successful. In the Somerton and Langport area, we have been without a train station since the 1960s. The Langport Transport Group’s joint proposal with Somerset Council has not received an update to their bid to the restoring your railway fund since July 2022. Will the Minister provide an update and support me to bring much-needed rail connections to the area?
Jacob Young
I am responsible for many things, but not the restoring your railway fund; I ask the hon. Lady to contact the Department for Transport for assurances on that. However, I assure her that across the Dorset and Somerset region, we have been able to fund five projects to the tune of £87 million.
Douglas Ross (Moray) (Con)
I warmly welcome the UK Government confirming Moray’s levelling-up bid of over £18 million today. When the Minister wrote to me, he said project adjustments may need to take place. One reason that there may need to be an adjustment in Moray is because the announcement follows hot on the heels of Moray receiving £20 million in the towns fund just last month. Will he work with me and the excellent local council leader, Councillor Kathleen Robertson, to look at the proposals for Moray leisure centre? There is an opportunity to also unlock private sector investment, which would mean more resources coming to Moray for people across the region. Does he also agree that local SNP politicians who were very negative when we were not successful in round 2 will surely be extremely positive in welcoming this investment from the UK Government?
Jacob Young
I hope every politician is as positive about Moray and its future as my hon. Friend. It is fantastic that we are funding Moray’s bid today. As he said, it builds on its success with the long-term plan for towns. I am happy to work with him to ensure that the priorities of the local people in Moray are met through both funds. I will work with him and his excellent Conservative council leader to ensure that that happens.
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
The communities of Devonport and Stonehouse are some of the poorest in the country, so it felt like a punch in the gut when our round 2 bid was rejected. I thank the Minister for agreeing to the project in round 3. However, the bid we put together was delivered 10 months ago. Since then, Plymouth’s ambition has not stopped. We have part-funded elements and changed other parts. Will the Minister set out what the adjustments mean? For a community like Plymouth, which is trying to create more jobs and bring in private sector investment, how can the adjustment mechanism ensure that we get all the £19.9 million we bid for, and not just part of it, because our bid has changed, quite reasonably, because of inflation and other economic challenges and opportunities over the last year?
Jacob Young
I am delighted about the work we are doing in Plymouth to level up, whether that is the Plymouth freeport or the further investment we are giving Plymouth today. The hon. Gentleman asks specifically about the project adjustment request process. A local authority can amend its bid by up to 30%. The bid is £19.9 million, so it will have flexibility on about £6 million. If any adjustments need to be made to a project, his local authority should contact my officials as soon as possible. We will work with them to reprofile the funds and ensure that his constituents and people across Plymouth are able to benefit properly from the funding.
Holly Mumby-Croft (Scunthorpe) (Con)
I thank my hon. Friend for his work. As soon as I heard the good news, I was straight on the phone to our excellent council leader, Rob Waltham, duly confirming that we are absolutely positioned to bring these projects forward. I hope the Minister can find time to visit Scunthorpe and see some of the projects. I would be very happy to show him around and I know that the good people of Scunthorpe would give him a very warm welcome.
Jacob Young
I am very grateful to my hon. Friend. I have had many conversations with her council leader about devolution in Greater Lincolnshire. I look forward to visiting Scunthorpe very soon, hopefully with further good news on that front. I would be delighted to be shown around by my hon. Friend.
Mrs Emma Lewell-Buck (South Shields) (Lab)
Here’s a first: I would like to thank the Minister. At last, after over two years of waiting and at significant cost to our council, the Government have eventually granted South Shields a piecemeal sum of money. He also knows that, thanks to Tory economic failure, the cost of delivering our bid is now much higher. I have just heard his response to my hon. Friend the Member for Plymouth, Sutton and Devonport (Luke Pollard), but can he confirm whether it means that in South Shields we are getting more or less money now?
Jacob Young
I am delighted to be able to give the hon. Lady the good news for South Shields today, building on the future high streets fund, which I know she is aware of, in her constituency. The money we announced today for South Shields—£20 million—will be given to South Shields to spend on the bids it outlined. There will not be additional funding coming in on top of that, but the project adjustment request allows the council in her constituency to move money around within the bid to account for inflation and other things. I am delighted that we are able to be levelling up in South Shields, with £20 million today on top of the future high streets fund that we have already given to her constituency.
Mark Logan (Bolton North East) (Con)
Today is a very happy day for Bolton, with £20 million going to the Bolton town centre north regeneration project. That means that Bolton, across all its three constituencies held by both Tory and Labour MPs, has had almost £100 million since 2019. May I extend an invitation to the Minister to visit Bolton when he goes next door to Chorley, as part of his visit to the north? Today is a very happy day for levelling up. The shadow Minister, the hon. Member for Ellesmere Port and Neston (Justin Madders), of whom I am very fond, spoke about giving up, but I say that today is a day for us all to cheer up.
Jacob Young
I quite agree with my hon. Friend. He is a fantastic champion for his constituents in Bolton, and I am delighted that he has been able to get this funding for them today. I would be delighted to visit Bolton at the earliest opportunity to see him in action in his community.
Mike Kane (Wythenshawe and Sale East) (Lab)
The £20 million announced for Wythenshawe town centre today is testament to the hard-working leadership team at Manchester City Council. However, my personal thanks goes to Gavin Taylor from the Far East Consortium, who helped me kickstart this project just over two years ago. My thanks also go to the Minister. The money unlocks, with all the other things, the potential for 2,000 much-needed homes. Without sounding like Oliver Twist, may I ask the Minister to talk to his colleagues at the Department of Health and Social Care and request that they look again at the exciting plans at Wythenshawe Hospital just up the road, which could deliver an extra 1,000 homes on top?
Jacob Young
I am pleased that the hon. Gentleman has been successful. He is quite right to praise his council officials, because his bid was one of the highest scoring bids that we have been able to afford money to in this round. I am pleased to be able to grant it, and I am happy to work with him on how we can level up further in Wythenshawe and elsewhere across Manchester.
Peter Gibson (Darlington) (Con)
I welcome my hon. Friend’s statement, with the investment for Billingham in the Tees Valley and the extension to our freeports. However, Darlington narrowly missed out in rounds one, two and three of the levelling-up fund. The Minister, who is from the north-east himself, will be familiar with the phrase “shy bairns”. What advice can he give me in respect of the Darlington projects that still need funding?
Jacob Young
My hon. Friend is an amazing champion for Darlington. Without him, the great work that we are doing in levelling up in Darlington would not be happening. That includes: the investment that we are making into Darlington rail station; the investment that the Treasury has made, bringing new civil service jobs to Darlington; the buying back of Teesside airport by Tees Valley Mayor Ben Houchen; and the Darlington town deal. All those things are dependent on my hon. Friend, who is a fantastic champion for Darlington, and his former council leader, Councillor Jonathan Dulston, who has done an amazing job. I will continue to work with him and others to level up across the Tees Valley.
Michael Shanks (Rutherglen and Hamilton West) (Lab)
My first correspondence to the Government since being elected was to ask the Secretary of State to look again at the levelling-up bid for Shawfield in my constituency. I am delighted that, after only a month in this place, he has awarded £14 million to that project. It will be a challenge to keep that up, I suspect. This is a really important project, which not only unlocks huge investment in my constituency but clears up a toxic legacy where, in the 19th century, the world’s largest chemical factory once was. It will make a huge difference to my constituency.
The Minister has been asked a number of times to reflect on the costs for local authorities in coming up with these bids, and I do not think that we have had an answer yet. As part of his review, will he look at those significant costs? I know that organisations in my constituency such as Clyde Gateway and South Lanarkshire Council spent huge amounts of time, expertise and money pulling together bids, which they then thought were dead; now they realise that the project has a second chance. Will he think about the total costs involved and reimburse local authorities for them?
Jacob Young
I am grateful to the hon. Member for welcoming this funding. I am sure his letter to the Secretary of State had a key decision-making role in that. We are making capacity funding available within the Department to help local authorities where they come up against further challenges in the delivery of these projects. As he has rightly identified, these projects were submitted some time ago, so adjustments will need to be made. I cannot give refunds, unfortunately, but our funding simplification programme is all about ensuring that we step forward to a simpler version of funding that meets councils’ needs, rather than asking councils to meet the needs of various funding streams.
Matt Vickers (Stockton South) (Con)
I am delighted to see Billingham awarded £20 million of levelling-up money, which comes on the back of £16.5 million for Stockton, £20 million for Yarm and Eaglescliffe and £23.9 million for Thornaby. For years, Stockton’s Labour council said that it did not have the money to sort out the eyesore that is the Golden Eagle Hotel in Thornaby, but for three years it has had the Government money to sort it out and it has made no progress whatsoever. Does the Minister agree that it needs to pull its finger out, and will he meet me to see if there is any way we can make that happen?
Jacob Young
What an amazing champion for the people of Stockton my hon. Friend is. In Stockton, we are delivering towns funding in Thornaby, future high streets funding in Stockton High Street and levelling-up funding in Yarm and Eaglescliffe, and today we have confirmed levelling-up funding in Billingham. There is no place in this country that is receiving such love and attention from this Government, and it is thanks to the hard work of my hon. Friend, as well as people such as the Tees Valley Mayor, Ben Houchen, and local councillors in Stockton such as Councillor Niall Innes, who I know was particularly keen on seeing this bid delivered. I shall be happy to work with my hon. Friend to ensure that the Golden Eagle Hotel is sorted out as soon as possible and to deliver on his priorities through the town deal.
Hywel Williams (Arfon) (PC)
It would help the House to come to a judgment on the funding simplification plan and the funding simplification doctrine if we understood the complexity of the current system of assessments of need. Try as I might, and I have looked at the White Paper and various other documents, I cannot find a single concise explanation. Could the Minister write to me, and perhaps place a copy of his reply in the Library, to explain how the current system has got us to this position?
Jacob Young
I would be happy to do that, but we currently operate more than 70 different local growth funds across 17 different Departments. I think that demonstrates the complexity that local authorities and other stakeholders, community groups and so on must navigate to try to get cash for their area. That is why we are embarking on this funding simplification plan, and I am happy to work with him to ensure that it meets the needs of his constituents.
Dr James Davies (Vale of Clwyd) (Con)
Today’s announcement of nearly £20 million for the Vale of Clwyd through the levelling-up fund is fantastic news for redevelopment projects in Rhyl, Prestatyn, Denbigh and elsewhere, and I look forward to working with the local authority on that. By my calculation, Denbighshire is set to receive £63.7 million through local growth funds. Will my hon. Friend visit the area, as I think he hopes to do, and will he provide an update on levelling-up partnerships in Wales?
Jacob Young
On levelling-up partnerships in Wales, I would ask my hon. Friend to watch this space, but he is a fantastic champion for his constituents in Denbighshire. I visited Rhyl earlier this year for the wedding of another Member, but I would be delighted to visit again to see the work that my hon. Friend is doing and to see how we can ensure his constituents feel levelled up.
Jim Shannon (Strangford) (DUP)
I thank the Minister for his enthusiasm in his answers to questions. Ards and North Down Borough Council has a project about mining in Conlig, which goes back to the early 19th century; it also has the Somme centre, which commemorates and runs a programme about the first world war; and part of another project was to do something on the second world war. The Minister has kindly indicated that moneys that would have been going to Northern Ireland will be ringfenced or kept aside. Can he give me and other Members from Northern Ireland a direction for what we should do to ensure that the chief executive of Ards and North Down Borough Council, Stephen Reid, can pursue, and get the moneys for, this tourism project?
Jacob Young
I would be delighted to meet the hon. Gentleman to discuss the project further. I would say to him and his colleagues in Northern Ireland that the key thing is that the UK Government and, I think, everyone in this House want to see the Northern Ireland Executive restored. When they are restored, we can discuss how best to implement levelling up in his constituency and across Northern Ireland.
Scott Benton (Blackpool South) (Ind)
I thank the Minister for the further funding award for Blackpool, meaning that we have now received well over £400 million of additional Government investment since 2019. The Minister will be aware of the partnership work between Blackpool Council and his Department to deliver a levelling-up project in Revoe and Bond Street in my constituency. Is he able to meet me to see how we can get this project over the line and delivered for those communities?
Jacob Young
I am delighted to confirm that more than £15 million of investment is coming into Blackpool from round 3 of the levelling-up fund, announced today. That builds on the other investments we are making in Blackpool, which my hon. Friend mentioned. I will work with him on the projects he has outlined, to see what can be done to ensure they are delivered in a timely manner.
Mark Eastwood (Dewsbury) (Con)
I echo my hon. Friend the Member for Colne Valley (Jason McCartney), who said that today is a positive day. Like him, I thank David Shepherd of Kirklees Council.
After campaigning for an upgrade since 2018, the £48 million for the Penistone line is fantastic news for me and my constituents. This is on top of the £44.8 million secured for Dewsbury town centre and the £318,000 for Shelley football club. Will my hon. Friend agree to come to visit the Penistone line user groups, the Dewsbury town board and the team at Shelley FC to celebrate these amazing levelling-up successes?
Jacob Young
What an amazing champion for the people of Dewsbury— I am not sure that any Member of Parliament for Dewsbury has ever delivered as much investment as my hon. Friend. I would be delighted to visit his constituency to see some of those projects, and I will do so as soon as I am available.
Mr Rob Roberts (Delyn) (Ind)
Greenfield, around which the Delyn constituency bid was structured, is in the top 10% of areas of deprivation in Wales. As the constituency bid has again been unsuccessful, making a total of seven unsuccessful bids across both Delyn and Alyn and Deeside, which together make up my county council area of Flintshire, can the Minister explain to the people of Greenfield and Flintshire why, just like the Welsh Government, the UK Government do not seem to care about their future prosperity? If they do, will he at least take this opportunity to approve the joint Flintshire and Wrexham investment zone bid?
Jacob Young
As I said in my statement, we have delivered more than £1 billion of funding in Wales, Scotland and Northern Ireland across all three rounds of the levelling-up fund. I am disappointed to hear my hon. Friend’s question, as he knows all too well that this Conservative Government care about the people of Wales. Proceedings Time for conclusion of proceedings New Clauses and new Schedules relating to, and amendments to, Part 1 Three hours before the moment of interruption Remaining proceedings on Consideration One hour before the moment of interruption
Digital Markets, Competition and Consumers Bill: Programme (No. 2)
Motion made, and Question put forthwith (Standing Order No. 83A(9)),
That the Order of 17 May 2023 in the last session of Parliament (Digital Markets, Competition and Consumers Bill: Programme) be varied as follows:
(1) Paragraphs (4) and (5) of the Order shall be omitted.
(2) Proceedings on Consideration and Third Reading shall be taken in one day in accordance with the following provisions of this Order.
(3) Proceedings on Consideration—
(a) shall be taken in the order shown in the first column of the following Table, and
(b) shall (so far as not previously concluded) be brought to a conclusion at the times specified in the second column of the Table.
(4) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption.—(Mr Gagan Mohindra.)
Digital Markets, Competition and Consumers Bill
Monday 20th November 2023
(5 months, 3 weeks ago)
Commons ChamberRead Full debate Digital Markets, Competition and Consumers Bill 2022-23 View all Digital Markets, Competition and Consumers Bill 2022-23 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 20 November 2023 - (20 Nov 2023)
18:35 - The House divided: - Ayes: 196 / Noes: 275 - Question accordingly negatived.
18:49 - The House divided: - Ayes: 197 / Noes: 278 - Question accordingly negatived.
20:56 - The House divided: - Ayes: 210 / Noes: 280 - Question accordingly negatived.
21:11 - The House divided: - Ayes: 209 / Noes: 281 - Question accordingly negatived.
The Parliamentary Under-Secretary of State for Science, Innovation and Technology (Saqib Bhatti)
I beg to move, That the clause be read a Second time.
Madam Deputy Speaker (Dame Rosie Winterton)
With this it will be convenient to discuss:
Government new clause 6.
New clause 23—Digital Markets Unit and CMA: annual statement to House of Commons—
“(1) The Secretary of State must, once a year, make a written statement to the House of Commons giving the Secretary of State’s assessment of the conduct and operation of—
(a) the Digital Markets Unit, and
(b) the CMA as a whole.
(2) The first statement must be made by 1 February 2024.
(3) A further statement must be made by 1 February each subsequent year.”
This new clause would require the Secretary of State to make a written statement about the conduct and operation of the DMU and CMA.
New clause 27—Appointment of senior director of the DMU—
“The senior director of the Digital Markets Unit must be appointed by the Secretary of State.”
This new clause provides that the senior director of the DMU must be appointed by the Secretary of State.
New clause 28—Duty of the CMA: Citizens interest provisions—
“(1) The Enterprise and Regulatory Reform Act 2013 is amended as follows.
(2) After section 25(3) insert—
“(3A) When carrying out its functions in relation to the regulation of competition in digital markets under Part 1 of the Digital Markets, Competition and Consumers Act 2024, the CMA must seek to promote competition, both within and outside the United Kingdom, for the benefit of consumers and citizens.””
This new clause would give the CMA a duty to further the interests of citizens – as well as consumers – when carrying out its digital markets functions under Part 1 of the Bill.
Amendment 176, in clause 2, page 2, leave out lines 20 and 21 and insert—
“(b) distinctive digital characteristics giving rise to competition law concerns such that the undertaking has a position of strategic significance (see section 6).”
This amendment is linked to Amendment 182.
Amendment 206, page 2, line 25, after “Chapter” insert “, taking account of analysis undertaken by the CMA on similar issues that have been the subject of public consultation.”
This amendment aims to ensure that the CMA are able to draw on previous analysis on issues relevant to the regulatory regime.
Amendment 177, page 2, line 25, at end insert—
“(5) The CMA must publish terms of reference setting out a summary of the evidence base for making a finding of substantial and entrenched market power or of a position of strategic significance.
(6) The terms of reference must include a detailed statement of the competition law concerns arising from these characteristics and the relationship between the designated digital activity and other activities.
(7) Activities with no reasonable prospect of adverse competitive effects linked to digital activity must be referred to as unrelated activities and the terms of reference must expressly state that unrelated activities are not covered by the designation.”
This amendment would require the CMA to publish terms of reference summarising the evidence base for a finding of substantial and entrenched market power or a finding of strategic significance.
Amendment 178, in clause 3, page 2, line 28, after “service” insert “predominantly”
This amendment clarifies that the provision of a service predominantly by means of the internet would be a digital activity.
Amendment 179, page 2, line 34, leave out subsection (2)
This amendment is linked to Amendment 178.
Amendment 180, in clause 5, page 3, line 28, at end insert—
“(c) are not assuaged by evidence of competition arising beyond the activities of the undertaking, and
(d) demonstrate that the perceived market power will be improved compared with the scenario in which the designation does not occur.”
This amendment makes additions to the definition of substantial and entrenched market power.
Amendment 181, in clause 6, page 3, line 31, leave out “one or more of” and insert “both”
This amendment is linked to Amendment 182.
Amendment 182, page 3, line 33, leave out paragraphs (a) to (d) and insert—
“(a) significant network effects are present;
(b) the undertaking’s position in respect of the digital activity would allow it to extend its market power.”
This amendment changes the definition of the term “position of strategic significance”.
Amendment 183, in clause 7, page 4, line 17 at end insert “arising from the designated activities”
This amendment limits the turnover condition in relation to UK turnover to turnover arising from designated activities.
Amendment 184, page 4, line 19, at end insert “to account for inflation on the CPI measure”
This amendment ensures that the sums used to determine whether the turnover condition has been met can only be amended to account for inflation on the CPI measure.
Amendment 194, in clause 11, page 6, line 36, at end insert—
“(c) give a copy of the statement to those undertakings that have not been designated as having SMS that are most directly affected.”
This amendment ensures that challenger firms are able to access information about the regulatory framework on an equal basis to designated firms.
Amendment 195, in clause 12, page 7, line 9, at end insert—
“(5) As soon as reasonably practicable after giving a notice under subsection (2), the CMA must give a copy of the notice to those undertakings that have not been designated as having SMS that are most directly affected.”
See the explanatory statement to Amendment 194.
Amendment 196, in clause 14, page 7, line 36, at end insert—
“(5A) As soon as reasonably practicable after giving an SMS decision notice, the CMA must give a copy of the notice to those undertakings that have not been designated as having SMS that are most directly affected.”
See the explanatory statement to Amendment 194.
Government amendments 2 and 3.
Amendment 197, in clause 15, page 8, line 41, at end insert—
“(6) As soon as reasonably practicable after giving a revised SMS decision notice, the CMA must give a copy of the revised notice to those undertakings that have not been designated as having SMS that are most directly affected.”
See the explanatory statement to Amendment 194.
Government amendments 4 to 7.
Amendment 193, in clause 19, page 11, line 15, at end insert—
“(9A) A conduct requirement must be imposed within 3 months of an undertaking being designated as having SMS under section 2.”
This amendment ensures that a time frame of three months is imposed for the CMA to enforce conduct requirements on designated SMS firms.
Government amendment 8.
Amendment 190, in clause 20, page 12, line 9, after “to”, insert “harm competition in the relevant digital activity or the other activity,”
This amendment would ensure that the CMA can tackle anti-competitive conduct in a non-designated activity, provided that the anti-competitive conduct is related to a designated activity.
Amendment 191, page 12, line 11, after “activity”, insert “, provided that the conduct is related to the relevant digital activity”
See the explanatory statement to Amendment 190.
Government amendments 9 and 10.
Amendment 192, in clause 25, page 14, line 7, at end insert—
“(e) whether to take action in accordance with Chapter 4 (Pro-competitive interventions) in respect of the extent to which it is complying with each conduct requirement to which it is subject and the effectiveness of each conduct requirement to which it is subject.”
This amendment would ensure that the CMA considers the efficacy of existing Conduct Requirements when considering whether to make Pro-Competitive Interventions.
Government amendments 11 and 12.
Amendment 198, in clause 26, page 15, line 3, at end insert—
“(7) As soon as reasonably practicable after giving a conduct investigation notice, the CMA must give a copy of the conduct investigation notice to those undertakings that have not been designated as having SMS that are most directly affected.”
See the explanatory statement to Amendment 194.
Amendment 187, in clause 27, page 15, line 8, at end insert—
“(2) The CMA may have regard to any significant benefits to users or potential users that the CMA considers have resulted, or may be expected to result, from a factor or combination of factors resulting from a breach of a conduct requirement.”
This amendment would ensure that the CMA considers any significant benefits to users resulting from the breach of a Conduct Requirement when it is considering representations from designated undertakings as part of a Conduct Investigation.
Amendment 199, in clause 28, page 15, line 20, at end insert—
“(5) As soon as reasonably practicable after giving a notice under subsection (2), the CMA must give a copy of the notice to those undertakings that have not been designated as having SMS that are most directly affected.”
See the explanatory statement to Amendment 194.
Amendment 188, page 15, line 21, leave out Clause 29.
This Amendment is consequential to Amendment 187.
Government amendment 13.
Amendment 186, in clause 29, page 15, line 31, leave out subsection (c) and insert—
“(c) the conduct is necessary for the realisation of those benefits based on the best available evidence reasonably obtainable, and”
This amendment would change the circumstances in which the countervailing benefits exemption would apply.
Government amendment 14.
Amendment 209, page 15, line 37, at end insert—
“(4) The CMA may only consider that the countervailing benefits exemption applies if it has reached such a consideration within six months of the day on which the conduct investigation notice is given to the undertaking.
(5) In subsection (2), a “benefit” means any benefit of a type set out in regulations made by the Secretary of State in accordance with the procedure under subsections (6) to (9).
(6) The Secretary of State must, within six months of this section coming into force, lay before Parliament draft regulations setting out the types of benefit that apply for purposes of subsection (2).
(7) A Minister of the Crown must make a motion in each House of Parliament to approve the draft regulations within 14 days of the date on which they were laid.
(8) Subject to subsection (9), if the draft regulations are approved by both Houses of Parliament, the Secretary of State must make them in the form of the draft which has been approved.
(9) If any amendments to the draft regulations are agreed to by both Houses of Parliament, the Secretary of State must make the regulations in the form of the draft as so amended.”
This amendment would introduce a 6 month time limit on the duration of investigations into countervailing benefits claims, and specifies that the Secretary of State shall introduce further legislation for Parliamentary debate providing an exhaustive list of the types of countervailing benefits SMS firms are able to claim.
Amendment 200, in clause 30, page 16, line 13, at end insert—
“(4A) As soon as reasonably practicable after giving the notice, the CMA must give a copy of the notice to those undertakings that have not been designated as having SMS that are most directly affected.”
See the explanatory statement to Amendment 194.
Government amendments 15 and 16.
Amendment 201, in clause 31, page 17, line 3, at end insert—
“(7A) As soon as reasonably practicable after making an enforcement order (including a revised version of an order), the CMA must give a copy of the order to those undertakings that have not been designated as having SMS that are most directly affected.”
See the explanatory statement to Amendment 194.
Amendment 202, in clause 32, page 17, line 35, at end insert—
“(6A) As soon as reasonably practicable after giving a notice under subsection (5), the CMA must give a copy of the notice to those undertakings that have not been designated as having SMS that are most directly affected.”
See the explanatory statement to Amendment 194.
Amendment 203, in clause 34, page 18, line 36, at end insert—
“(4A) As soon as reasonably practicable after revoking an enforcement order, the CMA must give a copy of the notice to those undertakings that have not been designated as having SMS that are most directly affected.”
See the explanatory statement to Amendment 194.
Government amendments 17 and 18.
Amendment 189, in clause 38, page 21, line 7, leave out “breached an enforcement order, other than an interim enforcement order” and insert “breached a conduct requirement”
This amendment would allow the CMA to initiate the Final Offer Mechanism after a Conduct Requirement of the type permitted by clause 20(2)(a) has first been breached, provided that the other conditions in clause 38 are met.
Government amendments 19 to 30.
Amendment 204, in clause 47, page 26, line 8, at end insert—
“(4A) As soon as reasonably practicable after giving a PCI investigation notice or a revised version of the PCI investigation notice, the CMA must give a copy of the notice to those undertakings that have not been designated as having SMS that are most directly affected.”
See the explanatory statement to Amendment 194.
Amendment 205, in clause 50, page 27, line 28, at end insert—
“(6A) As soon as reasonably practicable after making a pro-competition order, the CMA must give a copy of the order to those undertakings that have not been designated as having SMS that are most directly affected.”
See the explanatory statement to Amendment 194.
Government amendments 31 to 56.
Amendment 185, in clause 102, page 61, line 10, leave out subsections (6) and (7) and insert—
“(6) In determining an application under this section—
(a) for any application made within a period of three years beginning on the day on which this Act is passed, the Tribunal must determine the application on the merits by reference to the grounds set out in the application;
(b) for any application made thereafter, the Tribunal must apply the same principles as would be applied—
(i) in the case of proceedings in England and Wales and Northern Ireland, by the High Court in determining proceedings on judicial review; and
(ii) in the case of proceedings in Scotland, by the Court of Session on an application to the supervisory jurisdiction of the court.
(7) The Tribunal may—
(a) for any application made within a period of three years beginning on the day on which this Act is passed, confirm or set aside the decision which is the subject of the application, or any part of it, and may—
(i) remit the matter to the CMA,
(ii) take other such steps as the CMA could itself have given or taken, or
(iii) make any other decision which the CMA could itself have made;
(b) for any application made thereafter—
(i) dismiss the application or quash the whole or part of the decision to which it relates. and
(ii) where it quashes the whole or part of that decision, refer the matter back to the CMA with a direction to reconsider and make a new decision in accordance with a ruling of the Tribunal.”
This amendment changes for a three-year period the mechanism by which the Tribunal would determine applications for review.
Government amendments 57 to 67, 83 and 84, 106, 108, 111, 148 and 149.
Saqib Bhatti
I am honoured to have been appointed as the Minister with responsibility for tech and the digital economy, and as one of the Ministers with responsibility for the Digital Markets, Competition and Consumers Bill. When I was appointed last Tuesday, many helpful colleagues came up to me to say, “You have been thrown in at the deep end,” but it is a blessing to have responsibility for taking this legislation through the House.
In that vein, I thank my hon. Friend the Member for Sutton and Cheam (Paul Scully) for his tireless work to get the Bill to this stage.
I am aware of the importance of this legislation and the sentiment across the House to deliver the Bill quickly. The benefits of the digital market measures in part 1 of the Bill are clear to see. They will bring about a more dynamic digital economy, which prioritises innovation, growth and the delivery of better outcomes for consumers and small businesses. The rise of digital technologies has been transformative, delivering huge value to consumers and businesses. However, a small number of firms exert immense control across strategically critical services online because the unique characteristics of digital markets, such as network effects and data consolidation, make them prone to tip in favour of a few firms. The new digital markets regime will remove obstacles to competition and drive growth in digital markets, by proactively driving more dynamic markets and by preventing harmful practices such as making it difficult to switch between operating systems.
I turn now to the Government amendments. When the Under-Secretary of State for Business and Trade, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) first stood in the House, he stated that the legislation would unleash the full opportunities of digital markets for the UK. That intention has not changed, and our amendments fully support that. The Government’s amendments to part 1 will provide greater clarity to parties interacting with the regime, enhance the accountability of the regulator and make sure that the legislation is drafted effectively and meets its aims. I will address each of those themes in order.
This new regime is novel. To maximise certainty, it is critical that its parameters—the scopes of the regulator’s functions and the rights and obligations set out in the legislation—are clear. Therefore, the Government have tabled a series of amendments to further clarify how the digital markets regime will work in practice. The amendments relate to how legally binding commitments provided by firms within the scope of the regime will work in practice, the Digital Market Unit’s ability to amend certain decision notices, and how in certain circumstances the DMU may use its investigatory and enforcement powers after a firm is no longer designated.
Two important sets of clarifying amendments are worth covering in more detail. The first relates to conduct requirements. Consumer benefit is a central focus of the digital markets regime. The DMU must consider consumer benefit when shaping the design of its interventions. To reinforce that central focus, we are clarifying how the DMU will consider consumer benefits when imposing and enforcing conduct requirements. Amendment 7 requires the DMU to explain the consumer benefits that it expects to result from a conduct requirement, ensuring transparent, well-evidenced decisions. Amendments 13 and 14 simplify the wording of the countervailing benefits exemption, while critically maintaining the same high threshold.
Sir Jeremy Wright (Kenilworth and Southam) (Con)
I draw the House’s attention to my entry in the Register of Members’ Financial Interests. Let me take the opportunity to congratulate my hon. Friend the Member for Meriden (Saqib Bhatti) on his appointment. Does he recognise that it is important to be clear—and for the CMA and the DMU to be clear—that there could be a conflict between the interests of current consumers and those of future consumers? Therefore, it is important that the interests of both are balanced in what the CMA and the DMU eventually decide to do.
Saqib Bhatti
My right hon. Friend makes an important point. As I make progress, I hope he will be reassured that the regime will take both those things into account.
Together, amendments 13 and 14 will make sure that consumers get the best outcomes. Amendment 14 makes an important clarification on the role of third parties in the final offer mechanism process. New clause 5 and related amendments will clarify when and how third parties may make collective submissions in relation to the final offer mechanism. That is vital, as collective bargaining can help to address power imbalances during negotiations. We expect that third parties, especially smaller organisations, may seek to work together when negotiating payment terms and conditions.
My second theme is the accountability of the regulator. The discretion afforded to the CMA and its accountability to Government and Parliament have formed a large part of the debate—quite rightly—during the passage of the Bill. I will take time to address that.
The digital markets regime is flexible in its design, with the CMA requiring a level of discretion to deliver effective outcomes. While that is common for ex ante regulation, that does not negate the importance of taking steps to maximise the predictability and proportionality of the regulator’s actions. For that reason, the Government are introducing an explicit requirement for the CMA to impose conduct requirements and pro-competition interventions only where it considers that it is proportionate to do so.
That will make it clear to firms in scope of the regime that they will not be subject to undue regulatory burdens. Firms will be able to challenge disproportionate obligations, and the Competition Appeal Tribunal will, in its consideration of any appeals, apply the principle of proportionality in a reasonable way, as it always does. To complement that, and to ensure consistent senior oversight and accountability of the regime, amendments 57 to 60 require enforcement decisions, including the imposition of penalties, to be reserved to the CMA board or its committee.
Damian Collins (Folkestone and Hythe) (Con)
I welcome my hon. Friend to his position, and congratulate him on his role. The Government amendments relate to the proportionality test for conduct requirements. Why did the Government feel that there was a need for those additional tests? Was there a concern that the CMA would use the power disproportionately, and if so, what might such a use have been?
Saqib Bhatti
I thank my hon. Friend for his contribution to the House on these matters, and for that question. The aim of the amendments is to provide clarity and give certainty—clarity that we will always ensure that the consumer is at the heart of what we do, and certainty because that is what business always needs. I will happily give further clarity in my closing remarks. To ensure robust oversight of the DMU’s implementation of the regime, we are also requiring that the Secretary of State approve the publication of guidance relating to part 1 of the Bill.
Rebecca Long Bailey (Salford and Eccles) (Lab)
On the issue of clarity, the Minister knows that the final offer mechanism should be an issue of last resort, and before that there should be a mechanism by which negotiations can take place. Can he assure the House that there will be a mechanism to ensure that big tech firms do not drag out negotiations unnecessarily, because it is not clear so far?
Saqib Bhatti
The whole mechanism is designed to ensure that smaller firms have a say in this. That is why the final offer mechanism is there. I hope that that that gives the hon. Member some reassurance.
Finally, the regime has the potential for significant financial penalties to be imposed, so we have tabled amendments to allow any party subject to a penalty to appeal decisions about the penalty on the merits, rather than on judicial review principles. An appeal on the merits allows the Competition Appeal Tribunal to consider whether it was right to impose the penalty, and to consider the penalty amount. Where appropriate, it also allows the Competition Appeal Tribunal to decide a different penalty amount.
John Penrose (Weston-super-Mare) (Con)
I join the queue of people congratulating the Minister on his new role, which is well deserved. I think that I am right in saying that any appeal against a fine from another economic regulator, such as Ofwat or Ofgem, is made to the CMA on the basis of the JR standard, yet we seem to be creating a different, and arguably more complicated, special deal for large tech platforms. Can he explain the Government’s thinking behind that?
Saqib Bhatti
I do not think that there is, as my hon. Friend puts it, a special deal; it is about taking a balanced approach to ensure that firms with penalty decisions that have less direct impact on third parties have the opportunity to challenge them, and take a view on them according to the regime.
John Penrose
The Minister is being very generous. I just want to understand why the approach differs from that taken in identical appeals by other companies against other economic regulators.
Saqib Bhatti
Given the huge size of the fines, it is only right that that approach is put in place to ensure the penalties are applied appropriately, but it does not apply to decisions that are not made by the CMA.
The regime has the potential for significant financial penalties to be imposed, so we are introducing amendments to allow any party subject to a penalty to appeal decisions about that penalty “on the merits”. An appeal “on the merits” allows the Competition Appeal Tribunal to consider whether it was right to impose the penalty and to consider the penalty amount. Where appropriate, it allows the Competition Appeal Tribunal to decide a different penalty amount. The DMU’s other decisions, including the decision as to whether a breach of the regime occurred, would remain subject to an appeal on judicial review principles.
Sir Jacob Rees-Mogg (North East Somerset) (Con)
I join in congratulating my hon. Friend on his appointment and on this very wise amendment. It is fundamental to the rule of law that people who are fined large amounts of money have some proper form of appeal; we must not put too much trust in unaccountable and unelected regulators.
Saqib Bhatti
My right hon. Friend is always a thoughtful contributor to debates in this House. We believe that the amendments ensure consumer benefit is at the heart of what we are doing and any appeals will be carried out appropriately. Adopting these amendments would bring the digital markets regime into closer alignment with existing CMA mergers and markets regimes, where penalty decisions can be appealed on the merits. As in those regimes, all other decisions are appealable on judicial review principles.
Sir Jeremy Wright
I thank my hon. Friend for giving way again. He will appreciate that we are all trying to get clarity, so we understand what the proposals really mean. In relation to the appeal standard that he describes, for cases that are not specifically related to fines, he mentioned the proportionality addition earlier in his remarks. When it comes to an appeal, are we right to understand that the question of proportionality applies when the CMA originally makes its decision to require an intervention and does not apply to the JR standard that is used to determine an appeal?
It is important to be specific about that, because there are those who would argue that proportionality should be a part of the appeal process. I think the Government amendments say that proportionality applies at an earlier stage and that when it comes to considering whether the CMA has behaved in a proportionate way in making its decisions, the assessment will be made by the Competition Appeal Tribunal on JR principles. Am I right about that?
Saqib Bhatti
I agree that that is exactly what we are saying. I am happy to provide further clarity in my closing remarks.
Critical to accountability is, of course, transparency. The Government are committed to transparency and bringing forward amendments that will require the CMA to set out its reasons for imposing or varying a conduct requirement. That will improve transparency around CMA decision making and increase consistency with other powers in the Bill where similar justification is required. It also reinforces the CMA’s existing responsibility to consider likely impacts on consumers when deciding whether and how to intervene.
The third theme is to ensure the legislation is drafted effectively. Therefore, we have tabled further technical amendments to ensure that the Bill’s text meets the Government’s original intended aim. They relate to the scope of conduct requirements, specifically the application of the materiality threshold contained in clause 20(3)(c), the maximum penalty limits imposed on individuals, the mergers reporting duty and the service of notices on undertakings overseas in certain circumstances.
It is worth noting that there are a small number of cross-cutting amendments contained in parts 5 and 6 of the Bill that will also impact the digital markets regime. I want to ensure that there is plenty of time for hon. Members to debate the Bill at this important stage in its passage. I appreciate a collaborative approach from across the House. I am sure that there will be many different views on some of the amendments, but I look forward to a constructive and collaborative discussion.
Alex Davies-Jones (Pontypridd) (Lab)
It is a true privilege to be back in the Chamber once again, on behalf of the Opposition, to open the third debate in recent months on Report stage of this incredibly important Bill. I welcome the Minister to his place: he is joining this brief at a very exciting time, and I look forward to working with him in the months ahead to get the Bill finally over the line. I pay tribute to his predecessor, the hon. Member for Sutton and Cheam (Paul Scully). We may not always have agreed on the detail, but I was always grateful for his collegiate and open-minded approach to getting the Bill to a good place, where it needed to be.
Margaret Greenwood (Wirral West) (Lab)
People often find it difficult to get out of internet provider contracts. They may spend hours on the phone, or communicating via a bot, and when they do get through to someone, that person tries to talk them out of what they are trying to do. It seems to me that it would be very straightforward to require providers to have on their websites a simple and prominent “cancel my contract” button, easily visible to anyone who is logged in. That, surely, would save people acres of time and a huge amount of frustration.
Alex Davies-Jones
My hon. Friend has made an important point about an issue faced by all our constituents who are struggling to get out of contracts that do not give value for money, and subscription traps, which we will discuss later this evening. These are issues that should have been dealt with in the Bill, and could have been had it been afforded parliamentary priority. Sadly, many opportunities have been missed and will need to be returned to, and we will be urging the Government to do that in due course.
The Conservatives have needlessly delayed the introduction of the Bill. Their focus on infighting and general chaos has prevented them from presenting suitable legislation. The Bill was first promised in Parliament more than a year ago, and since then, owing to Tory delay, we have fallen behind our European neighbours in this vital policy area. Failure to act against gatekeepers to access points in the digital economy—from web browsers to search engines, and from mobile operating systems to app stores and broadband contracts—is having a huge impact on business growth and consumer prices. Let us be clear: a failure to regulate and level the playing field is having a huge impact on consumers, who ultimately pay the price.
This is a complicated Bill, which has rightly received substantial coverage in the media since it was first published. It is only appropriate for me to begin my consideration of the first group of amendments by raising particular concerns about the Government amendments relating to the countervailing benefits exemption—notably, amendments 13 and 14. As we all know, the countervailing benefits exemption allows the Competition and Markets Authority to close an investigation of a breach of a conduct requirement if a big tech firm can demonstrate that its anti-competitive conduct produces benefits that outweigh the harm. These amendments change the test for the exemption from indispensability—a recognised competition law standard that ensures that a big tech firm cannot proceed with anti-competitive conduct without good reason—to an untested, potentially ambiguous standard. There is a danger that this new, untested standard could allow big tech firms to evade compliance and continue with conduct that harms UK businesses and consumers. They might also inundate the CMA with an excessive number of claims of consumer benefit, diverting its limited resources away from other essential tasks.
The Minister must be realistic. It is highly unlikely that anti-competitive conduct on the part of regulated firms will ever have a consumer benefit. The amendment creates an unnecessary loophole that Labour colleagues and I find very concerning. I would also be grateful if the Minister could clarify whether these amendments create a new legal standard that could allow regulated companies to evade compliance. There is also the question of how the amendments will protect the CMA from being inundated with claims of countervailing benefits from regulated companies. Labour is concerned by these amendments, and I therefore urge Members across the House to support amendments 187 and 188, tabled in my name, which seek to undo the Government’s mismanagement.
I will turn now to the changes in the appeals mechanism. The Minister knows about, and will have heard, the concerns of colleagues on the Conservative side—on all sides, actually—about the changes in the appeals process, as outlined in Government amendment 51 to 56. We have all heard the passionate calls from businesses that have risked their reputations and market share by sticking their heads above the parapet to warn of the risks of watering down the appeals process. It is testament to their hard work that we are at this point today.
As colleagues will be aware, the Government amendments would change the appeals process and standard for penalty decisions to full merits only. As we know, penalties such as fines are the most significant deterrent to prevent short message service firms from breaking the conduct requirements established by the CMA. Although timing—a key concern when considering the impact of full merits on other parts of the Bill—is not of paramount importance when it comes to fines, it is foreseeable that full merits appeals could allow SMS firms to reduce significantly the size of penalties, thus reducing their incentive to comply.
The Minister will come to learn that collegiate, sensible agreement has been a common theme as the Bill has progressed, particularly in line-by-line scrutiny in Committee. Indeed, we broadly welcome the Government’s decision to maintain the judicial review standard for appeals on regulatory decisions. Labour feels that will ensure that the Competition and Markets Authority has the tools to act and is not bogged down in complex, lengthy and costly legal wrangling, which would render the new regime completely ineffective.
However, the Minister must clarify how the amendments will not impede the CMA’s ability to keep pace with rapidly moving digital markets. The regulator must retain the flexibility to construct remedies that target the harms to UK businesses and consumers stemming from big tech’s dominant position in digital markets. Looking back on the contributions of the Minister’s predecessor in Committee, we were all assured with a level of certainty that there would be no changes to weaken the appeals process, so it is a frustrating reality to see yet another U-turn from this Government—sadly, we have all become more than used to their slapdash way of governing and making law.
As we know, introducing full merits appeals for all regulatory decisions would have allowed complex, lengthy and costly legal wrangling, which would render the new regime ineffective. It must therefore be clarified that the Government’s amendment allows full merits appeals only for the level of the fine and for the decision to issue a fine. It must not permit a review of the CMA’s decision to create a conduct requirement or implement pro-competitive intervention, or of the CMA’s decision on whether a conduct requirement has been breached and how to remedy that breach. I would therefore be grateful if the Minister clarified exactly whether that will be the case.
I am conscious of time so I will push the Minister to clarify a number of important points. Government amendment 64 gives the Secretary of State the power to approve CMA guidance, which will be critical to regulated firms, particularly on how they should comply with the conduct requirements placed upon them. What is unclear is when and how, and in what timeframe, guidance must be submitted to the Secretary of State. I know that many of us would be grateful for some straightforward clarity from the Minister on that issue.
Lastly, I am keen to highlight Labour amendments 194 to 196, tabled in my name, which aim to improve the consultation rights of challenger firms. Under the current drafting, firms with strategic market status will have far greater consultation rights than those that are detrimentally affected by their anti-competitive behaviour. The amendments would give third parties the ability to provide critical information for the CMA’s consideration, and feedback on its work. That is vital, particularly for challenger companies whose growth may see them captured by the regime at a future point. I hope that the Minister will consider the merits of introducing similar amendments in the other place. He would have widespread support from colleagues across the House if he were to go ahead and do so.
We have heard the concerns of Members across the House about how the changes have been implemented, so I urge the Minister to listen carefully to the debate as it progresses and to do the right thing by working collegiately for the benefit of good legislation.
Sir Robert Buckland (South Swindon) (Con)
In rising to address the House, I draw Members’ attention to my entry in the Register of Members’ Financial Interests: I am an independent adviser in a collective action being brought in the Competition Appeal Tribunal for alleged anti-competitive behaviour relating to cryptocurrency. Although I will not address my remarks to any part of the Bill that might be perceived as relevant to the funding of litigation relating to such actions, I thought it right to be comprehensive in my declaration.
I wish to couch my remarks in this way: I am a firm supporter of the need to provide effective regulation in a market that is vulnerable—and, some would say, prone—to monopolistic abuse of market power. It is clear that regulation is not only desirable but essential when it comes to representing the interests of the consumer, and that is the place from which we all need to start.
In the sturm und drang that has accompanied some of the coverage of the Bill, it is perhaps inevitable that focus has been placed on the interests of one sector, as opposed to those of another—the large-scale enterprise against the small start-up. In all that, we risk forgetting the essential truth of why we are legislating in this way, which is first and foremost to ensure that any regulator is working in the interests of the consumer. My amendment deals precisely with that issue, by imposing an overarching and paramount duty on the regulator, and indeed the courts, to serve the interests of the consumer. Accompanied with a duty of expedition, that underlines the thrust of why I have decided to speak in this debate and to table amendments. Much needs to be done in the process of dealing with competition issues, which of course means the operation of the CMA and the Competition Appeal Tribunal. This debate—indeed, this whole process—can be a moment for us to reflect, and to take action and ensure that the way such disputes are dealt with in future will be more efficient, more speedy and in the interests of the consumer.
Ex-ante regulation is very difficult; it is all about predicting the future. Indeed, I am glad to see my hon. Friend the Member for Folkestone and Hythe (Damian Collins) in the Chamber. He followed that market very carefully and knows its ever-changing nature. It is difficult to predict what the world will look like in six months, let alone in five years. It is right to remember that the basis of the Bill, and of today’s debate, goes back four years to the Furman review, which rightly set out the parameters that have led to the development of this much-needed legislation.
In one respect, the review has been somewhat prayed in aid in a way that is potentially misleading. Recommended action 12 of the Furman review speaks about the ability of an affected company to appeal a decision—this is relevant to amendment 185 to clause 102. The review states:
“To facilitate greater and quicker use of interim measures to protect rivals against significant harm, the CMA’s processes should be streamlined.
The ability for an affected company to appeal a decision or an interim measure is a vital safeguard of their rights, and a check on the quality of CMA decision-making. Appeals processes need to strike a balance between protecting those affected by any unjustified decision and ensuring that CMA powers can be exercised effectively to protect those who would be left exposed by underenforcement or undue delay.”
It goes on:
“The competition framework would be improved for digital markets by focusing appeals on testing the reasonableness of CMA judgement, that procedure has been appropriately followed, and that decisions are not based on material errors of fact or law—a standard more closely relating to that of judicial review.”
As I read it, that is an invitation to ensure that there is not a completely unbridled merits-based approach. It is a world away from suggesting that somehow, in this world of ex-ante regulation, we should be immediately narrowing down the options of any court or applicant relating to potential claims on merit.
Ex-ante review work is not easy, but it is not unprecedented in United Kingdom regulation. We have had telecoms regulations for a long time, with the work of Ofcom in policing that. In that area, for a long time the decision making and the appeals process were allowed to be based on merit, before a reversion or a narrowing down to judicial review principles. Indeed, that was laid out for a long time—much longer than the period I envisage in my amendment—in order to reflect the importance of achieving maximum clarity as early as possible. I do not want to see anything that creates uncertainty in this market, because that will lead to a lack of investment, and perhaps a reduction of the sorts of investments that we want to see domestically and internationally in this important and vital market for the future of our British digital services industry.
Sir Robert Neill (Bromley and Chislehurst) (Con)
My right hon. and learned Friend is making an important and eloquent speech. Can I emphasise the point that he makes about certainty, and return to the intervention by my right hon. and learned Friend the Member for Kenilworth and Southam (Sir Jeremy Wright) about the importance of having clarity on what the test will be and at what stage it applies? We all understand proportionality tests, and we certainly all understand classic judicial review tests, but it is important in this emerging market that people know at which stage which test applies. I appreciate the Minister saying that he will clarify that later in his speech, but I am not sure that the wording proposed by the Government gives us that clarity. Will my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland) consider what more needs to be done around that?
Sir Robert Buckland
What my hon. Friend outlines is precisely what we are seeking. In making these arguments, we are not in some way the friends of big tech; we are not here to represent a particular sectoral interest. My amendment was drafted by me and by senior counsel from Monckton Chambers, including Philip Moser KC, who regularly appears both for and against big tech in these matters. I thought it right to seek some independent pro bono advice on the operation of competition law to make sure that, in developing the law in this way, we do not create entirely untested mechanisms that would—guess what?—require litigation to clarify.
The point is that we should be seeking to minimise more interpretive language that will require to be tested in the courts. That is why I take slight issue with what was said by the hon. Member for Pontypridd (Alex Davies-Jones), whom I respect very much. In amendment 186, I seek to replace the word “indispensable” with “necessary”, because I think that is a much clearer term that everyone would understand and that would, in itself, be a high threshold for the affected company in demonstrating consumer benefit in the countervailing consumer benefit test.
I think that, rather than trying to use and develop new language, we should look back and learn from the experience of telecoms regulation. One of the problems in, in effect, handing considerable power to the new digital markets unit is that the legal landscape relating to this activity is unformed. Unlike the landscape that underpinned the Competition Act 1998, we do not have the advantage of years of EU and UK court interpretation that was then applied by guidelines issued by the CMA.
Grahame Morris (Easington) (Lab)
The right hon. and learned Gentleman is articulate in presenting the case and knowledgeable about the issue, but may I distil it down to an issue of fairness that everyone can understand? Before our very eyes, the landscape is changing. Long-established titles, newspapers and publications are disappearing and retrenching. Thousands of journalists are losing their jobs. Is it not a matter of basic fairness that people who create the content should be properly compensated?
Sir Robert Buckland
The hon. Gentleman is right to make that point. That is why in other jurisdictions we have seen agreement reached between big tech and newspaper titles to ensure that there is that element of fairness. I agree with him; I want to see similar fairness and equity applied across the market. What I and others who agree with me are trying to do is to ensure that, in creating this brave new world of energetic and efficient regulation, we do not as a Parliament upset the balance by giving too much power to a particular regulator. A lot of us in this place have watched with concern the failure of other types of regulation—in our water industry or our energy industry, for example. I do not think anybody would deny that, at times, we have got regulation wrong. That is why it is important that we have this debate.
There are people outside this place who have put pressure on us by saying, “The Bill is in perfect order. There is no need for you to look at it any more; great minds have thought about it.” I say to them that it is for this place to make those decisions. I do not look kindly on comments made by the chief executive of the CMA about the merits of what this place is considering while the Bill is in Parliament. I absolutely accept the independence of the CMA and the important role that it plays, but we should not confuse independence with lack of accountability. That is a point that I will warm to in a little while, when I address the relationship between regulators—in this case, the CMA—and Parliament. At the moment, that relationship is wholly inadequate.
I was making the point that, unlike the Competition Act 1998, there is a relative lack of worked-out court interpretation of this Bill’s subject matter. That has led to distinguished commentators—no less than Sir Jonathan Jones, former Treasury counsel—making the point in evidence to the Committee that, in effect, the DMU would be able to decide who was going to regulate, set the rules that apply and then enforce those rules. The phrase “legislator, investigator and executioner” was used. While that is colourful language—perhaps too colourful for a dry debate about competition law—it is important that we reflect on the view of that former Treasury solicitor and be very careful that in going down this road, we are not making false comparisons.
A lot has been said about Ofcom and its decisions, and comparisons have been made, but we must not forget that those Ofcom decisions were heavily governed by EU framework directive 2002/21. Article 4 of that directive says that on ex-ante telecom appeals,
“Member States shall ensure that the merits of the case are duly taken into account and that there is an effective appeal mechanism.”
That is a bit different from the provisions in the Bill. A simple JR-type review is precisely that, and no more.
I listened with interest to the intervention made by my right hon. and learned Friend the Member for Kenilworth and Southam (Sir Jeremy Wright), who made a really good point that needs answering. We need to understand where proportionality comes into this. If the principle of proportionality is being used in the first instance, that is all well and good, but we need to understand how that fits with the provisions of the Bill: whether it implies that the courts deem every decision made by the DMU to be proportionate, or whether there is a way to challenge a particular decision by saying that it was not made according to the DMU’s own principles, acting in a proportionate way.
Sir Jeremy Wright
It seems to me—I would be interested in my right hon. and learned Friend’s view—that on the basis of the Government’s proposed wording, it is more likely that a firm will be able to challenge whether the CMA has applied its proportionality test appropriately, but the means by which it will do so will be under JR principles on appeal, rather than on a merits basis. It is not that proportionality is not subject to challenge, but that that challenge is limited by JR principles at the appeal stage. Does my right hon. and learned Friend agree?
Sir Robert Buckland
That is what we need to bottom out. The primary worry that a lot of us have about the JR principle is that it means that any challenge will probably be vanishingly small, which is not good for ensuring that the regulator is working in the best way. None of us wants to encourage incontinent litigation—or incontinent legislation, bearing in mind the importance that we place on it—but sometimes, challenge is essential to create greater certainty. There will be ambiguities; there will be occasions where there needs to be a test. We should not be frightened of that.
Damian Collins
I am following what my right hon. and learned Friend says carefully. Does he agree that we have to consider the nature of this business landscape? For these firms—some of the biggest companies in the world—litigation is a cost of doing business. Their track record shows that they use almost all grounds there are to challenge any decision made by any regulator. Not even a regulator is resourced sufficiently to be able to contest those challenges, and the people who seek to bring them know that they will take years and cost a huge amount of money, and that the business may even be closed by the time a resolution has been found.
Sir Robert Buckland
I fully take on board my hon. Friend’s concern. He is right to say that, which is why this should not just be about what might happen in terms of raw dispute; it has to be the culture of the new regulator to work with any potential subject—any company that might be a subject of an investigation—in a co-operative way. That raises the issue of how open the parties are with each other about the basis of their assertions and of how data is shared—that goes right into the Competition Appeal Tribunal itself. A lot of people would be surprised that the disclosure rules in the CAT are not as open as one would expect them to be if one is challenging a decision. We have to work our way through that, in order to change that attitude and reduce the amount of potential litigation by making sure that there is agreement.
I accept that the Government have moved on the JR test with regard to penalty, but a potential problem could result from the Government’s amendment on that: there will not be a change of culture, there will be a readiness by big tech to admit breach and then all resources will be thrown into contesting the penalty. There we will get the litigation, the real argument and the high-stakes money. To paraphrase my hon. Friend, we will get the actuarial calculation that it would be worth throwing a lot of money at litigation to reduce a penalty that could be a big percentage of turnover. We are potentially talking about huge penalties for these companies.
That issue does worry me and I hope that it demonstrates to the House why I am properly sensitive about the need to make sure that we do not just open the door to abuse by another means. I am a huge follower of Theodore Roosevelt and a great believer that his approach to fighting the J.P. Morgans and the Standard Oils of his day is exactly how we should operate in the monopolistic markets of today and tomorrow. My hon. Friend is right to say that this market is fast developing. When the Furman report was produced, we were looking at a different world in big tech. With the rise of artificial intelligence, we are seeing it evolve further.
Damian Collins
I am grateful to my right hon. and learned Friend for giving way, particularly as we are on the subject of Theodore Roosevelt. Does he agree that we have to be careful when considering consumer detriment in this case? The argument was not successfully made in the United States that J.P. Morgan could say that he may have a railway monopoly but the ticket prices were relatively low and so there was no consumer detriment. That was not considered to be a binding argument, so because the cost of an app in an app store might be low, that does not mean to say that the company can get away with overcharging.
Sir Robert Buckland
Again, I am grateful to my hon. Friend. He is right: there is a danger that in regulation we focus on the cost of the good or service, rather than on the overall environment and quality of the market. Some would say that that has been a particular issue in the way that regulation has operated in the water sector. That is why this is a good moment for all of us, as a House, to pause and reflect on where we have gone wrong with regulation in the past and how we can get it right from here on in.
There are some options the Government can look at when dealing with the JR standard. I have mentioned the importance of making sure that there is accountability, but we should not just be looking at the sunset option that I have set out in my amendment; we should look again at whether the clarification of the proportionality test could help everybody to understand precisely how the JR principles will work. If we miss the opportunity on this occasion to get this right, I am not sure we will be doing anybody any favours, least of all the consumer and especially not the DMU itself, which needs to develop in a way that is truly accountable.
The thrust of some of my amendments relates to the regulator’s accountability to this place, which is why they include a requirement to report regularly to Parliament and to Ministers. New clause 12 relates to the appointment of the senior director of the DMU, which I think should be done directly by the Secretary of State. That is not a challenge to the independence of the body; Ministers regularly appoint independent directors and inspectors, for example, and it does not undermine the integrity and quality of their role. However, through those amendments I am seeking to make the case that we should not confuse independence for lack of accountability. I do not use that word as a way of avoiding a greater accountability to this place.
The First Deputy Chairman of Ways and Means (Dame Rosie Winterton)
Order. I have to get five more speakers in, plus the Minister. As the right hon. and learned Gentleman will shortly have been on his feet for nearly 25 minutes, this is just a quick reminder that he needs to give others time to speak.
Sir Robert Buckland
Of course. I have just cleared my throat, Madam Deputy Speaker, and by my standards this is a very short speech.
I will deal in summary with the other amendments. What I am seeking with those amendments is to ensure that, in using definitions, we do not end up creating mission creep for the DMU. I want the DMU to focus on the emerging digital economy; I do not want it to end up dealing with, for example, supermarkets such as Tesco, which will increasingly use online services to allow customers to shop. I do not think that is the intention of those proposing the Bill, but we need to make it clear in the Bill that that sort of mission creep will not be part of how the regulator develops.
I also want to make the point that, when looking at entrenched market power, focusing purely on size can sometimes be deceptive. Rather small enterprises can often have a disproportionate effect on a market. They do not necessarily need to be big. While we rightly understand that generally the bigger the entity or organisation, the bigger the impact it has, it is not always the elephant that makes a difference; it is sometimes the mouse. That is why focusing on market power rather than size is a better way of dealing with effective regulation.
In summary, I want to hear from my hon. Friends on the Front Bench a response to the challenges that I have laid out. I do not seek to press the amendments to a vote this evening, but I am sure that they will be returned to in the other place. Surely it is in the interests not only of the people we serve, but of the wider British economy that in passing such pioneering legislation, which in many ways puts Britain in a different place from other jurisdictions, we do not end up disincentivising the sort of investment that I know is part of the Prime Minister’s aspiration to make this country a world leader in artificial intelligence and machine learning safety and a place where digital businesses will want to invest. It is as simple as that. That is why it is vital that in this Bill we strike as perfect a balance as we can, because in this complex, ever-changing market it is very difficult to predict what the future will be.
Richard Thomson (Gordon) (SNP)
My party broadly welcomed the Bill at its introduction and through Committee, and broadly speaking we still do. However, for our liking there remain too many gaps in consumer protection. The Bill does not include an equivalent to the EU’s consumer rights to redress when consumers are misled, and it does not baseline the protections that we had previously, which we think is a serious omission. Many consumers found that to their cost when their travel arrangements went haywire through chaos at the channel ports over the summer.
The Bill does not do enough to tackle greenwashing. As we have heard, there is a systemic failure to tackle drip pricing and subscription traps. We are also still unclear about how the Government intend to tackle the scourge of fake reviews; although secondary legislation could be introduced, the scope of the sanctions that could be brought to bear against the perpetrators would inevitably be restricted.
Rather to my surprise, we have 175 Government amendments to the Bill. That seems rather a lot to be bringing in. It can be gently elided over that this is a Government who have been listening carefully to all the arguments put, but, to be perfectly honest, I think it shows that this has become something of a Christmas tree Bill. It would have been better to have had much more parliamentary scrutiny in Committee of some of the things we now find coming in, no matter how well-intentioned they are.
A number of amendments to the Bill do cause me concern, including the series of amendments that changes the mechanism for appealing the Competition and Markets Authority’s decisions. In our view, Government amendments 6, 7, 10 and 30 will water down the Bill’s effectiveness, allowing tech companies described under the Bill as the most powerful firms and dynamic digital markets to be able to challenge the CMA’s decisions if they do not believe that they are proportionate.
Government amendments 51 to 53, 55 and 56 also have that effect, since they will prevent certain appeals by big-tech firms of decisions made by the CMA from being held to the judicial review standard. I am unpersuaded by the arguments that we have heard so far about that. We fear that, in practice, when a decision is taken that is not, for whatever reason, to the liking of big-tech companies with rather large budgets—to take one entirely at random, we have Apple, which makes profits and turnover yields that are bigger than most countries’ GDPs—they will inevitably be able to tie those decisions up in the courts for quite some time, all the while being able to secure whatever advantage they had which the CMA had judged they got unfairly. The CMA has warned that changing the appeal mechanism could lead to such a set of drawn-out legal battles and quite an adversarial relationship with the firms that it seeks to regulate, which I would venture is far removed from the Bill’s original intention.
It is unusual that I should ever pray in aid the other place in a political argument, but last month the House of Lords Communications and Digital Committee called on the Government to maintain the JR standard for all appeals. It is therefore worrying, if not entirely surprising, that the extensive lobbying that some of the bigger tech companies have subjected us to seems to have found the ear of the Government.
If the UK Government’s amendments 6, 7, 10 and 30, which seek to allow firms with strategic market status to appeal against CMA decisions, are accepted, that will essentially undermine the CMA’s job and ability to protect consumers. Those amendments would allow big tech firms to appeal against decisions taken by the regulators on significant issues such as blocking mergers and issuing fines simply on the basis of their feeling that they may not be proportionate. As I say, they can certainly afford to spend huge amounts of money on legal representations to quibble with these decisions, particularly if the fines or deprivation of the opportunity to make lots of money mean that they feel it is worth spending that money whatever the eventual chances of success are.
