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Grand Committee

Tuesday 13th February 2024

(4 months ago)

Grand Committee
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Tuesday 13 February 2024

Arrangement of Business

Tuesday 13th February 2024

(4 months ago)

Grand Committee
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Announcement
16:15
Lord Ashton of Hyde Portrait The Deputy Chairman of Committees (Lord Ashton of Hyde) (Con)
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Good afternoon, my Lords. If there is a Division in the Chamber while we are sitting, this Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.

Occupational Pension Schemes (Collective Money Purchase Schemes) (Amendment) Regulations 2023

Tuesday 13th February 2024

(4 months ago)

Grand Committee
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Considered in Grand Committee
16:15
Moved by
Viscount Younger of Leckie Portrait Viscount Younger of Leckie
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That the Grand Committee do consider the Occupational Pension Schemes (Collective Money Purchase Schemes) (Amendment) Regulations 2023.

Viscount Younger of Leckie Portrait The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)
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My Lords, I am pleased to introduce this instrument. Subject to your Lordships’ approval, these regulations will make two small technical amendments to the landmark Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations 2022 to ensure that they operate in accordance with our published policy. The instrument clarifies requirements on trustees of authorised collective money purchase schemes, more commonly known as collective defined contribution, or CDC, schemes.

I will first set out the context. The Pension Schemes Act 2021 provided the statutory framework for CDC schemes in the UK. The guiding principle of our approach has been to ensure that it protects the interests of members. The Government believe that CDC schemes have an integral role in the future of pensions in this country. CDC schemes offer members a seamless transition from saving to receiving a regular retirement income.

We know that many people do not want, or feel ill equipped, to make complex financial decisions at retirement. The Government want to ensure that as many savers as possible can take advantage of the numerous benefits of CDC. By pooling longevity and investment risk across the membership, CDC schemes can shield savers from much of the uncertainty faced by members of DC schemes. This also allows the scheme actively to target higher investment returns for their members than a DC scheme through increased investment in growth-seeking assets. This in turn can lead directly to greater investment in vital UK infrastructure and the technologies of the future, such as transport and renewable energy. That is why the Government have provided the legislative framework for single or connected employer CDC schemes to be set up in the UK. The CDC regulations came into force on 1 August 2022.

Throughout the development of our policy, the Government have been engaging with stakeholders on how best to deliver CDC schemes in the UK and inviting challenge and scrutiny. In that vein, we have been helpfully advised that two areas of the current framework do not meet our published policy intent. CDC schemes can succeed only if there is confidence in this new type of provision. That is why it is important that we provide immediate clarity. This instrument ensures that, from the start, prospective schemes are set up to work as we intend.

I will now take noble Lords into the detail of this instrument. With regards to the first amendment, the existing regulations make provision in relation to the annual actuarial valuation and benefit adjustment process for CDC schemes. This means that each year benefits are reviewed and adjusted where required so that the value of assets held is in balance with the projected costs of benefits. This protects members from the need to fund a surplus and means that reductions to benefits are not deferred and stored up. Doing so would have a detrimental impact on future years and younger members, which would be unfair. It is important that CDC schemes follow strict rules around benefit adjustment to ensure that all members, without bias or favour, are subject to the same adjustments.

It is important that a balance is maintained between the value of the available assets of the scheme and the amount needed to provide the target benefits to members on an ongoing basis. If, for example, the value of the assets is lower than the amount needed to pay the benefits, the scheme may be required to make a cut to benefits to regain that balance. Conversely, if the value of the assets is more than the amount needed to pay the benefits, the trustees will be required to pay an increase to the members.

The policy intention is to provide that, where a cut to benefits must be made, the trustees of the CDC scheme can smooth the impact of the cut on members over three years. This is called a multiannual reduction. Regulation 17 currently provides that, if a subsequent annual valuation that occurs during a multiannual reduction shows that an increase in benefits is required, the trustees, having taken advice from the scheme actuary, will be required to apply that increase in addition to the planned reduction for that year under the multiannual reduction that is in effect.

I appreciate that this is quite complex, so let me provide an example of how it is intended to work in practice. In a period of extreme economic downturn where equities fall significantly in value, it is possible that a CDC scheme would have to make a cut to members’ benefits. Regulation 17 enables the trustees of the scheme to mitigate the impact of this market volatility on member benefits by spreading the overall cut over three years. To use an easy example, if the overall cut necessary were 6%—my maths is not too good, but here we go—the members’ benefits could be cut by 2% a year over the three-year period.

This mechanism helps to reduce volatility and ensures that current and future benefits remain relatively stable. It contrasts with individual DC schemes, where there is no pension-smoothing mechanism. Members of these schemes would have experienced a significant reduction in the value of their retirement savings immediately, which for savers closer to retirement may be unrecoverable. The intention of Regulation 17 was that, where a market recovered during the period of such a reduction, increases in benefits resulting from subsequent annual valuation would offset, in whole or in part, planned cuts under a multiyear adjustment before being applied as an increase to future benefits in the normal way. This would have the benefit that any bounce-back immediately after a period of very poor performance could help to smooth outcomes and avoid cuts, which would then be unnecessary, while maintaining the principle that the costs of current and future benefits remain in balance with the value of scheme assets.

If we did not do this, the benefit of the recovery would instead be likely to go to future pensioners. This would run against our principle that, as far as possible, all members—current pensioners, those who are currently accruing benefits and those who are not contributing but have rights to a future pension from the scheme—should all share in upsides and downsides at the same time.

The instrument also makes a consequential change to Regulation 19. Any variation to a multiannual reduction as a result of offsetting an increase against must be reported to the Pensions Regulator, ensuring proper oversight.

I turn to the second of these amendments, which addresses an issue that may arise where a scheme winds up and the value of members’ accrued rights are transferred to suitable pension schemes or alternative payment arrangements. A key element of the wind-up process is calculating the share of the fund for each person who is a beneficiary at that time. The scheme rules may provide that the person may be a member or a successor of that member. Potential successors will be determined by the scheme rules, but could include a spouse, a child, a cohabitant or a person financially dependent on the deceased beneficiary. That share of the fund is applied to the scheme’s assets at the end of the winding-up to produce the beneficiary’s pot, which is then used to discharge the scheme’s obligations to the member by transfer to another scheme offering flexi-access income drawdown.

I ask noble Lords to imagine a scheme that has provided for these categories of people to be a beneficiary under its rules. If a member of that scheme dies during the winding-up process, their benefits are reallocated to the deceased’s stipulated beneficiary. They are not reallocated among the collective. The policy intention has always been that, if the beneficiary dies during the winding-up period, the pot allocated to them would not be extinguished but would instead be reallocated among their successors, where a scheme’s rules provide for that. This instrument therefore amends Schedule 6 to the regulations to ensure that the deceased member’s accrued rights in wind-up may be discharged in this way.

In conclusion, CDC schemes are an important addition to the UK pensions landscape and, when well designed and run, have the potential to provide a good retirement outcome for members. The effect of this instrument will be to provide clarity for schemes moving forward by more accurately reflecting the intent of the regulations that it is amending. I commend it to the Committee and beg to move.

Lord Palmer of Childs Hill Portrait Lord Palmer of Childs Hill (LD)
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My Lords, I thank the noble Viscount for his clarification of the papers, which is very welcome—as usual. This is a statutory instrument with a more than usually snappy title, which will probably be more noted than some of the things in the instrument.

This statutory instrument is good news. It helps pave the way, as I understand it, for the introduction of the UK’s first collective defined contribution pension scheme, which I believe is by the Royal Mail. Collective defined contribution schemes in various forms are common in Scandinavia, the Netherlands and Canada. Work on these risk-pooling arrangements started during the coalition years when we, the Liberal Democrats, worked collaboratively with the Labour Front Bench and the Communication Workers Union to get the Royal Mail to implement the first scheme of this sort. I believe that it has not yet gone live, although perhaps the noble Viscount can tell me more about that.

The next developments of CDC, in my view, are, first, the extension of multi-employer or industry-wide CDC—when does the Minister expect to publish the next consultation on this?—and, secondly, the development of retirement-only or decumulation-only CDC schemes, so that a person could take his or her own pot and pool it with other people’s. Any comments on that would be gratefully received.

These regulations tidy up some issues that are causing practical problems. The main part is to do with what happens each year, as the noble Viscount said, when a scheme reviews whether it has enough money to meet its target pension payouts. As things stand, if the scheme is short, it can reduce planned pensions. But what happens if, a year later, it thinks that things are better? What these regulations appear to make clear is that the first thing you do is reduce or eliminate the planned pensions cuts. I think this was covered by the Minister’s comment about “a smoothing mechanism”.

One thing that comes out of this SI is that, as so often, there seems to be a lot more valuation work for actuaries. I am sure they will be very grateful. I am very grateful for the guidance in the papers and the elucidation from the Minister. I think the principles are right and we on these Benches agree with the instrument.

Baroness Drake Portrait Baroness Drake (Lab)
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I thank the Minister for setting out the intent of these regulations so clearly and for arranging a briefing session with DWP officials engaged with CDC, who also provided a very helpful briefing document. It probably has reduced the number of questions that my noble friend and I have—although I suspect the Minister will take very little comfort from that observation.

The regulations amend the Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations 2022, in two key ways. In the first instance, they amend how reductions to members’ benefits in a CDC scheme can be smoothed following a fall in the value of assets held. Given the Government’s opposition to any buffer fund in a collective DC scheme to manage volatility and assets, intergenerational fairness or cuts in benefits, clarity on how the legally permitted smoothing mechanisms operate is indeed important.

16:30
The 2022 regulations require benefits in a CDC scheme to be adjusted annually, including cuts, to keep that value of assets held and the projected costs of benefits in balance, and there are strict rules on annual benefit adjustment to ensure that all members, including pensioners, are subject to those adjustments. These regulations are inevitably complicated. Where a large cut to benefits is required due to falls in the value of the assets held, those cuts can be smoothed over a maximum of three years via the multiannual reduction provision. Indeed, there can be more than one multiannual reduction in place, given that valuations are required annually and asset values can continue to fall.
The government intention, which we all understood, was that where there was a bounce-back of asset values during a period of benefit reduction, then, subject to that annual valuation, the bounce-back in value could be offset against those benefit cuts. But clearly, the problem is that the wording of the 2022 regulations does not accurately allow for such an offset and these regulations will, which is welcome. These regulations also seek to clarify—I have some questions—how offsetting would work where there is more than one multiannual reduction in place. One could easily anticipate that, in a period of economic downturn or economic crisis, you could have two, or even three or more, multiannual reductions in place.
I will ask the Minister three questions so that I or the reader can clearly understand the regulations. First, is there any actuarial threshold on the level of benefit cuts required to keep assets and benefits in balance before the full three years are allowed for a multiannual reduction being deployed? Is there a trigger? Is there a level of cut before the whole three years can be taken?
Secondly, Regulation 3(5) states, with complicated wording:
“Any offsetting increase … applied to the remaining years of”
one or more multiannual reductions
“must not be greater than the total reduction … in the previous year of the multi-annual … reductions”.
In simple terms, what does that mean for the front-ending or back-ending of any offset over the remaining years of any multiannual reduction in place? Front or back-ending could have quite a significance.
Thirdly, if a member transfers out their benefits before the full multiannual reductions are made or the offsets from bounce-back have been applied, how will that be captured in the calculation of their transfer value? One of the challenges under CDC is how one calculates transfer values fairly for people exiting the scheme.
I will make specific reference to the Royal Mail CDC scheme, which is the only one that has been signed off by the regulator, although it has not yet been implemented. In my mind it triggered a series of questions which I should like to put to the Minister. This is what prompted the questions. Under the Royal Mail scheme, are there any qualifying thresholds of either income or length of service—for example, one year of working for the company—before a worker in Royal Mail will be eligible to join the CDC scheme, and if such a qualifying threshold applies to workers who are otherwise eligible for auto-enrolment, which scheme will Royal Mail auto-enrol them into? That is not unique; other employers use that concept, referred to as a “nursery scheme”, before people join the bigger company scheme. However, when a Royal Mail worker reaches the qualifying threshold, will they be auto-enrolled into the CDC scheme, with their contributions to the nursery scheme ceasing, or must they individually opt into the CDC scheme?
If it is the latter and the onus is on them—that is, to get into the CDC scheme and out of the nursery scheme, they have to opt into it—future new Royal Mail workers will never be auto-enrolled into the CDC scheme. It will always be an opt-in situation, which is of course quite contrary to the thrust of public policy. These questions are relevant to any employer-supported CDC scheme that is accompanied by a nursery scheme for new workers.
These regulations amend Schedule 6 to the 2022 regulations, which are particular concerned with protecting members where a CDC scheme is wound up. However, the 2022 regulations make no reference to allowing the value of accrued rights for dependants, nominees or successors to be transferred into their choice of flexi-access draw-down fund—their pot, where the money is put—so that they can access it directly. It refers only to transfers to the member’s flexi-access fund. Obviously, the amendment to Schedule 6 to the 2022 regulations—captured in these regulations—corrects that and allows for such transfers. Can a dependant or nominee ask for such a transfer to their own choice of flexi-access draw-down fund before the wind-up is completed or validated, particularly if the dependant has an urgent financial need? From my human experience of dealing with these situations, that occurs quite frequently. If so, what does that mean for the calculated value of the benefits transferred? I am sorry if these questions are all rather dry but they concern the kinds of issues that regularly come up when one is trying to run a pension scheme.
Finally, the Minister referred to CDC schemes being integral to the UK’s private pension system but the proposition is rather stuck on the runway. I have just one observation but it is one that worries me: the department seems to be more preoccupied with individual member active engagement, although the evidence is heavily against it in terms of that producing good outcomes at scale, rather than effective collective or default solutions. I wonder whether the department’s strategic focus is necessarily delivering the collective or default solutions that we would like to see.
Baroness Sherlock Portrait Baroness Sherlock (Lab)
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I thank the Minister for introducing these regulations so clearly; I also thank all noble Lords who have spoken. I agree with my noble friend Lady Drake; she need never worry about her questions being dry. When it comes to pensions, dry is good. Dry is where the detail is and, with pensions, detail is everything. I am grateful to the officials for providing some excellent briefing and for answering questions from us. It may not reduce the number of our questions but I hope that it makes them better questions, so that we are at least debating the right things here in Grand Committee.

As we have heard, the purpose of this instrument is to make technical amendments to the 2022 regulations and do, in essence, two things: clarify the provisions governing how reductions to member benefits in CDC schemes can be managed; and specify the categories of flex-access draw-down to which accrued rights can be transferred when the scheme has been wound up.

I will make one quick point before I get stuck into the dry detail. This instrument amends the 2022 regulations, which allow CDC schemes for single and connected employers to apply for authorisation from the regulator. It does not change the intention of those regulations, as the Minister has explained, and it is obviously not adapting to experience because no CDC schemes are in operation. For the record, can the Minister tell the Committee why the Government concluded that the amendments were needed? Were these issues that could have been picked up in the original drafting?

I am needling not just for the sake of it but because I have covered the DWP brief for quite a long time. In the past couple of years, we have debated quite a few instruments in this Room that have been necessary either to correct drafting problems in previous sets of legislation or to clarify things that were deemed not clear enough in previous drafts. Is there any broader systemic issue here that the Minister wants to pick up on? Does he want to give us some assurance on that front?

Turning to the dry detail, I want to look first at the change to the means of smoothing reductions to benefits in CDC schemes in order to reduce the immediate impact on members. The efficacy of that smoothing mechanism is really important—particularly given that, as my noble friend Lady Drake pointed out, the Government set their face against having a buffer fund in CDC schemes. We raised this during the passage of the original Bill but the Government were reluctant to engage with Members at that point either on the full implications of not having a buffer in a CDC scheme or on the detail of how proposed annual adjustments and smoothing would work.

The 2022 regulations require existing benefits in a CDC scheme to be adjusted annually—including being cut if necessary, as we have heard—to make sure that we keep the value of assets held and the projected costs of benefits in balance. Clearly, the intention was that, where a market recovered during a period of benefit reduction, increases in benefits resulting from a late evaluation could help offset those cuts. As my noble friend Lady Drake explained very clearly, any quick bounceback of asset values could help avoid unnecessary cuts, provided that assets and costs are always held in balance. However, the 2022 regulations seemingly do not allow that, hence the need for today’s instrument.

The consequential changes to Regulation 19 also address the information that actuarial valuations must contain and must be shared with the regulator, including details of any variation to a multiannual reduction as a result of the offsetting; the effect that the offsetting has on the remaining years of the multiannual reduction; and, where the offsetting has eliminated the planned reductions, when the reductions ceased to have effect and whether any remaining increase has been applied. Are the trustees of a CDC scheme required to get the approval of the regulator before implementing any offset? Are there any penalties for failing to provide all that information to the regulator? When applying the offset after a bounceback, can there be any retrospective calculation of when the reductions in benefits ceased to take effect—that is, pensioners getting retrospective increased payments?

I turn to Regulation 5, which amends Schedule 6 to the 2022 regulations; that is intended to protect members of a CDC scheme when it decides to wind up by ensuring that the process is agreed and monitored by the regulator. Among other things, the regulations make it clear that, during the winding up of a CDC scheme, the accrued rights of nominees, dependants and survivors of members or dependents can be transferred to authorised flexi-access draw-down arrangements, as we have heard. My noble friend Lady Drake asked an important question about the position of successors in that situation, especially in the period between notification and winding up. I will ask a more basic question: can the Minister clarify comprehensively who qualifies as a successor who has accrued rights to benefits that can be transferred to a flexi-access draw-down? If I was listening correctly, he gave some examples of who might fall into that category, but were they comprehensive?

The Minister may reply by saying that the regulations make this clear. In a way, they do. Regulation 5 amends Schedule 6 to the 2022 regulations in order to introduce a series of definitions. For example, Regulation 5(1) says:

“Schedule 6 (continuity option 1: transfer out and winding up) is amended as follows”.


Regulation 5(2) says:

“In paragraph 1(1) … (c) after the definition of ‘quantification’ insert … ‘successor’ has the meaning given in paragraph 27F of Schedule 28 to the Finance Act 2004 … ‘successors’ income withdrawal’ has the meaning given in paragraph 27J of Schedule 28 to the Finance Act 2004 … ‘successor’s flexi-access drawdown fund’ has the meaning given in paragraph 27K of Schedule 28 to the Finance Act 2004”.


My heart leapt when I saw a little hyperlink next to each of these insertions, which I clicked on. Alas, they took me a footnote telling me, for example:

“Paragraph 27K was inserted by the Taxation of Pensions Act 2014, section 3, Schedule 2, Part 1, paragraph 3(1), and amended by the Finance Act 2015, section 34, Schedule 4, Part 1, paragraphs 13(6)(a) and (b)”.


I understand that there may be a good policy reason to point to a definition in tax law, rather than make your own up here; otherwise, every time that changes, so does yours. However, as I have said before, when the DWP is bringing forward secondary legislation that is this layered, it would be nice to have a Keeling schedule. In the end, I dug down and found it, but it is quite a long way down. The Finance Act 2004 is many hundreds of pages long and it took me a while to get down to the right place. It would be helpful if the Minister could do that in future. I am also conscious that, given that we have had problems with drafting legislation, if this House is going to do a good scrutiny job, it would be nice to make it as easy as possible.

