Grand Committee
Waste Enforcement (Fixed Penalty Receipts) (Amendment) (England and Wales) Regulations 2023
(8 months, 3 weeks ago)
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Lord Douglas-Miller
That the Grand Committee do consider the Waste Enforcement (Fixed Penalty Receipts) (Amendment) (England and Wales) Regulations 2023.
Relevant document: 13th Report from the Secondary Legislation Scrutiny Committee
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Douglas-Miller) (Con)
My Lords, these regulations were laid before this House on 10 January.
Litter and fly-tipping harm the environment and blight local communities. In a recent survey, 61% of the public thought that litter and dog fouling were a problem in their area, and 49% thought that fly-tipping was a problem. Street cleansing, including clearing up litter and fly-tipping, cost councils in England £822 million in 2022-23. There is clearly a need for more action to deter people from committing these offences, and to ensure that those who cause these problems face the consequences.
Councils already have a range of powers, including issuing fixed-penalty notices to those who litter, fly-tip or pass their household waste to someone without the proper licence. But we know that some councils are not using these powers, even where they have significant fly-tipping problems. In his anti-social behaviour action plan, the Prime Minster made it clear that councils should take a tougher approach to enforcement and make greater use of these fixed penalties. The Government have already taken steps to help councils do just that, including publishing new league tables providing transparency on how councils are using their enforcement powers for fly-tipping. Furthermore, the maximum fixed penalty councils can issue has been increased from £400 to £1,000 for fly-tipping, from £150 to £500 for littering, and from £400 to £600 for householders using an unlicensed waste carrier.
Income from these fines is retained by councils and currently ring-fenced for various functions related to waste management, including sweeping, emptying bins and household waste collection. We know that in a minority of councils, fixed-penalty receipts are absorbed into general council budgets or are spent on other neighbourhood functions. The Government believe that revenue received through payment of litter and fly-tipping penalties should be reinvested in expanding or improving councils’ enforcement functions and cleaning up the consequences of this anti-social behaviour. The instrument will ensure this by amending the qualifying functions on which councils can spend income from fixed-penalty notices issued for littering, fly-tipping and breaching the household waste duty of care, to enforcement and clean-up only.
By improving their enforcement capabilities, councils should be able to catch more perpetrators and deter others from offending, which should lead to cleaner streets, parks and the wider countryside. Enforcement functions could include employing more officers, investing in CCTV and signage and improving the use of data. Clean-up functions can include collecting and disposing of litter and fly-tipping, and restoring land which has been harmed. The instrument also retains the Secretary of State’s ability to make provisions by legislation in future on how local authorities in England use their fixed-penalty receipts.
Although this new ring-fence will apply to councils in England only, the instrument does include consequential amendments relevant to Wales to ensure that no changes are made to how local authorities in Wales can spend fixed-penalty receipts.
The instrument also makes consequential amendments to the Local Government (Structural Changes) (Further Transitional Arrangements and Staffing) Regulations 2009 to ensure that arrangements pertaining to the merging of authorities in England are not affected. Consequential amendments are also made to the Littering From Vehicles Outside London (Keepers: Civil Penalties) Regulations 2018, meaning that no changes are made to how authorities can spend income from these civil penalties.
In conclusion, this instrument will ensure that all councils in England reinvest the money they make from those fines into expanding or improving their enforcement functions and cleaning up the consequences of this anti-social behaviour. This should help deter people from harming our public space and make it more likely that those who do so face the consequences. I hope noble Lords will support these measures and their objectives. I commend these regulations to the Committee.
Baroness McIntosh of Pickering (Con)
My Lords, I congratulate my noble friend on bringing forward these regulations and, in particular, on ring-fencing the money raised through the fixed-penalty receipts. I will raise one issue with him. If I have understood it correctly, this still applies only to public land. If so, this is a missed opportunity. In incidents of fly-tipping on private land, as I am sure my noble friend may be all too aware from his home estate, we are increasingly seeing an element of criminality, with people taking construction waste and literally dumping it on private land.
I worked with the Environment Agency when I was an MP and a shadow Minister in the other place. It has a very good mechanism of cameras in strategic places—I know it does not always want it publicised—which can catch the perpetrators of this crime to very good effect. That makes it much easier for it to bring them to book. My concern is that there was a very powerful response from the NFU, among others, and I am sure that the CLA and the TFA would have responded in the same vein. In its response to the original consultation, which is the basis of these regulations, the NFU asked for
“greater consistency across how local authorities, the Environment Agency and the police engage with private land managers who are victims of fly-tipping. We believe it should not be the sole responsibility of the land managers to deal with this crime, when it is a community-wide issue”.
I would like to understand why, if that was in the consultation, the department chose not to apply the regulations or ASBOs to private land and what the basis was for that. The NFU concluded that
“it is imperative that these proposals are not limited to fly-tipping and littering incidents solely on public land”.
I am sure that my noble friend and others in the Committee will have seen the graphic images on television of people now taking matters into their own hands because the Environment Agency and the police do not always turn up. There was a very good example of how these criminals can be apprehended—although there are dangers attached to this—when four vehicles hemmed in one van that was dumping on to private land all the materials to which I have referred.
I accept that there is an inevitable cost to local authorities and the Environment Agency in finding the perpetrators and, for public land, removing this material, but we are missing the fact that most fly-tipping is increasingly on private land. I would like to understand why it was excluded from this. If we are to go down the path of people individually trying to apprehend perpetrators on private land when they are in the middle of a crime, that will bring inherent dangers and I am sure the Government do not wish to encourage it. In the instance to which I referred—I cannot remember which part of the country it was—they apprehended the perpetrator and he was brought to book. The police attended and criminal charges followed.
I applaud everything that the Government are doing to make these regulations, firm up government policy and make sure that the receipts are ring-fenced, but the weakness is that most fly-tipping is on private land and we seem to have left that out.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I thank the Minister for setting out the details of this SI on the fees received from fixed-penalty receipts for fly-tipping. I declare my interest as a vice-president of the LGA.
Fly-tipping is a scourge on our environment. During the passage of the Agriculture Bill there were several debates on the effect of fly-tipping on the farming community. Fly-tippers find it particularly easy to dump their spoils on droves, bridleways and open countryside, leaving the farmer to clean up the mess, often at considerable expense. The law is of no particular help to them. Local authorities issue fixed-penalty notices for littering and fly-tipping where they know who the culprit is, but this is often very difficult to ascertain. They are also able to issue notices for breaching the household waste duty of care. In this case it should be slightly easier to discover who the culprit is, but I wonder how often this power is used. Can the Minister say how many fixed-penalty notices were issued last year for breaching the household waste duty of care?
This SI is yet another example of central government adding to the burdens of local government. Subsection (5) of new Section 73ZA inserted by Regulation 2 of the SI is a good example of this:
“A waste collection authority must supply the Secretary of State with such information relating to its use of its fixed penalty receipts as the Secretary of State may require”.
Subsection (6) adds:
“The Secretary of State may by regulations make provision … about what a waste collection authority must do with its fixed penalty receipts pending the use of those receipts for the purposes referred to in subsection (2) or (3)”.
Subsection (7) of new Section 95A inserted by Regulation 3 inserts:
“The Secretary of State may by regulations make provision … about what an authority must do with its fixed penalty receipts pending the use of those receipts for the purposes referred to in subsection (3) or (4)”
Subsection (8) states:
“The provision that may be made under subsection (7)(c) includes (in particular) provision for the payment of sums to a person (including the Secretary of State) other than the authority”.
It is clear that central government does not trust local government to conduct its waste-collection functions effectively or to have the best interests of its communities at heart. As we have local elections coming up in part of the country in May, I wonder how many political leaflets will say, “If you vote in this election don’t be surprised if we are unable to carry out any of the usual services you expect of local councillors, as central government is continually putting extra duties and restrictions on the way we can operate”. This is nothing more than a tax to be collected by local authorities and paid to central government.
The Explanatory Memorandum tells us that the SI will
“add a new list of qualifying functions for local authorities in England”.
This should, allegedly, mean that more enforcement will take place, resulting in more fixed-penalty receipts, which would reduce incidents of fly-tipping and function as a deterrent. The logic appears fine, but it takes no account of “first find your fly-tipper”. I will share with the Committee an example of the way in which illegal fly-tippers operate, although I am sure everyone is aware of this. Last autumn, as I went to the GP surgery for my Covid booster, I had to negotiate a huge pile of what looked like cedar tree prunings in the middle of a junction in the road. This was at 9 am in the morning. By the time I came back 40 minutes later, council employees were there with a truck clearing the mess away, and I stopped to speak to them. They confirmed it was likely to be fly-tipping by an operator who had persuaded a householder that they were a legitimate contractor who could do some work for them but who was, in fact, an operator without a licence. There was, of course, nothing on the pile of tree branches to indicate who the culprit was.