This is in addition to the letter that Baroness Stowell wrote to the PM last month warning that the UK Government must not “undermine” the Competition and Markets Authority, noting that these amendments would
“favour those with an interest in delaying regulatory intervention”
and give greater power to avoid scrutiny to the tech firms
“with the greatest resources”.
The UK Government should not be ignoring these warnings, and we believe that this is a detrimental addition to the Bill. This position was also backed up by Which? in April last year. In our view, these amendments show that the Government have done the exact opposite of sticking to their guns on this.
I am mindful of the time—as are you, Madam Deputy Speaker—so I shall come to the amendments that I believe we will be voting on later. Labour amendments 187 and 188 would enable the Competition and Markets Authority to consider any significant benefits, due to a combination of factors, that might result from a breach of the conduct requirement. We think that strikes a reasonable and fair balance on where we would like the outcomes to be, and should the amendments be pressed to a vote, the SNP will be supporting them.
Damian Collins (Folkestone and Hythe) (Con)
Listening to this debate, I was reminded of remark attributed to a major United States tech investor who said that it had always amused him that people thought competition and capitalism were the same thing. While competition can be a great driver of economic growth, the acquisition of capital and the creation of new markets, there are equally plenty of capitalistic enterprises that have grown wealthy on the back of a lack of competition, through market domination. That is why this legislation is so important.
Superficially, it is tempting to look at the landscape of the digital economy and say that the fact that there are a number of very big companies is evidence of effective competition between those companies. Those companies, including Amazon, Apple, Google and Meta, may compete for the provision of some services, but they largely dominate markets where they are the central player. We have heard throughout the passage of the Bill that even major businesses seeking to sell their goods through, say, Amazon as an online retail platform cannot afford to have a public dispute with that platform, because their relationship with that company is fundamental to the success of their business. Major publishing companies have talked about the fact that contract renegotiation with companies such as Amazon can come with big costs attached, but that ultimately they have to do business through them.
Cloud storage, which is currently an area of investigation for the CMA, is going to be a vital piece of business infrastructure for anyone who operates in the digital economy, but again, it is dominated by one or two companies, principally Google and Amazon. There are only two operating systems for our mobile phone devices. One is Android, which is owned by Google; the other is Apple’s iOS system. They both have app stores, and there is a lack of interoperability between them. We therefore have app store markets that are actual monopolies. This has been investigated by the CMA and it has billions of pounds of consumer detriment in overpricing and variable pricing attached to it.
We know that these anti-competitive forces exist. In its recent ruling on the proposed Microsoft-Activision merger, the CMA was right to highlight that if a company that creates video games that people like to play is allied to a cloud system owned by a dominant company, people might only be able to access the service if they pay that cloud provider—the storage gatekeeper or guardian of that service—which could have consumer detriment down the line.
We are already seeing examples such as market domination and self-preferencing. Google has been investigated by the European Commission over self-preferencing. This is where companies are not just creating an easy-to-use service across multiple products for people, but doing so in a way that excludes others from that market. In the long run we must be concerned about the consumer detriment of market power being consolidated into the hands of a relatively small number of companies. An example that Members will probably all be familiar with is the mobile mapping app market. It used to be quite a vibrant market with a number of players in it, but it is now largely dominated by two, Google and Apple. That is not to say that the interest of companies is always against the consumer interest, but we should be mindful of the fact that in many of these markets, monopolistic conditions can easily be created, so we should be concerned about abusive market power. There is already some evidence of that.
Grahame Morris
I, too, welcome the new Minister to his place and congratulate him on his appointment. We all recognise that this is important, long-overdue legislation, so I wish him well in piloting it through the House. I also declare an interest: I am co-chair of the all-party parliamentary group for the National Union of Journalists. I receive no pecuniary advantage, directly or indirectly, and the NUJ is not affiliated to the Labour party or any other party, but it none the less makes some valid points, which I wish to raise today.
We face immense challenges and significant technological changes in the UK, and indeed globally, given the development of social media and the increasing use of artificial intelligence. In an era of fake news, there are few sources of news trusted more than our national, regional and much-loved local titles, which have stood the test of time and have deep roots in our communities. I have participated in a number of debates on the subject in Westminster Hall, and debates on the decline of our local newspapers and the need to support them are always over-subscribed.
It is important to be aware that professional journalism in the UK is in crisis. Reach PLC, the publisher of titles including The Mirror, the Daily Star and the Manchester Evening News, has announced a third round of redundancies, putting at risk as many as 800 journalist jobs. If we do not find means of fairly compensating established publishers and trusted sources of journalism, we will suffer from a less diverse media landscape, job losses, and the promotion of voices delivering fake news guided by hidden agendas.
Big tech continues to exploit its market dominance in digital advertising; it uses news content from professional journalists without giving any payment or compensation to the publishers who produce the content. This Bill is a positive step, which I welcome. It is welcomed by the NUJ, journalists and publishers. A functioning media market requires regulators to address the power imbalances that have emerged between major tech companies and the journalism industry in recent years.
Our established news titles and publishers are essential to democracy; they scrutinise Government and contribute to an informed society. Their content is being used to generate revenues for tech giants. They—the creators—must be guaranteed a fair share of revenues. Without quality news content on online platforms, the overall standard of information that we all consume will decline. It is in the collective interest of our Government, of all citizens of the country, and even of major tech companies to ensure the continued presence of quality journalism. That is relevant to the part of the Bill that allows the Competition and Markets Authority to initiate a final offer mechanism, which was referred to by my hon. Friend the Member for Pontypridd (Alex Davies-Jones)—I support Opposition amendments 187 and 188 for the reasons she gave. The final offer mechanism must be used only as a last resort, and not by big tech companies to bypass meaningful negotiations.
I also wish to reinforce the point made by my hon. Friend the Member for Salford and Eccles (Rebecca Long Bailey): meaningful and fair negotiations are vital if big tech companies are not to continue to exploit the current power dynamic, and place undue influence on smaller publishers in a way that does not recognise the true value of the original content that they produce. British journalism is valuable, and its value is quantifiable. News content used by tech giants is estimated to be worth around £1 billion a year in the UK. That revenue is essential to the health and wellbeing of professional journalism in the UK.
I welcome the stance of the House of Lords Communications and Digital Committee on the timely implementation of the Bill, and its recommendation that the Government
“resist pressure to weaken some of the Bill’s measures”.
I also echo what the NUJ and the News Media Association say about maintaining the option of judicial review for appeals against regulatory decisions.
Government amendments must be clarified—a number of Members, including my hon. Friend the Member for Pontypridd, have asked for this—to ensure that the Competition and Markets Authority can retain the flexibility to construct remedies for problems that arise, and to keep up with rapidly changing digital markets, especially when big tech has such a monopolistic position.
I urge the Minister to uphold a high threshold for exemption from penalties when tech firms breach the rules, so as to prevent misuse of exemption provisions by well-funded companies that employ expensive legal teams. The example of Everton Football Club comes to mind. It seems to me—not that I am an expert in these matters—that it is being heavily penalised. Other football clubs in the premier league that seem, on the face of it, to be guilty of far greater abuses have managed to avoid the penalties. It is crucial that we eliminate loopholes that could be exploited by big tech.
Whether we like it or not, people consume a lot of their news from the big tech giants. Research conducted by Ofcom found that Facebook is the third most popular place to consume news; a higher proportion of people go there than to the BBC or Sky News channels. Meta recently discontinued Facebook News in Europe, and that has a potential impact on news consumption. With almost half of news consumers relying on social media, it is imperative to ensure fair compensation for quality content on social media platforms.
Looking ahead, the NUJ seeks extensive engagement with the Government—I hope that the Minister will respond to this—on safeguarding the future of journalism, and on recognising the multi-faceted threats that it faces, including from emerging technologies such as artificial intelligence. It is imperative that this legislation quickly progress through Parliament, so that we can safeguard the integrity of UK news titles and publishers, and protect them from undue influence from big tech lobbyists who wish to water down much-needed reforms.
Sir Jacob Rees-Mogg
I am delighted to support the amendments in the name of my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland). It is important to get the balance right, and not to worry too much about phantasms and fears that will not arise. It is worth recalling that, in the 1970s, the Federal Trade Commission was on the cusp of opening an investigation into IBM for its monopoly in typewriters. Technology is changing so rapidly, and an over-zealous regulatory mechanism is more likely to damage and hold back innovation than advance it.
Think of the names that have come and gone over the past few years. Who now has a BlackBerry? We once again think of blackberries as a fruit, rather than a mechanism for communicating. Or a Nokia telephone? In the 1980s, Nokia made Wellington boots. It is probably now back to making them, as its telephone has come and gone and been overtaken. That is the thing about the sector that we are looking to regulate: there is competition in it. It is not necessarily a competition for market share at any one time; it is a competition of technology that is evolving faster than people are able to deal with it.
There is in the Bill a touching faith in the competence of regulators, which I do not share. The CMA, to which we are about to give significant powers, has made a fool of itself this year—and not just a little. It has been made a global laughing stock by its Microsoft Activision Blizzard ruling, in which it blundered. It got it wrong; all the other regulators in the world did something else, and the CMA had to back down. The story was—this is quite important—that the CMA was doing the work of the FTC, but the FTC had to meet a higher legal standard and therefore encouraged the CMA to make the bid more difficult, because it thought that the UK law would be easier to work around than US law. That is why the amendments on the judicial review standard are so important. I would be in favour of a full merit standard. I think it is very peculiar that the Opposition, who are always happy to go to court to obstruct the Government at any opportunity—to obstruct the Government in carrying out the will of the British people, or to obstruct the Government when decisions are made by accountable Ministers—want unaccountable, unelected bureaucrats to have arbitrary power, which I do not want them to have. I want them to be able to operate according to merits.
Sarah Olney (Richmond Park) (LD)
The Liberal Democrats welcome many aspects of this Bill. We are pleased that the Government are finally acting on the Competition and Markets Authority’s recommendations in bringing forward measures to prevent the tech giants from putting our digital sector in a stranglehold. We want to see a thriving British tech sector in which start-ups can innovate, create good jobs and launch innovative products that will benefit consumers. A strong competition framework that pushes back on the tech giants’ dominance is essential for that.
For too long a small number of big tech firms have been allowed to dominate the market, while smaller, dynamic start-up companies are too often driven out of the market or swallowed up by the tech giants. New rules designed by the CMA will ensure that these large companies will have to refrain from some of their unfair practices, and they give the regulator a power to ensure that the market is open to smaller challenger companies. The Liberal Democrats are pleased to see changes to the competition framework, which will allow the CMA to investigate the takeover of small but promising start-ups that do not meet the usual merger control thresholds. This change is particularly important for sectors such as artificial intelligence and virtual reality while they are in their infancy. The benefits of these changes will filter down to the end users, the consumers, in the form of more choice over products and services, better prices and more innovative start-ups coming to the fore.
While we are glad that most of the CMA’s recommendations are in this Bill, we have concerns about certain aspects, such as the forward-looking designation of SMS firms and the definition of countervailing benefits that SMS firms are able to claim. The countervailing benefits exemption allows the CMA to close an investigation into a conduct breach if an SMS firm can demonstrate that its anti-competitive practices produce benefits for users that outweigh the harms. There is some concern that big tech may seek to exploit this exemption to evade compliance with conduct requirements and continue with unfair, anti-competitive practices. It could also create scope for tech firms to inundate the CMA with an excessive number of claims of countervailing benefits, diverting the CMA’s limited resources away from essential tasks. Amendment 209, tabled in my name, seeks to strengthen the Bill and to curtail the power of large tech firms to evade compliance by tightening the definition in the Bill of what kind of benefits are valid.
The Liberal Democrats also have concerns about several of the Government amendments, particularly those relating to the appeals standard, as they risk watering down some of the CMA’s most powerful tools. There is now a real danger that powerful incumbents will use their vast resources to bog down and delay the process, leaving smaller competitors at a disadvantage. These amendments show that the Government are taking the side of these established firms at the expense of smaller, growing firms, and at the expense of economic growth and innovation as a whole.
The Liberal Democrats are keen to ensure that big tech is prevented from putting the British tech sector in a stranglehold. We hope that the Government will be robust on the defensive measures in the Bill. It is important that they reject any attempt to water down or weaken this Bill with loopholes, and that they ensure there is no ambiguity that could be exploited. Although competition is crucial for Britain’s tech sector, we hope the Government also move to tackle some of the fundamental issues holding it back, such as the skills gap, the shortage of skilled workers and weak investment.
Saqib Bhatti
With the leave of the House, I would like to address some of the points that have been made today.
I am grateful to Members across the House for their contributions to this debate and, of course, throughout the development of this legislation. I am similarly grateful for the cross-party support commanded by the digital markets measures. Members will find that I agree with points raised on both sides of the House, and I am confident that this Bill addresses those points.
I thank the hon. Member for Pontypridd (Alex Davies-Jones) for kindly welcoming me to the Treasury Bench, for her amendments and for her commitment to getting this legislation right. She asked about the countervailing benefits exemption, and I reassure her that the wording change maintains the same high threshold. SMS firms must still prove that there is no other reasonable, practical way to achieve the same benefits for consumers with less anti-competitive effect. This makes sure consumers get the best outcomes, whether through the benefits provided or through more competitive markets.
The hon. Lady also asked about appeals, and it is important that decisions made by the CMA can be properly and appropriately reviewed to ensure that they are fair, rigorous and evidence-based. We have considered strong and differing views about appeals from a range of stakeholders, and judicial review principles are the appropriate standard for the majority of decisions under the regime, as we have maintained with the additional clarification on the DMU’s requirement to act proportionately. We have, however, aligned the appeal of penalty decisions with appeals under the Enterprise Act 2002, so that parties can challenge these decisions on their merits to ensure that the value of a penalty is suitable. Penalty decisions have less direct impact on third parties, and the amendment will provide additional reassurance without affecting the regime’s effectiveness.
The significant changes we are making will provide more clarity and assurance to firms on the need for the DMU to act proportionately. They also bring the regime in line with the relevant CMA precedent. Parties will have greater scope to challenge whether the interventions imposed on them are proportionate or could have been achieved in a less burdensome way. When financial penalties are imposed, parties will have access to a full merits review to provide reassurance that the value of the fine is appropriate.
The hon. Lady also asked about the implementation of guidance, and I can assure her that we are working at pace to ensure the regime is operational as soon as possible after Royal Assent. Guidance must be in place for the regime to go live, and the Government will be working with the CMA to ensure timely implementation. The Secretary of State will, of course, review all guidance for all future iterations.
The hon. Lady also talked about amendments 187 and 188, which seek to replace the countervailing benefits exemption with a power for the CMA to consider benefits to users before finding a breach of a conduct requirement. The exemption will ensure that there is a rigorous process to secure the best outcomes for consumers, and removing it would jeopardise clear regulatory expectations and predictable outcomes. In turn, this would make it more likely that consumers lose out on the innovations developed by SMS firms, such as privacy or security benefits. Government amendments 13 and 14 clarify the exemption while, crucially, maintaining the same high threshold and clear process.
The hon. Lady also mentioned amendments 194 and 196, and the Government agree that it is important that the DMU’s regulatory decisions are transparent and that the right information is available to the public. We understand that these amendments would require the DMU to send decision notices to third parties that it assesses to be most affected by those decisions. However, under the current drafting, the DMU is already required to publish the summaries of key decisions. Requiring the DMU to identify appropriate third parties and send them notices would introduce a significant burden on the DMU, to limited benefit, and I argue that it would undermine the flexibility and quick pace that we expect from the DMU. We believe the current drafting strikes the right balance, providing transparency and public accountability on DMU decisions.
Sir Robert Buckland
I warmly welcome my hon. Friend to his place, as this is my first chance to do so. Are we now to understand that, with regard to the judicial review standard, proportionality will, in effect, be built in, and that we are going beyond the principles of plain, vanilla JR into the more widely understood term? Am I right?
Saqib Bhatti
I suggest that I write to my right hon. and learned Friend, and to all right hon. and hon. Members who have raised the important question of proportionality, to clarify the position. We want this legislation to have clarity for consumers and certainty for businesses because, as my right hon. Friend the Member for North East Somerset (Sir Jacob Rees-Mogg) said, this is an ever-changing market, so it is essential that we have clarity and certainty.
Sir Robert Buckland
The point about proportionality extends into clause 29, where the Government have now removed the indispensability test, leaving bare proportionality. My amendment asks for a necessity test. What assessment has my hon. Friend made of the removal of “indispensability”? Does he still think that the threshold for countervailing benefit will be sufficiently high to ensure that the CMA does not disapply or discontinue investigations inappropriately?
Saqib Bhatti
That is an important point, and I appreciate my right hon. and learned Friend giving me the opportunity to clarify it. I want to be unequivocal that, from my perspective, the threshold is still high and we have provided clarify. If he requires even further clarity, I am happy to write to him to be completely clear.
Damian Collins
I am grateful for what my hon. Friend has said so far about the application of the proportionality test, but if he is to follow up with Members in writing with some clarity, can he set out what he believes the grounds for challenge would be on the basis of proportionality? The interventions that the CMA may make and the rulings it may give are at the end of quite a lengthy process of market analysis, demonstration of abuse of market power and breach of conduct requirements. If those are challenged routinely and at a late stage, on the basis that there are grounds to say that it is disproportionate, it could have the unintended consequence of delaying systems in a way that they should not be delayed.
Saqib Bhatti
If I heard my hon. Friend correctly, he wanted a letter on that. This legislation is designed to make sure that it is not for big companies to litigate heavily to stifle the smaller challengers from coming out and becoming the big companies and employers of tomorrow. Let me write to him to clarify the point further.
My right hon. and learned Friend the Member for South Swindon has spoken about accountability in my numerous conversations with him over the past few days, and again today. I take his point. He will know that I want independent, versatile, flexible and adaptable regulators. That is only right for an ever-changing digital market that is always innovating and changing the way it operates. We do not know the unicorns of tomorrow or the benefits that we can get from consumers. The Competition and Markets Authority and the DMU have a responsibility to be accountable, to maintain that flexibility and to have adaptability to new technology and new entrants in the market. As I am sure he knows and respects, that is why independent regulators are a central part of our internationally recognised business environment. We should not forget that point.
I take the points about overreach by regulators, but they are a core part of what international partners and investors look at when it comes to the competition regime, because they know that will be innovative and will encourage further innovation in technology. The CMA is operationally independent from Government, and Government will not intervene in its regulatory decisions. The DMU will have discretion in how it designs its interventions under the regime. That discretion is matched with robust accountability, from initial decision making to appeals.
There is a range of checks and balances throughout the regime that provide assurance. I hope that reassures my right hon. Friend. There are opportunities for Government, Parliament and stakeholders to hold the CMA to account, but I welcome his challenges and interventions on this point, because it is important. I am sure that this will be looked at again in the other place. Government should always be sensitive to those challenges. The digital markets regime will be overseen by CMA’s board, which is accountable to Parliament for all key decisions. Key decisions will be taken by a committee, of which at least half its members will offer an independent perspective. I am sure that he will welcome that because, as new technologies and innovations emerge in the market, we will need new expertise.
Damian Collins
My right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland) made the important point that the growth and expansion of regulation in digital markets is necessary but substantial. The ability of this place to keep track of how the regulators use their powers is increasingly important. That may be beyond the work of any departmental Select Committee, but instead requires something like the Public Accounts Committee, as he suggested—a separate committee whose job is to focus on and scrutinise such work. That was recommended by the House of Lords Communications and Digital Committee, and also by the Joint Committee on the Online Safety Bill. I do not expect the Minister to give us an answer right now, but if he could reflect on that need and give some guidance to the House, that would be welcome.
Saqib Bhatti
My hon. Friend makes an important point that is a matter for wider discussions on accountability. I am happy to have that discussion with him in future. As things currently stand, there are sufficient balances and checks in place, but I am always open to having further discussions with him.
Grahame Morris
Could the Minister give some clarification on my point about fair reimbursement to the journalists and publishing houses that produce original content? As the new Minister, is he prepared to meet the National Union of Journalists to hear its concerns directly?
Saqib Bhatti
If the hon. Member will be ever so patient, I will address that point, because it is important.
My right hon. and learned Friend the Member for South Swindon talked about the DMU’s ex-ante powers, which I want to address because it is an important measure. We proposed to give the DMU ex-ante powers to impose obligations on designated firms because of the characteristics of digital markets, which make them particularly fast-moving and likely to tip in favour of new, powerful winners. We do not think that approach is appropriate for firms in other markets that do not exhibit the same qualities. Even if a firm meets the turnover conditions and carries out a digital activity, the DMU will still need to find evidence that the firm has substantial and entrenched market power, as well as a position of strategic significance in the activity, to designate the firm. The DMU will prioritise the areas where there will be greatest benefits for markets and consumers, and will reflect the CMA’s strategic steer provided by the Government, which is designed to reflect the policy as intended.
Sir Jacob Rees-Mogg
I think that everyone wishes to achieve the same objective, so I do not quite understand why His Majesty’s Government do not accept the amendment of my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland), which will make that clear beyond doubt, will safeguard it and will tidy up the legislation.
Saqib Bhatti
I will address my right hon. Friend’s point. We have listened to the concerns and discussed them in great detail, but I believe the Government’s amendments strike the right balance between prioritising the benefit to the consumer while helping the digital market to remain flexible and innovative, allowing for the future tech of tomorrow to be a big challenger.
One of the great strengths of the Bill lies in the speed and flexibility of the toolkit to better equip the regulator to tackle fast-moving and dynamic digital markets. The amendments will maintain an effective, agile and robust process, and will not undermine the Digital Markets Unit’s ability to intervene in a timely and impactful way. They will ensure that the DMU’s approach is proportionate and beneficial to consumers. I hope that we have reached a good position with the Members I have spoken about, but I want to turn to the points raised by my hon. Friend the Member for Folkestone and Hythe (Damian Collins), who was ever so eloquent about the challenge that the legislation is looking to overcome and the balance that it seeks. I was greatly appreciative of his support and the challenge he has put down.
In respect of the hon. Member for Easington (Grahame Morris), the final offer mechanism, which strengthens the hand of smaller businesses when they challenge those bigger businesses, is designed with the challenges he has put forward in mind. I hope that he appreciates that we recognise the traditional business model of news media, particularly print media, which has been substantially disrupted by the growth of digital. The regime is designed to help rebalance the relationship between major platforms and those who rely on them, including news publishers. That could include creating an obligation to offer fair and reasonable payment terms for the use or acquisition of digital, including news, content. I will absolutely take up the offer to meet the NUJ and hear its concerns. I hope that this measure goes a long way towards appeasing those concerns by rebalancing the market and ensuring that firms that have strategic market significance know that they must present a much fairer deal for regional print media.
Sir Robert Buckland
Perhaps the Minister will forgive me for juxtaposing his reluctance to make things clear in primary legislation when discussing this clause and what the Government seek to do in part 4 on subscriptions. It seems to me very odd to conduct a subscription regulation mechanism by using primary legislation. There is a conflict in the logic being applied here, and I am sorry that I have to point that out to him.
Saqib Bhatti
I am sure that the Under-Secretary of State for Business and Trade, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) will appreciate the pass that I am just about to give him; I am sure that he will address that issue in his speech.
I reiterate my gratitude to the Opposition for their co-operative behaviour, which I have been informed about by my predecessor, and to right hon. and hon. Members across the House for the challenge that they have put forward today. I am grateful to Members across the House for their contributions, and I hope that they continue to work with the Government. We will continue to work with Members as the Bill progresses through Parliament to ensure that it drives innovation, grows the economy and delivers better outcomes for consumers. That is what the Government care about. We want a highly competitive market that innovates and nurtures the technology companies of tomorrow to ensure that the digital online world serves consumers. For that reason, I respectfully ask Members not to press their amendments.
Question put and agreed to.
New clause 5 accordingly read a Second time, and added to the Bill.
New Clause 6
Protected disclosures
“In the Public Interest Disclosure (Prescribed Persons) Order 2014 (S.I. 2014/2418), in the table in the Schedule, in the entry for the Competition and Markets Authority, in the right hand column, after ‘Kingdom’ insert ‘, including matters relating to Part 1 of the Digital Markets, Competition and Consumers Act 2024 (digital markets)’.”—(Saqib Bhatti.)
This new clause (which would be inserted into Chapter 8 of Part 1 of the Bill) confirms that matters relating to Part 1 of the Bill (digital markets) are covered by the entry for the Competition and Markets Authority in the Public Interest Disclosure (Prescribed Persons) Order 2014.
Brought up, read the First and Second time, and added to the Bill.
Clause 15
Notice requirements: decisions to designate
Amendments made: 2, in clause 15, page 8, line 34, leave out from “that” to the end of line 35 and insert
“the undertaking or digital activity, as the case may be, remain substantially the same”.
This amendment clarifies how the CMA may revise its view of an undertaking or digital activity by issuing a revised SMS decision notice.
Amendment 3, in clause 15, page 8, line 37, leave out from “not” to the end of line 38 and insert
“affect—
‘(a) the day on which the designation period in relation to that designation begins, or
(b) anything done under this Part in relation to that undertaking.”—(Saqib Bhatti.)
This amendment confirms that giving a revised SMS decision notice does not affect anything done under this Part in relation to a designated undertaking.
Clause 17
Existing obligations
Amendments made: 4, in clause 17, page 9, line 23, at end insert—
“(2A) In Chapters 6 (investigatory powers and compliance reports) and 7 (enforcement and appeals), references to a ‘designated undertaking’ are to be read as including an undertaking to which an existing obligation applies by virtue of provision made in reliance on subsection (1).”
This amendment provides that references in Chapters 6 and 7 to a designated undertaking include an undertaking to which an obligation applies by virtue of provision made in reliance on clause 17(1).
Amendment 5, in clause 17, page 9, line 37, at end insert—
“(ba) commitment (see sections 36 and 55);”.—(Saqib Bhatti.)
This amendment provides for the CMA to be able to apply an existing commitment, with or without modifications, in respect of certain new designations or to make transitional, transitory or saving provision in respect of a commitment when it would otherwise cease to have effect.
Clause 19
Power to impose conduct requirements
Amendments made: 6, in clause 19, page 10, line 30, leave out from “requirement” to the end of line 35 and insert
“or a combination of conduct requirements on a designated undertaking if it considers that it would be proportionate to do so for the purposes of one or more of the following objectives—
(a) the fair dealing objective,
(b) the open choices objective, and
(c) the trust and transparency objective,
having regard to what the conduct requirement or combination of conduct requirements is intended to achieve.”
This amendment provides that the CMA may only impose a conduct requirement or combination of requirements if it considers that it would be proportionate to do so, having regard to what the requirement or combination is intended to achieve.
Amendment 7, in clause 19, page 11, line 15, at end insert—
“(9A) Before imposing a conduct requirement or a combination of conduct requirements on a designated undertaking, the CMA must have regard in particular to the benefits for consumers that the CMA considers would likely result (directly or indirectly) from the conduct requirement or combination of conduct requirements.”—(Saqib Bhatti.)
This amendment provides that the CMA must consider the likely benefits for consumers when imposing a conduct requirement or combination of conduct requirements.
Clause 20
Permitted types of conduct requirement
Amendment made: 8, in clause 20, page 12, line 9, leave out from “to” to “in” on line 10 and insert
“materially increase the undertaking’s market power, or materially strengthen its position of strategic significance,”.—(Saqib Bhatti.)
This amendment clarifies that a conduct requirement is permitted if it is for the purpose of preventing an undertaking from carrying on activities other than the relevant digital activity in a way that is likely to materially strengthen its position of strategic significance in relation to the relevant digital activity.
Clause 21
Content of notice imposing a conduct requirement
Amendments made: 9, in clause 21, page 12, line 28, after “requirement” insert
“or, as the case may be, each conduct requirement as varied,”.
This amendment clarifies how the notice requirements in clause 21 apply in relation to the variation of a conduct requirement.
Amendment 10, in clause 21, page 12, line 31, leave out paragraphs (b) and (c) and insert—
“(b) the CMA’s reasons for imposing the conduct requirement, including—
(i) the objective for the purposes of which the CMA considers it is proportionate to impose the conduct requirement (see section 19),
(ii) the benefits that the CMA considers would likely result from the conduct requirement (see section 19(9A)), and
(iii) the permitted type of requirement to which the CMA considers the conduct requirement belongs (see section 20);”.—(Saqib Bhatti.)
This amendment requires the CMA to give reasons for imposing conduct requirements on a designated undertaking. Sub-paragraph (ii) is consequential on Amendment 7.
Clause 26
Power to begin a conduct investigation
Amendments made: 11, in clause 26, page 14, line 11, leave out “a designated” and insert “an”.
This amendment, together with Amendments 12, 16, 29, 37, 38, 40, 42, 43 and 65, ensures that enforcement action can be taken in respect of an undertaking that has ceased to be a designated undertaking in relation to its conduct while it was a designated undertaking.
Amendment 12, in clause 26, page 14, line 18, leave out “designated”.—(Saqib Bhatti.)
See the explanatory statement for Amendment 11.
Clause 27
Consideration of representations
Amendment proposed: 187, in clause 27, page 15, line 8, at end insert—
“(2) The CMA may have regard to any significant benefits to users or potential users that the CMA considers have resulted, or may be expected to result, from a factor or combination of factors resulting from a breach of a conduct requirement.”—(Alex Davies-Jones.)
This amendment would ensure that the CMA considers any significant benefits to users resulting from the breach of a Conduct Requirement when it is considering representations from designated undertakings as part of a Conduct Investigation.
Question put, That the amendment be made.
The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)
I beg to move, That the clause be read a Second time.
Mr Deputy Speaker (Sir Roger Gale)
With this it will be convenient to discuss the following:
Government new clause 8—Use of damages-based agreements in opt-out collective proceedings.
Government new clause 9—Mergers of energy network enterprises.
Government new clause 10—Power to make a reference after previously deciding not to do so.
Government new clause 11—Taking action in relation to regulated markets.
Government new clause 12—Meaning of “working day” in Parts 3 and 4 of EA 2002.
Government new clause 13—ADR fees regulations.
Government new clause 14—Power to require information about competition in connection with motor fuel.
Government new clause 15—Penalties for failure to comply with notices under section (Power to require information about competition in connection with motor fuel.
Government new clause 16—Procedure and appeals.
Government new clause 17—Statement of policy on penalties.
Government new clause 18—Offences etc.
Government new clause 19—Penalties under section (Penalties for failure to comply with notices under section (Power to require information about competition in connection with motor fuel)) and offences under section (Offences etc).
Government new clause 20—Information sharing.
Government new clause 21—Expiry of this Chapter.
Government new clause 22—Removal of limit on the tenure of a chair of the Competition Appeal Tribunal.
New clause 1—Meaning of “payment account” and related terms—
“(1) ‘Payment account’ means an account held in the name of one or more consumers through which consumers are able to—
(a) place funds;
(b) withdraw cash; and
(c) execute and receive payment transactions to and from third parties, including over any designated payment system.
(2) ‘Payment account’ also includes the following types of account—
(a) savings accounts;
(b) credit card accounts;
(c) current account mortgages; and
(d) e-money accounts.
(3) ‘Designated payment system’ has the same meaning as within the Financial Services (Banking Reform) Act 2013.
(4) ‘Relevant institution’ means—
(a) any bank which has permission under Part 4A of the Financial Services and Markets Act 2000 to carry out the regulated activity of accepting deposits (within the meaning of section 22 of that Act, taken with Schedule 2 and any order under section 22);
(b) any building society within the meaning of section 119 of the Building Societies Act 1986;
(c) any credit institution within the meaning of the Payment Services Regulations 2017;
(d) any authorised payment institution within the meaning of the Payment Service Regulations 2017; and
(e) any small payment institution within the meaning of the Payment Services Regulations 2017.
(5) ‘Discriminate’ means that a relevant institution acts in a way which, were that relevant institution a public authority, would constitute a breach of its obligations under section 6(1) of the Human Rights Act 1998, in so far as those obligations relate to—
(a) Article 8 of the European Convention on Human Rights;
(b) Article 9 of the European Convention on Human Rights;
(c) Article 10 of the European Convention on Human Rights;
(d) Article 11 of the European Convention of Human Rights; and
(e) any of the Articles listed in paragraphs (a) to (d) when read with Article 14 of the European Convention on Human Rights.”
This new clause defines relevant terms for the purposes of NC2.
New clause 2—Rights of consumers in relation to payment accounts—
“(1) A relevant institution must not discriminate against a consumer when deciding—
(a) whether to offer a consumer a payment account;
(b) whether to alter, or vary in any way, the terms of an existing payment account in use by a consumer; or
(c) whether to terminate or otherwise restrict a consumer’s access to their payment account.
(2) A relevant institution, within 30 days of deciding to alter, vary, terminate, or otherwise restrict a consumer’s access to their payment account, or deciding not to offer a consumer a payment account, must provide the consumer with a written statement of reasons explaining their decision.
(3) A written statement of reasons under subsection (2) must clearly specify—
(a) the basis upon which such a decision was taken, including reference to any terms and conditions within the consumer’s contract upon which the relevant institution relies, or reference to any legal obligations placed upon the relevant institution;
(b) all evidence taken into account by the relevant institution in reaching its decision; and
(c) any other matters that had bearing on the relevant institution’s decision.”
This new clause would place a duty on banks, building societies and similar institutions not to discriminate against consumers when offering retail banking services.
New clause 3—Rights of redress—
“Where a relevant institution has acted in breach of its obligations under section [Rights of consumers in relation to payment accounts] (1), the consumer shall have a right to damages in respect of any—
(a) financial loss;
(b) emotional distress; and
(c) physical inconvenience and discomfort.”
This new clause would give consumers a right to redress if discriminated against under NC2.
New clause 4—Enforcement of rights of redress—
“(1) A consumer with a right to damages by virtue of section [Rights of redress](1) may bring a claim in civil proceedings to enforce that right.
(2) The Limitation Act 1980 applies to a claim under this section in England and Wales as if it were an action founded on simple contract.
(3) The Limitation (Northern Ireland) Order 1989 (S.I. 1989/1339 (N.I. 11)) applies to a claim under this section in Northern Ireland as if it were an action founded on simple contract.”
This new clause makes provision for the enforcement of redress under NC3.
New clause 24—Review of Competition Appeal Tribunal—
“(1) The Secretary of State must, as soon the Secretary of State considers reasonable practicable after this Act has been passed, commission a review of all processes involving the Competition Appeal Tribunal.
(2) The Secretary of State must ensure that the review is conducted independently of the Digital Markets Unit and the CMA.
(3) The Secretary of State must lay a report of the review before Parliament.”
This new clause would require the Secretary of State to commission an independent review of the Competition Appeals Tribunal processes.
New clause 25—Duty to treat consumer interests as paramount—
“(1) In applying the provisions of this Act, the CMA and the Courts have an overriding duty to treat consumer interests as paramount.
(2) The duty set out in subsection (1) includes a duty to—
(a) address consumer detriment, including the protection of vulnerable consumers;
(b) expedite investigations that give rise to consumer detriment; and
(c) narrow points of challenge in appeals to CMA decisions that engage consumer detriment.”
This new clause would impose a duty on the CMA and the Courts to treat consumer issues as paramount.
New clause 26—Proceedings before the Tribunal: claim for damages—
“(1) The Competition Act 1998 is amended as follows.
(2) In section 47A, after subsection (2)(b) insert—
“(c) Part 4 of the Digital Markets Act 2023””
This new clause would allow claims for damages in respect of infringements of the provisions of Part 4 of this Bill.
New clause 29—Contract renewal: option to opt in—
“(1) Before a trader enters into a subscription contract with a consumer where section 247(2) applies, the trader must ask the consumer whether they wish to opt-in to an arrangement under which the contract renews automatically at one or more of the following times—
(a) after a period of six months and every six months thereafter, or
(b) if the period between the consumer being charged for the first and second time is longer than six months, each time payment is due.
(2) If the consumer does not opt-in to such an arrangement, the trader must provide a date by which the consumer must notify the trader of the consumer’s intention to renew the contract, which must be no earlier than 28 days before the renewal date.
(3) If the consumer has not—
(a) opted into an arrangement under subsection (1), or
(b) given notification of the consumer’s intention to renew by the date specified under subsection (2),
the contract will lapse on the renewal date.”
This new clause would allow the consumer to opt-out of their subscription auto-renewing every six months, or if the period between payments is longer than six months, before every payment. If the consumer does not opt-in to auto-renewal, they would be required to notify the trader manually about renewing.
New clause 30—Contract renewal: variable rate contracts—
“(1) Before a trader enters into a subscription contract with a consumer where section 247(3) applies, the trader must ask the consumer whether they wish to opt into an arrangement under which the contract renews automatically on the date the consumer becomes liable for the first charge or the first higher charge.
(2) If the consumer does not opt into an arrangement under subsection (1), the trader must provide a date by which the consumer must notify the trader of the consumer’s intention to renew the contract, which must be no earlier than five days before the renewal date.
(3) The trader must also ask the consumer whether they wish to opt into an arrangement under which the contract renews automatically—
(a) after a period of either six months from the first charge or higher charge and every six months thereafter, or
(b) if the period between the consumer being charged for the first and second time is longer than six months, each time payment is due.
(4) If the consumer does not opt into an arrangement under subsection (3), the trader must provide a date by which the consumer must notify the trader of the consumer’s intention to renew the contract, which must be no earlier than 28 days before the renewal date.
(5) If the consumer has not—
(a) opted into an arrangement under subsection (1) or subsection (3), or
(b) given notification of the consumer’s intention to renew by the date specified under (as the case may be) subsection (2) or subsection (4),
the contract will lapse on the next renewal date.”
This new clause would introduce an option for the consumer to opt-out of their subscription auto-renewing after their free or discounted trial. Otherwise, they would have to notify the trader manually about the subscription continuing. It also introduces an option for the consumer to opt-out of their subscription auto-renewing.
New clause 31—Regulatory burdens arising from competition and consumer regulation—
“(1) The CMA must, at least once a year, publish a report setting out its assessment of the economic cost of regulatory burdens that have been created and removed over the previous year through the exercise by public bodies of—
(a) competition and consumer powers; and
(b) the following activities, as far as they relate to competition and consumer matters—
(i) the imposition of conduct requirements;
(ii) dispute resolution and public enforcement activities;
(iii) the monitoring of undertakings, and
(iv) the issuing of regulatory orders.
(2) The Secretary of State must ensure that public bodies provide the CMA with information the CMA considers is necessary for completion of the report.
(3) The Secretary of State must ensure that the net economic cost of regulatory burdens set out in the report is zero or less in every year.
(4) In this section a “regulatory burden” means a burden as defined in section 1(3) of the Legislative and Regulatory Reform Act 2006.”
This new clause places on Ministers a permanent duty to ensure that the net economic cost of burdens from competition and consumer regulation is zero or less each year.
Government amendment 69.
Amendment 207, in clause 141, page 89, line 13, at end insert—
“(c) the collective interests of consumers include avoiding any detriment that might be incurred by consumers if the United Kingdom does not reach a level of net zero carbon emissions by 2030.”
This amendment would mean that part of the test of whether a commercial practice had committed an infringement would be whether the commercial practice had failed to protect consumers from any detrimental effects arising from a failure to achieve net zero by 2030.
Government amendments 70 to 79, 81, 82 and 85.
Amendment 226, in clause 224, page 150, line 27, at end insert—
“(4A) Where a commercial practice has been found to be unfair under paragraph 32 of Schedule 18 of this Act, any body listed as a public designated enforcer in section 144(1) of this Act may require the removal of the relevant online marketing from the internet.”
This amendment allows enforcement bodies to remove the marketing of fake or counterfeit products from the internet.
Amendment 208, page 150, line 29, at end insert—
“(6) An established means used to encourage control of unfair commercial practices must include the following measures—
(a) investigation and determination on a timely basis—
(i) in accordance with a pre-determined process which has been published on the internet,
(ii) by people who are independent of any organisation undertaking commercial practices, and
(iii) with the outcome of any decision published.
(b) the appointment of a board to oversee the investigation and determination process, with the majority of the members of the board independent of any organisation undertaking commercial practices;
(c) provision for the suspension of a commercial practice during an investigation and prior to a determination being made;
(d) provision for guidance to be issued, by the CMA, the relevant weights and measures authority or, if the established means is an organisation, the established means itself, about the lawfulness of a commercial practice;
(e) publication of statistical and other information about the operation of, and compliance with, the established means to enable the CMA or weights and measures authority in question to assess on an annual basis the continuing appropriateness of using the established means.”
This amendment sets out conditions, including in relation to independence and transparency, for the means by which the control of unfair commercial practices will be encouraged.
Government amendments 86 to 93.
Amendment 210, in clause 251, page 166, line 24, leave out “six” and insert “twelve”.
This amendment would provide for traders to have to issue reminder notices to consumers about ongoing subscription contracts only every twelve months, rather than every six.
Amendment 211, page 166, line 36, leave out subsection (5) and insert—
“(5) The Secretary of State may, by regulations, make reasonable provision for the content and timing of reminder notices.”
This amendment, together with Amendments 212 and 213, would remove the detailed provision about the content and timing of reminder notices from the face of the Bill and instead give the Secretary of State the power to make such provision by regulation.
Government amendment 94.
Amendment 212, page 167, line 1, leave out Clause 252.
See explanatory statement to Amendment 211.
Government amendments 95 to 98.
Amendment 214, in clause 253, page 168, line 7, leave out “in a single communication” and insert
“in a manner that is straightforward, timely and does not impose unreasonable cost on a consumer”.
This amendment, together with Amendments 215 to 218, would remove from the Bill the existing detailed provisions for ending a subscription contract, intending that they should be covered by provision made in secondary legislation under the provisions of clause 270(1)(c), and instead set principles for how a contract may be ended.
Amendment 215, page 168, line 10, leave out subsection (2).
See explanatory statement to Amendment 214.
Amendment 216, page 168, line 15, leave out subsection (4).
See explanatory statement to Amendment 214.
Amendment 217, page 168, line 23, leave out subsection (6).
See explanatory statement to Amendment 214.
Amendment 218, in clause 254, page 168, line 37, leave out subsections (3) to (5).
See explanatory statement to Amendment 214.
Government amendments 99 and 100.
Amendment 219, page 170, line 25, leave out clause 257.
This amendment, together with Amendments 220 to 222, would remove the provision for a mandatory cooling-off period for a subscription contract.
Amendment 220, page 171, line 19, leave out clause 258.
See explanatory statement to Amendment 219.
Amendment 221, page 172, line 18, leave out clause 259.
See explanatory statement to Amendment 219.
Government amendments 101 to 103.
Amendment 222, in clause 272, page 180, line 25, leave out subsection (5).
See explanatory statement to Amendment 219.
Government amendments 104, 105, 107, 109, 110, 112 to 147 and 150 to 152.
Amendment 223, in clause 317, page 221, line 35 leave out “subsection (2)” and insert “subsections (2) and (2B)”.
This amendment and Amendment 224 would provide for an implementation period of two years before the provision in the Bill relating to subscription contracts comes into force.
Government amendments 153 and 154.
Amendment 224, page 222, line 6, at end insert—
“(2B) Chapter 2 of Part 4 comes into force two years after the day on which this Act is passed.”
See explanatory statement to Amendment 223.
Government new schedule 1—Mergers of energy network enterprises.
Government amendments 155 to 163.
Amendment 225, in schedule 18, page 343, line 42, at end insert—
“32 At any stage of a purchase process, presenting a price for a product which omits obligatory charges or fees (or an estimate thereof) which are payable by the majority of consumers, which are not revealed to the consumer until later in the purchase process.”
This amendment adds the practice of “drip-pricing”, a pricing technique in which traders advertise only part of a product’s price and reveal other obligatory charges later as the customer goes through the buying process, to the list of unfair commercial practices.
Amendment 227, page 343, line 42, at end insert—
“32 Marketing online products that are either—
(a) counterfeit; or
(b) dangerous.”
This amendment would add marketing counterfeit and dangerous online products to the list of banned practices.
Government amendments 164 to 170.
Amendment 228, in schedule 19, page 350, line 30, at end insert—
“Non-commercial society lotteries
13 (1) A contract under which a lottery ticket or tickets are purchased for one or more non-commercial society lotteries.
(2) In sub-paragraph (1), “non-commercial society” has the meaning given by section 19 of the Gambling Act 2005, and “lottery ticket” has the meaning given by section 253 of that Act.”
This amendment seeks to exclude lottery tickets purchased for non-commercial society lotteries from the scope of the provisions on subscription contracts.
Government amendment 171.
Amendment 213, in schedule 20, page 354, line 19, leave out paragraphs 28 to 38.
See explanatory statement to Amendment 211.
Government amendments 172 to 175.
Kevin Hollinrake
May I first echo the remarks about the excellent address by the Under-Secretary of State for Science, Innovation and Technology, my hon. Friend the Member for Meriden (Saqib Bhatti)? I welcome him to his place—he did a fine job on his first outing in such a complex debate.
I, too, am delighted to bring the Digital Markets, Competition and Consumers Bill to the House on Report. May I express my gratitude to colleagues across the House for their contributions to Second Reading and Committee stages, and for their continued engagement throughout its passage? I thank in particular the hon. Members for Pontypridd (Alex Davies-Jones) and for Feltham and Heston (Seema Malhotra) for their constructive engagement and commitment to seeing the Bill delivered quickly so that its benefits can be realised. I also thank my hon. Friend the Member for Weston-super-Mare (John Penrose) for his excellent engagement—over the weekend in particular—and my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland) for his many important and relevant amendments.
The reforms to the competition and consumer regimes contained in parts 2 to 5 of the Bill will grow the economy and deliver better outcomes for consumers and bona fide businesses. Consumers will have more choice and protection, and pay lower prices. Businesses will operate on a fairer and more level playing field. The reforms will do that by enhancing the wider competition regime, strengthening the enforcement of consumer protection law, and putting in place new consumer rights and more transparency.
It is a simple fact that the way in which we buy products and services today very often involves a digital process. The opportunities that follow are vast—more accessibility, flexibility and choice for consumers—but there is also a greater risk of consumer harm, including, for example, consumers being trapped in a subscription contract that they no longer want or purchasing goods that may not be up to scratch because they unknowingly relied on a fake review. We must ensure that consumers and their cash are protected.
Swifter interventions to tackle bad business practices against consumers are expected to deliver a consumer benefit of £9.7 billion over 10 years, as UK consumers benefit from new rights, stronger law enforcement and more competition through merger control. Importantly, the reforms will also grow the economy by boosting competition, better placing the UK to succeed in export markets. It will allow the Competition and Markets Authority to more effectively deter, prevent, and, where necessary, enforce against monopolistic behaviours. That will ensure that the free market can operate effectively.
The Government amendments to parts 2 to 5 of the Bill will provide greater clarity, ensure coherence with related legislation, and make sure the Bill’s measures meet their intended aims. Almost all the amendments are technical in nature. I will address them across four categories: competition, consumer enforcement, consumer rights and cross-cutting provisions.
First, the competition measures in the Bill will give the CMA new powers to enable it to tackle anti-competitive activity swiftly and effectively, meaning that it can focus its work on the areas of greatest potential harm. The competition environment is complex and ever evolving. We must respond carefully but decisively to changes in the judicial and legislative landscape to provide certainty and to avoid any unintended detrimental consequences of wider developments.
New clause 8 amends the Competition Act 1998 so that the absolute bar on damages-based agreements being relied on in opt-out collective actions will not apply to third-party litigation funding agreements, which are the main source of funding for that type of action. That responds to a recent Supreme Court judgment, and effectively restores the previously held understanding of the status of litigation funding agreements under the 1998 Act. Accordingly, it will have retrospective effect.
In response to a recent Competition Appeal Tribunal judgment, we are specifying the circumstances in which a market investigation reference may be made in relation to an area that has already been the subject of a market study but was not referred for further investigation at that time. We are also bringing forward a series of amendments to ensure alignment between this Bill and the Energy Act 2023, which introduced the energy network merger regime, and to make minor corrections to provisions relating to that regime. Separately, we are repealing paragraph 8 of schedule 3 to the 1998 Act to remove a redundant reference to the treaty establishing the European Coal and Steel Community. To ensure that the implementation trials for market remedies introduced by the Bill are as effective as possible, we are introducing new powers for the Secretary of State to extend the scope of implementation trials in the markets regime to include regulatory conditions.
I will now address the new direct consumer enforcement model. That model will enable the CMA to act faster and take on more consumer cases on behalf of the public, resulting in a further estimated direct benefit to consumers of tens, or potentially hundreds, of millions of pounds. The Government have tabled a series of technical amendments to increase certainty in respect of the CMA’s operational duties. They include aligning the definition of “business” in part 3 of the Bill with that in part 4 of chapter 1 to ensure that any breaches of unfair trading prohibitions can be enforced through the regime; and making provision about information-sharing between public authorities so that enforcers can obtain the information that they need to take enforcement action under part 3 of the Bill.
On appeals, we are adding a requirement for the CMA to include information about applicable appeal rights in a final breach-of-directions enforcement notice, as well as empowering the appeal court to send issues back to the CMA for decision on certain notices. We are also empowering the Secretary of State to update through regulations the specified maximum amounts for fixed and daily penalties imposable by a court or the CMA when a business breaches a formal information request.
Moving on to consumer rights—I am sure this will interest many Members across the House—the purpose of the Bill is simple: to empower consumers to get the deal that is right for them, and to increase their confidence in the products they buy and the services they use. The new rights on subscription traps will give consumers more control over their spending. Such traps have been the subject of some debate during the passage of the Bill, and the Government are introducing amendments to remove unintended consequences.
Edward Timpson (Eddisbury) (Con)
I welcome the introduction of consumer rights on subscriptions, which have become a real minefield for many people of all ages. Why do the Government feel it necessary to have this provision in the Bill and in primary legislation, when if it was in secondary legislation it could have more flexibility with changing circumstances?
Kevin Hollinrake
We think it is a sufficiently important issue and something we consulted on previously. We have a good idea of the kind of measures we would like to put in place, and we are adding more flexibility—my hon. Friend will have seen some of the Government amendments that have been tabled in response to concerns raised by Members of the House, including my right hon. and learned Friend the Member for South Swindon. We want that flexibility, yet we want to move on quickly with this important reform. There is about £1.6 billion of potential benefit to consumers through this Bill.
Jim Shannon (Strangford) (DUP)
I commend the Minister who is putting forward ideas that I, and perhaps my party, feel we can subscribe to and support. I always ask this question, because I think it is important that the general public have an access point if they have a question on something to do with consumer rights. Do the Government intend to ensure that there is some methodology—a phone call, an email address or contact person—who the public can contact if they have a question?
Kevin Hollinrake
Our position is that we do not intervene in the practices of businesses unless there is a necessity to do so. We leave those channels open for decisions by businesses in the services that they offer to consumers, rather than dictating to them how they should communicate with their consumers. It is absolutely right that those channels are open and freely available. One important thing we are doing in the Bill is making it much easier to terminate a contract. A person should be able to end a contract as easily as they enter into it, and that is an important part of the Bill.
The Government are bringing forward a series of amendments that remove the requirement for businesses that offer subscription contracts to send a reminder notice ahead of the first renewal notice in instances where there is no free trial. For businesses that offer those contract types, the amendments will see their regulatory burden decrease as they will be required to send only two reminder notices per year instead of three. That also ensures that consumers do not receive too many notices at the start of their contract. The requirement to send a reminder notice before a free or low-cost trial rolls over to a full contract will remain in place.
In addition, we are creating a new power for the Secretary of State to disapply or modify reminder notice requirements in respect of particular entities or contracts, and amend the timeframes in which a business must send a reminder notice to a consumer. The amendments provide greater flexibility and clarity on when reminder notices should be sent, allowing for adaptability post implementation. A further amendment clarifies that, in the event of a dispute about the cancellation of a contract, the onus is on the consumer to prove that the method in which they sent a notification to cancel their subscription contract was sufficiently clear. That intends to rectify the concern that businesses will be subject to enforcement action if a consumer attempts to cancel their subscription contract through unconventional means, for example through a tweet.
I thank my right hon. Friend the Member for Calder Valley (Craig Whittaker) and the hon. Member for Gordon (Richard Thomson) for their continued engagement on Second Reading and in Committee on the issue of whether society lotteries are captured under the subscription measures. As I said in Committee, it is certainly not our intention to capture those contracts. We are therefore introducing an amendment to clarify that gambling contracts, which are already regulated under gambling laws, are excluded from the scope of the subscription contract measures. I trust that that amendment will offer them, and those in the industry, clarity on the matter.
Let me turn to a series of technical Government amendments in relation to protections for consumer savings schemes. Such schemes involve making deposits to save towards a specified event such as Christmas or back-to-school shopping, and they are a vital means for British families to budget for those big occasions. The Bill is not designed to capture routine advance payments for services. In order to avoid possible uncertainty, we are introducing amendments that will exclude contracts regulated by Ofcom, such as prepaid pay-as-you-go mobile phone contracts, as well as contracts for prepaid passenger transport services, such as prepaid Transport for London Oyster cards, from the list of what constitutes a consumer savings scheme. Finally, we are introducing two amendments to maintain the effect of the Consumer Protection: Unfair Trading Regulations 2008, which the Bill repeals and largely restates. The first relates to the application of disclosure of information provisions in part 9 of the Enterprise Act 2002, and the second relates to the information requirement placed on a trader in certain circumstances. Two technical amendments are also being introduced.
Alex Davies-Jones
First, let me say how pleased I am to see the Minister remain in post, and I thank him for his collaboration during the passage of the Bill; it has been appreciated by those on the Labour Front Bench.
I am keen to highlight a number of amendments tabled in my name that, sadly, have been significant Government omissions. New clauses 29 and 30 relate to subscription traps, which frustratingly still remain in the Bill. I have heard from the Minister and I am grateful for his approach, but Labour has pledged to end subscription traps, which see consumers get stuck in auto-renewing contracts that they did not explicitly ask for following free trials, by making companies end automatic renewal as a default option. The plans would change the current system of “opt out” to ensure that customers actively “opt in”, saving people money during this Tory Government’s cost of living crisis.
In the last year alone, people in the UK spent half a billion pounds on subscriptions that auto-renewed without them realising, and unused subscriptions are costing people more than £306 million per year. That is impacting marginalised groups and those on low incomes considerably more than others. It could mean that those least able to absorb the cost of being in a subscription trap are more likely to be in one, and the impact on those people will be more acute. Although the Government have recently made changes so that companies will be mandated to provide a reminder to consumers before renewing their subscription, sadly that change does not go far enough. I urge colleagues to support these new clauses, because this issue is impacting people in each of our constituencies the length and breadth of our islands.
In addition, amendment 225 would address the common issue of drip pricing, which impacts people across the UK. As colleagues will be aware, drip pricing is the practice of businesses advertising only part of the product’s price, and then later revealing other obligatory charges as the customer goes through the buying process. The Government promised to tackle that issue in the King’s Speech, but they have not tabled their own amendments on it. Indeed, the King’s Speech was the fourth time that this Government have promised to act since 2016, and enough is enough. Can the Minister clarify exactly why the Government have chosen to ignore the opportunity to right this wrong in the legislation?
Broadly, the Bill is welcomed by the Opposition, but it is well overdue. It is a positive step forward in creating new competition in digital markets that will enable the competition authorities to work closely and fairly with businesses to ensure fair competition and to promote growth and innovation. Labour in particular welcomes competition and consumer choice and protection as signs of a healthy, functioning market economy. It is vital, if we are to make the UK the best place in the world to start and grow a business, that digital opportunities are open for all. We are committed to ensuring that a pro-business, pro-worker, pro-society agenda is built for Britain, and we see consumer protections and competition law as playing an integral part in that. I look forward to the Minister’s response, and I look forward to seeing this Bill finally progress to becoming an Act.
John Penrose
May I start where I left off when the Bill hit Second Reading by saying that it is extremely welcome and creates an enormous amount of important and much-needed change? I continue to support it in principle.
My purpose in rising today is to speak to new clause 31, which I have tabled and 29 parliamentary colleagues have supported. Those who are familiar with the Kremlinology of the Conservative parliamentary party will understand that the new clause does something wondrous to behold, which is that it unites the breadth and every single part of the party behind one central idea: better regulation. I should pause briefly just to say that better regulation is distinct from deregulation. Better regulation is not saying that we want to trash standards; it is saying that standards of everything from environmental standards to workers’ rights all matter, but it does also matter that Governments of any type and stripe make sure they try to deliver those standards in the cheapest and most efficient and economically logical way possible. That is the difference between deregulation and better regulation. It is about delivering high standards, but in the most economically sensible way. That is what new clause 31 attempts to do.
It is worth pointing out that we had a regime that worked pretty well for about five or six years between 2010 and 2016, and it did something along those lines. It was called “one in, one out,” and then it was upgraded to “one in, two out.” It basically said that any new piece of legislation or regulation had to be costed for the extra cost it was adding on to the British economy, and before it could be introduced the Minister concerned had to find an equally large amount of cost to remove from other regulations elsewhere to begin with. Later, it was twice as much cost to remove from other regulations elsewhere. That worked reasonably well, except that it had some loopholes deliberately left, partly because it could not affect anything created in Brussels when we were members of the EU, and also because it did not cover things such as the economic regulators, Ofgem and Ofwat and so on.
That system changed to what everyone hoped would be a better one in 2016, but it turned out to be an absolute disaster. Instead of gently but steadily bearing down on the costs of regulation, we saw a huge ballooning in costs in the first year of the new system, and there was a target of reducing the costs of regulation across the economy by £8 billion or £9 billion. Instead of that, they increased by that amount. One would have thought that would have meant that the sky fell in, everyone would have been horrified by that notion and this place would have been up in arms, but not a bit of it. There was zero reaction from any party across the House, because the system was lacking some crucial points. The crucial thing it was missing was a proper accountability mechanism for when Governments of any kind fail to deliver on better regulation principles and on reducing the cost to wealth creation in this country, and inherently therefore reducing the rate of growth in the country and the improvements in productivity that we all want to see. It meant nothing happened within Parliament.
Clearly, we cannot leave things as they stand, and new clause 31 is an attempt to try to put that right. It would do something very simple, and it comes back to what I have called net zero red tape, which is effectively one in, one out, with the cost of any new pieces of legislation or regulation needing to be matched by finding countervailing savings elsewhere, but it would also do something else. The new clause says, “We need to make sure that there is not just a commitment from Ministers, but a legal duty on Governments—not just this Government, but all future Governments—to make sure that everyone who is a Minister, when they get out of bed on a Monday morning, knows they have a legal duty to deliver on this.” That would mean that if Ministers did not deliver on it, they will have broken the law. Breaking the law means they are in breach of the ministerial code, which this Parliament and all Parliaments take seriously. It would be a far more effective trigger mechanism for ensuring proper accountability and that this measure is delivered.
I would be the first to admit that this new clause is not perfect. That is because the parliamentary Clerks have rightly said, “Hang on a second; this Bill has a scope, and you cannot exceed it.” Therefore the new clause cannot, even though I devoutly wish that it could, apply the basic principles that I have just been explaining to the House across the entire economy—would that it could. As it is, it can only apply those principles to the economic regulators and anything to do with competition and consumer law. That is a huge step forward, because, as I mentioned, the previous regimes all excluded the activities of economic regulators, and we will now enfranchise them, if we agree this new clause. That is worth doing, but the new clause is far from perfect, because it cannot cover the rest of the economy.
Incidentally, the relevant bits of accountancy—the reporting on whether costs have been added or subtracted —has to devolve to the Competition and Markets Authority under the scope of the Bill, when in fact a perfectly respectable initial grouping, the Regulatory Policy Committee, already does it. It is full of clever and well-intentioned people, and I think the CMA would rather it did not have to do this work if it could avoid it; it would rather that others did it.
It is not a perfect amendment, but it none the less would take us a big step in a much-needed direction and establish an important principle. I am grateful to the Minister, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), who mentioned that we have been having extensive discussions over the weekend in an attempt to lock in these fundamental underlying principles and to find ways to perhaps broaden them beyond just the scope of this Bill. I hope that in his closing remarks he will be able to come up with some comments that may allow me not to press this amendment to a vote.
Fundamentally, the crucial things we have to ensure are: proper independent measurement, reporting and accountability on the costs of new regulations, rather than anything that can be lent on by Government; proper consequences for Ministers in any Government who fail to deliver on trying to reduce those costs; and that no Government feel like they have a blank cheque on spending other people’s money. It is stark to examine the differences in how we approach taxpayer-funded spending versus regulation cost-funded spending. At the moment, a Minister or official who wants to spend taxpayers’ money has a squillion different hoops that they have to jump through, and rightly so. There are lots of controls on that spending undertaken by the Treasury and followed up by the Public Accounts Committee, and I can see one of the senior members of that Committee here today, my hon. Friend the Member for The Cotswolds (Sir Geoffrey Clifton-Brown). It is highly regulated and controlled, and great attention is paid to it in this Chamber.
However, if one wants to spend five, 10 or 100 times that amount of money by increasing the cost to business through regulation, there is not a peep. Much less attention is paid to those ways of spending cash, and that cannot be right. As everybody here will understand, a pound taken in tax has the same underlying economic impact on the country’s rate of growth as a pound taken in extra cost to business. We should treat both things with equal seriousness, rather than paying huge attention to one and largely blithely ignoring the other, while writing blank cheques. Any regime has to fix that problem as well.
Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)
My hon. Friend engaged in some self-deprecation at the beginning of his speech about the scope of the new clause, which I co-signed, but I think he is underselling it. The consumer protection and economic regulation in the new clause go a long way towards reducing the burden of red tape. The second thing that is really important is that this is not about the number of regulations, but their economic value. That is what really places a burden on business in this country. Will he explain how he is going to establish a baseline through the new clause? If this thing is to be measured properly, we have to have a proper baseline.
John Penrose
My hon. Friend is right: I may have been guilty of being too glass half empty, rather than glass half full. The new clause goes a very long way and enfranchises large chunks of the economy that perhaps have not been dealt with properly up until now; I just wanted to go even further and cover the entire economy. He is right to point out that the new clause does quite a lot, but it is half a loaf rather than the whole loaf, if I can put it that way.