16:45
Finally, I want to look forward. The Minister reminded us that the case for CDC schemes is, in essence, to provide a more efficient way for workers to share investment and longevity risks and to provide pensioners with an income without their having to make complex financial decisions at the point of retirement. But the Pensions Scheme Act 2021 was passed some three years ago and, as the noble Lord, Lord Palmer of Childs Hill, pointed out, there is still no CDC scheme—not even a Royal Mail one. As far as I know, there are no signs of CDC schemes emerging from providers or employers; I am picking up no suggestions that they are being put forward.
By their nature, CDC schemes are collective: pooling contributions is what makes it possible for investment and longevity risks to be shared across the members of the scheme. But to have confidence in that new form of provision for a single or connected employer, there needs to be a high level of confidence in the strength of that employer and the level and flow of contributions into the scheme over the very long term.
Can the Minister tell us what the delay is with the Royal Mail scheme? Secondly, given the need for that confidence, can he assure the Committee that the DWP remains confident in the ability of Royal Mail to deliver the required level and flow of contributions into its CDC scheme over the very long term? More broadly, what is the Government’s view about why CDC has not taken off more widely? Do they have plans to take steps to drive up the expansion of CDC schemes in future? I look forward to the Minister’s reply.
Viscount Younger of Leckie Portrait Viscount Younger of Leckie (Con)
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My Lords, I thank all noble Lords for their helpful contributions to this short debate. Furthermore, I thank some noble Lords for the advance notice of their questions, particularly because this is quite a technical set of regulations, as I think we all understand. Given the incessant rain that we have been suffering over the past weeks, frankly, the drier the better—and that goes for this subject, too.

For an individual member of a CDC scheme, this instrument’s key effect will be to help to ensure that in a period of extreme economic downturn the principles of CDC continue to operate correctly. When, as expected, Royal Mail launches its CDC scheme later this year—I hope that this answers the questions from the noble Baroness, Lady Sherlock and the noble Lord, Lord Palmer—that member and their approximately 115,000 colleagues will be able to have more confidence that their new scheme will provide them with a regular income in retirement, with less exposure to the unexpected market shocks than might otherwise be the case. The noble Baroness, Lady Sherlock, raised a number of questions about the future of CDC schemes and Royal Mail, and I shall attempt to answer them in more detail later in my speech.

Noble Lords raised a number of questions about the multiannual reduction provisions, which I shall attempt to answer. First, the noble Baroness, Lady Sherlock, asked why the weakness in the current drafting was not identified before. It is important that all new legislation is monitored carefully to ensure that it works as we intended it to. It is through this monitoring process that we identified that the current drafting did not meet all of our published policy intention. If CDC schemes are to succeed, it is essential that prospective schemes are clear about those requirements. I hope that answers one of the questions from the noble Baroness.

The noble Baroness, Lady Sherlock, also asked whether approval from the Pensions Regulator was required or needed before any offsetting could be implemented. The decision to implement a multiannual reduction, including any offsetting, rests with the trustees of the scheme. It is based on the most recent actuarial valuation prepared by the scheme actuary and is subject to the scheme rules. Pre-approval is not required, but the Pensions Regulator will have ongoing scrutiny over such decisions in the normal way and the trustees are required to share the actuarial valuation with the regulator, again in the normal way.

The noble Baroness, Lady Sherlock, queried whether the trustees could be penalised if they failed to provide relevant information to the Pensions Regulator. As she may know, the standard civil penalties provided for in legislation, for example up to £5,000 in the case of an individual and up to £50,000 in any other case, can be imposed by the Pensions Regulator if the requirements are not met.

Both the noble Baroness, Lady Sherlock, and the noble Baroness, Lady Drake, asked whether offsetting following a bounce-back in investment performance could be applied retrospectively. Perhaps I can reassure them that it cannot be applied retrospectively because a key principle of this provision is that any bounce-back should smooth outcomes going forward and avoid the need for cuts, where possible, while ensuring that the costs of current and future benefits remain in balance with the value of the scheme’s assets. I think that chimes with some of my opening remarks, and I hope that it answers the question.

The noble Baroness, Lady Drake, asked whether an actuarial threshold was required before the full three years of a multiannual reduction could be deployed. I will answer that. There is no threshold, as it is for the trustees, who are independent and acting in the interests of the members, to decide whether to apply a multiannual reduction based on the information contained in the most recent annual valuation, which is prepared by the scheme actuary. A significant cut to benefits would likely be required only in extreme circumstances, but we would expect the trustees to utilise the multiannual reduction mechanism in this scenario, if it is provided for in the scheme rules. If they did not do this, they would need to explain their reasoning to the Pensions Regulator.

The noble Baronesses, Lady Sherlock and Lady Drake, and the noble Lord, Lord Palmer, all queried the policy intention of Regulation 3(5) and what implications it had for the front-ending or back-ending of the offsetting of the remaining planned reductions of the multiannual reduction. I would argue that this gets to the meat and granularity of the policy. The aim is to ensure that, while a degree of smoothing is allowed over a multiannual reduction, as we know, over three years, cuts are not stored up and deferred by backloading the cuts. That is why the legislation ensures that the reduction applied during each year of a multiannual reduction must not be greater than that applied in the previous year: that is very clear.

The noble Baroness, Lady Drake, asked how a transfer value would incorporate a scenario where the member transferred out before the multiannual reduction was completed or any potential offsetting was applied. Transfer values will be based on the conditions applicable at the time the member requested the transfer and when they actually transferred out of the scheme. Their transfer value will reflect any cuts planned for future years under a multiannual reduction. This means that nobody choosing to leave a CDC scheme will get more or less than the value of their benefits at that particular point.

I move on to the theme of wind-ups, which was raised by the noble Baronesses, Lady Drake and Lady Sherlock, who asked who qualifies as a successor and how you define one. I hope that I helped to answer that in my opening remarks, but perhaps I can go a bit further. Subject to scheme rules, this is an individual nominated by a dependant nominee or another successor to receive benefits following their death. Also, the scheme administrator can nominate a successor when, after that beneficiary’s death, there is no individual or charity nominated by that beneficiary.

I shall go a bit further on the question of transfers, which was raised by the noble Baroness, Lady Drake. The beneficiary has a number of discharge options they can choose from that are set out in the regulations. They include a flexi-access drawdown, which is where, subject to what the pension scheme rules allow, in any year the beneficiary can choose to take no payment of drawdown pension, a regular series of payments, an irregular payment stream or their whole flexi-access drawdown fund as a single payment. So there are a number of options there. Trustees must have completed the transfer process before the wind-up of the scheme can be completed. The value of the accrued rights to benefits transferred would be calculated based on the circumstances at the point of the transfer request.

The noble Baroness, Lady Drake, asked a number of questions about how the Royal Mail CDC scheme will operate. Royal Mail has informed us that it and its unions have agreed that the vast majority of existing employees with more than 12 months’ service will be enrolled into its collective plan at the so-called go live. It has also informed us that eligible new employees who join after go live will not be required to make an active decision unless they decide to opt out of contractual enrolment to the collective plan once they reach at least 12 months’ service with the employer. Which scheme Royal Mail chooses to use as a nursery scheme for its employees’ first 12 months of service is a decision for it and its union, as long as it meets the requirements of automatic enrolment.

The noble Baronesses, Lady Drake and Lady Sherlock, asked about the take-up of CDC in the UK. The Government are proud of the progress that we have made so far. During this Parliament, my officials worked closely with industry stakeholders to develop and bring into force legislation in 2021 to facilitate the introduction of single or connected employer CDC schemes. Over the past 12 months, the Government have announced a comprehensive package of pension reforms to provide better outcomes for savers and better support the UK economy. As part of that, we have been exploring the role that CDC can play in these reforms.

In answer to questions from the noble Lord, Lord Palmer, and the noble Baroness, Lady Drake, I am pleased to say that our consultation on CDC provision for unconnected multi-employer schemes and master trusts demonstrated significant appetite for it. A number of noble Lords mentioned timing; we intend to consult on regulations this spring.

The noble Lord, Lord Palmer, asked when we will extend the CDC provision to unconnected multi-employer schemes, including master trusts. We are committed to facilitating further CDC provision as quickly as possible, but we want to make sure that we get the legislation right to help ensure that the interests of members in these new schemes are generally protected. We engaged extensively with industry during the drafting process to ensure that this will be the case. As was mentioned earlier, we will consult on draft regulations to facilitate whole-life, multi-employer CDC schemes later this year. Subject to parliamentary approval, we intend for them to come into force in 2025.

The noble Lord asked what work is being done to legislate for decumulation-only CDC. The answer is the same: we are keen to facilitate access to CDC schemes where this would provide better outcomes for members, as long as we can ensure the necessary member protections. I come back to that important word, “protections”. Building on our work to develop a whole-life, multi-employer legislative framework, we are working closely with the pensions industry and regulators to explore what will be needed.

I thank all noble Lords for this fairly short but valuable and constructive debate. I also thank noble Lords for giving me their questions in advance. I see that the noble Baroness, Lady Drake, is itching to get up so I will give way.

Baroness Drake Portrait Baroness Drake (Lab)
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I did not want to get up too quickly. I do not want to hold up the closure of the debate on these regulations, but I was disconcerted by the Minister’s response on successors. Could he write to formally record what he said about that? For a trustee, a set of tax rules apply when the pension savings go into the estate and inheritance tax and a further set apply when the pension pot is handed over to a nominated beneficiary. Here we are talking about a second tier—a nominated successor to a nominated beneficiary. Trustees have to be very careful under which tax regime and to whom pension pots are being allocated. I struggled to follow what he said on that—because it is complicated, not because he did not explain it. I was thrown by the word “successor” when I read the regulations. It would be helpful if what he said could be written down, if we need to interrogate it further, rather than deal with it now.

Viscount Younger of Leckie Portrait Viscount Younger of Leckie (Con)
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I quite accept what the noble Baroness has raised. She acknowledged that I gave out a lot of detail in defining what we think is right in terms of who would be a successor, cascading along the process if the successor had died and so on. However, if there is more to say—I hope that there might be—I shall write to the noble Baroness and copy in all noble Lords who have taken part in this debate. I thank her for her question.

Motion agreed.

Sea Fisheries (International Commission for the Conservation of Atlantic Tunas) (Amendment) Regulations 2024

Tuesday 13th February 2024

(4 months ago)

Grand Committee
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Considered in Grand Committee
17:02
Moved by
Lord Douglas-Miller Portrait Lord Douglas-Miller
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That the Grand Committee do consider the Sea Fisheries (International Commission for the Conservation of Atlantic Tunas) (Amendment) Regulations 2024.

Lord Douglas-Miller Portrait The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Douglas-Miller) (Con)
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My Lords, these regulations were laid in draft before this House on 12 December 2023.

The purpose of this instrument is to make provision to ensure that the United Kingdom, as a member of the International Commission for the Conservation of Atlantic Tunas, henceforth referred to as ICCAT, can continue to meet the full range of its international obligations in relation to the convention which governs ICCAT. The UK has an obligation under the United Nations Convention on the Law of the Sea to co-operate on the management of shared fish stocks, including through appropriate regional or sub-regional organisations. ICCAT is one such example. It is responsible for ensuring that fisheries for tunas and tuna-like species, such as swordfish, in the Atlantic Ocean are managed sustainably. The UK became an independent contracting party to the convention—in other words, a member of ICCAT—on 1 January 2021, after depositing an instrument of accession following EU exit.

As a member of ICCAT, the UK must ensure that we are able to implement and enforce binding measures, known as recommendations, which are agreed by contracting parties under the convention. The UK must ensure that our domestic laws fulfil these international obligations. This instrument updates and amends various regulations of retained EU law to implement recommendations adopted by the commission immediately prior to and since the withdrawal of the UK from the EU. Where appropriate, this instrument also makes amendments to reflect the UK’s status as an independent coastal state.

I will now go through each element of the regulation in turn to briefly explain the amendments being made to retained EU law. Regulation 2 of the instrument removes provisions from Council Regulation 1936/2001, which laid down control measures applicable to fishing for certain stocks of highly migratory fish. It also included provisions that regulated the farming of bluefin tuna. The UK, however, does not farm bluefin tuna. These provisions have therefore been removed as they are not relevant to the UK.

Regulation 3 amends Council Regulation 1984/2003. It now correctly reflects the convention’s requirement for a statistical document to accompany imports of swordfish and bigeye tuna into the UK. Other amendments are made for clarity and to ensure that the amended provisions are enforceable. For example, amendments to the description of fish captured no longer reference the 1984 version of the EU’s combined nomenclature. They are instead replaced with references to the UK commodity codes used in the UK’s customs tariff.

Regulation 4 of this instrument updates Regulation EU 640/2010 to mandate the use of an electronic catch documentation system for bluefin tuna, replacing the use of clerical documents. Further amendments are made to ensure that the new requirements are clear and enforceable, as well as outlining the limited circumstances in which a paper catch document may be used instead of the electronic system.

Regulation 4 also amends the descriptions of fish captured within Regulation EU 640/2010. These descriptions have been updated with references to the commodity codes found in the UK’s customs tariff. This amendment makes the description of fish clear and ensures that the regulation is enforceable.

Regulation 5 removes provisions in Commission Delegated Regulation EU 2015/98, which established derogations from landing obligations in order to fulfil ICCAT requirements. Instead, these provisions are covered in Regulation EU 2016/162. Removing these provisions from Commission Delegated Regulation EU 2015/98 avoids duplication and provides clarity.

Regulation 6 of this instrument amends Regulation EU 2016/1627, which implemented ICCAT’s multiannual recovery plan for bluefin tuna in the eastern Atlantic and the Mediterranean. Since the recovery plan was introduced, I am pleased to say that stocks of bluefin tuna have improved significantly. The recovery plan has now been replaced with a multiannual management plan. Regulation 6 therefore comprehensively amends Regulation EU 2016/1627 to ensure that it correctly reflects the UK’s obligations under ICCAT in relation to the management plan and the UK’s catch quota.

A multiannual recovery plan was also developed for the management of swordfish in the Mediterranean. The EU gave effect to the recovery plan under Regulation EU 2019/1154, which was retained in our domestic legislation at the point of EU exit. However, as these provisions relate to swordfish in the Mediterranean, Regulation 7 of this instrument revokes the substantive provisions of Regulation EU 2019/1154 as they are not relevant to the UK.

Regulation EU 2019/1241 sets technical measures for the conservation of fisheries resources and the protection of marine ecosystems. Regulation 8 of this instrument amends Regulation EU 2019/1241 to insert minimum conservation reference sizes for bluefin tuna specified under the convention. By making this amendment, all minimum conservation reference sizes will be specified within one regulation rather than contained in different pieces of retained EU law, ensuring clarity within our domestic legislation.

In addition to amending retained EU law, Regulation 9 of this instrument amends the Common Fisheries Policy and Aquaculture Regulations 2019 to remove references to obsolete legislation. Specifically, amendments have been made to remove provisions relating to retained EU law; they have been removed and replaced with Regulation EU 2017/2107, which lays down management conservation and control measures within the conservation area of ICCAT.

The devolved Administrations are supportive of the amendments made in this instrument, ensuring that the UK can continue to meet in full its obligations as an independent contracting party to the ICCAT convention. If this instrument is not passed, the UK will not only fail to meet its international obligations under the convention; by not implementing enforceable management and traceability systems, we risk undermining efforts made over the past 17 years to ensure the sustainable management of Atlantic bluefin tuna stocks.

I hope that I have reassured all noble Lords on the purposes and aims of this statutory instrument, ensuring the continued sustainable management of this important fishery. For the reasons I have set out, I commend the regulations to the Committee. I thank noble Lords for their attention and remain at their disposal for any questions or discussion on this matter.

Baroness Bakewell of Hardington Mandeville Portrait Baroness Bakewell of Hardington Mandeville (LD)
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My Lords, I am grateful to the Minister for his introduction to this statutory instrument, which covers the International Convention for the Conservation of Atlantic Tunas, known as the convention.

While a member of the EU, the UK had no quota for tuna and tuna-like species. However, following Brexit, we are entitled to a quota as tuna stocks have apparently improved. The SI makes changes to retained EU law in eight previous sets of regulations, including the Common Fisheries Policy and Aquaculture (Amendment etc.) (EU Exit) Regulations 2019. That is quite a lot of change and I am grateful to the Minister for going through each of the eight sets of regulations.

Paragraph 7.2 of this instrument’s Explanatory Memorandum explains how the UK has acquired a quota for bluefin tuna

“as an independent contracting party … in line with the UK-EU Trade and Cooperation Agreement”.

From hereon in I shall refer to “BFT” because, as noble Lords can hear, I am getting tongue-tied in saying “bluefin tuna”. Despite not stating what the quota is, the EM indicates how the requirements will apply to UK fishing vessels catching BFT in the convention area; this includes the

“offence, penalty, and enforcement provisions”,

which

“have been added directly to relevant retained EU law to avoid … ambiguity as to whether existing enforcement provisions would apply to the newly amended provisions”.

A read through the government website’s guidance gives information about the size and length of the vessels, as well as the bait, to be used for catching BFT. It also gives detailed information about how such catch can and cannot be landed, including returning undersized live tuna to the sea, recording all catch and keeping on board dead catch for which there is no authorisation for landing.

However, it is not exactly crystal-clear. According to the government website, but not the EM, the BFT quota allocated in 2023 was 65 tonnes—an increase on the quotas for 2021 and 2022. The UK is to use 39 tonnes of that quota to trial a new, small-scale commercial fishery to see whether it will benefit UK fishers. Assuming that the 2024 quota remains the same as the 2023 one—65 tonnes—this leaves 26 tonnes of BFT to be distributed between a possible 10 available licensed authorisations. I am neither a commercial fisher nor a recreational one, but it seems to me that potentially receiving only just over 2 tonnes of the BFT quota will not be sufficient for many, especially in the commercial sector. I note that the regulations prohibit farming and the use of traps in UK waters or by UK vessels in the convention area for BFT. This is a good thing if enforced.

17:15
A targeted consultation conducted by Defra provided 167 responses. I am grateful to the officials for providing me with a link to access this. The responses were broken down into categories, and the three categories with the highest total number of responses—143—basically classed themselves as recreational fishers, of which 95 were chartered vessel owners. There appears to have been general agreement with the regulations being proposed for the recreational targeting of BFT. There were concerns about permit charges, fishery standards and enforcement, the phased rollout, and parity with the commercial sector. That last concern was felt to be important, especially in terms of permit charges and access to fisheries grant funding. Will the Minister say whether the Government propose to implement the parity requested on both of those?
Those responding to the consultation also supported a voluntary code of conduct to drive up fishery standards. However, many requested mandatory training in catch-and-release techniques. Having read the guidance, I concur that this is needed; I am not a fisher and I found it quite confusing, especially in respect of the release of live tuna back into the sea.
Only a very small number of those responding to the consultation—seven—was totally opposed to any form of BFT catch-and-release recreational fishery, known as the CRRF. Although the consultation was conducted with those with a particular interest in recreational fishing, there will be many members of the public who, once they realise the Government propose to licence BFT fishing, will object—and probably quite vociferously. Will the Minister say whether Defra has received any objections from members of the public and conservation organisations?
While I welcome the increase in bluefin tuna numbers to the extent that the Government can now consider issuing a quota for this fishing sector, I am concerned that this should be kept under strict scrutiny to ensure that their numbers continue to increase and do not diminish.
Baroness Hayman of Ullock Portrait Baroness Hayman of Ullock (Lab)
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My Lords, I thank the noble Lord for his comprehensive and detailed introduction. The noble Baroness, Lady Bakewell of Hardington Mandeville, went into some detail about what is in the SI, so I do not need to go over it all again.