I am afraid that restricting what local authorities can spend their fixed-penalty revenue on is not going to prevent fly-tipping. A wholesale campaign to alert the public to the fact that everyone who removes waste from a property or business must have a licence to do so, and that they should ask to see it before parting with money, is really the only way to reduce fly-tipping.
Baroness Hayman of Ullock (Lab)
My Lords, I thank the Minister for his introduction of this statutory instrument. Waste enforcement is clearly an important issue, so I do not intend to make any throwaway comments. However, I have some questions for the Minister.
First, am I correct in thinking that this SI was laid, withdrawn and laid again? If so, was there a problem with it? Perhaps the Minister could clarify that I have not confused it with another SI.
In his introduction, the Minister referred to some of the key statistics in the Explanatory Memorandum. The figures from the Environmental Services Association’s research spell out the problem, and that it is increasing. The estimated annual national cost of fly-tipping was £209 million in 2015, and just three years later it had increased to £392 million. That is pretty appalling, so it is important that we have legislation that attempts to deal with the problem. Paragraph 7.2 of the Explanatory Memorandum gives the results of the recent survey, which again demonstrate that this is a really important and concerning topic to the public, of whom
“49% thought that fly-tipping was a problem”.
The noble Baroness, Lady McIntosh of Pickering, made some excellent points about fly-tipping on private land, and the noble Baroness, Lady Bakewell of Hardington Mandeville, talked about farmers. I know from where I live in Cumbria, as I am sure the Minister does, the huge costs associated with sorting out this problem on farms, particularly for small farmers, who simply do not have the ability to shift it. This is becoming a real problem, so I hope the Minister heard what the noble Baronesses said and that, if this is not the appropriate instrument to deal with it, something else can be done to address it going forward.
We have also heard about the involvement of local authorities. There is a commitment to limit the use of FPN proceeds to expanding or improving councils’ enforcement functions and cleaning up the consequences of this anti-social behaviour. As the Minister said, this was set out in the Prime Minister’s anti-social behaviour action plan last March. Can the Minister say why it has taken a year to bring this forward? It should be straightforward.
According to paragraphs 7.3, 7.4 and 7.5 of the Explanatory Memorandum, the revenue from FPNs is generally spent on street-cleaning activity rather than enforcement. My understanding is that this SI will mean that more revenue is spent on prevention, which is very welcome, but how do the Government see councils plugging the gaps in their general street-cleansing budgets through this instrument? The Minister talked about the amount councils can charge being increased through this SI, but there is still a cap on fixed-penalty notices for fly-tipping, littering and graffiti. Will the Government consider removing the cap and explore whether more stringent court fines for the worst offenders could help councils investigate and prosecute fly-tippers and deter repeat offenders? We know that some people make a living out of doing this.
The noble Baroness, Lady Bakewell, gave the Committee an extremely good example. In our own communities, we have all heard about instances of people saying, “We’ll take that away for you”, taking a fee and then dumping it on someone else’s land. These repeat offenders need sorting out. The noble Baroness also talked about CCTV. CCTV is now being used in some areas of the Lake District National Park, because people are dumping rubbish even in some of the most beautiful areas of our national parks.
The enforcement actions include employing officers who are authorised to issue the fines. Have the Government any figures on the average number of officers employed by each local authority in England, in order to get an idea of the number of people currently involved? It would be interesting to know whether these are full-time posts or part of the officers’ wider responsibilities; if the latter, how does the ring-fencing work? If they have different responsibilities and this is just one of them, how is the ring-fencing guaranteed?
Paragraph 10.1 of the Explanatory Memorandum refers to the consultation that took place with local authorities, and states that there were no responses from the West Midlands, which seems a bit odd. Why did the West Midlands not take part?
Lord Douglas-Miller (Con)
My Lords, I thank all three noble Baronesses for their contributions to this debate. I will start with fly-tipping on private land, which they all raised. The Government appreciate the difficulty that fly-tipping poses to landowners. As was pointed out, it is indeed deeply unfair and places a huge and unreasonable burden on private landowners. The Government are working with a wide range of stakeholders, such as the NFU, through the National Fly-Tipping Prevention Group, to promote and disseminate good practice, including how to prevent fly-tipping on private land.
Furthermore, in April last year, the National Police Chiefs’ Council established a new National Rural Crime Unit to support police forces nationally in responding to rural crime, including fly-tipping. Defra has awarded the National Rural Crime Unit a grant of £100,000 to fund a dedicated 12-month post, which started last month on the Northumberland-County Durham border, to explore the police’s role in tackling fly-tipping and how this can be optimised, with a particular focus on rural areas. Outputs from this will include training for police officers and working on intelligence-sharing across borders and between authorities.
Defra is also funding councils across the country to directly intervene at fly-tipping hotspots, including in rural areas, through the fly-tipping intervention grant scheme. For example, in Herefordshire, councils have seen a reduction in fly-tipping of over 90% across areas where CCTV—another issue raised by noble Baronesses —and signage have been installed, and they have developed stronger relationships with local farmers and landowners. If any noble Baroness has further specific questions on that issue, I will write to them.
Baroness McIntosh of Pickering (Con)
Why was it excluded from the regulations before us today?
Lord Douglas-Miller (Con)
I will write to my noble friend on that because I do not have that detail in front of me.
The noble Baroness, Lady Bakewell, stated quite a strong view about the Government passing this burden, if you like, on to local authorities. Interestingly, that was in fairly stark contrast to what my noble friend Lady McIntosh had previously said. That illustrates to me that there is no right or wrong way to do this; it is probably just a personal choice. Everybody will have a view about how it might be best done, but the Government’s view is that this is the best way to do it. I appreciate that that will not get much traction or be very well received, but it is the Government’s position, and that is where we will be heading.
The noble Baroness, Lady Bakewell, mentioned the powers of the Secretary of State. The Secretary of State already has these powers but due to the drafting required to retain the status quo, it has been necessary to restate them. This is linked to retaining the status quo in Wales. She also asked why there is a difference in the value of littering and fly-tipping. That is largely related to the volume associated with fly-tipping. It tends to be much greater and has the potential to cause much more damage to the land. Sorting out that problem usually takes a little more time and costs a little more money.
The noble Baroness also asked about the date of the draft consultation. I will write on that, because I do not have that detail with me.
The noble Baroness, Lady Hayman, asked whether the SI had been laid, withdrawn and then relaid. She is absolutely correct; this is the exactly the same thing, but there have been a number of changes since then. There were some typographical errors in the last one which this seeks to address. I think she also asked why it has taken so long. The best answer I can give is that it is due to pressing parliamentary business. Other questions related to the number of officers employed and why the West Midlands do not feature in the consultation. Again, I am afraid I cannot give any details on that but will write.
I hope I have answered your Lordships’ questions and that all noble Lords share my conviction of the need for this instrument. As I outlined, it will help move more income from fixed-penalty receipts to building enforcement capability and capacity within English councils, meaning that more offenders are brought to justice. At the same time, the increased deterrent effect should make people think twice before ruining the local environment for the rest of us. I commend these regulations to the Committee.
Packaging Waste (Data Reporting) (England) (Amendment) Regulations 2024
(8 months, 3 weeks ago)
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Lord Douglas-Miller
That the Grand Committee do consider the Packaging Waste (Data Reporting) (England) (Amendment) Regulations 2024.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Douglas-Miller) (Con)
My Lords, we have an afternoon of waste regulations today. These regulations were laid in draft before the House on 17 January. They amend the Packaging Waste (Data Reporting) (England) Regulations 2023. Since June last year, when those regulations were first amended, there has been significant change and development of the collection and packaging reforms. This includes a 12-month deferral to the full implementation of the packaging extended producer responsibility scheme, in order to focus on stakeholder engagement, and a delay to the Scottish deposit return scheme. These events have caused several issues that now require amendments to producers’ data reporting obligations.
I turn to the details of this instrument. These regulations introduce two key changes, but I assure the Committee from the outset that these changes are not a change of policy intent; instead, they address the delay to the Scottish deposit return scheme and stakeholder concerns. First, this SI removes the exemption from data reporting on drinks containers that would have been obligated in a Scottish deposit return scheme. The delay to that scheme, combined with the exemption from the data reporting regulations, meant that 180,000 tonnes of packaging would have gone unobligated for a number of years under both the deposit return scheme and the packaging extended producer responsibility. This amendment accounts for this development and ensures that all packaging supplied in the UK will attract a recycling obligation. The new provisions will exempt this material again once a deposit return scheme is operational.