My hon. Friend is also right to say that the accountancy —the measurement of the costs—is crucial. If we are trying to do one in, one out, we have to know the cost of the things coming in so that we can know what savings we have to find elsewhere. As I mentioned, the crucial thing is that we need to have an independent accounting body—an independent measurement body. That will require the Regulatory Policy Committee to be made a little more independent and to be given more arm’s length ability to set those accounting and measurement standards in a way that cannot be leant on by senior Ministers, senior mandarins or senior regulators. The committee needs to be able to look those people in the eye and say, “No, this is the way it’s got to be.” Like any good external auditor, it needs to be sufficiently at arm’s length to deal with that. If it does so properly, it will mean that any set of measurements can be relied on, both by my hon. Friend’s Committee and the rest of this Chamber. That is essential.
To bring my remarks to a close, if we do not adopt the system proposed in the new clause, we need a system that provides proper accountability for anybody who fails to hit these targets; proper measurement and independent accounting standards to make sure that Government and regulators cannot mark their own homework; and proper targets of some kind to make sure there is a standard to which Ministers must be held. I hope that my hon. Friend the Minister will be able to reassure me, and I look forward to his remarks.
Richard Thomson
It is a pleasure to follow the hon. Member for Weston-super-Mare (John Penrose), who made some very interesting arguments. In some of them, I heard echoes of the arguments that have been made by the Opposition during my few years in this place about trying to measure the effect that legislation has when it is passed. Amendments that seek to measure that effect routinely get knocked down, but there is a fundamentally useful point in what he says about the need to make sure that we are not suffering from unintended consequences and that the goals we are seeking are the ones that result, so that corrective measures can be taken if they are not.
Hansard records that on Second Reading, I was wished “Good luck!” by the hon. Member for Pontypridd (Alex Davies-Jones) when—perhaps intoxicated by an overly friendly and useful exchange across the Floor about the scourge of fake reviews—I thought we might get to a consensus that would allow something to appear in the Bill. Sadly, the hon. Member’s cynicism appears to have been well founded: there is certainly nothing about fake reviews in the Bill that I can see. I accept that the Government might amend that in future through secondary legislation—they are certainly able to do so—but as I said earlier this afternoon, that inevitably restricts the scope of the sanctions that can be levied for that behaviour.
I appear to have had a little more success in another area. In his opening remarks, the Minister said that when it came to additional gold-plating of the rules and regulations affecting charity lotteries and gambling for that purpose, there was a risk of charitable organisations being caught up as an unintended consequence of the legislation. I am absolutely delighted that the Government appear to have listened, and have tabled Government amendment 170, which
“excludes contracts for gambling (that are regulated by other legislation) from the new regime for subscription contracts”.
I very much welcome that amendment. On that basis, I will not seek to move amendment 228, which stands in my name and which I pressed to a Division in Committee.
A rather gruesome spectre was raised in the debate earlier—phantasms and fears that will not arise, apparently. That brings me neatly to new clauses 1, 2 and 3, which were tabled by the right hon. Member for North East Somerset (Sir Jacob Rees-Mogg)—a series of amendments that appear to be aimed squarely at a somewhat contested narrative surrounding the personal financial arrangements of somebody currently residing in a very small part of a jungle somewhere in Australia. Their appearance there is set to land them a fee that—if the scale of that bounty is as reported—would surely have every private banking manager the length and breadth of London fighting for their custom. When most of us speak in this Chamber about financial exclusion, usually we are talking about a lack of access to cash or about the ability to access one’s cash without a service charge at an ATM. We are talking about a lack of access to credit or to any kind of bank account, and very much not about those suffering the privations and indignity of having to deal with a bog-standard current account rather than being courted by Coutts.
Sir Jacob Rees-Mogg
The hon. Gentleman is absolutely right that this issue has come to people’s attention because of Nigel Farage. I will talk about that case in a moment, but what has emerged is that actually, quite a lot of people—and sometimes charities—who have views that banks do not like find that they are not able to get access to a bank account, which nowadays is a fundamentally important thing for people’s carrying on an ordinary daily life.
Richard Thomson
I thank the right hon. Gentleman for his intervention. There is already a multiplicity of legislation and entitlements—indeed, he appears to reference them in new clause 1—that can be used to tackle such circumstances when they arise, if indeed they do. I find it very encouraging that in drafting new clause 1, the right hon. Gentleman has alighted on the relevant provisions of the European convention on human rights, which provides a very useful earthing point for many of the fundamental rights that we hold dear and, indeed, are a bulwark of a civilised society. Perhaps we will see a similarly stout defence of them in future debates in this Chamber.
I very much welcome new clause 14, which will require companies to comply with requests for information from the Competition and Markets Authority when it comes to the pricing of motor fuel. On 9 November, the CMA published its first monitoring report on the road fuel market, and while 12 of the largest retailers responded to that request, I am given to understand that two did not. From my perspective and, I am sure, the perspective of many others wherever in this Chamber they sit, that is simply not acceptable. I am sure we can all point to large variations in the cost of petrol, diesel and other forms of motor fuel across our constituencies, sometimes in filling stations that are only a few miles apart or even within relatively close proximity. That is certainly a great source of contention for people right across my constituency, so the Government requiring retailers to provide the CMA with that information is an important strengthening of its powers, and one that we welcome.
New clauses 29 and 30, which stand in the name of the hon. Member for Pontypridd, seek to tackle subscription traps. I appreciate that the Government have tabled amendment 93, which seeks to tackle these traps by issuing reminders, and that is a welcome step forward. Nevertheless, I am bound to observe that SNP Members, at least, believe that a better balance could be struck by asking consumers whether they wish to opt in to automatic renewals or to variable rate contracts, rather than simply getting reminders about them, which will inevitably end up in the recycling bin or junk mail folder, even for the most attentive of consumers. Having to opt in would be far better and it would protect the consumer’s interest to a far greater extent than simply having the opt-out option emailed or mailed, or conveyed in some other way, in due course. If those new clauses are put to a vote, the SNP will support them in the Lobby.
Sir Robert Buckland
I hope to speak briefly, as the hors d’oeuvres for the pièce de résistance, which will be the speech by my right hon. Friend the Member for North East Somerset (Sir Jacob Rees-Mogg), who has tabled excellent amendments. Although I did not sign them, for which I apologise, I very much endorse and support his efforts in these areas. These are important matters that need to be dealt with, and this is the right forum in which to do so. I wish to speak briefly in summary about provisions that I spoke to in the first group and simply reiterate that the thrust of the new clauses I have tabled, and am supported in by a number of right hon. and hon. Members, is all about accountability.
New clause 24 seeks a review of the work of the Competition Appeal Tribunal and is all about making sure that that body is functioning as effectively and expeditiously as possible to deal with these important matters. The work of the tribunal has become progressively more scrutinised. I do not wish to cast aspersions on its chairs or members, who work extremely hard. It is an impressive body, which is looked upon internationally for its work. However, there is no doubt in my mind and in the minds of many others that there is more work to be done to streamline and improve the CAT’s processes if it is increasingly to be looked upon and relied upon as an important arbiter of issues relating to digital markets, among other things.
The consumer interests duty set out in new clause 25 is at the heart of what we are trying to do here. Coupled with that, new clause 26 seeks to allow claims for damages under part 4 of the Bill and is an attempt to reframe the way in which the Government are approaching the provisions on subscriptions, to which I have tabled a number of amendments. I am grateful to my hon. Friend the Minister and the Government for having listened and moved on that issue. However, it seems to put the cart before the horse a little to not allow claims for damages, but to put through exemptions that would mean that if I were to seek to terminate my subscription via Twitter, the company concerned would not be liable. It would be far better to have a general liability in damages and not to have such prescriptive clauses in the first place that would be liable to misinterpretation. I am offering the Minister another way of looking at it that would be less prescriptive.
I have to come back to the Minister on the point that I made to the Under-Secretary of State for Science, Innovation and Technology, my hon. Friend the Member for Meriden (Saqib Bhatti): there is an odd juxtaposition between different parts of the Bill, where we are told in one breath that primary legislation is not the appropriate vehicle for prescribing procedures, yet here we are prescribing in minute detail procedures relating to subscriptions in the Bill. My hon. and learned Friend the Member for Eddisbury (Edward Timpson) has made the point for me, and it is one we well know: secondary legislation allows for greater flexibility, so that if a new potential problem or abuse is identified in this fast-growing market, the Government would be able to plug the hole and deal with the subscription issue.
Neil Coyle (Bermondsey and Old Southwark) (Lab)
I rise to speak to amendments 226 and 227 in my name, which would introduce a take-down power to ensure that unsafe or counterfeit goods are removed from sale online. We covered this issue in some detail in the Bill Committee, where the problem of dangerous online sales was likened to the wild west, due to the risks to individual consumers and the lack of governance. I am disappointed that we still do not have clarity on how the Government want to tackle this growing concern, because this is fundamentally about safety and the Government failing in their core duty to keep people safe.
The Minister knows that unsafe products bought online have caused deaths in the UK. We have seen fires and other catastrophic damage caused by dodgy goods bought online, and since the Committee completed its considerations, a coroner has specifically cited faulty e-bike chargers in a report on a death. The coroner’s report in September suggested that at least 12 people have died and a further 190 have been injured in faulty e-bike and e-scooter blazes in the UK since 2020 alone, and that is only one area of problematic online sales. The coroner’s report goes on to call for greater action, and says:
“It is clear that there is an existing, ongoing and future risk of further deaths whilst it continues to be the case that there are no controls or standards governing the sale in the UK of lithium-ion batteries and chargers (and conversion kits) for electric-powered personal vehicles.”
There is a call for the Government to act in the face of further problematic items and dangerous goods being sold online.
My amendment helps to address the situation, where such items are identified. Not everything we discuss in this place is a life-and-death issue, but this can be. The Minister has had many representations from organisations about the growth of unsafe and dodgy goods sold online as legit: the British Toy & Hobby Association and Electrical Safety First issued briefings that supported my amendments in Committee. Trading standards also supports greater means of taking action, and briefed in support of the amendment in Committee.
At this time of year, it is even more important to act and raise awareness, because many people are buying their Christmas gifts online. Being super organised, I have my seven-year-old’s Christmas presents all safely stashed away at home. I am pretty confident she is not watching tonight and will not be looking for them, although who knows? I genuinely would not buy her gifts online because I am fearful about what happens to those who do trust some online sites.
Research by the British Toy & Hobby Association in 2021 showed that some 60% of children’s toys bought online were unsafe for a child to play with, and 86% were illegal to sell in the UK. That is very disturbing. Some of the problems it discovered were counterfeit goods, fire safety and chemical restriction failures, and packaging or parts that presented choking hazards. They were all products that online marketplaces had been told about but had not removed from sale.
In Committee, we had more time for detailed examples. We have less time here, so I will give just one, the toy crocodile story, and I will make it snappy. In July 2018, Amazon was told about a dangerous crocodile toy that was putting children’s lives at risk and was being sold widely online. Trading standards intervened several times, and in January 2020 the Office for Product Safety and Standards also intervened, but that toy range is still on sale online today, five years later. That is unacceptable, and sadly it is not a one-off. The OPSS has issued recall notices due to what it called
“serious risks of fire and electric shock”
for 90 products that are still on sale on Amazon, and 20 that are still on sale on eBay. There is a fundamental problem with the current regime and system. My amendment seeks to restore confidence.
The consumer organisation Which? has also alerted MPs to, among other issues that it has discovered, the problem of energy-saving devices that do not save energy but do present significant risks, including plugs with no fuses. There is unity in the call for greater action. The chief executive of the Government’s own Office for Product Safety and Standards said last November that
“there is too much evidence of non compliant products being sold by third party sellers”
online. The National Audit Office and the Public Accounts Committee have also called for action.
My amendments are not about new regulations or new pressures on business, which the right hon. Member for North East Somerset (Sir Jacob Rees-Mogg) talked about. They are about enforcing standards and rules for all, both online and on our high streets. The Minister, when he opened this section of the debate, said that he wanted fairness and a level playing field for all. I want that for British consumers and businesses as well. People have a misplaced faith that there is a level playing field, and that what they see in Argos and what they can buy on Amazon are regulated in the same way, but sadly they are not, and without my amendments they will not be.
Since Committee, I have tidied up the amendments slightly to ensure that they include a power to require the removal of items that are unsafe or counterfeit. That power links to the Government’s list of organisations in clause 144, to ensure that the same bodies as are listed in the Bill are involved. I am trying to help the Government and trying to help more generally, because there are wider benefits to getting this right.
UK high streets are struggling. Removing unsafe goods from online sale will mean that British high street shops that meet regulations will get a boost, as will British manufacturers who play by the rules but are undercut by imports from other countries that do not meet our safety and other standards. My amendments are designed to address all those issues and help to ensure that our standards are met. There is unity in the calls for greater regulation, and for a new sheriff or a new marshal for the wild west—not a rhinestone cowboy, singing the same old song and trying to stick up for a system that is failing British customers.
I will end on consumer rights. I do not believe in the enfeebled state, which seems to be accepted by some Ministers. We were told that the whole “take back control” narrative was supposed to lead to better rights for Brits, but we already lack rights that our European cousins have. French, Dutch, Irish and Polish customers now all have better protection, through the Digital Services Act, which has been passed by the EU since we left it—crucially, with the support of Amazon. It is beyond shocking that Amazon seemed to understand and support the need for change before most of the UK Government did.
However, there is a glimmer of hope. There is one Minister who has called for action, and has said that we should make the UK the “safest” place in the world to shop and do business online. That same Minister told this House that
“we should go further than that and require marketplaces to ensure that such products are not on their sites at all, ever”.—[Official Report, 20 January 2023; Vol. 726, c. 715.]
I agree with that Minister. These amendments help to deliver his aim, and we are lucky that that Minister is before us in this debate. I hope that when he gets back to his feet, he will reward my optimism and say that the Government will act now. I will not push the two amendments to a vote today, in the hope that my take-down power will be taken up by the Government before or during Lords consideration. I look forward to the Minister’s response.
Sir Jacob Rees-Mogg
It is a pleasure to follow the hon. Member for Bermondsey and Old Southwark (Neil Coyle). I am also grateful to the Minister for his thorough engagement on these matters. He has been extremely diligent, helpful and, as always, courteous. Let me begin by declaring a sort of semi-interest. I do not think it is technically one that the Standards Commissioner would worry about, but Mr Farage and I both appear on a television programme under the auspices of GB News at about the same time of day—I follow him. I have no financial relationship with Mr Farage; we merely appear on GB News at a similar time of day.
It was Mr Farage who brought to the attention of the public the issue of de-banking. It is a great problem; if someone’s bank suddenly says to them, “We are not providing you with any facilities”, where do they go? It is very hard to go to a new bank. New banks do not want people who have been de-banked. Nigel Farage became in a way the poster boy for this issue, highlighting something that was affecting people up and down the country, affecting charities, and affecting businesses that have been to see me as a constituency MP in the past—people running certain types of business, who found that their banking facilities were withdrawn without any proper answer or explanation. A pawnbroker who came to see me had had his banking facilities taken away. His is a perfectly honest and reputable business, but inevitably it deals with a lot of cash, which makes banks nervous and, when they are nervous, they need to give that customer a proper explanation as to why they are no longer getting that service.
The hon. Member for Gordon (Richard Thomson), in an elegant speech, teased me for standing up for Nigel Farage as if debanking was not a common problem. He mentioned that Mr Farage is off in the jungle eating offal and all sorts of other tasty morsels. Yes, that has had the benefit of bringing people’s attention to something that was affecting our constituents across the country. Therefore, I do indeed draw on definitions, but only definitions, from the European convention on human rights—this is not a sudden Damascene conversion to such a document; it is simply that those definitions are in our law and it is useful to base any amendment to a Bill before the House on existing law. That leads me, as always, to thank the Clerks for their mastery of ensuring that amendments are within scope, because getting the new clause into scope, as my hon. Friend the Member for Weston-super-Mare (John Penrose) found with his excellent new clause, which I will come to, was not particularly easy. That is why, in affecting consumers but not businesses, it does not go as far as I would have liked.
This matter is of such fundamental importance. You may think, Mr Deputy Speaker, that I am not all that much in favour of the modern world and that I think it would be nicer if we could go round with the odd groat or perhaps a sovereign to pay our way, but sadly that age of specie has gone—you might even say that the age of specie had become specious, but it is in the past. Everybody now needs modern banking facilities. Cash is not used anything like as much as it was, and every transaction that people carry out needs a piece of plastic, a bank that it comes from and a telephone or some type of technology. When somebody is debanked, it is like the Outlawries Bill on which we only ever have a First Reading: they are effectively made an outlaw in their own land. They are without the normal law of the land and the ability to do ordinary things. That is why new clauses 1 to 4 are really important, and a protection for people.
To return again to Nigel Farage, the idea that someone should be debanked because of legal political opinions is outrageous. The hon. Member for Gordon teases me for mentioning Nigel Farage, but actually a separatist who wants to break up the nation has a political opinion that in other countries would be considered treason. Those in China who say, “Free Tibet—have an independent Tibet,” do not get a lot of quarter. So once we start saying that someone can be debanked for holding Nigel Farage’s views, what about being in favour of Scottish independence? Would that be a view that one bank might not like and might say that members of the SNP—a perfectly legal party—should not be banking with it? It affects every political opinion, and a political opinion may be fashionable today, but tomorrow it may not be. We always have to consider in legislation the protection of free speech against the interests of passing fashion, because we and Opposition Members may be affected by it in a slightly different or changed environment.
Richard Thomson
Are we not talking about slightly different things? There was a highly contested narrative around the circumstances the right hon. Gentleman describes, but my understanding is that the gentleman in question was not so much debanked as offered a lesser account and has subsequently found somewhere he can bank satisfactorily.
Sir Jacob Rees-Mogg
The hon. Gentleman is misinformed. Mr Farage was only offered any new bank account with NatWest rather than Coutts when the story became public. Prior to that, he had not been offered any banking facilities, nor had he been able to find another bank that would take him on. So the facts of the matter are that Coutts/NatWest debanked him because of the extraordinary internal set of communications, which have become public and led to the resignation—effectively the firing—of the chief executive of NatWest, partly for gossiping about his banking circumstances, but also for the behaviour that had led to his banking facilities being taken away for his political opinions. That is quite clear from the information that has emerged.
Richard Fuller (North East Bedfordshire) (Con)
My right hon. Friend’s new clauses relate to debanking, prompted by a particular incident. Would he not accept that there is the broader issue that the pursuit of environmental, social and governance goals by corporations and the pursuit of values in association with diversity, equity and inclusion objectives raise the same issue on a much broader front than banking facilities? What would he recommend the Government should do on that?
Sir Jacob Rees-Mogg
I agree with my hon. Friend that it does go much further. Some time ago, the Bank of England issued a document suggesting that loans should not be given to companies investing in oil and gas when we need oil and gas for the foreseeable future. I think that this politicisation of banking is quite wrong, and ESG is not fulfilling the fiduciary duty of investors to provide the best return to their clients. We should look at that.
Neil Coyle
Can I clarify that when the right hon. Member talks about banks, outlaws and dodgy cash, he talking about high street banks and not Arron Banks?
Sir Jacob Rees-Mogg
I am talking about the banking system generally, and I am saying that it is important that people should have banking facilities regardless of their political views. It is important that Russian oligarchs may be sanctioned—that is a legitimate thing for Governments to do—but that requires the rule of law.
I want to touch briefly on some of the other amendments to which I have attached my name. I once again agree with my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland) on new clauses 24 and—particularly—25. Putting the consumer first must be the essence of what we are trying to do. To my absolute horror, I have discovered that I agree with him on turning some of these measures into secondary legislation.
Skeleton Bills are a dreadful thing. We get awful legislation coming into the House on which there is no detail at all because it will all be decided by Ministers later. Such Bills should be deprecated. The House of Lords is good at pushing back on them; this House less so. Skeleton Bills are bad idea—except, there is a place for secondary legislation, and that is it. For some utterly random reason, a Government who have brought forward extraordinary skeleton Bills, some of which I could mention and have mentioned in the Chamber on occasions, have brought forward every last detail on something that, in its essence, will need revision and updating and to meet different standards as time goes by. It is a modest eccentricity to have put that in the Bill. I suggest that, in the other place, the Government look at whether that detail could be easily turned into secondary instruments, with such instruments ready to come into force at the same time as the Bill, so there would be no delay. That structurally would make for a better Bill. I am embarrassed to be speaking in favour of secondary legislation, because normally I want to see things in the Bill. If we could have a promise of fewer skeleton Bills in future, I would be delighted.
Against that, I could not disagree more with new clauses 29 and 30. Those make a real mistake—dare I say it, they are typical socialist amendments—because they do not trust people. It seems to me that people are sensible: they know what they are doing, they volunteer to do it, and they are free to undo it. Yes, of course, it is important that they should be free to undo it, but there is a cost to over-regulation. If we make companies write all the time to say, “Are you sure you want to do this?” that puts up the price. The profit margin for the business will not change, but the price that they charge consumers will. If they are constantly saying, “Do you want to leave us?” that will put the price up, because there will be an administrative and bureaucratic cost to that, and a loss of business that will put up the overall cost for everybody. It is legislating for inefficiency based on the idea that consumers are stupid. Well, in North East Somerset, consumers are very clever, highly intelligent, and know what they have agreed to and what they have not agreed to.
I congratulate my hon. Friend the Member for Weston-super-Mare. His new clause 31 is genius because it gets to the heart of an incredibly complicated and difficult matter that no other piece of legislation that we have tried has really worked with. Even the one in, one out that we had from 2010 to 2015 did not really work. I seem to remember reading that the Crown’s ownership of sturgeon was cancelled during this period because it counted as a “one out”, allowing some regulation to come in, no doubt costing millions, as we got rid of something trivial. One in, one out was not really there, but this new clause does it on a proper cost audit and looks ultimately to cover everything. That is absolutely the right way to go. My hon. Friend made the superb point that whenever any type of Government expenditure is involved, it is looked at, reviewed and referred to a Committee, yet when regulations worth billions are involved, they pass through without so much as by your leave. This is a really important new clause and I encourage the Government to do whatever they can to implement it.
A final thought before I conclude is on petrol stations. This is very good news. Why is it that the Tesco’s in Paulton is more expensive than the local service station in Ubley? I use the local service station in Ubley because it is better value for money, but Tesco’s in Paulton is more expensive than the Tesco’s on the outskirts of Bristol. That is very unfair on my constituents and I want it to bring its price down.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
Thank you, Mr Deputy Speaker. We all have that image in our head now, of which particular supermarket you are talking about.
As other hon. Members have said, this Bill is much needed and will help in so many ways. Hon. Members have sought to address a number of vexed issues in this legislation. This includes an attempt, through our Opposition amendment 225, to address drip pricing, which I know as chair of the all-party parliamentary group on ticket abuse is especially prevalent in the primary and secondary ticketing markets. In these markets, customers often have to wait until the payment screen to see a complete price breakdown. In the secondary market, customers are often drawn in by Google-paid ads to professional looking sites such as Viagogo, which are selling tickets for many times their face value and engaging in illicit business practices. Initial prices, while eye-watering, are present, but there is no breakdown of the exact amounts for service charges or VAT.
The consumer is left in the dark about what they are actually paying for until it is time to pay, usually after having navigated many more time-wasting pages on the website and almost losing the will to live and the power of rational thought. Even then, the prices are often still estimates when the customer eventually hits “Buy now”, after feeling that they will lose the tickets if they do not make the decision quickly. Lots of customers still get a nasty surprise when the payment confirmation email comes in and they see the actual amount that has been taken from their bank account or credit card.
Moving on more broadly to the Competition and Markets Authority, I am aware that the CMA made its recommendations on tackling abuses in the ticketing market to the Government in August 2021, which the Department for Culture, Media and Sport then sat on for over 18 months before making an outright rejection of them. Principally, these recommendations called for stronger laws to tackle illegal ticket resale, and this Bill could and should have been—and could still be—the perfect place to introduce those powers. I am therefore very disappointed that the Government are still resisting these modest calls from the body set up to regulate our markets.
I support efforts in the Bill to ensure healthy competition online, but why not extend it to tackle online ticket touts? Sites such as Viagogo have been allowed to grow and gain a monopoly over ticket resales while being accused of benefiting from the illegal bulk buying of tickets and the wholesale speculative selling of tickets that they simply do not have. This includes Viagogo sellers attempting to sell thousands of festival tickets that they had not purchased and did not have the title to, as well as something known as the golden circle, an online rent-a-bot group illegally buying masses of tickets for the upcoming tours of Beyoncé and Taylor Swift, even when artists such as Swift actively speak out against touting and take measures to protect their tickets from ending up in the hands of touts instead of fans.
John Penrose
I do not know whether the hon. Lady heard my earlier remarks, but let me reassure her that new clause 31 would not reduce the CMA just to that; it would still have all its other powers. In fact, the total number of staff employed by the RPC to do this at the moment is relatively small. I also mentioned that if the Minister were able to come up with alternative ways of delivering a fully independent and therefore much more objective way of doing the RPC’s job—perhaps by strengthening the RPC—I would be delighted to accept that instead.
Mrs Hodgson
I agree. I am sure that would be a much better way. I definitely do not think that the CMA should have to do what the new clause is seeking to do.
I have it on good authority that professional touts now number anywhere from 3,000 and 3,500. In all the time I have been campaigning and speaking on this issue, which is getting on for 15 years, those numbers were in the tens, the fifties and the hundreds. It shocks me to know that we are now trying to deal with this level of professional touts. They are attacking everywhere, from stadium gigs to local venues and, increasingly, football games. They should not be able to tout tickets for football games, but they do. Yet according to Home Office figures, the yearly arrests of football ticket touts have been decreasing, dropping from 107 in 2011-12 to only 28 in the 2019-20 season.
In my opinion, the lone conviction of just two touts nearly four years ago, which we discussed with the Minister in the last debate on this Bill, is not a strong enough deterrent, especially as it relied on outdated legislation such as the Companies Act 2006 and the Fraud Act 2006, rather than the purpose-built Consumer Rights Act 2015, which I was substantially involved in, or the Digital Economy Act 2017.
I appreciate the efforts in the Bill to protect consumers online, and I can see that there are measures in the Bill to be welcomed, but for me, ticket touting and the widespread fraud that comes with it must be properly addressed and regulatory bodies must be fully empowered to tackle these sites. I will leave my remarks there.
Caroline Lucas (Brighton, Pavilion) (Green)
When first announcing this Bill, the Prime Minister promised that it would clamp down on greenwashing and bring misleading environmental claims under the umbrella of consumer protection laws, but the reality seems to fall far short of that—something to which we should perhaps have become accustomed when contemplating the gap between this Government’s environmental rhetoric and their lack of concrete action. While the Bill allows for consumer redress if commercial practices result in their being misled, confused or misinformed, the measures it contains certainly do not amount to the robust action on greenwashing that the Prime Minister led us to believe would be forthcoming. I have therefore tabled two amendments that would go some way towards delivering on the promises that he made.
As a multibillion pound persuasion industry, advertising has an enormous influence on which companies we trust, on our lifestyle choices and on the purchases we all make.
We are all exposed to thousands of advertisements on a more or less daily basis. To protect consumers from misinformation and harm, advertising must be properly and fairly regulated. However, we currently have an advertising regulation system that is slow, opaque and, in short, failing. The UK’s Advertising Standards Authority is not an independent regulator; it is self-funded by the advertising industry. Any complaints that the ASA handles about misleading or harmful advertising is essentially therefore marking its own homework. The ASA’s motivation to fairly regulate is wholly undermined by its close proximity to the industry it should be holding accountable.
My amendment 208 seeks to address the regulatory gap as a matter of urgency. It would create a regulator that is independent, transparent and one that can take timely action, thus better protecting consumers from misleading messaging by polluters and other harmful commercial actors. I think consumers want action. They are increasingly concerned about the role of companies in producing waste, pollution and environmental harms, and ignoring human rights. Yet in response these same companies turn to advertising to try to clean up their image and shore up their social licence to operate. New evidence reported in the Financial Times shows that Shell, one of the world’s top polluters, is estimated to have spent £220 million on advertising in 2023. Much of that advertising is aimed at younger generations, who are perhaps more vulnerable to misleading claims.
Misleading green advertising and greenwashing is on the rise. The ASA’s response has been to update its minimal environmental guidance to advertisers and to rule against just a tiny number of adverts for Shell, HSBC and other high-carbon advertisers for making misleading green claims. Those rulings are often slow and are often made well after the damage has been done. Time-consuming complaints have largely been brought by civil society organisations concerned with the impact of advertising and greenwashing on consumer wellbeing and their rights, but it should not be left to those organisations to have to try to enforce misleading adverts and to ensure that those adverts do not go unchecked. We need a robust regulatory framework and it is disappointing that the Government did not use the opportunity afforded by the Bill to deliver one.
The ASA celebrates its slim count of investigations into polluter advertising while a whole sea of greenwash escapes its notice and seeps into consumer consciousness. Only 2.4% of adverts reported to the ASA over environmental concerns saw any formal action in 2022, while thousands go unreported and therefore see no action at all. This is a drop in the ocean. We simply cannot afford this lack of effective advertising regulation to continue. My amendment 208 is a small but essential step if we are to stop the most polluting adverts from promoting our own environmental demise.
My other amendment is 207. It is another small but essential step, this time towards tackling the way in which the adverts to which we are exposed to every day are themselves fuelling the climate crisis. The UK advertising industry was responsible for 208 million tonnes of carbon dioxide-equivalent emissions in 2022. To put that another way, advertising is responsible for the equivalent of just under a third of the carbon footprint of every single person in the UK. No wonder that, from the World Health Organisation and the House of Lords Environment and Climate Change Committee, to the UN’s environment programme and the Committee on Climate Change, there is universal agreement about the need to regulate the advertising of high-carbon products.
High carbon clearly means fossil fuels, flights and SUVs. I would argue that it also probably means fast fashion, most meat and dairy, and the banks funding the likes of BP and Shell. I therefore back the many campaigns for a ban on high-carbon advertising and for interim measures, such as car advertisements with mandatory content about the benefits of active travel and public travel, as has been done in France. In the meantime, and in the absence of a Government prepared to act in line with the climate science and other evidenced demands, my amendment 207 would bring consideration of net zero emissions by 2030 into the consumer protection regime envisaged by the Government. Let me say a few words about why that is 2030, rather than 2050.
The Intergovernmental Panel on Climate Change is clear that limiting global temperatures to 1.5° requires that the whole world reaches net zero by 2050, a deadline that has been directly translated into domestic targets. But the UN Secretary-General, for example, is among many who have called for developed countries to commit to net zero much sooner, by 2040. When we look at the UK’s own historic responsibility, and indeed our financial means, that puts us into the category of richer countries that, in the interests of fairness, should be going faster and further.
Given the rate at which we are eating through our remaining carbon budget for 1.5°—according to some scientists, 1% a month—further and faster in terms of the UK translates to us achieving zero emissions by much closer to 2030 or 2035, thereby giving countries in the global south longer to cut their emissions. This idea is actually enshrined in climate law around the idea of common but differentiated responsibility, but sadly it is more respected in the avoidance rather than in the implementation.
Of course, that timeframe is undoubtedly hugely challenging. It will require a scale of social and economic transformation far surpassing what we have seen to date—hence the need for action across the board, including in relation to the advertising industry and consumer laws. Specifically, amendment 207 would signal that achieving net zero by 2030 is in the collective interests of consumers and it would help protect consumers from any detrimental effects arising from commercial practices that do not fully reflect the need to stay within that limit.
Misleading advertising is unfairly influencing consumers who want to do the right thing to protect the environment. It is delaying climate action just when we need to shift consumption patterns towards lower carbon alternatives. It is further flooding consumers with adverts that normalise and glamourise high-carbon products and ways of living, something the regulator, with its limited remit, cannot currently act upon, and which the current limited understanding of consumer collective interest does not encompass.
The scale and urgency of the climate and nature crises are such that they should be factored into every single piece of legislation. My two amendments are designed to do exactly that by delivering on the promises the Prime Minister made about greenwashing, and by delivering on what every shred of evidence tells us about the impact of that advertising on our precious environment, and therefore on consumers’ long-term collective interests.
Jim Shannon
It is a pleasure to follow the hon. Member for Brighton, Pavilion (Caroline Lucas). She is, if I may say so, the conscience of the Chamber in relation to net zero and environmental issues. She always gives us a helpful reminder of the importance of those issues for all of us across this United Kingdom of Great Britain and Northern Ireland.
It has been incredibly encouraging to hear the comments made thus far by all Members on all sides of the House. It is also great to see the intention of the Bill, which lies solely around the consumer, and consumer rights and protections. The Minister very helpfully set the scene in a way we can all adhere to and agree with. If the hon. Member for Weston-super-Mare (John Penrose) puts forward some of his amendments, maybe the Government will also support them. If they do, we will have no need to divide the House.
The new consumer protection measures in the Bill are intended to apply to the whole of the UK. Consumer protection policy is devolved to Northern Ireland, and reserved for Scotland and Wales. It is my understanding that, as a result, consent will be required for Northern Ireland. It would be helpful if the Minister could confirm what discussions he will have, or has had, with Northern Ireland Departments to ensure that they can be implemented as soon as possible. Reading through the Bill and the amendments and new clauses that have been tabled, I am ever mindful that the Government do have powers. In new clause 69, for instance, sectoral enactments are in place for the Water and Sewerage Services (Northern Ireland) Order 2006, the Gas (Northern Ireland) Order 1996 and the Electricity (Northern Ireland) Order 1992. There seems to be a methodology whereby decisions for Northern Ireland can be made. Again, as an Northern Ireland MP, I think it is important that we understand what the implications are and how the process will work for us.
I wish to refer to new clause 4 and also to new clause 29, which was tabled by the shadow Minister and which seems to be a perfectly amenable suggestion. I very much welcome the Minister’s commitment in his opening speech to address the issue of fuel prices. A number of right hon. and hon. Members have referred to that matter. Clearly, there is something wrong if the fuel price on one side of Newtownards in my constituency is different from that on the other side, but it is even more wrong if one of the major stores has a price at a certain level, yet further up the road that same store has a different price. It really is quite hard to comprehend how that can happen.
I wish to highlight the subscriptions issue, which many Members have referred to today. I have been made aware of two examples that I wish to put on the record in Hansard. I believe that these issues are being addressed. The Minister referred to that in his opening speech. The fact is that we are now living in an online world. I am afraid that I am not one of those who can do that—I make that admission here in this Chamber—but most people are involved in that world. It is a world where there is almost always an opportunity for subscription payments. Even newspapers now offer an online subscription service to get premium access to certain articles. These services are good if they are used correctly.
I heard a story from one of my members of staff. One of her subscriptions was with an online clothing company, which charged £50 a month for her to get access to clothes at a significantly cheaper rate. At the start of the month, for four days only, there is an opportunity to skip the month and not pay the £50 payment. The issue, quite simply, is that if people forget to skip the month, they are charged that £50. There is something wrong with that. No reminder is sent by the company, so this is a smart way for companies to make more money, as being forgetful is a human error. Again, I am keen to get the Minister’s ideas on whether this legislation address that issue.
Kevin Hollinrake
I thank right hon. and hon. Members for their contributions to the debate and for their ongoing engagement. ‘Working day Section 129(1)’.
First, let me speak to the amendments tabled by the hon. Member for Pontypridd (Alex Davies-Jones), who has thoroughly enjoyed our engagements over the weeks that we have been studying the Bill. New clause 29 would impose a requirement on traders to ask their customers whether they want their subscription to renew automatically every six months when they sign up to a subscription contract. If they do not choose this auto-renewal option, the contract would end after six months, unless the customer expressly asked for it to continue. New clause 30 would apply equivalent requirements to contracts that renew automatically after a free or low-cost trial.
The Government agree that consumers must be protected from getting trapped in unwanted subscriptions. However, we do not think the new clauses would deliver this in the right way, and such an approach could end up inconveniencing many consumers. For example, if a consumer had not initially opted into an auto-renewing contract, but later decided that they wanted to keep the subscription, they would have to repeatedly communicate that they wanted to continue their subscription or risk its unintentionally lapsing. That risk could be multiplied across each subscription they held.
The new clauses would also impose undue additional costs on businesses. As my right hon. Friend the Member for North East Somerset (Sir Jacob Rees-Mogg) rightly stated, all regulatory costs end up being borne by consumers, so we must approach regulation with extreme care. The Government’s approach strikes the balance of protecting consumers without compromising the benefits of rolling subscriptions and the convenience they provide.
On amendment 225, the Government recently consulted on tackling the practice of drip pricing, and we will shortly set out the next steps, following an assessment of the responses. It would be premature to amend the Bill in advance of that.
Turning to my hon. Friend the Member for Weston-super-Mare (John Penrose), I agree with the instincts behind his ideas to control the costs of red tape and regulatory burdens in new clause 31, and with many of the points made about this issue in his Government-commissioned report on competition policy and the subsequent 18-month update that he published. I suggest that together, we can do better than what is set out in the new clause. He too knows that, as my right hon. Friend the Member for North East Somerset said, all regulations are ultimately paid for by consumers. It is absolutely right that we look to minimise regulation and that we also recognise that the best form of regulation is competition, which is what we are here to promote.
In his “Power To The People” report, my hon. Friend the Member for Weston-super-Mare recommends a one in, two out solution. It will be interesting to see where we can go with that. Everybody, certainly on the Government Benches, is concerned about regulation and the increasing burden on businesses. However, if we look at some of the regulations that we imposed on business in 2021-22—this is from “Better Regulation: Government’s Annual Report”—significant regulations were put in place covering things such as making our telecommunications more secure against foreign actors, climate-related financial disclosures and making homes more efficient, which I think most people would acknowledge we should do, as well as sanctions against Russian oligarchs and the rest. Those regulations are not necessarily the burdens that many Members might consider them to be.
When we look at regulation, we have to decide what is the right thing to do—the right things to leave, the right things to take out and the right things to amend. We have made a start by updating the better regulation framework, with earlier scrutiny of regulatory proposals by the Regulatory Policy Committee so that its advice can be applied before a legislative solution has been settled on. The updated framework focuses on designing the least burdensome policies, avoiding regulation completely where possible, and minimising costs and administrative burdens where regulation is required. In parallel to our call for evidence and forthcoming consultations, we are seeking to change the culture of regulation in the UK to be more pro-growth and business friendly.
New clause 31 proposes some important further measures. It would create much stronger accountability for any future Government who failed to control red tape costs properly. It would plug an important historical loophole by including economic regulators in the better regulation framework, and it would provide extra independence for the accountancy sector in reporting on changes in regulatory burdens, so that Governments cannot be accused of marking their own homework, as my hon. Friend puts it. However, the new clause is constrained by the scope of the Bill, so it cannot plug all the historical gaps in the better regulation framework, and it makes the CMA a successor to the RPC, when there may be better ways to ensure enhanced independence.
As a result, I would suggest a better alternative approach. Any regime should recognise the economic benefits as well as costs of any changes to regulation. Accounting for them is complex: some are indirect, some are externalities and some take years to manifest or come to fruition. Individual regulators should take responsibility for reporting on their activities, including what they have done to support the growth of the businesses they regulate, as well as what additional burdens they have created or removed, and why. In each case, I agree that we will need to establish targets and metrics to monitor the success of our regulators and of Government Departments in promoting growth.
There are a few legitimate exceptions from the RPC’s scrutiny process, such as urgent or civil emergency measures, but that should not mean whole areas of the economy are exempt from its scrutiny, otherwise we would leave loopholes that mean costs are still not scrutinised and potential benefits are ignored.
Although the RPC is already an independent scrutiny body, I agree that we should find ways to ensure even stronger and more independent measurement and reporting of changes in regulatory benefits and burdens, without assuming that the best or only answer is for the CMA to take over this function, as the new clause proposes. Finally, there must be stronger accountability than at present for any Government who fail to control regulatory burdens properly.
Although we do not think it is right to accept the new clause as it stands, I accept and agree with many of the things it tries to achieve. I therefore invite my hon. Friend to work with officials and me to develop a better, stronger way of achieving his four aims through a mixture of potential Government amendments to the Bill and other measures or statements of Government policy to be released publicly before Royal Assent, where the changes fall outside the Bill’s scope. I hope these proposals are acceptable and that he will not press the new clause.
Amendment 228, which was tabled by the hon. Member for Gordon (Richard Thomson), seeks to exclude lottery tickets purchased from non-commercial society lotteries from the scope of the provisions on subscription contracts. We agree with him on this, which is why we tabled a Government amendment to that effect. I thank him for his contribution.
New clause 24, which was tabled by my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland), would require the Secretary of State to commission a review of the Competition Appeal Tribunal’s processes, independent of the CMA and the DMU. I am grateful for his focus on this important matter and for the legal knowledge he brings to bear.
The Competition Appeal Tribunal Rules 2015, which set out the tribunal’s procedures, require the Secretary of State to carry out a regular review of the rules and to publish their conclusions, which last happened in April 2022. New clause 24 would unnecessarily duplicate this work.
Turning to new clause 25, the CMA’s overarching objective is to promote competition for the benefit of consumers, and this must shape the design of its interventions and how it prioritises its work. A consumer duty would overlap with that objective and is, in our view, unnecessary.
New clause 26 would extend the right to seek damages at the Competition Appeal Tribunal to all infringements of part 4. The Bill already provides for consumer redress in respect of some provisions of part 4. Additionally, the private redress provisions in part 3 include the power for public enforcers to seek enhanced consumer measures, including financial redress for consumers.
Amendment 210 would reduce the frequency with which a trader must send reminder notices. We share the intention of my right hon. and learned Friend the Member for South Swindon to ensure that businesses and consumers are not overburdened by reminder notices. However, we believe that this amendment would negatively impact consumers by increasing the risk that they end up paying longer for unwanted subscriptions. We think that requiring traders to send reminders every six months strikes the right balance.
Amendment 211 would create a new power for the Secretary of State to make reasonable provision relating to the content and timing of reminder notices. Amendments 212 and 213 would then remove existing provisions relating to such matters from clause 252 and schedule 20. As my right hon. and learned Friend recognises, we have tabled an amendment that provides a power to amend these details through regulations, enabling the Government to respond should evidence of consumer behaviour or operational practice indicate that adjustments are necessary.
Amendments 214 to 217 would remove requirements that are designed to ensure traders provide easy and accessible means for consumers to end their subscription contracts. Instead, principles would be set out to guide the arrangements put in place by traders, and relevant provisions would be made in secondary legislation. The Government are committed to ensuring that consumers are not hindered when trying to leave a subscription contract or when trying to stop a subscription renewing—the hon. Member for Strangford (Jim Shannon) also raised that point. That is the objective behind these provisions, and it is vital that they remain in the Bill. It is also critical that consumers have flexibility when ending their contract, rather than businesses dictating the communication channel, such as a phone cancellation only. We appreciate that any communication to end a contract must be sufficiently clear to a business, as is underlined by Government amendment 102. That amendment makes it clear that the onus is on the consumer to prove that their communication was sufficiently clear.
Amendments 219 to 222 would remove the mandatory cooling-off period for subscription contracts. It is important to retain those provisions as they provide essential protections for consumers. The renewal cooling-off period protects consumers who have signed up to trials or longer term contracts. That is particularly important since our consultation showed that many people forget to cancel those subscriptions before they automatically renew. We understand, however, that some businesses are concerned about how the cooling-off period will work in practice, particularly for digital streaming services. This is an important issue to get right, so the Government will publicly consult on the return and refund rules to ensure that they are fair and practical for businesses and consumers. That will include consulting on a waiver of cooling-off rights for some products.
Amendments 223 and 224 would apply a two-year implementation period to the subscription contract provisions in the Bill. The Government fully understand that clarity is important so that businesses know when the new rules will come into effect and can make the appropriate preparations. That is why we will continue to engage with stakeholders to understand the impact of implementing these new rules.
Let me move on to the hon. Member for Bermondsey and Old Southwark (Neil Coyle)—he and I have been walking these streets for so long. Amendment 227 would ban in all circumstances the marketing of counterfeit and dangerous products online, which are already offences under current consumer protection and product safety law. The Government are committed to strengthening enforcement of these laws through the reforms in part 3 of the Bill, and recently consulted on a number of proposals in the product safety review.
Amendment 226 would confer on public enforcers the power to require removal of such material from the internet. The Government have consulted on this issue, with proposals to extend the power to apply for online interface orders to all public enforcers. The Government will publish their response shortly. Finally, the public safety review includes proposals specifically aimed at tackling the sale of unsafe goods online. We will publish a response in due course.
The amendment tabled by my right hon. Friend the Member for North East Somerset (Sir Jacob Rees-Mogg) seeks to add further anti-discrimination laws related to payment account provisions. The Government have been clear about the importance of protecting lawful free speech. It is unacceptable for banks and payment service providers to discriminate on the basis of lawfully held political views, and others such as pawnbrokers, as he mentioned. Consequently, the Government support the spirit of the amendment, but do not believe that it is necessary, principally because the Government have taken significant action to build on existing protections to resolve this issue since the amendment was tabled.
On 2 October, the Chancellor committed to amend the threshold conditions that financial services firms must meet in order to be authorised and to consult on how to deliver that. It will ensure that banks uphold their current legal duties, including requirements not to discriminate on the basis of political opinion, therefore ensuring freedom of speech. Safeguards will also be put in place to protect consumers. Banks will be required to put in place safeguards to protect consumer rights, including free speech, and regulators will be required to act when they are not complied with. In addition, the Government announced that the legal notice period for payment service contract terminations will increase to 90 days, and payment service providers will be legally required to give consumers clear, tailored explanations detailing why they closed their accounts.
I thank the hon. Member for Washington and Sunderland West (Mrs Hodgson) for all her work on the all-party parliamentary group on ticket abuse. She raised the point about the secondary ticket market. We have taken action in this area; I know she is not content with where we are today, but the CMA has new powers in the Bill to fine businesses up to 10% of turnover, which will include ticket touts. Indeed, it has already taken action against two touts, with confiscation orders of £6.1 million in 2022.
On amendment 207, tabled by the hon. Member for Brighton, Pavilion (Caroline Lucas), enforcers can already take action under the Bill to protect consumers during the transition to net zero. For example, they have powers to tackle misleading green claims. We are already making strong progress towards net zero by 2050. The UK has reduced its emissions further and faster than any other major economy.
On amendment 208, established means have long played an important, cost-effective and proportionate role in tackling and stopping unfair commercial practices. Particularly in the field of misleading advertising, bodies such as the ASA have played a key role in expanding the reach of consumer protection law compliance.
In closing—[Hon. Members: “Hurray!”] I have gone on longer than I would have liked to, but an awful lot of amendments were tabled. In closing, I hope that right hon. and hon. Members will see from the Government’s amendments that we have listened to the concerns raised during the passage of the Bill, and that we are determined that it will deliver better outcomes for consumers and small businesses.
Question put and agreed to.
New clause 7 accordingly read a Second time, and added to the Bill.
New Clause 8
Use of damages-based agreements in opt-out collective proceedings
“(1) In section 47C(9) of CA 1998 (collective proceedings: damages and costs), for paragraph (c) substitute—
‘(c) “damages-based agreement” has the same meaning as in section 58AA of the Courts of Legal Services Act 1990 but as if in subsection (3)(a) of that section, in the words before sub-paragraph (i), for “, litigation services or claims management services” there were substituted “or litigation services”.’
(2) The amendment made by subsection (1) is treated as always having had effect.”—(Kevin Hollinrake.)
This new clause (which would be inserted into Chapter 1 of Part 2 of the Bill) responds to the Supreme Court judgment in R (PACCAR Inc) v Competition Appeal Tribunal [2023] UKSC 28. It provides that a damages-based agreement is only unenforceable in opt-out collective proceedings before the Competition Appeal Tribunal if the agreement is with a provider of advocacy or litigation services.
Brought up, read the First and Second time, and added to the Bill.
New Clause 9
Mergers of energy network enterprises
“Schedule (Mergers of energy network enterprises) makes provision amending Part 3 of EA 2002 and Schedule 16 to the Energy Act 2023 in relation to mergers involving energy network enterprises.”—(Kevin Hollinrake.)
This new clause (which would be inserted into Chapter 2 of Part 2 of the Bill) introduces the Schedule inserted by NS1 which amends Part 3 of the Enterprise Act 2002 to facilitate the investigation of mergers involving energy networks enterprises under sections 68B or 68C of that Act and under section 22 or 33 of that Act by the same CMA Group, and to make other minor amendments to provisions relating to mergers involving energy network enterprises.
Brought up, read the First and Second time, and added to the Bill.
New Clause 10
Power to make a reference after previously deciding not to do so
“(1) Section 131B of EA 2002 (market studies and the making of decisions to refer: time limits) is amended as follows.
(2) In the heading, after ‘time-limits’ insert ‘etc’.
(3) In subsection (7), for ‘This section is’ substitute ‘Subsections (4) to (6) are’.
(4) After subsection (7) insert—
‘(8) Where the CMA—
(a) has published a market study notice, and
(b) has decided not to make a reference under section 131 in relation to the matter specified in the notice,
the CMA may subsequently make a reference under section 131 in relation to the matter (without first publishing a market study notice in relation to the matter) only where subsection (9) applies.
(9) This subsection applies where—
(a) the reference under section 131 is made two years or more after the publication of the market study report in relation to the market study notice, or
(b) there has been a material change in circumstances since the preparation of the report.’”—(Kevin Hollinrake.)
This new clause (which would be inserted into Chapter 3 of Part 2 of the Bill) responds to the decision of the Competition Appeal Tribunal in Apple v CMA [2023] CAT 2. It allows the CMA to make a reference under section 131 of the Enterprise Act 2002, if it has previously made a decision not to do so, in the two cases mentioned in what will be new subsection (9) of section 131B of that Act.
Brought up, read the First and Second time, and added to the Bill.
New Clause 11
Taking action in relation to regulated markets
“(1) In Chapter 4 of Part 4 of EA 2002 (market studies and market investigations: supplementary), section 168 (regulated markets) is amended as follows.
(2) In subsection (3) omit paragraph (j).
(3) In subsection (4)—
(a) in paragraph (g), for ‘the duty of the Director General of Electricity Supply for Northern Ireland under article 6 of that Order’ substitute ‘the objective and duties of the Northern Ireland Authority for Utility Regulation under Article 12 of the Energy (Northern Ireland) Order 2003 (S.I. 2003/419 (N.I. 6))’;
(b) omit paragraph (l);
(c) in paragraph (m), for ‘the duties of the Director General of Gas for Northern Ireland under article 5 of that Order’ substitute ‘the objective and duties of the Northern Ireland Authority for Utility Regulation under Article 14 of the Energy (Northern Ireland) Order 2003’;
(d) in paragraph (r), for ‘Monitor’ substitute ‘NHS England’.
(4) In subsection (5), in paragraph (ia), for ‘Monitor’ substitute ‘NHS England’.”—(Kevin Hollinrake.)
This new clause (which would be inserted into Chapter 3 of Part 2 of the Bill) tidies up section 168 of the Enterprise Act 2002 to remove spent references and to correct references that have become out of date.
Brought up, read the First and Second time, and added to the Bill.
New Clause 12
Meaning of “working day” in Parts 3 and 4 of EA 2002
“(1) Part 3 of EA 2002 (mergers) is amended as follows.
(2) In Chapter 1 (duty to make references)—
(a) in section 25 (extension of time limits)—
(i) in subsection (1), after ‘20’ insert ‘working’;
(ii) in subsection (5), in paragraph (b), after ‘10’ insert ‘working’;
(b) omit section 32 (supplementary provision for the purposes of section 25);
(c) in section 34ZA(3) (time limits for decisions about references) omit the definition of ‘working day’;
(d) in section 34ZB (extension of time limits) omit subsection (9);
(e) in section 34ZC (sections 34ZA and 34ZB: supplementary) omit subsection (9).
(3) In Chapter 2 (public interest cases)—
(a) in section 54 (decision of Secretary of State in public interest cases)—
(i) in subsection (5), after ‘30’ insert ‘working’;
(ii) omit subsection (8);
(b) in section 56 (competition cases where intervention on public interest grounds ceases)—
(i) in subsection (4), in paragraph (b), after ‘20’ insert ‘working’;
(ii) omit subsection (5).
(4) In Chapter 4 (enforcement), in section 73A (time limits for consideration of undertakings) omit subsection (12).
(5) In Chapter 5 (supplementary)—
(a) in section 129(1) (other interpretative provisions), at the appropriate place insert—
‘“working day” means any day other than—
(a) a Saturday or Sunday, or
(b) a day that is a bank holiday in any part of the United Kingdom under the Banking and Financial Dealings Act 1971.’;
(b) in section 130 (index of defined expressions), at the appropriate place insert—
(6) In Part 4 of EA 2002 (market studies and market investigations), in section 151 (public interest intervention cases: interaction with general procedure)—
(a) in subsection (3), after ‘20’ insert ‘working’;
(b) in subsection (5), after ‘20’ insert ‘working’;
(c) omit subsection (6);
(d) at the end insert—
‘(7) In this section, “working day” means any day other than—
(a) a Saturday or Sunday, or
(b) a day that is a bank holiday in any part of the United Kingdom under the Banking and Financial Dealings Act 1971.’
(7) In regulation 2(1) of the Enterprise Act 2002 (Merger Prenotification) Regulations 2003 (S.I. 2003/1369), for the definition of ‘working day’ substitute—
‘“working day” means any day other than—
(a) a Saturday or Sunday, or
(b) a day that is a bank holiday in any part of the United Kingdom under the Banking and Financial Dealings Act 1971.’”—(Kevin Hollinrake.)
This new clause (which would be inserted into Chapter 5 of Part 2 of the Bill) amends Parts 3 and 4 of the Enterprise Act 2002, and the Enterprise Act 2002 (Merger Prenotification) Regulations 2003, so that they are consistent in providing that a bank holiday in any part of the United Kingdom is not a working day.
Brought up, read the First and Second time, and added to the Bill.
New Clause 13
ADR fees regulations
“(1) The Secretary of State may by regulations make provision about the following descriptions of fees, namely—
(a) fees to be paid by applicants for accreditation under section 289(1);
(b) fees to be paid by applicants for the variation of their accreditation under section 289(3B);
(c) fees to be paid by accredited ADR providers under section 292(1).
(2) The power to make provision about a description of fees includes power to provide—
(a) for fees of different specified amounts to be payable in different cases or circumstances;
(b) for cases or circumstances in which no fees are to be payable;
(c) in the case of fees to be paid under section 292, the times at which the fees are to be paid.
(3) In making regulations under this section the Secretary of State must have regard to the need to secure that, taking one year with another—
(a) the total amount of fees paid does not exceed the costs to the Secretary of State of carrying out functions under this Chapter;
(b) the total amount of fees paid under section 289(1) does not exceed the costs to the Secretary of State of processing and determining applications for accreditation;
(c) the total amount of fees paid under section 289(3B) does not exceed the costs to the Secretary of State of processing and determining applications for the variation of an accreditation.
(4) Regulations under this section are subject to the negative procedure.”—(Kevin Hollinrake.)
This new clause (which would be inserted into Chapter 4 of Part 4 of the Bill) confers power to make regulations about the fees payable under clauses 289 and 292. The power includes power to prescribe cases or circumstances in which no fee is required to be paid.
Brought up, read the First and Second time, and added to the Bill.
New Clause 14
Power to require information about competition in connection with motor fuel
“(1) The CMA may require an undertaking involved in, or connected with, the distribution, supply or retail of motor fuel (‘U’) to give specified information to it where it considers that the information would assist the CMA in—
(a) assessing competition in the United Kingdom in connection with the retail of motor fuel;
(b) publishing information about competition in the United Kingdom in connection with the retail of motor fuel;
(c) making proposals, or giving information or advice, to the Secretary of State about the need for, or the potential for, action to be taken (whether by the Secretary of State or another person) and what that action should be for the purposes of—
(i) increasing competition in the United Kingdom in connection with the retail of motor fuel;
(ii) benefiting consumers of motor fuel;
(d) assessing the effectiveness of any action taken as a result of proposals made, or information or advice given, under paragraph (c).
(2) The power conferred by subsection (1) is to be exercised by giving U a notice (an ‘information notice’).
(3) The CMA must include in an information notice—
(a) the time at which, or the frequency with which, the information must be given to the CMA;
(b) the manner and form in which the information must be given to the CMA;
(c) information about the possible consequences of not complying with the notice.
(4) The power under this section to require U to give information to the CMA includes the power to—
(a) require U to take copies of or extracts from information;
(b) require U to obtain or generate information;
(c) require U to collect or retain information that they would not otherwise collect or retain;
(d) if any specified information is not given to the CMA, require U to state, to the best of their knowledge and belief, both where that information is and why it has not been given to the CMA.
(5) An undertaking may not be required under this section to give the CMA a privileged communication.
(6) A ‘privileged communication’ is a communication—
(a) between a professional legal adviser and their client, or
(b) made in connection with, or in contemplation of, legal proceedings,
which in proceedings in the High Court would be protected from disclosure on grounds of legal professional privilege.
(7) In the application of this section to Scotland—
(a) the reference to the High Court is to be read as a reference to the Court of Session, and
(b) the reference to legal professional privilege is to be read as a reference to the confidentiality of communications.
(8) In this section—
‘consumer’ has the same meaning as in Part 4 of EA 2002 (see section 183(1) of that Act);
‘motor fuel’ has the same meaning as in the Motor Fuel (Composition and Content) Regulations 1999 (see regulation 2 of those Regulations), but as if paragraphs (c) and (d) of the definition of that term were omitted;
‘specified’ means—
(a) specified, or described, in the information notice, or
(b) falling within a category which is specified, or described, in the information notice;
‘United Kingdom’ includes a part of the United Kingdom.
(9) The Secretary of State may by regulations amend the definition of ‘motor fuel’ in subsection (8).
(10) Regulations under subsection (9) are subject to the negative procedure.
(11) In this Chapter, ‘undertaking’ has the same meaning it has for the purposes of Part 1 of CA 1998 (competition: agreements, abuse of dominant position etc).”—(Kevin Hollinrake.)
This new clause (which, along with the new clauses inserted by NC15 to NC21, would form a new first Chapter in Part 5 of the Bill) allows the CMA to give an information notice to undertakings involved in the distribution, supply or retail of petrol or diesel requiring them to provide the CMA with information for the purposes mentioned in subsection (1) of the clause.
Brought up, read the First and Second time, and added to the Bill.
New Clause 15
Penalties for failure to comply with notices under section (Power to require information about competition in connection with motor fuel)
“(1) The CMA may impose a penalty on an undertaking where it considers that the undertaking has, without reasonable excuse—
(a) failed to comply with an information notice under section (Power to require information about competition in connection with motor fuel);
(b) destroyed, otherwise disposed of, falsified or concealed, or caused or permitted the destruction, disposal, falsification or concealment of, any document which the undertaking has been required to produce by an information notice under that section;
(c) given the CMA information which is false or misleading in a material particular in connection with an information notice under that section;
(d) given information which is false or misleading in a material particular to another undertaking knowing that the information was to be used for the purpose of giving information to the CMA in connection with an information notice under that section.
(2) The amount of a penalty imposed on an undertaking under this section may be such amount as the CMA considers appropriate, provided it does not exceed the amounts set out in subsection (4).
(3) The amount of a penalty under this section must be—
(a) a fixed amount,
(b) an amount calculated by reference to a daily rate, or
(c) a combination of a fixed amount and an amount calculated by reference to a daily rate.
(4) The maximum amounts of a penalty that may be imposed on an undertaking are—
(a) in the case of a fixed amount, an amount equal to 1% of the total value of the undertaking’s turnover (both inside and outside the United Kingdom);
(b) in the case of an amount calculated by reference to a daily rate, for each day an amount equal to 5% of the total value of the undertaking’s daily turnover (both inside and outside the United Kingdom);
(c) in the case of a combination of a fixed amount and an amount calculated by reference to a daily rate, the amounts mentioned in paragraph (a), in relation to the fixed amount, and paragraph (b), in relation to the amount calculated by reference to a daily rate.
(5) In imposing a penalty under this section by reference to a daily rate—
(a) no account is to be taken of any days before the service on the undertaking concerned of the provisional penalty notice under section 112(A1) of EA 2002 (as applied by section (Procedure and appeals)), and
(b) unless the CMA determines an earlier day (whether before or after the penalty is imposed), the amount payable ceases to accumulate at the beginning of the day on which the undertaking first complies with the requirement in question.
(6) The Secretary of State may by regulations make provision for determining the turnover (both inside and outside the United Kingdom) of an undertaking for the purposes of this section.
(7) The regulations may, among other things—
(a) make provision about amounts which are, or are not, to be included in an undertaking’s turnover;
(b) make provision about the date or dates by reference to which an undertaking’s turnover is to be determined;
(c) confer on the CMA the power to determine and make provision about matters specified in the regulations (including the matters mentioned in paragraphs (a) and (b)).
(8) Regulations under subsection (6) are subject to the negative procedure.”—(Kevin Hollinrake.)
This new clause would allow the CMA to impose financial penalties on undertakings who fail to comply with an information notice given under the new clause inserted by NC14.
Brought up, read the First and Second time, and added to the Bill.
New Clause 16
Procedure and appeals
“(1) Sections 112 (penalties: main procedural requirements), 113 (payments and interest by instalments), section 114 (appeals) and 115 (recovery of penalties) of EA 2002 apply in relation to a penalty imposed under section (Penalties for failure to comply with notices under section (Power to require information about competition in connection with motor fuel)) as they apply in relation to a penalty imposed under section 110(1) of that Act.
(2) For the purposes of this section—
(a) sections 112 to 115 of EA 2002 are to be read as if references to ‘the appropriate authority’ were references to the CMA only;
(b) section 114(5A) of EA 2002 is to be read as if the words ‘In the case of a penalty imposed on a by the CMA or OFCOM,’ were omitted;
(c) section 114(12) of EA 2002 is to be read as if, for paragraph (b), there were substituted—
‘(b) “the relevant guidance” means the statement of policy which was most recently published under section (Statement of policy on penalties) of the Digital Markets, Competition and Consumers Act 2024 at the time of the act or omission giving rise to the penalty.’”—(Kevin Hollinrake.)
This new clause applies provision in sections 112 to 115 of the Enterprise Act 2002, with modifications, for the purposes of the new clause inserted by NC15.
Brought up, read the First and Second time, and added to the Bill.