As the noble Lord mentioned, it is important that tuna catches are managed sustainably—so it is important that we have this SI—and that must be done while we fulfil our international obligations. We have heard that bluefin tuna stocks in our seas have increased recently. That is incredibly important, but it is also important, as the noble Baroness said, that that recovery is properly protected. It is good that we are debating those aspects.

I will raise two brief points. The noble Baroness talked about quotas. Paragraph 7.7 of the Explanatory Memorandum refers to the tuna catch quota. As she said, we did not previously have a separate quota because we came under EU rules. It would be good to understand what our quota is now and how it is operating now we have left the EU, because it is not clear what kind of catches will be allowed. If we are to manage the increase in stocks, it is important that this is clear to everybody.

Paragraph 10.1 of the Explanatory Memorandum refers to the targeted consultation. I thank the noble Baroness for going into such detail about this, because when I clicked on the website link it would not work.

Baroness Bakewell of Hardington Mandeville Portrait Baroness Bakewell of Hardington Mandeville (LD)
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It did not work for me the first time either.

Baroness Hayman of Ullock Portrait Baroness Hayman of Ullock (Lab)
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Perhaps the noble Lord can take that away and make sure the link works properly in the future. It was a bit frustrating that I could not get any detail on it. Having said that, we completely support this legislation and we need to move on with it.

Lord Douglas-Miller Portrait Lord Douglas-Miller (Con)
- Hansard - - - Excerpts

I thank both noble Baronesses for their interest in tuna fishery. I was led to believe that the record for an SI is seven minutes; I was hoping that we might have beaten it, but BFT is obviously a long phrase and takes a bit of time to get through.

A few questions were raised. First, I will look at the consultation link and make sure that it works. Secondly, the management of our quota and the sustainability of the fishery are interlinked. We are governed by ICCAT, so it is not a European or a British thing. We do not say, “We’re going to take 50, 100 or 200 tonnes”; we have joined this organisation, which has an overarching responsibility across the whole of the bluefin tuna fishery and that of related species. As such, it does a lot of the research work that gives us some indication of how the bluefin tuna fishery is developing. It has been intricately involved in the management plan over the last 10 or 15 years.

We look to ICCAT for the quota, which it allocates across all other European countries, as well as ours. We get what we get, and then it is up to us to decide how we allocate that between the commercial and recreational fishery. This is all a bit new, not just to me but to most fishermen, I think. Not many people out there fish for bluefin tuna. The current plan is that all the recreational fishery will be catch and release. We will catch the fish, tag it and take information to feed back to ICCAT, which will help inform its decision-making. That may change over time if the fishery grows and we feel that there is a market.

The noble Baroness, Lady Bakewell, asked about objections. I am not aware that we have had any objections at all on this issue. If we bump into lots, we can feed that into our thought process and see where it takes us. I take her point about giving people clear instructions on catch and release. Tuna is a very big fish. I am a fisherman and I have some experience of catch and release; it is absolutely not as easy as it sounds. If we are doing catch and release, there is a real need to ensure that there is clear guidance on how it is executed and that we do not damage fish in the process of releasing them. That guidance and those details need to be fleshed out a bit.

Finally, I am afraid that I am unclear on the parity of permit charges, so I will write to the noble Baroness on that point.

I think that covers all the questions, so I will wrap up. I hope noble Lords share my conviction about the need for this instrument to make the necessary provisions outlined in the Sea Fisheries (International Commission for the Conservation of Atlantic Tunas) (Amendment) Regulations 2024. The regulations ensure that the UK can continue to meet its full international obligations under the convention which governs ICCAT, supporting the sustainable management of Atlantic bluefin tuna. With that, I commend the instrument to the Committee.

Motion agreed.

Nuclear Decommissioning Authority (Pension Scheme Amendment) Regulations 2024

Tuesday 13th February 2024

(4 months ago)

Grand Committee
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Considered in Grand Committee
17:25
Moved by
Lord Callanan Portrait Lord Callanan
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That the Grand Committee do consider the Nuclear Decommissioning Authority (Pension Scheme Amendment) Regulations 2024.

Lord Callanan Portrait The Parliamentary Under-Secretary of State, Department for Energy Security and Net Zero (Lord Callanan) (Con)
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My Lords, these regulations were laid before the House on 19 December last year.

The 2011 report by the noble Lord, Lord Hutton of Furness, started the Government on the road to the reform of public sector pensions. Although the Public Service Pensions Act 2013 made a large number of reforms, it did not cover all public bodies, including those within the Nuclear Decommissioning Authority group.

The Nuclear Decommissioning Authority, or NDA, is the statutory body responsible for the decommissioning and safe handling of the UK’s nuclear legacy. It has 17 sites across the United Kingdom, including Sellafield. The NDA was created in 2005 via the Energy Act 2004. However, many of its sites have been operating since the middle of the 20th century. This lengthy history has therefore led to a complicated set of pension arrangements. This includes two pension schemes that, although closed to new entrants since 2008, provide for final salary pensions and are in scope of the reforms. These are the combined nuclear pension plan and the site licence company section of the Magnox Electric Group of the electricity supply pension scheme.

In 2017, the then Department for Business, Energy and Industrial Strategy and the NDA engaged with the trade unions to agree a reformed pension scheme tailored to the characteristics of the affected NDA employees. This resulted in a proposed bespoke career average revalued earnings—also known as CARE—scheme, which, following statutory consultation with affected NDA employees and a ballot of union members, was formally accepted by the trade unions. The bespoke scheme is in line with the move to CARE made by the rest of the public sector.

Subsequently, a formal government consultation was launched in May 2018 and the Government published a response in December 2018 confirming the proposed changes. The reformed scheme still offers excellent benefits to its members. Notably—indeed, unusually for other reformed schemes—it still includes provision for members to retire at their current retirement age. For nearly all of them, this will be 60.

A statutory framework which applied to pension benefits across the NDA estate meant that specific legislation was needed to implement the new reformed scheme. The Energy Act 2023 provided the Secretary of State with the powers to make secondary legislation designating a person who will be required to amend the provisions of a nuclear pension scheme. This secondary legislation is being made to require the NDA and Magnox Ltd to amend relevant NDA pension schemes and implement CARE-based pension reform in accordance with the broader public sector pay policy. The instrument will also modify the statutory pension protections contained in the Energy Act 2004 and the Electricity (Protected Persons) (England and Wales) Pension Regulations 1990 in support of the reforms.

In conclusion, these measures will bring the Nuclear Decommissioning Authority group’s final salary pensions into line with wider public sector pensions. It will also deliver savings to the NDA budget, which will be recycled to support its mission of decommissioning the UK’s nuclear legacy. On that basis, I commend these regulations to the Committee.

Lord Young of Cookham Portrait Lord Young of Cookham (Con)
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My Lords, I am grateful to my noble friend for that explanation, particularly as he does not seem in the best of health. I do not want to add to his distress, but I want to raise three issues.

17:30
The first concerns paragraph 7.3 of the Explanatory Memorandum, from which it appears that, notwithstanding the Government’s decision to implement the recommendations of the 2011 Hutton review, some employees in the public sector will remain outwith it. It says that a certain number of protected persons were
“not included in the … public consultation as there were so few of them”.
If there were so few, one would have thought the consultation would be much easier than if there were a relatively large number. However, I wonder what justification there is for leaving these public employees outwith the Hutton review. It says at the end:
“Should Government wish to change this position it will undertake a full consultation and further regulations”.
However, given that everybody else in the sector has moved over to the new regime, what is the reason for leaving these relatively few people outwith it?
Secondly, paragraph 10.5 says:
“We have shared our intentions with devolved administrations”.
I assume that this does not need a legislative consent Motion and that it is a reserved power, but it would be interesting to know what the devolved Administrations said in response to the sharing of intentions.
My last point is one of timing. The Government took the decision to bring forward this SI in December 2018, as we see in paragraph 10.4. It says:
“The delay in securing the changes related to the difficulty in securing sufficient Parliamentary time rather than any intention to review the underlying policy”.
I do not want to make any overoptimistic proposals but I would be surprised if this took more than 20 minutes. It has not been through the other place, so we do not know how long it will take there, but I suggest that it will take less time than the upper House. So it was not policy or drafting but a difficulty in securing sufficient parliamentary time. Is that really why we have had to wait over five years before considering this SI?
However, I found my noble friend’s proposals entirely convincing and I think this is a very sensible SI.
Earl Russell Portrait Earl Russell (LD)
- Hansard - - - Excerpts

I thank the Minister for introducing these regulations. There is little information available other than the statutory instrument and the accompanying Explanatory Memorandum. I also note that this has not been picked up in any way by the Secondary Legislation Scrutiny Committee. I do not have many overriding concerns or objections, and I understand that it is likely to be the same for others speaking today. I will pick up the points that the noble Lord made, particularly in relation to the small numbers who have been excluded under paragraph 7.3.

These measures will bring NDA pensions into line with wider public sector pensions in a move from a final salary scheme to a career average scheme. The proposals have been agreed with the unions and include provisions for retirement on full pension before the state pension age. I welcome that.

As is customary, I will ask the Minister a few questions. Most of them relate to the same issue, namely that of timing—the cause of the timing and whether that delay has had any impact on the proposals being put forward today. I am just not certain, so I will ask questions around those issues.

As the noble Lord said, this was originally completed way back in 2017 and the consultation was published in May 2018. The Explanatory Memorandum blames a lack of parliamentary time for this almost seven-year delay in bringing this into law. Can it really be correct that it has taken a full six or seven years to find a few minutes of parliamentary time to carry these small changes forward? Maybe it is, but I seek clarification on that point.

Considering these proposals are now late, is there any impact as a result? The report says that the unions supported the proposals. Has their position changed since they were originally consulted? Has the Minister or his officials gone back to the unions to ask for an update on their position? Was the last time they were consulted back in 2017? I seek clarification on that, because it was not clear from the information provided.

The Explanatory Memorandum states that the proposals will save an estimated £200 million over the term of the scheme. Is that figure still correct following the delay? Is it the same amount? Has there been any loss of public funding from the delay in bringing these proposals forward? Are there any changes to the long-term savings?

Obviously, we are dealing with the Nuclear Decommissioning Authority. If any issues of people being exposed to radiation that were not known about came to light after these proposals came forward, would there be any changes in the pensions available to them as a result of the changes to the scheme?

Paragraph 10.3 of the Explanatory Memorandum mentions that most of the responses were against the proposals, but there is very little information. I understand that there were not many objections and that these were small numbers, but there was no information in the pack about the reasons for the objections. Could I ask for a sentence on that?

Paragraph 11.2 says that these proposals will impact 8,000 staff and that consultations will begin on 1 April. Is that still the same number? Has it changed over time?

I note the Government brought forward their civil nuclear road map last month, which involves a big expansion of our civil nuclear programme. Is the reason why this been delayed for seven or eight years and then rushed forward related—

Earl Russell Portrait Earl Russell (LD)
- Hansard - - - Excerpts

No? Okay, that is fine. Finally, how will the Minister monitor the implementation of the changes? Will that be reported anywhere?

Lord Lennie Portrait Lord Lennie (Lab)
- Hansard - - - Excerpts

My Lords, this instrument enacts the Nuclear Decommissioning Authority pension scheme, based on the review of public sector pension schemes by my noble friend Lord Hutton in 2011. This resulted in the Public Sector Pensions Act, which enabled the majority of public sector pensions to move from final salary to career average revalued earnings schemes. About 8,000 workers are affected as a result of this instrument. We have nothing to complain about on the scheme, but the process has raised a few questions, as the noble Lord, Lord Young, and the noble Earl, Lord Russell, have pointed out. I would like these to be addressed.

During the consultation, many respondents raised concerns that the proposed definitions and the application of the proposed powers were insufficiently clear or too broad. Many sought assurances that the powers would be restricted to implementing the reform agreed with their national trade unions. Furthermore, respondents requested either member or trade union and/or trustee engagement prior to the use of any of the powers. Could the Minister respond to those concerns?

The trustees of the CNPP and MEG-ESPS asked that they be given sufficient time to review the final rule amendments, indicating that about 12 months would have been appropriate. The response to the consultation says that, in the light of this specific request, as much notice as possible would be given to the trustees and members prior to implementation. We now know that the implementation date will be 1 April 2024. Can the Minister tell us when the Government notified the trustees of the changes? Did they deem this sufficient for their purposes of consultation and informing their members?

The noble Lord, Lord Young, raised a concern regarding the reform of the pensions for NDA employees who are covered by the Electricity (Protected Persons) (Scotland) Pension Regulations, which were not included in the public consultation. There are very few of them, as the noble Lord and the information provided say. How many are there? If a change is to be brought in for the persons in Scotland, presumably another full consultation will take place to precede any further regulations.

Finally, to repeat the question of the noble Lord, Lord Young, and the noble Earl, Lord Russell, the decision to introduce the scheme was taken on 28 December. There has been plenty of parliamentary time for this half-hour debate to take place, so could we have the actual reason why it was delayed so long?

Lord Callanan Portrait Lord Callanan (Con)
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My Lords, I thank all noble Lords for their valuable contributions to this debate.

I will start with the points made by my noble friend Lord Young and the noble Earl, Lord Russell. On the small numbers of people excluded, if an individual is entitled to pension protection under the Electricity (Protected Persons) (Scotland) Pension Regulations, they are not in scope for the changes in the NDA group. Whether an individual has this protection will depend on whom they were employed by and the pension scheme that they were eligible to be a member of in March 1990. The Government have reserved their position to keep this under review.

I think that every noble Lord rightly raised the delay in bringing forward these provisions. It was not that we could not find 20 minutes of parliamentary time over six years—if that were true, my noble friend would have a very valid point—but that we did not get the primary powers we required, as he will recall, until the Energy Bill was enacted late last year. It was entirely a result of needing the primary powers before we could make these changes, not a lack of parliamentary time. A great many other measures were held up due to lack of parliamentary time, but that was not the reason for the delay here. My honourable friend the Minister for Nuclear in the other place met the trade unions last year to discuss the NDA provisions in the then Energy Bill. They noted that they were also concerned about the length of time but, when the delay was explained, they were broadly understanding of the reasons.

On the £200 million of savings, despite the delay in the introduction of this legislation, we estimate that the level of savings remains broadly accurate. The exact level will depend on the change to pension arrangements and will vary depending on when members of staff retire, but we still believe that the savings will be significant, of the order of £200 million.

The number of staff affected—broadly 8,000—remains the same. Employees affected were aware of the changes due to be enacted as of April 2024, and there has been a great deal of communication during the last year, including a website set up for those affected. If changes are required to schemes not covered by these regulations, such as schemes in Scotland, that would require further consultation. The Government remain committed to ensuring that public sector pension reform proceeds in line with the 2011 review of the noble Lord, Lord Hutton. These regulations are essential to the success of the implementation of CARE-based pension reform in the NDA group in accordance with broader public sector pay policy.

Reflecting back, it is evident that the complexities of the NDA group’s pension schemes required tailored reforms. Engagement with the trade unions resulted in a bespoke career average revalued earnings scheme, aligning with the broader public sector framework and maintaining valuable benefits for its members. Furthermore, the reform preserves commitments to those excellent benefits, notably including provisions for members to retire at their current retirement age, as I said in opening, which for the majority will be 60. These measures will align NDA group final salary pensions with wider public sector standards, ensuring fairness and efficiency, yielding substantial financial savings and bolstering the NDA’s mission of responsibly decommissioning the UK’s nuclear legacy. I think I have answered all the points put to me—

Lord Young of Cookham Portrait Lord Young of Cookham (Con)
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I am very grateful for my noble friend’s explanation that it was not a shortage of parliamentary time. As there are four former business managers in the Committee at the moment, will he ensure that in future his department does not blame the absence of parliamentary time when that is not the reason for the delay?

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

My noble friend makes a very good point. I will communicate that to officials. With that, I commend these reforms to the Committee.

Motion agreed.

Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2024

Tuesday 13th February 2024

(4 months ago)

Grand Committee
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Considered in Grand Committee
17:46
Moved by
Baroness Vere of Norbiton Portrait Baroness Vere of Norbiton
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That the Grand Committee do consider the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2024.

Baroness Vere of Norbiton Portrait The Parliamentary Secretary, HM Treasury (Baroness Vere of Norbiton) (Con)
- Hansard - - - Excerpts

My Lords, this draft statutory instrument makes an update to financial services legislation to make operating a pensions dashboard service a Financial Conduct Authority—FCA—regulated activity. As noble Lords will be aware, the Government have long held the ambition of delivering pensions dashboard services to the public. It is vital that individuals can easily access and view data about their pension savings in one place and at their convenience.

Executed well, pensions dashboards can deliver significant benefits to consumers, providing better access to information about their pensions held in different schemes and putting information about private and state pensions in a single place. This will bring a step change in how people can engage with their pension savings and will finally allow them to have a fuller picture of them. Equipped with this information, individuals will be better able to plan for their retirement, find lost pension pots, seek financial advice and guidance at the right time and, ultimately, feel more in control of their pensions.

As noble Lords will be aware, the Government are supporting the development of the digital architecture needed to make pensions dashboards a reality, as well as facilitating the development of a government-backed pensions dashboard by the Money and Pensions Service. The Government are also supporting the development of private sector pensions dashboards. Different individuals will have different needs, and this will ensure that a range of platforms exist to meet them. However, the Government have been clear that this can take place only with a suitable and robust regulatory framework in place, recognising that consumers using pensions dashboards could be vulnerable to potential harms. It is vital that consumers are adequately protected.

During the passage of the Pension Schemes Act 2021, the Government were clear that the operation of pensions dashboard services should be brought within FCA regulation. This order amends the regulatory perimeter of the FCA to make operating a pensions dashboard service that connects to the Money and Pensions Service dashboard’s digital architecture a regulated activity. Once in force, this will have the effect that anyone choosing to operate a pensions dashboard service will need to be authorised and regulated by the FCA. Firms that are authorised by the FCA and granted permission to undertake the new regulated activity will have to follow the rules and guidance set by the FCA, which has the relevant remit and objectives to establish an appropriate consumer protection framework for pensions dashboards.

As noble Lords will be aware, the FCA consulted on the rules for pensions dashboards. The consultation, which closed towards the end of last year, set out a proposed approach to ensure that the new market for pensions dashboards does not introduce or amplify the potential for consumer harms. We will continue to work with the FCA in the coming months as the regulatory framework is finalised.

This statutory instrument delivers a key part of the framework that we are establishing to make pensions dashboards available to consumers. It is imperative that pensions dashboards operate within a strong regulatory framework, providing appropriate consumer protection so that the consumer benefits of dashboards can be realised. I beg to move.

Lord Sharkey Portrait Lord Sharkey (LD)
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My Lords, we support this pensions dashboard SI, just as we supported the pensions dashboards project during the passage through the House of what became the Pension Schemes Act 2021. We continue to believe that the dashboards should deliver more information to the consumer in a comprehensive and easily understood way, and that this will make it easier to make better choices.