Secondly, this instrument responds to stakeholder feedback on the definition of household packaging. These amendments address two key aspects of this feedback, broadening the definition to allow for more packaging to be exempt from disposal fees. The first update to the definition concerns packaging, or a packaged product, designed only for use by a business or a public institution: for example, a 50-litre beer keg. Under the current definition, if this beer keg is sold to a wholesaler before being supplied to the pub that uses it, this packaging would have to be reported as household packaging. However, large beer kegs are unlikely to end up in household bins. Our amendments introduce an additional test that offers producers the opportunity to exempt such packaging from being treated as household packaging.
The second update widens this “business only” exemption to include packaging or a packaged product that is supplied to public institutions, such as hospitals or schools, and is unlikely to end up being disposed of in a household bin, such as packaging for an ultrasound scanner or restricted medicines. These amendments allow for more packaging to be fairly exempted from being defined as household packaging and therefore not attract packaging extended producer responsibility disposal cost fees. However, all packaging, regardless of whether it is household packaging or not, will remain subject to packaging extended producer responsibility recycling obligations, as at present. This requires producers to purchase evidence from recycling facilities and those who export packaging for recycling; this is then used as proof that their recycling obligations have been met.
In addition to the two key areas that I have discussed, these regulations also make a number of other changes. There are four amendments that were identified not long after the original regulations came into force in early 2023. We were not able to include these in the amendments midway through the 2023 data collection year as they would have retrospectively increased obligations. We therefore always intended to make these changes starting from the 2024 reporting year.
This includes an amendment to clarify that the packer or filler is obligated for branded packaging if the only brand on that packaging relates to the packaging itself, not the product inside. For example, if a packer or filler puts their product in a branded “Jiffy bag” but does not add their own brand to it, the packer or filler is obligated, not Jiffy. I hope that is clear.
A further amendment to the regulations clarifies who is responsible for packaging where ownership is retained by an overseas producer while a UK-based third party imports or manufactures the product on their behalf. Once the ownership is passed to a UK-based client, that person, as the first UK-based owner, becomes obligated for that packaging. This could be a supermarket or wholesaler. This amendment ensures that packaging does not go unobligated.
The third amendment addresses a loophole to ensure that distributor producers retain their obligations where they sell empty packaging to large producers that then sell the packaging onwards without filling it, for example where a distributor makes coffee cups and sells them to a wholesaler, and then that wholesaler sells them on to a small coffee shop. In this scenario, the amendment will make the distributor the obligated producer for those coffee cups.
The regulations also amend the data reporting requirements on the nation in which packaging is sold. The regulations already require reporting by nation of packaging sold from a business to a consumer. This fix extends this requirement to ensure that data on the nation in which packaging is sold from one business to another is also collected. This was always the intention and will help enable recycling rates to be tracked individually in each nation. In addition, we are making an amendment that will aid distributor producers to comply with the regulations. It does this by requiring the Environment Agency to publish a list of all large producers that have reported data, supporting distributors to identify which of their customers are obligated producers in their own right.
Finally, the SI includes some minor amendments to correct drafting; some provisions to accommodate for the transition from the Producer Responsibility Obligations (Packaging Waste) Regulations 2007; and some changes to help avoid the reporting of one piece of packaging by two producers. These amending regulations will apply to England only, but similar amending regulations are being progressed in Wales, Scotland and Northern Ireland. My officials have worked closely with the relevant departments in the devolved Administrations in the development of this legislation.
In conclusion, I emphasise that the measures in these regulations are crucial for enabling the effective implementation of extended producer responsibility for packaging and realising its associated environmental benefits. I commend these draft regulations to the Committee.
Baroness McIntosh of Pickering (Con)
My Lords, I thank my noble friend for tabling these regulations. I have two quick questions.
First, throughout the Explanatory Memorandum, a key theme is the link between the regulations before us and the extended producer responsibility regulations. When might we expect to see them? The two fit quite closely together. I do not know whether my noble friend can give us a date, but I understand that those regulations will contain guidance relating to the ones before us.
Secondly, I looked up the cost-benefit analysis and if I understand it correctly, the costs are about £1,200 million per year, presumably to producers of the packaging —I do not know whether that includes local authorities—and the benefits are zero. If so, is that beneficial going forward, on the basis of that cost-benefit impact assessment?
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I thank the Minister for his informative introduction to this long-awaited and much-heralded SI. He will be relieved to know that, unlike the previous SI, I am not outraged by this one.
These regulations come into effect on 1 April 2024. Large producers must collect the data from 1 January to 30 June this year but may not have to report it. However, all must collect and report the data from the commencement date of 1 April to 30 June, according to the Explanatory Memorandum. It is not clear what the large producers are expected to do. Can the Minister provide some clarification?
The Environment Agency will provide the necessary guidance for this SI. Why is it necessary for the EA to do so? Why is Defra not doing it? The EA is already under-resourced and under pressure, with a wealth of other duties. Surely Defra, which has increased its staff considerably in recent years, could have produced this guidance for what is, after all, a government policy objective.
These regulations relate to the extended producer responsibility scheme, as the Minister said, whereby producers will pay a tax for the amount of packaging they release on to the market. However, information about the cost will not be available until the producer responsibility, packaging and packaging waste regulations are produced. Smaller producers are particularly affected by not knowing the likely level of fees, and cash flow is a vital element of their businesses. I am sure the Minister is ready for the next question and will have a substantive answer. Exactly when will these regulations be published? Without them, the exercise we are going through today is somewhat meaningless.
I fully support these regulations, which should help considerably to eliminate plastic and other non-compostable waste from our environment. I have been contacted, as I am sure have others, by the Federation of Wholesale Distributors. It too is wholly supportive of the regulations but has a couple of reservations. usbIt feels that it is essential that the Government and the Environment Agency work with the sector on the types of products that will be classified as household waste. Can the Minister give a reassurance on this issue? The FWD is also keen to see continued collaboration between the Government and the wholesale sector to ensure that EPR remains a pragmatic and inclusive policy. I fully support the FWD in its aims and objectives. It is only by working together that a solution which suits all will be found and, therefore, be successful.
Baroness Hayman of Ullock (Lab)
My Lords, I, too, thank the Minister for his clear introduction. Previous speakers have asked the questions I am particularly interested in, so I shall be brief. We support any measures aimed at promoting better use of our natural resources and increasing reuse and recycling. Establishing correct base data is fundamental to the success of the extended producer responsibility scheme for packaging, so we welcome this instrument.
We appreciate the reasons behind the instrument, which the Minister explained very clearly. However, I have a question about paragraph 10 of the Explanatory Memorandum, which deals with the consultation outcome. Paragraph 10.5 say that a third consultation on PEPR ran from July to October 2023. Paragraph 10.6 states that the response is being reviewed and that a summary is expected to be published in the spring of this year, which is only a few weeks away. Is it expected that anything in the outcome of that consultation might have been useful to have ahead of this legislation? It seems a bit odd that the Government did not finish the consultation before introducing this legislation. If there is something useful in it, are we likely to see a similar SI in the near future?
Lord Douglas-Miller (Con)
I thank the noble Baronesses for their questions. I am not sure that I grasped the nub of my noble friend Lady McIntosh’s question. I wonder whether I might chat to her afterwards about it, or I can write to her, or both.
The noble Baroness, Lady Bakewell, asked when producers are going to get clarity concerning fees for the extended producer responsibility packaging scheme. Producer fee rates will be set and published by the scheme administrator. Rates for the 2025-26 financial year will not be known until spring 2025, once all the producer packaging data has been received and checked. In the meantime, to support producers we aim to publish illustrative fees as soon as possible.
The noble Baroness, Lady Bakewell, also asked about stakeholder concerns about EPR. We continue to listen to feedback from all stakeholders throughout the development and delivery of this policy. The 12-month deferral of producer fees from 2024-25 has given producers an additional year to prepare for them, while also giving us the opportunity to consult producers on the deliverability of the draft regulations. Some of the amendments to this SI are in direct response to the feedback we have received from the consultation.
The noble Baroness, Lady Hayman, asked about the planned consultation. I think it would be best if I wrote to her on that. I am not aware of anything that is likely to come out of that which would require us to do another SI.
I hope I have covered most of the questions; if I have missed anything, I will write. I trust that noble Lords understand and accept the need for this instrument, which will make crucial changes to the Packaging Waste (Data Reporting) (England) Regulations 2023. These changes will ensure that drinks containers supplied in Scotland pick up an obligation in the same way that drinks containers supplied elsewhere do. The amendments will also widen the provisions that allow some primary and shipment packaging to become exempt from being defined as household packaging.
I thank noble Lords once again for their contributions and support today, and I commend these regulations to the Committee.
Electricity Supplier Obligations (Excluded Electricity) (Amendment) Regulations 2024
(8 months, 3 weeks ago)
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Lord Johnson of Lainston
That the Grand Committee do consider the Electricity Supplier Obligations (Excluded Electricity) (Amendment) Regulations 2024.