New Clause 17
Statement of policy on penalties
“(1) The CMA must prepare and publish a statement of policy in relation to the exercise of powers to impose a penalty under section (Penalties for failure to comply with notices under section (Power to require information about competition in connection with motor fuel)).
(2) The statement must include a statement about the considerations relevant to the determination of—
(a) whether to impose a penalty under section (Penalties for failure to comply with notices under section (Power to require information about competition in connection with motor fuel)), and
(b) the nature and amount of any such penalty.
(3) The CMA may revise its statement of policy and, where it does so, must publish the revised statement.
(4) In preparing or revising its statement of policy the CMA must consult—
(a) the Secretary of State, and
(b) such other persons as the CMA considers appropriate.
(5) A statement of policy, or revised statement, may not be published under this section without the approval of the Secretary of State.
(6) Subsection (7) applies where the CMA proposes to impose a penalty under section (Penalties for failure to comply with notices under section (Power to require information about competition in connection with motor fuel)) on an undertaking.
(7) The CMA must have regard to the statement of policy most recently published under this section at the time of the act or omission giving rise to the penalty when deciding—
(a) whether to impose the penalty, and
(b) if so, the amount of the penalty.”—(Kevin Hollinrake.)
This new clause requires the CMA to publish a statement of policy about the imposition of penalties under the new clause inserted by NC15.
Brought up, read the First and Second time, and added to the Bill.
New Clause 18
Offences etc
“Destroying or falsifying information
(1) A person (“P”) commits an offence if, having been required to give information to the CMA under section (Power to require information about competition in connection with motor fuel), P—
(a) intentionally or recklessly destroys or otherwise disposes of it, falsifies or conceals it, or
(b) causes or permits its destruction, disposal, falsification or concealment.
False or misleading information
(2) A person (“P”) commits an offence if—
(a) P gives information to the CMA in connection with an information notice under section (Power to require information about competition in connection with motor fuel),
(b) the information is false or misleading in a material particular, and
(c) P knows that it is or is reckless as to whether it is.
(3) A person (“P”) commits an offence if P gives information to another person which is false or misleading in a material particular and P—
(a) either—
(i) knows the information to be false or misleading in a material particular, or
(ii) is reckless as to whether the information is false or misleading in a material particular, and
(b) knows that the information will be given to the CMA in connection with an information notice under that section.
Sentences
(4) A person guilty of an offence under this section is liable—
(a) on summary conviction in England and Wales, to a fine;
(b) on summary conviction in Scotland or Northern Ireland, to a fine not exceeding the statutory maximum;
(c) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both.
Offences by officers of a body corporate etc
(5) If an offence under this section committed by a body corporate is proved—
(a) to have been committed with the consent or connivance of an officer of the body corporate, or
(b) to be attributable to neglect on the part of an officer of the body corporate,
the officer as well as the body corporate is guilty of the offence and liable to be proceeded against and punished accordingly.
(6) If the affairs of a body corporate are managed by its members, subsection (5) applies in relation to the acts and defaults of a member in connection with the member’s functions of management as if the member were an officer of the body corporate.
(7) If an offence under this section committed by a partnership in Scotland is proved—
(a) to have been committed with the consent or connivance of a partner, or
(b) to be attributable to neglect on the partner’s part,
the partner as well as the partnership is guilty of the offence and liable to be proceeded against and punished accordingly.
(8) In subsection (7), “partner” includes a person purporting to act as a partner.”—(Kevin Hollinrake.)
This new clause makes it an offence for a person to destroy or falsify information the person is required to give to the CMA by virtue of an information notice given to the person under the new clause inserted by NC14 or to provide the CMA with false or misleading information in connection with such an information notice.
Brought up, read the First and Second time, and added to the Bill.
New Clause 19
Penalties under section (Penalties for failure to comply with notices under section (Power to require information about competition in connection with motor fuel)) and offences under section (Offences etc)
“(1) The CMA may not impose a penalty on a person under section (Penalties for failure to comply with notices under section (Power to require information about competition in connection with motor fuel)) in relation to an act or omission which constitutes an offence under section (Offences etc) if the person has, in relation to that act or omission, been found guilty of that offence.
(2) A person may not be found guilty of an offence under section (Offences etc) by virtue of an act or omission if the person has paid a penalty imposed under section (Penalties for failure to comply with notices under section (Power to require information about competition in connection with motor fuel)) in relation to that act or omission.”—(Kevin Hollinrake.)
This new clause prevents a person from being charged a penalty under the new clause inserted by NC15, and being found guilty of an offence under the new clause inserted by NC18, in respect of the same acts or omissions.
Brought up, read the First and Second time, and added to the Bill.
New Clause 20
Information sharing
“In Schedule 14 to EA 2002 (provisions about disclosure of information) at the appropriate place insert—
“Chapter A1 of Part 5 of the Digital Markets, Competition and Consumer Act 2024.””—(Kevin Hollinrake.)
This new clause provides that the restrictions on the disclosure of information contained in Part 9 of the Enterprise Act 2002 apply to information that comes to the CMA in connection with the exercise of its functions under the new first Chapter of Part 5 of the Bill to be formed by the new clauses inserted by NC14 to NC21.
Brought up, read the First and Second time, and added to the Bill.
New Clause 21
Expiry of this Chapter
“(1) This Chapter, apart from subsection (5) of this section and section (Information sharing), expires at the end of the relevant period.
(2) The “relevant period” means the period of five years beginning with the day on which this Act is passed.
(3) The Secretary of State may by regulations amend this section to change the definition of the “relevant period”.
(4) Regulations under subsection (3) are subject to the affirmative procedure.
(5) The expiry of this Chapter does not affect its continued operation in relation to any information notice given under section (Power to require information about competition in connection with motor fuel) before its expiry.”—(Kevin Hollinrake.)
This new clause provides that the new first Chapter of Part 5 of the Bill to be formed by the new clauses inserted by this Amendment, and NC14 to NC19, expires five years after it comes into force, unless the Secretary of State makes regulations extending the period for which the Chapter has effect
Brought up, read the First and Second time, and added to the Bill.
New Clause 22
Removal of limit on the tenure of a chair of the Competition Appeal Tribunal
“In Schedule 2 to EA 2002 (the Competition Appeal Tribunal), in paragraph 2 (tenure etc) omit sub-paragraph (2).”—(Kevin Hollinrake.)
This new clause (which would be inserted into Part 5 of the Bill) removes the prohibition on a person being a chair of the Competition Appeal Tribunal for more than 8 years.
Brought up, read the First and Second time, and added to the Bill.
New Clause 29
Contract renewal: option to opt in
“(1) Before a trader enters into a subscription contract with a consumer where section 247(2) applies, the trader must ask the consumer whether they wish to opt-in to an arrangement under which the contract renews automatically at one or more of the following times—
(a) after a period of six months and every six months thereafter, or
(b) if the period between the consumer being charged for the first and second time is longer than six months, each time payment is due.
(2) If the consumer does not opt-in to such an arrangement, the trader must provide a date by which the consumer must notify the trader of the consumer’s intention to renew the contract, which must be no earlier than 28 days before the renewal date.
(3) If the consumer has not—
(a) opted into an arrangement under subsection (1), or
(b) given notification of the consumer’s intention to renew by the date specified under subsection (2),
the contract will lapse on the renewal date.”—(Alex Davies-Jones.)
This new clause would allow the consumer to opt-out of their subscription auto-renewing every six months, or if the period between payments is longer than six months, before every payment. If the consumer does not opt-in to auto-renewal, they would be required to notify the trader manually about renewing.
Brought up, and read the First time.
Question put, That the clause be read a Second time.
Kevin Hollinrake
I beg to move, That the Bill be now read the Third time.
The UK’s continued tech success depends on markets that are fiercely competitive, and where the best companies can flourish and create the innovations that spur growth. With this Bill, we will establish new, more effective tools to address the unique barriers to competition in digital markets, allowing the CMA to proactively drive more dynamic markets and prevent harmful practices, such as making it difficult to switch between operating systems. With this Bill, we will help the UK technology industry to grow, creating room for small businesses with great ideas to flourish. This Bill will deliver tangible benefits to British consumers and British businesses alike.
The Bill was welcomed on both sides of the House on Second Reading. The Select Committee Chairs from this House and the other place, as well as hon. Members from a number of parties, including the hon. Member for Pontypridd (Alex Davies-Jones) and my hon. Friend the Member for Weston-super-Mare (John Penrose), have repeatedly spoken of the Bill’s importance. I thank them for their work and for working with us so constructively. On Report, the Government made a number of amendments to the Bill, reflecting the important discussions between stakeholders and Members of this House. I thank Members from across the House for their contributions during the passage of the Bill.
I will conclude by thanking all my predecessors who have taken the Bill from consultation to this House, my officials, the Clerks, and the Chairs and members of the Public Bill Committee for their line-by-line scrutiny, and for their collaborative and constructive approach.
Alex Davies-Jones
May I briefly join the Minister in thanking all the members of the Public Bill Committee and the Clerks of the House? I give personal thanks to my hon. Friend the Member for Feltham and Heston (Seema Malhotra) for working with me so collaboratively on getting the Bill to a good place. Let me also place on the record my thanks to Freddie Cook, in my team, for all her work on the Bill.
Labour welcomes this Bill, having led the way in calling for large tech companies to be properly regulated to ensure competition in digital markets. We are pleased to see the Bill in a good place as it goes to the other place for further consideration. We have long called for measures to protect consumers, enhance innovation and promote competition in digital markets to unlock growth and level the playing field for smaller businesses. That could not be more important in the midst of a cost of living crisis. We have supported the passage of this Bill and it is now important that these new powers that are given to the CMA to ensure competition in digital markets are not watered down as the Bill progresses. We will be following closely, as will colleagues from across the House, and we look forward to the Bill finally coming into action.
Richard Thomson
May I, too, add my thanks to the Bill Committee members and to all the Members who have contributed throughout the passage of the Bill? I also thank the Clerks for their wise guidance and assistance, and Sarah Callaghan, in the SNP’s research office, for the diligent work she has done on this.
I have said throughout that the amendments we sought to put forward were merely to fill the potholes that we saw in the Bill. It did not need a special fund from the Prime Minister to fill them; all it needed was for some action to be taken on greenwashing and drip pricing, and I am sure the Minister can understand the rest from what I have said. We think those issues still need addressing, but my concern is now about the impact that the Bill will or will not have on big tech and the freedom of the markets our consumers operate in. The success of the Bill will be measured not in the size of the majority that the Government could have had tonight, but in the impact it has on consumers and small businesses in the weeks, months and years ahead.
Question put and agreed to.
Bill accordingly read the Third time and passed.
Business without Debate
(5 months, 3 weeks ago)
Commons ChamberRead Full debate Read Hansard Text
Draft Justification Decision (Scientific Age Imaging) Regulations 2023
(5 months, 3 weeks ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Committee divided: - Ayes: 9 / Noes: 1 - Question accordingly agreed to.
The Minister of State, Ministry of Justice (Edward Argar)
I beg to move,
That the Committee has considered the draft Justification Decision (Scientific Age Imaging) Regulations 2023.
It is a pleasure to serve under your chairmanship, Mr Gray. It is also a pleasure in my new brief, as Minister of State for Prisons, Parole and Probation, to be shadowed by the hon. Member for Brentford and Isleworth. We know each other well and, while I suspect there may be occasions in this room or beyond when we disagree, she knows that I have huge respect for her. I look forward to working with her in this role.
The draft statutory instrument sets out the affirmative decision made by the Lord Chancellor and Secretary of State for Justice on the Home Office’s application to use ionising radiation, also known as X-rays, as a scientific method of age assessment for age-disputed individuals subject to immigration control. The instrument is technical and legal, but none the less important.
Under the Justification of Practices Involving Ionising Radiation Regulations 2004, the Lord Chancellor has the powers as the nominated justifying authority to determine whether the individual or societal benefits of the practice outweigh the health detriments, and therefore whether it can be justified. Following a thorough statutory application, consultation and decision-making process, the justifying authority has determined that the Home Office’s proposed use of X-rays is justified.
If Parliament approves the draft instrument, the Government will bring it into force at the earliest possible date to allow the Home Office to use that justification in bringing forward its age-assessment policies. This SI legally formalises the decision by the justifying authority—the Secretary of State under the 2004 regulations—and sets out the parameters under which the approval is to be granted, which have been communicated to the Home Office.
I recognise that there has been a lively debate more broadly on age assessment, which the draft instrument relates to, but I am sure that hon. Members appreciate that I can speak only to this justification decision, as it is imperative that the justifying authority is functionally separate from other persons concerned with the promotion or utilisation of the practice. I will speak only to the use of X-rays as a scientific method of age assessment; any other method falls outside the scope of this statutory instrument.
I understand that the parallel debate on the Home Office’s statutory instrument on scientific age assessment under the Nationality and Borders Act 2022 is due to be held in another Delegated Legislation Committee this evening. That is the right forum for the Home Office to outline how it intends to use this technical approval to support its policies and to field any questions outside the scope of the draft instrument. It is for the other SI debate to consider the merits of the policy itself.
The justifying authority has determined that the proposed practice by the Home Office is justified. This draft instrument provides the legal basis for the use of that practice. The justification decision was made through thorough review of the proposed practice. It considered and weighed the individual and societal benefits, such as preventing children from being misidentified as adults and ensuring that individuals are treated appropriately within the immigration system, as well as addressing the financial costs to the state against the detriments of the practice.
In reaching a decision, the Ministry of Justice—as set out in the additional background document supplied to the Committee—stated that the justifying authority
“has determined that the proposed practice was a new class or type of practice and that this can be justified, subject to the following conditions:
Biological age assessment involving ionising radiation is limited to radiography of the third molar and/or of the hand/wrist only. The use of computed tomography for the purposes of assessing age is not permitted.
The results of radiography of the third molar and/or of the hand/wrist must only be used to assess whether there is more support of the claimed age of the age disputed person, or the assigned age social workers have assessed them to be following a Merton compliant age assessment. A likelihood ratio approach must be used to compare the weight of evidence.
In reaching this determination the JA”—
the Secretary of State—
“has taken into account the views of the JLG and the conclusions of its deliberations on this application. The Health & Safety Executive (NI), Office for Nuclear Regulation, Environmental Agency, Scottish Environmental Protection Agency, Natural Resources Wales and Department of the Environment for Northern Ireland have confirmed that this application falls outside of their regulatory interests.”
The UK Health Security Agency, the Health and Safety Executive, and the Food Standards Agency were also consulted, and they noted a number of points. Alongside that, of course, we consulted the Ministry of Justice’s own science department. The Lord Chancellor wishes to thank the consultees for their detailed and wide-ranging contributions in helping him make this technical legal decision. On that basis, I commend the draft instrument to the House.
Ruth Cadbury (Brentford and Isleworth) (Lab)
It is a pleasure to serve under you, Mr Gray, and to follow the right hon. Member for Charnwood. It is unusual for me, having only been in my post for two months, to not be the newbie in the room.
The change made by the draft statutory instrument allows the Government to seek to verify the age of unaccompanied asylum seeking children. It is more than 18 months since the legislative framework was set in the Nationality and Borders Act 2022 for these assessments to take place, yet we have still not had some rather straightforward questions answered. We have had, by my count, four different Home Secretaries since then, so it is strange that we have not had these answers. While I accept the limitations of our business here today, I cannot avoid the fact that several questions remain, among them the cost and impact to the NHS, which is already massively under pressure. We would expect the Government to address those questions in the impact assessment, but as far as I am aware no such assessment has been provided. Don’t worry, though, because the Government have said that
“the policy and design are still under development”.
They appear to be building the bridge as they cross it.
It is unclear to me, as it was to the Secondary Legislation Scrutiny Committee in the other place, why this instrument is being moved forward while the policy and process are still being developed. Looking at the SI, I was surprised to see that the Government do not know what the cost of the new imaging process will be. My hon. Friend the Member for Aberavon (Stephen Kinnock) asked the then Home Secretary, the right hon. and learned Member for Fareham (Suella Braverman), about it in December 2022, and she said she did not know. Does the Minister now have an estimate for the cost to the public purse of rolling out the policy?
In the submissions made to the Lords Committee, the lack of an assessment was a major issue for several stakeholders, some of whom the Minister has already named. That matters because of not only the costs, but the wider policy implications that the policy poses. The SI says the Secretary of State has a power to make regulations specifying a scientific method, but that is conditional on the Secretary of State having determined that the method is appropriate for assessing age after seeking scientific advice. The Minister will point to the Age Estimation Science Advisory Committee that has been set up, but beyond that, what steps have the Home Office taken to see the opinions and views of other stakeholders on this practice?
I have read the very real concerns that the Royal College of Paediatrics and Child Health has about the policy. The House of Lords Committee expressed palpable frustration about trying to get basic information about this case and the consultation between the Government and the wider medical community. These questions matter as there is by no means any evidence of a clear consensus among experts. In fact, a report in the New Scientist suggested that the widely held view among experts is that age verification is based on “pseudoscience”. The Government claim that 49% of asylum claims with a disputed age were found to be adults. Has the Home Office assessed how accurate this new method will be?
Additionally, what consultations were made with local authorities and medical authorities, both of which will be on the frontline of dealing with age assessments? I know from talking to the chief executive of my own local authority, Hounslow, the cost and difficulty of carrying out these age assessments, because it is the duty of local authorities to carry them out.
A range of expert bodies representing everything from social work to dentistry have warned that these medical procedures for non-therapeutic purposes are unethical. Even if we leave aside the questions of morals and ethics, we can all surely see that the full implementation of the changes foreseen by these regulations will likely face formidable barriers on an entirely practical level. What thought have the Government given to those barriers, and what steps does the Department plan to take by way of mitigation? Those are just two further questions to which I believe the Government have an absolute duty to provide clear answers. I am always open to the chance, however remote, that the Minister may surprise me and let me know what consideration the Home Office and the Ministry of Justice have given to those questions.
That brings me to the issue of the review mechanism. I can see that the Ministry of Justice will review the use of X-rays by the Home Office. Will the Minister be able to let us know what steps will be taken as part of this review mechanism? What information will be made public and when will the review take place?
I will finish more broadly, on a point about migration and the approach taken by the Government. Just last week, we saw their flagship policy on Rwanda rejected by the Supreme Court, despite years and years of claims—
The Chair
Order. I fear those matters are beyond the scope of the statutory instrument we are discussing today, so perhaps the hon. Lady might like to return to that.
Ruth Cadbury
Thank you, Mr Gray. That was one example of a scheme which the Government were warned would be costly and would not work. We fear that that will also be the case for this statutory instrument. From my own casework experience, I must confess that I am deeply sceptical about the Home Office’s claims about its ability to deliver its policies.
In summary, I hope that the Minister can enlighten us about the costs, the lack of an impact assessment, the review process, and the engagement that will take place with groups such as the Royal College of Paediatrics and Child Health especially, which has raised its own concerns about this policy. I hope that we can see some much-needed transparency on this issue.
The Chair
I call the hon. Member for Hemsworth to speak. [Interruption.] Perhaps I should call the Scottish National party spokesperson, the hon. Member for Glasgow South West, to speak first. I did not realise that he was planning to speak.
The Chair
I beg your pardon. It is also very kind of you to call me Sir James, but I am afraid that Mr Gray is all I get.
Chris Stephens
Thank you, Mr Gray. I have been bobbing, and I would have thought that a Glaswegian would have spotted a fellow Glaswegian. It is a pleasure to see you in the Chair.
As the Minister has outlined, this is perhaps a warm-up act for the Delegated Legislation Committee at 6 o’clock, which I will certainly attend. I will try to obey your earlier guidance, Mr Gray. I think it is sufficient to say that this decision is not without controversy. It has been criticised by a number of human rights groups. Their concern is particularly for people who have suffered incredible trauma. The Age Estimation Scientific Advisory Committee looked at this. Its evidence is worth noting and it is even included in the explanatory memorandum; I will certainly refer to points 7.5 and 7.8.
As I understand it, someone would have to consent to this particular test. Could the Minister tell me how the Government will take a view, if someone does not provide consent? We are being told by the Age Estimation Scientific Advisory Committee that there is no method, biological or social worker-led, which can protect age precision. It can only determine whether the age claimed is possible. That is what it says in the explanatory memorandum. It suggests to me that there is a lack of justification for putting forward this particular statutory instrument. As the shadow Minister, the hon. Member for Brentford and Isleworth, said, what is the cost? There will certainly be a cost to the reputation of the country if it goes through. The Royal College of Paediatrics and Child Health, which has been referred to, has said that
“x-ray imaging for a non-medical purpose is not ethical”.
Where does that leave the justification that the Department has come up with? It has also said that
“x-rays to determine age can be widely inaccurate”.
Does that not suggest that for someone who is going through a potentially life-changing decision like seeking sanctuary in the United Kingdom, having a test that is unethical, cannot predict properly and could be widely inaccurate surely cannot be justified? Is that not the case, Minister?
Jon Trickett
I will try to be reasonably brief, although I need to repeat some of the points that have been made. First, we are not dealing with a huge number of people—over six years, from 2016 to 2022, there were only 700 people a year who were said to be under the age they were claiming to be. Seven hundred a year—that is perhaps two a day. Most of those people have already been identified using other techniques. It is therefore hard to see what the Minister thinks will be added by doing this very unethical and slightly dangerous procedure. Will he tell us how many people he thinks are escaping scrutiny at present?
Secondly, Professor Andrew Rowland, the officer for child protection at the Royal College of Paediatrics, says that the evidence shows that using X-rays to determine age is “widely inaccurate”, and that the “practice is ultimately unethical”. He goes on to say that we will be exposing children to radiation.
There is, surprisingly—perhaps not surprisingly, given the nature of the British establishment—the Age Estimation Science Advisory Committee, presumably to provide advice to the Government. It talks about informed consent, which is my third point. How on earth can we explain to people, many of whom will be below the age of majority, and who may be frightened and may not have English as their mother tongue, in a way they can understand, the risks of radiation exposure engaged in the procedure—x-raying a single tooth—that they are about to undergo? It raises the question in my mind that informed consent, which is a basic requirement imposed on medics generally and on the health service, will be lacking in significant numbers of cases. That is why I am not convinced by the Minister’s arguments, and why I could not possibly vote for this measure, given the arguments he has made.
What are the Government doing? They are effectively taking the power to bully these people by saying, “If you don’t have this X-ray, there will be a presumption that somehow you are not under the age of consent.”
Dr Thérèse Coffey (Suffolk Coastal) (Con)
It is the Age Estimation Scientific Advisory Committee which recommended the use of MRI and X-ray methods. The hon. Gentleman refers to this procedure being a potential risk to somebody’s life—would he suggest to that same person that they never have an X-ray, ever? It feels as if we are stretching the argument that he is trying to put across.
Jon Trickett
I am complaining about the fact that this procedure will be done to children, who are not capable of giving informed consent, which is a basic principle of medical practice. That is my point. Here is the thing: there is no evidence whatsoever that these X-rays will demonstrate the age of the person—the victim. The scientists are not saying that to the Minister. If he can say otherwise, let him say so, but the people who are responsible for this and the advisory committee do not think the procedure produces sufficient evidence.
I will just make one further point. Where are the practitioners doing these x-rays coming from? According to the Royal College of Radiologists, there is a massive under- supply of clinical radiologists in our country. In fact, by 2027, we are going to need an additional 3,365 clinical radiologists. We are already massively under capacity. I can only imagine that this will mean diverting people from looking after the health of ourselves, our friends, our neighbours and our citizens in order to carry out a practice that is unethical, impractical and unscientific. Where will these radiologists come from, and how long will it take to examine each individual?
I will refer to the report that the Minister has referred to, which says:
“Biological age assessment involving ionising radiation is limited to radiography of the third molar”
and/or of the wrist. This is hardly a great operation, is it? The final sentence on page 6 says that the authority notes all this, and says that the applicant—that is, the Government—should
“cease using X-rays when alternative methods are validated.”
If the justifying authority has major reservations about the use of X-rays in this unethical and unscientific way, what are the Government doing to look into alternative examinations, which the JA is clearly proposing we should do?
Edward Argar
The vast majority of points made by the shadow Minister, the hon. Member for Brentford and Isleworth (Ruth Cadbury), and the hon. Member for Hemsworth (Jon Trickett) are outside the scope of this debate. This debate is not about the policy, the implementation or staffing of that policy, or otherwise. It is about a technical legal decision to allow the Home Office, in another Delegated Legislation Committee in just under an hour and a half’s time, to bring forward the actual policy proposals and put them before a Delegated Legislation Committee for debate. There is a very good reason for that: as I set out very clearly, under the Justification of Practices Involving Ionising Radiation Regulations 2004, the justifying authority is required to be functionally separate from any decisions made on how the policy will operate and the decision made on it. I appreciate the points made by both the shadow Minister, the hon. Member for Brentford and Isleworth, and the hon. Member for Hemsworth. They made their points well and I suspect that they are at least in scope of the debate because the Chair did not stop them. They are on the record.
Edward Argar
The point I would make in respect of the vast majority of cases, the justifying authority is looking to see whether, under those regulations, it is possible for the Home Office to proceed in this way. The hon. Member for Hemsworth quoted from page six of the report. I would also highlight another quote on page six:
“The decision to use X-ray imaging appears well considered and appropriate to minimise any individual’s radiation exposure.”
That is what the Secretary of State has been looking at in this context: whether the measure meets the threshold of those regulations for the Home Office as the applying authority to bring forward specific proposals, which it will do.
The shadow Minister, the hon. Member for Brentford and Isleworth, did make one point that is directly relevant to these regulations, which concerned how a review would work. As the justifying authority, we will undertake a review if, for example, new or important information is acquired about efficacy or consequences, other techniques or technologies that have the same objectives become available, or there are any obvious relevant changes in practice, science or technology. I should be explicit that the statutory instrument does not include a statutory review, but the Ministry of Justice as the justifying authority will continue to monitor and review the use of X-rays in this context as the shadow Minister would expect.
I suspect that the spokesman for the Scottish National party, the hon. Member for Glasgow South West, may reprise a number of the arguments and questions that he has just put to me to a Home Office Minister as the applying authority in another Committee in about an hour. There are a number of points to consider. On informed consent, that would again be a question for the Home Office as the authority wishing to carry out this policy. Similarly, on the question of a scientific method of age assessment, it is recognised in the documents that the Government have put forward that assessing an individual’s age is an incredibly complex task and there is no single methodology, scientific or otherwise, can determine a person’s age with absolute precision. However, as I set out earlier, this will be one consideration in weighing up the evidence based on either the individual’s declared age or a social worker’s assessment of it.
Chris Stephens
I assume that the Minister thought I was speaking to the statutory instrument—shock horror. A number of human rights groups have raised concerns. Has he, as the justifying authority, had a look at those? Obviously, there are clear concerns about human rights.
Edward Argar
I am grateful to the SNP spokesman for that. In considering this as the justifying authority, the Secretary of State has had due regard to those named consultees that, under the 2004 Regulations, he is obliged to consult on the justification decisions. It would be for the Home Office to set out what discussions it had had—I think it was either the hon. Member for Brentford and Isleworth or the hon. Member for Hemsworth who talked about local authorities, campaign groups and others—in how they designed that policy and what they proposed when they bring that forward. That would be a matter for Home Office Ministers. I am perhaps being less forthcoming than I normally would be—the hon. Member for Glasgow South West has opposed me in Committee before—because I am deliberately drawing that distinction between the justifying authority, which is functionally separate in looking at what it actually has to look at as the MOJ, from the Home Office as the Department that has to introduce the specific regulations on how this policy would work. On that basis, I commend this decision and this statutory instrument to the Committee.
Question put,
Draft Immigration (Age Assessments) Regulations 2023
(5 months, 3 weeks ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Committee divided: - Ayes: 9 / Noes: 1 - Question accordingly agreed to.
The Minister for Immigration (Robert Jenrick)
I beg to move,
That the Committee has considered the draft Immigration (Age Assessments) Regulations 2023.
It is a pleasure to serve under your chairmanship, Mr Hosie. The draft regulations, which were laid before the House on 14 September, will improve our age-assessment process, which is under pressure from rising numbers of age disputes. The regulations relate to the introduction of scientific methods of age assessment.
Since 2017, there has been upward trend in the number of unaccompanied children entering the UK: in 2019, 3,775 unaccompanied children applied for asylum; by 2022, that had risen by 39%, to 5,242. There has also been a rise in the number of age disputes: between 2016 and June 2023, 11,275 age disputes were raised and subsequently resolved following an age assessment. Nearly half—49%, or 5,551 of those assessed—were found to be adults.
Paul Blomfield (Sheffield Central) (Lab)
My question is about the Minister’s opening statement, which was about not the numbers we are dealing with but the Government’s stated intention to improve the system. I served on the Nationality and Borders Bill Committee, where we spent some time discussing this issue. Will the Minister share with us—because at that stage his predecessor could not—the evidence that biological methods give any greater certainty of age determination than the existing Merton process? Will he also give us an indication of the percentage accuracy of the four different methods included in the draft statutory instrument?
Robert Jenrick
I will come to that in my wider remarks, but the first thing to say is that what we are proposing is not instead of the existing Merton process but in addition to it. That is an important disclaimer, because some countries elsewhere in the world have chosen to do one or the other but, given the evidential issues to which the hon. Gentleman alluded, we want to proceed with both together.
The scientific process, which the statutory instrument will enable us to move forward with, will further refine the existing process, getting us closer to the correct result. We are not suggesting that the age-assessment process will lead us to an absolutely precise result, but it will enable us to refine the result of the Merton assessment and get us to a better result. For all the reasons that I set out in my opening remarks, given the sheer numbers of people—adults pretending to be children—we are disputing, and all the problems that flow from that, we think it is important for us to use all the tools in our toolbox to reach the closest we can to a correct assessment of an individual’s age.
Chris Stephens (Glasgow South West) (SNP)
The Minister is trying to tackle this issue on the basis of adults claiming that they are children, but we also know that people seeking sanctuary and asylum are claiming sanctuary and asylum as adults when they are actually children. Does he have the relevant figures to hand?
Robert Jenrick
I do not have those figures. Having done this job for more than a year now, I have never come across any instances—
Robert Jenrick
If that is the case, the hon. Member should provide them, but I have never been provided with any data or indeed anecdote of a child deliberately posing as an adult. All the data I have seen goes in the other direction, with adults posing as children in the belief, mistaken or otherwise, that they will receive better treatment here in the United Kingdom. That is the issue we are trying to resolve. Why does that matter? Because none of us want to see adults posing as minors and being placed in the same settings as genuine children. That is not an academic debate; it is a very serious matter. I have seen some of the appalling problems that can arise, including a case in which an individual went into the loving care of foster carers and then into a primary school, and ultimately went on to murder somebody in Bournemouth. Sadly, I could cite other incidents like that. This is what we are trying to stop.
Robert Jenrick
I will make some progress.
Age assessment is, as I have described and our brief debate has already suggested, a complex and difficult task. Many unaccompanied young people claiming to be children arrive in the UK without any official documentation, because they have lost it or in some cases deliberately destroyed it, while some are undoubtedly under the age of 18. In many instances it is not clear cut. It is an unfortunate reality that some individuals misrepresent their age to gain unfair immigration advantage. The public would rightly expect us to strengthen our processes accordingly.
The introduction of scientific age assessments is intended to improve our age-assessment system by providing additional biological evidence to aid better-informed and more thorough decisions on age. The existing Merton-compliant assessment process is a holistic, social worker-led assessment that includes interviews, background checks and observations of the young person over a period of time. Scientific age assessment will be one piece of evidence used within such an assessment. It is intended to provide additional evidence and create a more consistent system. Importantly, the UK is one of the very few European countries that does not currently employ scientific methods of age assessment. The regulations will pave the way to the UK being more aligned with international practices.
Paul Blomfield
I thank the Minister for giving way again. I have a few questions, because this is an opportunity for him to answer the questions that were left hanging when we debated this issue in the Public Bill Committee. I would still welcome a response to the questions about the Government’s evidence that this change will improve the process and the accuracy percentage because, as he said in reply to my earlier question, we are talking about large numbers. We already have significant issues with delays in the system, so imposing a layer on top of the existing system should be done carefully, and only if we are convinced that it adds value. I welcome the fact that the two systems are to be used together, instead of one as a replacement, but what will happen, and what guidance will be given, in cases in which the conclusion of the Merton process is one age and the conclusion of the biological assessment is another?
Robert Jenrick
We do believe that this change will make a material difference; otherwise, we would not proceed with it. We have taken a great deal of time since the passing of the Nationality and Borders Act 2022 to refine this policy. We took advice from the specialist Age Estimation Science Advisory Committee as to how best to proceed and whether this policy would make a material difference, and we have concluded that it would.
The evidence from the scientific age assessment will be only one element of the ultimate decision. The decision will be made by a social worker. If that social worker believes, despite the scientific age-assessment evidence, that an individual is a minor, it will ultimately be up to them to make the final decision. If there were a risk of a perverse outcome, it would be up to them to use their professional judgment to determine whether the person was actually a minor and not make a mistake.
Kevin Foster (Torbay) (Con)
Does the Minister agree that the fact that the vast majority of European countries use some form of scientific age assessment speaks volumes for how it can assist in decision making? It will also allow us an opportunity to get empirical evidence when looking to prove whether someone who claims to be an adult is actually a much younger child. If we get this process right, it will remove the extreme cases that are cited regularly in the media.
Robert Jenrick
My hon. Friend speaks with great experience and is absolutely right: this change will improve the overall evidential standard of decisions, and will be particularly useful to weed out the obviously egregious instances that we all see represented in the media, which in my role I see all too often.
Robert Jenrick
If I may make a little progress, I will come back to the hon. Gentleman.
The statutory instrument specifies scientific methods for the age-assessment process, including magnetic resonance imaging of the bones of the knee and radiographs of the lower wisdom teeth and the bones of the hand and wrist. The images will be used to assess the skeletal and dental development, or maturation, of the bones and teeth. The methods have been recommended by the Age Estimation Science Advisory Committee.
Once scientific methods have been specified, if an age-disputed person refuses to consent, without reasonable grounds, to the use of those methods as part of the assessment of their age, a decision maker must take that refusal to consent as damaging the age-disputed person’s credibility. That is referred to as negative inference. The damage to credibility included in the statutory instrument is for the purpose only of deciding whether to believe any statement that the person has made that is relevant to the assessment of their age, not of deciding the person’s credibility in their wider immigration claim.
The Home Office considers the taking of a negative inference appropriate and proportionate to prevent abuse of the immigration system. If individuals who deliberately misrepresented their ages were able to refuse to undergo scientific methods of age assessment without any consequence, it would undermine the UK’s ability to prevent adults from accessing children’s services and to safeguard genuine children using those services. A refusal to consent to a specified scientific method of age assessment without reasonable grounds would not automatically preclude the individual’s being considered a child. That refusal would still need to be taken into account alongside other relevant evidence as part of the comprehensive age-assessment process undertaken by social workers.
Members should also note that there has to be reasonable doubt about an individual’s age for them to go through the age-assessment process. The Committee can be reassured that those who are clearly children will be identified at the initial age-determination process at the border, so will not subject to any of the relevant procedures at all.
Chris Stephens
The Minister is being generous in giving way. He mentioned the Age Estimation Science Advisory Committee; is it not the case that it reported to the Government that it can estimate only whether an age is possible?
Robert Jenrick
As I think I have said, the Age Estimation Science Advisory Committee recommended that there was no precise way to estimate an individual’s age, but it did conclude that taking age assessment into consideration was a worthwhile thing to do because it would help us to get closer to the correct age. That is an important step forward and is one reason why most other European countries adopt such an approach.
Katherine Fletcher (South Ribble) (Con)
I do not know how many people in this room are fans of “Time Team”, but it is important to emphasise that the techniques are not new: they have been used in osteoarchaeology for many decades to identify the potential age of skeletons. Does the Minister agree that we are just talking about the application of modern technology to improve the determination of knee, wrist and wisdom tooth development?
Robert Jenrick
I do agree that the methods are well rehearsed and have been used by other European countries, including ones that we would respect in the way they handle such issues. In fact, X-rays have an error rate of two years, but we are not looking to apply an exact age or age range, as I have described: we are looking to reduce the likelihood that an individual might be an adult posing as a child. If it is any comfort to Members who are interested, both the Government’s chief scientific adviser at the time, Sir Patrick Vallance, and the chief medical officer, Sir Chris Whitty, reviewed the issue and support its soundness, and they praised the method of the Age Estimation Science Advisory Committee. I hope that reassures Members that this matter has been considered in some depth across Government, taking advantage of all the advisers that we Ministers have.
Karl Turner (Kingston upon Hull East) (Lab)
I declare an indirect interest in that my wife is a tribunal judge on the first-tier tribunal in the immigration setting. Has the Minister made an assessment of the cost implications of the policy, which sounds terribly expensive? Where does the cost fall? Will the NHS have to undertake this work, or will the Home Office be responsible for footing the bill?
Robert Jenrick
As Members would expect, we have given thought to how we will operationalise the plan, and there are different ways in which one could do that. We have not yet set out a detailed plan in the public domain, but it is likely that the measure will be delivered in the first instance by local authorities in a community setting, but paid for by the Home Office as part of the immigration service. We do not expect the cost to be borne by local authorities. In fact, the policy is likely to reduce the overall burden on local authorities, because today many local authorities, particularly those that encounter a high number of asylum seekers, are spending a great deal of money on navigating the Merton age-assessment process and looking after individuals as a result. If the process can be done in an expeditious way, supported and funded by the Home Office and central Government, there should be an overall cost reduction for individual local authorities.
Let me conclude my remarks by simply saying that I should note—
Robert Jenrick
I will take one last intervention, but I do not want to delay the Committee, because we may be about to vote in the House.
Paul Blomfield
I genuinely appreciate the Minister’s giving way. One of the concerns expressed when we discussed this issue previously was about a child’s capacity to agree to a medical method of assessing their age and what would happen if a child does not have such capacity. The Government’s own advisory committee, to which the Minister has referred, says that the principle of informed consent is vital. In a situation involving traumatised individuals in an alien environment, how will it be judged that informed consent can genuinely be given?
Robert Jenrick
The hon. Gentleman makes an important point. He is right that we have been clear that we will not be taking X-rays or MRI images of an individual without informed consent. The Home Office will ensure that the individuals who undergo the age-assessment process will be supported to provide valid informed consent, and that the individual has the capacity, fully understands the process and is communicated to in a child-friendly and clear way, with interpreters assisting where appropriate. It will ultimately be for the social workers and clinicians who undertake the process, not Home Office caseworkers or officials, to satisfy themselves that informed consent has been provided.
I am conscious that we may be close to a vote in the House, so let me draw my remarks to a close by noting that last week’s Supreme Court judgment in relation to the UK’s agreement on the relocation of individuals to Rwanda does not relate to the draft regulations. Protecting genuine children, preventing the abuse of the immigration system by those who knowingly misrepresent their age and improving our asylum system overall remain priorities for the Government in any event, and it is extremely important that we protect genuine children from all the risks and challenges that come with allowing adults to pose as minors. I commend the draft regulations to the Committee.
Stephen Kinnock (Aberavon) (Lab)
It is a pleasure to serve under your chairship, Mr Hosie. The Government’s plans to use scientific methods in verifying the age of unaccompanied asylum-seeking children have been long in the making, but we would not necessarily know it from the somewhat sketchy evidence around the SI or the rather flimsy documents published alongside it.
The legislative framework for such assessments was set by the Nationality and Borders Act 2022, which has been on the statute books for more than 18 months. Yet the Government have still not managed to answer some of the most basic questions that these proposals raise, in particular how much they will cost and what their impact will be on our health services, at a time when our NHS is under unprecedented strain.
These are questions that any reasonable Member would expect the Government to address in their impact assessment. However, no such assessment has been provided, on the basis that, in the Government’s words:
“the policy and design are still under development.”
I note that the explanatory memorandum commits to preparing a full impact assessment as implementation of the policy moves forward. If the Minister could commit to a timely publication of such an assessment, I am sure that Members from all parties would be very grateful.
It is also unclear to me, as it was to the Secondary Legislation Scrutiny Committee, why the Government should feel the need to move forward with legislation that is still in the process of being developed. We would be very grateful if the Minister could shed some light on that question posed by the Secondary Legislation Scrutiny Committee.
We also find that House of Lords Committee expressing palpable frustration at the repeated running-up against a brick wall of any reasonable requests to Ministers for basic information, in this case about the extent of any further consultation between Ministers and experts from the medical and wider scientific communities beyond the members of the Government’s hand-picked Age Estimation Science Advisory Committee, to which the Minister referred. More importantly, what specific feedback have Ministers received from experts beyond the members of that committee in the course of any consultations that have taken place?
These questions really matter, because there is clearly no evidence of consensus among experts in support of the Government’s plans—far from it, in fact. From a report in a recent edition of the New Scientist, it is clear that a widely shared view among experts is that what the Government describe as scientific age verification is based largely on what those experts describe as pseudo-science. Based on their public statements, a range of expert bodies, representing such diverse fields as social work, paediatrics, dentistry and radiology, also seem to be proactively urging their members to play no part in such practices.
Therefore, my final question to the Minister is this: what thought have the Government given to how they might be able to implement the measures that he has set out today if professionals in the sector are not willing to operationalise them? My question specifically is this: do the Government have a plan B in the event that the key practitioners are not prepared to operationalise the measures that have been set out today?
Paul Blomfield
My hon. Friend raises some important questions, as others have, and he will know the concerns that we raised when the Nationality and Borders Act was in Committee. Clearly, we are in a situation where the actual implementation of these measures will fall to a future Labour Government, so I wonder whether he could confirm something. If it is our experience in Government that these measures do not add value and do not assist the process, will we review and scrap them?
Stephen Kinnock
We will certainly keep these measures under review, as would be the duty of any sensible Government. Policy making should be based on evidence, on facts and on the law, and Labour Members remain absolutely committed to those basic principles. If our review concludes that they are working, effective and accurate, then we would look to retain them. However, if such a review concluded that they were counterproductive, ineffective or damaging, particularly around safeguarding and so on, then—of course—we believe in evidence-based policy and that is a very important principle for any Government to pursue.
With that response to my hon. Friend, I conclude my remarks. I thank the Minister for his attention and look forward to hearing his response.
Chris Stephens
It is a pleasure to see you in the Chair, Mr Hosie.
This Committee is the main course, but I was part of the Committee earlier today that considered the statutory instrument from the Ministry of Justice, which seems to justify whether this change can go ahead. As I say, we are now at the main course and debating whether it should go ahead or not.
I was surprised by the Minister’s answer to me earlier and that he is not aware of any instances of people seeking sanctuary or asylum in the country who claim that they are adults when, in reality, they are children. I have examples from my constituency where that is the case, and I thank Aberlour and other organisations that look after asylum seekers in my constituency for raising these matters and for looking after those individuals. All the asylum charities in Glasgow South West and the great city of Glasgow should be commended for their work in this area.
This is not the mundane statutory instrument that people might think it would be, for the simple reason that this issue is not without controversy, and human rights groups have raised their concerns and condemned the regulations. I wonder whether the Minister can tell us what responses have been given to the human rights groups that have concerns about the Government’s direction in this area, because we need to give regard to the fact that we are dealing with people who have suffered incredible trauma in getting here and in their experiences where they have come from. I know from my case load that some of them are victims of sexual violence, for example. There is a former Immigration Minister on the Government side, and he will be aware that my office and the Home Office are in regular contact every week to discuss the many cases that we have, given that Glasgow is an asylum dispersal area.
I believe that using MRI and X-rays in this area is beyond cruel, and experts are saying that this measure is unethical and will be inaccurate and potentially harmful. I note that the Scottish Government have opposed it, as have human rights groups. One of the reasons is that it risks the rights of children who have already been through unimaginable hardship. For me, it is a question of values. There are also ramifications if one does not participate in the process. The Minister was very candid when he said that if someone does not participate in the process “without reasonable grounds”, it would be damaging to their case. If I understood him correctly, I take that to mean that if someone refuses to participate in the process, they might not receive a positive decision on their asylum claim. There are reasons why people may well refuse to participate, and it may simply come down to a language barrier, for example. As I will come on to, it might be because these particular tests are not even accurate and the science does not support this statutory instrument.
Kevin Foster
I recall our many conversations in my previous role about his casework, and the hon. Gentleman is a doughty fighter in this area. If what he says about the process is correct, why do so many countries in Europe use such measures?
Chris Stephens
I notice that that has been said, but not one country in Europe was actually named. It will be interesting to see whether the Minister mentions countries in Europe, because I find it curious that this approach is said to be standard in Europe, but not one country was named. I am looking forward to the answer, and I am sure it is being handed to the Minister right now on the little green Post-it note he has in front of him—yes, I am observant.
Paul Blomfield
I am sure that, like me, the hon. Gentleman is amused by the Government’s reliance on other European countries as a benchmark for good practice. Does he recognise that although many other European countries have the legal capacity to use biological tests, many of them have found that such tests have not worked and have not added value, and they are therefore discontinuing them?
Chris Stephens
That is a very interesting intervention from the hon. Gentleman, who does a lot of work in this area. As he mentioned, he was involved in the Nationality and Borders Bill, and I will come to some of the experts’ concerns. I believe the policy should be evidence-based. Unlike some Cabinet Ministers, I think that we should listen to experts on such issues. The Government’s approach opposes the principles of informed consent and some of the recommendations set out by the body that was commissioned to look at this policy, as was mentioned earlier. It seeks to ignore some damning comments from the Royal College of Paediatrics and Child Health, which says that
“informed consent it fundamental to all medical practice, and by definition must be free from duress.”
If you have a system in which you say to someone that they must participate in a test and that, if they do not, it will damage the claim, I suggest that that person is participating under duress.
Further to that, the Royal College of Paediatrics and Child Health says that
“x-ray imaging for a non-medical purpose is not ethical”,
and that
“x-rays to determine age can be widely inaccurate”.
The Age Estimation Scientific Advisory Committee have said:
“There is no method, biological or social worker-led, that can predict age with precision”.
It can only estimate whether an age is possible. It can only tell you whether an age is possible, and it cannot be precise. We will therefore get into all sorts of difficulties if the Government go ahead with this. Many children have faced significant trauma in their journey to the UK; they should be met with compassion and care, not unnecessary medical procedures. The question of what the cost is has been raised with the Government. That is an excellent question, but I would also ask what the cost is to the UK’ s reputation if it goes ahead with these tests.
Paul Blomfield
I want to follow up my earlier questions with a few comments. I think that the Minister failed, as indeed the Government did when the Nationality and Borders Act was in Committee, to explain in detail—I hope that he will have another go in his concluding remarks—why the Merton process is failing. He talked about other European countries, and many see that as the gold standard in an effective system of evaluating age.
There was, in Committee, a real concern about the Government’s intention, at that stage, to scrap the Merton process and rely wholly on biological tests, so I welcome the fact that the Minister has confirmed that the Government are planning to run the two systems concurrently, as well as his assurance that, where there is a variance between biological tests and the Merton assessment, the decision will remain with the decision maker and there will not be any crude dependence on the biological tests. I do not think that he has been able to convince us that there is accuracy, to the point that is needed, within the biological test. The Government’s own committee says that it will provide an age range, rather than a specific age. I realise that the hon. Member for South Ribble was trying to be helpful by talking about the value of bone testing in archaeology, but when we are dating dinosaurs, we do not do it to the precise year, and, in this context, we are talking about a requirement to get a precise age. I hope that he will have another shot at explaining the scientific evidence for the reliability of biological testing.
I will press a little bit further on the question of consent, because there are real issues of concern there. The Minister will know that section 52(7) of the Nationality and Borders Act 2022 places a duty on a decision maker to make a negative credibility finding when a person does not consent to the use of biological methods, and that section 58(2) of the Illegal Migration Act 2023 allows for an automatic assumption of adulthood if the person refuses to consent.
The consequences are serious. Many children could be wrongly declared to be adults, contrary to the advice given by the Home Office’s own advisory committee, leaving them to face the prospect of deportation or—the Minister described the problem graphically—being placed wrongly in an adult setting, which raises serious safeguarding issues. The Minister has not yet adequately explained to us how the Government propose to deal with the child’s capacity to understand and agree to a medical method of assessing their age, or exactly what will happen when a child does not have that capacity. If a child seeking asylum is not looked after, has no legal guardian and does not have the capacity to consent, I hope that the Minister will explain in his concluding remarks who would be able to consent on their behalf. Also, how will that stand up in law?
Additionally, for consent to be valid, it must not be given under duress. That point was made by the Minister’s own advisory committee in its recommendation that there should be, because of—
The Chair
Order. I will suspend the Committee to allow for Divisions: 15 minutes for one Division and another 10 minutes for a subsequent one, so we will be back at 6.50 pm or 7 pm.
Paul Blomfield
When we were interrupted, I was talking about how important it is that if consent is to be considered valid, it should not be given under duress. What could cause more duress than being told, “If you don’t consent, you’re going to be deported”, which is what the powers under the Act imply? That is probably why the Age Estimation Science Advisory Committee, which the Minister has spent so much time assuring us that he has turned to for guidance, says in its recommendations that
“no automatic assumptions or consequences should result from refusal to consent.”
I am interested to hear from the Minister how that relates to the consequences provided for in the Act. The position that the committee took is consistent with that of the Royal College of Paediatrics and Child Health, which stated that
“informed consent is fundamental to all medical practice, and by definition must be free from duress.”
There are wider ethical concerns, as has been mentioned. Leading medical bodies have expressed concern about using medical methods for examinations that are not medically necessary. That is not a superfluous concern. The methods proposed will expose children to the potentially harmful risks associated with exposure to radiation. The British Medical Association states that the
“use of such methods in a non-clinical context involves direct harms without any medical benefit”.
The British Dental Association has also voiced its opposition to the use of dental X-rays, saying that they are both “inaccurate” and “unethical”.
There are things that could be done to improve the system. The Minister touched on them but did not follow through on the problems with age assessments at the port of entry. There have been lots of problems with inaccurate age assessments conducted by Border Force officials at the point of entry. The Government do not publish data on the number of children who are incorrectly treated as adults by the officials and subsequently taken into care when referred to a local authority, which has significant consequences. I wish that the Government would look more at the better processes at that point that could make a difference in improving the procedures.
Robert Jenrick
I am pleased to wind up this short debate. I will answer as many of the questions as possible. I will begin with the points made by the hon. Member for Glasgow South West. I appreciate that the SNP and others in Scotland are opposed to the measures, but the Government’s sole interest, which I hope commands support across the House, is in safeguarding children. This is a safeguarding measure. It is not a measure to deter people coming to the UK, although we want to deter illegal migrants from taking unnecessary and dangerous journeys across the channel. The measure is purely because we care about protecting innocent children and do not want to see adults posing as minors placed in the same settings as them. That is why we need this measure.
Of course, the hon. Member is right to say that there are some non-governmental organisations that have opposed these measures. However, we would counter that by asking those NGOs how they propose to protect those innocent minors in settings such as primary schools, our own Home Office facilities or foster care if not by taking forward all of the tools in our toolkit. I think that they are naive at best and at worst making a serious error of judgment in preventing the Home Office from making use of all the tools that are at our disposal.
In response to the hon. Member’s second question about which countries in Europe use these measures, it is not so much a question of which countries use them as which countries do not use them. In fact, the only EU nations that do not undertake X-rays for this purpose are Cyprus, Slovenia and Ireland. Every single one of the other EU member states uses X-rays and many of them use even more sophisticated and advanced processes, including Germany, the Netherlands and Belgium. It is absolutely right that the UK follows suit and makes use of best practice.
Robert Jenrick
I am not going to give way to the hon. Gentleman, although I was grateful for his well-informed remarks today and it was right that he made them, because this is an important subject.
I will answer some of the points that the hon. Gentleman made earlier. First, on the question of implementation, I do not think that it will be as complex as has been posited, because these measures have been used for many years by many other European countries. Of course, there is work for the Home Office to do in the months ahead to operationalise these measures, but we can learn from the experiences of many other partner countries in taking forward our plans.
With respect to how this will play with the Merton process, I will point out that Merton has a number of disadvantages if used on its own. It is a long process and despite the best efforts of the Home Office and local authorities, we have not yet been able to make it a short process, as we would have wished, which is placing a great deal of strain on local authorities, which bear much of the cost. Also, during that period 50% of the individuals in these age-disputed cases are found to be adults and in many cases living in settings cheek by jowl with genuine children, which is not good from a safeguarding perspective. If we can ensure that some of the most egregious cases are weeded out using a scientific age-assessment process alongside the Merton process, that would be good for everyone concerned.
Secondly, the Merton process is not always uniformly applied. Different local authorities apply it in somewhat different ways, while the age-assessment process will be one uniform process across the whole of the United Kingdom.
With respect to the hon. Gentleman’s question about consent, I hope that I have answered it already by saying that we will only apply these measures in relation to individuals where there is informed consent. We will specifically train clinicians and social workers who will be involved in this process in how to judge whether there is informed consent, taking into account the individual circumstances of the child, ensuring that there is appropriate guidance and also interpreters where necessary. If an individual does not consent, this will not be the sole factor in deciding whether they are indeed a child. As I said in my answer to his earlier intervention, it is ultimately the decision of a social worker, who must use their professional judgment and experience to come to a rounded view of that person.
With respect to the hon. Gentleman’s question about the automatic assumption that is in the Illegal Migration Act 2023, that is a separate issue to this one and it will be implemented in due course. However, it is right that where there are individuals who choose not to go through this process, there is an ability for the Home Office to determine whether or not they are adults. We do not want to deter people from taking this test, particularly in the egregious cases where it is clear to all that the person concerned is an adult, but we have to prove it beyond doubt, because those are the cases that we are really seeking to weed out.
With respect to the questions put by the hon. Member for Aberavon, regarding the time that it has taken us to bring forward these measures, I will concede that things have been done in a deliberative fashion, because this issue is complex and it is important that we get matters right. After the passage of the Nationality and Borders Act 2022, we commissioned the Age Estimation Science Advisory Committee to assess the evidence and produce a thorough report. Then we have considered that report before bringing this SI to the Committee. One could have done it faster, but I am sure the criticism would then have been that we were rushing an important and technically challenging question, so we have chosen to do it in the way that we have. It is a new operational process, although we can learn from what has happened elsewhere in Europe.
Obviously, we intend to publish an impact assessment, and we will do so when we have bottomed out all the operational questions and can set out exactly how and when this will be operational.
On experts, we have brought together in the advisory committee a serious and experienced group of individuals to provide their advice to the Home Office. They in turn sought evidence from a much broader field of individuals and professionals. That was the right thing to do. Of course, we will continue to keep this under review once it has been operationalised, and we will learn from that, because, as the hon. Member for Aberavon said—although he was rather sitting on the fence as to whether the Labour party supports this—our sole interest is ensuring that this safeguarding measure is effective. If it is not effective, there is no point in continuing with something complex and expensive. We believe that it will be effective, and we make that judgment on the basis of the fact that almost every other European country already does this. With that, I will conclude my remarks, thank Members on both sides for their thoughts and commend the regulations to the Committee.
Question put.
Ministerial Corrections
(5 months, 3 weeks ago)
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Transport
(5 months, 3 weeks ago)
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Chi Onwurah (Newcastle upon Tyne Central) (Lab)
The Government’s mishandling of HS2 was and is absolutely staggering, but their attempt to pull the wool over northern eyes with Network North is a farce. Does the Minister really believe the people of the north-east are falling for his fag-end fake network to nowhere?
Huw Merriman
I just do not accept that at all. I gave a run through of a list of the £36 billion that is being put back into local projects, including £1.8 billion extra for the north-east. That could, for example, be an option for the Leamside line to be reopened. I would have thought that, rather than stating that none of this is going to happen, the hon. Member would be holding us to account to make sure it does, and that she might actually support investment. There will be as much investment—indeed, more—in all areas.
[Official Report, 26 October 2023, Vol. 738, c. 965.]
Letter of correction from the Minister of State, Department for Transport, the hon. Member for Bexhill and Battle (Huw Merriman):
An error has been identified in my response to the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) during Transport questions. The response should have been:
Huw Merriman
I just do not accept that at all. I gave a run through of a list of the £36 billion that is being put back into local projects, including an increase in funding for the north-east to £1.8 billion. That could, for example, be an option for the Leamside line to be reopened. I would have thought that, rather than stating that none of this is going to happen, the hon. Member would be holding us to account to make sure it does, and that she might actually support investment. There will be as much investment—indeed, more—in all areas.
Work and Pensions
(5 months, 3 weeks ago)
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Mel Stride
There are certain things that the shadow Secretary of State, the hon. Member for Leicester West (Liz Kendall), and I can agree on, and smoking is one of them. I was interested to learn that she is a former smoker. They always say that former smokers have a passionate desire to stop other people smoking, and she certainly demonstrated that. We know that one in four cancers is caused by smoking.
[Official Report, 13 November 2023, Vol. 740, c. 474.]
Letter of correction from the Secretary of State for Work and Pensions.
An error has been identified in the speech I gave in the Debate on the Address. The correct statement should have been:
Mel Stride
There are certain things that the shadow Secretary of State, the hon. Member for Leicester West (Liz Kendall), and I can agree on, and smoking is one of them. I was interested to learn that she is a former smoker. They always say that former smokers have a passionate desire to stop other people smoking, and she certainly demonstrated that. Smoking causes a quarter of deaths from cancer.
Westminster Hall
(5 months, 3 weeks ago)
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Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
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Healthcare Students: Pay and Financial Support
(5 months, 3 weeks ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
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Marsha De Cordova (Battersea) (Lab)
I beg to move,
That this House has considered e-petitions 610557, 616557 and 619609, relating to pay and financial support for healthcare students.
It is a pleasure to serve under your chairmanship, Ms Fovargue. I congratulate the petitioners, Victoria, Charlotte and Jacorine, on starting the petitions, which were signed by more than 36,000 people. I thank all the organisations that prepared briefings ahead of the debate, including the Royal College of Nursing, the Royal College of Midwives and the National Union of Students, and I thank the Petitions Committee for its work.
Today’s debate is timely, as many of our constituents have been impacted by the cost of living crisis in multiple ways, but the impact on students and the unique challenges they face are rarely acknowledged. The president of Universities UK, Professor Steve West, stated:
“Students risk becoming the forgotten group in the cost of living crisis.”
Academic and workplace commitments leave little room for students to earn outside their studies, so it is inevitable that cost of living pressures will hit them hardest. Those pressures are more pronounced for those studying healthcare subjects, as many are mature students and may have to balance parenting duties with course commitments, not to mention the extra costs they face supporting their children.
Healthcare students who responded to the Petitions Committee’s survey ahead of the debate said that they were struggling with the cost of living, with 58% saying that it was difficult or very difficult to afford energy, including gas and electricity. Nineteen per cent said that they had visited a food bank, and 26% said that they were considering using one. Further adding to the pressure, healthcare students are required to complete thousands of hours of unpaid clinical placements over their course programme. One student nurse said:
“I wanted to leave my course this year when I was working on placement and not able to afford food. I was so hungry, and my energy was so depleted that it was affecting my work. I was struggling so much financially that the staff resorted to giving me toilet rolls, sanitary products and even paying for some food for me.”
As healthcare students are not paid or classed as workers, they often lose out on additional support or entitlements, such as the 30 hours of free childcare available to working parents. Many said that they were under considerable financial strain and found their workload difficult to manage, as they were juggling childcare, their unpaid nursing placements, study, and a second, paid job. Worryingly, many said that they were considering leaving their course due to financial pressures related to childcare costs, with 93% strongly agreeing that healthcare students should be eligible for free childcare. In the words of one student:
“I am working just as hard as I was when was employed by my local police force 12 months ago and yet, as I am now considered a student and not a worker, I can no longer claim the 30 hours free childcare for my 3-year-old. There are shortages of many NHS staff so I can’t understand why the government does not make it easier for parents to study for these roles.”
It is a fact that England has the least generous financial support for healthcare students.
Paul Blomfield (Sheffield Central) (Lab)
I regret that I cannot stay for the whole debate, but, as chair of the all-party parliamentary group for students, I wanted to make a contribution. My hon. Friend refers to a debate that we had seven years ago, I think, when I recall the then Minister, Ben Gummer, told us that he was keen to share the benefits of the undergraduate student funding system with healthcare students, including nurses and midwives, who had previously benefited from the bursaries, and was anticipating that that would lead to better support and an expansion of the number of people coming into the service.
Does my hon. Friend recognise that those of us who argued at that stage that the changes would lead in the other direction have been validated by experience? Does she agree that we have seen more potential nurses and midwives, particularly mature ones, no longer entering the profession? Also, is she concerned—I hope that the Minister will respond to this point—about the UCAS figures for this year, which show a 16% decline in the number of people applying for healthcare courses?
Marsha De Cordova
My hon. Friend makes an important point, which I will come to shortly, and he is absolutely right. It is clear that the changes to the bursary scheme have led to a fall in the number of students taking up these much-needed roles.
Since the removal of the bursary scheme, students studying nursing, midwifery and allied health professional courses in England are only eligible for the standard student finance package of tuition fee and maintenance loans, whereas students in Wales, Scotland and Northern Ireland who are eligible enjoy fully funded education.
I am sure that, in responding to the points made by my hon. Friend the Member for Sheffield Central (Paul Blomfield), the Minister will point out that since 2020, students eligible for the standard student support package receive an additional £5,000 training grant through the NHS learning support fund, that there are additional grants for some qualifying students and that the Government have increased travel and accommodation support. But that simply is not enough. Eighty per cent of student midwives in England who took part in the Royal College of Midwives survey said that they would be taking on additional debt over and above the loans available to students. Moreover, nearly three quarters of student midwives in England said that they expect to graduate with debts of more than £40,000. I am sure that my hon. Friend agrees that that cannot be acceptable.
Government-imposed barriers are making healthcare studies unaffordable for many students. In the first year after the changes to the bursary model, the number of applicants from England for nursing courses fell by 23%. My hon. Friend highlighted the latest UCAS figures, which showed that this year there has been another fall in the number of people applying.
Why does this all matter? I will make two key points today. The first is that it is a matter of fairness and equity. Healthcare students make a significant contribution and play a vital role in delivering high-quality healthcare. Many of those on placements are often required to cover the responsibilities of qualified healthcare workers, due to the workforce shortages.