We understand that providing these dashboards, both for MaPS and for commercial suppliers, is a very complex undertaking. We were not terribly surprised by the delays the project has suffered but we would like some reassurance about progress from the Minister. The new connection date is set for 31 October 2026, but some services may be available before then. Could the Minister tell us when we may now expect the MaPS dashboard to be available to consumers, when we may expect commercial variants to be available and what services short of a full dashboard may be available sooner?

It would also be very helpful if the Minister could tell us when she expects the FCA rules that she mentioned, which were previously consulted on, to be published. It is hard to see commercial enterprises being able to finalise their own dashboards without sight of and understanding of the new FCA rules.

During the debates in the House on what is now the Pension Schemes Act 2021, many of us thought that the MaPS version of the dashboard should be allowed at least a year of operation before commercial versions were allowed to enter the market. Can the Minister tell us whether there is likely to be a period when the MaPS version runs alone?

We also debated the issue of allowing consumers to make transactions via commercial dashboards. Can the Minister say what the current position is? Will transactions be allowed?

The mechanics of the SI before us seem entirely straightforward and are clearly vital to consumer protection. We have no issues with either its purpose or its mechanism. We do have a couple of very minor and tangential questions. First, we are curious about the date of the SI coming into force. Why is it 11 March? Does that date have any particular significance?

The second question relates to the final sentence of paragraph 7.4 of the Explanatory Memorandum, which reads:

“Operating a dashboard may include taking regulatory responsibility for any third parties involved in connecting to MaPS digital architecture on their behalf”.


I would be very grateful if the Minister could unpack that a little. Perhaps she could give an example of such an arrangement. What circumstances would trigger the assumption of responsibility?

Lord Livermore Portrait Lord Livermore (Lab)
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My Lords, this SI makes good on a commitment given during the passage of what became the Financial Services Act 2021 to ensure that entities running a pensions dashboard will have to be authorised and regulated by the FCA. This is an important safeguard for pension holders and we welcome the SI, even if it has taken longer than expected to arrive and is not quite the final piece of the pensions dashboard puzzle.

In an age of scams, uncertainty about AI and increasing consumer concern about online safety, perhaps I might ask the Minister about technical safeguards that providers are expected to put in place. I understand that dashboards themselves will not store data, so there is no risk of mass collection. But if an app is not secure and someone is using a device infected with malware, for example, could bad actors still be able to view and therefore exploit data such as account names, numbers and balances? It would be helpful to know what specifications private providers will have to meet—or, indeed, whether the Government or the FCA will be setting any technology specifications at all.

Paragraph 7.1 of the Explanatory Memorandum to this SI states that the regulated entity will be responsible for the actions of third parties connecting to the Money and Pensions Service digital architecture on their behalf. In recent years, there has been a number of examples of websites or apps using plug-ins to process logins which it then turned out had been infiltrated and customer data breached. Are the Government satisfied that the FCA and dashboard providers will be on top of these issues and that they will go to the Information Commissioner if needed?

Although more guidance is being issued about pensions dashboards, it is still not clear when the Government expect the first products to be operational. Does the Minister have a specific target date in mind?

Finally, when this SI was debated in the Commons, the shadow Economic Secretary asked the Minister whether he could confirm whether pensions dashboards would be using the Government’s OneLogin service. The Economic Secretary said he would write on the matter but, as far as I am aware, has not yet done so. Does the noble Baroness have an answer to that point in her brief and, if not, whether she will commit to copying the Economic Secretary’s reply, when it comes, to the participants in this debate today?

Baroness Vere of Norbiton Portrait Baroness Vere of Norbiton (Con)
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My Lords, I am very grateful to both noble Lords for their contributions to this short debate on a topic of great interest to all of us pensioners. I, for one, am looking forward to being able to see whether I have any lost pensions that suddenly pop up on my dashboard and it turns out that I am a multimillionaire. I am not holding my breath.

However, I think all noble Lords recognise that it is an incredibly complex undertaking, and it is right that we take the time to ensure that it is done to the level that consumers will expect—particularly given the amount of data available out there relating to pensions. It must be safe and secure; pensions dashboards will allow users to search their pensions and view their data, and they will be connecting to potentially thousands of schemes offered by technologically advanced organisations in some circumstances, and in others, frankly, organisations that are not quite so advanced. It is those laggards that we need to make sure are up to scratch.

Essentially, we expect the digital architecture to facilitate the search of more than 71 million pensions records held by thousands of pension schemes and providers. Each of those—or many of them—will have different IT systems and ways of calculating values. Pulling all of that together is the complex thing behind this, but, as the noble Lord, Lord Livermore, rightly pointed out, we also have the issue of identity verification to consider, and various other critical elements of the ecosystem. Around that sit things such as standards and guidance to pension schemes, in order for them to be able to connect.

The timelines at the moment are that the DWP’s amending regulations came into force in August 2023. That set out a new connection deadline for schemes of October 2026. At the moment the DWP is engaging extensively with industry and has been since last year. It will issue guidance on a connection timetable in spring 2024.

The reason for the delay is that it is a slightly more complex technical issue and solution than initially anticipated. This became apparent once we were able to speak to industry stakeholders to find out how they store their data and present it to their pension holders. But I am convinced there will be a point when we get to the dashboard available point—DAP—at which stage the dashboard will be made publicly available. However, before the DAP can be reached, the Secretary of State for the Department for Work and Pensions will have to issue a notice. He or she will do so only after having regard to whether there is sufficient coverage on the dashboards, that the service is working effectively and that the overall user journey on the dashboard is positive. This will be informed by extensive user testing to ensure the success of the pensions dashboards services from the outset.

I think that it was the noble Lord, Lord Livermore—forgive me, I cannot remember—who asked whether MaPS would be first and then others would follow. In fact, it was the noble Lord, Lord Sharkey. It is too early to say now. Certainly, MaPS will be first, but we are not yet clear whether there will be other private sector providers ready to go at that time. There will not be a rush to try to get private sector providers there because, of course, the FCA is still working on its rules, and we will allow private sector providers only once the FCA has published its final rules. The applicants would need time to prepare accordingly, the dashboard architecture would need to be complete and the private operators would then have to have applied to the FCA, which would have gone away, checked the business model and looked at its usability—all of those things—before it would also be allowed to sit alongside MaPS. So it is too early to say whether a private sector provider would be launched at the same time.

18:00
It is correct to say that in the first iteration—indeed, the only iteration that is envisaged—it will be a “find and view” service only. The exact data set out on the dashboards will include administrative information about the pension, as well as the value of the pension, either as an estimated annual income or the current pot value of a defined contribution pension. The FCA has proposed that pensions dashboard services may also offer certain other services that engage with consumers on their pensions and retirement planning as part of their dashboard user journey. However, it will be very clear that it is “find and view” first—it is not a transactional service. If any services are provided subsequent to the “find and view” service, if they are regulated activities in their own right—for example, offering investment advice—that, too, would need to be regulated by the FCA. It is really clear to me that we must protect consumers when they are participating and using these dashboards, such that they are not inadvertently taken in by scammers or other people who may not be regulated.
That brings me on to the point about the third-party provision. We foresee that firms may wish to make their dashboard services more widely available by entering into arrangements with third parties. The new regulating activity allows for such arrangements while ensuring clear regulatory accountability of the dashboard operator. Circumstances will vary—and I am not able to give a practical example at the moment because, frankly, people are still figuring out how this would be commercially viable and what its opportunities for engagement are. But the activity of operating a pensions dashboard service may include taking regulatory responsibility for a third party involved in connecting to the MaPS digital architecture. That of course will need engagement with the FCA, which would need to be content and would need to ensure that the provider has followed the rules and any associated guidance, which will be very wide-ranging.
Protecting against scammers is one of the key things that we are thinking about. ID verification to even get into the system will be very important, and we need to make sure that the only dashboard operators that can connect to the central digital architecture are those that are FCA regulated, which obviously is the subject of the discussion today, and the MaPS dashboard. In addition, the FCA is looking at proposing further rules to reduce exposure to scams, including requirements for scam warnings and marketing restrictions. Obviously, these will be developed in the rules in due course.
The noble Lord, Lord Livermore, was absolutely right that there is no storage of data on the system per se, aside from caching, and individuals must pass the identity verification process to initiate a search. Indeed, they might give access to an agent, but they would be able to revoke that access at any time.
The noble Lord also asked whether the Government intend to use the OneLogin service. At the moment, the Money and Pensions Service is working to identify all possible options that may comprise its new identity service delivery model. That includes the GOV.UK OneLogin, but a decision has yet to be taken. The key focus for the Money and Pensions Service is to ensure inclusivity for individuals while meeting a verification standard that is appropriate, both through government, for state pensions, and to wider stakeholders.
I am slightly running out of things to say. I believe that I have covered everything, except the question about the date. The reason for the date is to allow the FCA to make its rules well in advance. I might write to the noble Lord just to check that we are absolutely clear. If it is 11 March, that is indeed quite soon. For the time being, I commend this Motion to the Committee.
Motion agreed.

Money Laundering and Terrorist Financing (High-Risk Countries) (Amendment) Regulations 2024

Tuesday 13th February 2024

(4 months ago)

Grand Committee
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Considered in Grand Committee
18:07
Moved by
Baroness Vere of Norbiton Portrait Baroness Vere of Norbiton
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That the Grand Committee do consider the Money Laundering and Terrorist Financing (High-Risk Countries) (Amendment) Regulations 2024.

Relevant document: 12th Report from the Secondary Legislation Scrutiny Committee. Special attention drawn to the instrument

Baroness Vere of Norbiton Portrait The Parliamentary Secretary, HM Treasury (Baroness Vere of Norbiton) (Con)
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My Lords, these regulations have been laid to amend the definition of high-risk third countries in the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, which I will refer to as the money laundering regulations.

The Government recognise the threat that economic crime poses to the UK and are committed to combating money laundering and terrorist financing. Illicit finance causes significant social and economic costs through its links to serious and organised crime. It also undermines the integrity and stability of our financial sector and can reduce opportunities for economic growth and legitimate business in the UK. The Government are bearing down on kleptocrats, criminals and terrorists who abuse the UK’s financial and services sectors. The Economic Crime and Corporate Transparency Act built on the earlier Economic Crime (Transparency and Enforcement) Act to ensure that the UK has robust, effective defences against illicit finance.

The money laundering regulations are at the centre of the UK’s legislative framework for tackling money laundering and terrorist financing. They set out various measures that businesses must take to protect the UK from illicit financial flows, such as conducting enhanced due diligence—EDD—in certain cases. EDD is required to manage and mitigate the risks arising from certain high-risk transactions or business relationships. Businesses must consider a wide range of multiple different factors when deciding whether there is a high risk of money laundering or terrorist financing in a particular situation. They include risk factors associated with the customer, product, service, transaction and delivery channel, as well as any geographical risk factors.

The MLRs set out that firms should consider the risk posed by customers or transactions relating to any countries which have been identified by credible sources, such as the IMF or the World Bank, as lacking effective systems; countries with significant levels of corruption or other criminal activity; or countries subject to sanctions, embargoes or similar measures. As well as these examples, EDD is required in any other case which by its nature can present a higher risk of money laundering or terrorist financing.

The measures being brought forward today relate to another of the specific situations in which regulated businesses must apply EDD, being in relation to any business relationship or transaction with persons established in a high-risk third country—that is, a country identified as such by the Financial Action Task Force, or FATF.

The Economic Crime and Corporate Transparency Act changed how high-risk third countries may be defined under the money laundering regulations, and this statutory instrument simply implements this change. It removes the separate list of countries from Schedule 3ZA and replaces it with an ambulatory reference to those countries listed by FATF, which is the global standard setter for anti-money laundering and counterterrorist financing. This means that countries listed by FATF will automatically be in scope of obligations under the regulations.

By taking this approach, we will ensure that the UK remains at the forefront of global standards on anti-money laundering and counterterrorist financing. This protects the UK financial system from illicit finance linked to the jurisdictions being listed. Where countries have made significant progress to improve their defences, it is equally important that we recognise that and promptly remove them from the scope of high-risk countries in the UK.

Ahead of this update, the UK and the FATF lists were already aligned. Indeed, since the creation of the UK list in 2021, the Government have always updated it to reflect changes to the FATF lists, and that remains our policy. This SI does not, therefore, add or remove any countries from scope, nor change the obligations on regulated businesses. It delivers on government policy in a streamlined way and ensures automatic alignment with the FATF lists without the need for frequent but fairly routine secondary legislation. It also ensures that firms will be notified in a timely manner of updates to the lists and their obligations, staying up to date as the risks change.

This statutory instrument has been reported as an instrument of interest by the Secondary Legislation Scrutiny Committee, which noted that it reduces parliamentary oversight of the process of adding or removing countries, although I note that of course it is government policy and would have continued to be government policy to introduce an SI every time the list changes. Therefore, in a sense this is automating the process. However, the Government are committed to keeping Parliament informed and will submit letters to the Libraries of both Houses at the conclusion of each FATF plenary meeting, when countries made have been added to or, indeed, removed from the FATF’s lists.

I also assure noble Lords that if at any time the Government saw fit to deviate from the FATF lists, they retain the authority and autonomy to do so. In such cases, a statutory instrument would be brought before Parliament for consideration.

I conclude by noting that the measures in respect of high-risk third countries are an important mechanism to mitigate the risks posed by illicit financial flows from overseas. We will continue to use this and, of course, many other tools available to us to respond to wider and emerging threats from other jurisdictions, including by applying financial sanctions as necessary. These amendments will enable the money laundering regulations to continue to work as effectively as possible to protect the integrity of the UK financial system. I beg to move.

Lord Sharkey Portrait Lord Sharkey (LD)
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My Lords, we support this very sensible SI and recognise the importance of the work FATF does in the fields of money laundering and terrorist financing. We recognise the importance of its lists of high-risk countries and the importance of the UK aligning itself with these lists, especially as they change from time to time.

Up until today, as the Minister said, we have kept ourselves aligned by using SIs to modify Schedule 3ZA to the MLRs. We have done this eight times; the last occasion was 8 January, a month ago. As the last of these SIs passed through the Commons, the Minister noted:

“I am aware that many noble Lords have expressed frustration at parliamentary time being taken up in the other place by such relatively routine matters to keep our high-risk third countries list aligned to the task force’s”.—[Official Report, Commons, First Delegated Legislation Committee, 8/1/24; col. 4.]


I do not know who those noble Lords were either. The Minister proposed a better way: the removal of the list in Schedule 3ZA and its replacement with, as our Minister said, an ambulatory reference to the FATF list itself.

This SI, which was debated last week in the Commons, does exactly that. It is true that it will undoubtedly save some parliamentary time, but it will remain important to ensure that all interested parties are aware of FATF list changes.

HMT issued updated guidance on high-risk third countries on 22 January. In passing, I should note that I could not find Russia on either list. Is that not a little odd? Coming back to the guidance issued by the Treasury, it would seem perfectly reasonable and not burdensome if HMT were to issue similar updated guidance after each of the three FATF plenary sessions that are held each year. Since Parliament will now lose an automatic mechanism for discussing changes to FATF lists, as the Minister said, I am very grateful for her confirmation of the commitments given to the SLSC to continue the practice of depositing in the Libraries of both Houses a summary of FATF meetings at which list changes are made and publishing an advisory note on the government website.

18:15
Lord Livermore Portrait Lord Livermore (Lab)
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My Lords, we support this SI. It is a common-sense approach to ensuring timely updates to the UK list of high-risk countries, and it retains the flexibility needed to ensure that other countries can be added via affirmative SI if that is deemed appropriate. I note that the Minister mentioned that letters will be placed in the Libraries of both Houses, but what mechanisms will exist under this new regime if noble Lords wish to raise questions or concerns about high-risk countries, should they have them?

I note that we debated the latest update to the list only a few weeks ago and that this SI does not make any further updates to the list of countries. I therefore have no additional questions.

Baroness Vere of Norbiton Portrait Baroness Vere of Norbiton (Con)
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My Lords, I am very grateful to both noble Lords for their support for this SI, which I believe is entirely sensible. One of the things that I was unable to bring out in the opening statement as to why I think it is so sensible is that one of the key things about us being aligned to FATF, and the timing of a country being listed by FATF and immediately going on to the list here, is that we can act globally and in a co-ordinated manner so that the international community can ensure that it acts together to magnify the preventive effects.

The noble Lord, Lord Sharkey, mentioned Russia. It is true that Russia is not currently on a FATF list as, of course, a cycle of mutual evaluations needs to be gone through. However, Russia is obviously subject to extensive sanctions by the UK. I think there is sometimes a little confusion about the money laundering regime and the sanctions regime. In the money laundering regime, you are regulated under the money laundering regulations. Therefore, as a regulated person you must do certain things. However, everybody needs to be aware of sanctions, sanctioned individuals and sanctioned organisations. Obviously, for Russia, that is quite significant.

That brings me on to notification. As committed to, we will place a letter in both Houses with a summary of the plenary and whether any countries have gone on or off any list. Perhaps we will provide a reminder to noble Lords as to who is currently on the two lists.

The noble Lord, Lord Livermore, asked how he could raise questions. I suggest that, in the first instance, I would write to the Minister. Obviously, one could use Parliamentary Questions, but a letter would be better and probably elicit a fuller response. If not, there is always the opportunity to request a meeting with the Minister. It is a very important issue and I do not think that there would be any reason at all for us not to agree to do that.

That is about keeping Parliament informed, but then, of course, the regulated organisations need to be kept informed as well. If, as a regulated organisation, you do not have a process for checking who is on or not on a FATF list, I am afraid you are not a particularly well-run regulated organisation. All sorts of different organisations are regulated, but they will have to have controls and processes in place. We would put a notice up, as we always do, in a specific place. Two things would then happen: the regulated organisation itself would see the update—I know that many thousands of them do—but the supervisors, who are the overarching body of the different types of regulated organisations, would also send out reminders to those organisations about any changes. So there are two lines of attack, but, frankly, it should be beholden on the organisation as a regulated body to keep itself in the loop.

With that, I commend the regulations to the Committee.

Motion agreed.
Committee adjourned at 6.20 pm.

House of Lords

Tuesday 13th February 2024

(4 months ago)

Lords Chamber
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Tuesday 13 February 2024
14:30
Prayers—read by the Lord Bishop of Lincoln.

Combating Disinformation: Freedom of Expression

Tuesday 13th February 2024

(4 months ago)

Lords Chamber
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Question
14:36
Asked by
Lord Strasburger Portrait Lord Strasburger
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To ask His Majesty’s Government what steps they are taking to protect freedom of expression in the course of their work on combating disinformation.

Lord McFall of Alcluith Portrait The Lord Speaker (Lord McFall of Alcluith)
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My Lords, the noble Lord, Lord Strasburger, is participating remotely.

Lord Strasburger Portrait Lord Strasburger (LD) [V]
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My Lords, I draw the attention of the House to my role as chair of Big Brother Watch and beg leave to ask the Question standing in my name on the Order Paper.

Viscount Camrose Portrait The Parliamentary Under-Secretary of State, Department for Science, Innovation and Technology (Viscount Camrose) (Con)
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Preserving individuals’ rights to freedom of expression underpins all the Government’s work on tackling disinformation. This right is upheld by the Online Safety Act, which protects freedom of expression by addressing only the most egregious forms of disinformation, ensuring that people can engage in free debate and discussion online. Under the Act, when putting in place safety measures to fulfil their duties, companies are also required to consider and implement safeguards for freedom of expression.

