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Speaker’s Statement
(7 months ago)
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Mr Speaker
Order. Before we begin today’s sitting, I regret to inform the House of the death of a former Member, Lord Field of Birkenhead. Frank navigated a career as a formidable MP, notably as the Minister tasked by Tony Blair with “thinking the unthinkable” on welfare reform. His sharp intellect and independent spirit made him a formidable campaigner against hunger, food poverty and climate change, and for numerous causes related to the Church of England. In recent years, I have been grateful for his championing of Parliament’s commitment to stamp out modern slavery from our supply chains. I am in no doubt that his efforts have saved many lives from this shameful criminal activity. He was one of a kind, and he will be sorely missed. [Hon. Members: “Hear, hear.”]
Oral Answers to Questions
(7 months ago)
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Lee Anderson (Ashfield) (Reform UK)
The Secretary of State for Northern Ireland (Chris Heaton-Harris)
Before I begin, may I also put on record the Government’s sincere condolences to the family of Frank Field, who sadly passed away last night? The Member for Birkenhead for over 40 years, Frank was a titan of this House. He embodied its best values of decency, honesty and integrity. I got to know him particularly well in those remarkably calm Brexit years, when I was the junior Government Whip detailed to “Just get a few friends on the other side of the Chamber to vote in the appropriate manner.” I know the whole House will join me in wishing his family well at this difficult time.
I would also like to start by welcoming the news that the Post Office (Horizon System) Offences Bill will be amended to include Northern Ireland. I thank the Minister of State, Department for Business and Trade, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) for all the productive meetings and discussions he has had with the First Minister, the Deputy First Minister and Justice Ministers in Northern Ireland.
To answer the question asked by the hon. Member for Ashfield (Lee Anderson), the Government will never be neutral when it comes to expressing our support for the Union and Northern Ireland’s place in it. It is clear that the Union is going from strength to strength. We are committed to further strengthening and safeguarding the Union through the implementation of the Windsor framework and our delivery of the “Safeguarding the Union” commitments. Northern Ireland now has the best of both worlds. It has a stable Northern Ireland Executive, backed by the support and strength of the UK Government. Northern Ireland’s peaceful place in the UK is secured by the Belfast/Good Friday agreement and the principle of consent set within it. I regularly speak to my Cabinet colleagues about their and their Departments’ role in safeguarding Northern Ireland’s interests in the Union.
Lee Anderson
I voted for the Windsor framework because the Prime Minister said it removed the Irish sea border, yet £192 million is budgeted to be spent on installing border posts for the non-existent Irish border. Will the Secretary of State please advise the House on the number of checks on people and goods travelling through Great Britain and Northern Ireland? Have those checks increased or decreased since the introduction of the Windsor framework?
Chris Heaton-Harris
I thank the hon. Gentleman for his question. It really does depend. Even in the Northern Ireland Protocol Bill, there was provision for a red lane for goods going into Northern Ireland that might flow into the Republic of Ireland. The answer does rather depend on whether the numbers he has looked at are for checks in the red lane or the green lane, or for checks under the new internal market scheme. The numbers rise and fall depending on a whole host of factors. When trade increases, as it is doing, so will the number of checks as a whole, but the percentage will go down, because the checks will be mostly on goods going through the red lane. We will soon get to the point promised in the Command Paper of there being no checks when goods move within the United Kingdom internal market system, save those conducted by UK authorities as part of a risk-based or intelligence-led approach to tackling criminality, abuse of the scheme, smuggling or disease risk. That will ensure the smooth flow of goods within the UK internal market.
Sir Robert Buckland (South Swindon) (Con)
A vital part of securing Northern Ireland’s place in the Union is the shared prosperity fund, which is about levelling up and making sure that Northern Ireland has its fair share. Funding is due to end next year, in March 2025. What clarification can the Secretary of State give to community, voluntary and other groups that need to plan ahead, and whose funding faces a cliff edge if they do not have assurances soon?
Chris Heaton-Harris
I thank my right hon. and learned Friend the Chairman of the Select Committee. I am wary of giving too many assurances, because we are talking about a time beyond the next general election, when there will be a new Conservative Government, who will have priorities that they will wish to update. We know about the success that the shared prosperity fund has had in Northern Ireland. I have visited projects that it has funded. I would like to think that it will continue strongly across the next spending review period.
Gavin Robinson (Belfast East) (DUP)
On behalf of my colleagues, may I extend our deepest sympathies to the family of Frank Field? He and I shared four years in the House, and I always found him to be a very warm and engaging colleague—someone who had time for young parliamentarians like me, and who believed very much in this place and our country. May I also thank the Secretary of State and the Minister of State, Department for Business and Trade, the hon. Member for Thirsk and Malton (Kevin Hollinrake), for the inclusion of Northern Ireland in the Horizon scandal Bill? That is incredibly important.
As a Unionist, I believe in this country and will work every day to strengthen our place in it. We recognise the “Safeguarding the Union” Command Paper as an important stepping-stone in maintaining and securing our position. The Secretary of State mentioned the Government’s commitment to eliminating all routine checks in the UK internal market system, and we look forward to his faithful delivery of that. However, while we have seen the creation of the East-West Council, we have heard little about the construction of InterTrade UK or the establishment of the independent monitoring panel. May I ask the Secretary of State to update the House on those issues?
Chris Heaton-Harris
I thank the right hon. Gentleman for his question, and look forward to working with him in his new role. I can assure him that His Majesty's Government are working apace and will deliver on our Command Paper commitments in full, including our commitments on checks. He asked about a range of bodies and pledges that we have made. Just last month we held the inaugural meeting of the East-West Council, which gave Ministers from the United Kingdom Government and the Northern Ireland Executive an opportunity to come together to discuss the main priorities of the council’s work programme. We are committed to strengthening and safeguarding the Union through our implementation of that programme, and we are committed to safeguarding the UK internal market by establishing new bodies such as InterTrade UK, which will promote and facilitate trade in the United Kingdom. I will respond to the right hon. Gentleman’s other points when time allows.
Gavin Robinson
The Secretary of State will recognise that one of the issues absent from the Windsor framework and subsequent agreements is the conclusion of an arrangement for veterinary medicines. He will know how important agriculture is to the Northern Ireland economy, and he will also know that Northern Ireland produces 10 times as much food as we need, to the benefit of our nearest neighbours. The establishment of the veterinary medicines working group, with the help of the Minister of State and my hon. Friend the Member for North Antrim (Ian Paisley), has been extremely positive, but there is a cliff edge towards the end of next year. We need a successful conclusion to the issue, and I would be grateful if the Secretary of State could inform the House that that will happen.
Chris Heaton-Harris
This matter is very important to the Government and for Northern Ireland. The Government’s priority is to secure a long-term sustainable solution on veterinary medicines, and we wish to pursue such a solution through discussions with the European Union, and to prepare safeguards for all scenarios. As the right hon. Gentleman said, we have set up a veterinary medicines working group to advise the Government on solutions, and we are grateful for the expertise of Members who are joining that group. It has met twice, and aims to report in a timely manner in June. In the meantime, we have put in place a grace period arrangement until the end of 2025, which supports continuity of supply in Northern Ireland. However, the right hon. Gentleman is right to emphasise the importance of this matter, and we are working hard on it.
Andrew Selous (South West Bedfordshire) (Con)
The Minister of State, Northern Ireland Office (Mr Steve Baker)
The UK Government are committed to the long-term economic growth of Northern Ireland, and are working closely with the Executive and business to demonstrate what a fantastic place it is to live, work and invest in. For instance, we have delivered the Northern Ireland investment summit; we are committed to levelling up Northern Ireland’s economy, with £617 million being spent on four city and growth deals; we are implementing key deliverables in the “Safeguarding the Union” Command Paper; and we continue to promote Northern Ireland’s unique institutional arrangements.
Andrew Selous
With the Executive restored and enjoying a financial package of more than £3 billion, does the Minister agree that Northern Ireland businesses are now in position for an era of transformational success?
Mr Baker
Absolutely, and I am grateful to my hon. Friend for highlighting that, but funding is, of course, only one part of the solution. The transformation of public services is vital, but achieving that will require innovative strategic thinking as well as some revenue raising, and the Government stand ready to assist the Northern Ireland Executive with formal structures to help them achieve those ends.
Jim Shannon (Strangford) (DUP)
I thank the Minister for his answer. We have a massively skilled workforce in Northern Ireland, as everyone here knows, including the Minister. However, in order to increase investment, we must create more skilled jobs and employ more people in the aerospace sector. What discussions has the Minister had with Cabinet colleagues about securing more jobs in our aerospace community in Northern Ireland? We can do more; we just need a bit more help.
Mr Baker
I am grateful to the hon. Gentleman for his question. I have visited Spirit AeroSystems, as well as other related companies, and there is a terrific pool of talent and skill in Northern Ireland. We work with the Department for Business and Trade to ensure that the same advantages are available to people and businesses in Northern Ireland as across the rest of the UK. I sense that brevity requires that I do not elaborate on DBT’s full offer, but it is certainly there. I will write to him to set out the detail.
Kerry McCarthy (Bristol East) (Lab)
The Minister of State, Northern Ireland Office (Mr Steve Baker)
The UK Government regularly engage with the recently restored Northern Ireland Executive on a range of issues, and we will continue to work together for the benefit of Northern Ireland. Only yesterday, I met Minister Muir, who is responsible for agriculture, environment and rural affairs, to discuss the implications of the Windsor framework, and to work through how I can help him to succeed across his full spectrum of responsibilities.
Kerry McCarthy
I thank the Minister for his positive response. He will be aware of the ecological disaster at Lough Neagh, which supplies 40% of Northern Ireland’s drinking water. It is partly caused by the run-off of agricultural fertiliser, climate change and the spread of the invasive zebra mussel, but has been exacerbated by sewage dumping. Can he say a bit more about this issue? In the past, I have found that his Department and the Department for Environment, Food and Rural Affairs have not been willing to work with Stormont to address environmental issues in Northern Ireland. What can he do to address them?
Mr Baker
I have stood on the shores of Lough Neagh and been conscious of the condition of that enormous body of water, which is beautiful. The reality is that the responsibility for it is devolved, and we did not have an Executive for a period. We are absolutely delighted that it is back and being carried forward in a constructive spirit. As I say, I will continue to work with Minister Muir. I do not want to tread on his toes, but we will put ourselves at his disposal to offer whatever help we reasonably can. He is a Minister of great dedication and energy, and I look forward to him succeeding on this urgent matter.
Sir Oliver Heald (North East Hertfordshire) (Con)
Does my right hon. Friend agree that Frank Field left an immense legacy in the field of pensions? He started off as chair of the all-party parliamentary group on the Maxwell pensioners problem, and was then an inspired Minister of State. He was subsequently involved in all the great debates we had on pensions. We will miss him.
What impact does the Minister think that nature-based solutions to climate change could have on the sorts of problems in Northern Ireland that we have been discussing?
Mr Baker
I am most grateful to my right hon. and learned Friend for his question, and I agree with him on the pensions point. On nature-based solutions, I would love to have that conversation with him, perhaps in the Tea Room. It is not my specialist area of expertise, and I am confident that Minister Muir would be interested to hear my right hon. and learned Friend’s ideas. If he wishes to share them with me, I will gladly pass them on.
Alexander Stafford (Rother Valley) (Con)
Dr Luke Evans (Bosworth) (Con)
The Secretary of State for Northern Ireland (Chris Heaton-Harris)
I am sure that my hon. Friends will welcome the fact that, once again, Northern Ireland has local politicians taking decisions in a local Assembly that is accountable to local people. With a funding package worth over £3 billion, the Executive are taking forward the vital work of public service transformation and delivering sustainable finances, and are ensuring better outcomes for the people of Northern Ireland in their daily lives. The impact of all this has been unbelievably positive.
Alexander Stafford
The commitment that this Government and my right hon. Friend have shown in pushing for the restoration of the Northern Ireland Executive is clearly demonstrated in the £3.3 billion for transforming public services, but what help are the Home Office and civil service providing to their colleagues in Northern Ireland to make sure that people there have the modern and efficient public services that they deserve, and how will that benefit all four nations?
Chris Heaton-Harris
I thank my hon. Friend for his question. I agree that there is a fantastic opportunity, which we are trying to take, for the UK Government to collaborate with and support the Northern Ireland Executive in transforming public services. The UK Government have high hopes that Ministers in the Executive will move quickly to deliver on their commitments to set up a transformation board, and we are excited to work with Northern Ireland Ministers to produce plans that will deliver transformation for Northern Ireland. Indeed, I met the First Minister and Deputy First Minister last week; we talked about this work and how we can further it in the very short term.
Dr Evans
Does the Secretary of State agree that the restoration of the Northern Ireland Assembly provides the stability for further private investment in Northern Ireland? This is a massive opportunity; it is the missing piece in the puzzle, and could make a huge difference. How does he intend to capitalise on this?
Chris Heaton-Harris
My hon. Friend is absolutely right. The restoration of devolved government not only provides certainty and stability for business but allows us to harness our combined energies and expertise to make Northern Ireland a fantastic place to live, work and invest. My right hon. Friend the Minister of State has reminded the House of the success of the Northern Ireland investment summit last September, which welcomed 180 business investors from around the world, and of our £617 million investment in Northern Ireland’s four city and growth deals. Recently I visited Washington DC with the First Minister and Deputy First Minister, and it is fair to say that the US business community is now well aware of the amazing opportunities in Northern Ireland and is looking at them hungrily.
Mr Gregory Campbell (East Londonderry) (DUP)
The return of devolution has to be built on, particularly as there are still some issues to be resolved. While some in Northern Ireland concentrate on complaining about the outstanding problems, there are those of us who are committed to resolving them. The Secretary of State is in a better position than most to help to resolve them. Will he recommit today to our seeing further moves in the coming weeks in the direction of resolving all the outstanding issues?
Chris Heaton-Harris
I congratulate the hon. Gentleman on his recent honour for his many years of elected public service in this place and to his constituents. Yes, he absolutely can have that commitment from me. I am committed to delivering at great pace on all the pledges we made in the Command Paper, and I am absolutely committed to delivering the best outcomes for everyone across Northern Ireland, because that is what Northern Ireland deserves.
Sir George Howarth (Knowsley) (Lab)
Of course the restoration of devolved government in Northern Ireland is very welcome. The Minister will be aware that polling evidence has shown a big growth since the Good Friday agreement in the number of people who identify as Northern Irish, as distinct from Irish or British. What implications does that have for the way that devolved government conducts itself, going forward?
Chris Heaton-Harris
I thank the right hon. Gentleman for his question, because there is a genuinely interesting point about the growth in the number of people who live in Northern Ireland who declare themselves to be Northern Irish. I would like to think that it is reflected in the way that the First Minister and the Deputy First Minister go about their business. They are working together in a respectful and positive way, respectful of each other’s communities, and wanting the best for the place they represent. I believe that signifies a healthy development for the future of Northern Ireland politics.
Hilary Benn (Leeds Central) (Lab)
Thank you, Mr. Speaker, for your eloquent tribute to Frank Field. He was a brave and a generous man.
We look forward to working with the right hon. Member for Belfast East (Gavin Robinson) in his new position.
The UK’s successful bid to host the 2028 Euros with Ireland is a fantastic opportunity for Northern Ireland, but with just three years left to build the Casement Park stadium, the Executive have yet to invite tenders. In May last year, the Secretary of State was asked who would provide the money, and he replied:
“All partners. I guarantee it.”
Given that the clock is ticking, how and when does the right hon. Gentleman intend, with others, to honour that guarantee, so that the stadium gets built on time?
Chris Heaton-Harris
The right hon. Gentleman knows that he is asking that question of someone who has been a football referee for the last 43 years, and who is rather passionate about the game. I really want to see these Euro games played at Casement Park, and I have made that clear, but the latest costs that I have seen are significantly higher than the ones I saw a year ago, and any taxpayer contribution to the Casement Park project will need to be made on a value-for-money basis. I have also said many times that there is no blank cheque here, especially when there is no contractor appointed yet. We do not want to artificially inflate a price. The Northern Ireland Executive will also need to decide on whether and how they will underwrite any future increases in costs. As I said back then, all partners are working together to try to work out what the number is, and how we can deliver on it.
Hilary Benn
I am grateful to the Secretary of State for that reply.
One other challenge that the institutions face is dealing with the continuing legacy of the troubles. Seven days from now, all civil cases and inquests related to the troubles will come to an end under the Northern Ireland Troubles (Legacy and Reconciliation) Act 2023, which is widely opposed in Northern Ireland. Does the right hon. Gentleman think that confidence in the new independent commission will be helped or hindered by the fact that it has recently brought three separate legal challenges to the disclosure by coroners of information to families about what happened to their loved ones—information that they have been denied for so many years?
Chris Heaton-Harris
The right hon. Gentleman conflates two issues. First, there are the ongoing elements of how we deal with public interest immunity and the “neither confirm nor deny” policy in court cases in Northern Ireland, and indeed across the United Kingdom. Secondly, there is the question about the new commission we are setting up to deal with legacy. I believe that even those with civil cases will be able to use the Independent Commission for Reconciliation and Information Recovery in good faith when it opens its doors on 1 May.
Only this month, the former co-chair of the Consultative Group on the Past, Denis Bradley, said that he thinks the people involved with the ICRIR
“are very good people, I have a lot of regard for them… And if people decide it offers them something, well then, I will be very reluctant to make too many strong judgments around it. Because”—
this is the problem that the UK Government are trying to solve—
“we have created a swamp around legacy, a complete swamp. Anything that helps some people to get out of that swamp, I won’t be too critical.”
Richard Thomson (Gordon) (SNP)
I add my party’s tribute to Frank Field. We send our condolences to his friends and family. He was Birkenhead’s MP for 40 years, and he was a very faithful servant not only to his constituents but to this place.
The return of devolved government to Northern Ireland has been rightly welcomed across this House. Will the Secretary of State reaffirm his Government’s commitment to the principle of consent, not just in Northern Ireland but in Scotland and Wales? The peoples of those places should be able to choose the form of government best suited to their needs, whether that happens to be inside or outside the United Kingdom.
Chris Heaton-Harris
I welcome the hon. Gentleman’s welcoming of the restored institutions. I am also a great respecter of referendum results, and I believe we had one in Scotland. That is probably enough said.
Sarah Jones (Croydon Central) (Lab)
The Minister of State, Northern Ireland Office (Mr Steve Baker)
The Government remain committed to supporting integrated education in Northern Ireland and have already made funds available to support more schools than ever to convert to integrated status. I and my noble Friend Lord Caine look forward to engaging with the new Education Minister, Paul Givan, to make progress on this important issue.
Sarah Jones
I travelled with colleagues to Northern Ireland two weeks ago, and we visited Forge Integrated Primary School and met lots of very fine children. In 2015, £150 million of Fresh Start funding was earmarked for integrated education in Northern Ireland. What does the Minister say to those schools that were expecting this funding but have found that it is no longer guaranteed?
Mr Baker
The House may not know that only 7% of schoolchildren in Northern Ireland can be said to be attending an integrated school, which we would like to see change. The period over which Fresh Start funding was released would have ended at the end of March 2025, so we have repurposed £150 million of that funding to provide additional flexibility to the Northern Ireland Executive in respect of that funding stream and schools.
We are determined to see more parents given the opportunity to choose integrated education for their children as a vital part of the process of reconciliation. I, for one, am especially committed to it as someone who proudly attends a Baptist church, where for many years I worshipped with a Roman Catholic lady and had no idea. We should help Northern Ireland move to a point where denomination is a small matter and where people move forward together.
Theresa Villiers (Chipping Barnet) (Con)
An important item in the in-tray of the newly re-formed Executive is early years education and childcare. Thanks to the actions of this Government, we now have more generous entitlement to free childcare in England and Northern Ireland. Will he discuss with the Executive how Northern Ireland might be levelled up on childcare, including by using revenue-raising measures?
Mr Baker
My right hon. Friend is absolutely right to raise this issue and I am grateful to her for putting it on the agenda. Certainly we will engage with the Executive on this point. She is right to mention revenue raising. It is a fact that the Executive need to both transform public services and improve revenue raising, so that everything in Northern Ireland can be delivered on a sustainable basis.
Fleur Anderson (Putney) (Lab)
I also recently visited the Forge Integrated Primary School in Belfast. I saw their much-needed and developed plans to replace their portacabins with buildings, answering their need for extra capacity. The school is disappointed that the plans have been shelved, along with projects at nine other integrated schools. Education is devolved, but money had been earmarked for such projects by the UK Government under the 2015 “Fresh Start” agreement. Does the Secretary of State understand why teachers, pupils and parents are so disappointed that those plans have been shelved? Does he have any plans to restore them?
Mr Baker
I hear the hon. Lady. My right hon. Friend the Secretary of State and I understand people’s concerns and we too have visited schools; I certainly have and I think my right hon. Friend has too.
The Secretary of State for Northern Ireland (Chris Heaton-Harris)
indicated assent.
Mr Baker
I repeat that we have repurposed the money so that it can endure and be available to the Executive to be used for purposes as they decide. If we had not repurposed it, the money would have expired at the end of March next year. I am proud that we have taken the steps necessary, with the Treasury, to enable that money to continue to be available to the Executive. It is for them to decide how to spend it, but we continue to be fully committed to integrated education.
Claire Hanna (Belfast South) (SDLP)
The Secretary of State for Northern Ireland (Chris Heaton-Harris)
I met the First Minister and the Deputy First Minister last week. We had a constructive discussion about the Executive’s priorities.
Claire Hanna
The public’s relief at the restoration of the Assembly has given way to frustration at the lack of pace of delivery by the Executive. After a two-year void, they are saying they do not want to be hurried to deliver for the people of Northern Ireland. Pressed healthcare staff, people waiting for special educational needs services, and those watching Lough Neagh face another summer of algal blooms are very much in a hurry for action. Northern Ireland urgently needs a delivery plan, a programme for Government and a budget. Yes, resources are a part of that, so will the Minister update us on any negotiations on the fiscal framework? Will he impress on the Executive the need for urgent action, not just warm words?
Chris Heaton-Harris
One thing that I picked up from the First Minister and the Deputy First Minister last week is that they too want to act in all the ways the hon. Lady said. Their priorities include developing a programme for government that will enable them to take forward the vital work of public service transformation. They are only 12 weeks in, and I look forward to good results in the short, medium and long term.
Mr Speaker
Before we come to Prime Minister’s questions, I wish to welcome our special guest, who is observing our proceedings today, His Excellency Johari Abdul, Speaker of the House of Representatives of Malaysia. Your Excellency, you are most welcome.
Jonathan Gullis (Stoke-on-Trent North) (Con)
The Deputy Prime Minister (Oliver Dowden)
Mr Speaker, I have been asked to reply. I know that Members across the House will wish to join me in offering condolences to the family and friends of Lord Frank Field. He was an outstanding parliamentarian who worked tirelessly to make society a better place.
My right hon. Friend the Prime Minister is in Berlin. He has announced the biggest strengthening of our defence in a generation.
I am sure that Members will want to join me in wishing the Jewish community a happy Passover, a celebration of freedom. Of course, we remember the empty chairs of those hostages still being held captive in Gaza and call for their immediate release.
This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall have further such meetings later today.
Jonathan Gullis
I, too, wish to pass on my thoughts and prayers to Lord Field’s family, friends and colleagues and particularly to students and teachers at the Birches Head Academy in Stoke-on-Trent who are part of the Frank Field Education Trust.
Since being elected in 2019, I have: helped to reopen Tunstall Town Hall with a new library and family hub; secured funding for additional CCTV, new alley gates and better lighting in Tunstall to ensure that our streets are safe; and helped to breathe new life into Tunstall’s old library and baths, thanks to this Government’s levelling-up fund of £56 million to Stoke-on-Trent.
Sadly, Labour-led Stoke-on-Trent City Council seeks to undermine that progress by: introducing a brand new tax on residents to have their garden waste collected; refusing to take planning enforcement against rogue and absent landlords who plague Tunstall High Street; and increasing crime and antisocial behaviour by dumping undesirable people in the centre of Tunstall. Does the Deputy Prime Minister agree that Stoke-on-Trent Labour—[Interruption.]
Mr Speaker
Order. It is normally Mr Gullis who is loud. Please, let me hear him.
Jonathan Gullis
This just goes to show the disdain that the Labour party has for Stoke-on-Trent.
Does the Deputy Prime Minister agree that it is time for Stoke-on-Trent Labour to axe the garden tax, to take the fight to lousy landlords—
Mr Speaker
Order. There is a question to be asked and a time in which we ask it. I suggest that the hon. Member puts in for an Adjournment debate. I am sure that he has the answers.
The Deputy Prime Minister
Mr Speaker, there is not much that I can add to that. [Laughter.] The hon. Member has, as ever, proved what an excellent campaigner he is for his constituents. He highlights the same problems with Labour councils across the country, raising taxes and letting services fall into disrepair. Of course he is totally right to be holding rogue landlords to account.
Angela Rayner (Ashton-under-Lyne) (Lab)
First, may I share the Deputy Prime Minister’s comments regarding our Jewish community and wish them a happy Passover? I wish to acknowledge the loss of David Marquand and Baroness Massey, both of whom made historic contributions in Parliament, politics and wider life. I also send my condolences, following today’s news, to the family of Lord Frank Field, who was a good friend of mine and a colleague. He was a tireless campaigner against poverty and a champion for his constituents.
Mr Speaker, I know that the Conservative party is desperate to talk about my living arrangements, but the public wants to know what this Government will do about theirs. Natalie from Brighton has been served with two no-fault eviction notices in 18 months. She joins nearly a million families at risk of homelessness due to the Deputy Prime Minister’s failure to ban this cruel practice. Instead of obsessing over my house, when will he get a grip and show the same obsession with ending no-fault evictions?
The Deputy Prime Minister
To begin with, it is a pleasure to have another exchange with the right hon. Lady in this House—our fifth in 12 months. Any more of these and she will be claiming it as her principal residence.
On the issue of no-fault evictions, it may have escaped the right hon. Lady’s attention, but we will be voting on exactly that matter later today. This is the Conservative Government taking action.
Angela Rayner
The Deputy Prime Minister clearly thought that he could spend all week obsessing over my living arrangements and did not even bother to read up on his own Government’s Bill this afternoon. The reality is that he caved in to vested interest on his Back Benches and delayed justice for people like Natalie. This week, the Housing Minister said that there is no solid date for banning no-fault evictions. The Secretary of State for Levelling Up, Housing and Communities now says that it will not happen before an election. If the Deputy Prime Minister can give us a date, will he name it now?
The Deputy Prime Minister
I can name the date for the right hon. Lady: today. It is today that the House will vote on it, and I am confident that, in line with our manifesto, we will deliver on that commitment.
Angela Rayner
The Deputy Prime Minister clearly has not been looking up his own Government Bills. Let me turn to another Tory housing failure. Leaseholds are a rip off and a con, but the Government’s proposed ban on new leaseholds applies only to houses. The majority of leaseholds are in flats. What is the point of a ban on new leaseholds if it will not apply to flats?
The Deputy Prime Minister
Again, the right hon. Lady is talking about legislation introduced by this Government that the Labour party totally failed to introduce in its entire time in office. It is no surprise, because it is this Government who have brought social housing waiting lists down by nearly half a million, and delivered more affordable homes in the last 12 years than Labour delivered when it was in office. Of course, all this can only be paid for by ensuring that we have a strong economy. Her policy to repeal every single Conservative trade union law in the first 100 days would open the door to French-style wildcat strikes, sweeping away the reforms that made this country great. We all know, though, the one reform by Margaret Thatcher that the right hon. Lady would not abolish: the right to buy your council house.
Angela Rayner
I was expecting a little bit better from the Deputy Prime Minister. He seems to be a bit worn out. Maybe it is the 3 am calls from the “bad men” that have been keeping him up at night. He talks about strikes and the unions. We have had more strikes under this Government’s watch than at any time before. Once again, he has not read his own Bill. Their ban on leasehold will not apply to the majority of people. It is like banning non-doms but exempting Tory Prime Ministers. He speaks about affordable homes. Families are trapped in temporary accommodation and stuck on waiting lists, and in the west midlands the Conservative Mayor has used his multi-million pound housing budget to build just 46 social homes in eight years. That is almost as many as in the Chancellor’s property portfolio. The British people know that the Conservative party will not build the homes that this country needs, so when will they get a chance to vote for a Government who will?
The Deputy Prime Minister
I am surprised that the right hon. Lady raises the west midlands when Labour-controlled Birmingham has virtually bankrupted the council and is hiking up council tax by 21%, while in the meantime—I am sure that this would please her—continuing to hand out £1.8 million to the trade unions. By contrast, Andy Street, our brilliant Mayor of the wider west midlands, has delivered £6.1 billion of investment to improve transport. There you have it: the contrast between the Conservative party and the Labour party, and the usual political opportunism from her, failing to ask about the issues that really matter. If you want more bin collections, more potholes filled, lower debt and lower council tax, vote Conservative, because whether it is Ben Houchen in the Tees Valley or Andy Street in the west midlands, it is only the Conservative Mayors who deliver more for less.
Angela Rayner
It is pretty revealing that the Deputy Prime Minister thinks that housing is not an issue for the British people; I think it really is. People in glass houses should not throw stones, because in Birmingham and across the whole country, councils are facing black holes because of his Government’s austerity programme. I warn the Deputy Prime Minister that Tory councils have also faced section 114 notices, and Birmingham City Council has had over £1 billion taken from its budget—from some of the poorest people. More than 16,000 families face losing their home after the Tory party’s mini-Budget, and mortgage bills continue to soar. Meanwhile, the former Prime Minister, the right hon. Member for South West Norfolk (Elizabeth Truss), parades around the world in a twisted victory lap promoting her new book, saying that the mini-Budget was her proudest moment. Since she will not apologise to those families losing their home, will he?
The Deputy Prime Minister
What the Prime Minister has done since he has taken office, with the Chancellor, is to restore stability to our economy, with inflation halved and more, down to 3%. As a result of that, in an increasingly dangerous world, the Prime Minister was able to announce his plan for the biggest strengthening of defence spending in a generation. But it should come as no surprise that the Labour party refused to say whether it backs that, because this comes from the right hon. Lady who voted to scrap Trident and to install in Downing Street someone who wanted to change the Army into a peace corps. There you have it.
Angela Rayner
The right hon. Gentleman talks about defence. We all want to see 2.5%; the difference is that we have not cut the Army to its smallest size since Napoleon. Never mind some secretive deep state, it is the state of the Tory party that is the problem. The Tories are in a deep state of sewage. After 14 years they have failed renters, they have failed leaseholders and they have failed mortgage holders. I read with interest that the right hon. Gentleman has been urging his neighbour in No. 10 to call an election, because he is worried they might get wiped out. Has he finally realised that when he stabbed Boris Johnson in the back to get his mate into No. 10, he was ditching their biggest election winner for a pint-sized loser?
The Deputy Prime Minister
I think the whole House will have heard, despite all the bluster from the right hon. Lady, not a single word on whether she would actually back our plans to invest in our armed forces. No plans, in a dangerous world. Of course, as ever, the deputy Labour leader is always looking to attack others’ failures, but never one to take responsibility for her own. She once said, “You shouldn’t be waiting for the police to bang on your door. If you did it, then you shouldn’t be doing your job.” The right hon. landlady should forget her tax advice and follow her own advice.
Craig Whittaker (Calder Valley) (Con)
The Deputy Prime Minister
My right hon. Friend is right; it is not just in the Calder Valley, but in communities up and down the country. The Government are investing billions in infrastructure across the United Kingdom, creating jobs and opportunities in every region. I know that he has been a staunch advocate for the Calder Valley, which is a fantastic example of that in action.
Mhairi Black (Paisley and Renfrewshire South) (SNP)
I join in wishing the Jewish community a happy Passover and sending my condolences to the family and loved ones of Frank Field.
Two years ago, when mass graves were discovered in Ukraine, this House united in condemnation and rightly treated those graves as evidence of war crimes, which Russia must be made to answer for. Yesterday, Palestinian officials uncovered two mass graves outside the bombed hospitals in Gaza. Those graves also constitute a war crime, do they not?
The Deputy Prime Minister
Of course, we would expect the democratic Government of Israel to investigate any allegations of misconduct. That is exactly what they are doing, and it is exactly what the Foreign Secretary and the Prime Minister urge them to do. However, I find it quite extraordinary that the hon. Lady seeks to draw parallels between the legitimate war of self-defence of Israel and the conduct of Russia.
Mhairi Black
Three hundred bodies, including of the elderly and the injured, some of which had been stripped naked and mutilated, with their hands tied behind their backs. The UK’s own arms policy states that if there is even a risk that war crimes may be taking place, that is reason enough to halt the sale of arms. Given all that we know, why is the Prime Minister yet to do so?
The Deputy Prime Minister
We continue to urge the Israeli Government to investigate any allegations of misconduct. The difference though is that we can trust the Israeli Government—a democratically elected Government—to properly investigate those things. Of course, we keep the advice under review. The Foreign Secretary has recently made it clear that he has conducted a determination and has not changed his advice regarding export licences, and I think that is the correct decision.
Karl MᶜCartney (Lincoln) (Con)
The Deputy Prime Minister
I am afraid that what my hon. Friend has described is the Grinch in action. That Christmas market, in the home of Magna Carta, was beloved by local residents, but the council has totally ignored their wishes and cancelled it. It should reverse that decision.
Daisy Cooper (St Albans) (LD)
On behalf of the Liberal Democrats, I offer our condolences to the friends and family of the late Lord Frank Field, and wish a happy Passover to all those in the Jewish community.
Unpaid carers have shared heartbreaking stories of how they have been hounded by the Department for Work and Pensions and told to pay huge fines for minor infringements of carer’s allowance earning rules, all because the Government have failed to do anything about a problem that they have known about for years. Yesterday, one of the Prime Minister’s own dementia advisers resigned, saying that the Government’s treatment of those unpaid carers was “beyond the pale.” Will the Deputy Prime Minister apologise to all unpaid carers who have been failed by his Government, and will he commit to a full review of the system?
The Deputy Prime Minister
I pay tribute to all unpaid carers. Indeed, I met some of them over the weekend and know how hard they work. They keep our society functioning through their commitment to us. That is why we have uprated the benefits by £81.90 a week, and have increased the carer’s allowance by almost £1,500 since 2010. In respect of allegations of overpayment, of course appropriate discretion should be shown, but if there have been erroneous overpayments, it is right, on behalf of the taxpayer, to be able to recuperate them. However, we will work with anyone who is struggling with those repayments to negotiate sustainable and affordable repayment plans.
Virginia Crosbie (Ynys Môn) (Con)
The Deputy Prime Minister
I know and understand the frustration across Wales, particularly in my hon. Friend’s constituency, about this state of affairs. The Welsh Government have not prioritised building new roads. They are damaging growth potential in places such as Anglesey, and are spending £100 million on new politicians. We will work with her to ensure that we resolve the matter.
Sarah Jones (Croydon Central) (Lab)
The Deputy Prime Minister
I think the hon. Lady knows that she does not correctly represent the views of the candidate. I find it extraordinary that she has raised the issue of crime, because while Labour’s London Mayor has increased the precept by over 70%, recorded crime in London has increased by 20%. That is the record of the Labour London Mayor—no wonder people will be voting against him.
Mrs Sheryll Murray (South East Cornwall) (Con)
The Deputy Prime Minister
I know how important this matter is to my hon. Friend—I am sure she will be remembering her late husband Neil on that day. It is important that we all recognise the sacrifices made by fishermen and women to bring food to our tables, and I know that my colleague the Minister for Food, Farming and Fisheries, my right hon. Friend the Member for Sherwood (Sir Mark Spencer), will be visiting Grimsby on that day.
Matt Western (Warwick and Leamington) (Lab)
The Deputy Prime Minister
The hon. Gentleman talks about Teesside taxpayers, but Ben Houchen has never imposed a mayoral precept in Tees Valley, full stop. At the same time, he has saved Teesside airport and secured a new freeport for Teesside—no wonder people will be voting for him again.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
Has my right hon. Friend seen the video that is doing the rounds of the theft in a shop in my constituency, Boots the chemist on Station Road? In the space of eight minutes, two threatening individuals robbed thousands of pounds out of that shop, and they are not alone: it is happening again and again. In fact, one of my team went out and photographed them leaving brazenly, not caring, and even spitting at the police. Will my right hon. Friend please now say to the Home Secretary, and through him to the police, that this is not a petty crime? This is a threat of violence and massive robbery, and it should be a priority for the police. We always talk about more police; surely what we should be asking for is more effective policing that gets those criminals off the streets.
The Deputy Prime Minister
My right hon. Friend is absolutely right to highlight this issue: often, the allegedly lower-level crimes are the ones that have the biggest impact on communities. I know that my right hon. Friend the Home Secretary has been very clear on that point, and I will make it to him again. That is also why we are rolling out a range of crime prevention measures through the safer streets fund; it is why we are improving CCTV and street lighting; and it is why we introduced the Police, Crime, Sentencing and Courts Act 2022 to give the police greater powers to deliver tougher sentences for more serious offenders.
Jeff Smith (Manchester, Withington) (Lab)
The Deputy Prime Minister
Labour Members might want to forget it, but I remember the day the Conservatives came into office in 2010. What was the note left on the desk of the Chief Secretary to the Treasury? “There is no money left.” That is the challenge that we have addressed through the Prime Minister and Chancellor successively.
Wendy Morton (Aldridge-Brownhills) (Con)
Labour’s mayoral candidate in the West Midlands talks about housing, but makes no commitment to protect our precious green belt. He talks about transport, but he fails to commit to reopening Aldridge train station. He committed to saving police stations such as Aldridge; then, when the Labour police and crime commissioner said he would close them, he changed his mind and agreed to that. So we are left wondering in my constituency what he stands for. Does my right hon. Friend agree with me that only Mayor Andy Street has a plan and a track record to be trusted to deliver for the West Midlands?
The Deputy Prime Minister
As ever, my right hon. Friend is absolutely correct to highlight the record of Labour’s police and crime commissioner, and West Midlands police has actually been put in special measures on Simon Foster’s watch. When it comes to the green belt, we have all seen the new wheeze from the Labour party—redesignate green belt “grey belt” and concrete all over it. Well, the Conservatives will not allow that to happen, and people up and down the country will vote Conservative to stop that happening.
Barbara Keeley (Worsley and Eccles South) (Lab)
The Deputy Prime Minister
Labour Members like to pretend the pandemic did not happen, and they like—[Interruption.] That is the cause of the biggest pressure on the NHS. They complain about NHS performance while backing strikes by doctors, who unreasonably want a 35% pay rise. Despite all of those pressures, actually A&E performance has improved in the past month.
Sally-Ann Hart (Hastings and Rye) (Con)
The Labour leader of the almost bankrupt Hastings Borough Council and several other Labour councillors resigned from the Labour party citing that the national Labour party has become overly authoritarian, in a “dereliction of local democracy”, and has “lost its moral compass” and is suffocating local voices because its only objective is power for power’s sake. Would the Deputy Prime Minister agree that voting for Conservative candidates in upcoming elections will ensure local voters are heard, local democracy is upheld and better services are delivered?
The Deputy Prime Minister
My hon. Friend is absolutely right to highlight the really serious concerns about Labour councillors in Hastings. One former Labour councillor said that Labour are no longer providing
“the policies, the support, or the focus on local government”.
I could not have put it better myself.
Mary Glindon (North Tyneside) (Lab)
The Deputy Prime Minister
The Government will engage with any proposals that have been brought forward, as we always do, but it is actually the case that we have already provided over £700 million in energy cost relief to the steel sector in the past 10 years. It is also the case that, even in the past year, the Government spent £97 million more on UK-made steel for major public projects. So we are continuing to work with the steel industry, but we have already provided tremendous support.
Mr John Baron (Basildon and Billericay) (Con)
I very much associate myself with the remarks of my right hon. Friend regarding Lord Frank Field, who was a good man.
I very much welcome the Government’s firm commitment to increase defence spending to 2.5% by 2030. It is something that will send the right message to our allies and potential adversaries alike, and it is something on which the 1922 defence committee has been campaigning for a little while. However, would my right hon. Friend do what he can to ensure that some of that increased money is spent on additional recruitment—including, if necessary, increasing wages sufficiently—to ensure that the Navy can manage ships, the Air Force can maintain its aircraft and the Army can dominate ground?
The Deputy Prime Minister
I know what a staunch advocate my hon. Friend is for the armed forces and for funding the armed forces. All of us can take great pride that we are putting the resources in to meet the challenges that the nation is likely to face over the next five years. We will be working through the allocation of that, but it is already the case that in January we had the largest ever number of applications in recent years to join the armed forces, so we are making progress on that.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
The Deputy Prime Minister
It is this Government who have uprated benefits for carers, with almost £1,500 more. I think it is the case that the hon. Lady’s constituents, my constituents and people up and down the country would expect the Government to seek to recover overpaid sums. We need to do that in a compassionate way, and if people are struggling to make repayments, the DWP will engage to ensure that they have a sustainable and affordable way to make those repayments.
Mr Robin Walker (Worcester) (Con)
May I associate myself with the tributes and condolences paid to the late great Frank Field? One of his lasting achievements in the world of education is the holiday activities and food fund, which this Government can take great pride in having funded. May I urge my right hon. Friend to use his good offices across Government to ensure that we secure a multi-year settlement for the continuance of that vital work?
The Deputy Prime Minister
I know what an important piece of work this is, and I know my hon. Friend’s commitment to campaigning for it. We have already provided substantial sums, and I am sure we will continue to do so.
Chris Stephens (Glasgow South West) (SNP)
The Deputy Prime Minister
I join the hon. Gentleman in paying tribute to Lord Frank Field’s campaigning. It is the case that over the past couple of years, we have provided more than £108 billion-worth of support with the cost of living, including extra cost of living payments of £900 last year. The effect of all that is that 1.1 million fewer people are living in absolute poverty than when the Conservatives came to office.
Dr Luke Evans (Bosworth) (Con)
Last week we had the Finance Bill, and in it I noticed a reduction in capital gains tax from 28% to 24% on residential properties to try to turbo-boost the residential market. Will that apply retrospectively, so that hypothetically, if a Labour Front Bencher owed capital gains tax, they would benefit from this Conservative tax cut?
The Deputy Prime Minister
I have always believed in having lower taxes that everyone pays.
Kate Osborne (Jarrow) (Lab)
The Deputy Prime Minister
I would dispute the hon. Lady’s characterisation of the Government’s record in this area: it was this Government who introduced marriage for same-sex couples and passed the Turing law. She raised an important point that I am happy to take up the Health Secretary, but the overall record of this Government is an excellent one.
Defence Spending
(7 months ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Secretary of State for Defence (Grant Shapps)
With permission, Mr Speaker, I shall make a statement updating the House on the Government’s commitment to increase defence spending to 2.5% this decade.
In my speech at Lancaster House in January, I warned that we were entering a much more dangerous period in the world and I made the case for a national conversation about defence spending. Since then, Putin has stepped up his attacks on Ukraine, China is increasingly assertive, and tensions have escalated in the middle east culminating in Iran’s unprecedented attack on Israel 10 days ago conducted in parallel with the proxies Iran has nourished around Israel’s border in the middle east, including of course the Houthis who continue to hold global trade hostage in the Red sea.
Since January, the world has become even more dangerous, not less, and we continue to ask more of our courageous and professional armed forces. Our sailors have served under constant risk of attack in the Red sea, helping to protect international shipping and our own cost of living. We have bolstered our Royal Air Force presence in the middle east, enabling Typhoon crews to intercept Iranian drones and missiles recently fired towards Israel. And around 20,000 of our personnel from all three of our services, with a huge inventory of naval, air, and land assets, have been active around Europe as part of the largest NATO training exercise since the cold war. In short, we increasingly need our armed forces, and we increasingly are asking more of them.
So yesterday the Prime Minister committed to hit spending 2.5% of GDP for defence by 2030. It means we will invest an additional £75 billion into defence over the next six years, and that will be funded in full without any increases in either borrowing or debt. This represents the biggest strengthening of our national defence in a generation and, as the NATO Secretary-General said yesterday, it will ensure the UK remains by far the largest European defence spender in NATO, and it means we are the second biggest NATO spender overall.
It will provide a very significant boost for UK defence science, innovation and manufacturing. It will make our defence industries more resilient and bigger. And it will mean we are able to restock some of the global supplies required in order to continue to ensure that we are both able to provide our own armed forces and those in Ukraine and be a competitive export sector. We also recognise the important role defence plays in our national resilience by developing a new plan that for the first time brings together the civil and military planning for how we would respond to the most severe risks that our country faces.
Our additional £75 billion on defence is also enabling us to ramp up that support for Ukraine. Members on both sides of the House will share the Government’s concern about the warnings President Zelensky has been issuing, and his most senior generals have confirmed that their the ability to match Russian force is increasingly difficult. So, as NATO partners, we are looking at each other to see that leadership.
The UK Government have stepped forward: we are providing the alliance with the decisive leadership demanded in this knife-edge moment of this existential war. This week we have committed an extra £500 million of military aid to Ukraine for this year, bringing our total package to £3 billion. In fact, our total since Putin’s full-scale invasion is now more than £12.5 billion, £7.5 billion of which is in military aid.
In addition, we have provided NATO partners with leadership by delving even deeper into our own military inventory, to give Ukraine our largest package of equipment and support to date. The support announced this week includes: millions of rounds of ammunition; 1,600 key munitions, including air defence and precision long-range missiles; over 400 armoured, protected and all-terrain vehicles; support with logistics to support and bolster the frontlines; support to get the F-16 pilots who have trained in the UK into the air as soon as possible; and a further 60 boats to help Ukraine strengthen its remarkable grip over the Black sea, including offshore raiding craft and dive boats.
Our £75 billion defence investment will help Ukraine get back on to the front foot. Coupled with the reforms that we have introduced to make procurement faster and more effective, it will put our defence industrial base on a war footing. It will fire up the UK’s defence industry with an additional £10 billion over the next decade for munitions production. That will bring our total spend on munitions to about £25 billion over the same period.
We are delivering for those who serve to guarantee our freedoms as well, with over £4 billion to be invested in upgrading accommodation to build new living quarters for our personnel over the next decade. We are also working seamlessly with key allies to strengthen our collective deterrence and develop new, innovative capabilities. Just last month, I was in Australia with our Australian and US partners to advance our AUKUS programme, which will develop and deliver a range of cutting-edge kit in addition to the next generation of nuclear-powered submarines. At the end of last year, I was in Japan to advance our global combat air programme, which is the development of the sixth-generation fighter jet with Italy and Japan.
Just last week I was in Telford to see the first fully British tank for 22 years coming off the production line. That is just one strand of our Future Soldier programme to make our Army more integrated and much more lethal. Of course, defence already supports hundreds of thousands of jobs, with real quality to them, in the UK, including over 200,000 directly in the industry. Our additional £75 billion will open up many more opportunities in regions up and down the country.
This is a turning point in UK defence. We must spend more because defence of the realm is the first duty of every Government. We on the Government side of the House recognise that fact. But while I want to see peace and international order being restored, I am also absolutely convinced that it is hopeful thinking—even complacency—to imagine that we can do that without ensuring that we are better protected. The best way of keeping a country safe and protecting our way of life is deterrence: being prepared; being clear-eyed about the threats we face; being clear about our capabilities; backing UK defence science, technology and innovation; carrying not just a big stick, but the most advanced and capable stick that we can possibly develop, and yes, using our military muscle alongside our allies.
Our investment in our continuous at-sea nuclear deterrent makes would-be adversaries think twice. We on the Government side of the House have not come to the conclusion that our nation’s nuclear deterrent is there because an election is approaching; we have always believed in our nuclear deterrent.
This is an additional £75 billion boost for our forces. In the build-up to the NATO summit in Washington, I will do all I can to get alliance members to follow our lead and bolster their armed forces, strengthen their industrial base, invest in innovation, maximise their military deterrence and, most importantly of all, maximise their support for Ukraine. In a more dangerous world, where we face an axis of authoritarian states, 2.5% must become the new baseline for the entire alliance. If we are to deter, lead and defend, that is what is required of us. I commend this statement to the House.
John Healey (Wentworth and Dearne) (Lab)
I thank the Secretary of State for the advance copy of his statement. There is much to welcome in it and more widely today, with the US Congress finally passing the Bill for more military aid to Ukraine and the Prime Minister finally making a multi-year commitment to UK military aid beyond this year.
We face a much more dangerous world. British forces are in action, defending international shipping in the Red sea, reinforcing NATO allies on the Russian border and protecting us all 24/7. They are respected worldwide for their total professionalism. They require our support from all sides of this House. We welcome the new commitments on funding for Ukraine and to build up stockpiles, to boost defence exports, to prioritise domestic defence production and to set up new strategic headquarters in the MOD—all plans I have argued for in this post.
The Secretary of State is right to say that the first duty of any Government is to defend the country and keep its citizens safe. Labour will always do what is required and spend what is required on defence. The last time the UK did spent 2.5% of GDP on defence was in 2010, under Labour—never matched in any one of the 14 Tory years since. Two weeks ago, the Labour leader said that we want a fully funded plan for 2.5% of GDP on defence.
We share the same ambition as the Government because we must do more to deal with the growing threats. We want it to be fully costed and fully funded, and set out in the Government’s baseline budgets. This 2030 target is not; it is in a press release. Why was the 2030 plan not in last month’s Budget, or any of the other five Budgets and autumn statements since the Government first promised to spend 2.5% by 2030, two years ago? None hit 2.5%; none reversed the real cuts in day-to-day defence spending; none matched Labour’s record in Government. If this 2030 plan had been in a Budget, it would have been independently checked, openly costed and fully funded. Where is the additional money coming from? How much is coming from which other research and development budgets? How much is coming from cutting how many civil servants, and in which Departments?
The Government have tried this trick before, in the 2015 defence review. Ministers pledged to cut 30% of MOD civil servants in order to make their defence spending plans add up. Civil servant numbers did not go down—instead of going down to 41,000, they went up to 63,000. The Secretary of State mentioned an additional £75 billion five times in his statement. Over the next six years, the Government’s official spending plans are based on 0.5% real annual growth in core defence spending. Why has he invented his own zero-growth baseline to produce this fake figure, claiming an extra £75 billion for defence? The public will judge Ministers by what they do, not what they say. Over 14 years, they have hollowed out our armed forces; they have cut the Army to its smallest size since Napoleon; they have missed their own recruitment targets each and every year; they have allowed morale to fall to record lows; and they have wasted at least £15 billion on mismanaging defence procurement.
Everyone recognises that defence spending must rise to deal with increasing threats. The Opposition have no access to classified threat assessments or military advice, so if we are elected to government we will conduct a strategic defence review within our first year to get to grips with the threats we face, the capabilities we need, the state of the armed forces and the resources available when we get to open the books. That is how Labour will manage the requirements for strong national security and the responsibility for sound public finances.
The Defence Secretary clearly likes Labour’s plans for defence, because so much of them are now Government policy. But there is still no Tory plan to reinforce homeland protections with a new strategic review; to fulfil NATO obligations in full, with a NATO test on our major programmes; to renew the nation’s contract with those who serve with an independent forces commissioner; and to make allies our strategic strength with a new EU, French or German defence agreement. With threats increasing and tensions growing, we must make Britain better defended. With Labour, Britain will be better defended.
Grant Shapps
Let me start on the areas that I agree with. The right hon. Gentleman mentioned how much we welcome the US Congress putting $60 billion into the defence of Ukraine. We warmly welcome that. As Churchill was reputed to have said, America usually gets on and does the right thing when it has exhausted all other alternatives. It took a long time, but we have got to the point where that money will go to Ukraine. That is very welcome across the House.
The right hon. Gentleman says that he welcomes today’s announcement, but then spends all his time explaining—or rather, avoiding explaining—why Labour is not backing 2.5%, which has a schedule, a timescale and figures that have been published and are in the document produced yesterday and laid in the Library. He says, “Judge us by our action, not our words.” We will, because 11 Members of the Opposition Front-Bench team voted against Trident. It is no good for him and the Leader of the Opposition to go up to Barrow and to claim that they are all in favour of the nuclear defence, because they stood on a platform with a leader who wanted to scrap Trident, pull us out of NATO, and turn the army into a peace corps.
The Opposition tell us, “Judge us on our actions.” Where is the shadow Foreign Secretary, who voted against Trident? Where is the shadow Deputy Prime Minister and the shadow Communities Secretary, who voted against Trident? Neither is there on the Front Bench. Presumably neither is in full agreement with the right hon. Gentleman. When it comes to the defence of the realm and defending this country, the Conservative party has always believed in our nuclear deterrent. We are upgrading it and making sure it is fit for purpose. Neither supports the 2.5%, as the House will have noted.
It is fine for the right hon. Gentleman to come to the Dispatch Box and talk about yet another review. If the problem were having defence reviews, there would be no issues at all. The last thing this country and armed forces require is yet another review—delay, disruption and obfuscation.
Sir Jeremy Quin (Horsham) (Con)
My right hon. Friend is right to say that we are continually asking more of our armed forces, as the Defence Committee’s recent report made clear. In that context, I greatly welcome the announcement and the increased investment. We want it to unleash a triple whammy in which our industrial partners also seize the opportunity to invest heavily in capital equipment and R&D, and in which our NATO allies see this as a new benchmark to which those who do not already can aspire and meet. What are we doing to ensure that we not only make the investment but achieve that triple whammy?
Grant Shapps
My right hon. Friend the Chair of the Defence Committee is absolutely right on the investment point. I spoke to my opposite number, US Defence Secretary Lloyd Austin, yesterday evening about how it will help to galvanise NATO in particular to make greater investment. When we go to the NATO summit in Washington for the 75th anniversary, the new baseline will be 2.5%, rather than the 2% one set by the UK in 2014, which 18 or so of NATO’s 32 members have now reached. That investment sends a very important signal to the whole defence industrial base. That is why it is critical to set out the plan and stick to it, and agree to reach 2.5% by 2030.
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
The Secretary of State clearly has a herculean task to find £75 billion, so let us seek clarity on where it may be found. I welcome the investment if it is in capability. I agree with the shadow Secretary of State on why it was not in the Budget. I think we all know why: it does not stand up to scrutiny. Let me also welcome the Secretary of State’s investment in Ukraine, on the back of the US commitment. I have to say to our US colleagues that it was long overdue. Let me ask some specific questions. It is the duty of Opposition to challenge Government, and we will have our differences.
With no increase in borrowing or debt, the implication is that there will be deeper cuts to other public services. If the Government have assumed a baseline with spend frozen in cash terms as of GDP, as I think was alluded to by the shadow Defence Secretary, it comes nowhere near £75 billion. As I come from a services family, I wonder if the Secretary of State will commit to a direct increase in spend on accommodation, training and recruitment as part of this proposal, given that we are at a near Napoleonic decline on the frontline and have pushed members of the armed forces into food banks and near penury?
The Secretary of State and I will, of course, disagree on the nuclear deterrent, but I wonder if he will answer one specific point while he retains it. The nuclear enterprise has been exposed as unaffordable in the latest report by the National Audit Office. What assurances can he give the House that the nuclear deterrent will not continue to cannibalise the Ministry of Defence budget and, specifically, the £75 billion he has proposed today?
Grant Shapps
The first thing I should point out is that page 20 in the annex of the document before the House describes the uplift in the defence budget. We have headlined it as £75 billion. In fact, when we go through and add up the individual amounts year on year, it reaches £77 billion of expenditure. Members can see there exactly how we will get to it.
Secondly, it is fully funded. I know the Labour party does not like the idea, but we will remove 72,000 civil servants from the system, not because we do not think they are good people—fortunately, with low unemployment we know they will be gainfully employed elsewhere—but because we want to get back to the size of the civil service we had before covid, before it expanded greatly. We see no reason to continue to run a civil service with 70,000 additional people each year, when that money could go into the defence of the realm.
The hon. Gentleman asks about our commitment to our armed forces personnel, their families and their accommodation. He may have missed it in my statement, but I mentioned £4 billion that we will now invest in their accommodation and conditions over this period, thanks to this big uplift. He will be aware that last year there were a lot of problems with leaks and boilers not being fixed for considerable periods of time. There have not been those stories this year, because we got on top of that with £400 million and by making sure that contractors are doing their job.
As the hon. Gentleman rightly says, we have our differences on things like nuclear deterrence, but if there is one thing that benefits Scotland in particular, I would suggest it is what goes on at Faslane, with the extraordinary high-quality jobs it produces and the proud part it plays in this nation’s defence.
Sir Julian Lewis (New Forest East) (Con)
The main reason why this welcome uplift has come when it has is Russia’s aggression against Ukraine. Does the Secretary of State agree that if Russia and Putin are seen to fail in Ukraine, the threat to NATO will be put back for at least a generation? Conversely, if they succeed, the threat to NATO will intensify. Will he therefore do everything he can to persuade our allies, especially certain parts of the United States’ new political establishment, that the success of Ukraine is essential for the peace of Europe and, indeed, the peace of the world?
Grant Shapps
My right hon. Friend is absolutely right. Although this is £75 billion and although it takes our budget to 2.5% of GDP, that is a fraction—a fraction—of what it would cost if Putin were successful in Ukraine. There is no chance he would stop there—none. Other autocrats elsewhere would look at that and exploit the idea that all they have to do is outwait the west and we will get bored of it—through some form of attention deficit—and give up defending the things we said we would never stop defending. That, in the end, would cost us all a huge amount more.
Mr Kevan Jones (North Durham) (Lab)
May I first of all congratulate the Secretary of State on his stellar used-car salesman act, which we have become used to? On 26 March, he appeared, along with officials, before the Defence Committee. His strategic finance director confirmed that next year, when we take Ukraine funding out of the budget, the defence budget falls. Can he tell the House how he reconciles that fact, which was confirmed by his own officials, with his claim today and the Prime Minister’s yesterday to be putting the country on a war footing?
Grant Shapps
I am really sorry that the right hon. Gentleman cheapens what is a very important discussion about the defence of the realm with such a ridiculous remark. We should all come here in the right spirit to discuss these important issues, given the subject matter. He asks about Ukraine. Ukraine is a part of what our armed forces and this country are having to deal with. We do not ask America to strip out its help to Ukraine, in the same way that we did not ask it to strip out its help to Afghanistan or Iraq, because it is part of the core defence budget. Yesterday—I did not mention this in my statement, and perhaps on this basis the right hon. Gentleman may be forgiven—we also said that our enhanced amount of money for Ukraine is not now just for this year, but we are going to carry on doing it every single year into the future. So, yes, it is part of our core expense.
Mr Mark Francois (Rayleigh and Wickford) (Con)
I commend the Secretary of State for obtaining this massive £75 billion increase in defence, which theoretically would allow us to buy 20 new Queen Elizabeth class aircraft carriers. At the risk of upsetting our excellent First Sea Lord, we are not likely to do that, but we are putting our defence industry on a war footing. Can we do the concomitant thing and create a war reserve of equipment with older Typhoons, older warships and older armoured vehicles, so that if we had to fight at short notice we would have enough equipment to do it and so that we can tell our adversaries that when we say, “Si vis pacem, para bellum,” we actually mean it?
Grant Shapps
I thank my right hon. Friend not just for his words, but for his constant campaigning on this subject. Those of us who have been subject to him in a Select Committee know that he knows his facts, knows what he is talking about and has done as much as anybody to ensure that this uplift is happening. I can confirm for the House that we will not be using the £75 billion for 20 new aircraft carriers.
My right hon. Friend makes an interesting point about what we could do with older equipment. I have to say to him that right now, I am much more minded to send that equipment to Ukraine. That is why, yesterday, I pulled together the biggest donation package to date, in what is now the third year of the war, of equipment to Ukraine. For the time being, I think we will be sending it in an easterly direction.
Derek Twigg (Halton) (Lab)
Can I ask the Secretary of State what he believes a war footing is?
Grant Shapps
Very simply, Ukraine has taught the world a great deal about this. When it comes to, for instance, producing sufficient munitions to restock the Ukrainians’ supply, it is very difficult—in fact, impossible—to do that instantaneously. When there is global competition for 155s or other missiles, we want to ensure that our own industrial defence estate is able to produce such items by telling those in the industry that they are on a war footing. By putting in £75 billion more and, critically, naming the date by which we will get there, we will put them on that war footing.
Richard Drax (South Dorset) (Con)
I commend my right hon. Friend for his stalwart stubbornness in securing this important increase in defence spending. He and I both know that much more money is needed, but this is a step in the right direction. He is off shortly to meet NATO members, and I fear that he will have a great deal of work to do. For example, only two NATO members are prepared to open fire on the Houthis in the strait of Hormuz, one of the major trade routes for NATO and the west. Does my right hon. Friend feel that there will be a lot of work for him to do when he goes to meet those NATO members and asks them to step up and spend 2.5% on defence, as they should do and as we are going to do?
Grant Shapps
I thank my hon. and gallant Friend for his comments. He is right to point out the need to be prepared to use the abilities that we have. Ours is one of the only countries with both the global reach and the desire and preparedness to use those abilities, which is why we have ended up defending ships in the Red sea from the Houthis. I can report that a specific incident along those lines has taken place today, with our armed forces in action, and we can be very proud of everything they do for us.
Richard Foord (Tiverton and Honiton) (LD)
On behalf of the Liberal Democrats, I welcome the right hon. Gentleman’s statement about increased defence spending, although it relates to a time six years hence rather than being specific about funding in the intervening years. Eighteen of the 32 members of NATO are still not spending even 2% of GDP on defence, including France, Spain and Italy. Encouraging them to spend more is not so much about fairness as about persuading sceptics in the United States that North America should remain engaged in Europe. Leverage at the NATO summit in July will come too late. What additional commitments did the Secretary of State and other Ministers obtain from our allies before announcing the 2030 pledge?
Grant Shapps
First, I assure the hon. Gentleman that it starts this year—the half a billion pounds is in this year’s budget. We have opted to give that money directly to Ukraine, in addition to the money that we are already gifting it, bringing the total to £3 billion.
Secondly, let me gently say that I do not think I have ever heard Liberal Democrats argue for more defence spending, but I strongly welcome the hon. Gentleman to the cause. I agree with him entirely that 2%—which we ourselves set back in 2014—is no longer the baseline that we should be working to, but I gently point out to him that the reason it has taken some time to replace Trident, and in particular the submarines, is that there was a short period under the coalition when we could not get our Liberal Democrat partners to agree to get on with the job.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
May I, in passing, pay tribute to the late Frank Field? He voted for the renewal of Trident, unlike many on the Labour Front Bench, and he would have understood that deepening our defence capability in the conventional forces is a vital part of the deterrence that NATO provides for the security of Europe. I commend my right hon. Friend and the Government for leading the way on this, and setting an example through leadership.
Grant Shapps
I thank my hon. Friend and add my condolences to those already conveyed by others. Frank Field was a great statesman with really innovative ideas about welfare reform, which it took this Government to enact, and he is a great loss to us all.
I entirely agree with my hon. Friend about our leadership in NATO in getting to 2.5%. I was talking about that to the Secretary-General of NATO yesterday. We must ensure that 2.5% is the new level at which people operate. If they did—if everyone joined us at 2.5%—there would be £135 billion per annum more in the collective NATO budget, which would make a huge difference.
Dame Nia Griffith (Llanelli) (Lab)
Labour is absolutely committed to reaching 2.5%, and we welcome the additional £500 million for Ukraine, but time is of the essence. What is the Secretary of State doing to speed up the delivery of much-needed military supplies to the frontline in Ukraine?
Grant Shapps
I warmly welcome the hon. Lady’s comments, and I hope very much that those on her Front Bench, who have not attached themselves to the timeline that she urges, have listened closely to what she has said. As for the delivery of items to the frontline, we will be very fast; we will deliver in a matter of days or weeks quite a lot of the items outlined in the very extensive package announced yesterday, although they come in a number of different forms and some, by their physical nature, will take longer to deliver than others.
David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)
I welcome the announcement, and indeed the decision that has finally been made in the United States. Can my right hon. Friend confirm that investment will go into not just technology, but the logistic, the warehousing and the background facilities here in the UK—such as those at MOD Longtown, a very important employer for my constituency—to ensure that our frontline forces are supplied with the best kit that they could possibly have?
Grant Shapps
My right hon. Friend can certainly have that reassurance. We know that such support is extraordinarily important to the running of truly lethal and effective armed forces.
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
In every year since 2010, the Government—along with their Liberal Democrat partners—have missed recruitment targets, and The Times has warned that Army numbers could fall to 70,000 full-time equivalents. What is the Defence Secretary doing to ensure that those who wish to serve and defend our country are not put off by the broken recruitment system?
Grant Shapps
The hon. Lady will be pleased to hear that in January and February we had an eight-year high in the number of applications for the Army, which was reflected in the other services. I agree that we need to be much more effective in getting applications all the way through the system. It takes too long, and the procedures are too disparate. People are having to turn up for an initial interview, go away and then come back for a medical. Why not do all those things at once?
However, other measures are really helping. There has been a pay increase of nearly 10% for the less well-paid members of the armed forces in the last year, which has helped with recruitment, and people seeing our armed forces involved in so much action has also helped. The Minister for Defence People and Families is spending a great deal of time ensuring that the many recommendations—67, I think—in the Haythornthwaite review are implemented as quickly as possible.
Mr Tobias Ellwood (Bournemouth East) (Con)
I join the many voices that have called for some time for an increase in defence spending, and we welcome this announcement. I suspect that, privately, the Defence Secretary was hoping that this day would come as well, and I congratulate him on the work that he has done behind the scenes to ensure that this funding is secured.
State-on-state conflict has returned in Europe, and the world is more dangerous, more contested and more polarised. Will the Defence Secretary therefore expand a little on the consequences to UK security and to the UK economy if Russia wins? Before rushing in to spend these increased funds, will he recognise the need to consider the full spectrum of threats and warfare that we face, so that money is wisely spent?
Grant Shapps
My right hon. and gallant Friend has been a very important part of ensuring that we got to where we are today, but I had not realised that I had been keeping my own desire to reach this point quite so secret. He is correct in saying that the implications of Russia’s winning this war would be horrendous. The cost of what this country had to put up with because of covid, for example, would seem small in comparison with the cost of what could happen if other autocratic states decided to take a chunk of other people’s land; that could have a direct impact on our economy.
This is not, in my view, money that we are spending; it is money that we are investing in our security, to ensure that Russia and other despotic leaders like Putin never think that they can try it on with us. We will be investing it extremely wisely in many programmes with which my right hon. Friend and other Members on both sides of the House are familiar, as well as in innovative new areas such as the DragonFire.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
May I thank the Secretary of State for the urgent support for Ukraine, which is much needed just now? However, the Institute for Fiscal Studies pointed out that in the Chancellor’s Budget, there was a conspiracy of silence between the Government and the Labour party on following the fiscal rules when it came to saying where £20 billion-worth of cuts to public services would come from. Today’s announcement adds up to another £9 billion of cuts to public services. Can he explain where those cuts will be made?
Grant Shapps
We have already laid out the fact that this plan is fully costed and funded. As I have mentioned to the House, we have said that we will reduce the size of the civil service by 72,000. That is not a one-off cut; it is money that is not being paid each year, and will help to fund defence. There are also some other things that the Chancellor will no doubt wish to get into. I do not know whether the hon. Gentleman has taken a look at page 20 and the annexe, but he will see that this is all set out.
Sir Alec Shelbrooke (Elmet and Rothwell) (Con)
I absolutely welcome this very important investment in defence. As my right hon. Friend says, the world is a changed place, and I am sure that he would agree that defence is indeed a public service. On the extra funding and the projects that he has announced, may I ask him to make sure that he says to the Treasury that the programmes should be fully funded? This should not just be capital investment. The Treasury has a habit of saying, “The capital investment is fine, but let’s not worry about revenue.” The projects will need revenue, so will he make sure to have those conversations with the Treasury?
Grant Shapps
My right hon. Friend makes a very clear point, based on his experience of the Department. We have to make sure not just that we fund the capital, but that we have the resource to run the equipment. He raises a very important matter, and this budget enables us to ensure that this is done properly.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
I, too, welcome the increase to 2.5%. The world has definitely become a more dangerous place over the last 14 years. I can only suppose that the announcement was not made in last month’s Budget because it would have come under scrutiny from the Office for Budget Responsibility, but could the Defence Secretary say exactly what proportion of the 2.5% will be spent on cyber-security and armed services personnel?
Grant Shapps
I should point out to the House that we have always said that we would do this when conditions allowed. Inflation fell to 3.2% last week—down from over 11%. Ten days ago, we saw Iran fire hundreds of missiles at a democratic state, and we were partly involved in the collective defence. It is therefore true to say that the world is showing itself to be even more dangerous. We have reached the point where we are seeing growth back in the economy and inflation falling, so now is the right time to do this. The hon. Lady asks about the sums of money that will go into, for example, cyber or space. I do not have those figures on me. I would be very happy to write to her with an overview, because it will take a bit of collation to work that out exactly from the existing budget. Quite a lot of what happens in strategic command, which covers those areas, crosses over into other parts of the armed forces, so it is not a simple question to answer.
Mrs Flick Drummond (Meon Valley) (Con)
This is a very welcome statement, so I thank my right hon. Friend. He mentioned the Haythornthwaite report. When will we get an update, particularly on the plan to spend the £4 million investment in service families accommodation?
Stephen Farry (North Down) (Alliance)
I accept the need for additional defence spending, but may I ask the Defence Secretary for reassurance that the Government’s strategy for UK and global security going forward will have an appropriate balance of hard and soft power? By that I mean ongoing investment in diplomacy, humanitarian assistance, international development—potentially including the restoration of the target of spending 0.7% of gross national income—and, indeed, support for the international rules-based order.
Grant Shapps
I can certainly reassure the hon. Gentleman that that is something that we in the MOD are always looking to do. We have just made our seventh or eighth drop of food aid into Gaza, using the RAF. We are working with the Americans on other solutions, including the pier, and I work very closely with the Foreign, Commonwealth and Development Office. Indeed, I used to be a Minister in the former Department for International Development, so I am well aware of the issues he raises. The MOD will always look to assist, with our armed forces, wherever we can; we often combine hard and soft power.
James Sunderland (Bracknell) (Con)
This has been a good week for defence, and I commend the Government on their commitment to 2.5%, but the issue is how we spend it. Could the Defence Secretary confirm to the House that, rather than our focusing on exquisite exclusivity or—heaven forbid—indulging single service bad behaviour, the money will be spent on plugging capability gaps, better operating the platforms that we have, and ensuring that our forces have the activity, resilience and sustainment to maintain and enhance their world-leading and persistent global posture?
Grant Shapps
That is an excellent question. The Minister for Defence Procurement has done an outstanding job on a publication that I recommend to everyone in the House: “Integrated Procurement Model”. It is much more exciting than it sounds. That new model has already been responsible for bringing forward the procurement of the DragonFire by five years. Rather than our trying to create exquisite, unbelievably complicated and never-quite-right equipment, the model will bring equipment into the field and allow it to be spiralled and developed further. My hon. Friend is absolutely right: we will use this money much more intelligently to make sure that we get kit into the field, and expand and improve it from there.
Mike Kane (Wythenshawe and Sale East) (Lab)
While I welcome the increase to 2.5%, the modus operandi of this Secretary of State is to come to this House and announce billions of pounds of investment to get people salivating about it, only for it to never happen. Look at Northern Powerhouse Rail and High Speed 2. We know it, the country knows it and the brass knows it. The Times reports that we will fall to below 70,000 full-time equivalent troops. Where will we be with boots on the ground in a year’s time?
Grant Shapps
The way for this not to happen is for the public to vote for the hon. Gentleman’s party, because I have not heard this afternoon that the Labour party is committed to making it happen. If people want 2.5% by 2030, they should vote Conservative, because that is what we will give them. I think I will leave it there.
Sir Simon Clarke (Middlesbrough South and East Cleveland) (Con)
I add my tribute to the late Frank Field, who was an extraordinary man and a great parliamentarian.
In welcoming the announcement of an additional £75 billion over the next six years, which is much needed, may I urge the Secretary of State to consider the potential for a fifth successor-class submarine? I note that the patrol times for the Vanguard class are approaching 200 days, which is not sustainable, and it is vital that we give ourselves as much operational capacity as we can with our deterrent.
Grant Shapps
We will always keep a very close eye on how we ensure a constant at-sea nuclear deterrent. I can confirm that it has been at sea every single day for 54 years, and we do not intend to have that stretch broken. Quite what that requires is a matter for defence study. As my right hon. Friend knows, we are committed to delivering four Dreadnoughts, which will be far more modern. Like any modern piece of equipment, they are likely to have greater reliability as well. We will not let this country down when it comes to our nuclear deterrent. As I said in my statement, we are not doing this just because we are approaching an election. We have always believed in our nuclear deterrent, and we always will.
Kenny MacAskill (East Lothian) (Alba)
Even Winston Churchill recognised that modern conflicts are fought by people, not armies. That is why world war two was the genesis of the NHS and the welfare state. However, while military spending is increasing, public services are collapsing. Is it not as important to wage war on poverty at home as it is to prepare for war abroad? If there needs to be an increase in military and defence expenditure, surely it should come from the cancellation of the failed Trident project, which is impoverishing military services, rather than from public services. Why should the people pay for the Government’s wars?
Grant Shapps
I could not disagree with the hon. Gentleman more strongly. Even in my time as Defence Secretary, there are decisions that I have made that, if we had not had the nuclear deterrent, I would have hesitated in making. It protects us every single day in ways that are not always immediately obvious to everyone. The idea that by not investing in our defence we would somehow be safer, and that somehow all that money would be available to invest in all these other public services, is to misunderstand the first principle of every Government: we are here to defend the realm, without which there would be nothing to pay for internally, because we would not be safe externally.
Sir Edward Leigh (Gainsborough) (Con)
In the 1930s, a wise Government ensured that RAF airfields were upgraded and improved, and that saved us from extinction in 1940. If we are to be on a war footing, will the Secretary of State remind the Home Office that it is its duty to maintain the best runway in Europe, the 10,000-ft runway at RAF Scampton, instead of letting it rot, as it is at present? If the Home Office is incapable of doing that, will it hand it over to Scampton Holdings as soon as possible—as we have argued for 15 months—so that it can be used, improved and available for a future emergency?
Grant Shapps
My right hon. Friend is speaking to the converted. As a keen pilot, I agree with him entirely. In fact, this usually works the other way around, but I will offer him a meeting so that we can discuss RAF Scampton and its long-term future, rather than the short term, in more detail.
Gen Kitchen (Wellingborough) (Lab)
Coming from a naval family, it is important to me that Labour is also wanting to reach 2.5%. Our ambition is no less than that of the Government. The Defence Secretary has said that this defence spending increase will be funded in part by big cuts in the number of civil servants. How much of this cut will be in the MOD civilian workforce, and will the Royal Fleet Auxiliary be exempt?
Grant Shapps
I welcome the hon. Lady’s support for this package and for the 2.5% and gently suggest that conversations with those on her own Front Bench would be important at this point. It is in the interest of national security that both sides sign up to 2.5% by a deadline, which we note this afternoon has not happened. She asked a specific question about the reduction. In the MOD, it would be a 10,000 reduction by 2028. To be clear, that is a reduction from about 60,000 to 50,000. I personally believe that is exactly the right thing to do if it helps to pay for our brave men and women in the armed forces out in the country. Less bureaucracy and more action—I think that is a good thing.
Mark Pritchard (The Wrekin) (Con)
I thank the Secretary of State for his recent visit to Shropshire, which he referenced, and also to welcome his statement and the statement of the Prime Minister yesterday. This is record investment into UK defence, which will be very welcome in Shropshire. Would my right hon. Friend like to take this opportunity to put on record his thanks to all those that work in uniform and the civilians at RAF Cosford, at MOD Donnington, at Babcock and at RBSL— Rheinmetall BAE Systems Land—which he recently visited? Can he confirm that the UK’s and Shropshire’s defence is secure with this Government?
Grant Shapps
I warmly join my right hon. Friend in sending exactly that message. As he says, just last week I was looking at the first prototypes of the Challenger 3 coming off the production line in his patch. My only regret was that I was not able to see him at the same time.
Deidre Brock (Edinburgh North and Leith) (SNP)
My written questions this week have uncovered another worrying increase in nuclear safety events at nuclear weapons sites in 2023, with the first category A safety breach in 15 years at Faslane and the highest number of category B incidents since 2006. Category A incidents are defined as those that have an actual or high potential for radioactive release to the environment in breach of safety limits. A former chief adviser to a Prime Minister has described our existing nuclear stock as “rotting” and “a dangerous disaster”. Can the Secretary of State tell us how much of this extra spend will go towards ensuring that, at the very least, existing nuclear sites do not deteriorate further, threatening the health and safety of armed forces staff and surrounding populations?
Grant Shapps
I am pleased to report to the hon. Lady that our defence standards, particularly when it comes to our nuclear estate, are extremely high. Whenever an issue is found, it is properly and thoroughly investigated. She is right to say that it is important that we continue to invest in that. This money is good news: every bit helps and we want to ensure that it is spent appropriately. As it happens, we fund the nuclear estate appropriately, but this money will help to ensure that is put well beyond doubt.
James Gray (North Wiltshire) (Con)
This is a very welcome announcement. There are no strings attached, and a guaranteed move to 2.5% of GDP sends a powerful message to two groups of people: our NATO partners and our adversaries around the world. Does the Secretary of State agree, however, that the powerful message is undermined by what I can only describe as the mealy-mouthed response from the Labour, Liberal Democrat and Scot Nat Front Benches? If they will not support what we are doing, what sort of message does that send to Putin and to other enemies? Surely what we want now is cross-party consensus: it must be 2.5% and Labour must side with us on it.
Sarah Jones (Croydon Central) (Lab)
May I take this opportunity to pay tribute to the reservists based in Croydon, who, among many roles, have been in Estonia helping to keep us all safe? Labour wants to reach 2.5%, but my right hon. Friend the shadow Defence Secretary has asked why there is no budget line or fully funded plans for the announcement. This appears to be a bit of a pattern across Government. Only yesterday, I learned that a £1 billion announcement made about carbon capture and storage several years ago still appears nowhere on a Treasury budget line. If the Government play so fast and loose with our public funding, how on earth will the Secretary of State deliver the economic stability on which our defence spending relies?
Grant Shapps
I encourage the hon. Lady, and all Opposition Members, to have a closer look at what we announced yesterday. This is a fully funded announcement. We have explained where the money will come from. We have set out in tables that you can go and read, Madam Deputy Speaker, the funding for the £75 billion. It is true that a choice exists that Labour Front Benchers need to talk not only to their Back Benchers about—because they will not agree with increasing to 2.5% by 2030—but unfortunately to many on their Front Bench as well. They will need to talk to 11 in particular—the ones who have voted against Trident, some of whom wanted to leave our nuclear deterrent behind and possibly even leave NATO as well. Conservative Members are, however, entirely united in the idea of spending 2.5%, setting a date for it now, setting out how that spending will work and making the choices to get there.
Ruth Edwards (Rushcliffe) (Con)
I strongly welcome this investment, which rightly recognises the increasingly unstable world in which we are operating. Many of our military capabilities are powered by advanced semi-conductors, and recent years have shown how fragile these supply chains can be. Will the Secretary of State set out what the Government are doing to develop strong alliances focused on securing our supply of that vital component?
Grant Shapps
My hon. Friend is right. As Business Secretary, I took the decision on Newport Wafer Fab, which highlighted to me the importance of our own supply chain for advanced semiconductors, particularly in the defence realm. That is one reason that, in the plan we published yesterday, we have committed to a new level of 5% of R&D for defence, to ensure that we are not only researching and developing but, through the expansion of the military capability in the industrial base, producing the things that we need for our armed forces.
Ashley Dalton (West Lancashire) (Lab)
Labour wants to reach 2.5%. I do not know how many more Labour Members need to say that before it gets through. If anybody was listening, my right hon. Friend the Member for Wentworth and Dearne (John Healey), the shadow Secretary of State, also said that clearly in his contribution. The Secretary of State said repeatedly on the media round this morning, and in the Chamber, that on page 20 we can find the fully costed plan. Bearing in mind that there is no mention on page 20 of how the 2.5% will be reached through the cuts to the civil service that the Secretary of State has described, and that the entire civil service budget is only £16.6 billion, where is the fully funded plan? It is not on page 20.
Grant Shapps
The hon. Lady once again asserts that Labour wants to reach 2.5%. Labour cannot just assert it; it has to will the means to get there. I did not hear that from the Labour Front Bench in response to this statement or yesterday’s announcement. As in all normal cases, and particularly spending reviews, the Treasury will set out all the numbers going forward, but the fact of the matter is that the figures published yesterday show £77 billion more being spent from this year through to the end of the decade, in part paid for by removing 72,000 civil servants from the system so that we get back to where we were before covid. If Labour does not want to follow that approach, it could follow another, but the hon. Lady cannot just assert that Labour agrees without explaining how it will do it.
Philip Dunne (Ludlow) (Con)
I refer the House to my entry in the Register of Members’ Financial Interests.
I also warmly welcome the increase of defence spending to 2.5% of GDP, and I congratulate my right hon. Friend and the Prime Minister on the leadership role they are providing to NATO. On where this extra money will go, will my right hon. Friend elaborate a little more on the balance between meeting the existing challenges in the equipment plan and introducing innovative new capability through the new procurement model that he commended to the House earlier?
Grant Shapps
We will both ensure that we deliver the things that we have said we will deliver. In a changing world, with the threat of Iran, Russia, a much more assertive China and a nuclear-armed North Korea, we are adjusting our programme to ensure that it does what is required.
New innovations, as my right hon. Friend will have gathered from my comments about spending 5% of GDP on R&D, are very important to us. We can now see how, in an asymmetric war, Russia’s entire Black Sea fleet has been made inoperative by a Ukrainian navy that has no fleet at all—a ghost fleet. We need to consider how we do all that, and this money will be used wisely in that context.
Jim Shannon (Strangford) (DUP)
I thank the Secretary of State, the Prime Minister and the Government for their clear commitment to 2.5%. I also thank them for committing an extra £500 million of aid for Ukraine, which is important. The Secretary of State and the Government are setting a target for the rest of NATO to follow, and I hope it will.
I very much welcome the news of an increase in defence spending, which my party and I have pushed for, but how much of the increase will be feet on the ground and how much will be enhanced cyber-security?
Grant Shapps
We are sticking with the defence review and refresh, which set out the exact personnel numbers. I think it is 188,000 across all three services. I have explained the extent to which new technology is helping to shape our thinking, but so are the lessons from Ukraine, particularly on the need to have munitions and larger stockpiles available.
There are, of course, many excellent locations, including in Northern Ireland, where more munitions and missiles are being created as we speak, with about an eightfold expansion. I look forward to visiting some of those who will enjoy the additional £10 billion, bringing the total to about £25 billion, over the next few weeks.
Several hon. Members rose—
Madam Deputy Speaker (Dame Rosie Winterton)
Order. I am anxious to ensure that all colleagues get in, but I urge brief questions so that the Secretary of State can give brief answers.
Mr John Baron (Basildon and Billericay) (Con)
Thank you, Madam Deputy Speaker.
I chair the 1922 defence committee, and the Secretary of State will know from Prime Minister’s questions that the whole Conservative party welcomes this announcement, but may I suggest that the message from the Government would carry so much greater resonance globally if the official Opposition also signed up to it? I am a former member of the armed forces, so I can assure him that the country speaking as a whole—the official Opposition and the Government together—carries much greater weight internationally for the good of the country.
Grant Shapps
My hon. and gallant Friend is absolutely right. We have seen how that has worked with Ukraine, and I am sorry that it is not working today with the timeline to get to 2.5%. I am afraid it proves, once again, that this country’s safety is in the right hands when Conservatives are in power.
Jason McCartney (Colne Valley) (Con)
I echo the words of the Secretary-General of NATO, Jens Stoltenberg, who said after yesterday’s defence spending announcement that
“once again, the UK is leading by example.”
In the light of the £500 million support package for Ukraine—and having seen the awful pictures of missile attacks on Ukrainian cities, including the destruction of the TV tower in Kharkiv in the past 48 hours—can my right hon. Friend confirm that the much-needed ammunition and missile systems will be in Ukraine as soon as possible, to aid its fight against Russian aggression?
Grant Shapps
My hon. Friend is absolutely right, both about what the Secretary-General said about how we are leading NATO in this regard, and about the absolute importance of our being there for Ukraine. We cannot afford for this war to be lost, and it will not be lost. I will make sure that he receives the comprehensive list of the items that we will now be supplying.
Holly Mumby-Croft (Scunthorpe) (Con)
It was widely reported some months ago that my right hon. Friend and the Secretary of State for Levelling Up, Housing and Communities had written to the Prime Minister setting out their concerns about the future of Scunthorpe’s blast furnaces. For all the reasons he has stated today, this is more important than ever, so I commend him for his foresight prior to his current role. Will he consider the importance of good-quality, British-made steel to our nation’s defence capabilities?
Grant Shapps
I well remember my hon. Friend’s pretty much constant lobbying. She is a great champion for her steelworks, and her comment about the importance of using British steel in British defence is taken on board.
Richard Graham (Gloucester) (Con)
We should all be grateful that today’s statement absolutely answers the widespread assessment of the increased risk in the world. Can my right hon. Friend confirm that he, the Foreign Secretary and the Prime Minister are discussing contributions with our European NATO partners? How important is our commitment to NATO both to the current US Administration and to any future US Administration? Lastly, does he agree that private sector innovation—Roke has recently opened an office in Gloucester—will be an important part of our defence procurement?
Grant Shapps
My hon. Friend is right about ensuring that we use this announcement to persuade other NATO members to do the same thing. I was proactively speaking to and texting my colleagues throughout NATO and beyond on this just yesterday, and I received very encouraging responses. I look forward to hearing more about the company in his constituency.
Andy Carter (Warrington South) (Con)
I congratulate my right hon. Friend and his Ministers on the work they have rightly done to reform defence procurement, given the significant increase in spending announced by the Prime Minister. How will these changes ensure that our military forces receive equipment more quickly and, in particular, how will they benefit British manufacturers by offering global export opportunities?
Grant Shapps
The integrated procurement plan, brilliantly created by my hon. Friend the Minister for Defence Procurement, has ensured that exports and exportability are a key part of the contract. I have mentioned how we have already used this model to speed up the production of DragonFire.
We are also using the integrated procurement model to make sure that we do not over-spec things, so that they do not become like—
Grant Shapps
I was not going to say Ajax, but I will say it now. Ajax was over-specced to the point where it became a very delayed project. Fortunately, it is now back on track.
Siobhan Baillie (Stroud) (Con)
Stroud constituents will welcome the Prime Minister’s boost for defence spending and ongoing focus on the dangers that we all face. The Stroud district is blessed with many strategically important businesses, such as Steller Systems, which I was with on Friday, Retro Track & Air and Impcross, to name but a few. These are innovative, nimble and agile companies doing extraordinary things. On behalf of the small and medium-sized enterprises and the small family businesses that are playing their part in protecting our country and others around the UK, will the Secretary of State confirm that SMEs will get their fair crack at contracts and that the bigger boys will pay them on time, to keep them alive for the benefit of all?
Grant Shapps
My hon. Friend is absolutely right. I predict that companies in Stroud will do very well from this if they are producing innovative and useful equipment for our armed forces. I take on board her point about small and medium-sized enterprises. When I was running my printing business and companies paid late, it would put huge pressure on cash flow. One of the great things that this Government have done is speed up the necessity for large organisations, particularly the primes, to pay properly and on time.
Marco Longhi (Dudley North) (Con)
It is great to hear the Secretary of State’s announcement about the £75 billion investment. Does he agree that it sends a clear signal to our brave armed forces that the party in government backs them, to the country that we back defence of the realm, and to companies in our supply chain up and down the country, including those in my constituency, that we back job security? It also exposes the Opposition as having no plan at all for defence.
Grant Shapps
My hon. Friend hits the nail on the head. The Prime Minister made the announcement yesterday in front of British troops, who are out in Poland doing incredible work. The reassurance of the idea that there is a period of time leading up to 2.5%, with the first increase coming immediately, really helps them to do their job, because they know that they are wanted and trusted, and that we honour their work. I agree with the other comments he made. It is a shame that there has not been an entirely cross-party welcome for the announcement.
Jane Stevenson (Wolverhampton North East) (Con)
I warmly welcome the announcement. The Secretary of State was kind enough to call in on me in Wolverhampton North East last week, and I spoke about the importance of aerospace to my local economy, with companies like HS Marston Aerospace, Collins Aerospace and Moog. How can he ensure that those companies benefit from the highly skilled, well paid jobs that this uplift in spending will bring? Does he agree that industry needs the certainty of cross-party agreement in order to make those investments, and that the Labour party needs to step up?
Grant Shapps
I very much enjoyed my visit to my hon. Friend’s constituency. She did indeed tell me about the defence companies that are so vibrant in her area. The future looks incredibly bright for them, given the amount we are investing and the fact that defence is typically an extremely well-paid profession. There is enormous ability for apprentices and graduates to be recruited, so her constituents will be happy about the announcement.
Dr Neil Hudson (Penrith and The Border) (Con)
I congratulate the Prime Minister and the Secretary of State on the welcome announcement that defence spending will be increased to 2.5% of GDP, and on their leadership on funding and support for Ukraine. For the sake of freedom, democracy and global safety, it is so important that Ukraine prevails. The announcement shows that it is our Conservative Government who will protect our nation and stand with our allies in the face of increasing international threats. Will the Secretary of State confirm that this sensible linear increase in funding for defence will help our defence industry to ramp up production in parallel, meaning that our armed forces will be supported, capable and resilient, and be able to keep us and our allies safe?
Grant Shapps
I absolutely can confirm that. One of the features of the way that we have done this is to create a straight line from next year to 2030, to ensure that industrial capacity can ramp up with certainty behind it. I am pleased to confirm that the answer is yes.
Danny Kruger (Devizes) (Con)
The Chief of the Defence Staff from Estonia was in Salisbury plain, in my constituency, last week. He told us that his country has 40,000 men and women in its army reserve, ready to serve at 24 hours’ notice; I call that being on a war footing, given that Estonia has a population 50 times smaller than ours. I am not proposing that we try to replicate that—proportionally, that would mean a 2 million-strong reserve—but will he consider using some of the money to boost our important reserve force?
Grant Shapps
My hon. Friend will know that we are twinned with Estonia through NATO and we provide protection to it. Estonia is very much on the frontline with Russia, in a way that we are fortunate not to be. We currently have 30,000 reserves. Rather than use them, we can use the many other things we bring to NATO and to Estonia’s protection, including the ability to provide personnel and equipment, which we do on regular basis.
Simon Fell (Barrow and Furness) (Con)
I commend my right hon. Friend on the work he has done in setting the new 2.5% baseline. It will reassure our allies, send an important message to our adversaries and strengthen our industrial base. I thank him for the part he played in securing £220 million for Barrow, as a result of the Team Barrow project, securing our future and easing delivery of Dreadnought and SSN-AUKUS. Barrow shipyard is not alone in delivering the submarine enterprise, so will my right hon. Friend confirm that some of the £75 billion will be spent on other key sites, such as Faslane, Devonport and others?
Grant Shapps
I absolutely can confirm to him that it is intended to benefit sites across the country. In the document we published yesterday, a map on page 10 shows how the different areas and regions of the country will benefit, not just in our nuclear estate but throughout the defence estate. There is not a constituency that does not benefit from the £75 billion announced yesterday. My hon. Friend welcomes the announcement and it is time for others to follow that lead.
Robin Millar (Aberconwy) (Con)
I add my own tribute to the late Lord Field. He took the time to talk to me when I was a Conservative councillor about a concern we shared for the weakest and most vulnerable in society, which reaches across the aisles of the House.
There is no doubt that the international threat is developing and the world is a more dangerous place, so I welcome today’s statement. What I hear is an investment in the armed forces that we need, not necessarily the armed forces we have. Does my right hon. Friend share my concern that the statement from the Opposition that they are planning to conduct a review is verging on the careless, in that it gives comfort only to those who seek to do the UK harm?
Grant Shapps
My hon. Friend is right about the armed forces that we need, not the armed forces that we have. We want our armed forces to be lethal, quick, agile and capable, which is why it is so important that we invest this £75 billion. He is also right to point out that to have yet another review is simply to invite chaos and delay at exactly the time our adversaries are looking at us, hoping that we do not get on with the job of delivering an extra 2.5% of GDP in funding, which would play into their hands.
Ian Levy (Blyth Valley) (Con)
I thank the Secretary of State for the announcement of 2.5% in defence spending by 2030. Will my right hon. Friend acknowledge the fantastic effort delivered by our reserve forces, which I had the pleasure to see for myself in Northumberland last Saturday?
Grant Shapps
I welcome my hon. Friend’s comments. There are many members of the reserve forces in the House, including the Minister for Defence People and Families, my right hon. Friend the Member for South West Wiltshire (Dr Murrison). We thank all members of the reserve forces for their service and for the time they give, and we thank their employers, who allow them to take the time to be reservists. We are grateful for all they do.
Point of Order
(7 months ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate
Richard Burgon (Leeds East) (Lab)
On a point of order, Madam Deputy Speaker. The House has been receiving information about the Government’s ongoing arms exports to Israel, about which the Deputy Prime Minister spoke earlier. A High Court hearing on a judicial review into arms exports, which finished yesterday, provided lots of information that—I will say this politely—is far from the impression we have been given by Ministers about arms sales, especially about how we have the most robust arms export licences in the world. One such example is that although the Government last reviewed and approved arms sales to Israel on 8 April, it appears that that did not consider the killing of three British aid workers in Israeli air strikes on Gaza on 1 April. I think we all find that shocking. Madam Deputy Speaker, can you advise how we ensure the Government are providing this House with up-to-date and accurate information, and how we can best hold the Government to account over this pressing and serious matter?
Madam Deputy Speaker (Dame Rosie Winterton)
I thank the hon. Gentleman for his point of order and for giving me notice of it. I think he will be interested to know that Ministers were giving evidence to the Business and Trade Committee on this subject earlier today. In view of that, I am sure that he will find a way to ask Ministers about any new information that may have come to light since they last answered questions on this subject in the Chamber. I should also say that the Secretary of State for Defence has stayed to listen to his point of order, and I am sure that the Treasury Bench will feed back the points that he has made.
Heritage Public Houses
Wednesday 24th April 2024
(7 months ago)
Commons ChamberRead Full debate Heritage Public Houses Bill 2023-24 View all Heritage Public Houses Bill 2023-24 Debates Read Hansard Text Watch Debate
A Ten Minute Rule Bill is a First Reading of a Private Members Bill, but with the sponsor permitted to make a ten minute speech outlining the reasons for the proposed legislation.
There is little chance of the Bill proceeding further unless there is unanimous consent for the Bill or the Government elects to support the Bill directly.
For more information see: Ten Minute Bills
This information is provided by Parallel Parliament and does not comprise part of the offical record
Marco Longhi (Dudley North) (Con)
I beg to move,
That leave be given to bring in a Bill to require local authorities to maintain a register of heritage public houses in their area and to make provision in connection with the compilation and maintenance of such registers; to make provision relating to planning applications in respect of public houses on such a register; to place restrictions on the sale of heritage public houses; to make provision relating to the nomination of heritage public houses as assets of community value; to make provision about the listing of heritage public houses; and for connected purposes.
I stand before you today, Madam Deputy Speaker, with a call to action. On 5 August last year, we learned of the devastating loss of a cherished piece of my local community’s history, the Crooked House. This beloved pub with its unique character and rich tapestry of stories was senselessly destroyed in what was seen by most as the ruthless pursuit of profit over preservation. The Crooked House was not just a pub. Over centuries, it was a gathering place, a sanctuary, a piece of our shared heritage. Its walls held countless memories and moments that defined our lives in the Black Country and far beyond.
Built in 1765, the Crooked House saw the birth of the industrial revolution and the trials and tribulations of a people who worked our coalmines and our limestone mines, and who worked in our foundries making nails and all the chains and anchors of the ships that sailed the seven seas. These were a long-suffering people who just got on with the job, while their living and working conditions were truly appalling. Seeing the Crooked House violently reduced to ashes and rubble immediately tore a profound wound that cut deep into the consciousness of a people not just locally, but nationally, and in fact from all corners of the planet.
The destruction of the Crooked House is not just a tragedy, but a wake-up call. It exposes a disturbing trend where short-sighted greed trumps the preservation of our cultural heritage. It vividly exposes the shortcomings of our systems and frameworks that should offer better protection to these treasured assets. Anybody who might push back at this assertion should perhaps explain why it is that, across the country, historic pubs—the hub of many local communities—are under threat from the same forces that claimed the Crooked House. That is why I am here today. I am here to say that enough is enough and that it is time to put people and history before money. It is time that we enshrine the protection of our heritage pubs in law to give them the best chance of surviving the forces of greed, and also the winds of change.
Imagine a future, Madam Deputy Speaker, where every historic pub is safeguarded, where people cannot act with impunity and where our communities can thrive around these cherished institutions. It is a future that we can create, but only if we act soon. We need improved legislation that empowers and compels local councils to better protect our heritage pubs—legislation that makes it financially unviable for those who destroy our history, legislation that enshrines the rights of communities to have a say in the future of the local pubs in a meaningful way and legislation that will give these pubs the best chance to survive as businesses.
In preparing this Bill, it is important that I acknowledge the advice and support that I received from so many: Mr Greg Mulholland, a former Member of this place who leads the campaign for pubs; my right hon. and learned Friend the Member for Kenilworth and Southam (Sir Jeremy Wright) who provided incisive advice; and the many local people who gave their support under the umbrella of the campaign to rebuild the Crooked House, some of whom are in the Public Gallery today.
There are three key elements to the proposed legislation: the first examines the role of local government; the second, how temporary restrictions on the sale of heritage pubs could give them a fighting chance; and the third, how the process for the purchase of assets of community value can be assisted by this legislation. The first step would empower and compel local government to create and maintain a register of heritage pubs. This would trigger assessments for possible listing. It would highlight their local importance and ensure that local planners have immediate visibility of any impending activity on site at point of sale. The Crooked House had no protections whatever, and an immediate application for listing had no chance of succeeding while events unfolded very quickly. The current voluntary schemes are obviously inadequate and cannot keep pace with those who will act out of greed and with impunity.
In Wales, under section 24 of the Historic Environment (Wales) Act 2016, buildings are automatically given statutory protection while Welsh Ministers make listing decisions. These protections apply until Welsh Ministers have made their decision. This is an example of something that could apply in England.
The second element would involve placing temporary restrictions on the sale of a heritage pub. That is not something that I would normally advocate. Meddling with property rights goes against all my instincts, but if an asset with heritage and local community value is to have a chance of surviving against the change in purchasing habits of customers and against the cold, hard decisions made by brewery accountants, I have concluded that restricting the sale of these pubs temporarily for a 12-month period to pub-trade-only buyers and at a price independently agreed by trade specialists seems like a reasonable step to take to give these beleaguered buildings a fighting chance.
At the end of the 12-month period should a sale not be agreed, then the pub will return on to the open free market for sale. This mechanism could give a local landlord with lower operating costs and overheads compared with those of a brewery the opportunity to make a success of the pub at a purchase price that is not competing with residential development buyers.
Finally, I will address the process for assets of community value. This is a good scheme that works well for certain assets, such as a local community hall, but can it work with the speed required when owners and buyers can move very quickly, and can the scheme handle the more complex nature of an asset that could still host a struggling going concern? Well, the Crooked House proved that the ACV scheme could not have coped. ACVs could well have a place if a local community became aware and mobilised during the 12-month restriction period I referred to earlier, and an application were made at the end of this period. Part of the ACV process requires local communities to raise funds and complete transactions within a six-month timeframe. The restriction period would effectively enhance that process by 12 months, making the chances of a subsequent and successful ACV purchase much greater.
The ongoing loss of our heritage pubs can represent a devastating loss to local communities. Heritage pubs can fail for multiple reasons, and these complex problems obviously require more complex solutions. That is what I am attempting to do today, and I ask Members to stand with me, because if we do not act now, we will see pieces of our history eradicated forever. I say stand with the ghosts of the Crooked House, stand with my local communities in Gornal, Sedgley, Dudley and far beyond who want to see the Crooked House rebuilt brick by brick, and stand for the future of our heritage pubs. Let us vow to protect these institutions not just for ourselves, but for the generations to come.
Question put and agreed to.
Ordered,
That Marco Longhi, Lia Nici, Robin Millar, Gareth Johnson, Sir Edward Leigh, Shaun Bailey, Steve Tuckwell, Jane Stevenson, Sir Jeremy Wright, Lee Anderson, Jim Shannon and Mrs Paulette Hamilton present the Bill.
Marco Longhi accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 21 June, and to be printed (Bill 207).
Renters (Reform) Bill
Wednesday 24th April 2024
(7 months ago)
Commons ChamberRead Full debate Renters (Reform) Bill 2022-23 View all Renters (Reform) Bill 2022-23 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 24 April 2024 - (24 Apr 2024)
17:26 - The House divided: - Ayes: 283 / Noes: 143 - Question accordingly agreed to.
17:41 - The House divided: - Ayes: 287 / Noes: 144 - Question accordingly agreed to.
18:03 - The House divided: - Ayes: 158 / Noes: 282 - Question accordingly negatived.
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Jacob Young)
I beg to move, That the clause be read a Second time.
Madam Deputy Speaker (Dame Rosie Winterton)
With this it will be convenient to discuss the following: 8 Housing Act 1988 Section 16D, 16E Duties on landlords and agents as regards information provision and prohibition on reletting 9 Renters (Reform) Act 2024 Sections 48 Landlord redress provisions 10 Renters (Reform) Act 2024 Section 69 Active landlord database entry”. “1, 1A, 1B, 2, 2ZA, 2ZB, 4A, 6, 6A four months beginning with the date of service of the notice 5, 5A, 5B, 5C, 5D, 7, 9 two months beginning with the date of service of the notice”.
Government new clause 30—Assessment of operation of possession process.
Government new clause 13— Sections 1 and 2: effect of superior leases.
Government new clause 14—Powers of Secretary of State in connection with Chapter 1.
Government new clause 16—Power of Welsh Ministers to extend protection to persons of other descriptions.
Government new clause 17—Power of Secretary of State to extend protection to persons of other descriptions: Wales.
Government new clause 18—Prohibition of discrimination relating to children or benefits status: Scotland.
Government new clause 19—Terms in standard securities relating to children or benefits status: Scotland.
Government new clause 20—Terms in insurance contracts relating to children or benefits status: Scotland.
Government new clause 21—Power of the Scottish Ministers to extend protection to persons of other descriptions.
Government new clause 22—Interpretation of Chapter 4A.
Government new clause 23—Power of Scottish Ministers to make consequential provision.
Government new clause 24—Power of Secretary of State to extend protection to persons of other descriptions: Scotland.
Government new clause 25—Landlord redress schemes: no Crown status.
Government new clause 26—Other amendments in connection with landlord redress schemes.
Government new clause 27—Commencement.
Government new clause 28—Application of Chapter 1 of Part 1.
Government new clause 29—Assured agricultural occupancies: opting out etc.
Government new clause 31—Local Commissioners’ investigation of complaints by persons who are not tenants.
Government new clause 32—Unlicensed HMOs and houses: offences.
Government new clause 33—Service of improvement notices on landlords and licensors.
Government new clause 34—Rent repayment orders: liability of directors etc.
Government new clause 35—Report on certain matters relating to tenancy reform.
Government new clause 36—Report on provision of residential tenancies.
New clause 1—Repeal of requirement for selective licensing—
“Part 3 of the Housing Act 2004 (Selective licensing of other residential accommodation) is repealed.”
This new clause would remove the ability of local housing authorities to designate areas as subject to selective licensing.
New clause 2—Expanding the remit of rent repayment orders to company directors—
“In section 249A of the Housing Act 2004, after subsection (1) insert—
‘(1A) If a local housing authority believes that a relevant housing offence has been committed by a body corporate, it may impose a financial penalty on—
(a) a director, manager, secretary or other similar officer of the body corporate, or
(b) a person purporting to act in such a capacity,
if it is satisfied, beyond reasonable doubt, that the offence was committed with the consent or connivance of that person, or that the offence was attributable to any neglect on the part of that person.’”
This new clause would enable local housing authorities to impose financial penalties on certain individuals when it believes a housing offence has been committed by a body corporate.
New clause 3—Evidence to consider when granting possession order for anti-social behaviour—
“In section 9A of the 1988 Act, after subsection (2) insert—
‘(3) In considering evidence of conduct the court may consider evidence provided by way of hearsay and that evidence will be admissible without notice or permission of the court notwithstanding any rule of the court or the common law.’”
This new clause would enable courts to consider hearsay evidence during the course of proceedings for possession on the grounds of anti-social behaviour.
New clause 5—Review of changes to grounds for possession—
“(1) The Secretary of State must, within two years of the date of Royal Assent to this Act, conduct and lay before Parliament a review of the grounds for possession in Schedule 2 of the Housing Act 1988, as amended by this Act.
(2) The review must include—
(a) an assessment of the effectiveness of the new or amended grounds for possession set out in Schedule 1 of this Act in securing evictions from properties;
(b) an assessment of the impact on the security of tenure of tenants as a result of the use of the new or amended grounds for possession set out in Schedule 1 of this Act;
(c) a report on the use of enforcement action in relation to the new or amended grounds for possession set out in Schedule 1 of this Act;
(d) an assessment of the effectiveness of the grounds for possession listed in Schedule 2 of the Housing Act 1988 in securing evictions from properties that remain unamended by Schedule 1 of this Act.
(3) The review under subsection (1) must make such recommendations as, in the opinion of the Secretary of State, are necessary in the light of the findings of the review.”
This new clause would require the Government to publish a review of the impact of the amended grounds for possession within two years of the Act coming into force.
New clause 6—Requirement to state the amount of rent when advertising residential premises—
“(1) A landlord must not advertise or otherwise offer a tenancy of residential premises unless the amount of rent is stated in the advertisement or offer.
(2) A letting agent acting on behalf of a landlord must not advertise or otherwise offer a tenancy of residential premises unless the amount of rent is stated in the advertisement or offer.”
This new clause would require landlords or persons acting on their behalf to state the proposed rent payable in the advertisement for the premises.
New clause 7—Not inviting or encouraging bids for rent—
“(1) A landlord must not invite or encourage a prospective tenant or any other person to offer to pay an amount of rent for residential premises that exceeds the amount of rent stated as part of the advertisement or offer of the premises as required by section [requirement to state the amount of rent when advertising residential premises].
(2) A letting agent acting on behalf of a landlord must not invite or encourage a prospective tenant or any other person to offer to pay an amount of rent for residential premises that exceeds the amount of rent stated as part of the advertisement or offer of the premises as required by section [requirement to state the amount of rent when advertising residential premises].
(3) Subsection (1) does not prohibit a prospective tenant or other person from offering to pay an amount that exceeds the stated amount of rent.”
This new clause would prevent landlords or persons acting on their behalf from inviting or encouraging bids that exceed the amount stated as part of the advertisement or offer of the premises.
New clause 8—Limit on amount of rent that a residential landlord can request in advance—
“In Schedule 1 to the Tenant Fees Act 2019, after paragraph 1(8) insert—
‘(9) Where rent is payable in advance, the maximum that may be charged is equivalent to the amount specified in paragraph 2(3).’”
This new clause would ensure that the maximum amount of rent that could be lawfully requested by a residential landlord in advance of a tenancy commencing would be 5 weeks’ rent for tenancies of less than £50,000 per annum and to 6 weeks’ rent for tenancies over £50,000 per annum.
New clause 10—Extension of Awaab’s law to the private rented sector—
“(1) Section 10A of the Landlord and Tenant Act 1985 is amended as follows.
(2) Omit subsections (1)(b) and (6).
(3) In subsection (7), omit the definitions of ‘low-cost home ownership accommodation’ and ‘social housing.’”
This new clause would require private landlords to deal with hazards affecting their properties.
New clause 11—Ending blanket bans on renting to families with children or those in receipt of benefits—
“The Secretary of State may, by regulation, specify behaviour which, for the purposes of Part 4, Equality Act 2010, shall be considered unlawful discrimination unless the contrary is shown.”
This new clause would ensure that blanket bans on renting to families with children or those in receipt of benefits are presumed to be unlawful discrimination unless proved otherwise.
New clause 12—Discrimination relating to care-leaver status—
“(1) The provisions of this section apply to individuals who are—
(a) a relevant child as defined by section 23A of the Children’s Act 1989; or
(b) a former relevant child as defined by section 23C of the Children’s Act 1989.
(2) A relevant person must not, in relation to a dwelling that is to be let on a relevant tenancy—
(a) on the basis that the individual meets either of the criteria set out in subsection (1), prevent the person from—
(i) enquiring whether the dwelling is available for let,
(ii) accessing information about the dwelling,
(iii) viewing the dwelling in order to consider whether to seek to rent it,
(iv) entering into a tenancy of the dwelling, or
(b) apply a provision, criterion or practice in order to make care leavers less likely to enter into a tenancy of the dwelling than people who are not care leavers.