The Government must look at increasing financial support for healthcare students, and I hope the Minister will address that point. They could do so by creating a scheme to offset or write off debt run up by healthcare students through tuition fees if they commit to working in the NHS for a period of time. That would be similar to the scheme in Wales, which I am fairly certain is working. They should also ensure that higher education funding models are complemented by a financial package for students, to make sure that grants reflect the true cost of living, as they do in Scotland, which has the most generous living cost support. The Government should also extend the 30 hours of free childcare to those on placements.
I would welcome it if the Minister addressed those points in his response. To adequately address fairness and equity, the Government must also focus on intersectionality by looking at the age and sex of healthcare students, as many tend to be women and/or mature students, who are more likely to have dependants.
The second point I want to touch on is the workforce crisis in the NHS, which is so severe that it is undermining the NHS’s capacity to properly deliver its services—we all know it is on its knees. The long-term workforce plan produced by NHS England suggested that the system is operating with over 150,000 fewer staff than it needs. According to the Royal College of Nursing, there are 43,000 vacant registered nursing posts in the NHS in England alone.
Like my hon. Friend the Member for Sheffield Central, the general secretary of Unison, Christina McAnea, rightly predicted the damage that the Government’s reforms would do were they to get rid of the bursary scheme. She said:
“They seem not to care that in a few years’ time”—
that is now—
“the NHS will be seriously short of nurses and there will be too few new recruits coming through to fill the gaps”.
Seven years later, we can all attest to that being the truth.
The NHS, our greatest institution, was established 75 years ago by a Labour Government, and it is experiencing some of the most severe pressures in its history. Waiting lists are at an all-time high. Ministers point to the impact of the pandemic, but waiting lists were already too high before the pandemic. If we want to make sure our NHS survives another 75 years, the Government must make progress on the workforce challenges. They need to look at all options and think bigger to incentivise more people to take up healthcare professions. Restoring some sort of financial support package may do that. They must fundamentally rethink the way they approach their support for healthcare students, including by making extra funding available for healthcare education and training.
We owe it to our healthcare students to ensure that they have adequate financial support as they provide the care that keeps us all healthy, and to protect the long-term interests of our country by having a workforce that can truly deliver all the services that the national health service provides.
Andrew Gwynne (Denton and Reddish) (Lab)
It is a pleasure to serve under your chairmanship, Ms Fovargue. I welcome the Minister to his latest position on the Government Front Bench. I hope he enjoys what remaining time the Conservatives have in government in the Department of Health and Social Care. I wish him all the best over the next few months.
I am grateful for the opportunity to respond to the debate on behalf of the shadow Health and Social Care team. I thank my hon. Friend the Member for Battersea (Marsha De Cordova) for her powerful speech, and my hon. Friend the Member for Sheffield Central (Paul Blomfield) for his wise contribution. I also thank the Petitions Committee for its work in preparation for the debate.
Being a student nurse during the cost of living crisis is tough. We know that valuing our NHS workforce through fair pay and conditions is crucial to tackling vacancies, yet according to the RCN’s 2023 summer survey, almost nine in 10 student midwives in England—89%—worry about the amount of debt they are in, and 74% of them expect to graduate with debts of more than £40,000.
Paul Blomfield
My hon. Friend is making a very important point, and I am sure that he will come on to say that the experience of midwives also applies to nurses and others on healthcare courses. The report by the APPG for students, which I mentioned a moment ago, highlighted the way in which the student funding model was broken, not least by pointing out that, according to Save the Student, the average loan now falls short of living costs by £439 every month. Most students are dealing with that by taking on ever-increasing amounts of paid employment, which is raising some concerns. One Russell Group university told us that a significant number of its students work more than 35 hours a week. Does my hon. Friend agree that that option is not available to most nurses, midwives and other healthcare students on similar courses, because of the structure of their courses? The Government are failing to address that issue.
Andrew Gwynne
My hon. Friend hits the nail on the head. We are talking about student nurses and student midwives, who do not have any spare time to dedicate to other forms of paid employment: it is physically and mentally impossible for them to do so. There needs to be greater recognition of the unique nature of these kinds of students. Many students—including me, many years ago—rely on extra support to make ends meet, but people studying in the caring professions, including nursing and midwifery, do not have that same ability. That was one reason why there was always additional support for those groups of people.
Fifty-eight per cent of respondents to the survey conducted by the Petitions Committee for this debate said that it was difficult or very difficult to afford energy, including gas and electricity, 19% said they had visited a food bank, and 26% said they were considering using one. That is a national scandal—a cost of living scandal that is having a devastating impact on our ability to recruit and retain staff in the national health service. Over nine in 10 student midwives in England—91%—know someone who dropped out of their midwifery studies because of financial problems.
The Conservative Government abolished NHS bursaries for student nurses, midwives and allied health professionals back in 2017. Students undertaking their degree since then have had to pay to train to work in the NHS. As a result, not surprisingly, the number of applications to study nursing in England fell, with applications down by almost 30% by 2019. It is not rocket science to work out what caused that. Labour said at the time that the decision to remove the NHS bursary was the wrong one, and the Public Accounts Committee, in its September 2020 report, agreed that the decision
“failed to achieve its ambition to increase nursing student numbers.”
That is just another example of a Government who have time and again failed to plan for the long term.
In this NHS workforce crisis, we have deteriorated to the point where we now have over 100,000 vacancies, including 40,100 nursing vacancies. We have waited so long for the NHS workforce plan, and now we finally have it. Labour has been calling for a workforce plan for years, and I am glad that the Government pinched the plan of my hon. Friend the Member for Ilford North (Wes Streeting). Since its publication, though, not much has happened. It makes clear the scale of the neglect—a wasted decade of drift and inaction, impacting not only on staff but on trainees.
Placements are an important part of nursing and healthcare courses. They provide the vital supervised training that allows students to gain the necessary skills and experience to meet education outcomes and work in clinical settings. Labour knows the value of placements, which is why increasing them is an important part of our plan to expand the NHS workforce. We will focus on ensuring we have the roles, trainees and senior professionals needed to tackle the challenges we face and seize opportunities, drawing on a diverse range of skills and inspiring people around the country to pursue a career in the NHS and caring professions. We will also work with health staff and their trade unions to review existing training pathways and explore new entry routes to a career in the NHS, including high-quality apprenticeships.
The childcare sector is under huge strain. While some healthcare students may be eligible for parental support from the NHS learning support fund of £2,000 a year, that is dwarfed by the ever-increasing cost of childcare. It leaves many studying parents vulnerable to childcare costs, particularly considering the hours needed to fulfil placement requirements. It has been reported by openDemocracy that some nursing students considered leaving their courses because of financial pressures related directly to childcare costs. That is, sadly, a trend across our economy. The cost of childcare is pricing parents, especially women, out of the professions they love.
Does the Minister agree that adequate support for a profession as critical as nursing or midwifery should not depend on where a person studies but should be the same across the board? What assessment has he made of support at all stages of training for studying parents, in order to build an effective and inclusive workforce in our NHS? The 11,000 people who signed the petition will be looking for a response from the Government, so does the Minister regret the decision to abolish NHS bursaries? What additional support can healthcare students expect, given the current cost of living crisis?
Two in five student nurses and three in five student midwives said that they considered leaving their course last year, so we must take this seriously, especially given the threat to the future of the NHS workforce that it poses. Already students have cited the placement experience and lack of support as major factors in their leaving their course. The Conservative-made crisis in the NHS only makes this worse. We might have expected in this month’s King’s Speech to hear of something to deal with the worst NHS crisis in its history, but there was virtually nothing.
The energy price cap has increased by half this Parliament, the cost of living crisis is hammering healthcare students, and we have a flagship energy Bill that
“wouldn’t necessarily bring energy bills down”.
Whether we are talking about the NHS or the cost of living crisis, this Conservative Government look like they have thrown in the towel. They are divided, weak, out of ideas and out of time. Every day that goes on, it is British people, our public services and our patients who pay the price. For Labour’s part, we know that our healthcare staff are our national health service’s most valuable asset, and we know how vital it is to ensure that there is a pipeline of future talent coming through. That is why the next Labour Government will put their workforce plan at the heart of their plans to restore, renew and rejuvenate our national health service.
The Minister of State, Department of Health and Social Care (Andrew Stephenson)
It is a great pleasure to see you in the Chair, Ms Fovargue, for my first Westminster Hall debate in my new role. I am grateful to the British public for raising the important issues covered in the three petitions we are considering today, and to the hon. Member for Battersea (Marsha De Cordova) for opening the debate. I also thank the shadow Minister, the hon. Member for Denton and Reddish (Andrew Gwynne), for his contribution and his qualified welcome to me in my new role, and the hon. Member for Sheffield Central (Paul Blomfield) for his interventions during the debate.
Our students are the future of our NHS, so it is imperative that we not only support them throughout their studies, but ensure that as many as possible go on to successful careers in healthcare. The Government recognise the unique nature of healthcare degrees, the intensity of the courses and the additional financial pressures that clinical placements can cause, which is why we are doing as much as we can with the funding available to us to ensure that clinical students have the financial support they need to succeed.
Two of the petitions focus on pay for student placements. While they are on placement, student nurses, midwives and allied health professionals make valuable contributions to clinical teams, but the purpose of such placements is student development, not meeting staffing needs. They exist to give students the opportunity to learn and to acquire the skills and experience they need to graduate and join the professional register. That is why we believe that clinical placements should not be described as jobs. Students are not contracted to provide care and do not hold contracts of employment, so while we recognise the significant contribution made by students, the Government do not plan to introduce pay for students on placement at this time.
Marsha De Cordova
The Government are not planning to look at this issue again, but have they looked at the impact of student nurses being taken out of the workforce in NHS care settings, to see how the workforce would manage without them? They play a vital role. Yes, they are learning and so forth, but they also fulfil another role. Have the Government carried out any assessment of the impact of taking them away from that by not giving them pay?
Andrew Stephenson
The Government and the professional bodies that set the rules for student placements have made it very clear that if the students are not there, the setting should still be clinically safe and procedures should be able to be conducted. All student placements should be in addition to regular staffing; they should not be used to fill gaps in staffing rotas. That is not to suggest in any way that students on placement do not make a significant contribution—I think we all agree that they do, and I pay tribute to them for the contribution they make—but in all settings, if the students are not there the employed staff should be able to continue to deliver NHS services in the way that we all want.
We do not wish to introduce pay for students on placement, but we do intend to continue to listen to students’ concerns about the cost of training and to consider what we can do to support them, building on the work we have already done. Since September 2020, all eligible nursing, midwifery and allied health professional students have benefitted from a non-repayable, non-income-assessed training grant of at least £5,000 per academic year from the learning support fund. On 1 September this year, we announced a 50% increase to the travel and accommodation payments available through the learning support fund, ensuring that students are appropriately reimbursed for travelling to clinical placements.
The Government are not just supporting the more traditional routes into education and training. As we set out in the first ever NHS long-term workforce plan, we are expanding alternative routes into healthcare, enabling people from diverse backgrounds and those for whom a traditional university degree is not possible, or is not the right thing for them, to bring their unique skills and perspectives to the NHS. We are now offering blended learning courses, allowing students to take some of their courses online, and more than a quarter of nurses’ mandatory practice learning hours can now be delivered via innovative simulation. We are also continuing to expand our apprenticeship offer, allowing students to study towards a degree while also learning on the job. As set out in the long-term workforce plan, we will deliver a huge increase in the number of clinical staff apprenticeships; we intend to get them up from 7% today to 20% by 2032. That is building on the success of our existing registered nursing degree apprenticeship programme; more than 10,000 students have started on that course since 2017.
We are providing a more diverse set of pathways into healthcare careers in order to open up more opportunities for staff to progress and move into new roles. Thanks to an increase in the number of associate roles, such as nursing associates, it will be possible to join the NHS as an apprentice healthcare support worker and go on to qualify as a registered nurse.
I would like to pick up on a point made by the hon. Member for Sheffield Central, who talked about the UCAS figures showing a 16% decline in applications. The drop in applications compared with previous years reflects an expected rebalancing following the unprecedented demand for healthcare courses during the pandemic. At the June application deadline this year, there were 44,000 applicants for nursery and midwifery courses in England, which is an increase of 12% compared with this time in 2019. The latest data shows that over 22,000 students have accepted places on nursing and midwifery courses in England, which is an increase of 6% compared with the same time in 2019. If we look at allied health professionals, 2,200 more graduates enrolled on paramedic science courses overall in England in 2021-22 than did so in 2019-20, which represents a 30% increase.
Let me address the second issue raised today: childcare payments for student midwives, nurses and paramedics during their placement hours. The Government understand how important childcare is for studying parents, and we believe that they should have every opportunity to continue in education and achieve their aspirations. As the Minister for Skills, Apprenticeships and Higher Education set out in our response to the petition, the Government provide a range of financial support to students with children. They are eligible for 15 hours of free early education for three and four-year-olds, and full-time students on undergraduate courses who have dependent children could also be eligible for the childcare grant and the parents’ learning allowance. The childcare grant covers whichever is the lowest: 85% of childcare costs or a fixed maximum amount of around £190 a week for one child or £320 for two or more children. The parents’ learning allowance of up to £1,915 a year does not have to be repaid; it is paid in three instalments—one at the start of each term—and goes directly into students’ bank accounts. What is more, as part of the learning support fund, my Department offers all eligible nursing, midwifery and allied health professional students an additional non-repayable and non-income-assessed grant of £2,000 per academic year towards childcare costs.
Using the budgets available to us, the Government will continue to provide students who have children with as many opportunities and as much support as possible to allow them to pursue a career in healthcare. As we set out in the first ever NHS long-term workforce plan, a robust and resilient education and training system is critical to the future of our NHS, because, by having the right people with the right skills in the right places, we can deliver first-class care for patients, now and into the long-term future.
Marsha De Cordova
I thank my colleagues, my hon. Friend the Member for Sheffield Central (Paul Blomfield) for his important contributions and my hon. Friend the Member for Denton and Reddish (Andrew Gwynne), the shadow Public Health Minister, for his contributions.
It is disappointing, given all of the information that was set out in my speech and in the speech delivered by my hon. Friend the Member for Denton and Reddish, that the Government really have not fully addressed the challenges around financial support. We already know that the support that the Minister set out is not good enough; the evidence, which is clear and truthful, suggests that that is not enough. The number of people entering the professions is falling because of the financial constraints. The Minister did not address the disproportionate impact on women and mature students with dependents. I again ask him to look at some of those challenges and ways to address them—for example, the scheme in Wales, where students can commit to working in the NHS, which helps to bring down any debt that they may incur as a result of their studies. It would be useful to know whether any impact work was ever done on the abolition of the bursary in 2017.
Our NHS is everybody’s pride and joy, and those entering healthcare do it because they care and want to make a difference. The Government’s job should be about making it as easy, as flawless and as seamless as possible for them to do so. We have seen the removal of the bursary and then its replacement with the student learning support packages, but they are simply not enough. That is why tens of thousands of people signed the petitions. They wanted this debate here today.
Question put and agreed to.
Resolved,
That this House has considered e-petitions 610557, 616557 and 619609, relating to pay and financial support for healthcare students.
Written Statements
(5 months, 3 weeks ago)
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UK-Gulf Co-operation Council Free Trade Agreement
(5 months, 3 weeks ago)
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The Minister of State, Department for Business and Trade (Greg Hands)
The fifth round of negotiations for a free trade agreement between the UK and the Gulf Co-operation Council took place between 5 and 16 November.
The round was hosted by the GCC in Riyadh and held in a hybrid fashion. A number of UK negotiators travelled to Riyadh for in-person discussions, with others attending virtually.
Draft treaty text was advanced across the majority of chapters. Technical discussions were held across 21 policy areas over 40 sessions. Good progress was made and both sides remain committed to securing an ambitious, comprehensive and modern agreement fit for the 21st century.
An FTA will be a substantial economic opportunity and a significant moment in the UK-GCC relationship. Total trade was worth £61.5 billion according to latest figures.
The sixth round of negotiations is expected to be held in the first quarter of 2024.
His Majesty’s Government remain clear that any deal signed will be in the best interests of the British people and the United Kingdom economy.
[HCWS49]
Advanced Manufacturing: Funding
(5 months, 3 weeks ago)
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The Exchequer Secretary to the Treasury (Gareth Davies)
On Friday 17 November, the Government announced £4.5 billion in funding for manufacturing to support private sector investment in eight strategic sectors across the UK. Together with our existing manufacturing support and plans for the net zero transition, the funding will level up communities across the country with higher-paid jobs and improve our energy security.
The funding will be available for high-quality proposals from 2025 for five years and therefore help unlock private investment by providing longer-term certainty. It is targeted at the UK’s strongest, world-leading sectors, and where the industry is undergoing fundamental changes as the world transitions to net zero.
Over £2 billion has been earmarked for the automotive industry, supporting the manufacturing and development of zero-emission vehicles, their batteries and supply chain.
The sum of £975 million has been earmarked for aerospace, supporting investment in energy-efficient and zero-carbon aircraft equipment.
Further, we have committed to £960 million for a green industries growth accelerator to support clean energy manufacturing, and £520 million for life sciences manufacturing to build resilience for future health emergencies and capitalise on the UK’s research and development strengths.
The green industries growth accelerator investment will support the expansion of strong, homegrown, clean energy supply chains across the UK, including: carbon capture, utilisation and storage; electricity networks; hydrogen; nuclear; and offshore wind. This will enable the UK to seize growth opportunities through the transition to net zero, building on our world-leading decarbonisation track record and strong deployment offer.
More information, including on the application processes, will be made available by the Government in due course.
The funding forms part of the Prime Minister’s pledge to grow the economy, and his focus on making decisions for the long term. It does not just focus on the most successful sectors today but looks ahead to how we keep pace internationally and build the UK’s expertise for the industries of the future. The funding will also help to ensure that the UK remains at the forefront of the global transition to net zero and can seize growth opportunities in the new green economy.
This approach is part of the UK’s wider offer for advanced manufacturing. The Government have also published Professor Dame Angela McLean’s pro- innovation regulation of technologies review on advanced manufacturing and the Government’s response[1], and announced commitments to extend the connected and automated mobility research and development programme and expand the Made Smarter adoption programme for manufacturing SMEs. The Government will shortly set out more on their actions to support investment and growth in the manufacturing sector with the publication of the advanced manufacturing plan and UK battery strategy.
[1] https://www.gov.uk/government/publications/pro-innovation-regulation-of-technologies-review-advanced-manufacturing.
[HCWS48]
Investment Zones and Freeports
(5 months, 3 weeks ago)
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The Exchequer Secretary to the Treasury (Gareth Davies)
The Government are announcing that the investment zones programme in England will be extended from five to 10 years. Each investment zone will be provided with a £160 million envelope from 2024-25 to 2033-34, which can be used flexibly between spending and tax incentives, subject to ongoing co-design of proposals and agreement of delivery plans with the Department for Levelling Up, Housing and Communities and His Majesty’s Treasury.
The Government are also announcing that the window to claim freeport tax reliefs in England will be extended from five to 10 years until September 2031, conditional on each freeport developing a satisfactory delivery plan agreed by the Department for Levelling Up, Housing and Communities and HM Treasury. This extension will provide long-term support to businesses looking to invest, delivering growth and jobs, and levelling up the country.
The Government will work with the Scottish and Welsh Governments with the intention of delivering the same extension for freeports and investment zones in Scotland and Wales, and will continue to work with stakeholders on how best to deliver the benefits of the investment zones and freeports programmes in Northern Ireland.
Alongside this, the Government and the West Yorkshire Mayoral Combined Authority have jointly announced that the West Yorkshire investment zone will focus on life sciences, and digital and tech, building on existing local strengths in these sectors. This will bring benefits to local communities and businesses across West Yorkshire, including in Huddersfield, Bradford and Leeds.
Paxman Scalp Cooling, a pioneering health tech company, and digital healthcare company Dedalus have committed the first new investments into the investment zone worth a total of £26 million. Paxman Scalp Cooling is investing £5 million to bring its innovative health tech products to global markets and Dedalus is investing £21 million to deliver digital and diagnostic tools for the NHS.
Building on the region’s research strengths and its existing base of businesses in life sciences, digital and technology, the West Yorkshire investment zone will bring opportunity into areas that have historically underperformed economically through a total funding envelope of £160 million over 10 years. It is expected that the investment zone will help leverage more than £220 million of private funding and help support more than 2,500 jobs over the next five years.
The Government and the West Yorkshire Mayoral Combined Authority will continue to work together on the investment zone to jointly agree the outstanding elements of the programme, including the breakdown of how West Yorkshire’s envelope will be deployed, with a view to setting out further details in due course.
[HCWS50]
International Development White Paper
(5 months, 3 weeks ago)
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The Minister of State, Foreign, Commonwealth and Development Office (Mr Andrew Mitchell)
In 2015, the world gathered at the United Nations to agree the sustainable development goals—a development framework for people, planet, prosperity, peace and partnership for development to 2030. Now at the mid-point of the SDGs, and in a more divided world, this development progress is at risk of reversal. Only 15% of the SDG indicators are due to be met. The covid pandemic, the rise in conflict and instability, food insecurity caused by Russia’s illegal invasion of Ukraine, as well as the impacts of climate change and biodiversity loss and the lack of affordable finance, are all examples of the resounding challenges we now collectively face in delivering the SDGs.
Today the Government have published an international development White Paper that makes a powerful and I hope persuasive case for a renewed global development partnership and a reinvigorated role for the UK in delivering the SDGs.
The global context for development has changed. The UK’s approach to development needs to change with it. Developing countries want and need a different development offer, based on mutual respect, powered by development finance at scale, and backed by a more responsive multilateral and international system. This White Paper is our pledge to take a patient, partnership-based approach to development—an approach that looks ahead to the longer-term challenges we face and can readily adapt to the ongoing global changes confronting us. We will bring together a whole-of-UK effort, capitalising on the integration of our diplomacy and development expertise, to achieve greater impact and address the links between extreme poverty and climate change effectively.
In this spirit, the White Paper has been built on extensive consultation: here, in the UK, with right hon. and hon. Members across this House—foremost with the International Development Committee—and the other place; with our charity sector, of course; with academia; with business; and with our global partners. It sets out a road map that galvanises progress in tackling the universal challenges of poverty, climate change, insecurity, and delivering sustainable growth and wellbeing for all, and we will see a step change in the domestic understanding and support for this work. Similarly, it should help spur action internationally. This paper is built on listening to and drawing on the voices of our friends all around the world. It is clear that trust has weakened; and only by listening and acting can we start to rebuild it.
We have set out seven priorities in the White Paper. These priorities matter to our partners and we consider them to be critical in achieving the SDGs through collective global efforts.
First, we must mobilise more money and impact from international financial institutions and increase private sector investment in development to end extreme poverty, tackle climate change and power sustainable growth.
We must reform and strengthen the international system to improve action on trade, tax, debt and tackling dirty money, and deliver on global challenges. We must ensure that the multilateral system is more responsive, inclusive and effective.
We must tackle climate change, biodiversity loss and their impacts, while delivering sustainable growth and economic transformation.
We must ensure opportunities for all, putting women and girls centre stage, and investing in education and health systems that societies want, while also standing up for our values, for open, inclusive societies, and preventing the roll-back of rights.
We must tackle conflict, disasters and food insecurity, anticipating and preventing conflict and humanitarian crises while building resilience and enabling adaptation for those affected by disasters and climate shocks, and strengthening social protection and disaster risk financing.
Lastly, we must harness innovation and digital transformation, making best use of new technologies, science and research to deliver the greatest and most cost-effective development impact.
The White Paper explains how we will advance all seven of these priorities.
We believe that a world where developing countries are more resilient, more prosperous and secure is in everyone’s interests. Global development co-operation is essential to achieve this vision. Together with our partners, we will get the SDGs back on track to 2030. The White Paper sets out our commitment to do so.
[HCWS47]
Voluntary Scheme for Branded Medicines Pricing, Access and Growth
(5 months, 3 weeks ago)
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The Secretary of State for Health and Social Care (Victoria Atkins)
I am pleased to inform Parliament that agreement has been reached on a Heads of Agreement for the 2024 Voluntary Scheme for Branded Medicines Pricing, Access, and Growth (VPAG). This is an agreement between the Department of Health and Social Care—representing the UK Government, the Governments of Scotland and Wales and the Northern Ireland Department of Health—NHS England and the pharmaceutical industry, represented by the Association of the British Pharmaceutical Industry (ABPI).
This is an important milestone in the agreement of a new scheme. Once the Heads of Agreement has been formalised in a full scheme document, the 2024 VPAG will operate for five years starting from 1 January 2024, when the current scheme ends.
The 2024 VPAG stands to deliver savings to the NHS across the next five years, rapid patient access to new clinically and cost-effective medicines, and a sustainable approach to medicines provision.
The proposals also demonstrate the Government’s commitment to supporting a strong UK life sciences industry to drive economic growth, including through the establishment of a £400 million fund to support investment in the UK life sciences ecosystem, including improved clinical trial capacity.
[HCWS52]
Productivity in Policing
(5 months, 3 weeks ago)
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The Minister for Crime, Policing and Fire (Chris Philp)
I am pleased to announce the publication of the independent Policing Productivity Review.
In August 2022, the Home Office commissioned the National Police Chiefs’ Council (NPCC) to conduct an independent review of productivity in policing. The report was commissioned to provide clear, practical, and deliverable recommendations to improve efficiency and effectiveness across the functions of policing. I am happy to advise the House that the review team have now provided their report to the Home Office.
While we are still considering the recommendations made in the report, I am supportive of any efforts to identify opportunities to increase productivity within policing, reducing unnecessary burdens on police officers’ time and freeing up their time to do the frontline work of protecting the public and catching criminals.
The report has identified many opportunities for making improvements, both long and short-term, and the Home Office will now consider these recommendations in more detail, engaging with policing and other key stakeholders, as we prepare to give a full response in the New Year.
I am looking forward to working with policing to make the changes necessary to unlock the full potential of the opportunity provided by the review.
A copy of the Policing Productivity Review will be placed in the Libraries of both Houses and is available at www.gov.uk.
[HCWS45]
Election Finance Regulation
(5 months, 3 weeks ago)
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The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Jacob Young)
In July 2023, the Government confirmed their intention—20 July 2023, Official Report, HCWS985—to proceed with uprating reserved and excepted party and candidate spending limits and donations thresholds to reflect historic inflation in the years since the respective limits were set. The intention to review these thresholds was set out in December 2020, and the Westminster Parliamentary Parties Panel was consulted in September 2022. This is a necessary action as many of these statutory limits, set in absolute terms, have not been uprated for over 20 years.
Today, the Government have uprated in line with inflation the expenditure limits for candidates and registered political parties at UK parliamentary elections, Northern Ireland Assembly elections and local government elections in England. The same statutory instrument also uplifts the reporting thresholds for donations and regulated transactions for political parties, regulated donees, permitted participants at relevant referendums and unincorporated associations making political contributions. These changes are made through the Representation of the People (Variation of Election Expenses, Expenditure Limits and Donation etc. Thresholds) Order 2023.
The lack of change in absolute terms impacts campaigning ability, given the increased costs of printing, postage and communication, which is vital for parties and candidates to engage with voters. For example, a second-class stamp cost 19p in 2000; it is 75p today.
Parliament anticipated this, which is why the legislation allows for these limits to be adjusted to account for inflation. The Government’s policy is now to increase them so that they are the same in real terms as the original limits set by Parliament.
It has been more than a decade since the donation reporting thresholds were last uprated—by the last Labour Government—in 2009, following their introduction in 2000. If these limits are not uprated from time to time, the effect is to cut the thresholds in real terms. The principle of a threshold for publishing donations was established following the report by the Committee on Standards in Public Life—the “Neill Committee”—on the funding of political parties in 1998 (Cm 4057), noting the need to balance privacy and transparency. The Labour Government’s response in 1999 (Cm 4413) agreed with this principle.
The purpose of these reporting thresholds is to provide transparency around the granting of larger donations, balanced with the administrative burden such reporting may create for the recipient and with the privacy of smaller donors. Uprating these thresholds will ensure that balance is maintained in line with the original policy and legislative intent of Parliament when setting the thresholds. Again, there is no change in real terms.
The Government have decided not to increase the £500 threshold relating to the point at which a financial contribution is considered a regulated donation and subject to permissibility checks. This approach will ensure that the checks on the permissibility of donations and donors remain as they do now, and reflects the broader stance the Government have taken to prevent foreign interference in elections.
The substantive provisions on donation reporting thresholds come into force from 1 January 2024 to align with the reporting year for political parties.
The Government have also made the Police and Crime Commissioner Elections (Amendment) Order 2023. This delivers the uprating of spending limits for candidates standing at police and crime commissioner elections. These limits have not changed since they were first set in 2012, which has the effect of reducing the spending limits in real terms. The order will be laid before Parliament and will come into force on 12 December, subject to annulment in pursuance of a resolution of either House.
Further secondary legislation will follow in due course, to complete the delivery of spending limits uprating—for local councils, combined authorities and the Greater London Authority—and to deliver the Government’s commitment to exempt reasonable security-related expenses from contributing to election spending limits.
None of these reforms costs taxpayers money. Indeed, in Britain, taxpayers do not have to bankroll political parties’ campaigning. Political parties have to raise money themselves, while following transparency and compliance rules laid out in law. Those who oppose party fundraising need to explain how many millions they want taxpayers to pay for state funding instead.
The Government will further engage with the Parliamentary Parties Panel and the Electoral Commission to ensure that those affected are aware of these changes.
Taken together, the measures will support continued democratic engagement by political parties and candidates; and facilitate continued freedom of political expression and association, whilst ensuring our elections remain free and fair.
[HCWS53]
Levelling-up Fund: Third Round
(5 months, 3 weeks ago)
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The Secretary of State for Levelling Up, Housing and Communities (Michael Gove)
I am delighted to announce that £1 billion will be allocated to 55 projects as part of the third round of our flagship Levelling-Up Fund.
Listening to feedback from parliamentarians and local government, including in relation to the first two rounds of this fund, we decided not to run an additional competition. We received 529 bids in round two, of which 111 were awarded funding at the time, with a further 19 projects funded separately at spring budget. For round three, we have drawn on this impressive pool of existing bids which we were not able to fund earlier in the year but were assessed as high-quality and ready-to-deliver. We will work closely with local authorities to ensure that the projects allocated funding can make a difference to communities as quickly as possible.
We have targeted funding at the places most in need across Great Britain, as assessed through our Levelling Up Needs metrics, which take into account skills, pay, productivity and health. We have also taken care to ensure that every part of Great Britain benefits from this round of funding, from Bolton to Elgin, and Newcastle to Rhyl.
Since 2021, the Levelling-Up Fund has played an important role in driving prosperity and pride in place in communities across the country. Across the first two rounds of the Fund, £3.8 billion has been awarded to 216 projects which are well underway. The Levelling-Up Fund also continues to play a key role in helping to reduce geographical disparities across the United Kingdom. Over the lifetime of the Fund, we have exceeded our original commitment of awarding £800 million to Scotland, Wales, and Northern Ireland.
To this end, the third round of the Fund will see £122 million awarded to six projects in Scotland, such as £14 million to improve Dumfries and Galloway transport and £15 million to regenerate Drumchapel Town Centre in Glasgow. In Wales, we have awarded a further £111 million to seven projects, including £20 million to regenerate Barry town centre and £27 million to Neath Port Talbot across two projects. In England, Yorkshire and Humber and the North West will receive the most funding per head, with exciting projects like the £48 million upgrade to the Penistone Rail Line in West Yorkshire, and the £20 million Town Centre Improvements and Civic Square Development project in Chorley, receiving funding in this round.
In Northern Ireland, given the current absence of a working Executive and Assembly, the Government are not proceeding with this round of the Levelling-Up Fund at this time. We will continue to work closely with projects and places in Northern Ireland that were awarded a total of £120 million in the first two rounds of the Fund.
A full methodology note has been published for the third round of the Fund and we have notified all relevant local authorities of their awards. I will place a copy of the methodology note in the House Library.
[HCWS51]
Network North: Highways Maintenance Funding
(5 months, 3 weeks ago)
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The Secretary of State for Transport (Mr Mark Harper)
I am pleased to inform the House that my Department last week published details of the very significant £8.3 billion extra funding for local road resurfacing which will lead to a long-term, unprecedented transformation in the condition of our highways. Local highway authorities across England are set to benefit from the biggest ever road resurfacing programme to improve local roads.
The funding is part of the Network North plan to improve journeys for all and provides long-term certainty to local authorities. In keeping with the Prime Minister’s commitment, all moneys previously allocated for the north and midlands will still be allocated there, with moneys from savings at Euston being spent across England, with the funding broken down as follows:
£3.3 billion for the north of England
£2.2 billion for the midlands
£2.8 billion for east, south-east (including London) and south-west England.
This funding is in addition to local transport funding from the last spending review and additional to what local transport authorities were expecting in future. Allocated across the next 11 years, it will represent a more than two-thirds increase in Department for Transport support for local roads. Fifteen per cent of the funding will be allocated at a later date to allow a degree of flexibility over how best to support highway maintenance initiatives across England.
Of the new funding, £150 million is being made available in each of the financial years 2023-24 and 2024-25, with the lion’s share to follow over the remainder of the 11-year period. This provides time for local authorities and their supply chains to ramp up to deliver an increase in funding of this significance. Details of what each local highway authority will receive are published on gov.uk.
To ensure that the funding delivers a transformational improvement in the condition of local roads and to allow a greater degree of public scrutiny over how it is spent, the Department is introducing new reporting requirements on local authorities. These include that all local authorities receiving this funding should:
Publish by March 2024 a summary of the additional resurfacing work they will deliver with the new funding over the next two years.
Thereafter publish quarterly reports summarising what additional work they have done and which roads have been resurfaced.
Publish later in 2024-25 a long-term plan for their use of the full 11-year funding and the transformation it will deliver.
This is transformative funding which directly demonstrates the benefits that will be felt right across England for all road users, who will enjoy smoother, faster and safer trips, funded from the difficult but necessary decision to cancel HS2 phase 2.
[HCWS46]
Health and Disability White Paper
(5 months, 3 weeks ago)
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The Minister for Disabled People, Health and Work (Tom Pursglove)
I would like to update the House on the progress of a number of tests and trials set out in “Transforming Support: The Health and Disability White Paper”, which was published in March this year.
Our ambitious White Paper plans are part of our next generation of welfare reforms and will transform the health and disability benefits system. This includes supporting more disabled people and people with health conditions to start, stay and succeed in work, and making improvements to the benefits system so that people have a better overall experience when applying for, and receiving, health and disability benefits.
Among the White Paper initiatives under way, six test new and innovative ways to deliver our goals, responding to views we heard through the Green Paper consultation.
First, the employment and health discussion is a voluntary service available to claimants with a disability and/or long-term health condition, and is a discussion with a claimant about their health situation, any barriers it presents in moving towards work, and how to overcome them. The EHD is not part of the assessment process and takes place before the work capability assessment. It began as a small-scale test in Leeds health model office in 2022, with employment and health practitioners seconded to the Department for Work and Pensions from Maximus, which operates the Centre for Health and Disability Assessments.
I am pleased to update the House that from October this year, after a positive initial evaluation, we have expanded the test to 13 sites across England and Wales. With the support of Maximus, we have further grown our team of employment and health practitioners.
Secondly, the White Paper also set out our plans to test a severe disability group for claimants who have conditions that are severely disabling, lifelong, and with no realistic prospect of recovery. The SDG will provide these claimants with a simpler gateway to access benefits, identifying them at the start of the assessment process and removing the need to complete a detailed form or undertake a face-to-face, telephone or video assessment.
Our testing plans are progressing, following positive engagement with Blackpool Teaching Hospitals NHS Foundation Trust. We will test the SDG and its criteria in several specialist clinical areas in secondary care at Blackpool Teaching Hospitals. The British Society of Physical and Rehabilitation Medicine has also agreed to work in partnership to test the SDG. We expect to start generating referrals in the coming months.
Thirdly, we have started a small-scale test, matching personal independence payment, universal credit and employment and support allowance claimants’ primary health conditions to an existing assessor with professional experience of supporting people with that condition. This is taking place in health transformation area sites in London and Birmingham.
We want to understand whether claimants view this different approach positively and if it improves their trust in the assessment process. This test is scheduled to run until January 2024, at which point we will review our learning from the test and consider possible next steps.
Fourthly, the enhanced support service provides bespoke personalised support for people who find it hardest to use the benefits system. It provides practical support to these claimants—for example, by helping them to fill in forms, submit medical evidence and attend health assessments—as well as signposting to appropriate wider support. Testing is ongoing in East Anglia, Kent, Blackpool and Birmingham.
Through our fifth test, we are exploring options to introduce a new way of gathering evidence of fluctuation in a person’s condition before their assessment.
Some stakeholders have advised that current assessments do not always fully capture the impact of fluctuating conditions and that it can be difficult for some people with fluctuating conditions to answer questions about how their condition impacts them for the majority of the time.
We are in the early stages of testing a health impact record as a structured way to present evidence that demonstrates the changing impact of applicants’ health conditions.
Finally, the health assessment channels trial is nearing completion. Following the introduction of phone and video assessments, we have been analysing whether there is a difference in award outcomes for assessments completed remotely, compared to face to face. We have also been conducting research to gain an understanding of claimant experience by different channels.
Evaluation is taking place across all tests and trials to develop our evidence base, inform wider implementation, assess value for money and determine next steps.
We will continue to discuss progress with the devolved Administrations.
We are also committed to continue listening to and working with disabled people and people with health conditions, organisations, charities, business and other experts, as we develop our plans and continue the tests and trials I have set out today.
We have made good progress since the publication of the White Paper. These improvements will ensure that disabled people, and people with health conditions, can access the right support at the right time, and lead independent and fulfilling lives.
[HCWS44]
Grand Committee
(5 months, 3 weeks ago)
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Arrangement of Business
(5 months, 3 weeks ago)
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The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)
My Lords, it is very unlikely that there will be a Division in the Chamber, so we will get going.
Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2023
(5 months, 3 weeks ago)
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Lord Callanan
That the Grand Committee do consider the Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2023.
The Parliamentary Under-Secretary of State, Department for Energy Security and Net Zero (Lord Callanan) (Con)
My Lords, this order was laid before the House on 19 September. The UK Emissions Trading Scheme—the ETS—was established under the Climate Change Act 2008 by the Greenhouse Gas Emissions Trading Scheme Order 2020 as a UK-wide greenhouse gas emissions trading scheme to encourage cost-effective emissions reductions, contributing to the UK’s emissions reduction target and, of course, ultimately our net-zero goal.
The scheme is run by the UK ETS authority, which is a joint body comprising the UK Government and the devolved Governments. Our aim is to be predictable and responsible guardians of the scheme and its markets. In doing so, we will ensure that the scheme remains a cornerstone of our ambitious climate policy.
We have brought forward this SI to implement a number of necessary changes and improvements to the scheme. The changes relating to aviation free allocation rules and to the treatment of electricity generators follow the announcements made by the UK ETS authority in July in our response to last year’s consultation on developing the UK ETS. The final change remedies an inconsistency around free allocation and carbon capture at UK ETS installations. On aviation, this SI will cap the total amount of aviation free allocation that operators are eligible to receive at 100% of their verified emissions.
This SI makes technical changes to free allocation rules regarding the electricity generator classification for industrial installations. It will amend the electricity generator classification to consider only electricity exports in the baseline period, instead of all electricity exports since 2005, allowing operators to change their installation’s electricity generator classification if they have put a stop to the export of electricity. Electricity exports represent no more than 5% of the total produced allowances and will also be excluded from consideration in this classification.
The SI will amend the electricity generator definition to exclude installations that have produced electricity for sale if that electricity was produced by means of a high-quality combined heat and power plant, operating as part of an operator’s industrial activity. This will limit reductions in free allocation entitlements and provide further encouragement for industrial operators to achieve improved efficiency for their combined heat and power plants.
The SI also makes an operational amendment to the electricity generator classification. The SI will allow electricity generators to be eligible for free allowances after the application date if they can demonstrate that they produced measurable heat by means of high-efficiency co-generation during the allocation period.
The SI also remedies an inconsistency in the legislation to make it clear that carbon capture and other types of regulated activity may be carried out on the site of the same installation. The SI will allow provision of free allowances to industrial installations at the same site as a carbon capture plant.
As the Northern Ireland Assembly is not sitting and cannot consider affirmative legislation, this statutory instrument therefore covers only Great Britain. Officials in Northern Ireland have agreed that that none of the provisions currently affects operators in Northern Ireland.
These changes deliver on commitments made by the UK ETS authority and improve the operation of the scheme. For aviation, the SI will ensure that aviation free allocation is distributed appropriately until full auctioning for the aviation sector in 2026. This follows the decision announced in July that aviation free allocation will be phased out by 2026.
On free allocation technical changes, the SI will ensure that installations classed as electricity generators, whose eligibility for free allocation is limited, are able to change their classification if they are no longer exporting electricity. The SI will also ensure that industrial installations with high-quality combined heat and power plants which export excess electricity to the grid are not classified as electricity generators so as to not limit eligibility for free allowances.
On the electricity generator operational amendment, the SI will ensure that electricity generators can become eligible for free allowances during an allocation period if they meet the eligibility criteria. On free allocation rules around carbon capture, the SI will prevent industrial installations being disqualified from receiving free allowances if they are on the same site as a carbon capture plant—a situation that could pose a risk of disincentivising the uptake of carbon capture technology.
These changes either follow appropriate and comprehensive consultation with stakeholders or did not require consultation. In developing the UK ETS consultation in 2022, the UK ETS authority considered what technical improvements can be made to the current aviation free allocation methodology until free allocation is phased out. The responses to the consultation called for an end to the overallocation of aviation free allocation. In addition, the policy intent of aviation free allocation is to mitigate the risk of carbon leakage, and the policy did not intend for aircraft operators to receive more allowances than their verified emissions. To that end, in July the UK ETS authority announced the decision to cap aviation free allocation at 100% of verified emissions.
In the consultation on developing the UK ETS, we considered technical changes to free allocation rules regarding the electricity generator classification. The majority of respondents agreed with our suggested amendments, and the UK ETS authority announced that it would proceed with changes to the electricity generator classification. A consultation was not carried out for the CCUS free allocation amendment as this is a clarification of existing policy intention and not a change in policy.
In conclusion, these alterations to the UK Emissions Trading Scheme will support its role as a key pillar of the UK’s climate policy. They show that we will take action to improve the scheme where necessary and continue our record of delivering on our commitments. I therefore commend this order to the Committee.
Lord Teverson (LD)
My Lords, perhaps I may make a few comments in front of the crowd here. I welcome the SI generally , obviously, and want to try to ensure that it works properly. I have a couple of specific questions.
I am interested in understanding how the free allocations were allocated or what the baseline was for the airlines. Also, in the scheme as a whole, what proportion of units are free issue these days? I would be very interested to hear that for the current period, which I think goes up to 2026.
The Minister referred to the UK ETS as the cornerstone of ambition in terms of net zero, but of course, that cornerstone is crumbling at the moment. I would be very interested to hear, more strategically, how the Minister sees the fall in the carbon price per tonne, which has moved this year from around £100 at one point down to under £50.
To me, that seems to be, in the words of Energy UK, a major disincentive to investment in the renewables sector. As I understand it, it has threatened the Treasury to the tune of £1 billion so far this year and will mean a hit of something like £3 billion on the Treasury per annum if that price continues. As we know, there is also a threat from the European Union’s move to a carbon border adjustment mechanism—particularly in 2026, when those measures will really start to bite. There is a feeling that UK industry’s exports to the European Union could be threatened by some £500 million per year if that price remains as it is. I want to know the Minister’s understanding of why the price has fallen so much. My economics A-level tells me that, with supply and demand, when demand stays roughly the same but the price goes down, there is an all-round surplus in the supply of those units. However, there is also a volatility there, perhaps through a lack of liquidity in the scheme as a whole.
Looking again at the trade and co-operation agreement, particularly the area of energy in 2025, I would be interested to understand whether this is an opportunity to bring those trading schemes more together again, which was a target that the Government sought to achieve when that agreement was first made. Clearly, the fall in price strongly affects the renewables and clean energy industries. It seems to me that, not just from a Treasury point of view but from an industry and net zero point of view, we need to get that price back up again. I would be interested to hear the Minister’s comments on how that can be achieved—or indeed whether the Government wish to achieve it.
Lord Lennie (Lab)
My Lords, when the UK ETS was established due to the UK’s participation in the EU ETS ending, the Opposition supported it. It is essential that the UK has a robust carbon price to help reduce emissions. So when the UK ETS was launched, we expressed a preference for a link with the EU ETS. Indeed, the EU-UK Trade and Cooperation Agreement states that both parties
“shall give serious consideration to linking”,
which would lower the cost of decarbonisation through more price efficiency discovery and easier trade. Most importantly, it would ensure that UK exports of high-carbon products to the EU are exempt from the EU’s carbon border adjustment mechanism. This remains our preference, to support UK businesses in remaining competitive and retaining trade access to critical markets. Can the Minister tell the Committee whether an update on any such consideration is still being considered? Can he also say whether the Government have made any projections on the impact that the CBAM will have on our exports? What is welcome is the seriousness with which the Government are treating this while we remain unliked.
I turn to the instrument itself, which amends the ETS in five areas; I will touch on each of them but do not oppose any of them. As these changes do not seem simply to be updates on the system, I am keen to hear from the Minister how foreseeable the situations that led to them were and what impact the delay in implementing them, from when the UK ETS was established, has had.
First, as we heard from the Minister, the instrument implements a cap on the maximum amount of free allocation that aircraft operators are eligible to receive at 100% of their verified emissions. Not only does this seem to be common sense but, for the next two years, by 2021’s figures, it will save around a fifth by putting an end to overallocations in the sector. That is welcome. Again, by 2021’s numbers, this will prevent around £100 million of potential profits from operators selling these overallocations. Do the Government have any projection for 2024-25 or are the figures on pounds and percentage of emissions expected to be roughly the same? Going back to the first question, could this not have been seen from the start, or was it by design?
Lord Callanan (Con)
I thank the noble Lords, Lord Teverson and Lord Lennie, for their contributions. As I said in opening, the SI will implement a number of necessary changes and improvements to the scheme. The UK ETS is a cornerstone of our climate policy and it sets a cap on emissions in the sectors covered—currently, about a quarter of the UK’s emissions. In doing so, it guarantees that these sectors will reduce their emissions in line with our overall net-zero target. The carbon price generated by the need to acquire allowances within this cap incentivises the investment in decarbonisation that is needed to make sure that we can build a thriving net-zero economy.
In July, the UK Government and the devolved Governments, who all comprise the joint UK ETS authority, set out a comprehensive package of reforms to the scheme. These reforms increase the ambition of the UK ETS, setting its cap on a path to net zero. As set out in that package of reforms in July, a wide range of changes is required to ensure that the ETS remains a key part of the UK’s approach to achieving net zero.
As part of the UK ETS authority, with the devolved Governments, we are determined to run and develop the scheme in the most effective way possible. Our aim is to be predictable and responsible guardians of the scheme and its markets. That is fundamentally why the changes in this SI are being brought forward: to deliver on our previous commitments and make essential improvements to the scheme. The alterations to the scheme that this SI brings about will support its role as a key pillar of the UK’s climate policy. They demonstrate the value of the detailed consultation that we have carried out with scheme participants. We are committed to listening to views and implementing changes where necessary to make the scheme run as efficiently as possible, so that it ultimately achieves its aims. The changes to aviation free allocation and technical changes to free allocation follow the comprehensive consultation on developing the UK ETS carried out last year. They deliver on commitments made in the response to that consultation in July.
I will now pick up on the points made in the debate, first in response to the noble Lord, Lord Teverson. We have decided to cap the total amount of aviation free allocation that operators are eligible to receive to ensure that aviation free allocation is distributed appropriately until full auctioning in 2026. In 2021, the level of aviation free allocation issued to operators surpassed the sector’s verified emissions, primarily due to the impacts of Covid-19 on aviation activity. However, even prior to the impacts of Covid-19, under the EU ETS, a number of operators received more free allocations than their verified emissions.
The current aviation free allocation methodology calculation is based on 2010 activity data, which is now of course inconsistent with current aviation activity and creates competitive distortions between participants. Not capping the amount aircraft operators are eligible to receive therefore effectively shields them from the price signal and provides an opportunity to benefit from the scheme, which, I am sure we would all agree, was not the intended aim of the policy. To answer the noble Lord’s question, in 2022, the proportion of UK ETS emissions covered by free allocations was approximately 36%.
On the noble Lord’s point on the fall of the UK ETS price, it is of course a market mechanism, and the price of carbon allowances in the emissions trading scheme is ultimately set by that market. However, in line with the net-zero cap that we announced in July, the supply of emissions allowances entering the market will fall significantly every year from 2024. Using the noble Lord’s supply and demand analogy, we can probably predict—without saying it—what will happen to the price in such circumstances.
Lord Teverson (LD)
Is the Minister happy that the price has fallen by half this year?
Lord Callanan (Con)
As it is a market mechanism, I have some sympathy with the noble Lord’s point of view, but it would probably not be wise for me to comment on the overall price. I will let the market determine what it should be. If I say what I think the ideal target price should be, that would clearly be interfering in the market, which the noble Lord can understand I should not do.
We are committed to continuing to deliver these changes, as shown by our legislating to amend the supply of allowances over the coming years and the publication of the auction calendar for 2024. The authority has also committed to exploring measures for the future of the UK ETS market, including examining the merits of the supply adjustment mechanism, which would be a means of amending the supply of carbon allowances in response to market conditions.
The noble Lord, Lord Teverson, asked about the impact of the EU CBAM. We are of course following developments closely and engaging with the Commission to discuss the technical considerations relevant to UK manufacturing because, even though EU CBAM charging does not start until 2026, companies will have to report on their emissions from 2024 to 2026, prior to charging. We will see whether the EU proceeds with charging, but it will clearly have a significant effect on many UK companies supplying into the EU market, given the additional bureaucracy they will have to go through. Noble Lords should watch this space: I am sure the Government will have more to say on this shortly.
As I said, UK ETS prices are set by the market, as it is ultimately a market mechanism. The UK market is clearly separate from the EU market. It is therefore possible that prices will fluctuate and differ, although it is worth saying that both have similar levels of ambition. We will continue to work domestically and internationally to find solutions to any risk of carbon leakage and our ambitious climate commitments rightly require our industries to decarbonise. This includes our running a consultation earlier this year on domestic measures to mitigate carbon leakage, including a potential UK CBAM and mandatory product standards. We are looking at all these issues holistically to see which is the most appropriate carbon leakage mitigation across a number of policy designs. The response to that consultation will be published—to use the phraseology—in due course, and a further consultation on free allocation policy is due later this year.
On the point of the noble Lord, Lord Lennie, on linking the UK ETS and the EU ETS, as he correctly pointed out, under the terms of the TCA, the UK and the EU agreed to consider linking our respective carbon pricing schemes and to co-operate on carbon pricing. We are open to the possibility of discussing linking the UK ETS internationally with other schemes—it is not just the EU’s; there are a number of other schemes across the world—and we will continue to work collaboratively with other jurisdictions to tackle shared challenges and learn from the experience of others as we continue to develop the UK ETS. Indeed, I attended a meeting with a number of other jurisdictions only last week to discuss that very topic.
On the point raised by the noble Lord, Lord Lennie, on carbon capture and storage, there is currently an inconsistency in how capture activities and installations are dealt with in the ETS legislation, and that does not currently reflect the department’s policy. Some areas of the legislation recognise that capture and other regulated activities might occur at the same installation, but in other areas it is assumed that capture activities will be self-contained. The amendments clarify that carbon capture may take place on the same site as other UK ETS installations or regulated activities without the loss of free allocation in respect, of course, of non-capture activities. There has been no negative impact to date, as this technology is still very new and CCUS activity is not yet taking place, but the amendment will help incentivise the uptake of CCUS technology in the future and ensure that no negative impacts occur as it continues to develop.
On the electricity generator amendments and the impact of the previous baseline period, these rules were simply carried over from the existing EU ETS for consistency and we are now amending them to tailor them to the UK system. I hope I have answered all the points I was asked about and commend the order to the House.
Green Gas Support Scheme (Amendment) Regulations 2023
(5 months, 3 weeks ago)
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Lord Callanan
That the Grand Committee do consider the Green Gas Support Scheme (Amendment) Regulations 2023.
The Parliamentary Under-Secretary of State, Department for Energy Security and Net Zero (Lord Callanan) (Con)
My Lords, the regulations were laid before the House on Monday 16 October 2023. They make a set of changes to improve the administration of the green gas levy, which is charged to licensed gas suppliers in Great Britain, and to ensure that it works in line with the original policy intent. The legislation will ensure that the levy operates as intended and seeks to minimise the burdens arising from it for the scheme’s administrator, Ofgem, and for the gas suppliers that have to pay it.
The green gas levy, as noble Lords are aware, funds the green gas support scheme, which is a Great Britain-wide tariff-based scheme supporting new biomethane plants injecting biomethane into the gas grid. It facilitates ongoing investment in the biomethane industry and enables the development of new production plants. The green gas support scheme is expected to contribute 3.7 million tonnes of CO2 equivalent of carbon savings over carbon budgets 4 and 5, and 8.2 million tonnes of CO2 equivalent of carbon savings over its lifetime. During the peak years of production, biomethane plants incentivised by the GGSS will produce enough green gas to heat around 200,000 homes.
All funds raised by the green gas levy are used to fund the green gas support scheme. The GGL funds both tariff payments to plants on the GGSS and the scheme’s administration by Ofgem. The levy is charged to suppliers based on the number of meters they supply. Currently, the cost is relatively low, at 45p per meter in 2023-24. It will increase in the coming years as deployment of the green gas support scheme increases, with costs expected to peak at around £7.50 per meter in the late 2030s.
Lord Teverson (LD)
My Lords, I congratulate the Minister on a hugely extensive explanation of the SI. Unless I have missed something, which the noble Lord, Lord Lennie, will soon uncover, I will give the Minister the full support of the Liberal Democrat Benches on this SI.
Lord Lennie (Lab)
The noble Lord has high expectations. As with the scheme we just discussed, we were very supportive of this scheme when it came out and we still are. Supporting the injection of biomethane into the gas grid, replacing other gases, produces substantial carbon savings and is very welcome indeed. As such, I will not speak for long on this instrument, which simply makes changes to improve the administration of what is already a very positive scheme.
The extent of these changes is to improve the administration of the green gas levy, as the Minister said, to reduce the administrative burden for Ofgem and the gas suppliers that pay it, and to ensure a maintained link between the regulations and policy intent. We welcome the lower administrative burden for Ofgem. It is due, not least, to successful efforts during the passage of the Energy Bill, and it now has a specific mandate to support the Government to meet their net-zero obligation.
I have a few questions, which may help the noble Lord, Lord Teverson, in his curiosity about this. Where the instrument changed the green gas levy formerly, it implied that gas suppliers were paying too much due to how interest on funds is allocated. Specifically, interest that had accrued in Ofgem’s account was added to the levy collection target rather than deducted from it, which makes little sense. How did that apparent mistake happen? While it feels peculiar arguing against more money for a scheme that we support—for once, I am not suggesting that gas suppliers’ profits should be better used—it is important that such a scheme is administered fairly. What happened to the previous levies that were collected at too high a rate?
Lord Lennie (Lab)
The instrument also allows the Secretary of State to review and update the maximum levy amount to ensure that the levy remains able to sufficiently finance the GGSS after 2008-09, as the Minister said. This of course makes sense, as it is a good scheme and should be financed, but I am cautious on both sides of the argument. If the Secretary of State is to have this new power, why was the scheme not initially created with it written in? Also, if the predicted funding requirement increase is in part predicated on a welcome increase in biomethane production, do the Government foresee a situation where the other reason for the increase—inflation, which I should note was previously caused by the Government—could make a decision to increase the MLA difficult? If so, what happens to the scheme and, if not, could the MLA not increase automatically?
I am curious about the de minimis payments the Minister mentioned. Is this expected to make a net loss or profit for the levy, and has any review been done of the administrative functions that make small payments disproportionately burdensome?
As the Minister said, the other changes are minor, so I will conclude, other than to restate that it is welcome that this positive scheme is being further improved.
Lord Callanan (Con)
I thank the noble Lord, Lord Teverson, for his very brief contribution and his support. I will come on to the questions from the noble Lord, Lord Lennie, in a moment.
As I said, the green gas levy is charged to licensed gas suppliers in Great Britain to fund the green gas support scheme. These policies make an important contribution to achieving our emissions reduction target by incentivising the production of biomethane and its injection into the gas grid. This reduces the emissions intensity of the UK’s gas supply and ensures the capture and use of emissions from waste, which is used as feedstock for green gas production.
The SI will ensure that the green gas levy can run optimally and will reduce administrative burdens for Ofgem and gas suppliers, thus reducing costs. It will also ensure that the levy is set as intended by altering the collection formula and by adding flexibility to the setting of the maximum levy amount. Overall, this will help the delivery of a cost-effective levy, benefiting policy administration and gas suppliers and, therefore, bill payers.
I will pick up the first question from the noble Lord, Lord Lennie. As I said in my introduction, the interest is charged two years in arrears. There has therefore been no net effect from what was an administrative error when the regulations were tabled. We want this modification to the SI approved now so that, when those interest payments subsequently become due, they will be used to subtract and not add to the overall amount—as was originally stated in error.
The further changes will improve the administration of the levy by Ofgem and for all gas suppliers, and the instrument gives us the opportunity to make these changes. The levy was launched on 30 November 2021, and the intervening years to this point have given us the opportunity to identify one or two minor technical changes to the levy to help reduce the administrative burden. In answer to the noble Lord’s second question, again, we do not expect the de minimis level to make any difference to the overall rate—it is purely that for those very few gas suppliers that have a tiny number of meter points, the administration cost of the levy exceeds the sum raised, so actually it will probably save money in the longer term. However, of course it has no effect on all the big suppliers.
I have dealt with both questions from the noble Lord, Lord Lennie, and I commend this regulation to the House.
Resolution of Central Counterparties (Modified Application of Corporate Law and Consequential Amendments) Regulations 2023
(5 months, 3 weeks ago)
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Baroness Vere of Norbiton
That the Grand Committee do consider the Resolution of Central Counterparties (Modified Application of Corporate Law and Consequential Amendments) Regulations 2023.
The Parliamentary Secretary, HM Treasury (Baroness Vere of Norbiton) (Con)
My Lords, these draft regulations make necessary technical and consequential legislative changes and provide legal protection for contractual arrangements to ensure that the expanded resolution regime for central counterparties, or CCPs, operates as intended.
Resolution is the framework for managing the failure of certain financial institutions. Within this framework, the Bank of England is the UK’s resolution authority and leads on resolution processes once instigated. The UK’s current resolution regime for banks and building societies was introduced in 2009, and this was partially extended to CCPs in 2014. A new, bespoke and expanded regime for CCPs was created this year through Schedule 11 to the Financial Services and Markets Act 2023.
CCPs are firms that provide clearing services for large volumes of financial trading activity. They sit between buyers and sellers and guarantee the terms of the trade. They are systemically important pieces of market infrastructure—without them, the financial system cannot function effectively. The failure of a CCP and the resulting loss of its clearing services could lead to serious consequences for financial markets, financial stability and public funds. The UK’s expanded CCP resolution regime will enhance the Bank of England’s resolution powers and ensure that the UK is aligned with international standards on CCP resolution. To fully implement the expanded CCP resolution regime, the Government must lay a number of statutory instruments. Two of these are being debated by your Lordships’ House today.
The first set of regulations, the Resolution of Central Counterparties (Modified Application of Corporate Law and Consequential Amendments) Regulations, make the necessary changes to existing legislation to ensure that the expanded CCP resolution regime can function as intended. These modifications have two main parts. The regulations will ensure that resolution powers under Schedule 11 will continue to be treated in a similar way to the existing CCP resolution regime in the Banking Act 2009. This largely consists of mirroring changes made under the Banking Act to the Companies Acts 1989 and 2006.
Baroness Kramer (LD)
My Lords, when the original legislation that sits behind all this was debated in the House—for many hours—I remember a conversation afterwards with one of the clerks, who had sat through nearly all of the proceedings. The clerk said to me, “I have sat in this House for years and have been through many debates of all kinds, but this is the first time I have sat through a debate and not understood a single word of the entire discussion”. I am feeling some brotherhood with that clerk at the moment. I remember the past, but I have to admit that I still find utterly daunting the complexity of CCPs and the various pieces of legislation.
I have been digging through my memory and am trying to understand whether these SIs are essentially tidying-up measures designed to give more flexibility to the Bank of England—in its role as the resolution authority—in somewhat changed circumstances, and measures to increase its efficiency. I ask the Minister: is there anything in here to which she would draw our attention as representing a more fundamental change? I admit that I cannot find it, but I thought I should ask the question, given the narrowness of my understanding of this complexity.
As I remember, the resolution of the insolvency of a CCP was structured using a waterfall of liability. First, equity and the CCP came into use, and, after that, if necessary, so did a default fund, to which the clearing members had contributed. My colleague, my noble friend Lord Sharkey, and I pushed on this question, because it seemed apparent to us that the combination of equity and a default fund could work if, say, one clearing member collapsed, or perhaps even two. But, if the collapse were systemic, very quickly only the taxpayer would have the resource to step in. The taxpayer would need to do so immediately to prevent chaos in the financial sector nationally and, probably, globally. The Minister will be aware that virtually all CCPs around the globe essentially have common ownership and, in many ways, need to be looked at almost as a network, rather than a series of individual operations—certainly when one thinks about resolution.
So we asked the then Minister—I believe it was the noble Lord, Lord Sassoon—to clarify why members should not be forced to make bigger contributions in the case of insolvency, above and beyond equity and the default fund, because, obviously, sitting behind CCPs are huge banking institutions and, in other cases, oil companies. As I remember, we were told that, if faced with additional liability, those who operate or participate in the CCPs would choose to use exchanges outside, rather than inside, the UK. So, do these additional SIs empower the Bank of England to require members to make additional cash contributions? I am somewhat concerned that the negative SI—which we are not debating today but which sits with these, as the Minister rightly said—and its cash call powers might have that possibility. I am not saying that I am opposed to that, but I just wonder whether the Minister can do anything to help me understand it and whether there are therefore any implications for the attractiveness of the UK as a location for clearing.