Lord Strasburger Portrait Lord Strasburger (LD) [V]
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I thank the Minister for his reply. Last year, Big Brother Watch exposed worrying overreach by the Counter Disinformation Unit in its attempts to prevent legitimate criticism of the Government by MPs, journalists and academics. Following the Government’s apology, could the Minister tell the House what, if anything, has changed, apart from the unit’s name? Could he please explain why the Government refuse to allow the Intelligence and Security Committee to oversee the work of what is now called the National Security Online Information Team?

Viscount Camrose Portrait Viscount Camrose (Con)
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First, the Counter Disinformation Unit has indeed changed its name to the National Security Online Information Team, to better reflect its role. I am not aware of the apology to which the noble Lord refers, but I will look into it. I have not heard of it. The NSOIT, as it is now called, does not target individuals, particularly not politicians or journalists. It does not even go after individual pieces of content but looks for trends across all items of content online. I will look into this case for an apology, but I am surprised by it because I am not aware of it.

Baroness Chakrabarti Portrait Baroness Chakrabarti (Lab)
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My Lords, the Question of the noble Lord, Lord Strasburger, requires a little further interrogation, because that report by Big Brother Watch suggested that during the pandemic, politicians, journalists and civil society campaigners from across the political spectrum were personally targeted for critiquing the Government’s handling of the pandemic. Given that report and these legitimate concerns, it would be very kind if the Minister and his colleagues would look into this further and write to the noble Lord, Lord Strasburger, and, indeed, to anyone else affected.

Viscount Camrose Portrait Viscount Camrose (Con)
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Yes, I am very happy to write any such letter. I confirm now in front of the House that the function of the NSOIT, formerly the Counter Disinformation Unit, is to analyse attempts to artificially manipulate the information environment for purposes of national security. It is not its function—and never has been its function, regardless of its name—to go after individuals, whether they are politicians, journalists, or anybody else. It looks for at-scale attempts to manipulate the information environment.

Lord Clement-Jones Portrait Lord Clement-Jones (LD)
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My Lords, it is clear we need to be assured that the rather concerning activities reported about the CDU treating political criticism as disinformation are no longer practised by NSOIT. Can the Minister explain where we can find a copy of NSOIT’s policies? Can he confirm whether it has a policy to prohibit it from flagging lawful domestic speech for terms of service violations to social media companies?

Viscount Camrose Portrait Viscount Camrose (Con)
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Information on NSOIT is posted on GOV.UK, and I am happy to share that location with the noble Lord. I can confirm not only that it is not the role of NSOIT or the CDU to go after any individuals, regardless of their political belief, but that it never has been. NSOIT looks for large-scale attempts to pollute the information environment, generally as a result of threats from foreign states. I am happy to say in front of the House that the idea that its purpose is also to go after, in some ways, those who disagree politically with the Government is categorically false.

Lord Bassam of Brighton Portrait Lord Bassam of Brighton (Lab)
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My Lords, the issue is much more complex than that. I am concerned that the unit to which the Minister referred seems to be concerned only about security issues now. In December, I asked the Minister about the rise of political deepfakes, which often originate from overseas and have the potential to undermine trust in political leaders and our wider democratic processes. With the Data Protection and Digital Information Bill currently before the House already containing measures on what the Government call “democratic engagement”, can I tempt the Minister to bring forward new anti-deepfake provisions to help preserve the integrity of our upcoming general election—and not just our election in a year of big elections?

Viscount Camrose Portrait Viscount Camrose (Con)
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Indeed. It is worth reminding the House that close to 2 billion people will go to the polls over this calendar year. A great many of those elections in which they participate will come under attack from malign foreign influences. Therefore, we have implemented the Defending Democracy Taskforce, chaired by the Security Minister, which set up a new unit last year specifically dedicated to safeguarding our coming election, whenever it may be. It continues to engage with various committees of Parliament and with the Electoral Commission. We will look carefully at any proposals on deepfake provisions in the DPDI Bill. Deepfakes are already illegal today if they violate either the foreign interference offence or the false communications offence.

Lord Fox Portrait Lord Fox (LD)
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My Lords, my noble friend Lord Strasburger asked about the parliamentary scrutiny of the unit. Does the Minister understand that, if there were to be proper scrutiny of the unit, some of the words that he uses to try to placate your Lordships’ House would have deeper resonance? Can he tell us why the ISC is not scrutinising the unit?

Viscount Camrose Portrait Viscount Camrose (Con)
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NSOIT is indeed scrutinised by Ministers; it sits within DSIT and then Ministers, as we see, come before this House to explain matters. As a national security team, I dare say that we would have some concerns about a standing report to Parliament about its activities, but I can continue to reassure the House on its role.

Lord Kirkhope of Harrogate Portrait Lord Kirkhope of Harrogate (Con)
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My Lords, can my noble friend the Minister explain how this very interesting unit is comprised? Who are the members of the unit and from where do they come?

Viscount Camrose Portrait Viscount Camrose (Con)
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The unit comprises civil servants who sit within DSIT, and it occasionally makes use of external consulting services. It adjusts its size and membership from within the DSIT team according to the nature of the threat at any given moment.

Baroness Fox of Buckley Portrait Baroness Fox of Buckley (Non-Afl)
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My Lords, on transparency: we would not know about the Counter Disinformation Unit if it was not for Big Brother Watch, which we owe great thanks for its service on that. The Minister seems to know what disinformation is. Can the Government tell us how they identify what is to be labelled as disinformation? Who checks the fact checkers? For example, BBC Verify seems keen to expose everybody else’s disinformation but seems blind to its own egregious examples of inaccurate information.

Viscount Camrose Portrait Viscount Camrose (Con)
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Well, the Government are clear, as is NSOIT, that disinformation refers to the deliberate attempt to mislead by placing falsehoods into the information environment. As part of the Civil Service, NSOIT would have robust internal measures to verify and check its own work, and indeed it reports regularly across government and to Ministers.

Lord Kamall Portrait Lord Kamall (Con)
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My Lords, can my noble friend the Minister explain what guidance is given to the unit to distinguish between disinformation and difference of opinion?

Viscount Camrose Portrait Viscount Camrose (Con)
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Disinformation is a deliberate falsehood. A difference of opinion is generally something of democratic importance or of journalistic or pluralistic importance, which it is very important to protect and which the Online Safety Act took very considerable measures to safeguard over its passage.

Baroness Jones of Moulsecoomb Portrait Baroness Jones of Moulsecoomb (GP)
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My Lords, does this unit check on government disinformation such as the Rwanda Bill?

Viscount Camrose Portrait Viscount Camrose (Con)
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I do not believe that this unit has been working on the Rwanda Bill.

Lord Pannick Portrait Lord Pannick (CB)
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My Lords, if this unit consists of civil servants and external advisers, why is it impermissible for its work to be supervised by a parliamentary committee composed of privy counsellors?

Viscount Camrose Portrait Viscount Camrose (Con)
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It was set up as an internal part of DSIT. It reports to Ministers and Ministers provide the oversight. I take the point, but it is a national security institution and, as such, the Government have a strong preference for not allowing it openly to share national security information for fear of benefiting those who wish us harm.

Recycled Plastics

Tuesday 13th February 2024

(4 months ago)

Lords Chamber
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Question
14:47
Asked by
Baroness Bennett of Manor Castle Portrait Baroness Bennett of Manor Castle
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To ask His Majesty’s Government what assessment they have made of reports that a global oversupply of petrochemicals has led to recycled plastics failing to compete with new, and whether they plan to take any action in response.

Lord Benyon Portrait The Minister of State, Department for Environment, Food and Rural Affairs, and Foreign, Commonwealth and Development Office (Lord Benyon) (Con)
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My Lords, we are aware of the oversupply of petrochemicals in the global market, but this is a matter for industry to lead on. It is estimated that businesses which are members of the UK Plastics Pact have, on average, increased the recycling content of their packaging from 8.5% in 2018 to 24.1% in 2023. The Government will continue to readdress the balance through measures such as the coalition and packaging reforms and the plastic packaging tax.

Baroness Bennett of Manor Castle Portrait Baroness Bennett of Manor Castle (GP)
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I thank the Minister for his Answer. However, there was, for example, three times as much ethylene produced last year as there was demand for it. As with fossil fuels used for energy, is it not time to look seriously on a global scale at restrictions on production, not just working on the demand side, particularly given that we are all bearing the externalised costs imposed environmentally and financially in terms of waste disposal and the companies are taking away profits for unnecessary products?

Lord Benyon Portrait Lord Benyon (Con)
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The noble Baroness raises a very good point. Domestically, we are seeking to increase the supply of recycled plastics and reduce the demand, through regulation and tax, for virgin plastics, but we recognise that whatever we do domestically will not help to solve this global problem. That is why we are a founding member of the High Ambition Coalition to End Plastic Pollution. At the United Nations Environment Assembly in March, we drove through, with Rwanda and Peru, a commitment to see an end to plastic pollution by 2042.

Baroness Meacher Portrait Baroness Meacher (CB)
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My Lords, the Birmingham expert commission on plastics and the environment, which I chaired, recommended the introduction of a sliding-scale tax on plastic packaging. Can the Minister assure the House that the Government will introduce such a sliding-scale tax, which would greatly benefit the environment?

Lord Benyon Portrait Lord Benyon (Con)
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We are looking at all sorts of reforms to our measures. The plastic packaging tax increases with inflation and has gone up to £217 per tonne this year. We are continuing to look at extended producer responsibility reforms and to see whether the work that the noble Baroness has talked about has an application in terms of how we deliver these regulations.

Baroness Bakewell of Hardington Mandeville Portrait Baroness Bakewell of Hardington Mandeville (LD)
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My Lords, we need to use less plastic and actually recycle what we do use. There is enough floating around the planet already; there is no good reason to produce more. Will the Minister tell us whether the Government are going to introduce the deposit return scheme in this Parliament, and when they expect the global plastics treaty to be agreed?

Lord Benyon Portrait Lord Benyon (Con)
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On the deposit return scheme, we have a date for implementation of October 2025. Our social research found that 74% of respondents supported it and 83% of our consultation responses supported its implementation. We think that there are 3,000 to 4,000 jobs if we get this right. On the international agreement, as I said, the UK is a founder member of the high ambition coalition, we are driving it forward and we need other countries to do it as well. Some 90% of the pollution in our oceans that comes from rivers comes from just 10 rivers—eight of them in Asia and two in Africa. That is an indication of the global problem that we are facing.

Lord St John of Bletso Portrait Lord St John of Bletso (CB)
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My Lords, there are growing reports of the detrimental impact of microplastics in the food and water supplies, which can indirectly impact on our health. What are the Government doing to further research this problem and educate the public on this risk, and what measures are being taken to mitigate it?

Lord Benyon Portrait Lord Benyon (Con)
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There are human health issues related to plastics pollution and huge environmental damage done. At a recent Ospar convention, I saw a fulmar having its guts opened up for us to look at, and you can see the plastics in its guts system and its gizzard. It just gives you an idea of how many thousands—millions, even—of birds around the world are dying because of plastics pollution. We need to have a greater understanding of the impact on human health, and that is why our One Health agenda is really important in this field.

Baroness Hayman of Ullock Portrait Baroness Hayman of Ullock (Lab)
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My Lords, the Minister talked about the deposit return scheme, and said that it would be coming in in October 2025. Why has it taken so long? People are incredibly frustrated about this; they want it introduced as quickly as possible. Is the delay partly because the Government are reconsidering its scope?

Lord Benyon Portrait Lord Benyon (Con)
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No, we want this to be a United Kingdom scheme. The noble Baroness will be aware of complications in Scotland, and we want to make sure that we are introducing this in conjunction, so that we do not have booze cruises from Scotland to England to buy drinks that will not fall within that scheme. We now think that we can work with this. In the context of the whole piece, with our plastics packaging tax, and recycling increasing dramatically over the last decade, we are now requiring households right across the country, uniform across the local authorities, to recycle all six waste streams by 2027. With the bag charge, which has seen a 98% reduction in the use of those, and the introduction of the banning of single-use plastic straws and a whole range of other single-use plastics, I think even the noble Baroness would admit that we are doing our best.

Baroness Bloomfield of Hinton Waldrist Portrait Baroness Bloomfield of Hinton Waldrist (Con)
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My Lords, my noble friend the Minister will be aware that Wales led the way in introducing a charge for single-use plastic bags. It was so successful that it was followed in short order by Northern Ireland, Scotland and then England. However, in respect of the ban on single-use plastics, on which, again, Wales is trying to lead the way, I am not quite so sure of the evidence. Will the Minister say what his opinion is of what the effect of banning single-use plastics might be?

Lord Benyon Portrait Lord Benyon (Con)
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Our restrictions on straws, stirrers and cotton buds have had a big impact. These items used to appear on the top-10 littered items lists but no longer do so. According to estimates in our impact assessment, England used 1.1 billion single-use plates and 4.25 billion items of single-use cutlery per year, most of which were plastic but only 10% were recycled, so banning these items will have a significant impact on reducing plastic waste.

Baroness Bennett of Manor Castle Portrait Baroness Bennett of Manor Castle (GP)
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My Lords, the Minister referred to strong public support for recycled plastics rather than virgin plastics, yet it is clear that the market mechanisms are simply not delivering the products that people can buy. Individual action will not work here. Do we not need to go much further and faster to ensure that we get to the circular economy that the Government stand for, and, indeed, the position where the polluter pays, which is the Government’s position?

Lord Benyon Portrait Lord Benyon (Con)
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Absolutely. The Government’s 25-year environment plan sets out our ambition to eliminate all avoidable plastic waste by 2042. The resources and waste strategy, which was published in 2018, sets out how we are going to achieve that ambition, mainly by creating precisely what the noble Baroness said—a circular economy. We are not the single repository of good ideas here so, if the noble Baroness has a suggestion that works with business and the end-user, particularly households, we would be glad to hear it.

Lord Berkeley Portrait Lord Berkeley (Lab)
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My Lords, in response to the question from my noble friend on the Front Bench, the Minister said something about Scotland being different and that being a problem. Could he explain to noble Lords who are ignorant about these things what the problem is and what the solution might be?

Lord Benyon Portrait Lord Benyon (Con)
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I do not want to rake over the Scottish National Party’s grief, but it sought to have a different scheme from the rest of the United Kingdom—for whatever reason we can only conjecture. It is important to have one system across the whole United Kingdom. Many businesses and individuals were fiercely opposed to what was proposed to be introduced in Scotland, and we are glad that the Scottish Government pulled it. We can now move forward with one scheme that is effective across the United Kingdom and can really deliver. Those of us who can remember how deposit schemes worked in the past can see how it can work in the future. What was created in Scotland through certain applications of that scheme would have proved disastrous. We want to make sure that this happens properly across these islands.

Lord Dobbs Portrait Lord Dobbs (Con)
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My Lords, I understand that some local authorities require seven different recycling bins, which threatens chaos. Does the Minister believe that the answer to our recycling challenge is to increase the number of recycling bins for us all or to make central recycling facilities work much more effectively?

Lord Benyon Portrait Lord Benyon (Con)
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The noble Lord will know that different local authorities have different ways of doing this. There are technologies now that can separate plastics and other recyclable waste, but one undoubtedly needs a separate receptacle for food and various other wastes. I do not see how our proposal would lead to seven different recycling bins; it would just not work in those circumstances.

Ofsted: Pupil Absence Rates

Tuesday 13th February 2024

(4 months ago)

Lords Chamber
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Question
14:57
Asked by
Lord Watson of Invergowrie Portrait Lord Watson of Invergowrie
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To ask His Majesty’s Government what plans they have to empower Ofsted to review pupil absence rates as part of their school inspections.

Baroness Barran Portrait The Parliamentary Under-Secretary of State, Department for Education (Baroness Barran) (Con)
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My Lords, improving attendance is a top priority for this Government, because it is vital for children’s learning, well-being and long-term development. As part of its existing framework, Ofsted expects schools to do all they reasonably can to achieve the highest possible attendance. Inspectors will check that schools have a clear understanding of the causes of absence in their school and that the necessary strategies are in place to improve attendance.

Lord Watson of Invergowrie Portrait Lord Watson of Invergowrie (Lab)
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I thank the Minister for that Answer. She knows that a child is deemed to be persistently absent if they have missed 10% or more of lessons. Across the two school terms prior to the current one, around one in five children were persistently absent from primary and secondary schools, which is more than double the figure five years ago. So there is an existential crisis and a safeguarding issue, because the link between absenteeism—children missing from school—and children taken into home education is strong. Ofsted and the Children’s Commissioner want to see a register of children not in schools, which the Government have said they support, so why was that measure not included in the King’s Speech, which was not exactly overloaded with legislation?

Baroness Barran Portrait Baroness Barran (Con)
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The Government remain committed to legislating to set up a register of children not in school. The noble Lord may be aware that the honourable Member for Meon Valley has introduced a Private Member’s Bill, and we will be working hard with her as she progresses that.

Lord Baker of Dorking Portrait Lord Baker of Dorking (Con)
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My Lords, when children of 14 decide to leave their school and go to a university technical college, their absence rate falls dramatically compared to that at their previous school. They like going to a UTC because they can work in workshops as well as classrooms, they can learn by their hands as well as their brains, and they visit companies looking for jobs. I assure your Lordships that, unless that sort of education is deeply embedded, the absence rates of disadvantaged students will not fall, because they are told all the time by the Department for Education that they must study eight academic subjects. We need a curriculum fitted to this century.

Baroness Barran Portrait Baroness Barran (Con)
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My noble friend needs to consider also the patterns of attendance before the pandemic. The curriculum was the same before the pandemic as post-pandemic, but attendance rates are very different. Linking absence entirely to the curriculum may require further consideration.

Lord Laming Portrait Lord Laming (CB)
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My Lords, the Minister will recall that in the Children’s Commissioner’s latest report, on absenteeism, she says:

“For some, the pandemic has led to disengagement. Schools and families have said that they feel like the social contract between parents and schools has been broken”.


Could we be assured that an Ofsted report will consider also the positive and creative engagement of parents in school life?

Baroness Barran Portrait Baroness Barran (Con)
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The noble Lord makes a good point. We need not wait just for Ofsted in order to look at the positive engagement of parents. Many of the schools I visit are focused substantially on that and on making sure that parents get positive feedback about their children in school—not just a call when their child is not there.

Lord Addington Portrait Lord Addington (LD)
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My Lords, what are the Government doing about people who attend unregistered —effectively illegal—schools, often of a very dubious religious nature? What are they doing to eradicate this and to make sure that children receive an education that enables them to stand on their own two feet outside closed communities?

Baroness Barran Portrait Baroness Barran (Con)
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The noble Lord will be aware that Ofsted has been involved in a number of prosecutions of illegal schools. We remain very concerned about those—indeed, the Private Member’s Bill to which I referred earlier will go some way to addressing this issue.

Lord Bishop of Lincoln Portrait The Lord Bishop of Lincoln
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My Lords, I express gratitude to the Minister for the way in which the data has been produced; I understand that more is to come, and that will be examined in great detail. As an unrepentant pedant, though, I am as interested in the adverbs as the nouns—in how the data is to be applied. How do we get more children across the line in terms of the culture of school? Some years ago, the Children’s Society’s Young Commissioners looked deeply into child poverty in school and how children are identified as those, for instance, receiving free school meals or who are not able to purchase the very expensive school uniforms from the agreed seller. How is school culture being encouraged by government further to change in order to get children across the line? How, indeed, do we expect Ofsted to become the “office of encouragement”?