(3) Subsection (2) does not apply if the relevant person can show that the prospective landlord of the dwelling, or a person who would be a superior landlord in relation to the dwelling, is insured under a contract of insurance—
(a) to which section 33 does not apply, and
(b) which contains a term which makes provision (however expressed) requiring the insured to prohibit a tenant under a relevant tenancy from being a care-leaver,
and the conduct is a means of preventing the prospective landlord from breaching that term.
(4) Conduct does not breach the prohibition in subsection (2) if it consists only of—
(a) one or more of the following things done by a person who does nothing in relation to the dwelling that is not mentioned in this paragraph—
(i) publishing advertisements or disseminating information;
(ii) providing a means by which a prospective landlord can communicate directly with a prospective tenant;
(iii) providing a means by which a prospective tenant can communicate directly with a prospective landlord, or
(b) things of a description, or things done by a person of a description, specified for the purposes of this section in regulations made by the Secretary of State.”
New clause 37—Extension of rent repayment orders—
“(1) In Section 40(3) of the Housing and Planning Act 2016, at end of table insert—
This new clause would ensure that rent repayment orders can be made to the landlord under the relevant tenancy in any instance where a financial penalty or offence is made relating to clauses 11, 12, 48 or 69 of the Bill.
New clause 38—Continuing ability of tenants to sublet—
“(1) In any lease of residential property which is not by virtue of this Act an assured tenancy—
(a) any provision which restricts subletting to assured shorthold tenancies shall be interpreted to refer to assured tenancies; and
(b) any provision which would make the grant of an assured tenancy a breach of that provision shall be void unless—
(i) that provision is an absolute prohibition against subletting; or
(ii) the lease has less than seven years unexpired.
(2) Any provision which requires the consent of a landlord or other person to the grant of a subtenancy shall be interpreted so that consent may not be refused on the grounds that the subtenancy is an assured tenancy or on the grounds of any statutory provision of that tenancy.”
This new clause seeks to ensure that persons who are tenants under a long lease can continue to sublet residential premises in circumstances where they were previously permitted to do so under the long lease on the basis that the sublease was an assured shorthold tenancy.
New clause 39—Payment of relocation payment to tenant—
“In the Housing Act 1988, after section 11 insert—
‘11A Payment of relocation payment in certain cases
(1) Where a landlord issues a notice of proceedings for possession of a dwelling-house on any of the grounds in Schedule 2 to this Act (except Ground 7A or Ground 14) within two years of the start of the tenancy, the landlord shall pay a relocation payment to the tenant.
(2) A relocation payment shall be an amount equivalent to—
(a) one month’s rent in the case of an order for possession on Ground 1 or Ground 1A;
(b) two months’ rent in the case of an order for possession on any other ground.
(3) The relocation payment shall be made no less than two weeks before the date specified in the notice of proceedings for possession.’”
This new clause would require landlords to pay a “relocation payment” to tenants when evicting them from their property within two years of the start of the tenancy, except on the grounds of crime and antisocial behaviour.
New clause 40—Guarantor to have no further liability following death of tenant—
“(1) Subject to subsection (3), a guarantee agreement relating to a relevant tenancy ceases to have effect upon the death of a relevant tenant.
(2) Upon the death of a relevant tenant the guarantor in respect of a relevant tenancy shall incur no further liability in relation to matters arising under the tenancy.
(3) Nothing in this section shall affect the liability of a guarantor in relation to matters which arose before the date of the death of the relevant tenant.
(4) In assessing any liability under subsection (3), account shall be taken of any tenancy deposit paid in respect of the tenancy.
(5) Where there is more than one relevant tenant, this section shall apply only upon the death of both or all of the tenants.
(6) In this section—
‘guarantor’ means a person who enters into a guarantee agreement in relation to a relevant tenancy;
‘guarantee agreement’ means a contractual promise (whether incorporated in or separate from the tenancy agreement) to indemnify or compensate a relevant person in respect of an obligation under the tenancy if the tenant fails to perform or comply with the obligation;
‘relevant tenancy’ has the same meaning as in section 36, and ‘relevant tenant’ is to be interpreted accordingly;
‘tenancy deposit’ has the same meaning as in section 212(8) of the Housing Act 2004.”
This new clause would mean that guarantors in relation to a tenancy have no liability for future matters arising from the tenancy after the tenant has died.
New clause 41—Prohibition of requirement for rent guarantors—
“(1) A relevant person may not, in relation to a dwelling that is to be let on a relevant tenancy—
(a) require the provision of a rental guarantor or an equivalent upfront payment;
(b) let the relevant tenancy on the basis of being offered a rental guarantor or an equivalent payment by a prospective tenant.
(2) For the purposes of this section, ‘relevant person’ and ‘relevant tenancy’ have the meanings given in section 36 of this Act.”
This new clause would prohibit landlords from requiring prospective tenants to provide rent guarantors or equivalent upfront payments, and prohibit them from prioritising prospective tenants who offer them over those who do not.
Government amendments 200 to 205 and 57.
Amendment 14, in clause 3, page 3, leave out lines 21 to 23 and insert—
Government amendments 56, 58 and 59.
Amendment 15, page 3, line 33, at end insert—
“(4) The Secretary of State must lay before Parliament a review of the changes to grounds for possession made under this Act within two years of the date of Royal Assent.”
Government amendment 206.
Amendment 21, in clause 6, page 7, line 4, at end insert—
“13B Recovery of rent
(1) Any increased rent which is paid otherwise than in accordance with section 13 or section 13A is recoverable from the landlord by the tenant as a debt claim in the courts.
(2) The Secretary of State may, by regulations, provide for such claims to be recoverable by proceedings in the First-Tier Tribunal, rather than the courts.”
This amendment would ensure that in instances where a private landlord increases the rent without issuing a section 13 or section 13A notice the tenant can seek to recover costs through a debt claim in the court. It also provides the government with the power by regulation for such claims to be recoverable by tribunal.
Government amendment 207.
Amendment 261, in clause 7, page 8, line 2, at end insert—
“(c) in paragraph (c), at end insert—
‘and,
(d) that it was financed or part-financed by a means-tested grant’.”
This amendment will prevent rents from being increased by a tribunal as a consequence of improvements to properties that have been financed or part-financed by a means-tested grant.
Amendment 22, page 8, line 9, at end insert—
“(7A) After subsection (8) insert—
‘(8A) Where a notice under section 13(2) has been referred to the appropriate tribunal then, unless the landlord and the tenant otherwise agree, the rent determined by the appropriate tribunal (subject, in a case where subsection (5) above applies, to the addition of the appropriate amount in respect of rates) shall be the same or below the rent specified in the section 13 notice and the rent as determined by the tribunal shall only become payable once the decision of the tribunal has become final.
(8B) A decision becomes final only on the latest of—
(a) the determination of any appeal;
(b) if earlier, on the expiry of the time for bringing a subsequent appeal (if any); or
(c) by its being abandoned or otherwise ceasing to have effect.’”
This amendment would ensure that where a rent assessment is carried out by a tribunal, the rent subsequently determined by that tribunal cannot be higher than that originally requested by a landlord in a section 13 notice.
Amendment 13, page 8, line 20, at end insert—
“(c) no more than the rent proposed by the landlord in the notice served on the tenant under section 13 of the 1988 Act.”
This amendment would mean that the rent payable after a tribunal determination can be no higher than the rent initially proposed by the landlord in the notice served on the tenant.
Amendment 23, page 9, line 5, at end insert
“which must be no earlier than two months following the date of determination”.
This amendment would ensure that in cases of undue hardship tenants would have a minimum of two months from the date of determination before a new rent became payable.
Amendment 24, page 9, line 6, leave out subsection (4) and insert—
“(4A) A date specified under subsection (3)(b) must be no earlier than the date on which the determination becomes final, with a decision only becoming final on the latest of—
(a) the determination of any appeal;
(b) if earlier, on the expiry of the time for bringing a subsequent appeal (if any); or
(c) by its being abandoned or otherwise ceasing to have effect.”
This amendment would remove the requirement for a date determined by a court for rent to become payable in cases of undue hardship to not be later than the date of the determination.
Amendment 31, in clause 9, page 9, line 29, leave out “42nd” and insert “28th”.
This amendment would ensure a landlord gives or refuses consent in writing within 28 days of the request being made.
Amendment 32, page 9, line 30, at and insert—
“(d) the landlord may not review or withdraw consent once given.”
This amendment ensures that a tenant may keep a pet for the duration of their tenancy once consent has been given.
Government amendments 60, 208, 61, 209, 63, 210, 62 and 211.
Amendment 38, in clause 12, page 14, line 18, at end insert—
“(g) unreasonably refuse home adaptations for the purposes of a disabled person's access to or usage of the home.”
Amendment 11, page 14, line 21, after “dwelling-house” insert
“or the short-term let or holiday let”.
This amendment would clarify that a landlord cannot let a property as a short-term or holiday let for at least three months after taking ownership of the property for the purposes of them or their family occupying it.
Government amendment 64.
Amendment 1, page 14, line 26, after “dwelling-house” insert
“or the short-term let or holiday let”.
This amendment would clarify that a landlord cannot let a property as a short-term or holiday let for at least three months after taking ownership of the property for the purposes of them or their family occupying it.
Government amendment 65.
Amendment 2, page 14, line 28, after “dwelling-house” insert
“or the short-term let or holiday let”.
This amendment would clarify that a landlord cannot let a property as a short-term or holiday let for at least three months after taking ownership of the property for the purposes of them or their family occupying it.
Government amendments 66, 67 and 212.
Amendment 3, page 15, line 15, leave out “three” and insert “six”.
This amendment would increase the time which must elapse between a landlord taking ownership of a property for the purposes of them or their family occupying it and making the property available to rent from three months to six months.
Amendment 35, page 15, line 15, leave out “three” and insert “twelve”.
This amendment would extend the restricted period in relation to a tenancy in relation to which Ground 1 or 1A in Schedule 2 is relied on from three to twelve months.
Amendment 36, page 15, line 17, leave out subsection (b).
This amendment would ensure that the restricted period is as specified in (8)(a) in all circumstances.
Government amendments 68 to 75, 213, 214, 195, 215 to 217 and 76.
Amendment 6, in clause 17, page 25, line 18, after “given” insert
“not earlier than four months after a tenant first occupies the premises and”.
This amendment would mean that tenants cannot give notice to quit until they have resided in the property for at least four months.
Government amendments 77 to 80, 218 to 220 and 81 to 85.
Amendment 43, in clause 29, page 32, line 23, leave out “section 27 or 28” and insert
“sections 27, 28 or [Discrimination relating to care-leaver status]”.
Amendment 44, in clause 30, page 34, line 21, at end insert—
“(5) A term of a relevant tenancy or regulated tenancy is of no effect so far as the term makes provision (however expressed) prohibiting the tenant from being—
(a) a relevant child as defined by section 23A of the Children’s Act 1989; or
(b) a former relevant child as defined by section 23C of the Children’s Act 1989.
(6) Subsection (5) does not apply if the landlord or a superior landlord is insured under a contract of insurance—
(a) to which section 33 does not apply, and
(b) which contains a term which makes provision (however expressed) requiring the insured to prohibit the tenant from being a relevant or former relevant child.
and the provision in the tenancy is a means of preventing the insured from breaching that term.”
Amendment 45, in clause 31, page 35, line 12, at end insert—
“(4A) A term of a lease of premises that consist of or include a dwelling is of no effect so far as the term makes provision (however expressed) requiring a tenant under that or any inferior lease to prohibit a sub-tenant under a relevant tenancy or regulated tenancy from prohibiting the tenant from being—
(a) a relevant child as defined by section 23A of the Children’s Act 1989; or
(b) a former relevant child as defined by section 23C of the Children’s Act 1989.
(4B) Subsection (4A) does not apply if the landlord under the lease or a superior landlord is insured under a contract of insurance—
(a) to which section 33 does not apply, and
(b) which contains a term which makes provision (however expressed) requiring the insured to prohibit a sub-tenant from being a relevant or former relevant child.
and the provision in the lease is a means of preventing the insured from breaching that term.”
Amendment 46, in clause 32, page 35, line 30, at end insert—
“(3) A term of a mortgage of premises that consist of or include a dwelling is of no effect so far as the term makes provision (however expressed) requiring a mortgagor to prohibit a tenant under a relevant tenancy or regulated tenancy from being—
(a) a relevant child as defined by section 23A of the Children’s Act 1989; or
(b) a former relevant child as defined by section 23C of the Children’s Act 1989.”
Amendment 47, in clause 33, page 36, line 2, at end insert—
“(2A) A term of a contract of insurance to which this section applies is of no effect so far as the term makes provision (however expressed) requiring the insured to prohibit a tenant under a relevant tenancy or regulated tenancy from being—
(a) a relevant child as defined by section 23A of the Children’s Act 1989; or
(b) a former relevant child as defined by section 23C of the Children’s Act 1989.”
Government amendments 86 to 113, 115 and 116.
Government motion to transfer clause 40.
Government amendment 117 and 118.
Amendment 39, in clause 42, page 54, line 1, after “section 1” insert—
“(a) omit subsection (3);
(b) in subsection (3A) omit ‘the landlord of a residential occupier or an agent of the landlord’ and insert ‘a person’;
(c) after subsection (3B) insert—
‘(3BA) For the purposes of this subsection, services which are reasonably required for the occupation of the premises as a household include, but are not limited to—
(a) water,
(b) gas,
(c) electricity, and
(d) electronic communications networks and services’;
(d) omit subsection (3C);
(e)”.
This amendment would amend the offence of unlawful eviction and harassment of the occupier of a property under the Protection from Eviction Act 1977 so that the offence can be committed by any person (not just the landlord of their agent), and define the services with which interference can constitute an offence.
Amendment 40, page 55, line 2, at end insert—
“(3A) In section 3A, after subsection (9) insert—
‘(10) In any proceedings under any of the relevant statutory provisions in this Act, it shall be for the accused to prove that the tenancy or licence is excluded by virtue of subsections (2) or (3) above.’
(3B) After section 4 insert—
‘4A Rebuttable presumption of landlord
(1) In any action under Part 1 of this Act (including where a Financial Penalty Notice (FPN) is issued) there is a rebuttable presumption that the person to whom the residential occupier pays rent or other payments in respect of occupation of a dwelling is the landlord of the property.’
(3C) After section 7 insert—
‘7A Notification by the police
(1) Where a constable has reasonable cause to believe that an offence under the Protection from Eviction Act 1977 has occurred the constable must within 24 hours notify the authority named in section 6 as responsible for prosecution of offences in the area with the following information—
(a) the address where the alleged offence has happened;
(b) if known, the name of the landlord;
(c) if known, the name of the residential occupier;
(d) any facts known to the constable about the alleged offence.
(2) A police force has the power to assist an authority included in section 6 in the exercise of their functions under this Act.’”
This amendment would amend proceedings for offences under the Protection from Eviction Act 1977, so that it must be proved that a tenancy is an excluded tenancy, that there is a rebuttable presumption that the person to whom a tenant paid their rent is the landlord, and that the police must inform the relevant local authority when they suspect offences under the 1977 Act to have been committed.
Government amendments 119 to 121.
Amendment 4, in clause 45, page 59, line 36, after “landlord” insert
“who is not otherwise a member of an independent redress scheme approved by the Secretary of State.”
This amendment would only require a residential landlord to be a member of the landlord redress scheme introduced by Clause 45 if they are not already a member of another independent redress scheme which has been approved by the Secretary of State.
Government amendments 122 to 134.
Amendment 27, in clause 53, page 67, line 18, at end insert—
“(ba) details, which may include copies, of all notices seeking possession served by the residential landlord in respect of each dwelling of which he is the landlord, and”.
This amendment would require the database to record details of notices of possession served by a landlord in respect of each dwelling of which they are the landlord.
Amendment 42, in clause 55, page 68, line 27, at end insert—
“(ba) require the provision of information about the accessibility of the dwelling,”.
Amendment 12, page 68, line 33, at end insert—
“(2A) Regulations under subsection (1) must require—
(a) the energy performance certificate relating to a registrable dwelling to be provided to the database operator; and
(b) details of the energy performance certificate to be recorded in a dwelling entry in the database.”
This amendment would require Energy Performance Certificates in relation to relevant dwellings to be provided to the database operator and details to be recorded in the database.
Government amendments 135 to 137.
Amendment 37, in clause 76, page 84, line 34, at end insert—
“(e) any accommodation which is provided by the Defence Infrastructure Organisation to service individuals and families.”
This amendment would ensure that accommodation rented from the Defence Infrastructure Organisation by service individuals and families is subject to the Decent Homes Standard.
Amendment 7, page 85, line 26, leave out clause 78.
Amendment 41, in clause 78, page 86, line 4, after “(order),” insert—
“(a) in subsection (1), before ‘The First-tier Tribunal’ insert ‘Apart from offences for which subsection (1A) applies,’;
(b) after subsection (1) insert—
‘(1A) The First-tier Tribunal may make a rent repayment order if satisfied on the balance of probabilities that the landlord has committed an offence under section 1(2), (3) or (3A) of the Protection from Eviction Act 1977 (whether or not the landlord has been convicted).’;
(c) at the end of subsection (3) insert—
‘(d) section 46A (where an order is made against more than one landlord or there has been a previous order)’;
(d)”.
This amendment would lower the level of proof required in proceedings for a Rent Repayment Order in the First-tier Tribunal to the balance of probabilities for offences under the 1977 Act.
Government amendments 196, 138 and 139, 197, 140 to 144, 221, 145 and 146, 222 and 147 to 151.
Amendment 8, in clause 116, page 111, line 19, leave out “subsection (2)” and insert “subsections (1A) and (2)”.
This amendment is consequential on Amendment 9.
Amendment 28, page 111, line 19, at end insert
“, save that section 2(b) comes into force on the day on which this Act is passed only to the extent that it repeals section 21 of the Housing Act 1988; such repeal will not affect the validity of any notices served under that provision on or before the day on which this Act is passed and the provisions of that section will continue to apply to any claims issued in respect of such a notice”.
This amendment would ensure that the abolition of section 21 evictions would come into force on Royal Assent, with saving provisions for any notices served before that date.
Amendment 9, page 111, line 19, at end insert—
“(1A) Prior to laying regulations under subsection (1) the Secretary of State must commission and publish a review into the operation of residential possession proceedings in the County Courts used by residential landlords and tenants and the enforcement of possession orders.”
This amendment would require the Secretary of State to publish a review of the operation of residential possession proceedings before determining the commencement date for the provisions of Chapter 1 of Part 1.
Government amendments 152 to 157.
Government new schedule 1—Amendments in connection with landlord redress schemes.
Government amendment 223.
Amendment 48, in schedule 1, page 114, line 10, leave out “6 months” and insert “one year”.
Amendment 255, page 114, line 10, leave out “6 months” and insert “2 years”.
Amendments 255 and 256 would prohibit evictions under grounds 1 and 1A within two years of the beginning of a tenancy.
Government amendment 224.
Amendment 49, page 115, line 8, leave out “6 months” and insert “one year”.
Amendment 256, page 115, line 8, leave out “6 months” and insert “2 years”.
Amendments 255 and 256 would prohibit evictions under grounds 1 and 1A within two years of the beginning of a tenancy.
Government amendment 225.
Amendment 33, page 115, line 32, leave out sub-paragraph (a) and insert—
“(a) the landlord who is seeking possession intends to—
(i) sell a freehold or leasehold interest in the dwelling-house or to grant a lease of the dwelling-house for a term certain of more than 21 years which is not terminable before the end of that term by notice given by or to the landlord;
(ii) re-let the dwelling house to another tenant pursuant to a Rent to Buy Agreement; or
(iii) retain and convert the home to rented housing on either an affordable or market rent basis;”.
This amendment covers the full scope of reasons that private registered providers of social housing may wish to use the new ground for possession 1B for to offer properties to another tenant.
Government amendment 158.
Amendment 34, page 116, line 12, leave out sub-paragraph (b) and insert—
“(b) allows the tenant to rent the dwelling house for a period stated in the agreement, which is not less than 5 years or, for dwelling houses in Greater London, 10 years from the beginning of the tenancy so as to enable the tenant to save for a deposit and, over time, purchase their first home.”
This amendment would ensure the wording for the definition of “Rent to Buy Agreement” at sub-paragraph (b) is an accurate reflection of the Rent to Buy product and is in line with the Capital Funding Guide.
Amendment 29, page 116, line 29, after “tenancy” insert
“(including any tenancy at will or other tenancy arising on expiry of a fixed-term lease)”.
This amendment would extend Ground 2ZA to apply in a situation where a tenancy at will may arise.
Government amendments 159 and 160.
Amendment 30, page 117, line 5, at end insert—
“(c) where the intermediate landlord serves notice under this Ground, the intermediate landlord shall be deemed to continue to hold sufficient interest in the dwelling-house to maintain a continuing right to possession until conclusion of any possession proceedings.”
This amendment would ensure that an intermediate landlord retains possession of the property and remains as the landlord of the occupying tenant until the conclusion of possession proceedings.
Government amendments 161, 163 and 164, and 226.
Amendment 5, page 118, line 4, after “HMO” insert
“or is occupied by one or two students”.
This amendment would mean that the ground for possession for student properties could also be used for properties occupied by just one or two students, which would not otherwise be considered as HMOs.
Government amendments 227 to 229.
Amendment 260, page 118, line 12, at end insert—
“(ca) the tenancy agreement was not signed earlier than March of the year in which the tenancy commenced.”
This amendment would end the pressure for joint tenancies to be signed too early in the academic year, committing students to accommodation before they are ready.
Government amendments 165 to 174, 230, 175 and 231 to 234.
Amendment 52, page 122, line 34, leave out “of an intention” and insert—
“that the landlord may intend”.
Amendment 53, page 122, line 35, at end insert—
“or the Court is of the opinion that it is just and equitable to dispose of the requirement to serve a written statement.”
Amendment 50, page 123, line 3, leave out lines 3 to 9.
Amendment 51, page 125, line 13, at end insert—
“Ground 6AA
A relevant social landlord granted a tenancy of the dwelling house to the tenant as temporary decant accommodation in order to demolish their original home in the context of re-development and the landlord seeking possession requires vacant possession of the dwelling house because—
(a) the landlord has served the tenant with notice that the new home is ready to move into, or
(b) the temporary use of the accommodation has otherwise come to an end.”
Amendment 16, page 125, leave out line 17.
This amendment would retain the existing 12-month period within which the landlord can initiate proceedings on this ground for possession.
Amendment 55, page 125, line 17, at end insert—
“(ab) At the end of the second unnumbered paragraph, insert—
‘This ground applies only where the landlord is a private registered provider of social housing.’”
Amendment 17, page 125, line 18, at end insert—
“(c) at the end of the last unnumbered paragraph insert—
‘This ground applies only where the landlord is a private registered provider of social housing.’”
This amendment would limit the use of Ground 7 of Schedule 2 of the 1988 Act to social rented housing.
Amendment 18, page 125, line 30, leave out paragraph 23.
This amendment would remove the new ground for possession for repeated rent arrears.
Amendment 19, page 125, line 30, leave out “After Ground 8” and insert “Before Ground 9”.
This amendment would move new Ground 8A from the list of mandatory grounds for possession (in Part I of Schedule 2 to the Housing Act 1988) to the list of discretionary grounds for possession (in Part II of Schedule 2 to the Housing Act 1988).
Amendment 257, page 126, line 12, at end insert—
“23A In Ground 12, after ‘performed’ insert ‘provided that failure to carry out this obligation could—
(a) be reasonably expected to have a material adverse effect on the safety, health, or lives of any residents in that property or adjoining property; or
(b) cause material damage to the property not contemplated in any form of property safety deposit scheme relating to the tenancy.’”
This amendment would amend Ground 12 (possession due to failure to carry out an obligation of the tenancy) so that a tenant cannot be evicted if the obligation does not pose serious risk to the wellbeing of the tenants or the property (such as putting a poster in a window or putting washing on display).
Amendment 20, page 126, line 14, leave out paragraph 24.
This amendment would maintain the existing definition of anti-social behaviour as being conduct causing or likely to cause a nuisance or annoyance, rather than being defined as behaviour “capable of causing” nuisance or annoyance.
Government amendments 235 and 236, 176 and 177, 237, 178 to 181, 238, 182 to 184, 245, 258, 246 and 247, 198 and 248 to 253.
Amendment 25, in schedule 2, page 128, line 29, leave out “omit subsection (5)” and insert
“for subsection (5) substitute—
(5) A person is also threatened with homelessness if—
(a) a valid notice has been given to the person under section 8 of the Housing Act 1988 in respect of the only accommodation the person has that is available for the person’s occupation, and
(b) that notice will expire within 56 days.”
This amendment would maintain the homelessness prevention duty owed by local authorities to persons who have received a notice to vacate a property and would extend it to notices for possession issued under section 8 of the Housing Act 1988.
Government amendment 239.
Amendment 26, page 129, line 1, leave out “omit subsection (6)” and insert
“for subsection (6) substitute—
(6) But the authority may not give notice to the applicant under subsection (5) on the basis that the circumstances in subsection (8)(b) apply if a valid notice has been given to the applicant under section 8 of the Housing Act 1988 that—
(a) will expire within 56 days or has expired, and
(b) is in respect of the only accommodation that is available for the applicant’s occupation.”
This amendment would ensure that the homelessness prevention duty owed by a local authority cannot end whilst a valid notice under section 8 of the Housing Act 1988 has been issued in respect of the only accommodation available to that person.
Government amendments 240, 254, 259, 185, 241, 186, 242, 187, 199, 243, 188 to 192, 244 and 194.
Jacob Young
I am delighted to bring the Renters (Reform) Bill back to the House on Report. I express my gratitude to Members across the House for their contributions on Second Reading and in Committee, and for their continued engagement throughout. I thank my predecessors, my hon. Friend the Member for Walsall North (Eddie Hughes), whose Parliamentary Private Secretary I had the privilege of being as he steered the White Paper, and my hon. Friend the Member for Redditch (Rachel Maclean), whose Whip I had the privilege of being as she steered the Bill on Second Reading. I have seen the Bill at every stage of its formation, and I can say to the House that the Bill we are discussing today would not have been possible without their hard work and dedication. I also pay tribute to the hon. Members for Greenwich and Woolwich (Matthew Pennycook) and for North Shropshire (Helen Morgan) for their constructive engagement and commitment to seeing the Bill delivered, so that its benefits can be realised.
The Bill will create a fairer private rented sector for both landlords and tenants, delivering on the Government’s 2019 manifesto commitment. The Bill brings in the most significant reforms for the sector in over 30 years. It will abolish section 21 of the Housing Act 1988 and bring in new decency standards, giving England’s 11 million tenants more certainty of secure and healthy homes. It will mean that tenants will be supported to hold down jobs in their local area, children to stay in the same school, and households to put down roots in their communities. Alongside abolishing section 21, we are strengthening and expanding landlord possession grounds, including stronger protections against antisocial behaviour. Combined with our reforms to ensure a modern court system, that will ensure that landlords retain confidence in getting back their properties when they need to, safeguarding their investment.
The new private rented sector ombudsman will resolve tenants’ disputes and support landlords in handling complaints effectively. That will help to avoid disagreements escalating unnecessarily to the courts, saving both landlords and tenants time and money. Our new property portal will make landlords’ responsibilities clear in one place and support tenants to make more informed choices. We are also providing stronger protections for renters with pets, recognising the joy that pets can bring. However, the Bill must strike a balance between delivering that security for tenants and fairness to landlords.
Caroline Lucas (Brighton, Pavilion) (Green)
This morning, the Secretary of State had the brass neck to suggest that to keep his promise to outlaw no-fault evictions before the next election it is now down to the House of Lords to get on with it. Will the Minister tell us which is more disingenuous: the five years we have been waiting for the Government to keep their promise, or the blatant concessions to the significant numbers of Conservative MPs who are landlords, who have been gifted what amounts to an indefinite delay to the ban on no-fault evictions?
Jacob Young
As I said, we introduced the White Paper in 2022. We published the Bill just last year in 2023, and we are taking it forward today to abolish section 21. She talks about Conservative Members. I can tell her—she will not read this in the newspapers—that I have been lobbied by Members on both sides of this House to ensure that the reforms work effectively. That is what the changes that we are making today on Report will do. They will bring balance to the Bill, delivering security for tenants and, as I said, fairness to landlords. The amendments will ensure that the new tenancy system works effectively.
Feryal Clark (Enfield North) (Lab)
Since the Government promised to outlaw section 21 evictions in 2019, more than 2,000 people in Enfield have been subject to no-fault evictions, costing the council millions of pounds to rehouse them. The Minister talks about fairness to landlords, but does he recognise the cost to renters, and indeed to local authorities through temporary accommodation?
Jacob Young
I absolutely accept that there is a cost. What I would say is that a system that does not work for landlords will not benefit tenants, and a system that does not benefit tenants will not benefit landlords in the long run either. We have to find a balance in the Bill. That is what our amendments will deliver. The amendments we introduced in Committee include expanding the range of factors that a judge must consider when evicting antisocial tenants, providing stronger protections for landlords and neighbourhoods against unacceptable behaviour. We also added a new ground for possession to protect the functioning of the student market and ensure that students’ landlords can continue to evict in line with the academic year.
Turning to housing quality, although the vast majority of landlords provide warm and decent homes, some fall short of that standard. It is unacceptable for any tenant to live in damp, cold or dangerous housing. For that reason, we introduced measures in Committee to apply and enforce a decent homes standard in the private rented sector for the first time. That new standard, which we are designing with landlord and tenant groups, will be set out in secondary legislation. We also introduced measures to outlaw deeply unfair blanket bans on renting to those with children or those in receipt of benefits in England and Wales. Those practices have no place in a fair and modern housing market.
Mr Clive Betts (Sheffield South East) (Lab)
Will the Minister assure us that proper energy efficiency standards will be contained in the decent homes standard? Otherwise, tenants will still be living in damp and cold homes because they will be unable to afford to heat them.
Jacob Young
I commit to working with the Chair of the Levelling Up, Housing and Communities Committee, and indeed with all Members of the House, to ensure that the decent homes standard provides for decent homes of the kind that he describes.
This is the first time we have applied the decent homes standard to the private rented sector, and we have to get it right. In order to target the minority of unscrupulous landlords, in Committee we also gave stronger powers to local councils, and we strengthened rent repayment orders. That will help to ensure effective and proportionate enforcement of the new system.
Let me turn to the Government amendments that we have tabled on Report. They respond to concerns from Members, constituents, and tenant and landlord groups, ensuring security for tenants while giving confidence to good landlords and supporting the private rented market. Several Members from across the House have played a direct role in helping us to ensure that the Bill works as effectively as possible for all those who live and work in the private rented sector. I of course include in that my hon. Friends the Members for Totnes (Anthony Mangnall) and for Northampton South (Andrew Lewer) for their continued engagement and constructive dialogue on the measures in the Bill.
Ms Karen Buck (Westminster North) (Lab)
I am listening to the Minister carefully. From his contribution, we would not think that there was any controversy at all about the position we have got to with the legislation. If everything is so wonderful, why have all the key housing charities and organisations in the field withdrawn their support for the Government?
Jacob Young
They have not withdrawn their support. I accept their disappointment with some of the amendments tabled on Report, but they have also endorsed some of them, including one that I know is very close to the hon. Lady’s heart in relation to expanding the homelessness prevention duty, which has the support of organisations such as Crisis, the homelessness charity. We will continue to work with everyone across the sector to ensure that the Bill is effective when it goes to the other place.
Turning to the amendments, I will address them thematically, starting with our tenancy reform measures. Government new clause 15 will ensure that a tenant’s notice to quit cannot expire within the first six months of the tenancy unless the landlord has agreed that it can expire sooner, thus increasing the amount of time a tenant must remain in a property at the start of the tenancy from two to six months. The change ensures that landlords are able to recover the costs of replacing tenants and will prevent tenants from using PRS properties as short-term or holiday lets.
Once the six-month initial period of commitment has ended, the tenancy will continue as a normal periodic tenancy, so after the six-month period tenants will need to give only two months’ notice. That ensures that tenants will retain the flexibility to end tenancies when their circumstances change or when a landlord does not fulfil their responsibilities. This measure strikes the right balance between providing landlords with the confidence they need to operate within the PRS and ensuring a fairer, simpler tenancy system.
In addition, the Government are exploring potential exemptions to the rule, such as the death of a tenant, domestic abuse or significant hazards within the property. Today I met the Domestic Abuse Housing Alliance to reaffirm our intention on the exemption and make clear that victims of domestic violence will be better protected by these reforms.
Government amendments 239 and 240, which I have just mentioned to the hon. Member for Westminster North (Ms Buck), will give tenants certainty that the homelessness prevention duty will be owed when a valid section 8 notice is served. I pay particular tribute to my hon. Friend the Member for Harrow East (Bob Blackman) for his contributions on this topic, ensuring that his landmark Homelessness Reduction Act 2017 continues to be effective. The prevention duty will apply where the date specified in the notice is within 56 days and the duty may not be ended simply because the 56 days has passed. This means that households can continue to receive support while the threat of homelessness remains. Mindful that that will broaden the scope of the prevention duty, we will carry out a new burdens assessment and provide funding for local authorities for any additional costs.
Alongside expanding the homelessness prevention duty, let me take this opportunity to restate our position on another important issue. The statutory homelessness code of guidance, which local authorities must have regard to, states that authorities should not consider it reasonable for a homeless applicant to remain in the property until a court issues a bailiff warrant or writ to enforce a possession order. We have heard anecdotal evidence that some local authorities are encouraging tenants on a blanket basis to remain in a property until the bailiffs are at the door. That is wrong. Doing so creates further delays in possession, penalises landlords, who have a legal right to their property, can be stressful for the tenant and, in the long run, is not beneficial for them at all. The guidance is clear on the importance of early prevention: authorities should contact landlords at an early stage to understand the circumstances of an eviction and establish what steps can be taken to prevent homelessness.
The Government are also working to ensure that families can move out of temporary accommodation and into stable accommodation, as well as reducing the need for temporary accommodation by preventing homelessness before it occurs in the first place. That is why we are investing more than £1.2 billion in the homelessness prevention grant over the next three years, including a £129 million top-up for the homelessness prevention grant for 2024-25, as part of an unprecedented £2.4 billion to tackle homelessness and rough sleeping.
It is expected, furthermore, that the £1.2 billion local housing fund will enable councils in England to obtain better-quality temporary accommodation for those owed a homelessness duty, providing a lasting affordable asset. It is expected to provide around 7,000 homes by 2026, to ease local homelessness pressures, reduce spending on unsuitable bed and breakfast accommodation and provide safe and sustainable housing for local communities.
Government amendments 64 to 75 extend the restrictions on re-letting and marketing a property following the use of the moving in and selling grounds to cover licences to occupy as well as tenancies. This will mean that landlords and people acting on their behalf, such as letting agents, will be prohibited from letting or marketing a property as a short-term or holiday let following the use of those grants. I thank my hon. Friend the Member for North Devon (Selaine Saxby) and the hon. Member for North Shropshire for raising this matter in Committee. The change closes a loophole in the no re-letting period and helps to ensure that the balance between long-term and shorter-term lets remains stable.
I turn now to Government amendments to the possession grant, starting with the student market—I know this is an issue close to the heart of my hon. Friend the Member for Loughborough (Jane Hunt). As I have said, in Committee the Government introduced a new ground for evicting full-time students, to maintain a yearly churn of student housing. Since introducing that ground, we have heard concerns that the ground would not apply when students are living in smaller properties or in houses of multiple occupation on individual contracts.
Government amendments 226 to 228 expand the circumstances in which the student ground can be used. Landlords will be able to ensure that properties rented to students, whether they are living individually, in pairs or in larger shared housing, will be vacated in the summer, as long as all the tenants on the tenancy agreement are students. To protect tenants, we have strengthened the requirement for landlords to provide notice to the tenant at the outset of the tenancy that the ground may be used to evict them. Possession will not be possible using this ground unless written notice has been given by the landlord at the beginning of the tenancy.
Government amendment 158 will extend ground 1B to allow social landlords to re-let their property to a different tenant on rent-to-buy terms, protecting the supply of such properties. The grant will be available only after the sitting tenant’s discounted rent period has ended and they have been offered the chance to purchase the property. I thank the National Housing Federation for raising this issue.
Government amendments 175 and 184 insert a new possession ground 5H into schedule 2 to the Housing Act 1988, which will allow private registered providers of social housing and charities to continue to operate schemes sometimes known as stepping-stone accommodation. We are keen to support those schemes, which help those who have struggled to access the private rented sector, and I am grateful to Centrepoint and the Mayor of the West Midlands, Andy Street, for drawing that point to my attention. I thank Andy Street for all he is doing to support such organisations.
Government amendments 198 and 199 and new clause 29 serve to replicate an existing mechanism that allows landlords of qualifying agricultural workers to provide assured shorthold tenancies rather than more secure assured agricultural occupancies. The amendment was the main ask of the Country Land and Business Association and is vital to maintaining the supply of homes for rural workers by protecting the status quo. It will ensure that opted-out agricultural occupancies under the old system will continue to be opted out when they transition to the new tenancy system.
Leaseholders have raised the issue that many leaseholder agreements restrict sub-letting on assured shorthold and fixed-term tenancies. Amendments including Government amendments 160 to 164 and new clause 13 will address that ask by ensuring that sub-leases made under those agreements can continue unabated under the new tenancy system and that new agreements can be made if they were previously permitted. We have drafted the provisions very carefully to ensure that superior landlords and leaseholders have corresponding rights and responsibilities, as they did under the previous system.
Government new clauses 18 to 24 extend to Scotland the provisions outlawing blanket bans on letting to tenants in receipt of benefits or with children, in consultation with the Scottish Government. They do so in a broadly similar way to those in England and Wales, with adjustments to align with the Scottish enforcement framework, demonstrating a cross-nation commitment to tackling discrimination in the private rented sector.
In part 2 of the Bill we have made technical amendments to our redress clauses, including ensuring that the PRS landlord ombudsman can co-operate with other dispute resolution services. The amendments will ensure that the ombudsman operates effectively. Although no final decision on the ombudsman provider has been made, our amendments would also allow the housing ombudsman service to effectively administer private landlord redress alongside social redress.
A key driver in having a single ombudsman to resolve private landlord-tenant disputes is making the service simple to use. I reiterate to hon. Members that the Government are absolutely committed to minimising costs and streamlining new requirements for landlords. Our ambition is that fees for the PRS landlord ombudsman will be low cost and will represent value for money for landlords, similar to those for the housing ombudsman, where membership costs for social landlords were just £5.75 per unit in 2023-24. I also reaffirm our commitment to aligning the ombudsman and property portal, with the ambition being that landlords will need to input their details only once in order to be compliant with both services.
Let me turn to enforcement of the new system. We introduced measures in Committee to ensure that all landlords involved in criminal rent-to-rent arrangements can be held to account, including superior landlords where they are aware of illegal activity. Government new clause 32 ensures that superior landlords are liable for the Housing Act 2004 offences of failing to hold the correct licence for a property. Government new clause 33 seeks to ensure that landlords and superior landlords can, where appropriate, be served with improvement notices requiring the removal of hazards. Those changes close loopholes, ensuring that local councils can continue to hold the correct landlord to account to ensure that their properties are safe and well managed.
Jeff Smith (Manchester, Withington) (Lab)
If the Government are putting all that money in and doing all this planning, why can the Minister still not give us a date for when it will happen?
Jacob Young
As I have just said, we have always been clear that we will abolish section 21 when we are confident that the county court system is ready. I cannot give the hon. Gentleman a date today because I cannot say until we are confident that the county court system is ready, but as I have said, we are investing £1.2 million for HM Courts and Tribunals Service to deliver the new process. It is important for him to recognise that if the court system is not ready when we make this change—the biggest change in 30 years—it will not benefit tenants. It will not benefit landlords, but it will certainly not benefit tenants.
Sir Robert Neill (Bromley and Chislehurst) (Con)
I welcome new clause 30, because the reality is that county courts are already under very great pressure indeed. However, carrying out the assessment will itself bring a cost and, of course, Ministry of Justice budgets are already strained. What steps will be taken to support the Ministry of Justice and the Lord Chancellor with the cost of carrying out that important assessment?
Jacob Young
My hon. and learned Friend is absolutely right. We have committed to making the assessment, so we will ensure that the relevant funding is in place. I have said that we have invested £1.2 million for HM Courts and Tribunals Service to deliver a new end-to-end online possession process, but I am pleased also to confirm to him today that we are investing a further £11 million this financial year to deliver a new digital system.
Mr Betts
The Minister has tried to blame the Levelling Up, Housing and Communities Committee for this delay by saying that we noted that there was a problem in the courts, which would need to be ready to deal with the extra work caused by the abolition of section 21. However, the Government have had five years to sort the courts out and get them working properly. Surely that has been planned for right from the last election. On the Select Committee asking for improvements to the courts, I just point out that we asked for a specialist housing court—a bit like a small claims court—that could process things more quickly. We did not ask for that in our report last year; we asked for it in 2018, and the Government rejected it.
Jacob Young
I think I have been quite clear that it is important that we see that the courts are ready for these reforms. The Under-Secretary of State for Justice, my hon. Friend the Member for Finchley and Golders Green (Mike Freer), is here on the Front Bench with me. He and the MOJ are working at pace to ensure that the courts are ready for the reforms we are introducing. The hon. Member for Sheffield South East (Mr Betts) asks about a specialist housing court. We do not believe that that is the best way to improve the court process for possession—a view shared by the judiciary who responded to our call for evidence.
Neil O’Brien (Harborough) (Con)
The Chair of the Levelling Up, Housing and Communities Committee, the hon. Member for Sheffield South East (Mr Betts), rightly said that this should have happened five years ago, but I gently say that in those five years we have had the coronavirus pandemic, which is the main thing that has slowed down the process of improving the courts. I strongly encourage the Minister not to rush into doing this prematurely, because it would benefit neither tenants nor landlords if he did.
Jacob Young
I do not think that it will surprise you, Madam Deputy Speaker, to learn that I entirely agree with my hon. Friend, whom I thank for making those points.
Government new clause 30 will enable the Government to assess the effect that our new tenancy system is having on county courts before our reforms are rolled out more widely, giving us confidence that the sector is ready. I am happy to share with colleagues that we are exploring whether serious eviction cases, such as for antisocial behaviour, can be prioritised in court listings. We will consult on options following Royal Assent.
Dominic Raab (Esher and Walton) (Con)
I recently met Rentstart, a homelessness organisation with a great track record of working with landlords and getting the homeless into rented accommodation. It is slightly concerned that the changes might undermine its relationship with landlords, which it uses to facilitate the finding of homes for many vulnerable constituents and other people who have come into the constituency. In relation to the assessment that new clause 30 would bring about, what reassurance can the Minister give such organisations?
Jacob Young
The assessment is there purely to determine the timeliness of possession proceedings. In addition, we must acknowledge that there are other barriers to possession, such as the role of local authorities and bailiffs in the process. I hope that that is what the assessment is able to draw out. On Rentstart in my right hon. Friend’s constituency, I do not believe that our reforms will affect its relationships with landlords, but I am more than happy to meet him and Rentstart to understand its concerns more clearly and see if we can do anything to address them.
Government new clause 35 requires the Government to arrange for a review of the new tenancy system, in particular the impact of removing fixed terms and the operation of grounds for possession. That review will be carried out by an independent person, who will produce a report of their findings. The new clause requires the Government to lay the report before Parliament within 18 months of the earliest date on which the new tenancy system is applied to existing tenancies. We recognise that removing fixed terms is a significant change for the sector, and the review will explicitly consider the impact of the change. It will also consider how comprehensive and fair the reformed grounds for possession are, as well as the extent to which they are operating effectively, so that all parties can have confidence in them.
As I have said, the new tenancy system is a huge change for the sector—the biggest in 30 years—and it is right that we commit in legislation to reviewing its impact and implementation, and that we consider whether changes are needed based on real-world evidence. That will ensure that the system works as well as possible for all parties in the long term.
Wera Hobhouse (Bath) (LD)
I have mentioned several times in debate, and in a useful meeting that I had with the Under-Secretary of State for Levelling Up, Housing and Communities, the hon. Member for Kensington (Felicity Buchan), who is here, that there is a need to amend the Protection from Eviction Act 1977 at the same time, because there is a danger that frustrated rogue landlords will refer back to that legislation, which is very badly understood and not well enforced by the police and local authorities. Will the Minister say a few things about that?
Jacob Young
I am more than happy to address those points before the end of the debate, but I think that I have written to the hon. Lady about them. If I have not, I will ensure that I do in order to be clear about the amendments she has tabled.
Government new clause 36 places a duty on the Secretary of State to produce an annual report to Parliament on the stock of residential tenancies in the private rented sector. That report will need to be provided in the five years after the Bill receives Royal Assent. Reports under that duty would cover, but not be limited to, an analysis of the number, location and size of private rented sector properties. The new clause ensures that regular analysis of such information is available for scrutiny and debate.
I am aware that several Members have raised concerns about the interaction between the property portal and the role of selective licensing. The two systems have separate, distinct purposes: the portal will gather data on private rented sector ownership and property standards in England, providing an information source for local authorities to have oversight of the whole private rented sector in their area. It will help landlords to understand their legal obligations and will give tenants the information they need to make informed choices. Meanwhile, selective licensing provides local housing authorities with the powers to license privately rented properties within a designated area to address specific local issues, including poor housing conditions and high levels of antisocial behaviour or crime. While there will be overlap with data gathered through the portal, the information required for licences in these areas will be specific to the issue being tackled and will support more intensive enforcement action in the areas that need it most.
We do not want to see selective licensing abolished, but we do want to ensure that our reforms are streamlined and that burdens are minimised for landlords and local authorities. That is why I am committing to a review of selective licensing and the licensing of houses in multiple occupation to consider how we can reduce burdens and make the system more effective for landlords, tenants and local authorities. I am keen to work closely with Members and the wider sector on this issue, and will provide further details in due course.
I have sat on many Bill Committees in this House, and have now been privileged to lead my first Bill Committee, facing the hon. Member for Greenwich and Woolwich. He has been a great person to work with and has sought at every opportunity to make sure the Bill works and is effective. I said to him in Committee that we would listen to suggestions for how we can improve the Bill, and we are doing so today. For tenants, we are expanding the homelessness prevention grant and closing loopholes in the system; for landlords, we are introducing an initial six-month tenancy and giving them certainty that our reforms will work. The Bill delivers on our manifesto commitments: it gives tenants security and landlords fairness. Our amendments continue to strike that balance, and I commend them to the House.
Madam Deputy Speaker (Dame Rosie Winterton)
Before I call the shadow Minister, I remind colleagues that if they wish to intervene on a speech, it is important that they have been in the Chamber since the beginning of the speech, just in case the important point they wish to raise has already been addressed. It is also important that they stay for the duration of the speech, in case other colleagues then refer to the important point that they have raised. I clarify that because we may have a longer speech from the shadow Minister, and people may wish to intervene, so I thought it would be helpful to remind colleagues of those rules.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
I rise on behalf of the Opposition to speak to the new clauses and amendments that stand in my name.
It is a pleasure to finally be back in the Chamber to conclude the remaining stages of this important piece of legislation. I say “finally” because as you will know, Madam Deputy Speaker, the Bill left Committee on 28 November last year—almost five months ago. Indeed, such has been the delay in bringing it back to the House that in the intervening 147 days, the Department even managed to complete all the Commons stages of another piece of housing legislation—albeit a distinctly limited and unambitious one—in the form of the Leasehold and Freehold Reform Bill.
The reason for the delay is, of course, an open secret, with the ongoing resistance to the legislation from scores of Government Members—including many with relevant interests, as private renters across the country have certainly noted—and the undignified wrangling between them and Ministers splashed across the papers for months. The damage caused by the discord on the Government Benches has been significant: not only have thousands of additional private renters been put at risk of homelessness as a result of being served a section 21 notice in the months for which the Bill’s remaining stages have been delayed; the sector as a whole has been left in limbo, not knowing whether the Bill will proceed at all and, if it does, what form it will take.
Richard Graham (Gloucester) (Con)
The hon. Member is making an interesting point about uncertainty. I understand where he is coming from, and many of us on this side would very much like to see section 21 abolition implemented as soon as possible. Does he, however, accept that there is another uncertainty, which is that if the court system is not working adequately, the amount of private housing stock available for many of our constituents who need it badly could easily shrink fast, as indeed I believe has happened in Scotland? That would be a much greater risk than not laying out at this stage the precise date at which section 21 abolition will be fully implemented.
Matthew Pennycook
I would say two things to the hon. Gentleman, who makes a valid point. First, the Government have had five years, since they first made the commitment to abolish section 21, to get the courts fit for purpose, and they have not done so. Indeed, the timescales for both possession and litigation have remained essentially unchanged since 2019, so there has been no progress in those five years. The actual process of possession proceedings is also probably one of the more efficient aspects of the county court system. We heard extensive evidence in Committee about the fact that the system is essentially working fairly well and is recovering well from covid, and that these changes would not be significant enough to delay the implementation. Even if that were not the case, I would say to him that we should have clarity about precisely what are the improvements the Government think are necessary. Let us have metrics and let us have timelines, and then we can have an open and transparent conversation about precisely what “ready” means. At the moment, we are entirely in the dark.
We will remain in the dark even if Government new clause 30 is incorporated into the Bill, because it will merely require the Lord Chancellor to publish an assessment of the operation of the county court possession order process in England and its enforcement before the extended application date can be set for chapter 1 of part 1 of the Bill. There is no timescale in which that required assessment needs to be published, and there is nothing that specifies the metrics against which the Lord Chancellor would judge the readiness of the court system. There are no corresponding obligations imposed on the Secretary of State, so if a future Lord Chancellor assesses that funding or other specific measures are required to make the courts ready for the new system, there is nothing to compel the Government of the day to implement them. Even if a future Lord Chancellor were to assess that the courts were more than ready, it remains for the Secretary of State to determine whether they wish to make the relevant commencement order, even if clause 116 is amended by Government new clauses 27 and 28.
Sir Robert Neill
Like my hon. Friend the Member for Gloucester (Richard Graham), I understand where the hon. Gentleman is coming from, and I do not have a problem with the abolition of section 21 no-fault evictions. However, as a south-east London MP, he will know that the reality is that the county courts face enormous pressure, particularly in our part of the world. I hope that, before hon. Members perhaps criticise the Government too much, they will talk to their own local county courts, because the data is suggesting that, on average, we could be looking at about 55 weeks from the commencement of a possession claim until the decision is made, and on top of that we have the enforcement period. That is not acceptable, and I want it to be quicker, but we need to accept, therefore, as the Association of His Majesty’s District Judges has pointed out—and I have to say to hon. Members that the data the Justice Committee has is the most accurate—that there has been underfunding of the county courts for many years. Frankly, that has been under Governments of both parties, because I can remember when I was in practice and the hon. Gentleman’s party was in government, and there was underfunding of the county courts then as well. We all have to take our share of responsibility for that, rather than making it a matter of party controversy.
Matthew Pennycook
I thank the hon. and learned Gentleman for that point. We all want the processes to be quicker—I do not think that is in dispute at all—and they certainly could be made quicker. Landlords need robust grounds for possessions in legitimate circumstances, and they need the system to operate quickly when they do. The question for us today is: should we essentially put the abolition of section 21 on hold until we have reassurance about an undefined amount of improvement and if we do not know when that is going to be delivered?
Feryal Clark
All I have heard is about the importance of ensuring that the courts are functioning quickly enough to enable landlords to evict the tenants they want to evict, but currently renters have just over a month before they are evicted. I had a constituent who lost his son in the most horrific of circumstances—it was in the local papers—whose family was served a section 21 notice. The landlord knew the family had lost a child, but said they had to serve it because the family still had a month and they needed to get them to leave. Where is the protection for renters, and does my hon. Friend agree that kicking abolition of section 21 notices into the long grass means the Government do not care about renters at all?
Matthew Pennycook
My hon. Friend is right to highlight the impact on renters, and that is essentially what we are debating. With every month that passes, more private renters are served section 21 notices. Nearly 85,000 of them have been put at risk of homelessness as a result of being served one of those notices, as the Government have delayed the implementation of their commitment. As the Bill is drafted—even with Government new clause 30—Ministers can determine whenever they want to signal to the House that the courts are ready. We have had no assurances on that point, and that is not satisfactory.
In our view, Government new clause 30 is nothing more than a mechanism designed to facilitate the further delay of the complete abolition of section 21 evictions, and we will look to vote against it. With the Government having previously made it clear that there will be a requirement for advance notice of six months before new tenancies are converted, and a minimum of 12 months between that conversion and the transition of existing tenancies—with a proposal that the latter will also be made subject to the assessment required by Government new clause 30—it could be years before renters see section 21 completely abolished, making a complete mockery of the Secretary of State’s recent claim that such notices will be “outlawed” by the next general election.
We know the Government are in no rush to abolish section 21 evictions because they are not laying the groundwork that is necessary for that to happen. Where are the draft prescribed forms for section 8 notices, and where are the proposed amended court forms and civil procedure rules? There is no sign of them, or of any sense of what the regulations required to bring them forward might be. The truth is that Ministers determined long ago, for reasons that are entirely obvious, to essentially kick the can down the road on abolishing section 21 while disingenuously denying it. Although the passage of the Bill will be taken as a signal of abolition before the next general election, private renters outside will know that is not the case, and that implementation has been pushed back, potentially indefinitely.
We believe that hard-pressed renters have waited long enough for the commitment made by the Conservatives over five years ago to be delivered. They require certainty that it will truly be honoured, and section 21 evictions definitively abolished with the passing of this legislation. Our amendment 28 would provide that certainty by ensuring that section 21 of the Housing Act 1988 is repealed on the day that the Bill receives Royal Assent, with saving provisions for any notices served before that date so that they remain valid and of lawful effect. I commend the amendment to the House.
Government new clauses 27, 28 and 30, to which I have made reference, are only three of the 225 Government amendment tabled just before the deadline last week. Before concluding, I will touch briefly on several of the more substantive among them, starting with the small number that will be genuine improvements to the Bill. We are pleased that the Government have responded to our calls to ensure the maintenance of a number of the regulatory obligations that have built up around section 21 notices over the years by tabling Government new clause 14, which gives the Secretary of State the power by regulation to transpose those preconditions and requirements into section 8 eviction notices.
Tim Loughton (East Worthing and Shoreham) (Con)
There are many amendments on which I could speak—indeed, the book of amendments seems to be almost as long, if not longer than the Bill itself—but I will limit myself to new clause 12, which I have tabled in my name and those of hon. Friends and colleagues, and on which amendments 44 to 47 are contingent. First, I declare my interest in the Register of Members’ Financial Interests as chair of the quality and safeguarding board for a children’s company.
New clause 12 goes to the heart of my interests, as it deals with care-experienced children. Essentially, its purpose is to ensure that landlords do not discriminate against people who have grown up in the care system when making a decision on whom to rent a property to. It would place a specific duty on landlords, preventing them from denying those who have grown up in the care system a tenancy on that basis. Landlords found to be in breach of the new clause could be subject to penalties. That is the thrust of what I am trying to achieve, and it might strike a chord with many colleagues here.
Some may remember a recent case that highlighted the potential problem. The Guinness housing trust, in advertising a property for rent, specifically said that it was not available to care leavers. That was an extraordinary piece of discrimination, redolent of the bad old days when people put up signs saying, “No dogs, no Irish, no blacks”, if we can remember back that far. In that recent case, there was potential discrimination against young people who, through no fault of their own, had been through the care system. Guinness fortunately withdrew that straight away and apologised, but the case reinforced the vulnerabilities of some of the most vulnerable young people in our society when trying to get the most basic of daily requirements: a roof over their head. That is what is behind the new clause.
I thank the coalition of various charities and organisations that have done a lot of the heavy lifting on this issue, led by Barnardo’s and the charity for care-experienced young people, Become, as well as others. Let me say at the outset that new clause 12 is a probing amendment, and I am grateful for the positive engagement I have had from the Minister already. I am wholly optimistic that he will say some helpful and constructive things when he comes to respond. I will flesh out why this is an important amendment to this important Bill, in which I fully admit there are many other priorities.
As you know, Madam Deputy Speaker, I have a long-standing interest in championing care-experienced young people, whether formerly as Children’s Minister or now as the chair of the all-party parliamentary group for children and vice-chair of the all-party parliamentary group for care-experienced children and young people. Why do we need to do more to support care leavers when accessing accommodation in the private rented sector? It is imperative first for us to consider the bigger picture with the issues that our young people leaving care face. More than 85,000 children and young people are in the care system in England, which is a recent high. Every year, more than 12,000 of them leave that care system. We all know that unfortunately, despite all the best efforts and endeavours of successive Governments and Ministers, care leavers still have much poorer outcomes than their peers. They are less likely to gain good qualifications in the education system. Nearly half of the children in the care system have a mental health problem, and it is estimated that a quarter of homeless people have been in care at some point in their lives. They are also disproportionately represented in the justice system and make up over a quarter of serving prisoners.
From the age of 18, care-experienced young people are often expected to be financially independent and manage their own household bills, but research over many decades has shown that care leavers are much more financially vulnerable than their peers. A significant number live on or near the poverty line and struggle to make ends meet. [Interruption.] I am being echoed; as if Members cannot get enough of me once, they are now getting it in stereo with a time delay.
While inflation is beginning to come down, certain sectors continue to see large price increases, including the private rented sector. Private rental prices paid by tenants in the UK rose by some 6.2% in the 12 months to January this year, unchanged for the second consecutive month, and that puts huge pressure on all tenants. Young care leavers living independently at the age of just 18 have no support from the bank of mum and dad, and for them things can be especially tough.
Jeremy Corbyn (Islington North) (Ind)
The Member is making a very important and excellent point about care leavers. Does he agree that one of the problems is that on reaching the age of 18 they are deemed to be able to be independent but they have no support network in the way other young people of 18 often do, and therefore while they are getting housing support they might not be getting the necessary emotional and advice support that all other 18-year-olds get and benefit from? There is therefore a need for some sort of arrangement to ensure there is a continued level of support well after the age of 18, if the individual young person actually wants that.
Tim Loughton
I agree with the right hon. Gentleman up to a point, and of course young people do not magically become much more self-sustainable and resilient the day after their 18th birthday, but there have been many improvements over the years. There is extended support for care leavers up to the age of 25, and there are arrangements whereby they can still have a relationship, including a financial relationship, for example with foster carers, through the “staying put” scheme the Government have come up with, and many charities and organisations do very good work in providing support, but the point the right hon. Gentleman makes is right. Most of us are lucky enough to be able to go running back home to birth families for help and support in difficult times, but that is not always available to young people in the care system, although many do have the continual support of good quality foster carers and other carers they relied on when they were under the age of 18. However, they are vulnerable, and ensuring these young people have a safe and stable home to start their adult lives is really crucial.
Housing can act as a vehicle for stability, and without access to good quality accommodation young people will face challenges in getting a job, staying in education and ongoing training, accessing health services and everything else. However, despite the key role housing can play in helping a young person transitioning to independent living, many care leavers are struggling to find suitable accommodation in those early years after leaving care. It is estimated that one in three care leavers become homeless in the first two years immediately after they leave care, and one in four homeless people have been in care at some point in their lives, as I mentioned earlier.
Young care leavers face many barriers in accessing appropriate accommodation, and many will not be able to be addressed in this Bill. However, it does offer an opportunity to address one of those barriers: that landlords sometimes feel reluctant to rent to young people who have grown up in the care system. Young people in care tell charitable organisations in the youth sector that they come across landlords who are reluctant to rent to them because of their circumstances, and evidence from a survey of care leavers carried out by the charity Centrepoint found that over one in 10—some 13%—said they had been unable to access accommodation because the landlord was unwilling to accommodate them because of their status. That is not fair.
The problem is also likely to get worse given the growing evidence of a reduction in the number of private rental properties available across England. An investigation by the BBC found the number of properties available to rent across the whole of the UK had fallen by a third in the 18 months up to March 2023, and increased competition for the properties that are available has enabled more landlords to pick and choose which tenants they like, often going for the highest bidder, which of course makes it especially challenging for vulnerable groups such as care leavers.
In the last few years Barnardo’s has been running a campaign to try and improve access to suitable accommodation for care leavers. I certainly support the campaign, which calls on all local authorities to offer rent guarantor and deposit schemes for care leavers seeking to rent in the private rented sector. The MacAlister report on children in social care, which the Government commissioned and which was published last year, made a recommendation that being a care-experienced child should be a protected characteristic. So far in excess of 60 local authorities, including my own in West Sussex, have voluntarily acknowledged that, although the Government have not made it a statutory addition at this stage. So some local authorities are already providing help to care leavers, with deposits or a scheme where they can act as a corporate guarantor.
Such schemes greatly help make care-experienced young people more attractive tenants, and a number of local authorities report that such schemes have had significant successes. The scheme operated by Kent County Council has had no rent defaults from when it started in 2018 until 2021; however, such schemes are not offered by most local authorities. A freedom of information request by the Care Leaver Local Offer website to the 151 local authorities in England with a children’s social care department showed that 60% will not act as a guarantor for care leavers.
Several hon. Members rose—
Madam Deputy Speaker (Dame Rosie Winterton)
Order. Before I call the next speaker, I inform the House that I will be giving priority to those Members who have amendments down, so that they can speak to them before we hear from others. I call Chair of the Levelling Up, Housing and Communities Committee, Clive Betts.
Mr Betts
It is disappointing that we are having to focus primarily on the Government back-pedalling on the timetable for the abolition of section 21. The Levelling Up, Housing and Communities Committee looked at this a year ago and concluded unanimously that the principle of the Government’s intention was right. We had some reservations and caveats, and we raised concerns and suggested detail changes, but nevertheless we agreed on the principle. Generally speaking, there is agreement across the House that it is the right thing to do.
In the meantime, people are living in uncertainty in private rented housing. That is why we thought it was the right thing to do. That is what the measure is for: to give people greater certainty about where they will be living in a year’s time. It is not merely that; it is also so that they know, if they do not have a car, that they can get on the bus to their place of work in the morning—if the landlord evicts them and they have to move home, will they be able to get to that job in the future? It is also about children at school: will those children be able to get to the same school if they are evicted from their home and have to find a new property? That is the sort of family certainty that the abolition of section 21 will introduce. So many families are living in uncertainty—not just housing uncertainty but other uncertainty—while we await that abolition. The Minister needs to get on with it and give us some clear time commitments on when it will happen.
We have just discussed the problem of the courts. Of course, covid has affected lots of public services, but I say to the Minister that it is not a surprise. If we look at how long it was taking local authorities to get court hearings to deal with antisocial behaviour cases before covid, we see even then that those ran into months. It has been a problem in the courts for many years. That is why the Committee has suggested—it has been suggested before—a housing court system. I know that Ministers do not want it and that the Ministry of Justice does not want it, but it seemed to us a way of resolving what are often simple or quick problems. A small claims court format could do it in many cases without the need for lawyers to be introduced. I am sorry, but I have no conviction that, with several months of looking at this, several years of contemplation and plans for action, the courts will be any quicker in two or three years than they are now. The court system has delays, and they are likely to remain, so we need to look a bit beyond the existing system to resolve these problems. Obviously, Ministers have set their minds against that.
I turn to the other main problem that we highlighted on implementation: local authorities and their staff. We know that local authorities are desperately short of staff for enforcement in the private rented sector. Once section 21 goes, tenants who are currently frightened—even those living in appalling damp properties—to make complaints against their landlords, because they are concerned they would be evicted as soon as a complaint is made, will feel emboldened to make that complaint, and if their complaint is not listened to, they will be emboldened to go to their local authority and ask for help. Local authorities will get more requests for help, and they have not got the people to deal with that.
Will the Minister assure us that he is starting to talk to the Local Government Association about the new burdens that will be placed on local authorities—this is a new burden that we are imposing on them, albeit a good one—and that there is some agreement on the resource that will be needed? Resources do not produce extra staff overnight, so local authorities will need advance warning so that we have the staff in place to respond quickly.
Anthony Mangnall (Totnes) (Con)
I apologise for interrupting the hon. Gentleman. Given the important point he is making about redress for tenants and who they might go to, would he add any comment on consumer protection for unfair trading, which is one of the remedies for those who have difficulties with either the standard and quality of their property or the landlord, as well as those who have been mis-sold for a rental period?
Mr Betts
I think the reality is that local authorities are generally short of resources right through, as the Committee’s recent report on local authority funding—again, it was unanimously agreed—showed. Because of the demands of social care on local authority budgets, other services are often cut even more than the mainstream. We have previously looked at trading standards and consumer protection, which are an important element—the hon. Member is absolutely right—and I hope that they will be factored in when we have the new burdens discussions.
There are some things that the Minister could resolve fairly quickly. He referred to the important role that the ombudsman can play in resolving disputes. There is sometimes a bit of a conflict between whether someone goes to the ombudsman or to the courts—sometimes, the ombudsman will not deal with a case if it is in the courts. It would be helpful to clarify those issues. But why does he not just decide that the housing ombudsman, who currently deals with social housing issues, will also deal with private sector housing? He should make that decision. Again, if the ombudsman is to have that responsibility, it needs to gear up by starting to recruit more staff and getting in resources to be able to do it. It is a simple decision. He has not ruled it out, but he has not ruled it in. Can we not just do it? It seems obvious. Why set up another body, which would have to start from scratch, when the ombudsman has the skills to do it? Those skills are slightly different in some cases, but why not let it get on with that, and tell it now that it will have that job to do?
I have a couple of other points. The property portal is a really welcome development. We know that when someone is trying to track down a landlord—it is often a local authority, which wants to serve a notice on them—suddenly, the ownership of the property moves, and a different member of the family becomes an owner, or a different company is set up. To know who owns the property, information will have to be given to the property portal, along with all other information about the property. That is a really important step forward, as well as making sure that the portals are digitised so that the information can be kept up to date simply.
I welcome the Minister saying that selective licensing and the property portal are not the same thing, with the property portal to be there for all properties. Selective licensing—it is in the name—will be there for some properties. When there is a review of selective licensing and the relationship with the property portal, will the proposals come back to the House for consideration at some point? I want reassurance on that. Many of us support selective licensing, which we see operating against the worst landlords and the worst properties, and we hope that there will not be a diminution of those powers and responsibilities that would weaken what it can achieve.
Jacob Young
I can certainly commit to working with the hon. Member and his Committee when we are at the point of making a decision on where we go after such a review. I completely agree that selective licensing has its role—it is not overtaken by the property portal—but we must ensure that the two work together.
Mr Betts
That is a helpful assurance, which I accept, and I think he has already given assurance of similar collaboration on the decent homes standard, which is appreciated.
Finally, I come specifically to some complicated amendments that I have tabled—I admit that they even confuse me on occasions—which are about the powers that social landlords have when they come to regenerate areas. The Committee has heard some pretty awful examples of poor properties in the social housing sector, and we have been critical. However, often it is not an individual property that is the problem, but properties in deck-access blocks built in the ’60s, ’70s or ’80s. The property has reached the end of its life and people do not like living there: it might have damp or other problems, such as antisocial behaviour. The management costs are high and the cost of regeneration, making it fit for purpose and bringing it up to decent homes standards, is so great that it is not worth spending the money. In some cases demolition and rebuild is needed, and in others substantial regeneration and improvement is needed, and that means the tenants have to move out.
In those cases, social landlords need to be certain that they have the power to require tenants to move, because in a block of properties of 100 residents, 95 of them will probably be terribly enthusiastic about moving out, particularly if they are going to get a new or refurbished home, but the other five might dig their heels in and try to stick it out, holding up the whole scheme. The Minister believes that social landlords have the power to do that under existing legislation. I have tabled amendment 52 and the related amendments because the National Housing Federation is concerned that social landlords think they have powers, but they do not exist where the initial tenancy with their secure tenant was set up by a nomination from a local authority. It is a complicated legal issue, but an important one.
Jacob Young
The hon. Gentleman makes legitimate points, and I am more than happy to meet him and the National Housing Federation.
Mrs Natalie Elphicke (Dover) (Con)
I am very pleased to follow the Chair of the Levelling Up, Housing and Communities Committee, on which I sit. He expressed very well the importance of the section 21 reforms, in particular to families and to renters who are so reliant on them.
My view is that the Bill does not go far enough in dealing with the fundamental challenges of the private rented sector, which is no longer a flex or transitionary tenure but the main tenure for millions of people for much, if not all, of their lives. There has been a long-term structural shift away from social renting and home ownership into an expanded private rented sector. That shift needs to be addressed by building more homes—affordable homes and for first-time buyers—and by finding a new balance that reflects the new reality for millions of people in our country.
Sadly, the original principle of the Bill, which was to create a fair and responsible new rented sector, has been undermined by the Government’s amendments. That change of position undermines not just the Bill but the very manifesto commitment on which the Conservative Government were elected in 2019.
Turning to the amendments and new clauses that stand in my name, new clause 39 would require a landlord to make a relocation payment to the tenant if the tenant is evicted within two years of the start of the tenancy, other than on exempted grounds such as antisocial or criminal behaviour. Evidence from Shelter and Generation Rent shows that unrecoverable costs—the wasted cost to the renter of an unwanted move—can be between £700 and £1,700. My new clause proposes that a payment would be made by the landlord in recognition of those unrecoverable costs to the tenant. Being evicted places a great emotional strain on tenants, who find themselves in insecure housing. It should not place them under a financial strain as well.
Amendment 257 would amend ground 12—possession due to a failure to carry out an obligation of the tenancy—in schedule 2 to the Housing Act 1988, setting out the grounds for possession. That provision will gain much greater importance following these changes, for it is the catch-all provision for evictions. The amendment is intended to address the risk of being served a notice for eviction for trivial matters, such as hanging up washing outside, displaying a poster on a wall, or a teenager putting up a poster with Blu Tack. Those are real examples written into existing tenancy agreements by letting agencies that are members of their relevant professional bodies. Amendment 257 would provide that ground 12 could be used only for material breaches, not for Blu Tack.
The Minister has written to me to say that there were landlords who wanted to make the ground 12 position mandatory. These are landlords who want to be able to serve notice and evict tenants for using Blu Tack. In my book, if you are to lose your home it should be for a serious reason, not for Blu Tack or hanging the washing outside or any other trivial thing. All the more so, because we know that the majority of evictions take place when notices are given to the tenant without court applications, let alone court repossession orders.
The Law Society has raised the issue of the scarcity of legal advice available to tenants across the country. We have heard already today that the Government have not yet produced even working drafts of what the new forms might be for the new eviction grounds. That also matters, because at the moment the court forms require the ground to be set out in the document. They do not require, for example, for that to specify whether it is in fact a discretionary or other ground for the courts. So this does impact directly on tenants’ understanding and ability to challenge their potential eviction. As such, the Government’s position, which is to allow ground 12—the Blu Tack ground—unamended, is to invite every landlord to invoke spurious and unfair reasons for evictions. This is apparently not the intent of the Bill. I am grateful to the Minister for his engagement with me on that ground. I ask him to reconsider that position and see what more can be done to ensure that ground 12 applies only in relation to serious matters. That seems much more reasonable, and fair to landlords and tenants alike.
On Government new clause 30, when I spoke to major landlords recently, they confirmed that they are not yet ready to digitise. They are not yet ready to put in place and work with the very provisions for which they have so strongly advocated. I understand that it might take some more than two years to put their own systems in place to engage with the new measures they have asked for. Meanwhile, and after all this time—nearly five years—the Government have no detailed plans about what these court changes might be. In November, in Committee, the Minister denied that this was a delaying tactic. However, since then the Ministry of Justice has published its digitisation and reform programme all the way through to 2025. There is absolutely no reference—not even an indicative reference—to this reform programme relating to repossessions. I asked the House of Commons Library for assistance, but it too has been unable to find any specific reference to the changes that may come up in the court process. So I am afraid that the truth is that new clause 30 is a delaying tactic to benefit landlords.
As has been mentioned, the Levelling Up, Housing and Communities Committee has written to the Minister on the implementation of these measures. It has been noted by the Committee that court guidance is already in place to deal with repossession claims in a timely manner. They are contained already in civil procedure rules 55.5. Of course, the courts can always be improved—indeed, it is most welcome that there is a commitment that they should be so—but it should be noted that the Ministry of Justice’s data shows that last year the target set out for repossession has, in fact, been met. The courts’ performance in landlord repossession cases stands in marked contrast, in the recovery since covid, to many other court backlogs.
That was confirmed in written evidence to the Justice Committee. I am grateful to the Chair of the Justice Committee, my hon. and learned Friend the Member for Bromley and Chislehurst (Sir Robert Neill)—he is not currently in his place—for whom I have the greatest respect. I note that in the written evidence to that Committee, the MOJ confirmed, just in September, that 95% of courts were meeting that target. I understand that the much larger number of weeks to which my hon. and learned Friend referred may relate to personal injury and other matters that were brought before the Committee, but I will discuss that with him later, given that he is not currently in the Chamber.
These are important reforms and it is important for the court processes to work in the right way, but they are working within their current targets, in marked contrast to other court backlogs. That is why new clause 30 is not necessary, and is properly considered to be a delaying tactic.
This is a Bill that the 2019 Conservative manifesto promised would benefit tenants, but it has become a Bill in which the balance too often favours the landlords, particularly if it includes new clause 30, which could indefinitely delay the abolition of section 21 no-fault evictions. That would be nothing short of a betrayal of the promise that was made in 2019, and for that reason I am unable to support the new clause.
Munira Wilson (Twickenham) (LD)
I am delighted to speak about this important Bill on behalf of my hon. Friend the Member for North Shropshire (Helen Morgan), who unfortunately could not be here today but who has done a huge amount of work on it, including her work in Committee. I thank the Minister for his comments about her, and for the constructive way in which he has worked with her throughout the Bill’s passage so far on specific amendments, some of which I will discuss in due course.
The Liberal Democrats support the Bill in principle because we want to ensure that the private rental market is fair for all, and we have long called for section 21 no-fault evictions to be scrapped. Barely a week goes by when I, a London MP, do not hear from yet another family who are being turfed out of their home for spurious reasons under section 21. I am sorry to say that, as many others have pointed out, the Government have been far too slow in introducing these measures. They have been dragged into it kicking and screaming at every turn, and having made the commitment five years ago and having had plenty of legislative time available in the last and current Sessions, they have delayed and delayed. Meanwhile, a cost of living crisis has meant even more people becoming homeless, and rising pressures on councils that are having to pay for emergency accommodation.
Amendment 3, tabled by my hon. Friend the Member for North Shropshire, would increase the time that must elapse between a landlord’s taking ownership of a property and making the property available for rent to six months, from the currently proposed three. This six-month period is designed to act as a more effective deterrent for landlords wishing to evict tenants in order to remarket a property quickly, or “flip” it into a holiday let. I note that a similar amendment tabled by the Opposition would extend the time to 12 months. The Liberal Democrats believe that would risk driving landlords from the market, and that six months strikes the right balance between protecting tenants from sharp practice and not driving reputable landlords away.
“Flipping”, or quickly remarketing property for holiday letting, has caused serious injustice in some of the most beautiful places in the country, such as Cumbria. Local people living in tourist hotspots often struggle to afford a home in their area because of the rapid increase in the number of properties taken out of residential let and used solely as short-term holiday lets. That has a knock-on impact in terms of workforce pressures, especially in the hospitality and care sectors. Of course there needs to be some holiday accommodation in beautiful areas that benefit economically from attracting tourism, but we must find a balance between holiday and private rented sector accommodation.
I am grateful to the Government for accepting that point and working constructively with the Liberal Democrats by tabling amendment 66. Although their amendment does not go quite as far as we would have liked and include a six-month restricted period, it will ensure that landlords cannot remarket a property as a short-term or holiday let within three months of purchase. That is a much-needed step towards levelling the playing field in the housing market for local people in tourist hotspots and helping local economies and communities to thrive.
Amendment 37, which was tabled by my hon. Friend the Member for North Shropshire, would ensure that accommodation rented from the Defence Infrastructure Organisation by service individuals and their families is subject to the decent homes standard. Servicemen and women are housed in accommodation rented from the DIO, which is currently not subject to a minimum standard. This means that individuals who have put their lives on the line for our country are not necessarily guaranteed a warm and safe place to live in return. Across the country, and specifically at RAF Shawbury and Tern Hill barracks in north Shropshire, there have been reports of service family accommodation being plagued by black mould, rat infestations and chronic overcrowding. That is no way to treat people who have put their lives on the line to serve this country. Frankly, they deserve better.
Several hon. Members rose—
Madam Deputy Speaker (Dame Eleanor Laing)
Order. Before I call the next hon. Member speaks, I have now to announce the result of today’s deferred Division on the draft Economic Growth (Regulatory Functions) (Amendment) Order 2024. The Ayes were 395 and the Noes were 50, so the Ayes have it.
[The Division list is published at the end of today’s debates.]
Anthony Mangnall
I rise to speak to the amendments that stand in my name, as well as on a number of Government amendments. I feel that I should start by thanking both the Minister and the shadow Minister for their conversations over the last five months on this topic.
I should be clear about my position in leading a number of amendments to the Bill. At no point have we ever sought to stop section 21 coming in, and I hope that I will be able to make that clear in the course of my remarks. What we have sought to do is to stop the ending of fixed-term tenancies—something I believe would have a dramatic impact on the supply of properties, including long-term rental properties. That, to me, is the concern. I believe that it will cause far greater upset in the short and long term in respect of whether people can have the houses that they need.
Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)
In rural areas such as mine where housing is already very expensive, more and more landlords are already deciding that letting their properties out is not worth the candle. They will therefore sell them, and the effect will be that there are fewer and fewer properties to rent. Those that are available will therefore go up and up in price and our youngsters will struggle to get on to the rental ladder.
Anthony Mangnall
I thank my hon. Friend for making that point. It is one that I will come on to, in terms of both the impact that the Bill will have on the attractiveness of short-term lets and the bureaucracy and hassle that will arise from this legislation.
From the outset of the Bill’s arrival in Parliament, I have worked to ensure that it strikes the right balance between tenant and landlord—a balance that ensures that the rights of tenants are respected and enshrined in legislation while the rights of landlords, property ownership and contract law are maintained and safeguarded. I believe that a failure to strike that balance would have a disastrous impact on the private rental market in the United Kingdom. Complicating the rental market with onerous requests, bureaucratic measures, additional costs and an inability for people to operate their personal property as they wish would only result in large swathes of the private rented sector throwing up their hands and selling their properties, just as a failure to support tenants would only embolden rogue landlords, diminish standards and increase unfair treatment.
From the start, it has been my mission to find a level playing field that ensures that tenants and landlords can co-operate together in a fair market that has a healthy supply of rental properties, with rights and standards enshrined, costs low and bureaucracy minimal, in a system that respects the rule of law and, perhaps most importantly, has a structure and a court system that is effective and that delivers. All of this has been done because we are in the midst of a supply crisis in the private rented sector, on which we have yet to touch.
On average, 25 prospective tenants inquire about every available rental property, up from eight in 2019, according to Rightmove. Hamptons estimates that between 2016 and the end of 2023, individual landlords sold almost 300,000 more homes than they bought. Last year, the Bank of England warned that demand for rental properties continued to outstrip supply as the number of landlords choosing to exit the market increased. It is therefore vital that responsible landlords have confidence that pragmatic changes are being made to the Bill. Failure to do so would only deepen the crisis.
I have said previously that the failure to have a sensible rental period at the start of a tenancy would likely result in the flourishing of long-term rental properties being used as short-term lets. Given the substantial price difference between short-term lets and long-term lets in constituencies like mine and the constituencies of the hon. Members for North Shropshire (Helen Morgan) and for Westmorland and Lonsdale (Tim Farron), there would be a very real likelihood of people exploiting that loophole.
Landlords incur costs and expenses when entering into a tenancy, and they need the certainty of a minimum period. Many buy-to-let mortgage lenders also require a minimum six-month tenancy agreement when lending to residential landlords. As a result, I tabled amendment 6 with the support of 58 colleagues to ensure that tenants cannot give two months’ notice to leave a property until they have resided in it for four months. I believe that this is in line with the recommendations of the Levelling Up, Housing and Communities Committee. I therefore welcome that the Government have accepted this argument and tabled new clause 15, which mirrors amendment 6. I will therefore not press my amendment.
Matthew Pennycook
I wonder whether I can tease out the hon. Gentleman’s reasoning in thinking that the possibility of rental properties being used as short-term lets is so serious. It is an entirely hypothetical problem. Renters who take out a tenancy agreement will have to provide a five-week deposit—they will probably be charged the maximum—and they have to go through a lengthy process to try to get that deposit back. What evidence does he have to suggest that, en masse, tenants will try to game the system in the way he expects?
Anthony Mangnall
With the greatest of respect, I am saying that that is one of the reasons why I fear not having a minimum notice period. My constituency has the highest number of second homes and short-term lets of almost anywhere in the country. There is a significant price differential, and a significant amount of hassle is being heaped on landlords by this Bill, which might push them in that direction. This may be one of the foreseeable consequences. I have raised it on Second Reading and in private conversations with the hon. Gentleman.
New clause 2, on rent repayment orders, would enable local housing authorities to impose financial penalties on certain individuals where they believe that a housing offence has been committed by a body corporate. Last year, the Supreme Court delivered a landmark ruling in which it said that, where a rent-to-rent company takes over the running of a property, it cannot pass its legal liabilities on to the property’s landlord. The Government have amended the Bill to reverse that decision, which will mean that landlords can be fined even in cases where a rent-to-rent company or similar has, without the landlord’s knowledge, been asked by a tenant to illegally sub-let a property. According to data from Direct Line, one in 10 renters admits to sub-letting part of the home in which they live, of whom 48% did not disclose it to their landlord and three quarters did not review their existing lease agreement to determine whether sub-letting was permitted. The amendment would deal with the main concern associated with the use of rent-to-rent companies. It would address the problem of landlords and others who willingly hide behind such companies to let properties while avoiding liability for rent repayment orders, without penalising those who are innocent victims of such companies. I welcome and recognise the fact that the Government have seen sense and tabled their own amendment, mirroring my proposed new clause 2, in the form of proposed Government new clause 34. I therefore withdraw proposed new clause 2.
Jacob Young
As I said in my opening speech, we are exploring expediting possession for serious antisocial behaviour claims. I am happy to work with my hon. Friend on how we go about that and ensure that it happens before these reforms are fully implemented.
Anthony Mangnall
The Minister will find in this part of my speech we will be agreeing vehemently, although the latter part of my speech might not be so agreeable. I am grateful to him for his intervention; I always welcome the opportunity to work with him.
Likewise, in the case of rent arrears, it cannot be acceptable to have a system that allows rent arrears to continue to build for seven months. The amendment would make good on the Government’s commitment that the justice system is fully prepared for the impact of the end of section 21. Again, I am grateful that the Government have decided to accept the point in principle and introduce proposed Government new clause 30, which mirrors my amendment 9, which was supported by so many colleagues. I therefore withdraw amendment 9.
Proposed new clause 1, the repeal of requirement for selective licensing, under my name, would remove the ability of local housing authorities to designate areas as subject to selective licensing. The Bill provides the Secretary of State with the power to develop a new property portal that all landlords would have to join to demonstrate to prospective tenants that the properties they rent meet all required standards. It would be effectively a national licensing scheme. As selective licensing deals only with management quality and not property standards, the changes in the Bill are likely to do more than selective licensing to improve properties.
Since councils will be able to use the portal to access information on all private rented properties and landlords operating in their area, and in view of plans for a decent homes standard for the sector, local selective licensing schemes will be made redundant. In Wales, the introduction of landlord registration led to the end of almost all selective licensing, so it is unlikely that local authorities would pursue costly and complex schemes in future. I take on board the Minister’s comments in his opening remarks.
Selective licensing is an additional cost to landlords, in addition to the property portal and redress scheme. Landlords should not have to be regulated twice and pay twice for much the same thing. Proposed new clause 1 would scrap selective licensing schemes for private rented housing when the property portal goes live. Having both would not enhance protections for tenants, but merely be a duplication. Scrapping them would remove an unnecessary layer of bureaucracy and cost for landlords. I am grateful for the Minister’s opening remarks. I will take the Government at their word that the Dispatch Box commitment to conduct a review of selective licensing will take place at the earliest opportunity.
My new clause 3 would enable courts to consider hearsay evidence during the course of proceedings for possession on the grounds of antisocial behaviour. It is vital that, when section 21 ends, swift and effective action can be taken against tenants committing antisocial behaviour who cause misery for so many neighbours and fellow tenants. To support this, the Government have changed the wording of the discretionary ground to repossess a property due to tenant antisocial behaviour—ground 14. They clarify that any behaviour “capable” of causing “nuisance or annoyance” can lead to eviction. Previously, it was behaviour “likely” to cause a problem.
However, that is not the true problem. The current problem, which is not dealt with by the Bill, is that the main evidence of nuisance is provided by neighbours, as they are closest to the person involved. The changes to the definition of nuisance do not alter the fact that evidence of behaviour needs to be provided, and that will still come from neighbours. However, in so many instances, neighbours are reluctant to attend court and give evidence, in part because the slow speed of the court system means that they will be forced to live near the person that they have reported or helped to evict for several months afterwards.
A better solution would be to allow landlords to use evidence of problematic behaviour that is provided by neighbours complaining by text or email to the landlord or the letting agency. This evidence is not currently admissible, and the courts cannot give sufficient weight to it when deciding whether the tenant is committing antisocial behaviour. This amendment would allow for such evidence to be used by the courts.
In the negotiations and discussions that we had in the run-up to this debate, the Minister’s Department and his civil service team were extremely helpful in highlighting Civil Procedure Rule part 33.3 in relation to
“circumstances in which notice of intention to rely on hearsay evidence is not required.”
Again, the comments made by the Minister are welcome, although I hope his Department will follow this up with the Ministry of Justice. I therefore withdraw new clause 3.
Amendment 5 covers houses of multiple occupancy relating specifically to students. This would mean that the ground for possession for student properties could also be used for properties occupied by one or two students, which would not otherwise have been considered as HMOs.
Ending fixed-term tenancies will be problematic for the student housing market—it would be problematic for the whole Bill—which operates on a yearly cycle, from one academic year to another. Although the Government have recognised that by allowing fixed-term agreements to continue in purpose-built student accommodation, it will not apply, as I understand it, to traditional off-street private-rented housing, often rented to those in their second or third year of studies. This is a concern shared by many in the industry and, indeed, by the Levelling Up, Housing and Communities Committee, which has noted:
“Currently, the proposal is to include this part of the PRS in the tenancy reform, but we conclude that abolishing fixed-term contracts could make lettings to students considerably less attractive to private landlords, as the student market mirrors the academic year and benefits greatly from 12-month fixed tenancies.”
I hope that I have quoted the Select Committee report accurately.
A Government amendment to the Bill made at Committee stage established a new ground for possession—ground 4A—to protect the student housing market. This is to be welcomed. It will ensure that landlords can guarantee that most student properties will be available for each academic year, but it will not protect all student housing. The new ground will cover only houses of multiple occupation; it will not apply to those properties occupied by one or two students. This oversight would be rectified by my proposed amendment. Again, I thank the Government for recognising this and introducing their own amendments 226 and 228, which have addressed that problem.
As I come to my concluding remarks—at last—I wish to make some comment on amendment 10, which has not been selected.
Madam Deputy Speaker (Dame Eleanor Laing)
Order. I have been listening carefully to what the hon. Gentleman has been saying. He has a range of amendments and it is perfectly in order for him to speak to those, but it is not in order for him to speak to amendment 10, because it has not been selected. Not only has it not been selected for a Division, but it has not been selected for debate. There might be a general point to which he could make reference, but he may not speak to amendment 10.
Anthony Mangnall
I thank you, Madam Deputy Speaker, for being so generous in your explanation on that.
The problem that I see with this Bill is that, while the intent to remove section 21 is a good and necessary one—yes, it has taken time to get to this point—it is not one that those who have signed my amendment have ever objected to. The principle that explains why the amendments have been so widely supported is that there must be some leeway around ensuring that fixed-term tenancies can remain. Indeed, they still remain in certain instances within the student market.
Mr Marcus Fysh (Yeovil) (Con)
My hon. Friend is making a powerful speech. Does he agree that it is in renters’ interests, more than anything else, to be able to agree tenancies longer than six months, in order to have security of tenure? If they have a young family, they will not want grounds such as sale to get in the way.
Anthony Mangnall
My hon. Friend is right to make that point. In essence, the Bill forbids a contract being agreed with a date on which the tenant would have to leave the property. The noble Lord Hannan of Kingsclere pointed out in February in the other place that
“language matters in politics and tendentious phraseology has consequences. How have we reached the point where the expiry of a contract, freely entered into by two parties, at the end of its term is now widely referred to as an eviction, let alone a no-fault eviction?”—[Official Report, House of Lords, 20 February 2024; Vol. 836, c. 519.]
To be clear, the Bill will make it illegal to sign a fixed-term tenancy. The lack of clarity when describing the end of a contract has meant that we are now terming simple cessations of contracts as no-fault evictions. Who is at fault when a previously agreed contract comes to an end at a future date? No one. I believe that there are ways to retain fixed-term tenancies and scrap section 21.
Caroline Lucas
Will the hon. Gentleman concede that, although in principle it is perfectly possible to imagine a scenario where the tenant and landlord mutually agree to a set length of tenancy, the reality is that, because so many tenants are rushing for so few properties, the amount of free will that the tenant has in signing up to that contract is not very great? The idea of its being mutually agreeable is rather more suspect than the hon. Gentleman suggests.
Anthony Mangnall
I come at it from a different angle: we are heaping so many rules and regulations on people, and making things so difficult, they are leaving the market as a result. This was one of the pioneering policies of Thatcher, bringing in the idea of the free market in property, and ensuring that millions of people across the country could realise the social value of having a buy-to-let property on a long-term basis. The hon. Lady will not agree with me; I do not think that we agree on very much. That is okay; it is good to be able to debate the issue, especially in this Chamber.
We must be honest about this: removing fixed-term tenancies is essentially the state telling individuals what they can and cannot do with their own private properties. It is conceivable to remove section 21 while retaining fixed-term tenancies. I have said that the Conservatives have long prided ourselves on being the party of free markets, and we should keep that in mind when we vote later. We are sending completely the wrong message, with dire consequences for future levels of housing supply. We are making an enormous mistake, which will reduce long-term lets in favour of short-term lets and result in many properties being taken off the rental market. I would hate to be back here, having to repeat the figures that I gave at the start of my remarks—in 2019, there were eight people for every one property; now there are 25—and say that the number is going up and up. I fear that, as a consequence of the Bill, that will happen.
Mr Betts
The hon. Gentleman seems to be in favour of abolishing section 21, but then giving landlords the right to bring in fixed-term tenancies, which end with a section 21 notice. If the landlord chose, therefore, section 21 would not be abolished, would it? It would be a figment of our imagination here, because in practice it would never be delivered with his proposal.
Anthony Mangnall
The hon. Gentleman is right to make that point, and he has far greater expertise in this area than I, but I am saying that we can retain fixed-term tenancies, scrap section 21 and amend other parts of the Bill. There is breach of contract. Indeed, we could make notice periods longer. I know that the Department discussed that idea when this was mooted after the 2019 election: we could scrap section 21 but increase the notice period for an eviction. Those are ways we could do it, but to throw the baby out with the bathwater and to become so restrictive on someone’s private property is a problem. People go into the buy-to-let market to let their property out, but unfortunately I think this Bill will have the opposite impact, pushing people out of the market who will no longer want to deal with the hassle.
Simon Jupp (East Devon) (Con)
My hon. Friend is making a fantastic speech and I commend him for all of his efforts on the Bill. One of the challenges is that sometimes our thinking about this issue is constrained to, for example, a metropolitan area. He and I both represent rural constituencies that are really affected by short-term holiday lets, and the unintended consequence of this Bill is that landlords will be pushed towards using those, because the rules and regulations will become so tight and constraining on long-term landlords. Does he agree?
Anthony Mangnall
My hon. Friend is absolutely right to raise that point, and it comes back to the question of trying to incentivise long-term lets over short- term lets. In rural constituencies in the south-west, we face a rising tide of short-term lets. However, we are not legislating on the basis of our own respective constituencies, but on a nationwide approach. We should look very carefully at other countries and other examples of where things have gone so badly wrong through, sometimes, the simplest tinkering of housing legislation: Scotland on rent controls might be one, and Finland or Berlin might be another. They are examples of things having been got horribly wrong.
Steve Brine (Winchester) (Con)
I have been listening very carefully to an excellent contribution, as always, from my hon. Friend—they are lucky to have him in Totnes. Further to the intervention from our hon. Friend the Member for The Cotswolds (Sir Geoffrey Clifton-Brown), is my hon. Friend saying that the irony of this debate is that we are effectively legislating to no-fault evict tenants because we are pushing landlords out of the market through this legislation? Can he back that up with any more evidence that he has heard in his deliberations while creating this excellent speech?
Anthony Mangnall
My hon. Friend is absolutely right. I will use my constituency as an example: I have seen a significant decline in the number of long-term lets over the last four-year period. They are going straight into short-term lets at a far greater cost, making renting totally unaffordable and leaving us to come up with innovative ways to supply the correct amount of rental properties for people who live and work in south Devon. I think that is also reflected in east Devon, in Yeovil in Somerset and, I am sure, in the Cotswolds.
I will finish by saying that I am grateful for the work Parliament has done on this. At no time do I think the Government have dragged their feet; at no time do I think they have tried to block me. By virtue of tabling quite so many amendments, I am probably responsible for some of that hold-up, and for that I apologise. Ultimately, however, it comes down to a belief in whether we are overreaching. I feel that this Bill is overreaching. There are ways we can help to ensure that the rights of tenants and landlords are enshrined and balanced, but removing fixed-term tenancies is a step too far for me—it will be significantly negative for the future rental market, and I will unfortunately have to vote against Third Reading.
Alex Sobel (Leeds North West) (Lab/Co-op)
The Renters (Reform) Bill had the potential to bring much-needed security and safety to renters, yet amendments to water it down, brought forward in Committee and even on Report, are a backward step that will significantly undermine the Bill’s intent. As an MP with one of the largest student populations in the country, I am all too aware that students are experiencing a housing crisis on top of a cost of living crisis. We have seen landlords asking students renters for guarantors, as well as for deposits of up to 100% of their annual rent, the criterion for which is that the guarantor must own a UK property.
That requirement has an impact on the accessibility to working-class students of private rented sector accommodation at their university. It also has an impact on the ability of care leavers and those estranged from their families to access higher education altogether, as well as that of international students who do not have family members with property in the UK. To mitigate that, I have tabled new clause 41, which seeks to end one of the most illogical parts of the rental process: guarantor schemes. The expectation that, despite entering into a legal contract that outlines the responsibility of the landlord and the tenant, a nominated individual takes responsibility for fulfilling the contract seems to undermine the purpose of the contract itself. My new clause seeks to tackle financial pressure on students, supporting the amendment tabled by my hon. Friend the Member for Sheffield Central (Paul Blomfield) to stop landlords from signing up tenants months before an academic year, which creates an arms race for student lets.
We must also consider those who have come through the care system or have become estranged from their parents, for whom living at home has never been an option. If students do not know a guarantor who owns a house in the UK, they may be stuck paying extra to a private company, paying six months’ rent or more up front, or being unable to rent at all. Guarantors are not expected for most people of the same age who are not students, so why is there this discrepancy for students?
An international postgraduate student at Leeds University told me:
“My only viable option was using the Guarantor service ‘Housing Hand’ which costs me an additional 50 pounds a month on top of rent and bills. I am a PhD student receiving the UKRI minimum stipend which is paid monthly.
The cost of living for food and rent alone is already difficult on this stipend and during final week before the stipend is paid each month I often struggle to maintain a healthy and balanced diet due to financial strain.
This is not only demoralising but effects my academic progress on a physical level as I am often hungry and unable to afford fresh fruit and vegetables which are a staple of my diet. It may not sound like much, but not having to pay for this guarantor service could make a considerable difference to my overall wellbeing on a monthly basis as this money could instead be used on fresh food.”
Research conducted by students from the Centre for Homelessness Impact found that just 36% of universities provide help on rent guarantors, that even fewer provide a rent guarantor service for students, and that, as universities themselves face financial issues, such a service will become more unlikely. Renting as a student is already an uphill struggle. We know, for example, that student accommodation prices have increased by 61% since 2012, and information from the National Union of Students UK shows us that two in five students have considered dropping out because of the cost of rent and bills. When we are trying to encourage people to attend our world-leading institutions, which strengthen the skills potential of our country’s workforce, why do we put up so many barriers?
Our universities are the UK’s strongest soft power. International students in particular are left with nothing but bad choices—they must either find a UK guarantor or pay six months’ rent or more up front to their landlord. As one student recently relayed to the all-party parliamentary group on students:
“International students often face more challenges than home students. We have heard stories of students paying months of rent upfront, only to find out they have been scammed and the place they thought they'd secured doesn’t even exist. We had one case where international students paid a whole year’s rent in advance, only to find out their landlord went bankrupt. While they eventually got their money back, the stress and uncertainty they went through was unbearable.”
The Bill was a welcome opportunity to rectify so many of the scandals in the private rented sector, yet there has clearly been a continued and concerted campaign to force the Government to create an unprecedented two-tier rental market in which students would be at the mercy of section 21 evictions that other tenants would be protected from.
Sir Robert Neill
I refer the House to my entry in the Register of Members’ Financial Interests, as I am the owner of a single residential flat that is let out. I simply want to say that, in housing policy, we must always try to strike a balance between the legitimate interests and rights of tenants, and those of landlords, not all of whom are large corporations by any manner of means, and not of all whom make any great profit from those premises—they often operate at quite small margins—but who are a necessary part of the whole eco-structure. Equally, having served in local government for many years, I am conscious of the pressure that unwarranted evictions can place upon families and then upon local authorities, which have to pick up their housing duty towards those families. I believe that the Government are doing their level best in the Bill to get the right balance as far as that overall picture is concerned.
I want to speak in particular to Government new clause 30. We have already heard some rehearsal of the logic behind the new clause and the concerns about whether it will cause a delay to the abolition of section 21 evictions, as well as concern about the pressures on the county court. It is in that context, and wearing my hat as Chair of the Justice Committee, that I want to flag up to the House the inquiry that the Justice Committee is currently undertaking, and receiving evidence on, in relation to the work of the county court. I particularly welcomed the Minister’s commitment of £11 million to be transferred to the Ministry of Justice to carry out the assessment, because, of course, like local government and housing, the Ministry of Justice is an unprotected Department. It is also a downstream Department: either through the courts service or other parts of its work, it picks up many things that have gone wrong, whether elsewhere in our public services or in society as a whole. The courts system, including the civil courts and the county court in particular, is very much part of that: a great deal of social problems go through the county courts, and we know from all the evidence we are receiving that those county courts are under very great pressure.
As such, I support the new clause—but not because I want to delay the introduction of the reforms to the housing procedure that are envisaged, or the abolition of section 21 evictions as they currently exist, although as my hon. Friend the Member for Totnes (Anthony Mangnall) said, there may be other ways of striking the right balance that we could look at. I do not want to delay that reform, but we have to be frank and open about the pressure it will potentially put on what is already a strained county court system. If we are going to make those reforms—this applies to both parties—we need to will the means to make sure the county courts work as efficiently as they should do for all parties, whether landlords or tenants. That is the topic that I wanted to refer to some of the evidence on.
The overall picture, based on some 43 submissions that have been published on the Justice Committee’s website, is that of a very troubled situation as far as delays in the county court are concerned. There are delays in two areas that are germane to this debate: the first is the time it takes to see a possession action through the courts, and the second is enforcement, and particularly delays in getting bailiff appointments where necessary and then getting the enforcement carried out. There are real difficulties with both; it is fair to say that those difficulties vary across the country, but especially in many urban areas, there is considerable pressure. That is particularly acute in London and the south-east, where my constituency is.
Although the majority of those submissions came from landlords, they are based on data that I think is accepted and verified, whichever way one looks at this issue. The Large Agents Representation Group represents the largest letting and estate agents in London and the south-east. It has collected a deal of data, and it says in its submission that
“on average, the county court is taking approximately 276 working days to process a repossession claim from initial enquiry to a decision being given.”
Some of the other data that we get does not cover the whole of that process, which is why it is important to have the overall picture. That comes to an average of about 55 weeks, which does not include the enforcement time afterwards. That is unacceptable on both sides of the equation, so we need the resources to put that right.
Midland Heart, a housing association based in Birmingham—a well-established register of social landlords—says that
“typically, possession claims may take a minimum of 8 months, and sometimes up to 18 months, to conclude”.
The Hyde Group, another major social housing provider, said that
“the current level of delays is extreme and unacceptable”.
A number of those submissions also highlighted the serious delays in bailiffs executing warrants of possession when they are obtained under the current process. Of course, that is not unique to possession hearings: as has been observed, in some cases possession hearings proceed with more speed than other parts of the county court process, but they are still painfully slow in many areas. For example, we have had pretty clear evidence that there has been an increase in possession actions of roughly 16% from the equivalent quarter in 2019, before the pandemic. There was obviously a drop-off during the pandemic itself for a number of reasons, and as has been observed, the county court has done well to pick up the backlog that was created during the pandemic.
We ought to pay tribute to everybody in the county court: not just the judges, but the office staff who have worked phenomenally hard to try to turn that situation around. I hope all Members of this House will try to find the time to visit their local county court and see the work that is done by people on the admin side, who are often not the best-paid people in the public sector by any means. Indeed, recruitment and retention of staff in the county courts is itself a real challenge, which means that we must have continuing investment in those courts. I hope the assessment that the Lord Chancellor carries out under the terms of new clause 30 will help us to trigger greater investment and make the case for funding the county courts much better than it has been for many years under Governments, dare I say, of all political complexions.
Caroline Lucas
It is four months since the Bill concluded in Committee and five years since the Government promised to legislate for renters’ rights, so I start by saying that it is totally unacceptable that it has taken so long for the Renters (Reform) Bill to be on Report. It is deplorable for nearly a million renters to have been issued with section 21 eviction notices in England since the Government promised to abolish them, according to recent YouGov data. Renters have been badly let down by this delay, and aspects of the legislation before us continue to let them down.
My amendment 12 would require energy performance certificates for properties to be provided to the database operator and for the details to be recorded in the portal. This simple amendment would make a big difference. It would recognise that information is power and allow tenants to know whether the home they are about to rent will be damp and leaky or warm and efficient.
Amendment 12 also builds on the existing rules that require EPCs to be commissioned before properties are put on the market and for them to be clearly displayed in adverts in commercial media. Fairness and logic demand that renters should be able easily to compare energy efficiency information when considering properties to rent. A cold and damp home can end up costing renters dearly, both in high energy bills and health and wellbeing impacts.
Renters in cold and damp homes run an increased risk of problems associated with mould and of health conditions such as asthma and heart disease, as well as of poor mental health. We all know that the UK has some of the leakiest homes in Europe and that tenants are particularly exposed to high global gas prices, because the private rented sector is the least energy efficient of any tenure. A staggering quarter of renting households are living in fuel poverty today, so urgent action is essential to improve standards across the sector and to ensure that all renters have a warm and decent home in which to live.
It therefore beggars belief that the Prime Minister announced last September that he was scrapping the requirement to upgrade energy efficiency standards in private rented properties to EPC grade C. That was despite it being essential to deliver on our climate and fuel poverty targets. That upgrade would save tenants more than £250 a year, even at so-called normal prices, according to the Climate Change Committee. As well as harming renters, that regressive move was also contrary to the wishes of landlords, 80% of whom are in favour of stricter energy efficiency regulations.
My amendment 13 seeks to tackle the crippling private rents that so many people are paying. In Brighton and Hove, in which my constituency rests, a new study of more than 50,000 renters found that tenants in the city were spending a scandalous 56.9% of their pay on rent, making it the most expensive city in England in which to rent. As the Bill stands, the measures on rent increases are wholly inadequate. They rely on a resource-intensive and time-consuming appeals process that could even see tenants worse off at the end of it, because the tribunal would have the power to impose a higher rent than the one the tenant is appealing. That is frankly outrageous and goes directly against the promise made in the Secretary of State’s White Paper, which said:
“We will prevent the Tribunal increasing rent beyond the amount landlords initially asked for when they proposed a rent increase.”
Amendment 13 would simply make good that broken promise by ensuring that the rent payable after a tribunal determination can be no higher than the rent initially imposed by the landlord in the notice served on the tenant. One would have thought that that would be pretty straightforward. Given that the landlord is proposing that rent level in the first place, that must surely be the upper limit of what the tribunal can determine. The Secretary of State obviously understands that principle, since he put in in his own White Paper.
The removal of this commitment in the Bill shows the Government are determined to bend over backwards to tip the balance of power even further in favour of landlords. In short, amendment 13 would get rid of what seems to be a deliberate disincentive to discourage tenants from using the process that is supposed to protect them from unfair rent hikes. In the absence of a national system for rent controls with local flexibility, which is what we really need, amendment 13 is a modest rebalancing of the rent tribunal process, and I would welcome the Minister’s consideration and response in summing up the debate.
There is limited time in the debate, but I very much support the amendments seeking to prohibit evictions within two years of the beginning of a tenancy where the landlord wants to sell or move family in. As the Bill stands, tenants can be served two months’ notice just four months after a tenant has moved in, making a mockery of ministerial claims to improve security of tenure. I also sincerely hope that Ministers will accept amendment 14, which addresses the deeply concerning fact that the notice period for eviction under the new landlord grounds is just two months. This amendment extends it to four months in recognition of the huge difficulty many people face in finding somewhere suitable and affordable to rent when they are evicted, which, as we know, is a major cause of homelessness.
Neil O’Brien
I have never been a landlord, but I have been a private renter and I greatly welcome some of the measures in the Bill as they would have helped me and other private renters a lot. I was offered some extraordinary properties when I was a private renter. I remember that one had dog mess all over the floor, while another in Elephant and Castle had bare wires hanging out of the wall and a gas cooker hanging off the wall. I welcome the extension of the decent homes standard to the private rented sector through this legislation, and it is striking how little controversy there has been about that given how big a deal it is. The proportion of private rented homes that have a major category 1 hazard in them has already come right down, from 24% when we came into office in 2010 to just 12% now, but that is still too high, and it is three times higher than in the social rented sector. So it is great that today we are pressing on with fixing this.
The Government amendments we are debating today are welcome. They strike a good balance between the interests of tenants and of landlords. For example, new clause 30, which makes the commencement of the end of no-fault evictions dependent on county courts being ready, is sensible. The slow recovery of the courts from the covid backlog has been frustrating, and there is a much wider question about how we can get rid of old-fashioned court practices that slow things down. My hon. and learned Friend the Member for Bromley and Chislehurst (Sir Robert Neill), Chair of the Justice Committee, made important points about the paper-based nature still of a lot of what goes on there.
However, a lot of good ideas can be wrecked if we do not get the implementation just right and my hon. and learned Friend also mentioned that it currently takes about 55 weeks from commencement to possession, which is much too long. Although I agree with what we are doing here in terms of no-fault evictions, it is a big deal and it is right and reasonable that those who let out properties do at least know that they can rely on a slick and well-functioning court process before we bring this measure in. Even those on the Opposition Front Bench said the courts were recovering from the pandemic, rather than being fully recovered, so I think they recognise that up to a point as well.
The Government have made a range of other sensible reforms in the new clauses before us to ensure that there is fairness for landlords as well as tenants, including new clause 15 which gives those who let out properties some confidence in the first six months. There are the new student grounds as well, and I note that even landlord groups such as the National Residential Landlords Association are now saying we should get on with this legislation, so I think this is about right.
A large number of Government amendments are before us today, but the overall effect is to get a good balance in the legislation. I know some have concerns about the end of section 21, but many countries have a similar system and the sky has not fallen in. Germany, Austria, Denmark, Switzerland and the Netherlands all banned no-fault evictions, and they have a higher share of private renting than us, and in the US and Canada states including California and Quebec do the same and the sky has not fallen in there either. Even Scotland has had this since 2017 and, again, although it has done some other things that are pretty unwise in terms of rent control, the sky has not fallen in.
Landlords will still be able to cite a lot of reasons to ensure that they can get their property back. Indeed, my hon. Friend the Member for Dover (Mrs Elphicke), who is not in her place, suggested that perhaps there were still too many, but I think it is essential that people can get their property back. The end of section 21 changes the balance a bit, recognising that it is no small thing to ask people to move homes.
There are more people living in the private rented sector with children these days, and it is hugely disruptive to have to move. I remember how, in a place that I was renting, we were all moved out because the landlord was supposedly going to do massive works, but he ended up installing about 1 square metre of linoleum and let the place out again for the same rent. It was just a huge amount of disruption to no particular end. For those in a more vulnerable position than I was, it is not a small thing to be asked to move home, so by ending section 21 but still enabling landlords to get control of their property when they need it, we are striking the right balance.
Paul Blomfield (Sheffield Central) (Lab)
While I respect the views of the hon. and learned Member for Bromley and Chislehurst (Sir Robert Neill), who raised some valid points about the county court system and the pressures on it, as someone representing a large number of private renters, I must nevertheless express my concerns and share those raised by the shadow Minister and others about the Government’s failure to deliver on their promise on no-fault evictions. I rise, as chair of the all-party parliamentary group for students, to comment specifically on the proposals in relation to students, to support new clause 41, tabled by my hon. Friend the Member for Leeds North West (Alex Sobel), and to speak to amendment 260, which stands in my name.