The Minister kindly assured all of us that assets held in the CCPs as margin—collateral, in effect—are fully protected, and there are no implications for netting or off-set. I think I have understood that correctly. But, in a dynamic situation, there must be some adjustment to netting and off-set because, if there is an insolvency, changes in value take place on a moment-by-moment basis. Is there a way to encapsulate how that piece of it works? I am concerned about saying that there are absolutely no implications for netting and off-set, when it is very hard to see that there would not be in an insolvency situation.
I just want to confirm again with the Minister that the “no creditor worse off” safeguard is still fully robust and whether the SIs—the negative and the positive together—weaken it in any way. Is the taxpayer liability, as the ultimate backstop, changed at all by these SIs? Are there, therefore, any implications for public sector net debt? In other words, regarding this liability to act as the rescuer of last resort—it is implicit in CCPs because we are looking at a “too big to fail” situation if we have systemic insolvency—are there any accounting implications for the national debt? Is there any possibility that these changes would drive towards putting the liability on the books?
The notional value of outstanding over-the-counter derivates, which represent the largest body cleared through CCPs, exceeds $600 trillion at any point in time. What is now LCH—I still call it the London Clearing House—dominates that market. A third of that business reflects the clearance of euro-based derivatives under an equivalence granted by the European Commission for UK clearing houses. However, that will last only until June 2025. I know that the City and the Treasury are convinced that the EU will extend that equivalence grant out of necessity, but if it does not, the implications for the City of London will be huge. This is not a time for complacency. I ask again: are there any competitive issues to which we should be alerted in these SIs and which may have consequences for either the EU grant of equivalence or our dealing with the consequences if that grant is not given?
Lord Livermore (Lab)
My Lords, I begin by warmly welcoming the Minister to her new role. I very much look forward to working with her in the months ahead.
Baroness Kramer (LD)
May I offer my apologies for not having welcomed the Minister to her role? We talk to each other across the House so often that I hardly realised a change had happened; I apologise.
Lord Livermore (Lab)
As the Explanatory Memoranda accompanying these two SIs note, the current CCP regime was implemented around a decade ago, in part as a response to the global financial crisis. The Financial Services and Markets Act 2023 has introduced an expanded CCP resolution regime, with that Act giving the Bank of England, as the UK’s resolution authority, what the Government call
“an expanded toolkit to mitigate the risk and impact of a CCP failure and the subsequent risks to financial stability and public funds.”
Preserving market stability is of paramount importance. The UK’s financial services industry plays a vital role in boosting economic growth and delivering skilled jobs in every part of the UK. Almost 2.5 million people are employed in financial services, with two-thirds of those jobs based outside London, and the sector contributes more than £170 billion a year to GDP.
The City of London is one of only two global financial capitals and is at the very heart of the international monetary system. The UK’s reputation and success as a leading international financial centre depends on high standards of regulation as well as a stable and independent regulatory regime. Much of what is being implemented by these two SIs is a carryover between the old and new CCP regimes. Paragraph 3 of the impact assessment outlines that, if these steps were not taken, it
“would mean that there is no protection in place to ensure that the Bank’s powers do not disrupt normal market procedure.”
We therefore fully support both these SIs.
However, I want to ask the Minister a number of questions. First, an issue frequently raised with this type of SI is the sheer breadth of legislation that it tends to amend and the difficulty that those in the sector may face in familiarising themselves with all the changes once they have taken effect. The first of the SIs we are debating today makes a long list of changes to corporate law to ensure that the new Schedule 11 CCP regime will function effectively. The second SI somehow manages to be even more technical; it deals with partial property transfers and the writing down of liabilities, needed to ensure that they do not disrupt the new system’s operation. I ask the Minister, therefore, how interested parties will be, or have been, notified of the contents of these instruments, and when the guidance referenced in paragraph 11.1 of both Explanatory Memoranda will be laid. Will that guidance be laid before Parliament, or at least sent to the relevant parliamentary committees?
Baroness Vere of Norbiton (Con)
I am grateful to the noble Baroness, Lady Kramer, and to the noble Lord, Lord Livermore, for their kind welcome to my new role. From Transport to Treasury—how exciting. This is indeed my first outing, and I get to do some very, let us be honest, technical SIs. Like the noble Baroness, I too looked for the exciting or the unusual in these SIs and, unfortunately, I have not necessarily succeeded either. They are important and necessary to bring the new expanded regime into operationalisation, but I do not think there is anything in them that would trouble noble Lords. Judging by the questions raised by the noble Baroness and the noble Lord, it is more about the process, making sure that people are aware and ensuring that the CCPs actually function, which the noble Baroness pointed out.
I turn first to the noble Lord’s questions, because he was kind enough to give me sight of them before the debate, which is always incredibly helpful, because I always try to do my very best. I know I will not answer all today’s questions so I will, of course, write. I will start with notifying the interested parties. It should be noted that the CCP resolution liaison panel was convened in June this year to discuss the secondary legislation under Schedule 11, including the substance of these instruments. This panel includes a variety of industry stakeholders, including the three UK CCPs, organisations that represent large numbers of clearing members, insolvency experts and regulators. We have a wide range of people there, which feeds into the noble Lord’s point that it is disappointing to receive 14 responses to a consultation. However, for a consultation such as this we got responses from trade bodies and we are satisfied that the industry is well aware of what is going on and that it will be implemented on 31 December. The panel was not only consulted on these SIs but also on the code of practice, which describes how the Bank will use its powers under Schedule 11. This will be published when the new regime comes into force.
I am content that the industry is well aware of what is happening. We will continue to liaise with the industry as the regime comes into force and as the code of practice is published. That code will, of course, be laid before Parliament and updated and reissued—and therefore re-laid—as appropriate should any amendments be made.
In addressing the consultation responses, it is fair to say that we looked at all the feedback we had from the initial consultation and covered all the issues that were raised in the response. There has been ongoing consultation since then to ensure that the detail is correct, and that the relevant trade bodies and CCPs were fully involved in ensuring that not only the provisions of the FSMA but the subsequent delegated legislation required were robust. So we have done quite a lot of consultation and I do not believe that we could have done much more. It is certainly not my feeling that we have missed anybody out or that there is a groundswell of opinion out there that people needed to be heard.
With the FSMA, we very much tried to set out which elements should be in primary legislation versus some more technical measures which should be in secondary legislation. This legislation does not change the policy set out in the FSMA; it makes necessary changes to company law, which sometimes needs to be changed separately. It creates protections for important contractual arrangements, as necessary.
Noble Lords will have noticed the cash call limit. There are some things that everybody knows may need to be lifted in 10 or 20 years’ time; these are entirely appropriate for secondary legislation.
The noble Baroness, Lady Kramer, asked me a number of questions about the operationalisation—not only the way that these clearing houses work but who bears the biggest cost when they get into financial trouble. At the moment, given the potential impact on the UK’s financial stability from a CCP’s inability to continue to provide these clearing services, what we have done, and it is prudent to have done so, is ensure that the Bank of England has all the powers it may need in a full range of possible market stress scenarios. As the noble Baroness rightly pointed out, these things are often global and happen very quickly. Some may fare worse than others. In the unlikely event that this happens, it would be a highly unpredictable scenario. That is why we have tended more to set out a framework for how it would happen rather than go through the detail of any possible scenario.
The UK already has effective rules for CCPs’ own recovery arrangements. These include the requirement that a CCP’s total prefunded financial resources cover the losses from the default of two clearing members—not just two clearing members but those with the largest exposure. That is a fair balance between the likelihood of something happening and the necessity of tying up capital to provide a sufficient cushion. However, the Bank of England has a range of other powers that it would be able to bring to bear over the course of resolution not only on the CCPs but on those members within them to ensure that we end up with market confidence and that the system continues.
The noble Baroness mentioned “no creditor worse off”. The Treasury is required to have regard to the “no creditor worse off” safeguard in the event that a resolution occurs. Therefore, no individual will be worse off after a resolution than they would have been if the CCP had gone into insolvency. So, yes, these are not tidying-up measures but just key technical points to bring the regime into being.
I will write to the noble Baroness on how there can be no implications for set-off and netting. I understand what they are, but I want to reassure myself that I used the right words, and I will reply in writing, if that is okay. I have a little more information on whether clearing members should be required to make a bigger contribution, but I will also set that out in writing. There are probably one or two other points but, for the time being, I commend this instrument to the Committee.
Financial Services and Markets Act 2023 (Resolution of Central Counterparties: Partial Property Transfers and Safeguarding of Protected Arrangements) Regulations 2023
(5 months, 3 weeks ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Vere of Norbiton
That the Grand Committee do consider the Financial Services and Markets Act 2023 (Resolution of Central Counterparties: Partial Property Transfers and Safeguarding of Protected Arrangements) Regulations 2023.
Design Right, Artist’s Resale Right and Copyright (Amendment) Regulations 2023
(5 months, 3 weeks ago)
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Viscount Camrose
That the Grand Committee do consider the Design Right, Artist’s Resale Right and Copyright (Amendment) Regulations 2023.
The Parliamentary Under-Secretary of State, Department for Science, Innovation and Technology (Viscount Camrose) (Con)
My Lords, I beg to move that these regulations be considered. They and the Intellectual Property (Exhaustion of Rights) (Amendment) Regulations 2023 were laid before the House on 16 October 2023. Intellectual property—IP—matters. The IP framework protects creations of the mind, such as inventions, literary works, symbols and names used in commerce. The UK system is widely regarded as among the best in the world. Our IP system is built on laws that ensure consistency, certainty and balance. It has not only helped to incentivise innovation and the creation of new technologies and products but promoted competitive markets and consumer choice. Maintaining a balanced, consistent and stable IP framework is crucial for businesses, consumers and investors.
The draft regulations before the Committee today use powers contained in the Retained EU Law (Revocation and Reform) Act 2023—the REUL Act—to amend or restate certain provisions in IP legislation. They make targeted changes, to the benefit of our IP framework, in line with the aims of the Act. I will take each set of draft regulations in turn, beginning with the Design Right, Artist’s Resale Right and Copyright (Amendment) Regulations 2023. Subject to noble Lords’ approval, they will amend provisions in four pieces of IP legislation. I will explain more about these.
The Design Right (Semiconductor Topographies) Regulations 1989 provide protection for designs that are semiconductor topographies, implementing international obligations under the World Trade Organization’s TRIPS Agreement. Semiconductors, commonly referred to as chips, are the core component of all electronic devices. The semiconductor topography design right is an IP right intended to protect the design of specific semiconductor products, such as circuit boards, which can be relatively easy to copy.
The Earl of Clancarty (CB)
My Lords, I declare an interest as a visual artist. Some of my remarks will, I hope, be of interest to DCMS as well.
Many of the areas covered by these regulations are important to the arts and creative industries, but I want in particular to highlight the concerns of the visual arts. On 23 February this year, the noble Baroness, Lady Brinton, and I argued strongly for the retention of the artist’s resale right, having supported an amendment to that effect that was helpfully tabled by the noble Lord, Lord Clement-Jones, during the passage of the Retained EU Law (Revocation and Reform) Bill. I will not repeat all the arguments made in that debate, but I am glad—as will be the artists affected and, of course, the relevant rights management organisation, the Design and Artists Copyright Society—that the Government have rightly decided to allow this extremely useful scheme to be continued. I am grateful to DACS for its briefing on this.
The ARR has been in operation in the UK for 17 years. As the timely report produced by DACS this year shows, it has paid more than £120 million in royalties to over 6,000 artists and their heirs. UK artists themselves earn on average between £5,000 and £8,000 a year for their work—very little for the important work that they do, really—and much of these royalties gets reinvested in their practice, which will include studio rents and materials. Heirs use the royalties to store, restore and archive artists’ work, so this scheme is hugely beneficial not just to the individual artists concerned but, crucially, to the overall culture of the visual arts in this country.
DACS has confirmed what the Minister said, which is that the change from euros to sterling is useful, in that it will simplify the collection process for the royalty, as well as providing a currency that, to UK beneficiaries, will have a consistent value in the sense of not having to go through an exchange rate. I understand that, in response to the IPO, DACS also looked at the number of sales that would qualify under a new threshold—£1,000 rather than €1,000—which turns out to be a small percentage of total qualifying sales per year.
However, I want to make the wider point that, important as this scheme is, it will most benefit artists who are a few rungs up the ladder and have a reasonable secondary market, although the poorer artists will get the greater remuneration through ARR. Times are extraordinarily tough for a variety of reasons for those artists who are starting out or whose work has not yet achieved much value in the secondary market.
By supporting this scheme, the Government are signalling that they support visual artists, but one of the things that a Government could do better is ensure that artists are properly remunerated for the work they do, in particular for inclusion in publicly funded exhibitions. Beyond ARR, we can and should do much better in this country to support visual artists, particularly at the very beginning of their careers.
My only regret with the present legislation is that it was necessary in the first place. We have not had the gap that those who have benefited from the Horizon programme have endured, although the uncertainty will have caused some sleepless nights for the artists affected. As we know, there is no upside whatever to Brexit for the arts and creative industries. We have, quite rightly, talked a fair amount about the multitude of problems facing touring musicians, and it is too easy to forget that other forms, including the visual arts and the arts trade more generally, are significantly affected by Brexit. As I have said before, artists, particularly those without galleries to represent them, have been reduced to unwillingly smuggling their own work across borders, even for prearranged exhibitions in Europe, which is a ludicrous state of affairs. These are artists who are not just making great work but often very engaged in cultural exchange, which, even in an age of globalisation, feels even more important today, given how much communities, even within Europe, can be riven apart from each other.
In this internationalist vein, whatever one thinks, in the round, about the trade agreements that the UK has been making with other countries, it is good that ARR has been included in these deals, such as with Australia, with which we have a reciprocal agreement. Of course, these regulations honour that commitment that this country is making with other countries that also operate this scheme, as well as encouraging others to implement ARR. When the Minister comes to reply, could he provide us with a full list of those deals in which ARR features, and perhaps explain why the resale right has been left out of trade deals with Canada and India, if that is the case?
I thank the Alliance for Intellectual Property, DACS and the Authors’ Licensing and Collecting Society for their briefings on IP exhaustion. I hope that the Government understand by now how significant it is that so many artists in so many disciplines are united in wishing to continue with the current regime and not move to an international exhaustion scenario, which would so detrimentally affect these industries at every level.
Continuing the UK-plus regime is very much to be welcomed, although industry is mindful that it is officially an interim decision. Designers, writers and publishers alike, the music industry, visual artists and so many others within the creative industries are very much in agreement on this. We are very good at exporting our creative product. For example, 60% of the UK’s book sector income comes through exports, yet it is estimated that a significant proportion of its revenue—about £2 billion—could be at risk under an international exhaustion scenario, with the threat in particular to the domestic market. ALCS says:
“If we were to have a regime of international exhaustion the consequences could be less pay for authors and fewer publishers”
based in the UK able to
“take a chance and invest in creative talent across the country.”
It will be no help to the consumer whatever if, in the end, there is no product to buy.
It is worth thinking in this respect about the structure of the arts and creative industries. It is not a few large companies for which shocks to the system just might conceivably benefit consumers. The UK’s IP-rich creative industries are composed of many businesses of differing sizes, with many small businesses and freelancers. They need support. Within this context, what they need above all else is stability—a key word in the Minister’s speech—which the current regime enables. However, I welcome the new government decision on this, which will provide the necessary continuity that the arts and creative industries require, but we need to make this arrangement permanent.
Lord Clement-Jones (LD)
My Lords, it is a pleasure to follow the noble Earl, Lord Clancarty; I wholeheartedly agree with everything that he said. I should say from the outset that we on these Benches support both sets of regulations, which will, I hope, gladden the Minister’s heart as we start debating them.
There are, however, a number of points to be made in relation to them. I very much support what the noble Earl had to say about DACS, the not-for-profit visual artists’ rights management organisation. It recently helpfully published a report that highlights the pivotal role that artists’ resale rights play in supporting artists and the wider art market. As the noble Earl said, they have been somewhat controversial in the past, but, now that they have been included in trade agreements, I feel confident that they are now bolted fully into our intellectual and moral property rights. They are an absolutely vital source of income for many artists. The noble Earl talked about more than £120 million in ARR royalties, directly benefiting more than 6,000 artists and their heirs. Artists selling at the lower end of the art market benefit in particular from ARR: two-thirds of ARR payments in 2021 were less than £500 and 10% of artists received ARR royalties for the first time that year.
I will not repeat most of the rest of what the noble Earl had to say, just that I very much agree with a great deal of what he said. More than 90 countries worldwide have implemented some form of ARR legislation so we are in good company as regards what I see as this moral right. We have heard about the trade agreements; it would be useful to get from the Minister an idea of which agreements we have included this in. Christian Zimmermann, the CEO of DACS is definitely worth quoting. He said:
“The Artist’s Resale Right is more than a legislative mandate—it is a commitment to fairness, a recognition of the value of artists’ contributions, and an indispensable support for artists and their estates.”
The Minister may notice that I have used pounds sterling in my figures throughout so, naturally, I support that aspect of these regulations and, of course, the other aspects that are provided for in the regulations.
The Intellectual Property (Exhaustion of Rights) (Amendment) Regulations 2023 are, in many senses, a much weightier aspect of the regulations we are considering today. I am grateful to the Alliance for Intellectual Property and the British Brands Group for providing briefings and, indeed, their strong views on these issues. I know that the Minister will have heard many of their arguments in person but I want to put on record those views, with which, I should say, I and the All-Party Parliamentary Group for Intellectual Property strongly agree.
Members of both groups strongly consider that the status quo will deliver the strongest overall outcomes for shoppers, business and the UK economy. Following the UK’s departure from the EU, the UK Government now have control over the exhaustion regime. As the Alliance for Intellectual Property says, the importance of the decision on which exhaustion regime the Government choose cannot be underestimated. Although it seems a technical area of policy, it will have a real-life impact on businesses, consumers and regulatory authorities across the UK. Exhaustion regimes have the greatest impact on export-driven UK sectors as they underpin their ability to determine when, how and what goods to sell in international markets and at what price.
The noble Earl quoted the publishing sector. Industries of that kind are particularly successful at exporting; for example, the UK book sector derives 60% of its income from exports. We have heard that the Government have consulted on which regime the UK should select. In January 2022, the Government made an interim decision to select a UK+ regime that would maintain existing protections. As we have heard, this statutory instrument is being introduced by the Government relating to that interim decision. As the Minister said, though, the Government have not made a final decision on which regime to choose but are likely to announce their decision in the next few months. I hope that the Minister will give us some idea of the time in which he expects that decision to be made.
The British Brands Group believes that advice from officials is to make the interim decision permanent—at least, that is its impression—which would be widely welcomed. I want to take this opportunity to voice support for the interim decision and express concerns regarding any shift to an international regime that might arise in future. I am not going to explain what the alternatives are; I do not think I need to. National exhaustion is one alternative and international exhaustion is another; neither is practical nor attractive.
The current regime is regional exhaustion, an approach that has been working well for 50 years. Rights are exhausted once goods are placed on the UK or EU market, although they can be used to prevent the distribution of goods placed on markets outside those countries. This status quo operates well, as we know; it strikes us on these Benches and those organisations as proportionate, hence our strong support. The SI rightly provides for an IP exhaustion regime meaning that the holders of trademarks would not be able to object to the further distribution of their goods once they are placed on the market in the UK and the EU. They would, however, be able to object to imports from other countries.
The Government’s decision on the UK’s future exhaustion regime will be among the most important taken in relation to intellectual property policy during this Parliament. Its impact will affect businesses, consumers and regulatory authorities across the UK; as I have said, it will particularly affect export-driven UK sectors as it underpins their ability to determine how and what goods to sell in international markets and at what price.
Any shift to an international regime would also affect many of the UK’s leading design and branded goods companies. This would make it significantly more difficult to launch new products in countries around the world as those firms would not be able to vary pricing at launch for fear of those products re-entering the UK. A move to an international regime would also lead to consumer confusion since product and regulatory standards differ across countries internationally. Any “free for all” in parallel imports to the UK would undermine the UK’s product standards regulatory framework and would create uncertainty and confusion for the public.
Opponents of maintaining the status quo and supporters of an international regime suggest that there would be a reduction in pricing for consumers from an increase in parallel imports. Where parallel imports occur currently, in contravention of our regime, prices are not lower. As an example, you occasionally see bottles of Coca-Cola with foreign language labelling in some small shops but at the same pricing as compliant products.
We believe that the retail supply chain, including wholesalers and parallel importers, would therefore be the major beneficiary, rather than the UK public. The cost-benefit equation is likely to be between established creative industry sectors that find their home in the UK market but could choose to move elsewhere against a parallel import sector that does not currently exist and would not even need to be located on UK shores, nor to create UK jobs.
In summary, an international exhaustion regime would represent a significant policy shift away from innovation and growth. It would weaken competition, harm consumers and not help lower consumer prices, in our view. The SI as drafted sustains the current exhaustion regime until the Government confirm their long-term policy approach. The most recent government consultation identified no evidence at all to support a change in regime, so this debate is important.
I hope that the Minister, IPO and others in government resist calls for any change that could reduce IP rights holders’ ability to influence the distribution of their products in markets outside the EU and weaken their IP rights. A change in the UK’s trademark exhaustion regime would be a significant policy shift negatively affecting consumers, brand owners, UK exporters and public enforcement agencies, while not reducing inflation. I hope the Minister has got my message that this would not be a welcome change away from the current exhaustion regime.
Lord Stevenson of Balmacara (Lab)
I apologise for my slightly late arrival at the Committee. I hope that it was not noted too carefully, but we are doing two SIs as one group and I was here for the whole second part. I hope that that qualifies me to speak.
Also, it would be a terrible shame not to recapture the spirit of a few years ago, when a little group of three of four colleagues, including the noble Baroness, Lady Neville-Rolfe, debated a number of issues to do with intellectual property that came up at that time. It was interesting that a group from within the confines of Parliament then was able to get together and become quite expert at some of these issues. We had some very enjoyable debates and some of these issues have played out again today. Those who benefited from going on that journey gained a lot of knowledge and expertise, so I am not able to stun the Committee with some new insights; they have largely been covered by those who have built up their expertise from the same route that I have been on, so what I would say would be otiose.
I will congratulate both the noble Earl, Lord Clancarty, and the noble Lord, Lord Clement-Jones, for covering the points I would otherwise have made and piggyback on them to save the time of the Committee, which is a good thing.
However, it is interesting that we are still talking about issues that were live three or four years ago. I am sure the noble Baroness, Lady Neville-Rolfe, remembers them with some interest. We are still not clear what distinguishes our particular configuration of design rights. I still worry about those and hope that the department is working on a way forward with some of them. We had some clarity when we were thinking, within the EU context, of a way of trying to balance the difference between those which operated within the UK only and those that were being developed in Europe but were not able to go back to that. I do not think we quite got over the variations that can occur between the triad of patent, trademark and intellectual property in other forms, because they bump into each other. Although they have been dealt with rather well within these statutory instruments, there are occasions when they point in different directions and it is very hard to get a sense of the Government’s policy on them. There is still a need to do more work on that.
In turning to the SIs before us today, I want to raise a very narrow point on design right, ARR and copyright, from the Explanatory Memorandum. Although the noble Viscount touched on this in his introduction, he did not spend a lot of time on it. It is a question of broadly taking forward the arrangements that existed before we left the EU and making them slightly up to date as we go forward. I have no problem with the Design Right (Semiconductor Topographies) Regulations 1989, which were notably not mentioned by my two colleagues nor dealt with in any detail. That is a sensible move forward. We covered ARR and the copyright tribunal rules in some detail. That is a good change and an important way forward.
Viscount Camrose (Con)
My Lords, I very much thank the three noble Lords for their valuable and interesting contributions to this debate. As I said in opening, IP matters. The IP system exists to encourage innovation and the sharing of information, creativity and knowledge. It provides individuals and businesses with the confidence to invest their time, money and energy into developing something new. That is why the Government remain committed to a world-leading IP framework. We hope these regulations will ensure that the IP system continues to support innovation across the economy and will make some targeted changes to the benefit of our IP framework.
I shall respond to some of the important questions raised in the debate. The noble Earl, Lord Clancarty, asked about ARR. I thank him for his kind words and support for the changes to ARR in relation to the change of currency. He mentioned the benefits to smaller artists of the ARR regime and the noble Lord, Lord Clement-Jones, expressed similar support. Under that change, artists who continue to receive ARR payments will see an estimated average increase of around 7%, with the highest-value artworks obviously experiencing the largest increase. In addition, when UK inflation is taken into consideration, the minimum threshold resale price for ARR eligibility will actually be lower in real terms than when it was set in 2006.
The noble Earl and the noble Lord, Lord Clement-Jones, asked about government policy for ARR in free trade agreements and why ARR is not included in some negotiations; the noble Lord, Lord Stevenson, also touched on that matter. It is current government policy to support ARR globally via international fora as well as via UK free trade agreements. For example, in our recent free trade agreements with Australia and New Zealand we negotiated provisions to provide ARR on a reciprocal basis—that is, the UK will provide ARR royalties to Australian artists and vice versa.
Noble Lords asked about provisions in FTAs that are still being negotiated, specifically with India and Canada. They will forgive me if I cannot comment at this point on negotiations that have not yet concluded. Needless to say, I am happy to set out more information as it emerges on where we are with these or other free trade agreements.
I turn to the issue of exhaustion. I note the views of the noble Earl, Lord Clancarty, on the UK’s existing UK-plus exhaustion regime and on making the UK-plus regime permanent. As I think everybody in the Room agrees, this is an important matter. As the noble Earl is aware, the Government have consulted widely on it and continue to consider what the UK’s eventual IP exhaustion regime should be. Work to consider the decision on the UK’s future exhaustion regime is ongoing. We intend our future regime to strike the right balance between consumer choice and fair market pricing, protecting creators and promoting competition. The Government are aware that businesses would like certainty about future arrangements that will be affected by this decision. We will let stakeholders know the outcome of the policy decision in due course.
Lord Stevenson of Balmacara (Lab)
I think we all asked for a bit more detail than the Minister’s “in due course”. Could he be a bit more specific?
Viscount Camrose (Con)
Indeed. DSIT has been making representations to precisely that effect across government and that process is in train. I cannot provide a date for when it is going to be complete.
Lord Stevenson of Balmacara (Lab)
Could the Minister perhaps hint at what form it might take? Are we at the White Paper stage of the process or will it just be a statement that the issues are finished?
Viscount Camrose (Con)
Perhaps I had better write to all noble Lords present to say exactly what form that will take.
Lord Clement-Jones (LD)
I am sorry to interrupt the Minister as well. In addition to the timing, it would be useful to know what the instrument is going to be. Will it be another consultation? We have had a consultation, which finished last year, and now we have the SI. Is there going to be another consultation with another SI? The whole process needs unpacking a bit.
Viscount Camrose (Con)
That is fair enough. What I am hearing is that noble Lords want to know not just when it will be but what it will look like when it happens. That is an entirely reasonable request, to which I am happy to accede.
I note the views of the noble Lord, Lord Clement-Jones, on how the UK-plus regime supports the publishing industry in particular. I recognise the importance of this issue to a variety of businesses, which have provided extensive contributions to the public consultation on this matter. On behalf of the Government, I thank those businesses for their constructive engagement during the consultation and since. The noble Lord also—no, I am getting ahead of myself. I will move on, except to note that this issue has the potential to impact so many business sectors and therefore it is important for the Government to take the time to get it right.
The noble Lord also mentioned his concerns about a potential move to an international exhaustion regime. As I mentioned, no decision has been made. However, I should advise noble Lords that we intend a future regime to strike the right balance between consumer choice, fair market pricing, protecting creators and promoting competition.
I turn to the matters raised by the noble Lord, Lord Stevenson. I am grateful for his and his colleagues’ expertise on this important area of policy. He raised the review of design rights. The IPO began a review of that legislation last year, with a call for views published in January 2022. We want to make sure that the UK design system best meets the needs of designers and businesses. The IPO is now working on policy proposals on which to consult, which will likely happen in the first half of 2024. The review is fairly wide ranging, as the law around designs is complex and has not been reformed in any meaningful way for some time. It is important to do this work properly to make sure that any changes work for users and all stakeholders.
The noble Lord raised concerns about transparency reports issued by collective management organisations not being audited. The purpose here is to align the treatment of CMOs with that of other organisations in Companies House of similar size; to not treat them differently simply because of the nature of the work they do as CMOs, and therefore not to require organisations that qualify as small to conduct a formal audit in that way, along with other organisations of their size, scope and scale.
Small CMOs will still be required to produce annual transparency reports and to abide by the regulations that govern their conduct and operations. Removing the statutory audit requirement strikes a fairer, more proportionate balance between risk and cost for these small entities. The changes to the audit requirements were in recommendations evidenced by the additional burden imposed on them during a 2021 post-implementation review of the regulations. To provide some reassurance, I hope: this change affects just seven of the smallest CMOs.
The noble Lord, Lord Stevenson, also mentioned the expansion of the European Economic Area and how it would affect our exhaustion regime. Currently, the geographical scope of our exhaustion regime covers the UK and the European Economic Area. If the European Economic Area expanded the Government would consider how that would affect our exhaustion regime, but we would not wish to prejudice such a decision.
I hope all noble Lords will recognise that these proposed changes support a balanced, consistent and stable IP framework that is crucial for businesses, consumers and investors. I absolutely recognise the strength of feeling and argument in favour of maintaining this regime, but meanwhile I commend these regulations to the Committee.
Intellectual Property (Exhaustion of Rights) (Amendment) Regulations 2023
(5 months, 3 weeks ago)
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Viscount Camrose
That the Grand Committee do consider the Intellectual Property (Exhaustion of Rights) (Amendment) Regulations 2023
Digital Government (Disclosure of Information) (Identity Verification Services) Regulations 2023
(5 months, 3 weeks ago)
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Baroness Neville-Rolfe
That the Grand Committee do consider the Digital Government (Disclosure of Information) (Identity Verification Services) Regulations 2023
Relevant document: 54th Report from the Secondary Legislation Scrutiny Committee, Session 2022-23.
The Minister of State, Cabinet Office (Baroness Neville-Rolfe) (Con)
My Lords, I am glad to see the noble Lord, Lord Stevenson of Balmacara, and others, and I echo what he said about our constructive discussions in 2014-16. I am also pleased to see my noble friend Lord Camrose championing intellectual property, as we try to do, and to see him accompanied by my noble friend Lord Evans of Rainow in his new position as Cabinet Office Whip.
The Digital Government (Disclosure of Information) (Identity Verification Services) Regulations 2023 are an important part of this Government’s commitment to strengthen the use of data and information across the public sector. We are bringing these forward so we can deliver better and more joined-up services and, in turn, improve outcomes for our citizens.
The regulations aim to allow information sharing between named bodies for the specific purpose of supporting cross-government identity checking when it is needed. Verifying a user’s identity—ensuring that a person is who they say they are—is a key part of delivering many government services. The draft regulations enable this by establishing a new data-sharing objective under Section 35 of the Digital Economy Act 2017 and by setting out which public bodies may use the new objective. This will create a legislative gateway, enabling us to use existing data sets, which public bodies already hold, to help as many people as possible to access the government services that they need online. It is therefore central to the development of more inclusive and accessible systems.
Specifically, the proposed objective would unlock the full benefits of the new cross-government digital system known as GOV.UK One Login. This is now live; users are able to set up an account, log in and prove their identity in order to access an initial set of 24 government services, with more being added all the time. However, at the moment, users must have photographic documentation, such as a passport or driving licence. This will change following the introduction of the new objective, as it will unlock new ways for people without photo ID to prove who they are, opening up the system to more users.
The delivery of One Login is a step change in simple joined-up access to government services online. This, in turn, delivers substantial cost and time savings for the Government and users by reducing duplication and providing enhanced capability to identify and stop fraudsters. In summary, the proposed objective will, first, enable checks against existing government-held information, such as PAYE and benefits data, to build confidence in the user’s identity, which will be particularly key where service users do not have a passport or driving licence. Secondly, it will provide a specific legal framework for checks against documents currently used in identity verification, such as driving licences. Thirdly, it will enable the sharing of the results of identity checks performed by one named body with another, so that users need to prove their identity only once.
The draft regulations set out which of the bodies already listed in Schedule 4 to the Digital Economy Act can use the new identity-verification data-sharing power, such as HM Revenue & Customs and the Department for Work and Pensions. They also add four new public bodies to the schedule that will be able to use the power: the Cabinet Office, the Department for Transport, the Department for Environment, Food and Rural Affairs and the Disclosure and Barring Service.
The public bodies listed in the regulations are either bodies that hold information that could be used in support of proving that someone is whom they say they are or those that own and manage services that people need to access, which they therefore need to receive the results of identity checks. Of course, some public bodies do both.
The territorial extent of the draft regulations is England, Wales and Scotland. The Information Commissioner’s Office and the devolved Administrations support the draft regulations, and indeed the Scottish and Welsh Administrations have requested that certain Scottish and Welsh bodies be included in the draft regulations to enable them to use the new data-sharing power—so it is devolved friendly.
I am sure noble Lords will be pleased to know that these draft regulations have been subject to the standard rigorous processes of internal and external review. In the first instance, the objective has been subject to scrutiny by the Public Service Delivery Review Board, as set out in the underpinning code of practice on public service delivery, debt and fraud of the Digital Economy Act 2017. The board recommended that Ministers take forward these draft regulations since they meet the required criteria of supporting the improvement, or targeting, of public services to individuals in order to enhance their well-being.
Furthermore, the objective has been subject to a public consultation, which received more than 66,000 responses. Some respondents recognised the benefits to individuals of improved and more inclusive services. Some mistakenly expressed concern that this was a back-door route to identity cards. Therefore, in response to the consultation, the Government confirmed that they have no plans to introduce mandatory digital ID or identity cards. We also published additional information on how GOV.UK One Login will operate within these regulations and within the overall data protection framework. We extended the time between the regulations being approved and coming into force, and we amended some of the wording to reflect that of the Act. Of course, the Government understand that people want to protect their personal information and this is central to our approach. The draft regulations relate to using data only for the purpose of identity verification.
Part 5 of the 2017 Act gives the Government powers to share personal information across organisational boundaries to improve public services. It lays down what data can be shared and for which purposes. Data sharing must also have regard to the accompanying statutory code of practice on public service delivery, debt and fraud, which sets out how the power must be operated, including how any data shared must be processed lawfully, securely and proportionately in compliance with data protection legislation and UK GDPR.
The Digital Economy Act statutory code of practice on public service delivery, debt and fraud also requires information-sharing agreements to be listed on a public register of information-sharing activity under the powers. The framework for data sharing under the DEA provides a supportive background to help organisations to share data in ways that benefit the public, as confirmed by the Information Commissioner’s Office in its recent review. It includes robust safeguards that ensure that organisations share data responsibly and in alignment with data protection principles, while also safeguarding people’s rights.
I think these regulations are relatively straightforward and important, and I hope that colleagues will join me in supporting them.
Lord Clement-Jones (LD)
My Lords, it is good to see the Minister move seamlessly from intellectual property to digital and data, but both can sometimes create their own questions. Since this is the first time we have debated One Login in the Lords, I hope that the Minister will not mind if she gets a large number of questions about the scheme. As I understand it, the goal of the One Login programme is to create a log-in database owned by the Government and containing the verified names, addresses, dates of birth, phone numbers and email addresses of everyone who uses—eventually—all Government-owned digital services, which is likely to be everyone in the country.
Perhaps unfairly, I have always thought of One Login with some scepticism, as the son or daughter of Verify, and not in a good way. The cost of the failed Verify scheme was over £200 million. It would be very useful as part of this debate to hear the cost of OneLogin so far and how much more is budgeted to be spent on its rollout. It does seem strange that the Government are having another crack at a single verification system, given the many other trustworthy existing systems that could be adopted.
First, I think it worth mentioning what the Secondary Legislation Scrutiny Committee said in its 55th report in October. I think it was rather baffled and scathing at the same time:
“This is a classic example of an Explanatory Memorandum … with too narrow a focus”.
I think it felt it was being bounced to some extent, without the context in which One Login was going to be designed to work. It said:
“We therefore request that the Cabinet Office revises its”
Explanatory Memorandum
“to include sufficient background information to enable any reader to understand the legislation’s practical effects”.
I suppose I am lucky in that I followed the gory progress of Verify through to One Login and the current date. I have some idea of the purpose behind One Login. As I understand it, the principal effect of these regulations is to allow the Government to share data for the purposes of identification. The SI does not restrict those flows of data; data can flow into the Cabinet Office as envisaged but identity data can also flow from the Cabinet Office to any other listed department. I hope that the Minister will be able to confirm that.
Will the Government allow population databases to be copied, whether openly or not? The revised Explanatory Memorandum is silent on this, and it is unclear if this assurance from the Government’s consultation response will be delivered. The response said:
“In particular, information will set out which departmental services are using identity verification services to support delivery and which will provide data to help departments establish who a person is”.
Will that actually happen? Will there be that level of transparency? There are apparently no safeguards on sharing bulk data if the Government want to share for this purpose across government. What transparency will there be if and when this takes place?
There is then the question of for whose benefit One Login really is. Is this a “better login to government” project, which many people might applaud, or is it a “one identity to government” project? The answer at the moment appears to be the latter. I say this because medConfidential, which I thank for its briefing, reports that a
“meeting held during the consultation was told that the Government’s intent is to actively prevent individuals from having multiple login accounts. A person may be able to have multiple email addresses— indeed, they may already do—but Government would attach them to a single ‘identity’. This regulation allows that database to be shared in bulk”.
Not to put too fine a point on it, that turns One Login into a tool of a centralising state—with implications for the privacy of the citizen—which the Government have previously assured us many times they were not building. I would therefore be extremely grateful if the Minister described the reality of One Login, as well as its purpose and operation.
At a roundtable on the consultation, the Government Digital Service apparently said that the regulation’s “first use is One Login”, which suggests there will be a second use. It is unclear to us to what extent the DWP will embrace One Login for government, for universal credit, for HMRC’s services, or indeed for the MoJ’s digital courts. What commitment from government departments and agencies is there? I can see that they are all listed, but Verify fell down precisely because of the lack of commitment from many government departments. What about the identities, too, of public servants? Will they be able to have multiple identities as both citizen and employee? What is the reality of that?
Baroness Chapman of Darlington (Lab)
My Lords, I am grateful to the Minister for her helpful introductory remarks. This regulation concerns the sharing of information between public authorities to ensure that any information sharing under Section 35 is justified and proportionate. It permits public authorities to share information only for purposes consistent with tightly constrained objectives which are set out in regulations. This measure adds a new objective relating to identity verification.
In future, individuals will be able to create a reusable digital identity, which the Government say would be secure, convenient and efficient. Instinctively, we would be very supportive of this, but it would be helpful, certainly to me, if the Minister could perhaps explain with a practical example exactly how this will work from a citizen’s perspective, imagining perhaps that she is applying for universal credit. What will she be able to do that she cannot do now? How would her interaction with the service provider be enhanced by this new objective? Will there be a benefit to those who do not have a passport or a driving licence and who, on occasions, find it difficult to prove their identity? What future use does the Minister anticipate?
There are some future uses. The noble Lord, Lord Clement-Jones, quite rightly highlighted some of the potential problems with this, but there are potential benefits that I can see. For instance, could digital verification, in time, be helpful at polling stations in enabling individuals without passports or driving licences to vote, without having to obtain a certificate in advance? I do not know if noble Lords have ever seen one of these certificates that people have to get at the moment, but the one I saw recently was just a blurry picture on a piece of A4 paper. These things are meant to last for years. Perhaps the Minister could make inquiries as to whether digital verification at polling stations might be more convenient, perhaps even allowing real-time voter registration. It does matter, and it is vital that digital transformation benefits and enhances citizens’ experience and access to services, as well as making public services more efficient.
A number of respondents to the consultation were concerned—and I think everyone will have anticipated this—about the security of their information, and whether or not this could be the thin end of the wedge as they see it. We are pleased that this amendment would make things, I think, more convenient for individuals. To anticipate what the Minister may say, this is because they will no longer have to prove their identity multiple times, and should have a more seamless experience when accessing public services online.
However, there is concern from some that digital verification may become in some sense compulsory. It is rather like the banks, which have a strong high street presence—then online banking becomes very popular, and suddenly the more traditional methods of accessing the service become less viable and therefore less available, which arguably excludes some individuals. It is important that individuals are able to decline to access services digitally, if they wish, for whatever reason, and are not coerced or nudged into accessing services, which goes against their preference over time. With this in mind, it is important that individuals are provided with the right amount of information, so that they can understand what data is being shared, with whom, and what the benefits to them are in consenting to the data sharing. Can the Minister tell us more about how exactly this will be done and how consent will be obtained?
Having in mind the NAO’s report on digital transformation of government services from earlier this year, there are a number of potential issues that the Minister might also wish to comment on. The NAO found that departments are finding that in current market conditions, they cannot acquire sufficient digital skills and expertise in their teams. Can the Minister tell us what the Cabinet Office are doing to make sure that departments have the skills needed to safely progress with this change and future digital transformation across Government?
Also, what oversight are the Government planning? This is vital in establishing public confidence. What will the complaints process be? How are the Government planning to monitor the departmental use of this new objective and assess any inequalities created or made worse by its introduction? Will the Government check whether, in time, the less well off, older people, or people with certain disabilities or certain language issues, for example, are being disadvantaged by the preference of service providers to move to digital access? I look forward to the Minister’s responses to those questions.
Baroness Neville-Rolfe (Con)
My Lords, I thank the Committee—thin though we are—for its time and excellent questions in scrutinising the draft regulations. I think it is right to say that we have learned from Verify. One of the key things is always to learn from errors and learn how to improve things. This is a very different proposition.
The regulations will enable us to harness data more effectively, ensuring that as many people as possible can access the government services that they need online. This is particularly important where citizens and residents lack access to a passport or a driving licence, compelling them to resort to slower and costlier offline alternatives; the noble Baroness, Lady Chapman of Darlington, made that point. Approving the new objective allows us to construct more inclusive and accessible identity verification systems, namely GOV.UK One Login, which will deliver substantial user benefits and savings by minimising duplication and fraud risks.
The noble Lord, Lord Clement-Jones, asked many questions, mostly on the GOV.UK One Login programme, of course. This legislation is relatively narrow and is not about the programme as a whole, but I will try to answer some of his questions. I am sure that we can talk about things on another occasion, because I detect a lot of support for the principle of making it easier for people, particularly more vulnerable people, to access government services.
On the PCAG principle, GOV.UK One Login is being delivered in line with existing privacy principles. GDS has been working closely with members of its advisory groups to ensure this. The principles are a framework that GDS works within; they have never been official government policy. However, the data protection regime certainly gives me quite a lot of reassurance about how this will work. I tried to bring that out in my opening remarks.
On the question of population data, the purpose of GOV.UK One Login is to allow citizens who choose to use the service to prove their identity safely and securely in order to access government services online. It is not new that users need to prove who they are to access certain government services, nor that departments have to store information as a result. Let me assure noble Lords that users can delete their accounts at any time. The service standard requires services to provide a joined-up experience across all channels, so doing so would not lock a user out of all government services.
In response to the questions about benefits to individuals, let me say that the objective on data sharing would enable public bodies to share a wider range of specified data than is currently possible. This will allow GOV.UK One Login to draw on a broader range of government-held data sources when users need to verify their identity. This will benefit individuals and households by improving digital inclusion as people without photographic documentation, such as a passport, will still be able to provide their identity online and access government services by answering questions based on additional datasets. They will not have to provide the same data again and again. This will underpin users’ ability to reuse their verified identity across all government services without needing repeatedly to re-enter the same information each and every time they interact with a new service. Of course, that also brings savings to individuals and to government.
Lord Clement-Jones (LD)
Let me understand this. In effect, data is being shared across departments so it is not simply a way of having a wallet, if you like, within the Cabinet Office that then gives you a clear identity for the purposes of accessing government services across government; it is a question of sharing that identity data across government departments. It is data sharing in bulk across government departments.
Baroness Neville-Rolfe (Con)
It is data sharing for the purposes of digital identity. Ultimately, by April 2025, we hope to have approximately 145 central government services that can be accessed via One Login. It is a mistake to think that this is somehow going to be used in the bulk way that the noble Lord describes. It is about identity checking, not collecting huge amounts of data for use in a Big Brother sort of way; the noble Lord may have misunderstood this. Users can delete their account at any time. I think that the noble Lord’s concern is perhaps misplaced.
Baroness Neville-Rolfe (Con)
While I am on the subject of benefits to the individual, there is an example that I would like to share with the committee; it reflects a question that I asked. Sometimes, married women have two different names. I am in that lucky, or unfortunate, position. We understand that some users will need or want to use multiple accounts, so users can already set up multiple accounts on One Login using different email addresses that can relate to different names. From next year, we plan to allow users to link accounts under the same verified identity. The noble Baroness, Lady Chapman, asked us to look through the eyes of the individual. This is one of the things we have been trying to do in this programme, learning from the past.
Baroness Chapman of Darlington (Lab)
I am on my third surname as I have had two marriages, but that is not really where I was going. I was looking at it from the perspective of somebody trying to access a service. I cannot imagine that many people would be that interested in how you could link your different accounts, although I can see that it might be important at certain stages in someone’s life. In accessing a service, what will I be asked for or not asked for? It is about the practicality of it. If I am turning up at the benefits office, what is the difference?
Baroness Neville-Rolfe (Con)
The difference is that, at the moment, you tend to have to provide a passport. It is difficult to log in to some of these services without a passport or a driving licence. In future, as I made clear in my introductory remarks, it will be possible to use different sorts of identity data and to have a system within government that allows us to do that. That will have the effect of making it easier for more people who are finding establishing their identity difficult without encouraging a lot of identity fraud, which is obviously another concern that one has to take account of in putting these systems together.
Lord Clement-Jones (LD)
I entirely appreciate the Minister taking the trouble to talk us through this. The question is: for whose benefit is this? Is this so that government departments can identify somebody right across the board, so that you can have only one identity in government and so that the Home Office will share data with universal credit and every other department that interfaces with an individual? Is that the idea of this One Login? Or is it possible to have more than one digital identity?
Baroness Neville-Rolfe (Con)
As I said, it will be possible. You are not confined to one. It is very much coming at the problem from the user, not simply from the government department, which I think was one of the problems with Verify.
Baroness Chapman of Darlington (Lab)
I am still not quite sure that I get this. Let us say that I am going to the benefits office; I do not have a passport or a driving licence, and I am asked for other information instead to verify who I am. How will this benefit me in the future, assuming I have never had a driving licence or a passport? What difference will I experience? I am not trying to pick at this; I just want to see the benefit.
Baroness Neville-Rolfe (Con)
One obvious benefit is that more and more government departments are using digital. The technology is transforming our lives, after all. Once you have this single digital identity, you will then be able to use it to access services and opportunities from other government departments as well. That is the point: the digital identity will be used across the board. That is helpful to individuals. I should add that a document is published on GOV.UK outlining what data is being used by One Login. I think it is worth noble Lords looking at that.
The noble Lord, Lord Clement-Jones, rightly asked a question about cost—something we always used to ask about in our previous debates. The One Login programme’s total budget for 2022-23 to 2024-25 is £305.4 million. Of this, the programme forecasts expenditure of £132.7 million on the development and rollout of the system by the end of the current financial year.
The noble Lord mentioned the Explanatory Memorandum. We did indeed make some changes, as he acknowledged, to the Explanatory Memorandum, which was made available to the SLSC, to provide a clearer explanation of which part of the law the instrument is changing and why. He mentioned that the revised Explanatory Memorandum was laid on 2 November, and provided more contextual information. In particular, it explained that the SI provides the statutory basis for specified public bodies to share data in order to verify an individual’s identity in a safe and secure way so that they can access public services online, and that duplicative systems are being replaced with a single account. This is an obvious benefit.
The SI will also enable the GOV.UK One Login to draw on a broader range of government-held data sources when users need to verify their identity. That is an important point, because it is difficult for people who do not have a passport or a driving licence under the current system.
We are committed to being open and transparent by making information about data shared under the Digital Economy Act easily available for all to find and understand in the public register of data-sharing agreements. That was one of the safeguards laid down in that Act, so we have obviously taken that on board. That is an important point of transparency.
This is also underpinned by a robust code of practice—I have read it—which was created by Section 43 of the DEA. That sets out how the power must be operated, and includes setting out how any data shared under this power must be processed lawfully, securely and proportionately, in line with data protection legislation. We therefore have the DEA and data protection legislation coming together to allow us to implement this, hopefully life-changing, bit of technology in a way that protects the citizen. Obviously, the Cabinet Office is responsible for maintaining that register, and the Public Service Delivery Review Board is overseeing strategic consistency.
We have not seen that many regulations made under this Act—I think there was one on social care before—but we can see the value of the Act and the safeguards that Parliament added to it coming through.
On voter registration, the noble Baroness, Lady Chapman, raised a very good point, to my mind. I will have to follow up in writing. Fundamentally, as she said, these regulations will enhance the user experience. Despite many improvements over the last few years, today’s experience of interacting with government is too fragmented. We have multiple logins, and we are repeatedly asked the same information, which sometimes one has recorded on the phone—and sometimes recorded wrongly, as I know from my own experience. This is the same for everyone trying to access government. One Login will replace this with one system; we are used to this on our phones and so on, and there is a lot to be said for this new arrangement. We will have better data sharing to help those people without traditional forms of ID to access the services online that they need.
I hope noble Lords, having heard the benefits of the regulation—
Lord Clement-Jones (LD)
My Lords, I am sorry to interrupt the Minister as she comes to the final furlong, but the question of oversight raised by the noble Baroness, Lady Chapman, and by me, and the standards that will apply to this system, are extremely important.
Baroness Neville-Rolfe (Con)
Given the time, I will take that away, along with the voting point, if I may. I drew attention to the code of practice and the parent Act; we have every intention of following the principles, but the point about review and oversight is well made by the noble Lord, as always. I will come back to him on that point.
I am sorry that I have not been able to answer every question on the login area. I can introduce noble Lords to my honourable friend in the other place, Alex Burghart, who has spent a great deal of time developing these regulations. The point is that these narrow regulations before us today are a necessary enabler for this major change for the citizen. I hope that noble Lords, having heard the benefits, will join me in supporting the draft regulations. I commend them to the Committee.
House of Lords
Introduction: Lord Cameron of Chipping Norton
Research, Development and Innovation Organisational Landscape Report
(5 months, 3 weeks ago)
Lords ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Baroness Jones of Whitchurch
To ask His Majesty’s Government when they intend to respond to the Independent Review of the UK’s Research, Development and Innovation Organisational Landscape, published in March 2023.
The Parliamentary Under-Secretary of State, Department for Science, Innovation and Technology (Viscount Camrose) (Con)
The Government’s response to the landscape review is in its final stages of preparation and will be published imminently. The response will outline the ambitious actions that we have taken since the review’s publication, including through the Science and Technology Framework and the creation of DSIT. It will also announce further commitments to create a research, development and innovation landscape that makes the most of our strategic advantages and builds a more diverse, resilient and investable landscape.
Baroness Jones of Whitchurch (Lab)
I thank the Minister for that reply, but he will know that the review identified significant problems in the UK’s RDI landscape, some of which are long-term and serious, and are preventing us from becoming a science superpower. So can he assure us that the Government will take on board the integrated set of recommendations proposed in the review and establish an authoritative working group to implement them, rather than adopting a piecemeal approach to what it is a very serious challenge?
Viscount Camrose (Con)
Indeed it is a serious challenge. The review identified, I think, 29 separate recommendations. The approach that the Government are taking is to address them not merely singly but, as the noble Baroness suggests, collectively, as a whole, as well. In fact, since its creation, two of our major steps build on the foundations laid by the Nurse review: that is, the creation of DSIT itself and the laying down of the Science and Technology Framework, which builds on the review, to set up the approach along many of the lines that the review suggested.
Lord Krebs (CB)
My Lords, I apologise to the noble Baroness, Lady Jones of Whitchurch, for intervening too soon. The Nurse review points out that government investment in R&D in the UK, at 0.12% of GDP, is five times lower than the OECD average. The UK ranks 27th out of 36 OECD countries. Where does the Minister think we should rank if we are to unlock the UK’s full potential in science?
Viscount Camrose (Con)
I am not entirely sure where those figures come from. The R&D intensity of the UK—that is to say, the amount spent on R&D as a percentage of GDP—is between 2.8% and 2.9%. That places us fourth in the G7 behind Japan, Germany and the US, and behind Israel and Korea, so it certainly can be higher. That is why we have committed to spending £20 billion per year by the 2024-25 spending review.
Lord Wallace of Saltaire (LD)
My Lords, the figures that the noble Lord, Lord Krebs, spoke of are in the review; I read it this morning. Will the Minister reassure us that the response will represent the views of the whole of Whitehall, not just the Treasury but the Department for Education and the Home Office, for the advance spending? The review says we need a workforce of several hundred thousand more by 2030, half from the UK and half from abroad. That will require a change in science education in schools and higher pay for research at British universities, while from abroad it would require the Home Office to reverse the huge increase in visa and health charges that it intends to impose up front on researchers attracted to work in this country.
Viscount Camrose (Con)
Indeed. The noble Lord is right: we have identified that from the base now of roughly 1 million people in this country working in R&D, taking into account retirements, by 2027 we probably need another 380,000 R&D workers. Inevitably, a great many of those are going to need to come via the immigration route. A wide variety of visa programmes can meet that need. The Government take the view that the going-in position is that those benefiting from visas, rather than the taxpayer, should bear the immediate costs of visas and healthcare. However, that is always kept under review and, should evidence emerge that we are not getting either the quantity or the quality of integration applications, then we will take appropriate action.
Lord Patel (CB)
My Lords, there are two streams of funding that universities rely on: quality-related funding and charity research support funding. Both those funding streams are necessary for universities to develop infrastructure but both of them have been eroded over time. As charities have increased their funding for research, the amount of money available to support the universities has declined. Will the Minister commit to addressing those two issues and at least bringing funding up to inflationary levels?
Viscount Camrose (Con)
Yes, indeed. I am happy to look at that. I note that the Government currently contribute about 20% of R&D funding through UKR I and other sources, with non-profits accounting for around 3% of funding. As I say, the Government are committed to increasing by about one-third their R&D funding by the 2024-25 spending review, which should go some way towards addressing that gap. Meanwhile, I take on board the noble Lord’s comments.
Lord Leigh of Hurley (Con)
Does my noble friend the Minister agree that, in addition to government spend, R&D tax credits have risen to £7.3 billion from £6.6 billion last year, which is very welcome, but perhaps the figure could be higher if there were a campaign to explain to SMEs the availability of R&D tax credits?
Viscount Camrose (Con)
Yes, indeed. As I say, businesses fund about 60% of R&D in this country and conduct just over 70% of it. I certainly would keenly look into any ability to campaign to encourage more people to take advantage of the generous tax credits scheme.
Viscount Stansgate (Lab)
My Lords, when the review is published, will the Minister undertake to persuade the Leader of the House to arrange a debate in government time on it and all the issues related to it? Or, at the very least, can the Government arrange for a Statement to be made from the Dispatch Box so that Members in this Chamber can ask questions as a result of its publication?
Viscount Camrose (Con)
I thank the noble Lord for the suggestion. I will happily take that up with the Leader of the House and all the usual channels.
Baroness Wolf of Dulwich (CB)
My Lords, one very well-established principle for effective research is institutional autonomy and freedom of action. The Nurse review identified numerous places and occasions where, at present, government-funded research does not allow for such freedom of action. Can the Minister assure us that the response to the review will pay due attention to these principles, which the Government acknowledged in the very welcome establishment of ARIA?
Viscount Camrose (Con)
Yes, indeed: these are very important principles to allow research institutions, whether publicly or privately funded, autonomy in the research they undertake. As well as the Nurse review, the Tickell review into bureaucracy in the R&D landscape addresses these things and we will also shortly be publishing our response to the latter review.
Lord Watts (Lab)
My Lords, is there evidence that the successive cuts in business taxes have led to increases in investment and research in the UK?
Viscount Camrose (Con)
If there any such evidence, I am afraid I am not familiar with it.
Baroness Bennett of Manor Castle (GP)
My Lords, when talking about research, the Government often seem to be most excited by and focus on the kind of research that generates new profits and services. But very often research is into social innovation: for example, the subject of antimicrobial resistance. Looking for new drugs is something that we need to do, but social innovation and changes in medical practice can reduce the need to produce new drugs and protect the drugs we have now. Will the Minister perhaps look into seeing how we can focus more on that social innovation as well as the profit-making kinds of research?
Viscount Camrose (Con)
The science and technology framework sets out five priority areas for research and innovation and those areas are then pursued across a mix of public sector, private sector and other bodies, each with their own goals for the research they are conducting. Within that, there is certainly room for all manner of research as the noble Baroness suggests.
NHS: General Medical Practitioners
(5 months, 3 weeks ago)
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Lord Warner
To ask His Majesty’s Government what was the net change in the number of NHS general medical practitioners (GPs) in England, after taking account of resignations and additional recruits, in the past three years; and how much improvement in the retention of GPs they are planning to make as a result of the NHS Long Term Plan published on 30 June.
Lord Evans of Rainow (Con)
My Lords, as of September 2023 there are 2,025 more full-time equivalent doctors in general practice than in September 2020. We are working with NHS England to increase the general practice workforce. This includes measures to boost recruitment, address why doctors leave the profession and encourage them to return to practice. Last year, a record 4,000 doctors accepted a GP training place. The long-term workforce plan has committed to increasing this to 6,000 by 2031-32.
Lord Warner (CB)
I suppose I should thank the Minister for that rather optimistic reply, but is he aware that the number of patients has increased by 20% since 2015 while the number of GPs has actually declined? I can tell him that 464 GP partners were lost last year and that a quarter of GPs work only part-time. A recent survey by the Royal College of General Practitioners revealed that 57% of GPs are now saying they will not be in general practice in five years. Can the Minister explain how the new long-term workforce plan will get us anywhere near the number of 6,000 that he mentioned, when the plan expects a retention figure that will expand the number of GPs by only 700 by 2036-37?
Lord Warner (CB)
I am coming to the conclusion. Are we not in a situation where NHS England and the Department of Health and Social Care have failed and we need some new thinking to sort out the problems of GPs?
Lord Evans of Rainow (Con)
My Lords, I take this opportunity to congratulate the noble Lord on the work he did as a Labour Government Minister between 2003 and 2007. I am grateful for his question. We are incredibly grateful to GPs and their staff, whose hard work ensured that more than 32.6 million appointments were carried out until September 2023, more than two-thirds of which were face to face. On 30 June, NHS England published the NHS Long Term Workforce Plan. The plan sets out the steps that the NHS and its partners need to take to deliver the NHS workforce, including GPs, that meets the changing needs of the population over the next 15 years. We are working with NHS England to increase the general practice workforce in England. This includes measures to boost recruitment, to address the reasons why doctors leave the profession and to encourage them to return to practice. NHS England has made a number of retention schemes available to boost the general practice workforce.
Lord Kirkhope of Harrogate (Con)
My Lords, does my noble friend agree that it is also important to congratulate GPs and practices that are introducing innovations, such as weekend working, and their attention to the patients? They get an awful lot of attacks, but in my view they are in need of some congratulation as well.
Lord Evans of Rainow (Con)
I completely agree with my noble friend. The 2022 GP patient survey showed that 72% of patients reported a good overall experience at their GP practices. GP practices that innovate tend to get better results in customer patient satisfaction.
The Lord Bishop of St Albans
My Lords, how many doctors, including GPs, have come from outside the UK in the last year for which we have records? What long-term plan is there to stop us relying on having to bring in doctors from countries that need them far more than we do because they are much poorer than here in the UK?
Lord Evans of Rainow (Con)
The right reverend Prelate the Bishop of St Albans asks an important question but the recovery plan introduced new measures to support international medical students, who make up more than half of all doctors in GP training, so if we were to stop those students coming over we would be in real trouble ourselves. On his wider point he is absolutely right, but it is not just GPs and doctors; it is also healthcare professionals in social services and elsewhere.
Lord Hunt of Kings Heath (Lab)
My Lords, I declare an interest as a member of the GMC. On the increase in training places in medical schools, which is of course very welcome, does the Minister agree that this will not come off unless we increase the number of people training the GPs? Will he arrange for discussions between himself, the GMC, medical schools and NHS England to ensure that we get enough people to come in as trainers to enable even the modest workforce projections that are in the plan for medical schools to be put into action?
Lord Evans of Rainow (Con)
I absolutely agree with the noble Lord. If he is inviting me to do something with that, I will certainly take it back to the department based on his question.
Lord Allan of Hallam (LD)
My Lords, among the fastest-growing groups on the doctors register are so-called specialty and associate specialist doctors and locally employed doctors. These doctors are not currently able to work in primary care, although they are very skilled, and the long-term workforce plan says the Government will look into that. What progress have the Government made in talking to the relevant professional bodies about opening up general practice so that more sessions are available?
Lord Evans of Rainow (Con)
I do not have an answer in my pack to that specific question, but the noble Lord raises a very good point. It is very important that we bring more specialist skills into primary care, and GP practices are exactly the right place, but I will come back to the noble Lord on that specific point.
Lord Patel (CB)
My Lords, what assessment have the Government made of the number of general practitioners required to meet the needs of the population and for training purposes by the year 2030?
Lord Evans of Rainow (Con)
We are working with NHS England to increase the general practice workforce in England but, as the population grows, with the amount of building that goes on throughout the country, it is the responsibility of local authorities. There are two ways to do this: they can apply for capital funding for new GP practices; or they can apply through Section 106 agreements through local authorities. It is for the regions and for local authorities to plan ahead on that front.
Lord Naseby (Con)
Has not the time come for every new medical student to contract that they will, on qualification, work for perhaps five years in the NHS, similar to the existing contract for men and women in the Armed Forces who are medical practitioners, and perhaps modelled also on the Singapore scheme?