Baroness Barran Portrait Baroness Barran (Con)
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As the right reverend Prelate knows, Ofsted is about to start its Big Listen exercise, so maybe that is one of the questions that could be asked. He asks an important question about how the data will be used. There is more we can do within the department on analysing and breaking down the data into more actionable insight for schools, and we will start engaging with trusts and local authorities on that very shortly. We need to be careful to make sure that children who really have major barriers to coming to school and whose attendance is very poor are not conflated with those who are in school nine or nine and a half days out of 10. It is about how we get those ones, too, over the line.

Baroness Wilcox of Newport Portrait Baroness Wilcox of Newport (Lab)
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We have a crisis of attendance in our schools. Research from the Centre for Social Justice reveals that more than one in four parents think that school is not essential every day. It is essential. What can the Government do to repair the relationship between schools and families, which has deteriorated greatly in recent years?

Baroness Barran Portrait Baroness Barran (Con)
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Again, we have to be very careful not to make sweeping generalisations. We are seeing lots of green shoots in terms of attendance and higher-level attendance, particularly in transition year groups such as year seven, when children go from primary to secondary school. There are important things we can build on, such as having open, honest, regular communication with parents, pointing out if a child has not been coming into school and trying to understand why. But more importantly, celebrating with a parent a child’s attendance or performance in school is to be encouraged.

Baroness Blackwood of North Oxford Portrait Baroness Blackwood of North Oxford (Con)
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My Lords, it is absolutely right to tackle school absence, but as we approach Rare Disease Day, I draw attention to the huge pressures faced by children and families with rare and undiagnosed conditions in trying to remain in education. The lack of specialist resources and awareness act as barriers. Understandably, in these complex situations it is not always possible to avoid absence. Will the Minister meet with charities and family representatives to see how we can design these policies without increasing the pressures on those families?

Baroness Barran Portrait Baroness Barran (Con)
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I would be delighted to meet with the charities and families to which my noble friend refers. She makes an important point, and it goes back to the point made earlier by the noble Baroness—that parents need to feel that the response they are getting from their school is about their child. To every parent, their child is very special.

Baroness Bull Portrait Baroness Bull (CB)
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My Lords, we know that children with profound and multiple learning difficulties, physical disabilities and social, emotional and mental health special educational primary needs have the highest rates of school absence. In spring 2023, 384,202 children with some form of identified special educational need were persistently absent. Given what we know about the link between persistent absenteeism and life chances, does the Minister agree that this risks widening the gap between the more advantaged and the less advantaged in our society? What are the Government doing to support children with special educational needs and disabilities to succeed in school?

Baroness Barran Portrait Baroness Barran (Con)
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The Government are doing a great deal, starting with their investment in a dramatic increase in the number of specialist places for children with the kinds of special needs and disabilities the noble Baroness refers to, through our attendance hubs programme in particular. I met a group of chief executives of specialist multi-academy trusts which are working with children with special educational needs and those in alternative provision. We are seeking to identify best practice and making sure it is a shared peer to peer.

AI: “Nudify” Apps

Tuesday 13th February 2024

(4 months ago)

Lords Chamber
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Question
15:07
Asked by
Baroness Owen of Alderley Edge Portrait Baroness Owen of Alderley Edge
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To ask His Majesty’s Government whether they plan to prohibit “nudify” apps which create intimate images of other people using artificial intelligence without their consent.

Viscount Camrose Portrait The Parliamentary Under-Secretary of State, Department for Science, Innovation and Technology (Viscount Camrose) (Con)
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My Lords, the Online Safety Act introduced new offences which criminalised the sharing of, or threatening to share, intimate images, including deepfakes, without consent. Where individuals create these images using any kind of technology and share or threaten to share them online, they may be committing an offence. The Act will additionally give online platforms new duties to tackle this content by removing it, including where it has been created via AI apps.

Baroness Owen of Alderley Edge Portrait Baroness Owen of Alderley Edge (Con)
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I thank my noble friend the Minister for his Answer. There has been a huge increase in the use of nudify apps and the creation of deepfake porn since the Law Commission stated that it was less sure that the level of harm caused by the making of these images and videos was serious enough to criminalise. Does my noble friend agree that the making of these images and videos without a person’s consent does in fact cause serious harm, regardless of whether a person is aware of it, and that, if allowed to continue, represents a real threat to all women?

Viscount Camrose Portrait Viscount Camrose (Con)
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I start by acknowledging that the creation of intimate image deepfakes using AI or other means is abusive and deeply distressing to anyone concerned and very disturbing to all of us. The Law Commission consulted widely on this, looking at the process of taking, making, possessing and sharing deepfakes, and its conclusion was that the focus of legislative effort ought to be on sharing, which it now is. That said, this is a fast-moving space. The capabilities of these tools are growing rapidly and, sadly, the number of users is growing rapidly, so we will continue to monitor that.

Lord Browne of Ladyton Portrait Lord Browne of Ladyton (Lab)
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My Lords, the applications referred to in the excellent Question put by the noble Baroness, Lady Owen, represent a dangerous and overwhelmingly misogynistic trend of non-consensual deepfake pornography. They are able to be developed and distributed only because of advances in AI, and sit alongside the use of deepfakes for political disinformation and fraud. Polling suggests public ambivalence towards AI but near unanimity around deepfakes, with 80% of people supporting a ban, according to a recent YouGov survey. Cloud computing and services hosting AI models are essential for deepfake creation, and the fact that all major cloud suppliers have a presence in the UK empowers our Government uniquely to enforce best practice. Does the Minister agree that our regulatory system should not merely ban deepfakes but go further, imposing upon the developers a duty to show how and in what way they are applying existing techniques and restrictions that could prevent their creation in the first place?

Viscount Camrose Portrait Viscount Camrose (Con)
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An outright ban on the creation of any deepfake material presents a number of challenges, but obviously I applaud the sentiment behind the question. With respect particularly to deepfakes involved in intimate image abuse, we are clearly putting in place the offence of sharing, whether as part of the new intimate image abuse offences in the Online Safety Act that commenced two weeks ago, as part of the Criminal Justice Bill shortly to come before your Lordships’ House, or indeed under the existing child sexual exploitation and abuse offences. There are severe penalties for the sharing of intimate image abuse deepfakes, but it is a fast-moving space and we have to continue to monitor it.

Lord Clement-Jones Portrait Lord Clement-Jones (LD)
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My Lords, it is quite clear that simply banning the sharing of these deepfakes is not sufficient. This is an issue that concerns us all, whether in relation to sexual images, fraud or misinformation. Can the Government not overcome their reluctance to regulate AI? What evidence would persuade them to go further and make sure that the creators of these deepfakes are liable?

Viscount Camrose Portrait Viscount Camrose (Con)
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As regards the overall regulation of AI, I hope that noble Lords have had a chance to peruse the Government’s response to the AI White Paper consultation. It makes the argument very clearly that there will come a time when it is right to legislate to create binding rules on all creators of AI. When that time comes, due to the policies that we are putting in place, we will have an agreed risk register informing us. We will have set up monitoring and evaluation techniques, again gathering evidence. We will have working relationships with the AI labs, defined procedures for the creation of AI, and regulators trained to regulate AI within their own sectors. That means that, when we do regulate AI, it will be done in a targeted and sophisticated way, on the basis of evidence.

Lord Bassam of Brighton Portrait Lord Bassam of Brighton (Lab)
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My Lords, the Government have been far too complacent on this issue. During the passage of the then Online Safety Bill, we warned a number of times that, given that this is a fast-moving technology, as the Minister says, the Government needed to get ahead of the game. Given the proliferation of these ghastly images and the appalling impact this has on people’s lives, does the Minister now agree that neither the emergence of these apps nor their misuse is surprising? If that is the case, why did the Government not broaden the scope of their amendments when they had the opportunity to do so? Will the Minister now look for ways in which we can plug the gaps that are clearly emerging?

Viscount Camrose Portrait Viscount Camrose (Con)
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As the noble Lord said, it is a fast-moving space, and that requires an adaptive, agile response in legislating for it. That is the approach that we are taking. As to the argument that we can now see that it is not working, I am not sure that that is the case. The intimate image abuse offences commenced on 31 January—two weeks ago. I am pleased to see that, yesterday, we had our first cyberflashing conviction under those provisions. Using an evidence base, looking forward, we will have to consider carefully what is working before we go ahead and implement further bans.

Baroness Foster of Aghadrumsee Portrait Baroness Foster of Aghadrumsee (Non-Afl)
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My Lords, during the last Assembly election in Northern Ireland, two female candidates from either side of the community in Northern Ireland were targeted with deepfake porn, which was solely designed to damage their chances in that election. We know the number of people who will be going to the polls in the next year. Surely the Minister and the Government need to work with the Electoral Commission to raise this issue, because it is a very important issue in democracy for female candidates.

Viscount Camrose Portrait Viscount Camrose (Con)
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I absolutely agree, and the instance that the noble Baroness described is deplorable. I am pleased to say two things very briefly. First, the sharing she describes now carries, as a base offence, up to six months in prison; if, as in the case the noble Baroness put forward, the sharing is designed for the purposes of malice or gaining sexual gratification, that sentence goes up to two years. That regime is now live. On elections, we have set up the Defending Democracy Taskforce, with a new unit implemented last year specifically dedicated to safeguarding the election against such threats.

Baroness Chakrabarti Portrait Baroness Chakrabarti (Lab)
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My Lords, the noble Baroness, Lady Owen, asked a Question that was forensic, specific, nimble and agile—all adjectives that the Minister keeps using: “Why not ban these nudify apps?”. Why not ban the tools of the wicked trade, rather than waiting for individuals to misuse them? What is the positive use of this? Is it that big tech is now so deep in our politics that we do not dare regulate this technology to make sure that it is not used for ill?

Viscount Camrose Portrait Viscount Camrose (Con)
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The reason the making is not banned is that the sharing is banned, and the reason we did that is that Law Commission—as set out very clearly in its document—made the argument that this was the most appropriate way to have a coherent and effective body of law preventing this deplorable misuse of technologies.

Lord Archbishop of York Portrait The Archbishop of York
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My Lords, it would be very helpful if the Minister could explain. If I heard him correctly, he said that sharing has a six month ban but for malicious sharing it could be up to two years. Could he explain what non-malicious use would be?

Viscount Camrose Portrait Viscount Camrose (Con)
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There is a base offence in the law of sharing intimate images without consent or the reasonable belief of consent. That can extend to two years if the intent is to cause alarm, distress or humiliation, or if the purpose is to gain sexual gratification. Crucially, there is an offence of threatening to share these materials which also carries a two-year penalty.

Developing World: Debt Reduction

Tuesday 13th February 2024

(4 months ago)

Lords Chamber
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Question
15:18
Asked by
Lord Collins of Highbury Portrait Lord Collins of Highbury
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To ask the Secretary of State for Foreign, Commonwealth and Development Affairs what recent discussions he has had with international counterparts on a strategy to reduce debt in the developing world.

Lord Cameron of Chipping Norton Portrait The Secretary of State for Foreign, Commonwealth and Development Affairs (Lord Cameron of Chipping Norton) (Con)
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My Lords, we set out our commitments on developing countries’ debt in our international development White Paper. The Treasury and FCDO regularly engage with international partners to address rising debt vulnerabilities in developing countries. The UK also co-ordinates with other official creditors to provide debt restructurings where needed, both at the Paris Club and via the G20 common framework.

Lord Collins of Highbury Portrait Lord Collins of Highbury (Lab)
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My Lords, after Covid, we had the common framework from the international community. Sadly, only four countries have applied. Certainly, the situation is getting worse, and not better, in terms of debt. Does the noble Lord accept that a huge step forward would be to agree with global partners on a workable definition of debt sustainability to provide countries in debt distress a more level playing field?

Lord Cameron of Chipping Norton Portrait Lord Cameron of Chipping Norton (Con)
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I thank the noble Lord for his question. We are happy to accept the IMF definition of debt sustainability and to use it as a baseline. We are happy to look at other ideas but, given the IMF’s role, that makes sense. I completely accept what lies behind the noble Lord’s question: 58% of low-income countries are now either in debt distress or at risk of it, so he raises an important point. However, I think the definition is done by the IMF.

Baroness Northover Portrait Baroness Northover (LD)
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My Lords, climate change is already hitting the poorest the worst and the most, often in indebted countries. Although it is welcome that a loss and damage fund was agreed at the last COP, does the Foreign Secretary agree that what has been pledged so far—including, I am afraid, by the UK—is totally inadequate? Does he further agree that it is not only right to scale this up but in our interest, as we seek to reduce the conflict and migration that are likely to be caused by climate change, which will be much more costly?

Lord Cameron of Chipping Norton Portrait Lord Cameron of Chipping Norton (Con)
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We have doubled our commitments to climate finance. One of the successes of COP was that the climate finance funds are now considerable, running into many billions. I identify the problem more as small countries, particularly island and developing states, not being able to access that money because they do not have the expertise, the lawyers, the bankers, the officials and so on. That is a problem that my officials are trying to solve. In the area of debt itself, the climate resilience debt clauses that we are now writing into debt, which give states a holiday from debt repayments if they suffer a climate disaster or some other unforeseen event, can be a big part of the future too.

Lord Alton of Liverpool Portrait Lord Alton of Liverpool (CB)
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Will the Foreign Secretary confirm that, through China’s belt and road programme, developing nations are estimated to be indebted to China to the tune of more than $1 trillion? Does he share the view of Parliament’s Intelligence and Security Committee that it would be naive not to see how such punitive debt in countries such as Sri Lanka—which is $47 billion dollars in debt, half to China—can be used by China to buy support in the UN, to expand its military presence and for leverage in domestic and international institutions? How are we countering this?

Lord Cameron of Chipping Norton Portrait Lord Cameron of Chipping Norton (Con)
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One of the most important ways to counter it is by offering an alternative, so that when countries are developing there are other offers on the table. That is why the expansion of British International Investment—what used to be the Commonwealth Development Corporation—is so important. We are also countering it through the expansion of the multilateral development banks, and in our White Paper we demonstrate how we can expand their balance sheets and get them to lend more. However, the noble Lord makes a very good point: if we look back 10, 15 or 20 years, when we were running debt forgiveness programmes to help highly indebted countries, we see that it was mostly Paris Club countries such as France, Germany, Britain and America that were responsible for the debt, so if we wanted to write it off then we could. Now that so much of the debt owed is to China, which does not believe in debt write-offs, we have to find other ways of delivering restructurings to help those countries which have got into trouble.

Lord Hamilton of Epsom Portrait Lord Hamilton of Epsom (Con)
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My Lords, if we write off the debt of these developing countries, what is to stop them running up more debt in future?

Lord Cameron of Chipping Norton Portrait Lord Cameron of Chipping Norton (Con)
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As ever, my noble friend makes a very good point. If we look back at the successful programmes that there were, such as the heavily indebted poor countries initiative, we see that they helped, but many of those countries have gone back into debt—although the situation is not as bad as it was before: the debt-to-GDP ratios in very indebted countries is some 60%, whereas it had got to 100%. One of the best things we can do for those countries is to help them to have better fiscal systems so they can raise their own taxes. I know that noble Lords like a Rwanda update: we have been working with that country since the 1990s and helped it to increase its tax revenue tenfold, and its ratio of tax to GDP has doubled from 8% to 16%, the highest in the region. That is a better thing to do in many instances than lending those countries money.

Lord Sikka Portrait Lord Sikka (Lab)
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My Lords, a major reason for the indebtedness of developing countries is that too many multinational corporations operating in them dodge taxes by shifting profits to low-tax or no-tax jurisdictions. The IMF estimates that around $213 billion of taxes are lost each year. An earlier Prime Minister introduced the Finance Act 2016 and promised that companies would publish a public form of country-by-country reporting so that there would be some visibility of the profits shifted by UK companies, but later Governments never honoured that commitment. Could the Foreign Secretary have a word with the current leaders of the Government and try to revive that commitment?

Lord Cameron of Chipping Norton Portrait Lord Cameron of Chipping Norton (Con)
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I think that the noble Lord refers to what was agreed at the G8 in Northern Ireland in 2013, where a whole series of steps forward were made to make sure that companies were not doing what is known as base erosion and profit shifting and not paying their taxes in countries where they should. To be fair to the former Prime Minister, who is now the Foreign Secretary, we did make some progress, and I think the OECD would say that it has made a lot of progress, but I will certainly check up on the noble Lord’s point.

Lord Naseby Portrait Lord Naseby (Con)
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On the question of Sri Lanka, will my noble friend recognise the way in which Her Majesty’s Government, to whom I give particular thanks, through the IMF, were very firm to the Government of Sri Lanka about what they should do? The Sri Lankan Government responded, which means that the people of Sri Lanka can now move forward. I believe that that is as good a case history as we will find in recent times.

Lord Cameron of Chipping Norton Portrait Lord Cameron of Chipping Norton (Con)
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My noble friend is absolutely right that Sri Lanka is in debt distress; it has been working through a programme with the IMF. We wish the new Government in Sri Lanka well as they go through this and try to make sure that they can build a brighter future for that country.

Lord Collins of Highbury Portrait Lord Collins of Highbury (Lab)
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My Lords, in introducing the White Paper, Andrew Mitchell said that it cannot be right for individuals in this country to borrow money at 4% or 5%, while for developing countries that are addressing such huge issues, the cost of borrowing is so high. What discussions have the noble Lord’s officials had regarding private creditors holding low-income country debt? Does he agree that a fairer system is needed between private creditors and countries in debt distress?

Lord Cameron of Chipping Norton Portrait Lord Cameron of Chipping Norton (Con)
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First, I congratulate the noble Lord on joining a club of which I am a member, in being personally sanctioned by Vladimir Putin. It is a badge I wear with honour, and I am sure he will too.

Lord Cameron of Chipping Norton Portrait Lord Cameron of Chipping Norton (Con)
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The noble Lord is in very good company—I follow these things very closely.

The noble Lord is absolutely right about the importance of making sure that we do not have so many private sector holdbacks that hold up the vital debt restructuring of countries that get into trouble. We are trying to use things such as collective action clauses that work on bond issues—so they cannot hold out against repayment —as well as the majority voting provisions in new debt issuances so that private sector lenders are not stopping a country getting the debt restructuring they need.

Lord Purvis of Tweed Portrait Lord Purvis of Tweed (LD)
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I agree with the Foreign Secretary about increasing the capacity of Governments’ treasuries and their finance ministries to collect their own revenues, as well as trade facilitation, so that those trade ministries have greater capacity to trade out of poverty. I declare an interest as the co-chair of the All-Party Group on Trade out of Poverty. Does the Foreign Secretary believe that it was a mistake by some of his predecessors to cut UK support for exactly those processes? Since he is now passionate about this, and I agree with him, will he restore that funding?

Lord Cameron of Chipping Norton Portrait Lord Cameron of Chipping Norton (Con)
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One of the great things that was done while I was out of government is one of the Government’s best-kept secrets, the developing countries trade system, which is more generous to the poorest countries in the world than the EU or the US. It is one of the most generous systems in the world, so in terms of helping countries to trade out of poverty, this Government have an excellent record.