Students form a substantial part of the private rented sector. Back in July, the all-party parliamentary group organised a meeting to ensure that their views were heard. We brought together people from different nations of the UK and from all parts of the country. The Minister—sadly, he is not currently in his place—would have found it useful, because it highlighted a number of issues in the Bill that have not been properly thought through. I have discussed with the Minister the issues that came out of our meeting, and I am grateful to him for having found that time, but I want to share some reflections at this point in the Bill’s progress.
First, on the decision to extend grounds for eviction from purpose-built student accommodation to houses in multiple occupation and potentially to other student renters, there are mixed views across the country. Some are worried that exempting students makes them more attractive to less scrupulous landlords as potentially second-class, less protected tenants. Others, though, were concerned that giving students the same protection as other renters would force landlords to leave the student market, with that point made by landlords in areas where there was significant pressure on the housing market. Overall, we reached the same view as the Select Committee: on balance, the exemption is probably right, but it needs to be kept under review.
There is, however, a wider problem with the whole approach to students in the Bill. It seems that the Government have approached students with a one-size-fits-all model: they are undergraduates aged 18 to 21, living away from the parental home from the first time, and living there during term time only. However, students at our meeting were at pains to point out that they are not a homogeneous group. There are mature students who are renting in their home city and need to be there all the time, and students with families. Many courses do not start in September and are not on the cycle on which the Government’s amendments are premised. There are postgraduate taught programmes on a different, longer cycle. There are postgraduate research students on full-time programmes over several years, who are like any young professional. There are mixed households of students and non-students, particularly where groups of friends form and perhaps one member graduates.
I discussed all those variations with the Minister— I am glad to see him back in the Chamber—and his view was that any atypical student would simply not be subject to the exemption, partly because these issues have not been thought through properly. That might be in their favour because they will have greater protection, or it might leave them out in the cold because landlords will find them less attractive within the student market. Again, that emphasises the need to keep the impact of the student proposals under close review.
As the Minister resumes his seat I will move to my amendment 260, which raises a further issue that he referred to: the cycle of student tenancies, which I have discussed with him and on which he was sympathetic. When some of us were students, undergraduates would start university in September, settle in and make friendship groups, and towards the end of the academic year, after Easter, they would start looking for accommodation for the subsequent year. We have seen a landlord-driven arms race, as my hon. Friend the Member for Leeds North West referred to it, in which they have pressured students ever earlier in the year to enter into contracts for the subsequent academic year.
It is now the norm in many parts of the country that students starting a course in September are put under pressure by landlords the following month to enter into a contract for the following year. That forces them to pay a substantial deposit at a point in their life when they already have significant additional costs. It also forces them into joint tenancies with groups of people who they might discover later in the year are probably not who they want to live with in the subsequent year. Appeals to landlords to step out of the contract into which they entered are invariably rejected.
As the Government’s proposals are to regulate on the basis of that tenancy cycle, my proposition is that we try to make that cycle work better by saying that designated student contracts should not start sooner than March of the year in which students will take occupation in September. That would be in the interests of tenants, for the reasons that all of us who represent students will know. Setting a defined starting point will also end the arms race, in the interests of landlords.
Wera Hobhouse
The tendency that the hon. Gentleman refers to is not new. My daughter, who graduated in 2011 and therefore started in 2008, was already under that pressure. He is right that for a lot of young people it is incredibly difficult to find a group of people they want to live with the following year within a month of arriving at university. His proposals are commendable and I hope the Government are listening.
Paul Blomfield
I thank the hon. Lady for her intervention. It does vary in different parts of the country, but the way in which it has come earlier and earlier each year, to the ludicrous position where students are being forced into contracts for the subsequent year almost at the moment they start their first year, clearly needs to be addressed. As I said, I have discussed this issue with the Minister. When we talked about it he seemed sympathetic, so I hope it is an issue we can address as the Bill progresses.
Wera Hobhouse
Before I start my remarks, I refer the House to my entry in the Register of Members’ Financial Interests.
My amendments—amendments 39 to 41—all refer to the Protection from Eviction Act 1977. I have raised this issue with the Government for the past two years, after one of my constituents, who is a lecturer in law at Bristol University, came to me with his concerns. To be fair to the Government, the Under-Secretary of State for Levelling Up, Housing and Communities, the hon. Member for Kensington (Felicity Buchan), had a meeting with that group of academics, but then I heard nothing, which was a little bit disappointing. I have, just this afternoon, received a reply from the Minister. I thank him for that, but it was dated yesterday and only sent to me today. I will look at it very carefully, but it is still important that I raise here what I have to say.
There are two parts to amendment 39, which relates to the law on harassment of a residential occupier. At the moment, the law is complex and confusing, particularly for lay people, and difficult to enforce. I have glanced over the response from the Minister. The Government believe that there is currently enough power of enforcement. As I understand it, the 1977 Act is quite unknown. Local authorities and the police do not know enough about it. I wonder how we can work in that space to ensure that any unintended consequences brought in by the new legislation will not allow rogue landlords, or those who do not want to do the right thing, and refer them to other pieces of legislation.
First, the amendment would change the law so that everyone who is harassing a residential occupier to try to get them to move out of the property is subject to the same law. Currently, if a criminal landlord is harassing the tenant, the law is fairly clear. However, it might be another individual who is harassing the tenant to get them to move out. In this case, the local authority has to try to find out whether the person doing the harassing is an agent acting for the rogue landlord.
There is also often deliberate obscurity about the identity of the landlord. Investigating the relationship between individuals to establish their precise legal relationship is time consuming and unnecessary, where the aim of the legislation is to protect residential occupiers from harassment. The amendment changes the law to make enforcement easier for local authorities. The change will not affect the position of landlords. They will continue to be subject to the same law. It is only the local authority that can prosecute this offence, and it would still need to prove that a rogue landlord, their agent or any other person knew, or had reasonable cause to believe, that their actions would have the result of causing the occupier to leave.
The other thing that the amendment would do is clarify the law. Currently, if a rogue landlord interferes with services that are reasonably required for the occupation of the premises as a household, that can constitute harassment. However, it is not clearly stated what those services are—I can think of essential services, such as electricity, cutting the water off or even changing the locks—so it is important that we take that into consideration. We are not talking about decent landlords, as I have always made very clear. It is about getting to those landlords who are clearly not doing the right thing.
As I said, it is not clearly stated what the services are. Amendment 39 sets out a list of such services, including water, gas and electricity, as well as access to “electronic communications networks and services” as defined in section 32 of the Communications Act 2003.
Amendment 40 deals with three issues. First, the law on whether certain occupiers are protected by the legislation on illegal eviction is very complex, and it can be very difficult to establish. That is because some occupiers—for example, those who live with the landlord—are excluded from the protections in the law and can therefore be evicted without a notice or court order. That creates an incentive for sham arrangements whereby a rogue landlord might pretend to live with a tenant to circumvent the protections in the Protection from Eviction Act 1977. The amendment reverses the burden of proof, placing it on the landlord, who must establish that an occupier is not protected by the law. It is based on the idea that everyone has the basic protection of the law unless they are in an exclusionary category for a good reason. The presumption should be that they are protected.
Helen Hayes (Dulwich and West Norwood) (Lab)
I rise to speak in support of new clause 40, which stands in my name, but before I do so I will say a little about the Bill more generally.
Legislative reform of private renting is urgently needed. My constituency is in the eye of the storm of the housing crisis, and every year since 2010 the situation has worsened. The waiting list for a genuinely affordable social home has become longer, the number of people living in temporary accommodation has become higher, and private sector rents have continued to spiral. Despite many promises, the Government have delayed action for far too long. Private renters, housing campaigners, charities and Members from across this House are united in their support for bold reform of private renting. But now, after years of delay, we see a Government unable to deliver the effective and urgently needed reforms that were promised, because they are too weak to face down their own Back Benchers.
At the heart of the matter is the urgent need for an end to section 21 evictions, which I have been calling for since the debates on the Housing and Planning Act 2016. Section 21 is the basis of insecurity in private renting, because it gives landlords the ability to evict tenants for no reason at all. Time and again, I have seen in my constituency how section 21 is used egregiously to ratchet up rents and to stop tenants complaining about basic repairs or safety issues, such as damp and mould. Because a section 21 eviction does not need to be justified with a reason, all the power is in the hands of the landlord. Tenants live with the daily threat that they will be told to leave their home, with all that that entails, such as having to find a new home as rent costs continue to rise.
In a housing crisis characterised by an acute shortage of genuinely affordable social housing, private renting is a form of tenure on which millions of people rely. They must have a degree of security so that they can put down roots, know that their children will be able to remain at the local school, and live without insecurity and the constant fear that they may have to move. Section 21 is destabilising for families and communities. It is therefore beyond disappointing that the Bill will not result in an immediate end to section 21, and that the Secretary of State cannot give a date for when it will end.
The reason for the delay is the shocking mess that the Government have made of the court system. My constituents, who used to be able to attend Lambeth county court, now have to travel to Shoreditch, because the court was closed in 2017. When we challenged the closure of Lambeth county court on the grounds that it would involve a much more complicated and costly journey for constituents facing eviction who wished to attend court, we were promised digital reforms of the court service. We were promised investment in infrastructure to make hearings accessible to anybody who had to attend court, and to ease the complexity of the distance and journey time being increased, but no such investment has been forthcoming. Legal aid lawyers in my constituency who work in the courts speak of the chaos, the crumbling infrastructure and the overburdening workload falling on staff, yet this is the excuse today for why section 21 evictions cannot be brought to an end.
New clause 40, which I tabled, arises from a tragedy that happened to a family in my constituency. Their son, a first-year university student, had signed a tenancy agreement on a house for his second year. In common with parents of university students across the country, his parents were the guarantors for his tenancy, but before their son had finished his first year at university and the tenancy had even started, he tragically died by suicide. Faced with one of the most terrible tragedies that any of us can imagine, these bereaved parents were then pursued by their late son’s letting agent for the rent he would have owed on a tenancy that he would never take up. I wrote to the letting agency several times on behalf of my constituents, but it refused to budge. It maintained that a contract was a contract and that my constituents were liable as the guarantors, so they would just have to pay. Surely we in this House can agree that a contractual provision that financially penalises bereaved parents for the suicide of their child is straightforwardly wrong.
After I raised that case during Prime Minister’s questions, I was contacted by a number of families who had signed guarantor agreements on similar contracts, but also by a number of landlords and letting agents who said that they did not use such clauses in their tenancy and guarantor agreements. This demonstrates that such clauses are simply not necessary. Loss of rental income due to the death of a tenant is an insurable risk for landlords, and it should be a matter for insurance, not for bereaved guarantors.
I am grateful to the Minister for meeting me to discuss new clause 40, but I am baffled by the Government’s response, which is to suggest limiting the obligations of a bereaved guarantor to two months, including during the proposed six-month minimum commitment at the start of a new tenancy. While two months’ rent is clearly preferable to six months or a year’s worth of rent, it is still quite literally a financial penalty for the death of a loved one. Bereavement is one of the hardest things anyone can experience, and the Government should use the powers at their disposal to provide comfort, security and peace of mind to the bereaved so that they can focus on grieving the loss of their loved one. It is simply not fair for bereaved guarantors to be charged for the rent that their loved one is no longer alive to pay, and it is not necessary because the loss of rental income due to the death of a tenant is an insurable risk.
New clause 40 would bring this practice to an end and give peace of mind to guarantors that, should the unthinkable happen, they will not have to find hundreds or even thousands of pounds as they grieve. The Minister has said that he will continue to reflect on this issue. I urge him to do the right thing and to accept new clause 40 into the Bill. It is a simple measure that would prevent anyone else from experiencing the additional distress that my constituents suffered when their son passed away. This new clause has not been selected for a separate decision today, but I will continue to pursue this reform. It is the right thing to do. I urge the Government to look again at this issue. It is a reform that would cost the Government nothing, but it would give peace of mind to anybody facing bereavement, as my constituents have had to do, that egregious landlords and letting agencies will not come after them for a cost that they may not be able to afford at a time when they need help, support and comfort, not additional financial penalties.
Jacob Young
I thank right hon. and hon. Members for their contributions to the debate and for their ongoing engagement throughout the Bill’s passage. I will respond to some of the issues raised during the debate, but I might not be able to respond to all of them in the time remaining.
I will start by addressing the points made by the hon. Member for Greenwich and Woolwich (Matthew Pennycook) and the amendments tabled by the Opposition. As I said in my opening speech, I thank him and others on the Labour Front Bench for their continued engagement and their support for the Bill. I believe that we share the ambition to see the Bill on the statute book as soon as possible.
New clause 10 would extend Awaab’s law to the private rented sector. The tragic and avoidable death of two-year-old Awaab Ishak is the most shocking reminder of the danger of damp and mould. I am clear that no tenant should have to live in dangerous housing conditions, but our approach to tackling this issue must reflect the differences between the social and private rented sectors. Awaab’s law was designed for social housing. Most social landlords manage large portfolios and have dedicated repair and maintenance teams, enabling them to tackle issues to specific timeframes. In contrast, the vast majority of private landlords own a small number of properties, with 82% of landlords having fewer than five properties and 43% owning just one.
The Bill takes a different and, I believe, more suitable approach to ensuring that private tenants have safe homes. It gives councils powers to immediately fine private landlords up to £5,000 if their properties are dangerously unsafe. It also introduces a decent homes standard for the first time and a new means of redress through the ombudsman. We will publish statutory guidance for councils on enforcement, and we will explore how this guidance can strengthen the onus on private landlords to deal promptly with tenant complaints about hazards, including for larger institutional private landlords that may have resources similar to those of social landlords. Amendment 28, which the hon. Gentleman spoke to, would remove section 21 immediately upon Royal Assent. This would mean there is no transition period, as is currently planned, leaving no time at all for landlords, letting agents, tenant groups and local authorities to adjust to the new system. There would be no time to conclude the necessary secondary legislation, leaving the statute book a confusing mess.
Importantly, without having the new possession grounds in place, amendment 28 would prevent landlords from regaining possession of their property even where they have a legitimate reason to do so, which the new grounds reflect. Landlords could not repossess to sell their property or to deal effectively with antisocial behaviour or repeat rent arrears. Most concerningly of all, temporary and supported accommodation would not have access to the critical new grounds, which would have an immediate impact by clogging up those sectors.
Although it might seem appealing and sound good to say, “Let’s just abolish it on Royal Assent,” amendment 28 would create chaos in the sector. It is far better for tenants and landlords alike if we ensure that the change happens in an orderly way. For those reasons, I ask the hon. Gentleman not to press his amendment.
Amendment 37, tabled by the hon. Member for North Shropshire (Helen Morgan) and given voice today by the hon. Member for Twickenham (Munira Wilson), seeks to bring accommodation provided by the Defence Infrastructure Organisation into scope of the decent homes standard. I make it clear that everyone deserves a safe and decent home, none more so than the heroes who serve in our armed forces. Although 96% of service family accommodation already meets the decent homes standard, bringing such accommodation within scope could provide a further safeguard to ensure that all service personnel and their families have a home of the quality they deserve. We therefore strongly agree with the intent of the amendment.
Service family accommodation has unique features, however, including a significant portion being located on secure military sites where there will be issues around security and access for inspections. This would create a challenge in applying and enforcing the decent homes standard. The Government intend to ensure that service accommodation meets the decent homes standard, while recognising that work is needed to determine the appropriate monitoring and reporting arrangements given the unique nature of this accommodation. My Department will therefore work closely with the Ministry of Defence to explore these challenges and how we can best ensure that there are strong safeguards for service personnel and their families that work effectively in practice.
I assure the hon. Members for Twickenham and for North Shropshire that we are seriously considering this issue, and that the Minister for Defence Procurement and I intend to meet the hon. Member for North Shropshire in the coming weeks to discuss these issues in more detail before the Bill is in Committee in the Lords. I therefore ask her not to press her amendment.
New clause 12 and amendments 43 to 47, tabled by my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton), seek to extend the core blanket ban provision in chapter 3 to care leavers. I am grateful to him for raising the important issue of care-experienced young people’s ability to rent a home in the private rented sector. The Government have already reserved a power in the Bill to extend blanket ban provisions to additional cohorts in future, should we find evidence that it is needed. This power could be used to extend the provisions to care-experienced people if evidence suggests that it would be effective.
Helping care leavers to make a successful transition from care to independence is a priority for this Government, and we recognise that care leavers can face significant barriers to securing and maintaining affordable housing, including providing a guarantor or rent in advance. We are already seeking to improve care leavers’ access to housing, as set out in the “stable homes, built on love” strategy, which sits alongside existing duties owed to care leavers by local councils as corporate parents.
Furthermore, we understand that at least 78 councils have passed motions granting care leavers the same protected characteristic status as other cohorts under the Equality Act 2010 in their local area. I am happy to continue working with my hon. Friend the Member for East Worthing and Shoreham to hear the challenges that care-experienced people face and how we can make private rented accommodation more accessible to them.
I can confirm to my hon. Friend that the measures to prohibit blanket bans on the basis that a child will live with or visit a person at a property include foster children and, in response to the hon. Member for Twickenham, kinship carers. Landlords and letting agents will not be able to discriminate against potential tenants on the basis that they foster children. No further legal provisions are needed to do this. More broadly, during this spending review we are investing over £36 million in a foster carer programme and a foster carer recruitment and retention programme. That is the largest ever investment in fostering in England. For that reason, I ask my hon. Friend to withdraw his amendment.
New clause 39, proposed by my hon. Friend the Member for Dover (Mrs Elphicke), effectively requires landlords to compensate tenants when using any possession grounds found in schedule 2 of the Housing Act 1988 within two years, other than ground 7A or ground 14. While I appreciate the intent behind my hon. Friend’s amendment, I do not agree that landlords should be made to pay compensation to tenants when they have a legitimate reason to evict. Landlords looking to move into or sell their property, or dealing with tenants in rent arrears, may find themselves to be in financial difficulty too, and the change proposed by the amendment could exacerbate that.
Amendment 257 seeks to tighten the breach of tenancy grounds, so that a tenant can be evicted if the tenancy breach impacts the wellbeing of other tenants or neighbours, or could cause material damage to the property beyond what would be covered by a tenancy deposit. As I have indicated to my hon. Friend the Member for Dover previously, I am sympathetic to the intention behind her amendment but it could have adverse consequences. For example, significant breaches of a tenancy agreement, such as subletting, may not lead to an eviction if they were proven to not have a material impact on other housemates or immediate neighbours.
I am also concerned about the impact on existing contracts, signed between landlord and tenant on the basis that this ground would be available. I assure my hon. Friend that ground 12 is discretionary, meaning that a judge will consider whether the ground has been met and whether the possession is reasonable in each case. We therefore think it is unlikely that a tenant would be evicted for minor breaches. I will seek to clarify in guidance when this ground ought to be used. I am happy to explore what more could be done in legislation to ensure tenants are not unfairly evicted for minor and unfair breaches to their tenancy agreement. For those reasons, I ask my hon. Friend to withdraw her amendment.
Turning to proposed new clause 40, the hon. Member for Dulwich and West Norwood (Helen Hayes) set out a deeply moving and tragic case in her consistency. I am grateful to her for meeting me yesterday to discuss the case. New clause 40 would prevent guarantors being held liable for rent after a tenant’s death. The hon. Lady has campaigned on the issue for some time and I appreciate her work on it. By moving to a system of periodic tenancy, tenants and their estates will no longer be locked in after the first six months. In the event of a bereavement, the tenant’s representative would be able to serve two months’ notice to end the tenancy and end the guarantor’s liability. Attempts to hold a guarantor liable for rent past the end of the tenancy would be in breach of the Tenant Fees Act 2019 and a landlord could be fined for doing so. I am aware that our new six-month term may mean guarantors being held liable for longer. That is why we have committed to looking at an exemption where a tenant tragically dies, as I discussed with hon. Lady yesterday, so that a notice can be served in the usual way. For that reason, I ask the hon. Lady to withdraw her amendment.
Turning to the points made by my hon. Friend the Member for Totnes (Anthony Mangnall), in his speech he acknowledged that the Government have accepted not one but almost all his amendments. I regret that he still feels opposed to the Bill overall, but I hope he will reconsider his position having listened to the debate and heard the significant changes we have made. He mentioned Margaret Thatcher’s reforms of the 1980s. Her reforms sought to smash a disastrous system of sitting tenants, where landlords were blocked from moving into or selling their homes, or were forced to let their properties below market rents. Our reforms build on her reforms. Landlords will still have a mandatory right to move into or sell their homes. Nothing in our Bill introduces rent caps, despite calls from Opposition parties and the Mayor of London.
Five years ago, the late James Brokenshire, as Secretary of State for Housing, Communities and Local Government, promised that we would abolish section 21 evictions. Eight months later, every English Member of this House stood on manifestos to abolish section 21. In 2022, we published the White Paper into how we would reform the tenancy system. In 2023, we brought forward this Bill, which gave the White Paper legislative form. And today, we have the opportunity to move forward a Bill that strikes the right balance between security for tenants and fairness for landlords.
For tenants, this Bill abolishes section 21 evictions and moves to a more flexible system of periodic tenancies for all. It applies a new decent homes standard to the private rented sector for the first time and outlaws blanket bans on tenants with children, or those on benefits. It gives renters a legal right to request a pet. It also expands the homelessness prevention duty to protect vulnerable tenants. Together, these changes will give tenants the opportunity to put down roots in their communities, their children in local schools and to live in a secure home.
For landlords, the Bill strengthens possession grounds, giving landlords certainty that they can get their property back. It provides stronger protections in cases of antisocial behaviour and repeated non-payment of rent, and protections for the student market and rural communities. Tenants will have to give two months’ notice to leave a tenancy instead of one, and we are making improvements to the court system to ensure that they can properly support the new system.
The new private rented sector ombudsman will also help prevent issues escalating to the courts, offering quicker and cheaper resolution to disputes. And the new property portal will provide a one-stop shop for landlords to understand requirements and to demonstrate compliance.
Above all, the Bill delivers for landlords and tenants, because it drives out the bad actors in the system. That is what we aim to do—to build a sector that gives tenants security and protections, and landlords fairness, not pitting one against the other, but working with both to drive out the bad actors.
This Bill is the culmination of years of work in a sector that has not seen meaningful change in three decades. I ask all Members to join me and back the Bill tonight.
Question put, That the clause be read a Second time.
Jacob Young
I beg to move, That the Bill be now read the Third time.
This Bill is an opportunity for us to improve the life chances of millions of private renters across the country, and I hope that we have also given reassurance to the millions of good landlords who endeavour to provide homes for those who rely on the private rented sector. When the Government set out their levelling-up missions in 2022—as the Levelling Up Minister, I feel this keenly—we made a clear commitment to halve the number of poor-quality homes by 2030 to
“Restore a sense of community, local pride and belonging especially in those places where it has been lost.”
When housing is secure and safe, it is the launch pad for rich and fulfilled lives and gives people
“a place they’re truly proud to call home”.
This Bill marks the biggest change to the sector in more than 30 years. Rightly, Members have pressed the Government to ensure that it strikes the right balance, improving the sector for all while ensuring that no party is unduly burdened either by cost or by process. I believe that the Bill now strikes that balance, and I am proud to have taken it through the House as my first Bill as a Minister. I should add that taking it over 24 hours before the beginning of the Committee stage was an added excitement that I shall not forget. Let me again pay tribute to my predecessors, my hon. Friends the Members for Walsall North (Eddie Hughes) and for Redditch (Rachel Maclean).
At this point, I invite the hon. Member for Brighton, Pavilion (Caroline Lucas) to intervene, if she wishes to do so.
Caroline Lucas
I am grateful to the Minister. As he knows, I tried to intervene earlier during his summing-up speech. I merely wanted to pursue the point about rent tribunals that I made in my initial intervention. In the White Paper, the Government said that they were going to prevent tribunals from increasing rents beyond the amount that landlords initially asked for when they proposed a rent increase. Why have the Government gone back on that? Why do they now envisage a scenario in which someone could go to a tribunal and end up with a higher rent than the one against which they are appealing? That is surely a massive disincentive.
Jacob Young
Large rent increases should not be used as a back-door method of eviction, but it is crucial that landlords are able to increase rents in line with market levels to maintain investor confidence. We have listened to concerns, and we think it fair that the tribunal is not limited when determining that market rent. This means that, as the hon. Lady said, the tribunal has the freedom to make full and fair decisions, and can continue to determine the market rent of a property. I understand the hon. Lady’s concerns, but it is important that all our measures are proportionate and that we do not allow the tribunal to become overburdened by too many complaints. I therefore think that this is a necessary safeguard.
Caroline Lucas
The Minister is being very generous in giving way. I am not the only person to have said that it should not be possible for rents to rise in these circumstances; the Government’s own White Paper said it only a short time ago. I wish that the Minister would address the point about the disincentive. If a tenant knows that by going to a tribunal they could end up with a higher rent than the one against which they are appealing, surely that will be a massive disincentive.
Jacob Young
Obviously, in a number of areas we have listened to the sector and moved on from the White Paper. The hon. Lady’s point is legitimate, but the reason the tribunal is able to set a rent that is above the landlord’s initial request, and to set a market rent, is that we want to ensure that it is not overburdened with repeat requests that challenge rent increases that are perfectly reasonable.
Sir Geoffrey Clifton-Brown
Surely the whole point of a tribunal is for the tribunal judge to set what he thinks is a fair market price. It might go up, it might go down or it might stay the same, but that is the whole point of a tribunal.
Jacob Young
I entirely agree with my hon. Friend, and that is why we have acted in this way.
We have heard from Members in all parts of the House, and I thank them all for their contributions during the Bill’s passage. They have worked collaboratively and diligently to ensure that this important legislation becomes law. I want to record my thanks to all my officials—I cannot name them all, but a few of them are Leah, Guy, Steph and Ross—as well as those in my private office team and the Clerks. I thank Members on both sides of the House, notably my hon. Friends the Members for Northampton South (Andrew Lewer) and for Totnes (Anthony Mangnall), for all their work, and of course I thank those in the Government Whips Office. Above all, I thank all the groups that I have had the pleasure of meeting as they represent the interests of both tenants and landlords across the wider sector.
I hope that our colleagues in the other place will take the collaborative approach that has been taken in this House, and will pass the Bill with the speed that it now deserves to give certainty and security to landlords and tenants throughout the country.
Matthew Pennycook
Let me start by thanking the Clerks, the House staff and the Library specialists for facilitating our debates on the Bill, along with all the experts and external organisations that have engaged extensively with us on it. I also put on record my thanks to all hon. Members who have contributed to our proceedings at all stages, particularly those who served on the Public Bill Committee. I especially thank my hon. Friends the Members for Weaver Vale (Mike Amesbury), for Westminster North (Ms Buck), for North Tyneside (Mary Glindon), for Mitcham and Morden (Dame Siobhain McDonagh) and for Brighton, Kemptown (Lloyd Russell-Moyle) for their forensic scrutiny of the Bill’s provisions, and the considerable efforts that they have made to strengthen it as a whole.
I offer my sincere thanks to the Minister for the manner in which he has approached our exchanges on this important piece of legislation. In being handed this as his first Bill to take through the House, he has been given an unenviable task, to put it mildly, but he has borne his troubles with good grace. I have very much appreciated the civil way in which he has engaged with me throughout and his efforts, within the severe constraints under which he is no doubt operating, to make a number of small but sensible improvements to the Bill.
Once again, I put on the record the thanks of Labour Members to all those who have campaigned tirelessly—in many cases, over decades—for a reformed private rented sector. I particularly thank all the organisations that have joined Labour over recent months in urging the Government to amend the Bill so that it levels decisively the playing field between landlord and tenant, especially the 20 that make up the Renters Reform Coalition.
Labour has consistently argued that the case for fundamentally reforming the private rented sector is as watertight as they come. A state of affairs in which more than 11 million people in England—not just the young and mobile, but many older people and families with children—live day in, day out with the knowledge that they could be uprooted from their home with little notice and minimal justification, and where a significant minority of them are forced to live in substandard properties for fear that a complaint would lead to an instant retaliatory eviction, is intolerable. The sector should have been transformed a long time ago.
The Bill as introduced was a good starting point for the reform that is necessary, but Ministers could and should have strengthened this legislation, rather than progressively watering it down in a forlorn attempt to appease a minority of malcontents on the Government Benches. As a result of the Government’s unwillingness to face down that minority, the Bill that we send to the other place today is not only far weaker than it need be, but in danger of being fatally compromised.
We will not oppose the passage of the Bill tonight, because it is essential that it progresses, but we hope that the noble Lords address that danger and that over the coming months we can convince the Government to think again and ensure that this long-overdue piece of legislation truly delivers for renters.
Sir Christopher Chope (Christchurch) (Con)
It is a great tribute to my hon. Friend the Minister that he has got the Bill into a form that is far better than it was on Second Reading, and that it is so much improved that there will not be a Division on Third Reading. That does not mean that everybody on the Conservative Benches is satisfied with all of the content of the Bill, although it is significantly improved.
I recall the enthusiasm with which those on the Conservative Benches greeted the Third Reading of the Housing Act 1988, which is being substantially amended by tonight’s proceedings. That Act introduced a fundamental supply-side reform and was at the heart of the Thatcher revolution, which transformed the private rented sector from one in which nobody wanted to engage. The sector was shrinking, and young barristers like me were making a living by trying to defend the interests of landlords who had haplessly found themselves on the wrong end of the legislation.
We have moved a long way since then, and one of the essential elements of the 1988 Act was the shorthold, which was a privately arranged agreement between a landlord and a tenant. For a period, the tenant would be able to have exclusive possession of a property that was rented by the landlord. During that period, neither the landlord nor the tenant would be able to renege on the agreement. The rent would remain the same, and the landlord would not be able to say that they needed to get repossession of the property for any reason at all.
It seems to me that the shorthold principle is still missing from the Bill. There was an amendment that would have brought back something like a shorthold provision to provide privity of contract between a landlord and a tenant who wish to enter into an agreement on a property, in the same way that one can agree to rent somebody’s car or caravan. The principle of privity of contract, which is fundamental to conservative beliefs, was enshrined in an amendment that was deemed to be a wrecking amendment. I hope that that amendment, which was signed by more than 50 colleagues, will be resurrected in the other place, where the rules are different, that the principles enunciated in it will be taken forward and that the Bill will be further improved in the other place.
We need to ensure that we support conservative legislation that is designed to increase the size of the rented sector rather than shrink it. I fear that the inevitable consequence of this—we have already seen a bit of this in Scotland—will be that, because the Bill will reduce the supply of private rented accommodation, the cost of that accommodation will go up faster than the rate of inflation. The sort of people who have been campaigning in the alliance to which the hon. Member for Greenwich and Woolwich (Matthew Pennycook) was referring, will then say, “Stop there! We must have rent controls and price controls over rents”, because one set of regulations creates another set of regulations. Then we will be back to where we were in 1977.
That consequence is likely to flow from what we are approving tonight, and I just hope that it will be amended in their lordships’ House so that the supply-side reforms, which are so fundamental to the 1988 legislation, can be carried forward and we can give fresh confidence to people who are thinking about entering the private rented market, and fresh confidence to those already in it so that they do not withdraw from it as they are doing at the moment in increasing numbers. It does not help constituents who are trying to get rented accommodation if that accommodation continues to escalate in price.
I hope that, if there is to be a response to this short debate, we will be able to have a guarantee that under no Conservative Government will we ever have any system of rent controls. I hope that the Government will be able to assure us that, as a consequence of this legislation, we will be able to increase the size of the private rented sector rather than diminish it further.
I want to conclude by congratulating my hon. Friend the Member for Totnes (Anthony Mangnall) on having waged his campaign, although it was not a one-man campaign because a large cohort of people behind the scenes supported of his amendments. As a result of those amendments, the Bill has been improved significantly. One of his amendments was not selected, and that is still, in my view, unfinished business, but we should not shirk from congratulating him on having carried this campaign forward so effectively and successfully.
When the Bill comes back from the other place—maybe in another year and a half since it was first presented—we might be on the other side of a general election. Some of us might think it would be better if we did not have the Bill on the statute book by the time of the general election, but that is another story. I will not go into that now. Whenever the Bill comes back, I hope that it will be in an improved form and that even more of my hon. Friend’s amendments, which are well supported on the Government Benches, will be included in the text of the legislation.
Jacob Young
With the leave of the House, I would just like to confirm to my hon. Friend the Member for Christchurch (Sir Christopher Chope) that we do not intend to introduce any sort of rent controls.
Question put and agreed to.
Bill accordingly read the Third time and passed.
Prevention and Suppression of Terrorism
(7 months ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Mr Deputy Speaker (Mr Nigel Evans)
We now come to motion 3. The Order Paper notes that the draft order has not yet been considered by the Joint Committee on Statutory Instruments. I have now been informed that the Committee has considered these instruments and has not drawn them to the attention of the House.
The Minister for Security (Tom Tugendhat)
I beg to move,
That the draft Terrorism Act 2000 (Proscribed Organisations) (Amendment) (No. 2) Order 2024, which was laid before this House on 22 April, be approved.
I am grateful to the House for its consideration of this draft order, which will see the Terrorgram collective proscribed. The Government assess that the Terrorgram collective operates as an organisation, in accordance with the guidance on the meaning of that term found in section 121 of the Terrorism Act 2000.
The Terrorgram collective is the sixth extreme right-wing group to be proscribed, along with 75 groups proscribed for extreme Islamist or other ideologies. This is based on the level of direction provided by its leadership for the preparation of propaganda campaigns and the co-ordination between the network to advance its neo-fascist, accelerationist ideology.
Article 2 of this order adds the Terrorgram collective to the list in schedule 2 to the 2000 Act as a new entry. Having carefully considered all the evidence, the Government have concluded that the Terrorgram collective should be proscribed. While I am unable to comment on specific intelligence, I can provide the House with a summary of the group’s activities.
The Terrorgram collective is a transnational online network of neo-fascist terrorists who produce and disseminate violent propaganda, with the aim of radicalising readers and encouraging individuals to commit acts of terrorism. The message of hatred it preaches is one of extreme white supremacism. It calls not just for death and violence but for the collapse of western democracy itself, so that the collective might build a whites-only world in its place.
The Terrorgram collective has published three long-form, magazine-style publications, as well as a 24-minute documentary video. This propaganda is designed to incite violence towards perceived representatives of the establishment, ethnic minorities and other minority or religious communities. It not only celebrates the abhorrent cycle of violence and death that it means to inspire; it worships it, glorifying the collective’s genocidal peers as so-called “saints” and encouraging readers to commit similar acts. The Terrorgram collective specifically celebrated Anders Breivik, who killed eight people with a car bomb before shooting dead 69 people at a youth camp in Norway in 2011, as a so-called “saint.”
The Government have determined that the Terrorgram collective is an organisation concerned in terrorism. For example, in February 2023, a key contributor to the Terrorgram collective was arrested for allegedly plotting attacks against the Baltimore power grid. The Terrorgram collective is involved in preparing for terrorism through the dissemination of instructional material in its propaganda. It promotes and encourages terrorism through its publications, which contain violent narratives and material that glorifies previous extreme right-wing attackers and encourages those who consume the content to commit similar actions.
In October 2022, an extreme right-wing terrorist attacked a gay bar in Slovakia, resulting in the murder of two people. In his attack manifesto, the perpetrator credited Terrorgram’s publications. Since the attack, Terrorgram now glorifies him as an example to follow. The decision to proscribe Terrorgram demonstrates this Government’s commitment to defending the security of the LGBT community.
Terrorgram holds vile antisemitic views. It has published propaganda material aimed at inciting violence against Jewish communities and the state of Israel and, most recently, celebrated Hamas’s attacks on Israel, including endorsing the use of terrorism to target Israel and Jewish communities. Reporting indicates that Terrorgram has advocated for attacks on Israel’s critical national infrastructure. This proscription further demonstrates our unwavering commitment to fighting antisemitism and our unfaltering support for the Jewish community.
The safety and security of the public is paramount. It is, and always will be, this Government’s No. 1 priority. The ongoing fight to counter and contain terrorism in all its guises is an essential part of that mission, as is standing up for the values we cherish. When our collective security and values are threatened by groups such as the Terrorgram collective, we will not hesitate to act. I therefore urge Members to support this proscription.
I commend the draft order to the House.
Dan Jarvis (Barnsley Central) (Lab)
I thank the Minister for his statement and I thank civil servants at the Home Office for briefing me in advance of the debate.
Today’s proscription order for the Terrorgram collective, also known as just Terrorgram, is brought about by the exceptional men and women who serve in our intelligence and security services, in government and in our police. They perform a vital public service, and I thank them for it. We on the Opposition Benches will always work with the Government on these crucial matters of national security in order to stop the malign forces that seek to harm us, divide us or undermine our way of life.
Let me say at the outset that the Opposition support the proscription of Terrorgram as a terrorist organisation. Terrorgram takes the form of an online network of neo-fascist terrorists, who produce and share violent material that incites violent, extreme right-wing activity here in the UK and abroad. Even after our nation’s existential fight and victory over fascists almost 80 years ago, their threat to our security and our way of life has never completely gone away. We must always defeat fascism wherever we find it. That is why it is important that the order before us will amend schedule 2 to the Terrorism Act 2000 to add Terrorgram to the list of proscribed organisations. Doing so will make it a criminal offence to engage with the Terrorgram group, to promote support for it or to display its logo.
Terrorgram’s name derives from it being a group on the encrypted messaging platform Telegram, so we very much welcome the innovative approach to proscription outlined by the Minister. Even though Terrorgram is without a physical presence in the UK, its online presence, which glorifies terrorist acts and shares bomb-making materials, is a threat to our national security. The Minister cited a number of examples. I will refer to the attack in Slovakia in 2022, where the threat posed by Terrorgram became a deadly and tragic reality, when a 19-year-old assailant killed two people in an LGBT nightclub. He later took his own life but left a manifesto that thanked Terrorgram for
“building the future of the white revolution one publication at a time”.
We approve of the Government’s innovative action that will lead to the rightful proscription of Terrorgram. Within legal frameworks, there must be an approach that is relentless, agile and cunning to defeat all terrorist groups. Regardless of whatever warped ideology they peddle, violent extremists across the spectrum continue to use online platforms to radicalise their support base and organise their activities. We must prepare to proscribe more online groups, if that is necessary.
These online groups—online cesspits—regularly feature violent misogyny, an abhorrent trait that is a common feature in all terrorist ideologies, including extreme right-wing terrorism. As the Minister will know very well, the Prevent programme currently does not recognise violent misogyny and incel ideology as extremist ideologies. Will the Minister provide an assurance that the appropriate frameworks are in place to bridge the gap between violent misogyny and recognised extremist ideologies?
Today’s proscription of Terrorgram comes after the Secretary of State for Levelling Up, Housing and Communities published the Government’s definition of extremism in March. Although long overdue, we believe this definition of extremism is welcome and will lead us towards better countering some of the causes of terrorist threats to our country. As the Minister would acknowledge, the new definition was always intended to be the beginning of a process to better counter extremism, not the process in its entirety. What progress has been made between the Home Office and the Department for Levelling Up, Housing and Communities on publishing a list of organisations designated as extremist?
Terrorgram’s corrosive influence must also be viewed in the wider context of rising hate crime across the UK.
Since 2018, police forces in England and Wales have recorded increases in reports in four out of the five hate crime strands—race, sexual orientation, disability and transgender. Furthermore, since 7 October, the Community Security Trust has recorded a 147% increase in antisemitic incidents compared with 2022, and Tell MAMA has recorded a 335% increase in anti-Muslim hate cases in the past four months alone.
The Minister will know that the last hate crime action plan was published eight years ago. He knows more than others that proscription is an incredibly important means to counter extremist activity, but it is not the only means. A new hate crime action plan could be part of the arsenal to disrupt and defeat violent extremism. Can the Minister say what plans the Home Office has to publish an updated one?
To conclude, proscribing Terrorgram is the right thing to do for our national security. It was no longer tolerable or safe for the poison of Terrorgram’s violent ideology and terrorist material to be in reach of malign actors in our country. It had to be treated with the strongest and most robust antidote: proscription. We welcome that the UK is the first country to do so. No Government can ever relent in their determination to ensure that, as a country, we are always one step ahead of those who seek to harm us, to divide us or to undermine our way of life. This House must always stand united in protecting the public whom we strive to serve and protect. That is why we strongly support this proscription order.
Alison Thewliss (Glasgow Central) (SNP)
The SNP firmly supports this order as well, and believes that no organisation should be free to spread extremist hate and encourage violence in the UK, so it is absolutely right that the Terrorgram collective is proscribed as a terrorist organisation. I heard the Minister mention that Terrorgram is the sixth extreme right group to be proscribed and, as I understand it, it is the first online network to be proscribed in this way, and I welcome that he has taken that step.
Tech Against Terrorism, which also welcomed this proscription, has been tracking and reporting on Terrorgram’s content for some time and has stated that it sent alerts on this content to seven different platforms, only four of which have removed it. I understand from the explanatory notes that this order now gives the Government the power to compel platforms to take down such content. Has the Minister had any communication with Tech Against Terrorism, or has he instructed these platforms to take down this content, because it has no place on them, especially given this proscription order from today?
I understand that the Huffington Post has named a woman in the US, Dallas Humber, as Terrorgram’s propagandist and a narrator of some of its content. As this is, to some extent, an issue of human rights abuses, is it possible that we can look at proscribing an individual under our existing Magnitsky legislation? Could the Government put restrictions on this woman, who has been named as perpetuating hate online, or any other individuals who are involved in setting up this site? These people should not be allowed to travel around the world. If this women were to travel to the UK, for example, she could speak to people in the real world as opposed to just online. Will the Minister take that away and consider whether something of that kind is indeed possible?
Can the Minister give us an up-to-date assessment of far right groups, as the Government and the various intelligence agencies are picking up on this and giving it such a high priority, especially given the scenes that we saw on the streets of London earlier this week? Extremism does not begin with organisations such as Terrorgram or with the atrocities that people inspired by Terrorgram have committed. It starts at a much lower level, and people, via the algorithms that these sites use, get exposed to more and more extremist content. Has any work gone into tracing how some of these people got to very extreme content, and what steps could have been taken to remove content at a less extreme level before they got exposed to something that radicalised them to the point of carrying out atrocities?
There is prevention work to be done here. I have seen various cases where somebody came in with a concern about lockdown and is now a serious anti-vaxxer because they saw more and more extreme content, and then got exposed to more far-right content and more dangerous content as a result. There is a job of work to be done to deradicalise people who have been exposed to such material. What are the Government doing, and what thoughts do they have on how they might go about deradicalising those who have been exposed to far-right content? It is a very serious threat to our democracy and the safety of people, particularly minorities, in the UK. I do not think that it is quite being taken seriously enough.
Jim Shannon (Strangford) (DUP)
On behalf of the Democratic Unionist party, I add my support to the Minister for his proscription of Terrorgram. He clearly outlined the issues that are pertinent to the announcement. I express concern over the radicalism that seems to persist throughout society. It seems to happen in ways that I, perhaps from a non-technical point of view, cannot really understand, but I understand that the name of the organisation—Terrorgram—tells us all about this group. Its very intention is evil and wicked. Its intention is to kill and to maim. The Minister’s announcement today encourages us, as he often does when it comes to these matters.
The Minister’s announcement that the UK is the first country in the world to proscribe the Terrorgram collective is positive, and proactive by him and the Government. This group spreads vile propaganda, with evil—indeed, murderous—intent, and there is absolutely no place for it in modern society. The Minister rightly reminded the House, and myself in particular, that the group is anti-Israel and anti-Jewish. Terrorgram’s hatred of Israel and the Jewish people is to be condemned unreservedly. I commend the Minister on the Government’s response and their support of Israel within the law, which they have given the whole way through. On this issue, the response is critical. I was a friend of Israel when I was in the Northern Ireland Assembly some 14 years ago—I was there for 12 years—and I have been a friend of Israel here. I am therefore encouraged by the Minister’s comments in relation to the support that he has given the Israeli people and the Jewish people in the face of downright hatred. The Terrorgram collective must be proscribed, and it must be made criminally impossible for them to operate in any fashion, so today’s announcement is good news.
Does the Minister agree that social media plays a massive role in the distribution of horrific comments and opinions? While it may not entirely be the issue today, does he agree that much more needs to be done legislatively for platforms such as Telegram, and indeed others that are used by people to spew hatred, whether that be TikTok, Twitter or any other? I unashamedly say that I do not have the ability to do technical things, but I am pleased that others do. Technical change can happen at breakneck speed. Does the Minister intend to ensure that when anything comes on the radar of our Government, Parliament will respond immediately to proscribe it? Perhaps he can give us some idea of the timescale when something comes to the attention of the House, the security forces or others. Will he respond in an urgent manner?
Again, I thank the Minister and our Government for the proactive way that they respond. It encourages me as a citizen, and on behalf of the people of Strangford, the people of Northern Ireland, and indeed all the people of this great nation that we love.
Tom Tugendhat
I welcome all the comments made, particularly by my hon. Friend the Member for Barnsley Central (Dan Jarvis). He has been a friend for many years and we have worked together on many different operations in many different parts of the world—although very few were quite as vile as this one, I am afraid; Terrorgram is a genuinely horrific organisation. He raised some interesting points about the protection of the Jewish community, and he is absolutely right. The Community Safety Trust, which he and I both support, will receive an additional £54 million in funding to continue to provide measures until 2028. As he knows, that commitment was made only a few weeks ago by the Prime Minister.
My hon. Friend also quite rightly raised the incidents of anti-Muslim hatred that Tell MAMA has recorded. He is completely correct that we have sadly seen an increase in that area as well as in antisemitism, and he will know that we have also been very clear that those organisations, mosques and schools that require extra support and protection can get it from the Home Office—indeed, many have been applying, and I have had the privilege of ensuring that they are able to get the funding they need for their own security, to prevent harm to anybody in the Muslim community as well.
I want to touch briefly on some of the areas raised by the hon. Member for Glasgow Central (Alison Thewliss), who made some interesting points about an individual. If she will forgive me, I will not speak about that individual in particular, but I will say that proscription works against organisations and is not an individual power. However, she is also aware that sanctions do work against individuals and, where we are aware that individuals are connected to such hateful organisations—certainly if they are connected to proscribed organisations, as I am confident Terrorgram will be very shortly after this debate—there is no way that somebody like that would be, in the legal term, conducive to the public good, and there is no way that they should be allowed access to the United Kingdom.
The hon. Lady also raised an interesting point about St George’s day. I must say that I have been to many St George’s day lunches, at the very generous invitation of individuals who, when I was still in uniform, used to be very kind. I can see my hon. Friend the Member for Barnsley Central remembers them too. We used to get invited to lunches in various parts of the country—my latest was in West Malling—and I may say that while we sat down for lunch at midday, I do not remember when we stood up from lunch. That was a great day of celebration and a fantastic moment for all of us. What we saw yesterday was no celebration of St George’s day or English national patriotism; it was simply thuggish violence and it has no place on our streets.
On tech, the hon. Lady is absolutely right that, sadly, it is very easy to go down a rabbit hole or a tech black hole that leads to an amazing warren of hate-filled conspiracy theories. This is an area where tech companies themselves have a responsibility to play their part. I have engaged with them in many different areas, including child sexual abuse online, which she knows I have devoted a lot of time to combating. However, this is another area where she is quite right that there is more work to be done and more responsibility on those who are profiting from the attention of individuals across the world.
The last point I want to make is on the definition of extremism. My hon. Friend the Member for Barnsley Central knows very well that this is an important piece of work. There is more work to be done on the actual list, as he rightly says, but I will bring it forward as soon as we ready to do so. He will understand that we want to make sure it is as robust and complete as it possibly can be, but he will be among the first to know as soon as it is ready.
I have seen some truly harrowing material in this job, but the scenes from the attack on the gay bar in Slovakia, where innocent people were gunned down in cold blood, ranks among the absolute worst. The manifesto written by the perpetrator advocated the murder of gay people, Jewish people and black people—not for anything they have done, but for who they are. Make no mistake: this was not just an attack on the LGBT community, and the Terrorgram collective is not just a threat to our national security. This was an attack on the values and principles that define who we are, and who we are as a nation. The Terrorgram collective is a threat to our society. There is no place whatsoever for the vile ideology espoused by the Terrorgram collective. We will not tolerate it. Proscribing it is a proportionate and necessary step in our ongoing effort to tackle terrorism, protect the public and defend our values. We will never relent in showing terrorism for what it is: a poisonous, corrosive force—
Mr Deputy Speaker (Mr Nigel Evans)
Order. Before the Minister sits down, I have to put the Question on the deferred divisions motion.
Motion made, and Question put forthwith (Standing Order No. 41A(3)),
That, at this day’s sitting, Standing Order No. 41A (Deferred divisions) shall not apply to the Motion in the name of Secretary James Cleverly relating to Prevention and Suppression of Terrorism.—(Aaron Bell.)
Question agreed to.
Debate resumed.
Main Question again proposed.
Tom Tugendhat
And with that, Mr Deputy Speaker, I commend the order to the House.
Mr Deputy Speaker
I was rather hopeful that you would just get in under the wire, but thank you none the less.
Question put and agreed to.
Business without Debate
Petitions
Rob Butler (Aylesbury) (Con)
I rise to present a petition, on behalf of my constituents, about water booster proposals in Buckland.
Thames Water currently plans to site a new booster station right next to traditional rural cottages, creating an eyesore and potential safety risks on the small country road that provides access. Hundreds of residents are strongly opposed to this proposal and the parish council has proposed an alternative site. The petition states:
“The petitioners therefore request that the House of Commons urge the Government to ensure that Thames Water locates this new water booster station well away from residential properties.
And the petitioners remain, etc.”
Following is the full text of the petition:
[The petition of residents of the constituency of Aylesbury,
Declares that Thames Water should be required to make residential amenity the top priority when considering the location of a new large water booster station in Buckland which will have a severe negative impact on the lives of those living in neighbouring properties.
The petitioners therefore request that the House of Commons urge the Government to ensure that Thames Water locates this new water booster station well away from residential properties.
And the petitioners remain, etc.]
[P002961]
Mrs Emma Lewell-Buck (South Shields) (Lab)
I rise to present a petition on behalf of my constituents regarding the recommendations of the infected blood inquiry. The lives of those infected and their families have been changed forever by that tragedy. I commend all campaigners for their tireless fight for justice and accountability, including my right hon. Friend the Member for Kingston upon Hull North (Dame Diana Johnson). With two victims of the scandal dying every week, the Government must get on and deliver this long overdue justice.
The petition states:
The petition of residents of the constituency of South Shields,
Declares that people who received infected blood and who have suffered as a consequence have, along with their families, waited far too long for redress.
The petitioners therefore request that the House of Commons urges the Government to implement the recommendations in the Second Interim Report of the Infected Blood Inquiry without delay.
And the petitioners remain, etc.
[P002963]
Access to Banking: Devon
(7 months ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Simon Jupp (East Devon) (Con)
I am delighted to have secured this important Adjournment debate on access to banking services and banking hubs in Devon. I welcome the Minister and colleagues to the debate.
Take a quick stroll down your nearest high street, Mr Deputy Speaker, and you will notice that there are fewer bank branches than there were in years gone by—far fewer. In 1992 there were 19,000 bank and building society branches in the UK. In 2022 the number of bank and building society branches had fallen from 19,000 to 8,000. That decline has not happened more quickly on any particular Government’s watch: the fall has been consistent and steady over the past 30 years. However, we have reached a tipping point; bank branches are getting scarce.
We notice when bank branches are gone altogether from our high streets. People cannot deposit cash or pay in cheques; businesses and charities cannot pop to the branch to refill their tills or bank their takings at the end of the day; and we no longer have friendly faces to talk to for financial advice. When bank branches are gone, people have to travel miles to apply for a loan or to arrange third-party access to start bereavement proceedings, for example. People tell me that when those branches are gone, managing their money becomes more difficult, if not impossible. People in my constituency travel to cities and towns such as Exeter or Honiton for their nearest branch. Every time a bank decides to shut its high street branch, my postbag fills up. I share those people’s frustration—I get it.
Jim Shannon (Strangford) (DUP)
I commend the hon. Member for securing the debate on this massive issue. Does he agree that banks’ abdication of their responsibilities to rural communities, which often have the worst transport, infrastructure and broadband connections, cannot be paved over with a users’ guide to online banking? At the very least, a hub that is accessible throughout the day and in the evening must be the minimum standard of service that any national bank must be required to provide for its customers.
Simon Jupp
The hon. Gentleman is absolutely right. I personally would benefit from a “how to bank online” guide, because it can be quite confusing, even for someone who is relatively technical. I thank him for his point.
It is not enough to say that bank branch closures are commercial decisions. Yes, the Government cannot intervene, and nor can I as an MP stop bank branches from closing, as much as I try. But we have reached a tipping point where enough is enough. Banks must provide core services to loyal customers on our high streets and stop washing their hands of their customers’ needs.
The banks claim that their branches on our high streets are increasingly outdated: they say that more customers are moving online and going cashless. That is broadly true, but it is not an excuse simply to pull up sticks and disappear. In fact, I believe that bank branch closures across the UK are forcing people to change their habits, but people still need access to cash and face-to-face banking services—the demand is definitely still there. To give a couple of statistics, 27% of over-65s and 58% of over-85s rely on face-to-face banking. Some among the older generation are not technophobes. In fact, they may have valid reasons for not wanting to do online banking. According to research by Age UK, fear of being defrauded and a lack of IT skills are common reasons why many people prefer face-to-face banking.
If the need for face-to-face banking is still there, what is the solution? That brings me to the second part of my speech.
Mrs Pauline Latham (Mid Derbyshire) (Con)
My constituency has a banking hub in Belper, which has become a lifeline for businesses on the high street, particularly small businesses, because they can access cash and pay cash in. I encourage my hon. Friend to keep campaigning for a banking hub, because they help every section of society: older people, younger people and businesses. That banking hub has rejuvenated the high street in Belper.
Simon Jupp
I thank my hon. Friend for her intervention. It is almost as if she knew what I was about to say, because I was about to move on to the topic of banking hubs, which are a relatively new concept. I think of them as shared banking spaces: they look a bit like a traditional bank branch, but unlike a traditional branch, those hubs are available to everyone. They offer counter services: customers from any bank can withdraw and deposit cash, collect change, deposit cheques, pay bills and make balance inquiries. They also offer private spaces for specific banks, where customers can speak to someone from their own bank or building society about more complex issues such as mortgages, loans and pensions. That is not really something that people want to do online.
Banking hubs are an industry-led solution to the demise of physical branches, but the Government have been clear that the delivery of hubs must speed up. They have done important work to legislate to protect access to cash, not least through the Financial Services and Markets Act 2023. I look forward to hearing the Minister’s remarks in this debate and hope to hear about the progress being made in rolling out more banking hubs across the country. I know that he has had discussions with UK high street banks, and has also held roundtables with industry and MPs about banking hubs.
As East Devon’s MP, I have been holding meetings locally to see how we can set up banking hubs in the constituency. Last year I launched a local campaign. Lloyds in Sidmouth, the last bank in town, was going to shut its doors. That is where I live, and local residents and I wanted to send a clear message to the banks that they should staff a banking hub in Sidmouth. Hundreds of people got in touch through my survey and the results were quite startling: 81% of residents who responded said they had visited a bank branch in the past six months, and 96% said they wanted staff from their own bank in the hub. On the question in my survey:
“What is the most common way that you access banking services”,
46% said:
“In branch or in person”,
while 52% said “Online” and only 2% said “Telephone”. My survey showed a clear demand for face-to-face banking, and the need for a banking hub in Sidmouth.
Here is what some local residents told me when Lloyds announced it was closing its branch in Sidmouth. Mary said:
“We wonder why it is Sidmouth, with all the holiday crowds, folk festivals, regatta and jazz festivals that the last bank is set to close. There seems to be no logic. Do these decision makers have a rusty old pin they use to decide which banks stay and which goes?”
Susan told me:
“I am very upset to discover Lloyds bank is closing. I wonder what customers are supposed to do when they need paperwork either for power of attorney or closure of accounts after a death?”
Pauline told me:
“I very nearly got scammed. I am not technology minded and do not bank online. I received a very convincing text message which resulted in my going to my bank to make a payment. If it wasn’t for the lady I spoke to in the bank I would have had my account wiped clean. She was very much on the ball, so I was saved. This shows the importance of having a bank in Sidmouth.”
Local residents such as Mary, Susan and Pauline were delighted when Sidmouth’s banking hub opened its doors last month. It has been very popular, but is it perfect? No—although I would like to pay tribute to the staff, who are fantastic—because it is not yet quite what the town needs, because it needs a cashpoint. It needs to have a 24/7 ATM available outside, with a printer so that residents can get mini-statements, as well as a trial of Saturday opening hours if at all possible. However, I want to thank the team at Cash Access UK and the building contractors for getting the hub up and running so successfully before Lloyds closed its doors. I was also pleased to visit Axminster’s banking hub when it opened. I heard feedback from local residents and businesses about how important it is for that town. More banking hubs such as the ones in Sidmouth and Axminster are needed in Devon, and I want to put that firmly on the record in today’s debate.
I am currently working with local communities to try to get banking hubs in towns such as Exmouth, Budleigh Salterton and Ottery St Mary. Exmouth, the largest town in Devon, will need a banking hub sooner rather than later, and I have already made the case for one. Halifax’s branch in the town will close this summer, which will leave just three banks remaining in Exmouth.
The case for a banking hub in Budleigh Salterton is also strong. It has been without a high street bank due to closures in recent years. The last bank in town, Lloyds, closed in January 2019. The town’s population is significantly older than the national average. Local residents and businesses have only the post office and the Co-op to access over-the-counter banking services. I have seen the queues, and it is not great, although it is a small shop and the staff work incredibly hard. That is why I have made a formal request for a banking hub, alongside a local councillor, Henry Riddell.
I know the Government want the delivery of banking hubs to be sped up, and I hope that Exmouth, Budleigh Salterton and Ottery St Mary will be in line for banking hubs too. I would cite these examples as to where a problem lies. I believe the criteria for whether an area should get a banking hub must be relaxed, because the bar is far too high at the moment. Generally, in order to get a banking hub a town needs 7,000 people within 1 km of the centre and at least 70 retailers. It also needs there to be no banks at all—in other words, the last bank in town must be closing or already have closed. Too often it takes the last bank in town to shut before the industry gets its act together and opens a banking hub.
On this point, Exmouth will not get a banking hub under the current criteria until 2028. Nationwide told me when I visited last week that it will keep its Rolle Street branch open until at least 2028. I of course welcome that commitment by Nationwide, which is playing fair by the high streets, but that commitment in effect means that a banking hub will not open in Exmouth while the branch remains, which makes no sense to me. We have to consider the size of Exmouth, and we also have to consider the number of banks the town used to have. We do need to look again at the criteria and to lower the bar.
I recently co-signed a letter from my hon. Friend the Member for Hertford and Stortford (Julie Marson) to the Financial Conduct Authority to unlock more banking hubs. The FCA will decide on new rules in the third quarter of this year, and I will be watching that like a hawk. This could be an important turning point, so that even more banking hubs can open. As I have said, more banking hubs such as those in Sidmouth and Axminster are badly needed in my part of Devon. People should be able to access banking services on our high streets.
I am delighted to have secured today’s debate and look forward to hearing the Minister’s remarks.
The Economic Secretary to the Treasury (Bim Afolami)
It is an absolute pleasure to respond to this debate, and I thank my hon. Friend the Member for East Devon (Simon Jupp) for securing it.
We know that our colleagues in this place all work hard for their constituents, but some go the extra mile. I would say that on this subject, like so many others, my hon. Friend is an exemplar of what can be seen in British politics and in this Parliament. His work on securing access to banking services in his constituency is second to none. I appreciate the strength of feeling across the Chamber on this topic. I share the concerns of many Members in light of the more than 600 closure announcements we have seen in the past year. Banks and building societies are essential in people being able to manage their money on a day-to-day basis, and they hold a privileged and important place in our society. As such, firms must ensure that all customers, wherever they live, have appropriate access to banking and cash services.
We need to be grown up about this issue. We all recognise, as my hon. Friend made clear in his remarks, that the world of banking has changed greatly in recent years. Reflecting that shift, customers have increasingly moved towards online and mobile access. That shift is apparent across many areas of the economy and society, not just in banking. Recent Financial Conduct Authority data shows that only 21% of British adults still regularly use a bank branch. In contrast, almost nine in 10 adults banked online or used a mobile app.
It is right that firms continue to innovate in response to changing customer habits and ensure that customers across the UK benefit from the latest developments in technology, but those changes in technology—this is a fundamental point, and I believe my hon. Friend will share my view—do not mean that access to in-person banking and cash services are no longer required. They remain vitally important to many people up and down the country in our constituencies. In times of need, or when more personalised support and services are required, such as in the examples that my hon. Friend mentioned, speaking to a real person face to face can be essential. More broadly, the wider societal benefits to our constituencies, our high streets and our market towns of bank branches are critically important.
In the light of those things, the Government have taken decisive action over recent years to ensure that access to cash is protected through the Financial Services and Markets Act 2023. It places a responsibility on the FCA to seek to ensure reasonable provision of cash withdrawal and deposit facilities, including free services for personal current accounts. Following the passage of that Act, the Government published a policy statement setting out our policies on access to cash. The FCA must have regard to that policy statement as part of its regulatory approach. The statement set out that people and businesses should be no further than 3 miles from a free cash access point.
As my hon. Friend mentioned, the FCA has recently held a consultation on its proposed regulatory regime in this area. Under the proposals, banks and building societies that are designated by the Government will be required to assess and fill gaps or potential gaps in cash access provision that significantly impact consumers and businesses.
As well as access to cash, the FCA has guidance on bank branch closures. While decisions on individual closures are rightly a commercial issue for firms—we do not want Government Ministers deciding where bank branches go, tempted and fascinated as I would be by that process—we expect firms to adhere to the FCA guidance. That guidance is clear that banks and building societies must ensure that they carefully consider the impact of planned closures on their customers.
Where firms fall short of those expectations, the FCA has the power to ask for closures to be paused or for other options to be put in place, and it will do so. It is important to make the point that the industry has made great strides to provide a range of initiatives through alternatives such as agreements with the post office or community outreach programmes in locations such as community centres, libraries and village halls. Shared banking hubs are, as we have heard, another exciting and popular innovation. Banking hubs are a clear example of pioneering, industry-led innovation to protect access in a changing landscape.
As my hon. Friend the Member for Mid Derbyshire (Mrs Latham) made clear, banking hubs can be a lifeline to communities. I am pleased that the Sidmouth hub has been opened, where my hon. Friend the Member for East Devon had the privilege of cutting the ribbon—or whatever they had him cut—but it is important that the House, and indeed everybody, knows that banking hubs can be a modern 21st century way to ensure access to cash and banking services. The Government strongly support this innovation.
These hubs help people and businesses withdraw and deposit cash, pay in cheques, and check their balance over the post office counter, and also provide a community banker who can help people with wider banking services, from making a transfer to providing support for fraud and scam victims. My hon. Friend mentioned victims in his constituency who he has been working with.
Hubs are deployed by Cash Access UK in response to a Link assessment of the community’s cash needs. To ensure there is no gap in the provision of services, the industry has committed that if a hub is recommended, the branch it replaces will not be closed for up to 12 months until that hub is open, and if there is a delay beyond that, a temporary hub will be put in place. To date, over 120 hubs have been announced across the country and 47 are open. This is a welcome programme, and it is a priority to me that the industry continues to deliver on this but speeds it up.
UK Finance, the trade body representing the industry, has recently committed to a total of 225 hubs to be opened in the next 18 months. Like my hon. Friend and many in the House, I will be watching and holding it to account, and making sure that those hubs open as quickly as possible.
Miss Sarah Dines (Derbyshire Dales) (Con)
As the Minister knows, I represent Derbyshire Dales, where we recently had the closure of the last bank, the National Westminster bank, in Bakewell. That was the last bank in the Peak district. My concern is that the criteria for hubs exclude us, because Bakewell is too small: it has only 3,000 to 4,000 people and under the present criteria there have to be 7,000. What might work in Belper or another part of a district or county like Derbyshire, or indeed Devon, might not work elsewhere, meaning that people will be left behind. Will the Government look with the FCA at whether the criteria should be changed to take into account areas that surround a smaller town, where that smaller town might still be vibrant but not big enough on its own to qualify for a hub? What is the future in this area?
Bim Afolami
I thank my hon. Friend for her point and I should not have left her out when talking about the committed Members of Parliament who work on this area. I pay tribute to her for the number of times she has questioned me, badgered me and advocated for her community and constituents on this subject, and today is another good example. If she waits a few minutes, I will address her specific points directly.
It is important that hubs provide a good service to customers and the industry evolves its offer as it learns from the roll-out of the 47 hubs that are already open. Following recent discussions I have held with the UK high street banks and my roundtable with industry representatives and MPs last month, I am pleased that the industry has agreed to improve the services in hubs to ensure they are a genuine alternative to bank branches. My hon. Friend the Member for East Devon referred to some improvements he would like to see in his constituency.
Participating high street banks have committed to a range of improvements to the banking services provided in hubs, such as: first, having an agreed consistent and improved level of service provided by all firms; secondly, ensuring that personal customers do not need to bring their own devices to access services; and, thirdly, trialling various new services such as a customer liaison service and Saturday openings. Those improvements will make a big difference to participation and, indeed, to how welcome banking hubs are. I am grateful for the constructive and positive approach that I have seen from industry in its engagement with His Majesty’s Treasury, recognising the needs of its customers. I have written to all MPs and to the Chair of the Treasury Committee on the package.
I turn to the point made by my hon. Friend the Member for Derbyshire Dales (Miss Dines). Firms have provided me with reassurance that they will continue to revisit the criteria for locations to be eligible for a hub to ensure that they reflect customer needs, and that they will do so in particular following the publication of the FCA’s response to its recent access to cash consultation. That is important, because rural areas and smaller places such as Bakewell sometimes lose out.
I know that the industry will be watching the debate and will take what I am saying seriously. Let us revisit the criteria in a sensible way to ensure that they take account of areas that need banking hub services but are not currently accommodated. That is very important, and I will work with the industry to see what it can do to deliver on what I have just said from the Dispatch Box. I believe that the measures set out in the package mark a significant step forward from industry in ensuring that customer needs are being met, but I reassure the House that I will continue to monitor the roll-out of banking hubs closely.
I am grateful that we have had another chance to discuss this important topic. While branch closures are a commercial decision—and it is right that they are—I strongly believe that all customers, wherever they live and whatever their age, should have access that is appropriate for them to banking and cash services. I am grateful for the engagement I have had from the sector and the FCA on this important issue. I thank again my hon. Friend the Member for East Devon for bringing the debate to the Chamber, and I thank my hon. Friends the Members for Mid Derbyshire and for Derbyshire Dales—Derbyshire is the theme there—for their contributions.
Question put and agreed to.
Deferred Divisions
Draft Sea Fisheries (International Commission for the Conservation of Atlantic Tunas) (Amendment) (No. 2) Regulations 2024
(7 months ago)
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The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Rebecca Pow)
I beg to move,
That the Committee has considered the draft Sea Fisheries (International Commission for the Conservation of Atlantic Tunas) (Amendment) (No. 2) Regulations 2024.
It is a pleasure to see you in the Chair this morning, Dr Huq. The regulations were laid in draft on 14 March 2024.
Atlantic bluefin tuna are present again in UK waters, increasingly in abundance after many years. That stocks have recovered is indeed good news. In 2021, the International Union for Conservation of Nature changed its assessment of bluefin tuna from endangered to least concern, which reflects the improving state of the stock. There is significant demand for recreational fishing access to bluefin tuna, which will boost tourism in coastal communities and deliver social and economic benefits. I am especially aware of that being a south-west MP, and it is particularly pertinent to areas off the coast in the south-west.
Following European Union exit, the UK joined the international convention for the conservation of Atlantic tunas. That is referred to as ICCAT, as is the international organisation that manages Atlantic bluefin tuna, the International Commission for the Conservation of Atlantic Tunas. Joining ICCAT enabled the UK to secure a bluefin tuna quota for the first time.
In line with ICCAT rules, this draft statutory instrument will enable UK fisheries Administrations to open catch and release recreational bluefin tuna fisheries. It will permit authorised recreational fishing vessels to target bluefin tuna by rod and line only, and on a catch and release basis. Without the legislation, the UK would be able to run only commercial and scientific bluefin tuna fisheries, preventing us from unlocking the social and economic benefits associated with the recreational fishing of this valuable species.
So far, UK fisheries Administrations have taken a cautious and measured approach to managing the bluefin tuna quota by running scientific catch and release tagging or CHART programmes over the past three years. Under the CHART programme, bluefin tuna were caught and released with a low incidental mortality rate. The programme provided valuable data on the social and economic benefits associated with recreational access to bluefin tuna. A trial commercial fishery for bluefin tuna ran in 2023 in UK waters. For 2024, the UK has been allocated 16 tonnes of bluefin tuna quota for recreational fishing, which amounts to about 100 tunas —obviously that depends on size. Fish will be caught and released, but the quota is needed to cover any incidental mortality.
The Marine Management Organisation expects to open a recreational fishery in English waters in 2024—this year. The Welsh Government are also considering opening a recreational fishery in Welsh waters. Those fisheries will run alongside further CHART programmes elsewhere in the UK, as well as the continued commercial bluefin tuna trial, which will run for its second year.
ICCAT requires any recreational targeting of bluefin tuna to be authorised. The UK fisheries Administrations currently do not have the appropriate powers to authorise recreational fishing of bluefin tuna. Therefore, the Government wish to proceed with the draft legislation to bring recreational bluefin tuna fishing into line with the ICCAT regulations.
This draft instrument updates and amends assimilated law, namely EU regulation 2016/1627, to provide a legal framework for the UK fisheries Administrations to authorise permitting regimes in their waters should they choose to do so, and to prohibit explicitly the unauthorised recreational targeting of bluefin tuna. The amendments are distinct from licensing requirements under section 14 of the Fisheries Act 2020, which apply only to commercial vessels.
The instrument will support the delivery of the sustainability and scientific evidence objectives of the 2020 Act. It also amends the Sea Fishing (Enforcement) Regulations 2018 to confer enforcement powers on the Marine Management Organisation and the inshore fisheries and conservation authorities. With an annual allocation of 16 tonnes of quota, bluefin tuna recreational fisheries are expected to generate about £25 million in charter fees and significant additional spend over the next 10 years in deprived, rural and coastal communities. That spend will increase if quota allocations increase, so this is obviously very important for many of our coastal areas. Fisheries will also contribute to our knowledge of the abundance of bluefin tuna in UK waters.
The devolved Administrations are supportive of the amendments made by the instrument. If it is not passed, there will not be enough time to open the bluefin tuna fisheries for the full 2024 season—the aim is to open them in early August—charter businesses will lose revenue, and there will be an increased risk of illegal fishing.
I hope I have reassured Members about the purpose and aims of the instrument, which will deliver socioeconomic opportunities to coastal communities. For the reasons I set out, I commend it to the Committee.
Daniel Zeichner (Cambridge) (Lab)
It is a particular pleasure to serve with you in the Chair, Dr Huq, and it is always a pleasure to see the Minister in her place. I have to say that I was rather expecting to see the fisheries Minister this morning, and I suspect that yesterday afternoon he was expecting to be here. I hope he is in good health.
I should say at the outset that the Whips need not worry: we will not oppose the instrument, as we welcome it. Only a few weeks ago, we discussed the Sea Fisheries (International Commission for the Conservation of Atlantic Tunas) (Amendment) Regulations 2024, and I was going to ask the fisheries Minister why the two instruments could not have been considered together. Perhaps the Minister can give us some insight into what is going on at the Department for Environment, Food and Rural Affairs at the moment, because it is a puzzle to some of us.
The Minister’s introduction was, as ever, thorough. We absolutely agree that the return of the magnificent bluefin tuna to British waters in recent years after a long period of absence is welcome. It is not entirely clear why stocks have been replenished so significantly. A range of environmental factors has been cited, such as the warming of waters around the UK, which has perhaps led to an increase in the supply of the fish that the tuna feed upon. Credit should also go to the international interventions, through the international convention for the conservation of Atlantic tunas, which the Minister mentioned, to ensure careful management of the number of bluefin tuna. That is particularly impressive, given that they are highly migratory and mobile.
We must learn the lesson from the absence of those important fish from our waters for so long, and take every appropriate measure to prevent a reversal of the successful interventions, perhaps through overfishing, and facilitate a continuing revival of the stock. Given the interest in fisheries management of pressured stocks in the south-west—particularly pollack—this should give us confidence that, when fisheries management is done well, it can be successful.
We recognise that it is very important for the UK to comply with rules and obligations relating to our membership of the international convention for the conservation of Atlantic tunas. We support the primary purpose of this SI, which is to ensure that the UK has in place a proper legislative framework and enforcement powers with regard to recreational fishing. As I say, we discussed commercial fishing a few weeks ago.
The UK Administrations apparently do not currently have the power to comply with the ICCAT requirement to prohibit any recreational targeting of bluefin tuna unless specially authorised. We agree that this legislative deficit should be rectified for several reasons, including safeguarding the return of bluefin tuna and ensuring that the fishing stock is sustainable. Stocks need to be carefully monitored.
The SI also allows recreational fisheries to open —the Minister referred to their social and economic benefits. I recognise that the fisheries are welcomed by many fishers. I appreciate the economic benefits that they bring, particularly to coastal areas that have been struggling, and also the valuable data collection that they facilitate, but I have some questions.
Will the Minister explain how the Department has arrived at the number of permits it has decided to grant? Can she reveal any future plans to modify the number of permits and the rationale for doing so? It is important that a robust structure is in place for managing the fisheries, enforcing the rules and preventing illegal fishing. Will she provide assurances that a robust management regime will be in place before the fisheries are opened?
Similarly, what plans does the Department have for a smooth transition from the CHART programme to the full catch and release recreational fishery, ensuring that the transition does not impact fish welfare and mortality rates? As several stakeholders have stated, targeting bluefin tuna needs preparation, the right gear, and a high level of skill in handling a large pelagic fish. It is not a simple matter.
Numerous responses to the consultation exercise expressed a desire for more guidance and training in catch and release techniques, which is not surprising as tuna can be a very big fish and it is sometimes extremely challenging to perform a catch and release operation properly. It is important that we do not damage the fish in the process of releasing them. I fear that without clear instructions and possibly training, that could happen. Does the Minister have statistics on survival rates in catch and release? Are there plans to issue clearer guidance and/or training on the catch and release of bluefin tuna?
I note that the introduction of charges for permits has been postponed. Can the Minister provide an explanation for the postponement and an update on any work that has been undertaken to determine the scope and scale of future charges, as well as how any charging income would be used? Perhaps she could shed some light on the overarching issue of how she and her colleagues arrived at the distribution of the UK’s quota between commercial and recreational fishing. I appreciate that she might not be in a position to answer everything today, so I will be happy if she writes to me later.
We greatly welcome the fact that now the stocks of bluefin tuna are sufficiently replenished we are permitted a quota and we are in a position to open the fisheries. We will not oppose the legislation and will look for it to be successful in ensuring that the numbers of bluefin tuna continue to rise and that the new fisheries thrive.
Rebecca Pow
I welcome the shadow Minister’s support. I hoped he would support the regulations given his interest and background in coastal issues, so that is positive. He and I agree that this legislation been much called for, is extremely welcome and will make a big difference to our coastal communities, which face many challenges. Anything we can do to help them is welcome.
I will make my best effort to answer the shadow Minister’s questions. I am standing in for the Minister for Food, Farming and Fisheries, so if I fail to answer any of the questions, my team will make a note of them and we will get back to the hon. Gentleman, but I shall do my best.
The shadow Minister asked why this instrument was not combined with the Sea Fisheries (International Commission for the Conservation of Atlantic Tunas) (Amendment) Regulations 2024. This instrument needed its own time. It is very important, and to include it with another instrument was not appropriate. We wanted this instrument to be fully dealt with because so much research, as the hon. Gentleman knows, has gone into it. We have had trials and a lot of people have fed into this, so it is important to give it its own time. The other regulations dealt with an administrative amendment, as he knows, to bring bluefin tuna management into line with ICCAT requirements. It was not appropriate to combine the two instruments.
The shadow Minister asked about the number of permits. Those are based on a fisheries model used to forecast tuna mortality for a given length of season and number of permits. The whole model has been developed with the industry and a lot of discussion has taken place with the MMO, Cefas—the Centre for Environment, Fisheries and Aquaculture Science—the Angling Trust and fishermen themselves, so I hope that that answer satisfies him.
The hon. Gentleman and I agree that it is really good news that the stocks have recovered. That demonstrates —this relates to matters that I particularly dealt with as the previous marine Minister—that if the right science is involved, so that we know what our fish stocks are, and then the right management is put in place, it is possible for our seas to recover. We know that from our marine protected areas—that is why they are so important —and our highly protected marine areas. This situation is a good demonstration of it, because taking the right action has allowed the stocks to recover, although there will be an impact, which we do not quite know yet, in relation to climate change and warming seas. Much of the food for the tunas—the herring and mackerel that they eat—has moved, which probably has some link to climate change or change in currents. That is why it is so important to monitor our stocks and keep an eye on what is happening.
The hon. Gentleman mentioned welfare. Obviously, that issue has been carefully considered. Natural England has been involved in the code of conduct on welfare, and a lot of consultation has occurred to ensure that we have the right measures in place, in relation to the fishing, to reduce any mortality. The evidence from the trials shows that having the right training and advice for the skippers and those who will be taking part in the recreational fishing can really reduce the mortality rates. That is why the training programmes are so important and everyone is being encouraged to go on them. It is so that when they apply for and get their permit, we know that the whole industry will be conducted responsibly, with the best welfare in mind.
Consideration has included the type of hooks used. The advice is to use circular hooks, which do not go as far down the fish’s throat and cause less damage. All that was researched very closely. Interestingly—I asked this question about the tuna—the fishermen do not even pull them right out of the water; they have to remain alongside the boat. All those matters were taken into account in the debates and discussions about welfare, so I hope that I have reassured the hon. Gentleman about that. There is a very clear code of conduct and guidance, but all of it will still be up for review. There will be further trials, and the system can be tweaked and changed, if necessary, as the scheme goes along.
I hope that my comments give the hon. Gentleman assurances about many of the questions that he asked. I reiterate the need for this instrument in order to enable the UK fisheries Administrations to establish recreational bluefin tuna fisheries in their waters. I stress that the regulations will bring social and economic benefits to the fishing industry and our coastal communities, which need that so much. They have also been devised with the codes of conduct and so on, so that the whole industry will be sustainable. This is sustainable management of bluefin tuna. Again, I commend the instrument to the Committee.
Question put and agreed to.
Draft National Crime Agency (Directed Tasking) Order 2023
(7 months ago)
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The Minister for Security (Tom Tugendhat)
I beg to move,
That the Committee has considered the draft National Crime Agency (Directed Tasking) Order 2023.
It is a pleasure to serve under your chairmanship, Mr Twigg. I will start with the context in which we are introducing the order. Hon. Members will no doubt know that the impact of serious and organised crime on the United Kingdom is significant and growing. Put simply, it poses a threat to our national security and prosperity.
In partnership with law enforcement and industry, the Government have taken concerted action to tackle economic crime, fraud, bribery and corruption, all of which severely harm the economy and cause significant suffering. If we are to keep pace with those threats properly and effectively, only a system-wide response will do.
To that end, the Government announced, as part of the 2023 serious and organised crime strategy, their intention to amend section 5(5) of the Crime and Courts Act 2013 to allow the director general of the National Crime Agency to direct the director of the Serious Fraud Office on matters relating to the investigation of suspected incidents of serious or complex fraud, bribery and corruption. This change will support strong, ongoing collaboration between the NCA and the SFO by enabling the director general of the NCA to direct the director of the SFO when the NCA requires the assistance, skills and expertise of the SFO, and satisfactory arrangements cannot be made under the existing voluntary tasking of the arrangement.
Edward Timpson
It may be that my right hon. Friend will come on to this point, so I apologise in advance if he was going to, but I am just interested to know about the process for the NCA, given the workload that already exists for the SFO, its budget, its capacity, and also the prospects of a potential successful prosecution, when deciding whether to make a direction, so as not to overload the SFO and perhaps end up with less success as a consequence.
Tom Tugendhat
My hon. and learned Friend raises some good points. I will come on to them in a moment, if I may, and I will just continue for now.
With the addition of the director of the Serious Fraud Office to the list of agencies that can be subject to directed tasking, the measure will strengthen the National Crime Agency’s ability to co-ordinate a national effort against serious and organised crime. It will also place the NCA’s relationship with the SFO on the same footing as its relationship with police forces in England and Wales and the British Transport police.
This change does not impact the existing working practices and arrangements in relation to Scotland and Northern Ireland. The National Crime Agency ensures that its activity within both jurisdictions takes full account of their specific and differing legislative, operational and political requirements while respecting the primacy of the respective police forces and prosecution authorities.
The Government’s aim, as set out in the recently published serious and organised crime strategy, is to reduce serious and organised crime in the UK. We will do that by disrupting and dismantling organised crime groups operating in and against the United Kingdom.
There is no doubt that the social and economic cost of serious and organised crime to the UK is eye-watering, running to at least £47 billion a year, but, extraordinary as that figure is, it does not begin to tell the whole story—a story of lives disrupted and of unimaginable suffering caused by heinous criminality such as sexual exploitation, drug abuse and human trafficking. Beyond the enormous financial and human costs, serious and organised crime threatens the legitimacy of the state. It damages our national security and prosperity. Our mission is to reduce the impact of serious and organised crime, including fraud.
The threat from fraud has increased in volume over recent years. The Government are implementing the fraud strategy, which includes launching a national fraud squad, blocking frauds at source and empowering the public to respond. That includes committing £100 million, as part of a wider £400 million package, to tackle economic crime and improve the law enforcement response to fraud. We have also set ourselves the target of reducing fraud by 10% from 2019 levels by the end of this Parliament. To help to achieve that target, in March the Home Secretary hosted the inaugural Global Fraud Summit to galvanise the international response and strengthen collaboration.
The National Crime Agency has been crucial to our response. It leads and co-ordinates the United Kingdom law enforcement response to serious and organised crime. We have strengthened the agency’s ability to combat organised criminals, increasing its budget by 44% to more than £870 million since the start of this Parliament—[Interruption.] That includes support to Canterbury. The Serious Fraud Office is also a critical partner in the fraud system; it has recovered more than £160 million in proceeds of crime, put 16 executives behind bars and forced big business to pay more than £1 billion in fines in the last five years alone.
The order forms part of the Government’s ongoing fight against economic crime, which causes significant harm to the United Kingdom. Subject to proper safeguards, it brings the investigative capability of the Serious Fraud Office’s work within scope for direction by the director general of the National Crime Agency, akin to the arrangement that already exists in relation to police forces in England and Wales. In practice, that means that, where it is assessed that improving the intelligence picture and/or the operational delivery is required as a priority to tackle a threat, decisions on voluntary and directed taskings are taken following discussion with the national strategic tasking and co-ordination group. To answer the question asked by my hon. and learned Friend the Member for Eddisbury, that will effectively be taken forward as a joint effort between the DG NCA, as he is called, and the director of the SFO.
The order provides a welcome additional power that will assist in sharing tools and expertise to fight serious and complex fraud, bribery and corruption. The relationship between the National Crime Agency and Serious Fraud Office is already extremely good, and the existing voluntary tasking arrangements are working. The order provides the mechanism for directed tasking, should it be needed, and I commend it to the Committee.
Dan Jarvis (Barnsley Central) (Lab)
It is a particular pleasure to serve under your chairship, Mr Twigg. I thank the Minister for his remarks.
As the Minister set out, the order amends the Crime and Courts Act 2013 and the Criminal Justice Act 1987. Doing so will provide the director general of the National Crime Agency with the power to direct the Serious Fraud Office to perform specified tasks in investigating financial crime. As the Minister knows, the Opposition will always work with the Government on countering serious and organised crime. We therefore support the order, because it is crucial that there is a joined-up response across our law enforcement agencies to fight serious and organised crime, including fraud.
Fraud is the single largest crime type in the UK. The crime survey for England and Wales estimates that 40% of crimes against individuals are frauds. Britain should be a hostile environment for all types of serious and organised crime, with an approach from our police and law enforcement agencies that is ruthlessly relentless in countering what constitutes some of the most pernicious criminal activity. Therefore, although I will endeavour to be brief, I want to make a few points and ask some questions about the context and detail of the order, and I would be grateful if the Minister responded to them, either when he rises to his feet or by letter.
Before I do so, I pay tribute to all those in the NCA, the SFO, and all our police and law enforcement agencies who fight serious and organised crime. The nature of their work means that they serve in the shadows, and some of their work, for instance fighting financial crime, may perhaps be a little less gritty than some of their colleagues’, but it is no less important. The old adage “follow the money” continues to be a sound one. After meeting some of them recently, my huge respect for them has only grown. They do not always get the recognition that they deserve, and I am sure the Minister and the entire Committee will join me in thanking them for their service.
It is important to note that the order originates from the Government’s serious and organised crime strategy published in December. That document, which provides important direction in countering some of the worst crime in the country, should have the soundest of foundations. However, it states that the estimated financial cost of serious and organised crime to the UK is £47 billion, a figure the Minister mentioned earlier—interestingly, I think he said “at least £47 billion”. By my maths—I am happy to be corrected if I have got this wrong—£47 billion is an inflation-adjusted figure from the £37 billion in the 2015 report. With fraud alone recorded to have doubled in 2023, according to the accounting firm BDO, the £47 billion figure cannot properly reflect the reality of serious and organised crime now, and therefore cannot properly inform the response required from Government to disrupt and defeat it.
I would be grateful if the Minister gave us his assessment of the very latest actual cost of serious and organised crime to the UK. If he has a good memory, he might remember that he said in his answer to my written question on 23 January that the Home Office would publish an updated figure. On 8 February, the Minister for Legal Migration responded to my follow-up written question on this matter, saying that a research report on the cost of serious and organised crime would not be published until 2025. I have to say, that is not good enough. Why cannot that important information be published sooner? Why could it not have been calculated in time to be included in the serious and organised crime strategy that was published back in December?
On the arrangements that will support the order, I draw the Minister’s attention to two issues. The first lies with a specific type of direction the NCA will give the SFO to carry out. The complex nature of fraud and financial crime cases means that they can be connected to other ongoing investigations into other aspects of serious and organised crime that could be the responsibility of the NCA, but not of the SFO. It is entirely understandable, and indeed necessary, that the Minister will not want to say anything that would compromise capability, but it might be helpful to the Committee if he could say something about the thresholds that need to be met before the NCA gives direction to the SFO to conduct specified tasks. Does he also have an estimate, even if it is approximate, of how many direct orders the NCA could issue over the next 12 months?
The order specifies that the NCA will meet the costs of the SFO’s completing a specified task. However, there are still questions about how the SFO will deliver, because it is not yet clear that it will have sufficient resources such as staff, offices, payroll, equipment and so on. Can the Minister give an assurance that the SFO will have sufficient resources to deliver on what is being asked of it by the NCA? If not, what work has taken or is taking place with the Attorney General’s Office to ensure that it can? Also, if the cost of an NCA-directed task carried out by the SFO exceeds the payment made by the NCA, who will pay the difference?
The Opposition welcome the strengthening of the close working relationship that already exists between the NCA and the SFO, and we support the order. However, we seek assurances from the Minister that the right infrastructure is in place to facilitate the new working arrangements between the NCA and the SFO. I am sure the Minister will continue to appreciate the constructive spirit of our remarks in these Committees as we work together in the national interest on these important matters.
Tom Tugendhat
I welcome the hon. Member’s contribution to this debate and his good grace and approach. He raised some appropriate and some slightly more challenging questions than I wanted on the £47 billion. As a loyal listener to “More or Less”, as I am sure he is, I may have to look for further guidance on this. That is the inflation-adjusted figure from £37 billion. If he will forgive me, he is not quite right to say that adding the fraud stats into that will make a different figure. It may or it may not. Of course, fraud has replaced a lot of other crime types that would have been counted in earlier figures. I assure him that I will not make him wait until 2025. I will chase the figures and come up with a better answer for him as soon as possible. I will write to him on that.
The hon. Member’s point about thresholds is a good one. That will be looked at by the director general of the NCA in consultation with the director of the SFO. Clearly, the resources can be spent in many different areas all the time. We are always looking to prioritise the most important and most high-impact investigations—not necessarily the ones with the greater financial burden, but those that have the most pernicious effect on people’s lives, directly or indirectly. Resourcing is always a challenge, so the threshold will depend on the different circumstances. There is not a blunt answer. It is a more complex approach that the director general of the NCA and the director of the SFO have to look at.
On who will pay, the costs will be discussed between the SFO and the NCA and, if need be, between the Home Secretary and the Attorney General. The Attorney General has been extremely supportive and active in making sure the SFO has the resources for investigations. I am sure that approach will continue and be followed by whoever may replace her. She has been a fantastic champion of the SFO.
I hope the Committee will support this fantastic order. It will make a difference to the NCA’s ability to direct and co-ordinate criminal investigations, and it will ensure that we have security and the protection that the British people expect against fraud. It is part of a larger effort and a wider package. It is a strengthening measure, which I commend to the Committee.
Question put and agreed to.
Draft Accounting Standards (Prescribed Bodies) (United States of America and Japan) (Amendment) Regulations 2024
(7 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister of State, Department for Business and Trade (Kevin Hollinrake)
I beg to move,
That the Committee has considered the draft Accounting Standards (Prescribed Bodies) (United States of America and Japan) (Amendment) Regulations 2024.
It is a pleasure to serve with you in the Chair, Mr Hollobone.
The regulations were laid before the House in draft on 21 February, and were debated and agreed under the affirmative resolution procedure in the Grand Committee of the House of Lords on Tuesday 26 March. The Accounting Standards (Prescribed Bodies) (United States of America and Japan) Regulations 2015 provide a regulatory easement of the UK’s company reporting rules for US or Japanese-listed parent companies that have chosen to re-domicile in the UK. The easement was originally introduced in 2012, and was extended in 2015 and 2022. It provides qualifying companies with extra time to transition from their national accounting practices to UK-recognised accounting standards.
Parent companies listed in the US or Japan may take up to four financial years, following UK incorporation, in which to make the transition, in order to prepare their group accounts in line with UK accounting principles. When originally introduced in 2012, this was deemed especially helpful for companies using US or Japanese accounting standards, which might otherwise have struggled to adapt to UK domestic standards when domiciling to the UK. By providing this exemption, the regulations make the UK a more attractive place for companies in those jurisdictions to re-domicile into.
In 2023, the Department published a post-implementation review of the 2015 regulations. The review took evidence from a small number of previously US or Japanese-listed, now UK-domiciled, firms about their cost savings from the easement. The survey responses confirmed that the regulatory easement provides flexibility and enables cost savings for the businesses using it. Businesses that responded to the survey reported that the easement reduced their conversion costs significantly. One company also said that the regulations allowed it to submit accounts in the “most prudent and efficient” way while listed in the US.
Having conducted the post-implementation review, the Government decided to extend the regulations, which we believe make a small but useful contribution to a pro-growth regulatory regime that supports inward investment. To give effect to that decision, the Government laid the Accounting Standards (Prescribed Bodies) (United States of America and Japan) (Amendment) Regulations 2023 before the House on 6 September 2023. Those regulations extended the easement in recognition of its evident benefit to businesses that have used it so far. The easement would have expired without those regulations, thereby requiring newly domiciled US and Japanese companies to immediately convert accounting practice when filing their first set of UK accounts.
Although the post-implementation review found that the regulations are a helpful feature of the UK’s regulatory environment, it also identified a small risk of abuse or misunderstanding. The review noted that more could be done to improve the understanding that the easement is a transitional, time-limited concession, not a permanent exemption from the UK’s company reporting rules. In particular, the 2015 regulations did not require companies to indicate when their four-year period ends, which made it difficult to determine whether a company had exceeded the easement period. That would leave the door open for companies to use the easement for longer than permitted and make it difficult to monitor that risk.
The Government did not find any specific evidence of that abuse; none the less, we chose to take a proactive measure to prevent it. Regulation 4 of the 2023 regulations introduced an obligation on companies using the easement to include a note in their accounts stating when the easement ceases to apply. This additional requirement on companies was deemed to be a simple and proportional mechanism to reduce the potential risk of abuse. Regrettably, in making the provision to require a note in the accounts, the Department for Business and Trade made an error of parliamentary procedure by using the negative resolution procedure, rather than correctly using the affirmative resolution procedure.
The new statutory instrument is intended to correct the error. It removes regulation 4 of the 2023 amending regulations and substitutes a new regulation 5A in the 2015 regulations, doing this through the correct, affirmative resolution procedure. The rest of the 2023 amending regulations were made correctly, but the Government are grateful to the Joint Committee on Statutory Instruments for drawing their attention to the procedural error.
Driving growth in the UK economy requires attracting inward investment. The regulations are just one example of how we can make it easier for overseas companies to incorporate in the UK and create jobs in the UK economy. I urge the Committee to approve them.
Rushanara Ali (Bethnal Green and Bow) (Lab)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I welcome the regulations, which correct an error. A mistake was made, as the Minister has described. Of course, we support this correction and support regulations that aim to enhance the attractiveness of the UK as a domicile for businesses. We must ensure that the UK remains an inviting destination for businesses. We must continue to work towards making our country an important destination for businesses to do business and somewhere they feel welcomed, and our legal arrangements must be such that that is the case.
The 2015 regulations provide to US and Japanese-listed parent companies an extended transition period of up to four financial years, after incorporation in the UK, to convert to UK accounting principles. We support the objective of the regulation to encourage US and Japanese-listed companies to re-domicile in the UK. As the Minister set out, regulation 4 of the 2023 regulations was laid incorrectly, under the negative resolution procedure, and today’s legislation corrects that error. Parent companies are therefore not subject to any enforceable obligation to note their group accounts under the existing, incorrectly laid regulation. I am glad that the new instrument corrects the mistake.
Driving growth in the UK must be one of our top priorities. To enable that, we need to ensure that we attract inward investment. I therefore welcome the correction to the regulations, which ensures that the aim of the process of overseas companies integrating into the UK is fulfilled.
Kevin Hollinrake
The prescribed bodies regulations provide an easement of the UK’s company reporting rules to support US and Japanese-listed parent companies that have chosen to domicile in the UK. I very much appreciate the shadow Minister’s support for the measures. For some larger companies, the savings can be in the millions of pounds. Helping companies to more easily move their incorporation to the UK, by reducing the costs of the switch, is the right thing to do for our economy and helps to ensure that the UK remains attractive and open for business. The Government now propose to correct the procedural error in making regulation 4 of the 2023 regulations, by means of this affirmative statutory instrument. I commend the regulations to the Committee.
Question put and agreed to.
Access to GP appointments
International Freedom of Religion or Belief Bill
Wednesday 24th April 2024
(7 months ago)
Public Bill CommitteesRead Full debate Special Envoy for Freedom of Religion or Belief Bill 2023-24 View all Special Envoy for Freedom of Religion or Belief Bill 2023-24 Debates Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 24 April 2024 - (24 Apr 2024)
The Chair
Good morning. Before we begin, I have a few preliminary reminders for the Committee. First, please switch electronic devices to silent if you have not done so already. No food or drink is permitted during sittings of the Committee, except for the water provided. Hansard colleagues would be grateful if Members would email their speaking notes, if they have any, to hansardnotes@parliament.uk. My selection and grouping list for today’s meeting is available online and in the room. There will be a single debate on all clauses and amendments.
Clause 1
Special Envoy for International Freedom of Religion or Belief
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Clause 2 stand part.
Amendment 3, in clause 3, page 2, line 8, leave out
“International Freedom of Religion or Belief Act 2023”,
and insert
“Special Envoy for Freedom of Religion or Belief Act 2024”.
This amendment adjusts the Bill’s short title so that it refers specifically to the special envoy.
Clause 3 stand part.
New clause 1—Prime Minister’s Special Envoy for Freedom of Religion or Belief—
“(1) There continues to be a special envoy called the Prime Minister’s Special Envoy for Freedom of Religion or Belief.
(2) The special envoy is to be appointed by, and may be removed from office at any time by, a Minister of the Crown.
(3) The special envoy must act with a view to—
(a) promoting freedom of religion or belief abroad, in particular by working with the government of the United Kingdom, with other governments and their representatives (including special envoys), and with organisations outside government;
(b) raising awareness of cases in which people abroad are persecuted or discriminated against on the grounds of religion or belief and advocating for the rights of such people.
(4) The special envoy must from time to time give a report about their work to the Prime Minister.
(5) A Minister of the Crown may give the special envoy directions about the exercise of their functions.
(6) A Minister of the Crown—
(a) must provide the special envoy with such staff, accommodation, equipment and other facilities as the Minister considers necessary for the carrying out of the special envoy’s functions;
(b) may pay allowances or other payments to or in respect of the special envoy.
(7) The special envoy’s functions are exercisable on behalf of the Crown.”
This new clause is intended to replace clauses 1 and 2. It includes largely the same material as those clauses but with several drafting and clarity-related changes.
Amendment 4, in title, line 1, leave out from beginning to end of line 3 and insert
“require the continued appointment of a special envoy for freedom of religion or belief and make provision about the special envoy’s functions.”
This amendment adjusts the Bill’s long title to reflect its contents more clearly. It is consequential on NC1.
Fiona Bruce (Congleton) (Con)
It is a particular pleasure to serve under your chairmanship, Sir Graham.
Before I start, may I pay tribute to our former colleague, the former hon. Member for Birkenhead, Frank Field, who died yesterday? He was a courteous gentleman of integrity and independent mind, and has already been much missed in this place. We worked together on a number of issues, notably on the lengthy passage of the Modern Slavery Act 2015, and I was privileged to take up his role as canon of Chester cathedral when he was obliged to relinquish it.
Frank had friends across the House, and that is not irrelevant today. So does this Bill. It is supported by colleagues from every political party; indeed, I do not know of a Member who opposes it, and I hope not to discover one today. I thank all colleagues who have turned up this morning to support the Bill. The hon. Member for Newport West is supportive and wanted to be present, but family illness prevents her.
I am delighted to speak to new clause 1, which replaces clauses 1 and 2. With the agreement of the Committee, clauses 1 and 2 will not stand part of the Bill. To clarify, if colleagues support the Bill, as I hope they will, I ask them—somewhat counterintuitively—to shout “No” when we come to the first two decisions. I thank Sir Graham for suggesting that I clarify that. The original clauses 1 and 2 as drafted will thereby not stand part of the Bill, and what replaces them will become the Bill going forward.
The Bill is a shared enterprise. There has been a cross-party effort over many years for the fundamental and universal human right of freedom of religion or belief to be taken seriously, and for article 18 not to be “an orphaned right”, as the inaugural report of the all-party parliamentary group for international freedom of religion or belief report put it as long ago as 2012. Having the Prime Minister’s special envoy as a permanent fixture in statute will embed the progress that has been made, and make the UK a global leader on freedom of religion or belief, or FORB. It would also fulfil the Government’s manifesto commitment to fully implement the Truro review.
The object of the Bill is international freedom of religion or belief, but its subject is, of course, the Prime Minister’s special envoy for freedom of religion or belief. It puts the role on a statutory footing. Amendment 3, which is in my name, therefore adjusts the Bill’s short title so that it refers specifically to the role. Amendment 4, which is in my name, provides explicitly for the continuation in legislation of the role of the Prime Minister’s special envoy for freedom or religion or belief.
As the Committee will appreciate as much as I do, there is already such a role, which I have had the privilege of undertaking for over three years now, as the third incumbent. This short piece of legislation does not seek to create anything new, but gives the role the permanence proposed by recommendation 6 of the landmark review by the Bishop of Truro of the Foreign Office’s response to the persecution of Christians.
I pay particular tribute to the noble Lord the Bishop of Winchester, who was previously the Bishop of Truro, for taking up with such gusto the challenge of the then Foreign Secretary, my right hon. Friend the Member for South West Surrey (Jeremy Hunt), who commissioned the review. He has continued to pay a keen interest in the progress of the recommendations. As my right hon. Friend mentioned recently, the bishop’s continuing and passionate engagement on the issue has helped put FORB into the mainstream, as well as, I hope, into statute.
The Bill, if approved, provides for the continuation of the role of Prime Minister’s special envoy for freedom of religion or belief. I will set out for the record the wording of my mandate in this role from 2020, as published and still remaining on the Foreign, Commonwealth and Development Office website:
“The Prime Minister’s Special Envoy for Freedom of Religion or Belief: brings together UK efforts to promote religious tolerance abroad, and works on how the UK government can protect and promote this fundamental freedom internationally;
works with the members of the International Religious Freedom or Belief Alliance to raise awareness of cases of particular concern, advocating for the rights of people worldwide who are discriminated against or persecuted for their faith or belief:
supports implementing the Bishop of Truro’s recommendations on Foreign Commonwealth and Development Office (FCDO) support for persecuted Christians around the world.
The Prime Minister’s Special Envoy undertakes these activities on behalf of, and reports to, the Prime Minister.”
I also confirm that I have always, in fulfilling this role, sought to advocate for and support all those persecuted or discriminated against, of whatever faith or belief, as I know have so many in this Committee Room today. Indeed, the support for that work is remarkable. The all-party parliamentary group for international FORB has on record over 170 Members of the Commons and the Lords, which I believe makes it the largest APPG on record.
Fiona Bruce
I thank the hon. Gentleman, who is the chair of the all-party group, for correcting me. There are 174 members. He also gives me an opportunity to thank him for his remarkably committed work on the issue. Barely a day goes by where he is not speaking in the House on it or diligently undertaking some other meeting, task or work to promote freedom of religion or belief. We are very fortunate to have his passionate enthusiasm on this issue in the House.
Fiona Bruce
New clause 1 reflects the continuance of a role that has the title of the Prime Minister’s special envoy for freedom of religion or belief. That is significant. As I know from my travels across the world, it provides the appropriate authority internationally to advocate on behalf of the UK, and, in this country, to hold the FCDO to account on how it is protecting and promoting this fundamental human right.
New clause 1 reflects the purposes, which I have just quoted, of the Prime Minister’s special envoy, which were also set out in the original clause 1. New clause 1(4) reflects the original clause in saying that the special envoy must report to the Prime Minister, which provides for the direct accountability of the role.
In terms of technical changes, it is almost unprecedented for the Prime Minister to be referenced in legislation. While it is recognised that it is the Prime Minister who does and will appoint their special envoy, the legislative description required is “a Minister of the Crown”. When it comes to the practical resourcing of the Prime Minister’s special envoy’s office and travel expenditure, it makes sense for that to be flexibly handled by the relevant Minister of the Crown.
Further, the other drafting change from the original Bill is to avoid the ambiguity of the creation of a separate —that is, a new—office, distinct from the current office of the Prime Minister’s special envoy, which I have within the FCDO. Accordingly, subsection (6) of new clause 1 gives provision for the resourcing of the office of the Prime Minister’s special envoy and for fulfilling the purposes set out in subsection (3).
I thank the Minister for her presence today and note, with thanks, her fulsome response in the House to the Bill’s money resolution earlier this week, in which she said that she was
“absolutely committed…to providing the support services to enable the role to continue for as long as it can.”—[Official Report, 22 April 2024; Vol. 748, c. 698.]
I trust the Minister will join me today in ensuring that the office of the Prime Minister’s special envoy will continue to be staffed by at least the two current positions of a private secretary and an assistant private secretary. The role and its relevance across every country of the world—apart from the UK, which is covered by a faith Minister—means it is a demanding one that requires resources. It involves working with countries that actively support article 18 of the 1948 universal declaration of human rights, notably through the alliance I mentioned earlier that now comprises 43 countries; working with those on a journey towards that support; or challenging those countries that, regrettably, do not support it. In reality, the staff level currently enjoyed by the role is the absolute minimum required.
My role has also received support from my parliamentary office and, in particular, the support of the Prime Minister’s deputy special envoy, David Burrowes, whose significant time is not funded by the FCDO. Indeed, I want to put on record my profound appreciation for all David has done throughout my holding of the role, for his consistently wise and calm advice and for his considerable support of the drafting and passage to date of the Bill, without which fulfilling the role would not have been possible. I am deeply indebted to him.
If colleagues will indulge my gratitude just a little longer before I close, I wish to put on record my thanks to the Deputy Foreign Secretary, my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell) and the noble Lord Ahmad for their strong support for the Bill. I also want to thank the Prime Minister and the Foreign Secretary for their personal and wholehearted support for my role and for the Bill. As the Foreign Secretary, the noble Lord Cameron of Chipping Norton, said in the other place on 5 March:
“A Bill is being passed through the other place, and will, hopefully, come here, which will put that on a statutory footing. That would be the first time one of those envoy roles would be treated in that way, and that is quite right.”—[Official Report, House of Lords, 5 March 2024; Vol. 836, c. 1547.]
He also said on 16 April:
“I very much agree with the Bill. In fact, I insisted that it went forward with government support…That reflects the importance that we in this Government and in the Foreign, Commonwealth and Development Office attach to celebrating freedom of religious belief.”—[Official Report, House of Lords, 16 April 2024; Vol. 837, c. 871.]
Sarah Champion (Rotherham) (Lab)
I have two questions to ask, but I want to start by honouring the right hon. Frank Field. It was a shock today. I know that he was much driven by his faith. I think we all feel his loss.
I also hugely congratulate the hon. Member for Congleton. She has done an amazing job in this role and we should all be proud of the conference she organised a few years ago. Bringing forward the Bill and putting the role on a permanent footing is something we all welcome.
That leads me to my two questions, which I hope can receive a response. First, religious persecution is widespread worldwide and it seems it is only getting worse. A Christian is killed every two hours somewhere in the world, antisemitism is on the rise, we see Uyghur and Rohingya Muslims being systematically persecuted, and in Iran followers of the Baha’i faith are victims of what Human Rights Watch has called “crimes against humanity”. I am interested in how the role of the special envoy could raise concerns, particularly within the FCDO, about persecution and discrimination and therefore try to prevent atrocities in future.
My second point was also raised by my hon. Friend the Member for Hornsey and Wood Green (Catherine West) on Second Reading. She asked how the Bill would
“balance the other rights that may occasionally collide with this question of a special envoy for freedom of religion or belief?”—[Official Report, 26 January 2024; Vol. 744, c. 572.]
She gave the example of the rights of women and girls, particularly thinking about reproductive rights. Similarly, there are concerns about the message the Bill may send to the LGBT+ community around the world. I therefore seek reassurance on how the Bill will ensure, when rights potentially collide or create tensions, that a hierarchy is not created by placing the rights of one group ahead of the other.
The Second Church Estates Commissioner (Andrew Selous)
I shall be brief. As the Member with the privilege of speaking on behalf of the Church of England in this place, I want to put on record the Church of England’s very strong support for this Bill and what it will do to protect the ability of people to practise their Christian faith around the world, but also to protect those of every faith, whether they are Jewish, Muslim or of any other faith, or of no faith and are persecuted. This Bill really matters because the situation globally has never been so bad and it continues to worsen. Those of us with the immense freedom to practise our faith or not practise any faith, as we enjoy in this country, have an absolute duty to speak out and give this Bill our wholehearted support.
Jim Shannon
I commend the hon. Member for Congleton on promoting this Bill. The glory will not be to her, but to the one that she serves and that we all serve.
I want to make a couple of quick comments. I am minded of the history of this, which the hon. Lady and others present will be aware of as well. Baroness Berridge approached me back in 2012 to ask whether I would consider starting an APPG on freedom of religion or belief with her. I was very happy to do so. It was on her heart and my heart as well. At that time, it was in the hearts of about 25 or 30 other MPs. It very clearly grew from that to be in the hearts of 174 Members of the House of Commons and the House of Lords. It is important that the issue has been brought forward.
This issue has captured the attention of those of all political parties, political opinions and religious beliefs? I speak at the APPG for those with Christian faith, but I also speak up for those with other faiths and those with no faith, because I believe sincerely and in my heart—the hon. Member for Congleton believes it as well—that we will be a voice for those across the world whose human rights are being suppressed and who are being subjugated and persecuted. The hon. Lady and I have spoken up on the persecution of Christians across the middle east, Pakistan and India, of Sikhs in Pakistan and India, of Hindus in Pakistan, of Muslims in India, of the Myanmar Muslims, of the Uyghurs, and of others across the world. These are all groups of people that this special envoy that the hon. Lady is promoting will be speaking up for.
I will say two things in conclusion. Last week, we had a special event at which we highlighted the issue of those in Pakistan who are being persecuted. We had a number of groups at a committee: Muslims in particular but also Christians, Sikhs and Hindus who are subjected to persecution in that country. Just yesterday, we had Nigeria, whose case is particularly worrying. Some 5,000 Christians have been murdered in the past year, and there have been abductions as well—five times more than there were even in 2020. Hundreds have been kidnapped. What about the 87 small schoolchildren—those young girls? Two hundred and fifty were kidnapped, but 87 have still never been returned. Those are the things that the Prime Minister’s special envoy will hopefully deal with, whether that is the hon. Member for Congleton or someone else in the future. It is really important that we speak up for those people across the world. I had not intended to speak, Sir Graham; I have just written some scribbles down on a bit of paper—if you saw my writing, you would understand it is extremely difficult to interpret at a later stage.