Relevant document: 12th Report from Secondary Legislation Scrutiny Committee
The Minister of State, Department for Business and Trade (Lord Johnson of Lainston) (Con)
My Lords, as a matter of good practice, I refer the Committee to my interests. I do not believe that there is any conflict with these specific measures.
The Electricity Supplier Obligations (Excluded Electricity) (Amendment) Regulations 2024, the Electricity Capacity (Supplier Payment etc.) (Amendment and Excluded Electricity) Regulations 2024, the Energy-Intensive Industry Electricity Support Payments and Levy Regulations 2024 and the Renewables Obligation (Amendment) (Energy Intensive Industries) Order 2024 were laid on 23 and 24 January this year. I acknowledge that the Joint Committee on Statutory Instruments provided a helpful review of these instruments and did not draw the special attention of this House or the other place to them. I also acknowledge that the Secondary Legislation Scrutiny Committee has reported these statutory instruments as instruments of interest to Members.
Together, these four instruments make up the British industry supercharger, which aims to support our most energy-intensive industries with the cost of electricity. Energy-intensive industries, known as EIIs, include important foundational manufacturing sectors such as steel and metals in Port Talbot, for example; chemical manufacturers; paper, glass, ceramics and so on. As foundation industries, these businesses are critical in the development of new projects including offshore wind. They therefore play an important role in the transition to net zero.
The British industry supercharger also provides relief for new and emerging industries such as battery manufacturers, which are critical to electric vehicles and manufacturers of semiconductors, which are critical to the high-tech economy. Due to their nature, these industries require significantly more electricity use than other sectors. As a result, they are disproportionately impacted by high electricity prices.
The Government already provide some electricity price support to these industries, but there remains a competitive gap with other nations. In the UK, our electricity prices for medium and large industrial users were the highest in western Europe in 2019, so these regulations importantly seek to close that gap, ensuring that British industry can thrive and grow, attracting new investment rather than losing out to cheaper production overseas, and helping to mitigate the risk of carbon leakage due to cheaper energy costs elsewhere.
This existing support was put in place in 2017 and, since then, over 370 businesses have benefited from an 85% exemption from certain renewable energy levies. Under these new measures, those business that are eligible for the exemption scheme will not only see an increase in the value of their exemption, up to 100%, but benefit from a new exemption from capacity market charges, as well as receiving compensation for a proportion of their network charges.
Taken together, the Government estimate that this support could be worth, on average, around £24 to £31 per megawatt hour, closing the competitive gap between UK industrial energy prices and those faced by international competitors.
These savings are funded by spreading the cost widely among all other electricity consumers, which is estimated to add between 5 to 10 pence per week to the average domestic bill, and increase electricity costs for non-domestic consumers by about £1 a megawatt hour, once all measures have been fully implemented by 2025-26. These are clearly estimates, since the energy market is highly volatile, but these are our projections and it is important to understand the scale of the effect.
The sectors eligible for the British industry supercharger support scheme employ around 400,000 workers and account for more than a quarter of total UK exports. Many are located in areas of economic disadvantage and provide good, high-paid jobs. This carefully crafted support will mean strategically important UK industries remaining competitive on the world stage. We will back these businesses to keep on growing our economy and delivering into the UK both high-quality jobs and investment as well as the products that we rely on for our everyday lives and work.
I shall summarise for noble Lords. These regulations amend the Electricity Supplier Obligations (Amendment & Excluded Electricity) Regulations 2015, which make provision for indirectly exempting eligible energy-intensive industries from the full costs of funding the contracts for difference scheme as set out in the Contracts for Difference (Electricity Supplier Obligations) Regulations 2014. They amend the Electricity Capacity (Supplier Payment etc.) Regulations 2014 to make provision for indirectly exempting eligible energy-intensive industries from the costs of funding the capacity market. They make provision under the Energy-Intensive Industry Electricity Support Payments and Levy Regulations 2024 for electricity support payments to be provided to energy-intensive industries for the purpose of alleviating the impact of electricity costs under the proposed network charging compensation scheme. They amend the Renewables Obligation Order 2015 to allow the Secretary of State for the Department for Energy Security and Net Zero to revise the renewables obligation level for the 2024-25 scheme year; this will allow the implementation of the increased EII exemption rate under this scheme from 1 April 2024 onwards.
In conclusion, this suite of regulations will help bring electricity costs down for the most energy-intensive and trade-intensive industries—such as steel, chemicals, glass and battery manufacturers—to a level similar to those of their European counterparts. In my view, this is crucial in helping UK-based firms remain competitive, incentivising investment and a move towards decarbonisation through electrification. With that, I beg to move.
Earl Russell (LD)
I thank the Minister for introducing the regulations. Before I start, let me say that I will not speak for longer than I would do if we were dealing with just one set of regulations; I will treat all the regulations together and not go through them individually. I will conclude by asking just a couple of questions. I apologise in advance if any of my questions are wrong. These are quite complicated regulations so I offer any advance apologies as necessary.
These four draft instruments propose to implement jointly the key aspects of the British industry supercharger, a package of measures that the Government announced back in February 2023. It aims to make strategic energy- intensive industries, or EIIs, in the UK—for example, steel production, cement production and glass manufacturing, as well as other areas including critical national infrastructures such as steel and chemicals—more competitive. This is to be achieved by closing the gap in electricity prices between the UK and our competitor countries, especially in the European Union. I note that these measures apply only in the UK and not in Northern Ireland.
Despite the technical names of these regulations, there is a back story to all of this, with the war in Ukraine, Covid and our continued reliance on importing energy. We know the impact that this has had on the increase in energy bills in the domestic sphere. These measures are the equivalent of saying, “It’s a question of the Government supporting these energy-intensive industries to make sure that they can continue, survive and flourish in a market where energy prices are rising”. However, I want to be clear: they water down some of the reforms to our carbon markets that have previously been agreed.
I understand that the impact of these measures will be that the cost of emitting 1 tonne of carbon under the UK’s emissions trading scheme will fall from almost £100, as it was a year ago, to about £47. I also understand that the costs will be borne by bill payers, be they domestic consumers, small and medium-sized industries, charities, the health sector or the education sector in this country. I understand that, for these industries, the percentage of their operating costs that is represented by the cost of energy has risen; in some cases, it has risen from 3% of their operating costs to 10% or in some cases 15%. So I recognise that these instruments are important and necessary. I will not go through them individually; I had a sentence on that but, in the interests of time, I will cut that out.
Lord Leong (Lab)
My Lords, I thank the Minister for setting out these instruments so clearly and the noble Earl, Lord Russell, for his contribution. These four instruments implement key aspects of the British industry supercharger, as mentioned by the Minister, a package announced in February 2023 to make energy-intensive industries—EIIs—in Great Britain competitive. These industries face challenges in the coming decade. The primary issue is the relatively high cost of energy in the UK, which makes it difficult for them to remain internationally competitive. Furthermore, there is a need for them to implement transitions toward greener technology, with lower carbon leakage, as we strive to move towards a net-zero economy. We recognise these challenges and broadly support these instruments, in so far as they seek to address them for these industries, which are vital for our national security and the literal fabric of our national growth.
The first instrument exempts eligible EIIs from the costs associated with funding the capacity market and seeks to ensure that there is sufficient supply despite fluctuations in demand, especially at peak times of day or in colder periods, and in supply, for example when wind generation is low. While we support this instrument, have the Government considered whether this will lead to any shortfall in the capacity market? If so, what measures are in place to mitigate this?
The second instrument concerns additional costs due to green levies which the UK imposes and some of our international competitors do not. We do not want this differential cost to drive our energy-intensive industries abroad, so this instrument adjusts an already existing scheme and exempts EIIs from 100% of the costs of funding various environmental schemes. Industrial electricity costs in comparable neighbouring countries are evidently not static, so will the Government keep them under review? If there is movement, do they have plans to make further adjustments if necessary?
For both these instruments, the Government’s calculations accept expected increased electricity bills for non-eligible users, including small businesses, charities and households. For this instrument, that is cited at 20p to 30p per megawatt hour. With the current spot price at just under £60 per megawatt hour and the reduction since the start of this year already being closer to £30, that certainly does not seem a massive amount. However, will the Minister outline how much these regulations, in conjunction, will add to the average household electricity bill per annum? The third instrument follows by necessity to enable the Secretary of State to revise the renewables obligation level from 2024-25.
The fourth and final instrument makes minor amendments to the Energy Act 2023, sets out funding for the payments via a levy on suppliers and appoints an administrator. Such support payments are to be made to the EIIs quarterly. Will there be an automated process for eligible recipients to receive these payments with the minimum administrative fuss? Have the Government made forecasts as to whether the costs of this scheme will outstrip the contributions from the electricity suppliers, which will effectively be funding the EII support levy? Are there any provisions in place for this possibility, so that the scheme does not collapse if it is successful?