Lord Bellingham Portrait Lord Bellingham (Con)
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Further to the question from the noble Lord, Lord Purvis of Tweed, surely we now need to double down on opportunities to sign bilateral trade treaties with different countries, in sub-Saharan Africa in particular. If they can increase their wealth through trade, obviously they will be able to pay off their debt in the future. Can my noble friend say something about those bilateral trade treaties that we are now able to sign post leaving the EU?

Lord Cameron of Chipping Norton Portrait Lord Cameron of Chipping Norton (Con)
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My noble friend asks an important question about how we prioritise the trade deals that we are trying to do. For the poorest countries, the DCTS—the Developing Countries Trading Scheme—is there. Our priorities in terms of trade deals are with India and the Gulf Cooperation Council, which are very complex and need a lot of work. I think that is the right way round.

Children in Gaza

Tuesday 13th February 2024

(4 months ago)

Lords Chamber
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Question
15:29
Asked by
Baroness Bennett of Manor Castle Portrait Baroness Bennett of Manor Castle
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To ask the Secretary of State for Foreign, Commonwealth and Development Affairs what his Department is doing to ensure the lives and security of the children of Gaza.

Lord Cameron of Chipping Norton Portrait The Secretary of State for Foreign, Commonwealth and Development Affairs (Lord Cameron of Chipping Norton) (Con)
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My Lords, the best way to address the humanitarian situation is by ending the fighting as soon as possible. That is why I have repeatedly said that an immediate pause in fighting is necessary. UK aid is saving children’s lives. We are doing everything we can to get more aid into Gaza and have trebled our aid commitment to the Occupied Palestinian Territories. This includes targeted support for children through our £5.75 million contribution to UNICEF. Children are also benefiting from life-saving food, shelter and health support that we are providing through partnerships with other UN agencies, NGOs and the Red Crescent societies.

Baroness Bennett of Manor Castle Portrait Baroness Bennett of Manor Castle (GP)
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I thank the noble Lord, but surely a pause in fighting is not enough. We need a permanent ceasefire now. Specifically, I am sure he is aware of the awful fate of six year-old Hind Rajab, calling for help in the midst of the bodies of her dead relatives, who appears to have died with two would-be rescuers from the Red Crescent. Have the Government demanded answers from the Israeli Government—or will they—about what happened to Hind, her family and the rescuers? Are the Government challenging the Israeli Government on the risks to hundreds of thousands of children in Rafah who are now in the path of the Israeli offensive? Surely it is time to stop all arms shipments to Israel, as a Dutch court has demanded that the Netherlands does, and implement targeted sanctions against members of the Israeli leadership, particularly those calling for new settlements in Gaza and on the West Bank.

Lord Cameron of Chipping Norton Portrait Lord Cameron of Chipping Norton (Con)
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The noble Baroness asks a number of questions. The case she raises is completely tragic, and what is happening in Gaza is tragic. We want an end to this suffering and killing. Let me make this point: we want to turn the pause we are calling for into a ceasefire, by making sure the conditions are right for getting a stop in the fighting to mean a permanent ceasefire. The way to do that is by fulfilling a number of conditions. In our view, you have to get the Hamas leaders out of Gaza—otherwise, any ceasefire will not last because the problem will still be there. You have to dismantle the operation of terrorist attacks. You have to have a new Palestinian Authority Government in place. You have to give the Palestinian people a political horizon to a better future and a two-state solution. Crucially, you have to release all the hostages—and do that very quickly.

The noble Baroness asks whether we challenge the Israeli Government over individual episodes. Yes, we absolutely do. I have done that personally with them, for instance, over a building that was bombed that had UK medics and other charities in it. We will continue to do that as part of the very important process that we go through to judge whether they are in compliance with international humanitarian law.

Lord Robathan Portrait Lord Robathan (Con)
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Is my noble friend aware of any moves by Hamas to protect the children of Gaza, for instance by releasing all the hostages, as he just mentioned, or stopping attacks on Israel and the leaders fleeing to the Gulf? Is he aware of any such moves? I agree with everything he said.

Lord Cameron of Chipping Norton Portrait Lord Cameron of Chipping Norton (Con)
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My noble friend makes a very good point. It is worth remembering that on 7 October, 29 children were killed by Hamas and 39 children were taken hostage and remain hostages today. It is right that we in this House keep asking what else Israel should do, but at the very same time we should also say what Hamas should do, which is to lay down its weapons and stop right now. It could stop this fight immediately.

Lord Turnberg Portrait Lord Turnberg (Lab)
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Is the noble Lord aware that the IDF has suggested that it is in no rush to enter into Rafah and will delay, possibly until after Ramadan? Meanwhile, the negotiations in Cairo can continue. That gives a chance for Hamas to release the hostages and for the conflict to stop.

Lord Cameron of Chipping Norton Portrait Lord Cameron of Chipping Norton (Con)
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That is absolutely right. I believe those discussions are under way, and it is a great pity that they did not reach that conclusion the last time they were under way. As I said, the best outcome we could seek is an immediate stop in the fighting. Let us hope that the stop is for as long as possible. I think that Israel was content to offer a month or six weeks as a pause. Then we need the momentum to turn that pause into a permanent ceasefire, without a return to the fighting. That should be our goal but, crucially, the pause is necessary to get the aid in and the hostages out.

Lord Purvis of Tweed Portrait Lord Purvis of Tweed (LD)
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My Lords, the Foreign Secretary referred to UNICEF—

None Portrait Noble Lords
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No!

Baroness Williams of Trafford Portrait Baroness Williams of Trafford (Con)
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My Lords, there is plenty of time. We will hear from the noble Lord, Lord Purvis of Tweed, followed by the noble Lord, Lord Green.

Lord Purvis of Tweed Portrait Lord Purvis of Tweed (LD)
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I am grateful to the Chief Whip. UNICEF has said today that 600,000 displaced children are in Rafah in Gaza. That is comparable to the entire under-12 population of Scotland being displaced to one postcode area. Does the Foreign Secretary agree that for any belligerent in a conflict to advise children and civilians to relocate, on the pretext of their safety, to an area where there is no shelter, water or medicine, and where there are no security guarantees, is a war crime?

Lord Cameron of Chipping Norton Portrait Lord Cameron of Chipping Norton (Con)
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I say to the noble Lord what I said yesterday in Scotland: many of the people in Rafah have already moved three, four or five times. It is not possible for them to move again. They cannot go north because they would be going back to homes that have been destroyed. They cannot go south because that would involve going into Egypt, which none of us wants to see and the Egyptians do not want. That is why it is so important that the Israelis stop and think before going ahead with any operations in Rafah.

Lord Green of Deddington Portrait Lord Green of Deddington (CB)
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My Lords, does the Foreign Secretary agree that the huge number of civilian casualties in Gaza is deeply damaging to the reputation of Israel? Will he therefore take action to promote a change of strategy by the Israelis, as well as the other measures he has mentioned? Thousands of civilians are being killed; that has to stop.

Lord Cameron of Chipping Norton Portrait Lord Cameron of Chipping Norton (Con)
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Our view from the start has been that, while Israel has a right to defend itself and the attacks on 7 October were an appalling attack on Israel—it is worth remembering that it was the biggest pogrom since the Holocaust in terms of the loss of life of Jewish people; we should not forget that—and a tragedy that it had every right to respond to and try to prevent happening again, Israel must obey international humanitarian law. Let us be clear: not only does that involve what the IDF does in terms of the way it prosecutes this war but, as Israel is the occupying power in Gaza, it has to make sure that humanitarian aid—food, water and shelter—is available to people in Gaza. If Israel does not do that, it would be a breach of international humanitarian law as well.

Baroness Smith of Basildon Portrait Baroness Smith of Basildon (Lab)
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My Lords, the Foreign Secretary is right; the priority has to be securing an immediate, extended pause in fighting to ensure that we can get aid in and the remaining hostages out, and create room for a long-term, sustainable ceasefire, followed by an even longer-term resolution. There are currently almost 1.5 million displaced Palestinians in Rafah and it is the main route for humanitarian aid. Any further Israeli offensive in Rafah will be catastrophic. The situation is getting more urgent by the hour. I know the noble Lord has been working to establish a contact group of regional and international leaders who would influence both sides. Is he able to offer any progress on that group or its ability currently to influence events?

Lord Cameron of Chipping Norton Portrait Lord Cameron of Chipping Norton (Con)
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At the Munich Security Conference on Friday, there will be a meeting of the key European countries that help to fund the Occupied Palestinian Territories and the key Arab and Gulf states working to help support a future Palestinian Authority. We very much hope that the Secretary of State of the United States will be there as well. This is not yet the formation of a contact group—a number of countries, particularly in the Arab world, are understandably nervous about meeting in advance of a proper ceasefire and a plan towards a cessation of hostilities—but I think we are on the way to getting this group, which the noble Baroness has long called for, up and running.

It is important, because there are lots of things that we need to start talking about now—what happens the day after a pause; a reconstituted Palestinian Authority; the question of how to offer a political horizon to people in the Palestinian territories; or indeed how to deal with Israel’s very real security concerns. If there is a pause and then a ceasefire, how do you make sure that the people responsible for 7 October cannot remain in Gaza and that the infrastructure of terror is taken down?

Baroness Helic Portrait Baroness Helic (Con)
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My Lords, alongside medical aid on the ground, one practical step the Government could take with an immediate impact would be to support medical care for children injured in Gaza on a temporary basis in the United Kingdom. I know that my noble friend and his department have been looking at this possibility. I would be grateful if he could update us on progress.

Lord Cameron of Chipping Norton Portrait Lord Cameron of Chipping Norton (Con)
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I thank my noble friend. It is called Project Pure Hope. We are looking very closely at whether it is possible to take the people in greatest need and bring them to British hospitals, as we have done in the past. The early work we have done shows that there is much we can do in the region, and we should probably do that first—for example, helping in the field hospitals that have been established, helping to send medical teams to referral hospitals in the region and supporting organisations such as Medical Aid for Palestinians. If that work leads to the identification of specific cases in which someone would be better off taking the long journey to Britain and going to Great Ormond Street or elsewhere, we certainly do not rule that out. We will continue to look at this.

AUKUS Security Partnership

Tuesday 13th February 2024

(4 months ago)

Lords Chamber
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Question
15:39
Asked by
Lord Walney Portrait Lord Walney
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To ask the Secretary of State for Foreign, Commonwealth and Development Affairs what progress His Majesty’s Government has made in implementing the AUKUS security partnership between the United Kingdom, Australia and the United States of America.

Lord Cameron of Chipping Norton Portrait The Secretary of State for Foreign, Commonwealth and Development Affairs (Lord Cameron of Chipping Norton) (Con)
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My Lords, AUKUS is an unprecedented partnership that is central to delivering security and prosperity for the UK and our partners in the Indo-Pacific and the Euro-Atlantic. We are making significant progress to deliver nuclear-powered submarines for the UK and Australia and are deepening co-operation on cutting-edge military technologies. We are breaking down barriers to defence trade and delivering benefits at home, securing £4 billion of contracts for British companies and generating thousands of jobs including in Derby and, I am pleased to say, Barrow-in-Furness.

Lord Walney Portrait Lord Walney (CB)
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I thank the noble Lord for that Answer. As he rightly says, this is a landmark security partnership that requires a sustained commitment from multiple Governments over years, indeed decades. What is the Foreign Secretary doing to ensure that the focus of his department and of the whole Government can remain on this despite the ongoing crises in other areas? In particular, how can he prioritise the diplomatic work needed to ensure that the US can make progress on ITAR reform that can enable the technological and industrial co-operation necessary to deter our common adversary?

Lord Cameron of Chipping Norton Portrait Lord Cameron of Chipping Norton (Con)
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On how the Government co-ordinate this at a time where there are many distractions, I can say that the National Security Council is playing a role at bringing together all the ways that we can support Team Barrow to make sure that there is support for education, skills, housing, transport and all that will be needed to scale up this production effort as we go from 11,000 people employed building submarines to 17,000. On ITAR, which has been a troubling issue that British Governments have had to deal with for decades with American Governments, it is essential that AUKUS partners can trade freely between each other in defence equipment. I am pleased to say that we have made some real progress: I met Secretary Blinken in early December and on 22 December President Biden signed the US National Defense Authorization Act, which enables licence-free trade between the AUKUS countries, and we are working with the State Department on the technical details to make sure that really happens.

Lord Howell of Guildford Portrait Lord Howell of Guildford (Con)
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My Lords, are any other countries applying to join the AUKUS partnership? Are we thinking of applying to join the Quad—that is Australia, Japan, India and the United States? Will the UK attend the Perth conference on Indian Ocean security and defence, where all these issues tend to come together and will be discussed this summer?

Lord Cameron of Chipping Norton Portrait Lord Cameron of Chipping Norton (Con)
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On the last point, I think I am right in saying that one of my ministerial colleagues will attend the Perth conference because it is very important. As my noble friend will know, AUKUS has two pillars. Pillar 1 is about the nuclear-powered submarines of Britain, Australia and America, and I do not think there will be additional partners in that. However, pillar 2 looks at advanced military technology for the future, and there we are open to the idea of other countries—possibly Canada, as people have mentioned, or Japan—which might want to join it because it is about defence equipment for the future. The point he makes about the Quad is very important. We would say that this is complementary to that activity.

Baroness Smith of Newnham Portrait Baroness Smith of Newnham (LD)
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My Lords, when AUKUS was first announced, the suggestion, at least from the MoD, seemed to be that somehow the United Kingdom had just slipped into an agreement with Australia over the nuclear submarines but clearly, as the Secretary of State has pointed out, there is also the wider aspect of AUKUS. Do His Majesty’s Government have a strategic approach to this? Are we simply waiting to see whether other countries such as Canada wish to join or are we actually planning what we want to do? Similarly, we have a trilateral agreement with Japan and Italy over fighter jets. Are we just being ad hoc or is there a real strategy here for our security?

Lord Cameron of Chipping Norton Portrait Lord Cameron of Chipping Norton (Con)
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This is a deeply strategic approach. First, it fits into a tilt to the Indo-Pacific. Noble Lords can see we have signed the Hiroshima accord with Japan; we have a new status at ASEAN; we have very strong partnerships with India; and now we have AUKUS, which is a defence stature that puts us in with Australia and America in a very strategic way. In terms of the partners for pillar 2, we would welcome others to come but on each occasion we will have to ask, “What will they bring, is it the right thing, is it the right country and is it the right fit?” The strategic move of AUKUS is incredibly powerful.

Lord Ricketts Portrait Lord Ricketts (CB)
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My Lords, speaking as another member of the club of those on Mr Putin’s blacklist, I welcome the AUKUS agreement but ask whether the Minister will accept that the handling of the French was pretty catastrophic? Does he accept that France is a major Indo-Pacific power and that now, when those bruises have perhaps healed somewhat, there is time to work with the French as well in the Indo-Pacific area, where they have a great deal to contribute?

Lord Cameron of Chipping Norton Portrait Lord Cameron of Chipping Norton (Con)
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The noble Lord makes a good point, which is that, ultimately, Britain and France should co-operate as closely as we can, because we are similar-sized powers with similar-sized militaries and global ambitions. That is what the Lancaster House agreement that he did so much to bring about was all about. What I would say to French partners now looking at this is that what AUKUS does for UK capacity is make sure that we replace the Astute submarines, which are incredibly high-tech and successful, with a new-generation AUKUS submarine—so the funding and the capacity are in place for that. We are assuring our future, and that is good for France because we can then talk with it about how it will secure the future of its submarine programme.

Lord Dobbs Portrait Lord Dobbs (Con)
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My Lords, nobody has yet mentioned China, so allow me to do so. Will my noble friend agree that it is important that we continue to talk with China and find as many areas, and expand on as many areas, of agreement as possible? But, in all this discussion, is it not possible to focus too narrowly on the threat of China? Should we not do more to embrace the democracies in Asia, such as Japan, India, Malaysia and South Korea? They are already more populous than China, are growing economically much faster than China and, in a few years’ time, will be far more economically powerful than China.

Lord Cameron of Chipping Norton Portrait Lord Cameron of Chipping Norton (Con)
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I very much agree with my noble friend. You can do both those things. It is important that we have a relationship with China. We have many disagreements, and it is an “epoch-defining challenge”, as the integrated review puts it, but, where we can find areas to progress discussions, we should. However, my noble friend is completely right to focus on the emerging democracies of the Far East, which is why I note not just AUKUS but the Hiroshima accord, the ASEAN relationship and the ministerial connections we have in Indonesia, Malaysia and Vietnam. I think I was the first ever serving Prime Minister to visit Vietnam, and I hope to go back soon.

Lord West of Spithead Portrait Lord West of Spithead (Lab)
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My Lords, this security agreement is incredibly exciting. Without it, we would not be able to develop and get a sufficient number of nuclear submarines to replace the Astute class. For that reason, it is very important. Although the timescale looks long, we should pull teams together now in terms of how we will design and build that submarine because, if we do not, we will not do so in time. Also, because the Australians will have the Virginia class, the Americans will probably start doing a design instead.

Lord Cameron of Chipping Norton Portrait Lord Cameron of Chipping Norton (Con)
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The noble Lord is completely right that we have to get on with it, which is why there is Team Barrow to bring together the town council, BAE Systems and the Government. A lot of money is being put in—£25 billion from the Government and a further £16 million of levelling-up money—to make sure we have not just the defence capacity but the physical capacity in the town and the people to do this. I am confident we can get this done. The Virginia-class submarines are being sold by the Americans to the Australians to help prevent them from having a gap. It is up to us to make sure we do not have a gap and that there is no break between our excellent Astute-class submarines—I am proud that most of them were built during my time in office as Prime Minister—and the AUKUS submarines that will follow.

Lord Alton of Liverpool Portrait Lord Alton of Liverpool (CB)
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My Lords, it was said by the Foreign Affairs Committee of another place that South Korea and Japan should be

“invited to join an AUKUS technological defence cooperation agreement”—

or pillar 2, which the noble Lord referred to in his initial reply. This was not just waiting on events; it urged us to invite them to join AUKUS, and I wondered whether he would give that recommendation further consideration. I will pursue the point made by his noble friend a moment ago. Bloomberg estimated that, if there were a blockade of the Taiwan Strait, it would cost the world economy some $10 trillion. Above and beyond AUKUS, what are we doing to deter the Communist Party of China?

Lord Cameron of Chipping Norton Portrait Lord Cameron of Chipping Norton (Con)
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One of the things we are doing more generally is stressing the importance of freedom of navigation. That lies behind the action we are taking in the Red Sea and I hope to hold discussions with Chinese counterparts in days to come where we will ask them, given the importance of trade to China, to be as fully supportive of freedom of navigation as we are, because that matters wherever you are in the world, including the Taiwan Strait.

Lord Houghton of Richmond Portrait Lord Houghton of Richmond (CB)
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Superficially, this sounds like very good news and I welcome it, but were there no voices at the National Security Council that spoke to caution at all in respect of risk and affordability? In terms of affordability, Team Barrow sounds quite expensive. Is this again going to be at the expense of the conventional programme of UK defence? In terms of risk, is there not a risk of leakage of our very small supply of very highly qualified people, who would rather follow their career paths in Fremantle than in Barrow?