I believe in my heart, as does the hon. Lady and others hon. Members on both sides of the Committee, that our God is a great God—he is a God of love. The role of special envoy is a burden on the hon. Lady’s heart. I believe that others in the Committee have the same burden and will want to see the role of special envoy in place, and I very much look forward to its endorsement.
The hard work of the hon. Lady has pushed the role of special envoy forward, and I know that we all love that work and love her for what she does. Through the special envoy, we speak up on behalf of all those across the world who have a religious belief and suffer from human rights suppression or persecution. This role that the hon. Lady has put forward gives us the opportunity to be a spokesperson for those people. I look forward to all contributions; we are brought together and united in trying to achieve that goal. I especially thank the Minister and the Government in advance for what they have done, because they have recognised its importance.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (Con)
Like many colleagues, I rise to support this Bill wholeheartedly and to thank my hon. Friend the Member for Congleton for the dedication she has shown in the role. It is extremely important that the Foreign, Commonwealth and Development Office supports this role—as it does—and I thank the Minister in advance as well. This role is exemplary, and people contact me from many different countries to commend the work that is being done, such as those who have been persecuted and those whose families have been persecuted. I think that it places the UK in a real leadership position in upholding article 18 of the UN charter, and it is very important internationally.
We were fortunate that my hon. Friend came to East Kilbride when she did a tour of different areas of the United Kingdom. It is one of the most memorable events that I have had the privilege to hold in my constituency. Many different faith groups came to that meeting and many people of all different faiths, as well as those of no faith, spoke with her about the importance of the role. It is an internationally important role, but we should also remember that it means so much to people in our constituencies across the United Kingdom. Those who attended that meeting in East Kilbride, at which we were privileged to host the Prime Minister’s special envoy, have given me their very best wishes for the Bill’s progress today and for the work that my hon. Friend does.
Gavin Robinson (Belfast East) (DUP)
It is a pleasure to serve under your chairmanship, Sir Graham, and to be here in this Public Bill Committee, given that I was pleased to support the hon. Member for Congleton on Second Reading in one of our Friday debates on private Members’ Bills. Few people know that although some of those Bills come out of the ballot, there is an opportunity immediately after the ballot, and the hon. Lady was prepared to sleep in a tent on the third floor to ensure that she was first through the door to secure this opportunity—and she was. We are grateful to her for doing so.
Regarding the Bill, it is odd in parliamentary terms to walk into a Committee knowing that I support the Bill, that this process will completely change the Bill by removing the two substantive clauses and replacing them with a new clause, and that we will leave with the Bill still having gained unanimous support, because it is the essence of what the hon. Lady is trying to achieve through the Bill that we support. As the Democratic Unionist party’s leader in Parliament now, I wanted to be here to place on record not only our support for the Bill but our personal appreciation of the hon. Lady for the steadfast and committed way in which she has approached the issues that we are discussing over many years.
I know that the creation of a legislative underpinning for the Prime Minister’s special envoy for freedom of religion or belief was a Conservative party manifesto—a commitment of this Government. I am sorry that we have had to enter the last Session of this Parliament before we have taken the strong opportunity to finally land that legislative commitment.
The essence of the hon. Lady is that she has never made this process about herself. It is not about securing a role that she currently holds. It is about sustaining the role for future generations to impact all those who benefit from having a singular advocate in this Parliament to act on our collective behalf and on our country’s behalf to speak up for all those internationally who need that. I have reflected on many occasions that the hon. Lady is small in stature but mighty in her passion and her determination, and in the faith that underpins her drive in this regard.
My hon. Friend the Member for Strangford, who chairs the all-party parliamentary group on international freedom of religion or belief, and I am delighted, on behalf of our party, to give our full-throated support and our prayerful endeavours for the hon. Lady regarding this legislative process, which I trust will have a successful and profitable conclusion. It will be the enshrinement of a role that we all benefit from.
Andrew Rosindell (Romford) (Con)
My hon. Friend the Member for Congleton is a truly honourable Member of this House. She has shown courage and determination to stand up for freedom of religion, freedom of belief and freedom of speech, not only in this country but throughout the world. She has shown the vital importance of maintaining this role as a UK prime ministerial appointment and I am proud to serve on this Committee to give her my support for her Bill today.
Throughout history, the United Kingdom has been a champion of freedom: freedom of religion, freedom of speech, freedom of worship and freedom to choose one’s own way of life. Throughout the Commonwealth, there is much work to be done. There are many countries that may have inherited our ancestry, our history and our heritage but they have not necessarily followed through in the way that they apply their laws. There is much work to be done to uphold those values of freedom, particularly freedom of religion. That is why the role should be permanent and why, from now on, all Prime Ministers should appoint someone to the role, so that there is always a person leading the fight to spread those values of freedom, including freedom of religion and belief, and all the other things that hon. Members have spoken about today.
I give my full support to my hon. Friend and I thank her for her service and her true beliefs. Many Members of this House do not stand for something clear, but I have to say that she is the one person who I have always known to do that.
Martin Vickers (Cleethorpes) (Con)
I want to make a brief contribution because in the February recess, I accompanied my hon. Friend the Member for Congleton on a visit to Kosovo, where I was travelling as the Prime Minister’s trade envoy. On my previous visits, our ambassadors in Pristina and Tirana had both said that they would welcome a visit from the special envoy, so that they could show her how the faith communities are working well together in those two countries, although of course, in the wider western Balkans, there are tensions because of ethnicity and religion.
As I say, I travelled to Kosovo in February as the trade envoy and my hon. Friend travelled as the faith envoy. We were welcomed by people from the President and the Prime Minister downwards and it was evident that they welcomed the opportunity to engage with someone who held that position. While we were there, my hon. Friend made some useful contacts and is working on staging a conference in Pristina later this year, which will enhance the relationship between our two countries and, more importantly, between the various faith communities. Having seen her in action, I am delighted to be able to support the Bill.
Mary Glindon (North Tyneside) (Lab)
I am honoured to be part of the Committee and to be able to congratulate my friend, the hon. Member for Congleton. As other hon. Members have said, we are saddened today by the death of our colleague Lord Field of Birkenhead. I am sure there will be many tributes, and we are grateful for what has been said this morning. We will remember him and his family.
That sadness aside, this is a great morning for the hon. Lady because of all her work, as has already been said. Learning that she slept in a tent in the corridor to bring the Bill forward shows there are no bounds to her tenacity—I hope she had a comfortable night. It was well worth it, however, and we are grateful that she could bring forward the Bill and embody this role, as proposed by the Truro review. As all hon. Members have expressed, the Bill is important for people to recognise that our country feels that, in the world we live in today, the expression of freedom of religion and free speech are important, as we try to bring peace to our world.
On the questions put by my hon. Friend the Member for Rotherham, I echo the points made by my hon. Friend the Member for Hornsey and Wood Green (Catherine West) who spoke on Second Reading. In supporting the Bill, I would like to stress what she said then, referring to the shadow Foreign Secretary:
“In his role and during these meetings, he has made it clear that Labour will ensure that the UK stands against persecution and oppression in any form, and will promote freedom of religion or belief as a key component of our foreign policy”—[Official Report, 26 January 2024; Vol. 744, c. 571.]
in future, should we form a Government.
With that, I again congratulate the hon. Member for Congleton and wish her well as she continues in her role. We are thankful for what she has done on the world stage for Parliament and the UK.
The Minister of State, Foreign, Commonwealth and Development Office (Ms Nusrat Ghani)
It is an absolute pleasure to be serving under your chairmanship, Sir Graham. I must begin by putting on record my tribute to Frank Field. I had some limited interaction with him, and I know that he would be proud of my hon. Friend the Member for Congleton for all the work she has done in this space.
I do not think I have ever been in a debate where there has been so much approval for a piece of legislation or so much love—the word was used by an hon. Member —for a Member. I put on record my thanks for all the considered contributions and I join hon. Members in their gratitude to my hon. Friend for her leadership. It has taken some time for her to reach this place, but she is dedicated—I had not realised it stretched as far as sleeping in a tent. I put on the record my thanks to her and, of course, to David Burrowes, who was able to get his sister access to me on Saturday to ensure that I did everything I could to keep my hon. Friend happy, which is indeed my job.
When it comes to protecting people who are persecuted for their faith, my hon. Friend and I go way back. We worked on tackling the persecution of Christians in Pakistan and other countries, and of course the persecution of the Uyghur by the Chinese Communist party, so I am incredibly pleased to help the progress of this Bill. We have all expressed our gratitude to my hon. Friend, the current special envoy for freedom of religion or belief, and I pay tribute to her for the work she has done. She will be leaving behind a legacy, which is very rare for a parliamentarian.
I now turn to the Bill. Clause 1 requires the Prime Minister to appoint a special envoy for international freedom of religion or belief. Establishing that role permanently and in perpetuity was a recommendation in the Bishop of Truro’s 2019 independent review into the work of the FCDO and the freedom of religion or belief, and our 2019 manifesto committed to its implementation. The clause also sets out the duties of the special envoy and requires them to report periodically to the Prime Minister. The Prime Minister will determine the terms and conditions of the appointment.
Clause 2 requires the Prime Minister to establish an office of the special envoy to support the work of the special envoy. Clause 3(1) provides that the Bill will come into force on the day it is passed, and clause 3(2) provides that it will extend to England, Wales, Scotland and Northern Ireland.
New clause 1(1) provides that:
“There continues to be a special envoy called the Prime Minister’s Special Envoy for Freedom of Religion or Belief.”
Ensuring that the role continues to be known as the Prime Minister’s special envoy will mean that it maintains its international authority and recognition, as hon. Members have said. The new clause also seeks to reduce the statutory duty on the Prime Minister to appoint and provide resources to the special envoy; the duty is delegated to a Minister of the Crown. That change is essential, as legislation relating to the Prime Minister’s powers is extremely rare and limited, especially where the processes can be dealt with administratively. I thank the special envoy for her understanding on that point.
The new clause also clarifies the duties of the special envoy. It states:
“The special envoy must act with a view to…promoting freedom of religion or belief abroad, in particular by working with the government of the United Kingdom, with other governments and their representatives…and with organisations outside government;…raising awareness of cases in which people abroad are persecuted or discriminated against on the grounds of religion or belief and advocating for the rights of such people.”
Those revised duties reflect the status of the work undertaken by my hon. Friend in her role as special envoy.
My hon. Friend has worked with other special envoys to secure numerous achievements on FORB. Perhaps the most notable of those achievements was her co-hosting of the fourth international ministerial conference on freedom of religion or belief, which brought together Government delegations, faith and belief group leaders, human rights actors and civil society representatives from more than 100 countries to address challenges to the right to FORB. She subsequently hosted a series of roundtables on individual countries, including Nigeria, Pakistan, Iran and Myanmar, which brought together key stakeholders, including embassies and non-governmental organisations, to promote respect for FORB.
I congratulate my hon. Friend on her accomplishments as chair of the International Religious Freedom or Belief Alliance. She was asked to carry out the role of chair for a second time last year—the first time in the organisation’s history that such a request has been made. As chair of the IRFBA, she established a scheme to raise awareness of prisoners of conscience each month, including individuals from Vietnam, Nicaragua, Cuba and Myanmar. In three cases, individuals were subsequently released, which is a tremendous result.
That is a small sample of the important work my hon. Friend has undertaken. Reflecting that work in the revisions to the special envoy’s duties will set the same high expectations for delivery for future incumbents. New clause 1 also simplifies the provision of resources to the special envoy by no longer requiring the establishment of a separate office for the special envoy. The envoy’s work is currently supported by her FCDO private office, the FCDO FORB team, the FCDO media office and other officials across the organisation, with an annual budget covering staffing costs and, of course, travel expenses. Resources should continue to be provided in the established manner.
New clause 1(7) makes the special envoy’s functions exercisable on behalf of the crown. Amendment 3 adjusts the Bill’s short title to “Special Envoy for Freedom of Religion or Belief”, so that it refers specifically to the special envoy. That adjustment to the title more accurately reflects recommendation 6 of the Bishop of Truro’s review, which specifically states that the role of special envoy for FORB should be established “permanently, and in perpetuity”, as I mentioned. The amended title clearly aligns with our manifesto commitment to implement the findings of the Truro report. Amendment 4 adjusts the Bill’s long title to reflect its contents more clearly, and removes references to the Prime Minister, for reasons previously discussed.
Let me respond to the hon. Member for Rotherham. The authority of the role is that it is established in the Department. The special envoy has access not only to her own staff, but to Ministers and officials across Government, as well as having the ear of the Prime Minister. The hon. Lady talked about a hierarchy of human rights. She and I know that there is no hierarchy. The persecution of individuals on the basis on their faith often involves not only their faith but other levels, including gender and, potentially, sexual orientation. There is no hierarchy of human rights; the UK defends the full range of human rights as set out in the universal declaration of human rights.
In conclusion, the Bill reinforces our commitment to the position of special envoy for freedom of religion or belief. It will support the FCDO as we ensure that progress made on the freedom of religion or belief is embedded, and that the freedom of religion or belief is central to our wider human rights work. The role has only been established because of the sheer determination of my hon. Friend the Member for Congleton.
Fiona Bruce
I thank the Minister for her response to several points and issues. I will also draw out some of the points made by colleagues across the Committee.
Let me respond to the hon. Member for Rotherham, the much-respected Chair of the International Development Committee. There is, of course, a range of envoys. The reason that the special envoy for FORB in particular is being put into statute is that doing so was a manifesto commitment. However, that does not in any way diminish the importance of the work of other envoys, nor the fact that the UK defends the full range of human rights, as the Minister said. Those rights are set out in the universal declaration of human rights and in international human rights treaties. Much of the work on human rights, including the work in the special envoy role, is often integrated and interrelated with other human rights. For example, the Minister mentioned the concerns that we have for women and girls. Many of us will be aware that millions of women and girls around the world experience discrimination, inequality and violence on the grounds of both their religion or belief and their gender: they are doubly jeopardised. That can be at the hands of state and non-state actors.
History has shown that, where freedom of religion or belief is under threat, other human rights are often also at risk. That is why my particular focus has been on this human right, while other people work on others. It is one of a number of this Government’s human rights priorities. In supporting the Bill, I hope that the Government will be further enabled to positively contribute towards protecting not only FORB but other human rights across the world. One practical example is that the International Religious Freedom or Belief Alliance, which now has 43 countries that work to promote and protect freedom of religion or belief, has six working groups, one of which is specifically on gender, for the reasons that I just mentioned.
I thank the Second Church Estates Commissioner, my hon. Friend the Member for South West Bedfordshire, for his kind remarks. From the many times that he has responded to questions in the House, I know that how keenly he supports the Bill and, indeed, the Church. I am grateful for that.
I could not fulfil the role without the support of the hon. Member for Strangford. It is utterly invaluable. One might say that we are divided in a political sense, but our hearts are inextricably interlinked on this issue. I thank him for having such a huge heart and for all that he does in this place.
I also thank others for the work that they do, because this is not an isolated role. Colleagues have been very kind in commending my work, but it really is teamwork. The UK should be proud of the global leadership that it has shown, but that can be done only because it is so collaborative.
It was a privilege to visit the constituency of my hon. Friend the Member for East Kilbride, Strathaven and Lesmahagow—I managed to get that out!—and to see the strong relationships that she has built up across the faith groups in her area. That was such a positive example of what we should all be doing in our country as well as internationally. I thank her for inviting me to visit as part of the roadshow that my deputy envoy and I did in more than 20 towns across the UK. It was great fun.
We did the roadshow—I briefly digress—because we felt that people did not know how big the issue is internationally and how many people are affected. I will pick a statistic from the Open Doors world watch list, but of course there are many other statistics I could cite. Open Doors says that across the world about 360 million Christians are at risk of discrimination or persecution— that is just Christians. The Pew Forum has produced a recent report that says that restrictions on religion have reached a new peak globally:
“Religious groups faced harassment by governments in 183 countries… the largest number since the study began.”
Strengthening and building relationships across faith groups and showing the UK as an example of that is important.
Gavin Robinson
I feel a bit bad because I said that the hon. Lady was prepared to do it. For fear that rumours start spreading, I am glad that she has set the record straight. I am sure Hansard will back me up on what I said. But she would have done it, of that I have no doubt.
Fiona Bruce
In closing, I thank in particular my long-serving and, I think, long-suffering, over 14 years, chief of staff, Harriet Crompton, because she successfully pushed the button on her computer at exactly the right time to bring this Bill, as a presentation Bill, to the very top of the more than 100 Bills that colleagues sought to bring to this House to make legislative change. As I have said, I am very fortunate. It is very much not just me involved in this work; it really has been teamwork.
Question put and negatived.
Clause 1 accordingly disagreed to.
Clause 2 disagreed to.
Clause 3
Commencement, extent and short title
Amendment made: 3, in clause 3, page 2, line 8, leave out
“International Freedom of Religion or Belief Act 2023”,
and insert
“Special Envoy for Freedom of Religion or Belief Act 2024”.—(Fiona Bruce.)
This amendment adjusts the Bill’s short title so that it refers specifically to the special envoy.
Clause 3, as amended, ordered to stand part of the Bill.
New Clause 1
Prime Minister’s Special Envoy for Freedom of Religion or Belief
“(1) There continues to be a special envoy called the Prime Minister’s Special Envoy for Freedom of Religion or Belief.
(2) The special envoy is to be appointed by, and may be removed from office at any time by, a Minister of the Crown.
(3) The special envoy must act with a view to—
(a) promoting freedom of religion or belief abroad, in particular by working with the government of the United Kingdom, with other governments and their representatives (including special envoys), and with organisations outside government;
(b) raising awareness of cases in which people abroad are persecuted or discriminated against on the grounds of religion or belief and advocating for the rights of such people.
(4) The special envoy must from time to time give a report about their work to the Prime Minister.
(5) A Minister of the Crown may give the special envoy directions about the exercise of their functions.
(6) A Minister of the Crown—
(a) must provide the special envoy with such staff, accommodation, equipment and other facilities as the Minister considers necessary for the carrying out of the special envoy’s functions;
(b) may pay allowances or other payments to or in respect of the special envoy.
(7) The special envoy’s functions are exercisable on behalf of the Crown.”—(Fiona Bruce.)
This new clause is intended to replace clauses 1 and 2. It includes largely the same material as those clauses but with several drafting and clarity-related changes.
Brought up, read the First and Second time, and added to the Bill.
Title
Amendment made: 4, in title, line 1, leave out from beginning to end of line 3 and insert
“require the continued appointment of a special envoy for freedom of religion or belief and make provision about the special envoy’s functions.”—(Fiona Bruce.)
This amendment adjusts the Bill’s long title to reflect its contents more clearly. It is consequential on NC1.
Question proposed, That the Chair do report the Bill, as amended, to the House.
Fiona Bruce
May I conclude by thanking all those who have been involved in working on the Bill’s passage to date? I thank in particular my private secretary, Sue Breeze, who is indispensable to my role. I just regret that it is not possible to include her name in the Bill, so that subsequent special envoys of the Prime Minister would have the benefit of her very many years of experience on freedom of religion or belief and the global respect that she carries and that I have noticed whenever she has travelled with me across the world. We are truly fortunate to have her as someone in our FCDO who has been working on this issue for very many years.
May I also thank my parliamentary office for its support? I have mentioned my chief of staff, Harriet Crompton. May I also thank Lucy Williams? I particularly thank, for her unfailingly unflappable support, the Clerk responsible for private Members’ Bills, Anne-Marie Griffiths, who is always willing, whenever one goes into her office, to be interrupted from whatever she is doing—
Fiona Bruce
I see the right hon. Member nodding. I thought it was just me! No, Ms Griffiths is always willing to be interrupted to support colleagues. I also thank, for her energetic support, the Whip, my hon. Friend, and the hon. Friend of many in this room, the Member for Castle Point (Rebecca Harris), otherwise known as the Friday Whip.
It may not surprise people to hear that I believe in providence and the Lord’s hands on these proceedings. On the subject of Lords, I am delighted that if the Bill passes through its remaining stages, the Lord Spiritual who will, fittingly, take the Bill through the other place is the Bishop of Winchester, formerly the Bishop of Truro. He will, uniquely, be ensuring that his review’s recommendation to establish permanently and in perpetuity the role of the Prime Minister’s special envoy, with sufficient resources and authority, is implemented, and I wish him all haste and good speed as he does so.
Question put and agreed to.
Bill, as amended, accordingly to be reported.
Dogs (Protection of Livestock) (Amendment) Bill
Wednesday 24th April 2024
(7 months ago)
Public Bill CommitteesRead Full debate Dogs (Protection of Livestock) (Amendment) Bill 2023-24 View all Dogs (Protection of Livestock) (Amendment) Bill 2023-24 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 24 April 2024 - (24 Apr 2024)
The Chair
Before we begin consideration, I have a few preliminary reminders for the Committee. Please switch electronic devices to silent. No food or drink is allowed, apart from the water provided. Hansard colleagues will be grateful if Members email their speaking notes to hansardnotes@parliament.uk.
I believe that the House is likely to be voting at 5 pm, and there could be six votes. If we continue to that time, we will be coming back, so it could get very late; Members might like to adapt the length of their speeches accordingly. My selection and grouping list for today’s meeting is available online and in the room. One amendment has been tabled. We will have a single debate on all clauses, the amendment and the schedule.
Clause 1
Livestock worrying: scope and consequences of offence
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Clauses 2 to 5 stand part.
Amendment 1, in the schedule, page 5, line 29, leave out from “conviction” to end of line 30 and insert—
“(a) except in a case falling within paragraph (b) below, to a fine not exceeding level 3 on the standard scale,
(b) in a case where the person in question has previously been convicted of an offence under this Act in respect of the same dog, to a fine not exceeding level 5 on the standard scale.”
The schedule.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
It is a pleasure to serve on the Bill Committee with you in the Chair, Mrs Latham. I thank all the right hon. and hon. Members who have agreed to be members of the Committee. There is a variety of Bill Committees—this is my second today—but that just shows people’s passion for ensuring that we have good, focused legislation, whether tabled by the Government or tabled, as in this case, by Members across Parliament. This Bill is an attempt to address concerns about the offence of livestock worrying.
The provisions were originally in the Animal Welfare (Kept Animals) Bill. I am conscious that people wonder why that Bill was paused. It started to become a somewhat unwieldy Bill that all sorts of things were being tagged on to that went considerably beyond the original purposes of that Bill. The Government, of which I was at the time a part, therefore decided to pause that Bill, but to come back with a more detailed one. I made that commitment when I was in office, and I am glad that, despite my having left office, the Government are still committed to the provisions of this Bill.
On Second Reading, I basically lost my voice—I think I managed less than a minute. I do not intend to speak for very long today, as I know that others are interested in raising specific points, but I want to summarise the Bill, as the notes eloquently do. I also thank officials in the Department for Environment, Food and Rural Affairs for their help in getting to this point.
In essence, the Bill is an attempt at simplification. Clause 1(b) brings camelids within the definition of “livestock”, because animals such as llamas are starting to be farmed considerably more and to be managed in livestock settings. Clause 1(a) brings incidents on roads and paths within the scope of the offence, because as anybody who has ever been to a farm with livestock knows, livestock do not sit in one field all their lives; they are moved around, and we need to ensure that dogs do not worry the livestock as they are moved. That simplifies the situation: it not only makes it clear that dogs should be under the control of their owner or the person walking them, but gives assurances to farmers about what the limits are. Other provisions ensure that offenders will pay the expenses arising from seizing and detaining the dog, rather than those costs falling on the police.
Simply doing some modest extensions is an important element of clause 1. Rather than trying to cover every animal under the sun, as has happened in other jurisdictions, it is ultimately about keeping the Bill in line with what was intended, while ensuring that farmers can still be concerned about the safety of their animals.
Clause 2 basically updates the Dogs (Protection of Livestock) Act 1953 to ensure that seizing a dog is more straightforward. In particular, we are starting to see some phrases about dogs that pose a continuing threat. The clause says:
“(1) A constable may seize a dog if—
they have reasonable grounds to believe that the dog has attacked or worried livestock on agricultural land or on a road or path”.
The reason for doing that is to make it more straightforward for police to grab a suspected dog, in order to stop such behaviour happening and avoid the potential impact on livestock, without having to go to court or wait until an owner is convicted of an offence.
Clause 3 ensures that we can be more up to date about getting evidence—for example, taking dental impressions. A dog bite can often be distinguished by what is happening with their mouth and what has happened to the animal, which is particularly important when an animal has been killed. I am sure the Minister will explain in more detail why we are including both “attacking” and “worrying” in the Bill. Again, to give a simplified view, people should be aware that this is not just about a dog attacking a sheep, a cow, a camelid or a pig; just running around them can cause distress to the animal and severe consequences, such as aborting. It is about those sorts of things as well. There is even a story about how a dog ended up chasing livestock over the edge of a cliff. We need to ensure that not just what people would perceive to be an attack—direct contact with the animal by the dog—but worrying behaviour more generally is addressed.
From discussions with the police, I anticipate that most sampling should be quite straightforward, but a more detailed examination of a dog may be required at times in order to establish the connection to a specific incident. If it is deemed that that would be quite intrusive, the law requires a veterinary surgeon to be involved to ensure that the dog in question is handled appropriately.
Clause 4 extends powers of entry and search via application to a justice of the peace. There have been too many examples of people saying that they will bring in their dog and then they do not; the dog disappears, never to be seen again. It ends up somewhere else or something else happens to it. The clause basically enables a quick element of justice to be applied in order to ensure that evidence can be seized quickly.
Clause 5 covers the extent, commencement, transitional provision and short title. I am grateful that the Department agreed that we should try to ensure that the Act comes straight into force at the end of three months. There were discussions about England and Wales, and whether this an animal welfare matter, which should be devolved. Actually, this legislation is not specifically about animal welfare. It is keeping in line with the original intent of the 1953 Act. As a consequence, it is to be debated by the UK Parliament and does not require discussion by the Senedd of Wales or Welsh Ministers. I hope that explains why the matter is reserved and why a legislative consent motion is not required.
The schedule is a way of tidying up aspects of the 1953 Act. Paragraph 1(6) amends section 1(4) of the Act and talks about “attacking” or “worrying”, which ensures the Bill covers what it is supposed to.
I tabled amendment 1 because, after looking at the original Act and having discussions with various organisations, I was concerned that it seemed that the penalties would be declining. I want it to be easier to get convictions, but I do not want to reduce the penalties available. I must admit that I drafted the amendment without going to the Department for further legal advice. I know the Minister is minded to accept its sentiment but would like the Government to table a cleaner legal version on Report. I am happy for them to do that.
We need to send a strong message to dog owners right across this country. We have just been in lambing season, and many right hon. and hon. Members have examples of awful attacks in their constituencies. We see on social media—it has been coming up a lot on things such as TikTok—that farmers are really frustrated that people are not in control of their animals, which can have a major impact. People are somewhat in denial about that.
It is suggested anecdotally that quite a lot of the problems are caused by dogs escaping from their homes. Their owners have no clue about it and would be mortified to know that their dog was on the loose. People have the power to shoot dogs that are worrying livestock, but not all of the farmers and one shepherdess from my constituency I met had a shotgun licence, and not all of them wanted to do that; they wanted the owners to be responsible. Hopefully, the deterrent of a potentially unlimited fine will make people more aware of what their best friend—their dog—could be doing to other animals if they are not under good control with good recall. That is why I am keen to ensure the deterrent is sufficiently strong.
I am conscious that I sprung the amendment on the Department at the last minute. I am very grateful to the officials and our Clerk, Anne-Marie Griffiths, for all the advice they have given along the way in getting us to this stage. I will not go through the ins and outs of the amendment, but I thank the Minister’s private secretary, Tania Wimpenny, who was my private secretary when I was in the Department, with whom I had a good discussion. What she may not have revealed to the Minister among all the excitement is that she is now engaged to be married. I wanted to ensure that that is in Hansard. I congratulate her on that.
I hope people realise that this Bill is intended to be straightforward. I know there is a lot of detail in the clauses, but that is often the case when we try to amend other legislation. These modest, sensible changes will be important for our farmers and the animals for which they care. I hope the Bill will get through the Committee today.
Ben Lake (Ceredigion) (PC)
Thank you, Mrs Latham, for calling me to contribute to this Bill Committee. I congratulate the right hon. Member for Suffolk Coastal (Dr Coffey) on introducing this Bill and on its reaching Committee. It is a very important Bill that addresses a problem that affects many of my constituents in Ceredigion.
In recent years, I have had to speak to too many farmers who have been victims of dog attacks on their livestock. Suffice it to say, such attacks are devastating, not only for the animals concerned but for the families and the farmers. Many have told me that they dread looking out the window in the evening to see their livestock hurrying about in fear of a repeat attack. It is very important that this Bill has reached this stage, and I congratulate the right hon. Lady on stewarding it this far.
Christina Rees (Neath) (Lab/Co-op)
In my constituency there is a lot of common land, where livestock graze with permission from the trustees of that land. Is that covered by this excellent Bill, on which I congratulate the right hon. Member for Suffolk Coastal? If the hon. Gentleman does not know, I am sure that the right hon. Lady will clarify matters.
Ben Lake
I believe that I am safe in saying—I am grateful to Government Members for their encouragement —that the powers do extend to livestock grazing on common land. That is important because we need to ensure that when such attacks happen, the owners, regardless of the livestock concerned, are assured that police have the powers necessary to fully investigate and hopefully put a stop to any repeat attacks, which often happen in my constituency. It is believed that the same dogs have committed attacks there more than once.
I reiterate my support for the Bill and congratulate the right hon. Member for Suffolk Coastal once again on bringing it forward.
Sir Geoffrey Cox (Torridge and West Devon) (Con)
It is a pleasure to serve under your chairmanship, Mrs Latham. I should make a declaration of interest: I own land on which livestock is kept.
I congratulate my right hon. Friend the Member for Suffolk Coastal on doing an enormous service for livestock farming and those engaged in it not only through this valuable Bill but during her service as Secretary of State. Throughout her time in office, she took valuable steps towards enhancing the livelihoods of those whom I represent in my constituency. Her work is being carried on by the current Secretary of State.
I shall address just one or two elements of the Bill not in a critical spirit but in, I hope, a constructive one. I hope we can give some subsequent attention to my first concern about the Bill—the Minister may be able to help me by answering some of my questions or by reflecting on changes that could be introduced in subsequent stages—which is that at the moment several pieces of legislation could apply to the mischief at which this Bill is aimed. We have the Dogs (Protection of Livestock) Act 1953, which this measure amends, but we also have the Dangerous Dogs Act 1991. Section 3 of the 1991 Act makes it an offence to be the owner of a dog that is dangerously out of control, and the guidelines that the Crown Prosecution Service published on that offence suggest that a dog that is causing serious injury to other animals, including livestock, is potentially evincing evidence of being dangerously out of control.
We have, then, the offence in section 3 and the offences under the 1953 Act. What we do not have is coherence in the guidelines for prosecution and enforcement between when the Dangerous Dogs Act can be used and when the offence is of attacks on, or worrying, livestock. Having served as a Law Officer, I think there may well be a case for the re-publication of new guidelines on enforcement and prosecution, but the reason why I draw attention to the matter is that, even with the changes that my right hon. Friend the Member for Suffolk Coastal is introducing to the penalty provisions, it seems to me that they are extraordinarily light for the top end of this type of offending. An offence with a £1,000 maximum fine will generally be visited not with the maximum by a magistrates court but by a fine potentially of just a few hundred pounds—in other words, the cost of perhaps a few parking tickets—yet the impact, suffering and mischief that attacks by dogs on livestock cause to farmers and farming families are severe, and wholly out of proportion to a fine of a few hundred pounds.
My right hon. Friend will know—because I have discussed it with her—that just a few weeks ago the Dawe family, who are neighbours and constituents of mine, were subjected to an extraordinary overnight attack in which no fewer than 27 lambing ewes and lambs were killed—their faces ripped off and their bellies torn open. Many of them had to be put down when, in the morning light, that appalling scene of carnage was discovered. The irresponsibility of an owner who allows their dogs to roam free and to cause damage of that appalling character is not reflected by a fine of a few hundred pounds. Now, you may say to me, Mrs Latham, that perhaps in those circumstances an offence under section 3 of the Dangerous Dogs Act should be considered, and I would agree, but what we need is a coherent set of guidelines that sets out when the various offences in the hierarchy that exists should be considered by both police and the Crown Prosecution Service.
The second point that I wish to make is an allied point. It is astonishing that neither the Dangerous Dogs Act nor, certainly, the 1953 Act permits the court to disqualify an owner from owning a dog. I strongly submit to the Minister, for future consideration, perhaps in this Bill, that this offence ought to be added to section 34 of the Animal Welfare Act 2006, which lists the offences that gives to a court the power to disqualify a person from dog ownership. It may be that there is a lacuna, and under the Dangerous Dogs Act the normal remedy in those circumstances would be the destruction of the animal, but if the court decides that the animal should not be destroyed, surely some attention should be given to whether an owner with a dog so dangerously out of control—or even a dog that worries livestock, whether once or repeatedly—should not be allowed to own a dog until further order.
The two points that I recommend to the Minister, then—it may be that those assisting him can say that my fairly preliminary inspection of the laws in this field is wrong, and I can be reassured—are twofold. First, we need coherent guidance as to the way police investigate and prosecution prosecute, as to the balance to be struck and the considerations to be thought through, and as to the application of either a section 3 Dangerous Dogs Act offence or an offence of worrying sheep or attacking livestock, of the kind my right hon. Friend is dealing with. Secondly, we need to consider whether the offences, even those she is amending, are sufficient for this purpose. A repeat offender will be fined under level 5. That is an unlimited fine and that is good, but the repeated worrying of sheep or worrying of any livestock is not, many would say, sufficiently visited with adequate punishment by a fine alone. I commend that approach to the Minister, and if I am wrong about that or the policy of the Government is not to adopt it, we need at least to consider when section 3 should be used.
Finally, we need to consider the question of disqualification and whether or not this offence should be added to the list of offences under the Animal Welfare Act that make an owner eligible for disqualification. The court, of course, would have discretion; all the usual balancing factors that are relevant under that Act would apply. Where there is a fairly minor case of worrying, one would not expect a disqualification, but in a really grave case—such as that of the Dawe family, whom I have the privilege of representing—a court may take a thoroughly different view.
With that—I say again that this is meant not in a critical spirit but in a constructive one—I congratulate my right hon. Friend again. This is an extraordinarily valuable set of provisions that has been widely welcomed and I hope that we can consider tightening them further in the Bill’s journey through the House.
Kit Malthouse (North West Hampshire) (Con)
Like my right hon. and learned Friend the Member for Torridge and West Devon, I am pleased to appear under your wise guidance, Mrs Latham, as we look at this vital and important legislation. I represent 200 square miles of rolling Hampshire downland, much of it dotted with sheep. Like my right hon. and learned Friend, we have seen our share of horrible incidents over the past few years; the legislation is therefore extremely welcome for me and my constituents—and I declare an interest as a dog owner.
I, too, have some small matters of detail that I want to raise for possible consideration on Report, in the spirit of trying constructively to improve the Bill. I will go through them, if I may. The first is about territorial extent. I am not as legally proficient as my right hon. and learned Friend, but I want to ensure that areas of Crown land are covered, not least royal parks, which often have their own legislation to cover what happens within them. Members will remember the famous case of Fenton chasing deer across Richmond Park—happily, in that case there was a prosecution and a conditional discharge for six months. We need to look at that. In particular, we need to think about the foreshore. There are parts of this country where sheep graze the foreshore, eating seaweed and whatever. It produces delightful slightly salty and sweet lamb, but the foreshore is a part of our landmass that has its own legal status and largely, I think I am right in saying, belongs to the Crown. It would be interesting to see how we can make sure that the legislation applies there.
The second issue that I want to raise is the retention of dogs by the police. When I was at City Hall, in a previous life, I started a campaign to drive out the plethora of dangerous dogs in London and improve the legislation. We got amendments then, but one thing that deterred the police from detaining dangerous dogs was the cost of holding them. Often, a dog would be detained, the trial would be awaited, the dog would be held—sometimes for months—the owner would not show up to the trial and the dog would be destroyed, but the police would be left with the cost. I understand that in this case there is a seven-day limit and I wonder whether we could consider that for amendment on Report.
In my honest opinion, owners will partially pay. They will get to seven days, plead that they cannot afford it and partially pay some of the costs to try to avoid their dog being put down. A game will be played. There needs to be firmer provision: either that, at seven days, partial payment is not good enough and the constable may dispose of the dog, or that an owner can agree immediately upon seizure of the dog that the dog may be disposed of. At the moment I cannot see in the Bill the possibility that, if my dog kills 27 sheep and is seized, I can say to the police there and then, “I don’t want the dog back. Do what you will with it,” at no cost to me.
Daniel Zeichner (Cambridge) (Lab)
It is a pleasure to serve with you in the Chair, Mrs Latham. I am grateful to the right hon. Member for Suffolk Coastal for inviting me to be on the Bill Committee; I very much hope she does not come to regret it. I am interested in the Bill both in a practical sense—we all want to see livestock properly protected—and as someone who is, as the hon. Member for Ceredigion pointed out, a veteran of the kept animals Bill. I will come back to that in a minute, because some of the issues that have been raised were addressed in that Bill.
I will not delay the Committee by discussing the harm that is done. I echo the points that have been made. The harm was certainly raised by the shadow Secretary of State, my hon. Friend the Member for Croydon North (Steve Reed), on Second Reading, when he detailed a number of cases in offering the Opposition’s full support for the Bill, which I echo.
It will not come as any surprise to the right hon. Member for Suffolk Coastal that I make the point again that we were discussing the kept animals Bill some two and a half years ago. I was delighted that she gave me the first explanation that I have heard for its withdrawal, but I am not convinced by it. That Bill was an extraordinary collection of things in the first place, and the only additions that I recall being made were some amendments—unhelpful ones, I suspect, from the Government’s point of view—from Conservative Back Benchers. It was withdrawn, and we have not had the relevant protections for two and a half years, due to political management issues in the Conservative party. Leaving that aside, there were important points in that Bill, some of which have been brought forward in private Members’ Bills, although that is a chancy way of doing things.
I was fortunate to find the bundle of papers from that period in my office earlier. I am glad that I did because, as the right hon. and learned Member for Torridge and West Devon and the right hon. Member for North West Hampshire said, the original kept animals Bill was a very different piece of legislation. It was much more comprehensive and introduced the notion of control orders and disqualification orders, which I think would very much address the points that have been raised. I am not clear why a different approach has been taken with this Bill.
The kept animals Bill would have effectively replaced the 1953 Act, but this Bill amends it and is quite different as a consequence. That includes the lack of a debate such as the one we had then—I am sure Members will remember it—about not just the control orders and disqualification orders but the very definition of “worrying livestock” in the 1953 Act. That led to a lengthy and complicated discussion about whether people should be expected to keep their dog on a lead when close to livestock. I am not sure why that has not been reintroduced, either. The then Minister, the right hon. and learned Member for Banbury (Victoria Prentis), declined our amendments, but we were strongly of the view that that would send a very strong message to people that if they are close to livestock, their dog should be on a lead. I would like us to return to that discussion, if possible, and consider including that provision in this Bill.
More could have been done for those reasons, but, having said all that, I am grateful to the right hon. Member for Suffolk Coastal for promoting this Bill. We support it and I wish it well as it progresses through the House, but it would be good to strengthen it on Report, if possible.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Robbie Moore)
It is a pleasure to serve under your chairmanship, Mrs Latham. I thank my right hon. Friend the Member for Suffolk Coastal for promoting this incredibly important Bill. From the contributions we have heard in this debate, we know just how impactful it could be on constituents who have unfortunately experienced livestock worrying or livestock attacking.
I also thank right hon. and hon. Members for trying to improve the Bill as it moves through the House. “Our Action Plan for Animal Welfare”, published in 2021, set out our plans, aims and ambitions across animal welfare. It set out the commitments that we are focused on pursuing to deliver a better life for animals in this country and abroad. The Bill supports our commitments to ensure that new powers are available to the police so that they can respond efficiently and proactively to the worrying and attacking of livestock by dogs.
The Bill’s purpose is to amend the Dogs (Protection of Livestock) Act 1953. It will strengthen police powers and extend the location and species that are within scope of that Act. As we have heard, livestock worrying and attacks on livestock can have awful impacts. The behaviour of dogs that chase, attack or cause distress to livestock can result in injury or death. Our own family farm—I refer Members to my declaration of interest—has experienced sheep worrying and sheep attacking, so I know from experience how detrimental it can be not only to the financial measures of a business but to health and wellbeing. We must also consider the impact of the inability to protect one’s own livestock. Livestock can also suffer wider tragic impacts as a result of livestock worrying, including abortion. Such impacts go beyond animals and their welfare. As I have said, they will also have a direct impact on farmers and lead to financial loss.
My right hon. Friend the Member for Suffolk Coastal raised a case relating to the difference between attacking and worrying. Paragraph 1 of the schedule updates the terminology used in the 1953 Act and addresses that specifically. Attacking livestock is dealt with separately from worrying livestock, to recognise the violent nature of such offences.
Statistics from the National Farmers Union Mutual Insurance Society show that UK farm animals worth an estimated £2.4 million were severely injured or killed by dogs in 2023. That was up by nearly 30% compared with the previous year, which demonstrates why the Bill is so important. In addition, a survey carried out by the National Sheep Association found that 70% of farmers had experienced sheep worrying incidents in the past 12 months. Some 95% of the 305 sheep farmers surveyed said that they experienced up to 10 cases of sheep worrying every year.
The Bill will improve police powers and enable them to respond to livestock worrying incidents more effectively by extending powers of seizure and modifying entry powers. It also introduces new powers to take samples and impressions from livestock and the suspected dogs. That should facilitate investigations by making it easier for the police to collect evidence, which, in turn, should improve the rate of successful prosecutions and hopefully reduce the risk of further incidents.
The Bill extends the scope of the 1953 Act by broadening the locations where the offence may take place to include roads or paths. As Committee members have mentioned, it is important to move livestock from one field to another but attacks can happen when that transition is taking place. The Bill addresses the point of roads and paths being considered.
The Bill also amends the wording of the offence of livestock worrying to create separate offences for attacks on livestock and the worrying of livestock, in recognition that both attacking and worrying livestock are serious and devastating. I am particularly pleased that the Bill will also extend the species protected by the Act to include camelids, such as llamas and alpacas. I note the point of my right hon. Friend the Member for North West Hampshire, however, about other species that could be included, such as ostriches, should things change in future and should farming practices include other species. There may be a wish for that to be considered on Report.
I turn to the amendment tabled by my right hon. Friend the Member for Suffolk Coastal. Other Committee members referred to it and expressed support for higher levels of fines for the offence of livestock worrying. The current maximum fine that may be imposed in any case is a level 3 fine not exceeding £1,000. I understand that my right hon. Friend is keen to amend that fine to provide the courts with the appropriate flexibility to impose a higher fine where that is warranted. We as a Government agree that increasing the fine will serve as an additional deterrent to help to reduce the likelihood of future livestock worrying.
As drafted, however, the amendment is out of step with the current fine guidance as it refers to level 5 fines, when the practice since 2015 has been to provide for unlimited fines rather than level 5 fines. It also includes a tiered approach to take account of reoffending, which the courts can already supply under the Sentencing Council guidelines on aggravating and mitigating factors. As my right hon. Friend referenced, my officials will work with her as the Bill progresses to Report stage, before it comes back to the House, so we can table a revised amendment that will deliver on the desired intent to increase the fines that courts can issue to unlimited, and to act as a deterrent.
I am aware of the support for animal welfare in this country and the interest that the matter continues to receive. The strength of feeling has been apparent again from the discussions that we have heard. I will make a couple of additional points. On common land, the definition of agricultural land in the 1953 Act does not expressly reference common land but it does include land used for grazing, and therefore common land could be in scope of the Bill. Ultimately, it remains a matter for the courts to decide if the land in question is in scope in any particular case, but our interpretation is that common land could be determined by the courts to be in scope as grazing land.
On the shadow Minister’s point about dogs being kept on leads, the Bill does not cover that and, from our experience, there is good reason for that. The Bill deals with having control of dogs, but as Committee members may know, it is not right in every circumstance to have signage that specifically relates to keeping dogs on leads. I am aware of circumstances in Yorkshire where signage has stipulated that dogs must be kept on leads, but then someone might keep a dog on a lead and take it into a field full of cattle. If there are young calves, there will, of course, be mother cows that will want to protect their calves. If the dog owner keeps their dog on a lead and does not let go, there is a risk that the owner will also be put at risk if a mother and calf become separated and the mother wants to take down the dog. It is therefore not right in every circumstance.
That is why dogs being kept on leads does not fall in the scope of the Bill and has not been progressed at this stage. Of course, I would always refer people to the countryside code, which deals with the challenges that have been raised. The Bill builds on the Government’s ambitious programme of animal welfare reforms, and we are very pleased to support it.
Sir Geoffrey Cox
On disqualification, will the Minister go back to the Department and say to his officials that we ought to look at whether committing an offence under the 1953 Act should make someone eligible for disqualification from dog ownership? It would be a simple amendment that could be introduced in this private Member’s Bill, and I sense that there is widespread support for the proposal. If there is a good reason not to do it, the Committee and the House should of course listen to that, but I noticed that he was not going to deal with it—I hope he will forgive me; I may have been premature.
Robbie Moore
I thank my right hon. and learned Friend for his intervention. I was just about to talk about the implications of the experience of the Dawe family in his constituency, which was a horrendous scenario where 27 ewes and lambs were attacked—I assume there will have been multiple scenarios where disqualification would quite rightly have applied. While disqualification is not covered by the Bill, it is something that I will consider with officials for the next stage. There may be reasons why that is not in scope of the Bill, but I am absolutely willing to take that away and consider it with officials, as it has been rightly referenced by my right hon. and learned Friend.
Sir Robert Goodwill (Scarborough and Whitby) (Con)
I thank the Minister for giving way. We have talked a lot about fines and penalties, but could he advise me whether the court has the power to direct compensation to be paid to the farmers? In many of these cases, the value of livestock is much greater than any fine that can be levied. Of course, the farmer does not get access to the fine money, but they may well need compensation for their business to continue to be viable.
Robbie Moore
My right hon. Friend makes an excellent point. He is quite right that the Bill does not deal with that circumstance. Courts will be given the ability through sentencing guidelines to take into account unlimited fines through an amendment that will be introduced on Report, which the Government have committed to; it would therefore be up to the courts to implement that. He is right to reference the fact that the money from such fines will not then be distributed to the farmer, and it will therefore be up to the farmer who has been impacted negatively by sheep worrying or a sheep attack to seek compensation through civil means rather than through the courts. It is therefore outside the scope of the Bill.
As I said, the Government are wholly in support of the Bill and we will be considering further amendments that will be introduced on Report. The measures are vital in tackling livestock worrying and will greatly strengthen the existing legislation to decrease incidents of livestock worrying. I thank my right hon. Friend the Member for Suffolk Coastal for bringing forward the Bill.
Dr Coffey
I thank all right hon. and hon. Members who have contributed. With a former Attorney General, my right hon. and learned Friend the Member for Torridge and West Devon, present, I am conscious that the devil will be in the detail on aspects of law. It is my understanding that disqualification from ownership should be possible, certainly in England. It is technically an issue of animal welfare, which is devolved, so there is added complication there. However, I am happy to explore this further with the Minister and my right hon. and learned Friend to ensure that it is still possible to achieve the outcome that he seeks, whether through this legislation or otherwise.
Sir Geoffrey Cox
The Dangerous Dogs Act does permit disqualification, so although the Animal Welfare Act considers the welfare of an animal, the Dangerous Dogs Act aims at a different mischief. There seems to be no reason why livestock worrying offences should not be included under the same principle as the Dangerous Dogs Act.
Dr Coffey
I commit to my right hon. and learned Friend to go away and work with the Minister and officials on the details of that particular issue. It was my understanding that there were other legal powers available for the outcomes that he seeks, but if that is not the case—he has expressed some concern about the level of detail—we should look to rectify that in future.
Daniel Zeichner
The fact that disqualification was brought forward in the kept animals Bill suggests that this Bill was the appropriate place for it.
Dr Coffey
The then Farming Minister did give an explanation when the kept animals Bill was paused. That Bill covered many issues, which have already been covered in private Members’ Bills and Government Bills in a number of different ways. Those issues have been broken up to try to ensure that the Bills are passed without all the extra things that people had been talking about. This is nothing to do with party political management; I remind the Committee that at one point in the kept animals Bill, we were starting to consider how to hold a chicken—quite far off topic from its original purpose. This Bill tries to simplify matters. I recognise that the hon. Member for Cambridge may have a different perspective on that, but I will stick to what I believe to be the case.
In response to my right hon. Friend the Member for North West Hampshire, as has been said, the Bill extends to agricultural land, which is perceived to have its natural meaning. It is not intended to cover the Fenton situation, although what happened there was unfortunate. We have to bear in mind that quite a lot of what we are dealing with is negligence by owners, rather than criminal intent. We are not getting into the situation of deliberately releasing animals to attack other animals. At the moment, I do not think it would cover a foreshore, but I do not have the precise legal definition. It basically covers bare land that would be used for agriculture. That is pretty comprehensive and certainly should cover the common land that the hon. Member for Neath referred to.
I am mindful of the questions that have been raised today, some of which, as I hope Committee members recognise, will be taken away to see whether further strengthening is needed. I am happy to meet Committee members, but I will also write to let them know about some of the questions that have been raised.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clauses 2 to 5 ordered to stand part of the Bill.
Schedule 1 agreed to.
Bill to be reported, without amendment.
Pensions (Special Rules for End of Life) Bill
Wednesday 24th April 2024
(7 months ago)
Public Bill CommitteesRead Full debate Pensions (Special Rules for End of Life) Bill 2023-24 View all Pensions (Special Rules for End of Life) Bill 2023-24 Debates Read Hansard Text Read Debate Ministerial Extracts
The Chair
Before we begin, I have some killjoy preliminary reminders for the Committee. Please switch electronic devices to silent. No food or drinks are permitted during sittings of the Committee, except the water provided. Hansard colleagues will be grateful if Members email their speaking notes to hansardnotes@parliament.uk.
On to business, my selection and grouping list for today’s sitting is available online and in the room. No amendments have been tabled. We will have a single debate on all three clauses of the Bill.
Clause 1
Changes to periods of life expectancy
Question proposed, That the clause stand part of the Bill.
Mr Laurence Robertson (Tewkesbury) (Con)
It is a pleasure to serve under your chairmanship, Dame Siobhain. I thank you, the Minister and all Committee members for attending. I also thank the Department for Work and Pensions legislative team, who have been a great asset and a source of useful assistance throughout the process. I thank the Opposition for their support and my hard-working staff for their efforts.
As I said on Second Reading, the Bill is small and narrow in focus, consisting of just the three clauses. It seeks to amend existing legislation that covers the definition of terminal illness for the Pension Protection Fund and the financial assistance scheme, which is currently a life expectancy of only six months. We seek to increase that definition to 12 months. The extension would allow people with a terminal illness to receive terminal illness payments when they are likely to have 12 months or less to live. Such payments are a one-off lump sum from the PPF scheme or an early payment from the FAS.
I am sure we would all agree that when someone receives the devastating news that they have a terminal illness, they should receive any and all financial help possible during their final days. The constant advances in medical science—treatments, drugs and palliative care—make this Bill that much more important, because things are rather difficult to predict. This extends to the pension schemes as well. Most private pension schemes already provide cover in the form of serious ill health payments.
As will be explained, the Government passed legislation two years ago to ensure the same outcome for individuals receiving certain social security benefits such as universal credit, employment and support allowance, and personal independence payments. I came to understand, however, that two aspects of pensions legislation lacked updated coverage. That legislation relates to the Pension Protection Fund and the financial assistance scheme—the focus of the Bill—which retained the six-months definition. The Bill seeks to rectify that.
In case any right hon. or hon. Members present in Committee were not at the Second Reading debate, I shall explain briefly what exactly the PPF and the FAS are. The Pension Protection Fund was established by the Pensions Act 2004. It pays compensation to individuals when the sponsors of their defined-benefit pension schemes—usually their employers—become insolvent and lack the necessary assets to pay pensions to the level that the Pensions Protection Fund would ordinarily pay. That applies for insolvencies that take place on or after 6 April 2005. The financial assistance scheme applies to individuals whose pension schemes were unable to meet their pensions liabilities in full when those schemes started to wind up between 1 January 1997 and 5 April 2005.
Currently, the PPF can make a one-off lump sum payment to someone who has not yet drawn their PPF compensation but is terminally ill. The FAS makes similar provision by allowing the early payment of financial assistance. Both the PPF legislation and the FAS regulations use the same definition of terminal illness. As I alluded to earlier, the Bill will bring the Pension Protection Fund and the financial assistance scheme in line with the Department for Work and Pensions’ definition of terminal illness, which, following the Social Security (Special Rules for End of Life) Act 2022, was likewise extended up to 12 months when calculating certain benefits. Therefore, the Bill seeks to harmonise the legislative definition of terminal illness such that following its commencement all legislation will use the extended 12-month definition.
I repeat that I hope that by harmonising the legislative definition we can encourage all pension providers that do not already have provision for considering serious ill-health payments when the member has a life expectancy of 12 months or less to consider putting that in place or updating or extending their scheme rules. Yes, the Bill has a narrow scope, but it might act as a prompt and as encouragement to other pension providers.
The Bill is legally tight, consisting of just three clauses. Clause 1 amends the current definition of “terminally ill”, normally referred to as “end of life”, from six months to 12 months in all relevant legislation; clause 2 covers the territorial extent and commencement of the Bill; and clause 3 establishes the short title of the Act: the Pensions (Special Rules for End of Life) Act 2024.
Sir Greg Knight (East Yorkshire) (Con)
Is my hon. Friend entirely happy with the wording of clause 2(4)? Has he had an undertaking from the Minister that the Government will bring the Bill into force as soon as possible? I ask because I was lucky enough to take the through Parliament Parking (Code of Practice) Act 2019, which had a similar clause. Some five years later, we are still waiting for the Government to introduce the parking code of practice, which is outrageous. If my hon. Friend has not had an undertaking from the Minister, does he think he should obtain one?
Mr Robertson
I am grateful to my right hon. Friend for reminding me that the Bill’s introduction depends on the Minister taking action. It was not this Minister who spoke on Second Reading but one of his colleagues, and we did receive an assurance that the legislation would be in place as soon as possible. As I understand it, we need to make sure that the situation in Northern Ireland is brought together with our legislation, because it is a devolved matter. I will come on to that in a minute. The Minister on Second Reading assured me that it would be brought in as soon as possible; I do not know exactly when that will be, but I am sure that the Minister will confirm it today. If he does not confirm it as strongly as we would like, maybe we can intervene on him, but I am satisfied that, given the Government’s support for the Bill, they will seek to introduce it as soon as all the ducks are in a row—that is how I can best describe it. But my right hon. Friend’s point is very important.
The Bill’s territorial extent is slightly complicated, given that aspects of the Pension Protection Fund are covered by devolved legislation in Northern Ireland, as seen in clause 1(3) and (4) and clause 2(2). However, officials are working with the devolved legislature on that matter, and as I understand it our colleagues in Northern Ireland are keen to see the alteration happen as soon as possible.
As explained, the Bill focuses on only the Pension Protection Fund and the financial assistance scheme. Thus, clause 1 and its subsequent subsections seek to amend relevant legislation and provisions connected to the Pension Protection Fund and the financial assistance scheme. Specifically, subsections (1) and (2) amend the definition of terminal illness by changing the period of life expectancy from the current six months to 12 months, in respect of Pension Protection Fund compensation.
James Gray (North Wiltshire) (Con)
I warmly congratulate my hon. Friend on this extremely worthwhile Bill. It really is a superb effort and I am grateful to him for it. I am puzzled, however; perhaps I should have asked this question on Second Reading. Who defines whether the person is terminally ill within 12 months? After all, many diagnoses of terminal illness may well last longer than 12 months, and some people may have no such diagnosis. Where does the six or 12 month-period come from? Who decides it, and what is the certification that that is the case?
Mr Robertson
I am grateful to my hon. Friend for raising that point. As I understand it, it is a classification or assessment made by the medical person in charge of a person’s very sad case. One of my motivations for introducing the Bill is that, given advances in medical science, it can be difficult to predict how long somebody is likely to live. Six months is a very short period of time and, through appropriate care, somebody can perhaps live longer than that. I seek to extend it to 12 months, which is somewhat more all-encompassing, but it is still a prediction. It is still drawing a line somewhere.
One of the points raised by my hon. Friend the Member for Shipley (Sir Philip Davies) on Second Reading was that perhaps we should assess the person’s capabilities and physical and mental state rather than try to predict how long they will live. That was a worthwhile intervention from him, but I do not think we are at that stage yet. What we are saying now is to extend the six-month period to 12 months, because that would make it a little more predictable—if that is the right word. It is a difficult area and my hon. Friend the Member for North Wiltshire has picked up on a good point.
Clause 1(1) amends schedule 7 to the Pensions Act 2004 and subsection (2) amends schedule 5 to the Pensions Act 2008, with both substituting six months for 12 months.
Christine Jardine (Edinburgh West) (LD)
I, too, offer the hon. Gentleman my congratulations. The Bill is extremely worth while. We have talked about the difficulties of diagnosis and the fact that 12 months is a more reasonable period, but does he anticipate that extending the period from six to 12 months will bring a lot more conditions and illnesses into the scope of the legislation?
Mr Robertson
I am grateful for that intervention; it is a good question. Not being a medical person, I assume it would bring some more illnesses within the definition, but it will not affect a huge number of people. As I say, the Bill is fairly narrow in scope. What I hope it will do is prompt the providers of other pension schemes to consider adopting the 12-month period rather than six months. Yes, I am sure it will bring in more people with various illnesses. Not being a medic, I would hesitate to go any further, but that is a good point.
Clause 1(3) and (4) make similar provisions to subsections (1) and (2) but for Northern Ireland, amending the definition of terminal illness in respect of Pension Protection Fund compensation payments. Subsection (3) amends schedule 6 to the Pensions (Northern Ireland) Order 2005 and subsection (4) amends schedule 4 to the Pensions (No. 2) Act (Northern Ireland) 2008. Again, both substitute six months for 12 months.
I have a few more provisions to read through yet; I apologise to the Committee. Subsection (5) amends the definition of terminal illness and the period of life expectancy in relation to progressive disease in regulations 2(9) and 17(3D) of the Financial Assistance Scheme Regulations 2005. Again, both substitute six months for 12 months.
Christina Rees (Neath) (Lab/Co-op)
I congratulate the hon. Member on his commendable Bill and thank him for inviting me to be part of his Committee today. Please forgive me, for I should know this, but I cannot find it in the notes: which medical professional would be responsible for assessing the life expectancy term? Would that be confined to one or two medical professionals?
Mr Robertson
I am grateful to the hon. Lady for raising that point. My understanding is that it is one medical professional. I cannot give her a specific answer, but I understand that it is the person who is in charge of that case for that particular person. I do not know exactly how senior they are. I understand that it is not subject to second opinions or anything like that.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
I thank my hon. Friend for allowing me to intervene at this point. I was responsible as Secretary of State for doing quite a lot of this realignment. In essence, the NHS treats and issues certificates on the basis—which brings in other elements—that the end of life is, in its view, 12 months, so it will be a doctor, nurse or similar who does that. This is a simple alignment with how the NHS defines terminal illness in practice.
Mr Robertson
I am grateful to my right hon. Friend for providing more information than I have to hand. As far as I can see, that is the right way to go about this. Twelve months probably gives a little more reassurance to the person making that assessment.
Transitional provisions are guidelines that outline how to transition from the old regulations to the new ones, and saving provisions are designed to protect certain rights, privileges, obligations or legal proceedings that are already in place before the new regulations or orders come into effect. That means that subsections (7) and (8) of clause 2 simply allow for the creation of regulations or orders that include special clauses to manage the change from old to new regulations, protecting against any unintended consequences that might arise during the transition.
To return to the Bill—we are getting there—subsection (9) of clause 2 provides that regulations under subsection (4), relating to the Secretary of State for Work and Pensions and with the territorial extent of England, Wales and Scotland, will be made by statutory instrument. That is a form of legislation, as everybody here is aware, that allows a provision of an Act of Parliament to be subsequently brought into force or altered without Parliament having to pass a new Act. Subsection (10) provides that an order made under subsection (5) of clause 2, relating to the Department for Communities in Northern Ireland and with the territorial extent of Northern Ireland, is exercisable by statutory rule—again, a form of legislation that allows for detailed regulations to be created without the need for a new Act of Parliament.
Finally, as I mentioned, clause 3 is simply the short title of the Act, which, if the Bill is passed, will be the Pensions (Special Rules for End of Life) Act 2024. I do hope that it will be passed in this Parliament and that the extended definition of terminal illness—life expectancy of 12 months—will come into force, providing a little bit of ease to individuals who have received the most devastating news. I thank the Committee for its indulgence.
Dr Coffey
It is a pleasure to speak in Committee about the Bill, which I strongly support. As I have already pointed out, some of the realignment involved is intended to ensure some simplicity for people at one of the most difficult times of their lives, so that they do not have to go around getting different aspects of treatment or negotiating. We made that good change a few years ago. There have been various bits of legislation along the way—some welfare and pensions legislation is done through regulations and some through primary legislation, so it can seem cumbersome. But this is the right moment to make sure that this part of the support available to people in their difficult last moments is fully aligned.
I would like to say something to the Minister. I am conscious that getting even regulations through Parliament takes time and more effort from officials. I would like him either to confirm that the regulations have already been drafted in anticipation of Royal Assent, so that they can be laid before Parliament straight away, or to say that he will consider simply changing the element in question. I have been encouraging others leading private Members’ Bills through Parliament to change the commencement dates so that they come into force three months after Royal Assent.
I am conscious that the Pensions Regulator and similar organisations might have to address some issues, but they should know that the Bill has the full support of this House—of both Houses, I anticipate. We should not wait for further legislation to be commenced, given that people at the end of their lives would welcome this matter being put to bed straight away.
The Parliamentary Under-Secretary of State for Work and Pensions (Paul Maynard)
It is a pleasure to serve under your chairship, Dame Siobhain. I thank my hon. Friend the Member for Tewkesbury for bringing forward this legislation; I should also thank my right hon. Friend the Member for Suffolk Coastal, the former Secretary of State for Work and Pensions, for paving the way.
This may seem a small and discrete piece of legislation, but it is very important. As my hon. Friend the Member for Tewkesbury explained, the Bill extends the definition of terminal illness for compensation payments made under both the Pension Protection Fund and the Financial Assistance Scheme. Members will be able to claim their compensation on the grounds of terminal illness if a medical professional confirms that they have less than 12 months to live, rather than the current six months. That will enable eligible members to receive the vital support of payments at an earlier point in their illness. The change restores the original policy intent of alignment between the social security special rules provisions and both the PPF and FAS. It will also bring those two schemes into line with the tax definition of “serious ill health”, which allows private pension schemes to make payments where the member has less than 12 months to live.
I will try to cover some of the issues raised today and on Second Reading. There was a particular concern on Second Reading as to whether people whose schemes were not in the PPF or FAS would have a similar opportunity. Although I cannot provide definitive numbers—I do not believe they actually exist—for serious ill health payments, one of the leading independent trustee firms, Dalriada, has confirmed that:
“Trustees may only make such payments in accordance with the provisions of their scheme’s trust deed and rules. In practice, most scheme rules do allow for such payments.”
Officials have also contacted the Association of Pension Lawyers, which collectively acts for many schemes of all sizes. It has confirmed that, in the experience of its members, most occupational pension schemes will have an option of a serious ill health lump sum payable on a discretionary basis.
We have also heard questions today, and as we did on Second Reading, about who would be making the decisions on terminal illness, and the range of those illnesses. I can confirm that those decisions will be made by healthcare professionals, such as clinicians and medical practitioners, who have had direct oversight of the individual concerned. Although there is no definitive list of what constitutes a terminal illness, I imagine that the provisions would certainly include illnesses such as advanced cancer, dementia, motor neurone disease, and other neurological diseases, such as Parkinson’s. However, in my view the definition does not exclude any particular range of conditions, because one’s lived experience of a condition is not determined by the label that we hang around our necks. I find that I have been saying that for 48 years of my life, frankly. We do not determine someone’s lived experience just by the name of their particular condition.
My hon. Friend the Minister for Employment was also asked on Second Reading whether fixed time limits were the right way to go, and whether there would be adequate training for clinicians and communication to make people aware of the changes. The Department engaged widely on time limits ahead of the Social Security (Special Rules for End of Life) Act 2022, and chose the 12-month approach specifically to align with the NHS definition of “end of life”, and to link up with existing initiatives for clinicians that encourage the identification of people in their final year of life. This Bill simply aligns the definition used for the PPF and the FAS with that used more widely by the DWP and the NHS.
As part of the preparations made ahead of the 2022 Act, the Department engaged extensively with senior clinicians from key medical organisations and hospices, as well as representatives from multiple charities and networks of welfare advisers. DWP bulletins were sent out by the British Medical Association, the Royal College of General Practitioners, the Royal College of Physicians, the Association for Palliative Medicine, Hospice UK and NHS England networks across the country. The Department also initiated plans to create a learning module for clinicians to raise awareness among the clinical community of the financial support available for those who are nearing the end of life. That learning module went live in February.
Assurances were also sought that the definition of a terminal illness would be consistent across the DWP. I can provide that assurance today. As the Minister for Employment said on Second Reading, this Bill builds on the previous legislation—which we have just heard about—which changed the special rules for social security benefits. The scope of that legislation limited the changes that we could make to social security benefits administered by the DWP, as they involved the fast-tracking of benefit claims. This final change brings payments made by the PPF and FAS into alignment with those changes.
As I mentioned a little earlier, this Bill aligns the PPF and FAS definition with the tax rules for serious ill health. That will ensure that the payments made by the PPF do not trigger unauthorised payment tax charges on either the PPF or the individual to whom the payments are made. If the definition was to be amended beyond 12 months, as some have suggested, members could have faced significant tax charges on their payments, which I am sure no one wishes to see happen.
I have noted the comments today from my right hon. Friends the Members for East Yorkshire and for Suffolk Coastal about the commencement of the provisions in the Bill. I can confirm today that the intention is for that to happen as soon as practicable after Royal Assent. I see no reason for delay or obfuscation. We have all agreed today that this is a vital piece of legislation that will benefit many of the most vulnerable in our society at the time they need help most, so I have no intention at all of delaying it.
Sir Greg Knight
I am most grateful to the Minister for what he has just said. Can he confirm that that is an undertaking that he has given, and that it is unequivocal?
Paul Maynard
Given that the phrase I used was “as soon as practicable”, I can give that solemn undertaking. I would hate it if either scheme had some kink in its processes that might cause delay. I will do everything in my power to ensure that this is done as soon as possible. I meet the PPF regularly, and this will be on the agenda for the next meeting to make sure all its ducks are in a row, like all the Department’s are.
To conclude—
James Gray
Before the Minister does that, does he agree that one person who would have been very pleased by this legislation is that great champion of pensions and of pensioners, Frank Field, who died yesterday? He was a great man and a great gentleman.
Paul Maynard
I am grateful for that intervention, because I should have thought to start my speech by paying tribute to Frank Field and the immense amount of work he did in the Department for Work and Pensions. He was a thoughtful and humane man, respected on both sides of the House, and I am more than happy to join in paying tribute to him.
Being told that one is nearing the ends of one’s life can be a devastating and frightening experience. It is crucial that those reaching the final stages of their life do not have to worry as much about their finances and can focus on spending their time with the people who matter to them. The Bill takes us one step further toward ensuring that that can happen, building on the changes made back in 2022. I am grateful to my hon. Friend the Member for Tewkesbury for promoting the Bill, and I commend it to the Committee.
Mr Robertson
I thank the Minister for that positive response. We look forward to the measure being introduced as soon as practicable. I also thank all members of the Committee for their attendance and contributions today, as well as the team who helped to put the Bill together.
It was rather remiss of me to forget to pay tribute to Frank Field, and I am grateful to my hon. Friend the Member for North Wiltshire for reminding us. A long time ago, before I was elected to this House, I had the pleasure of working with Frank on a charity project I was involved with, just across the river at Lambeth Palace. We were raising money to create a hostel for homeless women in London at Marylebone complex, just off the Marylebone Road, and Frank was very active member of the fundraising committee. There was no benefit to him; he did it because he felt it was the right thing to do. I pay sincere tribute to Frank.
That seems a good point to finish my speech by restating my thanks to everyone who helped with the Bill.
The Chair
I am sure we are all united in sending our condolences to the family and friends of Frank Field, a man who showed us all how to be a Member of Parliament.
Hon. Members
Hear, hear.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clauses 2 and 3 ordered to stand part of the Bill.
Bill to be reported, without amendment.
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Brain Injuries in Football
(7 months ago)
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Damian Collins (Folkestone and Hythe) (Con)
I beg to move,
That this House has considered brain injuries in football.
The fact that so many Members are present to seek to intervene or speak in this short debate shows the great interest in the topic. The subject of brain injuries in football and concussion, and brain injuries in sport as a whole, has received considerable attention in recent months, but it is an issue we have been familiar with for many years. My wife’s grandfather, George Richardson, who played professional football for Sheffield United and Hull City, died from a brain haemorrhage in 1968 aged just 56. It was widely believed in the family that it was a consequence of heading heavy footballs when playing as a striker in the football league in his youth.
In 1966, famous for the England World cup win, there was also the end of the first domestic season in which injury substitutions were allowed in English football. A report that I read in the Liverpool Echo from that year recorded that 772 injury substitutions had been made, of which more than 10% were made as a consequence of concussion or head injury. The vast majority were for leg injuries—understandable for football—but even then quite a high number of players were taken off for concussion. We can imagine the high bar there would have been at the time, given that understanding of the consequences of concussion and long-term health impacts were not as well understood.
Staying with 1966, five members of England’s World cup-winning team have subsequently died as a consequence of dementia or brain-related conditions. Recently, other well-known England and Scotland footballers, such as Jeff Astle, Gordon McQueen and Joe Kinnear, have also died from brain-related injuries. However, no longer is this just a matter of tragic stories being brought into the public domain of great loss and sympathy for the families concerned; it is now a matter of increasing scientific study, especially in Scotland, with the 2019 field study conducted by Doctor Willie Stewart of the cases of more than 7,000 former Scottish professional footballers, looking at their cause of death against a study of the general population involving 23,000 people.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
I congratulate the hon. Gentleman on securing this debate. He makes an important point about that field study in Scotland. At the time some people dismissed it, because it was only one study, but what has changed in the intervening years is that there have been studies in other European countries. I would argue that the evidence is now overwhelming. It is not just the high-profile cases that he talked about; thousands of footballers are caught up in this and are in financial difficulty. What we really need, given this understanding, based on the scientific evidence, is to have this type of injury classed as an industrial injury by the Industrial Injuries Advisory Council.
Damian Collins
The right hon. Gentleman makes an incredibly important point.
I will dwell briefly on the main statistical outputs of that field study, because it is the best baseline that we have in the UK. The figures are stark. The study discovered that former footballers have a fivefold increase in Alzheimer’s disease, a fourfold increase in motor neurone disease and a twofold increase in Parkinson’s disease against the base level for the general population.
Further medical studies have identified, too, the medical condition of chronic traumatic encephalopathy, or CTE, which is linked to head trauma—head injury. It can be caused by a severe blow to the head, but also within the course of playing football. It causes a release within the brain that is made worse by repetitive injury. That is why the right hon. Member for Ross, Skye and Lochaber (Ian Blackford) has a point about classifying this as a form of industrial injury caused by the circumstances of playing football. It can have prolonged and lasting effects. Players who have received concussion injuries on several occasions may be more likely to have severe trauma later on, even if it is recognised at the time.
Jim Shannon (Strangford) (DUP)
I commend the hon. Gentleman for bringing this subject forward. It has taken some time and I commend him for his zeal in making it happen. There have been advances and helpful discussions with the Irish Football Association. Does the hon. Member agree that the lessons learned have meant that changes must be made, including the pilot scheme that was introduced by the IFA in 2020 to allow substitutions for suspected concussion with no disadvantage to the teams? That means that players do not feel that they have to shake it off and can be medically wise. There are some things that can be done. For every debate that we bring forward, it is important to highlight the issues, but it is also important to highlight the possible solutions.
Damian Collins
I agree with the hon. Gentleman that concussion substitution would be a sensible measure. In Scotland, I believe there is a campaign for rugby called, “If in doubt, sit them out”, which recognises the danger of concussion injuries and allows a pause in play. Often the incentive within professional sport is to keep people playing as long as possible, and often the players want that themselves. However, there must be proper safety standards so that the right decision is made and the incident does not lead to lasting injury and trauma.
In the United States of America, the recognition of CTE as an injury caused by playing professional sport, particularly American football, is well recognised. The National Football League is providing hundreds of millions of dollars of support for players who are diagnosed as having CTE. There is recognition of the link between head injury and playing sport, and people are properly supported and compensated.
There are two challenges that we have to look at. First, how can we prevent unnecessary and lasting injury as a consequence of head and brain injuries in football and other sports? Secondly, how do we support people who, late in life, are suffering as a consequence of the injuries they sustained during their playing career? The question of compensation is one that families in particular have raised. While a £1 million fund has been created by the Premier League, administered by the Professional Football Association, the concern is that there is no guarantee beyond the first year of its operation, which we are still in, that the fund will continue—although we hope that it will. It needs to have proper resources and to be properly accessible to families.
I spoke recently to John Stiles, the son of former England footballer Nobby Stiles, who made it clear to me that in his father’s case, his care costs per year were over £100,000, and yet the cap for funding from the current fund is £60,000 a year. That would not have been enough. In that case, Nobby Stiles decided to sell his medals, including his World cup-winning medal, which helped pay for his retirement and his costs. However, not everyone is in that position. Many other footballers and their families can be in a position where they are required to sell the family home, although they were told that would not be the case when the fund was created. Some former players and their families have had to sell their homes.
Duncan Baker (North Norfolk) (Con)
Last week I raised on the Floor of the House the point about funding, because Chris Sutton, the former Celtic, Chelsea, Blackburn Rovers and—more importantly, being in Norfolk—Norwich City legend, is my constituent. Currently, support is in place from the PFA and the Premier League’s brain health fund, which has already paid out thousands to help families. That is positive, but a proper registered charity would be the way forward to ensure that the funding is in place. Does my hon. Friend think the Minister could help with putting the proper vehicle in place?
Damian Collins
I am sure that the Minister has heard the point my hon. Friend makes. I think the Minister’s convening power could be extremely helpful in this case. There needs to be a properly resourced fund that football pays into. There is enough money in football to provide compensation for players who clearly need it.
The cap on the fund means that it will not cover some care costs; it would not have done so in the case of Nobby Stiles, had it existed at that time. However, there have been other deaths of former players recently, such as Chris Nicholl, a former player for Aston Villa and Southampton, who died without his family receiving a penny of funding. Similarly, John McNamee, a former Newcastle player, died as a consequence of CTE and his family had to sell the family home to cover care costs. Real concerns are being raised by the families that, limited though these funds are, they are not universally accessible, and there is no guarantee they will exist in the future.
Sir Gavin Williamson (South Staffordshire) (Con)
I congratulate my hon. Friend on securing the debate. The points that have been made about the brain health fund are incredibly important. Does my hon. Friend agree that in addition to the Premier League and the Professional Footballers Association, the Football Association and the English Football League also have a part to play, and that it is by all partners and Government coming together that we can deliver much more for players today and into the future?
Damian Collins
I completely agree with my right hon. Friend. There has been criticism from the families about the fund. It was created voluntarily by them, but the EFL and the FA are not part of it, and they need to be. All the groups that represent professional football need to come together and provide that support fund.
I agree with the right hon. Member for Ross, Skye and Lochaber (Ian Blackford) that we should look at classifying these as industrial injuries, but football does not need to wait for that classification; more could be done now to put those support elements in place. This is where I look to the Minister. I know that the issue has been raised with him before, and he has taken a keen interest in it. I believe the Government can play a role in bringing the parties together. There should be a recognition of the link. I know that the Department is supporting more research and convening a forum to decide where the areas of priority research should be. That will help us to understand how we can safeguard young sports players today and safeguard against brain injuries in the future.
More must be done now to recognise the existing link and accept a responsibility. There is a danger sometimes that people are concerned about legal liabilities; but we have known about this link for a while. In March 2024, Dan Roan of the BBC published a report showing that FA board minutes from 1983 recognised the concern about head and brain injuries and the causal link between those injuries and playing football, so let’s not pretend that this link was not known. Something needs to be done now.
Does the Minister think he can play a role bringing the FA and the English Football League together with the Premier League and the PFA to agree a package of financial support to make the available fund sustainable, to look at lifting the cap above £60,000 a year and to guarantee that no family will ever have to sell their home to pay for the care costs of a former footballer? Will football accept its responsibility to care for these heroes of the past, who incurred their injuries while providing entertainment and joy for millions of people and who have enriched other people who have made money out of the game?
Yesterday, on Second Reading of the Football Governance Bill, I raised the case for player welfare to be part of the remit of the regulator. I do not think the regulator’s job should be to write rules for football; it should be there to ensure that competition organisers and clubs adhere to the standards that have been set by the competitions with regard to athlete and player welfare. That would be consistent with the corporate governance responsibilities that the regulator sets. In terms of funding support for players’ care costs in later life, that could be another opportunity where the fines collected by the regulator could support both grassroots sport and legacy injuries related to football, particularly brain injuries. The fund could be used helpfully in that way. I do think there is enough money in football that primarily the professional football organisations themselves should set that standard.
Finally, as has been mentioned, the question of the rules that govern concussion and brain and head injuries in sport today is really important. I do not want to see things like heading the ball removed from football. It is a physical game and is enjoyed as such, but players should be aware of the risks they are running. There should be safety standards, such as concussion substitutions during matches or training, and ensuring that people sit out when they have had a head injury and are given a proper amount of time to recover. There should also be consideration as to whether unnecessary repetitive exercises in training that include heading the ball are really necessary if they cause damage. These things need to be properly understood. In some cases, more research may be needed. We should look at this on an ongoing basis.
As a starting point, let us recognise the link that exists and the genuine need of support that some former players and their families have now. Football already respects the fact that the connection does exist, but we need a proper agreement to resource this and make sure that the support is there and the fund continues. I ask the Minister, as the Football Governance Bill passes through the House, to consider the role that the regulator can play in ensuring that the welfare and safety standards we should expect from clubs and competition organisers are actually followed through.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stuart Andrew)
It is a pleasure to serve under your chairmanship, Ms Rees. I thank my hon. Friend the Member for Folkestone and Hythe (Damian Collins) for securing this important debate. I am under no illusions about the significant interest in the issue among right hon. and hon. Members. The fact that so many colleagues are here for a half-hour debate proves that point.
Brain injury in football is an important issue that touches many people’s hearts. Last September’s Backbench Business debate on the links between football and neurodegenerative disease demonstrated the wide cross-party support and depth of feeling about this vital issue in the House and in wider society. That has been reflected in the many personal stories of constituents that hon. Members have raised.
Ian Blackford
I am grateful to the right hon. Gentleman for referring to the debate that we had on 14 September. As he rightly says, it was a cross-party debate; I led it with the hon. Members for Moray (Douglas Ross) and for Easington (Grahame Morris). I was very encouraged by the response from the Government Front Bench at that point. Subsequently, on behalf of the three of us, I had discussions with the Industrial Injuries Advisory Council.
There is a recognition of the wealth of evidence that exists, but we now need some help from a Government Minister to get to the next level. The previous Minister for Disabled People, Health and Work—the hon. Member for Corby (Tom Pursglove), who has now moved on—had indicated that he would have a meeting with the three of us. I have been trying to push the replacement Minister by letter: I wrote to her on 18 January and on 13 March. Will the right hon. Gentleman assist us in getting that meeting for the benefit of everyone engaged in that debate and this one, so that we can do the right thing and ensure that more people like John McNamee—a Hibs legend as well as a Newcastle one—do not face the same financial injustice?
Stuart Andrew
It was certainly a pleasure to respond to that debate, and I made a commitment to write to the Department, which I did. I was due to meet the Minister for Disabled People yesterday, but I had to spend all day in the Chamber for the Second Reading of the Football Governance Bill. That meeting will be rearranged, and I will be sure to raise the right hon. Gentleman’s request. I will come on to his point about industrial injuries shortly.
The safety, wellbeing and welfare of everyone who takes part in sport is paramount. I also know how important football clubs and players are to all our local communities. The recent examples of dementia-related deaths of former footballers are of great concern to Members across the House and to me as the Minister for sport. It is important to acknowledge that the vast majority of people play sport safely, but head injuries in sport do occur.
Player safety must be a major focus for sport, as we recently highlighted in our Government sport strategy, “Get Active”. More work is still needed to ensure that robust measures are in place to reduce that risk and improve the diagnosis and management of sport-related head injuries at all levels of sport. That should apply during not just matches but training, and there should be provision for both professional and amateur players, as hon. Members have mentioned.
The national governing bodies are rightly responsible for the regulation of their sport and for ensuring that appropriate measures are in place to protect participants from serious injuries. I am pleased to say that positive progress has been made across different sports in recent years. For example, home nation football associations have changed their guidelines to prevent under-11s from heading footballs during training in England, Scotland and Northern Ireland, and the FA is co-funding research with the Professional Footballers’ Association to build the evidence base relating to brain injuries in football. It is not just national governing bodies contributing to improvements in player safety; players’ associations such as the PFA also play a valuable role in supporting professional players and providing short and long-term support to those affected by sporting injuries.
Damian Collins
The Minister mentions that further work is being done by the FA, but is there any doubt in his mind or the Government’s about the link between brain injury and sporting injury?
Stuart Andrew
I will come on in a minute to research and to some of the things I want to take from the debate.
Hon. Members have mentioned the brain health team and the range of support for former players and their families, which of course includes assistance with claiming state support and benefits. I have discussed the work on player welfare with the PFA’s chief executive, including the football brain health fund for players affected by dementia, which was established last year with the aim of providing financial support for players. An initial amount of £1 million has been made available to provide discretionary financial support, as assessed by an independent panel, to improve quality of life.
I welcome the creation of the fund, the first of its kind in English football. I hope that it will provide support to those former players who need it most. The PFA has confirmed that further investment will be forthcoming, but I will seek further reassurances for that fund. I acknowledge that there is some scepticism from former footballers who have contacted me to express doubts about the fund’s effectiveness.
Sir Gavin Williamson
Will my right hon. Friend also make representations to the FA and the EFL about the work being done on the brain health fund? On temporary concussion substitutions, the decision will be made not by the FA or the Scottish Football Association, but by the International Football Association Board, of which the largest component is FIFA. Will the Minister use his office and his position to make representations to FIFA and the International Football Association Board so that the voice of home associations is properly heard and action is taken to introduce temporary concussion substitutions?
Stuart Andrew
I thank my right hon. Friend for his intervention. I have had letters from former footballers expressing concern about the fund, and I wrote just yesterday to the PFA to seek assurances that the fund is working. I recognise that there is wider work to be done, and I will be more than happy to convene a meeting or roundtable with all the interested bodies and reflect the comments that right hon. and hon. Members have made today. I will, of course, include FIFA.
Damian Collins
I am very glad to hear that. At that roundtable or a subsequent one, will the Minister also meet the families who are raising concerns about the practical operation of the funds and the difficulty of accessing them?
Stuart Andrew
I would be more than happy to do so. In fact, I suggest that it is probably sensible to do so before we do the roundtable, so that I can reflect what I hear from the families.
There has been some discussion of the industrial injuries disablement benefit. The Department for Work and Pensions provides specific support for that benefit and the Industrial Injuries Advisory Council is the independent scientific body that will make recommendations. I know that many Members feel strongly that the council should explore professional footballers’ access to the benefit. My understanding is that the council is currently considering any connection between neurodegenerative diseases such as dementia and the possible effects of repeated head injuries sustained during a career as a professional sportsperson. It needs to give further consideration to the evidence before it can make a decision and will publish its findings when the investigation is complete. It would be premature for me to speculate on how that will progress, but I will definitely raise the matter with the disability Minister.
Ian Blackford
I am grateful for the Minister’s remarks, because many of us feel that the research is now overwhelming. The role that we can play on a cross-party basis, with his assistance, is to demonstrate to the advisory council that an early determination would be welcome, particularly in the light of the hardship that so many footballers experience as they struggle with the impact of brain injury. We cannot allow this to be dragged out ad nauseam. We need to get to a conclusion and make sure that footballers get the help they deserve.
Stuart Andrew
I will try to reflect the right hon. Gentleman’s comments as accurately as possible at my meeting with the disability Minister.
It is important to highlight that the Government are leading work on brain injuries in sport, and specifically on concussion. As part of that, my Department has worked with interested parties to develop the first ever single set of shared concussion guidelines for grassroots sports across the UK. The guidelines, which were published last April, were developed by a panel of UK and international experts in the field of sport-related concussion. They build on the world-leading work in Scotland that hon. Members have mentioned.
We are grateful for the support of Scottish, Welsh and Northern Irish colleagues in expanding the remit of the new guidelines to cover the whole UK and their full use for everyone involved in grassroots sport, from school age upwards: participants, coaches, volunteers and parents, as well as those working in education settings and healthcare professions. Through the guidelines, we want to encourage more people to enjoy the benefits of being active and playing sport. We hope that they will be a useful tool in reducing the risks associated with concussion. At all levels of sport, if someone is suspected of having concussion on the field of play, the overarching message, as my hon. Friend the Member for Folkestone and Hythe said, is “If in doubt, sit them out.”
Evidence-based research is an important component of ensuring that sport is made as safe as possible. My Department has therefore established a research forum to look at concussion in sport. That group brings together key academic experts with experience in traumatic brain injury, neurology and concussion to identify the priority research questions around sports concussion that still need to be addressed for the sporting sector. It is now formulating a report to identify the priority research questions, which is expected to be completed this year. Alongside that, our Department has established an advisory panel with the aim of identifying tech innovations that can help with concussion in sport.
Separately, the Department of Health and Social Care is formulating the Government’s new strategy on acquired brain injury, including dementia. Our Department is feeding into that process to ensure that those who play sport are represented in the gathering of evidence. We remain committed to working with the sector to make sport safe and enjoyable for everyone, including through technological solutions and the prevention of concussion.
Damian Collins
I thank the Minister for giving way one last time. Alongside the establishment of new guidelines based on research, which everyone welcomes, is the question of enforceability. There is a sad history in sport of anti-doping regulations and other welfare standards not being enforced properly because there is no external validation. Policies are often executed within team and club environments by the coaches and the medical staff who report to them, with no external supervision. Having an external actor to check that the right things are being done will be important to making the new guidelines effective.
Stuart Andrew
I heard my hon. Friend’s comments very clearly yesterday. The regulator we have established for football has a very tight scope—we needed to do that—but my hon. Friend raises some interesting points that I will take away and consider. I will certainly make the point, when we convene the roundtable with all the interested parties, that further work is needed in this area. Much good work is going on across Government, but I recognise that we need to do more.
I understand the strength of feeling about the issue and its effects on those who suffer from this terrible illness and on their families. We will continue to work with the sports sector, including the football authorities, to ensure that player safety is prioritised so that everyone can take part in sport safely. I thank my hon. Friend again for securing this debate, and I thank everyone present for their thoughtful contributions and their interest in the area. Once I have had the roundtable, I will be happy to update hon. Members on the outcomes of the discussion.
Question put and agreed to.
Football Index Collapse: Lessons Learned
(7 months ago)
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Liz Twist (Blaydon) (Lab)
I beg to move,
That this House has considered the lessons learned from the collapse of Football Index.
It is a pleasure to serve with you as Chair, Mrs Murray. This debate is about the lessons to be learned from the collapse of Football Index. I had a debate on Football Index in June 2022, but I am here again because I was alarmed to read reports in The Times and The Guardian just a few weeks ago about a new platform, KiX, which uses Football Index as a proof of concept and involves some of the people previously involved in Football Index. I do not want my constituents to be caught up in a scheme that replicates the problems of Football Index, so we need to learn the lessons.
The collapse of the supposed betting platform Football Index was mired in controversy, as the site proved to be incorrectly regulated for the majority of its lifetime. Those regulatory failures affected tens of thousands of people across the UK, many of whom lost substantial amounts of money. I am sure most Members in Westminster Hall today and across the House have received emails from constituents who lost life savings, struggled with their mental health and dealt with putting their lives back together after that failure.
Let me give a quick recap. The Sheehan report, which the Government commissioned, was damning in its verdict that there were regulatory failures from both the Gambling Commission and the Financial Conduct Authority in their work to protect customers from Football Index. According to the report, the failures go back to the beginnings of the platform. The Gambling Commission was made aware of the “go to market” function back in April 2015, but did not note that feature during the licensing process. It did not consider other aspects of the platform’s similarity to a stock market at the licensing stage, and the platform’s terms and conditions were not subjected to detailed scrutiny prior to 2019. The report states that at that point the Gambling Commission became aware of the full nature of the product, but it did not suspend the platform’s licence for another two years. That is crucial, because if the platform been taken down in 2019, it could have saved some customers huge amounts of money. The report also noted that, during that time, the Financial Conduct Authority expressed inconsistent views about whether the platform fell under its remit, and was driven by resource prioritisation, rather than by its legal responsibility to protect consumers.
Those failures cost victims dearly. Many lost their homes, their life savings or their wedding funds, causing them huge amounts of stress, anxiety and depression, not to mention financial difficulties for some. My constituent Collin spent months unable to work as a result of the stress. He told me:
“I feel a massive sense of guilt and anger that a huge amount of my family savings has been stolen. That money could have been used for my children’s future, house improvements, holidays and other investments.”
Many victims are reluctant to come forward due to the shame that they feel after being misled in such a way. That has not been helped by the language of the Government, who referred to support for “problem gamblers” in their response to the dormant assets consultation last year. To be clear, no one should have to feel shame if they are struggling with gambling addition, but that framing negates the fact that the product’s promoters branded it as an investment product.
None of the victims walked into a bookie’s and put £3,000 on an accumulator or a race. They were misled and instead believed themselves to be investors. They were misled and instead believed themselves to be investors taking risks, hedging funds and building a portfolio—something that would be normal for those who engage in the stock market. To suggest otherwise is to let the platform and the regulators off the hook.
There are unanswered questions. Since my debate in June 2022, there have been three different Prime Ministers, four Secretaries of State for Digital, Culture, Media and Sport, and four Ministers responsible for gambling, but as of yet, no one has been able to make much progress on this vital issue. In that time, I have heard countless more stories of the hardships suffered by victims as a direct result of these regulatory failings. Together, their financial losses amounted to as much as £124 million. They are desperately waiting for action and dealing with uncertainty. They fear that they may never see justice, and that they may never be compensated.
I pay tribute to the journalists who have been fighting to keep this issue in the public domain. Joey D’Urso at The Times, Ellie Pitt at ITV and Greg Wood at The Guardian have all helped to tell the story of the victims and have given them a voice. I encourage the Minister and those present to attend the all-party parliamentary group hearing on 30 April, so that they too can hear at first hand from those affected.
It is important that we keep the focus on this because so many questions remain. Although the Sheehan report was fundamental to exposing some of the regulatory failures, the text itself references the significant time constraints under which it was produced and the fact that it therefore could not take in the full amount of evidence that has since come to light. Some of the victims have lost everything, and they deserve to have their voices heard.
Having secured a meeting with the Minister back in 2022, the Football Index group has continued to gather and develop evidence that strengthens its case. However, I have met the group, and the Government have not accepted a submission from it. I am grateful to the current Minister for meeting representatives of the group, but after three long years, they deserve more—they deserve action.
There are ongoing concerns related to what the regulators knew and when, and whether there were additional opportunities to prevent the eventual outcome that were missed. It is my understanding that the current Minister was sufficiently concerned by what he heard to consider an independent review of the evidence by someone external to the Department and the Gambling Commission. No doubt the Minister will tell us himself exactly what he has been doing, but the action group are still waiting for progress on this issue. If we are to learn lessons from the collapse of Football Index, there must be proper, independent scrutiny of all the available evidence. I hope that the Minister will commit to that during this debate.
Turning to novel products, a process of examining what went wrong with Football Index is vital, so that we can protect people from such harm in the future. Unfortunately, recent developments have made this matter all the more urgent. As I said at the start of this debate, in a recent article in The Times it was revealed that the co-founder of the Football Index platform is working with others to create a new trading platform, citing Football Index as proof of concept. This is deeply worrying. I can only imagine the frustration and anger that victims must feel upon hearing this news; they will be concerned that others might be let down in the way that they were.
The new platform, KiX, will be a football cryptocurrency trading project that makes use of non-fungible tokens and cryptocurrency. Ministers have previously said that the Gambling Commission has strengthened its approach to novel products, and I understand that the commission is currently reviewing elements of the KiX product. However, the commission has also said that the product may lie outside the scope of regulation, given the involvement of NFTs and crypto.
On 23 April, the Government set out plans to overhaul gambling and admitted that Football Index blurred the boundaries between gambling and investing. If Football Index blurred the lines, KiX is seemingly crossing over them altogether to create a similar product in an unregulated market. Having seen the impact on Football Index victims, how could we possibly permit another product that preys on football fans by persuading them to part with hard-earned income and invest in their knowledge of football?
Mr Gregory Campbell (East Londonderry) (DUP)
I thank the hon. Member for giving way and congratulate her on securing the debate. She talked about susceptible fans sometimes being preyed on when it comes to gambling. Does she agree that one of the big emerging problems in the past few years has been the virtual epidemic of gambling companies sponsoring almost every single Premier League team, to the extent that young people think of and see their heroes as being part of the gambling industry, which is compounding the problems that she is rightly analysing today?
Liz Twist
I thank the hon. Member for his intervention. Of course, we could have a whole different debate on the influence of the gambling industry on football—indeed, I am sure that in future months we will have such a debate. But today that link between gambling and clubs and their players, with or without their consent, is being used to attract people to gamble money.
As I was saying, I fear that the product that I am talking about today—KiX—is dangerous and has the potential to bring misery to more people. I therefore urge the Minister to do everything he can to ensure that this platform does not launch without the utmost regulations being in place. To put it simply, that is the very least that the victims of Football Index deserve and we do not want to see more victims being created through new platforms.
I also bring to the Minister’s attention another company—StocksFC. I am told that it has been operating in the crypto space for about a year. Alarmingly, a quick glance at its website and at the Twitter account of its head of marketing shows the dangers of this type of platform. It is clearly masquerading as a stock market and is manipulative in its language, suggesting to people that they are “investing” and sharing the totals of profits made on their supposed investment.
I will add that despite this platform allegedly being a crypto-based platform, there are no entries about it on the blockchain and users in the UK can deposit money straight into its system from their debit cards. I am sure that the Minister will agree that that is deeply concerning and a danger to consumers. Does he know whether the Gambling Commission is aware of this operator and if so, what discussions has he had with the commission to ensure that consumers are being sufficiently protected?
Many victims of the original Football Index collapse are vulnerable and eager to recoup their losses through any means, and I fear that new platforms could prey on their vulnerability. I hope that the Minister will raise these concerns with the Financial Conduct Authority, and that the FCA and the Gambling Commission will work in partnership to ensure that nobody is left victim to an unregulated football stock exchange ever again, consulting with the Football Index action group to learn from the real-life examples that it can provide.
The evidence regarding the regulatory failures that led to the collapse of Football Index is highly compelling. It serves as a reminder that we cannot let anything like that collapse happen again. Meanwhile, victims have long-standing grievances that are yet to be resolved.
People from across the country will now be willing the Government to respond to the new platform of KiX in a serious manner and to review, in full, the evidence that the Football Index action group has sourced and put together. I hope that the Minister will listen to calls from the victims, because that is quite simply the least that they deserve.
Finally, I would welcome any update that the Minister can provide on this subject. At the heart of this scandal is injustice. We need to develop a plan that seeks to compensate victims of the Football Index collapse effectively while working to ensure that any future football platforms, such as KiX, cannot be launched without learning considerably from the lessons of the Football Index scandal.
Mrs Sheryll Murray (in the Chair)
I remind Members that they should bob if they wish to be called in the debate.
Justin Madders (Ellesmere Port and Neston) (Lab)
It is a pleasure to see you in the Chair this afternoon, Mrs Murray. I thank my hon. Friend the Member for Blaydon (Liz Twist) for securing the debate and for the work she has done over a number of years to highlight this issue, as well as other existing or future problems that need to be tackled.
We know that Football Index has been described as
“the biggest scandal in British gambling history”,
with thousands of customers suffering cumulative losses of up to £134 million. It is a scandal and a failure. I am sorry to say that we are all getting rather too used to saying in this place that, once again, people have been let down. Whether it the sub-postmasters, the Women Against State Pension Inequality Campaign, the leasehold scandal, infected blood, the loan charge, mortgage prisoners, Equitable Life or the myriad other investment scandals that have seen people’s life savings stolen, too often in this place we end up saying that what happened was totally wrong and should not be allowed to happen again. But yet again that is where we find ourselves today.
It is little wonder that public faith in our elected representatives continues to erode when Parliament seems to be incapable of learning from past mistakes. Whether it is regulatory failures, loopholes or bad actors, this place seems unable to stop them. Consumer protection and other basic safeguards for our citizens seem to have gone missing in action. We are failing in our basic duties; light-touch regulation has clearly had its day. We know the terrible stories of those affected by Football Index—losses into seven figures, individuals driven to the brink of suicide, marriages collapsed, families torn apart and life savings vanished—and those impacts have been part of all the other scandals I mentioned. Too many people in this country have suffered grave injustices that we seem incapable of putting right.
Football Index has been described as a Ponzi scheme. As we have heard, its executives were warned soon after its launch—in fact, as early as 2016—that their so-called football stock market would prove unsustainable. All the warnings came some five years before its eventual collapse, leaving serious questions about how effective regulation was. According to newspaper reports, the Gambling Commission was warned in January 2020 that Football Index was
“an exceptionally dangerous pyramid scheme under the guise of a football stock market”.
We all know that that warning proved to be correct.
Perhaps it was the unusual nature of the product that meant it carried on without effective intervention. However, I have looked at Trustpilot reviews for many of the major online gambling companies, and there are a litany of tales about frozen accounts, withheld funds and appalling customer service. It seems that even the more straightforward gambling propositions are able to get away with far too much, so it should be little surprise when an unusual scheme, which was unsustainable by design, also escapes attention.
The FCA took its time to get involved, and was also indecisive, changing its view twice as to whether Football Index fell within its regulatory remit. On two separate occasions, in September 2019 and September 2020, when it did indicate that Football Index fell within its remit, the FCA did not follow up with adequate action, and the product continued to be unregulated.
Those who used Football index talked about it being advertised as an investment product, with only a very small note squirrelled away on its website saying that it was a betting scheme, which is what it really was. FCA regulation allows for redress for losses through the Financial Services Compensation Scheme, but because Football Index was considered gambling—although not overtly advertised as such—the failure to regulate it meant that the losses were allowed to continue to stack up.
The Gambling Commission has now updated its framework on how it assesses risks, so that the novelty of the product is fully considered. Licences will not normally be issued if the product’s name contains language associated with financial products. The FCA now has, I understand, an executive director to oversee its relationship with the Gambling Commission where products appear to cross boundaries. However, despite those actions, the reality is that nobody has been held to account.
Even those originally involved in the company have got away with it. The Insolvency Service, which I wrote to, decided there was insufficient evidence to justify directors disqualification proceedings. The people who created Football Index in the first place are allowed to carry on with impunity. That is wrong, because they knew it was unsustainable and they were warned about that from the very start, but they carried on anyway.
That leads us on to KiX, which my hon. Friend the Member for Blaydon mentioned. The KiX website says:
“Digital Athlete Tokens (DATs)…represent the on-pitch performance of individual footballers…and are deployed as smart contracts on the blockchain”.
It says that the owner of a digital athlete token becomes
“eligible for twice weekly winnings.”
I do not really know what that means, but it has a familiar ring to it—as we have heard, some of the people behind Football Index are part of KiX. That quote about digital athlete tokens means it is as clear as mud to me whether this should be regulated by the FCA or the Gambling Commission—perhaps it is neither. KiX is apparently a “decentralised autonomous organisation” and apparently has a
“decentralised, egalitarian and democratised blockchain ethos.”
If that word salad is not enough to put you off investing, I hope that someone, somewhere, who actually understands what that means is going to take responsibility for regulating this.
We have let people down, and these products need proper regulating and policing. We really do not want to end up here again in another few years, bemoaning our lack of action. I have had too many constituents ripped off by one investment scheme or another, and the lack of accountability, justice and—I am sorry to say—interest from those whose job it is to ensure that there is justice says to me that we are letting people down on a systemic basis. We have to do much better than we are at the moment.
Barbara Keeley (Worsley and Eccles South) (Lab)
It is a pleasure to speak in the debate with you in the Chair, Mrs Murray. I congratulate my hon. Friend the Member for Blaydon (Liz Twist) on leading the debate and on her excellent work on this issue. I have two constituents who were affected by the collapse of Football Index in 2021. One told me he had lost £20,000 as a result. He said:
“I am a father and soon-to-be husband whose family has been swindled by the stress, guilt and shame which this has brought me in such an important part of mine and my family’s life. This has put me in some very dark places and I have had thoughts and stress like I’ve never experienced before.”
Failings by a number of organisations led to this impact on customers, which was highlighted in the Government’s independent report into the regulation of Football Index, led by Malcolm Sheehan KC. First, the report found that BetIndex Ltd, which traded as Football Index, did not properly notify the Gambling Commission of the nature of its product in its licence application, and nor did it inform the commission of changes to its product as it should have done.
Secondly, the report found that the Gambling Commission could have responded better, including through better scrutiny of the product offered by BetIndex in 2015, better monitoring of the development of the product, and quicker decision making once it identified in 2019 that BetIndex appeared to be operating outside the scope of its licence. Indeed, as my hon. Friend the Member for Blaydon said earlier, if the platform had been taken down in 2019, that would have saved money being lost by a number of the victims. Thirdly, the report identified areas of improvement for the Financial Conduct Authority, including its speed of response to requests from the Gambling Commission and the consistency of messaging on its regulatory responsibilities.
It is welcome that the Government have committed to implementing the review’s recommendations and that, in September 2021, the Gambling Commission and the Financial Conduct Authority agreed an amended memorandum of understanding, including on response timetables and the process for escalation of unresolved issues. However, I understand that people such as my constituents, and so many others, still feel very upset and angry at the loss of capital as a result of the collapse of Football Index.
Some believe that there were further failings by the regulatory bodies that were not identified in that independent review. In particular, people feel misled about the nature of the product they were using. One constituent told me about
“the magnitude of the deception that took place by the Football Index, which positioned and promoted itself as a safe investment with ‘guaranteed yields’.”
They also said:
“This attracted a significant number of users who were wholly misled as to the nature of the Football Index product and the degree of safeguards pertaining to its regulation.”
There is a need to improve financial literacy to help counteract financial products that are purposely misleading and confusing, and aimed at exploiting customers for greater profit. Unless lessons are learned from the collapse of Football Index, there exists a risk that a similar situation could emerge through new platforms.
Like my hon. Friend the Member for Blaydon and others present, I am particularly concerned by reports about the new trading platform KiX, which is using Football Index as a proof of concept. The Times has reported that KiX is being advised by the co-founder and chief executive of Football Index, Adam Cole. As we have heard, users of KiX will be able to trade footballers using non-fungible tokens, but because KiX is a decentralised, autonomous organisation underpinned by the blockchain technology used by cryptocurrencies, it is not currently regulated. Its website says that KiX is beginning with football but may expand into other sports if successful. Campaigner David Hammel has called the development of KiX
“a real kick in the teeth”
for all those affected by the collapse of Football Index. I would be interested to hear from the Minister whether the Government have had discussions with regulators about how to protect people from the risks of this latest scheme.
Returning to the issues caused by the collapse of Football Index, it is important that the Government fulfil their intention in the gambling White Paper to protect vulnerable people from gambling harms and financial detriment. This situation should never have been allowed to occur and it must never be repeated, and I look forward to the Minister reassuring us on behalf of our constituents that it will not be.
Jim Shannon (Strangford) (DUP)
I congratulate the hon. Member for Blaydon (Liz Twist) on bringing the debate forward. She will recall leading a debate on a similar subject here a couple of years ago, and I was very fortunate and pleased to support her, just as I regularly support other Members in Westminster Hall, which is always a pleasure, by the way, because the issues are really important. The hon. Lady is right about this issue: it is important—it is important because some of my constituents have found themselves in this terrible malaise, having lost money, so it is good to return to it.
If the Minister does not mind me saying, I am very pleased to see him in his place, as he always tries to answer constructively the questions and queries we pose to him. I was remarking to him earlier that he performed really well in the debate on the Football Governance Bill last night in the main Chamber, where his final comment referenced, “They think it’s all over! It is now!” I am old enough to remember that saying in 1966. I know that the shadow Minister, the hon. Member for Barnsley East (Stephanie Peacock), is far too young to remember that, but a whole lot of others here are not—I better be careful not to say too much now, or I will be reprimanded.
I took part in the last debate on the impact that Football Index has had on all our constituents, including mine—I will not mention their names, but I will refer to them. It is really good to be back here to discuss what lessons we have learned and what has changed. That was the question posed by the hon. Member for Blaydon: what has changed? Hopefully, the Minister can reassure us in his response.
The collapse of Football Index was detrimental to so many people, and some were undoubtedly financially ruined—I know someone who sadly was, although I am not able to put their name on record, but I have seen the detrimental effects. The situation has also highlighted the importance of being gambling aware. It is important that we get it right this time and the next time round. I was hoping that the hon. Member for Swansea East (Carolyn Harris) would be here, because she has been such a stalwart at the forefront of gambling issues. I admire her greatly, and she has taken up the subject in this House with real enthusiasm in order to make changes.
What is our football knowledge really worth? In football’s first stock market, people had fantastic prospects of making money based on how well they knew football. I know a whole lot about Leicester City, having been a loyal supporter since 1969, when I was a wee boy at school. That was not yesterday, by the way—it ages me greatly when people do the figures. The point I am making is that, although I do not know all about football, I love it. Most people here in this debate probably love football, but they may not know all the ins and outs of the subject matter before them.
The financial losses from this collapse have been absolutely devastating. I have read some absolute horror stories from people in my constituency and further afield. Some have lost hundreds of thousands of pounds that were invested in open bets on football players and their performance. It is also my understanding that the company folded with £124.5 million in remaining open bets—wow! Isn’t that truly extortionate? It shows the magnitude of what we have before us today and why this debate is so important.
Some 67% of people in Northern Ireland have been said to gamble, and they cover a range of ages, sports and other means. My hon. Friend the Member for East Londonderry (Mr Campbell) referred to all the other sports and the implications for them as well. Individuals must be aware of their gambling habits and the potential dangers that come along with gambling. Reports have suggested necessary recommendations for any similar scheme in future.
One point that we must get right is ensuring that any gambling company offering long-term bets will be able to cover payments to customers. That is to be covered by the Government’s forthcoming gambling White Paper. I look forward to hearing what the Minister has to say about the White Paper and how it will address some of the issues we have before us today. If it does not—with respect, Minister—we will need to see how it can be strengthened and enforced.
Others will make contributions. I am not sure whether the hon. Member for Inverclyde (Ronnie Cowan) is going to speak, but he has great knowledge of this subject. I hope he will intervene at some stage to give us some of his wisdom on the matter. I mean that honestly because he has a particular grasp of the situation.
Ronnie Cowan (Inverclyde) (SNP)
The issue is that when it comes to gambling products, we understand that there are rules and regulations in place. They are not to my liking, but they are there. This scheme and the successor schemes are designed to work in the grey areas—the dark shadows—of gambling. The Financial Conduct Authority did not even know whether it was responsible for them.
Hopefully, down the line somebody will be able to hold these companies to account. Their will is not to create an exciting thing for football fans to get more involved with and enjoy a game of football; their will is to take money out of people’s pockets. We know plenty of gambling products that are already doing that. I am not sure there is much in the White Paper at all that touches on FI. There has to be something that ensures the regulations are clear and understandable. It must also stop KiX: if KiX is up and running, plenty of other organisations behind it will be waiting to do exactly the same thing, and all they will do is extract money from punters’ pockets.
Jim Shannon
I thank the hon. Gentleman for that intervention. He has posed a few questions that are pertinent to the debate. I look forward to the contributions from the SNP spokesperson, the hon. Member for North Ayrshire and Arran (Patricia Gibson), and the shadow Minister, the hon. Member for Barnsley East (Stephanie Peacock), and the questions they will pose in turn to the Minister.
We need to see a sea change that does away with the grey areas that the hon. Member for Inverclyde referred to and the uncertainty, where people can get sucked into the process. Ensuring that customers can get their money back is of major importance. Early day motion 697 was tabled on 25 November 2021. I am pretty sure the hon. Member for Blaydon was instrumental in tabling the EDM and ensuring that others signed it. I signed the EDM to show support and to urge the Government to do more to ensure that those owed money receive a full reimbursement.