This instrument allows corrections to be made to support payment entitlements. It will also make provisions for the administrator to hold a reserve fund so that EIIs will always be able to receive payment. Do the Government expect this will need to be used? If so, how big will it be and is there a maximum time limit over which the administrator will be expected to cover the shortfall?
We will be very happy to support these four instruments if the Minister can provide some assurances on the concerns I have mentioned. I look forward to his response.
Lord Johnson of Lainston (Con)
My Lords, I am grateful to the noble Earl, Lord Russell, and the noble Lord, Lord Leong, for their comments. These measures are extremely important if we are to have a sustainable heavy industry in this country. If I may take my own experience as Investment Minister, I have unquestionably been able to land a significant amount of investment—some of the biggest investments that we have announced to date, particularly in the car and advanced manufacturing industries—because we have these mechanisms in place. It is not even ambiguous. It is a clear point of fact in these discussions and is very important.
The noble Earl rightly raised that we do not want to be subsidising carbon-intensive businesses out of some desire to keep historic organisations going, contrary to our net-zero ambitions and our overall industrial policy. It is right to challenge the principle of carbon leakage, which is exactly what would happen if we did not operate this process. It is designed to help these businesses to decarbonise. For example, for Port Talbot, which will obviously be a receiver of these support packages, the intention is clearly that it will decarbonise. If you look at the car industry, it is going to an EV industry, and rightly so.
The noble Earl asked when the next review will be, how we will review it and how we add companies. This is an issue with novel technologies coming forward and with industries that need this support, which may not already be under a current and easy-to-define classification. Quite rightly, we will review this. The next review point is 2026. This measure will come into force next month so it seems logical that there is an 18-month or two-year period for review. I am absolutely sure that, at that point, there will be some quite significant changes. It gives us an opportunity to take companies and sectors out and put new companies and sectors in. I am positive about that.
I am also positive about the ability to spread the cost. The noble Lord, Lord Leong, rightly asked how much this will add to the electricity bills of an average household. These are the dreaded averages but we are looking at £4 to £5. I am very aware that there is a cost of living crisis and that there are other pressures on people’s households but, when you look at the ability to target this type of support for that type of diffuse outcome, it makes a lot of sense. The noble Earl, Lord Russell, mentioned the power-generating and petrochemical industries, which do not qualify for this. I am sure that there are others that do not qualify; we would be happy to provide a specific list. It is a 1% increase overall.
Noble Lords will know that I have spent many years in investment and looking at financial markets. The energy markets present a high degree of volatility. The gas prices now are lower than they have been for a considerable period. We are very dependent on gas, which is why our own power structure is so complex to manage. Looking at the network costs, the capacity market charges that are made and other exemptions, these mechanisms are really about removing the obligations to invest in the net-zero ambitions of the UK while expecting businesses to do it for themselves. There is a sensible trade-off there. It is well balanced.
The noble Lord, Lord Leong, asked whether there would be a shortfall in the capacity market point because of the effective compensation being paid. As I understand it, that charge has never been utilised. We are confident that there is no effect on the capacity market in terms of the charges that are being made; I would be happy to investigate that further. On technical guidance and the transparency around these processes, let me say that, as Minister for regulatory reform, better regulation or smarter regulation—whatever the current title is—impact assessments are important to me. I hope that all noble Lords have read the impact assessment reports for these statutory instruments; anyone listening to this debate is also welcome to do so. It is a transfer rather than a new cost so it does not show up on the impact assessment process as clearly as it would do if it were a new principal regulation.
It is important that there is as much transparency as possible because these are, in effect, transfer charges. This is a transparent system; to some extent, it requires the complicit consent of industry in general and the public. It is important that this is happening in a private sector capacity with government direction. We feel that this is absolutely the right thing to do. It is highly diffuse in its impact and very targeted. We believe that it will allow the UK to be incredibly competitive when it comes to developing its advanced manufacturing ambitions.
I hope that I have answered all the questions from noble Lords today. If I have not, I will certainly scrutinise Hansard and welcome any follow-up, but this is a relatively uncontentious series of statutory instruments.
In summary, the noble Earl, Lord Russell, mentioned that he was not going to address each statutory instrument individually; he was quite right not to, not just in the interests of time but because this is one package—they are naturally separated for reasons of legislative complexity but this is the British industry supercharger. It presents a powerful package to industry and sends a strong message to the country and internationally that we want to support businesses as they develop and decarbonise. Support for our economy gives us great growth for the future. With that, I commend this instrument to the Committee.
Renewables Obligation (Amendment) (Energy Intensive Industries) Order 2024
(8 months, 3 weeks ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Johnson of Lainston
That the Grand Committee do consider the Renewables Obligation (Amendment) (Energy Intensive Industries) Order 2024.
Relevant document: 12th Report from Secondary Legislation Scrutiny Committee
Energy-Intensive Industry Electricity Support Payments and Levy Regulations 2024
(8 months, 3 weeks ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Johnson of Lainston
That the Grand Committee do consider the Energy-Intensive Industry Electricity Support Payments and Levy Regulations 2024.
Relevant document: 12th Report from Secondary Legislation Scrutiny Committee
Electricity Capacity (Supplier Payment etc.) (Amendment and Excluded Electricity) Regulations 2024
(8 months, 3 weeks ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Johnson of Lainston
That the Grand Committee do consider the Electricity Capacity (Supplier Payment etc.) (Amendment and Excluded Electricity) Regulations 2024.
Relevant document: 12th Report from Secondary Legislation Scrutiny Committee
Data Protection Act 2018 (Amendment of Schedule 2 Exemptions) Regulations 2024
(8 months, 3 weeks ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Sharpe of Epsom
That the Grand Committee do consider the Data Protection Act 2018 (Amendment of Schedule 2 Exemptions) Regulations 2024.
Relevant document: 13th Report from the Secondary Legislation Scrutiny Committee
The Parliamentary Under-Secretary of State, Home Office (Lord Sharpe of Epsom) (Con)
My Lords, this instrument, which was laid before the House on 31 January 2024, would amend paragraph 4 of Schedule 2 to the Data Protection Act 2018, more commonly known as the immigration exemption. The Government are amending these provisions following the Court of Appeal judgment on 11 December 2023, which found the immigration exemption incompatible with provisions in the UK GDPR. The court suspended the effect of the judgment until 11 March 2024 to allow the Government time to make the necessary amendments.
I will briefly outline what the immigration exemption does and the changes being made by these regulations. Parliament included the immigration exemption in the Data Protection Act 2018. It provides a legal basis to derogate from certain data subject rights where their exercise is likely to prejudice effective immigration control. For example, a data subject has the right to request and receive details of what personal data is held about them and how it is being processed. Under the provisions of the immigration exemption, the Government may limit the information provided in response to that request if, for example, the provision of that information would tip off the data subject that they were about to be subject to immigration enforcement. The immigration exemption is therefore an important provision in the DPA 2018 that allows the Government to protect the functioning of the immigration system. This was noted specifically by the Court of Appeal in its judgment.
The Court of Appeal’s judgment noted two technical deficiencies in the current exemption. First, the safeguards to be applied to the immigration exemption needed to be in the legislation itself; this is being amended by the regulations’ new paragraph 4A, which inserts the safe- guards on the use of the immigration exemption previously contained in the immigration exemption policy document into the legislation.
The court also determined that the risks to rights and freedoms of individuals were not sufficiently set out in the legislation. This is being remedied by new paragraph 4A(3), which specifically sets out the rights and vulnerabilities that should be taken into account when exercising the exemption. By including these explicitly in the legislation, we are providing increased clarity on the safeguards that are already applied when exercising the provisions of the exemption.
The Government are also choosing explicitly to include provisions as to the balancing exercise that must be undertaken when determining whether the exercise of data rights is likely to prejudice effective immigration control and, if it is necessary and proportionate, to restrict such rights as a result. The draft regulations were subject to consultation with the parties to the judicial review proceedings as well as the Information Commissioner’s Office. The ICO issued a public response to the consultation confirming that it was content with the regulations.
The Government have acted to meet the requirements of the Court of Appeal’s judgment while continuing to ensure that there are necessary safeguards in the legislation to protect effective immigration control. I commend the regulations to the Committee.
Baroness Hamwee (LD)
My Lords, I thank the Minister for that explanation. I have to say that my recollection is that the issue is much wider than the exemption and ensuring that there is no tip-off to somebody who is about to be visited by immigration enforcement. Let me give an example that was borne out after the Act was passed: solicitors acting for data subjects were unable, as we had anticipated, to find out what the Home Office thought it knew—I put it that way deliberately —about their clients.