Lord Cameron of Chipping Norton Portrait Lord Cameron of Chipping Norton (Con)
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I do not believe that the noble and gallant Lord’s concerns are right. The money going into Barrow is a drop in the ocean compared to the cost of one submarine: as he well knows, these things come out at about £1 billion each. We need to make sure that Barrow, which has incredible manufacturing expertise, is fit to do this extra work that is going to be required as it scales up to 17,000 jobs. Are we going to benefit as a country? I would say absolutely yes. Rolls-Royce in Derby is going to be providing the nuclear reactors for these submarines—not just for the ones we use but also the ones Australia uses. This is good for our defence, good for our international relations and good for our industrial base.

Palestinian State: UK Recognition

Tuesday 13th February 2024

(4 months ago)

Lords Chamber
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Question
15:51
Asked by
Lord Jackson of Peterborough Portrait Lord Jackson of Peterborough
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To ask the Secretary of State for Foreign, Commonwealth and Development Affairs what discussions he had with the government of the United States before his announcement on 1 February that the United Kingdom should recognise a Palestinian state in advance of the conclusion of any future bilateral talks between Israel and representatives of the Palestinian people.

Lord Cameron of Chipping Norton Portrait The Secretary of State for Foreign, Commonwealth and Development Affairs (Lord Cameron of Chipping Norton) (Con)
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My Lords, this Government have always supported a two-state solution, and that remains the case. Clearly, recognising a Palestinian state at the right time is part of that policy. My noble friend asked about consulting our allies. Of course, we discuss all issues relating to the conflict in Gaza, and Israel-Palestine relations, but I am pleased to tell him that ultimately the UK has a sovereign and independent foreign policy set by a British Prime Minister and a British Foreign Secretary in the British Parliament.

Lord Jackson of Peterborough Portrait Lord Jackson of Peterborough (Con)
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I welcome that Answer. Hamas is a genocidal terror group: for the benefit of the BBC, they are not militants. The Palestinian Authority has lost control of large cities in the West Bank to Iranian-backed terror groups, openly pays salaries to convicted terrorists, and is deeply corrupt and repressive. Palestinian statehood is, I trust, something all of us in this House wish to see, but does my noble friend share my very grave concerns that premature, unilateral recognition of a Palestinian state now risks rewarding Hamas, playing into Iran’s hands, and perhaps jeopardising the chances for a long-term, sustainable peace?

Lord Cameron of Chipping Norton Portrait Lord Cameron of Chipping Norton (Con)
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I absolutely understand where my noble friend is coming from. I just say to him that of course it is not rewarding Hamas. Hamas does not believe in a two-state solution: it believes in the destruction of Israel. My point is that the whole point of a two-state solution is to create long-term, sustainable peace. I think the last 30 years have shown that we will not solve this problem without a solution that gives dignity and security to the Palestinian people as well as vital security to Israel. I say, as a strong friend of Israel, that this is the right approach and we should pursue it.

Lord Archbishop of Canterbury Portrait The Archbishop of Canterbury
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My Lords, I welcome very strongly the continued emphasis by the Secretary of State on the two-state solution, and his condemnation of the Hamas terrorist group and his call for the liberation of hostages, as was echoed in a statement this morning from the Bishops. But it is not only in Gaza that we are seeing tragedy; we are seeing it in the West Bank, where it is almost forgotten that very large numbers of Palestinians have been killed by people who live in illegal settlements. One of the countries most affected by that is the Hashemite Kingdom of Jordan. First, what support are His Majesty’s Government giving to the Hashemite Kingdom of Jordan, given its vulnerability and its significant responsibility as guardian of the holy places? If it comes under significant pressure, that would widen the conflict appallingly and dramatically. Secondly, what are the practicalities for Jordan in preparing for or aiding a two-state solution, where the flow of refugees towards it—and it has taken something like half its population in refugees—would be a very threatening process for its destabilisation?

Lord Cameron of Chipping Norton Portrait Lord Cameron of Chipping Norton (Con)
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I thank the most reverend Primate the Archbishop of Canterbury for his question. First, he is absolutely right to say that we should focus on what is happening in the West Bank as well as Gaza. It is a chilling statistic that since 7 October, 96 Palestinian children have been killed in the West Bank. There have been a series of very worrying developments and disturbances. That is why the Government are focused on this. Only yesterday, we announced for the first time some sanctions against violent settlers who are carrying out criminal acts in the West Bank.

The most reverend Primate also asked, rightly, about what we are doing to help Jordan. First, in terms of the incredible work Jordan does in looking after refugees, we have given a huge amount of aid and assistance to help it with the job that it has done. As he says, the crucial thing is to work with the Jordanians, as we are, towards the two-state solution, in which they can play a very big part. A crucial thing that needs to be sorted out is how you move from the current Palestinian Authority, which has a number of issues and difficulties, to a new technocratic Government who would work across the Palestinian territories. The Jordanians can play a big role in helping to bring that about.

Lord Austin of Dudley Portrait Lord Austin of Dudley (Non-Afl)
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My Lords, there are 200 land-based conflicts in the world, half a million dead in Syria, the world’s biggest humanitarian catastrophe in Yemen, and millions slaughtered in Africa—yet the only conflict people in the UK seem to want to protest about is Israel defending itself against the racist, genocidal Islamists of Hamas. What does the Foreign Secretary think explains this irrational obsession with the world’s only Jewish state?

Lord Cameron of Chipping Norton Portrait Lord Cameron of Chipping Norton (Con)
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The noble Lord makes a very important point. If you look across the world and ask yourself, “Where’s the biggest refugee crisis?”, it is not in Israel or in the Palestinian territories; it is either in Sudan, where about 9 million people have moved into Egypt, or you could argue that it is in Myanmar, where Bangladeshis are looking after millions of Rohingyas in very difficult conditions. It is important that we try to keep a focus on what is happening around the world and look at the numbers. That said, the reason people are focused on Gaza right now is the level of death and destruction, and people want to bring that to an end, as do I. This is why we have made this proposal for the immediate pause, moving to the ceasefire, with the five conditions we need to put in place to help to bring that about and work towards a political solution.

Lord Pannick Portrait Lord Pannick (CB)
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My Lords, after Israel withdrew from Gaza in 2005, Hamas was elected to power. Having been elected to power, it proceeded to terrorise and then murder its political opponents. Hamas remains very popular in Gaza and in the West Bank. How can we prevent an independent Palestinian state from being governed by Hamas, maintaining its policy of seeking to attack Israel and to murder, rape and abduct as many Israeli citizens as possible?

Lord Cameron of Chipping Norton Portrait Lord Cameron of Chipping Norton (Con)
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The noble Lord asks an extremely good question. We have to try to help to separate the Palestinian people from Hamas. One of the best ways of doing that, apart from making sure that, as I have said, our conditions should include the Hamas leadership leaving Gaza and the dismantling of the terrorist infrastructure, is to offer the Palestinian people—not Hamas, because it is not interested in a two-state solution—a route to better governance, with a reformed Palestinian Authority and the long-term horizon of a two-state solution to give them the dignity and security that they crave and that would help to bring about peace in the region.

Lord Collins of Highbury Portrait Lord Collins of Highbury (Lab)
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My Lords, when the Foreign Secretary made the original statement, he was very clear that we need to show irreversible progress towards a two-state solution—something that both sides of this House have talked about for a long time. My right honourable friend David Lammy welcomed the Foreign Secretary’s comments, arguing that recognition should not wait for the final status agreement but should be part of efforts to achieve one. I asked the noble Lord, Lord Ahmad, the day after those comments, what we are doing to translate the Foreign Secretary’s desire into discussions with our allies, particularly at the United Nations, and how we give that hope a sense of reality.

Lord Cameron of Chipping Norton Portrait Lord Cameron of Chipping Norton (Con)
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What my noble friend Lord Ahmad and I are doing—we are virtually joined at the hip when we are not travelling separately to the region—is talking to all the partners in the region about how we work towards making that a reality. Recognition is obviously part of a two-state solution, and it should help with the momentum. The point that I have been making is that it should not be the first thing we do, as that would take the pressure off the Palestinians to reform and to do the things that need to happen in the Palestinian Authority. But just because it does not happen at the beginning does not mean that it must wait right until the end. One of the things that is beginning to change and that I think is hopeful is the American posture, which, until now, has been that recognition can come only when Israel and Palestine agree on the creation of a Palestinian state. Doing that would give Israel a veto, in effect, over a Palestinian state, which is the opposite of creating the sort of unstoppable momentum towards a two-state solution that we all want to see.

Lord Purvis of Tweed Portrait Lord Purvis of Tweed (LD)
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My Lords, I welcome the Foreign Secretary’s comments on the flexibility of recognising the state of Palestine before there is a full agreement with the State of Israel. I declare that I will travel to Jerusalem, Tel Aviv and Ramallah from tomorrow night. What message can the Foreign Secretary share with these Benches that I can take to those I will meet that he has persuaded like-minded countries and our allies, who have a long-standing view that recognising the state of Palestine before any long-term agreement is the best platform to get an agreement with Israel?

Lord Cameron of Chipping Norton Portrait Lord Cameron of Chipping Norton (Con)
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After I made my statement, which is absolutely in line with our long-standing policy that recognition should come when it gives the maximum impetus and input to a solution, the Americans announced that they were re-examining their policy and looking at options to see how recognition could best play a part in bringing about a two-state solution.

Business of the House

Tuesday 13th February 2024

(4 months ago)

Lords Chamber
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Motion on Standing Orders
16:02
Moved by
Lord True Portrait The Lord Privy Seal
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That Standing Order 44 (No two stages of a Bill to be taken on one day) be dispensed with on Wednesday 21 February to allow the Finance Bill to be taken through its remaining stages that day.

Motion agreed.

Protest Measures

Tuesday 13th February 2024

(4 months ago)

Lords Chamber
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Statement
The following Statement was made in the House of Commons on Thursday 8 February.
“With permission, Mr Deputy Speaker, I shall make a Statement on new government measures to tackle unacceptable behaviour at protests.
In the aftermath of the horrific attacks on 7 October, many people took to the streets to make their views heard. Many did so peacefully and respectfully. I had the great privilege of marching alongside many people, including some in this House, against anti-Semitism on the streets of both Manchester and London. Sadly, those protests do not tell the whole story.
Over the past few months, we have all seen disturbing and distressing examples of hateful abuse, of serious damage, and of law-abiding citizens being intimidated and prevented from going about their daily life. The right to protest is fundamental to our democracy, but when we see people hurling racist abuse, desecrating national memorials of great significance to our country, or taking flares to marches to cause disruption and fear, the only reasonable response is outrage and disgust. Tolerating these actions would be radicalising in itself. This Government will not stand by and allow a small minority to incite hatred and commit crimes, undermining our proud tradition of peaceful protest.
Today, the Government have announced a package of measures to put a stop to this criminality for good. Protesters have for too long been able to claim in law that protest is a ‘reasonable excuse’ for criminal behaviour. Blocking roads, preventing ambulances from getting through and stopping people from getting to work or visiting loved ones are breathtakingly selfish acts. The British public certainly do not see an acceptable justification for that level of disruption to their life. That is why we are removing that defence for relevant crimes. Protesters will no longer be able to cite the right to protest as a reasonable excuse to get away with disruptive offences, such as blocking roads.
Through the package that we are announcing today, we will crack down on those who climb on war memorials. In recent months, we have seen cases where individuals have broken away from large protests and scaled national monuments. War memorials belong to all of us. They are the altars of our national grief, and it is clearly not acceptable to disrespect them in that way; it is an assault on the memory of so many who gave their life for our freedom and to defend our nation. Attacking our national memorials goes beyond the legitimate exercise of free speech. We must not give those who commit criminal acts at protests the ability to get away with it by simply hiding their identity.
Once the legislation comes into force, the police will have new powers to arrest protesters at certain protests who wear face coverings to conceal their identity. Those who shout racist abuse and extremist rhetoric will no longer be able to hide from justice. We are also protecting the public by putting an end to people bringing flares on marches. Flares have been used during large-scale protests, and have been fired at police officers, posing significant risk of injury. A new offence will ban the possession of flares, fireworks and any other pyrotechnics at protests. Anyone who flouts the new rules will face serious consequences, including up to three months in jail and a £1,000 fine for those who climb on war memorials.
The changes that we have announced today build on the legislation that we introduced last year to help the police tackle disruption from protests. We criminalised interfering with key national infrastructure through Section 7 of the Public Order Act 2023. Since we passed the Act last year, the Metropolitan Police have made more than 600 arrests to minimise the disruption caused by Just Stop Oil. On Tuesday, the Home Secretary met policing leaders to thank them for their work, and to encourage the use of all existing powers at their disposal, as well as these new measures, to maintain order at protests. I am very grateful to front-line officers across the country for their efforts and successes in keeping the British people safe during an immensely challenging period. I know that policing these events on a regular basis is both complex and demanding. It takes officers away from crucial work preventing crime and protecting vulnerable people in our communities.
As I have made clear, freedom of expression is vital to our democracy, and this House champions it every day. People must be able to speak without fear, and have their right to peaceful protest protected, but those freedoms and rights are not absolute, for very good reason. There is no freedom to commit violence or intimidation, or to harass others. This country has laws against vocally supporting terror organisations for a very good reason, and last month, the Government proscribed Hizb ut-Tahrir as a terrorist organisation. That group actively celebrated the 7 October terrorist attacks in Israel that led to the rape and murder of many, many people. It is an organisation that has poisoned minds for far too long.
We must, and we will, continue to stand with communities who feel threatened, and ensure their safety wherever they live and work. The Government are sticking to the plan to give police the powers that they need to crack down on crime and keep our streets safe. We will never tolerate hateful, dangerous or intimidating behaviour. We will always put the decent, law-abiding majority first. We will do what is right and fair. I commend this Statement to the House”.
16:03
Lord Coaker Portrait Lord Coaker (Lab)
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My Lords, I thank the Minister for this debate on last week’s Government Statement on protest measures. It is important to start my comments on such a Statement by thanking the police for all the work they are doing to maintain public order across the country. We know that many officers are having to give up rest days to police protests, and those demands are growing. Can the Minister start by outlining how resources are being allocated to meet that demand and what the impact has been on neighbourhood policing? Protest is a fundamental freedom in a democracy, and that right must be protected. If that freedom is abused and used to intimidate, harass or harm others, safeguards are clearly needed.

This is yet another suite of measures to tackle issues arising at protests. Can the Minister confirm that all these additional measures have been requested by the police across the UK as well as in London, and that they will be included in the Criminal Justice Bill to allow proper scrutiny of the accompanying guidelines?

On the issue of face coverings and the power to arrest those seeking to conceal their identity, is this an automatic offence decided by an individual officer, or is it triggered by a set of circumstances then to be authorised by a senior officer? We all understand that there is legitimate concern about the use of face coverings to conceal identity, but what about Chinese dissidents protesting outside the Chinese Embassy, or Iranian dissidents demonstrating outside the Iranian Embassy? Will they still be able to cover their faces, which they may well wish to do to protect families at home from intimidation or worse? We have a proud tradition of giving safe haven to dissidents opposing oppressive regimes.

We support the measures relating to flares and fireworks, which have been used to fuel public disorder and intimidate the police. Can the Minister say how they will be enforced in protests, which sometimes involve thousands? Our war memorials rightly hold a special place in the collective affection and respect of our nation. They remember those who made the ultimate sacrifice to protect the very freedoms which a very small number of people seek to desecrate. This has sparked understandable outrage across the country, including from me personally. My uncle, whom I am named after, was killed on D-day. His name is proudly remembered on a war memorial near his home village of Cheldon in Devon, close to both the town of Chulmleigh and the former constituency of the noble Lord, Lord Swire. To think of this and other war memorials being under threat or defaced is unthinkable. Can the Minister outline how the new measure in the forthcoming Bill is expected to work in practice?

Also raised was the issue of the definition of “hateful extremism”. The Government are looking at this, and work is ongoing. Can the Minister update us on what progress has been made, and when can we expect a Statement? The police of course need the necessary laws to police protests and, importantly, the confidence to use them. The Minister in the other place raised the issue of the proscription of Hizb ut-Tahrir. Are other groups under consideration for proscription, and have the Government assessed their involvement in any of the protests that we have seen? What action, if any, are the Government seeking to take?

Above all, in our proud democracy there is the right to peacefully protest. That is a fundamental freedom in our country of which we all are proud. It must not be abused but it must not be curbed unnecessarily either. The right balance must be struck between safeguarding that right to protest and the important duty to safeguard the public.

Baroness Doocey Portrait Baroness Doocey (LD)
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My Lords, I appreciate that the Government are trying to strike a balance among competing priorities—maintaining the right to peaceful protest, restraining incitement to racial and religious hatred, and keeping the country moving, free from disruptive events. It is right that police use all available powers to arrest those who go beyond what is acceptable for a peaceful protest, not least when their actions are motivated by hate. Protest should not be used as a shield to allow anti-Semitism, Islamophobia or any other type of hatred to fester with impunity.

However, we must ensure that the tactics employed by a minority do not undermine the ability of others to protest peacefully. I have a number of concerns, and it would be helpful if the Minister could address them when he responds. The provisions announced to prevent the use of facial coverings plainly bear a relationship to the increased use of facial recognition technology in policing. The Policing Minister is on record as saying that he is already encouraging police forces to search all available databases, including the passport database, to identify people using facial recognition technology for crime generally.

Clause 27 of the Criminal Justice Bill creates a very wide power to access driver licence records for this purpose, but there has been little public debate on this or on the parameters of the accelerated use of such technology. Given the potential freedoms that this could infringe, is a legal protest the correct context for technology to be used? Should the faces of people engaged in lawful and peaceful protest systematically be recorded and added to databases? Would there be a temptation to create lists of people who attend such protests, with the justification that these are people who are not in favour of the status quo and might, at some future date, cause trouble?

Police already collect information on political activists. However, attending a protest should not qualify as criminal activism. The fact that facial recognition is being introduced into policing without the debate or openness that is needed is a cause for concern. Since the Government are proposing amendments to the Criminal Justice Bill, will the Minister commit to setting out in that Bill the circumstances in which this technology should be used? Will he commit specifically to addressing the many concerns that the systems can be particularly bad at recognising black female faces? This is powerful technology, but it is not infallible by any means.

As things stand, its use enjoys public support, but that support may diminish if it is deployed disproportionately, causing problems for minority groups or being used for minor offences. It is surely in the interests of all of us who want to continue to see policing by consent for this to be avoided.

Finally, I want to raise the question of police resources. The Home Affairs Committee recently expressed concern about the effect that the increasing number of protests is having on the number of rest days being cancelled for police officers. Last year the Metropolitan Police had to cancel 4,000 rest days to police protests at a cost of nearly £19 million. Can the Minister say what the Home Office is doing to ensure that police forces are reimbursed for the cost of these cancelled days? When I was a member of the Metropolitan Police Authority, we had a dreadful job trying to get the money back from the Home Office. I suspect that things have not changed very much. What is being done to support officers’ well-being when large numbers of rest days have to be cancelled?

Will police officers receive the necessary resources and training to identify and prevent hate crimes, including threats and incitements to violence on social media? According to the official figures, between October and December last year there were more than 1,000 protests and vigils and 600 arrests, accounting for 26,000 police officer shifts. This issue is not going away. The duty of care that we owe police officers needs to be addressed as a matter of urgency.

These are among the issues that we on these Benches will want to raise during the passage of the Criminal Justice Bill. I look forward to the Minister giving us his early indications of his views.