As I have stated before, gambling is a personal choice. I am not here to tell anybody what they should or should not do; I will always try to give people choice if I can. At the same time, sometimes Government have to encourage people to be more aware of what the choices are. As the hon. Member for Inverclyde said, there are clearly occasions when that does not happen, and that is why it is important to have a system in place. While gambling is a personal choice, we hope that those choosing to do so are educated about the potential risks. The losses can be huge. I read one story—I thought about it long and hard—about a young man, probably in his early 20s, who lost £165,000: my goodness! He lost what he did not have. He found himself in all sorts of problems, and he stated that it completely turned his life upside down. How could it not, given that he lost that amount of money at an early stage in life?
Many have openly referred to the shame they feel and how such things have affected how they look at gambling. There is absolutely no doubt that the Financial Conduct Authority should have regulated Football Index, and there are still questions to be answered. I know this may not be the Minister’s responsibility, but I would really like to know what discussions have taken place with the Financial Conduct Authority and what it is doing to regulate the situation. There are still questions to be answered.
Although it is argued that FI was seen as an investment, not gambling, its business model still relied on money from constituents and it was undoubtedly fundamentally flawed, as some of my constituents are able to confirm. Many people state that they feel let down by the regulators and that more should have been done to ensure the system was working correctly.
I will conclude because I am conscious that others want to speak. I look forward to hearing from the two shadow spokespeople, the hon. Members for Barnsley East and for North Ayrshire and Arran, and the Minister. Consumer protection must be at the heart of the lessons learned. The FCA’s consistent view has been that all the products fell within its regulatory perimeter up until the collapse in March ’21. Evidentially, that is no longer the case, and therefore we need a legislative change and reassurance.
Legislatively, it is always better to put these things in black and white. I hope action is taken to support those who suffered losses as a result of the collapse. I urge the Minister and our Government to ensure that victims do not wait years for reimbursement. That would be unfair, and we have a chance today to urge the Minister to grasp that. I commend the hon. Member for Blaydon for bringing forward this issue; there is no one in the Chamber who does not think she has done exceptionally well.
Gill Furniss (Sheffield, Brightside and Hillsborough) (Lab)
It is a pleasure to serve under your chairpersonship, Mrs Murray. I congratulate my hon. Friend the Member for Blaydon (Liz Twist) on securing this debate on such an important issue, which has caused a great deal of suffering for thousands of people.
Several years ago, I met a group of parents outside Hillsborough stadium whose loved ones had tragically taken their own lives after struggling with gambling addiction. The victims were mainly in their 20s and 30s. The parents were taking part in the Big Step, and were walking between five Yorkshire football grounds to call for an end to gambling advertising and sponsorship in football. Thirty-five clubs across the UK have signed the Big Step’s pledge to eliminate gambling advertisements in football, and Premier League teams have agreed not to take front-of-shirt sponsorship deals from gambling firms from 2026. However, that leaves us in the nonsensical situation whereby we recognise the dangers posed by gambling sponsorships but are happy to relegate them to the sleeves of football kits and advertising hoardings around stadiums, despite research showing that only 5% of gambling logos showed during live Premier League football matches would be affected by the front-of-shirt ban—in my opinion, that is 5% too many.
We need to do far more to combat the blight of gambling sponsorship in sport. I remain disappointed that the Government’s White Paper on gambling reform, which required the introduction of a cross-sport gambling sponsorship code of conduct, has been continually delayed. Will the Minister tell us when that code of conduct will be introduced? Will he investigate KiX, which is now operating instead of FI?
Sadly, any changes to legislation on football sponsorship are too late for the users of Football Index. Prior to its collapse, Football Index sponsored the shirts of three English Football League teams. Those sponsorship deals helped to convey an aura of trust and respectability that may not otherwise have existed, furthering the dupe that it was an investment platform. Football Index was more than happy to play into that misconception. Internal company documents reveal that Neil Kelly, the director of BetIndex—the Jersey-based company that ran Football Index—said:
“the Football Index platform functions somewhat similarly to a stock market, hence for marketing purposes it is sometimes referred to as the football stock market and when the Company uses this term, it is deliberately misspelled as the football ‘stockmarket’.”
As one of the previous speakers said, that is working in the dark shadows of the law. It is completely unacceptable, and I really hope that the Minister will put it right. The deliberate misspelling may have reassured directors that they were not operating a stock market, but that distinction was less than apparent to their customers. The Guardian reported:
“The only hint on its website that it was actually a betting site was an easy-to-miss strapline, which was added several years into its existence at the insistence of the Advertising Standards Authority.”
The authority had previously complained that the language used by Football Index was
“synonymous with the language used to describe conventional stock markets and investment products.”
The Gambling Commission has been made aware of the concerns, having been warned in January 2020 that tens of thousands of users were being
“misled into believing they are investing rather than gambling, with little or no consideration that all of their money is at risk”,
and that the platform was little more than an “exceptionally dangerous pyramid scheme” in a formal submission by industry experts. However, the platform’s misleading nature meant that there was a reluctance from both the Gambling Commission and the FCA to take ultimate responsibility for regulating the product, to the detriment of the thousands of Football Index’s victims.
Let us not forget that consumers have rights, including a right to redress if their product is mis-sold. Customers in a regulated industry such as gambling have the right to expect that the regulations will be adequate, appropriate and diligent. The users of Football Index have been wronged. The regulatory failings have cost thousands of people dearly, and they deserve compensation for their losses. However, beyond that, we need real systematic change. Football is watched by millions of young people every week, yet they are still subjected to constant gambling advertisements. I fear that without urgent reform, more consumers will fall prey to similar products that intentionally blur the lines between gambling and investing. Will the Minister commit to helping ensure that the gambling sponsorship code of conduct is introduced as soon as possible?
Patricia Gibson (North Ayrshire and Arran) (SNP)
I am pleased to participate in this debate. Like others who have spoken before me, I congratulate the hon. Member for Blaydon (Liz Twist) on bringing it forward. It is important that we learn lessons and remember the mistakes made during the collapse of the online gambling product, Football Index. I also pay tribute to my hon. Friend the Member for Inverclyde (Ronnie Cowan), who has done a huge amount of work on this issue and in the wider gambling context generally.
I remember well when Football Index collapsed in 2021. I remember a number of constituents contacting me in despair, some having lost significant sums of money in what they believed was an investment because it had been marketed as such. It was deliberately marketed to look like a football stock market where customers could invest in players, collect dividends based on performance and sell their shares in a player at a profit if they did well. However, when operations were suspended, customers lost more than £90 million in open bets, or in other words, investments in players.
What became clear is that Football Index was akin to a pyramid scheme, operating unsustainably until its collapse by paying customers dividends using new customers’ investments. That collapse represents the biggest collapse of a gambling product in the UK. However, relatively speaking, it has not attracted the attention that it ought to have done. We know that the Gambling Commission had been warned some 14 months prior to the collapse that the platform was an
“exceptionally dangerous pyramid scheme under the guise of a ‘football stock market’”.
Its business model was fundamentally flawed and spiralled out of control.
As we have heard, the issue is that many of those using the platform were not fully cognisant of the fact that they were gambling, participating in a pyramid scheme dressed up as something quite different. If somebody does not know that they are gambling, they surely cannot be fully aware of the risk to which their money is exposed. The reality is that Football Index’s deliberate imitation of an investment product led to
“unparalleled levels of irresponsible gambling”
from thousands of users who were misled into believing that they were not gambling but investing, and obviously had no idea of the risks to which they were exposed. There is unanimous agreement in the Chamber today, and I am sure that the Minister will be listening to that carefully.
All the information was contained in a report to the Gambling Commission, which did nothing and rejected the warnings, as it did not consider that there was enough evidence to show that the undertaking was fraudulent. It then transpired that the Gambling Commission was not properly notified of the nature of the product in its licence application, nor was the regulator informed of changes to the product after its launch as required. There has clearly been an absence of scrutiny and, one might say, of curiosity in some quarters, given the concerns raised about the platform. Football Index was never regulated by the Financial Conduct Authority, but areas for improvement for that body have been identified, including the speed of response to requests from the Gambling Commission and consistency of messaging on regulatory responsibilities.
For the constituents who contacted me about the issue—I am sure that it is the same for other Members’ constituents—the financial losses have been significant. For some, they have been life-changing, and have put strains on family relationships and future plans. Still there has been no redress for those who were told they were participating in an investment instead of a gambling opportunity. Indeed, the only hint on Football Index’s website that it was a betting site was an easy-to-miss strapline, which was added several years into its existence, and only at the insistence of the Advertising Standards Authority.
This situation happened because of spectacular failures in regulation, which allowed a gambling product to masquerade as a financial service or investment platform, without the regulation that that would suggest. Those who were fooled by Football Index—and they were fooled—should not pay the price of this failure of regulation. That only adds insult to serious injury. I know that the Minister will say that gambling losses cannot be made good by taxpayers’ money, but I draw his and other Members’ attention to the words of David Hammel, who is one of the spokespeople for the Football Index action group. He said:
“The regulators don’t actually cost the taxpayer any money, they are funded by licence fees and they also contribute to the Treasury by way of fines and settlements. There is a net surplus since…Football Index was first licensed in 2015, it’s approaching £1.3bn or £1.4bn that’s gone into the public purse.”
Football Index action group wants a mere 10% of that sum to be reassigned for use as redress. That would not directly involve taxpayers’ money.
Ronnie Cowan
I have one of those numbers going around in my head. It is said that £90 million was lost. Well, it was not lost. It is there somewhere. Someone has that money in a bank account somewhere; it did not just disappear into the ether. We are trying to find redress for people who have lost tens of thousands of pounds. If we identify that money, surely there is a way. Even if it is in a bank account in Jersey, there has to be a way of paying redress to the people who lost it in the first place.
Patricia Gibson
I thank my hon. Friend for that point, but I also urge the Minister to look carefully at the suggestion of David Hammel from the Football Index action group. I agree with Mr Hammel, and I want the Minister to consider his proposal for how redress can be managed for the victims of this scandal.
It almost goes without saying, but I will say it anyway, that such a fundamental regulatory failure must not happen again, yet Members have raised concerns about the co-founder of Football Index being involved in a new trading platform, KiX, that has striking—chilling, even—similarities to the one under discussion. I hope that the Minister will use his role to ensure that regulators keep a close watch on that new product. We must ensure that the same mistakes are not repeated, and that it is clear to all users whether a site is a gambling site or an investment site. There should never be any dubiety that the customer has to work through; it should be clear and front-facing.
I am sure the Minister will agree that this must not happen again. I ask him to think carefully about the suggestion from Mr Hammel about how we can recompense users of Football Index without directly using taxpayers’ money.
Stephanie Peacock (Barnsley East) (Lab)
It is a pleasure to serve under your chairship, Mrs Murray. I will begin by paying tribute to my hon. Friend the Member for Blaydon (Liz Twist) for securing this important debate and for all her work on this important issue.
The collapse of Football Index three years ago was devastating for many people up and down the country, as we have heard. Football fans had been told that they could put their money and confidence in players who they identified as rising stars, and were promised that they would be paid dividends if they were correct. It was advertised as the world’s first football stock market, which was misleading to users as they believed they would be using the football knowledge they had gathered over years to make money on the scheme, rather than participating in gambling.
After administrators were called in, the collapse took an estimated £90 million in customer funds. Victims have formed the Football Index action group and I pay tribute to its work. It is campaigning to ensure that the events that led to the loss of that huge amount of money never happen again, which my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) spoke about so well. Some users lost hundreds of thousands of pounds, as the hon. Member for Strangford (Jim Shannon) highlighted.
Following the collapse, the Gambling Commission decided to suspend Football Index owner BetIndex’s operating licence in 2021. The Government then commissioned a review by Malcolm Sheehan KC of the events surrounding the establishment and subsequent collapse of Football Index, with the intention of learning lessons from the mistakes made. His report concluded that BetIndex failed to properly inform the Gambling Commission of the nature of the product in its licence application and did not inform the regulator of changes to the product after its launch as it was required to.
The Football Index action group includes that among its criticisms of the model, arguing that everything about the index sought to brand it as an investment product rather than a betting site, as my hon. Friend the Member for Sheffield, Brightside and Hillsborough (Gill Furniss) outlined. Indeed, one of the index’s two main features, the “go-to-market” feature, was not communicated to the Gambling Commission as part of the original application, flouting the commission’s expectation of openness and transparency during the process.
The Government report also found that there was potential to improve the Gambling Commission’s handling of the incident. In the first instance, reports that the Gambling Commission was made aware of the issues with Football Index in 2019, two years before the collapse of the product, are extremely worrying. Questions remain about why the commission failed to act sooner, thereby potentially mitigating some of the effects of the collapse. The report recommended a number of steps for the commission to take, including greater scrutiny of new gambling-related products intending to come to market, consideration of the effect of language used on consumer understanding of gambling products, and more prompt decision making and action. The report also suggested that the Financial Conduct Authority could have done much more to help, and recommended improvement of regulatory co-operation between the commission and the FCA.
It is welcome that the Government have committed to implementing the recommendation of the Sheehan review in full, as my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) said. People feel that they have been let down by both Football Index and the regulator, and argue that they should never have been put in this position without intervention to prevent cash losses. They remain angry and the Government must learn from the incident to ensure that others do not find their capital at risk in the same way.
In an age when advances in technology have allowed the betting and gaming industry to develop rapidly, it is right that we work with the industry to ensure that consumers are protected from potentially harmful schemes while allowing those who gamble responsibly to continue to do so.
Alex Sobel (Leeds North West) (Lab/Co-op)
My hon. Friend is presenting an excellent summary of the failures of Football Index. Like others, I have constituents who lost large sums of money. I am concerned to hear that a new platform called KiX—a football cryptocurrency trading platform modelled on Football Index—has been set up with the involvement of Adam Cole, one of the founders of Football Index. Should the Government not ensure that the FCA and the Gambling Commission both look into KiX at this early stage and that the appropriate regulatory activity happens this time so we do not see a repeat of Football Index?
Stephanie Peacock
I thank my hon. Friend for his intervention and I will come on to that point in just a moment.
The rapid growth in technology and our growing awareness of the impact of gambling harms mean that changes to our gambling regulation are now long overdue. It is important that we revise our gambling legislation to avoid incidents such as the collapse of Football Index in the future. Those who flout the rules of the regulator should be punished for their actions so that customers can be sure that those operating in the market are legitimate.
That has sadly not been the case, however, as reports emerged this month that the co-founder of Football Index, Adam Cole, is now helping to launch a product similar to the collapsed platform. That will be released as the new football cryptocurrency trading project KiX, as has been mentioned. The Football Index action group spokesperson, David Hammel, described that as
“a real kick in the teeth”
for victims. I would like to raise those concerns with the Minister and ask him why Adam Cole has been allowed to be an integral part of a new platform that mirrors Football Index.
We have heard about the devastating effect that losing money through Football Index has had on the mental health and lives of users. It is clear that more must be done to ensure that vulnerable people and families are protected. The Labour party welcomes the measures outlined in the gambling White Paper with the intention of protecting vulnerable people from gambling harms and financial detriment.
Examples like the collapse of the Football Index outline the serious threat that not having the right legislative and regulatory protections in place can cause to consumers. I hope the Minister will listen to the concerns of the Football Index action group, and that he can tell us what the Government have been doing to ensure that this can never happen again and how they can learn from past mistakes.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stuart Andrew)
It is a pleasure to serve under your chairmanship, Mrs Murray. I thank the hon. Member for Blaydon (Liz Twist) for tabling this debate. I know she also secured a debate in 2022 on the impacts of the Football Index collapse. I would like to acknowledge the contribution she has made to ensuring that these events receive the attention that they deserve. She is an admirable representative of those in her constituency and others who have been affected. The Government appreciate, and I certainly do, the impact these events have had on them and many others. I personally offer my sympathies to all of those affected financially by the collapse of Football Index.
I thank all hon. Members for their contributions today. I also want to say thank you to David Hammel for his campaigning work on behalf of people who have lost money as a result of these events. I have met Mr Hammel and know that he has engaged administrators, regulators and politicians on behalf of those affected.
Today’s debate has been valuable and I commend all those who have contributed for their thoughtful comments. It has been important for me personally to hear the perspective shared this afternoon on this important topic. I want to be clear that I and the Government recognise the serious consequences that the collapse of Football Index has had on consumers. As I said, I sympathise with all those affected. It is important that we ensure that a similar scenario cannot happen again.
I will not repeat the background to these events, as that has been well covered by colleagues. I want to focus on the action being taken following the independent review of the regulation of Football Index, led by Malcolm Sheehan KC. I thank him for that work. His report examined the regulatory circumstances around the granting of a licence to BetIndex, its subsequent suspension and the company’s ultimate financial failure. Importantly, it identified areas, as others have said, where the Gambling Commission could have been more effective in responding to the challenges posed by this novel product. It also highlighted where the FCA could have co-operated more effectively with the commission.
The report recommended that the Gambling Commission should enhance its scrutiny of novel products; such products are less likely to fit neatly into existing regulatory frameworks, and there is greater risk that they are poorly understood by customers, as colleagues have mentioned. It recommended closer examination of the language typically associated with investments and financial markets, which can obscure the fact that a product is a gambling rather than a financial product. It outlined the need for more prompt decision making, quicker internal escalation and greater scrutiny of any differences between described and actual features of products. Finally, the report recommended that the commission consider whether operators should be required to demonstrate additional levels of liquidity in the case of longer-term tradeable bets like those offered by Football Index.
Although Football Index was never regulated by the Financial Conduct Authority, Mr Sheehan’s report recommended that the FCA should also seek to achieve quicker and more consistent decision making on regulatory responsibility issues. The report concluded that the FCA could have been faster to come to decisions in the Football Index case and to communicate those to the Gambling Commission.
The Gambling Commission and the FCA agreed a formal memorandum of understanding in June 2021. The Sheehan report described that as an appropriate and proactive step. However, it also made recommendations about how the memorandum could be strengthened. It recommended that the new memorandum should include an agreed mechanism for resolving disputes over regulatory responsibility; mechanisms for ensuring that disputes are identified, discussed and escalated where necessary; and provisions for the written recording of meeting outcomes.
It is vital, as the title of the debate points out, that we learn lessons from the Football Index case to ensure that a similar situation does not take place again. I am pleased that all the recommendations of the report for the commission and the FCA have been implemented in full.
The Gambling Commission has taken various actions to achieve that. It consulted on and updated its statement of principles for licensing and regulation in June 2022. It has updated how it assesses risk so that novel products are properly considered. It now undertakes systematic reviews of novel products offered by existing licensees. It has also increased the resources available to ensure that licensees disclose notifiable changes to products. The commission has also changed its approach to licensing products where long-term bets might appear more like financial products. It has made it clear in its statement of principles that it will not normally grant a licence to products that use language usually associated with investments or financial products.
Various colleagues raised issues around advertising, and the hon. Member for Worsley and Eccles South (Barbara Keeley) asked about the gambling White Paper. We are not introducing one single Bill because we want to ensure that we get as many of the changes done as quickly as possible. We are making good progress. I have consistently committed to trying to get everything done by the summer. Some of these things will be ready for statutory instruments soon, but some are what the Gambling Commission will implement. By splitting it up, rather than having one big Bill that might take a long time to get through this place, we are proceeding at pace to bring about the reforms.
The FCA has also implemented all the recommendations from the report. Importantly, it has taken steps to improve the speed and consistency of its decision making, including nominating an executive director to oversee the relationship with the Gambling Commission.
An updated memorandum of understanding addressing all the review’s recommendations was agreed between the commission and the FCA in November 2022. The agreement has established a process and timeline for co-operation between the two authorities and a process for escalation, and created a relationship owner and primary contact in each authority to oversee the operation of the memorandum. It also requires a quarterly minuted meeting between the two authorities to ensure that the memorandum operates as it should. The most recent meeting took place yesterday.
There are also now ad hoc meetings between the chief executive officers of the two authorities, which provide an avenue for escalation of regulatory matters if required. I am grateful to the Gambling Commission and the FCA for their work to ensure that this important report is acted on.
I mentioned David Hammel, and I admire the work of campaign groups such as the Football Index action group and the way that it has conducted itself. I met him last year and we have had follow-up correspondence. I am taking seriously the extra evidence that Mr Hammel has submitted in relation to the Sheehan review, and I am considering, as the hon. Member for Blaydon mentioned, whether it would be appropriate and feasible for Mr Hammel’s evidence to be scrutinised by someone external to the Department.
A lot of Members mentioned the new product, KiX, which has described itself as a football cryptocurrency trading project and bears similarities to Football Index. It involves trading footballers in the form of so-called “Digital Athlete Tokens”, which are purchased with cryptocurrency. The tokens pay out a yield based on the performance of footballers. It appears that the product is in a test phase and is not currently live, nor does it appear possible to deposit currency.
The Gambling Commission is taking proactive steps in relation to KiX. It has written to the hon. Members for Blaydon, for Swansea East (Carolyn Harris) and for Brentford and Isleworth (Ruth Cadbury) to outline its approach, and it has written to my Department. The commission is currently reviewing a number of elements of the KiX product. That includes a review by its compliance and legal teams to consider whether, if launched, it would meet the definition of gambling under the Gambling Act 2005. It has also written to the individuals responsible for KiX for further information on the product and their intentions, and to highlight the consequences of launching a product that meets the definition of gambling in Great Britain without an appropriate licence.
Ronnie Cowan
Is the Minister saying that the Gambling Commission alone will decide whether KiX is given a licence to bring its products to the marketplace? I have a meeting with the Gambling Commission at 4.30 this afternoon and I would like to ask it that question, too.
Stuart Andrew
The hon. Gentleman interrupted me just before I was going to say that the commission and the FCA are already engaging to establish the details of the product and to agree the appropriate steps.
There have been reports that two individuals previously involved in running Football Index are involved in KiX. Adam Cole was the co-founder of Football Index. He surrendered his personal management licence in September 2021 while under review, and the commission reached findings of fact regarding his involvement in Football Index. Those would be considered if he were to make a new application for a personal licence.
The commission also wrote to Abdullah Suleyman, the former head of trading at Football Index, to confirm the nature of his involvement in KiX. Following the letter, he surrendered his personal management licence on Monday 22 April.
Liz Twist
I recognise some of the steps that have been taken, but this comes down to the fact that we do not want to see people being taken in in the same way as they were with Football Index. It is great that those individuals have given up their personal management licences, but they have already shared their information and used their experience to set up a new system. What more can we do to make sure that people in the UK are clear about the status of this and that it is properly regulated?
Stuart Andrew
I was going to come on to that point. I reassure colleagues that the commission will continue to take a very active role in the monitoring of this product, and the FCA is also looking into the KiX business and will take appropriate risk-based action if it identifies that any of its activities fall into the FCA’s remit. However, I will raise this issue with both organisations again to ensure that everything is being done, because, like everybody else here, I do not want this to happen again. I hope I can reassure the House that the commission has been monitoring the market for several years for potential products that attempt to replicate Football Index. It has intervened in several instances. Although it would not be appropriate for me to name those businesses, that demonstrates the commission’s proactive work in this area.
The hon. Member for Blaydon raised the issue of StocksFC. The Gambling Commission is engaged with StocksFC and is monitoring the company at this moment. I will write to the commission for further information on that product and ensure that everything is being done to monitor it.
Barbara Keeley
I want to emphasise the point that my hon. Friend the Member for Blaydon made, but I also want to pose a question: what credibility does the Minister think the Gambling Commission has now, given that so many people have lost so much money? As for the commission posing the question of KiX, “Is it gambling?”, if it is based on the Football Index proof of concept and the expertise going into it is from Football Index, it is Football Index mark 2 in a different form. Hon. Members have all outlined how much this was not an investment and how much it was gambling. In fact, questions of compensation are affected by that, in that Ministers have said that taxpayers’ money should not be used to compensate people for gambling losses. So it seems to me that it is a bit of a joke to ask, “Is it gambling?” Do we have to ask that when it so obviously is?
Stuart Andrew
I understand the hon. Lady’s point, but it is important that these things are looked at properly, under the remit of the existing legislation. The Gambling Commission has done a lot of work in this space to try to deal with the grey area that the hon. Member for Inverclyde (Ronnie Cowan) mentioned. I want to come on to that point, because the cryptoasset side of things brings in another area of work.
I assure Members here that I will speak to my Treasury colleagues to highlight this issue, and to ensure that we do not find ourselves in a position like this again and address each of these issues. I am confident that the relationship between the Gambling Commission and the FCA is much improved and that the regular meetings between the two organisations will ensure that there is not a slip again. However, in order to get this right, I am more than happy to speak to colleagues in other Departments to ensure that no cracks still exist.
Patricia Gibson
I want to press the Minister: can he assure me that he will go away and look at the suggestion made by David Hammel of the Football Index action group about a route to deliver compensation without having to take it directly from the taxpayer?
Stuart Andrew
I think it would be worth more than my life’s worth to commit Treasury colleagues to a policy, but I understand the hon. Lady’s point. I have seen that suggestion and I am sure that Treasury colleagues will have views on it. I will raise that with them and write to hon. Members following their response.
I thank everyone who has contributed to the debate. I hope that I have been able to provide clarity about some of the lessons that have been learned from the collapse of Football Index and the action that has been taken by the Government, the Gambling Commission and the FCA as a result. I understand the real consequences that people have felt. This debate has been invaluable for me to ensure that we consider all the issues that need addressing and speak to colleagues across Government so that we do not see this awful situation happen again.
Liz Twist
I thank everyone who has taken part in this debate, including my hon. Friends the Members for Ellesmere Port and Neston (Justin Madders) and for Worsley and Eccles South (Barbara Keeley), the hon. Member for Strangford (Jim Shannon), and my hon. Friend the Member for Sheffield, Brightside and Hillsborough (Gill Furniss). I thank the shadow Front Benchers, the hon. Member for North Ayrshire and Arran (Patricia Gibson) and my hon. Friend the Member for Barnsley East (Stephanie Peacock), and I thank the Minister for his response.
I have a few points to make. As is usual these days, people have been tweeting points at me all the time as well, so I was watching those. The main thing I want to say is that we all want to ensure that we learn the lessons and make it not possible for people to be fooled—to be misled—in this way again. That is what our attention must go to.
I am particularly concerned that we should not see people falling through a gap in the regulatory frameworks, whether that involves the FCA, the Gambling Commission or any other organisation. It is really important that we not only reach memorandums of understanding but ensure that that works and, if neither one seems suitable, that we look at what on earth we can do to make sure that the gap is plugged in the meantime. That is really important for people.
I note that the Minister has undertaken to speak to the Treasury, which is really helpful. Arguably, we could have been having a debate in Treasury time saying what happened and what went wrong. It is really important that the Government work together to ensure that people are not misled and not required to look at the tiny print at the bottom of a website to find out the status of a scheme.
Finally, in news hot off the press, we talked about the FSCS, and I understand that there are currently 10,000 users on that scheme and that we are still looking at it. I do not expect the Minister to be able to respond on that, but it would be helpful if we looked at it outside this debate.
I thank everyone for participating. Let us make sure that what happened with Football Index is not allowed to happen again.
Question put and agreed to.
Resolved,
That this House has considered the lessons learned from the collapse of Football Index.
Universal Credit: Farmers
(7 months ago)
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Wendy Chamberlain (North East Fife) (LD)
I beg to move,
That this House has considered universal credit and farmers.
It is a pleasure to serve under your chairpersonship, Mrs Murray.
This morning for breakfast I had oat clusters, and for lunch I had a cheese panini with some salad—it is a good day when I remember to eat. So far today, without even thinking about it, I have had produce from oat and wheat farmers, dairy farmers and a variety of vegetable farmers, and I am suspect everyone here could say something similar if they stopped to fill in a food diary. Farming is integral to our day-to-day lives.
When we are down here in Westminster, farming might seem very far away—there is not a field in sight—but my constituency of North East Fife is rural and has a wide variety of agricultural businesses. Next month, the annual Fife Show will attract farming from across North East Fife and the surrounding areas, and bring that community very visibly together. It is therefore not surprising that I am here today talking about this issue, given the constituency I represent, but it affects even MPs representing urban constituencies: farming is quite literally the lifeblood of our very being. Without farmers, we would not have food. I say that at the start of a debate on universal credit to drive home the very important point that we must not lose sight of the needs of our farmers, and must do everything we can to support them. Surely that is what the Government’s Farm to Fork strategy is all about.
The state of our food supply chains mean that some farmers need benefits to boost their incomes, and that is deeply worrying. That is a debate for another day and another Department. The fact that some need support is why we are here today to ask the Minister and the Department to design a system that works with, and not against, farmers.
Jim Shannon (Strangford) (DUP)
The hon. Lady always brings subjects to Westminster Hall and the Chamber that are of particular interest to me. I declare an interest: I am a member of the Ulster Farmers’ Union, and we own a farm outside Greyabbey, so I understand the issues and the implications of what she is saying. Does she agree that farmers may have three good months of income—not necessarily profit—followed by nine months of hardship, so the monthly system is not appropriate for their seasonal work? Rather than making farming viable, the Government aid through the universal credit system may put people off and make farming untenable for families. That is incredibly concerning as it affects our food security, which this debate is also about—food security and delivering for the nation.
Wendy Chamberlain
The hon. Gentleman always gets straight to the key issues in his interventions. I will talk about a number of the things that he referenced. Indeed, the monthly aspect of universal credit is one of the key challenges.
Let me start with the basic point: the Government are asking the vast majority of farmers to go through the process of transitioning to universal credit from tax credits now, right in the middle of peak farming months. For example, it is the middle of lambing season. Let me be blunt: sheep farmers do not currently have the time to sort through accounts, visit the jobcentre or have interviews by phone. We all recognise that farming is not a 9 to 5 job where appointments can be scheduled. The sheep three fields down having a difficult birth will not be able to hold on just because the jobcentre is due to call. The farmer who cares deeply for their animals and also cannot afford to lose income if things go wrong will not be able to stay in the farmhouse to wait for that call. They will be down in the field with the sheep to keep an eye on things and intervene if need be. Even if there is a phone signal, which is not always guaranteed, a farmer can hardly talk through the viability of his or her business while elbow deep in that sheep.
I appreciate that that sounds slightly comical, but it is deeply frustrating for farmers and incredibly stressful when they are worried about losing their income. It shows a failure within the DWP system to understand how farming works, so I ask the Minister: what thought and consideration was given to farmers when the decision to roll out the transition to universal credit was made? I know the National Farmers Union raised concerns about the transition as early as 2018 in evidence to the Work and Pensions Committee. Did the Government pay any attention to that? Even if they are talking to the NFU, I cannot see the outcome in those policy decisions.
I recently tabled a written question asking for an impact assessment on how the roll-out of universal credit to farmers has been done. The response—I will be honest—did not exactly answer the question, so I will make the assumption that the answer is no. If I am wrong, I am happy to be corrected on that, and I hope the Minister will use her time to set out the findings from that assessment. But the response I received did point me to the latest findings from the “Move to Universal Credit”, in which there was only one paragraph relevant to farmers—an observation that additional checks on self-employed claimants may be a factor in the low take-up of universal credit. Obviously, that is a part of it, but it somewhat understates the issue, and it also conflates all self-employment businesses. Farming is very different to somebody, for example, running a shop, selling handmade products, or a tradesperson such as a joiner. Here we are: I am going to assume that the Minister has heard the warnings from the NFU, has seen correspondence from MPs, has spoken to farmers herself, has had her officials carry out research into the farming industry, and has seen the media coverage on the radio, specialist farming news and print media.
In any case, I will explain why universal credit fails farmers. Universal credit does not account for variable incomes and does not allow for those incomes to be averaged out. The very nature of farming means that farming income varies significantly through the year, or even over multiple years. I want to go back to that sheep farmer who is busy saving their animals and bringing new ones into the world, rather than speaking to a work coach. That lamb will not be ready for sale until much later in the year, meanwhile the sheep and the lamb will require food, shelter, water, shearing and possibly extra hands on the farm to help out in the busy months. An animal farmer might in some cases try their hardest to grow crops to be harvested in each season, but often that is not practical. Not all areas are suitable for all produce, and even if they were, economies of scale mean that it can be more profitable to specialise. That does not mean there is no work that needs to be done until harvest and sale time; just that the work done by farmers does not get paid for many months. Meanwhile, seed, fertiliser and fuel costs are all going up. That is arguably one of the reasons why some farmers need extra support in the first instance.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
Like my hon. Friend, I have had correspondence with the Government on this issue. The sheep farmer example is a very good one. That sheep farmer will have income, possibly in the autumn from the sale of the sheep, possibly from a basic payment, and possibly from something like the less favoured area support scheme. There might be a small wool cheque at some time in the late summer or early autumn, but apart from that, that is all the income, which then has to be spread and harvested throughout the rest of the year. That is the reality for the sheep farmers to which my hon. Friend refers, and it shows the virtual impossibility of shoehorning that into a universal credit scheme that looks at things on a monthly basis.
Wendy Chamberlain
I am grateful to my right hon. Friend, and he has illustrated part of the challenge. We are finding that, when that income spike happens, that is the very point where farmers are losing the benefit to which they should be entitled. It is important to recognise that sometimes it all goes wrong: a really bad harvest; illness among livestock; a year of barely breaking even; or worse. Otherwise, in the main, hopefully all that hard work and waiting pays off and payments come in. After months of very little, there is a significant income boost, and a boost that—as I have just said—will write off universal credit for that month, even though that income boost will have to stretch over the many months until the next sale day.
Tax credits allowed farmers to average out their income over a multiple-year cycle to truly reflect their monthly income over time. Universal credit only takes a one-month snapshot, and I know that people have experienced difficulties with universal credit in occupations such as farming for that very reason. Given that work coaches are required to assess whether self-employment is gainful, there is a significant risk of months of loss being seen as not real work. Recently, on that very issue, a headline in the Telegraph stated: “Farmers claiming benefits told their farms are ‘hobbies’ and to get jobs”. Some work coaches might understand how farming works, but it is clear that others certainly will not and do not—it cannot be left to luck. I doubt the Department has spare funds to train all work coaches in farming practices, so a standard reform of how income is assessed would surely be a much fairer and efficient path to take.
Another related issue that I will highlight is the imposition of the minimum income floor after the 12-month transition period. I fully accept that there must be measures to stop people being able to potentially manipulate benefits to prop up an unsustainable small or hobby business. Applying a deemed minimum income when calculating universal credit works in those cases, but I seriously question why it is useful to take vital income support away from farming families in those months where their produce is being produced rather than sold. Farmers are not earning the minimum wage in those months, so why on earth are we pretending that they do?
The 12-month transition period is welcome, but the nature of farming will not change in the course of a year. Arguably, all that will do is push the problem down the road, so I urge the Minister to go away and review it. If she is genuinely concerned about farmers exploiting universal credit, there must be other anti-abuse provisions that we could be looking at. The minimum income floor is a blunt tool that is doing more harm than good.
My final point is similar to my first, because after the administrative burden of applying to universal credit, farmers must continue providing monthly income updates. Farmers are not accountants; they often operate in partnerships and, most importantly, they work full time doing the actual farming. Their definition of full time is different from others, because it means well over 12 hours per day, seven days a week. When exactly does the Minister think that farmers will have the time to meet those obligations?
I ask the Minister to not just repeat the same platitudes that have been signed off and sent in a standard letter, which my right hon. Friend the Member for Orkney and Shetland (Mr Carmichael) and I have both received. I have seen that letter shared online many times, and I assure the Minister that it has done nothing to reassure anyone.
The good news for the Minister is that she needs only to look back to the tax credit system to find out what works; she does not need to reinvent the wheel. What farmers need is a system that allows for averaging income over multiple months and years, where benefits are paid during income spikes and where there is no assumed minimum income when it is low. They need a system without the administrative burden of monthly appointments and paperwork, and with an understanding of how farming works and the variety of set-ups, be that tenant farmers, those in partnerships, and everything in between.
It is not just farmers saying that. I have an example from a rural land and property agent, who has published a blog entitled “Why the Universal Credit System Isn’t Working for Farmers”. The Farming Forum threads on the change currently have nine pages of comments on one thread, while another thread has 24 pages. There is a Facebook support group for farming families that has been deliberately kept open so that MPs, journalists and others can see what farmers are saying about this change.
Yesterday, on that Facebook page, someone anonymously posted that because their family were so busy on the farm they could not get to the job centre, and their benefits had been stopped. The writer went on to say, in their own words, that they wanted to chuck themselves off a bridge as a result. A few days before that, someone wrote that they were able to feed their children but they could not afford to eat that day themselves. They used to get £700 in tax credits a month, but the assessment for universal credit does not take into account the difference between income paid to the family and income used to meet farming bills.
The system change means that someone who is producing our food cannot afford to eat. That is just not okay. Farmers are literally the reason why we are here in the Chamber with full stomachs, why our children have the energy to go to school and learn, why we can go to the supermarket and make our dinners tonight and why our restaurants are some of the best in the world. It is not an issue that will go away; it is a crisis for too many farming families. We must support them, and I hope that the Minister’s response recognises the gravity of the situation.
The Minister for Employment (Jo Churchill)
It is a pleasure to see you in the Chair, Mrs Murray. Before I respond, I would like to pay tribute to Lord Field, whose passing was announced earlier today. He was a wonderful individual who contributed over many decades to the important issue of welfare. My personal memories are of his kindness and compassion during my early days here. As a former Work and Pensions Committee Chair, I know he would have taken great interest in all the activity happening across the House on welfare issues, not only this week but in the recent past.
I congratulate the hon. Member for North East Fife (Wendy Chamberlain) on securing this debate. First, let me put it on record that the Government recognise the vital contribution of farmers to the country and to the economy as a whole. It is worth the most enormous amount to us, in not only the growing sector, but the manufacturing sector. From my own early days as a young farmer, right through to my representing a rural community, I have been more than embedded, and I understand the challenges. The hon. Lady will know—as I do—that, as with many business areas and sectors, these businesses come in a multitude of forms. Although I appreciate what she said about her farmers lambing, my farmers are trying to get seeds in the ground after the most appalling rainfall. I say gently that they are not the only businesses dealing with fluctuating incomes, transitions throughout their year or lives where they put in 12-hour days. We are working with them, and I agree that that point is important.
For clarity, I met the representatives from the National Farmers Union on 19 March, and I am very grateful to them. As soon as the issue of the migration of those in the farming community from tax credits to universal credit was flagged to me, I reached out to the NFU directly, it responded and we had the meeting to discuss that issue. I cannot answer the specifics that the hon. Lady brought up, but I am interested in them, because the tax credit migration notices have only just gone out, so I am confused as to why there would have been the stories she mentioned. Perhaps if I might be facilitated with those individual challenges, I can make sure they are addressed swiftly.
Officials in my Department are continuing that engagement to ensure that farming communities are communicated with clearly, that the transition to universal credit is as smooth as possible and that the concerns are heard. At official level, I had meetings on 9 and 10 April with officials from my Department and the NFU. Engagement has been constructive. Actions include sharing the third-party information pack on the move to UC with the NFU, which will share it with farming charities—the pack supports welfare rights organisations and charities in understanding the process of making claims and what support is available; the NFU promoting the move to UC activity to the farming community via its regular communication channels; work with the NFU to produce a product for work coaches explaining the farming sector, because I, too, do not like that term; and inviting the NFU external affairs team to a monthly UC stakeholders forum. I have also asked whether we can have somebody with the right expertise at our county shows throughout the country to have a session in the NFU tent, the CLA tent or wherever is appropriate, so that people can have discreet conversations where they are most likely to be facilitated.
The Department is providing that support, including assistance when making a claim for universal credit to those who need it. Importantly, that also includes comprehensive transitional protection if they are eligible. Transitional protection is an extra payment in a customer’s UC award ensuring that their entitlement is not lower than what they would have received on tax credits at the point of movement. Transitional protection is there to smooth the change, which is why individuals should fill in the migration notice when they get it. Importantly, self-employed customers are also exempt from the application of the minimum income floor for a 12-month period, providing significant time for the adjustment to UC to take place.
It is therefore vital that customers take action when the migration notices are received, so that they do not miss out on the important transitional protections we are trying to provide to make sure that a worried customer—today we are talking about farming, but they could come from various other sectors—is helped and managed through the migration. When I discussed this with the NFU in March, it understood the need to avoid delay and indicated that it stood ready to support individuals and ensure they engage.
Mr Carmichael
I am sure we can all play a role in ensuring that this transitional relief and the importance of returning the form are understood—doubtless, the NFU and others will do that, too. The difficulty I have, however, is that even at the end of that transitional period, I do not see what in the farming business model will have changed. There will still be self-employed people with income coming in significant sums, but at small points in the year. At the end of the transition, we will still be where we are today—that will not change. If there is going to be change, it must come from the UC system.
Jo Churchill
I thank the right hon. Gentleman for his comments. If he will allow me, I will come on to those shortly. I gently say that he comes from a tourist-driven area, where those incomes for those individuals fluctuate, and we expect them to have moved over to the UC system.
With regard to self-employment, universal credit addresses a number of flaws with the tax credit system. The Government stand by these reforms, which were first introduced in 2013. To give context, self-employed individuals have previously been able to report very low earnings from their business activity while receiving much of their income from tax credits. That can act as a disincentive to grow a business or look elsewhere for employment, if a business is not viable. All of us in this room know that businesses vary in their viability. This is an arguably unfair situation for the taxpayer and risks trapping individuals in low-earning self-employment and thereby, in some instances, more of a dependency on the welfare system.
All customers moving to universal credit, including farmers, are asked and expected to attend a one-off meeting with a work coach to confirm their employment status. This means confirming that farming is their main employment, being regular, organised and developed, and trying to making a profit—not that it has to, but just that it is their main job. I am sure the hon. Member for North East Fife would not disagree with this approach, as it is focused on fairness. We consider each claimant’s circumstances individually, and it is no different for farmers. They are most likely to be considered gainfully self-employed, for the exact reasons she laid out: they have livestock, they have to be there every single day, or they have crops to grow and so on. They will therefore be free to work on their business with no expectation to look for other work or take it up while in receipt of universal credit.
During a farmer’s first year in receipt of the new benefit, they might be expected to meet their work coach up to four times more, but to minimise this, multiple appointment channels are available, which I am assured includes digital, so it might just be a short meeting over Teams. With all due respect, that is not any more onerous than engaging with a feed supplier or with accountants. After 12 months, the minimum income floor is applied, and no further work coach interactions are required if an individual’s or a household’s circumstances stay the same. Again, once established—that is what the transition period is about—that stability is carried through.
I know that concerns have been expressed about the impacts on farmers through the way their earnings are reported and the administrative burden that this might cause, but I would like to reassure hon. and right hon. Members that my officials are working with the NFU to better understand whether farmers are worrying about this challenge in anticipation, or whether there are things we can do to assist. That includes the NFU’s attendance at monthly stakeholder engagement sessions and our offering to speak at NFU events. It is not to anyone’s benefit to have people worried in this situation.
Universal credit seeks to take earnings into account in a way that is fair and transparent, with earnings considered in the assessment period in which they are received, with a customer’s award adjusted accordingly. That does mean that individuals are required to report their earnings more frequently than with tax credits and in a slightly different way. However, the system has been designed to be simple and straightforward, with customers needing to provide only the total income from receipts into the business and high-level details of payments out during the assessment period.
While we are debating universal credit and farmers, I gently say that the farming community, as I alluded to earlier, is not the only profession experiencing these large monthly fluctuations, with retail and tourism also doing so. I am sure that the hon. Member for North East Fife agrees that it is important that we work with our farmers, vital as they are to all of us, given the food they put on our plate, to alleviate concerns, overcome barriers and help with the transition to UC.
Assessing earnings monthly rather than annually may have a greater impact on all self-employed people with large monthly fluctuations, but steps have been taken to account for that. Where a self-employed customer reports a loss, the value of the loss is carried forward and taken into account when assessing earnings in future assessment periods. Similarly, when customers experience a spike in their earnings, only earnings that have exceeded £2,500 more than the amount that would normally reduce their universal credit award to zero will be carried forward to affect a future assessment period.
Universal credit is a broad system of support that takes account of all individual household circumstances. I am a little concerned that the assumption today is that every engagement a farmer might have with the Department for Work and Pensions would be a negative one; that is not the case. Where additional help is available—for example, with childcare or other assistance—individuals will be signposted to the support they are eligible for, which they might not have been aware of prior to making their claim.
Finally, I want to put on record my thanks to the NFU, which swiftly engaged with us when asked and was honest and forthright about the challenges. It has stepped up to working with us. I hope that we can work together to assist the broader farming community, which is hugely important to the nation. I strongly encourage people to engage with the migration notice so that they can access the support and income protection as we make the move to universal credit.
Mr Carmichael
On a point of order, Mrs Murray. It was remiss of me while intervening in the debate not to remind the House of my entry in the Register of Members’ Financial Interests. I hope you will allow me to do so now for the record.
Space Industry
(7 months ago)
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Mark Garnier (Wyre Forest) (Con)
I beg to move,
That this House has considered the UK space industry.
It is a pleasure to serve under your chairmanship, Mrs Murray, and a delight for me to talk about this extraordinarily thriving industry right here in the UK.
As chair of the all-party parliamentary group for space, I get the opportunity to see at first hand what is happening in the UK. The group has recently put on four exhibitions, taking over the Attlee Suite here in Parliament to highlight various aspects of our thriving space industry. We started last year with launch and propulsion, followed by current applications that use space, and we have finished with two sessions on the future of space and the important issue of space sustainability. The exhibitions were well attended by parliamentarians, civil servants and industry experts, and over the four events, more than 40 space companies had the chance to highlight their skills and products to attendees. The exhibitions were supported by ADS and UKspace, and my thanks go to the teams that helped both with those events and in supporting the all-party parliamentary group.
Such drop-by exhibitions serve to highlight that the UK space industry is thriving, active and innovative. Indeed, it is the leader in smart thinking for the sustainability of space and how we will preserve it for future generations. Smart thinking on things such as ESG —environmental, social and governance—kitemarking for UK-licensed space flights, and the wider discussions of space sustainability bonds mean that the UK is a thought leader that will ensure that the ultimate infinity of space is not lost to us because of an impenetrable cloud of space debris orbiting the earth.
At this point, I should declare that my fascination with the sector goes so far that I take an interest in specific companies and organisations, and I refer hon. Members to my entry in the Register of Members’ Financial Interests. I will, of course, avoid speaking about those interests that are financial this afternoon, for important reasons.
Jim Shannon (Strangford) (DUP)
I commend the hon. Gentleman for introducing the debate. I spoke to him beforehand and I am keen to ensure that whenever this process moves forward on the engineering side, we in Northern Ireland can benefit. Does he agree that, with engineering the largest subsector in Northern Ireland and especially in the field of aerospace, skill and capacity levels are high and therefore ripe for further investment? Does he further agree that Northern Ireland and the United Kingdom must be globally promoted as being shovel ready or, to use the terminology, rocket ready for greater investment?
Mark Garnier
The hon. Gentleman is absolutely right and I will mention Belfast later. Queen’s University Belfast has recently hosted some incredibly important energy-beaming experiments, which will completely open up the possibility for the UK to be world leaders in space-based solar power. I will talk a little more about that later.
My interest in space also derives from my unachieved desire to be an aeronautical engineer. My career in the City of London and an interest in economics have given me the insight to recognise that the space industry is the epitome of what Adam Smith talked about in his 1776 book “The Wealth of Nations”. The space industry epitomises a mature economy’s desire to seek ever more productive activities and the UK is doing particularly well in that area.
The UK space sector as a whole has a turnover of some £17.5 billion per annum, employing nearly 50,000 people, 2,300 of whom are apprentices.
Christine Jardine (Edinburgh West) (LD)
I thank the hon. Member for giving way and for obtaining this debate, which is of particular significance in Scotland and in my constituency. I recently visited San Francisco and its space industry, where Edinburgh University is highly regarded. An ecosystem and an environment have been created there that engender growth and co-operation between the university and the private sector specifically on space. Does the hon. Member feel we are doing enough in this country to engender the same sort of ecosystem in places such as Edinburgh, where there is that potential?
Mark Garnier
We are, but we could always do more. It is interesting that the hon. Lady chose that moment to intervene because I was just about to mention the amazing things going on in Scotland. Scotland is fascinating for a whole load of different reasons, but she is absolutely right to raise those important points. How we take forward our space industry now through the relationship with the Government is incredibly important to its success. I will talk more about that later, but she should be proud that Scotland is doing so well. I am pleased to see several Members from Scotland who are here to rightly represent the interests of their constituencies, and I look forward to hearing from them all.
In fact, my next line was that more CubeSats are built in Glasgow than anywhere else in the world. Indeed, the space industry in the UK has led to a number of key hubs for space across the country, in addition to Glasgow and Scotland more widely. While it is sometimes easy to overdo the definition of a hub, we have a handful of significant centres leading the way. Harwell Science and Innovation Campus near Oxford hosts a large campus of space companies, from start-ups supported by the Satellite Applications Catapult to offices for big primes and the European Space Agency. Surrey has its research park at Guildford centred around the leading UK satellite company, Surrey Satellite Technology Ltd. Cornwall has a hub developed around the Newquay spaceport and Goonhilly earth station. Leicester has its own science and space park with a fabulous museum and, of course, a space-dedicated university. Scotland has not just its hub around Glasgow, but potentially three vertical and two horizontal launch centres.
The global opportunity is immense. Across the world, turnover is expected to grow from £270 billion in 2019 to £490 billion by 2030. It is vital that the UK not only participates in that growth with our own domestic ambitions, but accelerates its opportunity by seeking wider export markets.
David Morris (Morecambe and Lunesdale) (Con)
I declare an interest as the UK space adviser—non-paid, of course. Does my hon. Friend agree that the Government are putting more money into the space sector than any other Government before them?
Mark Garnier
They are, but it could always be better. Again, I will come to that later, but my hon. Friend is absolutely right that support from Government in this complicated sector is incredibly important.
To get back to the export market opportunities, the team at space consultants Space4Sight has identified 25 nations across the globe that are only now starting to show their space interest, all of which would benefit from a collaboration with UK companies and expertise. Indeed, I am heading to Vietnam in a month in my role as the Prime Minister’s trade envoy to Vietnam, and one of the scheduled meetings is to promote UK space exports to that economy, which is growing incredibly strongly. This is a huge opportunity for the UK to grow space technology exports to newly identified space nations.
Although we are good at this stuff, we must not be complacent. We have a lead in many areas, but without the right environment, we could lose out to other nations. We need to think about what space is. I have always seen it as a thriving economic sector, yet I notice that the Government, in their last restructuring, chose to locate it in the Department for Science, Innovation and Technology, as opposed to the Department for Business and Trade. Space is a business, not a science project. While I have immense respect for those supporting the sector in DSIT, and they have done an incredibly good job, I hope the Minister will reassure me that his Department sees space as a sector that contributes to our economy, with a lot of commercial opportunity.
I would not want the Minister to feel that I do not appreciate what his Department and some other Departments do for the sector. The Government invest directly in space activities and, according to the OECD, our public spending amounts to around 0.025% of our national GDP. It sounds like a small number, but it represents quite a significant amount of money. However, when compared with other countries, it starts to look a bit small. It is half the relative commitment of Germany, India and Belgium. It is a third of the commitment of Italy and Japan, and a quarter of the investment by France and the United States of America. The sector is highly commercial, but because of the challenges of high upfront costs, other countries have discovered that de-risking opportunities for investors through grant funding stimulates private investment. I hope Members of all parties agree that we should get behind stimulating private investment in the sector through grant funding.
We should not necessarily see space as a sector in its own right. We have other assets in the UK that would benefit from a symbiotic relationship with this super high-tech, high-productivity sector of the economy. The City of London has been a global leader of finance and financial markets for a few centuries now. Expertise in trade finance, investment, insurance, currency trading and the wider associated legal service has made the City of London a global financial hub for a long time, but our lead position is always under threat. For the City to remain a leader, it needs to remain relevant.
A few years ago, I prepared a discussion paper on how we can take inspiration from Gordon Brown’s tax interventions in the UK film industry to find a way to stimulate the City as a space finance hub. Gordon Brown created tax breaks for film investment. I suspect a direct line can be drawn from his intervention to the success, for example, of the Harry Potter franchise. That series of films would always have been made but, without that tax incentive, those spells may have been cast with a Hollywood accent.
A selected tax break here, an innovative approach to governance there, and the City could dominate the world as the go-to place to raise money for space-related opportunities. The City would continue its path from being innovative financier of trade across the globe to modern financier of trade beyond the globe. Other ideas are coming out of the City that would be good to get behind. Professor Michael Mainelli, who is now Lord Mayor of London, has been promoting a space protection initiative that looks at the further purchase of space debris retrieval insurance bonds to go on space flights to ensure that any debris could be recovered in the event of a satellite going out of service. Perhaps they could be called space junk bonds.
If we combine that financial expertise with our world-beating universities and wider technical capabilities, the UK will become the destination for all aspiring space entrepreneurs and developers. With imagination for things such as a British space bank, copying the British Business Bank or UK Infrastructure Bank, the funding that the British Government might offer could be leveraged several times. That would reinforce the message that the Government in the UK are not just grant funding but supporting space through innovative strategic partnerships.
Either way, uplifted long-term funding for the space sector to deliver priorities in the national space strategy, such as the space industrial plan; adopting a long-term approach to industrial strategy that includes a policy commitment to grow small and medium-sized enterprises; and an improved wider understanding of the space sector to encourage more people into science, technology, engineering and maths careers, would have an extraordinarily energising effect on this highly productive sector of our economy. That would certainly solve our current productivity conundrum.
There are further ways the Government can help our growing space sector and the many SMEs that participate. SMEs not only act as suppliers to the big primes in programmes and projects, but have their own prime missions and services. That brings world-beating capability to the market. We need to consider how we can further boost the sector. For example, a British space bank might also be an equity investor as well as a debt funder, complementing the UK Space Agency’s grant funding. Government procurement can act as an anchor customer for demonstrator missions. Scaling up the space technology exploitation programme would help, for example, to boost rapid development and implementation of cross-Government space policy programmes, thereby boosting economic activity in the sector.
I want to finish with some thoughts on an area where we are leading the way, and which demonstrates how widespread the application of space technology can be: space-based solar power. I should declare that I serve as the chair of the advisory board of the Space Energy Initiative, a coalition of businesses, academia, Departments and specialists in this burgeoning area of solar energy from space. I also serve as a non-executive director of Space Solar, the UK’s leading company seeking to develop this actually not very new technology. I stress that those are non-financial interests; I give my time on a pro bono basis.
That is an example of how an emerging sector is growing fast right here in the UK. The Department for Energy Security and Net Zero sponsored and set up a three-day conference last week to study this area, at which I spoke on the last day. It was astonishing to be in a room with such an extraordinary collection of highly intelligent people, looking at something they all know is not just a probability but a reality that will provide dispatchable, baseload, cheap green energy at gigawatt scale within the next 15 years.
Although many doubters suggest that that is science fantasy, UK primes, the UK Space Agency, international primes, the European Space Agency, leading universities and the UK Government all know that this is a reality. Space-based solar power will happen, with or without UK involvement. We are fast approaching the time when we need to decide whether we are to be the driver of this innovative approach to net zero or just another passenger.
If we seize the opportunity, space-based solar power will provide cheap, clean energy faster and cheaper than nuclear. It will be an astonishing export asset for the UK, be it through licensing the technology to other nations or selling the power directly from the satellites. It will tackle other issues in the UK, such as grid equalisation. I repeat that the UK is leading in this field. It is leading because the Government have supported not just the ESA’s Solaris programme but UK research for UK businesses.
In the last few weeks, a huge success has been achieved in the field of energy beaming through 360° using phased array antennas—and it was done in Belfast. The Government have stepped up to the plate to make this happen, and have indicated possible further support through match funding.
However, it does not matter whether we are talking about space-based solar power, GPS where the technology not only finds the nearest pub but times financial transactions, internet services via OneWeb, or Earth observation that helps everyone from generals in Ukraine to farmers seeking yield improvement. A massive range of services comes from the UK space industry, and many of us do not even realise that they happen. We must therefore strive to make sure that our space entrepreneurs are a success, and that this British business success supports the whole of our economy and public finances. That means that we need Government support, because we do not want to find ourselves, as we have done in the past, inventing something brilliant but not exploiting it commercially. For example, Frank Whittle was a brilliant engineer who invented the jet engine, only to see, a few years later, an American pilot flying an American aeroplane over America, using British technology to break the sound barrier. We do not want to see that again.
We are really, really good at this stuff and the Government know we are. That is why we can never get enough support in this incredible industry. I am conscious that many other Members are keen to speak, but I am sure that the Minister has heard what I have said and I very much look forward to his speech later.
Mrs Sheryll Murray (in the Chair)
I remind Members that they need to bob if they wish to be called in the debate.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
It is a pleasure to serve with you in the Chair, Mrs Murray. I pay warm tribute to the hon. Member for Wyre Forest (Mark Garnier) for securing this debate and for the work he does in the sector. We have spoken about the strategic significance of the space industry for the United Kingdom as a whole. Everything he said in that respect was absolutely correct, but the words in his peroration—about ensuring that we maximise the opportunities that will come from the industry—were particularly pertinent. For my constituency, that goes beyond the high-level opportunities that the hon. Gentleman identified.
There are a number of specific local opportunities for Shetland, as we host on Unst—the most northerly of all the Shetland Islands—the Shetland spaceport at SaxaVord. We have seen that quite remarkable progression in recent times as a consequence of a lot of hard work by the Shetland spaceport, and I pay particular tribute to Frank Strang and his colleagues for getting it to this point. It is now licensed by the Civil Aviation Authority, and we were delighted that it got a commitment of £10 million from the Government in the Budget. Indeed, such is the nature of the achievement that the Shetland spaceport is now even getting some interest from the Scottish Government—something else that must be welcomed.
If you look at the right map, Mrs Murray—by which I mean a map that has Shetland on it, and not just parked somewhere in the Moray Firth in a box—you will see that Shetland, and Unst in particular, sits at the highest latitude point in the United Kingdom, and indeed one of the highest in Europe. That, in turn, allows for a greater payload to be launched for the same fuel efficiency, turning many of the disadvantages with which we have struggled for so long into advantages. Because of where we are, there are natural opportunities for security and safety that would not necessarily be found closer to other larger centres of population.
Christine Jardine
I was privileged to visit my right hon. Friend’s constituency last month to see the SaxaVord spaceport and the work being done there. Does he agree that a lot of that work reflects the ingenuity and effort that went into developing the oil and gas industry in Shetland, and which is now being used in a similar way to develop SaxaVord, and that that has already been recognised by the space industry elsewhere in the world?
Mr Carmichael
I am delighted that my hon. Friend understands that it was a privilege to visit Shetland. She is absolutely right about that. What I am coming on to say fits well with that, because there are lessons for Shetland to learn from its engagement with the space industry and from how we have successfully engaged with the North sea oil and gas industry for the past 40-odd years.
The history of Saxa Vord, even in my time, has not always been a happy one. Back in the day, it was an RAF radar station waiting for the Russian bear in the cold war to come screaming over the polar ice cap. With the end of the Soviet Union and the fall of the Berlin wall, it was felt that that sort of presence was not necessary. That may have been somewhat premature. I remember, as a Member of Parliament, when the RAF announced its drawdown from Saxa Vord in 2005. I remember going to a meeting of the local community in the Baltasound Hall and the feeling of absolute desolation at that point, because RAF Saxa Vord had become such a massive part of the local economy of Unst. That was to go virtually overnight, and it was a struggle to find something to replace it. We welcome the coming of the space industry to Shetland, but we welcome it on our own terms and—as we did with the offshore oil and gas industry—we want to maximise for ourselves the opportunities that it can bring to our communities.
Some of this is already starting to emerge. SaxaVord spaceport has a science, technology, engineering and maths initiative that already has collaborative research and development projects under way with academic institutions, including the University of Alaska, the University of Strathclyde and the University of Edinburgh—I suspect that Edinburgh probably has the least welcoming environment, in terms of temperature, of those three.
SaxaVord also has an outreach programme for local Shetland schools and colleges, generating future technical skills in the area and ensuring a sustainable spaceflight ecosystem in Shetland and the wider United Kingdom. For us as a community, keeping young people in our community or giving them opportunities to come back when they have been away and had their education is critical. We see this as an opportunity.
It has to be said, though, that the coming of a spaceport to Unst will be transformative for the community. One project that the community is keen to proceed with—and which is deserving of some support from the Scottish Government and the United Kingdom Government—would be to replace our inter-island ferries with fixed-links tunnels going from mainland Shetland to Yell, and Yell to Unst. It is a case that stands well in its own right. It is not an easy thing. To see the opportunities that come from the construction of tunnels, look no further than to our neighbours to the north-west, in Faroe Islands. That is the sort of thing that should be Shetland’s price for playing host to the space industry. That is the sort of opportunity that we as a community should be entitled to exploit and to expect co-operation on, and support from, Government and elsewhere.
We are putting a lot of ourselves into this industry. This industry has great significance strategically for the United Kingdom, as well as economically and militarily, and in just about every other way imaginable. When the Minister replies, I hope he will acknowledge the significance of the contribution that Shetland stands to make to the rest of the United Kingdom, and that there is an understanding that, if we are to step up to the plate for the benefit of the rest of the United Kingdom, then the rest of the United Kingdom should acknowledge that responsibility.
Steve Double (St Austell and Newquay) (Con)
It is a pleasure to speak in this debate, Mrs Murray, and I congratulate my hon. Friend the Member for Wyre Forest (Mark Garnier) on securing it.
Something exciting has been happening in the space industry in Cornwall in recent years. We have seen the revival of the world-leading Goonhilly satellite tracking station, and I am incredibly proud to have Spaceport Cornwall, based at Newquay airport, in my constituency. It is something that I started championing before I became a Member of Parliament, way back in 2014, when the original call for sites for a spaceport went out. I worked very hard with Cornwall Council, the airport, the Government and the UK Space Agency to get the licence for the spaceport, and I was absolutely delighted that in January 2023 we had our first launch—well, almost. Frustratingly and sadly, due to a faulty $100 fuel filter, the final stage of the rocket burn failed, so the satellites did not reach their intended orbit.
However, that should not detract from the fact that, for Spaceport Cornwall, we played our part perfectly. Everything went well at the spaceport itself. Spaceport Cornwall remains the only licensed spaceport in Europe, and we are ready to launch again.
Also, there continues to be great interest in the facilities that we have, especially the satellite integration clean room—a world-class facility, and there are not many around the world—and our space systems operations facility, which is a dedicated office block on the spaceport site that continues to receive expressions of interest from people who want to locate there. Last month, Slingshot Aerospace announced that it will expand into the UK, with new offices in London and Cornwall, and just this month Space Ai, the Argentinian blockchain innovators, announced that it will set up new offices at the spaceport in Cornwall.
We continue to attract interest from around the world, and there is still a great deal of interest from launch operators who want to launch from Cornwall. There are advanced discussions going on with a number of potential partners that could see us launch satellites from Cornwall once again in the coming months.
In my view, the UK will struggle to fulfil its space sector ambitions without launch capabilities, and although it feels like all the attention is now on Scotland and the vertical launch site there, as the right hon. Member for Orkney and Shetland (Mr Carmichael) highlighted, it is important not to forget that in Cornwall we have a UK launch site that is licensed and ready to launch.
Mr Carmichael
The hon. Gentleman is making an important point. Inevitably in a competitive process, that kind of rivalry can emerge, but the real rivalry is between the UK space industry and the space industry elsewhere in Europe and the world. There must surely be a role for horizontal launch in Cornwall and for vertical launch in Shetland, and also at the Sutherland space site.
Steve Double
I am very grateful to the right hon. Gentleman, who makes the point that I was literally about to make—it is amazing how often that happens in debates. I am convinced that there is room for both. If the UK is really going to play the role that it aims to play, of being a world-leader in the space industry, we need both capabilities in the UK—vertical launch and horizontal launch. I am convinced that horizontal launch will very much be part of the future of space launch. As satellites become smaller, a horizontal launch will be the sustainable and more accessible option for many operators who want to put satellites into space.
Will the Minister ensure that his Department and the UK Space Agency do all they can to continue to support Spaceport Cornwall, and also work with us so that we can secure the partners to enable us to launch satellites from Cornwall once again in the months and years to come? The UK has an absolutely huge opportunity to stay ahead of the rest of Europe. As the right hon. Member for Orkney and Shetland pointed out, we are in a good position in the global space race to ensure that the UK can take advantage of that opportunity.
Spaceport Cornwall is a huge opportunity economically for the UK, and specifically for Cornwall, to attract investment and create the highly skilled and well-paid jobs that we desperately need in the Cornish economy. But for me, this has always been about something more than that. It has been about inspiring young Cornish people to believe that they can go and get the qualifications in science, technology, engineering and maths, and then have a career in the space industry while still living in Cornwall. That is what has driven me throughout this whole process.
With the establishment of the spaceport and the work that the team have done to engage with schools and colleges, we have already seen literally thousands of schoolchildren from the south-west come to see what is going on there and be inspired. That is so important, because one of the challenges we face with our young people in Cornwall is a lack of aspiration. There is no replacement for something on their doorstep that inspires them to say, “Yes, I can go on, get the qualifications and get a good career in this sector.” To that end, we were delighted that Cornwall secured the replica LauncherOne rocket, as a visible and tangible display: the centrepiece of an education centre that will inspire our young people and stimulate their interest in the space industry for generations to come.
There has been a bit of misunderstanding, in that the UK Space Agency seems to think that we are looking to build a tourist centre. We are not. It is an education centre, which will attract visitors and, in particular, inspire young people. Can the Minister look at what support his Department and the UK Space Agency can provide to Cornwall, so that we can create a world-class education centre? It will play a part in inspiring the next generation of scientists and engineers, not just in Cornwall and the south-west but across the whole country. We will need them in the UK if we are going to fulfil our ambition to continue to be a world leader in space.
These are exciting times. Just as Cornwall has always pioneered and led the way in new technology, whether that was the steam engine or Marconi and wireless communication, we again want to play our part in leading the UK into space launch.
Mrs Sheryll Murray (in the Chair)
I remind the SNP spokesperson and the shadow Minister that they have five minutes and the Minister has 10 minutes, because this is an hour-long debate. I call Carol Monaghan.
Carol Monaghan (Glasgow North West) (SNP)
It is a pleasure to serve under your chairmanship, Mrs Murray; it is fitting that you are in the Chair today, because you have been such a champion for Spaceport Cornwall —I hope that that might get me an extra minute or two—alongside the hon. Member for St Austell and Newquay (Steve Double). I want to correct him slightly. He talked about the failure of the launch, but the launch was actually successful; the failure came after. We have to take the positives from that, because this will be a learning process.
As a former teacher, I know that there are two things that get children really excited: dinosaurs and space. If we could get dinosaurs on space rockets, we would have everything sorted! The space sector is important for technology development, Earth observation and, increasingly, security and defence. Scotland plays a key role in that. We have already heard from the hon. Member for Wyre Forest (Mark Garnier), whom I congratulate on securing this important debate, about the importance of Glasgow in satellite manufacturing, with companies like Clyde Space and Alba Orbital. We also have space data analysis in both Glasgow and Edinburgh, as we have heard from the hon. Member for Edinburgh West (Christine Jardine).
What we are not so good at—and this is not just in Scotland but across the UK—is selling ourselves: telling people what we are doing in the industry. In Glasgow, Edinburgh and other places where there are space sectors, why do we not have big signs with rockets and propulsion units? That would tell young people that the space sector is here, alive and vibrant, and that there are jobs to be had in it. The Government could play a role in that.
We have heard about the five potential spaceports in Scotland. The right hon. Member for Orkney and Shetland (Mr Carmichael) talked about SaxaVord in Shetland, and we are looking forward to seeing the first vertical launch from that spaceport. We also have North Uist, A’Mhoine in Sutherland—the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) mentioned that—Machrihanish in Argyll, and of course Prestwick.
Scotland has great ambition in the sector. There is ability in our universities, so it is not a surprise or a coincidence that so many space companies have set up in Scotland. The ambitions are to capture a £4 billion market share of the sector by 2030 and an increase in employment in the space sector to 20,000. Those are ambitious targets, but they are achievable. To reach its full potential, the industry needs proper Government support. We have rejoined Horizon Europe, which is useful but there have been years outside Horizon Europe, and space talent now have to pay visa and NHS fees to come here, which is problematic.
Four years ago, the Government bought a £400 million stake in the satellite company OneWeb. On talking to the then Science and Technology Committee in 2021, Chris McLaughlin from OneWeb told the Committee that by 2024-25 we would be building satellites in the UK. We have not seen that yet, so I ask the Minister: we have heard about lots of companies doing great work, but how many jobs has OneWeb created in the UK for our £400 million stake? What steps have the Government taken to ensure that OneWeb’s second generation satellites will be built here in the UK? How are the Government raising awareness of the opportunities in the space sector, and what representations has the Minister made about reducing visa and NHS fees for those working in it?
There are real opportunities here. It is right that we inspire the next generation. To do so, we need physics teachers being paid proper wages. Without paying them proper wages, they will take their skills and work elsewhere. We need them here.
Scotland was famously at the heart of the first industrial revolution. As we enter a new era of industrial revolution, Scotland will once again play a key role in creating and developing new technologies in the space sector. I look forward to seeing more launches across the UK. I agree with the comments made today: there is room for horizontal and vertical. The more spaceports we have, the more we become a focus for the space industry across the world. I am sorry for the time I have taken, Mrs Murray—your tribute at the start took me extra seconds.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
It is a pleasure to serve under your chairship, Mrs Murray, and to follow the hon. Member for Glasgow North West (Carol Monaghan). I congratulate the hon. Member for Wyre Forest (Mark Garnier) on securing the debate; as a member of the all-party parliamentary group for space, I can bear witness to what an excellent chair he is and what a great champion he is for the industry.
We all know that space is not just for the stars. Members from constituencies in Scotland, Northern Ireland and England have all emphasised—I am sure Members from Wales would, too—the potential and actual contribution that it makes to their economies. The right hon. Member for Orkney and Shetland (Mr Carmichael) and the hon. Member for St Austell and Newquay (Steve Double) particularly emphasised that point. The space industry impacts everybody and everything, from climate change monitoring and rural broadband to transport and agriculture. It is vital for security—just look at Ukraine—and for telecommunications.
In 2021 I spoke in a debate on space debris, which has been mentioned. That creates challenges and opportunities that literally go over most people’s heads. Labour’s first mission in Government is to secure the highest sustained growth in the G7, and space provides key opportunities for growth. Our aerospace research and development is a long-term endeavour, and our industrial strength is the result of decades of support by successive Governments—and Labour would build on that legacy.
Although there remain challenges to overcome, our regulators must be responsive to innovation in the space sector, from in-orbit manufacturing, as we have heard about, to space-based renewables. Labour’s regulatory innovation office would rewire regulators to support innovation, including the space sector. The office would set and monitor targets for approvals, benchmarked internationally, and give regulators steers from Labour’s industrial strategy, which would help ensure that space was seen as an industry and not as a project, as the hon. Member for Wyre Forest suggested. We would also support the Regulatory Horizons Council, with deadlines for the Government to respond to its work. On that subject, when the RHC reports on space, will the Minister commit now to a timeframe for the response from the Department for Science, Innovation and Technology? Will he also set out what specifically the Government are doing to support pro-innovation regulation for space?
As well as proper regulation, the industry needs greater stability from this Government, which has been in somewhat short supply, and not just at the macro level. We have seen the National Space Council that was set up by one Prime Minister cancelled by the next, and then reinstated by the one after that. We left the Galileo Project, and the U-turn on the rival system cost a further £60 million. The Science, Innovation and Technology Committee has also expressed concerns over the lack of coherence in the space strategy, and we heard about the ambiguity and the harmful speculation over the OneWeb deal after the Eutelsat merger, and the impact that has had.
The space industrial plan was three months late, and it is unclear how the Government see space relating to the key technologies in the science and technology framework, so could the Minister speak specifically to that point? I obviously welcome the Minister to his place, but he is the eighth Science Minister in five years. Does he concede that uncertainty is bad for business and bad for space? Labour’s industrial strategy, with our statutory industrial strategy council, will provide the stability and partnership that the industry needs, and enhance our sovereign capabilities, building on the work of the Satellite Applications Catapult and the UK Space Agency.
My final point is on skills, which Members have mentioned. The space industry is so important and it inspires the next generation of engineers. One of the reasons that I went into engineering was because I wanted to design spaceships. I never got to—not yet, but maybe that is still to come. Labour is proposing a national body that would be called Skills England, to provide leadership and bring together Government, businesses, training providers and unions to drive local skills needs. Expanding opportunities in this industry should create good jobs for people of all backgrounds. In February I visited Space Park Leicester, where the university, local government and industry work together to make space more accessible to all. Labour is pledging an action plan for diversity in STEM. I hope the Minister will support that, and I hope that we can see space as an opportunity for all.
The Minister for Science, Research and Innovation (Andrew Griffith)
It is a delight to be here under your chairmanship, Mrs Murray. I congratulate my hon. Friend the Member for Wyre Forest (Mark Garnier) on initiating this well-attended debate about the all-important UK space industry, as well as on his commitment to and leadership of the all-party parliamentary group. I am myself a former member, and I know how hard-working and formidable his connections are in this domain, together with my hon. Friend the Member for Morecambe and Lunesdale (David Morris).
This is a tremendous week for UK space, and I hope all Members will join me in congratulating astronaut Rosemary Coogan on achieving her space wings and graduating from astronaut school on Monday, together with two other British astronauts, John McFall and Meganne Christian. We hope they all have the opportunity in the coming years to leave this orbit behind and fly into space.
It has been enlightening to hear all the important points that hon. Members have raised in today’s debate, including on the way in which space and its attendant industries touch every single part of the United Kingdom. Today’s debate encapsulates the importance of the subject, from Spaceport Cornwall all the way to the opposite tip of these isles in Shetland and Orkney. There could not be any better examples than that.
Space is important to everybody and is an important economic activity. That is why the Government have a clear set of plans, which I can assure everyone that we are delivering upon daily. In 2021, we published the UK’s first ever cross-Government national space strategy. We are now spending approximately £650 million a year on space, which is an uplift of more than 70% on the amount we spent as a nation in 2018-19. I should be clear that this does not include all the space-related investment and spend on projects via Copernicus, UKRI and the Ministry of Defence.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
As the Minister knows, work continues apace at the Sutherland spaceport. It is interesting to note the recent announcement about the amount of investment that Orbex has attracted. Part of this is private money; when the markets speak, we listen. Returning to the remarks made by the hon. Member for Newcastle upon Tyne Central (Chi Onwurah), it is about skills. The big challenge for us is how we will get the seedcorn we need to develop these homegrown skills. I suggest to the Minister that the Government should showcase proudly everything they are doing on this front, by holding space industry fairs—
Mrs Sheryll Murray (in the Chair)
Order. If this is supposed to be an intervention, it must be short.
Jamie Stone
Could I recommend that consideration is given to this in various parts, such as Caithness in my constituency?
Andrew Griffith
The hon. Gentleman is absolutely right to champion the spaceport in his constituency and to mention the importance of what is called private space, where companies such as Orbex are pioneering new ways of reaching for the stars. A number of hon. Members have also pointed out the significance of space in making an economic contribution and inspiring future generations. I will take away the hon. Gentleman’s wonderful suggestion of a space youth fair—let us see what we can do together with the UK Space Agency. My hon. Friend the Member for St Austell and Newquay (Steve Double) made exactly the same point about Spaceport Cornwall.
It is often pointed out that the United Kingdom could be more joined up in its space endeavours. The space council, in whichever iteration, brings together other Departments in orbit with the Ministry of Defence so that we can continue to punch above our weight. We have recently opened a joint space command centre for both civilian and military space.
My hon. Friend the Member for St Austell and Newquay mentioned his hard work before Spaceport Cornwall was even established, which is huge testimony to the work he does for his constituents across north Cornwall. He also mentioned Goonhilly and the very significant space cluster that exists in Cornwall. The Government remain extremely supportive of Spaceport Cornwall and all its endeavours, and the point is very well made about the launch capability of the United Kingdom, which I talk about to both the UK Space Agency and the Ministry of Defence in these uncertain times.
Moving to the other end of these isles, the right hon. Member for Orkney and Shetland (Mr Carmichael) talked about Shetland’s spaceport. It does indeed have formidable natural advantages, and so inspired by the opportunity, the Government resolve to do everything they can. That is why my right hon. Friend the Chancellor so significantly put an investment into SaxaVord, subject to reaching acceptable terms. In this very important week for defence spending, I offer this small vignette: the Labour party cut defence and closed RAF Saxa Vord, while this Conservative Government are investing in the future of Shetland. I hope that does not provoke an intervention from the hon. Member for Newcastle upon Tyne Central (Chi Onwurah). [Interruption.] It is a fact. Facts sometimes can be provocative, but they are nevertheless facts.
We are bringing together many UK assets in space in the Harwell science and innovation campus space cluster. While it is also a significant contribution to levelling up, we have published not just the space industrial plan but plans for space clusters and space investment funds. I believe that the hon. Member for Newcastle upon Tyne Central and myself will both be speaking at the North West Space Cluster in June, which will give us both an opportunity to commit to the future of space in that important region of the United Kingdom. As my hon. Friend the Member for Wyre Forest raised a point about Adam Smith, space is at the heart of the comparative advantage and the productivity of this nation.
It is a busy world in space. It is going to be a banner year. We hope to see space launches from European soil from the first time. Just this week, the UK Space Agency announced an £8 million investment in the UK innovation & science seed fund. When my hon. Friend the Member for Wyre Forest opened the debate, he talked about the importance of getting capital to flow and of the connection with the City of London and finance. I hope that £8 million at the earliest stage—the seed and even the pre-seed stage—of the lifecycle could make a real contribution to growing the space supply chain and skills.
We will be responding to the Regulatory Horizons Council report on space well within the allotted timeframe. Before we break for the summer we will be publishing the space workforce skills plan, which the hon. Member for Newcastle upon Tyne Central raised. That is something very close to my heart and, I suspect, to the hearts of other Members. The hon. Member for Strangford (Jim Shannon) has left the Chamber, but Northern Ireland, as with all the regions, is an important part of the space sector. Its legacy and history in aerospace engineering is something that I firmly hope we can continue to bring to bear.
Time is running out and there is so much more we could talk about. We are off to the European Space Agency, and our commitment to that body remains as strong as ever.
Carol Monaghan
The Minister has not mentioned visa fees for space experts coming here, nor has he mentioned OneWeb.
Andrew Griffith
I would be delighted if the hon. Lady wanted to apply for another debate. I can see that there is a significant appetite to discuss some of these issues. The Government are very committed to maximising the economic and strategic advantage of OneWeb. It is a company that is based here. I have visited it just down the road in Shepherd’s Bush—I think it is still called Shepherd’s Bush. The new White City campus is where thousands of satellites, licensed and regulated out of the UK, are being flown as we speak and delivering all sorts of contributions to society. I am very supportive of the hon. Lady’s contribution to science, so I would love to engage further when we have more time. Mrs Murray is looking at me to say, “Hurry up.”
We will continue to work across this House through organisations such as the all-party parliamentary group, with industry, with the supply chain, and with our partners internationally, both through multilateral forums such as the European Space Agency and bilaterally. We will do all that with the objective of ensuring that the United Kingdom remains a strong spacefaring nation, and that the citizens of this country benefit from the prosperity and the inspiration that comes with space.
Mark Garnier
Thank you for overseeing this debate, Mrs Murray. It has been very enlightening, and I am conscious that Scotland is very well represented here. The space industry is fantastic, and I am grateful to the Minister for raising the points he did.
Launch is an interesting area: it is about logistics, but it is the inspirational path that people will look at. When we see rockets launching into space from the United Kingdom, that will be the point when everybody will get incredibly excited. I am grateful that we are doing extraordinarily well on space licensing here with the Civil Aviation Authority.
We have a fantastic opportunity in the space sector. I am an evangelist for the whole sector, and I think it is wonderful. I am grateful to the Minister for giving a commitment on the amount of money that will be invested into the UK space sector. That is absolutely crucial. Space is very difficult; it is very tricky. Getting things working in space requires a lot of investment in getting it up there. Commitment from the UK Government is exactly what we need to de-risk it and generate more private capital coming into the sector. Ultimately, we want it to be sponsored and funded entirely privately, unless the UK Government are a customer. We can get there, but the sector needs help to get that far.
I am conscious that we are about to have a bell for a vote any second now. Thank you very much, Mrs Murray.
Question put and agreed to.
Resolved,
That this House has considered the UK space industry.
Written Statements
Light Dues 2024-25
(7 months ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Transport (Guy Opperman)
My noble Friend, the Parliamentary Under Secretary of State for Transport (Lord Davies of Gower) has made the following ministerial statement:
A strong and growing maritime industry is vital to the economy of the United Kingdom.
The work of the general lighthouse authorities, which provide and maintain marine aids to navigation and respond to new wrecks and navigation dangers in some of the busiest waters in the world, is crucial to maintaining our vigorous safety record and continuously improving safety standards.
Light dues for 2024-25 will not be changed but we will look to increase the maximum charge of the tonnage cap from 1 April 2025 to 50,000 tonnes.
The freeze in light dues for 2024-25 will provide industry with much needed clarity for planning at a time of uncertainty in shipping across the globe. The tonnage cap has remained unchanged since 2010, but the number of very larger vessels has changed considerably. Increasing the cap would provide an uplift to revenues that will enable the essential replacement of GLA vessels and potentially avoid increasing light dues over the coming years.
Light dues will continue to be reviewed on an annual basis to ensure that the general lighthouse authorities are challenged to provide an effective and efficient service which offers value for money to light dues payers.
[HCWS425]
Marine Counter-terrorism: Contingent Liability
(7 months ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for the Home Department (James Cleverly)
I am today laying before the House of Commons a departmental minute on the use of contingent liability by the Home Office to support the delivery of maritime counter terrorism response capabilities by our emergency service partners.
In enabling delivery of these capabilities, this Government have undertaken analysis on the insurance implications. It concluded that HMG indemnity is the most practical solution to ensuring full insurance coverage is in place. While the likelihood of a scenario occurring requiring use of the contingent liability is remote, it will provide operational delivery partners with additional assurance regarding any realised financial liabilities for any claims arising from the response to a maritime terrorist attack, in the event of market failure.
HM Treasury has approved this proposal in principle. In the unlikely event the liability was to manifest, further evidence would be provided and provision for any payment due under the liability will continue to be sought through the normal supply procedure.
A full departmental minute has been laid before the House of Commons providing more detail on this contingent liability.
[HCWS426]
Grand Committee
Arrangement of Business
The Deputy Chairman of Committees (Viscount Stansgate) (Lab)
My Lords, if there is a Division in the Chamber while we are sitting—let us face it, that is extremely unlikely—the Committee will adjourn as soon as the Division Bells ring and resume after 10 minutes.
Data Protection and Digital Information Bill
Wednesday 24th April 2024
(7 months ago)
Grand CommitteeRead Full debate Data Protection and Digital Information Bill 2022-23 View all Data Protection and Digital Information Bill 2022-23 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 30-VII Seventh marshalled list for Grand Committee - (23 Apr 2024)
Baroness Sherlock
Member’s explanatory statement
This amendment would make it a requirement for the Secretary of State to issue a code of practice in connection with the use of account information notices.
Baroness Sherlock (Lab)
My Lords, in moving Amendment 225, I will speak to the other amendments in this group. They cover two issues: first, the code of practice, which features in Part 2 of new Schedule 3B, inserted by the Bill into the Social Security Administration Act 1992. Paragraph 6(1) of new Schedule 3B says:
“The Secretary of State may issue a code of practice in connection with account information notices”.
Amendment 225 would change “may” to “must”. Paragraph 6(2) mentions some matters that a code “may” include and Amendment 226 would change that “may” to “must”.
Amendment 227 would ensure that a code of practice includes the criteria to be used by the Secretary of State in determining whether to issue account information notices—I will come back to criteria shortly. Amendment 230 would require the Government to consult on the draft code of conduct with consultees including the Social Security Advisory Committee and organisations that would have to comply with account information notices. Amendment 231 would require the code of practice and any revisions to it to be approved by both Houses of Parliament. The Secretary of State would still be able to withdraw a code of practice, but the ability to issue notices would lapse if no code were in force. Amendments 228, 229 and 232 are consequential.
The other matter covered in this group is how the Government report to Parliament on these notices. Amendment 233 amends new Schedule 3B to provide for annual reporting to Parliament on the use of account information notices. As well as requiring the provision of statistics around the use of such notices during the previous financial year, the amendment would compel the Secretary of State to outline his or her views on the proportionality and effectiveness of notices. I hope that the need for these amendments is self-evident. Ministers are proposing to take new powers of astonishing breadth, which will involve the ability to search the bank accounts of tens of millions of our citizens, most of whom will have done nothing wrong. There is still very little detail about how these powers could be, or will be, used.
I will address two particular sets of issues. The first is criteria. Paragraph 2 of new Schedule 3B explains that banks have to return information about matching accounts. As well as specifying the identity of the account holders, they have to meet certain risk criteria. The Bill, the Explanatory Memorandum and briefings always talk in terms of examples of those criteria, usually around capital limits or time abroad. But my understanding, which may be wrong—I invite the Minister to correct me if I am—is that the criteria could be anything related to eligibility for the benefits in question.
For example, the eligibility for some benefits includes being a single parent. Paragraph 2(2)(a) of new Schedule 3B says that an account information notice
“may require information relating to a person who holds a matching account even if the person does not claim a relevant benefit”.
On our last day in Committee, we established that that directly related to appointees, but that made me wonder whether it could apply to anybody else. For example, we also established that a notice could cover a joint account where one of the holders is the person to whom the benefit is paid and the other is not. Would this power allow DWP to ask banks to search for any accounts linked to any single parent and to examine those accounts for evidence that they and the other holder of a joint account might be living together? Would these powers allow DWP to devise any criteria designed to identify whether a claimant was living with another adult? To be clear, I am not asking whether it intends to do that or whether it knows how to do that. I am just asking whether it would be permissible. Is this a category of thing that it could do under the powers in the Bill?
Related to that, could DWP issue notices to a bank other than that into which the benefit is paid? Again, we have heard that the intention is to go only to the bank into which the benefit is paid, but I want to know specifically: does this Bill gives DWP the power to do that or would it need additional primary legislation to do it?
Secondly, the Bill does not say that notices can be given only to banks. It says that they can be given only to a “person of prescribed description”. The Information Commissioner said:
“I have been unable to identify where such persons are prescribed and the provision itself is silent on the matter”.
It is therefore unclear which organisations will be in scope of the power or how this will be determined. Can the Minister tell us any more about who will be covered and how that will be determined? Who could be subject to a notice? A bank or a building society could be, clearly, but could a credit union, a Christmas club savings scheme or any other financial body?
Paragraph 58 of the impact assessment on this part of the Bill says:
“This measure is drafted broadly to ensure it is future-proofed against future changes and innovation, particularly in the financial services sector, i.e. in Fintech and Crypto, and enable DWP to apply this measure to non-financial organisations in future if it is deemed appropriate and proportionate”.
Can the Minister give the Committee an example of a non-financial organisation that could be appropriate? Specifically, could this apply to, for example, phone companies? Given the open-ended nature of the powers being taken, one way for Ministers to give reassurance to both the Committee and the wider public would be to ensure that DWP is constrained by a clear and transparent code of practice over which Parliament has oversight and that it reports to Parliament on the way it is using these powers. If the Minister does not like the approach in this amendment, perhaps he could offer the Committee other forms of assurance in this area. I beg to move.
Lord Anderson of Ipswich (CB)
My Lords, I apologise to the Committee that duties elsewhere in the House prevented me from attending the last two debates on Monday and so from speaking to the amendments that I had tabled and signed. However, I have read the Official Report with care.
I cannot pretend to be a data protection nerd, or even a social security nerd, like some speakers in those debates, but I hope that I pass muster as a surveillance nerd, having written for the Home Secretary two of the reports that informed the Investigatory Powers Act 2016 and, more recently, a report that informed the Investigatory Powers (Amendment) Bill, which I see is to be given Royal Assent tomorrow.
I support all the amendments in the name of the noble Baroness, Lady Sherlock, in this group. Of course there must be a code of practice. Of course it must be consulted on and scrutinised. I would add that that of course we could not contemplate passing this schedule into law until we have seen and studied it. An annual report of the sort that accompanies the reasonable suspicion power to issue financial institution notices, exercised by HMRC under Schedule 36 to the Finance Act 2008, would also be useful. For example, it is from the last of those reports, dated January 2024, that I learned that these reasonable suspicion tax information powers were now being used to obtain location data—something that it had previously been said would not be done.
Dan Squires, one of the authors of the legal opinion that I know was referred to on Monday, is not only a King’s Counsel but a deputy High Court judge and a genuine expert in this area. He and his junior, Aidan Wills, point in that opinion to the personal nature of some of the data that could be harvested under the proposed power and advise that Schedule 11 does not come close to the safeguards required for compliance with Article 8. They refer in particular to the striking lack of clarity about the grounds on which and the circumstances in which the proposed power can be used, as well as to the absence of both independent authorisation and independent oversight. They point out that, although saving up to £600 million over five years is a very important objective, it weighs no more heavily—indeed, probably less heavily—than the normal justifications for obtaining information in bulk: protecting national security and the prevention and detection of serious crime. Their opinion is well referenced, persuasive and consistent with the view on proportionality expressed by both the Information Commissioner and the Constitution Committee, on which I sit.
On Monday, the Minister referred to the power in Schedule 23 to the Finance Act 2011 to obtain certain data items from particular classes of data holder—for example, employers and land agents. So I had a look at that schedule and the data-gathering regulations under its paragraph 1. The power would appear to apply only to certain tightly defined items, such as payments made by the employer or arising from use of land. There would appear to be a noticeable contrast with location data, personal spending habits and so on, which fall within the scope of the powers in this schedule, as they are written in the Bill. Both HMRC and the Home Office operate under powers tightly defined in legislation. Assurances that those powers will be used in a restrained way, as Justice has commented in its useful briefing on the Bill, simply do not cut it. I am afraid that the law requires the DWP to be subject to the same constraints.
I am concerned: concerned that this important new power was not subject to detailed consultation or even to scrutiny by a Commons Bill Committee, where useful evidence could have been heard; concerned that it could even have been contemplated that so vague a power might be in the Bill and not accompanied by a code of practice; concerned about the absence of an independent approval and oversight mechanism, equivalent to the Office for Communications Data Authorisations and the Investigatory Powers Commissioner’s Office; and concerned that, if we do not get this potentially valuable power right from the start, it will immediately be subject to legal challenges, which will swiftly render it unusable.
If, as I believe, Schedule 11 is currently unfit for purpose, is there time to rescue it? I have a couple of practical suggestions. First, I saw the investigatory powers unit from the Home Office when it happened to be in the House yesterday, and I wondered if there might be utility in it comparing notes with the Bill team about these types of powers and their attendant safeguards.
Secondly, I hope the Government appreciate the significance—at least to us nerds in the Committee—of the legal analysis of Dan Squires KC and Aidan Wills. If we are to be told that it is mistaken, which would certainly be unusual, I for one would like to see that backed up by an opinion from a lawyer of equivalent stature, whether at the GLD or independent counsel, explaining precisely and persuasively why Mr Squires and Mr Wills are wrong. Otherwise, and without significant change of the type identified in the opinion, I am afraid I am not inclined to give this schedule the benefit of the doubt.
I signed up to the stand part notice of the noble Baroness, Lady Kidron, thinking it would at least be a platform to think about what amendments to the schedule might be needed. The more I read the schedule and the more I hear about it, the more I am driven to the conclusion that, if we do not see substantial change, opposing the schedule may be the way that we have to go at the next stage.
Lord Davies of Brixton (Lab)
In the two previous groups, I raised pension credit, and it is notable that the noble Viscount the Minister has not responded on that point. As such, my automatic assumption is that he believes that the implementation of these powers will deter people from seeking pension credit, which is contrary to the Government’s declared policy to encourage people. I mention that in passing, given this opportunity.
My other moan is about the impact assessment; there is none. I do not like the impact assessment that we have. It is a totally impenetrable and meaningless document, which is clearly there just as a matter of form rather than as a serious attempt to try to inform participants in these debates about what is in the Bill and what impact it will have on people and organisations.
My specific points are broadly in line with the points raised by UK Finance, the overall organisation for financial organisations, including banks and insurance companies, which continues to have serious concerns about these provisions. I think we should listen carefully to what it says. In particular, if we are going to have these powers then, in line with the amendments tabled by my noble friend Lady Sherlock, we have to make sure that they are introduced in an effective way that appreciates the vulnerabilities of customers.
Lord Clement-Jones (LD)
My Lords, it has been a privilege to be at the ringside during these three groups. I think the noble Baroness, Lady Sherlock, is well ahead on points and that, when we last left the Minister, he was on the ropes, so I hope that to avoid the knock- out he comes up with some pretty good responses today, especially as we have been lucky enough to have the pleasure of reading Hansard between the second and third groups. I think the best phrase that noble Baroness had was the “astonishing breadth” of Clause 128 and Schedule 11 that we explored with horror last time. I very much support what she says.
The current provisions seem to make the code non-mandatory, yet we discovered they are without “reasonable suspicion”, the words that are in the national security legislation—fancy having the Home Office as our model in these circumstances. Does that not put the DWP to shame? If we have to base best practice on the Home Office, we are in deep trouble.
That aside, we talked about “filtering” and “signals” last time. The Minister used that phrase twice, I think, and we discovered about “test and learn”. Will all that be included in the code?
All this points to the fragility and breadth of this schedule. It has been dreamt up in an extraordinarily expansive way without considering all the points that the noble Lord, Lord Anderson, has mentioned, including the KC’s opinion, all of which point to the fact that this schedule is going to infringe Article 8 of the European Convention on Human Rights. I hope the Minister comes up with some pretty good arguments.
My final question relates to the impact assessment–or non-impact assessment. The Minister talked about the estimate of DWP fraud, which is £6.4 billion. What does the DWP estimate it will be after these powers are implemented, if they are ever implemented? Should we not have an idea of the DWP’s ambitions in this respect?
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)
My Lords, this has been a somewhat shorter debate than we have been used to, bearing in mind Monday’s experience. As with the first two groups debated then, many contributions have been made today and I will of course aim to answer as many questions as I can. I should say that, on this group, the Committee is primarily focusing on the amendments brought forward by the noble Baroness, Lady Sherlock, and I will certainly do my very best to answer her questions.
From the debate that we have had on this measure, I believe that there is agreement in the Committee that we must do more to clamp down on benefit fraud. That is surely something on which we can agree. In 2022-23, £8.3 billion was overpaid due to fraud and error in the benefit system. We must tackle fraud and error and ensure that benefits are paid to those genuinely entitled to the help. These powers are key to ensuring that we can do this.
I will start by answering a question raised by the noble Lord, Lord Anderson—I welcome him to the Committee for the first time today. He described himself as a “surveillance nerd”, but perhaps I can entreat him to rename himself a “data-gathering nerd”. As I said on Monday, this is not a surveillance power and suggesting that it is simply causes unnecessary worry. This is a power that enables better data gathering; it is not a surveillance or investigation power.
The third-party data measure does not allow the DWP to see how claimants spend their money, nor does it give the DWP access to millions of people’s bank accounts, as has been inaccurately presented. When the DWP examines the data that it receives from third parties, this data may suggest that there is fraud or error and require a further review. This will be done through our normal, regular, business-as-usual processes to determine whether incorrect payments are indeed being made. This approach is not new. As alluded to in this debate, through the Finance Act 2011, Parliament has already determined that this type of power is proportionate and appropriate, as HMRC already owns similar powers regarding banking institutions and third parties in relation to all taxpayers.
I listened very carefully to the noble Lord and will, however, take back his points and refer again to our own legal team. I think the point was made about the legality of all this. It is a very important point that he has made with all his experience, and I will take it back and reflect on it.
Lord Anderson of Ipswich (CB)
I take the Minister’s point and I will settle for the appellation “investigatory powers nerd”; I am quite happy with that. Does the Minister agree with me, however, that the legal difficulty —we see this with the other bulk powers already in our law—is that Article 8 of the European convention locks in not when a human eye gets stuck into the detail, but as soon as a machine harvests the data in bulk? Most of that data relates to people in respect of whom there could be no possible suspicion. Satisfying the requirements of necessity and proportionality must be done even at that stage. I understand that that is awkward and I am sure a lot of people would prefer that it was otherwise, but that is, as I understand it, the law. That renders the distinction that the Minister seeks to draw between data gathering and surveillance perhaps slightly difficult to maintain.
Viscount Younger of Leckie (Con)
If I may just answer that question from the noble Lord, Lord Anderson; I think it is important to take one question at a time.
I have every sympathy with what the noble Lord has said. As I mentioned on Monday, points could easily raised about that—I think it may have been the noble Baroness, Lady Kidron, who raised points about computers and their robustness. This is the very point that we agree with. It is incredibly important and we have started already to draw up a proper code of practice to work with the banks on how this will actually work. We need continued time to work these issues through. I also made the point on Monday that, at the end of the day, a human being will be there—must be there—to determine where we go from there.
Lord Anderson of Ipswich (CB)
In relation to the code of practice, which I am glad the Minister mentioned, we have just seen the Investigatory Powers (Amendment) Bill through this place. It makes some relatively minor changes to the powers of the intelligence agencies to harvest data in bulk and, to ensure the orderly passage of that Bill through both Houses of Parliament, the key excerpts of the draft code of practice were made available before Committee in either House to enable it to be properly scrutinised. We seem to have left it terribly late in the day still to be talking about a draft code of practice on this Bill, which we have not even seen. Can the Minister assure us that before we come to Report, that code of practice will be available in draft?
Viscount Younger of Leckie (Con)
Indeed, I was going to come on to that later in my remarks, particularly to address the points raised by the noble Baroness, Lady Sherlock. We need the necessary time to continue to develop this code of practice, and that is particularly important in respect of this measure. The answer is no, I cannot guarantee to have the code of practice ready by Report. Indeed, I am saying that it will be ready sometime in the summer. It is important to make that point but also a further one, which is that there are many instances, as the noble Lord will know, when a code of practice is finalised and brought forward after the primary legislation is brought through, and this is one of those cases. That is not abnormal but normal. The noble Lord may not like it but there is considerable precedent for that to happen.
Lord Bassam of Brighton (Lab)
I have a question. I am slightly puzzled about the difference between data collection and surveillance. Surely the collection and gathering of data would be to enable officials to survey someone’s bank account. If that is not the case, what is the purpose of collecting the data if not to interrogate the behaviour of an individual to understand how their money is being brought in and spent, so that the department can exercise some judgment over whether the individual is revealing the truth about their income and outgoings?
Viscount Younger of Leckie (Con)
Indeed, I think we are going back to the debates that we had on Monday. However, this chimes with a question from the noble Lord, Lord Clement-Jones, so it might be helpful briefly to rehearse what we are doing here and to be clear about the limitations and the checks and balances on the power that we are bringing forward.
As per paragraph 1(2) of Schedule 11 to the draft legislation, the DWP can use this power only for the purposes of checking whether someone is eligible for the benefit that they are receiving. In practice, this means that the DWP will request information only on specific criteria, which I laid out on Monday, linked to benefit eligibility rules, which, if met may—I emphasise “may”—indicate fraud or error. If accounts do not match these criteria, no data will be shared with the DWP. The effect of paragraphs 1 and 2 of the draft legislation is that the DWP can ask for data only where there is this three-way relationship between the DWP, the third party and the recipient of the payment. In addition, the DWP can ask for data only from third parties designated in secondary legislation, subject to the affirmative procedure. There are debates to come as further reassurance to your Lordships.
As per paragraph 4(2) of Schedule 11 to the draft legislation, the power does not allow the DWP to share personal information with third parties, which means that the power can be used only with third parties who are able to identify benefit recipients independently. Just to add further to this, we are obliged, under Article 5(1)(c) of the UK GDPR, to ask only for the minimum of information to serve our purposes. In accordance with the DWP’s existing commitments on the use of automation, no automatic benefit decisions will be taken based on any information supplied by third parties to the DWP. As I said earlier and on Monday, a human will always be involved in decision-making. I hope that helps.
Lord Stevenson of Balmacara (Lab)
I am sorry to interrupt the noble Viscount, but I just want to be clear about what he is saying in relation to the code of practice, which obviously is at the heart of this section of the debate, although there will be other things to come. Am I right that he said—obviously he has to cover himself—that there is a chance that the Report stage of this Bill might be entered into before we have sight of the draft code of practice? He makes the point that that is not an unusual occasion. I understand that—we have both served in Parliament long enough to know that that is the case—but this is clearly an issue on which the Committee has made very strong representations to the Government. Will he do what is in his power to make sure that we do not enter Report without seeing at least an early draft, if that is possible, of the code of practice?
Viscount Younger of Leckie (Con)
I will certainly take that back. I do not want to make any commitments today. I have already set out our stall as to where we are. I make the further point—I am perhaps repeating myself—that given the sensitivities that there clearly are, which I have been listening to carefully, it is important that this code of practice is developed at a pace that is right for what is needed, in bringing those involved along and making sure that it is right, secure, safe and with all the safeguards involved. It is quite a serious piece of work, as noble Lords would expect me to say. I will take that back. I will certainly not be able to guarantee to produce anything before Report, which may disappoint the noble Lord, but at least I have gone as far as I can. I hope that that is helpful.
Lord Stevenson of Balmacara (Lab)
I am grateful to the noble Viscount. This is just a thought, but we are happy to help, as we often have done in the past on other Bills. If there is any opportunity for us to be shown early drafts, to give some help and assurance to the noble Viscount that he is on the right track, I am sure that that would be accepted.
Viscount Younger of Leckie (Con)
I appreciate the tone of the noble Lord and, if there is anything that comes from behind me before I conclude my remarks, to be helpful, I will certainly do that.
Our debates on this measure have covered many issues. This group, as mentioned earlier, focuses primarily on the operational delivery of the power, so it would be quite good to move on. Just before I do, for the benefit of the noble Lord, Lord Anderson, in terms of the late introduction—his words—of this measure, as mentioned on Monday the DWP published a fraud plan in May 2022, where it outlined a number of new powers that it would seek to secure when parliamentary time allowed. In the parliamentary time available, DWP has prioritised our key third-party data-gathering measure, which will help it to tackle one of the largest causes of fraud and error in the welfare system. That is a short version of what I said on Monday, but I hope that it might be helpful.
Before I turn to the amendments, it might be helpful to set out how the legislation will frame the delivery of this measure. When we issue a request for data to a third party or, as it is set out, an account information notice or AIN, which is in the Bill, we can only ask it to provide data where it may help the DWP to establish whether benefits have been properly paid in accordance with the rules relating to those benefits. As mentioned earlier, this is defined clearly at paragraph 1(2) of the new schedule. This is where the data that DWP receives may signal—to use the word raised by the noble Lord, Lord Clement-Jones—potential fraud and error. The noble Lord asked for further clarification on that point. To be clear, a signal of fraud and error is where the rules of benefit eligibility appear not to be met. For example, this might be where a claimant has more capital than the benefit rules allow. As I made clear on Monday, all benefits and payments have rules that determine eligibility, which Parliament has agreed are the right rules in its consideration of other social security legislation. To issue an AIN, we must also have designated a third party in affirmative regulations, which need to be passed by both Houses.
As has been covered, we can also only request data from third parties where there is this relationship, which I will not repeat again and which I think the Committee will be familiar with. Our intention is to designate banks and financial institutions as the first third parties that we can approach, enabling us to request information on accounts only held in the UK. Just to clarify that point, we will not be able to request information on overseas accounts.
On the question raised by the noble Baroness, Lady Sherlock, on examples of non-financial organisations that the power could appropriately be used on, we will bring forward regulations to specify the data holders in scope. I hope that this is helpful. In the first instance, this will be, as mentioned, banks and financial institutions. The power also has potential use cases with other third parties, such as housing or childcare providers, but, just to reassure the Committee, this would be subject to further parliamentary approval.
Lord Anderson of Ipswich (CB)
I am grateful to the Minister—I am just trying to catch up. On the point that he made about regulations, I imagine that the power to prescribe the descriptions of persons to whom an account information notice may be sent comes under paragraph 1(1) of the schedule. I think that that is what he was saying. In paragraph 2, on the content of the account information notices, there is a reference to
“other specified information relating to the holders of those accounts, and … such further information in connection with those accounts as may be specified”.
Does that simply mean anything specified in the account information notice or is there a power to make regulations that will limit the types of information that can be specified in an AIN?
Viscount Younger of Leckie (Con)
Again, I hope that I might have covered this earlier. If I read the noble Lord’s question correctly, the definitions will need to be debated by both Houses. I have made clear what we are bringing in at the moment for banks and financial institutions, but this will need to be looked at by both Houses in future. I hope that that is clear.
Lord Anderson of Ipswich (CB)
I apologise; I did not make myself clear. I think that we are on entirely the same wavelength on the persons to whom an information notice can be given; the Minister has reassured us that they will be specified in regulations and considered by both Houses. My question relates to the content of an account information notice under paragraph 2 and the very broad references to “other specified information”, “such further information” and so on. I did not read that as a regulation-making power. I rather assume that the discretion over the choice of information that is specified remains entirely at large. If the Minister is saying that there will be regulations that will specify the information that an AIN can include, hence mitigating the breadth of paragraph 2, I would be glad if he could make that clear.
Viscount Younger of Leckie (Con)
My understanding —with his experience, I am sure that the noble Lord will be ahead of me on this—is that this is defined. We define it pretty clearly in paragraph 1(2). In the interests of time, I will reflect on what he has asked and will be absolutely sure to add this to the letter that I pledged to write on Monday—it is getting bigger by the moment, as I fully expected.
Baroness Sherlock (Lab)
My Lords, as I asked only four questions, I want to try to nail each one as we go. I am grateful to the Minister. Before we leave the matter of the kind of organisations to which this applies, I think that he is saying that the Bill would allow the DWP to request information from any kind of organisation, including phone companies, which I asked about specifically. The kinds of organisations are to be specified in regulations, which the Government will bring forward, initially naming financial institutions. By virtue of further regulations, could they extend that to anything—to Garmin, the people who monitor your runs, to gyms and to anyone else? Is that correct?
Viscount Younger of Leckie (Con)
That is correct. I hope indeed that it provides some reassurance that extending it to the banks and financial institutions initially is deliberately designed to be narrow. It would be subject to both Houses to debate other areas beyond those. I am coming on to address that. The noble Baroness asked about phone companies. Simply put, we will be able to designate the third parties that fit within the provisions of this legislation where they hold information that would help us to verify whether someone meets the eligibility criteria for the benefit that they are receiving. However, ultimately, it would be for Parliament to decide whether a third party can be designated under this power, as we must bring affirmative regulations forward to do this. We have that power.
Lord Davies of Brixton (Lab)
To be clear, they already have some information about claimants or recipients. Does this Bill make any difference to that information? Can they already use the information that they have for these purposes, for example the name and address of a claimant’s bank account, or does this Bill extend the use of information to other information that they already have?
Viscount Younger of Leckie (Con)
Indeed, that is correct. I hope that is helpful and gives the noble Lord reassurance. To clarify, we have our normal business-as-usual processes so, where we are able to—with the restriction of not at present being able to use the banks and financial institutions as a conduit—we have those powers. However, obviously, as has been made clear by the ICO, there is no alternative to needing the help of banks and financial institutions to go further in tackling the ever-greater sophistication of fraud.
The noble Baroness, Lady Sherlock, asked whether we could issue an AIN to a bank other than that into which the benefit is paid. The answer is no. The power is exercisable only in respect of a matching account that meets the criteria in an AIN and receives a benefit payment. If this is not the case, the Secretary of State cannot require them to supply that information.
When it comes to issuing an AIN, DWP will be able to exercise these powers only for payments for which it is responsible. This means that DWP cannot exercise this power with some benefits that fall under the legislation, such as child benefit, as was mentioned on Monday. I know that the noble Baroness, Lady Sherlock, raised this issue. As I committed to do on Monday, I will provide in writing more detail on the scope of the measure and on these limitations, which will require more time.
I will also ensure that my letter is clear on how the measure will impact appointees, joint claims and other such accounts. I am well aware that a number of questions were asked about this matter on Monday but, in the interests of time, I will move on.
I turn to proofs of concept. I also want to speak about our approach to delivery, in particular how we plan to test delivery before we gradually scale up operational delivery; I am aware of the time, but I hope that the Committee will indulge me. Our planned period of “test and learn” will build on our learning from our two previous proofs of concept, which we conducted in 2017 and 2022. These demonstrated the effectiveness of this approach and contributed to the OBR’s certification that the measure will save up to £600 million over the next five years.
The two proofs of concept that I mention are important. I hope that the Committee will be interested to read the results, which demonstrate why we need to do this. Without further ado, let me say that I will set out the details of these two examples in the letter as well, which will, I hope, be helpful.
The noble Lord, Lord Vaux, who is in his place, the noble Lord, Lord Clement-Jones, and the noble Baroness, Lady Sherlock, spoke about the regulatory impact assessment on Monday. I just want to use this time to reassure them on that. More information on these proofs are contained within the RIA, which was, as noble Lords will know, green-rated by the RPC.