I have some general points to make; I will do so fairly quickly. It would be optimistic to think that the Home Office had taken from this saga that objections and criticisms—in the form of amendments, obviously—can be helpful because we could have avoided a lot of effort in rectification. My noble friend Lord Clement-Jones will go into some of the history; I must admit, I do not recall much detail except for being teased frequently by the noble Baroness, Lady Williams, when she was the Home Office Minister, because I brought up our objection to the immigration exemption so often.
I feel strongly that it should not have to be for non-governmental organisations that are no doubt strapped for cash to do so much in order to get things right. I appreciate that that is part of our democracy; I do not object at all to the fact that they can do so, of course, but they should not have to. An application, an appeal, another judicial review, another appeal—at what cost to those organisations and the taxpayer! I emphasise that there is an exclamation mark, not a question mark, at the end of that sentence.
This saga is one of those episodes that vindicates the role of the courts, often in language that I, for one, relish. We have spent a lot of time in the Chamber recently discussing the role of the courts in our constitution; to give one example of the language, I really liked the understated use of
“over-broad derogations from fundamental rights”.
As the Minister said, the litigants were consulted before the publication of the SI. The Secondary Legislation Scrutiny Committee reports that it made three points, of which one, on oversight, was rejected by the Home Office and one was regarded by the Home Office as not necessary. Can the Minister tell the Committee what these were and why they were not pursued?
On the detail of the instrument, I note that it will be a matter for the Secretary of State to balance the risks to the individual and the risks to the state. I happen to think that it is in the public interest to apply exemptions with a very light touch, but of course it is no secret that the Liberal Democrats have problems with the Home Office’s immigration policy, and I fear that the reputational ship is well on its way. Clearly, there is an imbalance of power. That is inevitable, but it is not easy for the individual data subject to exercise his rights, and we should be aware of that.
Can the Minister also tell us what the Home Office will do to ensure that there will be transparency of decisions so that it can appropriately be held to account? Mechanisms must be written into the procedures. New paragraph 4B of Schedule 2 provides for a record of decisions and reasons. How will that be published and what will happen to it?
Will the Minister also comment on the capacity of immigration enforcement—and whoever else needs to—to look at prospective decisions on a case-by-case basis for each disapplication? I recognise that that will not necessarily be a straightforward and easy exercise, but it certainly requires a great deal more than, “It’s okay; it’s immigration, so we can just rely on the exemption”. Case-by-case decision-making is very important.
Finally, I note that the Explanatory Memorandum tells us that there is no full impact assessment because the instrument
“does not substantively alter the safeguards and considerations for applying the Immigration Exemption”.
I have to say that I thought that was the point.
Lord Clement-Jones (LD)
My Lords, this set of regulations is a step forward, but with all the caveats that my noble friend made, and I have some more.
As the Minister confirmed, these regulations are the result of the Open Rights Group case—the Court of Appeal judgment in the3million & Anor, R (on the application of) v Secretary of State for the Home Department & Anor—which confirms the earlier High Court judgment in March 2023. In broad terms, the Court of Appeal found that the immigration exemption in Schedule 2 to the Data Protection Act 2018 conflicted with the safeguards in Article 23 of the UK GDPR, as the Minister said. This was because the immigration exemption was drafted too broadly and failed to incorporate the safeguards prescribed for exemptions under Article 23 of the UK GDPR. It was therefore held to be unlawful and was disapplied.
These regulations follow two previous attempts by the Home Office to craft an immigration exemption which contained sufficient safeguards to satisfy the requirements set out in Article 23 of the UK GDPR. This is the third shot at it. In order to make the immigration exemption compatible with the requirements of Article 23, as the Minister explained, the Government added a number of safeguards to the exemption which were not there before. These are set out in the regulations. They are worth stating because they are really important requirements, which were omitted previously.
They include requirements to: make decisions on the application of the exemption on a case-by-case basis; make separate decisions in respect of each of the relevant UK GDPR provisions which relates to the data subject; make fresh decisions on each occasion where there is consideration or restriction of any of the relevant UK GDPR provisions in relation to the data subject; take into account all the circumstances of the case, including the potential vulnerability of the data subject, and so on; and apply the exemption only if the application of the particular UK GDPR provision would give rise to a substantial risk of prejudice that outweighs the risk of prejudice to the interests of the data subject, ensuring that the application of the exemption is necessary and proportionate to the risks in the particular case.
You would think it rather extraordinary that those are excluded from the previous regulations. In addition, a record must be made of the decision to apply the exemption, together with the reasons for that decision. There is also a rebuttable presumption that the data subject will be informed of the use of the exemption.
The ICO welcomed them in its letter to the Home Office as, in its view, satisfying the requirements of the Open Rights Group case. In its view, the proposed changes will ensure that the exemption complies with Article 23(2) of the UK GDPR and ensure that there are appropriate safeguards to protect individuals. Since it took part in the case as an interested party, this is of considerable reassurance. I congratulate the Open Rights Group and the3million on not one but two notable successes in court cases which have forced the Home Office to amend the exemption twice.
Lord Coaker (Lab)
My Lords, I am pleased to follow the noble Baroness, Lady Hamwee, and the noble Lord, Lord Clement-Jones. I agree with much of what they said. I thank the Minister for his introduction to this important SI.
In May 2021, the Court of Appeal ruled that the wording of the exemption at the time did not comply with GDPR because it did not provide sufficient safeguards against abuse or risks to data subjects. In December 2021, the Government laid an instrument intending to rectify this by introducing guidance. However, officials then found that the guidance was not sufficient and a further Court of Appeal judgment required the Government to come forward with safeguards that they have now put into the legislation. We support the SI in doing that.
I have a couple of questions for the Minister regarding that. Paragraph 5.2 of the Explanatory Memorandum states that the High Court said that,
“the balancing test between the rights of individuals and the maintenance of effective immigration control should be set out more explicitly in the legislation”.
Can the Minister say a little more about how the Government intend that test to work and the criteria for the balance between the rights of the individual versus the rights of immigration control? How is it different from before? Presumably there was some sort of test even if it was not in any legislation. Is there any oversight of how this operates, anywhere that this has to be reported so that there is oversight of it? Who applies for the exemption? Who starts the process of saying, “We think that there should be an exemption in this case”. What is the process for that?
Like the noble Lord, Lord Clement-Jones, I am interested to know how many times this has been used over the past few years. How many exemptions have taken place? What is the status of those who have had this applied to them where their data was not compliant with the law? Presumably they were subject to some sort of immigration sanction. Can the Minister say anything about this?
There is a question that I always ask. Sometimes it is irrelevant, but I ask it anyway. Does it impact on anyone leaving the country? Obviously, it impacts on people coming in, but I am never sure about anyone leaving the country, which is a weakness in our immigration system. We spend a lot of time talking about people coming in, but I sometimes wonder whether counting people out might be an idea as well.
The Explanatory Memorandum talks of the need to consider any,
“potential vulnerability of the data subject”
Does this SI impact on unaccompanied children and children more generally or are children exempt and it is just applicable to adults? I am not sure. I apologise if that is in there, but I could not see it anywhere, so I just wonder whether it applies to children or just to adults. There is some criticism that the Government rejected the idea of including storage and retention periods in the Bill. Can the Minister say why they rejected that?
Lord Sharpe of Epsom (Con)
I thank all noble Lords for their contributions. I shall start with justification and the public interest, which is obviously at the core of this. Parliament included the immigration exemption as part of the Data Protection Act 2018, as has been noted, for the legitimate purpose of effective immigration control. The Court of Appeal declared in its judgment,
“that there can be no dispute that the Immigration Exemption has a legitimate aim and indeed seeks to advance important public interests.”
We agree with the court: the immigration exemption is vital to prevent the release of information which would otherwise prejudice effective immigration control. I particularly welcome its endorsement by the noble Lord, Lord Coaker.
I want to be clear with noble Lords what those important public interests are. Through targeted use of the immigration exemption, we are able to maintain our capability at the border to prevent criminals and those who seek to cause us harm threatening our country as well as to support other agencies and international partners. We are able to frustrate and prevent sham marriages and protect the integrity of ongoing immigration removal and enforcement action and forgery investigations. The immigration exemption is also used to protect people being forced into a marriage and to prevent individuals absconding when there is a planned immigration visit. The central aims are to protect our citizens, ensure the integrity of the border and prevent abuses of the immigration system.
The noble Lord, Lord Coaker, asked about the balancing test. I will come on to the use of the exemption in practice, but it is always clear that the balancing test has to be carried out, and will now be explicitly in the Act. In practice, I can reassure noble Lords that the exemption is employed at around 70% of subject access requests relating to immigration and the Border Force. The amount of data that is restricted by the use of the exemption is, in the vast majority of cases, very little. It is not simply the case that where one piece of information is found to be prejudicial to immigration control, the Home Office does not respond to a request. The piece of information may be redacted as a result, but otherwise a full response will be given. It must be both necessary and proportionate to use the exemption, and this must be balanced against the risk to an individual’s rights. These existing standards will now be set out explicitly in the legislation.