Lord Evans of Rainow (Con)
I am grateful to my noble friend. I am aware of the Armed Forces scheme—that if you train as a pilot, for example, you cannot leave the Royal Air Force to become an airline pilot. It is not the first time that this question has been asked, and I will feed it back to the department.
Baroness Merron (Lab)
My Lords, the Royal College of GPs reports that 40% of its members consider their premises not fit for purpose, something that is not addressed by the workforce plan. As the £10.2 billion backlog in maintenance continues to worsen as capital budgets continue to be raided for day-to-day spending, what strategy do the Government have to ensure that patients can receive care in modern, safe and properly maintained buildings, particularly where an increase in GPs and primary care staff teams is being promised?
Lord Evans of Rainow (Con)
The noble Baroness is absolutely right. GP practices’ premises vary throughout the country but, as I said earlier, there is capital funding available for new practices. From my own experience, when GP practices merge it gives an opportunity for them to have a purpose-built building. When I was a Member of Parliament there was a very good example of that where four GP practices throughout the constituency came together to form an outstanding modern GP practice with a new GP practice building.
Lord Stirrup (CB)
My Lords, it is clear that allowing doctors to spend more time with their patients would permit more searching diagnoses, leading to fewer unnecessary referrals and helping to take some of the pressure off secondary care waiting lists. What allowance has been made for this in the calculation of the total GP requirement?
Lord Evans of Rainow (Con)
The noble and gallant Lord raises a very important point. The delivery plan for recovering access is backed by a major investment in primary care services, up to £645 million over two years, to expand services such as community pharmacies. Getting more people to use community pharmacies and other such facilities enables GPs to focus on exactly what the noble and gallant Lord is talking about: those people who need to have diagnoses and very quick scans in hospitals.
Lord Sikka (Lab)
My Lords, England has 7.8 GPs per 10,000 of population, compared with the OECD average of 10.8. That is a gap of 16,700 GPs. Can the Minister explain how England has fallen so far behind other OECD countries and what the human consequences of this are?
Lord Evans of Rainow (Con)
The Government are working hard to make sure that we recruit more GPs. Last year we saw the highest ever number of doctors accepting a place on GP training—more than 4,000 trainees, up from 2,600 in 2014. The number of places available will grow to 6,000 by 2031-32.
Abortion Clinics: Safe Access Zones
(5 months, 3 weeks ago)
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Baroness Deech
To ask His Majesty’s Government what progress they have made towards the implementation of safe access zones around abortion clinics as legislated for in section 9 of the Public Order Act 2023.
The Parliamentary Under-Secretary of State, Home Office (Lord Sharpe of Epsom) (Con)
My Lords, the Government will issue non-statutory guidance to ensure that law enforcement agencies have a clear and consistent understanding around enforcement, and that abortion service providers and protesters are clear as to what is expected under the new law. The Government will launch a public consultation on the contents of the guidance at the earliest possible opportunity, and following consultation we anticipate commencing Section 9 in the spring of 2024.
Baroness Deech (CB)
My Lords, there is a great deal of foot-dragging in this. Both Houses supported the Public Order Act six months ago, which was to protect women accessing legal healthcare for their necessary rights. Yet in these months the most cruel demonstrations are going on outside clinics—for example, people wearing bodycams and holding out posters saying that babies are being murdered there. I do not see that a consultation is necessary; I urge the Minister not to delay the will of Parliament any longer but to get on with it and protect women from these very cruel demonstrations.
Lord Sharpe of Epsom (Con)
My Lords, I quite agree with the noble Baroness—it is totally unacceptable for anybody to be harassed or intimidated simply for exercising their legal right to abortion services. Personally, I find that very depressing to see. However, in terms of the public consultation, this is new legislation on an emotive topic, and there are strong views on all sides of the debate. Determining the appropriate balance will not always be straightforward. Therefore, to make sure that the legislation can be implemented effectively—that is the point—the Government have decided to launch a public consultation on the non-statutory guidance for safe access zones.
Baroness Thornton (Lab)
My Lords, we need to take account of the fact that the previous Home Secretary voted against safe access zones and has a history of opposing abortion rights. The noble Lord needs to give us an example of where—when the will of Parliament is so clear, as it is in this case—it has been necessary to have this kind of public consultation. We are very familiar with pre-legislative scrutiny and consultation in this House, but why are we seeing months-long delays? Can the noble Lord please give us a timeline?
Lord Sharpe of Epsom (Con)
I say to the noble Baroness that I already have: it will be commenced by the spring of 2024, and I am very happy to commit to making sure that that happens. The guidance is not straightforward because of the broad nature of the prohibited behaviours. For example, it is a criminal offence to intentionally or recklessly influence, which means that members of the public, the police and prosecutors will benefit from being aware of what could be criminalised within the zones. I totally take the noble Baroness’s point: I want to see this happen as soon as possible too.
Viscount Hailsham (Con)
Does my noble friend agree that these women will be in a very fragile state of mind, and it is highly undesirable that they should be subjected to coercive behaviour by the opponents of abortion?
Baroness Barker (LD)
Can the Minister confirm whether the Home Office plans to be in touch with local councils, abortion care providers and the police in coming weeks to discuss how these zones are best implemented?
Lord Sharpe of Epsom (Con)
As I say, there will be a public consultation, and I hope that all those whom the noble Baroness mentioned will engage with the consultation process.
Lord Carlile of Berriew (CB)
Will the noble Lord guarantee that Section 9 will be in force and implemented before the next general election?
Lord Sharpe of Epsom (Con)
That would invite me to speculate as to when the next general election might be.
Baroness Finn (Con)
Can my noble friend tell the House what advice will be given to police in the interim period to deal with those causing harassment and intimidation at the gates of abortion clinics?
Lord Sharpe of Epsom (Con)
My noble friend will be aware that a number of powers already exist, particularly around public space protection orders, which have been issued in a number of cases. Some guidance is already being deployed to local authorities, which have the powers to impose those public space protection orders where harmful behaviours are having, or are likely to have, a detrimental effect on the quality of life of those in the locality. There is plenty that the police can do already, but, as I say, the commencement will be by spring 2024.
Lord Anderson of Swansea (Lab)
My Lords, when will the consultation period end?
Lord Sharpe of Epsom (Con)
I am afraid that it has not started yet; it will start imminently—and I mean imminently. The draft is ready; it is just a question of bureaucratic dotting of “i”s and crossing of “t”s. As soon as that is done, I will come back to the House to update your Lordships on the precise timelines of the consultation.
Lord Hogan-Howe (CB)
My Lords, I am assured by the Minister’s own commitment to this legislation; he has made a clear statement. However, the concern that I have—having argued and voted for this legislation—is that the victims are still worried. They are already terrified sometimes when having this treatment and are further intimidated by some of the protests. Does the Minister agree that the consultation, important as it is, should not take so long? It is not very complex to implement; we have implemented greater criminal changes far more quickly.
Lord Sharpe of Epsom (Con)
First, I associate myself with the noble Lord’s remarks about the victims; I completely agree with everything that he said on that subject. I have tried to explain why the consultation will take the time that it will. I would like it to be concluded as speedily as possible, and I promise to come back to the House and update on that timeline.
Baroness Burt of Solihull (LD)
My Lords, anti-abortion protesters and groups were spreading their misinformation and distressing images when I was at university, which is more years ago than I care to admit. Their horrific images stay with me to this day. They are still trying to intimidate women outside abortion clinics all these years later—so what is there to consult on? Does the Minister agree that the Government should stop the intimidation and the additional suffering that those women are going through once and for all?
Lord Sharpe of Epsom (Con)
I agree, but I also say that the protesters should stop their intimidation now and leave those women well alone, as the noble Baroness suggests. I have tried to explain the context of the consultation and the reasons for it. There is nothing more to say on that at the moment.
Lord Cormack (Con)
My Lords, although no one could defend intimidation or harassment, there are those who quietly pray. This came up when we debated the subject earlier in the year, and considerable concern was expressed in a number of quarters of the House. Can my noble friend assure me that the consultation that will follow will take account of those who merely stand quietly and pray silently?
Lord Sharpe of Epsom (Con)
My noble friend should probably consult some of the providers to find out the precise types of behaviour happening outside their clinics. Plenty of examples are available online. The most recent I saw was on 4 November from BPAS. However, training will have to reflect Article 9 of the ECHR; as the House knows, that is around the freedom of expression and manifestation of religion and belief. I also say that those rights are heavily qualified.
Baroness Fox of Buckley (Non-Afl)
My Lords, having spent many an hour debating the clause, I think it requires careful consideration. I want to talk about context. First, people have been arrested for praying outside abortion clinics. However wacky we might consider it, that is a free-speech matter. Secondly, as the police do not seem to be able to know what intimidation is—whether outside a Labour MP’s office or on the streets in terms of anti-Semitism—I hope the consultation will be as helpful as possible so that they arrest the right people and do not end up policing easy targets instead.
Lord Sharpe of Epsom (Con)
The noble Baroness invites me to speculate on operational policing. As we discussed many times from this Dispatch Box recently, I cannot and will not do that. What I can say is that, in my understanding, some of the context around previous arrests is that they are more to do with breach of PSPOs than with the behaviour that she describes. In that case, I think it was repeated breach of a PSPO, so I am not sure that she is completely correct in her assertion, but I take her point.
Lord Pannick (CB)
My Lords, the Minister spoke earlier about the need for the guidance to address an appropriate balance. He spoke a few moments ago about the relevance of freedom of religion and freedom of expression. Was not the whole point of the parliamentary debates earlier this year to specify in legislation where the balance lay? Surely it is therefore time to get on with implementing it.
Lord Sharpe of Epsom (Con)
Again, I have tried to explain the context. I do not think those two things are entirely mutually exclusive. The fact is that some of the language in the law is relatively unusual. Therefore, the consultation is necessary to make sure that people are aware of what it is.
Lord Watts (Lab)
Does the Minister agree that people who wish to pray can do that at home or in church? They do not have to do it outside an abortion clinic. Does he further agree that plenty of people around the world have found solutions to this problem? Why do we not implement the same legislation that other countries have to protect these women?
Lord Sharpe of Epsom (Con)
We have legislation which we are discussing now, and I am not going to go against the will of Parliament and suggest alternative forms of legislation. The noble Lord is quite right: people are perfectly at liberty to pray wherever they wish. Intimidating behaviour, however, crosses the line.
Children’s Care Homes: Reform
(5 months, 3 weeks ago)
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Lord Bach
To ask His Majesty’s Government what plans they have to reform the system of children’s care homes.
The Parliamentary Under-Secretary of State, Department for Education (Baroness Barran) (Con)
My Lords, we want all looked-after children to live in stable, loving homes where they are safe and cared for. We are taking forward the commitments already made to improve the quality and consistency of safeguards across residential settings through new standards of care; to develop a new financial oversight regime for the market; to increase provision; and to take steps to ensure a stable and skilled children’s home workforce.
Lord Bach (Lab)
My Lords, I thank the Minister for her Answer. What is obvious, I am afraid, is how desperately unambitious the Government have been in reforming a broken system. In spite of the commitment of all who work in this area, it is a system that adversely affects the life chances of the most vulnerable children in our society. Is the Minister aware, as reported in the Observer on 8 October, that the 20 largest private operators of children’s homes, 10 of which have private equity or sovereign fund ownership, made a £300 million profit—I repeat: £300 million—last year, at the same time as local authority spending was being squeezed? Does the Minister agree that this is just plain wrong? What urgent steps will the Government take to stop so obvious an outrage happening again this year?
Baroness Barran (Con)
I do not accept the noble Lord’s assertion that the Government’s plans are unambitious, but I do recognise some of the concerns he raises about profiteering, which, as he knows, we would distinguish from being profitable. We are particularly concerned about those larger providers which have complex and sometimes very opaque ownership structures. That is why we want to bring much greater transparency to the market.
Baroness McIntosh of Pickering (Con)
My Lords, will my noble friend look very favourably on the work done by local authorities for looked-after children? Will she ensure that in the Autumn Statement sufficient resources are available for the excellent work they do? Have the Government ever looked at the possibility of extending looked-after care beyond 18?
Baroness Barran (Con)
The noble Baroness will be aware that in some cases there is a duty of care up to age 25 for children who have certain special educational needs and disabilities. I share my noble friend’s gratitude for local authorities and the work they do in this area.
Lord Laming (CB)
My Lords, the Minister understands that many local authorities rushed into outsourcing these services. They then quickly discovered that not only were they facing increased demands, but the new providers could set their fees wherever they wanted and could select whichever young people they wanted. One of the terrible results of this is that young people are being placed in hugely distant parts of the United Kingdom and are losing contact with their extended family, their schools and their friends. Would the Minister consider setting up a review of the current situation in residential childcare so that we can do better for the most vulnerable young people?
Baroness Barran (Con)
I absolutely accept that far too many children who are in children’s homes—around two-thirds last year—were placed outside their local authority area. Obviously, I enormously respect the noble Lord’s expertise in this area. I hope he would agree with me that we have done a lot of reviewing. We are doing a lot of consulting, and we are very focused on growing the response from foster carers and increasing that part of the market, particularly in relation to kinship care, which I think the House believes may be the best solution for many of these children.
Lord Addington (LD)
My Lords, in understanding that certain of these firms that are running children’s homes are making an excessive profit, would it not be a good idea if we addressed one of the accepted problems with the childcare system: the transition to adult life? If services were required to give active support to these individuals, we might have fewer problems carrying on, and we would make sure that this transition to being an independent person is easier. There is the money there because there is an excessive profit. Surely it should be used for this.
Baroness Barran (Con)
To be fair, we need to be careful not to generalise too much. We have had some egregious examples, of which the most notable recently was the Hesley Group, with terrible abuses happening in children’s homes. We also have some very high-quality providers which are focused on many things, including the transition to which the noble Lord refers.
Baroness Wilcox of Newport (Lab)
Local authority budgets are absolutely squeezed; profiteering is eye-watering; there are reports of horrendous abuse; and vulnerable children are being sent half way across the UK. What will the Government do to end the profiteering and ensure that children in care receive the best the system can offer?
Baroness Barran (Con)
I have already talked about the change to the financial oversight that we want to bring in the children’s social care market. The noble Baroness will also be aware that we are introducing a regional model for providing homes for children and we are working with partners both within the sector and in health and justice to co-design this. We will be piloting two regional care co-operatives, which we hope will rebalance that power dynamic between the providers and the local authorities.
Lord Balfe (Con)
For those who were fortunate enough to grow up in a Sheffield City Council children’s home at a time when councils had children’s departments, the input of private equity into this sector is totally wrong. It sends all the wrong messages, and it also prevents integrated care between a local authority and the homes that are provided. All of this about loving care is, frankly, nonsense. What are needed are decent homes, and the realisation that some children actually like living in a children’s home, as I did, because it provided security and a good environment. Can we look at chasing private equity out of the system?
Baroness Barran (Con)
I thank my noble friend and have great respect for him sharing his own experience from Sheffield. The reality of our situation today is that just over 80% of children’s home places are provided by the private sector, so we need to make sure that the sector is resilient. We are working on this in a number of ways, including increasing funding and provision, and reform, before we chase people out in a way that could destabilise provision.
Lord Hannay of Chiswick (CB)
My Lords, would the Minister accept thanks for having mentioned kinship care, which is a very important part of dealing with this problem? Could she also tell us when the Government’s kinship care strategy, which has been trailed umpteen times, is actually going to see the light of day?
Baroness Barran (Con)
We are going to publish the long-awaited kinship care strategy by the end of this year, which will set out our national direction. Over the next two years, we will establish a new kinship carer training offer, with an investment of over £45 million to begin implementing practical and financial support packages, so that children can stay safely within a kinship group.
Lord Sahota (Lab)
My Lords, for many years, I served on a fostering panel in my local authority. Research shows that, for various reasons, children in care homes have a higher rate of mental health problems. We always put that down to the shortage of funds in local authorities; does the Minister agree? For the last 10 years or so, local authorities have experienced something like 50% cuts to their funding.
Baroness Barran (Con)
I do not agree with that. While I agree that children in care homes potentially have more severe mental health issues, I think that, typically, children who go into a care home have also experienced severe neglect and abuse, and have more complex needs than those who are fostered.
Baroness Butler-Sloss (CB)
My Lords, what efforts are the Government making to support a lot more foster carers?
Baroness Barran (Con)
The Government are making a great deal of effort in this area. We are investing over £27 million, in this spending review period, in a foster care recruitment and retention programme. That will start in the north-east, with £3 million for a pathfinder hub; the additional £24 million will be for a wider rollout.
Conversion Therapy Prohibition (Sexual Orientation and Gender Identity) Bill [HL]
Monday 20th November 2023
(5 months, 3 weeks ago)
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Succession to Peerages and Baronetcies Bill [HL]
Monday 20th November 2023
(5 months, 3 weeks ago)
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Lord Northbrook (Con)
My Lords, I declare my interest as having a daughter who would become eligible to succeed to my peerage.
Illegal Immigration
(5 months, 3 weeks ago)
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Lord Coaker (Lab)
My Lords, does not the Rwanda judgment made by the Supreme Court make damning reading for the Government? Does it not expose once again the complete failure of the Prime Minister to get a grip, even at the most basic level, on the boats and asylum crisis?
The previous Home Secretary, appointed by this Prime Minister and then sacked, said to him:
“If we lose in the supreme court, … you will have wasted a year … only to arrive back at square one … your magical thinking … has meant you have failed to prepare any sort of credible plan B”.
Those are the words of one who was Home Secretary until only a week ago. The noble Lord, Lord Murray, who is also now not in post, was repeatedly told of problems with the Rwanda scheme as he drove the then Illegal Migration Bill through this House. Does the Minister agree that the former Minister was wrong to ignore the warnings that this House repeatedly made? These warnings were contained in the Supreme Court judgment, which outlined a number of problems with the policy. Ministers were warned about the failings in the Rwanda asylum system, so why did they just press on? They were told repeatedly of the failings of the Israel-Rwanda deal, so why did they just press on again?
The Government say that they will introduce a new treaty to deal with all of this, but why only now? Why has so much time been wasted, when these problems were known about? Can the Minister explain how the Rwanda policy, if implemented, can actually work? Since the Act came into force—since the 20 July date that the noble Lord, Lord Carlile, brought forward in an amendment in Committee—approximately 13,000 people have arrived illegally. According to the Act, they are deemed illegal and therefore need to be sent abroad. How are they to be sent to Rwanda? Are they all expected to go to Rwanda, or are the reports we read in today’s media accurate that the Government are considering giving thousands of people deemed to be here illegally, in light of the Supreme Court judgment and since the passage of the Act, access to the asylum system? Is not the truth of the matter that thousands upon thousands of people deemed illegal are being held here indefinitely, with families often traumatised, and women and children in limbo? What sort of policy is that?
The Government are bringing forward new legislation, which we will consider fully and to which we will give proper consideration in such an important area in your Lordships’ House. But what do we learn? We learned today that the Government are split on what this should be. Is it the case that the current Immigration Minister is pushing for this new legislation to disapply the Human Rights Act and ignore the ECHR, even though the Supreme Court, in its judgment, said that the ECHR had nothing to do with it? Does the Minister—and indeed the Home Secretary—therefore agree with the Immigration Minister, or with those who say that this hard-line approach, as proposed by his colleague, the current Immigration Minister, is actually mad? Does he agree with the Home Secretary, who in private—as reported in the newspapers—also confirmed, in colourful language, that he regarded the policy as to be less than satisfactory?
What of the plan in the new legislation to simply declare Rwanda a safe country in its upgrade to change it from an agreement to a treaty? Again, the latter is something that many in your Lordships’ House have said should actually have happened. How long will it take? What do the Government say to Lord Sumption’s criticism that you cannot
“change the facts, by law”
by proposing legislation that would, as I say, declare Rwanda safe? How would that work? As the former Supreme Court judge said, you cannot say that black is white.
Would it not have been a much better thing—rather than the wasting of time that we have seen from the Government, with over £140 million spent without a single person sent to Rwanda—to have had a proper plan to tackle the criminal gangs? That is something that I moved in Committee, only to see it rejected, and then to see the Prime Minister announce the same policy two weeks after the passing of the Act. Would it not also have been a good idea to improve our agreement with France, to speed up asylum decisions, to establish safe and legal routes and to tackle the problem at source? We have this chaos: a Government who are divided, no clarity on the new legislation to come, Ministers sacked, briefings and counter-briefings, and some even saying at the highest level in our governing party that we should just ignore the law, which is simply outrageous.
We all know that there have to be effective border controls and that illegal immigration needs to be tackled, but to do so the Government must get a grip for the sake of our international reputation. They must deliver the effective humane immigration system that this country deserves, and not the chaos that we have now. It is simply not good enough and the Government need to get a grip.
Lord German (LD)
My Lords, this Statement is welcome; of course, we could have had it last week, but that was not to be the case. However, that has allowed us the whole weekend to understand slightly more the Government’s intentions—at least some of the Government’s intentions, some of which are being challenged. It means that we have to examine this Statement very carefully. The Statement says that the Government of course “respect the Supreme Court”, but we are being asked to suspend belief—to convert black into white on the say-so of the Government.
Are the Government intending to implement legislation that simply allows them to make an opposing declaration to that of the Supreme Court on the safety of Rwanda for refugees? To what extent is that respecting the Supreme Court’s decision? Do the Government agree with the Supreme Court that, in order to see their Rwanda policy in operation, they would need to disregard the ECHR and the United Nations system of international treaties, including the refugee convention, the United Nations convention against torture, and the International Covenant on Civil and Political Rights, and also change not just the Human Rights Act but also domestic asylum legislation from 1993 and 2002?
Further, the Supreme Court judgment states about the Rwanda system that
“necessary changes may not be straightforward, as they require an appreciation that the current approach is inadequate, a change of attitudes, and effective training and monitoring”.
Therefore, in the past 12 months, have the UK Government provided any effective training to Rwandan officials?
Thirdly, this Statement says that arrivals are down, decisions are up, returns are up—we are getting on with the job. Believe that if you wish. Small boat arrivals are down on last year, but if you remove Albanians—clearly, we must accept the policy that returns those who are not genuine asylum seekers to their safe home country—total numbers are up from 2022. Going by the recent annual grant rates, 75% of those who crossed this year would be granted asylum. Of course, because clauses of the Illegal Migration Act have not yet been brought into force, the Government will have to hear this backlog of cases. The current backlog of cases is 122,585, taking legacy and flow numbers together. In addition, government figures show that small boat arrivals represent only 37% of people claiming asylum, up to June 2023.
What actions are being taken to ensure that those from high grant rate countries have a safe way to travel to the United Kingdom to claim asylum: for example, an Iranian female political protester, a Russian anti-war activist, a young man at risk of forced conscription from Eritrea, and so on?
Finally, I note that the Statement says:
“we are not going to put forward proposals simply to manufacture an unnecessary row”
for short-term political gain. Good luck with getting people to agree to that.
The Parliamentary Under-Secretary of State, Home Office (Lord Sharpe of Epsom) (Con)
My Lords, it goes without saying that Wednesday’s outcome was not what the Government wanted to see, but we have spent the last few months planning for all eventualities and we remain completely committed to stopping the boats.
The core part of our policy—to relocate those who entered illegally and have no right to be here to another country—remains lawful. We have also made progress on other fronts of our plan to tackle the small boats—which I will come back to in a minute—but crossings are down, the backlog is being cut, and it is interesting to note that countries across Europe have seen what we are doing and are interested in following suit.
The Supreme Court recognised that changes may be delivered in future which would address the issues it raised. The Prime Minister has spoken to President Kagame of Rwanda and both countries reaffirmed their unwavering commitment to deliver on our landmark partnership. We will work with Rwanda to address the Supreme Court’s concerns by setting out strong assurances in a new treaty binding in international law. However, we are also going a step further. As has been noted, the Prime Minister has announced that we will take the extraordinary step of introducing emergency legislation to enable Parliament to confirm that, with our new treaty, Rwanda is safe.
As to the questions from the noble Lord, Lord Coaker, on the various newspaper-based speculation about what people, including the new Home Secretary, may have said, I will not speculate but I note that he did not recognise the phrase that I think the noble Lord, Lord Coaker, described as colourful, and therefore I wish to take him at his word. What the current Immigration Minister thinks on this, I do not know.
When people know that if they come here illegally, they will not get to stay, they will stop coming altogether and we will stop the boats. Illegal immigration destroys lives and costs British taxpayers billions of pounds a year. We need to end it, so we will do whatever it takes.
However, as the new Home Secretary has pointed out, the Rwanda plan has only ever been one tool in our toolbox, and we have other schemes to drive down these numbers. We are tackling illegal immigration at every stage of the journey of a would-be illegal migrant, and our plan is working. Last year, the Prime Minister signed the largest ever small boats deal with France—I believe that 22,000 crossing attempts have been prevented because of the close co-ordination between British and French officials, and that is in 2023 alone.
Cutting-edge surveillance technology is in play, and we have beefed up security infrastructure, such as more CCTV at key border crossing points along the channel. We have ensured that there are more French officials and officers patrolling French beaches, and, as I said, they are working closely with their UK counterparts. So that is less money that British taxpayers have to spend on hotels, less profit for the criminal gangs and fewer people to process—fewer people also, I should add, putting their lives at risk. That sends a clear message to those who want to cross that we will stop them.
The noble Lord referred to the fact that we now have a returns agreement with Albania, and seemed rather dismissive of it, but the fact is that so far during 2023 we have returned more than 4,600 people in just 10 months. He should be applauding that. We are targeting the movement of goods, such as dinghies and engines, that are used to facilitate the crossings in order to undermine a key component of the smugglers’ business model. Apart from Albania, we have expedited returns arrangements with countries including France, Turkey and Italy. We have increased the number of illegal-working raids by almost 70%. We have cut the asylum legacy backlog by more than 59,000 cases. We have freed up hundreds of hotel beds with the use of alternative sites. We have announced the closure of the first 50 asylum hotels and we have passed the Illegal Migration Act 2023, which is the most ambitious immigration legislation in decades. It makes it clear that the only route to asylum in the UK is via one of the safe and legal routes that are in place.
Noble Lords asked about treaties and why this was not considered at the start. The fact is that a memorandum of understanding is a common mechanism for establishing an arrangement or partnership between countries. The Supreme Court was clear that Rwanda entered into the partnership and signed the MoU in good faith, and both countries remain committed to the partnership. We always knew that the partnership would face challenges, but we have been clear that we will do whatever it takes to deliver it.
On the Supreme Court’s decision and conclusion, the Prime Minister has said that we respect the Supreme Court’s decision. The rule of law is fundamental to our democracy, but it is also of fundamental importance that we stop the boats. I have of course taken note of the comments of Lord Sumption, but at the moment the only fact that is changing is that that MoU is being, shall we say, converted into a treaty. I do not know the details of that piece of legislation, but I have little doubt that we will be discussing it all at considerable length.
Something else that the Supreme Court said which I think is worth pointing out is that
“changes and capacity-building needed to eliminate the risk”—
it was talking, of course, of refoulement—
“may be delivered in future, but they were not shown to be in place when the lawfulness of the policy had to be considered in these proceedings”.
I make the point that the lawfulness of the policy that needed to be tested dated back to June 2022, more than a year ago. So, in answer to the noble Lord, Coaker, about what we have done since, the answer is that we have taken considerable measures since the Court of Appeal’s judgment in terms of getting skills and people into Rwanda to help them with their processes.
The noble Lord asked me about commencing parts of the Illegal Migration Act. We are moving ahead with operationalising other measures in the Illegal Migration Act, which will make it easier to remove people with no right to be here—for example, those who have travelled from fundamentally safe countries. On the cohort to which he referred who arrived under the new terms, I believe that they are still expected to be returned to Rwanda, but, obviously, at some point that will be tested in this House and the other House, so, as yet, there is no point in speculating as to how that might happen.
The ECHR has also come up. It is clear that this was a judgment from our domestic courts, not the ECHR. We always said that our plan will deliver the changes necessary to take away the incentive for people to risk their lives through illegal crossings, while complying with our international obligations. But, as the Prime Minister said, if people continue to put obstacles in the way of this policy, we will remove those barriers. As I said, we have already started the process on the treaty to address the Supreme Court’s concerns. The Prime Minister’s announcement of emergency legislation was clear, but I do not know what the content of that legislation will be.
Lastly, I pay tribute to my noble friend Lord Murray of Blidworth for his hard work, professionalism and absolute dedication to stopping the boats. He is a friend, he was an excellent colleague and I am going to miss him.
Lord Carlile of Berriew (CB)
My Lords, first, I too praise the noble Lord, Lord Murray of Blidworth, at least for his determination with this Bill and the courtesy that he showed to the whole House at all times. However, why do the Minister and the Government not see that the proposal of a treaty with Rwanda would produce a document that would be yet another historically worthless piece of paper? Rwanda, on the facts and merits, has been found to be unsafe and, once somebody was sent to Rwanda, there would be no realistic possibility of enforcing their rights, whatever they were, through the Rwandan courts.
Secondly, does the Minister not agree that the ignominious squabbling among senior and former members of the Government is demeaning a serious subject on which we all have merited concerns, apart from a few who seem to regard it as trivial? Is it not now time for the Government to set about a doubled programme which would produce value, in cost terms, of dealing with the people in the backlog, wherever they are, as quickly as possible, by increasing the number of officials and putting the relevant courts and tribunals around the country so that they can deal with these cases on a day-by-day basis? Does he not agree that most of these cases could be dealt with within a few days if they were properly managed?
Finally, does the Minister agree that the Government should put all people who are de facto refugees back into the refugee system so that they can be dealt with according to the law and not by some artificial construct?
Lord Sharpe of Epsom (Con)
The noble Lord has asked me a number of questions. There is another one in there inviting me to speculate about something. Again, I will not do that. I do not know what will be going into the treaty or how it will look, so there is very little point in me commenting on that.
I do not regard the subject as trivial. It is of fundamental importance to the country and to Parliament. I respect the fact that we can debate it and look forward to many more debates on it. As regards the arguments that are allegedly going on behind the scenes, I am afraid I have not seen any evidence of that. How they are being leaked and whether they are happening, I do not know—but of course passions do run high on this subject.
The noble Lord asked another question. I have totally forgotten what it is, but I am sure that somebody else will remind me and I can then answer it.
Lord Sharpe of Epsom (Con)
I cannot comment on that at the moment, but, again, I am sure we will come back to it in due course.
Viscount Hailsham (Con)
Does my noble friend agree that whether Rwanda is or is not a safe country is a matter of fact and that to displace such a finding of fact by the Supreme Court using a statute is very hard to reconcile with the rule of law? Perhaps I may make this suggestion. If we must have this Bill, we could have a delayed implementation date, to be triggered only by an affirmative resolution of both Houses of Parliament, with that debate to be preceded by a report of a Joint Committee of both Houses advising on whether Rwanda is a safe country.
Lord Sharpe of Epsom (Con)
My Lords, I agree with my noble friend, regarding the Supreme Court’s decision, that as of 14 June 2022 it did indeed regard it as a fact that there was a risk of refoulement. However, that is a fairly narrow interpretation of the rest of the system that is currently set up in Rwanda. Again, I will not speculate on how things may change. I also note that the Supreme Court specifically acknowledged that there were cases where it could see the situation changing in the fullness of time. I expect that this is the area we are looking to explore.
As regards my noble friend’s suggestion of an affirmative SI, I am happy to take that back and enter that into the conversation that is taking place.
Baroness Chakrabarti (Lab)
My Lords, it is of course quite right that when the facts change or, to put it better, are emphatically revealed by the Supreme Court, wise people change their minds. They do not attempt to legislate to change the facts. Will the Minister acknowledge that, contrary to various statements that have been made in this House by Benches opposite, the Supreme Court acknowledged the special role and expertise of the United Nations High Commissioner for Refugees in evaluating the facts—that is, the safety of countries?
As for treaties, does the Minister agree that, whatever new treaty comes, there is a treaty in this area. It is a very well-established treaty called the refugee convention. It is so well established that aspects of it are arguably now part of customary international law. I know that the Minister cares about the rule of law. If the Government are going to disapply or abrogate the European Convention on Human Rights, will he encourage his colleagues to counsel what effects there might be on the behaviour of the Russian Federation and others—and those currently in jeopardy, including Ukrainian prisoners who are relying on interim orders for their lives and protection from the Strasbourg court?
Lord Sharpe of Epsom (Con)
Of course, I agree with the noble Baroness. The Supreme Court did acknowledge that the UN has a role to play in this; indeed, it was heavily referenced in the Supreme Court’s judgment. I also accept that a treaty already exists regarding refugees; that is incontestable. As regards what might happen regarding the ECHR, I have already said that that was not part of any of the discussions around this particular decision. This was a domestic court’s decision. I think it is a few steps away to discuss the ECHR, and the noble Baroness is well aware of my views on the subject.
The Lord Bishop of St Albans
My Lords, we on these Benches are quite clear that we cannot have open borders, that we must stop people risking their lives, and that we need to stop the people smugglers. But we are also clear that we cannot export our moral responsibilities towards those seeking sanctuary on to the shores of another country, be it Rwanda or anywhere else. This is such a long-term, complex, worldwide problem that we need a long-term strategy for tackling this refugee crisis, in concert with our global partners, so while the Government are proposing some immediate new laws, what are they doing to address the scale of the problem, to provide long-term certainty? Will the Minister commit to developing and publishing a long-term strategy so that we can all try to engage with this in a much more measured way?
Lord Sharpe of Epsom (Con)
I thank the right reverend Prelate for those comments. I agree with his point that it is obviously also morally wrong for criminal gangs to profit from this evil trade, and to ship people across the Channel at incredible risk to themselves. In fact, I think we are very close to the anniversary of that particularly unpleasant tragedy that happened in the Channel last year. As regards this problem of illegal migration becoming long-term, the right reverend Prelate is of course right. There are many drivers of this, and it therefore seems likely to me that the world will have to get together to address the various things that are driving these movements of people—what makes people so desperate to leave their homes—and try to do something about it. So far, it seems to have eluded the world, but I sincerely hope the right reverend Prelate is right, and that we can do something about it sooner rather than later.
Baroness Ludford (LD)
My Lords, I am not sure that the Minister fully answered the questions of the noble Lord, Lord Carlile, and the noble Viscount, Lord Hailsham. Will he now explain how a treaty or indeed legislation declaring Rwanda safe will solve the problem, given that the Supreme Court said that it was not the lack of
“good faith of the government of Rwanda”
that was the problem, but
“its practical ability to fulfil its assurances … in the light of the present deficiencies of the Rwandan asylum system”?
Presumably, they can make whatever binding commitments they like in a treaty, but the issue is the practical ability to deliver. Also, given that the Home Secretary says that the Government take their
“obligations to the courts very seriously”,
how can they change the law to “do whatever it takes”? What does “whatever it takes” actually mean?
Lord Sharpe of Epsom (Con)
I would not try to explain that. I do not know what will be in the new legislation. I do not know how it is worded; I do not know what the intention is for it, so I cannot answer any of those questions, for obvious reasons. I do not know whether it will solve the problem; I sincerely hope it does, for obvious reasons. One thing I would expect to be in a treaty—I am just speculating—is that it will be enforceable in some way. Whether that is through the Rwandan courts or through other international means, I really do not know. But we are going some way to try to address the Supreme Court’s concerns.
Lord Cormack (Con)
My Lords, does my noble friend accept that we need a solution that is accepted across the political parties, particularly as there will be a general election within the next 14 months? Is there not an overriding case for saying that if ever a Bill needed pre-legislative scrutiny by a Committee of both Houses, it is this Bill?
Lord Sharpe of Epsom (Con)
The noble Lord probably makes a good point, but my understanding from reading the likely timetable is that parliamentary time would not allow.
Lord Hannay of Chiswick (CB)
My Lords, does the Minister recognise that his noble colleague told me several times—times beyond count, really—that I was totally wrong when I said that the Government’s attempts to send people to Rwanda were contrary to the refugee convention? So will he be very kind and tell me that now it has been upheld unanimously by the Supreme Court that view was correct? He will know that the Prime Minister has described the European Court of Human Rights as a foreign court. Does the Prime Minister regard the International Court of Justice, whose compulsory jurisdiction we accept and on which court we have no judge, as a foreign court?
Lord Sharpe of Epsom (Con)
I was not present in the debate when the noble Lord said he was right, so I am not going to say whether or not my noble friend was right because I do not know what he said. As regards the Prime Minister’s views on the International Court of Justice, I am afraid I do not know as I have not asked him.
Lord Dubs (Lab)
My Lords, the Minister more or less said that the Government had no intention of leaving the European Convention on Human Rights—he is shaking his head. In which case, are the Government aware that if they tamper with the ECHR, they are also tampering with the Good Friday agreement, which is linked to it? Is the Minister furthermore aware that there is still the Human Rights Act that the Government are talking about getting rid of? There is the 1951 refugee convention. There is the convention against torture and the International Covenant on Civil and Political Rights. There is a range of conventions, treaties and agreements. Are the Government saying that they are all liable to be changed as a result of the Supreme Court decision?
Lord Sharpe of Epsom (Con)
I did not say what the noble Lord asserts about the ECHR. I said that I do not know. The fact is that this decision was a domestic decision, not a European one. I am well aware that the ECHR is a cornerstone of the Good Friday agreement, and of course we recognise the significance of that. However, I reiterate that the Prime Minister has committed to stopping the boats and to removing barriers if necessary. The detail and any implications of doing so would obviously be carefully considered at the time.
Lord Hamilton of Epsom (Con)
Has my noble friend had any luck in securing the conviction of so-called human rights lawyers who tell illegal migrants to throw away their passport and pretend that they come from a war zone when they do not or tell them to say that they are subject to child trafficking or modern slavery? Surely these people should be convicted and should not be part of the legal system in any way whatever.
Lord Sharpe of Epsom (Con)
If my noble friend is right in his assertions, yes, they should be convicted, but I do not what has happened with prosecutions and convictions in that space. I will endeavour to find out.
Lord Kerr of Kinlochard (CB)
Does the Minister recall that the International Agreements Committee criticised the form taken for the previous agreement with Rwanda—a memorandum of understanding—and thought it should have been a treaty, partly because it was so weighty and partly to provide this House and the other place with an opportunity to scrutinise it properly. I think this new agreement will be scrutinised properly in this House so I am very glad that it is taking the form of a treaty, which will enable us to do that. The Statement said that it will be amended
“to make it clear that those sent”—
to Rwanda
“cannot be sent to any country other than the UK”.
That is what the Home Secretary said in the other place. How is that consistent with our Illegal Migration Act, which says that those who come illegally, in its terms, to this country can never be admitted to this country, will be sent to Rwanda and will be processed there by Rwanda for asylum in Rwanda?
The Minister said that other countries are seeing what we are doing and following suit. With respect, that is not the case. We are the only country that is saying, “If you come by a route that we do not like, we refuse to look at your claim”. We are telling people they may claim asylum in Rwanda but they can never come back here. No other country is doing that. Other countries are considering outsourcing the process and having the processing done abroad, but then the people could go on claiming asylum in the country they intended to go to. How does the Minister reconcile the statement that these people will never be sent to any country other than the UK with the Act, which we spent so long debating here and which I thoroughly disagreed with, that says they can never be sent back to the UK?
Lord Sharpe of Epsom (Con)
First, I agree with the noble Lord about the International Agreements Committee and the previous comments made there. The fact is that the International Agreements Committee is now getting its wish. Legally enforceable treaties should be the vehicle of choice; obviously, it will be scrutinised in both Houses of Parliament. As regards the apparent anomaly between what the Home Secretary has said and what the noble Lord has just pointed out, to respond to that would be to speculate as to what will be in the forthcoming legislation when I simply do not know. I will make sure that point is well made, and I hope to come back to the noble Lord with a strong answer very soon.
Baroness Hamwee (LD)
My Lords, the Supreme Court quite rightly emphasised the importance of the experience of the UNHCR, which had been disregarded. Are the Government now consulting with it and with other relevant NGOs?
Lord Sharpe of Epsom (Con)
My Lords, the UNHCR was not disregarded by the Court of Appeal; that was really the subject of the Supreme Court’s decision. It very much took the court at its word. As I already said, the Government have made a lot of effort to pre-empt the Supreme Court’s decision by doing some of the things that were suggested by the Court of Appeal. Having said all that, we of course maintain close co-operation with all our international partners whether they be states, NGOs or whatever.
Lord Browne of Ladyton (Lab)
My Lords, on 15 November, last Wednesday, the Home Secretary told Parliament in the other place that the Government have
“for the last few months”—[Official Report, Commons, 15/11/23; col. 649.]
been working in Rwanda, building capacity—of decision-makers, I presume—and trying to amend the agreement with Rwanda. Since the Appeal Court decision in June this year, the Government have known that our courts thought there was a real risk of claims being wrongly determined in Rwanda, resulting in asylum seekers being wrongly returned to their country of origin. Can the Minister help me? Where in our deliberations on the then Illegal Migration Bill was either the House of Commons or our House told that this training was going on because the Government thought that real risk needed to be engaged with, or that the treaty that had been entered into was being renegotiated? If we were not told, why not?
Lord Sharpe of Epsom (Con)
I was not present in all the debates regarding the Illegal Migration Act so I cannot honestly answer that question: I do not know whether we were told. I do not know whether the subject came up, whether it was a subject for discussion or any of those things. I am not sure it was relevant to the debates—maybe it was, maybe not; I do not know. I will endeavour to find out and come back to the noble Lord.
Lord Horam (Con)
My Lords, has the Minister seen the suggestion of Lord Sumption that the Rwanda scheme would be more acceptable if more of the assessment were done by British officials rather than Rwandan officials? Will he undertake to look into that in any review of the situation?
Lord Sharpe of Epsom (Con)
My noble friend makes a good point. I will absolutely take that back. We have been capacity building in Rwanda—the noble Lord just referred to it—and I know that a lot of that work is ongoing.
Lord Paddick (Non-Afl)
My Lords, press reports at the weekend stated that, between 2020 and 2022, 100% of asylum claims by people from Afghanistan and Syria were rejected by the Rwandan authorities while almost 100% of asylum claims by people from Afghanistan and Syria were accepted by the UK authorities. How can the Government maintain that Rwanda has been treating asylum seekers fairly in the light of these statistics?
Lord Sharpe of Epsom (Con)
My Lords, it does not matter whether the Government assert that we have been treating them fairly; the fact is that the Supreme Court has ruled otherwise. As I said, we are capacity building; we are working with the Rwandans. We are working on a new treaty. I am sure that the noble Lord’s concerns will be addressed in the fullness of time.
Investigatory Powers (Amendment) Bill [HL]
Monday 20th November 2023
(5 months, 3 weeks ago)
Lords ChamberRead Full debate Investigatory Powers (Amendment) Act 2024 View all Investigatory Powers (Amendment) Act 2024 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Lord Sharpe of Epsom
That the Bill be now read a second time.
The Parliamentary Under-Secretary of State, Home Office (Lord Sharpe of Epsom) (Con)
My Lords, the number one priority of any Government is to keep our citizens and our country safe. The Investigatory Powers (Amendment) Bill seeks to make a set of targeted amendments to the Investigatory Powers Act 2016, which I shall refer to throughout as the IPA.
The measures in this Bill will support the security and intelligence services to keep pace with a range of evolving threats against a backdrop of accelerating technological advancements. Such advancements provide new opportunities for terrorists, hostile state actors, child abusers and criminal gangs. They also mean that data is generated in more places, in more formats and by more different entities than before. The security and intelligence services need to identify nuggets of threat in increasing quantities of data.
Importantly, the Bill will also ensure that we maintain and strengthen the world-leading safeguards that underpin the use of the powers in the IPA. The measures in the Bill are narrow and relatively modest in scope, which reflects the strength of the existing legislation, but they are none the less critical to the task of protecting national security and countering other serious threats.
It may be helpful to briefly remind the House of the parent legislation that this Bill seeks to amend. The IPA provides a clear legal framework for the security and intelligence services, law enforcement and other public authorities to obtain and utilise communications, and data about communications. These powers and the resulting capabilities are essential in supporting these public authorities in carrying out their statutory functions, including detecting and preventing terrorism, state threats and serious crime.
But since 2016 the nature of the threats we face has evolved, and we need to ensure that the UK’s investigatory powers framework remains fit for purpose. The use of these powers is underpinned by the IPA’s robust and world-leading safeguards—including the double lock for most of the powers, whereby a judicial commissioner must approve the decision by the Secretary of State to issue a warrant under the IPA. All use of the powers must be assessed as necessary and proportionate, with strong independent oversight by the Investigatory Powers Commissioner. The right to seek redress is available to anyone via the Investigatory Powers Tribunal.
I emphasise that this Bill is about delivering focused and targeted changes to the existing regime and not about creating new powers beyond those to which Parliament has previously given its agreement during passage of the IPA.
This Bill follows the publication of a statutory report on the implementation of the IPA in February this year by the previous Home Secretary, and a subsequent independent review by the noble Lord, Lord Anderson of Ipswich, which was published in June this year. These reports set out the operational case for change and have informed the contents of the Bill. I thank the noble Lord, Lord Anderson, for his considered review of the IPA; he was instrumental in its initial design as the author of A Question of Trust during his tenure as the Independent Reviewer of Terrorism Legislation.
Building on the areas of focus identified in the Home Office review, the noble Lord’s report focused on: the effectiveness of the bulk personal dataset regime; criteria for obtaining internet connection records; the suitability of certain definitions within the Act; and the resilience and agility of warrantry processes and the oversight regime. His review helpfully highlighted several areas in which the IPA could be improved, and we are pleased to say that this Bill aligns nigh on entirely with his recommendations.
Your Lordships may note that there is one area of the Bill that the review by the noble Lord, Lord Anderson, did not touch on: the changes to the notices regimes. This was subject to a separate public consultation, and the Government are grateful to those who responded for helping to shape this element of the Bill.
I will turn now to the main elements of the Bill. Part 1 deals with bulk personal datasets, more commonly known as BPDs, and makes changes to the way in which the intelligence services may use them. Building on the findings of the review by the noble Lord, Lord Anderson, the Bill provides a narrow group of provisions to: create a set of new safeguards for the retention and examination of BPDs where there is low or no reasonable expectation of privacy; allow for the extension of the duration of a BPD warrant under Part 7 of the Act from 6 to 12 months; and make clear that agency heads can delegate certain existing functions in relation to BPD warrants. Under the current regime, all BPDs—including those that are publicly or commercially available—must be subject to the double-lock warrantry process and strict examination safeguards.
While these safeguards are in many cases entirely appropriate, that is not always so, particularly where a dataset is publicly available and widely used. This has a detrimental effect on the agility of the agencies, particularly where these datasets could be used to develop new capabilities. It also inhibits their ability to work flexibly with allies and partners in academia or the private sector.
Creating a new regime for datasets that have low or no expectation of privacy will increase operational agility while ensuring that proportionate safeguards are in place, including prior judicial approval. This change will be an important step in preventing our agencies falling behind our adversaries.
The Bill also seeks to insert a new statutory oversight regime for examination by the intelligence services of third-party BPDs. Under the new measures, an intelligence service may examine a dataset on a third-party’s systems without taking control of the set itself. However, if the dataset is not publicly or commercially available to other users, the new warrantry process and requirements will apply. The regime will be subject to safeguards such as the double lock already in other parts of the IPA.
Part 2 will make changes to the role and remit of the Investigatory Powers Commissioner and their supporting functions. The Bill will enhance the world-leading oversight regime in the Act, including the role of the IPC. The changes will ensure that the regime is resilient and that the IPC can effectively carry out their functions. This will maintain and enhance the robust, transparent safeguards in the regime.
In addition to putting oversight of third-party BPDs on a statutory basis, the proposed amendments to the oversight regime aim to increase resilience and ensure that it remains fit for purpose. As highlighted in the then Home Secretary’s review, the IPA does not provide an easy mechanism to manage change. This has caused issues regarding the resilience and flexibility of the IPC and the wider IPA oversight regime, such as during the Covid-19 pandemic. The Bill therefore seeks to place the ability to appoint deputy investigatory powers commissioners and temporary judicial commissioners on to a statutory footing, to provide resilience where there is a shortage of judicial commissioners.
The Bill will also formalise some of the IPC’s non-statutory oversight functions—for example, their oversight of compliance by the Ministry of Defence of the use and conduct of surveillance and covert human intelligence sources outside the UK. The measures also provide greater legislative clarity in respect of the error-reporting obligations imposed on public authorities. The IPC has been consulted on all these measures and has endorsed the approach to ensuring that the oversight regime remains fit for purpose.
Part 3 makes changes to Part 3 of the IPA, which relates to powers for public authorities listed in Schedule 4 to the IPA to acquire communications data. CD is the data around the communication rather than the content of that communication. Section 11 of the IPA made it an offence for a relevant person within a relevant public authority to “knowingly or recklessly” obtain CD from a telecoms operator or a postal operator without lawful authority. The Bill will set out examples of the acquisition routes that amount to lawful authority. This will provide greater clarity to public authorities that they are not committing a Section 11 offence when acquiring CD from a telecommunications operator under those routes.
The Bill will additionally make targeted amendments to ensure that public sector organisations are not unintentionally prevented or discouraged from sharing data in order to meet their statutory duties and obligations when administering public services or systems. Part 3 also makes a clarificatory amendment to the definition of CD in Section 261 of the IPA, to make it clear that subscriber data or data use to identify an entity will be CD.
Part 3 also makes changes to allow bodies with regulatory functions to acquire communications data. The use of regulatory powers under the IPA is limited to organisations such as Ofcom and the Information Commissioner’s Office for their regulation of telecoms operators. The Bill seeks to amend the IPA to expand the definition of regulatory powers to include public authorities with wider, lawfully established and recognised regulatory or supervisory responsibilities. The effect of this change will be such that authorities will be able to acquire CD using their own statutory powers and not rely on IPA powers. However, where the CD is being acquired with a view to using it for a criminal prosecution, authorities must use their IPA powers to acquire that CD.
Targeted changes will also be made to support the use of internet connection records by the NCA and intelligence agencies. The Bill will add a further condition which allows the service in use and time period to be specified within the application without the requirement that they are unequivocally known. This will enhance the ability of the NCA and the intelligence services to identify serious criminals, including paedophiles and people traffickers, helping to protect victims and counter threats to the UK’s national security.
Part 4 will ensure the efficacy of the existing notices regimes in the face of technological changes and the complex commercial structures associated with the modern digital economy. These measures have been carefully calibrated to address these issues in a proportionate way. Furthermore, the notices regimes have existed since the 1980s, and these reforms are just the latest iteration of that regime. This is not about introducing any new powers. The Bill will create a notification requirement which will allow the Secretary of State to place specific companies under an obligation to inform the Secretary of State of proposed changes to their telecommunications services or systems that could have an impact on lawful access. I wish to be clear that this is not a blanket obligation on the tech sector. It will be placed on companies on a case-by-case basis and with full consideration of the necessity and proportionality justifications of doing so each time.
Furthermore, the notification requirement does not give the Secretary of State any powers to intervene in the rollout of a product or a service or to veto such a rollout. It is intended to ensure that there is time for appropriate consideration of the operational impact and potentially for discussion with the company in question about possible mitigations. This notification requirement has replicated the existing notices standards wherever possible and is itself already part of the wider notices regime, where the Government are able to require companies under notice to inform us of relevant changes which affect their ability to provide assistance under any warrant, authorisation or notice.
The Bill also amends the effect of a notice during the review period. A notice must go through the full double-lock process before it may be issued to a company. On receipt of that notice, a company may request a review of that notice. Currently, the notice has no legal effect during the review period. The Bill amends this to require the company to maintain the status quo during the review period. This will mean that the company does not have to take any steps to comply with elements of the notice, other than to maintain its existing services at the point it is given the notice. The result will be that the company cannot take any action that will negatively affect the level of lawful access for our operational partners during the review period. This is without prejudice to the final outcome of the review and ensures that this outcome cannot be pre-judged.
The Bill also makes a clarificatory amendment to the definition of a telecommunications operator. This makes clear that large companies with complex corporate structures which together provide or control telecommunications services and systems fall within the remit of the IPA. It also clarifies that a notice may be given to one entity in relation to the capability of another entity. It does not seek to bring new companies into the scope of the IPA. Furthermore, the Bill creates a new safeguard for the renewal of notices. This will require a notice to be put through the full double-lock process after two years, if it has not been varied, renewed or revoked in that time.
Finally, Part 5 includes several minor changes to the IPA to ensure sufficient clarity and resilience within the regime. This includes increasing the resiliency of the triple lock, which is the additional safeguard for targeted interception and equipment interference warrants relating to members of relevant legislatures, such as this Parliament. Clauses in Part 5 will allow for the Prime Minister—in the event that they are unavailable—to delegate their responsibility for providing the triple lock to named Secretaries of State. This change is purely about ensuring resilience in the authorisation process and does nothing to alter the existing power or introduce any new power.
I conclude by highlighting the opportunity that the Bill affords us and the impact it will have on the safety and security of the UK and its citizens. Without making changes now, the ability of our agencies to tackle evolving threats—including terrorism, state threats, and serious crime—will be increasingly constrained. In the face of greater global instability and technological advancements, now is not the time for inaction. I welcome the further scrutiny that noble Lords will provide. From looking at the list of speakers, I am in no doubt that they will start with a typically insightful debate today. I beg to move.
Lord Coaker (Lab)
My Lords, I am sure the Minister was referring to me. But, seriously, I thank him for that helpful introduction and for the briefings that he and his officials have organised, including in buildings nearby later this week.
This is an important Bill, and we all need to ensure that it delivers effectively what we all wish for as we seek to defend our country and our freedoms against outside threats. I say to noble Lords including the Minister that we fully support the passage of the Bill, for the reasons that he outlined in his conclusions, and recognise the changed security environment that necessitates the need for this piece of legislation updating and improving the Investigatory Powers Act 2016.
There have clearly been significant changes to the threat picture, with developments that had perhaps not been fully foreseen over the last few years. Of course we have to remain vigilant against any terrorist threat, but even that has been overshadowed by other factors—in particular, the pace of geopolitical change and the extent of its impact on the UK and its people. The invasion of Ukraine, the weaponisation of energy and food supplies, artificial intelligence, the actions of Iran and the more aggressive stance with China in the South China Sea and beyond are just some of many examples. Importantly, this also manifests, as the Minister will know better than anyone, as threats such as economic espionage, the buying of influence, cyberattacks, disinformation and indeed, as we saw, the Salisbury poisoning. In the face of that hostile state activity, we have to change.
I join the Minister, and no doubt many others, in saying that we are very fortunate in having had the extremely helpful—and for me, I might add, understandable—report by the noble Lord, Lord Anderson, to guide us in this. It is also good to see other Members of your Lordships’ House who have extensive experience in this area to inform our debate. In congratulating the noble Lord, Lord Anderson, I shall raise some general points from his report and then deal with specifics as appropriate for a Second Reading debate.
It is of huge significance and importance that the noble Lord, Lord Anderson, did not produce a classified annex to his report. In an area of this importance and sensitivity, you obviously need secrecy and confidentiality, but there has to be as wide a public and parliamentary debate as possible. There are real issues of principle being discussed here, not least the right to privacy and the protection of an individual’s information or personal data. As I say, there is a need for the security services, law enforcement and others to act and to have the intelligence tools that they need, but the balance between national security, tackling serious crime and an individual’s privacy should and must, quite rightly, be a matter for public debate. When fundamental rights are at stake, that needs to be cautiously challenged, and this House will need to do that in Committee, while, as I say, fully supporting the overall passage of the Bill.
Chapter 10 of the report asks what comes next. Such is the pace of change and challenge, the noble Lord, Lord Anderson, recommends that, once this amending legislation is on the statute book, we need to move on very quickly to what comes next.
I shall turn to the Bill with some general comments, with the more specific questions coming in Committee. Bulk personal datasets are clearly important, and the Bill will allow a lighter-touch regulatory regime. The threshold will be where individuals have a low or no expectation of privacy in respect of that data. The Bill seeks to set out examples of the sorts of cases where such a regime would apply for the examination of material by the UK intelligence community. I believe there will need to be a careful debate about what such a threshold means. What does “low” mean? Would all such activity be subject to the approval of a judicial commissioner? Some have already expressed particular concern about new subsection (3A)(e), inserted into Section 11 by Clause 11(3), which says that communications data can be obtained
“where the communications data had been published before the relevant person obtained it”.
Does that mean it is available simply by having been published?
On a more general point, how does all this relate to the Data Protection Act, where personal data may be protected but is potentially not so by the new Bill? Big Brother Watch gives the example of the potential concern over Clearview, which has a mass of facial images—approaching 30 billion—harvested from social media. That could be considered a low-privacy database since the photos had been made public by the individuals, but the Information Commissioner’s Office found Clearview in breach of the Data Protection Act. This argument could therefore potentially be extended to many areas, such as Facebook posts, and will therefore need careful scrutiny, along with the more general point about the relationship between this Act and the Data Protection Act.
There are to be new proposals for internet connection records; they are clearly important, but changes are again being made. In particular, on the justification for target discovery—which, in essence, is a more generalised surveillance, if I have understood it correctly—is it the case therefore that there may not necessarily be a need for suspicion to lead to a particular form of surveillance? It is also interesting to note that, according to the report by the noble Lord, Lord Anderson, as I understand it, this extension or facilitation of target discovery for internet connection records should be limited to UK intelligence. So why have the Government extended this to the National Crime Agency as well as to the UK intelligence community? In other words, why has it gone beyond the recommendations of the noble Lord’s report?
The need for the communications of legislators to be secure and confidential—say, in discussing matters with constituents or other bodies—except in the most exceptional circumstances, is of real importance. Following the IPT case in 2015, there was legislation in the 2016 Act that tried to protect this principle by allowing any interception or obtaining of any communication to be allowed only with the so-called triple lock—in other words, after Prime Ministerial authority was given. The question this Bill seeks to answer is: what happens if the PM is, in the Minister’s words, “unavailable”? This seems to me to be a reasonable question to ask. We need to probe Clause 21 carefully and ask whether the inclusion of any Secretary of State is too broad a definition, what the involvement should be of senior officials, as laid out in the clause, and whether the proposed definition is correct. For example, would it not be better to specify the Secretaries of State as the Home Secretary or the Defence Secretary, or other senior Secretaries of State, rather than the broad blanket of any Secretary of State? The senior officials are explained, to an extent, but we need to explore in Committee whether we need to be more circumspect with what we mean by that.
We have also received a briefing from Apple, and it is important for us to reflect on its concerns. As I have made clear, we support the passage of the Bill, subject to proper scrutiny, which we and others will give in Committee, but Apple’s concerns need to be addressed by the Government in a public forum, to ensure trust and confidence in the new system we seek to introduce. Why is Apple wrong to have concerns about pre-clearance requirements?
On extraterritoriality, the noble Lord, Lord Anderson, says on page 57 of his report that he makes “no recommendation” on a policy issue for DRNs or the importance of end-to-end encryption. End-to-end encryption is a key security tool for us all, but it is also one that can be used, and is used, by malicious actors. We understand that, so how do we strike a balance between the necessity for the privacy and protection of an individual’s data and the need for security services and others to have potential access to that data to uncover serious crime or terrorist activity? In Committee, we need to discuss where that balance should be made and where that line should be drawn; it is an important area of discussion.
Throughout the report by the noble Lord, Lord Anderson, and the subsequent Bill before us, we see various adaptions of warrant processes, judicial oversight and the role of the commissioner, with many proposals. While we are generally supportive, we will need to examine these in more detail in Committee, but I have a few general points to raise now. For example, does the Bill help to sort out confusion in government? Incredibly, on page 28 of the noble Lord’s report, the MoD cannot, even when co-located in a hostile environment, transfer some data to the UKIC. Does the Bill sort that out? That is an important question that I put on the table for an answer—not necessarily now, but certainly in Committee.
Domestically, on the same page, we are told that it was a revelation to UK intelligence community officers to see how easily other government departments subject only to normal data protection requirements could access, retain and process bulk personal data. This Bill should not go through without the corresponding changes to policy and practice, highlighted by the above two apparent anomalies. No doubt there are many more. It would be a wasted opportunity were we not to address some of those examples which seem to draw attention to anomalies within the existing system which many of us would expect a Bill such as this to sort out.
Co-operating should not be as difficult as it seems to be. Openness and transparency are crucial so that we can be sure that, as far as possible, the number of various warrants applied for and refused is made public. More generally, what role is there for parliamentary oversight as well as the intelligence commissioner and so on? The Intelligence and Security Committee is our important eyes and ears on this matter. What part will it play in all this? Are its terms of reference, which I have said in other debates are in need of review, sufficient to allow the necessary level of scrutiny? If it is not appropriate for the committee to be involved, where is the parliamentary scrutiny? Where is the mechanism for reporting to Parliament? It would be interesting to hear that from the Minister. Yes, there are various commissioners and there is senior ministerial involvement, but what of Parliament? Parliament cannot be seen in areas as important as this as an afterthought or an irritant. It should be a proper custodian of our values in this difficult area.
I have laid out some of the key issues, although there are many more. I conclude by saying that, as the noble Lord, Lord Anderson, pointed out in his report, we cannot allow the debate to be characterised as being between those who stand up for security, for our country, and who understand what needs to be done, versus a privacy lobby that does not live in the real world. Of course, operational security cannot be compromised and changed threats require policy to be developed. We support the Government in this through the changes which are needed in this Bill. The challenge is to do so in a way that is consistent with our principles of democracy and human rights. Sensible debate and discussion surely will help us towards something that we all want—to build a consensus as far as possible over protecting our nation and allies against those who would do us harm, and not to undermine privacy or freedoms unless it is essential to do so.
Lord Fox (LD)
My Lords, it is a great pleasure to follow the noble Lord, Lord Coaker. I look forward to a fascinating and intimidatingly expert debate. Before commenting on the Bill, I feel that it is important to contextualise what we are discussing today.
Many of us enjoy books that depict the intelligence services. In the main, the George Smileys who appear within their covers are practising in a world that is very far from the lived experience of most people in this country. However, the reality is very different. The work of the intelligence services impacts very many people’s lives in the UK. It is not just bombs and guns but drugs, people trafficking and other exploitation, financial and cybercrime, extortion and many other crimes. The perpetrators are Governments, terrorist organisations, criminal gangs and lone individuals. Crime and terror merge and are socially unjust activities that prey on the weak. The victims are most often the vulnerable and those with the least ability to resist. Within this depressing tapestry, we rely on our intelligence services to help keep us safe and we need a police force that can cope with the complexities of those crimes. Liberal Democrats wholeheartedly support the services that seek to do this and we welcome this debate.