On “test and learn”, we have a clear view on how this power may work. We are already working with third parties in readiness to commence the formal “test and learn” period in early 2025 and preparing the code of practice in advance of that. I will come on to that in just a second—in fact, I will come on to it right now, given the time. I shall refer to Amendments 225 to 232 in the name of the noble Baroness, Lady Sherlock.
To support the delivery of this measure, we will produce the code of practice to help define how the measure will work, with explanations. I assure the noble Baroness and the Committee that the code of practice is already in development; we are working positively with around eight leading financial institutions through an established working group that meets regularly to shape the code. We are fully committed to continuing that work; I think I covered the timing of that earlier in my remarks. Accepting Amendments 225 and 226 in the name of the noble Baroness would therefore, we believe, have minimal effect. I am clear that DWP will produce a code of practice, which will be consulted on; I have also set out the sort of detail that it will contain. Accepting them may also potentially restrict our ability to develop the code of practice further as we understand more from “test and learn”.
Because we are developing this collaboratively with banks, I am not yet in a position to share the draft code, as I mentioned; I have given certain reassurances on that. However, I can say that it will provide guidance on issues such as the nature of the power and to whom it will apply. It will also provide information on safeguards, cover data security responsibilities and provide information on the appeals processes should a third party wish to dispute a request. We will engage with SSAC, to help the noble Baroness, Lady Sherlock, as we bring forward the affirmative regulations. On balance, I believe that the best course is to consult on the code of practice rather than rushing to define it now.
Baroness Sherlock (Lab)
I am most grateful to the Minister. There is one question, so I apologise if he answered it and I did not quite pick it up. I specifically asked if these powers would allow the DWP to devise criteria designed to identify if a claimant was in fact living with another adult. With the appropriate regulation, would the powers allow it to do that?
Viscount Younger of Leckie (Con)
That is one of the questions that I can now answer. The power will allow this, in so far as it pertains to helping the Secretary of State establish whether the benefits are being paid properly, as with paragraph 1(2) of new Schedule 3B. Rules around living together are relevant only to some benefits. That is a very short answer, but I could expand on it.
Baroness Kidron (CB)
May I add to the very long letter? I have been sitting here worrying about this idea that one of the “signals” will be excess capital and then there are matching accounts. If the matching account has more capital—for example, the person who has a connected account is breaking the £16,000 or £6,000—does that signal trigger some sort of investigation?
Viscount Younger of Leckie (Con)
That is a very fair question, and I hope that I understand it correctly. I can say that the limit for the DWP is that it can gain only from what the third party produces. Whatever goes on behind the doors of the third party is for them and not us. Whether there is a related account and how best to operate is a matter for the bank to decide. We may therefore end up getting very limited information, in terms of the limits of our powers. I hope that helps, but I will add some more detail in the letter.
Lord Clement-Jones (LD)
My Lords, the Minister extolled the green-rated nature of this impact assessment. In the midst of all that, did he answer my question?
Lord Clement-Jones (LD)
I asked about the amount of fraud that the Government plan to detect, on top of the £6.4 billion in welfare overpayments that was detected last year.
Viscount Younger of Leckie (Con)
The figure that we have is £600 million but, again, I will reflect on the actual question that we are looking to address—the actual amount of fraud in the system.
Lord Clement-Jones (LD)
The Minister is saying that that figure is not to be found in this green-rated impact assessment, which most of us find to be completely opaque.
Viscount Younger of Leckie (Con)
I will certainly take that back, but it is green rated.
Lord Clement-Jones (LD)
My Lords, we have talked about proportionality and disproportionality throughout the debate on this Bill. Is it not extraordinary that that figure is not on the table, given the extent of these powers?
Lord Vaux of Harrowden (CB)
My Lords, the Minister was kind enough to mention me a little earlier. Can I just follow up on that? In the impact assessment, which I have here, nowhere can I find the £600 million figure, nor can I find anywhere the costs related to this. There will be a burden on the banks and clearly quite a burden on the DWP, actually, if it has got to trawl through this information, as the noble Viscount says, using people rather than machines. The costs are going to be enormous to save, it would appear, up to £120 million per year out of £6.4 billion per year of fraud. It does seem odd. It would be really helpful to have those cost numbers and to understand in what document they are, because I cannot find in the impact assessment where these numbers are.
Viscount Younger of Leckie (Con)
I hope I can help both noble Lords. Although I must admit that I have not read every single page, I understand that the figure of £500 million is in the IA.
Viscount Younger of Leckie (Con)
Yes, £500 million. I mentioned £600 million altogether; that was mentioned by the OBR, which had certified this, and by the way, that figure was in the Autumn Statement.
Lord Clement-Jones (LD)
My Lords, has not that demonstrated the disproportionality of these measures?
Baroness Jones of Whitchurch (Lab)
The noble Viscount explained in response to the noble Lord, Lord Anderson, that at every stage where the powers are going to be expanded, it would come back as an affirmative regulation. I might have been a bit slow about this, but I have been having a look and I cannot see where it says that. Perhaps he could point that out to me, because that would provide some reassurance that each stage of this is coming back to us.
Viscount Younger of Leckie (Con)
I understand, very quickly, that it is in paragraph 1(1), but again, in the interests of time, maybe we could talk about that outside the Room.
Lord Clement-Jones (LD)
Could the Minister clarify: was that paragraph 1(1)?
Viscount Younger of Leckie (Con)
I can reassure the noble Lord that that is the case, yes.
Lord Anderson of Ipswich (CB)
I do not know whether I can help. I agree with the noble Baroness: I do not think it is very clear from paragraph 1(1) that there is a regulation-making power. However, if you look at paragraph 5 of the new schedule, there is a reference there to regulations under paragraph 1(1) as well as two other paragraphs of the schedule. That is the rather tortuous route by which I came to the conclusion that the Minister is quite right.
Viscount Younger of Leckie (Con)
I reassure noble Lords that is correct—it is paragraph 1(1). It may be rather complex, but it is in there, just to reassure all noble Lords.
Lord Clement-Jones (LD)
I am sorry to keep coming back, but did the Minister give us the paragraph in the impact assessment that referred to £500 million?
Viscount Younger of Leckie (Con)
No, I did not, but that is something which surely we can deal with outside the Room. However, I can assure noble Lords that it is in there.
Baroness Sherlock (Lab)
My Lords, I thank the Minister for his attempts to answer my questions and those of many noble Lords. I will not detain the Committee for very long at all.
I am grateful to know that there will be a code and that it will be consulted on. Given that, it would have saved an awful lot of trouble if the Government had simply not put “may” in the Bill in the first place—that would have cut out a whole loop of this. I am very grateful to know that that is there. I agree with the Minister that we all want to know about and to clamp down on fraud and error; the question is one of proportionality.
When the Minister comes to write—I realise that this letter is turning into “War and Peace”, but it will make us all come to Report in a much better place if we can get a clearer answer to many of these questions— I still wonder whether he properly answered the question from the noble Lord, Lord Anderson, about the legality of these powers, because the point about when they engage is crucial. The Minister is still coming back to a distinction between the gathering of the data and what the DWP will do using its existing “business as usual” powers, to investigate. I think the point the noble Lord was making is that the question of legality engages at the point of that data gathering, not at the point at which it is used, if I am correct. I am not sure that the Minister answered that—I am not inviting him to do it now—but I specifically suggest that he takes advice on that point before we come back on Report.
The other issue is that, if the Government have come in so late in the day introducing these powers into the Bill, it would have been better to have draft regulations before Report at the first stage. The Minister thinks the code can be available in the summer, but the summer is fast approaching so I see no reason why the usual channels could not accommodate the date for Report to allow us to go past the date for producing a draft code if the Government wish to. I realise that they may not wish to, but it must be perfectly possible—unless the Minister knows something I do not about a likely date of a general election, presumably we should still have time to do that. So I commend that thought to him.
However, we also know that a lot of the constraints he has described will happen solely in regulations. Everybody in this Committee is aware of the limitations of the capacity of both Houses to do anything about regulations. We cannot amend them here. The Government will bring them forward, but the capacity of us to do anything about that is small, so that is not as much of an assurance as it would be in other circumstances.
Finally, what I am left with is that these powers could do anything from something that might sound very proportionate to something that might sound entirely disproportionate, and we simply have not heard anything that enables us to make a judgment early enough to know where that is contained. I therefore ask the Government to think again before Report about ways in which they might provide assurance about a more contained and proportionate approach to these measures.
Since we are in Committee, in the meantime, I thank all noble Lords for their work on this and the Minister for his response. Before I beg leave to withdraw, I see that the Minister is intervening on me now, which is a joyful change.
Viscount Younger of Leckie (Con)
Before the noble Baroness sits down, I want to say one very important thing. As ever with Bills, there is an opportunity to engage, and I pledge right now to engage with all noble Lords who wish to, and we would like to as well, on these particular measures, to provide, I hope, further reassurances to those that I have given. I hope there is some acceptance that I have given some reassurances.
Baroness Sherlock (Lab)
My Lords, I am sure that on behalf of the Committee I can thank the Minister for that generous offer, and we look forward to taking it up. In the meantime, I beg leave to withdraw the amendment.
Viscount Camrose
Member’s explanatory statement
This amendment makes a technical change to wording about investigations by a coroner or procurator fiscal. The omitted words are not required because there is no stage at which a coroner or procurator fiscal would be “due to” conduct an investigation into a death (as opposed to conducting an investigation into it).
The Parliamentary Under-Secretary of State, Department for Science, Innovation and Technology (Viscount Camrose) (Con)
My Lords, having listened carefully to representations from across the House at Second Reading, I am introducing this amendment to address concerns about the data preservation powers established in the Bill. The amendment provides for coroners, and procurators fiscal in Scotland, to initiate the data preservation process when they decide it is necessary and appropriate to support their investigations into a child’s death, irrespective of the suspected cause of death.
This amendment demonstrates our commitment to ensuring that coroners and procurators fiscal can access the online data they may need to support their investigation into a child’s death. It is important to emphasise that coroners and procurators fiscal, as independent judges, have discretion about whether to trigger the data preservation process. We are grateful to the families, Peers and coroners whom we spoke to in developing these measures. In particular, I thank the noble Baroness, Lady Kidron, who is in her place. I beg to move.
Baroness Kidron (CB)
My Lords, it is an unusual pleasure to support the Minister and to say that this is a very welcome amendment to address a terrible error of judgment made when the Government first added the measure to the Bill in the other place and excluded data access for coroners in respect of children who died by means other than suicide. I shall not replay here the reasons why it was wrong, but I am extremely glad that the Government have put it right. I wish to take this opportunity to pay tribute to those past and present at 5Rights and the NSPCC for their support and to those journalists who understood why data access for coroners is a central plank of online safety.
I too recognise the role of the Bereaved Families for Online Safety. They bear the pain of losing a child and, as their testimony has repeatedly attested, not knowing the circumstances surrounding that death is a particularly cruel revictimisation for families, who never lose their grief but simply learn to live with it. We owe them a debt of gratitude for putting their grief to work for the benefit of other families and other children.
Lord Allan of Hallam (LD)
My Lords, I want briefly to contribute to this debate, which I think is somewhat less contentious than the previous group of amendments. As somebody, again, who was working on the Online Safety Act all the way through, I really just pay tribute to the tenacity of the noble Baroness, Lady Kidron, for pursuing this detail—it is a really important detail. We otherwise risk, having passed the legislation, ending up in scenarios where everyone would know that it was correct for the data-gathering powers to be implemented but, just because of the wording of the law, they would not kick in when it was necessary. I therefore really want to thank the noble Baroness, Lady Kidron, for being persistent with it, and I congratulate the Government on recognising that, when there is an irresistible force, it is better to be a movable object than an immovable one.
I credit the noble Viscount the Minister for tabling these amendments today. As I say, I think that this is something that can pass more quickly because there is broad agreement around the Committee that this is necessary. It will not take away the pain of families who are in those circumstances, but it will certainly help coroners get to the truth when a tragic incident has occurred, whatever the nature of that tragic incident.
Lord Clement-Jones (LD)
My Lords, having been involved in and seen the campaigning of the bereaved families and the noble Baroness, Lady Kidron, in particular in the Joint Committee on the Draft Online Safety Bill onwards, I associate myself entirely with the noble Baroness’s statement and with my noble friend Lord Allan’s remarks.
Lord Leong (Lab)
My Lords, I thank the Minister for setting out the amendment and all noble Lords who spoke. I am sure the Minister will be pleased to hear that we support his Amendment 236 and his Amendment 237, to which the noble Baroness, Lady Kidron, has added her name.
Amendment 236 is a technical amendment. It seeks the straightforward deletion of words from a clause, accounting for the fact that investigations by a coroner, or procurator fiscal in Scotland, must start upon them being notified of the death of a child. The words
“or are due to conduct an investigation”
are indeed superfluous.
We also support Amendment 237. The deletion of this part of the clause would bring into effect a material change. It would empower Ofcom to issue a notice to an internet service provider to retain information in all cases of a child’s death, not just cases of suspected suicide. Sadly, as many of us have discovered in the course of our work on this Bill, there is an increasing number of ways in which communication online can be directly or indirectly linked to a child’s death. These include areas of material that is appropriate for adults only; the inability to filter harmful information, which may adversely affect mental health and decision-making; and, of course, the deliberate targeting of children by adults and, in some cases, by other children.
There are adults who use the internet with the intention of doing harm to children through coercion, grooming or abuse. What initially starts online can lead to contact in person. Often, this will lead to a criminal investigation, but, even if it does not, the changes proposed by this amendment could help prevent additional tragic deaths of children, not just those caused by suspected child suicides. If the investigating authorities have access to online communications that may have been a contributing factor in a child’s death, additional areas of concern can be identified by organisations and individuals with responsibility for children’s welfare and action taken to save many other young lives.
Before I sit down, I want to take this opportunity to say a big thank you to the noble Baroness, Lady Kidron, the noble Lord, Lord Kennedy, and all those who have campaigned on this issue relentlessly and brought it to our attention.
Viscount Camrose (Con)
Let me begin by reiterating my thanks to the noble Baroness, Peers, families and coroners for their help in developing these measures. My momentary pleasure in being supported on these amendments is, of course, tempered by the desperate sadness of the situations that they are designed to address.
I acknowledge the powerful advocacy that has taken place on this issue. I am glad that we have been able to address the concerns with the amendment to the Online Safety Act, which takes a zero-tolerance approach to protecting children by making sure that the buck stops with social media platforms for the content they host. I sincerely hope that this demonstrates our commitment to ensuring that coroners can fully access the online data needed to provide answers for grieving families.
On the point raised by the noble Baroness, Lady Kidron, guidance from the Chief Coroner is likely to be necessary to ensure both that this provision works effectively and that coroners feel supported in their decisions on whether to trigger the data preservation process. Decisions on how and when to issue guidance are a matter for the Chief Coroner, of course, but we understand that he is very likely to issue guidance to coroners on this matter. His office is working with my department and Ofcom to ensure that our processes are aligned. The Government will also work with the regulators and interested parties to see whether any guidance is required to support parents in understanding the data preservation process. Needless to say, I would be more than happy to arrange a meeting with the noble Baroness to discuss the development of the guidance; other Members may wish to join that as well.
Once again, I thank noble Lords for their support on this matter.
Viscount Camrose
Member's explanatory statement
This amendment concerns OFCOM’s power to issue a notice requiring an internet service provider to retain information about the use of the service by a child who has died, where a coroner or procurator fiscal is investigating the child’s death. The amendment has the effect that the power is no longer limited to cases of suspected child suicide.
“(2A) After section 25, insert—“25A Review of form in which registers are to be kept(1) The Secretary of State must commission a review of the provisions of this Act and of related legislation, with a view to the creation of a single digital register of births and deaths.(2) The review must consider and make recommendations on the effect of the creation of a single digital register on—(a) fraud,(b) data collection, and(c) ease of registration.(3) The Secretary of State must lay the conclusions of their review before Parliament within six months of this section coming into force.””Member’s explanatory statement
This amendment would insert a new section into the Births and Deaths Registration Act 1953 requiring a review of relevant legislation, with consideration of creating a single digital register for registered births and registered deaths and recommendations on the effects of such a change on reducing fraud, improving data collection and streamlining digital registration.
Baroness Jones of Whitchurch (Lab)
My Lords, I rise to move Amendment 239 and to speak to Amendment 250 in my name. I am grateful to the right reverend Prelate the Bishop of London and the noble Lord, Lord Clement-Jones, for their support for Amendment 250.
These amendments tackle the sensitive but vital process of registering births and deaths. We are pleased that, in Clauses 133 to 137, the Government have set about modernising the Births and Deaths Registration Act 1953. The legislation created a huge paper trail of registrations, with local registrars being required to hold paper copies of every live birth, stillbirth and death, as well as providing certified paper copies of the register entries. Since 2009, registrars have also recorded this information electronically, so there is a huge duplication of effort. The clauses now proposed allow registrars to decide the best form in which to record this information, with an expectation that we will largely move to an online database.
These proposals make sense and will be widely welcomed. They make the functioning of the registrar more efficient. More importantly, they will make it easier for families, particularly those that have been bereaved, to inform authorities at what is often a difficult and distressing time. However, we believe that the Bill could go even further to simplify the process, tackle fraud and support bereaved families.
Our Amendment 239 would move away from individual registrars deciding how to record the information and would instead take the first steps to creating a single digital register of births and deaths. Our proposal is that the Secretary of State should commission a review to consider the viability of such a proposal and its potential impact on tackling fraud, the protection of personal data and whether such a scheme would simplify registration procedures on a national level. It would require the conclusions of the review to be laid before Parliament within six months of the section coming into law.
We believe that this standardisation would make it easier for law enforcement agencies to check whether identities are being stolen and whether patterns of identity theft are emerging. It would also enable regulators to set national standards as to how this information should be protected and accessed by, for example, those with commercial interests. It should also make it easier for individuals living in one part of the country to register a death in another part of the country. I hope that the Minister sees the sense of these modest proposals.
Amendment 250 addresses the further potential for the Tell Us Once service. This has been a welcome initiative, which enables bereaved families to inform a large number of government and public sector bodies that a death has occurred without repeating the details over and over again. This considerably reduces the administrative burden at a time of distress and complexity while dealing with the consequences of a bereavement. However, private organisations are not included and loved ones are still tasked with contacting organisations such as employers, banks, energy and telephone companies and so on. Inevitably, the response from these organisations is variable and can be unwittingly insensitive.
A number of charities, including Marie Curie, came together to establish the UK Commission on Bereavement, which was chaired by the right reverend Prelate the Bishop of London. Its 2022 report found that 61% of adult respondents had experienced practical challenges when notifying an organisation of the death of a loved one. The report made a number of recommendations, with the extension of Tell Us Once being a key issue raised. The report recommended a review of the scheme.
We believe that the time has come to roll out the benefits of the Tell Us Once scheme more widely, so we propose a review of the effectiveness of the current legislation, including any gaps in its provision. Recommendations should then be drawn up to assess whether the scheme could be expanded to include non-public sector, voluntary and private sector holders of personal data. Our proposal is that the Secretary of State should lay a report before Parliament within six months.
This is a common-sense set of proposals, which could bring positive benefits to bereaved families, making best use of digital services to ease the distress and pain of trying to manage a complex web of administrative tasks. I hope that noble Lords and the Minister will see the sense of these proposals and agree to take them forward. I beg to move.
Lord Clement-Jones (LD)
My Lords, I will be brief because we very much support these amendments. Interestingly, Amendment 239 from the noble Baroness, Lady Jones, follows closely on from a Private Member’s Bill presented in November 2021 by the Minister’s colleague, Minister Saqib Bhatti, and before that by the right honourable Andrew Mitchell, who is also currently a Minister. The provenance of this is impeccable, so I hope that the Minister will accept Amendment 239 with alacrity.
We very much support Amendment 250. The UK Commission on Bereavement’s Bereavement is Everyone’s Business is a terrific report. We welcome Clause 133 but we think that improvements can be made. The amendment from the noble Baroness, which I have signed, will address two of the three recommendations that the report made on the Tell Us Once service. It said that there should be a review, which this amendment reflects. It also said that
“regulators must make sure bereaved customers are treated fairly and sensitively”
by developing minimum standards. We very much support that. It is fundamentally a useful service but, as the report shows, it can clearly be improved. I congratulate the noble Baroness, Lady Jones, on picking up the recommendations of the commission and putting them forward as amendments to this Bill.
Lord Harlech (Con)
My Lords, I declare an interest as someone who has been through the paper death registration process and grant of probate, which has something to do with why I am in your Lordships’ House, so I absolutely understand where the noble Baroness, Lady Jones of Whitchurch, is coming from. I thank her for tabling these amendments to Clauses 133 and 142. They would require the Secretary of State to commission a review with a view to creating a single digital register for the registration of births and deaths and to conduct a review of the Government’s Tell Us Once scheme.
Clause 133 reforms how births and deaths are registered in England and Wales by enabling a move from a paper-based system of birth and death registration to registration in a single electronic register. An electronic register is already in use alongside the paper registers and has been since 2009. Well-established safety and security measures and processes are already in place with regard to the electronic infrastructure, which have proven extremely secure in practice. I assure noble Lords that an impact assessment has been completed to consider all the impacts relating to the move to an electronic register, although it should be noted that marriages and civil partnerships are already registered electronically.
The strategic direction is to progressively reduce the reliance on paper and the amount of paper in use, as it is insecure and capable of being tampered with or forged. The creation of a single electronic register will remove the risk of registrars having to transmit loose-leaf register pages back to the register office when they are registering births and deaths at service points across the district. It will also minimise the risk of open paper registers being stolen from register offices.
The Covid-19 pandemic had unprecedented impacts on the delivery of registration services across England and Wales, and it highlighted the need to offer more choice in how births and deaths are registered in the future. The provisions in the Bill will allow for more flexibility in how births and deaths are registered—for example, registering deaths by telephone, as was the case during the pandemic. Over 1 million deaths were successfully registered under provisions in the Coronavirus Act 2020. This service was well received by the public, registrars and funeral services.
Measures will be put in place to ensure that the identity of an informant is established in line with Cabinet Office good practice guidance. This will ensure that information provided by informants can be verified or validated for the purposes of registering by telephone. For example, a medical certificate of cause of death issued by a registered medical practitioner would need to have been received by the registrar before an informant could register a death by telephone. Having to conduct a review, as was proposed by the noble Baroness, Lady Jones, would delay moving to digital ways of working and the benefits this would introduce.
Baroness Jones of Whitchurch (Lab)
Can I just be clear? The noble Lord was quite rightly saying that there is going to be a move to digital, rather than paper, and we all support that. However, our amendment went one stage further and said that there should be one national digital scheme. In the impact assessment and the strategic direction, to which the noble Lord referred, is one national scheme intended so that registrars do not have the flexibility to do their own thing, with their own computer? Is that now being proposed?
Lord Harlech (Con)
The noble Baroness asks a fair question. A major thing is being proposed, so it is best that we work with our DWP colleagues, and I commit to writing to the noble Baroness and the Committee on that point.
On the amendment to Clause 142, while we agree with the aim of improving the Tell Us Once service, our view is that the only way to achieve this is by upgrading its technology. This work is under way and expected to take up to two years to complete. It will ensure that Tell Us Once continues to operate into the future, providing us with the ability to build on opportunities to improve its speed and efficiency.
Going back to what I said earlier, it would not be right to commit to undertake a review of the service while this upgrading work is ongoing, especially as any extension of the service would require a fundamental change in how it operates, placing additional burdens on registrars and citizens, and undermining that simplicity-of-service principle. For those who still wish to use a paper process, that option will remain. For the reasons that I have set out, I am not able to accept these amendments and I hope that the noble Baroness is happy not to press them.
Baroness Jones of Whitchurch (Lab)
My Lords, I am grateful to hear that there is some work ongoing on the registrar process and that the noble Lord will write with further details. Obviously, if this work is already happening and we have the same intent, we would accept that our amendment is superfluous, but I need to be a little more assured that that is the case.
I was a bit more disappointed with what the Minister was saying on Tell Us Once. I suspect that the technology upgrade to which he referred is only for the current scheme, which refers only to the public sector. However, our proposal and the Marie Curie proposal, which was very well argued, is that there is now a need to extend that to the private sector—to banks, telephone companies and so on.
I did not really hear the Minister saying that that was going to be the case but, if he is going to write, maybe he could embrace that as well. As I said, Tell Us Once is a hugely popular scheme and if we can extend it further to a wider group of organisations, that would be a very popular thing for the Government to do.
In the meantime, I beg leave to withdraw the amendment.
Viscount Camrose
Member's explanatory statement
This amendment is consequential on the amendment to this clause in my name moving provision about the initial upload of information into the National Underground Asset Register into a new section to be inserted into Part 3A of the New Roads and Street Works Act 1991 (inserted by this clause).
Viscount Camrose (Con)
My Lords, I now turn to the national underground asset register, which I will refer to as NUAR. It is a new digital map of buried pipes and cables that is revolutionising the way that we install, maintain, operate and repair our buried infrastructure. The provisions contained in the Bill will ensure workers have complete and up-to-date access to the data that they need, when they need it, through the new register. NUAR is estimated to deliver more than £400 million per year of economic growth through increased efficiency, reduced accidental damage and fewer disruptions for citizens and businesses. I am therefore introducing several government amendments, which are minor in nature and aim to improve the clarity of the Bill. I hope that the Committee will be content if I address these together.
Amendment 244 clarifies responsibilities in relation to the licensing of NUAR data. As NUAR includes data from across public and private sector organisations, it involves both Crown and third-party intellectual property rights, including database rights. This amendment clarifies that the role of the Keeper of the National Archives in determining the licence terms for Crown IP remains unchanged. This will require the Secretary of State to work through the National Archives to determine licence terms for Crown data, as was always intended. Amendments 243 and 245 are consequential to this change.
Similarly, Amendment 241 moves the provision relating to the first initial upload of data to the register under new Part 3A to make the Bill clearer, with Amendments 248 and 249 consequential to this change.
Amendment 242 is a minor and technical amendment that clarifies that regulations made under new Section 106B(1) can be made “for or in connection with”—rather than solely “in connection with”—the making of information kept in NUAR available, with or without a licence.
Amendment 247 is another minor and technical amendment to ensure that consistent language is used throughout Schedule 13 and so further improve the clarity of these provisions. These amendments provide clarity to the Bill; they do not change the underlying policy.
Although Amendment 298 is not solely focused on NUAR, this might perhaps be a convenient point for me to briefly explain it to your Lordships. Amendment 298 makes a minor and technical amendment to Clause 154, the clause which sets out the extent of the Bill. Subsection (4) of that clause currently provides that an amendment, repeal or revocation made by the Bill
“has the same extent as the enactment amended, repealed or revoked”.
Subsection (4) also makes clear that this approach is subject to subsection (3), which provides for certain provisions to extend only to England and Wales and Northern Ireland. Upon further reviewing the Bill, we have identified that subsection (4) should, of course, also be subject to subsection (2), which provides for certain provisions to extend only to England and Wales. Amendment 298 therefore makes provision to ensure that the various subsections of Clause 154 operate effectively together as a coherent package.
I now turn to a series of amendments raised by the noble Lord, Lord Clement-Jones. Amendments 240A and 240B relate to new Section 106A, which places a duty on the Secretary of State to keep a register of information relating to apparatus in streets in England and Wales. Section 106A allows for the Secretary of State to make regulations that establish the form and manner in which the register is kept. The Bill as currently drafted provides for these regulations to be subject to the negative procedure. Amendment 240A calls for this to be changed to the affirmative procedure, while Amendment 240B would require the publication of draft regulations, a call for evidence and the subsequent laying before Parliament of a statement by the Secretary of State before such regulations can be made.
Lord Clement-Jones (LD)
My Lords, I thank the Minister for his exposition. He explained the purposes of Clauses 138 to 141 and extolled their virtues, and helpfully explained what my amendments are trying to do—not that he has shot any foxes in the process.
The purpose of my amendments is much more fundamental, and that is to question the methodology of the Government in all of this. The purpose of NUAR is to prevent accidental strikes where building works damage underground infrastructure. However, the Government seem to have ignored the fact that an equivalent service—LinesearchbeforeUdig, or LSBUD—already achieves these aims, is much more widely used than NUAR and is much more cost effective. The existing system has been in place for more than 20 years and now includes data from more than 150 asset owners. It is used by 270,000 UK digging contractors and individuals—and more every day. The fact is that, without further consultation and greater alignment with current industry best practice, NUAR risks becoming a white elephant, undermining the safe working practices that have kept critical national infrastructure in the UK safe for more than two decades.
However, the essence of these amendments is not to cancel NUAR but to get NUAR and the Government to work much more closely with the services that already exist and those who wish to help. They are designed to ensure that proper consultation and democratic scrutiny is conducted before NUAR is implemented in statutory form. Essentially, the industry says that NUAR could be made much better and much quicker if it worked more closely with the private sector services that already exist. Those who are already involved with LinesearchbeforeUdig say, first of all, that NUAR will create uncertainty and reduce safety, failing in its key aims.
The Government have been developing the NUAR since 2018. Claiming that it would drive a reduction in unexpected underground assets being damaged in roadworks, the impact assessment incorrectly states:
“No businesses currently provide a service that is the same or similar to the service that NUAR would provide”.
In fact, as I said, LSBUD has been providing a safe digging service in the UK for 20 years and has grown significantly over that time. Without a plan to work more closely with LSBUD as the key industry representative, NUAR risks creating more accidental strikes of key network infrastructure, increasing risks to workers safety through electrical fires, gas leaks, pollution and so on. The public at home or at work would also suffer more service outages and disruption.
Secondly, NUAR will add costs and stifle competition. The Government claim that NUAR will deliver significant benefits to taxpayers, reduce disruption and prevent damage to underground assets, but the impact assessment ignores the fact that NUAR’s core functions are already provided through the current system—so its expected benefits are vastly overstated. While asset owners, many of whom have not been consulted, will face costs of more than £200 million over the first 10 years, the wholesale publication of asset owners’ entire networks creates commercially sensitive risks, damaging innovation and competition. Combined with the uncertainties about how quickly NUAR can gain a critical mass of users and data, this again calls into question why NUAR does not properly align with and build on the current system but instead smothers competition and harms a successful, growing UK business.
Thirdly, NUAR risks undermining control over sensitive CNI data. Underground assets are integral to critical national infrastructure; protecting them is vital to the UK’s economic and national security. LSBUD deliberately keeps data separate and ensures that data owners remain in full control over who can access their data via a secure exchange platform. NUAR, however, in aiming to provide a single view of all assets, removes providers’ control over their own data—an essential security fail-safe. It would also expand opportunities for malicious actors to target sectors in a variety of ways—for instance, the theft of copper wires from telecom networks.
NUAR shifts control over data access to a centralised government body, with no clear plan for how the data is to be protected from unauthorised access, leading to serious concerns about security and theft. Safe digging is paramount; mandating NUAR will lead to uncertainty, present more health and safety dangers to workers and the public and put critical national infrastructure at risk. These plans require further review. There needs to be, as I have said, greater alignment with industry best practice. Without further consultation, NUAR risks becoming a white elephant that undermines safe digging in the UK and increases risk to infrastructure workers and the public.
I will not go through the amendments individually as the Minister has mentioned what their effect would be, but I will dispel a few myths. The Government have claimed that NUAR has the overwhelming support of asset owners. In the view of those who briefed me, that is not an accurate reflection of the broadband and telecoms sector in particular; a number of concerns from ISPA members have been raised with the NUAR team around cost and security that have yet to be addressed. This is borne out by the fact that there are notable gaps in the major asset owners in the telecoms sector signed up to NUAR at this time.
Clearly, the noble Viscount is resisting changing the procedure by which these changes are made from negative to affirmative, but I hope I have gone some way to persuade the Committee of the importance of this change to how the NUAR system is put on a statutory footing. He talked about a “handful” of data; the comprehensive nature of the existing system is pretty impressive, and it is a free service, updated on a regular basis, which covers more than 150 asset owners and 98% of high-risk assets. NUAR currently covers only one-third of asset owners. The comparisons are already not to the advantage of NUAR.
I hope the Government will at least, even if they do not agree with these amendments, think twice before proceeding at the speed they seem to be and without the consent or taking on board the concerns of those who are already heavily engaged with Linesearch- beforeUdig who find it pretty satisfactory for their purposes.
Lord Bassam of Brighton (Lab)
My Lords, the Minister really did big up this section of the Bill. He said it would revolutionise this information service, that it would bring many benefits, has a green rating, would be the Formula 1 of data transfer in mapping and so on. We were led to expect quite a lot from this part of the legislation. It is an important part of the Bill, because it signifies some government progress towards the goal of creating a comprehensive national underground asset register, as he put it, or NUAR. We are happy to support this objective, but we have concerns about the progress being made and the time it is taking.
To digress a bit here, it took me back 50 years to when I was a labourer working by the side of a bypass. One of the guys I was working with was operating our post hole borer; it penetrated the Anglian Water system and sent a geyser some 20 metres up into the sky, completely destroying my midday retreat to the local pub between the arduous exercise of digging holes. Had he had one of the services on offer, I suspect that we would not have been so detained. It was quite an entertaining incident, but it clearly showed the dangers of not having good mapping.
As I understand it, and as was outlined by the noble Lord, Lord Clement-Jones, since 2018 the Government have been moving towards this notion of somewhere recording what lies below the surface in our communities. We have had street works legislation going back several decades, from at least 1991. In general, progress towards better co-ordination of utilities excavations has not been helped by poor and low levels of mapping and knowledge of what and which utilities are located underground. This is despite the various legislative attempts to make that happen, most of which have attempted to bring better co-ordination of services.
Viscount Camrose (Con)
I start by thanking the noble Lords, Lord Clement-Jones and Lord Bassam, for their respective replies. As I have said, the Geospatial Commission has been engaging extensively with stakeholders, including the security services, on NUAR since 2018. This has included a call for evidence, a pilot project, a public consultation, focus groups, various workshops and other interactions. All major gas and water companies have signed up, as well as several large telecoms firms.
Lord Clement-Jones (LD)
While the Minister is speaking, maybe the Box could tell him whether the figure of only 33% of asset owners having signed up is correct? Both I and the noble Lord, Lord Bassam, mentioned that; it would be very useful to know.
Viscount Camrose (Con)
It did complete a pilot phase this year. As it operationalises, more and more will sign up. I do not know the actual number that have signed up today, but I will find out.
NUAR does not duplicate existing commercial services. It is a standardised, interactive digital map of buried infrastructure, which no existing service is able to provide. It will significantly enhance data sharing and access efficiency. Current services—
Lord Bassam of Brighton (Lab)
I am concerned. We get the principle behind NUAR, but is there an interface between NUAR and this other service—which, on the face of it, looks quite extensive—currently in place? Is there a dialogue between the two? That seems to be quite important, given that there is some doubt over NUAR’s current scope.
Viscount Camrose (Con)
I am not sure that there is doubt over the current scope of NUAR; it is meant to address all buried infrastructure in the United Kingdom. LSBUD does make extensive representations, as indeed it has to parliamentarians of both Houses, and has spoken several times to the Geospatial Commission. I am very happy to commit to continuing to do so.
Lord Clement-Jones (LD)
My Lords, the noble Lord, Lord Bassam, is absolutely right to be asking that question. We can go only on the briefs we get. Unlike the noble Lord, Lord Bassam, I have not been underground very recently, but we do rely on the briefings we get. LSBUD is described as a
“sustainably-funded UK success story”—
okay, give or take a bit of puff—that
“responds to most requests in 5 minutes or less”.
It has
“150+ asset-owners covering nearly 2 million km and 98% of high-risk assets—like gas, electric, and fuel pipelines”.
That sounds as though we are in the same kind of territory. How can the Minister just baldly state that NUAR is entirely different? Can he perhaps give us a paragraph on how they differ? I do not think that “completely different” can possibly characterise this relationship.
Viscount Camrose (Con)
As I understand it, LSBUD services are provided on a pdf, on request. It is not interactive; it is not vector-based graphics presented on a map, so it cannot be interrogated in the same way. Furthermore, as I understand it—and I am happy to be corrected if I am misstating—LSBUD has a great many private sector asset owners, but no public sector data is provided. All of it is provided on a much more manualised basis. The two services simply do not brook comparison. I would be delighted to speak to LSBUD.
Lord Clement-Jones (LD)
My Lords, we are beginning to tease out something quite useful here. Basically, NUAR will be pretty much an automatic service, because it will be available online, I assume, which has implications on data protection, on who owns the copyright and so on. I am sure there are all kinds of issues there. It is the way the service is delivered, and then you have the public sector, which has not taken part in LSBUD. Are those the two key distinctions?
Viscount Camrose (Con)
Indeed, there are two key distinctions. One is the way that the information is provided online, in a live format, and the other is the quantity and nature of the data that is provided, which will eventually be all relevant data in the United Kingdom under NUAR, versus those who choose to sign up on LSBUD and equivalent services. I am very happy to write on the various figures. Maybe it would help if I were to arrange a demonstration of the technology. Would that be useful? I will do that.
Lord Clement-Jones (LD)
Unlike the noble Lord, Lord Bassam, I do not have that background in seeing what happens with the excavators, but I would very much welcome that. The Minister again is really making the case for greater co-operation. The public sector has access to the public sector information, and LSBUD has access to a lot of private sector information. Does that not speak to co-operation between the two systems? We seem to have warring camps, where the Government are determined to prove that they are forging ahead with their new service and are trampling on quite a lot of rights, interests and concerns in doing so—by the sound of it. The Minister looks rather sceptical.
Viscount Camrose (Con)
I am not sure whose rights are being trampled on by having a shared database of these things. However, I will arrange a demonstration, and I confidently state that nobody who sees that demonstration will have any cynicism any more about the quality of the service provided.
Lord Clement-Jones (LD)
All I can say is that, in that case, the Minister has been worked on extremely well.
Viscount Camrose (Con)
In addition to the situation that the noble Lord, Lord Bassam, described, I was braced for a really horrible situation, because these things very often lead to danger and death, and there is a very serious safety argument to providing this information reliably and rapidly, as NUAR will.
Lord Bassam of Brighton (Lab)
My Lords, it took them half a day to discover where the hole had gone and what the damage was. The water flooded several main roads and there were traffic delays and the rest. So these things are very serious. I was trying to make a serious point while being slightly frivolous about it.
Viscount Camrose (Con)
No, indeed, it is a deeply serious point. I do not know the number off the top of my head but there are a number of deaths every year as a result of these things.
As I was saying, a thorough impact assessment was undertaken for the NUAR measures, which received a green rating from the Regulatory Policy Committee. Impacts on organisations that help facilitate the exchange of data related to assets in the street were included in the modelling. Although NUAR could impact existing utility—
Lord Davies of Brixton (Lab)
I cannot resist drawing the Minister’s attention to the story in today’s Financial Times, which reports that two major water companies do not know where their sewers are. So I think the impact is going to be a little bit greater than he is saying.
Viscount Camrose (Con)
I saw that story. Obviously, regardless of how they report the data, if they do not know, they do not know. But my thought was that, if there are maps available for everything that is known, that tends to encourage people who do not know to take better control of the assets that they manage.
A discovery project is under way to potentially allow these organisations—these alternative providers—to access NUAR data; LSBUD has been referenced, among others. It attended the last three workshops we conducted on this, which I hope could enable it to adapt its services and business models potentially to mitigate any negative impacts. Such opportunities will be taken forward in future years should they be technically feasible, of value, in the public interest and in light of the views of stakeholders, including asset owners.
A national underground asset register depends on bringing data together from asset owners on to a single standardised database. This will allow data to be shared more efficiently than was possible before. Asset owners have existing processes that have been developed to allow them to manage risks associated with excavations. These processes will be developed in compliance with existing guidance in the form of HSG47. To achieve this, those working on NUAR are already working closely with relevant stakeholders as part of a dedicated adoption group. This will allow for a safe and planned rollout of NUAR to those who will benefit from it.
Lord Clement-Jones (LD)
Before the Minister’s peroration, I just want to check something. He talked about the discovery project and contact with the industry; by that, I assume he was talking about asset owners as part of the project. What contact is proposed with the existing company, LinesearchbeforeUdig, and some of its major supporters? Can the Government assure us that they will have greater contact or try to align? Can they give greater assurance than they have been able to give today? Clearly, there is suspicion here of the Government’s intentions and how things will work out. If we are to achieve this safety agenda—I absolutely support it; it is the fundamental issue here—more work needs to be done in building bridges, to use another construction metaphor.
Viscount Camrose (Con)
As I said, the Government have met the Geospatial Commission many times. I would be happy to meet it in order to help it adapt its business model for the NUAR future. As I said, it has attended the last three discovery workshops, allowing this data.
I close by thanking noble Lords for their contributions. I hope they look forward to the demonstration.
Viscount Camrose
“106AA Initial upload of information into NUAR(1) Before the end of the initial upload period an undertaker having apparatus in a street must enter into NUAR— (a) all information that is included in the undertaker’s records under section 79(1) on the archive upload date, and(b) any other information of a prescribed description that is held by the undertaker on that date.(2) The duty under subsection (1) does not apply in such cases as may be prescribed.(3) Information must be entered into NUAR under subsection (1) in such form and manner as may be prescribed.(4) For the purposes of subsection (1) the Secretary of State must by regulations—(a) specify a date as “the archive upload date”, and(b) specify a period beginning with that date as the “initial upload period”.(5) Regulations under this section are subject to the negative procedure.”Member’s explanatory statement
This amendment moves provision about the initial upload of information into the National Underground Asset Register into a new section to be inserted into Part 3A of the New Roads and Street Works Act 1991 (inserted by this clause).
Viscount Camrose
Member’s explanatory statement
This amendment makes clear that regulations under section 106B(1) of the New Roads and Street Works Act 1991 (inserted by this clause) may make provision for, as well as provision in connection with, making information kept in the National Underground Asset Register available.
Member’s explanatory statement
This amendment is consequential on the next amendment to this clause in my name.
“(h) make provision for or in connection with the granting of licences by the Secretary of State in relation to any non-Crown IP rights that may exist in relation to information made available (including provision about the form of a licence and the terms and conditions of a licence);(i) make provision for information to be made available for free or for a fee;(j) make provision about the amounts of the fees, including provision for the amount of a fee to be an amount which is intended to exceed the cost of the things in respect of which the fee is charged;(k) make provision about how funds raised by means of fees must or may be used, including provision for funds to be paid to persons who are required, by a provision of this Act, to enter information into NUAR.”Member’s explanatory statement
This amendment moves provision about licensing and the charging of fees under regulations under section 106B of the New Roads and Street Works Act 1991 (inserted by this clause) into subsection (2) of that section; and makes it clear that those regulations will only provide for licensing in relation to non-Crown rights.
Member’s explanatory statement
This amendment is consequential on the previous amendment to this clause in my name.
“(6) In this section—“database right” has the same meaning as in Part 3 of the Copyright and Rights in Databases Regulations 1997 (S.I. 1997/3032);“non-Crown IP right” means any copyright, database right or other intellectual property right which is not owned by the Crown.”Member’s explanatory statement
This amendment provides for definitions and is consequential on the amendment to this clause in my name making clear that regulations under section 106B of the New Roads and Street Works Act 1991 (inserted by this clause) will only provide for licensing in relation to non-Crown rights.
Viscount Camrose
Member’s explanatory statement
This amendment ensures that language used in paragraphs 2 and 3 of Schedule 5A to the New Roads and Street Works Act 1991 (inserted by this Schedule) is consistent.
Viscount Camrose
“(f) after subsection (3A) insert—“(3B) Except in such cases as may be prescribed, where an undertaker records information as required by subsection (1) or (1B), or updates such information, the undertaker must, within a prescribed period, enter the recorded or updated information into NUAR.(3C) Information must be entered into NUAR under subsection (3B) in such form and manner as may be prescribed.””Member’s explanatory statement
This amendment and the next amendment to this clause in my name are consequential on the amendment to clause 138 in my name moving provision about the initial upload of information into the National Underground Asset Register into a new section to be inserted into Part 3A of the New Roads and Street Works Act 1991 (inserted by clause 138).
“(h) after subsection (6) insert—“(7) For the meaning of “NUAR”, see section 106A.””Member’s explanatory statement
This amendment and the previous amendment to this clause in my name are consequential on the amendment to clause 138 in my name moving provision about the initial upload of information into the National Underground Asset Register into a new section to be inserted into Part 3A of the New Roads and Street Works Act 1991 (inserted by clause 138).
Baroness Kidron
“Evidence from computer records(1) In any proceedings, a statement containing information in a document produced by a computer is not to be admissible as evidence of any fact stated therein unless it is shown—(a) that there are no reasonable grounds for believing that the information contained in the statement is inaccurate because of improper use of the computer,(b) that at all material times the computer was operating properly, or if not, that any respect in which it was not operating properly or was out of operation was not such as to materially affect the production of the document or the accuracy of the information it contains, and(c) that any relevant conditions specified in rules of court under subsection (2) below are satisfied.(2) Provision may be made by rules of court requiring that in any proceedings where it is desired to give a statement in evidence by virtue of this section such information concerning the statement as may be required by the rules must be provided in such form and at such time as may be so required.”Member’s explanatory statement
This probing amendment reinstates the substantive provisions of section 69 of the Police and Criminal Evidence Act 1984. In light of the Post Office Horizon scandal, this would revoke the current assumption that the information provided by computers is always accurate.
Baroness Kidron (CB)
My Lords, Amendment 251 is also in the names of the noble Lords, Lord Arbuthnot and Lord Clement-Jones, and the noble Baroness, Lady Jones. I commend the noble Lord, Lord Arbuthnot, for his staunch support of the sub-postmasters over many years. I am grateful to him for adding his name to this amendment.
This amendment overturns a previous intervention in the law that has had and will continue to have far-reaching consequences if left in place: the notion that computer evidence should in law be presumed to be reliable. This error, made by the Government and the Law Commission at the turn of the century and reinforced by the courts over decades, has, as we now know, cost innocent people their reputations, their livelihoods and, in some cases, their lives.
Previously, Section 69 of the Police and Criminal Evidence Act 1984 required prosecutors in criminal cases relying on information from computers to confirm that the computer was operating correctly and could not have been tampered with before it submitted evidence. As the volume of evidence from computers increased, this requirement came to be viewed as burdensome.
In 1997, the Law Commission published a paper, Evidence in Criminal Proceedings: Hearsay and Related Topics, in which it concluded that Section 69
“fails to serve any useful purpose”.
As a result, it was repealed. The effect of this repeal was to create a common law presumption, in both criminal and civil proceedings, of the proper functioning of machines—that is to say, the computer is always right. In principle, there is a low threshold for rebutting this presumption but, in practice, as the Post Office prosecutions all too tragically show, a person challenging evidence derived from a computer will typically have no visibility of the system in question or the ways in which it could or did fail. As a result, they will not know what records of failures should be disclosed to them and might be asked for.
This situation was illustrated in the Post Office prosecution of sub-postmaster Mrs Seema Misra. Paul Marshall, Mrs Misra’s defence lawyer, describes how she was
“taunted by the prosecution for being unable to point to any … identifiable … problem”,
while they hid behind the presumption that the Horizon system was “reliable” under the law. On four occasions during her prosecution, Mrs Misra requested court order disclosure by the Post Office of Horizon error records. Three different judges dismissed her applications. Mrs Misra went to prison. She was eight weeks pregnant, and it was her son’s 10th birthday. On being sentenced, she collapsed.
The repeal of Section 69 of PACE 1984 reflects the Law Commission’s flawed belief that most computer errors were “down to the operator” or “apparent to the operator”, and that you could
“take as read that computer evidence is reliable unless a person can say otherwise”.
In the words of a colleague of mine from the University of Oxford, a professor of computing with a side consultancy specialising in finding bugs for global tech firms ahead of rollout, this assumption is “eye-wateringly mistaken”. He recently wrote to me and said:
“I have been asking fellow computer scientists for evidence that computers make mistakes, and have found that they are bewildered at the question since it is self-evident”.
There is an injustice in being told that a machine will always work as expected, and a further injustice in being told that the only way you can prove that it does not work is to ask by name for something that you do not know exists. That is to say, Mrs Misra did not have the magic word.
In discussions, the Government assert that the harm caused by Horizon was due to the egregious failures of corporate governance at the Post Office. That there has been a historic miscarriage of justice is beyond question, and the outcome is urgently awaited. But the actions of the Post Office were made possible in part because of a flaw in our legal and judicial processes. What happened at the Post Office is not an isolated incident but potentially the tip of an iceberg, where the safety of an unknown number of criminal convictions and civil judgments is called into question.
For example, the Educational Testing Service, an online test commissioned by the Home Office, wrongly determined that 97% of English language students were cheating, a determination that cost the students their right to stay in the UK and/or their ability to graduate, forfeiting thousands of pounds in student fees. The Guardian conducted interviews with dozens of the students, who described the painful consequences. One man was held in UK immigration detention centres for 11 months. Others described being forced into destitution, becoming homeless and reliant on food banks as they attempted to challenge the accusation. Others became depressed and suicidal when confronted with the wasted tuition fees and the difficulty of shaking off an allegation of dishonesty.
The widespread coverage of the Horizon scandal has made many victims of the Home Office scandal renew their efforts to clear their names and seek redress. In another case, at the Princess of Wales Hospital in 2012, nurses were wrongly accused of falsifying patient records because of discrepancies found with computer records. Some of the nurses were subjected to criminal prosecution, suffering years of legal action before the trial collapsed, when it emerged that a visit by an engineer to fix a bug had eradicated all the data that the nurses were accused of failing to gather. That vital piece of information could easily have been discovered and disclosed, if computer evidence was not automatically deemed to be reliable.
Lord Arbuthnot of Edrom (Con)
My Lords, I congratulate the noble Baroness, Lady Kidron, on her amendment and thank her for allowing me to add my name to it. I agree with what she said. I, too, had the benefit of a meeting with the Lord Chancellor, which was most helpful. I am grateful to Mr Paul Marshall—whom the noble Baroness mentioned and who has represented several sub-postmasters in the Horizon scandal—for his help and advice in this matter.
My first short point is that evidence derived from a computer is hearsay. There is good reason for treating hearsay evidence with caution. Computer scientists know—although the general public do not—that only the smallest and least complex computer programs can be tested exhaustively. I am told that the limit for that testing is probably around 100 lines of a well-designed and carefully written program. Horizon, which Mr Justice Fraser said was not in the least robust, consisted of a suite of programs involving millions of lines of code. It will inevitably have contained thousands of errors because all computer programs do. Most computer errors do not routinely cause malfunctions. If they did, they would be spotted at an early stage and the program would be changed—but potentially with consequential changes to the program that might not be intended or spotted.
We are all aware of how frequently we are invited to accept software updates from our mobile telephone’s software manufacturers. Those updates are not limited to security chinks but are also required because bugs—or, as we learned yesterday from Paula Vennells’s husband, anomalies and exceptions—are inevitable in computer programs. That is why Fujitsu had an office dedicated not just to altering the sub-postmasters’ balances, shocking as that is, but to altering and amending a program that was never going to be perfect because no computer program is.
The only conclusion that one can draw from all this is that computer programs are, as the noble Baroness said, inherently unreliable, such that having a presumption in law that they are reliable is unsustainable. In the case of the DPP v McKeown and Jones—in 1997, I think—Lord Hoffmann said:
“It is notorious that one needs no expertise in electronics to be able to know whether a computer is working properly”.
One must always hesitate before questioning the wisdom of a man as clever as Lord Hoffmann, but he was wrong. The notoriety now attaches to his comment.
The consequences of the repeal of Section 69 of the Police and Criminal Evidence Act 1984 have been that it reduces the burden of proof, so that Seema Misra was sent to prison in the circumstances set out by the noble Baroness. Further, this matter is urgent for two reasons; they slightly conflict with each other, but I will nevertheless set them out. The first is that for the presumption to remain in place for one minute longer means that there is a genuine risk that miscarriages of justice will continue to occur in other non-Post Office cases, from as early as tomorrow. The second is that any defence lawyer will, in any event, be treating the presumption as having been fatally undermined by the Horizon issues. The presumption will therefore be questioned in every court where it might otherwise apply. It needs consideration by Parliament.
My noble friend the Minister will say, and he will be right, that the Horizon case was a disgraceful failure of disclosure by the Post Office. But it was permitted by the presumption of the correctness of computer evidence, which I hope we have shown is unsustainable. Part of the solution to the problem may lie in changes to disclosure and discovery, but we cannot permit a presumption that we know to be unfounded to continue in law.
My noble friend may also go on to say that our amendment is flawed in that it will place impossible burdens on prosecutors, requiring them to get constant certificates of proper working from Microsoft, Google, WhatsApp, and whatever Twitter is called nowadays. Again, he may be right. We do not seek to bring prosecutions grinding to a halt, nor do we seek to question the underlying integrity of our email or communications systems, so we may need another way through this problem. Luckily, my noble friend is a very clever man, and I look forward to hearing what he proposes.
Lord Clement-Jones (LD)
My Lords, we have heard two extremely powerful speeches; I will follow in their wake but be very brief. For many years now, I campaigned on amending the Computer Misuse Act; the noble Lord, Lord Arbuthnot, did similarly. My motivation did not start with the Horizon scandal, but was more at large because of the underlying concerns about the nature of computer evidence.
I came rather late to this understanding about the presumption of the accuracy of computer evidence. It is somewhat horrifying, the more you look into the history of this, which has been so well set out by the noble Baroness, Lady Kidron. I remember advising MPs at the time about the Police and Criminal Evidence Act. I was not really aware of what the Law Commission had recommended in terms of getting rid of Section 69, or indeed what the Youth Justice and Criminal Evidence Act did in 1999, a year after I came into this House.
The noble Baroness has set out the history of it, and how badly wrong the Law Commission got this. She set out extremely well the impact and illustration of Mrs Misra’s case, the injustice that has resulted through the Horizon cases—indeed, not just through those cases, but through other areas—and the whole aspect of the reliability of computer evidence. Likewise, we must all pay tribute to the tireless campaigning of the noble Lord, Lord Arbuthnot. I thought it was really interesting how he described computer evidence as hearsay, because that essentially is what it is, and there is the whole issue of updates and bug fixing.
The one area that I am slightly uncertain about after listening to the debate and having read some of the background to this is precisely what impact Mr Justice Fraser’s judgment had. Some people seem to have taken it as simply saying that the computer evidence was unreliable, but that it was a one-off. It seems to me that it was much more sweeping than that and was really a rebuttal of the original view the Law Commission took on the reliability of computer evidence.
Lord Leong (Lab)
My Lords, I support this probing amendment, Amendment 251. I thank all noble Lords who have spoken. From this side of the Committee, I say how grateful we are to the noble Lord, Lord Arbuthnot, for all that he has done and continues to do in his campaign to find justice for those sub-postmasters who have been wronged by the system.
This amendment seeks to reinstate the substantive provisions of Section 69 of PACE, the Police and Criminal Evidence Act 1984, revoking this dangerous assumption. I would like to imagine that legislators in 1984 were perhaps alert to the warning in George Orwell’s novel Nineteen Eighty-Four, written some 40 years earlier, about relying on an apparently infallible but ultimately corruptible technological system to define the truth. The Horizon scandal is, of course, the most glaring example of the dangers of assuming that computers are always right. Sadly, as hundreds of sub-postmasters have known for years, and as the wider public have more recently become aware, computer systems can be horribly inaccurate.
However, the Horizon system is very primitive compared to some of the programs which now process billions of pieces of our sensitive data every day. The AI revolution, which has already begun, will exponentially accelerate the risk of compounded errors being multiplied. To take just one example, some noble Lords may be aware of the concept of AI hallucinations. This is a term used to describe when computer models make inaccurate predictions based on seeing incorrect patterns in data, which may be caused by incomplete, biased or simply poor-quality inputs. In an earlier debate, the noble Viscount, Lord Younger of Leckie, said that account information notices will be decided. How will these decisions be made? Will they be made by individual human beings or by some AI-configured algorithms? Can the Minister share with us how such decisions will be taken?
Humans can look at clouds in the sky or outlines on the hillside and see patterns that look like faces, animals or symbols, but ultimately we know that we are looking at water vapour or rock formations. Computer systems do not necessarily have this innate common sense—this reality check. Increasingly, we will depend on computer systems talking to each other without any human intervention. This will deliver some great efficiencies, but it could lead to greater injustices on a scale which would terrify even the most dystopian science fiction writers. The noble Baroness, Lady Kidron, has already shared with us some of the cases where a computer has made errors and people have been wronged.
Amendment 251 would reintroduce the opportunity for some healthy human scepticism by enabling the investigation of whether there are reasonable grounds for questioning information in documents produced by a computer. The digital world of 2024 depends more on computers than the world of Nineteen Eighty-Four in actual legislation or in an Orwellian fiction. Amendment 251 enables ordinary people to question whether our modern “Big Brother” artificial intelligence is telling the truth when he or it is watching us. I look forward to the Minister’s responses to all the various questions and on the current assumption in law that information provided by the computer is always accurate.
Viscount Camrose (Con)
My Lords, I recognise the feeling of the Committee on this issue and, frankly, I recognise the feeling of the whole country with respect to Horizon. I thank all those who have spoken for a really enlightening debate. I thank the noble Baroness, Lady Kidron, for tabling the amendment and my noble friend Lord Arbuthnot for speaking to it and—if I may depart from the script—his heroic behaviour with respect to the sub-postmasters.
There can be no doubt that hundreds of innocent sub-postmasters and sub-postmistresses have suffered an intolerable miscarriage of justice at the hands of the Post Office. I hope noble Lords will indulge me if I speak very briefly on that. On 13 March, the Government introduced the Post Office (Horizon System) Offences Bill into Parliament, which is due to go before a Committee of the whole House in the House of Commons on 29 April. The Bill will quash relevant convictions of individuals who worked, including on a voluntary basis, in Post Office branches and who have suffered as a result of the Post Office Horizon IT scandal. It will quash, on a blanket basis, convictions for various theft, fraud and related offences during the period of the Horizon scandal in England, Wales and Northern Ireland. This is to be followed by swift financial redress delivered by the Department for Business and Trade.
On the amendment laid by the noble Baroness, Lady Kidron—I thank her and the noble Lords who have supported it—I fully understand the intent behind this amendment, which aims to address issues with computer evidence such as those arising from the Post Office cases. The common law presumption, as has been said, is that the computer which has produced evidence in a case was operating effectively at the material time unless there is evidence to the contrary, in which case the party relying on the computer evidence will need to satisfy the court that the evidence is reliable and therefore admissible.
This amendment would require a party relying on computer evidence to provide proof up front that the computer was operating effectively at the time and that there is no evidence of improper use. I and my fellow Ministers, including those at the MoJ, understand the intent behind this amendment, and we are considering very carefully the issues raised by the Post Office cases in relation to computer evidence, including these wider concerns. So I would welcome the opportunity for further meetings with the noble Baroness, alongside MoJ colleagues. I was pleased to hear that she had met with my right honourable friend the Lord Chancellor on this matter.
We are considering, for example, the way reliability of evidence from the Horizon system was presented, how failures of investigation and disclosure prevented that evidence from being effectively challenged, and the lack of corroborating evidence in many cases. These issues need to be considered carefully, with the full facts in front of us. Sir Wyn Williams is examining in detail the failings that led to the Post Office scandal. These issues are not straightforward. The prosecution of those cases relied on assertions that the Horizon system was accurate and reliable, which the Post Office knew to be wrong. This was supported by expert evidence, which it knew to be misleading. The issue was that the Post Office chose to withhold the fact that the computer evidence itself was wrong.
This amendment would also have a significant impact on the criminal justice system. Almost all criminal cases rely on computer evidence to some extent, so any change to the burden of proof would or could impede the work of the Crown Prosecution Service and other prosecutors.
Although I am not able to accept this amendment for these reasons, I share the desire to find an appropriate way forward along with my colleagues at the Ministry of Justice, who will bear the brunt of this work, as the noble Lord, Lord Clement-Jones, alluded to. I look forward to meeting the noble Baroness to discuss this ahead of Report. Meanwhile, I hope she will withdraw her amendment.
Lord Clement-Jones (LD)
Can the Minister pass on the following suggestion? Paul Marshall, who has been mentioned by all of us, is absolutely au fait with the exact procedure. He has experience of how it has worked in practice, and he has made some constructive suggestions. If there is not a full return to Section 69, there could be other, more nuanced, ways of doing this, meeting the Minister’s objections. But can I suggest that the MoJ has contact with him and discusses what the best way forward would be? He has been writing about this for some years now, and it would be extremely useful, if the MoJ has not already engaged with him, to do so.
Viscount Camrose (Con)
It may have already done so, but I will certainly pass that on.
Baroness Kidron (CB)
I thank everyone who spoke and the Minister for the offer of a meeting alongside his colleagues from the MoJ. I believe he will have a very busy diary between Committee and Report, based on the number of meetings we have agreed to.
However, I want to be very clear here. We have all recognised that the story of the Post Office sub-postmasters makes this issue clear, but it is not about the sub-postmasters. I commend the Government for what they are doing. We await the inquiry with urgent interest, and I am sure I speak for everyone in wishing the sub-postmasters a fair settlement—that is not in question. What is in question is the fact that we do not have unlimited Lord Arbuthnots to be heroic about all the other things that are about to happen. I took it seriously when he said not one moment longer: it could be tomorrow.
Viscount Camrose
“(3A) In section 205(2) (references to periods of time)—(a) omit paragraph (l), and(b) after that paragraph insert—“(la) paragraph 22(6) of Schedule 12A;”Member’s explanatory statement
This amendment provides that Article 3 of Regulation No 1182/71 (rules of interpretation regarding periods of time etc) does not apply to paragraph 22(6) of Schedule 12A to the Data Protection Act 2018 (inserted by Schedule 15 to the Bill).
Lord Clement-Jones
Lord Clement-Jones (LD)
My Lords, I am afraid that I will speak to every single one of the amendments in this group but one, which is in the name of the noble Baroness, Lady Jones, and I have signed it. We have already debated the Secretary of State’s powers in relation to what will be the commission, in setting strategic priorities for the commissioner under Clause 32 and recommending the adoption of the ICAO code of practice before it is submitted to Parliament for consideration under Clause 33:
“Codes of practice for processing personal data”.
We have also debated Clause 34:
“Codes of practice: panels and impact assessments”.
And we have debated Clause 35:
“Codes of Practice: Secretary of States recommendations”.
The Secretary of State has considerable power in relation to the new commission, and then on top of that Clause 143 and Schedule 15 to the Bill provide significant other powers for the Secretary of State to interfere with the objective and impartial functioning of the information commission by the appointment of non-executive members of the newly formed commission. The guarantee of the independence of the ICO is intended to ensure the effectiveness and reliability of its regulatory function and that the monitoring and enforcement of data protection laws are carried out objectively and free from partisan or extra-legal considerations.
These amendments would limit the Secretary of State’s powers and leeway to interfere with the objective and impartial functioning of the new information commission, in particular by modifying Schedule 15 to the Bill to transfer budget responsibility and the appointment process of the non-executive members of the information commission to the relevant Select Committee. If so amended, the Bill would ensure that the new information commission has sufficient arm’s-length distance from the Government to oversee public and private bodies’ uses of personal data with impartiality and objectivity. DSIT’s delegated powers memorandum to the DPRRC barely mentions any of these powers, yet they are of considerable importance. Therefore, I am not surprised that there was no mention of them, but they are very significant.
We have discussed data adequacy before; of course, in his letter to us, the Minister tried to rebut some of the points we made about it. In fact, he quoted somebody who has briefed me extensively on it and has taken a very different view to the one he alleges she took in a rather partial quotation from evidence taken by the European Affairs Committee, which is now conducting an inquiry into data adequacy and its implications for the UK-EU relationship. We were told by Open Rights Group attendees at a recent meeting with the European Commission that it expressed concern to those present about the risk that the Bill poses to the EU adequacy agreement; this was not under Chatham House rules. It expressed this risk in a meeting at which a number of UK groups were present, which is highly significant in itself.
I mentioned the European Affairs Committee’s inquiry. I understand that the European Parliament’s Committee on Civil Liberties, Justice and Home Affairs has also given written evidence on its concerns about this Bill, its impact on adequacy and how it could impact the agreement. It put its arguments rather strongly. Has the Minister seen this? Is he aware of the written evidence that it has given to the European Affairs Select Committee? I suggest that he becomes aware of it and takes a view on whether we need to postpone Report until we have seen the European Affairs Select Committee’s report. If it comes to the conclusion that data adequacy is at risk, the Government will have to go back to the drawing board in a number of respects on this Bill. If the Select Committee report comes out and says that the impact of the Bill will not be data adequate, it would be rather foolish if we had already gone through Report by that time. Far be it from me not to want the Government to have egg on their face but it would be peculiar if they did not carefully observe the evidence being put to the European Affairs Select Committee and the progress that it is making in its inquiry. I beg to move.
Baroness Jones of Whitchurch (Lab)
My Lords, I thank the noble Lord, Lord Clement-Jones, for introducing his amendments so ably. When I read them, I had a strong sense of déjà vu as attempts by the Government to control the appointments and functioning of new regulators have been a common theme in other pieces of legislation that we have debated in the House and which we have always resisted. In my experience, this occurred most recently in the Government’s proposals for the Office for Environmental Protection, which was dealing with EU legislation being taken into by the UK and is effectively the environment regulator. We were able to get those proposals modified to limit the Secretary of State’s involvement; we should do so again here.
I very much welcome the noble Lord’s amendments, which give us a chance to assess what level of independence would be appropriate in this case. Schedule 15 covers the transition from the Information Commissioner’s Office to the appointment of the chair and non-executive members of the new information commission. We support this development in principle but it is crucial that the new arrangements strengthen rather than weaken the independence of the new commission.
The noble Lord’s amendments would rightly remove the rights of the Secretary of State to decide the number of non-executive members and to appoint them. Instead, his amendments propose that the chair of the relevant parliamentary committee should oversee appointments. Similarly, the amendments would remove the right of the Secretary of State to recommend the appointment and removal of the chair; again, this should be passed to the relevant parliamentary committee. We agree with these proposals, which would build in an additional tier of parliamentary oversight and help remove any suspicion that the Secretary of State is exercising unwarranted political pressure on the new commission.
The noble Lord’s amendments beg the question of what the relevant parliamentary committee might be. Although we are supportive of the wording as it stands, it is regrettable that we have not been able to make more progress on establishing a strong bicameral parliamentary committee to oversee the work of the information commission. However, in the absence of such a committee, we welcome the suggestion made in the noble Lord’s Amendment 256 that the Commons Science, Innovation and Technology Committee could fulfil that role.
Finally, we have tabled Amendment 259, which addresses what is commonly known as the “revolving door” whereby public sector staff switch to jobs in the private sector and end up working for industries that they were supposedly investigating and regulating previously. This leads to accusations of cronyism and corruption; whether or not there is any evidence of this, it brings the reputation of the whole sector into disrepute. Perhaps I should have declared an interest at the outset: I am a member of the Advisory Committee on Business Appointments and therefore have a ringside view of the scale of the revolving door taking place, particularly at the moment. We believe that it is time to put standards in public life back at the heart of public service; setting new standards on switching sides should be part of that. Our amendment would put a two-year ban on members of the information commission accepting employment from a business that was subject to enforcement action or acting for persons who are being investigated by the agency.
I hope that noble Lords will see the sense and importance of these amendments. I look forward to the Minister’s response.
Lord Harlech (Con)
My Lords, I thank the noble Lord, Lord Clement-Jones, and the noble Baroness, Lady Jones of Whitchurch, for their amendments to Schedule 15 to the Bill, which sets out the governance structure of the new information commission.
The ICO governance reforms ensure its accountability to Parliament. Before I go any further, let me stress that the Government are committed to the ICO’s ongoing independence. We have worked closely with the Information Commissioner, who is supportive of the reforms, which they state allow the ICO
“to continue to operate as a trusted, fair and independent regulator”.
The Government’s view, therefore, is that this Bill is compatible with maintaining the free flow of personal data from Europe. These reforms have been designed carefully with appropriate safeguards in place to protect the information commission’s independence and ensure accountability before Parliament on important issues such as public appointments, money and accounts.
The Bill requires the Secretary of State to give the member a written statement of reasons for the removal and make public the decision to do so, ensuring accountability and transparency. This process is in line with standard practice for other UK regulators, such as Ofcom, which do not require parliamentary oversight for the removal of non-executives.
The chair can be removed only by His Majesty on an Address by both Houses, provided that the Secretary of State presents a report in Parliament stating that they are satisfied that there are serious grounds for removal, as set out in the Bill. This follows the process for the removal of the current Information Commissioner.
Greater performance measurement will help the ICO achieve its objectives and enable it to adjust its resources to prioritise key areas of work. This will also increase accountability to Parliament—a point raised by both noble Lords—organisations and the public, who have an interest in its effectiveness.
The Government are satisfied that these processes safeguard the integrity of the regulator, are in line with best practices for other regulators and, crucially, balance the importance of the information commission’s independence with appropriate oversight by the Government and Parliament as necessary. The regulator is, and remains, accountable to Parliament, not the Government, in its delivery of data protection regulation.
Lord Clement-Jones (LD)
My Lords, I thank the Minister for his response, dusty though it may have been. The noble Baroness, Lady Jones, is absolutely right; this Government have form in all areas of regulation. In every area where we have had legislation related to a regulator coming down the track, the Government have taken more power on and diminished parliamentary oversight rather than enhancing it.
It is therefore a little rich to say that accountability to Parliament is the essence of all this. That is not the impression one gets reading the data protection Bill; the impression you get is that the Government are tightening the screw on the regulator. That was the case with Ofcom in the Online Safety Act; it is the case with the CMA; the noble Baroness, Lady Jones, mentioned her experience as regards the environment. Wherever you look, the Government are tightening their control over the regulators. It is something the Industry and Regulators Committee has been concerned about. We have tried to suggest various formulae. A Joint Committee of both Houses was proposed by the Communications and Digital Committee; it has been endorsed by a number of other committees, such as the Joint Committee on the Draft Online Safety Bill, and I think it has even been commended by the Industry and Regulators Committee as well in that respect.
We need to crack this one. On the issue of parliamentary accountability for the regulator and oversight, the balance is not currently right. That applies particularly in terms of appointments, in this case of the commissioner and the non-executives. The Minister very conveniently talked about removal but this could be about renewal of term, and it is certainly about appointment. So maybe the Minister was a little bit selective with the example he chose to say where the control was.
We are concerned about the independence of the regulator. The Minister did not give an answer, so I hope that he will write about whether he knows what the European Affairs Select Committee is up to. I made a bit of a case on that. Evidence is coming in, and the relevant committee in the European Parliament is giving evidence. The Minister, the noble Viscount, Lord Camrose, was guilty of this in a way, but the way that the data adequacy aspect is seen from this side of the North Sea seems rather selective. The Government need to try to try to put themselves in the position of the Commission and the Parliament on the other side of the North Sea and ask, “What do we think are the factors that will endanger our data adequacy as seen from that side?” The Government are being overly complacent in regarding it as “safe” once the Bill goes through.
It was very interesting to hear what the noble Baroness had to say about the revolving door issues. The notable thing about this amendment is how limited it is; it is not blanket. It would be entirely appropriate to have this in legislation, given the sensitivity of the roles that are carried out by senior people at the ICO.
However, I think we want to make more progress tonight, so I beg leave to withdraw my amendment.
Viscount Camrose
“Supplementary powers
23A The Commission may do anything it thinks appropriate for the purposes of, or in connection with, its functions.”Member’s explanatory statement
This amendment makes clear that the Information Commission has power to do things to facilitate the exercise of its functions.
Viscount Camrose
“(3) For the purposes of paragraph 7(3) of Schedule 12A to the 2018 Act (extension of chair’s term), the term of the person’s appointment as chair of the Information Commission is to be treated as a term beginning when the person began to hold the office of Information Commissioner.”Member’s explanatory statement
This amendment ensures that provision limiting the extension of a person’s term of appointment as chair of the Information Commission (in paragraph 7 of new Schedule 12A to the Data Protection Act 2018, read with section 205(2) of that Act) applies in the same manner to the transitional appointment of the current Information Commissioner as chair.
Baroness Kidron
“Offence to use personal data or digital information to create digital models or files that facilitate the creation of AI or computer generated child sexual abuse material(1) A person commits an offence if they—(a) collect, scrape, possess, distribute or otherwise process personal data or digital information with the intention of using it, or attempting to use it, to create or train a digital model which enables the creation of AI or computer generated child sexual abuse material or priority illegal content; (b) use personal data or digital information to create, train or distribute or attempt to create, train or distribute a digital file or model that has been trained on child sexual abuse material or priority illegal content, or which enables the creation of artificial intelligence or computer generated child sexual abuse material or priority illegal content;(c) collate, or attempt to collate, digital files or models based on personal data or digital information that, when combined, enable the creation of AI or computer generated child sexual abuse material or priority illegal content;(d) possess, or attempt to possess, a digital file or model based on personal data or digital information with the intention of using it to produce or gain access to AI or computer generated child sexual abuse material or priority illegal content.(2) For the purposes of this section, “artificial intelligence or computer generated child sexual abuse material or primary priority illegal content” includes images, videos, audio including voice, chatbots, material generated by large language models, written text, computer file and avatars.(3) A person who commits an offence under subsection (1) is liable to the sentences set out in section 160 of the Criminal Justice Act 1988 and section 6 of the Protection of Children Act 1978 for the equivalent offences.(4) For the purposes of this section, “priority illegal content” is content that meets the definition of “priority illegal content” set out in section 59 of the Online Safety Act 2023.”Member’s explanatory statement
This amendment seeks to make the files trained on or trained to create “Child Sex Abuse Material” illegal.
Baroness Kidron (CB)
My Lords, I rise somewhat reluctantly to speak to Amendment 291 in my name. It could hardly be more important or necessary, but I am reluctant because I really think that the Minister, alongside his colleagues in DSIT and the Home Office, should have taken this issue up. I am quite taken aback that, despite my repeated efforts with both of those departments, they have not done so.
The purpose of the amendment is simple. It is already illegal in the UK to possess or distribute child sexual abuse material, including AI-generated or computer-generated child sexual abuse material. However, while the content is clearly covered by existing law, the mechanism that enables its creation—the files trained on or trained to create child sexual abuse material—is not. This amendment closes that gap.
Some time ago, I hosted an event at which members of OCCIT—the online child sexual exploitation and abuse covert intelligence team—gave a presentation to parliamentarians. For context, OCCIT is a law enforcement unit of the National Police Chiefs’ Council that uses covert police tactics to track down offender behaviour, with a view to identifying emerging risks in the form of new technologies, behaviours and environments. The presentation its officers gave concerned AI-generated abuse scenarios in virtual reality, and it was absolutely shattering for almost everyone who was present.
A few weeks later, the team contacted me and said that what it had showed then was already out of date. What it was now seeing was being supercharged by the ease with which criminals can train models that, when combined with general-purpose image-creation software, enable those with a sexual interest in children to generate CSAM images and videos at volume and—importantly—to order. Those building and distributing this software were operating with impunity, because current laws are insufficient to enable the police to take action against them.
In the scenarios that they are now facing, a picture of any child can be blended with existing child sexual abuse imagery, pornography or violent sexual scenarios. Images of several children can be honed into a fictitious child and used similarly or, as I will return to in a moment, a picture of an adult can be made to look younger and then used to create child sexual abuse. Among this catalogue of horrors are the made-to-order models trained using images of a child known to the perpetrator—a neighbour’s child or a family member—to create bespoke CSAM content. In short, the police were finding that the scale, sophistication and horror of violent child sexual abuse had hit a new level.
The laws that the police use to enforce against CSAM are Section 1 of the Protection of Children Act 1978 and Section 160 of the Criminal Justice Act 1988, both of which create offences in respect of indecent photographs or pseudophotographs of a child. AI content depicting child sexual abuse in the scenarios that I have just described is also illegal under the law, but creating and distributing the software models needed to generate them is not.
There are many services that allow anyone to take any public image and put it in a false situation. Although I have argued elsewhere that AI images should carry a mark of provenance, these services are not the subject of this amendment. This amendment is laser focused on criminalising AI models that are trained on or trained to create child sexual abuse material. They are specific, specialist and being traded with impunity. These models blend images of children—known children, stock photos, images scraped from social media or synthetic, fabricated AI depictions of children—with existing CSAM or pornography, and they allow paedophiles to generate bespoke CSAM scenarios.
Lord Clement-Jones (LD)
My Lords, as ever, the noble Baroness, Lady Kidron, has nailed this issue. She has campaigned tirelessly in the field of child sexual abuse and has identified a major loophole.
What has been so important is learning from experience and seeing how these new generative AI models, which we have all been having to come to terms with them for the past 18 months, are so powerful in the hands of ordinary people who want to cause harm and sexual abuse. The important thing is that, under existing legislation, there are of course a number of provisions relating to creating deepfake child pornography, the circulation of pornographic deepfakes and so on. However, as the noble Baroness said, what the legislation does not do is go upstream to the AI system—the AI model itself—to make sure that those who develop those models are caught as well. That is what a lot of the discussion around deepfakes is about at the moment—it is, I would say, the most pressing issue—but it is also about trying to nail those AI system owners and users at the very outset, not waiting until something is circulated or, indeed, created in the first place. We need to get right up there at the outset.
I very much support what the noble Baroness said; I will reserve any other remarks for the next group of amendments.
Baroness Jones of Whitchurch (Lab)
My Lords, I am pleased that we were able to sign this amendment. Once again, the noble Baroness, Lady Kidron, has demonstrated her acute ability to dissect and to make a brilliant argument about why an amendment is so important.
As the noble Lord, Lord Clement-Jones, and others have said previously, what is the point of this Bill? Passing this amendment and putting these new offences on the statute book would give the Bill the purpose and clout that it has so far lacked. As the noble Baroness, Lady Kidron, has made clear, although it is currently an offence to possess or distribute child sex abuse material, it is not an offence to create these images artificially using AI techniques. So, quite innocent images of a child—or even an adult—can be manipulated to create child sex abuse imagery, pornography and degrading or violent scenarios. As the noble Baroness pointed out, this could be your child or a neighbour’s child being depicted for sexual gratification by the increasingly sophisticated AI creators of these digital models or files.
Yesterday’s report from the Internet Watch Foundation said that a manual found on the dark web encourages “nudifying” tools to remove clothes from child images, which can then be used to blackmail them into sending more graphic content. The IWF reports that the scale of this abuse is increasing year on year, with 275,000 web pages containing child sex abuse being found last year; I suspect that this is the tip of the iceberg as much of this activity is occurring on the dark web, which is very difficult to track. The noble Baroness, Lady Kidron, made a powerful point: there is a danger that access to such materials will also encourage offenders who then want to participate in real-world child sex abuse, so the scale of the horror could be multiplied. There are many reasons why these trends are shocking and abhorrent. It seems that, as ever, the offenders are one step ahead of the legislation needed for police enforcers to close down this trade.
As the noble Baroness, Lady Kidron, made clear, this amendment is “laser focused” on criminalising those who are developing and using AI to create these images. I am pleased to say that Labour is already working on a ban on creating so-called nudification tools. The prevalence of deepfakes and child abuse on the internet is increasing the public’s fear of the overall safety of AI, so we need to win their trust back if we are to harness the undoubted benefits that it can deliver to our public services and economy. Tackling this area is one step towards that.
Action to regulate AI by requiring transparency and safety reports from all those at the forefront of AI development should be a key part of that strategy, but we have a particular task to do here. In the meantime, this amendment is an opportunity for the Government to take a lead on these very specific proposals to help clean up the web and rid us of these vile crimes. I hope the Minister can confirm that this amendment, or a government amendment along the same lines, will be included in the Bill. I look forward to his response.
Viscount Camrose (Con)
I thank the noble Baroness, Lady Kidron, for tabling Amendment 291, which would create several new criminal offences relating to the use of AI to collect, collate and distribute child abuse images or to possess such images after they have been created. Nobody can dispute the intention behind this amendment.
We recognise the importance of this area. We will continue to assess whether and what new offences are needed to further bolster the legislation relating to child sexual abuse and AI, as part of our wider ongoing review of how our laws need to adapt to AI risks and opportunities. We need to get the answers to these complex questions right, and we need to ensure that we are equipping law enforcement with the capabilities and the powers needed to combat child sexual abuse. Perhaps, when I meet the noble Baroness, Lady Kidron, on the previous group, we can also discuss this important matter.
However, for now, I reassure noble Lords that any child sex abuse material, whether AI generated or not, is already illegal in the UK, as has been said. The criminal law is comprehensive with regard to the production and distribution of this material. For example, it is already an offence to produce, store or share any material that contains or depicts child sexual abuse, regardless of whether the material depicts a real child or not. This prohibition includes AI-generated child sexual abuse material and other pseudo imagery that may have been AI or computer generated.
We are committed to bringing to justice offenders who deliberately misuse AI to generate child sexual abuse material. We demonstrated this as part of the road to the AI Safety Summit, where we secured agreement from NGO, industry and international partners to take action to tackle AI-enabled child sexual abuse. The strongest protections in the Online Safety Act are for children, and all companies in scope of the legislation will need to tackle child sexual abuse material as a priority. Applications that use artificial intelligence will not be exempt and must incorporate robust guard-rails and safety measures to ensure that AI models and technology cannot be manipulated for child sexual abuse purposes.
Furthermore, I reassure noble Lords that the offence of taking, making, distributing and possessing with a view to distribution any indecent photograph or pseudophotograph of a child under the age of 18 carries a maximum sentence of 10 years’ imprisonment. Possession alone of indecent photographs or pseudophotographs of children can carry a maximum sentence of up to five years’ imprisonment.
However, I am not able to accept the amendment, as the current drafting would capture legitimate AI models that have been deliberately misused by offenders without the knowledge or intent of their creators to produce child sexual abuse material. It would also inadvertently criminalise individual users who possess perfectly legal digital files with no criminal intent, due to the fact that they could, when combined, enable the creation of child sexual abuse material.
I therefore ask the noble Baroness to withdraw the amendment, while recognising the strength of feeling and the strong arguments made on this issue and reiterating my offer to meet with her to discuss this ahead of Report.
Baroness Kidron (CB)
I do not know how to express in parliamentary terms the depth of my disappointment, so I will leave that. Whoever helped the noble Viscount draft his response should be ashamed. We do not have a comprehensive system and the police do not have the capability; they came to me after months of trying to get the Home Office to act, so that is an untruth: the police do not have the capability.
I remind the noble Viscount that in previous debates his response on the bigger picture of AI has been to wait and see, but this is a here and now problem. As the noble Baroness, Lady Jones, set out, this would give purpose and reason—and here it is in front of us; we can act.
Lord Clement-Jones
“Deepfakes depicting sexual offences or activity without consent(1) It is an offence for a person to intentionally create, alter, or otherwise generate a deepfake depicting an intimate act. (2) A person is not guilty of an offence by virtue of subsection (1) if they show the person or persons, being over the age of 18, depicted in the deepfake provided consent for the creation, alteration or generation of the deepfake.(3) Offences under this section are punishable either on conviction on indictment or on summary conviction.(4) A person convicted on indictment of an offence under this section is liable to imprisonment for a term of not more than ten years, or to a fine not exceeding the prescribed sum for the purposes of this Act or to both.(5) A person convicted summarily of an offence under this section is liable—(a) to imprisonment for a term not exceeding six months; or(b) to a fine not exceeding the prescribed sum for the purposes of this Act.(6) The Secretary of State must by regulations prescribe the sum for the purposes subsections (4) and (5).(7) Regulations made under subsection (6) are subject to the affirmative procedure.”Member's explanatory statement
This amendment would make it an offence to intentionally generate a deepfake depicting activity without consent.
Lord Clement-Jones (LD)
My Lords, I will speak to all the amendments in this group, other than Amendment 295 from the noble Baroness, Lady Jones. Without stealing her thunder, I very much support it, especially in an election year and in the light of the deepfakes we have already seen in the political arena—those of Sadiq Khan, those used in the Slovakian election and the audio deepfakes of the President of the US and Sir Keir Starmer. This is a real issue and I am delighted that she has put down this amendment, which I have signed.
In another part of the forest, the recent spread of deepfake photos purporting to show Taylor Swift engaged in explicit acts has brought new attention to the use, which has been growing in recent years, of deepfake images, video and audio to harass women and commit fraud. Women constitute 99% of the victims and the most visited deepfake site had 111 million users in October 2023. More recently, children have been found using “declothing” apps, which I think the noble Baroness mentioned, to create explicit deepfakes of other children.
Deepfakes also present a growing threat to elections and democracy, as I have mentioned, and the problems are increasingly rampant. Deepfake fraud rates rose by 3,000% globally in 2023, and it is hardly surprising that, in recent polling, 86% of the UK population supported a ban on deepfakes. I believe that the public are demanding an urgent solution to this problem. The only effective way to stop deepfakes, which is analogous to what the noble Baroness, Lady Kidron, has been so passionately advocating, is for the Government to ban them at every stage, from production to distribution. Legal liability must hold to account those who produce deepfake technology, create and enable deepfake content, and facilitate its spread.
Existing legislation seeks to limit the spread of images on social media, but this is not enough. The recent images of Taylor Swift were removed from X and Telegram, but not before one picture had been viewed more than 47 million times. Digital watermarks are not a solution, as shown by a paper by world-leading Al researchers released in 2023, which concluded that
“strong and robust watermarking is impossible to achieve”.
Without measures across the supply chain to prevent the creation of deepfakes, the law will forever be playing catch-up.
The Government now intend to ban the creation of sexual imagery deepfakes; I welcome this and have their announcement in my hand:
“Government cracks down on ‘deepfakes’ creation”.
This will send a clear message that the creation of these intimate images is not acceptable. However, this appears to cover only sexual image deepfakes. These are the most prevalent form of deepfakes, but other forms of deepfakes are also causing noticeable and rapidly growing harms, most obviously political deepfakes—as the noble Baroness, Lady Jones, will illustrate—and deepfakes used for fraud. This also appears to cover only the endpoint of the creation of deepfakes, not the supply chain leading up to that point. There are whole apps and companies dedicated to the creation of deepfakes, and they should not exist. There are industries which provide legitimate services—generative Al and cloud computing—which fail to take adequate measures and end up enabling creation of deepfakes. They should take measures or face legal accountability.
The Government’s new measures are intended to be introduced through an amendment to the Criminal Justice Bill, which is, I believe, currently between Committee and Report in the House of Commons. As I understand it, however, there is no date scheduled yet for Report, as the Bill seems to be caught in a battle over amendments.
The law will, however, be extremely difficult to enforce. Perpetrators are able to hide behind anonymity and are often difficult to identify, even when victims or authorities are aware that deepfakes have been created. The only reliable and effective countermeasure is to hold the whole supply chain responsible for deepfake creation and proliferation. All parties involved in the AI supply chain, from AI model developers and providers to cloud compute providers, must demonstrate that they have taken steps to preclude the creation of deepfakes. This approach is similar to how society combats—or, rather, analogous to the way that I hope the Minister will concede to the noble Baroness, Lady Kidron, society will combat—child abuse material and malware.
Lord Leong (Lab)
My Lords, I speak to Amendments 293 and 294 from the noble Lord, Lord Clement-Jones, Amendment 295 proposed by my noble friend Lady Jones and Amendments 295A to 295F, also in the name of the noble Lord, Lord Clement-Jones.
Those noble Lords who are avid followers of my social media feeds will know that I am an advocate of technology. Advanced computing power and artificial intelligence offer enormous opportunities, which are not all that bad. However, the intentions of those who use them can be malign or criminal, and the speed of technological developments is outpacing legislators around the world. We are constantly in danger of creating laws that close the stable door long after the virtual horse has bolted.
The remarkable progress of visual and audio technology has its roots in the entertainment industry. It has been used to complete or reshoot scenes in films in the event of actors being unavailable, or in some cases, when actors died before filming was completed. It has also enabled filmmakers to introduce characters, or younger versions of iconic heroes for sequels or prequels in movie franchises. This enabled us to see a resurrected Sir Alec Guinness and a younger version of Luke Skywalker, or a de-aged Indiana Jones, on our screens.
The technology that can do this is only around 15 years old, and until about five years ago it required extremely powerful computers, expensive resources and advanced technical expertise. The first malicious use of deepfakes occurred when famous actors and celebrities, mainly and usually women, had their faces superimposed on to bodies of participants in pornographic videos. These were then marketed online as Hollywood stars’ sex tapes or similar, making money for the producers while causing enormous distress to the women targeted. More powerful computer processors inevitably mean that what was once very expensive rapidly becomes much cheaper very quickly. An additional factor has turbo-boosted this issue: generative AI. Computers can now learn to create images, sound and video movement almost independently of software specialists. It is no longer just famous women who are the targets of sexually explicit deepfakes; it could be anyone.
Amendment 293 directly addresses this horrendous practice, and I hope that there will be widespread support for it. In an increasingly digital world, we spend more time in front of our screens, getting information and entertainment on our phones, laptops, iPads and smart TVs. What was once an expensive technology, used to titillate, entertain or for comedic purposes, has developed an altogether darker presence, well beyond the reach of most legislation.
In additional to explicit sexual images, deepfakes are known to have been used to embarrass individuals, misrepresent public figures, enable fraud, manipulate public opinion and influence democratic political elections and referendums. This damages people individually: those whose images or voices are faked, and those who are taken in by the deepfakes. Trusted public figures, celebrities or spokespeople face reputational and financial damage when their voices or images are used to endorse fake products or for harvesting data. Those who are encouraged to click through are at risk of losing money to fraudsters, being targeted for scams, or having their personal and financial data leaked or sold on. There is growing evidence that information used under false pretences can be used for profiling in co-ordinated misinformation campaigns, for darker financial purposes or political exploitation.
In passing, it is worth remembering that deepfakes are not always images of people. Last year, crudely generated fake images of an explosion, purported to be at the Pentagon, caused the Dow Jones industrial average to drop 85 points within four minutes of the image being published, and triggered emergency response procedures from local law enforcement before it was debunked 20 minutes later. The power of a single image, carefully placed and virally spreading, shows the enormous and rapid economic damage that deepfakes can create.
Amendment 294 would make it an offence for a person to generate a deepfake for the purpose of committing fraud, and Amendment 295 would make it an offence to create deepfakes of political figures, particularly when they risk undermining electoral integrity. We support all the additional provisions in this group of amendments; Amendments 295A to 295F outline the requirements, duties and definitions necessary to ensure that those creating deepfakes can be prosecuted.
I bring to your Lordships’ attention the wording of Amendment 295, which, as well as making it an offence to create a deepfake, goes a little further. It also makes it an offence to send a communication which has been created by artificial intelligence and which is intended to create the impression that a political figure has said or done something that is not based in fact. This touches on what I believe to be a much more alarming aspect of deepfakes: the manner in which false information is distributed.
Viscount Camrose (Con)
I thank the noble Lord, Lord Clement-Jones, and the noble Baroness, Lady Jones of Whitchurch, for tabling the amendments in this important group. I very much share the concerns about all the uses of deepfake images that are highlighted by these amendments. I will speak more briefly than I otherwise would with a view to trying to—
Lord Clement-Jones (LD)
My Lords, I would be very happy to get a letter from the Minister.
Viscount Camrose (Con)
I would be happy to write one. I will go for the abbreviated version of my speech.
I turn first to the part of the amendment that would seek to criminalise the creation, alteration or otherwise generation of deepfake images depicting a person engaged in an intimate act. The Government recognise that there is significant public concern about the simple creation of sexually explicit deepfake images, and this is why they have announced their intention to table an amendment to the Criminal Justice Bill, currently in the other place, to criminalise the creation of purposed sexual images of adults without consent.
The noble Lord’s Amendment 294 would create an offence explicitly targeting the creation or alteration of deepfake content when a person knows or suspects that the deepfake will be or is likely to be used to commit fraud. It is already an offence under Section 7 of the Fraud Act 2006 to generate software or deepfakes known to be designed for or intended to be used in the commission of fraud, and the Online Safety Act lists fraud as a priority offence and as a relevant offence for the duties on major services to remove paid-for fraudulent advertising.
Amendment 295 in the name of the noble Baroness, Lady Jones of Whitchurch, seeks to create an offence of creating or sharing political deepfakes. The Government recognise the threats to democracy that harmful actors pose. At the same time, the UK also wants to ensure that we safeguard the ability for robust debate and protect freedom of expression. It is crucial that we get that balance right.
Let me first reassure noble Lords that the UK already has criminal offences that protect our democratic processes, such as the National Security Act 2023 and the false communications offence introduced in the Online Safety Act 2023. It is also already an election offence to make false statements of fact about the personal character or conduct of a candidate or about the withdrawal of a candidate before or during an election. These offences have appropriate tests to ensure that we protect the integrity of democratic processes while also ensuring that we do not impede the ability for robust political debate.
I assure noble Lords that we continue to work across government to ensure that we are ready to respond to the risks to democracy from deepfakes. The Defending Democracy Taskforce, which seeks to protect the democratic integrity of the UK, is engaging across government and with Parliament, the UK’s intelligence community, the devolved Administrations, local authorities and others on the full range of threats facing our democratic institutions. We also continue to meet regularly with social media companies to ensure that they continue to take action to protect users from election interference.
Turning to Amendments 295A to 295F, I thank the noble Lord, Lord Clement-Jones, for them. Taken together, they would in effect establish a new regulatory regime in relation to the creation and dissemination of deepfakes. The Government recognise the concerns raised around harmful deepfakes and have already taken action against illegal content online. We absolutely recognise the intention behind these amendments but they pose significant risks, including to freedom of expression; I will write to noble Lords about those in order to make my arguments in more detail.
For the reasons I have set out, I am not able to accept these amendments. I hope that the noble Lord will therefore withdraw his amendment.
Lord Clement-Jones (LD)
My Lords, I thank the Minister for that rather breathless response and his consideration. I look forward to his letter. We have arguments about regulation in the AI field; this is, if you like, a subset of that—but a rather important subset. My underlying theme is “must try harder”. I thank the noble Lord, Lord Leong, for his support and pay tribute to Control AI, which is vigorously campaigning on this subject in terms of the supply chain for the creation of these deepfakes.
Pending the Minister’s letter, which I look forward to, I beg leave to withdraw my amendment.
Lord Clement-Jones
“Data risks from systemic competitors and hostile actors(1) The Secretary of State, in consultation with the Information Commissioner, must conduct a risk assessment on the data privacy risks associated with genomics and DNA companies that are headquartered in countries they determine to be systemic competitors and hostile actors.(2) Within 12 months of the passage of this Act, the Secretary of State must present this risk assessment report to Parliament and consult the intelligence and security agencies on the findings, taking into account the need to not make public information critical to national defence or ongoing operations.(3) This risk assessment must evaluate—(a) the potential for genomic and DNA data to be exfiltrated outside of the UK,(b) the degree of access granted to foreign entities, particularly those linked to systemic competitors and hostile actors, to the genomic and DNA data collected within the UK,(c) the potential misuse of genomic and DNA data for dual-use or other nefarious purposes,(d) the implications for UK national security and strategic advantage,(e) the risks to the privacy and rights of UK citizens, and (f) the potential for such data to be used in a manner that could compromise the privacy or security of UK citizens or the national interest.(4) The risk assessment must include, but is not limited to—(a) an analysis of the data handling and storage practices of genomics companies that are based in countries designated as systemic competitors and hostile actors,(b) an independent audit at any company site that could have access to UK genomics data, and(c) evidence of clear disclosure statements to consumers of products and services from genomics companies subject to data handling and disclosure requirements in the countries they are headquartered.(5) This risk assessment must be conducted as frequently as deemed necessary by the Secretary of State or the Information Commissioner to address evolving threats and ensure continued protection of the genomics sector from malign entities controlled, directly or indirectly, by countries designated as systemic competitors and hostile actors.(6) The Secretary of State has the authority to issue directives or guidelines based on the findings of the risk assessment to ensure compliance by companies or personnel operating within the genomics sector in the UK, safeguarding against identified risks and vulnerabilities to data privacy.”Member’s explanatory statement
This amendment seeks to ensure sufficient scrutiny of emerging national security and data privacy risks related to advanced technology and areas of strategic interest for systemic competitors and hostile actors. It aims to inform the development of regulations or guidelines necessary to mitigate risks and protect the data privacy of UK citizens’ genomics data and the national interest. It seeks to ensure security experts can scrutinise malign entities and guide researchers, consumers, businesses, and public bodies.
Lord Clement-Jones (LD)
My Lords, what a relief—we are at the final furlong.
The UK is a world leader in genomics, which is becoming an industry of strategic importance for future healthcare and prosperity, but, frankly, it must do more to protect the genomic sector from systemic competitors that wish to dominate this industry for either economic advantage or nefarious purposes. Genomic sequencing—the process of determining the entirety of an organism’s DNA—is playing an increasing role in our NHS, which has committed to being the first national healthcare system to offer whole-genome sequencing as part of routine care. However, like other advanced technologies, our sector is exposed to data privacy and national security risks. Its dual-use potential means that it can also be used to create targeted bioweapons or genetically enhanced military. We must ensure that a suitable data protection environment exists to maintain the UK’s world-leading status.
So, how are we currently mitigating against such threats and why is our existing approach so flawed? Although I welcome initiatives such as the Trusted Research campaign and the Research Collaboration Advice Team, these bodies focus specifically on research and academia. We expect foreign companies that hold sensitive genomics and DNA to follow GDPR. I am not a hawk about relations with other countries, but we need to provide the new Information Commissioner with much greater expertise and powers to tackle complex data security threats in sensitive industries. There must be no trade-off between scientific collaboration and data privacy; that is what this amendment is designed to prevent. I beg to move.
Lord Bassam of Brighton (Lab)
The Committee will be relieved to know that I will be brief. I do not have much to say because, in general terms, this seems an eminently sensible amendment.
We should congratulate the noble Lord, Lord Clement-Jones, on his drafting ingenuity. He has managed to compose an amendment that brings together the need for scrutiny of emerging national security and data privacy risks relating to advanced technology, aims to inform regulatory developments and guidance that might be required to mitigate risks, and would protect the privacy of people’s genomics data. It also picks up along the way the issue of the security services scrutinising malign entities and guiding researchers, businesses, consumers and public bodies. Bringing all those things together at the end of a long and rather messy Bill is quite a feat—congratulations to the noble Lord.
I am rather hoping that the Minister will tell the Committee either that the Government will accept this wisely crafted amendment or that everything it contains is already covered. If the latter is the case, can he point noble Lords to where those things are covered in the Bill? Can he also reassure the Committee that the safety and security issues raised by the noble Lord, Lord Clement-Jones, are covered? Having said all that, we support the general direction of travel that the amendment takes.
Lord Clement-Jones (LD)
I would be extremely happy for the Minister to write.
Viscount Camrose (Con)
Nothing makes me happier than the noble Lord’s happiness. I thank him for his amendment and the noble Lord, Lord Bassam, for his points; I will write to them on those, given the Committee’s desire for brevity and the desire to complete this stage tonight.
I wish to say some final words overall. I sincerely thank the Committee for its vigorous—I think that is the right word—scrutiny of this Bill. We have not necessarily agreed on a great deal, but I am in awe of the level of scrutiny and the commitment to making the Bill as good as possible. Let us be absolutely honest—this is not the most entertaining subject, but it is something that we all take extremely seriously and I pay tribute to the Committee for its work. I also extend sincere thanks to the clerks and our Hansard colleagues for agreeing to stay a little later than agreed, although that may not even be necessary. I very much look forward to engaging with noble Lords again before and during Report.
Lord Clement-Jones (LD)
My Lords, I thank the Minister, the noble Baroness, Lady Jones, and all the team. I also thank the noble Lord, Lord Harlech, whose first name we now know; these things are always useful to know. This has been quite a marathon. I hope that we will have many conversations between now and Report. I also hope that Report is not too early as there is a lot to sort out. The noble Baroness, Lady Jones, and I will be putting together our priority list imminently but, in the meantime, I beg leave to withdraw my amendment.
Viscount Camrose
“(3A) Regulations under this section made in consequence of section 183A of the 2018 Act (inserted by section 49 of this Act) may amend, repeal or revoke provision which refers to the data protection legislation (as defined in section 3 of the 2018 Act) as they could if the provision referred instead to the main data protection legislation (as defined in section 183A of the 2018 Act).”Member’s explanatory statement
This amendment makes clear that regulations making amendments consequential on new section 183A of the Data Protection Act 2018 (inserted by clause 49 of the Bill) can remove provision which duplicates the effect of that section but which refers to the “data protection legislation” generally, rather than the “main data protection legislation”.
Viscount Camrose
Member’s explanatory statement
This amendment provides that subsection (4) of this clause is subject to subsection (2) of this clause, as well as subsection (3).
House of Lords
Death of a Member: Lord Field of Birkenhead
The Lord Speaker (Lord McFall of Alcluith)
My Lords, I regret to inform the House of the death of the noble Lord, Lord Field of Birkenhead, on 23 April. On behalf of the House, I extend our condolences to the noble Lord’s family and friends.
Family Reunion Visas: Gaza
(7 months ago)
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The Parliamentary Under-Secretary of State, Home Office (Lord Sharpe of Epsom) (Con)
My Lords, in any humanitarian situation, the UK must consider its resettlement approach in the round, rather than on a crisis-by-crisis basis. We use existing pathways in response to events to support British nationals, those settled here and their family members. At present, there are no plans to create a new immigration route for those affected by the security situation.
Lord Dubs (Lab)
There are Palestinian families here who would urgently like family reunion with their relatives in Gaza on a temporary basis, perhaps modelled on the Ukrainian scheme. People are in real difficulties. Would the Minister care to comment on this? People in Gaza cannot apply for a family reunion visa to join family in the UK without leaving Gaza—but they cannot leave Gaza without a visa. Surely we can do better than that.
Lord Sharpe of Epsom (Con)
My Lords, the safety of all British nationals affected by the conflict in Gaza continues to be our utmost priority, but individuals who are not British nationals should apply for a visa to enable them to enter the UK in the normal way—and of course much of the process is online. Individuals who are not British citizens must not travel to the UK without existing permission to enter or remain previously agreed.
Baroness Berridge (Con)
My Lords, under the Ukrainian scheme, about 174,000 people came to the UK, and there were extensive categories of family relationships under that scheme. Can my noble friend the Minister outline whether the same categories apply for this family reunification scheme—and, if not, why not?
Lord Sharpe of Epsom (Con)
The Ukraine family scheme was a temporary visa approach rather than a refugee scheme. It is not a route to permanent resettlement; it formed part of the response that we made with other countries to the Russian Government’s unprovoked war against Ukraine. The Ukraine family scheme was developed in close consultation with the Government of Ukraine, who have been very clear that they would like their citizens to return to Ukraine when it is safe to do so. Obviously, similar discussions with the Government in Gaza would not be possible, so the two situations are not analogous.
Baroness Symons of Vernham Dean (Lab)
My Lords, how many people does the Minister think are online in Gaza to make such an application?
Lord Sharpe of Epsom (Con)
I am afraid that I am not terribly familiar with the internet in Gaza.
Lord Purvis of Tweed (LD)
Is the Minister aware that the immigration tribunal judges found the Home Office’s decision on this to be “irrational”? The concern is even deeper: the Home Office found itself able to expand the situation for those in Hong Kong who were under fear of persecution, but those who are in Gaza, who are in fear for their lives, the Home Office seems to be completely silent about. Therefore, there is a concern about double standards. Given the requirement on the occupying power, the Government of Israel, to ensure facilitation of the very documentation that the Minister said is necessary, what discussions has the Home Office had with its interlocutors in the Israeli Government to ensure that the visa process for documentation is facilitated?
Lord Sharpe of Epsom (Con)
I might dispute the noble Lord’s premise there: I am not sure that I would characterise it as an occupying power. I reiterate what I said earlier: British nationals and those family members can obviously apply using normal routes.
Baroness Gohir (CB)
My Lords, has the Minister made an assessment on how many students from Gaza studying here in the UK cannot go back to their homes because their homes have been obliterated? What financial and other support has been provided to those students?
Lord Sharpe of Epsom (Con)
I am afraid that I really do not have those statistics at hand, but I shall see if they exist.
Baroness Butler-Sloss (CB)
I wonder whether I could interrupt the Question to pay a very brief tribute to Lord Field of Birkenhead. He was a man of the highest integrity, and MP for Birkenhead for many years—but it is his work on modern slavery that I refer to. He was responsible, with my help and that of the noble Lord, Lord Randall, for persuading Prime Minister Theresa May to have the Modern Slavery Act. He was the chairman of a small group, including me, which reviewed the work of that Act. He will go down in history as a great MP—he was only here briefly, unfortunately, through ill health—and a man who did a great deal on modern slavery.
Baroness Blower (Lab)
Can I draw the Minister’s attention to the fact that, in his opening question, my noble friend Lord Dubs specifically used the word “temporary”, and then prayed in aid the notion of “temporary” in supporting the Ukraine arrangements. Can the Minister think about the fact that what was being asked was whether we could find space in our hearts and systems to allow for family reunion from Gaza for those people in such dire straits, on a temporary basis?
Lord Sharpe of Epsom (Con)
I take the noble Baroness’s point—but, as I say, we keep all existing pathways in response to events under review.
Lord Coaker (Lab)
I join the noble and learned Baroness, Lady Butler-Sloss, in the tribute that she made to our noble friend Frank Field—I am sure that we all join with that.
Judicial review has found that the family of a Palestinian refugee can apply for a visa without the use of biometrics. The Home Office has said that it is complying with that, so can the Minister outline to the Chamber how it is complying, and whether that applies to all those who should seek a visa application from Gaza?
Lord Sharpe of Epsom (Con)
The noble Lord asks an important question. The judgment was handed down a couple of weeks ago; obviously, we have received the outcome and officials will provide advice very shortly to Ministers on how it will impact ongoing and future operations.
Baroness Bottomley of Nettlestone (Con)
My Lords, I join the comments about Lord Field. He was my first boss; he paid me £12 a week—I was overpaid. We campaigned for poverty reform with Ruth Lister— the noble Baroness, Lady Lister—the noble Baroness, Lady Meacher, Lord Pakenham, and many others. He was a remarkable man of integrity and persistence, and quite contrary on occasion, but he made a formidable difference—and, of course, he was a graduate of the University of Hull.
Lord Newby (LD)
My Lords, can I revisit an answer that the Minister gave a moment ago? He said that Israel was not an occupying power in Gaza. My understanding, by looking at the FCDO website, is that the British Government’s formal position is that Israel is an occupying power in Gaza. Could he take this opportunity either to correct what he said or to explain why the Government have changed their policy?
Lord Sharpe of Epsom (Con)
If I spoke incorrectly, of course I correct it. I have not read the FCDO advice, but if that is what it says, then I correct the record.
Baroness Meacher (CB)
My Lords, I hope the House will forgive me if I follow the comments of the noble Baroness, Lady Bottomley, about Lord Field. I worked with Frank Field for more than 50 years; he fought more than anybody else I know for people in this country who are poor and disadvantaged, and they have lost a treasure with his death yesterday.
Baroness Bennett of Manor Castle (GP)
My Lords, in responding to the noble Lord, Lord Dubs, the Minister referred to the Government making decisions about special visa schemes on a crisis-by-crisis basis. What criteria do the Government apply in making those judgments? Perhaps the Minister can point me to where it is written down, so that we can all see how the Government are making them.
Lord Sharpe of Epsom (Con)
It very much depends on the circumstances and other factors. For example, there were separate arrangements made after earthquakes in places like Turkey and Syria.
Lord Morgan (Lab)
My Lords, is not the policy of issuing visas being used deliberately to cut back the number of immigrants in the country—particularly those from India—with very severe damage to, for example, research groups and universities? Could we have an undertaking that this policy will change?
Lord Sharpe of Epsom (Con)
This country is actually very generous: between 2015 and 2023, some 53,574 family reunion visas were granted to family members. We are the third most generous country in Europe, after Germany and Sweden. I do not really know what this Question has to do with universities.
Baroness Smith of Basildon (Lab)
My Lords, in response to an earlier question, the Minister gave a rather flippant answer when he said that he had no knowledge of the internet in Gaza. The question was serious; I ask that he reflects on his response and writes to noble Lords, and puts a copy in the Library.
Lord Sharpe of Epsom (Con)
I disagree. How am I supposed to know how the internet runs in Gaza? It was not a flippant answer; it is factual.
Lord Cashman (Lab)
My Lords, can I press the Government to find the imagination to help those in Gaza seeking refuge under the most extraordinary, inhumane circumstances? It would do the Government and this country a great deal of good if they could reach out and do something positive.
Lord Sharpe of Epsom (Con)
I absolutely take the noble Lord’s point, and we keep all systems and processes under review.
Energy: Welsh Government
(7 months ago)
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Baroness Wilcox of Newport
To ask His Majesty’s Government what assessment they have made of the case for stronger consultation and co-operation with the Welsh Government on energy policy to manage overlapping responsibilities in that area.
The Parliamentary Under-Secretary of State, Department for Energy Security and Net Zero (Lord Callanan) (Con)
My Lords, the UK Government are committed to strong, effective co-operation with the Welsh Government on energy issues, supporting our shared energy security and net-zero objectives. We engage Welsh Ministers on a range of issues, and our support for the energy transition in Wales includes Great British Nuclear’s recent purchase of the Wylfa site, the ongoing HyNet project in north Wales and supporting the development of offshore wind in the Celtic Sea.