I acknowledge that there was a difference of opinion in the House over whether the previous regulations amending the immigration exemption in 2022 met the requirements of Article 23 of the UK GDPR. The courts have agreed with the Government on a wide range of issues in the hearing. They declared that in two areas in particular the amended exemption did not, and the Government respect that ruling. We are confident that these regulations meet the requirements of the judgment in full, and we are supported by the ICO in that opinion.
The noble Baroness, Lady Hamwee, asked whether we consulted the claimants. They were consulted as part of the development of the provisions, and they suggested some additions to the provisions. We accepted suggestions to provide detail on applicable storage periods in the Explanatory Memorandum. We did not accept a suggestion to alter the existing model of ICO oversight of the exemption. The existing model of ICO oversight of the Home Office is robust, and data subjects are able to challenge use of the exemption. I welcome the noble Lord, Lord Clement-Jones, acknowledging the ICO’s part in this.
We also rejected the suggestion to specify in the legislation the wording that must be provided to data subjects when informing them that the provisions of the exemption have been applied. The provisions of the exemption are already accessible to data subjects and adding that detail to primary legislation would be unhelpful.
As regards how the ICO assesses the Government’s use of the immigration exemption, it already assesses the Home Office as part of its statutory role as regulator. Those assessments are published as data protection audit reports, setting out the findings and any recommendations. Should a data subject disagree with the decision to apply the immigration exemption in their case, the usual redress mechanisms to contact the ICO are available.
The noble Lord, Lord Coaker, asked about the application of these rules to children. The immigration exemption applies to all immigration data, but there are special considerations in relation to minors, which are set out in the ICO’s guidance.
The subject of an impact assessment also came up, which relates to oversight and transparency more generally. It is important that these regulations retain the presumption that a data subject should be informed that the immigration exemption has been used—for example, to redact information provided to them in response to a subject access request. That allows the data subject to challenge that decision, should they believe that the application of the exemption is not justified. The ICO has appropriate powers to investigate whether the immigration exemption has been applied appropriately in a specific case. This is in addition to its overall assessment of the Home Office’s data protection practices, which include the use of the immigration exemption more broadly.
An impact assessment was carried out as part of the inclusion of the provision for the immigration exemption in the Data Protection Act 2018. A further supplementary impact assessment was conducted as part of the amendment to the exemption by the SI in 2022. This is noted in the Explanatory Memorandum. Given that there is no substantive change to the safeguards and scope of the exemption, we have not completed a new IA for this instrument.
Lord Clement-Jones (LD)
I am sorry; the Minister seems to be moving on from the impact issue. Clearly there was a period when the old regulation, which is now being superseded, was in operation and individuals were impacted. In a sense, an inappropriate exemption was used. What data does the Minister have about those individuals and the impact on them? What redress do they have? The Minister skated over the ICO’s redress mechanism. Is there no direct mechanism to the Home Office?
Lord Sharpe of Epsom (Con)
I did not skate over it at all; I referred to it explicitly and am happy to do so again, if it would help. I do not know if there is any specific redress to the Home Office. I would imagine not, given that it is explicit that data subjects should go via the ICO. If I am wrong on that, I will clarify.
I have no particular data on the subjects who may have been covered by this before the court’s decision, so I will have to find out, come back and write to the noble Lord if there is anything useful to add.
The Home Office already has relevant guidance and training in place for those exercising the immigration exemption provisions, but we are undertaking a review of those materials to ensure that they align with these regulations. That will be completed in time for the 11 March deadline to amend the current exemption. The instrument is making existing safeguards explicit in the legislation, which are already captured in the existing training and guidance, so we do not expect substantive changes to be needed.
The costs of the court case are not yet settled, but I am happy to commit to write once they have been.
There are a couple more bits to say. How often is the exemption used? The honest answer is not very often. I think I referred to this earlier, so it is probably redundant to say it again but, for the record, in the year ending October 2023, the immigration exemption was applied in around 70% of subject access requests received in relation to immigration citizenship and the Border Force. Of those, the vast majority had only a small amount of data redacted under the use of the exemption. So I suppose the answer to the noble Lord’s question is that it will have a very minimal impact on people, but I commit to clarify that.
Finally, the noble Lord, Lord Clement-Jones, asked about the relationship between the DPA and retained EU law. The official answer is that the focus of this SI is the immigration exemption and that discussions of the rules and the implications for the DPA 2018 are probably best debated as part of the DPDI Bill, which will, I believe, come to the House on 20 March. The unofficial answer is that I cannot comment on the noble Lord’s disposition because I did not really understand it and I do not have much knowledge of this subject. However, I note that we have left the EU: the people voted. Our rules can now be amended to our own circumstances, and of course, that applies across the entire legal suite. It was a pretty clear vote by the people of this country; I know that that does not suit the Liberal Democrats.
In closing, I hope that I have satisfactorily answered the points that were made and that noble Lords understand the necessity—
Baroness Hamwee (LD)
Before the Minister ends, can I go back to the record the Home Secretary is to keep under the schedule’s new paragraph 4B? It provides that, when he makes a decision, he must keep a record and the reasons for it. In essence, my question is about whether this will be public to any extent or whether transparency will be confined to the data subject. Also, I do not expect the Minister to go into any detail on this now or to comment, because he gave the figure, but 30% seems very high to me. The Immigration Law Practitioners’ Association has commented in the past—not the immediate past but, then again, I have not asked it—about the difficulty data subjects and, in particular, their legal representatives face because they simply do not know what the Home Office thinks it knows about their clients, which is an important starting point for any legal representation and any claim. I make this point because it really needs to be made.
Lord Sharpe of Epsom (Con)
I thank the noble Baroness for making her point. As regards what is required of the Home Secretary, for obvious reasons, it will not be public, although I agree that transparency is important when it comes to culture; we talked about that earlier in the context of the police, where similar rules apply. It will, however, be available to the ICO and subject to the usual transparency rules at the ICO’s request.
As I have already noted, we understand the necessity of these changes in order to ensure compliance with the Court of Appeal’s judgment and to increase clarity around the use of the immigration exemption. With that, I commend the draft regulations to the Committee.
Investigatory Powers Act 2016 (Remedial) Order 2023
(8 months, 3 weeks ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Sharpe of Epsom
That the Grand Committee do consider the Investigatory Powers Act 2016 (Remedial) Order 2023.
Relevant document: 1st Report from the Joint Committee on Human Rights
The Parliamentary Under-Secretary of State, Home Office (Lord Sharpe of Epsom) (Con)
My Lords, this order was first laid before Parliament for consideration on 20 March 2023. It was laid again on 18 October 2023, and sat for 60 days. It was debated in the other place on 23 January 2024. As noble Lords will be aware, it is a top priority for the Government to maintain our national security and keep the public safe. The Investigatory Powers Act 2016 provides robust privacy safeguards in relation to investigatory powers.
The United Kingdom’s investigatory powers regime is world-leading and provides the international standard on transparency, privacy, redress and oversight to accompany the exercise of these critical powers. This House recently considered the Investigatory Powers (Amendment) Bill, on which noble Lords provided expert scrutiny. I am hopeful that today’s debate will be approached in the same spirit.
This instrument will make necessary and important amendments to the IPA following the May 2021 judgment from the Grand Chamber of the European Court of Human Rights in the case of Big Brother Watch and others v the United Kingdom, which I will refer to as BBW. The ruling from the Grand Chamber related to the United Kingdom’s bulk interception regime under the legislation which preceded the IPA—the Regulation of Investigatory Powers Act 2000. The Grand Chamber found that certain aspects of that regime were not compliant with Article 8 of the European Convention on Human Rights, on respect for private and family life, and Article 10, on freedom of expression. While most of the incompatibilities identified by the Grand Chamber were addressed through the introduction of the IPA, there was one outstanding issue which requires an amendment to the IPA. This relates to journalistic safeguards, which I will come to later.
I will first briefly explain how the bulk interception regime operates, so that it is clear how these additional safeguards will be applied. The main purpose of a bulk interception warrant is to acquire overseas-related communications. That material is then retained for the minimum amount of time necessary for the authorised purposes. Criteria are used to search through that material to find material which is useful in support of operational purposes. Useful material is then retained for the minimum amount of time necessary for the authorised purposes.
Section 154 of the IPA covers the journalistic safeguards for bulk interception. Presently, it requires only that the Investigatory Powers Commissioner be informed if material thought to contain confidential journalistic material or sources of journalistic material is retained, following examination, for a purpose other than its destruction. There are additional safeguards in the interception code of practice. The code requires that the relevant intelligence agency seek the agreement of a senior official within a warrant-granting department before the agency may select material for examination, in order to identify or confirm a source of journalistic information.