We also believe that these vital tasks have to be balanced against the freedoms and liberties at the heart of our country’s values. Every new power must be weighed in that balance and the noble Lord, Lord Coker, just explained that from his perspective. As we have heard, this Bill proposes some specific amendments to the original Investigatory Powers Act 2016. I was not involved in the scrutiny of the Bill at that time; that fell to my noble friend Lord Paddick, and the noble Baroness, Lady Williams, was in the ministerial chair, so it is a new set of eyes looking at this legislation.
I remind your Lordships’ House of some of the key priorities that my noble friends here and my colleagues in the Commons applied to the 2016 Bill. The first of these is that there should be no weakening of encryption. The second is the vital role of judicial authorisation and the third is that, when it comes to the bulk collection of information or mass surveillance, British residents have a right to expect privacy. These principles were central to our response to the last Bill and will be to this.
Today’s Bill, as we have heard, is the product of deliberation over years. Your Lordships should particularly thank the noble Lord, Lord Anderson, for his work on it. However, given the time taken to get this far, it is very disappointing that the Government chose to introduce the Bill in such a rush that it gave just eight working days for parliamentarians and civil society to prepare for the specific scrutiny of it. If the Government were seeking to ensure that they took people with them, this is a way to antagonise them. There are already comments about haste being an effort to railroad people.
I am afraid my speech today is quite a long one because I did not have time to write a short one. I turn to the Bill. As the Minister set out, the original Bill established a set of protections under Part 7; this Bill introduces two new levels of security, Parts 7A and 7B. Part 7A is introduced in Clause 2 and concerns bulk datasets, as we have heard, with
“low or no reasonable expectation of privacy”.
These so-called low/no datasets may be in three types, each with slightly different rules.
I have enjoyed helpful discussions with the Minister’s department and for that I appreciate his facilitation and engagement. During those discussions, the basic explanation has been that these datasets are needed to train tools using machine learning, that they already exist and are being used in the commercial world, but the Part 7 process makes them at best clumsy and at worst impractical to be used by the intelligence services. I take those points. Furthermore, the introduction to Part 7A includes a requirement for approval from judicial commissioners. Had it not, this discussion would have been much harder.
If training Al tools is the stated prime mover for Part 7A, the inclusion of urgent data as one of the three types of data clearly indicates it is also needed for ongoing investigations. I can imagine why urgent data might be needed, but it is the investigators who will define the urgency. Additionally, new Section 226BC refers to a relevant period of three working days between the acquisition of the urgent data and full judicial approval. Yet, after three days, the judicial commissioner may decline to permit the use of the data that has already been employed in an investigation using rapid Al-enabled analysis.
Taken together, I have my worries. There needs to be a duty to immediately notify the judicial commission. Secondly, there should be guardrails helping define “urgent” and finally we need to discuss how information discovered using data that is subsequently ruled ineligible is, shall we say, unremembered. Without these, the use of low/no datasets in this way for operational issues is concerning.
I have gone into this in some detail because I see it as a serious operational concern but also because I wanted to illustrate the sort of scrutiny the Government should expect from these Benches throughout this debate. There are other examples as we go through the Bill, but I will refer to those only broadly now. Clause 5 introduces a second new category of approval, Part 7B, this time for datasets held in third party assets to which the intelligence services have access. As far as I can deduce, this brings into the orbit of the IPA data which was previously not included and mandates both Secretary of State and judicial commission levels of approval. Unless I learn otherwise, that is a good starting point.
That said, we will seek to initiate explicit discussion around the use of medical, genetic and genomic data and how this can be protected. Here I note that anonymised data can be relatively easily reassigned, so anonymity in health databases is no actual protection. This is important on several levels, not least for public confidence in the digitisation and legitimate use of this very important information.
Part 2 allows the deputisation and delegation of some of the powers to broaden the number of people responsible involved. I just ask whether the Minister believes that this heralds a massive increase in workload.
In Part 3, I thank the Minister for his explanations around Clause 11, which I shall read carefully, and I will be coming back for some more details about how that will work in practice. Clause 14 creates a new condition for the use of internet connection records by the intelligence services and the NCA. Broadly, this removes the need for exact times when seeking connection records, substituting time ranges. This seems acceptable, as long as the Minister can assure your Lordships’ House that this will still require Secretary of State and judicial commission approval.
Part 4 moves into the area of retention notices and away from issues covered by the report of the noble Lord, Lord Anderson. I believe that Clause 15 is focused on bringing inbound roaming on foreign SIM cards into the frame, so I would appreciate details of how this will work. For example, if I am in the UK using a SIM that I bought in Dubai from a UAE-based telecoms provider, how does the intelligence officer proceed?
Clause 20, as we have already heard from the noble Lord, Lord Coaker, is one that has already raised eyebrows in the industry. Proposed new subsection 258A requires telecoms operators to inform the Secretary of State if they propose to make changes to their products or services that would negatively impact existing lawful access capabilities. In reality, this can include changes in encryption, a topic which has recently been on a rocky journey through the passage of the Online Safety Act. This Bill proposes a number of changes, building on the current regime set out in the 2016 Act, that relate to decryption of private messages for law enforcement purposes. In short, we believe the amendments would, or at least could, grant the Home Secretary more extensive powers to intervene in, and in some cases block, communications providers’ operational decisions, including enhancing privacy settings for users, with potential knock-on implications for end-to-end encryption on those services for everyone. I think more debate will be needed in this area.
There are other issues of timing, the possible length of a review, extraterritoriality and the level of judicial commission oversight at the notice level. I am sure I will be told by the Minister that this is a narrow interpretation, but it is an interpretation that has legs outside your Lordships’ Chamber. How will this power be used and what are the implications? Will we perhaps see British law officers beating a path to California to serve these notices? In a sense, how far does this go?
Finally, Part 5 invokes some interesting questions, some of which the noble Lord, Lord Coaker, has already asked and we will surely want to probe. We will want to introduce a requirement that the Investigatory Powers Commissioner is informed of, and records in their annual report, the number of warrants authorised each year to permit surveillance of Members of relevant domestic legislatures. For now, perhaps the Minister could tell your Lordships’ House what the process is for gaining permission to intercept and examine the Prime Minister’s communications.
We will also be probing two other important areas on which there is no time to expand today. The first is specific protections to avoid either cementing or introducing systemic bias against certain sections of the community from the AI models of the future that will be built as a result of this legislation. The second is the use of facial recognition technology on the back of the tools created using the low/no databases, a point that the noble Lord, Lord Coaker, raised.
To conclude, we are concerned that the Bill could push legislation further past the point of balance that we started to discuss. We need to ensure that judicial oversight extends right through the activities enabled by the Bill, and there should be no weakening on the encryption issue. I hope the Minister views this critique in the spirit of constructive support that I have sought to invoke, and I look forward to the rest of the debate and the further stages of the Bill. As he can see, our work will be built on the foundation that British residents have a right to expect privacy.
Lord Anderson of Ipswich (CB)
My Lords, I thank noble Lords who have referred kindly to my independent review of earlier this year, a short sequel to the much longer reviews, A Question of Trust and the Report of the Bulk Powers Review, that I was commissioned to conduct, with all-party agreement, in advance of the Investigatory Powers Act 2016.
Given the controversy surrounding electronic surveillance at that time, in the wake of Edward Snowden’s disclosures, the IPA had a remarkably smooth parliamentary passage—although I say that as someone who was outside Parliament at the time. I put that down to the detailed preparation that preceded that Bill, including reports from the ISC and from RUSI, and of course to the work of the draft Bill committee, chaired by the noble Lord, Lord Murphy of Torfaen, who I am delighted to see in his place. I remember being questioned by its members, including the noble Lord, Lord Strasburger, and Suella Fernandes MP, as she then was. That committee made 86 detailed recommendations, practically all of which found their way into the Act. How much time and testosterone can be saved—and was saved in that instance—by debating these important issues before a Bill is published in final form.
The IPA replicated and, indeed, enhanced the very considerable powers conferred by its predecessor, RIPA, on our intelligence agencies and police. However, its emphasis on transparency and effective oversight, in particular by the judge-led Investigatory Powers Commissioner’s Office—IPCO—with its excellent technical support, brought it into the modern age. I believe we have seen the tangible benefits of that in recent years; I will give three short examples.
The UN special rapporteur on the right to privacy, who had previously described our arrangements as “worse than scary”, reported in 2018 after an inspection visit to the UK that, thanks to the balance struck by the IPA, the UK
“can now justifiably reclaim its leadership role in Europe as well as globally”.
The English Court of Appeal overwhelmingly rejected an extensive series of challenges to the IPA in August this year, citing the authority of the European Court of Human Rights, which, rather more than the EU’s court in Luxembourg, has shown itself impressively ready to accept the use of bulk collection powers, properly safeguarded.
In addition, judicial approval of warrants, introduced here by the IPA but long familiar in North America, was instrumental in securing our data access agreement with the United States—a world first, which, given the American ownership of so many big internet platforms, is of particular significance to law enforcement on this side of the Atlantic.
Therefore, the IPA has been good for this country, including by helping to secure the international acceptance and co-operation that are ever more essential to the fight against organised crime and threats to national security.
However, the Minister is right to say that in limited areas, the IPA is in need of what I call running repairs. The Home Office invited me earlier this year to look at some of those areas which it had identified as in need of attention. Other parts of the Bill, including elements of Parts 1, 3 and 4, fell outside the scope of my review. In my report published in June, I largely accepted the Home Office diagnosis, although my prescriptions were in some respects different from its. In particular, in relation to the bulk dataset issues that occupy Part 1 of this Bill, I thought it important that the borderline between Part 7 and the proposed new Part 7A of the IPA, concerning datasets in which there is a low or no expectation of privacy, should be patrolled at the moment of decision not just by the intelligence agencies themselves but externally by independent judicial commissioners.
Since my report was submitted in April, there has been a convergence of views on this issue and on others, one of them in relation to the NCA and Clause 14, which was touched on by the noble Lord, Lord Coaker. I am grateful to the Security Minister and to the noble Lord, Lord Sharpe, for our discussions and the open spirit in which they took place.
The Minister knows that it has not always been my habit to give an unqualified welcome to Home Office Bills; judging from the Statement that was debated earlier this afternoon, I cannot guarantee that things will be any different in future.
I understand that Ministers like to come to this place with a few concessions in their back pocket, and there is no harm in that. But too often, elements of the Bills that arrive with us have a lopsided look; one suspects, rightly or wrongly, that they are the opening gambit in a concession strategy, whereby the energy of this House is occupied with the tabling and discussion of amendments, only for the Government eventually to concede what they had a good mind to do all along. This can be both frustrating and counterproductive; those who mistrust the Government see their worst fears confirmed by the initial version of the Bill, while those who trust them are reluctant to express that support, lest the ground be cut from under their feet.
It is to the credit of those concerned that I do not believe that such an approach has been taken with this Bill. No doubt it is capable of improvement; I welcome the challenges that have been made by NGOs and by the noble Lords, Lord Coaker and Lord Fox, not least because I was not able to consult in quite such specific terms as I would have liked on the proposals that were put to me by the Home Office. Indeed, there are a few points that I may seek to probe in Committee. But I consider that the Bill is an honest attempt to strike a fair balance in these difficult areas. We risk reversing the operational gains that it promises if we overload the Bill with unnecessary safeguards, or seek radically to reshape the judgments that it makes.
We need powerful weapons to combat the scourges of hostile state activity, terrorism, fraud, people trafficking and child sexual abuse, and we need to embed them in a strong framework that includes the gold standard of prior judicial authorisation for the most intrusive powers. This Bill gives us both those things, and we should not discard or devalue either.
History suggests that the lifespan of investigatory powers regimes is no more than 15 years or so, and technological developments mean that we are likely to be working towards a more fundamental revision of the IPA by the end of the decade, if not before. My report contains some ideas on what these technological developments are and how the process might be started, but for the time being I am glad that time has been found for this necessary Bill. I am happy to give it my support.
The Lord Bishop of St Albans
My Lords, I too thank the noble Lord, Lord Anderson of Ipswich, for his very helpful and excellent work in his area. With the rapid acceleration of technology and technological capacity, I recognise the need for this Bill to be updated. In this context, I welcome the Government’s sense of urgency in addressing the changing landscape in this area, and seeking to close those gaps that potentially endanger both the security and the safety of our nation. My right reverend friend the Bishop of Leeds had hoped to be here today, as he has taken a particular interest in this area, but he is detained elsewhere. We would both like to express two concerns that we believe must be addressed as this Bill is debated in your Lordships’ House.
First, the proposed amendments give the intelligence services vastly expanded powers not only to investigate individuals but to harvest and exploit vast amounts of personal data—not just of crime or terror suspects but of anyone. The collection of bulk datasets of personal details, including facial images and social media activity, is far reaching and potentially indiscriminate, so we must rightly be concerned about how effective any safeguards might be in controlling the power that such access gives to our intelligence services. The risks, particularly under a regime less ethically aware than those we are used to in this country thus far, are substantial. The weakening of safeguards risks endorsing the need for updating surveillance capacity, at the same time as threatening basic human freedoms.
Secondly, it has become clearer by the day that we are developing technical capacity well ahead of the ethical consideration of risk. Ethical thinking might well be deemed inconvenient by those who wish to forge ahead with greater advances and greater security provision. However, to fail to address ethical considerations now will simply leave us, at best, running fast to catch up later once the train has left the station and is already at full speed away in the far distance—and, at worst, having compromised personal and societal freedoms and having changed the nature of a free society.
The current proposals are likely to lead to a broad and vague definition of “public safety” in which the security and powers of the state in one area reduce essential personal freedoms. To that extent, I believe the helpful comments made by Big Brother Watch should be taken seriously and answered comprehensively if we are to be fully aware of the trade-off between two goods: public safety and personal privacy.
No one would wish to stand in the way of His Majesty’s Government’s intention to tackle terrorism, state threats, serious organised crime such as child sexual exploitation, illegal migration and fraud. These need to be faced head-on. The question is whether the proposed extensions contain sufficient safeguards to ensure that the mass of law-abiding citizens in a free society are not caught up in a form of mass surveillance in which they cannot trust that justice and privacy will be upheld.
When the Bill was first passed in 2016, the then Home Secretary said
“it is … right that these powers are subject to strict safeguards and rigorous oversight”.
It is essential that the Bill meets those conditions, but I worry that it does not do so in all places in its current form. We look forward to interrogating the Bill as we take it through its later stages.
Lord Murphy of Torfaen (Lab)
That was an interesting speech by the right reverend Prelate the Bishop of St Albans, because he put his finger on the dilemma of any legislation like this: the balance between liberty as a subject on the one hand and the security of our citizens on the other. That has become increasingly complicated as the years have gone by.
As the noble Lord, Lord Anderson of Ipswich, has mentioned, I was asked by the then Home Secretary, Theresa May, to chair a Joint Committee of both Houses of Parliament to deal with the original Investigatory Powers Bill exactly eight years ago this week. She asked me because I had been chair of the Intelligence and Security Committee. We met for about three months and made 86 recommendations, nearly all of which were accepted by the Government. Those recommendations were nearly all about the balance between liberty and security, which the right reverend Prelate referred to. The committee had 57 witnesses, including the noble Lord, Lord Anderson, and 148 written submissions. The process that took place all those years ago was vital for this sort of Bill. For various reasons we have not had that, and perhaps we will come to that in Committee.
That balance is also reflected in the work of government. For example, when I was Northern Ireland Secretary I had to sign warrant after warrant to deprive our own citizens of their liberty. They did not know it, of course, but that is what we were doing. If we had not done so, the chances are that many hundreds if not thousands of people would have perished in Northern Ireland, and indeed in Britain, because of the way in which the intelligence services were able to infiltrate the IRA and the loyalist paramilitaries.
Of course, a major recommendation of that committee was to have a review of the legislation five years after the legislation had been finished in Parliament. We have been very fortunate that the noble Lord, Lord Anderson of Ipswich, has actually conducted that review. I read it on the weekend. It is a lot to read on a weekend—138 pages—but it is, although on a very difficult subject, a relatively easy read for lay people such as myself. It is thorough; it is full of common sense, and it is practical. In the absence of a pre-legislative committee of both Houses, the review has, in a way, replaced that. Without the noble Lord’s review, we might not have the same Bill in front of us as we do now.
I agree with every single one of the noble Lord’s recommendations and, indeed, in Committee, there may well be more recommendations that this House can put before the Government. I hope that we do not get into a situation where we have to vote on those, but that we can have proper discussions between Members of this House and the Government on what those might be. They could cover internet communications records, bulk personal datasets, the issue of telecommunications companies and their notification of changes in the way they operate—all these things are significant. I just want to touch on one, which is of interest to all of us in here, and that is how we deal with parliamentarians.
The Wilson doctrine is as old as Harold Wilson, of course: it was a long time ago that that happened. I understand that, because we now need three people, including the Prime Minister, to consider these matters, but if the Prime Minister is incapacitated—as Boris Johnson was when he had Covid at that time—what do you do? Presumably, you go to the Secretary of State to be able to deal with that issue. I think that is sensible, but I take my noble friend Lord Coaker’s point that it should not be just any Secretary of State. It should be confined to either the Foreign Secretary, the Home Secretary, the Defence Secretary or the Northern Ireland Secretary; in other words, Secretaries of State who have experience of dealing with warrants, because these are such hugely important matters.
I also want to take up the point that my noble friend made about the Intelligence and Security Committee itself. The Minister will answer whether the committee has been consulted on these proposals: if it has not, it should have been and if it has, it would be useful for us as parliamentarians to know what it said. That is of vital importance to us.
Clearly, we need to update how we deal with the evil and unpleasant people who threaten our security and our lives. The technological innovation in the past eight years has been absolutely dramatic and will get even more dramatic as the years go by. My noble friend mentioned China, the war in Ukraine and Russia, and all those other authoritarian countries that exist on our planet. That is going to get worse. He also mentioned how much more sophisticated criminals now are, so we have to keep up with all this. What struck me in the last six or seven weeks, in the horrific and terrible war that we now see in the Middle East, was that the intelligence services of Israel, which were notably good, obviously failed. It could have been that if they had worked, we might not have had the horror that we now see in the Holy Land. I support this Bill, but I also support it on the basis that it has had immense scrutiny from the noble Lord, Lord Anderson; but there is still work to be done and I look forward to debating it in Committee.
Lord Strasburger (LD) [V]
My Lords, I apologise before appearing—or, more precisely, not appearing—before your Lordships in this manner, but I understand that there has been a failure in the parliamentary network and I cannot appear in video; it was either by telephone or smoke signals, so I will settle for the phone.
I should begin by declaring my interest as chair of Big Brother Watch, which campaigns for the privacy and freedom of speech of the citizens of our country and seeks to protect them from unwarranted intrusion by the state into their lives and their data. Big Brother Watch has managed to rapidly prepare a briefing for parliamentarians about this Bill, and I commend it to Members of this House. It sets out five areas of concern, which I will cover later in my contribution.
However, Big Brother Watch had to work at pace to complete the briefing for this Second Reading because the Government published the Bill only on 8 November, just eight working days ago. I wonder what the reason could be for this rushed processing. Could it be that the Government want to avoid the thorough examination that this detailed and complex Bill needs? If so, the small number of Members who are ready to speak about it today—just 11, including the Minister—suggests that this strategy might have worked. Therefore, my first question for the Minister is to ask for an explanation of why so little time has been given to prepare for this Second Reading.
I sat on the Joint Committee that carried out the pre-legislative scrutiny of the original Investigatory Powers Bill in 2015 and 2016. The noble Lord, Lord Murphy of Torfaen, whom I am pleased to follow in this debate, was the chair of that committee and a very good job he did too. My view eight years ago was, and still is, that bulk data collection—that is, the interception or collection and indefinite storage of everybody’s innocent internet, phone and computer communication—is a serious intrusion on every citizen’s privacy and requires very strong judicial oversight.
Those who support this mass surveillance seek to reassure us by saying that if you have nothing to hide you have nothing to fear. However, in truth do we not all have something to hide that we would prefer to keep to ourselves? That is why we shut the toilet or bedroom door behind us. That is why we do not speak in public about troubling issues in our family or friendship circle such as addictions, unwanted pregnancies, financial woes and the like. There are some things that we just feel are private—the kind of information that, in the wrong hands, can be used to demean or blackmail any of us. That detailed knowledge about every individual in the country could be used by an unscrupulous Government—who are considering ignoring laws and treaties, for example, if that rings any bells. They could use it to identify all citizens of a particular religion, political persuasion, sexual proclivity or whatever, to single them out for disadvantageous treatment or worse—much worse.
The state is collecting this personal information about us all and we cannot predict who in a future Government will get their hands on it and might totally misuse it. All I can say with certainty is that East Germany’s Stasi would have thought that every day was Christmas if it could have laid its hands on such a rich source of intimate data about all its citizens. Therefore, we must achieve a balance between the privacy needs and rights of individual citizens and protection of those same citizens from terrorists and serious and organised crime. It is not an easy balance to get right. I fear that the Government are still erring in favour of capturing too much data about innocent citizens—of course, the vast majority of us.
There is another very strong reason for not engaging in the collection of everyone’s data. The problem is that the useful information about terrorism or organised crime gets buried in a blizzard of useless data about the vast majority of us who are innocently going about our lives. In 2016, the Joint Committee on the Draft Investigatory Powers Bill heard startling evidence about the problem that this causes for security services from a gentleman called Bill Binney, a retired technical director of the United States National Security Agency and a bit of a folk hero in the intelligence community because he predicted with great accuracy when the Russians would invade Afghanistan just by analysing the patterns of their military signals. However, later in his career Mr Binney concluded that the NSA’s policy of collecting the data of all American citizens was unconstitutional, so his team devised software called ThinThread. It used smart collection to pick out for inspection only the communications of known terrorists, those they were talking to—and who those people were talking to.
The management of the NSA instead chose to go down the road of collecting 100% of the data through a highly expensive project, Trailblazer—which was later abandoned—and ignoring Bill Binney’s method of giving the analysts a much smaller but richer and more relevant set of data. The consequence was that the NSA missed the data that it already had in its systems which would have alerted it to the plot to attack the twin towers on 9/11. If only the NSA had known that it had it and had looked at it. We know that the NSA did have it because shortly after 9/11, Mr Binney’s team ran its ThinThread software against the NSA’s database at the time of 9/11 and found six of the 9/11 conspirators and their command centres. Mr Binney shocked the committee by revealing that 9/11 could, and should, have been prevented—if only the American security analysts had not been swamped with useless information.
The price paid by the American people for their security services’ predilection for bulk data collection was very high indeed. Yet here we have in this Bill the continuation of that folly by our own intelligence services. I invite noble Lords to recall the terrorist attacks of the last 20 years and that, almost every time, it was later revealed that the perpetrators were known to the police or the intelligence services. Our people being swamped with irrelevant data must have contributed to the failure to further investigate these suspects before they acted.
The Government will no doubt argue that the advent of artificial intelligence makes it more possible for them to search for needles in haystacks. That may well be so, but some of that advantage will be negated by the massive explosion of data volumes they are now collecting from a wide variety of sources, especially social media and video. The fact remains that they are still holding, and have available for inquiry, huge amounts of data about all of us in this House and in this country—all of it at risk of being misused. Bill Binney’s solution was to immediately encrypt the 99.9% of the data that was of no interest to protect it from snooping, official or unofficial. In the UK we have none of that protection.
The Investigatory Powers Act, to the credit of the then Government, sought to reassure the public that there are limitations on the use of personal data by law enforcement and the security services, and how those limitations are policed. However, it is worth noting that it was also disclosed that several intrusive powers have been used on the British people for many years, without any such constraint. That was because they had been in use without the consent or even the knowledge of Parliament. If it had not been for the brave whistleblowing of Edward Snowden, the contractor to the American National Security Agency, the scandal of the UK’s surveillance powers would not have been revealed to Parliament and may never have been addressed.
We need an Edward Snowden-type whistleblower every few years to keep our security services and our Government honest, because the safeguards that are in place to ensure compliance by the security services and prevent misuse of these highly intrusive powers seem to be inadequate, as illustrated by the TechEn case. This was a very serious breach of the statutory safeguards in the Investigatory Powers Act and the Regulation of Investigatory Powers Act 2000. It was the subject of the scathing judgment against the Security Service and the Home Office by the Investigatory Powers Tribunal in January this year. MI5 admitted that it had been aware, since May 2016, that there was a very high risk it was in breach of its statutory obligations concerning the holding of personal data under both Acts. It also admitted that it should have immediately reported to the Investigatory Powers Tribunal but failed to do this for three years.
The Investigatory Powers Tribunal found that
“there were serious failings in compliance with the statutory obligations of MI5 from late 2014 onwards”—
that is, two years earlier than MI5 admitted—and that those failings should
“have been addressed … by the Management Board”.
It was also strongly critical of the Home Office’s failure to inquire further into MI5’s long-standing compliance failures, after being made aware of them several times since 2016. The tribunal found that the Secretary of State breached their duty to make adequate inquiries as to whether the statutory safeguards were being met, and that warrants were issued after late 2014, through to 5 April 2019, that were unlawful and did not meet the safeguarding requirements imposed by the Investigatory Powers Act and RIPA. Other breaches of the safeguards were alleged, but we do not know the tribunal’s verdict on them because they were covered only in the secret part of the judgment.
As the noble Lord, Lord Anderson, whom I also thank for this thorough review, points out:
“MI5’s previous non-compliance has led to it being the subject of particularly rigorous oversight by IPCO with four extraordinary inspections taking place in 2019”.
He later warns that the TechEn case is a
“salutary reminder of the principle underlying the IPA: that exceptional powers require strong and independent external oversight”.
We would do well to remember those words when we come to consider the Bill in detail. There is clear, authoritative evidence that all is not well with the compliance mechanism in the Investigatory Powers Act. Some of us predicted this during the Bill’s consideration in this House. We also called for judicial authorisation to manage the risk of these suspicionless electronic surveillance powers, which are on a scale never seen before in a democracy. Instead, the Government set up a much weaker double-lock system, and now we see the consequences. So my second and third questions for the Minister are: what are the Government’s plans to seriously improve compliance with the Investigatory Powers Act, and will they now recognise that the current supervision regime is failing and needs to be replaced with much stronger arrangements? On a related matter, my fourth question is: when will the Government introduce regulation of a highly intrusive technology that is running riot in policing and security with absolutely no rules, safeguards or oversight—namely, facial recognition?
I turn to this Bill. There are five primary concerns that will be covered in detail in future stages in this House. As has been discussed, it weakens the safeguards against the intelligence services collecting bulk datasets of personal information by potentially harvesting millions of facial images and mass social media data. The Bill’s creation of a vague and nebulous category of information where there is deemed to be a low or no reasonable expectation of privacy is a concerning departure from existing privacy law, in particular data protection law. Such an undefined category requires agencies that are motivated to process such data to adjust safeguards according to unqualified assertions about other people’s expectations of the privacy of their data. On the contrary, data protection law is constructed according to the sensitivity of the information rather than guesswork about the individual’s expectation of privacy concerning personal information. In my view, this provision needs to be worded more tightly.
It weakens safeguards when authorities harvest communications data—for example, membership of and Facebook posts to a racial equality group could be seen as data available to a section of the public as defined in this Bill, and therefore the authorities may wrongly believe that they consequently possess lawful authority to obtain associated communications data from the platform. Once again, more precise wording is needed.
Thirdly, it expressly permits the harvesting and processing of internet connection records for generalised mass surveillance, which is a much wider purpose than originally envisioned.
Fourthly, it increases the number of politicians who can authorise the surveillance of British parliamentarians and members of other domestic legislative bodies. Politicians are not above the law but, given their important constitutional role, spying on them must require the highest authority—namely, that of the Prime Minister.
Fifthly and finally, it attempts to force technology companies, including those overseas, to inform the Government of any plans to improve security or privacy measures on their platforms so that the Government can consider serving a notice to prevent such changes. I am sorry to say that the Government must be suffering from delusions of grandeur if they think that Apple, for example, will agree to desist from improving the privacy protection of its products or to produce an iPhone with downgraded privacy features especially for the UK. Superior privacy for its customers is one of Apple’s main selling features, and it is not going to forfeit that to please the current Government in a small part of its worldwide market.
We have much to discuss when this Bill reaches its Committee stage. In the meantime I look forward to hearing the Minister’s response to my four questions at the end of this debate.
Lord Evans of Weardale (CB)
Not at all.
My Lords, I do not intend to make a long speech. This Bill proposes an important but, I suggest, relatively modest updating of the existing authorisation regime for the use of surveillance powers. It is also based on the excellent and clear review undertaken by the noble Lord, Lord Anderson, who has been thanked many times already and to whom I also give my thanks. His expertise and good judgment in these areas is widely acknowledged, not least within the police and intelligence agencies themselves.
The Investigatory Powers Act 2016 was significant in that it brought the authorisation of surveillance powers into the modern, digital age. Before the 2016 Act, the legal justification for surveillance was achieved by stretching and interpreting laws from an earlier era to cope with new conditions. The 2016 Act addressed modern needs directly with an unprecedented degree of frankness about what was actually possible and necessary. The Act also recognised the highly intrusive nature of investigatory powers that were being authorised and therefore matched those intrusive powers with strong and independent oversight mechanisms.
I respectfully disagree with the right reverend Prelate the Bishop of St Albans: I do not believe the Bill vastly expands the powers of the intelligence agencies. In some areas, it introduces more controls, but it is also very careful to balance any powers with independent oversight. The noble Lord, Lord Strasburger, helpfully drew our attention to the effectiveness of independent oversight where problems have arisen, and he demonstrated that the agencies are drawing attention to areas of failure and that the oversight mechanisms are making the appropriate decisions as to what needs to be done about it. I reassure the right reverend Prelate the Bishop of St Albans that, certainly in my experience, the agencies are extremely conscious of the ethical dimension of their work. In terms of both their external relationship with oversight bodies and their internal discussions, ethical factors are strongly considered and taken seriously.
We are all aware of the speed with which data capabilities, new platforms and artificial intelligence as a whole are developing. It is important that the law should be updated from time to time to keep up with the art of the possible. Data is at least as important as interception when it comes to preventing the very real security threats that we face from causing damage. If we do not update the law, one of two things will happen: either security will be put at risk, or those using the powers will rely on an increasingly creative and elaborate interpretation of the law to keep up with a new situation. We cannot operate within old legislation; neither of those alternatives is desirable, so a new Act is needed.
The key proposals in the Bill seem to be the new regime for bulk datasets and the arrangements for bulk datasets held by third parties but to which the intelligence agencies have access. Neither of these proposals involves a significant increase of intrusion into individual privacy, and in each case, tough oversight controls remain in place. On bulk personal datasets, the 2016 Act created what, in retrospect, appears to be a rather odd situation where the intelligence agencies are not able to use completely open data—such as Wikipedia data—without quite stringent authorisation, but which any member of the public can access without permission. A police force can also access that data without restriction. Our close intelligence allies can do so too, but our own security and intelligence agencies cannot. The same constraints apply for historical or open datasets of the sort that are needed to train artificial intelligence systems to operate effectively.
I cannot think of any good reason why these constraints are needed in their current form, and they have a negative impact on the speed and flexibility with which the agencies can respond to threats. I am therefore glad to see that the Government’s proposals for a less restrictive approach to datasets where there is no or low expectation of privacy have been included. The Investigatory Powers Commissioner will continue to police the low/no boundary so that there is no risk that the less stringent regime will be misapplied or that there will be any form of mission creep. I therefore support the Government’s proposals.
On third-party datasets, the situation appears to some extent to have been reversed, in that access to sensitive data held by third parties is currently not covered by as stringent a regime. This appears to be a small loophole in the 2016 regime, and it is right that access to such datasets should be brought within the authorisation regime, as the Bill proposes. Events since the 2016 Act, including the war in Ukraine, increased state threats and political interference and recent terrible events in the Middle East all mean that the security threats that we face and from which the intelligence agencies help to protect us are at least as acute today as they were seven years ago. At the same time, the technical environment within which the agencies work has changed very fast, and it is right that we should update the legislation that enables them to succeed in their work. I therefore support the proposals in the Bill.
Baroness Bennett of Manor Castle (GP)
My Lords, I apologise to the noble Lord, Lord Evans: my enthusiasm to reinforce the contribution of the noble Lord, Lord Strasburger, who I think made many important points in this debate, got me carried away.
I am delighted to present the Green Party’s position on this Bill. I am very aware of the depth of expertise in this debate, but I reinforce the comments of the noble Lord, Lord Strasburger, in reflecting on the narrowness of the contributions and the short time your Lordships’ House has had to absorb this Bill. I note that I am the only female contributor on the speakers’ list for this debate, which is perhaps one measure of the lack of diversity of views that have been able to participate. I also note that we are talking about further strengthening the Investigatory Powers Act, which, when it was brought in in 2016, was known universally as the snoopers’ charter. Liberty described it as
“the most intrusive mass surveillance regime of any democratic country”.
Since then, a number of court cases brought by Liberty have brought in some restrictions in terms of the operations of the Act, which I very much applaud, but the Act was also subject to a petition from 130,000 people to speak out against the snoopers’ charter. Of course, the speed at which we are operating now makes it very difficult to get such level of public engagement as we saw in 2016.
We are talking about a further erosion of privacy and, as many noble Lords have said, this is a question of balance, but we are tilting the balance very clearly with these amendments to the snoopers’ charter. What is particularly worrying is that this Bill is about granting the security services access to bulk data, which will clearly be used to build what are known as artificial intelligence machine learning models. In essence, the Bill lays the foundation for the Government to use rapidly developing artificial intelligence—so-called; I prefer to call it big data wrangling—in mass surveillance. Not only does this have huge ethical ramifications, but its adoption in surveillance would be extremely irresponsible, given that we do not know how these technologies are going to evolve in future. We have talked about trying to keep up with where they are, but we are potentially opening the door to let them race ahead much further than we can currently comprehend, as we stand in the House today.
In other contexts I have drawn to your Lordships’ attention the rapid increase of privatised medical testing and the widespread advertising of it that we have seen. The noble Lord, Lord Fox, referred to genomic data. What is being assembled is a huge amount of intensely private information about individuals, and if that is then to be opened and exposed to the state on a mass, untargeted basis, that surely is cause for grave concern.
The Bill gives the Government unprecedented powers to monitor and target the entire British population and lays the foundation for use of artificial intelligence in surveillance. This is indiscriminate surveillance. Anyone can be monitored, regardless of whether they are a suspect. This is a complete assault on our right to privacy and raises a real question to ask about the Universal Declaration of Human Rights.
Coming down to some of the detail, Clauses 1 to 4 allow for the mass trawling of social media and for the Government to collect data from every person’s web use, and Clause 14 allows the Government to obtain information from companies around every person’s web use—whereas, before, they were able to look only at specific data. In addition, the potential use of artificial intelligence as part of this Bill means that the Government could in theory identify everyone who is behind every single anonymous social media account, meaning that nobody would have anonymity online.
I am well aware that many people express concerns about anonymity and the behaviour of anonymous accounts online. Here I declare my position as co-chair of the All-Party Parliamentary Group on Hong Kong. I am delighted that the UK has welcomed many exiles from Hong Kong who have sought refuge in the UK, but they remain deeply fearful about the very long arm of the Chinese state. Similarly, we have seen that many Russians have had good cause for concern about the long arm of the Russia state, which, despite the best efforts of our intelligence service, has proved itself capable of reaching within our borders. Anonymity is crucial to some people’s safety in the world. Lest we think of this as being just about states regarded as hostile by the UK Government, let us all remember the fate of Jamal Khashoggi and the actions of our friend and ally Saudi Arabia in his horrific death.
The widespread use of surveillance means that this Bill would push the UK further away from what are considered democratic norms. What is more, as a number of other speakers have already said, this blanket surveillance is not necessarily effective. There is a real risk that, the more information you collect, the harder it is to see the needles in the haystack. This Bill erases some of the checks and balances already in place.
We have seen how far this can go. Again, looking on the international stage—what China is doing to its Uighur population, what it has done in Tibet, and what is happening in Burma—these are situations where the more surveillance there is, the more issues arise. If the UK is heading in the wrong direction, what kind of model are we creating on the international stage? The UK likes to present itself as a leader, a model of democracy, speaking up for democracy in international contexts. We must not be a leader in allowing further steps towards autocracy.
I think it was the noble Lord, Lord Coaker, who spoke of how these technologies have often been used in discriminatory ways. We know that the police, certainly, have unfairly singled out people based on their identity, and that has had dangerous, damaging consequences, both in relation to the treatment of individuals and in relation to communities’ views of the police and our security services. If artificial intelligence is added into this mix, we know that there are built-in biases in the way in which the databases have been developed, and that is a real issue.
We also know—I declare an interest here—that the police and security services in the UK have made disproportionate efforts to monitor politically active individuals, trade unionists and whistleblowers. Providing the police and the security services with greater surveillance capacities means that people who are acting democratically in our society could be—in fact, almost certainly will be—subjected to further unwarranted surveillance. As a number of other noble Lords have said, the fact that Part 5 of the Bill allows further extension of the Prime Minister’s powers to approve interception and examination of MPs’ communications is a cause for grave concern.
To conclude, I will share an experience from the weekend. On Saturday, I was at a protest against the proposed new coal mine in Whitehaven in Cumbria, which is opposed by, among others in your Lordships’ House, the noble Lord, Lord Stern of Brentford. He made similar points to mine about the messages we are sending to the international community. The slogan was “No Time for a Coal Mine”. At that protest, there were 100 or so supporters, and the four of us who were speaking had all advertised this fact on social media beforehand. For nearly all the two and a half hours we were there, flying above us was what I am told was a police drone. There were at this protest of 100 people—all advertised and entirely peaceful with no plans for direct action—at least six police officers, one of whom filmed my contribution and all the other contributions. That is the experience of people peacefully protesting within the UK.
There was another story at the weekend that 15 government departments are monitoring the social media activity of potential critics and compiling files to block them from speaking at public events. This is the experience that people have of the UK state today. We have savage reductions in the right to protest; we have deeply concerning directions of travel, and the Bill is a further step in that direction.
Lord Carlile of Berriew (CB)
My Lords, stimulation comes in many forms, so I think I can say, without any disingenuousness, that it is stimulating to follow the noble Baroness, Lady Bennett. Having heard her and the noble Lord, Lord Strasburger, I feel that I should start with a bit of my own experience, that of dealing with those extraordinary and usually highly intelligent people who work in the various security services. It is outrageous to assume that they would look into an individual’s credit card transactions or anything like that in the way that has been implied by at least two speeches that we have heard. I believe—indeed, I know—that their contributions have been key to the introduction of this Bill and that they have done it with intellectual integrity and with only one thing in their mind: the interests of their country, in which they live. Listening to the noble Baroness, I have a fear that she and I, at least in our minds, live in completely different countries.
The noble Lord, Lord Strasburger, expressed some extraordinary conspiracy theories which just do not exist and which, in my judgment, are—I hesitate to use the word, but I will—misleading. Both the speakers to whom I have referred have been on a safari into irrelevant issues which are not pertinent to the reality of what we are discussing. In the years since 9/11, the date on which I became the Independent Reviewer of Terrorism Legislation—to be succeeded some years later by the brilliance of the noble Lord, Lord Anderson of Ipswich—various Governments all over the world have been challenged repeatedly by both evolving change and unexpected events affecting the terrorist threat landscape.
I suggest that the amount of legislation we have had since 9/11 has reached the point at which the Government should give consideration to a consolidation Bill, a codification in which all counterterrorism, interception and counterextremism legislation is included so that we have a living instrument to which lawyers, police officers, the security services and, of course, parliamentarians concerned can refer—a single place in which all this legislation is kept. This Bill is an example in some parts of the way in which extra legislation is being added piecemeal, although it is fair to say that legislation.gov.uk at least tries to include in Bills, if looked up online, the additional parts that have been created. It really is a time for codification, and the template for that is the Sentencing Code, which was created by Professor Ormerod when he was at the Law Commission.
I used the phrase “terrorism threat landscape” deliberately. Terrorism and related forms of extremism have morphed into one of the major and enduring geopolitical issues. It started with the word “terrorism”, but, since 9/11, these issues have become part of the defence and national security policies in every single country, including our own. It was a surprise when national security originally appeared as part of the defence strategy, but it is now completely established in that context.
Attempts to disrupt the stability of sovereign Governments, sovereign Governments themselves disrupting other Governments and the rise of new international factions are all matters that affect our debate; we have to understand the context of what we are considering. I thank the Minister for ensuring that your Lordships have been fully informed and have been given plenty of time; this has been a matter of discussion for a long time. My noble friend Lord Anderson reported some time ago on the background and primary considerations behind the Bill; I too add my special thanks to him for his excellent, detailed report, which is the foundation of the Bill.
Let us consider the context. The first responsibility of our Government is to keep their citizens safe and free to go about their legitimate business and interests. When we go to a concert, as in Manchester, for example, or to a shopping centre, again, as in Manchester, or come and go to this Parliament, along the streets outside without disturbance, which has not been everyone’s experience in recent days, we should be kept as free and safe from the terrorism threat as is possible within the legitimate constraints we set ourselves as a free society. That does not mean that we should resile for one minute from what we rightly regard as fundamental freedoms, but how fundamental those freedoms are is open to argument based on the assessment of proportionality that was mentioned earlier.
In that context—specifically in connection with bulk data, a major part of the Bill—we need to be realistic. In the years since some of us first handled house brick-sized mobile telephones that slotted into racks in our cars—at the time, I was a Member of the other place—we have ourselves given away, to a wide audience, private matters that, in the past, were closely protected. When we—the middle-aged and older men here, for example—buy clothes online, we give away details of our anatomy, including our shoe and waist sizes. That the security services have any interest in that sort of thing is a myth, but we have given away a huge amount of our information. To allow the state to use that information to catch terrorists seems to me to be a reasonable balance, if that use is circumscribed by the high level of judicial protection that the Bill provides and, in some respects, enhances.
When we speak about bulk data, we should bear in the mind the donation we have made of information, sometimes our most intimate details, and we should reflect on the public interest in allowing the authorities, subject to the protections built into the Bill, to use that bulk data—even the meta data that tells them when we made our calls and to whom, and from whom, they have occurred—to carry out their prime duty to protect the public. Maybe, from time to time, there will be people whose information has been mistakenly or improperly prepared, but they are provided, in this country and in this Bill, with greater legal protections than in any other country that I know.
This is an appropriate and good Bill. The Committee should not be distracted by mythology; it should seek to make the Bill better—but within its existing context.
Baroness Manningham-Buller (CB)
Will your Lordships allow me to speak in the gap? I had not intended to speak in this debate because I knew that my noble friend Lord Evans is more up to date than me. I think my noble friend Lord Anderson has had enough praise already, but I shall add a bit. I promote the noble Baroness, Lady Bennett, because nobody else of her gender was going to speak in this debate. I shall make a few comments on the things that have been said. The noble Lord, Lord Murphy, talked about the balance between liberty and security. Of course that is an issue, but there is no liberty without security. Without making sure that our electoral proceedings, our secrets and our citizens, whether shopping or going on the Tube, have safety in their lives, there is no real liberty. I think sometimes it is an artificial distinction.
I noticed that my noble friend Lord Evans and my successor but one, Ken McCallum, the current head of MI5, gave a public speech in California recently at the Five Eyes conference—a first—and it was reported. There were three things he talked about as really at the top of his concerns: first, whether arising out of the tragic events in the Middle East there would be a resurgence of terrorism in that area; secondly, cyber; and thirdly, the threat to our democracy, including our electoral process, from various states. It is not an accident that the law governing the Security Service emphasises that it is there to protect parliamentary democracy. I find quite strange the idea that it is a threat to it.
I would also like to, I am afraid, dismiss as ignorant the spurious argument that having too much information means that you do not find the people you should have found. As my noble friend has said, you can know of people in this country, and MI5 will know some about whom it has significant concerns, but it does not know what they will do. It is also constrained, rightly so, by the law, and cannot suggest to the police that they arrest people unless there is a good case to do so, any more than it can mount intrusive surveillance unless there is a good case to do so.
The final point I would make in endorsing again what my noble friend has said is that my colleagues in the service and in the other agencies were very conscious that the law gives us powers that are not given to the normal citizen. The Murdoch press occasionally took them with the interception of phones, but they are not given to the normal citizen. They are given to the agencies and the police within the law. Precisely because they are not normal abilities to intrude into people’s privacy, that work has to be done with great care to the highest ethical standards and only when proportionate and necessary. Excuse me for delaying the conclusion of this important debate, but I did not think I could sit patiently and not make those remarks.
Lord Ponsonby of Shulbrede (Lab)
My Lords, I think the whole House will be grateful for the noble Baroness’s intervention speaking in the gap. I thank the Minister for facilitating the briefings which we have had and will have in the coming days on the Bill.
The Bill makes changes to the 2016 Act, as we have heard. The 2016 Act provides a framework for the use of investigatory powers by the security and intelligence agencies, law enforcement and other public authorities. They include the power to obtain and retain communications. It also created the post of Investigatory Powers Commissioner and includes a number of safeguards for the use of such investigatory powers, including a two-stage procedure for obtaining authorisations. Many of the powers in the 2016 Act were pre-existing, as we have heard, and already being used by intelligence and law enforcement agencies. The Government stated that one of the intentions behind introducing the 2016 Act was to bring together and build on the statutory powers already available. The Government explained that the Act was also required to replace emergency legislation passed in 2014, the Data Retention and Investigatory Powers Act, which was subject to a sunset clause.
I agreed with the point made by the noble Lord, Lord Carlile, about the desirability of developing some sort of living instrument and a consolidation Bill to try to bring these pieces of legislation together.
The Bill before us proposes changes which include the creation of a new condition for the use of internet connection records to aid target detection, introducing a less stringent regulatory regime for the retention and examination of bulk personal datasets where individuals have little or no expectation of privacy, and a new notification requirement that can be issued to selected telecommunications operators, requiring them to inform the Government of proposed changes to their products and services that could negatively impact the current ability of agencies to lawfully access data.
I was going to say something about the contributions of the noble Lord, Lord Anderson, to the review of this legislation. My understanding is that all the noble Lord’s recommendations have been accepted by the Government, and I too express the Opposition Front Bench’s gratitude for the work he has done on this.
The Bill is a relatively short Bill of six parts, 31 clauses, and two schedules. I was going to step through its various elements, but I will not do that because it has been adequately covered by speakers earlier in this debate.
Like other noble Lords, I have received emails from industry and advocacy groups raising concerns about the Bill. On 7 November, a Financial Times piece reported that firms, including Apple and Meta, have signalled that they may withdraw from the UK market if they can no longer offer end-to-end encryption to their customers. I will quote from the concluding paragraph of a letter I received from Apple:
“The Home Office’s proposals to expand the IPA’s extraterritorial reach and to grant itself the power to pre-clear and block emerging security technologies constitute a serious and direct threat to data security and information privacy. To ensure that individuals have the tools to respond to the ever-increasing threats to information security, the Home Office’s proposal should be rejected”.
The piece, which I am sure we all received, then went on to explain their concerns about providing what they refer to as a back door into end-to-end encryption, and how that undermines the firms’ business model and the security of many other groups operating elsewhere in the world. It is right that we take the points raised by these commercial providers seriously, and maybe we will address them as the Bill progresses.
Similarly, online privacy advocacy groups such as Open Rights Group and Big Brother Watch have expressed their concerns, and we have heard from the noble Lord, Lord Strasburger, and the noble Baroness, Lady Bennett, today. It is worth saying that I agreed with every word of the noble Lord, Lord Carlile, when he said that he and I live in a different country from that spoken about by the noble Lord and the noble Baroness. We need to consider the concerns being addressed in the Bill, but also the wider context that other countries and other very large companies have access to bulk datasets—maybe not our bulk datasets—and are using that data in ways that we need to understand and pre-empt, if they are working against our national interest.
I conclude by talking about my own experience as an engineer, which is relevant to the debate we have just had. It used to be my working life to deal with very large datasets, make predictions based on them, and inform management about those predictions. One of my experiences was that it is very easy to mislead oneself because one is analysing large amounts of data. One needs to be realistic and at the same time see the possibilities of these extremely large datasets. It is a huge challenge. Huge amounts of data are used just to process them, and the maths and the imagination behind it is developing as we speak. The Bill in front of us now is a relatively modest step in the road, and we need to keep reviewing the processes available to us and reviewing the legislation to try to underpin them.
Lord Sharpe of Epsom (Con)
My Lords, I thank all noble Lords who have spoken. There have been many expert and valuable contributions to today’s debate. I particularly thank the noble Lords, Lord Coaker, Lord Ponsonby and Lord Fox, for their broad and very constructive support for the Bill. Obviously, I very much thank—again—the noble Lord, Lord Anderson, for his work. I also thank the noble Lords, Lord Murphy and Lord Evans, and particularly the noble Lord, Lord Carlile, who I thought was very eloquent, for their contributions. I thank the noble Baroness, Lady Bennett, for provoking the noble Baroness, Lady Manningham-Buller—a thing I am always very reluctant to do.
The support was more qualified from the right reverend Prelate the Bishop of St Albans, but I hope to assuage his concerns in my remarks and will certainly endeavour to deal with some of the concerns of the noble Lord, Lord Strasburger, who asked whether we were trying to avoid detailed scrutiny. The answer is: absolutely not. The Bill was ready, having followed the detailed and expert scrutiny of the noble Lord, Lord Anderson—as noted by the noble Lord, Lord Carlile—and, of course, we could not pre-empt what might be in the King’s Speech. In the case of this Bill, parliamentary time currently allows. We have engaged extremely extensively and, frankly, the country needs it. That is a very compelling set of circumstances behind introducing the Bill now.
I feel I ought to take issue with the fact that the noble Lord, Lord Strasburger, said that the country, or all countries, “need a Snowden” occasionally. As I understand it, it has been alleged that people died because of the activities of Snowden, so I am not sure that that is a generally fair point.
I will deal with the questions raised in as much detail as I can in the time available and will start with bulk personal datasets and, in particular, privacy. I thought the noble Lord, Lord Carlile, gave an excellent speech on this subject, but obviously there are concerns so let me do my best to assuage them. The Bill creates a new regime for the retention and examination of bulk personal datasets where there is a low or no reasonable expectation of privacy. The nature of these datasets means that individuals to whom the data relates would have low or no reasonable expectation of privacy in relation to the datasets so, for example, an individual may have consented to the data being made public or the data has already been manifestly made public by the individual. That includes categories of datasets such as public and official records, news articles, content derived from online video-sharing platforms, and publicly available information about public bodies.
For example, a dataset that is likely to meet the test of having no or only a low expectation of privacy is the Companies House register, a government register of company information that is open to the public to search online and download. I have noted the recommendation of Big Brother Watch and I read it in some detail. I think it is based on a misunderstanding but perhaps it is worth going back into the reason why we are making these changes now. The way the existing regime was designed did not foresee the exponential increase in the use of, complexity of and changing nature of data. The scale and different kinds of data that are now available is unrecognisable in comparison to the picture in 2016. It did not foresee the extent to which cloud and commercially available tools would make analysis of datasets possible, the extent to which publicly available data would increase in value for the intelligence agencies compared to sensitive data which used to be obtained through traditional covert powers, and the extent to which intelligence agencies would need vast quantities of publicly available data to train machine learning models.
The intelligence agencies have been inhibited from maximising opportunities when compared with the private sector and academia, as well as our adversaries, as a result of the gold-plating of some of the Part 7 regime. It is important to note that the datasets would not necessarily be authorised under the new regime in Part 7A solely by virtue of their being publicly or commercially available, and that is particularly important when considering datasets which have been hacked and/or leaked.
On the subject of safeguards, there are of course safeguards in place to prevent misuse of the powers in the Bill. The safeguards that will apply to bulk personal datasets with low or no expectation of privacy will be calibrated to reflect the intrusion that is likely to arise from their retention and examination, ensuring that the rights of the individuals to whom the data relates is adequately protected while also enabling the intelligence services to make more effective use of these datasets. This will include requiring prior judicial authorisation on whether a category of datasets or an individual dataset can be considered to meet the test for authorisation under the new Part 7A regime; that is, that they meet the test for low or no expectation of privacy.
In answer to the noble Lord, Lord Fox, the Bill creates an obligation on the head of an intelligence service to stop any activity that relies on any data discovered in a BPD where the low or no reasonable expectation of privacy assessment no longer applies. The safeguards are being recalibrated to ensure that the regime better reflects the threats and opportunities of the modern world, but they remain robust, with the important protection of judicial approval at their heart.
Internet connection records were referred to by the noble Lords, Lord Coaker and Lord Strasburger, among others. They asked why there are no specified time limits for the period that internet connection records can be sought under the new condition. The driver for this change is to enable the intelligence services and the National Crime Agency alone—I will come back to the National Crime Agency—to carry out target detection to identify previously unknown high-harm offenders. The current requirement for unequivocal knowledge of the time a service is accessed, which service is accessed, or the identity of a person, before an internet connection record can be sought is preventing this from happening. So, it is important we do not create similar conditions under this proposal which will continue to restrict this critical investigative work.
These investigations will be targeted and case-specific, so it is not possible to include a time limit which could work across the range of investigations being undertaken. However, I can reassure noble Lords that requests will be time-bound based on the specifics of the case and they will be driven by intelligence, not used as speculative fishing exercises. Furthermore, the new condition is also limited in terms of the purposes it can be utilised for. It can, and I stress this, be used only for national security and serious crime purposes. It is important to note that there are several other safeguards in place, including a requirement for the request to be both necessary and proportionate. A request that sought records over a very long period of time is highly likely to be neither necessary nor proportionate, and all ICR requests are subject to independent ex post facto oversight. All ICR requests are valid for only one month and an application must be renewed at the end of that period.
The noble Lord, Lord Coaker, asked why this is being extended to the NCA. I recognise that the noble Lord, Lord Anderson, initially proposed that the new condition should extend only to the intelligence services, although I understand that he now sees value in it being extended to the NCA because the NCA plays a vital role in protecting children from sexual exploitation and abuse, so it is essential that it has all the tools at its disposal to counter that particular threat.
The noble Lord, Lord Fox, asked about roaming data, and in particular subjects of interest using a foreign SIM card. On that example, in the circumstances where a subject of interest was using a SIM card obtained in a third country and was therefore using international roaming while in the UK, under the proposed amendments an exception for this data will be made, allowing UK telecoms operators to retain it under a retention notice which has been double locked. This will then allow operational partners with the appropriate authorisation to access the retained data when necessary for the purpose of prevention and detection of crime and, again, protecting national security.
On the subject of the notices reforms and the tech companies, which I think most noble Lords referred to, some tech companies have expressed concerns in public fora in advance of the Bill’s publication that these measures may place onerous or burdensome obligations on an operator, could undermine security or could allow the Secretary of State to prevent technical or relevant changes. I assure all noble Lords that these concerns are misplaced. The Bill does not introduce significant changes to the existing powers, ban end-to-end encryption or introduce a veto power for the Secretary of State regarding the rollout of new technologies and security measures by companies, contrary to what some tech companies have incorrectly speculated. Rather, we are making a series of adjustments to ensure that the notices regime continues to be effective in the face of modern technologies and the structures of companies in the modern digital economy.
None of the measures in the Bill seeks to reduce the competitiveness of UK tech firms, or indeed to discourage innovation. Careful consideration has been given with regard to these measures, striking a balance to ensure that the law enables us to mitigate the risks posed by changing technology, while still promoting technological innovation and the legitimate interest in increased privacy of the majority of our citizens.
These measures do not create any new acquisition powers but will maintain the efficacy of long-standing powers. We therefore do not anticipate that they will put disproportionate burdens on businesses. Rather, they formalise processes that are already in place.
The Government support technological innovation and advances and have always been clear that we support strong end-to-end encryption, as long as it does not come at a cost to public safety. Together with our international partners, we believe that tech companies have a moral duty to ensure that they are not blindfolding themselves and law enforcement to abhorrent crimes such as child abuse and terrorism on their platforms. These amendments will not introduce significant changes to the existing powers, ban end-to-end encryption or introduce a veto power for the Secretary of State regarding the rollout of new technologies and security measures.
On a question asked of me by the noble Lord, Lord Fox, with regard to notices and the pre-clearance requirement, these amendments do not introduce a requirement for pre-clearance for the Secretary of State regarding the rollout of new technologies and security measures by companies. Fundamentally, the changes to the notice regime are about ensuring that the decisions on public safety are made by Ministers and are subject to judicial oversight as Parliament intended and as the public would expect, to keep them safe.
On the triple lock, noble Lords—in particular the noble Lords, Lord Coaker and Lord Murphy—asked for clarification as to whether the Prime Minister could delegate an authorisation requiring the triple lock to anyone they wanted to. I can reassure noble Lords that that is not the case. The Bill proposes that the Prime Minister will designate in advance a group of Secretaries of State who could authorise the warrant on his or her behalf. The alternative approver would need to be a Secretary of State and not the same Secretary of State who authorised the warrant at the earlier stage of the triple lock. I hope that provides the necessary reassurance on the restrictions that will be in place under this clause. Restricting the decision on suitable deputies is for the Prime Minister to decide, but it is clear that there needs to be sufficient resilience in the system to ensure that there are enough alternative approvers with the necessary experience.
The noble Lord, Lord Coaker, also asked me about ISC oversight and parliamentary oversight. He will be aware that the Intelligence and Security Committee examines the policies, expenditure, administration and operations of the UK intelligence community, and sets its own agenda and work programme. Obviously, it will maintain that oversight function for the measures in the Bill, but I can tell the noble Lord that the Security Minister will spend some time with him on the subject of the Bill next week, which I hope will assuage any concerns.
I need to go into the subject of safeguards in more detail in light of the speeches given by the noble Lord, Lord Strasburger, the noble Baroness, Lady Bennett, and the right reverend Prelate the Bishop of St Albans. I assure noble Lords that the measures contained in the Bill, and in the IPA, are underpinned by a robust and world-leading safeguards regime. They are not failing.
Numerous safeguards exist to prevent the misuse of investigatory powers, ensuring that they are used in accordance with the law and in the public interest. The Bill contains measures that will introduce new safeguards and improve the resilience of the Investigatory Powers Commissioner. We are improving oversight and increasing safeguards to ensure that powers in the IPA are not misused.
Strong safeguards are already in place to ensure that investigatory powers are used in a necessary and proportionate way. That includes independent oversight by the Investigatory Powers Commissioner’s Office and a right of redress through the Investigatory Powers Tribunal.
The powers can be used only for the statutory purposes set out in the Act, including in connection with the most serious crimes and national security. We are also taking the opportunity to strengthen safeguards in other parts of the regime—for example, by creating a new statutory oversight regime for the intelligence agencies’ access to datasets held by third parties rather than retained by the agencies themselves.
On the subject of retention, the noble Lord, Lord Strasburger, talked about data being held indefinitely. However, retention of data is subject to stringent safeguards under the IPA. It can be retained only provided it is necessary and proportionate, and it is not authorised indefinitely. This is regularly reviewed, and records of holdings are subject to inspection by the Investigatory Powers Commissioner’s Office.
The noble Lord, Lord Strasburger, also referenced the recent TechEn judgment. The investigations carried out by the Investigatory Powers Commissioner and his team in response to TechEn are evidence that the oversight, transparency and safeguarding arrangements provided for in the IPA are working as they should. In the Liberty judgment of 2019, the High Court found that
“The safeguards contained within that Act are capable of preventing abuse”.
While the TechEn case outlined widespread corporate failings between the Home Office and MI5, these issues are historic and the Home Office has taken steps internally to increase collaboration with MI5 and ensure that there is appropriate resourcing in place within the relevant Home Office teams responsible for investigatory powers.
I also wish to be clear that there has been no finding by the tribunal that MI5 misused the data in question nor any suggestion of this at any time during this process. As the then Home Secretary, Sajid Javid, noted in 2019,
“none of the risks identified relate in any way to the conduct and integrity of the staff of MI5”.—[Official Report, Commons, 9/5/19; col. 30WS.].
Finally, I reference the endorsement that the tribunal has provided on the robustness of the oversight regime and safeguards contained within the IPA, including the adequacy of the measures available to the Investigatory Powers Commissioner. TechEn does not, therefore, suggest that the system is fundamentally flawed but shows that it works as intended when non-compliance occurs.
Many noble Lords have made important points about balance in this debate, particularly regarding privacy. I particularly note the noble Baroness, Lady Manningham-Buller, whose comments were spot on. It is fair to express concern about the impact that the Bill will have. Privacy is at the heart of the IPA, and this will remain the case under this Bill. The IPA contains robust, transparent and world-leading safeguards centred around considerations of intrusion into privacy. This includes a requirement for investigatory powers to be used in a necessary and proportionate way, with independent oversight by the Investigatory Powers Commissioner and redress through the Investigatory Powers Tribunal. The Bill builds upon these already world-leading safeguards, further strengthening the oversight regime, as I have just outlined. I also note that in 2018, the then UN special rapporteur on the right to privacy noted that the introduction of the IPA allowed the UK to claim a global leadership role in the protection of civil liberties. I note that this was not referenced by the noble Lord, Lord Strasburger, but I am sure that he would like to read that notification.
The noble Lord, Lord Carlile, made some very good points about codification of the various laws in this space. I defer to his extensive knowledge. I will also ensure that his thoughtful remarks are noted in the appropriate parts of government. Obviously there is very little that I can comment on regarding this now, however.
I have endeavoured to address the contributions made by noble Lords today. I apologise if I have missed any questions that were asked of me. I will scour the record and write if that is the case. I express my commitment to further engagement with noble Lords. I look forward to further discussions as the Bill continues its passage, as we seek to ensure it achieves the crucial objective of making our country and our citizens safer. For now, I commend this Bill to the House.
Lord Sharpe of Epsom
That the Bill be committed to a Committee of the Whole House, and that it be an instruction to the Committee of the Whole House that they consider the Bill in the following order:
Clauses 1 to 13, The Schedule, Clauses 14 to 31, Title.