Baroness Wilcox of Newport (Lab)
My Lords, the port of Milford Haven brings in 20% of the UK’s energy. It is part of our critical UK infrastructure; there are huge opportunities here. The Welsh Government made £1 million available to support that emerging sector, yet the UK Government have just rejected the port’s bid for a share of £160 million to help develop the technology. Can the Minister please explain why the Government have left the port’s hopes on offshore wind high and dry, and what conversations the Government had with the Welsh Government before making this decision?
Lord Callanan (Con)
We have regular discussions with the Welsh Government. The noble Baroness neglected to say that Port Talbot was one of the two ports in the UK that was taken forward, with one in Scotland as well. She is being slightly unfair in that assertion.
Earl Attlee (Con)
My Lords, is the Minister aware that the UK burns about 50,000 tonnes of coal for the heritage steam sector, but due to the closure by the Welsh Government of the Ffos-y-Fran colliery, that coal now has to be imported from Colombia and South Africa, and increases emissions rather than reduces them? Will my noble friend the Minister have a chat with the appropriate Welsh Ministers about that?
Lord Callanan (Con)
The noble Earl makes an interesting point, and I am of course aware of the requirements of the heritage steam sector. We would be happy to take it up with the Welsh Government.
Lord Wigley (PC)
Does the Minister accept that over recent years, there has been immense frustration in Wales as projects involving tidal lagoons, floating offshore wind—as highlighted by the noble Baroness, Lady Wilcox, a moment ago—and inland hydro pump storage schemes have failed to progress, partly because of the split of responsibility between Westminster and Senedd Cymru? If the Government cannot get their act together, will they please devolve full responsibility to the Welsh Government, with the cash resources needed to drive forward these much-needed projects?
Lord Callanan (Con)
I am sorry that the noble Lord takes that attitude, because all projects across the UK are evaluated on the same basis. Of course, it is not possible to take forward every project, but the assertion that projects in Wales are somehow discriminated against is just not true. I could give him many alternative examples of projects in Wales—from nuclear, to hydrogen storage, to hydrogen allocation rounds, and CCUS projects—that are going forward.
Earl Russell (LD)
My Lords, does the Minister agree with the Institute of Welsh Affairs that Wales should retain, and local communities gain, greater income from the renewable energy developments that they host?
Lord Callanan (Con)
I am not familiar with those particular circumstances; I would be happy to chat to the noble Earl about it.
Lord Morgan (Lab)
My Lords, is this not an opportunity for further investment in west Wales, which by comparison with east Wales, which is closer to the English border, has suffered considerably in economic investment in recent years?
Lord Callanan (Con)
There are opportunities with the energy transition for investment in all communities throughout the UK, including, of course, in Wales. There are considerable investments in north Wales, and I mentioned some of those in south Wales as well. It is perfectly possible that onshore wind projects are being taken forward in west Wales, but I am not familiar with that particular area.
Lord Faulkner of Worcester (Lab)
My Lords, further to the question from his noble friend Lord Attlee, is the Minister aware that his colleague, the noble Lord, Lord Parkinson of Whitley Bay, and Huw Merriman, the Rail Minister, have written a joint letter to the First Minister of Wales asking him whether the Welsh Government would reconsider the closure of the Ffos-y-Fran pit in south Wales? This pit would provide coal for the heritage sector for many years to come. Would he chase that up and see whether we can get a positive answer to it?
Lord Callanan (Con)
I thank the noble Lord for that information. I was not aware of that, but now that he has mentioned it, I will of course chase it up.
Crime Statistics: Gender Identity
(7 months ago)
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Baroness Fox of Buckley
To ask His Majesty’s Government whether they plan to issue guidance on data to be collected throughout the criminal justice system by sex, as registered at birth, not gender identity, to ensure consistency of crime statistics across England and Wales.
Lord Roborough (Con)
Home Office guidance states that police forces should record an individual’s sex in the legal sense that is based on their birth certificate or gender recognition certificate. Separately, an individual’s gender identity can be collected. The Government have commissioned an independent review into the recording of data on biological sex and gender identity by public bodies and in research. The review is due to report in August and will inform our future approach to recording.
Baroness Fox of Buckley (Non-Afl)
I am glad to hear from the Minister, who I know is sincere on this, that the Government are taking this seriously, because accurate statistics are vital for evidence-based criminal justice policy. First, can I press the Minister to agree that, at present, official crime data is not accurate, credible or consistent? FoI requests to countrywide police forces reveal that they use a wide variety of differing recording practices; commonly record self-declared gender identity instead of birth sex, which is not the same as on your birth certificate; and that suspected and even convicted male rapists are recorded as female if they say that they are women.
Secondly, does such dubious data undermine public trust in the believability of crime figures, and hinder voters in informed debates about criminal justice? This is especially important in the lead-up to the elections for local police and crime commissioners.
Lord Roborough (Con)
My Lords, in answer to these concerns, the Government have recently commissioned Professor Alice Sullivan to conduct an independent review of data collection on biological sex and gender in research and statistics within public bodies. This will report back by August 2024. The Home Office will thoroughly review Professor Sullivan’s findings when they are available, and will take any necessary action to ensure accuracy with regard to police statistics.
The Home Office annual data requirement for police custody, ADR 149, which is a mandatory collection, requires police forces to record the sex of detainees. In providing data to compile the Home Office’s homicide index, police forces are required to record a suspect’s sex—male, female or not known. The suspect’s gender is recorded separately, and only if it is different from their sex.
Lord Sandhurst (Con)
My Lords, anyone, including a convicted criminal, can change name and gender, and then obtain a new passport and driving licence and, in effect, change identity for most practical purposes. Ordinarily, in the case of persons who have changed gender, the DBS certificate will display their acquired gender. Is my noble friend the Minister satisfied that it is not possible for a passport and driving licence to be reissued to show the new name and acquired gender—thereby to be presented by the holder to defeat an effective DBS check?
Lord Roborough (Con)
My Lords, the Government are satisfied with the steps they are taking. Some offenders, including sex offenders, are required to notify their personal details to the police, with a record of their national insurance number as well as their name, date of birth and bank details. It is a criminal offence not to notify the authorities. Similar provisions apply to registered violent offenders and terrorists. Additionally, the police may place flags with His Majesty’s Passport Office on offenders deemed to pose a risk to the public. Where a registered sex offender notified to HMPO in this manner applies for a passport, or to change their name, HMPO will consult the police before any passport is issued or name change agreed.
Baroness Burt of Solihull (LD)
My Lords, would changing the whole system of crime recording, throughout the criminal justice system, not involve an inordinate amount of effort for very little return? I take the point the Minister made about an investigatory review of how recording is done, and I welcome that. Would it not also contravene the Equality Act 2010 and the human rights of anyone with a gender recognition certificate? Does the Minister agree with me that the whole criminal justice system should have other priorities on how it spends its limited resources?
Lord Roborough (Con)
My Lords, I see no reason why this needs to contradict the Equality Act, which is clear: it provides protection against discrimination, harassment and victimisation across a number of grounds known as the protected characteristics. We are committed to upholding Britain’s long-standing record of protecting the rights of individuals against unlawful discrimination. We keep any uncommenced provisions in the Act under review, and we are confident that the review that we have commissioned—reporting by August—will be consistent with the law.
Lord Ponsonby of Shulbrede (Lab)
My Lords, the noble Baroness, Lady Fox, has raised this question on a number of occasions, and the Minister’s answer has been similar, where he has pointed to reviews by the UK Statistics Authority and other experts. Does the Minister agree with me that the issue of data collection goes wider than sex and gender identity? I am thinking particularly of how one’s parentage is recorded, when there are mothers, fathers, sperm donors, egg donors and birth mothers. This is a live issue, where one’s parentage is recorded. Will the UK statistics review take into account these additional complicating factors when considering how data is recorded and presented?
Lord Roborough (Con)
My Lords, while I am grateful for the noble Lord’s question, it requires more detail and goes beyond the brief that I have today, so I will write to him.
Baroness Hoey (Non-Afl)
My Lords, I welcome the review, and we all look forward to the results in August. Can the Minister tell us how we would make sure that the review will apply to the whole of the United Kingdom, including Northern Ireland?
Lord Roborough (Con)
My Lords, I apologise, but I need to take that back to the department. I will then write to the noble Baroness.
Lord Jackson of Peterborough (Con)
My Lords, on gender data and empirical inquiries, will the Minister give the House an undertaking that we will never again have a situation, as we did with the Cass review, where NHS trusts and clinicians wilfully refused to release data to the inquiry, which was in the public interest and good?
Lord Roborough (Con)
My Lords, I am afraid that it is not for me to give that undertaking. I will have to take that back to the department and write.
BBC World Service: Finances
(7 months ago)
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Lord Liddle
To ask His Majesty’s Government, following the announcement of the resignation of the Director of the BBC World Service, what assessment they have made of the Service’s finances.
The Minister of State, Foreign, Commonwealth and Development Office (Lord Ahmad of Wimbledon) (Con)
My Lords, our assessment of and formal agreement with the BBC guarantees the continued provision of all 42 World Service languages. We provide approximately a third of the funding for the World Service, with the remainder funded from the licence fee. Our funding totalled £305 million over the spending review period. The BBC is operationally independent and responsible for setting budgets. The DCMS is currently leading a review of BBC future funding, including that of the World Service, which it is expected to conclude by the autumn.
Lord Liddle (Lab)
My Lords, I put on record my admiration and respect for Liliane Landor, who has resigned from the job of her life as director of the World Service because she cannot defend the cuts that are now in prospect. Does the Minister agree with me that the World Service is one of our greatest soft power assets? Soft power is crucial to us and to the West, as Russia and China are spending billions and billions on deliberate misinformation. Does he also agree that, given that the value of the BBC licence fee has been cut in real terms by 30% since 2010, the only way to avert this situation is for the FCDO to give more money to the World Service in grant as a matter of urgency?
Lord Ahmad of Wimbledon (Con)
I agree with the noble Lord on the value not just of the BBC World Service but of the role that the BBC plays, particularly in the current challenging environments on the global stage. We have seen additional funding and support being provided. The noble Lord will recall that last year we announced an additional £20 million of funding specifically to support the World Service on language provision. I note what the noble Lord said about future funding, which is exactly why, in a strategic way, our colleagues at the DCMS are conducting the overall funding review that I alluded to in my original Answer.
Lord Hannay of Chiswick (CB)
My Lords, having agreed that the World Service is a fundamental part of our soft power, does the Minister also recognise that, if that is so, it ought to be funded on a progressive form of taxation by the taxpayer, and not a regressive form of taxation by the licence fee payer?
Lord Ahmad of Wimbledon (Con)
My Lords, in his previous field as a diplomat, the noble Lord obviously had direct experience of the importance and support that the World Service provides. As I have said, these views are important and will be reflected on as we take forward the overall review of the BBC and its funding. I repeat that the BBC World Service provides a valuable service—as I have seen directly in the field through various travels—in a range of languages. Many people rely on the World Service, particularly at times of conflict. In areas such as Ukraine, and in the current conflict in the Middle East, it continues to play a vital role.
Lord Dobbs (Con)
My Lords, I welcome my noble friend’s description of how vital the World Service is. In the past the Government have described it as essential, invaluable and playing a vital role, and surely its role could not be more vital given the way the world is turning right now. The Government spend almost £12 billion a year on foreign aid, and the Prime Minister yesterday announced many more billions to be spent on defence. Surely there must be a better way for this vital tool of soft power to be funded than relying on the licence fee, where inevitably it has to compete with the likes of Gary Lineker and Peppa Pig.
Lord Ahmad of Wimbledon (Con)
I am glad my noble friend did not ask me who I prefer watching out of Gary Lineker or Peppa Pig; it depends what mood I am in. On the point he raises, the integrated review in 2023 identified that the BBC World Service is vital. As we heard from the noble Lord, Lord Liddle, it is a vital component of soft power and for countering disinformation, and it is important that it is properly funded. The majority of the World Service is funded by the TV licence fee, but we gave that extra uplift of £20 million last year as part of our review and commitment.
Lord Collins of Highbury (Lab)
My Lords, I hesitate to use the term soft power because, in a previous debate about the World Service, a Minister reminded us that data showed it was the
“top-rated international broadcaster for trustworthiness, reliability and depth of coverage”.—[Official Report, 10/3/22; col. 1551.]
When Russia invaded Ukraine, the people of Russia turned to the BBC. Two years ago, the Government gave emergency funding of £4.1 million to support that extension of journalism. Why do we have to wait for a further two years? Why are the Government not responding to the urgent need for trustworthy news going to Russia?
Lord Ahmad of Wimbledon (Con)
My Lords, I reiterate that I believe it is a vital service. When we use the term soft power, we are talking about different services that the United Kingdom offers to the world and the tools that are available. Of those, the BBC World Service provides exceptional news information. I know that in the case of the Hindi language, the World Service is one of the most effective and listened to channels in India. The noble Lord is right that the Government provided exceptional funding of £4.1 million, and my noble friend alluded earlier to the additional support we have provided to Ukraine in its fight against the illegal war Russia has waged on it. We will continue to see what tools are available to us, and we will work to ensure that the BBC World Service, along with a range of other soft power tools, is utilised effectively. I agree with the noble Lord that it is particularly effective in conflict situations.
The Lord Bishop of St Albans
My Lords, I notice that the funding agreement with the FCDO runs only until April 2025, which is not very far ahead. Can the Minister tell us whether the Government are considering, at the very least, taking back full funding of the World Service in the longer term rather than leaving it to the licence fee?
Lord Ahmad of Wimbledon (Con)
My Lords, I hear clearly the proposal from the right reverend Prelate, which has also been suggested by the director-general. I accept the premise of his question; that model existed until 2014. It is important that we make full leverage of funding. It is a challenging fiscal environment, but the Government have demonstrably shown that when we need to provide additional funding to the BBC World Service, we do so. The funding review being undertaken by the DCMS provides an opportunity to look specifically at the funding of the World Service.
Lord McNally (LD)
My Lords, this Question has a familiar ring to it. On 12 March, the noble and gallant Lord, Lord Stirrup, said the World Service was
“one of the most powerful soft-power tools that this country possesses”.—[Official Report, 12/3/24; col. 1916.]
He was followed by a range of noble Lords, including the Foreign Secretary, agreeing with him, just as we do this afternoon. The problem is that, as the retiring director has pointed out—I associate myself with the words from the noble Lord, Lord Liddle, on her work—as things are, the World Service will not be able to deliver that soft power unless it is given proper long-term funding. Given the range of agreement across the House, surely there is the opportunity now for the Government to produce a long-term, well-funded financial plan for the World Service that can meet the desires of the country and this House.
Lord Ahmad of Wimbledon (Con)
My Lords, the noble Lord will know the deep affection I have for him and his views, to which I listen very carefully. He will accept that the DCMS review, as I said earlier, will be looking at the World Service specifically. Soft power around the world is needed at a time of conflict and need. I alluded earlier to the Gaza conflict. The BBC World Service provides important signposting at times of conflict, such as where to go and where to get information. That is a vital example of what it does. Of course, I acknowledge the opinions expressed in your Lordships’ House. As I said, the review of the whole BBC funding envelope will look at every element of BBC funding but also specifically at how we protect this valuable asset when it comes to our global power across the world.
Viscount Colville of Culross (CB)
My Lords, I declare an interest as a former BBC producer. The Government’s grant in aid to the BBC World Service will now not be decided until some unspecified time after the election. The present grant runs out in March next year. Does the Minister realise the havoc this uncertainty is playing with the BBC’s planning for the future of its world and language services?
Lord Ahmad of Wimbledon (Con)
My Lords, for all funding, I accept the principle that we need to provide certainty and continuity. As we move towards an election, it is very clear that, irrespective of any result or outcome of a given election, we have seen successive Governments over many years show their commitment to the BBC and, importantly, to the World Service. Our commitment is that we will stand by the BBC World Service if we continue to be chosen as the Government of the day in the election later this year. I assure noble Lords that the review being undertaken by colleagues in the DCMS is very much focused on providing the very certainty to which the noble Viscount alludes.
Artificial Intelligence (Regulation) Bill [HL]
Wednesday 24th April 2024
(7 months ago)
Lords ChamberRead Full debate Artificial Intelligence (Regulation) Bill [HL] 2023-24 View all Artificial Intelligence (Regulation) Bill [HL] 2023-24 Debates Read Hansard Text
Lord Holmes of Richmond (Con)
My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Unless, therefore, any noble Lord objects, I beg to move that order of commitment be discharged.
Infected Blood Inquiry
(7 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Chapman of Darlington (Lab)
My Lords, as a result of this scandal, two people die on average each week. It now seems that children, even babies, were experimented on in the 70s and 80s without their parents’ consent. As my right honourable friend Diana Johnson said yesterday:
“These disturbing revelations raise serious criminal and ethical issues for the NHS and the medical profession”.—[Official Report, Commons, 23/4/24; col. 802.]
Last week, the Government laid amendments to the Victims and Prisoners Bill after the Commons forced the Government to act, but we were disappointed to see that the Government are attempting to wriggle out of the three-month time commitment to introduce a mechanism for compensation payments to be made. My noble friend Lord Ponsonby has tabled an amendment that would reinstate the commitment to act within three months. This will be considered next week. Will the Government accept the amendment?
The Government accept the moral case for compensation, so can the Minister confirm what progress has been made on setting up the basis for a compensation scheme for those infected by contaminated blood and whether the Government will respond to every recommendation in the Infected Blood Inquiry report? How long after publication will the Government publish their full response to the recommendations? What preparatory work is being done by the Treasury on this issue, and will the Minister commit to making this publicly available?
We learned this morning of the sad passing of our loved and respected friend Lord Field of Birkenhead, a steadfast champion for justice on this and many other issues. I can do no better this afternoon than to consider Frank’s words. In his statement to the inquiry, he said:
“I do not know how to value the life of someone lost due to Factor 8, but I know that it is worth more than £20,000.”
He said this with reference to a meeting that he led in 1989. This has gone on for far too long. The time to act, as Frank said, has now long passed.
Earl Howe (Con)
My Lords, the story of infected blood is one of unimaginable suffering, inflicted on thousands of individuals and families over decades. It is undoubtedly an unparalleled tragedy in the history of the NHS.
I pay tribute to the late Lord Field for all the work he did in championing the cause of so many people who required justice in one form or another. The Government are determined to deliver justice to the victims as swiftly as we can. The Infected Blood Inquiry’s final report will be published within a month, on 20 May. We will update Parliament through an Oral Statement on next steps as soon as possible thereafter. Meanwhile, as the noble Baroness has said, the Government have tabled amendments to the Victims and Prisoners Bill, which we will debate next week. They are designed to deliver on the Government’s commitment to pay compensation and will set up the legal framework to do that.
Baroness Brinton (LD)
My Lords, from the Liberal Democrat Benches we also pay tribute to Lord Field, who campaigned actively for infected blood victims from 1989. As with Lord Cormack, he will be greatly missed by the infected blood community.
Yesterday, Dame Diana Johnson rightly highlighted the appalling experiments which were carried out on an estimated 380 children. In particular, the parents of the children at Lord Mayor Treloar school were not even aware that their children were part of a research study. This was first highlighted by “World in Action” in 1975. Caroline Wheeler and the Sunday Times have campaigned rigorously on this for the last three decades, and to continue to remind people. It appears that the Government need reminding yet again that this is long overdue. I too have laid amendments to the Victims and Prisoners Bill for next week’s debate. The deadline for the compensation scheme is important, but victims need mandatory provision of support and legal advice. Interim payments are needed for those who have not yet received them: for those who are known about, within three months; for those who may not be confirmed, as soon after as possible.
Finally, we thank the Government for setting up the arrangements for the compensation body, but we hope that a High Court judge and a shadow board will also be appointed within three months.
Earl Howe (Con)
As the noble Baroness rightly says, it has been known for many years that many dozens of children with haemophilia at Treloar school in Hampshire were infected with HIV and hepatitis C in the 1980s through contaminated blood products. We are acutely aware of the distress and suffering of those individuals and of the bereaved families of those who have died. We expect Sir Brian Langstaff’s report to reveal the full circumstances of how this appalling tragedy came about.
The Government’s aim is to deliver compensation to those eligible as speedily as possible. Government amendments to the Victims and Prisoners Bill are designed to do this. One particular amendment will set up an arm’s-length body to deliver the compensation scheme, as recommended by Sir Brian. It will provide for interim payments to a particular group who have so far received no compensation, and for early commencement of the ALB and the interim payments. The ALB will be set up straightaway in shadow form, led by an interim chief executive, so that the practical work for delivering compensation can begin as soon as possible.
Viscount Hailsham (Con)
My Lords, in noting what my noble friend the Minister said, on the matter of compensation, I am sure he will agree that those who received inflected blood products, or their estates if they are deceased, should receive early compensation. That also applies to dependants who can establish clear financial loss. Beyond that, should we not be a bit cautious about compensation? Otherwise, the bill will be colossal.
Earl Howe (Con)
My noble friend is quite right to highlight what is likely to be a very significant impact on the public finances as a result of compensation in this area. It is important that any decisions on compensation funding are taken carefully. I think the House would expect the Government to work through the associated costs to the public sector while considering the needs of members of the community and the very far-reaching impacts this scandal has had on their lives.
Baroness Campbell of Surbiton (CB)
My Lords, I am sure the Minister appreciates the deep mistrust the community has regarding this Government. It has, for 40 years, struggled to have its voice heard and its needs met. Bearing this in mind, could he expand on the ways the Government intend to involve the community from here forward in all the developments? As there has frequently been such mistrust, we owe it to the community to involve it at every stage of the way.
Earl Howe (Con)
My Lords, I fully recognise the point that the noble Baroness has just made. My right honourable friend the Minister for the Cabinet Office is preparing to engage with members of the infected and affected communities at the beginning of May in a succession of meetings. Further than that, we agree that it is critical for those infected and affected to have a role in the infected blood compensation authority itself. We intend to utilise the provision for committees and sub-committees to make sure that the community is represented on these groups. It is right that the exact committees and board make-up is defined once the shadow body is established, with the input of the infected blood community. The message I would give is that we want to work collaboratively with stakeholders to achieve the right outcome.
Lord Turnberg (Lab)
My Lords, this has been an unimaginable tragedy, and we must move to compensate those who have been affected by it as quickly and as well as we can. One part of it is worth thinking about, which is trying to ascribe malign intent to those who were involved in giving this product in the hope that it would stop the bleeding and potential death of children. That was the intent in using factor 8 at the time. It had tragic consequences and many mistakes were made, but we must not assume malign intent on the part of the people involved.
Earl Howe (Con)
The noble Lord makes a very good point. For me to comment further would be wrong. What we need to do is wait for Sir Brian Langstaff’s final report on 20 May, which should, we expect, reveal some of the underlying facts that the noble Lord alluded to.
Leasehold and Freehold Reform Bill
Wednesday 24th April 2024
(7 months ago)
Lords ChamberRead Full debate Leasehold and Freehold Reform Act 2024 View all Leasehold and Freehold Reform Act 2024 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 50-II(b) Amendments for Committee (Supplementary to the Second Marshalled List) - (24 Apr 2024)
Baroness Andrews
Member's explanatory statement
This amendment is related to another amendment in the name of Baroness Andrews inserting a new Clause (LRHUDA 1993: Non-development Guarantee).
Baroness Andrews (Lab)
My Lords, in moving this amendment I shall also speak to Amendment 24. These might seem to be rather arcane amendments; Amendment 23 is a technical amendment and Amendment 24 is the substantial point and a proposed new clause. This might look like an arcane point but it is a very significant one and it is simple to correct. The amendment asks the Government to act on a promise to remove a significant blockage, which at the moment increases the cost of enfranchisement to leaseholders who are threatened with upward extensions to blocks of flats and have to pay the freeholder extra for the possible profit he might have made had he chosen to develop. The proposed new clause, although detailed— I apologise for the length of my speaking note—would remove the blockage. I am extremely grateful to noble Lords around the Committee for supporting this, and to the Minister, who has already met me. We all agreed that this is something that must be put right in the Bill.
I declare an interest as a leaseholder in a block of flats that has been under threat of an upward extension for not two years but five years. The consequent blight and anxiety have been considerable. Asking for compensation for not extending upward is now an accessible and popular option for freeholders looking for more profit, especially when it falls under the relaxed requirements of permitted development. That means that there would be no automatic planning hearing, and often what would count as a major development slips by for determination simply by planning officers. There is no requirement for affordable housing, friendly accommodation that would help disabled people, or considerations of planning issues such as the impact on structural stability or protection from massive disturbance for residents.
Given that upward extension can be authorised in wider circumstances than the normal planning rule, it is estimated that there are about 2.2 million custom-built private sector leasehold flats in blocks where development value—for example, for upward extension—could be an issue, and therefore where leaseholders might face this additional obstacle to enfranchisement. There are certainly many people already affected by upward development in London alone.
The current key legislation is paragraph (5) of Schedule 6 to the Leasehold Reform, Housing and Urban Development Act 1993. It defines development value in relation to premises to be enfranchised as an
“increase in the value of the freeholder’s interest in the premises which is attributable to the possibility of demolishing, reconstructing, or carrying out substantial works of construction on, the whole or a substantial part of the premises”.
To give a graphic illustration, in our own situation in my block of flats, when faced with a development we were not consulted on and did not want, we sought to enfranchise ourselves. The cost was originally estimated at £750,000 for 103 flats. Now the development value has been added, that has shot up to £1.75 million. We can no longer raise the funds and we cannot buy the freehold. What has shocked me most as I have pursued the Government on this point is that the impact assessment on upward extension of permitted development shows that the Government actually knew that this would happen. They anticipated that upward extensions would generate freeholder profits to the tune of £530 million in land value uplift, even without any actual development. Moreover, the impact statement recognised that this may make it more expensive for leaseholders to enfranchise.
To their credit, the Government realised that there was something wrong, especially since it would contradict the policy intentions of this Bill to make enfranchisement cheaper. So they referred it to the Law Commission, which reported in 2020 on options to make enfranchisement cheaper and easier. In option 9, it said that:
“When exercising enfranchisement rights, and in order to reduce the premium payable where there is development value, leaseholders could be given the ability to elect to take a restriction on future development of the property”.
The Government accepted the option. On 11 January 2021, in the House of Commons, Robert Jenrick promised in a Written Statement:
“Leaseholders will also be able to voluntarily agree to a restriction on future development of their property to avoid paying ‘development value’”.—[Official Report, Commons, 11/1/21; col. 10WS.]
Nothing would give us more pleasure in my block than a promise not to develop.
Even more to their credit, this solution was signposted in the impact statement on this Bill, in Annex 2, at paragraph 12, which recognises that the prospect of paying development value can make enfranchisement “prohibitively expensive”, and contemplates that there will be a new right for an option not to pay development value on the condition that leaseholders guarantee not to develop themselves. So I must ask the Minister this: with all these assurances having been given, where is this new clause? What has happened to the policy commitment?
Lord Best (CB)
My Lords, I support Amendments 23 and 24 in the name of the noble Baroness, Lady Andrews. I can imagine the anguish that must be felt by leaseholders in blocks of flats who are facing the disruption of one or even two new storeys being built on the roof of their flats. With freeholders now having permitted development rights for upward extensions, residents face the disruption, noise and hassle of builders, lorries, cranes, skips, scaffolding and so on for months—and now they face the prospect of being unable to buy the freehold of the block because development, or the possibility of upward development, adds to the value of the block and can make enfranchisement prohibitively expensive. The extra value of adding new storeys, or the compensation demanded for not developing where there is potential to add them, generates additional freeholder profits but makes enfranchisement unaffordable, yet the Leasehold and Freehold Reform Bill is all about giving leaseholders a better deal and easier access to enfranchisement.
I note that the previous Secretary of State promised to fix this specific problem through a clause in the Bill enabling leaseholders in a block to agree together that no upward extension should take place. In this way, they remove the extra value for the freeholder. It seems that in the drafting of the Bill the promised new clause, originally an option proposed by the Law Commission, has got lost. So, on behalf of the 2 million-plus lease- holders who could be affected, I strongly support the amendments from the noble Baroness, Lady Andrews, which would fulfil the Government’s earlier promise.
Baroness Thornhill (LD)
My Lords, I suppose I could say “#UsToo”. I support these amendments, which are simple in purpose, in the name of the noble Baroness, Lady Andrews, who summed them up thoroughly, clearly and personally. As things stand under PDR, a freeholder can add two storeys to their existing building as a matter of right, with no planning permission needed: as I look round Watford, I can see evidence of that with my own eyes. But I also know that that can have very serious consequences. As well as the inconvenience of the building work going on for as long as it takes, you also discover that the top-floor flat that you paid a premium for is now worth less as you are a middle-floor flat. Then there is the pressure on communal space and amenities, including the dreaded bin store and the state thereof.
Adding two more storeys to a presumably well-planned block of flats, for a set number of residents, is not consequence-free. But the consequences are absolutely trivial compared with the knock-on effects of such development on the Government’s own stated aim, which is to encourage more leaseholders to buy their freehold. This is an additional and often insurmountable obstacle. It significantly raises the cost of enfranchisement, as has been said. The value of the block will have gone up. The leaseholders are now required to pay more for their freehold. In many parts of the country, this takes it way out of reach, as in the noble Baroness’s case.
The noble Baroness, Lady Andrews, very thoroughly cited a positive trail of support: all the right noises from the Secretary of State in 2021, the Government’s complete recognition of the dilemma and a real promise of the ability to look into some restriction.
It is clear that there is a policy conflict here: the need for more homes, which we all agree on, versus the enfranchisement of leaseholders. As things stand, the homes policy is top trumps. Can the Minister advise on whether there will be a review of PDRs in general, including focusing on unintended consequences such as this and whether there is a way to sort this out in the leaseholder’s favour in the Bill? At the moment, it feels as if the freeholders are still very much holding all the aces and current residents have no voice at all in this significant change to their environment and, possibly, their life chances and finances.
Baroness Taylor of Stevenage (Lab)
My Lords, I am very grateful to my noble friend Lady Andrews for the collaborative way in which she has prepared and worked on her amendment, and drawn the attention of the House to what seems to be an omission from the Bill. We believe this needs to be rectified and my noble friend has not only set out, with her usual thorough approach and eloquence, exactly what the issue is, but has also proposed a straightforward and elegant solution, which we support.
My noble friend describes the Law Commission report as adopted by the Government in January 2021. Indeed, the government press release of January 2021 indicated that the Bill would strongly take account of this government commitment to release leaseholders from the straitjacket of hope of future development value. I quote from that press release:
“Leaseholders will also be able to voluntarily agree to a restriction on future development of their property to avoid paying ‘development value’”.
This is based on a Law Commission suggestion, which clearly indicates the direction of travel and which we believe the Government have accepted. To quote from the Law Commission recommendation:
“Premiums would be reduced at the date of the freehold acquisition claim. If leaseholders subsequently decided that they wanted to develop, they would pay a portion of any profit received on a subsequent development to the landlord, rather than (as at present) having to pay development value in respect of a speculative future possibility of development”.
The Law Commission also set out clearly the principle that leaseholders should not need to have to negotiate on a piecemeal basis for this restriction but should be granted it by right. The commission refers to leaseholders of flats acquiring the freehold to their block and states that,
“as they would not be required to pay the landlord an additional sum to reflect the potential to develop their properties, leaseholders would no longer be required to negotiate with the landlord to create such a restriction; rather, they would be entitled to demand such a restriction be included”
and
“disputes, negotiation and litigation about development value would be reduced”.
The Law Commission clearly believed that the election to take a restriction on development outweighed the disadvantages put forward by other consultees and that such an election was eminently possible to implement where there was agreement among leaseholders.
I also point out that this issue arises, in part, from yet another unintended consequence of the permitted development regime—a point mentioned by the noble Baroness, Lady Thornhill—on which I have made my views clear in your Lordships’ House in the past. I am not an unequivocal fan of PD. Permitted development removes the step of local accountability through the planning system, often the contribution to local community infrastructure and almost always the contribution to local affordable housing which would be required through traditional planning applications.
At its worst, permitted development drives a coach and horses through local plans, resulting in residential property in inappropriate areas and buildings, and in taking buildings out of commercial use where it may not be appropriate to do so. In the case of the subject of this amendment, its very existence can create an added financial pressure on those wishing to exercise their enfranchisement rights. That is another reason why we believe that the solution proposed by my noble friend Lady Andrews delivers an equal and justifiable right to leaseholders.
The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Scott of Bybrook) (Con)
My Lords, I thank the noble Baroness, Lady Andrews, for her Amendments 23 and 24 on development value. I also thank her very much for meeting me on this subject.
The amendments would introduce a scheme where enfranchising leaseholders would not pay development value if they guaranteed that they would not develop for a period of 10 years. Under the current law, lease- holders are sometimes required to pay development value when collectively enfranchising a block of flats. This is the value of the potential future development of the property, such as through adding another storey to the building, as we have heard. We recognise that development value can make the cost of enfranchisement prohibitively high.
We are committed to bringing forward a workable scheme and are exploring this area further. It is, as we have found, however, an area fraught with loopholes and technical detail. To be honest, it will take us time to get this right.
Before I finish, I want to bring up permitted development, because all noble Lords have brought this up. As noble Lords probably know, the Government have recently consulted on making changes to various permitted development rights. The consultation ran for eight weeks from 13 February to 9 April. We are considering the responses and I am sure we will have a debate on those in this House in due course.
The noble Baroness, Lady Andrews, is right about this issue. We know about it and we support her, but it is difficult. I would like to meet her again, and anybody else who would like to come, to go through her amendments in detail and take things forward in that way.
Baroness Pinnock (LD)
Could the Minister tell the Committee whether the problem that the noble Baroness, Lady Andrews, has defined could be resolved by removing permitted development rights altogether on these blocks of flats? This goes back to what was the case. If any development was proposed, it had to go through the normal application to the local planning authority.
Baroness Scott of Bybrook (Con)
I do not think that would be a sensible solution, because there might be times when permitted development might be the correct thing to do and everybody might be happy about it, including those leaseholders who have enfranchised. We need to take this steadily because it is fraught with complexity.
Baroness Andrews (Lab)
I am extremely grateful to everyone who has supported the amendment, especially the noble Baroness on my Front Bench. I am also particularly grateful to the Minister. I understood her to say that the Government are committed to bringing forward a workable scheme to deal with this problem, which is exactly what I wanted to hear. I know it must be fraught with difficulties. There are lots of rights and planning issues involved. There is a whole nest of issues that would have to be addressed. The important thing is that it be in line with the timetable for the Bill. Perhaps she will be able to say more about this when we meet, but I hope that it will be either aligned in the timetable, so that there is no more confusion and we can get this tracked as soon as possible, or, if it requires legislation, in the Bill. I take the point, and I would be very happy to meet her—and to take in with me an army, and its advisers.
I have one further reflection on the PDR review. I did my homework—I did what the Minister said, and I saw whether I could use the current PDR review as a way of raising this, but it does not allow me to do that; it is too narrow in scope. Therefore, in fact we need a proper review of PDR, because the implications are so varied and wide. If the Government could commit to that, there would be a lot of political capital in it. In the meantime, I am happy to leave this amendment, and we will see and wait on progress.
Baroness Scott of Bybrook
“(1A) If section 3(3) of the LRA 1967 applies to the current lease (successive leases treated as a single lease), sub-paragraph (1) is to apply only if the one of those leases which is in effect at the valuation date is a market rack rent lease.”Member's explanatory statement
This modifies the application of paragraph 8 where successive leases are “chained” to constitute a long lease under the LRA 1967.
Lord Howard of Rising
Lord Howard of Rising (Con)
I speak to Amendments 26 and 27 in my name, focusing on the measures in this Bill relating to marriage value which, as it stands, would allow leaseholders with leases of 80 years or fewer to acquire freeholder rights without paying a fair share of the marriage value to the existing freeholder.
Marriage value, in relation to leasehold enfranchisement, is set out in the Leasehold Reform, Housing and Urban Development Act 1993, and defined as the financial benefit that results from merging the freeholders’ and leaseholders’ interests in a residential property. Under the 1993 Act, and reaffirmed in the Commonhold and Leasehold Reform Act 2002, 50% of the marriage value is payable by the leaseholder to the freeholder when the unexpired term of an existing lease is under 80 years.
Handing over the full benefit of marriage value to leaseholders without due compensation will have wide-ranging effects, but the most damaging and significant is the threat to property rights. Our economy is built on property rights. If the ownership of property is no longer secure, because it can be taken away without compensation, where does that leave us? If the Bill goes through unamended, it will set a dangerous precedent for Governments to transfer wealth arbitrarily. What we are looking at today could be the thin end of the wedge. I am not suggesting that government actions would escalate immediately, but any power given to government will be used to its full extent sooner or later, however benign the original intention. Do not forget that income tax started out as a temporary measure at 2.5p in the pound, and has reached as high as 100%
On top of the principled concerns that I have set out, there are a number of practical ones. The assets set to be transferred as a result of these measures have a value of £7.1 billion, and it is likely that some of that value is being used as security for loans. Do His Majesty’s Government know how much of the affected property is tied up in this way, and do they know how the banking regulatory authority feels about, what would become, unsecured loans, or the possible consequent impact on banks’ capital requirements?
The Government’s impact assessment states there are 4.8 million leasehold properties in England, of which only 385,400 have leases under 80 years. Of those 385,400 leases, the bulk of the value is located in London and the south-east. Despite the Government’s noble ambition to support aspirational home owners, I understand that in London, 60% of leaseholders benefiting from this change in policy would be private investors, of which 10% to 25% are based overseas. At the same time, many of the freeholders whose assets would be removed are charities or pension funds which have invested to cover their long-term liabilities.
There is also a significant impact on the Exchequer. Under the status quo, any financial gain made by freeholders when leases are sold is taxable. If all the financial gain is given to the leaseholder, a good proportion of the tax that would have been due will be sheltered by the exemption of disposal of a principal private residence. The loss to the Exchequer under this consequence alone has been calculated at £l billion.
Finally, there is the problem with human rights legislation. One of the founding principles of the European Convention on Human Rights is the protection of property. The lack of compensation for freeholders under the processes set out in the Bill challenges the expectation that parties should be fairly compensated for losses resulting from expropriation or state control of use. Whatever government lawyers say, there is bound to be a difference of opinion. In fact, the Government’s own legal advice described it as “finely balanced”. Do your Lordships imagine for a moment that this arbitrary transfer of property without proper compensation being paid will not be fought through the courts to the highest level? It will cost the Government a small fortune and freeze the market in leasehold properties, as present leaseholders will be reluctant to sell while there is a chance of greater value in the future.
My amendments are simple. They preserve the existing arrangements only for leases with an unexpired term under 80 years, leaving the 95% of leaseholders who have leases of more than 80 years to benefit from the Government’s proposals, even when their term drops below 80 years. This is a fair balance. I hope my noble friend the Minister will consider my amendments carefully and from a point of principle. I would welcome further discussions to fine-tune the details so that we can ensure that this policy works for everyone. I beg to move.
Baroness Deech (CB)
My Lords, I am pleased to lend my support to the noble Lord, Lord Howard, and have put my name to these amendments. I have three short points to make. One is that phasing out in this area must be right. The second is that we should treat retrospective legislation very suspiciously. Thirdly, it cannot be right to deprive people of their property without compensation.
Lord Moylan (Con)
My Lords, it is a privilege to speak after the noble Baroness, with her depth of knowledge about this subject, and my noble friend Lord Howard of Rising, who did me a number of favours. First, he saved me from any obligation to explain the meaning of marriage value. Secondly, he made a moderate and temperate case for his amendment when my argument might be expressed in a somewhat less moderate and well-tempered manner, because I feel a real sense of outrage about what is being proposed.
As my noble friend has explained, marriage value is a real financial asset. His Majesty’s Government say that they are abolishing it. They are not abolishing it; they are, in effect, transferring, at the stroke of a pen, value from the freeholder to the leaseholder without any compensation. It is, simply, expropriation. My amendment, which is a probing amendment—I would not expect it to be part of the Bill—obliges the Secretary of State to pay compensation to those who have lost out as a result. Of course, I really want the Government to scrap the provision itself, rather than for compensation to be paid, and I would not expect my amendment to be a practical policy. It is a probing amendment to raise the question about expropriation without compensation.
I want to make three broad points. There are genuine evils in the leasehold system. I made it clear at Second Reading that there were things that I support in the Bill. For example, it was scandalous that in recent years some housebuilders sold leasehold houses with rapidly escalating ground rents, which they then securitised in order to increase their capital receipts. Also, it is scandalous the way that many freeholders are implementing their obligations in relation to the cladding crisis; people are genuinely suffering as a result.
However, how many of these evils are actually being addressed by removing marriage value from the calculation of the enfranchisement premium, or the premium paid for extending a lease? It is not germane to the main evils that the Bill has been advanced as addressing.
Expropriation of this character implies some wrongdoing on the part of the person whose assets are being expropriated. It requires a high test. Noble Lords will have noticed that even in the case of the friends of Putin, we have been sensitive and careful about expropriation. We have frozen assets, but when it comes to whether we should expropriate them and give them to Ukraine or do whatever useful stuff we might do with that money, we all draw back from it because of the legal consequences. Here, we are perfectly happy to expropriate assets and hand them around the market without any consideration, and with very few people rising to protest about it, even in your Lordships’ House.
I believe that the Secretary of State said that he sees this as an act of justice, but what justice is involved in transferring wealth from a group of people who include, as my noble friend has said, charities and pension funds to leaseholders, who in many cases are frightfully rich? We will shortly come to amendments in the name of the right reverend Prelate the Bishop of Manchester which deal specifically with charities, which I have put my name to. I live in Kensington, and as I declared at Second Reading, I live in a flat on a long leasehold. However, there are many people around Kensington with very expensive properties who are salivating at the prospect of this going through. This is not substantially helping the poor and middle classes; it is going to transfer huge amounts of wealth to people with long leases. The more valuable the flat, the bigger the benefit that they are going to get from it. Where is the justice in all this? I simply do not understand how that point can be made.
My second point relates to the European Convention on Human Rights, on which I do not claim to be an expert. I have a suspicion that my noble friend, when she rises to answer, will say that in respect of Article 1 of the first protocol—to which the noble Baroness, Lady Deech, has referred with such learning—similar cases in the past have been taken to the court, and that the landowners, the freeholders, have lost. Therefore, the Government are certain that this will pass that test. I am, of course, wholly unqualified to comment on the legal merits of the case in either way. However, even if it did pass that test, is this something that should pass the test in England, as far as the older rights that we have inherited are concerned? This is principally England that we are talking about, with its tradition of respect for private property and not implementing retrospective law or seizure of assets without very good reason. I would suggest that it does not pass the test. Even the Law Society—the “leftie lawyers”, as they are often referred to, which is not a phrase that I would use, and I hope Hansard will put that in quotation marks—is concerned about the damage that this will do to the reputation of English law.
My final point is addressed to my fellows on these Benches, who take the Conservative Whip. Are we and our noble friends on the Front Bench here to expropriate property without compensation, without justice, without an argument, or without there being serious wrongdoing on the part of the person whose assets are seized? Is this what we came into this House to do? I do not think it is. This is something that the Government need to take away and rethink very seriously, because it is wrong, it smells, and it is something that we should have nothing to do with.
Lord Truscott (Non-Afl)
My Lords, I declare an interest as a long-standing leaseholder, as I have done before. I support the expressed view of His Majesty’s Government on abolishing marriage values—I take a somewhat different view from that of the noble Lord, Lord Moylan—so making lease extensions cheaper and easier. I therefore oppose all the amendments in the names of the noble Lord, Lord Howard of Rising, the noble Baroness, Lady Deech, and others, the subsequent amendment in the names of the right reverend Prelate the Bishop of Manchester and the noble Lord, Lord Moylan, plus the amendment from the noble Lord, Lord Borwick, which we will come to later.
All these amendments impact on the issue of marriage value. I know that your Lordships’ House debated marriage value to some extent at Second Reading, but it is clear to me that reform is long overdue. I will not repeat the discussion that we had at Second Reading about the definition of marriage value. I must tell your Lordships’ House that, as a long-standing leaseholder, I have extended the lease of two properties in two different apartment blocks. I do not know how many noble Lords have gone through the process, but it is quite something to go through.
The current process is a farce—a piece of theatre designed to enrich everyone but the leaseholder, who pays all the costs. First, the freeholder comes up with an imagined figure of the future value of a property which bears no resemblance whatever to market reality. Basically, think of a figure and double it, and that is what your freeholder comes up with. The hapless leaseholder then employs a valuer and solicitor, and so does the freeholder, and the negotiation dance begins. The leaseholder ends up paying much less than the original premium—the original figure—but an awful lot of money in fees.
For the leaseholder, the whole process is uncertain, expensive and stressful. For the freeholder and associated professionals, it is lucrative, and their bread and butter. The current lease extension process is designed to protect the freeholder’s long-term interests at the expense of the leaseholder. It is nothing to do with transferring wealth—we keep hearing this figure of £7 billion being transferred—and everything to do with retaining it, as understandable as that may be.
Several of London’s great estates have maintained their property empires over hundreds of years by exploiting the system and making leasehold extension, or enfranchisement, extremely difficult, opaque and tedious. Leaseholders’ insecurity and uncertainty provide freeholder security. The more freeholders keep control of leases, and discourage extensions, the more they can protect their accrued wealth, and that is really what the debate is about today.
I do not intend to repeat what I said a couple of days ago in your Lordships’ House about the Church of England’s feudal property empire, and the work that it does with charities, except to say that it is a multi-billion-pound business, and, like all businesses, the Church will fight to protect its interests as one of the country’s leading landowners. Abolishing marriage value could, of course, affect all that.
I do not accept all the doom-laden warnings that we have heard from, for example, the noble Lord, Lord Howard of Rising. We have heard such dire warnings before about the impact this could have. We heard the same from the pension funds—remember that they were saying that the abolition of ground rent would cost them tens of billions of pounds. Well, just today, the Society of Pension Professionals and its chair have said that this is exaggerated and overplayed. In fact, the scale, relative to total assets, is probably not that significant in the long run. I think we will find the same when it comes to marriage value.
I know that a lot of people, including the noble Baroness, Lady Deech, who is very experienced legally in these matters, mentioned the European Convention on Human Rights. A number of major estates and property owners are citing that. I had a hedge fund lobby me, saying that their human rights would be breached under the ECHR were marriage value to be abolished. I do not think the great British public will be awfully sympathetic about hedge funds’ human rights being breached because some people want to reform leasehold and marriage value. In fact, I heard today from noble Lords, including the noble Lord, Lord Moylan, a wonderful case for an opt-out from the ECHR. If billionaires and hedge funds are going to hide behind the ECHR to prevent reform, I think it is a good idea to opt out—maybe some of the noble Lord’s colleagues in GB News would support that as a proposal.
Some say that there will just be a transfer of wealth from one group of rich people to another. There is obviously a certain amount of truth in that—the properties owned by people in central London, whether they are local or foreigners, are expensive—but if you abolish marriage value you will make the housing market more transparent and bring many more properties on to the market, thereby providing more homes. The problem with short-lease properties—I have found this myself—is that they are often unsaleable and un-mortgageable. That means that they can be purchased only by cash. Often, they remain short-lease properties because, as I have already described, extending the lease is a complicated process, lacks transparency and is prohibitively expensive, so they clog up the market. There are an awful lot of short-lease properties, which could be opened up to the market as a whole.
Baroness Fox of Buckley (Non-Afl)
My Lords, the noble Lord, Lord Truscott, explained very well what I would have liked to say, so “hear, hear” to that. I was beginning to worry that the debate might be getting a bit dull—until the noble Lord, Lord Moylan, spoke. He so infuriated me that I feel I have to say something. I am not able to stay for the rest of the evening, but I wanted to clarify a number of things.
It is true that there are some people who own lease- hold flats who are not poverty stricken, but the characterisation of the 5 million leaseholders in this country as wealthy is ludicrous. The main reason why people—certainly me—are forced to buy leasehold flats is that they are cheaper than non-leasehold flats. As I will indicate in an amendment to be discussed on the next day in Committee, very few of us were originally aware of what a leasehold meant. We thought that we were entering into the housing market and buying a house, having saved up very hard to do so, without realising that we were, in effect, pseudo-tenants with very few rights. That has all been discussed often in this House.
The other thing that I wanted to clarify—I hinted at it, and it will come up again—is the notion that any charity that is a freeholder is doing good in the world; that strikes me as at least open to question. Many of the problems that leaseholders face are due to their being local authority—local authorities are not charities, but there are real problems with local authority flats. Also, housing association leaseholders have endured incredible problems with how the leasehold is set up. It is not appropriate to assume that, because charities say that they are doing charitable work, they are not accountable for some of the uncharitable consequences of the fact that they are, in effect, freeholders making a huge amount of money out of leaseholders.
In that sense, what really wound me up was the idea of this being a limitless expropriation scheme. Leaseholders have felt for some time that they are on the receiving end of a limitless expropriation scheme. The reason why this Bill is here and why people across the political parties, from right to left and in between, are so committed to tackling leasehold is that the inequity is in that capacity to expropriate, via the service charge, ground rent and so on. It means that leaseholders feel there is no way to defend themselves against a freeholder who can just take, take, take. Having paid quite a lot in service charges, I know that you do not necessarily get a service and there is not very much you can do about it, which is what the Bill is trying to address. I am pleased that the Government are addressing this, although they are not going far enough.
This is whipping up a climate of fear, and the notion that mad socialists are going around stealing property from freeholders is absolutely mythical. It is very important that we do not allow myths to emerge in the midst of this discussion, and that we have a proportionate sense of how to respond. I do not think that all freeholders are evil, but the system is iniquitous. I mentioned before that it has taken a few years of me being here to hear so much enthusiasm for feudalism, but it seems to be coming up again. It might make it difficult to untangle the law—as the noble Baroness, Lady Deech, explained, this goes back many hundreds of years—and I am not trying to be glib, but there have been a lot of commissions looking into this. However, it is not appropriate to sing the virtues of feudalism, either. Feudal property rights are not in the interest of modern democrats, whether they are on the left or the right. The idea that this is the equivalent of the difficulties of expropriating from Putin does not make any sense.
As to the European Court of Human Rights: the irony of the position of Conservative Peers! By the way, I am one of the people who would leave the ECHR— I know everyone here will hiss and boo when I say that —because I do not think it should determine the decisions we make in this or the other House. But Conservative Peers, who would otherwise say that the European Court of Human Rights is unreliable, defending it for hedge fund managers is ludicrous. Freeholders are not necessarily virtuous, benevolent, benign landowners; some are, but most are money-making rentiers. It is actually a criticism of the failures of capitalism that the only way anyone thinks they can make money is by ripping off leaseholders—and then describing them as rich, just because they have got a decent flat. Noble Lords get the gist.
Lord Sentamu (CB)
My Lords, I remind the noble Baroness, in light of what she has just said, that it was in this place in 1215 that the barons said to the King, “This is the Magna Carta”. This principle was established and made very clear that a person’s property could not be seized by the King, except by the lawful judgment of his Peers over the law of the land. The assumption is that if you take the property, compensation must follow, even if you are taking such property because you want to convert some or all of it into leaseholds, so that they too can become owners. The Magna Carta will tell you, “Have you forgotten your history? Have you forgotten your law?” The rule of law in this country is what gives us liberty. It is not just a question of the European Court of Human Rights; it is also Magna Carta, which is really the foundation of all these things. To seize somebody’s property, even by an Act of Parliament, would go against the whole reason why Magna Carta came out and gave us the rule of law, in the end.
Let us be very careful in this Bill. If you take away somebody’s property without compensating them, those barons from 1215 will be rising up and saying, “Remember your history, remember your law, remember the tradition that it has created, and safeguard it”.
I do not think that freeholders are simply wanting to hold on to things, in the way that the noble Baroness described some of them, or are not doing any good charitable thing. I live in Berwick in Northumberland, and the duke there has plenty of other things. I have also seen some of the charity work that is being done.
Let us not use language and words because we are enthusiastic in one direction or another and ignore the Magna Carta. It is what has given freedom and liberty even to newcomers such as me. My friends, the rule of law cannot ever simply be brushed aside because of a desire to correct a particular question. The rule of law matters. The Magna Carta matters.
Lord Thurlow (CB)
My Lords, I support each of the three amendments in this group. I was going to say that the amendment from the noble Lord, Lord Moylan, concerning compensation, was so articulate that it really needed no reinforcement, but I was not expecting the fine history lesson just now, which has reinforced it with great skill and humour. The noble Baroness, Lady Deech, explained that she taught property law for many years. I studied property law for many years, and I am sure that, if I had studied under her—which would of course not have been appropriate at all in age terms—it would not have taken me so many years.
The expropriation is bad enough, but to add the retrospective characteristic in this legislation is shameful. My principal interest in contributing is the 80-year rule referred to by the noble Lord, Lord Howard of Rising, because that is a very sensible, intelligent compromise to the sledgehammer of absolute abolition of marriage value and hope value in the calculation being entirely reserved to the lessees. Many of the highest-value elements of this paragraph are, indeed, in central London and the south-east, and many are non-resident.
This clause would save the Treasury billions, in addition to earning it some billions, which we heard referred to by the noble Lord. There is logic to the 80 years proposed in his clause. That is the threshold below which mortgagees such as banks and building societies are very reluctant to lend on property. Lessees therefore have no choice but to negotiate an extension if they want to use borrowed money—and, of course, nearly all do. The 80-year rule is a compromise between the very long leases and those moving into the unmortgageable zone. It makes a great deal of sense to cut the pack in this way because it excludes those freeholders of over 80 years but encapsulates the value of the expiring leases. It should be supported.
The Earl of Lytton (CB)
My Lords, like the noble Baroness, Lady Deech, I come to this from a professional viewpoint. I am a chartered surveyor and, until recently, I was a registered valuer with my professional body. Coming from my background, I see the balance to be struck. When I was in the public sector, I was dealing with matters of compulsory purchase and compensation. Later on, after the passing of the Leasehold Reform, Housing and Urban Development Act 1993, I became the first chairman of the Leasehold Advisory Service. Although I was not a practitioner in the matter of leasehold enfranchisement, I had a very close up and personal involvement with what was happening there.
Baroness Pinnock (LD)
My Lords, the debate on this group of amendments has taken an interesting turn. I was not expecting to be discussing expropriation or to hear reference to the European Court of Human Rights, particularly from those who have in the past criticised it. I was not expecting the debate to hinge on the rule of law, of which I had thought we had a good example in previous days.
Lord Moylan (Con)
I am very grateful to the noble Baroness for giving way. If there is any suggestion that I have been critical of the European Convention on Human Rights, if that remark was addressed to me, I should be glad to know when that was the case because I have never said that we should withdraw from that convention. I do not know whether the remark was addressed to my noble friend Lord Howard of Rising and not me. If that was the case, I apologise for intervening.
Baroness Pinnock (LD)
There was, of course, no mention of or reference to any noble Lord in this Chamber. It was a general reference to criticisms of that court under the human rights legislation. We have heard in debates in your Lordships’ House over the past weeks that have hinged on the rule of law. So it is most interesting, for those of us who have felt that the rule of law had been breached in the decisions that have been made, that it is now being raised in defence of these amendments. The debate has become emotive on this issue.
I hope that we can draw back from that rather, because what we have here is the Government’s intention to rebalance the rights of leaseholders as against the rights of freeholders. From these Benches, we support the rebalancing of those rights. In many cases, we think that the Government are not going far enough, but there ought to be a rebalancing of those rights. That is not referencing in this case the fact that there seems to be an argument among those who have moved or supported the amendment, that the loss of value can be defined as an expropriation. I find that difficult to accept because all along, in changes to legislation on major infrastructure projects, property is infringed and property holders feel abused. But it is for the state to make those decisions. So I am not sure why we are going to the barricades on this issue.
Lord Moylan (Con)
I am grateful to the noble Baroness for giving way. In the case of infrastructure, it is certainly true that private property owners can have their property taken away from them to allow infrastructure to be built. But this is under a compulsory purchase regime whereby they receive something approaching the market value, normally plus a premium of so many per cent on top. My amendment would ensure that those expropriated of their marriage value would receive that. Is the noble Baroness, in fact, swinging in behind my amendment? There is a clear difference between what is proposed today and the compulsory purchase regime.
Baroness Pinnock (LD)
I thank the noble Lord for his intervention. To me, the issue here is quite simple. We expect leaseholders to fund the enfranchisement of their lease—to pay the costs of the enfranchisement—and then to share the increased value of the lease with the freeholder, who has made no financial input to the extension of the lease. From a leaseholder’s point of view—although I do not have a leasehold myself—that seems to me to be the wrong balance. This is what the proposals in the Bill are attempting to put right. From that perspective, we would want to agree with that.
We are constantly warned that no investments can be regarded as safeguarded for all time. That must be true for property as it is for any other investments. We have heard arguments this afternoon about protecting freeholders, seemingly for ever. I accept the argument of the noble Baroness, Lady Deech, that phasing might be an answer to freeholders’ difficulties, but you cannot keep things in aspic for ever. Change is on the move and the Government are right to try to provide a better balance of rights and responsibilities between freeholders and leaseholders.
We on these Benches would prefer to move entirely to commonhold—but that argument has yet to be completed. I accept that the situation is very complex. Whenever we have a substantial change in legal rights, there is a loss on one side and arguments about that, and benefits on the other. Nobody can be absolutely clear and certain how the balance will be reset.
The Earl of Lytton (CB)
I take the noble Baroness’s point about things changing, but I ask her to cast her mind back—although she was not there at the time, any more than I was—to the great reforms in the Law of Property Act 1925. There was a big discussion about all sorts of matters to do with tenure and getting rid of things such as entails, and modernising the system. If we are to make a seismic change—and I think this Bill will produce something of a wobble—there ought to have been that big discussion about the fundamentals of property law. Does the noble Baroness not agree that, instead of tinkering around piecemeal with this and trying to shoehorn it into the unfortunate focal point of leasehold reform and the balance between leasehold and freehold, that discussion should have taken place first?
Baroness Pinnock (LD)
I thank the noble Earl for that intervention, because he is right in many cases. I am not a lawyer, but I know that the 1925 property Act made a huge change away from the old system, which was feudal at that point, and modernised property legislation. This Bill may do the same. In some instances, as we have heard this afternoon, it will have big consequences—for freeholders, in the context of this set of amendments. I accept that maybe there ought to have been—as we heard on Monday from the noble Lord, Lord Young of Cookham—a draft Bill on commonhold. Maybe it requires an in-depth, cross-House, cross-party committee to get into the detail, rather than the 300 or so pages of the Bill that we have in front of us, in order to get to grips with the consequences of what is being proposed.
I go back to the principle, and the principle has to be right. We are trying to rebalance the rights between freehold and leasehold. There is frequent talk on the Conservative Benches that the basis of Conservative philosophy is a property-owning democracy, but leaseholders will not be full participants in that until these changes are made. So it will be interesting to hear what the Minister has to say with regard to this very challenging debate.
Lord Khan of Burnley (Lab)
My Lords, this has been a more wide-ranging debate than was anticipated at the beginning of the group. The noble Lords, Lord Howard and Lord Moylan, made some interesting points in introducing their amendments, and it is for the Minister to clarify and address her noble friends’ concerns. All three amendments in this group attempt to make changes to Schedule 4, which is where the market- value element of the premium for any enfranchisement claim is determined.
I listened to the noble Baroness, Lady Fox of Buckley, in relation to the European Convention on Human Rights. Although we have differing views on that, it is interesting how legislation and the regard for international law are debated in different debates in this House—without pinpointing any noble Lord in particular.
The noble Baroness, Lady Deech, laid out and stipulated the complexity of the issue as a teacher in property law, while the noble Lord, Lord Thurlow, as a student of property law, made some interesting points about complexity and about working and bringing change in a fair manner.
In conclusion, I ask the Minister what consideration the Government have given to the principles of grandfathering for leases of various lengths and other conditions when developing the Bill? For example, in the instance of a lease of a very short length, when the Bill becomes law, what are the ramifications of the Bill as it is written? Do the Government think that some shorter leases are going to be treated in a way that may be fairer on wider principle but do not seem appropriate, given the shorter lengths? If so, did they consider any mitigation?
I finish by referring to my noble friend Lord Truscott, who advocated in a diligent manner the ending of marriage value and talked about the wider unfairness in leasehold properties. I look forward to the Minister’s response.
Baroness Scott of Bybrook (Con)
My Lords, I thank my noble friends Lord Howard and Lord Moylan for their amendments in this group. Amendments 26 and 27 would require marriage value or possible hope value to be payable by a leaseholder who has fewer than 80 years remaining on their lease on the passage of the Act.
The Government’s stated objective is to make it cheaper and easier for leaseholders to extend their lease or acquire their freehold. We want them to attain greater security of tenure. The amendments are directly counter to our objective. In particular, they would prevent us from helping the trapped leaseholder—that is, a leaseholder with a short lease who is unable to afford to extend because of the prohibitive marriage value payable, and so is trapped with an asset of diminishing value.
We do not believe that the leaseholder should have to pay marriage value. For the freeholder, the marriage value that is payable under the current law is a windfall created by the freehold and leasehold interests being married earlier than they otherwise would have been—namely, at the end of the lease. It is a sum that the freeholder would not receive if the lease ran its course. Parliament has previously determined that the value should be split equally and the leaseholder should pay half of it to the freeholder on enfranchisement, but we do not believe that freeholders should continue to receive that windfall.
The leaseholder needs to enfranchise, because by its very nature a lease is a wasting asset. Without either extending their lease or buying their freehold, they will suffer financial loss as the lease runs down or lose possession when it has fully run down. Nor has the lease- holder meaningfully chosen to enter such an arrangement, since leasehold is very often the only available form of tenure outside the rented sector at certain price points or in certain locations. The lease- holder’s need to enfranchise is born out of their insecurity of tenure; that is, out of the inherent injustice of the leasehold system. Our objective is to enable them to obtain greater security and to address that inherent injustice. By not having to pay marriage value to the freeholder, the leaseholder’s ability to obtain security of tenure is much improved.
A third party who bought the landowner’s interest would not pay marriage value, and we do not think it is right that the leaseholder should pay more than that same interest. Requiring leaseholders to pay more than a third party—or, in other words, enabling the freeholder to profit from the sale to a leaseholder by comparison to a third party—is to punish the leaseholder for their need to enfranchise, and therefore to affirm the very injustice we are trying to address.
The noble Earl, Lord Lytton, and many other noble Lords brought up compensation. Under our valuation scheme, the freeholder is compensated as if the lease simply ran its course. We believe that this is adequate compensation; it is sufficient to reflect their legitimate property interests.
Amendments 26 and 27 would also further complicate an already complex system. They would create a new two-tier system, with different rules for leases that were under 80 years at the time of the Act and those that fell under 80 years thereafter. This is undesirable, as it runs contrary to our stated aim to simplify this complex tenure.
Before I move on to Amendment 29, I will answer one or two specifics. First, the issue of human rights has been brought up by a number of noble Lords. The Government consider that all provisions in the Bill are compatible with the relevant convention rights and that in the case of the provisions engaging Article 8 and A1P1 any interference is justified and proportionate. There is a GOV.UK page where noble Lords can read further information on that should they wish.
The noble Baroness, Lady Deech, also brought up phasing, which is important. Following Royal Assent, we will allow time for a smooth transition to a new system, while making sure that leaseholders and freehold home owners on private and mixed-tenure estates— which is an issue—can benefit from it as soon as reasonably possible. We will also support leaseholders, freeholders, landlords and agents to adjust to and understand the new rules. We will work with delivery partners to make sure that the necessary support is in place, including through the publication of appropriate guidance.
Baroness Deech (CB)
I am grateful to the Minister for those comments. It reminds me that in the case of the 1925 legislation, the centenary of which approaches us, there were six different statutes with a long lead-in time. Apparently, many solicitors gave up practice entirely because they could not cope with the new law, so it is good to know this will be gently introduced.
On human rights, I am all in favour of the European convention; I would not want to drop it. I just find it rather dismaying that if the possible claimant were a hedge fund manager or a rich freeholder then we should not worry about them. The point about the European Convention on Human Rights is, whether you like the claimant or not, the thing must be taken as a whole; we cannot pick and choose. I would like some disassociation from the notion that hedge fund managers and rich freeholders should not have their rights considered under that convention.
Baroness Scott of Bybrook (Con)
I do not think that I will comment on that from the Dispatch Box, but the noble Baroness is absolutely right: we will make sure that it is phased in and that everybody understands it. Let us hope we do not lose too many solicitors in that journey.
Amendment 29, tabled by my noble friend Lord Moylan, would address the removal of marriage value far beyond that of a specific carve-out for charities, for example, which we are going to address specifically in the next group. The amendment would transfer the requirement to pay marriage value to freeholders in all enfranchisement claims on to the public purse. That would be unfair to hard-working taxpayers.
For the reasons I have outlined, I hope that my noble friends Lord Howard of Rising and Lord Moylan will withdraw or not press their amendments. Of course, I am always happy to meet noble Lords to discuss this further before Report.
Lord Howard of Rising (Con)
I thank the Minister for her comments. On human rights, I neither supported nor did not support them; I commented that human rights will prove a fortune for lawyers, as they argue for years and years over whether assets have been expropriated fairly or unfairly. The Minister referred to complexity; that really will bring complexity to what is at present a relatively simple situation.
When everybody is talking about this and how unfair it is on leaseholders, we should also remember that all a leasehold is is a discount on the freehold value. Somebody has paid less for that asset than they would have done had it been a freehold. If you take that logic to its full extension, why not go to the motor car industry, for example, and say that everybody who has bought their car on hire purchase should be able to have it without having to pay any more? They bought it under certain terms, as the leaseholder did—
Baroness Fox of Buckley (Non-Afl)
I suggest that one of the problems is that those who buy cars under hire purchase do not think that they are buying the car to own it. One clarification that has emerged only recently is that most people did not know when they bought a home, advertised as being sold to them, that the lease was a hire-purchase arrangement. I hope that is one of the things being clarified by this law.
Lord Howard of Rising (Con)
Sorry, but when you buy a car under hire purchase, you buy it that way: that is why it is called purchase. You are just deferring your payment over a period. That is what happened when I was in the motor industry.
I thank all those who have supported my amendment. I hope that, as the Minister said, we can return to discuss this further. In the meantime, I withdraw my amendment.
“(3A) But in a case where the freeholder is a charity and the freehold interest was vested in that charity immediately before the passing of this Act—(a) assumption 2 must not be made, and(b) accordingly, marriage and hope value are payable.”Member's explanatory statement
This amendment would provide that, where the freeholder in the case of a lease extension or freehold enfranchisement is a charity which had owned the freehold interest since before the passing of the Bill, marriage and hope value are payable.
The Lord Bishop of Manchester
My Lords, while I thoroughly enjoyed that previous group, I hope this one will not prove quite so wide-ranging. In tabling these amendments, my aim is to deal with an issue that in the charity world is specific to a small number of bodies but would severely impact the work that they do. First, I am a leaseholder myself, as it happens, as set out in the register of interests. I have been through the process of extending my lease; my flat is not in London, and it was quite a simple and cheap process. Secondly, although I am no longer on the board of governors of the Church Commissioners, it is the body that pays my stipend, owns my home and covers my working expenses, so I declare that interest too.
The commissioners are directly affected by the proposals in the Bill. They would indeed benefit from my amendments but, as has already been mentioned by the noble Lord, Lord Truscott, in the previous group, that charity is large enough to withstand the adverse impact. Smaller charities would struggle much harder to maintain their work, and it is their case I seek to plead today.
As I said at Second Reading, I wholeheartedly support the central thrust of the Bill, which is to protect leaseholders from freeholders who exploit them as a cash cow. I also agree that leasehold is ripe for bold reform. I have spoken repeatedly in your Lordships’ House on behalf of victims of the cladding scandal, as well as joining them on public platforms in Manchester. My lifelong commitment to those in housing need is well known in this House and that commitment remains undiminished.
I was unable to be in my seat on Monday and I am grateful that my right reverend friend the Bishop of Derby spoke to an amendment in my name that day. Having carefully read the report of that debate in Hansard, I have informed the Whips’ Office that I no longer intend to oppose the question that Clause 47 stand part of the Bill, nor does my co-signatory, the noble Lord, Lord Thurlow. I have taken that step as I believe my efforts at this stage are best focused on the specific issue of charities and marriage value. I apologise to noble Lords for the lateness of that decision but hope that they will take it as a sign that even a bishop can be penitent.
To focus on the subject of this group, in England there are a small number of charities, probably no more than a dozen, all of them with long and distinguished histories, which, in centuries far past, came into the possession of land lying largely within just a few miles of this House. As London grew and the land increased in value, rather than simply selling it and seeking to invest elsewhere—remember that back then there were far fewer opportunities for investment—the charities stuck with the business they knew and understood. They kept the freeholds and have used them as regular and predictable sources of income to drive their work. The charities, apart from the commissioners, of which I am aware, are John Lyon’s Charity, the Portal Trust, the Dulwich Estate, the London Diocesan Fund, Merchant Taylors’ Boone’s Charity, and Campden Charities —not a large number.
John Lyon’s Charity was gifted its land in St John’s Wood about 500 years ago. Income from being the freeholder, principally through marriage value, provides it with about £4 million per annum, which is one-quarter of its total income. Marriage value is not a matter, as we have heard, in which the freeholder can set their own arbitrary figure. It is not open to the abuses that have been associated with ground rents. It is also the case that around 80% of all marriage value is in or around the capital. This is a very London-focused issue.
The money that John Lyon’s Charity receives enables it to be one of the principal providers of youth services to some of London’s most needy children. Properties on its holdings sell for around £5 million. The leaseholders who purchase them are not London’s poor and needy. Many are not resident in the premises, which are let out to tenants. A typical leaseholder on such an estate is, as we have heard in previous debates, more than likely to be a wealthy overseas investor or corporation. I have nothing against them, but the Bill, in its present form, will transfer money used presently for youth work to these very rich organisations and individuals. It will present them with an entirely unearned windfall, hence my comments at Second Reading about this being a “reverse Robin Hood”.
I have been told that the Bill needs to be kept simple, and that making any exceptions will unnecessarily complicate it. Of course, there is already an exception for the National Trust, but I will not debate that any further. However, the simplest solution to a problem is not always the right one. In any battle between simplicity and justice, justice must always prevail.
I have also been told that it would be wrong for some leaseholders not to profit from the abolition of marriage value when others, whose freeholders are not charities, do. I will not go back as far as my good friend, the noble and right reverend Lord, Lord Sentamu, did when citing Magna Carta in the previous debate, but there is another principle that is long established: the assets of a charity should not be alienated from it at anything less than full market value, except where those assets are being applied directly to the purposes set out in the charity’s objects clause. That principle has been applied even to such flagship Conservative projects as tenants’ right to buy, in which charitable housing associations were excepted as not being forced to sell properties at a discounted value, unless that discount was being made up from elsewhere. I have not heard any case, not even an unconvincing one, as to why leaseholders of charity-owned freeholds should be treated more favourably than charity tenants.
My amendments in this group offer one way forward. They stipulate that marriage value should continue to apply in cases where the charity owned the freehold before the Act came into effect. There would be no loophole allowing charities to purchase freeholds and apply marriage value in future, nor any opportunity for other bodies to seek to register as charities thereafter. From day one, those leaseholders with charity freeholders should know exactly who they are.
We could tighten it up even further—this is still just Committee stage. It would make little difference if the exemptions applied only to charities, or their predecessors, which owned the freehold prior to 1950, which would of course exclude most housing association leasehold properties. Given how few they are, we could even name them in a schedule. We could explore how marriage value for charities might be phased out over a period of some decades, as was referred to more generally in the previous group, instead of the impact hitting in full in the first year. We can also look at ways of compensating charities in full for the loss of assets—again, an issue referred to in the previous group. I note the Minister’s comments that to fully compensate all freeholders would be an unfair burden on the taxpayer. We are talking here about something much smaller—a small number of charities severely impacted—and I beg to suggest that that can be afforded. None of this needs to slow down the progress of this much-needed Bill through your Lordships’ House.
I am grateful to the Minister, who has already met me and representatives of some of the affected charities, written to us setting out the Government’s current position, and assured us that she remains ready to meet again. I greatly appreciate her openness to such conversations. I also appreciate the Opposition Front Bench for similarly listening to our concerns. I look forward to hearing the views of other Members of your Lordships’ House, so that the charities impacted can have a better sense of where we might find ways forward to tackle this problem. In the meantime, I beg to move.
Lord Moylan (Con)
My Lords, it is a pleasure to follow the right reverend Prelate the Bishop of Manchester, and I have added my name to his amendments.
There is a great deal that I could say on this issue but, since I said most of it in the debate on the last group, I shall keep my remarks fairly short. I can add a little personal knowledge of one charity to which the right reverend Prelate refers, because it is very Kensington-based. I have no connection with it and no interest to declare—but Campden Charities was started in the 17th century by Count Campden, a devout Puritan. When he died, he left a charitable endowment, naturally in the shape of land that he owned, for the benefit of the poor youth of Kensington. His widow, when she died, did likewise with her property—hence the plural. It is Campden Charities: technically, they are two separate endowments, but they are run as one. They own land in Kensington to this day from which they have an income, and they continue to support the poor youth of Kensington—and there are poor youths in Kensington—giving them grants to allow them to continue their education and apprenticeships, and work of that sort. Their income is now going to be, to some extent by this measure, reduced and expropriated.
As I say, apparently as Conservatives we feel no embarrassment in doing this—we feel no constraint on us. We are too tender and too ginger to feel that we can expropriate the assets of ill-doers such as Putin’s friends—they are sacrosanct. But those who do good, such as charities, can have their money taken away with very little debate and handed to leaseholders who may or may not be poor and meritorious. Who knows? What is it next, I wonder, for my noble friends on the Front Bench? Shall we be stealing the widow’s mite from the poor box?
Lord Bailey of Paddington (Con)
My Lords, I want to pay tribute to Campden Charities, as I am a beneficiary of the activities of Campden Charities. I came from a community where the likelihood of one of us appearing in the Lords was next to zero, and Campden Charities is an important part of my arrival in your Lordships’ House. I point out that removing the ability of charities countrywide to provide such services would be devastating to some of the poorest communities in this country. Again, I stand here as a witness to the effectiveness of some of the work that they do.
Lord Thurlow (CB)
My Lords, it is not on the list but I did put my name to this amendment and I am very keen to support the right reverend Prelate. Much of the debate we have had so far this afternoon seems to be focused on the rich, greedy landlords versus the impoverished tenants. If we strip this away from the debate and focus on these landlords, those addressed in this amendment are charities; they do good. They are not bad actors. Their managing agents, in the case of their property investments, are not bad actors. They are responsible to the Church and they thoroughly deserve this exemption, as we were reminded very eloquently in the excellent few words of the previous speech. I proudly add my name to the amendment.
The Earl of Lytton (CB)
My Lords, I am very pleased to be able to speak to this amendment and very grateful to the right reverend Prelate for tabling it. His office asked me whether I would add my name, and I am afraid I neglected to do so. Implicit in what the right reverend Prelate and the noble Lord, Lord Moylan, said is that we have within the Bill a carve-out for the National Trust as a charity that does not apply to other charities. My understanding, and I think noble Lords will know the principle, is that this touches on and concerns the question of hybridity of a Bill. That is dangerous territory for somebody who is a non-lawyer, but none the less I raise the question, because public Bills should apply equally to all citizens and entities. If you single out one, you have to face the consequences of having a hybrid Bill.
I scanned around earlier to see how many legal minds there might be sitting around the Chamber, because I am not one and I stand to be shot down, not being a lawyer, but the matter did crop up on the levelling-up Bill and I had reason to look into that in some detail, although it was not debated in the Chamber. So I hope I am reasonably up to date in believing that the only workaround here is if the entity singled out in the legislation is what is known in the jargon of the legislator as “a class of one”. I have seen the letter dated 22 April to the right reverend Prelate from the Minister. She appears to allude to the uniqueness of the National Trust in that its lands are inalienable. I looked at the world wide web at lunchtime to see just how inalienable things actually are, because as I will explain, I am not sure that is necessarily a correct point on which to rest the case.
What I discovered, among other things, was “Battle over National Trust sale to developer”, which was a question of three acres of a meadow near Bovey Tracey in Devon in 2021. There was another freehold property on the market, and I think it was described as being a former National Trust property. I therefore assume that the National Trust is doing what other charities normally do—namely, that it gets property bequeathed to it, or it acquires property by public subscription, and that may contain bits that it wants and considers rightly inalienable, and other bits that it considers expendable. Any charitable organisation having property is required by the Charity Commissioners to make best use of its assets, and that means not having bits of deadwood floating around. It has to be organised, and that happens in any management process. So to what extent inalienability cuts into this, I am absolutely not sure.
Lord Berkeley (Lab)
I am grateful to the noble Lord for giving way. Can he explain what the word “inalienable” actually means?
The Earl of Lytton (CB)
I believe it means that it cannot be disposed of away from the purposes of the charity. I am not a lawyer and I am afraid I do not know exactly, but I understood it to be the term contained in the Minister’s letter to the right reverend Prelate, which is why I used it.
I want to make it clear that the organisation of a charity is necessarily of a commercial nature but devoted, ultimately, to its charitable purposes. It cannot be otherwise; it must use its assets optimally, and it is required to do so. I can see no discernible difference between something like the National Trust and an organisation such as the Church of England. Any such charity acquires, disposes and otherwise deals with its land assets as a matter of course. It is required to do so if it is disposing according to a set of rules, with which I am familiar, under the Charity Commission: CC 28, which state that you have to get best value for the asset, or words to that effect.
I am concerned about the potential hybridity aspect of the Bill, to which the right reverend Prelate did not refer, but it is implicit in what he is asking. It is a question that needs to be raised and is a procedural one for this House. I would very much like to know the answer, and if the Minister, who has not had any warning, cannot give it today perhaps she would be kind enough to write and copy in other noble Lords who are listening.
Baroness Pinnock (LD)
My Lords, I thank the right reverend Prelate the Bishop of Manchester for drawing our attention to the fact that when you make complex changes, the consequences cannot always be predicted and may not be ones we would wish to support.
The issue is one I hope the Minister will be able to help us resolve. The right reverend Prelate cited the balance between justice and simplicity. He said to always come down on the side of justice, and so would I. However, in this case, we have competing justices. The principle being advocated throughout the Bill is the justice of rebalancing the rights and responsibilities between freeholders and leaseholders to the benefit of leaseholders—a principle most of us support. The difficulty is that the justice we support has a consequence we would not support: reducing the funds available to charities whose income is based on freehold property. So, there is a conundrum for us.
The right reverend Prelate listed the charities that he thought were affected by these changes. I noted they were all London-based, no doubt because of land values in London. It is important for us to know whether this is a more extensive problem, or a London-based one. The first question we need to ask is, what other charities will be affected?
I do not have an answer to the next question: is there a workaround that mitigates the effect of the principal changes the Bill seeks to implement? I am sure the bright young things in the department could come up with a way of mitigating the outcome, so that charities do not lose their income, which is in nobody’s interest. I am confident that somebody will come up with a great way of overcoming this problem, while retaining the other justice: fairness towards leaseholders.
So, there are questions but no answers, and I look forward to hearing what the Government might be able to do.
Baroness Taylor of Stevenage (Lab)
My Lords, this debate has again outlined what a huge benefit it would be to have proper, detailed pre-legislative scrutiny of Bills such as this. I hope that will take place when we get a commonhold Bill, whoever brings it forward.
In principle, I am in much of the same mind as my noble friend Lord Truscott when it comes to special pleading on marriage value. I fear that the amendments in the name of the right reverend Prelate the Bishop of Manchester are in danger of being an almighty sledge- hammer to crack not a very big nut, and my comments are made on that basis.
First, I thank the right reverend Prelate and Lynne Guyton, from John Lyon’s Charity, for meeting me yesterday to explain the issue in more detail. The issues set out by the right reverend Prelate affect a very small number of charities, such as the ones in central London that he has outlined. They have been in place for centuries and, as was explained to me, use marriage value on lease extensions as a critical contribution to the funding of their charitable work. The leaseholders of these properties are largely offshore companies or non-residential wealthy owners, so the argument put forward by the charities is that, in this case, the benefit of marriage value has what the right reverend Prelate described as the “reverse Robin Hood effect”. The benefit currently accrues to the beneficiaries of the charity, such as youth clubs, arts projects, emotional well-being initiatives, supplementary schools, parental support schemes, sports programmes, academic bursaries and similar projects. I thank the noble Lord, Lord Bailey, for his personal testimony in this respect.
The fear is that, after the Bill has passed, the benefits will then accrue to the said wealthy offshore companies and leaseholders. I believe the Government have been in conversation with the charities concerned and have promised to look at what can be done to ensure that a very limited exception is considered. However, it is our understanding that this has not been forthcoming, and I hope the Minister will tell us where the Government have got to. Have the Government carried out any impact assessment of the way the Bill will affect charities that have long-standing property endowments solely for the purpose of enabling their charitable aims?
However, as with group 2, these amendments would amend Schedule 4, which is where the market value element of the premium for any enfranchisement claim is determined. The second amendment tabled by the right reverend Prelate the Bishop of Manchester has also applied it to the later section on loss suffered, in paragraph 32, which refers back to assumption 2. Straightforwardly, these amendments would disapply assumption 2 for charities, and thereby include marriage and hope values in determining market value.
As I said during the first Committee sitting on the Bill, we genuinely appreciate the intention behind supporting what is argued to be the unique circumstances of this small group of charities. However—and it is a big “however”—the amendment as drafted is almost certainly far too broad to encompass only their very unusual circumstances. Perhaps the Government will continue to work with right reverend Prelate and the charities concerned to see what can be done to support them; otherwise, we fear that a general amendment such as the one tabled could open a big Pandora’s box and encourage those wishing to avoid the new system of enfranchisement—which we support, of course—and there may be plenty who wish to do so, to misuse charitable status for that purpose.
The noble Earl, Lord Lytton, referred to exemptions created for the National Trust, which the Government felt were justified. Presumably, the Government feel that some exemptions are justified.
While we do not feel that the amendment as tabled would avoid some of the obvious pitfalls of creating a loophole in the stated aims of the Bill—with which we agree—I look forward to the response of the Minister about whether any progress can be made in this respect.
Lord Gascoigne (Con)
My Lords, I thank the right reverend Prelate the Bishop of Manchester, and my noble—and actual—friend Lord Moylan for their valuable contributions at Second Reading, and for the amendments that they have put forward which seek to alter the Government’s current position on marriage value and hope value. I say on behalf of my noble friend the Minister that we are grateful for all the time and engagement with the right reverend Prelate on this issue, along with the Church Commissioners and the charities which she has spoken to today.
In addition, we are grateful to all noble Lords who have spoken on this group and on the somewhat excited group previously. As has been noted, a lot of the points that I will speak to were covered in the previous discussion. I also say to the right reverend Prelate that we are always happy to meet. In answer to the noble Baronesses, Lady Taylor and Lady Pinnock, the Minister is more than happy to engage with any noble Lord who is impacted by this, as well as charities, to discuss it further.
Amendments 28 and 46 would exempt freeholders who are charities at the time of the Bill receiving Royal Assent from the removal of the requirement for leaseholders to pay marriage value, and for hope value to be payable. Before I go into detail, I reiterate the Government’s wholehearted recognition of the vital role and work that charities provide in our communities up and down the land, as has been noted by my noble friend Lord Bailey.
However, as the noble Baroness, Lady Scott, explained previously, we do not believe that leaseholders should pay marriage value. The leaseholder needs to enfranchise to prevent financial loss from the running down of their lease, and to prevent their losing possession when it ends. As has been said, we do not believe that their position, which concerns their security in their home, should be used as a basis for requiring them to pay more than a third party to enfranchise, nor that the freeholder should profit by way of windfall by selling to the leaseholder as compared to a third party. Under our valuation scheme, the freeholder is compensated as if the lease ran its course.
The good work of a charity is separable from its funding. Requiring leaseholders of charities, for no other reason than the coincidence of the nature of their freeholder, to pay marriage value when other leaseholders do not have to would be, I am afraid to say, unfair. Granting exemptions would also create an unbalanced two-tier system. By removing marriage value across the board, we will level the playing field and ensure that we are widening access to enfranchisement for all leaseholders, both now and in the future.
There have been a couple of references to the National Trust. Briefly—as I know it has been covered previously in this debate—it is a different scenario given that its land is inalienable and cannot be sold, yet it is not exempt from the removal of marriage value. I am not aware of the case that the noble Earl, Lord Lytton, mentioned, but I am certainly more than happy to look into it for him. I assume—and it is only my assumption—that it is because it is for the National Trust as an entity to decide, but I assure the noble Earl that I will look into it.
The noble Baroness, Lady Pinnock, asked about other charities that may be impacted by this beyond those that we have discussed. Again, I am not aware of any, but I am sure that that work has been done by the department. I will certainly take it back and investigate. Further to the point made by the noble Baroness, Lady Taylor, it is something on which we will continue to engage with any noble Lord or any charity that is impacted, as we have done with the right reverend Prelate.
For these reasons, I respectfully hope that the right reverend Prelate the Bishop of Manchester and my noble friend Lord Moylan will understand and therefore not press their amendments.
Lord Moylan (Con)
Before my noble friend sits down, perhaps I may address a point he made earlier which was made also by my noble friend Lady Scott of Bybrook. The idea that the Government are peddling, that if a landowner sells a leasehold or freehold interest to a third party, they do not receive marriage value, is to assume gross inefficiency of markets and complete ignorance of market participants. It is of course true that the purchaser would not pay marriage value as a separate sum, but the purchaser is perfectly aware of the potential for marriage value and will pay a price that incorporates that. To assume anything else is to assume that all those clever and evil hedge fund managers are too dim to notice what is going on. It simply is not the case. The line the Government are peddling is simply unfounded in fact and reality.
Lord Gascoigne (Con)
Obviously, I completely respect my noble friend, but I think I have answered that point.
The Lord Bishop of Manchester
My Lords, I thank all noble Lords who have taken part in this debate, which has been somewhat less emotive than the previous one. I am grateful to the noble Lord, Lord Moylan, for his support, and for his description of the good work that is done by the Campden Charities for young people in Kensington. I am particularly grateful to the noble Lord, Lord Bailey of Paddington, who spoke movingly of how that same charity has been part of what has enabled him to become the great asset he is to your Lordships’ House today, and to the noble Earl, Lord Lytton, for his helpful and insightful questions.
I am grateful to the noble Baroness, Lady Pinnock, for asking whether other charities, including those outside London, are affected. While I cannot guarantee that my list is exhaustive, I am pretty sure that if there are any that we have missed, they would quickly come forward, but I do not think that there are many.
I thank the noble Baroness, Lady Taylor of Stevenage, both for her meeting yesterday and for her support for the matter being further considered. Can we find a workaround that does not disapply the whole principles of the Bill, but which deals with the problem that these particularly good causes are going to suffer as things stand? I am very happy to look at some tighter drafting, as she suggested. I am grateful to the noble Lord, Lord Gascoigne, for his response, and for his willingness, and that of the noble Baroness, Lady Scott, to continue to engage with us on this matter.
In the previous debate, we were told that compensation for loss of marriage value would be too much of a strain on the taxpayer. We are talking about a very much smaller amount here, and I wonder whether that would be a course that we could continue to pursue in further conversations before Report. For now, I beg leave to withdraw my amendment.
Baroness Scott of Bybrook
(a) the relevant freehold on the transfer of a freehold house under the LRA 1967, or(b) the notional lease on”Member's explanatory statement
This amendment would correct the references in paragraph 18 to what is being valued under Schedule 4.
Member's explanatory statement
This changes the terminology used in paragraph 21(2)(a) so that the correct defined term is used.
Member's explanatory statement
This amendment would avoid the “current lease” (the terminology otherwise used in Schedule 4) being referred to by a different term (“lease being valued”) in paragraph 25.
Member's explanatory statement
This amendment would avoid the “current lease” (the terminology otherwise used in Schedule 4) being referred to by a different term (“lease being valued”) in paragraph 25.
Member's explanatory statement
This amendment would avoid the “current lease” (the terminology otherwise used in Schedule 4) being referred to by a different term (“lease being valued”) in paragraph 25.
Member's explanatory statement
This amendment would avoid the “current lease” (the terminology otherwise used in Schedule 4) being referred to by a different term (“lease being valued”) in paragraph 25.
Member's explanatory statement
This amendment would avoid the “current lease” (the terminology otherwise used in Schedule 4) being referred to by a different term (“lease being valued”) in paragraph 25.
Member's explanatory statement
This amendment would avoid the “current lease” (the terminology otherwise used in Schedule 4) being referred to by a different term (“lease being valued”) in paragraph 25.
Member's explanatory statement
This amendment would avoid the “current lease” (the terminology otherwise used in Schedule 4) being referred to by a different term (“lease being valued”) in paragraph 25.
“(10A) If section 3(3) of the LRA 1967 applies to the current lease (successive leases treated as a single lease), sub-paragraph (9) is to apply only if the one of those leases which is in effect at the valuation date meets the condition in sub-paragraph (9)(a) or (b).”Member's explanatory statement
This modifies the application of paragraph 25 where successive leases are “chained” to constitute a long lease under the LRA 1967.
Member's explanatory statement
This amendment would avoid the “current lease” (the terminology otherwise used in Schedule 4) being referred to by a different term (“lease being valued”) in paragraph 25.
Lord Borwick
Bank Rate at the time that the notice of intention to enfranchise is served + 5 %
Member's explanatory statement
This amendment seeks to make the process for setting the deferment rate more efficient through using a fixed formula based on Bank Rate, rather than requiring the Secretary of State to set the deferment rate in regulations.
Lord Borwick (Con)
My Lords, I first declare my interest in my home, which is a long-leasehold property in London. It would not normally be declarable, but in the case of this Bill, this should be an exception. I also declare my interests as in the register in property companies, some of which are developing or have developed houses.
While I am not a great fan of a Conservative Government forcing freeholders to sell land to lease- holders, that principle sailed many years ago, and my Amendments 41, 43, 44 and 45 are designed to simplify the process in this Bill, reducing the costs for the department. They would speed up the process, perhaps by as much as 18 months, making it quicker and cheaper for the Government.
The present structure of the Bill has the price of the enfranchisement calculated by a system laid out in Schedule 4, under which the single most important factor is the deferment rate. I believe that the deferment rate is more important to the size of the actual price than the abolition of marriage value or any other factor.
What is the deferment rate? Some noble Lords believed that it must be in the Bill, but that is not so. The deferment rate, an interest rate by another name, is to be decided by the Secretary of State for DLUHC by way of statutory instrument. When will this be published? We do not know. Departments take a different time for SIs, and some take as long as five years. I have been criticised in the past for being acidic about the Department for Transport taking as long as five years to bring forward an SI on disability matters. The point is that it is certainly not instantaneous.
The interest rate is to be set by the Secretary of State at a date to be announced in due course. I could be rather difficult and quote my right honourable friend from another place, Michael Gove, on the subject of setting interest rates. He has been a supporter of the principle that interest rates should be set not by the Chancellor but by the independent Bank of England. For many years we have had that as a common policy between all parties, yet the Bill reverses that policy, at least in respect of the deferment rate.
The Minister has said that the rate will be a market rate for about 10 years, amended only by another SI. I am afraid that markets do not work like that—they alter fast and furiously. Over the last 10 years, the national rate has varied quite widely, between 0.1% and today’s 5.25%. Yet the department will fix it for the next 10 years, subject only to review at about a year’s notice. If the department was that good, it could make a fortune in the markets rather than create legislation. It cannot be done accurately, but the department still wants to do it.
I submit that my solution is better: there should be a variable rate, varying automatically as a simple margin over base rate. We can have a debate about what that margin should be. I have proposed 5% as a probing amendment. The leaseholder will, in almost all cases, be a worse credit risk than the freeholder, and I have asked several banks about their prospective price for a loan to finance an enfranchisement. I have had a variety of suggestions, as each price will of course depend on the particular circumstances, but a margin of 5% over base rates seems to be a reasonable guess.
There are occasions when leaseholders of flats in a block have enfranchised but one in 100, say, has not come up with their share. It is not unknown for the freeholder himself to provide the finance, and I am told that a margin of 5% over base is considered reasonable by freeholders when they are the lenders.
The first thing would be to agree that the rate should be variable, to take account of current financial circumstances. My Amendment 41 achieves this. The second thing is to agree that the margin on the rate over bank rate should reflect the leaseholder’s cost of borrowing, which is consistent with the rest of the terms of the Bill, but at present I am not entirely certain what that margin should be. I look forward to other noble Lords expressing their opinions.
Amendments 43 to 45 are either consequential or the equivalent measure for leaseholds to be extended rather than enfranchised. My noble friend Lord Forsyth, who is not in his place, was going to support this proposal and may put his name to it later, if it comes forward on Report.
The noble Lord, Lord Truscott, mentioned this amendment at an earlier stage. I did not know whether I should stand at that moment or wait. I hope he will forgive me for replying to his point now. The current rate set by the tribunal is 4.75% or 5%—the noble Earl, Lord Lytton, can immediately correct me if I am wrong—so 10.25% may be wrong, but so is 4.75% or 5%. The noble Lord, Lord Truscott, asked whether a return of 10.25% is available, but the question should be whether any lenders charge as much as 10.25%. I believe that they do, so his argument is actually an argument for variable rates. I beg to move my amendment.
Lord Moylan (Con)
My Lords, I rise to support, in general, the principle of what my noble friend Lord Borwick has said, but I am not entirely sure that we need to go into this new world that he is creating when we have a perfectly satisfactory world that already exists. I hasten to add that I am not a chartered surveyor, and everything I say is subject to correction by Members of this Committee who understand these matters better than I.
Lord Young of Cookham (Con)
My Lords, I am grateful to my noble friend Lord Borwick for allowing what I hope will be a short debate on the deferment rate. I am conscious that I am a very inadequate substitute for the noble Lord, Lord Forsyth.
The deferment rate is very important, as my noble friend Lord Moylan explained. It is the current value of the vacant possession of a flat when the lease expires. According to what deferment rate you choose, it affects the premium that is paid by the leaseholder. My understanding is that the current deferment rate was set in a Court of Appeal case in 2007—the so-called Sportelli case—which ended up with the two rates that I think my noble friend Lord Moylan referred to: 4.75% for houses and 5% for flats. That was fixed nearly 20 years ago. There was a recent appeal decision in a Welsh court—I have the name in front of me but, like many Welsh names, it has a large number of consonants and very few vowels, so I am afraid that I cannot pronounce it. The appeal failed because the land valuer was not an economist, but it opened the way to an appeal to alter the rate. My noble friend Lord Moylan touched on my first question: when will the Secretary of State come to a decision? It affects what leaseholders do at the moment: whether they should wait for a preferential rate, which might be fixed by the Secretary of State, or whether they should try now, in case it moves the wrong way.
I want to raise a totally different point. At the moment, there already is a deferment rate set by the Government under the personal damages Act 1996. Using exactly the same basis as a deferment rate for leasehold, the Lord Chancellor sets the deferment rate for personal injury damages. Unlike what is proposed in this Bill, that rate changes quite often. In 2017, the rate was changed, and it was a negative rate for some time. It was changed again in 2019, and then again in 2023. It is now 0.5% for short-term cases and 3% for long-term cases. My question for the Government is: will we have two separate Secretaries of State fixing deferment rates at different times and coming up with different rates, or is there a case for rationalising the Government’s view as to what is an appropriate deferment rate?
One opportunity would be for the Secretary of State simply to replicate what the Lord Chancellor does. The Lord Chancellor has recently had a consultation on how to fix deferment rates and has come up with a short-term rate and a long-term rate. It seems odd to me to have two totally separate systems in the Government for basically coming to the same decision—that is, deciding what the long-term rate is on a risk-free investment. I wonder whether my noble friend the Minister has had discussions with the Lord Chancellor’s department to see whether we can have a common approach to this important issue.
Baroness Pinnock (LD)
My Lords, for me, this is a very technical set of amendments, but they are very important. As we have heard, this issue can have significant implications.
I always go back to first principles. One of the aims of the Bill is to make enfranchisement cheaper than it is currently, and so more readily available. However, as we have heard, that will entirely depend on the deferment rate and how it is set. My understanding was that the current deferment rate was set by the Court of Appeal in 2007, as the noble Lord, Lord Young of Cookham, said. The debate is around whether it is right for that to continue; whether another process should be used, such as that proposed by the noble Lord, Lord Borwick, in his amendment about using the bank rate as a base for setting a deferment rate; or whether, as in the Bill, the responsibility is passed to the Secretary of State to determine the deferment rate. I have to agree with the noble Lords, Lord Moylan and Lord Young of Cookham, that the latter does not seem right.
When I was investigating the deferment rate issue, I noticed that Homehold Services Ltd gave evidence to the Commons Public Bill Committee that was very telling. It criticised the fact that the “applicable deferment rate” was referenced throughout the Bill
“without specifying what this will be”.
It provided an example of what effect a change in the deferment rate could have on the cost of enfranchisement. It said:
“A lease extension … on a £200k flat with 80 years unexpired and no ground rent would be c. £4,000”.
That is the example given by Homehold Services Ltd; as it is one of the experts, I thought it might be right. It continues:
“If the deferment rate was reduced from 5% to 4%, the premium would increase to c. £8,500. At 3.5% it would be … £12,000”.
Those small changes in percentages have very high consequences for the leaseholders. This is important—that is what the evidence told me when I read it.
The argument from Homehold Services Ltd was that the deferment rate must be set no lower than that set by the appeal judgment in 2007. Otherwise, the consequence is that the rate can escalate considerably, as the noble Lord, Lord Moylan, pointed out. The cost of enfranchisement would increase, removing the ability of many leaseholders to continue with the process—contrary to one of the objectives of the Bill. Can the Minister say what consideration the Government have given to the deferment rate?
The noble Lord, Lord Young of Cookham, said that the Chancellor’s department has had a consultation on this and come up with some figures. Why are those not being adopted in this instance to set the rate in the Bill? As we have heard, it is very important to know exactly what the deferment rate will be. I do not believe that it is satisfactory to leave the applicable deferment rate to be set by a statutory instrument some time in the future. Surely, if the Government’s intentions are as they are set out in the Bill—to make it cheaper for leaseholders to enfranchise—one of the key rates must be this one. Therefore, I would have thought that we would want to see it set during the course of this Bill, rather than wait for a statutory instrument.
I have a lot of sympathy with the arguments that have been made by the mover of the amendment and others about the need for certainty here, rather than a principle and uncertainty as to the exact figure at which the deferment rate will be set.
Lord Khan of Burnley (Lab)
My Lords, I will speak to Amendment 42 in the name of my noble friend Lady Taylor of Stevenage, which was well supported by my noble friend Lord Truscott in his earlier remarks.
Deferment rates are a phenomenally complex area to understand, and the standard valuation method in Schedule 4 is extremely technical. The Law Commission set out options. It did not make recommendations, but the Government have chosen to allow the Secretary of State to prescribe the applicable deferment rate. I thank the noble Lord, Lord Borwick, for his contribution and for seeking to make the process for setting the deferment rate more efficient and asking for more clarity and certainty.
Our amendment is clear and would ensure that, when determining the applicable deferment rate,
“the Secretary of State must have regard to the desirability of encouraging leaseholders to acquire their freehold at the lowest possible cost”.
We understand that the 2007 Cadogan v Sportelli judgment, which has broadly set deferment rates, was made in the context of 0.5% interest rates. If the Government are minded to remain of the view that the Secretary of State should fix the deferment rates, how best should they do that? Although it may work in London, what would need to be taken into account for other parts of the country? Is there a need to set multiple rates for different parts of the country to deal with the variations?
Baroness Scott of Bybrook (Con)
My Lords, I thank the noble Baroness, Lady Taylor, and my noble friend Lord Borwick for Amendments 41 to 45 in this group. I turn first to the series of amendments tabled by my noble friend, and I thank him for his constructive engagement with me and for the time he spent in trying to address this vital matter.
Amendments 41 and 43 to 45 would seek to replace the current provisions in the Bill, which will allow the Secretary of State to set the deferment rate used in enfranchisement valuation calculations, as well as removing a requirement to review these rates every 10 years. Instead, these amendments would require the deferment rate to be prescribed by a formula, which would be based on the Bank of England’s base rate plus 5%. The specific deferment rate would then be calculated based on the date of the leaseholder’s enfranchisement claim.
As I have discussed with my noble friend Lord Borwick, this is one potential solution for setting the deferment rate, but it is not the only one. I am aware of the importance of the deferment rate to both leaseholders and freeholders, and it is important that we take the time to take this decision carefully. There are serious consequences with any attempt to prescribe the methodology for setting the deferment rate in the Bill; this would tie the hands of this Government, and successive ones, in terms of adapting the approach if the need were to arise. It is also important that the Government retain their role in providing balance between market stability and the need to review the rates. It is the Government’s view that the proposals in the Bill enable this balance, and it would therefore be inappropriate, at this stage, to prescribe in the Bill the methodology for setting the deferment rate.
These deferment rates are a really important part of the Bill. At the moment, it is difficult for leaseholders to understand how much they may have to pay to the landlord when they enfranchise. Different rates are used across the country and across the industry on a case-by-case basis. The deferment rate is used to calculate the reversion value, and this provides the landlord with the compensation for the value of the freehold property with vacant possession in the future; that is, at the end of the lease. Prescribing these rates and using them to develop an online calculator, which will help leaseholders understand what they may have to pay, is also important. These rates will be prescribed at a market value to ensure that the amount that landlords are compensated reflects their legitimate property interests. These are important decisions.
The noble Lord, Lord Moylan, asked about the timing; this could take years and years, but we do expect the majority of these reforms to come into effect in 2025-26, as set out in the Bill’s impact assessment. Obviously, this may change, but that is what we expect. We will continue to carefully review all the information and views shared on the setting of rates, and I welcome any further thoughts that the Committee has on this matter.
Lord Moylan (Con)
Does my noble friend the Minister have a moment to give a response to my query about whether the Government regard the deferment rate as a real interest rate or one that incorporates inflation? I ask because the calculation, as I understand it, assumes zero inflation in the value of the asset over the time to the point at which it is being valued, and that a real interest rate is therefore appropriate. Is that her assumption or is she assuming an inflation-based interest rate, which, I suggest, would have consequences for how the asset is valued at the end of the term during which it is assessed? Does she have any comments on that?
Baroness Scott of Bybrook (Con)
I reiterate that this is why we would like the Secretary of State to be involved because it is complex and there needs to be a balance. I will come back to the noble Lord with any further comments, but this is why we would prefer the Secretary of State to have this role, to make sure that we are balancing the market at the time with leaseholders’ representation.
I turn to Amendment 42 from the noble Baroness, Lady Taylor, which would require the Secretary of State, when prescribing the deferment rate used in the enfranchisement valuation calculations, to set this at a level that would encourage
“leaseholders to acquire their freehold at the lowest possible cost”.
I assure the noble Baroness and the Committee that the Government are committed to making enfranchisement cheaper and easier and that these reforms will achieve that aim.
I understand how vital setting rates is for enfranchisement premiums. This very proposal was discussed in the other place, and I reiterate the importance of not constraining the Secretary of State via the Bill when making such important decisions. We have been clear that we will set the rates at the market value and recognise that many different elements need to be considered when setting them, as I have just reflected to my noble friend. We continue to have conversations with all relevant stakeholders. As I said, I welcome members of the Committee sharing their views on this matter so that the Government can take them into consideration when making a final decision. For these reasons, I ask my noble friend—
Lord Borwick (Con)
I am sorry to interrupt my noble friend again. One of the problems I see with this is the great difficulty in making a change except through statutory instruments, and the amount of time this takes. Whenever the Secretary of State decides that a change must happen, it must happen more quickly than through the route laid down in the Bill. At present, the amount of time doing the statutory instrument, and the fact that we cannot debate its details or change it, makes the whole thing very unfortunate.
There is something to be said for the point, made by my noble friend Lord Young of Cookham, that there is a route through that is used by the Lord Chancellor. I had not appreciated that the deferment rate had so many different implications. I am sure we could call it something different for this purpose, and thus carve out the rate for property matters. But, with a delay of one year or more between a decision and taking action, it is a very difficult subject to structure using the statutory instrument route.
Baroness Scott of Bybrook (Con)
My noble friend is absolutely right, and that is why we have not made this decision. We want to get it right, and that is why we listened to everything everybody said in this place and the other place. We will come back to my noble friend with our deliberations. This is important, and speed will also be important: you cannot take a year to change things that need changing, because of the market. They have to be dealt with in a timely manner.
Regarding my noble friend Lord Young’s point about the Lord Chancellor, I will take it back to the department and see whether any discussions have been had on a common approach, and if not, why not, and whether we should have those discussions.
For the reasons I have given, I ask my noble friend to withdraw the amendment.
Lord Borwick (Con)
My Lords, I thank everybody for their constructive points and for the education that I have received through this process. I beg leave to withdraw my amendment.
Member's explanatory statement
This amendment would leave out the proposed new section 19C of the Leasehold Reform Act 1967, and so ensure that leaseholders are not liable to pay their landlord’s non-litigation costs in cases where a low value enfranchisement or extension claim is successful.
Baroness Taylor of Stevenage (Lab)
My Lords, we welcome the new costs regime provided for by provisions in the Bill, because, as things stand, there is no balance of power: the playing field is tilted very much in favour of landlords rather than leaseholders, and that needs to be addressed. Under the current law, leaseholders are required to pay for certain non-litigation costs incurred by their landlord when responding to an enfranchisement or lease extension claim. That obviously does not reflect normal practice in residential conveyancing, where each party bears their own costs. I hope that noble Lords will forgive me for explaining our rationale for this amendment in a bit more detail than is customary for me, but it is a point of real principle, and some technical detail is warranted.
Noble Lords will remember that I quoted from a letter I had received from elderly leaseholders on the first day of Committee. I have received further representations in relation to excessive charges for non-litigation costs, which I will read out as they are a perfect illustration of the problem these amendments seek to address. I appreciate that this example relates to a ground rent dispute, but it would be the same issue for an enfranchisement or extension claim.
“After the Freeholder asks a ridiculous sum in increased ground rent with their ground rent review (every 4 years) this causes the leaseholder to then employ both a Solicitor and Surveyor to counter this high valuation which incidentally had no calculations to back it up. Therefore so far this year having paid £3,000 for a surveyor to dispute this figure and a lawyer costing so far £3,600, the freeholders haven’t even tried to justify their huge increase and valuation. Now after 4 months having passed and the 3-month negotiation ended and the Freeholders have made no effort to take part, negotiate or even contact our surveyor they now say this increase is NOT agreed …
If we lose with the third-party surveyor’s estimate and the increase is even only minimal we still have to pay the third-party surveyor’s fees plus the freeholder’s lawyer’s fees and our own lawyer’s fees, therefore it could end up costing as much as £15,000. Plus if they look to backdate the increase over the past 6 years’ Ground Rent charges this could amount to who knows what?
Even if we win we still lose a great amount of costs and fees plus we cannot look forward to a reduction in Ground Rent as the lease states an ‘Upward Only Revision’. Therefore freeholders know they can put in totally unrealistic figures for rent increase of whatever they want as the leaseholders are on a hiding to nothing … until they throw in the towel.
Additionally, to lodge a dispute at the 1st Tier Tribunal for any high unreasonable charges it is necessary to not pay the bill in question otherwise it is deemed you have agreed to this payment but then withholding payment runs the risk of forfeiture”,
which we will discuss later today. My correspondent goes on to plead that the issue of ground rent increases finally be resolved by the Bill, but their case illustrates the financial and legal minefield that leaseholders face.
The argument for imposing non-litigation costs has always been that, in enfranchisement or lease extension claims, a landlord is being forced to sell his or her asset, which would justify a departure from the practice in open market sales of residential property. However, when it comes to lease extensions or freehold purchases, a landlord is obviously not simply being compensated for the value of the asset they are being compelled to sell. They are instead securing, through the payable premium, a share of the profit to be made from selling to the leaseholders in question. In addition, as things stand, through capitalised ground rents, they are extracting funds from leaseholders over long periods—often decades —prior to securing that profit share, for no explicit services in return.
The valuations of lease extensions and freehold acquisitions under the existing statutory regime rely on prices agreed via an open market transaction, but those valuations do not account for the fact that leaseholders are expected to pay their landlord’s non-litigation costs. Therefore, landlords in enfranchisement or extension transactions receive the price for the asset being sold, which reflects the market rate without non-litigation costs factored in, and their reasonably incurred non-litigation costs on top.
In its 2020 final report on enfranchisement, the Law Commission is very clear that the effects of law and current market practice are that
“the landlord is over-compensated for the non-litigation costs that he or she has had to incur in order to transfer the interest to the leaseholder”.
In addition, many of those who are better resourced could use the fact that such costs are borne by leaseholders as leverage in negotiations on the price of the lease extension or freehold acquisition, confident that the expense of challenging those costs in a tribunal would dissuade many leaseholders from doing so.