The purpose of this remedial order is to amend the IPA to strengthen the existing journalistic safeguards for bulk interception under Section 154, which is not possible through the delegated powers provided for within the Act. It does this by requiring that approval from the Investigatory Powers Commissioner is obtained before any criteria are used where the purpose is to select material for examination that is confidential journalistic material or a source of journalistic material, or where it would be highly likely to do so. The retention of confidential journalistic material or sources of journalistic material must also be authorised by the Investigatory Powers Commissioner. There is also an urgency provision, which I will come on to later. It is necessary that the Government introduce this reform to ensure that our intelligence agencies can maintain their ability to carry out bulk interception in line with the convention and the Human Rights Act 1998.
Bulk interception is an important operational tool which is used by intelligence agencies to identify threats to the national security of the United Kingdom—it was recognised by the Grand Chamber as such—as well as in tackling serious and organised crime and maintaining the United Kingdom’s economic well-being. The Investigatory Powers Commissioner already provides oversight of the acquisition, examination and retention of confidential journalistic material and sources of journalistic material obtained under bulk interception. Legislative change is needed so that these safeguards are expressly set out within the legislation. Failure to amend the IPA would mean that the UK’s bulk interception regime would continue to be in breach of Article 10 of the convention.
This remedial order introduces amendments to Section 154, the creation of a new Section 154A and a minor consequential amendment to Section 229(8). The amendment to Section 154 will introduce enhanced safeguards relating to the criteria used to select material for examination that will identify confidential journalistic material or identify or confirm sources of journalistic material derived from material acquired through bulk interception. The permission of the Investigatory Powers Commissioner will be required before such material can be purposefully selected for examination or knowingly retained for a purpose other than destruction.
Permission from the commissioner is also required before such material may be retained. The commissioner will make that decision on the basis of whether it is in the public interest to retain the material. The commissioner may impose conditions on the retention of the material. The creation of the new Section 154A introduces an urgency process for dealing with requests for authorisations out of hours. These authorisations will be subject to subsequent judicial approval and any search activity must cease if approval is refused, so urgent applications will still be subject to rigorous independent scrutiny. The judicial commissioner will make their decision on the basis of whether it is in the public interest to approve the use of the search criteria.
The amendment to Section 229(8) is a consequential amendment which includes reference to the new functions of the Investigatory Powers Commissioner in Sections 154 and 154A so that they are treated consistently within the IPA. Sections 229(6) and (7) require judicial commissioners to not act in a way that is contrary to the public interest, national security, the prevention or detection of serious crime or the economic well-being of the UK. Section 229(8) then disapplies that requirement when the judicial commissioner is exercising various functions such as considering whether to approve the authorisation of a bulk interception warrant. Subsection (8) is amended by this instrument to include decisions by the judicial commissioner under new Sections 154 and 154A. This is consistent with similar judicial commissioner functions in other parts of the IPA and ensures that the judicial commissioners can exercise their functions properly.
This remedial Order will ensure that the United Kingdom fulfils its obligations under Article 10 of the convention by making the necessary changes to the bulk interception regime under the IPA in order to be compliant with the findings of the Grand Chamber in BBW. These changes will further strengthen the world-leading safeguards within the IPA, which is a crucial tool in the ongoing effort to protect the United Kingdom and its citizens. I therefore commend the draft Order to the Committee.
Lord Coaker (Lab)
My Lords, I thank the Minister for his helpful introduction.
This SI concerns the selection for examination and retention of confidential journalistic material which has been collected under a bulk interception warrant. Big Brother Watch brought a challenge to the Regulation of Investigatory Powers Act 2000, the predecessor of IPA, and the courts found several incompatibilities with the ECHR. Most of those incompatibilities were resolved by the introduction of the IPA in 2016. One issue remained—where an intelligence agency seeks to select confidential journalistic material for examination obtained under a bulk interception warrant or identify sources of journalistic material, the selection criteria used should be subject to prior independent authorisation. Where they are found during the examination of bulk data, their retention must be independently authorised.
In its report on the draft version of this instrument, the JCHR made three recommendations. Two have been accepted by the Government and integrated in this SI. However, the Government have not fully accepted the third recommendation, which was that security agencies engage with the Investigatory Powers Commissioner so that they can review journalistic material which had been retained before this SI is implemented. The Government responded that notification of the IPC is already required for an application for the retention of confidential journalistic material and that a judicial commissioner also must consider the application. Additionally, the IPC audits statements submitted for retention applications. However, if the Government accept that there is a need to change the law, surely they accept that there is a need to create an additional review in cases that will not be captured by the new regulations?
I have some questions which may be helpful for those who read these proceedings. Can the Minister explain why these changes have not been brought about as part of the Investigatory Powers (Amendment) Bill, given that it is still going through Parliament? New Sections 195 and 195A were inserted into the Investigatory Powers Act on Report in this House. They create additional safeguards for journalistic material for bulk equipment interference. Why is this being introduced separately? Can the Government provide more details on why they have not fully accepted the third recommendation of the JCHR?
In Article 2 of the SI before us, the Government talk about
“Additional safeguards for confidential journalistic material etc”,
and state that the two bodies that can investigate or seek approval are the Investigatory Powers Commissioner or a senior official. The Minister knows that I will ask who the senior official is. How senior does the senior official have to be? In what circumstances would you go not to the IPC for approval but to the senior official? I know the Minister tried—I expect that he thought that people would ask what “urgent” means—but can he say a little more about urgency, even though he included some of that in his remarks?
Does the senior official have to report every decision to the IPC, as outlined in the substituted Section 154A? Does the senior official have to inform the IPC within days or weeks of any decision that they have made? What happens if the IPC does not approve of the decision made by the senior official, given that, presumably, in the interim the Security Service will have acted as though it had permission? I hope that is clear: presumably a senior official can give permission, then for a few days the Security Service can operate as though it had permission, then the IPC turns around and says, “I don’t think that was the right decision and you do not have permission”. How does it function in the interim, if that is clear? You have a gap between the senior official giving permission and the IPC turning it down, which may be a few days. Does the Minister have anything to say about that?
Does the IPC or the senior official have to record their reasons for believing that the public interest in obtaining the information outweighs the public interest in maintaining confidentiality? In other words, do they have to be transparent about their reasons for coming to their conclusion? Similarly, under new subsections (6), (7) and (8), does the IPC or the senior official have to record the reason why the public interest in retaining the information outweighs the public interest in destroying the information that has been obtained? Again, it is the test about public interest and the conflict between confidentiality and openness and transparency. I wonder whether the Minister has anything to say about that.
However, I understand the need for the SI. I think some clarity around some of those questions would be helpful for those who read our deliberations but, with that, we support the SI.
Lord Sharpe of Epsom (Con)
I thank the noble Lord for his participation and support in the debate today. As I set out earlier, the changes that we are seeking to make to the Investigatory Powers Act will bring the bulk interception regime in line with the requirements of the European Court of Human Right’s Grand Chamber judgment in the case of Big Brother Watch. As I set out, it will ensure that the UK meets its obligations under Article 10 of the convention concerning confidential journalistic material and sources of journalistic material. Prior independent authorisation will be required where the purpose of the use of criteria to select material for examination is to identify confidential journalistic material or to identify or confirm a source of journalistic material. Prior independent authorisation will also be required for the retention of such material for purposes other than its destruction.
The noble Lord asked why this amendment was not taken forward as part of the Investigatory Powers (Amendment) Bill. That Bill was announced in the King’s Speech on 8 November 2023 and was introduced into the House of Lords on the same day. The Home Office was not able to pre-empt the contents of the King’s Speech and there was no guarantee that the Bill would be brought forward in the fourth Session. The judgment in the BBW case was handed down in May 2021 and, as a considerable time has passed and with no guarantee of a suitable legislative vehicle, the Home Office felt it was necessary to remedy the incompatibility as soon as possible. A remedial order was therefore the most appropriate course of action; essentially, it was timing.
Lord Coaker (Lab)
I know it sounds like dancing on the head of a pin, but what “senior” means is quite important, so I ask the Minister to clarify that.
Lord Sharpe of Epsom (Con)
I take the point. I absolutely will clarify it, if possible.
I would love to read the Committee my last answer, but I cannot read the writing, so I am sorry, and I apologise to whoever wrote it. Whatever it says, I will write to the noble Lord—or, rather, type—when I have deciphered it. I am very grateful for his contribution in this debate. As I set out, the changes we are seeking to make will ensure that the UK’s bulk interception regime meets its obligations under Article 10 of the convention and strengthens existing safeguards for journalists. I therefore commend this order to the Committee.