The Opposition are clear that freeholders should not receive compensation in respect of non-litigation costs. A landlord selling his or her asset and receiving a share of the profit as a result is not sufficient justification for departing from an arrangement in which reasonable non-litigation costs are factored into the ultimate price. The decision to enfranchise or extend a lease is often not discretionary; it is often a requirement brought about by the fact that a lease is due to expire, because the payable premium is rising as the lease shortens, or as a result of the decision to move or remortgage.
We therefore fully support the intention in the Bill to provide for a new regime based on the principle that leaseholders are not required to pay the freeholder’s non-litigation costs in these circumstances. We note the Law Society’s concern that landlords are being asked to bear their own non-litigation costs, despite the fact that the proposed standard valuation method provided for by Schedule 2 will lead to payable premiums below full open market value because it caps the capitalisation rate. However—and this point touches on one of our previous debates—political decisions set the rules of the game for market competition. In our view, it is simply not the case that there is some kind of inherent market value for premiums entirely independent of legislation in this area. Every sale of a flat and every lease extension process relating to a flat since 1993 has been undertaken against the backdrop of the 1993 Act, which reduced ground rents to a peppercorn.
The market value for premiums is shaped by the laws that the House passes. It is right in principle that, to achieve the Bill’s objectives of making it cheaper and easier for leaseholders in houses and flats to extend their lease or buy their freehold, leaseholders do not pay non-litigation costs in addition to the payment of a premium, as determined by the new method proposed in Schedules 2 and 3. We believe that leaseholders should not be liable for these costs as a result of an enfranchisement or lease extension claim on principle, irrespective of the method by which the premium is calculated. That is why we take issue with the clause as drafted, because it does not protect all leaseholders from liability for costs incurred.
The clause as drafted entails only a selective extension of rights in this area, because it does not ensure that all leaseholders will no longer have to pay their freeholder’s costs when making a claim. Instead, it makes exceptions to the general rule, whereby the price payable for the freehold or extended lease is below an amount to be prescribed in regulations.
We understand the rationale—namely, that leaseholders should pay a freeholder’s non-litigation costs in such circumstances, so that low-value claims do not cost the freeholder money. The Minister has been very clear that the Government believe that this must happen to ensure that the process is fair for both sides. We also appreciate that there are risks in prohibiting a landlord from passing on non-litigation costs to leaseholders in cases where they would be required to spend more in carrying out the transaction than they received for the asset. The Law Commission highlighted a number of those risks, including the incentive created for landlords not to co-operate with a claim, or for them to transfer the low-value freehold into the name of a shell company and then liquidate the company.
However, we are concerned that exempting claims below a certain value will create a different set of practical problems. These include costly and time-consuming disputes in cases in which the price payable is close to the level of the non-litigation costs in question for low-value claims, and the potential for landlords to game the system by arguing for a price payable below the threshold in order to secure both it and associated non-litigation costs because of the burden of disputing the amount.
Taking a step back, we fail to see the logic in the Government’s position. On the one hand, they seem to be ignoring the Law Commission’s recommendations in relation to costs; they have chosen to provide for a general rule that leaseholders are not required to make a contribution to their landlord’s non-litigation costs, but have not chosen to adopt a valuation methodology that seeks to reflect open market value, which was the commission’s stated prerequisite for such a rule. On the other hand, they are following strictly the commission’s recommendations in respect of low-value claims.
Put simply, we believe that, by means of this Bill, we should take the political decision to remove any exception to the general rule that leaseholders are not required to pay the freeholder’s non- litigation costs in such circumstances. I hope the Minister will give this careful consideration; otherwise, this section of the Bill has the potential to undermine the stated aim to increase, simplify and reduce the cost of enfranchisement. I beg to move.
Baroness Thornhill (LD)
My Lords, when we started the debate today, I felt like I was wading in mud. I feel I am still in the mud—it has got thicker, and the fog has come down. This is a complex and complicated Bill. I have really enjoyed listening to the arguments and the debate; I have already learned a lot. Report will be a lot better—certainly for me.
I will try to keep my remarks short and my questions simple in order to seek clarification. The noble Baroness, Lady Taylor, has, in her own style, ably illustrated the issue and set out the case for her amendments in great detail. I will not repeat those—some paragraphs have already been knocked out of my speech.
The newly inserted Sections 19A and 89A set out the general rule that neither a current nor a former tenant is liable for any costs incurred by another person because of enfranchisement or a lease extension claim. However, new Sections 19C and 89C set out the exceptions to this rule. The debate is around whether these exceptions are justified. We are seeking the Government’s justification for this variance. Amendments 47 and 48 from the noble Baroness, Lady Taylor, would delete these exceptions, so that leaseholders would not be liable to pay their landlord’s non-litigation costs under any circumstances. We agree. Each side should pay its own costs; we are unsure as to why this is not the case.
When this was debated in the Commons, the Government argued that, while the main aim of the changes to the costs regime was to address the imbalance of power that has existed between the landlord and tenant, they had a desire to ensure fairness on both sides. Sections 19C and 89C prevent the landlord incurring a net financial loss when leaseholders exercise their rights to enfranchisement and lease extension, thus acknowledging that this really is a balancing act. We look forward to the Minister’s comments as to how the Government have managed to keep the scales level.
I agree with the comments made in the debates on the last two groups. Some of the problems are because much too much is being left for later regulations, in either guidance or SIs. I believe that we should have had a clear government position on issues as important as landlord costs, deferment and capitalisation rates. This is still too vague. Such uncertainty is bad, not only for the leaseholders but for us parliamentarians who would hope to scrutinise and improve the legislation. However, I note the explanation from the Minister in the last group.
The Law Commission’s report highlights that the current law means that the landlord is overcompensated for these non-litigation costs. We support the Government in saying that costs should be balanced. It has to be said that these amendments raise important questions as to whether new Sections 19C and 89C undermine this aim. The noble Baroness, Lady Taylor, has made a good case to that effect.
Lord Gascoigne (Con)
My Lords, I thank the noble Baroness, Lady Taylor, for her Amendments 47 and 48, which seek to remove the exception on costs arising from low-value lease extension or freehold acquisition claims. While the Bill includes a new general rule that each side will bear its own costs, we believe that there need to be exceptions in certain circumstances so that the regime is fair for both sides. The low-value cost exception entitles landlords to receive a portion of their process costs from leaseholders in low-value enfranchisement and lease extension claims for flats and houses respectively. We believe that these are necessary provisions that protect landlords from unfair costs.
Baroness Taylor of Stevenage (Lab)
I thank the noble Lord for that reply to my amendments. I am grateful for his reassurance about the costs relating to the difference between the low-value claim and where it ends up. That is a useful clarification. However, we will think through the possible implications of this before we get to Report. It seems iniquitous that the leaseholder is taking all the burden of any reduction in the value of the property and in the value of the lease, while the freeholder is exempted from that because they will then get their costs paid if that happens to be the case when the transaction takes place. We will give that some more thought before Report, but for now I am happy to withdraw my amendment.
Baroness Scott of Bybrook
Member’s explanatory statement
This amendment would correct an error.
Baroness Scott of Bybrook
Member’s explanatory statement
This amendment is consequential on the removal of the amendment to the Housing and Planning Act 1986 in paragraph 16 of Schedule 8.
Member’s explanatory statement
This amendment is consequential on alternative amendments to the Housing and Planning Act 1986 being made in the new Schedule of consequential amendments to be inserted after Schedule 8.
Baroness Scott of Bybrook
“(4) Subsection (1) does not apply in any of the following cases— (a) the tenancy was created by the grant of a lease under Part 5 of the Housing Act 1985 (a “right to buy lease”);(b) the tenancy is, by virtue of section 3(3), treated as a single tenancy with a tenancy created by the grant of a right to buy lease;(c) the tenancy is a sub-tenancy directly or indirectly derived out of a tenancy falling within paragraph (a) or (b);(d) the tenancy was granted under this Part in substitution for a tenancy or sub-tenancy falling within paragraph (a), (b) or (c).”Member’s explanatory statement
This amendment would prevent the tenants listed from exercising the right in new section 7A of the LRA 1967 to have that Act apply without the amendments in the Bill.
Baroness Scott of Bybrook
“Part 2: consequential amendments to other legislationSchedule (Part 2: consequential amendments to other legislation) contains amendments to other legislation that are consequential on this Part.”Member’s explanatory statement
This new Clause would introduce the new Schedule on consequential amendments to be inserted before Schedule 9.
Lord Young of Cookham
“Crown Application(1) For section 33 of the LRA 1967, substitute—“33A Crown land(1) References in this Act to “Landlord”, include the Crown Estate and the Crown where the Crown Estate or the Crown hold freehold land subject to long leases, howsoever such freehold land is held or acquired, including land falling to the Crown as demesne, or by Escheat.(2) The prevailing standard method of dealing with lease enfranchisement in the market, is the method of valuation and calculation of fees for enfranchisement, the extension of leases, or grant of a new freehold title for Escheat land held by the Crown Estate, the Crown, in accordance with this Act, and applies to all leaseholders seeking to enfranchise their leases.”(2) LRHUDA 1993 is amended as follows.(3) Omit section 88.(4) For section 94, substitute—“94A Crown Application(1) References in this Act to “Reversioner” and “Landlord”, include the Crown Estate and the Crown where the Crown Estate or the Crown hold freehold land subject to long leases, howsoever such freehold land is held or acquired, including land falling to the Crown as demesne, or by Escheat. (2) The prevailing standard method of dealing with lease enfranchisement in the market, is the method of valuation and calculation of fees for enfranchisement, the extension of leases, or grant of a new freehold title for Escheat land held by the Crown Estate, the Crown, in accordance with this Act, and applies to all leaseholders seeking to enfranchise their leases.””
Lord Young of Cookham (Con)
My Lords, this amendment deals with the obscure but important issue of escheat, which I suspect will empty the Chamber. When I was a Minister and put the 1993 leasehold Bill on the statute book, I made a statement to Parliament that, although the Crown was not bound by the various leasehold reform Acts, it would in practice follow the provision of such Acts relating to enfranchisement, lease extensions and collective freehold purchases.
However, there is a difference between where the Crown holds a freehold and accepts the responsibility of a landlord and where the Crown holds the land in escheat. William the Conqueror decreed that, henceforth, all land in the realm belonged to the Crown. The Crown would grant fee simple—freehold interests held from the Crown—on the one hand and leasehold interests on the other. Thus, where a freeholder dies without a beneficiary who can inherit the land, or where a freeholder company is liquidated, the asset falls back to the Crown. If the Treasury Solicitor disclaims the land, it falls into escheat and the original title is extinguished.
This creates a problem, and I apologise for talking legalese. If a non-escheat freehold is vested in the bona vacantia division of the Treasury Solicitor, existing tenants can, as per my statement to Parliament, serve notice on the Treasury Solicitor of their intent to enfranchise their leases, collectively or otherwise. The current government guidelines, set out on GOV.UK, then apply. That is form BVC4. The premium payable is calculated by a straightforward multiplier of the ground rent, plus a contribution to the Treasury Solicitor’s legal costs.
However, where land falling into escheat previously comprised a freehold subject to long leases, the Crown accepts no responsibility as the landlord. It neither collects the rent nor complies with the landlord covenants under the long leases. More importantly, with reference to escheat land, the Crown does not currently accept any responsibility under the leasehold reform Acts. This gives no opportunity for the long lease holders affected to extend their leases or purchase the freehold, pursuant to the provision of the leasehold reform Acts. They are left in limbo. It is worth remembering that, where properties are owned freehold by private individuals or companies, qualifying leasehold owners in those properties have a legal right under the Acts to enfranchise, unlike where the freehold is held in escheat.
The Crown can offer the sale of a new title, subject to the existing leases, or respond to an application by tenants to enfranchise but, crucially, it is not bound by any guidelines or formula, as would be the case under the said Acts. It arbitrarily sets its own legal and valuation fees without any mechanism for control. Equally, there is no formula for calculating the price, so in practice the Crown can ask what it wants, plus the costly fees of the private consultant lawyers and valuers, on a take-it-or-leave-it basis. This is at odds with its stated policy to return assets it controls to private ownership quickly and efficiently.
The impact of what I have just described clearly conflicts with the stated intent of the Bill—namely,
“to amend the rights of tenants under long residential leases to acquire the freeholds of their houses, to extend the leases of their houses or flats, and to collectively enfranchise or manage the buildings containing their flats”.
By way of illustration, I have been made aware of a case where the Crown Estate is demanding an inflated premium, plus expensive private consultant lawyers’ and valuers’ fees, which total four times the total cost of what the premium and fees for an enfranchisement would be under the BVC4 formula that I mentioned a few moments ago. This is not justifiable or equitable, and it is wrong that, where the asset is effectively controlled by the state, namely through part of the same government department, the Treasury, this behaviour should take place.
As the unexpired term of the leases becomes shorter, it becomes increasingly difficult and costly for these leaseholders to raise capital on the asset. The inevitable result is that many leasehold owners are unable to afford the inflated premium and the fees demanded by the Crown to ensure that the housing stock is compliant and fit for purpose. So long lease holders where escheat applies are left powerless and exposed to the whim of the Crown’s legal consultants and surveyor representatives. These anomalies need to be brought into the 21st century to keep in step with the intent of the Bill.
My amendment is designed to provide a level and equitable playing field for all long leasehold owners. The Crown must accept that all Crown land, whether held in escheat or otherwise, must be subject to the provisions of the various leasehold reform Acts, subject to specific exceptions only where land is of a nationally sensitive nature.
To conclude, I hope that my noble friend will undertake to get those assurances that I have just referred to from the Crown Estate and the Treasury. I beg to move.
Lord Berkeley (Lab)
My Lords, I follow that interesting speech by the noble Lord, Lord Young of Cookham, which explained his amendment clearly. It may be that the amendments in my name in this group, Amendments 93A and 106, are not necessary—but I am not certain yet, because it is a complicated subject, shrouded in mystery and secrecy sometimes. So I should like to speak to those two amendments as well and hope that we can have some good discussions, meetings and so on, between now and Report with the noble Baroness the Minister to see whether there is a solution.
My amendments refer only to the Duchy of Cornwall: let us be quite clear about that. That is partly because I do not think that the other two members of the Crown need it in the way that I am speaking, because they do not have lots of residential properties. Secondly, if one reads the Law Commission report, which went into some detail, one sees that the Crown Estates and the Duchy of Lancaster both agreed to comply with what the Law Commission recommended, whereas the Duchy of Cornwall did not. So we need to we need to consider some special legislation to cover just the Duchy of Cornwall’s ownership of land.
The other reason for saying this is that the Duchy of Cornwall, unlike the other two Crown groups, is in the private sector. It states quite clearly on its website that it is in the private sector. The argument is that it should be treated differently from other big estates, such as Cadogan, Richmond, Devonshire, and so on. They are all in the private sector and my understanding is that, whether they like it or not, they are going to go along with whatever happens with this legislation when it is accepted. But the Duchy of Cornwall will not do so.
I live in the Isles of Scilly, as noble Lords probably know, and I have a number of friends who have been trying to enfranchise and have been turned down. It is not a question of them looking for a 99-year or 999-year lease. Some of them want 50-year leases and they cannot have them, either, because the Duchy does not like it. So nobody who leases from the Duchy of Cornwall at the moment can enfranchise. That is unfair on the people who live there. The population is about 2,500 and they should be treated like everyone else in this country. Whatever the legislation says, they should do it.
The duchy’s argument, which goes to some length and is repeated in the Law Commission’s report, states all the wonderful things that the duchy does as a kind of landlord in Scilly. Well, it is not really true. The Scillies have a council, a local authority, like any other area. They have a Member of Parliament, water services and national landscape designation. I could go on with a long list of all the organisations, but the environmental concerns are properly looked after and there are even marine protected areas around there. I think the people of the Isles of Scilly would say that they are well set up to manage themselves, just like any other part of the UK. I am grateful to the Minister for meeting me and for the correspondence we have had, but trying to find some solutions is important.
Lord Mann (Non-Afl)
My Lords, I shall make a brief contribution to support the amendment moved by the noble Lord, Lord Young of Cookham. I want to make one additional point to add to the problems he clearly outlined for a person in this situation—to quote him unfairly—and the impact that has on them.
I have not been an elected representative for some years, but I took on many cases involving every kind of issue, and I have dealt with these issues. My files were rightly shredded some years ago when I entered this House, so I do not have the precise detail available, only my vague memories. However, I have one distinct memory. There are two types of people who have this kind of problem—those who have solicitors and are used to dealing with solicitors, and those who do not.
Occasionally those who had solicitors would come to me, normally when they were wondering whether there was a way of minimising the costs. I always used to listen for the mention of counsel’s opinion having been suggested: the thousands then started to ring up on the till instantly, because not all solicitors had quite the expertise in such matters as others might have had.
The more concerning cases were the people who came to see me who were not familiar with dealing with solicitors, and who were horrified at the predicament they were in, and the potential costs—not just the costs from the other side, but they costs that they might have to bear. The prospect was one of an unlimited amount of costs, well beyond their comprehension, their budget and their expectations. The psychological impact of that, as well as the risk, would lead to an incredible feeling of relief if someone like me, in an amateur but persistent way, was prepared to take on their case. That I remember distinctly, in precisely this kind of case. So the common sense that has been suggested is worthy not just of consideration but of enactment, by all sides of the House. I commend the amendment, which is highly appropriate.
Baroness Pinnock (LD)
My Lords, I congratulate the noble Lords, Lord Young of Cookham and Lord Berkeley, on exposing and exploring the exceptions to the general rule in the legislation and its application. If we live in a democracy, the rule of law should apply to everyone without heed or hindrance, so I am grateful to both noble Lords for bringing this to the attention of the House. I hope that when the Minister responds she will be able to confirm that the Bill will apply to the Crown Estate and the Duchy of Cornwall, because it ought to.
Lord Khan of Burnley (Lab)
My Lords, I rise briefly to thank the noble Lord, Lord Young of Cookham, and my noble friend Lord Berkeley for providing the detail, with diligence and eloquence, in calling for what the noble Lord, Lord Young, called a level and equitable playing field for all leaseholders in that situation, particularly in relation to Crown land. I want to press the Minister on getting information from the Government about to what extent Crown and Duchy of Cornwall land would be affected by the amendments, and on providing clarification on the important and pertinent points that both noble Lords raised.
Baroness Scott of Bybrook (Con)
My Lords, I will briefly speak to the amendments in my name before turning to the amendments in the names of my noble friend Lord Young of Cookham and the noble Lord, Lord Berkeley. Government Amendment 83 is a clarificatory amendment. Clause 67 outlines that all of Sections 18 to 30P of the Landlord and Tenant Act 1985 bind the Crown, and that the relevant provisions bind the Crown whether or not they relate to Crown land.
As a result, Section 172(1)(a) of the Commonhold and Leasehold Reform Act 2002 will be repealed. Since subsections (4) and (7) of Section 112 of the Building Safety Act 2022 amend the 2002 Act, these subsections are no longer necessary.
I now turn to the amendments in the names of my noble friend Lord Young, and the noble Lord, Lord Berkeley. I thank my noble friend Lord Young for his Amendment 54, which seeks to bind the Crown to the enfranchisement measures in the Bill and to apply those measures to properties subject to escheat. It is a long-established principle that legislation does not bind Crown lands, including the Duchies of Lancaster and Cornwall, unless the Act expressly states so or by necessary implication. Where an Act, or a part of an Act, does not bind the Crown, the Crown can and often does agree to act in accordance with the legislation.
The current position is that most Crown leaseholders enjoy the same lease extension and enfranchisement opportunities as other leaseholders, by virtue of the Crown’s undertaking given to Parliament to act by analogy with the Leasehold Reform Act 1967 and the Leasehold Reform, Housing and Urban Development Act 1993, which are not directly binding on the Crown. We also expect that the Crown will agree to act by analogy with the Bill before us. The effect will be that most leaseholders of the Crown will have the same opportunity to extend their lease or buy their freehold as any other leaseholder would, except in certain special circumstances set out in an undertaking we expect to be given by the Crown. Therefore, the outcomes the Government want to see can be achieved without legislation, and the amendment is unnecessary.
I would also like to thank my noble friend for raising an important point in his amendment about properties subject to escheat. The Government recognise that when the freehold becomes ownerless, it can cause problems for some of those leaseholders. However, the amendment would not achieve its intended aim because when a property escheats to the Crown the freehold no longer exists, and the Bill is not the appropriate place for a review of the complex law surrounding ownerless land. When a property becomes ownerless the land and buildings escheat to the Crown. If a purchaser is interested, the Crown can sell it so that it goes back into private ownership.
Lord Berkeley (Lab)
My Lords, I am grateful to the Minister for a very detailed reply, and I thank her for her interest in this project. I have one question: will we be able to see a draft or a copy of the undertaking from the Crown, which she has mentioned several times, before Report?
Baroness Scott of Bybrook (Con)
My answer is that I am not sure, but I will make sure that I let the noble Lord know. If we can do that, obviously we will.
Lord Young of Cookham (Con)
My Lords, I am grateful to all noble Lords who have taken part in this short debate. I am grateful to the noble Lord, Lord Mann, for reminding us that it is often a rather one-sided battle, with leaseholders confronted by freeholders with massive resources. I am grateful to the noble Baroness, Lady Pinnock, for her support for my amendment.
As far as the noble Lord, Lord Berkeley, is concerned, I have happy memories of replying when I was on the Front Bench to his Duchy of Cornwall Bill. He spoke at somewhat greater length on that occasion about the need for major reform of the Duchy.
On the specific issue that I raised, I am not expecting any legislative change because my noble friend said, quite rightly, that the Crown is not bound by legislation, but she said on several occasions that the Crown would act by analogy with the terms of the leasehold Acts. I think that gives me what I want, so long as it covers the Crown acting as freeholder as well as the Crown acting as owner of land in escheat. At the moment, that is not the case. At the end of my remarks, I asked whether my noble friend would be good enough to get the necessary assurance from the Crown Estate and the Treasury that they would deal with escheat applications in the same way as applications for where they are the freeholder.
I am grateful to my noble friend for her sympathetic reply. I think I can build on the undertaking that she has given to make some progress. I do not want to wait until the Law Commission has gone round the course all over again, whenever that may be. The leases that I referred to are coming towards the end of their time, and each delay adds to the potential cost for the leaseholders.
I hope we can make progress without waiting for a Law Commission report. It is simply a case of the Crown acting equitably and doing exactly what my noble friend has said: acting by analogy and delivering the laws that have been passed by Parliament. On that basis, I am happy to withdraw the amendment at this stage.
Childcare Entitlements
(7 months ago)
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The Parliamentary Under-Secretary of State, Department for Education (Baroness Barran) (Con)
My Lords, with the leave of the House, I shall now repeat a Statement made yesterday in another place by the Parliamentary Under-Secretary of State for Education. The Statement is as follows:
“With permission, Mr Speaker, I will make a Statement on the successful first stage of the largest ever expansion of childcare in England’s history being made by this Government.
The Government have a strong track record of supporting parents with the cost of childcare, supporting disadvantaged children and ensuring that childcare is of high quality, with 96% of early years settings rated as good or outstanding by Ofsted. In 2010 we extended the three and four year-old entitlement, commonly taken as 15 hours a week for 38 weeks of the year; in 2013 we introduced 15 hours of free early education a week for disadvantaged two year-olds; in 2017 the three and four year-old entitlement was doubled to 30 hours per week for working parents; and in March 2023, recognising that childcare is one of the biggest costs facing working families today, my right honourable friend the Chancellor announced the biggest investment in childcare by a UK Government in history, so that by September 2025 working parents will be able to access 30 hours of free childcare a week from when their children are nine months old until they start school.
By the time this expansion is complete, parents using the full 30 hours can expect to save an average of £6,900 a year, a hugely significant saving for their family finances. We are staggering the expansion to ensure that there are the staff and places available to meet parental demand, and this month marked the first stage of the rollout, with eligible working parents now able to receive 15 hours of government-funded childcare for their two year-olds for the first time. Last month my right honourable friend the Secretary of State for Education informed the House that we expected 150,000 children to benefit from the expansion from the beginning of this month. As we set out in our official statistical report, 195,355 parents were already benefiting from this on 17 April, and we have subsequently broken the 200,000 mark. We will publish further official statistical reports in due course.
As Members will know, the system involves parents applying for a code that they take to a provider to be validated in order to obtain a place. The first phase of the rollout is showing a trajectory similar to that of our previous expansion of childcare, in 2017. On 5 September 2017, 71% of codes had been validated. As of 17 April this year, 79% had been validated by providers, and we have broken 81% as of this week. With every rollout, some eligibility codes go unused for a variety of reasons, such as parents changing their minds about formal childcare, or being issued with a code automatically even though they did not need one. In the case of our well-established offer for three and four year-olds, about 12% of codes have not been validated, but as with previous rollouts, we expect the number of children benefiting from this new entitlement—and the number of codes validated—to grow in the coming weeks and months.
As was the case in 2017, no local authorities are reporting that they do not have enough places to meet demand. I pay tribute to early years providers, local authorities, membership bodies and other key stakeholders who have worked closely with us to ensure that the first phase of the rollout was successful and parents could access places, and we will continue to work closely with them for the next phases of the rollout. The first of those will begin in September, but parents will be able to start applying for 15 hours of childcare for their nine month-olds from 12 May, ready to receive these in September. I am also delighted to announce that parents on parental leave, and those who are starting a new job in September, will be able to apply for childcare places from 12 May, instead of having to wait until 31 days before their first day of work, as has been the case until now.
Delivering such a large expansion requires more staff and more childcare places. We estimate that we will need 15,000 more places and 9,000 more staff by September 2024, and that for September 2025, which will see the largest phase of the rollout, a further 70,000 places and 31,000 staff will be needed. Last year the number of childcare places increased by about 15,000, and the number of staff by about 13,000, even before the rollout began and before the significant steps that the Government are taking, beginning with rates, to increase capacity in the sector.
The Institute for Fiscal Studies has independently confirmed that funding for the new two year-old entitlement is significantly higher than average parent-paid fees. According to the Government’s provider pulse survey published last week, the largest barrier identified by the sector—by 45% of respondents—to expansion of its provision was future funding certainty, a message that I have heard clearly from the many providers I have visited in recent months. In his 2024 Budget, the Chancellor committed to ensuring that funding rates for all entitlements would increase by the measure used last year in the 2025-26 and 2026-27 financial years. That estimated £500 million of additional funding over those two years will provide a level of certainty that we are confident will help to unlock tens of millions of pounds in private sector investment, ensure that rates keep up with provider cost pressures, and give providers a greater opportunity to increase staff pay.
This year, to support recruitment to the sector, we launched a £6.5 million recruitment campaign titled “Do something BIG. Work with small children”, and thousands of people are visiting the campaign website every week to find out more about the great early years and childcare careers that are available. In January we introduced changes to the early years foundation stage to give providers greater flexibilities to attract and retain staff, and yesterday we launched a technical consultation setting out the department’s proposals for how a new experience-based route could work for early years staff who have relevant experience from other sectors but do not have the full and relevant qualifications that we require.
Due to the falling birth rate over recent years, some primary schools have space that they are no longer using, and some have closed entirely. In order to support our expansion of childcare, we have launched a pilot to explore how some of the unused school space could be repurposed to enable childcare settings to offer more places. If the pilot is a success, the Government will roll that out more widely.
Our progress in delivering this transformative expansion in early education and childcare underscores this Government’s unwavering dedication to empowering families, supporting the childcare sector, and building a prosperous future. I commend this Statement to the House”.
My Lords, that concludes the Statement.
Baroness Twycross (Lab)
My Lords, I welcome the opportunity for us to discuss the Statement made yesterday in the other place. I thank the Minister for repeating it today in your Lordships’ House. Noble Lords present are probably united in thinking that the Government’s aspiration in expanding free childcare is welcome. However, unfortunately, it appears that currently only the Government believe that their flagship policy is on track.
My first question to the Minister is: why are Ministers proactively bringing a Statement to Parliament to say that everything is on track, when the Government’s own auditors are now saying otherwise, without the Government acknowledging that there are issues? When I suggested yesterday at Oral Questions that the policy was in trouble, the Minister stated that
“it is a huge success”.—[Official Report, 23/4/24; col. 1369.]
I woke up to headlines that indicated that I was not far off. In light of the report published today by the National Audit Office, will the Minister accept that the policy is, at the very least, at risk of not going to plan? Even the Telegraph is reporting that parents are facing worse childcare under this Government’s childcare expansion.
Are the Government still guaranteeing that every eligible child has a spot now, that every eligible child will have a spot later this year, and that every eligible child will have a spot in September next year? Are parents getting the savings that they have been promised? Why have the Government repeatedly dismissed genuine concerns about the rollout of the plan, when the problems are so clear and stakeholders across the board are highlighting the same problems?
Even the DfE has the expansion as its top programme risk, with risks including insufficient places, operational infrastructure not being ready, insufficient parental demand and an unstable market. When will the Government make a formal response to the NAO’s report? Furthermore, could the Minister confirm that the DfE has itself
“assessed its confidence in meeting milestones beyond April 2024 as ‘problematic’”?
Does she agree with the NAO that the extension does not “achieve its primary aim” or demonstrate “value for money”? How did the DfE think it was appropriate to set dates for expansion without engaging with the sector or understanding local authorities’ and providers’ capacity? Will the Government act on the NAO’s recommendations about continuously reviewing the achievability of the 2025 milestones and will they now publish interim performance thresholds?
I return to the point I made to the Minister yesterday: the DfE’s own pulse survey from last week found that 45% of childcare and early years providers said it was unlikely that they would increase the number of places they offer to under-threes as a result of the Government’s childcare expansion. The NAO estimates there is in fact a net reduction in places—albeit just a 1% reduction —since 2018, but this is at a point at which we need a significant increase in places. Could the Minister outline what the DfE’s plan is if it accepts that it will struggle to reverse this trend, if it finds that the providers simply cannot afford to offer free places, or the one in three nursery and pre-school providers that the Early Years Alliance says are at risk of closure simply do not survive? This would potentially put 184,000 places in jeopardy. How does the Minister explain the disparity between what the Government say and what the sector, parents and councils, and now the NAO, are saying?
The Statement repeated today states confidently that
“no local authorities are reporting that they do not have”
sufficient “places to meet demand”. This is very different from the National Audit Office view that only 9% of areas are confident that they will have enough places. To clarify this point, I contacted the Local Government Association, which told me that councils have reported greater concerns about the next stages of the expansion, where it will extend to children and families who would not previously have accessed childcare to this extent. It is deeply concerned about provision for families that require a different range of childcare options, such as outside traditional hours, or families for children with SEND.
The Coram Family and Childcare survey found that England has seen reductions in the availability of childcare in all categories. Worryingly, the greatest reductions have been in childcare for disabled children, which I understand is now at 6% sufficiency. Can the Minister say why this is the case and what the Government will be doing to remedy this? Local authorities are also concerned about recruitment, particularly because of the higher ratios required for under-twos. They are concerned about the lack of sufficient level 3 qualified staff in the sector. Is the Minister confident that recruitment is on track?
There is broad consensus on the need for a decent childcare and early years offer, including increasing free hours. It is a shared ambition across political parties to have an improved system that works for parents and carers and delivers the best start in life for children. Labour genuinely wants better childcare and early years provision. We have commissioned a review by Sir David Bell to assess a way forward. We want a well-planned, well-designed system that delivers for children and improves the offer to parents.
I am confident that the Minister also wants a system that works, but the first step in this instance to getting that has to be for the Government to accept that there are problems, and work to get this scheme back on track. I look forward to her response as to how, in light of the serious risks facing this flagship government policy, the promised expansion in free childcare and early years provision will be delivered.
Lord Storey (LD)
My Lords, I thank the Minister for her detailed Statement. I would guess that all of us aspire to the aspirations that she espoused on childcare. The issues that we are concerned about—and they concern a number of people—are around whether this can be delivered. I listened to the Statement with great care and the words that were missing were not about numbers but about quality. I have always believed, as my party always has, that it is not just about providing childcare. It has to be quality childcare—and I did not get a sense of that in the Minister’s Statement. There are a number of issues. She mentioned pay, quite rightly, but it is about training as well.
As we have heard, the National Audit Office has raised concerns that plans to extend free nursery provision could compromise—again, that word—the quality of childcare as the sector expands to meet demand. The NAO cautioned that hiring inexperienced staff and a lower supervision ratio for two year-olds could undermine childcare quality. There are also worries about whether inspections by Ofsted would identify issues early enough. The NAO has highlighted concerns about the Department for Education’s confidence in delivering required places, with only 34% of local authorities expecting to have enough places by this September. On the other hand, the Minister has painted an extremely positive picture of rollout. It will be interesting to see who is right.
This ministerial Statement did not mention or address the up-and-coming report and findings, which have been described as utterly damning by the early years sector. The Government must address the findings of this report urgently. The report concludes that there is a risk posed by
“the lack of contingency and flexibility”
in the Government’s “fixed, ambitious timetable”. It is therefore important that clarity and reassurance is provided quickly on how they will address the report’s findings. Families across the country will struggle to plan their arrangements if certainty over the next phase of the rollout is not provided.
Only 17% of nursery managers said that they could offer the extended entitlement, due to the crisis of recruitment and retention. What will the Government do to address this recruitment and retention issue?
Finally, I was interested to hear about the campaign to use unused schools. The Government want to set up what I think they call “in-home nurseries” to create some of the 85,000 places needed. How many schools will be used in the pilot scheme that the Minister told us about? If the scheme is successful, how many schools do they think they will be able to finally use?
Baroness Barran (Con)
I thank both noble Lords for their questions and for sharing, as we all do across this House, the ambition for all children, as we know the importance of a great start in life.
I will start, if I may, where the noble Baroness did in relation to the National Audit Office report and her question, which was echoed by the noble Lord, about when we will respond to the National Audit Office formally. I can give the House some sense of that today but, in terms of timing, we will also be giving evidence on this subject to the Public Accounts Committee on 8 May—so our plan is to respond to both the NAO report and the Public Accounts Committee in the normal way.
On the NAO report itself, I absolutely understand why both noble Lords rightly raise its challenging aspects, but it is also worth noting some of the more positive aspects. The NAO report identifies that the programme has been fundamentally successful in the rollout so far, meeting and actually surpassing the April 2024 objective. It confirms that the trajectory and take-up of this expansion in entitlement is the same as previous expansions. It also notes that it expects that the number of places being taken up will continue to grow and notes the phased introduction of the new entitlement.
On the recommendations, the noble Baroness opposite raised the achievability of the September 2025 milestone, whether the department would be setting interim performance thresholds and how we would respond with corrective action, if needed. Of course, we continually review the deliverability of the programme. We have a local authority delivery team; we have our insight unit, which analyses the data; and we have pulse surveys, stakeholder groups and provider groups, so we are really well connected into the sector. We have set a series of milestones that cover local authority readiness, sufficiency and workforce and, by the end of June, we will set regularly spaced performance thresholds. We will use those to assess the growth of capacity places and the workforce. Of course, those can and should be updated as needed, as we get live data in.
By the end of June this year, we will agree a set of staged corrective actions, if those actions are needed. To support that, we will also use our data better. We regularly update both our supply and demand modelling, and we share that directly with local authorities. We have a set of KPIs for the programme, which we monitor regularly.
The noble Lord, Lord Storey, raised a point about the quality of staff and the risk that, with less experienced staff, the quality might suffer. We do not really accept that. Back in 2021 we made major reforms in early education, which the noble Lord will remember. These were designed to improve outcomes for all children, but particularly for disadvantaged children and children with special educational needs. In October last year we published the evaluation report of those reforms, which showed that practitioners have really benefited.
As we continue with the rollout, we will be looking at the availability and quality of places for children from disadvantaged backgrounds. Similarly, for those with special educational needs and disabilities, we will be looking at what the impact is if we see new providers and staff entering the market.
We have also commissioned and funded the children of the 2020s study, which collects longitudinal data on elements that influence cognitive and social and emotional development during early childhood. Obviously, we will share that data.
Deliverability was a key part of both noble Lords’ questions, and the workforce is a critical part of that. It is fair to say that, where we are further away from a delivery deadline, it is not unreasonable that confidence in readiness might be lower. Looking at where we were in November in our pulse survey and what providers were saying about their readiness for April, 65% of them said that they were ready. By the March survey, one month ahead of the extension, that figure had risen by 16 percentage points to 81%. That is just normal.
It is also important to note that all types of providers that took part in our pulse survey have increased their capacity in the last year by over 20% for group-based and school-based providers. The figure is rather more for childminders although, as your Lordships know, they represent a smaller part of the market. On applications, for group-based and school-based providers, the number of applicants to vacancies is now on average five to one, which is a really healthy and promising indicator for the future.
The noble Lord also talked about retention, which is clearly critical. It will be important to improve retention in order to reach our objectives. The additional funding, the visibility of funding and the ability of providers to plan will make recruitment and opportunities in this sector more attractive, but there is work to do to deliver that.
The noble Lord also asked about the number of schools. We are working in a small number of areas with those schools to build a template of what might work. We will test that and, if it is successful, roll it out.
The noble Baroness, Lady Twycross, asked about wraparound care outside formal hours. In the Spring Budget last year, we announced £289 million to support the expansion of wraparound childcare for primary school-aged children.
Finally, the noble Baroness rightly raised concerns over this programme delivering for children with special educational needs. She will remember from my remarks yesterday that we are conducting a review of how the special educational needs inclusion fund works to make sure that it is as good as it can be.
We have chosen a phased approach to make sure that we learn as we go along with the implementation of this expansion, but we are doing everything we can to make sure that it is a success.
Baroness Andrews (Lab)
My Lords, the Minister began by saying that this is the biggest expansion in childcare, and she is right; we share those ambitions. But it is because it is the biggest expansion we have experienced in childcare that the NAO report is so worrying.
Among the things the report says, in many different ways, is the difficulty the DfE has in getting the right data to plan properly. While I have listened to what the Minister said about how the DfE will respond, with better benchmarks and so on, I find it very difficult to know how it will do that given the quality of data. I will quote from page 33 of the report:
“Given limited engagement, DfE does not know the market’s willingness and capacity to increase places … There remain uncertainties over whether the sector can expand”.
If you take that set of uncertainties, it becomes clearer why this is the DfE’s top risk. The risks have already been enunciated by my noble friends. They include risks to places, operational infrastructure, insufficient parent demand and an unstable market. That is an extraordinary range of risks. The risk register must be glowing red. Can the Minister share the risk register with us so that we can see where the DfE sees the greatest risks coming from and what the responses will be? If she cannot do that, maybe she can explain how the risks identified are being addressed on a systematic basis.
I turn to the conclusion of the NAO report. It says that the DfE
“has assessed its confidence in meeting milestones beyond April 2024 as ‘problematic’. It must now use available data to understand when it needs to intervene”.
But, as I said, if the quality of data and access to data are so limited, how will the department do that?
The conclusion ends:
“In extending entitlements, the government’s primary aim is to encourage more parents into work. Even if DfE successfully navigates the significant uncertainties”,
which are documented throughout the report,
“it remains unclear whether the extension will achieve its primary aim, represent value for money and not negatively impact DfE’s wider priorities relating to quality and closing the disadvantaged attainment gap”.
Each of those phrases carries tremendous weight, particularly the last one about the attainment gap. How are the Government going to respond credibly to that set of very authoritative statements?
Finally, I have a general point. The NAO report is a reality check. I have every sympathy with the Minister and with the DfE in trying to deliver this, because it is a huge challenge. One of the reasons for that is that it is an object lesson in how not to make policy. The Government did not consult the providers early enough or get an understanding of what the market was like on the ground. They did not address the historical underfunding, as we discussed when we debated this last November, which was built into the system from 2013 onwards, and did not understand the lack of resilience in the sector. The Minister talked about retention and recruitment but, in fact, between 2018 and 2023 an increase of only 5% was achieved in recruitment and retention. The target for the coming years is much higher.
This is a very serious report, and it is going to demand from the department a very serious and credible reply. The real risks are the risks to parents, who want and need to be able to count on this service, and to children, who need quality provision, which they are not likely to get unless investment is properly guaranteed and targeted.
Baroness Barran (Con)
I have to say that I did not agree with everything that the noble Baroness asserted. To start with the risk register, it is not glowing red, but it is of course a priority risk for the department. The noble Baroness understands this extremely well from her previous experience. We are doubling the commitment in this area financially: we will spend £8 billion a year once this rollout is complete, from £4 billion today. That is a massive increase, and it is a real challenge in a market with a number of small providers and with the way in which, rightly, we work through local authorities and providers. So it would be irresponsible—and I think that the noble Baroness would be criticising the Government—if it was not a significant risk for the department. But that means that it gets a great deal of focus, and there are very detailed plans to support it.
As for consulting the sector, I slightly take exception to what the noble Baroness said. The department works very closely with the sector, providers, parents and local authorities, and it is crucial that we do, because we are committed to getting this right.
As for the willingness of providers, and the point that the noble Baroness picked from the report about our understanding of willingness and capacity, as I pointed out earlier, capacity for all types of provider rose by over 20% last year. That is very significant, as I am sure that the noble Baroness agrees. On the point about willingness, almost 40% of group-based providers, 33% of school-based providers and 42% of child minders said that they would be more likely to offer places to children under three, given this expansion. About half of them—it is slightly different, but I shall not bore the House with all the numbers—said that those would be additional places, so they would not be substituting an older child with a younger child.
Where I absolutely agree with the noble Baroness is that this is a very serious report. We take it very seriously, and we will respond in full.
Baroness Bennett of Manor Castle (GP)
My Lords, like every other speaker, I have read with concern the National Audit Office report, which talks about the lack of qualified staff and suitable space, which could have an impact on the quality of provision. I share the concerns about qualified staff, but we have not had much discussion about the suitable space side of the issue. The Minister may have to write to me later, but it would be interesting to know how many of these are actually new facilities, how many facilities are closing— we are still hearing reports of facilities closing—and what the comparative quality of the space of the new provision is.
One thing that I was thinking about, which is something that the Minister and I have discussed before, is access to green space. We are increasingly understanding how terribly important that is for the health and well-being of everybody, but particularly young children. What percentage of the new provision is in places that have access to space? Is expanding the number of places reducing the amount of access to green space per child? What information do the Government have about the quality of the spaces of these new provisions? That is something that the National Audit Office has brought to our attention, and it really deserves more focus.
Baroness Barran (Con)
On building capacity, the department has awarded £100 million to local authorities to help expand capacity. On the quality of space, as the noble Baroness knows, early years settings are regulated by Ofsted. It has very clear standards that they have to meet, and we expect them to meet them.
Baroness Anderson of Stoke-on-Trent (Lab)
My Lords, the NAO report suggests that many of the issues and challenges that we have heard about this evening would have been mitigated if the Government had not cancelled the £35 million pilot. I wonder whether the Minister can tell us why we cancelled the pilot and what assessment has been made for phases 2 and 3 of the scheme, having not done it.
Baroness Barran (Con)
The noble Baroness hits on perhaps the one thing on which we do not accept the recommendation from the National Audit Office. We made a decision not to run the pilot because we did not think that it would contribute meaningfully to readiness or provide value for money. The key decision we took was that this would be a phased rollout, so that local authorities, providers and parents all had time to adapt. We are continuing to test and review delivery on an ongoing basis; we are piloting different interventions to support workforce expansion through financial incentives in 20 local authorities. What we found from the evaluation of the 2017 rollout was that providers were willing to offer more hours, and were able to offer sufficient hours, and that there were no adverse impacts on other provision. We also found that providers were really flexible. We are very fortunate to have providers that are so focused on outcomes for parents and, of course, for their children.
Leasehold and Freehold Reform Bill
Wednesday 24th April 2024
(7 months ago)
Lords ChamberRead Full debate Leasehold and Freehold Reform Act 2024 View all Leasehold and Freehold Reform Act 2024 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 50-II(b) Amendments for Committee (Supplementary to the Second Marshalled List) - (24 Apr 2024)
“Abolition of forfeiture of a long lease(1) This section applies to any right of forfeiture or re-entry in relation to a dwelling held on a long lease which arises either—(a) under the terms of that lease, or(b) under or in consequence of section 146(1) of the Law of Property Act 1925.(2) The rights referred to in subsection (1) are abolished.(3) In this section— “dwelling” means a building or part of a building occupied or intended to be occupied as a separate dwelling, together with any yard, garden, or outhouses and appurtenances belonging to it or usually enjoyed with it;“lease” means a lease at law or in equity and includes a sub-lease, but does not include a mortgage term;“long lease” has the meaning given by sections 76 and 77 of the Commonhold and Leasehold Reform Act 2002.”Member’s explanatory statement
This new Clause would abolish the right of forfeiture in relation to residential long leases in instances where the leaseholder is in breach of covenant.
Baroness Taylor of Stevenage (Lab)
My Lords, our amendments in this group go to the heart of one of the current serious injustices relating to leasehold: that of forfeiture. It is quite simply anachronistic, wholly disproportionate and complete imbalance in the relationship between leaseholders and landlords. In some circumstances, a debt of a few hundred pounds can trigger the ability to take possession of the property. What my honourable friend the shadow Minister for Housing in the other place called
“the chilling effect that results from its mere existence”.—[Official Report, Commons, 27/2/24; col. 203.]
puts landlords in a nearly unassailable position of strength in disputes with leaseholders, as I hope I illustrated in my earlier quote from an elderly leaseholder. Unfortunately, the threat of forfeiture is too often used routinely by landlords as a first resort when seeking to recover alleged arrears in payments from leaseholders, and so often invoked to deter leaseholders from disputing any unreasonable costs and defending claims.
Our first amendment is reasonably straightforward: it is basically a matter of disproportionality and consistency. A real estate solicitor summed it up very neatly in his evidence to the Commons committee. He said:
“It is extremely welcome to see the government’s proposed clause 59 and amendment NC4 relating to the abolition of remedies relating to rentcharges. It is also very welcome to see the proposed amendment NC1 which would abolish forfeiture in long residential leases, which is long-overdue. However, there is a key point that does not seem to be addressed: forfeiture in relation to rentcharges. Rentcharge deeds often reserve a right of forfeiture for non-payment which operates in the same manner as a forfeiture clause in a lease. The Committee clearly recognises that the expropriation of somebody’s property as a remedy for breaches of a lease on an extra-judicial basis is entirely inappropriate and unfair. Therefore, it should equally concern the Committee that the same remedy is available in many cases in relation to rentcharges. Therefore, I would ask that the Committee either add to proposed amendment NC1 or propose an additional clause to abolish any right of forfeiture under a rentcharge”.
This amendment would ensure that leaseholders are in no worse a position than anyone else subject to a challenge to ownership would come under. So, while we accept the principle that legal remedies should be available, we do not believe that forfeiture provides adequately for leaseholders to challenge or defend themselves from repossession.
Our other amendments are a bit more complicated on paper, as they would replace Clause 111, which currently provides remedies for arrears of rent charges where the rent charge remains unpaid for a period of 40 days, one of which is the ability for a rent charge owner to take possession of a freehold property in instances where a freehold homeowner fails to pay a rent charge. But in essence it is very simple. It would simply mean that debts have to be sued for, as you would for any other kind of debt. In short, the 1925 Act provides for the power to seize freehold houses for non-payment of a rent charge, even if the arrears are merely a few pounds, and allows the rent charge holder to retain possession or render it, in effect, worthless by means of maintaining a 99-year lease over it.
In our view, the remedies provided in the 1925 Act are a wholly disproportionate and draconian legacy of Victorian-era property law. The 1977 Act prohibited the creation of new rent charges and provided for existing rent charges to be abolished in 2037, but 13 years from now is still a long time away and any lease granted prior to the abolition will remain in force. Rent charges are therefore an area of law in respect of which legislative reform is long overdue and the need to protect rent payers from what amounts essentially to a particularly severe form of freehold forfeiture as a result of the relevant remedies provided by the 1925 Act is pressing.
We understand that the Minister in the Commons called this argument “reasonable” and implied that it could be revisited if the Government were able to consider the potential consequences of such a change, so I press the Minister that, if we are asked to withdraw our amendment today, she will at least consider whether the Government can deliver the effect we all want to see via a government amendment. We feel very strongly about this issue and I hope it will not be necessary to continue to press this point through to Report. I beg to move.
Lord Truscott (Non-Afl)
My Lords, I wish to address the issue of forfeiture and support Amendment 55 in the name of the noble Baronesses, Lady Taylor of Stevenage and Lady Pinnock, and Amendment 95 in the name of the noble Baroness, Lady Taylor. I absolutely agree that leaseholders should not be subject to forfeiture in the case of a debt of a few hundred pounds or a temporary breach of covenant. Indebtedness can be dealt with by the county court and bailiffs. For that reason, I support Amendment 95 in the name of the noble Baroness, Lady Taylor of Stevenage. However— I know this may be controversial with some noble Lords—I am concerned that a blanket ban on forfeiture would remove an effective deterrent preventing some leaseholders persistently and wilfully breaching their leases by, for example, anti-social behaviour.
Let me give three practical examples I have come across in my years as a leaseholder. The first concerns a landlord who was letting out his flat on Airbnb, in breach of his lease. He knew he could make more money doing this than letting it on a long lease. As noble Lords know, Airbnb can cause a serious nuisance in blocks of permanent residents, due to excessive noise, wear and tear and lack of security impacting on quiet enjoyment. The landlord/leaseholder in question stopped only when threatened with forfeiture for breaching the lease.
The second involved a leaseholder putting a hot tub under a neighbour’s window, in clear breach of the lease, as only patio furniture was allowed to be displayed on the terrace, and threatening their quiet enjoyment. When challenged, their approach was dumb insolence. “What are you going to do about it?” was their approach. The threat of forfeiture ensured its removal.
The third example is more personal. My wife was attacked in our own garden by a neighbour’s tenant’s large dog, which was in a flat in breach of the lease. The gardens are open, with no boundaries, so dogs wandering around under no control are a problem. Let me be clear, I am a dog lover—I had two dogs as a child—but I am also conscious that there has been a massive increase in dog attacks in recent years. Official NHS figures reveal that, in the year to March 2023, there were 9,277 hospital admissions in which the patient had been bitten or struck by a dog. The number of people killed by dogs has also risen dramatically. In the last 20 years or so, the number of fatal dog bites has averaged about three per year; however, by 2022, it had risen to 10 fatalities and is still climbing. These cases are horrific and worrying.
Many blame the owners, not the dogs. Too many owners seem unwilling or unable to control their dogs and this behaviour is unfortunately widespread, as I have witnessed myself on a number of occasions. The dog in our block stayed, but when the leaseholder/landlord tried to introduce another tenant with another large dog, after the first attack, again in breach of the lease, it was only the threat of forfeiture that resolved the situation. Dogs may be appropriate in many surroundings, but in others they are excluded in leases for a reason.
Thus there are occasions when the mere threat of forfeiture, rarely used in practice, is useful to ensure compliance with lease obligations. Other legal routes can be extremely costly, lengthy and ineffective. So I ask the supporters of a complete ban on forfeiture how they propose to enforce compliance with leases and prevent breaches in the future if this proposal is carried.
Baroness Pinnock (LD)
My Lords, I have added my name to Amendment 55, in the name of the noble Baroness, Lady Taylor of Stevenage, because it seems to me, as it does to the noble Baroness, that this is one of the clear injustices in the current leaseholder-freeholder relationship. The amendment is rightly restricted to the abolition of forfeiture of a long lease.
I thought it was straightforward until I heard the noble Lord, Lord Truscott, outline some of the issues that he believed could be addressed only through forfeiture. I was surprised that we have to go to such draconian ends to deal with a fairly straightforward neighbour dispute.
Lord Truscott (Non-Afl)
The problem is that, if you try to enforce a lease, what is your route? The only other route would be to go to the High Court, and that would be a very lengthy process. I am saying that the threat of forfeiture is often enough for people to see sense. I have never come across a case in which people have actually gone through the whole process of forfeiture.
Baroness Pinnock (LD)
I thank the noble Lord for expanding on that.
It would be interesting to hear from the Minister whether there are any statistics regarding freeholders using the forfeiture system to address not the issues that are normally referenced—failure to pay ground rent or an accumulation of three years or more of debt—but breaches of the lease. It would be helpful to understand all that.
As the noble Baroness, Lady Taylor, has said, if the payment in lieu is more than £350, or is outstanding for more than three years, the freeholder is entitled to claim repossession—and then all the equity in the property is lost, of course. When I first looked at this, I could not see how it could possibly be right. I remember that, at Second Reading—I was just trying to find it in Hansard—the Minister said that the Government were considering bringing forward an amendment to address this issue. It is unfortunate that that has not been forthcoming in the time that has elapsed between Second Reading and Committee. Perhaps in her reply, the Minister can say whether the Government intend to bring an amendment on Report. It would help us resolve what is, on the face of it, a complete injustice. It would be sufficient if the Minister said that that is going to happen, and maybe those of us who have signed the amendments could have a meeting with her to discuss it, if necessary.
Lord Bailey of Paddington (Con)
I support this amendment. Although in his intervention the noble Lord talked about how to control peoples’ behaviour when they have misbehaved and breached their lease, it should be taken into account that the threat of forfeiture is held over leaseholders, in a very draconian fashion, for the smallest infraction. More importantly, it is used to enforce such things as the flagrant and inequitable boosting of service charges. If you are in dispute in this situation, you are told you will end up having to pay court fees. You are told that, if you do not pay—
Lord Truscott (Non-Afl)
To clarify, I said specifically that people should not have their leases forfeited as a result of rent arrears. The threat of forfeiture can ensure that lease compliance occurs. If you remove the threat of forfeiture, how do you achieve compliance with other terms of the lease?
Lord Bailey of Paddington (Con)
There are ways and means within our court system to reclaim any money that may be owed to the freeholder for service charges, ground rent and so on. Let us be very clear that forfeiture is used as a tool to threaten, bully and cajole leaseholders into compliance. When your freeholder invents a new reason as to why you have to pay more, you are warned that, if you do not do so, you could be taken to court for forfeiture. You are then told by the system that, if you do pay more, it is seen as agreeing with the bill that was presented to you.
Lord Truscott (Non-Afl)
I am not talking about freeholders taking action against other leaseholders; I am talking about how one leaseholder may want to enforce a lease against another leaseholder. In that case, you are saying that they would have to go to the High Court to enforce the lease, and that is a very lengthy and protracted process. I am not talking about the relationship with the freeholder or indebtedness; I am talking about how to enforce the lease between leaseholders, and I gave the example of Airbnb using a block of flats.
Lord Bailey of Paddington (Con)
It would be extraordinary, though possible, if fellow leaseholders could invoke forfeiture but the freeholder could not. That would be incredible, and I am sure it would have all its own problems.
The point remains that, if you keep some kind of forfeiture, freeholders will want to keep hold of that power, because it is exactly that: an unfettered, threatening power, which leaseholders speak about as though it is mythical, like a dragon that will burn you if you stand up to the freeholder. Words fail me when I try to describe how forfeiture must go. We have had many conversations in which the word “feudal” has been bandied about. This is one occasion where it has real meaning. Forfeiture should and must go.
Lord Kennedy of Southwark (Lab Co-op)
My Lords, first, I declare a number of interests to the House. I am a vice-president of the Local Government Association, the chair of the Heart of Medway Housing Association, a non-executive director at MHS Homes Group, and a leaseholder.
Before the Bill arrived, it promised a lot. As it stands it is doing much less than that, so in a sense it is a fairly timid Bill. However, some of the things it does are actually very useful. I support the amendment of my noble friend Lady Taylor of Stevenage on forfeiture; it needs to be abolished. I have also listened to the noble Lords, Lord Truscott and Lord Bailey, and both make very valid points. The Government should listen and bring an amendment that addresses the points they made. That is not impossible, as far as I can see; it is absolutely right that there should be some remedy to deal with this.
Equally, we cannot have people being bullied into paying the service charge or ground rent; that it totally wrong. There must be remedies to deal with those things: if someone is owed money, they should get it, but forfeiture—losing their entire asset—is ridiculous. I hope that, on both points, which are extremely valid, the Government say to us that they hear what people are saying and that they will look at this issue and come back with amendments.
I want to ensure that people can enjoy their property without being annoyed by parties, noise and other trouble, and that there is a remedy to enforce that if need be. Equally, if someone has a freeholder coming after them, they could actually lose their property, or, worse, the freeholder could use their service charge or ground rent to take them to court. We need to deal with all these things.
I hope that, at the end of what will probably be a fairly short debate, the Government will recognise that there is a problem here and will help us by bringing back an amendment to deal with these issues; or, as the noble Baroness, Lady Pinnock, said, that they will get people together around the table to try to sort this out. The Bill is not doing much, but this is something very positive it could do.
The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Scott of Bybrook) (Con)
My Lords, I thank the noble Baroness, Lady Taylor, for her amendments in this group, which seek to remove forfeiture from the leasehold and freehold estate.
Amendment 55 seeks to address one of the ways in which leasehold law is tilted in favour of landlords. I know that noble Lords from all sides of the House are sympathetic to this intention, as are Members from the other place, where this same clause has already been debated.
Forfeiture is widely recognised as a draconian and unfair measure which is open to abuse. The main objection to the current law is that, should the landlord forfeit the lease and go on to sell the property, this allows them to make a large windfall gain at the expense of the leaseholder, who loses everything. Abolishing forfeiture would reduce the risk to the leaseholder of losing their home and would prevent abuses.
Abolishing forfeiture without replacing it with an alternative enforcement mechanism would mean that landlords would have recourse only to ordinary civil debt recovery and injunction proceedings, which, as we have heard, can be lengthy and are not always effective. In the absence of forfeiture or an alternative, there is a danger that a greater number of leaseholders may refuse to pay their fair share of the cost of maintaining their block or estate, and we have to take this all into account.
Noble Lords asked how many cases there are. We do not have the exact number, but stakeholders give us estimates of between 90 and 120 cases per year. It is not a big issue, but it is a very important one for those people.
Lord Bailey of Paddington (Con)
The number of cases will not indicate the use of forfeiture, because forfeiture is wielded as a fiery dragon. Leaseholders speak about it as the dog that bites. The number of cases may be small, but I would argue that the use of forfeiture is probably far greater.
Baroness Scott of Bybrook (Con)
I have said that it is not the right way of doing it, and we want a different way. That is exactly what the Government are looking at.
We have to be clear that the upkeep and safety of buildings is also paramount. Landlords, be they third parties or resident management companies, need effective mechanisms for securing prompt payment to ensure that those properties are insured and maintained in the interests of everybody else in the block.
We recognise that there is the potential for significant inequity at hand where a landlord stands to gain a windfall when a lease is forfeited. However, I reassure the noble Baroness, Lady Taylor, and the Committee that the Government have been listening to calls for us to act. The Government continue to work through the detail and we will report to the House shortly with more information. In the meantime, I welcome members of the Committee sharing their views on this matter, which the Government will reflect on when formulating their position.
In addition, I thank the noble Baroness, Lady Taylor, for Amendment 95, which seeks to abolish Section 121 of the Law of Property Act 1925 in respect of all rent charges. Let me be clear: the Government are sympathetic to the issue raised by the noble Baroness. We recognise that forfeiture is an extreme measure and should be used only as a last resort. Any changes will require careful consideration of the rights and responsibilities of all interested parties.
Clause 111 already seeks to abolish forfeiture for income-supporting rent charges, which are still in existence, even though the creation of new charges of this nature has been banned since 1977. However, some types of rent charges may still be created, including estate rent charges, which are used for the provision of services on managed estates.
Where they are created, estate management companies need a means to recover sums owed to them. Failure to do so means that costs may fall on other home owners, or the upkeep of an estate will worsen, to the detriment of everyone living on that estate. The problem may be particularly acute for resident-led management companies which do not have alternative sources of funding.
It is important that we fully understand any unintended consequences. This is an issue that we are carefully considering. I hope that, with those assurances, the noble Baroness will withdraw her amendment.
Lord Kennedy of Southwark (Lab Co-op)
My Lords, before the Minister sits down, most of what she said was very welcome. The acceptance that forfeiture is draconian, unfair and open to abuse—we agree with that. It is not the right way to do things, as the Minister said.
Specifically on inequality, we all agree with that, and it was good to hear the Government say that. A bit more disappointing was that I did not hear the Minister say, “I want to meet colleagues”; nor, “We hope to bring an amendment back on Report to address this”. All we got was, “We will formulate our position”.
There is agreement around the Chamber that what we need to see is an amendment that addresses all these issues. We would like a commitment to get us all together, and to hear from the Minister that she hopes there will be an amendment on Report. If we do not do that, there have been lots of warm words here but not much else has been achieved.
Baroness Scott of Bybrook (Con)
My Lords, I thought the Committee was probably fed up with me saying that I am always very happy to meet any group of noble Lords, on any subject, at any time. I apologise for not saying it in this group, and I will never ever forget to say it in any group in the future. Also, I said that we will report back to the House shortly with more details. I think the noble Lord needs to look at those words—they are quite positive.
Lord Kennedy of Southwark (Lab Co-op)
I am not saying they are not positive. At the end of the day, to make progress we need a government amendment, or an amendment that somebody else tables that the Government will support, at the next stage. That is progress; that is what I am trying to push. I know the Minister is very generous with her time, and wants to get this right, and wants to meet colleagues. I am just trying to get it on the record, that is all. I know the Minister has been good every time that colleagues have raised this issue in the House, and I have a Question on it again on, I think, 22 May. I thank her very much.
Baroness Taylor of Stevenage (Lab)
My Lords, I thank the Minister for her response. I thank the noble Baroness, Lady Pinnock, for supporting these amendments and the noble Lords, Lord Truscott, Lord Kennedy and Lord Bailey, for their comments.
In relation to the Minister’s comments about the time it takes to do this, I repeat that the Conservative Party has had this in its manifesto since 2017, so there has been quite a lot of time to think this through and have a look at this. It is a bit disappointing that we are in Committee in the House of Lords with some of these key issues still unresolved.
I ask your Lordships to reflect on, first, the example I gave in the earlier debate, of the elderly couple who told me they have a dispute with their landlord and are being threatened with forfeiture. They potentially have a £15,000 bill for the costs. If they pay that charge it is taken as agreement, but failure to pay it means that the landlord can invoke forfeiture, so where do they go? That is an awful position to put people in.
My second example is a young lady who I was out with the other day doing our political work. She lives in a leasehold flat; she put a political poster up in her window and then, almost immediately, received a letter from the landlord threatening her with forfeiture because that breached the terms of her lease. That seems an onerous way of dealing with a relatively small issue.
I listened carefully to the noble Lord, Lord Truscott, and he is right that there needs to be some form of resolution to this that means it does not need to go to the High Court—but it should certainly not be forfeiture, which is totally disproportionate. There may be a need to consider remedies other than the big sledgehammer of the High Court. Threatening to repossess people’s homes is certainly not an answer to technical breaches of lease.
Regarding rent charges, they will still be in place until 2037. We have to look at this and see whether we can find some way of getting rid of them before then.
As the noble Lord, Lord Kennedy, said, if we have to bring this amendment back again, we will, but I would rather the Government did so. That said, I withdraw the amendment.
Baroness Scott of Bybrook
“Schedule Part 2: consequential amendments to other legislationParliamentary Commissioner Act 1967
1 In Schedule 4 to the Parliamentary Commissioner Act 1967 (relevant tribunals), in the entry relating to rent assessment committees, omit “and also known as leasehold valuation tribunals for the purpose of determinations pursuant to section 21(1), (2) and (3) of the Leasehold Reform Act 1967”.Leasehold Reform Act 1979
2 In section 1 of the Leasehold Reform Act 1979 (price of enfranchisement under the LRA 1967 not to be made less favourable by reference to superior interest), in subsection (1), after “the price payable on a conveyance for giving effect to that section” insert “, in a case where the price payable is determined under section 9(1) of that Act by virtue of section 7A of that Act,”.Local Government Act 1985
3 In Schedule 13 to the Local Government Act 1985 (residuary bodies)—(a) in paragraph 14(aa), at the end insert “, where it applies by virtue of section 7A or 32(5) of that Act”;(b) omit paragraph 17.Housing Act 1985
4 In the Housing Act 1985—(a) in section 115 (meaning of “long tenancy”)—(i) for subsection (2)(c) substitute—“(c) at the time it is granted, it complies with the specified requirements.”;(ii) after subsection (2) insert—“(3) The “specified requirements” are—(a) in the case of a tenancy granted before 11 December 1987, the requirements of the Housing (Exclusion of Shared Ownership Tenancies from the Leasehold Reform Act 1967) Regulations 1982 (S.I. 1982/62) (including where the tenancy was granted before those regulations came into force);(b) in the case of a tenancy granted on or after 11 December 1987 and before the 2024 Act commencement day, the requirements in paragraph 2 of Schedule 2 to the Housing Association Shared Ownership Leases (Exclusion from Leasehold Reform Act 1967 and Rent Act 1977) Regulations 1987 (S.I. 1987/1940);(c) in the case of a tenancy granted on or after the 2024 Act commencement day, requirements specified in regulations made by the appropriate authority.(4) The “2024 Act commencement day” is the day on which paragraph 11 of Schedule 8 to the Leasehold and Freehold Reform Act 2024 comes into force.(5) “The appropriate authority” means—(a) in relation to England, the Secretary of State;(b) in relation to Wales, the Welsh Ministers.(6) Regulations under subsection (3)(c)—(a) are to be made by statutory instrument;(b) may make provision generally or only in relation to specific cases;(c) may make different provision for different purposes or different areas;(d) may include supplementary, incidental, transitional or saving provision.(7) A statutory instrument containing regulations under this section is subject to annulment in pursuance of—(a) where it contains regulations made by the Secretary of State, a resolution of either House of Parliament; (b) where it contains regulations made by the Welsh Ministers, a resolution of Senedd Cymru.”;(b) omit section 175 (determination of price payable on enfranchisement under LRA 1967 where tenancy created under right to buy).Landlord and Tenant Act 1985
5 In section 26 of the LTA 1985 (exception to service charge restrictions for public authority tenants)—(a) for subsection (3)(c) substitute—“(c) at the time it is granted it complies with the specified requirements.”;(b) after subsection (3) insert—“(4) The “specified requirements” are—(a) in the case of a tenancy granted before 11 December 1987, the requirements of the Housing (Exclusion of Shared Ownership Tenancies from the Leasehold Reform Act 1967) Regulations 1982 (S.I. 1982/62) (including where the tenancy was granted before those regulations came into force);(b) in the case of a tenancy granted on or after 11 December 1987 and before the 2024 Act commencement day, the requirements in paragraph 2 of Schedule 2 to the Housing Association Shared Ownership Leases (Exclusion from Leasehold Reform Act 1967 and Rent Act 1977) Regulations 1987 (S.I. 1987/1940);(c) in the case of a tenancy granted on or after the 2024 Act commencement day, requirements specified in regulations made by the appropriate authority.(5) The “2024 Act commencement day” is the day on which paragraph 11 of Schedule 8 to the Leasehold and Freehold Reform Act 2024 comes into force.(6) Regulations under subsection (4)(c)—(a) are to be made by statutory instrument;(b) may make provision generally or only in relation to specific cases;(c) may make different provision for different purposes or different areas;(d) may include supplementary, incidental, transitional or saving provision.(7) A statutory instrument containing regulations under this section is subject to the negative procedure.”Housing and Planning Act 1986
6 In Schedule 4 to the Housing and Planning Act 1986 (shared ownership leases), in paragraph 11 (transitional provisions and savings)—(a) in sub-paragraph (1), at the end insert “, subject to sub-paragraphs (1A) and (2)”;(b) for sub-paragraph (2) substitute—“(1A) The amendment made by paragraph 7 (repeal of section 140 of the Housing Act 1980) also applies in relation to leases granted before the commencement of this Schedule, except in cases where, under section 7A or 32(5) of the Leasehold Reform Act 1967, the Leasehold Reform Act 1967 has effect without the amendments made by the Leasehold and Freehold Reform Act 2024.(2) In those cases, this Schedule does not affect the operation of section 140 of the Housing Act 1980, the enactments applying that section or regulations made under it.”Housing Act 1988
7 In Schedule 17 to the Housing Act 1988 (minor and consequential amendments)—(a) omit paragraph 40;(b) omit paragraph 68. Local Government and Housing Act 1989
8 In paragraph 5 of Schedule 10 to the Local Government and Housing Act 1989 (security of tenure for long residential leases)—(a) in sub-paragraph (4), for the words from “unless” to the end substitute “unless—(a) the landlord is a relevant authority, and(b) the premises are required for relevant development.”;(b) after sub-paragraph (4) insert—“(4A) For those purposes—(a) “relevant authority” means a person referred to in any paragraph of section 38(2) of the Leasehold Reform Act 1967;(b) “relevant development”—(i) in relation to a relevant authority other than a health authority, means development for the purposes (other than investment purposes) of that body;(ii) in relation to a relevant authority that is a health authority, means development for the purposes of the National Health Service Act 2006 or the National Health Service (Wales) Act 2006;(iii) in relation to a relevant authority that is a university body, also includes development for the purposes of any related university body;(iv) in relation to a relevant authority that is a local authority, also includes area development;(c) “health authority” means—(i) NHS England;(ii) any integrated care board;(iii) any Local Health Board;(iv) any Special Health Authority;(v) any National Health Service trust;(vi) any NHS foundation trust;(vii) any clinical commissioning group;(viii) any Strategic Health Authority;(ix) any Primary Care Trust;(d) “university body” and “related university body” have the same meaning as in section 29(6ZA) of the Leasehold Reform Act 1967;(e) “local authority” has the same meaning as in section 29(5) of the Leasehold Reform Act 1967;(f) “area development” means any development to be undertaken, whether or not by a local authority, in order to secure—(i) the development or redevelopment of an area defined by a development plan under the Planning and Compulsory Purchase Act 2004 as an area of comprehensive development;(ii) the treatment as a whole, by development, redevelopment or improvement, or partly by one and partly by another method, of any area in which the premises are situated.”Local Government (Wales) Act 1994
9 In Schedule 13 to the Local Government (Wales) Act 1994, in paragraph 24—(a) omit paragraph (b);(b) in paragraph (c), at the end insert “, where it applies by virtue of section 7A or 32(5) of that Act”.Housing Act 1996
10 In the Housing Act 1996—(a) omit section 109 (collective enfranchisement: valuation);(b) omit section 110 (lease extension for flats: valuation);(c) in Schedule 10 (consequential amendments)— (i) in paragraph 6, omit sub-paragraph (4); (ii) omit paragraph 18;(d) in Schedule 11 (compensation for postponement of termination in connection with ineffective claims)—(i) in paragraph 2, omit sub-paragraph (2);(ii) in paragraph 3, omit sub-paragraph (2).Commonhold and Leasehold Reform Act 2002
11 In the CLRA 2002—(a) omit section 126 (collective enfranchisement: valuation date);(b) omit section 127 (collective enfranchisement: freeholder’s share of marriage value);(c) omit section 128 (collective enfranchisement: disregard of marriage value for very long leases);(d) in section 130 (lease extension for flats: residence test), omit subsection (2);(e) omit section 132 (lease extension for flats: personal representatives);(f) omit section 134 (lease extension for flats: valuation date);(g) omit section 135 (lease extension for flats: freeholder’s share of marriage value);(h) omit section 136 (lease extension for flats: disregard of marriage value for very long leases);(i) in Schedule 13 (leasehold valuation tribunals), omit paragraph 15.Finance Act 2003
12 In the Finance Act 2003—(a) in Schedule 4 (stamp duty land tax: chargeable consideration), for paragraph 16C substitute—“16C The following do not count as chargeable consideration—(a) costs borne by the purchaser under section 9(4) of the Leasehold Reform Act 1967, where it applies by virtue of section 7A of that Act;(b) any amount payable by the purchaser under section 19C of the Leasehold Reform Act 1967;(c) any amount payable by the purchaser under section 89C or 89D of the Leasehold Reform, Housing and Urban Development Act 1993.”(b) in Schedule 17A (leases: further provision), in paragraph 10 (tenants’ obligations etc that do not count as chargeable consideration), for sub-paragraph (1)(f) substitute—“(f) any liability of the tenant for costs under section 14(2) of the Leasehold Reform Act 1967, where it applies by virtue of section 32(5) of that Act;(fa) any amount payable by the tenant under section 19C of the Leasehold Reform Act 1967 or section 89F of the Leasehold Reform, Housing and Urban Development Act 1993;”Companies Act 2006
13 In section 1181 of the Companies Act 2006 (access to constitutional documents of RTE and RTM companies)—(a) in the heading, omit “RTE and”;(b) in subsection (1), omit paragraph (a);(c) in subsection (4), omit the definition of “RTE companies”.Enterprise and Regulatory Reform Act 2013
14 In section 84 of the Enterprise and Regulatory Reform Act 2013 (redress schemes: property management work), in subsection (10), omit the words from “or which” to the end. Immigration Act 2014
15 In Schedule 3 to the Immigration Act 2014 (excluded residential tenancy agreements), in paragraph 13(2)(a), omit the words from “or which” to the end.Consumer Rights Act 2015
16 In section 88 of the Consumer Rights Act 2015 (duty of letting agents to publicise fees: supplementary provisions), in subsection (1), in the definition of “long lease”, omit paragraph (a)(ii) and the “or” preceding it.Housing and Planning Act 2016
17 In Schedule 10 to the Housing and Planning Act 2016 (leasehold enfranchisement and extension: calculations)—(a) omit paragraph 4;(b) omit paragraph 5.Tenant Fees Act 2019
18 In section 28 of the Tenant Fees Act 2019 (interpretation), in subsection (1), in the definition of “long lease”, omit paragraph (b) and the “or” preceding it.Building Safety Act 2022
19 In Schedule 8 to the BSA 2022 (remediation costs), in paragraph 6 (permitted maximum)—(a) in sub-paragraph (5), omit “total” in each place it occurs;(b) in sub-paragraph (8)—(i) for “total” substitute “tenant’s”;(ii) for “section 7” substitute “section 101(1)”.”Member's explanatory statement
This new Schedule would make amendments to other legislation in consequence of Part 2.
Lord Khan of Burnley
Member's explanatory statement
This amendment would ensure that all leaseholders, not just those with residential leases of 150 years or over, have the right to vary their lease to replace rent with peppercorn rent.
Lord Khan of Burnley (Lab)
My Lords, I will speak to Amendment 57 in the name of my noble friend Lady Taylor of Stevenage. Schedule 9 makes provision for a new enfranchisement right to buy out the ground rent and to vary it permanently to replace the relevant part of the rent with a peppercorn rent, without having to extend the lease. We welcome the intent of the schedule. The reform will ensure that leaseholders can enjoy reduced premiums and secure nominal ground rent ownership of their properties, without the need to go through the challenge and expense of repeated lease extensions.
The schedule implements the Law Commission’s recommendation for the right to extinguish the ground rent only. However, we have brought an amendment that would delete the Government’s proposed 150-year threshold, to press the Minister on the reason for which the Government have decided to confer that right only on leaseholders with leases with an unexpired term of more than 150 years.
The Law Commission recommended that the threshold should be set at 250 years on the basis that the reversion is of negligible value at that lease length. The Government chose not to accept that recommendation and, instead, are proposing a threshold of 150 years. The Minister may provide us with a different answer in due course, but we assume the reason that they did so is simply that this will make the new right to extinguish a ground- rent available to many more leaseholders. However, if that is the case, it obviously follows that setting a threshold of, say, 125 or 100 years would make it available to even more of them.
As my honourable friend Matthew Pennycook MP stipulated in the other place,
“any long lease threshold for the new right is ultimately entirely arbitrary, as evidenced by the fact that the Government chose a different threshold from the one recommended by the Law Commission”.—[Official Report, Commons, 27/02/2024; col. 201.]
There is a principled argument that we should trust leaseholders to make decisions based on what is right for them and their individual circumstances, rather than denying a broad category of leaseholders a new statutory right on the basis that Ministers know best what is in their interests.
If unamended, Schedule 9 will ensure that some leaseholders can enjoy reduced premiums and secure nominal ground rent ownership of their properties, without the need to go through the challenge and expense of repeated lease extensions. However, we remain unconvinced by the Government’s proposed conferral of this new right only on leaseholders with leases with an unexpired term of more than 150 years. There could be all sorts of reasons why someone with a lease shorter than 150 years might want to buy out only the ground rent, including simply that they are unable to afford the premium required to secure a 990-year lease. Denying them that right on the grounds that other leaseholders might advertently or inadvertently disadvantage themselves, by using the new right to extinguish only the ground rent, strikes us as overly paternalistic and misguided.
We remain of the view that there is a strong case for simply deleting the 150-year threshold entirely, given that the remaining years test that applies is arbitrary and the most common forms of lease are 90, 99 and 125 years. Amendment 57 would do that, thereby making the new right to replace rent with a peppercorn rent available to all existing leaseholders. I beg to move.
Baroness Thornhill (LD)
My Lords, I support Amendment 57 in the name of the noble Baroness, Lady Taylor of Stevenage. As has been said, Schedule 9 confers on a qualifying tenant the right to buy out the ground rent and replace it with a peppercorn rent. Instead of the extended leases that are paid for each time, it is a decision to make a one-off payment—job done once and for all.
This is a welcome measure. However, as has been said, under paragraph 2 of Schedule 9, the tenant must have at least 150 years left on their lease to qualify. Amendment 57 from the noble Baroness, Lady Taylor of Stevenage, would ensure that all leaseholders, not just those with residential leases of 150 years or over, have the right to vary their lease in this way and replace it with a peppercorn rent.
The provisions on the variation of leases and removal of ground rent are complex, but they are based on the principle of granting leaseholders flexibility and a recognition that different solutions might be preferable for the different situations that they are in. The argument has been put forward that these provisions should apply to leases that are sufficiently long, with the Law Commission recommending a very long length of 250 years and the Government settling on 150. Therefore, Amendment 57 rightly probes that length. If not 250 years, why not 125 years, 90 years or indeed no threshold for length at all?
Data on this was hard to find, but DLUHC’s English Housing Survey of owner-occupier leaseholders for the year 2020-21 found that 45% of leaseholders had a leasehold term between 71 and 120 years, and that the median length of leases was 112 years. This suggests that there could be lots of leaseholders with reasonably long leases who would not be given these rights in relation to ground rent.
I would also like colleagues to note that mortgage lenders are now getting very active on ground rent terms and taking an ever more conservative view on ground rent clauses. They are refusing to lend on leasehold homes where the ground rent is seen as onerous—the definition of that might be that it continues to double or that there are other strictures in place. This means that some leaseholders will be left with flats that are difficult to sell, as well as an escalating ground rent.
We would therefore welcome further information from the Minister about whether these provisions could be extended to cover more leaseholders, especially given their own figures.
Baroness Scott of Bybrook (Con)
My Lords, I will speak to government Amendments 58 and 59 in my name. Government Amendment 59 changes “premium” to “price”, referring to the sum paid for a ground rent buyout, to make the language consistent with the rest of the Bill. Government Amendment 58 makes a minor wording change to clarify that it is “the appropriate tribunal” that may make an order to appoint a person to vary a lease on behalf of the landlord or tenant in the case of a commutation following a ground rent buyout. I hope noble Lords will therefore support these amendments.
I turn to Amendment 57 from the noble Baroness, Lady Taylor, and moved by the noble Lord, Lord Khan of Burnley. This seeks to remove the threshold for the ground rent buyout right. I appreciate the concerns that lie behind this amendment and understand that the noble Baroness is seeking to ensure that as many leaseholders as possible can benefit from the new right. First, it is very important to note that all leaseholders, regardless of their term remaining, have the means to buy out their ground rent. They do so whenever they extend their lease or buy their freehold. It is only the right to buy out the ground rent without extending the lease or buying the freehold that is limited to leaseholders with 150 years or more remaining. The 150-year threshold exists to protect those leaseholders with shorter leases who will, at some point, require an extension from being financially disadvantaged by first buying out their rent, only having to extend later and paying more in total for doing so. However, we understand the argument that all leaseholders should be able to buy out their rent without extending their lease or buying their freehold if they want to, and we are listening carefully to that argument.
The Law Commission recommended 250 years, but it noted that the department might want to set the threshold lower. The department’s analysis showed that 150 years would enable more leaseholders to take advantage of the ground rent buyout right, while still being a long enough term remaining that the leaseholder does not need to extend if they do not want to. A lower minimum term would create a risk that poorly advised leaseholders might buy out the ground rent when an extension is in their best interest, then find out that they need to extend later and have to pay a higher premium, except for the extension, and two sets of transaction costs. We believe this is helping the leaseholder.
I hope that the noble Baroness will appreciate the reasons we have given for the existence of the threshold, and those assurances, and withdraw her amendment.
Lord Khan of Burnley (Lab)
My Lords, I rise very briefly to thank the Minister for her response. I appreciate the comments made by the noble Baroness, Lady Thornhill. In the future, we will look to work with colleagues across the House to see where we are on this. In the meantime, I beg leave to withdraw my amendment.
Baroness Scott of Bybrook
Member's explanatory statement
This amendment would correct an error.
Member's explanatory statement
This amendment would reflect other amendments in the Bill to change references to the premium to references to the price.
Member's explanatory statement
This amendment would leave out the proposed new section 87B of the Commonhold and Leasehold Reform Act 2002 and so ensure that RTM companies cannot incur costs in instances where claims cease.
Baroness Taylor of Stevenage (Lab)
My Lords, our amendment in this group refers to the fact that the Bill currently makes an exception to litigation costs being borne by landlords in the case where right-to-manage claims have been withdrawn or otherwise ceased early and the right-to-management company has acted unreasonably in bringing the right-to-management claim, allowing the landlord to apply to the tribunal for any reasonable costs.
The key arguments for the amendment are that, first, leaseholders should not be put at risk of having to pay costs simply for exercising statutory rights, in this case the right to seek to acquire and exercise rights in relation to the management of premises in which one has a leasehold interest. There is also concern that unscrupulous landlords might use the rights provided for in new Section 87B of the Commonhold and Leasehold Reform Act 2002 as a means of recovering costs from right-to-manage companies that act reasonably and in good faith and, by implication, that it would discourage right-to-manage companies from initiating a claim because of the financial risk it still entails for individual participating leaseholders. Put simply, the fear is that new Section 87B will incentivise unscrupulous landlords to fight claims on the basis that they are defective in the hope of recovering costs by means of it. Our main concern regarding Clause 48 is that the use of the words “reasonable fee” and “reasonable costs” would not allow either of the above situations to occur. I ask the Minister: who will determine the definition of “reasonable”, and how?
I will comment on other amendments. We think that the amendments tabled by the noble Lord, Lord Bailey, are very reasonable, and we support his aims here. In fact, colleagues in the other place submitted similar amendments in Committee.
I also look forward to hearing the noble Lord, Lord Moylan, introduce his amendments, which would incorporate local authorities and their properties, both within the HRA and without, but I ask whether he had discussions about this proposal with the Local Government Association or local authority stockholders. Most good local authority landlords already have substantial arrangements in place for liaison with leaseholders and tenants around the management of property, and there is certainly no issue with improving that through more effective right-to-manage arrangements. However, as much local authority property will be occupied by a mixture of local authority tenants and leaseholders, it would be important to ensure that there were no unintended consequences. I urge that that level of consultation takes place before any proposal such as this proceeds further. The noble Lord, Lord Moylan, will forgive me if he has already done that consultation, but it was not clear from the amendments. With that, I beg to move Amendment 60.
Lord Moylan (Con)
My Lords, it is a privilege to speak after the noble Baroness. I will come to answering her question. To give a blunt answer, I have not undertaken the consultation that she refers to, but I will explain when I get to that part of my introduction why I think that this stands on its own.
As I said at Second Reading, I strongly support those parts of the Bill which facilitate the exercise of the right to manage on the part of leaseholders in residential blocks. There are several measures in the Bill which do that. The right to manage is, in some ways, the crucial key to unlocking the levels of dissatisfaction which some leaseholders have with the way in which their blocks are managed. I strongly support it.
There is a particular issue which the Bill does not address. As a consequence of my general support for this—contrary to my remarks in earlier debates— I hope that the Government will give me a softer and more welcoming answer. As a result of my proposal, perhaps my noble friend on the Front Bench will even give me one of those answers which invites me to attend a meeting. In fact, I have had a meeting with my noble friend about this, though she may not recall it. We met last summer to discuss this issue with officials, and she was very sympathetic to it. That gives me additional reasons for thinking that this might be a welcome amendment.
The amendment arises from a particular case, but it raises questions of general importance. I shall refer to the case later, but I want to address the question of general importance first. When the right to manage was introduced through the Commonhold and Leasehold Reform Act 2002, certain exceptions were placed on it. The Government intend to ease some of those restrictions, and I welcome that. One restriction was that the right to manage did not apply where the landlord of the building was a local housing authority.
I have tabled two alternative amendments—this is my point about consultation. Both amendments would reverse that assumption. One would eliminate it entirely. It would bring within the ambit of right to manage all blocks where the local housing authority was the landlord, including those within the housing revenue account. The noble Baroness, Lady Taylor of Stevenage, said that this could raise certain difficulties in cases where a block had so many long lease holders that it could exercise the right to manage but would be left with certain local authority tenants in the block. I have experience of local government, as does the noble Baroness. I recognise that she is correct in saying that there might be certain sensitivities about this. I think it could be managed. Indeed, it would be liberating for all the tenants of the block in many ways. The local authority tenants would also have a say in the management of the block. They would not be excluded from it simply because they were local authority tenants.
Recognising that this is a slightly daring proposition, I have suggested an alternative which would simply take out of the provision local housing authority-owned blocks where they were owned simply as an investment. I have left it vague as to whether that is a commercial investment or one held in the local authority’s pension fund. These are probing amendments. I should be happy to discuss these issues with my noble friend the Minister.
I come now to a particular case. There are blocks where local authorities have acquired property as an investment. Doing so immediately extinguishes the right of the long lease holders to exercise their right to manage—there are no local authority tenants. I think that is wrong. The case I am thinking of concerns a block acquired by a London local authority from a commercial property investment trust, bought at market value as an investment. The local authority, the new owner, was dissatisfied with the accounts inherited from the previous manager—it had their own manager for the block. As a result, it has not been able to put satisfactory accounts together for the last three years. As a consequence, it has not had the legal standing to issue invoices to its tenants for its service charges. It has been running the building’s operating costs out of the capital sums that had been set aside as a sinking fund to pay for future improvements to the building. It is all very unsatisfactory.
That is a classic situation in which long leaseholders would normally exercise the right to manage but, completely arbitrarily, are precluded from doing so. That is wrong. We should facilitate this.
At the very least, my noble friend should welcome my second amendment, Amendment 62, and say that where a local authority acquires a property for commercial purposes—not for the housing of its tenants but as an investment, either in its own name or as part of its pension fund—the right to manage would be restored. The financial interests of the local authority would be preserved, as they are under the current arrangements. It is simply that the right to manage the building would be taken over by the long leaseholders, as elsewhere, and they would manage it in just the same way as in all the other right-to-manage arrangements we are so much in favour of.
I will stop at that point because I have simply made my case, but this is a strange omission from the current arrangements, and one that we now have an opportunity to correct. I would be very happy to attend the meeting.
Lord Bailey of Paddington (Con)
My Lords, I will speak to my Amendments 65A and 65B. The Government should be applauded for their ambitions as laid out in the Bill. Let us hope that we can achieve them all. I put on record that I am pleased with the Government’s direction of travel, because some of my interventions up until now may have seemed slightly belligerent, but can my noble friend the Minister provide some reassurance around the Government’s stated aim of a revolution in the right to manage? That would help to address what, for me, is at the heart of what I consider the leasehold scandal, which is really about control. Leaseholders in England and Wales are unique in the lack of control that they have. Worldwide, leaseholders and those with commonhold and many other types of tenure have much more control. I believe that is something the Bill can address, and the Government have to demonstrate that they want to deliver on it. Indeed, it was our own Secretary of State who said that he wants to see a revolution in the right to manage.
I put on record my colleagues Nickie Aiken and Barry Gardiner, who brought a very similar amendment in the other place. Amendment 65A seeks to ensure that leaseholders in mixed-use property who would otherwise qualify for the right to manage because 50% or more of the floorspace is residential, but because of a technicality—a boiler or an underground car park—are prevented from having that management given to them, still have that right. The current test means that you have to demonstrate that your building is self-contained or that the residential part is partly self-contained, but the layout of the building might suggest that it is not self-contained due to an underground car park or boiler room, when actually it is.
The Law Commission saw these two tests as too strict. It suggested that a third test could be set whereby, if it could be demonstrated that people are reasonably capable of managing the residential area fully independently, they should be given access to this power. As I have stated in most of the debate, the thing that most drives me is the potential for the abuse of service charging. Giving residents control over their assets is clearly the answer to that.
The amendment does not mean that leaseholders can take over the management of shops, hotels or commercial premises. That is not the idea of the amendment. The right to manage applies exclusively to the residential parts, such as corridors and lift lobbies —parts of the building used only by residents. The amendment does not seek to change that position.
At Second Reading, I made the point that even the leading freeholder lobby group pointed out that free- holders own, at best, only 2.5% of the capital interest in the buildings they have the freehold of. That leads me to my other amendment, Amendment 65B. We must lower the threshold at which a group of people can take over the management of that lease. It is currently at 50%. I suggest that it should be at around 35%—again, to help the Government achieve their stated aim of a revolution in right to manage.
Baroness Thornhill (LD)
My Lords, I have asked to speak to the amendments in this group, which is a bit shorter than it would have been had the Clause 47 stand part notice remained. That was certainly something on which I would have urged the Government to stand firm.
We strongly support Amendment 60 in the name of the noble Baroness, Lady Taylor of Stevenage. Anyone who has done a bit of googling on the right to manage can see that right-to-manage claims by leaseholders are often fiercely opposed by freeholders. What is meant to be a so-called no-fault process can involve costly and stressful litigation for leaseholders, as freeholders drag the right to manage claim into the tribunal system. Freeholders gameplay and try to block RTM bids, because the right to manage signifies loss of their control and ability to rip off leaseholders in perpetuity.
Against this backdrop of right-to-manage cases going to tribunal and becoming the subject of “lawfare” by freeholders, it is surely reasonable to ensure that right-to-manage companies cannot incur costs in instances where claims cease. The way things stand, it is clearly intended to be a disincentive to leaseholders to seek the right to manage, and that imbalance cannot be right. Some noble Lords may remember the Canary Gateway case: it took an outrageous four years for the shared-ownership leaseholders to secure their right to manage, with the freeholder-driven litigation going as far as the Court of Appeal.
Turning to Amendments 61 and 62 in the name of the noble Lord, Lord Moylan, we on these Benches would support them in principle as they are increasingly sold as access to the right to manage. However, they stand in stark contrast to the noble Lord’s other amendments, which sought to reduce leaseholder access to collective enfranchisement and right to manage.
Baroness Thornhill (LD)
I hesitated and thought about cutting that bit out, but go on.
Lord Moylan (Con)
The noble Baroness could not expect to get away with that. Any attempt to cast me as a as a poodle of freeholders and opposed to leaseholders is bound to be foiled because it is untrue. I have made it clear throughout that I strongly support the right to manage and its extension. This is very different from expropriation of somebody else’s property. This is simply a technique for managing a building and managing it well.
I should also say while I am on my feet that when we exercised the right to manage in the block in which I live, many years ago, the freeholder was highly supportive because they were sick to death of the managing agent as well, and realised that their building would be managed a great deal better by us, as it has been. They have an interest in the building being well managed: they want the roof to be repaired; they want the facade not to fall off in chunks in the street because, after all, they, too, whatever else is said, have a long-term interest in the building.
Baroness Thornhill (LD)
My comments were not about right to manage. That was a good segue into another short speech by the noble Lord.
However, we are conscious that expanding right to manage to leaseholders under local authority landlords was never considered by the Law Commission, nor put out to public consultation. We are unsure whether the Government have done policy work in this area. It is a whole other ball game and will be challenging. But, in principle, given that many local authorities have been guilty of significant and tragic failures of service, to put it mildly, this should be a right of local authority tenants too. But it will be complex, for many of the reasons that were well outlined by the noble Baroness, Lady Taylor.
It is also worth reminding ourselves that local authority leaseholders have, since 1994, been able to take over management through tenant management organisations. I do not believe any work has been done regarding their success or otherwise. But such a review could ignite and inform this topic on another occasion. We welcome the probe by the noble Lord, Lord Moylan, and also the subtleties of his alternative proposals, and will certainly attend the said—and very popular —meeting.
Finally, I come to Amendments 65A and 65B, in the name of Lord Bailey of Paddington. The aim of Amendment 65A is a good one: to ensure that leaseholders in mixed-use buildings can avail themselves of the right to manage. At the House of Commons Public Bill Committee in January, MPs heard that many leaseholders in mixed-use buildings would still be unable to benefit from the reforms in the Bill to take over management—because, as the noble Lord said, of the existence of, say, a shared plant room or car park, under rules regarding structural dependency and self-containment. The existence of a plant room or other infrastructure is something decided by the original developer and leaseholders have no control over these factors, so it feels unfair to exclude them from right to manage based on the way a block has been designed, especially if they qualify under the new 50% non-residential premises limit.
Amendment 65B would put rocket boosters under the right to manage, opening it up to far more leaseholders. We on these Benches support the amendment and the intent behind it. Members in the other place have raised concerns that the 50% trigger is too high. The 50% participation limit on right to manage was also flagged as an issue by leaseholder campaigners at the Commons Public Bill Committee in January.
There may be concerns about 50% being less than a majority, but, as the noble Lord said, many leaseholders will never be able to obtain 50% support because of the high levels of buy to let in their block. But ultimately the Committee was persuaded of the case to bring down the 50% threshold. It is not right that just one person—the freeholder or landlord—has such control over leaseholders and can impact almost at will on their finances. As the noble Lord’s amendment suggests, 35% of leaseholders triggering a right to manage, with a right to participate for remaining leaseholders who did not originally get involved, is a far better situation than rule by one freeholder, whose interests, as the Law Commission concluded, are diametrically opposed to that of the leaseholder. Leaseholder self-rule with right to manage and a 35% participation threshold is a much more democratic state of affairs. Let us be honest: many councillors and MPs are elected to govern on much less than 50% of the vote—in fact, usually around 35%.
Baroness Scott of Bybrook (Con)
My Lords, I thank the noble Baroness, Lady Taylor of Stevenage, for Amendment 60, which would leave new Section 87B out of the Commonhold and Leasehold Reform Act 2002. This is a new power, inserted into the 2002 Act by the Bill, for the tribunal to order the repayment of a landlord’s process costs for right to manage claims which are withdrawn or cease to have effect in circumstances where a right to manage company has acted unreasonably.
The noble Baroness asked who would decide what was reasonable or unreasonable and the level of reasonableness. The costs will be determined by the tribunal, as is the case with other kinds of litigation or court proceedings.
While we strive to reduce costs for leaseholders, we do not believe it is right to do so where the right to manage company acts unreasonably in bringing a claim and the claim also fails. For example, landlords should not have to meet their own wasted process costs where leaseholders clearly make an unfeasible claim or fail to bring the claim to an end at an earlier stage.
The noble Baroness should be assured that the new power for the tribunal does not automatically entitle landlords to repayment. If the tribunal does not consider that costs should be payable, it can decline to make an order. Removing new Section 87B would expose landlords to unfair costs. For these reasons, I ask the noble Baroness kindly to withdraw her amendment.
I thank my noble friend Lord Moylan for his Amendments 61 and 62. The amendments seek to remove or amend the existing exception to the right to manage for local authority premises so that the right can be used by their long lease holders. I should explain that there is a separate right to manage scheme for local authority secure tenants and leaseholders under the Housing Act 1985 and its relevant regulations. The Commonhold and Leasehold Reform Act 2002 therefore excepted local authority leaseholders from the long-leasehold right to manage to avoid creating conflicting schemes.
The Bill delivers the most impactful of the Law Commission’s recommendations on the right to manage, including increasing the non-residential limit to 50% to give more leaseholders the right to take over management, and changing the rules to make each party pay their own process and litigation costs, saving leaseholders many thousands of pounds.
An alternative route to management is available in some local authority blocks that contain a mixture of tenants and leaseholders, where a prescribed number and proportion of secure tenants are in support of exercising the right. This involves setting up a tenant management organisation. It would complicate a system that we are trying to simplify if two separate routes were to apply to a single block, and the Law Commission made no recommendations on local authority leaseholders.
Lord Moylan (Con)
My Lords, I have some familiarity with the Housing Act 1985 from my time in local government. I am reasonably well aware of the obligation to create tenant management organisations, which are often not block-specific but estate-wide or, in many cases, spread across the entire local authority council housing stock. It seems a strange way to go about trying to exercise the right to manage if we are discussing a block held as an investment that has no local authority tenants. Can my noble friend assure me that the Housing Act 1985 is an effective means for leaseholders in the circumstances I describe to exercise their right to manage, when in fact it is an obligation on a local authority rather than a right granted to long lease holders?
Baroness Scott of Bybrook (Con)
We believe this is the correct way of doing it. I would be very happy to meet my noble friend to discuss this further but, with the evidence we have, we agree this is the correct way forward. But I really am very happy to meet with the noble Lord.
Lord Bailey of Paddington (Con)
I have heard what my noble friend the Minister has had to say and I am minded to do as she asks—if I could get one of those meetings that she has to offer. I am sure then that we could come to an accommodation.
Baroness Scott of Bybrook (Con)
I will be very happy to spend a week in here so that noble Lords can come in and out and speak to me as they like—and I would love to meet my noble friend to talk about this further. He talked also about transparency and it not being terribly necessary. The problem is that, if you do not have transparency, sometimes you do not know you are being ripped off, because you do not have the required information—so I think transparency is actually really important.
Lord Bailey of Paddington (Con)
My Lords, it was not that I do not like transparency. I agree with my noble friend that transparency is very useful so you know whether you are being ripped off. I was making an appeal for the ability to intervene in the process of being ripped off. I have been on the other end of this situation, where people have quite happily told us what they are overcharging us for, but we had no mechanism to interfere in that. That is what I was more concerned with.
Baroness Scott of Bybrook (Con)
I thank my noble friend for that but, for the reasons I have put forward, I kindly ask him not to press his amendments.
Baroness Taylor of Stevenage (Lab)
My Lords, I am grateful, as ever, to the Minister for her responses. It seems she is going to be very busy over the next few weeks, having all these meetings with all of us. I thank the noble Baroness, Lady Thornhill, for reminding me that, had the right reverend Prelate been here, I too would have objected strongly to the proposals he was making on Clause 47, because they would simply have opened the door to retaining the 25% limit, virtually across the property sector. I believe that would have gone against the intentions of the Bill, so she was right in what she said there and I thank her for her support for my amendment.
From this side of the House, I say to the noble Lord, Lord Bailey, that we welcome belligerent interventions from either side, but especially from the Benches opposite, so just keep going with those. We particularly agree with his Amendment 65B. If his meeting does not achieve the desired effect and he chooses to pursue this, he will certainly have our support.
I thank the noble Lord, Lord Moylan, very much for his explanation. I had not realised that these were either/or amendments, but I understand his point about property owned as an investment by a local authority or pension fund. I agree with his point about the principle of right to manage being extended as far as possible. That is absolutely right, although anything affecting local authorities needs to have some consultation with the sector, because we just do not know what any unintended consequence of that might mean. I hope he will consider that if he chooses to pursue this amendment, but perhaps the meeting with the Minister might allay his concerns in that regard. That said, I beg leave to withdraw my amendment.
Baroness Pinnock
“Report: restrictions around ground rent investments(1) Within six months of the day on which this Act is passed the Secretary of State must lay before Parliament a report outlining the impact of this Act on ground rent investments.(2) The report in subsection (1) must also make an assessment of the impact of—(a) prohibiting future ground rent investments, and(b) encouraging divestment from existing ground rent investmentson leaseholders and freeholders.(3) In this section “ground rent investment” means investment by a pension fund or other type of fund in leaseholds for the purpose of collecting ground rent.”Member’s explanatory statement
This is a probing amendment that would require the Government report on the impact of this Act on ground rent investments, and the impact of prohibiting future ground rent investments and encouraging divestment from existing ground rent investments on leaseholders and freeholders.
Baroness Pinnock (LD)
My Lords, Amendment 63 in my name was tabled to probe the impact of the proposals in the Bill on ground rent investments, and the effect of prohibiting future ground rent investments, and encouraging divestment from existing ground rent investments, on leaseholders and freeholders. The Government’s intentions appeared to be clear. In 2022, the Leasehold Reform (Ground Rent) Act effectively set the ground rent on new leases at zero, so the direction of travel seemed set. Further, last November, the Government launched a consultation on ground rents, which included capping the charge at a peppercorn rate for existing leaseholders.
The Secretary of State said at the time that the aim was to help protect those leaseholders who
“can be faced with ground rent clauses in their leases which result in spiralling payments with no benefit in return”.
Now, apparently, the Government have backed off from a fundamental reform and seem set on phasing out ground rents over a period of 20 years and setting a cap on ground rents at £250 per annum.
The fundamental question we have to ask is: what benefit do leaseholders accrue from paying a ground rent of, for example, £250 a year? The answer, is, of course, that ground rents really are a something-for-nothing payment—I bet you would not get away with this in Yorkshire. If the Government are determined, as they initially said they were, to bring fairness to leaseholders, then ground rents would be consigned to history.
However, on the other hand, ground rents provide a steady income for institutions as well as individual freeholders. It seems that the pressure on the Government to row back from abolition or peppercorn was sufficient to cause considerable backpedalling.
The Society of Pension Professionals—which the noble Lord, Lord Truscott, referred to six hours ago—has examined this issue as a result of much being made about the potential impact on pension funds of reducing ground rents to either £250 or zero. The following is a statement from the Society of Pension Professionals:
“Freeholders are already prevented from charging ground rents on new long leases (of more than 21 years), so it’s perhaps understandable that the government wants something similar for existing long leaseholders. The government estimates that capping ground rents at £250 a year would decrease the value of affected property assets by £14.6 bn or £27.3 bn if rents are reduced to a peppercorn. If these proposals become law, there may be some short-term impact on pension fund investors through asset values being written down. Certain pension funds may also be impacted where they own freehold titles directly, although that will be less common. The effect of these proposed adjustments is likely to be more significant for such investors than the loss of annual ground rent income over the term of the lease”—
I emphasise this next part—
“but the scale relative to total assets is probably not that significant for most in the long-run”
That is an authoritative statement, and I would like to hear a full response from the Minister—probably in writing given the late stage of the evening—as this reform is a critical part of leasehold reform. Before Report, we need to see the detailed proposals from the Government and a full explanation of their reasons.
In conclusion, these Benches want the iniquitous system of ground rents to be abolished or at least reduced by introducing a peppercorn as the set fee. I beg to move.
Lord Khan of Burnley (Lab)
My Lords, at this late stage of the evening, I will be brief in speaking to Amendment 65 in the name of my noble friend Lady Taylor of Stevenage. The amendment would require the Government to publish their response to their consultation on a cap on ground rents and set out its implementation within a month of the Bill passing. It is a pleasure to follow the noble Baroness, Lady Pinnock. She described ground rent as something for nothing and something that you would not get away with in Yorkshire. Let me assure her that the noble Lord opposite can confirm that you would not get away with it in Lancashire either.
In the past five or six days we have seen a lot of press in relation to the new £250 yearly ground rent cap for 20 years. However, we still have not had confirmation here at this stage of the Bill from the Government. I want to press the Minister on the comments of the Secretary of State, who said in November that the
“consultation was launched to help protect those leaseholders who can be faced with ground rent clauses in their leases, which result in spiralling payments with no benefit in return”.
How are those press announcements happening, when we have not had a consultation analysis and we have not had feedback on the findings of the consultation? We find out in the media what the Government are thinking, and that is not right; we challenge that operation and procedure as a way of working, whereby we find in the media numerous reports about the Government’s intentions.
Lord Truscott (Non-Afl)
My Lords, I support Amendments 63 and 65 in the names of the noble Baronesses, Lady Taylor of Stevenage and Lady Pinnock, who outlined again the position on pension funds. I wanted to support what has been said by the noble Baroness, Lady Pinnock, and the noble Lord, Lord Khan of Burnley. There has been a lot of scaremongering recently about the impact on pension funds, and I wanted to reinforce that with the Minister. Quite frankly, all this talk of pension funds and pensioners being hammered by low or peppercorn ground rents is rubbish, and it should be called out for what it is.
Baroness Scott of Bybrook (Con)
My Lords, I shall take Amendments 63 and 65 together, if noble Lords do not mind, as they both concern ground rents. Amendment 63 would require a report to be laid before Parliament, and Amendment 65 would require the publication of the Government’s response to the recent ground rent consultation and the laying of a Statement before Parliament. Before I move into what I am going to say, I want to say that I am not making any comment on any media speculation, as I said on Monday.
These amendments relate to the issues considered in the Government’s recent consultation entitled Modern Leasehold: Restricting Ground Rent for Existing Leases, which was published on 9 November 2023 and closed on 17 January this year. It sought views on limiting the level of ground rent that residential leaseholders can be required to pay in England and Wales. Noble Lords will be aware that the Government do not believe that it is appropriate that many leaseholders face unregulated ground rents for no clear service in return. There is no requirement for ground rents to be reasonable, and they can cause problems when people want to sell, buy or mortgage their properties.
The Government have already legislated to put an end to ground rents for most new residential properties in England and Wales through the Leasehold Reform (Ground Rent) Act 2022. We have also encouraged work, led by the Competition and Markets Authority, to investigate abuses of the system such as mis-sold “doubling” ground rent leases, securing commitments from freeholders to remove these costly terms, benefitting more than 20,000 leaseholders.
It is not right that many existing leaseholders are still facing these charges for no discernible service in return, which is why we have just consulted on a range of options to cap ground rents for existing residential leases. The Government are currently considering the responses to the consultation and we will set out our policy in due course. I hope noble Lords will understand that it would be inappropriate for me at this point to comment on or pre-empt any decision of the Government before a formal response to the consultation has been published, and that, given where we are, it would be premature to impose the requirements proposed in these two amendments.
The noble Lord, Lord Truscott, is right: we do not think it is appropriate that many leaseholders face these unregulated ground rents for no clear service in return. We recognise that our proposals would have some impact on the freehold market and explored this impact through our consultation. This impact is obviously being factored into the considerations of the options and is being taken into account in reaching our final policy position. The noble Lord has some very clear views on this, which I think we agree with.
At this late hour, I therefore ask the noble Baronesses, Lady Pinnock and Lady Taylor, for their continued patience as we consider what is a very complex issue. I trust that, in the light of the assurances I have given, they will be content not to press their amendments.
Baroness Taylor of Stevenage (Lab)
I am sure the Minister understands that this has dragged on and on, and we are now at a very late stage of a Bill that has already gone all the way through the Commons. Quite frankly, the degree of uncertainty and instability that is being caused to leaseholders—and to freeholders, to be fair to them—is unacceptable. Yet again in this Chamber, we hear the phrase, “in due course”. I do not know what that means; it can mean anything from tomorrow to in three years’ time when we get round to sorting it out. That is not acceptable either.
We had a very detailed report from the Competition and Markets Authority, which roundly condemned the use of ground rents as a mechanism. We have heard in this Chamber over and again that this is money for nothing and that it has resulted in the most dreadful exploitation. The example I gave in Committee on Monday of an elderly couple virtually being held to ransom by the freeholder is absolutely shocking. That will be going on in millions of homes across the country. This is just not acceptable any longer. I hope that the Secretary of State will very rapidly make up his mind as to what he is going to do about this, stop being bulldozed by freeholder interests in his own party, make a decision and get rid of ground rents, once and for all. This would let people sleep easy in their beds, which they have not been able to do while this debate has been going on.
Baroness Scott of Bybrook (Con)
I think there was a question there, and my response is that we went out, quite rightly, to consult, and the consultation did not finish until towards the end of January. This is a complex issue. If we do it badly or wrong then we will make mistakes and these people will potentially be in a more difficult situation. From the end of January to April is not a long time. We are doing it as fast as we can, and we will come back to the House with further details.
Lord Khan of Burnley (Lab)
I understand the response the Minister has given, but she has to understand that this consultation has its own process and in due course we will look at the analysis. I do not know whether I am accidentally calling for another meeting here, but how did we end up with reports in the newspapers? That causes more uncertainty and instability for people in their homes who are getting their information from the media. Surely there needs to be a statement or some clarification through the next stages of the Bill, so that, very early on, we can look at getting a clear, certain message out to the millions of leaseholders who have been adversely affected by the ground rent situation.
Baroness Scott of Bybrook (Con)
The Government have no control over what goes into the media, and it is something that the Government have to accept.
Baroness Pinnock (LD)
Let us end on a positive. I thank the Minister for her response. There is agreement that unregulated ground rents are unacceptable, and that some freeholders are unscrupulous and exploit their leaseholders, holding them to ransom, as the noble Baroness, Lady Taylor of Stevenage, said.
However, it would be really helpful if, as we complete the various stages of the Bill, the Minister could confirm that the Government will be able to bring forward a detailed amendment regarding ground rents before Report; otherwise, those of us who raised this issue in Committee will raise it again on Report. Unfortunately, this will put the Minister in a difficult position, one in which she has to say, “In due course, something is going to turn up”. Let us send a message to the department that “in due course” means “before Report”.